What If You’re Not CEO Material? [Excellent article by David Cohen @davidcohen of TechStars]
http://j.mp/y7qE0u
Realizing Your Astoundingly Great Idea… through Process and Execution.
http://sfist.com/attachments/sfist_jeremy/garage.jpg
Many dream of being the instigator or part of the “Startup Launch”: First Discussions, Initiation, Developing a business and product(s), and most of all Success. What many dreamers don’t realize is that all of these steps are the by-product of the core reason the startup is being formed – a great product or service. It’s not a TV show where Ashton Kutcher claims he’s an “Internet billionaire” and no one questions it; in the real world great startups become great companies by focusing on Execution of ideas into products and services. A startup becomes a sustainable enterprise by repeating the process over and over.
An idea in itself isn’t worth much, and this applies to the tech world more so than most other segments of industry. Because of the vast amounts of publicity lavished on Mark Zuckerberg, Steve Jobs, and the Google twins, many fashion themselves as making a few key steps and then finding themselves on the cover of Time, or at least in a million dollar home.
I often encounter people who have great tech ideas – friends, colleagues, employees, neighbors. Many are very good ideas; almost all of them drift away into the ether, unless someone else executes one of them. Then my friend will inevitably say “I had that idea! They ripped me off!” Or they tell me that I should execute their idea and then give them a percent of the “winnings”.
Ideas without execution are just talk, I’m a culprit also, for many reasons. I used to try to explain this to people when they approach about a tech idea, but it usually just bursts their bubble and they don’t quite hear the message. The act of execution tests whether the idea can become more – it causes validation, formation, proof of concept, exposes fatal flaws, creates adjustments, essentially turns it into reality or the discard pile. This process IS the company, extremely important and often misunderstood.
There are countless examples of startups that begin as one thing then morphed into something different – HP, arguably on of the first Silicon Valley garage startups, was first successful with an audio oscillator, which they built after very little planning or product thought. Their process was correct.
So your original idea is likely to change some anyway through the process. Other people will help take it over the line; welcome them. So please contact me if you’re anywhere along the startup road, and Ill try to help you turn your ideas into things that the world wants.
personal: @tomnora
business: @cowlow
The Importance of BUS DEV
People often undervalue Business Development as a critical function in a startup. What is it? How does it differ from Sales, Marketing, Major Accounts? When is the startup big enough to dedicate a headcount to Business Development?
BusDev is less understood than most titles, and widely ranging in responsibilities. It is the critical glue between sales functions and the senior management. BusDev is relationships, longer term thinking, non-revenue partnerships, communication between Sales, Marketing, Engineering and Finance if you have all of those covered.
BusDev people see the potential connections between your company and several others. They find creative ways to do business or vastly improve business relationships, especially when they can work with BusDev counterparts at target partners. It’s like the 2 lead guitarists of 2 bands playing together going off into the corner and working on just their parts, and relationship. They’re focused on one thing.
BusDev people are also focused on one thing –– taking the businesses beyond simple linear transaction based relationships. They don’t worry about this weeks revenue or finance, etc.
In a smaller or earlier stage startup, the CEO covers most areas that have no dedicated leader, BusDev being the most common unfilled spot. Sometimes this works but often not. The problem is when the CEO is not a good match for this position – in experience, skill set or desire. It also distracts him/her from other CEO functions, and is not as impressive to the client, partners.
So, if you can afford a strong BusDev investment early, it can be a secret weapon that ensures your long term scalability and gets you funded.
Contact me if you’d like to discuss more.
Google vs. Facebook – Part I Who will win?
Long Term Stable Growth
There is much fascinating debate these days about Google(GOOG) vs. Facebook, reminiscent of some of the greatest battles in Silicon Valley over the past 40 years. In these two we have a classic Silicon Valley clash of the titans, meaning we can’t predict a winner, or even if there will be one. This battle has very high stakes for both. Googles current valuation is $200 billion; Facebook is estimated at $50 billion – both big numbers that have continuously soared since their early days. History says the eventually one or both of those numbers will go down, based on which of these two has the leadership to maneuver through the battlefield into more stable, balance long term growth.
First, Google
Google is the older, more mature of the 2, with a much wider footprint, domination of the Internet users life, a new way of thinking by maximizing freemium and claiming karmic high ground. The New Silicon Valley. They have also sustained growth for a decade, distinguishing them from 99% of Silicon Valley startups.
Of course, google has all the inherent problems of many years of success – bloat, too many products, too many markets, too many layers of management, too many employees, too much employee turnover, major fixed expenses, bureaucracy, fading of their “hipness factor”, aging architecture and growing insecurities about their position as King of the Hill. Classic. As long as net income continues to grow, they can overlook or rationalize these problems, but the negative effect of the above issues will eventually hit them; it hits everybody. The magic trick is to come out the other side better. Swapping out their CEO could be a good or bad thing, but that’s often a nervous reaction on both sides of the boardroom table. Google is also too dependent on one source of revenue, ads, taxing one of the oldest rules in the book “Don’t get too much revenue from one place”.
So I believe Google will hit a wall and wobble over the next 3 years. They will make changes, restructure, sell some toys, start looking at numbers very carefully. The first phase will no longer work.
Now baby brother Facebook
Facebook, on the other hand, is the classic up and comer, the position Google was once in. Not just a lucky little brother, but an extremely competent, precocious adolescent that has invented something totally new from what existed. They have thus far methodically monetized and structured their revolution for long term growth better than pioneers like Netscape did in the 1990s. they discovered something that everybody wants, and Mark Zuckermann is proving to be a true long term leader.
But they are a revolution currently, and revolutions eventually end, settle back into normal life. Facebook’s challenge will be to make that transition without stumbling. How will they diversify past their main product once it gets a little tired and some day surpassed? Can they? Facebook’s success has come from a multi-year rollout of membership to their club, one product. Brilliant product. Nothing has grown around the world like this since Coca Cola. There is still plenty of territory to roll out to, but the clock is ticking. What is the follow-on act? This is a tough one to pull off. They may do it, I don’t underestimate Zuckerberg and his team, but it will be very difficult not to become another MySpace or Yahoo.
Google vs. Facebook = Expansion vs. Rollout
So who will win the growth war here? Even if they’re smart enough not to harpoon each other these two companies will be very busy over the next 2-3 years surviving and continuing to grow.
They both have a strong chance, but if I had to pick one it would Google.
Here’s why: Google has a diversified platform with many market leading products (because they are better products) in very competitive markets – Search, Mail, Mobile, App Dev Tools, Image, Storage, Video, Statistics, and Advertising. Google had to overcome existing leaders in every one of these markets.
Facebook, on the other hand, invented their own product and market, and nobody has been able to catch up, not even Google. But in many forms their piece of the pie chart will decrease over time as different services reinvent their market for them. They must shift from rollout to diversification, or face the bell curve.
Like Google, Facebook also is overly dependent on ad revenue, breaking the same rule of growth and stability, and we don’t actually know how stable their revenue/profit curves are. Whatever the numbers, Facebook will have to reinvent itself and break some molds soon without hiccups in their revenue growth. I’m rooting for them, but this seldom happens. Unless you’re Google.
Are you a Decisive Leader?
The last blog entry I wrote [Who’s the Boss? What is a CEO?] made me think about overall business decisiveness and it’s critical role in growing a startup properly. There are many synonyms and attributes of decisiveness – certainty, determination, finality, resolve, authority. But there’s no single formula or magic combination for this quality.
Decisiveness is one of the key skills for the leader of a startup to succeed; not everyone involved, but definitely the leader/CEO. It’s fine if you’re not that type, just be honest about it and find someone to take role. An indecisive leader will get run over by the crowd quickly and lose the respect of those around him/her; better to let someone else run the show and focus on another task.
A strong CEO in an active startup should be making and implementing several decisions every day. The job of CEO of a real operating company includes many lonely times, no matter how many people surround you. But no matter what, the bullseye in on your head.
For most strong leaders decisiveness is an innate quality, a feeling of empowerment and confidence that comes from somewhere within as well as the support of those around you. Some people are just born with it, or into it. A great example is Sophia Amoruso.
You thrive on the pressure of making decisions. Inspiration comes from beating obstacles in your past, overcoming a hardship or two, intense desire to succeed, past (or current) poverty, or some other experience in life where correct decision making took you from bad to good. Also, a startup CEO is usually much more decisive in his/her 2nd or 3rd startup than the first. They’ve “been there before”, understand the forks in the road, have been hardened and/or humbled a little by mistakes.
Lack of decisiveness at the top impedes growth. Lack of decisiveness running a startup usually is related to lack of experience, a different personality, or lack of desire to be that person. Can decisiveness be developed or taught? I think so. Self-confidence?
Probably not so easily acquired. I was quite lucky early in my career to have several great role models (and a few bad ones). Examples and proactive mentoring came from several places for me, some quite early in my career. I’m now trying to give back by advising others and mentoring startups.
So be decisive as the overall leader of your startup and surround yourself with support to make better decisions. Find mentors, delegate, let go of details. Or be honest with yourself if this isn’t you and find find someone qualified whom you trust to take that role and let them run with it.
Your startup will be the winner.