Scott Berkun is emerging on top of the dwindling pile of the Internet authenticity. I have been keeping an eye on his honest talk for years and it is reassuring to see him still being consistent and relentless. Conferences is a big subject I meant to write about. Hopefully I will, when I am not in danger of choking on the induced negativity. Here Scott writes on Why conferences must talk about failure:
“In many cases I bet people learn more from hearing people they respect talk about their mistakes, than hearing people tell perfectly fake, boring, takeaway free stories of things going perfectly well (e.g. lies). All innovators fail more than they succeed, and thrive on experiments which mostly go wrong, often on purpose. It’s the only way to learn something no one else knows.”
I like this “The Next Small Thing” illustration by Adrian Tomine. This reminds me about the quote I just seen on Seth’s blog: “Big ideas…are little ideas that no one killed too soon.”
I don’t think there are big or small ideas. They all start the same, with a dream. There is an hour long podcast with Paul Graham by Russ Roberts. Paul says that when looking for an invention or a startup team, they go completely blind, experience taught them that they have no any idea what will take off. There is only one remedy or solution, you have to keep on trying, keep nurturing the process.
But back to the illustration. It’s so New Yorkish, looks like the East Village. The all dark windows on the second and third floors make the building look brighter, as if reflecting the street lights and still contrast with the glow of the storefront windows. The understated iconic objects: a fire hydrant, a metal basement hatch, a bicycle rack, a garbage can, a ladder, a green tree. The black street and the black outline of the city frame the stage. Indeed there is nothing bigger than our vantage point on the world and it’s biggest mystery.
by Ben Atlas on 09.14.2009.8:13am · 1 comment
I once walked into a startup office and the owner of the infant business proudly displayed to me a 3” binder full of NDAs –“even a janitor signs one”, he said. At the same time this person was not asking or perhaps listening to what people had to say about his idea. The fate of that startup was a foregone conclusion. Chris Dixon argues against secrecy, specifically he talks about startups.To paraphrase Chris, stealing and implementing and idea is highly unlikely, not benefiting from the feedback people can give you about an idea is detrimental. Why you shouldn’t keep your startup idea secret:
“First of all, most people will probably think your idea is stupid. This does not mean your idea is stupid. In fact, if everyone loves your idea, I might be worried that it’s not forward thinking enough.”
Sir Christopher Wren, The Monument Design, London
The more talented somebody is, the less they need the props is one of the chapters of Hugh’s new book Ignore Everybody. Hugh calls this a “Pillar Management”. The chapter resonates with me so strongly:
“Meeting a person who wrote a masterpiece on the back of a deli menu would not surprise me. Meeting a person who wrote a masterpiece with a silver Cartier fountain pen on an antique writing table in an airy SoHo loft would SERIOUSLY surprise me.
Abraham Lincoln wrote The Gettysberg Address on the back of his paper lunch bag, sitting on a park bench.
James Joyce wrote with a simple pencil and notebook. Somebody else did the typing.
Van Gough never started a painting with more than six colors on his palette…”
And this poetic marvel brings me to the illustrative post in Entrepreneurs: Beware the curse of the new building by a former startup CEO Steve Blank. He describes that moving into a new fancy building was detrimental to his startup. Steve first outlines the reasons for the move:
“Engineers were packed in cubicles or desks right on top of each other? Now every engineer can have their own office.
We can’t bring customers to this rundown building. The new building needs to reflect that we’re a successful and established company.
The lobby of the last building didn’t “represent” the company in a professional manner. Lets “do it right” and have a lobby and reception area that projects a professional image.
We had used, crummy and uncomfortable furniture. Lets get comfortable chairs and great new desks for everyone. None of this used stuff.
The last building has stained carpets and walls that haven’t been painted in years. Now we can pick out carpets that look good and feel good and we can have clean walls with great artwork and murals.
We didn’t have enough conference rooms. Lets make sure that we have plenty of conference rooms.
Everyone left the building for lunch. We need our own cafeteria so employees don’t have to leave the building.”
And then Steve list cultural problems brought about by the new building, this is your classic “pillar” problem:
“While offices for everyone sound good on paper, moving everyone out of cubicles destroyed a culture of tight-knit interaction and communication. Individuals within departments were isolated, and the size and scale of the building isolated departments from each other.
The new building telegraphed to our employees, “We’ve arrived. We’re no longer a small struggling startup. You can stop working like a startup and start working like a big company.”
We started to believe that the new building was a reflection of the company’s (and our own) success. We took our eye off the business. We thought that since we in such a fine building, we were geniuses, and the business would take care of itself.”
As this subject is somehow close my expertise I would say that there are two failures here, one is the “pillar problem” but another is the failure of the process of design and architecture that is irrevocably broken. Imagine if Apple would design and custom iPhone for every customer? The engineers would meet with a client and follow precise customer instruction in creating a tailored device. Everyone understands that not only it would be a monumental waste of time but the devices itself would be a disaster, the client doesn’t even know what he wants, can’t imagine the unexplored possibly of a new invention. In fact often architectural clients are griped by fear of making “cast in stone decisions” and they deliberately guide architects backwards. They don’t have mental tools to design an iPhone or a building. You get what you pay for and then you pay for what you get. So part of what failed Steve was the “pillar problem” but bigger part is the process of design. In fact if there was a mass produced modular “startup building” that people bought like they buy an iPhone, a sleek contemporary, efficient building, than most of the problems Steve Blank describes would go away and the transition to such a building would have been justified and smooth.
Gaetano Brunetti, Decoration for the side of a sedan chair. 1758
Pure genius by Paul Graham – The trouble with the Segway. You need to read the whole thing but let me start (finish really) with this quote:
“The Segway hasn’t delivered on its initial promise, to put it mildly. There are several reasons why, but one is that people don’t want to be seen riding them. Someone riding a Segway looks like a dork.”
And the anatomy of the “it”:
“Curiously enough, what got Segway into this problem was that the company was itself a kind of Segway. It was too easy for them; they were too successful raising money. If they’d had to grow the company gradually, by iterating through several versions they sold to real users, they’d have learned pretty quickly that people looked stupid riding them. Instead they had enough to work in secret. They had focus groups aplenty, I’m sure, but they didn’t have the people yelling insults out of cars. So they never realized they were zooming confidently down a blind alley.”
A side note about Sedans. Things often come in batches. There is a sedan chair that figures prominently in the Aguirre, the Wrath of God film, and then someone asked me about the name “Sedan” as it relates to automobiles and now Paul Graham compares Segway to a Sedan Chair. But I digress.
This is sort of the trouble with every modern building and especially the buildings designed by the so called Star-architects are Segways.
- People make erroneous conclusion about a building based on looks or even a photograph. There is no feedback in architecture. Instead of understanding how a building breaths, how does it interact with its neighbors, how the electrical system functions under a load, people reduce a complex structure to a photo taken on a sunny morning a week after completion.
- The inhabitants of the buildings are often reluctant to report the flaws associated with the biggest investments of their lives. It’s too late to report back anyway and frankly no one is interested.
- A Star-architect might be as big of a genius as Dean Kamen. But if there is no live testing, no data on how the structure interacts with the real environment, the genius is worthless.
- There is no substitute to trial and error. No trial – all of it is an error unless it’s a mad luck and that doesn’t happen too often.
Now you know.
Image licensed courtesy of Picture Library of the Royal Academy of Arts
Akamai CEO Paul Sagan yesterday complained about the Sarbanes Oxley act. He mentioned that while the act did not prevent the financial abuses by AIG, etc. the regulation are a significant drag on business. Paul said that in the early days of the implementation of the act Akamai spent up to 2% of the revenue (millions $) on compliance.
There is also this telling reflection of the devastating Sarbanes Oxley impact on the Israeli Tech by Sarah Lacy – Risk Aversion And The Perils Of Selling Too Early (Israeli Startups, Part II):
“SarbOx put a chill on small-but-growing companies’ ability to go public on the Nasdaq. The costs of being SarbOx-compliant are so high, that unless you have more than $40 million or so in annual revenues and strong growth, it’s just not cost effective. And other regulations surrounding the Chinese Walls between research and trading mean that small companies get little research coverage and are too thinly traded to really be considered liquid stocks.
This has hurt the Valley, when it comes to returns, for sure. But the Valley also is replete with large companies that buy each other for enough money that investors can eke out enough to keep going. Geographic proximity does help in working these kinds of things out. (You think YouTube didn’t benefit from sharing an investor with Google? VCs actually count this as one of their so-called “value adds.”) A good number of European companies have gotten around the SarbOx problem by going public on the London exchange over the last few years, to the extent where several articles were written about the London Stock Exchange becoming a bigger financial force than the Nasdaq.
So if it was a problem for all startups, why do I bring it up in relation to Israel? Because pre-Sarbanes Oxley, Israel had more Nasdaq-traded companies than any other country. Outside the Valley, they were, by definition, the most vulnerable to the change.”
I would like to add that IPO exist definitely is a significant VC marker but equally important is the stock trajectory over time. I suspect that dotcom legacy wealth reduction on the open market by the Israeli NASDAQ listed companies is momentous.
One of the questions to the Akamai CEO Paul Sagan yesterday was if he regrets not having his company based in the Silicon Valley (Akamai has an office in San Mateo). Paul said they are happy to be next to the School that ‘technically’ spun them off (MIT), etc. Yet I didn’t hear enough conviction in the answer. Paul complained jokingly about the New England January and about the People’s Republic of Cambridge regulations that don’t even allow Akamai or Goolge, etc to have a prominent sign on the buildings. Paul significantly mentioned that Boston/Cambridge is in danger of loosing the critical mass required for a thriving tech culture.
I always think about this and more recently in the context of the notable blogging debut by Sarah Lacy who just joined Tech Crunch from the Business Week – Now that China Is the New Israel…What’s Israel? The post is about poor nominal investments returns on the Israeli startups:
“By 2004, an executive from Silicon Valley Bank was quoted in the San Francisco Chronicle after leading a contingent of VCs back to the Holy Land saying Israel was poised to explode again. He crowed that the crash and violence aside, Israel was getting more venture money than anywhere other than Silicon Valley and Boston and it was only ramping up.
But it turned out, he was wrong. Money continued to invest along the same $1.2 billion-to-$1.4 billion a year range, and returns fell off a cliff. Israeli companies have raised just over $10 billion since the beginning 2001, but acquisitions and IPOs have returned just over $860 million over that almost eight-and-a-half-year period.”
(Some interesting explanations for this are outlined in Sarah Lacy’s second post – Risk Aversion And The Perils Of Selling Too Early (Israeli Startups, Part II). Yet I find this quote in the post particularly illuminating:
“In sheer numbers, Israel’s place on the global scale of investing has been dwarfed by China, and matched by the United Kingdom. And after three days of talking to dozens of entrepreneurs and investors in Tel Aviv, this seems like a country wandering in the desert, looking for a new tech movement to own and dominate.
What happened to Israel is a bit like what happened to Boston-the story and opportunity moved away from what the city’s entrepreneurs were good at. In the case of Israel, security and encryption was always a strength, but that’s not the growth industry that it was. In the case of Boston, enterprise technologies and telecom were always strengths. Now, as media has become the story of the last boom, it’s not a surprise New York surpassed Boston in the amount of venture capital raised.”
The energy is definitely in flux (I can feel it) but those fascinating broad strokes are perhaps too general. What are the NY companies at the forefront of the media boom? Will it survive the Wall St. downturn? What’s next?
P.S. Sarbanes Oxley backlash is Growing
In light of the fact that Y Combinator has abandoned Boston a new essay by Paul Graham is fascinating – Can You Buy a Silicon Valley? Maybe.
“For the price of a football stadium, any town that was decent to live in could make itself one of the biggest startup hubs in the world.
What’s more, it wouldn’t take very long. You could probably do it in five years. During the term of one mayor. And it would get easier over time, because the more startups you had in town, the less it would take to get new ones to move there. By the time you had a thousand startups in town, the VCs wouldn’t be trying so hard to get them to move to Silicon Valley; instead they’d be opening local offices. Then you’d really be in good shape. You’d have started a self-sustaining chain reaction like the one that drives the Valley.”
Meanwhile Max Levchin Is Bored With Silicon Valley Startups and moving to NYC. “Max is unimpressed with the level of innovation in Silicon Valley these days. They’re too constrained by Web 2.0 conventions: status updating, comments, friend lists, fans, gradient icons, and feeds.”
by Ben Atlas on 02.22.2009.12:40pm · 1 comment
