Steve Blank has a good post today called Failure and Redemption, which he introduces with this:
We give abundant advice to founders about how to make startups succeed yet we offer few models about dealing with failure. So here’s mine.
Steve’s experience was Rocket Science Games, which raised $35 million and a cover story in Wired Magazine before failing. He writes about shock, denial, anger, blame, depression, acceptance, and, finally, insight. Read more
Warren Buffett photo via Wikipedia
Great entrepreneurs have long been the epitome of people with a great work ethic. But many complain to me that it is becoming harder and harder to find team members and employees who demonstrate and live the same culture. Somewhere along the way, work ethic seems to have been replaced by a pervasive sense of entitlement, especially in the younger generations.
Now is the time to assess your own situation, set out clearly what you expect from each and every team member, and unleash the entrepreneur inside every employee. As a guide, I enjoyed the analysis of Eric Chester, in his book “Reviving Work Ethic,” which provides a leader’s guide to ending entitlement and restoring pride in the emerging workforce. Read more
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Go-to people get things done. As an entrepreneur, you need these people, and you need to be one, if you expect your startup to be successful. That may be easier said than done, since resumes do not tell the story, and without real nurturing, the best people won’t stay around long.
To highlight how rare this breed is, Jeffrey Gandz of the Richard Ivey School of Business relates a quote from a new CEO in a large company, “I have more than 1000 people in my head office organization, 900 can tell me something’s gone wrong, 90 can tell me what’s gone wrong, 9 can tell me why it went wrong, and one can actually fix it!” Read more
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For most new high-tech products, the first customers are always “early adopters.” The conventional wisdom is that early adopters are the ideal target for new products, to get business rolling. I see two pitfalls with any concerted focus on early adopters; first, the size of this group may not be as large as you think, and secondly, their feedback may lead you directly away from your real target market of mainstream customers.
The term “early adopters” relates to the people who are eager to try almost any new technology products, and originates from Everett M. Rogers’ Diffusion of Innovations book. Early adopters are usually no more than 10%-15% of the ultimate market potential, and marketing to them may be necessary, but not sufficient in marketing to the mainstream. Witness the market struggle for 3DTV acceptance over the past couple of years. Read more
I suspect this is one of those provocative posts that gets misquoted, misaligned and misunderstood, and definitely not to be taken at face value. Still, read Avoiding Undue Diligence: My Strange Approach To Angel Investing, in which Dharmesh Shah argues against due diligence in angel investment.
Robert Jordan image via HowTheyDidIt.com
Entrepreneurs are a notoriously stubborn (some say confident) group of people, so I see many of them making the same mistakes that predecessors have made. Thus I’m convinced that it’s useful for all of you to step back from time to time, and listen to some sage advice from people who have been there and enjoyed success.
Recently, as I was perusing a book by Robert Jordan, titled “How They Did It: Billion Dollar Insights” I saw some wisdom and inspiration that made sense. All the quotes come from entrepreneurs who have built and sold at least one $100 million company. Of course, you can always argue that each was just in the right place at the right time, or was lucky, or had a rich uncle to get them started, but it would be smarter to listen to the messages: Read more
Last month, the SEC announced it was taking action regarding Netflix’ (NFLX) securities compliance based on a Facebook status update posted by CEO Reed Hastings. The move came as a shock to many in the tech business community, in which we’ve become accustomed to real-time disclosure by company executives through social media. What could be wrong with more transparency?
To understand the SEC’s point of view, it’s necessary to review the principles underlying securities law in the United States. Compressing 80 years of history into a paragraph, securities regulation here is fundamentally a disclosure-based system. With a few exceptions (notably corporate governance requirements imposed by the Sarbanes-Oxley Act in 2002), beginning with the original Securities Act of 1933, Congress and the SEC adopted a philosophy that financial markets work best when investors are free to make their own decisions based on timely, complete and accurate disclosure by publicly traded companies. Modern theories of economics and finance teach us that in a world of perfect information, the market will decide what a fair price is for any company’s stock at any point in time based on its current financial condition, results of past operations, analysts’ forecasts of future performance, industry conditions and so on.
The key words worth repeating here are “perfect information.” Like all forms of perfection in an imperfect world, it exists as an aspirational goal, not in reality. Certain people inside a company will always know more than the general public. This is why insider trading can be a criminal act: Trading on the basis of material nonpublic information that would affect the stock price is a form of cheating, taking advantage of those who lack access to the same information. The person or business on the other end of an insider trade is at an automatic disadvantage.