tools for building the future
And do you trust that the people you’re following can get you there?
Have they been there before?
Has anyone been there before?
For interesting work, there probably isn’t a map of the route, so you’ll looking for:
Here’s Seth Godin with some of the best advice I’ve heard for drawing (finishing) lines. It’s especially relevant for businesses.
Q: I’m wondering about personal financing your company and where you draw the line if you’re funding it yourself?
Rule number one is you never put up your house. Don’t laugh. This means you can’t sign a personal guarantee on anything. “You want to rent this? Ok I’ll rent this, but I’m not signing a personal guarantee on anything.”
I have not signed a personal guarantee. I was bankrupt for eight years. I was this close from having to close down for eight years and I still never signed a personal guarantee for anything. That is a line I have chosen to never cross and I encourage everyone to do. The minute you do, suddenly there’s a 3-year-old at home who’s going to have to live on the street if you make a mistake. I just don’t know how to take risks when that’s at stake.
Then the advice that I give people is, if we’re going to be intentional about this, you need to write down a number and a period of time.
The number, it can be as big a number as you want, is the maximum amount of money under any circumstances no matter what that you’re willing to put in. And when you hit that number you can’t put in another penny.
People hate this. They say, “But what if something blah, blah, blah.” NO. There just has to be a number.
The second one is, “How much time before you give up?” And again, it can be 20 years. Fine. But you can’t say, “19 years and 11 months into it, but wait there’s one more deal that might come through.”
You just have those two numbers because if those two numbers are in place and your spouse is aligned with it, you never have to worry about it again. It’s off the table.
This whole situational thing, “I just need $2,000 more,” that’s lying to yourself. The discipline early on is so valuable because then you can spend 100% of your time focusing.
…So you raise more money than you think you need and you treat it like it’s the last money you’re ever going to have. It’s way better than always wondering where that next nickel is going to come from.
Seth Godin – Start Up School Ep 11: Cash Flow
From a transcript by Kevin Evans
In the probably-quite-unlikely event that your project will last longer than you do – or at least lasts longer than your desire or ability to keep it alive – you’ll need to have a personal finishing line in mind.
Making prominence your aim is like building a skyscraper without laying foundations: you might make something tall, but it’s unlikely to last and it will almost certainly cause damage when it collapses.
Rather than trying to stick out from the landscape on your own, far better to aim at lifting those around you and be happily surprised if you end up as a high-point on an interesting hill, held up by others and holding them up in turn.
Mountains have long histories and relationships and contribution take time. The only prominence worth having is a side effect of the slow geology of generous relationships.
Some ideas for strengthening your connections within a group of people or scene:
Noun
2 A person who vigorously supports or defends a person or cause.
‘he became the determined champion of a free press’
2.1 historical A knight who fought in single combat on behalf of the monarch.Verb
OED
Vigorously support or defend the cause of. ‘he championed the rights of the working class and the poor’
Now this type of champion is worth having. Not necessarily a winner in themselves, but someone who helps someone else to win. They know you – probably including a realistic assessment of your flaws – but know that you, your team, your purpose are still worth fighting for.
Your organisation needs friends, and it needs allies, but it would really benefit from some champions. Champions help you out, tell you what you need and help you get it – often by telling others about what you need and suggesting that they give it to you.
If you’re not sure if you’ve got a champion, you don’t. Ask other people if they’ve got any amazing board members, friends, mentors or supporters, and try to get to a meeting (breakfast of champions?) and see them in action.
Don’t try to convince the lukewarm – find a champion. They’ll fight for your success, and they might just change the game.
If you can find a champion, well… that’s champion.*
*Adjective. British , informal, dialect: Excellent. ‘‘Thank ye, lad,’ the farmer said. ‘That’s champion.’’
More from Marc Andreessen’s brilliant interview on The Moment with Brian Koppelman. This time: how breaking into the network in order to get funding isn’t so much a symptom of cronyism as a test of fundamental attributes that a fundraiser will need to be successful.
Marc: In the financing business, like, we are dying to finance the next great startup. Like, people talk about like venture capitalists; it’s you gotta run on these gauntlets to do it or like it’s so, you know, they fund all this…you know, we’re dying to fund the next Google. Like, we can’t wait. So just for god’s sake, figure out a way to build it and bring it to us. Please!
Brian: Right. Though, to get to you, somebody has to be credibly recommended to you.
Marc: Okay, so then this gets to a concept that I talked… So this goes directly what we’re talking about. So you described the process of getting you to read somebody’s screenplay. And basically it’s they have to be a referral. There should be some sort of warm referral.
Brian: Either a referral, or the only other way is over a period of time, you’ve impressed me somehow yourself.
Marc: Yeah, exactly right, independent of this specific thing that you’re trying to create. So, it’s sort of a very similar thing in venture, which is, I mean, there are certain people where it’s just like, the reputation precedes them, and they want to come in to pitch us, we’re gonna take the pitch. And some of those people, by the way, you discover on Twitter. Like, so that’s a real thing.
But more generally, it’s a referral business. And I figured this out early on, when we were starting, I talked to friends of mine at one of the top firms in the industry that’s now a 50-year-old venture firm, one of these legendary firms and they said, in the entire history of the venture firm, they funded exactly one startup pitch that came in cold, right, over 50 years. Now, they funded like a thousand that came in warm and they funded one that came in cold.
And so anyway, so that’s like, okay, well, again, isn’t that unfair? Like, okay.
So that’s why I get into what I call the test, with a capital T, The Test. And The Test is basically, the test to get to us, to get into VC is can you get one warm introduction? Just one. And in our world, you know, your world is agents or whatever or other creatives — in our world it’s an angel investor, it’s a seed funder, it’s a professor, it’s a manager at one of the big existing tech companies, right?
Brian: Someone you think is smart.
Marc: Yeah, somebody I think is smart.
Brian: And knows people.
Marc: But there are thousands of those people out there who I will take that call for.
Brian: Like, I could call you and tell you, but somebody… By the way, I won’t. Let me just say, clearly, I will not!! <laughs> But you have this world…
Marc: You could. Somebody, like, if a director of — I don’t know, there’s like, 1,000 executives at Facebook; Facebook is like a 40,000-person company, it has like, 1,000 executives at Facebook in decision-making capacity — if any one of the thousand calls up and says, “I got this kid I think you should meet.” It’s like, “Yes, I’ll take that meeting.” So it’s like, and again, it’s just one, right?
And so the test is, can you get one person to refer you, right? And it’s like, okay, like… think of the number of ways you could get one person to refer you, you could go get a job and you could go impress a manager and then that manager makes the call.
Brian: That is an incredibly good test, by the way.
Marc: And if you can’t pass the test, The Test, to get a warm inbound referral into a venture firm, then what that indicates is, you are gonna have a hell of a time as an entrepreneur. You are gonna hate being an entrepreneur because guess what you have to do, once you raise money. We’re the easy — I always say like, we’re the easy part of the process.
Once you raise money from us is when the pain begins. And the pain is trying to get other people to say yes to you. The pain specifically is trying to get people to work for you. And they all have choices, right? And so you got to convince them to come work for instead of somebody else; to try to get a customer to buy a product, and the customers are overwhelmed with new products they could buy… and so to actually sell something to somebody. And then at some point, you’re gonna have to raise money again, right? And you raise money from new people each round. At some point you’re gonna have to go get somebody else to say yes.
And so, if you can’t get a warm inbound to us, how are you possibly going to be able to function in the environment in which you’re now gonna be operating, where you’re gonna have to get all these other people to do stuff for you. And so that’s the thing.
Marc Andreessen and Brian Koppelman
Indonesian saying.
“As long as the kitchen is smoking.”
Um…
“As long as there’s smoke from the kitchen (fireplace).” ?
“As long as the hearth is burning.”
… which is a way of saying, among other things, the important thing is that the important things keep happening… or that you’ve got to do what it takes to keep things going.
Do what it takes, and do a little every day. Just a step – enough progress that you don’t stop progressing. Keep the fire lit.
Never quit smoking.**
*more correctly – but less idiomatically – spelt ‘ngepul’
**But don’t burn the place down
Here’s more on ‘scenius’ – this time from Eric Schmidt:
The world is much smaller than it seems. If you’re an outsider looking at our world [the world of tech], somehow you think it’s this vast world, but to me it seems like about a hundred people, and they all know each other, they’ve all been on each other’s boards, they were all working towards a common goal.
I’ve since learned that this is how industries develop. So when you go back to the starting of the automobile industry or the starting of any other industry, it was a small community and everyone benefited by working together even if they were competing.
As an aside, when I first came to Google, I developed a habit of calling Terry Semel, who was the then CEO of Yahoo! who was our primary competitor, to congratulate him for every deal he got. And he developed the habit of calling me to congratulate me for my getting every deal. And the reason, aside from being a good person, which he was, was that we knew that if he got a customer to buy their product, we would shortly follow into that account. And he knew that if we got a customer using this, he knew that he would shortly follow into the account.
So there’s a real camaraderie around the building of these new network platforms … and they’re a relatively small group for much of their time.
Eric Schmidt, former CEO of Google – The Tim Ferriss Show Ep. #367
This is a great cut-the-crap book about management and building a company. It’s most relevant to the the tech world, but there are plenty of gems here that are relevant to anyone – he’s especially good on shaping your culture (hint: yoga at work is not your organisational culture).
Here’s the introduction:
Every time I read a management or self-help book, I find myself saying “That’s fine, but that wasn’t really the hard thing about the situation.”
The hard thing isn’t setting a big, hairy, audacious goal. The hard thing is laying people off when you miss the big goal.
The hard thing isn’t hiring great people. The hard thing is when those “great people” develop a sense of entitlement and start demanding unreasonable things.
The hard thing isn’t setting up an organizational chart. The hard thing is getting people to communicate within the organization that you just designed.
The hard thing isn’t dreaming big. The hard thing is waking up in he middle of the night in a cold sweat when your dream turns into a nightmare.
The problem with these books is that they attempt to provide a recipe for challenges that have no recipes. There’s no recipe for really complicated, dynamic situations. There’s no recipe for building a high-tech company; there’s no recipe for leading a group of people out of trouble; there’s no recipe for making hit songs; there’s no recipe for running for president … and there’s no recipe for motivating people when your business has turned to crap.
That’s the hard thing about hard things: there is no formula for dealing with them.
Nonetheless, there are many bits of advice and experience that can help with the hard things.
I do not attempt to present a formula in this book. Instead, I present my story and the difficulties that I have faced.
…
I share my experiences in the hope of providing clues and inspiration for others who find themselves in the struggle to build something out of nothing.
Ben Horowitz – The Hard Thing About Hard Things
Highly recommend.