Archives for the month of: October, 2010

OK, I admit it. I have struggled with the search for a cofounder. I’ve gone back and forth about its value over the past two years. Sometimes I think it’s critical to achieve success, and other times I couldn’t be happier I don’t. Guys like Paul Graham as well as history says if you’re solo you’ll probably fail. I understand the reasons why, and I tend to agree with most of them. Thus the reason for the continued search.

I have partnered or cofounded a couple of projects with different people. Bottom line: the only way it works is to find someone who is totally and equally yoked. It’s just like getting married; cofounders should compliment each other’s skills becoming 5x greater together than they would be apart. Otherwise I believe it’s not worth the hassle.

You may have heard about Founder Dating, an invite-only event for pre-screened candidates worthy of being your cofounder. It’s an interesting idea, with some major design flaws that will keep it from ever producing any meaningful partnerships.

Before the event began I was able to see who was attending. While lots of notable companies were represented (Google, Playdom, Yahoo!, MIT), after a quick LinkedIn search it was clear most of these people were similar, not complimentary. Lots of biz dev, project managers, and ‘business guys’ filled the event in Palo Alto last night.

I almost threw up hearing ‘I need a technical co-founder’ or ‘I need some technical guys’. This probably makes me  ill because I’m guilty of saying many many times. To hear it told to me over and over again almost made my ears bleed. I learned through some trial and lots of error that asking for the ‘technical’ guys just doesn’t cut it.

The organizer of the event seemed to have pure motives. The event cost $30 but there were drinks, appetizers, and an empty bar to meet and converse freely. But even they expressed the same thing I kept hearing over and over again; “I’m looking for engineers.”

I feel like hiring or partnering at the startup level is so much about relationships. Can you find the right people at the right point in their career, and convince them you’re the best thing since Google was founded. Considering they’re taking a huge risk on you by joining your company, they need to really trust and believe in YOU. It’s a lot easier for friends, or people that know you to trust you.

Maybe the best event for finding a cofounder is just hanging out with really smart people. I would have preferred to sit around and watch the Heat/Celtics game, or played some videogames. That seems like a much better way to get comfortable than to stand around for 3 hours and have people tell me how cool they are and why I should ‘date’ them.

I tried it so I can cross it off the list on my way back to the grind as a solo founder. Oh wait, I remembered I already have a cofounder….it’s my wife! Thanks Erica, you’re the best cofounder I’ve ever dated. I promise I wasn’t cheating on you.

There is a very interesting interview of Steve Jobs done in 1995 by the Smithsonian Institute.  There are some great lines like “I’ve always felt that death is the greatest invention of life,” and “I do think when people look back on this in a hundred years, they’re going to see this as a remarkable time in history.”

There’s also a section on advice for future entrepreneurs. It’s right on the money.

Question:

What are the factors of success for young people today? What should they avoid?

Steve Jobs:

I get asked this a lot and I have a pretty standard answer which is, a lot of people come to me and say “I want to be an entrepreneur”. And I go “Oh that’s great, what’s your idea?”. And they say “I don’t have one yet”. And I say “I think you should go get a job as a busboy or something until you find something you’re really passionate about because it’s a lot of work”. I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.

It is so hard. You put so much of your life into this thing. There are such rough moments in time that I think most people give up. I don’t blame them. Its really tough and it consumes your life. If you’ve got a family and you’re in the early days of a company, I can’t imagine how one could do it. I’m sure its been done but its rough. Its pretty much an eighteen hour day job, seven days a week for awhile.

Unless you have a lot of passion about this, you’re not going to survive. You’re going to give it up. So you’ve got to have an idea, or a problem or a wrong that you want to right that you’re passionate about otherwise you’re not going to have the perseverance to stick it through. I think that’s half the battle right there.

A couple of weeks ago I decided to write about my $600 mistake philosophy. It’s the idea that I’ll try something completely risky and unproven as long as the worst thing that happens is a $600 lose. This could be working with a new vender or contractor. This could be trying a piece of software that seems really promising. This could mean advertising in a new unproven way. This could mean buying a plane ticket to meet about a promising opportunity. $600 is my threshold for paying enough to learn from a mistake, but not enough to cripple my business.

I was so concerned with wasting a single dollar to kickoff entrepreneurial ventures before leaving corporate America, that I was often hand tied on making any meaningful progress. When I would attempt to build ideas or work through opportunities with no margin for error, I often failed before I began. I would refuse to pay for a service that I could perform even though it would save critical time. I wouldn’t pull the trigger until I’d found the perfect person to work with on it and considering my prices were lower than market rate, this became almost impossible to find a great partner unless they were a friend (which has its own problems).

I hope I don’t sound like I throw around $600. I really don’t. Talk to anyone that works with me and you’ll find I fight hard on negotiating as well as trying to be fair. On the flip side some people reading this might say that you can’t show any meaningful results with a $600 investment. In some cases/company phases that is probably true.   But for a startup you can’t be afraid to take some risks that require small injections of capital. Find the middle ground for learning a hard lesson but not collapsing your company.

On the flipside I’m sure some people are laughing that I consider $600 to be anything at all. I used to have one of those ballon budgets, and I understand when you’re spending $1MM on marketing alone, wasting $600 is small potatoes. But if you have a $1MM budget, you should spend $20k on 5-10 smaller one off projects that may or may not produce something meaning.  At that rate if it produces nothing no one will scream for your head, but if it does produce then at a $2k price tag, at best you’ll be the king of the office. At worst you’ll be looked at as innovating and taking risks.

I mentioned that I was going to write this a couple of weeks ago after I’d spent $600 on something that I knew I should cut off. Rather than taking the hard step and killing the project, I let the cost exceed the $1,000 mark (the mental mark where my attitude completely changes). When I test something/someone that produces nothing meaningful that costs more than $1,000 it creates a small tumor in my brain that takes weeks/months to go away. I may have a couple of new tumors when I really shouldn’t have. Take enough risks to learn valuable lessons, but be smart enough to cut things off before those mistakes turn into devastating errors.

Sean told story after story about life in Silicon Valley, parties at Stanford…friends who’d become billionaires.” Line from The Social Network movie.

The past few months has created a lot of discussion around WHERE is the best place to start a company. Silicon Valley, and specifically Palo Alto has been the Mecca of the startup world for the past 50 years as the birthplace for companies like HP, Facebook, VMWare and others. But other communities specifically across the US have rallied for respect and equal billing.

Chris Dixon generally presents a solid argument for why NYC is a major contender, and Brad Feld seems to be on a constant recruiting pitch for the thriving Boulder tech community – a place I’ve never been to but would love to visit (someone please invite me).

Despite the rise in these new communities, The Social Network movie reaffirms Silicon Valley, and specifically Palo Alto as the startup capital of the world. It will create a new breed of entrepeneurs that will flood the valley in the coming years who otherwise would not have.

For those of you that haven’t seen it (SPOILER ALERT! Mark Zuckerberg dies at the end of the movie!) the movie is centered around the young Facebook founder and his utter disregard (true or not) for basically anyone and everyone that stands in his way. This is repeated in the movie with 10 different people; except one. Sean Parker (played by Justin Timberlake) was the one person able to impress Zuck from the moment they first met. As also reported in “The Facebook Effect“, this interaction and conversation about building a massive company in Silicon Valley led Zuck to pack up and move operations out to Palo Alto for the summer. Of course the rest is history and they never left after that .

Some recent trends may put Silicon Valley in a difficult place. The CEO of Silicon Valley Joint Venture Russ Hancock is particularly negative on the current projections of where Silicon Valley is headed. He argues many ‘innovation metrics’ are down including venture capital, fewer patents, and influx of foreign talent.

If this movie has a fraction of the success it’s been predicted to have, entrepreneurs in high schools and colleges around the county will reflect on the path that Facebook took and will flock to SV in greater numbers with the mantra of “That’s how Facebook did it.”

Many are already aware of the unique opportunities of this area and will come here regardless. But this movie, if successful (looking good so far) will span a new breed of entrepreneurs in Silicon Valley.

After reading Yahoo! CEO Carol Bartz internal email tonight, my resolution to refuse to magnetic pull to use buzz words is stronger than ever. Buzz words in corporate America are like the friend that shows up to your parties, in spite of everyone attending agreeing beforehand he wasn’t invited. Buzz words tear down trust. Buzz words reduce credibility. Buzz words are great for job interviews and impressing your girlfriend’s father, but not running companies.

Carol Bartz generally seems to have a no nonsense attitude (which I really appreciate), but not this time. Here are a couple of the gems from the email:

“We’re taking this opportunity to double down on these efforts.” Translation: “Everyone has been slacking off the last few days. Get back to work.”

“Hilary’s successor will be maniacally focused on growing our top line in the region.” Translation: “We’ve got no one to replace her and I’m kind of scared.”

“So everyone stay calm–we have a good plan in place.” Translation: “I’m as panicked as you are. Start beefing up your LinkedIn profile.”

“In fact, I’m more fired up than ever and can roll with the punches. Translation: “This is the lowest point in my career.”

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