One of my blog readers – Boaz Fletcher – sent me an awesome video this morning from RSA Animate. It’s 11 minutes long and is a fascinating lecture by Dan Pink about The Surprising Truth About What Motivates Us. I love the RSA Animate format – an artist animates the talk on a giant whiteboard in real time.
In this case Pink takes on the question of “Does More Money Motivate Higher Performance?” In the first few minutes he shows that while this works for tasks requiring mechanical skill, this does not work for tasks that require even rudimentary cognitive skill. In fact, in these cases there is an negative correlation between greater monetary reward and increased performance. It’s counterintuitive, but the talk illustrates it beautifully with several examples that will appeal to any technology entrepreneur.
There are several deeply insightful points including the notion that we crave autonomy and mastery in addition to simply making a contribution and getting rewarded economically for it. Furthermore, if the “profit motive” gets unmoored from the “purpose motive”, bad things happen.
Ultimately Pink makes a good case that as managers and entrepreneurs, we need to get past the ideology of using carrots and sticks to motivate people. Grab 11 minutes and learn something important today.
I promise I’ll write something thoughtful tomorrow and not torture you with more video and audio.
Over the weekend, I did a fun interview with Howard Lindzon on StockTwits TV during his annual Lindzonpalooza event. We covered a wide range of entrepreneurial topics and gave each other plenty of good natured shit. Eek – I’m a looking a little chunky – note to self: more running, more swimming, less eating. Or maybe it was just the camera.
This afternoon I did an interview with Jon Hansen on Blog Talk Radio about an article that Ariana Huffington wrote on the Huffington Post titled When It Comes to Innovation, Is America Becoming a Third World Country? Jon does a good, thoughtful, long form interview.
And – as a special bonus, I met Alan Levy, the co-founder and CEO of BlogTalkRadio, at Lindzonpalooza. What an awesomely small world.
Simon Sinek’s TED Talk from TedxPuget Sound (Sept 2009) has been posted and is just awesome. He starts out with the question “Why is Apple so innovative,“ Why is it that Martin Luther King led the civil rights movement,” and “Why is it that the Wright Brothers were able to figure out controlled power manned flight?”
He answers this by describing something he calls the Golden Circle:
Every single organization knows WHAT they do. Some know HOW they do it. Very few people and organizations know WHY they do what they do, where WHY is “what’s your purpose, your cause, your belief; why do you get out of bed in the morning; why should anyone care.”
Most people start with the WHAT, go to the HOW, and end with the WHY. Sinek makes the very clear point in this video, and on his Start With Why web site, that great people and organizations start with the WHY.
Find a quiet space and listen carefully to this TED Talk for 18 minutes. Then spend at least the next 12 minutes thinking about your WHY.
Over the weekend, Mark Suster wrote a great post titled How To Communicate with your Investors between Board Meetings. Mark continues to just tear it up with great advice for entrepreneurs. However, he left out one thing from the post – which is one of my favorite pieces of advice for entrepreneurs.
Give your venture capitalists (and board members) assignments
Mark alludes to this in many of his suggestions but he never comes out and says it. And, amazingly to me, many entrepreneurs either don’t ever think of this or don’t feel comfortable doing it. They should.
Most VCs will quickly say that they want to help the companies they invest in to success. Some will go further and say things like “I’ll do anything I can to help my companies.” Rarely have I heard a VC say something like “My plan is to just hang around, go to board meetings, ask a few nonsensical, low insight, rhetorical questions, eat the crummy food, and then disappear until the next board meeting.” However, as any entrepreneur who has ever worked with multiple VCs knows, the statements a VC makes (or doesn’t make) doesn’t necessarily correspond to his behavior.
I think you can break this cycle early in the life of your relationship with your VCs by giving them assignments. At the end of the first board meeting, spend some time talking about your expectations for your board members (including your VCs), ask if they are reasonable, and then go around the table and ask each board member what they’d like to specifically help with between now and the next board meeting. Explain that you want to develop a cycle of accountability for each board member to the company and use this to (a) develop deep engagement from each board member between meetings, (b) benefit from the experience and wisdom of each board member on a continual basis, and (c) set a strong tone for the leadership team (and the company) that everyone has functional responsibilities that they are held accountable to. Acknowledge that it will take a few board meetings to get into a good rhythm with this, but be clear that you’ll spend a little time at the next board meeting going through individual assignments, what was done, and what the new assignments are until the next board meeting.
The assignments should be specific – if they are general (such as “help with strategy” or “help with the financing”) they will be useless. Make sure the assignments play to the individual board members strengths and interests. They should provide leverage for the leadership team; not create make work. They should be impactful, but not mission critical.
In companies where the CEO hands out regular assignments, I’ve experienced an awesome tempo after about six months. The board members begin holding themselves accountable and the management team is much more comfortable working directly with the individual board members. Over time assignments become less “stiff” and the regimen of passing them out and reviewing them at the board meeting will fade away over time as everyone gets used to being held responsible for what they sign up for.
For some reason I’ve been doing a lot of interviews lately. In many of them I get asked similar questions, including the inevitable “what makes a great entrepreneur?” When I’m on a VC panel, I’m always amused by the answers from my co-panelists as they are usually the same set of “VC cliches” which makes it even more fun when I blurt out my answer.
“A complete and total obsession with the product”
The great companies that I’ve been an investor in share a common trait – the founder/CEO is obsessed with the product. Not interested, not aware of, not familiar with, but obsessed. Every discussion trends back toward the product. All of the conversations about customer are really about how the customer uses the product and the value the product brings the customer. The majority of the early teams are focused entirely on the product, including the non-engineering people. Product, product, product.
And these CEO’s love to show their product to anyone that will listen. They don’t explain the company to people with powerpoint slides. They don’t send out long executive summaries with mocked up screen shots. They don’t try to engage you in a phone conversation about the great market they are going after. They start with the product. And stay with the product.
When I step back and think about what motivates me early in a relationship with an entrepreneur, it’s the product. I only invest in domains that I know well, so I don’t need fancy market studies (which are always wrong), financial models (which are always wrong), or customer needs analyses (which are always wrong). I want to play with the product, touch the product, understand the product – and understand where the founder thinks the product is going.
I don’t create products anymore (I invest in companies that create them), but I’m a great alpha tester. I’ve always been good at this for some reason – bugs just find me. While my UX design skills are merely adequate, I’ve got a great feel for how to simplify things and make them cleaner. Plus I’m happy to just grind and grind and grind on the product, offering both detailed and high level feedback indefinitely.
How a founder/CEO reacts to this speaks volumes to me. I probably first noticed this when interacting with Dick Costolo at FeedBurner when I first met him. I am FeedBurner publisher #699 and used it for my blog back when it was “pre-Alpha”. I had an issue – sent firstname.lastname@example.org a note – and instantly got a reply from Dick. I had no idea who Dick was, but he helped me and I quickly realized he was the CEO. Over the next six months we interacted regularly about the product and when he was ready to start fundraising, I quickly made him an offer and we became the lead investor in the round. My obsession with the product didn’t stop there (as Eric Lunt and many of the other FeedBurner gang can tell you – I still occasionally email SteveO bugs that I find.)
I can give a bunch of other examples like FeedBurner, but I wrap up by saying that I’m just as obsessed with product as the founders. And – as I realize what results in success in my world, I get even more obsessed. Plus, I really like to play with software.
Andrew does a nice interview. We covered plenty of ground, including failure, when to really call it quits, the concept that “life is a fatal disease”, global vs. local failure, working on things that matter, what I think “fail fast” actually means, how to evolve your business (using Return Path and NewsGator as the examples), my obsession with product, how we decided to invest in Pogoplug, more on product and release tempo, a story about my grandfather, a story about Laura Fitton and why I care about OneForty, why it’s so important to always give more than you get, how the Defrag and Glue conferences came about, some book recommendations, and why fear and anxiety are emotions that have zero value to an entrepreneur.
Business Tips via Mixergy, home of the ambitious upstart!
Jon Pierce of BetaHouse has decided to organize an Angel Boot Camp in Boston on June 1st. The idea is that anyone interested in learning more about how to get started with angel investing can attend and learn from some people who’ve been there and done that.
While June 1 is still several months away, sign up and put Angel Boot Camp on your calendar now.
A few days ago I wrote about the launch of the MIT Entrepreneurship Review. I neglected however to mention their actual launch party, which is happening on April 7th from 7pm – 10pm at the MIT Media Lab. The MITER (er- MIT Entrepreneurship Review) party will gather together a bunch of folks in the MIT and Boston entrepreneurial ecosystems. It looks like it should be a fun event – email Jen Novak if you want an invitation.
I just read Rework, the new book by Jason Fried and David Heinemeier Hansson of 37Signals. It’s fantastic. If you are starting a business, or thinking about starting a business, or running a business, or breathing air, this is a book you should read.
There are an endless array of “startup books” to choose from. Most suck. Many are ego trips for successful entrepreneurs. Others are self-help books from entrepreneurs that haven’t been successful, but are trying to be successful as entrepreneurial self-help book writers. Very few are useful, authentic, or powerful.
Rework nails it on every dimension. I was annoyed during the first chapter since the book started out with the typical “bootstrap your business rather than raise money from clueless investors” screed that Fried is famous for. While I strongly agree that is one way (my first company was started with $10 and that was all the money we ever raised), it’s not the only way and I get tired of hearing polarizing rhetoric around this.
It turns out that was Fried and Heinemeier’s way of getting my attention. Rather than passively rolling into chapter two, I was fired up. And then, in the style of Gary Vaynerchuk, they Crushed It (another awesome book, BTW). I was glued to my couch for the next hour as I pounded my way through the book. It’s a collection of short essays and cool drawings built around one liners that everyone running a business should ponder. As a bonus, they have a great essay on four letter words and why “fuck” and “shit” are not ones you should be concerned with. And, in a demonstration of their mad skills, they have an awesome attack ad for the book.
I spent most of today grinding through another draft of “The Tao of TechStars”, a book that David Cohen and I are writing based on lessons we’ve learned from TechStars. After reading Rework, I’m hopeful that we’ve written something as good, and as important, as what Fried and Heinemeier have written. Time will tell.