Tag: entrepreneurship
This cliche, which has uncertain attribution (Winston Churchill, Rahm Emmanuel, M. F. Weiner) is a priceless line that gets tossed out periodically, especially in the middle of a crisis.
Over the years I’ve been involved in many business crises. I qualify this, since my crises have never involved life and death or the survival of the human race. But they are still crises. Some have lasted moments while others have lasted months, and I can think of one that went on for three years – or at least took three years to dig out of.
I’ve only occasionally been in the CEO (or equivalent) role during a crisis. Most of the time I’m a board member or investor. As a result, I’ve participated in dealing with the crisis, but I’ve also been able to observe the behavior of the leader during the crisis. While I’ve had to go throw up in the bathroom after a particularly distressing conference call more than once, I’ve been fortunate to be able to be one level removed from the essence of the crisis.
A typical leader has a natural tendency is to be defensive in the face of a crisis. The first reaction is to blame someone – or something – else. Often the blame is aimed at something abstract or non-controllable, which often has nothing to do with the crisis, but is adjacent to whatever is going on so it’s an easy target. As soon as the blame is out there, the attack begins, which often causes others to be defensive, generating a vicious cycle of anger, hostility, frustration, and obfuscation at the beginning of the crisis.
Over time, I’ve learned that the best leaders take a completely different approach. When the crisis erupts, rather than immediately go into action, she pauses and takes a deep breath. She starts collecting data about what is happening. In parallel, she communicates the crisis to the key people who need to be involved – the board, the leadership team, and anyone specifically engaged in the crisis.
If the crisis lasts moments, rapid action is critical. But if it’s simply the beginning of a broader issue, especially one where the root cause isn’t known yet, the worst thing a leader can do is act immediately. As a teenager, my dad taught me about the idea of unintended consequences and I’ve had the experience, and how to deal with it, pounded into my soul over the years.
If you want to understand this better, I encourage you to read Charles Perrow’s classic book from 1984 – Normal Accidents: Living with High Risk Technologies. I often forget to mention it when asked which books have influenced me the most – Normal Accidents is in the top 10.
So, you are now in the crisis. As CEO, you feel an immense need to address whatever is causing the crisis and resolve it. But that’s only half of it. If all you do is focus on solving the crisis, you are missing the big opportunity, which is to learn from it and integrate it into the fabric of your company. It’s not that you won’t ever have a crisis again – you most certainly will. But if you can change the way your company functions in the context of a crisis in a positive way, you can actually get some value out of the crisis.
Don’t forget to breathe.
In a world of endless signal and noise coming at us from all angles including TV, radio, the web, Facebook, Twitter, Snapchat, blog posts, email, text messages, Slack, and fill in another 50 different sources of stuff, we don’t have a measurement for the sentiment of the noise (and signal) and the toll it takes on our thinking.
If you pay attention to finance, you are familiar with the VIX, which is officially the implied volatility of S&P 500 index options. It’s unofficially known as the fear index and is a measure of the market’s expectation of stock market volatility over the next 30 days. For example, here’s the VIX for the past 12 months.
I don’t pay attention to the VIX on a daily basis as I don’t care about the stock market but I find it interesting in hindsight to see how it correlates to changes in the DJIA over a long period of time.
In February, I was pondering the tone of the noise – and the signal – that was coming my way. If I had a measure for it the fear in it, it tracked the VIX pretty well (a sharply increasing level with a peak some time in early March followed by a rapid decline back to normal). At the same time, the cognitive load from my daily life (work and personal) increased very significantly in Q1 due to a series of things good and bad.
I reached a point in March where I actually said out loud to someone “I can’t take on anything new – my cognitive load is maxed.” I literally couldn’t think about anything beyond what I was currently trying to process. While I’m still at a high load, I don’t feel anywhere near as maxed as I did at the end of March.
In the past 24 hours I’ve responded to a few emails that were particularly tone deaf to reality. The level of aggression in the noise seems unusually high these days. The random hostility from people I don’t know very well, but who feel like it’s an effective personal strategy to attack as a way to get attention, seems at an all time high. I presume some of this is from our current political cycle and the corresponding tone, but I could be coming from other dynamics as well.
Regardless of how zen one is, all of the noise, signal, interactions, and life activity creates a cognitive load. While I’m not sure a macro measure – like the VIX – is useful, I certainly feel like a personal one would be.
Every entrepreneur out there should grab a copy of The Third Wave: An Entrepreneur’s Vision of the Future by Steve Case and read it.
If you don’t know Steve, you’ve probably heard of him. He’s had a remarkably entrepreneurial journey starting with co-founding AOL in the 1980s. While AOL has now been absorbed into Verizon (after having been bought, spun out, and bought again) at its peak around 2000 nearly half of all Internet users in the US accessed the internet via AOL and everyone over the age of 40 knows how to say “You have mail.”
I’ve gotten to know Steve over the past six years through the Startup America Partnership (where he was Chairman) and then UP Global (where he was also Chairman). I’ve learned a lot from him both from reflecting on the past and talking about the future.
I was excited when he told me he was finally writing a book. I loved the title, as I’m a big Alvin Toffler fan as I describe in my post from nine months ago titled What Is The “Third Wave” Of This Generation? I didn’t have an answer for this question got an email a few days later from Steve.
“Hi Brad. I saw your tweet and blog. I too was inspired by Toffler’s Third Wave. I’m now working on a book (my first!) with some of my recollections of the past, but mostly my perspectives on the future. And, in part to honor Toffler, I’m calling it The Third Wave. I’m finalizing the manuscript now. It builds off the article I wrote for the Washington Post a few months ago. Happy to send the current draft to you to critique, if you have time to read it in the next week. (I have told Simon & Schuster they’d get a final manuscript at the end of the month.) Let me know if you’d like to see it. Thanks.”
A week later I’d read it and got some specific suggestions back to Steve with the punch line:
“Overall I think the book is excellent. I love the thesis about The Third Wave as applied to entrepreneurship.”
This is an important book that I think will stimulate a lot of thinking about the future for any entrepreneur. It also helps understand the potential futures better by reflecting on the past through Steve’s own journey, especially around AOL.
If you are an entrepreneur, make time to read The Third Wave: An Entrepreneur’s Vision of the Future. Steve – thanks for taking the time to write it.
After all these years, I’m still a heavy RSS user. Every morning I click on my Daily folder in Chrome, open it up, and spend whatever time I feel like on it. The vast majority of what I read is in Feedly and includes my VC Collection as well as a bunch of other stuff. It’s almost entirely tech related, as I stay away from mainstream media during the week (e.g. no CNN, no CNBC, no NYT, no WSJ, no USA Today, no … well – you get the idea) since I view all this stuff as an intellectual distraction (and much of it is just entertainment anyway, and I’d rather read a book.)
This morning I came across a number of interesting things that created some intellectual dissonance in my brain since they came from different perspectives. I’d categorize it as the collision between optimist and pessimist, startup and already started up, and offense vs. defense. However, they all shared one thing in common – the message and thoughts were clear.
Let’s start with Tim Cook’s remarkable Message to Our Customers around the San Bernardino case and the need for encryption. My first reaction was wow, my second reaction was to read it again slowly, and my third reaction was to clap quietly in the darkness of my office. I then went on an exploration of the web to understand the All Writs Act of 1789 which is what the FBI is using to justify an expansion of its authority. I love the last two paragraphs as they reflect how I feel.
“We are challenging the FBI’s demands with the deepest respect for American democracy and a love of our country. We believe it would be in the best interest of everyone to step back and consider the implications.
While we believe the FBI’s intentions are good, it would be wrong for the government to force us to build a backdoor into our products. And ultimately, we fear that this demand would undermine the very freedoms and liberty our government is meant to protect.”
Thank you Tim Cook and Apple for starting my day out with something deeply relevant to our near term, and long term, future in a digital age.
Shortly after I came across Danielle Morrill’s post Surviving Whatever Comes Next and Heidi Roizen’s post Dear Startups: Here’s How to Stay Alive. I’m an investor in Danielle’s company Mattermark and was partners with Heidi at Mobius Venture Capital. I have deep respect for each of them, think they are excellent writers, and thought there were plenty of actionable items in each of their posts, unlike many of the things people I’ve seen in the last few weeks about how the technology / startup world is ending.
Unlike the sentiment I’ve been hearing in the background about deal pace slowing down (not directly – no one is saying it – but lots of folks are signaling it through body language and clearly hedging about what they are actually thinking because they aren’t sure yet), our deal pace at Foundry Group is unchanged. Since we started in 2007, we’ve done around ten new investments per year. I expect in 2016 we’ll do about ten new investments, in 2017 we’ll do about ten new investments, in 2018 we’ll do about ten new investments – you get the picture. We have a deeply held belief that to maximize the value and opportunity in a VC fund, investment pace should be consistent over a very long period of time. We did about ten investments in 2007, 2008, and 2009 – which, if I remember correctly, is a period of time referred to as the Global Financial Crisis. Hmmm …
So it was fun to see my partner Seth’s post titled Welcome to Foundry on the same morning as Danielle and Heidi’s posts. That started the intellectual dissonance in my brain. If you want to see what Seth sends every company he joins the board of after we make an investment in, it’s a good read. It also clearly expresses how we approach working with companies the day after we become an investor.
I then read Ian Hathaway‘s great article for the Brookings Institute titled Accelerating growth: Startup accelerator programs in the United States. There are a few people doing real research of the impact of Accelerators and Ian’s work is outstanding. If you are interested in accelerators, how they work, how they impact company creation, and what trajectory they are on, read this article slowly. It’s got a bonus video interview with me embedded in it.
I’ll end with Joanne Wilson’s post #DianeProject. Joanne shared a bunch of info about the #DianeProject with me when we were together in LA two weeks ago. While I don’t know Kathyrn Finney, I now know of her and her platform Digital Undivided. I strongly recommend that you pay $0.99 (like I just did) to get a copy of the report The Real Unicorns of Tech: Black Women Founders, #ProjectDiane. The data is shocking, and there is an incredible paragraph buried deep within it.
“A small pool of angel and venture investors fund a majority of Black women Founders. For those in the $100,000-$1 million funding range, a majority of their funders were local accelerator programs and small venture firms (under $10 million in management). One angel investor, Joanne Wilson and Gotham Gal Ventures, has invested in three of the 11 companies that raised over $1 million. On the traditional venture rm side, Kapor Capital and Comcast’s Catalyst Fund have invested in at least two of the Black woman-led startups in the $1 million club. Wilson, Kapor, and Comcast often invest together, aka “co-invest”, in companies, thus increasing the amount of funding a company receives.”
So – was that more interesting than CNN or CNBC?
Up Close and Personal: Conversations on Entrepreneurship and Mental Health
I’ve talked openly about my struggles with depression over the years and have engaged deeply in an explorations of entrepreneurship and mental health through several different organizations I’m involved in.
On February 16th, from 3pm to 5pm, I’m doing a free public event with the Carson J Spencer Foundation about entrepreneurship and mental health. For some quick context, they did a short intro video with me on the topic.
If you are interested in participating, please register and join us on February 16th at the Museum of Boulder.
I was at a fascinating dinner with a bunch of founders and investors last night. Until I was 35, I was often the youngest guy in the room. While this was a seasoned crowd, much of the experience – both around creating companies and funding companies – started around the mid-2000s. As someone who has been doing this since the late 1980s (I started my first company in 1987) I definitely felt like one of the old guys in the room.
At some point, the conversation turned to the current state of things in the broad entrepreneurial ecosystem – both company-side and investor-side. It rambled around for a while but kept locking down on specific issues around the current state of financings and exits, alignment between founders/investors/acquirers, cultural norms that were front and center in today’s startup communities, and a bunch of other issues that tied back to the wonderful Game of Thrones line “winter is coming.”
Throughout the evening, I was regularly reminded of my favorite BSG quote. “All of this has happened before, and all of it will happen again.”
Another one of my favorite quotes is the one attributed to Mark Twain, “History does not repeat itself, but it rhymes.” Phil Weiser, Dean of the CU Law School and a good friend, often pulls this one out to remind us to look to the past to understand the future.
While we’ve been in a particular strong part of the startup / entrepreneurship cycle for the past four years, many people are nervous, talking about it, reacting to it, and getting confused, frustrated, and scared by what is going on. Others are in total denial of reality, which never works out well in the long run. Whether you follow the BSG theology or subscribe to Mark Twain, or are somewhere in-between, you recognize the value of understanding the past to exist in the present and deal with the future.
I came out of dinner with about 20 topics for blog posts, many which reflect on lessons I’ve learned multiple times over the past 30 years, which can be applied to today, and tomorrow, and the next few years, regardless of what actually happens. Until last night I wasn’t particularly motivated to blog around this stuff, but the discussion, and people in the room, really stimulated me to put some energy into this. So I plan to.
But remember, all of this has happened before, and all of it will happen again. So if you are impatient, I encourage you to go look at posts from me, Fred Wilson, and David Hornik from 2004 – 2007 for a taste of what I would characterize of “the re-emergence from winter.”
I was in a conversation last week with a friend who asked “do you think this is the beginning of the end?” We were discussing something totally wacky that had just happened that clearly could be viewed as an indicator that we have crested the peak of this economic cycle. Then, earlier today, I was on the phone with one of my favorite lawyers and he made a joke about a deal I’m doing as harkening back to the late 1990s. He asked if I thought it was an indication of the top of the cycle. We had a good chuckle (probably PTSD gallows humor from 15 years ago) and I suggested that they slow down the hiring of the associates at their law firm so they wouldn’t have to lay off so many in the inevitable downtown.
Somewhere in between these two conversations I told someone that I thought this was actually the “end of the beginning.” And, tonight at a wonderful dinner, I made the statement to the friend that we were having dinner with that I thought the next 30 years were going to be incredible.
I think we are at the end of the beginning of a dramatic shift in how our species deals with existence. Depending on who you believe, we are either 30 years from the singularity (Kurzweil) or only 15 years away (Vinge). The new science fiction coming out is doing a remarkable job of helping us set a context for the different aspects of what we’ll need to deal with. Some of it will be just as off as Philip K. Dick can be while some will be just as accurate as Philip K. Dick can be. If you are a fan of Philip K. Dick, like I am, you know exactly what I mean. And if you aren’t, I suggest you start with Do Androids Dream of Electric Sheep?
Humans have serious issues with exponential curves as we want to make everything a line. But a lot of the stuff around us is happening exponentially and we don’t realize it. As a result, we’ve dramatically underestimated the impact of technology on – well – everything. And, since so much of it is exponential, it compounds at an incomprehensible pace. When we look outside at concrete, steel, and glass going up slowly, it lulls us into a sense of normalcy.
The machines want us to feel this way.
Think about it for a brief moment. Suspend disbelief. Wind the clock forward 100 years. Do you think, as a species, we will still be struggling with the things that vex us today? Will we still be arguing about the same stuff? Will physical instantiation of things have the same meaning? We will still be eating Cocoa Puffs?
We are at the end of the beginning. It’s going to get wild. Buckle up.
Has the word entrepreneur become too trendy as to have lost its meaning? I’m hearing it and the word entrepreneurship being used in so many conversations incorrectly.
Here’s a simple example. On a daily basis, I have an email exchange with someone who says they are an entrepreneur. I respond “What company did you start?” They respond, “Oh, I didn’t start a company, I was the fifth employee of Company X.”
Another example is the email that I get from someone in a large company who says “I want to create more entrepreneurship within BigCo.”
Now, these are well-intentioned people so I’m not critical of them. But I’m critical of the use of the word entrepreneur in these contexts.
I like Wikipedia’s definition.
“Entrepreneurship is the process of starting a business, a startup company or other organization. The entrepreneur develops a business plan, acquires the human and other required resources, and is fully responsible for its success or failure.”
Merriam Webster’s is also solid.
“a person who starts a business and is willing to risk loss in order to make money”
This morning I read an article in the New York Times titled With Start-Ups, Greeks Make Recovery Their Own Business. Other than the fact that the New York Times hasn’t yet figured out that It’s Startup, Not Start-up or Start Up it was a good article that got me thinking about this rant.
In 2010, the Startup America Partnership finally got the US government to separate the notion of small businesses with high growth businesses. The word startup was firmly introduced into our lexicon as shorthand for high growth business and now is a comfortable one. While we are still stuck with one government organization – the Small Business Administration – that tries to help both small businesses and startups, the language around this continues to evolve.
For example, I think we are finally starting to differentiate between local businesses (your local restaurant, coffee shop, bookstore, gas station, movie theater, clothing store, art store, or anything else that sells to your local community) from a startup business (a company that might be small, but is selling to anyone anywhere in the world). The language isn’t quite right, as local businesses can evolve into startups (The Kitchen, run by Kimball Musk, is a good example). But we are getting there.
And then there are a several words trying to characterize different stages of startups. A scaleup is a startup that is scaling quickly. A gazelle, a word that has been around for a while and is becoming popular again, is a startup that has achieved critical mass and is a rapidly growing company, kind of like a scaleup, but falling comfortably into the animal taxonomy that seems to include unicorns and dragons.
And that takes us back to the word entrepreneur. Theoretically, the entrepreneur is a person who creates any one of these companies (local business, high growth business, startup, scaleup, gazelle, unicorn, but not a peppercorn.) And entrepreneurship is the act of creating and operating the business. Note the and clause – you need to be the creator and the operator to be an entrepreneur, not just the operator.
As I type this, I realize I’ve buried the lead. I’ve always loved the word founder to describe the person the word entrepreneur refers to. When I started Feld Technologies, I referred to myself and my partner Dave as the founders of Feld Technologies. This was well before anyone used the word entrepreneur (the 1980s) and for many years I used the word founder. Somehow my brain shifted to entrepreneur and entrepreneurship and that’s taken over for me. But it’s now uncomfortable, awkward, and tiresome.
I think I’m going back to founder. It’ll be interesting to see how hard it is to rewire my brain. We’ll see if it lasts. While it’s not clear to me that it matters, given my pedantic obsession with eliminating the hyphen in words like startup and email, it’ll be fun – at least for me – to see where it goes.
I’m feeling fine today. But I know many entrepreneurs who aren’t. They are under intense pressure, worrying about an endless stream of things coming at them, suffering under the weight of imposter syndrome and other sources of anxiety. And, in some cases they are depressed, but trapped by our own culture which stigmatizes depression.
Earlier this week Biz Carson wrote an excellent article titled There’s a dark side to startups, and it haunts 30% of the world’s most brilliant people. It started with Austen Heinz’s suicide (Austen was the founder of Cambrian Genomics) and then built into a wide ranging discussion about depression among entrepreneurs.
It highlighted a recent study by Dr. Michael Freeman, a clinical professor at UCSF and an entrepreneur, which is the first to link higher rates of mental health issues to entrepreneurship.
Of the 242 entrepreneurs surveyed, 49% reported having a mental-health condition. Depression was the No. 1 reported condition among them and was present in 30% of all entrepreneurs, followed by ADHD (29%) and anxiety problems (27%). That’s a much higher percentage than the US population at large, where only about 7% identify as depressed.
I’ve been very open about my struggles over the past 25 years with depression and anxiety and am quoted in the article. But after dinner last night, Amy discovered on Facebook that the son of a childhood friend of her’s had committed suicide. It reminded me that depression and other mental health issues are widespread and are often extremely challenging around the holidays.
I used to struggle mightily with three day weekend and holiday weeks. While the rest of the world slowed down, I felt like the pressures on me were speeding up. I wanted everyone to get off their butts, stop relaxing, and respond to my emails. I was impatient and didn’t want to wait until Monday to try to address whatever issues were in front of me. I felt disoriented, which just made me more anxious. And when I was in the midst of a depressive episode, time just strung out endlessly in front of me, in a very bad way.
I used to be especially cranky around Christmas time. I’m jewish and didn’t grow up with Christmas, I always thought Hanukkah was a stupid holiday, made up to assuage sullen jewish kids when all of their friends had gift orgies. I felt isolated and different, which just made my general anxiety and impatience around holidays even worse.
In the last decade this has eased. I now give myself up to the slower pace, I give myself space to feel however I want to feel, I rest a lot, and I hang out with Amy. I’m social, but not overly so, and avoid big gatherings which crush my soul. I read, spend time outside, and nap. I let my batteries recharge and I don’t try to get caught up on everything, but instead just do what I feel like doing.
The July 4th weekend is always one that is joyful on the surface. It’s summer. The weather is warm. People do outdoorsy things. Email slows to a trickle.
For an anxious, stressed, or depressed entrepreneur, this can be extremely uncomfortable and exacerbate whatever issues are going on.
If you are one of these entrepreneurs, try my approach this weekend. Just shut down all the stimuli. Get off your computer. Take a digital sabbath. Go outside. Lay on a couch with a book and fall asleep reading. Blow off the 4th of July party that you don’t really want to go to and just stay home and watch TV in the middle of day. Let your energy go wherever it takes you. And recognize that all the emails, all the stress, all the anxiety, and all the people will be there on Monday ready to go again.
If you are the significant other of one of these entrepreneurs, take a lesson from Amy. Be patient. Be loving. Don’t let it be all about your partner, but don’t make it all about you. Just chill. And be together. Have a vacation – from everyone and everything else.
And for everyone else, recognize that holidays can be hard. And that’s ok.