Last year, I went to FailCon and StartupSchool (they were situated around the same weekend). I could easily say that I learned way more listening to the cases of failures than the “here’s what worked for me, but probably won’t work again, and most certainly won’t work for you if you do it exactly the same way”.
Failure is interesting because it keeps people on their toes. Behavioral economics tells us that people try to minimize loss more than focus on maximizing gain. In other words, we are more afraid to fail than anticipate success.
Learning from failure seems in vogue. People like to muse about it. On the surface, it’s funny. Luckily in the West, we can laugh about failure (esp. silicon valley). There’s a whole site dedicated to fail on the lolcat network.
And so, going along with my theme of learning from decisions, I thought I’d do a quick mindmap review of Billion Dollar Lessons. I don’t read business books very often anymore (tl;dr), but I’m interested in learning about strategy through understanding failure, so I took at look at this book.
I made this so I could refer back to from time to time, feel free to check it out and dload the full version. Click here or on the image to get it.
The book is a light read, I finished it between two short airplane flights to/fro Philly. Lots of this stuff is intuitive if you read startup rags all the time, but I like that Randy’s book is written from the perspective of a VC talking to an entrepreneur about his million dollar idea, “funerals.com”. Anyway, there are some great reminders for startuppers in there. Most business books make me yawn but this one is way more than a business book.
My favorite parts, painfully typed out for your benefit.
I have never seen a company fail for having too much money. Dilution is nominal, but running out of money is terminal. Set reasonable expectations among your investors, don’t gouge them, and then out-perform expectations. Future rounds will be much easier if you are seen as having positive momentum
p52 — A brief explanation of Rocket Ship Models of startup investments vs Brave New World startups (that proceed more gingerly, without the precedents to guide them).
I have to share this one with my (sometimes) Marxist design friends
Business is one of the last remaining social institutions to help us manage and cope with change. The Church is in decline in the developed world, ceding leadership to a materialism of unprecedented proportions. City hall is subservient to the economic interest of its constituencies. That leaves business. Business, however, has a tendency to become tainted with the greed and aggressiveness that at its best it channels into productivity. Left to its single minded pseudo Darwinian devices, it may never deliver the social benefits that the other fading institutions once promised. But, rather than give up on business, I look to it as a way, indirectly, of improving things for many, not just a lucky few. I accept its limitations and look for opportunities to use it positively. In the US, the rules of business are like the laws of physics, neither inherently good nor evil, to be applied as you may. You decide whether your business is constructive or destructive. H help people understand this and express themselves in what they do, trying to make a difference through business.
The Deferred Life Plan: Step One: Do what you have to do. Then, eventually — Step Two: Do what you want to do. The Deferred Life Plan dominates Silicon Valley. Most people think getting rich fast provides the quickest way to get past the first step — and where can you get rich faster than Silicon Valley?
Here was a talent and a pleasure, I began to realize — the ability to put a blank piece of paper on the table and to create something in the context of work and business. I enjoyed sitting down, analyzing a problem, and then concocting a bunch of free-form solutions. I might have simply reinvented the wheel, made a hexagon instead of a circle, but I could get it rolling and I wasn’t afraid of venturing outside my realm of comfort and experience.
The distinction between drive and passion is crucial. I had asked Lenny about his passion. He thought I was questioning his drive and commitment. Passion and drive are not the same at all. Passion pulls you toward something you cannot resist. Drive pushes you toward something you feel compelled or obligated to do. If you know nothing about yourself, you can’t tell the difference. Once you gain a modicum of self-knowledge, you can express your passion.
I had begun to find aspects of the startup game increasingly disturbing. Expedience ruled. Sometimes I wondered if, rather than developing tomorrow’s business leaders and talent, we weren’t merely cloning speculators, hack businessmen and women, who arbitraged their drive for a quick hit and who believed that if you’re rich, you’re right. Heaven help us if these businesses actually have to be operated on a bottom line basis for the long run.
TiVo had a chance to change the status quo for the better, with a potential we could only guess at. Sure, the market and business model were not yet proven, the incumbents could stonewall, and competitors large and small might hijack the opportunity, but Mike and Jim were up for the challenge: smart, experienced, flexible, capable of learning on the fly, and willing to do what it would take to win. They did not waste time talking to me about exit strategies. Personalized television would be their legacy.
(on acquisition of Claris by Apple)… But it was a Pyrrhic victory. With our spouses, we all gathered at the home of one of the founders to celebrate our good fortune. Together we drank the celebration into a wake. We were proud of the price we’d gotten from Apple.. there was reason to celebrate — but when we looked around the room at each other, the deal’s downside hit us: it was unlikely we would ever work together again.
… I later realized what a rare privilege it had been to work with this group of people, in a place of our own making that gave us the opportunity to reach and stretch, to have impact, and to be great. Building a $90M a year, market leading business was a hard thing to do. Claris gave us, as a team and as individuals, a platform for growing and a chance to build a legacy and a culture that would contain our DNA in its values for decades to come. You couldn’t put a price on it, and I didn’t realize that until our company was dead and buried.
This may sound cheesy, but I feel like I’m incredibly excited to build a team, culture, and company at BettrAt like Randy experienced at Claris. Building a Bettr, sustaining business is so much more satisfying in the long run than a quick hit + sellout — at least from every one I’ve ever read about or talked to who’s built one.
For me, the moral of the story of Steve Perlman and WebTV is the need to emphasize visionary leadership over management acumen in the formative stage of a startup. If you turn a visionary startup into an operating company too early, you throw out its birthright. It will never be as big, as grand, or as influential as it might otherwise be. It will be much harder, perhaps impossible, to expand the vision later, when performance is being measured quarter to quarter against operating plans, because then there’s too much at stake. Steve was the right leader, the only leader, to take WebTV through its formative years.
Work hard, work passionately, but apply your most precious asset -time- to what is most meaningful to you. What are you willing to do for the rest of your life? does not mean, literally, what will you do for the rest of your life? That question would be absurd, given the inevitability of change. No, what the question really asks is, if your life were to end suddenly and unexpectedly tomorrow, would you be able to say you’ve been doing what you truly care about today? What would you be willing to do for the rest of your life? What would it take to do it right now?
This is the creative edge of business – startups, working with a blank canvas to challenge the status quo and make change happen. I work with brilliant entrepreneurs who have a vision for how things can be better (Bettr? and who can’t resist doing the next great thing. I am their consigliere.
This is truly an awesome book (in this case, it was worth blogging about). If you want to change the world with your ideas, read it. I’ll let you open it rather than talk about “the riddle” here.
I have been evangelizing this book, Rapt, recently in small circles of friends. Like Stumbling on Happiness, it’s not a self-help book, it deals more with cognition, attention, and social psych than anything.
I thought I’d take the time to post my interesting curations from the book since they are highly related to BettrAt.
– You are, essentially, the sum of what you pay attention to. This is sort of obvious, but I suspect if more people lived their lives this way, they’d be paying attention a lot more to the things they truly cared about.
– This is the kind of stuff that you read on cogdaily, but its interesting to think how the mind works: We have involuntary and bottom-up attention that we are wired to zoom in on brightly colored flowers (essentially detect and react to things that can threaten or advance your survival, and top-down attention, which requires us to actively focus and, as we say, “pay attention” to reading that textbook.
– Attentional capacity is creation of both nature and nurture (William James, the psychologist, proved this). The brain has a three part attentional system, Alerting, Orienting, and Executive function.
– A well developed executive network makes it easier to shift your attention from unproductive thoughts and feelings to energizing ones. It also has a tremendous impact on self-control/self-regulation.
– Continuous meditation over time increases activity in the left prefontal cortex, linked to optimistic, goal oriented emotionality. This also contributes to the ability to focus at other times.
– UWisconsin scientist Richard Davidson: Acute concentration on positive emotions like compassion, joy, gratitude strengthens neurons in the left prefrontal cortex that inhibit disturbing messages from the fear oriented amygdala.
– It is possible to be attentionally trained– to pay focused attention to the things that someone wants to repeatedly (it takes a long time)
– Gallagher talks about cultural differences in attention– eastern societies where attention is outward/group focused, vs. the west, where its focused on the individual. This was a good one – despite the claims made for products marketed to hopeful parents, a study showed that focusing babies aged 8 to 16 months on educational videos impedes their verbal development. each hour of viewing correlated with the child knowing 6 to 8 fewer words than unwired peers.
– UCLA study on postmodern families and dinner: American families in one study dine together only 17% of the time, even when everyone is home, despite the fact that this is one of the few times that family members have the opportunity to pay attention to one another. The television and various other electronica and attentional vices have brought about the “staggered meal” common to so many households. Being “busy” is not an excuse, some families really just don’t make this a priority. The study also found that most families who do get together have a narrative style with the “chief” being the father. Moms and kids tend to be open ended and participatory–”How should I deal with this situation?” while Dads prefer “Here’s how I’m handling it”. Wow, so I know I’ve been guilty of this in the past.
– A person’s unique perspective is shaped almost solely by what they pay attention to, and how they pay attention. Sometimes people’s senses differ entirely, and this means that people in relationships focus on different realities. The best way to get around this is working out a lot of things (like chore responsibility) beforehand that demand attention so you don’t have to keep attending to them and talking about them. See “fundamental attribution error”.
– Thoughts + Feelings = mental state. You process information that jibes with your current mental state. This one’s huge! We like to think that we have more control of what we’re “thinking” but our current mental state acts like this substrate that’s infinitely malleable.
–96 Beware the demand-withdraw pattern in relationships that’s a vicious circle – once it gets established, refocusing efforts on the other person and communicating openly is difficult.
– 101 unless you can concentrate on what you want to do and suppress distractions, it’s hard to accomplish anything, period. Nicholas Hobbs — choose activities that push you so close to the edge of your competence that they demand your absolute focus. Relish taking on risky projects that have a 50/50 chance of success.
– 103 ESM – Experience Sampling method (major innovation in psychological research used at work). Surprising discover: only about 20% of people flow once or more each day. About 15 %, never, and most people, only occasionally. Most people spend time oscillating between stress and boredom (different but equally unfocused, unproductive, unsatisfying conditions.
– 105 Paragons of inventiveness maintain a wide angle perspective on life that ensures that they’ll as Csikzhentmihalyi puts it, “be surprised by something every day”.
– Oliver Schultheiss (Michigan) – visualization exercises to “pre-experience careers” is a good idea (At BettrAt, we say that one mentor’s hindsight is another’s foresight). Pre-experiencing someone’s day is a great way to learn what they do.
– 112 – Over time, a commitment to challenging, focused work AND leisure activities produces not only better daily experience but also a more complex interesting person. Hobbs: Choose trouble for oneself in the direction of what one would like to become. (Did I choose trouble with starting BettrAt?
– 113- Csikzhentmihalyi: “I just don’t have the time” == I just don’t have the self discipline. Okay I loved this part: Optimal human experience is a Darwinian dynamic that can slowly transform society and even affect evolution by encouraging activities of ever-greater complexity, countering business-as-usual mindsets, and offering alternatives to obsolete, destructive behavior. Maybe that’s why I am hopped up about the line we use “BettrAt: An Evolved way to get better“.
-117: Kahneman: Our thinking gets befuddled not so much by our emotions as by our cognitive illusions, or mistaken intuitions and other flawed, fragmented mental constructs.
– 119 – People have an “experiencing self” and a “remembering self”. Attention both to what you choose to experience and what you choose to think about is at the very core of how I approach questions of well being. hear it evaluated, remembering self looks back on experience, focus on its emotional high point in outcomes, formulates thoughts about it, not always accurately. Since memory is biased and unpredictable (more like a patchwork quilt than a seamless tape history of reality), the actual mental artifact is either more positive or negative in tone than the actual event. this reminds me of the article in the Boston Globe that talked about money & happiness, and how people spend money on things that essentially do not make them happy (lots of stuff).
– 135 – William James: degenerative mind is full of copious and original associations, so that tending to the germ of an idea soon leads to all sorts of fascinating consequences. Whenever you engage in creative activity, you boost your level positive emotion, which in turn literally widens your attentional range giving you more material to work with.
– p136- Fascinating study by Harvard psychologist Ellen Langer on human behavior: chose subjects who were elderly men who are volunteered to live in a setting that appears 20 years earlier. The old men grew visibly younger, not just in frisky attitude but also in physiology! (Amazing!!)
– p137 – people have been impoverished, static understanding of what ” paying attention” means. what does it mean when a teacher asks students to pay attention, focus, concentrate on something? If the answer is “to hold that thing still”, this is incorrect. most people think of attention as a kind of mental camera that you keep rigidly, narrowly focused on a particular subject or object. this is absolutely not the case ( particularly when it comes to creativity and creating connections between various thoughts or ideas).
– p183: motivation is a slow, effortful process that has only small effect on behavior, where his attention is a fast and effortless one therefore, when facing a bit stressful situation, it’s best to plan how you would act in advance ( if X happens, then I will do Y). (Peter Provonost hand washing in the ICU example)
– 214: Einstein: ” There are two ways to live your life. One is as though in nothing is a miracle. The other is as though everything is a miracle”
- p215: Anticipated Recall. Creating experiences ( with positive sensory pleasure) is incredibly important because you can come back to them again and again and again and derive immense value, as opposed to “things”. and in
Rapt: Attention and the focused life is good stuff, I’d highly recommend it. This concise but detailed thought alone is worth thinking about: You are, essentially, the sum of what you pay attention to.
I rarely buy things, being a recent graduate student saddled with loans and working on an exciting new lean startup, Bettr@. (When do you actually have the time anyway?)
Here’s a useful lifehack I’ve found for saving money at Amazon.com that you may have tried. Instead of using a wishlist for yourself, just save stuff in your cart for later.
1- allows you to essentially ALWAYS get FREE super saver shipping. If you want to purchase an item for $15 but want free shipping, just take the item from the “saved for later” pile and click “Move to Cart” to take the total over $25. And Ouila! Free.
Often times you get useful messages about price signals at the top of the page, below the annoying and irrelevant ads. The “Das Leben Der Anderen (Lives of Others)” DVD that I wanted to give to little bro, which used to be 15.99 is now 10.99. I wasn’t planning on purchasing it at 15.99 earlier, but I sure would be at 10.99.
As a sidenote, I love price discrimination that helps the consumer when I’m the consumer. I have a draft entry for a post envisioning the future of variable and even dynamic pricing that I’ll work on later.