Another re-post while I’m busy with work and Vogel Labs.  This is a very important insight.

Earlier today, I stopped into MIT’s Kresge Auditorium for the interview between NPR’s Tom Ashbrook and Google CEO Eric Schmidt.

During the interview, Eric stated (paraphrased), “corporate social responsibility is good for shareholders….the CEO should be focused on it.”

The first thing that came to my mind was management’s primary responsibility: profit maximization.  While this is of course debatable whether this is management’s only responsibility, I would say it is the primary responsibility.

Eric’s statement also reminded me of another concept: the triple bottom line–the idea that a company’s success can be measured economically (profit) , environmentally (planet) , and socially  (people.)  As one would guess, research seems to suggest that companies that focus solely on profit maximization make more money than those that additionally focus on social and environmental issues.

Let’s assume that this is in fact historically true–companies focused on profit maximization make more money.  Do we have reason to believe this has changed (or is changing)?

I think we do.  This is a product of the Information Age.  Nothing is secret on the internet.  When something evil happens, people know about it.  (Heck, I heard about Kanye taking the microphone from Taylor Swift within minutes, and I pay no attention to their music or the VMA’s.)

If nothing is secret, I think social and environmental responsibility do in fact begin to coincide with profit maximization.  As Eric went on to say (again paraphrased), “Social Responsibility gets you better people and better financial returns.”

All else equal, do you want to pay money to an Evil Empire or a company that provides value beyond the product?  And with the internet, I think people are more aware of that “value beyond the product.”

-Kevin
11.4.2009

Image via Wikipedia

On Monday, I had my first day of work at Tessella  (the thoughts expressed at KevinVogelsang.com are the sole opinions of the author and are not that of Tessella, any of its associates, or any companies affiliated with Tessella).

Being the new guy is always humbling.  It’s almost like being a kid again; you have to be shown how to do simple things like get to your email and how to login to the network. I’ve also got a lot to learn about the enterprise IT industry and clinical trials, as well as working in a larger organization.

Suddenly, I’ve got a big opportunity on my hands now.  2 years ago, I would have never thought I’d be working in the IT sector.  But, it’s incredibly interesting to me.  Information flows and making information more usable for decision-making are things I think about a lot. I just didn’t previously understand the full role that IT played in this arena and how it affects how the business (and even the science) is run.  Plus, Tessella gets the most interesting projects I’ve ever seen.

But my job isn’t the usual job you’d think of when you think “IT Consultiong”.  Far from it.  And best of all, in my work I get to be both an entrepreneur and a Hunter.   I don’t think I could find a job that suits me better.

Heading into work I had a saying from Jeff Bezos in my head that he uses at Amazon:  “It’s always Day 1.”

Onward, into the fog.

-Kevin
6.9.2010

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I documented my rationale more closely in another series of essays (“Kevin, Why entrepreneurship for you?”), but at any rate, in the summer of 2008, I eventually made the decision that I wanted to start my own company, so I started trying to figure out what that meant and how to do it.  Here’s how I got my initial understanding of the the startup world and starting a business in general:

• I did a bunch of internet searches.  This was completely unhelpful for reasons I talked about yesterday: “The difficulty of Knowledge Acquisition on the Web“
• I went to the MIT e-Club (entrepreneur’s club) a few times.  This turned out to not be too helpful for me because I never got the chance to talk to the right people that were there.  Additionally, I was so new to the concept I didn’t even know what exactly to ask.
• I took several MBA courses at Sloan.  These were very practical courses and all were very helpful.  These included:
  • Technology Sales and Sales Management with Howard Anderson and Ken Morse (awesome class)
  • Early Stage Capital with Shari Loessberg (awesome)
  • Business Law with John Akula (awesome, everyone should take a law course like this)
  • New Enterprises with Noubar Afeyan, (a business planning course, but a good primer with good stories from Noubar)
    • From this class, I learned that getting as many stories as possible was very elucidating.
• At some point during the semester, someone pointed me to Paul Graham’s essays.  These are very helpful.  I read them all and learned quite a bit.  I suggest everyone do the same.
• I enrolled in the MIT Venture Mentoring Service.  I went in and pitched a number of ideas.  Good ol’ Lou Goldish would tell me I was never going to be able to do any of this, and this was a good thing.  My creativity had my head up in the stars.  And this was an absolute gift; my creativity lead me to the startup world where people pursue ideas. But, I needed to temper this creativity and figure out how to better harness it (in business and in all aspects of my life frankly).  Thankfully, Lou helped me with that.  He helped me get focused on the next few inches in front of my face and better understand the level of focus necessary for a startup company (and every endeavor) and what can be accomplished with very little resources.  Now, I largely did figure this stuff out for myself, but having someone basically tell me my ideas were stupid helped me with this.  (Oh, and I never interpreted my ideas as actually being stupid, more on this sort of thing later….)
• I used the MIT alumni directory and about any other means I could find to get in touch with investors and entrepreneurs that were connected to MIT and the entrepreneurial community.  I talked to as many people as possible about their experience.  This was extremely valuable.  I was able to gain a lot of experience vicariously through others. I also realized that everyone has a different opinion on pretty much anything related to startups, a good lesson.

This was how I got my bearings and got started.  It was a very difficult process finding my way around, even at MIT where I’m told the resources and entrepreneurial culture are much stronger than anywhere else in Boston.  I can only imagine how much more difficult this process would be elsewhere.

This is how I did it.  And while you may not be able to use all these resources, I think you can find ways to make use a lot of these methods.  Understanding startups is like learning about a new country, to learn you have to fully immerse yourself in the culture.

But if I were to do it again, I would first read Paul Graham’s Essays (you’ll find more of his essays here). to give yourself a primer on the language.  I would then find someone that seems to know something about startup companies.  Then get them to introduce you to other people involved in the community.  Also have them tell you what blogs they read on the topic.  Through blogs (we’ll count Twitter in this as well) and talking to people you know, you’ll eventually find your way into the community.  And knowledge is held within communities. You need to find the community.

(This is the advice on a more conceptual level.  I’ll provide more specific advice later.)

I eventually found a team and raised seed money from Shotput Ventures, but that’s another part of the story…..

-Kevin
5.5.2010

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Getting things done in an organization where people have personal relationships is tricky; in the course of action, toes get stepped on, which stings a little no matter how tactfully done.  If you spend a lot of time with people, you have a personal relationship. Entrepreneurs deal with this a lot in startups, especially if they’re working with friends.  If you claim you don’t have a personal relationship with the people you work with, you’re probably an ass that no one can stand.

The absolute best way I’ve found to deal with this is to develop an “On the Court, Off the Court” mentality.

If you’re an athlete (let’s say you’re a basketball player), you’re friends with at least most of your teammates.  You spend a lot of time together at meals, sitting in the locker room, on the bus to the game.  If you aren’t friends with them, there is a much higher chance you’ll quit the team. And despite being friends, when you’re on the court at basketball practice, you’re focused on getting better and performance.  This will inevitably include getting a little rough with your friends/teammates.  You’re there playing hard, and you need to be.  You’ve got to get better and so do your teammates.

However, when you’re off the court, you’re back to being friends again.  The arena is a separate place.

I haven’t always been able to pull this off.  But the “On the Court/ Off the Court” mentality (and integrating that into organizational processes) allows people to better delineate when it’s game time and when it’s friend time, when you’re the boss at work and when you’re a colleague, when you’re the fraternity Officer and when you’re just another brother trying to have fun in school.  If people don’t understand rules of the relationship, or have uncertainty in how they should act,  things will start to fester, more things get unnecessarily taken personally, and things can quickly take a bad turn.

-Kevin
5.3.2010

Yesterday, I talked a little about Hunter vs Farmer theory.

I’d say many entrepreneurs are absolute hunters.  They like high stake missions, go after opportunities, etc.

But this offers a paradox, can a hunter build a business?  Once they get a hold of the opportunity, they’ll eventually need to start farming: getting the details right, being methodic, etc.  (You could say the same paradox exists for venture capitalists.  They have to hunt down investments, but they need to farm their portfolio).

The entrepreneur deals with this by putting the right people in the right place.  The personnel needs of a company change over time.

They also deal with this by doing what they need to do, making the right decisions, and keep going until they get they get the kill.

This is why truly great hunters are relentless. Relentless hunters turn the “farming” aspects into part of the hunt;  they do this by hunting down the right personnel and by seeing farming as another step in the longterm hunt.

-Kevin
3.4.2010

Today, Fred Wilson wrote  a post, “Nature vs Nurture and Entrepreneurship”, about the traits of an entrepreneur.

The following exchange occurred in the comments:

Kid Mercury:

IMHO the answer to who wins the beef between nature and nurture is always both. i’ve changed so much in my life (used to be a lazy person trying to find ways to work part-time and get by) but events in life have transformed me….

Aviah Laor:

“trying to work part time and get by” is an early symptom of an entrepreneur

I found this interesting.  I’d never heard anyone acknowledge that “just getting by” had any relationship to entrepreneurs, much less entrepreneurs being lazy.

After pondering the comment a little further, I realized it’s more about efficiency than just “getting by” or being lazy.  Kid Mercury’s instincts were forcing him into a certain behavior.  I think the attitude is better described by, “I’m not going to expend resources on this, because my time/energy is needed elsewhere.”Although, the individual probably isn’t conscious of this reasoning at the time.

Of course, my opinions are rooted in a model of humans being patterns, although these patterns are malleable.  Moreover, just as the animals do, humans have instincts.

Entrepreneurs are hunters.  They go out and and chase things.  They see how things work by using them.  They go at it until they make it happen.  They hate when things don’t work.  They want a high-stakes mission.

Thus, they have no patience for frivolous usage of resources that do not aid the hunt.  And that’s good.  Neither do startups.

-Kevin
2.19.2010

I probably still count as a new entrepreneur.  But, I’ve been around startups for several years and  founded one.  That’s a significant difference from someone who’s just setting out on pursuing an opportunity, so humor me.

The Big Question that everyone seems to miss is the most obvious.  Amidst all the excitement, new entrepreneurs forget to ask: “Why do I want to do this?”

The two most common answers:

1. “For Profit”.  Well, I hope you’re in it for profit, and I hope it’s a big opportunity.  But there’s also a big chance that it will fail and that it isn’t actually a big opportunity.  If you’re a more experienced entrepreneur that has built a business before, and is sitting on some money and some success, this is a perfectly fine answer.  But, if you aren’t, you better be sure to assess the brutal facts before you dive in.  Luckily, people will make fun of your idea and tell you it won’t work enough that you’ll probably just give up.

2. “A lot of people have this problem.”  This is a better answer for a new entrepreneur.  But, my first question in return is, do they?  And how do you know? And does it matter to you enough to be poor/frustrated/stressed/have a 3rd mortgage?

The best answer by far for a new entrepreneur is “I have this problem.  I want this company to exist.” Personal need is powerful.  First of all, you are your customer.  You understand what you need to make.  Second,  if the problem is one that you really want to solve,  it’ll keep you up at night.  You won’t be able to stop thinking about it.  And this is the perfect state to be in, because when you’ve started your company, it’s going to be in the back of your mind all the time then too, so you might as well start getting used to it.

I have to wake up in 4.5 hours.  But, I figured I’d write this post.  I can’t sleep because I have a company on my mind and visions of dreams come true dancing through my head.

-Kevin
2.19.2010

This post is very important to me. It is the 2nd part of a set of posts that began with Our Sphere of Influence. A Sphere of Influence is our realm where we matter most.  Check out the post for further discussion.  These posts hinge on the concept. Do provide your input by commenting.

Technology gives us new capabilities.  Consequently, technology has an important side effect: it makes our Sphere of Influence more accessible to us.  And when a group of people gain access to their Sphere of Influence, communities form.

I don’t think people have thought of it this way, but this is the framework for most community-driven movements:  a group of people focused on their Sphere of Influence that connect with each other.

The initial motivator for getting involved in a community may vary (they may not even be aware of the community), but people recognize their Sphere of Influence within a community of people when they begin to be acknowledged for their work.  This recognition pushes them forward as they realize the importance of their work and realize their work matters.

In the open-source software movement, programmers needed better ways to use a computer, a piece of technology that was highly enabling for them.  They also wanted to have greater control over their tools, to make the tools better, and to learn.  The community pushes this forward as they recognize and appreciate each others work.  They know their work matters and they benefit from the work of others.

The Wikipedian community spends huge amounts of time contributing to Wikipedia.   They may begin by wanting to contribute to the project.  They’re pushed forward when they see the impact/appreciation of their work through recognition and gaining higher command of their realm within Wikipedia.

Technology has another side effect: it makes new Spheres of Influence available. New technologies eventually lead to social changes that cause new communities to form.  A given function becomes democratized and community-driven.

With rapid prototyping technologies becoming affordable, a much greater number of people can take part in designing and fabricating physical things: an open-source hardware community is forming.

The same is also happening with biology research.  There’s a Do-It-Yourself biology community forming completely outside of academia.

Gov 2.0 represents the true democratization of government.  Citizens don’t take part in government by voting for someone. They just implement functions themselves using government resources.

When new Spheres of Influence become available, we’re able to choose one that better suits us.   Entire industries and social constructs are being completely disrupted by technologies that allow  people to do it themselves.  Communities of people form that are willing to do it for free because it’s what they like to do, and its where they feel they matter most.  It’s tough for businesses to compete with, unless they daringly change their business models or create new ones.

But, it’s not impossible for businesses to cope.  The open-source software companies did it….

In the following posts, I’ll talk more about the application of these concepts.

Your comments are important and will help me refine these thoughts as I continue to write about them.  Give me your thoughts by emailing me at KVogelsang11@gmail.com or leaving a comment.

-Kevin
2.8.2010

A few weeks ago, way back before Thanksgiving, I had the chance to meet Eric Ries, founder of IMVU and author of Startup Lessons Learned.

Eric has some good insights about startups, but I think it all comes back to two basic principles that are broadly applicable:

1) Be careful how you measure progress. You manage what you measure.  If you measure the wrong things, you’ll manage poorly.  Additionally, Eric brought up a good point, “Don’t assume advancing the plan is equivalent to progress.  What if the plan is flawed?” Particularly in startups, but in any context, you need to be adaptive.

2) If a mistake is made, spend an amount of time, proportional to the magnitude of the mistake, implementing systems for preventing that class of mistakes. Don’t make the same mistake twice.  Prevent that class of mistakes by incrementally developing prevention systems.

-Kevin
12.2.09

Last week, I claimed that the idea is trivial in comparison to the team, and I mainly talked about the 3 characteristics of a great team (Shared Values, Understands the Customer’s pain, Embraces their Role).

Now, here’s the reasons why the Team ultimately trumps the Idea:

• Team is the driving force. Let’s assume you have the perfect idea.  It’ll take years to build a company and bring the idea to fruition.  It takes an average of 8 years to reach the 50 million in revenue milestone.  However, hitting this level of revenue is a function of success and great market opportunity.  Therefore, I’d say building a successful company in any market takes an average of 8 years.
• The Idea will change and evolve. The land of startups is a volatile and bewildering place.  Markets change. Completely rational and mutually beneficial business models may not work.  Resources are slim.  And like any animal in the wild, the company must adapt.  The ability to adapt comes from the insight and resilience of the Team.
• The Team embodies the idea. In my experience, a startup is like a snowball.  The lead entrepreneur will probably need some idea to get the ball rolling.  His energy and commitment will attract others interested in the space.  If the team is chosen wisely, the team will consist of the right mixture of people.  Culture needs to be developed.  But the right passions and experience need to be there already.  If things go well, that snowball will slowly gain momentum and turn into a boulder careening down the mountainside–headed for something catastrophic or spectacular.  And along the way, the people will influence the course.  A company needs a shared vision, but getting there will require a stream of ideas.

• You’ll screw something up. Things go wrong. If the team jumps ship as soon as you hit your first storm, so much for that brilliant idea.
• The Idea to Great Teams Ratio. A lot of ideas are floating around out there.   But, there are relatively few functional teams that can execute anything, much less swing for the fences.

-Kevin
11.19.2009