Monthly Archives: November 2011

Founders’ Vision: The Long and Short (Roadmaps) Of It

What and who is inspiring?  Inspiring are the future and someone bold enough to take an attempt to imagine the future, even when the current technology or the en vogue business models do not align.  Others are inspired to follow by someone who is determined to sail into the unknown and appears to have a map of the unknown or even better to have the ability to draw one up while sailing, even when there is little behind that verve other than mission, determination, and a willingness to be foolish.  These destinations are not in the tangible world yet, but in the founder’s mind.

To tap into this as founders, we need to step back before starting work on the product itself to imagine the future.  You need to disassociate yourself from the present, and focus on what the problem is, and how it’s solvable in the ideal world, unbounded by technology limitations, money, or time.  If you have a vision that is outrageous, it’s linked to a massive problem, which is going to be around a while and is not immediately solvable. But you can imagine what a solution would look like in your ideal form.

Fred Wilson, in a post yesterday, calls this: having a long product roadmap, and recounts something Dennis Crowley said to him in an interview on Friday.  I excerpt Fred:

But this post is about something Dennis said about product roadmaps that really struck me. Dennis said that all the way back to Dodgeball, the predecessor company to Foursquare, he and Alex had a roadmap for the product that was years ahead of what they could actually build. When Dennis and Naveen decided to start building Foursquare, Dennis pulled out that roadmap and updated it to reflect the power of modern smartphones. And that roadmap goes way out, well beyond what Foursquare is today or what it will be in a year from now.

That is the power of a visionary founder leading a team to build the things that are only in his or her mind. I recall Mark Pincus, in the early days of Zynga, tell me about a game he wants to build someday. Zynga still has not released that game. When Jack Dorsey came back to Twitter, he said he was finally going to build Twitter 1.0. Think about that. And think about what Twitter 5.0 is in Jack’s mind.

You should start in this way.  You should not censor yourself as you imagine what is possible, even if its years ahead.  You can keep re-imagining as capabilities change, stretching your imagination further. That type of vision inspires both you and others.  It’s also part of why Fred and other VCs look for entrepreneurs who have been obsessed with a problem forever; it’s an indication that they are obsessed with a massive problem and focused on solving it for the long haul rather than the quick hit.

But then how do you actually start building something in the present.  Fred has a gem in the comments:

[Y]our first release should be a super tiny part of your overall vision designed to get you into the market.  [M]y partner Brad talks about the “narrow point of the wedge”. you can drive that into a piece of wood. but you can’t drive a brick into a piece of wood.

You need to take a way to find that first step, even if it’s a baby step in the direction of Vision 5.0.  My view is that the baby step, is not a throwaway – it’s also absolutely critical to get it right.  This is where the lessons of stripping something down to create something magical, sexy, obsessive, irresistible comes into play.  See this post and others under the Design tag.

Innovation and Open Sandboxes

Traditional economic theory and policy, focused on a simple model of economic efficiency, usually undervalues what happens at the edge, which is where disruptive potential emerges.  We’ve noted here, again and again, about the power of Professor Christensen’s theory of disruptive innovation in describing how game-changing customer value is created by companies jumping into markets that look already occupied, often with products that can be dismissed as toys or marginal when first introduced.  See here, for example.  We have also noted how policy often does not understand how important this innovative force is, and how policy must protect space for that innovative dynamic to take place.  See here, for example.

One way to think of this is making sure there are open “sandboxes” in which small entrepreneurs can play.

Fred Wilson has a hugely important post by Professor Yochai Benkler about how important keeping open sandboxes is in spectrum policy, which has been dominated by the flawed theory that the most economically efficient way for society to give access to spectrum is to one-time auctions to raise money for the Treasury.  The problems with that approach include that unless you are an incumbent (or come with a cash hoard like Google), you cannot play in this space because entry is billions of dollars, much of this spectrum in practice is hoarded and unused, and most importantly, actual empirical evidence is that disruptive entrepreneurs have created enormous economic evidence through playing around with “junk spectrum bands.”  Professor Benkler writes on AVC:

These dynamic markets are telling us something new: The future of wireless will likely be mostly unlicensed, with an important, but residual role of auctioned, licensed services. And yet the drive to auctions simply ignores the evidence from actual markets in favor of an outmoded regulatory ideal that is the opposite of what cutting edge radio engineering and dynamic markets show.

Most of these applications were developed using junk bands, where regulators dumped industrial equipment and microwave ovens. They thrived even in these harsh conditions, but in an effort to open up new, less wasteland-like areas for these dynamic, innovative technologies, the last Republican and current Democratic FCC chairs presided over the bipartisan creation of TV White Spaces, a policy that permits device manufacturers to expand the capabilities of unlicensed devices by sharing the TV bands with broadcasters. The TV Band auctions being pushed through the supercommittee threaten to displace these white space devices. As we look at the enormous success of unlicensed wireless strategies across the most dynamic markets, we see that doing so is penny wise, pound foolish.

There is a related (albeit slightly different take) on the problem of one-time spectrum auctions, and their effect on crowding out smaller entrepreneurs in this BusinessWeek article.

China: Following The Money

A little detour from the start-up stuff, but relevant to where entrepreneurial opportunity is.

A dominant meta-narrative of the last decade or so is the strength of the Chinese economy and the weakness of  our own economy.  There is a whole lot of true in this, but it can be exaggerated — “the grass is always greener” syndrome.  The FT has an article, that should have been page 1 material, suggesting that this may be true.

Most shocking is a survey suggesting that 60% of those with the means (defined as $1.6 million in personal wealth) are in the process or are considering emigrating from China.   They and others are looking for ways to transfer wealth out of the country, including through the purchase of luxury properties abroad, such as Manhattan penthouses and French Chateaux.  The causes are a deteriorating quality of life, institutionalized corruption, and a fear of a coming social explosion, i.e., those without the means or ability to emigrate will deal with these issues through eventual destabilizing political action.  One Chinese banker, closely tied to the political class says:

“There is a sense that we are approaching an inevitable breaking point, when the pressures in society will boil over and consume the rulers. Almost all of the elements are in place for an uprising like we saw in 1989 – corruption is worse today than it was then, people feel they can’t get ahead without political connections, the wealth gap is much bigger and growing and there has been virtually no political reform at all. The only missing ingredient now is a domestic economic crisis.”

While commentators have looked foolish predicting such an explosion for over 20 years since Tiananmen, if we are seeing privileged Chinese acting on this fear, including by disrupting their family lives, this may be a leading indicator that the bargain struck by Chinese leaders with their people — growth for silence and stability — is  near its end.

Surfacing the Rare Find

More on freeing the talent hunt from traditional HR blinders, a recurring topic on this blog (see Talent category).  This is important from both an individual company and entire business/society ecosystem levels, and it spans much farther than just technical jobs. Both article excerpts below relate to the recently released book, The Rare Find, by George Anders:

A  BusinessWeek article (excerpting the book):

Before long, Wong and D’Angelo [of Facebook] realized that their whimsy might serve a bigger purpose, too. “We developed this theory that occasionally there were these brilliant people out there who hadn’t found their way to Silicon Valley,” Wong recalled. “They might be languishing in ordinary tech jobs. We needed a way to surface them.” Goofy puzzles—some involved dinosaurs or gamblers—looked like the perfect bait.

What Google learned was that it had been looking at résumés far too narrowly. The company had started out by focusing inordinately on candidates’ education, grade-point averages, and even SAT scores. The thinking was that high-IQ people would do best at Google, and that the best way of gauging brainpower was to look at classroom records. Google ended up with lots of PhD holders from Stanford, MIT, Caltech, and top Ivy League schools. But by the time Carlisle got to work, Google was finding that some of these geniuses weren’t quite as effective as it had hoped. Even more important, company insiders worried that they might be turning away a lot of talented people whose true abilities surpassed their academic credentials.

“Take the wide view” became the overriding lesson of Carlisle’s experiment. There was room at Google for people whose grades had faltered because they were working 30 hours a week to pay for college. There was room for highly competitive people who had chased an athletic dream when they were younger—and now were applying that same relentless energy to professional goals. There was room, especially in nonengineering fields, for people who weren’t great students but had been running businesses, tutoring, volunteering, and otherwise being civic leaders from their teenage days onward.

Such candidates would stay invisible if Google rigidly scanned résumés the traditional way, from top to bottom; as many as 75,000 a week streamed into Google’s offices. So many candidates chased so few openings that if reviewers didn’t see some “Wow!” factor right away, they hit the “Reject” button. The best hope of spotting these hidden winners, Carlisle came to believe, was to steal a quick peek at the bottom of the résumé. He became known as the man who analyzed them “upside down.” Now, when Carlisle pulls one up on his laptop—which happens dozens of times a day—he begins by tapping the “Page Down” key a couple times until he reaches the final entries.

Then he scrutinizes the loose ends of candidates’ bios. “I want to know their stories,” Carlisle explained one morning. “I want to know what these people are all about.” In a moment, he might start hunting for the classic markers of competence: work history, education, credentials, and the like. But first he wants to see if some special, rare attribute could point the way to greatness.

A WSJ article:

Finding exceptional talent, Mr. Anders contends, is now more important than ever: In our hyper-competitive global economy, business urgently needs “game-changers,” “impact players,” men and women who are “five times better” than everyone else. The problem, he astutely observes, is that most organizations rely on a fairly conservative selection process that focuses on narrow abilities and gives short shrift to broader or unusual potential, excluding some of the most promising candidates.

The real challenge may not be so much identifying talent as getting serious about seeking it. Most employers worry far more about the devastating effects of making a bad hire than about selecting someone who is competent but not exceptional—good, not great. Add to this the tendency (well-documented by Mr. Anders) to overvalue discrete competencies—facility with spreadsheets, say—and to discount the importance of less quantifiable traits such as temperament and persistence. Little wonder that human-resources departments extol off-the-chart talent yet often seem uneasy when it comes knocking. In many cases, it’s precisely the potential of exceptionally talented applicants to disrupt an organization that prevents their hiring—even when such disruption is precisely what a company might need.

Dorsey/Jobs Convergence

Dorsey, speaking at the Asia D Conference, on what he takes from Jobs’s design sense:

Jack Dorsey says he takes a lot of inspiration for what he does from late Apple founder Steve Jobs.

When he designs products, whether at Twitter or Square, Dorsey said he aims to create products that disappear so you are just using them. Calling Jobs “a mentor from afar,” Dorsey said Jobs has had a major impact on his approach to business.

“I love simplifying something down to a base essence,” Dorsey said, speaking onstage at AsiaD in Hong Kong.

Why “It’s Already Been Done” Is A Green Light?

Instead of seeing a billion dollar company — and saying I should have done that or I got here too late — see it as an opportunity.  Indeed, taking a small piece of those revenues can make you successful, while the company of which you are jealous must find hundreds of millions of dollars a year in incremental revenue to move the needle.  Consequently, those companies are hemmed in when evaluating the pursuit of amazing opportunities by markets appearing too small or opportunities that might cannibalize their existing markets.  These opportunities are open to you.

Extraordinary Perception of Ordinary Things

From the review of Steve Jobs’ biography in the New York Times:

So does his extraordinary way of perceiving ordinary things, like well-made knives and kitchen appliances. That he admired the Cuisinart food processor he saw at Macy’s may sound trivial, but his subsequent idea that a molded plastic covering might work well on a computer does not. Years from now, the research trip to a jelly bean factory to study potential colors for the iMac case will not seem as silly as it might now.

Skeptic after skeptic made the mistake of underrating Steve Jobs, and Mr. Isaacson records the howlers who misjudged an unrivaled career. “Sorry Steve, Here’s Why Apple Stores Won’t Work,” Business Week wrote in a 2001 headline. “The iPod will likely become a niche product,” a Harvard Business School professor said. “High tech could not be designed and sold as a consumer product,” Mr. Sculley said in 1987.

Mr. Jobs got the last laugh every time. “Steve Jobs” makes it all the sadder that his last laugh is over.

Mickey Drexler: Vanilla, Chocolate, Strawberry

I read this Lunch with FT with Mickey Drexler after reading the article that prompted my Quantity, Quality, Taste post.  I have no idea why, but for some reason, they harmonize together for me even though dealing with completely different lines of business.  He says within your business, you always need to know what your Margherita or vanilla or chocolate is and make sure it’s in stock and that you keeping those customers happy before you move onto your exotic flavors.

I say, “what’s special about J. Crew?” and this time Drexler brings up pizza. “I know what the most popular is going to be here,” he says, and touches me on the shoulder. “Margherita! It always is. Watch …” The waiter comes to present the ham, and Drexler asks him what the most popular pizza is. “Margherita,” says the waiter. Drexler looks delighted. ..

“You know what the most popular ice-cream flavours always are? Chocolate and vanilla, and then maybe, well, I like cookies and cream, but I don’t know if that’s right. Strawberry?

“It’s the same with cookies: chocolate chip, then oatmeal raisin, then, maybe sugar. And you always have to have this in stock. I tell this to my team when we go out together: you need the Margherita! People like consistency. Whether it’s a store or a restaurant, they want to come in and see what you are famous for.”

…He looks at the waiter. “What ice-cream is the most popular?”…

“Chocolate, vanilla” – Drexler has a “you see” smile on his face – “Then today we have Orange Allspice as a special.” This stops Drexler. It is clear that he thinks the Orange Allspice was someone’s not very good idea and that a lot of it is going to be left in the restaurant’s freezer at the end of the day.

“The meatballs are very tasty,” he says to comfort the waiter, who looks a little confused about his role here.

“You should try them on the pizza!” says the waiter helpfully. Drexler looks at him. “But you have meatball pizza, right?” he says carefully.

“Yes!” says the waiter, clearly not getting the point: if Drexler wanted his meatballs on his pizza, he would have ordered them that way. He didn’t, partly because he doesn’t believe in confusing things: food or fashion, you need to be clear about what you stand for.

Let’s move away from pizza and fashion.  The same lessons applicable in innovative technology.  The little things can trip you up; even when you are the most innovative company.  Think Apple and its Death Grip incident with the iPhone 4.

Wang Xing: Quantity, Quality, Taste

Quote to think about from Wang Xing, the Chinese Internet entrepreneur who founded clones of Facebook, Twitter, and GroupOn.  He is discussing the development of consumption in societies:

“When consumption develops, there are three phases,” he says. “The first is focused on quantity, providing enough to meet demand, the second on securing product quality, and only during the third will people start developing tastes. On the internet in China, we’re still very much in the second phase.”

Perhaps, this could also be applied to the development of new product categories (and simultaneous existence) within and across societies: think the development history of phones (functional cell phone, Blackberry, iPhone) or other product categories.

Put this into the context of a product category that you are trying to create, and there are clearly different approaches that can work, and the timing of your entry may also have something to say to that.  Your personal vision might also hem you in; you may not be satisfied to put something out there that is substandard or a copy of what someone else has done.  For example, Steve Jobs would never have been satisfied with a ho-hum computer when launching the Mac or a ho-hum phone when launching the iPhone.

Authenticity

I re-acquainted myself with the word “authenticity” recently and it ties together many of my thoughts about the history and direction of the Internet.  To summarize my definition in this context, the concept is letting people be their raw and real selves, and encouraging them and enabling them to.

From moving from the notion of collecting eyeballs as the root of a successful business model (like traditional media) in the mid-late 1990s, this has been one of the guiding trajectories of the Internet.   See some of my prior posts on the Internet’s history: from its role as providing us better soap boxes over time, to enabling expression and sparking an unprecedented conversation among hundreds of millions of people, to enablement where people can express themselves through events, to Facebook and Friendster and others’ role in letting us be out there with our real identities.  The internet has become more personal and more of a peer-to-peer conversation.

The word is authenticity. Focusing on it and finding ways to give that power to people will help create new killer Internet businesses.