Motivational Quotes To Keep You Going

"Few men during their lifetime come anywhere near exhausting the resources dwelling within them. There are deep wells of strength that are never used."
       -- Richard Byrd, Explorer 
"A man can get discouraged many times, but he is not a failure until he begins to blame somebody else and stops trying."
      -- John Burroughs, Writer 
"Failure should be our teacher, not our undertaker. Failure is delay not defeat. It is a temporary detour, not a dead end."
      -- Denis Waitley

Investors invest in Lines, not Dots

We've been speaking to a few investors. A recurring theme that comes across is that investors invest in lines, not dots. They want to meet you, learn a little about what you are doing, and then track your progress (i.e. performance) over time. As you make progress, their confidence grows - and they ultimately feel comfortable investing in you.

Mark Suster has a post on this, which is where this graphic is from.

Resource allocation at the speed of light

I was at Northwestern Law's SBOC Conference this morning. On one of the panel speakers made the comment that entreprenuership is "resource allocation at the speed of light". Given my resource-centric view of the world, this comment particularly resonated with me.

I've heard it said before that, in an early stage startup, many of the decisions you make are "bet the entire company on it" decisions. This sounds grandiose and hugely important. This is only because most early stage startups do not have much of anything and, in reality, are yet to prove themselves to be hugely important. (I would include mine in this category). However, the most important decisions you make are related to what you do with the resources that you do have - time, money and whatever else that you have.

As I have alluded to in the past, something that I seem to struggle with every day is determining how much I, and the teams that work with me, can accomplish in the time that we have. Over the past quarter, here at Kellogg, what we work on has been changing week to week. Sometimes things move faster, perhaps because a customer verifies an assumption quicker than we'd thought. At other times we've spent hours arguing (constructively) over issues such as pricing. All the movements we make may not literally be allocating our resources at the speed of light. However, sometimes it sure does feel like it.

The Startup Visa as a weapon in the startup arms race

While we're all waiting for news on the Startup Visa, here is an extract from Eric Ries (of The Lean Startup fame) on why a 'Startup Visa' might be good for the US. It's so well argued, it almost makes every foriegn entrepreneur want to go back home to respect their patriotic roots as much as Rie respects his (presumably American) roots.
The United States is locked in a new arms race for that most precious resource -- the future entrepreneurs upon whom economic growth depends. Substantial research shows that immigrants play a key role in American job creation. For example, over 25% of the technology companies founded between 1995-2005 had a key immigrant founder. These companies produced over $52 billion dollars in sales in 2005, and employed 450,000 workers that year. Similarly, 24% of all the patents filed in the US in 2006 had a foreign resident as inventor or co-inventor.
If we allow other countries to welcome these immigrants, support them and nurture them, we will lose out in this race. We will not lose on their products -- after all, most of them are global. We will not necessarily harm investors, either: as capital is increasingly global, they will be able to invest wherever good ideas are born. The cost will be felt in jobs -- thousands of new jobs that could have been created here, but weren't.
America is losing the global arms race for entrepreneurial talent. There is a solution, called the Startup Visa. There is a special visa for international investors that want to bring capital to this country to start a business with. It's called the EB-5 visa, and we already set aside 10,000 every year for this purpose. Yet this policy does nothing to bolster our position in the arms race -- the visa attaches to the investor, not the entrepreneur.

With a small change to the EB-5 definition, we can reverse that priority, making the visa available to qualified entrepreneurs seeking to raise capital from American investors to create jobs, economic growth, and assure our future prosperity.

Many a mickle makes a muckle

In the words of my high-school head-teacher:
many a mickle makes a muckle
  1. (UK) a lot of small amounts together, become a large amount.
(from wiktionary)

The Four Minute Mile

For many years it was widely believed to be impossible for a human to run a mile (1609 meters) in under four minutes. In fact, for many years, it was believed that the four minute mile was a physical barrier that no person could break without causing significant damage to one's health.

On May 6th 1954 Roger Bannister ran a mile in 3 minutes, 59.4 seconds. To the revelation of the world, he had broken through the psychological barrier many had held until that point.

Once the four minute barrier had been broken, 56 days later another runner, John Landy, ran the four minute mile in 3 minutes and 57.9 seconds. Within three years, by the end of 1957, 16 other runners also cracked the four minute mile.

What psychological barriers are holding you back? What psychological barriers does your organization, and even the world, hold on to so dearly?

Recipe for starting a high margin business

Find something that costs someone either lot of money or a lot of pain -- preferably both.

Find a better, cheaper way to do it that is less painful for that certain someone.

Provide your new solution to that someone, charging just a little bit less than what the old method used to cost.

Sounds simple, no?

Which is more crucial to the success of a startup: the idea or the execution?

Is it the idea or the execution that makes for successful startup? This is one of those debates that seems to have raged on through the ages, for as long as time can remember. Many people here, at Kellogg, believe that it comes down to execution. I had counted myself among them, but I've now started to wonder if this is really the case.

The argument for why execution is important is easy to make. There were social networks before there was Facebook. There were search engines before Google. There were MP3 players before there was the iPod. It was the particular way in which these ideas were executed by their respective companies that allowed them to gain considerable more traction than what had gone previously.

The problem with this argument is that they were already based on fundamentally big ideas with huge opportunity. If these same companies had 'executed' on smaller, worse ideas - would they still have been as successful? If Mark Zuckerberg, Brin & Page or Jobs had decided to use their considerable talents to build a website selling ice online, would he have been as successful? Or would the idea have led to their downfall?

The argument that execution is more important than the idea is attractive. It allows us to believe that we can be masters of our own destiny - that using our own natural talents and capabilities we can make something out of nothing where others might not be able to. The fallacy with this line of thinking, though, is that there are a lot of smart people out there. They are just as capable as you or I. As just one data point, you only have to consider that business schools graduate thousands of them every year.

If there are plentiful capable people out there, what differentiates all these people? Perhaps, just perhaps, it is the idea - the problem - they focus their energies on. If all these people are able to 'execute', as I postulate that they are able to, perhaps it is those who focus on the biggest ideas with the most opportunity that will truly be able to 'make' it.

Where is your startup on the hype cycle?

A hype cycle is a graphic representation of the maturity, adoption and social application of specific technologies. More on Wikipedia.

Stumbling onto something big

I started my career in 2001 at Orbis Technology, a UK based company that provides technology for bookmakers and casinos. The story of how the company got its break is legendary. In the late 1990s, the company was a mere 4 or 5 people. They built custom software for local government and various companies. One of these companies was a relatively small-time bookmaker.

As the world started to realize the true impact of the Internet, one of the biggest bookmakers in the UK realized they were years behind the others, in terms of having an offering for this new Internet channel. The bookmaker asked their internal IT department how long it would take to develop an Internet offering; the response came back that it would take 2 years.

Orbis Technology heard that this big bookmaker was looking for a Internet solution. Having already built something for a smaller bookmaker, they offered to have something built within 30 days. For the executives at the big bookmaker the choice for obvious. Within 30 days an Internet betting site was delivered... and though it looked like something that had been built in 30 days, Orbis Technology now had a flagship customer. Quite quickly, many of the other bookmakers in the UK, as well as a number across the world, were clamoring to use Orbis' solution.

Orbis Technology has since renamed itself Openbet Technology and been sold for £208 million to an investor group.

America's cultural nuances in entrepreneurship

On the West Coast, it's all about how cool the product is.

In the Midwest, what's the path to revenue?

On the East Coast everyone wants to know how big the market is.

Calling up your friends

We recently spoke to a mentor who had started a successful service-based company. He had recently sold his business for over $300M. We asked him how he had gained his first customers. "Well," he said, "I started the business when I was 50 years old". We looked at each other then looked back at him as he continued, "I just called up all my friends".

The lesson here? What kind of relationships are you building for yourself for the company you will start in ten or even twenty years time?

Mind Distortion and Comparables

Why is it that whenever I have something I want to do - something that I'm really excited about - it always seems to take far longer than I imagined? Then there are those other tasks - the ones that I really dread doing - which never seem to take quite as long as I imagined.

This human trait of underestimating the things we love to do is perhaps the leading cause of overcommitment - thinking we can do everything, and then ultimately achieving little of what we set out to do. Conversely, the trait of overestimating is perhaps what holds us back from attempting those things that are not as difficult as we might presume.

When you can't trust your own estimations, what can you trust? I've recently started to learn that it all comes down to comparables. If you've done this before, how long did it take you last time? If you've never done it, how long did it take someone else? How similar were they to you? What characteristics of the environment are different to other those comparable scenarios? What is the estimation of a neutral third party?

With a few comparables, you at least start to head down a more sane path then what might be in your head alone.

Extending the student visa for starting a company is possible?

I've previously moaned about the Startup Visa, which seemed like the only thing that might prevent me from getting booted out of the country at the end of the MBA program. The lack of mention of the visa in the Government's recent Startup America announcement did not go unnoticed.

Well, it seems like I can get an extension to my current F1 student visa in the same way other students get visas for regular jobs - through the Optional Practical Training (OPT), which comes as part of an international student's existing F1 visa. The OPT provides a 12 month visa extension beyond the end of the MBA program.

The International Student advisor here at Kellogg points me the OPT policy guide, in particular section 7.2 pages 17 & 18:
What types of employment are allowed for regular pre- and postcompletion OPT? 
All OPT employment, including post-completion OPT, must be in a job that is related to the student’s degree program. 
For students who are not on a 17-month extension, this employment may include: 
Self-employed business owner. A student on OPT may start a business and be self-employed. The student must be able to prove that he or she has the proper business licenses and is actively engaged in a business related to the student’s degree program.
Can it really be this straight-forward? I guess we'll find out over the coming month, as I put my application in.

Friend network versus taste network

Evan Doll, speaking at the Kellogg PE/VC conference, made an interesting distinction between "friend networks" and "taste networks". Facebook is a friend network. If you "unfriend" someone on Facebook, it can have social consequences in your real life. This is because to "friend" someone requires permission from both parties for the connection to be made.

In contrast, Twitter is much more a "taste network". It better reflects people you are following to get a feed of information related to your tastes. This is partly a reflection of the one-sided permission model; the other party does not need to accept you as a friend. This allows you to follow celebrities and others, who have have interesting things to say, but might not necessarily want to "friend" everyone.

Evan Doll founded Flipboard, which neatly brings content flowing though all your social networks together in a fun "social magazine".

Reflecting on Winter quarter classes

We're hitting the seventh week of Spring quarter, here at Kellogg. This puts us a mere 16 or so weeks away from graduation. I feel like time has been flying by particularly fast over the last few months. Where has all the time gone? (Perhaps in writing blog posts :-S).

This quarter I'm taking the following classes
MORS460 really buys me time to think about my team experiences at Kellogg - and helps me reflect on what has worked and where things went wrong. MKTG922 is a project that my team did most of the work for over the Summer, buying me time to work on other things this quarter. The project, comparing how food companies use media and media companies make food shows, has really helped me learn a lot about CPG marketing - which is where the 'state of the art' is - so I'm appreciate of that. ENTR462 and MKTG 465 are helping me think through my startup interests.

Bidding soon opens for the Spring Quarter.

Microsoft's extended family

The FT has written an article about Nokia's new strategic relationship with Microsoft, Elop jumps into the arms of former boss:
On Friday, Mr Elop [Nokia CEO], a Microsoft executive until last September, jumped into the arms of his old boss. 
At a London hotel, Mr Elop was joined by Steve Ballmer, Microsoft’s chief executive, and the two men announced a partnership under which the Finnish group plans to use the US tech company’s smartphone operating system. 
Mr Elop is betting that Microsoft’s Windows Phone operating system will belatedly enable Nokia to fightback against Apple’s iPhone and devices featuring Google’s Android smartphone operating system.
Microsoft first captured IBM as a distribution partner through personal relationships - ultimately "making the business" that is the modern day Microsoft. It is interesting note the level to which personal relationships continue to play an important role for a company now as gigantic as Microsoft.

Meeting, after meeting after meeting.

A first year MBA student looking at my calendar two weeks from now is slightly envious, "I wish I had a calendar like that". While in the first year of school, a good portion of your time is structured - core classes during the day; team meetings for these classes etc.

The gaps - empty spaces - in my schedule have come about through careful selection of electives to reduce coursework load. However, what is less obvious is that these empty space don't last for long. Quite quickly the extra-curricular activities take over.

There are no empty spaces in my calendar for this week. Pretty soon, I'm sure there won't be much left for my schedule in two weeks either.

Entrepreneurs and artists

A wildly successful entrepreneur who was speaking at Kellogg PE/VC conference made the analogy of entrepreneurs to artists.

98% of artists are not successful. They struggle to make ends meet. Only 2% are successful. Yet all artists - all 100% - can tell you that it's all they want to do and that there is nothing else they would rather be working on.

If you have another option to starting a company, and you're having a hard time deciding between starting the company and choosing the other option - then, at your current life stage, entrepreneurship might not work out for you.

I think this is hard-core mentality, but it is the only way you can explain the tolerance for hardship to yourself and others.

There are fleeting chances, every day

One of the things that most fascinates me about business schools, particularly in the US, comparative to my undergrad experience in the UK, is the way that these schools bring people together - from the local vicinity as well as all over the world.

The first way in which this "bringing people together" role is apparent is obvious - through the students that arrive every year, to learn and earn their MBA, Phd or other certification. Just recently their has been talk of Kellogg recruiting students for the Executive MBA program from London -- it appears there are already students who "commute" from their to Kellogg's Miami campus.

However, there are other ways too - such as guest talks, conferences, exchange programs with foreign schools, on-campus recruiters - to name just a few. In some ways, the business school campus may have more in common with a transport commuter hub - such as an airport - than one would think.

What does this mean for those passing through this hub? I summarize it in just one word: opportunity. It allows you to take your ideas, plans and life in completely different directions. It gives you a chance - just a chance - to fleetingly catch someone as they pass by that could take you to a different place. Often, this may not be the person you expect.

Kellogg's Superbowl Review

There's been a lot of attention around Kellogg's Superbowl review, both within and outside Kellogg. With now a long history behind it, it has been growing in prominence. Professors Calkins and Rucker deserve credit for what they've established, underlining Kellogg's strength in marketing.

In terms of the ads themselves, I like Chrysler's Eminem Super Bowl Commercial - Imported From Detroit. It reflects current cultural themes of the hardship of the recession, while inspiring the viewer to strive for luxury through traditional "hard work" values. At the same time it juxtaposes a "beautiful" view of Detroit against the more down-trodden imagery that is more common in the press. It's an advert well timed - it could not have worked several years ago, and won't carry the same interest in a few years.

Is Paypal changing the way companies manage payments?

I recently opened a Paypal Merchant account so that the business, PreScouter LLC, can accept credit cards. I was surprised to find Paypal offering more than just a way send a receive money.

Paypal allows you to send invoices, and manage invoices. With a few clicks, an email invoice is created and you can send them to your clients. You can then use their interface to see which invoices are outstanding, as well as send reminders. You may not appreciate it, but this kinda blows my mind. This saves time in (a) having to check you postal mail box for checks (b) taking checks to the bank (c) having to write letters or emails with invoices and reminder letters (d) worrying about tracking all the invoices -- have you received all the payments due to you?

If you can invoice and get all your clients to pay via credit card or paypal, I think a company could save on hiring 0.25 to 0.5 of a person to manage all the payment tasks associated with a business. This does all come at a cost, though. Paypal is going to take 1.9% to 2.9% of your revenue, depending on the amount of business that you do. It may be worth it.

Whartonite Seeks Code Monkey

Following my earlier post about the death of software developers at Kellogg, Shahid Hussain points to a hilarious site devoted to the dearth of software developers at Wharton,

There is discussion raging on YCombinator. I wonder how many other business schools are experiencing a similar phenomena.

Wonder why you're getting a second Groupon deal today?

So reads an email from Groupon:
Wonder why you're getting a second Groupon deal today? It's because this deal is so great, we couldn't wait another day to send it to you. Enjoy!
Or is it that Groupon is striking back against it's closest competitor?

Here is the extra special $20 for $10 at Barnes & Noble deal.

Apple: From phone, to tablets to TVs?

In 2007, the company known as Apple Computers became simply "Apple". This was an important sign of things to come, as Apple has continued to grow by innovating in the world of devices - rather than sticking to 'computers' in the traditional sense.

Apple's success in the iPod portable music market allowed it to innovate in the smart phone market. The iPhone made "mobile internet" a reality. Since then, Apple has invented an entirely new market - that of the portable tablet, through the iPad. Rumor is now rife that Apple is planning to create its own TVs - beyond just the existing set-top box offering that is the Apple TV.

While the iPad may just be a "bigger iPhone," jumping to the TV screen seems a much bigger leap. The iPhone and iPad and interactive experiences. Innovations such as multi-touch add a lot to the experience. In contrast, TV is generally a passive experience. Any innovation in the experience is likely only on the few minutes during which you switch channels. However, the original iPod was itself a passive experience - most of the time, you are simply listening to music. The innovation with the iPad was the wheel, for switching between songs, and the delivery mechanism - the iTunes store. In the case of an Apple TV, as well as innovating on how we might switch channels, there is no doubt that, for Apple, an iTVStore would make a great addition to Apple's existing iBookStore, iTunesStore and AppStore.

The dearth of software developers

Sometimes I get the impression that every Kellogg student and their uncle is working on starting a web business. If it's not a web business, then it's likely they're it's an iPhone or iPad app business. If not one of those, then perhaps something else requiring software, such as a treadmill that connects to the internet.

Yet, therein lies the problem. At Northwestern, there is a dearth of software developers available to realize these software dreams. The CS department at Northwestern is not the biggest in the country, and it can be difficult to reach students there. The more adventurous fly further afield - to the Illinois Institute of Technology, for example. Yet, I'm still uncertain as to whether any Kellogg student is able to break out of the Evanston bubble long enough to make something like that work.

NUvention Web, an interdisciplinary course designed to build web start-ups, is a starting point for releasing the pent up demand. However, there is still a long way to go. Meanwhile, a Northwestern undergrad has come up with the bright idea that there may be a business opportunity in starting a web development agency that serves Kellogg students.

Inspired by some movie, the guy behind the cash till at the grocery store has decided to build his own social network. Unable to find developers, he's picked up a book and decided how to teach himself programming. There may be a lesson in that for others.

A blizzard hits Evanston

Last night, the grocery store was packed out with people preparing for the coming storm. Today, the city has come to a standstill. Check out Orlando's blog for a glimpse of life in Evanston at this strange time.

Lakeshore drive, in central Chicago. From CBC.

That Jonathan Miller video (yes, that one).

Jonathan Miller (Kellogg 2008) was featured on the ABC reality show Shark Tank where he pitched his company Element Bars. It has almost become required viewing for every entrepreneurship major at Kellogg