Pick a Title for My Entrepreneurship Ebook

coffe-stain-typographyI’m working on the draft of a new Ebook.

It’s a quick, easy read of lessons learned from my years as an entrepreneur…the reading length will likely be less than 100 pages.

Most people that know me a bit, know I enjoy coffee.

So, with that as a personal thematic backdrop, I’m narrowing in on titles that link back to coffee. Here are the top three candidates for the Ebook’s title:

  1. “Naturally Caffeinated: When You’re Addicted to Entrepreneurship”
  2. “I Like My Startup Like My Coffee: in the Black”
  3. “5 AM Clarity: Reflections from the Day’s 1st Cup of Coffee”

Consider this request to be a lot like the SXSW panelpicker, if you’ve ever participated in that polling.

Your choice will comprise about 1/3 of the decision making process, with another 1/3 being close advisors/sponsors, and a final 1/3 being my own judgment call. So, your vote definitely matters!

Just drop it into the comments below, tweet it to me, or email me using the Contact page form. Clever themes and variations, as well as wholly new suggestions, are welcome.

Thanks! And, I’ll let you know when it’s available…should be sometime in June.

Designing Incentives

There are those who believe that people’s attitudes “are-what-they-are” and can’t be changed.

Then, there are those, like me, that believe attitudes can be changed. I’m not claiming it’s easy.

But, I’m a big believer in the proposition that we are products of the combined influences of nature and nurture. And, with the proper tweaking of both, a person’s previously-held attitudes may be revised.

freak - attitudesA simple model that undergirds the way I think about these influences in action is the one in the figure.

Attitudes are most often formed and reinforced by behaviors.

Call them habits, daily routines, spiritual or work practices…whatever.

Behaviors, in turn, are formed and reinforced by structures. Call these the incentives, group norms, and other environmental factors, e.g., geographic location, architecture, apparel, and the like. If you want to change attitudes, change the structures.

This model was reinforced by a quick read of a book that’s been out for a bit called Think Like a Freak, by the authors of the similarly titled Freakonomics, Levitt & Dubner.

Much of the book addresses the discipline of designing the right incentive scheme to change behavior (and ergo, attitudes). Incentives, to my thinking, are powerful environmental “tools” that can be manipulated.

motivation carrotSome of the pearls of wisdom that Levitt & Dubner offer about incentives include:

  • Figure out what people really care about, not what they say they care about
  • Incentivize them on the dimensions that are valuable to them but cheap for you to provide
  • Pay attention to how people respond; if their response surprises or frustrates you, learn from it and try something different
  • Whenever possible, create incentives that switch the frame from adversarial to cooperative
  • Never, ever think that people will do something just because it is the “right” thing to do

One pearl that particularly spoke to my personal experience had to do with “gaming the system.” This was a constant problem for Appconomy, a venture-backed startup largely based in China in which I’m a founding shareholder.

Levitt & Dubner’s advice is to know that some people will do everything they can to game the system, finding ways to win that you could never have imagined. Thus, if only to keep yourself sane, try to applaud their ingenuity rather than curse their greed. To which I say “Amen!”

freak - bookThink Like a Freak closes with an instructive, albeit clear-eyed, section on the subject of “How to persuade people who don’t want to be persuaded.” In a nutshell, here are the six most important points they say to keep in mind:

  1. First, understand how hard persuasion is.
  2. Make clear, it’s not about me; it’s about you.
  3. Don’t pretend your argument is perfect.
  4. Acknowledge the strengths of your opponent’s argument
  5. Keep the insults to yourself
  6. Tell stories, they capture our attention, making them great for teaching

I like the story-telling advice. It’s an emotional buddy to the logical tool of incentive design…the nature “yin” to the nurture “yang.”

So, the next time you are thinking deeply about how to incentivize some sort of change – whether it’s with your teenager or a customer call-to-action – make sure to spend at least an equal amount of time on the storytelling part as the incentive design part. Good luck!

MoMA’s Curator Talks About the Future

I’ve been so busy, I’ve not yet had time to share any reflections on the 2015 SXSW Interactive sessions.

Among my favorites was Paolo Antonelli, curator of the Museum of Modern Art (MoMA).

Her keynote, entitled “Curious Bridges: How Designers Grow the Future” was, in my opinion, this year’s example of why I always plan to return to SXSW the next year.

If you wish, you can watch the entire, delightful and borderline provocative keynote, courtesy of the good people at Southby.

Much of her presentation revolved on the notion of “designing for the ‘in between’.” While I may be slightly off in my interpretation of her intent, this phrase seemed to be Paola’s way of referencing the essential role designers play connecting the imagined to the real.

Among the examples that she shared (and there were many) during her remarks, I was especially drawn to the ones that had bio- and nanotech references. This is largely due to one of the Powershift Group projects I’ve been supervising for the past six months, called Nano Global Corp.

Nano Global is focused on nanotechnology-based products into direct everyday consumer uses. These include skin protection, surface cleaning, safe food preparation, water and air purification, and many other practical applications.

Nanotech-based consumer products have the potential to improve the lives of tens of millions around the world. This is an especially urgent need, in the post-antibiotic age we’ve entered, where superbugs and fast-mutating germs are resistant to conventional treatments.

design - 1Back to Antonelli’s Southby keynote, there were several designer-inspired ideas that I found fascinating.

One was the pointy, polygon-shaped structure in the picture that almost looks like a building-sized virus itself.

But, far from being a virus, the structure is coated with nanoparticles that were meant to neutralize pollutants in the air.

In other words, it’s a giant air filter, sucking bad stuff out of the air.

Paola spent a significant portion of her time describing ways that science, design and architecture can work together. Artists want to share their art with the world; scientists want to make their science more useful.

Architecture provides a fascinating third way for these other two to come together in a way that is both pragmatic and beautiful.

design - 3Another more playful example that Antonelli mentioned was Moyasimon’s Tales of Agriculture.

This is a manga story about a boy who passionate about agriculture. In the story, the boy can see and talk to bacteria.

It’s a lovely way to represent what designers are actually thinking about, in terms of harnessing bacteria as worker bees that enable us to build a better future.

design - 2Taking it beyond bacteria, Antonelli closed with examples of the design of living beings.

One example she showed was Autodesk’s design of its own virus, in-vitro.

Another example she showed was MoMA’s latest acquisitions from the Wyss Institute, called organs-on-chip.

design - 4Organs-on-chip are designed to simulate how certain organs work, down to and including the interaction of nanoparticles and the body’s chemistry.

The point of these designs is very real: it is to create new, validated means of speeding new pharmaceuticals through their trials, to get life-saving and other beneficial drugs to market rapidly.

All-in-all, I found it a riveting SXSW keynote that will have me thinking about the possibilities of design, at least until SXSW 2016!

The Dark Web of New Venture Capital

Part 2 – Access Points and Attributes for Financing Sources That Are Hidden In Plain View

dark web - fishTwo weeks ago, I had the pleasure of being the featured speaker at the Houston Startup Grind, emceed by the fabulous Michele Price.

The topic – The Dark Web of Capital – came out of a brainstorming discussion Michele and I had about possible speaking themes for me that would be fresh or different for attendees.

It was a fun, interactive evening in Houston.

Afterwards, I posted a summary of some of the major categories for these sources of financing that I dubbed “hidden in plain view” in a Part 1 blog post on the Powershift Group website.

In this Part 2 post, I want to address the subject of access points to the dark web of capital. I also want to describe some of the attributes that make new ventures and their founders more accessible to these source of finance.

dark web - Time coverFirst, access points.

Unlike the requirement to download and run special software, like Tor, to gain access to the dark internet web, access to the dark web of capital is less clear cut. But, here are some starting points:

1 – Knowledge

Simple awareness of the sources, of course, is a first step towards accessing them. With better knowledge of the categories that we covered in Part 1, founders are better equipped to know where to look.

It’s a bit like Harry Potter, where simply knowledge that something like a port-key exists is the first step towards being aware to even look for them.

2 – Trusted Relationships

The cliché “it’s not what you know, it’s who” is especially relevant with dark web sources. Just accessing “weak ties” networks, like casual connections you have on LinkedIN, won’t cut it.

Since they are often less formal and may value their lack of public visibility, accessing dark web sources can require much “stronger ties” networks.

This means the presence of longer-term personal relationships that have been built directly with a participating investor or with a founder in whose companies they have invested.

3 – Get Outside

First-time founders can unintentionally insulate themselves from dark web capital sources by thinking they have access to all they need, through the staff and mentor networks of the incubator/accelerator program to which they gain admittance. It’s important that you be deliberate about going outside of your current network.

It’s kind of like getting into a habit of always going to the same neighborhood eating places. After a while, you’re not even seeing where others are eating. Doing that causes you to miss the long lines of hungry people coming out of unfamiliar locations. Instead, be intentional and watch where other are going; then follow them!

4 – Always Be Pitching

The best founders are like the best salespeople. They are always pitching, but are so good at it, you don’t even feel like you’re being pitched, even if you know you are.

This is Blink territory, wherein Malcolm Gladwell speaks about the minimum requirement of 10,000 hours of practice to achieve a basic level of mastery over an area.

1-Million-CupsPractice. Over-prepare. And, never miss an opportunity to pitch. Need a safe place to work on your skills? Try (or start!) the 1 Million Cups group in your community.

Now, on to attributes that lend themselves to greater success in accessing dark web capital.

Not long ago, Fred Wilson of Union Square blogged about three types of entrepreneurial ventures:

  • Lifestyle (which he also called “Cash flow” oriented ventures)
  • Indie (which he also called “Owner operated” ventures)
  • VC Fundable (self-evident)

Whereas traditional sources of new venture capital, from angels to institutions, favor VC fundable – hoping upon hope to discover the mythical “unicorn” (see: Uber) – dark web capital sources are far more comfortable and in some situations favor the lifestyle and indie ventures.

Venture builders like our firm Powershift Group, for example, often favor the owner-operated venture, where they can assign their principals to significant operational roles in the venture. What this means for the outside founder considering approaching them is that he or she needs to be very comfortable with the fit and chemistry with the venture builder’s team.

A documented pattern of good DIET and Exercise, which I discussed in a post about impact investing, is another collection of attributes that makes new ventures more qualified for dark web capital. Nothing novel here; just good, everyday habits for new ventures to live by.

On a final note, I suspect it’s clear by now that cataloging these sources of capital is an inexact science. In addition to the more obvious sources of dark web capital, there are many others. Examples include:

  • non-traditional syndicates (like Enable Impact),
  • contests & challenges (like Xprize), and
  • global entrepreneurship networks (like ANDE)

I’d love to hear from others on this topic and look forward to your questions and comments.

Periscope Behavioral Impressions

Or Look, We Can Use Our Phones to Do What Pornographers Figured Out on the Web 20 Years Ago”

I installed the Periscope app a couple of weeks ago and have been using it intermittently since then.

periscopeBasically, while the technology might be slightly more sophisticated, layering in a modicum of social networking, it’s the functional equivalent of a live, handheld web cam.

Here are a few initial observations, mostly behavioral:

1 – When you hold your phone in front of you, while you’re walking or talking, you can’t avoid conveying the impression that you are filming. You might as well hold out a film marker in front of you, snap it shut, and yell “action!” because it equally attracts the natural curiosity of people that are walking towards you.

Thus, unlike a go-pro or body cam, which can film more subtly, the act of holding your phone in front of you is explicit. So, it’s harder to catch people in their natural states.

2 – When live broadcasting, I felt compelled to narrate the action, like a program host. On longer segments, I found the need to re-announce the subject matter of the broadcast every five or ten minutes, like Terri Gross does on NPR’s “Fresh Air” just before she takes a station break.

3 – The days and times that I had the most organic Periscope viewers were weekend mornings and weekday afternoons.

4 – It seems more viewers tuned in for lifestyle ephemeral, rather than purposeful, business-y broadcasts. My most watched broadcast was while enjoying a beer on the rooftop deck of our office building with a great view of the Texas State capital during which I answered questions about Austin.

The second most watched was crossing a bridge over Lady Bird Lake in central Austin while viewing the flower planters, shortly after SXSW 2015.

5 – I tried a couple of experiments to attract scheduled viewers, from my Facebook friends and Twitter followers, but they were dismal failures (the experiments, not my friends/followers). My guess is that I didn’t offer a valuable enough incentive for people to schedule or remember to view the broadcast.

6 – I also tried to sneak in a live broadcast of former President Bill Clinton’s remarks from the Four Seasons when he was a guest dinner speaker for a China-US Private Investment Summit in Austin. My guess is that there were cell and wifi jammers in place that significantly slowed or prohibited broadcasting, because Periscope flat refused to work.

The app design itself is fairly simple and clean, which I expect to evolve via a rather constant series of tweaks as it gets more widely used. If I had one feature-function beef, it would be about archiving your broadcasts.

periscope-screengrabsAs best I can tell, when you save your broadcasts, it doesn’t keep a complete archive of all prior broadcasts available to you…just your most recent one or two.

They disappear from your stream in a day or two, after which all you have left to fall back on is the recording (if you choose to save them) of the video on your mobile device.

However, your mobile device recording is plain vanilla, i.e., it lacks the Periscope-enhanced information with the viewers’ handles, their questions, or the heart streams that they gave you while broadcasting, which is a bummer.

I suspect that may change in the future, hinting at the kind of functionality they will “turn on” for subscribing users, to monetize the freemium version.

A DIET for New Ventures

diet - hand holdingLast month, I had the pleasure of speaking on a SXSW panel about “Impact Investing.”

In preparation for that panel, I framed out some notes to use for my remarks. In advance, to help promote the panel, I also write a post entitled “DIET and Exercise” based on the notes.

However, I recently realized that I never elaborated on what my meaning was behind the words Demand, Idea, Excellence, and Team that make up the acronym DIET in the title. I discussed them during the Southby panel, but forgot to write it up for the blog.

So, here’s the meaning behind the words. Remember: the context is these words were meant to provide easy-to-remember guidance for social venture founders on the attributes that impact investors seek.

DEMAND

Working backwards – most known to least, you might say – the first question is understand if there is demand for the product or service? In lean startup methodology, this is “product/market fit” – have you built a product that anyone wants to use and/or will pay for?

My Austin colleague Josh Baer likes to say that proven “customer traction trumps all.” If you can show a meaningful number of customers using your product or service, then that makes a decision about investing in you the easiest of all.

IDEA

Continuing to work backwards, if the product or service is still in development, then the next best thing investors will want to know is details about the idea. In lean terms, this is “problem/solution fit” – do you have a problem worth solving and what can you can offer about your product or solution that makes it novel, compelling, and important?

Investors will want to understand your knowledge of the market, your competitors, why you think certain features of your solution produce valuable benefits. They will want to know how well you know your customers and any evidence you can provide that your idea has merit with them.

EXCELLENCE

Short of a minimally viable product or evidence that supports your idea, the next thing investors can look towards is excellence in what I call the small things: these are both tangible and intangible. On the tangible side, how much have you thought about the design values that matter to your idea? What should the experience be like for your users and why? Have you created rough sketches to show UIs, flows, ecosystem interactions, etc.?

On the intangible side, I find it instructive to observe how founding teams communicate, prepare, follow-up and other aspects of their personal style.

  • Do they arrive on-time or are they always late?
  • If late, do they let you know in advance?
  • Do they take notes in meetings?
  • How quickly do they follow-up with you on the notes?
  • What’s their eye contact and how do they show you that they are listening?
  • How do they interact with each other? etc., etc., etc.

Sports analyst and former Dallas Cowboys coach Jimmy Johnson used to get asked why he required his players to hold hands in the huddle. The reason, he said, was because he believed that the “little things” were good indications for how the “bigger things” would turn out.

In the case of his players’ huddles, having them hold hands – even if only each other’s pinky fingers – was a little way of reinforcing the big theme of “team over individuals” before each and every play. The same “little things” thinking goes for startup founders, in my book.

TEAM

Lastly, if the investor has nothing else to go on – no product, no research results, no track record of interaction with the founders – then they are left only with the team. Some would say (and I’m one of them) that, taking all other things into consideration, the most important element of a startup is the team.

There are two dimensions I’d offer for evaluating the team, especially the founders.

The first is a more experience-based evaluation that I’d call the “it” factor. As an investor, after you’ve met with hundreds of startup founders and prospective entrepreneurs, you begin to get a sense of what you’re looking for in the person across the table from you and if they have “it” – the “it” being the total sum of what it takes to go through the startup process and emerge with a product or service that has the potential to be truly meaningful (which usually means: profitable at scale).

diet - connerThe second dimension for evaluating team members comes from the work of a change expert named Daryl Conner and the research his firm ODR did a couple of decades ago. Conner and ODR observed hundreds of successful people and documented a set of attributes shared among them:

  • positive,
  • proactive,
  • focused,
  • flexible, and
  • organized

Taken together, Conner referred to the people who possessed these attributes as “resilient.” To the ODR list, I’ve personally added a sixth attribute of a moral code. Besides the main reason that working with people who have a moral code matters to me, it also helps me to remember the attributes together as a single exaggerated acronym: PPOOFF!

Which, in my mind, is mental noise that is made in your head if the team lacks the potential to stand up to these attributes. If they don’t, well then “ppooff” …there goes your chances of the venture being a success, as far as the investor is concerned.

So there you have it. That’s my meaning for the words composing the DIET acronym.

A SXSW Easter Blessing

DigbyAsh - 3For the past two years, we have hosted visitors to Austin during SXSW. Our kids are grown, so we have the extra room and thought it would be fun.

We take time to get to know our visitors when they first contact us, so that we can make sure that they will be a good fit.

This is mainly because we have a busy schedule and we keep multiple guests at a time, so it’s important that our visitors are self-sufficient and come from a tradition of caring for a host’s home like they would care for their own.

So, when Digby, who hails from Sydney Australia, contacted me with a note to say he and his girlfriend Ashleigh were interested in staying with us, we immediately checked him out online.

His reviews were stellar and he sounded like a pleasant fellow in email, so we said “sure” and set aside a room for him. Little did we know what would happen next.

Digby and Ashleigh arrived on a Tuesday night – him from Australia and her indirectly from Africa, where she had been touring, as part of a year-round, worldwide journey. After reuniting to spend the evening together for the first time in 3 months, they were ready to journey downtown to get their SXSW Music badges Wednesday afternoon.

DigbyAsh - 1Like most of our guests, they stayed in downtown ATX for the balance of the day, returning to our house later that night after we’d gone to bed.

The next day, Digby let us know that Ashleigh had taken ill the previous evening, so they were going to take it easy that morning to let her condition improve.

But it didn’t; it got worse. By that night, they called a health service referred to them by their traveler’s insurance program, which assigned them a physician and trafficked a paramedic to visit our house to see Ashleigh.

(NOTE to self: on the next big international trip, *definitely* invest in a traveler’s insurance policy to supplement regular health insurance!)

By Friday noon, things were still getting worse, so the doctor advised Ashleigh to be taken into the hospital. We did, where they quickly diagnosed her with a severe bacterial infection. In fairness to Ashleigh and respect for her privacy, I’ll leave out the details of her diagnosis and hospitalization. The great news is it appears she recovered fully.

And, that is the SXSW Easter Blessing we experienced. Because almost two weeks after we had originally expected to wave goodbye to them after the end of SXSW, we celebrated a lovely Easter Sunday brunch with Digby and Ashleigh at Manuel’s downtown.

During that two week period, we had the opportunity to get to know two young people who truly became our unofficial, adopted Australian children.

Through many mornings of kitchen table conversation, evening meals together, drives to and from the hospital to check on Ashleigh where she remained under care for nearly a week, and finally a short celebratory weekend when we had a little time to show them both a handful of Austin sights once Ashleigh had been discharged, we became deeply acquainted with two young people, who had grown up halfway around the world and somehow had landed at our door.

DigbyAsh - 4Caring, principled, good-humored, intelligent, curious, open, ethical…I could go on. As we might say in Texas, “their folks done brung ‘em up right!”

We treasure the time we had with Ashleigh and Digby; it was hard to say goodbye when the time finally came for them to continue their journey.

With Ashleigh receiving the “thumbs up” from both her doctors and the insurance company to continue their journeys, she and Digby charted the continuation of their travels across the US – New Orleans, New York, Chicago, the West coast and more!

After dropping them off at the bus stop, we returned to a home a little quieter and less active, but much enriched by memories we’ll have for a lifetime.

Yet, no doubt, ours was just one more, tiny vignette among the thousands that SXSW and our city’s other great events bring to town as a part of the festival economy that has become so vital to Austin. An Easter blessing indeed!


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