From my Chair: the evolution of a summer Seattle morning

Day 125 of Self Quarantine             Covid 19 Deaths in U.S.:  138,000

Most days I have the early morning to myself.

This morning I awake at 5am to the pinks and oranges of a July morning.

I grab my camera, a cup of coffee, and my iPad with Kindle reader to enjoy the early morning sunrise.

Over the next 45 minutes I enjoy the morning light show as the sun slowly rises over the Cascades, Seattle, and Mt. Rainier.

For 30 minutes, I rock and read and forget to look up.

Suddenly, I see the fog “masking up” Seattle.

Within another 15 minutes I am surrounded by the coolness of an enveloping fog creeping up the hill from the Puget Sound.  Then, the sun starts warming the fog and the moisture slowly recedes and becomes a marine layer of clouds.

In just a few more minutes, the mask over Seattle lifts.

My book reading is finished.  My coffee is finished.

It is time to start writing.

Glad to have you back dearly needed sunshine.

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Emails to a Young Entrepreneur: Asking for Help

Day 125 of Self Quarantine             Covid 19 Deaths in U.S.:  138,000

Asking for Help

  1. Restlessness: You realize that you need to change your life, either because it’s boring or because it’s painful.
  2. The search: The decision to change. The search begins through books, courses, meetings.
  3. Disappointment: Looking for the right path. You become aware of your teachers’ problems and faults. However many strands of philosophy or religion you follow, however many secret societies you join, there are always the same underlying problems: vanity and a desire for power.
  4. The teacher: The most dangerous moment. Teachers are merely people with experience. Each path is different and individual, but, at this point, it risks being sullied and becoming a collective path.
  5. The signs: You leave your teacher when the path reveals itself – through signs. Through those signs, God is teaching you what you need to know.

Coelho, Paulo, The Book of Manuals (Kindle Locations 369-370). Sant Jordi Asociados.

Bainbridge Island, Washington USA July 30, 2013

Dear Mikhail,

Thanks so much for your kind letter. While I am unable to answer your questions on which of your new product designs is better, I am able to see a new energy and thoughtfulness in your designs that weren’t there when we started our journey.

With your gift of studying with the design masters at the Institute of Design, you already have a good sense of what it takes to give and receive help. Sometimes that help was hard to take, yet you thrived in that environment. As a continuation of that process, you asked Patrick for help and he pointed you in my direction.

A year ago I attended a David Whyte “Poetry in the Woods” workshop. One of the exercises was to break into groups of four and share reflections on “the art of asking a beautiful question.” I quickly shared that my mentor, Russ Ackoff, was the master of asking great questions and how much I strive to ask better and better questions. My exercise partner stopped me cold with “David asked us to reflect on beautiful questions, not great questions.” I was stunned at how I had mis-heard such an important exercise. Then, I really was stumped when I couldn’t quickly come up with a beautiful question.

“Human beings cannot quite believe the depth, drama and even the disappearances involved in even the average human life. Each one of us grows almost against our will into a steadily unfolding story where the horizon gets broader and more mysterious, the understanding of loss and mortality more keen, the sense of time more fleeting and the understanding of our own mistakes and omissions more apparent. In the midst of this deepening we have to make a life that makes sense: there is no other life than the one that involves this constant beckoning, this invitation to the fiercer aspects of existence.”

“Through the insights of poetry, this weekend we will look at the fruitful discipline of first finding, then asking, ever keener and more beautiful questions; questions that do not produce easy answers but which help us to re-imagine ourselves, our world and our part in it, and most especially, questions which work to reshape our identities, helping us to become larger, more generous, more courageous; equal to the increasingly fierce invitations extended to us as we grow and mature.”

SOLACE: The Art of Asking the Beautiful Question – David Whyte

What are the beautiful questions that you are asking of yourself, your team members, your customers, and your mentors?

This exercise seems so easy and is such an enchanting one – what is your beautiful question? Yet, I struggle with what is the difference between a great question and a beautiful question. After a year of channeling my favorite mentors and asking dozens of my colleagues I still haven’t found a good example of a beautiful question. David Whyte is his wonderful way stays quiet about actual examples.  Recently, I came across A More Beautiful Question which has a complete architecture of beautiful questions.

There is something in the gestalt of the student teacher relationship that makes it easier to receive and give help. Yet, we seem to forget that lesson when we move into the professional world of masquerading experts. Most of my life is spent giving help to others and “paying it forward.” Yet, I still find it difficult to ask for help.

One of the more painful situations where I was unprepared and had to ask others for help occurred on an Outward Bound (OB) trip to the wild rivers and mountains of Maine.  These notes are from my journal “Experiential Learning – Management Development the Outward Bound Way.”

The campfire is started and it’s time for the evening ritual of experience sharing. I don’t even remember what the question was. I just don’t feel up to participating. I listen though. I’m observing. There is something missing. People seem strained a bit, the real selves aren’t coming through. I withdraw even farther. I don’t volunteer. Susan won’t let me get away with it. She looks over and says “Would you please share your valuable insights with us or are you too good for us?”

I spout something back. It’s acceptable and I pass. But I really want to stand up and shout “what’s happening here?” Where is the real human that I know lies within each of you? Why are we just going through the motions? But I don’t. Not enough time to get comfortable that I can let the confronting me out in this setting. So I hunker down behind Fortress Self.

As we finish the group sharing, Bob W. who is Susan’s boss and will be accompanying us on our hike up Mt. Katahdin tomorrow gives us a preview of what we are in for. He briefly describes some of the perils of climbing above tree line and what equipment and clothing we will need for the hike tomorrow. Now he tells me.  All the stuff he recommends that I brought but didn’t think I would need for the hike are now thirty miles away in Dennis’s car. This list gives me something to worry about. What if a storm strikes and I don’t have all my wool clothes to withstand it? I will be a burden to the group. A whole bunch of thoughts are creeping in that haven’t been part of the OB experience.

I’m beginning to understand. WHAT IF I BECOME A BURDEN TO THE GROUP? I’m starting to touch on something. It’s getting to the heart of me. What if I actually needed the group? I don’t like where these thoughts are going. I’ve always been on the other side. The group has needed me all my life. As father, as a manager at work, others have been dependent on me. I’ve been the foundation. Now it might be switched. I might be a burden. I don’t like it. Shut these thoughts down quickly. I jump up and head to bed. Better to think about them in more of a fetal position hunkered down in the sleeping bag.

Dan, Beth, and I are in the same tent tonight. Dan wants to talk, but I want to be left alone with my thoughts. Some feelings I haven’t much explored before. I think I’m getting a glimpse of how Jamie must feel now. She keeps talking about being a burden and so dependent on me. She expressed concern that she can’t just go out and get the kind of job that will allow her to keep the same standard of living. I haven’t been at all sensitive to those concerns. Here I am in a situation that is real easy to get out of, with a team that will be disbanded in two days, and the potential for being a burden preys on me.

What’s triggered all this? Something simple really. I’ve left my wool hat behind in the car. If a storm should catch us on the mountaintop, then it will be one of the most important pieces of equipment since most of our body heat is lost through our head. I don’t have mine. I’m either going to have to make the trip without one and hope there is no storm, or admit my lack of planning and ask someone who is not making the ascent if I can borrow their hat. I don’t like either of these choices.

Sleep comes slowly. I am all wound up. I toss and turn all night. The unconscious is real active this night.

I’m awake long before the o’dark thirty wakeup call.

I’m real quiet this morning. I’m still trying to find every excuse that I can or alternative that I can for a wool cap. Nothing is in my bag that can come even remotely close. Well, what are my options? The only person who is not going to be hiking today is Susan. Everyone else will need their wool caps. Damn. She is the last person that I want to ask right now. I start rationalizing that not all of us would be stuck up on top of the mountain, so the odds are really with me. As usual I procrastinate and delay the decision as long as possible.

Well we were off. I had to make the decision now. Swallowing my pride I asked Susan if I could borrow her wool cap. I lamely explained how I’d left my stuff back at the car because the weather was so nice. She was very reluctant as the cap was very special. It was given to her by one of her sons, Nicholas, and obviously she had quite an attachment to it. It helped remind her of him when she was away from home on the OB trips.  Now I really felt crappy. I was about to walk off, and then she said “Sure. Take it, but please take care of it.”

I quickly tucked the cap away in my jacket pocket out of harm’s way, and started up the mountain. I had made the right decision and wouldn’t be a burden, but boy it hurt. I can’t imagine how it must feel to think of yourself as a burden to someone else day in and day out. It’s so subtle and acts over such a long period of time, that you don’t notice how draining it is. But worse, those of us who are apparently shouldering the burden are so incredibly insensitive. Which one of us in the end is more burdened?

While Susan has accompanied us up the trail this far, it is now time for her to go back down. She has a trick knee which does not hold up well when hiking. She is clearly disappointed and a little teary eyed. I wonder why and then realize that she’s had to face a much more serious version of what I was doing this morning. She doesn’t want to become a burden either. Her knee could give out at any time and then we would all struggle for the rest of the day trying to get her down off of the mountain. As a result she had to ask her boss, Bob W, to take part of his weekend to help her with her responsibility. She will now have to sit and wait while her charges are scattered all over Baxter State Park.

I can see my attitude towards Susan changing, but not enough to say anything right now.

Dana Dyksterhuis describes her hard work in remembering to ask for help:

“In the process of starting a venture, there is a lot.  It’s brutal. So you give up your life. There are a lot of sleepless nights.  I used to sleep like a baby, but not anymore. You are building something from the ground up and it’s not easy.

“When I spoke with the Women 2.0 group in Seattle, they had five pieces of advice for entrepreneurs and one of them was “Keep Going”.  Especially in our case you want to give up, you get nervous. If I hadn’t met Paul that night, I wouldn’t be standing here and Fanzo wouldn’t exist. If I hadn’t given that 15 second pitch and made a jerk out of myself, I wouldn’t be here.  Just do it.  Just totally go for it no matter how nervous and scared you are.

“The second one was ‘Ask for help.’ I got this from a software development bootcamp that the McCarthys put on at UW Bothell. One of their core protocols is ‘Ask for Help’ – the act that catalyzes connection and shared vision.’ What they taught us was that no matter what you are stuck on – ask for help. It sounds so easy, but it is incredibly difficult. We all think that we can do it. We can do everything. We got this. No problem.

“If you ask for help, you can get results faster.

“A specific example of asking for help occurred early on.  Sometimes it is even personal. Paul is like a brother to me, even though we just met. Another one of my pieces of advice at Women 2.0 was “get raw.” It involves making yourself completely vulnerable.

“We had a situation and my gut was like ‘this is all wrong.’ I didn’t want to overreact. I wanted to absorb it and not react period. I wanted to find out more. I reached out to Paul a couple of hours after the situation occurred. I need to ask for your help. I need a gut check. What are your thoughts?

“He was like ‘I feel the same.’ That could have been a situation that got really ugly or I never would have confronted. It would have just festered and gotten really ugly. I went to him right away. I need your help, Paul. It was something with Fanzo. It could have been devastating. We could have just let it slide.

“Other times it is just things like I am not an analytical person, I’m a creative. I can do buzz and I can do a little math. I can put basic charts together, but there are so many times in Powerpoint slide decks that we have to do for investors that I’m just stuck. I can’t do it. So I ask “Can you help me?” Boom, they help. Oh that was easy. Why didn’t I ask for this an hour ago?

“Asking for help can go from the very basic stuff to deeply personal stuff.”

The complete list of advice at the Women 2.0 event was:

    • Keep going
    • Ask for help
    • Trust your gut
    • Get raw
    • Tell your story
    • Forget the haters

Dana expanded on what she shared in my entrepreneuring class:

“Tell your story and be truthful. I love how one of my mentors, Micah Baldwin, has been writing about how you don’t have to talk about how awesome things are and how you’re “Killin’ it!” if that’s not how you’re feeling. In fact, we can relate more to each other when we get vulnerable and more times than not, get the help we need as a result. Yes, it can be incredibly scary but the most beautiful stories are those that touch you because people got raw. Vulnerability translates into stronger, closer relationships. Try it.”

The Myth of Helping

In the Kauffman study on the “Making of a Successful Entrepreneur” most of the factors they studied were assessed by entrepreneurs as being extremely or very important. However, one factor stood out as being not important at all. The figure below shows the responses to how entrepreneurs rated advice from their investors.

My immediate response was surprise. Then I started laughing as I remembered my own reaction to advice from all of our investors and the consulting experts that were forced upon me by our investors. I would always act courteously and listen politely to their advice – and then I would ignore them completely. I wanted the investors’ money but didn’t value the advice.  Neither the investors nor the experts KNEW MY BUSINESS. And I was not about to spend my most precious resource – time – educating them at my expense about my business.

The major observation of my 9MileLabs video ethnography research along with observations at Microsoft and Citrix accelerators is that little communication is occurring – between mentors and entrepreneurs – in either direction.

“Communication is the results that you get, not the words that you speak.” – John Grinder

Before teaching a graduate school class at UW, or mentoring an entrepreneur, or giving a workshop, I take a few minutes to repeat the above advice as a simple mantra. It is a reminder to focus on those I am interacting with and not on what I want to say.

“People need what they need, not what I happen to be best at.” – Author Unknown

Almost every teaching or mentoring interaction starts with me wanting to give my best, forgetting that may not be what the “student” needs. On my best days, I chuckle and back off and remember to do a little human centered design – deeply listening and observing.

Early in the video ethnography study with the nine companies in the 9Mile Labs accelerator Cohort I, this key issue of mentor/entrepreneur communication (or lack thereof) emerged as a research focus. Yet, there was something about this theme that was important and elusive.

From an unexpected place, The Chronicle of Higher Education, came an important insight in a blog post “Mentoring is a Fantasy”:

“Towards the end of grad school, I learned a key lesson about academia. I was discussing a draft of a dissertation chapter with my second reader. Although not my adviser, her work was critical for the arguments that I was building about psychological trauma and technology. Toward the end of the conversation, she said something to the effect of, “You know, this chapter could really use more Heidegger.” Inside, my heart sunk a bit. “Great,” I thought, “more to read. And from an author whose work I don’t really know.” But I dutifully wrote, “More Heidegger,” in the margin of a page, and after the meeting, I checked out a copy of The Question Concerning Technology.

“I read Heidegger and tried to understand how his views on technology fit into his and my larger projects. It wasn’t especially easy going. And perhaps in the third day of thinking about Heidegger, I had an epiphany that was perhaps closer to dasein than technology. As I came to see it, her comments were not so much about the dissertation that I was writing so much as they were about what the dissertation would be if she were writing it. Her comments were built on her wide knowledge of continental philosophy and the fact that she really could have deployed Heidegger effectively in the argument. But it wasn’t reflective of the reality of what I was going to be able to produce at this point in my career. I dropped Heidegger from all but a half sentence in my introduction, and my reader never brought it up again.

“The key lesson that I learned in this interaction is that mentoring is a fantasy, understood in the psychoanalytic sense. When mentors interact with us, their advice frequently comes from a place that reflects what they would do in our situations more than what we can do, given our own specific reality. My adviser had a fantasy version of my dissertation in her head that I simply couldn’t produce. (Her version might very well have been the better version, but that didn’t have much to do with what I was going to write.)

“Importantly, this moment helped me realize not just my mentors’ unrealistic expectations of me but also to see that I often had fantastical expectations of my advisers. The frustration that I felt when I turned in a draft of my first chapter and didn’t have comments within two weeks had everything to do with how I thought the relationship would and should work. Recognizing my expectations as the fantasies they in fact were allowed me to let go of some of what had been hardest for me in the process of writing my dissertation.”

With this insight, we started seeing how little impact the many forms of mentoring were having on the progress of the nine start-up companies. 9Mile Labs had an innovative plan for incorporating mentors into their B2B accelerator:

“We’ve picked the best entrepreneurial, technical, and business minds from the Pacific Northwest and beyond to mentor and coach the 9Mile startups in the program. These mentors aren’t just brilliant, they’re also driven to help propel our startups to the next level.”

The 9Mile Labs partners went further by having several matching processes to link the right mentors with the appropriate start-ups. They even provided financial compensation for the matched mentors. However, the hidden assumption was that the mentors knew how to work with the entrepreneurs and vice versa.

The mentors made recommendations based on how they would do the work, but the entrepreneurs neither knew how to receive the information or what help to ask for in a timely fashion. The entrepreneurs were doing the same thing that I did in my serial entrepreneurial past – do you have some money to invest in my company then I will appear to pay attention to you? If you don’t have money to invest in my company, I will mostly be polite and then completely ignore any advice.

Brant Cooper, author of The Lean Entrepreneur, echoes these observations in “Mentoring Start-ups is Hard: Five Ways to be a Better Mentor.” His five keys to successful mentoring are:

  1. Teach, Don’t Tell
  2. Focus Your Advice
  3. Challenge Assumptions
  4. Beware of Being a Domain Expert
  5. Teach Entrepreneurs how to be Good Mentees

David Robinson, in his book The Seer simplifies the most important part of being a good mentor – provide experience first and make meaning second:

“Effectual entrepreneurs operate from a different mindset than most people; they see through different eyes. This book is intended to shift your mindset so you might see through entrepreneurial eyes. Shifting a mindset is a process, not an intellectual exercise. A dynamic process requires an engagement with the day-to-day experiences of life and, therefore, requires two universal and necessary tools:

 1. Reflective Practice. Processes of self-knowledge are tricky because you are both the subject of the study and the studier. You are attempting to raise your conscious awareness of patterns of thinking and acting. You are sitting on the mountain so you can’t see it. A reflective practice is necessary to see the mountain upon which you sit. In The Artist’s Way this practice was called morning pages. In some processes it is called journaling. In others it goes by the name of reflective writing or free writing. Whatever you wish to call it or however you want to do it, it is an essential tool in opening your eyes to existing patterns and entrenched beliefs. Reflective writing is the best way for you to talk to yourself, to get beyond the moat of what you think you know and discover the deeper story structure driving your actions.

 2. Pattern Breaking. In order to release your grip on what you think you know, to shake up your comfort and control, you need to break habits and patterns and break them intentionally. And, it is better if you have fun doing it. This is the equivalent of the artist’s date. Sometimes this is called stirring the pot, breaking habits, or giving your self a gift. Regardless of the name it is necessary to challenge your assumptions if you want to open your mind and your eyes to new ways of seeing. Breaking patterns will help surface essential bits to write about in your reflective practice. It’s a feedback loop.

“The form of your reflective practice and pattern breaking is less important than the consistency of doing it. Give yourself time to reflect every day so that you may uncover your daily patterns of thinking and seeing. Use the tools, devices, and practices introduced in the book to consciously break your patterns. See what happens. Write about it.”

Experience first; make meaning second.

Yet, there is a foundational issue with mentoring – what is the evidence of credibility of the mentor such that the entrepreneur is interested in listening in the first place. Further, the evidence must be directly and immediately relevant to the entrepreneur. I didn’t understand this until spending time with Paul D’Antilio (formerly COO of GroupTie) when he became CEO of Future Point Systems. He invited me in to share my thoughts on the visual analytics marketplace and what he should do as a CEO.

After fidgeting for an hour while I pontificated on the market and what he should do (violating my mantras above), Paul blurted out “Why should I listen to you? What have you done that makes you an expert? How do I know that Attenex was really successful?”

I was stunned. I thought I’d just been brilliant and enormously helpful and came face to face with Paul “hearing” nothing because of my lack of credibility. I was stuck because I knew that I couldn’t share that the announcement of Attenex being sold to FTI Consulting for $91M was still a month away.

We chatted for a while longer and then I left. I made a note to send Paul the Attenex acquisition announcement. When the deal closed, I sent Paul the press release and he called immediately and said “Now I’m ready to listen.”

Mentoring and being a mentee is indeed hard work. Yet, when the magic happens, there is nothing more rewarding for a mentor than seeing a mentee push forward. For a mentee, there is the gift of knowing that they have a trusted colleague they can turn to whenever needed.

“Communication is the results that you get, not the words that you speak.”

Ed Schein’s Helping: How to Offer, Give and Receive Help describes the challenge of giving and receiving help:

“The most common version of unhelpful help that I have experienced as both helper and client concerns the computer. When I call the help line I often don’t even understand the diagnostic questions that the helper asks me in order to determine what help I need. When my computer coach tells me the several steps I need to take to solve the problem, I don’t know how to interrupt to say, “Wait, I don’t understand the first step.”

“On the other hand, another computer coach I hired asked me what my personal goals were in learning to use the computer, elicited my desire to use it primarily for writing, and then showed me all the programs and tools that would make writing easier. That felt great. Yet when my wife asks me for help with the computer, I routinely fall into the same trap of telling her what I would do, which turns out to be more than she can handle, and we both end up frustrated.”

Schein provides the following principles for helping:

 1. Effective help occurs when both giver and receiver are ready.

 2. Effective help occurs when the helping relationship is perceived to be equitable.

 3. Effective help occurs when the helper is in the proper helping role.

 4. Everything you say or do is an intervention that determines the future of the relationship.

 5. Effective helping starts with pure inquiry.

 6. It is the client who owns the problem.

 7. You never have all the answers.

A Final Word

“What I have tried to do in this short book is to reframe many social processes as variations of “helping.” These include building trust, cooperation, collaboration, teamwork, leadership, and change management. In doing so, I have come to recognize that helping is at the heart of all social life, whether we are talking about ants, birds, or humans. It would seem then that if we can be more effective as helpers, it will improve life for all of us.”

While Schein’s principles are more difficult for the giver, in the end it is more gratifying. I have to remember that the goal is not getting the receiver to take my advice exactly, otherwise they would just be a robot. Rather, the goal is to help both giver and receiver think more deeply about the issues at hand. My way of reminding myself is to remember what epitaph I’d like to have on my tombstone – “He made me think!”

Mikhail, Patrick pointed you in my direction to offer some help. With each email I try my best to follow Schein’s framework. Your gift to me is sharing your journey to becoming an effectual entrepreneur.

Yours in entrepreneuring,

Skip Walter

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From my Chair: There’s a bobcat in our yard!

Day 124 of Self Quarantine             Covid 19 Deaths in U.S.:  138,000

You know the septic system repair is going to be expensive when a bobcat lives in your yard for an entire day.

Bobcat in the Yard

The continuing saga of our sort of failing septic system continues.

We started with a plumber as we thought our downstairs toilet had a problem, and the line might need to be “snaked” out.

The plumber soon found that the line was fine but that our septic tank was full to the top.  Thus, we needed to call somebody to pump out the septic tank.

Bobcat likes to dig holes

The septic tank pumper outer showed up and pumped out the septic tank.  He shared that it looked like there was a problem with our drain field.  He said our septic tank was not going to stay empty for very long.

So we called the septic field inspection folks.

They shared that we had a distribution box problem and that would need to be replaced but that it wasn’t too big of a job.  He then put his cool video camera into the drain field.  Cool meaning that it had a blue tooth link so that my wife could record a video of our drain field on her iPhone.  I always wanted a subterranean view of our drain field.

Blowing out the drain field

After several holes and a couple of false starts confusing our septic drain field with our drain from our gutters and yard rain water drains, the wonderful septic team found our problem.

Never good when a bobcat has to spend a day in our yard.  Expensive critter.

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Emails to a Young Entrepreneur: Applying Designing for Humans

Day 124 of Self Quarantine             Covid 19 Deaths in U.S.:  138,000

Applying Designing for Humans

One of my favorite experiential seminars was learning Global Business Network’s Scenario Planning. After generating a scenario plan for a health care organization, the exercise was to envision the health care organization as if Disney designed it or McDonald’s or Nordstroms. Looking at our design through these different lenses helped us to see both the current health care organization and our designs in new ways.

The theme for this week’s flipping perspective exercise is to imagine your product or service as it would be designed by some of your most favorite and least favorite brands. Since most of us have some experience of Disney and an airline company, I urge entrepreneurs to think about their product design through the lens of those two organizations. You can do a little photo manipulation by having an image of your conceived product with the logo from the organization you are designing in context.

For seven days, your flipping perspective exercise is:

    • Identify a brand each day that is one of your most favorite or least favorite brands – alternate days
    • Create a combined image of your product and the logo of the brand you selected
    • Free write about how your product would perform if designed by your selected brand and write about the experience of humans interacting with your product.

The Cosmos of the New Venture

Designing is the second leg of the core triangle of work of the entrepreneur. In the cosmos sense, we mean designing in the largest sense of the word. Designing is the human centered design user research which generates insights and the iterating through the many prototypes to figure out the minimum viable product (not minimally viable product). After using human centered designing, then the agile or lean process works to build your product and get it into your customer partners’ hands.

Designing for humans is OBSERVING, PROTOTYPING and ITERATING.

 

You can find the introduction to the Cosmos of the New Venture here.

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From my Chair: I do have an alcove!

Day 123 of Self Quarantine             Covid 19 Deaths in U.S.:  138,000

When I first read Timeless Way of Building, I fell in love with the pattern of Alcove.  I loved the many photos and designs of Alcove that Alexander spread throughout the book.  I had to buy A Pattern Language: Towns, Buildings, Construction to get more details of Alcove and to see the different contexts of patterns that Alcove fits into.

An Alcove pattern from Timeless Way of Building

“The pattern ALCOVE feels good to us, because we feel the wholeness of the system there.

“There is an intellectual formulation of the forces which alcoves resolve. For instance, they allow us to be private at the edge of a communal gathering, and, at the same time, remain in touch with whatever is communal there. But what clinches it, what makes us certain that this formulation has some substance to it, is the fact that alcoves make us feel good. The conflict is real, because the alcove makes us feel alive; and we know the pattern is complete, because we can feel no residual tension there.”

From Timeless Way of Building, p. 244

I vowed that one day I would have a house with an Alcove.

I had to laugh after writing a previous post about the Timeless Way of Building, that I had my glorious Alcove, I just never realized it.  I had a too narrow view of what the Alcove pattern was.

Our Alcove view of the Puget Sound

My chair sits in a wide Alcove that has a view of Puget Sound and Seattle and Mt. Rainier to the south.  Yet, I can still see family and friends when they can gather on our deck (pre-pandemic).

This Alcove is my retreat from the world while still being able to observe the world around me.

My Alcove makes me feel good.

 

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Emails to a Young Entrepreneur: Designing for Humans

Day 123 of Self Quarantine             Covid 19 Deaths in U.S.:  138,000

Designing for Humans

WIRED: What innovation do you think is changing the most lives in the developing world?

MELINDA GATES: Human-centered design. Meeting people where they are and really taking their needs and feedback into account. When you let people participate in the design process, you find that they often have ingenious ideas about what would really help them. And it’s not a onetime thing; it’s an iterative process.

 

 

Palo Alto, California USA, Stanford University Campus, July 23, 2013

Dear Mikhail,

I am enjoying the journey of discovery that you are on. It is obvious to me that you are developing your entrepreneurial mind. I appreciate your sending me such detailed spread sheets of your business model and the many ways that you are thinking through your new venture. As a mere observer of markets I am ill prepared to wade through your models and provide advice on which is the best one for your venture. Best is such a causal and expert mode way of thinking. Modelling of your business is just one of the ways of making sense of the world that you are trying to observe.

It is easy to get lost in spread sheets when one is modelling. When immersed in numbers it is easy to forget who we are designing for – humans. Today, I’d like to shine the light on human centered design while I sit here underneath Hoover Tower on the Stanford campus surrounded by the whispers of Silicon Valley technologists past and future.

I love this mantra that designers use to start their day:

We designers, who art in employment
Hallowed be thy Studio name
Thy clients will come
Thy briefs will be done
On time as it is on budget
Give us this day more glorious ideas
And forgive us our inferior ones
As we forgive those who practice bad typography
And lead us not into complaint
(over long hours and low pay)
But deliver us that Black Pencil
For thine is the Studio, the Mac, and Adobe
For ever and ever
Amen

As a product designer it is so easy to fall into the trap of designing for ourselves. We think that if we have a problem then the rest of the world does as well. The trap is to go talk about our ideas to our friends who humor us and say “what a great idea.” The challenge as an entrepreneur is to see what really matters to enough people to create a sustainable business. We have to go out and see and observe and experience the world of our potential customers.

Experience first; make meaning second.

Research studies on adult learning make clear that the best way to learn is to experience directly.  Instead of telling me how to pick up a baseball bat and strike a pitched ball, show me how to do it.  Then let me quickly try it myself.  Learning accelerates if there is an experienced coach operating from a rich framework of how very different individuals can master striking the ball.  The coach operating from a mental image of how that person’s physique and skills could best accomplish the task can then give pointers on how to best move from one’s current capabilities to the ideal.

David Kolb is one of the leading researchers on adult learning.  A summary of the Kolb model is:

“Much of our traditional learning experience has led us to believe that we learn best by listening to experts. It has been found, however, that learning that results in increased self-awareness, changed behavior, and the acquisition of new skills must actively engage the individual in the learning process. In particular, adults have been found to learn more effectively by doing or experiencing.

“Kolb described this learning process as a four-phase cycle in which the learner: (1) does something concrete or has a specific experience which provides a basis for (2) the learner’s observation and reflection on the experience and their own response to it. These observations are then (3) assimilated into a conceptual framework or related to other concepts in the learner’s past experience and knowledge from which implications for action can be derived; and (4) tested and applied in different situations.

“The adult learner assimilates useful information into their personal “experience bank” against which future learning events will be compared and to which new concepts will be related. Unless what is learned can be applied to actual work or life situations the learning will not be effective or long lasting.

“People responsible for designing learning events should keep these phases in mind as they develop ways to help the learner understand and be able to use the new knowledge and/or skill.”

Source: David A. Kolb. Experiential Learning. New York: Prentice-Hall, 1984.

Recent cognitive science research is showing that not only is experiencing a better way to learn, but also how that experience is gained.  My cognitive psychologist daughter, Elizabeth, makes this research concrete by illustrating how to learn to climb a rock wall:

Monkey see lets monkey do

“What’s the most important muscle for climbing?” my instructor asked for the fifth time. “Your brain,” we dutifully chanted in unison, still a bit skeptical. Yeah, yeah, your brain is important, but our instructor’s splayed limbs demonstrated that he certainly wasn’t hurting for other muscles. Meanwhile on the ground, my forearms were burning after one climb up the eight meter wall. (Though in my defense, it was the one with the crazy incline). Still only a beginner, I drool at the nutters on the Banff mountain climbing films and wonder at whether I’ll ever get up the nerve to tap in my own pro, or go on a multi-pitch climb.

“A springboard diver in my past life, I recently caught the climbing bug, and would much rather be trying to crimp my fingers around some miniscule hold than actually working on my dissertation. To alleviate my guilt, I decided to look for links between this thrilling sport and my journal article reading. During my grad student day-job, I study the human visual system. Unfortunately, I can’t tell you why sunsets are so breathtaking, or why you can be looking directly at your keys and still not see them. However, I can tell you a little bit about how it is that we translate a visual image into an action. More importantly, the scientific community at large is starting to understand how it is that just by viewing expert performances, we can subsequently improve our initial athletic attempts.

“Back in 1995, a couple of researchers noticed that the same brain areas active when a monkey reached for a grape were also active when the monkey saw another person reach for the grape. Hmmm, that’s interesting – what you do and what you see are linked at a fundamental neural level. Subsequent experiments found that individual cells in the front parts of the brain seemed to represent complex actions (e.g. reaching, grabbing) no matter whether it was the monkey that moved, or a nearby person who reached for the reward while the monkey simply watched. Furthermore, the cells had preferences for different actions – some brain cells were interested in reaching, some in tearing, while still others preferred bashing or poking. A couple of years ago, another group of researchers found that human brains are activated differently when watching someone else perform movements that they can also do (say, ballet dancers watching ballet performances), versus when watching people performing movement sequences at which they’re not expert (say, a rock climber watching a ballerina). Hmm, that’s interesting – so what you can do influences how you see.

“I’ve always maintained that I dove better during the years that I was “second-fiddle” on the team. Those years at practice I had the pleasure of watching my expert teammates nail dive after dizzying dive, while I struggled to keep up with the number of flips and twists. Lucky me though – as I had the visual reinforcement of their excellence, my brain learned to pattern my own movements from theirs, allowing me to improve by leaps and bounds (excuse the pun). In climbing, one of the most important things any beginner can do to improve her performance is to spend hours watching the pros (or really anyone a decimal-rating or two better). Someone actually studied this for his dissertation already and found that beginner climbers shown a video of an expert climbing a route did better on that route themselves than those shown a video of a novice climber. So, what you see influences what you can then do. At some level this is old news – of course you should watch experts – only a scientist would find something miraculous in any of this. However, the fact that we know that the exact same brain areas are engaged in observing as well as producing motions will allow us to better train athletes, mentally as well as physically.

“In many athletic programs (no matter the specific sport), video technology has taken over practice, allowing athletes to see their performances immediately after they’re executed. My former diving coach would TiVo each practice – allowing us to dive, watch what we just did, and then hop back up and try to improve on it. This helped for some aspects of the dive; for example, I never would believe that my feet came apart during twisters unless I saw it on tape! However, some of the recent research suggests that, while watching yourself is good and all, it’s watching folks better than you that will have the beneficial impact on your brain circuits.

“One last kicker – another set of studies investigating mental imagery found that simply imagining moving one’s finger increased muscle strength in that particular finger. Extrapolating from this suggests that just thinking about yourself ascending that route may actually help you develop the strength to do it. So all those athletic loons that you see staring up at the chalk marks on the wall, making small movements here and there as they decide on foot placement, are really teaching their brain what to expect on the way up. In short, much of the neuropsych research suggests that the best time to train your brain is while you’re resting your muscles. Stare at the wall. Really scrutinize your fellow climbers (well, the good ones, anyway). Of course, any decent athlete knows all of this at an instinctual level already. But hey – you’ve now got a great excuse to hang out and watch the experts for an extra hour as your muscles recuperate… Of course to see if you’ve learned anything, you’ve got to get out there and actually climb it.”

One of the first things I learned in my ten years of studying and teaching at the Institute of Design (ID) of the Illinois Institute of Technology, is that humans are very inarticulate at describing how they perform some complex behavior or what they might need in order to improve it.  It’s one of the many reasons why interviews or focus groups rarely lead to powerful insights that lead to successful product designs.  At ID, students are taught to observe, observe, observe.  They quickly learn that humans are extremely articulate in their actions and behaviors.  You just have to observer them.

A core technology in observing people is the use of video ethnography.  That’s a big social science phrase for simply video recording people in the context of their actual work so that you can study, deconstruct, and share the results with others.  This technique is a staple of athletic teams trying to improve the performance of beginners all the way to professionals.  Yet, it is little used in business where it proves to be even more valuable.

My introduction to the power of video ethnography was on my first visit to ID.  Over my forty years of building and managing software product development, I’ve searched for a way to design a product right the first time.  I’ve looked in hundreds of places for that magic elixir.  I’ve been frustrated with all the usability professionals who tell me my product sucks after I build it, but have nothing to say when I start to design the product.

In 1992 while visiting the Institute of Design, my views on designing were transformed by a five minute video from a student class project.  Sitting in a miserable concrete walled classroom on the 13th floor of a non-descript research building overlooking some of the worst slums of South Chicago, I could barely hear the nervous student introducing his project over the obnoxious noises of the exposed air conditioning system.  His research had something to do with improving the ability of the business traveler to work in a hotel room.  As someone who travels 150,000 air miles a year and spends >50 nights per year in hotel rooms, he had my attention.  I wasn’t sure he could meet my expectations or that he could shed any light on a frustrating environment.

The student created a relatively simple task for a male and female pair of business colleagues.  The pair had to create a business report in a hotel room, and then type the results into their laptop PC.  In the process they had to confer with other employees over the phone to get information for the report.  The student would videotape their activities in the hotel room for later analysis.

The first several minutes of the videotape showed the awkward dance of the professional colleagues trying to find a work surface that would accommodate their needs, while avoiding the cultural taboos associated with the only work surface available – the bed.  The pair searched in vain for something that would work and yet the bed remained the only place that is large enough, was convenient to the phone, the power outlets and the available light.  The pair tacitly acknowledges that the bed is the only viable place and they start to lay their papers and computers on the bed.  They then realize that there is no comfortable place to sit.  The single chair in the room is too high for the bed surface.  Yet, it hurts to kneel on the floor and it is awkward to sit on the bed without disturbing the papers and computers.  Throughout all of this trial and error, the male and female are trying not to invade each other’s personal space so that they don’t cross the line into intimacy.

After five minutes of trying to work, the pair throws their hands up and quits the exercise.  They cannot get work done in that environment.  I was amazed at how completely the five minute video transformed my experience as a business traveler from unnamed frustration with a hotel room as a work environment to being able to clearly articulate my frustrations.  And in that moment, a solution space opened up for tens of ways to transform the business traveler’s hotel working experience.  No interviews were needed.  No audio was even present on the videotape.  Just watching the interactions said it all.

The student showed some interviews with business travelers that provided no insights on either the problems or the solutions as a counterpoint to the power of user observation.  Even though we might be experienced business travelers, we are not usually conscious about what bothers us.

The video was generated by a Master’s student as part of his first seven week course on user observation.  Over the years one of my first tests of a method or process is how quickly can a student pick up a process or a technique?  I have seen many techniques where the inventor or teacher could reliably perform great work, but none of their students could master the technique.  Here was a process that was both powerful and could be mastered quickly. Not only did video ethnography help the researcher discover insights, but it also aids the communication of the problem and the insights to stakeholders.

Performing user research is relatively easy.  In its simplest form it is just finding an appropriate place to observe users and then make notes on a pad of paper.  In its most complex form, it is being able to have video cameras and recorders in place so that a team of researchers which typically include anthropologists and social scientists can extensively review the interactions captured for deep analysis with formal methods.

Examples of the professional use of these techniques come from McDonalds, Amoco, and Personal Health Connections.  About ten years ago, McDonalds was interested in understanding why Taco Bell locations were up to 50% more profitable per store than were similarly located McDonalds stores.  The Doblin Group was engaged to research this topic and was able to instrument several McDonalds locations and a few Taco Bell locations with several cameras.  After viewing hundreds of hours of videotapes and generating several insights and hypotheses as to what was going on, one of the anthropologists came up with a curious difference.  At Taco Bell, the store was laid out such that all of the servers spent most of their time either face on to the customers or sideways to the customers.  While at McDonalds, servers spent greater than 85% of their time with their back to the customer.  Doblin Group coined this observation “Backs and Butts”.  If you recall the last several times you visited a McDonalds, the backs and butts of the servers tend to be quite large and unattractive.

So with this insight and hypothesis, the Doblin Group set out to test this notion in a few remodeled McDonalds.  Almost overnight the revenues and profits increased in these locations to levels higher than what Taco Bell was seeing and considerably higher than stores laid out in a traditional McDonalds style.  The good news is that the researchers proved their case. The bad news was that McDonalds’ management was not ready to depart from their tradition of “this is the way we design our stores.”

Doblin Group was commissioned by Amoco to figure out ways to make their retail locations more profitable.  Gasoline is sold pretty much the same by all oil companies and the gross profit margins are pretty much the same.  Amoco asked if there was a way to dramatically improve profitability by observing the ways that users buy gas.  While Doblin did a systematic overview of the retail operations and came up with a system of innovations that is breathtaking in its scope and inventiveness, it was the interaction at the gas pump that captured my imagination.

Similar to the McDonald’s video ethnography studies, Doblin Group fitted a gas station with cameras from just about every angle.  One of the things they noted was the dance that users went through to figure out how much gas they were putting into the car.  Users were contorting themselves in all kinds of ways to keep their eye on the pump handle and the gas flowing into the car as well as try to eye how much money was cranking away on the pump display.  The Doblin folks called this the “gas pump watusi” after a dance step popular at the time.  The solution was pretty straightforward – move the gauges to the gas pump handle itself.  Similarly, the social scientists observed that after filling the car, most consumers made a trip to the rest room to wash off their hands.  So Doblin designers located wash stands at every gasoline island.

Based on a wide range of observations and insights, Amoco built four service stations to these specifications in Indianapolis, IN.  Immediately these stations generated several times the revenues and profits of similarly located Amoco and competitor service stations.  The bad news was that Amoco underwent a reorganization and subsequent sale and the innovations were never brought to life on a wide scale.

At Personal Health Connections (PHC), user observation was accomplished with several subjects who agreed to help us understand the processes of dieting and weight management.  A simple camera study and weekly interview process were carried out over three weeks.  The patterns of change fell into three very distinct categories:  planners, trackers, and storytellers.  Planners took a top down approach to losing weight.  They established a goal and developed activities that would help them lose weight and then monitored their results daily.  Trackers were just the opposite.  They took a bottom up approach which started with the monitoring of their daily weight and activities.  Based on tracking what they actually did, they slowly started to generate some goals that would fit their activity pattern.

The third category of users was the story teller.  They wanted their information presented to them in the form of stories and all of their goal setting and tracking was done in the form of telling stories.  Each activity had a cast of characters, action, a plot, and an ending.  We quickly realized that the design of the website had to accommodate all three user types and that one design probably wouldn’t work for all three.  If you look at many of the best web sites today you will see functionality that appeals to each of these types of users.  What we did at PHC was to have a quick diagnostic in our first interactions with a user to let us understand which type they were and then we accommodated their need with an appropriate user interface.

The hardest of these types to accommodate is the story teller.  It is relatively easy to present information to the user in the form of stories, but much more difficult to take what appears to be unstructured text and make sense of it.  The emerging world of natural language processing and sentiment analysis promises to make much better user experiences for the story teller.

With computer based products one of the challenges is not to confuse user observation with usability.  Both are important but they are different.  User observation is about situating a user’s actions in the context of their daily life and understanding the Whole Process that is required to meet their intent or goals.  The observations ground themselves in a structure of observation, contention (does the observation lead to a positive or negative consequence), and what user value or values are supported or not by the users actions.  Usability tends to be focused more narrowly on how the computer program functions match the users understanding and expectations.  The big ideas that will lead us to find 10X productivity improvements come from user observation.

As I reflect on my 45 years of product development, the pattern that continually repeats is the more successful products result from early user observation and research.  For many startups the need for their product arose out of the frustrations of the founders with existing ways of doing things or by observing some frustrated user segment trying to accomplish some task that they had the insight to do better, faster and cheaper.

Making meaning of the above stories we see four stages to designing for humans.

 

The first and most important is the user research which is primarily user observation. From the user observation, rapid prototypes are produced starting with low fidelity prototypes and then moving to higher fidelity prototypes. The third step in this process plays on the two meanings of value – monetizing the product and supporting human values. The last step is to improve the user experience of the product.

 

For pedagogical purposes I introduce the four steps as a directed sequential process. In practice it is more like orbiting a giant hairball of observations and insights until you achieve a “got to have” product and user experience.

 

Adrian Slywotzky in Demand: Creating What People Love Before They Know They Want It  describes this process as designing for the six pillars of demand.

The Slywotzky six steps to generating demand are:

  1. Fix the Hassle Map – map the hassles of the customer journey and figure out how to fix them
  2. Make it magnetic – create and capture the emotional space in your market
  3. Build a complete backstory – demand creators connect all the dots needed to fix the hassle map of the customer journey
  4. Find the triggers – the obstacles to demand are inertia, skepticism, habit and indifference. Find the triggers that move the fence sitters to customers
  5. Build a steep trajectory – how fast can the demand creator get better. Continue to improve technical features and improve emotional engagement
  6. De-average – one size does not fit all. Find cost efficient and effective ways to create product variations.

Slywotzky describes an example of the human centered design process through the Zip Car business evolution. The Zip car team did a great job of understanding the hassles involved with city driving:

The solution they came up with appealed to the city dwellers who had an occasional need for a car:

Through survey after survey, the Zipcar target demographic excitedly said they would use the service.  Yet, very few did. After burning through $10s of millions of investment money, the CEO was replaced.  The new CEO went back to basics to observe the hassles in using the Zipcar solution. While philosophically customers SAID they would buy the service, there was one hassle they wouldn’t get past that emerged from close observation – having to walk a long distance to find a car. The key insight is that a Zipcar had to be within a five minute walk of the consumer.

Once the Zipcars were available in high density in the city center their business took off. Zipcar is a great example of supporting human values and through observation eliminating all the hassles of the occasional use of a car in the city.

As an effectual entrepreneur and a product creator it is easy to lose sight of the basis of any business – designing for a human being. The good folks at IDEO capture the key aspects of the human centered design process:

Like a Rubik’s cube the human centered designer understands that a good design must be desirable, possible and viable. The IDEO toolkit is a great place to start understanding the best practices for human centered design.

Yours in entrepreneuring,

Skip Walter

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Emails to a Young Entrepreneur: Applying Modelling the Business

Day 122 of Self Quarantine             Covid 19 Deaths in U.S.:  137,000

Applying Modelling the Business

Slywotzky in his many books provides a wealth of business and profit models to build upon for your new venture. This week the theme of your flipping perspectives is to imagine your business through the lens of seven different business models. Each day try out a different profit model for your product or service. What would your product or service look like if it were a professional service, or a content business, or a business supported by advertising?

The photos that you include with your free writing for this week can be drawn from products that are primarily based on the profit model you choose or your could sketch a landing page for a social media campaign featuring a teaser for the business model that you want to use.

For seven days, your flipping perspective steps are:

    • Identify a different business or profit model for your product
    • Take a picture of a product which has a similar business model or sketch a landing page for your product with the new business model
    • Free write about your product and the business model and your interactions with customers attracted to that business model

In the Art of Profitability, each lesson looks at a different profit (business) model for Steve’s company Delmore.  Ash Maurya in Scaling Lean, asserts that there are only three business models to explore:

    • Direct
    • Multisided
    • Marketplaces

Maurya asserts:

“When people bring up business models, they often use a whole bunch of terms such as software as a service (SaaS), enterprise, retail, e-commerce, ad-based, freemium, viral, social, not-for-profit, marketplace, et cetera.

“The reason we end up with dozens of business model descriptors is that we attempt to label the myriad ways that a business model creates, delivers, and captures value. For instance, the difference between SaaS, enterprise, and open-source business models is in how they deliver and capture value. Even within a SaaS business model, one could implement a freemium or trial-based pricing model. Trying to create a list of business model types gets complex pretty fast.

“Instead I’m going to take a different approach. We are going to categorize business model types by the number of actors (or customer segments) in the model. Using this approach, we’ll define just three basic business model archetypes: direct, multisided, and marketplaces. In the next few sections, I’ll show you how to start with these archetypes to describe any type of business.

Maurya, Ash. Scaling Lean (pp. 50-51). Penguin Publishing Group. Kindle Edition.

For your flipping perspective exercise this week, include each of these three models in your free writing.

The Cosmos of the New Venture

The Modelling of the business is the first entry in the Wisdom cycle. A model can be as simple as charging $500 per hour for professional services or a $1000 per lesson as Zhao proposed to Steve. It can even be as simple as WhatsApp’s model of $.99 per year for unlimited texting and an assurance that there will be no advertising. Or the model can be as complicated as Google’s multi-sided advertising based model which requires Nobel prize winning economists to formulate.

No matter how complex the model, the entrepreneur establishes how they want to relate to the customer, not just the setting of a price. Modelling requires the wisdom of conceiving, experimenting and selecting the model along with relating that to the brand promise and brand experience.

 

You can find a PDF of the full Preface, Forward, Chapter 1 and Chapter 2 here.

You can find the introduction to the Cosmos of the New Venture here.

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Emails to a Young Entrepreneur: Modelling the Business

Day 121 of Self Quarantine             Covid 19 Deaths in U.S.:  136,000

Modelling the Business

“Essentially, all models are wrong, but some are useful.”

George E.P. Box

 

Dundee, Oregon, USA, Archery Summit Vineyards, July 15, 2013

Dear Mikhail,

I really enjoyed your stories of all that you are doing to find the key talent to raise your infant venture. You have a wonderful sense of humor and way with words. I appreciate your sending me the resumes and LinkedIn profiles of the potential co-founders you are interacting with. I am flattered that you think I might offer some insights as to which one might be best for you. One thing my observing and discovering journey has taught me is that I can know what is right for me, but I can’t possibly know what is right for someone else.

When I started my venturing journey forty years ago, as a capable technologist I was focused on the product.  All of my creative energies were spent transforming raw technologies into something that was useful for enterprise customers. I was in the “if I build it, customers will come” state of mind. Fortunately, I was surrounded by enough people in very large companies who spent all their mental energies on attracting and acquiring paying customers.

Prior to founding Attenex, there were no technical and business people to help me think through how to do build a new venture with our conceived visual analytics technology. I had to figure out whether there was a product to be built, whether there were any customers who might care, and could we make money selling it. We spent three months prototyping the technology and were delighted to see that we could get 2-3 times productivity increases. As I explored the technology, I realized we could easily boost the productivity to at least ten times.

We discovered a path forward with the prototype iterations in three months. Then I ran into a brick wall at the intersection of extreme productivity and the existing hourly billing business model of the legal industry. Every time we increased the productivity of the tool, we decreased the revenue and profits for our law firm customers.  Our unique selling proposition would be:  “Buy our product and you will make 1/10 the money you did before using our tool.”  Even I would laugh me out of the room.

I turned my energies to looking for a business model that would allow our customers to make money. I spent five months digging deeper into the many aspects of legal electronic discovery (eDiscovery), reading every business modelling book I could find, and talking to a wide range of attack finance professionals. With all of this research, I couldn’t find a viable business model.

Along the journey I came across Adrian Slywotzky’s many books on business models, profit models and value migration. My frustrating path of understanding profitability felt much like Steve in the following story from the introduction of The Art of Profitability:

“Steve: Where to begin? “I heard your name at a cocktail party. Someone introduced me to a man named Otto Kerner. I told him I had to learn about profitability. And Mr. Kerner told me that if I wanted to learn about profit, I ought to meet you.”

Zhao smiled. Kerner was Zhao’s closest friend. A senior partner at Storm and Fellows, he was the person responsible for connecting Zhao to the firm. At age eighty-five, he still came into the office every day, even if only to spend half the afternoon chatting with Zhao. “I’m old enough to be Zhao’s father,” he liked to say to people at the firm who wondered about Zhao, “But when we talk, Zhao is the teacher and I’m the pupil. That’s why we need him here at Storm and Fellows—he’s my personal continuing education program.”

“An introduction from Otto Kerner is like gold in my book,” Zhao remarked. “But tell me—why?”

Steve was puzzled. “Why what?”

“Why do you have to learn profitability?”

Steve paused. A half dozen reasons were running through his mind. Why, indeed? He was tempted to say a couple of things, but he checked himself, realizing they were platitudes: Because profit is the lifeblood of any organization . . . because the ultimate purpose of business is to create profits for shareholders . . . Somehow, he sensed, the clichés he’d repeated in the workplace and even in business classes he was now taking at night, wouldn’t work so well with David Zhao. He experienced an instant of panic, then consciously relaxed the tension that gripped him.

“It has to do with my job,” he finally responded. “I work in strategic planning at Delmore, Inc.” Steve glanced at Zhao, half-hoping for the raised-eyebrow look of respect he usually got when he mentioned the company name. But Zhao’s expression betrayed nothing. Steve went on, “It’s a big company with a great history, of course. And being in the planning department is a good opportunity for me. I get to look closely at all the various industries we’re in, which is almost like getting a business-school education on the job. But as you probably know,” he continued, “the company hasn’t been doing very well lately. Profits are flat, and the stock price has been stagnant for about eighteen months.”

“For two years, actually,” Zhao remarked.

“I guess you’re right,” Steve said. “You must follow the stock.”

“I find Delmore—interesting is the right word, I suppose,” said Zhao. “And you’re in strategic planning there. Tell me, Steve,” he asked, “what sort of strategy do you plan?”

Was that an amused glint in Zhao’s eye? “What I do is more like research—studying potential mergers, acquisitions, spin-offs—you know the sort of thing,” he responded, immediately feeling that his answer sounded lame. “But I want to contribute more,” he quickly added. “I want to learn how I can help the company get out of the doldrums. Does that make sense?”

“Why not?” Zhao answered. “But Delmore has been in business since 1904. It has revenues of $18 billion a year from forty different businesses. Surely the wise men and women who run the firm must know all about how to make profits? Or do you suppose they need Steve Gardner to teach them that?”

Steve reddened and sat for a moment in silence. He was thinking about some of the disturbing things he’d heard and seen around the offices at Delmore in the past six months. About the company-wide strategy conference, originally scheduled for April, that was first rescheduled twice, then postponed indefinitely, with no explanation as to why, causing rumors to swirl in the corridors . . . about the resignations that summer of three members of the executive committee, all within four weeks of one another. . . about the disparaging tone of recent comments by Wall Street analysts about Delmore, and the defensive tone of the company’s public responses. And just this past week, people were whispering that the long-expected layoffs in three divisions would be a lot bigger than anticipated. Life at Delmore was feeling very different than it had when Steve joined the company.

Steve took a deep breath. “I guess I’m not necessarily convinced that the wise men and women at Delmore do know what profitability is all about,” he finally admitted. He looked Zhao in the eye, wondering how Zhao would react.

Zhao merely turned his head slightly to stare more closely at Steve. A long moment passed. “Honesty,” Zhao commented.

“Excuse me?”

“Honesty. I don’t run into it very often.”

Another pause, as Zhao stared through the glass wall, seemingly focused on a helicopter whirring across the water from New Jersey, nearly at a level with his own forty-sixth-floor perch.

Finally, he turned to Steve.

“If you really want to learn about profitability, I’m willing to teach you,” he said. “But there are several conditions. First, we’ll meet most Saturday mornings between now and next May. Second, every lesson will last exactly one hour. And I’ll expect you to spend time between lessons reading and otherwise preparing. Is that acceptable?”

Steve bowed his head slightly. “Yes, it is.”

“Are you doing anything other than working at Delmore? Moonlighting, or taking classes somewhere?”

“I am taking a night class this fall at NYU—financial management. I thought I’d take one or two courses a semester to help me decide whether to go on for an MBA. That’s okay, right?” It had suddenly occurred to Steve that Zhao might consider him over-booked.

“It’s fine,” Zhao reassured him. “Your preparation time for me will be about four hours per week. I hope that works with your schedule?”

“I think so.”

“Good. There’s just one more thing. Did Otto tell you that I charge a fee?”

“No. How much is it?”

“A thousand dollars per lesson.”

Steve sucked in his breath. Then his shoulders dropped, collapsing in defeat. He looked away, suddenly feeling frustrated and angry. He was tempted to speak his mind—or to simply storm out of the office, slamming the door behind him.

But instead, he simply said, quietly, “I can’t afford that.”

Zhao laughed, cutting the tension in the room. “Of course you can’t,” he replied. “You’re a student. I’m not asking for the money now. You can pay the fee when you’re able to—if you ever are.”

Steve didn’t know whether to feel relieved, embarrassed, or guilty. He thought about the usual four-digit balance in his bank account. “I might not be able to pay you for five or six years. Maybe longer.”

“I know that,” Zhao answered, a playful grin now spreading across his face. “Luckily for you, I’ve decided you’re good for it.”

Steve’s mood turned to puzzlement and mild annoyance. Zhao, he vaguely felt, was being condescending, perhaps toying with him. What makes Zhao think I’ll ever pay him a penny? he thought. Maybe I’ll take all his lessons, absorb all his ideas, then walk away and never see him again. That’s probably what most people would do.

“Do we have a deal?” Zhao asked.

Steve paused. “Yes, it’s a deal,” he found himself saying. Zhao reached across the desk, and the two men shook hands. And suddenly Steve sensed that he would never simply walk away from Zhao . . . that one day he would pay Zhao his total fee . . . and that Zhao had known all this before Steve himself did.

Zhao smiled as if he understood. “Very well then,” he said. “Let’s get started.”

Slywotzky is my Zhao. As I looked at the many profit models, the answer became very clear. So clear that I wondered how we’d missed it for so long. All we had to do was move from a billable hour model to some form of fixed price billing. Fortunately, our lead customer, Preston Gates and Ellis, had fifteen years of billing information to a wide range of customers. As we evaluated the different variables, charging by the number of Gigabytes (GB) of electronic mail and digital documents that a customer gave us became the foundation of our value based pricing structure.

On average, the law firm was charging $30,000 per gigabyte (GB = 1000 megabytes) of digital documents processed to do a full lawyer review. The firm realized a profit of about 20%. The cost of the review with the Attenex Patterns software was on average $10,000 per GB. So the law firm could drop the price to $20,000 per GB giving the customer a nice incentive to move to the new technology. Even decreasing their prices, the law firm increased their profits from 20% to 50% per GB.

One of the ways you know that you have arrived at a good business model is when there are additional benefits for the customer. One of the challenges with a billable hour model is that the customer and the law firm don’t have any idea how much it is going to cost to review a matter. With the new fixed price model, as soon as the customer knew how much digital material they had, they knew how much it was going to cost them to review it. The customer could now budget for each matter which made their finance team much happier.

While the entrepreneurial pundits argue interminably about which is more important – team, market size, product, or go to market strategy, I learned that the hardest component of a new venture is discovering the business model. It doesn’t make sense to invest too much in building a product or doing a lot of customer discovery until you can come up with the simplest business model that will work.

If I didn’t believe this before I started my post-Attenex startup – Wine Transformations – I certainly believed it in the three years I pursued my passion for fine wine growing. As a wine geek, I was intrigued by biodynamics and the growing of fine wine. After the sale of Attenex, I decided to pursue my wine geek passion by finding a way to create a business in the wine industry.

As I walk the vineyards at Archery Summit Estate this morning after spending the night in the winery’s guest house, I marvel at the interaction of humans and wine grapes. The sun is on the rise and it is going to be a hot day. The grape clusters are looking good. You can tell it was a great spring for these older vines. Brian Doyle in The Grail: A Year Ambling and Shambling through an Oregon Vineyard in pursuit of the best pinot noir in the whole wide world captures this human and grape vine interaction:

“Grapevines are amazing life forms when you think about it, they plunge their fingers a hundred feet down into the rocky soil, they can live for hundreds of years, they fend off all sorts of insect attacks, and they have been working with human beings for so long, thousands and thousands of years, that you wonder sometimes who cultivates who, you know what I mean?  Are people manipulating and taking advantage of grape vines, or are grape vines deftly using human beings to take over the world?”

This trip through the vineyards is a “mourning” journey for me.  After three years of research, brainstorming, interviewing, and experimenting, I am unable to find a single business model that can work in the wine industry. As Jim Fetzer shared after fifty years in the wine industry, the only business model he could find that works is to buy some vineyard land, hold onto it for 50 years and sell it. Everything else he’s found in the industry is a way to lose money.

Since I don’t have 50 years of life left, that doesn’t sound like a good business model. I’ve learned a lot over these three years of trying to find a business model and I’ve tasted hundreds of wonderful wines (one side benefit of the fine wine industry). I found 128 ways not to make money in the wine industry. This morning when I realized that I can make more money in a year or two with even a poor idea for a software product then I can in 50 years in the wine industry, it is time for me to move on from my passion.

The good news is that I only had to invest a portion of my time and didn’t waste any time or energy on building a product.

Business model thinking early in the new venture is key. How can you sustainably make money in your new venture?

Ash Maurya in his video promo for his book Running Lean asserts the mantra of the lean entrepreneuring crowd:

“The true product of a startup is a working business model.”

 

Maurya goes on to share:

“We live in an age of unparalleled opportunity for innovation. We’re building more products than ever before, but most of them fail—not because we can’t complete what we set out to build, but because we waste time, money, and effort building the wrong product.”

My treasured mentor, Russ Ackoff shared a lifetime of wisdom in a short twelve minutes in 1994 in a video “If Russ Ackoff had Given a TED Talk…” Near the end of the talk he shares:

“Continuous improvement isn’t nearly as important as discontinuous improvement. Creativity is a discontinuity. A creative act breaks with the chain that has come before it. It’s not continuous. One never becomes a leader by continuously improving – that’s imitation of the leader.  You never overcome a leader by imitating them and improving slightly. You only become a leader by leapfrogging those ahead of you. That comes about through creativity.

“One final point about that. When we look at the models of quality and we frequently point to the Japanese and what they’ve done to the automobile.  There is no doubt they’ve improved the quality of the automobile. But it’s the wrong kind of quality. Peter Drucker made a very fundamental distinction between doing things right and doing the right thing.

“The Japanese are doing things right, but they are doing the wrong thing. Doing the wrong thing right is not nearly as good as doing the right thing wrong. The automobile is destroying urban life around the world. Just visit Mexico City or Santiago or any of those major cities where you find congestion and pollution so bad that children have to be kept home from school. They are not allowed to walk out of doors because the pollution is so intense.

“And then we talk about the quality of the automobiles they are driving. It’s the wrong concept of quality. Quality ought to contain the notion of value, not merely efficiency. That’s a difference between efficiency and effectiveness. Quality ought to be directed at effectiveness. The difference between efficiency and effectiveness is the difference between knowledge and wisdom. Unfortunately we don’t have enough wisdom to go around.

“Until managers take into account the systemic nature of their organizations, most of their efforts to improve their performance are doomed to failure.”

At a recent UX conference a former ID student, Tania Schlatter, author of Visual Usability: Principles and Practices for Designing Digital Applications, shared that twenty years ago she remembered me saying “don’t get stuck in your plans, put a stake in the ground and move forward.” While teaching an entrepreneuring for designers class at ID, I used that principle to move the student teams quickly through Maurya’s Lean Canvas.

Over the years, I’ve seen most student and professional teams stay stuck on the problem/solution and target customer segment. They will sit around a table and discuss (argue) for hours about the “right” answer with no evidence. A framework like the Lean Canvas is an iterative exercise which you need to quickly move through. In a classroom setting, I have students spend no more than five minutes on a single box of the canvas – put a stake in the ground and then move on. Several things happen by going through the whole canvas in an hour:

  1. You realize as you fill in the later boxes, that some of your earlier decisions no longer make any sense.
  2. You realize that you don’t have enough information to fill out many of the boxes.

With the first issue, you need to get all the way through the whole canvas and then spend a few minutes finding the logical disconnects. Then you rapidly iterate another pass at the canvas to resolve the logical disconnects. With the second issue, you design the experiments to go find out the information preferably by going into the field and observing and talking with real customers.

The Lean Canvas is meant as a scratch pad for what you are learning about the customer and how that changes the solution and even the nature of the problem you are trying to solve for. I recommend that entrepreneurs update their Lean Canvas at least once a day until they get to their Minimum Viable Product. Then they should update it at least once a week. It is a quick way to remind yourself to constantly experiment and then record what you’ve learned.

An entrepreneur understands that no “learning” is business model neutral. If you remember in your ID Master’s Thesis classes with Patrick Whitney, he had you express your yearlong thesis project in multiple media.  I wanted to know why he required so many different artifacts for the thesis projects – thesis document, fifteen minute presentation, large poster format, four page brochure and three minute video. Patrick explained that no medium (in the McLuhan sense) is content neutral. Each time you move content from one media form to another, you are gaining insights into the product (artifact) you are trying to represent and communicate. The primary purpose of having so many media forms is to provide another way for you to acquire insights into what you are designing. The regular process of iterating through the Lean Canvas provides the same kind of opportunity for insight generation.

In a similar way, Adrian Slywotzky suggests that looking for ways to make every part of your business digital generates a wealth of insights. In his book How Digital is Your Business, Slywotzky defines digital business as “one in which strategic options have been transformed – and significantly broadened – by the use of digital technologies. . . A digital business uses digital technologies to devise entirely new value propositions for customers and for the company’s own talent; to invent new methods of creating and capturing profits; and, ultimately, to pursue the true goal of strategic differentiation: uniqueness.

Digital Business Design leads to 10X productivity improvements.  Slywotzky states:

“A 10X productivity improvement is more than an incremental growth in efficiency.  It is a fundamental change in the way companies do business.  It liberates resources to serve customers, leverage talent, grow the business, and help toward achieving strategic leadership.

“Productivity is measured as a ratio of value created to resources used.

“Why are 10X productivity improvements possible when Digital Business Design is employed?  There are several reasons:

      1. Most of the time, in most of the economy, atoms are used when bits would bring better results.  Bits are cheaper.  When bits are used instead of atoms, a lot of big costs go away.
      2. Digital options make it possible to collect very valuable types of bits (such as information on what customers really want)before committing atoms.  The result is that atoms (e.g., inventory or unused factory capacity) are not wasted.  Huge costs vanish quickly when bits precede atoms.
      3. Digital innovators have developed an entire array of bit engines to collect, process, and distribute bits with extraordinary efficiency.  The goal is not just to focus on bits, but to have the tools to manipulate and distribute those bits in smart ways.  When a collection of powerful bit engines is exquisitely tuned to the needs of customer, value can be generated at an extraordinary rate.

“That’s why it is extraordinarily important to be constantly asking:  What bit engines have we put to work in our company?  How can they be improved?  What new bit engines will we need to address tomorrow’s business issues?”

Many of the most successful companies use a multi-sided business model. Google gives away their software and applications to the users and uses advertisers to pay for the free users.  Users get a free ride as long as they don’t mind seeing advertisements on every web page. This business model is dependent on having lots of users. As a general rule, early stage investors don’t like this model because you have to spend 2-4 times the marketing dollars than for a simpler model. However, if you can get the users to engage daily with your product, this model is very powerful.

You can find all kinds of spread sheets and applications for doing business modelling.  What I am talking about in this email is the kind of model you can do on a napkin. It is as simple and as hard as understanding the value of the task the customer is currently doing and how they can make more money (more revenue or reduced costs) by using your product or service. It means you have to understand your customer’s business model and how they make money from their customers.

Yours in entrepreneuring,

Skip Walter

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Emails to a Young Entrepreneur: Applying Finding Talent

Day 120 of Self Quarantine             Covid 19 Deaths in U.S.:  135,000

Applying Finding Talent

The art form for finding talent is as simple as telling a good, compelling story about your “Why.” Dana was able to attract her co-founder with a 15 second story. The work in finding talent is the combination of being in the right place with the right story.

The flipping perspective theme for this week of exercises is observing how people in the startup ecosystem introduce themselves in “meetup” like settings.

We live in a time of Meetups. Through signing up at Meetup.com and subscribing to Startup Digest you are made aware of the many events related to your startup that are occurring weekly in your geography. Many of those Meetups are broadcasting their meeting video over the Internet. Look for meetups that are relevant to your startup. In addition, look for events where startups are doing short investor presentations – like at Angel Investment Forums, MIT Enterprise Forums, university business plan competitions or startup accelerator demo days.

The observational work is to attend seven nights of relevant Meetups, preferably in person. At the beginning of most small to medium sized Meetups each person introduces themselves to facilitate interactions later in the networking sessions.

It is these introductions that you want to pay close attention to. For each meetup, pick one example of an introduction that resonated with you. Make sure to take a photo or two of the Meetup setting and the people that are present for your flipped perspective exercise.

At the end of the seven days, what patterns emerge on what works for these fifteen second introductions? Did these patterns impact how you described yourself over the course of the seven Meetups?

In summary, for seven days:

    • Attend a “meetup”
    • Take photos of the participants in different stages of the Meetup
    • Each day select one introduction that resonated with you
    • Free write about that introduction

Here are a couple of examples of seeking lead customers and lead investors.

February 1, 2014

After taking a two year break, Cathi Hatch of Zino Society twisted my arm to rejoin Zino as a coach. I agreed and then two days later she asked me if I would be a panelist for the Angels and Demons investment forum coming up. I agreed without knowing what I was getting into. I figured there would be 30-40 people in the audience and the usual mix of high tech companies. When I walked into the room I couldn’t believe the 150 people that were already there. Then I looked at the presenting companies and found that three of them were Cannabis new ventures under Washington State law. What an interesting night this is turning out to be. Nine companies presented with one not-for-profit and one update from a company that had presented previously. Each of these companies was pitching to find that lead investor that could kickstart their company. The panelists were a range of VCs, super angels, and me. Cathi and her team do a good job of trying to match companies with the investors in the audience through their “green sheets” where attendees can provide comments on the pitch and check a box for wanting more information, to make connections to customers, or to invest in the startup. The demon in me looked at the one page info sheets from the cannabis companies and started chuckling at the thought “what were they smoking when they came up with this plan?” I figured somebody on the panel would use that to get a chuckle. I was delighted when nobody did and I had the last opportunity to ask the companies a question and used the chuckle line to the delight of the crowd. One of the panelists leaned over to me and shared “clearly a lot of the teams were smoking something when they came up with their plans!” I am glad I am on this side of the presentations as it is really difficult to present in a five minute pitch the essence of this conceiving of a new venture that the entrepreneur has sweated blood and tears over. Yet, these forums provide an opportunity to get in front of 150 investors at one time instead of the labor intensive activity of first finding an accredited investor and then meeting them one on one. Thankfully there are many forums in strong startup ecosystems like Seattle for an entrepreneur to look for their lead investor.

February 2, 2014

At the Angels and Demons Zino Society event, the only interesting company to me was HUBEdu who were pitching their tool for bridging the gap between Facebook and Learning Management Systems. Tiffany Reiss is the CEO and a professor at several local universities. She clearly has passion about her idea to engage students where they already hangout – in social media. The entrepreneur assassin in me found a lot to dislike. Because I was in expert panelist mode, when Tiffany’s lead developer, Chris Airola, came up to me after the event, I unloaded on him with everything that was wrong with their pitch. Well, my Vistage training didn’t last very long. He withstood my barrage of negatives and then asked if I would meet with the management team. He was interested both in my investor experiences as well as the potential for me to be a lead customer with my teaching at UW and the Institute of Design. I was impressed that he was paying attention and using the forum for double duty – find customers and find investors. Maybe there is hope for this group. I agree to a meeting and make a vow to myself to be more in Vistage “carefrontation” mode when I meet with them. When I got home I sent a collection of background articles on different learning systems and a pointer to Simon Sinek’s “WHY” video. I strongly suggested that they watch the video and spend time on what their personal and new venture “whys” are. When we got together, we started with their “whys.” As usual even with a heads up and the powerful Sinek video, they shared their “hows.” I pushed back and suggested other variants and they still couldn’t see the difference between their why and Sinek’s example of powerful whys. So I switched gears and went through a few other frameworks like the four developments (product, customer, talent and investor), Customer Lifetime Value (CLV) and RFM (Recency. Frequency. Monetization). I then came back to the WHY and Tiffany nailed it. After she shared her new why, Chris immediately saw the difference between their previous how and the new why.  The energy in the room exploded and for the next hour, Chris and Tiffany generated more good thoughts about their new venture than for the previous year. As we wound down, they asked me if I would be a customer and try their tool in my upcoming classes. Now that I knew they had a powerful why, I gladly agreed.

The Cosmos of the New Venture

Finding talent is the first of the steps in understanding the context that surrounds the core triangle of work of the entrepreneur. The overwhelming urgency of the new venture leads the entrepreneur to focus only on the core triangle of work. This core work sits in a much larger context. The finding talent is an ongoing process for the new venture. The needs are always changing and expanding and finding the talent, customers and investors is a never ending quest.

Finding talent is the journey to finding the other key players in the cosmos of the new venture – the founding talent, the launch customer and growth partner, and the lead investor. The talent is the village that raises the new venture.

Finding talent is VALUING DIFFERENCES.

 

You can find the introduction to the Cosmos of the New Venture here.

Posted in Content with Context, Emails to a Young Entrepreneur, Entrepreneuring, Flipped Perspective, Learning | Leave a comment

Emails to a Young Entrepreneur: Finding Talent

Day 119 of Self Quarantine             Covid 19 Deaths in U.S.:  134,000

Finding Talent

“The true path to wisdom can be identified by three things,” said Petrus. “First, it must involve agape, and I’ll tell you more about this later; second, it has to have practical application in your life. Otherwise, wisdom becomes a useless thing and deteriorates, like a sword that is never used.

“And finally, it has to be a path that can be followed by anyone. Like the road you are walking now, the Road to Santiago.”

Coelho, Paulo, The Pilgrimage (Plus) (pp. 27-28). HarperCollins.

 

Glen Ellen, CA USA, Benziger Family Winery, July 10, 2013

Dear Mikhail,

Thanks for your kind words about how much the flipping perspective exercises helped you to start observing your audience and customers. I am already seeing differences in your observing and discovering mindset as you describe your exercises and insights. I appreciate your sending along what you learned from brainstorming ways to create an audience for your project. As I shared earlier, I am not qualified to judge what is right for you and your path.

While a young mother understands that she is not alone in nurturing the infant and transitioning to being a parent, she realizes there is a lot to the old saying “it takes a village to raise a child.”

It takes a village of partners to raise a new venture.

In your emails, I’ve read a lot about your idea and your background. I haven’t heard anything about your partners in this endeavor and the talent that is surrounding you.

Today, I would like to share the importance of three people in your village that will nurture and help you develop your new venture. The key talent roles that you need to intentionally seek out are – your co-founder, your growth partner customer, and your lead investor. The search for each of these partners is much like the search for your life partner in a marriage. You will be interacting with each of these partners during the intensity of the infancy of your venture as much or more than with your life partner.

As I struggle to understand and share the lessons of my forty years of conceiving and growing new ventures, I am reminded of an hour long presentation on the culture of Japan.  We tried to absorb these lessons the first morning of our arrival in Japan as part of a Total Quality Control Study Mission with twenty manufacturing managers from Digital Equipment Corporation.

Jean Pearce, a columnist for the English language Japan Times, is a diminutive lady who has been in Japan for several decades.  Her comments stick with me 25 years later as I attempt to share the culture of entrepreneuring:

“When I first arrived in Japan, I was able to write a full book about the Japanese culture.  After a year, I was barely able to write five pages about the culture of Japan.  Today, after thirty years of living in Japan, I can’t even write a single definitive sentence about the culture of Japan.  The more I experience the Japanese culture, the less able I am to generalize.  However, I can share many examples of differences between America and Japan and hopefully that will help you experience your stay in Japan in a different manner.”

Jean pointed out a difference between East and West through something as simple as eating utensils. Silverware is noisy, clunky and cutting. Chopsticks are quiet and have not been used by others before. They are natural and have sensitivity.

She pulled out a little cage for keeping insects in the house so that one can hear the song of summer. The cage is arranged so that you feed the insect cucumbers or watermelon. I asked her later about these cages and she pointed me to the following short story:

Kusa-Hibari

Lofcadio Hearn

“His cage is exactly two Japanese inches high and one inch and a half wide: its tiny wooden door, turning upon a pivot, will scarcely admit the tip of my little finger.  But he has plenty of room in that cage — room to walk, and jump, and fly, for he is so small that you must look very carefully through the brown-gauze sides of it in order to catch a glimpse of him.  I have always to turn the cage round and round, several times, in a good light, before I can discover his whereabouts, and then I usually find him resting in one of the upper corners – clinging, upside down, to his ceiling of gauze.

Imagine a cricket about the size of an ordinary mosquito — with a pair of antennae much longer than his own body, and so fine that you can distinguish them only against the light.  Kusa-Hibari, or “Grass-Lark” is the Japanese name of him; and he is worth in the market exactly twelve cents: that is to say, very much more than his weight in gold.  Twelve cents for such a gnat-like thing! . . . By day he sleeps or meditates, except while occupied with the slice of fresh egg-plant or cucumber which must be poked into his cage every morning . . .to keep him clean and well fed is somewhat troublesome: could you see him, you would think it absurd to take any pains for the sake of a creature so ridiculously small.

But always at sunset the infinitesimal soul of him awakens: then the room begins to fill with a delicate and ghostly music of indescribable sweetness — a thin, silvery rippling and trilling as of tiniest electric bells.  As the darkness deepens, the sound becomes sweeter — sometimes swelling till the whole house seems to vibrate with the elfish resonance — sometimes thinning down into the faintest imaginable thread of a voice.  But loud or low, it keeps a penetrating quality that is weird . . . All night the atomy thus sings: he ceases only when the temple bell proclaims the hour of dawn.

Now this tiny song is a song of love — vague love of the unseen and unknown.  It is quite impossible that he should ever have seen or known, in this present existence of his.  Not even his ancestors, for many generations back, could have known anything of the night-life of the fields, or the amorous value of song.

They were born of eggs hatched in a jar of clay, in the shop of some insect-merchant: and they dwelt thereafter only in cages.  But he sings the song of his race as it was sung a myriad years ago, and as faultlessly as if he understood the exact significance of every note.  Of course he did not learn the song.  It is a song of organic memory — deep, dim memory of other quintillions of lives, when the ghost of him shrilled at night from the dewy grasses of the hills.  Then that song brought him love — and death.  He has forgotten all about death: but he remembers the love.  And therefore he sings now — for the bride that will never come.

So that his longing is unconsciously retrospective: he cries to the dust of the past — he calls to the silence and the gods for the return of time. . .Human lovers do very much the same thing without knowing it.  They call their illusion an Ideal: and their Ideal is, after all, a mere shadowing of race-experience, a phantom of organic memory.  The living present has very little to do with it. . .Perhaps this atom also has an ideal, or at least the rudiment of an ideal; but, in any event, the tiny desire must utter its plaint in vain.

The fault is not altogether mine.  I had been warned that if the creature were mated, he would cease to sing and would speedily die.  But, night after night, the plaintive, sweet, unanswered trilling touched me like a reproach — became at last an obsession, an affliction, a torment of conscience; and I tried to buy a female.  It was too late in the season; there were no more kusa-hibari for sale, — either males or females.  The insect-merchant laughed and said, “He ought to have died about the twentieth day of the ninth month.” (It was already the second day of the tenth month.)  But the insect-merchant did not know that I have a good stove in my study, and keep the temperature at above 75 degrees F.  Wherefore my grass-lark still sings at the close of the eleventh month, and I hope to keep him alive until the Period of the Greatest Cold.  However, the rest of his generation are probably dead: neither for love nor money could I now find him a mate.  And were I to set him free in order that he might make the search for himself, he could not possibly live through a single night, even if fortunate enough to escape by day the multitude of his natural enemies in the garden — ants, centipedes, and ghastly earth-spiders.

Last evening — the twenty-ninth of the eleventh month — an odd feeling came to me as I sat at my desk: a sense of emptiness in the room.  Then I became aware that my grass-lark was silent, contrary to his wont.  I went to the silent cage, and found him lying dead beside a dried-up lump of egg-plant as gray and hard as a stone.  Evidently he had not been fed for three or four days; but only the night before his death he had been singing wonderfully — so that I foolishly imagined him to be more than usually contented.  My student, Aki, who loves insects, used to feed him; but Aki had gone into the country for a week’s holiday, and the duty of caring for the grass-lark had developed upon Hana, the housemaid.  She is not sympathetic, Hana the housemaid.  She says that she did not forget the mite — but there was no more egg-plant.  And she had never thought of substituting a slice of onion or of cucumber!. . .I spoke words of reproof to Hana the housemaid, and she dutifully expressed contrition.  But the fairy-music had stopped: and the stillness reproaches; and the room is cold, in spite of the stove.

Absurd!. . .I have made a good girl unhappy because of an insect half the size of a barley-grain!  The quenching of that infinitesimal life troubled me more than I could have believed possible. . .Of course, the mere habit of thinking about a creature’s wants — even the wants of a cricket — may create, by insensible degrees, an imaginative interest, an attachment of which one becomes conscious only when the relation is broken.  Besides, I had felt so much, in the hush of the night, the charm of the delicate voice — telling of one minute existence dependent upon my will and selfish pleasure, as upon the favor of a god — telling me also that the atom of ghost in the tiny cage, and the atom of ghost within myself, were forever but one and the same in the deeps of the Vast of being. . . And then to think of the little creature hungering and thirsting, night after night and day after day, while the thoughts of his guardian deity were turned to the weaving of dreams!. . .How bravely, nevertheless, he sang on to the very end — an atrocious end, for he had eaten his own legs!. . .May the gods forgive us all — especially Hana the housemaid!

“Yet, after all, to devour one’s own legs for hunger is not the worst that can happen to a being cursed with the gift of song.  There are human crickets who must eat their own hearts in order to sing.”

The cricket owner in the story didn’t understand the partnership he was in with the cricket to receive value from the song of summer. Just as the cricket had to find partners to keep him alive through cold and care and feeding, you will need to find the partners to nurture your business through these early fragile years. You will need to go beyond just the care and feeding to find the partner that can help you to conceive your products and your song of summer.

During my journey of “paying it forward” I have the privilege of meeting so many young entrepreneurs who are wonderfully committed to creating a business and making the world a better place. Dana Dyskterhuis is one of those special forces I rarely encounter – someone who is doing it AND is able to be reflective about her journey AND is gifted in communicating her story.

Dana was kind enough to describe her journey with her company Fanzo to my MBA class in entrepreneuring.

“I come from Omaha, Nebraska and I moved to Seattle six years ago. I took a job with Qwest Communications which is now CenturyLink. I was in marketing communications and got to work with the Seattle Seahawks. As part of the job I had to deal with a lot of the technical issues surrounding events at CenturyLink Stadium and had to be available 24/7.

“I graduated from a Nebraska college in broadcast journalism and started my professional life as a television news reporter. Then I went to the other side and did PR for an arena in Omaha, a hockey team, and a non-profit – The American Cancer Society.

“I was recruited from my arena job to do PR for this hockey team that was the minor league team for the Calgary Flames. I was really excited.  They’d been in town for a year and a half, but there was no buzz about them. No one was going to the games. However, my mom and I were going to the games and were wondering why no one was showing up.

“Then they hired a local president to run the team and he recruited me away. I had one question for him ‘Is the team here to stay?’ He looked me in the eye and said ‘the team is here to stay. You can leave your job and come with us.’

“So I left my job and started doing PR for the team and two months later they left our city. So I said enough. It is time to get out of Omaha, so I started looking at other cities like New York and the Qwest job opened up in Seattle. I’ll go there and retire. My grandma worked all her life for Qwest and I can go to Qwest and the rest of my life will be set.

“I spent a year and a half in my job and then there were layoffs. It was tough.”

“Let me take you back to when I arrived in Seattle.  I knew one person. How can I find people? I’m so shy. I wanted to find where all the Nebraska folks hung out. So I looked around for Game Day. Where did all the Huskers go for football game day? I couldn’t find the game day bar. I didn’t know where to go.

“Finally a few months later someone told me that all the Huskers go to Lucky 7 in Kirkland. So I went and it was this sea of red. Kind of a back home feeling. Cool.

“I didn’t think much about it at the time. In subsequent years I continued my PR work and did some consulting for mom and pop shops. I did business development in a startup. I was getting advice from lots of people that if I wanted to stay in Seattle, go join a startup.

“So I did the bus dev job. I thought it was the coolest thing. But then they ran out of money.

“About two years ago, I was noticing a pattern on Twitter and Facebook amongst my friends who were tweeting out all the time things like ‘Hey, I’m going to San Francisco where do I go to watch the game? I’m going to New York where do I go to watch Manchester United?’

“For some reason, I began noticing that this was a problem. So I just started solving the problem.  I began building a database of watch sites, designated watch sites for fans. It was a Google Docs spread sheet. I’m not a technical person. The spread sheet was for the Top 20 cities in the United States.

“I just started talking to people about this idea. They’d all say ‘yeah, I have that problem.’ The more people I’d talk to, they would share their version of the problem. I went to Kansas City and I didn’t know where to go.

“I felt I was on to something. Then I was at an event where there were Silicon Valley speakers. It was a motivational startup day event in Bellevue. I got 15 minutes with Micah Baldwin who started Follow Friday on Twitter. He is a huge presence. He’s an angel investor who had several startups before with both successes and failures.

“I had a couple of other ideas at the time. He went No to the first and second ideas. Ok, so I have this database of watch sites. He went ‘Tell me more.’

“I told him more about the watch sites. He said ‘Pursue that. Go find a technical co-founder.

“Oh my God. How do I do that? What am I doing? I am not a startup person. I’m not a technical person. I was feeling really lost and horrified.

“But I did it. I just started going to events pitching my idea. This is what I’m doing. This is what I need. I did a Startup Weekend event where you build a prototype in a weekend. So we did that with a team.

“Then it was at an event at the Amazon campus on South Lake Union that you could get up and give a 15 second pitch on what you were doing and what you needed. It was in the basement of the TechStars building.

“People were drinking whiskey and eating pizza. It was really casual, but super intimidating to me. There was a line all the way around the room of people wanting to pitch. I wasn’t sure if I wanted to pitch. I was feeling really nervous.

“I had met a couple of people and they were like ‘you gotta do it.’ I was at the very end of the line and not going to pitch. But these folks kept encouraging me.

“Then the speaker said ‘OK, we’re done. Oh, but wait there is one more.’ I went ‘Oh God, OK.’ Then the speaker asked the crowd ‘Should we bring her up, should we bring her up?’

“The crowd yelled ‘Yeah, Pitch! Pitch!’ I went ‘Oh no. Extra pressure.’

“I got up and gave my pitch. I don’t remember what I said. Other than ‘If you want to start this business with me, come find me and we’ll go hook up.’ Then I realized what I said and went ‘No, No, I didn’t mean that.’ How embarrassing. I clarified that right away.

“After the pitch I stood around and talked to people and as luck would have it my co-founder Paul was there. I didn’t know who he was at first. Just this guy who came up to talk. He was interested and asking questions. What’s your business model? What’s your go to market? I had ideas.

“He’s like ‘OK.’ So then I asked ‘and who are you? Please tell me about you.’

“He said ‘I’m the CTO at Smilebox.’ My jaw dropped.  I couldn’t believe I was talking to him. I knew their space and I knew that they’d just sold for $40M. He helped co-found it and he was looking for his next project. And he loves sports.

“I went ‘Oh, this is my guy. I got to get him.’

“I spent the next several months winning him over. That meant meeting his parents, his wife, his children. Just like a family.

“We were hashing everything out. In that time also we created document after document – on competitors, go to market, business model, legal process, all of that.  All the grunt work that is really necessary. He left his job at Smilebox to join me full time about a year and a half ago.

“We just started testing the product out in the community. Paul said we can’t build a business off of watch sites. We have to think bigger.”

As I watched Dana, I saw her story come through to the class through her non-verbal skills as much or more than the words she shared. I told her about my experience of her presence.  She laughed and reminded me that she worked for a number of years as a TV reporter. One of the challenges of finding the talent for your new venture is practicing empathetic or deep listening. Researchers share that only 7% of communication is in the words that are spoken, with 38% coming from the way the words are said, and 55% from your facial expressions and posture.

Mikhail take some time to deeply observe the full messages through deep listening. I find it worthwhile to watch video of myself giving presentations and when interviewing others to understand how my full palette of communication channels are working (or not).

Each of us experiences the world in many ways based on our personality, learning style, communication style and on and on. We are a product of our life history. Yet, we have to continually communicate with others. Just as Dana was driven to pursue her idea and communicated in many different ways to find her co-founder, a key part of being an entrepreneur is adjusting your style to others. Being persistent AND flexible is part of the Finding Talent journey.

As Dana shared, finding the key talent AND recruiting them to your venture is a multi-step process where each person gains trust and rapport with the other talent over time.

During a weeklong intensive personal development seminar I encountered Mary Pipher’s “I am from …” poem. The exercise is taken from her book Writing to Change the World.

Mary’s “I am from …” poem is:

I Am From  

I am from Avis and Frank, Agnes and Fred, Glessie May and Mark.

From the Ozark Mountains and the high plains of eastern Colorado, from mountain snowmelt and southern creeks with water moccasins.

I am from oatmeal eaters, gizzard eaters, haggis and raccoon eaters.

I am from craziness, darkness, sensuality, and humor.

From intense do-gooders struggling through ranch winters in the 1920s.

I am from “If you can’t say anything nice about someone, don’t say anything,” and “Pretty is as pretty does” and “Shitmuckelty brown” and “Damn it all to hell.”

I am from no-dancing-or-drinking Methodists, but cards were okay except on Sunday, and from tent-meeting Holy Rollers, from farmers, soldiers, bootleggers, and teachers.

I am from Schwinn girl’s bike, 1950 Mercury two-door, and West Side Story.

From coyotes, baby field mice, chlorinous swimming pools, Milky Way and harvest moon over Nebraska cornfields.

I am from muddy Platte and Republican, from cottonwood and mulberry, tumbleweed and switchgrass, from Willa Cather, Walt Whitman, and Janis Joplin.

My own sweet dance unfolding against a cast of women in aprons and barefoot men in overalls.

The exercise is to do a free write in the form of “I am from …” writing as fast as you can for seven minutes.

Mary’s instructions are:

“Follow a formula with each line beginning with “I am from…” Writing this kind of poem is a way to experiment with identity issues. The poem must include references to food, places, and religion. Give it a try.”

My free writing variant of the “I am from …” poem is:

I am from Marge and Harry, Leigh and Pearl, Grace and Edward

I am from the empire state, the rust belt, the old south, live free or die, and the other Washington

I am from a dog’s breakfast of European ancestry

I am from loving parents who agreed to argue with each other in whispers

I am from a family where my much younger sister has never known me without my bride Jamie

I am from a farm community where planting cabbage skips and picking black cherries was a summer adventure

I am from an age when I could ride my bicycle all over western New York and my parents never had to worry about the crazies

I am from a travelling salesman father by day and an unschooled medical device inventor by night

I am from a stay at home mom who grew up very rich and whose father lost it all in the great depression

I am from the gift of fifty years of knowing and marrying my childhood sweetheart

I am a non-smoker from a Southern University funded by tobacco fortunes

I am from our deep family rivalry of Blue Devils and Tar Heels

I am from the too much travel of a corporate executive who missed so much of being a dad for three great children – Elizabeth, Maggie and John

I am from the gift of two infant granddaughters and their loving parents who allow me to re-experience what I missed as a travelling dad

I am from constant personal generated challenges like learning to fly, Outward Bound and becoming a university faculty member without an advanced degree

I am from the invisible university of Ackoff, Goldratt, Christensen, and Alexander

I am from the highest highs and lowest lows of serial entrepreneuring

I am from the gift of fantastic collaborating colleagues who have given me more than I can ever repay

I am from the solitary meditations of hiking Olympic mountain trails

I am from the poetry of mudlucious E.E. Cummings and the melodious voice of corporate poet David Whyte

I am from the formation of thousands of books

I am from the biodynamics of fine wine growing

I am from the spiritual traditions of a childhood full of Methodists, Baptists, and Presbyterians and a chosen Catholic adult faith

I am from an unhealthy gene pool of parents and grandparents and aunts and uncles who died at early ages

I am from the gifts of perpetual inquiry and an explorer of the world

I am Skip!

Near the beginning of your journey to rapport with your potential partners, the “I am from” poem is a great way for you to share your past in a unique way and set the tone for how you would like your relationship to evolve.

On my journey of learning how to become a better graduate school teacher, I attended Harvey Brightman’s Masters Teaching two day seminar in Atlanta. At the start of the seminar Harvey shared “your students are not like you.” Thanks Harvey, tell me something I don’t already know. As he looked at our skeptical faces, he said again “No, your students are really not like you.”

OK, you’ve got my attention. He then hit me with a curveball “70% of business students are ES (Extravert Sensing) in the Myers-Briggs profile. And 70% of business faculty are IN (Introvert iNtuitive).  The two styles communicate very differently. Most faculty members assume that the students are like them and teach in the same way they like to be taught. The problem is that if you communicate as an IN, then you lose all of the ESs right away. You have to be flexible enough to teach to the ESs, not the INs in the room.”

Sensing people process data with their five senses, so the Extraverted Sensing function allows a person to process life through their experiences. It is the ability to be keen to what is seen, smelled, touched, heard and tasted. It is energized by experience and it is able to live “in the moment.”

Intuitive people process data through impressions, possibilities and meanings, so the Introverted Intuition function allows a person to have a sense about the future. It is the ability to grasp and get a sense of a pattern or plan. Information that is usually hard to understand and dissect is easily processed through Introverted Intuition

The ESs are the doers and want to get moving. As a general rule, they don’t like abstractions. The INs are the visionaries and want to understand the implications of any new topics. The INs are the synthesists.

As Harvey described how to orient teaching materials to better suit the communication and learning styles of the ESs, I remembered Cathy Davidson’s discussions in Now You See It that class projects work best when there is maximal difference in the makeup of the student teams.

Armed with Harvey’s suggestions and my innovations for forming teams through maximal difference (combine Meyers Briggs, Social Styles Inventory, Tolerance for Ambiguity and demographic information), I launched into the new quarter with a revised set of slide decks and a new way for me to form teams. The class projects that quarter were significantly better than in my previous twenty years of teaching project based courses. I was feeling pretty good about my innovation and shared the process and results with my peer faculty members.

Professor Jennifer Turns realized that what I’d independently discovered was similar to what Doug Wilde had researched for fifteen years in the Stanford Engineering School. Doug had fifteen years of research on the success of maximal difference in teams. His metric was on the large difference in the number of national engineering competition prizes his student teams won before and after he used the teamology technique. Doug introduces the impact of melding personalities into teams:

“It has become a generally accepted premise that our world—or at least the technology we use in it— is increasing in complexity. Smart cellphones, touch-screen ATMs, personal robots, labs on a chip— all those things and many more are intended to make our world easier and more fun to negotiate. In general, the easier the devices are for us to use, the more sophisticated they have to be.

“The design of advanced medical devices, autonomous mechanisms, and tomorrow’s technological miracles requires a cumulative knowledge that exceeds a single person’s abilities. So as technology advances, products are increasingly being designed in the commercial world by teams of skilled collaborators. Each team member is chosen to bring a specific range of skills and experience to bear on the mission, and each contributor is essential to a successful outcome.

“But it is not only different types of expertise that people bring to the task. They also have distinct personalities, and different ways of approaching and solving problems. The proper application of those traits can be as important as combined technical knowledge to a team’s success.

“What we are talking about is whether a person is introverted or extraverted, and which mental process one is inclined to use in finding answers to questions: sensing, intuition, thinking, or feeling. Many people may have the initial reaction that some of these characteristics are irrelevant, or perhaps disruptive, to meeting challenges that are primarily technical and scientific.

“Informal studies at Stanford University strongly suggest, however, that all of these personality traits are indeed very relevant to a team’s success. Almost a quarter-century of records of student design teams, mainly in Stanford University’s mechanical engineering design program, indicate that performance improves when a team pays attention to its individual personalities. The basic principle learned, which may apply in corporations as well as universities, is that in the long run teams do better when they are composed of people with the widest possible range of personalities, even though it takes longer for such psychologically diverse teams to achieve smooth communications and good cooperation.

“Before diverse team members can be integrated into a cooperative unit they must not only cultivate an openness to opposing opinions but also recognize the value of exploring a problem from various angles. Sharing personality information about each other facilitates this essential awareness.”

From “Personalities into Teams” by Doug Wilde.

As you get to know your co-founder and other talent that you recruit, it is more than meshing different skills, it is looking for maximal difference in your thinking and behavioral styles.  It is about encouraging and valuing multiple points of view.

Scott Page in The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies asserts that “diversity trumps ability”:

“Reviewers recognized that The Difference explores the pragmatic, bottom-line contributions of diversity. It does so using models and logic, not metaphor. The book’s claims that ‘collective ability equals individual ability plus diversity’ and that ‘diversity trumps ability’ are mathematical truths, not feel-good mantras.

“Diversity, as characterized in the book, means differences in how people see, categorize, understand, and go about improving the world. I should hasten to add that the book’s emphasis on cognitive diversity and the pragmatic benefits of diversity does not deny other dimensions of diversity. Those exist, and they matter. In fact, identity diversity and cognitive diversity often go hand in hand. Two people belonging to different identity groups, or with different life experiences, also tend to acquire diverse cognitive tools.”

As you look for your co-founder and your other launch team members, Dave McClure at 500 Startups recommends a starting team have members who can fill the roles of hacker, hustler, designer and visionary. I add another key role which is the lead customer or growth partner.

Figure 6 Key roles in the new venture

Mack Hanan describes the importance of this lead customer and growth partner:

“How can you grow your business?

“You cannot.

“You can only grow someone else’s business. His business growth will be the source of your growth. By growing, he will force growth back upon you because he will want you to grow him again.

The businesses you can grow have a name. They are called your major customers. Their growth must be the objective of your business.  The capabilities you require to grow them must be your asset base.

Growth requires a partner. A growth partner is a special kind of customer. He is a customer whose costs you can significantly reduce or whose profitable sales volume you can significantly increase. In one or both of these ways, you can improve his profits. This is the basis for his growth. It is also the basis for his contribution to your own growth. As the two of you grow each other, you will become mutually indispensable.

“If you cannot grow a customer, you cannot partner him. You can continue to do business with him, buying and selling, but the maximized profits of growth will elude both of you.  If all your customers are buyers instead of growers, you will be a slow-growth or no-growth business. None of your customers will be growing you because you will not be growing them.”

Read those first three lines again and again.

“How can you grow your business?

“You cannot.

“You can only grow someone else’s business.”

As an entrepreneur, I felt my fortunes were in my hands. Yet, as I reflected on my own experiences and started paying attention to successful businesses, it became obvious that in order to grow I have to grow my customer’s business. It’s not about selling, it’s about growing other businesses.

At Attenex for legal conflict of interest reasons, we were forced to go to market through service provider channel partners. Over the course of five years, we provided marketing and selling expertise to grow our channel partners businesses from a total of $5M in revenue to >$300M. One of our growth partners, FTI Consulting, liked our partnering capabilities and product so much that they bought us for $91M.

The sooner you can locate your lead customer and growth partner the faster your own business will grow.

Most people assume that the UX person (designer and researcher) can be the customer surrogate. However, I’ve found that it is crucially important to view the lead customer as a member of the team and invite them inside the product development bubble. The key to having the lead customer as a team member is to be able to regularly visit the customer’s work environment. Their work site is where the observation action is.

Let’s look at the four key roles of the ideal product development team:

    • Visionary (hustler) – the visionary sees the opportunity and imagines what technology is capable of solving the customer need. In an ideal world, the visionary sees not just a “nice to have” but a “got to have” solution and a business model that makes money quickly. A good visionary will have a big dose of hustler in them – the ability to “engineer exchanges to separate customers from their money (time/attention) willingly by creating, communicating and delivering unique value” (thank you Dan Turner for this definition). As Dan Pink shows in To Sell is Human, the hustling skills can be learned (and most of us are tacitly already “selling” most of our time).
    • Architect – builds the prototype and foundation for the product. While the term of the moment is “hacker,” I prefer someone that can go beyond prototyping and design at scale. They are able to translate the visionary opportunity and designer wireframes or physical prototypes into something that works. An ideal product architect will build at hacker speed and design for scale.
    • User Experience Designer – observes customers and translates the observations into human computer interaction designs and thinks more broadly about the full user experience design. The UX researcher needs to exhibit “beginner mind” and be optimally ignorant while observing customers “in the wild” and in their natural work habitat. A key role of the UX researcher is to See Organizations.
    • Lead Customer – the ideal customer is the manager who has the direct need and the budgetary authority to buy your product or services. They should have the time, expertise and commitment to see the project through. The “got to have” need has to have one or more (preferably all) of the characteristics of increases efficiency, increases effectiveness, increases revenue, and decreases expenses.

It is the responsibility of the Visionary/Hustler to find the lead customer. Visionaries need to go beyond seeing the opportunity and find the customers who can help them create the solution. Once they get the lead customer working with the architect and the UX Designer, the visionary/hustler needs to identify the business model that will not only grow their own business but help the customer grow their business (see Growth Partners).

To help identify good opportunities, the visionary uses a form of “backward chaining” by finding workflows that have a clear valued outcome and then working backwards to the starting point. A really good opportunity will have a decision point which leads to high value and/or a high risk outcome. Inserting a product into a high value or high risk workflow allows you the opportunity for value based pricing. The realization that the eDiscovery market was very high risk and high value allowed us to build a value priced solution with Attenex Patterns.

The Lead Investor is the third piece of your “finding talent” pursuit. Many investors have money that they can provide you. Very few investors have what you really need – the combination of experience, connections to influencers, purchasers and other investors, and an ability to provide tough love or what Vistage calls “carefrontation.”

Just as Dana described her pursuit for her co-founder, you will spend considerable time looking for the right lead investor match.

Marc Allen in Visionary Business describes his process of finding and working with his lead investor – Bernie.

“Can I help you?” I said.

“I don’t know,” he said with a smile. He held out his hand. “My name’s Bernie.”

I shook his hand; his fingers were long and delicate and cool. There was something warm and friendly about the old guy, something that immediately put me at ease.

“I’m Marc.”

“Nice little business you’ve got here.”

“Well, it’s just a beginning, I hope.”

“How long have you been in business?”

“Oh, we’ve had the office about six months, though we’ve been working on it for over a year now no, wait, it’s been almost two years now.” I flushed, a bit embarrassed – where had the time gone?

“I like the way you’ve furnished the office.”

He said it with a smile; I didn’t know if he was kidding or not. The office furniture was a hodgepodge of the cheapest stuff we could find at flea markets and garage sales, with a few leftovers from our apartments thrown in. Our front desk was a sheet of plywood with two-by-fours for legs.

“It’s low cost,” I said.

“That’s what I like about it,” he said. “I’ve seen startups that have put all their money into the furniture. I invested in a company a while ago, and the two owners went out and bought Mercedes and custom-built oak desks. I couldn’t believe it! They even had custom-built bookcases! I told them they needed to spend their money on their business, not on their furniture. They promised me they’d be fine – and they went bankrupt before the year was out. They didn’t invest in the future.”

He looked around the office, then spoke with a sudden vehemence.

“As a start-up, you’ve got to spend wisely. Every bit of capital you’ve got is precious, and you’ve got to use it on the things that’ll make your company grow. And don’t buy a Mercedes until you can easily afford it.”

His story piqued my interest. I didn’t know what to say; there was a pause that felt awkward to me. He simply looked at me, carefully, with that slight smile of his. I felt as if he were assessing something, but I had no idea what.

“Are you looking for an investor?” He said it casually, giving it no more importance than if he was asking me for the time of day.

“Well … we could use some capital…”

“Do you have a business plan?”

“Ah … no, not really. Lots of ideas, and plans of course, but nothing really concrete on paper yet.”

He didn’t waste time getting down to business. “You need a plan,” he said. “I might invest; I might not. You don’t know me from Adam I could be a weirdo off the street who’s conning you for a free cup of coffee.” He said it with his enigmatic smile. He could have been speaking the truth I had no idea.

“But it doesn’t matter. If all I do is encourage you to get started on a plan, my little visit here will have been worth your time. You need a solid, well-written business plan before any investor will take you seriously. Every company needs a plan, whether they need investors or not. A business without a plan is like a ship without a course. You just wander around aimlessly, without reaching any destination, because you haven’t charted out the course necessary to get anywhere. You haven’t even determined your destination.

“Your plan doesn’t have to be long and involved; it doesn’t have to be complex. But it has to be clear, to you and to anyone else who’s interested.”

Marc Allen. Visionary Business: An Entrepreneur’s Guide to Success (Kindle Locations 92-97).

While you continue to conceive your new venture and flip your perspective, make sure you spend equal efforts on finding the talent you need to nurture your newborn to the infant and toddler stage.

The tendency for young entrepreneurs is to work with people who are just like you. A great startup seeks to maximize the diversity of its team.

Finding talent is VALUING DIFFERENCES.

Yours in entrepreneuring,

Skip Walter

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