Archive for the ‘mistakes’ tag
Most of the truly miserable people you meet in life aren’t stupid or unambitious, traits we’ve been taught to associate with an unhappy life. Rather, the unhappiest people I know are also some of the smartest and hardest-working. But they’re also martyrs, a dangerous and under-appreciated workplace pathology.
Approximately every tenth highly intelligent person I meet is a martyr. Martyrs have an addiction to making themselves miserable for the sake of others. It’s not necessary for this misery to be for anyone’s benefit — it simply needs to be understood by the martyr that they are performing a sacrifice at the feet of another person or group.
Paul Graham’s How to Lose Time and Money makes a great corollary point — specifically, that driven people rarely waste time by sitting on the couch watching TV, but by doing useless work. I’d like to take that a step further. A number of smart people are Martyrs, who draw their willpower from Sisyphean quests, enjoying difficult and painful situations for the sake of the pain endured. Their equivalent of praise is the feeling of deep guilt they can inspire in others.
Martyrdom is chronic and can impact someone’s strategic decisions. I’ve seen martyrs join organizations doomed to fail simply to have a steady stream of martyr-ready situations. Playing the martyr role is addictive, and situations in which a martryr can work extreme hours, take the blame for far-reaching problems, and prostrate themselves at the feet of bosses are their crack cocaine.
Martyrs paralyze organizations. I’ve written about the huge influence guilt has on communication, but it deserves restating. The guilt that martyrs inspire among their peers and superiors destroy organizational structure and productivity. When a colleague is going to fall on any sword within eyesight, there’s a natural disincentive within a team to hide the swords — that is, to cover up the issues and problems that arise in any organization. Martyrs inspire guilt, and guilt is a terrible emotion to inspire in a group. Guilt saps enthusiasm, sweeps problems under the rug and eliminates any willingness to take risks.
Everyone avoids the dull, the lazy and the untrustworthy. By their very definition, martyrs are none of these things — yet they should be avoided to the same degree. Martyrdom is at best saddening and at worst contagious and destructive.
I made a lot of mistakes while running GoCrossCampus. Lots of people ask me questions that more or less amount to “If you could have done X differently, what would you have done?”
I always answer these questions sincerely. “Oh, I would’ve done A rather than B and C rather than D” or something like that. But in the back of my mind I know that counterfactuals make for odd teachers. That is, the information I have about the specific problem has obviously changed — and the more interesting lessons come from shifts in my decision-making methodology.
These “If you could have done X differently” questions are essentially asking “If you knew back then what you know now, how would the decision you made have changed?” Interesting, yes. But the information that led to the decision — for instance, my beliefs on the marketability of a product or the right way to scale an app — isn’t that useful. Rather, the juicy bits are the framework through which I took the information and produced an actionable plan. Consider the following question:
If you could do it again, how would you structure your financing round?
I would’ve clearly taken a priced round rather than a convertible note given the difficulty we had in closing the round.
Given the information I had at the time, I would not have done anything differently. That is, even though my information was wrong, my decision-making methodology was sound.
In other cases, my methodology may have been wrong yet my decisions right — something we in the business call “getting lucky”. But those two replies are answering the question on different levels. One is concerning facts — the who, what, when, where and how of the situation at hand. The other is concerning methodology — given the facts at hand, how did I come to a decision?
When evaluating past decisions, too many entrepreneurs focus on the facts rather than the methodology. Methodology is replicable. The mental algorithms I use to convert data into a decision are used over and over again. Data is all too often ephemeral and unrepeatable, and condemning a decision-making methodology that was plagued by bad data is often a quick way to take a step backward (or vice versa, endorsing a poor system that got lucky due to circumstance or poor data.)
Focusing on the methodologies rather than the facts will allow you to see patterns and make better decisions in related but non-identical situations. If I get hit by a car, it would be odd to simply say “Wow, next time I’ll see the car.” Rather, I’m going to make fundamental changes to the way I think about crossing the street — specifically, how I gather information and translate that information into actions. Why should a startup be any different?
I don’t usually like pointing out others’ failures (I prefer to focus on my own), but one particular demo by a startup at this past Tuesday’s New York Tech Meetup is particularly instructive in How to Fail at Presenting to Hackers.
A brief guide to failure, courtesy this demo:
Expect your connections to high profile individuals will build credibility: Exceptions include Richard Stallman, Cory Doctorow and probably Steve Jobs. Don’t rattle off a list of Silicon Valley investors and expect us to be impressed. We’ll just wonder why you’re not showing us a product.
Put the conclusion before the story: It’s fine to say that you’re raking in cash or you have amazing clients, but do it after you show us the product you used to get there. Otherwise the story seems backwards and you seem full of yourself. Explain how something was built from the ground up, gained traction and eventually convinced people with money to buy your product and support you. That’s a story that resonates with hackers.
Ignore the allegiances and perspectives of the audience: This is more of a general presentation rule, but this company couldn’t have blown it worse with a hacker crowd. For instance: if your product has applicability to hiring for both Fortune 500 companies and early-stage startups, don’t show examples of how Fortune 500 companies can use it to gain leverage over potential employees. You seem to be enabling a corporate culture that your audience is rebelling against.
Send someone who isn’t a cultural fit with the audience: I’m sure your company has hackers. Even an executive CTO or VP of Engineering. Send them, not the business development executive you just recruited out of an investment bank.
Like any audience, presenting to hackers isn’t hard. But just as it wouldn’t be a good idea to wear jeans and Birkenstocks when making a presentation to the board of a Fortune 500 company, pitching a crowd of hackers requires a level of understanding and respect of the group’s culture. Anything less is simply going to waste everyone’s time.
I hate seeing startups make the same mistakes I’ve made. When I see it once, it sucks. When I see it over and over again, it’s worth a blog post.
When I started GoCrossCampus with a few college friends, we set out to build a simple strategy game that could engage any college student with at least a bit of campus pride. I’ll forgo an extended explanation of what GoCrossCampus was (you can check out the link above if you’re curious), but you could think of our intended market as two distinct audiences:
a) Strategy gamers
b) College students
Initially, we were able to capture the union of those groups — large (30%+) percentages of students at Ivy League and tech schools were playing the game. If you had pride in your campus, you played. We also had a big, dedicated group of strategy gamers not associated with any college that played the game because they liked the game.
But at many colleges, we ended up capturing the intersection of those groups. That is, college students with campus pride who also enjoyed playing strategy games. This wasn’t a terribly big group of people, especially for a company that had raised $1.6 million in venture capital. In other words, we ended up capturing the space on the diagram where the two circles intersect rather than any space covered by either circle.
This distinction cost me a company. While the union of the circles — gamers and college kids — was certainly big enough to justify raising venture money, the intersection — college kids who played games — wasn’t even big enough to build a lifestyle business without a radical change in business model.
So how do you know when you are aiming to capture the intersection rather than the union of two groups?
There’s probably no way to tell for sure, but that’s not going to prevent me from throwing a few things down on paper. Here are some questions you might want to ask yourself before committing to a two-audience strategy:
1) Is there a major psychographic disparity between your intended audiences? In woot.com, there isn’t. People who like consumer electronics also like deals. In theNethernet (formerly PMOG)? I’m not sure I see why Steampunk fans also want to play an ultra-casual game. But I don’t have their analytics at hand, so please correct me if I’m incorrectly throwing them under the brass-and-mahogany bus. In short, if it is hard to imagine that there are a lot of people that fit into both your audience categories, perhaps it is best to focus on one or the other.
2) Is my product compelling enough to wholly attract at least one of my targeted audiences on its own merit? GoCrossCampus would’ve succeeded if we had spent a bit more time creating a game that was compelling to strategy gamers on its own merit; that is, if the college rivalries element was just a gimmick to get people to play rather than a necessity.
3) Is “technically savvy” already one of my desired audiences? If it’s not, you better build a damn good UI. Many startups claim that they are going after one particular audience (say, “Soccer moms”), when in fact they are building a product that goes after the intersection of their core audience and “technically savvy people”. And that may be well and good for your beta, but if you’re throwing a third category out there — say, “People with an interest in crafts” or “Gamers”, you may be setting yourself up for a much smaller audience than you are anticipating.
4) If my audiences are X and Y, is there a disdain/revulsion/annoyance towards X by Y? If so, run, do not walk, to the nearest exit. College students with bucketfuls school pride tend to think poorly of gamers. It did not bode well for GXC.
That’s all for now. I’m sure this may warrant a follow-up post at some point, since I think it is one of the most under-appreciated mistakes that startups make.
We generally don’t think enough about how we should live as opposed to the minutiae of our lives. It’s like how many CEOs of startups get caught up in operational details and let their companies slide down a poor strategic path. But post this isn’t just about startups; it’s something I see in almost everyone (including myself).
Let me treat you to a story for a moment. I visited a friend today near Penn Station. I was heading from the 86th street area of Manhattan’s Upper East Side. There are two ways to get to Penn Station from there:
a) Take the M86 bus to Central Park West, then the C train to Penn Station
b) Take the 6 train to 51st Street, then the E train to Penn Station.
On a Sunday morning, either one will take about 35 to 40 minutes. But coming back is a different story — it’ll typically take 25 to 30 minutes. The actual trains and buses go just as fast. So why the difference? Option value.
Individually, C and E trains are fairly rare. But when I’m heading back uptown and waiting at Penn Station, I can take whichever train comes first. I don’t have to commit to a certain path until I have information about which train is coming first. I’ll just take the first one to show up and only then am I committed to a certain path — if a C train comes first, I’ll head across Central Park on the M86. If an E train comes first, I’ll take the 6 uptown.
When I’m heading downtown, I either go into the subway or wait for the bus. When I’m making that choice, I don’t have the same information I do when I’m heading uptown; I don’t know whether the train or bus will come first. I could very well go into the subway tunnel and wait 15 minutes before the next 6 train comes by.
Thus, the 10 minutes I save on average when heading uptown is the value of being able to retain that particular option.
So why am I rambling about the MTA? Because there are a lot of people who don’t understand the value of an option — when in reality, option value likely represents the single most precious asset we have. Especially while we’re under, say, 40.
I don’t know what our economy and culture is going to look like in 20 years any more than I know whether the C train is coming before the E train. I can gather hints — for example, if a lot of Indians and Pakistanis are on the platform, it probably means that we’re due for an E train, which goes through Jackson Heights, Queens — a major south Asian center. But that’s hardly a definitive analysis, and surely not one to base a career on.
Yet I see a bunch of people my age who can’t wait to commit to a path. And I’m not talking about people who have a passion for a particular field. I mean people who just want to have a have a nice job, make a lot of money and meet a nice husband/wife. And I’m possibly as guilty of this as anyone, what with being in the gaming industry since before I got a college degree. But it’s still something I think a lot about, especially when I see people my age self-deprecating their career paths as non-committal. “That’s great!”, I say. “Keep doing that as long as your budget and significant other allows!”
Let’s say born in 1960 wanted to have a high-paying job with limited risk (a common goal, if not among startup founders). The decision for that person would’ve been fairly obvious — become a doctor. At the time, finance was still the wild west, and doctors were at their peak profitability in the mid-80s. Yet had that person started practicing at, say, age 30 in 1990, they would have endured a lifetime of decreasing salaries, higher malpractice insurance and increased risk.
I think the same story can be told for a lot of people who have been sucked into finance over the last 15 years. Finance is hardly becoming a bad job. Neither, after all, is medicine. But it is definitely on the downward slope in terms of compensation, prestige and risk.
So what’s the point? You’ve got to make a decision at some point, right? Well, yes. But it’s probably worthwhile to spend the extra 5 or 10 years figuring out what you love to do rather than just jumping in to something because it is an “obvious” choice with good compensation. Of course, disregard this advice if you know what sectors will be hot when you reach your peak earning potential in 20 years — if you do, you should take the multi-million dollar offers you’re surely now getting from hedge funds. Maybe you’ll end up trading options.