Entrepreneurship Visualized OR This Is How You Make Big Things Happen

Post by Mavi Kocaeli.

Of Puppies and Men

By now most of you have heard about GoDaddy's #Puppygate controversy this week. It was quite something to experience from inside, and see how the right culture can make a huge difference in how you react to mistakes. In fact, it was quite a throwback to an older blog post I had made on this very same topic. So, instead of finger pointing and rolling heads, the GoDaddy team listened, regrouped, and decided on a set of constructive next steps starting with a statement by our CEO Blake Irving within hours on the same day. 

Also, I am personally happy that in the process, many people who didn't know much about the plight of some puppies got a much better understanding of the realities involved with breeding as pointed out by this animal advocate on Huffington Post. 

Now let's see what tomorrow has in store for Superbowl and its advertisers! 

May the nimblest team with the right culture towards mistakes and experimentation win!!! 

P.S. Learn how to draw the above puppy here! Share your doodles and comments.

Can your startup be data-driven and proactive at the same time?

In the startup world, we have come to appreciate the power of empirical evidence, A/B tests and data-driven decision making. We strongly expect (even outright assume) that our startup founders, leaders and decision makers ground their leadership decisions on hard, solid data (as opposed to personal whims, dreams or anecdotal tales). At the same time, being proactive has always been a prized leadership skill. But if we define "being proactive" as the ability to address a problem or opportunity before there is data about that problem or opportunity, it seems irrational to demand from someone to be proactive and data driven at the same time!

I was confronted with this dilemma last week while discussing the implications of a new feature release with a product team. The aforementioned release would introduce some changes that could potentially make a small percentage of the existing user base of the product unhappy. But no one really knew the size or the extent of unhappiness caused here. Should the product team be proactive and try to fix the problem by delaying the launch, or instead, be agile and launch immediately, only to react to problems if and when they arise afterwards? What if one hour after the release, one user voices very strong dissatisfaction with the release. Do you roll back the release or wait until you receive complaints from at least x% of your users before you decide to do something about it?

I think there are 2 keys to resolving this dilemma in any organizational setting: (1) Clear Product Vision, and (2) Personal Experience. A clear product vision in the organization enables everyone involved to make proactive decisions by prioritizing those decisions against the furtherance of that overarching vision. If the organizational product vision is to provide the "best customer service in ecommerce", for instance, then the decision on whether or not to argue over a customer's desire to return a merchandise can be easily made without having to make elaborate calculations about the impact of the decision. Personal experience, on the other hand, enables the decision maker to spot trends early on and extrapolate inferences from limited data sets that may not, in and of themselves, be statistically significant.

So it seems quite important for the leadership in a startup to recognize the inherent dilemma between data-driven decision making and proactive leadership and to take steps to ensure that there is a clear product vision driving the organization forward, while at the same time leveraging prior experience of team members, advisers or consultants in making inferences from past data.

(Photo Credit: livescience)

Get the QUESTION right

I started this post to share some reflections on a classic Depeche Mode song (Get the Balance Right) and how it says a lot about entrepreneurship in its quirky satirical way, but my (evidently unbalanced) subconscious took me back to a startup Board interaction I had recently witnessed. So now I am compelled to share that story instead:

I painfully saw how an entrepreneur who had obviously spent many days of his invaluable startup time researching an answer to a prior Board request get slammed by a Board member for doing so.  This is not because the data the entrepreneur had painstakingly uncovered was bad, statistically insignificant or irrelevant, but because the data was ANSWERING THE WRONG QUESTION.

As entrepreneurs we face a million questions a day that cannot wait to be answered. Answering each one takes time and effort away from answering the others, and in may times, raises even more questions. It is imperative that we truly understand the initial question we are trying to answer before spending efforts to answer it.

Here is a process I would follow to see if you've got the question right:

1. Repeat the question out loud (even if it is you)
2. Imagine the best and worst answers to the question
3. Would the answer have any actionable implications?
4. If not, ask the inquiror about purpose of question

Repeat steps above until everyone believes there is a question worth answering with a clear, actionable purpose that it achieves

This may seem like a lot to do, but it is a lot less effort than the wasted efforts spent on answering the wrong question (not to mention the demoralizing prospect upon finding out).

So, here is to getting the questions right!

Top 10 Ways To Scare Startup Lawyers (+VCs + Acquirors)

As I was preparing for my presentation for Founder Institute yesterday, I compiled this list over a few chuckles. Hope you also enjoy it :) 

1. Do all your legal work through DIY online forms (from formation to option grants and key contracts)
2. Get a personal injury lawyer to do your patent and trademark filings, cheaply.
3. Don't read anything about basic startup law, especially disclosure obligations, fiduciary obligations, and stock pricing rules.
4. Forget about IP strategy. If anyone asks about your views on trade secrets, talk about NAFTA!
5. Ignore regulations in your industry (especially for healthcare, life sciences, financial and legal startups)
6. Burn/shred/ignore threat letters ("nastygrams") by former employers, co-founders, contractors, users, competitors, etc.
7. Ignore all user feedback on product, from support inquiries to social media and BBB postings
8. Miss your 83(b) 30-day filing deadlines
9. If your Board forgets to grant options, go back and re-do it after the fact
10. Send an email to everyone on your contact list asking for investment in your startup

If any of the above sounds remotely like something you may have considered doing, please, please, please don't do it! You are in desperate need of immediate help, so talk to someone who knows a bit about startup law today.

Don't Waste A Mistake!

Something that a lot of good parents know is that you gotta let your kids make mistakes. In fact, that's the only way they can learn and grow as confirmed by years of research in developmental psychology (see, e.g., Remember, Mistakes are for Learning).  It's no different for adults either. Nonetheless, when we as entrerpeneurs are in the midst of startup activity, with all the confidence, optimism and forward-looking stamina in the world, we tend to try to brush the mistakes aside (if not under a rug) and move on. Who's got time for all that when you are trying to disrupt the course of mankind?

Problem is, without learning from mistakes we are bound to... you know the rest. So, how do we reconcile the desire to rapidly move forward while also learning from mistakes?

The magic solution to this dilemma is in that elusive notion of "startup culture" that I have been referring to many times in this blog. If your culture is one in which mistakes are punished and viewed as shameful and reflective of your worth as a team member, or worse, human being, good luck to you. You will be chasing your tail to infinity.

On the other hand, a culture that welcomes mistakes as opportunities to learn and grow from tends to be one in which not only innovative ideas find roots, but also find the optimal path(s) to grow among the many good and bad possibilities. Our attitude towards mistakes is what determines our ability to learn from them. Again, there is ample research data to confirm these in case you are interested (see, e.g.,  )

Here is an excerpt from Better by Mistake: The Unexpected Benefits of Being Wrong by Alina Tugend that captures some components of a productive, healthy attitude towards mistakes as applicable to parenting as it is to running a startup:

There are no simple fixes, but there are ways all of us can shift our thinking about mistakes. Starting with our children, we can emphasize effort and deemphasize results. We can appreciate that we -- and they -- can't be perfect, nor is it a goal we should aim for. We should strive to do our best, but if the prize is ever-elusive perfection, then the fear of failure will too often overshadow the willingness to experiment, take risks and challenge ourselves. We should be careful of the contradictory message that it's all right to make mistakes but not where it counts...

Assuming you have bought into the idea that it is better to learn from mistakes than to shove them under the rug, here are some practical steps you can take in that direction when encountering a mistake (be it a bug in your release, catching spelling errors in your expensive ad campaign, misplacing an important document, etc):

1. Always be grateful when a mistake is found. Catching it later would have been worse at the least.
2. Express your gratitude and make sure your body language confirms that.
3. Don't focus on who is responsible, but for what went wrong.
4. Shed light on the situation in a collaborative, problem solving session focused on learning
5. Brainstorm on ways to catch that kind of mistake earlier in the future
6. Focus on learnings and action plan moving forward

Some other quick, noteworthy readings on this topic include:

Fred Wilson's Don't Let a Good Crisis Go to Waste
Jessica Stillman's Don't Let a Good Mistake Go To Waste

How to Hack Your Life Into Flow

To have a productive, enriching and fulfilling life, many psychologists (as well as coaches, gurus, athletes, performers, ...) recommend incorporating as much "flow activities" into your life as possible. Flow activities are basically those in which you immerse yourself willingly and totally, and emerge from them with a continued sense of achievement (e.g., learning an instrument or new language).

To find flow in your hobbies is just a preview of what is possible. The basic concepts of flow can be (and for your sake, should be) extended to our personal as well as professional life. But how do we do that? To me, it is all about our personal approach and perspective (Weltanschauung) on life. In fact, the answer seems to be hiding in plain view, at the intersection of two questions about the most ancient human mental and physical activities:

1) Is life more like a game of chess (predictable, deterministic) or backgammon (where randomness and skill play off of each other)?

2) Is life more like a marathon (where endurance reigns supreme) or a sprint (where episodic bursts of energy need to be followed by periods of rest and rejuvenation)?

My bias and response to these questions is obvious from the diagram above (inspired by weekend conversation with a new and cherished friend, Jerzy).

What do you think? Please share your insights.

The Startup of You

Anyone interested in having a fulfilling career ought to read The Startup of You by Reid Hoffman, one of Silicon Valley's exemplary and visionary entrepreneurs behind successes such as Paypal and LinkedIn.  However, if you don't have time to ready the book, take a quick look at the following slides which do a phenomenal job of delivering the key messages in the book.  ENJOY!

Start-up of You, Visual Summary from Reid Hoffman

Yup, Culture Is Usually the Real Culprit!

It has already been a great year so far.  Many blessings on the family front have kept pace with new intellectual pursuits and personal growth opportunities, all resulting in a flurry of 24/7 excitement and activity around my neck of the woods.

Amongst all that excitement, I still couldn't help but take special personal delight in reading Brad Garlinghouse's recent post on LinkedIn, "What I got wrong in the Peanut Butter Manifesto". Brad, a visionary ex-Yahoo executive wrote the now-legendary "Peanut Butter Manifesto" six years ago, a leaked internal memo in which he pointed out "lack of focus, accountability and decisiveness" as Yahoo's critical problems at that point. He aptly prophesied Yahoo's talent exodus and steady subsequent decline in relevance in the world (until Marissa Mayer).

Now, with the benefit of hindsight and reflecting on his role as the chief executive of YouSendIt, Brad has a revised perspective. Namely, he is now convinced that the problems he pointed at Yahoo were mostly symptoms of a much deeper ailment, one that we could summarize as lack of an entrepreneurial culture:

[Yahoo's] core culture no longer encouraged and celebrated innovation with the same zest and ardent ambition to change the world—too often this had been displaced by half-hearted maintenance of the status quo.

...Great products don’t come out of thin air. They are an outcome of environments where innovation can thrive and talented people are encouraged to be bold.

Sure, one-hit wonders can happen anywhere, but companies that stand the test of time all recognize a fundamental truth: great people build great products and great people gravitate towards great company cultures. The startup culture that Steve Jobs created at Apple to transform a declining computer manufacturer into the creator of era-defining products is an obvious example.

...If a business has to be told that it needs more focus, accountability and decisiveness, there is a bigger problem at hand. Truly successful businesses encourage these qualities innately by creating and fostering a culture that inspires each individual to perform at their peak and rewards passion and results without peanut buttering the end of year bonus.

As I had previously written, the right culture within your organization serves as a success accelerant. The existence of an innovative entreprepeneurial culture is as electrifyingly palpable as its lack is stultifying and stale. But it does not come about by accident. It requires deliberate, relentless acts by the founding team. And it leaves its fingerprint throughout the organization, from the arrangement of desks, to employment policies, perks and benefits, allowed play time, hours worked, mission statement, and even the actual product(s) produced.

As founders, what are some of the things you do to maintain the entrepeneurial culture within your startup? How has that culture helped you achieve your goals?
 

Bike Like An Entrepreneur

 Assuming you know how to bike, can you imagine learning to do so by reading some books, watching some movies, and listening to a bunch of lectures by some of the most prominent bikers of the time? Exactly! You cannot learn how to bike unless you jump on a bike with some training wheels and then over time start taking off those training wheels.

The same is true of entrepreneurship. Entrepreneurship is a skill, and skills are acquired through practice. There is simply no shortcut around it. Desiring a shortcut, in fact, would mean you are missing the whole point. It is like wanting to know how to ride a bike without having to ride a bike.

And for those of you who already know how to ride a bike, don't be overconfident about your skills. There is still a lot all of us can learn as the below psychology experiment which I just failed demonstrates (excerpt and photos are from May 9, 2012 YANSS Blog):

Take a look at those bicycles at the top of this post. Which one would you say is the most accurate portrayal of a real bike? Psychologist Rebecca Lawson once put together a study that revealed even though most people are very familiar with bicycles and know how to ride them, they can’t draw one to save their lives, and they can’t even pick a proper one out of a lineup. Despite this, most people rate their knowledge of how a bicycle works as being very good. Remember that when someone claims to understand something a bit more complicated, like a sub-prime mortgage. (This is a picture of a real bicycle.)

An Ode to the Valley

I loved reading Justin Rosenstein's inspirational, heart-felt post Do Great Things on TechCrunch this week. It talks to the same "Death of Big Ideas" phenomenon I blogged about after visiting SXSW Conference last year, and makes a powerful case for why the pursuit of Big Ideas by us, the privileged members of the Valley tech community, is a moral imperative.

You must read Justin's piece in its entirety, but as a preview here are some of my favorite quotations from it:

Technology, community, and capitalism combine to make Silicon Valley the potential epicenter of vast positive change. 


And with increasingly severe threats to our survival — rapid climate change, an unstable international economy, and unsustainable energy consumption — it is more important than ever that we... change the world, foster happiness and alleviate suffering, for us and our fellow beings.

[I]n the face of threats to humanity’s future on the one hand and the extraordinary potential of mankind on the other, at some point we must ask: are we capable of more?

Life is short, youth is finite, and opportunities endless. Have you found the intersection of your passion and the potential for world-shaping positive impact? 

Don’t lose the fire you started with. If you’re going to devote the best years of your life to your work, have enough love for yourself and the world around you to work on something that matters to you deeply... in order to do great things, we must attempt great things.

Why Are Kids Losing Interest in Entrepreneurship?

As you can judge by its title, this Forbes article posted more than 2 months ago is quite troubling: Kids Lose Interest in Entrepreneurship as They Get Older. In this article, Forbes peeled back the onion on an otherwise rosy 2011 Gallup poll on entrepreneurship to find that

While 65 percent of fifth and sixth graders plan to start a business, only 34 percent of high school kids do. (see graph below)

Thus, somehow as a country we lose 50% of our total entrepreneur population in middle school! And what troubles me even more is the lack of any substantive or serious discussion on this (critical) topic by any politician or educators.

What is amiss?

The Forbes article takes a stab at a response:

For insight into why older kids are less likely than younger ones to plan to start businesses, I turned to my resident expert on what kids think – my fourth grade daughter Hannah.  Hannah’s explanation was that kids learn about alternatives to an entrepreneurial career as they get older.  As kids become interested in other jobs, the share that plans to start a business declines.

But with all due respect to the author's fourth grade daughter, this does not seem to get at the heart of the issue. In my own childhood experience and that of most toddlers, the various white collar and blue collar professions are the first "jobs" that kids get exposed to: Firefighter, Police, Doctor, Nurse, Mechanic, Pilot, Flight Attendant, Captain, Cashier, Factory Worker (especially if chocolate is involved), Factory Manager, Actor, Actress, Ballerina, Athlete, Teacher, etc. Instead, what I think is the culprit here is the fear of failure that a lot of educators instill in children that turns otherwise adventurous souls into scared puppies.

It has been a truism for a long time that small businesses and entrepreneurs are the engine of growth of our economy. Yet, it seems that somehow our primary education system systematically manages to kill the very engine of growth we are trying to fuel. What do you think? Can we do a course correction? Any and all solutions are welcome!

It's the Semantics, Stupid!

A Matter of Semantics

 I have to take a deep breath whenever someone brushes aside an argument as one over mere "semantics", as if there is a "reality" out there unperturbed by our linguistic filters. After all, "Why argue over words?" goes the common adage! And although that kind of attitude may temporarily get us out of a heated argument and allow the parties to save face, cool off, and part amicably, it is completely counter-productive when it comes to making one of the most important decisions about your startup, which is formulating its strategic positioning.

Why Strategic Positioning Matters
Coming up with the right positioning for your startup is at least half the battle (if not most of it)! For one, I have been involved with several startups where a change in that elusive positioning statement was the single most important contributor to its ultimate success or demise.

If you think I am exaggerating, monitor your own gut reaction to the following positioning statements: "to help people find the most relevant websites for their search queries" versus "to organize the world's information and make it universally accessible and useful". Do you think Google would have been as successful in building a world-class team with the former statement, even though semantically they are basically referring to the same underlying algorithm (aka, PageRank)? Or would you feel the same about a company that aspires to be "the best website creation tool" versus one that aspires to be "the world's leading tool for small businesses to get online and grow their business", despite having the same technology? In fact, at Webs, where we made that exact change in our mission statement 18 months ago, we set in motion a positively reinforcing set of events that led to the successful exit of the company last month.

The Critical Role of Words
As the examples above illustrate, when it comes the positioning statement every word counts, as does the emotions they evoke individually and in combination with the other words in that statement. Choose those words carefully as each evokes a different mental state (e.g., "male sibling" evokes  very different feelings from "brother", despite referring to the same person).

Marketers are fully aware of this and spend endless hours on crafting the right slogan(s) and testing them against the audience. You can run your own experiments online by spending a few dollars on some Google ads and comparing variants of saying the same thing; can be quite fun!

When taken seriously, coming up with the right positioning statement by choosing the right set of words is not a trivial task; but once you get that single statement right you will see how much easier it is to recruit, raise money, motivate your team, and even set product development priorities.

Products "R" Features

As a freshly minted Associate at a venture capital firm in early 2000's, I recall that one of my criteria for evaluating investment opportunities was figuring out (with analytic precision, of course) whether a particular startup was really a "product" or a "feature"... Turns out that was a totally futile (if not counterproductive) exercise!

So many of today's über-successful startups in fact are nothing more than features. Google started out as a feature inside a portal (Yahoo) and who knows, may end up being a feature inside a social network or mobile device 5 or 10 years from now. And look at all these neat features on your smart phone called Apps! Wouldn't you have loved to invest in some of the popular ones, like Angry Birds?

I think the traditional problem with investing in "feature" companies is the concern that a "product" company in that industry, with its seemingly infinite resources, can one day easily roll out that feature and crush that "feature" company. Sort of like how Apple crushed (wink, wink, nudge, nudge) Siri to the tune of over $200 million and Google crushed YouTube for $1.7 billion...

Suffice it to say, lots of great VC investments can be made in things that may be considered mere features today, but will end up being far more revolutionary and game-changing than many products in the market.  In the long run, we will all be dead and all products become features anyway!

Beware of "Happy Talk"

Nothing scares me more than Happy Talk, even on Halloween. We've all had our encounters with it. You know Happy Talk as soon as you hear it. And it makes our skin crawl...


It usually starts with "Things are going great! Best times ever! Tons of traction! Gods are smiling upon us!" and ends on similar upbeat notes "Couldn't ask for more! Just tryin' to keep up!" You catch my drift... SPOOKY!

Now, I am all for enthusiasm, positivity, and faith even in the face of severest hardships. Every entrepreneur needs to have those elements as a part of their M.O. or sooner or later will give up entrepreneurship for at least a steady income (if not peace of mind). However, it is one thing to be positive, and completely another thing to lull yourself into thinking that things are positive by ignoring the negative.

The danger with Happy Talk is our mental predisposition towards what psychologists broadly label as cognitive dissonance, the tendency of our brains to interpret reality only in the way that fits our thoughts and attitudes about it. Confirmation bias is another name for it. There are literally thousands of experiments that support this point, and they are all actually quite fun to read. For example:

• An Ohio State study in 2009 showed people spend 36% more time reading an essay if that essay aligns with their opinions.

• Another study at Ohio State in 2009 showed subjects clips of “The Colbert Report,” and people who considered themselves politically conservative consistently reported “Colbert only pretends to be joking and genuinely meant what he said."

So, the same mental processes kick into gear once you engage in Happy Talk. You start drinking your own Cool Aid. You start ignoring all those little data points that don't fit the overall positive picture you are painting. And you know what happens after that...

So, next time you catch yourself engaging in such spooky activities, take a moment and reflect on whether your attitude really matches the data. That may save the day for you!

Happy Halloween!

Steve Jobs: The Founder Archetype

I started this post with a list of my top 10 favorite things about Steve Jobs, but soon realized that any such attempt is futile at best. As the Da Vinci of our time, Steve Jobs' accomplishments were not limited to a set of inventions, principles, or theories. They spanned multiple disciplines (comp sci and art, for example), multiple decades (starting with the 80's, remember the original Mac?), and will have far reaching implications into the future (wearable computing, for instance).

But the one thing that will make him forever immortal, IMHO, is the fact that he has established himself as the "Founder Archetype" for as long as entrepreneurship will exist. His passion, ambition, perseverance, dedication and determination will be that which all founders will be judged by and compared against. He has truly upped the game for all of us; and that maybe his greatest legacy!

P.S. For some inspiration on how others are preparing themselves for this challenge, you may want to read and follow #LiveLikeSteve

Chamath's Golden Rule!

Starting with my first topical post on this blog, I have been praising the advantages of a high integrity culture as the foundation of a sustainable business. Yesterday's leaked email from investor Chamath Palihapitiya to Airbnb CEO, wherein he provides an eloquent reason for not wanting to participate in a financing round that does not pass his integrity test, is a great reminder to all founders and executives of the importance to stay vigilant about preserving a culture of integrity in their startups. I confess that I don't know much about Airbnb's culture, but based on some of their past notoriety in the press (see one thread on TechCrunch here), I can see how small, incremental compromises in integrity may have led to this point, and hopefully Chamath's email and the attention it has raised to this matter can be a turning point for the company.

Here is my favorite paragraph from Chamath's email, which provides solid practical advice on how to preserve integrity within your organization:

Treat your employees the same as you’d treat yourself. Do things that you will be proud of and can defend to anyone including your Board, employees, prospective hires etc. In such a competitive hiring market, you are competing with not just your obvious competitors, but also any successful tech company who is also looking for great talent. A principle that treats your employees as well as you’d treat yourself is a huge strategy for differentiation, retention and long term happiness of the exact types of people you will need to be successful. In contrast, if you are viewed as self-dealing and shady, it will only hurt your long term prospects…

The highlighted first sentence above is what I would like to call "Chamath's Golden Rule for Management", which is a great modern application of the ancient Golden Rule.

I recall that as I a lawyer I used to advise my clients against doing something they would hate to see on the cover of WSJ. Airbnb founders may find themselves in that uncomfortable position on Monday!

P.S. As full disclosure, Chamath is a good friend, personal hero, and former investor in my last startup Jaxtr, via the Mayfield Fund.

Don't Trap Your Customers!

For some reason, for years traditional marketers were convinced that consumers need to be herded/forced into making the marketer's desired choice, rather than letting the consumer make an informed decision. As an obvious example, think of claustrophobic setting in pre-Bellagio Casino's, where you could look for miles and not see an exit door! For some reason, it was believed that the less the gamblers saw the possibility of an exit, the longer they would sit at the cramped gambling tables. Not sure how they may have A/B tested that hypothesis, but perhaps they were using sheep rather than people in their experiments?

And alas, this kind of thinking found its followers in the online marketing world as well. I am sure you have all had the unpleasant experience of visiting a website where the options you were looking for were more or less hidden and you felt tricked into blasting an invite to all your friends or doing something else that would evoke an "Oh-My-God-What-Did-I-Just-Do" reaction. But the days of such online shananigans disguised as intelligent marketing may soon be over.

Experiments are starting to reveal that creating a comfortable and pleasant environment for customers leads to higher expenditure by them! Jonah Lehrer recently covered one study in his aptly titled post, Why Being Relaxed Makes Us Spend More Money. I highly recommend that UI/UX designers read that post and the studies referenced therein before becoming too aggressive in creating restrictive funnels that force users to take certain online actions.

Like it or not, "culture" determines your priorities!

I wrote previously on the virtues of culture as a startup accelerant (by reducing organizational inefficiencies, culture paves the path for exponential growth). However, I left out a crucial effect that culture has on shaping the startup's actual output: namely, that the startup culture manifests itself in the products & services the startup creates.

Here is how:

The entrepreneurial process is the result of making prioritized decisions based on a seemingly infinite set of tasks. Anyone who has spent time at a startup is familiar with the overwhelming (and ever increasing) amount of tasks that can only be tackled in a prioritized fashion in order to make any real progress. The Product Managers are especially familiar with this, as they typically own this process as far as the startup's actual product features and specifications are concerned. They are the stewards of an iterative process that starts with the collection and collation of inputs from various stakeholders inside and outside the organization (including employees and end users), and ending with assignment of the most important tasks to developers and engineers for the upcoming sprint/release cycle.

The most important part of this iterative process, however, is everything that happens in between: Namely, the assignment of prirorities to the requests. And that is exactly where culture comes in since much of the priorities are driven based on the cultural underpinnings (i.e., the "gut instincts" and "feelings") of the organization. Tasks that "feel" important and critical find their way to the top of the list, and those that don't pass the gut check, keep getting relegated to the bottom of the backlog.

To the analytically inclined amongst us, however, the above may sound too fuzzy and perhaps even irrational, as they may object that a responsible Product Manager should primarily focus on the impact of various tasks on the key performance indicators or core metrics of the Product, and leave all emotions and feelings aside. However, even though I firmly believe in the importance of metrics, I have come to view that kind of rigorous analytics in product development as more or less an illusion.

There are many reasons that metrics alone cannot lead to real product decisions: First, the immediate impact of most development tasks is best an estimation and not known prior to release; second, there is usually more than one metric that is impacted by any given product change, and most organizations don't have a strict formula for how to trade off various metrics against each other; third, long-term impact of most product changes are inherently unknown; forth, most startups do not have a formula on how to weigh long term effects against short term effects; and so on and so forth. Product decision makers are dealing with very complex, multivariate issues, things far beyond the capability of the human brain. There is mounting evidence from experimental psychology that it is exactly situations like this where our emotional brain kicks into gear, and helps us make decisions based on our values (for a highly engaging and informative survey of the latest research in this area, I encourage you to read How We Decide by Jonah Lehrer).

And that's exactly where the startup culture makes its imprint on what it produces.

For instance, if "user experience" is important to the culture, then things that help the user's experience will become prioritized, at times even at the cost of some core metrics such as revenue or profits. On the other hand, if "fast growth" is in the startup DNA, then you will see tradeoffs that put at risk user experience and even long term financial viability of the organization.

This is why the role of founders as the guardians of culture is so critical to the success of startups!

Are you "Michael Jordan playing Baseball"?

Much more often than I like to see, I come across entrepreneurs who remind me of Jordan retiring from basketball to try his hand at baseball in 1994 (speculations abound as to why, but nonetheless he had the good sense to pivot back to basketball just after one miserable baseball season).

These days, with the consumer Internet momentum in full swing, I see first-time and repeat entrepreneurs from many fields (including law, life sciences, and enterprise software) pitching their Powerpoints and raising money for their first consumer Internet startup. And although I am usually the optimist and last guy to discourage anyone from a path of entrepreneurship, I can't help but be quite disappointed by this crop of entrepreneurs.

My disappointment stems primarily from the fact that in this new gold rush, Silicon Valley's greatest asset (intellectual capital) is wasted on futile reinventions of the consumer Internet wheel. To the uninitiated, building this shiny "wheel" may seem as simple as outsourcing a website and hooking it up with a set of "spokes" consisting of a database, Google Analytics, and a Facebook Connect integration to boot. But those who have been through the ordeal before, know better.

For starters, you need an understanding and appreciation of what it means to deliver a virtual consumer user experience that delights and transforms casual visitors to engaged users who would return and promote your services via repeated interactions. You need an appreciation of the delicate interplay between your technology platform and analytics, traffic and rapid iteration (aka A/B testing). And you need to understand how critical time is to everything you do. Which means, you cannot afford to start from ground zero and therefore, need to be able to recruit expert UI & UX designers, analysts, and developers that can deliver and improve what your users need faster than competition.

Is that impossible? Of course not, but as a first-time consumer Internet entrepreneur, your chances are pretty slim unless you bring in a co-founder that has done this in the past. Plus, you will need to recruit mentors, advisors and Board members that can shed light for you on the areas that you are lacking.

In summary, my advice to first-time entrepreneurs in consumer Internet (as well as any other field) is from the onset to

(1) talk to industry experts to map out the areas of competence that you need in-house to be successful,
(2) take an honest look at the founding team to assess which areas of competence you are lacking, and
(3) recruit co-founders/advisors/mentors/board members to fill in those holes.

Although entrepreneurship is a noble endeavor, doing it without adequate preparation is socially wasteful and irresponsible.