Harnessing Entrepreneurial Manic-Depression: Making the Rollercoaster Work for You

This post really captures what the ride and the graphic, pasted below, hit home.

The crisis of meaning does pass and then the stage of informed optimism begins!

How Does Happiness Co-vary with Age and Why 46 Is a Tough Year

Sep Kamvar and Jonathan Harris are the creators of We Feel Fine. They have built a crawler that indexes the blogosphere to analyze occurrences of the phrases "I feel" and "I am feeling."


Every day, 15,000-20,000 blog posts are indexed and the system extracts, where possible, the authors' gender, age, country, state, and city. The net result is an incredible data set that helps understand the covariance between feelings and age, gender, weather, location, and season.


The analysis on age found the following "major emotional themes as we age.",

"We start simple (11-14), but soon fill up with angst (15-18) and feelings of confinement (19-22), until we leave those behind to go conquer the world (23-26), before gradually trading ambition for balance (27-30), developing an appreciation for our bodies (31-35) and our children (31-35), and evolving a sense of connectedness (36-40), for which we feel grateful (36-40), then happy (41-49), calm (41-49), and finally blessed (50+)."

Their analysis and amazingly cogent summary are truly fascinating. While the site is impressive, the authors also released a book, We Feel Fine: An Almanac of Human Emotion.

The data is increasingly the study of economists, who are looking to move beyond GDP per capita to a more satisfactory measure of human well-being.  The Economist recently published "The U-Bend of Life: Why, beyond middle age, people get happier as they get older."

The Economist study, noted in the graphic above, finds a different relationship between age and emotional well-being. For Arthur Stone, the nadir of life is 46 - this is a global average. A few explanations for the covariance between older people and happiness are listed in the article - the death of ambition, greater acceptance of oneself and setback, not being prone to anger, being more mindful of mortality and hence more present.

Between the two studies, we find that age materially impacts our well-being. While we are all unique, on average there are times in our life, or the lives of loved ones, when we must recognize larger forces at work on our psyche.

We are all familiar with teenage angst and the mid-life crisis, however, we can now see that all chapters in life come with a set of expected feelings and, thankfully, that as we age it will get better!!!

Ad Innovation and the Joy of Product Market Fit

In June 2010, Eric Schmidt noted that future display ads "...would be mini-Web pages. That means they could allow users to watch a video, leave a comment and see real-time content updates..."

The article below highlights how we do exactly that. 

The key is allowing rich media to both morph into app-like ads, while allowing it to scale through a powerful platform.

http://emediavitals.com/content/who-needs-website-enter-nanosite-ad-unit?utm_source=Daily+Buzz&utm_campaign=773c229a16-_nl_DB_12_13_2010

Who needs a website? Enter the nanosite ad unit

Rich media ads continue to evolve, effectively becoming mini-websites in a box.  Tech publisher IDG and developer Widgetbox have teamed to create a new “nanosite” ad unit that can include video, real-time content, social media and other interactive elements.
The Nanosite Ad Unit, announced today, basically turns an ad into a microsite, housing multiple, clickable assets.  A sample unit that IDG and Widgetbox created (shown at right) includes a branded white paper, a video, case studies and editorial content from IDG publications such as CIO. In a press release, the companies claim the nanosite unit “can dramatically increase brand engagement, brand recall and purchase intent relative to traditional display advertising.”
The nanosite unit is the latest in a number of display advertising types that are adding more functionality and interactivity as advertisers seek better ways to engage website visitors and publishers look for ways to boost digital revenues.
Increasingly, these ads blur the lines between branded and editorial content. AOL’s Project Devil, for example, can include a mix of what AOL CEO Tim Armstrong calls “real content.”
For their nanosite offering, IDG and Widgetbox will collaborate on the creative direction for campaigns, design the ad, and provide the underlying technology and metrics for the campaigns, which IDG will sell across its brands, which include Computerworld, CIO and Network World.
“We are providing more value to marketers by delivering innovative ad concepts that provide highly engaging content choices for readers,” Jeremy Rueb, vice president of program development for IDG Strategic Marketing Services, said in a press release.
IDG has emerged as a pacesetter among B2B publishers expanding their custom publishing offerings into full-blown marketing services businesses, in an effort to drive more digital revenues as advertisers embrace “vendor as publisher” models.  

The US$/RMB: China's 16 year trade war and what we should do about it

Ten Years Ago Paul Tudor Jones Had An Acute Case Of Plantar Fasciitis « Dealbreaker: A Wall Street Tabloid – Business News Headlines and Financial Gossip

This article fundamentally changed my view of US-Sino relations. We need to deal with China' currency, unilaterally if need be.

A 30% tax on Chinese imports is not the start of a trade war, but instead of awakening to the pernicious effects of China's currency manipulation on our manufacturing base, employment, and future.

Hear, here, Mr. Jones!

Jeff Immelt on Leadership

The Sunday NY Times ran a very good piece on GE. The article centered on GE's strategy to focus future growth and profits on manufacturing vs. financial services. GE Capital used to deliver 50% of GE's profits, however, the recent financial crises led GE to return to its roots.


The barrier to entry - scale and capital - highlight the strategic value; "heavyweight products that take patience and piles of cash to develop, weigh tons and last for years — next-generation jet engines, power turbines, locomotives, nuclear plants, water-treatment systems, medical-imaging equipment, solar panels and windmills. Mr. Immelt notes, for example, that the cost of a good-sized solar-panel plant, about $70 million, is more than twice the total investment in Google in the six years before it went public in 2004."


The article also touched on his leadership style. I loved this quote. "Leadership by fiat when done in moderation, Mr. Immelt says, can drive change and set a course. “I think that if you run a big company, you’ve got to four or five times a year, just say, ‘Hey team, look, here’s where we’re going,’ ” he says. “If you do it 10 times, nobody wants to work for you. If you do it zero times, you have anarchy.”


We hear all the time about Steve Jobs, perhaps the ultimate rule by fiat leader.  However, I personally believe that strong teams, decentralized decision making, and not top-down central planning lead to better companies and stronger results.


The genius CEO, Steve Jobs, is sui generis. Not a scaleable model to mirror one's company or leadership style after. There is only one Steve Jobs. However, all leaders can hire well, empower their teams, and set strategic direction, while avoiding the micro-management and rule by dictate.

Primal Instincts, How Body Language and Personality Dictate Success

Want to be successful, well-liked, effective? Want to make more money, receive the lion's share of promotions?  Want to raise money?

Well, according to Amy Cuddy of HBS, it is vital that you understand how our primal psyches process personality traits and non-verbal behavior.

The two most critical variables in how people perceive us are warmth and competence. These two traits account for up to 80% of our overall evaluation of people, "i.e., do you feel good or bad about this person."

The article notes, "warmth - does this person feel cold or warm to me? - is the first and most important interpersonal perception. The warm/cold assessment amounts to a reading of the other's intentions, positive or negative. Competence is assayed next: how capable is someone of carrying out those intentions."

We admire warm/competent people, we envy cold/competent people, while we pity warm/incompetent people, and exhibit contempt for cold/incompetent people.

Meanwhile, like dogs, non-verbal postures signal dominance and power, or, conversely, fear and meekness.  Nonverbal postures impact our endocrine system and link stances, gestures, and hormone levels.  The photos below illustrate "power" positions, while the following photos illustrate low-power positions. Hugging your arms close together is akin to the dog with its tail beneath its legs:)

"In all species, postures that are expansive, open, and take up more space are associated with dominance. Postures that are contractive - limbs touching torso, protecting the vital organs - are associated with low power, being at the bottom of the hierarchy."

Examples - she looks at her MBA students and finds, "classroom participation is 50% of the grade. There, women students have a harder time getting airtime, and speak more briefly when called. Women are also more likely to cross their legs and arms, or to lean in: low-power poses. While men raise their hands straight up, women tend to raise them with an elbow bent 90 degrees, commanding less space."

Another example comes from Laksmi Balachandra's research. He looked at 185 venture-capital pitches. His findings? "Changing one's mindset also changes the mindset, and neuroendocrine secretions, of others. The success of VC pitches turns on how comfortable and charismatic you are. The predictors of who actually got money are all about how you present yourself and nothing to do with content. Key variables include - calmness, passion, eye contact, and lack of awkwardness.

Back to warmth...Cuddy finds that we want to cooperate and help warm/competent people...we are rooting for them. However, we tend to resent, envy, and do not help cold/competent people.  Envy drives ambivalence and ambivalence is clearly a hindrance to progress and support.

So - warmth, power postures, calmness, eye contact, passion.

Now you know:)

The 4-Hour Work Week and What I Took Away from Ferris' Book

I recently attended a conference where I received Tim Ferris' book, the 4-Hour Work Week, as a gift.  While much of the book is hyperbole, I found two enduring lessons in the book worth reflecting on further.  The first takeaway is the importance and power of fear.


Perhaps, Mark Twain said it best, "I am an old man and have known many troubles, but most of them never happened."  


What? My reading of the quote and Tim's points on fear is that we often let our brains beat us - fear of the unknown, fear of what might happen, fear of making mistakes, fear of change, fear to realize our dreams....fear is a self-defeating, calcifying presence in all of our lives. We all suffer from insecurities, self-doubt...however, we must recognize that most of the "bad things" that we fret about are figments of our imaginations/stories we tell ourselves. Overcoming fear and conquering self-defeating thoughts is vital to self-realization and achieving a life well-lived.


My other favorite quote regarding fear and overcoming it comes from Teddy R, "

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat."

The second key insight, for me, from the book is reflection and projection. Am I happy/excited about my current direction in life, my job, my current reality?  If yes, then great. If not, then what must I do, what path must I follow, to align my life's work with my life's passions?

Projection?  Tim writes about the importance of taking a good, hard look at your boss. Do you want his/her life? In 15 years, do you want to be the person, live the professional life that they are/do?

If not, change it.

In summary - the book is a shot across the bow. First, are you fears holding you back?  What are you missing in life by letting fear trump growth, experiences, and discovery.  Second, are you sufficiently reflective about the path your life is on? Are you projecting where that path will lead? Do you like what you see? If not, what are you going to do about it?

Widgetbox Mobile: A Bet on Mobile Web Apps

Today, Widgetbox announced the launch of Widgetbox Mobile, a mobile app service that allows businesses of all sizes to easily make and distribute a feature-rich mobile app in minutes.  In addition, we are pleased to announced that Ali Diab, former VP of Product Management at AdMob, joined our board of directors. 

TechCrunch covered the story, click here for article.

Widgetbox Mobile: Build and Deploy Mobile Web Apps for iPhone and Android in Minutes

Widgetbox Mobile delivers the following to customers:

• Mobile App Builder: make a mobile web app in minutes without writing any code; create a custom app for a fraction of the cost and time of traditional native apps.
• Cross-Platform Functionality: create a mobile web app that works on both iPhone and Android devices.
• Widespread Distribution: distribute the app through multiple channels including social media, email, text (SMS), quick response (QR) codes, and your own website. No need for complex and lengthy app store approvals—just quick and easy distribution on the customer's own terms.
• Ripple Live Updates ™: edit an app anytime, any place and push live updates through the cloud-based online service.
• Advanced, Detailed Analytics: detailed insight into how the app is performing to allow customers to continually optimize performance.

Why are we betting on the mobile web?  It is our belief that open standards and browser-based solutions, over time, trump native, client-side applications. While today's mobile web is native-centric and app-centric, the promise of HTML5/web standard technology allows for businesses to development, distribute, and optimize highly engaging mobile apps via URLs, QR codes, and text messages.

Please try out the service and let me know what you think. 

Why Don't More MBAs Go Into Sales?

This post seeks to address an interesting conundrum.

The conundrum? Why do so few MBAs go into sales?

Sales is the lifeblood of any company. CEOs are often picked from the sales ranks (Chambers, Palmissano, Ballmer, Thompson, Morgridge, Apotheker). Scaling revenue helps drive enterprise value and exit outcomes.  Sales management is a discipline that can easily be taught, like marketing, operations, finance. Sales is a career.

And yet, very few MBA programs offer a sales management track, let alone courses dedicated to sales forecasting, pipeline management, strategic selling best practices, quota and sales territory management, compensation best practices.

Why are MBA programs failing to teach the value of sales leadership and the role of sales as a worthy management discipline and career?  At Kellogg, where I graduated in 1999, I cannot remember a single class dedicated to sales, and yet, we took cost accounting, operations, international finance, organizational behavior...

When alums visited Evanston, they always spoke of the value of organizational behavior to their careers.  When I speak to MBAs, I plead with them to go into sales.

Perennially, MBAs go into consulting, investment banking, brand management, and, sadly, business development.  The sales grads are often a null set.

As a CEO, I spend almost all my time selling. Selling my company to recruits, selling our product to customers, selling our equity to investors. The ability to manage a sales process - first meeting to order - and to understand account dynamics (decision makers, sponsors, technical buyers) - is vital.

Moreover, securing product-market fit, a hugely important milestone for any start-up, requires a passion for selling.

I'd love to see some comments that help answer the conundrum, let me start with a few ideas as to why sales falls lower than cost-accounting on the MBA curriculum and lower than investment banking as a career vocation:

• MBAs are risk averse and don't like leveraged (quota) comp models
• MBAs view sales pejoratively as many great sales people are not pedigreed
• MBAs think sales is not strategic

Now, an indictment, why don't MBA programs lead the way here? Where are the courses, the research work, the career placement offices? Why don't business schools teach sales as a discipline?

Would love to hear your thoughts!

When to step on the gas and go for it?

When should you grow the burn rate- add headcount, marketing spend, operating capacity? When should you "go for it?" 

In order to answer the question, let's use the analogy of financial options. Start-ups are very much like financial options. The value of a financial option is a function of two variables, the duration (time to exercise) and the volatility of the underlying security (range of possible values).  Start-ups, therefore, increase in value as a function of extending the time before the cash runs out and being able to define the range of possible outcomes.

An obvious insight is that any CEO would want to maximize the value of both variables. Cash is a finite amount - each dollar spent means you are a dollar closer to running out. Cash is time. Less cash, less time. Less time, less value. Lesson: spend very carefully.

However...the range of outcomes, volatility, requires an answer to the question, "can this be a big company?" Such an answer requires the characterization of market size, revenue potential, strategic value,...  Lesson: spend resources to develop answers to customer demand, market size, financial model, etc.

The art is how much to spend on the latter without unwisely impacting the value of the former. The two variables - volatility and time - therefore can be at odds with each other. The key question is how to balance the two competing variables- preserving capital/cash while also characterizing the opportunity.

When I became CEO of Widgetbox, I was lucky to have significant cash reserves. We did not, however, have a well-understood set of market characteristics - TAM, SAM, financial forecasts, product-market fit, etc.  

We decided that in the face of material uncertainty regarding the "range of possible outcomes" that we would maximize the value of time - ie cash. Widgetbox went through a series of painful headcount reductions. Why headcount? In virtually every start-up, operating expenses are ~70% people. To materially reduce expenses there is really only one lever that matters - you need to reduce heads.

Therefore, "going for it," or not, really means ramping headcount, or not. After we reduced headcount, we more than doubled the amount of time we had before the cash ran out.  The extra time allowed us many cycles to iterate towards a well-defined business model, and, importantly, it also allowed for the serendipity required to get to the all important a-ha moments.

During our period of austerity - very low burn rates- I was often encouraged to increase spending - hire more people, invest more in the business. I was told, quite rightly, that you cannot save your way to a big company. One of my mentors insisted that I "find out quickly" if we had a business and that the "go slow" model would only lead to death by a thousand cuts.  I fought that advice and deep down I knew that to spend money without a clear sense of return would be folly.

The serendipity moment came in July 2009. We were able to pivot our technology to meet the market's demand for display ad innovation. The pivot enabled us to define an addressable market - display ($8bn), a clear customer segment (tier one publishers), a business model (CPM), a go-to-market model (direct sales and service), and a product direction. The uncertainty peeled away to reveal a very well-characterized market. As we reached product-market fit the demand began to outstrip our modest headcount.  Each day, a new deal demanded we work harder and we began to see clear bottlenecks emerge - in sales, service, product -that were limiting our ability to grow.

We were no longer projecting/testing a value prop onto a skeptical market, but rather the market began to pull us along. 

Now, each dollar we did not invest was a lost dollar of business, or more.  Now, "saving" money was costing us business.  The team was buried - working ungodly hours - and customers wanted more from us.

We decided to "go for it" and have now grown headcount by ~50% in the last three months.

In summary - preserve cash and extend the duration of your company as the primary goal UNTIL a real product market reveals itself, customer demand spikes well beyond the capacity of the organization to serve it, and you know in your gut that it's time to go "all in."

 

Project Devil: Affirmation of Our Vision

Today, AOL announced Project Devil.  Project Devil is AOL's effort to redefine display advertising and to enable a creative canvas that both leverages the richness of today's real time web and drives material increases in end-user engagement.  


AOL's new ads are more like applications that support live updates from Twitter and Facebook, video, photo galleries, store finders, and other app like functions that help move the industry beyond old, boring banners.


At Widgetbox, we could not be more excited to see and read about AOL's new plans. One year ago last week, we signed LinkedIn as our first ClickTurn customer. ClickTurn's vision is to transform display ads into live apps programmed by the best of today's real time and interactive web.  For example, below is an Halo ad that includes video, real time content updates, and delivers on the very vision promised by AOL's Project Devil and AppAds.  





The news is fabulous for several key reasons. First, it affirms our vision that display advertising is moving from static flash files to living apps programmed by APIs, data, and multi-media assets. Second, it underscores a critical shift in the value chain. Publishers are no longer content to simply sell audiences and to flight standard IAB ads against said audience. No, today publishers must differentiate by productizing ad innovation and finding ways to integrate the best of advertiser, publisher, and social content and functions.  Advertisers, in turn, in their search for higher engagement and banner ad dollar ROI, are willing to work directly with large publishers on custom size units.


ClickTurn proudly partners with the web's best publishers to realize both goals - new ad formats that drive 10x improvements in engagement and new business models that allow publishers to win more business by delivering more value.


As Google says, watch this space. An $8bn market is up for grabs!

Company Clock Speed

I am a strong believer in customer-driven company development.  The need to establish product-market fit via an iterative set of engagements. Each engagement helps to both understand the market need, while providing valuable input into the product development process.

One major issue, however, is that the cycle time for customer responses is 7-10x faster than the product release cycle time. As a young company, it really pays to be highly responsive, but it does not pay to whip-saw the product team for one-off features. While the features may eventually help you win, the changing requirements and fire-drill time lines do not support quality software development.

Many start-ups end up with bad blood between development and sales - whereby sales keeps saying yes irrespective of the pain and timelines such promises will bear on the company at large. And, they need to say yes to help win, validate the product, etc.

As ClickTurn took off, the two timelines and clock speeds became an issue.

Specifically, we release software every Tuesday, while customer requests require intra or over night turn around. 

To address the need to be customer and market driven, while protecting the engineering process, we developed an internal services team. The services team and the engineering team defined an extensibility model that allowed us to address the vast majority of custom deliverables via an API. The API, and its iterations, allowed two teams to operate at different clock speeds - each focused on hitting their goals; for engineering, 70+ weekly on-time releases, for services, extremely high client satisfaction and customer success.

Moreover, the extensions ultimately improved the quality of the platform and the robustness of the API.

A social contract based on allowing each team to finds its optimal rhythm via APIs or extensibility models helped us reach our customer-driven development goals while keeping (largely) sane and both teams highly productive. 

How to Create an Enemy by Sam Keen

Truth in every word - dehumanizing the enemy is a very dangerous game.

Start with an empty canvas

Sketch in broad outline the forms of

men, women, and children.

Dip into the unconsciousness well of your own

disowned darkness

with a wide brush and

strain the strangers with the sinister hue

of the shadow.

Trace onto the face of the enemy the greed,

hatred, carelessness you dare not claim as

your own.

Obscure the sweet individuality of each face.

Erase all hints of the myriad loves, hopes,

fears that play through the kaleidoscope of 

every infinite heart.

Twist the smile until it forms the downward

arc of cruelty.

Strip flesh from bone until only the 

abstract skeleton of death remains.

Exaggerate each feature until man is

metamorphasized into beast, vermin, insect.

Fill in the background with malignant

figures from ancient nightmares – devils,

demons, myrmidons of evil.

When your icon of the enemy is complete

you will be able to kill without guilt,

slaughter without shame.

The thing you destroy will have become

merely an enemy of God, an impediment

to the sacred dialectic of history.

How Will You Measure Your Life?

Clayton Christensen's essay How Will Your Measure Your Life? is a must read.  The essay provides a framework for living a life of purpose rather than regret, for investing in what matters versus what's topical.

Please read the full essay - note, the essay is for business school students about to graduate but has broader relevance and resonance. In brief, he writes that everyone must think through the answer to three fundamental questions:

1. How can I be sure that I'll be happy in my career?
2. How can I be sure that my relationships with my spouse and family become an enduring source of happiness?
3. How can I sure that I'll stay out of jail?

The article goes on to define:

• How to Create a Strategy for Your Life
• How to Allocate Your Resources
• How to Create a Personal and Family Culture
• How to Avoid the "Marginal Costs" Mistake - aka "Just This One Time"
• How to Remember the Importace of Humility
• How to Choose the Right Yardstick

Rethinking Display

Jessica Vascellero's recent article in the WSJ, "Tech Firms Tout New On-line Ad Formats" is a wonderful read.  The article, written from Allen & Company's Sun Valley "mogul" retreat explores the future direction of the display market.

The US display ad market is worth ~$8 bn. Display ads today, however, are virtually identical to the very first display ads of fifteen years ago - static pictures of products that increasingly fail to capture the interests of consumers and the nature of today's web- video, Twitter, real-time content, etc.  Given the lack of innovation, ROI is suffering and both publishers and advertisers are exploring new alternatives.


Google is making display innovation a priority and the article quotes Eric Schmidt as saying that he "championed "interactive video ads," which he said are on the way. Such ads, which could appear anywhere on a Web page, not just inside a video, would be like mini-Web pages. That means they could allow Web users to watch a video, leave a comment and see real-time updates within the ads that are more customized to their interests."


I very much enjoyed reading that paragraph. Why?  


Widgetbox's ClickTurn ad platform already delivers on the vision outlined by Mr. Schmidt - ClickTurn ads transform display ads into nanosites programmed by best of today's real-time and interactive web.  For example, here is an ad for Halo that includes video, real-time content updates, and delivers, via an ad unit, the very "mini-Web page" that Google's CEO promises is coming. 


ClickTurn now powers dynamic display solutions for many of the web's top publishers. Working with our publisher partners, we are working to redefine display ads and to deliver ROI - through detailed interaction metrics - that will help the display market deliver greater value.

Solitude and Leadership

Solitude and Leadership, by William Deresiewicz, is an essay based on a lecture on leadership that he delivered to last year's West Point plebe class.

The essay argues that elite educations today produce people who are expert at excelling in systems and bureaucracies and not people who will excel as leaders. Leadership for WD is not about "jumping through hoops" to progress up the "system" but rather leadership is best exemplified by those who are self-aware, deeply thoughtful, and able to think creatively and independently.

Elite education, he argues, conditions people via a system of rewards and progression to excel in systems rather than forge independent and risky paths. He writes,

"Why is it so often that the best people are stuck in the middle and the people who are running things—the leaders—are the mediocrities? Because excellence isn’t usually what gets you up the greasy pole. What gets you up is a talent for maneuvering. Kissing up to the people above you, kicking down to the people below you. Pleasing your teachers, pleasing your superiors, picking a powerful mentor and riding his coattails until it’s time to stab him in the back. Jumping through hoops. Getting along by going along. Being whatever other people want you to be, so that it finally comes to seem that, like the manager of the Central Station, you have nothing inside you at all. Not taking stupid risks like trying to change how things are done or question why they’re done. Just keeping the routine going."

In many companies, the incentive for creativity, for challenging the normal, for innovating processes is close to nil. Too often, the lack of senior support and the inertia of big companies "break the spirit" of those who have vision to see a new way forward. Rather than reward creativity and iteration, the system throws roadblocks in the way that eventually wear the innovator down.

Big companies are often hollowed out - ie the best and brightest are driven out by those content to manage the system rather than to challenge it. What's left is deadening - both to those who work in the system and, ultimately, to the system itself.

What's fascinating is his argument regarding the pernicious effects of today's elite educational systems - arguing, convincingly, that leadership is not learnt by excelling in educational system - doing what is required to advance to the next level - but rather through introspection, self-awareness, and the ability to concentrate on what matters rather than what is rewarded.

A great read.

England

I lived for in England from 1982-1989. Formative years, where I fell in love with English football, the teams, tradition, and national team.

My boys - 10 and 8 - wear EPL jerseys most days to school and Sunday nights are reserved for the EPL game of the week and top highlights. The backyard holds two goals and a daily game where the boys pretend to be Rooney, Lampard, or Gerrard.

Imagine then the shock and confusion when their EPL idols went out not like the 3 Lions but rather like the 3 lambs.

Tears were spilled as they processed the 4-1 pasting by the Germans and the humiliation that was England's World Cup.

All sports fans live vicariously through their teams, but this World Cup is allowing me to see the depth to which children believe in their idols and the real pain the children feel when their heroes fail to live up to expectations.

Twitter - pricew

If you read this blog - please do add me on Twitter - http://twitter.com/pricew

Good luck with the end of Q2!

Instructions for Life from the Dalai Lama

I found this list today in my office - no idea where it came from, but I like it.

1. Take into account that great love and achievements involve great risk
2. When you lose, don't lose the lesson
3. Follow the three R's
1. Respect for self
2. Respect for others
3. Responsibility for all your actions
4. Remember that not getting what you want is sometimes a wonderful stroke of luck
5. Learn the rules so you know how to break them properly
6. Don't let a little dispute injure a great relationship
7. When you realize you have made a mistake, take immediate steps to correct it
8. Spend some time alone every day
9. Open arms to change, but do not let go of your values
10. Remember that silence is sometimes the best answer
11. Live a good, honorable life. Then when you get older and think back, you will be able to enjoy it a second time
12. A loving atmosphere in your home is the foundation for your life
13. In disagreements with loved ones, deal only with the current situation. Do not bring up the past
14. Share your knowledge. It is a way to achieve immortality
15. Be gentle with the Earth
16. Once a year, go someplace you have never been before
17. Remember that the best relationship is the one with  yourself
18. Judge your success by what you had to give up in order to get it
19. Approach love and cooking with reckless abandon

Iteration and the Start-up Path

Mark Gainey, the founder of KANA, once told me that the hardest part of the entrepreneurial journey is the first step. But that once begun, the journey takes on a life of its own.

The journey opens up into an endless series of forks in the road, where each fork taken provides new context, learnings, and guidance.  Each fork provides both a new direction and momentum with which to carry the company and team on wards. If you listen to experience start-up people, they emit a wisdom and authenticity that comes from that journey - for it is a humbling one full of challenge and challenges overcome by tenacity, hard work, and a healthy dose of luck.

Since, I have been at Widgetbox, we have evolved into a market focus and set of product offerings that I could have never predicted on my first day on the job. What began as a widget platform, is now powering ad units for the world's largest brands and publishers. In addition, HTML5 has opened up an entirely new market opportunity for our widgetserver runtime and platform.  The ability to pivot, to make decisions based on the market's guidance, and the insights that come from iteration are fundamental.

Great ideas are a function of context - white boards do not allow for great ideas, rather great ideas and insights require a gestation period of months and develop over a series of small moments - rejection, minor tweaks, and finally clarity and insight emerge as the product evolves to fit the market need.  Importantly, the particular nature of a start-ups journey makes it hard for others to follow and gives rise to the myth of overnight success when all of a sudden the company meets the market need far ahead of the competition.

While a certain direction needs to be set a priori - the strawman is simply that - an early hypothesis that brings resources together - both human and financial capital. Then the market takes over and the process of learning begins.

My journey required an ability, uncomfortable for me, to live with ambiguity - to trust in the team to walk the journey together - not always certain of the final destination but confident that we had the flexibility and determination to orient to a good place over time - one step at a time.

Moreover, the early uncertainty fades as the market opportunity is better characterized and understood and the early conviction becomes steeled by a certainty that the company is right and onto something great!

Comments on Drive: The Surprising Truth About What Motivates Us

This animated video of Dan Plink's RSA talk is extremely interesting.



Key argument: after a certain level of income, we are no longer motivated by purely financial gain. He argues that financial incentives work best for piece meal work - ie bonus tied to how many widgets are made per time period.

But for knowledge workers, science shows that financial incentives alone do not lead to higher performance.

What does?

1. Autonomy - self directed work
2. Mastery - challenge and the desire to master a domain
3. Purpose - making a contribution to a transcendant goal

Fascinating food for thought and given that the tech industry is comprised of knowledge workers - very instructive with respect to organizational behavior.

AAPL vs MSFT -what happened to best-of-breed?

During my time at the Kellogg School, I took a class on competitive strategy.  One of the quintessential strategy cases explored the battle between Apple and Microsoft for the computer market.  At the time, Apple had less then 3% of the market and the company was heading for obscurity, or worse.

Today, Apple's market cap passed that of its long time rival.  Twelve years ago the conventional wisdom held that the PC OEM model and the Wintel (Windows/Intel) platform allowed for a greater rate of innovation and a cost curve that Apple could never match.  In hindsight, this argument seems farcical.

At that time, strategy orthodoxy encouraged companies to specialize at the component level - chips, operating systems, applications, assembly - and that specialized best-of-breed vendors would outperform vertically integrated companies.   In fact, the idea of a company that produced both hardware and software was laughable and a strategy destined for a stale product line, bloated costs, and market share losses.

What happened and why was conventional wisdom so wrong?  The world of best-of-breed has been replaced by a world of vertical integration, whereby the frictions of assembling best-of-breed components are driving people to buy pre-integrated systems.  Oracle's acquisition of Sun is based on Jobs' vision of system level selling - hardware, software, peripherals.  Ellison argued that customers want to buy a a solution - not a set of components that are integrated by systems integrators to deliver value.  He argues, why not sell an pre-integrated solution, whereby each layer of the solution is designed to work best with the layer below and above it?

iPod/iTunes - software, computer, device, peripheral

iPad- App Store

Perhaps the insight is that as systems and "solutions" grew more complex - the incremental value of driving down marginal costs on a per component basis was overshadowed by the increase in marginal costs of assembling the components to solve the intended problem - ie listen to music, watch a movie, use an application.

Apple moved from competing on abstract utilities and generic cost per cpu to competing on systems designed to satisfy higher level consumer needs - consume media, produce media, share, network.... Integrated value not only supports much higher prices - compare a Dell laptop to a MacBook Pro - but also much higher level of consumer satisfaction.

Best of breed is dead - long live systems.

The Welfare State Killed Itself

A narrative is emerging across the developed world - General Motors, Greece, Spain, the United Kingdom, federal, state, and municipal pensions....Put simply, the welfare state is no longer able to fund itself.


Defined-benefit pension plans and cradle to grave social systems- that are funded by subsequent generations - are driving massive deficits. Moreover, investors are refusing to finance deficits, forcing gut-wrenching but necessary cuts to the welfare state.


Importantly, the culpability of these cuts lies not with international investors, the IMF...but rather with the politicians, both Republican and Democrat, that ignored years of warnings and continued to enact welfare programs and pensions obligations that were impossible to deliver.  The villains are politicians who insisted it was a "right" to receive benefits that are simply impossible to pay for.


The private sector went through a painful, but necessary migration from defined-benefit to defined-contribution pension plans over the last thirty years.  Moreover, in the US, flexible labor laws allowed companies to restructure and eliminate tens of thousands of jobs that were no longer viable or necessary.


The public sector, however, has simply refused to confront the hard facts that laws and programs enacted for the "public good" - life time teacher tenure, full pensions for public workers, job guarantees - were in fact creating a fiscal monster that is eating an increasingly larger share of government budgets.  


The system is killing itself and its proponents need to move from defending existing programs to taking a vested interest in making changes, as soon as possible, that will make changes, while painful, not disastrously so.

How Creative is Changing and Why the Real-time Web and Analytics Force a Change in How we Think About Creative

Since Widgetbox launched ClickTurn last year, I have become a student and participant of the online ad industry. This post marks the first in a series, where I plan to share my learnings to date.  This post deals with how technology is impacting the very nature of banner ad creative and why that harbors big changes for the industry. 

Over the last fifteen+ years, the banner ad markets has grown into a $20bn global industry.  Despite the industry's scale and size, the nature of today's banner ads remains very unchanged from the very first internet ads - static pictures of products that increasingly fail to capture the interest of consumers nor the nature of today's web.

Banner ads are akin to highway billboards - static combinations of text and images - seeking to encourage the driver/consumer to take the next exit and visit the advertiser's location.  The creative process, therefore, focused on building the "perfect" creative - one that best captured the product, the call to action, and the brand's goals.  Given, that ads were developed for a seasonal or temporal campaign, the creative process sought to build the best possible set of assets and to then pass them onto media planners for distribution to relevant sites and media properties.

Two big changes make the concept of "finished" creative a relic. The first is the rise of the real-time web - Twitter, Facebook YouTube, blog posts, etc.  Brands are no longer investing in "snap shots" of their brand, but rather in conversations with their target audience, whereby the "creative" is the dialog.  The real-time web requires a shift in perspective regarding creative from something that is fixed to something that is programmed by ongoing marketing initiatives.  The brand does not seek solely to craft a static campaign that will live through the season, but rather it is also investing in daily, even  hourly, updates that build on the brand experience.  Creative, therefore, needs to reflect this change in frequency of message and provide a way to reflect the real-time brand in the creative being trafficked.  Creative also needs to reflect the two-way nature of conversations and the ability of the web to amplify said conversations through social sharing.

Since these changes occur each and every day - the traditional and serial process of locking down creative no longer makes sense.  And since these changes are real-time, the creative must become a living asset that can be programmed by the brand's marketing channels.  This is a huge change and means that traditional creative will not work. 

The second key change is analytics and retargeting.  Rather than design the "optimal" creative - brands are leveraging dynamic creative solutions that seek to personalize ads based on retargeting and analytic optimizations.  Again, the traditional creative shop is no longer a credible provider of the solution.  Each ad load can be programmed and "designed" based on observed behavior to date over the life of a campaign, information known about a given web surfer, and other variables.  Ads, therefore, become a set of programmable config options - with the final config of a given ad impression occurring at run-time.  

ClickTurn is working to leverage both trends - the shift from episodic to real-time banner ad marketing and the reality that "perfect" creative is evolutionary and will be a combination of a series of defaults combined with a series of variables that the web at large will program. The real-time nature of such changes means that traditional "locked down" creative will slowly fade away.

Negotiating Via Docs vs Over Coffee

A friend of mine is square in the middle of a financing.  His company is raising money and a prospective new investor is looking to join an existing syndicate.

Today, he called to update me on the process and to run some key issues and terms passed me.  In listening to the process to date, one key issue stood out.  The current and future board members had yet to talk, either by phone or, better yet, in person.  The negotiation, moreover, is taking place via redline markups sent over email.

In our email culture, it is increasingly common to see vast amounts of communication take place electronically - emails, texts, IMs....In many cases, electronic communication is a huge productivity boost and an enabler of commerce and progress.

In getting to a good deal, however, I find it can be problematic.  Rather than send email - which is a terrible medium for conveying intent, logic, context, tone - I highly recommend talking in person.  The social connections built from human contact and dialogue provide the context, trust, body language, tone, and other important "social greases" that foster understanding, collaboration, and common ground.

In summary, important business relations benefit hugely from in-person interaction. Second, deals feel "better" when the key issues are reviewed over coffee rather than over a redlined document delivered by an email server.

What We Can Learn from the UK

The United Kingdom is facing dire financial and structural problems. 


Deficit spending as a percentage of GDP is over 10% and forecast to increase. The future requires cuts to treasured social programs and a need to increase taxes.  


Moreover, the electorate is split - leaving no party the clear winner in elections.  Sound familiar.


However, the British are now forming the first coalition government in over 65 years.  The Conservatives and Liberal Dems formed a power sharing agreement and argued that the crises afflicting that nation calls for collaboration not confrontation, for a focus on national priorities rather than factional differences.


Wow!


I used to believe that democracies are at their best in times of crisis - hard decisions are made and the differences that define us all are put aside to face existential challenges that threaten our way of life and security.


Today, we are facing such crises and existential threats - notably a looming fiscal crisis that makes us look worse than Greece.  And yet, our political leaders are incapable of finding common ground, of meeting in the middle to drive consensus, of putting the national good ahead of politics. It is a sickening indictment on our political system and makes one incredible fearful for our future. 


California is nearly bankrupt - and yet, due to gerrymandering and permanently safe seats our elected leaders are incapable of collaborating and instead rely on petty confrontations that may make partisans feel a brief sense of "victory," but the victories are truly Pyrrhic.



The US is fast approaching "Greek" level debt issues.  Debt is projected to equal 140% of GDP within two decades, while Greece is suffering with debt levels at 110% of GDP.

With respect to Greece...today's NYTimes noted, "Both countries have a bigger government than they’re paying for. And politicians, spendthrift as some may be, are not the main source of the problem. We, the people, are. We have not figured out the kind of government we want. We’re in favor of Medicare, Social Security, good schools, wide highways, a strong military — and low taxes. Dealing with this disconnect will be the central economic issue of the next decade, in Europe, Japan and this country."

At some point the problems will be so acute that financial markets will force our hand, as they did in Greece. Investors will demand a "risk premium" to finance our deficit budgets and we will pay the piper.

Wouldn't it be wonderful, though, if our leaders took note of the British model of coalition government and left behind the rigid strutures of two party government and formed, what Abe Lincoln so famously did, a Team of Rivals!!!!

The False Comfort of Regulation

The US Government's typical response to man-made and natural disasters is to leap into a frenzy of creating new regulations.  The idea is that with stronger regulation, future disasters will be prevented and the nation as a whole will be made sounder.  The logic makes perfect sense - let's close loopholes, oversights, systemic problems that create pain and suffering.


Unfortunately, we need to only look at how current regulators are performing in order to understand the efficiency and efficacy of future regulations.  Let's start with Bernie Madoff - under the nose of the regulatory body designed to protect investors, the SEC, Bernie Madoff staged a $50 billion fraud.  The SEC received frequent warnings regarding the implausibility of his returns, however, Madoff was not caught until his own sons turned him in.


Regulations create codes of conduct that are supervised by a regulatory body charged with ensuring compliance.  The regulations are only as sound and as effective as the regulators themselves - regulators, moreover, are often ideology aligned with the very people they are tasked with regulating.  They are very poorly compensated relative to the businesses they regulate. Finally, they do not attract the same caliber of talent.


The myopia of regulators can be seen in dramatic fashion looking back at what they missed, however, it is not surprising that brilliant people can cheat the system in ways impossible to police or prevent.


What's the point - the point is that we should all recognize the fallibility of regulation to protect us.  There is a huge amount of legislative effort invested in creating regulations that will almost certainly fail to prevent future disaster.


We can, however, think through incentives.  The cost of moral hazard is very real - if banks, oil companies, car companies, Madoff's investors, can expect the Federal government to backstop their losses then the potential "costs" of their decisions do not factor in their calculations.  I understand that after the Exxon Valdez spill, Congress passed a law limiting future oil-spill related losses to $75m.  This paltry "cost" of a spill creates a huge lack of incentive for oil companies to prevent spills.  Similarly, large companies in the US today know that the Federal government is much more likely to bail them out than to let them fail.


Allowing companies to bear the true costs of their actions is most likely a more effective measure to prevent future pain.  We need to create incentives such that malfeasance and misfeasance is borne by the shareholders of companies responsible.


Simply passing laws does not make it so.