Managing Expectations

How happy are you at work?  On a scale of 1-100, how would you rate your marriage, your friendships, your relationship with your children, your career satisfaction?

Imagine for a minute that you are happy in your marriage 90% of the time. Is that good? 90% sounds pretty good to me. How about at work, happy 80% of the time? Is that good?

Another way to think through the scores is to translate the numbers into days. For example, if you have a great marriage and are happy 90% of the time, mathematically there are 36.5 days a year that you are not happy.  36.5 days, or more than entire month.

Similarly, if at work you are fulfilled 80% of the time, there are 74 days a year where you are not fulfilled.

What's the point?  The key idea, hat tip to Marv Wenger for sharing this perspective, is that a happy and fulfilled life is full of days that simply aren't that good.

Furthermore, rather than being surprised by a tough day, it is important to be sufficiently self-aware to not only expect tough days, but to recognize that having a tough day does not fundamentally challenge the quality of your relationships or work.

As an entrepreneur, there are plenty of challenging days. It pays to realize that is both normal and that a bad day, or 36.5 tough days, still means that 90% of the time things are really good.

Agile Marketing

I write to share an article we published today on iMedia, Why You Need to Consider Daily Marketing Messages.

The article introduces best practices, including a look at Gatorade's command center, for agile brand marketing. 

Agile marketing allows brands to become more iterative, relevant, and responsive to the lives, interests, and trends impacting the customer.

Turning 40

Today, I am 40. I write this from a small village in Baja, where I am celebrating the milestone with my wife and best friends.

40 is an iconic birthday and an occasion for reflection.

40 years ago, I was born to a US Air Force Captain and his wife, Kent and Marian, in Wiesbaden, West Germany. From birth, my life has been peripatetic. Six days after my birth, we moved to a small village on the Czech border. By the time I was twelve, we'd lived in Germany, Ireland (sister, Elizabeth, born), Northern Ireland, Nigeria (brother, Richard, born), the Ivory Coast, Taiwan, Hong Kong, and the United Kingdom. My father's job with the military and then with Citibank required frequent moves. True to form, at 14, I left London for boarding school in Connecticut. The moves averaged one every eighteen months and left an indelible mark on me.

First, I became very good at being the new kid. Adapting, making new friends, and dealing with the trauma of change.  Second, my body adapted to the rhythm of major change every eighteen months and I suffer from wanderlust.

The "risks" associated with change were blind to me, as evidenced by my equally peripatetic educational and professional experiences. High school in London and CT, college in LA, China, and Cambridge, banker in NYC, HK, and Singapore, teacher in Indiana, business school student in Chicago, and the last twelve years in venture capital and start-ups.  My childhood blessed me with the ability to adapt, while leaving me with a true sense of restlessness.

Fortunately, my wife, Caroline, helped me understand what I'd missed growing up - the power of community and consistency. While my email address continues to change, I've lived in the Bay Area for twelve years and my children have attended the same public school for seven years. My oldest son, Jack, is 11. By his age, I'd moved eight times to seven countries. I now see through him the importance of reinforced, persistent human relations and my wanderlust has dimmed as I enjoy long-term friendships and a feeling of connection.

In fact, over 40 years, I've come to believe strongly in the following:

• the value of investing in community
• I love being part of the Bay Area start-up community, mentoring, coaching youth sports in the Los Altos-Mountain View, playing my Sunday morning soccer game, running into friends at local restaurants, and building rich relationships born of years of common experiences and context.
• being present for my wife and children
• While I struggle with presence and mindfulness, I work hard to be fully home and to really listen, hear, and understand the lives of my sons and wife.
• Nothing gives me greater pleasure than time with my family.
• Thich Nhat Hanh's book, the Art of Power, is a great book to read and reread to help reinforce the value of mindfulness.
• pets
• I've come to love the presence of animals...a hike in the hills with my lab, Sierra, or hanging at home with our bird, Storm. Caring for animals grounds you and children simply love them.
• routine exercise
• I work out every morning from 6-7am and then have coffee with four guys. Its a ritual and commitment that makes the start of every day magical.  Every Sunday at 7am, I play soccer with the same eighteen guys, hit Peet's after the game, and head home tired and happy.
• never acting in fear
• Being new every 1.5 years at school is a lesson in overcoming fear and insecurity. As I studied mindfulness, I came to realize that I let fear limit my joy of live, which led to poor decisions. Being afraid to fail, to try new things, fear of looking foolish, ignorant, silly....these fears are self-defeating and something I've worked really hard to overcome.
• nature
• Simply put, I love being outdoors in the wilderness and work hard to find time every year to spend time with my family off-the-grid.  In my secular life, the church of nature fills a spiritual void and provides solace, energy, and peace. 
• redefining risk
• In my early 30s, I was diagnosed with a kidney disorder. At the time, I was told that my kidney would fail by the age of 40 and I would need a transplant. Thankfully, I am in remission and have been for six years. Nevertheless, for a few years, I lived with a heightened sense of mortality and a revitalized commitment to make every day really count.
• The modern economy is volatile and life-time employment a quaint memory. As I've worked on start-ups, my friends at McKinsey, Merrill, HP and other pillars of stability often remarked that they found my career path too risky. Many of them were later laid off as the economy soured.
• I've come to believe that greater risks lie in not finding out what you are truly capable of, in  seeking safety at the cost of possibility, and in thinking that there will one day be a "good time" to take a chance.

Here's to the next forty years and to my parents, wife, family, friends, teachers, and colleagues for making my first forty simply wonderful. I love you and thank you.

How to Fix The Economy

The Way Forward  
Moving From the Post-Bubble, Post-Bust Economy to Renewed 
Growth and Competitiveness 

by

Daniel Alpert, Managing Partner, Westwood Capital
Robert Hockett, Professor of Law, Cornell University
Nouriel Roubini, Professor of Economics, New York University



Good read.

Abstract of how to fix the problem. Read the paper to better understand their diagnosis for how we got in this mess.

5-7 year plan - a Marshall Plan, if you will, is required

1. We face an oversupply of capacity and a "demand hole as as the private sector de-levers
2. Requires sustained and strategically concentrated public investment in infrastructure, domestic energy, and technology.  Need to provide businesses confidence that demand will return.
3. Need to restructure private sector debt - reduce relative debt burdens. Major program of debt restructuring, refinancing, and relief. Will require recapitalizing banks but will avoid Japanse problem of "zombie banks" with billions in loans where LTV is upside down
4. Rebalance global trade and address structural deficiencies (best reflected in the US current account deficit), whereby China and growth economies begin to consume. Requires currency appreciation of the Renminbi.
5. Specifics
1. US Public Infra Spending
1. $1.2 trillion/5 year public investment program targeting high return investments in energy, transportation, education, R&D, and water-treatment infra
2. Debt Relief
1. Debt restructuring and regulatory capital loss absorption. Drive resolution of trillions in impaired debt where the nominal value of the debt is > asset value. ex. mortgages that are underwater
3. Increasing domestic demand in current- account surplus nations
1. Global Rebalancing - currency realignment, domestic demand growth, reduction of current account surpluses. China, Germany, Japan, and petro-dollar economies need to spur domestic demand, allowing local currencies to appreciate against the USD, letting wages rise, etc.  Requires China to develop social safety net, reduce export subsidies, pay out dividends and incomes, and increase wages, and most importantly, allow for currency appreciation

Wall Street and the Failure to Prepare Graduates for the Real World

The financial services industry is growing its proportional share of national GDP and has done for decades. The best and brightest flock to Wall St with Goldman Sachs, Morgan Stanley, #hedgefund iconic names that call like sirens to our graduates. Literally, tens of thousands of our best minds work on Wall St inventing new methods of securitization and instruments.

While there are many reasons for our best minds to join Wall St, I believe that universities are failing to prepare students for the real-world and in faling to do so leave them vulnerable to bright shiny objects and paths of least resistance.

 Since 2008, we've come to rue the size and power of Wall St - the leverage, financial instruments, and too-big-to-fail institutions that have been bailed out but not fixed.  Moreover, there is an acute sense of resource misallocation. What are the long-term costs of so many talented young people investing their talents, drive, and innovations in finance?

I graduated from Harvard in 1994. Shortly after graduation, I reported for duty at 1251 Avenue of the Americas, the then-home of Morgan Stanley. Along with scores of my classmates, we descended on Manhattan to begin work as analysts, junior traders, and future financial mavens. Why did so many of us join Wall St?

 I see three key drivers:

1. Path of least resistance
1. Banks run incredibly efficient recruiting processes. With young alums driving the process, the banks make it incredibly easy to interview, visit, and ultimately accept banking offers.
2. Dinners, lunches, senior banker discussions...the recruiting process hoovers up talented young people, mostly unsure of what to do next
2. Money
1. Finance companies pay materially above the mean and provide cash-strapped graduates with ready income and a path to income growth
3. Failure to Educate
1. Lastly, most colleges to a terrible job preparing graduates for the real world. At Harvard, the career counseling center and the College do very little to educate graduates about options, choices, and career paths.
2. Education demands preparing students for life and giving them the intellectual tools and frameworks with which to develop and grow. Little emphasis, however, is formally placed on preparing college graduates for life as working professionals.
3. The liberal arts bias makes such mercenary education an anathema, however, in hindsight the lack of real-work preparation is inexcusable.
4. The completely random nature of how most people choose their first jobs is shocking. Think of the preparation we place on SATs, AP exams, GPAs, majors, and yet we don't work with our kids to lay out, explore, and select vocations with equal verve and discipline.

Recent research suggestions that the human brain does not reach maturity until ~25 years old. College students are early on the development path, often aimless with respect to major and vocation, and leave school book-smart but far from educated with respect to the super-set of career paths and vocations possible. This lack of education and preparation leaves students vulnerable to the siren song of corporate recruiting processes.

As a father of two boys, I talk to them about gap years - allowing them to live, work, and experience the real world, while continuing to reinforce the importance of education.  We are, I am afraid, not providing a balanced approach to education and the imbalanced focus on academics leaves young graduates truly ignorant about life as working professionals and how best to map their interests, passions, and talents to the wide variety of possible career paths our economy offers.

How can we better prepare students for a life of work?  How can we balance liberal arts educations with greater insight into vocational choices and possibilities?

Do Happier People Work Harder?

Great article from NY Times. Abstract: worker autonomy, sufficient resources and learning from problems = happy workers. http://www.nytimes.com/2011/09/04/opinion/sunday/do-happier-people-work-harder.html?smid=fb-share

Mastering Change: Lessons on the Pivot

I spoke today at a Churchill Club Event: Igniting Innovation and Mastering Change. 

My fellow panelists were:

• Randy Komisar, partner at Kleiner and author of Getting to Plan B
• Ujjal Kohli, CEO, Rhythm NewMedia
• Sudhakar Ramakrishna, EVP & GM of Unified Communications Solutions, and Chief Development Officer, Polycom

The panelists and the subject matter were wonderful. A few insights follow:

• Intellectual honesty
• All the panelists agreed that mastering change and pivoting requires intellectual honesty. The courage to confront hard truths, face challenging topics head on, and to share the truth up the chain is fundamental.
• Given that businesses are funded on Plan A, Randy noted that too many teams and boards hide the truth in fear of admitting the fallacy of plan A. The expectation, he noted, should be that Plan A is simply an hypothesis and that is is to be expected that a Plan B will be required.
• Ujjal noted that team members are too oft afraid to share bad news across departments and that too many CEOs fear telling the board the truth
• Ujjal made the excellent point that Series A investors need to build a culture of absolute trust with the CEO and to stress to him/her that the truth is paramount and no one will ever shoot the messenger.
• Agile, data driven, rapid cadences
• All the panelists stressed the need for speed and agility. The movement from water-fall to agile development is driven by a need to quickly incorporate real-world feedback and signals into the product, strategy, and company.
• Randy noted the need to ask the right questions and to validate or disprove hypothesis as quickly as possible.
• Processes, cultures, etc that thrive on agility, metrics, and clearly stated assumptions win.
• When to Pivot
• Randy stressed the need to avoid waiting for a near-death experience to change. Change should be assumed and too often it takes a disaster to shake a start-up from complacency and intellectual dishonesty.
• Pivot early and avoid running the cash balance, team morale, and credibility with the board down to zero.

I really enjoyed participating and it reinforced my conviction that the entrepreneurial process demands comfort with ambiguity, agile execution, absolute intellectual honesty, and a process of vigorous debate, insight, and, vitally, realignment across the team.

Envelope for Risk: What's the Mindset of Your Investors?

Just got off the phone with a CEO friend of mine. He'd just finished a board meeting that left him exasperated and frustrated. Yes, I played therapist.

The root cause?

His investors are surprised by pivots, are focused on the downside, lack political will in their partnerships, and inject insecurity and fear into the company rather than serve to relieve it.

I am very lucky to have investors (Sequoia Capital, General Catalyst, Hummer Winblad, NCD Investors) who are committed to building durable, stand alone businesses, who recognize that all overnight successes are born from years of hard work, persistence, and obstacles over come, who are comfortable with a large envelope of risk and volatility.

Too many venture investors focus on plan A and are shocked to hear there is a need for a plan B - the best are surprised if there ISN'T a plan B or a need for one. Too many investors shrink from risk and encourage safety and certainty over ambiguity and daring.

Mindset...find out the mindset of your investment syndicate and recognize that their ability to live with risk, ambiguity, and change may well be a key determinant in whether you create a stand-alone, enduring business or are forced into a quick sale or, worse, liquidation.

The Next Step in Disrupting Venture Capital: Emerging Manager Funds

The Venture Capital industry is ripe for disruption. Too many firms, too few returns, and an industry predicated on investing in disruption that fails to disrupt itself.

Over the last few years, super angels offered new capital to the market and groups such as Y-Combinator provided young entrepreneurs new avenues to success. The venture industry, however, lacks a very common model that the hedge fund industry has mastered - the emerging manager strategy.

Emerging managers are young, smart, and successful analysts or portfolio managers who cut their teeth with a major hedge fund. After 3-5 years of stellar returns and performance, they often leave and raise small funds from their former employers, hedge fund leaders, or limited partners who specialize in identifying and seeding up and comers.

For example, Julian Roberston is not only the founder of Tiger Management, but he is also the "father" of the so-called Tiger Cubs. Many of today's hedge fund leaders got there start working with and then being seeded by Julian Robertson - including, John Griffin, Lee Ainslie, Andreas Halvorsen, and 40+ others. Paul Tudor Jones, another leading investor, continues to seed deserving managers, including Two Sigma.

Why don't we see a similar model at play in the venture industry? Having spent six years in venture, I know there are many talented young investors chafing to rip up the playbook and disrupt the market. 

Sadly, it is virtually impossible for them to raise capital. Why?

Venture returns take years to produce, while the hedge fund industry is marked to market daily and over a year or three, one can build up a track record and demonstrate "alpha," the holy grail of alternative investments. Moreover, given venture investments are illiquid, redemption and getting your money back is much, much harder than in the hedge fund asset class.

Recently, I had the pleasure of visiting Tiger's NYC offices and spending time with a senior executive. Tiger, you see, does not solely rely on alpha. Over the last twenty years, all hires and prospective Tiger Cubs have been given a IQ, personality, and logic test. With twenty years of results, Julian is able to benchmark any new candidate against the industry's very best. The combination of investment strategy, results, test results, and in-person interviews allow him to allocate capital to an emerging manager with a system and then to measure and watch.

So, in order to pull of an emerging manager strategy, one would need to be able to identify talent independent of cash on cash returns and solve the redemption problem. I believe that both limitations are solveable.

We all know who the rising stars are in the industry and I am confident that a decent share of them would be willing to hang their own shingle and create their own destiny. Moreover, with the rise of secondary markets and innovations that I can only imagine exist, the liquidity/redemption issue seems workable as well.

Will we see an emerging manager strategy work in venture? Will a lion of the industry emulate Julian Robertson and seed the next generation of top firms? There is a capital allocation problem in venture today - bad firms are getting allocations at the cost of new firms starting with hungry GPs ready to kill it.

Until the industry can allocate capital to the future stars and not to a 10 year old investment track record, I don't think we will see the disruption in our asset managers that the technology industry deserves. 

Thoughts?

What Every Social Media Marketer Should Know About Flite - SocialTimes.com

What Every Social Media Marketer Should Know About Flite - SocialTimes.com

Iowa Straw Poll

How broken is politics in this country?

After weeks of reading about Iowa and the Republican Iowa Straw Poll, I wondered how many people actual vote in the poll.

Pick the right # from the list below

• 1,600,000
• 160,000
• 16,000
• 1,600

Any takers?

The absurd amount of press coverage for Michele Bachmann suggests a hugely important event. As the winner, she won 4,823 votes out of a total of ~16,000.

Read that again, 4,823 votes.

The fact that 4,823 mid-west voters are able to massively and disproportionately shape the debate regarding Republican Presidential politics is not only undemocratic but also absurd.

Why do we allow such small numbers of people such undue influence?

While I have nothing against NH or Iowa, I believe we have a fundamentally skewed process for selecting candidates and one that rewards extreme positions that cater to an absurdly small number of people.

Bachmann won less than 5,000 votes. This is a non-story and yet another example of how bizarre our political and news cycle systems are and how little they map to the reality the vast majority of us live.

Flite Interview with Robert Scoble

How Publishers Can Stay Relevant in today's Digital Media World

http://emediavitals.com/content/staying-relevant-world-ad-networks

Guest post on eMedia Vitals regarding how publishers can compete and stay relevant in today's digital media landscape.

Moonlight Breaks by Rich Price

Google+, An iPad Moment

iPad. The word evokes a magical product experience that opens up the mind to the possibilities and utility of technology - elegant, pleasant to hold, and a window to a world of applications and content.

For me, using Google+ hit me just as hard. Within an hour of using the service, I began to recognize not only the power of Google's social offering but value in the social layer over Google's incredibly rich product offering set - mail, calendar, video chat, IM, documents, search, photos, blog platform, Android phones, netbooks....

The + circle metaphor maps brilliantly to a world I know alt-tab between: LinkedIn, Gmail, Facebook, Blogger, Twitter, etc, while allowing me to design the appropriate filters and groupings of people I know, admire, keep to update from, etc.

Moreover, Google+ instantly changed my sense of Facebook's value. Prior to the + launch, Facebook's ascendancy and victory seemed written in stone. 100s of millions of users, no competition, brands flocking to Fan Pages, etc.  In my first + session, I realized how easy it is to switch from Facebook to + - outside of my contacts and the occasional photo, leaving behind Facebook, just like I left Blackberry behind to go to the iPhone, proved a no-brainer and truly easy.

Google+ serves to further bind me to Google - mail, calendaring, photos, blog, social communication, video chatting...and when they tie in Google Apps, I will have my work colleagues, family, friends, and extended social circles all on a single platform. + makes me much more likely to buy a Nexus phone and dramatically increased the amount of time I spend with Google each day.

As with my first iPad session, I fell in love with + on first sight and it opened my eyes to the power of Google's product portfolio and to Facebook's precarious position in our lives.

Finally, I think + will put a major hamper on Facebook's IPO prospects, while revealing in a very tangible way how shitty Twitter is from a product perspective. Twitter is now in danger of being a $7bn company with a product offering virtually identical to the day it started.

Flite at the IAB Future of Display Event

I am grateful to the IAB for giving me the opportunity to present at The Future of Display Event in NYC during Internet Week. The videos of my presentations follow.  Flite's ability to bring the full power of the Internet to bear directly in ad units  - sight, sound, and motion with social underpinnings - were on full display and 100% aligned with the industry's vision.


Demoing Cloud Ads

Click here to see the ads in action

IAB Interview

Product Marketing

My good friend and old boss, Richard Walker, first introduced me to the Product Marketing schematic below.

The diagram is an excellent architecture of how to think through Product Marketing's key deliverables.

iMedia Connection: Flite delivers a cloud-based dynamic ad platform that may help restore the "big idea" to marketing

Yahoo! Scene: Ad Banners Becoming Miniature Website Destinations

A Wonderfully True Quote Re the Vulnerability Creativity Demands

Powerful quote from Sim's Little Bets - 

" I think it's necessary," Pixar Director Pete Docter says about the inevitable self-doubt that accompanies any creative process. "On Monsters, Inc, I really wore that. I would come home at the end of a difficult day in story and I would think, I'm a fraud, a failure. I don't know what I am doing. And now I realize, well, that's the way it is."

Amen, the creative process forces one to confront the prospect of failure, a sudden lack of orientation where one is not sure what comes next. 

The Luck Factor: Do We Create Our Own Luck?

I recently came across Richard Wiseman's book, The Luck Factor.

Wiseman, a UK-based researcher, wanted to better understand why some people are lucky, while others appear to be doomed to poor luck and missteps.

The distribution of luck follows: 50% think they are lucky, 36% neither luck nor unlucky, and 14% self-proclaimed unlucky.

The book details the findings but here are a few concepts:

• lucky people tend to be open to opportunities or insights that come along spontaneously 
• unlucky people tend to be creatures of routine, fixated on certain specific outcomes
• lucky people are open to mingling at parties, while unlucky people tend to cluster with like-minded people
• lucky people have open, inviting body language, smile twice as often as unlucky people, thus drawing other people and chance encounters (ie luck) to them
• lucky people invest in a network of luck - lucky people are effective at building secure, long lasting attachments. They tend to be easy to know and easy to like and form close relationships based on trust. This network helps promote opportunity in their lives - ie luck

He concludes, "I discovered that being in the right place at the right time is actually all about being in the right state of mind."

If you consider chance a numbers game, he argues, then extroverted people simply have more chances to hit a winner.

Google's 11 Rules for Better Management

Learning How to Sell - Premature Pitchalation and Other Sins

In a prior post, I explored why so few MBA's go into sales.  The ability to sell is a skill of the highest value. In start-ups, sales is key to finding product-market fit, raising venture money, recruiting the best, driving revenue, pitching the press....

After three years at Flite, I am acutely aware of how important it is to sell and how poorly prepared I was for the challenge. I recommend a great book on sales to anyone eager to learn more : The Sandler Rules: 49 Timeless Selling Principles and How to Apply Them.

The 49 rules provide a framework and approach for better understanding the sales dynamic, process, structure, and path to more systematic success.

Here are a few mistakes that I continue to make and how I am working to improve.

Rule 2: Don't Spill Your Candy in the Lobby
This rule is classic - "have you ever shared too much information, too soon?"  In my rush to prove my credibility and the value of my product, I often jump right into an overview of what we do, why, how, who we do it for...all before we have even made it to the conference room. Another term: premature pitchalation - the prospect has no time to lay out their needs and asks and is bombarded by information overload independent of context. Needless to say, I am working hard to slow down and to let the prospect talk in order to allow for better fact-finding and qualification. Spilling your candy threatens to see you blabber on about features, functions, and issues of potentially no interest to the prospect.

Rule 14: A Prospect Who is Listening Is No Prospect At All
This one mirrors rule 2 , as Sandler asks, "are you selling or are you telling?"  I pride myself on being articulate and able to explain a value statement well. To often, I believe that if I can lay out an axiomatically perfect argument, then the prospect, by dint of my logic and persuasion, will buy right away. While I believe strongly in being able to express myself well, I am working hard to listen, to ask questions, then more questions, and to make sure that the customer's problems and goals are well matched with our offering.

Rule 17: The Professional Does What He Did As a Dummy - on Purpose
Here Sandler encourages the professional sales executive to ask simple questions, embarrassingly simple, questions to tease out information and to make sure there is total clarity. Are you comfortable with asking simple questions and leaving long periods of awkward silence? I am not, and I am working hard to allow silence to fill the room and for the prospect to fill it with information rather than for me to fill it with nervous energy and output.

Rule 30: You Can't Lose Anything You Don't Have
I've been guilty of spending far too much time on accounts that are failing to close.  Am I worried the customer will turn to another vendor, that the deal will eventually close if I just keep humping it...?  Sandler advises that one either close the sale or close the file - I need to do that better.

Rule 32: Get an IOU for Everything You Do
Often in start-ups, we are missionary sales people. We feel a huge need to prove ourselves worthy in order to break into large accounts. Accordingly, in our early days, I found myself doing lots of "free work" on the come. Sandler recommends that sales, by definition, does too much free work. The professional makes sure that the customer realizes that you are providing free service and that the IOU helps win future business.  One of Flite's major learnings is that we don't need to do as much free work as we thought, that asking for clear understanding that the customer will commit to buy if you we validate x, y, or z through a pilot works. If the answer is no deal no matter what you deliver, then why do it?  Get an IOU and be sure that any work on the come is tied to clear commitments to buy.

I learn more every day as I sell and found Sandler's book a tremendous reference for putting into words and simple rules problems that I encounter every day along with useful solutions for how best to handle them.

Watching the Wheels - Texting, Surfing, Emailing While Driving

In 2009, the NHTSA reported 5,474 deaths on the US streets and highways caused by distracted driving.  An additional 448,000 motorists were injured by drivers who were using cellphones and texting.

For the record, I am guilty of distracted driving. Today, I read about Bob Okerblom, who lost his son, aged 19, to a texting driver. His son, Eric, was a molecular biology major at Cal, National Merit Scholar, and all round great kid.

There but for the grace of God go I...

What?

Having texted, emailed, and surfed the web at the wheel, it could easily of been me who struck Eric.

Erik's family started a foundation in his honor - http://www.eofoundation.net/. His Dad biked across America reminding us all of the risks and losses we face when we drive distracted.

Starting today, April 22nd, I pledge not to text, email, program Pandora...etc, while I am driving.

Join me, if you like, in avoiding future tragedies.

Unusually Excellent: Skills Required for Leadership

Tony Zingale, CEO of Jive Software, recently sent me a copy of John Hamm's Unusually Excellent; The Necessary Nine Skills Required for the Practice of Great Leadership.

Hamm breaks the nine skills into three core segments:

1. Credibility, or a matter of character
1. Authentic
2. Trustworthy
3. Compelling
2. Competence, or a matter of skill
1. People
2. Strategy
3. Execution
3. Consequence, or a matter of values
1. Decision making
2. Communication
3. Impact

The book reminds me a great deal of Bill George's work. George is currently an HBS Professor and served as the long-time CEO of Medtronic. George wrote two wonderful books on leadership. You can follow Bill George on Twitter here. 

George's central argument is that mission-driven, rather than profit-driven companies, generate greater shareholder returns. Moreover, mission-driven companies require leaders with a True North, ie a moral compass/center of gravity that anchors not only the leader, but also the company. Hamm extends that concept and underscores the value of authenticity to leadership.

The moral compass proves its value in times of stress and ambiguity - it is the spirit of the law, not the letter that governs leaders with a True North.  As Hamm's model notes, competence is only 1/3 of the battle. Self-awareness, trust, a compass to navigate challenging decisions, the ability to share and empathize...are all EQ level traits. Pure competence, IQ, is not enough.  Lehman, Enron, AIG....all companies full of high IQ people who lost their way and operated without a compass.

My favorite book that speaks to the power of self-awareness and authenticity is Thich Nhat Hanh's The Art of Power.  Yes, a Buddhist monk wrote a book on business leadership! It is a brilliant read that reminds us not to let fear control us, not to focus on the wealth at the cost of well-being (golden handcuffs), and of the importance of living in the moment rather than in a guilt-addled past or a anxiety-laden imagined future.

The common abstraction of all these books is self-awareness. Who are you? What makes you authentically who you really are? Do you act out of fear? Do you act out of a desire to please others?

Why are you working where you work now? How did you end up here? What compromises have you made about who you really are? Are they worth it? What's stopping you from....?

The Journey is the Destination

Three years ago today, I left my MD role at Hummer Winblad to join Widgetbox. While Widgetbox grew into Flite, the leader in cloud-based advertising , I too have grown in ways I could not imagine.

While a VC, I worked on a deal that focused on testing wafers. The state of the art was to test the circuitry of a quarter wafer. This new company offered the promise of a full-wafer test.

The metaphor is meaningful to me. The CEO role tests one's skills, leadership, tenacity, and self-awareness in ways not possible in other jobs. Through each test, each challenge...hidden parts of who you are, what you are made of...reveal themselves.

The last three years have tested me in ways I did not think possible. The journey of company building, restructuring, and scaling both deepen who you are, while simultaneously revealing how you react to challenge, how you exploit advantage and insight, how you handle the good, the bad, and the ambiguous.

Three amazing years. Three years of better learning who I am.

Widgetbox Raises $12m from General Catalyst, Sequoia Capital, and HWVP. Rebrands as Flite

I am thrilled to announce the close of our $12m Series C. Neil Sequeira and General Catalyst led the round, with participation from our existing investors Sequoia Capital, Hummer Winblad, and NCD Investors. In addition to the funding, we also announced a new company name, Flite.

With the rebrand we have firmly positioned ourselves as the leader in cloud-based advertising. The Flite Platform allows advertisers, agencies, and publishers to create, serve, and measure ads that are as dynamic as the Web—delivering up to a 10X increase in ROI with ads developed in 1/10th the time.

The new company rebranding and platform-as-a service approach to advertising will empower advertisers to increase brand recall and purchase intent, while allowing our publisher partners to win more business and deliver more marketing value.

In addition to the rebranding and new company name, we have launched a new interactive site www.flite.com. Here we’ve highlighted our available services, solutions, and platform features. The new site also includes case studies, insights, and a new Ad Gallery that showcases how leading brands are using Flite to connect with consumers.

Finally, please find below coverage from of our funding and rebranding announcement.

TechCrunch
Sequoia-Backed Widgetbox Rebrands As Flite, Raises $12M For Rich Media Ad Serving Platform
by Leena Rao
http://techcrunch.com/2011/03/09/sequoia-backed-widgetbox-rebrands-as-flite-raises-12m-for-rich-media-ad-serving-platform/


VentureBeat
Widgetbox becomes “cloud” advertising company Flite, raises $12M
by Anthony Ha
http://venturebeat.com/2011/03/09/flite-widgetbox-funding/

Wall Street Journal Venture Capital Dispatch

The Daily Startup

http://blogs.wsj.com/venturecapital/2011/03/09/the-daily-start-up-incube-parts-ways-with-dfj-network/?mod=google_news_blog

Paid Content
Widgetbox Rebrands As Display Platform Flite, Raises $12 Million 
by David Kaplan
http://paidcontent.org/article/419-widgetbox-rebrands-as-display-platform-flite-raises-12-million/

MediaPost
Widgetbox Rebrands As Flite, Lands $12 Million 
by Mark Walsh
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=146312

Brand Spend On-line- A Secular Growth Trend Worth Betting Your Money and Career On

When I graduated from Harvard, I went to see a series of successful people to ask them what do do with my life.

I sat down with corporate executives, investment bankers, entrepreneurs, teachers, hedge fund managers, etc.  While few meetings remain with me years later, my meeting with John Tozzi, a leading hedge fund manager, still rings in my ears.

John asked me, "Will, when I started my fund, do you know where the Dow Jones Index stood?"  I had no idea and told him so. "800," he answered.  He then asked, "do you know where the Dow is today?" My answer, "8,000."  He then noted, "what are the odds that you will experience a sustained, secular bull-market like the one I have enjoyed?" "My advice", he sighed, "is to find a 10x secular growth trend that you can bet your career on."

I have thought about that advice many times in my life. In many ways, I believe that the Internet sector of today is the same as Mr. Tozzi's Dow 800. Over the next 25-30 years, a massive long-term, secular growth trend will occur. Capital, demand, customers, companies....will all ride this shift in asset allocation.

Isn't this old news? Yeah, Will, note to self, this Internet will be big.

The graph below, however, highlights that we are in the first inning (from AdAge).

Brands in US spend $91 bn a year. The % on-line = 6%. 6 freaking percent.

How's this for a no-brainer - what will the # be next year, in five years, in fifteen years?

In a zero-sum world, flat growth, the market will grow from $6bn to $12bn to....yes, $60bn, the same 10x market growth that Mr. Tozzi enjoyed.

In 1982, being long equity turned into a 20+ year bull market run.

In 2011, being long technologies that help brands shift their spend on-line is bet well worth making Bet your money, career, and passions on riding that wave.

10x....find a 10x market and sink your teeth into it.

America Inc.

If you read my blog, you know how passionate I am about our country's fiscal health and the threats we face from entitlement programs. The welfare state is no longer viable.

Mary Meeker's America Inc presentation below is an important contribution to educating all of us regarding the fiscal state of the union.

USA Inc. - A Basic Summary of America's Financial Statements

Running on Empty

In 2005, I wrote the post below on the dangers of entitlement programs to our financial viability and national security. In the intervening six years, the challenges addressed in Pete Peterson's book are only larger and more frightening.

The battle lines drawn this week in Wisconsin mark only the start of a looming battle between public workers and private tax payers.  California, Illinois, New York, and other states face a "Sophies'" choice - raise corporate and income tax rates, slash workers from government payrolls, or renegotiate union contracts.  The future looks bleak, but I take comfort in one important fact. Our leaders will no longer be able to "kick the can" down the road. Moreover, as legislators seek to avoid cutting union benefits, they will be forced to slash discretionary funding for transportation, K12 education, higher education. Such cuts will inflame the voting public and driven an increase in political activity and voter participation. 

The public will, ultimately, side with investments in the future rather than continuing to stomach public entitlements that are much more generous than private employer benefits. The net result for public employees will be higher retirement ages, the elimination of defined benefit programs, and increased medical premium co-pay rates.  In many ways, a new class war is brewing - not, however, between rich and poor but between private sector employees and public sector employees. 

It is time for our leaders to address the roots of our fiscal ills - military spending, social security, medicare...We deserve an honest accounting and an all programs need to be on the table.

2005

Several years ago, Pete Peterson, the founder of Blackstone and an ex-cabinet secretary, wrote an important and sobering book titled Running on Empty.

The book indicts both Republicans and Democrats for ignoring two troubling twin deficits - the the trade deficit and the budget deficit - which, he believes, may ultimately bankrupt the country. The hard-hitting book highlights the off-balance sheet, unfunded entitlement program liabilities that will fall due in the coming decades. With trillions of dollars in Medicaid, social security, and drug benefits promised to current and future retirees, he warns of some very hard choices that face the nation. For example, he estimates if Congress was forced to fund promised entitlement programs, we would face, "an immediate and permanent 60 percent hike in the federal income tax, or a 50 percent cut in Social Security and Medicare benefits."

Recently, news of corporate pension plans failing reminded me of Peterson's important book. For example, Delphi's unfunded pension liabilities present a scary harbinger of what is to come in corporate and government pensions. Delphi, the world's largest auto parts maker, faces an $11bn shortfall in its obligation to retirees. Delphi management, unable to negotiate with the unions, may file for bankruptcy, which would transfer the pension liability to the Pension Benefit Guaranty Corp, a government agency that insures pension plans. Unfortunately, the PBGC is itself underfunded, with assets of $56bn and liabilities of $79.2bn. Total corporate pension plan unfunded liabilities are estimated to be $450bn, well beyond the financial resources of the PBGC. Ultimately, tax payers will be liable for the failings of management to properly fund future obligations.

Roger Lowenstein wrote a wonderful NY Times Magazine article, The End of Pensions, which provides scary and powerful insight into the failing of the defined benefit program and the massive state and local pension obligations that dwarf the corporate dilemma.

Why am I writing about this?

Economic growth is a function of investment. As entitlement spending drives deficits, we will need to finance them with either massive tax increases or massive borrowing to cover our shortfalls. As we borrow more, we will see a higher percentage of our tax base go to interest payments and the lions share of our local, state, and federal budgets go to entitlement spending that reward historical work rather than into investment programs that drive future growth. Both parties appear incapable of addressing this fundamental problem, and I hope that the writings of Peterson, Lowenstein, and others wake the electorate up to the scary prospects of a failing corporate and government pensions and the mortgaging of our future to fund entitlement programs.

Made to Stick, with hat tip to George Orwell

Chip and Dan Health's book, Made to Stick, is a fun read. The sub-title is a good one; "Why Some Ideas Survive and Others Die."

Chip and Dan created a mnemonic framework for evaluating ideas and ensuring their stickiness: SUCCES.

1. Simplicity
2. Unexpectedness
3. Concreteness
4. Credibility
5. Emotions
6. Stories

The Heaths contrast "sticky" language with the all too common, obtuse jargon many tech companies suffer from. 

Orwell's great essay, "Politics and the English Language" is highly relevant to "sticky" positioning. His essay skewers political writing and the overly obtuse, self-important, self-referential writing common to academic publications.

His rules follow:

1. Never use a metaphor, simile, or other figure of speech which you are used to seeing in print
2. Never use a long word when a short word will do
3. If it is possible to cut a word out, always cut it out
4. Never use the passive when you can use the active
5. Never use a foreign word, scientific phrase, or jargon work if you can think of an everday English equivalent 

As we all work to bring technology ideas to market, it pays to think of how to make the ideas "stick." Far too many sites and PDFs sound like the passage below, selected by Orwell for ridicule and an example of what not to do!

"On the one side we have the free personality; by definition it is not 

neurotic, for it has neither conflict nor dream. Its desires, such as 

they are, are transparent, for they are just what institutional approval 

keeps in the forefront of consciousness; another institutional pattern 

would alter their number and intensity; there is little in them that is 

natural, irreducible, or culturally dangerous. But ON THE OTHER SIDE, the 

social bond itself is nothing but the mutual reflection of these 

self-secure integrities. Recall the definition of love. Is not this the 

very picture of a small academic? Where is there a place in this hall of 

mirrors for either personality or fraternity? 

         Essay on psychology in POLITICS (New York) "

My Top 10 Reads of the Last Year

I have a few friends who email me regularly for book recommendations.  I write to share my top favorite books of the last year.  All wonderful stories.

1. The Hangman's Daughter by Oliver Potzsch
2. The Last Child by John Hart
3. The King of Lies by John Hart
4. Conn Ingulden's Genghis Series (4 books)
5. The Book Thief by Markus Zusak
6. Shadow of the Wind by Carlos Ruiz Zafon
7. The Book of Saladin by Tariq Ali
8. Star Island by Carl Hiaasen
9. The Hunger Games Trilogy by Suzanne Collins
10. Getting Even by Woody Allen

Luck

In August 1956, my maternal grandfather, Herbert Merrett, wrote the following poem.

For any athlete, entrepreneur, and pursuer of excellence, the words ring as true today as they did decades ago...

Luck

The luck that I believe in is the

luck which comes with work.

And no-one ever gets it who is

content to wish and shirk.

The men the World call lucky

will you tell you every one

That luck comes not by wishing

but by hard work, bravely done.

Good luck!

Start-up Forecasting

"Forecasting is difficult, especially if it's about the future."

Forecasting start-up revenue is not easy. I write with a few thoughts on how best to handle the need to present financial forecasts vs. the uncertainty inherent in any model.

In general, two forecasting methods exist. The first, tops down, seeks to identify an addressable market and revenue becomes a function of market share. The second, bottoms up, is often best captured by detailed assumptions regarding how to get to revenue. For example, I am partial to the productive sales rep model: W# of sales reps * X rep maturity ramp * Y quota per rep * Z productivity per rep.

In my experience, both models are straightforward to develop. The art lies, however, in the skillful blending of the two approaches to satisfy a board, prospective investor, sales team, etc.

Forecast errors compound across time. Therefore, it pays to focus on three to six month bottoms up plans. A near-term bottoms up plan requires thoughtful detail and projections based on specific variables - how many sales heads, quota, ASP, etc. Operating history then turns the assumed variables into actuals and the model begins to solidify.

Beyond six months, the bottoms up approach is simply an exercise in guess work. How then should a management team think about the long-term?  I have found two useful models. The first is to examine historical comparables - for analog companies, what was the revenue ramp rate?  A model can be focus on projections that assume either the average, median, or top decile growth rates for comprable companies. Ie - it happened before and history looked like $xm, $ym, and $zm over three years.

Another model is to set strategic market share goals. In essence, the long term plan focuses more on clearly defining an addressable market and a strategic goal of capturing x% of the market.  Again, the art lies in defining the market, the market's growth rates, and a strategy for competing for 20-30% of the market at large.

It pays to invest in both near-term detail and longer term aspirations. The former assuages board members and investors and provides them confidence in your operating bona fides. The latter fires the imagination and helps paint the picture of how a very large, venture return company can be built.

The Power of Frameworks - Respect the Process

After winning the Orange Bowl, Jim Harbaugh saluted his team for "respecting the process." 

Stanford's Carol Dweck (must read book MindSet) argues that growth-mindset people focus on the "process and not the outcome."

With an outcome in their sights (lose weight, sell more, pick new year's resolutions, rebrand), most people jump right in.

However, outcomes are derivative of commitment to a sound process. Without a clear process, most people fail or practice random acts of violence that may or may not work.

Since becoming a CEO, I have come to appreciate the wisdom of frameworks and processes.  Whenever I think about an outcome, I must catch my enthusiasm to reach it and instead, step back, and define a process for how to realize the goal.  The universal application of "process vs outcomes" is very real. In fact, I find that any process is better than no process at all and the specific process matters far less than committing to one.

For example, how did you pick your New Year's Resolutions?  How are you planning to lose weight?  How will you develop a strategic development plan? Forecast sales....Develop software?

To take one example - New Year's Resolutions - the American Association of Happiness happens to have a very handy framework with which to develop a sound list.  MAPS - pursue personal resolutions that will result in MEANING - AUTHENTICITY - PURPOSE - STRENGTHS.

I would argue that the power of frameworks compounds across the # of team members - ie the more people that you have working to a goal, the more value you will derive from a joint commitment to a process. Why? Frameworks provide a common mental model, semantics, structure that help overcome individual idiosyncrasies and biases. The shared model provides a vocabulary for common action, dialog, and progress. Without a framework, individual biases will make communication challenging - leading to frustration and failed missions.

Little in the world is truly new. For any particular goal - running a marathon, swimming a mile, to brand positioning - there are sound frameworks. The value of frameworks helps teams focus on the "upstream" work that will lead to the outcome rather than the outcome itself. Moreover, the value of a process compounds with the # of team members - the larger the team the greater the value.