vsagarv: progammer > engineer > entrepreneur

(Disclaimer: I haven't raised VC money yet. Take this post as an opinion.)

Chris Dixon's (Hunch.com & Founder Collective) recent post "Pitch yourself, not your idea" is making some discussion. He says that entrepreneurs trying to raise money should pitch their team's past "building experience" to the VCs and not (only) their idea. It is a different matter that some of his readers missed this key point and went off debating on a tangent (because of his provocative but valid assertion "The reality is ideas don’t matter that much. ...").

Chris is an entrepreneur and a VC. He has always been quite sensible in his posts. That should be a good enough reason to give some serious thought to the core of his argument. Which I did. And found that it is a 2-way street.

Just as ideas don't matter much, money doesn't either. There is good money and then there is the other kind. Entrepreneurs know it. So, a VC-firm that hopes to attract the right kind of people to invest in, should pitch itself as a team that has done successful investments in the past and not just pitch the size of its fund alone. Because, apart from money, entrepreneurs expect clear advice, support in rough weather, opening the right kind of doors, speaking for the startup and the like. If a VC does not have such a track record, good entrepreneurs would give him a pass.

We had our first board meeting today. It was quite satisfying. Not just because the board agreed with what we presented but because of the quality of questions the members asked us.

Founders can pick a board that drinks all the kool-aid given to it. It is quite tempting to exercise total control over the board.

Or, for the love of their startup, they can pick a board that asks tough (& purposeful) questions while strongly sharing the founders' vision of the product & company.

As one of our board observers rightly noted, asking the right questions is not easy. It needs a keen appreciation of the product as well as a genuine concern about the welfare of the company. Compare these two (hypothetical) questions in a board meeting:

• "Why should your product succeed when the space is getting so crowded?" (back to checking emails in the meeting)

and

• "From your presentation I can see that the product proposition is strong. But do you have specific plans to get an early foothold in this fast crowding market? Why haven't you identified an MVP (minimum viable product) yet? Let's discuss this further after the meeting."

Q.E.D.

(Disclaimer: I deeply believe that good technologists can run any enterprise, even art houses).

A couple of days back, Newsweek's Daniel Lyons wrote of Microsoft's lacklustre performance under Steve Ballmer's leadership. These lines, in my opinion, are at the core of Lyon's argument about why MSFT was better off in the hands of Bill Gates:

Ballmer is by all accounts an incredibly bright and intensely competitive guy. But he's no Bill Gates. Gates was a software geek. He understood technology. Ballmer is a business guy.

Tech companies must be run by real good tech people. This blindingly simple concept seems to escape many minds. Banks are run by financial experts. Universities are headed by academicians. Law firms by lawyers, Hospitals by doctors, Wall.St by Mafia (ok, MBAs). However, as soon as a tech startup begins to see financial success, "biz" people try to get into the act of running it.

Engineers of a tech company must believe that they have a CEO who understands & speaks their language. Else, instead of heated debates on killer product features, their water cooler discussions tend towards joint ROTFLs with anecdotes of Wally, Dilbert and the ever clueless PHB.

"The thrill of possibility, the chance for recognition, the chemical high of anticipation.That's what people pay for." - Seth Godin

Don't take Godin's words literally and say that people also pay for their plain bread loaf daily. If you are a startup making bread loaves, good for you and read no further.

Many of us in the startup space start out with dreams of changing the world. (Being the next Google is secondary; We actually dream of dwarfing GOOG). But then, quite mysteriously, we tend to forget that dream while conceptualising & engineering the product. For example:

• "Aggregation / mashup / kitchen sink": My product has all the features that all competitors have. [So, what? Can it change the world?]
• "Differentiated": My product has features that no one else has out there. [So, what? ...]
• "Improved": My product improves productivity / experience. [So? ...]

Those are actually examples of subtly disguised "me too" products. Since there's no 'thrill of possibility', such products are at the mercy of luck.

'Am writing this post immediately after reading Paul Krugman's post The aura strikes back. Do take a couple of minutes to read it. It shows how things appear 'inevitable', when the right time comes. I saw a key message in what Krugman said, when applied to startups (longshot, but I am trying it :).

I had said earlier, that startups cannot afford to be humble. Now, I think that they cannot afford not being inevitable (& invincible) either.

For a startup, "being inevitable" is not a fancy idea but a question of survival. Customers may root for an underdog on very rare cases (Apple, before its recent resurgence). However, it is safe to say that no one wants to throw their money & ownership-pride, on things that are being routed in the marketplace by a far superior competing product.

If you let your target audience (online video viewers in our company's case) suspect that you are not [going to be] a phenomenon and that you do not have an aura of inevitability (& invincibility), they will just go elsewhere.

Sit back and think how you can exude that aura, just so you don't die. Coming second is sometimes the same as getting killed.

A friend of mine forwarded me this article on Gervais Principle, a few days back. It uses 'The Office' TV series, to argue the validity of Gervais Principle and contrast it against the 'incorrect' Peter and Dilbert principles.

The theory draws heavily from this Hugh MacLeod (gapingvoid)'s illustration about organisation heirarchy.

Though the article itself made an interesting read, I couldn't conclude how much of the principle is true (i.e., proven / provable) and how much of it is yet another couch fantasy of a management theorist.

Here is the Gervais Principle. Do let me know if you have seen this principle to be true (a binary 'yes' / 'no' would do; I know you are busy :)

Sociopaths, in their own best interests, knowingly promote over-performing losers into middle-management, groom under-performing losers into sociopaths, and leave the average bare-minimum-effort losers to fend for themselves.

[Note: Apparently, the terms 'sociopath', 'clueless' and 'loser' are not to be understood entirely by their commonly understood meanings, but primarily as mnemonics that aid presenting the theory]

The 4 of us came together with great mutual faith to do our startup. However, we understand that times need not be the same always and inter-founder disputes might arise (see #17 in Paul Graham's "18 mistakes that kill a startup"). So, just yesterday, we sat down and came up with a resolution method.

Ground rule: Differences of opinion regarding the day-to-day running of the company are not "inter-founder" disputes. The CEO, by definition, decides on such matters. The resolution method is relevant only for inter-founder differences regarding:

    - Funding (when, what valuations, which VC)
    - M&A (when, what valuations, which company)
    - Hiring
    - Vision (any significant change in the vision of the product/company)
    - & Founder exit

The method: Any of the 4 of us can call for a vote on a perceived dispute. Majority decision prevails. However, in case of a deadlock, we refer the dispute to one of our advisors and let him resolve it (either by a "casting-vote" or through a midway path as per his wisdom).

How do you do this in your startup?

@h__r__j just tweeted "h__r__j Heavy SEO = Search Engine Spamming. I mostly agree with this: http://powazek.com/posts/2090".
Derek's scathing post exposes the scam of "SEO experts" and matches very much with my SEO experience.

Recently, a children's library with a social cause "Hippocampus" approached @kishoreak for advice on SEO; I joined him for the meeting. Losing no time, we spake thus to the library administrator (a very bright and energetic young lady) a few key things:

• SEO experts usually peddle unadulterated snake oil.
• SEO will take care of itself if your website's content reflects what you do.Let the website layout be intuitive to your target audience (Kids? Or parents?). They are the ones who decide whether your site is good or bad.
• Avoid silly mistakes: Don't give the same title for all the pages. Don't have the same URL for all the content (how will anyone bookmark an internal page, if it has no unique URL?). Don't go overboard with Flash and AJAX when presenting key content.
• The bots just follow user activity: Engage genuinely with your audience. Invite kids for book reading sessions. Have contests. Have a good presence on facebook/Myspace/orkut. Converse/stream on Twitter. When genuinely engaged, the people with you on these media naturally make your website popular too. SEO is an automatic byproduct.

She seems to have understood it. If she was thinking of hiring "SEO experts", I am sure we left her with thoughts of putting that money to good use :^)

Evening coffee; product/platform discussion:

Me: "We should assume that developers out there are way smarter than us and will find ways of improving our product, once we open it up".

V: (quickly caught my drift and smiling) "You say _assume_, but you obviously don't _believe_ it. Do you?"

That's a startup's hubris for you. With just 7 people, you can't afford to be humble and still dream of beating the big boys in the game, red, black and blue.

int main(void)
{
    printf("hello, world!\n");
    return 0;
}