One of the things I hear again and again from my friends and peers is: "Justin, I admire your bravery and ability to take the risk and start a company. I could never do that." Initially I thought they were right, but my experience has given me a different perspective. What I learned though, is that the risks and sacrifices you have to make will be more than worth it in the end.
In the beginning of a company’s story, you will be forced to sacrifice some nice things and take some great risks in the name of success for your business. Most people see starting a company as a risky endeavor because they automatically assume that there will be failure. If you start a company from the viewpoint, "we have to succeed” failure is a lot harder because you really don't want to fail. This attitude will allow you to make different and better decisions because you really don't want to clean up the mess. This alone will eliminate a lot of risk. Conservative cash utilization, being pragmatic, and working on something you really believe in are some of the results.
Another interesting and often overlooked aspect is that the sacrifices necessary to building a startup aren't actually that expensive. Here’s my view of some of those sacrifices, and how they can be justified.
Time: By far one of the largest costs. However, when you compare the ROI of your time spend in an education and experience point of view, you will easily be getting 2 times the value by working on a new venture. Many people throw away countless days of their life idling in useless actions, or at jobs they don't like, doing work that doesn't have a larger impact on society. As an entrepreneur starting a new company, you could potentially spend years building your business. So my question for those who feel like they have wasted years of their lives, running on the corporate treadmill -- if you we're able to spend those years on any mission or problem you want, what would you pick? If it’s what you are doing now, then great! If not, start a company to meet that need. That way, you will never feel like you "wasted those years away."
Personal Cash Flow: Money is another big sacrifice. People at different life stages will have varying levels of sacrifice. For example, individuals with spouses, kids, and a house have much more cash burn than a younger single person. The real key is to try to keep costs very low so that you can accumulate cash. This is something I did accidentally. With this bootstrapping mindset you can make career choices not solely based on compensation. In a startup your income will be significantly lower in the beginning. However, your 'earning potential' will grow substantially from the experience that often comes from 'wearing many hats' at a startup.
Opportunity Cost: When you say yes, it will mean that you will have to say no to other things. In the next few years, what will starting this company mean for you? What will you have to give up? I’m sure the list will be plenty. Of those things, what can be pushed to a later date in life and what do you have to do now?
Spare Time & Other Hobbies: Similar to your business opportunity costs, this sacrifice relates to opportunities within your free time. During the early stages of a startup, your free time gets really pinched and will no doubt be short on supply. Most likely your personal hobbies will fall by the wayside, and you will discover new hobbies that revolve around your new business. This is great, these hobbies will broaden your skill set and will push you to explore all facets of your startup.
These are the risks and sacrifices of starting your own company. So why does this matter? My argument is that if you lose a few of these things, even just temporarily, they will either be easy to get back, or they will come back much stronger after the company gets going. Realizing how much personal value that PerBlue has provided for my life, there is not a day that goes by that I regret starting it. As more time goes by, the more I get out of it- in the form of education, financial, skills, people connections, even travel opportunities!
What I can promise you is that even though you put super boat loads of time and effort into building your business, ultimately the company will give you much more in return!
Monday, December 12, 2011
Wednesday, November 30, 2011
What "Churn" Does For a Community
Churn Rate: The measure of individuals moving into or out of a collective over a period of time.What does Silicon Valley have a lot of? Churn. Entrepreneurs found a company then move on to work at another company as a VP or create another company. Then they move on to be an angel investor to other companies. While churn can be particularly annoying for an employer, it is ultimately good for the community as a whole. When people get too settled or stagnant, they become unproductive and there is no cross pollination of ideas or proactive growing.
I’ve found the entrepreneurial space is an extremely small world. In a city like Madison that is full of entrepreneurs, it is absolutely essential that these individuals leave their companies and start new ventures. Think about the folks from Alice.com and Shoutlet. Both are new million dollar companies that were started by the founders of Jellyfish.com (a shopping deals site founded in 2006 and sold to Microsoft months later for an estimated $50M).
We need more founders and early stage employees to fly from the nest and go on to start new companies. This is my "eventual" dream for PerBlue employees. I would ultimately like PerBlue employees to be known for starting a bunch more awesome successful, profitable, and great companies that change the world.
The best form of success for an entrepreneur is to create churn. We need to inspire passion for entrepreneurship and entrepreneurs need to instill their own lessons learned along the way to early stage employees. The ability to look past the P&L statements and the sunk costs of losing an employee in order to inspire other entrepreneurs will allow us to create more churn within the community and drive real value into Madison.
We started PerBlue in 2008 at the beginning of the recession. The funny thing about our outlook was that the recession did not scare us at all. I remember it took a while for me to realize the scale of what we were trying to accomplish. My attitude was, "Wow starting a company in a recession is amazing. There are so many talented people who are available to join our team."
Three years later, we now gainfully employ over 35 full time people doing artwork, engineering, marketing, and community support. All are white collar jobs in a great work environment with an awesome culture that has extremely high job satisfaction. It almost reminds me of the Joker’s famous line in The Black Knight, "Look what I did to this city with a few bullets and a few barrels of gasoline," except more like: "Look what we created with a few thousand bucks and a couple of have shot ideas."
If we really want to cure unemployment in this country, we need to spark more churn within ourselves and our companies. We need to invest in people who are creating value in young companies (not small companies but young companies). Do you have something that you absolutely hate about the world, something that just needs to be better? Maybe something that shouldn't be the way it is currently? Catch the entrepreneurial spirit and start a company dedicated to solving that problem or filling that need. Unite others who are passionate about the same things and dedicate that team to changing them... or die trying.
This risk is without a doubt worth taking.
Monday, November 7, 2011
Advice for Entrepreneurs
Last week, Forrest Woolworth and I participated on the “Campus Entrepreneurism: Fad or Fixture” panel at the Wisconsin Early Stage Symposium . We had a great time, and I’d like to share with you some of the great entrepreneurial advice that came from the event. Watch the full video from the panel at the end of this post.
How did PerBlue start?
Justin: When we first started, the idea was really simple. We wanted to make another game. There were 4 goals in mind: the game would be played on the phone, it had to be fun, it had to make money, and just for kicks, it would use the phone’s GPS. We were bored with homework at about 4 am, and decided to start right there and then.
What was the key turning point of success for PerBlue?
Justin: My key moment was November 23rd, 2009. At that point most of us were still in school, we had been working insane hours for no pay. We were trying to ship a new age, one that would integrate our Virtual Good business model and finally make us money. I remember telling myself, “If we don’t make any money tomorrow, we’ll shut the whole thing down and I will be very happy. This has been fun, it was a great adventure, and we did our best.”
We woke up the next morning and we had made about $5,000. That was the turning point of success for PerBlue and Parallel Kingdom , because revenue is my biggest metric for success. It showed that my time spent productizing something, and then putting it on a shelf and selling it, was ultimately worth it. Earning revenue after productizing time and talent, was a key benchmark of success for me and the company as a whole.
What resources are available student entrepreneurs?
Justin: There are a ton of resources available for students, the real question is: what should they be doing? The really smart ones are the ones that are seeking out mentors, networking, and getting connected to Angel networks. They are getting practice pitching and tapping into the peer-to-peer network of advisors. The learning curve is so steep for entrepreneurs, you need a really good group of advisors. Tap into these resources as you go, call them up as you need advice. I’ve found that the best advice comes from mentor and friendship relationships.
Forrest: That’s what makes Capital Entrepreneurs so valuable. So many of our members come from such a variety of backgrounds and businesses, they can provide a unique perspective for a variety of questions or issues. Having this great network of peer connections is invaluable to asking and receiving great advice. There are also so many resources on campus, like Wiscontrepreneur at the Wisconsin Institute for Discovery.
Should entrepreneurs worry about sharing their ideas?
Forrest: Ideas are pretty much worthless, they are a dime a dozen. What it really comes down to is execution. There are very few people in the world that could actually execute your ideas. So my advice is, don’t be afraid to share your ideas. Bounce them off your peers to get feedback. They can help you focus and refine your ideas. Talking about your ideas is actually a really good idea and something I would encourage.
What is scary about venturing out as an entrepreneur?
Justin: There are two things that are scary things for me, even now. The first is looking back and watching everyone follow you. Today I have 35 people who follow me, but even in the beginning with just a small group of us, it was still scary. If you fail, you are responsible for leading your team down the wrong path. That is the scariest thing for me as an entrepreneur. I was never afraid of the sacrifices I was making as an individual, because in my mind in the worst case scenario- I just go get a job.
The second thing that is scary to me is staying balanced and on track. Entrepreneurship is like always walking a tightrope. If you are not constantly providing correction to your balance, it feels like you’re always on the verge of falling off. Some days it seems like you have 15,000 things pulling you off this rope, and it takes a lot of work just to stay balanced. Keeping a team together, that’s hard. Keeping a product laser focused, that’s hard. Cranking out revenue, that’s hard. Everything is hard. That’s what’s scary! When you live your life on this tightrope, you get really used to having your adrenaline pumped all the time. I think being a little of an adrenaline junky is also helpful.
What is your advice for student entrepreneurs?
Forrest: The execution aspect of ideas is key. If you have an idea, don’t’ say ‘oh, it’d be cool if we did this.’ Just go and do it. Don’t ask questions or leave any room for fear. Make your ideas a reality. That’s how PerBlue and Capital Entrepreneurs came about. We saw a need and we filled it. We wanted to get all of our entrepreneur friends together, so we just did it. We created an organization and now it’s grown to 150 members. I can’t stress it enough, execution is the most important part of being an entrepreneur.
Justin: My advice is actually kind of weird. If you’re in college, slow down. Work for other startups, or even do an internship. As you get closer to the end of your college career, start to decide which market you want to grow your company in, and then build your team. But don’t rush through college to get to your startup. College only comes once and you can do startups for the rest of your life. A startup is a marathon you start running at any point.
So, Campus Entrepreneurism: a Fad or Fixture?
Forrest: College really is the best time to start something. You have very few risks really, you have no assets to lose. In the worst case scenario, you will be in the same place next year as you are today. Slow down, it’s the best piece of advice I have for students. Spend time focusing on your smaller projects, you’re in a place full of so many amazing people and resources to tap into. This is never going to happen again outside of college.
Justin: I’d say fixture, it’s extremely important to encourage entrepreneurship with young people. I hear so many complaints about a poor job market, and I have relatively little sympathy. ‘Hey, start a company.’ We need to create more role models of great companies and great entrepreneurs to get students thinking about entrepreneurship earlier. So many are still stuck in the “I need a job” mentality.
How did PerBlue start?
Justin: When we first started, the idea was really simple. We wanted to make another game. There were 4 goals in mind: the game would be played on the phone, it had to be fun, it had to make money, and just for kicks, it would use the phone’s GPS. We were bored with homework at about 4 am, and decided to start right there and then.
What was the key turning point of success for PerBlue?
Justin: My key moment was November 23rd, 2009. At that point most of us were still in school, we had been working insane hours for no pay. We were trying to ship a new age, one that would integrate our Virtual Good business model and finally make us money. I remember telling myself, “If we don’t make any money tomorrow, we’ll shut the whole thing down and I will be very happy. This has been fun, it was a great adventure, and we did our best.”
We woke up the next morning and we had made about $5,000. That was the turning point of success for PerBlue and Parallel Kingdom , because revenue is my biggest metric for success. It showed that my time spent productizing something, and then putting it on a shelf and selling it, was ultimately worth it. Earning revenue after productizing time and talent, was a key benchmark of success for me and the company as a whole.
What resources are available student entrepreneurs?
Justin: There are a ton of resources available for students, the real question is: what should they be doing? The really smart ones are the ones that are seeking out mentors, networking, and getting connected to Angel networks. They are getting practice pitching and tapping into the peer-to-peer network of advisors. The learning curve is so steep for entrepreneurs, you need a really good group of advisors. Tap into these resources as you go, call them up as you need advice. I’ve found that the best advice comes from mentor and friendship relationships.
Forrest: That’s what makes Capital Entrepreneurs so valuable. So many of our members come from such a variety of backgrounds and businesses, they can provide a unique perspective for a variety of questions or issues. Having this great network of peer connections is invaluable to asking and receiving great advice. There are also so many resources on campus, like Wiscontrepreneur at the Wisconsin Institute for Discovery.
Should entrepreneurs worry about sharing their ideas?
Forrest: Ideas are pretty much worthless, they are a dime a dozen. What it really comes down to is execution. There are very few people in the world that could actually execute your ideas. So my advice is, don’t be afraid to share your ideas. Bounce them off your peers to get feedback. They can help you focus and refine your ideas. Talking about your ideas is actually a really good idea and something I would encourage.
What is scary about venturing out as an entrepreneur?
Justin: There are two things that are scary things for me, even now. The first is looking back and watching everyone follow you. Today I have 35 people who follow me, but even in the beginning with just a small group of us, it was still scary. If you fail, you are responsible for leading your team down the wrong path. That is the scariest thing for me as an entrepreneur. I was never afraid of the sacrifices I was making as an individual, because in my mind in the worst case scenario- I just go get a job.
The second thing that is scary to me is staying balanced and on track. Entrepreneurship is like always walking a tightrope. If you are not constantly providing correction to your balance, it feels like you’re always on the verge of falling off. Some days it seems like you have 15,000 things pulling you off this rope, and it takes a lot of work just to stay balanced. Keeping a team together, that’s hard. Keeping a product laser focused, that’s hard. Cranking out revenue, that’s hard. Everything is hard. That’s what’s scary! When you live your life on this tightrope, you get really used to having your adrenaline pumped all the time. I think being a little of an adrenaline junky is also helpful.
What is your advice for student entrepreneurs?
Forrest: The execution aspect of ideas is key. If you have an idea, don’t’ say ‘oh, it’d be cool if we did this.’ Just go and do it. Don’t ask questions or leave any room for fear. Make your ideas a reality. That’s how PerBlue and Capital Entrepreneurs came about. We saw a need and we filled it. We wanted to get all of our entrepreneur friends together, so we just did it. We created an organization and now it’s grown to 150 members. I can’t stress it enough, execution is the most important part of being an entrepreneur.
Justin: My advice is actually kind of weird. If you’re in college, slow down. Work for other startups, or even do an internship. As you get closer to the end of your college career, start to decide which market you want to grow your company in, and then build your team. But don’t rush through college to get to your startup. College only comes once and you can do startups for the rest of your life. A startup is a marathon you start running at any point.
So, Campus Entrepreneurism: a Fad or Fixture?
Forrest: College really is the best time to start something. You have very few risks really, you have no assets to lose. In the worst case scenario, you will be in the same place next year as you are today. Slow down, it’s the best piece of advice I have for students. Spend time focusing on your smaller projects, you’re in a place full of so many amazing people and resources to tap into. This is never going to happen again outside of college.
Justin: I’d say fixture, it’s extremely important to encourage entrepreneurship with young people. I hear so many complaints about a poor job market, and I have relatively little sympathy. ‘Hey, start a company.’ We need to create more role models of great companies and great entrepreneurs to get students thinking about entrepreneurship earlier. So many are still stuck in the “I need a job” mentality.
Wednesday, November 2, 2011
Negotiation 101
Negotiation is a beautiful thing. You know why? Because it makes everyone involved happier. The best type of negotiation works to find the absolute best results for each party. This type of negotiation is called Win-Win, and can be applied in almost every situation. I’ve found that becoming a skilled and practiced negotiator will make me and the people around me, like my friends, family, business partner, and employees, more happy.
Situations for negations happen all around us, occur during all stages of life, and at all levels of importance. Some examples of negotiation include:
First & Most Importantly: Always try to negotiate, you may be able to get a better deal for both parties. Remember that not negotiating is a conscious choice and has an opportunity cost too.
Set Your Bar: Before you enter the negotiation conversation, commit yourself to your "absolute minimum price." This is the lowest you'll go before selling, or the highest you'll go before buying. Stick to this commitment and press “pause” if you can't get within this range. Tell the other party you'll have to think about it and step away to re-evaluate the deal not in their presence.
TMI: Don't let the other party know your "absolute minimum price." Keep this information to yourself and don't share it.
Communicate: Tell the other party what is important to you. That way, they know where your values lie and will be more apt to giving you those things.
Speak First: Be the first party to offer a price/suggestion/anchor point for the negotiation. If you speak first, you set the standard and more often than not, will hold the advantage. Make your "initial offer" no matter how absurd it is, but always make your offer politely.
If you aren't the first to offer a deal, make sure to respond to theirs promptly and tactfully. For example, if you we're going to propose $150 and they say $5000. Be very polite and say, "I was going to initially offer you more in the $150 range, but lets keep talking." Don't let a huge discrepancy in value cause you to abandon all hope, you never know how flexible a person can be.
Think Outside the Box: Be willing to negotiate on terms other than cash. If price is an issue (which most of the time it is) try to incorporate other things that are important to you into the deal. A few ideas for consideration: timing, quality, what is delivered, and what type of support is attached. If your negotiating with friends, how about homemade cookies, dinner, a backrub, or as my friend Nikill says, "You owe me something small." He’ll hold his fingers up, laugh and say "Just something small."
Tread Lightly: Some deals are more important than others, be more sensitive around larger or emotionally charged deals. It is so much easier for people to walk away faster, or have a strong intuitive reaction telling them to back off when there is a lot is at stake.
Check Yourself: Don't get emotional. Stay calm, pleasant, and overall happy. This will help you stay confident.
Win-Win Negotiation is a powerful tool that can benefit both sides of any deal. Strive to find that "sweet spot" and everyone will walk away happy. As a final note, negotiation is just like anything else - practice makes perfect. Have fun role playing and practice negotiating with friends and family first. You’ll gain confidence and soon be ready to negotiate in other situations where more is at stake.
Here are a few articles I recommend for honing your negotiating skills:
5 Things to Never Say During Negotiation
When To Negotiate
Creating Win-Win Negotiation
12 Tips For People Who Hate Negotiating
Good Luck!
Situations for negations happen all around us, occur during all stages of life, and at all levels of importance. Some examples of negotiation include:
- Child/Parent: Dealing with day to day conflict.
- Siblings: Learning to share toys, clothes, or Mom’s attention.
- Friends: Taking turns while playing.
- Significant Others: Time management, spending an agreeable amount of time together.
- Boss: Pay and compensation rates for an employee.
- Business: Aspects of contracts, partnerships, or funding.
First & Most Importantly: Always try to negotiate, you may be able to get a better deal for both parties. Remember that not negotiating is a conscious choice and has an opportunity cost too.
Set Your Bar: Before you enter the negotiation conversation, commit yourself to your "absolute minimum price." This is the lowest you'll go before selling, or the highest you'll go before buying. Stick to this commitment and press “pause” if you can't get within this range. Tell the other party you'll have to think about it and step away to re-evaluate the deal not in their presence.
TMI: Don't let the other party know your "absolute minimum price." Keep this information to yourself and don't share it.
Communicate: Tell the other party what is important to you. That way, they know where your values lie and will be more apt to giving you those things.
Speak First: Be the first party to offer a price/suggestion/anchor point for the negotiation. If you speak first, you set the standard and more often than not, will hold the advantage. Make your "initial offer" no matter how absurd it is, but always make your offer politely.
If you aren't the first to offer a deal, make sure to respond to theirs promptly and tactfully. For example, if you we're going to propose $150 and they say $5000. Be very polite and say, "I was going to initially offer you more in the $150 range, but lets keep talking." Don't let a huge discrepancy in value cause you to abandon all hope, you never know how flexible a person can be.
Think Outside the Box: Be willing to negotiate on terms other than cash. If price is an issue (which most of the time it is) try to incorporate other things that are important to you into the deal. A few ideas for consideration: timing, quality, what is delivered, and what type of support is attached. If your negotiating with friends, how about homemade cookies, dinner, a backrub, or as my friend Nikill says, "You owe me something small." He’ll hold his fingers up, laugh and say "Just something small."
Tread Lightly: Some deals are more important than others, be more sensitive around larger or emotionally charged deals. It is so much easier for people to walk away faster, or have a strong intuitive reaction telling them to back off when there is a lot is at stake.
Check Yourself: Don't get emotional. Stay calm, pleasant, and overall happy. This will help you stay confident.
Win-Win Negotiation is a powerful tool that can benefit both sides of any deal. Strive to find that "sweet spot" and everyone will walk away happy. As a final note, negotiation is just like anything else - practice makes perfect. Have fun role playing and practice negotiating with friends and family first. You’ll gain confidence and soon be ready to negotiate in other situations where more is at stake.
Here are a few articles I recommend for honing your negotiating skills:
5 Things to Never Say During Negotiation
When To Negotiate
Creating Win-Win Negotiation
12 Tips For People Who Hate Negotiating
Good Luck!
Tuesday, October 25, 2011
CEO Sunday - "Design to Sell. Build to Keep"
In my post I break down PerBlue’s vision “Design to Sell. Build to Keep.” and discuss how we used these principals to build a profitable company in just three years. I dive into the key attributes other high growth and venture backed businesses should utilize to align with these principals. Be sure to read the full blog post on Tech.li.
Monday, October 10, 2011
College 101
Last week I had the chance to speak at the University of Wisconsin-Madison College of Engineering. This is the fourth year I’ve spoken to first semester freshman in their InterEGR 101 class. The class invites engineers from all career paths to discuss their journey from a student to a professional. During my time on campus, I gave advice about my experience as a student, intern and now as CEO at PerBlue. Here are a few tips that I highlight during the presentation:
Do an internship EVERY summer
If I could do it all over again, I’d go to school for 6 years and do 4 internships. My summers spent at Microsoft and Google were some of the most rewarding experiences. You will learn more during a three month internship than during all of college.
Work Hard and Smart
I cannot stress this enough- the difference between the perception of a smart person and a dumb person- is resourcefulness. We live in a world where information is at the tips of our fingers at any given point. Don’t know the answer? Google it, find a work around and a solution. The information exists out there. Dumb people find a roadblock and stop. Be a smart person, be resourceful.
Prioritize
Make a list of everything you need to do, I mean absolutely everything you can think of that needs to get done in the near future. Laundry, homework, study for that test, feed the cat. Write it all down. Now cross off the bottom of the list. Don’t think about it, don’t even consider doing these items. I guarantee this abbreviated list will provide you more value than completing the entire list. Your most important work (the stuff you didn’t cross off) will always produce the most value. 20% of what you do will produce 80% of the value.
Sleep and Slow Down
Slow down your college life. You will have better ROI from your classes, have more fun with your student organizations and with your friends. Slowing down is a simple decision, but it will affect everything.
Sleep- I love to sleep, I sleep between 9 and 10 hours every night. It keeps me healthy, I’m more alert and energetic. Slow down and sleep more, these simple choices will give you so much more enjoyment and reward from your college experience and beyond
Keep Learning
Learning is a constant process throughout life. Dedicate yourself to learning throughout the rest of your life. Start by answering these two questions:
Surround Yourself with Great People
The most important thing I got out of college was the people I met. Life is too short to spend time with dopes. Surround yourself with people you admire, people who you like and people who are smarter than you. They will push you to be a better, smarter and more well-rounded person.
Here is the full video from class:
Do an internship EVERY summer
If I could do it all over again, I’d go to school for 6 years and do 4 internships. My summers spent at Microsoft and Google were some of the most rewarding experiences. You will learn more during a three month internship than during all of college.
Work Hard and Smart
I cannot stress this enough- the difference between the perception of a smart person and a dumb person- is resourcefulness. We live in a world where information is at the tips of our fingers at any given point. Don’t know the answer? Google it, find a work around and a solution. The information exists out there. Dumb people find a roadblock and stop. Be a smart person, be resourceful.
Prioritize
Make a list of everything you need to do, I mean absolutely everything you can think of that needs to get done in the near future. Laundry, homework, study for that test, feed the cat. Write it all down. Now cross off the bottom of the list. Don’t think about it, don’t even consider doing these items. I guarantee this abbreviated list will provide you more value than completing the entire list. Your most important work (the stuff you didn’t cross off) will always produce the most value. 20% of what you do will produce 80% of the value.
Sleep and Slow Down
Slow down your college life. You will have better ROI from your classes, have more fun with your student organizations and with your friends. Slowing down is a simple decision, but it will affect everything.
Sleep- I love to sleep, I sleep between 9 and 10 hours every night. It keeps me healthy, I’m more alert and energetic. Slow down and sleep more, these simple choices will give you so much more enjoyment and reward from your college experience and beyond
Keep Learning
Learning is a constant process throughout life. Dedicate yourself to learning throughout the rest of your life. Start by answering these two questions:
- How do I learn best?
- What topics interest me?
Surround Yourself with Great People
The most important thing I got out of college was the people I met. Life is too short to spend time with dopes. Surround yourself with people you admire, people who you like and people who are smarter than you. They will push you to be a better, smarter and more well-rounded person.
Here is the full video from class:
Thursday, October 6, 2011
Four Macros I Would Invest In
Recently I've been much more interested in exploring investment opportunities, more for intellectual curiosity than anything else. As PerBlue develops in its market and among its competitors, evaluating other markets is one of the most important things I can do in my current role as CEO. Investors often think in a very similar fashion.
So let’s get right to the point. I think one of this most important aspects of making a successful business is putting yourself in the right market and industry [this is a macro]. Often the macro is even more important than the product, and in some cases, happens before you even have a team. Macros are critical for investment, especially when there is so little certainly in a particular product or new team. With a good macro selection, even a poorly executed company can thrive and grow by pivoting and finding out who they are and who they should become.
Here are four macros that I think rock.
1. Gamification of Real-World Verticals
This is taking game design, referral marketing, business metrics, user psychology, and emotional attachment and integrating all of them into a vertical non-gaming business segment. FourSquare has already gamified traveling to and trying out new places by incentivizing users with a points and badge system. Here are a few other possibilities:
2. Customer Acquisition Platforms
One of the hardest problems in every business (product or service) is finding a good source of customers. This is an extremely huge problem, but when improved, is something that can provide a lot of money and capital. When you look at some of the biggest tech companies you'll see on thing in common.
Each of these companies core product is a platform for customer discovery and acquisition. I would love to see more customer acquisition platforms being developed and implemented.
3. Business Metrics
At PerBlue we use metrics extensively to improve our business. Metrics are an amazingly powerful tool and a huge trend right now. By putting the right measurements in place, any business can quickly discover the current status of their model and improve upon it.
In a lot of ways, the business metrics space is still very underdeveloped. I think the data tracking and question asking/answering business is going to be huge. Why? Because businesses are always trying to improve, and outsourcing to a company to collect data, analyze it and make suggestions to help improve a business will be absolute gold. Here are a few businesses that I think will grow from the Analytics Revolution:
New businesses could also be a mixture of the two, or even just provide detail metrics systems for different vertical business.
4. Virtual Goods / Currency Connected Businesses
We've learned the power of virtual goods and currencies with Parallel Kingdom. I see a growing segment of businesses and products that can also utilize this business model. Some basic products similar to Tapjoy's product line, with things like branded virtual goods and virtual goods for charities, you could provide analytic tools for monitoring and measuring your goods and currencies. There is also an opportunity to be a middle market for the trading of these virtual currencies, or aggregate currencies for alternative payment sources. Another option is to become the bank for different virtual currencies. You could also be an auction house or a secured trading broker for different goods across markets.
The thing I love most about business is that once you are neck deep in one area, you can see much clearer how to get neck deep in another vertical or market. If you are building a business in one of the spaces I mentioned above, I'd love to hear about it. Please feel free to reach out to me, I'll provide some critical feedback, and would love to help you.
For those who are currently in different macros, I encourage you to ask yourself, “Is this a great macro to be in?”
So let’s get right to the point. I think one of this most important aspects of making a successful business is putting yourself in the right market and industry [this is a macro]. Often the macro is even more important than the product, and in some cases, happens before you even have a team. Macros are critical for investment, especially when there is so little certainly in a particular product or new team. With a good macro selection, even a poorly executed company can thrive and grow by pivoting and finding out who they are and who they should become.
Here are four macros that I think rock.
1. Gamification of Real-World Verticals
This is taking game design, referral marketing, business metrics, user psychology, and emotional attachment and integrating all of them into a vertical non-gaming business segment. FourSquare has already gamified traveling to and trying out new places by incentivizing users with a points and badge system. Here are a few other possibilities:
- Games and leaderboards at the gym. Who benched the most weight last week?
- Banks could reward their account holders by applying lottery mechanisms to adding money into a saving accounts each month.
- Math homework would be so much more fun if completing it earned you achievement points and placement on a leaderboard at school.
2. Customer Acquisition Platforms
One of the hardest problems in every business (product or service) is finding a good source of customers. This is an extremely huge problem, but when improved, is something that can provide a lot of money and capital. When you look at some of the biggest tech companies you'll see on thing in common.
- What is Google AdWords? A search-based tool for attracting customers.
- What is Facebook? A viral marketing tool to reach customers.
- What is Amazon? A platform to drive customers to products.
Each of these companies core product is a platform for customer discovery and acquisition. I would love to see more customer acquisition platforms being developed and implemented.
3. Business Metrics
At PerBlue we use metrics extensively to improve our business. Metrics are an amazingly powerful tool and a huge trend right now. By putting the right measurements in place, any business can quickly discover the current status of their model and improve upon it.
In a lot of ways, the business metrics space is still very underdeveloped. I think the data tracking and question asking/answering business is going to be huge. Why? Because businesses are always trying to improve, and outsourcing to a company to collect data, analyze it and make suggestions to help improve a business will be absolute gold. Here are a few businesses that I think will grow from the Analytics Revolution:
- Analytical Technology Companies: Provide reporting, querying tools, tracking sensors, and data acquisition systems.
- Analytic Staffing Companies: Provide staffing resources for measuring, collecting and running analysis, and then using the data to create concrete solutions for the needs of a business.
New businesses could also be a mixture of the two, or even just provide detail metrics systems for different vertical business.
4. Virtual Goods / Currency Connected Businesses
We've learned the power of virtual goods and currencies with Parallel Kingdom. I see a growing segment of businesses and products that can also utilize this business model. Some basic products similar to Tapjoy's product line, with things like branded virtual goods and virtual goods for charities, you could provide analytic tools for monitoring and measuring your goods and currencies. There is also an opportunity to be a middle market for the trading of these virtual currencies, or aggregate currencies for alternative payment sources. Another option is to become the bank for different virtual currencies. You could also be an auction house or a secured trading broker for different goods across markets.
The thing I love most about business is that once you are neck deep in one area, you can see much clearer how to get neck deep in another vertical or market. If you are building a business in one of the spaces I mentioned above, I'd love to hear about it. Please feel free to reach out to me, I'll provide some critical feedback, and would love to help you.
For those who are currently in different macros, I encourage you to ask yourself, “Is this a great macro to be in?”
Monday, August 1, 2011
Happy Brains are Productive Brains
Happy brains are productive brains. Happy people make more money and do better work.They have a wider scope of attention, they see issues and risks sooner. They are more productive, sociable, energetic, cooperative, creative, resilient, successful and engaged. They are healthier and live longer.
Happiness is about 50% genetic, 10% circumstances and 40% intentional (controllable) activity.
To work for happiness: Flow toward important goals-Set goals, make and measure progress toward goals. Make goals that use your strengths. Finding and fixing weaknesses is not the way to go. When managing people, find and use strengths in yourself and your team.
Flow-skill and challenge meet at a high level, just enough brain to do this task so you really have to focus on it. You get in the zone, just you and the task. Flow is one of happiest and most productive states of mind. Don't distract yourself with multi-tasking, it breaks flow.
Strive to maintain a positive attitude-Be actively optimistic. Write down the best possible future (for self, team, etc.) Pay attention to positive things in your life. The best (most productive) teams have a ratio of positive to negative comments of 5:1. 3:1 or better ratio minimum to build good teams, keep people in positive frame of mind.
Invest in people and relationships-#1 indicator for happiness in people's lives is the quantity and quality of the relationships they have. Ti boosts coping ability which reduces stress, boosts happiness. Happiness is contagious.
Credit: GDC talk by Scott Crabtree
Happiness is about 50% genetic, 10% circumstances and 40% intentional (controllable) activity.
To work for happiness: Flow toward important goals-Set goals, make and measure progress toward goals. Make goals that use your strengths. Finding and fixing weaknesses is not the way to go. When managing people, find and use strengths in yourself and your team.
Flow-skill and challenge meet at a high level, just enough brain to do this task so you really have to focus on it. You get in the zone, just you and the task. Flow is one of happiest and most productive states of mind. Don't distract yourself with multi-tasking, it breaks flow.
Strive to maintain a positive attitude-Be actively optimistic. Write down the best possible future (for self, team, etc.) Pay attention to positive things in your life. The best (most productive) teams have a ratio of positive to negative comments of 5:1. 3:1 or better ratio minimum to build good teams, keep people in positive frame of mind.
Invest in people and relationships-#1 indicator for happiness in people's lives is the quantity and quality of the relationships they have. Ti boosts coping ability which reduces stress, boosts happiness. Happiness is contagious.
Credit: GDC talk by Scott Crabtree
Friday, July 22, 2011
Europe Motorcycle Trip
At the start of the summer this year, I took a motorcycle trip through the Alps in Europe. I started in Italy, went to France, up into Switzerland, into Austria, down into Slovenia, into Croatia, then back into Italy, down to Rome and was done.
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I had 3 Trip goals:
1. Get there
2. Drive and take pictures everyday
3. Arrive back in the states with all limbs intact
The Format of Travel
Many of the Lessons Learned
Quote of the trip "I am so screwed"
I am pretty sure I said that sentence at least 100 times. Oh the stories. I thank God every time.
Facebook Photos
Download Full KML
I had 3 Trip goals:
1. Get there
2. Drive and take pictures everyday
3. Arrive back in the states with all limbs intact
The Format of Travel
I would wake up around 9:30 after getting about 8 to 10 hours of sleep. I would use the
internet and cache Google maps for the area I was heading to. I'd check email, maybe send a few replies then leave. My routes were not really planned, but I would know the general direction I wanted to go. I would confirm every once in a while to make sure I was going the right direction. Sometimes I chose the city I was going to and even the hostel before I would leave (it was important to do that before I left since I didn't have internet or phone once on the road), sometimes I would just go and find a hostel or a random hotel when I got to my destination. I'd check in at my destination between 7 and 11pm, park and unpack the bike, relax, and ask around to find some dinner. Sometimes I would miss lunch, but I always ate a good dinner.
I would get gas about every 230-300 km, always filling up to brim (you never know when you'll need that extra gas). I almost ran out of gas a few times. I carried everything essential in small tank bag (purse) that I took with me when I left the bike. I would leave my coat, helmet, and other clothing bags strapped on bike. I packed 4 sets of cloths and a variety of other items: 3 travel shirts,1 travel pants, 2 going out shirts, 1 going out pants, 6 pairs of socks, 4 underwear, gym shorts, a swim suit, winter jacket and spring jacket, winter gloves and light gloves. I used pretty much everything except my rain coat. I didn’t bring a laptop, just my iPhone. If I did it again I would get an international phone, SIM card, and minutes. There are many times I wanted to use a phone and it would have been very handy and removed quite a bit of stress. I learned to follow my intuition pretty closely for gas, roads and weather. It was amazingly helpful and right most of the time. Amazing!
Many of the Lessons Learned
- Wine and beer is free on international flights
- Never send out the rookie chef send the king chef
- International travel is not for pussies
- Alps by motorcycle is for the insane
- Europe by hostel, train and city walking is a cake walk compared to motorcycle distance travel
- Friends make friends spend more money
- When traveling for long periods of time: don't book your return ticket till you are ready to home, having it makes you home sick
- For really long trips take someone with you
- Trust your intuition with travel: when to stop, eat, when to leave.
- Having cash of the right currency in your pocket gives you a sense of security
- Always have at least 100-150 bucks of appropriate currency in your wallet. Always!
- ATM's are your best friend
- Credit cards don't always work
- French and Italian women are beautiful
- If you travel a long time, don't rent something, just buy a bike
- Traveling Europe long distance and bike rental is very expensive
- Always check the map before you pass through the toll
- Tolls are REALLY expensive
- Gas is approx 2-3x more expensive per gallon in Europe
- Always double lock your bike
- In Rome (Italy in general) watch for thieves and pickpockets
- Don't order American-like food, its not that good. You're better off picking something random you don't know than the American standard
- In France: get gas before noon or from 2:15 to 8pm in the evening otherwise everything closes… and you ain't going anywhere
- When stopping on a hill just use the kill switch and the leave bike in gear. It's safer and faster
- Stopping in the autobahn emergency lane is just fine
- Grease your chain every 1000km, especially with rain
- Rent a smaller lighter bike with good 1-4 gear ratios on mountain roads. Corners will be easier if you have more power in the lower end
- When on mountain roads it's all about accelerating out of the corner
- Going up a mountain road start wide, check road and complete the corner.
- Going down, you can start wide and make the corner or you can cut the corner
short, check traffic and then make a wider corner - Tires on motorcycles make a HUGE difference. Having good new tires is so important on a motorcycle
- On motorcycle trips you have to have a balance between trust and security
- Don't gamble on security with important items like your passport and wallet
- Don't drive ahead of what you can see
- Break hard and early
- Drive extremely defensively in traffic; remember to get out of the way
- French and Italian drivers are super crazy
- The Swiss do lots of maintain and invest into there country, not many people immigrate to Switzerland
- Italians are very generous and kind folk
- When in doubt, if you see something interesting, just stop (you won't see it again)
- Be decisive: take the picture, stop to eat lunch, take that side road, go up that mountain, say hi to that person. By the time you finish thinking about it, the opportunity will be gone
- When navigating in Europe, always know the next few cities on your path then follow the signs. Road names are useless
- Traveling solo is SO much faster then with people. Decisions are MUCH quicker
- When traveling: Trust God, he is real, and his angels will be there. There are many times when you will feel lost,hopeless,and afraid. Just smile and pray
Quote of the trip "I am so screwed"
I am pretty sure I said that sentence at least 100 times. Oh the stories. I thank God every time.
Thursday, July 21, 2011
Cell Phones kill planning
Cell phones are ruining my social life! Thanks to cell phones, when I go out with friends no one is ever fully present in the moment. Everyone is always on their phone trying to coordinate a meeting with someone else, texting with their flirt, or distracted by Facebook.
Cell phones make us non-committal and plunder our sense of planning.
Have you tried to plan an event lately? It is an absolute pain in the butt. You ask someone if they can come and they look at you like a deer in headlights "ahhhh… maybe." "Well do you have anything else planned?" "no.. But something might come up"
Cellphones give us the perceived ability to change plans quickly, because we can communicate instantly. And if you can think you can change plans quickly, odds are you are going to try. But the problem is, plans can't be changed quickly. It takes time to travel, people are late, they can't find the landmark you are talking about. So the plans fall through.
Let me just tell a story and hopefully the punch line will come across.
So one day I was trying to connect with a friend of mine "Bob" in Santa Cruz. So I call "Bob" and he says he is on the beach by the volleyball courts, past the board walk and that he should be there for a while. So I walk there, arriving about 15 minutes after our phone call and I can't find him. So I text him, "where are you?" "Oh I left. We are now going for ice cream" "Ok, where for ice cream?" Long story short, I chased Bob for a good hour and a half. When I finally caught up with him I was so pissed I could hardly enjoy the moment. What happened to the good old interface point? Meet you at the flag pole at 5pm, if you get there first just wait for me. You may argue that I just have bad friends, but I see this scenario playing out with even the closest of friends.
Since the creation of cell phones. We suck at planning. Why? Because of one short phrase. "Oh, I'll just call you"
Planning is a fundamental social skill. It requires foresight, communication, and commitment.
But our generation doesn't want to hear anything of it. Why? Because we don't think the juice is worth the squeeze. A well executed plan, makes the juice worth the squeeze. We waste hours of our lives on the phone because we screwed up the planning process. People get lost, or can't even make it at all because we didn't print out a map or didn't allocate enough travel time.
By golly folks, isn't it just easier to plan?
Cell phones make us non-committal and plunder our sense of planning.
Have you tried to plan an event lately? It is an absolute pain in the butt. You ask someone if they can come and they look at you like a deer in headlights "ahhhh… maybe." "Well do you have anything else planned?" "no.. But something might come up"
Cellphones give us the perceived ability to change plans quickly, because we can communicate instantly. And if you can think you can change plans quickly, odds are you are going to try. But the problem is, plans can't be changed quickly. It takes time to travel, people are late, they can't find the landmark you are talking about. So the plans fall through.
Let me just tell a story and hopefully the punch line will come across.
So one day I was trying to connect with a friend of mine "Bob" in Santa Cruz. So I call "Bob" and he says he is on the beach by the volleyball courts, past the board walk and that he should be there for a while. So I walk there, arriving about 15 minutes after our phone call and I can't find him. So I text him, "where are you?" "Oh I left. We are now going for ice cream" "Ok, where for ice cream?" Long story short, I chased Bob for a good hour and a half. When I finally caught up with him I was so pissed I could hardly enjoy the moment. What happened to the good old interface point? Meet you at the flag pole at 5pm, if you get there first just wait for me. You may argue that I just have bad friends, but I see this scenario playing out with even the closest of friends.
Since the creation of cell phones. We suck at planning. Why? Because of one short phrase. "Oh, I'll just call you"
Planning is a fundamental social skill. It requires foresight, communication, and commitment.
- Here is what we are going to do. At this time. At this location.
- And then executing and trying to stick with the plan to the best of our ability until the objective has been met.
But our generation doesn't want to hear anything of it. Why? Because we don't think the juice is worth the squeeze. A well executed plan, makes the juice worth the squeeze. We waste hours of our lives on the phone because we screwed up the planning process. People get lost, or can't even make it at all because we didn't print out a map or didn't allocate enough travel time.
By golly folks, isn't it just easier to plan?
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