The Big Winner

June 24th, 2008 by admin

Canada IT has a great story about the web company Geosign and the firm’s competition with Google:
http://www.canadait.com/cfm/index.cfm?It=106&Id=26146&Se=0

It’s unfortunate that the founder wasn’t able to comment due to pending legal action. Maybe he would have had a different perspective than the one offered by other insiders and investors. But that’s neither here nor there. With the information that’s given in the article, there are a couple of good points related to strategy and success.

1. Have a concrete business model. Business models always change and investors know that. Still, it seems easier to develop a compelling value proposition and make incremental improvements after tests.
From the article: Retracing Geosign’s origins through old news stories, Nye sounds like he spent considerable time searching for a business model. In early interviews, he described Geosign’s business in vague terms, suggesting it was somehow linking online consumers with local businesses. “The market is connecting buyer to seller, and up to now, the consumer has been left out,” Nye told the Guelph Mercury in 2001. He called his new technology “geosearching,” and added that his company had inked an arrangement with an Internet search engine, but wouldn’t disclose the name. Still, he told confidantes and investors that he had grand ambitions for Geosign extending far beyond Guelph, concepts that would create a business with huge upside.

2. Promote your business and how it will generate a return for customers, investors, and other stakeholders.
From the article: Not that anyone outside of a small circle knew of Nye’s plans. For the next five years he stayed out of the limelight. Even in a small city like Guelph, he and Geosign garnered no media attention.

3. Don’t make your revenue dependent on a single company
From the article: Instead of buying ads and keywords from Google, Geosign had always purchased keywords from the search engine company and directed the traffic to sites filled with ads from rival Yahoo! That meant Google was receiving millions of dollars from Geosign for access to its keywords, but didn’t know where the traffic was directed. Given the amount of money flowing to Google, most in Geosign thought the search engine would turn a blind eye.

4. Structure your company so your personal investments aren’t impacted.
From the article: Those close to Nye say he did very well financially with Geosign even before the American Capital deal, has a home in Barbados, and often uses a local service to charter private jets.

I don’t know the full story of Geosign, but from this interview Tim Nye sounds like an innovative leader:
http://frankschilling.typepad.com/my_weblog/2007/03/evocative_qa_wi.html

I wish him and his fellow Geosign people the best of success in the future. They had an innovative concept and I can’t wait to find out what Tim Nye and the other Geosign employees will be up to next.

June 23rd, 2008 by admin

In an earlier post, I presented a slide show from Marshall Brain on how to make a million dollars. Marshall originally founded the company HowStuffWorks, which grew to a valuation of $250 million. I just remembered that he also wrote a book called The Teenager’s Guide to the Real World. There are many excerpts from the book and free resources available here:
http://www.bygpub.com/books/tg2rw/tg2rwtoc.htm

I originally got the book as a gift when I was a teenager. I remember skimming through it once and then promptly ignoring it. Now, however, I recognize there are tons of excellent tips for adults as well. Of course, there is also plenty of material for people to disagree with.

My whole blog sometimes comes close to the logical fallacy of argumentam ad crumenam (the appeal to wealth, or in other words, concluding a statement is correct because it comes from a successful person). It’s important to keep in mind that just because a person is successful, they may not necessarily be correct about everything. On the other hand, I’ve read hundreds of books written by successful people. I’ve also read hundreds of books written by unsuccessful and unfulfilled people. In my experience, the advice from people who did something great (made tons of money/invented something awesome/saved the world/etc) tends to be of much higher quality.

June 22nd, 2008 by admin

The Socialmedian blog has a great overview of some lessons learned from Jonathan Abrams, the CEO of Socializr. He was the founder of Friendster, the company that originally introduced social networking to a broader audience.

Here are the guidelines (from the Socialmedian blog):
1. Focus is difficult but crucial. Until your product is complete, your technology solid, your customers or users happy, and your sales or traffic growing and near critical mass, most other things do not matter. A startup CEO can waste a lot of time on premature marketing, business development, partnerships, PR, consultants, board maintenance, etc. before the company is really ready for those things.

2. Hire based on passion, not resumes. If you attract candidates based on your prestigious investors, be wary. If you lose candidates because you don’t have prestigious investors, they weren’t the people who you needed anyways.

3. A startup can get more done in the same amount of time than a large company, and needs to, but a startup is still more like a marathon than a sprint. Things will still take longer than you expect to get done, and you will make mistakes. Making mistakes is ok, as long as you get more things right than wrong each week, and correct the things you get wrong. Avoid irreversible mistakes.

4. Losing control of a startup to investors puts founders and common shareholders in a vulnerable position and may not improve the company’s execution or increase the company’s chances of success. Surrendering the corporate governance of a company to the wrong people is typically an irreversible mistake.

5. For a software or Internet company, overall execution depends on engineering execution in the first few years — make sure your stuff works! A technical founder should stay involved in the technology until it does.

Source: http://blog.socialmedian.com/2008/01/lessons_learned_from_startup_c_2.html

Abrams’ site also has some awesome advice regarding technical matters:
http://www.jabrams.com/ramblings/

June 21st, 2008 by admin

I am always searching for information written by successful individuals. Whether they are multimillionaires or leading divisions of the world’s largest companies, I want to learn as much as possible from them. This is how I go about locating new sources of information.

Google and LinkedIn are some of the best resources. The search query that I use contains the following parts:
* the name of a large company (such as Goldman Sachs) or the name of a growing startup (like Powerset or Zoho) combined with the term “at”
* the term “blog”
* site:linkedin.com search operator to find results on LinkedIn
* eliminating extraneous search results like duplicate updated profiles or results from LinkedIn Answers

Here is a sample search query:
“at goldman sachs” blog site:linkedin.com -intitle:recently -intitle:answers -intitle:”Linkedin Blog”

The next step is to go through the search results to find blogs written by top people:
http://www.google.com/search?hl=en&client=firefox-a&rls=org.mozilla%3Aen-US%3Aofficial&hs=qsZ&q=%22at+goldman+sachs%22+blog+site%3Alinkedin.com+-intitle%3Arecently+-intitle%3Aanswers+-intitle%3A%22Linkedin+Blog%22&btnG=Search

Happy searching!

June 20th, 2008 by admin

One of my primary reasons for starting this blog was to try and gain insight into the minds of incredibly successful people. I wanted to know how their thought processes worked. I wanted to know how they made decisions under pressure. Steve Kirsch’s home page is an excellent place to start.

Wikipedia Background:
Steven Todd Kirsch invented and owns a patent on an early version of the optical mouse. After bringing multiple successful startup companies through IPO and corporate buy-out, he became a multi-millionaire. In 2007, his personal fortune was estimated at $230 million. Steven Kirsch founded Mouse Systems Corporation in 1982. After he left the company, he co-founded Frame Technology Corp. in 1986 to market the FrameMaker publishing software. After Frame was acquired by Adobe Systems, he founded a Web portal company, Infoseek Corporation, in 1994. After Infoseek was acquired by Disney, he founded Propel Software Corporation in 1999. As of 2007, he was leading Abaca Technology Corp., which makes a spam filter that is reported to achieve very high levels of accuracy.

One of the first links on Kirsch’s web site goes to a page where he discusses his diagnosis of an incurable blood cancer. The rest of the page covers his research and intent to develop a cure:
http://www.skirsch.com/wm/wm.htm
It provides an excellent method of tackling any difficult challenge: gather as much data as possible and talk to as many experts as possible.

The man’s career involved solving hard problems such as reducing spam. He is clearly no stranger to thinking big. The pages on his site discuss curing the incurable, ending global warming, and creating a new future for America. The world stands a chance of becoming a much better place thanks to his efforts.

June 19th, 2008 by admin

John Osher is an inventor who developed several best-selling products. He also created a toy company that grew sales up to $125 million in a year. He sold another company to Procter & Gamble for $475 million.

Here is a list of mistakes he made and had seen other founders make:
Mistake 1: Failing to spend enough time researching the business idea to see if it’s viable.
Mistake 2: Miscalculating market size, timing, ease of entry and potential market share.
Mistake 3: Underestimating financial requirements and timing.
Mistake 4: Overprojecting sales volume and timing.
Mistake 5: Making cost projections that are too low.
Mistake 6: Hiring too many people and spending too much on offices and facilities.
Mistake 7: Lacking a contingency plan for a shortfall in expectations.
Mistake 8: Bringing in unnecessary partners.
Mistake 9: Hiring for convenience rather than skill requirements.
Mistake 10: Neglecting to manage the entire company as a whole.
Mistake 11: Accepting that it’s “not possible” too easily rather than finding a way.
Mistake 12: Focusing too much on sales volume and company size rather than profit.
Mistake 13: Seeking confirmation of your actions rather than seeking the truth.
Mistake 14: Lacking simplicity in your vision.
Mistake 15: Lacking clarity of your long-term aim and business purpose.
Mistake 16: Lacking focus and identity.
Mistake 17: Lacking an exit strategy.

This page has further commentary on each point:
http://www.cpd.ogi.edu/mst/capstone/17Mistakes.htm

June 18th, 2008 by admin

Marc Benioff, former executive from Oracle (one of the largest software companies in the world) and current CEO of Salesforce (one of the fastest growing software companies in the world) gave last year’s commencement address at Berkeley’s Haas School of Business:

Like Bill Gates and eBay’s Pierre Omidyar, Benioff believes in the power of compassionate capitalism:
“Throughout his career, Benioff has also been committed to using information technology to produce positive social change. In 2000, he launched the Salesforce.com Foundation—now a multimillion-dollar global organization—establishing the ‘1/1/1 model,’ whereby the company contributes one percent of profits, one percent of equity, and one percent of employee hours back to the communities it serves. In 2006, Benioff authored The Business of Changing the World, in which 20 great leaders reveal how businesses can go beyond writing a check and leverage the full scope of their resources to make a difference. Compassionate Capitalism, also authored by Benioff, is the first-ever best-practices guide for corporate philanthropy that illustrates the success of the integrated model.”
Source: http://www.salesforce.com/company/leadership/board-of-directors/#benioff

While the 1% may sound fairly small at first glance, it’s a substantial amount when talking about a company that earns hundreds of millions of dollars - and growing - in revenue per year.

From a strategy perspective, this interview with Benioff regarding Sun Tzu’s Art of War includes some great advice:
http://www.sonshi.com/benioff.html

Except:
Sonshi.com: Would you mind sharing with our readers a time when the book helped you to compete in business and/or helped you in your life?

Benioff: One of the most important tenants of the book focuses on strategic thinking rather than combative thinking. That advice has helped us decide to position ourselves in a way that makes people want to join our mission—rather than attack us. A perfect example of this is exemplified by our decision to open up our platform. If we had been thinking combatively, we would have been afraid about competitors learning too much about us, or we would have had concerns about them duplicating our moves. Instead, we opened up the platform, first with API, then with something called Customforce, a suite of tools behind salesforce.com that allows regular business people to easily extend their current salesforce.com applications, and then with Apex, a breakthrough development platform that lets customers create and run any type of application on demand. By inspiring people to join us and work with us creatively, we gathered an army of innovators who are dedicated to making us better.

June 17th, 2008 by admin

Several years ago Pierre Omidyar, the creator of eBay, wrote a couple of posts I found interesting. This blog is about replicating the mindset of people who succeeded in a major way and these two blog posts provide an interesting commentary on service and generosity.

From “What I’ve Been Up To“:
In talking about eBay over the past few years, I’ve emphasized the way eBay has helped people pursue their individual passions and discover their own power to make good things happen; how they’ve become empowered by participating in an open and honest marketplace, in a level playing field, meeting and working/trading with people who share their interests.

When I first learned about Meetup, I saw much of the same thing at work, though quite different on the surface: people discovering their own power, and connecting with others to realize that power to make good things happen.

Ever since eBay, I’ve been inspired by people discovering their own power, and believed that every individual can make a difference.

From “Athens and American Democracy“:
Brian O’Connell quotes historian Edward Gibbon on the fall of Athenian democracy:

In the end, more than they wanted freedom, they wanted security.

They wanted a comfortable life, and they lost it all — security, comfort and freedom…

When the Athenians finally wanted not to give to society, but for society to give to them…

When the freedom they wished for most — was freedom from responsibility…

Then, Athens ceased to be free.

What was true for Athens in its day could be true in ours. Unless we are vigilant; unless we strive to understand and nurture our civil society. And unless we continue to stand up as individuals for what we believe in, establish trust with others, and make things happen.

Brian O’Connell, John Gardner, and many others have worked nearly their entire lives trying to help us understand this. Despite our challenges, today I’m optimistic. The Internet has given us an infrastructure to connect people, to enable the formation of trusting relationships and voluntary associations — for the first time, even across national borders. As individuals, we now have the potential to make an unprecedented impact.

June 16th, 2008 by admin

In an earlier post, I mentioned billionaire Peter Thiel’s essay regarding his vision for the future. I recently found a podcast with him on IT Conversations where he explains why the financial system is adjusting in an era of accelerating change and how to profit from this transformation.

Summary:
Thiel looks at how investing should adapt to a potentially all-or-nothing environment, where things can easily turn out “very good” or “very bad”. Thiel makes the surprising observation that singularities are not necessarily a phenomenon of the future. Rather, we have already been seeing singularity-aware investment behavior for decades in the apparently accelerating cycles of booms and busts. Starting from the Japan-hype of the 80s, through the derivatives boom and bust of the 90s, on up to the internet bubble and the Web 2.0 overvaluations today, Thiel argues that not all of these were odd episodes of delusional thinking, but rather some may represent peaks of clarity, in which investors saw the paradigm-changing possibilities of technological developments, but simply bet on the wrong horses.

http://itc.conversationsnetwork.org/shows/detail3398.html

June 15th, 2008 by admin

The New York Times/IHT has a fantastic article about Mukesh Ambani, the billionaire industrialist:
http://www.iht.com/bin/printfriendly.php?id=13711456

Drawing important lessons from the business press sometimes feels like trying to get in-depth knowledge of running a company by watching The Apprentice. But I can’t help it. The article is one of the most inspiring pieces I’ve ever read. Ambani thinks big, with goals much larger than I’d even expect a billionaire to have.

“Can we really banish abject poverty in this country?” he mused aloud in a rare interview at his headquarters here. “Yes, in 10, 15 years we can say we would have done that substantially. Can we make sure that we create a social structure where we remove untouchability? We’re fast moving to a new India where you don’t think about this caste and that caste.”

Ambani made his wealth in emerging markets, where fortunes explode into existence seemingly overnight (even though plenty of long workweeks and other strategic maneuvering occur behind the scenes). Hundreds of millions of people rose up from poverty in the last ten years alone, so maybe it can happen again over the next decade.

As millions of Indians graduate from burning cow dung for energy to guzzling oil, Reliance is plowing billions of dollars into energy exploration and is building the world’s largest oil refinery. It has also opened a chain of nearly 700 stores selling food and various wares; Ambani promises that it will funnel money from the flourishing cities into the struggling agricultural heartland. He envisions Reliance, with $39 billion in revenue, as providing incomes to 12 million to 30 million Indians within the next five years by buying from farmers and employing new workers in its stores.

And the title of the post? It comes from this passage:

“Remember: these guys all grew up in the License Raj,” said a close friend of the tycoon, referring to India’s decades-long experiment with rigid state control over the economy. “They grew up as lotuses from the filth. It makes them tough, it makes them suspicious, it makes them vindictive at times, and it makes them come out in a hurry. They always see life as, ‘Oh God, better not miss an opportunity.”‘

Ambani is one of the most quotable billionaires I’ve ever read about. As with most advice, some of it may seem cliched though it’s often important to have these concepts repeated again and again. Yes, success does include an element of luck. But maybe the old standards (work hard, persist, etc.) can help. Here’s a selection of his wisdom:

* “You need some amount of escapism in life.”

* “My view was: ‘What the hell, man! We can do what we feel like.’ I think what has changed now, and it is changing in multiple generations, is this self-confidence and self-belief.”

* “All of us, in a sense, struggle continuously all the time, because we never get what we want. The important thing which I’ve really learned is how do you not give up, because you never succeed in the first attempt.”

* “How do you really bring about, in a country of a billion people, the individuality of every single individual? How do you make sure that you create systems that empower everybody and bring them to their true potential? This is what actually Gandhi taught us.”