Archive for the ‘Entrepreneurship’ Category

Old Saying Still Applies to Making a Fortune

Thursday, July 26th, 2007

Who remembers this one?

“Sell to the classes, eat with the masses. Sell to the masses, eat with the classes”
(the words live or sleep are sometimes substituted for eat)

The population size and overall wealth of our modern western society has made it possible to be very successful (and modestly rich) through specialization. Today, buzz words like niche and focus and user-centric are delegating the masses/classes concept to the conversational sidelines, yet it still holds true.

In his essay, The Hacker’s Guide to Investors, Paul Graham says,
“Ten years ago investors were looking for the next Bill Gates. This was a mistake, because Microsoft was a very anomalous startup. They started almost as a contract programming operation, and the reason they became huge was that IBM happened to drop the PC standard in their lap. Now all the VCs are looking for the next Larry and Sergey.”

I agree with this in that the ‘Microsoft formula’ is not going to be repeated exactly, and also in that the ‘Google strategy’ is the most popular one around at the moment. Even Microsoft is pursuing it, not to mention Rupert Murdoch, Barry Diller, Mark Cuban, etc. What I disagree with is that looking for a Bill Gates is a bad idea. The exact confluence of events that led to the creation and growth of Microsoft may not recur, but other opportunities will, and it will take the same sort of person to see and develop them.

Whether inside or outside of the context of such specific opportunities, however, the central tenet to building a business empire is still to develop or sell a product that becomes ubiquitous, or, alternatively, to acquire a dominant market share in one that already is. This is not the job description of an inventor.

McDonalds didn’t invent food. Starbucks didn’t invent coffee. Walmart didn’t invent economies of scale. Rupert Murdoch didn’t invent newspapers or television. Likewise, Bill Gates didn’t invent the computer, nor Larry and Sergey search.

Developing a ‘best of breed’ product or service, as a differentiation strategy in a crowded marketplace, is being interpreted by budding entrepreneurs as targeting high-end or power users with a superior offering. As a strategy for expert specialists carving out a real niche, it is solid and valuable. However, this interpretation/strategy has served just a handful of bootstrapping young start ups well, and many poorly.

What the most successful empire builders have all had in common was a point of view both wide enough to encompass mass markets and deep enough to execute their ideas. The scope (width) of view requires both stepping back to see beyond the limits of one’s personal peer group and stepping forward into the wider marketplace to find the common need/desire. The depth of view is where specialization and ‘best of breed’ concepts apply, and where execution becomes critical. This dual view is the province not of businessmen, but of true entrepreneurs, and in this definition I include the angels.

While the web grows population wise, there are opportunities for bootstrapping new apps to add to the collection. Those boom time opportunities will not be sustained through growth slowdowns and market shakeouts. The field for empire builders, however, remains wide open, and those opportunities are the ones that can survive long term.

Why Do I Care? In General and About Attribution

Friday, July 20th, 2007

After my post on Wednesday stating that I though CNet should apologize to Wired, several people asked me,

“Why do you care?”.

My initial response to this was simply, “Why don’t you?”, but, after some reflection, I decided that the question deserves a more detailed response. The following is hardly a complete response. The reasons for caring about attribution could easily lead to development of long tracts on morality, philosophy, social responsibility, and more, so here, first, are a few of my personal beliefs on why I care in general.

I care about the world I live in, and believe that every one of my actions combine with everyone else’s to make it either a better or worse place to live.

I know that it is possible to be successful in life and in business while behaving in a moral and ethical manner.

Speaking up for a popular cause is always easy, speaking up for what you believe in sometimes isn’t.

Personal popularity isn’t success, and it also isn’t a measure of trust or loyalty.

Being loyal to yourself and the things you believe in is worth it, even when it is difficult or costly.

Now as to why I care about attribution specifically:

Attribution is something that concerns anyone who has ever published, or thought to publish, anything. Ever more of us derive our livelihood from ‘right-brain’ activities. For reporters and journalists specifically, attribution or the lack thereof is an asset that translates into both reputation and earning power. Despite the major shifts taking place on the publishing landscape, in terms of copyright, ease and accessibility, etc., the basic societal structures of how we organize ourselves around ideas and information haven’t changed substantially.

The FBI spyware story belongs to all of us, and it’s a good thing that there are plenty of postings and conversations about it. It relates to many issues which we should understand better and be more aware of in general, including privacy, security, and law enforcement on the internet.

My post on Wednesday was a statement of my opinion on something I observed that bothered me. It is my way to act, whenever possible, when I see something that appears unjust. In most cases, that action involves private and personal communication. In others, where many lives are affected, there are organizations that I can add my support to, in the form of making a donation of time, influence, or money. (In this case, the actors were speaking in public.)

In the case of the Wired/CNet story, I subscribe to both of their feeds, and do not know either of the specific reporters personally. I initially emailed both of them. Declan McCullagh did not respond. Kevin Poulsen did. After a few more conversations about it, I decided to post my personal opinion here. Even though it wasn’t likely to change anything all those hours later, it is still a statement for the record.

If the CNet story lacked an appropriate attribution to Wired (as I believe), that could have, and still can, be changed at any time. This is a tremendous power to change that we have here. Like any power, it can be used well and it can also be abused.

We’ve seen, since the rise of powerful blogger journalists and the awkwardly growing area called citizen journalism, more than a few stories broken where ’scoops’ were publicly credited to individuals, adding to their reputation and clout. The majority of these individuals is deserving of their reputations, worked hard to build them, and did not do so primarily at the expense of others.

Plagiarism is anathema to any ethical publisher, of news or anything else. This is not, at heart, an issue of monetary value or rights, but rather an issue of ethical behavior and mutual respect, essential components to peaceful human co-existence. The growth of open platforms such as blogging, combined with the growing population online and the lightning speed of the medium, are enabling the dissemination of all published writing at unprecedented speed. Those of us who value the freedom of this medium, in my opinion, should also contribute whatever we can to education and to raising the standards of behavior whenever possible.

The basic definition of plagiarism, though, does not take into account the new concept of people chatting about, commenting on, and passing on ‘news’ in a published form. Telling your friends about something you heard/read isn’t a professional activity, and there is a lot of gray area here that would benefit from more discussion and consideration.

Most people publishing online include a copyright statement, and the most common (based on my own observations only) is one which states that all are free to re-publish, usually in original form, with attribution to the author. In the less formal publishing taking place in social mediums, it is becoming common practice to pass the word around without using or referencing the original form, but still thanking or giving a ‘hat tip’ to the writer’s source. Even non-professional publishers adhere to these basic behavioral codes of civility and respect.

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These are some of the reasons I care. What are some of yours?

The People Are The Business (relating links)

Tuesday, July 17th, 2007

My younger son and I spent many hours playing the card game Set, where the speed of observation and spatial reasoning determines the winner of each round.

The People Are The Business is my immediate response to reading the first of the following posts:

1. Rick Segal posts that It’s All About The People in response to a Globe article discussing business vs people.

2. In The economy’s “lone wolves” continue to howl, Dan Pink notes the 2005 Census Bureau’s numbers that show that “A daily average of 2,356 people went into business for themselves,”.

3. Meanwhile, Richard MacManus on Read/Write Web asks How Is Facebook Open, Really?.

4. While Matt Mullenweg talks about the “marvel of what can happen when you let go” in his Price of Freedom post.

Here’s my own ‘different yet related’ comment to add to this group:
5. Why did I consider eBay’s China strategy a joke from the day it was formed?
There may be a billion people in China (boy, I bet that looked good on the consultants’ potential growth projections), and there may be one or more hundred million computers in China, but the people who can openly say or do whatever they wish on their computer in China is, hmm, zero?

When I circle back to Rick Segal, and the issue he addressed in his post, I am more certain than ever that the answer to whether it is the people or the business(es) should be – both. If we all understand ourselves as both consumers and vendors, whatever our work-product may be, then the people are the business.

The shadow that power casts over us is not made of money; that is an illusion. Money can be, and is, used in a myriad of ways to enslave and also to buy freedom. That is at the beginning of what we need to understand.

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Thoughts on User Generated IA

Monday, January 8th, 2007

I’m stepping back, for the moment, from the ongoing analyses of taxonomical vs ontological structures (for example), to concentrate on what works and what doesn’t. Further, I speak, as always, from my belief that open/free are not only compatible with commercial viability, but further, that what we should wish to survive and evolve long term requires a marriage of the two.

To explain what I’m seeing, I’ll posit that one of the most vigorous successes on the web to date is still eBay. The site may be tired, with many segments in serious decline, and they may, perhaps, have wandered off base from a business growth perspective, yet the dynamic architecture has no equal or better after an entire decade. I have stated, in talking to web developers, that eBay has superior search, and been told that, of course they do since they’ve millions of dollars to spend on it. This is really an irrelevant fact out of context, since the company in question has some 11,000 employees and a dynamic database of tens of millions of pages today.

The size of the operation may require a sizable investment in maintaining and improving search performance and database management, but I believe that the original information architecture of eBay remains the primary basis for its success. If you’ve never analyzed the site or actively sold there, check out the all categories page, which can be found on the Site Map, which is accessible from any and every location. As recently as 2-3 years ago, all categories were listed (as links) on this one page, with no requirement to drill down further, and without those rather unfriendly search options on top.

Every item you will find in every category there was placed by an individual user. The number of categories has expanded dramatically over the years in direct (more or less) response to user demand, and the company has frequently worked with community groups in specialized collectibles fields towards more effective categorization.

The database structure is strictly hierarchical, with sellers and collectors using the equivalent of tags in listing titles. In practice, a buyer/collector chooses a sub or sub-sub category to search in and usually enters one or more tag equivalent descriptive terms combined with at least one identifying noun. An example is ‘anthropomorphic salt & pepper’. Go ahead and search it and, yes, go figure, there is a strong constituency of avid collectors in this little kitsch niche.

Now, most eBay sellers are the furthest thing from techies or geeks, and I’d also guess that they run the gamut across average in terms of education, erudition, etc. Sure, there were highly motivated early adopters at the beginning, and the profile altered as the constituencies grew, but the important point here is that a typical non-techie user is perfectly capable of navigating hundreds of categories and sub categories and choosing the appropriate ones in order to correctly list the items she’s cleaning out of her closet (to make room for new things, of course). She further goes on to easily use ‘tag equivalents’ to communicate and connect …by putting words such as Pink Cashmere Sweater in her title.

The basic concept of classification is easily grasped by grade schoolers, and indeed many of our children determine by themselves where to find a category they’re interested in, whether in a public library or in a department store, before formal schooling has even begun.

Why then, when we have hundreds of thousands of authoritative bloggers, website operators, etc., is there still so much difficulty connecting billions of pages of content to billions of users?

There is no centralization on the web, no way to collate the endlessly different data structures, written in many different languages, found via the internet. This is, in fact, a naturally resulting state of affairs representing the very basis of open enabling upon which has grown such a vast, multidisciplinary and interestingly vigorous network.

Our need and desire to navigate efficiently, to seek and find effectively, however, does not diminish as the internet expands, and as the web becomes more of a mess, but grows keener in response to both an increase in quality and the overload of quantity.

All of us, from bloggers to researchers to shoppers to the advanced users (who are more likely to be point and click developers rather than virtuoso codeslingers), want more than anything to find and, more recently, to be found. It is this last, the widespread desire to be found, that has taken us across an economic threshold into a realm where communal architecture, I believe, can become a reality.

There are tens of millions of users (at least), who now have a stake in terms of optimizing both a web presence and their computer time.

Up until now, serious search capability has been the mysterious province of wizards such as those at Google. Fairly common familiarity with metatags notwithstanding, the complexity of search algorithms, secretive and constantly changing in a battle against those who would take advantage of and abuse our attention, has made SEO a highly specialized and full time endeavor. Unfortunately, the other side of that coin is that finding what we seek can require almost as much specialized knowledge and experience as it takes to be found.

As a blogger (for example), even if I knew not a single character of basic html, I could still define or select categories and topic tags for my posts far beyond the maddeningly elementary list offered by almost every online blog directory. On most of these lists, one chooses between a handful of categories such as technology, business, academic, women’s issues, etc. As a reader of blogs, I would welcome not only more subcategories within which to search, but also further options such as the ability to search in more than one sub-category at once.

It’s time for a collaborative search engine, and likely a related series. I can easily contribute either a for or non profit business plan and plenty of preliminary ideas for development, but I’m not a coder, and my business interests are tech supported rather than tech based. Are there open source community leaders already at work on such collaborative concepts?

More importantly, how can tech and non-tech online communities intersect more fully towards revealing and achieving this elusive level of connectivity?

I wonder, also, whether further enabling a billion users, eventually, is a sexy enough idea to engage the brainpower that could accomplish it. Although the long term project potential could be both deeply satisfying and related opportunities dazzling, it holds little likelihood of instant gratification.

The competing motivators are strong. Media and money are creating hothouse environments for coders building components such as recommendation engines. Biomedical and nanotech projects lever billions of dollars often sweetened by fantastical premises that capture the science fiction fed imagination. The brilliant coders I have met or observed may not be primarily swayed by dollars, but little can compete with the opportunity to live in that intensely paced environment where non-tech issues are almost non-existent. The more such environments flourish, the less likely it is that the internet will remain a mostly public domain.

The biggest obstacle I see to implementing collaborative organization and search is the simplicity of the primary foundation required. On the surface, the structures would appear rudimentary, and the problem solving of the most annoying variety to elite coders, the variety supplied by civilians. Despite the illusion of simplicity, the successful reality requires brilliant design, in order to achieve stability and flexibility at the same time. I’d also expect it to demand evolution to the sophistication of a multi dimensional structure in the longer term.

The obstacles and de-motivators all beg the question that many believe already answered, or at least inevitably pre-destined. The question of who will exploit, control and benefit most from the internet and our use of it.

What’s In An Entrepreneur’s Weaknesses?

Wednesday, December 6th, 2006

Two things. Reality and perception.

Every single person has strengths and weaknesses. Those who excel are stronger than others in at least one performance aspect, and those we take as mentors or leaders generally outperform everyone else on many counts. Appearances will only take you so far, it is ability and skill on which you go the distance and, especially, stay there. For most of my life, until recently, I believed that perception and spin were nothing but an extra edge, and did not give handicaps or weaknesses much thought until recently.

Being highly competitive, I always play to win, and playing every card I’m dealt to its highest advantage is a given to me. Weaknesses must be fully assessed and covered, and strengths properly exploited. The winning hand is as much about how you play the cards as about which ones you are dealt, and a slew of high cards or trump make a single weak card of little consequence. End of analogy: the little guy playing against the house or a stacked deck isn’t relevant here.

The most successful of us are, among other things, the best at:

  1. Identifying our weaker areas
  2. Understanding exactly what dangers result and how to avoid them
  3. Compensating through alliances with others whose skills and talents are complementary
  4. Concealing our weaknesses
  5. Leading with our strengths

Having had the privilege of working with and knowing many self made men, I can say that every one that I observed applied these 5 criteria. These people divide roughly into 3 categories, those who made it and never fell, those who fell from a lofty height and climbed back up, and those who fell and never managed the full climb again. The difference in perception of weakness among the 3 groups at any given stage is dramatic. The reality is that #4 in the list above can, all by itself, create failure. This plays out in a way that is utterly primal. Still, a seriously wounded animal can not only still win a fight, but can become supernaturally stronger and more ferocious. Some of that is pure adrenaline, a body’s natural narcotic as well as fuel, but the greater part of it is simply how much the fight matters, or what the stakes are.

Humans, though, are a lot more complex than animals. Common wisdom tells us that the player who has least to lose has an advantage because of being willing to risk more. That easily explains why there are many 20 year old entrepreneurs (who do not yet have spouses, children, and mortgages) for every 40 year old one. It doesn’t explain, though, how to get in the ring, keep getting back in after losing, and stay there. More importantly, it doesn’t explain who the prize fighters are, or how to recognize whether you, or others, are one.

Here’s an example where handicaps, including age, didn’t matter:
“I was 52 years old. I had diabetes and incipient arthritis. I had lost my gall bladder and most of my thyroid gland in earlier campaigns, but I was convinced that the best was ahead of me.” Ray Kroc, on the founding of McDonalds Corporation

This was an entrepreneur who understood perception and spin to the max. He was a consummate salesman whose greatest sale, it’s been said, was the purchase of the original restaurants. I did not meet this man personally, but would make a bet that one of his self acknowledged weaknesses was a penchant for risk. Was he, perhaps, over compensating in the rigid, old fashioned management style he employed in building his final empire, and if so, did that over compensation turn into a bastion of strength?

Leaders, whether successful entrepreneurs, businessmen, or politicians, boast among their number a disproportionate percentage of manic depressives (now called bi-polar disorder) and borderline (BPD) personalities. Although the personal styles they present to the world can vary widely, can as easily present as brute strength and charisma or as suave and sophisticated, they are all, underneath, powerful alpha creatures. Most learn quickly that much can be achieved via perception and psychology, once primacy has been established. There are also plenty of normal guys who originally entered the fray with plenty of ability and ambition. A majority of them elect to semi-retire by or before middle age, and most, given a trust level, will confide the event that made them withdraw from the ring. The sentence I’ve heard most frequently in describing the turning point was, “I realized I didn’t have the stomach for it.”. At a higher trust level, and providing you know all the players, you might hear a specific story of betrayal.

The alpha fighters I am describing, often have what should be really serious weaknesses.

Weaknesses that have to do with literacy, or numbers, or money management. I’ve frequently marveled at the fact that there are invariably at least several, and sometimes a lot more, people around such an individual, who contribute to covering and compensating. This would argue that the serious weaknesses should become widely known, yet they do not. I hardly think that all enablers in such relationships are simply co-dependent and dysfunctional. What does become clear with experience and observation, is that the ability, scope, and skills of these individuals are such that even serious weaknesses are outweighed.

In the case of those who succeed, sustain no serious falls, and go the distance, the compensation mechanisms become as smooth and finely tuned over the decades as a hand built exotic car. The presentation dazzles, the engine purrs, and all is right with the world. Steve Wynn had already lost most of his vision when he lost the Mirage and started on the Bellagio, long before the recent painting accident. Many people, likely in the thousands, had knowledge of this, yet would tell you how incredibly smart the man is without a thought of mentioning the loss of vision.

Those who are truly determined and have outstanding ability are usually spurred to greater determination and performance by handicaps. This can sound perverse to some, but it really isn’t at all. If you have the personal power and drive and ability to achieve, the fire and passion to grab life by the short hairs and give it your all, then the never-ending contest itself, with both its losses and gains, is your motivation.

There is plenty of writing and advice on business and entrepreneurial success. If you aren’t out getting an MBA first (no determinant of success in itself), study and familiarize yourself with the materials relevant to your business activity anyway. How much you learn through studying, and how much through firsthand experience, though, is not the deciding factor in whether you want to and can, get and stay in the ring. This type of reading, a blog called Leaders on Leadership, is just as important to understanding the challenges and how to use your own abilities in terms of combining reality and perception.

We live to develop and exercise our talents and abilities to their fullest, and strive for happiness and success (in or out of the ring). Knowing our weaknesses and addressing them fully is the one critical factor far less spoken of or written about. Perception of strength or weakness is equally critical.

One of the most powerful individuals I met over the years, Edward J. DeBartolo Sr. (you used the full moniker until granted the right to address him by his given name), was a fairly small man physically. Few people, however, could stare back into those piercing eagle eyes for long, or stand up to the iron will. Even at the age of 90, this man still answered his business phone beginning at approximately 5 am, every single day.

If the fierce intensity of such a gaze is revealed to and turned on you, there’s only one involuntary response that signals your place in the ring. That response is a thrill of excitement and anticipation in the knowledge that you also will do whatever it takes to achieve your goals and stay there.

Those closest to you will know who you really are, but in business you deal with hundreds and sometimes thousands of individuals who will stubbornly see you as the first impressions you offer them. Making good ones may not matter substantially if you’re in the position to continue and perform brilliantly, but occasionally it will matter, and the rest of the time it’s like a free opportunity to put some extra money in the bank. It is also a gesture of respect, and that is always a good way to begin.