Jason’s inspiration for this 6 ½ minute talk was a blog entry he wrote in 2008, which went viral within the startup community. You can check out Jason’s original entry HERE.

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You can watch Jason’s presentation below or on YouTube here:  http://youtu.be/fBGT8TVjZXQ

Jason has always been fascinated with superheroes. When he Co-Founded Docstoc, he decided to incorporate superheroes into his company’s Core Values. Each new employee is asked to publicly declare their favorite superhero, which is then added to a large mural on display in the company’s lobby.  

Always the serial entrepreneur, Jason is expanding Docstoc’s mission to include not just documents, but a variety of tools that help entrepreneurs run their businesses, such as ebooks and videos. To this end, Jason and his DocStoc team have created a compelling online course entitled, 21 Critical Lessons for Entrepreneurs. In fact, lesson 19 is the video shown below. If you enjoy Jason’s content and style, you might want to check out his online course.

The ten superhero lessons are listed below. Although each of these images is impactful in their own right, I strongly encourage you to check out Jason’s clever elaboration of each of these superhero lessons.

Superheroes Never Give Up

Superheroes Always Get The Job Done

Superheroes Are The Best At What They Do

Superheroes Are Crystal Clear Of Their Purpose

Superheroes Are Not Flawless

Superheroes Don’t Seek Glory… But They Get It Anyway

Superheroes Help Others

Superheroes Can Do It By Themselves But Are More Powerful In Teams

Superheroes’ True Strength Comes From Their Character

Superheroes Accomplish Huge Feats

Jason makes it clear at the outset of his talk that, although superheroes are a lighthearted and fun expression of his company’s core values, he is extremely serious about incorporating them into his “superhero culture.” He tells his employees, “When you come into the company every day, I want you thinking you are that superhero.” Fortunately, Jason does not require his employees to wear capes, masks or tights.

Just like a superhero’s mission, startups are exhausting and demanding. However, by emulating superheroes, startup employees can be inspired to achieve outsized results while remaining helpful and humble. Time to get your superhero on…

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A Fortune 500 CEO once told me that I was a Bank Robber. Initially, I was offended. However, once he explained what he meant, I was flattered.

Entrepreneurs are law-abiding Bank Robbers. They enjoy the hours spent plotting and scheming and pulling together a team of skilled specialists to accomplish the heist. The outcome might be jail time (i.e., failure and bankruptcy), or it might be a haul so big that they never have to rob another bank. It is not the actual amount of money in the vault that motivates them. Rather, a bank robber is inspired by the seemingly unlimited challenges associated with each bank job.

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Even though the time spent planning the robbery is fraught with risk, uncertainty, and more than a bit of anxiety, it is highly preferable to be a startup Bank Robber, as opposed to spending your life waiting in line at an automatic teller machine (ATM).

In partnership with Docstoc, I created the following video, in which I discuss when it makes sense to hire Bank Robbers versus ATM Operators.  You can watch the embedded video below or at YouTube: http://youtu.be/6cv3qPx3fF0

The amount of money in the vault is ultimately not the Bank Robber’s primary driving force, as Mark Cuban confirms in THIS collection of startup advice. The expectation that the next heist could be the big one is often the most exciting aspect of the robbery. Risk is seldom a dissuading factor as entrepreneurial Bank Robbers typically assume that they will always make a clean escape.

An ATM Operator sees life very differently. They take comfort in knowing that every two weeks they can wait in line at an automatic teller machine (ATM) and extract a prescribed amount of money. It is never more or less than what they expect. Every year, as a reward for their patience, the amount they can withdraw might increase slightly.

When recruiting the initial employees into your adVenture, you must weed out the ATM Operators from the Bank Robbers. As described in Ignore Entrepreneurs’ Resumes, Bank Robbers often have unimpressive, disjointed careers. This requires you to identify clues as to who they are, rather than reviewing a list of what they have done, as described in Hands-on Techniques For Hiring Entrepreneurs. 

Spotting Bank Robbers Without Ski Masks

A Bank Robber will ask questions that are focused on your products, customers, and the potential size of your adVenture’s overall opportunity. They will want to know about the banks you plan to hit, and how much money might be up for grabs. Conversely, the ATM Operator will ask questions centered on the company’s financial condition, current investors, and potential future investors. They will seek an understanding of the amount of money that is currently in the ATM, who is going to refill it, and how often will this be done.

Entrepreneurs will revel in the small size of your startup. The more bootleg and funky your office space, the better. The fewer people participating in the heist, the more significant they will view their role. They will appreciate that the less hands there are in the till when the loot is distributed, the bigger the share for everyone involved. ATM Operators will eye your office space suspiciously and ask questions such as, “When do you plan to relocate?” and “Does the company’s insurance include a vision plan?” During Amazon’s early days, Jeff Bezos encouraged employees to make desks out of old doors as a symbol of the company’s frugal culture. Such “door desks” might have scared away Wantrepreneurs, but they certainly did nothing to limit Amazon’s success.

Bank Robbers will focus on the role they can play to ensure the team’s success. They will excitedly ask to drive the getaway car or be the gunman. Conversely, ATM Operators will maintain a reserved countenance and ask about your benefit plans and whether or you match 401k contributions. Their intent is to determine what they can get out of the job, other than the requisite biweekly ATM withdrawal.

Bank Robbers want to be assured that the venture is risky, because they know the size of the potential upside is usually correlated with the underlying risk. A high-security bank usually holds more cash than a small savings and loan with a circa 1970’s security system. ATM Operators want to know what you will do to mitigate their personal risk, and they may ask for severance packages, acceleration of their vesting, etc. If something goes wrong, they want to know that they can run to the front of the line and empty the ATM before moving onto their next job.

Entrepreneurial Bank Robbers crave the thrill of the heist. They love planning the robbery and experiencing the adrenaline rush associated with taking down a bank. They delight in the role of the underdog, persevering with the odds stacked against them. Thus, when you are hiring your initial adVenture employees, be sure to determine if their preference is a ski mask or pantyhose. However, as noted in Mark Zuckerberg Goes Both Ways, as you company matures, shift your focus to hiring ATM Operators who value the security and stability of a growing, self-sustaining enterprise.

Once you sell your adVenture and split up the take from the heist, you and fellow Bank Robbers can leave the company in the hands of the ATM Operators, head to Vegas and blow the loot. If the adVenture was sufficiently rewarding, your bank robbing crew will likely Get The Band Back Together and begin planning which bank to take down next.

Note: This is Part IV in the Startup Team Building series. Read Part I HERE, Part II HERE, and Part III HERE.

ATM Photo from WordPress

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Entrepreneurs often must take counter-intuitive, contrarian positions in order to succeed. As noted in Entrepreneurship Is A Compulsion, entrepreneurs often view the world from a slightly different vantage point, rejecting the oxymoronic term Conventional Wisdom. 

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In the video below, I discuss three business models which deviated from contemporary Conventional Wisdom yet each proved to be highly successful. In two cases, these once unconventional business models eventually became the industry norm.

I discuss these contrarian business models in the nine-minute video below, which can also be accessed here: http://youtu.be/NJQG1KMUErg

Baseball Radio

A number of highly successful business models ran counter to conventional wisdom at the time they were launched. One of these was the decision to broadcast baseball games on the radio.

The first radio broadcast of a professional baseball game occurred on August 15, 1921. However, it was not until 1935 that Philip Wrigley, the owner of the Chicago Cubs, agreed to allow his team’s entire season to be transmitted on the radio. Conventional wisdom caused the 15-year delay. It took another four years before every team agreed to broadcast their entire season on the radio.

During the early 1930’s, major league owners believed that radio broadcasts would negatively impact ballpark attendance. They asked themselves, “Why would someone pay to attend a game when they can sit in the comfort of their home and listen to it for free?” At the time, gate receipts represented the majority of the owners’ revenue, so their desire to protect this important cash stream is understandable.

However, rather than suppressing attendance, radio actually expanded each team’s fan base. During the first half of the 20th century, baseball parks were located in cities and most of the attendees travelled via public transportation. Radio dramatically broadened each team’s geographic reach.   

The owners had failed to anticipate the psychological kinship that radio created between fans and players. Instead of simply reading box scores and newspaper accounts of games previously played, radio broadcasts allowed fans to experience each game’s drama in real time.

The intimacy of radio caused fans to establish personal rapports with players which was previously not possible. This fan/player connection increased the teams’ live audience from fans who could walk or take the subway to attend a game to rural radio listeners who lived upwards of 100-miles away. Such remote devotees were motivated to make occasional visits to ballparks, trips that they otherwise would never have made had radio not bolstered their allegiance.

Grateful Dead Bootlegs

Record executives were dumbfounded by the Grateful Dead’s strategy of encouraging their Deadhead fans to create and share bootlegs of their live performances. Conventional Wisdom dictated that the proliferation of unauthorized recordings would supplant the market for concert tickets and commercial releases. However, even through their persistent ganja haze, the Dead knew better.

By allowing fans to make and share concert recordings, the Dead’s cult status was significantly enhanced. Fans began to collect bootlegs and follow the band on tour. Despite the record executives’ concerns, these hardcore fans also devoutly purchased the Dead’s commercial releases and other licensed products (T-shirts, bumper stickers to put on their Cadillacs, etc.). Instead of attending one show, the Grateful Dead’s fans routinely went to several, in some cases following the band on tour and attending dozens of shows.

Old School Software Distribution Is Doomed

On December 10th, 1993, a small group of software developers in Shreveport, Louisiana changed the software world. id Software’s first-person shooter game, entitled simply DOOM, could be downloaded free, allowing gamers to play the first nine levels. Players who wanted to continue their gameplay could purchase an additional 18-levels.

Due to poor record keeping and the proliferation of DOOM knockoffs, it is impossible to know exactly how many copies of DOOM were downloaded. Estimates range from 10 million to over 50 million. However, the game’s impact on the software industry is indisputable.

id’s unique business model was spawned by the company’s inability to place their titles in retail outlets. Rather than utilizing mail order to sell their game, as they had done with their prior title, Wolfenstein 3-D, id posted their game on bulletin boards and encouraged gamers to try it at no charge, effectively spawning the freemium software distribution model. The DOOM brand, which includes sequel games, consol games, merchandise and a major motion picture, ultimately generated over $500 million in total revenue.

The Economist magazine coined a term for this new business model, “Doomenomics.” By the late 1990’s, Conventional Wisdom dictated that companies should give their products away in order to quickly establish massive adoption. This irrational mindset paved the way for the irrational exuberance that culminated with the dot bomb crash of 2001. DOOM indeed.

Bigger Isn’t Better

“More businesses die from indigestion than from starvation”
David Packard, Co-Founder Hewlett Packard

When I was an operating entrepreneur, I was often asked, “How many employees do you have?” My answer was always, “As few as possible.” Another common question was, “How many square feet have you leased?” Again, my response was usually, “As little as possible.”

In many cultures, Conventional Wisdom dictates that bigger is better. However, at a startup, every expenditure should result in a direct and measurable return, as described more fully HERE. Keep your organization nimble by monitoring return-driven metrics, such as profit per employee, cost per customer, life time value per customer, profit per location, profit per square foot leased, etc. Never consider size metrics, such as headcount and square feet of office space, as measures of your venture’s success.

In nature, the big often eat the small. However, it is not uncommon for faster, smaller predators to eat larger, slower prey. Consider the triggerfish. This nimble creature nips at a larger fish’s rear fin until it is sufficiently frayed. A frayed tail generates less propulsion and thus significantly slows their prey. Once the larger fish’s maneuverability is sufficiently compromised, the triggerfish then blinds it. This effectively results in a source of fresh food which the triggerfish can then dine on, at its leisure.

Just as the quick often eat the slow in nature, the same phenomenon occurs in business. As noted in countless business books (most notably The Innovator’s Dilemma), large companies that do not make a concerted effort to remain agile and keep their fins intact, are eventually devoured by their smaller rivals.

Consider id Software’s first game, Wolfenstein 3-D. It cost approximately $25,000 to create, if you include the rent for the apartment in which a half-dozen developers created the game. The first month’s royalties were $100,000 and the game ultimately generated over $24 million in total revenue. id’s next game, DOOM, was created by a team of approximately a dozen engineers at a cost of about $200,000.

Despite id’s success as a small team, Co-Founder John Romero decided that his new startup, Ion Storm, had to grow quickly in order to effectively compete with its larger rivals. To this end, he raised $30 million, hired over 100 employees and rented the penthouse of the Texas Commerce Building, one of Dallas’s premier office buildings.

Ion Storm’s first game, Daikatana, was delivered over two years late and is considered the first major failure of the gaming world. In 2009, ScewAttack ranked Daikatana #7 on its Top Ten Biggest Bust list, while in 2010 GameTrailers cited it as #2 on its list of the biggest gaming disappointments of the prior decade.

The game was as bloated and sluggish as the company which spawned it. According to its critics, it encompassed too many worlds, too many characters – too much of everything. Ion Storm ultimately racked up financial losses of $44.8 million and John Romero was eventually fired.

Conventional Wisdom Often Isn’t Wise

Question Conventional Wisdom. Impactful business models often arise from taking the road less traveled. In many cases, unconventional business models arise because of advancements in technology, such as occurred with: baseball (radio and improved automotive transportation), DOOM (Internet facilitating efficient and inexpensive software downloads and frictionless upgrades) and the Grateful Dead (smaller, higher fidelity recording devices).

Remain watchful for similar transformative innovations which will allow you to change the rules of the game. Fortunes have been made by entrepreneurs who proved that Conventional Wisdom is often trumped by unconventional contrariwise thinking.

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Article first published as Eleven Business Tips From Richard Branson on Technorati.

Note: This is an installment in the Iconic Advice series. Other installments include: Jeff Bezos and Steve Jobs.

Last weekend, a friend gave me and my family a wonderful ride in his plane. Departing from Edwards AFB, we flew over the Mojave Air and Spaceport, home of the world’s largest private manufacturer of spacecraft, The Spaceship Company (TSC).

TSC is building spacecraft for Richard Branson’s Virgin Galactic space fleet.  Despite the fact that the specific date of Virgin Galactic’s maiden voyage remains unscheduled, over 450 citizen astronauts have put down a deposit of at least $20,000 on the $200,000 per-person fare.

In October of 2011, the company announced a $4.5 million deal with NASA to use Virgin Galactic spacecraft to conduct experiments, filling the void left by the retirement of America’s shuttle program.

It is undoubtedly impressive that Richard Branson has motivated a government organization and hundreds of intelligent, affluent people to commit millions of dollars to secure a service that does not yet exist. Even more striking is that this super-salesman is a self-taught, high school dropout.

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Richard’s Startup Tips

1) Give Your Customers (And The Media) What They Want

“With the casino and the beds, our passengers will have at least two ways to get lucky on one of our flights.” [Tweet this quote]

Richard often utilizes humor when speaking with the media, as he knows that a humorous sound bite is more likely to be published and more readily remembered. As discussed in Thrill The Messenger, slightly off-color, unconventional quotes will help ensure that your startup’s voice is heard.

2) Heart Over Head

“I never get the accountants in before I start up a business. It’s done on gut feeling…” [Tweet this quote]

Utilize quantitative analysis to guide and inform your decisions but do not allow the numbers to dilute your passion. After listening to a particularly sobering financial analysis, Richard often replied, “Screw it, let’s do it.” He used this term so often that it eventually became the title of his 2005 book on business advice.

Richard understands that assumptions and financial forecasts provide a limited view of an initiative’s range of potential results. He also knows that once a proposal is launched, real-world data will allow him and his team to make unanticipated, incremental changes which will positively influence the project’s ultimate outcome. Such insights are impossible to ascertain by standing on the sidelines, analyzing data.

3) Fun Matters, A Lot

“Right now I’m just delighted to be alive and to have had a nice long bath.” [Tweet this quote]

Take time to enjoy your accomplishments and relish the small joys of life. After his third failed attempt to travel around the globe non-stop in a balloon, Richard told the media, “I think the most important thing is that in the last seven days we’ve just had the greatest adventure of our lifetimes.” This was despite his public humiliation and the fact that he lost a $300,000 bet. 

Every journey, even one that ends in failure, is an opportunity to learn. If you are having fun along the way, the journey is adequate reward unto itself. According to Richard,“Some 80% of your life is spent working. You want to have fun at home; why shouldn’t you have fun at work?” If your current adVenture is not fun, it is time for you to pursue another business.

4) Keep Your Trousers On

“Fortunately we’re not a public company – we’re a private group of companies, and I can do what I want.” [Tweet this quote]

As noted in Startups Should Avoid Dropping Trou, being private allows companies to withhold confidential information from their competitors. In addition, private companies are not pressured to sacrifice their long-term strategic goals in order to achieve short-term quarterly results. Relish your private status and do not hesitate to tell a Big Dumb Company (BDC) “No,” when they make an unreasonable request.

5) Change The Rules To Match Your Skills

“…I’ve had great fun turning quite a lot of different industries on their head and making sure those industries will never be the same again…”

Startups are not bound by the past. This lack of institutional history frees startups to view the world in unconventional ways. Embrace this freedom at your adVenture and avoid trying to beat BDC’s at their own game.

For instance, imagine how ineffective a well-honed, successful basketball team would be if they were thrust onto a rugby field with no knowledge of the game’s strategy or rules. Even if the basketball players were intelligent, skilled athletes, it is unlikely they would become accomplished rugby players before the match was over.

In the world of startups, the Golden Rule is NOT, “Those who have the gold, make the rules.” Instead, the entrepreneurial Golden Rule is, “Those who make the rules, get the gold.” As such, you will have far more success toppling BDC’s if you create a new game with an entirely new set of rules and force BDC’s to compete on your terms.

When entering a new market, Richard has consistently changed the rules of the game in order to put his incumbent competitors at a disadvantage. According to Richard, “You don’t learn to walk by following rules. You learn by doing, and by falling over.”

6) Teach Your Children Well

“My mother was determined to make us independent. When I was four years old, she stopped the car a few miles from our house and made me find my own way home across the fields. I got hopelessly lost.” [Tweet this quote]

Similar to Tony Hsieh’s parents, Richard’s mom reinforced a self-sufficiency in her son that has been critical to his success. Richard dropped out of school at the age of 16 to begin publishing a magazine targeted to young people, called Student. Richard built upon the fact that record companies were Student’s biggest advertisers to subsequently launch a record store. He then built his initial store into an international chain which ultimately led to the creation of a highly successful record label.

Richard no doubt felt lost at various times during his entrepreneurial journey. Fortunately, his mom instilled in him a tenacity and sense of purpose that successfully guided him “across the fields.”     

7) Your Most Valuable Asset Is Fragile

“Most ‘necessary evils’ are far more evil than necessary.”  [Tweet this quote]

As noted in Time Wounds All Heels, a reputation as an honest and trustworthy business person is a serial entrepreneur’s most powerful asset. Per Richard, “All you have in life is your reputation: you may be very rich, but if you lose your good name, then you’ll never be happy.” Protect your reputation by always doing what you should do, rather than what you could do.

8 ) Speed Matters

“A good idea for a new business tends not to occur in isolation, and often the window of opportunity is very small. So speed is of the essence.” [Tweet this quote]

As noted in Going Against The Grain, in nature it is often the smaller, faster predator who eats the larger, slower prey. The same phenomenon occurs in business.

Startups have few advantages. However, one is agility: the ability to quickly evaluate the results of their actions and revise their approach to reflect market realities. Maintain a high velocity at your startup while you nip away the fins of your BDC competitors.

9) Be A Bro

“Respect is how to treat everyone, not just those you want to impress.” [Tweet this quote]

In The Bro Factor, I emphasize the importance of treating everyone as important, irrespective of whether or not the person is in a position to assist you. As Guy Kawasaki notes in The Art Of The Start, he often observes how people treat his employees as a window into that person’s soul. If someone is rude to Guy’s receptionist yet gracious to Guy, it is a fairly clear indication that the person is a douche.

Heed Richard’s advice: “Having a personality of caring about people is important. You can’t be a good leader unless you generally like people. That is how you bring out the best in them.” Empathy is difficult to fake. If you do not have the ability to connect with your employees, customers or other stakeholders on an emotional level, be sure that at least one member of your core team possesses this vital characteristic. 

10) Yes

 “Life is a helluva lot more fun if you say yes rather than no.”
[Tweet this quote]

I was a serviceable CFO at several of my startups. In this role, it often seemed that my primary responsibility was to say, “No” to my compatriots’ seemingly endless requests for resources. However, in my dual role as the head of sales and business development, I devised mutually advantageous outcomes with customers and partners which culminated in a collective “Yes” from all the involved parties. I can attest first-hand that working toward a “Yes” is far more gratifying than routinely saying “No.”

11) Brands Matter

“Good brands reflect the histories of the time and the group of people that made them. They cannot be copied. They cannot be recycled.”  [Tweet this quote]

The name Virgin was suggested by one of Richard’s initial employees at his record store. It was intended to celebrate their status as business novices. They recognized that their status as outsiders was actually an advantage, rather than a handicap.  As Richard later said, “What does the name Virgin mean? We are a company that likes to take on the giants. In too many businesses, these giants have had things their own way. We are going to have fun competing with them.”Thus, the Virgin brand has come to represent a maverick company that strives to deliver maximum value to its customers by pursuing creative and disruptive business models.

Virgin executives describe the company as a “branded venture capital company.” Richard has created nearly 300 separate Virgin companies which employ over 20,000 people. Despite the fact that these companies encompass wildly divergent industries, they all share the competitive advantage of a unique umbrella brand that is impossible to replicate. In addition, although the aggregate Virgin organization is large, most of the individual companies are relatively small and agile.

Virgin Galactic is entering the commercial space industry as Goliath, rather than Richard’s traditional role as the giant killer. If Virgin is to succeed in this uncharacteristic role of the established incumbent, Richard will need to keep his eye out for the next 16-year old dropout who is determined to turn the commercial space industry “on its head.”

Note: This is an installment in the Iconic Advice series. Other installments include: Jeff Bezos and Steve Jobs.

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In the course of my recent interview with Guy Kawasaki, author and former Apple Evangelist, Guy describes Steve Jobs as:

“…the world’s greatest CEO, ever. He did more for Apple’s shareholders, customers and employees than any other CEO has ever done for their shareholders, customers and employees. People should not try to emulate him, because they will be setting themselves up for failure. He is a great example of…building an enchanting company.”

There are numerous reasons for Jobs’ success, not the least of which was his uncompromising pursuit of a delightful customer experience.

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An Insightful Steve Jobs Anecdote

I recently met a highly successful photojournalist, by happenstance, at a coffee shop. He overheard me talking about Steve Jobs in conjunction with the entrepreneurship class that I teach at UC Santa Barbara. The photographer (who asked that I not identify him, but was happy for me to share his story) indicated that he knew Steve. He proceeded to tell me several interesting and entertaining stories about Steve (all flattering), dating back to the early-1980’s. I shall refer to the photographer as “Mac” for the remainder of this article.

One of Mac’s stories was particularly compelling. In the summer of 1985, he was in Jobs’ office when a photographer for Fortune magazine arrived to shoot Steve for an upcoming cover. In the mid-1980’s, Mac was a notable photojournalist. At the time the Fortune photographer arrived at Apple’s headquarters, Mac had previously shot a cover photo of Jobs for Newsweek.

Steve told the gentleman from Fortune to take his time scouting a suitable location to take the photo. He implored the photographer to, “not be afraid to strive for an image that was, out of the box.” After about two hours, the photographer returned to Steve’s office announcing that he had found an ideal location for the photo shoot. Unfortunately for the photographer, he did not realize that Steve was not prone to settle for the mundane or unimaginative.

The Fortune photographer placed Steve in front of the Apple logo in the company’s lobby. Steve looked at the logo and then at the photographer and said, <obviously I am paraphrasing Mac’s recollection>, “You must be kidding me. Apple’s CEO standing in front of the Apple logo?! I won’t be part of such a mediocre effort,” at which point he walked away. He did not “storm off,” nor did he shout at the photographer. He simply stated his opinion and went about his busy day.

Once Steve departed, the photographer was visibly shaken. As a fellow photojournalist, Mac had empathy for the man from Fortune. After speaking with Jobs, Steve agreed to give the photographer another chance. The resulting photo, while not particularly imaginative, is at least a departure from the formulaic, CEO standing in the foreground of their company’s logo. 

Steve’s Startup Tips

Per the popular press’ narrative, Steve Jobs went from a technology rock star (early 1980’s) to a petulant, spoiled brat (late 1980’s), to a washed-up, has been (early 1990’s) back to a technology rock star (2001 to present). Along the way, Steve shared numerous nuggets of sage advice. I gathered ten such examples which are particularly relevant to entrepreneurs.

1. Quality Does Not Stop At Your Product’s Faceplate
   

    “We think the Mac will sell zillions, but we didn’t build the Mac for anybody else. We built it for ourselves. We were the group of people who were going to judge whether it was great or not. We weren’t going to go out and do market research. We just wanted to build the best thing we could build.

   When you’re a carpenter making a beautiful chest of drawers, you’re not going to use a piece of plywood on the back, even though it faces the wall and nobody will ever see it. You’ll know it’s there, so you’re going to use a beautiful piece of wood on the back. For you to sleep well at night, the aesthetic, the quality, has to be carried all the way through.”

Another of Mac’s stories highlights the degree to which Steve treated his designs as works of art. Jobs gave Mac a Macintosh 128k as a gift. After using it for a number of years, Mac passed the computer on to a friend who could not afford a new one. Years later, Jobs asked Mac if he still had the Macintosh 128k. Mac proudly told him that he had given it to a friend thinking Steve would approve of his act of charity. “That’s too bad,” Steve told him, “because I signed the inside, along with the other members of my development team. The unit I gave you was one of the first Macintoshes ever produced.” <again, paraphrasing>

2. Grinding It Out Matters
   

   “’I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.’ ”

As Guy Kawasaki noted in this video interview, hard work is his secret weapon. I regularly bring successful entrepreneurs into my UC Santa Barbara classroom. Far and away the most common attributes of these individuals are their stamina and willingness to do whatever it took to succeed.

3. Love Is All You Need (When Hiring…)

   “When I hire somebody really senior, competence is the ante. They have to be really smart. But the real issue for me is, are they going to fall in love with Apple? Because if they fall in love with Apple, everything else will take care of itself.

   They’ll want to do what’s best for Apple, not what’s best for them, what’s best for Steve, or anybody else.”

As noted in Self-effacing Entrepreneurs, seek people who will place your startup’s well-being before their own. Make it clear to your team that when your employees make decisions which are good for everyone, they are acting in their own self-interest.

4. Getting Some Booty

   “Why join the navy if you can be a pirate?”

Although violent and cutthroat, pirates during the 17th and 18th centuries were surprisingly egalitarian. Most crews shared the booty based on each crew member’s contribution. For instance, those who were part of boarding parties were given larger shares than those who stayed behind, in order to compensate them for their risk of bodily harm.

During pirates’ glory days, caste systems were prevalent across most of Europe. As such, becoming a buccaneer was one of the only opportunities for minorities and uneducated, non-landed whites to acquire wealth. In modern times, entrepreneurship offers the same egalitarian opportunity. As noted above, if you have the adequate stamina and intelligence, you will not be denied.

5. Knowing What To Connect

   “Creativity is just connecting things.”

As noted in Startups Are A Remix, creativity is often expressed by assembling that which has come before, in new and often surprising combinations. Startups comprised of members who apply a diversity of thought to solving problems are more likely to devise creative and inherently unique solutions. As Harvard Professor Michael Porter notes, competitive advantage is not derived by doing things, “better, faster, cheaper.” Rather, it is often the result of doing, “different things.”

6. Knowing What Not To Connect

   “I’m as proud of what we don’t do as I am of what we do.”

“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully.”

Returning to Michael Porter, “strategy isn’t what you do. It’s what you don’t do.” Knowing what not to do is far more challenging than attempting to do everything.

As noted in Go For The Quick Buck, there are times in a company’s maturation when it is forced to pursue activities that are not in its long-term interest. However, the danger with such opportunistic, short-term activities is that they derail the company from achieving its strategic goals.

7. Money Doesn’t Lead To Happiness, But Happiness Can Lead To Money

I first heard the preceding phrase from Mark Douglas, Co-Founder and CEO of SteelHouse. I am not sure if he coined this truism, but it is undeniably true.

“I was worth over $1,000,000 when I was 23, and over $10,000,000 when I was 24, and over $100,000,000 when I was 25, and it wasn’t that important because I never did it for the money.”

As described in Why You (And Your Employees) Have To Work, money only motivates most people to a point. Once their basic physical needs are satisfied, most people are driven by a combination of: mastery, challenge and an ability to impact a meaningful mission.

Jobs’ basic needs were more than covered with his first million dollars. It certainly is not realistic to say he never worked for the money, but he certainly did not pour his passion into Apple, NeXT and Pixar for the past 30-years in order to simply make more money. Jobs was clearly motivated by a strong desire to impact a meaningful mission, or in his words, “I want to put a ding in the universe.”

8. Leadership Is Breaking Wind

   “The people who are doing the work are the moving force behind the Macintosh. My job is to create a space for them, to clear out the rest of the organization and keep it at bay.”

Like Jobs, manage the obstacles that stand in your team’s way, rather than trying to manage your team. Draft the headwinds for your team so that they can focus their efforts on creating and producing, rather than battling external forces.

9. Big Dumb Companies Are Often Just That

   “So we went to Atari and said, ‘Hey, we’ve got this amazing thing, even built with some of your parts, and what do you think about funding us? Or we’ll give it to you. We just want to do it. Pay our salary, we’ll come work for you.’ And they said, ‘No.’ So then we went to Hewlett-Packard, and they said, ‘Hey, we don’t need you. You haven’t got through college yet.’” 

Just because an established leader in your industry does not see the wisdom in your ideas, do not waiver. As Clay Christensen aptly pointed out in The Innovator’s Dilemma, the very fact that they have a legacy they are forced to defend, makes it more difficult for them to assess which emerging technologies hold the most promise.

10. It Ain’t About Life And Death

    “Almost everything–all external expectations, all pride, all fear of embarrassment or failure–these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.”

Entrepreneurs never fail, when they follow their hearts. Having the necessary courage to follow your heart is success unto itself. Steve Jobs was a success on many levels, not the least of which was his willingness to ignore conventional wisdom and follow his heart.

Image source: 1/9/07 - David Paul Morris/Getty Images News

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One of the attributes identified by all of the venture capitalists questioned was, “Frugal use of capital.” In fact, several of the venture capitalists pointed out that successful entrepreneurs often have to be encouraged to spend more aggressively. In my experience at Rincon Venture Partners, I have worked with a number of successful, serial entrepreneurs who instill an urgent sense of frugality into their adVenture’s corporate culture. 

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Mayday Mayday

The most prevalent cause of private aviation accidents is running out of fuel. In most instances, the pilot miscalculates the amount of gas required to reach his destination. A number of issues can impact aviation fuel usage, including; headwind, speed, average altitude flown, cargo weight, number of passengers, etc. A mistaken assumption can result in a crash landing, and the pilot’s grieving family on the 11:00 news.

Cash is the fuel in your startup’s gas tank. You will not reach your destination without enough of it. Your adVenture’s journey is akin to a trip across the desert with no gas stations in route. When you embark on your journey, it is prudent to plan on crossing the desert on a single tank of gas. You cannot afford to speed, gun the engine, take detours, or spend your precious cash on a killer stereo to entertain you during your trek. If there happens to be a gas station along the way where you can fill up for a reasonable price, great. However, do not count on it. Capital efficient, web-based businesses should have a credible plan to self-sustainability. Future funding should be discretionary to propel prospective growth, not a matter of survival.

Living Below Your Means

Frugality was missing-in-action at many bubble-era Dot Bomb companies. In many cases, these companies were led by untested and unproven entrepreneurs who did not understand the importance of frugality.

In 2000, at Expertcity (creator of GoToMyPC and GoToMeeting, acquired by Citrix), we raised $30 million at an $80 million pre-money valuation – for a startup with absolutely zero revenue. After we closed this funding round, I vividly recall a conversation with a Senior Engineer who was aghast that I was not willing to commit millions of dollars to a billboard campaign in Times Square. His argument was, “What’s the risk? If it doesn’t work, we can just raise some more money.” This is not an apocryphal story. These words were actually uttered by an otherwise intelligent human being. This absurd statement caused me to realize that I had done a poor job of instilling a sense of frugality into our organization.

Along with Selling (see Be Like Sam) and Networking (see Making Stone Soup and Personal Pitch), negotiating is a vital startup skill. ALL of your employees must sell, network and spend the company’s money as if it were their own.

Most rational adults are fairly judicious with their own money (obviously to varying degrees), but many of these same adults often spend their company’s money as if it is an infinite resource. Fortunately, most people with this dysfunctional spending gene work at Big Dumb Companies and government agencies.

One way to combat reckless spending is to instill a sense of pride in your employees to never pay full price. For instance, whenever someone at your venture saves your company money, send a company-wide email acknowledging their accomplishment. Although some of these emails will highlight relatively small savings, these communications will serve as a reminder that every member of the team should remain alert to identify money saving opportunities. It will also create a forum to acknowledge and reward employees who put into practice this important aspect of your startup’s culture.

By publicly acknowledging employees’ efforts to spend the company’s money wisely at the aforementioned startup, we went from the spendthrift mindset uttered by the Senior Engineer to a culture in which employees stopped me in the hall to tell me how they had saved the company $50. See How To Create A Celebratory Culture for other tips regarding how your team can revel in its small victories.

You should never be embarrassed to ask for a discount. Rather, you should be ashamed to pay full price. Encourage all of your employees to ask, “Is that your best price?” when they rent a car, check into a hotel, buy paper for the copier, etc. This simple question will result in real savings and will help to ensure that your employees spend the company’s money as if it were their own.

Every dollar your team spends in a non-productive fashion has a direct impact on each employee, irrespective of the stage of your adVenture.  In the early stages it equates to an additional dollar that must be raised in a future funding round, thereby increasing the relative dilutive impact of such a round. In a company’s latter stages, a wasted dollar directly impacts the company’s exit valuation, which is influenced by the company’s net income.

Professional Negotiator

Consider assigning someone in your Finance department the responsibility of negotiating all of your company’s large purchases. At Expertcity, I shared the cost savings with one of our Financial Analysts. For every dollar he saved the company, he earned twenty cents, which was paid in the form of a quarterly bonus. Once he proved his negotiating skills, people from all over the company brought him significant acquisitions for him to negotiate.

Enter Liquidator Larry

The manner in which you and your employees spend your precious cash should have no correlation to how much money you have in the bank.

Despite the fact that we had over $30 million in cash in the bank at Expertcity, I dubbed one of our salespeople “Liquidator Larry”, due to his talent for purchasing used office equipment and furniture from failing companies. Our adVenture was located in an incubator, and as each Dot Bomb went up in flames, we purchased their office equipment (and sometimes even their office supplies) in conjunction with taking over their office space. In fact, in some cases, we were able to acquire a sizable amount of office equipment and furniture for free, in exchange for relieving the failed companies of their lease obligation. It was more than a fair exchange, as we relieved several people of multi-year lease obligations that would have been disastrous to their personal finances.

Another Reason To Be Like Bill

For many years after Microsoft became highly successful, its executives (yes, including Mr. Gates) flew coach. Clearly they could have afforded more luxurious accommodations. However, Gates and company realized that there were far more productive uses of Microsoft’s cash than to expend it to ensure the temporal comfort of a handful of traveling Executives.

Bill understood that startups must spend their money on assets that will deliver a Return on Investment (“ROI”). Avoid pricey office space and expensive office furniture. In a few select instances, such showy spending might be warranted, especially in the public aspects of your business (e.g., the lobby, customer training rooms, etc.). However, when outfitting your offices, keep your ego in check – only purchase expensive accoutrements if they will directly lead to incremental sales.

The one exception to purchasing economical office furniture is office chairs. Spend adequate money to purchase chairs that will minimize ergonomic injuries. Allow your employees to select a reasonably priced chair from an approved list. Empowering your employees with this choice demonstrates that you are concerned about their comfort. In addition, they will be less likely to complain about a chair that they selected.

When hiring early employees, shun candidates who value non-monetizable creature comforts. Make your employees "comfortable" by focusing the company’s expenditures on acquiring productive assets which will maximize the value of their equity and ensure that they will consistently receive a paycheck. A mahogany desk or a blowout Holiday Party will not motivate employees who are on the brink of losing their jobs. In fact, non-ROI spending will ultimately fuel resentment and disillusionment and cause employees to ask the very reasonable question, “What is valued more at this startup? Executive perks, lavish parties, fancy furniture, or the company’s long-term survival?”

Darwinian Reality

Companies do not run out of money. They run out of investors willing to give them money. You can avoid running out of friendly investors by ensuring that every dollar spent at your startup is associated with a clear and measurable return.

Image courtesy of: http://www.channelship.ie

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I review these tenets with my entrepreneurial students at UC Santa Barbara at the beginning of each quarter to reinforce many of the key topics we will cover in the following weeks. They are listed below augmented with quotes from Jeff Bezos taken from various points in his career.

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1. Establish A High Hiring Bar  – You’re Creating An Enduring Culture

   “I’d rather interview 50 people and not hire anyone than hire the wrong person.”
   

   “Cultures aren’t so much planned as they evolve from that early set of people.”

   As discussed in Hiring Entrepreneurs, the impact of each new hire during your startup’s early days is tremendous. A mis-hire at the outset of your company can irreversibly alter the trajectory of your corporate culture. If you hire sharks, you cannot expect them to act like dolphins.

2. Be Stubborn And Flexible

   “We are stubborn on vision. We are flexible on details…. We don’t give up on things easily. Our third-party seller business is an example of that. It took us three tries to get the third-party seller business to work. We didn’t give up.”
   

   “If you’re not stubborn, you’ll give up on experiments too soon. And if you’re not flexible, you’ll pound your head against the wall and you won’t see a different solution to a problem you’re trying to solve.”

   This advice is easier said than done, as it is difficult to know when you should be flexible with your vision and when you should remain dogmatic to your ideals. As noted in Optimistically Pessimistic, successful entrepreneurs are indifferent as to the specific tactics they must employ to accomplish their fervently held strategic objectives. If your culture rewards those who seek the truth, your team will be prone to objectively identifying tactical course corrections.

3. Obsess About Customers, Not Colleagues Or Competitors

   “We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.”

   “There are multiple ways to be externally focused that are very successful. You can be customer-focused or competitor-focused. Some people are internally focused, and if they reach critical mass, they can tip the whole company.”

   As Jeff points out, hiring right-minded people who will reinforce the attributes of your corporate culture is crucial. In this case, if enough people enter your organization with a self-serving mindset, such people will eventually dictate that selfish behavior is the norm and it will become part of the de facto culture. By obsessing on serving your customers, you can create a Long Spoon culture in which employees feed each other, rather than feed on each other.

4. Know When To Throw Away The Organizational Chart

   “The great thing about fact-based decisions is that they overrule the hierarchy. The most junior person in the company can win an argument with the most senior person with regard to a fact-based decision. For intuitive decisions, on the other hand, you have to rely on experienced executives who’ve honed their instincts.”

   In the early days of a startup, the Core Team must accept input from all levels of the organization, rather than be wedded to the artificial hierarchy of an organizational chart. Although this can be a bit chaotic, the free-flow of ideas during an adVenture’s Beach Volleyball days is often crucial to its eventual success.

   Additionally, startups are constantly evolving and it is not unusual for them to be restructured several times before they reach maturity. At Expertcity (creator of GoToMyPC and GoToMeeting, acquired by Citrix), our VP of Product and Customer Experience led a number of teams during his seven-year tenure including Professional Services, Customer Service and Product Management. As noted in How To Maximize Your Value At A Startup, I also held a variety of positions while at Expertcity. Flexibility and putting the company first were intrinsic aspects of our culture.  

5. Get Good Advice — And Ignore It (aka: Know When To Throw Away The Rule Book)
   

   From the start, Amazon had an audacious goal – to sell virtually every book online. Before launching Amazon, Jeff consulted with several publishing experts, none of whom appreciated the Internet’s eventual ubiquity. They applied a rearview mirror perspective to Jeff’s proposal and attempted to dissuade him from pursuing such an encompassing strategy. Their advice was to focus on best-selling books and a handful of popular genres – the same approach which had been successful for large retail booksellers.

   “Every well-intentioned, high-judgment person we asked told us not to do it. We got some good advice, we ignored it, and it was a mistake. But that mistake turned out to be one of the best things that happened to the company.”

   By offering an inventory which far surpassed anything else available at that time, Amazon endeared itself to its early users, who happily granted the company priceless word-of-mouth promotion. If Jeff and his team had launched a more prudent, scaled-back site, it is arguable they would have never achieved the critical mass that eventually led to the company’s widespread market acceptance.

6. Don’t Chase The Quick Buck

   “Sometimes we measure things and see that in the short term they actually hurt sales. But we do it anyway, because we believe that the short-term metrics probably aren’t indicative of the long term.”

   As I discuss in Entrepreneurs Should Go For The Quick Buck – Then Stop, there are situations in which a startup can generate profitable, near-term revenue that does not support, and may even undermine, its long-term strategy. In some instances, it is reasonable to generate such revenue as a means of financing your business. The toughest aspect of such opportunities is weaning your company off these  “bad profits” and focusing on opportunities that may not have an immediate payoff, but will drive long-term enterprise value.

7. The Two Pizza Rule

   If improperly administered, meetings become counter-productive, especially as an organization grows beyond its initial startup phase. In order to avoid the meeting frenzy that can overtake a growing startup, Jeff imposed the Two Pizza Rule early in Amazon’s life. This guideline dictated that no more people than can be comfortably fed by two pizzas should meet at any one time. This encouraged task groups to be limited to five to seven individuals.

   There is usually a direct correlation between a meeting’s length and the number of participants – the larger the group, the longer the meeting. Thus, smaller meetings facilitate efficiency and accountability.
   I worked with a team from Amazon a couple years ago and they proudly told me that the Two Pizza Rule was still in place, although they conceded they were forced to relax it, “from time to time.”

8. Growth Happens In Bounds And Leaps — Of Faith

   The very creation of Amazon was the result of a leap of faith. Jeff left a comfortable Wall Street career to enter a world he knew little about. He was not an expert in technology, inventory logistics or publishing. Yet, like container shipping tycoon Malcom McLean, Bezos felt that the idea was so “obvious and compelling,” he had to leap.

   “The framework I found which made the decision incredibly easy was what I called – which only a nerd would call – a ‘regret minimization framework’. So I wanted to project myself forward to age 80 and say, ‘Okay, now I’m looking back on my life. I want to have minimized the number of regrets I have.’(If I did not start Amazon) I knew that that would haunt me every day.”

   Understanding the power of a thoughtful leap of faith, Jeff encouraged his employees to take their own bounds into the unknown by creating a culture that did not castigate well-reasoned risk taking.

9. Be Simpleminded

   ”You have to use your judgment. In cases like that, we say, ‘Let’s be simpleminded. We know this is a feature that’s good for customers. Let’s do it.’”

   Ask Kevin O’Connor, Founder of FindTheBest and DoubleClick, points out in his interview, business is simple. Economically solve a problem that matters and everything else will take care of itself.

   Because of his grounding as an investment banker, Jeff appreciated the value of hard data. However, he also understood that data has its limitations. As such, Jeff encouraged early Amazon employees to not overly intellectualize the company’s problems. When in doubt, Amazon employees were told to deploy logical, common sense solutions that were in the best interest of its customers.

10. Add Up Lots Of Little Advantages

    Web-based businesses must compete in the blinding light of total transparency. They cannot rely on discovering a propriety methodology that they can protect via intellectual property common law. Every time Amazon made a change to its website, whether it be modifications to its customer acquisition funnel, upsell techniques, customer service, etc., it was instantly broadcast to its competitors.

    This caused Jeff and his team to focus on constantly making the less evident back-office processes, as well as the consumer-facing aspects of its business, incrementally better. Numerous small changes, any one of which had a small impact on inventory costs or customer conversion metrics were compounded when combined with other small improvements. A company that is constantly improving, even in small ways, is a difficult company to beat.  

    These small, back-office changes eventually led to the technological expertise underlying Amazon Web Services (AWS), by far the most successful public cloud computing platform. Analysts predict that AWS revenues will eventually exceed Amazon’s retail sales. Thus, such “small improvements” will undoubtedly create more intrinsic value than Jeff ever envisioned when he took his initial leap of faith.

List Source: FastCompany, Inside the mind of Jeff Bezos, August 04

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Team Above Self – the Team’s objectives supersede those of the Individual
The ninth tenet outlined in Core Values

When I was an operational startup executive, I seldom lost my temper in the workplace. However, one of the few things that angered me at a base level was when an employee would place their personal interests above those of the company.

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Such behavior can manifest itself in a variety of ways, including cavalier spending: staying in an overly expensive hotel, buying a pricey bottle of wine on the company’s credit card or traveling during the week, even though it is cheaper to do so on the weekend. You can eliminate this point of frustration by encouraging all your employees to spend the company’s money as if it were their own. Given that most startups grant their employees ownership in the form of stock options, this proprietary sentiment is rooted in fact.

I would also lose my patience whenever someone expressed a “that’s not my problem” attitude. During the early days of a startup, if the company is facing a challenge, it is everyone’s responsibility to help resolve it (see the fourth tenet of Core Values).
A startup’s primary goal is survival. Organizations which work in harmony and focus their energy tackling external challenges, rather than dealing with internal strife, have a much longer lifespan and a higher probability of success. 

Not Falling Is The Goal

As noted in Be The Beatles, instilling a common shared worldview and vision is an effective way to galvanize your team and encourage them to put the company’s well being ahead of their own self-interests.

Catch people doing things right and reinforce that helping their compatriots succeed is in their self-interest. Meaningful contributions, including one department’s support of another department’s success, should be rewarded and publicly acknowledged in a Company Meeting as a means of creating a Culture Of Celebration. If your corporate culture encourages and rewards such collaborative behavior, your team will realize that the company’s best interest and their self-interests are one in the same.

Long Spoons

There was once a world traveler who came across a group of gaunt, famished individuals who were skulking around a steamy pot full of a hearty stew. The traveler was initially confused as to why they were so malnourished, as the stew smelled enticing and appeared very appetizing.

She then noticed that each person held a very long spoon. The spoons were so long it was not possible for them to bring the stew to their mouths. She also noticed that each person was angry and antagonistic toward their fellow famished compatriots.

Feeling rather awkward, the traveler continued on her journey. After traveling a fair distance, she came across a similar pot of steaming, flavorful smelling stew. The people surrounding the pot were all well-fed, happy and very cordial to each other.

At first, the traveler was confused, as this group all held spoons of the exact same design and length as the first group. Why was one group famished and disgruntled while the other group, faced with the same challenges, was well-fed and content?

Don’t Feed On Each Other

Jeff Bezos advised his early employees at Amazon to Obsess About Customers, Not Colleagues.

The difference between the groups was the manner in which they interacted with each other. The second group used the long spoons to feed each other. By doing so, they not only ensured that everyone received proper nourishment, they also developed a healthy dependency and camaraderie derived from working together to overcome adversity.

Emulate Amazon and foster a culture that encourages team members to solve customer problems while feeding each other. Startups are typically too busy to deal with internal squabbles between team members. Thus, initially punish and eventually extricate any member of your team who undermines the culture of Long Spoons.

A team that builds each other up, much like the Beatles did during their ascendency, will have a much more enjoyable journey. Such collegial teams can also expect a more rewarding adVenture, as they can focus their collective energy on growing shareholder wealth, as opposed to scheming against their compatriots.  

dency and camaraderie derived from working together to overcome adversity.

Emulate Amazon and foster a culture that encourages team members to solve customer problems while feeding each other. Startups are typically too busy to deal with internal squabbles between team members. Thus, initially punish and eventually extricate any member of your team who undermines the culture of Long Spoons.

A team that builds each other up, much like the Beatles did during their ascendency, will have a much more enjoyable journey. Such collegial teams can also expect a more rewarding adVenture, as they can focus their collective energy on growing shareholder wealth, as opposed to scheming against their compatriots.  

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Entrepreneurs must be unreasonable in order to dismiss the status quo and create novel solutions. However, an irrational lack of reasonableness will sabotage an entrepreneur’s efforts.

In the following video, I explain how emerging entrepreneurs can develop the confidence, courage and conviction necessary to know where and when it is appropriate to be unreasonable.

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After some brief introductory remarks, I explore the Three C’s of Wealth Creation: Confidence, Courage and Conviction, starting at the 50 second mark. I gave this talk was given to perspective and current UC Santa Barbara students, hence my references to UCSB’s Technology Management Program (TMP). You may want to run the video in the background and listen to it while you remain otherwise productive.

Additional thoughts below:

Confidence

“Confidence comes not from always being right but from not fearing to be wrong.” 
Peter T. Mcintyre, Philosopher

Entrepreneurs who have no basis for their confidence are doom to failure. Unbridled confidence is often a sign of someone who is lacking the Whole Package. Self-aware entrepreneurs base their confidence on their experiences, including their various Mini-ventures.

Similar to a musician, entrepreneurial skills are honed and refined over time by putting them into practice. Legitimate entrepreneurial confidence is derived from one’s ability to execute, just as a musician gain self-assurance by practicing their instrument.

Courage

“Courage is not the absence of fear but rather the judgment that something else is more important than fear.”
Ambrose Redmoon, American Writer

Once a foundation of confidence is established, the next step is to develop an appropriate level of courage. One way to enhance your bravado is to demystify entrepreneurial success.

You can do this by speaking with successful entrepreneurs and asking them to elaborate on their failures, as well as their successes. You should also ask them to recall their mindset early in their careers and why they made the various decisions which eventually resulted in their success. In most cases, you will find that although they made numerous mistakes along the way, they learned from each misstep and quickly adapted to the ramifications of their decisions. You can also read about the trials and tribulations of successful entrepreneurs, but as I note in Why Business Books Suck, most such books focus on the protagonists’ successes and either omit or downplay their failures.

Quora, LinkedIn, Twitter, etc. provide emerging entrepreneurs with an unprecedented ability to establish a rapport with successful entrepreneurs. If you properly take advantage of these forums, you will find that success is not “something that happens to other people.” Success happens to people who have the confidence and courage to remain focused on achieving success, as described more fully in The Myth Of The Epiphany.

Conviction

“A man of conviction is often more to be desired than a man of experience.”
Curt Siodmak, American Screenwriter

Unreasonable entrepreneurs make enemies, cause waves and generally disrupt conventional norms. Such behavior disturbs most people, especially those who have something to lose.

As noted in What If?, entrepreneurs invariably face a variety of Dream Killers. These folks range from the bitter to the well-intentioned. However, in each case, they attempt to persuade the entrepreneur to abandon their unreasonable quest and become an ATM Operator. It takes tremendous conviction to thwart the Dream Killers.

Wealth Creation Is Not About Greed

From about 4:20 in the video, I make the distinction that wealth creation is not simply about piling as much money as possible into one’s bank account. True success is measured by one’s contentment, which is often derived from the following factors:

Balance – truly successful people have a loving cadre of family and friends with whom they share their monetary success. Financial success is a hollow victory if it is coupled with personal failure. Balance involves allocating sufficient time to your family, romantic and platonic relationships, such that each flourishes. The unconditional support of friends and family will bolster your confidence, courage and conviction.

Years ago, I was driving home from one of my startups late one night when I saw a huge meteor arc majestically across the ocean. Even though it was an incredible sight, it was somewhat unfulfilling as I had no one with whom I could share the thrill. Focusing solely on your professional success is similar to going on an epic vacation alone. At every picturesque spot, I would feel the urge to turn to the nearest stranger and say, “Wow. Isn’t this incredible?” This desire to share life’s experiences may not be universal, but it is valued by most people.

Giving Back – economic success entails a responsibility to assist others. Such contributions can manifest themselves in the form of time or money. Most emerging entrepreneurs have little time to devote to philanthropic endeavors. However, as their adVentures mature, they can encourage employees to take time off to assist non-profit initiatives. Once they achieve monetary success, successful entrepreneurs have more time and money to smooth the path for those who are less fortunate.

Doing Well By Doing Good – as noted in Time Wounds All Heels, honesty is a common trait among successful serial entrepreneurs. Wealth is most easily created by delivering a clearly communicated value prop to well-informed, willing buyers. Deception and fraud might lead to near-term gains, but long-term business models are never based on dishonesty.

Unreasonably Successful

Emerging entrepreneurs who develop the necessary confidence, courage and conviction will find that their unreasonable view of the world will eventually become the norm if they stand firm on the Three C’s of Wealth Creation.

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“It’s not hard to make decisions when you know what your values are.” 

I recently gave some advice to a software engineer who was trying to decide between two startups. My advice is was not earth shattering, but the engineer was appreciative nonetheless. He must have read my Thank You entry, as he later sent me an awesome selection of beer and wine as an expression of his gratitude.

I have summarized my straightforward counsel below, in the hopes that it might help someone else who is in the advantageous position of selecting between multiple startup opportunities.

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Backstory

Theoretically, the engineer had been working three days a week at Startup A and two days a week at Startup B, for the past year. In reality, his hellacious workload encompassed seven days a week. Startup B had recently asked him to join full time, as their VP of Engineering. If he accepted the position, he would have to terminate his long-standing relationship with Startup A.

The decision was difficult for a number of reasons. For one, the engineer was one of a handful of employees at Startup A and he knew the team would suffer a significant blow if he departed. The company was struggling and it would be a challenge for them to bring in a new developer who could readily build upon his partially completed codebase.

In addition, he had taken a pay cut at Startup A in 2009 and was accruing a note payable equal to his back pay. He was concerned that he might never be paid if he left. Conversely, although it was in an exciting space with tremendous promise, Startup B was nascent and faced significant execution risk.

Free Advice Worth Thrice The Price

It was against this backdrop that the engineer was evaluating which adVenture to join full time.  My advice was as follows:

Lady Luck Not, “I am stuck” – You are lucky, as you have two viable options from which to choose in an economy in which many people are suffering. You can only base the decision on the facts you currently have, thus do not be concerned about subsequently second guessing yourself. If you diligently gather the facts and evaluate them in an intellectually honest manner, then you will have made the “right” decision, irrespective of the ultimate outcome.

Learning Not Earning – As described in Advice For Anyone Else With A Boss, determine which opportunity will allow you to learn the most, based on presence of the following elements:

• Team has a track record of success
• Team is willing to tutor you and share their knowledge
• The industry is dynamic and is likely to grow significantly in the near term
• The opportunity will allow you to address challenges you have not faced previously
• The corporate culture supports employees taking on as much responsibility as they prove they can handle

Experience Not Resume Building – Do not worry about building your resume and do not obsess about your title. As noted in Entrepreneurship Is Best Learned Experientially, startup careers are built upon experiences. Thus, select the opportunity that will provide you with experiences that are widely transferable across industries.

Heart Not Head – Rationally list the pros and cons associated with each company and then tear up the list; look into your heart and ask yourself which opportunity you want to pursue, rather than which opportunity you should pursue.

You Not Them – Do not focus on what others want you to do, they do not have to live with the consequences of your decision. 

Upside Not Downside Mitigation – Although financially significant, your accrued pay is best viewed as a sunk cost. It should not influence your decision, as you will ultimately create more wealth by pursuing the most lucrative future endeavor rather than attempting to salvage compensation associated with your legacy efforts.

Once the engineer viewed his options through the lens of my humble advice, his values came into focus and his decision became obvious. He elected to take the VP of Engineering position with Startup B. Although it has only been a few weeks, I recently exchanged emails with him and he indicated that now that he is working fulltime at Startup B, he is surprised that his decision was initially so difficult.

If you are relatively early in your career, like my engineer friend, then one of your primary professional values should be gaining extensible experiences upon which you can build a successful career. Thus, selecting a job opportunity based upon the potential to learn and grow professionally should be one of the values underlying your decision. Following Roy Disney’s guidance, if you first invest the necessary time to define your values, many of your subsequent decisions will seemingly make themselves.

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