A very bad sign for all but America's biggest cities - Chicago TribuneIn the economic recovery of the early 1990s, 125 counties combined to generate half the total new business establishments in the country. In this recovery, half the growth has been generated by just 20 counties.
OverreactingBut for many entrepreneurs, the battle wounds never fully heal. That was the case for John Pope, CEO of WellDog, a Laramie, Wyoming-based energy technology firm. On Dec. 11, 2002, Pope had exactly $8.42 in the bank. He was 90 days late on his car payment. He was 75 days behind on the mortgage. The IRS had filed a lien against him. His home phone, cell phone, and cable TV had all been turned off. In less than a week, the natural-gas company was scheduled to suspend service to the house he shared with his wife and daughters. Then there would be no heat. His company was expecting a wire transfer from the oil company Shell, a strategic investor, after months of negotiations had ended with a signed 380-page contract. So Pope waited. The wire arrived the next day. Pope--along with his company--was saved. Afterward, he made a list of all the ways in which he had financially overreached. "I'm going to remember this," he recalls thinking. "It's the farthest I'm willing to go." Since then, WellDog has taken off: In the past three years, sales grew more than 3,700 percent, to $8 million, making the company No. 89 on the Inc. 500. But emotional residue from the years of tumult still lingers. "There's always that feeling of being overextended, of never being able to relax," says Pope. "You end up with a serious confidence problem. You feel like every time you build up security, something happens to take it away." Pope sometimes catches himself emotionally overreacting to small things. It's a behavior pattern that reminds him of posttraumatic stress disorder. "Something happens, and you freak out about it," he says.
Hypo start-upsBusiness owners are "vulnerable to the dark side of obsession," suggest researchers from the Swinburne University of Technology in Melbourne, Australia. They conducted interviews with founders for a study about entrepreneurial passion. The researchers found that many subjects displayed signs of clinical obsession, including strong feelings of distress and anxiety, which have "the potential to lead to impaired functioning," they wrote in a paper published in the Entrepreneurship Research Journal in April. Reinforcing that message is John Gartner, a practicing psychologist who teaches at Johns Hopkins University Medical School. In his book The Hypomanic Edge: The Link Between (a Little) Craziness and (a Lot of) Success in America, Gartner argues that an often-overlooked temperament--hypomania--may be responsible for some entrepreneurs' strengths as well as their flaws. A milder version of mania, hypomania often occurs in the relatives of manic-depressives and affects an estimated 5 percent to 10 percent of Americans. "If you're manic, you think you're Jesus," says Gartner. "If you're hypomanic, you think you're God's gift to technology investing. We're talking about different levels of grandiosity but the same symptoms."
Startup study shows women founders do better than men - Business InsiderAfter examing a decade's worth of data from 300 portfolio companies, First Round Capital learned that startup teams with at least one female founder performed 63 percent better than all male teams. The data also showed that women are present in the top ranks of their ten most valuable companies.
People avoid risky innovationAs individuals, we have no portfolio strategy — so those 10% odds are no longer palatable. When we fail, most rational people respond by trying to avoid dumb ideas and pick smart bets with clear impact the next time. People who happen to have a hit in their first few tries are even more vulnerable to the belief that they have to succeed every time (and take it harder when subsequent failures inevitably occur.) And that’s it — the dead-end for innovation.
Burt's Bees started with a hitch-hikerAccording to company lore, Burt's Bees began after a chance meeting in 1984. Shavitz, then 49, a reclusive beekeeper who lived in a converted turkey coop and sold honey in pickle jars from the back of a truck, picked up a hitchhiker on a Maine roadside: Roxanne Quimby, 34, a divorced mother of two. The two moved in together and began selling Quimby's hand-cut candles and Shavitz's honey at craft fairs, In 1988, Quimby began selling lip balm made from warm beeswax and clove oil. Burt's Bees incorporated in 1989, with Quimby holding a 70% stake and Shavitz 30%.
your language is your reality | BloombergTell me that you program in Java, and I believe you to be either serious or boring. In Ruby, and you are interested in building things quickly. In Clojure, and I think you are smart but wonder if you ship. In Python, and I trust you implicitly. In PHP, and we sigh together. In C or C, and I nod humbly. In C#, and I smile and assume we have nothing in common. In Fortran, and I ask to see your security clearance. These languages contain entire civilizations.
Personality wins? The data says all that matters is product-market fit.The most important thing about a startup, even more important than the idea, is the team that supports it. An idea evolves over time, the product and business pivot as the environment changes, and the technology improves and gets disrupted. But throughout, the people make all the difference between success and failure. Both Vinit and Paul share a dedication to building an outstanding team, which is a large part of why I chose to become invested in the company’s vision.
Good tips for a reporter... or an entreprenuer, from WaPo's Dan ZakAlways put your name and contact information on the cover of your notebooks. Stay a little longer. Even just a minute. If you can go, go. Always go. Life doesn't usually conform to narrative, or, at least, a single narrative. Rigorous reporting can reveal arcs and themes and twists and denouements and literary-like symbolism, but in the end life is mostly open-ended, unsatisfying and incomplete. Honor that incompleteness. Respect it. "It's the reporting, stupid." (Someone said this, I don't know who, but Ann Gerhart had it on a Post-It note on her computer at one point.) Don't lose your way. Start to cheat a little, and soon you'll be cheating a lot. Every story, no matter how small, is somehow about the meaning of life (this is the Weingarten Corollary). Say "I don't understand this; help me understand this" early and often. Close interviews with "Who else should I talk to?" and/or "What else should I know?" and/or "Is there a question you wish I'd asked that you've been waiting to answer?" Answer every reader e-mail; return their calls, especially.
Product-market fitYou can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of “blah”, the sales cycle takes too long, and lots of deals never close. And you can always feel product/market fit when it’s happening. The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it. You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house. You could eat free for a year at Buck’s.
Entrepreneurs live on the edge (of sanity?)Forty-nine percent of entrepreneurs surveyed reported at least one mental health condition. Nearly a third reported having two or more mental health issues, such as ADHD, bipolar disorder, depression, anxiety or substance use conditions. And half of the entrepreneurs who reported no mental-health conditions identified themselves as coming from families with a history of mental illness.
The next tech bubble is about to burstFew of these VCs will actually use the term “tech bubble.” They have investments whose value they would probably prefer to not destroy. They’re hedging their bets by calling it things like a “risk bubble” (Gurley), an “escalating risk of a catastrophic down round” (Andreessen), or “Burning cash. Losing money. Emphasis on the losing” (Wilson). These semantic distinctions may seem important now, but they’ll seem quaint when people start losing their jobs.
Incubators hurt start-ups?Incubators promise a lot of resources to startups, like office space, printers, paper, events, networking, assistance connecting startup founders to funders, help with presentations and many other services, says Fetsch. “But the average incubator actually has less than two full-time staff and 25 businesses. That’s a lot of service to provide for two people. So are they really providing all the services they say? It seems unlikely,” she says. Although incubated businesses have slightly higher employment, growth and sales, they also have slightly lower survival rates after they graduate.
Innovation starts with forgetting.One doesn’t discover new lands without consenting to lose sight of the shore for a very long time. Andre Gide
Risk takers are scarce (in theory)It is not enough to think of an idea, or even to pursue it desultorily; the entrepreneur’s profit goes to the person who is willing to commit his time and energy to projects that may not succeed. Workers are guaranteed their salaries, lenders are guaranteed their interest, but the entrepreneur has no guarantee: he just collects all the money that is left over. That could be a fortune or it could be less than nothing at all. Most of us don’t want to take this risk. Part of the reason entrepreneurs are well rewarded is because they are scarce.
Yahoo in a paragraphYahoo essentially invented the online-advertising business. In 1994, two graduate students at Stanford, Jerry Yang and David Filo, dreamed up a way to help early users navigate the web. They picked URLs that they each liked — beginning with around 100 links, including one for Nerf toys and one dedicated to armadillos — and listed them on a page called “Jerry and David’s Guide to the World Wide Web.” Within a year, their guide had to be divided into 19 categories (art, business, etc.) and was generating one million clicks a day. In 1995, the year Yahoo started selling ads, a former company executive estimated that the entire market was about $20 million. By 1997, Yahoo’s ad revenues alone were $70.4 million. The next year, they were $203 million.To keep up with the growth, Yahoo quickly expanded beyond its directory to create a multitude of ad-supported products. The company aimed to be all things to all web users, and for most of a decade, it was a wildly successful strategy. In 1997, Yahoo added chat rooms, classified ads and an email service. In 1998, it introduced sports, games, movies, real estate, a calendar, file sharing, auctions, shopping and an address book. Even during the crash of the Internet bubble, a profusion of more traditional advertisers began to migrate from print to digital. The search business, in particular, was growing enormously. In 2002, Yahoo’s first full year monetizing search results with attendant ads, its revenues reached $953 million. In 2003, they eclipsed $1.6 billion. In 2004, they grew again to $3.5 billion.
Startups, Celebrities, And The Deadpool | TechCrunchThe list goes on and on. Having a celebrity on board means that picking up initial coverage from the media is easier. But that is at most what it means. Are companies with celebrity backing less focused on their fundamentals, or perhaps more focused on how they appear?
Paul Graham – Lecture 3: Counterintuitive Parts of Startups, and How to Have Ideas | GeniusQ: Do you see any value in business school for people who want to pursue entrepreneurship? A: Basically no, it sounds undiplomatic, but business school was designed to teach people management. Management is a problem that you only have in a startup if you are efficiently successful. So really what you need to know early on to make a start up successful is developing products. You would be better off going to design school if you would want to go to some sort of school. Although frankly the way to learn how to do it is just to do it. One of the things I got wrong early on is that I advised people who were interested in starting a startup to go work for some other company for a few years before starting their own. Honestly the best way to learn on how to start a startup is just to just try to start it.
The opportunity costs of being a young entrepreneurThere are things that you can do in your early twenties that you cannot do as well before or after. Like plunge deeply into projects on a whim that seem like they will have no pay off. Travel super cheaply with no sense of a deadline. […] Mark Zuckerberg will never get to bum around a foreign country. If he goes to a foreign county, it's either as a de-facto state visit or like he's hiding out incognito at George V in Paris.
Now, the first thing you should do before you start to live in a car is go read Walden by Thoreau, because living in a car isn't just a way to save a ton of money on rent (which it is). It's a chance to live in a completely different way, and to be happy with a whole lot less.
The Monte Carlo method is the only mathematically proven and statistically sound modeling technique for measuring risk quantitatively. It is used by the military, nuclear engineers, and the insurance industry. Do not make hand-wavy attempts to measure risk with scales like 1 to 10 or gut feeling or 2 x 2 matrices, as these are either at best useless, or at worst can actually be misleading. A quantitative method backed up by real math and empirical evidence is the only sound way to calculate risk. Anything else is just snake oil.
“The mentality of fission is that there is a systematic process—you define your loads, your criteria, and then you produce a design,” Chiocchio told me. “At the beginning, at ITER, sometimes I would ask my boss, ‘Can you tell me what the main requirements are for this component?’ And he would say, ‘What are you talking about? Try to find a solution.’ It was a bit more of a, let’s say, creative engineering environment.”
Q: That’s fine, but can you really develop BlogAds into a business? At some point, we know these passionate blog audiences have to yield gold for advertisers, or the simple premise that has funded media for the last 300 years — exposure helps a business grow — has been false. Frankly, though that time has not quite yet arrived. We’ve got some very satisfied advertisers on blogs. We can see the synapses firing. But won’t push the thing hard publicly until we’ve rolled out what we regard as the complete feature set that will complete the circuit. We’re still tinkering with the ingredients. It’s kind of like watching one of those nascent slime molds — you can see the thing starting to respond to stimulus and flirt with swarming. So you tinker with the environment and see what are the right parameters, what’s the right amount of stimulus, what’s the critical mass?
« Les start-up, c'est l'inverse de l'esprit français », sourit Cécile Alduy, l'universitaire de Stanford. L'esprit de collaboration est indispensable, la hiérarchie volontairement en retrait. « On essaie d'avoir le moins de directeurs possible, poursuit Florian Jourda. Les managers sont censés se mettre en dessous de l'équipe plutôt qu'au-dessus. »
In a survey asking about factors that contributed to their success, entrepreneurs ranked past successes and past failures above everything but prior work experience. Yet new research from from the Centre for European Economic Research casts doubt on that belief. In a recent paper, researchers used survey data to examine the success or failure of 8,400 entrepreneurial ventures in Germany, and whether the founder’s previous experience predicted the outcome. They concluded previously successful entrepreneurs were no more likely to succeed in their next venture, and that previously failed founders were more likely to fail than novice entrepreneurs. These results held even after accounting for education and industry experience.
“Without conflict resolution, two people making changes at the same time would clobber each other, and it would suck. But it wasn’t happening that often. So I just put in a comment saying ‘hey, we’ll have to fix this pretty soon.’ Four years later, that comment is still there and who cares? I thought it was going to be a problem, but it wasn’t. You can’t know what your biggest problems are going to be, so you can’t know what your features should be. Just do the shittiest thing you have to do.”