The Big Winner

August 18th, 2008 by admin

This fall is a glorious time for autobiographies written by billionaires. I count five books coming out soon:

First is billionaire T. Boone Pickens’ third autobiography (after “Boone” and “The Luckiest Guy in the World”).  I anticipate it is designed to tie in with the energy plan he has been promoting across the country: increased usage of wind and natural gas while decreasing reliance on oil.

Next is Sam Wyly’s book.  I had never heard of him before browsing through Amazon, but he is on the Forbes rich list.  He founded several companies and bought a majority interest in the craft store Michael’s, which he sold to Bain Capital and Blackstone Group for $6 billion.

Richard Branson also has a new book coming out next month.  Entitled “Business Stripped Bare,” it continues the trend of saucy titles (his previous books were “Losing My Virginity” released in 1998 and “Screw It, Let’s Do It” in 2006).  The blurb says it contains information on the launches of Virgin Mobile USA, Virgin America, Virgin Galactic, and saving the world.

Ted Turner also has an autobiography scheduled for release in November.  As far as I know, Turner has never written a story of his life, so this book will be an exciting opportunity to learn more about the founder of CNN.

Finally, next month holds the launch of a book about the richest man in the world.  While Warren Buffett’s letters to shareholders are consistently excellent, he has never written a memoir.  This won’t change, but the new book is based on extensive interviews with him.

August 17th, 2008 by admin

Ken Hess founded a successful software company and sold it to Broderbund after 200 successful software releases. Sales were $26 million for the fiscal year when Ken left the company. His speech and checklist are a little over ten years old but still seem relevant to the software industry today.

Ken’s Checklist for Building a Company

This checklist is about getting the odds in your favor. Fitting together all these pieces of the puzzle is what separates a good business plan from mere speculation.

1. Are you focused on creating the product?
2. Are you the world expert in your product niche?
3. Does your product meet viable new product criteria?
4. Do you have the force of will to make things happen regardless of the inevitable obstacles?
5. Do you need help?
6. Are you spending money wisely?
Then once you’ve shipped, continue to ask:
7. Will today’s task contribute to or diminish the organization’s focus?
8. How can I broaden the market?
9. Is the company’s scale appropriate to the task?
10. Is it time to sell?

Source:
http://www.klhess.com/sef_spch.html

August 16th, 2008 by admin

Y Combinator is an innovative venture fund run by a successful hacker (the good kind) - the multimillionaire Paul Graham and his associates. My last post was a speech by Charlie Munger featured on the Y Combinator site. The site also has a library of advice from successful people and some book recommendations:

http://ycombinator.com/lib.html

One great selection is An Engineer’s Guide to Venture Capitalists, written by an author who spent time as an engineer, founder, executive and served in more roles with other startups:
* VCs don’t sign nondisclosure agreements.
* VCs are sheep.
* VCs aren’t technical.
* Experts aren’t very good.
* VCs don’t take risks.
* Venture funds are big.
* VCs collude.
* VCs don’t say no.
* VCs have pets.
* Your idea, your work, their company.

New incubators like Y Combinator are changing the status quo and refuting many of these points, but the advice may still be true in some sectors.

August 15th, 2008 by admin

I’ve talked about Warren Buffett’s business partner and his advice in a couple of previous posts. The posts were Billionaire Charlie Munger and the Art of Stockpicking and Invest Like Berkshire Hathaway billionaire Charlie Munger. Via the Y Combinator venture firm’s web site, I found another one of his excellent speeches. The speech is entitled “A Lesson on Elementary, Worldly Wisdom As It Relates To Investment Management & Business” and was given in 1994 at USC.

Munger’s speech focuses on mental models and creating a mental framework for investing. If investors don’t have a consistent framework that adjusts for their cognitive biases, it is much more difficult to be successful. This is also a theme in recent books like Ken Fisher’s “The Only Three Questions that Count” and Jason Zweig’s “Your Money and Your Brain” which take behavioral finance and the psychology of investing into account.

Source:
http://www.ycombinator.com/munger.html

August 14th, 2008 by admin

Babak Nivi is a serial entrepreneur and advisor to several successful startups, as well as the co-founder of Venture Hacks. He includes some sample responses for situations where the tide turns against you.

When you are an investor (angel or venture capitalist) and an entrepreneur declines your offer to invest:
“Congratulations! Awesome! Wicked! Is there any room left for us to participate!?”

When a company decides to hire someone else for the job you were hoping to get:
“Congratulations! Awesome! Wicked!!! Please keep me in mind for the next opportunity… is there anything I can do to improve my chances next time?”

If you are recruiting a top performer and they end up going somewhere else:
“Fucking AWESOME! I wish you the best of luck on your new gig… give me a shout when you’re ready to move on.”

Saying ‘I’m disappointed’ makes you sound like a tool.

The above advice is awesome, even though I’ve never heard anyone say “wicked” as an exclamation before. Maybe it’s because I’m from the midwest : )

Source: http://www.nivi.com/blog/

August 13th, 2008 by admin

I was organizing my Delicious bookmarks and found an old but good post by Ben Casnocha with notes from The Stanford Conference on Entrepreneurship in 2005. One of the headliners was Amazon.com CEO Jeff Bezos. A few of the points Bezos covered include:

* Don’t accept the status quo and learned helplessness. Instead, look for problems in everyday things or processes and innovate to find a better way.
* Reject either/or thinking.
* First identify a certain technology or a specific solution. Then, define a problem that can be solved by that technology.
* Instead of thinking about what will change in the future, think about what’s not going to change.
* Some people have innate skills that come easily to them and can’t be taught. However, you can teach people to have high standards.

Source:
http://ben.casnocha.com/2005/02/stanford_confer.html

August 12th, 2008 by admin

Jason Goldberg, the CEO of jobster, is now the leader of a second company. His new startup is socialmedian: a company that helps people create news feeds that are relevant to their interests. In the post, he gives a list of eleven insights based on his previous experience as well as his new experiences. Below is a summary of the eleven points. Further detail is found in the full piece linked at the end of this post.

1. Only take venture capital money if you are sure of success.
2. Keep your budget very tight until you have legitimate growth.
3. Use offshore development to reduce costs.
4. The CEO should also be the product manager until the product is fully accepted by the target market.
5. Work closely with offshore teams instead of just expecting them to follow a spec with rigid requirements.
6. Resources for working with offshore teams include TRAC, basecamp, and Skype.
7. Ship fast and iterate faster.
8. Communicate with users via social media resources (like Twitter, FriendFeed, Facebook, etc).
9. Keep perspective and go for strong singles and doubles instead of home runs.
10. Do your own customer service.
11. Get a personal trainer : )

Source:
http://blog.socialmedian.com/2008/08/7_months_into_my_2nd_stint_as.html

August 11th, 2008 by admin

I found a blog entry that talks about a team at Microsoft giving a demo to Bill Gates. It gives some interesting insight into how the team deals with pressure and how BillG evaluates ideas.

And he listened, laughing a little from time to time, asking the odd question. I’d been at one of these before, but sitting along the wall, looking at the back of Bill’s head. This time I was at the big boy’s table. Last time, I’d tracked f-bombs, keeping a running total in my head: the higher the number, the worse you’re doing. The last time, we had one/hour, which was considered to be outstanding. This time, zero. Even though the demo I’d prepared didn’t go off flawlessly (there was a continuous reset in the underlying communications stack we were using that we’d never seen before), he got enough of the demo to appreciate our intent and was interested enough in the the rest of the material to seem pleased.

Near the end, he started talking more, synthesizing our work with the work going on in the rest of the company, making startling leaps that I’d never considered (and I’ve got pipe dreams in my head for the upcoming release and the one after that). We agreed some. We pushed back some. We asked him for help making some things happen.

Source:
http://www.sellsbrothers.com/news/showTopic.aspx?ixTopic=2181

August 10th, 2008 by admin

I found this post on Get Rich Slowly, and it is a nice change from the traditional advice at GRS.

Wesabe is a financial social network and a great resource for anyone who wants to improve the state of their finances and meet other people with similar goals.

Here are the main points from the interview. The CEO (Marc Hedlund) goes into greater detail on each point in the blog post linked below.
* Starting a business with friends can be fantastic
* Write someone and ask them for help every day
* People matter more than anything
* Don’t worry about the idea
* Take money from other people as an absolute last resort
* Know your customers
* Have confidence in yourself
* Treat people well

Source: http://www.getrichslowly.org/blog/2008/08/10/entrepreneurship-advice-from-marc-hedlund-ceo-of-wesabe/

August 9th, 2008 by admin

Tim Ferriss, the author of the bestselling book The Four Hour Work Week, recently had a conversation with the founder of CD Baby at the SF MusicTech Summit. As I mentioned before, this is one of my favorite interview formats - where multiple successful people come together to ask each other questions.

For a bit of background information, here are some stats on CD Baby:
- 242,846 artists sell their music at CD Baby
- 4,574,622 CDs sold online to customers
- $83,590,381 paid directly to the artists

Some great points from the interview:
Derek:
* everyone reading this has something they’d like to be doing if they didn’t have to do anything. For most of us, the fountain of creativity that would come from that would change your life.
* A friend of mine is neighbors with Steve Jobs, and said that as much as Apple seems to mysteriously pop out with an invention, Steve Jobs is relentless about asking everybody he knows, “What do you think of this? What’s your opinion on that?” Because he wants to keep some secrecy instead of putting it out to the world, he just does this constant testing among his circle of friends, constantly getting feedback on everything he’s doing along the way.
* When friends talk about starting a business I say if you’ve got idea you want to do, don’t sit there for a whole year trying to raise funding or whatever before you can put it out in the world. Just give yourself a 10-day deadline. If there’s something you think the world wants, try it within 10 days.
* I heard this beautiful bit of advice once that said, “If you’ve got a list of 20 things you should be doing, pick the most important one or two and then just let go of the rest.
* [David Allen’s book Ready for Anything] said “The world throws opportunities your way every single week. But if you’re feeling overwhelmed already, you’re not going to be able to embrace them. Keep your mind clear of these feelings of obligations so you can be open to receiving new opportunities.” I thought that was such a beautiful way of putting it.
* I used to admire people that would say things like, “I haven’t taken a day off in 17 years!” But your book made me look at that stuff in a new way. Now when somebody says that they work all the time, they never have a minute off, and they’re constantly checking their Blackberry, I think, “You’re really not in control of your life, are you?”
* Getting specific can turn vague desire into concrete action.

Tim:
* ask yourself what would happen if, say in a 48 hour period, you eliminated x or did the opposite of x?
* you can test-drive and micro-test things over brief periods of time
* if I’m not getting the result I want, what are my assumptions?
* I ran a dozen different ads with a dozen different potential titles as the advertising headline… I was only concerned with the click through rate - which of those dozen [potential titles for the book] was most popular.
* If you have something that you would like to make and you just don’t know how to test it, make sure you’re scratching your own itch.
* it’s very important to experiment with redistributing retirement throughout life, in the form of mini-retirements
* One of the questions I always ask, whether it’s in language or tango or publishing is, “What were the one or two biggest wastes of time?”
* Polarizing is very important. Don’t try to make everyone your customer and don’t try to make everyone happy. Be very, very honest. Don’t be offensive for the sake of being offensive. Don’t start problems for the sake of starting problems. Be honest, like three glasses in with a group of friends. If most people presented their opinions as they do in that environment to the public they would be much more successful in everything they do, because they’ll polarize people. People will say, “Damn that guy’s a riot.” So few people are honest and direct.
* it’s important not to spend your time online defending yourself. Give other people a chance to join into the melee
* Maybe the people who have popular commercial blogs also have personal blogs. Don’t contact engadget. Forget it, you’re never going to hear from them. Comment on their personal blog. By taking that indirect approach it makes it easy for the traffic leaders to link to you because you’re cited or covered or mentioned on this thought leader’s blog.

Sources:
http://www.fourhourworkweek.com/blog/2008/08/08/the-philosophies-of-work-a-conversation-with-derek-sivers-of-cd-baby/
http://sivers.org/tim-ferriss