Seeing Both Sides

Fred Wilson Visits With the HBS Start-Up Tribe

For the second year, Fred Wilson of Union Square Ventures was kind enough to come to HBS to meet with the class Professor Tom Eisenmann and I co-teach called Launching Technology Ventures.  Similar to last year, it was a terrific session.

I started the class off by encouraging the students to live tweet the entire 90 minute session.  The Twitter stream (which you can see here, using the hash tag #hbsltv) nicely captured our dialog.  The class is made up of 100 "start-up ninjas", half of whom will start their own companies in the next year or two and half of whom will join start-ups.  The class covers the fundamentals of lean start-up theory, seeking product-market fit, and scaling challenges post product-market fit.  We do not have a final exam.  Instead, students need to write two blog posts, comment on two of their classmate's posts and participate in a business model excercise modeled after Steve Blank's "business model canvass" exercise at Stanford.  You can see the course blog here.

A few of the takeaways that struck me:

• Fred observed that failure is typically a valuable and powerful experience - forcing introspection, humility and an extra drive to prove something to others.  He observed that the entrepreneurs he has been most successful with typically had a major and personally defining failure in their career.

• He repeated a comment that we drew out from last year's conversation, which I particularly like:  "Start-ups should be hunch-driven early on and data-driven as they scale".  What was interesting was discussing the profile of the entrepreneur that has good hunches - often they come from outside the domain, yet are obsessed with the opportunity to disrupt the new field with a fresh perspective.

• We discussed the role of gate-keepers in start-ups.  Fred is skeptical of businesses that involve gate-keepers.  In fact, he encouraged the students to look for industries that have gate-keepers, and compete directly with them (e.g., education).

• When evaluating whether you want to join a company, think like an investor.  Conduct extensive due diligence on the team, the product and the market opportunity.  Ask yourself whether you would invest your money in the company before deciding to invest your career.

• Entrepreneur and start-ups have many varied models for success.  Don't try to follow someone else's model.  Stick with your personal passion and your authentic leadership model.  If you don't have your own start-up idea, go join a 50 person company and leave when there are 500 employees.  And if you have an idea and no one can talk you out of it, go be an entrepreneur. (Interstingly, Fred confessed that if he could have done it over again, he wishes he had joined a start-up for the first 10 years of his career.)

• We had an interesting dialog about the various start-up ecosystems - Silicon Valley, Boston, NYC - and how long it takes to build that ecosystem.  Our mutual friend Brad Feld has written extensively about this topic and is writing a book on it that should be coming out shortly.

At the end of the class, Fred had an encouraging perspective for MBAs around the world, not just in today's classroom.  He observed that the start-up community is all the richer due to the contributions of MBAs.  Just be sure not to be arrogant about your knowledge or degree - instead, put your head down and do great work!

Personal Reinvention - Lessons From the Kingdoms of Amalur

I became a venture capitalist over nine years ago, leaving my entrepreneurial career at the ripe age of 32.  At the time, I had been an entrepreneur for ten years across three companies, and felt helping start Flybridge Capital represented an exciting opportunity to team with a few friends to create a new kind of venture capital firm.  Equally compelling for me was the challenge of personal reinvention - pushing myself out of my comfort zone to learn a completely new operating model and face a new set of challenges.

I was reflecting on this as I read the fanfare over the last few weeks about former Red Sox All-Star pitcher Curt Schilling releasing his inaugural game, the Kingdoms of Amalur.  Talk about personal transformation!  Schilling retired from over 20 years in professional baseball to become a start-up entrepreneur, forming his gaming company, 38 Studios, in 2006.  I documented his transformation in a Harvard Business School case study called Curt's Next Pitch, along with my friend and colleague Professor Noam Wasserman.  

The launch of the Kingdoms of Amalur an amazing accomplishment.  Schilling has had to figure out a completely new blueprint for operating in the world of technology start-ups.  He joked with me when we were working on the case that much of his language had to be relearned - for example, "burn rate" used to be a good thing, representing how fast your heater sped towards the plate at the batter.

You don't have to be a World Series MVP to appreciate the difficulty in personal transformations.  It's something I see entrepreneurs struggling with all the time - sometimes they are trying to transfer their skills from one industry into another, other times they are trying to adjust to the new phases of their business - from inception to adolesence to more mature, scaling issues.  

Here are a few general lessons I've observed that are patterns of successful efforts towards personal reinvention:

• Don't be afraid to ask for help - and even risk looking dumb.  People who have achieved great success in one field become very proud of those achievements.  It is hard to take a step back and recognize that you need help to learn a new blueprint in the new field.  And sometimes finding people who you feel safe with - and able to ask the most basic, dumb questions - can be of great help.  Schilling sought out gaming executives from the very beginning who could mentor him and teach him the ropes and was never afraid to "start with the basics".  I remember struggling through all new concepts and modes of operation during my first year or two as a venture capitalist and leaning on my partners as well as mentors from other firms - and, importantly, swallowing my pride when doing so.  Too many folks get stuck dwelling on their past accomplishments rather than pushing forward into new fields.  As Ulysses says:  "Pride hath no other glass to show itself, but pride." In computer science terms, you would call that a "doom loop"!

• Understand your personal strengths and weaknesses - and how they fit in the new model.  Many entrepreneurs do not conduct enough deep self-reflection.  They may have the intellectual firepower to analyze the criteria for success in the new field, but lack the emotional IQ to appreciate how their own skills map.  What are your top three core strengths that make you special and unique?  What are the three things that your spouse or parents would say are your biggest faillings that you need to work on?  And how do these relate to the new field?  Delver deeply into who you are and how you operate, and then you will be better positioned to undergo the personal reinvention required ot tackle the new field.  Jerry Colonna has a nice guest post on the topic of "learning to lead yourself" on Fred Wilson's blog.

• Mantain the core success attributes - have the right, flexible mindset.  No matter what field you are tackling, there are an obvious set of core attributes that help individuals achieve success.  In the context of changing fields, the most important arguably is the importance of avoiding rigid thinking.  Don't keep applying the same blueprint and remaining stuck on a particular approach to company-buidling.  Instead, concentrate your energy on the growth and change required to make the adjustments to the new domain.  Stanford researcher Carol Dweck's book, Mindset, is a nice summary of the approach that successful people take when facing new challenges.  She observes that those that are able to achieve consistent success across fields have the following attributes:
  • A passion for learning
  • A passion for stretching themselves
  • Avoid dwelling on how great they are, but instead focus on getting better
  • Surround yourself with people that will challenge and push you

These are the lessons for personal reinvention and facing new challenges.  Over the course of six tough years in launching and building his company, Curt Schilling appears to have figured this out.  Will you?

What Makes The Boston Start-Up Scene Special?

There continues to be great interest around the world regarding how to build innovation clusters.  Inspired by a similar presentation that Fred Wilson did on the NYC start-up scene many years ago, I pulled this presentation together.  I just updated it for a group of Harvard Business School students and was struck by how much has changed and progressed in a positive way.  I would venture to guess every major US technical hub would say the same.  Like Boston, the NYC, SF, Silicon Valley, Boulder and Austin start-up scenes are all on stronger footing and more vibrant and diverse than ever as compared to a few years ago. This should give all of us great optimism for the future.

Enjoy:

Boston startup scene picture presentation 2-12

View more PowerPoint from Jeffrey Bussgang

 

Taking People With You - Book Review

"Leadership is the art of getting someone to do something you want done, because he wants to do it."

    - Dwight D. Eisenhower

I'm a business book junkie, so when my friends at Penguin (publishers of my book, Mastering the VC Game) told me I should meet with the author of Taking People With You, I jumped at the opportunity.  Author David Novak is Chairman and CEO of Yum! Brands (Taco Bell, KFC) and runs an organization of 1.4 million people, so I figured he'd know a little something about leadership.  Having Warren Buffet quoted on the front cover is a relatively positive signal as well.  The fact that Yum! is a member of the human capital leadership network of my portfolio company, i4cp, sealed the deal.

Two big surprises came out for me in reading the book and talking to David.  The first big surprise:  David is a very humble guy.  He talks alot about his personal failings, highs and lows, and even inserts his personal "timeline" chart.  He tells a great story of how horrible a speaker he was in the early days of his career, and how he was always trying to be something he wasn't.  Novak emphasizes this notion of authenticity throughout the book, pointing out (as many others have before him) that only by being brutally honest with yourself and being an authentic leader can you get others around you to follow.  He shares a terrific quote from GE Chairman and CEO Jeff Immelt:

"I'm always searching for a certain kind of humility in our most senior leaders, people who don't think they know it all...You're fighting arrogance and bureaucracy every day, and if you have people that act that way, then it's never good." 

The second big surprise for me was that, despite being a "big company guy", David was very savvy about entrepreneurship and the translation of his leadership lessons to entrepreneurs.  He has some very practical advice about culture-building and making sure that entrepreneurs keep everyone around them involved ("no involvement, no commitment").  And he uses evocative phrases to emphasize how to be a change agent ("Shock the System" is one of my favorites.

The book reminded me of a lesson I learned early in my career as a young vice president at Open Market.  One of the older executive team members took me aside one day and encouraged me to stop pushing my version of "the answers" onto my team  Instead, he advised, hang back more and focus on communicating the vision and high-level business objectives, and then coach the team to develop the answers.  True alignment is the key to ownership and accountability, Novak writes, and if the team around you doesn't embrace the problem with the same passion that you do, they will never really be committed.

And, believe me, entrepreneurship requires 100% commitment.

Many people complain that great entrepreneurs do not necessarily make great leaders.  I would encourage entrepreneurs to take a page from folks like David Novak to exercise their leadership muscles.  

Even big company folks have something to teach the rest of us.