I recently enjoyed hearing my friend Patrick Vlaskovits speak at Google about his new book The Lean Entrepreneur. He and his co-author Brant Cooper gave a nice overview of the new economic recovery and what that means for businesses and startups and spent some time focusing on what innovation inside large organizations could really look like if it functioned well.

The coolest new idea I took away was the "high-hurdle experiment" to surface your early adopters by making them self-qualify. This is what Google did with its If I Had Glass contest.  Below are the rest of my notes and takeaways.

For the last 2 months, my mind has been blown on a daily basis by the book Antifragile: Things That Gain From Disorder by Nassim Nicholas Taleb.

This is the longest and deepest I've gotten into a book since high school, and I found pretty much every chapter thought-provoking and lifestyle-questioning. I already felt like my mind had been blown, and that was just after finishing the prologue.

"Antifragile" is the word that Taleb coins for the concept of gaining from disorder (the real opposite of fragility, which is not the same thing as "robust"). The book covers the topics of philosophy, finance, math, statistics, lifestyle, food, fitness, education, and history, and it applies various strategies and concepts to finding ways to live more naturally and with more antifragility.

I can see how many people will be angered and offended by the direct manner in which Taleb denounces the professions of consultant, banker, economist, academic, business school professor, soccer mom, and tourist. I think books that question a lot of fundamentals are the only ones that bring actual progress to our lives as human thinkers, and this book does exactly that.

Overall, I took 47 pages of notes on the book (see below), and that sheer quantity is enough to show how much I liked it. It's not easy to distill these into a few bullet points, and I will be trying over the next couple months to come up with some concrete suggestions and techniques to put the book's ideas into practice in my own life. Here are just a handful of lessons and broad concepts that come immediately to mind:

• There are important nonlinearities in life that many professionals and advice-givers totally ignore but which make a much bigger difference over time than the first-order obvious effects.
• Many human interventions in health and government come with really bad iatrogenic effects.
• Things that are in nature are right until proven wrong; things that are human-made are wrong until proven right (which only time can show).
• Don't be a turkey, and avoid sucker problems. That's 95% of being successful.
• Via negativa: Focus on what to avoid and remove instead of what to do and add.
• Find ways to make your life antifragile in the sense of having limited, small downside and high potential upside.
• Be an adventurous flaneur. Live life to take advantage of new, unforeseen opportunities and volatility.
• Entrepreneurs are the unsung heroes of antifragility and deserve way more respect than politicians and other non-practitioners and non-risk takers.
• Innovation is antifragile.
• Use barbell methods to manage investments and black swan risks. Focus on your exposure (f(x)) instead of trying to predict some variable (x). Predicting or following averages is for suckers.
• Study the classics, eat and drink the classics, and avoid the media hype or technology for its own sake.

Below are the rest of my notes. I really want to discuss some of this stuff with other readers, so let me know what you think.

Back in college I took a marketing class that recommend The E-Myth Revisited by Michael Gerber as additional/optional reading material. I hadn't heard of it much besides that, but I kept it on my list for a while anyways. After seven years, I decided to finally give it a try.

I found the book interesting and quite different from the entrepreneurship texts that have been become "popular" recently. It takes a much more "back to basics" approach and actually talks about how owners can make their businesses more predictable and better operationally by picking up some lessons from McDonald's.

At first I was skeptical, but then I got the point. The "business development process" and the "business model franchise/prototype" approach actually seems like a good idea after reading the entire book about it. In a nutshell, it's about doing intense experimentation and optimization of every component of a business model in order to find what works and removes the owner and his or her whims from the picture as much as possible. I found a lot of parallels between this book and lots of what Steve Blank and Alex Osterwalder write about the business model canvas.

Most of the book's examples were about retail establishments selling products. I'm curious how the book's lessons apply to service businesses, especially ones where talent and thinking are most of the product. The author said businesses should try to set themselves up so that systems run the show and you can hire the lowest skilled people possible; I'm wondering how whether that's valid across all types of businesses.

I also found the book to be much more about life and figuring out what you want (and following your spirit and your own personal values) just as much as it is about business techniques (some of the scripts and hiring practices in the book were nice and tangible techniques that are directly applicable). I also liked how the author spoke (essentially) of gamification of the enterprise (that word wasn't around when he wrote this, but his observations are exactly its essence). I did find that at times the book was a bit too sales-y (in terms of promoting the author's consulting business), but it wasn't blatant.

I recommend this book to anyone who's been heavily into all the lean startup stuff and wants a different perspective on things, and I'm curious what others think as well.

Intro

• Idea 1: entrepreneur myth (companies started by entrepreneurs who risk capital); not true; many start business not for entrepreneurship
  
• Idea 2: turnkey revolution in america
  
• Idea 3: biz Dev process 
  
• Idea 4: biz Dev process can be applied step by step
  
• E-myth Worldwide
  

Part 1 e-myth and small business in America

Ch 1 entrepreneur myth

• Entrepreneur only exists for a moment then gone
  
• Most don't go into business for dream
  
• Most small biz not started by entrepreneur
  
• Most initially doing tech work for someone else
  
• Entrepreneurial seizure moment
  
• Fatal assumption: if u understand the tech work of a biz, u still don't know how to run such a biz
  
• Biz not just about the work u love to do
  
• Million other tasks u don't know
  

Ch 2 the entrepreneur, the manager, the technician

• 3 people in one
  
• Tension between entrepreneurs vision and managers pragmatism
  
• Technician wants to work and only one at a time
  

Ch 3 infancy: technician's phase

• Overloaded technician who does all
  
• Can't just do tech work
  
• Kill the biz if all u want is tech work
  

Ch 4 adolescence: getting some help

• joy of getting someone to do work u don't want
  
• Management by abdication instead of delegation
  
• Trusting employee blindly and not giving enough direction and supervision
  

Ch 5 beyond the comfort zone

• Adolescent biz pushes beyond owner's comfort zone
  
• Exceeds ability to control it
  
• 3 reactions
  
• Back to infancy where you do it yourself; u don't own a biz but a job u can't leave
  
• Going for broke
  
• Adolescent survival
  

Ch 6 maturity

• Build biz to work without u
  
• Focus on customer and business not work
  

Part 2 turnkey revolution

Ch 7

• Business format franchise after McDonald's
  
• Provides entire system of doing biz
  
• True product of biz is how it sells it
  
• Systems not people dependent business
  
• Work on biz not in it
  
• The business as a product
  
• Franchise prototype with interchangeable parts
  
• Integrity about doing what u say u will do
  
• McDonald's always delivers what it promises
  
• Model to emulate
  

Ch 8 franchise prototype

• Vast majority of business format franchises succeed
  
• Unlike trade name franchise
  
• HamburgerU training program on how to run system
  
• Discipline and standards
  

Ch 9 working on your business, not in it

• Your business is not your life
  
• Primary purpose of biz is to serve ur life, not vice versa
  
• Pretend ur biz will serve as prototype clone for 5000 others exactly
  
• Requirements
  
• Model must provide consistent value to customers and employees beyond what expect
  
• Operated by ppl of lowest possible skill necessary; systems dependent not people dependent
  
• Model is example of impeccable order
  
• All work documented in operations manuals
  
• Provide uniformly predictable service to customer
  
• Utilize uniform color, dress, and facilities code
  
• Impact of colors, fonts on sales
  
• Work on biz not in it as prototype for mass market biz
  
• E myth mastery program
  
• Think of biz as the product
  

Part 3 building a business that works

Ch 10 biz Dev process

• Building prototype of biz iterative
  
• 3 steps
  
• Innovation; Creativity thinks; innovation does; how biz interacts more important than what sells; blue suits outsell brown suits on salespeople; touch softly on arm when ask someone; establishes individuality of ur biz based on customer needs; always asking what is the best way of doing this
  
• Quantification; Numbers related to impact of innovations; Establish all baselines and controls of experiment; key metrics
  
• Orchestration; elimination of discretion/choice in implementing innovations; standardization once know results of experiments; order and logic behind human craving for reason; once know best suit to wear and best welcome greeting say it every single time
  


• Search for mastery by perfecting each step carefully
  
• Metaphor for going to work on your life
  

Ch 11 your bd program

• Imagine having to walk buyer of ur biz through each part to show that works perfectly without you
  
• 7 steps
  
• Your primary aim
  
• Strategic objective
  
• Org strategy
  
• Management strategy
  
• People strategy
  
• Marketing strategy
  
• Systems strategy
  

Ch 12 primary aim

• You (not biz) first order of agenda
  
• What value most
  
• What kind of life want to live
  
• What want to say about life after done
  
• Don't fear losing biz, fear losing life
  

Ch 13 ur strategic objective

• Business strategy and plan
  
• Set of standards that helps communicate
  
• Money: how big will be when done; can't know but need some standard; What standard will serve my primary aim; goal is to sell predictable business at end
  
• Opportunity worth pursuing standard; if reasonable to assume can meet aim; does business alleviate a frustration enough ppl have; people buy feelings and values; you sell the feeling not the commodity
  
• Who is my customer; demographic, psychographic
  
• When prototype completed
  
• Where in biz
  
• How in biz/retail
  
• What standards of clothing, etc
  

Ch 14 organizational strategy

• Org development shown in org chart
  
• Most organize around personalities and people instead of functions
  
• Without org chart all hinges on personalities and goodwill
  
• Need accountability for parts
  
• Share personal dreams and primary aim with partners
  
• See selves as shareholders from outside biz
  
• Inside biz see self as employee
  
• Create strategic objective for biz, do demographic research, create questionnaire, personal calls for needs analysis to 150 customers: what product mean to them, how have changed lives, if could have any product at all what would be like, what would good one feel like to use, what would it do for them
  
• Create financials pro forma for first year cash flow and income for bank
  
• Create operating plan
  
• Info on competition and consumer and pricing
  
• Create org chart based on strategic objective
  
• Create lots of boxes and then put names, even if overlap
  
• Description of all the work to be done, no matter who is in company 
  
• Write position contract for each position: results to achieve, work accountable for, objective standards, who will do it; contract creates accountability
  
• Name ppl to put in the boxes
  
• Pick one president/coo: only one can be in charge
  


• After organization designed, start working on the prototype
  
• Start from bottom of org chart whether started originally working in the business
  
• Must find others to do tactical work by prototyping each position as a mini business
  
• Use mini biz Dev process on each position: innovation, quantification, orchestration 
  
• While working in the position work on the position
  
• Test out clothing, call scripts, document what works best in manual
  
• Only when manual complete do u run ad for position
  
• But not for someone with that experience/master but for a novice/apprentice
  
• As soon as hires tactician at that moment promoted to managing the system
  
• Now strategic work instead of tactical
  

Ch 15 management strategy

• Not about finding competent managers
  
• Need management system
  
• System is the solution
  
• Every single part of operation in manual is a checklist
  
• Multiple checks of everything
  
• As much automation and timers as possible
  

Ch 16 your people strategy

• Cant get ppl to do what you want
  
• Must make environment where they want to shine
  
• Explain the idea behind the work that's more important than work itself
  
• How u do work reflection on how you are inside and how feel about self
  
• Business is extension of owner's values and must communicate idea behind those to new ppl
  
• Place you go to practice being best you can be
  
• Look for players in your dojo game where fight against themselves
  
• Explain this philosophy about work on first day
  
• Work about achieving self
  
• Very best business is well conceived game
  


• Rules of the game
  
• Never start with what want ppl to do and then make game out of it; start with game and values ideas
  
• Never create game for ppl unwilling to play self
  
• Make sure there are ways of winning the game without ending it
  
• Change the game from time to time: tactics, not strategy; strategy is game's ethic; results tell u when game over and needs to be changed
  
• Never expect game to be self sustaining; need to remind about it weekly; make exception to it daily to remind
  
• Game has to make sense and be verifiable
  
• Game needs to be fun from time to time; plan in fun as defined by ppl; once in 6 mo
  
• If u can't think of a good game, steal one but learn it by heart
  


• Logic of the game
  
• People missing values and standards and good game
  
• Provide organization and values ppl want
  



• Playing the game
  
• Boss communicated his ideas through documentation and orderly communication
  


• Hiring process key medium
  
• Hiring process
  
• Scripted presentation by boss to all candidates in group meeting explaining his idea and plan and game, business history implementing the idea, and attributes of successful candidate
  
• Meeting with each applicant individually to discuss reactions to and feelings about the idea, background, exp, why he feels capable implementing the boss's idea
  
• Notification of successful candidate by phone, scripted presentation
  
• Notification of unsuccessful thanking for interest, standard letter signed by interviewer
  
• First day of training for boss and employee including reviewing the boss's idea, summarize the systems that implement it, facility tour to show interdependence between systems and people, answering clearly and fully all employee questions, issuing uniform and operations manual, reviewing manual including strategic objective, org strategy, and position contract, completing the employment paperwork
  
• This is just first step requiring strategy and system
  


• How we do it here
  
• How we recruit, hire and train ppl to do it here
  
• How we manage it here
  
• How we change it here
  
• It is main biz idea
  
• Sum total of all systems Documented in manual and taught in school
  

Ch 17 your marketing strategy

• Irrational decision making customer
  
• Forget about you and focus on customer
  
• Customer absorbs all stimuli from environment
  
• Unconscious mind is where second step of buying process happens
  
• First is awareness
  
• Customer expectations unknown to him and u but matter
  
• Sale is made in first 3 min
  
• headline is all that matters in print ad
  
• Demographics and psychographics
  
• Construct prototype scientifically to appeal to perceived market reality
  
• IBM blue color of logo highly significant to results
  
• Navy dress suit most professional
  
• Find a perceived need and fill it
  
• Controlled experimentation
  
• Ask each and every customer for free goods questionnaire 
  
• who they are
  
• Where live: draw them on map, put line around them, that's your trading zone
  
• What car drive
  
• What perfume buy
  
• What read
  
• What colors shapes words they prefer
  
• Clothes jewelry food
  
• Match those brands to the colors and commercials and publications that sell them
  
• Become like the products they already like
  
• Buy a list of demographically correct ppl living in your zone
  

Ch 18 your systems strategy

• Hard systems physical
  
• Soft systems: selling system
  
• Scripts memorized
  
• Physical materials
  
• Delivery in identical fashion
  
• How u dress
  
• structure and substance
  
• Power point selling system
  
• Power point selling process is series of scripts
  
• Appt presentation just to make appt, get emotional commitment, hook
  
• Needs analysis presentation repeats appt presentation hook, establish credibility (company expertise positioning statement, personal willingness to do what can to help customer), ask if these things frustrate them, describe product system and why it works well/impact from customer perspective, not how it works, do questionnaire 
  
• Solution presentation: selling is opening, not closing; review custom prepared report; ask which of these options sounds best for you
  
• Use same words and steps every single time
  


• Information system
  
• Calls made
  
• Prospects reached
  
• Appts scheduled
  
• Appts confirmed
  
• Appts held
  
• Needs analyses presentations scheduled
  
• Needs analysis presentations confirmed
  
• Needs analysis presentations held
  
• Solutions presentations scheduled
  
• Confirmed
  
• Held
  
• Solutions sold
  
• Average value of sale
  


• This benchmark analysis tells u conversion rate and which steps most important to improve
  


• Things 
  
• Actions
  
• Ideas
  
• Hard soft and info systems
  
• All interdependent
  


• All words with any outsider of biz is a system
  
• Powerful when integrated carefully and planned and experimented
  

Ch 19 a letter

• search for meaning
  
• Meaning is product of caring
  
• Things we care about less significant than before
  
• Not serious ppl anymore
  
• Get In touch with your spirit that cares
  
• Stay out of comfort zone
  

Epilogue

• Chaos is only inside us
  
• Change our lives
  
• Learn about who we are in the dojo
  
• Learn attention and discipline
  
• Demands specifics not generalizations
  
• Business like dojo
  
• Intentionally and systematically
  

Afterward

• Step back from biz and see gap between where u are and need to be
  
• Gap always due to lack of systems
  

Jason Nazar was nice enough to run a free day-long workshop at UCLA Anderson on "How to Start a Business," and I checked it out. I find Jason to be a passionate, hard-working, and wise entrepreneur, and I wanted to see what I could learn from him.

Overall, I was astounded by the immense breadth and depth of resources he and his team at DocStoc have put together to help businesses. They basically have an e-book, video course, and "quick start guide" for every single topic/issue a business faces (pretty cool stuff).

Below are some of my notes and takeaways.

I. intro

II. Why start a business

a. Must have big burning why
i. If don’t have it, will use the “what” as excuses

b. Today is sharing what and how but won’t help if don’t know the why

c. He has huge sense of urgency for life
i. Sees big clock ticking down

III. Ideation
a. Fallacy of the “good idea”
i. No such thing as great idea; there are bad ideas and good businesses and good business owners/teams/execution
ii. Ideas don’t matter, execution does
iii. Don’t need a “good enough idea” to start
iv. Best ones start w/ something else someone else doing and do it better
v. Worst is when you want to start biz no one else is doing
1. We already know people’s problems and ways that work
vi. By sharing your ideas with others, you get feedback
1. You also make mental contract w/ others to commit to doing what you said you’re going to do, puts pressure on you to work on it
2. Secret reason of not sharing ideas w/ others: to not get ppl asking you what’s going on, want way to back out
vii. If someone shoots down your idea, it motivates you more
viii. Just take something you’re passionate and go with it

b. Idea checklist
i. to analyze if idea right one for you
ii. checklist
1. does it solve others’ problems
2. do a lot of ppl have it
3. am I passionate about the idea
4. am I willing to commit the next 5-10 years of my life to this idea
5. are others successfully doing something similar
6. does it have too many competitors
7. can I do something substantially different or better than others
8. can I build the business on my capital resources or what can raise
9. could I have an MVP and customers in 90 days or less
10. are potential customers giving overall positive feedback > 75% of time
11. do I have background/skillset compatible w/ biz
12. do I have acopmetitive advantage on how to get customers
13. if I don’t start this will someone else
14. can I court mentors who have been successful doing something similar
15. does it have a high likelihood of success
16. does the risk/reward match my person r/r
17. does it help me fulfill my purpose

iii. when evaluating many ideas, score each on how many points it has from this list

c. lifestyle vs. liquidity biz
i. lifestyle biz: live off profits now
1. $1M rev, $400K profit, sole owner
ii. liquidity biz: don’t take out money, go for exit
1. focus on growth, not profit

IV. protecting your idea
a. copyright
i. for work of authorship
ii. written work
iii. automatic

b. trademark
i. for logo/mark/short phrase
ii. do a search when naming your business
1. trademarkia
iii. process for filing is easy
iv. he’s a big fan of legalzoom for basic stuff like incorporation
v. value of attorney is analysis is whether something is infringing or not

c. patent
i. unless something highly specialized and technical, won’t make biz successful
1. if u genuinely invent a new process, then do it
2. if anything online, do not worry about getting a patent
a. likely unpatentable and won’t make diff
ii. first objective is getting customers

d. trade secret
e. NDAs
i. Most investors won’t sign
ii. Use for mergers/partners/complex deals
iii. Has entire course online about how to use them

V. Business plans
a. 3 things will make you successful as small biz
i. good product
ii. figuring out how to get customers
1. #1 biggest challenge
iii. making sure you have enough capital for biz

b. uses of bplan
i. raise money
ii. get partners
iii. get others interested in idea

c. crappy ppt can be enough for a bplan for these purposes

d. 10 key questions to address
i. what is prod/service in 30 seconds, explainable to a 5th grader
ii. what is unique value prop
1. what makes better/diff
iii. what is market opp

e. best format
i. powerpoint, not 40 page doc
iii. create ppt w/ about 15 slides, each one addresses one of the main questions
iv. for product, show multiple examples on slides
v. no more than 15-30 words per slide
vi. investors like picture books, not docs
vii. his is great example of visual deck w/ key info

f. financials
ii. what are core metrics
1. how long to reach profitability
a. restaurants want to achieve profitability w/in 1st year
iii. must be able to explain basic assumptions behind model
1. price per unit
2. how many orders
iv. also: use of funds

VI. setting up the business
a. right structure
i. LLC simplest, most popular, $800 to set up
1. Best for service biz
ii. C corp allows more complex ownership/management
1. Only if raising a bunch of money

b. filing and checking
i. LLC: articles of org, operating agmt
ii. EIN

c. licenses and insurance
i. Licenses123 free

VII. Corporate identity
a. Name, logo
i. Do trademark search
ii. Domain name, all social media
iii. Logo: 99designs
iv. Name something meaningful/important for you

b. Physical collateral
i. vistaprint

c. Phone
i. Google voice
ii. Ringcentral
iii. Onebox

d. Website
i. If your website is not your product use weebly, wix, site creator, intuit, wordpress
1. Istockphoto
2. Online commerce: shopify, volusion, magento, google checkout, paypal
ii. Mailchimp, constant contact, sendgrid
iii. Managing social media business presence course they have

VIII. Business operations
a. Location
i. Retail
1. Lock in a great long term space

ii. Office
1. Space not core to business
2. Don’t get locked in to long contract
a. 1 yr leases
3. Try to get option to extend
b. Professional vendors
i. Overcommunicate expectations of deliverable and prices
ii. Be clear of what u expect
iii. Put a cap on hours attorney can work

c. Tools/services
i. Paychex? Payroll, Trinet
ii. SohoOS for customers
iii. Have course on google analytics
iv. Basecamp

IX. Service-based businesses
a. You are your products
i. He did consulting before and developed philosophy of service
ii. Quality fantastic
iii. Understand underlying needs
iv. Agree on, overcommunicate
1. Final product deliverable definition
2. Timeline of delivery
3. Cost
v. Overdeliver on value

vi. Have a great consulting agreement in writing
1. On docstoc
b. Go right to getting customers
i. First bplan he ever wrote was for a paying client (bplan consulting service)
1. Just jumped into it, got 3 clients in 2 days, figured out all else afterwards

c. Scale expenses along w/ demand
i. Grow rev monthly, divert more and more portion of that onto business expenses
ii. As get more demand, charge more
iii. Scale by adding ppl

iv. The more money you charge, the more credibility you have
1. He got certified in hypnotherapy after college but never focused on it; what hypnotists charge affects how popular they are
2. Charge whatever amount you feel good about

X. Building and selling physical products
i. Slideware: PPT deck w/ visual representation of product to get first set of sales
b. Pre-sales contracts to fund initial inventory
i. Get positive terms on when paid
ii. Half up front to pay for initial orders
c. Where to sell products online
d. Selling IRL; Getting partnerships

XI. Building and selling online products
a. 3 golden rules
i. spend 10-50K to get it built
1. enough to get to first version to play with
2. spend this of your own money
ii. spend no more than 3-6 months to get it built
1. narrow feature scope
iii. 1st version needs to have something to be charging for immediately or can start scaling users very fast immediately

b. how to build online product
i. requirements doc
1. long outline detailing all features
ii. wireframes
iii. get a design done
1. 99designs
iv. developers/dev shop
v. hosting
c. getting feedback & users
i. see how ppl use your product
ii. his presentation: 7 ways to drive traffic for free
iii. usertesting.com

XII. raising money

a. 5 P’s
i. people
ii. product
iii. progress
1. momentum
iv. passion
1. we buy things on emotion and justify the logic
2. your passion is a commodity you can trade to get other things done in your business
v. persistence
1. in pushing for meetings

b. sources of capital
i. self
ii. friends & family
1. don’t raise money from ppl who if they lost it, they would give more than a second thought to it
iii. bank loans
1. need long history of relationship and profitable biz or collateral/personal or biz assets
2. start small line of credit and show that repaying over a long time
iv. angel investors
v. venture capitalists
c. how to do it
i. tell them what will do and timeline
ii. reach back out in advance of timeline and show that beat timeline and expectation
iii. show pattern of doing and exceeding what will do and when
iv. get multiple investors to show interest to get leverage
v. find businesses similar to yours that got investment, find out who invested, make contacts with those investors
d. mastering the pitch

XIV. getting customers
a. #1 reason why businesses fail
b. no classroom will teach; it’s experiential
c. if you’re committed, you can do it
d. if not motivated to start biz in next 3 hours, there’s nothing he can do
e. you can’t outsource sales & marketing
f. this has to be your #1 priority
g. the businesses that succeed are those that are the best marketed, not the ones with the best product
h. if you have demand for your service, you can always get capital for it
i. exercise
i. write down the #1 thing that if you got done today/this week/this month would be the most important for the biz
ii. track how much time spent
1. usually not much because it’s the hardest thing
j. in 1st 6 months, spend 50%+ of time getting customers

XV. sales
a. 5 step sales process
i. gain interest
1. talk to them about them
2. give compliment
3. show you listened
4. never start talking about self; start talking about other person
5. 3 topics they care about: health, wealth, relationships

ii. establish credibility
1. past accomplishments
2. willingness to want to help
3. genuineness, transparency
4. ability to speak clearly and give metaphors others can apply to their lives
5. nothing more compelling in biz than one’s own certainty
a. currency like money that can be used in exchange for value/getting people to do things

iii. establish need
1. first actually understand the person and get them to know you understand
2. prospect must feel like you know what they need

iv. offer solution
1. my product is what fulfills the need you’re looking for
2. when they say “what do we do from here”/”next steps”/etc., you finish immediately w/ transaction

v. system to establish easy transaction

b. prospecting
i. 1 out of 10 who have an interest in your service, will actually buy when offered and qualified
1. need wide enough funnel
ii. way to talk to lots of ppl
iii. no’s get you 1 step closer to yes
iv. if you don’t believe in your product/service, really hard to exchange value

c. methods & types of sales
i. inside
ii. outside
d. sales is exchange of value; marketing is getting someone interested in exchange of value and driving ppl to u; PR is building awareness of product
i. key is exchange of value
e. reason we’re so adverse to getting sold is because ppl are always trying to give us something we don’t want instead of learning what we do want/need
f. when someone figures out what you want/need, much more impactful

XVI. Marketing & PR
a. Online marketing
i. "7 ways to get traffic online"
1. search engines
a. SEO
2. Referring traffic/press
a. Top blogs w/ contacts in his PPT
3. Social media
a. Infographics
4. Viral loop
a. Gamification
5. Solve a compelling need
6. Online partnerships / distribution deals
7. Refreshing content
b. Local guerilla marketing
c. Leveraging PR

XVII. Building a team
a. The bar for partners, employees, investors
i. 3 criteria
1. they are the best at what they do
2. no asshole policy
a. 1 bad person will kill the biz
b. must go extra mile to help someone else
3. work harder than everyone else
a. 12 hour day
b. in office until 11
c. work on weekends
ii. AGPIE values: accountability, growth, passion, integrity, excellence

b. Recruiting
i. Interviewing
1. What is the ideal position you’re looking for?
a. If not what you have, it’s a red flag
2. What do they do better than anyone else?
3. If I talk to 10 people you worked with before and what things about you bothered them, what would they say?
ii. If anything comes off as pompous/arrogant, one strike rule (done)
iii. Time to improve an employee is detrimental

c. Issues w/ partners, early employees and equity
i. Must have process in place for how to make decisions when you disagree
ii. Must discuss up front
iii. Prepare lots of if-then situations
1. If someone wants to leave, etc.
2. Gets pregnant
3. Not enough money earning
iv. Vesting
v. Paying equity for work
1. If typical rate is 10K, and my valuation is 1M, you can give 1%
a. But give 2% by valuing the risk higher
2. Board of advisor on 3 year vesting schedule
3. When getting service or value over time, don’t give equity all up front
d. Hiring/firing docs on docstoc
i. Job descriptions
ii. Job application
iii. Consent form for background check, criminal check
iv. Non-binding offer letter
v. Employment agreement w/ IP transfer
vi. Release of claims for termination, offering consideration
vii. Should have documented feedback over time
viii. Last day: vacation time, final day, etc.
e. Employees vs. contractors

XVIII. Financial planning/accounting

XIX. Business dashboard
a. KPIs
b. Key metrics
c. Benchmarking success

XX. Primary legal considerations
a. Working w/ biz attorneys
i. Get referral to someone who has dealt many times w/ ur situation
ii. Personality get along
iii. High level of competency in  your situation
b. Preventing and managing lawsuits
c. Enforcing your rights

XXI. Mentors, advisors, and boards
a. What you don’t know, you don’t know
b. Courting advisors
i. Find ppl you like, ask them to coffee, say what want to learn
c. Working with a board of directors

XXII. Buying and selling businesses
a. Finding businesses to buy
i. Franchisegator
ii. Bizbuy
b. Valuing
i. Multiple of net income

XXIII. Strategy
a. How to make right decisions
i. Docstoc matrix
1. “How to make decisions: 4 factors”
2. A: potential upside
3. B: likelihood of success
4. C: effort involved
5. D: strategic value
ii. Entire book/presentation on this on docstoc
b. Stay in the game: protect your downside risk

XXIV. Philosophies
a. Entrepreneurs’ dilemma
i. Stay attached to problem you’re trying to solve but flexible in solution you use
1. Be passionate about the problem
2. Don’t let ppl dissuade you from that
b. Entrepreneurs sell ether
c. Mistakes people make before starting a business
d. The one most important thing

I'm excited about having graduated on Friday from UCLA Anderson. Our commencement speech was entertaining and inspirational, and I wanted to share the top 10 list that Guy Kawasaki shared with us.

Guy shares alma maters with me (Stanford followed by UCLA Anderson), so I identified with him immediately. He was the chief evangelist at Apple and author of ten books (two of which I've read and really enjoyed: Enchantment and The Art of the Start).

You can watch his speech in the video above, and my notes are below.

Guy's Top 10 Practical Tips for Succeeding

1. Aspire to jump to the next curve.
Instead of working on a better sameness

2. Don't worry, be crappy.
When you're on the next curve, it's time to ship.
Ship and then test.

3. Never ask people to do something you wouldn't do.
Whether it's asking customers or employees
Importance of ethics

4. Obey the absolutes.
There's a hard line between right and wrong.

5. Default to yes.
Positive attitude
Always thinking "how can I help others?"

6. Drop everything when your boss asks you to do something.
Make your boss or wife look good.

7. Become a baker not an eater.
For baker's, life's not a zero sum game.

8. Hire people better than you.
A people hire A people. B people hire C people (and so on).
Hire people better than you to prevent a "bozo explosion."
(See my notes on the book Who.)

9. Change your mind.
It's a sign of intelligence.
Steve Jobs changed his mind all the time (and convinced you he was right before and after).

10. 10/20/30 rule of PowerPoint
Optimal slides: 10
Optimal time: 20 minutes
Optimal font size: 30
Figure out oldest person in room and divide age by 2 and that is the font size.

11. Suck it up
Need to pay dues.
Do the dirty job.

12. Have children.
True success is happiness in life.
Children are his greatest joy in life.
Nothing came close in his life in joy.

One thing I've been thinking about is the various approaches to philanthropy. I wanted to briefly mention the two spheres they fall in and ask what you think.

The most common behavior I keep reading about is something like "deferred philanthropy." It's where an individual is hard-working, profit-seeking, and makes a lot of money in his first sixty years only to later give most of it away to charity. I've heard so many stories of investment bankers who later serve on many charitable foundation boards, give away a ton of money to charity, and even set up their own non-profits or foundations. There's also obviously stories like Buffett's and Gates's (both were first mostly wealth-seeking and later philanthropic).

There's a trend now for younger entrepreneurs (especially those who have accumulated wealth) to commit early on to give most of it away, and I think that falls in the same realm. There are tax incentives to give money to charity, and setting up foundations, allowing people to keep wealth (sort of) in the family (without paying estate taxes); family will be controlling that wealth and can have it pay for various expenses as long as it's generally philanthropically-oriented overall. I see it as a question like, "Do you want to give your money when you die to the government to recirculate in society or to a charitable cause of your own choosing?" Given some individuals' mistrust of the government and annoyance with its corruption and inefficiency, giving to charities (which are also imperfect but maybe less so) seems better.

I've been wondering two things about this trend, and I'm curious what others think. First, if you work so hard to achieve a big goal and grow a big, valuable company and in the end just give most of your money away, what does that say about your incentives and inner goals and desires? Is it just to benefit from the money in the meantime? Is it to feel rewarded on the inside from having achieved and built something great (and the money doesn't really matter)? Or are people actively negotiating and working hard to pull in the maximum wealth possible all in the name of the society to which they'll give their money back (seems unlikely to me)?

Second, it's interesting what this means about the flow of money. Consumers pay money to these big growing companies for their goods and services, then these companies are sold and the founders donate a bunch of wealth (that came from consumers) to charity. So it's like everyday consumers are effectively raising money for charity en masse through companies. This seems like a good thing, but not something that's explicit.

The second model of philanthropy is more like "simultaneous philanthropy" where you're actively "making a difference" philanthropically earlier in life and as you move through your career. This can be in the form of social entrepreneurship (companies that are non-profit or for-profit but which give back at the same time as earning money) as well as simply doing community service, volunteering, CSR, and just giving money to charity now, before you've become very wealthy. There's also the idea of "catalytic philanthropy," or approaching philanthropy from an entrepreneurial standpoint and using business skills to be more effective at change.

This second model seems like a better, more honest model to me, in the same way that "living life now as you eventually want to" seems like a better philosophy than the "deferred life plan" (see also 4-Hour Workweek).

What do you think? Is it right/logical/good to be building up companies and deferring certain things just to give it all away in the end? Is society raising money for charities through for-profit companies that eventually give it away? How "efficient" and non-corrupt are most charities anyways? And is a model of simultaneous philanthropy preferable? I don't have a lot of data or answers and am curious what others think.

When I was a senior at Stanford, I remember going to an inspirational talk by an entrepreneurship professor named Tina Seelig, and the talk was titled What I Wish I Knew When I Was 20. When I was recently strolling through a bookstore in Hong Kong (!), I randomly caught sight of a book by the same name, and it turned out to be a written version of the talk I had heard. Given that it's been 6 or 7 years since I heard the oral version, I figured it wouldn't hurt to have a written refresher, and the book certainly didn't disappoint.

The book is a quick, entertaining account of the lessons Tina learned throughout her life and from her interactions with the many students she has taught and coached. Most recently, she has been teaching a class together with the d.school (Stanford Design School), and I really liked reading the descriptions of the in-class exercises she runs (I wish I could participate in some of those now!). Though some of the advice in the book seems "obvious," hearing it told through real students' stories makes it much more "sticky," vivid, and fun.

Below are my notes on the book. Definitely a fun and inspirational quick read!

Ch. 1: Buy one, get 2 free

• 2 hours to make money class assignment, present slide in class
  
• Turning paper clip into a house
  
• Opportunities everywhere around us (every problem is an opportunity)
  
• We already have most of the resources we need, can be creative with limited resources
  
• Often we frame problems too tightly
  

Ch. 2: The upside down circus

• Circus industry in trouble
  
• Identify all assumptions and imagine exact opposite of each one
  
• Then take what you want from new and old
  
• Created Cirque du Soleil
  

Ch. 3: Bikini or die

• Tackle big problems and free yourself from expectations
  
• Take on impossible tasks
  
• Come up with the worst possible ideas to solve a problem and then look at them in new light
  
• Break rules
  
• Brainstorm
  
• Yes And
  

Ch. 4: Please take out your wallets

• Don't wait for others to give permission or say you can do something
  
• Seize opportunity yourself
  
• Look at projects others have abandoned
  
• Paying attention
  
• Wallet exercise
  
• Find holes around you
  

Ch. 5: Secret sauce of Silicon Valley

• Write a failure resume, listing failures and learnings
  
• When realizing a job is not a match, quit early (same with start-up concept)
  

Ch. 6: Engineering is for girls

• People often over guided by others' words and recommendations for career
  
• Need to just spend time experimenting yourself
  
• Intersection of skills, passion, and market
  

Ch. 7: Turn lemonade into helicopters

• Harder you work, luckier you get
  
• Act like foreign traveler and be aware of surroundings
  
• Lucky people more observant, open minded, friendly, optimistic
  
• Every time somewhere new, meet new friend and have opportunity to make a million dollars
  
• Recombine ideas in unusual ways
  

Ch. 8: Paint the target around the arrow

• Send thank you notes
  
• Negotiations everywhere
  
• Look for surprises and shared interests
  
• Doing the smart thing vs. the right thing
  
• Offer to be helpful to others
  
• Rule of 3 priorities to not take on too much
  
• Apologize with simple sorry
  

Ch. 9: Will this be on the exam

• Never miss an opportunity to be fabulous
  
• Do instead of try
  
• Excuses are cop out
  
• Productive better than competitive; coopetition
  

Ch. 10: Experimental artifacts

• Give permission to challenge assumptions, forge own path

I'm a big fan on Brad Feld's balanced and brutally honest blog, and when I heard that he had published a book of startup advice based on the TechStars experience, I knew I would enjoy it. I just didn't know that I would enjoy it this much. 

It's called Do More Faster: TechStars Lessons to Accelerate Your Startup (by David Cohen and Brad Feld), and it now ranks among the top 5 startup books I've read so far. I'm recommending it to everyone along with The Lean Startup and The Startup Owners' Manual.

Below are my main notes and takeaways. I didn't capture every point in the book if I had seen it a lot before, but if you're looking for a great comprehensive overview of many important modern startup issues, this is the book for you. What I particularly liked was reading stories by well-known entrepreneurs from around the world and hearing about how they approached problems in their businesses (and I liked the commentaries by David and Brad as well). It was also neat to hear about how TechStars works and how the combination of mentorship and operational focus helps the companies have a better chance of success.


Foreword

• By Zynga founder Mark Pincus
  

Preface

• Entrepreneurship is very hard
  
• TechStars: no fly-by mentorship, community

Theme 1: Idea and vision

• Not about the idea
  
• About testing and pivoting
  
• Look for the pain
  
• Much more about execution
  
• Usage is like oxygen for ideas
  
• Don't wait to ship
  
• If not embarrassed then shipped too late
  
• Real artists ship
  
• Focus on smallest problem you can solve better than anyone in world
  
• You are stupid; listen to your users
  
• Don't have to have any original ideas, just listen to users

Theme 2: People

• Don't go it alone
  
• Avoid cofounder conflict
  
• Discuss tough topics up front
  
• List of good questions to discuss listed in book
  
• Hire those better than you
  
• Fire fast
  
• 90 day performance review
  
• If you can't quit no matter how hard you try, it means you are on the right track; if you can quit, you should
  
• Startups seek friends, not sales
  
• Close loops with mentor feedback
  

Great Culture

• No politics
  
• It's not a job, it's a mission
  
• Intolerance for mediocrity
  
• Watching pennies, make every dollar count
  
• Equity-driven
  
• Perfect alignment
  
• Good communication even in bad times
  
• Strong leadership by example, take care of own morale
  
• Mutual respect, celebrate wins from each other
  
• Customer-obsessed
  
• High energy level
  
• Fun
  
• Integrity

Be open to randomness

• Random Days: 15 min mtgs with anyone
  

Theme 3: Execution

• Concise emails
  
• Quick and dirty videos
  
• Startups have nothing to lose
  
• Can move quickly and not worry about brand
• Assume that you're wrong
• Make decisions quickly
• Advice is just data, you decide
• Use your head then follow your gu
• Must measure to manage; doubt all data and see everything as anecdotal
• Progress = validated learning

Don't suck at email

• Volume not excuse
  
• GTD
  
• Inbox to zero
  
• Address as branding
  
• Respond within 2 days
  
• Be concise
  

7 email rules

• Use the subject line
  
• 3 sentence rule
  
• Spell check
  
• Reply to important emails right away instead of thinking about it (and can set reminder)
  
• Use unread status to mark for later
  
• Be conscious of how much you suck
  
• Be persistent
  

Use what's free

• All free
  
• Open source
  
• Outsource all that doesn't matter
  
• Wordpress
  
• Google Apps
  
• Skype
  
• YouTube
  
• Balsamiq
  
• Dimdim
  
• Dropbox
  
• Evernote
  
• Gist
  
• Github
  
• Jing
  
• Mongo test
  
• PivotalTracker
  
• SendGrid
  
• Snapabug
  
• Twilio
  
• Vanilla

Celebrate what matters

• Only actual progress towards scalable business
  

Don't hide your failures

• Learn from them and wear as badge of honor
  

Quality over quantity

• Focus on ease of use and graphical look
  
• Build one thing well
  
• Listen to some not all users

Have a bias towards action

• Book: My Startup Life
  
• Requires self discipline
  
• Use external accountability
  
• Blame no one, expert nothing, do something
• Do or do not, there is no try

Theme 4: Product

• Don't wait until proud of product
  

Find your white space

• Like blue ocean
  
• Understand and talk to competitors
  

Focus on what matters

• Don't switch plan unless got data that not working
  
• Just 2-3 things should be doing

Obsess over metrics

• Engineering not most important
  
• Culture of feedback
  
• Acquisition
  
• Activation
  
• Retention
  
• Referral
  
• Revenue
• Avoid distractions
• Throw things away and pivot

Theme 5: Fundraising

• You don't have to raise money
  
• Angel groups often have fake angels
  
• Ask how long angel investing, how many investments, how large each time
  
• Ask for intros to last 2 investments this past year or last 3 total
  
• Call and ask for founder and confirm that invested and how helped
  
• Open Angel Forum
  

Seed investors care about 3 things

• People: most important 
  
• Products: use product, traction
  
• Markets: needs to feel huge; 10-15M in 3-5 yrs and 50-100M in 5-7 yrs without 100% adoption
• If want money ask for advice
• Focus on first 1/3 of round and fill it in with lead investors
  

Show don't tell

• Brad likes videos and URLs emailed to him of real demos
  

Theme 6: Legal and structure

• Form the company early
  
• Prefer Delaware S corp
  
• Easier to convert to C corp
  
• Interview lawyer for cost and vast experience with startups
  
• Vesting
  
• Always choose qualified lawyer in this space over family or friend
  
• Always file 83b election

Theme 7: Work-life balance

• Spend time away completely unavailable, no connectivity, 1 wk vacation per quarter ("QX vacation")
  
• Life dinner monthly: 1st day of month and give nominal or romantic gift, discussing past and upcoming month
  
• Segment space: separate work and living space at home
  
• Be present and be a person
  
• Meditate your own way: marathon, reading, etc.
• Practice your passion
• Lunch bike rides and hike meetings
• Exercise 5-6 days a week
• Eat fresh food with simple ingredients
• Sleep

It's been a month since my March travels, and I've been super busy since I got home. I wanted to take a few minutes and wrap up my notes and thoughts about New Orleans start-up culture and the NOLABound experience.

Below are the rest of my notes for Days 3-4 of the trip as well as my larger takeaways at the bottom. Sorry for the length of the post! "I wish I had the time to write a shorter letter."

Launchpad accelerator visit

• Met Chris Schultz
  
• Launchpad coworking space and accelerator 3 yrs old
  
• Chris
• After Katrina wanted to create tech hub and one physical space
• Developer bought building and made it into hub
  
• Always welcome to drop in, no day rate
• Demo Day during Jazz Fest
• Now have several more such hubs in New Orleans
• Grassroots effort
• No government support
• Community came together
• Overnight success takes 5-10 years
• Moving to a place with a lot of interesting jobs
• Density of startups and cool ecosystem
• Low cost of living
• Accessible airport
  
• Ppl get started here who are based elsewhere
  
• Easy to get in and out
  
• Launchpad is coworking space
• Launchpad Ignition is accelerator program
• The more bankruptcies the better, means more ppl are trying
• Speed dating/hiring events
• 13 startups created 502 jobs
• Community running Rails class
• GE will put in $10M into higher ed for tech
• Several ppl from SF moved here for quality of life
• Lots to do, nice ppl, can own great home cheap
• Walkable city, all major events free
• Cutting edge of wave of development and excitement
• Issue is not starting businesses but about scaling, exiting 
  

Big Idea event

• B-plan competition
• Entrepreneurship is about networks
  
• Companies that won had the biggest networks
  

NOLABound camera crew notes (nice guys!)

• All cams on 5dmkii
  
• L zoom lens 24-70 f2.8
  
• Boom mics