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I met a very successful enterprise software entrepreneur/investor Bruce Cleveland in a very random way. Bruce was a part of the founding teams at Siebel and Oracle. It is really amazing how/where/when you meet such interesting people. As I was going through Bruce’s blog I found many intriguing posts. This one stood out because it defines an alternate investment structure particularly suitable for enterprise software companies. This could be a new structure that brave VCs who are looking for innovation in the VC model could experiment with.

Bruce defines this Spin In structure as a new startup where a large software company seeds the venture with the management team, IP, distribution and sometimes cash. This is done in partnership with other financial investors.

I could see how this would be very useful in some situations if all the incentives are aligned properly. It would also make a lot of sense to try it in a partnership situation too. For companies with a platform strategy it could make sense to seed the potential platform applications start-up partners funded using this approach. Think iFund and fbFund kind of situations in the enterprise software world.

Bruce’s blog post also reminded me of an author/entrepreneur I recently met – Jon Fisher. He advocates building companies (most relevant for enterprise software) with the end goal (a large software company as the exit) in mind. Bruce’s approach provides a good structure to what he calls strategic entrepreneurism.

Hope to see how this structure would play out in the real life. This could take at least 8-10 years before we see some start-ups exiting using this approach.

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Nipun wrote about what makes TED talks tick. What is it about these talks that makes all of them resonate so deeply? What makes them so consistently good?

tedcommandments

  1. Thou shalt not simply trot out thy usual shtick
  2. Thou shalt dream a great dream, or show forth a wondrous new thing, or share something thou hast never shared before
  3. Thou shalt reveal thy curiosity and thy passion
  4. Thou shalt tell a story
  5. Thou shalt freely comment on the utterances of other speakers for the sake of blessed connection and exquisite controversy
  6. Thou shalt not flaunt thine Ego. Be thou vulnerable. Speak of thy failure as well as thy success.
  7. Thou shalt not sell from the stage: neither thy company, thy goods, thy writings, nor thy desparate need for funding; lest thou be cast aside into outer darkness.
  8. Thou shalt remember all the while: laughter is good.
  9. Thou shalt not read thy speech.
  10. Thou shalt not steal the time of them that follow thee.

Meaningful Games

chrisChris Swain talks about how games would impact our lives in the future. I agree with him. I believe we are just scratching the surface of what games could do with the process of learning and many other social change issues.

He asks the right questions – Can we create games that help people learn even more effectively? Can those games teach us more than the limited things we learn from today’s commercial entertainment games? I think the answer is Yes and Yes.

Chris says –

Games are powerful learning devices that provide instant feedback and sophisticated reward structures. Games let us learn by doing, which is one of the most powerful ways of learning, according to the research. People especially kids are learning machines by nature. We have instincts built into our operating systems to learn about the world through play. Learning is pleasurable to us and games are some of the most engaging learning devices.

His lab just released a game called ReDISTRICTING game.

ReDISTRICTING – The purpose of the game is to educate people about the problems associated with congressional redistricting and empower them to take civic action.

They are taking this concept further and applying to the broader set of issues.

The point here is that we explored an important and hard to explain social issue with a game. People get deeply engaged in it because they experience for themselves. We hope that the game can help drive public discourse about the issue and help affect positive change.

[…] I see the game as a model for how to explore other tricky social issues. Right now I am working on funding a game about campaign finance reform.

[…] People have been skeptical of games in academia for so long that I just assume everyone will doubt me. That is recently changing though. For instance, it was very rewarding when we went to Washington this summer with The Redistricting Game and were welcomed with enthusiasm in the House of Representatives, think tanks, advocacy group offices, and by all kinds of reporters.

[…] Games are interesting because they fit together with all kinds of other research. Imagine: games plus politics, immunology, economics, leadership studies, management, intelligence analysis, art.

His tips for aspiring innovators –

1) Embrace iterative design. Short cycles of prototyping and iteration are more powerful than long cycles.

2) Embrace your user. In the game lab we employ a technique called playcentric design which means the player is at the heart of the process and we continuously test on our target player. Replace the word “player” with “user” and you have a core concept for innovation in fields beyond game design.

3) Understand that the way you present an idea is as important as the idea itself.

4) If you get stuck on a design problem give it a little space and go relax. Your brain will churn on the problem in the background and bring an answer back to you when you least expect it. That’s why you get great ideas in the shower and while driving. If you know this about your brain your life – as someone under pressure to innovate – will be more enjoyable.

I asked this question to my network –

How to bring simplicity in to the design of products – take complexity out and not the capabilities?

Here are a couple of interesting answers I got –

David Marshall wrote back –

It should all be driven by a proper elicitation process to define system requirements. This should result in an immediate protoyping session with the users without ever telling them what is technically possible. Find out what they need to be able to do their work effectively. Then build that and only that. Too often, designers build what they want to work on and with. The latest technological gizmos are cool. It is boring to keep reusing the tried and tested code. Except that users want only what makes their work easy. Anything that slows down the system’s performance or clutters up the GUI with redundant options is annoying and demotivating. It is hard enough to manage the transition to a new system. Giving the users the chance to take ownership of the design gives managers the best chance of a smooth transition. Thus, taking the designers out of the design is the best way to achieve simplicity.

Shantanu Sengupta says –

1st step – Forget you’re designing!!! Think you’re solving a problem!
2nd step – Once a solution is found, don’t stop… look for more solutions – at least 5 more!
3rd step – Apply logic and reason to see if these solutions are different and addresses the problem fully
4th step – If yes, see if they’re simple enough for applying in reality

steve-blank4 One of my greatest teachers ever, Steve Blank, started writing his blog recently. He is the master of understanding the intricacies of the startups. He has a knack of telling these complex ideas in a very simple and fun language. His core idea is that there are patterns in successful startups. He calls his core model “customer development”. After going through a few cycles of startups myself I could tell you how right he is. Everytime I get in to a situation where I have a choice to go the “traditional product development cycle” or follow the “customer development approach” – I take a deap breath, remember Steve and choose the second path.

Chris Anderson calls Steve “a dude with serious street cred“.

Steve writes on his Blog –

I call this process “Customer Development,” a sibling to “Product Development,” and each and every startup that succeeds recapitulates it, knowingly or not.

The “Customer Development” model is a paradox because it is followed by successful startups, yet articulated by no one.  Its basic propositions are the antithesis of common wisdom yet they are followed by those who succeed.

It is the path that is hidden in plain sight.

Steve: Thanks for continuing our customer development class conversations on Twitter and blog now 🙂 Looking forward to hearing more of your thoughts. So far I used to refer my entrepreneur friends to your book, now I have two more places to send them to – your tweets and your blog.

mark_zuckerberg_ceo_facebookI loved this short story about Mark Zuckerberg and how to “start” communities. [Taken from “What would Google do?”]

The scene was the annual meeting of the World Economic Forum International Media Council in Davos, Switzerland, as the head of a powerful news organization begged young Mark Zuckerberg, founder of Facebook, for his secret. Please, the publisher beseeched him, how can my publication start a community like yours? We should own a community, shouldn’t we? Tell us how.

Zuckerberg, 22 at the time, is a geek of few words. Some assume his laconicism is a sign of arrogance – that and his habit of wearing sandals at big business conferences. But it’s not. He’s shy. He’s direct. He’s a geek, and this is how geeks are. Better get used to it. When the geeks take over the world-and they will-a few blunt words and then a silent stare will become a societal norm. But Zuckerberg is brilliant and accomplished, and so his few words are worth waiting for.

After this publishing titan pleaded for advice about how to build his own community, Zuckerberg’s reply was, in full: “You can’t.”

Full stop. Hard stare.

He later offered more advice. He told the assembled media moguls that they were asking the wrong question. You don’t start communities, he said. Communities already exist. They’re already doing what they want to do. The question you should ask is how you can help them do that better.

His prescription: Bring them “elegant organization.”

What is an elegant organization? I would tell my perspective in a post later.

Dale Peskin at #wemedia conference.

Wall-street asked for a new story. Here could be a new balance sheet that could provide them this new story to tell the investors.

Appreciating assets
– Knowledge creation
– Connections, Creativity

Everyone equity
– Me, Us, Everyone

Upside liabilities
– Preserve fossil fuels
– Save trees

Good expense
– Free access
– Low operating costs

Outcomes
– Invention
– Innovation
– Good
– Social and financial capital

Twentieth century capitalism was dumb. Smart capitalism’s agenda is outcomes not income (If you are starting the company just to make money, stop now.), connections not transactions (It is easy for people to leave your product or service if it is transactionalized.), people not products and creativity not productivity.