Founders: The only thing that really matters…

I have been telling the entrepreneurs that I meet daily through my work at BootstrapLabs and various panels and keynotes that I do, that I am looking for two things at the core of every founder that I work with:

  • Passion
  • Meaning

The first one might be easier to grasp; simply follow your passion, if you do not have passion for what you are trying to build you will not succeed, it is simply to hard (no matter where in the world you are) to build a company, that with-out the drive that comes out of passion you will simply not succeed.

Meaning on the other hand is very subjective and maybe harder to grasp, so I wanted to elaborate on this for a bit, as my approach to this grew out of many years of entrepreneurship and helping other entrepreneurs.

I think the first time somebody spelled this out was Guy Kawasaki at Garage Ventures, in his book “The Art of Start” (he talks about it in this video from 2006 @ TieCon).

Over the years and tapping into my own history of startup successes and failures, I have distilled “Making Meaning” to a compass and navigator, that helps me (and founders I work with) to keep focus on the things that will have an impact. Building a startup is about being disruptive and going against convention and breaking what everybody expects to be the truth, what is already there, and breaking all the rules (of engagement).

  • So how do you keep your priorities straight and focused?
  • How do you balance “follow the rules of engagement” with the million things you could do everyday in your startup, and pick the ones that are relevant?

You try to weigh everything you do to assess if it makes meaning, and I have divided this into 2 main things:

  • Make things that have meaning for yourself.
  • Make things that have meaning to our world (in other words have great impact, big strokes).

Making meaning for yourself, get’s you up in the morning, it creates motivation to spend all this time on building your company (sometimes taking time from your most loved ones). Making meaning to our world; is anybody else appreciating what you do? Will it make the world better? Make things more efficient? More accessible? Improving quality of life? Are you touching enough people? I can go on, but I think you get the picture. At the end if you have enough impact you are creating a lot of value.

If you follow these thoughts you will see that this resonates well with investors (here in Silicon Valley), being angels or VCs – investors invest in founders that won’t give up and truly believe in what they do and that do things that will have enough impact in our world to be really valuable.

Love to hear your thoughts on this?

Happiness, outliers and Entrepreneurs

This is why Entrepreneurship is less prevalent in “average” societies or normalized societies. In societies that strive to create a norm, we eliminate the outliers, the entrepreneurs and the extraordinary talent. In societies that embrace individuality, the outliers typically flourish.

Watch this great TED video on research on happiness, that touch this in the beginning, and a good lesson on happiness:

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Dethroning Silicon Valley

In reply to “Silicon Valley is losing it’s X Factor” by Alex Barrera, today, Mattias thanks for the tweet!

Well written post, but I don’t really agree with (all of) his conclusions, and some facts are wrong, Songkick was not Sequoia’s first European investment, it was their first UK one. They invested in Klarna in 2010 already, and there are a few other European investments in the past.

My take is really this; everybody (even a lot of people in Silicon Valley) would love to dethrone Silicon Valley. But I think reality plays against this, Alex does mention that a prominent VC shares this view. In the past years that I have built BootstrapLabs in Silicon Valley, and the 10 years before that, spending time regularly in Silicon Valley, I have seen the innovation waves come and go, and the people in my network in Silicon Valley, which consists of serial entrepreneurs, lawyers, prominent VC’s that have been building startups in the Valley since the 90’s, this is the picture I see:

  • Yes, innovation comes in waves, and we might have peaked with-in certain areas. But rest assured a new waves are already looming.
  • The co-working space that BootstrapLabs works with in San Francisco, Rocket Space, now hosts 130 seed stage (or later) startups. Seed stage funded startups in the whole country where I was born (Sweden)  in Europe would total less. Looking around just the SOMA area of San Francisco, we have thousands of startups, across the Bay area countless more. If you look at copy-cats in % of total number of startups in Silicon Valley I would suspect the number does not stand out.
  • Copy-cat or not, the prevailing view in Silicon Valley is not to be scared of competition, and instead to out-execute your competition, the European approach has always been, isn’t that already done? Search was done when Google started, social network was done when Facebook started. Both innovated their way to the no 1 position in the market. Innovation is not just in the idea, the “Silicon Valley” mantra: “Ideas are useless, execution is priceless” frames it quite well.
  • Investors in Europe are increasingly short sighted, and in general would rather invest in copy-cats with an arbitrage (and proven business models) than something new. The investor and entrepreneurial mindset to push the envelope of what we can achieve as a society is still being done in Silicon Valley (Space X with Elon Musk, Founders Fund etc).
  • The VC’s that I talk regularly with, in the Valley, that have seen .COM booms come and go, are more optimistic than ever, same goes for a number investors (LP’s) in the VC funds.

All that said, I do agree with Alex on a number of things: Europe is getting better at building startups, and the quality of the startups that reach out to BootstrapLabs every week are becoming better and better, which is a trend I have seen for at least 2 years now. What I also see is some great European accelerator and incubator programs, Startup Sauna being among the top ones.

I have a very optimistic view for the future of startups in Europe, but Silicon Valley is not standing still, and I don’t believe Europe ever will have a Silicon Valley (and I am not sure Europe need to clone Silicon Valley), I am also certain that we will see more and more world-class products being created by European startups (even though many of them might become Silicon Valley companies along the way).

I also fully agree with the comment thread below Alex’s post; Silicon Valley startups need to go global quicker than before (which is true for European startups too), and Silicon Valley can’t stay as comfortable in the US as they used to, the world is getting increasingly more global which always benefited Silicon Valley startups, but that is a two-way street, on which Silicon Valley can not take it’s dominant position for granted.

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Newsweek, seriously?

Newsweek, seriously?

Yesterday Newsweek published a provocative article by Rob Cox, called “The Ruthless Overlords of Silicon Valley.” It is about the entrepreneurs that created companies, and did share the spoils generously with employees to create  more millionaires than anybody in history.

Behind the hoodies and flip-flops lurk businesspeople as rapacious as the black-suited and top-hatted industrialists of the late-19th century. Like their predecessors in railroads, steel, banking, and oil a century ago, Silicon Valley’s new entrepreneurs are harnessing technology to make the world more efficient. But along the way, that process is bringing great economic and labor dislocation, as well as an unequal share of the spoils.

Rob Cox builds his argument around the deconstruction of Silicon Valley’s moralism, as embodied by Google’s “Don’t be evil” motto, and compare them to the Tycoons of the late 19th century. He fails to recognize, that the Tycoons earned their spoils through opposition to workplace safety, poverty-level salaries and corruption. Larry page may be a demanding boss, but Google isn’t asking its employees to risk their lives and are Facebook employees living in rat-infested houses?

On the contrary the employees in these companies are the best paid workers in their field on the planet, and these companies share more ownership in their companies than anywhere else. Coming from (a slightly more socialistic) Europe, employee equity is close to non existent, and they way every company in Silicon Valley share equity with their employees is positively shocking to any left-wing european I talk to.

Cox, has no knowledge or distinction of apples and oranges, he compares (“old” hardware companies such as) Apple with the new bread of Internet companies, thus allowing him to introduce the various abuses perpetrated by Chinese manufacturer Foxconn. Apple may be as hip as today’s Internet startups, but they are not even in the same breed (no bashing please, I am a big fan of Apple’s products).

It’s an attempt of guilt by association, and an terribly bad one at that.

Read the article, be appaled and Tweet your appellation to the world!

Thanks Dan Primack, for pointing me to this!

The Riskmaster, featuring Tim Draper

This is not new, but was looking for Songs related to Entrepreneurship, and remembered this with Tim Draper, still a lot of kudos Tim!

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Reinventing IT – Clayton M. Christensen @ Gartner Symposium 2011

Clayton M. Christensen talks about “Reinventing IT”, a must read book, and talk to watch for any Entrepreneur wanting disrupt.. Just about anything. Or rather understand why big established markets can be disrupted.

[iframe src=”http://gartner.mediasite.com/mediasite/play/9cfe6bba5c7941e09bee95eb63f769421d?t=1320659595″ width=”100%” height=”480″]

(You need to have Silverlight installed for the presentation to be displayed properly)

Courtesy of Gartner Group.

Startup Chile meet-up in Mountain View

The Startup Chile program, is the best effort I have seen to “clone” Silicon Valley, by any country or region. It’s a really smart and exciting idea.
What they do is giving away $40,000 grants over the next 4 years (to 1,000 entrepreneurs) to early stage startups willing to move to Chile for 6 months and work on their startup.

If you’re mobile, and low on cash, it’s one of the best sources of early funding available to startups.  You give up _no_ equity in exchange for the money.  The first round they had around 150 applications for 40 slots, so chances of getting in are good.

And, you’re guaranteed to be around a ton of other cool startups and entrepreneurs from all over the world willing to put it all on the line and move to Chile to get their startup off the ground.

They have an event at the Hackers Dojo, make sure to go there if interested!

They are having an informational meetup this Thursday at the Dojo.

We’re on the road again in California looking for the best and brightest entrepreneurs in the world and if you think you’ve got what it takes to garner US$40k of equity-free seed capital from Start-Up Chile for your global startup, don’t miss this opportunity!

This meetup will feature general information about the program (which Vivek Wadhwa calls a “ grand innovation experiment”) that has paved the way for a worldwide innovation revolution. We’ll explain in detail what it’s like to bootstrap from Chile and how you can become part of the initiative by applying right now, before the August 11th deadline.

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It’s not the technology, stupid!

There is a trend and a lot talk about Digital Distraction Disorder (on the web of course), and a lot of people saying things like:

  • “I don’t want technology…”
  • “I don’t like technology… “
  • “Sometimes I just want to be disconnected and have no technology”

I am all for disconnecting from our always on, always connected lifestyle, and be filled with other senses than what get’s streamed over an Internet connection. And I do think this lifestyle creates unhealthy situations for some people. I do think there are real problems in our inability to manage the opportunities presented in a meaningful and healthy way.

However, I am quite  tired of the discussion that our “technology” is the root of these problems. This is really about culture and lifestyle, and not about technology. The technology is what you make of it.

And almost everything around us is technology, it’s technology that puts a roof over our head, food on the table, the paper books that we read (yes Gutenberg’s printing press was technology as well), the piano, the violin and even our cloths on our bodies are technology. With-out any tech we would be living in caves (and no we wouldn’t have fire or anything to hunt with…

What have happened in the past 10 to 20 years is that we now a technology so vastly more powerful, with so much potential that we don’t really (yet) know how to deal with it.

I think the discussion should be about how we harness and use the opportunities presented by all this new technology better (and better means healthy, life quality improving ways), not how we cut down on using technology. That is a western’s romantic dreams of a simpler lifestyle, that unfortunately in reality either means you need to be really rich or decent to poverty and a lower quality of life. Many don’t realize that the biggest gain in quality of life and health comes from technology and the resulting increase in efficiency in our society. Look at how technology in 100 years radically transformed agriculture (in the western world) from requiring 50% or more of the population to be producers to less than 3% to produce the food needed for the whole population.

So I think you should think about this:

  • Having time to do all the things we enjoy, and not work 7 days a week, 12+ hours a day to survive, thank technology.
  • If you are healthy and you are growing old or our parents are, thank technology.
  • If you are sitting in a nice comfy chair reading a great book, with a fire place burning, thank technology.
  • If you have time to read my rambling blog, thank technology 😉

I think the solution to our “problems with technology” or rather our lifestyle of today, is more technology, and with that I mean technology that makes using all this technology easier and more efficient.

And as an entrepreneur, I encourage anyone seeing the problems, to flip the coin to see the opportunity, be an entrepreneur and create something that makes our use of technology more efficient and improve our quality of life!

Share your thoughts!

And please share how you organize your life/lifestyle to make efficient use of technology to improve quality of life, do you have method to not become stressed by an always on World? How do you manage that constant flow of e-mails? Or other things to react to?

What if an Average Joe got cash upfront for part in life earnings

This question popped up on Quora:

If a person offered an average Joe money upfront in exchange for a percentage of his future earnings, would that be a deal worth taking?

Really interesting thought!

I am going to take another twist and look at my self. I am thinking why would I give up let’s say 5-6% of my income. I intend to make some serious money in the course of my life!

If I look back at my 15 years as a serial entrepreneur and the millions of dollars that VC and investors put into my different ventures, I think most of those investors would have made more money if they invested in me in this model instead of in my companies. We would have aligned our interests more, and distributed risk over many companies…

Why? Well, I may not be the average Joe (which reinforces other comments here), but if I would have money to put to use where I think I can make the most money that is how I as an serial/parallell entrepreneur would act (in fact even if I would give up 5-6%, I am from Sweden and have occasionally paid 80% tax in the past…).

Money invested in a company is always bound to the initial idea or thought that you where pursuing at that time, and sometimes reality catch up, but as many other VC funded entrepreneurs know, when the investors and VC’s are onboard you are not that agile anymore. Do keep in mind, many of my companies were started in Europe before I came to the Bay area (different type of investors).

Furthermore, today I fund initial steps of many of my new ventures, because I like the control I get doing that. A PIC would get leverage of all of those projects that I can create. And perhaps give more fuel to make them successful…

So my conclusion is I would personally give up a few % of life earnings for a one-time lump sum (if big enough, and with a fair buy-out clause, as in the links Kim posted), but only if I believed it would help me be more successful quicker.

Now wonder how the IRS would treat such a transaction?