Note: This is an installment in the Iconic Advice series. Other installments include: Jeff Bezos, Steve Jobs, Mark Cuban, Richard Branson, Walt Disney, Mark Zuckerberg, Michael Dell and Larry Ellison.

For more than 30-years, Bill Gates has been at the pinnacle of the software industry. Like Steve Jobs, Michael Dell and Larry Ellison, he is one of the few startup Founders who remained at the helm of their respective companies throughout their entire maturation process.

In addition, like Steve, Michael and Larry, Mr. Gates also failed to graduate from college. I explore this peculiar entrepreneurial career path in further detail in THIS entry.

If you haven't already subscribed yet, subscribe now for
free weekly Infochachkie articles!

1. Great Startup Ideas Come From Everywhere

"At Microsoft there are lots of brilliant ideas but the image is that they all come from the top – I'm afraid that's not quite right." [Tweet this quote]

Much like political leaders, corporate executives are often given too much credit, as well as too much blame. Effective startup leaders allow ideas to percolate from within their company, rather than attempting to monopolize the ideation process. They also internalize their professional failures while externalizing their team’s successes.

2. One Of The Most Important Startup Skills

"The best way to prepare [to be a programmer] is to write programs, and to study great programs that other people have written. In my case, I went to the garbage cans at the Computer Science Center and fished out listings of their operating system." [Tweet this quote]

In Mark Suster’s recent talk at UC Santa Barbara, he advised his audience of entrepreneurial students to master two skills: selling and coding. Mark noted that even if an entrepreneur does not become a master developer, by simply understanding the software development process, they will be a more effective startup leader.

No one ever accused Bill of being a master programmer. However, his first-hand knowledge of how software is created, tested and commercialized facilitated his execution of Microsoft’s initial strategy, in which it leveraged its operating system to create a suite of business productivity solutions.

3. Frugal Is As Frugal Does

"Instead of buying airplanes and playing around like some of our competitors, we've rolled almost everything back into the company." [Tweet this quote]

Gates, Ballmer and the rest of Microsoft’s executive team were extremely frugal, long past the company’s startup stage. This frugality was evidenced by the fact that everyone at Microsoft, even Gates, flew coach until well into the late 1990s.

As Bill’s profile heightened, flying commercial airlines became a security issue, which eventually outweighed the associated increase in travel costs. In 1997, Bill finally purchased a private jet. Ironically, a year later, he was hit in the face with a cream pie, ironically while exiting a commercial flight.

Microsoft was one of the first successful high-tech companies to not distribute its profits to shareholders. Bill believed that the cash which Microsoft generated would deliver a higher return to its shareholders if it were reinvested into the company’s operations, rather than distributed in the form of dividends. It was not until 2003 that Microsoft issued its first dividend.

4. Student Wakeup Call

"If you think your teacher is tough, wait until you get a boss. He doesn't have tenure." [Tweet this quote]

Despite not graduating from college, Bill has spoken to thousands of students during the past several decades. His advice is essentially, "buck up, it’s called work for a reason." During one college talk, Bill told the student audience, "Life is not divided into semesters. You don't get summers off and very few employers are interested in helping you find yourself." [Tweet this quote]

Bill’s advice reflects Microsoft’s hardnosed culture, which encourages internal competition and a ruthless pursuit of the truth. As noted in Core Values, the culture of your startup is entirely in your hands. Treasure it. Along with your cash, customers and employees, a healthy startup culture will prove to be one of your most precious assets. 

5. Banana IP

"Intellectual property has the shelf life of a banana." [Tweet this quote]

As described in IP Is Worthless To A Startup, most startups over estimate the value of their intellectual property. Unless your venture is focused on researching potential scientific breakthroughs, it is likely that your technology can be easily copied and your patents circumvented. Thus, focus on out-executing your competitors, rather than hoping you can thwart them in a courtroom.

Microsoft’s success is proof that the best technology is not required in order to dominate a market. High switching costs, massive distribution and ubiquitous mindshare have combined to maintain Microsoft’s market leadership, despite their glaring technological and usability shortcomings.

I am not suggesting you spurn product excellence. However, as you develop your Minimal Viable Product, heed Voltaire, who once said, "The perfect is the enemy of the good." Bill Gates has proven numerous times that "good, is good enough." 

Note: This is an installment in the Iconic Advice series. Other installments include: Jeff Bezos, Steve Jobs, Mark Cuban, Richard Branson, Walt Disney, Mark Zuckerberg, Michael Dell and Larry Ellison.

This article previously appeared at OnStartups, HERE

Note: This is Part V in the Startup Team Building series. Read Part I HERE, Part II HERE, Part III HERE and Part IV HERE.

You may not realize it, but your adVenture’s Core Team, the senior executives who make the key decisions which drive the company’s strategic direction, is akin to a primitive tribe.

Primitive tribes and your startup both entail a small number of people banded together to battle an uncaring, hostile world. Like the tribe, your company’s survival is always in question and never guaranteed. Success depends upon everyone pulling together for the common good and striving to accomplish common goals. Everyone’s efforts must initially focus on survival before the tribe can prosper and eventually evolve into a thriving, self-sustaining community.

If you haven't already subscribed yet, subscribe now for
free weekly Infochachkie articles!

Tribes are effective societal structures, as evidenced by man’s ascension to the top of the food chain. Understanding the tribal organizational structure is vital to gaining an appreciation of the various roles played by your Core Team.

In partnership with Docstoc, I created the following video, in which I discuss the various roles in a tribal startup.  You can watch the embeded video below or at YouTube: http://youtu.be/o_nEUIPS60U

Tribes and startups thrive when labor is efficiently divided. Long before Meyers met Briggs, people in tribal communities migrated to those roles which best suited their personalities, proclivities and skills. The key roles in tribes and startups are identical: Hunter, Skinner, Shaman, Chief and Tribal Elder.

Hunter

The Hunter provides for the tribe and literally brings home the bacon. These individuals are highly autonomous, independent and thrive on frequent recognition. When they have a successful hunt, they want everyone to know about it.

The Hunter is generally not a visionary. However, once they are pointed in the right direction, they are clever enough to improvise a tactical plan to achieve a strategic objective. They do not want to be told how to take the hill, just which hill needs to be taken.

At your adVenture, the hunter is the rainmaker, in the form of a Business Development Executive, VP of Sales or Corporate Development Officer. Once they are told the type of deal that is needed, they are capable of autonomously devising the appropriate tactics to get the deal done.

A typical Hunter’s characteristics include:

1. Work hard
2. Driven to do right thing
3. Fast and furious
4. Under communicate – do not like to confer with or answer to the group
5. Excel under pressure
6. Emphasis on achieving goals – second guess their tactics at your peril
7. Deliver quantity over quality – close enough is okay
8. Work well outside the box

Skinner

The Skinner makes the Hunter look good. When the Hunter brings back the kill, it is the Skinner who dresses the meat, tans the hides and preserves whatever is not initially eaten for the tribe to subsist upon during lean times.

The Skinner at your adVenture will likely take the form of the VP of Operations, VP of Professional Services or Chief Operating Officer. They ensure that your company delivers on the Hunters’ promises by exceeding your partners’ and customers’ expectations.

A typical Skinner’s characteristics include:

1. Work correctly
2. Driven to do things the right way
3. Slow and careful
4. Service oriented – want to meet stakeholders’ needs within the organization
5. Over communicate – encourage meetings and agreement regarding goals
6. Quality over quantity – do things “by the book”
7. Work well inside the box

Shaman

Shamans invent new tools and processes that improve the overall quality of life within the tribe. For instance, the Shaman will spend his days thinking of a better fishhook, a new tool for cleaning skins or searching for new medicinal plants to cure the tribe’s ailments.

At your adVenture, the Shaman is often the Founder. They may also take the form of Chief Technical Officer, VP of Engineering or VP of Product. By whatever name, the Shaman is the person who devises and develops the innovations upon which your business is based.

A typical Shaman’s characteristics include:

1. Work differently
2. Creative visionary
3. Communicate differently – requires careful listening
4. Seek a better way
5. Create quickly and freely
6. Tripped up by details
7. Prone to devise complicated solutions
8. Prize a solution’s technical elegance over its functionality
9. Are unaware that a box exists

Chief

Every tribe needs a Chief, just like every adVenture needs a CEO. The Chief defines and communicates the tribe’s strategic direction, such as a new valley to forage or a mountain retreat to escape the heat of summer. The Chief listens to the opinions of the other tribal members, makes decisions that impact everyone and ensures an adequate level of acceptance of such decisions to facilitate their ultimate success.

A typical Chief’s characteristics include:

1. Work together
2. Shepherd the team toward its strategic goals
3. Slow and connected
4. Communicates clearly and supportively
5. Driven to maintain cohesion within the team
6. Indecisive
7. Prone to being railroaded
8. Defines the box

One of the best CEO’s I worked with exhibited nearly all of the above characteristics. As a Hunter, I was frequently frustrated, as he was often slow to act. In his effort to keep harmony within the Core Team, he seemingly agreed with everyone, even people who held diametrically opposed opinions.  

In retrospect, I now realize that his ability to sincerely empathize with everyone’s respective positions, especially on difficult issues, was imperative in keeping our Core Team together during the numerous challenges we encountered on our road to a successful exit.

One of his favorite sayings infuriated me at the time, but I now appreciate its underlying wisdom, “Some of the best decisions I ever made were the decisions I never made.” Despite my Hunter-driven frustration at his hesitancy, more often than not, his resistance to making a snap decision proved to be prudent.

Tribal Elders

Tribal Elders spend their time sitting by the fire dozing and recounting the tribe’s history.  They cannot be counted on to do any heavy lifting nor are they in a position to execute the day-to-day tasks necessary for the tribe to thrive. However, they occasionally offer bits of sage advice that allow the tribe to avoid hardships and reap windfalls. As such, the wise Chief knows when to solicit their counsel and when to allow sleeping Elders to lie, as described more fully in Free Advice.

At your adVenture, the Tribal Elders are represented by your Board of Directors and Advisors. The Board Members likely have a varied and broad business history upon which to draw. They may be able to provide general guidance at certain pivotal points during your adVenture’s journey. However, as noted in Your VC Is Not John Lennon, do not heed their advice blindly, as it is impossible for them to have your level of insight into the operational details of your adVenture.

Pop Quiz

Question: Which Tribal member is the most important?

Answer: All of them.

Without the Hunter, the Shaman’s ideas would never be put into practice. Likewise, without the Skinner, much of the Hunter’s efforts would be wasted. He might be able to feed himself, but he would not be able to sustain the tribe on his own.

Without the Shaman, neither the Hunter nor the Skinner would have the tools necessary to carry out their respective roles within the tribe. Without the Chief, the tribe would wander aimlessly, fighting among itself until the group eventually dispersed and the individual members were melded with other tribes with healthier cultures and a more focused sense of direction.

As noted in Be The Beatles, balance is the key to a successful team. Thus, every member of your adVenture’s Core Team is the most important member. Your Core Team is your startup’s most important asset. Respect man’s evolution and heed the tribal lessons of old.  If you do, you may just end up on top of your industry’s food chain.

Note: This is Part V in the Startup Team Building series. Read Part I HERE, Part II HERE, Part III HERE and Part IV HERE.

Note: This is an installment in the Iconic Advice series. Other installments include: Jeff Bezos, Steve Jobs, Richard Branson,Walt Disney and Mark Zuckerberg.

1. Degree? We Don't Need No Stinkin' Degrees

"As important as school was, I found that it could be very disruptive to a steady income." [Tweet this quote]

If you haven't already subscribed yet, subscribe now for
free weekly Infochachkie articles!

You can watch Jason’s presentation below or on YouTube here:  http://youtu.be/fBGT8TVjZXQ

According to a January 2012 article in Forbes Magazine, nearly 16% of the 400 most affluent Americans do not have a college degree. When the world's 400 richest people are considered, the percentage who did not earn a college degree doubles.

For many entrepreneurs, college has little appeal. Academia's arbitrary, bureaucratic structure, combined with its predominant focus on theoretical issues, causes many entrepreneurs to depart college early.

I generally encourage my UC Santa Barbara students to complete their formal education before joining or creating a startup. However, I occasionally encounter a student who I believe is better suited to learn "on the job," than in the classroom. In case you are wondering, I do not weigh in on such monumental choices, as I do not believe a Professor's opinion is relevant.

In Michael's case, he promised his parents that he would return to school if the sales at his startup did not meet his expectations.

"I had to give it a full go and see what happened. I couldn't resist the opportunity. The deal was, I would start into business full time in May, and at the end of August we would take a look and decide if it was doing well." [Tweet this quote]

Although he has spoken at numerous graduation ceremonies since he left college, Michael never returned to school as a student. "I was, you know, rebellious, an 18, 19-year old and just did what I wanted to do and all worked out OK." [Tweet this quote]

2. Innovations Are More Than Technological Features

"Our business is about technology, yes. But it's also about operations and customer relationships." [Tweet this quote]

Innovation is commonly associated with either the introduction of new products or new features added to existing products. Such innovations are often focused on making products stronger, faster, smaller, lighter and cheaper. Despite the relative dominance of product-oriented innovations, they seldom create sustainable competitive advantages. You can read about the variable impact of the various forms of innovation in Fast Followers.

Dell's primary innovations were operational. It devised made-to-order factories that allowed customers, for the first time on a large scale, to individually configure a personal computer. Along with Amazon, Dell was also an early pioneer of web-based customer service. These two areas of operational innovation allowed Dell to defeat a number of tech-centric competitors which spent significant money researching and developing technological features, ever briefer product lifecycles.

3. Defining The Questions

"It's through curiosity and looking at opportunities in new ways that we've always mapped our path at Dell. There's always an opportunity to make a difference." [Tweet this quote]

Curiosity is a common trait among serial entrepreneurs. The freedom to pursue the answers to the questions that most intrigue us is one of the primary benefits of charting your own course and not working for a Big Dumb Company. As Walt Disney once said, "We keep moving forward, opening new doors, and doing new things, because we're curious and curiosity keeps leading us down new paths. When you're curious, you find lots of interesting things to do."

4. Small Businesses Face Common Challenges

"The best part was the wisdom of the restaurant owner, which I could capture if I came to work a little early. He took great pride in his work and cared about every customer who came through his door." [Tweet this quote]

Effective startup mentorship can come from unlikely sources. The basic tenets which make a small, lifestyle business successful are surprisingly similar to a high-tech startup: establishing a productive corporate culture, hiring great people, sourcing reasonably priced capital and identifying and satisfying one or more market segments. Look around. You may have overlooked an otherwise highly qualified Advisor, who can help you avoid rookie startup mistakes.

5. Naive Instinct

"One of the things I benefited from when I started this business was that I didn't know anything. I was just instinct with no preconceived notions. This enabled me to learn and change quickly without having to worry about maintaining any kind of status quo, like some of my bigger competitors." [Tweet this quote]

Mark Zuckerberg shared a similar sentiment, which he augments by stating that Facebook has striven to maintain a beginner's perspective. In Mark's words, "…we viewed that as a really important thing, to always keep a beginner's mind and what would we do if we were starting the company now…" Maintaining the status quo is for Big Dumb Companies. Startups win by changing the rules.

6. Bottle Washing

"There are a lot of things that go into creating success. I don't like to do just the things I like to do. I like to do things that cause the company to succeed. I don't spend a lot of time doing my favorite activities." [Tweet this quote]

During the early days of your venture, you will be forced to perform a number of duties you find displeasing. As you achieve success and have the financial wherewithal to delegate tasks to new members of your team, you can eventually gravitate toward those tasks which you enjoy. However, no matter how large or successful your organization, there will always be responsibilities which you perform for the good of your company, not for your personal entertainment.

7. Winning Per Michael Dell, Not Charlie Sheen

"The key is to listen to your heart and let it carry you in the direction of your dreams. I've learned that it's possible to set your sights high and achieve your dreams and do it with integrity, character, and love. And each day that you're moving toward your dreams without compromising who you are you're winning." [Tweet this quote]

As I note in Nice Guys Finish First, success includes maintaining your integrity. Honesty is a core competency of most successful entrepreneurs. Despite the Hollywood myth, it is easier to succeed in business when you are honest, rather than trying to screw everyone you encounter.

8. The "Right" Opportunity May Be Right Now

"Don't spend so much time trying to choose the perfect opportunity, that you miss the right opportunity." [Tweet this quote]

Great entrepreneurs are action oriented. They cannot always turn a bad situation into perfection, but they are confident in their ability to morph a mediocre opportunity into a positive outcome through thoughtful execution, not thoughtful . In the words of US Army General George Patton, "A good plan violently executed now is better than a perfect plan executed next week."

9. Sometimes You Just Have To Say…

"Sometimes you just have to belly up to the bar and take a chance. We made some mistakes, but we also had the strength to work our way out." [Tweet this quote]

Internalize Michael's advice while channeling George Patton. Belly up and execute violently.  

Note: This is an installment in the Iconic Advice series. Other installments include: Jeff Bezos, Steve Jobs, Richard Branson, Walt Disney and Mark Zuckerberg.

Note: This is an installment in the Iconic Advice series. Other installments include: Jeff Bezos, Steve Jobs, Richard Branson, Walt Disney and Michael Dell.

   1) Get A Mentor

"I started the site when I was 19. I didn't know much about business back then." [Tweet this quote]

If you haven't already subscribed yet, subscribe now for
free weekly Infochachkie articles!

Ignorance is not bliss in business, but it does allow entrepreneurs to face the unknown with a measure of confidence. No 19-year old understands business at the level of a seasoned, serial entrepreneur. However, it is important for young entrepreneurs to be adequately self-aware to know what they do not know.

Given Facebook's numerous corporate governance mistakes during its early days, Mark would have been well served to have cultivated a mentorship with one or more savvy Advisors. These individuals would have undoubtedly helped the company avoid some of its intellectual property and employee compensation lawsuits.

   2) Modern Day Water Cooler, Neighborhood Pub And Hair Salon

"When you give everyone a voice and give people power, the system usually ends up in a really good place. So, what we view our role as, is giving people that power." [Tweet this quote]

   3) Beginner's Luck

"A lot of companies would be trapped by the conventions and their legacies of what they've built, … we viewed that as a really important thing, to always keep a beginner's mind and what would we do if we were starting the company now…" [Tweet this quote]

By always thinking like a newcomer, you can avoid the Innovator's Dilemma, in which the market leader eventually loses a new, disruptive solution. When enhancing your value proposition, ask the same question a newcomer would ask, "What is the best way for users to interact with the new features, irrespective of the existing customer experience?"  When asked about the competition he feared most, Bill Gates is alleged to have said, "the two guys inventing away in a garage somewhere." Even if this quote is apocryphal, it remains instructive. You can beat the guys in the garage, as long as you continue to see your evolving value proposition through their eyes.

   4) Rational Exuberance

"The demands and the amount of work that it takes to put something like [Facebook] into place, it's just so much that if you weren't completely into what you were doing and you didn't think it was an important thing, then it would be irrational to spend that much time on it."

Creating and sustaining a successful startups is beyond difficult. Be smart. Develop a solution for a problem, market and/or user group about which you are passionate. If you are indifferent about your solution and its impact on your users, it will be difficult to maintain the stamina necessary to guide your startup to a well-orchestrated exit. According to Michael Dell, "Whether you've found your calling, or if you're still searching, passion should be the fire that drives your life's work."

   5) Progress Matters

"I think a simple rule of business is, if you do the things that are easier first, then you can actually make a lot of progress."

I recently performed a 360-Review on two Co-Founders who were the company's CEO and CTO. We discovered that they were routinely performing a number of urgent tasks that had a relatively small impact on the overall organization. We delegated these tasks to subordinates, which allowed the Co-Founders to remove roadblocks that were otherwise hampering the company's progress.

Startup leaders should identify tasks that are impactful and can be performed relatively easily (and thus quickly). For instance, adding Facebook's status feature was not particularly urgent, nor was it relatively difficult. However, it proved to be very impactful.   

   6) Frat Brother CFOs

"The dynamic of managing people and being CEO in a company is a lot different than being college roommates with someone." [Tweet this quote]

After screwing over a co-worker in the 1996 movie Jerry Maguire, the over-the-top Entertainment Agent Bob Sugar rationalized his unethical behavior by saying, "It's not ‘show friends.' It's show business.'" An ethically-centered version of this sentiment is applicable to startups.

Although it may be comfortable to start a company with your friends, it is a mistake, unless your friend(s) happens to be ideally suited to their role in the venture. Hang out with your friends when you are relaxing and work with the most talented people you can recruit.

   7) Keep It Stupidly Simple, Smarty

"The trick isn't adding stuff, it's taking away." [Tweet this quote]

The typical startup cannot afford a massive ad campaign to educate users as to its value proposition. The value of a startup's products must be obvious and easily accessed. If a young company does not balance ease-of-use and utility, it risks being usurped by a more elegant, but similarly compelling solution. In MVP², I note that when we initially released GoToMyPC, we struggled to balance the product's convenience with its overall effectiveness. We debated the merits of releasing two products, one at a lower price with fewer features, but we ultimately decided to release a single version of GoToMyPC, with a highly limited feature set.   

By opening its platform to third-party development, Facebook allowed the market to determine the winning applications, rather than trying to define them internally. Understand what you do well and focus on doing it best.

   8 ) Mark's Do Over

"If I were starting now, I would do it very differently. But I knew nothing back then… But honestly, if I were starting now, I would have stayed in Boston, I think." [Tweet this quote]

Mark's move to Silicon Valley was no doubt predicated on his belief that Facebook would obtain capital and recruit top-talent more efficiently. However, he eventually realized that along with the many positive elements associated with a highly-concentrated entrepreneurial ecosystem, there are a number of less advantageous factors, some of which I describe in Three Factors Which Intoxicate Venture Capitalists.

Young entrepreneurs worldwide are realizing they can launch and scale companies in their local communities. These geographically dispersed startup ecosystems, full of "two guys inventing stuff in a garage" (or in their dorm rooms), will eventually create the next wave of high tech successful startups, just like young Mr. Zuckerberg.

Note: This is an installment in the Iconic Advice series. Other installments include: Jeff Bezos, Steve Jobs, Richard Branson, Walt Disney and Michael Dell.

Mark framed his comments around the major mistakes he made during his early ventures. By focusing on what he would do differently now, he was able to humbly convey a number of impactful lessons to a captivated audience of budding entrepreneurs.

If you haven't already subscribed yet, subscribe now for
free weekly Infochachkie articles!

You can watch a nine-minute excerpt from Mark’s talk below or view it directly on YouTube here: http://youtu.be/hyb8lUqCjc4 Note that many of the quotes below are from the full version of Mark’s talk and not necessarily from the highlights included in the video below.

1. Start – It’s The Only Way You Will Know

In Youthful Discretion, I list a number of entrepreneurial advantages young people have over their more aged brethren. Mark reinforced this message by telling the students, “I didn’t start young enough. I started at 31. The first thing you do is not likely to succeed. But the second thing…is also not likely to succeed. The reality is, most startups do not work. The younger you are in learning the (startup) skills, the better.”

Despite the fact that the UC Santa Barbara audience was primarily comprised of undergraduate students between 20 and 22 years old, Mark told them, “To some extent, you guys are already too old. In the last six weeks, I have been pitched by five entrepreneurs under 20. The youngest was 15. He’s pretty talented. He has four Co-founders… two of his Co-founders are MIT dropouts, both of them are under 15.”

Mark notes that most people are Wantrepreneurs, stating that, “98 percent of people who tell me they want to do startups are not entrepreneurs, they are wantrepreneurs. Because they want to do it, but they don’t. The difference between a wantrepreneur and an entrepreneur is that an entrepreneur starts.”

Mark’s comments make it clear that if you are an entrepreneur, Now Is Never Too Early.

2. Find A Concept You Are Passionate About

Mark admitted that one of the mistakes he made early in his career was pursuing a business concept about which he was not passionate. “I got talked into working on something because it was a big opportunity. I chose to work in the construction industry because every venture capitalist told me, ‘Look, that’s 13% of GDP. It’s a very big industry and its behind on IT.’ It’s pretty terrible to have to go to conferences… with people who are talking about… stuff that not only do I know nothing about, but I could give two $hits about.”

3. Start Lean

The next mistake Mark articulated from his past was raising too much money. “If you raise too much money, you tend to spend a lot of money. There is a weird Apollo 13… thing about not having enough resources and everybody having to sit around… and figure out how we’re gonna make this thing work that produces great innovation.”

Mark went on to say that he also had too many Co-founders in his first venture. “I like to call it the ‘Co-Founder mythology,’ that having Co-founders is a must. I started with three. Make sure it is somebody you know really well. If you found something together, you are sort of stuck with that team. There is nothing wrong with researching an idea yourself, getting it started yourself, validating the idea yourself and then asking people to join you.”

4. Take Risks, Be Bold, Make A Difference Or Go Home

Mark encourages emerging entrepreneurs to be bold, yet he admits that with his first startup, he boldly pushed PR before the product was ready. “I ended up on the front page of the Business Section of the Financial Times. But our product wasn’t ready for primetime. We didn’t even think about how we were going to answer calls… or how we were going to respond to everybody. We just knew that we were onto an idea that no one had thought of and we had better be in the press first because, of course, there is a first-mover advantage. Literally, (we received) hundreds and hundreds of in-bound inquiries, with no idea how we were going to talk to these people.”

Clearly, the right time to trumpet your product is when it can live up to the media hype. “Build something, test something, (you) don’t have to tell lots of people about it. Put it out on the Net, see what the reactions are…If you build something that starts to resonate, then you can start to… get into tech blogs and talk to the press and tell everybody what you are doing.”

5. Flip Burgers

Mark implores the students to seek startup opportunities which allow them to develop what he believes to be the two most important startup skills, programming and selling. “Working in a startup… you will be paid less than market rate, but… I would advise you to take the two skills that nobody wants, which happen to be the two most valuable skills you can develop in your youth.

Number one is sales. Life is sales. Raising money. Sales. Hiring employees. Sales. Business development is sales. Winning customers is sales. Getting press is sales. (Selling is) literally the most valuable skill you can have.”

In addition to sales, Mark advocates that emerging entrepreneurs gain some experience coding. According to Mark, “Everyone says to me, ‘Yeah, but I’m not a developer… I find it a little bit boring.’ Just know the basics. Learn HTML. Learn JavaScript. Learn a little bit of Ruby On Rails. It doesn’t have to be your day job. You don’t have to love it. Having the feeling for how the process works… will give you skills in whatever job you do.”

At his first venture, Mark hired too many people, many of whom were too senior. According to Mark, “I wasn’t effectively leading my sales organization. I wasn’t attending enough sales meetings, I wasn’t looking customers in the eye and seeing their reaction. I lost a degree of feeling for what really was happening in the company.”

The company’s overwrought organizational structure resulted in Mark being too far removed from the core aspects of his business, making it difficult to appropriately lead his team. Mark encourages young entrepreneurs to avoid making a similar mistake, saying, “Whatever you do, whether you are four people or forty people, answer customer support calls yourself, even if you’re the Founding CEO. Do product meetings yourself. Go see customers yourself. Talk to journalists yourself. I am not saying do every job and don’t delegate. But you need a piece and a feeling of every single part of your business, so that later, when you grow, you can hire and lead people with competence.”

6. Don’t Be A Ho

Mark’s initial venture had a large marketing budget, which allowed him to attend conferences all over the world. In retrospect, he now realizes that such time spent away from his company’s headquarters was not time well spent. “Conference Ho’s are people who spend all their time going to conferences. You go to a conference and there are important people at conferences. Often they will hang out and have drinks…and you get to meet lots of cool people. I am not saying ‘zero conferences’… but at some point, attending conferences, as the founding team, ends up being self-serving and narcissistic. There is somebody back at your office having to make the trains run on time. In your absence, people aren’t making decisions.”You can check out Mark’s blog entry on the dangers of becoming a Conference Ho HERE.

In addition to becoming a Conference Ho, Mark and his first startup team also became Revenue Hos. “I became a prostitute for money. We had a strategy when we started. We were idealistic, (but our ideals) met (the) reality of investors saying, ‘I want to see you, every quarter, put the right numbers on the board.’ As a result…I landed clients who would pay me tons of money, but I had to develop my software to do what they wanted to do, rather than my idealistic vision. I believe I would have been better off… (if I had) stuck more to my core vision.”

7. Focus On Customers – Nothing Else Matters

One result of raising too much money was that Mark’s first venture launched too many products, all of which were over-spec’d by the time they were launched. “In the old days, when we designed products, we would lock ourselves in an Ivory Tower, we’d pay someone to do some market research, we’d would decide what… customer requirements were. We’d build this product and nine months later we would ship it. It was kind of like producing a film in Hollywood. You had no idea if you had Waterworld or Titanic.”

Excess money also drove Mark’s first venture to internationalize their distribution too early. “The scarcest resource at any startup…(is) management bandwidth. You are not going to join a startup and do strategy. You spend all your time doing one thing, which is making decisions.” By prematurely expanding distribution globally, you risk defocusing your team and potentially losing your domestic market to a more disciplined competitor.  

Mark’s Do Over

Mark closes his talk by reinforcing the importance of entrepreneurs beginning their startup career early. “You only have your youth once. It’s an order of magnitude harder to do a business when you have kids and a mortgage, and a wife or husband… and college savings to think about and all that other baggage. The one thing I would do differently, if I had a do-over… I would have started much younger.”

“Starting” does mean you must risk it all. In many cases, you can gain meaningful insights and validate your potential opportunity while working on it part-time. The key takeaway from Mark’s talk for emerging entrepreneurs is clear – “start now.”

If you haven't already subscribed yet, subscribe now for
free weekly Infochachkie articles!

You can watch my interview with Steve below or on YouTube here: http://youtu.be/VV84vFfN85U

During the fall of 2011, Steve wrote a controversial post entitled, Why VCs Should Be Startup CEOs. If you have not yet read it, take a moment to do so now. It is a brief and worthy read.  

Steve identifies the following skills as necessary for success as a venture capitalist:

• People skills (ability to recognize patterns of success in individuals and teams)
• People skills <again>
• People skills <and again>
• Market/technology acuity (patterns of success, domain expertise)
• Rolodex/deal flow (deal sourcing/ability to make connections for the portfolio)
• Board skills (Startup coaching, mentoring, strategy, operational/growth)
• Fundraising skills

Steve annotates his list by stating that:

Some of these skills are learned in school (finance), some are innate aptitudes (people skills), some are learned pattern recognition skills (shadowing experienced partners, hard won success and failures of their own), and some are learned by having operating experience. But none of them are substitutes for having started and run a company.

Interestingly, even the non-people skills on Steve’s list are highly dependent on a person’s interpersonal capabilities. Raising money, managing a Board and establishing a strong Rolodex are all facilitated by an ability to effectively empathize and communicate.

CEO Or Nothing?

Steve’s article struck a particular chord with me. Although my career includes over 15-years of startup operational experience and I was responsible for nearly every role at my various startups, I never held the CEO title. As such, I was curious if Steve felt that a venture capitalist had to be a former CEO in order to be optimally effective or if he gave equal consideration to the merit of other senior executive roles. His response was interesting.  “The post wasn’t meant to be dogmatic. It was just an observation of what I’ve seen, about young VCs in particular and the length of time it takes them to actually understand what it is they are doing. Most of them pick it up fairly quickly… but some of them spend their whole careers never understanding what business they are in and think of it as a financial asset class.”

Steve goes on to note that Chuck Eesley, one of his Stanford compatriots, has performed quantitative studies of the VC industry, finding that firms which have operationally experienced partners tend to generate superior financial results.

Yet, even though Steve acknowledges that all senior operating roles at a startup facilitate a venture capitalist’s ability to succeed, he concludes his remarks by underscoring the significant distinction between his first-hand experiences as a VP and as a CEO.  

“…in my eight startups, I was CEO and Founder once, meaning the buck stopped with me unequivocally…the role of the CEO is so different than the role of an operating exec, they’re not even on the same planet. I had been a VP of Marketing a couple of times in a startup…but until you are the CEO having the Board yelling at you in one ear and running out of money… and the Engineering VP just quit, you don’t have a clue about what it is like running a company until the buck all stops with you. So I wanted to distinguish running the company from the other jobs at a startup.”

Relevancy Is Relevant

Few people will argue that operational experience is an unimportant component to becoming an effective venture capitalist. However, the relative value of such experience diminishes considerably as the investment domain diverges from the investor’s area of operational expertise.

For instance, while discussing this topic, a venture capitalist (who asked to remain anonymous) recently shared the following: “I once had a life sciences guy, a brainy medical academic, on the board of a tech company. He was worse than useless as his frame of reference seldom synced up with my portfolio company. He kept trying to use a screwdriver as a hammer.” Similarly, a former CEO of a Big Dumb Company might be ill suited to invest in lean startups. Operational experience is additive, but its relative impact is predicated on how germane it is to the investor’s area(s) of focus.

The Alchemy Of A Great Venture Capitalist

Steve notes that venture capital is still a “craft industry” and thus there are a variety of career paths which lead to Venture Partner. According to Steve, “If I had to come up with an academic-specific view of how to build great venture capitalists, it was hire people… to be an Analyst out of engineering or MBA school. Let them…understand how to analyze deals. Throw them out and make them be product managers or something in a startup to get a feel of a company.
If they are still interested in venture, have them come back as an associate and have them shadow deals, shadow board meetings…and then my radical suggestion was to throw them out again. Let them Found a company or at least be a Co-Founder of a company. None of that guarantees a successful VC with great pattern recognition skills…but it certainly would give them a career path that understands both the venture side and the startup side.”

1 Dose Of Depth + 1 Dose Of Breadth > 2.5

I shared with Steve that Rincon Venture Partners has benefitted from a blend of operational and traditional investment banking and venture capital experience. As an operating executive, I developed deep understanding of the strategic and tactical drivers of success in the worlds of robotics, medical devices, SaaS and Ad-tech.

Before I began my VC career, I was convinced my practical experiences were an adequate primer to success as an institutional investor. In reality, I did not know what I did not know. After partnering with Jim Andelman, Rincon’s Co-Founder, I realized that operational startup experience is only one piece of the VC puzzle. Consulting, banking and venture capital experiences result in exposure to numerous, disparate situations and therefore familiarity with more permutations than are seen by the typical operating executive.

Our portfolio companies benefit from the fact that Jim has participated in well over a hundred financing transactions and dozens of exits. This breadth of experience facilitates deal benchmarking. Knowing what is feasible and typical in a variety of situations, enables our founders to efficiently seek resolutions in the midst of competing and seemingly conflicting requirements. The ability to craft a complementary syndicate, utilizing terms which protect everyone’s interests, is not typically part of a startup operator’s skill set.

The ideal venture capitalist does not exist. As such, entrepreneurs are well served to partner with a venture firm that has a complementary Core Team comprised of operational and finance oriented Partners. Assuming the Partners are not strictly relegated to only working with particular portfolio companies, such entrepreneurs can benefit from deep operational expertise while also leveraging a broad library of transactional experiences.

1. Pressure Helps You Break Through Your Breakdowns

"Mickey Mouse popped out of my mind onto a drawing pad 20 years ago on a train ride from Manhattan to Hollywood at a time when business fortunes of my brother Roy and myself were at lowest ebb and disaster seemed right around the corner."

If you haven't already subscribed yet, subscribe now for
free weekly Infochachkie articles!

In Pressure, I note how singer/songwriter Jim Croce wrote several top ten songs immediately after learning that his wife was pregnant. A struggling musician and itinerate truck driver, he was concerned he would be unable to adequately provide for his wife and unborn child.

Walt felt similar pressure when he was fired by Universal Studios and barred from creating additional content using his first hit character, Oswald The Lucky Rabbit. However, Walt did not fold. Instead, he created Mickey Mouse, who went on to kick some serious rabbit a$$.

As Seth Epstein makes clear in this talk, entrepreneurs constantly experience breakdowns, followed by breakthroughs. Properly channeled, stress can help generate the energy and creativity required to move you from one breakthrough to another.

2. The Four C's You Need To Follow Your Dreams

"I could never convince the financiers that Disneyland was feasible, because dreams offer too little collateral." [Tweet this quote]

In a prior entry, I identify the Three C's of Entrepreneurship as: Confidence, Courage and Conviction. I think Walt's Four C's of Dreaming are more apt, "Somehow I can't believe there are any heights that can't be scaled by a man who knows the secret of making dreams come true. This special secret, it seems to me, can be summarized in four C's. They are Curiosity, Confidence, Courage, and Constancy and the greatest of these is Confidence. When you believe a thing, believe it all the way, implicitly and unquestionably." [Tweet this quote]

3. Money Does Not Lead To Happiness, But Happiness Can Lead To Money

"Disneyland is a work of love. We didn't go into Disneyland just with the idea of making money." [Tweet this quote]

A common theme among successful entrepreneurs is that making money is not a primary motivator. Money allowed Walt to do more of what he loved to do, which was create entertaining content. As he once said,"I don't make pictures just to make money. I make money to make more pictures." [Tweet this quote]

Discover what you love to do, do it really well and you will have a high likelihood of making plenty of money. The downside of this approach is minimal. Even if you fail to achieve your financial goals, at least you will have the satisfaction of doing something you enjoy and you will never have to ask yourself, "What If?"

In Walt's words, "Do a good job. You don't have to worry about the money; it will take care of itself. Just do your best work — then try to trump it." [Tweet this quote]

4. Wear A Mouth Guard

"You may not realize it when it happens, but a kick in the teeth may be the best thing in the world for you." [Tweet this quote]

When you launch your adVenture, other than your friends and family, no one will care. Although it may seem harsh, no one should care until you give them a reason.

Friendly constituents will not sustain your startup. You must convince dispassionate, objective customers that your value proposition is worthy of their cash. Along the way, you will receive a number of elbows to the face, jabs to the jaw and kicks in the teeth.

Such rejection and setbacks should motivate, not demoralize, you. Every time someone told me, "Microsoft is going to put GoToMyPC out of business," I would smile and silently strengthen my resolve to prove the naysayers wrong. A kick in the teeth only hurts if you let it.

5. Color Me Curious

"We keep moving forward, opening new doors, and doing new things, because we're curious and curiosity keeps leading us down new paths. When you're curious, you find lots of interesting things to do." [Tweet this quote]

Great entrepreneurs (as well as successful venture capitalists) are intellectually curious. To such enterprising souls, the inherent ambiguity of a startup is thrilling, rather than daunting. Accomplished entrepreneurs are curious about their customers' desires, competitors' future strategic directions and their industry's technological trends. They relish learning.

My students often ask me, "What did you know about robotics and cardiac surgery before you joined Computer Motion?" I usually reply, "I knew nothing about robotics and even less about cardiac surgery." Entrepreneurs are life-long students. We are always learning, because we are curious.

6. Entertain Yourself

"We are not trying to entertain the critics. I'll take my chances with the public." [Tweet this quote]

Industry pundits generally spend their time writing about what they see in the rear view mirror. Big Dumb Companies consume such analyst reports, as they are unable to parse the past from the future. Startups cannot afford to mistake what has gone before for what lies ahead.

If you have an adequate understanding of your customers' needs and the direction and pace of technological change, you will (in the words of Mark Suster), "skate where the puck is going." If you have not yet read this entry, I highly recommend it.

7. Promise Brands

"When guests come here they're coming because of an integrity we've established over the years. They drive hundreds of miles. I feel a responsibility to the public." [Tweet this quote]

To paraphrase marketing guru and author of the Little Red Book Series, Guy Gabriele, "Your brand resides in each consumer's head. It is your promise to the consumer." Understand your brand's promise and work diligently to deliver on it with every new sale.

One of the reasons the Disney brand remains so powerful is that it fulfills a big promise. You may not provide your customers with the, "Happiest Place On Earth," but your brand's promise should still be bold and compelling.

Walt considered every facet of his operation as an opportunity to reinforce his brand, rather than dilute it. According to Walt, "Anything that has a Disney name to it is something we feel responsible for." [Tweet this quote]

8. Conventional Wisdom Is A False Constraint

"When I started on Disneyland, my wife used to say, ‘But why do you want to build an amusement park? They're so dirty.' I told her that was just the point — mine wouldn't be."

Entrepreneurs are not constrained by today's world. Rather, they envision a world the way it should be. Like many successful entrepreneurs, Walt destroyed his competition by changing the rules of the game rather than abiding by the industry incumbents' conventional rules.

9. Just Start

"The way to get started is to quit talking and begin doing." [Tweet this quote]

The best advice in Guy Kawasaki's The Art of the Start is on page 9, "Get Going." Start. There is little likelihood that the value proposition you initially explore is what your adVenture will ultimately pursue, but you will never find the intersection of your core competencies and the market's desires if you do not get started.

What are you waiting for?

Note: This is an installment in the Iconic Advice series. Other installments include: Jeff Bezos, Steve Jobs and Richard Branson.