“People connected to groups beyond their own have early access to diverse, often contradictory information and interpretations, which gives them competitive advantage in seeing and developing good ideas. This is creativity as an import-export business. A idea mundane in one group can be a valuable insight in another.”

What: Book Club for Business Impact covers Innovator’s DNA Skill #4 Networking
When : Wednesday May 16 Noon to 1pm PST / 3-4PM EST / 8PM London / 9PM Paris & Berlin / May 17 7AM Sydney
Where : on-line (register at https://www3.gotomeeting.com/register/369255374
Cost: No charge for live event

Tristan Kromer, Steve Hogan and I will be discussing the book and specifically Chapter 5 on networking. This is intended to be a roundtable conversation and we will take questions and comments from the audience via the chat interface throughout the event. You can use the GotoMeeting client or dial in from the US, Europe, or Australia.

Tristan (@TriKro) brings unique background and set of experiences to the panel. He has lived in 12 cities spread across five countries, he worked or ten years in the music industry, five years in IT security, and has becoming actively involved advising a number of startups as well as launching of his own. He blogs at grasshopperherder.com.

The word networking can conjure up a number of obnoxious business practices. For the purposes of the discussion there are a couple of situations that we will take as points of departure:

• You may very well be looking for new information that’s outside your box, it’s likely inside of someones else’s. Many successful innovative products rely less on the discovery of genuinely new information and more on the combination of knowledge from seemingly unrelated fields or industries.
• There is a category of information that’s not written down (yet, and perhaps never). You place your startup at a tremendous disadvantage if you focus on learning solely from reading or what you can directly observe. Someone else’s experiences and expertise can often supply missing pieces of the product market fit puzzle.
• Networking in a mature firm tends to be ends focused: you have a specific destination in mind and are looking for insights and resources to accomplish a pre-existing goal. This leads to interpersonal networking strategies that are more transactional. Networking in a startup is often driven by a search for means and building blocks, it’s as much about gaining multiple perspective on your current situation and weaving a network  that you can continue to collaborate with as it is a single transaction.
• One of the largest barriers to effective networking is your own experience; like a fish in water it can be hard to understand how to build a common context for a conversation.

Wednesday, May 16, 2012

12:00 PM Pacific / 9:00 AM Hawaii
1:00 PM Mountain / 2:00 AM Central
3:00 PM Eastern / 8:00 PM London
9:00 PM Paris/Berlin

Access: GotoMeeting VoIP or dial-ins in 17 countries.

Chapter 5: Discovery Skill #4 Networking

The Innovator’s DNA by Jeff Dyer, Hal Gregersen, Clayton M. Christensen Practical and provocative, The Innovator’s DNA is an essential resource for individuals and teams who want to strengthen their innovative prowess. The authors outline five discovery skills that distinguish innovative entrepreneurs and executives from ordinary managers: Associating, Questioning, Observing, Networking, and Experimenting.

Signup to participate the live review Complete SKMurphy’s book club list Remind me of upcoming events

Related Resources: The Innovator’s DNA overview Discovery Skils Associating Questioning Observing Networking Experimenting

Share your story - Leave a comment below What do you think of the topic? Do you have a question about this topic? How did impact your business?

Additional Book Reviews

3. Get rich slow. [link added]

Slow means that you are not impatient and don’t cut corners. It also means you are confident

4. Focus on the scarce resource online: attention. If you try to invent a way to take cheap attention and turn it into cash, you will fail. The attention you want isn’t cheap, it’s difficult to get via SEO and it rarely scales. Instead, figure out how to earn expensive attention.

5. In addition to attention, focus on trust. Trust is even more scarce than attention.

Trust doesn’t scale, it’s built up by repeated interactions over time. That’s what makes it so important.

7. Don’t quit your day job. Start evenings and weekends and figure it out with small failures.

Having a plan for taking affordable losses means that you can play the game longer and learn more.

9. Obsessively specialize. No niche is too small if it’s yours.

15. Hang out with people who aren’t looking for shortcuts. Learn from them.

I am always looking for way to be more productive but I expect it will take a lot of hard work just to maintain the status quo.

17. Make money in the small and then relentlessly scale.

I like this list, it incorporates his premise that permission leads to attention, and attention leads to trust when the communication is personal, anticipated, and relevant.

Here are three tips that I took away that are most applicable to bootstrapers:

• Complex Roller Coaster Ride: Every M&A transaction will have negotiations, due diligence, plenty of work, and an emotional roller coaster. It may take anywhere from three weeks to six months to close a deal, after you have a term sheet. Avoid “We won the term sheet, they won the documents,” make sure that term sheet agreement is reflected in final deal documents.
• There is Something About a Closet That Makes a Skeleton Restless: word of a deal will encourage competitors to press you harder,  suppliers to negotiate harder, unhappy employees to renegotiate compensation. Settle lawsuits, clean up the capitalization table and all stock and option agreements, and make sure intellectual property assignment, offer letters, employment agreements, and any termination agreements are all signed and filed before you start to shop the company.
• You Know Your Customers Love You But Can You Prove It? Can You Quantify Their Love? Keep contracts, license agreements, purchase orders, invoices, and any and all revenue recognition policies and decisions documented and well organized. It’s better to maintain them as a part of an ongoing effort than try to pick up the slack during a due diligence cycle.

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“To offer a man unsolicited advice is to presume that he doesn’t know what to do or that he can’t do it on his own.”
John Gray

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“Nothing is so exhausting as indecision, and nothing is so futile.”
Bertrand Russell

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“You don’t drown by falling in the water; you drown by staying there.”
Edwin Louis Cole

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“Just about every great, brave or beautiful thing in our culture was created by someone who didn’t do it for money.”
Seth Godin in “The Story of Money is Not a Straight Line“

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“The technology is nothing without the team.”

I remember reading this as a caption to an magazine ad  more than a decade ago but I can no longer find the source. I used it as the title for “The Technology is Nothing Without the Team”

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“Silicon Valley generates innovation faster than anywhere else because it has no stigma for good-faith failure.”
Michael O. Church in “Fail fast” is not an excuse for being a moron, a flake, or a scumbag.

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“He that has never suffered adversity is but half acquainted with others, or with himself.”
Charles Caleb Colton

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“Worry isn’t work. Anxiety isn’t work. Entertaining a sense of impending doom isn’t work.”
Dan Pallotta in “Worry Isn’t Work“

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“The deepest definition of youth is life as yet untouched by tragedy.”
Alfred North Whitehead

+ + +

“Always choose to do what you will remember ten years from now.”
Richard A. Moran

See also “Nuts, Bolts, and Jolts by Richard Moran”

+ + +

Tell me what you pay attention to and I will tell you who you are.”
Jose Ortega y Gasset

Support for the Information Diet

+ + +

“This company is yours to steer–toward opportunities and away from risks.”

“We are all stewards of our long-term relationship with our customers.”

“Everyone is a designer. Everyone can question each other’s work.”

Quotes from Valve Company Handbook (first edition 2012)

See also “Four Excerpts From Valve’s Employee Handbook That Belong In Yours”

+ + +

“The key journalist of the future must be able to relate today’s event to yesterdays fact in a way that helps indicate tomorrows meaning.”
Edward Barrett

+ + +

“A hero is someone who, for the general good, takes the initiative to solve an ambiguous problem.”
James Bach “Why Software Projects Need Heroes“

+ + +

“This company is yours to steer–toward opportunities and away from risks.”
Valve Company Handbook (first edition 2012)

This recognizes a reality that echoes Kevin Kelly’s “we are all steering.” I sometimes encounter entrepreneurs who want to hire (or have hired) employees who are waiting to be told what to do;  it’s amazing how little leverage this model affords a business. It may be necessary for a junior new hire but Valve’s model undoubtedly unleashes a lot more creative energy and insight.

“We are all stewards of our long-term relationship with our customers. ”
Valve Company Handbook (first edition 2012)

In his 2011 analysis of where Cisco had failed to manage incentives, Larry Lang observed that a mature firm faces serious challenges in maintaining an employee focus on customer relationships when cultivating internal relationships is often a more reliable model for advancement and increased compensation. What is significant about Valve’s approach is that they trust everyone to interact with customers and feel responsibility for the relationship–it’s not just the job of the sales or marketing or customer service group.

“Everyone is a designer. Everyone can question each other’s work. ”
Valve Company Handbook (first edition 2012)

Intel has a model for “constructive confrontation” as well; the risk is that it can encourage rude and destructive behavior. In his description of “The Cabal: Valve’s Design Process” (linked from the Handbook) Ken Birdwell outlines some lessons learned from the intense interactive group sessions:

Square Pegs: practically speaking, not everyone is suited for the kind of group design activity we performed in the Cabal, at least not initially. People with strong personalities, people with poor verbal skills, or people who just don’t like creating in a group setting shouldn’t be forced into it. We weighted our groups heavily toward people with a lot of group design experience, well ahead of game design experience. Even so, in the end almost everyone was in a Cabal of one sort or another, and as we got more comfortable with this process and started getting really good results it was easier to integrate the more reluctant members.

Smaller teams initially. For current projects, such as Team Fortress 2, the Cabal groups are made up of 12 or more people, and rarely fewer than eight. The meetings ended up being shorter, and they also ended up spreading ideas around a lot quicker, but I’m not sure I’d recommend that size of group initially.

Include an expert from every functional area (programming, art, and so on). Arguing over an issue that no one at the meeting actually understands is a sure way to waste everyone’s time.

Write down everything. Brainstorming is fine during the meetings, but unless it’s all written down, your best ideas will be forgotten within days. The goal is to end up with a document that captures as much as is reasonable about your game, and more importantly answers questions about what people need to work on.

Not all ideas are good. These include yours. If you have a “great idea” that everyone thinks is stupid, don’t push it. The others will also have stupid ideas. If you’re pushy about yours, they’ll be pushy about theirs and you’re just going to get into an impasse. If the idea is really good, maybe it’s just in the wrong place. Bring it up later.

Because Valve has no formal hierarchy, or has a fluid hierarchy, they need a process like cabals to act as a crucible for making sure that all of the relevant people have been consulted and a decision is quickly communicated widely. I think there are different process needs when you are in discovery or exploration mode vs. delivery or execution mode and the nature of questions or challenges need to align with needs of the project.

It helps to make predictions and anticipate nasty outcomes.
Ask yourself “what would I expect to see if I’m right?”
Ask yourself “what would I expect to see if I’m wrong?”
Then ask yourself “what do I see?”
If something totally unexpected happens, try to figure out why.

There are still some bad ways to fail. Repeating the same mistake over and over is one. Not listening to customers or peers before or after a failure is another. Never ignore the evidence; particularly when it says you’re wrong.

Valve Company Handbook (first edition 2012)

I think this model for planning is the single more important take-away. You need to write down in advance what success, failure, and the boundaries of the expected are. In the middle as you are making the switch from discovery to delivery it’s easy to persevere needlessly or pivot endlessly or simply stall. Being clear about what constitutes a success that merits further investment, a failure that triggers plan B, and an anomaly that requires further study make it less likely you will lose your way.

So Valve was designed as a company that would attract the sort of people capable of taking the initial creative step, leave them free to do creative work, and make them want to stay.
[...]
Trust is pervasive. All of Valve’s source code is available to anyone in Perforce, and anyone at Valve can sync up and modify anything. Anyone can just up and work on whatever they think is worth doing.
[...]
To be clear, Valve hasn’t magically repealed the realities of developing and shipping products. We’re all human, so teams sometimes argue (and sometimes passionately) about what to do and how to do it, but people are respectful of each other, and eventually get to a consensus that works. There are stresses and more rigid processes when products are close to shipping, especially when there are hard deadlines for console certification. Sometimes people or teams wander down paths that are clearly not working, and then it’s up to their peers to point that out and get them back on track.
[...]
Also, don’t think that people randomly come in every day and do whatever they feel like doing.
[...]
People commit to projects, and projects are self-organizing; there are leads, but they’re chosen by informal consensus, there’s no prestige or money attached to the label, and it’s only temporary – a lead is likely to be an individual contributor on their next project. Leads have no authority other than that everyone agrees it will help the project to have them doing coordination. Each project decides for itself about testing, check-in rules, how often to meet (not very), and what the goal is and when and how to get there. And each project is different.
[...]
It’s hard to believe it works, but it does. I think of it as being a lot like evolution – messy, with lots of inefficiencies that normal companies don’t have – but producing remarkable results, things that would never have seen the light of day under normal hierarchical management.
[...]
Valve’s long string of successes, many of them genuinely groundbreaking, is strong evidence that the hypothesis that creative people are the key to success is in fact correct, and that the structuring of Valve around those people has been successful.

3 Reasons I Like Postcards

1. Cost effective -  $20 for 500 postcards
2. Don’t have to open an envelope
3. People will actually post them on their office wall!

Below are couple of our favorite postcards:

Don’t forget to add a QR code.

“If you see a line get in it, because you’re going to want what’s at the end.”
USSR aphorism

This thinking is far too often the basis for a launch message. Too many “viral launch” strategies require a prospective user or customer to tweet or e-mail friends or post a badge on their blog before they have had a chance to experience any aspect of the service.  This reminds me of a joke from the USSR era:

Two women walk by a long line of people on a Moscow street.  They reach the end and one says, “Let’s get in it!” “Why”, asks the other, “I cannot tell where it ends.” So they ask the last person in line, “What are you in line for?” He answers, “I am not sure but with a line this long it must be something good!”

There is too much focus by too many startups at the “launch page” stage on getting folks who are  “in line” to encourage their friends to “get in line” instead of providing them with an remarkable experience, service or outcome. There is no real basis for a referral and/or testimonial from someone waiting in line to use your service for the first time.  All they can do is to repeat your marketing message: the net effect is to poison any possibility of a legitimate testimonials.

Ambrose Bierce’s cynical definition from the Devil’s Dictionary seems particularly appropriate for startups asking customers in line to have faith and invite their friends:

Faith, n. Belief without evidence in what is told by one who speaks without knowledge, of things without parallel.

A handful of delighted customers are much more valuable than a collection of “followers.”

“Listen! what is life? It is a feather, it is the seed of the grass, blown hither and thither, sometimes multiplying itself and dying in the act, sometimes carried away into the heavens. But if that seed be good and heavy it may perchance travel a little way on the road it wills. It is well to try and journey one’s road and to fight with the air. Man must die. At the worst he can but die a little sooner. I will go with thee across the desert and over the mountains, unless perchance I fall to the ground on the way, my father.”  [...]

“You cannot answer me; you know not. Listen, I will answer. Out of the dark we came, into the dark we go. Like a storm-driven bird at night we fly out of the Nowhere; for a moment our wings are seen in the light of the fire, and, lo! we are gone again into the Nowhere. Life is nothing. Life is all. It is the Hand with which we hold off Death. It is the glow-worm that shines in the night-time and is black in the morning; it is the white breath of the oxen in winter; it is the little shadow that runs across the grass and loses itself at sunset.”

Speech by Umbopa/Ignosi, Zulu Chief, in “King Solomon’s Mines” by H. Rider Haggard

The “storm-driven bird” phrase echoes an observation from the Venerable Bede’s “Ecclesiastical History of the English People (London: A Revised Translation With Introduction, Life, and Notes By A. M. Sellar, published by George Bell and Sons, 1907) Book 2, Chapter 13

“The present life of man upon earth, O king, seems to me, in comparison with that time which is unknown to us, like to the swift flight of a sparrow through the house wherein you sit at supper in winter, with your ealdormen and thegns, while the fire blazes in the midst, and the hall is warmed, but the wintry storms of rain or snow are raging abroad. The sparrow, flying in at one door and immediately out at another, whilst he is within, is safe from the wintry tempest; but after a short space of fair weather, he immediately vanishes out of your sight, passing from winter into winter again. So this life of man appears for a little while, but of what is to follow or what went before we know nothing at all.”