I’m a hustler baby

Published on May 5, 2011 in Business, with 0 Comments. Tags: , , .

Out of StartupBus this year, I've seen some amazing hackers. It's a culture I've tried to encourage since we first ran the event (and more on that below on what I mean by that). But what about the non-technical people, are they hackers? Yes, but no. I came to a new realisation this March that you need more than a hacker to be successful in a startup: you need someone who can hustle. And often that's what the "business" person is in the founding team.

I'm not the first person to realise this and in fact, my friend Micah wrote an excellent post about this last July.

So what's a hustler? And actually, what's a hacker? Let's start there first -- Micah says the following:

A Hacker is more than a code monkey, who can quickly build software and find interesting ways to hack together code. Thats a developer. Thats someone who is definitely an important part of a startup, but not critical to its success. A Hacker is someone who looks the problem, and solves it in a unique and special way. A Hacker finds the process of problem solving exciting and interesting, and spends the majority of their time looking at the problem in multiple ways, finding many potential solutions.

Paul Graham wrote a great essay on it many years ago. I'm still trying to work out myself what a greater hacker is, but I would essentially define a hacker as someone who understands how to make the best decisions to prioritise their efforts on what has the biggest impact in the shortest amount of time. Meaning, a perfectionist will treat a challenge as a sum of equal parts, diligently working through all the work without regard of the higher purpose. A hacker, would think of the end goal and take shortcuts on the things that are not core to the long-term effect.

It would be like me saying I need something that looks like a clock, so that it fills a void in the background for a movie shoot I need to do. I tell you that you have 24 hours. There's nothing you can buy, and it needs to be made by you from materials on a farm the shoot is occurring.
A perfectionist would get lost in the mechanics and the quest to build a functional clock, where the hands correspond to the actual time. A hacker would get a hamster spinning in a wheel, which triggers movement of the clock's hands. Both work, it's just the perfectionist will plan on work that will take a month building it, forgetting the fact he needs to do it in 24 hours or he fails; the hacker's solution isn't a long term solution, but that's the point -- it's achieving the purpose for what is needed right now.

So what's a hustler? I think it's a different skill set. Micah defines it as follows:

A Hustler on the other other hand is a relationship builder. Someone who can build direct relationships with their customers. They arent really promoters, although they do a lot of promotion. They arent salespeople, although they do a lot of selling. They are passion people. They have the ability to articulate their passion clearly and in a way that gets other people equally passionate.

Unlike a hacker, the hustler isn't required to prioritise their efforts. Instead, what they do is extract value from, say another person (like paying customers). It's like saying a hacker is someone who smartly builds value of a product, while the hustler smartly builds value by selling the product. Hackers are good at products and process (the value creation), hustlers are good at selling and relationships (capturing the value generated).

These days in tech, they say a good designer is needed along with a good coder, but I think this is just talking about a specific skill set. Hackers might not know how to code or use photoshop: but they can get the job done. It's a mentality. And likewise, a hustler can come in very different forms, depending on the industry and the team. But make no mistake, if you're looking for a founding team, you need a least one hustler. Because without someone to hustle the customers, you have no real business in the long term.

The founder mythology’s impact on the talent crunch

Published on April 28, 2011 in talent, with 0 Comments.

In the last month since running StartupBus and reflecting on the boom in seed funding for startups and the talent crunch of engineers in the San Francisco Bay Area,  if it's one thing I'm seeing a lot more of, it's the fact that more 'entrepreneurs' exist. I've been asking myself then, what exactly is a founder?

So it's good timing to see Chris Dixon to write about the very topic where he defines a true founder from the fake one. But for me, it isn't so much about glorifying the 'founder' as some hero and everyone else 'not good enough as me' as Dixon alludes to. Rather, I'm curious: what is it that makes someone a good founder?

When I asked my friend Alisdair Faulkner a few weeks ago on this very topic, he said  that a founder is by the simple fact they are. Meaning, instead of talking -- they actually are doing something, which goes to Dixon's point. I'd argue that's the fundamental trait of being an entrepreneur, which is the bias to action. But is being a do-er a good founder?

One prominent venture capitalist I spoke to recently remarked that a lot of the startups these days are smart engineers dropping out of Google, thinking they are founders and getting funded because they can. But the truth is, they aren't good founders and it's likely they will fail.  The danger of this point, is that we won't know this, as the increasing trend for companies is to acquire startups for the talent (over the product or profits) which means these failures in capable founders are masked as successes and who in turn will influence the perception of success.

That's a bad thing and let me explain why. To give you an example in a different context of why this matters, a basic competency for management is the ability to motivate your staff. If you can't do that, you will create a significant cost to the businesses but which goes unnoticed and impacts the organisation -- like a slow growing cancer due to reduced morale. Why is this a problem? Because an incompetent manager will get promoted through their career, continuing on their path of destruction. Problems they caused get masked as other issues, and so incompetency doesn't get rained in on.

...so let's step back here. Why does it matter? Because just like the mythology of the CEO, I think we need to clearly set the expectations in the industry that behind all the status, you should be true to yourself.

Let's look at this from another angle. A good founder is usually a superstar...but  makes a terrible CEO as CEO's need to be good at delegating rather than doing it all themselves. This weakness is hidden in small environments but becomes apparent when the business needs to scale.

Fred Wilson recounts a story of what a (good) CEO should do. He claims:

Sets the overall vision and strategy of the company and communicates it to all stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank.

And that's it. Notice no word is mentioned about being a good worker. Good CEO's make terrible workers (in the sense of building the product, doing admin, etc), in the same way good founders make terrible CEO's (as they want to work on the product and neglect the management side of being a CEO). And likewise, a terrible CEO is a founder who does what founders do which is experiment when instead they should be focussed on execution and not distracting the business. This is why a startup CEO is a very different animal from a growth-stage CEO -- and once again, very different to a mature company CEO. Which is why I have a lot of respect for people who are founders and are willing to hand over the CEO role to another person, as they are making a mature decision that benefits the business, not their ego.

Anyone can be a founder, like how anyone can be a CEO -- or an employee -- but that doesn't mean they are good ones. So if starting is what defines a founder, then anyone is a founder -- but what makes a good founder is one who starts and is able to finish.  Think you're a founder or a good CEO? Maybe you are, but the good ones don't hide behind titles. Feel free to call yourself one, but at least be honest and recognise you can't be good at everything.

And who knows, maybe this talent crunch might ease up  a bit when smart engineers realise they are...smart engineers and that's it.

Minimum Viable Business

Published on March 23, 2011 in Startupbus, with 0 Comments.

The first dot com bubble was about moving the offline world online; whereas the second boom dubbed "web 2.0" was about innovating on the "user experience" and making the world a more ajaxy place with the web appear more like the desktop experience. What we're seeing now is the domination of a new trend, but this time on the capital and business side.

Minimum Viable Product -- also known as MVP -- was one of the first new buzz words I heard when I moved to Silicon Valley in mid 2009. Two years on, its become one of most over-used terms in the industry along with "pivoting" and the rest of the lexicon branded under "lean startup methodology", due to the initial insight of Steve Blank and amplified by the work of Eric Ries.

We recently ran StartupBus (coverage here) and Anthony Broad-Crawford on reflection with me when debriefing helped coin terms that described what we were doing.

Twitter _ @Elias Bizannes: "People Accelerator" and " ...

Something that we try to do with StartupBus is have people understand the most effective way to build a startup business. Not the most effective way to build a product or the most effective pitch -- but instead, the most effective way to start a business. Last year for example, I threw everyone off on the Santa Monica pier en route to Austin and had them record videos of people that they would pitch their ideas to. The conductors (alumni from last year running one of the buses this year) clearly liked that and this year, each of the six buses had the "buspreneurs" required to engage with strangers like people at bars or in the street -- getting immediate market validation of their concepts.

Minimum Viable Business is clearly a play (or is that "pivot") of the term MVP. But I think it's more important. Let's think about this: Why do you raise capital in a startup? Its so we can purchase resources and hire talent. And the reason why we have talent, is so that it will result in building and supporting a product. A product, that we hope will one day have paying customers that will sustain our operations.

So to repeat, why do we build products? So that customers will pay for value we create. But what if we could get customers paying us, without a product -- doesn't that make us no longer a startup business?

MVP is a term that has justifiably made the industry rethink about how we approach product development. But let's not forget, that a product is a way to gain customers. Just like with product development, we need business development -- and building a MVP does not guarantee you anything but a less-white elephant. If we are building a startup, let's focus on what really matters -- paying customers -- and work our way backwards to how we can create a Minimum Viable Business.

If you showed your MVB in the middle of a forest, would anyone care? The correct answer, is that they should be hunting you down to hand you cash. Who cares if you have a lean product, it's much better for you to have a phat one that generates passionate (paying) customers. Call me crazy, but that's just how business works.