Environments

After software, the most important tool to a hacker is probably his office. Big companies think the function of office space is to express rank. But hackers use their offices for more than that: they use their office as a place to think in. And if you’re a technology company, their thoughts are your product. So making hackers work in a noisy, distracting environment is like having a paint factory where the air is full of soot.

-Paul Graham (Great Hackers)

I don’t think you can even get started down the path of building something for the Internet without the right working environment. Having the right place to work from has long lasting implications. Maybe 5 or 10 years before you start a business, its this environment that becomes conducive toward tinkering and learning the technical skills required to get started.

Every developer knows that I’m talking about. Everyone with proficient technical skills (and design skills) has spent hours reading stack-overflow, books and Photoshop technique tutorials. You need to be able to concentrate for hours on end to be productive.

Having the right environment early on sets the stage for a faster learning and growth in the long term. I’m referring to the stage of life where Steve Wozniak would tinker in his garage or the environment in which Bill Gates was able to get enough code under his belt (10,000 hours according to Outliers) before starting Microsoft.

Its that early stage environment that enables the seeds for success to be planted. If you’re constantly being distracted and can’t find a peaceful working environment in your office or home, do something about it. You need a place where you can spend extended periods of time focusing on tasks without distraction while hacking away at stuff. This is how it all starts.

When I started building Lind Golf, I had an awesome working environment. I was working from home at the time. I was on my own, no distractions during the day and I was able to punch out serious amounts of work. I look it for granted at the time and assumed that that level of productivity was the norm. That was until I moved into an office.

Moving into an office slowed down productivity dramatically. Probably because I had people around me, distractions nearby and I was continually being asked questions. We had an open plan office and everyone sat quite close to one and other. The business was in an operational state at that point, so it wasn’t in startup mode and I didn’t need to be super focused and creative all the time as is needed when you are building a product or something from scratch so I dealt with the situation, however the one thing I learn’t from that is how important having the right environment is when you are starting something.

I find it incredible that companies like Facebook sit their engineers in an open place office. Engineers often escape by putting on a pair of headphones and cranking the music so that they dont get distracted. Its hard for anyone to get into the zone when they are surrounded by distractions.

While building BuyReply I’ve been in my own office, with no distractions whatsoever and I’ve managed to be really productive and have been able to get a lot done in a relatively short amount of time. Our devs work in the same kind of environment.

Both times I’ve started web businesses, they’ve been from relatively peaceful environments without distractions.

It’s also wise to invest in the best equipment. Dual screens for all staff, super fast computers and Internet etc. You need this stuff. It’s a great investment if you are coding, designing and building for the web. The second most important piece of equipment are chairs. Its better to spend $1000 on a chair and $50 on a desk if you have to choose. Get one of these. It will last forever and they are super comfortable.

In these two videos Campaign Monitor and Fog Creek Software show off their highly productive working environments:

Seeing through Schlep Blindness

Paul Graham’s latest essay spread through the startup world like wildfire. He explains why we shy away from big audacious ideas and why younger founders are often more successful than their older counterparts due to the ignorance and naivety that fuels young and first time entrepreneurs. He calls it Schlep Blindness:

“There are great startup ideas lying around unexploited right under our noses. One reason we don’t see them is a phenomenon I call schlep blindness. Schlep was originally a Yiddish word but has passed into general use in the US. It means a tedious, unpleasant task.” – Paul Graham

Here are a few ways to make the inevitable Schlep, less of a Schelp.

Stay Foolish

Founders are often in their early to mid twenties. They don’t have the life experience of those in their 30′s and 40′s. They haven’t had to push shit uphill before and underestimate what it takes.

You don’t know what you don’t know…

Like the often said, but undervalued adage of “If I knew then what I know now…” . Would you do things different the second time around?

If you are older, or doing it again, the key take-away here is not to do things different the second time around. It is to remain naive and foolish, no matter how old you are or how successful you become. If it works for the young founders, then older and wiser founders should tackle challenges head on with the same level of naivety even if it seems audacious and foolish at the time. This is what Steve Jobs was trying to tell us to do at the end of his Stanford commencement speech.

“Stay Hungry, Stay Foolish” and Paul Graham explained the psychology of this thinking beautifully.

“Go as far as you can see; when you get there, you’ll be able to see farther.”
- JP Morgan

You’ll be surprised how far you can go when turning back is not an option.

Don’t start until you have a big idea

So many founders start working on things because they want to be a founder however I think its smarter to favour the sidelines until you’ve found a big idea in a large market that you are passionate about which you can apply your strengths to across a 3 year period. Spend time reading, networking, visiting incubators, watching presentations and so forth. Don’t settle until it feels right. You’ll know when its right because the size of the idea will keep you up at night and you’ll have no other choice but to make it happen. Anything less may be a distraction and unworthy of pursuit.

Love Schlepping

Surrender yourself to the fact that its going to be painstakingly tough. Surround yourself with people who love the Schlep. Ensure your team are focussed and good at their craft and passionate about creating something great. It’s not a Schlep if you love what you do – most of the time. There are always going to be ups and downs but that’s inevitable. It comes with the turf. If it was easy, everyone would be doing it.

Have a sense of urgency, but don’t rush

Jobs, Gates, Ellison, Larry Page all came from humble beginnings. Vinod Khosla started with nothing in India and begged his way into Stanford. He now visits his home town in India on a private jet. So much is achievable in a lifetime, even half a lifetime. Think big, think long term. We often fail to realise that there is a lot of time to get things right. Get perspective. Have a sense of urgency but don’t rush. It took 4 years for a competitor to arise to challenge Facebook (Google+) . You might think people are chasing your tail but it’s not a reason to think small.

Don’t think about the exit

Build something that has the ingredients to be acquired – but with the mindset that you’ll never sell it. When you are building a long term business you focus on different things to when you build and flip.

Break audacious tasks into small goals

Schleppers are doers. They understand that life rewards action. They turn mountains into molehills. Break massive complex problems into  small achievable parts and don’t think of it as one big scary task. Just get things done. Nothing great was every created quickly. Things take time.

Think Big

Graham advises founders to think big. To solve audacious problems, not lofty ones. In some form or another every VC website mentions that they are looking for “highly disruptive, scalable business models that solve meaningful problems in $1b+ markets”. You should be aiming to do the same.

Whether your business is destined for greatness or mediocrity, it can take 3 years to find out, and for this reason you should pick a big market. Here’s why:

Entrepreneurs often forget that they are in this to make money and making money takes time, especially if you are starting with nothing as most startups do. If you’re committed to building a company (not a social app that gets 20,000 downloads then fizzles) then you have to maintain a long term view from the outset. All startups take time to get off the ground. The product  build will take 6-9 months, product/market fit iterations will take another 6-9 months, then you can start scaling the business which can go on forever.

If you’ve done all this work after 3 years but your total addressable market is a $100m market and its already competitive, then chances are you’ll find it difficult to build a sizable business. That is why you need to think big and think different so that you are first to market with an innovative solution. You want to get to the 3 year mark and realise you’ve only just started on your journey because the market is that massive.

Keep up-skilling yourself 

Do stuff yourself. Mark Cuban started by setting up computer networks. Bill Gates spent 10,000 hours coding before he started Microsoft. You’re not wasting time if you’re building your skill base, even if you think you are. You’re also creating a fall back if things don’t work out. There is no better way to learn and to understand the possibilities of your craft than to apply yourself to it. Get books, manuals, download tutorials. Start with tiny projects. A one page website with a form. Then add to that. Then add to that. You’ll surprise yourself in a shorter time than you think, and it won’t feel like Schlep. Learning new skills along the way adds another dimension of productivity to the journey.

If you are scared and feel like you’ve bitten off more than you can chew, then that is a good thing because you will grow from it and you will make it work especially if you have no alternative fallback. It means you’ve been foolish enough to dare to do something that most others have not and, for that reason, you are already ahead of the curve.

 

Understanding SOPA

If you don’t understand SOPA, here is an excellent explanation by Sal Khan:

MBA or Learn to code?

I think there is an interesting discussion to be had around the idea of learning to code vs getting an MBA. Both are very different disciplines, but both are applicable to todays business world.

The path that you take I believe depends on your career direction. If you are entrepreneurial and want to pursue a career in startups versus working in the corporate world, then you should learn to code. If you want to work in corporate, then I would advise to learn to code as well. Why? Because software is eating the world. Because as a founder I know where the real value lies. It lies in being able to build stuff for the web. Would I hire an MBA to do this? No. Would I hire a developer. Yes.

An MBA is a soft skill – if you can call it a skill. It is not even that. It is an expensive break from reality that will yield you a strong network and theoretical insight into the business world, but until you actually get out there and experience the business world for yourself, it is still just theory.

Coding on the other hand is a hard skill. Even if you are a novice, at least you can start to build things. You can innovate. You can build on that skill over time and get better and getter at it at your own pace and in your own time. It’s hard to quantify progress like this from an MBA. And when you have the light bulb moment, you are the master of your own destiny. You can use your coding skills to build a prototype, show it to some customers and then assemble a team to take it to the next level. And even if you hire people around you to code (as is my strategy) at least you’ll be able to talk their language.

Another point around an MBA (coming from an entrepreneur) is that it doesn’t matter how big your network is or how many friends you make or how well you can build a discounted cashflow model – at the end of the day, in the startup world all that matters is building a great product and putting it infront of the right customers. If you build an excellent product with product/market fit then people will buy it, regardless of whether you spent $160,000 and 2 years of your life to go to school with them.

I’ve chosen a career in the startup world and I can tell you without a shadow of a doubt, with 101% certainty that MBA’s are completely useless to early stage ventures. The perfect example are the Winklevoss twins in the social network. They are your typical MBA personality. But Zuckerberg won because he could code and had a stronger vision. All that matters in the first year or two of a startup is building something that can be used by a customer, and getting customers to use it. That is all that matters.

There are three simple ingredients to a startup:

  1. A very strong product visionary
  2. A good user interface designer
  3. Web application development skills

Usually these roles can be filled by a founding team of two. It’s the most common scenario and has proven to result in the highest level of a success.

I believe that an MBA provides very little benefit to your immediate career if you are in the startup world. You are better off developing your design or coding abilities. If you dont want to code but are more creatively minded, learn Photoshop, HTML and CSS. Make mockups, show your developers a vision that they can build. That is valuable.

I also view an MBA as a deferral of reality in some situations. When I hear that someone is doing an MBA it reminds me of people who travel to South America for two years. It makes me think that they are “figuring things out” – particularly when it comes from someone who considers themselves to be a strong entrepreneur. If you are really serious about executing on a vision, the last thing you want to do is waste 2 years pushing papers around in classroom (and in our world, 2 years is a lifetime). It is a productive sabbatical, but that is what it is at best – particularly if you are on fire. A better use of 2 years would be to work for a startup. I think you’d learn more and it would cost you less. Even if you worked for free!

An entrepreneur who is truly on fire and excited about their company will view an MBA as a distraction and loss of focus. That is not to say that an MBA is not useful. Maybe I’ll do an MBA at some point in my life, however if I do an MBA it would mean that I’m doing it because I haven’t found the next big thing to work on. That isn’t a bad thing either. Ideas and enthusiasm comes in waves and between waves, why not study if you can afford to. It would also mean that I haven’t learn’t to code yet, because I would rather learn to code (at this stage of my life) before getting an MBA.

Regardless of how you look at it, you’ll always learn more at the coalface of a business than in the classroom and you’ll be more valuable to a startup if you can develop than if you have an MBA.

Your thoughts?

Why patents are a big f******* problem

We’re building BuyReply and we are using processes and algorithms in ways that have not been used before in eCommerce. This means that we have something novel and unique. How do you protect your idea? You patent it. I’ve been reading up on patents and I really disagree with them. Here’s why.

What I view to be the single biggest problem with patents is that patents are awarded to anyone who thinks of an idea. All they need to do is think of an idea. They do not need to have the skill or resources to execute. They just have to invent something in their mind. For example some bright spark lodged a patent at the USPTO for teleporting:

“A pulsed gravitational wave wormhole generator system that teleports a human being through hyperspace from one location to another.”

Is there even a definition of hyperspace?

We all know this is impossible to achieve. Hopefully someone will prove me wrong in my lifetime, and I’ll be able to wake up in Sydney, work in New York then go to Bondi Beach for a swim on my way home however the problem here is that if this happened, JOHN ST. CLAIR of 4A52 KINGS COURTSAN JUAN PR 00911 US will have to be paid a massive royalty by the genius who pours in their blood sweat and tears to invent and commercialise the teleporter (even my spell checker puts a red line under the word teleporter because it doesn’t exist).

Why will the commercialiser have to pay a royalty? Because Mr St. Clair filed an early patent from an idea he was able to dream up, but not able to execute. In my mind, this is not smart. It is cheating. It’s not business. It’s taking short cuts. It’s unfair.

There has to be a correlation between ideas and execution otherwise those who can execute get shafted by those who cannot.

Filing a patent requires around 1% of the brainpower, tenacity and drive as is required to actually bring an idea to market. The other 99% of the work comes from making the idea happen. If all we did at Lind Ventures was Dream and Think, we wouldn’t get anywhere. That is why our slogan is Dream. Think. Do.

Todays patent system stifles entrepreneurship and innovation and creates scavenger industries around patent trolling, wastes shareholder money forcing capital and time to be spent on protecting patents, and acquiring IP. A waste of billions of dollars that could be invested in creating jobs, advancing technologies and building stuff that benefits society and furthers our wellbeing without having to fend off B players who can’t execute but have cash to play games in court.

What I believe would solve this problem is this:

  1. Patents can only be submitted with a commercialisation plan that demonstrates a path to commercialisation, with a deadline.
  2. The patent office should audit patent holders to determine if they are using their patents for commercial purposes and should expire patents held by companies that are not.
  3. Patents should not be transferrable between companies unless the receiving company can demonstrate an ability to maintain or further the commercialisation responsibilities of the vendor.

I welcome your commentary.

Social Recognition Vs Brand Recognition

I think there is a shift taking place in the way that people are being influenced to do things.

Before the social media revolution we would be guided by standard broadcast media. TV, Radio, Print, word of mouth, in an attempt for brands to build brand recognition.

However I am beginning to find that increasingly being lead by influential people in my social graph – e.g. Twitter, Blogs, Facebook. I get to follow people I respect via the social graph and blogosphere and I get to hear first hand what they are reading, writing, buying, how they are living and what they are doing on a daily basis in their lives. In 140 character bursts.

If you join the dots via someone’s public Internet profile (blog+twitter+website+flickr+more) you can make good sense of how a particular person thinks, how they spend their time, what they value, what interests them and what makes them tick.

When I see something cool on twitter or a blog written by someone I respect, I immediately value their motivation, opinion and taste and it removes the need for me to have to validate the subject myself.

If X likes Y and I like X chances are I’ll like Y too. I’ll often buy/try/do Y based on this alone.

Recommendations via your social graph are infinitely more powerful than any traditional media because they include an element of human thought and a removal of bias when someone makes an authentic recommendation, especially if you have consciously decided to follow them out of respect for their opinion in the first place. This concept coupled with the virility of the web is like word of mouth on steroids^9.

Services like twitter let you know what the cool kids are doing as soon as they do it. Stuff catches on and spreads really quickly.

Whether it’s a movie, a software download, a photograph of an experience or an article an influencer has read, or a movement to topple a government…

I find myself being influenced and inspired on a daily basis to read, buy, do and try stuff by people I’ve never met in person but feel I know well enough to respect via their online identity and brand. This is what brands attempt to achieve via celebrity endorsements however in the uber-connected world we now live in, I’m being influenced by the guy next door, not Lance Armstrong.

Is this happening to you?

Focus (like a one eye’d dog in a meat factory)

I want to talk about focus because I think focus is one of the most important ingredients for success. Focus is important at an operational level and at a holistic level of your company.

What I mean by that is that in order for a small team to be productive and build something amazing, it requires a day in day out single-mindedness of vision by the founders and team to get things done. To build something, to ship on time with attention to detail and without compromise. This is the kind of focus most people think of when they think of being focused. The getting stuff done kind of focus. Money cannot buy this. It’s inherent in the right people and you’ll know it when you see it. It’s easy to recognise when an entrepreneur is focussed. They are singled minded and obsessed. They dont deviate and they know where they want to go and how to get there and they exude that energy. You feel it by just being around them and it rubs off on the team.

Another important kind of focus is focus at a holistic level – at the company, or product level. This kind of focus means being able to say no, and understanding your limitations and strengths as a company and team. It means simplifying your offering and cutting back to your core competencies and working on what you originally set out to achieve, eliminating peripheral ideas and distractions and allocating your limited resources to the tasks that are going to generate the best results.

In small teams, focus is crucial. One person can only do so much. Three people can only do so much and five people can do a little more. But if you want to do something special as a team, everyone has to be focussed on a simple idea lead by a strong vision. This is how all great companies start. It can’t happen any other way.

The smaller your company, the more focussed you need to be however even large companies like Google are known for keeping their teams small – usually  7 or less on a new product, but 3-5 ideally. They understand that in order to get things done you need a focused group of smart individuals and they emulate this environment within a larger corporate structure.

Some examples of focus:

Warren Buffett: Buffet is well known for only investing in his “circle of competence” and investing in companies he understands. This is why he does not invest in technology. Buffet says no to what he doesn’t understand well and doubles down on bets he understands well.

Apple: Apple have a very narrow range of products for a company of its size. Macbook, iMac, iPhone, iPod and iPad. Thats it.

Dell on the other hand have 5 laptop ranges (Inspiron, Inspiron R, Z series, Alienware, XPS), 5 Desktop ranges (Vostro, Optiplex, Precision, XPS, All-in-one) in a number of variants per machine with no less than 6 variants of the all-in-1 form factor. Each range needs designers, engineers, manufacturing resources and marketing resources. It means that resources are spread thin. It is also likely that they are making products that are cannibalising some of their own products.

Apple in comparison is much more focussed and I bet that the margins of their hardware business are significantly higher than Dells because of this. More focus = lower overheads = more profit.

Facebook:  In this interview you hear first hand from Sheryl Sandberg and Mark Zuckerberg what being focused means to them. Watch from 1:55min:

Sheryl Sandberg: “We are focused on doing one thing really well. We are still, as we grow, doing exactly one thing”

Mark Zuckerberg:  “Because building games is really hard. And what we’re doing is really hard. And we think that we’re better off focusing on this piece. I think that building a great game service is really hard. Building a great music service is really hard… And we just believe that an independent entrepreneur will always beat a division of a big company.” via Smart Company

 Sandisk: Eli Harari, founder of Sandisk has the following to say about focus:

Many companies invest resources in multiple research options since they are not sure which one will win. Eli’s philosophy was unique. Among the various research options possible, he would pick the one that he thought would win (based on his technical assessment) and then invest all his resources on that. According to him, if one research option has a 10% chance of winning and another research option has a 10% chance of winning, by investing in both, you get a 10%*10% = 1% chance of things working out, since you have divided up your (limited) resources and cannot get momentum into your project. This strategy paid rich dividends for SanDisk, and was successful due to Eli’s phenomenal technical expertise. Via Monolithic3D

Lind Golf: At Lind Golf we had the customer base, suppliers and expertise to build the business into a general retailer of golf equipment. We even owned www.golfclubs.com.au and could have created an online superstore out of it. This would have broadened our offering and increased our addressable market however we purposely focussed on building the Lind Golf brand. Because of this we were able to sell the entire business as a business unit and brand to another company.  Maintaining focus was crucial.

One of my mentors once told me to “focus like a one eye’d dog in a meat factory”.

And this is why one of our values is focus.

 

Boom!

The Year Ahead

The year ahead is going to be a big year. I’ve spent the last 3 months designing and architecting the first web application to be developed under the Lind Ventures umbrella and we begin coding this week. It feels great to be a creator and it feels great to be building a technology company, as apposed to an eCommerce business which is really a retail business at heart.

There is nothing more fulfilling to me than allocating personal capital to an idea I’m passionate about, having a high degree of creative contribution toward turning the idea into a reality, and making it come to life with a sense of urgency and excitement – then driving the long term growth of the idea into a profitable company. I like the creativity, I like the risk and I like the innovation. It makes me feel alive and gives me a sense of purpose. I believe what we are building is a category defining concept that can fundamentally increase the pace of commerce at a global level and I’m excited to make it happen.

I also feel that there has never been a better time to be a technology entrepreneur. The rest of the world is crying, but tech is thriving and it will continue to do so into the foreseeable future.

In the last quarter I’ve surprised myself with my ability to build user interfaces considering I’ve never had any formal design or UX training. I’ve become a bit of a Photoshop wizz having managed to design all of the BuyReply front end myself – pixel by pixel. In the past 3 months I’ve created 158 screens for BuyReply including the:

  • BuyReply Marketing site
  • Consumer Mobile App (to be implemented in HTML5)
  • Consumer Web App
  • Merchant Web App
  • Internal Administration Web App


I’ve also created a lot of documentation including a 70 page functional spec and the database schema, which coupled with the screens, provides a very succinct blueprint of what is required for my team of developers to build the application. I’ve assembled an amazing team of developers (4 in total) and I’m in discussions with a kick-ass technical co-founder. All this has been achieved since the end of September. The pace of execution has been swift and I plan to maintain that pace.

I feel lucky that I can take an Internet concept in my head and turn it into a set of application screens relatively quickly. I think this skill is really useful if you want to be an Internet entrepreneur.

There is a lot of focus on founders being able to code however before you start coding, you need a clear vision. I believe its more important to have a clear vision (down to the pixel level of detail) of what it is you are going to build. Approaching the application from the front end first might just be my own style of “getting things done” as I’m playing to a skill and strength I have, then covering my weakness (inability to code) by finding great people who can code well to take responsibility for that. I can probably learn to code, but I’d rather leave it up to the ninjas.

Coding is where the rubber meets the road on the web however I believe you can get very far with a technical background and an eye for design, usability and Photoshop skills.

In 2012 we will launch BuyReply with an aim go live in May. You can register your interest here and we will notify you when we go live: http://www.buyreply.com.

In January 2011 while twiddling my thumbs at OO.com.au, I decided to start this blog. I love writing here and will continue to do so into 2012. One of my first posts was entitled “What Next?” and I made a list of 10 attributes I wanted my next venture to fulfil. They were:

  1. No Stock
  2. Software as a Service model
  3. Annuity Business / Revenue
  4. It should be a Utility/Productivity tool
  5. It should develop a strong dependancy by users
  6. It should not require critical mass
  7. It should serve the long tail
  8. It must be truly scalable
  9. It must be fun
  10. I want to have a high level of creative input

Looking back on this list a year later, I believe that BuyReply will satisfy all of these traits and more.

Bring on 2012!