Tag Archives: Stanford

Startup Vision: Paradox of Consistency vs. Opportunity

Startup VisionThe world is full of paradox, like this one. Here’s research on startup vision that shows “The tech landscape is lush with entrepreneurs whose success blossomed only after the founders had modified or even abandoned their original vision.” That makes sense when you see examples and details. But wait – what about the idea that the best startups are driven by clear vision? Doesn”t the one contract the other?

That’s business. Hard and fast rules don’t work often enough. You can’t just follow lists of best practices.

The thought comes from reading The Risk of an Unwavering Vision | Stanford Graduate School of Business. That piece summarizes research by William P. Barnett, a professor of business leadership, strategy, and organizations at Stanford’s Graduate School of Business; co-authored with colleague Elizabeth G. Pontikes of the University of Chicago. They decided to gauge entrepreneurial success rates by researching the early choices made by software entrepreneurs operating in 4,566 organizations in 456 different market categories over 12 years.

Successful founders change the startup vision

For example (quoting from the article above, describing the research) …

“Facebook became something quite different from the Harvard-specific social connection site created by Mark Zuckerberg. Airbnb? That short-term housing rental juggernaut started as a way for people to find roommates. What eventually became the ride-sharing app Lyft originally offered carpooling software for large companies.”

Barnett adds

“It’s almost always the case that the greatest firms are discovered and not planned.”

Following the crowd doesn’t often work

The post highlights Barnett saying:

“If you want to find a unicorn, listen for the buzz and run the other way.”

And adds the details:

“Barnett and Pontikes found that entrepreneurs who were willing to adapt their vision and products to find the right market often did the best. They also found that those who followed the herd into perceived hot markets, or “consensus” entrants, were less viable in the long run than those who made “non-consensus” choices by defying common wisdom and entering markets that were tainted by failures and thus regarded as riskier.”

Why is this paradoxical?

But wait. Doesn’t vision drive most successful companies? I’ve written in this space about what I call values, which are related to vision, with the idea that clear and consistent values can drive success. For example, from an older post here titled Build a Mission:

… you and I know companies … driven by missions. People can believe in a mission. It gives the team power and momentum. People are happier when they work on something they believe does some good to somebody.

So my conclusion is – and I’ve written this previously – there is no such thing as universal best practices. It’s all case by case.

Reflections on MBA experience

Gilded GraduationThe prestige of the MBA degree is tarnished quite a bit since I got mine in the early 1980s. And that’s for pretty good reasons. With the world of startups like it is, and the progress of high tech, there are some good arguments against stopping a career for two years to go back to school. Still, my two years with the MBA were the right thing for me, for my family, and for my entrepreneurship. Everything is case by case.

So I find myself reflecting on my own MBA experience, and MBAs as a stereotype, and what the MBA degree might or might not mean today. The following thoughts come in no particular order.

  1. The curriculum used to be a lot more about business analysis than about doing business. Things have changed for the better though, because now entrepreneurship is all over the MBA world now, and MBAs are much better off for it. When I was at Stanford University the entire “small business” curriculum was one course — an excellent course, but still, just one — taught by Steve Brandt.
  2. I screwed up the recruiting process myself and chose the wrong job for the wrong reasons. That story is in this blog as a stupid mistake. I was hardly the only one. I saw somewhere that 80% of the MBAs of my time changed jobs in less than a year after graduating.
  3. The two years I spent studying business were among the best of my adult life. My wife and I and our three kids moved from a fifth-floor apartment in Mexico City to a townhouse on campus at Stanford, for half the rent. I enjoyed the classes immensely.  Our kids had great elementary school on campus. We needed only one car.
  4. I had a friend a few years older than myself who already had the MBA degree when I met him, before I had thought of it. He always said “it’s just a union card. You get it so they pay you more.”
  5. After the first quarter as a full-time student I couldn’t take the pressure of the bank account going one way only, withdrawals and no deposits. So I worked as a market research consultant with Creative Strategies for the rest of my time studying. I made a  full-time consulting income, but  because I was a an early adapter of technology and I did most of my work at home, it was still a good time for family.
  6. By the end of the two years, some of my classmates were disappointed that they had been taught business analysis more than business. I wasn’t disappointed at all, I had learned what I went there to learn. I expected them to teach me stuff that lent itself to chalkboards and lectures and readings and they did.
  7. I wasn’t the typical MBA student. I was 31, married, had three children, and had supported my family for years as a business journalist in Mexico, making more money freelance than on salary. I figured that whether I knew how to deal with people or not, they weren’t going to teach me that; they were going to teach me what I wanted to learn, the analysis.
  8. Getting there was hard for us. It involved quitting a fairly good job in Mexico City and moving back to the United States without a job. I had just won a long-sought-after transfer to Hong Kong, which I had to turn down. That was a hard choice. I’ve never regretted it.
  9. It was expensive. I paid my own way.
  10. Samuel Johnson said that the ultimate happiness is anticipation of happiness rather than realization. During those two years studying, family life was close to idyllic for us so the present was really good, and the grapevine kept telling us that the future would be much better.
  11. It was a lot of work, but it was good clean work, and it made sense.
  12. I’ve dealt with some young people fresh out of business school with shiny new MBA degrees who were full of themselves, ignorant and arrogant. I’ve dealt with some who weren’t. Generalizations suck. Still, generally you want an MBA 10 years later, not in his or her first job out.
  13. I hated the group projects. I had a family to go back home to, and consulting work to do, and group projects had too many people who liked the social aspect of group meetings too much. I usually tried to negotiate a chunk of the project we could separate from the rest so that I could do my part on my own, without going to meetings.
  14. I had been doing business-journalist work for several publications, of which the most well known was Business Week (as McGraw-Hill World News correspondent for Mexico). I was amused sometimes that some of what I did after the MBA was very similar to what I’d done before the MBA, but for much more money.
  15. MBA studies are best for people who’ve had significant work experience first. I don’t know if that’s three years, or five, or seven, or what. I had been out of school eight years when I started.
  16. What’s with the people who put the letters onto their business cards and behind their names on websites, like they were CPAs or doctors or something? Isn’t that awkward? I always think if it isn’t MD or PhD or maybe CPA (for commercial reasons) then it makes me nervous to see it there. Is that just me or what?
  17. Final thought about MBAs: I deal today with a collection of very smart people between the ages of 30 and 40 who have picked up so much business savvy in 10 or more years of high-tech business that I don’t think they should go back to school and get an MBA degree. I do wish there were a test somewhere, like the GED for high school, so these people could take the test and get the [expletive deleted] MBA seal of approval they deserve.

So how to conclude? It’s up to you, and your situation, whether it’s right for you. And, at the very least, don’t hold the MBA against those who have one.

Productivity Tip: Walking Meetings. In the Park.

File this one under the general category of things business owners can do to preserve physical and mental health, despite the rigors of running a business. It goes along with getting regular exercise, and shutting down every so often out of range of devices. Do as many meetings as you can walking, instead of sitting. And when you can, walk in a park, with trees and bushes, noty on a sidewalk.

I know several CEOs and team leaders who conduct walking meetings. Steve Jobs, was known for his walking meetings. Facebook’s Mark Zuckerberg has also been seen holding meetings on foot. Consider that for your business.

Obviously we can’t all go take a walk during the day, and much less a walk in nature; or even a park. There’s the job thing, and working for a living. Still, last week I happened upon two different research studies related to walking. And one part of a normal work day that’s basically just talking is the meeting. Especially one on one meetings.

Where you walk matters

First, Stanford researchers find mental health prescription: Nature. I summarized the findings in the image below.

Amazon Park Eugene Oregon

I realize not everybody has a park within striking distance; several of my loved ones live and/or work in Manhattan. Still, lots of us do, and even some Manhattan offices are close to Central Park, or a riverside park. The picture here is where I walk, in Eugene, Oregon. It’s two minutes from my office.

The study, by Gretchen Daily, Gregory Bratman, and two others, looked at comparing the value of a walk in nature vs. a walk on city streets. The brain reacts differently to each, and the study found advantages for walking in nature.

In the study, two groups of participants walked for 90 minutes, one in a grassland area scattered with oak trees and shrubs, the other along a traffic-heavy four-lane roadway. Before and after, the researchers measured heart and respiration rates, performed brain scans and had participants fill out questionnaires.
The researchers found little difference in physiological conditions, but marked changes in the brain. Neural activity in the subgenual prefrontal cortex, a brain region active during rumination – repetitive thought focused on negative emotions – decreased among participants who walked in nature versus those who walked in an urban environment.

Walking and creative process

Friedrich Nietzsche wrote: “All truly great thoughts are conceived by walking”

A second, completely different research study (despite the similar them), Stanford Study Finds Walking Improves Creativity, looked for a connection between walking and creativity. Done by Marily Oppezzo and Daniel Schwartz, this one set up experiments comparing results from people walking vs. people sitting. This one found no significant difference between walking inside vs. walking outside, but noted a big advantage to walking vs. sitting.

Here are some interesting details

The overwhelming majority of the participants in these three experiments were more creative while walking than sitting, the study found. In one of those experiments, participants were tested indoors – first while sitting, then while walking on a treadmill. The creative output increased by an average of 60 percent when the person was walking, according to the study.

Think about it. Better yet, take a walk, and think about it while walking.

Should People Design Their Own Jobs

hands and puzzle iStock_000049265406_websizeI just ran across Should Employees Design Their Own Jobs? on one of the Stanford Business School sites. It reminded me of what I saw quite often while running my business – employees design their own jobs, whether you like it or not. Maybe, if you do it right, you can guide, control, or prevent it happening. But, all things being equal, it will.

The Stanford article is about job crafting, which is…

… a set of techniques for helping you reconfigure the elements of your job to spark greater engagement and meaning.

The article talks about three kinds of job crafting:

Task crafting is about retooling the activities included in your job, relational crafting is about revamping your interactions with others, and cognitive crafting is about reframing how you view your tasks and relationships.

Experts like the idea. The article says …

Participating in a job crafting workshop led employees to be significantly happier and more effective in their jobs six weeks later, based on ratings from their peers and managers. Although some job crafting may be good for the employee but not his or her company, our research suggests that, on average, it’s good for both. … Job crafting may also help facilitate creativity and innovation. It’s very difficult for a company to stay innovative if everyone’s job stays the same. We are creatures of habit, and organizations tend to be bureaucracies that impose order and consistency. The default will always be for people to get stuck in the day-to-day and have a lot of trouble taking a step back and seeing opportunities for reshaping their jobs. To quote Karl Weick, creative ideas come from ‘putting new things in old combinations and old things in new combinations.’

What I found in starting, running, and growing a software company was that employees tended to mold their jobs to match what they wanted to do.

The best tech support rep I ever had was a natural talker, extremely empathetic, who really liked people. He was just plain happy to be on the phone, one-on-one with somebody he’d never met, helping that person solve problems. Eventually he took that likability into sales and business development.

Then there was a woman who worked for me whose job started as bookkeeping. She liked organization, she liked arranging tasks, and she liked knowing the details of whatever was going on. She became bookkeeper, controller, and personal assistant.

I had somebody managing tech support who loved databases and programming databases. Not surprisingly, his leadership in tech support led to lots of customer programmed databases that were precursors to some of the support group tools that software companies now buy.

And look at small business owners and entrepreneurs. Some of them are personal leaders who loved meetings and motivating people. Others love marketing and strategy. Some love product. Most of them turn their job into what they like doing. And, as they do it, they believe step by step that is the right thing to do. Furthermore, given human nature, and strengths and weaknesses, usually they are right.

Top 10 Mistakes Made by Entrepreneurs

For some really good startup advice, and lots of good reminders, here is Guy Kawasaki’s Top 10 Mistakes Made by Entrepreneurs, on YouTube, courtesy of Stanford Business.

I don’t agree with everything Guy says here but I really like his being comfortable with his own opinions, and how he presents them as opinions, not fact. This is a really good one for startup founders and in a classroom situation, for teachers of entrepreneurship to share with students. 

 

(If for any reason you don’t see the video here, click here for the source on YouTube.)

When is the Right Time to Start a Company

I really like this 2-minute explanation Stanford’s Entrepreneurship Corner: Steve Teig, Tabula – Right Time to Start a Company. He’s clearly focusing on tech companies and the web, but the principals apply elsewhere if you use your imagination.

If for any reason you don’t see the video here, you can click this link to go to the original on Stanford’s scorner.

Brave New World Options for Entrepreneurship Education

Take a look at this list: 20 Essential Open Courses for Budding Entrepreneurs. You’ll see Stanford, Carnegie Mellon, Rice, and — between the lines on that one — MIT, among others. Mark Juliano’s Entrepreneurship and Business, Chuck Eesley’s Technology Entrepreneurship

The post in question lists mainly general business courses. Aside from entrepreneurship, they have finance, financial theory, business communication, a couple courses on ethics … it’s not my ideal curriculum for entrepreneurs, by any means. But it’s a fascinating alternative to the more traditional warming-the-seat options.  

I’ve posted here occasionally on business education: try this link for the complete collection. The executive summary is: I’m in favor of it, but only when done right. I’ve got the MBA degree myself but I know lots of people doing just fine in business without it. And times have changed, no doubt. 

I’m thinking that the online availability is a huge step forward; except that it isn’t a step, but rather a series of steps that have been happening for years, in stops and starts. I see the rise in validation, accreditation, and certification of online learning, all of which are part of the problem. 

One of my mentors, a fellow Stanford MBA from a few years before me, always referred to the MBA as “a union card.” He would add: “it means you get to charge more.” 

I’ve never believed viewing the degree as merely that. I always see it as being about the learning involved. The growing acceptance of these alternatives force us to think about whether we’re doing it for the learning, or for the union card. Or not: because you can see in this graphic, some of these online courses come with accreditation and validation. 

Here’s something to think about: when you deal with somebody whose education includes the online courses, how much credence do you give that? As an investor, looking at a business plan? As a potential employer? As a partner? 

Which is Worse: Making a Mistake or Losing an Opportunity?

What a great thought: how people approach failure is a key to success. That comes straight from Why Failure Drives Innovation, an article by Baba Shiv, Professor of Marketing, published in the Stanford Graduate School of Business news page. Consider this:

“Failure” is a dreaded concept for most business people. But failure can actually be a huge engine of innovation for an individual or an organization. The trick lies in approaching it with the right attitude and harnessing it as a blessing, not a curse.

In his article, Prof. Shiv pits fear of making mistakes against fear of losing opportunities. 

He says most individuals, managers and corporations live with fear of making mistakes:

In this mindset, to fail is shameful and painful. Because the brain becomes very risk averse under this line of thinking, innovation is generally nothing more than incremental. You don’t get off-the-charts results.

The entrepreneur, however, is more worries about losing out on opportunities: 

Places like Silicon Valley are full of type 2s. What is shameful to these people is sitting on the sidelines while someone else runs away with a great idea. Failure is not bad; it can actually be exciting. From so-called “failures” emerge those valuable gold nuggets — the “aha!” moments of insight that guide you toward your next innovation.

I like that a lot. I’ve written often that one of the most important traits for entrepreneurs is being able to live with mistakes. This makes perfect sense to me.