The Network Garden - Mark Sigal's Blog

The Nine Essential Truths of Entrepreneurial Success

I am blessed in that I get a lot of entrepreneurs reaching out to me for advice on their startup; namely, to sound board the efficacy of their idea, a key strategic decision that they are facing, or a milestone that they are working towards. 

Having been around the block a few times, I put together this primer of nine key lessons learned from doing eight startups (four as co-founder, four liquidity events – exits to IBM, Apple, Wind River, Zoom):

1.      It’s About Who, Then What: We love to fall in love with great ideas, but you know what, the most  basic truth is that the key strategic decisions are usually less about the industry, the products, the pricing, the message, the sales channel or even the technology, and MOSTLY about the people.  It’s the proverbial ‘Who, Then What’ dynamic at play. As such, it is never too early to define your ideals, establish your culture, and commit to actually living it. This will lead you to hire builders who think like owners, who operate with strong values that are aligned with your own, who are long-term thinkers, data-driven, and who want to build stuff that matters (not just make money).

2.     Say Goodbye to the Tyranny of the ‘All or None’: Details matter, but often the bigger challenge is reconciling all of the paradoxes and tradeoffs that come with starting and growing a business.  Human nature is to attempt to reduce these paradoxes down to either/or, black and white decisions.   My experience, however, is that success is a by-product of reconciling the nuance, and embracing the ‘AND.’ As such, always be asking yourself, “How might I approach the solution differently it I were embracing paradoxes, as opposed to avoiding them?”

3.     Be Use-Case Driven: It amazes how many solutions are built with a completely generic sense of the user, the use-case and the workflow required to satisfy their needs.  It’s okay to be wrong, but it’s not okay to be confused, so make sure that your product planning process is defined in a way that codifies specific use cases supported by clear workflows (in terms of click steps), backed by wireframes that express same.  This is the ultimate ‘rubber meets the road’ moment when you realize that you are either talking the same language with your constituency of co-workers, customers, partners and investors, or not.

4.     Spell out the Jobs, Outcomes and Constraints That Your Product or Service Addresses: When thinking about specific use cases and user workflows, I subscribe to the jobs, outcomes and constraints  “outcome-driven” innovation model. It assumes that your target user "hires" your product or service to enable them to achieve a specific set of outcome goals, relative to the constraints that they face (e.g., budgetary, ease-of-use, integration, etc.).  Hence, in thinking about your product or service, always know what jobs you are focusing on, how they enable the outcome you are pledging to deliver and how they stick within the constraints your customer faces.  This drives a level of specificity that enables crisp decisions of what the product is and isn’t, and equally important, enables you to test that value proposition with customers and partners.

5.     Know What has to go Right for You to Succeed: Too often, a plan fails to address binary assumptions, like required adoption by a “king maker,” such as a standards body or a major enterprise; the essentialness of a major distribution deal; changes in consumer behavior; or the competition opting not to pursue certain markets.  Not only is it integral to know what has to go right for you to succeed, but at the moment you identify the greatest risks to being successful, those risks should be front-loaded into the market research phase of your efforts.  Front-loading risk assessment will save you from finding yourself heavily invested in a given path, only to discover (too late) that it’s a dead-end road.

6.     Sanity Check the 1.0/3.0 Paradox: The 1.0/3.0 Paradox spotlights the indelible truths that must be navigated to achieve an initial beachhead in the market.  Specifically, most startups are born of a 3.0 sense of what the company’s business will look like when the product or service is mature; a time when they have achieved market penetration; and thus, can set the terms with customers and partners, so to speak. The paradox is that at the 1.0 stage of business life, you can only deliver 1.0 functionality, and consumers buy based upon their "selfish" 1.0 needs.  Moreover, history suggests that 1.0 is usually “good enough” to get to 2.0, and by 2.0, you are legacy, which is hard to dislodge.  Hence, the wedge into new markets comes from solving a compelling 1.0 problem.  

7.     Always Have an Official Plan of Record: This one seems obvious, but entrepreneurs can so fall in love with the big picture that they avoid sweating the details on things like audience size, metrics of success, major milestones, market segmentation, and go-to-market thinking.  Bottom line: you need a model of the moving parts in the business, and the inputs and outputs generated by same to know if you are on the right path.  In the early stage of a business, the model doesn’t have to be super specific; it just needs to be intellectually honest and supported by a clear narrative.  

8.     Is Your Solution a Vitamin, Aspirin or Penicillin?: A Vitamin Solution is one where the target customer knows they SHOULD use it, like vitamins, but it's not like they are going to get sick or die tomorrow if they don't.  An Aspirin Solution addresses a major, major headache for the target user. They may not die if they don't embrace a solution like yours, but the pain and suffering will be ever-present until they do ‘something’ about the headache.  The target customer NEEDS this type of solution very SOON, if not NOW.  A Penicillin Solution literally keeps you from an untimely demise. When you need penicillin, you NEED it TODAY.  Stating the obvious, it’s better to be a Penicillin or Aspirin Solution than a Vitamin one, at least on the scale of essential-ness.

9.     Be a Detective, an Anthropologist, Sociologist, Psychologist and Zen Master: My favorite quote here is from technology pioneer, Carver Mead, who once implored would-be innovators to “Listen to what the technology is telling you.”  Thus, it helps to have scenarios that drive the way you think about enabling technologies, new products and emerging markets; it’s critical to understand that it is as lethal to be too early as it is to be wrong; and as a friend of mine puts it, sometimes the big idea is looking at a solution which today is applicable to only a small fringe (10%) of the market (e.g., blogging) but with some re-thinking and/or re-factoring, could capture much closer to 100% of the addressable audience (e.g., Twitter).

If you are an entrepreneur looking for some pro bono guidance relative to your venture, reach out to me at LinkedIn by clicking HERE. 

My only request is that I need to really understand the specifics of what you are trying to do and what type of assistance you are hoping for to give you actionable feedback. 

Related Posts:  

1. Pattern Recognition - SupportBot and The Spiral Model
2. The Goodness of Artificial Milestones

On Doing Better

‘Betterment is a perpetual labor.  The world is chaotic, disoriented and vexing.’

Sage words from Atul Gawande, in “Better, A Surgeon’s Notes on Performance.” 

(Disclaimer: Gawande’s previous book, “Complications,” was one of my favorites, so I am pre-disposed to want to hear what he has to say.)

This book of stories takes place where the practice of medicine occurs – in hospitals; and out in the field treating those wounded in war and fighting against 'preventable' diseases in under-developed countries.

What it prescribes is very tangible and practical, since we all can appreciate how serious it is to be sick enough to have to be hospitalized. Intellectually, we can also appreciate the rigors that must come with carrying the mantle of treating sick people.

But such truths aren’t limited to the field of medicine.  What Gawande is providing is a framework for continual improvement in any endeavor that involves risk and responsibility.

He cites three core requirements for success in these realms – diligence, doing right and applying ingenuity, each of which is deceptive in the way the way it combines the ‘DUH’ with the ‘DEPTH.’

Diligence is the simple assertion that it is necessary to give sufficient attention to detail to avoid error and prevail against obstacles.  As Atul underscores, ‘diligence is both central to performance and fiendishly hard.’

The second challenge is to do right. This just recognizes the reality of the human element and how it manifests on a bunch of levels.

The third requirement for success is ingenuity—thinking anew. 
I think that Gawande’s articulation of ingenuity is plenty rich so let me just quote it verbatim:

‘Ingenuity is not a matter of superior intelligence but of character.  It demands more than anything a willingness to recognize failure, to not paper over the cracks, and to change.  It arises from deliberate, even obsessive reflection on failure and a constant searching for new solutions.’

In Tibetan Buddhism, they talk of things being 'workable,' which is very pragmatic, but at the same time they recognize the role that Crazy Wisdom plays in actually forging the path.

To a better place.

Metamorphosis: Change your Life

As I spoke to Charlie O., our largest client, who owned five large shopping centers comprising over one million square feet of real estate, I know that what he was most interested in hearing about was our strategy to lease his current vacancies.  But I couldn't help myself. 

“Charlie,” I said, “The internet is going to change a lot of industries. It is this generation’s steam engine and it is destined to give rise to pseudo trains, railroads and a host of entrepreneurial engines that we cannot yet imagine.”

“Interesting,” he offered.  What else could he say?  It was 1993.  “Now about my vacancies…” 

I didn't know it at that moment, but the credits had officially started to roll on my career as a real estate entrepreneur.

Five months later, on the fortnight of starting my third real estate company with my long time business partner, I had the epiphany that lead me to essentially start over in the very nascent internet space.

When I say nascent, let me set the time.  The web browser had not yet been created.  As such, Netscape had not yet been born, there wasn’t the VC-driven plethora of riches that we have come to know and love.  Heck, my dream gig was in multimedia. Dot com wasn't even a twinkle. The term didn't exist.  I knew literally no one in a VC-funded startup.

In terms of specific job prospects, I had none. What I did have was faith. Faith that if I was true to myself, I would accomplish my goals. Faith that, maybe not tomorrow, but soon enough, the cream would rise to the top.

And my personal truth was telling me that no matter how successful I was becoming in real estate, the bottom line was that I was in the wrong body of water for me personally and no amount of snooze buttoning this reality would make it less so.

Lest I paint a false picture, the transition was not seamless. Overnight, I went from running a company with hundreds of clients and offices spread across the bay area to a junior sales person.

I went from six figures to about $30k but I knew that taking the plunge would not be easier tomorrow when I was locked into a lifestyle and my ego was even more intertwined with my then-current professional velocity.

The irony is that within six months I was promoted from junior sales to a regional sales manager, and within three years I had started my first high teach start up.

Two years after that I had my first real liquidity event, and two years after that, I had my first breakout liquidity event.

I have often looked back on those times, the path that I chose and the seemingly little data that drove me to take the plunge, and one thing stands out.  Amazingly, once I took the plunge, I never looked back.

So if you are a would-be entrepreneur or someone just trying to make a material change in your personal life, what is the moral of the story from My story?  It is this:

1. You are one year from being able to manifest great change in your life. Take the plunge today, and twelve months from today you will truly be 'in the game.'
2. You are just three years from feeling truly competent and unquestionably 'belonging' in whatever body of water you choose to swim in.
3. You are just five years from being on 'top of your game,' an expert and a role model that others look up to.

This premise is liberating because it means that real, life-changing change is in your hands, it is workable so long as your are patient but dedicated to working towards clear, tangible and achievable milestones that are harmonious with your personal truth, whatever it is.

Commit and ye shall find your path.  Honest.

The tyranny of the ‘All or None’

(Just in case you were wondering, Mother Theresa makes a special guest appearance later in this post.)

Why can’t we get along?  Why do we define ourselves in terms of blue states and red states, as liberals or conservatives, as anti-war or pro military, as if these things were mutually exclusive?

Why do so many New Years resolutions to accomplish specific professional or personal goals fall by the wayside only days and weeks into the New Year? 

Plans to lose weight, to exercise more, to move ahead in one’s career, to spend more quality time with loved ones, to get organized, and on and on it goes.  Why can’t we get it done? 

It’s the ‘All or None’ syndrome at work. 

We fall into the trap of defining ourselves and others in terms of absolutes.  We make black/white decisions about whether a given situation is failing or succeeding.  And depending on how we view the world this particular day, we either cope or we quit. 

Other times, we fall prey to too forcefully asserting ourselves, grabbing real or emotional territory and refusing to consider other perspectives whether such ground is rightfully ours or not.

In an intellectually honest place, we have to see that from this behavior we end up closing doors, missing opportunities and creating dead-ends.

We also end up missing the opportunity to connect with others on a human level.  When multiplied day after day, week after week over time, this casts real karmic gravity.

It doesn’t have to be this way.  We don’t have to be victims of impatience, malfeasance or intellectual laziness.  We don’t need to isolate ourselves. 

Metaphorically speaking, we are building steps. If we can figure out steps ‘to what,’ then we can write it down.  That is step one. It will be iterative in nature.   

From there, we can start moving forward.  By ‘moving forward,’ I mean that we can start being proactive, and formally map out where we want to journey and how we want to get there. 

Then we can start building a boat to navigate those particular seas.

Mother Theresa once said, “If I look at the mass, I will never act.  If I look at the one, I will.” 

The one is you.  Change begins within you but once you commit to taking that step (and externally communicating your mission with consistency and clarity to others), your path is destined to be golden and landscaped with many rich and interesting connections. 

Can you think of a reason to wait?  I can't.

On Intellectual Honesty...

Platitudes don’t equal practice.  Saying is not the same as doing – no matter how emphatically or loudly you say it. 

Communication and coordination is hard but necessary when working with others towards larger goals.  This is where formulating an agreed upon “definition of the situation” is integral. 

This entails having a (preferably) short document that is:

• Visible to others
• Specific in its objectives
• Backed by clear dates and milestones that are meaningful and understandable by others

And finally, track-able by metrics that are readily measurable.

No amount of documentation or data can overcome a lack of intellectual curiousness, an unwillingness to challenge one’s assumptions and/or re-assess the definition of the situation when the situation merits.

That said, avoidance or distrust of hard data is akin to flying a plane without navigation controls. It can be done but unquestionably place both the pilot and his/her passengers at great and unnecessary peril.

Reason AND Faith

Reason and faith find a welcome home when you pursue your life's passion. 

I have always known just how much luck is involved in success.  Perhaps the path is more straightforward for others, but for me it takes daily work, intense focus and a sometimes lonely leap of faith that my truth is destined to be realized. 

The space that I am within, social media, is a vibrant one.  It is all about faith.  Faith that people systematically connecting with like minds in a rich fashion is a good thing. 

Faith that the combination of favorites, related and recommended content will lead to better media and information flows. 

Faith that companies, their customers and their constituencies will take the plunge and embrace as strategic the cultivation and capturing of conversations; that they will take whole the development of never-ending narratives with and between their core base. 

I really believe in the goodness of all this but new markets don't follow familiar paths.  You just can't know what you don't already know.  There is no substitute for actually doing.

Here is where pragmatism enters the equation.  There is a saying that you can not improve what you don't measure. This is a medium that can be measured on so many levels. Brand awareness.  Attention.  Well-defined actions. Completion. Signing up for an email list.  Requesting info.  Buying something.  And on it goes. 

But the workflow-friendly means to make sense of the data in a meaningful fashion are still pretty young. 

And what constitutes the metrics of your success and that of your customers in this medium? It really depends on what your ambition is.  How earnestly you approach something that is not yet fully formed.  Early adopters gain huge market "land grab" advantages.  That said, fast followers are all too often the last man standing. 

Ultimately, you've got to pay the bills.  In the lexicon of "Built to Last," it is not the reason for being but it is certainly the oxygen.

What got me thinking about this is that I am reading Al Gore's book, "The Assault on Reason" and one of the central tenets of the book is how disconnected our society has gotten from owning our own critical reasoning facilities. 

Putting the political and cultural aspects of the book aside, I realized that I do reason very well.  It is the oxygen that I breathe naturally.  What I do less well is faith.  It sounds strange to say that, as I am very spiritual and like I said, I have taken many leaps throughout my life and career to date. 

Somewhere along the line, however, I started to carry a dispassionate self.  Wanting to believe that there is a light a the end of the tunnel. But too much of a chicken shit to take the emotional plunge and put it all out there.  Too much of a chicken and not enough of a pig.  No more.  I am all in.

The seeds of faith have been re-planted.  I must chant it daily.  Shouldn't we all own reason and embrace faith (whatever that means for you) and faith-filled pursuits ?

Lazy Wisdom: On life's pursuits

I once had a friend who prided himself on being lazy.  He did not consider it to be a negative in the least. 

The way he saw it, his laziness forced him to come up with solutions that enabled him to be successful without perennially running around like a chicken without a head.  That wasn't his vision of himself.

His laziness was his wisdom.  What is yours? Is it:

• To work hard or to work smart?
• To run full sprint at all times or to pace yourself for a marathon? 
• To pursue execution speed or to develop strategic decision-making skills? 
• To live it, breathe it 24/7 or to put it in a box and stick it in the drawer when the opportunity presents? 
• To pursue individual greatness or to become a part of the body team?

Share your thoughts, I will share mine and maybe over time this can grow into a wall of wisdom. :-)

Teams and Membership: Don't be a Grouch-O!

Groucho used to quip that he would never want to be a member of a club that would have him as a member. The joke obviously being that Groucho was such a loathsome character that if the club would take him, its standards must be unacceptably low.

Running with this analogy, from time to time we all find ourselves desperately seeking acceptance at a "club" (read: school, job, fraternity, friends, significant other, etc.) that doesn't return our interest. Sometimes, the answer is to just try harder. Other times, there is no choice but to handle the rejection with aplomb.

But more and more, the general sense that I have come to is that I only want to be a member of a club that is thrilled to have me as a member.

That may sound arrogant at first blush but the basic premise is simple. I know my skills and my experience, and as such, when I find something worthy of my efforts, I believe that I will deliver the goods, be a great partner and a dedicated, passionate member of the team.

When that goodness is valued and recognized on the front end, it is a great fit and you can create wonderful magic.

By contrast, when that currency is not recognized on the front end, the price of entry is (generally) not worth it.

Being 100% intellectually honest, what team or group should be thrilled to have you as a member and why?