Wednesday, December 30, 2009

Most innovative product of the decade - woohoo!

Techcrunch's Crunch Gear voted USB thumbdrives I co-invented the most innovative product of the decade! Glad the recognition beat the patent awards - the first 5 patents I filed back in 1999 came through this decade. The stuff filed 2000 and after will probably only come through next decade... never mind the patents are barely worth the paper they're printed on given all the corporate cross-licensing agreements!

Tuesday, December 8, 2009

The art and craft of sales - an interview with Scott Chandler

Last week, I had the pleasure of meeting a very impressive sales executive, a true sales rock star. Scott Chandler is the Vice president of strategic sales at Infinera, and served as VP Worldwide Sales for Infinera before that. It's not often that one encounters true excellence along with sincere humility. In the past 4 months, I have had the pleasure and privilege of meeting two such people: Scott and Desh Deshpande. This is a blog post about Scott, another one about Desh is soon to follow!

Here are excerpts from my interview of Scott:

Me: What are the characteristics of a good sales person in your opinion?

Scott: A good sales person is one who has an excellent work ethic, is paranoid and is someone who is creative. An excellent work ethic is a common denominator for most successful people.

Paranoia is very important because a sales person must constantly think and be aware of what his competition is doing, and be prepared at all times to be one step ahead.

Creativity is super important in this business because a good sales person must always create reasons for future meetings with the client, until the sale is closed.

Sales are made based on relationships at the end of the day. It’s important to be very tuned in to the customer and interpret fine nuances in tone and language appropriately in order to be extraordinarily successful in sales.

Me: What characteristics make someone a good sales manager?

Scott: A good sales manager is an excellent team player in addition to possessing all the skills that a good salesperson possesses. He must have the respect and trust of the people who report to him, and must have built up a reputation for fair play. The team must know that their manager has their back at all times.

As one progresses upward in a sales organization, it’s extremely important to understand what motivates each constituency (s)he is dealing with, and respond in a way that addresses that constituency’s concerns. A CEO is seeking a different answer than the VP of technology or the head of manufacturing, and it’s very important for a head of sales to be able to turn on a dime and give different people the responses they are looking for from their perspective. It’s almost like having ADD – there are a number of people who need to be kept happy at the same time, and it’s a very delicate balancing act to pull off. That’s one reason why burn-out is so high among sales managers and not that many people make it to the top sales jobs.

Also, good sales managers in top jobs must have the ability to make quick decisions that will eventually affect practically every part of the company. This requires someone who keeps their finger on the pulse of the customer round the clock, is able to synthesize the information quickly, and can take the heat.

Good sales managers are smart about how they use their time. Common perception is that sales people routinely wine and dine their customers and go on golf outings with their clients on weekends. Personally, I haven’t played golf at all in past year because I don’t have the time.

While dining, golfing with your customers is perceived to be an effective way to create the all-important-relationship necessary for selling, in my opinion, there are other more effective and efficient ways to do this. Remember that the people you’re selling to may not necessarily be looking for new friends and they each have their own families they may like to spend time with!

One of my biggest customers told me “Scott, I am giving you this business because of the relationship you maintained with me even when things were down. The other guys never spoke to me then.” What I did was I reached out to this person periodically every couple of months even when I knew the person did not have a budget, kept him in the loop and let him know what new products my employer was coming up with that would be useful to them when they did have a budget. Being communicative, responsive, and honest is a much more effective way of building these relationships.

A great sales manager is one who is capable of punching someone in the nose and then 5 seconds later, the person who got punched is thanking you for it. That’s an art - it can be honed, but fundamentally, some people just have it and others don’t. Ask my sales guys – they will tell you that I am absolutely capable of bringing you to the ground and stepping on you, and 5 minutes later you will be thanking me. It’s the X factor.

Me: When/How do you decide to promote a sales person to become a sales manager?

Scott: I promote people who have earned their stripes, and I know I can trust them and respect their judgment. I have known all of my top people here at Infinera for more than a decade, and some people have moved 3 jobs with me, so they can work for me. A good manager must inspire that kind of loyalty in his people.

Me: How are incentives structured for the sales manager?

Scott: The incentives for a manager or similar to that of a sales person but on a more macro scale. The quota for a sales person might be $5M, for a sales manager, it will be $50Million. The sales people are incented based on what’s important to the company – sometimes it’s a margin bonus . Other times it’s a new product bonus, or a new customer bonus. The incentive varies depending on what the company needs at that stage.

Me: If you are in charge of worldwide sales, how do you think of and manage territory?

Scott: Territory allocation in an early stage start-up is very easy honestly, it actually starts to get harder as you get bigger. When you are a start-up, it’s you and a couple of other people, and you have the whole planet to sell to. The CEO, marketing and sales teams brainstorm an year before the product is even built – who do we know out there, who are our top customers, who our best customers are, and which customers represent our best chances. We then line up all the potential customers, put them on a list, everyone agrees and pokes holes about why a particular customer is not a good one to be on the list or why isn’t another customer on the list etc., create a top 20 list and then you start calling them.

You know most people if you have been in the industry long enough. You say “Hey, I am now with company XYZ. I know you don’t know anything about this company, but you know me and I think you will find this product interesting…”. Then you look at the list for companies you don’t know people at, and start to hire your first 3 or 4 sales people. I look in my Rolodex and see who I know has a deep relationship with the target customer and go hire them. These people will typically have a relationship with the target customers even deeper than me. When I say “deep”, I don’t mean someone whose the customer’s golf buddy. I am thinking of someone who attended the guy’s wedding, who is a godfather to his child, not merely a superficial business relationship.

Then, when it’s time to grow and expand, there are basically only 5 regions in worldwide sales: Eastern and Western US, EMEA (Europe, Middle East, Asia), Asia Pacific and CALA (Central and Latin America). I then look in my network to see who the best guy I know is for the job in a given market. Once I hire these people, I work with them to bring in their top guys from their personal network based upon what the company needs in its next level of leadership. This works really well when one has been focused on a specific industry for a long time as I have, and pretty much know all the other top players in this industry.

Me: What information systems do you use?

Scott: I will tell you if you promise not to laugh at me, given you’re from MIT. I have a notebook bound in green leather held together by duct tape that I thumb through every morning. I go through every single contact in the book, and check off a mental list – is everything going well with this account? When was the last time I spoke with him? When did this person check-in last, and what was it about? If it’s been a while since I touched base, I pick up the phone and call the person. I do this every single day, first thing in the morning.

Me: Ever hired a salesman who seemed to be the right guy for the job and turned out he was not? What went wrong?

Scott: Oh absolutely! Sometimes, people talk a good game, meet all the criteria on paper but don’t walk the walk. As a manager, it’s very important to be study human psychology and be an astute observer. Some people are terrible new account managers but very good with customer relationships. In such cases, you try to find a home for them. You team up the good hunters with the good farmers because people maybe better at one than the other.

I hired this guy once who had a terrific killer instinct – he was very good at breaking down barriers and landing the initial contract. However, he was pretty bad with following up, keeping in touch with people and doing relationship maintenance. I had the option of firing this guy. Instead, I chose to move him into a role where his skills of breaking down barriers and landing the first contract was important, and moved someone else who’s better at relationship management to do the follow-up.

It’s very important for a good manager to know the strengths and weaknesses of their employees, and position them appropriately to succeed even when the employee himself is not aware of his own strength or weakness.

Me: Suppose there’s a dispute where one sales person has been working on a lead for months and the order comes from a different department/location, how do you decide who gets credit?

Scott: This happens all the time. In fact, I just got off the phone with one of my sales people dealing with this exact thing. These issues are much easier to resolve if your people trust you and believe you’re playing fairly. Often, I end up compensating both people equally, even if it means I need to deal with the CFO later and justify my actions. It’s really important to not have petty bickering in the organization, because it can bring the morale down. Sometimes, I might ask the person to take one for the team secure in the knowledge that their work has been noted and will be acknowledged appropriately down the line.

And this in a nutshell folks, is how the winners think about sales!

Collective wisdom on entrepreneurship

Yesterday, the Founder's Journey class and Hemant Taneja weighed in on 5 key topics that are at the heart of entrepreneurship.

On co-founders:

Co-founders must be people with complementary skills, who set aside personal agendas and focus on what's best for the company. The team is as important if not more important, than the idea. When co-founders begin to bicker in the early stages about "this is my domain, not yours", this portends trouble ahead. This then naturally raises the question of "At what level must the complementary skills of the co-founders come together?" Hemant responded to this saying co-founders need to have important conversations with each other such as time commitment to the start-up, equity sharing etc. early on, and work to create an environment where the founders can openly talk about it and not let it fester.

On ideas:

An entrepreneur must think through what is the unique value that their idea adds in the broader sense, and if they can build a viable business. It's important to be flexible and quick on your feet, and to know that the idea is going to change down the line. Accepting the inevitability of change beforehand will make the journey easier. For complex ideas that involve scientific research, it's particularly important to be adaptable so that if only a part of the original idea works, another product can be built around the core IP.

A good entrepreneur has the following hallmarks:

- Spends time thinking about the size of the market, looking at it from every conceivable angle.
- Understand what is the true value added for their customers, and if they will really pay?
- They are rigorous in their analyses, and are paranoid about anything that might affect their analyses.
- They can answer why now, why hasn’t it been done before, and why me?
- They understand the history of their space and can therefore project future trajectories

On validating ideas:

It's important to understand and acknowledge that somebody else’s eyes are better than yours, particularly if you have been looking at this for a while. It's very easy for founders to fall in love with their own ideas. Another important aspect is to understand defensibility of the idea. Sometimes, competition is some of the best validation an entrepreneur can get.

When validating an idea, it is often hard to know what are the right questions to ask. Responses from a focus group to questions such as “would you like a blue widget that does…” will be limited to the skill and imagination of the people who prepared the questions and is frequently not well suited to tech. start-ups. It's more instructive to observe people interact with a product and record their observations, which will not be fettered by the creator's imagination.

Another best practice when validating ideas is to try and find people who have failed before you, and ask them questions about it. Be open minded and go talk to people about your idea. Sometimes the best insights about the journey ahead come from those who have tried walking the path before. When talking to competitors, be upfront and honest. Talk about how you can make the pie bigger for both of you, and then go fight your individual battles when it’s time to acquire customers.

When there are IP concerns surrounding an idea, the strategy to gather feedback is to emphasize the benefits of the product. Show the audience the promise of the technology with measured results. Explain what the technology can do, and save the how its' done part for when NDAs have been signed and final stages of due diligence are in progress.

On team building:

It's critically important to be self-aware, and be a good judge of character. Always hire people smarter than you, and only invest in people who have conviction. When someone is not the right person for the job, do not hesitate to move them to the right role or fire them. The sooner this is done, the better. Create a good mix of people who are experts in the space along with newbies who bring a fresh perspective. When you bring in new people, be prepared to learn from them before they get brainwashed into your way of thinking and doing. Remember, these people were hired because they are smarter than you, so not to learn from them would be a loss!

On investors:

Before seeking financing, have a clear idea of how the money you're seeking will be used. Convince yourself first that the money is going to be put to good use, and ask only for what you need! Then:

- Get introduced to an investor, ideally through the founders of one of their portfolio companies.
- Find a lawyer early on who believes in you and will give you some free advice.
- Always do due diligence on potential investors.
- Talk to a couple of the founders in whose companies the investors have invested. Pay attention to the kind of founders that were chosen by the investors, as well as the founders' take on their investors. This will be very informative.
- Lay out a trajectory of how the business is going to develop. Find an investor who agrees that these are the important milestones for your business, and is willing to invest to reach those milestones.
- Don't take money from an investor who seeks downside protection for himself. Your investor should believe in you.
- Finally, don't get involved in overly complicated financing deals.

Miscellany:

- Find the smartest people in your space and bring them on board. Remember, if you don’t find them, someone else will.
- Identify mentors early, they are very important for bouncing ideas off of.
- Rope the investors into the process. It's a good idea to go to investors and seek advice early on. This will not only give the entrepreneur the benefit of wisdom from people who have seen several start-ups, it will also help build a relationship based on mutual trust that will be helpful when it's time to raise money.
- The importance of spending time with your customers can never be emphasized enough.
- It's important to have a strong company culture. Apply some foresight and emphasis on establishing company culture, it will stand the entrepreneur in good stead when the company is no longer just the founders.

Saturday, December 5, 2009

Intelligent design

I have been a big fan of intelligent design, whether robotic machines or consumers products. This product designed by Min-Kyu Choi fits the bill brilliantly. Can't wait for her folding suitcase to come out!

Monday, November 30, 2009

Bob Metcalfe @ MIT

Bob Metcalfe, a co-inventor of Ethernet and co-founder of 3COM and GP at Polaris Ventures is in 6.078 today to talk to us about selling.

The talk began with an excellent point - "nerds" have a disdain of the "suits". But one of the most frequent causes of doom in a tech. start-up is this disrespect. Three things that sink a company are the uncontrollable ego of the founder, lack of money and lack of focus.

He then went over the numbers at 3COM - for every $1 spent on engineering, $10 was spent on increasing sales.

First level of selling consciousness is the belief "build it, and they will come".

Second stage of selling consciousness is argument - go out and argue with people why your product is better than the competitor's. Frequently, you will win the argument, but will not get the order.

The third stage of selling consciousness is when you over-promise and under-deliver. Works better than second stage but is ultimately not too successful.

The fourth and ultimate stage is to learn to listen to customers, and hear what they are actually telling you. This will result in the maximum number of sales.

Caveat: If you are going to go ask customers what they want now, you are going to have to guess what they want 2 years from now, if that's when your product is going to be ready.

On how do you know when you're selling to someone who will never buy vs. someone who needs more convincing, the trick is to qualify the customer. 3COM survived versus competitor because they made a conscious decision to not network Apple computers.

Thursday, November 19, 2009

Eric Ries on lean start-ups (MIT talk on 11/19)

Eric Ries is here at MIT courtesy of the 100K competition and is addressing a sizeable crowd in 32-123. A predominant chunk of the audience consists of current and aspiring entrepreneurs. I am blogging live.

First slide reads: Most startups fail. No big surprises here.

Next slide: The pivot - what do successful startups have in common?
Pivot is the ability to change directions quickly. The difference between a successful and an unsuccessful start-up is the number of pivots a start-up makes before it dies.

Next is a story of 2 start-ups. Start-up 1 invited Eric to interview. When he arrived at an unmarked located in the middle of nowhere in Silicon Valley, he found a banner that essentially said "we can't tell you what we build, but we can tell you who works here. In start-ups, it's all about the team!".

Strategy of the company was to build a world class technology platform with a compelling long term vision. They raised plenty of capital, hired the best and the brightest, hired an experienced management team, and created buzz in the press and the blog-sphere.

The outcome: the company failed, $40M and 5 years later.

Why did this company fail? Two words: shadow beliefs.

Shadow belief #1: We know what customers want.

Shadow belief #2: We can accurately predict the future. The company had gained a lot of momentum in a particular direction, which made it very difficult to pivot.

Shadow belief #3: Advancing the plan is progress.

Next, is the story of startup #2 called IMVU. Here is what IMVU did differently:

- IMVU shipped its first product in six months, albeit a horribly buggy beta product. Almost nobody used the software.
- Charged from day one. This allowed them to enter into, and maintain a regular dialog with their customers.
- Shipped multiple times a day (by 2008, on average 50 times a day)
- No PR, no launch

Asked themselves: what is the riskiest assumption we've made and how can we test it quickly? In their case, will people pay real money for a virtual avatar?

Results in 2009: profitable, revenue > $20MM

The lesson to take-away is lean start-ups go faster.

Plug for Steve Blank and 4 steps to Epiphany, see my first and second posts from 2 years ago on Steve Blank!

The talk's now focussing on customer development for start-ups...

Eric recommends two teams for all start-ups: a problem team, and a ? (sorry, lost this part multi-tasking. if you attended the talk, post a comment with the answer please?)

Minimize total time through the loop: ideas -> build, code -> measure, data -> learn... ideas -> build

How to build a lean start-up:

- Continuous deployment.
- Tell a good change from a bad change quickly
- Revert a bad change quickly
- Work in small batches (at IMVU, large batch = 3 days worth of work)
- Break large projects down into small batches
- Have a cluster immune system
- Run tests locally. Everyone gets a complete sandbox
- Continuous integration server - tests to ensure all features that worked before still works
- Incremental deploy - reject changes that move metrics out of bounds
- Alerting and predictive monitoring - wake somebody up if metric goes out of bounds. Use historical trends to predict
acceptable bounds.
- Conduct rapid split tests: A/B testing is key to validating hypotheses
- Follow the AAAs of metrics: actionable, accessible and auditable

Ok, at this point, I got to admit that some of the above points has me scratching my head at its obviousness. All these steps from what he calls "sandbox", to "cluster immune system", "incremental deploy", "alertive and predictive monitoring" etc. are STANDARD practices we follow in semiconductor chip design!

We call this "regression testing", and use a standard test bench comprised of carefully generated test vectors to make sure existing functionality isn't broken with new code that's checked in, and of course everyone gets a local sandbox to play in without affecting the source code! That's the only way to do it when designing complex systems! I was therefore a bit bemused to see the same thing being described as though it's a new practice for software design. Software folks, tell me, is this new for you guys or was I missing the point and Eric was merely stating what all techies knew anyway for the benefit of the non-technical folks?

Perhaps Eric is going to touch upon this - it's standard practice in chip design to not only run a subset of tests to test key functionality before checking in new code, but to run a bigger subset of test vectors overnight to make sure all of the code checked in that day does not break something, plus we run a mega set of vectors over the weekends when they can run 48 hour sims uninterrupted, to make sure we didn't break the tiniest part of the chip in the process of making changes... is software design methodology very different?

Unfortunately, my laptop is running out of charge at this point with nary a power point is in sight. If you have notes from the talk you will allow me to share here, shoot me an email!

Tuesday, November 17, 2009

Learning by failing...

As a big fan of the "failure-is-okay-as-long-as-you-learn-from-it" mindset, I thoroughly enjoyed this post by Steve Blank on the Cafepress VC pitch:

http://steveblank.com/2009/11/12/“lessons-learned”-–-a-new-type-of-vc-pitch/

"I joined the board of Cafepress.com when it was a startup. It was amazing to see the two founders, Fred Durham and Maheesh Jain, build a $100 million company from coffee cups and T-shirts.

But Cafepress’s most memorable moment was when the founders used a “Lessons Learned” VC pitch to raise their second round of funding and got an 8-digit term sheet that same afternoon.

Here’s how they did it.

Fail Fast and Cheap

Fred and Maheesh had started 9 previous companies in 6 years. Their motto was: “Fail fast and cheap. And learn from it.” Cafepress literally started in their garage and was another set of experiments only this time it caught fire. They couldn’t keep up with the orders.

Tell the Story of the Journey

The company got to a point where additional capital was needed to expand just to keep up with the business (a warehouse/shipping center collocated with UPS, etc.) Rather than a traditional VC pitch I suggested that they do something unconventional and tell the story of their journey in Customer Discovery and Validation. The heart of the Cafepress presentation is the “Lessons Learned from our Customers” section. ...."

Monday, October 26, 2009

The art of pitching and presenting

I had an opportunity to hear an awesome lecture last week by Ken Zolot in 6.078. The topic of the class was pitching and presenting. Ken started with "Zolot's law of three nines". Per the law, Ken explained it takes 9 seconds for a person hearing the presentation to develop a gut feel, 90 seconds to hear an elevator pitch and 9 minutes to get the gist of the presentation.

I picked up several very useful tips:

- The well written headline must be terse yet descriptive

Example of a good headline: "Yahoo's profits triple despite sales decline"
Example of a bad headline: "Something went wrong in plane crash, experts say"

- Slides distract the audience from what the speaker is saying. To get the audience's undivided attention, blanking the screen is a good idea. The keyboard shortcut to mute the screen is "b" (blank the screen?)

- If the slides in a ppt are numbered, simply key in the page number followed by enter to jump to the slide. Not only does it make navigation easier, it conveys the impression that the speaker is an expert on the subject matter if they can jump to the right slide, without needing to scroll through and scan each slide.

- Skip the table of contents and use an executive summary instead.

- Be aware of what's on the screen during breaks and Q&A. Use this opportunity to display slides that could not be presented within the time constraints of the main presentation, and perhaps strategically nudge the conversation in the right direction.

- Anticipate questions and discuss them before they're vocalized. This makes the presenter appear knowledgeable and thoughtful, and lends extra credibility. For example: "One question you might have at this point is.... what we did to address this is..."

- Know how to say "I don't know" gracefully, and never say "it depends" which is a typical b-school response. One way to do this gracefully is to say "We haven't explored that option yet".

- Margin analysis is a great way to share information about cost advantages from multiple sources over a competitor's operations. It's much easier to absorb, and makes for easy comparison.

Tuesday, October 13, 2009

Rich Miner @ MIT

Rich Miner of Android - Google fame spoke to us at Founder's Journey on 10/13. It was a lively discussion on the future of Android vs. other platforms, and the stakes riding on Android's success. It was followed by a Q&A session, some of which I managed to capture below:

He was asked why Google does not build cell phone handsets. He responded "Our goal has never been to monetize handsets or Android. Instead of one perfect handset, consumers will have a pretty broad set of excellent handsets. If we can achieve this, we will have succeeded." Quite a contrast to Apple which perfected one widely acclaimed handset. It's a very different mindset - one vs. many, closed to the point of being paranoid vs. fully open, seeking complete control over the user experience vs. come, build and make the experience what you will, lock in with a single carrier vs. freedom to choose your favorite carrier and handset...

When asked how does one know they're a bright entrepreneur with a compelling case, Rich's instant response was "if you don't know that about yourself, you're not going to convince anyone else of it". Well said! He then expanded on it: "We never fund ideas, we fund teams we believe in. The teams we choose to fund have a decent idea that is defensible, that they can get to market, in a reasonable amount of time".

Some other thoughts Rich shared:

- In order to build a capital efficient business, the key is to assemble the right founding team so the idea can be moved along as far as possible before money needs to be raised.

- When the business model is unknown, present an investor with different options - a systematic and realistic process for how you are going to evaluate each opportunity to zero in on the business model that's the best fit or the company.

- When deciding who to raise money from, think of geography (VCs have strong local network), and expertise within the firm.

- On the value of east/west coast start-ups for a web/IT company, it is eventually a personal decision, combined with a knowledge of how effective you can be with your own network.

The constant refrain was "Know thyself!" - whether it be self-confidence in one's capabilities and ideas, knowing the markets and industry one's trying to play in, or, knowing what it takes to assemble a winning team.

Wednesday, October 7, 2009

Joe Hadzima @ MIT

Joe Hadzima visited us at Founder's journey on 09/30. One piece of wisdom he shared particularly intrigued me:

One reason companies fail is because they raise too much money too soon.

He explained that too much money encourages hiring mistakes - overstaffing with people with a specific skill set, which is not what is required for taking the eventual product to market. He also pointed out it causes unnecessary dilution, and distracts from the goal of selling to customers as quickly as the company can when a company is overly cushioned.

I had not thought about potential hiring mistakes as a fallout of too much money, so this was eye opening to me.

Wednesday, September 23, 2009

Paul English @ MIT

Our speaker at Founder's journey this week is Paul English, one of the co-founders of Kayak. He started out with a brief biographical sketch.

Kayak is the 4th company founded by Paul. He was introduced to his co-founder Steve Hafner of Orbitz by Joel Cutler at General Catalyst. Steve pitched Paul over a couple of beers. Steve knew the travel business and Paul knew technology, and neither were experts in the other's domain. Paul used this to make the point that when you meet someone, if you have instincts that this would be a fun person to work with or has the skills you don't, learn to listen to that instinct and act on it!

Paul then touched upon the topic of hiring people. He mentioned that his strategy is to *always* be recruiting. He is always tuned to "who has that thing I am looking for?", and keeps an eye open always. This sounded like excellent advice to me. Self-awareness is a must, especially for entrepreneurs who need to hire to complement their strengths, and I have long since learned never to underestimate the role of serendipity in entrepreneurship. So this piece of advice really spoke to me.

When Paul hires people, he looks for 4 things:

1. Bandwidth - people who get things the first time, can handle curve balls and are intellectually intense.

2. Attitude - people who are focussed on winning, with the focus tempered by humility, a hunger for excellence and genuine curiosity.

3. Experience - people with expertise he doesn't have. They don't necessarily need to have experience with the task they are being hired for, but as long as they have the bandwidth, attitude and a complementary skill set, they will be considered.

4. LODB - Lack of Dysfunctional Behavior. When employees start at Kayak, they need to promise Paul 2 things (a) be the best in the role they sign-up for, and (b) be an energy amplifier. I loved this, and this is the second time in my life I've heard this advice.

The other person who gave me this advice 9 years ago is someone I revere as a technology guru who personifies both virtues. These people bring out the very best in the people they're around, and inspire others to try and mirror their excellence and energy amplification. Brady Keays, thank you for your excellent advice to a young engineer nearly a decade ago. It has served me very well. Thank you Paul, for reinforcing the message!

When an employee promises Paul these 2 things, Paul in return promises:
(a) he will make the person more productive than they have ever been before and (b), When they look back in 20 years, Kayak will be the best job they've ever had in terms of fun, work environment and job satisfaction.

Paul succinctly summarized the importance of LODB (Lack of Dysfunctional Behavior) when hiring: Better to make a mistake and lose a good person than make a mistake and hire a dysfunctional person. The dysfunctional person will pull down the team.

On the topic of integrating a new employee into the company, Paul shared his philosophy: "If you have a really strong group of employees, a new hire maybe shy. So for the first 30 days, our team focuses on what they can learn from the new hire first before the new employee becomes used to the group's ways".

He then talked about the red phone in Kayak's office. Per Paul's description, this is a big ugly red phone with a loud and annoying ringtone. When a customer calls kayak, one of the engineers has to answer it and is forced to directly connect with the customer. If there's a bug, it's a great incentive to fix the bug before one more customer calls with a complaint! There's nothing like connecting an engineer with his customer to produce a quality product.

Paul's final piece of advice was this: founders can fall in love with their ideas and ears can become deaf to criticism. Therefore, it's good to put out an early prototype and have it trashed, rather than trying to build a perfect product and getting it out to customers. Mark it clearly as beta, and your reputation will be intact. Do not sell a final product you are not proud to stand behind.

That capped an evening filled with multiple nuggets of wisdom.

Thursday, September 17, 2009

Chris Hughes @ MIT

Chris Hughes was at MIT on Monday, 09/15 addressing the "Founder's journey" class. He is the co-founder of Facebook and the brain behind the Barack Obama campaign. His visit was a hit among the students, many of whom related to him and the pressures he experienced building Facebook out of a Harvard dorm room. He was very engaging and had these great nuggets of wisdom to share:

When Chris, Dustin and Mark created Facebook, their goal was not to build the biggest website in the world. They started with brainstorming for a product they would all use themselves. He reiterated that it's about passion, a desire to build a great product, and not about the metrics or the money. He offered this advice to aspiring entrepreneurs:

- First, know what you are doing/working on. Second, make sure there's a need for it. Then, focus on it. Per Chris, the conversation inside Facebook was "How do we make sure the product is the best it can be for first, our end users, next, people who want to use our platform for marketing and advertising?"

- Don't get caught up in the formalities. He made it clear that he's not advising people to ignore the formalities (company incorporation, legal paperwork etc), but instead to understand that you will get caught up in it, and to be conscious of the fact that other, potentially more pressing matters, demand your attention.

- Value iteration and analytics. Chris provided an example from the Obama campaign: His first step was to understand what it was they were building. He was a newcomer to politics and like most of us with no political backgrounds, thought of TV related advertising when he heard "GEO TV" (it actually stands for "Get Out the Vote!"). He then set out to educate himself and started by clearing the slate and brainstorming. When he was short-staffed in the early days, he reacted by breaking up a big task (building the technology for the Obama campaign!) into the smallest possible pieces and tackling them one at a time.

For instance, the team first built the technology to publicize individual events, then the technology to publicize the events to different groups, and scaled from there. The focus was always on who's buying the product, who's using it, and how they are using it. On the donation page, the team tried several design changes such as the wording, the shape and color of the donate button etc. The iterations were rapid and repeated, until the team settled upon a version that increased the donation amount by 8%!

- Hire smartly. Chris advised hiring people who are smart, whose work and style you respect, are interested in your product, and are available to hire. He recommended going with the gut feeling whether or not a person is right for the job. If the feeling is one of indifference, his suggestion is to not hire them unless one's desperate!

- Don't let money distract you. Enough said.

Wednesday, September 16, 2009

Brad Feld and Shawn Broderick @ MIT

Brad Feld and Shawn Broderick visited us on 09/16 Wednesday, at 6.078 Founder's Journey. Brad gave us a brief autobiographical sketch which had refreshing content - he talked also about the companies he founded, that did not succeed. Here are some highlights from his talk:

Brad is a MIT alum. who decided on Course 15 (management) pretty early. He founded his first company in 1983-84 when he, along with 4 classmates at MIT, decided to write software for Macs. They managed to raise $10,000, bought a Lisa and got a consulting contract for a company that did speech recognition. The contract was worth ~$10,000. The team spent a year on the project without making much progress. When they realized this, they shut the company down, sold the computer for $7000, and returned $7000 to their investors. This was company #0.

Through college, Brad continued to consult on the side and undertook projects such as writing software for a dentist who happened to be his fraternity brother's stepfather for $25/hour. When he was approached to write imaging software for Cephalographic analysis, he hired a fraternity brother to work for him for the summer, raised money from another friend's FIL and was in business! This was company #1.

In Spring of 1987, Brad took a business plan class and ended up writing the business plan for "Feld Technologies". Feld Technologies created semi-custom software for networked PCs. In 1988, Shawn joined Brad at this company, and they have known each other ever since. The company grew to over 20 people, was sold in 1993 and eventually became a public company. Brad worked for the acquiring company for 18 months, the first 9 running the consulting group that was built around the acquisition of Feld Technologies, then as CTO of the overall company. He eventually got bored as CTO, and realized that he wasn’t really doing that much that was substantive or important to the future of the company. At this point, he decided to move on.

In 1994, he became an angel investor. Raj Bhargava, then a student at MIT Sloan, approached him after his talk there, invited him out to lunch and impressed him with his idea. Raj showed Brad the world wide web in its avatar, back then. Brad ended up investing $25,000 for 10% of the company. The company was NetGenesis, and eventually went public in 1999. Brad went on to found 4 more companies with Raj. The rest is history.

TechStars was pitched to Brad by David Cohen, an entrepreneur who had sold a his company in Boulder, CO a couple of years ago. Both of them shared a common passion - they wanted to help companies at the pre-seed stage and go beyond the traditional angel investor role by mentoring these pre-seed start-ups. Together, they reached out to the community and got a great response. The first class graduated in 2007 and 3 of the companies have been acquired since. These acquisitions more than paid for the cost of the program. Of the 10 companies from the class of 2008, 7 companies became self-funded or raised money. In 2009, TechStars decided to launch the Boston program in addition to the Colorado program with Shawn as its head. Techstars Boston graduated its first class last week to rave reviews.

What would be awesome is to see a couple of teams from Founder's Journey graduate from TechStars class of 2010.

Wednesday, August 12, 2009

Robots

Robotics has evolved so much in the last decade. This link landed up in my in-box courtesy someone who knows I am a certified robot-nut.

Check out these robo pics in particular:

#23: What a terrific idea! No more anorexic, unrealistic "models"... these robots are way better!

#25: Gotta admit, creeps me out. Insect-robot hybrids with the head of an insect and body of a robot?!

#28: Honda and Asimo have done it again, w00t! Thought controlled robots? How incredibly awesome is that!

#33: Stunned to see this one! Looks like Eddie is a descendant of Kismet, one of my favorite robots sitting right here in my backyard at MIT. Kismet was Dr. Cynthia Breazeal's PhD thesis at the Media lab.

Kismet's ancestors are showcased @ the MIT museum. Very exciting to see generations of robots evolve.

It would be a dream come true to commercialize one of these robots, combining my twin passions of robots and entrepreneurship.

Wednesday, June 10, 2009

Sources of seed funding

I am blogging from the MIT Enterprise Forum sponsored talk about raising seed funding at MIT. On the panel are representatives of Techstars, Spark capital, Google ventures and a angel/serial entrepreneur. About 10 minutes in, I heard something particularly interesting:

VCs are often hesitant to come in and invest in start-ups that have received angel funding already. They would rather be first investors. I did not understand why, I intend to find out.

Moderator asked what can inexperienced entrepreneurs do to get funded. Rich Miner said good ideas will be funded and to send email to miner@google.com. Shawn (techstars) pointed out that people in Boston are reticent as far as it comes to publicizing themselves as angels or people with good ideas and encouraged people to speak up.

Moderator asked generically, what can founders do to be successful raising a seed round? Shawn (techstars) says move the duck (idea) forward. Make progress. Spark rep. advises being ambitious and contacting highly placed people for advisors. Miner (Google ventures) says to be organized and focus on fund raising. Cold call people and ask for advice. David (angel) says to have a good elevator pitch that can be delivered in less than 2 minutes.

Twitter qn: What milestones need to be hit before looking for seed investment? Answer: depends on start-up. Need to agree with investor what that is for your start-up. An interesting response from David: if you are a new entrepreneur, take what you can get. Don't push for one form vs. another, take what you get. If you, the entrepreneur, are integral to the business, investors will give you equity in later rounds to keep you. If you are good at what you do, you will get compensated properly. Save the negotiations for the second start-up when the first has been successful.

Qn: if you are an angel looking to invest the first 25 to 50 K in a company, what should you look for? Answer was a vague look at the team and essentially, go with the gut.

Qn: among panelists, who invests in what industry sector and how capital intensive would they like their investments to be?
Spark: media, technology.
Techstars: extremely capital efficient businesses. B2B, consumer Internet, SaaS plays

Sunday, June 7, 2009

The UPromise Story

Last week, I had the pleasure of speaking with Jeff Bussgang, co-founder, president and COO of Upromise. UPromise was acquired by Sallie Mae in 2006.

UPromise is a loyalty program where participating retailers deposit 1% of the end-consumers spending into a designated college savings account. The amount deposited can be used to pay off existing school loans or to pay for future loans. UPromise's business model was to reach out to students on college campuses, and encourage them to ask their parents to shop at participating retailers, thus saving/earning money for college. This allowed UPromise to drive business to retailers, and they were in turn paid by retailers for this.

Jeff started out by saying that when he and his co-founder Michael Bronner launched UPromise, it was around a very unique set of circumstances.

- Both he and Bronner were experienced entrepreneurs who had exited their previous ventures successfully.

- The company was launched in 2000, when the internet bubble was still intact.

- These two facts helped them raise $34 Million without having a single customer.

- Bronner had extensive contacts in the retail industry, which made it relatively very easy to get their foot in the door, and land the first few customers.

Their experience, branded VC backing, and Bronner's contacts earned them credibility with retailers and once the first few retailers signed up, it was an easier task approaching everyone else. He also mentioned a couple of other interesting points:

- When they approached retailers, they had a CMO with credibility, who had executed a similar strategy before.

- They approached retailers with a comprehensive marketing plan and a branding document.

- The typical time between first contact to contract with a retailer averaged 9 to 12 months.

I found it very interesting when Jeff commented that he was not sure he could found such a company in today's climate and be as successful. It goes to show entrepreneurship is as much about luck as it is about sweat and guts.

Saturday, May 16, 2009

Dr. Paul Jacobs, CEO of Qualcomm at MIT

After about 6 months of planning, 5 hours of meetings and 200 emails later, I had the pleasure of hosting Dr. Paul Jacobs, the CEO of Qualcomm on behalf of the Mobile, Media and Internet Technology (MoMIT) club at MIT. The talk titled "The future of wireless" was held at the Bartos theater in the MIT media lab and was very well received. Dr. Jacobs was incredibly down-to-earth and I had the pleasure of spending some time with him and his colleagues immediately before and after the talk. Here are the slides from the talk. I will upload the audio track when I get the green signal from Qualcomm's PR department.

Can't wait for Gobi to get here already! Mirasol and Kayak sounded pretty cool too.. look at the slides if you don't know what Gobi, Mirasol and Kayak are!

Monday, April 27, 2009

Conversation with Paul Citron, Medtronic

I had the pleasure of speaking with Paul Citron who is the retired Vice President of Technology Policy and Academic Relations at Medtronic last week. I found some of Paul's comments about how to think about innovation and the innovation pipeline to be particularly insightful and relevant to our times. Though he made his comments with respect to innovation in medical devices, he made some terrific points that any innovator (and manager of innovators!) will do well to keep in mind.

Paul pointed out the importance of recognizing the mix of incremental vs. break-through innovations in a portfolio, and being mindful of how R&D dollars are effectively invested. He stressed the importance of recognizing that a larger R&D contribution does not necessarily mean that more dollars are going towards research, and that executives would do well to be aware of the actual contribution. A lot of the money is spent satisfying regulatory requirements and jumping through hoops instead of on research iteself.

He also pointed out how the lay person who is allowed to decide the fate of innovation (by being allowed to preempt FDA approvals and decisions per recently proposed bills in the congress) is often not best equipped to make the judgment. He felt strongly that the power to make such decisions must be removed from state courts and vested with the federal courts, where the people involved tend to be more sophisticated about these issues that affect science. He pointed to patent law as an example, and mentioned that there's a reason why patents can't be attacked/defended in state courts and must go only through the federal system.

Another excellent point Paul made: the scientists and researchers working on the breakthrough innovations we depend on for progress as a society are not fools - when company management/society consistently refuses to back their science in the name of minimizing risk and regulating them, they become progressively risk averse. This effectively stifles best-in-class, breakthrough innovation that we have come to rely on for progress.

In all, much food for thought for innovators, and manager of innovators.

Monday, April 13, 2009

My conversation with Dan O'Malley, CEO, PerkStreet Financial

Last week, I had the pleasure of having breakfast with Dan O'Malley, the CEO of PerkStreet Financial. He had a very fascinating story to tell as a first time entrepreneur who closed his first round of funding within 6 months of starting, and an uncommon passion and willingness to walk off the edge of a cliff in order to pursue his dreams. That really resonated with me.

Dan was a senior executive at Capital One before he launched PerkStreet last year. At Capital One, he successfully introduced the decoupled debit card. A decoupled debit-card is is so-called because the cards are issued by Capital One but they are linked to checking accounts held at other banks. When he then came up with the idea of offering a debit card with rewards, there was a conflict of interest within Capital One that prevented the idea from being pursued, even though he had the backing at the highest levels inside the organization. Something Dan said at this point put things I was pondering in perspective for me:

"Regret is a powerful emotion. I did not want to regret not taking the chance and watch someone else build my product".

That is the passion a founder must feel! When he said that, something cleared in my head and I knew the choices I had to make. An entrepreneur must feel that kind of burning need to act on his vision in order to have a chance of successfully navigating the challenging, arduous path to the finish line.

Dan also said something else that really stuck in my mind. I asked him about the highs and lows of his entrepreneurial journey so far. He offered a philosophical response - it's dangerous to be swept to the peaks of happiness or be overwhelmed by setbacks, because higher the peak and lower the trough, farther the fall to the bottom. The key is to maintain a somewhat neutral steady-state, that allows you to wake up each day and roll with the challenges the day brings.

How very true! Dan said this so much better than I ever could have, and the point really struck home.

It took me forever to learn this lesson, and I am still working on trying to maintain a steady-state at all times. Some times I am more successful than others, but I suspect it's a very important lesson for me to learn and master in my journey as an entrepreneur.

Tuesday, March 24, 2009

Pattie Maes @ TED

Dr. Pattie Maes of the MIT Media lab and her doctoral student Pranav Mistry rocked TED this year with their presentation of this game changing sixth sense technology. Check out the talk. Now, this is very cool technology, even better than the stuff in the Minority Report movie that it's being compared to. The elegance of the solution appeals to me - it's systems engineering at its best, using several interconnected subsystems to achieve the intended effect.

What stands out in my mind:

(1) It was built with off-the-shelf components, nothing fancy, costing $350. So, anyone could have built this.
(2) The "device" consists of a phone, marker caps of different colors, a camera, a projector, and a mirror. That's it.
(3) It makes sense of natural gestures.
(4) It's mobile, unlike the minority report technology.
(5) The processing power is from a regular cell phone, no extraordinary parallel processing or computing resources required
(6) Totally fabulous application for someone with a really poor memory for names like me: display person's name when you see them!

I hope to meet Pattie Maes on Thursday after her talk at the Media lab, so either shoot me an email or post a comment with any questions you may have for her.

Monday, March 23, 2009

A woman in technology that I admire..

A woman in technology I admire greatly is Helen Greiner of iRobot. Helen is the co-founder of iRobot and holds a Bachelors degree in Mechanical Engineering and a Masters degree in Computer Science from MIT.

To me, she represents a unique and rare combination of technical skills and business savvy, and is a tremendous role model for women who aspire to be successful engineers and businesswomen. She gave a great speech at last year's Women of Vision awards where she won the 2008 award for innovation. The speech beautifully summarizes the challenges of becoming (and staying) a woman in engineering, and for that, I tip my hat to Helen.

Saturday, March 14, 2009

Dear Readers based in the US,

I would be most appreciative if you could spend 30 seconds of your time answering these two poll questions I posted on LinkedIn:

http://polls.linkedin.com/p/27232/xoocp

http://polls.linkedin.com/p/27234/eqpyt

Many thanks!

Monday, February 16, 2009

Part 2: Boston start-ups

Continuing as promised:

Pongr is a mobile software start-up that provides real time price comparison for shoppers. The team includes a couple of MIT PhDs who seem to have cracked the image recognition problem. A cell phone picture of a book cover is enough to automatically launch the search engine to find the closest stores carrying the book!Very impressive. They have other very interesting offerings in the pipeline that I cannot blog about at this time unfortunately.

uLocate brings the promise of location awareness using GPS to real-world applications. Their technology enables widgets for local search, family/friend finders, maps & directions. Interestingly, it's also offered as a platform which offers easy access to GPS data enabling developers to go to market with location based applications.

Tuesday, January 20, 2009

Boston area start-ups

Last week, I had the opportunity to visit these cool Boston area startups:

Skyhook wireless, ThingMagic, Pongr and uLocate.

The technophile in me thoroughly enjoyed it while the entrepreneur in me mostly went "Why didn't someone think of this before, it's about time!"

It was fascinating to talk with Michael Sheen and Steve Solari, the CEO and COO of Skyhook. I first heard of Skyhook when Steve Jobs mentioned them in his Macworld keynote last year, with reference to this cool technology that uses wi-fi networks to determine location. When Michael and Steve talked about how it felt to be on the receiving end of a call from Steve Jobs (who said he wanted to work with them!) I got to hear the other side of the story. Very interesting start-up story. I hope to write another post soon with the details.

ThingMagic totally grabbed my imagination. The first iteration of my first start-up was built around the dream of a RFID solution until technical challenges forced me to adapt and switch to another technology. Therefore, when I heard that the technical challenge that had prevented me from building my prototype had been overcome, it was super-exciting to say the least! Hearing Yael Maguire, co-founder and CTO of ThingMagic speak was fascinating. They've partnered with Intel to build their RFID chip and Yael's description of how they solved the challenges of full duplex communication was educational. Having designed and built a prototype for a semi-duplex communication chip, I could appreciate the technical challenges. On the business side, it was interesting (and inspiring!) to hear about yet another start-up that was bootstrapped until very recently, which is when they took in their first round of funding. When ThingMagic CEO Tom Grant (a former VC himself) talked about how they carefully thought about whether or not to accept outside funding and the criteria they used to decide to take in extra money, I found myself nodding in complete agreement. As the founder of a bootstrapped start-up, I couldn't agree more that bootstrapping is the way to go if at all possible and that taking in VC money should be the last resort, not the first, like most first-time entrepreneurs tend to think.

To be continued.