What ideas have good startup founders internalised?

There’s so much information out there for startup founders these days that it’s become important to sift between the good, the bad and the just vaguely interesting. When I look at books or stories that are intended for ‘the startup crowd’ I generally ask myself a couple of quick questions:

  1. Does it have reproducible data behind it (ie it’s about more than one company or person)?
  2. Is it actionable?

I think that probably means you can ignore 99% of the posts on tech blogs and news sites, but it does mean that some ideas stick and are worth learning more about. When I think of the founders I really respect there are a few ideas they’re all familiar with:

  • They have a good system for personal productivity — usually it’s some variation of Getting Things Done
  • They have an honest approach to team dynamics and working in groups — they know how important it is to overcome the Five Dysfunctions of a Team
  • They’re aware of how other people work — they respect different people’s ways of managing their time and don’t write people off just because they’re Quiet.
  • They know that listening to customers is the most important thing in developing a new product or service — they’ve probably read the Lean Startup or some Steve Blank.
  • They know that inspiration can come from completely different fields but it’s not about big breakthrough moments, just constantly improving your craft.

Of course it’s one thing to have read the books but quite another to be able to act on them. It’s about internalising ideas, not just knowing about them. I’m not sure how that process really happens (and obviously some people pick up all the above without reading any of the books) but the difference between people who’ve read the books and people who understand them is usually pretty easy to spot.

Mapping the landscape of social venture incubation

We’re well into the research for the Field Guide to Social Incubation now and finding lots of interesting things from the different ways people promote the support they offer through to clever ways of getting investors more engaged in the startups they support. We’re becoming very aware though there’s far more support out there than we imagined so we’ve set up a few questionnaires to gather information. The limitation unfortunately is that the questionnaires are in English and I’m starting to find that there are some really interesting programmes outside of the anglophone world. If you know of interesting programmes please do fill in the forms for people or drop me a line and I can get some translating help.

Here’s the page we’ve set up to collect data: ImpactIncubation.com
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The Power of Habit

We all do things without thinking about them. We swallow our food after putting it in our mouths without too much thought and it’s not too much trouble to put one foot in front of the other without having to remember how. The reason is that our brains have evolved to make it easier for us to not to have to bother to consciously think about some things — we’ve developed a neurological response which we more popularly call ‘habits’. The premise of Charles Duhigg’s book The Power of Habit is that if you can teach the deep parts of your brain habits that are useful, you’ll do them more often and without the pain of having to motivate yourself. It’s a very simple loop — a cue leads to an action which gives a reward. If you can set up that loop and practice, your brain will gradually learn to spend less effort thinking about it.

Once you’ve mastered that you can apply it to the things you want to improve in your life — whether that’s eating healthily, sleeping better or exercising more. There’s also pretty good evidence that some habits can become ‘keystone habits’. Exercise is the most obvious one — it turns out people who exercise regularly are also more likely to have good habits and although it sounds strange, people who make their beds are also more productive. I certainly found the whole of the first section of the book — which charts the emerging science of habit formation — pretty interesting.

The second two thirds of the book are about organisational habits and social habits. They include the harrowing story of the Kings Cross underground fire and the organisational dysfunction that caused it. It tells the story of Paul O’Neill’s reign as CEO of Alcoa which is a really interesting positive story which also has lessons about CEOs who by focusing on ‘shareholder value’ are probably getting things wrong. There’s also the story of how organisations can take advantage of the science of habits to make more money — something ‘big data’ has made much more possible. The example in the book was used to trail it — how Target knows whether you’re pregnant based on your shopping habits, sometimes before you do.

The final section looks at the habits of societies. It tells the story of how Rosa Parks personal protest became something much larger and changed the habits of a nation towards a whole section of its population — in part it’s a story of her habits and the way that religions at their best are a set of habits and routines and often have a hugely positive impact on the lives of their followers. It also draws in the science of social networks (which I know much better) to show how change spreads when the conditions are right.

It’s a fantastic book and well worth a read. As you might expect of a New York Times journalist it’s incredibly well written with a lyricism and attention to character that firmly pull you along. I don’t know whether it’s an accident but I’ve managed to get into the habit of running every day since I finished the book last week and it certainly made me want to get back into the habit of reading great books more regularly.

California Zephyr

Public transport in the US often leaves something to be desired but there are some real gems that most americans don’t seem to notice. The California Zephyr is perhaps the best of them all snaking up from the Pacific Coast all the way over the mountains, the desert and the plains to eventually trundle into Chicago’s Union Station 2,438 miles later.

(The original California Zephyr before it set off in 1949)

When we got up early last Friday, just getting to the train station proved an ordeal even though it was less than 4 miles away. Emeryville station is nothing to write home about and neither is the area — it’s just mile after mile of warehouses and parking for containers. Like many Amtrak stations, it was built in the late 20th century. The older Oakland station is now stranded on the other side of the interstate from the railway tracks. Nobody ever seems to have thought about connecting the new station up to other forms of public transport.

(The original starting point of the California Zephyr)

While the line is much older, the service and (approximate) route that runs today began in 1949. It skirts the San Francisco Bay up to the State Capital Sacramento then climbs up into the Sierra Nevada mountains, crosses Nevada, Utah and follows the Colorado River through some of the most stunning landscapes I’ve ever seen. The sun sets over the Rocky mountains as you descend into Denver where we ‘detrained’ but it continues on for another day to Chicago. The timetable isn’t designed to get people to the right place at a convenient time, it’s designed so that you travel through the most beautiful scenery in daylight.

(view from the train in Colorado)

The train itself has that American over-engineered feel — Â huge horsepower, thick riveted metal and soft but solid furnishings. It may not be beautiful (or fast) but it will last forever. Everyone who works on the train has character. Frank — who runs the snack bar — gave us regular updates on his cigarette breaks via the intercom. The menu for each meal was read with some pride because the food was actually rather good — certainly an order of magnitude better than planes I’ve taken recently (yes United and Virgin Atlantic, I’m looking at you) and you get to sit in the restaurant car chatting with the other people strange enough to take the train.

(The Rockies)

It took 32 hours to get from Emeryville to Denver and just over 2 hours to get back by air. But the plane back from Denver to San Francisco was joyless and claustrophobic — every cost salami sliced until there was nothing good left. Most americans we’ve talked to about taking the train think we’re mad but there’s something special about the Zephyr, something that’s long gone in the airline business — long may it continue its daily trundle of thousands of miles through some of the most beautiful scenery on Earth.

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Bottle keep

Another Long Now idea I liked this week was one that Alexander Rose introduced me to called ‘bottle-keep’ which originates in Japan. It’s the opposite of a tab in a bar where you drink for a while and then pay for your drinks at the end. At a bottle-keep bar you buy a bottle of drink (usually whisky) and it’s kept for you for future visits if you don’t finish it on your first go.

We had lunch in the office on Thursday and Ian Kennedy told the story of how on a slightly drunken night out in Tokyo he and a friend had stumbled into a random small bar. When they went to the bar, the owner disappeared out the back and came back with a bottle of whisky with the Ian’s name on it. It turned out that he’d been there 8 years previously with his father and the bar owner recognised him and had gone to find his bottle-keep.

The team at Long Now are planning on using a similar system for the new Long Now Salon which they’re fundraising for at the moment. As Alexander told us, “It turns out that the history of alcohol is pretty much the history of civilisation.” so expect lots of interesting ideas (and drinks) when it opens — hopefully in the not too distant future.

Secrets

This week’s Long Now seminar was a bit unusual. The talk was given by The UX — a clandestine Paris group who occupy, conserve and occasionally repair non-visible historic sites in in the city — mainly underground. They gave a presentation to show two of their projects which people have found out about (it became clear later in the evening that they’ve done lots of projects that nobody knows about) — the underground cinema and the secret restoration of the clock on the Pantheon.

The UX aren’t alone. In London, there are the people who documented the Royal Mail railway under the city and I also met some of the team who documented the Mothball Fleet in California. It was them who told me what’s in the big covered dry dock on Treasure Island in San Francisco Bay (pictured above) that me and Ivo spotted a few weeks ago. It turns out it’s even more spectacular than we imagined — a top-secret stealth ship called the Sea Shadow that was built at the height of the Cold War using the technology developed for one of my favourite planes — the Blackbird SR-71.

Here’s to the urban explorers. Long may they thrive in secrecy.

Accountability and accelerators

Daniel Epstein of the Unreasonable Institute has a really interesting blog post up about accelerator programmes and accountability. The context is David Cohen’s guess that there’s a new accelerator programme set up every day. He might be right. The number is certainly increasing on Jed Christiansen’s Seed-DB although the number of impact accelerators (which is what I’m looking at at the moment) is much more modest. I get a similar level of emails to Daniel from people wanting to set them up.

What worries Daniel is the significance of what startups give up to accelerators, namely shares in their companies. At BGV we get a 6% stake in the startups in return for the £15,000 we invest and the support they get during the programme. Daniel thinks that programmes should have a break point half way through where the startup can decide whether or not they think they’ve got that much value and he’s putting it into practice on the upcoming Unreasonable At Sea programme. I think that’s a good idea although for us it would make more sense for it to be at the end of the programme and possibly even six months after the programme when it becomes clearer what impact we’ve had.

I think all accelerators really need to get the stats right as well and publish them openly which is why I’m a big fan of Jed’s Seed-DB. Not all the numbers are meaningful for everybody — Paul Graham has written about fundraising being a misleading statistic for example (which I agree with) but some founders find it useful. The mark to market value of the startups is another metric that is used or some programmes look at how many jobs have been created or the total revenues of startups they’ve supported. There’s no settled way of measuring things yet but I’m fairly sure it will come with time.

When you add the social impact element to all this though, things get even more complicated. When you start to consider how to measure the social or environmental impact that all your startups have had it becomes a bit like three dimensional chess. I don’t think anybody has cracked that for early stage social ventures yet.

My only addition to Daniel’s idea and what Jed is doing is that I also think we should all be publishing our costs, although I doubt this is going to happen soon because compared to other investors, the ratios don’t look good. For the last cycle of BGV for example we invested £85,000 and the programme cost £60,000 in cash terms. From what I hear that makes us pretty efficient but you also need to bare in mind all the ‘in-kind’ support we got from Google, the mentors and lots of other people. Again, it’s complicated but we do all need to work on this to get some standards in place. It’s something I’m asking all the programmes I’m meeting for the Field Guide about.

Crocodile in the Yangtze

https://www.youtube.com/embed/FHlT3QxMqCs

I went along to see a screening of a new documentary called Crocodile in the Yangtze last night and it was excellent — if you get a chance, it’s well worth a watch.

The film was made by Porter Erisman who we met after the screening. It’s pieced together from ten years of footage from all kinds of places to tell the story of his time as a senior executive of Chinese tech company Alibaba. It follows the firm from the moment they left the founder’s apartment through to their IPO in 2010.

The main character in the film is Alibaba founder and former English teacher Jack Ma who comes across as a thoroughly decent and smart man, coping with the drama of startup life and eventually leading a company of 16,000 employees and tens of millions of users very well. He’s certainly up there with some of the leaders of better known US startups.

The film all tallies with what we found when we visited China earlier this year to learn about startups and investors there (Anna’s written about it here). The story of Chinese startups just being copy-cats and somehow suppressed by the political system just didn’t seem to be true. As Porter said at the screening last night — there are more similarities than differences between US and Chinese startups in the early days.

Anyway, it’s a much more interesting startup movie than the Social Network. If you’d like to organise a screening near you, drop me an email and I can put you in touch with Porter.
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Process

There’s a quote in this Wired interview with Elon Musk that got me thinking:

I don’t believe in process. In fact, when I interview a potential employee and he or she says that “it’s all about the process,” I see that as a bad sign. The problem is that at a lot of big companies, process becomes a substitute for thinking. You’re encouraged to behave like a little gear in a complex machine. Frankly, it allows you to keep people who aren’t that smart, who aren’t that creative.

I’ve also noticed that debates about ‘process’ can be time and enthusiasm-sapping — especially in startups. Certainly the best teams I’ve worked with haven’t had process, just lots and lots of ideas, problem solving and getting things done. Having said that if you don’t have a process for the mundane you can end up spending all your time coping with it and having no time for trying new things. Perhaps the thing you need to do is separate out things that just need to be made as simple as possible from things where you need to do something that nobody has ever done before.