Adonis Diaries

Archive for April 25th, 2011

Reid published ten rules for successful business ventures, borne from his experiences starting companies and partnering with great entrepreneurs in Silicon Valley.  I slightly edited the rules before commenting on the rules, this insane urge for going bigger and bigger once we start a company, and the lack of defining exactly the product for the reflecting on the relevance of a rule. You may read the link to the original http://greylockvc.com/2011/03/22/ten-entrepreneurship-rules-for-building-massive-companies/

Rule #1: Look for disruptive change.
If you’re about to start on a new venture, ask yourself: “What is becoming possible or necessary that wasn’t possible before? Is a new product (or service) able to take over an existing market or create a new market?” When I co-founded LinkedIn, the tech industry was in a deep depression. I looked at all the opportunities created by the Internet and had the idea that, eventually, everyone would need a professional profile online. The disruption was that people were able to directly reach the best candidates rather than hoping for responses from a listing in the paper or an ad on a Web site.

(I guess that disruptive change was empowering the entrepreneur for direct access to the best qualified professionals in specific fields.)

Rule #2: Aim big.
Regardless of whether a start-up is targeting a big idea or a small one, it will still require the same amount of blood, sweat and tears—so aim big! What is “big?” It is a new product or service that creates or dominates a significant market.

(The term “niche in a market” used to be the common expression in marketing studies, but again, it is better to venture into a stable and developed market.  For example, every specialty business are grouped on a certain street or locality for obvious reasons of clients attraction)

Rule #3: Build a network to magnify your company.
People tend to think that behind every great start-up is a single entrepreneur with a whiz-bang idea. The reality is great companies are built by a number of people with talent who are surrounded by amplifying networks. The most successful entrepreneurs bring in advisors, investors, collaborators and early customer relationships.

(The idea is to steer away from templates that dictate rigid principles for starting up companies.  The trend is to empower many early collaborators in the ideas generation, planning, and decision making.  Open discussion of the early problems are necessary for the designated decision makers in the start-ups.  For example, the enterprise “kharabeesh”, based in Amman, permitted the office kitchen employee to becoming their best animator, and the driver to lend his voice to Qadhafi…)

Rule #4: Plan for good luck and bad luck.
You should always assume you will have both good luck and bad luck with your new company. Good luck is not as simple as “it worked out.” Rather, this is when you discover a great opportunity and can quickly shift to go after it. Bad luck is what happens when your first idea doesn’t work. It doesn’t mean failure; it means you need to pursue plan B.

(No matter what some professionals insist on getting on with the business, and investing time on trial and error tactics, it is essential that meticulous research and comprehension of the business be the first building block.  Otherwise, how would you be able to selecting the best candidates for the job?)

Rule #5: Maintain flexible persistence.
Very often entrepreneurs are given conflicting advice: “Be persistent! Stay committed to your vision!” or “Pivot on key data! Know when to change!” The challenge is to follow them both, but know which advice is most appropriate for which situation. You must know how to maintain flexible persistence.

(I guess flexible persistence presumes a thorough knowledge of the business venture and the need to have confidence in the professionals in the field. How are you supposed to “Pivot on key data” if you are unable to making heads from tails looking at data?)

Rule #6: Launch early enough so that you are embarrassed by your first product release.
With my first start-up, Socialnet.com, it took us nine months to launch the first product. That was a disastrous mistake. We wanted to have all the detailed functionality right away, including social controls to people could decide to connect or not with the people in their networks. We wanted everyone to “Ooh” and “Aaah” about how terrific the product was. We wasted a bunch of time and it put us months behind on more important problems that needed to be solved, such as how to get our product in the hands of millions of people. From that I learned, if you are not embarrassed by your first release, you’ve launched too late!

(If you are not slightly embarrassed by your first release, how would you convince the customers that you consider “redesigning a product” is more important than patching faults and errors?”

Rule #7: Aspire, but don’t drink your own Kool-Aid.
Target excellence, but be very careful about blind trust or belief in your theories. It is important to launch as early as you can in order to learn how your customers use your product or service. It is equally important to identify metrics that tell you if your aspirations and vision are on target. You should also get feedback from your network in order to iterate or pivot on the target, the product and/or the service. In other words, maintain your aspiration but always look for good perspective on how you are doing. It is very easy for creative innovators to get caught up in their own story rather than learning where they should be headed.

(It means, factor in data collection process and timely analysis on clients behavior and feedback as an intrinsic part of the business.  How could you “pivot on the target” if you don’t believe that “data can talk”? How can you gain different perspectives if you refuse to communicate with the data from different venues?  How do you think financial multinationals are making such huge profit if not from mastering the process of gathering data and instant analysis and synthesis of the market responses, needs, and wants?  Fact is, financial multinationals do not speculate: they know for fact what is the outcome of every decision!)

Rule #8: Having a great product is important, but having great product distribution is more important.
I meet a lot of entrepreneurs who think the best product is the most important thing and that the best product should always win. What a lot of people fail to realize is that without great distribution, the product dies. How will you get your product in the hands of millions or hundreds of millions of people?

(That is the principle of vertical integration: Associate with a successful distribution company from the start.)

Rule #9: Pay close attention to culture and hires from the very beginning.
Your first hires set your culture, so make them good ones. These first people hire the next people and so on. The old wisdom was that you needed people with a decade more of experience in your start-up. The things a smart person learned a decade ago won’t help you now – you’re doing things that have never been done before, and the world and the competitive landscape are changing at hyper speeds. What you really need are people who can learn fast.

(Most important rule of all: every generation has a new brand of intelligence that is quicker and more adaptable to the new technologies.  You might be doing a huge mistake if you insist on not hiring from an older generations:  Knowing and adapting to the newer paces in technology is never enough for building a cohesive and sustainable business.  Any exclusion of older generation is a sure sign or amoral ethical conduct of the start-up:  Social movements of solidarity are fine-tuning their selection of companies of choices, not based on just good product, but on sustainable moral and ethical conducts)

Rule #10: Rules of entrepreneurship are guidelines, not laws of nature.
Do not pay too much attention to rules set by other people. Entrepreneurs are inventors. They are successful when they make something work for the very first time. Sometimes in order to make something work, you will drive over the guardrail of one of these rules. Entrepreneurs sometimes just make new rules.

(Do not be dominated by “template” success stories.  Reinventing the wheel is a great mechanism for discovering new ways of doing business:  Pioneers have necessarily missed to investigate many factors, and the new age has a different way to look at wants, needs, and problem solving.)

My first question to these rules is: Are we considering the new “ethical paradigm” of sustainable environment and life-style?  The key words in this generation are “green”, sustainable, rejuvenation, recycling, quality life-style, reforestation, climatic changes, water quality deterioration, toxic waste disposal and sites.  For example, why market a less than “clean” performing product and end-up dumping millions of outdated toxic leftover products?

My second question is: Are we researching how raw materials are being exploited and how the citizens of poor countries are being abused and robbed dry in order for your “great idea of a product” be manufactured and marketed successfully?


adonis49

adonis49

adonis49

April 2011
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