venture capital

When All Hell Breaks Loose, Startups Need a "Wartime CEO"

wartime.jpg

In his great book, The Hard Thing About Hard Things, Ben Horowitz talked about being a “Wartime CEO”. It was the first-time I had ever heard that expression but it resonated powerfully. Reading that book was akin to drinking a double espresso at 10pm. I did not put it down until the wee hours of the morning. It is now “required” reading for all my students. So what’s the difference between a peace-time and a war-time CEO of a startup? Every startup is rife with incredibly trying experiences after all. My understanding of what Ben means by the term “wartime CEO” is a CEO who is running the company when all hell breaks loose- not for a few weeks- but for months- even years on end. It means you’re living on the knife’s edge between survival and death for long periods. It is evident that Ben’s difficult experiences at Loudcloud/Opsware indelibly shaped his mentality and approach to startup life. He’s the unique combination of someone who has both a kind and gentle demeanor and the courage to do whatever is necessary to pull a company back from the abyss.

He says that "peacetime in business means those times when a company has a large advantage over the competition in its core market, and its market is growing" and gives the example of the Eric Schmidt era at Google. Ben added that at Loudcloud he was probably "a peacetime CEO for three days and wartime CEO for eight years"!

Upon reflection it occurred to me that you don’t choose what kind of CEO you’re going to be. Circumstances dictate what goes down in your entrepreneurial life and you need to play the hand that you’re dealt. It’s how you play that hand that ultimately defines you as a startup CEO.

I too was forced by circumstance to become a “war-time” founder in my first startup. I was young and naive about so many things. There were no blogs and “startup communities” back then to go to for advice and support. We were expanding and opening our healthcare facilities in states up and down the east coast. In one state, however, BCBS & Medicare pulled the rug out from under us just months after providing written assurances that they were going to cover our treatment. I’ve written about this before here.

This was the equivalent of walking into a bar with a smile on your face to meet up with friends and suddenly getting cold-cocked by a massive punch. That blow immediately put our existence in jeopardy. People’s livelihoods were at stake- people I had hired- people who in some cases had moved across the country to make this happen. Long-term leases had been signed with personal guarantees to banks. If this facility blew up we were screwed in more ways than one. This decision, by an influential insurer with many tentacles, could have spread to other geographies and other insurance companies. We could not allow this precedent to stand.

It took us two years of jungle warfare to come back from that blow. In the meantime the survival of that facility hung over our heads like a black cloud. For those 24 months, tough and brutal decisions were the only decisions that presented themselves. There was no respite; there were no “breathers”. It was an ugly and scarring zero-sum-game. Ultimately we fought our way back and won but the personal and psychic cost was immense.

This experience (and others) deeply shaped my mindset forever. It molded me as an entrepreneur, as an investor, as a teacher and as a coach to many.

As an investor now, I’m always on the lookout for entrepreneurs “on a mission” who have the courage to face outrageous and unexpected challenges- people who have no quit in them.

As a coach and teacher- I’m giving out smelling salts early. I want folks to know what they’ve signed up for and to expect the unexpected.

 

Sometimes Nothin' Can be a Real Cool Hand

This is part of my Series on Entrepreneurial Culture.

There are many occasions in the life of an entrepreneur or investor when bold action is required: Do we make this acquisition? Should we hire this developer? Do we offer them a term sheet? Tweak the pricing? We've all been faced with such critical moments when a decision needs to be made.

In fact, it's very much the archetype of the "decisive man/woman-of-action" that is etched into our collective imagination when we think of the qualities of a successful "leader". Lately an entire science of leadership has sprung up with an army of "coaches", "leadership experts", leadership masters degrees and the like suddenly available to us. Thousands of business books and academic case-studies extol, analyze and critique the decision-making prowess (or lack thereof) of executives and investors in American business.

It's an amazing phenomenon and I certainly don't begrudge anyone who makes a living from this. I have, however seen this stuff poured into more than one executive's head (by people with zero business experience) with dire consequences for their businesses. Bias based on skewed perceptions of "leadership", "action" and their perceived benefits, leads many executives down a mistake-filled path.

Interestingly, amidst all the noise about leadership and action, one rarely encounters stories about the wisdom of “non-action” – the wisdom to defer or to simply say “no”.  Among investors, for example, one rarely hears a discussion of one's "negative portfolio", (the investments that were considered but that didn't get made). Similarly, among entrepreneurs we only occasionally hear stories about the decision "not to hire that guy", or "not to sign that industry partnership". I guess it's just easier for us to talk about things we've actually done as opposed to things we decided not to do, even though our “non-actions” are every bit as important as our actions.

The reality is, sometimes the best move of all is to wait a bit before making a decision. What's wrong with thinking things over, letting it all settle a bit? Why get into this rush-to-action mentality?  Perform your diligence, lend the decision the time it deserves.

If you don’t feel ready to make a decision, the right answer may well be to do nothing. If you’re feeling pressed into a decision, the right answer is probably “no”. Watch some of the great Russian chess grandmasters play and you'll notice how they'll often repeat moves twice in critical positions before the time-control, giving them extra time to mull over a particular committal move.

Watch some seasoned executives take their sweet time when talking to competing companies hoping to hire them. As everyone else drips with sweat, they're the coolest ones in the room. And let's face it, most of the time deals we're working on take much longer than we thought they would. Sometimes they drag on endlessly and tempers get short. The key is not to react to provocations. Stay cool and watch the situation play out, i.e., do nothing.

So although there are times when decisive action is absolutely required- as Paul Newman puts it in the video above, "sometimes nothin' can be a real cool hand".

Brother Mouzone on Respect & the Value of Your Word

(click on this link to play video)

This is part of my Series on Entrepreneurial Culture.

As Chris Dixon has aptly pointed out in a recent post, start-up culture is very much built upon people's reputation and their word as opposed to the transactional/legalistic constructs of corporate culture.  Once the word is out on someone being unreliable, mendacious, mercenary or worse, his/her career in the local ecosystem is pretty much over. Angel, VC, Entrepreneur, Lawyer- it doesn't matter. No one will fund them or want to be funded by them again and they will have difficulty finding people to work with or for them. So whereas this kind of behavior is often ignored or tolerated in corporate environments, the self-regulating "street-justice" of the start-up community is often much swifter.

So if you're just stepping into the entrepreneurial scene, have a listen to the video above (by clicking on the photo) in which Brother Mouzone lets Avon Barksdale understand exactly what's at stake in no uncertain terms. You could tell Avon knew the deal the minute Mouzone stepped into that barber shop. 

As they say in The Wire, "the game is the game".

Update on My New Role @Columbia

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If some of you were wondering why I've been so slow on email for the last few months or more likely- where the heck I've been of late- here's a quick update:

I'm happy to say I've recently been appointed as Director of Entrepreneurship @ Columbia University. Our mission is to take the whole university to the "next level" and establish the conditions wherein startups and the culture of startups are encouraged throughout the university. Obviously there's a ton involved with stimulating cultural transformation- but a large part of that is helping cut through all the silos and encouraging the various schools to work towards the same goal. As we all know Entrepreneurship is multidisciplinary by nature and great founding teams by definition are comprised of people with complimentary skill-sets.

In the short time we've been operating we've had great speakers to campus (including Jack Dorsey: video here), tons of events and programming, have launched VC office hours, legal startup office hours, immigration office hours and are planning Columbia's first entrepreneurship festival for the Spring. We've also unleashed an elite layer of startup-school/acceleration for some of our more advanced startups called CSuite. Some heavyweight Columbia alums are helping move the needle for these teams- including Amol Sarva, Inaki Berenguer, Jared Hecht, Brandon Kessler and many others. 

I'm also just so fired-up to be working with some incredibly accomplished colleagues. These guys think big and just make stuff happen:

  • On a day-to-day level I work with Emeritus trustee Richard Witten, a former vice-chair at Goldman Sachs, who really initiated the push for this initiative @ Columbia 
  • Our Board is just incredible: the legendary Bill Campbell, Ben Horowitz, Chris Dixon and others of this ilk to give us direction and advice along the way.

We just launched the website. Check it out when you have a moment and if interested feel free to sign up to receive periodic updates. Follow us on twitter here.

Lastly, I'm still blogging here and still teaching my startup classes at the Business School where I enjoy working with so many talented and enthusiastic Columbia students.

I'll keep you posted as all this develops.

Hope all is well, Dave

@jack during his visit to Columbia. cofounder of Twitter and Square

Measuring Founder Strength

This is part of my Series on Entrepreneurial Culture.

I recently came across this absolutely awesome post as well as the accompanying infographic above having to do with identifying the sort of founders investors can feel good about backing. It was written by Saar Gur a partner at Charles River Ventures.

Saar points out that his fund has developed an IQ-like quotient (the "Founder Quotient") for determining founder strength after many years of tweaking and refinement.  A number of these insights may in a broader sense be similar to others we've seen over the years, but if you go through them carefully you'll find a lot of originality and nuance here. The line, "startups are like chess" and the "Values" section resonated with me in a huge way. I think angel and seed investors would do well to really pay attention to these and add them to their body of knowledge. Here they are:

  1. Original product thought. Most founders copy. We look for the 1 percent of founders who have their own original strong views on how to build a great product (e.g. it took a Steve Jobs to set the touchscreen standard for smartphones).
  2. Psychological factors. What drives this person? Are they driven to face the adversity and uncertainty of startups? Do they have a chip on their shoulder and/or something to prove? Do they have a strong desire to win? Are they willing to make the sacrifices required to succeed? This is often influenced by their childhood.
  3. Authenticity. Does this company align with the founder’s beliefs and values? Do the founders care deeply about the problem they are working on? How passionate are they?
  4. Unique market insight. Do they have a unique insight into what the problem is, market timing, how the future may play out?
  5. Intelligence. IQ, EQ, self-awareness, ability to hold convictions loosely, etc. Startups are like chess. The founder needs to be able to think several moves ahead as it relates to product decisions, business decisions, and people decisions.
  6. Values. Are they honest? If they are in a people-intensive business, do they genuinely like and value people or are they too focused on themselves?
  7. Judgment. Product judgment, people and hiring judgment, etc. Do they exercise good decision-making skills no matter how small or large the decision?
  8. Experience. Are they uniquely capable of executing? Do they have a relevant 10,000 hours?
  9. Ability to recruit. Includes selling a vision, being respected, build a cross-functional team, having a network, etc.

The entire "Values" section, though short, is actually massive. I've made this mistake a couple of times already. People too focused on themselves don't really value other people at all. Huge problem with a founder.

Figuring all this stuff out takes time, doesn't it? It's a good argument for not rushing into an investment. I'll also add that checking out a list is something anyone can do- but being able to "know something when you see it" takes a lot of experience. What also never ceases to amaze me is that a founder you might want to invest in might have all of the above qualities save one, but it's often that one missing piece that destroys everything. 

Anyway, many thanks to Saar for sharing some serious wisdom with us. Wow.

Entrepreneur Survival Guide: Some Motivation, Courtesy of Uncle Nikolai

This is part of my Series on Entrepreneurial Culture.

"I tattooed 'survive' on my hand the night before I went away to prison. And I did. We do what we have to do to survive..."
Uncle Nikolai (25th Hour)

I've posted here about how to deal with massive and unexpected knockout-type punches as an entrepreneur. But there's another type of dangerous threat to an entrepreneur's well-being and survival:

It is the phenomenon of interminable waiting.

You see, entrepreneurs are always in perpetual motion, hurrying from one task to another, taking calls, having meetings, raising money, cajoling, selling, emailing, tweeting, blogging, hiring, partnering, selling some more, stressing, exhorting others, and so on and so forth. To the outside world it all seems like a dizzying whir of movement. Less visible is the fact that this is exactly how the entrepreneurial species waits. Waits? Waits for what exactly?

Think about it. You know what I'm talking about. It's that internal clock we have ticking inside that's coldly tracking the next milestone in our business amidst all the apparent chaos: private beta, first product release, first customers, first investor, Series A, hitting break-even, that big partnership, that first million in revenue, that first bad-ass hire, that first good piece of PR, that first big spike in traffic, and on and on. It never ends. We feed off of it- we live for it.

The problem is, most of these major milestones seem to take forever to materialize. There are always delays, endless obstacles, issues, difficulties, crises that delay our progress. We're fighting inertia, indifference, short attention spans and it's inevitable that moments arrive when our resolve, our will, our morale and in many cases our cash begin to melt away. That internal clock of ours so intent on progress gradually goes haywire and all this interminable waiting begins to cause despair. Thoughts of capitulation slowly creep into our minds...

How we handle and see our way through these moments define who we are as entrepreneurs and whether we survive or die.

That's why I recommend you rent and then watch a certain scene in 25th Hour several times. It is the scene in which Uncle Nikolai describes to Ed Norton's character how he survived through his toughest moments in life. (Norton's character is facing seven long years in prison.)

Sometimes we entrepreneurs need some inspiration and encouragement and this scene will fire you up if you are out there now giving it your all- trying to survive. Let me know what you think.

выжить = survive   :)

An Entrepreneur's Commandment: Do What Thou Lovest

“I would rather have played for Wales at Cardiff Arms Park than Hamlet at Old Vic”
Richard Burton

This is part of my Series on Entrepreneurial Culture.

When I learned that the great Richard Burton had uttered these words I felt I understood him a bit better. After all, here was perhaps the world's greatest actor admitting that he had always treasured the thought of playing rugby for his native Wales above all else- even above the craft for which he was known throughout the world. In Burton's case this was no idle thought as he had been by all accounts a fantastic rugby player in his youth. He was also known to often express great discomfort and ambivalence towards the art of acting with all its inherent 'artificiality' as he put it.

Much like some very talented entrepreneurs I come across from time to time, Burton strikes me as a person who suffered from what I call "the problem of abundance". He was simply supremely gifted at too many things for his own good!

This is actually a real problem certain would-be entrepreneurs face. A combination of enormous enthusiasm, massive intellectual curiosity and wide-ranging interests can make it incredibly difficult for a multi-talented person to choose the right entrepreneurial path for themselves. Some simply sense that one singular venture might too confining, too limiting for them.  Further, the knowledge that driving a company to success requires an absolutely relentless focus can be extremely daunting for someone who suffers from this 'problem of abundance'.

Another type of problem certain would-be entrepreneurs face is simply choosing a business for which they are not well-suited. (I actually doubt Richard Burton had this particular problem though his relationship with acting may well have been one of the love-hate variety). I have encountered many people who get into business by happenstance, or by 'falling into it' by some chance meeting, or worse. This too can be a recipe for disappointment and can lead to years of toil in a field that bears no interest and enthusiasm for them. Burn-out is an inevitable result.

It strikes me that the solution here is to first take the time to understand what drives you and why. Thereafter, you can pursue an entrepreneurial calling that you care deeply about, in which you know can roll up your sleeves and really try to make a meaningful difference.

The late, great John Wooden, (he of 10 NCAA Championships), may have said it best:

"Be true to yourself, help others, make every day your masterpiece....."
Cardiff Arms Park, Wales

Cardiff Arms Park, Wales

Startups Aren't A Fashion Show

This is part of my Series on Entrepreneurial Culture.

A good friend of mine who played in the NFL once told me that the biggest difference between the college game and the pros is the ferocious speed and the sheer density of the players. This stunning contrast was most often encapsulated for him during the course of the many outrageously violent collisions in which he participated. He has remarked on several occasions that the dramatic impression established in those first few days in the pros has never left him. Simply put, the NFL is a reality-check and a wake-up call to anyone and everyone associated with it. You absolutely need to put it all on the line and there is no place to hide. Just looking the part isn't enough, or, to borrow an oft-repeated football phrase, players who are "built like Tarzan and play like Jane" simply don't last very long.

I would hazard that the world of startups and entrepreneurship is very similar. If you want to build a successful company there are simply no excuses or shortcuts. It simply has to be an "all-in" approach that's all about commitment. Putting together a nice powerpoint presentation, executive summary, market analysis and making a nice pitch doesn't mean very much. So don't get lulled into the little self-congratulatory bubbles out there where it's all about "presenting to VC's" and 'honing your elevator pitch' and doing the business plan competition circuit.

Remember, startups are not a fashion-show or beauty contest- it's all about executing in the marketplace.

For better or for worse, the same applies to getting funded these days. Many first-time entrepreneurs have a deep misunderstanding about the investment climate out there and not only waste a lot of time seeking capital before they are ready, but also hurt their company's reputation in the process. More than ever, angel investors and VC's want to see a product that you have launched in the marketplace before they will even consider funding a startup. There are legions of people running around with beautiful and well rehearsed powerpoint presentations that describe pre-product and pre-revenue businesses with essentially the same pitch: "If only you would give me $___, I could build this."  On very rare, outlier-type occasions an investor will back you anyway because he or she thinks you have amazing potential- but remember, this is incredibly rare!

Imagine now how different your pitch would be if you could show investors your product, your customers, your adoption, etc. That first impression would be so dramatically different! Think about it- you have struggled, boot-strapped, put your own sweat and sometimes money into making this real. Most investors will immediately respect you for this, whether they like the business or not.  It distinguishes you immensely- especially in these tough times.

Below are a couple of quotes I will end with from some of the 'pro-level' guys out there. I insert them here both as a reality check, a challenge and perhaps to fire you up. I like these guys because they don't put a veneer out there and let you know exactly what they are looking for or what they think.

"If you’ve made an amazing product that I should consider for one of my ten yearly investments please send the URL of this product to------------ and cc me -------------- to get the ball rolling. No business plans, models or decks–I won’t open them. I only invest in real products built by killers. I don’t invest in powerpoint decks or bullshit business models–show me the product!"
Jason Calacanis
"The startup is a magical place. It's a place where expenses are someone else's problem..... It's a place where you can spend other people's money until you figure out a way to make your own..... The problem with this magical place is it's a fairy tale....
.... So don't use the idea of a startup as a crutch. Instead, start an actual business. Actual businesses have to deal with actual things like bills and payroll. Actual businesses worry about profit from day one. Actual businesses don't mask problems by saying, 'It's OK, we're a startup." Act like an actual business and you'll have a much better shot at succeeding."
Fried & Heinemeier-Hansson in Rework

Entrepreneur Alert: Don't Choose the Wrong Song!

This is part of my Series on Entrepreneurial Culture.

Sometimes, when Simon Cowell tells American Idol contestants that "you chose the wrong song" or "that was a bit indulgent", it makes me think of entrepreneurs I've seen jumping into the wrong business without enough thinking and preparation. Often, the Idol contestants will sheepishly nod in agreement or mutter some sort of wistful explanation such as "well, the song really spoke to me", or "I saw it and just started playing it in rehearsal". Simon, more so than the other judges then will often remind the contestants that they are actually participating in a competition.

It's of course great to be enthusiastic, but one thing I've learned over the years is that one has to save that enthusiasm and energy for the right opportunities! Starting a new business is such a massive commitment that simply being "enamored with the idea" does not suffice. Too many entrepreneurs looking for their next business look at opportunities through the prism of their eagerness to get cracking right away and don't ask the hard questions about the market, customer adoption, the competitive landscape, etc. Inevitably this leads to a lot of wasted time, money and enormous disappointment. So if you are between start-ups and by nature an incredibly enthusiastic person, here are some things to consider:

  • For once in your life, just take your time- do your diligence and don't rush into a new venture
  • Put out a lot of feelers and meet with lots of people who see a lot of deal flow in your community
  • Surround yourself with a few sober, experienced advisors who can help you assess things
  • If you have no domain expertise in the proposed venture no matter how cool it sounds, it's probably a bad idea- so be really careful
  • Approach this in-between phase professionally and impose a disciplined approach on yourself
  • As candidate opportunities arise talk to potential customers, investors, domain experts and develop a keen understanding of the addressable market, the competition, barriers to entry, capital requirements, etc.

I hope this helps. Let me know your thoughts.

The Ideal Venture Capitalist: Top Ten Reasons Sherlock Holmes Fits the Bill

This is part of my Series on Entrepreneurial Culture.

If you’re in the mood for a really enjoyable film I recommend you see Guy Ritchie'sSherlock Holmes. In it he uses the latest movie-making technologies to literally bring-to-life 19th century London in all its dark immensity and brooding menace- from the elegant halls of parliament to the ornate rooms of masonic temples to the labyrinthine sewers beneath the city. The sets and staging in and of themselves are a masterpiece and are simply breathtaking. I think the production designer should be nominated for yet another Academy Award.

For the Sherlock Holmes aficionados out there, I’ll also venture to say that Robert J. Downey, Jr. is terrific in this latest incarnation of the great sleuth. He brings an athleticism and playfulness to the role that is a fresh twist to any cinematic adaptation I have seen. I have an inkling that his performance would bring a smile to the face of the venerable Basil Rathbone and perhaps even to that of the great Holmesian master, Jeremy Brett himself, were they still living.

I too came to this film with a sensibility that I did not have when I first encountered Holmes as a young boy reading Conan Doyle. I was of course neither an entrepreneur or an early-stage investor back then. Not surprisingly, this time, soon after leaving the theater something I had never considered before really hit me. I was struck by the realization that Sherlock would have made an amazing venture capitalist! "What a perfectly silly notion my dear Watson!", he would no doubt have replied. But I would have to insist and say that VC's and Angel Investors young and old would do well to emulate some of Sherlock’s best qualities. Here they are as I see them: 

1) Complete and Utter Attention to his Clients:

When he meets with someone, his total absorption in their presence is legendary. (He would, for example, never dare distractedly glance through his mail when receiving a guest- as many a VC are criticized for doing with their smart phones.  He also is incredibly respectful and courteous to his clients, always responding to their telegrams promptly. 

2) Immensely Perceptive and Observant:

LP’s looking for capital efficient managers take heed! Forget about your GP’s spending money to perform diligence on entrepreneurs. With Sherlock as the Managing Director, he can tell you a person’s entire story and background after the first meeting! He takes the meaning of due diligence to another level entirely.

3) He’s a World-Travelled, Experienced Entrepreneur Himself:

Worried (as Hoegaerden is) about “sub-prime VC’s”? Holmes is no newly-minted, blue-blazered-stiff-of-an-MBA just off the VC conveyor belt with no life-experience. He’s traveled the world, has enormous wisdom and runs the 19th century equivalent of a garage start-up consultancy with Dr. Watson.

4) Massive Intellectual Curiosity, Great Erudition:

Here’s a VC who doesn’t rest on his laurels and past accomplishments. He is constantly learning, reading, studying and staying abreast of new trends, the news, the latest technologies. He is the first Western martial artist, a naturalist, an amateur chemist par-excellence and an early adopter of the newest technologies and techniques available.

5) Loves the Big Idea, Huge Risk-Taker & Admires Disruption:

Here’s a true innovator not content with following the herd and investing in the latest incremental fad. He himself is disrupting the law enforcement industry with his own super-lean startup! The bungling bureaucracy of Scotland Yard and Inspector Lestrade are no match for Holmes’ home-grown operation with a staff of two, (three if you include his landlady, Mrs. Hudson).He’s confident and capable enough to trust his own vision and therefore is ready to tackle the biggest, toughest, most elusive problems in the marketplace!

6) Great Mentor, Coach and Board Member:

He leads by example, has intelligently advised innumerable clients and has helped Watson hone his now considerable skills as a crime-stopper. He anticipates events, predicts how people will react and has a keen sense of danger. Such a mentor could help any entrepreneur with the sales, marketing and hiring process, not to mention with the design of an effective strategic plan. He would make a great Board Member.

7) Great Ear for the Customer:

When it comes to understanding the views of the man on the street, no one is better than Holmes. He’s as comfortable in the elegant drawing rooms of 221B Baker Street as he is on the vilest lanes of London, has roughed it in disguise many a time and is known to have eyes and ears throughout the city. He has no allegiance to class, no patience for pomposity and judges a person on their individual merits.

8) Driven with Enormous Energy:

Here’s a guy who loves his job, pulls all-nighters regularly and will take almost any meeting. He’s relentless and ultra-determined when trying to solve a problem and this is infectious to the entrepreneurs he funds and advises.

9) High Standards & Innate Sense of What is Right:

Holmes is always very exacting of Watson and those around him, but never more than he is on himself. He takes on each engagement with an enormous sense of purpose and sense of what is inherently right. As many have said, he has his own sense of justice that is at times distinct from the rather blunt and un-nuanced version often displayed by his lemming-like colleagues at Scotland Yard.  A loyal teammate with an unfailing moral compass, he is an enormous asset to the companies in which he invests.

10) Sense of Humor:

Lastly, as Robert Downey Jr. exemplifies so well in the film, Sherlock has a terrific sense of fun and playfulness and mischief- rarely taking himself too seriously. It is always disarming and endears him to Watson and many of his clients.He is respectful and yet irreverent all at once.

Mischievousholmes
Mischievousholmes

Partnering with “Friends” in Your Startup: Good or Bad Idea?

This is part of my Series on Entrepreneurial Culture.

Lots of people worry about partnering with friends when they launch a startup. This is mostly because there’s an old saw out there, deeply ingrained in our collective consciousness about how the best way to ruin a friendship is to get a friend involved with anything having to do with money, business and the like. I’ve heard this meme repeated ad nauseam throughout the years in the form of “advice”, mostly from non-entrepreneurs, parents, grandparents and others who have never actually been involved in business. I actually think this should take its place among the annals of the most commonly dispensed worst pieces of advice given to entrepreneurs. In my view it’s just a gross generalization based on some seriously flawed views about business and friendship alike.

Obviously if you are thinking about partnering with anyone, let alone a friend, it should be because you believe that person will add a great deal to the business you intend to build. You should never partner with someone for the sole reason that you trust them and feel comfortable around them. Nevertheless, if you are considering partnering with someone who will bring enormous value to the new venture who also happens to be a great friend of yours, you are actually incredibly fortunate. Now you won’t have to spend any time worrying about your partner's character, capacities or loyalties and you both can focus 100% on building a thriving enterprise. To boot you'll have a trusted friend in the same foxhole as you embark on one of the most challenging aspects of human endeavor- a startup company.

There’s a slight catch, though. One thing you’ll absolutely have to do before making such a momentous partnering decision is to ask yourself whether this person is really a true friend of yours. As we all know, the word “friend” is a catch-all and can mean almost anything, as in "My good friend, the Congressman from the great State of ....". You get the picture I'm sure.

So let me replace the old saw above with abetter one: “Know who your friends are”. If it’s someone you’ve relied on for years through thick and thin, someone who’s loyal, unselfish, fair-minded and puts your interests right up there with his or her own- you are talking about a friend. If it’s someone you started following on twitter last month who tweets about the same cheeseburger you like at Shake Shack- it might be time to take stock of things.

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Remembering Dersu Uzala, Siberian Entrepreneur

This is part of my Series on Entrepreneurial Culture.

It occurred to me recently that when you find yourself around folks that take great care to cultivate the particular ecosystem in which they dwell, the environment is always uplifting and enriching. A recent venture event I attended of this kind brought to mind that great character, Dersu Uzala, who Kurosawa immortalized in one of my favorite films of the same name.  So as to set the stage for my main point, I’ll recall now one of the early scenes from memory, so forgive me if I omit some details.

On a freezing cold night in the Siberian forest a group of Russian soldiers are suddenly joined by a mysterious Nanai tribesman as they sit warming themselves around a fire. He seems ancient and does not greet them as they sit in stunned silence watching him as he slowly lights his pipe. After some minutes he breaks the charged silence and strikes up a conversation with them. It turns out that this is the beginning of their remarkable adventure with this nomadic tiger hunter who serves as their guide through the wilderness. The men soon learn that wherever he goes he is looking out not just for himself, but for those around him and who might come after him. Twice he saves the lives of Captain Arseniev and his men by virtue of his great experience and wisdom and in one scene they watch with fascination as he leaves some food behind in a remote shelter for anyone that might stumble there after their departure.

The Russian soldiers never forget Dersu. If you’re able to rent the film from Netflix, I doubt that you will forget him either. Let me know what you think.

We who make our livings in the world of start-ups also dwell in our own precious ecosystem comprised of entrepreneurs, investors, advisors, inventors and technologists. It seems to me that how we tend to it and how we treat each other along the way will be the ultimate measure of how much we can achieve.

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Etymology of the Word Entrepreneur

This is part of my Series of Entrepreneurial Culture.

I was actually thinking about the word entrepreneur itself recently and found this entry from Wikipedia interesting: http://en.wikipedia.org/wiki/Entrepreneur

“…The word "entrepreneur" is a loanword from French. In French the verb "entreprendre" means "to undertake," with "entre" coming from the Latin word meaning "between," and "prendre" meaning "to take." .... Entreprenuer also sounds close to a sanskrit word anthaprerna which means self motivation.”

One can sometimes learn a lot from the root etymologies of words. This one seems to boil it down to its essence quite well doesn't it? Entrepreneurs evidently “undertake” things and they are “self-motivated”. It’s quite an elegant word as well. Entrepreneur. Sounds better than under-taker :)

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