Hello everyone and welcome to 2018! It’s going to be an exciting year.
I’ve kicked off the year by writing a bimonthly column for YourStory (http://www.yourstory.com), the TechCrunch of India. My goal is to answer questions from Indian entrepreneurs and share my experiences with them.
So far so good! I have written two posts which have been read by thousands of people and delivered hundreds of great questions. You can see the first two here:
First Round Capital recently shared advice from Adam Pisoni (co-founder of Yammer) about how to scale oneself as a technology leader. He gave five tips, including one he learned from General (Ret.) Stanley McChrystal. This made me wonder what the military solution equivalent would be for Adam’s other 4 suggestions. After a bit of research, here is what I discovered:
Roles & Responsibilities
According to Adam, “Without clearly defined accountabilities, it’s easy for companies to become paralyzed by decision debt and arguments.” The military uses something called the “G-staff model” to help define roles and responsibilities. Each branch of the military uses this model to define one leader as responsible for each of the roles below:
G1 – Deputy Chief of Staff for Personnel, G2 – Deputy CoS for Intelligence, G3 – Deputy CoS for Operations, G4 – Deputy CoS for Logistics, etc.
From there, they have a team to support the execution and function. The U.S. Army Material Command does a good job of explaining it here.
Adam covered this one well by using lessons from General McChrystal. Adam credits McChrystal for “creating a process where every single day for 90 minutes, thousands of people from all over the world would dial in to a rapid-fire update meeting. Each group had 90 seconds to say what they did, what they’re doing next and what the risks or blockers are.” By holding a weekly standup, McChrystal was able to ensure that everyone possessed the appropriate amount of baseline information to execute missions quickly and effectively.
The major lesson here is that members of the tech industry should aim to “stop repeating mistakes.” The military uses After Action Reports (AARs) to evaluate the success or failure of missions and learn how to improve for the future. I tackled how the Navy uses AAR in a previous post about development, and Craig Mullaney does an excellent job explaining the AAR in more detail here.
Planning and Prioritization
Adam outlines a strategy for how to best create plans, but I think the most interesting part is how he concludes: “based on your new priorities, decide what you’re going to STOP doing.” To accomplish this, the military uses the appropriately named Military Decision-Making Process (MDMP). The MDMP is a 7-step process that is explained in detail in this textbook, but essentially comes down to understanding the mission, developing appropriate Course of Actions (COAs), war gaming the COAs, and then executing.
As Adam points out, tension between employees is inevitable. Evidently, the military agrees. They have a position – the executive officer (XO) – who helps to resolve tension within a unit. Going into each new project/initiative, the XO will convene all relevant parties/stakeholders to identify issues, allocate decision-making space, and hash out solutions. Adam agrees with this process and says, “instead of digging in and trying to resolve tensions as a leader, your only goal should be to make tensions public.”
I’ve given a lot of pitches – to investors, customers, friends, and to really anyone willing to listen. Some go well and others are complete disasters, but all give me the opportunity to make the next one better. Recently, I was given the opportunity to pitch our product, Napwell, on ABC’s Shark Tank.
Shark Tank was never on our list of priorities. My co-founder and I were in the middle of our Kickstarter campaign, which achieved 130% of its goal, when we saw a tweet from the casting director. Being huge fans of the show, we had to give it a try.
While I have successfully raised money from investors and have even been on TV before, being in “The Tank” was so different. Sure, it’s like a normal investor pitch, only with millions of strangers watching you share your dreams (no big deal). Here are three lessons I learned that can hopefully help you start your company or survive a tough pitch.
Set the stage
The show is structured to make the Tank intimidating. The Sharks are not only professionally impressive, but also very experienced at sparring with entrepreneurs and making compelling television.
When strategizing for the pitch, I recalled advice from my high school tennis coach: playing to your opponent’s strengths puts you at an immediate disadvantage. In other words, instead of being reactive, be bold and set the stage. The first iteration of our pitch was completely different from the one that aired – it was dry and filled with statistics to highlight our scientific backgrounds.
At the last minute, we scrapped our initial plan in favor of pajamas and sleep zombies. We thought our pajama look would force the Sharks to question our legitimacy and lead them to ask the questions we wanted to answer. We knew that our strength as a company is our academic backgrounds and entrepreneurial experiences. It was probably a shock to them that Justin is a PhD candidate and that I have already launched a few start-ups.
This lesson extends beyond the Tank. While pitching a product, the more you control the flow, the more confident and prepared you will be. Setting the stage is especially important when presenting to a group with as much experience as the Sharks.
Always be selling (and closing)
Preach, Alec Baldwin, Preach.
While Shark Tank is an amazing and rare opportunity to pitch to a powerful group of investors, it is also a way to share your brand with millions of potential customers. Even if all the Sharks passed, we knew that there were future investors, partners, and customers watching at home.
While answering the Sharks’ questions, we tried to make sure that the audience understood the problem that our product solves. To make our message as clear as possible, we created a list of three talking points:
We are experts in sleep science
We have achieved lofty sales targets without spending a single dollar on marketing
We are solving a problem that affects hundreds of millions of people
Entrepreneurship requires you to sell not only your product, but also yourself. Though the target may change, you will always be trying to convince investors, customers, and even employees to buy your vision of the future. I’ve yet to meet a successful entrepreneur who cannot do this to some degree. In order to close the deal, either work on developing this skill or partner with someone who can.
When trying to win, you have to be willing to lose
If you haven’t seen the episode, <spoiler alert!> we did not receive funding from the Sharks. It’s okay: their objections were very reasonable. In fact, it was a risk for us to be on Shark Tank at all. Napwell is still in the very early stages. While some of the companies on the show already have millions in revenue, we are still improving the product and incorporating early customer feedback.
While we knew that a negative reaction from the Sharks could bruise our egos, we couldn’t turn down this learning opportunity. After all, a rejection from the Sharks is just the judgment of five people. If your goal is to make a significant impact, it’s naïve to think that there won’t be stumbling blocks along the way. The key is to not let it affect your confidence. Of course we wanted the Sharks’ support, but the show also needs high ratings, and they achieve that through interesting companies and founders like us. We took comfort in the fact that we deserved to be there.
Having worked with and befriended many incredible founders, I have noticed one constant: unwavering confidence. The best entrepreneurs are those that are willing to face impossible risks in order to win. If those risks turn into failures, they are resilient and adaptable. They turn them into lessons, instead of disasters.
That’s it. I’m happy to say that we survived the show and even enjoyed our experience. I hope you can use these lessons to improve your pitch, and I look forward to watching you in the Tank.
I want to thank everyone for the great questions. I promise to answer more next week. 1. Why did you join the YC program? What is the difference between YC and other incubators?
To give a brief background, YC or Y Combinator is a startup incubator based in Silicon Valley in the United States. Founded by Paul Graham, the incubator has helped develop large technology companies like Dropbox, AirBnB, Reddit, Stripe, and many more. For more information, here is a link to an article about Y Combinator on Wired Magazine. (http://www.wired.com/2011/05/ff_ycombinator/)
I truly believe that YC stands alone as the best in breed for incubators worldwide. I think there are many reasons why a company should join YC, but in my opinion here are the top 4:
The YC Partners
The YC partners are not only incredibly accomplished and insightful -they tell you the unfiltered truth.
After being accepted into Y Combinator, I remember being excited about our first meeting with Paul Graham. After all, he had been the one to interview and admit us into the program. But, rather than praising our progress, he pointed out every flaw he saw with our product and company.
Media attention and fundraising success make it easy to buy into your own hype as a startup, but really revenue and users are all that matter. The YC partners have a wealth of experience and are able to quickly assess and provide assistance with issues ranging from founder disputes to contract negotiations.
The YC Network of Entrepreneurs
When I applied, I knew how helpful the partners would be, but had no idea how valuable the other founders in Y Combinator would be too. Our batchmates (companies that were in Y Combinator at the same time) and alumni (those who graduated in previous batches) are a tremendous resource. Not only are they incredibly intelligent, they are also eager to help and give support.
Since it is rare that a startup is facing a problem that has not been seen before by others, having a network of successful, yet accessible founders makes every team that much stronger.
YC Network and Relationships
Almost everyone in Silicon Valley is a first or second-degree connection from someone in YC. One example of that reach is Demo Day. After the end of every batch, startups are launched at Demo Day, having as an audience hundreds of top tier investors from Silicon Valley. In addition to making introductions, YC can tell startups who is actively investing and who is just trying to learn more about the market. This kind of information is almost impossible to get any other way.
Building a Silicon Valley Network
I think this is more of a benefit for international founders, but Y Combinator is the best introduction possible to Silicon Valley. With Y Combinator’s help, international founders are able to leverage the network to build a ready network of friends and peers and a career in Silicon Valley.
If you are currently running a startup, I highly recommend you apply: http://ycombinator.com/apply.html. I am happy to help with your application if you need it. Send me a tweet (http://www.twitter.com/njcar)
2. What do you think about Silicon Valley as a unique domain? I think SF is techy and advanced, NY/LA are fashionable and sophisticated, Northern Europe has a strength creating games.
While I think that Silicon Valley has unique advantages compared to other startup ecosystems around the United States and the world, I think this breakdown does not do any of these cities justice.
The cost of starting a company has never been lower. Open source tools and decreased hosting costs have enabled entrepreneurs from cities all over the world to impact whatever industry they choose.
Personally, I have brilliant technical friends that have founded companies in New York and Los Angeles. At the same time, there are highly successful fashion and gaming companies that are based in San Francisco. Though I don’t have as much experience with companies in Northern Europe, I assume the same is true there. In fact, I hope to learn more on my trip to Europe next month.
3.What are your favorite apps?
Though there are many apps that are beautiful and easy to use, my favorites are the ones that I use the most: Twitter, Yelp, Waze, Sunrise, and Spotify.
4. Thank you very much for giving me a chance to ask you a question! What is the best way to create an innovative and competitive business model for you? Is there any good way of thinking or research method? Mm Silicon Valley friend told me to just copy existing popular service like Groupon. He said we will need to make it different anyway after starting from copy(=pivot). What is your opinion?
Thanks for asking!
Out of context, I think it is tricky to define what makes a business model innovative. For example, the freemium business model is popular for software startups. For those that are not familiar with the model, a company makes its software available to a customer for free, and then charges as the product is used more. One example is Dropbox, a cloud hosting company. The product itself is free, but to add additional storage, a customer pays a fee.
Though the freemium model has been used for years, if we take this model and apply it to a hardware company it becomes innovative. Imagine if Google gave away Google Glass for free, but then charged to either add any apps or record any data. I’d say that’s taking a common business model and applying it to a different industry, for instance, makes it innovative.
To answer your question, borrowing a business model from a popular service is not a bad idea as long as the value proposition for the company is compelling and different. For example, an entrepreneur can take the Groupon group-buying business model and use it to build a company that sells airplane tickets in Japan. Though it is the same model, being aware of cultural differences or targeting a specific customer segment makes the product different. In general, I believe that ideas are not as important as the execution of those ideas in innovative ways.
I’m very excited to share that I will be answering questions from Japanese readers weekly on the TechWatch Blog, a technology blog supported by East Ventures. This is a copy of my introduction post in English. If you can read Japanese, take a look here: http://www.evtechwatch.com/2014/04/y.html
“Software is eating the world.”
– Marc Andreessen, co-founder of Netscape and Partner at Venture Capital Firm Andreessen Horowitz.
Marc Andreessen wrote these famous words in 2011 and could not have been more right. As an entrepreneur in Silicon Valley, I have seen entire industries disrupted by small groups of dreamers and product builders. Large organizations must adopt innovative, lean practices to enable them to design, build and implement products and programs. This is not a battle for growth, but for survival.
This disruption is not only felt on a macro level, but also a personal one. For example, I still remember the night before my high school prom. Covered in maps, my father and I sat at the dining room table, and I hand-wrote driving directions on a notepad. Today, I could have left the house the night of the event with only a smartphone and Google maps. In less than 10 years, all of that time, planning, and paper have been replaced by a single device.
Ever since graduating from Stanford University, I’ve played my role both failing and succeeding to disrupt large companies. I firmly believe that positive disruption has the potential to create jobs, improve living conditions, and change lives.
This is true in Silicon Valley, but also the rest of the world. As a Global Shaper of the World Economic Forum, I have been lucky to visit entrepreneurial ecosystems and meet company builders from Rome to Madrid to Tokyo. In my eyes, promoting and enabling entrepreneurship internationally is a crucial next step.
When Satoru and I first discussed this opportunity to share Silicon Valley insights with the Japanese tech community, it excited me. I am humbled by the opportunity to help educate and grow the Japanese startup ecosystem. This will not be a one-sided dialogue; I very much want to learn from your stories and experiences.
I’m not a lyrics connoisseur, but occasionally I’ll hear a line I can’t stop thinking about. In high school, it was from “Air Force Ones,” a heartfelt ode to sneakers. The line was “I treat my shoes like my ride.” It made as little sense then as it does now – I bought my shoes at Costco and did not own a car.
Then, I heard “The Man,” and it made me only think of being an entrepreneur.
I believe every lie that I ever told. – Aloe Blacc
Every entrepreneur constantly pitches, to investors, employees, customers, advisors, family, friends and in those pitches he or she shares the dream of a better future and how to achieve it. Hindsight makes some of these statements truths and some of them lies, but, at the time every entrepreneur believes them and that is what matters.
This week I shot my first live TV segment for FOX on the Napwell (http://www.napwell.com), the world’s first napping mask and a Kickstarter project I launched with one of my longtime friends, Justin Lee.
Having never been on live TV, here are 11 things that I learned:
News anchors are fantastic speakers. The teleprompter moves quickly, and they are consistently poised and speak slowly and clearly. There is a lot to learn.
Plug, baby plug. Don’t assume that people will know what your website is or how to buy your product. In our case, they did not show the website address on screen so make sure to say it out loud.
Know your themes and frame the conversation. The anchor will naturally guide the segment but have 2-3 things that you want to say and work them in. In our case it was our Kickstarter success, the fact that we iterate to solve real problems, and our target customer scenarios.
News teams are a prime example of operational efficiency. The team is lean and without redundancy.
Know which camera you are supposed to look into. There were a few of them and I wasn’t sure where to be looking.
Be yourself. I tried to sprinkle in a few jokes because that’s what I do normally. It put me at ease, and hopefully you chuckle at one of them.
Wear something with pockets. They give you a little microphone box that needs to go somewhere so make it easy for them.
Time goes by very quickly.
Wear solid colors. A pro tip picked up from my new friend and airplane rowmate and Director of Public Relations at Reputation.com. Thanks Leslie!
Smile, you don’t get to be on TV every day. It will remind you to be less nervous and have fun.
This is the first conversation in this series that is not centered on my work, but rather focuses on someone else’s work. I was in New York last week and one evening, I went to dinner with two friends and a girl I did not know. At the table, she and I shared a side.
We started with small talk: the weather, what people did for work, etc. She mentioned that she was in the Columbia Anthroloplogy PhD program and I told her that I ran a startup. We moved on to cover food (we were at a pretty amazing Japanese restaurant), our trip to NYC, and other generalities. Since I am now constantly worried about falling into Type 2 Conversations, the basic trajectory of conversation worried me. So, I asked her more about her research. I told her that at a high level I knew what Anthropology was, but not really much more than that.
She started describing one of her former research projects, a study to preserve the seabird population in a specific habitat of Hawaii. Unfortunately to do that, their team had to control the mongoose population, which was eating many of the birds.
Animal rights issues aside, it fascinated me that someone was able to come to the decision that the seabird was more valuable than the mongoose. There are so many factors that determine an animal’s value in an ecosystem that I think it would be almost impossible to understand them all.
The thought process seemed unethical, until I found an analog in my life: controlling user behavior in a mobile app.
While not a predatory animal, any mobile app has predatory buttons, menus, and options that all compete for the user’s attention. When trying to determine how to have users take the actions we want, we also run experiments. Much like the researchers did with the mongoose, we have to predict the number one reason users are being led astray from what we feel is the optimal behavior.
For example, we just faced this with our new user tutorial. We created two versions, 1) have every new user make a Clippo and 2) have every new user just watch popular Clippos. We decided that having a user make a Clippo would make them understand the purpose of the app better. Then, we executed on that plan by actively restricting elements that competed for a user’s attention.
Though the teams had Anthropology and software development backgrounds, our experimental approaches were similar. I think the major difference is that unlike the mongoose, our users can choose to participate in the experiment. Then, to take that to the extreme, the mongoose lost its life in the process. This makes me a bit uncomfortable, but perhaps is the result of me not understanding the research industry.
I am a proud member of the Global Shapers, a program created by the World Economic Forum to empower millennials in cities all over the world to make a local impact.
Conversations with international Shapers are inspiring. They give me alternative perspective, both cultural and geographic, and I try my best to use their wisdom to improve my life.
For example, this is an unedited conversation I had with Onika Stellingburg, the curator from Georgetown, Guyana. We were talking about what it is I do for work. (Am I really this terse online? Anyone have a guide to proper Facebook chat etiquette?):
Onika: I keep seeing this word ‘gifs’ ….it’s the moving pictures right?
Neil: yes, you got it
Onika: Excuse me….I don’t even own a smart phone so I pick regular things up slower than most. Yayyyyyy. There is hope for me yet.
Neil: much hope
Onika: So what do you do when you make them?
Neil: Share them with friends. It’s a way to communicate with gifs
Onika (at the same time as my previous message): Sell them online?
My creolese might come out here…..dats for fun or is it ya job?
Neil: love it, it’s my job and it’s fun
What I found interesting:
She wasn’t sure what iOS was. I take having a smart phone for granted and iOS is a fairly common term, but this is not true for the majority of people outside the US.
It was interesting that she knew what a gif was and not what iOS was, maybe the Buzzfeed effect?
When she said smart phones, I said iPhones. Guess I’m not as quick to embrace Android.
Her immediate question was whether we sell the gifs after we make them. At first I was amused, but then realized quickly that’s a very reasonable question. Businesses create products to ultimately generate revenue. The fact that we are focusing on growth and not revenue is probably amusing to her.
I am a fan of Creolese.
She asked whether Clippo is for fun or my job. I’m pretty happy to answer that it’s both.
This was the first day that I approached someone that I did not know well to have a candid conversation. In fact, it was the first time that I actually interrupted someone’s life (and their job) to talk about mine. It was at the bank when I had to deposit some checks (I realize there are high-tech ways to do this, but I still take pleasure in depositing them myself).
I decided beforehand to talk to any random teller, whether I knew them or not. I did not expect to be nervous, but I was. I had the same feeling that I get in a bar before approaching a pretty girl. The name of this blog is ‘Shooters Shoot’ for a reason, so I just started with, “I’m excited to show you the new app we just released.” The teller was excited and so was the manager next to him. I showed them Clippo and they thought it was cool, but that was not enough alone to sustain a longer conversation.
The manager started to walk away, so I explained to the teller loudly enough so the manager could hear, how we were having trouble getting users and asked if he had any ideas. The teller said, “what about Facebook?” and then there was another 30-second silence. It would have been easy to give up there, but I kept pressing. I described how acquiring a mobile user on Facebook was quite expensive and it was only for larger companies like gaming companies with deep pockets who could buy users.
Thankfully, this brought the manager back (probably wondering what I was still doing there), with an idea. “You know,” he started, “one of my friends built this photo app that is one of the top 10 on the app store.”
Then the conversation started rolling. In fact, I ended up talking to them for almost fifteen minutes, completely monopolizing this teller’s time. What was even better was that he is an avid Vine user, so I was speaking to our target demographic.
Reflecting on this chat, I found two things interesting. First, I realized that there was a large barrier that I needed to surpass to even have this conversation; the teller needed tacit “approval” from his manager to talk to me. Second, once we started talking more personally about my problem, and not just the app itself, the teller began to think of more ideas, and became invested in the conversation. Maybe this is why as a startup we are supposed to “marry a problem” and not the solution?
Again like my first encounter, there was a fair amount of give and take. They offered ideas for my user acquisition problem and also asked some questions about startups, mobile apps, and other tech-related things they were curious about. Perhaps they didn’t have an outlet for this type of conversation or maybe they were just being polite and humoring me, but regardless I was happy to answer their questions. To be honest, I’m excited about taking my next trip to the bank- I am curious if our conversation has the potential to go deeper.
In addition to my commentary, I’m going to add a summary at the end of each post, so I can keep track of what the other person did, what they shared, and what I answered for them (if anything).
What they did:
They both downloaded the app (2 new users!)
The manager told me about his friend who made one of the 10 most popular photography apps in the app store – and one of his early user strategies (it’s a good one)
One of them gave me feedback about the tutorial
Both said they would try it and share with friends and will have feedback the next time I come in (I can’t wait)
What they asked me:
What do you keep track of in a new app?
How many users do you need to have?
What was easier, building a product or finding investors? (I thought this was an interesting question – they didn’t ask about acquiring new users)