Fred beat me to it. I wasn’t at a computer to post this yesterday on the actual 4th of July, so today will have to do. I’ve read lots of books on the American revolution and the founding fathers over the years. It’s absolutely my favorite historical period, probably because it appeals to the entrepreneur in me. Think about what our founding fathers accomplished:

– Articulated a compelling vision for a better future with home democratic rule and capitalist principles. Life, liberty, and the pursuit of happiness is really the ultimate tag line when you think about it.

– Raised strategic debt financing from, and built critical strategic alliances with France, the Netherlands, and Spain.

– Assembled a team of A players to lead the effort in Washington, Adams, Jefferson, Franklin, Hamilton, and numerous others who haven’t been afforded the same level of historical stature.

– Built early prototypes to prove the model of democratic home rule in the form of most of the 13 colonial assemblies, the Committees of Correspondence, and the Articles of Confederation.

– Relentlessly executed their plans until they were successful, changing tactics several times over the years of 1774-1783 but never wavering from their commitment to the ultimate vision.

– Followed through on their commitments by establishing a new nation along the principles to which they publicly committed early on, and taking it to the next level with the Constitution and our current form of government in 1789.

And let’s not forget, these guys accomplished all of this at a time when it took several days to get a letter from Virginia to Boston on horseback and six weeks to get a message across the Atlantic on a sailboat. Can you imagine what Washington would have been able to accomplish if he could have IMd with Adams in Paris?

So happy 4th to all, with a big thanks to this country’s founding fathers for pulling off the greatest spin-off of all time.

What Kind of Entrepreneur Do You Want to Be?

I had a great time at Princeton reunions this weekend, as always.  As I was talking to random people, some of whom I knew but hadn’t seen in a long time, and others of whom I was just meeting for the first time, the topic of starting a business naturally came up.  Two of the people asked me if I thought they should start a business, and what kind of person made for a good entrepreneur.

As I was thinking about the question, it reminded me of something Fred once told me — that he thought there were two kinds of entrepreneurs:  people who start businesses and people who run business. 

People who start businesses are more commonly known as serial entrepreneurs.  These people come up with ideas and love incubating them but may or may not try to run them longer term.  They:

– generate an idea a minute
– have a major case of ADD
– are easily distracted by shiny objects
– would rather generate 1 good and idea and 19 bad ones than just 1 good one
– are always thinking about the next thing
– are only excited by the possibility of what could be, not what is
– are more philosophical and theoretical
– probably shouldn’t run the companies they start for more than a few months, as they will frustrate everyone around them and get bored themselves
– are really fun at cocktail parties
– say things like “I thought of auctions online way before eBay!”

The second type of entrepreneur is the type who runs businesses (and may or may not come up with the original idea).  These people:

– care about success, not just having the idea
– love to make things work
– would rather generate 1 idea and execute it well than 2 ideas
– are problem solvers
– are great with people
– are maybe less fun at cocktail parties, but
– you’d definitely want them on your team in a game of paintball or laser tag

Neither one is better than the other, and sometimes you get both in the same person, but not all that often.  But understanding what type of entrepreneur you are (or would likely be) is probably a good first step in understanding whether or not you want to take the plunge, and if so, what role you’d like to play in the business.

A Better Way to Shop

I love Zappos.com.  It’s rapidly becoming the only place I buy shoes.  Their web site experience is ok – not perfect, but pretty good, but their level of service is just unbelievable.  They are doing for e-commerce (shoes in particular) what Eos is doing for air travel.

They’re always great at free shipping and have always been super responsive and very personal and authentic when it comes to customer service.  But today took the cake.  I emailed them when I placed an order for new running shoes because I also wanted to buy one of those little “shoe pocket” velcro thingies that straps onto shoelaces and holds keys and money for runners.  I didn’t find one on the Zappos site and just asked if they carried the item in case I missed it.

Less than 24 hours later, I got an email reply from Lori, a Customer Loyalty Representative there, who apologized for not carrying the item — and then provided me with a link to buy it on Amazon.com which she had researched online herself.

Zappos’s tag line on their emails says it all:

We like to think of ourselves as a service company that just happens to sell shoes.

Does your company think of itself and its commitment to customer service like that?

First day at Techstars:  Where do you start?

I’m a new mentor this year at Techstars, a program in its third or fourth year in Boulder (and this year also in Boston for the first time) that provides a couple dozen companies with seed capital, advice and mentorship, and summer “incubation” services in a really well conceived for-profit venture started by David Cohen in Colorado.

Yesterday was my first day up there with my colleague George Bilbrey, and we met with three different companies, two of which we will tag team mentor through the summer.  I won’t get into who they are at the moment, mostly because I’m not sure what the confidentiality issues are offhand, but I’ll make the first of a series of posts here about observations I make from doing this work.

Yesterday’s thought was:  Where do you start?

It was so interesting to meet with in some cases pretty raw companies.  They weren’t exactly “a guy with an idea,” but for the most part they were <5 person teams with a working code base and some theories about who would buy the product. 

So where do you start on the question of business planning.  Do you dive into the deep end of details?  (What should we charge?  How do I get my first 5 beta customers?  What about this new feature?)  Or do you wade into the shallow end of methodical planning?  (Who is our target market?  What problem are we solving?  How much is it worth to the prospect?  What will it cost us to produce, sell, and support the product?)  We heard both of those approaches yesterday across the three companies. 

My conclusion isn’t that there’s a single correct answer.  For most mortals, it’s probably the case that while it’s good to have a product and an inspiration behind it, there’s a long road between that and a successful company that requires careful articulation of the basics and a good grip on potential economics before incremental investments of time or money. 

But there are the occasional companies whose ideas are so perfectly timed for such a large market or user base that some of the method can be ditched up front in the name of getting to market (think Twitter or eBay) — provided that the company circles back to those basics down the road in order to grow smartly over time.

Anyway, it was a thought-provoking day and great to see new entrepreneurs and ideas take root.  George and I have a series of six sessions set up with these companies as well as the full Techstars Demo Day in early August.  I’ll try to blog some thoughts after each session.

We spent the weekend in Hudson, New York, a charming, urban-renewing town about two hours north of the city. My cousins Michael & Marianne opened a wine store called Hudson Wine Merchants on the main drag in town, Warren Street (343 Warren St. to be exact, you should definitely check it out if you’re ever in Hudson).

The store opened for the first time Friday evening, and we had the first full day on Saturday. Mariquita and I, and some other friends of Michael & Marianne’s, helped do everything from stock the shelves, to clean the windows, to use the price tag gun (fun!), to work the register and the very fickle POS software, to watch my cousin’s daughter as she rode her tricycle through the store. It was fun but exhausting. It inspired a few different postings here, which I’ll work on in the coming days.

The first thought I had is that being CEO of a two-person company has a lot in common with being CEO of a 200-person company, or, I imagine, a 20,000-person company:

– You worry incessantly about keeping your customers happy and providing a great customer experience and the right product

– You have numbers running in the back of your head all the time. How much are you selling? At what margin? Are you making money?

– You work your ass off and frequently put business first in order to see it succeed

– You think about the little things, the big things, everything, 24 hours a day

Obviously, there are many differences between running a two-person company and running a much larger organization as well; of course, the biggest is managing, developing, and worrying about lots of employees’ welfare. But it struck me that there are more similarities than meet the eye.

Seth Responds

About an hour after I posted a not so flattering review of Seth Godin’s new book this morning, I got an email from Seth with a couple good points worth responding to here.

His main points (other than offering me a refund, which was nice) were that (a) the book itself was very clear about its content — on the book itself (back cover, inside flap, marketing copy), kind of like a ‘live album’ for a recording artist; and (b) if I thought the blog postings were worthwhile, why  did I still feel like there was a downward trend in his writing?

Ok, so these are fair points.  Let me try to clarify.  I am 99% sure that I bought the book off the Amazon.com email which said “if you enjoyed other books by Seth Godin, then here’s his latest,” which prompted my robotic one-click order without paying attention to the fine print.  That’s why I was disappointed when I got the book.  My bad, I guess, although that’s somehow an unsatisfying thought as a consumer — that I should have paid more attention to the fine print.  Live albums from musicians usually have that in the title so the marketing is clear, and they still sell a ton, probably even more so.

In re-reading my review, I actually think it’s balanced — I do say there are a bunch of circumstances where the book is a must-have — but my use of the word “sell-out” was a bit harsh given the attempts to present the book as a compendium.  But the downward trend in my mind is more than just this book.  I think a lot of Seth’s writings have been hitting the same notes for the last couple of years, while I’ve been hoping to hear his next Big Moo.

I didn’t take up Seth’s offer for a refund, as I fall somewhere between (a) and (c) in my definition of why this is a must-have.  And while I’m at it, maybe I should rethink my earlier point that this whole blog thing isn’t about conversations.

Book Shorts:  Sales, Sales, Sales, Sales, Sales

Jeffrey Gitomer’s Little Red Book of Selling and Little Red Book of Sales Answers were great refreshers in sales basics for you as CEO (and head of sales, and sales manager, and sales rep).  The books were a bit “self-help” flavor for my taste as a reader, but they were excellent on content, and I have two long pages of notes of “back to basics” items I need to remind myself and my team about.

Anyone at Return Path in sales/account-project management/marketing — your copy is on the way, hopefully by way of a barter I proposed with the author (sorry, Stephanie and Tami…), but in any case, we’ll buy them.  Anyone else who is interested at RP, let me know, and the copy is on me.

Some of the most critical reminders — although you have to read the books to get to get the color:

– Ask questions, don’t talk talk talk at prospects (just like the SPIN Selling methodology we always train with at Return Path)

– Never say “tell me a little bit about your business” — do the research first

– Importance of testimonials in selling

– Never blame others or blame circumstances when things go wrong.  Take control and solve the problem (good for sales and for everyone!)

Startup CEO (OnlyOnce- the book!), Part II – Crowdsourcing the Outline

As I mentioned a few weeks ago here, I’m excited to be writing a book called Startup CEO:  A Field Guide to Building and Running Your Company, to be published by Wiley & Sons next summer.  Since many readers of OnlyOnce are my target audience for the book, I thought I’d post my current outline and ask for input and feedback on it.  So here it is, still a bit of a work in progress.  Please comment away and let me know what you think, what’s missing, what’s not interesting!

1           Part One: Vision and Strategy (Defining the Company)
1.1          Setting the Company’s Agenda
1.2          NIHITO! (or, “Nothing Interesting Happens in the Office”)
1.3          Setting the Business Direction
1.4          Strategic Planning, Part I: Turning Concepts Into Strategy
1.5          Strategic Planning, Part II: Creating the Plan
1.6          Defining Mission, Vision and Values
1.7          Communicating Vision and Strategy
1.8          The Role of M&A
1.9          The Art of the Pivot
1.10       How Vision and Strategy Change over Time

2           Part Two: Talent (Building the Company’s Human Capital)
2.1          Building a Team
2.2          Scaling the Team
2.3          Culture
2.4          Interviewing
2.5          Recruiting
2.6          Onboarding
2.7          Setting Goals
2.8          Feedback
2.9          Development
2.10       Compensation
2.11       Promoting
2.12       Rewarding
2.13       Managing Remote Offices and Employees
2.14       Firing: When It’s Not Working
2.15       How Talent Changes over Time

3           Part Three: Execution (Aligning Resources with Strategy)
3.1          Making Sure There’s Enough Money in the Bank
3.2          Types of Financing
3.3          Fundraising Basics
3.4          Negotiating Deals
3.5          Pros and Cons of Outside Financing
3.6          Forecasting and Budgeting
3.7          Creating a Company Operating System
3.8          Meeting Routines
3.9          Driving Alignment
3.10       A Metrics-Driven Approach to Running a Business
3.11       Learning
3.12       Post-Mortems
3.13       Thinking About Exits
3.14       How Execution Changes over Time
3.14.1      Finance
3.14.2      Execution

4           Part Four: Management And Leadership (The How of Being a CEO)
4.1          Leading an Executive Team
4.2          Critical Personal Traits
4.3          Being Collaborative
4.4          Being Decisive: Balancing Authority and Consensus
4.5          The Value of Symbolism
4.6          Getting the Most out of People
4.7          Diving Deep without Being Disruptive
4.8          Articulating Purpose
4.9          Collecting Data from the Organization
4.10       Managing in an Economic Downturn
4.11       Managing in Good Times vs. Bad Times
4.12       Communication
4.12.1      Macro (to Your Company and Customers)
4.12.2      Micro (One-on-One)
4.13       How Management and Leadership Change over Time

5           Part Five: Boards (A Unique Aspect of the CEO’s Job)
5.1          Building Your Board
5.2          Meeting Materials
5.3          Meetings
5.4          Between Meetings
5.5          Making Decisions and Maximizing Effectiveness
5.6          The Social Aspects of Running a Board
5.7          Working with the Board on Compensation
5.8          Evaluating the Board
5.9          Serving on Other Boards
5.10       How Boards Change over Time

6           Part Six: Managing Yourself So You Can Manage Others
6.1          Creating a Personal Operating System
6.2          Working with an Executive Assistant
6.3          Working with a Coach
6.4          Finding Your Voice
6.5          The Importance of Peer Groups
6.6          Your Family
6.7          Taking Stock
6.8          Staying Fresh
6.9          Staying Healthy
6.10       Traveling

As I mentioned the other day, the second edition of Startup CEO is out.  This post is a teaser for the content in one of the new chapters in this edition on Authentic Leadership.

As I mentioned last week, the book went to press early in the COVID-19 pandemic and prior to all the protests around racial injustice surrounding the George Floyd killing, so nothing in it specifically addresses any of those issues.  In some ways, though, that may be better at the moment since the book is more about frameworks and principles than about specific responses to current events. Two of those principles, which are timeless and transcend turmoil, uncertainty, time and place, are creating space to think and reflect and being intentional in your actions. In a world in which CEOs are increasingly called upon to deal with more than traditional business (pricing, strategy, go-to market approaches, team building, etc.) it’s imperative to approach and solve challenging situations from a foundation that doesn’t waver. 

At Return Path our values were the foundation that provided a lens through which we made every decision. Well, not every decision, only the good ones. When we strayed from our core values, that got us into trouble. The other principle, outlined in Chapter 1 of the Second Edition, is leading an organization authentically.

Let me provide a couple concrete examples of what I mean by “Authentic Leadership” since the term can be interpreted many ways.

One example is to avoid what I call the “Say-Do” gap.  This is obviously a very different thread than talking about how the company relates to the outside world and current events.  But in some ways, it’s even more important.  A leader can’t truly be trusted and followed by their team without being very cognizant of, and hopefully avoiding close to 100%, any gap between the things they say or policies they create, and the things they do.  There is no faster way to generate muscle-pulling eyerolls on your team than to create a policy or a value and promptly not follow it. 

I’ll give you an example that just drove me nuts early in my career here, though there are others in the book.  I worked for a company that had an expense policy – one of those old school policies that included things like “you can spend up to $10 on a taxi home if you work past 8 pm unless it’s summer when it’s still light out at 8 pm” (or something like that).  Anyway, the policy stipulated a max an employee could spend on a hotel for a business trip, but the CEO  (who was an employee) didn’t follow that policy 100% of the time.  When called out on it, did the CEO apologize and say they would follow the policy just like everyone else? No, the CEO changed the policy in the employee handbook so that it read “blah blah blah, other than the CEO, President, or CFO, who may spend a higher dollar amount at his discretion.”

What does that say about the CEO? How engaged are employees likely to be, how much effort are they willing to devote to the company if there are special rules for the executives? You can make any rule you want — as you probably know if you have read a bunch of my posts or my book over the years, I’m a proponent of rule-light environments — but you can’t make rules for everyone else that you aren’t willing to follow yourself unless you own the whole company and don’t care what anyone thinks about you or says about you behind your back.

Beyond avoiding the Say-Do Gap, this new chapter of the book on Authentic Leadership also talks about how CEOs respond to current events in today’s increasingly politicized and polarized world.  This has always felt to me like a losing proposition for most CEOs, which I talk about quite a bit in the book.  When the world is polarized, whatever you do as CEO, whatever position you take on things, is bound to upset, alienate, or infuriate some nontrivial percentage of your workforce.  I even give some examples in the book of how I focused on using the company’s best interests and the company’s values as guideposts for reacting (or not reacting) to politically divisive or charged issues like guns or “religious liberty” laws.  I say this noting that there are some people who *believe* that their side of an issue like this is right, and the other side is wrong, but the issues have some element of nuance to them.

Today’s world feels a bit different, and I’m not sure what I would be doing if I was leading a known, scaled enterprise at this stage in the game.  The largely peaceful protests around all aspects of racial injustice in America in the wake of the murder of George Floyd — and the brutality and senselessness of that murder itself — have caused a tidal wave of dialog reaching all corners of the country and the world.  The root of this issue doesn’t feel to me like one that has a lot of nuance or a second side to the argument.  After all, what reasonable person is out there arguing that George Floyd’s death was called for, or even that black Americans don’t have a deep-seeded and widespread reasonable claim to inequality…even if their view of what to do about it differs?

I *think* what I would be doing in a broader leadership role today is figuring out what my organization could be doing to help reduce or eliminate structural racial inequality where we could based on our business, as opposed to driving my organization to take a specific political stand. I know for sure that I wouldn’t solicit feedback from a select group of people only, but I would create a space where voices from across the organization (and stakeholders outside of it as well) could be heard. That’s not a solution, but a start, and in challenging times making a little bit of headway can lead to a cascading effect. It can, if you keep the momentum.

And, in line with “authentic leadership,” it’s okay to admit that you don’t have the answers, that you might not even know the questions to ask. But doing nothing, or operating in a “business as usual” way won’t make your company stronger, won’t open up new opportunities, won’t generate new ideas, and won’t sit well with your employees, who are very much thinking about these issues. 

So, in today’s challenging times I would follow my own advice, be thoughtful and reflective, and intentional in searching for common solutions.  I’d try to avoid “mob mentality” pressure — but I would also be listening carefully to my stakeholders and to my own conscience.

In the coming weeks, I’ll write posts that get into some of the other topics I cover in the book, but none of them will be as good as reading the full thing!

My latest book (I’m a co-author along with Brad Feld and Mahendra Ramsinghani), Startup Boards: A Field Guide to Building and Leading an Effective Board of Directors, is now live on Amazon – today is publication day! The book is a major refresh of the first edition, now eight years old. I was quoted in it extensively but not an official author – Brad and Mahendra were nice enough to share that with me this time. The book includes a lot of new material and new voices, including a great Foreword by Jocelyn Mangan from Him for Her and Illumyn. It’s aligned with Startup CEO and Startup CXO in look and in format and is designed to be an easy-to-read operator’s manual to private company boards of directors. Brad also blogged about it here.

We’ve done a lot of work around startup boards at Bolster the past couple of years, including working with over 30 CEOs to help them hire amazing new independent board members. Our landmark Board Benchmark study last year highlighted the problem with startup boards, but also the opportunity that lies within: not enough diversity on the boards, but also not nearly enough independent directors — and a lot of open seats for independent directors that could be filled. That conclusion led me to my Startup Board Mantra of 1-1-1: Independent directors from Day 1, 1 member of the management team, and 1 independent for every 1 investor.

As we posted on the Bolster blog last week, our quick refresh of the Board Benchmark study revealed some good news and some bad news about progress on diversity in the boardroom with startups. The good news is that the needle is starting to move very slowly, and that independent directors present the best opportunity to add diversity to boards. Our data shows that half of all new directors brought onto boards in the last year were independents, and of those, 57.9% were women and 31.6% were non-White board members. Those numbers are well above the prior study’s benchmarks of 36% and 23%, respectively (our experience running board searches skews even further to women and non-White directors being hired).

The bad news is how slowly the needle is moving — only 20% of open independent board seats were filled over the previous year, which is a lot of missed opportunity. The main takeaway is that while overall representation on boards is still skewed largely White and male, the demographic profile of new board appointments looks a lot different from the representation on boards today, indicating that CEOs are making intentional changes to their board composition.

Startup boards are a great way to drive grassroots change to the face of leadership in corporate America. More CEOs need to follow up by filling their open board seats and fulfilling their stated desires to improve diversity in the boardroom. This takes time and prioritization — these are the places where we see board searches either never get off the ground, or falling down once they do, for all the searches we either run or pitch at Bolster.

Hopefully Startup Boards will help the startup ecosystem get there.

Doing Well by Doing Good, Part IV

This series of posts has mostly been about things that people or companies do that help make the world a better place — sometimes when it’s their core mission, other times (here and here) when it becomes an important supporting role at the company.

Today’s post is different — it’s actually a Book Short as well of a new book that’s coming out later this fall called Green to Gold:  How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage, published by Yale Press and written by Daniel Esty (a Yale professor and consultant), and a good friend of mine, Andrew Winston, a corporate sustainability consultant.

Green to Gold is a must-read for anyone who (a) holds a leadership position in business or is a business influencer, and (b) cares about the environment we live in.  Its subtitle really best describes the book, which is probably the first (or if not, certainly the best) documentation of successful corporate environmentalstrategy on the market.

It’s a little reminiscent to me of Collins Built to Last and Good to Great in that it is meticulously researched with a mix of company interviews/cooperation and empirical and investigative work.  It doesn’t have Collins “pairing” framework, but it doesn’t need to in order to make its point.

If you liked Al Gore’s movie, An Inconvenient Truth, this book will satisfy your thirst for information about what the heck the corporate world is doing or more important, can do, to do its part in not destroying our ecosystem.  If you didn’t like Gore’s movie or didn’t see it because you don’t like Al Gore or don’t think that many elements of the environmental movement are worthwhile, this book is an even more important read, as it brings the theoretical and scientific to the practical and treats sustainability as the corporate world must treat it in order to adopt it as a mainstream practice — as a driver of capitalistic profit and competitive advantage.

This is a really important work in terms of advancing the cause of corporate social responsibility as it applies to the environment.  Most important, it proves the axiom here that you can, in fact, Do Well by Doing Good.  If you’re interested, you can pre-order the book here.  Also, the authors are writing a companion blog which you can get to here.