Sunday, October 20, 2013

Creating a Great Start Up Culture

Every startup team has different ambitions. “Get big fast” is sometimes one of them: raise as much capital as possible so you can hire an army of engineers, marketing, sales and customer service people. This is a very short-term view on what it takes to build and grow a company. For some reason, people often think companies with a big team are more successful. But in reality, it’s not the quantity of people that matters, but the quality.

The bigger a company gets and the faster a company grows, the bigger the risk that people start feeling “alienated” from the company. There is a risk people will start feeling like a cog in the wheel, and a lot of times that’s when people start looking for other opportunities where they feel appreciated, where they can build cool products that are a true expression of themselves and where they can make a difference.

As Stephen Cohen, cofounder and Executive VP of Palantir Technologies, said correctly, people tend to hugely underestimate the compounding returns of intelligence. That is, in order to evolve as human species, we need to continuously solve big and challenging problems. Being a cog at a big corporation pays well and it’s very comfortable, but what the most brilliant minds don’t realize is that in reality these corporations pay you to accept a much lower intellectual growth rate. When you understand the concept of compounding intelligence, the cost of missing that long-term compounding learning curve is enormous.

What it essentially means is that they’re not giving you the best opportunity of your life. Then something scary can happen: all of a sudden, you begin to realize that you’ve lost your competitive edge, and that you won’t be the best anymore. Because people don’t expect the world of you, you’re missing out on the latest and coolest technologies. You stop fighting conventional wisdom and then…you stall.

Yes, there is a war for talent out there. The best startups in the world are competing with each other for the best and most brilliant minds in the industry. But the single most important question you should ask yourself when staying at your current job or taking on a new job is: are you receiving the best opportunity of your life?

Working with other smart people is just one aspect of that. The more fundamental question is: do you like the culture? It boils down to the most basic human need: maximizing happiness. Products and companies are built by people. In order to build the best product in the world, a product that people will love and talk about, a product that will disrupt an entire industry, startup teams need to get one thing right: the culture.

Happiness is relative, and it’s entirely personal. One way to increase happiness, for example, is by working in an environment where creativity and innovation are the norm, where it is okay to make mistakes as long as you learn from them, where people won’t tolerate working with anyone who settles for mediocrity, and where people share a common long-term vision for the company, which transcends the goals of all individuals involved.

When people are happy, they are motivated to build amazing things. But people need to be motivated for the right reasons. There is a big difference between extrinsic motivation and intrinsic motivation. Extrinsic motivation refers to the performance of an activity in order to attain an outcome. Intrinsic motivation refers to motivation that is driven by an interest or enjoyment in the task itself, and exists within the individual rather than relying on any external pressure, reward, or compensation. It refers to people’s innate desire to build the right thing, right. It refers to people’s eagerness for self-control and self-direction. But for people to be intrinsically motivated, they need to feel empowered, and empowerment means trust; people need to feel that they’re being trusted with huge responsibilities to just do the right thing. This increases happiness.

Empowerment leads to independence and self-control. In other words, you’re given the ability to set your own rules. When people trust you, you will have the ability to do whatever you want, and to work whenever you want and wherever you want, as long as you get the deliverable done. At Funding Gates we hate micromanagement; that is why we’re hiring the best of the best, providing them with the latest and greatest tools to get their work done, and then getting the heck out of their way. This increases happiness.

But what happens after the work gets done? Innovation does not stop there. Intrinsically motivated people are restless. They strive in environments where innovation and creativity are continuously fostered and cultivated. Only if we continuously improve ourselves both on a professional and personal level will we come across creative ways of solving new and challenging problems, and keep innovating. People also need to have the interpersonal and communication skills to recognize their own and each of their team member’s strengths and weaknesses, communicate those to each other, and further develop the strengths together. When you become better at something together, you can build cooler things. This increases happiness.

For all of this to happen, people need to feel “safe.” What this means is that it is critical to work in a culture where it is okay to make mistakes, as long as people learn from them. Risk-taking should be encouraged, which means working in a team that continuously ships new features and products is critical. This nurtures the continuous cycle of innovation and further increases happiness.

Building a culture is hard and it takes time. It’s not easy, but it’s worth it. For a culture in an organization to prevail, however, everyone in the team needs to do their part and actively contribute towards that goal. Everyone needs to be an “advocate” of that culture to the outside world, and act as gatekeepers to preserve the culture and the happiness of everyone on the team (even if the company grows to thousands of people).

These are just a few points you should consider both at your current job or when you’re interviewing to work at a new company. What makes you happy? And what can you do to increase happiness for yourself and for others around you? Always remember that life is short, and that you deserve the best opportunity of your life. Don’t settle for anything less until you find it.

Sunday, October 13, 2013

Luxury, Ability, and Pricing

I recently read an excellent post by Seth Godin titled, "Understanding luxury goods"  where he goes on to talk about how the internet and luxury are coming into conflict, and this got me thinking about knowledge workers and those in the skills trades (think engineers, athletes, doctors, consultants, actors, etc.). 

In Godin’s article he states, “A luxury good gets its value from its lack of utility and value. A typical consumer would look at what it costs and what it does and say, "that's ridiculous." When a good like this comes to market, it sometimes transcends the value equation and enters a new realm, one of scarcity and social proof. The value, ironically, comes from its lack of value. ….” and he is correct.  It is NOT the utility of the item that gives its value, it is actually the fact that others admire you for owning it.

So, as Godin goes on to say, “Discount luxury goods, then, are an oxymoron. The factory outlet or the job lot seller or the yoga studio that's selling the "same thing but cheaper," isn't selling the same thing at all. They don't offer scarcity, social proof or the self-narrative of a splurge.”

Why am I talking about luxury goods and the lack of utility when you are a person who has a skill set that is unique and/or differentiated in the market?  Well, what also makes a luxury item a luxury is its scarcity.  These items may not be any BETTER than a comparable item (one $12,000 Birkin bag will not carry your cosmetics any better than a another costing less than 1% of it), but they are rarer.

In this vein, so too are your skills and abilities.  A person who can teach someone to sing if 4 lessons is worth a LOT more per hour than one who takes 50 lessons to get you through the basics.  A branding firm or expert that can get you a logo, tagline, and mission statement done is two weeks with just two meetings it worth way more than one who may charge ¼ the price per hour but takes 10 times as long to complete and requires 5 to 8 meetings in the process. So, if the music instructor is charging $150/hr versus $50 or the branding firm charges $450/hour versus $100/hr what would you choose? 

I believe in “go with the best of settle for the rest.” If you are like most people, you would most likely think you are “saving money” by choosing the lower cost (per hour), but you would be making a mistake.  The “fully born cost” is actually greater with the seemingly lower cost provider! Why?  Well first off, you are probably (but not always) getting an inferior service, which results in a sub-par result, project or experience.  You are also spending more of YOUR time, which unfortunately you are discounting.  So the luxury here is TIME, and the old saw of “time is money” should be applied to this equation.

Remember that the “same thing but cheaper,’ isn't selling the same thing at all.”  It is important to think of this not only when purchasing a service, but also when offering one.  Too often with the advent of internet pricing transparency, it is way too easy to compare pricing of your “service” or skill set with someone else, but you really cannot. If you offer a superior service, and I mean superior, price yourself that way, but also know HOW you are superior.  Discounting to get "those" customers is just...stupid and a waste of time.  If you are exceptional, you do NOT need to need to tout.

It is important to note the luxury you offer is that you are so much BETTER, FASTER and CHEAPER (overall) than anyone else that you would be crazy to use them. So, do NOT take customers who want a discount, or try to devalue your skills,  take on clients who want a better product and appreciate the excellence of your work and the superiority of your craft.  While some luxuries may be perverse testaments to excess, one luxury people cannot live without is extra time.  As Visa states, some things are priceless!

Wednesday, October 9, 2013

You should be mad as hell (Social Security)

Remember, not only did you contribute to Social Security but your employer did too. It totaled 15% of your income before taxes. If you averaged only $30K over your working life, that's close to $220,500.

If you calculate the future value of $4,500 per year (yours & your employer's contribution) at a simple 5% (less than what the govt. pays on the money that it borrows), after 49 years of working you'd have $892,919.98.

If you took out only 3% per year, you'd receive $26,787.60 per year and it would last better than 30 years (until you're 95 if you retire at age 65) and that's with no interest paid on that final amount on deposit! If you bought an annuity and it paid 4% per year, you'd have a lifetime income of $2,976.40 per month.

The folks in Washington have pulled off a bigger Ponzi scheme than Bernie Madhoff ever had.

Entitlement my butt, I paid cash for my social security insurance!!!! Just because they borrowed the money, doesn't make my benefits some kind of charity or handout!!

Congressional benefits ---- free healthcare, outrageous retirement packages, 67 paid holidays, three weeks paid vacation, unlimited paid sick days, now that's welfare, and they have the nerve to call my social security retirement entitlements?

We're "broke" and can't help our own Seniors, Veterans, Orphans, Homeless

In the last months we have provided aid to Haiti, Chile , and Turkey . And now Pakistan ......home of bin Laden. Literally, BILLIONS of DOLLARS!!!

Our retired seniors living on a 'fixed income' receive no aid nor do they get any breaks while our government and religious organizations pour Hundreds of Billions of $$$$$$'s and Tons of Food to Foreign Countries!

They call Social Security and Medicare an entitlement even though most of us have been paying for it all our working lives and now when it's time for us to collect, the government is running out of money. Why did the government borrow from it in the first place? Imagine if the *GOVERNMENT* gave 'US' the same support they give to other countries.

Sad isn't it?

99% of people won't have the guts to forward this.

I'm one of the 1% -- I Just Did.