Category Archives: Startup

Should your start up hire MBAs?

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A good take on the value of MBAs (like me) to a start up by Sheel from FeeFighters. Check out the entire post.

Why qualities could an MBA possibly possess to make them valuable to your startup? MBA’s are…

1)Driven / Ambitious – This is not to say that others aren’t… but MBAs are generally a particularly driven bunch. Some people think the opposite, but I think it actually takes balls to quit your existing job, take a couple of years off, move to a new city (usually) and go into debt for a piece of paper.

2)Extroverted / Outgoing – Yes, there are lots of counter-examples… but on the whole, the MBA folks are going to be more outgoing than the techies… and like it or not, you need some extroverts in your company. There are a bunch of d-bags at bschool too, though.

3)Well Networked – On the bizdev/sales/fundraising/marketing side of things, knowing people helps, and aside from possessing #2 above, we generally have fantastic networks to tap into, and aren’t afraid of tapping into them. One advantage is that we have networks not just in the startup bubble that we live in, but also the “normal” world that we need to partner with and/or eventually take over/dominate.

4)More Polished – MBA’s are really sometimes just finishing school for nerds. They teach you how to speak, negotiate, and write emails. If you were terrible at those things before, you won’t be amazing after, but you probably will have improved.

5)Highly Analytical – We have a different approach than some other people. In bschool, you’re constantly analyzing cases to see how other companies have succeeded or failed and making a recommendation based on all that you’ve learned. Some say it doesn’t apply to startups, but I’d beg to differ. I’m constantly thinking of cases I studied in school when making decisions at FeeFighters.

Scientists and Engineers: innovation and entrepreneurship

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Yet when venture capital got involved they brought all the processes to administer existing companies they learned in business school – how to write a business plan, accounting, organizational behavior, managerial skills, marketing, operations, etc. This set up a conflict with the learning, discovery and experimentation style of the original valley founders.
Yet because of the Golden Rule, the VC’s got to set how startups were built and managed (those who have the gold set the rules.)

Fifty years later we now know the engineers were right. Business plans are fine for large companies where there is an existing market, product and customers, but in a startup all of these elements are unknown and the process of discovering them is filled with rapidly changing assumptions.

Startups are not smaller versions of large companies. Large companies execute known business models. In the real world a startup is about the search for a business model or more accurately, startups are a temporary organization designed to search for a scalable and repeatable business model.

Yet for the last 40 years, while technical founders knew that no business plan survived first contact with customers, they lacked a management tool set for learning, discovery and experimentation.

From Steve Blank

The Lebara Story

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Lebara and Lycatel have changed overseas calling in Australia as they have done in Europe. Here’s Lebara’s story. Both companies were founded by Sri Lankans.

From SMH:

Yoganathan Ratheesan was 25 when he co-founded Lebara. Ten years on and the business of selling cheap international mobile phone calls to migrant workers in Europe and Australia is snowballing.

With 3 million active customers, Lebara is already bigger than Tesco Mobile. The firm made €21 million (A$28.4 million) in pre-tax profits last year and its operations in nine countries are expected to double revenues to €1bn in 2011. Staff numbers have risen from 500 to 1400 since the beginning of last year.

But Ratheesan, known to friends as Ratheesh, prefers to be modest.
“I’m not an entrepreneur. I don’t consider myself to be a businessman at all. I’m just very good at running things.”

At 35 he still looks almost boyish in his double-breasted suit, and would rather give the impression of being a corporate newcomer than the creator of a rampantly successful money-making machine.

The startup questions: Which accounting system?

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Right now the biggest business question we have at FamilybyFamily is which accounting system to use and payroll systems.

It is interesting how when you are growing and expanding in a start up these kind of, what the product guys in the team or the social change experts would call the boring stuff becomes quite important.

We are exploring online accounting like Xero and Saasu which actually are supported by our friends in Deloitte too.

It’s the boring and back end stuff which will be quite important as we go forward in building an organization that can scale. And I love that.

The Way I Work: David Sacks, Yammer

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Playing poker and running a start-up are similar in some ways. Mostly, you have to be comfortable with ambiguity. If you’re the type who likes to very carefully weigh 99 percent of the data before you make a decision, you’re not cut out to run a start-up. At best, you’ll have 60 percent of the data. And you have to make a lot of your decisions based on intuition.

via The Way I Work: David Sacks, Yammer | Inc.com.

Eric Ries on Creating the Lean Startup

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The Lean Startup method builds capital-efficient companies because it allows start-ups to recognize that it’s time to pivot—or change direction—sooner, creating less waste of time and money. I named this loop “build, measure, learn” because the activities happen in that order. But the planning really works in the reverse order: We figure out what we need to learn, then figure out what we need to measure to get that knowledge, and then figure out what product we need to build to run that experiment and get that measurement.

From Inc. His book is next on my reading list.

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This applies to Silicon Valley in general, I think. We take risks, we bet on long shots, we try to serve markets with zero demand and squeeze blood from stones. We spend money like it was just paper, and when we don’t have money we give our time away for free working on things we believe in.


According to traditional business management practices, no startup should last more than a couple of months. And most don’t. And yet, somehow, Silicon Valley as a cultural economy is the most innovative, successful, profitable(?) place in the world.


What the MBAs don’t get is that a rising tide lifts all boats. If my company creates a new market, can’t meet demand, and goes under, I can easily find great work with the competitor that put me out of business. Or start a new business that serves their customers in a new market. Shoot, even if all I get out of it is that I can use their product, that’s great. I’m still better off, even though I “lost”.


And as long as we have this understanding with each other, that failure won’t be punished, but rewarded, not with a golden parachute, but with more chances to fail– then we’re not afraid to take risks. We’re allowed to be crazy. We’re allowed to innovate.


Bet our future on an insanely great new project for which there’s no demand, why not? We have nothing to lose. It’s just a company, there will be more like it. We might not get rich, this time, but we’ll know we made a dent.


Steve Jobs might not have invented that idea, but he sure taught it to a whole bunch of us.


Source: Hacker News 

					

		
		
	


				
					
	

		

						
Opportunity or Execution

			
						

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Brad Feld on Context and the importance of opportunity or execution:




For a big company that dominates a market, it’s totally focused on execution. The company is built for execution and, assuming it is built well, just cranks things out. What it cranks out might be inspiring, or it might not be, but it’ll keep cranking things out.


For these companies, finding the new opportunity is really difficult. The company is tuned to defend its turf, not go find new turf. Execution is all about defending market position, maximizing profit, expanding market share in existing markets, and allocating resources. In a few extraordinary cases, this activity is massively inspired, usually around companies that love their products (Apple) or their customers (Virgin). So – for most of these companies, “execution” is easy relative to finding the new opportunities. And many of these large companies don’t focus on finding the next opportunity, or expanding their existing opportunity, until their business hits major headwinds, is in decline, or is massively disrupted. I give you Borders, B&N, and Blockbuster as examples here – awesome at execution until what they did became irrelevant and then it was too late for them to do anything about it (other than maybe B&N, who might pull off their transition.)


In contrast, startups are totally focused on the new opportunity. Assuming they find it, and it’s a big one, execution becomes the main challenge in front of them. Their activity is all about scaling up the organization, hiring people like crazy, building a culture of shipping great product consistently, reacting effectively to early customer feedback, and continuing to evolve their products to meet the new massive opportunity they are going after.




Families SA is in the lack of opportunity space (with some emphasis on execution too) and TACSI with the help of the Radical Redesign team is cranking up on the opportunity space and will need to figure out execution and scaling up.

					

		
		
	


				
					
	

		

			

				
Every company can be a start-up

				
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In a post-Steve-Jobs world, there is no longer an excuse for large corporations to be less bold than start-ups. Elegance, character, artistic integrity, and ruthless dedication to design can no longer be derided as luxuries of those who don’t have anything to lose. Apple is now one of the largest, most successful companies in the world, but it still behaves as if all of its employees could fit in a 9×7-inch photo.


In an article in the premiere issue of Macworld, members of the Macintosh team were each given a few paragraphs to talk about the project. The very last entry is from Steve Jobs, who characteristically starts by deflecting credit. “The people who are doing the work are the motivating force behind the Macintosh. My job is to create a space for them, to clear out the rest of the organization and keep it at bay.”


He ends nostalgically, a wizened veteran of the tech industry at the ripe old age of 29, contemplating the future of the Macintosh team. “The group might stay together maybe for one more iteration of the product, and then they’ll go their separate ways. For a very special moment, all of us have come together to make this new product. We feel this may be the best thing we’ll ever do with our lives.”


via Steve Jobs: a personal remembrance.