Keys to Entrepreneurial Success: Building the Onion

I spoke with a friend yesterday from grad school who asked me about starting a company.  When people ask me about what it takes to start and grow a startup, I always think about “Building the Onion” – it’s a phrase that I thought of a while back to describe how entrepreneurs should maybe try to think about getting something going or getting something growing. 

  

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What do I mean, “Building the Onion”?  To me, Building the Onion is all about layering on goodness or progress until you’ve got something tangible to work with.  You can think of every major milestone in a company as being its own onion to build.  Or a company is the onion and it’s your job to keep growing it.  It’s sometimes pretty intimidating to envision how to get from “here to there” in a startup, but I find that if I have onion on the brain (as opposed to, for example, “moving a mountain”), it really helps.  I believe that every day, our company has to be working to add value for our customers and partners, improve efficiencies within the company, or accomplish something to add to the onion, even if that something is having fun together and getting to know each other better as a team.

So I guess to me, Building the Onion consists of at least a few of the following:

  1. Starting with the germ of an idea and building around it
  2. Getting some validation from folks you know (and hopefully trust/respect) to see whether or not you’re on the right track
  3. Arming yourself with the proof points that will give you the confidence to take a leap and go for it
  4. Convincing a partner(s) to come on board who really help take the idea and turn it into something
  5. Mapping out your initial understanding of the market to see if there really is an opportunity
  6. Sketching out a prototype to determine feasibility, possible costs, or timeline
  7. Speaking with mentors or trying to recruit advisors to help you along the way as your idea evolves
  8. Evolving your idea and plan as you speak with more people
  9. Getting something up and running for users to see or play with (if feasible)
  10. Recruiting investors (angel or venture) to buy into your vision for the future 🙂


So why do I think of it as building an onion?  

It’s hard sometimes as an entrepreneur to gauge progress.  Let’s say you’ve been working your butt off for the last few weeks.  Maybe you still have a day job and are working nights and weekends.  You might be thinking to yourself, “Have I moved the needle forward in the last three weeks?  I’ve worked a ton, I’m tired and sleepy, but what I have really accomplished?”  Sometimes you get discouraged.  You show your idea to someone who “doesn’t grok it”, you get frustrated that people can’t see how big your company could become, you don’t get support from your friends or family who want you to take a different, potentially safer path.

I remember back when Visible Measures was just getting started.  Every person I talked with about the general concept was in a way a chance to build the onion.  If people liked the idea, I could feel my own confidence level rising.  I know that many entrepreneurs talk about how they are unstoppable in their dedication to their ideas, but I’m just being honest in saying that sometimes I needed a little support and validation.

In terms of advisors, it was major validation to be able to recruit well-respected people like MIT Professor Edward Roberts to first be an angel investor and then a member of the board of directors.  I was able to tell people in the local area that Ed was involved and that would immediately get people’s interest level piqued.  Sometimes, building the onion can be all about gathering enough positive data points to be able to demonstrate that you’re on to something that other people find interesting 🙂

How about trust?

The friend with whom I spoke yesterday asked me about confidentiality agreements and such when seeking advice from folks.  It is my belief that in a scenario where you are trying to build the onion by getting help or advice from friends or advisors, trust is critical.  You are the person needing help.  Assuming that you are talking with people that you know or who people you trust referred you to, in general, I would say that it’s better to trust than not to trust, as you are hoping that people put their trust in you too.

If you can envision Building the Onion as you are getting started or as you are building your business, maybe it can help you keep track of the little steps you are taking each day.  And maybe that is the type of scorekeeping you can leverage to stay on track even as the road looks long or challenging.

Brian

Defining The 5 Classes of Entrepreneurs

I’ve been thinking a lot lately about what makes a great entrepreneur and the motivations behind why someone tries to become one.  People have been asking me for advice on starting companies or raising money, and I’ve been giving talks at various events about my humble experiences as an entrepreneur.  I found myself often struggling to answer broad questions and provide blanket statements about what works and what doesn’t work, without some sort of “situational context”.  By situational context, I mean if you’re trying to start the next Google or if you want to start a new shoe company.  After a bit of thought, I’ve come to the conclusion that there are really 5 “classes” of entrepreneurship with different motivations for each.  I hope to spur some discussion on the topic, so I’ll dive right in:

The Five Classes of Entrepreneurs

I. Opportunist – Class I Entrepreneur
II. Lifestyle Entrepreneur – Class II Entrepreneur
III. Problem Solver – Class III Entrepreneur
IV. Visionary – Class IV Entrepreneur
V. Game Changer – Class V Entrepreneur

Maybe I’ve been hearing too much talk about “Magic the Gathering” cards in the office lately, but I organized the “types” of entrepreneur into Classes.  In my opinion each “class” represents a different level of goal, motivation, and outcome, and it is certainly possible for people to progress from one level to another.

I. The Opportunist Entrepreneur (Class I): The Opportunist recognizes that a particular situation presents an opportunity to make money and goes for it.  The opportunity could be selling umbrellas on a rainy day, offering ice cold bottles of water in the middle of summer, or jumping on a hot and timely trend and offering some sort of related service.  Many entrepreneurs get their start this way, as the best “opportunistic” opportunities often do not require much start up capital and often have a sense of urgency about them.

An experience I had as an Opportunist was during college.  It was the early 90’s, and people were using usenet newsgroups as the web was still in the lynx/mosaic phase.  I was a big fan of sportscards (baseball cards etc) and recognized an opportunity to take sportscard inventory from local card dealers for teams and athletes that were locally not in demand (eg. 49ers cards in Boston don’t often sell well) and sell them over the Internet.  I was able to pay for a lot of my college expenses with this little hobby business.  My desire to start a website that would enable me and my friends to trade goods online is a whole other story, however 🙂
Skill required: 3 / Endurance required: 2 / Foresight: 4

II. The Lifestyle Entrepreneur (Class II): The Lifestyle entrepreneur wants to build a business to be his or her own boss, work with his or her friends/family, or pursue an engaging but not all-consuming business opportunity while still maintaining balance in ones life.  Many Lifestyle businesses are bootstrapped to begin with, because if there was outside funding in the business, there would often be outside pressure to build the business faster or achieve some sort of a financial exit.  A lifestyle entrepreneur could be doing anything from running a successful (and fun) restaurant to operating a software business.  Perhaps the critical defining characteristic about a lifestyle business is that it is run to solve for the benefit of work / life balance or personal gratification rather than for growth.

I worked for a Lifestyle Entrepreneur once and it was an eye opening experience where I learned about people’s different motivations and goals.  I personally can totally respect people who seek lifestyle business balance.  How much money does a person really need?  And at the same time, not everyone wants to be retired at 35, so why not try to do stimulating or fun work and still get to play around as well.
Requirements: sustainable business; life goals.

III. Problem Solver (Class III): The Problem Solver case starts with a person who can’t seem to get his/her mind off a problem until they’ve figured out a way to solve it.  And then they cross into becoming a Class III entrepreneur when they resolve to do something about it.  Many companies get their initial start with the goal of solving 1 problem.  This fact is significant.  To me, when friends or friends of friends ask me about business ideas or starting companies, and they have all these different ideas or solutions thought up – I get concerned. Pick one problem and start from there.  If you can solve that problem (and enough people have that problem) then you’ll likely have a business of some sort.  

Visible Measures got started this way.  When we sort of figured out a problem we wanted to attack (understanding user behavior) we narrowed it down to the field of online video as a way to hopefully be able to build up some traction and expertise.  To get going as a problem solver takes focus; to create and grow a problem solving business takes all of the traits of an entrepreneur.
Defining trait: Hunger for improvement

IV. Visionary (Class IV): The Visionary thinks they can see the future, a future world that is more efficient or more open or more collaborative.  Since the Internet first rose from academic curiosity to phenomenon to business critical infrastructure, there are been several visionary companies who were ahead of the curve including Napster (P2P and freedom of music), 6Degrees (social linking), Altavista (parallel search), Friendster (social networking), and Second Life (virtual worlds).  All of these companies share several common traits: strong visionary entrepreneurial roots, game changing impact and potential, and a struggle to cross the chasm into long term viability.  In some ways, the Visionary does the most to help the entrepreneurial community because so many of us draft behind the trailblazers who innovate and forge ahead in front of us.  
Legacy: The world (or at least people’s perception of what is possible in it) has changed.

V. Game-changer (Class V): The game-changers are the entrepreneurs that we read about every day, and are often people long-admired by students and fans of business innovation.  For me, I have always been amazed by the accomplishments and drive of leaders like Steve Jobs, Bill Gates, Michael Dell, Larry Ellison, and others.  Not withstanding whatever debate there may be about a person’s or company’s business practices, Class V entrepreneurs have not only taken products, technologies and even industries to another level on the innovation curve, the ones I respect the most have done it day in and day out for years.  Larry & Sergey are now in these ranks and Mark Z. is definitely on his way. 

To me, a critical factor in going from Class IV to Class V Enterpreneur is the notion of “sustained innovation”.  To burn brightly only to flame out a few years later doesn’t make the cut in my opinion.  If Facebook has 500 million members a few years from now and is the dominant social networking platform on the planet, then Mark Z has clearly achieved “game-changer” status. 

I think about how Steve Jobs once said that the death is the destination we all share – so “have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”
Longevity: At least a decade of sustained innovation. Impact: Wow.

Those are the 5 classes of Entrepreneurs that I came up with.  I’m curious to hear what you think.

And as Steve Jobs once said: Stay Hungry.  Stay Foolish.

(or try to be “hungry yet humble”)

– Brian

Standing up and Fighting Ignorance & Racism

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Being an entrepreneur isn’t usually easy.  You’re often fighting uphill battles to educate your market, build customer acceptance, overcome technical challenges, win over investors or other types of supporters, shape a great team and culture, and much more.  But for the most part, I feel so fortunate to have a mostly equal shot in our society to have the opportunity to work passionately and to pursue my entrepreneurial dreams.  

So with that as a backdrop, today I felt my temperature rise a bit when I saw Miley Cyrus and her “controversial” photo where she and her friends mocked Asian Pacific Americans by pulling their eyes back to “slant” them.

Here is the photo:

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Gut reaction = upset: I have to admit that after seeing this I was a bit upset.  Seeing some kids doing dumb things isn’t so uncommon, though it did remind me of some not so pleasant grade school memories.  But the thing that really upset me was reading some of the commentary around the photo: I was shocked that there is SO MUCH DEBATE as to whether this photo is offensive or not.  Are you kidding me?  I’m reading commentary on the Interwebs from people who are saying, “Oh come now, this is nothing, it’s not offensive.”  

Excuse me but the “targeted audience” should ultimately be responsible for determining as to whether this is offensive.  Believe me, every Asian Pacific American, or more properly, every Korean American, Chinese American, Japanese American, etc. who has been taunted or made fun of in a similar fashion most definitely finds this incredibly offensive.  I don’t care if it’s Miley Cyrus or not so much as I care that people understand how offensive and demeaning this type of behavior is.

My personal experience is that racial taunting sucks: I grew up as one of the few non-Caucasian students in a upper middle class suburb of Pittsburgh, PA.  I have admit that for the most part, I had a pretty great upbringing.  Most of my classmates were good people and I got along with most everyone.  However, I did have some classmates, in addition to random strangers on the street or at the pool or at the park, who would make fun of “chinks” or make “ching chong” noises either about others or in front of me. The most ignorant would go so far as to make fun of me directly, calling me a “gook” or worse.

As a young person, I mostly tried to help these folks understand that I didn’t enjoy their taunts, and that they were being offensive.  When it got bad, I did sometimes react with anger, physically confronting the worst of these “people”.   But the first rule of fight club is that ‘we do not talk about fight club’ 🙂  And like any entrepreneur/person worth his salt, I realize that this type of physical confrontation is just not a reasonable or a “scalable solution.”

Racism is personal and offensive: Still today, I witness firsthand that racism is still prevalent and personal.  If I’m out at a bar with friends for example, depending on the bar, the time of night, and the location/city, there is probably a 1/7 shot that some drunk guy will say something racist around me or to me that will make me want to step up and put the guy in his place.  But again, I realize that this is not a scalable solution.  What is one to do?

My Caucasian buddies often tell me to ignore it.  Some have even gone so far as to say that I am overreacting.  But they admit that they have never experienced this type of offensive racist behavior.  It’s actually sort of hard to put yourself in someone else’s shoes in this type of situation in America.  I realize that.  This lack of comprehension is exactly what is causing the debate about whether the photo above is offensive.  So please just trust me, unless you’ve experienced it, keep an open mind.  And please don’t tell me if I should be offended or not!

Debate over this photo demonstrates ignorance: Some responders have pointed out that there is a male in the photo who appears to be of Asian/Pacific descent in the photo and that this would seem to excuse the participants in the photo.  I am being blunt here but, are you kidding me?  I have friends who are African American, Israeli-American, or even Italian or Irish American whose parents and grandparents have described to me tales of how poorly they were treated in the past under various circumstance, and how they often had to “grin and bear” it when confronted by a large group of the “majority”.  Well, I’m not grinning and bearing it.  I can’t stand it frankly.  The ignorance must stop.  Some people even blame this guy for not standing up for himself.  Excuse me but is it really his fault that this photo was taken?  Come on!

Everyone is in their origins an immigrant to America.  That is what makes us the most innovative and entrepreneurial country (arguably) in the world.  But in that context, people every day call others spic or a wop or a kyke or a n*gger or whatever.  Is that we are about?  Is that any different than squinting your eyes and calling me a chink?   Is any of this acceptable?

Something more fundamental needs to change: I believe that the core issue is education and mainstream media adoption.  As an entrepreneur, you are constantly searching for patterns to study what has worked before and what could work in the future.  In this case, I look at examples of groups such as Jews, African American, Irish, and even woman that have become more and more accepted or at least well-represented over the years.  For example, in movies from as recently as 10-15 years ago, now-obviously offensive portrayals of Jews, Blacks, and other ethnic groups were commonplace.  But as Jews and Blacks in particular have achieved more and more prominence, with more political and media influence, their perspectives are at the least much more represented to (and hopefully understood) by mainstream people.  Can you believe there was a time when woman couldn’t vote?  Now, it seems to hard to remember, but in all honesty, we’re still in the “startup stages” when it comes to the understanding of other cultures.

Bottom line: Mainstream America’s understanding of Asian Pacific American culture and perspective is very far behind.

To see what I mean, here is another example of similarly offensive and racially insensitive behavior:

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Meant to symbolize Peace? Do you remember this from the 2008 Summer Olympics?  This is the Spanish Men’s Basketball team posing to “honor” their sponsor, the Chinese Sports Apparel Company Li Ning.  What a show of sportsmanship and world unity!  To me, this was almost laughably horrible.  But there was relatively little public condemnation about this behavior, and Spain’s team issued no formal apology.  They mostly brushed it off saying, “we didn’t mean to offend.  It’s not a big deal.”  Unacceptable!!  See, but this is my whole point.  It was tremendously offensive to the millions of people of Asian and Pacific decent who were outraged at Spain’s cultural insensitivity and rudeness.  But there was no media or political call for a formal apology because the mainstream media does not understand the perspective of the Asian American minority.  

Cycle of Racism Repeats Itself: Asian Pacific Americans have only just begun to crack into the mainstream media and political consciousness.  We need to increase our social and media standing.  But people in general need to try to see the patterns of racism repeating themselves over and over every generation or so.  It’s always some group that gets subjugated only to gradually claw into the mainstream, leading to increased understanding over time.

In 40 years, will the perception of Asian Americans be different as the perception of African Americans has evolved?  I truly hope so.  Like any entrepreneur I’m filled with a disproportionate amount of optimism.  I’m hopeful that Asian Americans will be much more accurately represented as individuals, and family members, and neighbors, and friends, and lovers, and siblings, and mentors, and children.  That we will be judged based on “the content of our character” – and that more and more public examples will help mainstream America understand that that is what they need to try to do.  In 20 years, what kind of world will my son experience?  Will people call him a “gook”?  Will people still debate whether or not photos like these above are to be offensive to him??  

We need to take a stand against ignorance and closed-mindedness.  This insensitive and uneducated behavior and lack of understanding is the basis for conflict, strife and even war.  We truly cannot achieve peace without understanding.  As I an entrepreneur, I know that you have to carefully choose your battles.  To me, I feel that this one is too important for any of us people who HOPE to ignore it any more.

UPDATE: A friend of mine who is gay just emailed me to tell me that when he goes to a bar, the odds that someone says something homophobic is 1 in 2.  Yuck.

UPDATE: The OCA (Which is dedicated to embracing the hopes and aspirations of Asian Pacific Americans) and many other Asian American activist groups has demanded a formal apology from Ms. Cyrus.

UPDATE: Miley says she’s sorry that some people took her “goofy faces” out of context.  Groups like the OCA are understandably not satisfied.

UPDATE: Miley finally says she’s sorry.

UPDATE: Margaret Cho throws down over Miley.  Nice!

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