Objective reality asserts that there is a reality that is external to our thought and consciousness. We can perceive this reality through our senses and process it with our minds. This external reality exists independent of any of us and would still be here even if we weren't.



In an objective reality two journeys are taking place. The external journey of our idea/company with its interactions with the world and the internal journey which is our own personal growth as we learn what to do and how to do it. In this reality both journeys are important and, at any given time, one may be more important than the other.

OTOH, if we really exist in a subjective reality then there isn't any external journey at all! The journey is entirely an inner one. What we experience (what our venture experiences) is totally a product of our own thought. Hence, our venture's journey (the external journey) is identical to our inner journey, how we grow and learn and, more importantly, what we vision out.

So now let's do some odds (because physicists can't stay away from math). In the objective scenario the inner journey is at least half the journey. In the subjective scenario the inner journey is the whole journey.

If we take the fraction of both scenarios we see that the external journey only makes up 1/4 of the journey while the inner journey makes up 3/4 of it.
Let's assume that either scenario (objective or subjective) is equally probable. Then to get things right we should pay more attention to our inner journey because it is, most probably, the important part of the process.

Sometimes an entrepreneur doesn’t need a new idea, just a old one that can be made to work better. A month ago some guys selling a product built in Europe came to me with the idea of building it here and cutting out the Europeans. The problem was that the Euros have a US Patent on the product. The local guys had the market, know the customers, can raise the money, and rather than buy more they wanted to go off on their own. Entrepreneurs they are (as Yoda would say).

Well let’s see. They have customers. They know what they want based on the most practical test there is, that is the customers are buying the product. They are willing to take the risk. They clearly can manage the process. They can dig up the money. Time for a new business.

But the Patent Law says they can’t do it, so they come to the ol’ techno-whore, yours truly. I do what is called a work-around, a different way to get from Point A to Point B without going through the patent.

So now they have a better product (cheaper to build and delivering more effective customer features, benefits, and results) and it has fresh IP (the new product works in a unique and novel way so we applied for a patent on it).

An old idea with a new way of looking at it offering new customer pleasing features and benefits, built in the USA so some local folks get jobs, and the money stays here.

That’s an Entrepreneur at work, hats off to them. Customer first, then product.

Copyright 2008 Barry W Thornton all rights reserved.

Labels: better, building a business, cheaper, entremanure, faster, ideation, IP, patent, work-around

A couple nights ago I addressed the Ideation Group of Austin Bootstrap, a fine group of beginning Entrepreneurs. They, and I, follow Bijoy Goswami’s Bootstrapping ideas about the flow from worker bee to business Entrepreneur, in this case you start with and idea, create a Demo, and then proceed with raising some money to get on with business.

As usual I found my self 1) running overtime about 45 minutes with the help of lots of questions from the listeners, and 2) yelling a lot, no one has ever tagged me as Mr. Congeniality. Many are appalled at my choices of adverbs and adjectives when talking about such things as VCs, bit-time CEOs, and corporate careers; but I get laughs and a few lights blink on (you can see it in their eyes) so it is not in done vain.

My son pointed out to me that my primary message is always the same; Francis Bacon was wrong, knowledge is not power, it is a mental holding pattern. Knowledge plus action is power, and in the end we do pretty much everything today for power. The difference between being an entremanure and an entrepreneur is action.

So again the theme is get off your ass and do something, customers will give the final idea so you can start with almost anything close. Only your personal insecurity retards the progress (it's called the "BOX", the one you are always trying to think out of). Just take it to the customer as soon as possible, they will straighten you out.

As short story before I close this testimony. I went to a presentation review for entrepreneurs a couple of months ago, I was a mentor along with a couple of other guys and we listened to a presentation by a couple of folks with an idea that they had poured $70k and a year into for software that involved volunteer work and women, they were looking for half a million and wanted us to comment on the presentation. They launched off on the idea, the pitch was all laid up on PowerPoint (which is only slightly better than morphine for numbing your mind). 5 minutes into it I stopped it and asked - The Question . . . “What did the customers say?” The CEO told me that they had not presented this to any customers yet, only friends, family, and experts (someone who used to be call "Pert").

Well, I alienated everyone in the room with my usual question (delivered in my drill Sergeant’s voice) . . . “What the F*** are you doing? Without customer feedback this is all a work of fiction! You made this all up, there is no reality in this presentation, only you dreams”.

How can I comment on fiction in a real world? The other two mentors went on to talk about the cute slide show and how to make it cuter, they were corporate guys used to living in a cartoon,. I got up and left. I don’t live in a fictional world (I may be delusional at times but not that day). They were too polite to deal with the truth, what a waste of everyone’s time.

The truthache you have to have is the customer’s reaction – will he give you a check for your idea when you can get it to work and what does “work” mean???

Nothing else counts!

copyright 2008 Barry W Thornton all rights reserved

Labels: Austin. Bijoy Goswami, bootsrap, entremanure, Entrepreneur, Francis Bacon, idiots, mentor, power, powerpoint, reality check, startyp, truth

There is an old story that goes: sit down and don't rock the boat, I'm trying to drill a hole in the bottom. Trying to scuttle the boat, or business, may not be intentional, but the action or conduct that does that may be all that people can figure out to do. This is part of the problem of the Entrepreneur inside a company has to face. Businesses die today because, in the now common business vernacular, the DNA is wrong (we know it really is the MEMEs (1) that are wrong but the folks with bad Memes think of it as DNA, how foolish, everyone knows you can't change DNA, Memes on the other hand are fluid and can morph with degree of ease).

The internal entrepreneur's problem is changing the way the business thinks and acts. Like different DNA in a body, he (or she) is attacked as a fatal threat by the rest of the business unless he is shielded or camouflaged.

Protection or shielding does not work that well because it permits all the 'antibodies' to focus on a clear target. An example would be a CEO deciding that he needs to change the course of the business to grow, so he puts a spotlight on the group trying to change the way people think. Targeting, simple targeting. That spotlight makes it clear to all just who has to be wiped out to maintain the status quo. It is the guy rocking the boat that everyone can hate.

Camouflage on the other hand is surreptitious and a bit sneaky, doesn't attract a lot of attention and in the internal entrepreneur's case, lets him win converts, even gets the sympathy vote by the very people who will eventually be changed. By not putting the change mechanism in people's faces you offer a way to adapt that is not confrontational.

Traditionally new ways were developed in a skunk works, a place that was simply not visible where the Standard Operating Procedures could be tossed out and newness could happen. Problem is that skunkworking doesn't allow the newness to infect and drive the oldness to change, It leaves the oldness in isolation. You may get a neat new product but you don't necessarily get a new way of doing things.

The point is that the internal entrepreneur's job is really to adapt the organization to treat the customer in new ways. To do that his act must be visible and infectious to all but not threatening. Quite a trick, takes special guts, and in the end a love for both the business and customers. Because in today's marketplace this has to be a continuous process. Too bad GM can't figure this out.

Question is, can your company figure it out?

(1) DNA are the units of biological knowledge that set the pattern for the entity containing them, Memes are units of cultural knowledge the set the pattern for the way the entity thinks

Barry W Thornton is technologist, who organizes, manages and explains knowledge. Copyright Barry W Thornton 2008 all rights reserved

Labels: change, Entrepreneur, fear, GM, skunkworks, survival, the new marketplace, your company

Bijoy and I have had a long standing discussion about whether or not you can apply bootstrapping principles to venture backed companies or not. I've always felt that the principles of bootstrapping could be recreated in a venture backed company at some level. For the last two years, I've gotten to be part of a living case study. Taking some time off has allowed me to spend a lot of time reflecting on the effect that raising venture capital money has on a bootstrap businesses.

The Bootstrap Austin website talks about Plato's "Necessity, who is the mother of invention" and its bootstrap corollary "Constraint creates innovation". I don't think I appreciated how important the constraints are in helping a business find itself until now. Constraints are so amazingly important in helping businesses focus on the essence of what matters. Constraints force a bootstrap venture to communicate with customers and prospects to ensure that whatever is being delivered is something that is needed. The money that venture capital brings removes the constraints and my experience has been that when the constraint is removed, the focus on the customers' needs is replaced with either a shotgun approach ("lets see what sticks") or a focus on a perception of their needs.

There is a cultural shift that takes places after you raise venture money. First, it changes the mindset of employees who were part of the company before the venture money arrived. It's human nature that when money is scarce you are going to value it differently than when it is plentiful. Second, you begin to hire people who never knew the company as a bootstrap organization but only as a venture-backed one. The overall risk profile of the employee base shifts. Third, one of the benefits of taking venture capital is access to the resources of the venture capitalist who invested in the company. Among those resources are senior executives that will help you round out your team. Generally, the culture of those individuals are even further away from the culture of the company pre-VC.

When you add Silicon Valley to the mix, I believe all of these points blow up even more. The cost of living, the importance of speed often perceived as impatience, the sometimes incestuous relationships that maintain the cycle, and the search for the next Google are all factors that are magnified in Silicon Valley but are in no way exclusive to Silicon Valley.

Intellectually, I still believe you can apply bootstrap principals to venture backed companies but practically speaking, I believe it is very difficult to do so. Here are some random ideas, none of which have any proof of working, that I believe that would allow bootstrap companies to maintain some of the things that made them successful while still leveraging the catalyst that is money that venture capital provides.

• Don't announce internally or externally how much you raised or that you raised money at all. Reducing the number of people that are aware of your the company's bank balance is one way of artificially maintaining a culture. Of course, this is not realistic and comes with other consequences that I feel would outweigh the positives.
  
• Use budgets and targets to create artificial constraints. Controlling how much your sales team travels (e.g., 3 weeks per quarter) can create constraints that drives the right behavior. A sales person knowing that they have to make every travel day count will make sure that they prioritize the right customers (e.g., balancing the size of the deal with the likelyhood of closing the deal).
  
• Create a culture of capital efficiency. One such tactic is to be a hawk on expense reports (esp. the first 1-2 that a new employee submits).
  
• Lead by example. Employees will look to their leaders to determine acceptable behavior patterns. If their leaders are eating at Tavern on the Green and ordering $100 bottles of wine, the employees will think that is acceptable behavior.
  
• I'll reiterate the leadership point. If the founders and leaders of the company test their ideas by talking to customers, it will create a culture that the "Customer is #1". If the founders and leaders answer support questions regularly or at a minimum on occasion, it will create a culture that support is important.
  
• Use lore. I can not underestimate the power of stories in creating a company's culture. Every company has some stories the define it. Those stories course through the veins of the organization and every employee in the company knows those stories. When in an ambiguous situation, the employee will have the lore to fall back on to know how to handle that situation.
  

As I said, none of these ideas have been tested or proven. As such, I would love to get feedback on what things have worked for other companies or if it is even possible to maintain some of the bootstrapping culture in a venture backed company.

Neelan Choksi is currently enjoying a 4-6 month break from his efforts on the SpringSource management team, spending time with his pregnant wife and daughter, trying to get in shape, and knocking of the items on his "honey, to do" list.

Labels: constraint, culture, customers, funding, necessity, team

I'm reading Predictably Irrational, by Dan Ariely, and came across a story that reminded me of bootstrapping a company.

In 210 BC, a Chinese commander named Xiang Yu led his troops across the Yangtze River to attack the army of the Qin (Ch'in) dynasty. Pausing on the banks of the river for the night, his troops awakened in the morning to find, to their horror, that their ships were burning. They hurried to their feet to fight off the attackers, but soon discovered that it was Xiang Yu himself who had set their ships on fire, and that he had also ordered all the cooking pots crushed.

With their ships gone, the soldiers had no route of retreat. Winning was the only option. And win they did. 9 battles in a row before defeating the Qin forces.

This is similar to when a bootstrapper enters the Valley of Death and commits to their venture, but before they are making money and cash flow positive. They are forced to figure out how to make it work with what they've got. The timeline is not completely in their control.

We're always tempted to leave ourselves an escape route or path of retreat. And usually that's a good idea. But sometimes there aren't enough resources to mount the attack and cover the retreat. In order to be successful sometimes you have to commit the resources to what you believe in because the retreat option isn't acceptable. Sometimes once you head down a path there is just no turning back, so you might as well commit all of your resources to getting to the end.

When I was CEO of SKYLIST, this happened twice. We were growing and needed to shift focus based on customer demand and a rapidly changing market. Both of those times it was focused on eliminating unprofitable customers and focusing sales on specific types of opportunities. Each resulted in a temporary drop in revenue but strengthened the long term sustainability and profitability of the company.

When Datran Media bought SKYLIST, we went through the same exercise again. Each time the SKYLIST business came out stronger than before and had replaced the revenue with better customers within a year.

Each time it was the right thing to do and left us stronger than before, but each time we went into it kicking and screaming. Change is hard. When something works, we often get the urge to just do that over and over - well past the point where it stops working. It felt bad to move away from lines of business we had traditionally dominated.

But it was turning point for the company. Had we not burned the ships behind us, I'm not sure we would have survived and succeeded.


Joshua Baer's latest bootstrap startup is OtherInbox.com.

Reposted from Austinpreneur

Labels: joshuabaer austinpreneur entrepreneurship skylist

Bijoy asked me to take my notes from Rick Engel's talk a couple weeks ago and write up a blog. Here it is.

Rick Engel is a serial entrepreneur who currently owns Austin Java, Uncle Billy's, Little Woodrows and Paggi House. I love hearing entrepreneurs speak because there's always something about them that strikes a chord with me, regardless of what industry they have focused on. Listening to Rick was no different. What I enjoyed most was that he wasn't in a particular mold. Hard working...absolutely; focused on the customer...you bet. But most of all, he was real. Given where I am in my journey with entrepreneurship and trying to further understand what drives me, Rick's talk was just what the doctor ordered to help kick off my 4 month sabbatical from work.

"I'm just a small operation with (fill in the blank) employees. There's not much my company can do in sustainability and corporate social responsibility, right? Besides, I'm not even sure what this term "sustainability" really means to me and my business!"

That's a synthesis of what many emerging entrepreneurs have told me during the past several months we've been visioning the new charter for Bootstrap Sustainability. Guess what? Right now in your current business venture, there's plenty of "low hanging fruit" of changes you can make that will improve your company's impact as viewed from the lens of long-term stewardship.

What is Bootstrap Sustainability and how can it help my venture? Glad you asked. Bootstrap Sustainability is an official subgroup of Bootstrap Austin.

Bootstrap Sustainability exists to (1) identify businesses in sustainability that can be bootstrapped, (2) hook those ideas up with entrepreneurs and help nurture new and emerging bootstrap companies in the sustainability (or related) sector, and (3) provide education to the general Bootstrap Austin community.

We recently conducted a 6-hour workshop which brought 20 local thought leaders together in one room to help each other learn more about ourselves and the true nature of our current initiatives.

Bijoy Goswami led us through a fantastic Bootstrap Bootcamp where he informed, enlightened, and challenged us. Most of us start a company thinking we know what the business model should look like. One of the key insights Bijoy conveyed is that, "the business model emerges. You must first say to yourself, 'I do not know the business model' and get to the position of 'not knowing' and then you can start to discover it."

After the Bootstrap Bootcamp, the group rolled up their shirtsleeves and helped each other work through some of their most pressing immediate issues. In the spirit of the bootstrap community of bootstrappers helping each other perspectives and tactical advice were freely offered. By the end of the day, everybody was delighted with what we accomplished in the workshop and excited with where we are going individually and collectively.

Steve Harvey is the founder and CEO of the new bootstrap startup Cleantegrity, which exists to help emerging "cleantech" companies (such as solar, wind, energy efficiency, green building products, and new water-related technologies) bring more of the right products to market faster. For more discussion or information on Bootstrap Sustainability (or Cleantegrity, of course), please feel free to call Steve during the week at 512.878.6550 or send him an email.