Don’t chase the money, chase the dream

At LeWeb last week in Paris, Tony Hsieh delivered a very inspiring speech about his company - Zappos - and the importance of company culture. We have highlighted below the main points of his message and explained why we think that these ideas are very relevant to Sandbox.

Define your core values

A company that has a good culture makes well in the long term. Companies have to commit to them and avoid making compromises, which also means hire and fire people based on these values. For Tony, the right way to start a company is to define its core-values.

Don’t chase the money, chase the dream

It is crucial to have a vision that goes beyond money and profits. Don’t begin a business with the objective to earn money. Do what you are passionate about and as you will do it well, the money will follow. Ask yourself what would you be so passionate about doing that you would do it for 10 years without earning a dime.

Once you have a strong vision, you will find it much easier to motivate yourself and your employees. You can motivate people with financial incentives or fear, but true motivation goes along with inspiration. If you can inspire your employees making them share your vision, you don’t need to worry about motivating them anymore.

Keep asking why

Ask yourself what you are pursuing in life: buying a home? getting married? Once you have the answers, ask why again. Why do you want to buy a house? Why do you want to get married? Eventually, everyone ends up with the same answer about what they pursue in life: happiness.

What is happiness about?

There are four factors that create happiness:

1. Perceived control
2. Perceived progress
3. Connectiveness
4. Meaning (being part of something bigger than yourself)

Once you have understood them, you can apply them in your business to better motivate your employees: Zappos for example gives small promotions every 6 months instead a big one every 18 months, increasing the feeling of progress among its employees.

The 3 types of happiness

Tony sees 3 types of happiness: pleasure, engagement and meaning. Most people start looking for the first one, hoping to then be able to reach the others, which is the wrong way to go.

- Pleasure is for example about buying new things. It works well, but only as long as you can sustain it.
- Engagement is about feeling passionate about what you are doing. It works better than pleasure, but is not sustainable either.
- Meaning is about finding in life what provides happiness in the long term. Finding meaning creates a long-lasting feeling of happiness.

Via: sandbox

Does every startup need a Steve Jobs?

What does Steve Jobs really do for Apple?
I had a recent conversation on Apple’s incredible design culture and what it would take to create that in a startup. In many ways, it seems like an insurmountably difficult challenge to play the role of Steve Jobs, with his god-like sense of product aesthetics and interactions.

And yet, Apple has hundreds of products and experiences – hardware, software, HR materials, commercials, etc. Steve Jobs certainly doesn’t have time to work on the design of every Apple product, and of course has 35,000 employees to manage. So what does Steve Jobs really do, to create the amazing design culture at Apple?

And more importantly, can a startup hope to even start to capture the same kind of culture?

Well, let me give you my best guess

IDEO’s product framework for Desirability, Feasibility, and Viability
First, let’s take a quick detour and talk about IDEO’s perspective on new product development – this is documented as part of their 100+ PDF on human centered design, but also recounted to me by my patient girlfriend who works there.

The idea is that all products ultimately come from an epic struggle between three perspectives: Desirability, Feasibility, and Viability. IDEO focuses on new products from the desirability side, which means they think about how to make sexy products with clear value propositions, and think technology and business goals flow from that. Most of their Fortune 500 clients do not act this way, of course, which is why they have to hire IDEO.

Here’s the diagram included in their HCD toolkit:



The way this was retold to me is that these factors map into functional parts of a business:

Viability = Business focus (marketing, finance)
Feasibility = Engineering focus (technologies, agile process, etc.)
Desirability = Design focus (customers, aesthetics, etc.)
Business-focused product perspective: Viability
For business-oriented products, the focus might be on any of the following:

“hot markets”
making money
funding potential
distribution
metrics
The idea there is that you get to a product via one of these first-order items. A business-oriented entrepreneur might identify a market, then try to come up with a product within the market – for example, “wow, Zynga is making $250M/year, and fish games are big. I should come up with a social gaming product too.”

I would also argue that “corporate” thinking (including MBAs and biz plan competitions) fundamentally revolve around this approach – the most important thing becomes the analytical discussion around the business, rather than the core user experience itself. Financial metrics and market sizes become the dominating point of discussion – I would argue also that most venture capitalists fall into this bucket.

The big “religions” in this perspective are frameworks like Built to Last, Crossing the Chasm, Customer Development, Blue Ocean Strategy, even Efficient Market Hypothesis. You might also count Six Sigma, all the stuff in McKinsey quarterlies, etc.

Engineering-focused product perspective: Feasibility
For technology-oriented products, the focus might be on the following:

programming language and development stack
cool technologies or libraries
engineering processes (agile or otherwise)
For people who use this as a first-order filter, you might end up with a line of thinking like, “BitTorrent is really cool, how do we build a business around it?”

I would also put engineering processes like agile into this, because that can easily become a first-order item in how to build a product as well. Agile won’t work for every team, for every product, in every situation, and yet it’s viewed as an all-purpose hammer – does that really make sense?

The big “religions” in this perspective are frameworks are agile, scrum, open source, etc. I might also count the “ecosystems” like Rails as a unique culture with its own set of beliefs and conventions. Frameworks like “Lean Startups” ultimately combine both Business and Engineering goals, via Customer Development plus Agile.

Design-focused product perspective: Desirability
For design-focused products, the focus might be on:

context, culture, and goals
customer goals and product experience
design aesthetics and interactions
The first-order filter in this case might be “Sick people go to hospitals and have a terrible experience – how do we improve that?” The tools employed at this initial stage might include user research, development of personas and user goals, and rapid prototyping to explore many product concepts.

The big “religions” here are led by Apple and their aesthetics and standards. And of course folks like IDEO and their “design thinking” ideas.

How business and engineering goals encroach on the desirability of a product
Reading through the above, perhaps you have identified yourself as prioritizing one versus the other. And in general, the prioritization of the three different goals drives what kinds of product experiences you can build.

From the perspective of making a sexy, highly desirable product, you’ll find lots of objections from business or engineering:

“spending money on visual design is too expensive”
“polishing a product will make the process too slow”
“this product is boring to implement”
“can you redesign this product so we can build it in 1 week sprints?”
“this target user is great, but we want the product to be more powerful and support more audiences”
“but Zynga doesn’t do this, can you just copy them?”
“why build so many prototypes that get thrown away? That’s costly and slow”
“if you added X to this product, it would put us into strategic market Y”
etc.
How do you handle questions like the above?

All of them are great questions, and of course the right answer means you have to find a balance in the approach. But what is the expense towards the core of your product experience?

Back to Steve Jobs – what does he really do?
Long story short, my hypothesis is that Steve Jobs is one of the rare CEOs who is very focused on product desirability. In battles with the business and technology goals, desirability will almost always win out.

So his role isn’t that of a designer, but rather Chief Design Advocate. This means:

he makes it clear that products should be “insanely great”
he recruits a top design team, and protects them from competing goals
he is willing to spend money, adjust technology processes, all for the goal of highly desirable products
he convinces financial analysts, industry pundits, etc. that product design is very important
To me, the amazing part about this is: Any company can do it.

Maybe not as good as Jobs, but they can decide to make it a priority – but few companies do. With the pressure of quarterly earnings, what competitors are doing, and employee aspirational desires, the focus moves off of killer experiences for customers – that’s no good.

If the above is true, then any of us can be the Steve Jobs of our team. Start by prioritizing design and desirability, and place it on a better footing relative to engineering and business goals. Learn the tools, develop your own religion, and start building great product experiences.

It almost sounds so easy!

http://andrewchenblog.com/2009/12/04/does-every-startup-need-a-steve-jobs/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+AndrewChensBlog+(Andrew+Chen+(@andrew_chen))&utm_content=Twitter

Strategic advice for war and statecraft by the Byzantine Empire

I. Avoid war by every possible means, in all possible circumstances, but always act as if war might start at any time. Train intensively and be ready for battle at all times -- but do not be eager to fight. The highest purpose of combat readiness is to reduce the probability of having to fight.

II. Gather intelligence on the enemy and his mentality, and monitor his actions continuously. Efforts to do so by all possible means might not be very productive, but they are seldom wasted.

III. Campaign vigorously, both offensively and defensively, but avoid battles, especially large-scale battles, except in very favorable circumstances. Don't think like the Romans, who viewed persuasion as just an adjunct to force. Instead, employ force in the smallest possible doses to help persuade the persuadable and harm those not yet amenable to persuasion.

IV. Replace the battle of attrition and occupation of countries with maneuver warfare -- lightning strikes and offensive raids to disrupt enemies, followed by rapid withdrawals. The object is not to destroy your enemies, because they can become tomorrow's allies. A multiplicity of enemies can be less of a threat than just one, so long as they can be persuaded to attack one another.

V. Strive to end wars successfully by recruiting allies to change the balance of power. Diplomacy is even more important during war than peace. Reject, as the Byzantines did, the foolish aphorism that when the guns speak, diplomats fall silent. The most useful allies are those nearest to the enemy, for they know how best to fight his forces.

VI. Subversion is the cheapest path to victory. So cheap, in fact, as compared with the costs and risks of battle, that it must always be attempted, even with the most seemingly irreconcilable enemies. Remember: Even religious fanatics can be bribed, as the Byzantines were some of the first to discover, because zealots can be quite creative in inventing religious justifications for betraying their own cause ("since the ultimate victory of Islam is inevitable anyway …").

VII. When diplomacy and subversion are not enough and fighting is unavoidable, use methods and tactics that exploit enemy weaknesses, avoid consuming combat forces, and patiently whittle down the enemy's strength. This might require much time. But there is no urgency because as soon as one enemy is no more, another will surely take his place. All is constantly changing as rulers and nations rise and fall. Only the empire is eternal -- if, that is, it does not exhaust itself.

Via: garry’s subposterous

Turgid Truth

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"The great source of both the misery and disorders of human life, seems to arise from over-rating the difference between one permanent situation and another.... Some of those situations may, no doubt, deserve to be preferred to others: but none of them can deserve to be pursued with that passionate ardour which drives us to violate the rules either of prudence or of justice; or to corrupt the future tranquillity of our minds, either by shame from the remembrance of our own folly, or by remorse from the horror of our own injustice." Adam Smith

from TED video "Dan Gilbert asks, Why are we happy?" [min 19:35]

Economy Internet Trends (2009)

Economy Internet Trends (2009)

The Hawthorne effect

The Hawthorne effect is a form of reactivity whereby subjects improve an aspect of their behavior being experimentally measured simply in response to the fact that they are being studied, not in response to any particular experimental manipulation.
The term was coined in 1955 by Henry A. Landsberger[3] when analyzing older experiments from 1924-1932 at the Hawthorne Works (a Western Electric manufacturing facility outside Chicago). Hawthorne Works had commissioned a study to see if its workers would become more productive in higher or lower levels of light. The workers' productivity seemed to improve when changes were made and slumped when the study was concluded. It was suggested that the productivity gain was due to the motivational effect of the interest being shown in them. Although illumination research of workplace lighting formed the basis of the Hawthorne effect, other changes such as maintaining clean work stations, clearing floors of obstacles, and even relocating workstations resulted in increased productivity for short periods of time. Thus the term is used to identify any type of short-lived increase in productivity.

Via: wikipedia

Everything You Wanted To Know About Startup Building But Were Afraid To Ask

Let’s say you have an idea for a startup. How do you begin the process of finding cofounders and employees, creating a corporation, handing investors, growing the company, etc.? There are lots of details about building a startyp that are usually a mystery to the newly initiated founder. Usually you have to learn this stuff on the job, making mistakes along the way.

Patzer shows how he raised and spent money, and generated revenue, throughout the lifecycle of Mint, from the very beginning to the $170 million acquisition. He also showed historical slides from early presentations to investors and compares those to the actual results.

Mint CEO Aaron Patzer on Startups from Techcrunch on Vimeo.

Via techcrunch