I'm going to share a story about the forest vs. the trees. But it's not the story you're expecting to hear.
My last blog post was about Doing Less, Better, which is my theme for 2015.
A big part of doing less, better is achieving focus. But that very word is often misunderstood. Focus means the elimination of distractions, not the mitigation of distractions. Let's dig into that more deeply:
The first hard thing in a startup is knowing what to focus on initially. When you first start, you don't have strong product/market fit in anything, so like any good LeanStartup you might start with a hypothesis and work through the build --> measure --> learn cycle as quickly and effectively as you can. The key is to find some early area of traction & demand that you can build off of.
Having a solid initial hypothesis is important, but I would argue that even more important is being close to customers and listening to them intently. You're probably not listening to your customers closely enough, even if you think you are. They will tell you where your hypothesis is wrong. They won't be able to tell you what they do want -- they won't know what they don't know -- but they will absolutely be able to react to what you put in front of them.
So far, so good. But here's what usually happens in startups: You start doing several experiements because you desperately want to find that traction. So instead of just iterating on one thing to make it better, you move on, saying "well that didn't work," except you don't really move on. You keep it around, kind of. Maybe you have a customer or two using it. Or you're generating some revenue from it. Or you've invested so much code, time and cost into it that you can't just bear to completely shut it down. This is where things get dangerous. It's absurdly hard to force yourself to either a) keep iterating on it until it gets better or b) to shut it down completely. In fact, in my experience, this is what separates the massively successful startups from the rest of them. Less successful startups do a lot of mitigation. More successful startups do a lot of elimination.
I've been trying to find a way to explain this simply, and in the shower the other morning, it hit me: Trees.
Let's say you're CEO of a startup that's not yet profitable. Just envision that each initiative in your business is represented by a small, young sapling.
Now here's the kicker: You only have a certain amount of water. That water is your funding. Water is precious and expensive to get. You have to make a choice: Do you concentrate your water on just one of the saplings, or do you water them all equally?
It sounds so obvious, right? You want to grow a tall, strong tree. But it's so very hard to let those other trees die. That's where startups make a false choice: They mitigate by watering the other trees, just enough so they don't die. But not enough for them to grow, either.
And a startup is just like a tree in another way, too: When the tree gets big enough, its root system will be able to capture its own water from the ground. And when a startup matures enough, it too can start to feed itself. It can become profitable. But this only happens when you focus your water on just one tree. If you try to water them all, none of them will reach the stage where their roots can really take hold.
And this is how, ironically, by cutting water off to all your trees but one, your tree will grow big, strong and tall. It will drop acorns around it and spawn other trees. It will create a forest.
But by spreading your water out to many trees, all of them will die, and you will be left with an empty field.
Focus means being ruthless about watering only one tree, so that you can successfully build your forest.
Daniel - just caught you on LinkedIn. Thought I would check out your blog. Much agreed. I know I am guilty of this as well. It is hard to let your "great" ideas die, but at the same time, it's hard to focus on just one and really perfect the initiative. This is something that my team and I have been working hard on this year, and it has paid off so far.
Nice post Daniel! Sorry to piggy back, but it reminded me of a post I did back in 2010 where I tried to make a rule-of-thumb out of the same concept of value dilution, calling it the dreaded "and": http://seanshadmand.com/2010/08/17/and-and-how-it-can-kill-your-business/
Great metaphor, Daniel. I think it applies to many levels of an organization, too, if you substitute "front line leadership's time and attention" for "funding dollars".
Agreed. Since we can't manufacture time, the water is really "time" more than it's "money" per-se. Money is just a proxy for time. But the limits of time apply to everything we do. Or to put it another way, the less (of anything) we do, the better we can do it. That's an unbreakable rule of startup physics.
Your reference to physics as an unbreakable rule(Law) brings me to what my thoughts had arrived at once I finished reading your Allegory. The "App Revolution" speaks to the "Constructal Law of Thermodynamics" as we witness more and more getting easier and easier to do over and over again.The distance between saplings demands modern "App"lication of irrigation technology which is also progressing as Water Resources themselves are becoming finite and measurable. Money and water being no more or less applicable to measuring Flows. Time ,the ultimate Flow, not dependent on Human agreement while money and water are and can be agreed upon. The leveraging of one for the other requires a balance or homeostasis within the Project or the living plant. Knowing what is needed when and where once defined as supporting definians to the Definiendum goes beyond ruthless decision making to simple alignment with reality. Reality does not care what I think in the moment of decision. The decisions can even be assigned to sub APPS that monitor our system for us.
The universal Application of these truths is up to the Entreprenuer/Forestry manager. What ,when and how much are decisions any resource manager must make. Economics is as equally influenced by the Constructal Law of Thermodynamics as molten lava flows are. Learning this the hard way and learning ways that do not work is what "Application Managers" are made of. Letting go of "dreams" we create in the mind is also important to the Dream as it is to the Dreamer. Sharing idea's freely as I have heard you say, Daniel, increases that Dreams' potential beyond the potentially strangling grasp
of the fearful "Parent". There be a Fortune in them Irrigation apps.
AngelList is a platform that connects entrepreneurs to angel investors to raise seed stage capital.
Out of the $1.5 million dollars in angel funding we've raised for Socialize, over $1 million came from introductions made on AngelList. We were very early AngelList users under our AppMakr brand, with Brendan Baker doing a detailed analysis of our use of AngelList in his Anatomy of a Seed project. I also wrote a lengthy manifesto about our fundraising experience, and when AngelList was very new I interviewed Naval Ravikant, one of the AngelList founders.
Recently, using AngelList has changed the way I've been fundraising. Where traditionally, I've had to dedicate a block of time to fundraise full time, I can now fundraise passively, meaning just by focusing on having an optimized AngelList presence and a few specific techniques, I don't have to spend blocks of my time finding high quality angels. That is a game changer for us -- fundraising is an incredibly distracting process, and it's especially hard to innovate and iterate on your startup when you're distracted by bolstering the company's bank account. Being able to have angels come to me has given me a freedom as an entrepreneur that's just fantastic.
As I was talking to my friend Ben Young, CEO of Nexercise, about this sea-change in fundraising, I offered to critique his AngelList page to help him optimize it for this type of inbound passive investment.
As an entrepreneur for the past 12 years, I haven't collected a paycheck from any employer other than a company I own. In theory this sounds great, but there are few things in life that apply more pressure than being responsible for not only your paycheck, but the paychecks of employees. Most of these companies have done well, but some haven't. It's also quite taboo to talk openly about the emotional and mental stress that startups create, but privately almost every CEO I've spent time with has shared similar feelings with me. When Sebastian and I discussed posting on each other's blogs, I figured this was a great opportunity to open up about what it's like to be the CEO of a technology startup along with several previous companies, and specifically to discuss the self discipline that's required to successfully navigate the stresses of startups, because these same lessons apply in anyone's daily life. As you can tell by the title, I liken it to having the self discipline of a Buddhist monk.
But first, some background: When I was 22, I graduated from college with an offer from General Electric to work in their Technical Leadership Program. It was a sweet offer -- a fast-track to management role where a select set of college graduates were rotated through various parts of the company. It gave me the opportunity to work in Latin America. I was sent to GE's Crotonville leadership campus, where I'd see Jack Welch, GE's CEO at the time, fly in and out on his helicopter, and senior GE executives would train us in leadership seminars. It was like being a golden child, a chosen one. We knew that we were being groomed to be the next generation of leaders at GE, and GE did everything it could to foster that confidence in us.
This leadership program was just two years long. It was going very well, but something was nagging at me: Growing up, I had to be very entrepreneurial out of necessity. I had to pay for college myself. I'd always been very independent and self sufficient. Suddenly, I was part of a huge machine. Although I was being treated very well, I felt that I wasn't being true to myself and my entrepreneurial spirit. I knew that I could do more, and that if I didn't quit then, I would get sucked into the trappings of corporate life. So I quit GE six months before I was supposed to graduate from the leadership program. It was 1999 and the tech bubble was going in full swing. I felt that staying even six more months would be too long.
Going from GE's leadership program to a startup company is a bit like going from the comfy cigar chair at country club to washing dishes in the back. It's a jarring experience, but one that I was thirsty for. I soaked it up, and quickly learned my first lesson in startups: If you're not really, really passionate about what you're doing, then don't do it. Although being an entrepreneur is romanticized in popular culture, the road is so long, and the pain is so great, that unless you're really passionate about it, you'll be crushed by the pressure.
Passion for what you're doing in life applies beyond startups. It's easy for any of us to become trapped in the constructs we create. We feel like we have responsibilities to those around us to be risk averse. Maybe you have a mortgage. Or kids in school. Or a spouse depending on your income. But I'm here to tell you that you are not trapped by your environment. You are never a victim of your circumstances, and you have not only a right, but a responsibility to live your life in a way that inspires passion inside of you. Those around you will benefit far more from that passion than from your fear of pursuing it, and they will be inspired themselves to seek out the things that they are passionate about. You only live once. No, seriously, you only live once. If you're not doing something today that you're passionate about, then quit. Take that scary plunge into the unknown. You will be so happy that you did. It won't be easy at first, but it well be better immediately.