A Track Record of Success

Great employees and investments have a track record of success.

To illustrate, my Geekdom Fund partners and I heard a pitch late last year. It was great. Beautiful pitch deck. Eloquent, concise story. Big market. Believable strategy.

Very impressive by all regards. But, something didn’t sit right with us.

All Hat, No Cattle

After it was over I said, “This CEO doesn’t have a track record of success.” There weren’t wins in the recent company trajectory. No customer traction where there should have been — especially giving how much demand he said there was in the marketplace.

When I dug in later, the CEOs career to date had no big wins in it either. So, it was a pass on the team and a pass on the business for that reason.

 

How to Handle a Competitor Going Out of Business

When The Iron Yard came to San Antonio a few years ago, we on the Codeup team had reason to be concerned. I was CEO at the time. Would a competitor with a 30 city presence be trouble for a company focused on one location?

We didn’t know for certain but our response as a company had to be to up our game. How we did that is a topic for another post. But, we recently saw the competitor fold in San Antonio. We’d won.

How do you deal publicly with a direct competitor going out of business? It’s a touchy subject.

In the case of Codeup, our culture is one of positivity. So, gloating ruthless Larry Ellison style isn’t us. We’re also community-focused so while them leaving town is good for us, it’s not great for San Antonio.

The competitor leaving also had the potential for a negative impact on Codeup: If the competitor fails does that mean Codeup is next?

So, a public response has to solve for both of these constraints. We can’t be jerks and do this:

We also need to remind the public that our company is doing well.

I was particularly proud of how our CEO, Kay, responded. Did just what we needed to meet these constraints:

The Stanford Marshmallow Experiment and Startup People

The Stanford Marshmallow Experiment was research into the workings of delayed gratification in people.

The researchers placed a child alone in a room with a single marshmallow. The child was told if they didn’t eat the marshmallow, the child would receive a second one after a period of time.

Watching these kids in this repeat of the experiment is adorable:

Startups and entrepreneurship are an exercise in delayed gratification. You have to take a lower salary and higher risk today in hopes of a big win in the future.

People are either One Marshamallow or Two Marshmallow people. The One Marshmallows usually require a high salary and safety now. They’ll prioritize it and won’t usually sacrifice like a Two Marshmallow person will. A Two Marshmallow will often have saved money over the years by living beneath their means. They’ll have invested in personal development and so on.

Does a candidate for employment or investment have the ability to delay gratification in hopes of a larger reward in the future? My experience is those people that are Two Marshmallow people always perform better in the long-run.

Making Philanthropy Not Suck

A few weeks ago I tweeted how I make giving not suck:

To restate this concept, the idea is to limit any donations of time or money to one cause only. It’s narrowly defined and you maximize your chance to make an impact.

I used to feel guilty when I was asked to donate time or money to a worthy cause. So, I’d write little checks here or there. But, I felt like I was never making a difference.

I asked, “What do I really care about the most?” I realized it was upgrading my hometown into a startup community. I believe that the best way to do accomplish that is to help startups emerge on Houston St downtown.

That’s it. I don’t give to anything else. I just say “no” now to any other cause.

One bonus: this approach makes saying “no” easier as well. I explain people what my approach is and how their cause doesn’t fit.

Turning Freeways Into Parks

For good or bad, San Antonio has a ring of downtown freeways. They certainly make transport easy. But the negative impact on walkability is real. People just don’t walk here.

A few years ago, I posted here about an idea to repurpose the areas underneath our highways as innovative park spaces. Boston did just that with the I-93 freeway.

Given the outdoors here are pretty miserable in San Antonio from May to September due to the strong sun, this seems like a big win for our town if we could make it happen.

We’ve done it before so it’s not unprecedented. Here’s where I-35 crosses the San Antonio River.

Beautiful, right?

Perhaps It’s Time to Found New Cities?

This is an April Fool’s joke where Elon Musk is supposedly wanting to build entire cities. I’m not so sure that’s it such a bad idea:

https://cleantechnica.com/2017/04/01/tesla-plans-build-entire-city-possibly-hundreds-teslacities/

This list says the last major American city is Anchorage, AK founded in 1914:

https://en.wikipedia.org/wiki/List_of_cities_in_the_Americas_by_year_of_foundation

It’s possible we’re out of great places to build cities given most cities exist at geographically strategic locations. There’s only so many of those.

But, as transportation gets more efficient, it’s also possible we could think about starting founding new cities where they have never been before. Could you design a compelling set of amenities compared to existing cities? I don’t know but it’s fun to ponder.

Why Snooze Matters So Much to San Antonio

My Codeup cofounder, Jason Straughan, led a TEDxSanAntonio talk about how the pioneering entrepreneurs in any market are more valuable than regular entrepreneurs. The reason is that pioneers do something new that hasn’t been tried before. If they succeed, others copy them and a vibrant market is created.

Jason is a great guy (check out his company Grok Interactive that does mobile app development here in San Antonio) and did a nice job with the talk:

Snooze Eatery is important to San Antonio because it’s the first sophisticated, premium breakfast eatery in town. Given the lack of great breakfast has been one of my biggest complaints about our town, it’s great. I look forward to the explosion of copycats who will potentially do even better than Snooze at making breakfast fun and tasty.

High Output Management Book Notes

Finished reading High Output Management (again) this weekend. If you haven’t read this book, it’s excellent.
My notes:
  • a manager’s output is the output of his/her team.
  • training is the job of the manager. The training process has side effect of making manager better.
  • spend most of your managerial time with your highest performers.
  • performance reviews should be regular and direct and clear to employees. good idea to write a summary ahead of time and send to employee before discussing in person.
  • dual reporting / matrix management is effective if done correctly. Say reporting to the local plant manager and also reporting to a “council” of technical leaders.
  • meetings should have a clear objective and be comprised of people of varying degrees of authority with one person chairing and making a decision.
  • regular one-on-one meetings should have the employee setting the agenda and sending it ahead of time. an hour is a good duration.
  • maximizing leverage is job #1 of every high-performing employee and manager. How can you make the least productive 30% of your job be automated and/or easier?
  • each employee is at a different level of need in Maslow’s hierarchy of needs. Manage to that.
  • KPIs are genius. What gets measured gets done.

Angel Investing 101

If you’re a newb angel investor, this list covers the basics. Reading from top to bottom is a good strategy with this list.

Here’s an essay from Paul Graham (aka PG) about the basics of angel tech investing:
Here’s a summary of posts from Mark Suster about angel investing:
This is the list of reading items I recommend to entrepreneurs:
This is perhaps the most relevant book for you from that list as a budding investor. Told from the perspective of a founder is Venture Deals.
This is the best book on the VC business itself is Business of Venture Capital.

Founding a Startup 101

Howdy!

If you’re coming to see me to talk about your startup, please consider reading these first.

If you’re not coming to see me, consider this a distilled list of recommended reading before starting a high-growth startup.

Blogs:

Books:

I’ll probably ask you these questions. Or , you can ask them of yourself:

  1. Who is your customer?
  2. How will you make their life better?
  3. How will you make them aware of your product (i.e. “market” to them)?
  4. How will you make money?

(If you do it right, you can likely answer 1-4 in two sentences.)