When startup founders hear the word “lean” in reference to business, we usually think “lean startup.” But Eric Ries wasn’t the first person to apply the word “lean” to a business philosophy. Here’s a look at what lean means, how it applies in business versus manufacturing, and a quick explanation of lean startup.
“Lean,” at its essence, is about using fewer resources in order to provide a great product to your customers. A company that’s implementing a lean system is focusing on streamlining its systems in order to reduce waste, ideally to the point of creating no waste at all.
One big advantage of adopting a lean business model the ability to change course quickly when the needs of your customer base change. When...
The most ambitious companies grow their products, not their teams.
Back in 2002, I was invited by (now) Managing Partner Roelof Botha to come pitch the partnership of famed venture firm Sequoia Capital. While I was sitting in their lobby I noticed two things that I'll never forget.
First, like most venture firms, they had a giant list of "tombstones" on their wall, which are the plaques they create after a company goes IPO. The list was already impressive back then which included companies like Yahoo!, Electronic Arts (EA), and Cisco among many others. It was the "who's who" of venture investments globally at the time.
The second was that there were maybe 20-30 people in the entire office — and this was back when everyone was in the office....
“May you live in interesting times.”
— Chinese proverb
This (somewhat liberally translated) Chinese proverb is something you hear often in Silicon Valley these days. Some say it is a curse. Regardless, nobody denies its truth when it comes to the changing technology brings to our world.
Driven by the exponentially accelerating rate of technological progress we now have (literally) supercomputers in our pockets, can access the world’s information at our fingertips, can sequence genes in our kitchen labs, and 3D print prototypes on our desktops. Gordon Moore’s 50-year-old prediction that “the number of transistors in a dense integrated circuit doubles approximately every two years” (know commonly as Moore’s law) holds up to this day and h...
It doesn't matter if we have a "big opportunity" if it never really accomplishes our personal goals.
Yet it's hard to avoid starting a company without thinking in terms of the market potential or the ultimate outcome. If we run around saying that our new startup could one day be a "$1 million business," we're going to get very few high fives. Yet, if we say we're going to be a "$1 billion business," we'll have people lining up to talk to us. Why is that?
The difference in that balance becomes who benefits from that outcome. At $1 million, it's almost entirely the Founders. At $1 billion, it's investors, staff, and everyone else that's joined in the party. What we need to consider is who we're really building this business for and, as such, ...
Our Founder ambition is our greatest source of strength — but can also be our greatest enemy.
While being a startup Founder and having ambition are nearly synonymous, that doesn't mean the very same ambition that drives us to climb mountains can't also push us off a cliff!
I know this because I've lived it many times. I wasn't born the smartest, the most privileged, or the most talented. But I was born with two gifts — ambition and a willingness to work insanely hard. When you're starting from nothing, those gifts mean everything. Yet, what we tend to overlook is that those "gifts" have some major drawbacks that come back to haunt us later on.
Don’t miss out on free credits from Google Cloud for Startups! It’s your chance to leverage power...
Most people think they work hard when, in fact, they hardly work.
If you ask the average person if they work hard, most will tell you, "Yes!" with a combination of pride and resentment. The idea of working hard is generally associated with a measure of self-worth and contribution, so naturally, we'd all like to believe we're part of that.
But what is the cost of "thinking" we work hard while actually being fairly shitty at it? What happens when everyone around us (including us!) genuinely believes they work super hard, even though their actual output and productivity aren't that great?
As startups, we live and die by our productivity and that of our teams, so if we're all operating under the illusion of "working hard" without having any met...
We can quantifiably say that Elon Musk has been the best tech entrepreneur of the modern era. Only one other one — Jim Clark– has built three companies that exited for north of $1 billion, and he needed the dot com bubble to do it. Musk has done it four times, if you count SolarCity, across different industries and in difficult financial times.
And yet, even Musk is still scrapping and fighting for investors’ respect. Witness the current flap about his plan to merge SolarCity with Tesla, which some investors criticize as a scheme for him to bail himself out.
That isn’t how Musk sees it. But he’s used to seeing the world a different way.
Back in 2012, I did an in depth on-stage interview with Musk about the earliest days of his companies,...
Most funded Founders get to a point where their current deal sucks.
It starts when we take (and keep) salaries well below market, then it extends as our position in the cap table gets crushed, and explodes when we're in Year 8 and nothing has improved.
We now run a company that isn't good for us — and probably not good for investors either. So how do we propose a change in our deal when so much time has elapsed?
Whatever we think our new terms should be, whether it's an increase in base salary, a cut of the profits, or an increase in our stock position, what matters is how we propose it. There's a specific path we need to take to insure we stand the best chance of a reset.
When it comes time to ...
Today's investors are like the dinosaurs of old, looking up at the sky and saying, "Hey, look at that bright shiny thing cruising right at us..."
Back then it was a meteor that created an extinction-level event for the T-Rex. Today those dinosaurs and their Patagonia vests are watching AI about to make them extinct. What it means to be a VC investor is about to change forever, not because of anything the VCs have done wrong, but because the need for them is quickly evaporating.
For a very long time, building a startup company was insanely expensive and risky. We had to pay for a ton of people, marketing, and infrastructure in hopes that the upfront investment would be worth it. But what happens when those costs plummet? What happens when we...
"Never tell anyone how much money you have. They will only judge you by it or try to take it from you."
That was some of the best advice I've ever gotten from the son of a well-known billionaire after my first startup just started to take off. At the time, I had just started to make some money, and like any poor kid who just came into some cash, I wanted the whole world to know just how well I had done.
So yeah, I was the douchebag posting pictures of my Lamborghini, only social media didn't exist yet, so I guess I was just emailing them, which is way worse! Little did I know at the time how much trouble my personal PR campaign would create for me.
One of the things I first started noticing was that everyone w...