The stock market clearly values companies that can deliver disruptive innovation.
— Steve Blank
Companies that acquire startups for their intellectual property, teams, or product lines are acquiring startups that are searching for a business model. If they acquire later stage companies who already have users/customers and/or a predictable revenue stream, they are acquiring companies that are executing.
VCs like acquisitions as much as IPOs because the acquiring companies often can rationalize paying large multiples over the current valuation of the startup.
Commencement Day has a sobering finality in that it's the end of the prescribed path.
Most people appear to live an unexamined life, cruising through the years without much reflection about what it means, and/or taking what life hands them and believing it's all predestined.
Watching an entrepreneur fail is sad, but watching him fail from lack of nerve is tragic.
Founding a company is a sheer act of will and tenacity in the face of immense skepticism from everyone - investors, customers, friends, family, and employees, to name a few.
The introduction of new technology is always disruptive to existing markets, particularly to content/copyright owners who sell through well-established distribution channels.
At the end of the day, VCs have to provide their limited partners with great returns, or they aren't going to be able to raise another fund.
The goal of listening to customers is not to please every one of them. It's to figure out which customer segments serve your needs - both short and long term.
The art of entrepreneurship and the science of Customer Development is not just getting out of the building and listening to prospective customers. It's understanding who to listen to and why.
At the intersection of food science and technology, food replacement startups are creating substitutes for the basic components of meals as well as replacements for complete meals.
Visionary CEOs are not 'just' great at assuring world-class execution of a tested and successful business model: they are also world-class innovators.
Measuring how hard your team is working by counting the number of hours they work or what time they get in and leave is how amateurs run companies.
Persuading employees to let go of old values and beliefs and adopt new ones can be challenging.
Startups have finite time and resources to find product/market fit before they run out of money. Therefore startups trade off certainty for speed, adopting 'good enough decision making' and iterating and pivoting as they fail, learn, and discover their business model.
It typically takes multiple iterations and pivots to find product/market fit - the match between what you're building and who will buy it.
It's worth noting that everything - from the Internet to electric cars, genomic sequencing, mobile apps, and social media - were pioneered by startups, not existing companies.
Startups are companies that are still in the process of searching for a business model. Ventures that are further along and executing their business models are no longer startups; they are early-stage companies.
Schools reward their students for a combination of intelligence, perseverance, and hard work - in the classroom and on the playing fields. But these metrics don't help kids understand that great grades are not a pass for a great life.
At some major events - your birth and death, for example - while you may be the center of attention, the events are managed by others and are more important to the people around you.
Out of electronics school, my first assignment was to a fighter base in Florida. My roommate, Glen, would become my best friend in Florida and Thailand as we were sent to different air bases in Southeast Asia.
Great founders live for chaotic moments.
If you've never founded a company, rest assured it never happens as elegantly and smoothly as articles in 'Inc.' and other business magazines or case studies suggest.
The music and movie business has been consistently wrong in its claims that new platforms and channels would be the end of its businesses. In each case, the new technology produced a new market far larger than the impact it had on the existing market.
Understand that VCs are simply a sophisticated form of financial investors who, in turn, need to satisfy their own investors.
Part of Customer Development is understanding which customers make sense for your business.
For busy young adults, the lure of meal substitutes is simple - it's all about convenience - the level of effort to open a bottle or package is minimal, and the time from thinking you're hungry to eating is almost zero.
Visionary CEOs don't need someone else to demo the company's key products for them. They deeply understand products, and they have their own coherent and consistent vision of where the industry/business models and customers are today, and where they need to take the company.
If you think the job of a CEO is to increase sales, then Ballmer did a spectacular job.
You can get a good handle on a company's culture before you even get inside the building. For example, when companies say, 'We value our employees' but have reserved parking spots, a private cafeteria, and over-the-top offices for the executives, that tells you more than any PR spin.
Innovation in an existing company is not just the sum of great technology, key acquisitions, or smart people. Corporate innovation needs a culture that matches and supports it.
In the past, when venture-funded startups told their investors they'd found a profitable business model, the first thing VCs would do is to start looking for an 'operating exec' - usually an MBA who would act as the designated 'adult' and take over the transition from Search to Build.
Companies that get started and built in New York City tend to be applied technology.
The convergence of digital trends, along with the rise of China and globalization, has upended the rules for almost every business in every corner of the globe.
Not all new ventures are at the same stage of maturity.
At the commencements I attended, graduates were classified by their academic rankings. Outstanding academic performance was noted in the programs and awarded with special honors.
As I've gotten older, I've come to grips that the unexamined life is what works for most people. Most take what they learned in school, get a job, marry, buy a house, have a family, become a great parent, serve their god, community and country, hang with friends, and live a good life. And for them that's great.
At 19, I joined the Air Force during the Vietnam War.
Very often, if a founder is waiting around for someone else to tell him what to do, the company is near death.
History has shown that time and market forces provide equilibrium in balancing interests, whether the new technology is a video recorder, a personal computer, an MP3 player, or now the Net.
Great VCs do everything they can to make you successful. But just like your bank, credit card company, mortgage holder, etc. they are not confused where their long-term loyalty lies.
One of the biggest mistakes entrepreneurs make is not understanding the relationship they have with their investors. At times, they confuse VCs with their friends.
Normally when I have students over, we sit in the house and look at the fields to try to catch a glimpse of a bobcat hunting.
The food replacement category is what it sounds like - companies are substituting plants or food grown in a lab to replace meat, fish, eggs, milk - or, like Soylent, to package nutritionally complete meals into a drink.
Visionary CEOs are product- and business-model-centric and extremely customer focused.
Long hours don't necessarily mean success.
All too often, a corporate innovation initiative starts and ends with a board meeting mandate to the CEO followed by a series of memos to the staff, with lots of posters and one-day workshops. This typically creates 'innovation theater' but very little innovation.
In corporations, the penalty for repeated failure on known tasks is being reassigned to other tasks or asked to leave the company.
Unfortunately, as you hire more people, the casual, informal 'do what it takes' culture, which worked so well at less than 40 people, becomes chaotic and less effective.
