source: http://www.channelnewsasia.com/stories/health/view/1027455/1/.html
By Eveline Gan. TODAY | Posted: 29 December 2009 0808 hrs
SINGAPORE : Now that the high from the manic festive shopping has ebbed, you suddenly realised that your bank account has less money than your kid cousin's piggy bank.
Not a big deal, you tell yourself, as you laugh off your wallet-busting sprees.
But in some cases, compulsive spending can be a big deal, said experts TODAY spoke to. Take Geraldine (not her real name), a former shopping addict, for instance.
Her shopping sprees started out quite innocently. Whenever she felt stressed or unhappy, she would engage in "retail therapy". Over time, it spiralled out of control. The 28-year-old eventually maxed out six of her credit cards and racked up a debt of about S$80,000.
Compulsive spenders like Geraldine are not unheard of. Associate Professor Munidasa Winslow, a specialist in psychiatry at Raffles Hospital and whose clinical interest includes addiction problems, sees about one such case each month.
"Oniomania (the technical term for shopping addiction) tends to be compulsive, and there usually is a reason for it," he said.
Most oniomaniacs tend to always have "a larger presenting problem" such as marital issues, said Ms Jane Wong, a counsellor at My Counselling Room. She sees about five cases each year.
Over at Credit Counselling Singapore (CCS), assistant director Tan Huey Min said they are seeing more cases of bad debts as a result of overspending.
Of the 714 cases CSS counselled last year, 61.6 per cent cited overspending - as a result of shopping for branded goods or simply spending more than one can afford to - as one of the main causes of their indebtedness. In 2006, this group made up only 42.2 per cent of the total number of cases counselled.
Ms Tan added that most of them are between the age of 30 and 40, and owe an average of S$80,000 although their monthly take-home pay is only about S$2,500.
Assoc Prof Winslow explained that with this form of compulsive spending, the behaviour "is driven by the need to emotionally numb out unpleasant feelings or forget their problems".
I can't stop myself!
As with any kind of addiction behaviours, the spending binges often start out as "normal activities".
"But when it (shopping and spending) is taken to the extreme and becomes compulsive, and the person cannot stop despite knowing that they should, then it becomes more than a lifestyle. It affects both the person and those around them, just like other forms of addiction, such as gambling," said Assoc Prof Winslow.
While they may enjoy the adrenaline-pumping euphoria with each spending binge, the feeling never lasts long.
Typically, said Ms Wong, a compulsive spender would end up buying items they have no intention to use, and they can't explain why they need them.
"Even if they do explain (why they made the purchase), they may feel embarrassed and give irrational reasons."
At some point in time, the credit cards bills would also "start piling up somewhere in the closet", added Ms Wong.
While most oniomanics Assoc Prof Winslow sees are women, the condition is not unheard of in men.
One of the most serious cases Ms Tan has seen at CCS was a father of three. He was a Singapore permanent resident in his mid-30s and had a monthly take-home income of close to S$6,000.
He chalked up a debt of S$120,000 in a period of three years due to a lavish lifestyle of buying gifts for the family, fine-dining and offering financial help to relatives.
Breaking the cycle of addiction
Assoc Prof Winslow said it is important for spending addicts to break the cycle of addiction with professional help. This would also help identify and nip other accompanying mental problems, such as depression or anxiety, in the bud.
"Once you realise your shopping is going out of control, or you are spending to adjust your moods rather than buying rationally within your means, then it may be time to seek counsel," he said.
It is also important that the family does not bail out the person too quickly - as with gambling problems.
"If there are no consequences, the addiction behaviour repeats itself," said Assoc Prof Winslow.
For Geraldine, the road to recovery has been arduous.
Her psychiatrist has identified that her shopping addiction was her way of coping with stress from her hectic job and relationship problems.
She was given anti-depressants to help cope with the stress and improve her sleep. A credit counsellor also helped work out a financial repayment plan to control her spiralling credit card debt.
Although Geraldine is not yet debt-free, her debts are now manageable. Through the incident, she has also learnt healthier ways to deal with her emotions.
- TODAY
Monday, December 28, 2009
Sunday, December 27, 2009
Why we can never rest: a year in the life of Twitter
Source: http://business.timesonline.co.uk/tol/business/industry_sectors/technology/article6968440.ece
From The Sunday Times
December 27, 2009
ON June 15, our technicians told me to add a note to our website, writes Biz Stone, a co-founder of Twitter.
The note warned users of a planned maintenance session that meant our service would be inaccessible while we carried out an overdue system upgrade.
Immediately, we began to see a reaction in the form of tweets. Then came the emails. Then came the phone calls. Even the US State Department contacted us. The message was loud and clear: Twitter cannot rest while there is unrest in Iran.
However, if this maintenance was not done quickly, our operations team feared that the service might go down for days.
With the whole team on edge, my colleague Jessica Verrilli and I called our head of operations to convince him to do what was deemed extremely difficult if not impossible — reschedule the maintenance.
A few more phone calls and we had a consensus to postpone the work despite the risk. After all, this wouldn’t be the first time we had to ask our engineers to perform the impossible. In the space of a year, user accounts had grown by a factor of 10 while our 45-strong team remained crowded into a loft space in San Francisco’s industrial SoMa district.
The work was moved and the maintenance was eventually successful. In the days that followed, our service became inextricably linked to the Iranian election protests in hundreds of media reports on television, online, and in the newspapers.
Requests to discuss the tumult flooded in from everywhere but we did not engage. We chose instead to issue a simple statement on Twitter’s blog.
While it is our job to keep the service running, it was not the appropriate time or circumstance to put ourselves into the same conversation with people who were risking their lives on the streets of Tehran. The experience remains a humbling one that would define the year for Twitter and also underscore the motivation behind a decade of effort leading up to this point.
My co-founder Evan Williams and I have spent the past 10 years developing large systems that allow people to express themselves and communicate openly. We are united in our belief that software has the ability to augment humanity in productive and meaningful ways.
Although we are already a few years into our latest collaboration, this has been the year the world took note of a simple service that has profound promise. For us, it has been a year during which we realised that no matter how sophisticated the algorithms get, no matter how many machines we add to the network, our work is not about the triumph of technology, it is about the triumph of humanity.
Many people have assumed that Twitter is just another social network, some kind of micro-blogging service, or both. It can be these things but primarily Twitter serves as a real-time information network powered by people around the world discovering what’s happening and sharing the news. The Iranian election was the most discussed issue on Twitter in the final year of a decade defined by advancements in information access.
In the new year, Twitter will begin supporting a billion search queries a day. We will be delivering several billion tweets per hour to users around the world. These are figures we did not anticipate when we founded the company in 2007.
Looking back, the year is a blur, but that one summer morning remains fixed in my memory because it is a powerful reminder of why we find it meaningful to develop technology.
From The Sunday Times
December 27, 2009
ON June 15, our technicians told me to add a note to our website, writes Biz Stone, a co-founder of Twitter.
The note warned users of a planned maintenance session that meant our service would be inaccessible while we carried out an overdue system upgrade.
Immediately, we began to see a reaction in the form of tweets. Then came the emails. Then came the phone calls. Even the US State Department contacted us. The message was loud and clear: Twitter cannot rest while there is unrest in Iran.
However, if this maintenance was not done quickly, our operations team feared that the service might go down for days.
With the whole team on edge, my colleague Jessica Verrilli and I called our head of operations to convince him to do what was deemed extremely difficult if not impossible — reschedule the maintenance.
A few more phone calls and we had a consensus to postpone the work despite the risk. After all, this wouldn’t be the first time we had to ask our engineers to perform the impossible. In the space of a year, user accounts had grown by a factor of 10 while our 45-strong team remained crowded into a loft space in San Francisco’s industrial SoMa district.
The work was moved and the maintenance was eventually successful. In the days that followed, our service became inextricably linked to the Iranian election protests in hundreds of media reports on television, online, and in the newspapers.
Requests to discuss the tumult flooded in from everywhere but we did not engage. We chose instead to issue a simple statement on Twitter’s blog.
While it is our job to keep the service running, it was not the appropriate time or circumstance to put ourselves into the same conversation with people who were risking their lives on the streets of Tehran. The experience remains a humbling one that would define the year for Twitter and also underscore the motivation behind a decade of effort leading up to this point.
My co-founder Evan Williams and I have spent the past 10 years developing large systems that allow people to express themselves and communicate openly. We are united in our belief that software has the ability to augment humanity in productive and meaningful ways.
Although we are already a few years into our latest collaboration, this has been the year the world took note of a simple service that has profound promise. For us, it has been a year during which we realised that no matter how sophisticated the algorithms get, no matter how many machines we add to the network, our work is not about the triumph of technology, it is about the triumph of humanity.
Many people have assumed that Twitter is just another social network, some kind of micro-blogging service, or both. It can be these things but primarily Twitter serves as a real-time information network powered by people around the world discovering what’s happening and sharing the news. The Iranian election was the most discussed issue on Twitter in the final year of a decade defined by advancements in information access.
In the new year, Twitter will begin supporting a billion search queries a day. We will be delivering several billion tweets per hour to users around the world. These are figures we did not anticipate when we founded the company in 2007.
Looking back, the year is a blur, but that one summer morning remains fixed in my memory because it is a powerful reminder of why we find it meaningful to develop technology.
Wednesday, October 7, 2009
Top 10 Flawed HR Assumptions...
source: http://bobsutton.typepad.com/my_weblog/2009/10/bob-suttons-top-10-list--------flawed-suspect-and-incomplete-assumptions--about-managing-people---------1-hr-ought.html
by Bob Sutton
Bob Sutton’s Top 10 List
Flawed, Suspect, and Incomplete Assumptions about Managing People
1. HR ought to be all about spotting, hiring, and breeding individual talent (HR could pack a bigger wallop by focusing on teams and networks more).
2. HR should focus on finding, hiring, and developing the very best people (Bad is stronger than good – about 5 times stronger -- so screening-out, reforming, expelling the very worst people is more crucial to collective performance).
3. Find some great superstars and pay them whatever is necessary to keep them happy… and certainly a lot more than everyone else (The best organizations pay higher than competitors, but have more compressed pay).
4. Competition makes people, teams, and companies stronger (Unless people and teams are rewarded for undermining one another rather than helping each other… dysfunctional internal competition is one of the most pervasive problems in American firms).
5. Harmony and having a shared vision are crucial to success (Perhaps for routine work; but creativity depends on battling over ideas. Part of HR’s job should be to teach people how to “fight as if they are right, and listen as if they are wrong”).
6. The key to success is copying practices used by the best companies. (The best companies may be succeeding despite rather than because of their HR practices).
7. Every company needs a great performance review system. (Are they really worth the time and effort? Do they do more harm than good?).
8. Taking a leadership position brings out the best in people. (This is a dangerous half-truth. Giving people power over others turns them into self-centered jerks).
9. The most important thing HR can do is to find and develop great senior leaders (Having an organization with a high proportion of good bosses is probably more important).
10. The best organizations have the best people, “the people make the place.” (There are huge differences in talent, but the best organizations typically have the best systems and not necessarily the best raw talent).
Robert Sutton, Stanford University (www.bobsutton.net)
Singapore Human Capital Summit
30 September 2009
by Bob Sutton
Bob Sutton’s Top 10 List
Flawed, Suspect, and Incomplete Assumptions about Managing People
1. HR ought to be all about spotting, hiring, and breeding individual talent (HR could pack a bigger wallop by focusing on teams and networks more).
2. HR should focus on finding, hiring, and developing the very best people (Bad is stronger than good – about 5 times stronger -- so screening-out, reforming, expelling the very worst people is more crucial to collective performance).
3. Find some great superstars and pay them whatever is necessary to keep them happy… and certainly a lot more than everyone else (The best organizations pay higher than competitors, but have more compressed pay).
4. Competition makes people, teams, and companies stronger (Unless people and teams are rewarded for undermining one another rather than helping each other… dysfunctional internal competition is one of the most pervasive problems in American firms).
5. Harmony and having a shared vision are crucial to success (Perhaps for routine work; but creativity depends on battling over ideas. Part of HR’s job should be to teach people how to “fight as if they are right, and listen as if they are wrong”).
6. The key to success is copying practices used by the best companies. (The best companies may be succeeding despite rather than because of their HR practices).
7. Every company needs a great performance review system. (Are they really worth the time and effort? Do they do more harm than good?).
8. Taking a leadership position brings out the best in people. (This is a dangerous half-truth. Giving people power over others turns them into self-centered jerks).
9. The most important thing HR can do is to find and develop great senior leaders (Having an organization with a high proportion of good bosses is probably more important).
10. The best organizations have the best people, “the people make the place.” (There are huge differences in talent, but the best organizations typically have the best systems and not necessarily the best raw talent).
Robert Sutton, Stanford University (www.bobsutton.net)
Singapore Human Capital Summit
30 September 2009
Tuesday, October 6, 2009
The Best Business Advice I Ever Got
by Henry Blodget
source: http://www.businessinsider.com/henry-blodget-best-business-advice-ever-2009-9
I've gotten a lot of good business advice over the years, but a simple phrase from my first boss, Jonathan Morgan, takes the cake:
"Make it happen."
Jonathan didn't share this phrase as advice, of course--he shared it as a marching order. But it's still the best business advice I've ever received.
Because "making it happen" is ultimately what success in business is all about.
Successful startups, for example, make something out of nothing--products, productivity, and jobs, where before there was only air.
To do that, they have to overcome obstacles that kill their lesser brethren. They have to fight inertia and fear. They have to press on when it would be easier to give up. They have to figure out how to use limited money, materials, and ideas to solve real problems--and they have to do it better and faster than established competitors.
They have to, in short, make it happen.
And the same can be said for all businesses and businesspeople.
"Make it happen," of course, is mostly a mindset.
It is a mindset that says "I don't know what the future holds and what trouble will come, but I have the resources, creativity, and authority to get the job done.
"I won't get discouraged. I won't listen to the voices--my own included--telling me it can't be done. I won't take no for an answer. Come hell or high water, I'll make it happen."
So, as my old boss Jonathan would say, stop obsessing about the thousand reasons why you and your business probably won't be able to do something or shouldn't be expected to do something or really don't want to do something...
Just make it happen.
source: http://www.businessinsider.com/henry-blodget-best-business-advice-ever-2009-9
I've gotten a lot of good business advice over the years, but a simple phrase from my first boss, Jonathan Morgan, takes the cake:
"Make it happen."
Jonathan didn't share this phrase as advice, of course--he shared it as a marching order. But it's still the best business advice I've ever received.
Because "making it happen" is ultimately what success in business is all about.
Successful startups, for example, make something out of nothing--products, productivity, and jobs, where before there was only air.
To do that, they have to overcome obstacles that kill their lesser brethren. They have to fight inertia and fear. They have to press on when it would be easier to give up. They have to figure out how to use limited money, materials, and ideas to solve real problems--and they have to do it better and faster than established competitors.
They have to, in short, make it happen.
And the same can be said for all businesses and businesspeople.
"Make it happen," of course, is mostly a mindset.
It is a mindset that says "I don't know what the future holds and what trouble will come, but I have the resources, creativity, and authority to get the job done.
"I won't get discouraged. I won't listen to the voices--my own included--telling me it can't be done. I won't take no for an answer. Come hell or high water, I'll make it happen."
So, as my old boss Jonathan would say, stop obsessing about the thousand reasons why you and your business probably won't be able to do something or shouldn't be expected to do something or really don't want to do something...
Just make it happen.
More Money, More Happiness? Not for Your Employees
source: http://www.openforum.com/idea-hub/topics/money/article/more-money-more-happiness-not-for-your-employees-trent-hamm
by Trent Hamm (The Simple Dollar)
Oct 01, 2009 -
Several years ago, I spent the better part of a year involved in a team project that was filled with almost every flavor of poison you can imagine in a workplace. Gossip. Tension. Missed deadlines. Sucking up to supervisors. Secret meetings that only included some of the group.
To put it frankly, every single day in that environment was a nightmare. At the end, I was simply ready to quit - and I blew up. I walked out the door and went home, fully expecting to be fired for it.
Instead, I was given a raise. And it was the last thing on earth I wanted.
I did some soul searching and made myself go back the following Monday. If anything, the environment was worse, full of accusations and bitterness. I had more money, but I was still miserable - and I was still not truly productive.
Luckily, the project’s supervisor caught on and cleaned house, eliminating the poisonous personnel and going a long way to involve the remaining team in ensuring that this never happened again. He also sent me to San Diego for a week that involved almost no work at all - just time to calm down, chill out, and relax.
The first solution - throwing money at the personnel problem - never works. If there’s a conflict between people that’s keeping the work from being completed in a timely fashion, direct financial rewards will, at best, only make a tiny short term difference.
Never solve a people problem by giving a raise. It’s like trying to buy the love of a beautiful woman - you might turn her head, but you’ll never turn her heart.
Instead, start by asking questions - and listening. Spend the time to dig through the conflict and figure out what the source of it is, then address that source directly.
If you’re simply trying to raise general morale and are intending to spend to do it, give time instead of money. Give people some extra time off. Give them more flexibility in their hours - try adding some flexibility to the scheduling.
Beyond that, pair up people that work together well - people feel good when they do a good job. Offer up direct compliments when you witness good work - and occasionally single out people who do exceptional work in an exceptional way.
Your employees are already reasonably pleased with the income they make - if they’re not, they’ll ask for more. If you want to increase morale (and thus increase productivity), look for ways to improve the non-financial aspects of their working situation - their time, the people around them, and their environment. Don’t try to increase morale by throwing money at it - it’s like giving a dozen street-vendor roses to a florist.
by Trent Hamm (The Simple Dollar)
Oct 01, 2009 -
Several years ago, I spent the better part of a year involved in a team project that was filled with almost every flavor of poison you can imagine in a workplace. Gossip. Tension. Missed deadlines. Sucking up to supervisors. Secret meetings that only included some of the group.
To put it frankly, every single day in that environment was a nightmare. At the end, I was simply ready to quit - and I blew up. I walked out the door and went home, fully expecting to be fired for it.
Instead, I was given a raise. And it was the last thing on earth I wanted.
I did some soul searching and made myself go back the following Monday. If anything, the environment was worse, full of accusations and bitterness. I had more money, but I was still miserable - and I was still not truly productive.
Luckily, the project’s supervisor caught on and cleaned house, eliminating the poisonous personnel and going a long way to involve the remaining team in ensuring that this never happened again. He also sent me to San Diego for a week that involved almost no work at all - just time to calm down, chill out, and relax.
The first solution - throwing money at the personnel problem - never works. If there’s a conflict between people that’s keeping the work from being completed in a timely fashion, direct financial rewards will, at best, only make a tiny short term difference.
Never solve a people problem by giving a raise. It’s like trying to buy the love of a beautiful woman - you might turn her head, but you’ll never turn her heart.
Instead, start by asking questions - and listening. Spend the time to dig through the conflict and figure out what the source of it is, then address that source directly.
If you’re simply trying to raise general morale and are intending to spend to do it, give time instead of money. Give people some extra time off. Give them more flexibility in their hours - try adding some flexibility to the scheduling.
Beyond that, pair up people that work together well - people feel good when they do a good job. Offer up direct compliments when you witness good work - and occasionally single out people who do exceptional work in an exceptional way.
Your employees are already reasonably pleased with the income they make - if they’re not, they’ll ask for more. If you want to increase morale (and thus increase productivity), look for ways to improve the non-financial aspects of their working situation - their time, the people around them, and their environment. Don’t try to increase morale by throwing money at it - it’s like giving a dozen street-vendor roses to a florist.
Monday, September 28, 2009
How to Cheer Up.
source: http://www.wikihow.com/Cheer-Up
Isn't it annoying when you're feeling down, and people nonchalantly tell you to cheer up? It's easier said than done. While you can't improve your mood with the snap of your fingers, the following steps might help you climb out of a rut. Try them!
STEPS
1. Make faces.
There's something called the "facial feedback hypothesis"[1] which basically says that whatever face you make will affect how you feel. Usually, it works the other way around: if you're grouchy, you scowl; if you're happy, you smile; if you're surprised or scared, you open your eyes and mouth. But it's a two way street. If you want to feel happy and cheerful, force yourself to smile. Really smile. Hold that expression for 10 seconds. Repeat as needed. It's almost like engaging the "smile muscles" activates the "happy section" of your brain associated with smiling.
- If you're worried about looking silly or crazy, do it privately.
- Doing this while looking in the mirror might be more effective.
2. Sing and dance.
You know how when you stand up straight, you seem to feel a little more confident? Although it hasn't been proven, there might be a "body feedback hypothesis". Take that to the extreme. Hide out in your room, put on a happy song, and dance and sing along like you mean it. If you don't know the words to a song, look up the lyrics and read them as you sing, or make up your own lyrics as you go along (they don't have to make sense!). As far as dancing is concerned, it doesn't really matter what you do, especially since nobody's watching. Do the robot, the chicken dance, the moonwalk, or the macarena. The key with this step is to let loose. The wackier, the better. Even if you feel awful, just pretend you're an obnoxiously happy person and you'll improve your mood by several notches.
- If you dare, record yourself doing this with a video camera and watch it so you can laugh at your crazy silliness.
3. Take a power nap.
Although tiredness or exhaustion might not be what put you in a rut, it can certainly push you further down. Plus, sometimes a nap can function like a "second morning", similar to pushing the reset button on electronics. Once you get up, take a shower or at least wash your face. Do whatever you can to make it feel like a fresh start.
4. Meditate.
It's not about the crossed legs or candles or mantras in this case; it's about becoming aware of your thoughts so that they don't control you. Imagine your thoughts are being displayed on one of those electronic scroll screens. Just watch them go by. Don't judge them, don't tell yourself you shouldn't be thinking this or that, don't get frustrated. Just watch. You'll probably observe the same thoughts repeating themselves, like a broken record. If you meditate in this way long and often enough, you'll notice the repetitive thoughts dropping off on their own, one by one, because you're not acting on them. You're just observing them.
5. Be thankful.
Everyone has something to be grateful for. Make a list of the good things that have happened to you. If nothing instantly springs to mind, you aren't trying hard enough. If all else fails, think of how life could be worse, and flip the thought process to recognize what you do have.
For example: You're flunking out of school. How could it be worse? You could not even have a chance to go to school. You could be at the end, rather than the beginning of the term. Then your thought process can turn into "Well, at least I have a chance to go to school, and I still have time to turn my grades around." Get a notebook and a pen, and write down all the good things that you have. Every time you are feeling negative, read through them and remind yourself that it's not all bad.
6. Cheer someone else up.
There's an idea that floats around many New Age circles that says if you want something, give it (sincerely) to someone else. The basis is that you can't really give what you don't already have, so in giving something, you'll find it in yourself and realize that you had it all along. It's pretty easy to see how this can work on an emotional level. If you can make someone else happy, why can't you make yourself happy? So ask the people around you how they are doing. Listen to them. And try to find a way to make them feel better. You'll draw your attention away from your own negativity and in doing away with theirs, you'll probably get rid of yours too.
7. Forgive.
In addition to being thankful, it is also good practice to forgive those who have hurt you in the past. Sit in a quiet place with your eyes closed and concentrate on the people you want to forgive. Imagine you are sitting in a circle with those who have done you harm. See their faces in your mind, and take turns concentrating on each one of them individually. When you really feel connected to one of them, say out loud, "I forgive you". Ideally this routine is ended by forgiving yourself for things in your life that you regret or cannot control. The purpose of this exercise is to create serenity with feelings of peace and renewal. Note that you don't forgive others for their benefit (or because they deserve it); it's for your benefit, so you can put the past behind you and move on.
8. Accept.
This concept, which is central to eastern philosophies like Buddhism, is based on the idea that the world is perfect just the way it is. There is much around us that isn't perfect.. and that's okay. We can just accept this state of affairs, and decide that we don't need our life to be perfect in order for us to cheer up. This is related to the point Be Grateful, above.
TIPS
- Learning How to Be Optimistic is a good way to ensure cheeriness in the long run.
- Intense exercise can help you wipe your emotional slate clean.
WARNING
- If, while making a list of the good things that have happened to you, nothing springs to mind, see a doctor! This is a possible indication of clinical depression. Clinical depression can be medically treated, but left untreated can result in loss of job, friends or life.
- Beware that whatever you do to cheer up doesn't turn into an escape or addiction.
Isn't it annoying when you're feeling down, and people nonchalantly tell you to cheer up? It's easier said than done. While you can't improve your mood with the snap of your fingers, the following steps might help you climb out of a rut. Try them!
STEPS
1. Make faces.
There's something called the "facial feedback hypothesis"[1] which basically says that whatever face you make will affect how you feel. Usually, it works the other way around: if you're grouchy, you scowl; if you're happy, you smile; if you're surprised or scared, you open your eyes and mouth. But it's a two way street. If you want to feel happy and cheerful, force yourself to smile. Really smile. Hold that expression for 10 seconds. Repeat as needed. It's almost like engaging the "smile muscles" activates the "happy section" of your brain associated with smiling.
- If you're worried about looking silly or crazy, do it privately.
- Doing this while looking in the mirror might be more effective.
2. Sing and dance.
You know how when you stand up straight, you seem to feel a little more confident? Although it hasn't been proven, there might be a "body feedback hypothesis". Take that to the extreme. Hide out in your room, put on a happy song, and dance and sing along like you mean it. If you don't know the words to a song, look up the lyrics and read them as you sing, or make up your own lyrics as you go along (they don't have to make sense!). As far as dancing is concerned, it doesn't really matter what you do, especially since nobody's watching. Do the robot, the chicken dance, the moonwalk, or the macarena. The key with this step is to let loose. The wackier, the better. Even if you feel awful, just pretend you're an obnoxiously happy person and you'll improve your mood by several notches.
- If you dare, record yourself doing this with a video camera and watch it so you can laugh at your crazy silliness.
3. Take a power nap.
Although tiredness or exhaustion might not be what put you in a rut, it can certainly push you further down. Plus, sometimes a nap can function like a "second morning", similar to pushing the reset button on electronics. Once you get up, take a shower or at least wash your face. Do whatever you can to make it feel like a fresh start.
4. Meditate.
It's not about the crossed legs or candles or mantras in this case; it's about becoming aware of your thoughts so that they don't control you. Imagine your thoughts are being displayed on one of those electronic scroll screens. Just watch them go by. Don't judge them, don't tell yourself you shouldn't be thinking this or that, don't get frustrated. Just watch. You'll probably observe the same thoughts repeating themselves, like a broken record. If you meditate in this way long and often enough, you'll notice the repetitive thoughts dropping off on their own, one by one, because you're not acting on them. You're just observing them.
5. Be thankful.
Everyone has something to be grateful for. Make a list of the good things that have happened to you. If nothing instantly springs to mind, you aren't trying hard enough. If all else fails, think of how life could be worse, and flip the thought process to recognize what you do have.
For example: You're flunking out of school. How could it be worse? You could not even have a chance to go to school. You could be at the end, rather than the beginning of the term. Then your thought process can turn into "Well, at least I have a chance to go to school, and I still have time to turn my grades around." Get a notebook and a pen, and write down all the good things that you have. Every time you are feeling negative, read through them and remind yourself that it's not all bad.
6. Cheer someone else up.
There's an idea that floats around many New Age circles that says if you want something, give it (sincerely) to someone else. The basis is that you can't really give what you don't already have, so in giving something, you'll find it in yourself and realize that you had it all along. It's pretty easy to see how this can work on an emotional level. If you can make someone else happy, why can't you make yourself happy? So ask the people around you how they are doing. Listen to them. And try to find a way to make them feel better. You'll draw your attention away from your own negativity and in doing away with theirs, you'll probably get rid of yours too.
7. Forgive.
In addition to being thankful, it is also good practice to forgive those who have hurt you in the past. Sit in a quiet place with your eyes closed and concentrate on the people you want to forgive. Imagine you are sitting in a circle with those who have done you harm. See their faces in your mind, and take turns concentrating on each one of them individually. When you really feel connected to one of them, say out loud, "I forgive you". Ideally this routine is ended by forgiving yourself for things in your life that you regret or cannot control. The purpose of this exercise is to create serenity with feelings of peace and renewal. Note that you don't forgive others for their benefit (or because they deserve it); it's for your benefit, so you can put the past behind you and move on.
8. Accept.
This concept, which is central to eastern philosophies like Buddhism, is based on the idea that the world is perfect just the way it is. There is much around us that isn't perfect.. and that's okay. We can just accept this state of affairs, and decide that we don't need our life to be perfect in order for us to cheer up. This is related to the point Be Grateful, above.
TIPS
- Learning How to Be Optimistic is a good way to ensure cheeriness in the long run.
- Intense exercise can help you wipe your emotional slate clean.
WARNING
- If, while making a list of the good things that have happened to you, nothing springs to mind, see a doctor! This is a possible indication of clinical depression. Clinical depression can be medically treated, but left untreated can result in loss of job, friends or life.
- Beware that whatever you do to cheer up doesn't turn into an escape or addiction.
Persuade people with subconscious techniques
How to Persuade People with Subconscious Techniques
from wikiHow - The How to Manual That You Can EditPersuasiveness is one of the most important skills anyone can learn because it is useful in countless situations. At work, at home, and in your social life, the ability to be persuasive and influence others can be instrumental for achieving goals and being happy.Learning about the tricks of persuasion can also give you insight into when they're being used on you. The biggest benefit of this is that money will stay in your pocket as you realize just how sales people and advertisers sell you products that you don't necessarily need. Here are several techniques that work on a subconscious level.
Steps
- Framing. When someone tells you "Don't think about an elephant" you find it difficult to comply; by just mentioning "elephant", the image pops into your mind, regardless of the context. This is a classic example of framing. [1] Framing is frequently used by skillful politicians. For instance, politicians on both sides of the abortion debate cite their positions as "pro-life or pro-choice" because "pro" has better connotations than "anti." Framing subtly uses emotionally charged words to shift people towards your point of view. To frame a persuasive argument, select words that conjure images (positive, negative or neutral) in the minds of your audience. Even with other words nearby, a single framing word can still be effective. Another example is illustrated by the difference between saying "Having a cell phone will keep me out of trouble" and "Having a cell phone will keep me safe". Ponder which word is more effective for your message: "trouble" or "safe".
- Mirroring. Mirroring is the practice of mimicking the movements and body language of the person you are trying to persuade. By acting as the person listening does, you create a sense of empathy. You can mirror hand gestures, leaning forward or away, or various head and arm movements. We all do this subconsciously, and if you pay attention you'll probably notice yourself doing it. Be subtle about it and delay 2-4 seconds between the other person's movement and your mirroring. Mirroring is also known as "the chameleon effect".[2]
- Scarcity. Scarcity is frequently used by advertisers to make opportunities seem more appealing because they have limited availability. The assumption is that if a product is scarce, there must be a ton of demand for it! (Buy one now because they're selling out fast). Be aware that this is a method of persuasion to which you are frequently exposed and take it into account when you make your purchase decision.
- Reciprocation. When someone does something for us, we feel compelled to return the favor. So, if you want someone to do something nice for you, why not do something nice for them first? In a business setting, maybe you pass them a lead. At home, you might offer to lend your lawnmower to a neighbor. It doesn't matter where or when you do it, the key is to complement the relationship.
- Timing. People are more likely to be agreeable and submissive when they're mentally fatigued. Before you ask someone for something they might not readily agree to, consider waiting until they've just done something mentally taxing. This could be at the end of the work day when you catch a co-worker on their way out the door. Whatever you ask, a likely response is, "I'll take care of it tomorrow."
- Congruence. We all try, subconsciously, to be consistent with previous actions. A technique used by salespeople is to shake your hand as he is negotiating with you. In most people's minds, a handshake equates to a closed deal, and by doing this before the deal actually closed, the salesperson is more likely to actually close it. A good way to use this yourself is to get people acting before they make up their minds. For example, if you were out and about with a friend and you wanted to go see a movie but the friend was undecided, you could start walking in the direction of the theater while they are considering it. Your friend is more likely to agree to go once he or she is walking in the direction you set.
- Fluid speech. When we talk, we often use little interjections and hesitant phrases such as "ummm" or "I mean" and of course there is the ubiquitous "like". These little conversation fillers have the unintended effect of making us seem less confident and sure of ourselves, and thus less persuasive. If you're confident in your speech, others will be more easily persuaded by what you have to say.
- Herd behavior. We constantly look to those around us to determine our actions; we have the need for acceptance. We are far more likely to follow or be persuaded by someone we like or by someone who we see as an authority. An effective way to use this to your advantage is to be seen as a leader -- even if you don't have the official title. Be charming and confident and people will place greater weight on your opinion. If you're dealing with someone who isn't likely to see you as an authority (such as a superior in the workplace, or your significant other's parent) you can still take advantage of herd behavior. Casually praise a leader who that person admires. By triggering positive thoughts in that person's mind about a person they look up to, they'll be more likely to associate those qualities with you.
- Man's best friend. To give people the impression that you're loyal, and to inspire them to be loyal to you, put up a picture of you with a dog (it doesn't even have to be your own dog). This can make you seem like a team player, but don't go overboard; putting up too many pictures can make you seem unprofessional.[3]
- Offer a drink. Give the person who you're persuading a warm drink (tea, coffee, hot cocoa) to hold while you're talking to them. The warm sensation of the drink in their hands (and their body) can subconsciously make them feel like you're an emotionally warm, likable and welcoming person. Giving them a cold drink can have the opposite effect! In general, people tend to feel cold and crave warm food or drinks when they're feeling socially isolated, so fill that need in order to make them more receptive.[4]
- Break the touch barrier. Whether you're closing a deal or asking someone on a date, touching them (in a subtle and appropriate way) can improve your chances by subconsciously activating the human desire to bond. In a professional it is usually best to 'touch" someone verbally by offering reassurance or praise as a physical touch can be interpreted as sexual harassment. In romantic situations, any soft touch from a woman will usually be taken well; men will require further reading in order to avoid making a woman feel uncomfortable.[3]
Video
Tips
- There are several things you can do to make yourself seem more dominant, like wearing an all-black outfit--as some judges, police and clergy do--or maintaining a neutral face, but there are times when being dominant (or neutral) isn't necessarily more persuasive. If you're a salesperson, you might prefer to relate to the client, rather than intimidate--but if you're a supervisor, giving people a more dominant impression might mean getting your way more often.
- Use the same techniques you fear--from an organ donor--on the sales person to turn the table and intimidate him/her. For example when you are out to buy a car: lead the conversation. Ask questions that you know the answer to, like "So car sales are down, huh?" and "Man, I bet you guys need to move these 08's with the 09's already on the floor." This will encourage the sales person to work harder to close the sale. Remind them that their income is not what it once was, without coming out and saying so.
Warnings
- Don't persuade anyone to do something that isn't conducive to their well-being.
- Be careful using persuasive techniques in friendships. Sometimes a decision needs to be made, and it is OK to convince others to 'buy in'. However, if you do this too often, people may interpret this as you being controlling, or manipulative, both of which can lead to undesirable outcomes.
- As soon as someone realises they are being manipulated, they will feel extremely uncomfortable around you. Think how much you hate "hard-sell" from sales staff, or a passive-aggressive family member.
Related wikiHows
- How to Be Persuasive
- How to Spin Bad News
- How to Upsell
- How to Resist a Sales Pitch
- How to Negotiate
- How to Persuade a Christian to Become Atheist
- How to Persuade an Atheist to Become Christian
- How to Convince Someone to Vote
Sources and Citations
- DumbLittleMan.com - Original source, shared with permission.
- ↑ http://en.wikipedia.org/wiki/Framing_(social_sciences)
- ↑ http://instruct1.cit.cornell.edu/courses/phi663/Bargh%20-%20Chameleon%20Affect.pdf (PDF)
- ↑ 3.0 3.1 MSNBC.com - 9 mind tricks to get what you want
- ↑ http://www.rotman.utoronto.ca/geoffrey.leonardelli/inpressPS.pdf (PDF)
Article provided by wikiHow, a wiki how-to manual. Please edit this article and find author credits at the original wikiHow article on How to Persuade People with Subconscious Techniques. All content on wikiHow can be shared under a Creative Commons license.
Sunday, September 27, 2009
Courier: First Details of Microsoft's Secret Tablet
source: http://gizmodo.com/5365299/courier-first-details-of-microsofts-secret-tablet
By The Paperboy, 7:30 PM on Tue Sep 22 2009, 622,639 views
It feels like the whole world is holding its breath for the Apple tablet. But maybe we've all been dreaming about the wrong device. This is Courier, Microsoft's astonishing take on the tablet.
Courier is a real device, and we've heard that it's in the "late prototype" stage of development. It's not a tablet, it's a booklet. The dual 7-inch (or so) screens are multitouch, and designed for writing, flicking and drawing with a stylus, in addition to fingers. They're connected by a hinge that holds a single iPhone-esque home button. Statuses, like wireless signal and battery life, are displayed along the rim of one of the screens. On the back cover is a camera, and it might charge through an inductive pad, like the Palm Touchstone charging dock for Pre.
Until recently, it was a skunkworks project deep inside Microsoft, only known to the few engineers and executives working on it—Microsoft's brightest, like Entertainment & Devices tech chief and user-experience wizard J. Allard, who's spearheading the project. Currently, Courier appears to be at a stage where Microsoft is developing the user experience and showing design concepts to outside agencies.
Microsoft has a history of collaborating with other firms, especially in the E&D division: Zune and Xbox have both gone through similar design processes. (And plans for the Microsoft Store leaked through a third-party agency were confirmed as genuine prototype layouts and concepts.) This video is branded Pioneer Studios, a Microsoft division within E&D that specializes in this kind of work, working with another agency that's a long-time Microsoft collaborator on confidential projects.
The Courier user experience presented here is almost the exact opposite of what everyone expects the Apple tablet to be, a kung fu eagle claw to Apple's tiger style. It's complex: Two screens, a mashup of a pen-dominated interface with several types of multitouch finger gestures, and multiple graphically complex themes, modes and applications. (Our favorite UI bit? The hinge doubles as a "pocket" to hold items you want move from one page to another.) Microsoft's tablet heritage is digital ink-oriented, and this interface, while unlike anything we've seen before, clearly draws from that, its work with the Surface touch computer and even the Zune HD.
Over the next couple days we'll be diving much, much deeper into Courier, so stay tuned.
By The Paperboy, 7:30 PM on Tue Sep 22 2009, 622,639 views
It feels like the whole world is holding its breath for the Apple tablet. But maybe we've all been dreaming about the wrong device. This is Courier, Microsoft's astonishing take on the tablet.
Courier is a real device, and we've heard that it's in the "late prototype" stage of development. It's not a tablet, it's a booklet. The dual 7-inch (or so) screens are multitouch, and designed for writing, flicking and drawing with a stylus, in addition to fingers. They're connected by a hinge that holds a single iPhone-esque home button. Statuses, like wireless signal and battery life, are displayed along the rim of one of the screens. On the back cover is a camera, and it might charge through an inductive pad, like the Palm Touchstone charging dock for Pre.
Until recently, it was a skunkworks project deep inside Microsoft, only known to the few engineers and executives working on it—Microsoft's brightest, like Entertainment & Devices tech chief and user-experience wizard J. Allard, who's spearheading the project. Currently, Courier appears to be at a stage where Microsoft is developing the user experience and showing design concepts to outside agencies.
Microsoft has a history of collaborating with other firms, especially in the E&D division: Zune and Xbox have both gone through similar design processes. (And plans for the Microsoft Store leaked through a third-party agency were confirmed as genuine prototype layouts and concepts.) This video is branded Pioneer Studios, a Microsoft division within E&D that specializes in this kind of work, working with another agency that's a long-time Microsoft collaborator on confidential projects.
The Courier user experience presented here is almost the exact opposite of what everyone expects the Apple tablet to be, a kung fu eagle claw to Apple's tiger style. It's complex: Two screens, a mashup of a pen-dominated interface with several types of multitouch finger gestures, and multiple graphically complex themes, modes and applications. (Our favorite UI bit? The hinge doubles as a "pocket" to hold items you want move from one page to another.) Microsoft's tablet heritage is digital ink-oriented, and this interface, while unlike anything we've seen before, clearly draws from that, its work with the Surface touch computer and even the Zune HD.
Over the next couple days we'll be diving much, much deeper into Courier, so stay tuned.
How to organise an event (Univ. of S.Australia ver.)
source: http://www.unisa.edu.au/mdu/events/howto.asp
This document will assist you with event planning. As each event has its own set of unique details to attend to, this document will not apply directly to every event, but it will assist you in developing a plan that takes into account the essential elements for a successful event.
UniSA's network of campuses provide exciting venues for events, whether it be a workshop for five people or an international conference for 2000 people.
Events are a major marketing tool for the University and those who attend UniSA events should be aware that the University's mission of Educating Professionals, Applying and Creating Knowledge and Engaging our Communities is paramount to our business.
Events are an opportunity to showcase the facilities, teaching, research and staff of the UniSA to people who do not normally visit the University. To those who are regular visitors it is a reminder of the reasons they choose to be partners with UniSA.
The guidelines below can apply to any of the following events:
IMPORTANT: Have a contingency plan in case a speaker does not show, or a venue becomes too small, etc. The Organising Committee should make the decision to use this plan if and when needed.
What? Why? When? Where? How?
These questions become part of your feasibility plan, and will assist you to decide whether to proceed with the event. Remember it is always better to pull out of an event than to host a failure.
Select an organising committee
The chair or coordinator is critical for the event. They will have to make all the final decisions and solve any conflict. You might also consider hiring a professional conference organiser (whose fee should be incorporated into your budget).
Ensure that the committee members have the necessary skills and knowledge or that there is sufficient time for them to be trained to fulfil their tasks for the event. Areas to be covered might include sponsorship, program design, or meet-and-greet. Each committee member should be given specific tasks to perform and where possible a job specification so that they are aware of their responsibilities and will feel comfortable with the tasks required of them. It is also a good check mechanism for reporting purposes.
Staff in the Marketing and Development Unit are available to assist you with your event and to act as a resource to you and your planning committee. The committee may also wish to consult outside organisations such as the Adelaide Convention and Tourism Authority who will be able to provide specific information, seeding finance and other promotional materials.
Planning
This is the most important part of the event. It does not matter if you have two years or only a few weeks to organise the event - the planning will ensure that all avenues are covered.
When you begin planning, use project planning principles to become aware of all the things that need to be put into place to make it a success. Your event management plan should take into account all facets of the event such as budget, speakers, travel, accommodation and AV equipment.
Making it happen
It is important that those who are on the organising committee take responsibility for their allocated areas. Regular meetings and communication between members and the coordinator/chair are essential at this point. It is during these meetings that the little things that make an ordinary event into a great event come to fruition.
An essential item in your plan is the budget. Even though you may not have full details of funds available, it is essential to estimate the total cost. From this budget plan you can then see if the event is viable and which areas can be trimmed.
A major item to be budgeted for is staff time. Often this is a missed item as often University staff time is given as in-kind. However, if you are budgeting for an outside event, remember to include this cost with appropriate oncosts.
Date and time
Finding a date and time that is suitable for your event is always a difficulty. What may be great for you and the organising committee may clash with other major events at the University. Try to find out as much as you can about what is happening in the University and then plan your event accordingly.
If Senior Management are to be involved, avoid clashing with Council Meetings, Academic Board or School Board as this will mean the majority of senior staff will be unavailable to attend the event.
If appropriate, identify key personnel from the University for your event. It may be the Senior Management Group, Divisional Pro Vice Chancellors or others. Once you have decided on a date for your event and the University staff are pivotal to your event, make sure these people are notified, so that they can pencil it in their diaries. (If it is not a suitable date for these people then alternative dates may have to come into play.)
If a member of the Senior Management Group is to be one of the prime people in the event then it is necessary to brief them on their role and what needs to be executed by them. If the Vice Chancellor is a speaker at the event, you will need to provide briefing notes for her (As a courtesy the Chancellor and Vice Chancellor should receive invitations to major events at the University).
The venue
Once you have chosen a date you will need to book the venue. Most room bookings can be made through FM Assist at each of the campuses. Remember to ensure your venue is accessible for people with a disability and that wheelchair access is well signposted.
Should it be necessary to book an interpreter for the hearing-impaired, contact the Royal South Australian Deaf Society.
It may also be necessary for extra equipment to be ordered from outside the University (eg sound and AV). The University mostly uses Novatech Production Services.
Program/invitations
If you need to call for papers this should be done very early in the planning stages. Abstracts and a preliminary program should be developed well ahead of conferences. As the abstracts start to arrive the program can be modified to fit the papers. If you are accepting papers and registrations via the internet, meet with the IT people and formulate how this will happen.
If you are having programs or invitations designed, meet with the designer. At the same time information from speakers, sponsors, etc should be sought. Included in the program should be information concerning any costs to the delegates/guests, accommodation requirements/catering/transport/etc. This process may take some time as you proofread the information and develop the final product. So give yourself ample time to do this properly and avoid making mistakes with dates, times and venues.
At the same time put in place procedures for the collection of money. Finance officers will be able to assist with this.
Mailing list
Develop a mailing list. This will be an ongoing function. It will include internal as well as external people including the media and guest speakers. This database will then provide you with a comprehensive mailing list for other events. Make sure that this list is up-to-date before using it for your mailout. Make arrangements to have your database updated if you should receive returned mail.
Invitations
Formal invitations should be sent to the guest speakers, VIPs and Senior Management as soon as possible. These do not necessarily have to be the same as the general invitations and can be sent on UniSA letterhead. Once confirmation of your speakers has been received you can proceed to further develop your program.
You may also want to develop a webpage which includes a call for papers, invitation, program and registration. This should be discussed with the appropriate Divisional IT person.
If the Governor is to be a special guest, Government House will forward you a briefing paper that needs to be completed and returned prior to the event.
Invitations should also be sent to journalists in the print and television media. If you need assistance in this area, contact News Manager, Michele Nardelli.
Templates for invitations are available in A4 and DL format (staff access only).
RSVPs
Make sure that the RSVPs are being given to a person that is available most of the time prior to the event. It is essential that this person is fully conversant with the event and the location so that they can answer questions such as parking, access, etc.
Once the RSVPs have been received you can then start to finalise the arrangements. It is at this stage that you can make decisions on whether it is viable to go ahead with the function. Remember that it is always better to pull out of an event rather than go ahead and risk it being unsuccessful.
Media
Start organising publicity surrounding your event as soon as possible. Develop a media plan in consultation with Michele Nardelli. This should be done as soon as possible after you have decided on a date and venue.
At least one month's notice of events for publication in UniSANews is required. However, the earlier you are, the better as you may be able to promote it more than once. For a fee, flyers can be sent out as an insert in UniSANews.
If you require a photographer for your event, the Marketing and Development Unit will be able to advise. Contact Michele Nardelli.
It may be suitable to advertise your event on the University's homepage - contact Siang Tay for details. Advertising your event to all UniSA staff should be done through the Announcements in the Staff portal. Fill in an online form request to request your event be added to Announcements (staff access only)
Consider also other forms of advertising eg through newspapers. For assistance and details on costs, etc, contact Manager: Campaigns, Alison Leese.
Printing
Get quotes for your printing at the same time as you are designing the invitations and programs. This will give you a better idea of what is available to meet your budget.
Print your invitations/programs as soon as practical. There is a need to proofread these, so leave yourself sufficient time to make changes.
Mail general invitations approximately four weeks prior to an event.
Conferences will need to develop a timetable for their mailouts. Call for papers can be anything up from two years to six months prior to an event. Requests for Registration are usually sent at different times. If you are planning to have online registrations you will need to discuss with ISTS staff and have this set up prior to printing your program.
Ancillary items
Arrange any other ancillary items for the venue, such as sound, AV equipment, decorations, entertainment.
Here are a few suggestions:
Travel
If travel is required for the VIP guests, arrange this through the University's preferred airline and travel agents. Provide the suggested itinerary to the guests for their final approval. Book their travel and/or accommodation as the case may be. Payment can be made via an invoice from the accommodation booked or a University Visa card can be used. If the Visa Card is used make sure that you fill in an FS83 form (staff access only) authorising the use of your Visa card and keep a copy for reconciliation purposes.
Catering
Arrange a quote for the event. The cost of catering should be incorporated into the price you charge for the event. If it fits into your allowed budget make the final decisions and book the catering. Make sure caterers are given a site inspection. Catering can be provided by on-campus providers (eg the campus cafeteria) or outside caterers can be engaged.
A menu and run sheet template is available (staff access only).
Compere
Arrange a compere for the event - someone who will welcome guests, give a brief summary on the purpose of the event, introduce and thank the guest speakers.
Greeting VIPs
If the VIPs are non-University staff ensure that a suitable representative of the University is there to greet them on arrival. There are specific requirements if the Governor or Premier are to be present. These can be obtained from the Functions Officer Government House or the Premier's appointment secretary.
Volunteers
Recruit volunteers to assist with mail-outs, setting up, on the day, etc. Make sure that the volunteers are given training.
Running sheet
A running sheet for your event should be developed. This needs to take in every aspect of the day, including such things as: when are cleaners arriving, when does the AV equipment get installed, sound testing, who is meeting and greeting. This sheet needs to be given to all those involved on the day. It is also a good idea to have a briefing session for all those people who are volunteering their time to assist on the day.
Security
University Security (through Ian Bastable) must be informed of all events. Security officers are invaluable when using the University premises and may be particularly helpful if your event surrounds a contentious issue, or is to be attended by any high profile individual(s).
If a speaker is a Member of Parliament and you are dealing with the Premier's Department or other government departments, contact the person's appointment secretary for details on security requirements (if any).
If necessary Ian Bastable can contact SAPOL to ensure the safety of guests and visitors.
Signage and directions
Make sure that adequate signage (arrows, pointing hands etc) are posted at all entrances, directing people to the venue. Wheelchair accessibility should be clearly marked. Toilets also need to be signposted.
Signage templates are available in A3 and A4 format (staff access only).
Recording
Should you wish to record the event (either tape or video) or have photographs taken, contact the Flexible Learning Centre or the Marketing and Development Unit for advice.
Gifts
If guest speakers are not being paid, it may be appropriate to present them with a gift. University items can be purchased through the merchandise catalogue (staff access only). The Jam Factory also offers a discount to University staff.
Recognition of Indigenous landowners
It may be appropriate to have a representative of the Indigenous landowners, the Kaurna people, to open your event. Having a representative of the Kaurna people welcome your audience onto their land provides a respectful recognition that the venue and, more broadly, our community is built on the land of the Kaurna people. Visit the Unaipon School for contacts and enquiries.
Name tags
You may wish to print name tags with the event title. These are available from Document Services.
Name tag templates are available in blue on white and white on blue format (staff access only).
This document will assist you with event planning. As each event has its own set of unique details to attend to, this document will not apply directly to every event, but it will assist you in developing a plan that takes into account the essential elements for a successful event.
UniSA's network of campuses provide exciting venues for events, whether it be a workshop for five people or an international conference for 2000 people.
Events are a major marketing tool for the University and those who attend UniSA events should be aware that the University's mission of Educating Professionals, Applying and Creating Knowledge and Engaging our Communities is paramount to our business.
Events are an opportunity to showcase the facilities, teaching, research and staff of the UniSA to people who do not normally visit the University. To those who are regular visitors it is a reminder of the reasons they choose to be partners with UniSA.
The guidelines below can apply to any of the following events:
- International conference
- National conference
- Seminar/workshop
- Public lecture
- Launch/announcement of research or new program.
IMPORTANT: Have a contingency plan in case a speaker does not show, or a venue becomes too small, etc. The Organising Committee should make the decision to use this plan if and when needed.
What? Why? When? Where? How?
These questions become part of your feasibility plan, and will assist you to decide whether to proceed with the event. Remember it is always better to pull out of an event than to host a failure.
Select an organising committee
The chair or coordinator is critical for the event. They will have to make all the final decisions and solve any conflict. You might also consider hiring a professional conference organiser (whose fee should be incorporated into your budget).
Ensure that the committee members have the necessary skills and knowledge or that there is sufficient time for them to be trained to fulfil their tasks for the event. Areas to be covered might include sponsorship, program design, or meet-and-greet. Each committee member should be given specific tasks to perform and where possible a job specification so that they are aware of their responsibilities and will feel comfortable with the tasks required of them. It is also a good check mechanism for reporting purposes.
Staff in the Marketing and Development Unit are available to assist you with your event and to act as a resource to you and your planning committee. The committee may also wish to consult outside organisations such as the Adelaide Convention and Tourism Authority who will be able to provide specific information, seeding finance and other promotional materials.
Planning
This is the most important part of the event. It does not matter if you have two years or only a few weeks to organise the event - the planning will ensure that all avenues are covered.
When you begin planning, use project planning principles to become aware of all the things that need to be put into place to make it a success. Your event management plan should take into account all facets of the event such as budget, speakers, travel, accommodation and AV equipment.
Making it happen
It is important that those who are on the organising committee take responsibility for their allocated areas. Regular meetings and communication between members and the coordinator/chair are essential at this point. It is during these meetings that the little things that make an ordinary event into a great event come to fruition.
An essential item in your plan is the budget. Even though you may not have full details of funds available, it is essential to estimate the total cost. From this budget plan you can then see if the event is viable and which areas can be trimmed.
A major item to be budgeted for is staff time. Often this is a missed item as often University staff time is given as in-kind. However, if you are budgeting for an outside event, remember to include this cost with appropriate oncosts.
Date and time
Finding a date and time that is suitable for your event is always a difficulty. What may be great for you and the organising committee may clash with other major events at the University. Try to find out as much as you can about what is happening in the University and then plan your event accordingly.
If Senior Management are to be involved, avoid clashing with Council Meetings, Academic Board or School Board as this will mean the majority of senior staff will be unavailable to attend the event.
If appropriate, identify key personnel from the University for your event. It may be the Senior Management Group, Divisional Pro Vice Chancellors or others. Once you have decided on a date for your event and the University staff are pivotal to your event, make sure these people are notified, so that they can pencil it in their diaries. (If it is not a suitable date for these people then alternative dates may have to come into play.)
If a member of the Senior Management Group is to be one of the prime people in the event then it is necessary to brief them on their role and what needs to be executed by them. If the Vice Chancellor is a speaker at the event, you will need to provide briefing notes for her (As a courtesy the Chancellor and Vice Chancellor should receive invitations to major events at the University).
The venue
Once you have chosen a date you will need to book the venue. Most room bookings can be made through FM Assist at each of the campuses. Remember to ensure your venue is accessible for people with a disability and that wheelchair access is well signposted.
Should it be necessary to book an interpreter for the hearing-impaired, contact the Royal South Australian Deaf Society.
It may also be necessary for extra equipment to be ordered from outside the University (eg sound and AV). The University mostly uses Novatech Production Services.
Program/invitations
If you need to call for papers this should be done very early in the planning stages. Abstracts and a preliminary program should be developed well ahead of conferences. As the abstracts start to arrive the program can be modified to fit the papers. If you are accepting papers and registrations via the internet, meet with the IT people and formulate how this will happen.
If you are having programs or invitations designed, meet with the designer. At the same time information from speakers, sponsors, etc should be sought. Included in the program should be information concerning any costs to the delegates/guests, accommodation requirements/catering/transport/etc. This process may take some time as you proofread the information and develop the final product. So give yourself ample time to do this properly and avoid making mistakes with dates, times and venues.
At the same time put in place procedures for the collection of money. Finance officers will be able to assist with this.
Mailing list
Develop a mailing list. This will be an ongoing function. It will include internal as well as external people including the media and guest speakers. This database will then provide you with a comprehensive mailing list for other events. Make sure that this list is up-to-date before using it for your mailout. Make arrangements to have your database updated if you should receive returned mail.
Invitations
Formal invitations should be sent to the guest speakers, VIPs and Senior Management as soon as possible. These do not necessarily have to be the same as the general invitations and can be sent on UniSA letterhead. Once confirmation of your speakers has been received you can proceed to further develop your program.
You may also want to develop a webpage which includes a call for papers, invitation, program and registration. This should be discussed with the appropriate Divisional IT person.
If the Governor is to be a special guest, Government House will forward you a briefing paper that needs to be completed and returned prior to the event.
Invitations should also be sent to journalists in the print and television media. If you need assistance in this area, contact News Manager, Michele Nardelli.
Templates for invitations are available in A4 and DL format (staff access only).
RSVPs
Make sure that the RSVPs are being given to a person that is available most of the time prior to the event. It is essential that this person is fully conversant with the event and the location so that they can answer questions such as parking, access, etc.
Once the RSVPs have been received you can then start to finalise the arrangements. It is at this stage that you can make decisions on whether it is viable to go ahead with the function. Remember that it is always better to pull out of an event rather than go ahead and risk it being unsuccessful.
Media
Start organising publicity surrounding your event as soon as possible. Develop a media plan in consultation with Michele Nardelli. This should be done as soon as possible after you have decided on a date and venue.
At least one month's notice of events for publication in UniSANews is required. However, the earlier you are, the better as you may be able to promote it more than once. For a fee, flyers can be sent out as an insert in UniSANews.
If you require a photographer for your event, the Marketing and Development Unit will be able to advise. Contact Michele Nardelli.
It may be suitable to advertise your event on the University's homepage - contact Siang Tay for details. Advertising your event to all UniSA staff should be done through the Announcements in the Staff portal. Fill in an online form request to request your event be added to Announcements (staff access only)
Consider also other forms of advertising eg through newspapers. For assistance and details on costs, etc, contact Manager: Campaigns, Alison Leese.
Printing
Get quotes for your printing at the same time as you are designing the invitations and programs. This will give you a better idea of what is available to meet your budget.
Print your invitations/programs as soon as practical. There is a need to proofread these, so leave yourself sufficient time to make changes.
Mail general invitations approximately four weeks prior to an event.
Conferences will need to develop a timetable for their mailouts. Call for papers can be anything up from two years to six months prior to an event. Requests for Registration are usually sent at different times. If you are planning to have online registrations you will need to discuss with ISTS staff and have this set up prior to printing your program.
Ancillary items
Arrange any other ancillary items for the venue, such as sound, AV equipment, decorations, entertainment.
Here are a few suggestions:
- Do I require a microphone? (if the audience is to ask questions, you may need at least one roving microphone, depending on your venue)
- Will I need a lectern?
- Are tables and chairs needed?
- How would I like the room to be set up, eg lecture style, semi-formal? Campus Services can provide assistance with setting up the room to meet your requirements. Send through a Customer Service Request (CSR)
- Do I require water for the speakers?
- Do I need whiteboard markers and whiteboard dusters?
- Do I need University banners?
- Do I need sponsor's signage?
- Do I have a spare bulb for the overhead projector? Do I know how to change the blown bulb?
Travel
If travel is required for the VIP guests, arrange this through the University's preferred airline and travel agents. Provide the suggested itinerary to the guests for their final approval. Book their travel and/or accommodation as the case may be. Payment can be made via an invoice from the accommodation booked or a University Visa card can be used. If the Visa Card is used make sure that you fill in an FS83 form (staff access only) authorising the use of your Visa card and keep a copy for reconciliation purposes.
Catering
Arrange a quote for the event. The cost of catering should be incorporated into the price you charge for the event. If it fits into your allowed budget make the final decisions and book the catering. Make sure caterers are given a site inspection. Catering can be provided by on-campus providers (eg the campus cafeteria) or outside caterers can be engaged.
A menu and run sheet template is available (staff access only).
Compere
Arrange a compere for the event - someone who will welcome guests, give a brief summary on the purpose of the event, introduce and thank the guest speakers.
Greeting VIPs
If the VIPs are non-University staff ensure that a suitable representative of the University is there to greet them on arrival. There are specific requirements if the Governor or Premier are to be present. These can be obtained from the Functions Officer Government House or the Premier's appointment secretary.
Volunteers
Recruit volunteers to assist with mail-outs, setting up, on the day, etc. Make sure that the volunteers are given training.
Running sheet
A running sheet for your event should be developed. This needs to take in every aspect of the day, including such things as: when are cleaners arriving, when does the AV equipment get installed, sound testing, who is meeting and greeting. This sheet needs to be given to all those involved on the day. It is also a good idea to have a briefing session for all those people who are volunteering their time to assist on the day.
Security
University Security (through Ian Bastable) must be informed of all events. Security officers are invaluable when using the University premises and may be particularly helpful if your event surrounds a contentious issue, or is to be attended by any high profile individual(s).
If a speaker is a Member of Parliament and you are dealing with the Premier's Department or other government departments, contact the person's appointment secretary for details on security requirements (if any).
If necessary Ian Bastable can contact SAPOL to ensure the safety of guests and visitors.
Signage and directions
Make sure that adequate signage (arrows, pointing hands etc) are posted at all entrances, directing people to the venue. Wheelchair accessibility should be clearly marked. Toilets also need to be signposted.
Signage templates are available in A3 and A4 format (staff access only).
Recording
Should you wish to record the event (either tape or video) or have photographs taken, contact the Flexible Learning Centre or the Marketing and Development Unit for advice.
Gifts
If guest speakers are not being paid, it may be appropriate to present them with a gift. University items can be purchased through the merchandise catalogue (staff access only). The Jam Factory also offers a discount to University staff.
Recognition of Indigenous landowners
It may be appropriate to have a representative of the Indigenous landowners, the Kaurna people, to open your event. Having a representative of the Kaurna people welcome your audience onto their land provides a respectful recognition that the venue and, more broadly, our community is built on the land of the Kaurna people. Visit the Unaipon School for contacts and enquiries.
Name tags
You may wish to print name tags with the event title. These are available from Document Services.
Name tag templates are available in blue on white and white on blue format (staff access only).
How to Organise an Event
source: http://www.wikihow.com/Organise-an-Event
How to manage an event, school program, corporate function, get-together, culturals, wedding.
Organizing a Successfully Event requires lot of planning and coordination
Steps
---------------
Planning
Each Team Members should do his/her job
Preparing Budget is an important activity
Take Action
Brainstorming will solve all of issue and bring clarity in the action to be taken
Team Leader should Discuss with Team Members
Team Work Matters
Work to be done 24 hours to 36 hours before the event
On the Day of Event
After the Event
"Winners don't do different things, they do things differently"
Tips
-----------------
Co-ordination
1. Before the event have person/committee -in-charge of
2. On the Day of Event have person(s) in charge of
Documents
1. List of Documents (etc) to be prepared
Venue
1. Factors to be considered while selecting a venue and negotiating the price
Date
1. Factors to be considered while deciding the date
Instructions
1. Some instructions for working in a team successfully
"There is not limit what a team can do, if no one care who gets the credit"
2. Instructions (given to team members especially to first time volunteers or young people) for work to be done before the event.
3. General Instructions to given for the Event.
Making Notes will make sure that you to not miss out any important thing
Other Tips
Warnings
--------------------
Be prepared for any situation. Sometimes, things go out of control. If you are a team member don't get angry if someone shouts at you, (the person may be tense). If you are a coordinator, do not get tense or panic. Do things coolly. Try to figure out what situation will happen, and what you can do when it happened.
How to manage an event, school program, corporate function, get-together, culturals, wedding.
Organizing a Successfully Event requires lot of planning and coordination
Steps
---------------
Planning
- Good team members with different skills are a necessity. They can help with everything from preparing schedules and budgets, to making agendas and invitations. They can help you get things done.
Each Team Members should do his/her job
- Make sure to gather volunteers. If they have good connections, the job of finding important guests is easier.
- Prepare a Budget. All possible expenses, incomes, sponsors, and contingent expenses should be included.
Preparing Budget is an important activity
- Prepare a draft invitation. The draft should include the tentative date, time, venue (place), chief guest, name of the event, and a theme or tag-line for the event.
- Prepare a draft schedule of the programs in the event.
- Prepare a time line (with deadlines) for each activity.
- Make sure to keep team members and supervisors 'up to speed' with your plans. Collaboration can make your job easier.
Take Action
- Fix the date, venue, chief guest, name of the event and tag-line. (See tips for finding the perfect venue and date.)
- Get approval for your budget, schedule, and etc. from team members as well as supervisors.
- Once again, meet with team members and volunteers to brain storm any problems that might arise. This is also the perfect time to create an action plan.
Brainstorming will solve all of issue and bring clarity in the action to be taken
- Delegate work to different people and let an experienced person coordinate all activities. If the event is a mega-event, let different people coordinate different activities, under the supervision of one person. The team leader should be trusted by the team members.
Team Leader should Discuss with Team Members
- Make sure to update any websites connected to the event.
- Collect sponsors and other sources of money from delegates.
- Market the event. Prepare brochure, release advertisement, inform the media, send mailings, make phone calls, send messages to e-groups, and visit potential participants or sponsors.
- It is important to make sure administrative actions are being taken care of as well. Things like poor accounting, and lack of correspondence can create problems for any event.
- Make sure the team does not have any internal problems. Stay in touch with all team leaders as well as team members and volunteers.
Team Work Matters
- Gather items needed for the event. These items might include medals, games, mementos, prizes, or certificates.
- Make arrangements for Photos, videos etc.
- Make arrangements for food and refreshments. This is also a good time to prepare for special accommodation such as for those who are physically challenged, nursing mothers, prayer rooms, etc.
- Make arrangements for chairs, tables, backdrops, microphones, speakers, computers, LCD projectors, podiums, name board of VIP, to be set up at the venue.
- Make transportation and traveling arrangements for participants and organizers. Prepare an itinerary for all outstation participants. Make a written schedule and include directions along with contact information at the venue.
- Make accommodation bookings and pick-up and drop back facility.
- Prepare the list with all relevant mobile, phone numbers, emails ids of team members. Also, make a similar contact list for VIP, and supplier of any goods or services.
- Visit the venue with your team members, look around the place including parking, toilets, green rooms, contact person, arrangements, various entrances and exits. Look for nearby places where you can take photocopy, make phone calls, buy any things in case of emergency.
- Give proper instructions to the team members on how to handle every situation.
- Make sure you communicate with every one on how to reach the venue and the time.
Work to be done 24 hours to 36 hours before the event
- Check whether all invitations have been sent and responded to. Create a list of invitees.
- Remind VIPs about the events.
- Check whether all activities are going on schedule.
- Re-check with the hotels that accommodation is in order for team leaders, volunteers, and VIP.
- See the traveling schedule of outstation participants.
- Go to the venue and check whether all things are ready.
- Collect enough money/cash for the event expenses from concern persons.
- Check whether participants kit is ready. This kit might include a bottle of water, snack bar, note paper, pen, brochure and any information they may need. It is also a good idea to include small trinkets and mementos.
- Prepare minute to minute agenda for important programs.
- Make a checklist of the things to be taken to the venue.
- Check whether enough people are there for the event, otherwise make sure you get some more people to help you.
On the Day of Event
- Arrive early to the venue with your team members and volunteers. Check for the electric reading and that all electronic equipment is in working order.
- Make sure the organizers are wearing a distinct badge or some other noticeable implement so that participants can find help if needed.
- For any transportation, check the car reading and note down the time and the reading.
- Put the Welcome Banners and other info in front of the building.
- Make a beautiful reception and registration counter.
- Inform the sponsors on where to put the stalls. (Make allocation of space earlier).
- Keep the dais, microphones, and speakers ready. Put on music for an informal event.
- Make sure the host speaker has the schedule and resume of the chief guest ready. He/She should be well prepared. Make sure the host/anchor/Master of Ceremony is aware of the purpose of the program as well as the people who are organizing it.
- Make sure that speakers are aware of any time constraints.
- Welcome the delegates and others.
- Take care of any special requests, especially those of the outstations and chief guest.
- Have a separate person to look after the needs of General Delegates (Non-VIPs) and for PR (Public Relations).
- Give directions to those who need them.
- Take photos of all important things especially sponsors banners, your banner, entrance, receptions etc.
- Ensure all resources (food, water etc) are sufficient, otherwise work out your contingency plan.
- Thank the delegates after the event.
- Take the feedback from participants.
- Clean up the place, check the electric meter etc, remove the banners, tables, etc. Check to make sure nothing valuable has been left behind, and then, leave the venue.
After the Event
- Thank the all team members, especially sponsors and volunteers.
"Winners don't do different things, they do things differently"
- Finalize and settle the accounts.
- Have a Thanks Giving party for those who helped.
- Distribute any souvenirs or other publications to relevant people.
- Deliver the receipts to sponsors and others.
- Distribute the photos to those who require it (after developing the photos) and post the photos in your event website.
- Evaluate the feedback forms (or feedback from your website)
- Have a post-review meeting to perform better next time.
Tips
-----------------
Co-ordination
1. Before the event have person/committee -in-charge of
- Sponsors
- Local Participants
- Outstation Participants
- International Participants
- Chief Guest, Speakers,
- Accounts
- Special Events, Host Show
- Documentation, Correspondence
- Designing, Printing, Collection of Articles and evaluation the same
- Prizes, Mementos, Gifts, Banners, Certificates, Souvenirs
- Transportation, Caterers, Venue Arrangement, Decorations, Backdrop, Parking
- Media, PR, Marketing
2. On the Day of Event have person(s) in charge of
- Overall Coordination
- Local Participants
- Outstation Participants
- Pick up and down at Airport, Stations, Hotels,
- Green Room
- Food
- On Stage Activities
- Master of Ceremony
- Special Events
- Computer, LCD projector,
- Photographer
- Reception
- Crowd Management and PR with Crowd
- Parking Area
- Security
- Distribution of Various things (Gifts, Certificates to selected people as well as all the Participants)
Documents
1. List of Documents (etc) to be prepared
- Budget
- Event Schedule (Timing of each program in the Event)
- Invitations
- List of people to be invited
- Action Plan
- Time-line (Work completion schedule)
- Accounts
- Communication Letters
- Work Register
- Designing Brochures etc
- Preparing various articles for Souvenir
- Materials for Press Conference
- Speech
- Participants List
- Comparing Notes (along with Resume of Speakers)
- Agenda
- Minute to Minute Schedule
- List of Prize Winning
- Work Allocation List
- Networking List (Mobile numbers of organisers)
- Checklist of Things to be Taken
- Checklist of Work to be Done
- Report of the Event (for media and others)
- Final statements of Accounts
Venue
1. Factors to be considered while selecting a venue and negotiating the price
- Capacity of the Hall (No. of Delegates --excluding floating delegates)
- Provision for Food (if meals are served)
- Provision for stalls, demo, Games, mini-conference etc
- Flexibility (if case of informal event)
- Timing (When does the event can start and end at the venue)
- Lighting arrangement (in case for night events)
- Air-conditioned or not
- Required Equipment are provided (Mikes, Speakers, etc)
- Furniture for dais (Tables, Chairs, Table Clothes)
- Whether Music, Entertainment is allowed or not (for informal programs)
- Power Backup
- Accessibility -- whether the venue is center of city (Whether Delegates can arrive without any difficulty)
- Penalty, in case of cancellation of venue
- Provision for people with disability
- Special Rooms for Organizers, Dressing up etc
- Total Cost
Date
1. Factors to be considered while deciding the date
- Whether the Chief Guest and other VIPs are available on the particular date(s)
- Venue is free on a particular date(s)
- Most of the Delegates do not have any other engagement on those date(s)
- Holidays -- Whether the program should be held on weekdays, weekends or other holiday
- Whether any major exams, strike, other special event is taking place in the city or around it
- Time need to prepared for the event
- Time required for the outstation delegates to make arrangement and come the event
Instructions
1. Some instructions for working in a team successfully
"There is not limit what a team can do, if no one care who gets the credit"
- Do not criticize anyone, unless you have a suggestion or solution.
- Do not sub-delegate the work and responsibilities given to you at any time.
- Be punctual in all your work. If you are late, give prompt proper info to the person you report to.
- Smile a lot. Have courtesy for everyone, in and out of your team.
- When someone offer help (including money), respond immediately, and thank them sincerely.
- When there is a problem, do not blame others neither put it on your head and create tension but try to solve it...
- Do not panic/get tensed. A cool mind will produce better results at the right time.
- If you borrow anything, take responsibility to return it at the said time.
- Do not repeat any mistakes.
- Planning is necessary. Planning ‘what to do’ (important things) is done in team meetings. Stick to it.
- But planning in smaller groups ‘how to do’, ‘how it should be done’ etc., is also equally important.
- Proper Implementation is critical for an idea, Plan to be successful till the last...
- Be slow and steady. Do not make haste while communicating. It would only waste time.
- Always have a good morale & positive attitude with everyone. Please do not beg to anyone.
- Be responsible for your work.
- Report back voluntarily to the person, who had given you the task, whether the task is successful or not. But at the said time.
2. Instructions (given to team members especially to first time volunteers or young people) for work to be done before the event.
- Also, try to be in formals and behave professionally
- Keep a scribing pad and a pen always besides/with you.
- Be firm in what you speak. Maintain eye contact with everyone you see. Be self-confident.
- Ensure the receipts are delivered on time
- Keep proper/correct record of all things that you handle, including cheques, banners, bills, expenses etc.,
- After the program, thank everyone, including individual sponsors and the participants
3. General Instructions to given for the Event.
- One(Two) organizer(s) will be coordinating the Event for the day.
- Co-operate with him/her. No announcements should be made without his/her knowledge.
- Have Good formal & informal Interaction with the crowd (when ever possible)
- Note Down all important details.
Making Notes will make sure that you to not miss out any important thing
- Follow the exact instructions given by the coordinator(s)
- Be in full formals for the full day, especially at inauguration and valediction.
- Be responsible for your work.
- Do not sit with the audience or your friends in the hall. Lots of work will be pending...
- Be ready to do any type of work…[Be it picking up papers on floor or sitting on the dais with the chief guest…]
- Take initiative, walk around and find pending jobs that can be done by you, complete it on seeing it. Do not delegate to others…
- Be very cheerful, especially when you are amongst the crowd.
- Do not leave the counter/seat where you are seated/assigned.
- Last but not the least, ENJOY THE SHOW.
Other Tips
- Decide which things should be outsourced and which work should be done by team member. Outsourcing depends on Budget, Time, Quality, Importance of job etc.
- Different work for organizing is like various functions. Budget and accounts is like Finance, informing the delegates and making them participate is like Marketing Job, Team Management is Like HR, transportation is like logistics, Event is like Operations, having good relations with media and others is like PR.
Warnings
--------------------
Be prepared for any situation. Sometimes, things go out of control. If you are a team member don't get angry if someone shouts at you, (the person may be tense). If you are a coordinator, do not get tense or panic. Do things coolly. Try to figure out what situation will happen, and what you can do when it happened.
Saturday, September 26, 2009
How to Start a Startup
source: http://www.paulgraham.com/start.html
March 2005
(This essay is derived from a talk at the Harvard Computer Society.)
You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that does all three will probably succeed.
And that's kind of exciting, when you think about it, because all three are doable. Hard, but doable. And since a startup that succeeds ordinarily makes its founders rich, that implies getting rich is doable too. Hard, but doable.
If there is one message I'd like to get across about startups, that's it. There is no magically difficult step that requires brilliance to solve.
The Idea
In particular, you don't need a brilliant idea to start a startup around. The way a startup makes money is to offer people better technology than they have now. But what people have now is often so bad that it doesn't take brilliance to do better.
Google's plan, for example, was simply to create a search site that didn't suck. They had three new ideas: index more of the Web, use links to rank search results, and have clean, simple web pages with unintrusive keyword-based ads. Above all, they were determined to make a site that was good to use. No doubt there are great technical tricks within Google, but the overall plan was straightforward. And while they probably have bigger ambitions now, this alone brings them a billion dollars a year. [1]
There are plenty of other areas that are just as backward as search was before Google. I can think of several heuristics for generating ideas for startups, but most reduce to this: look at something people are trying to do, and figure out how to do it in a way that doesn't suck.
For example, dating sites currently suck far worse than search did before Google. They all use the same simple-minded model. They seem to have approached the problem by thinking about how to do database matches instead of how dating works in the real world. An undergrad could build something better as a class project. And yet there's a lot of money at stake. Online dating is a valuable business now, and it might be worth a hundred times as much if it worked.
An idea for a startup, however, is only a beginning. A lot of would-be startup founders think the key to the whole process is the initial idea, and from that point all you have to do is execute. Venture capitalists know better. If you go to VC firms with a brilliant idea that you'll tell them about if they sign a nondisclosure agreement, most will tell you to get lost. That shows how much a mere idea is worth. The market price is less than the inconvenience of signing an NDA.
Another sign of how little the initial idea is worth is the number of startups that change their plan en route. Microsoft's original plan was to make money selling programming languages, of all things. Their current business model didn't occur to them until IBM dropped it in their lap five years later.
Ideas for startups are worth something, certainly, but the trouble is, they're not transferrable. They're not something you could hand to someone else to execute. Their value is mainly as starting points: as questions for the people who had them to continue thinking about.
What matters is not ideas, but the people who have them. Good people can fix bad ideas, but good ideas can't save bad people.
People
What do I mean by good people? One of the best tricks I learned during our startup was a rule for deciding who to hire. Could you describe the person as an animal? It might be hard to translate that into another language, but I think everyone in the US knows what it means. It means someone who takes their work a little too seriously; someone who does what they do so well that they pass right through professional and cross over into obsessive.
What it means specifically depends on the job: a salesperson who just won't take no for an answer; a hacker who will stay up till 4:00 AM rather than go to bed leaving code with a bug in it; a PR person who will cold-call New York Times reporters on their cell phones; a graphic designer who feels physical pain when something is two millimeters out of place.
Almost everyone who worked for us was an animal at what they did. The woman in charge of sales was so tenacious that I used to feel sorry for potential customers on the phone with her. You could sense them squirming on the hook, but you knew there would be no rest for them till they'd signed up.
If you think about people you know, you'll find the animal test is easy to apply. Call the person's image to mind and imagine the sentence "so-and-so is an animal." If you laugh, they're not. You don't need or perhaps even want this quality in big companies, but you need it in a startup.
For programmers we had three additional tests. Was the person genuinely smart? If so, could they actually get things done? And finally, since a few good hackers have unbearable personalities, could we stand to have them around?
That last test filters out surprisingly few people. We could bear any amount of nerdiness if someone was truly smart. What we couldn't stand were people with a lot of attitude. But most of those weren't truly smart, so our third test was largely a restatement of the first.
When nerds are unbearable it's usually because they're trying too hard to seem smart. But the smarter they are, the less pressure they feel to act smart. So as a rule you can recognize genuinely smart people by their ability to say things like "I don't know," "Maybe you're right," and "I don't understand x well enough."
This technique doesn't always work, because people can be influenced by their environment. In the MIT CS department, there seems to be a tradition of acting like a brusque know-it-all. I'm told it derives ultimately from Marvin Minsky, in the same way the classic airline pilot manner is said to derive from Chuck Yeager. Even genuinely smart people start to act this way there, so you have to make allowances.
It helped us to have Robert Morris, who is one of the readiest to say "I don't know" of anyone I've met. (At least, he was before he became a professor at MIT.) No one dared put on attitude around Robert, because he was obviously smarter than they were and yet had zero attitude himself.
Like most startups, ours began with a group of friends, and it was through personal contacts that we got most of the people we hired. This is a crucial difference between startups and big companies. Being friends with someone for even a couple days will tell you more than companies could ever learn in interviews. [2]
It's no coincidence that startups start around universities, because that's where smart people meet. It's not what people learn in classes at MIT and Stanford that has made technology companies spring up around them. They could sing campfire songs in the classes so long as admissions worked the same.
If you start a startup, there's a good chance it will be with people you know from college or grad school. So in theory you ought to try to make friends with as many smart people as you can in school, right? Well, no. Don't make a conscious effort to schmooze; that doesn't work well with hackers.
What you should do in college is work on your own projects. Hackers should do this even if they don't plan to start startups, because it's the only real way to learn how to program. In some cases you may collaborate with other students, and this is the best way to get to know good hackers. The project may even grow into a startup. But once again, I wouldn't aim too directly at either target. Don't force things; just work on stuff you like with people you like.
Ideally you want between two and four founders. It would be hard to start with just one. One person would find the moral weight of starting a company hard to bear. Even Bill Gates, who seems to be able to bear a good deal of moral weight, had to have a co-founder. But you don't want so many founders that the company starts to look like a group photo. Partly because you don't need a lot of people at first, but mainly because the more founders you have, the worse disagreements you'll have. When there are just two or three founders, you know you have to resolve disputes immediately or perish. If there are seven or eight, disagreements can linger and harden into factions. You don't want mere voting; you need unanimity.
In a technology startup, which most startups are, the founders should include technical people. During the Internet Bubble there were a number of startups founded by business people who then went looking for hackers to create their product for them. This doesn't work well. Business people are bad at deciding what to do with technology, because they don't know what the options are, or which kinds of problems are hard and which are easy. And when business people try to hire hackers, they can't tell which ones are good. Even other hackers have a hard time doing that. For business people it's roulette.
Do the founders of a startup have to include business people? That depends. We thought so when we started ours, and we asked several people who were said to know about this mysterious thing called "business" if they would be the president. But they all said no, so I had to do it myself. And what I discovered was that business was no great mystery. It's not something like physics or medicine that requires extensive study. You just try to get people to pay you for stuff.
I think the reason I made such a mystery of business was that I was disgusted by the idea of doing it. I wanted to work in the pure, intellectual world of software, not deal with customers' mundane problems. People who don't want to get dragged into some kind of work often develop a protective incompetence at it. Paul Erdos was particularly good at this. By seeming unable even to cut a grapefruit in half (let alone go to the store and buy one), he forced other people to do such things for him, leaving all his time free for math. Erdos was an extreme case, but most husbands use the same trick to some degree.
Once I was forced to discard my protective incompetence, I found that business was neither so hard nor so boring as I feared. There are esoteric areas of business that are quite hard, like tax law or the pricing of derivatives, but you don't need to know about those in a startup. All you need to know about business to run a startup are commonsense things people knew before there were business schools, or even universities.
If you work your way down the Forbes 400 making an x next to the name of each person with an MBA, you'll learn something important about business school. You don't even hit an MBA till number 22, Phil Knight, the CEO of Nike. There are only four MBAs in the top 50. What you notice in the Forbes 400 are a lot of people with technical backgrounds. Bill Gates, Steve Jobs, Larry Ellison, Michael Dell, Jeff Bezos, Gordon Moore. The rulers of the technology business tend to come from technology, not business. So if you want to invest two years in something that will help you succeed in business, the evidence suggests you'd do better to learn how to hack than get an MBA. [3]
There is one reason you might want to include business people in a startup, though: because you have to have at least one person willing and able to focus on what customers want. Some believe only business people can do this-- that hackers can implement software, but not design it. That's nonsense. There's nothing about knowing how to program that prevents hackers from understanding users, or about not knowing how to program that magically enables business people to understand them.
If you can't understand users, however, you should either learn how or find a co-founder who can. That is the single most important issue for technology startups, and the rock that sinks more of them than anything else.
What Customers Want
It's not just startups that have to worry about this. I think most businesses that fail do it because they don't give customers what they want. Look at restaurants. A large percentage fail, about a quarter in the first year. But can you think of one restaurant that had really good food and went out of business?
Restaurants with great food seem to prosper no matter what. A restaurant with great food can be expensive, crowded, noisy, dingy, out of the way, and even have bad service, and people will keep coming. It's true that a restaurant with mediocre food can sometimes attract customers through gimmicks. But that approach is very risky. It's more straightforward just to make the food good.
It's the same with technology. You hear all kinds of reasons why startups fail. But can you think of one that had a massively popular product and still failed?
In nearly every failed startup, the real problem was that customers didn't want the product. For most, the cause of death is listed as "ran out of funding," but that's only the immediate cause. Why couldn't they get more funding? Probably because the product was a dog, or never seemed likely to be done, or both.
When I was trying to think of the things every startup needed to do, I almost included a fourth: get a version 1 out as soon as you can. But I decided not to, because that's implicit in making something customers want. The only way to make something customers want is to get a prototype in front of them and refine it based on their reactions.
The other approach is what I call the "Hail Mary" strategy. You make elaborate plans for a product, hire a team of engineers to develop it (people who do this tend to use the term "engineer" for hackers), and then find after a year that you've spent two million dollars to develop something no one wants. This was not uncommon during the Bubble, especially in companies run by business types, who thought of software development as something terrifying that therefore had to be carefully planned.
We never even considered that approach. As a Lisp hacker, I come from the tradition of rapid prototyping. I would not claim (at least, not here) that this is the right way to write every program, but it's certainly the right way to write software for a startup. In a startup, your initial plans are almost certain to be wrong in some way, and your first priority should be to figure out where. The only way to do that is to try implementing them.
Like most startups, we changed our plan on the fly. At first we expected our customers to be Web consultants. But it turned out they didn't like us, because our software was easy to use and we hosted the site. It would be too easy for clients to fire them. We also thought we'd be able to sign up a lot of catalog companies, because selling online was a natural extension of their existing business. But in 1996 that was a hard sell. The middle managers we talked to at catalog companies saw the Web not as an opportunity, but as something that meant more work for them.
We did get a few of the more adventurous catalog companies. Among them was Frederick's of Hollywood, which gave us valuable experience dealing with heavy loads on our servers. But most of our users were small, individual merchants who saw the Web as an opportunity to build a business. Some had retail stores, but many only existed online. And so we changed direction to focus on these users. Instead of concentrating on the features Web consultants and catalog companies would want, we worked to make the software easy to use.
I learned something valuable from that. It's worth trying very, very hard to make technology easy to use. Hackers are so used to computers that they have no idea how horrifying software seems to normal people. Stephen Hawking's editor told him that every equation he included in his book would cut sales in half. When you work on making technology easier to use, you're riding that curve up instead of down. A 10% improvement in ease of use doesn't just increase your sales 10%. It's more likely to double your sales.
How do you figure out what customers want? Watch them. One of the best places to do this was at trade shows. Trade shows didn't pay as a way of getting new customers, but they were worth it as market research. We didn't just give canned presentations at trade shows. We used to show people how to build real, working stores. Which meant we got to watch as they used our software, and talk to them about what they needed.
No matter what kind of startup you start, it will probably be a stretch for you, the founders, to understand what users want. The only kind of software you can build without studying users is the sort for which you are the typical user. But this is just the kind that tends to be open source: operating systems, programming languages, editors, and so on. So if you're developing technology for money, you're probably not going to be developing it for people like you. Indeed, you can use this as a way to generate ideas for startups: what do people who are not like you want from technology?
When most people think of startups, they think of companies like Apple or Google. Everyone knows these, because they're big consumer brands. But for every startup like that, there are twenty more that operate in niche markets or live quietly down in the infrastructure. So if you start a successful startup, odds are you'll start one of those.
Another way to say that is, if you try to start the kind of startup that has to be a big consumer brand, the odds against succeeding are steeper. The best odds are in niche markets. Since startups make money by offering people something better than they had before, the best opportunities are where things suck most. And it would be hard to find a place where things suck more than in corporate IT departments. You would not believe the amount of money companies spend on software, and the crap they get in return. This imbalance equals opportunity.
If you want ideas for startups, one of the most valuable things you could do is find a middle-sized non-technology company and spend a couple weeks just watching what they do with computers. Most good hackers have no more idea of the horrors perpetrated in these places than rich Americans do of what goes on in Brazilian slums.
Start by writing software for smaller companies, because it's easier to sell to them. It's worth so much to sell stuff to big companies that the people selling them the crap they currently use spend a lot of time and money to do it. And while you can outhack Oracle with one frontal lobe tied behind your back, you can't outsell an Oracle salesman. So if you want to win through better technology, aim at smaller customers. [4]
They're the more strategically valuable part of the market anyway. In technology, the low end always eats the high end. It's easier to make an inexpensive product more powerful than to make a powerful product cheaper. So the products that start as cheap, simple options tend to gradually grow more powerful till, like water rising in a room, they squash the "high-end" products against the ceiling. Sun did this to mainframes, and Intel is doing it to Sun. Microsoft Word did it to desktop publishing software like Interleaf and Framemaker. Mass-market digital cameras are doing it to the expensive models made for professionals. Avid did it to the manufacturers of specialized video editing systems, and now Apple is doing it to Avid. Henry Ford did it to the car makers that preceded him. If you build the simple, inexpensive option, you'll not only find it easier to sell at first, but you'll also be in the best position to conquer the rest of the market.
It's very dangerous to let anyone fly under you. If you have the cheapest, easiest product, you'll own the low end. And if you don't, you're in the crosshairs of whoever does.
Raising Money
To make all this happen, you're going to need money. Some startups have been self-funding-- Microsoft for example-- but most aren't. I think it's wise to take money from investors. To be self-funding, you have to start as a consulting company, and it's hard to switch from that to a product company.
Financially, a startup is like a pass/fail course. The way to get rich from a startup is to maximize the company's chances of succeeding, not to maximize the amount of stock you retain. So if you can trade stock for something that improves your odds, it's probably a smart move.
To most hackers, getting investors seems like a terrifying and mysterious process. Actually it's merely tedious. I'll try to give an outline of how it works.
The first thing you'll need is a few tens of thousands of dollars to pay your expenses while you develop a prototype. This is called seed capital. Because so little money is involved, raising seed capital is comparatively easy-- at least in the sense of getting a quick yes or no.
Usually you get seed money from individual rich people called "angels." Often they're people who themselves got rich from technology. At the seed stage, investors don't expect you to have an elaborate business plan. Most know that they're supposed to decide quickly. It's not unusual to get a check within a week based on a half-page agreement.
We started Viaweb with $10,000 of seed money from our friend Julian. But he gave us a lot more than money. He's a former CEO and also a corporate lawyer, so he gave us a lot of valuable advice about business, and also did all the legal work of getting us set up as a company. Plus he introduced us to one of the two angel investors who supplied our next round of funding.
Some angels, especially those with technology backgrounds, may be satisfied with a demo and a verbal description of what you plan to do. But many will want a copy of your business plan, if only to remind themselves what they invested in.
Our angels asked for one, and looking back, I'm amazed how much worry it caused me. "Business plan" has that word "business" in it, so I figured it had to be something I'd have to read a book about business plans to write. Well, it doesn't. At this stage, all most investors expect is a brief description of what you plan to do and how you're going to make money from it, and the resumes of the founders. If you just sit down and write out what you've been saying to one another, that should be fine. It shouldn't take more than a couple hours, and you'll probably find that writing it all down gives you more ideas about what to do.
For the angel to have someone to make the check out to, you're going to have to have some kind of company. Merely incorporating yourselves isn't hard. The problem is, for the company to exist, you have to decide who the founders are, and how much stock they each have. If there are two founders with the same qualifications who are both equally committed to the business, that's easy. But if you have a number of people who are expected to contribute in varying degrees, arranging the proportions of stock can be hard. And once you've done it, it tends to be set in stone.
I have no tricks for dealing with this problem. All I can say is, try hard to do it right. I do have a rule of thumb for recognizing when you have, though. When everyone feels they're getting a slightly bad deal, that they're doing more than they should for the amount of stock they have, the stock is optimally apportioned.
There is more to setting up a company than incorporating it, of course: insurance, business license, unemployment compensation, various things with the IRS. I'm not even sure what the list is, because we, ah, skipped all that. When we got real funding near the end of 1996, we hired a great CFO, who fixed everything retroactively. It turns out that no one comes and arrests you if you don't do everything you're supposed to when starting a company. And a good thing too, or a lot of startups would never get started. [5]
It can be dangerous to delay turning yourself into a company, because one or more of the founders might decide to split off and start another company doing the same thing. This does happen. So when you set up the company, as well as as apportioning the stock, you should get all the founders to sign something agreeing that everyone's ideas belong to this company, and that this company is going to be everyone's only job.
[If this were a movie, ominous music would begin here.]
While you're at it, you should ask what else they've signed. One of the worst things that can happen to a startup is to run into intellectual property problems. We did, and it came closer to killing us than any competitor ever did.
As we were in the middle of getting bought, we discovered that one of our people had, early on, been bound by an agreement that said all his ideas belonged to the giant company that was paying for him to go to grad school. In theory, that could have meant someone else owned big chunks of our software. So the acquisition came to a screeching halt while we tried to sort this out. The problem was, since we'd been about to be acquired, we'd allowed ourselves to run low on cash. Now we needed to raise more to keep going. But it's hard to raise money with an IP cloud over your head, because investors can't judge how serious it is.
Our existing investors, knowing that we needed money and had nowhere else to get it, at this point attempted certain gambits which I will not describe in detail, except to remind readers that the word "angel" is a metaphor. The founders thereupon proposed to walk away from the company, after giving the investors a brief tutorial on how to administer the servers themselves. And while this was happening, the acquirers used the delay as an excuse to welch on the deal.
Miraculously it all turned out ok. The investors backed down; we did another round of funding at a reasonable valuation; the giant company finally gave us a piece of paper saying they didn't own our software; and six months later we were bought by Yahoo for much more than the earlier acquirer had agreed to pay. So we were happy in the end, though the experience probably took several years off my life.
Don't do what we did. Before you consummate a startup, ask everyone about their previous IP history.
Once you've got a company set up, it may seem presumptuous to go knocking on the doors of rich people and asking them to invest tens of thousands of dollars in something that is really just a bunch of guys with some ideas. But when you look at it from the rich people's point of view, the picture is more encouraging. Most rich people are looking for good investments. If you really think you have a chance of succeeding, you're doing them a favor by letting them invest. Mixed with any annoyance they might feel about being approached will be the thought: are these guys the next Google?
Usually angels are financially equivalent to founders. They get the same kind of stock and get diluted the same amount in future rounds. How much stock should they get? That depends on how ambitious you feel. When you offer x percent of your company for y dollars, you're implicitly claiming a certain value for the whole company. Venture investments are usually described in terms of that number. If you give an investor new shares equal to 5% of those already outstanding in return for $100,000, then you've done the deal at a pre-money valuation of $2 million.
How do you decide what the value of the company should be? There is no rational way. At this stage the company is just a bet. I didn't realize that when we were raising money. Julian thought we ought to value the company at several million dollars. I thought it was preposterous to claim that a couple thousand lines of code, which was all we had at the time, were worth several million dollars. Eventually we settled on one millon, because Julian said no one would invest in a company with a valuation any lower. [6]
What I didn't grasp at the time was that the valuation wasn't just the value of the code we'd written so far. It was also the value of our ideas, which turned out to be right, and of all the future work we'd do, which turned out to be a lot.
The next round of funding is the one in which you might deal with actual venture capital firms. But don't wait till you've burned through your last round of funding to start approaching them. VCs are slow to make up their minds. They can take months. You don't want to be running out of money while you're trying to negotiate with them.
Getting money from an actual VC firm is a bigger deal than getting money from angels. The amounts of money involved are larger, millions usually. So the deals take longer, dilute you more, and impose more onerous conditions.
Sometimes the VCs want to install a new CEO of their own choosing. Usually the claim is that you need someone mature and experienced, with a business background. Maybe in some cases this is true. And yet Bill Gates was young and inexperienced and had no business background, and he seems to have done ok. Steve Jobs got booted out of his own company by someone mature and experienced, with a business background, who then proceeded to ruin the company. So I think people who are mature and experienced, with a business background, may be overrated. We used to call these guys "newscasters," because they had neat hair and spoke in deep, confident voices, and generally didn't know much more than they read on the teleprompter.
We talked to a number of VCs, but eventually we ended up financing our startup entirely with angel money. The main reason was that we feared a brand-name VC firm would stick us with a newscaster as part of the deal. That might have been ok if he was content to limit himself to talking to the press, but what if he wanted to have a say in running the company? That would have led to disaster, because our software was so complex. We were a company whose whole m.o. was to win through better technology. The strategic decisions were mostly decisions about technology, and we didn't need any help with those.
This was also one reason we didn't go public. Back in 1998 our CFO tried to talk me into it. In those days you could go public as a dogfood portal, so as a company with a real product and real revenues, we might have done well. But I feared it would have meant taking on a newscaster-- someone who, as they say, "can talk Wall Street's language."
I'm happy to see Google is bucking that trend. They didn't talk Wall Street's language when they did their IPO, and Wall Street didn't buy. And now Wall Street is collectively kicking itself. They'll pay attention next time. Wall Street learns new languages fast when money is involved.
You have more leverage negotiating with VCs than you realize. The reason is other VCs. I know a number of VCs now, and when you talk to them you realize that it's a seller's market. Even now there is too much money chasing too few good deals.
VCs form a pyramid. At the top are famous ones like Sequoia and Kleiner Perkins, but beneath those are a huge number you've never heard of. What they all have in common is that a dollar from them is worth one dollar. Most VCs will tell you that they don't just provide money, but connections and advice. If you're talking to Vinod Khosla or John Doerr or Mike Moritz, this is true. But such advice and connections can come very expensive. And as you go down the food chain the VCs get rapidly dumber. A few steps down from the top you're basically talking to bankers who've picked up a few new vocabulary words from reading Wired. (Does your product use XML?) So I'd advise you to be skeptical about claims of experience and connections. Basically, a VC is a source of money. I'd be inclined to go with whoever offered the most money the soonest with the least strings attached.
You may wonder how much to tell VCs. And you should, because some of them may one day be funding your competitors. I think the best plan is not to be overtly secretive, but not to tell them everything either. After all, as most VCs say, they're more interested in the people than the ideas. The main reason they want to talk about your idea is to judge you, not the idea. So as long as you seem like you know what you're doing, you can probably keep a few things back from them. [7]
Talk to as many VCs as you can, even if you don't want their money, because a) they may be on the board of someone who will buy you, and b) if you seem impressive, they'll be discouraged from investing in your competitors. The most efficient way to reach VCs, especially if you only want them to know about you and don't want their money, is at the conferences that are occasionally organized for startups to present to them.
Not Spending It
When and if you get an infusion of real money from investors, what should you do with it? Not spend it, that's what. In nearly every startup that fails, the proximate cause is running out of money. Usually there is something deeper wrong. But even a proximate cause of death is worth trying hard to avoid.
During the Bubble many startups tried to "get big fast." Ideally this meant getting a lot of customers fast. But it was easy for the meaning to slide over into hiring a lot of people fast.
Of the two versions, the one where you get a lot of customers fast is of course preferable. But even that may be overrated. The idea is to get there first and get all the users, leaving none for competitors. But I think in most businesses the advantages of being first to market are not so overwhelmingly great. Google is again a case in point. When they appeared it seemed as if search was a mature market, dominated by big players who'd spent millions to build their brands: Yahoo, Lycos, Excite, Infoseek, Altavista, Inktomi. Surely 1998 was a little late to arrive at the party.
But as the founders of Google knew, brand is worth next to nothing in the search business. You can come along at any point and make something better, and users will gradually seep over to you. As if to emphasize the point, Google never did any advertising. They're like dealers; they sell the stuff, but they know better than to use it themselves.
The competitors Google buried would have done better to spend those millions improving their software. Future startups should learn from that mistake. Unless you're in a market where products are as undifferentiated as cigarettes or vodka or laundry detergent, spending a lot on brand advertising is a sign of breakage. And few if any Web businesses are so undifferentiated. The dating sites are running big ad campaigns right now, which is all the more evidence they're ripe for the picking. (Fee, fie, fo, fum, I smell a company run by marketing guys.)
We were compelled by circumstances to grow slowly, and in retrospect it was a good thing. The founders all learned to do every job in the company. As well as writing software, I had to do sales and customer support. At sales I was not very good. I was persistent, but I didn't have the smoothness of a good salesman. My message to potential customers was: you'd be stupid not to sell online, and if you sell online you'd be stupid to use anyone else's software. Both statements were true, but that's not the way to convince people.
I was great at customer support though. Imagine talking to a customer support person who not only knew everything about the product, but would apologize abjectly if there was a bug, and then fix it immediately, while you were on the phone with them. Customers loved us. And we loved them, because when you're growing slow by word of mouth, your first batch of users are the ones who were smart enough to find you by themselves. There is nothing more valuable, in the early stages of a startup, than smart users. If you listen to them, they'll tell you exactly how to make a winning product. And not only will they give you this advice for free, they'll pay you.
We officially launched in early 1996. By the end of that year we had about 70 users. Since this was the era of "get big fast," I worried about how small and obscure we were. But in fact we were doing exactly the right thing. Once you get big (in users or employees) it gets hard to change your product. That year was effectively a laboratory for improving our software. By the end of it, we were so far ahead of our competitors that they never had a hope of catching up. And since all the hackers had spent many hours talking to users, we understood online commerce way better than anyone else.
That's the key to success as a startup. There is nothing more important than understanding your business. You might think that anyone in a business must, ex officio, understand it. Far from it. Google's secret weapon was simply that they understood search. I was working for Yahoo when Google appeared, and Yahoo didn't understand search. I know because I once tried to convince the powers that be that we had to make search better, and I got in reply what was then the party line about it: that Yahoo was no longer a mere "search engine." Search was now only a small percentage of our page views, less than one month's growth, and now that we were established as a "media company," or "portal," or whatever we were, search could safely be allowed to wither and drop off, like an umbilical cord.
Well, a small fraction of page views they may be, but they are an important fraction, because they are the page views that Web sessions start with. I think Yahoo gets that now.
Google understands a few other things most Web companies still don't. The most important is that you should put users before advertisers, even though the advertisers are paying and users aren't. One of my favorite bumper stickers reads "if the people lead, the leaders will follow." Paraphrased for the Web, this becomes "get all the users, and the advertisers will follow." More generally, design your product to please users first, and then think about how to make money from it. If you don't put users first, you leave a gap for competitors who do.
To make something users love, you have to understand them. And the bigger you are, the harder that is. So I say "get big slow." The slower you burn through your funding, the more time you have to learn.
The other reason to spend money slowly is to encourage a culture of cheapness. That's something Yahoo did understand. David Filo's title was "Chief Yahoo," but he was proud that his unofficial title was "Cheap Yahoo." Soon after we arrived at Yahoo, we got an email from Filo, who had been crawling around our directory hierarchy, asking if it was really necessary to store so much of our data on expensive RAID drives. I was impressed by that. Yahoo's market cap then was already in the billions, and they were still worrying about wasting a few gigs of disk space.
When you get a couple million dollars from a VC firm, you tend to feel rich. It's important to realize you're not. A rich company is one with large revenues. This money isn't revenue. It's money investors have given you in the hope you'll be able to generate revenues. So despite those millions in the bank, you're still poor.
For most startups the model should be grad student, not law firm. Aim for cool and cheap, not expensive and impressive. For us the test of whether a startup understood this was whether they had Aeron chairs. The Aeron came out during the Bubble and was very popular with startups. Especially the type, all too common then, that was like a bunch of kids playing house with money supplied by VCs. We had office chairs so cheap that the arms all fell off. This was slightly embarrassing at the time, but in retrospect the grad-studenty atmosphere of our office was another of those things we did right without knowing it.
Our offices were in a wooden triple-decker in Harvard Square. It had been an apartment until about the 1970s, and there was still a claw-footed bathtub in the bathroom. It must once have been inhabited by someone fairly eccentric, because a lot of the chinks in the walls were stuffed with aluminum foil, as if to protect against cosmic rays. When eminent visitors came to see us, we were a bit sheepish about the low production values. But in fact that place was the perfect space for a startup. We felt like our role was to be impudent underdogs instead of corporate stuffed shirts, and that is exactly the spirit you want.
An apartment is also the right kind of place for developing software. Cube farms suck for that, as you've probably discovered if you've tried it. Ever notice how much easier it is to hack at home than at work? So why not make work more like home?
When you're looking for space for a startup, don't feel that it has to look professional. Professional means doing good work, not elevators and glass walls. I'd advise most startups to avoid corporate space at first and just rent an apartment. You want to live at the office in a startup, so why not have a place designed to be lived in as your office?
Besides being cheaper and better to work in, apartments tend to be in better locations than office buildings. And for a startup location is very important. The key to productivity is for people to come back to work after dinner. Those hours after the phone stops ringing are by far the best for getting work done. Great things happen when a group of employees go out to dinner together, talk over ideas, and then come back to their offices to implement them. So you want to be in a place where there are a lot of restaurants around, not some dreary office park that's a wasteland after 6:00 PM. Once a company shifts over into the model where everyone drives home to the suburbs for dinner, however late, you've lost something extraordinarily valuable. God help you if you actually start in that mode.
If I were going to start a startup today, there are only three places I'd consider doing it: on the Red Line near Central, Harvard, or Davis Squares (Kendall is too sterile); in Palo Alto on University or California Aves; and in Berkeley immediately north or south of campus. These are the only places I know that have the right kind of vibe.
The most important way to not spend money is by not hiring people. I may be an extremist, but I think hiring people is the worst thing a company can do. To start with, people are a recurring expense, which is the worst kind. They also tend to cause you to grow out of your space, and perhaps even move to the sort of uncool office building that will make your software worse. But worst of all, they slow you down: instead of sticking your head in someone's office and checking out an idea with them, eight people have to have a meeting about it. So the fewer people you can hire, the better.
During the Bubble a lot of startups had the opposite policy. They wanted to get "staffed up" as soon as possible, as if you couldn't get anything done unless there was someone with the corresponding job title. That's big company thinking. Don't hire people to fill the gaps in some a priori org chart. The only reason to hire someone is to do something you'd like to do but can't.
If hiring unnecessary people is expensive and slows you down, why do nearly all companies do it? I think the main reason is that people like the idea of having a lot of people working for them. This weakness often extends right up to the CEO. If you ever end up running a company, you'll find the most common question people ask is how many employees you have. This is their way of weighing you. It's not just random people who ask this; even reporters do. And they're going to be a lot more impressed if the answer is a thousand than if it's ten.
This is ridiculous, really. If two companies have the same revenues, it's the one with fewer employees that's more impressive. When people used to ask me how many people our startup had, and I answered "twenty," I could see them thinking that we didn't count for much. I used to want to add "but our main competitor, whose ass we regularly kick, has a hundred and forty, so can we have credit for the larger of the two numbers?"
As with office space, the number of your employees is a choice between seeming impressive, and being impressive. Any of you who were nerds in high school know about this choice. Keep doing it when you start a company.
Should You?
But should you start a company? Are you the right sort of person to do it? If you are, is it worth it?
More people are the right sort of person to start a startup than realize it. That's the main reason I wrote this. There could be ten times more startups than there are, and that would probably be a good thing.
I was, I now realize, exactly the right sort of person to start a startup. But the idea terrified me at first. I was forced into it because I was a Lisp hacker. The company I'd been consulting for seemed to be running into trouble, and there were not a lot of other companies using Lisp. Since I couldn't bear the thought of programming in another language (this was 1995, remember, when "another language" meant C++) the only option seemed to be to start a new company using Lisp.
I realize this sounds far-fetched, but if you're a Lisp hacker you'll know what I mean. And if the idea of starting a startup frightened me so much that I only did it out of necessity, there must be a lot of people who would be good at it but who are too intimidated to try.
So who should start a startup? Someone who is a good hacker, between about 23 and 38, and who wants to solve the money problem in one shot instead of getting paid gradually over a conventional working life.
I can't say precisely what a good hacker is. At a first rate university this might include the top half of computer science majors. Though of course you don't have to be a CS major to be a hacker; I was a philosophy major in college.
It's hard to tell whether you're a good hacker, especially when you're young. Fortunately the process of starting startups tends to select them automatically. What drives people to start startups is (or should be) looking at existing technology and thinking, don't these guys realize they should be doing x, y, and z? And that's also a sign that one is a good hacker.
I put the lower bound at 23 not because there's something that doesn't happen to your brain till then, but because you need to see what it's like in an existing business before you try running your own. The business doesn't have to be a startup. I spent a year working for a software company to pay off my college loans. It was the worst year of my adult life, but I learned, without realizing it at the time, a lot of valuable lessons about the software business. In this case they were mostly negative lessons: don't have a lot of meetings; don't have chunks of code that multiple people own; don't have a sales guy running the company; don't make a high-end product; don't let your code get too big; don't leave finding bugs to QA people; don't go too long between releases; don't isolate developers from users; don't move from Cambridge to Route 128; and so on. [8] But negative lessons are just as valuable as positive ones. Perhaps even more valuable: it's hard to repeat a brilliant performance, but it's straightforward to avoid errors. [9]
The other reason it's hard to start a company before 23 is that people won't take you seriously. VCs won't trust you, and will try to reduce you to a mascot as a condition of funding. Customers will worry you're going to flake out and leave them stranded. Even you yourself, unless you're very unusual, will feel your age to some degree; you'll find it awkward to be the boss of someone much older than you, and if you're 21, hiring only people younger rather limits your options.
Some people could probably start a company at 18 if they wanted to. Bill Gates was 19 when he and Paul Allen started Microsoft. (Paul Allen was 22, though, and that probably made a difference.) So if you're thinking, I don't care what he says, I'm going to start a company now, you may be the sort of person who could get away with it.
The other cutoff, 38, has a lot more play in it. One reason I put it there is that I don't think many people have the physical stamina much past that age. I used to work till 2:00 or 3:00 AM every night, seven days a week. I don't know if I could do that now.
Also, startups are a big risk financially. If you try something that blows up and leaves you broke at 26, big deal; a lot of 26 year olds are broke. By 38 you can't take so many risks-- especially if you have kids.
My final test may be the most restrictive. Do you actually want to start a startup? What it amounts to, economically, is compressing your working life into the smallest possible space. Instead of working at an ordinary rate for 40 years, you work like hell for four. And maybe end up with nothing-- though in that case it probably won't take four years.
During this time you'll do little but work, because when you're not working, your competitors will be. My only leisure activities were running, which I needed to do to keep working anyway, and about fifteen minutes of reading a night. I had a girlfriend for a total of two months during that three year period. Every couple weeks I would take a few hours off to visit a used bookshop or go to a friend's house for dinner. I went to visit my family twice. Otherwise I just worked.
Working was often fun, because the people I worked with were some of my best friends. Sometimes it was even technically interesting. But only about 10% of the time. The best I can say for the other 90% is that some of it is funnier in hindsight than it seemed then. Like the time the power went off in Cambridge for about six hours, and we made the mistake of trying to start a gasoline powered generator inside our offices. I won't try that again.
I don't think the amount of bullshit you have to deal with in a startup is more than you'd endure in an ordinary working life. It's probably less, in fact; it just seems like a lot because it's compressed into a short period. So mainly what a startup buys you is time. That's the way to think about it if you're trying to decide whether to start one. If you're the sort of person who would like to solve the money problem once and for all instead of working for a salary for 40 years, then a startup makes sense.
For a lot of people the conflict is between startups and graduate school. Grad students are just the age, and just the sort of people, to start software startups. You may worry that if you do you'll blow your chances of an academic career. But it's possible to be part of a startup and stay in grad school, especially at first. Two of our three original hackers were in grad school the whole time, and both got their degrees. There are few sources of energy so powerful as a procrastinating grad student.
If you do have to leave grad school, in the worst case it won't be for too long. If a startup fails, it will probably fail quickly enough that you can return to academic life. And if it succeeds, you may find you no longer have such a burning desire to be an assistant professor.
If you want to do it, do it. Starting a startup is not the great mystery it seems from outside. It's not something you have to know about "business" to do. Build something users love, and spend less than you make. How hard is that?
Notes
[1] Google's revenues are about two billion a year, but half comes from ads on other sites.
[2] One advantage startups have over established companies is that there are no discrimination laws about starting businesses. For example, I would be reluctant to start a startup with a woman who had small children, or was likely to have them soon. But you're not allowed to ask prospective employees if they plan to have kids soon. Believe it or not, under current US law, you're not even allowed to discriminate on the basis of intelligence. Whereas when you're starting a company, you can discriminate on any basis you want about who you start it with.
[3] Learning to hack is a lot cheaper than business school, because you can do it mostly on your own. For the price of a Linux box, a copy of K&R, and a few hours of advice from your neighbor's fifteen year old son, you'll be well on your way.
[4] Corollary: Avoid starting a startup to sell things to the biggest company of all, the government. Yes, there are lots of opportunities to sell them technology. But let someone else start those startups.
[5] A friend who started a company in Germany told me they do care about the paperwork there, and that there's more of it. Which helps explain why there are not more startups in Germany.
[6] At the seed stage our valuation was in principle $100,000, because Julian got 10% of the company. But this is a very misleading number, because the money was the least important of the things Julian gave us.
[7] The same goes for companies that seem to want to acquire you. There will be a few that are only pretending to in order to pick your brains. But you can never tell for sure which these are, so the best approach is to seem entirely open, but to fail to mention a few critical technical secrets.
[8] I was as bad an employee as this place was a company. I apologize to anyone who had to work with me there.
[9] You could probably write a book about how to succeed in business by doing everything in exactly the opposite way from the DMV.
Thanks to Trevor Blackwell, Sarah Harlin, Jessica Livingston, and Robert Morris for reading drafts of this essay, and to Steve Melendez and Gregory Price for inviting me to speak.
March 2005
(This essay is derived from a talk at the Harvard Computer Society.)
You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that does all three will probably succeed.
And that's kind of exciting, when you think about it, because all three are doable. Hard, but doable. And since a startup that succeeds ordinarily makes its founders rich, that implies getting rich is doable too. Hard, but doable.
If there is one message I'd like to get across about startups, that's it. There is no magically difficult step that requires brilliance to solve.
The Idea
In particular, you don't need a brilliant idea to start a startup around. The way a startup makes money is to offer people better technology than they have now. But what people have now is often so bad that it doesn't take brilliance to do better.
Google's plan, for example, was simply to create a search site that didn't suck. They had three new ideas: index more of the Web, use links to rank search results, and have clean, simple web pages with unintrusive keyword-based ads. Above all, they were determined to make a site that was good to use. No doubt there are great technical tricks within Google, but the overall plan was straightforward. And while they probably have bigger ambitions now, this alone brings them a billion dollars a year. [1]
There are plenty of other areas that are just as backward as search was before Google. I can think of several heuristics for generating ideas for startups, but most reduce to this: look at something people are trying to do, and figure out how to do it in a way that doesn't suck.
For example, dating sites currently suck far worse than search did before Google. They all use the same simple-minded model. They seem to have approached the problem by thinking about how to do database matches instead of how dating works in the real world. An undergrad could build something better as a class project. And yet there's a lot of money at stake. Online dating is a valuable business now, and it might be worth a hundred times as much if it worked.
An idea for a startup, however, is only a beginning. A lot of would-be startup founders think the key to the whole process is the initial idea, and from that point all you have to do is execute. Venture capitalists know better. If you go to VC firms with a brilliant idea that you'll tell them about if they sign a nondisclosure agreement, most will tell you to get lost. That shows how much a mere idea is worth. The market price is less than the inconvenience of signing an NDA.
Another sign of how little the initial idea is worth is the number of startups that change their plan en route. Microsoft's original plan was to make money selling programming languages, of all things. Their current business model didn't occur to them until IBM dropped it in their lap five years later.
Ideas for startups are worth something, certainly, but the trouble is, they're not transferrable. They're not something you could hand to someone else to execute. Their value is mainly as starting points: as questions for the people who had them to continue thinking about.
What matters is not ideas, but the people who have them. Good people can fix bad ideas, but good ideas can't save bad people.
People
What do I mean by good people? One of the best tricks I learned during our startup was a rule for deciding who to hire. Could you describe the person as an animal? It might be hard to translate that into another language, but I think everyone in the US knows what it means. It means someone who takes their work a little too seriously; someone who does what they do so well that they pass right through professional and cross over into obsessive.
What it means specifically depends on the job: a salesperson who just won't take no for an answer; a hacker who will stay up till 4:00 AM rather than go to bed leaving code with a bug in it; a PR person who will cold-call New York Times reporters on their cell phones; a graphic designer who feels physical pain when something is two millimeters out of place.
Almost everyone who worked for us was an animal at what they did. The woman in charge of sales was so tenacious that I used to feel sorry for potential customers on the phone with her. You could sense them squirming on the hook, but you knew there would be no rest for them till they'd signed up.
If you think about people you know, you'll find the animal test is easy to apply. Call the person's image to mind and imagine the sentence "so-and-so is an animal." If you laugh, they're not. You don't need or perhaps even want this quality in big companies, but you need it in a startup.
For programmers we had three additional tests. Was the person genuinely smart? If so, could they actually get things done? And finally, since a few good hackers have unbearable personalities, could we stand to have them around?
That last test filters out surprisingly few people. We could bear any amount of nerdiness if someone was truly smart. What we couldn't stand were people with a lot of attitude. But most of those weren't truly smart, so our third test was largely a restatement of the first.
When nerds are unbearable it's usually because they're trying too hard to seem smart. But the smarter they are, the less pressure they feel to act smart. So as a rule you can recognize genuinely smart people by their ability to say things like "I don't know," "Maybe you're right," and "I don't understand x well enough."
This technique doesn't always work, because people can be influenced by their environment. In the MIT CS department, there seems to be a tradition of acting like a brusque know-it-all. I'm told it derives ultimately from Marvin Minsky, in the same way the classic airline pilot manner is said to derive from Chuck Yeager. Even genuinely smart people start to act this way there, so you have to make allowances.
It helped us to have Robert Morris, who is one of the readiest to say "I don't know" of anyone I've met. (At least, he was before he became a professor at MIT.) No one dared put on attitude around Robert, because he was obviously smarter than they were and yet had zero attitude himself.
Like most startups, ours began with a group of friends, and it was through personal contacts that we got most of the people we hired. This is a crucial difference between startups and big companies. Being friends with someone for even a couple days will tell you more than companies could ever learn in interviews. [2]
It's no coincidence that startups start around universities, because that's where smart people meet. It's not what people learn in classes at MIT and Stanford that has made technology companies spring up around them. They could sing campfire songs in the classes so long as admissions worked the same.
If you start a startup, there's a good chance it will be with people you know from college or grad school. So in theory you ought to try to make friends with as many smart people as you can in school, right? Well, no. Don't make a conscious effort to schmooze; that doesn't work well with hackers.
What you should do in college is work on your own projects. Hackers should do this even if they don't plan to start startups, because it's the only real way to learn how to program. In some cases you may collaborate with other students, and this is the best way to get to know good hackers. The project may even grow into a startup. But once again, I wouldn't aim too directly at either target. Don't force things; just work on stuff you like with people you like.
Ideally you want between two and four founders. It would be hard to start with just one. One person would find the moral weight of starting a company hard to bear. Even Bill Gates, who seems to be able to bear a good deal of moral weight, had to have a co-founder. But you don't want so many founders that the company starts to look like a group photo. Partly because you don't need a lot of people at first, but mainly because the more founders you have, the worse disagreements you'll have. When there are just two or three founders, you know you have to resolve disputes immediately or perish. If there are seven or eight, disagreements can linger and harden into factions. You don't want mere voting; you need unanimity.
In a technology startup, which most startups are, the founders should include technical people. During the Internet Bubble there were a number of startups founded by business people who then went looking for hackers to create their product for them. This doesn't work well. Business people are bad at deciding what to do with technology, because they don't know what the options are, or which kinds of problems are hard and which are easy. And when business people try to hire hackers, they can't tell which ones are good. Even other hackers have a hard time doing that. For business people it's roulette.
Do the founders of a startup have to include business people? That depends. We thought so when we started ours, and we asked several people who were said to know about this mysterious thing called "business" if they would be the president. But they all said no, so I had to do it myself. And what I discovered was that business was no great mystery. It's not something like physics or medicine that requires extensive study. You just try to get people to pay you for stuff.
I think the reason I made such a mystery of business was that I was disgusted by the idea of doing it. I wanted to work in the pure, intellectual world of software, not deal with customers' mundane problems. People who don't want to get dragged into some kind of work often develop a protective incompetence at it. Paul Erdos was particularly good at this. By seeming unable even to cut a grapefruit in half (let alone go to the store and buy one), he forced other people to do such things for him, leaving all his time free for math. Erdos was an extreme case, but most husbands use the same trick to some degree.
Once I was forced to discard my protective incompetence, I found that business was neither so hard nor so boring as I feared. There are esoteric areas of business that are quite hard, like tax law or the pricing of derivatives, but you don't need to know about those in a startup. All you need to know about business to run a startup are commonsense things people knew before there were business schools, or even universities.
If you work your way down the Forbes 400 making an x next to the name of each person with an MBA, you'll learn something important about business school. You don't even hit an MBA till number 22, Phil Knight, the CEO of Nike. There are only four MBAs in the top 50. What you notice in the Forbes 400 are a lot of people with technical backgrounds. Bill Gates, Steve Jobs, Larry Ellison, Michael Dell, Jeff Bezos, Gordon Moore. The rulers of the technology business tend to come from technology, not business. So if you want to invest two years in something that will help you succeed in business, the evidence suggests you'd do better to learn how to hack than get an MBA. [3]
There is one reason you might want to include business people in a startup, though: because you have to have at least one person willing and able to focus on what customers want. Some believe only business people can do this-- that hackers can implement software, but not design it. That's nonsense. There's nothing about knowing how to program that prevents hackers from understanding users, or about not knowing how to program that magically enables business people to understand them.
If you can't understand users, however, you should either learn how or find a co-founder who can. That is the single most important issue for technology startups, and the rock that sinks more of them than anything else.
What Customers Want
It's not just startups that have to worry about this. I think most businesses that fail do it because they don't give customers what they want. Look at restaurants. A large percentage fail, about a quarter in the first year. But can you think of one restaurant that had really good food and went out of business?
Restaurants with great food seem to prosper no matter what. A restaurant with great food can be expensive, crowded, noisy, dingy, out of the way, and even have bad service, and people will keep coming. It's true that a restaurant with mediocre food can sometimes attract customers through gimmicks. But that approach is very risky. It's more straightforward just to make the food good.
It's the same with technology. You hear all kinds of reasons why startups fail. But can you think of one that had a massively popular product and still failed?
In nearly every failed startup, the real problem was that customers didn't want the product. For most, the cause of death is listed as "ran out of funding," but that's only the immediate cause. Why couldn't they get more funding? Probably because the product was a dog, or never seemed likely to be done, or both.
When I was trying to think of the things every startup needed to do, I almost included a fourth: get a version 1 out as soon as you can. But I decided not to, because that's implicit in making something customers want. The only way to make something customers want is to get a prototype in front of them and refine it based on their reactions.
The other approach is what I call the "Hail Mary" strategy. You make elaborate plans for a product, hire a team of engineers to develop it (people who do this tend to use the term "engineer" for hackers), and then find after a year that you've spent two million dollars to develop something no one wants. This was not uncommon during the Bubble, especially in companies run by business types, who thought of software development as something terrifying that therefore had to be carefully planned.
We never even considered that approach. As a Lisp hacker, I come from the tradition of rapid prototyping. I would not claim (at least, not here) that this is the right way to write every program, but it's certainly the right way to write software for a startup. In a startup, your initial plans are almost certain to be wrong in some way, and your first priority should be to figure out where. The only way to do that is to try implementing them.
Like most startups, we changed our plan on the fly. At first we expected our customers to be Web consultants. But it turned out they didn't like us, because our software was easy to use and we hosted the site. It would be too easy for clients to fire them. We also thought we'd be able to sign up a lot of catalog companies, because selling online was a natural extension of their existing business. But in 1996 that was a hard sell. The middle managers we talked to at catalog companies saw the Web not as an opportunity, but as something that meant more work for them.
We did get a few of the more adventurous catalog companies. Among them was Frederick's of Hollywood, which gave us valuable experience dealing with heavy loads on our servers. But most of our users were small, individual merchants who saw the Web as an opportunity to build a business. Some had retail stores, but many only existed online. And so we changed direction to focus on these users. Instead of concentrating on the features Web consultants and catalog companies would want, we worked to make the software easy to use.
I learned something valuable from that. It's worth trying very, very hard to make technology easy to use. Hackers are so used to computers that they have no idea how horrifying software seems to normal people. Stephen Hawking's editor told him that every equation he included in his book would cut sales in half. When you work on making technology easier to use, you're riding that curve up instead of down. A 10% improvement in ease of use doesn't just increase your sales 10%. It's more likely to double your sales.
How do you figure out what customers want? Watch them. One of the best places to do this was at trade shows. Trade shows didn't pay as a way of getting new customers, but they were worth it as market research. We didn't just give canned presentations at trade shows. We used to show people how to build real, working stores. Which meant we got to watch as they used our software, and talk to them about what they needed.
No matter what kind of startup you start, it will probably be a stretch for you, the founders, to understand what users want. The only kind of software you can build without studying users is the sort for which you are the typical user. But this is just the kind that tends to be open source: operating systems, programming languages, editors, and so on. So if you're developing technology for money, you're probably not going to be developing it for people like you. Indeed, you can use this as a way to generate ideas for startups: what do people who are not like you want from technology?
When most people think of startups, they think of companies like Apple or Google. Everyone knows these, because they're big consumer brands. But for every startup like that, there are twenty more that operate in niche markets or live quietly down in the infrastructure. So if you start a successful startup, odds are you'll start one of those.
Another way to say that is, if you try to start the kind of startup that has to be a big consumer brand, the odds against succeeding are steeper. The best odds are in niche markets. Since startups make money by offering people something better than they had before, the best opportunities are where things suck most. And it would be hard to find a place where things suck more than in corporate IT departments. You would not believe the amount of money companies spend on software, and the crap they get in return. This imbalance equals opportunity.
If you want ideas for startups, one of the most valuable things you could do is find a middle-sized non-technology company and spend a couple weeks just watching what they do with computers. Most good hackers have no more idea of the horrors perpetrated in these places than rich Americans do of what goes on in Brazilian slums.
Start by writing software for smaller companies, because it's easier to sell to them. It's worth so much to sell stuff to big companies that the people selling them the crap they currently use spend a lot of time and money to do it. And while you can outhack Oracle with one frontal lobe tied behind your back, you can't outsell an Oracle salesman. So if you want to win through better technology, aim at smaller customers. [4]
They're the more strategically valuable part of the market anyway. In technology, the low end always eats the high end. It's easier to make an inexpensive product more powerful than to make a powerful product cheaper. So the products that start as cheap, simple options tend to gradually grow more powerful till, like water rising in a room, they squash the "high-end" products against the ceiling. Sun did this to mainframes, and Intel is doing it to Sun. Microsoft Word did it to desktop publishing software like Interleaf and Framemaker. Mass-market digital cameras are doing it to the expensive models made for professionals. Avid did it to the manufacturers of specialized video editing systems, and now Apple is doing it to Avid. Henry Ford did it to the car makers that preceded him. If you build the simple, inexpensive option, you'll not only find it easier to sell at first, but you'll also be in the best position to conquer the rest of the market.
It's very dangerous to let anyone fly under you. If you have the cheapest, easiest product, you'll own the low end. And if you don't, you're in the crosshairs of whoever does.
Raising Money
To make all this happen, you're going to need money. Some startups have been self-funding-- Microsoft for example-- but most aren't. I think it's wise to take money from investors. To be self-funding, you have to start as a consulting company, and it's hard to switch from that to a product company.
Financially, a startup is like a pass/fail course. The way to get rich from a startup is to maximize the company's chances of succeeding, not to maximize the amount of stock you retain. So if you can trade stock for something that improves your odds, it's probably a smart move.
To most hackers, getting investors seems like a terrifying and mysterious process. Actually it's merely tedious. I'll try to give an outline of how it works.
The first thing you'll need is a few tens of thousands of dollars to pay your expenses while you develop a prototype. This is called seed capital. Because so little money is involved, raising seed capital is comparatively easy-- at least in the sense of getting a quick yes or no.
Usually you get seed money from individual rich people called "angels." Often they're people who themselves got rich from technology. At the seed stage, investors don't expect you to have an elaborate business plan. Most know that they're supposed to decide quickly. It's not unusual to get a check within a week based on a half-page agreement.
We started Viaweb with $10,000 of seed money from our friend Julian. But he gave us a lot more than money. He's a former CEO and also a corporate lawyer, so he gave us a lot of valuable advice about business, and also did all the legal work of getting us set up as a company. Plus he introduced us to one of the two angel investors who supplied our next round of funding.
Some angels, especially those with technology backgrounds, may be satisfied with a demo and a verbal description of what you plan to do. But many will want a copy of your business plan, if only to remind themselves what they invested in.
Our angels asked for one, and looking back, I'm amazed how much worry it caused me. "Business plan" has that word "business" in it, so I figured it had to be something I'd have to read a book about business plans to write. Well, it doesn't. At this stage, all most investors expect is a brief description of what you plan to do and how you're going to make money from it, and the resumes of the founders. If you just sit down and write out what you've been saying to one another, that should be fine. It shouldn't take more than a couple hours, and you'll probably find that writing it all down gives you more ideas about what to do.
For the angel to have someone to make the check out to, you're going to have to have some kind of company. Merely incorporating yourselves isn't hard. The problem is, for the company to exist, you have to decide who the founders are, and how much stock they each have. If there are two founders with the same qualifications who are both equally committed to the business, that's easy. But if you have a number of people who are expected to contribute in varying degrees, arranging the proportions of stock can be hard. And once you've done it, it tends to be set in stone.
I have no tricks for dealing with this problem. All I can say is, try hard to do it right. I do have a rule of thumb for recognizing when you have, though. When everyone feels they're getting a slightly bad deal, that they're doing more than they should for the amount of stock they have, the stock is optimally apportioned.
There is more to setting up a company than incorporating it, of course: insurance, business license, unemployment compensation, various things with the IRS. I'm not even sure what the list is, because we, ah, skipped all that. When we got real funding near the end of 1996, we hired a great CFO, who fixed everything retroactively. It turns out that no one comes and arrests you if you don't do everything you're supposed to when starting a company. And a good thing too, or a lot of startups would never get started. [5]
It can be dangerous to delay turning yourself into a company, because one or more of the founders might decide to split off and start another company doing the same thing. This does happen. So when you set up the company, as well as as apportioning the stock, you should get all the founders to sign something agreeing that everyone's ideas belong to this company, and that this company is going to be everyone's only job.
[If this were a movie, ominous music would begin here.]
While you're at it, you should ask what else they've signed. One of the worst things that can happen to a startup is to run into intellectual property problems. We did, and it came closer to killing us than any competitor ever did.
As we were in the middle of getting bought, we discovered that one of our people had, early on, been bound by an agreement that said all his ideas belonged to the giant company that was paying for him to go to grad school. In theory, that could have meant someone else owned big chunks of our software. So the acquisition came to a screeching halt while we tried to sort this out. The problem was, since we'd been about to be acquired, we'd allowed ourselves to run low on cash. Now we needed to raise more to keep going. But it's hard to raise money with an IP cloud over your head, because investors can't judge how serious it is.
Our existing investors, knowing that we needed money and had nowhere else to get it, at this point attempted certain gambits which I will not describe in detail, except to remind readers that the word "angel" is a metaphor. The founders thereupon proposed to walk away from the company, after giving the investors a brief tutorial on how to administer the servers themselves. And while this was happening, the acquirers used the delay as an excuse to welch on the deal.
Miraculously it all turned out ok. The investors backed down; we did another round of funding at a reasonable valuation; the giant company finally gave us a piece of paper saying they didn't own our software; and six months later we were bought by Yahoo for much more than the earlier acquirer had agreed to pay. So we were happy in the end, though the experience probably took several years off my life.
Don't do what we did. Before you consummate a startup, ask everyone about their previous IP history.
Once you've got a company set up, it may seem presumptuous to go knocking on the doors of rich people and asking them to invest tens of thousands of dollars in something that is really just a bunch of guys with some ideas. But when you look at it from the rich people's point of view, the picture is more encouraging. Most rich people are looking for good investments. If you really think you have a chance of succeeding, you're doing them a favor by letting them invest. Mixed with any annoyance they might feel about being approached will be the thought: are these guys the next Google?
Usually angels are financially equivalent to founders. They get the same kind of stock and get diluted the same amount in future rounds. How much stock should they get? That depends on how ambitious you feel. When you offer x percent of your company for y dollars, you're implicitly claiming a certain value for the whole company. Venture investments are usually described in terms of that number. If you give an investor new shares equal to 5% of those already outstanding in return for $100,000, then you've done the deal at a pre-money valuation of $2 million.
How do you decide what the value of the company should be? There is no rational way. At this stage the company is just a bet. I didn't realize that when we were raising money. Julian thought we ought to value the company at several million dollars. I thought it was preposterous to claim that a couple thousand lines of code, which was all we had at the time, were worth several million dollars. Eventually we settled on one millon, because Julian said no one would invest in a company with a valuation any lower. [6]
What I didn't grasp at the time was that the valuation wasn't just the value of the code we'd written so far. It was also the value of our ideas, which turned out to be right, and of all the future work we'd do, which turned out to be a lot.
The next round of funding is the one in which you might deal with actual venture capital firms. But don't wait till you've burned through your last round of funding to start approaching them. VCs are slow to make up their minds. They can take months. You don't want to be running out of money while you're trying to negotiate with them.
Getting money from an actual VC firm is a bigger deal than getting money from angels. The amounts of money involved are larger, millions usually. So the deals take longer, dilute you more, and impose more onerous conditions.
Sometimes the VCs want to install a new CEO of their own choosing. Usually the claim is that you need someone mature and experienced, with a business background. Maybe in some cases this is true. And yet Bill Gates was young and inexperienced and had no business background, and he seems to have done ok. Steve Jobs got booted out of his own company by someone mature and experienced, with a business background, who then proceeded to ruin the company. So I think people who are mature and experienced, with a business background, may be overrated. We used to call these guys "newscasters," because they had neat hair and spoke in deep, confident voices, and generally didn't know much more than they read on the teleprompter.
We talked to a number of VCs, but eventually we ended up financing our startup entirely with angel money. The main reason was that we feared a brand-name VC firm would stick us with a newscaster as part of the deal. That might have been ok if he was content to limit himself to talking to the press, but what if he wanted to have a say in running the company? That would have led to disaster, because our software was so complex. We were a company whose whole m.o. was to win through better technology. The strategic decisions were mostly decisions about technology, and we didn't need any help with those.
This was also one reason we didn't go public. Back in 1998 our CFO tried to talk me into it. In those days you could go public as a dogfood portal, so as a company with a real product and real revenues, we might have done well. But I feared it would have meant taking on a newscaster-- someone who, as they say, "can talk Wall Street's language."
I'm happy to see Google is bucking that trend. They didn't talk Wall Street's language when they did their IPO, and Wall Street didn't buy. And now Wall Street is collectively kicking itself. They'll pay attention next time. Wall Street learns new languages fast when money is involved.
You have more leverage negotiating with VCs than you realize. The reason is other VCs. I know a number of VCs now, and when you talk to them you realize that it's a seller's market. Even now there is too much money chasing too few good deals.
VCs form a pyramid. At the top are famous ones like Sequoia and Kleiner Perkins, but beneath those are a huge number you've never heard of. What they all have in common is that a dollar from them is worth one dollar. Most VCs will tell you that they don't just provide money, but connections and advice. If you're talking to Vinod Khosla or John Doerr or Mike Moritz, this is true. But such advice and connections can come very expensive. And as you go down the food chain the VCs get rapidly dumber. A few steps down from the top you're basically talking to bankers who've picked up a few new vocabulary words from reading Wired. (Does your product use XML?) So I'd advise you to be skeptical about claims of experience and connections. Basically, a VC is a source of money. I'd be inclined to go with whoever offered the most money the soonest with the least strings attached.
You may wonder how much to tell VCs. And you should, because some of them may one day be funding your competitors. I think the best plan is not to be overtly secretive, but not to tell them everything either. After all, as most VCs say, they're more interested in the people than the ideas. The main reason they want to talk about your idea is to judge you, not the idea. So as long as you seem like you know what you're doing, you can probably keep a few things back from them. [7]
Talk to as many VCs as you can, even if you don't want their money, because a) they may be on the board of someone who will buy you, and b) if you seem impressive, they'll be discouraged from investing in your competitors. The most efficient way to reach VCs, especially if you only want them to know about you and don't want their money, is at the conferences that are occasionally organized for startups to present to them.
Not Spending It
When and if you get an infusion of real money from investors, what should you do with it? Not spend it, that's what. In nearly every startup that fails, the proximate cause is running out of money. Usually there is something deeper wrong. But even a proximate cause of death is worth trying hard to avoid.
During the Bubble many startups tried to "get big fast." Ideally this meant getting a lot of customers fast. But it was easy for the meaning to slide over into hiring a lot of people fast.
Of the two versions, the one where you get a lot of customers fast is of course preferable. But even that may be overrated. The idea is to get there first and get all the users, leaving none for competitors. But I think in most businesses the advantages of being first to market are not so overwhelmingly great. Google is again a case in point. When they appeared it seemed as if search was a mature market, dominated by big players who'd spent millions to build their brands: Yahoo, Lycos, Excite, Infoseek, Altavista, Inktomi. Surely 1998 was a little late to arrive at the party.
But as the founders of Google knew, brand is worth next to nothing in the search business. You can come along at any point and make something better, and users will gradually seep over to you. As if to emphasize the point, Google never did any advertising. They're like dealers; they sell the stuff, but they know better than to use it themselves.
The competitors Google buried would have done better to spend those millions improving their software. Future startups should learn from that mistake. Unless you're in a market where products are as undifferentiated as cigarettes or vodka or laundry detergent, spending a lot on brand advertising is a sign of breakage. And few if any Web businesses are so undifferentiated. The dating sites are running big ad campaigns right now, which is all the more evidence they're ripe for the picking. (Fee, fie, fo, fum, I smell a company run by marketing guys.)
We were compelled by circumstances to grow slowly, and in retrospect it was a good thing. The founders all learned to do every job in the company. As well as writing software, I had to do sales and customer support. At sales I was not very good. I was persistent, but I didn't have the smoothness of a good salesman. My message to potential customers was: you'd be stupid not to sell online, and if you sell online you'd be stupid to use anyone else's software. Both statements were true, but that's not the way to convince people.
I was great at customer support though. Imagine talking to a customer support person who not only knew everything about the product, but would apologize abjectly if there was a bug, and then fix it immediately, while you were on the phone with them. Customers loved us. And we loved them, because when you're growing slow by word of mouth, your first batch of users are the ones who were smart enough to find you by themselves. There is nothing more valuable, in the early stages of a startup, than smart users. If you listen to them, they'll tell you exactly how to make a winning product. And not only will they give you this advice for free, they'll pay you.
We officially launched in early 1996. By the end of that year we had about 70 users. Since this was the era of "get big fast," I worried about how small and obscure we were. But in fact we were doing exactly the right thing. Once you get big (in users or employees) it gets hard to change your product. That year was effectively a laboratory for improving our software. By the end of it, we were so far ahead of our competitors that they never had a hope of catching up. And since all the hackers had spent many hours talking to users, we understood online commerce way better than anyone else.
That's the key to success as a startup. There is nothing more important than understanding your business. You might think that anyone in a business must, ex officio, understand it. Far from it. Google's secret weapon was simply that they understood search. I was working for Yahoo when Google appeared, and Yahoo didn't understand search. I know because I once tried to convince the powers that be that we had to make search better, and I got in reply what was then the party line about it: that Yahoo was no longer a mere "search engine." Search was now only a small percentage of our page views, less than one month's growth, and now that we were established as a "media company," or "portal," or whatever we were, search could safely be allowed to wither and drop off, like an umbilical cord.
Well, a small fraction of page views they may be, but they are an important fraction, because they are the page views that Web sessions start with. I think Yahoo gets that now.
Google understands a few other things most Web companies still don't. The most important is that you should put users before advertisers, even though the advertisers are paying and users aren't. One of my favorite bumper stickers reads "if the people lead, the leaders will follow." Paraphrased for the Web, this becomes "get all the users, and the advertisers will follow." More generally, design your product to please users first, and then think about how to make money from it. If you don't put users first, you leave a gap for competitors who do.
To make something users love, you have to understand them. And the bigger you are, the harder that is. So I say "get big slow." The slower you burn through your funding, the more time you have to learn.
The other reason to spend money slowly is to encourage a culture of cheapness. That's something Yahoo did understand. David Filo's title was "Chief Yahoo," but he was proud that his unofficial title was "Cheap Yahoo." Soon after we arrived at Yahoo, we got an email from Filo, who had been crawling around our directory hierarchy, asking if it was really necessary to store so much of our data on expensive RAID drives. I was impressed by that. Yahoo's market cap then was already in the billions, and they were still worrying about wasting a few gigs of disk space.
When you get a couple million dollars from a VC firm, you tend to feel rich. It's important to realize you're not. A rich company is one with large revenues. This money isn't revenue. It's money investors have given you in the hope you'll be able to generate revenues. So despite those millions in the bank, you're still poor.
For most startups the model should be grad student, not law firm. Aim for cool and cheap, not expensive and impressive. For us the test of whether a startup understood this was whether they had Aeron chairs. The Aeron came out during the Bubble and was very popular with startups. Especially the type, all too common then, that was like a bunch of kids playing house with money supplied by VCs. We had office chairs so cheap that the arms all fell off. This was slightly embarrassing at the time, but in retrospect the grad-studenty atmosphere of our office was another of those things we did right without knowing it.
Our offices were in a wooden triple-decker in Harvard Square. It had been an apartment until about the 1970s, and there was still a claw-footed bathtub in the bathroom. It must once have been inhabited by someone fairly eccentric, because a lot of the chinks in the walls were stuffed with aluminum foil, as if to protect against cosmic rays. When eminent visitors came to see us, we were a bit sheepish about the low production values. But in fact that place was the perfect space for a startup. We felt like our role was to be impudent underdogs instead of corporate stuffed shirts, and that is exactly the spirit you want.
An apartment is also the right kind of place for developing software. Cube farms suck for that, as you've probably discovered if you've tried it. Ever notice how much easier it is to hack at home than at work? So why not make work more like home?
When you're looking for space for a startup, don't feel that it has to look professional. Professional means doing good work, not elevators and glass walls. I'd advise most startups to avoid corporate space at first and just rent an apartment. You want to live at the office in a startup, so why not have a place designed to be lived in as your office?
Besides being cheaper and better to work in, apartments tend to be in better locations than office buildings. And for a startup location is very important. The key to productivity is for people to come back to work after dinner. Those hours after the phone stops ringing are by far the best for getting work done. Great things happen when a group of employees go out to dinner together, talk over ideas, and then come back to their offices to implement them. So you want to be in a place where there are a lot of restaurants around, not some dreary office park that's a wasteland after 6:00 PM. Once a company shifts over into the model where everyone drives home to the suburbs for dinner, however late, you've lost something extraordinarily valuable. God help you if you actually start in that mode.
If I were going to start a startup today, there are only three places I'd consider doing it: on the Red Line near Central, Harvard, or Davis Squares (Kendall is too sterile); in Palo Alto on University or California Aves; and in Berkeley immediately north or south of campus. These are the only places I know that have the right kind of vibe.
The most important way to not spend money is by not hiring people. I may be an extremist, but I think hiring people is the worst thing a company can do. To start with, people are a recurring expense, which is the worst kind. They also tend to cause you to grow out of your space, and perhaps even move to the sort of uncool office building that will make your software worse. But worst of all, they slow you down: instead of sticking your head in someone's office and checking out an idea with them, eight people have to have a meeting about it. So the fewer people you can hire, the better.
During the Bubble a lot of startups had the opposite policy. They wanted to get "staffed up" as soon as possible, as if you couldn't get anything done unless there was someone with the corresponding job title. That's big company thinking. Don't hire people to fill the gaps in some a priori org chart. The only reason to hire someone is to do something you'd like to do but can't.
If hiring unnecessary people is expensive and slows you down, why do nearly all companies do it? I think the main reason is that people like the idea of having a lot of people working for them. This weakness often extends right up to the CEO. If you ever end up running a company, you'll find the most common question people ask is how many employees you have. This is their way of weighing you. It's not just random people who ask this; even reporters do. And they're going to be a lot more impressed if the answer is a thousand than if it's ten.
This is ridiculous, really. If two companies have the same revenues, it's the one with fewer employees that's more impressive. When people used to ask me how many people our startup had, and I answered "twenty," I could see them thinking that we didn't count for much. I used to want to add "but our main competitor, whose ass we regularly kick, has a hundred and forty, so can we have credit for the larger of the two numbers?"
As with office space, the number of your employees is a choice between seeming impressive, and being impressive. Any of you who were nerds in high school know about this choice. Keep doing it when you start a company.
Should You?
But should you start a company? Are you the right sort of person to do it? If you are, is it worth it?
More people are the right sort of person to start a startup than realize it. That's the main reason I wrote this. There could be ten times more startups than there are, and that would probably be a good thing.
I was, I now realize, exactly the right sort of person to start a startup. But the idea terrified me at first. I was forced into it because I was a Lisp hacker. The company I'd been consulting for seemed to be running into trouble, and there were not a lot of other companies using Lisp. Since I couldn't bear the thought of programming in another language (this was 1995, remember, when "another language" meant C++) the only option seemed to be to start a new company using Lisp.
I realize this sounds far-fetched, but if you're a Lisp hacker you'll know what I mean. And if the idea of starting a startup frightened me so much that I only did it out of necessity, there must be a lot of people who would be good at it but who are too intimidated to try.
So who should start a startup? Someone who is a good hacker, between about 23 and 38, and who wants to solve the money problem in one shot instead of getting paid gradually over a conventional working life.
I can't say precisely what a good hacker is. At a first rate university this might include the top half of computer science majors. Though of course you don't have to be a CS major to be a hacker; I was a philosophy major in college.
It's hard to tell whether you're a good hacker, especially when you're young. Fortunately the process of starting startups tends to select them automatically. What drives people to start startups is (or should be) looking at existing technology and thinking, don't these guys realize they should be doing x, y, and z? And that's also a sign that one is a good hacker.
I put the lower bound at 23 not because there's something that doesn't happen to your brain till then, but because you need to see what it's like in an existing business before you try running your own. The business doesn't have to be a startup. I spent a year working for a software company to pay off my college loans. It was the worst year of my adult life, but I learned, without realizing it at the time, a lot of valuable lessons about the software business. In this case they were mostly negative lessons: don't have a lot of meetings; don't have chunks of code that multiple people own; don't have a sales guy running the company; don't make a high-end product; don't let your code get too big; don't leave finding bugs to QA people; don't go too long between releases; don't isolate developers from users; don't move from Cambridge to Route 128; and so on. [8] But negative lessons are just as valuable as positive ones. Perhaps even more valuable: it's hard to repeat a brilliant performance, but it's straightforward to avoid errors. [9]
The other reason it's hard to start a company before 23 is that people won't take you seriously. VCs won't trust you, and will try to reduce you to a mascot as a condition of funding. Customers will worry you're going to flake out and leave them stranded. Even you yourself, unless you're very unusual, will feel your age to some degree; you'll find it awkward to be the boss of someone much older than you, and if you're 21, hiring only people younger rather limits your options.
Some people could probably start a company at 18 if they wanted to. Bill Gates was 19 when he and Paul Allen started Microsoft. (Paul Allen was 22, though, and that probably made a difference.) So if you're thinking, I don't care what he says, I'm going to start a company now, you may be the sort of person who could get away with it.
The other cutoff, 38, has a lot more play in it. One reason I put it there is that I don't think many people have the physical stamina much past that age. I used to work till 2:00 or 3:00 AM every night, seven days a week. I don't know if I could do that now.
Also, startups are a big risk financially. If you try something that blows up and leaves you broke at 26, big deal; a lot of 26 year olds are broke. By 38 you can't take so many risks-- especially if you have kids.
My final test may be the most restrictive. Do you actually want to start a startup? What it amounts to, economically, is compressing your working life into the smallest possible space. Instead of working at an ordinary rate for 40 years, you work like hell for four. And maybe end up with nothing-- though in that case it probably won't take four years.
During this time you'll do little but work, because when you're not working, your competitors will be. My only leisure activities were running, which I needed to do to keep working anyway, and about fifteen minutes of reading a night. I had a girlfriend for a total of two months during that three year period. Every couple weeks I would take a few hours off to visit a used bookshop or go to a friend's house for dinner. I went to visit my family twice. Otherwise I just worked.
Working was often fun, because the people I worked with were some of my best friends. Sometimes it was even technically interesting. But only about 10% of the time. The best I can say for the other 90% is that some of it is funnier in hindsight than it seemed then. Like the time the power went off in Cambridge for about six hours, and we made the mistake of trying to start a gasoline powered generator inside our offices. I won't try that again.
I don't think the amount of bullshit you have to deal with in a startup is more than you'd endure in an ordinary working life. It's probably less, in fact; it just seems like a lot because it's compressed into a short period. So mainly what a startup buys you is time. That's the way to think about it if you're trying to decide whether to start one. If you're the sort of person who would like to solve the money problem once and for all instead of working for a salary for 40 years, then a startup makes sense.
For a lot of people the conflict is between startups and graduate school. Grad students are just the age, and just the sort of people, to start software startups. You may worry that if you do you'll blow your chances of an academic career. But it's possible to be part of a startup and stay in grad school, especially at first. Two of our three original hackers were in grad school the whole time, and both got their degrees. There are few sources of energy so powerful as a procrastinating grad student.
If you do have to leave grad school, in the worst case it won't be for too long. If a startup fails, it will probably fail quickly enough that you can return to academic life. And if it succeeds, you may find you no longer have such a burning desire to be an assistant professor.
If you want to do it, do it. Starting a startup is not the great mystery it seems from outside. It's not something you have to know about "business" to do. Build something users love, and spend less than you make. How hard is that?
Notes
[1] Google's revenues are about two billion a year, but half comes from ads on other sites.
[2] One advantage startups have over established companies is that there are no discrimination laws about starting businesses. For example, I would be reluctant to start a startup with a woman who had small children, or was likely to have them soon. But you're not allowed to ask prospective employees if they plan to have kids soon. Believe it or not, under current US law, you're not even allowed to discriminate on the basis of intelligence. Whereas when you're starting a company, you can discriminate on any basis you want about who you start it with.
[3] Learning to hack is a lot cheaper than business school, because you can do it mostly on your own. For the price of a Linux box, a copy of K&R, and a few hours of advice from your neighbor's fifteen year old son, you'll be well on your way.
[4] Corollary: Avoid starting a startup to sell things to the biggest company of all, the government. Yes, there are lots of opportunities to sell them technology. But let someone else start those startups.
[5] A friend who started a company in Germany told me they do care about the paperwork there, and that there's more of it. Which helps explain why there are not more startups in Germany.
[6] At the seed stage our valuation was in principle $100,000, because Julian got 10% of the company. But this is a very misleading number, because the money was the least important of the things Julian gave us.
[7] The same goes for companies that seem to want to acquire you. There will be a few that are only pretending to in order to pick your brains. But you can never tell for sure which these are, so the best approach is to seem entirely open, but to fail to mention a few critical technical secrets.
[8] I was as bad an employee as this place was a company. I apologize to anyone who had to work with me there.
[9] You could probably write a book about how to succeed in business by doing everything in exactly the opposite way from the DMV.
Thanks to Trevor Blackwell, Sarah Harlin, Jessica Livingston, and Robert Morris for reading drafts of this essay, and to Steve Melendez and Gregory Price for inviting me to speak.
Subscribe to:
Posts (Atom)
