By James Santagata
Principal Consultant, SiliconEdge As you know from both our training and from this blog, we believe that problems normally fall into just three general categories. They are either: 1. Political in nature. 2. Technical in nature. 3. Financial in nature. But when you really boil it all down, it almost always comes down to something political -- which is the human element -- this is not good nor bad but it is a reality that we must all understand to perform at our best while anticipating, mitigating or sidestepping potentially messy, costly or dangerous situations. Further, it our contention that once you recognize these politics (which is the human element) and all that it brings, you are greatly positioned to uncover major opportunities and subsequently monetize them. This affects everything from creativity, innovation, employment engage, talent acquisition, develop, deployment and management and so on. From this, it was with great interest that I came across this little gem by Mark Suster which on the surface appears to be about Founder and Management Infighting but actually is about office politics and organizational power and more specifically the human element. The Perils of Founder Fighting Posted on January 4, 2014 by Mark Suster Yesterday I wrote a post about “the politics of startups” in which I asserted that all companies have politics, which in its purest sense is just about understanding human psychology. ... I think as a tech industry we have bred a culture that places more emphasis on product excellence than managing human behavior. Of course it makes no sense to have great people management and a crappy product. But I would posit that in order to sustainably build great products in an intensely competitive industry with skills shortages – people management is one of the most critical soft skills organizations need. ... At the risk of sounding like a broken record, it’s why I believe executive coaches are so important for startups who have the financial resources to afford them.
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By James Santagata
Principal Consultant, SiliconEdge Select, develop, deploy & manage your people right & you can have the advantages of a high-tech economic center right at home. Simply hearing the words Silicon Valley can evoke an image of cutting-edge innovation advanced by an army of daring, if not slightly mad, entrepreneurs who feverishly seek to develop the world’s next technological marvels. But what exactly makes Silicon Valley so successful and, more importantly, can it be replicated? China has Zhong Guan Cun, India has Bangalore. Where is Japan's “Silicon Valley”? Japan, the third largest economy in the world, still lacks any type of large, formal tech epicenter like the one in California. Does this even matter for business success in the 21st century? Many people, including Silicon Valley industry insiders, will immediately and perhaps misguidedly say yes. A more reasoned and introspective analysis, however, demonstrates that this type of success is not about location but more importantly about talent. And even more specifically: it is not just about talent, but about how that talent is selected, developed, deployed and managed. To create a Silicon Valley atmosphere, a company needs employees who possess these three skills: 1. Business acumen to identify huge opportunities; 2. Leadership to seize those opportunities; and 3. The ability to select, develop, deploy and manage talent to quickly exploit these opportunities. Once we understand this, what then are the core skills that we should be focusing on when developing talent that can rise to and perform at the level of Silicon Valley’s? If we look closely, it’s clear that this boils down to five core skills, all of which can be readily developed in our existing employees: 1. Leadership: The ability to take risks, to develop a vision and to lead others to the successful path. This is not just for senior leaders, but for all key players so that they can learn how to lead across all levels: from senior management to their peers or to those below them. And it includes the ability to reframe what are commonly perceived as failures as mistakes and missteps with important lessons to learn. Steve Jobs had success in a variety of diverse areas and products, from the iMac, iPod, iPhone, iTunes and Pixar. This wasn’t accidental nor was it surprising, as each of these areas was ripe for a true leader to identify and then pluck the low hanging, yet massive fruit. His move into iTunes alone was pure leadership as he had to overcome the lawsuit Apple had lost to the Beatles record label prohibiting engagement in music-related businesses. His success with iPod was further made possible by Sony’s reluctance to move its Walkman franchise forward into developing solid state devices including technologies such as microprocessor chip, crystalline semiconductors and RAM. 2. Communication: The ability to clearly communicate through a variety of media ranging from one-on-one and group meetings to formal reports and presentations to business emails and video conferences. Very often, the best ideas as well as the pulse of the market comes from those closest to the customer – support engineers, sales and customer service. And yet, most often this information does not get captured and clearly communicated back to product managers and the executive staff (see also Ogushi Matrix Communication lines). 3. Influence & Persuasion: The ability to get others to want to support a project or, if they won’t actively support it, to at least make sure that they don’t actively resist it. Previously we mentioned the need to capture and clearly communicate opportunities and obstacles a company may face or is facing. Yet, there are plenty of instances where even a clearly communicated issue or opportunity falls on deaf ears, such as Kodak’s need to move from film-based to digital cameras. There are many reasons for resisting opportunities or ignoring warnings about obstacles, including that this information or proposed shift in business may benefit the company but specifically expose or harm one person’s or department’s operations, ego, status or bonuses. For this reason, clear communication is only a starting point. Beyond this, influence and persuasion must be utilized as well. 4. Negotiation: The ability to negotiate not only externally but, often more importantly, internally. This is critical during situations such as when a green light is needed for a feasibility study, to request funds and resources for product development or to get approval and buy in for the launch of a product that will potentially cannibalize an existing cash cow product. Influence and persuasion can only take us so far, and at some point it can be expected that we will need to negotiate. This requires the ability to craft a win-win solution as well as to ensure that the other party sees it that way. It is not only possible but extremely common for a win-win to be misperceived and subsequently blocked, simply because the other person has become psychologically opposed resulting in a classic “cut your nose off to spite your face” scenario. In these scenarios everyone loses including employees, managers, shareholders and customers. 5. Assertiveness: The ability and confidence to speak up and share opinions or ideas or to challenge another’s opinions or ideas in a professionally affirmative manner. Assertiveness (often confused with aggressiveness) is a critical skill that is especially important for those who may have key insights and knowledge, such as engineers or service people, but not the personality or interest in speaking out nor the title or standing within the company. Instilling this skill in a firm’s employees can unleash great productivity and opportunity while also identifying problems or obstacles before they become dangerous or expensive. By developing these 5 core skills sets and Valley Values in your existing talent you will ensure that your employees’ inherent creativity and innovative nature do not go to waste and that the people with these ideas have the tools and skills needed to bring this forth to their peers and superiors and ultimately to the market place. By James Santagata Principal Consultant, SiliconEdge Ask the average person to think of Japan and then to share with you the first thing that pops into their mind. I can guarantee you that they'll almost certainly read back from one or more of these several powerful and well-established myths and memes: 1. High-Tech Japan: A High-tech and Cyberpunk culture and society comprised of very polite albeit non-thinking and undifferentiated robots and drones all clothed similarly in their business or school uniforms and all marching off to the office or to school. Visitors find themselves amazed by the high-tech, 20-function paperless Toto toilets, the jaw-dropping variety of merchandise dispensed by ubiquitous vending machines, the automated, elevator-driven parking structures, auto-opening doors, sensor-controlled escalators and so on. 2. Old Japan: The nostalgic view of Japan found in Tom Cruise's "The Last Samurai" and other movies before which focuses on the picturesque Japan. The culture and the style. The polite, disciplined demeanor of the people. The attention to detail and quality. The lacquer ware artisan, the sword craftsman. Mount Fuji (富士山), Kyoto, Nara and Kamakura. Geisha. Sumo. Onsens. Samurai. Ninja. Swords. Shamisen. Kimono. 3. Modern Japan / Culture Japan: The exporting of top talent in baseball as well as having its players picked up by European soccer clubs. The deep stable of world-class swimmers, gymnasts, wrestlers and figure skaters. Beyond this, the delicious, healthy cuisine of Japan: sushi, sashima and various other staple dishes of Japan. Karaoke, manga, anime, video games. Modern Japan is about talent and culture. 4. WWII Japan: Banzai human waves attacks, Kamikaze pilots, rapacious invasions of civilian cities along with soldiers and civilians who would rather toss themselves off the cliffs at Saipan than surrender. 5. Basket-case Japan: 20 years of economic malaise, a deflating economy, aging population, declining birthrate, a broken self-image and the inability to create or innovate as China continues to eclipse Japan in terms of GDP all while the world waits for Japan to sink into economic obscurity and irrelevance. I've discussed and hopefully skewered a few of these myths and memes in detail, in particular: 1. Japan May Be Able To Compete Globally But Not Yet 2. Can Japan Compete? You Betcha And Here's Why 3. Japan's Problem: Severe Lack Of Leadership Not A Lack Of Innovation Or Creativity We've also discussed these topics in detail (articles and podcasts) over at FirstPoint Japan. The FirstPoint Japan Expert Interview Series may be of interest to you. The New York Times' Martin Fackler (see below) wrote a nice piece on some of the startup activity happening in Japan, however, I think it still misses some of the key points of where Japan has been, where it is, and what it needs. In a nutshell, over the last 30 years the Japanese economy has been held captive by the power wielded by ossified electronic giants such as Panasonic and others, as well as the very real monetary, career and social risk that entrepreneurs face in Japan which is only compounded by the huge amount of regulatory capture found in Japan. Surely Japan has had world class entrepreneurs before, such as Akio Morita who founded Sony, Soichiro Honda who founded Honda,Konosuke Matsushita who founded Panasonic (formerly known as Matsushita) and Kiichiro Toyoda who took his families Toyoda Loom Works and transformed them into an automotive powerhouse called Toyota. The point remains, though, that if Morita were still alive today, he wouldn't recognize Sony as it stands today, and worse, the suits currently running Sony would never, ever hire a maverick entrepreneur and genius like Morita. Akio Morita was Japan's Steve Jobs, except that he was Steve Jobs, before Steve Jobs even got out of his diapers. How aggressive and prolific was Akio Morita? Well, in terms of fights. he didn't not shy away, not only co-penning the somewhat acerbic book "The Japan That Can Say No: Why Japan Will Be First Among Equals" (and see Amazon) but also refusing to bow to arm-twisting by the US content industry that wanted to ban his Betamax recorder. Morita fought this case all the way to the US Supreme Court (Sony Corp. of America v. Universal City Studios, Inc) and won!, making this not only a victory for Morita and Sony but for all other electronic manufacturers after them and especially making this a victory for us lowly consumers. If you look closely at Japan, you'll find that it is usually during absolute or relative social or economic chaos that such dynamic entrepreneurs have risen. Mind you, this is not because "necessity is the mother of all invention" but because the chaos at had had broken or cracked the social conformity or regulatory capture just enough for a few green shoots to sneak through. These green shoots, these entrepreneurs and creators and makers, the were always there. They always had the ability to perform. But they were choked out. By a combination of social conformity and most importantly rent-seeking incumbents. In recent years, perhaps over the last three or four years, Japanese entrepreneurs and startups as well as entrepreneurs and startups in general are getting media attention (thanks in part to the visibility of Steve Jobs / Apple / iPhone and Mark Zuckerberg / Facebook among others). And with that, it has slowly become "okay" to be an entrepreneur again while at the same time the immediate financial and social risks are greatly reduced and even longer term social and career risks are lower. In other words, currently, huge momentum is building in Japan, it's under surface and it's not just Japanese entrepreneurs but foreigners as well, many of whom have relocated in Japan from tech hot spots in the US including Silicon Valley, New York and everywhere in between. These startups are critical to put further pressure on the ossified Japanese corporations to either compete and streamline their business OR die a quick, brutal death and then be composted, releasing and recycling their talent and know-how back into the pool of Japanese labor, intellectual property and financial pool. It's exactly that intra-industry competitiveness and dynamism that is a hallmark of Silicon Valley's constant success in the world technology markets (and post-tech as well) and conversely it was exactly that lack of intra-industry competitiveness and dynamism that was the death knell for Detroit's once vaunted auto industry. Japanese Start-Ups Channel Samurai Spirit
By Martin Fackler Published: December 25, 2013 TOKYO — The 20-somethings in jeans sipping espresso and tapping on laptops at this Tokyo business incubator would look more at home in Silicon Valley than in Japan, where for years the surest signs of success were the gray suits of its corporate salarymen. But for those hoping the nation’s latest economic plan will drag Japan from its long malaise, the young men and women here at Samurai Startup Island represent a crucial component: a revival of entrepreneurship. ... The signs of that comeback are still new, and tentative enough that the statistics on start-ups and initial public offerings have not caught up. But analysts and investors report that hundreds of new Internet and technology-related companies have sprung up in the last two to three years, creating an ecosystem of incubators like Samurai Startup Island and so-called accelerator new venture investment funds, which invest in early-state start-ups in hopes of cashing in. ... For years, sagging entrepreneurial spirit has been cited as a major reason for Japan’s inability to save itself from a devastating deflationary spiral. The nation that produced Sony, Toyota and Honda has created few successors. ... When he started investing in new companies six years ago, Mr. Sakakibara was lucky if two would-be entrepreneurs approached him in a week to seek financing. Now he gets two such queries a day, he said. He and others closely watching start-ups attribute the increase in interest to cultural shifts that have slowly chipped away at Japan’s famously insular culture. Having grown up immersed in an online world that stretches beyond national borders, young Japanese appear more willing to draw inspiration from foreign role models like Steve Jobs, the founder of Apple. And having seen Sony cede market share to South Korea’s Samsung, many no longer share their salarymen fathers’ belief in the permanence of established corporations or lifetime jobs. “In a world where everything is risky, it’s better to be your own boss, in charge of your own destiny,” said Yoshinori Fukushima, 25, whose year-old Internet company has grown to 14 employees. ... Some warn that Japan has a way to go to become a hotbed of break-the-boundaries venture behavior. Noriyuki Takahashi, who specializes in entrepreneurship at Tokyo’s Musashi University, pointed to comparative global surveys that place Japan at the bottom among leading Western and Asian economies in social acceptance of entrepreneurs. ... By James Santagata Principal Consultant, Silicon Edge I've had in interest in Korea for quite a long time both in cultural and business terms so you can imagine how quickly I was drawn to the article entitled, "Can Korea’s new culture of business creativity rival Silicon Valley?". It's fascinating to me for several reasons. First, I read a book on this subject back around 1990 entitled, "Is Korea the Next Japan?: Understanding the Structure, Strategy and Tactics of America's Next Competition" by T.W. Kang. Now, T.W., Kang while not a famous author by any stretch of the imagination, is extremely insightful in his writing and should be famous as he writes from a unique perspective -- a Korean raised in Japan and educated in the US (BSEE MIT / MBA Harvard). He is trilingual and as an "outsider" to all three cultures slices and dices these cultures and explains them like a boss. Apparently T.W. Kang is now Managing Director of Global Synergy Associates, a management consulting firm based in Tokyo and prior to this he was on the advisory board of advisors of a number of high tech ventures including GEM Services, Inc., Synaptics, Inc, and SiliconWave, Inc. and was a General Manager for Intel Japan. Second, around 1995, when I was working at Applied Materials (AMAT), the Japanese were still dominating chip production, primarily memory chips, and yet the Koreans were coming on fast. Not only were they pushing their R&D forward extremely aggressively, but they began mimicking and borrowing Japanese chip production techniques and technologies. For instance, on the semiconductor fabrication tools that Japanese firms would buy from Applied Materials they often had a certain configuration, in both the components they chose such as the Mass Flow Controllers (MFCs) but also in the gas panel designs -- and this "signature" look was across Japanese chip makers. And yet, by 1996, if you took a Japanese process engineer onto the floor of AMAT's manufacturing facility and showed them the gas panel of a Korean chip maker (covering up any signage or badges), the Japanese process engineer would broadly smile and say, "It's for a Japanese chip maker!". If you then told them the truth, it was for a Korean chip maker, they be, "What?! Really?!". How do I know this is true? Because I did it and experienced it with a co-worker on several ocassions. What was happening even in 1995 and 1996 is that Koreans were going in all the way to own these component markets. And even when the 1997 Asian Financial Crisis hit, they keep right on investing in component development and production tools. They also, along with Japan invested very heavily in telecom infra for their country giving them an early lead in pervasive, persistent high-bandwidth communication network all for a pittance. Third, after the dot com / dot bomb crash, the Koreans continued building and investing. But unlike the Japanese, how in modern times, shy away from getting into a scrap or lawsuit, the Koreans almost relish it. When someone like Steve Jobs / Apple sues Samsung, they are scrappy and come out fighting. And then they use other leverage they have, like the Samsung components that Apple relies for its iPhone. These Korean firms also took advantage of the labor immobility and horrible talent management policies found in Japan, such as the refusal to hire from direct competitors or to hire a mid-career executive or old engineer. Korea took them all and gave them a home. And these Japanese engineers produced. Can Korea’s new culture of business creativity rival Silicon Valley?
By Mario Gamper, VentureVillage Published on December 24, 2013 4:00 PM “This is the best time ever to start your company in Korea,” said Dreamcamp Manager Ryu Hahn. The coworking space and incubator is funded with more than $450m by 20 Korean banks who have formed the “Banks Foundation for Young Entrepreneurs”. Offering a wide range of support, from pitch clinics to funding, Dreamcamp is just one example of the structures for new business ideas that popped up in the last couple of years. ... “Korea is now the biggest startup in the world,” smiles Richard Min, cofounder of the SeoulSpace incubator and brand new Fashion Tech (FT) Accelerator. “60 per cent of all venture capital here is government-backed. In the US it’s one per cent,” said Min. This creates a unique startup ecosystem: “Korea has always been a top-down economy. The government has now decided to merge it with bottom-up creativity. We’re creating a completely new business culture, one that’s not even seen in Silicon Valley, or anywhere else,” added Min. ... In 2012 the 10 biggest conglomerates were responsible for more than 80 per cent of Korea’s GDP, more than ever before. For decades the Chaebol – a form of business conglomerate in South Korea – throttled local entrepreneurship. In its quest to create new jobs, the Korean government is finally taking the side of SMEs. And it’s telling them to take bigger risks in hopes this will lead them to bigger markets. “Before this year, almost all support was about creating a new startup. But this year they really pushed startups to go abroad,” Daniel Cho, cofounder of Step, a journaling app that used government funds to send a small team to the Plug & Play accelerator in Sunnyvale. ... “Korea used to be a Galagapos of business creativity,” said Kim. An ecosystem so specific, that ideas and solutions could be successful here, but wouldn’t make it anywhere else. “This has changed.” By James Santagata Principal Consultant, SiliconEdge Coming across entitled, "Foreign startups in Silicon Valley still a rarity" I immediately asked myself two questions: a. Why is that? (first thought: money & visas) b. Does it even matter to be in the Valley now? I first moved to the Valley at the end of January, 1995 and although it seems like yesterday I'm still amazed to see how far both the internet and technology in general have come in terms of their capability and diffusion into our society. For instance, while many newspapers at ground zero of the dot com boom, such as the San Jose Mercury News, used to worry and fret about the so-called "digital divide", we see how misguided those worries were as even the Bloods and Crips have made great use of Facebook, Twitter and other online media and communication services. The fact is, these once nascent and intriguing technologies have now become deeply embedded in our daily existence to the very point that although we rely on them for the most mundane tasks, they have effectively become invisible to us. In fact, they only time we do notice the technology that we've come to rely on is when it fails to work or breaks such as during a blackout. Over the last 18 to 20 years (and especially in the last 7 years) the skills and knowledge need to quickly and cost effectively build and mass produce these technologies and tools have now become all but common place. Moreover the amount of computing power (and bandwidth) we have stuffed into just our smart phones is mind boggling as is the ability to buy right off the shelf parts and services of most of the things we need to create just about any product or business and to do so immediately. We are now longer concerned with the theory or possibility behind building a router or the design and development of a packet switched (rather than circuit based) networks. It's done and proven. Similarly, IPTV is no longer a dream but a reality. I could go on and on but I won't bore you. Beyond core technology, the Valley has grown and matured in the knowledge, processes, skills and resources needed to not only build a product but to launch a company and to make it successful (although, often times, the Valley still greatly struggles with market-based productization and ultimately the monetization of the product. These two sticking points, by the way, provide huge opportunities for the next generation of entrepreneurs to focus on. It's again hard to believe, but much of this was only possible in the late 1990's and again in the mid 2000's. First, we had the explosion of open source software, from Linux to MySql to Perl to PHP to Python and beyond with various applications available to all. This was coupled with the continuing march forward of technology-price improvements where the price point of servers, routers, SANs and bandwidth plummeted as the power, stability, ease of use and ubiquity rocketed upward. The knowledge of how to set these up and admin them diffused as well -- from the US and Western developed countries into developing countries and even as far as to the pimply-faced high-school kid across the street who could setup or administer your Linux server. This helped pushed the total cost of ownership (TCO) of these technologies down even further, and making them even more ubiquitous and more intertwined in our lives, whether we knew it or not. This continued after the Dot Com Boom (or Dot Com Crash depending on your point of view), however, around 2005 and 2006 something else happened. We began to see huge improvements in both the knowledge, formation and management of startups and venture capital investments. Once opaque and arcane industries, terms and activities such as the VC industry, the meaning of the terms on a term sheet (such as a liquidity preference or cramdown) as well as the funding raising process itself become transparent, almost overnight!. What was once at best, Tribal Knowledge regarding the startup process and how best to anticipate and overcome common obstacles and business threats soon became openly discussed, then codified and finally shared widely to the point that by reading perhaps 15 bloggers in a variety of thematic areas as well as perhaps 30 additional books, a fairly intelligent person running a startup or looking to launch a startup could go from Newbie to low-level Sage in a matter of 3 to 6 months. With all of these aforementioned changes as well as the codification and diffusion of knowledge it begins to beg the question, "Is being in Silicon Valley even important anymore?" I would say it was 10 years ago. The knowledge, what there was of it, was very silo-ed as well as tribal and often very anecdotal in nature. But now with all of the knowledge, mentors, books, forms, templates and so on I question that. Further, most of the "tech pain" and "tech risk" has been taken out of the equation. No longer do you need to rent some space at some sketchy colo at a former bomb shelter in San Jose or Mountain View where you need to provision your own rack and where you rack is separated from the next customer's rack by some chicken wire (anyone remember Best Internet on Winchester Blvd that sported the chicken wire colo cages?) Heck, you no longer even have to physically be there. Better yet, provisioning happens at the click of a button and almost immediately. And with cloud-based services like Amazon's AWS, scalability isn't a problem either. Only the cash to pay for it. In effect, so many of these startups are post-tech. Sure, these startups use tech, just as KFC, Walmart or UPS does, but those firms aren't tech firms either. Even vaunted Silicon Valley startups like Airbnb and Uber aren't tech firms. Netflix may be now that it's streaming media, but before that, it was a mail order rental house for DVDs. And what about Groupon? Is that a tech play? Now of this makes any of these startups "less" or "more" of a startup as it is simply a reality of where the startup world is today. So why should you be in the Valley? Well, some people will do it just for a challenge -- you won't find a more concentrated community of super-switched on, open-minded, openly-sharing people anywhere. Sure there are great communities like it everywhere, but not at the scale that the Valley offers. In some cases, it's critical to see, learn and reset yourself to what "Valley time" really means. A crushing rush forward. Sure, you can do that anywhere, in any city in the world, but you'll be looked at as "weird". And it's fantastic to benchmark yourself against other world-class competitors. In the Valley, you come to see that as normal, because all your friends and co-workers will be doing the same thing. For me, I'm glad I lived in the Valley and I still do business there. It was a very huge turning point and critical chapter in my life. However, for many reasons, not everyone can get there, at least now. Yet they worry and fret about it. My advice, is don't worry or fret, do the best you can, with what you have, where you are. If the Valley is in your future you'll be there. And beyond that, there is a downside to the Valley -- too many people acting like entrepreneurs attending events and conferences rather than building product or businesses. It's also a huge echo-chamber. Those are major downsides. Even if you aren't there, you can still read and see what's going on, without being pulled into the echo-chamber and backslapping "ataboys" that are often made with good intentions but inadvertently damage companies or entrepreneurs in the long run. Foreign startups in Silicon Valley still a rarity
Summary: Asian programmers may be a common sight in Silicon Valley, but foreign entrepreneurs are practically a rarity, says Valley-based accelerator. By Victoria Ho for Starting Up Asia December 5, 2013 -- 08:58 GMT (00:58 PST) Asian programmers may be a common sight in Silicon Valley, but foreign entrepreneurs are practically a rarity, according to Ben Levy, a partner at BootstrapLabs. "If you start digging into how many of the foreign entrepreneurs that go through them manage to stay in Silicon Valley, the number might be close to zero or in the single digit percentage," he said. Foreign startups in Silicon Valley still a rarity, according to BootstrapLabs.Levy, who is based in the Bay Area, said foreign entrepreneurs who try to set up shop in the Valley—even those who manage to go through prestigious programs with Y Combinator or 500 Startups—almost never manage to stay on. Of course, Levy was speaking from the perspective of BootstrapLabs, whose raison d'etre is to bring foreign startups to the Valley in the first place. But his point is supported by several high-profile tech CEOs who have been pushing for immigration reform in the U.S., in order to attract more tech-savvy workers to the country. In March, over 100 tech executives including Facebook CEO Mark Zuckerberg, HP CEO Meg Whitman, Intel CEO Paul Otellini and Yahoo CEO Marissa Mayer, signed a letter urging President Obama to relax immigration laws especially for highly-skilled workers into the U.S. Levy said the missing piece for many startups wanting to stay is the need to have sufficient funding while they build relationships, without having to start out from ground zero "begging for money" already. While many may have landed in Silicon Valley with some seed funding, follow-on funding can be a challenge for those new to the scene, he said. Founded in 2008, BootstrapLabs has been active in relocating startups to the Valley, including Zerply and Witsbits from Sweden, and Budapest's Prezi, for example. Recently however, it's started to plant roots in Asia, with partnerships with accelerators in South Korea and Malaysia. Earlier this week, it announced a tie-up with Seoul-based Coolidge Corner Investment (CCVC), to set up a program in Seoul for Korean startups. CCVC manages a US$22 million fund. The visa is not subjected to the same restrictions as the broader H1B visa for most foreign workers into the States, and has allowed Varun to avoid some of the waiting time and regulatory hoops after Semantics3 finished its term with Y Combinator last year. By James Santagata Principal Consultant, Silicon Edge In a recent blog post entitled "How to Deal with Pure Recruiting Mistakes", Mark Suster, a partner at Upfront Ventures gives his take on fixing recruiting or hiring mistakes. He has written some other posts on the subject as well in terms of hiring and firing fast. In regards to hiring and firing fast, I want to be clear and fair that his post is primarily referring to startups (whose needs may be well different than a large, more established company) and is not a "just pull anyone in and see who makes it" mentality. There is a lot of merit in moving quickly in the hiring process, in fact, many companies lose key talent because they move to slow. This slowness in hiring often comes from several factors which may include an overly subjective interview process, the inability to get all people to agree to a hire (e.g,. a group decision) or "cock-blocking" office politics. What I want to do today, is to delve a little deeper into why recruiting mistakes happen. Why are people hired who don't work out? Is it skills, attitude, cultural fit or some other factor or combination? There are many factors and they come from both sides of the table -- the candidate's side and the hiring firm's side. Each situation is different (ESID), but we can usually boil it down to several factors: 1. The candidate doesn't have the aptitude (skills). 2. The candidate doesn't have the attitude (mind set and motivation). 3. The candidate doesn't mesh / can't find his or her way in the corporate culture. That is, it moves too fast or too slow for the candidate. 4, The company improperly assessed the candidates skills sets and fit. 5. The company selected the candidate to fail (e.g,. "Rank & Yank" and this candidate is the group's Sacrificial Lamb). 6. The company applied a selection shortcut -- "Oh he worked at XYZ company, must be good..." 7. The candidate's new peers or one peer sees the new hire as threat and works to remove (have fired) him or her. Of these factors, #6 is perhaps the most critical error (along with #4) when we make hiring decisions quickly. What happens is that unless we know exactly how to interview AND are interested in a very objective, brass-tacks assessment of how the candidate really is rather than how we'd wish would be or hope the candidate is, we will get fooled and made bad decisions. Most often this happens when we rely on Social Proof, assume the Portability of Talent (namely, the inability to identify and separate the success of the candidate from the success or support provided by the system, company or brand) and engage in Trait Ascription Bias while applying the Just World Hypothesis (sometimes known as Just World Theory, Fallacy or Phenomenon. It's a cognitive bias). Two of the more insidious reasons the wrong hires occur is when the hiring authority's (or future peer group's) ego as well as internal politics are injected into the hiring and assessment process. This is a killer. Often resulting in hiring the wrong talent, while driving away and 86'ing the key talent. Here's a quickly illustration of several of these factors at play simultaneously. And just for the record, please don't read anything into the universities or companies that I have chosen to illustrate this with. They were simply chosen because of their impact in terms of having or lacking social proof and so on. Mishire Example: Hiring Manager / Hiring Authority: "Hey, this candidate is a stud/studette. He/she was the Sales Director at Google so he'd/she'd make the perfect first hire for our startup sales team." Mishire Analysis: When you're selling for Google or IBM among other well-known firms, you'll find that about 90% of the sales mojo comes from your brand, team and resources. Conversely, when you're selling from Puntster Analytics from Podunk. Iowa, it's all about your game and skills -- pure talent. Similar mishires are also clearly seen when hiring shortcuts are taken by hiring from direct competitors (or hiring industry insiders) and misattributing their past successes to the candidate rather than seeing what the system provided. Conversely, an excellent person may be turned away and they often are, because their stats aren't as good BUT their stats are the result of Jedi-level talent in the face of a poor brand or system. Yet they are rejected. There are countless other examples, but another common one is the filtering out or rejecting of highly-qualified talent because the current interviewers or team see the candidate as a clear and present danger and threat to someone's salary, position, title and/or ego on the team. How to Deal with Pure Recruiting Mistakes
Posted on November 27, 2013 by Mark Suster One of the unavoidable realities of building a startup is having to fire people. In a normal business you can often sweep bad performers under the rug and not deal with them. When you have millions or billions of dollars of revenue you can suffer a few bad performers or bad apples. You can miss a quarter’s target and not cull the inefficiencies. I’m not saying you should, but you could. But in startups this equals death. Death because just 3 extra non-performing employees in a company of 15 can either accelerate cash out date or can dramatically lower your productivity. I’ve spoken about this before and my mantra, “Hire Fast, Fire Fast.” When I first started my career I came across a term for this that has always stuck in my head and serves as a useful reminder of this mantra. We called it “PURE.” Previously. Undetected. Recruiting. Error. By James Santagata
Principal Consultant, SiliconEdge One of the frequent topics I like to discuss besides the myth and meme that "Necessity Is the Mother of All Invention" is the fact many of Silicon Valley's most vaunted startups are all post-tech businesses. Yes, you read that right. Post-tech. They surely use technology in their day-to-day operations just as UPS does, the Hilton hotel chain or even Walmart. However, many of these startups may actually use even less tech than these brick and mortar firms. Examples of such startups and ventures that are post tech include Airbnb, Uber and Zappos which is analogous to an online Nordstrom in terms of the excellent customer service experience they provide. Further, the technology required to run these companies is often available right of the shelf for a pittance (relatively speaking). There are plenty of other non-Valley, post-tech companies such as Groupon, Gilt Groupe and Dollar Shave Club to name just a few. What does all this mean? As we've discussed many times before, this means that what many of these startups are facing (or will face) as their primary challenge is primarily human in nature not technical. Specifically, the markets that post-tech startups will want to or tend to target are those which are massively inefficient (thus, having huge profit potential while populated with tepid or ossified competitors) due to the use of regulatory capture by rent-seeking incumbents. Over the last 18 to 20 years (and especially during the last 7 years) the skills and knowledge needed to quickly and cost effectively build, mass produce and even consume these technologies and tools have now become almost completely common place. Consider that the amount of computing power (and bandwidth) we have in our smart phones to a person 10 years ago as is the ability to buy right off the shelf most of the things we need to create just about any product or business. We're no longer concerned with the theory behind building a router or the design and development of packet switched (versus a circuit based networks). Even IPTV is no longer a hazy dream but a daily reality. I could go on and on, but I won't so as not to bore you. Beyond core technology, the Valley has now grown and matured in regards to the knowledge, processes, skills and resources needed to not only build a product but to launch a company and to make it successful (although, often times, the Valley still struggles greatly with market-based productization and ultimately the monetization off the product. These two sticking points, therefore, provide huge opportunities for the next generation of entrepreneurs to focus on). For me, I'm glad I lived in the Valley and still do business there. It was a very huge turning point and chapter in my life, however, for many reasons, not everyone can get there, at least now. Yet they worry and fret. Don't. My advice, is don't worry or fret, do the best you can, with what you have, where you are. If the Valley is in your future you'll be there. And beyond that, there is a downside to the Valley -- too many posers, Drive-by entrepreneurs, Lottery Ticket Louts and so forth attending events and conferences rather than staying home or at the office building product or businesses. Better yet, spending the time getting in front of customers. The point is the Valley is a huge echo-chamber where luck and one-trick ponies are seen as "systems", "processes" and "truths" and where almost no one I have met can separate talent from systems, brand and product. That's the downside. A major downside. The upside is that even if you aren't in the Valley, you can still read and see what's going on, in real time, without being pulled into the Valley echo-chamber and backslapping "ataboys" that are often made with good intentions but damage companies and entrepreneurs in the long run. The glorious fact, and I do say glorious, is that now with all of the knowledge, mentors, books, forms, templates and so on I question this "race to setup in the Valley" Further, we should consider and clearly understand that most of the "tech pain" and "tech risk" has been taken entirely out of the startup equation. To summarize, in effect, so many of these startups are post-tech. They surely use tech in their daily business or operations just like KFC, Burger King and UPS does but they aren't tech firms. This doesn't make them better or worse than any startup. But it does mean they should acknowledge this new reality as should every startups, potential entrepreneur as well as incumbent. By James Santagata
Principal Consultant, SiliconEdge As previously discussed, we focus on both the human and the strategic elements of personal and business success. We'll dig down deep and explore and unpack the official narratives as well as the myths and memes as to why particular companies, products, people and technologies have succeeded or "failed" and we'll often end up with far different conclusions than are commonly published or discussed within the business and tech communities. We'll also draw heavily upon some of the following subject matter to help make our points: 1. Evolutionary Psychology 2. Cognitive Science 3. Influence and Persuasion 4. Military History, Tactics and Strategy 5. Economics (primarily regulatory capture by rent-seeking incumbents) 6. Linguistics & Languages 7. Foreign Cultures 8. Seduction and Dating And a whole lot more... stay tuned! By James Santagata
Principal Consultant, SiliconEdge Outside of questions pertaining to SiliconEdge's training and coaching services, two of the most common questions people ask us have to do with our company name. Is there a particular meaning attached to the name? And if so, what is the philosophy behind it? Simply stated SiliconEdge represents two concepts. First, it represents the physical edge of Silicon Valley -- the millions and millions of miles of inhabited space where entrepreneurial and intrapreneurial skills and knowledge have been rapidly diffusing or have already diffused and the exciting innovation and creativity that have been taking place or are about to take place outside of the Valley as well as outside of the United States. Second, and mostly importantly, if we accept Silicon Valley to be the mecca of technology, creativity, innovation and risk taking, then this "edge" is the next step, the next evolution of this mecca; not a physical edge but a philosophical edge. To me, it's been very clear that this next evolutionary step is a philosophical shift in recognizing and optimizing the human element and the strategic element and nowhere will this become more true and more important than in the Valley which is increasing becoming a "post-tech" world although very few seem aware of this fact. This shift means that business and people will soon need to recognize that most of the problems they face are not technical or financial in nature but human (we address this in great detail). To be sure, the intrinsic importance and value of the human element is not new and it has always been of critical importance even when it has gone unrecognized. And due to a number of factors the actual importance of the human element has often been masked, misinterpreted and even when it's been recognized the response has often been to simply address it with platitudes. A common example of this is found in the expression, "Necessity is the mother of all invention". Is this really the case? We think not. To us, this human element relates to being able to most effectively and efficiently select, acquire, develop, deploy, motivate, manage and retain the right people necessary for your business to reach or exceed its objectives and goals as well as ensuring your continued competitiveness and viability in the fast moving, global business environment that is today's reality. More specifically, the concrete skill sets that now provide the largest ROI and ROL for companies (and individuals) include: 1. Leadership 2. Communication 3. Influencing 4. Persuasion 5. Negotiation 6. Assertivenesss Beyond this human element, the essence and philosophy of SiliconEdge is to always question the official narrative as to why a particular person, company, product or strategy was "successful" or "failed" and to identify and unpack the most powerful myths and memes to find the real lessons to be learned. A very nice, heartwarming homeless veteran transformation. It really helps keep everything in perspective and I'll be surprised if you don't get at least a little misty-eyed. |
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