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Monday, December 24, 2007

Coming to the close of the year

The year has only a few days left to run, and if you are like me, then you will be struggling to get anything done with the financial community, and most of your western partners will be shut for business, there is still traffic from the east, but again, more and more I am finding that they are starting to synchronise there shut downs with us in the West. I thought this morning as it will be my last post for a while, I would throw a few gems out to you:

The problem is not that there are problems. The problem is expecting otherwise and thinking that having problems is a problem.

Theodore Rubin

The important thing to recognize is that it takes a team, and the team ought to get credit for the wins and the losses. Successes have many fathers, failures have none.

Philip Caldwell

"Plan to succeed, Not to plan means planning to fail"



Friday, December 21, 2007

Intel shares it's Investment Strategy

VC Economy: Spotting the next big VC thing

By Ashish Patel,

European Managing Director of Intel Capital

The VC environment is currently in vibrant mode, with lots of liquidity in the market. We are seeing a lot of activity, and the deal flow is as high as it’s been for a very long time. Some of the big European exits have happened and will continue to happen.
The market challenge is that there are not as many VCs as you would have liked, and a lot of attention is being given to late stage buyout houses or late stage investing. So perhaps there isn’t enough capital going into early stage. There is economic pressure as well: I don’t think many VCs have been successful in making great returns from venture investing. So they’re now under pressure to do things where the returns have been shown to be better, and of course, that’s driving them to later stage deals.
Competition creates opportunities, We’ve made high returns on early, mid and late stage opportunities. Sometimes however, it’s just nice to have more players, because that creates a lot more opportunities. The more players there are the more start-ups there are created.
To some extent, Intel’s very success is necessary to counter its worries over the future: last year it invested over a billion dollars in its venture programme across the world, and this year invested US$509.1 million in 120 deals between January-September 2007.If you look at history, the downfall of businesses has typically been where they have failed to recognise market segment changes quick enough (either from a product point or a business model) and suddenly got caught out. Our culture is one of paranoia: what or who could come and eat our lunch? How do we innovate to be a step ahead?
Mobility One of Intel’s key innovations is ‘mobility’, and its focus includes a range from silicon to middleware, from software to display systems and even batteries and power.
All of these are interrelated: to have a mobile device that’s useful, it needs a battery life that’s in excess of a day, so you need batteries that have higher capacity and a better form factor. You’ll also want innovation at the display level for reduced power consumption.We’ve begun a lower power initiative for our next generation of chip to address the mobile market segment. We are also looking at new ways to connect to broadband and are very bullish on WiMax as a way to be always connected, anywhere, anytime at low cost.
Digital content Another area in which Intel Capital is interested is digital content, with a particular focus on gaming. The consumption of such user generated content is seeing exponential growth, with the mass multiplaying of games, or games on demand. Metaboli and Akella are key players. In another area, Mirics, which makes a single radio that allows you to span across different types of frequency, is one to watch.
We’re putting a lot of effort now into WiMax, helping fund a number of operators, such as Freedom4 which is a joint venture with Pipex Wireless, DBD in Germany and Worldmax in the Netherlands.
Enterprise software Intel Capital is focused around the security, manageability and regulatory needs of software and data. One of its success stores is the Czech security software company AVG, which Intel invested in three years ago, and which Patel believes could be the largest European IPO in the software sector for a decade.
Joining forcesIntel Capital plays a critical part in Intel’s strategic long term plan which asks where the market is heading, and is always led by very senior members of Intel’s management team. Our investment programme is not a ‘nice to have’, for us, it’s a strategic ‘must have.’


Thursday, December 20, 2007

How to answer the question "how much are you worth ?"

So how much are you worth, this question is asked time and time again with the VC's , whats your valuation ? I was reading some smart answers from a menlo park VC, Stu Philips at Ridgelift Ventures. I would suggest you remember them.

Never answer the classic VC question "so, what valuation are you looking for?" with a specific number. Got that? Never!
Sure you've got it? I find myself going over this issue a couple of times a week with entrepreneurs starting their first company as well as seasoned serial-entrepreneurs who have been around the block many times! I get a lot of inspiration for writing relevant blog posts from covering these kinds of issues – this is the hot button of the week.
Whatever number you give in answer to this question, you wind up negotiating with yourself (a fool's errand in anybody's book of strategy):
If you give too high a number, the prospective new investor might start thinking "boy, these guys are being totally unrealistic…" or worse. Many VCs don't relish being the bearer of bad news and so tend to nod politely and then go chase other deals where they don't have to be the bad guy who brings you back to earth. If you give too low a number, do you think the prospective investor is going to say "oh, that's way too low, we were thinking of a much higher number…" ? So, never give a specific number!
The question itself is a fair one and has one of two answers:
If you have raised money before, the answer runs along these lines… "Our last round was at $X million post money. We think you will agree that we've made substantial progress in building the company since then and that will translate into the valuation that the market will set."

If this is the first money you have raised from institutional investors… "We're realistic about the valuation that the market will set and look forward to hearing your opinion of a fair valuation."

VC's ask this question to test the waters and see how realistic you are about the fund raising process – think of this as a pass/fail question, remember the answers above and you'll do fine.



Wednesday, December 19, 2007

Some thoughts for the new year

Hi Guys,

Soon you will have closed the door on the old year..and opened the door to the new one....what does it have in store for you? have you got your plans together ? I like to enter the new year with excitement and enthusiasm, that I don't repeat the mistakes of the previous year and I look forward to making new mistakes in the new year....If I don't make them, I won't learn...I do want to exit this year, having moved on from where I was last year... that is the essence of living, you do not want to stay still, have you learned new skills, have you made new friends, have you strengthened old networks....there is still time...give an old friend a call and catch up. Exit this year with a renewed passion and vision for your own future and your family and friends.

Picked this up from BNET the HBS asking a few questions

Seven years into the 21st century the world of business and management is certainly going through, if not revolution, at least evolution on a speedy scale.
Traditional business models are getting turned on their heads (Anyone seen Google’s share price lately?), resources and markets are available on a global scale (Medical tourism), and technology continues to be both the manager’s best friend (CRM) and worst enemy (Blackberry = 24×7 availability).

What do you think will be the big challenges for your business in 2008? asks Harvard Business, which is building a crystal ball around responses from readers.

Some early comments:
The Network as Platform. “The most important trend in networking in 2008, indeed in all of IT, will be the emergence of the “network as the platform” for productivity, profitable growth, resource management and innovation. This trend will play a key role in helping determine success in business as well as in other areas of society (healthcare and education).”
Eco Business Opportunities. “As private and public entities respond to the extension of social responsibility, many new service provider opportunities will explode in the finance, e-waste, recylcing, remanufacturing, supply chain industry, and service entities.”
New Geopolitics. “Politically, between US election, China’s coming out party (summer Olympics), and Russia’s new (old) president, 2008 would be an interesting year. Economically, the battle for supremacy between central banks, sovereign funds, and the “real” economy could be on the headline in various disguises.
Volatile Markets. “The biggest challenges for the managers in the short term is to counter the impact of weakening dollar, rising crude, declining productivity in US and Europe, and outsourcing as competitive strategy.”
Dollar Decline. “For European businesses the continued decline of the US dollar against the Euro will remain one of the toughest challenges. It will be the catalyst for many changes related to repositioning within market segments, relocation of manufacturing to no-Euro zones and acceleration of innovation drive.”
Social Networking. “Companies must learn to effectively utilize social networking tools both inside and outside the companies to keep up with what the younger workers grew up with — fast and furious communication tools like texting, facebook, My Space, You Tube, etc. that spread the word now. Not in the next quarter, next month, next week or even next day, but NOW.”
Soft Skills. “The development and implementation of ‘soft skills’ will be one of the greatest management challenges in the future. With changing attitudes and values it will become increasingly necessary for organisations to undergo cultural change in order to attract and retain high quality young staff and to appeal to the changing values of society in general. The establishment of a culture of community which values all stakeholders, gives a strong sense of belonging and offers flexibility within a secure and diverse environment will be important.”
What do you think?


Tuesday, December 18, 2007

A Christmas stocking filler

There are few books I have read that give me goosebumps. Presentation Zen: Simple ideas on presentation design and delivery is one of them.
By means of context, everything about the book is a "sweet spot" of my interests and attractions. I adore photography, and the images used in the book (from my favorite image source istockphoto) are truly stunning. The ideas on presentation and communication fit squarely with my taste and experience. And the author, Garr Reynolds, has a wonderful narrative voice, which is all at once calm, wise and powerful.
Here is a taste from the introduction:
"A teacher for one who seeks enlightenment would say the first step for the student is to truly see that life is somehow out of sync or off-kilter, that there is "suffering" if you will. And that this "out-of-kilterness" is a consequence of our own attachment to things that are inconsequential. Likewise, the first step to creating and designing great presentations is to be mindful of the current state of what passes for "normal" PowerPoint presentations and that what is "normal" today is out of sync and off-kilter with how people actually learn and communicate.
Each situation is different. But we all know, through our own experience, that the current state of presentations in business and academia causes its own degree of "suffering" for audiences and for presenters alike. If we desire to communicate with more clarity, integrity, beauty and intelligence, then we must move beyond what is considered to be "normal" to something different and far more effective. The principles I am most mindful of through every step of the presentation process are restraint, simplicity, and naturalness: Restraint in preparation. Simplicity in design. Naturalness in delivery. All of which, in the end, lead to greater clarity for us and our audience."
As one who has suffered through years of excruciating PowerPoint presentations, all I can say is "Hallelujah!"
This book was born from Garr Reynold's blog of the same name, Presentation Zen. It contains context and instruction for great presentation design from Garr and other experts, how-to information for putting together great-looking visuals as well as lots of samples of real-world slides. Although designers will appreciate its detail and focus, it is a book for anyone who uses images and words to communicate. Which is pretty much everyone.
And a bonus too juicy and sweet for me to imagine, I am featured in the book, using the sample slides from my mini-movie My Declaration of Independence. Given the caliber of some of the people in the book like Seth Godin, Nancy Duarte, Guy Kawasaki and Merlin Mann, I feel like a first-year drama student called on stage to act with Laurence Olivier. I am humbled and very thankful to be included in what I think will be a design book for the ages, which will be perched on bookshelves around the world, alongside weathered copies of Strunk and White's The Elements of Style.
So to follow the advice from the "the first forward in history presented in a book as PowerPoint slides," by Guy Kawasaki (which will delight and amuse you when you see it):

article found in "Escape from Cubicle Nation"

Monday, December 17, 2007

Customer service....a Profit centre

Music, money and customers:

Well I hope you all had a great weekend, and have got most of the Christmas shopping behind you now, and it's just the matter of one or two last few pressies to buy. I was at the church Christmas party on Saturday (http://www.newlife-morpeth.org.uk/) and played guitar to help my mate Mike, as he sung a a few songs for his wife....all in good fun...and I love to play guitar ...and even better when in a band...you get an amazing magic developing around you, it can be the same in the management team of a start up, if the correct chemistry is there. I have a passion to start a small recording studio, even manage a few bands, help them get started, not for any glory but for the music and for God.

I love music, specifically I love Celtic folk music, progressive and traditional, and at the weekend, Candyrat ( www.candyrat.com) an online folk music retailer, that supports some of the best folk music around, sent there newsletter, I saw some new music releases and listened to a few samples, and thought, yes, I need to get some of that music for my next big trip, my recipe for long haul flights (35K since September- coach) is to have a few glasses of wine, put on my Bose headphones and hit play on my sony MP3, and the time flys in. I bought the two albums and started to download.....and thought crap what is this..23k to 11k download..3hrs to download an album...and thought there server is crap...so I launched an email out to them..and being a tad annoyed...it was not a "lovefest" type of email...but I got a pleasant reply from "Holly" saying they reset the downloads and hope it all works out for me the next time. I thought..that was well handled...it took the sting out off wrt the crap download speed and other associated problems. I tried the downloads again and still the same crap download performance, but this time I checked http://www.virgin.net/ my ISP and found that they were having "problems", no date to when it would all be fixed, just sorry but "suck it in mate", so the problem was not Candyrat's at all (by the looks of things)...I still showed a good healthy 7MEG connection on the router, but it was further up the line that the problem was. So I had to contact Candyrat and ask if they would reset again, they were within there rights not to but they did and and "Holly" sent back a nice email...so I still do not have the downloads...I will try again this evening ...and who knows....( PS not the first time I have downloaded music) I may get lucky....

The Summary:

Two companies, Candyrat and Virgin, who do I like most , well Candyrat, why?..they have good customer support, are there things they could do better ? yes, but we all can, even though I still do not have my music :( . I don't like Virgin, but it serves a purpose, and I will change ISP soon, there arrogance is sickening and poor customer service just turns you off, ( Northern Rock look out, Richard Branson, needs to look at the empire, it's going the same way as another great british Empire). These two companies are online retailers, so it's apples to apples comparison, and I would suggest that if you like music, then go check these guys out, and at least if the download does not work, you will get an answer. I would also say, make sure your customers get the support they deserve, even if they are a mouthy customer like me....

Friday, December 14, 2007

Sales a science not an Art

I read this post below yesterday while waiting for a taxi, interesting cut on the Sales process, I believe, that showmanship is a big part of the mix for a senior sales guy as much as the science, but due process and technique is a must. I have worked with some of the best my friend Gerry who is a Director with STS, was an x-applied materials sales guy, he has a few techniques up his sleave, learned from the old school of sales, you know what I mean if you have ever dealt with AMAT.

Andy Blackstone had a great comment to my post yesterday on Atul Gawande's New Yorker article about explicit behavior (in the case of the article, doctors using checklists). I've edited the comment slightly for clarity.
An important concept in the article is that the checklists are not aimed at a specific condition but at an overall process in the ICU. One of the objections I often encounter in my consulting practice is "my business is different" - I'd contend that at the process level that's most often not true. The resistance to adopting these checklists often comes from doctors that think the "art of medicine" is being threatened by the regimen of the checklist. In my practice, I see sales managers and salespeople with the same objection. In fact, as the article states, it is the reduction of the routine aspects of the process to the rigors of the checklists that enables the art to emerge. Finally, I was struck by the feeling of the doctors in the ICU that there was just no time available in the midst of their chaotic day to deal with checklists - a reaction I've seen in lots of business managers as well. This is a major barrier to implementing any new business process. The success of checklists in the ICU in not only reducing accidents, deaths, and costs, but in making the doctors time efficient, can be seen as new business processes are implemented as well.
It's the perfect lead in to some thoughts about what's wrong with many sales organizations – a topic I've been meaning to write about for a while). Sales, in my experience, is significantly more scientific than people typically give it credit for. And because people (sales professionals, CEOs, boards) don't always see sales that way, they let slide behavior that is counterproductive to the overall goals of the organization (i.e., to sell more and – importantly – to sell with increasing efficiency and predictability). Specifically, the lack of a detailed and well documented process for sales results in:
Salespeople wasting huge amounts of time on deals that are hopeless, because there's no enforced checklist that keeps them from continuing to pursue opportunities where essential events aren't being checked off
Sales cycles that languish while salespeople have "good meetings" instead of checking off the next task on the sales process checklist
Executive management, sales management, and BOD members searching for the magician that will improve the "black magic" sales situation instead of incorporating and enforcing process that ensures success independent of superstar performance
Turnover in the sales organization but without improved performance
A lack of predictability in sales performance (lumpy and generally random sales results)
A stagnant pipeline – sales people can't handle as many deals as they should be because they're spending too much time on deals they shouldn't be working on and the deals themselves take longer than they should because they're not actually being pushed through a real process
"Fuzzy" pipeline reviews (where every deal has a story associated with it, but where the basic questions of where the deal stands are never really answered)

High performing sales organizations have real rigor in their process and religiously enforce that rigor from qualifying leads, to initial contacts, to how they move a prospect through their pipeline to an extremely detailed "closing" list that guides an organization through the final stages of each close. They use this rigor to determine which leads to follow up on, what prospects are real, and what steps remain to a sale for each and every potential customer. They quickly put prospects onto a hold list when they don't meet specific near-term buying criteria and they generally have a good view of what's possible at the end of each quarter because they know exactly what steps remain for each prospective customer, who needs to sign off on what, and how they will (or will not) be able to make that happen in a timely fashion. Pipeline reviews are focused around where a prospect is in the sales process and are crisp reviews of each account (a few minutes is more than enough time to cover an account at a high level – spending more time than that is either wasting time or a sign that the "story" is covering up the lack of real progress or understanding of that account). Every sales person (not to mention the VP and CEO) can take you through the stages of an account, the "[insert company name] way of selling", and the closing process. In short, the entire company is on the same page around what it takes to turn a prospect into a customer.
All of this isn't to suggest that sales as a discipline and sales people as practitioners of that discipline don't possess skills that range far beyond the ability to check items off a list. To the contrary, skilled sales people are extremely nuanced in their ability to understand the buying patterns of their prospects, navigate the internal landscapes of customers and, of course, effectively convey the value proposition of the product they are selling. But sales people are human and – like doctors in an ICU – benefit from the rigor and oversight that is provided by process.
Thanks to Andy for sharing his thoughts on this subject with me in both his comment and in email (which I borrowed from liberally in writing this post). Head to his site to see more about the sales process work he does at Blackstone Associates.
By Andy Levine , is a Managing Director with Foundry Group and a Principal at Mobius Venture Capital.
with a wife, daughters he lives in Longmont, CO and Fraser, CO and he enjoys all of the outdoor activities Colorado has to offer.
Slainte Gordon

Thursday, December 13, 2007

Playing the start up game well

Finding your Milestone Leverage Points
A little bit of magic happens every time your startup company hits another growth milestone. Sometimes it's hard to put your finger on it, but you can tell when it happens.
It's that moment when your Web site launches and your product becomes real for the first time. It's the moment when your first customer actually writes a check for your product. It's that moment when that big idea you kept talking about begins to turn into an actual company that you walk into every day.

Those milestones aren't just reasons to celebrate and have a beer (although that's always a good idea!) They are also key points at which you can create some leverage in your business.
For example, you may not have much leverage with an investor when you're sitting with nothing more than a business plan in your hands begging for capital. Yet the second after a key customer confirms a massive purchase order for your new product, your leverage increases significantly with investors and they begin begging you to invest.
A smart startup pays close attention to key milestones in their business so they know when their stock is trading at its highest, and when to hold out until times look better.
Understanding the Leverage Points
While every business is a little bit different, it's safe to say that most businesses share the same basic milestones that serve as leverage points. These milestones range from the initial incorporation of your company to the closing of a substantial round of financing.
In the earlier example I pointed out how an investors' interest in your company may change significantly when you've proven that customers really will buy your product. That's because the value of your company is directly tied to your ability to prove that customers will write big checks for the product.
What you may find is that before you signed that deal, an investor would be willing to value your company at $1 million and no more. But the moment after you sign that deal, the investor will value the same exact company at $10 million. You've just hit a leverage point.
Timing your Leverage Points
By understanding your leverage points, you can start to do a better job of determining when it's best to make big decisions. A company becomes worth progressively more as you pass each successive milestone. In many ways, the longer you wait the more leverage you have.
The first significant milestone you'll likely hit is just getting incorporated. That milestone helps you take the company from just an idea to an actual enterprise. The incorporation alone can be a leverage point when determining who is really involved in the business and who just likes your idea. This is a key leverage point because you will start to determine who will own not only the upside but the liabilities as well.
Up until that point anyone could claim that they were a part of the idea. But when you start determining who owns the assets and the liabilities of a company, you quickly shake out who's on board and who's not.
Looking for the Key Points
Beyond milestones like incorporating your company, there are key points that can actually drive major decisions down the road.
For example, landing your first paying customer is a very key point รข€“ maybe the most important one. A paying customer is the ultimate validation tool of your business and therefore creates a tremendous amount of real value for your idea almost instantly.
Knowing that a paying customer can increase the value of your company so quickly, you may hold off on quite a few decisions until you can hit this milestone. You may forgo investor funding, hold off on approaching a bigger customer, or stall a partnership that would require you to give up too much control.
There are other key points, like hiring the right person, getting the right press, or bringing on the right board member. When those milestones are surpassed, real value is added, and your ability to make more substantive decisions becomes more obvious.
You probably already know the basic objectives of your business like finding capital, creating partnerships and hiring staff. Now you need to align those decision timelines with the key milestones that will give you the best leverage to make those decisions.
Holding Out
Before you make a big decision, it's important to ask yourself ,What leverage will I have in the near future when I surpass my next big milestone? What's the benefit to waiting until that point before making a move? What does it cost me to make the decision now?The better you understand your key leverage points the better you'll understand when to make big decisions. Sometimes growing a business isn't just about what you do. Sometimes growing a business is about when you do it.

(abridged from the Go big network blog)



Wednesday, December 12, 2007

Outsourcing your holy grail ? take another look

When the Chicago aerospace giant set out four years ago to build the fuel-sipping jet, it figured the chief risk lay in perfecting a process to build much of the plane from carbon-fiber plastic instead of aluminum. Boeing focused so hard on getting the science right that it didn't grasp the significance of another big change: The 787 is the first jet in Boeing's 91-year history designed largely by other companies.....

read on here at the Wall street journal, parachute me in for a few months :)




The Choke Factor: How Stereotypes Affect Performance

An Interesting article below to stimulate the brain on a Wednesday morning, interested in some feed back, Guy Kawasaki does a post on the same article have a look at his analysis, to me his summary is common sense, and does not do the article real justice. I look forward to your comments.

How Stereotypes Shape Performance By S. Alexander Haslam, Jessica Salvatore, and Thomas KesslerUniversity of Exeter, UK

Every sports fan has vivid memories of key occasions on which a favorite team or player has 'choked' under pressure. And every student who has ever taken a standardized test knows what that kind of pressure feels like. What makes for high-pressure situations, and how do they influence performance? In the last decade such issues have been explored by social psychologists researching the phenomenon of stereotype threat. Their work shows not only that pressure can compromise performance, but that this dynamic is more common among members of negatively stereotyped social groups. Why?The classic demonstration of stereotype threat, in a 1995 paper by Claude Steele and Joshua Aronson, emerged from a series of studies in which high-achieving African American students at Stanford completed the Graduate Record Exam (GRE) under conditions where they thought either that the test was measuring intelligence or that it was not a test of ability at all. Intriguingly, these bright students did much worse when they considered it an intelligence test.. This, the researchers argued, was because "in situations where [a negative] stereotype is applicable, one is at risk of confirming it as a self-characterization, both to one's self and to others who know the stereotype." This tendency to perform worse when conscious of being in a group stereotyped as performing poorly is what is meant by stereotype threat. This pattern of findings has been replicated with many different groups on many different dimensions of stereotype content.

The work of the University of Chicago's Sian Beilock and colleagues, reported in the latest issue of the Journal of Experimental Psychology (abstract or pdf download), follows that of many previous researchers in showing that if female students are made aware of a stereotype that men have greater mathematical ability than women, they tend to do worse on complex mathematical tasks than they do if they are not alerted to this stereotype. Understanding processTo help people combat the effects of negative stereotypes on performance, psychologists first need to understand why it occurs. Recent work has argued that one core factor is enhanced cognitive load. For example, work by Mara Cadinu and colleagues (abstract or pdf)has shown that when women perform mathematical tasks after being exposed to the stereotype that they are worse at math than men, they report entertaining more intrusive negative thoughts about their own mathematical ability, of the form "I am not good at math." Other studies have indicated that exposing people to negative stereotypes about groups to which they belong increases their anxiety and stress when performing tasks related to that stereotype. Beilock and colleagues' most recent paper attempts to explore and integrate these ideas by delving deeply into the cognitive dynamics of stereotype threat.

Working in the domain of women's performance on mathematical tasks, they ran a series of experiments that (a) replicated the standard stereotype threat effect, (b) showed that the effect is most pronounced on tasks which place demands on phonological resources (i.e., those which require verbal reasoning), (c) demonstrated that the presence of stereotype threat increases verbal reports of worry associated with either the task or the stereotype, and finally (d) suggested that the debilitating consequences of stereotype threat can be avoided if participants learn to perform tasks in such a way that they no longer consume working memory resources. The working memory issue, they conclude, is critical. Accordingly, the authors recommend intensive training -- involving rote learning of solutions, so that answers become automatic -- as a way for women to avoid the debilitating consequences of stereotype threat. Practical and theoretical limitations.

There are, however, a number of practical and theoretical reasons for believing that Beilock et alia's exclusively cognitive analysis is limited. On the practical side, it is clear that rote learning will not be a viable solution for all individuals or for all tasks. Such a strategy probably could (under precisely the right circumstances) reduce the harmful impact of stereotype threat. But as a general remedy the prescription seems unrealistic, particularly for complex tasks requiring intensive training. If you have trouble remembering phone numbers when put under pressure, learning the phone book by heart isn't an ideal solution. A sense that Beilock and colleagues' theoretical analysis is incomplete derives from other work inspired by Steele and Aronson's original demonstration of the effects of stereotype threat. This work shows that exposure to stereotypes can have welcome as well as unwelcome consequences. For instance, studies by Margaret Shih and co-investigators show that exposure to positive stereotypes about one's group (relative to outgroups) can elevate performance instead of compromising it. Clearly such elevated performance cannot be explained in terms of cognitive load -- since it is hard to see how the salience of a positive ingroup stereotype (of the form "we are good") could increase the memory resources available to participants (relative to 'no stereotype' control conditions). Ideally, a parsimonious explanation of the stereotype threat effect would account for both upward and downward change. It should also be able to explain a host of other effects reported in the research literature -- including evidence that such effects are apparent in athletic domains where cognitive capacity is not critical and vary depending upon whether participants are encouraged to focus on promoting positive outcomes or on preventing negative ones. An explanation of effects arising from stereotype threat also needs to explain why they are not particularly generalized. For it is certainly not the case that all members of a given group succumb to the perils of threat.

On the contrary, effects are restricted to individuals who value the domain in question, and who have high levels of basic competence (i.e., those who, in the abstract, have less to worry about). A woman who loves math and is good at it, in short, is more likely than others to suffer from stereotype threat. How so? Self and identityOne answer is that stereotype threat is not so much an issue of cognition per se as one of self and identity. A number of researchers have made this point, including Steele and Aronson themselves, who argue in a 2002 review, co-authored with Steven Spencer, that stereotype threat can be understood as a phenomenon that centers on a person's social identity. That is, stereotype threat (and lift) effects eventuate to the extent that people are encouraged to think of themselves (i.e., self-stereotype) in terms of a particular group membership. (We will elaborate on this point in a full-length version of this article soon to appear in Scientific American Mind.) Thus, as the work of Beilock and others powerfully demonstrates, whether a person tests or plays well does not simply depend on high intellectual or athletic ability. It also depends on whether the prevailing social context and the exigencies of group life validate the development and expression of these abilities -- and in particular, whether they allow them to be experienced as valid and 'natural' expressions of self.

Descartes famously observed, "It is not enough to have a good mind; the main thing is to use it well." We might modify this to say "It is not enough to have a good mind; the main thing is to be encouraged to use it well." Such encouragement can obviously come from the direct actions of others -- the things they say and the way they treat us. Less obviously, though, the stereotype threat literature shows us that such encouragement (or destructive discouragement) can also come from the social structures and associated stereotypes that we encounter and the sense of self that these engender. Where these promote self-conflict and self-doubt, performance will tend to suffer; where they promote self-belief and a sense of self-efficacy, it will generally be enhanced.

S. Alexander Haslam is professor of social psychology at the University of Exeter in England and serves on the board of advisers for Scientific American Mind.

Jessica Salvatore is a post-doctoral fellow at the University of Exeter who recently completed her PhD at Princeton University.

Thomas Kessler recently moved from the University of Jena in Germany to take up a position as professor of social psychology at the University of Exeter.

Elsewhere: Earlier this year, Sian Beilock wrote a Mind Matters review of a simple and effective intervention that reduced the racial achievement gap in a Colorado high school. Beilock's web page offers several papers from her own lab -- including some about working memory. A 2002 study found that white athletes responded to stereotype threat about "natural athletic ability" by practicing less, as if to provide a rationale or excuse for subsequent underperformance. And this 1999 study, gorgeously simple, found that stereotype threat harmed both white and black golfers' performance depending on whether it was suggested to the players that golf performance reflected "athletic intelligence" (advantage: white golfers) or "natural athletic ability" (advantage: black golfers). ReducingStereotypeThreat.org offers a range of information on stereotype threat. And -- forgive me, I couldn't resist -- here's 8 minutes of Woody Harrelson and Wesley Snipes trading stereotype threats in "White Men Can't Jump." Decency caution: Woody and Wesley use some bad language. -- Mind Matters editor



Tuesday, December 11, 2007

Deconstructing a Struggling Start-Up: MyCarpoolStation.com

Interesting story for a cold frosty Tuesday morning:

My name is Philippe and I’m the co-founder and CEO of My Carpool Station International Corp. I believe it’s time to share the story of our struggling start-up with the blogosphere. You see, things are not going as planed. I’m not a millionaire lounging in my umpteenth apartment, downtown Bangkok. I’m not mingling with fellow captains of industry, preparing to launch my own venture fund on the side. Instead, I am quietly distancing myself from my pet project, my baby which I poured my heart and soul and mind into. Why would I do such a thing to something I hold (or held) so dear?
No more money (and none coming in).
We invested 30,000 US$ of our own capital, excluding an estimated 50,000 US$ of sweat equity. With that, we built a working prototype but did not manage to get a customer-ready product out the door. No customers equals no revenues, and since we have not yet secured additional funding, we are officially stuck. Clearly, we needed to present a better pitch deck to VCs, network our way into governmental grants, or come up with some creative financing strategy such as a tax shelter. Emailing 700 VCs our poorly written 12-page business plan was probably not a good idea.
Our market research was not convincing.
What are customers actually willing to pay for? How many customers are out there? What is the cost of customer acquisition and retention? It’s hard to raise capital when you can’t answer those 3 questions with confidence. “We’ll figure it out later once we get traction” is an answer, but a weak one, all things remaining equal. We did do market research, to a certain extent. We used secondary demographic data: 14 million people carpooled to work in 2004 in the U.S. We used primary data: about 33% of our survey of 50 people said they were willing to pay 1-5$ monthly for a carpooling service. We highlighted the trends of high gas prices, environmental sensitivity, web-based social networking, pop culture relevancy, etc. We thought we had done our homework until one of the partners at InnoCentre suggested to me that we would have no repeat customers. He said that when people find a carpool partner, they usually stick to the same person and call them directly, and in doing so they effectively bypass our website (unless they really want us to tabulate how much GHG they reduced). Of course, I argued that university students, part-timers, and random travellers change schedules often enough to qualify as repeat customers. But our research was not as comprehensive as it could have been; I was caught off guard by this plus other questions regarding security and legal liability. In the end, they offered to work with us but we turned them down because we thought a 25% equity stake + fees payable was a bit steep for consulting. Maybe we were wrong. The bigger problem though, is that we were (and are) still unsure whether our customers should be ad-supported end-users (students, travellers, etc) or organizations paying us a software licensing fee (governments, companies, etc), or both.
We did not find the perfect product/market fit.
My original vision, circa 2005, was “to supply web-based, community-run carpool stations to schools, workplaces, and regions in the U.S. and Canada” (i.e. to build a Facebook clone but for carpooling). We would make money off ads exclusively. By the time we finished building our Alpha in 2007, we ran out of resources and realized that we needed to build something different to execute my 2005 vision in 2007/2008: we needed to build a Facebook app, an OpenSocial app, a stand-alone website, and offer enterprise-branded carpool stations with an API. Of course, if you’re bootstrapping you’re going to have to build traction and release these one at a time. The business model would probably change as well. It would be ad-based for app users and membership-based (with no ads) for website users and enterprise users. There’s also the possibility of a token-based economy. On the web, the product/market fit we were chasing is usually achieved through multiple, rapid Beta releases, but we never got there due to lack of skills and resources. Web products basically consists of features, user interface, and customer benefits. The features list we have is quite extensive: carpooler search, carpooler ratings, MapQuest maps, carpool fare calculator, green house gas (GHG) calculator, savings calculator, privacy controls.., upload text, pics, songs, videos, invite friends, create groups, create organization-branded carpool stations with news feeds, etc. The user interface however, did not win rave reviews from the Montreal tech community. And unfortunately, there are still a few outstanding bugs in our PHP code which makes the website difficult to use at the web 2.0 consumer level. The other way a product/market fit is achieved is when you talk to customers during the development process. Customers will tell you what benefits they are looking for (eg. reliability, privacy, etc).
Marketing to early adopters is easier than selling to big organizations.
We didn’t meet with big account customers, big organizations to which we could sell software licenses too, and we failed to develop a product and business model around their needs. That was a mistake. You see, big organizations have money to pay for memberships. They have an environmental reputation to uphold. They have a community of users which travel to the same place on a regular basis. Their users are usually accustomed to using web apps. They are the perfect customer. Since launching our Alpha, over 40 organizations have requested carpool stations, including The University of South Florida, University of Waterloo, CGI, Wachovia, GMTMA, kindergartens, hospitals and more. Our next step should have been to get these organizations to sign letters of intent to purchase memberships from us for our upcoming Beta product, built around their needs. Evidently, it’s easier to approach VCs with a few orders on hand. Our lack of a sales strategy didn’t help our capital raising efforts.
On the other hand, it’s our belief that general marketing and buzz building in North America is nothing more than signing a check. The only exception is opportunity-based PR stunts, such as promoting carpooling to all local radio stations and newspapers during a public transportation strike. Otherwise, ads can be outsourced to Google, Federated Media, Spot Runner, etc. Direct marketing can be outsourced to Campaign Monitor, Quantum Mail, etc. SEO can be outsourced to ACS SEO. PR can be outsourced to The Comotion Group, Social Poster, E*Releases, etc. Everything is measured these days, making it easier to determine the ROI. Plus, when you market to the web 2.0 early adopter crowd and you have a killer app, word spreads virally. So I don’t think we had a problem with our marketing strategy. We just didn’t get there because we lacked the skills and resources to build the killer app in the first place.
We were missing key business relationships with partners.
I’ve got friends and acquaintances in the Montreal web community. I’ve met with angels, incubators, and VCs. But we didn’t meet with big strategic partners like the gas companies, car companies, transportation authorities, car navigation companies, and map companies that we originally envisioned as our partners. This excludes an extremely awkward Q4 2006 phone call to MapQuest director Jeff Greenwald, when I stumbled while trying to convince him to give us an extension on our MapQuest API free trial and partner with us for the long term.
The competitive environment was, and still is, manageable.
Partners give you the competitive advantage you’re looking for, but competition itself did not kill MyCarpoolStation.com. I used Competitious to track over 80+ carpooling websites in the U.S. and Canada across a feature matrix of over 75 features. The competition is getting its act together (NuRide, Goloco, ZimRide, Amigo Express, etc) but it’s fair to say that the carpooling industry does not exist yet. No one has figured out the perfect combination of user interface, features, and business model to pierce through the market and gain significant traction. Yes, there is a low barrier to entry in building a web-based product. Generally though, you can say that we have been lucky since no major competitors are dominating the space with a killer app. The other way of looking at it is “the market sucks ‘cuz no one’s making sustainable money”.
Core team of outsourcees and part-timers were lead by an extremely driven, although inexperienced, non-tech-savvy CEO.
This project began as a “coup-de-coeur”; a project sparked by pure passion to build something great for people to use. We were also “driven to drive away pollution”, or so our slogan went. Me and my father thought we’d grow a business out of the transportation needs of Western students such as myself who travelled back home for the summer or holidays. Why use Greyhound, VIA Rail, or Air Canada when you can split the gas with a buddy and ride shotgun instead? So we began recruiting friends of mine who were “good with computers”. One was a software engineer and the other was a web designer, but neither could commit full-time or buy in 110% into the vision we had. So we decided to outsource our coding to India. In our subjective experience, Indian web design shops are intelligent and cost-effective, but are not creative nor are they on the leading edge of web 2.0. Most importantly though, they are contractors by nature and therefore build websites for their clients, not for the end-user. In hindsight, I realize the obvious: one must build a strong team of entrepreneurial web developers as co-founders before launching into a new web venture. We failed to follow Jim Collin’s Level 5 leadership tenet: “First Who [core team]… then What [product strategy]”, and as a result we have a Alpha website with outstanding bugs, boasting a features list and UI developed solely by me, the non-tech-savvy CEO and co-founder. This is not to say that our outsourcees didn’t go beyond the call of duty- they did. Or that because I was in charge of product strategy I knew how to manage a software project- I did not. At least on the positive side, I am now 3X more knowledgeable about business and technology than I used to be in 2005. I’d also like to thank TechCrunch and AskTheVC for their contribution.

Currently, we are 10 team members/shareholders. This includes myself, my father, my mother, my brother, an accountant, a software engineer, a electrical engineer, a web designer, an IT/business consultant, and a programmer. Currently, 3 are active (but not very active) and 7 are passive (read: hello?). We do not have any full-time web developer/software engineer staff. That’s a problem.
Our process was/is entrepreneurial, which is good. However, without any resources it is difficult to maintain operational momentum. When we were going through the most difficult stages, negotiating with our outsourcees over payment terms and source code ownership, I shed a tear. That was a learning experience. But there has been numerous setbacks (albeit less dramatic) which have contributed to our loss of strategic and sales momentum as well. At this moment, we’re tired and we need a breath of fresh air.
Growth strategy?
We’ll probably throw up a new landing page and re-brand ourselves while we try to figure things out. We’re currently facing the classic chicken-and-egg problem. What comes first: the financial and technical resources or the product and market traction? We score low on both at this stage, even though we’ve got an Alpha product stimulating demand, a decent amount of industry knowledge stored on our BaseCamp account, and local buzz. With resources, we could figure out exactly what our big customers want in a Beta product and are willing to pay for. With resources, we could launch an ad-supported Facebook app and OpenSocial app to generate buzz and learn about end-user habits. We’re always recruiting, even though we only offered stock-based compensation. If you’re extremely resourceful, note that the CEO post… is also open.

"Philippe Kiethun Chrun is the co-founder and CEO of MyCarpoolStation.com. He has a bachelor’s in Management and Organizational Studies from The University of Western Ontario and is currently pursuing an MBA at Concordia University in Montreal."


Monday, December 10, 2007

The smart way to start a business

"Do what you love, focus on a niche, find a viable business model, and work for yourself"

Google announced the winner of the Adsense Story Contest today: Hometips. This is a site that features free content concerning home improvement, remodeling, repair, redecorating, and do-it-yourself projects. For example, here are tips for hanging Christmas lights.
According to the owner, Don Vandervort, the revenues generated by Google Adsense went from paying for coffee to paying for lunches to paying for all salaries, overhead, and business development. The site's traffic is moderate--something like one million visitors a month or less if you believe Compete.

  • The company started in a backyard clubhouse. Don converted the bottom floor of his sons' two-story treehouse. "Two-story" treehouse? How cool is that?

  • The site has a clear focus: content for homeowners. There's nothing that I can find that smacks of "Web 2.0 social media" at all. This is just so refreshing: All you can do is find information, you don't need to bond with any strangers.

  • Don added Adsense to his site by himself. He said it took twenty minutes. He probably didn't do any market research, focus groups, or 2x2 McKinsey-esque matrix analysis.

  • He probably didn't even raise a dime of venture capital. He probably didn't even try to raise venture capital. He probably didn't even boot PowerPoint. He certainly didn't present at Demo or TechCrunch40.

"do what you love, focus on a niche, find a viable business model, and work for yourself"


Thursday, December 06, 2007

Day two at Semicon Japan 2007, From the desk of etc etc....

I can just see the outline of Mt Fuji from my hotel room window, I am on the 17th floor, you can just see it peak up over the far side of Tokyo Bay, it just breaks out into the skyline, showing off it's new white coat, from the base smog that is always present around Tokyo and the suburbs , just like Phoeniz, Az.

Mt Fuji. is mentioned in Japanese literature throughout the ages, Mt. Fuji also houses a warrior tradition: ancient samurai used the base of the mountain as a remote training area, near the present day town of Gotemba. As of 2005, the Japan Self-Defence Forces and the United States Marine Corps operate military bases near Mount Fuji, this mountain is a symbol of tradition and culture in this country, but it is a country that has lost it's way forward, it still has a strong technological base and workforce, but it does not have the entrepreneurial heart that China , India or other South Asia countries and it is showing. I spent a while here when I worked out here, and I was struck by the drive of the people to loose there culture and pick up the trappings of the west, specifically the USA, I now see a passion for all things old European, why does a country with such a strong culture, want to loose it, you can walk down any mall here and you would think you were back in a large city mall of the USA. This is a country that does not take risks, entrepreneur be aware.

So I hear you say, so what's this to do with starting up, well I would like to suggest that you don't try and break into this market with your product until you are a strong established business, and don't expect the 800lb equipment / material suppliers to work with you and your requirements, they do not understand the entrepreneurial model. I was surprised to see as I walked around the exhibitors, the lack of start ups here, not like other industries where distance was never a problem, the only country that has supported it's business community other than the host country is Germany, no UK support. I think that says it all, we have given up trying to penetrate the Japanese market.

I suggest that if you still want to enter this world, get yourself a partner, a Japanese partner, representative/distributor, not cheap, can cost £5k to £10k a month, but it is one way that you will quickly know if there is an interest in your business.


this was sent to me from my mate Bob, enjoy..some light Entrepreneurial fun

Tuesday, December 04, 2007

From my desk in The Manhattan, Chiba Japan

Well I got here without too much trouble, and the efficiency of the Japanese transport system dropped me right at the front door, this is the first day of Semicon Japan,4600 exhibitors. One thing I did notice, that has changed from my last stay in Japan, over in Machida, when I was working for NEC Semiconductors, was the Japanese have become so more efficient at extracting money from you, they have taken a tip from the holiday resorts of the Med and Canaries. The other thing I became aware off the air, there is something about the air in Tokyo that you do not get anywhere else in the world, the smell, fresh with a slight metallic tang, not like Shenzen in where you can't breathe for it...but just a slight tang..yes that's not changed... so today's post from "The desk off Gordon Whyte", is an interesting snap shot of what makes a good entrepreneur.

When Do You Fill Your Gas Tank ? from Pure VC

Every once in a while, I must post about one of my silly theories about life and business. This is one of them.
I don't claim to know exactly what makes a good entrepreneur. Sometimes it is a clever idea. Sometimes it is being at the right place at the right time. Sometimes it is just good luck. What I can say is that most of the successful entrepreneurs I know have certain personality traits. One of the most prominent traits I see is the person who if given the choice to do something sooner versus later, will always choose to do it sooner rather than later.
Maybe I'm just anal retentive or OCD, but I'm the kind of person that is more at ease knowing that everything is done versus waiting to do it tomorrow. The problem with coming back tomorrow is that often you don't come back. Or when you actually do, you don't have the same energy and inspiration to. Or when you come back it is at the most inconvenient time but you are forced to.
So here's a silly question that I don't necessarily ask people, but I tend to go out of my way to observe:
When Do You Fill Your Gas Tank?
On your way home from work?

On your way to work?

When it is 3/4 empty?

When it is less than half empty and you conveniently are near a gas station?

You usually wait until the other driver fills it?

From my observations of close friends and colleagues over the years, I've come up with a silly theory that gas filling tendencies can describe two types of people.
The Doer - One type of person must fill their tank when they discover that it is low or has hit a certain benchmark. These people fill their tank when it is most convenient or if it must be filled, fill it on their way home. They do not usually wait until the next day to do it. They tend to be a bit more conservative and cautious about risk. They do not ever run out of gas. And they are never in a hurry to fill up at the last minute on their way to work.
The Waiter - The other type of person is one who fills the tank only when forced to - the point at which they realize that they must fill it otherwise they cannot get to their desired destination. That person is the kind of person that likes to see how far they can go once the warning light has illuminated. That person also has a tendency to wait for and hope that someone else will fill the tank for them if they share the car. Perhaps they are risk takers also. That kind of person likes to procrastinate and push things back to a later day.
In this silly theory of mine, I've noticed that The Doer is usually a better entrepreneur than The Waiter. I've got no quantitative evidence to prove any of this. But The Doers seem to be more on top of their game and organized than The Waiters. They tend to tackle problems head on and early rather than waiting and stalling to come back later.
Unfortunately, most of the members of my family are Waiters so I do end up spending a lot of time at the gas station.