How to be successful

I listen to a fair number of talks on entrepreneurism and effectiveness and the like, and I've noticed that there a few themes that keep repeating themselves as the keys to success from all these disparate people.

• Be truthful. I think Stan Christensen gave the best advice on this one: Wherever you are on the truthful scale, try to move just a little bit more toward the truthful side. I think this makes it easier to implement. I have been doing this, and it's harder than it sounds, mostly because you usually are not truthful when you screwed up, and so you have to put your ego aside and have some humility.

• Apologize. Randy Pausch summarized this well: an apology has 3 parts:

1. Say you're sorry
2. Take responsibility for screwing up
3. Ask what you can do to fix it.

This one is closely tied to the truth one. Pay attention, most people will try to hide their screwups and won't try to fix them. Steve Young talked about following this framework in his marriage. That's a great place to practice it since it's all upside, no risk in getting it wrong. It really works, and it works in the workplace too. If you apologize and ask to fix it, people will really let you off the hook. Bill Clinton and Martha Stewart could have benefited a lot from listening to this one!

• Work hard and do the right thing. This one comes in many different forms, but I hear it consistently. If you just work hard and try to do the right thing - you know what that is - then you will have success. I think that Google's "do not evil" company culture is a good manifestation of this. Facebook seems to be trying to make their app platform's rules actually enforce this, which has the double benefit of helping their company, which I find very cool. This one is why I don't like contracts all that much - if I have to pull out a contract after I've done business with someone, then probably they're not someone I should be doing business with anymore. I'd rather do business with someone who is honest and dependable, will do the right thing, and not later screw me on a deal.
  

OK, go out and be successful!

Post-Mortem on Dovetail

OK, so Dovetail is technically still in business, so this is more of a personal post-mortem on what I did right and wrong at this startup than one on the company.

If there was one mistake I made in this one, it was hanging on too long. During the summer of 2006, we had already been working on the site for 1.5 years, and we had very little end-user traction relative to the amount of effort we'd put into it. We'd nearly burned through our friends and family money, and there wasn't a lot of hope. However, the market was hot: Grouper was sold, YouTube was about to be sold and traffic to competitive sites was growing. So, we buckled down, raised more money, and kept going. By the time I left, very little had changed from our situation a year earlier, except that I'd spent another year of time and money on it. I should have admitted it was done when it was.

Mistake #2 was going after such a big thing in my second company. I knew this was a classic second time entrepreneur mistake, and I did it anyway. Doh.

Mistake #3 was our selection of technology. We tried to make a Rich Internet Application using very advanced technologies. There is a place for this stuff, but I think we would have been better off just using AJAX or some already known technology. We were able to implement our Facebook app in a matter of weeks, but the GUI for the web site took significantly longer. Not good.

Mistake #4 was not attacking the risk factors soon enough. One of the biggest areas of risk was content. We knew we wanted to be 100% legal (unlike YouTube). We didn't even bother with the studios since we knew their licensing terms would be unacceptable. We all really enjoyed indie films and knew that the films needed better distribution. We spoke to a few indie filmmakers and they seemed interested, so that was enough for us and we set out working on the tech: really nice user interface, and back-end technology which supported reduced bandwidth costs through peer to peer. We knew that these high res films would require a lot of bandwith, and at scale we'd go out of business delivering that bandwidth. Unfortunately, we never really got to scale, and so the back end tech didn't matter: it turned out that the indie filmmakers didn't really want to promote/distribute their films, and people didn't want to watch them, so all the really cool tech that we made ended up being useless. Of course, it's possible that Brett is cooking up something really cool with the tech and this thing could rise like a Phoenix from the ashes, but my point is that we didn't attack the biggest risk factors first.

Things I feel like I did right:
1. Went after an interesting market that I was passionate about. While YouTube is really the only winner in the "online video" market right now, I still believe that a lot of entertainment will be delivered over the internet in the future, and that someone will successfully execute an innovator's dilemma attack on the traditional distribution companies.

2. Outsourced almost everything. Brett, Jason and I tried to outsource as much as we could so that we could focus on the things we thought we of the highest value. While we sometimes had to "take out the trash", I felt we did a good job of spending a big % of our time delivering value to the company.

3. Offshore engineering. During the time we were working on Dovetail, it became possible for small companies to offshore engineering. Brett did an amazing job of identifying great talent in Ukraine, and we worked together to develop processes for working with and managing the team there. Without that team, I don't think we could have gotten done what we did. If you know how to manage an offshore team, it can be a big competitive advantage. If you don't, it can be a big disaster.

4. Efficient capital structure. Because the company was controlled by the founders and owned by the founders and friends, family and a few angel investors, we had tremendous flexibility in our options for what to do with the company. A lot of founders equate fund raising success with business success, and that is a big mistake. If you raise $5M on a $15M valuation, the VC who put that money in is unlikely to let you sell the company for less than $100M. Those types of exits don't really exist, so you're looking at more like $300M+. That's a big deal! There are also exits in the $10-20M area, so if you can raise just a few hundred thousand dollars, then everyone can make money in an exit without having to grow into a relatively big company. I think this is the most efficient capital structure for internet-based software companies these days. If the small company ends up getting huge and you want to "go for it" and raise more money, then that's fine. Slide and Zynga are good examples of this, but they were also founded by people who were previously successful and for whom $20M would be a "failure". If you don't have $10M+ in the bank, then I think your best risk-adjusted return is to maintain maximum control and equity.

Learning about people from their signals

You can learn a lot by watching the signals coming from what people do. My friend Rich Menendez has this analogy that he told me that I like to use as the basis for this:

Let's say it's your first day on the job. You ask a subordinate to come by your desk at 2:15 the next day and put a post-it note on the bottom of your monitor. Basically, the simplest task ever. Then you wait for the next day and see what happens. Does the guy show up at 2:17? Does he put the note in the wrong spot? Does he forget and apologize? Any one of those things is no big deal, but each of them is a signal of things to come. The guy who shows up at 2:!5 sharp and puts the note on the bottom of your monitor is probably a guy you can rely on. The guy who forgets and tells you there was no point is probably not going to be so reliable.

I think these signals are really valuable in all parts of life. If you can pay attention to the little signals that people give, you can reasonably accurately predict what they're going to do. You can give them the benefit of the doubt, but probably they'll prove you wrong and you'll be facing the same situation you predicted would happen based on your earlier observation.

If you're able to read these signals, then you can make an early decision on how to deal with any issues. It's great to be able to make that decision earlier rather than later - you're going to have to deal with it either way.

Perhaps the best book ever written?

A few weeks ago, I was up skiing with my friend Tim, and he introduced me to the book Squallywood. This may in fact be one of the best books ever written. I read it cover to cover the night he showed it to me.

The book is about all the big cliffs and hardest lines at Squaw, along with how to ski them, and the ski videos they've been in. They have a system rated 1 to 10 for difficulty. People say I'm a good skier, although I think I'm not really that good. I think that maybe I'd be willing to try one of the lines in the book that's a 1 on a powder day.

In addition to the descriptions, there is a list of places to stand and watch people huck these lines, as well as the GNAR point system for basically local skier tough-guy points. I think that most people will not understand this at all, which is why I think it's genius.

When I got home after the trip, I ordered the 2nd edition of the book. What could they have improved, I wondered? Well, several things:
1. Some people have since skied some previously unskied lines. Nice.
2. They added a chapter about epic crash stories. Awesome.

The only drawback about the book is that it's about Squaw. I'm really not a big fan of Squaw because I had a bad experience there a few years ago where it was late in the season and a few friends had asked me to go up and sell some day passes they had left over. I did so, and one of their undercover security people pulled me into a room and started being all gestapo on me threatening to arrest me and stuff. I didn't feel like I was doing anything wrong, and they way overreacted, which was lame. So, I generally take my business elsewhere unless I'm with someone who really wants to ski there.

Anyway, I highly recommend this book to anyone who is a good skier, or claims to be a good skier. The GNAR point system even gives bonus points for the ego claim: you get extra points for riding up in the tram and exclaiming loudly "I'm the best skier on the mountain!"

I got an Apple TV

I've been interested in the notion of downloading all of my entertainment content from the internet for a while now. It makes sense. Cable TV sucks - I don't need most of the channels that they give me, and even the channels themselves really don't provide value: why do I care what channel "Heroes" is on? I want to watch the show.

I've tried a lot of these media players over the past few years. The Apple TV is the latest, and I decided to get it because it sounds like it got a lot better with the new software update. Here are my thoughts:

Out of the box: where are the wires? They don't even supply the basic wires necessary to use it. I have a box full of spare wires, and there are multiple ways to connect the Apple TV to your TV, so I'm not sure where I shake out on this. Probably good to not include the wires since I don't have to pay for wires I don't need. That's just for me though.

Once hooked up, it asked me to sync with my iTunes, so I got out my laptop and entered the code, and it started cranking away. The preferences seemed reasonable out of the box, except for trying to copy all of my music. Too much.

Video that played was nice, and generally looked good. Videos I already had on my laptop played nicely. The Apple TV only supports H.264 video, which is kind of annoying because almost all of the stuff I already have is in the DivX or XviD format, so I'm going to have to figure out how to convert it.

I was able to buy a TV show from the iTunes store, and it downloaded and sync'd to Apple TV automagically, so that was cool.

I thought you could buy/rent movies right from the device? If you can, I don't know how to. I RTFM, and I still don't know how to. I see there are movie rentals in iTunes when I browse it on my laptop, but even that is not very clear. Renting movies is one of the things I really wanted to do. Bummed that it's not clear, and the selection is pretty poor too. Movie trailers were pretty cool - I liked being able to browse them right from the remote. Music playing is pretty sweet too. My Airport express was never reliable enough, I think the Apple TV will work.

It's too early to tell whether the Apple TV is going to supplant my 3 year old networked DVD player from Japan, but it's possible. We'll see.

Update: It turns out that they shipped the new Apple TV with the old software. There is no indication of this anywhere. So, now I'm sitting around waiting for the new release.

How to Steal Coffee

I'm writing this in the Foster City Noah's Bagels, and I'm pretty sure I just saw someone steal coffee. Here are the steps to repeat:
1. Enter store, go to coffee station (which is not behind the counter)
2. Fill own travel cup that you brought in.
3. Go to the bathroom. This ensures that any employees that noticed you have now forgot about you.
4. Leave store when done in the bathroom.

The Slingbox is really cool

I just got a Slingbox. It's totally sweet. Here's what they did really well:

1. It just works. Like TiVo, there are a lot of wires, but once you connect them, it pretty much just works. You run the install disks on your computer, they connect to the Slingbox, you click next, next finish, and it working. You can watch TV on your computer. Some caveats - the install CD's software only works on XP and below, so if you have Mac OS or Vista, you have to go to the website and download some software, but that was pretty easy and just took a few minutes.

2. It just works. It was pretty cool that it worked on my home network right out of the box, but it was even cooler that it worked on an external network right out of the box. After I was done installing, I brought my laptop down to a local cafe to grab some lunch, and give the Sling Player a spin. All I did was open the player software and it almost instantaneously started working. Amazing.

3. It just works. Because of where I live, I have pretty slow DSL at home, and I was on a wifi connection at the cafe. I expected the picture to be pretty crappy. Wrong. Somehow they're able to auto-adjust everything so that the picture and the sound all work well, even with that remote connection. Cool.

4. It works on my Treo! I downloaded the Treo app and installed it pretty easily, and I entered a very long string of numbers to identify my slingbox, and it also connected and just worked. The picture even looks pretty good. I don't really take trains or wait for buses, but I do have the unlimited data plan from Verizon, so maybe when I'm mad at them I'll leave this on all night so that I can use a lot of data.

Overall, I'm really impressed with this. I know it works with TiVo too, so I think I'm going to hook up my TiVo to this whole setup. I was wondering what I was going to do about watching the Olympics - now I have my solution!