Dave Concannon

When people ask me what my parents-in-law-to-be do for a living, I usually just say that they “Build Pools”. In terms of understatement, that description almost borders on insulting. Their company Natare (@NatareCorp) just finished creating the most impressive pool I’ve ever seen.  This pool is three times the size of an Olympic pool, 55 stories high, and spans three towers.  The engineering complexity of such a project is staggering; the pool joints have to handle stretching, compression, and torsion and the pool itself is designed to prevents waves forming – something that could be catastrophic in a pool like this.

The bigger story is in the company itself – 35 years ago it was a small company selling pool supplies! Through their ambition and focus they’ve grown to become the world’s premier supplier of aquatic facilities, water features, and movable bulkheads – having invented most of the techniques and systems themselves along the way. They’re the two hardest working people I’ve ever met, and lovely to boot. I’ll let the pictures speak for themselves:

From an interesting question on Quora -

“Why is Vodka so expensive?”

Because it is sold in expensive bottles.  The “juice” in a bottle typically costs less than $.10 to make.  The vast majority of vodkas in the US get their liquid from a few contract producers like ADM

Interpolate this into your average tech startup – The ‘value add’ for the majority of startups isn’t in using Ruby on Rails, or Cloud Storage, or a no-SQL database. It’s not in using the latest Agile techniques, or the best continuous deployment system (though all of these things help).  It’s how you make your users feel – Design, User Experience, and that disgusting practice that techies love to hate -  Marketing. Technology is a commodity*.

* There is still room for the disruptive technology innovations of your Google, but how many of those come along?

Having created and subsequently sold the ad network LinkExchange for some $275 million dollars before the dot com crash, you might think that Tony Hsieh would have been happy. A stable job at Oracle bored him, and after a abortive attempt at a web design business he created a simple ad network. Being in control of his own destiny kept him amused until the company grew into a place that no longer attracted the sort of people he wanted to work with. Soon, he was just as bored with LinkExchange as he was at his job in Oracle. “Delivering Happiness” is the condensed version of what he learned in starting Zappos – a company he swore wouldn’t attract people who were just there for the paycheck.

Overview

The early parts of the book are more of a personal memoir, and it’s clear from the onset that Hsieh has the entrepreneurial bug from the get go. He had various schemes to make money throughout his childhood, and several more for avoiding work. He’s got an relaxed writing style that feels more like an informal chat with a friend than anything else.

Zappos

Zappos seemed to happen by fortunate coincidence – Tony had set up an incubator fund after his sale of LinkExchange, and invested in Zappos. After some months, Zappos were running out of cash and with the dot com explosion destroying capital markets it didn’t look like they were going to raise any more money soon. Tony made the decision to invest, and then invest again, and then sold assets to keep the company going – the passion and experience of the founders was contagious and soon he stepped in as CEO.

Culture

If anything, the book is about Zappo’s famed culture. The culture of a company stems from the CEO – If the CEO wants great customer service and happy employees above all else you get Zappos. If the CEO wants profits above all else, customers get treated like cattle a la Ryanair. ‘Drinking the Koolaid’ is so important in Zappos that they regularly turn away highly technical candidates that could help their business simply due to misfit. Arrogant or egocentric employees don’t fit in with their team culture – they’re trying to create more of a family than just a business.  The driving force is to deliver amazing customer service – Zappos offers free shipping both ways, 365-day return policies, and regularly upgrades customer’s shipping to overnight shipping just to deliver that “wow” factor.

Summary

The book spends a lot of time explaining Zappo’s core cultural tenets, and explains their infamous rule to award any employee $2,000 if they want to leave. There’s also an interesting reworking of Maslow’s hierarchy of needs in terms of career happiness. Is the information applicable to other companies? I think so. A lot of reasoning is given to the question of why they picked the specific cultural ‘rules’; each of them has good grounding in motivational psychology. This book is worth a read, if even to get an insight to what can be done when a company doesn’t have squeezing every drop of profit out of it’s customers as it’s main motivation.

You can read more about the book at the website here.

FCA nonsense: I received an advanced copy of this book, the review above is my honest opinion. I would have bought a copy anyway.

The weekly retweet

A recap on any interesting links I posted or retweeted this week

• Congrats to @twilio on the launch of OpenVBX – “This changes everything. Again.” – http://bit.ly/cfBugb // Fawk… awesome. (Via @daryn)
• Kill The Settings, Build Opinionated Software http://kiss.ly/dA7Tc0 /by @mike9r (Via @hnshah)
• Great case studies from @vlaskovits (author of custdev.com) slides at Los Angeles Lean Startup Meetup: http://ht.ly/1W2zP (Via @ericries)

The weekly retweet

A recap on any interesting links I posted or retweeted this week. This week, I got engaged to a wonderful girl. :)

• Killer Kickstarter project – Seedbomb Vending for Greener Cities: http://kck.st/atis4b // This is AWESOME (Via @vlaskovits)
• On HackerNews: Dear MBAs, go the extra mile when pursuing a startup internship http://bit.ly/aCNT5K (Via @JasonFreedman)
• I have seen this chimp-owl clip a 100 times and it still makes me laugh http://www.youtube.com/watch?v=D8p72wmR5H4 (Via @RichardWiseman)
• You are those you surround yourself with – my post on @daveconcannon’s blog http://bit.ly/coMZQE (Via @giangbiscan)

Giang Biscan very kindly sent me a signed copy of Fascinate by Sally Hogshead, and in return I’ve done a guest post review of the book on her blog over at http://www.asable.com.

Giang’s site is worth checking out – In addition to producing the podcasts of Andrew Warner’s interviews on Mixergy.com, Giang also interviews entrepreneurs herself. Not only that, she also organizes startup conferences and meetups in the LA area. She’s got a great perspective on entrepreneurship which I find inspiring. Give it a look!

You can read my review of ‘Fascinate’ by Sally Hogshead on Giang’s blog here.

This is a guest post by Giang Biscan Phd. Read more about Giang at the bottom of this post.

7:00 am: Happy music!  Thanks to a music alarm app, I am up and ready for the day.

8:30am: Brainstorming and collaborating with others.  Thanks to Google docs, Basecamp, Codeita, Mindomo…

12:30am: Staying in touch with my friends through twitter and emails while I am out for lunch. Thanks Seesmic, Hootsuite, and other mobile apps.

5:00pm: Magic moment at the playground with my kids.  My phone can capture and upload it instantly for my family & friends in Asia and Australia to see.

6:30pm: Driving to a startup event to mingle with other startup entrepreneurs. The trusted voice of my GPS guides me there.

3:00am: Conference call with a development team in India. Vokle, Skype or Tinychat allow that.

And publishing this to you right now?  Thanks, Wordpress.

I am never ceased to be amazed at how much technology is allowing us to do today.  Throughout the day, integrated in almost every one of our activities, we are surrounded and supported by amazing technology. Things that seemed so science fiction not that long ago, or even dreamed or thought of, is now at our finger tips.  We are in control. But this article is not about technology.  It’s about people. (Before I go on, please allow me to thank Dave for the opportunity to guest post here on his blog.  It is an honor. The honor is all mine Giang!)

Technology or People?

Whatever the technology, there are people behind it.  Creating. Building. Using.  Sharing. Thriving.  This is why wise investors like Fred Wilson (@fredwilson), Chris Dixon (@cdixon) or Mark Suster (@msuster) and many others make their investment decisions based mainly on people: the team or the entrepreneurs behind the startups.  How incredible is that?  We, someone, many among us, are making it happen.  These are people that aren’t just strangers or celebrities you read about in magazines or see on TV -  these are people like you and me, in the startup/entrepreneurial community (and beyond) that we are friends with, talk to, meet at events, or are at least within reach.

I love this quote:

You are those you surround yourself with

That quote is true either ways you look at it: how you see yourself inside, and how others see you from the outside.  Whether you like to admit it or not, the people around you have a huge influence on who you are, how you think and what you do.  Sometimes the influence is affirmative: we admire/respect someone and want to do things similar ways.  Sometimes the opposite is true.  We learn what not to do by making assessment about someone around us.

The Power of Referral

As for outsiders, you could try to sell yourself by saying how fantastic you are.  But the real impact to the outsiders’ opinions come from those surrounding you.  I am not just talking about “designated” people who give references about you, but also people that others may hear or observe about you from.  Check this tweet by Francisco Dao about how he screens people for his by-invitation-only event “The Retreat“. That type of 3rd party opinion is often considered less biased, and thus has a real impact.

So if we know that we ARE “those we surround ourselves with”, why wouldn’t we try to surround ourselves with bright, energetic, ambitious, supportive, thoughtful (insert more positive words here) people?  What if you don’t have the right people around you right now? Well, then start!  It is never too late.  Life is a journey, it’s not a dress rehearsal for a one-off performance.

This is a high level step by step of how I am approaching it:

How to Surround Yourself with Great People

• Step 1: Set goals before decide the type of people you like to surround yourself with:

I took it as an important task to think about my goals in life as in who I want to be and what I want to do before deciding on the types of people I like to have around me.  It’s like Dr. Stephen Covey said “Begin with the end in mind”.  Or as Simon Sinek’s approach: Figure out your “Why” first, and everything else will become obvious.

• Step 2: Figure out the right environment:

Figure out the types of environments that the people you like would likely be spending time in.  I love the startup community and love to surround myself with other startup entrepreneurs.  The natural environments for us are (surprise, surprise!) the internet such as twitter, Mixergy, Hacker News, blogs, ThisWeekIn network, and offline at various startup events.

• Step 3: Emerge in the right environments:

Once you figured out the right environment, what are you waiting for? For me, it’s full on.  This is my philosophy: No watching from the sideline.  I will write more about this on my blog later, but I truly believe that you should jump right in. Blog.  Tweet.  Events. Whatever it takes.  You can only surround yourself with the right people if you meet the right people.  A great way to meet people is to put yourself out there.  Mark Suster has written some great articles about this.  See for example an article about why you should write a blog, or how great Twitter is to connect with others.

• Step 4: Focus on building relationships:

This is a huge topic, but the fundamentally very simple. Focus on building relationships.  That means focusing on giving, creating value, rather than “what can this person do for me”.  Gary Vaynerchuk often talks about how he is comfortable for the giving balance to be 80% of giving on his side in any relationships (see for example this chat with Kathy Sierra). Gary is a living proof that giving and genuinely caring about people are the golden ticket here.  I will be writing more about this topic on my blog, but don’t worry about getting the short end.  If you focus on giving, the universe has its way of rewarding you in much bigger ways.

On a side note, if you admire someone, and think that they are out of reach, it’s time to think again.  Reach out.  They are more accessible than you think.

• Step 5: Never burn bridges.

Many people can rattle this off the tip of their tongues, but not many live by this:  Never burn bridges.

Unlike financial bankruptcy where your credit record legally comes clean after 7(?) years, the record for some relationship bankruptcies NEVER reset. Never burnings bridges means never deliberately making someone look bad, or do things that harm them.  Even when it’s good for your ego, or business,  or whatever.  If you, hopefully accidentally, do something that may hurt a relationship, make sure you go out of your way to fix it.  We are all human, so mistakes are sometimes forgiven, providing that you show sincere remorse.  If you did everything you could to fix a mistake and it still didn’t work, learn from the experience and move on.  “A friendship lost is one that never was.”  Even after a fall out, keep the door open to allow the other persons to come back and a chance for the relationship to heal.  Never say never. There will be people you meet that you do not want to surround yourself with.  Just politely stay away.

These are the steps that I have been following.  They have helped me meet and create hugely rewarding friendships with many people that I respect and admire.  You may call it technology.  You may call it business.  You may call it networking.  Everything to me is about people and relationships.  Obviously you have your own ways of approaching this, and I would love to hear it, if you are willing to share here in the comments.

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Giang Biscan, PhD is the Producer of Mixergy.com and AsAble.com.  She loves the startup community.

Catch her on Twitter at @giangbiscan, her blog at AsAble.com, on #StartupWeekly chat every Monday at 12pm PST, or in person at many startup events.

Giang is an inspiring and generous entrepreneur – you should connect with her on twitter here: http://www.twitter.com/giangbiscan

Taking a liberal amount of inspiration from Grace Smith’s excellent thefreelancefeed.com, I’ve just launched http://leanstartupfeed.com – A one-stop-shop for all the best thinkers, writers, and innovators working on Lean Startups and Customer Development.

I’m hoping it’ll give a good overview of what’s happening in the world of Customer Development, and get more people involved. Check it out, and let me know who I’m missing – Who else should be included on the feed?

The weekly retweet

A recap on any interesting links I posted or retweeted this week

• Car Sharing Service Zipcar Files for $75 Million IPO http://bit.ly/cYUjYO (Via @jolieodell)
• Presenting 5slices.com at Twitter’s annotations hackfest – http://www.5slices.com (Via @artvankilmer)

Nassim Nicholas Taleb’s (@nntaleb) 2007 bestseller details how popular statistical and economic theories expose us to large amounts of risk while never even acknowledging that they exist. Taleb argues that a combination of evolutionary human nature, academic theory that should not be applied in ‘the real world’, and post-event storytelling deludes us into believing that we have predictive ability over ‘black swan’ events.

Mediocristan

The author asserts that certain qualities of the world we live in exist in a domain that can be mostly measured by the standard bell curve of Gaussian statistics, a domain he calls Mediocristan. A quality such as the height or weight of people exists in Mediocristan, and is represented well on the bell-curve (You’re not likely to see someone 15ft tall, or 2 inches tall for example). In Mediocristan, you can observe things for a while and then make generalizations about how the system works, and the more data you receive the more accurate your predictions will become.

Extremistan

Extremistan is another matter entirely. In Extremistan, things are dominated by one or two very large outliers – take the example of the number of books sold by an author; One JK Rowling or Dan Brown completely overshadows the sales of just about every other author producing literature. Bill Gates’ fortune can barely be compared to the earnings of most entrepreneurs. Where problems arise is that conventional experts attempt to apply Mediocristan’s models to an area where it is not only completely unsuitable, but actively dangerous as it leads to a false sense of security. In Mediocristan, the systems are so complex, intertwined, and dependent on pure chance that predictions are impossible.

The Nature of Humans

While I can’t even touch on all of the great ideas in this book, the sociological implications of his theories are very interesting. While it might be obvious to some that we lie to ourselves in some way or another throughout our lives, the author categorizes the mechanisms we use in interesting ways:

• Narrative Fallacy – Explaining an extreme event after it’s happened in a way that makes it appear obvious. “Of course the Irish housing bubble was going to crash, here are all the reasons…“. This rationalization after the fact hides the obvious truth that at the time, nobody believed that anything extreme was happening.
• Luddic Fallacy – Academic theories of economics, game theory, and general psychology are often based on the premise of the “rational actor” or “market forces” – that somehow people or systems will come to a balanced path based on perfect information. The author argues that these theoretical models are entirely useless in the uncertainty of the real world.
• Confirmation Bias – It is human nature to try to find evidence that confirms our stories, to take past instances that corroborate our theories and treat them as evidence. The problem is, it’s pretty easy to find evidence that will confirm just about any theory. The author suggests that ‘negative empiricism’ – looking for conflicting evidence that disproves a theory is more useful. I found this particularly useful in the context of Customer Development and Lean Startups – Don’t just go out looking to prove your assumptions, look for the instances where your assumption fails and rethink it.

I’m sure I’ve been guilty of these logical traps in the past, and it’s interesting to try and catch yourself in the act.

Benefiting from Black Swans

Taleb gives an insight into his investment style which he believes will give positive exposure to Black Swans – Keeping a high percentage of ones wealth in safe investments such as Treasury Bonds, and a small (10 – 15%) percentage in risky investments such as venture capital and equity investments in startups. A portion of startups will fail, a portion will break even, but there may be that one eBay or Google in the mix that results in a huge multiplicative return on your money. A very interesting theory and one I’m already practicing. I love when someone far smarter than I tells me I’m doing something right almost as often as when they tell me I’m wrong.

Writing Style

Taleb’s argument style is highly confrontational – he has no problems calling Nobel prize winners or captains of industry morons. This makes for a really enjoyable read! He believes what he’s writing is true, and holds little respect for people clinging unwaveringly to their sacred cows. His assertion that in certain fields (economics, politics, psychology) there are no experts, only opinions rang very true for me.  His ideas resonate with my own beliefs that for all the learning and theory and rationalization, a lot of the time success is going to come via keeping yourself open to the chance encounters of pure dumb luck. This was probably one of my favorite books I’ve read this year, and I think I’m going to give it another read in a few months.