My entrepreneurial adventures | The Fourth Revolution Blog

Why We Should Reconsider The Reason We’re Doing Startups

In this refreshing post ‘Reconsider‘, David Hansson, the cofounder of Basecamp, exposes his philosophy of startups and why he considers the general view of looking for fast-growing, billion dollar valuation startups to be a general conspiracy.

“Part of the problem seems to be that nobody these days is content to merely put their dent in the universe. No, they have to fucking own the universe. It’s not enough to be in the market, they have to dominate it. It’s not enough to serve customers, they have to capture them.”

On the contrary, David explains his approach: “I wanted to work for myself. Walk to my own beat. Chart my own path. Call it like I saw it, and not worry about what dudes in suits thought of that.” He then declines it on several dimensions:

“I wanted to make a product and sell it directly to people who’d care about its quality.”
“I wanted to put down roots. Long term bonds with coworkers and customers and the product.”
“I wanted the best odds I could possibly get at attaining the tipping point of financial stability.”
“I wanted a life beyond work.”

I am personally rather on his small, human adventure side. What serves to develop a great venture that will eat me out? Let’s make a significant dent in the universe and stay small and human. And we can do so today with the internet and the Fourth Revolution. Be small and have a global impact.

“Life is too short not to do something that matters”: It can matter immensely and still remain small and human.

How Having Great Customers is Essential for Product Development

One of the benefits of the ‘lean startup’ approach is to seek customers very early on the basis of a ‘Minimum Viable Product’.

Having first customers for a startup provides feedback on two levels:

customers are ready to buy the product: the product is bankable!
get real-life feedback from the usage of the product by the customer

The second type of feedback is essential as well and it is important to make the effort to collect it. It is also why the quality of the customers is essential: great customers will provide great feedback which will greatly, in turn, improve the product!

“A great customer wants you to be world class, and is willing to help you get there. Learn to spot them early, and then treat them like gold. Enough said.” – Gapingvoid

From the experience of developing a product in our new startup, I cannot agree more with this statement.

Commodity Projects: Why it’s Not About Risk Transfer, but about Sustainable Lower Cost

In the current days of low commodity prices, operators and contractors are suffering – be it in Oil & Gas, mining, and energy in general. I hear a lot about the need to redefine the contractual setup, and the wish for operators to transfer more risk to the contractors.

Let’s be clear. Risk transfer is tactical. It’s not a sustainable solution. You can transfer more risk to the other party, but if that’s systematic and if it’s not priced in, this solution will sooner or later lead to the disappearance of that party.

Transferring risks sustainably to another party only makes sense if the other party is better geared to manage that risk, in terms of competencies or capability.

What operators in the commodity markets need right now:

projects that cost less,
and which outcome is more reliable in terms of cost and schedule.

Lowering excessive specifications and being more clever in terms of standardization to seek gains from series effects are key for the first point. More effective project execution practices and less complexity in execution are the levers for the second point – and there is a lot of knowledge now in the industry to make it successful, because project governance and management practices are still sometimes poor.

The contractual setup between operator and contractor is essential, but on the long term it should be geared towards these two objectives rather on the short term tactical risk transfer. This also means that operators need to have an industrial policy where they develop contractors that can meet their expectations in terms of capabilities and develop long term relationships that allow to fully deploy series effects over several large projects.

Risk transfer is short term and tactical. Lowering the cost by developing a proper contracting landscape is the sustainable solution to commodity projects’ woes.

How Entrepreneurship Highlights Strengths and Weaknesses

Based on my modest experience as entrepreneur since 4 years+, I increasingly find that entrepreneurship is extraordinarily revealing one’s strengths and weaknesses. In particular of course when business is tough.

Of course, that might be the case for any activity in which you need to commit fully, where success is based on your efforts in a varied range of activities and where your livelihood depends on it immediately (that makes some difference with executive positions in large companies where there is more reaction time and livelihood is less directly dependent on one’s actions). But I haven’t found so many activities responding to these criteria apart from entrepreneurship!

I know for a long time that my weakness is getting along well in social environments and all business development activities. I’m rather shy and introvert, and not at ease in large social activities or cold-calling. Still I have to make the effort as my company’s future depends on it.

Entrepreneurship can thus be recommended as a great self-development activity, in that you are faced with your weaknesses with acute pain, and you need to make the effort to overcome them, going out of your comfort zone. You have to, there is no other choice (apart from going back to salaried employment).

It’s tough, and it feels some days like I’d like to throw the towel. It’s probably good, because I have to work on myself to compensate my weaknesses. It’s exhilarating, because the possibilities are endless.

Why Creating a Startup is About Building a Different Future

“Positively defined, a startup is the largest group of people you can convince of a plan to build a different future” writes Peter Thiel in ‘Zero to One: Notes on Start Ups, or How to Build the Future‘.

early-google-employees — Early Google Employees

This vision of a different future may be more or less ambitious, and intend to touch more or less people in the world. It might be within a small specialized niche or intend to take the world by storm. However, any real startup will be built on the premise of bringing a change to the world.

Actually this criterion might be an excellent differentiator between real startups and new companies that only intend to milk a situation.

Peter Thiel continues along the same trend of thought: “A new company’s most important strength is new thinking: even more important than nimbleness, small size affords space to think”

In my experience, the quick iterations around product, marketing, and business model do mobilize a significant dose of mental power and unending discussions. And indeed, the need to create value in a commercial startup (get revenue before funding is exhausted) is a great incentive to create something that will change the world somehow.

If you want to build a different future in a context where you’ll really mobilize your thinking, creating a startup is the way to go.

How Teamwork Really Makes a Difference in a Startup

When I started my first company Project Value Delivery four years ago I was alone, with some advice from a team of close friends that participated to the capital. With my new venture ProjectAppServices we are a team of 3 involved in the business plus some investors. And this makes a hell of a difference!

Here are some of the main differences:

We gain a lot of time and unnecessary trials by spending a lot of time brainstorming together (I know, it sounds contradictory but actually is true!) and we converge much more quickly towards practical actions
By being a team we can specialize, and each of us concentrate on what we know to do best. I still have to do a lot of different stuff as an entrepreneur, but I can delegate a lot of it to others who can do it better. Action is definitely quicker as well when we work in parallel to achieve a goal
Because of our diverse backgrounds we have access to a much wider network and set of industries to expand our business

Investors and other wise people that commit to support and advise are fine, but of course they are not so involved in the day-to-day grind so they can’t really count as part of the team.

In summary, working as a team definitely improves effectiveness and comfort at the same time, and it is a blessing compared to the solitude I felt at the start of my first venture!. It is enhanced by the fact that we know each other for a long time and we trust each other a lot, which helps!

Of course, it requires more funding and investment upfront so it’s not always possible, but I know now that if I start something new again (which will certainly happen one day), I will try to build a team first and do it together.

Why We Need to Choose the Lessons from Tough Experiences

Following on our previous post ‘Why you Need to Carry the Scars of the Lessons You Learnt‘, it is essential to learn the right lessons from the events from which you carry the scars.

When you go through a tough patch, the situation will leave a deep imprint in your mind in all cases. However, what this imprint is actually is your choice. The same situation will be traumatizing for some people, and exhilarating for others. The lessons we learn will depend on the individual.

By going real and testing, by getting burnt and getting scars, we create our memories. We build ourselves. Still we need to choose what exactly we learn from these situations. It is not always adequate to conclude that it is better to stay far from it; it might be better to conclude that it would be better to approach the issue from another way.

The memories and new reactions you build from the tough event are choices you need to make consciously. If possible, try to avoid falling into the trauma side which may consume you. Consider, if needed with the help of others, what good is to learn from the experience and move from there in building a better yourself.

Do get burnt and get scars, and manage your risks to survive in all cases. Then make sure you take the time to overcome the trauma and build constructive lessons from the experience.

Why you Need to Carry the Scars of the Lessons You Learnt

“The lessons you learn best are those you get burned by, without the scar, there’s no evidence or strong memory” writes Julien Smith in a very interesting short book called The Flinch.

He continues, “The event didn’t actually happen or imprint itself on your brain— you just trusted those who know better. Adults know what’s safe, so you listen. Over a lifetime, those who listen too much build a habit of trust and conformity. Unfortunately, as time goes on, that habit becomes unbreakable“.

Reflecting on my own experience, it is true that those experiences that really created pain are those that are the most present. They inform the way I deal with certain situations.

The point of Julien Smith is that it is not enough to hear or read about situations, it is essential to live through them. Action is key, together with risk, and scars are proof of experience. They are needed, and there is no way you can gain experience without. Go for it!

Why Mastering the Flinch is Vital in Today’s World

I read a very interesting short book called The Flinch, by Julien Smith (available only on Kindle at this stage apparently). The concept is simple. “It’s about an instinct— the flinch— and why mastering it is vital. The book is about how to stop flinching. It’s about facing pain.”

boxing — Boxing, a sport where overcoming the flinch is essential for success

A flinch is ‘to make a sudden, involuntary movement in response to a (usually negative) stimulus‘ (Wiktionary definition). The concept of the book is that this reflex is what beats us in a variety of situations in our current life.

Of course, the flinch was a useful survival reflex in the wild, but in today’s society, it becomes an impediment in a variety of situations. The split second hesitation or pull back leads to being overwhelmed by others or even creates dangerous situations for the self. An example developed in the book is boxing, where training is a lot about overcoming the flinching reflex so as to be able to push into the opponent.

According to Julien Smith, “The flinch is your real opponent, and information won’t help you fight it. […] It’s why the monolithic company gets wiped out by a lean startup— because the big company culture avoids the hard questions. It’s the reason you make the wrong decision, even though you may know what the right one is.”

The flinch is what prevents us from taking risks and from responding quickly to new situations. We need to be able to overcome the reflex in many situations. And it can only be learnt by practicing. When do you start?

Why Avoid the Organizational Comfort Zone Retreat Reaction

In the past months I have observed astonishing reactions from various leaders and organizations to an unexpected economical situation. When faced with a scary and stressful situation, it is amazing how thoroughly people tend to revert to their comfort zone – where they had been successful in the first place. The problem is that this comfort zone might be obsolete! This has dramatic impact on the organizations and individuals.

running back to the comfort zone — Running back into the comfort zone!

I am quite active in the Oil & Gas industry which has suffered a shock since a bit more than 6 months with the sudden drop of the oil price. Some organizations’ leadership have literally freaked out, with the result that they have undone what they had been building for the last few years in just one movement, fleeing back to their traditional business model – the one that made them successful in the first place. Of course, some organizations had taken some measured risk to expand and grow in the last years, but it is really astonishing how people revert to their basic nature when they freak out!

Going back to their comfort zone means often, reverting to business models and operating modes that are thought to be safe while they are in fact obsolete. Where a crisis should rather force to ask tough questions about significant changes in the business model, possible new industry structure and new alliances, those organizations that freak out retreat into their comfort zone and close the door, waiting for the storm to pass.

This creates a most depressing effect on the morale of the top people in the organization, who were at the forefront of building a sustainable new model. When they are not sacked they generally leave quickly.

It is in tough times that the quality of the skipper shows. Retreating into one’s former comfort zone is certainly not the best reaction. Yet it is amazing how leaders sometimes react, with dire consequences on their organizations on the long run.

How Timing Is The Top Success Factor for StartUps

A presentation by Bill Gross of IdeaLab on TED about startup success factors has generated a lot of comments in the last weeks.

In this talk, he gives the results from a study he has done over success factors of startups. This study seems to have been done on a reasonably wide sample. Here are the results (the percentages indicate the % of contribution):

Timing (42%)
Team & execution (32%)
Idea (28%)
Business model (24%)
Funding (14%)

This result has generated a lot of comments, because of course, assigning to timing the number one success factor diminishes the importance of the people in the startup (working hard, having a great idea) and around (Venture Capitalists and funders in particular). It is although a tough nut to crack for those specialists and supporters of business planning and business model development.

Yet from my limited experience, timing appears to be really a significant contributor to the success of new ventures – as well as chance. In our complex world we can’t continue to believe that everything is predictable.

So, if you want to start a new venture, check if the timing is right. You can’t always know, but you can certainly have a hint.

Here’s Bill Gross TED talk (6 mins only)

How I Became a Businessman

It is strange how sometimes we are not fully aware of our own transformation in the eyes of our environment. It so happens that people now look at me as a businessman but I did not realize the change – and they might be right to describe me as such!

business As an engineer by formal training, I still fill-in ‘Engineer’ when asked for my profession on official documents. In reality it has been a while since I crunched engineering problems, and I did a few identity-changing work and study (coach, senior manager, writer…), but I still feel like I apprehend problems with my engineer’s mind.

People tend to classify others in categories and we might not realize that we just changed category! The other day someone said that I was in fact a businessman, and identified that as my profession on an official document.

Ooops! This made me realize that I can probably be identified with this category: I have now created 3 companies, and spend a lot of my time trying to create working business models and combine products and markets. Indeed recently I spent a lot of time trying to establish business partnerships and business ecosystems, and that has become my major occupation.

This person was right. I am a businessman. I did not realize. Maybe I also did not want to realize because somehow I associate this category involuntary with some negative connotation, whereas it should certainly be a respected profession.

That’s how I became a businessman – involuntarily and gradually. With this realization I now embrace this identity and understand better what I need to do. But at the same time I intend not to remain stuck in this category like any other. I still see myself as well as engineer, writer, coach, manager… And further changes will come certainly and I welcome them!

M	T	W	T	F	S	S
						1
2	3	4	5	6	7	8
9	10	11	12	13	14	15
16	17	18	19	20	21	22
23	24	25	26	27	28	29
30