How to Change the World

The Top Ten Stupid Ways to Hinder Market Adoption

Here’s a compilation of silly and stupid ways companies are hindering adoption of their products and services. I must admit, some of the companies that I’ve invested in have made these mistakes—in fact, that’s why I know these mistakes are (a) silly; (b) stupid; and (c) hinder adoption.

1. Enforced immediate registration. Requiring a new user to register and provide a modicum of information is a reasonable request—I just think you should do it after you’ve sucked the person in. Most sites require that registration is the first step, and this puts a barrier in front of adoption. At the very least, companies could ask for name and email address but not require it until a later time.

   A good example of a site that does the right thing is Netvibes. It allows you to do a high level of customization without registering. (Thanks to Glenn Kelman)

2. The long URL. When you want to send people an URL the site generates an URL that’s seventy characters long—or more! When you copy, paste, and email this URL, a line break is added, so people cannot click on it to go to the intended location.

   Here’s an URL for a billiard table copied and pasted from the CostCo site. Just how many billiard-table models could CostCo be selling?

   http://www.costco.com/Browse/Product.aspx?Prodid=11197553&search=billiard%20table&Sp=S&Mo=8&cm_re=1-_-Top_Left_Nav-_-Top_search&Nr=P_CatalogName:BC&Ns=P_Price|1||P_SignDesc1&N=0&whse=BC&Dx=mode+matchallpartial&Ntk=All&Dr=P_CatalogName:BC&Ne=4000000&D=billiard%20table&Ntt=billiard%20table&No=0&Ntx=mode+matchallpartial&Nty=1&topnav=&s=1

   The justification often goes like this: “We create a long URL because people with Crays might break our code and see private pages. Seventy characters that can be twenty-six lower case letters, twenty-six upper case letters, or ten numbers ensures that no one can break our code since the possible combinations outnumber the quantity of atoms in the universe.” This is what keeps sites like TinyUrl and SnipURL in business.

   Also, speaking of URLs, it’s good to have an easy naming convention for URLs. MySpace, for example, creates easy-to-remember URLs like http://www.myspace.com/guykawasaki.

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Test: Can people communicate your site’s URLs to others over the phone?

Extra credit: People using Verizon and can do this despite its coverage.

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3. Windows that don’t generate URLs. Have you ever wanted to point people to a page, but the page has no URL? You’ve got a window open that you want to tell someone about, but you’d have to write an essay to explain how to get that window open again. Did someone at the company decide that it didn’t want referrals, links, and additional traffic? This is the best argument I can think of for not using frames.

4. The unsearchable web site. Some sites that don’t allow people to search. This is okay for simple sites where a site map suffices, but that’s seldom the case. If your site has a site map that goes deeper than one level, it probably needs a search box.

5. Sites without Digg, del.icio.us, and Fark bookmarks. There’s no logic that I can think of why a company would not want its fans to bookmark its pages. And yet many companies don’t make this possible. When my blog hits the front page of Digg, page views typically increase by a factor of six or seven times. It’s true that the Digg effect wears off quickly, but some new readers stick around and that’s a good thing.

6. Limiting contact to email. Don’t get me wrong: I love email. I live and die by email, but there are times I want to call the company. Or maybe even snail mail something to it. I’ve found many companies only allow you to send an email via a web form in the “Contact Us” page. Why don’t companies call this page “Don’t Contact Us” and at least be honest?

7. Lack of feeds and email lists. When people are interested in your company, they will want to receive information about your products and services. This should be as easy as possible—meaning that you provide both email and RSS feeds for content and PR newsletters.

8. Requirement to re-type email addresses. How about the patent-pending, curve-jumping, VC-funded Web 2.0 company that wants to you to share content but requires you to re-type the email addresses of your friends?

   I have 7,703 email addresses in Entourage. I am not going to re-type them into the piece-of-shiitake, done-as-an-afterthought address book that companies build into their products. If nothing else, companies can use this cool tool from Plaxo or allow text imports into the aforementioned crappy address book. When do you suppose a standard format will emerge for transferring contacts?

9. User names cannot contain the “@” character. In other words, a user name cannot be your email address. I am a member of hundreds of sites. I can’t remember if my user name is kawasaki, gkawasaki, guykawasaki, or kawasaki3487. I do know what my email address is, so just let me use that as my user name.

10. Case sensitive user names and passwords. I know: user names and passwords that are case sensitive are more secure, but I’m more likely to type in my user name and password incorrectly. One of the funniest moments of a demo is when a company’s CEO can’t sign into her own account because she didn’t put in the proper case of her user name or password. I’ve seen it happen.

11. Friction-full commenting. “Moderated comments” is an oxymoron. If your company is trying to be a hip, myth-busting, hypocrisy-outing joint, then it should let anyone comment. Here’s an example of one such policy:

    Q. Who can leave comments on GullyHag

    A. Anyone who has been invited, either by us or by a friend. The invite system works like Gmail. We’ve invited a bunch of our favorite execs, bloggers, and friends to comment, then given them invitations to share with their friends and colleagues. That way, the burden of inclusion, and exclusion, is shared.

    The concept that people have to be invited to post comments is pathetic—if you hold yourself out as a big cojones company, then act like it. Even the concept that one has to register to post a comment is lousy. There have been many times that I started to leave a comment on a blog but stopped when I realized that I’d have to register.



12. Unreadable confirmation codes. Don’t get me wrong: I don’t support spam or robots creating accounts. A visual confirmation graphic system is a good thing, but many are too difficult to read. For example, this is what I got when trying to create a Yahoo! account. Is that an uppercase “X”? Is the last character an “s,” “5,” or “S”? Maybe this only affects old people like me, but it seems that all one merely has to prove is that you’re not a robot so a little bit of fuzziness should be good enough. For example, if the code is “ghj1lK” and someone who enters “ghj11K” is close enough.

13. Emails without signatures. There have been many times that I wanted to immediately call the sender or send him something, but there’s no signature. Also, when I book an appointment with a person, I like to put in his contact information in case I need to change it. Communication would be so much easier if everyone put a complete signature in their email that contains their name, company, address, phone, and email address.

    On a corporate level, communication would be so much easier if companies stop sending emails with a warning not to respond because the sender’s address is not monitored. I don’t mean they should not include the warning. I mean they should monitor the address.

14. Supporting only Windows Internet Explorer. Actually, I’m not nearly as vehement about this as you might think. Supporting Macintosh, Safari, and other Windows browsers is a lot of work, so this is your call. If you define your market as only the people who use Windows Internet Explorer, so be it. You may have to really invest some effort into this one, but all the other items in this list are stupidly simple.

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The Entrepreneur's New Year's Resolution: "I Will Fix My Pitch"

Here’s a New Year’s resolution for entrepreneurs: ”I will fix my pitch.“ And here’s a suggestion on how to do this written by Bill Reichert, my colleague at Garage Technology Ventures.

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Endless articles, books, and blogs have been written on the topic of business plan presentations and pitching to investors. In spite of this wealth of advice, almost every entrepreneur gets it wrong. Why? Because most guides to pitching your company miss the central point: The purpose of your pitch is to sell, not to teach. Your job is to excite, not to educate.

Pitching is about understanding what your customer (the investor) is most interested in, and developing a dialog that enables you to connect with the head, the heart, and the gut of the investor. If you want advice about pitching, you can ask a venture capitalist, but you probably won’t get a very good answer. Most VCs are analytic types, and so they will give you a laundry list of topics you should cover. They won’t tell you what really “floats their boat,” mainly because they can’t articulate it in useful terms. “I know it when I see it,” is about the best answer you’ll get.

What is the investor most interested in? Contrary to popular belief, the venture capitalist sitting at the other end of the table glaring inscrutably at the presenting entrepreneur is not thinking, “Is this company going to make a lot of money?” That is the simple question that most entrepreneurs think they are answering, but they are missing the crux of the venture capital process. What the investor is really thinking is, “Is this company the best next investment for me and my fund?” That is a much more complex issue, but that is what the entrepreneur has to pitch.

So, the pitch has to accomplish three things:

• Provide a good, clear, easy-to-repeat story—the story of an exciting new startup.

• Fit with other investments the individual venture capitalist has made and the investments the firm is chartered to make.

• Beat out the other investments the firm is currently considering.

These latter two issues are beyond the scope of this modest guide. So for now, let’s just concentrate on telling a good story.

Tell a Good Story

Most of the articles on pitching are generally right about the topics, even if they miss the nuance (sell, don’t explain). But don’t take any template as graven in stone. Your story may require a moderate, or even a dramatic, variation on the list of presentation slides (listed below). You may need to explain the solution before you can explain the market; or if you are in a crowded space, you may need to explain why you are different than everyone else early on in the conversation; or you may want to drop some very impressive brand-name customers before you explain your product or your market. The one thing you may not do is expand the number of slides to twenty (or thirty or fifty)! Other than that, let the specifics of your situation dictate the flow of your slides.

Nevertheless, it is useful to have a guide. With the caveats above in mind, here is a basic outline for your pitch:

• Cover Slide: Company name, location, tagline, presenter’s name and title. If there are multiple team members participating in the pitch, put names on the next slide instead. Key objective: Everyone in the room should know the basic value proposition of the company, including the target market, before the next slide is shown. All the words should not be on this slide, but reinforce and extend the tagline orally so that that everyone has a foundation for what is to come.

• Intro Slide: Team. The three or four key players in the company. For some reason, everyone puts the team slide at the end, but investors want to know this at the beginning, and it is common courtesy to make sure everyone is introduced. But make this short, crisp and relevant. This is not the time to share everyone’s life story, or detail the resumes of all six members of the advisory board. Focus on a significant, relevant accomplishment for each person that identifies that person as a winner. In ten to fifteen seconds, you should be able to say three or four sentences about your CTO that says everything the investors want to know about him or her at that moment. Key objective: Investors should be confident that there is a good credible core group of talent that believe in the company and can execute the next set of milestones. One of those milestones may be filling out the team, and so it is important to convey that the initial team knows how to attract great talent, as well as having great domain skills. If there is a gap in the team, address it explicitly, before investors have to ask about it.

• Slide 1: Company Overview. The best way to give an overview of your company is to state concisely your core value proposition: What unique benefit will you provide to what set of customers to address what particular need? Then you can add three or four additional dot points to clarify your target markets, your unique technology/solution, and your status (launch date, current customers, revenue rate, pipeline, funding needed). Key objective: Flesh out the foundation you established at the beginning. At this point, no one should have any question about what it is that your company does, or plans to do. The only questions that should remain are the details of how you are going to do it. Another key objective you should have achieved by this point in your presentation is to make sure that if there are some compelling brand names associated with your company (customers, partners, investors, advisors), your audience knows about them. Feel free to drop names early and often—starting with your first email introduction to the investor. Brand name relationships build your credibility, but do not overstate them if they are tenuous.

• Slide 2: Problem/Opportunity. You need to make it clear that there is a big, important problem (current or emerging) that you are going to solve, or opportunity you are going to exploit, and that you understand the market dynamics surrounding the opportunity—why does this situation exist and persist, and why is it only now that it can be addressed? Show that you really understand the very particular market segment you are targeting, and frame your market analysis according to the specific problem and solution you are laying out. In some cases, however, the problem you are attacking is so obvious and clear that you can drop this slide altogether. You do not have to tell investors that there are a lot of cell phones out there or that teenagers like to socialize. Save yourself, and them, the pain of the obvious.

• Slide 2.1: Problem/Opportunity Size. Even if your market opportunity is not obvious, you can assert the size of your opportunity on slide 2. Sometimes you may need a slide to clarify the factors that define the size and scope of the opportunity, particularly if you are going after multiple market segments. There may be a unique market dynamic or emerging trend that requires explanation. Do not use this slide to quote the Gartner Group or Frost & Sullivan; show that you really understand where your prospective customers are from the ground up.

• Slide 3. Solution. What specifically are you offering to whom? Software, hardware, services, a combination? Use common terms to state concretely what you have, or what you do, that solves the problem you’ve identified. Avoid acronyms and don’t try to use these precious few words to create and trademark a bunch of terms that won’t mean anything to most people, and don’t use this as an opportunity to showcase your insider status and facility with the idiomatic lingo of the industry. If you can demonstrate your solution (briefly) in a meeting, this is the place to do it.

• Slide 3.1. Delivering the Solution. You might need an extra slide to show how your solution fits in the value chain or ecosystem of your target market. Do you complement commonly used technologies, or do you displace them? Do you change the way certain business processes get executed, or do you just do them the same way, but faster, better and cheaper? Do you disrupt the current value chain, or do you fit into established channels? Who exactly is the buyer, and is that person different than the user?

• Slide 4. Benefits/Value. State clearly and quantify to the extent possible the three or four key benefits you provide, and who specifically realizes these benefits. Do some constituents benefit more than others, or earlier than others? These dynamics should inform your go-to-market strategy, and your product/service roadmap, which you will discuss later.

• Slide 5. Secret Sauce/Intellectual Property. Depending on your solution, you might need a separate slide to convince investors that no one else can easily duplicate or surpass your solution (assuming that’s actually true.) If you are in a business sector in which intellectual property is important, this is where you drill down into your secret sauce and proprietary technology. Again, boil this down to simple elements and terms, devoid of jargon. Do not walk the audience through a guided tour of your detailed product architecture. Instead, highlight the elements of your technology that give you unique potential for leverage and scale as you grow. If you do slides 4 and 5 well, it will be easy to make the case for your...

• Slide 6. Competitive Advantage. Okay, so how are you better than everyone else, including the status quo? Most entrepreneurs misunderstand the critical objective of this slide, which is not to enumerate all the deficiencies of the competition (as much fun as that may be.) Just because you have really cool technology, secret sauce, and intellectual property does not mean you will win. Other factors like domain expertise, high-level connections, and special relationships with customers, vendors, and other companies also play a part. Your key objective is to convince the investor that lots of folks will buy your product or service, even though they have several alternatives (one of which may be to do nothing), for very good reasons.

  The best way to convince an investor is to have referenceable customers or prospects who will articulate in their own words why they bought or will buy your offering over the alternatives. Use this slide to summarize the three or four key reasons why customers prefer your solution to other solutions and to the status quo. Many entrepreneurs have been coached to use a four-square matrix that shows that they are in the upper right-hand quadrant, but this has become a joke in the venture community. Check-boxes are better, if they are not abused. Make sure your check-box criteria reflect the market’s requirements, not just your product’s features.

• Slide 6.1. Competitive Advantage Matrix. Depending on how important the analysis of competitive players is in your market segment, you may need a matrix to provide a detailed list of competitors by category. Preferably, you develop this as a “pocket slide” to be used for Q & A, if necessary. It is important, however, that you do your homework on the competition, and that you don’t misrepresent their strengths or their weaknesses.

• Slide 7. Go to Market Strategy. The single most compelling slide in any pitch is a pipeline of customers and strategic partners that have already expressed some interest in your solution—if they haven’t already joined your beta program. Too often this slide is, instead, a bland laundry list of standard sales and marketing tactics. You should focus on articulating the non-obvious, potentially disruptive elements of your strategy, or you can frame your comments in terms of the critical hurdles you need to get over, and how you are going to jump them. If you don’t have a pipeline, and there is nothing unique or innovative about your strategy, then drop this slide and make the elements of your sales model clear in the discussion of your business model (next slide).

• Slide 8: Business Model. How do you make money? Usually by selling something for a certain price to certain customers. But there are lots of variations on the standard theme. Explain your pricing, your costs, and why you are going to be especially profitable. Make sure you understand the key assumptions underlying your planned success and be prepared to defend them. What if you can’t sustain the price? What if it takes twice as long to make each sale? What if your costs don’t decline over time? Some investors will want to test the depth of your understanding of your business model. Be ready to articulate the sensitivity of your business to variations in your assumptions.

• Slide 9. Financial Projections. The two previous slides above should come together neatly in your five-year financial projections. [Bill and I disagree here. I think a five-year projection is impossible.] You should show the two or three key metrics that drive revenues, expenses and growth (such as customers, unit sales, new products, expansion sales, new markets), as well as the revenue, expense, profit, cash balance, and headcount lines. The most important thing to convey on this slide is that you really understand the economics and evolution of a growing, dynamic company, and that your vision is grounded in an understanding of practical reality. Your financials should tell your story in numbers as clearly as you are telling your story in words. Investors are not focused on the precision of your numbers; they’re focused on the coherence and integrity of your business plan.

• Slide 10. Financing Requirements/Milestones. It should be clear from your financials what your capital requirements will be. On this slide you should outline how you plan to take in funding—how big each round will be, and the timing of each—and map the funding against your key near-term and medium-term milestones. You should also include your key achievements to date. These milestones should tie to the key metrics in your financial projections, and they should provide a clear, crisp picture of your product introduction and market expansion roadmap. In essence, this is your operating plan for the funds you are raising. Do not spend time presenting a “use of funds” table. Investors want to see measures of accomplishment, not measures of activity. And they want to know that you are asking for the right amount of money to get the company to a meaningful milestone.

• Summary Slide. This slide is almost always wasted. Most entrepreneurs just put up three or four dot points about how wonderful their investment opportunity is. Generally the words are the same words that investors hear from scores of other entrepreneurs, such as, “We have a huge opportunity, and we will be the winners!” Your key objective on this slide is to solidify the core value proposition of your company in words that are memorable and unique to your company. If the venture investor in the room has to give a short description of your company to his partners, these are the words you want used. This is a good place to reinforce your tagline, or mantra—the short phrase that captures the essence of your message to investors. The best solution to creating your summary slide is to imagine that this is the only slide you will ever be able to present. If you had to do your whole pitch in one slide (with 30 point font), this is that slide.

So here we have a good general outline for pitching your company. But remember, it’s about selling your investment proposition, not about covering points. Don’t get fixated on using this or any other template. You should know the issues about your company that investors are most concerned about. Those are the issues you need to concentrate on. Make sure you address all the predictable “burning questions” as early as you can in your presentation, even if it means violating the sequence above.

Tips On Effective Pitching

How do you turn a pitch from a monolog to a sale? Make sure every point you make connects with your audience. Keep your text very, very short. Really. Please. Use charts and pictures if you can. And engage your prospect. Ask questions. “Do you think this market opportunity is interesting?” “Have you seen anyone else addressing this problem?” “Do you think CIOs would be interested in a solution like this?” You may get some tough responses, but you will know a lot more about what is going on in the investor’s mind, and you will be engaging them in your story—instead of letting them play with their Blackberries under the table.

Some additional tips to improve the effectiveness of your pitch:

• Make sure that everyone in the room is introduced. Rarely do entrepreneurs ask the investors in the room to introduce themselves. While it is appropriate to be familiar with each investor’s bio (assuming it is on the web), it’s fair to ask something like, “What investments have you been looking at recently?” And if there are some other faces in the room, you should absolutely have them introduce themselves and provide a little background.

• Don’t use a feel-good, visionary “mission statement” on your overview slide. Mission statements have also become a joke in the venture industry. It’s like saying, “Our projections are conservative.” Focus on making sure your statement of your company’s value proposition is crisp, clear, and unique.

• Prepare good use cases. Sometimes, no matter how simple and clear the description of a product, what the investor really needs is a concrete example of how people will actually use it. In some cases there will be multiple different use cases. You may need to outline these to get your point across.

• Drop names, early and often. If you really have some brand names involved in your company—as customers, as partners, as members of the team—don’t keep them a secret for the first nine slides; make sure the investor knows about them early in the presentation. Be prepared for the investor to contact every single name you drop—whether it’s a person or a company. If you are going to drop names, they had better be real.

• Make sure you can tell the entire story in ten to fifteen minutes. Even if you have time, your total presentation should be no longer than twenty minutes. You want to have time to engage the investors and discuss their questions or concerns. If you think you have additional critical points that have to be made, prepare “pocket slides” that you can put up if the topic arises.

• Do the math. Average entrepreneur pitch: thirty-eight slides. Average VC attention span/cranial capacity: ten slides.

• Learn how to control the flow of the meeting, without seeming inflexible or anxious. Watch and listen. Body language and questions will tell you if you are okay deferring a point or if you need to address it immediately. If you let your audience take over the flow, you will probably wind up creating a confusing, incomplete impression of your company. But if you don’t address the “burning questions” early and effectively, the investors won’t hear anything else you say.

• Don’t lie. You would think this goes without saying, but in their enthusiasm for their creations, entrepreneurs tend to slip across the line all too often. Please do not interpret our exhortation to “sell” as an endorsement of hype, exaggeration, misrepresentation, spin, or lying. The best salespeople are credible and trustworthy. It is more important that investors trust you than that they understand every nuance your business.

• You don’t have to be “conservative,” but you do have to be realistic. Most entrepreneurs fail to be realistic about how long things take in the real world (versus the spreadsheet world). Whether it’s the time to complete product development, or the time to close the next ten sales, entrepreneurs are pathologically optimistic. As with your financials, find examples of comparable challenges addressed by other companies, and use that data in your model.

• Don’t put so much text on a page that the investor has to read it. Everything should be short, content-rich bullets in a font large enough to read without squinting. The words are simply reinforcement of the points you are making. Pictures, graphs, and charts should be uncluttered and make clear, compelling points. If they have to be deconstructed and explained piece by piece, you will lose focus and momentum.

• Don’t use your presentation stack as a standalone document. It is perfectly okay if it is not readable when you are not around. That’s the job of your executive summary or your business plan. If you are looking for a guide to writing an executive summary, you can find our version online: “The Art of the Executive Summary.”

A good pitch is rare because it is so hard to execute on everything else that has to be done to build a successful company. But the ability to pitch is a key indicator for investors—if the entrepreneur doesn’t know how to sell, how can he or she build a great company?

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Ten Questions With Aziza Mohmmand

What’s the most inspiring story of entrepreneurship that you’ve heard in 2006? My answer does not involve two guys in a garage who sell their company to Google for $1.6 billion. No way...my answer is a woman who runs a soccer-ball factory in Kabul, Afghanistan.

Her name is Aziza Mohmmand, and she told me what it takes to be a woman entrepreneur in Afghanistan. I met Aziza when I spoke to a group of Afghani women who were attending a class in entrepreneurship at Thunderbird in Glendale, Arizona. (Interestingly, Thunderbird is a former Air Force base.)

1. Question: What is your life story?

   Answer: I was born in Mazar-e-Sharif in 1959 to a liberal family. My father was a prosperous businessman. After high school I went to Kiev, Ukraine and received my masters degree in Social Sciences. Soon after I came back to Kabul in 1983, I was hired by Kabul Institute of Pedagogy as an instructor.

   In 1997 I continued my endeavors in education by starting a tutoring business in my home. My courses were offered to boys and girls both in one class, and they were popular across Kabul City especially during the Taliban regime when the girls were deprived of education. Gradually my classes were limited only to girls, and my home was the hope for 385 girls to study from first to ninth grade.

   Despite all the restrictions set forth by the Taliban regime and the challenges I faced every day, I continued my work until June, 1998 when the government confiscated girls’ schools all across the country and banned young women and girls from social life or participating in any educational institution. Consequently my school was forcibly closed, and I was desperate to find a safe place for my family.

   Thus, we moved to Pakistan to find our destiny and the lost hopes of my family. In Haripour, Pakistan I was hired by an American institute called Safe Children and worked as an instructor for three years. When the interim government announced its arrival in Afghanistan, I came back to Kabul and started my nonprofit organization named Moscau, and it was soon registered at the Department of Economy.

   In my NGO, I trained more than 2,000 men and women in baking, sewing, leather treatment, ball assembly, carpentry, electrical, blacksmith, plumbing, computer, and English language. In the ball assembly department, I hired 200 trainees who were widows and their family’s bread winners. They had no opportunities to work elsewhere.

   In order to help them improve, I hired some masters of leather goods to advance these women’s skills in ball assembly with my own money, but I soon realized that I couldn’t sell my products through my NGO. Therefore, in 2003 I registered the Moscau Leather Goods and Ball Production company with the Investment Committee of Afghanistan.

   My intention was to make a difference in the life of women in Afghanistan and keep them busy while they have an income with an active role in the growth and building of the new infrastructure of the country. In 2006, I established a foundation named Women’s Handicraft and Ball Assembly Industry and registered it with the Afghanistan Department of Justice.

   This foundation serves women of Afghanistan to improve their skills for making leather goods and leather balls. I am the first woman in Afghanistan involved in the leather goods industry. Despite numerous challenges in the beginning, now I feel very successful. I can produce any design in leather goods and return the finished product in any volume on the agreed-upon deadline.

2. Question: How many people work for your company?

   Answer: There are 220 widows who are the bread winners of their families in ball assembly and forty women in the leather goods department. I also work with five masters who specialize in treatment of leather goods.

3. Question: What kind of products do you sell?

   Answer: Different kinds of soccer balls, volleyballs, and handballs. In the leather goods department, I sell suitcases, wallets, purses, and other leather goods products.

4. Question: How many balls do you sell per year?

   Answer: In the first years we didn’t sell much, maybe 5,000 or 6,000 per year. In 2006, however, we sold 10,000 soccer balls, more than 3,000 children soccer balls, and 1,000 volleyballs. Our revenue in leather goods department was also good. Right now we have a contract with UNICEF for 173,000 school bags.

5. Question: How much do your employees make per month?

   Answer: Women in the ball assembly department are paid by piece. The skilled masters, however, are paid $150 per month.

6. Question: Where did you get the money to start the company?

   Answer: I started with $5,000 personal savings. I also took loans from friends in the beginning. I was lucky to have $3,000 worth of machinery from my previous business which I could use in the leather goods production.

7. Question: What’s the first thing you’re going to tell your family about America?

   Answer: The kindness and hospitality of the Americans.

8. Question: What did you like the most and the least about America?

   Answer: What I liked was the discipline in driving, great roads, advancement in the infrastructure of the country, respect, cooperation of people with each other, the value of human beings, execution of the law, hard-working people, peaceful environment, and beautiful nature. During my stay in the US, there was nothing that I didn’t like.

9. Question: What are the general living conditions for a woman in Afghanistan?

   Answer: Just in the center of the Kabul City living conditions are good for some women, but life in rural areas is not so good. Freedom for women outside big cities is very little. Maybe 10% of the women in rural areas are independent and have freedom of action.

   In rural areas, life is better for educated people. In general, life is okay in villages and small cities. Girls can now go to school the same as boys. Unemployment rate is pretty high for young people even in Kabul, but in rural areas unemployment is much higher.

10. Question: What factors does a woman have to overcome to start and run a company in Afghanistan?

    Answer: If a woman decides to do business, she should be ready for many problems dealing with security, religion, family, regional concerns, and gender. Women have to overcome all the above problems in order to be successful in their businesses. Most women who start a business normally enjoy their husband’s, brother’s, and father’s support.

11. Question: Under Taliban rule, what was your life like?

    Answer: My family and I had a lot of problems at the beginning of the Taliban regime. My home tutoring practice didn’t observe Taliban’s regulations for separation of boys and girls. Later in 1998 I was forced to immigrate to Pakistan where I was constantly threatened to death by the religious hard liners. Eventually I was supported by the security forces of Pakistan and could have a safer life in exile.

12. Question: How has your life changed since the war?

    Answer: After the fall of Taliban, some circumstances, including the establishment of my NGO have made great changes in my life. I started my own business through which I could educate thousands of Afghans. I could rub elbows with men to achieve the freedom of running my business and dive into the future.

13. Question: Are you living in greater fear of terror because you are an entrepreneur?

    Answer: Obviously, no life is without problem, but human beings have a great power of adaptation. We work hard to annihilate the dangers and the risks that we take every minute of our lives. Over the past four years, since I started my business, I have never been threatened for doing business per se.

14. Question: What would happen if America pulled its troops out of Afghanistan?

    Answer: The US forces allied with the international peacekeeping troops are the major support for peace in Afghanistan. Without their active support, bloodshed will cover all the country and people of Afghanistan will no longer experience peace.

15. Question: What can someone who’s just a “regular person” do to help your country?

    Answer: Anybody in any country can help his/her fellow human being. However, in an advanced capitalist country such as the US, entrepreneurs can greatly help the Afghans who are novices in investment. Americans can further provide social, economic, and humane support for Afghans. I need your support in order to better help the women in Afghanistan who are expecting my support.

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Is Advertising Dead?

This is a video of a Churchill Club panel (9/20/06) that I moderated called Next Generation Insights. It featured six Silicon Valley young adults whose ages ranged from fifteen to twenty four.

These are some factoids that I found interesting:

• They send as many as 4,000 text messages per month from their phones.

• They watch one to two hours of TV per week. And they use Tivo or a recording device to fast-forward through commercials during that short timeframe!

• They all have iPods, and they are very loyal to Apple.

• They buy approximately forty songs a month on iTunes.

• Helio is the hot phone (though none of them had one). I had never heard of it before!

Here’s a good analysis of the panel. The bottom line message is that before you waste your marketing dollars, you should watch what the panelists had to say about these topics:

• Their fascination with MySpace and FaceBook.

• How they use their cell phones—and seldom use a landline.

• How they use computers—and Microsoft Office!

• The surprisingly high degree to which they resent being “marketed to.”

• The even more surprising degree to which “old media’ like magazines (specifically Wired for the males and US for the females) are effective.

• Their dislike of online advertising whether banner, pop-up, or an ad running before or after a free video clip.

When I asked how advertisers can get to them, there wasn’t a lot of good news. Product placement may work if it’s subtle (specifically in The OC, Tivo be damned), but it sure appears that most forms of digital/online advertising are dead in the water for reaching young people. This is a whole new world...

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One panelist’s mom followed up with me and gave me this list of the sites that her daughter visits:

• Perez Hilton

• The Superficial

• Defamer

To put it mildly, I didn’t exactly have these bookmarked or in my RSS feeds. :-)

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One more interesting point that has nothing to do with the panel. Note how useful it is to have tags in a video like this— that is, the difference between Veotag and GoogleVideo.

• Veotag version

• GoogleVideo version

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Everything You Wanted to Know About Getting a Job in Silicon Valley But Didn't Know Who to Ask

Many people ask me for advice about getting a job in Silicon Valley, so here’s the inside scoop. Not everyone will agree with this advice, and some will outright deny what I’m saying, but if you use these tips you will stand head and shoulders above most candidates.

1. Love what the company does. Passion for what a company makes or does is the most important factor in getting a job in Silicon Valley. Companies here are built on passion—indeed, perhaps more passion than reality. Hence, they hire passionate people who are already in the Reality Distortion Field. The question is, How do you show your passion?

   The best way is to profess your love of the company’s product or service, and I literally mean “love” not “read about,” “have used,” or “looked at the web site.” If the company is at all enlightened, passion can overcome the lack of a “perfect” educational background and work experience.

   The second best answer is to “know” the company. There never was, but there certainly isn’t now, any excuse for not knowing a great deal about the company. Hardly rocket science, right? But you’d be amazed at how many candidates show up with very little knowledge and sink their chances by asking something as stupid as, “What do you guys do?”

   Corollary: Rather than hoping that the openings that you like are at companies that you like, find out if the companies that you like have openings that you like. (Forgive me Harold Keables, for this sentence sets a new record for the number of “thats.”)

2. Create a solid pitch and bring it with you. In Silicon Valley, you can tell that a person is pitching because her lips are moving. Think of your resume as a “PowerPoint pitch” for you, the product. Hopefully you’ve heard of the 10/20/30 Rule of PowerPoint...here’s the 1/2/3 Rule of Resumes:

   • 1 page long. When some job candidates read this, they will think, “Guy is referring to the hoi polloi and unwashed masses, not me. I have ten years of experience at four different companies covering five different positions. My resume needs to be two—maybe even three-pages—to adequately explain the totality of my wonderfulness. And the more I mention, the more the company might see things they like.”

     As a rule of thumb, if you can’t pitch your company in ten slides or pitch yourself in one page, your idea is stupid and you suck, respectively.

   • 2 key points. Your resume (and interview) should communicate only two, perhaps three, key points. Key points include pertinent work experience, applicable education, or a love for what the company does. One key point is too few, and three is at the edge of too many.

   • 3 sections. “Two key points” means that your resume should only have three sections: contact information, work experience, and educational background. This specifically excludes “objectives” (do you really think that a company cares what you want to be when you grow up?), “references available on upon request” (duh, of course you’ll have to give references if you’re asked; more on this later), and “outside interests” (that Lamaze class training will come in really handy when the company stops delivering software by C section but not right now).

   While I’m at it, here are some additional resume tiplets:

   • Have some fresh eyes take a look at it. Fresh eyes will always find mistakes that you missed.

   • Begin each line item of the experience section with an active verb such as “created,” “designed,” “wrote,” or “sold.”

   • Follow this active-verb description with what you accomplished. The best “whats” are quantifiable results such as sales, cost reductions, or shipped products. The worst “whats” are the number of people you managed and the amount of budget you blew through. The key is not the size of the staff or the the size of the budget—it’s what you accomplished with them.

   • Bring copies of your resume to the interview. Suppose that one of the interviewers asks for a copy of your resume. It would be nice to have it with you because much of Silicon Valley suffers from Attention Deficit Disorder, so once you’re out of sight, you’re out of mind.

3. Know—or better yet—dislike the competition. Another form of passion is a dislike of a company’s competition. Don’t take this too far because no company you’d want to work for will hire a psychopath but expressing the desire to defeat Microsoft at Apple, Google at Microsoft, or Nintendo at Sony is a positive thing. If nothing else, it shows that you understand the competitive marketplace.

4. Expect the funny farm. Most likely you’ll go through a group grope of interviews by four or five people. Most likely only one of them has hired and managed people before. Most likely this is the cast of characters that you’ll meet. Use these stereotypes to prepare answers to their questions and concerns.

   Stereotype	Description	Key Question	Key Answer
   Wunderkind	Dropped out of Stanford while getting an advanced degree. Scored 1600 on the SAT. Still a virgin. Needs a regression equation to buy a pack of gum. On his way to being farmed out (that is, made CTO), but he doesn’t know it yet.	How did your PhD orals go?	Fine, how did yours go?
   Mom	Maybe the only adult on the team. Part office manager, part psychiatrist, part mother, and part school principal. Easy to dismiss as “clerical staff,” but she’s the go-to lady when the wunderkinds need real-world advice.	Besides work, what are your passions?	I have lovely children. Would you like to see their pictures? Or I'm at that stage in life where I concentrate on my career, but I eventually want a family.
   Mr. CPG	Brought in by the wunderkinds to fix marketing even though they think the company’s gizmo is so cool that it doesn’t need marketing. Can’t do a demo of the product but believes that everything is a consumer packaged good. MBA. Worked for five years for Playtex marketing tampons. Leases a Cadillac.	What do you think of Kotler’s Four Ps of marketing?	They are still important, but the Internet and online communities have made life much more complex for marketers. I’m glad you’re running that function here because I can learn a lot from you.
   Sunil	Veep of engineering. After six months of searching, the wunderkinds finally settled on someone who they thought could scale the infrastructure and had room temperature IQ. (How hard could it be support six million simultaneous users?) The venture capitalists were very happy when he was hired. Brother-in-law runs an outsourcing programming shop in Bangalore that the company uses.	What do you think of Squid web proxy caching?	I think that good architecture makes proxy caching unnecessary.
   Jasmine McGuire	The sales expert. Finally, the wunderkinds found a sales person that they could stand for more than fifteen minutes. Pissed off that there aren’t more women managers in the company. Worked for ten years at an established Silicon Valley firm where she exceeded quota every year. Sporadic guilt pangs about not seeing her kids enough.	What do you think is the key selling proposition of our product?	There are so many possibilities: ease of use, speed, scalability, world-class tech support... But you’re the expert: what’s worked for you?
   Lifer	Started at the company when computers were as big as a room and “partner” was a noun, not a verb. Only person in the company who uses a RPN calculator. Wants to make sure that the company never forgets its roots. Perfectly happy just to be a great engineer. Drives a second-hand Prius.	Did you watch the History Channel special about Arpanet?	Yeah, I sure did; in fact, I recorded it on my Betamax machine. I still think the Beta format is better than VHS.
   Grecian Gray	A Mr. CPG who lasted. Knows everyone in the industry but only an inch deep. Too old to go to another startup but too young to retire. Schedules offsites wherever there’s a great golf course. Has had several affairs with employees in the company. Leases a Boxster.	What do you think of the 7 Series BMWs?	They’re nice, but that’s for a family man. Give me a sportscar anyday.
   HR Professional	Loves the company. Loves her job. Been there and seen that. Bull-shiitake proof. You may think she’s “just an HR person,” but she’ll torpedo you if you piss her off. One of the first people you’d recruit if you leave the company to start something.	What would you like to be doing in five years?	I would like to grow into a management position at this company by further developing my skillset.
   Ms. CEO	Proof that ice water can run in people’s veins. Tough, talented. Shattered the glass ceiling into a thousand pieces. Sports a trophy husband. Makes the Merrill Streep character in The Devil Wears Prada look like a girl scout. Friends with Carly Fiorina.	Did you see that article in Forbes about me?	“Seen it?” Are you kidding? I have a copy right here. I was going to ask you to autograph it.
   Don Corleone	Executive with the company for twenty years. Feared by employees who don’t know him. Loved by those who do. Net worth exceeds $50 million. Empty nester but got his kids summer jobs at the company when they were still in the house. Board member. Secretary answers his email.	What makes you think you can conribute to this company?	I’ve read about how much you contributed to the company over your career, and I can only hope to make a contribution as large as yours.

   
   

5. Show up early. Get to your interview at least thirty minutes early because (a) you might hit traffic; (b) it make take a while to get signed in and badged; (c) you might learn something from the receptionist; and (d) you don’t want to be rushed and flustered when you start your interview.

6. Overdress, or, ask what to wear. Tech companies are notorious for t-shirts-and-jeans dress codes, but whether this is appropriate dress for an interview depends on the position and on the interviewer (it might just be your luck that the interviewer recently joined from another organization that had a much stricter dress code). A good rule of thumb is to dress one level above the company norm: for example, for a t-shirt style company, wear a collared polo shirt. If in doubt, ask what’s appropriate for the interview.

7. Answer the first question, “How are you?” with a great response. For example, a great response is, “I feel great. I’m really anxious to learn more about this job and tell you about myself, so that we can determine if we’re a good match.” In other settings, this question is an unimportant formality. In an interview it’s an opening to blow away the interviewer with your enthusiasm.

   Whatever you do, don’t answer the question with the truth: “I’m stuck in a dead-end marriage, my kids have chronic diseases, so I need a good medical plan, and the credit card companies are calling.” Tech companies do not hire out of sympathy, and this is a job interview, not out-patient psychiatric counseling.

8. Get the scoop from the first interviewer. A job interview is a sales call: Listen to what the customer says she wants and then explain why you are the solution. Many interviewers will tell you how to sell to their company. The sooner you get this information, the better.

   These are good questions to ask to get the ball rolling:

   • “What are you concerned about in filling this role?”

   • “What are the company’s greatest challenges?”

   • “What are the hot buttons of the other people I’ll be meeting?”

9. Think: Plug and play, plug and play, plug and play. Sorry, but Silicon Valley companies do not develop employees. (“Management trainee” is an oxymoron in Silicon Valley.) Metaphorically speaking, we like to open the box, plug in the gizmo, and be up and running, so you should always be answering the question: How can I immediately help this company? If you can’t help the company immediately, then maybe this isn’t the right company for you.

   This isn’t to say that you need five years of experience to get a job in Silicon Valley. For example, someone straight out of college (or high school) can help by testing software, answering the phone, answering tech support questions, whatever. But don’t expect the luxury of a long training program before you start contributing to the bottom line.

10. Take notes. I wouldn’t whip out a Windows tablet PC if I were interviewing at Apple, but taking notes is a good idea for three reasons: first, you can use what you learn in follow-on interviews; second, if an interviewer asks, “Who have you talked to here so far?” it would be good to be able to answer; and third, it will make you look like a serious, attentive candidate.

11. Confess your sins. If you did something stupid in your past, the company will find out, so it’s better if it finds out from you rather than from a search on the Internet. A tech entrepreneur once told me how he rented out his chest as a billboard and made $2,500 (it’s a long story). A woman that he met on Match.com found this out, and it was an issue. If a date can find this stuff from your past, you can bet an interviewer will. Hopefully, this makes you think twice about the stupid things you’re tempted do on MySpace.

12. Retract your mistakes. If you screw up an answer in an interview, it’s cool to say, “That was a crappy answer. Let me try again.” If nothing else, it shows that you can realize and correct a mistake in real time. It’s better to retract a stupid answer than to leave a permanent impression of cluelessness.

13. Prepare five ways that you think the company could improve. If you are new to Silicon Valley, you’ll quickly learn something: We’re just as clueless as any other place on the face of this earth. Here the blind lead the blind, and in the valley of the blind, the one-eyed candidate is very attractive. All this means you should prepare five good ideas about what the company can do to improve its product, fix its marketing, and increase sales. When all the dust settles, it would be great if the interviewers remember you as “the guy with the good ideas.”

14. Provide your references on the spot. Print your list of referencs so that you can provide them in the interview—as opposed to providing them later. In general, try to anticpate every possible request that would turn into a follow-up item: providing references, sample work, examples from your portfolio, software that you’ve written, whatever.

    One more thing about references: Provide only people who will swear on a stack of bibles that you’re great. Before you use a person as a reference you should ask the $64,000 question: “I don’t want you to provide a reference unless you feel 100% comfortable doing it: Are you 100% sure?” This accomplishes two things: you eliminate the references who will “damn you with faint praise” and you secure a committment to a great reference to the extent that such a thing can be secured.

    If you really want to play the reference game at the highest level, ask your best reference to proactively call the interviewer. This works well especially if your reference is famous.

15. Tell the interviewer you see a good fit and want the job if this is the truth.You’d also be amazed at how few candidates go for the close. You should clearly communicate that you want the job because aggressiveness counts for a lot in job interviews in Silicon Valley. Then ask what else the company needs to learn about you and what the next steps are.

    If you don’t think there’s a good fit, say so too. At least you’ll be remembered as an honest person. Perhaps the company will have a position in the future that is a good fit.

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Addendum

If you’d like to forward this posting, please send people this URL:

http://snipurl.com/siliconvalleyjob

Here are some related topics:

• Nine Questions to Ask a Startup. In case you’re interviewing at a startup.

• The Art of Schmoozing. This will help you line up interviews.

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The Art of the Start Video

An honest speaker will tell you that she has “on” days and “off” days. The result of a truly “on” day is a standing ovation. I had a very “on” day at TiECon on May 13, 2006. This is the annual meeting of The Indus Entrepreneur organization.

I’ve provided postings of audio and video of my speeches that covered the topics of innovation and evangelism, but this is the first one of “The Art of the Start.” It’s the first one, frankly, because I’ve been waiting until I did it very—standing ovation—well.

Here are the PowerPoint slides that I was using that day. By the way, I am wearing an Anne Namba vest in this video. This is the company that makes the world’s most expensive aloha shirts.

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Here is the video in MP4 format in case you can’t use Google Video.

Download GuyKawasakiTheArtoft.mp4 (178510.9K)

GBAT: Score High and Cry

Due to the overwhelming response to my article about bozosity, I've created the GBAT (Guy's Bozofication Aptitude Test). It is a compilation of the best indicators of whether a company is sliding into bozosity. I've included the names of the people who came up with some of these ideas. In some cases, I took their idea and altered it for my use.

Please feel free to apply this test to your company and post the score and company name--anonymously, of course--in the comments area. Here is a PDF of the test in case you want to print it or forward it--just click on it to download.

Add one point for each

1. The two most popular words in your company are “partner” and “strategic.” In addition, “partner” has become a verb, and “strategic” is used to describe decisions and activities that don't make sense.

2. Management has two-day offsites at places like the Ritz Carlton to foster communication and to craft a company mission statement.

3. The aforementioned company mission statement contains more than twenty words--two of which are “partner” and “strategic.”

4. Your CEO's admin has an admin.

5. Your parking lot's “biorhythm” looks like this:

* 8:00 am - 10:00 am--Japanese cars exceed German cars
* 10:00 am - 5:00 pm--German cars exceed Japanese cars
* 5:00 pm - 10:00 pm--Japanese cars exceed German cars

6. Your HR department requires an MBA degree for any position; it also requires five to ten years work experience in an industry that is only four years old.

7. Time is now considered more important than money so you have a company cafeteria, health club, and pet grooming service. Moreover, the first thing that employees show visitors is the company cafeteria, health club, and pet grooming service.

8. Someone whose music sells in the iTunes store performs at the company Christmas party.

9. An employee is paid to do nothing but write a blog.

10. Some employees read this blog to find out what's happening in the company.

11. The success of a competitor upsets you more than the loss of a customer.

12. Your middle managers all worked at big-name consumer goods companies. Zoli Erdo

13. You hire a big-name consulting firm who brings in MBAs with one year of experience to re-think your corporate strategies.

14. Your company likes some of these MBAs and hires them away from the big-name consulting firm.

15. The front-desk staff gets better looking and less competent. Jeff Barson

16. The only time you see your CEO is when you're watching CNBC. Laurie Sefton

17. You watch CNBC during the day and don't feel guilty.

18. The ratio of engineers to attorneys dips below 25 to 1. Margherite

19. The company has created a “company values” poster. George

20. “Leveraging core competencies” and “maximizing shareholder value” show up in official documents, in the same paragraph. Rick Krutina

21. New executives campaign to improve the product before they understand how to use it. Bill Liao

22. Your company outsources its mission statement. pUnk

23. Your CEO's chair is more expensive than your first car. JoeC

24. You have more than two execs with the word “chief” in their title. Gautam

25. The company becomes a schwag fountain: pens, bags, notepads, messenger bags. Hadley Stern

Add two points for each

26. Your CEO writes a book.

27. Your CEO gets invited to the World Economic Forum in Davos where he gives advice to the presidents of Eastern European countries.

28. Your company has a corporate jet.

29. Your company hired a retired professional athlete as a motivational speaker.

30. Your company hired a retired politician as a motivational speaker

The highest possible score is 35 points. God help you...

How to Be a Demo God

From February 6th to 8th, executives from seventy companies will do a six-minute demo of their products to an audience of venture capitalists, analysts, and journalists. This event is called, logically, Demo. It's a great event--especially if you understand the dance that's going on: entrepreneurs acting like they don't need capital, and VCs acting like they don't need entrepreneurs. (This dance is akin to acting prudish in a brothel, but I digress...)

This posting is ostensibly for the seventy or so souls who will do the demos--everyone one of them aspiring to be labeled a demo god. I should probably throw in another seventy vice presidents of marketing. And seventy PR account execs. Let's call it three hundred or so people. But it's also for anyone who has to demo a product to raise capital, make a sale, garner press, or recruit an employee.

With no further delay, here is the path to demo-god-dom:

1. Create something worth demoing. My first “duhism” for the week, and it's only Monday morning. If you want to be a demo god, create a great product to demo. If you create mediocrity, and you somehow slipped past the gatekeepers of Demo, you will be outed there. I know Demo is a great PR opportunity, but if you don't do a demo, only you'll know you have mediocrity. If you do the demo, the whole world will.
2. Do it alone. A demo god works alone. You may think it will be interesting and hilarious if the two co-founders do the demo together. Plus, it will show the world how they're getting along so well. Do you know why  Laurel and Hardy is so famous?  It's because there has been so few successful duets. It's hard enough for one person to do a demo. Trying to get two people to do an interactive demo is four times harder. If you want to be a duet, go to a karaoke bar.
3. Bring two of everything. There is a place for duplication: equipment. Expect everything to break the night before you're on stage, so bring two, maybe even three, computers, phones, thumb drives, whatever you'll use in your demo. There is zero slack for equipment failures at Demo other than the projector and audio (which are the responsibility of the Demo folks).
4. Get organized in advance. You should never futz around in a demo--for example, looking for folders and files on your hard disk. You have weeks to prepare for these six minutes; you're absolutely clueless if you haven't set everything up in advance.
5. Reduce the factors you can't control. Should you assume that you'll have Internet access during your demo? Yes, but have a back up anyway.  Sure, the hotel has a T1 line, but several hundred people in the audience are accessing it. You can count your lucky stars that Verizon has EvDO service in Phoenix. Better yet, simulate Internet access to your server by using a local server.You don't have to show the real system. This, after all, the demo.
6. Get to it. You only have six minutes, so within thirty seconds, stop jawboning and start demoing. Nobody cares about the genesis of your company or that you have a PhD in cognitive science from Stanford. They came to see a demo, not hear your life story. Believe me, if your demo is good, they'll hunt you down to get your whole story later. If your demo sucks, it won't matter if you've won a Nobel Prize.
7. “Do the last thing first.” I stole this from my buddy Peter Cohan who is a demo maven; he teaches people how to do a great demo. What he means, and I second, is that you have about one minute to captivate your audience, so don't try building to a crescendo. Start with “shock and awe”--the absolute coolest stuff that your product can do. The goal is to blow people's minds.
8. Then show the “how.” Once you've blown their minds, then you work backwards and show them the “how.” This is the knockout punch: not only is the “what” fantastic, but the “how” makes it possible for mere mortals to do this too. True or false: What's coming out of your mouth should impress the audience. The answer is False; what's happening on the screen should impress the audience, not what you're uttering.
9. Cut the jargon. The Demo audience thinks that it is very sophisticated and tech savvy. It may well be, but you should cut the jargon nonetheless because jargon seldom impresses people. The ability to speak simply and succinctly is always the best way to go. You may have the world's greatest enterprise software product, but the consumer device partner of your dream venture capital firm is in the audience. If she can't understand your demo, she's not going to be telling her counterparts about it back in the office.
10. Don't take any questions until the end. There are no questions during a demo at Demo because of the six minute limit. However, in other circumstances, you may be tempted to field questions as you go. Don't do it. It's too risky. You never know what you'll be asked--it could take you down a rat hole so deep that you'll never come back up. The upside of showing that you can answer any question in real-time is an ego trip that doesn't justify the downside of getting derailed.
11. End with an exclamation point. You want to start on a high. You also want to end on a high. (If I had to choose, though, I'd start with a higher high than end with a higher high.) Just keep one more cool thing in your bag of tricks. Think of it as a great dessert at the end of a great meal. Scary but true: the goal is to end like the Ginsu knife commercial: “But wait, there's more...” And when you do end on this exclamation point, leave the screen alone. Give the audience plenty of time to let the exclamation point sink in. If they're interested, they look you up in the program, so don't end with a screen of contact information.

Written at: Atherton, California.

The Top Ten Lies of Venture Capitalists

Venture capitalists are simple people: we've either decided to invest, and we are convincing ourselves that our gut is right (aka, “due diligence”) or there's not a chance in hell. While we may be simple, we're not necessarily forthcoming, so if you think it's hard to get a “yes” out of venture capitalist, you should try to get a conclusive “no.”

This is because there's no upside to communicating a negative decision. Entrepreneurs will simply hate us sooner--instead the game is to string along entrepreneurs in case something miraculous happens to make them look better. (An example of a miracle would be Boeing approving a $5 million purchase order.)

Alas, entrepreneurs are also simple people: If they don't hear a conclusive “no,” they assume the answer is yes. This is an example of the kind of breakdown of communication between venture capitalists and entrepreneurs that causes much pain and frustration for entrepreneurs.

To foster greater understanding among the two groups, here is an exposé of the top ten lies of venture capitalists.

1. “I liked your company, but my partners didn't.” In other words, “no.” What the sponsor is trying to get the entrepreneur to believe is that he's the good guy, the smart guy, the guy who gets it; the “others” didn't, so don't blame him. This is a cop out; it's not the other partners didn't like the deal as much as the sponsor wasn't a true believer. A true believer would get it done.
2. “If you get a lead, we will follow.” In other words, “no.” As the old Japanese say, “If your aunt had balls, she'd be your uncle.” Well, she doesn't have balls, so it doesn't matter. The venture capitalist is saying, “ We don't really believe, but if you can get Sequoia to lead, we'll jump on the pile.” In other words, once the entrepreneur doesn't need the money, the venture capitalist would be happy to give him some more--this is like saying, “Once you've stopped Larry Csonka cold, we'll help you tackle him.” What entrepreneurs want to hear is, “If you can't get a lead, we will.” That's a believer.
3. “Show us some traction, and we'll invest.” In other words, “no.” This lie translates to “I don't believe your story, but if you can prove it by achieving significant revenue, then you might convince me. However, I don't want to tell you 'no' because I might be wrong and by golly you may sign up a Fortune 500 customer and then I'd look like a total orifice.”
4. “We love to co-invest with other venture capitalists.” Like the sun rising and Canadians playing hockey, you can depend on the greed of venture capitalists. Greed in this business translates to “If this is a good deal, I want it all.” What entrepreneurs want to hear is, “We want the whole round. We don't want any other investors.” Then it's the entrepreneur's job to convince them why other investors can make the pie bigger as opposed to re-configuring the slices.
5. “We're investing in your team.” This is an incomplete statement. While it's true that they are investing in the team, entrepreneurs are hearing, “We won't fire you--why would we fire you if we invested because of you?” That's not what the venture capitalist is saying at all. What she is saying is, “We're investing in your team as long as things are going well, but if they go bad we will fire your ass because no one is indispensable.”
6. “I have lots of bandwidth to dedicate to your company.” Maybe the venture capitalist is talking about the T3 line into his office, but he's not talking about his personal calendar because he's already on ten boards. Counting board meetings, an entrepreneur should assume that a venture capitalist will spend between five to ten hours a month on a company. That's it. Deal with it. And make board meetings short!
7. “This is a vanilla term sheet.” There is no such thing as a vanilla term sheet. Do you think corporate finance attorneys are paid $400/hour to push out vanilla term sheets? If entrepreneurs insist on using a flavor of ice cream to describe term sheets, the only flavor that works is Rocky Road. This is why they need their own $400/hour attorney too--as opposed to Uncle Joe the divorce lawyer.
8. “We can open up doors for you at our client companies.” This is a double whammy of lie. First, a venture capitalist can't always open up doors at client companies. Frankly, he might be hated by the client company. The worst thing in the world may be a referral from him. Second, even if the venture capitalist can open the door, entrepreneurs can't seriously expect the company to commit to your product--that is, something that isn't much more than a slick (10/20/30) PowerPoint presentation.
9. “We like early-stage investing.” Venture capitalists fantasize about putting $1 million into a $2 million pre-money company and end up owning 33% of the next Google. That's early stage investing. Do you know why we all know about Google's amazing return on investment? The same reason we all know about Michael Jordan: Googles and Michael Jordans hardly ever happen. If they were common, no one would write about them. If you scratch beneath the surface, venture capitalists want to invest in proven teams (eg., the founders of Cisco) with proven technology (eg., the basis of a Nobel Prize) in a proven market (eg., ecommerce). We are remarkably risk averse considering it's not even our money.
10. I'm at a Starbucks in Hawaii writing this blog. I've been at it for ninety minutes. I don't have my charger with me. My PowerBook is out of gas. You're going to have to be happy with the top nine lies of venture capitalists until “Dear God” ships the PowerBook Vaio.

Written at: Starbucks Ward Center, Honolulu, Hawaii.

Mantras Versus Missions

Who among us has not had the horrible experience of an corporate offsite to build teamwork and to craft a mission statement? The offsite usually went like this:

Day 1: Teambuilding. Selection of cross-functional teams so that, God help us, engineering has to work with sales. A day of exercises such as, “Each of you will come up to the front of the group, turn your back to the group, close your eyes, and fall backwards into the arms of your colleagues. This will teach you to trust your fellow employees.”

Day 2: Crafting the mission statement. A hot, crowded room with easels of white paper and a facilitator who knows nothing about your business. Everyone who is a director level and above in the company is there—that’s sixty people. You each figure you get one word, so at the end of the day, you have a sixty word mission statement like this:

“The mission of Wendy’s is to deliver superior quality products and services for our customers and communities through leadership, innovation, and partnerships.”

Don’t get me wrong. I love Wendy’s, but I’ve never thought I was participating in “leadership, innovation, and partnerships” when I ordered a hamburger there. The root cause of mission statement-itis is that most organizations are run by people who have either gotten an MBA or worked for McKinsey—or both.

I give up trying to get people to create short, different, and meaningful mission statements, so go ahead and spend the $25,000 for the offsite, facilitator, and consultants to create one. However, you should also create a mantra for your organization. A mantra is three or four words long. Tops. Its purpose is to help employees truly understand why the organization exists.

If I were the CEO of Wendy’s, I would establish a corporate mantra of “healthy fast food.” End of story. Here are more examples of corporate mantras to inspire you:

Federal Express: “Peace of mind”
Nike: “Authentic athletic performance”
Target: “Democratize design”
Mary Kay “Enriching women’s lives”

The ultimate test for a mantra (or mission statement) is if your telephone operators (Trixie and Biff) can tell you what it is. If they can, then you’re onto something meaningful and memorable. If they can't, then, well, it sucks.

If you still insist on doing a mission statement, then at least let me help you save a lot of time and money. Just go to the Dilbert Mission Statement Generator. There, without a consultant, facilitator, and offsite, you can get the mission statement of your dreams.

Written at United Airlines, seat 4E, SFO to HNL

The 10/20/30 Rule of PowerPoint

I suffer from something called Ménière’s disease—don’t worry, you cannot get it from reading my blog. The symptoms of Ménière’s include hearing loss, tinnitus (a constant ringing sound), and vertigo. There are many medical theories about its cause: too much salt, caffeine, or alcohol in one’s diet, too much stress, and allergies. Thus, I’ve worked to limit control all these factors.

However, I have another theory. As a venture capitalist, I have to listen to hundreds of entrepreneurs pitch their companies. Most of these pitches are crap: sixty slides about a “patent pending,” “first mover advantage,” “all we have to do is get 1% of the people in China to buy our product” startup. These pitches are so lousy that I’m losing my hearing, there’s a constant ringing in my ear, and every once in while the world starts spinning.

Before there is an epidemic of Ménière’s in the venture capital community, I am trying to evangelize the 10/20/30 Rule of PowerPoint. It’s quite simple: a PowerPoint presentation should have ten slides, last no more than twenty minutes, and contain no font smaller than thirty points. While I’m in the venture capital business, this rule is applicable for any presentation to reach agreement: for example, raising capital, making a sale, forming a partnership, etc.

Ten is the optimal number of slides in a PowerPoint presentation because a normal human being cannot comprehend more than ten concepts in a meeting—and venture capitalists are very normal. (The only difference between you and venture capitalist is that he is getting paid to gamble with someone else’s money). If you must use more than ten slides to explain your business, you probably don’t have a business. The ten topics that a venture capitalist cares about are:

1. Problem
2. Your solution
3. Business model
4. Underlying magic/technology
5. Marketing and sales
6. Competition
7. Team
8. Projections and milestones
9. Status and timeline
10. Summary and call to action

You should give your ten slides in twenty minutes. Sure, you have an hour time slot, but you’re using a Windows laptop, so it will take forty minutes to make it work with the projector. Even if setup goes perfectly, people will arrive late and have to leave early. In a perfect world, you give your pitch in twenty minutes, and you have forty minutes left for discussion.

The majority of the presentations that I see have text in a ten point font. As much text as possible is jammed into the slide, and then the presenter reads it. However, as soon as the audience figures out that you’re reading the text, it reads ahead of you because it can read faster than you can speak. The result is that you and the audience are out of synch.

The reason people use a small font is twofold: first, that they don’t know their material well enough; second, they think that more text is more convincing. Total bozosity. Force yourself to use no font smaller than thirty points. I guarantee it will make your presentations better because it requires you to find the most salient points and to know how to explain them well. If “thirty points,” is too dogmatic, the I offer you an algorithm: find out the age of the oldest person in your audience and divide it by two. That’s your optimal font size.

So please observe the 10/20/30 Rule of PowerPoint. If nothing else, the next time someone in your audience complains of hearing loss, ringing, or vertigo, you’ll know what caused the problem. One last thing: to learn more about the zen of great presentations, check out a site called Presentation Zen by my buddy Garr Reynolds.

Written at Atherton, California