Please check out my posting on the Sun Microsystems small and medium business web site. My first (of many) posts there is an interview with Marten Mickos, the former CEO of MySQL who is now a senior vice-president of Sun. I'll be posting articles regularly on the Sun site and will let you know when I do.
This interview features the chief marketing officer and product manager of Compete, Inc. They discuss how Compete competes with Alexa and Comscore, site metrics, and SEO practices.
Question: What exactly does Compete do?
Answer: Stephen DiMarco: We have a diverse sample of 2,000,000 U.S. Internet users that have given us permission to analyze the web pages they visit and ask them questions via surveys. Web analytics really means analyzing what consumers do across the entire web, not just what they do within a particular site, and that marketers can use this information across the entire company, not just for online media planning or site design decisions.
A great example is the work we’re doing in the truck segment for auto marketers; this segment is an all-out battle between Ford, GM, and Toyota with nearly a billion dollars of advertising spent each year. We’re using online behavior to predict the number of people shopping each truck in the category to understand how campaigns are swaying shoppers throughout the month. This helps auto marketers map how cost effective their advertising is, and guides whether they need to up dealer incentives or increase advertising to hit their monthly sales target.
Question: What did your investors say when you started giving away your data for free?
Answer: Stephen DiMarco: It was kind of like “Twelve Angry Men” meets “40 Year-Old Virgin”—lots of heated debates wrapped up in a great fear of the unknown. Quite rationally, our board felt we were giving away a really valuable asset, and no amount of provocative quotes from John Batelle or The Cluetrain Manifesto could assuage them.
Seriously, we did it for three reasons:
We believe that if we’re collecting information from consumers, we should make the information available back to them and be transparent how we’re using it.
We believe that making the data easy to access through Compete.com or our API will increase the pace of innovation in web measurement and online marketing.
We wanted to do something remarkable and game changing, and felt this data is too valuable to bottle up inside of $50,000 per year licenses.
Question: Do your stats include Macintosh users and Firefox users?
Answer: Stephen DiMarco: Yes, Compete’s sample includes both Macintosh and Firefox users. We’re data junkies and know the importance of having a sample that represents the internet at large. To that end, our sample is created from more than ten different data sources ranging from our own opt-in panels to data that we license from ISP and ASP partners. We designed our software to be compatible with Macintosh and Firefox, so they’re accurately represented in our data set. And the data that come in through our ISP and ASP partnerships also includes Linux, Macintosh, Firefox, and Safari users.
Question: How are your results different from Alexa and Comscore?
Answer: Stephen DiMarco: We like to say to say that more is better—and by measuring 2,000,000 U.S. consumers each month, we’re substantially bigger than Comscore. Our larger sample gives us more reporting depth and we feel our results are more accurate because we measure one million websites compared to the 15,000 that Comscore Media Metrix measure. There is incredible value in being able to accurately measure the “torso” of the web—sites in between the head and the tail—we’re better at this than Comscore because our sample is so much larger and we see things that their data just doesn’t pick up.
We also have an accuracy advantage because the diversity of our data sources helps us identify and eliminate biases that show up from time to time. Our multi-source approach is a big point of differentiation—no one else in the market can do it—transforming more than ten different data streams into a common format and then performing statistical projections across 2,000,000 people on a nightly basis is no small feat.
Alexa is a storied internet brand, but unfortunately a big part of the story is how bad its web traffic estimates are. Unlike Alexa, we go through a rigorous panel selection and normalization process that involves an independent RDD survey, demographic scaling and extensive QA from our data operations team. Alexa, on the other hand, has a single source of data—its toolbar—so it’s very susceptible to bias. In fact, we often get emails from companies offering to increase our Alexa ranking by downloading tons of toolbar and then visiting our site!
Question: Then should we all remove our Alexa bookmarks and replace them with Compete?
Answer: Jay Meattle (product manager): Not yet—I keep both bookmarked. As long as you know what you’re looking at and keep the accuracy caveats in mind, Alexa can still be a tool for quick analyses and for evaluating international users. However inaccurate it might be, it’s still another data point. That said, I don’t recommend making multi-million dollar decisions based on Alexa!
Question: Is SEO black magic and bull shiitake or can one increase traffic with a few changes to headers, keywords, etc?
Answer: Jay Meattle: Every website owner that wants more traffic—who doesn’t?—should have an SEO strategy. A few tactical tweaks can indeed increase traffic from search engines dramatically.
At Compete, we have experienced the power of SEO first hand. There was an 9x increase in the volume of referrals from Google to Compete.com within a month of our SEO related changes going live, and today search engine referrals are at around 21x pre-SEO levels.
Question: There’s often a 10x difference between my server logs and Google Analytics say is my traffic. What accounts for this?
Answer: The short answer is that when it comes to web analytics there are many ways of measuring the same thing. There are two main approaches for compiling local web analytics data. The first method, server log analysis, reads the logs files in which the web server records all its transactions. The second method, page tagging, like Google Analytics, uses JavaScript code on each page to notify a third-party server when a page is rendered by a web browser.
Search engine spiders, bots, etc generally cannot execute JavaScript, and hence are not counted by Google Analytics, etc. Log files on the other hand include all traffic to your servers, including spiders and bots that appear as traffic, but do not represent actual human activity. This “non-human” traffic generally accounts for the difference between the two.
Question: Then when people ask, do I give the log answer or the Google Analytics answer?
Answer: Jay Meattle: Depending on who is using the data, there is value in both numbers. For example, an SEO expert will probably want to know what your server logs have to say to determine how often Google is crawling your site. Your investors on the other hand most likely don’t care about the same metric. They’re more interested in how effective you were in driving real living people to your site. People that have money to spend! Any good JavaScript based tracking tool like Google Analytics, IndexTools, Clicktracks, Omniture, etc. is better at proving you with this other metric since they generally don’t count non-human traffic like bots, spiders, etc.
Another good option is to use metrics from a 3rd party like Compete. This allows the consumer of this kind of information to easily compare how your site stacks up against other sites. Quoting a non-biased verifiable 3rd party also helps lend credibility to your growth story. Bigger sites such as Yahoo, Google, MSN, etc. generally take this route.
Question: Everyone else is lying, do I lie too or look less successful?
Answer: Stephen DiMarco: Call me Catholic, but I have never had much success lying about web traffic, so I can’t even bluff over emails. Therefore, I am big proponent of providing as transparent a view into real measures as possible, but as you pointed out, it’s hard to know what the truth is when three different web analytics methodologies say three different things about your web traffic.
When it comes down to it, the best thing you can do is select the option that you feel most accurately represents the most important aspects of your business, and then be transparent about the strengths and weaknesses of your decision. It’s liberating, and it becomes a real competitive advantage when you begin growing. Misleading the market is like building a house of cards and it’s really hard to perpetuate a lie when it comes to supporting clients, partners, employees, and investors. The truth wants to be free.
This is a real growth opportunity for the web measurement industry. The fact that both Nielsen//NetRatings and Comscore were cornered into MRC audits reinforces this point. I mean, with so much more money poised to flow into online advertising the last thing marketers, agencies and publishers needed was doubt and confusion about how best to allocate it.
This is one of the big reasons why we launched Compete.com; we wanted to provide free access to what our data says about traffic to the top one million sites. And it’s worked—this month 500,000 people will use Compete.com to find information on the sites they care about. We’re making our data and the web transparent at the same time. Anyone can see our data and compare it to their own local analytics reports, and then let us know how we’re doing.
Question: What are the most common mistakes that companies make that yields sub-optimal traffic?
Answer: Jay Meattle: The most common mistake companies make is not paying enough attention to SEO when they’re developing new websites. As a result, companies end up not optimizing their site structurally for search engines. This can be an expensive mistake, because your site will not get 100% of the traffic that it could be getting from search engines initially; and it can be resource intensive to make major structural changes to your site later on. My advice to everyone is that start thinking about SEO right from day zero—much before the website is up and running.
Question: Then what can I do to increase traffic at Truemors?
Answer: Jay Meattle: Here are three suggestions:
You need to be more pro-active about telling search engines that your content exists. You can do this by creating a comprehensive Sitemap. A Sitemap is a XML file that lists URL’s for a site along with metadata such as how often it changes, how important it is, last updated, etc. so that search engines can more intelligently crawl the site. The current sitemap for Truemors lists twenty-four URLs.
In addition to the twenty-four URLs, I recommend listing the URL for each and every story on Truemors (13,000+). This should significantly boost the numbers of Truemors pages indexed by Google, etc and in turn increase traffic. You can learn more about Sitemaps by signing onto Google’s webmaster tools or at Sitemaps.org.
Customize your meta tags and titles for each page, and clean up the URLs to make them search engine crawler friendly. For example, search engines prefer descriptive URLs like http://truemors.com/fisherman-caught versus http://truemors.com/?p=13208. Cleaner URLs, titles, etc are also more SEO friendly, user friendly and “clickable.” It’s a win-win all around.
Use Compete’s Search Analytics to identify keywords that drive quality traffic to competing sites. Once you have this list—tailor Truemors content so that you also start appearing in natural search results for those keywords, and/or start buying those keywords as sponsored results.
Question: In two years what will be the top five social networking sites (in order from largest to smallest)?
Answer: Jay Meattle: I don’t think the top five is going to look drastically different in two years. Our data tells us that it generally takes 24+ months from launch for a site to reach significant traffic levels—arbitrarily defined as 10 million+ unique visitors per month—thus I don’t expect any net new players to enter the list. Companies can of course buy themselves a spot in the top five, and it wouldn’t surprise me if Microsoft — missing from the list below — does just that.
MySpace
Yahoo/Flickr/del.icio.us/Upcoming/Answers/Mail, etc..
Google/YouTube
Digg
Stephen DiMarco: I agree with Jay that the big five today will most likely be the big five tomorrow. Last year we surveyed online socialites—people using social networking sites—and learned some interesting tidbits; one was that people said they have the “social capacity” to be actively engaged in four social networking sites—anything beyond that and they become socially saturated. So it’s going to be hard to displace the current leaders.
The one opportunity I do see is for companies or existing social organizations to bring social network and media principles to their existing member bases. So while you’ll find an AARP group in Flickr or Facebook, you might also see AARP.com morph into a mash-up of an information, commerce and membership site with a strong dose of social networking tools. Likewise, you might see some companies with large customer bases—American Express, Comcast, Walmart— follow Dell’s lead and try some innovative community-based initiatives again.
Fred Greguras is a partner at the Silicon Valley law firm of Fenwick and West. He is also a buddy of mine, and I asked him to answer the most common questions of newbie entrepreneurs. His clients have included BioMarker Pharmaceuticals, Excite, Kintana, and Speedera Networks. It’s very important to make the right decisions in these areas at the start of a company, so I hope you’ll heed his answers.
Question: Can I start a technology company in the same business as my current employer?
Answer: Working completely outside of an employer’s premises and not using an employer’s trade secrets or other resources may not be enough to avoid a taint on your technology and intellectual property (“IP”) for the new business. Investors will examine the creation of IP very carefully in such a situation as they don’t want to buy into a law suit. While California law favors employee mobility it also protects employers in Labor Code Section 2870 which is part of most employee invention assignment and confidentiality agreements you sign before you begin employment with a company.
Basically, 2870 states that an employee owns an invention that he/she developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or result from any work performed by the employee for the employer.
The taint to the new business can come from the founder who is trying to continue work with his/her current employer while trying to create technology and IP for a new business or from a consultant who is “moonlighting” from a business in the same space. Some business sectors such as EDA software are notorious for litigation against departed employees who try to start a new business in the same space.
Question: When should I incorporate?
Answer: The first step in starting a business is to test the business concept with prospective customers and to look carefully at potential market size to see if there really is a business opportunity. Timing of incorporation will be driven by the need to document the founders’ ownership of the business, to secure ownership of pre-existing intellectual property, to enter into contracts with customers, to grant stock options and to accept investment. You usually don’t want to delay incorporating until just before a Series A financing round because such timing could cause tax problems for founders who want to buy their shares at a nominal price as compared to the valuation of the corporation at the time of the financing.
Question: Why don’t I use a Limited Liability Company (“LLC”) since it is cheaper to start?
Answer: An LLC is often used for consulting and smaller businesses, but not often for an operating business that will seek venture capital. You can decide whether to be taxed as a corporation or partnership when your business organization is an LLC. Losses and gains of the business flow through to the shareholders individual 1040 tax return when taxed as a partnership. Venture capitalists won’t invest in an LLC, you can’t grant stock options to employees and other service providers in an LLC, and an LLC can’t be acquired tax-free in a stock acquisition exit.
Question: Why does everyone incorporate in Delaware?
Answer: I still see some entrepreneurs use California corporations because they want to keep their costs as low as possible. Delaware incorporation advantages are venture capitalist preference, ease of dealing with regulatory authorities, flexibility in the law (such as the number of board members) and more helpful precedent on corporate law. Disadvantages are the corporation being taxed by and subject to two states regulatory requirements.
You can’t avoid California taxes if the corporation is operating in California. California advantages are lower cost and being subject to only one state’s regulatory requirements, if the corporation is operating here. One major disadvantage of using California is the difficulty of dealing with regulatory authorities on corporate filings in a financing or other situation when articles of incorporation need to be amended. If a business has been incorporated in California, the VCs will often want it to be reincorporated in Delaware as part of a round of financing.
Question: Should we incorporate as an S corp or C corp?
Answer: “S corp” and “C corp” are tax statuses rather than a type of corporation you would form in California or Delaware. An S corporation is taxed like a partnership. Gains and losses flow through to the shareholders so it can provide tax advantages if, for example, there is a long product development period with significant expenses that would flow through to individual tax returns.
There are restrictions on the number (100) and types of shareholders in an S corp. Shareholders must be U.S. citizens or residents and natural persons not entities. Also, while you can make a decision at the end of a calendar year to switch to a C corp, you can’t decide to turn S corp status off when ever you want to do so. A preferred stock financing will terminate S corp status because an S corp may not have more than one class of shares outstanding.
Question: Should I incorporate offshore since my business will focus on China/India?
Answer: This decision is driven by the likely exit strategy and the type of investors most interested in your business. Exit alternatives such as an IPO on the Indian or Hong Kong stock exchanges are not possible if you are a U.S. corporation. Some global investors will invest only in an offshore corporation such as a Cayman Islands exempted company while some domestic U.S. venture capitalists will still only invest in a U.S. corporation.
You can reincorporate from one state to another, i.e., California to Delaware, on a tax-free basis but you can’t reincorporate outside the U.S. without tax consequences. Reincorporation offshore almost always will cause the corporation to remain subject to U.S. taxes under Internal Revenue Code Section 7874. If you initially incorporate offshore you can reincorporate into the U.S. on a tax free basis so if in doubt, start offshore at the outset.
Question: Can I have everyone in my startup be contractors or consultants (“1099 services”) rather than employees?
Answer: Many startups label and engage service providers as consultants rather than employees prior to a round of financing to try to avoid employer obligations such as income tax withholding and unemployment taxes. This status depends on facts, however, not a label in an agreement. The basic test is the degree of control over the individual.
If he/she is tightly supervised and on the company’s premises during regular working hours, the individual is really an employee. It is very hard for a startup to properly structure a contractor relationship in a startup because of the way the company must operate. For example, many times the company provides a “contractor” with business cards identifying them in an employee position such as “VP, Sales” which is not the right thing to do legally but is what the company believes it needs to do to be successful.
Question: How can I grant stock options to employees and consultants?
Answer: Your start-up should adopt a stock option plan at the time of incorporation that satisfies federal and state tax and securities laws requirements. In California, the plan is often referred to as a “25102(0) plan” based on the California Corporations Code provision. Adopting such a plan will enable the corporation to grant tax favorable options (“incentive stock options”) and avoid securities law violations because the plan will have a securities law exemption under state and federal law. If the plan is not created in accordance with securities laws, granting an option to an employee or other service provider requires the individual to qualify for the same type of securities law exemption as for an investor (“accredited investor”).
Question: How does the corporation obtain ownership of the technology and IP from each of the founders which was developed before we incorporated?
Answer: Founders will usually assign ownership of technology and IP as payment for their shares of common stock of the corporation. This is documented in their founders stock purchase agreement. Investors will almost always want technology and IP to be a transfer of ownership rather than a license in which the founders “hedge” on their commitment to the new business. Ownership provides more value to the business than a mere license. Ownership of technology and IP created after the corporation is established occurs through invention assignment agreement or consulting agreements.
Question: Can I hire people away from my former employer?
Answer: Your employee invention assignment agreement with your former employer will likely have a restriction on soliciting employees, usually for a period of 12 months. The restriction usually doesn’t cover non-solicited hiring of your former employer’s employees but proving who solicited whom may be difficult. Even if the non-solicitation period has expired, you still need to be careful to make sure the new hire does not use trade secrets of your former employer while working for you.
Question: Can I file a provisional patent application myself?
Answer: You can but you need to be very careful to describe the invention and the best mode of practice as required by patent law. A patent attorney may be needed to help draft “claims language” because of increasing litigation over whether a provisional application covered these elements. The provisional patent application must contain a written description of the invention, and “of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or which it is most nearly connected, to make and use the same.”
Question: If we have been issued a patent, won’t that stop a Microsoft from copying us?
Answer: You cannot enforce a patent until and if it is issued and the costs to enforce a patent can be staggering – literally millions of dollars. Whether someone is infringing your patent usually isn’t a 1 or 0 case. The other party may claim it is not infringing your patent or that your patent is invalid, for example, because it is based on a defective provisional application. There may be good arguments on both sides that require a court to make a decision after a lengthy and expensive trial.
Question: Shouldn’t prospective investors sign non-disclosure agreements (NDAs) so that they don’t rip off our ideas?
Answer: Venture capitalists won’t sign NDAs before hearing your pitch because they see so many companies that may be in the same business segment and overlap in what they are doing. NDAs with investors patent counsel are usually feasible later during IP due diligence for a financing when, for example, investors counsel needs to review an unpublished patent application. I recommend “peeling the onion” in making disclosures to investors and others whenever feasible. This means disclosing only as much as you need to for the purpose of the meeting. This isn’t helpful in many businesses such as Internet where what you are doing may be obvious.
Question: If my buddies and I own more than 50% of the corporation, don’t we control it?
Answer: You may if it is prior to a VC financing and you also control the Board of Directors of the corporation. Both the board of directors and shareholders have a right to approve key decisions of the corporation. Board decisions are made on the basis of one person, one vote rather than on a percentage of ownership so you need to be careful with the size and composition of the board. The preferred stock holders in a VC financing will have what are called protective provisions which give them “veto rights” over key decisions like a new round of financing or selling the corporation without regard for their percentage of ownership of the corporation.
Question: Why should founders vest—we’ve already been working on the business for two years?
Answer: Vesting among founders avoids the “free rider” problem, where a founder gets shares and then leaves the corporation and the other founders continue to make contributions. I recommend vesting schedules whenever there is more than one founder to try to make sure all founders continue to contribute. While the investors may renegotiate vesting schedules for founders at the time of a financing, providing some upfront vesting is appropriate when founders have been working on the business for a while. The balance is between maintaining the “stickiness” of the founder and recognizing prior contributions. I usually tell founders to err on the side of more stickiness.
Question: Why does it cost $50,000 or more to do a round of financing?
Answer: The corporation receiving investment pays the legal fees of both its legal counsel and the investors counsel. The total tends to be higher than $50,000 in most Series A financings because of the number and complexity of the financing documents and the rate structures of the large law firms that tend to represent both sides in these deals.
You can manage these costs to a certain extent by having a clear and complete financing term sheet that covers all key points. The business people on each side should address the “tough” issues (such as founders vesting and option pool size) at the term sheet stage and make decisions on such issues rather than have lawyers argue over business issues which increases legal fees. A vague term sheet may avoid confrontation for the moment but it is likely to cause larger legal fees.
Frank Warren started PostSecret as a community art project in November 2004. Since then people have sent in one hundred and seventy-five thousand anonymous postcards. They are featured in art galleries, a music video, and Frank’s bestselling books: PostSecret, My Secret, and The Secret Lives of Men and Women. His new book is A Lifetime of Secrets
In 2006, his website was awarded five Bloggies, the most distinguished weblog awards ceremony, including Weblog of the Year and Best American Weblog. Warren was also named number 14 on the Forbes list of the twenty-five biggest, brightest, and most influential people on the Internet. In 2006, he was presented with a special award from the National Mental Health Association in recognition of how PostSecret has “moved the cause of mental health forward.” As an advocate for suicide prevention, Warren is a volunteer for and actively involved in the organization Hopeline/1-800-SUICIDE.
Question: What was your initial motivation to do PostSecret?
Answer: When I started PostSecret my motive was to create a “place” where people could feel free to share their private hopes, desires and fears. A place where the secrets they could not tell their friends and family would be treated with dignity in a non-judgmental way.
But looking back almost three years later, I know that there was another drive at work at the time that I was unaware of. After I started the project I received a secret from a man describing a humiliating childhood experience that he had never shared with anyone. The courage he showed in mailing that postcard to me inspired me to recognize a similar secret I had been carrying alone for more than thirty years. It was an experience that I had never thought of as a secret, but I had never told anyone about it.
So I told my secret to my wife and daughter, faced it on a postcard, and—in my case—mailed it to myself. It brought me a sense of healing and ownership of that buried episode in my own life. And now in hindsight, I think the reason I began PostSecret was because at a level below my own awareness, I was struggling to reconcile with a childhood secret. And like others I have heard from, I was able to find greater self-understanding and self-acceptance through a the stranger’s secret.
Question: How many do you get?
Answer: I started the project by printing 3,000 postcards inviting people to share a secret with me. I passed them all out on the streets of Washington DC—where better to solicit secrets? I received about 100 secrets mailed back to me anonymously. It was a surprise to see the original artwork on most of the postcards. It was an even greater surprise when the secrets kept coming.
When I stopped passing out the postcards I thought the project would end. But the idea spread virally around the country and then around the world. More than 150,000 secrets have been mailed to me in just under three years.
Question: How many do you run?
Answer: Now I get about 1,000 postcards every week. From that I post 20 at www.PostSecret.com every Sunday. I also use some other postcards as part of the PostSecret Events when I speak at college campuses. Additionally there is a 400 card PostSecret museum exhibit and four PostSecret books.
Question: What motivates people to post their secrets?
Answer: I believe that the motives for mailing in secrets are complex. Maybe someone wants to share a quick personal story about a sexual taboo or funny experience. Other postcards show painstaking detail and raw personal insight. Some truly feel like confessions or poignant pleas to lost loved ones. I think of each work as a piece of art, but I also see some as sacred objects used by the creator’s to find peace or greater self-acceptance.
Question: What’s the most common type of secret?
Answer: The secrets I receive reflect the full spectrum of complicated issues that many of us struggle with every day: Intimacy, trust, meaning, humor, and desire. The themes that come through PostSecret are the same as those found feature films or literature. But I must admit, the most common secret I get is not so lofty: “I pee in the shower.”
Question: What’s the darkest secret that’s ever been submitted?
I have included one of the darkest secrets I have received recently with this interview (above). It is an image I talk about when I travel to college campuses and speak about the project.
Question: Did you ever think PostSecret would turn into the phenomenon it has?
Answer: No, sometimes I feel like I have stumbled upon something full of mystery and wonder that I don’t fully understand. The PostSecret Blog has received nearly 100,000,000 hits. When I started the project I had a goal of receiving 360 secrets in one year. I knew that that collection would have special value for me and am deeply gratified that others find these revelations fascinating too.
Question: Do you think that the success of PostSecret indicates that the Internet is fostering greater communication or greater isolation?
Answer: Yes, and yes. I have always found it paradoxical that the larger the world population becomes the more loneliness there seems to be. But I also find inspiration in how new communication technologies like blogs and virtual communities are creating the potential for new kinds of conversations.
I believe in the years to come we will be amazed by what artists and entrepreneurs dare to accomplish on the web and how their grand mistakes and accidental successes will remind us of our greater unity.
Question: What have you learned from all this?
Answer: We all carry a secret that would break your heart if you just knew what it was. And if we could remember that there might be more understanding and peace in the world.
Chris Brogan is a social media expert specializing in building communities using digital tools. He is co-founder of PodCamp, a free unconference exploring the use of social media like podcasting and videoblogging to build relationships. He produces the Video on the Net conference for Pulvermedia and blogs at Chrisbrogan.com
Question: What problem does Twitter solve?
Answer: Twitter connects me to my friends, and introduces me to people I don’t know. It lets me reach an audience all at the same time which means that I can tell them what’s got my attention. THAT’s how I answer the question on Twitter because I think “What are you doing?” is too focused on me. I’d rather tell you about something I think is interesting, and show you how to get there. Sometimes it’s about me; sometimes it’s about someone I think deserves more attention.
Question: Why is knowing that your friend’s cat rolled important?
Answer: It’s not that I really want to know about my friend’s cat, but I sure want to know about their lives. Why? Because it helps everyone feel connected across the distance. With the Internet comes the ability to have global friends, and a friend’s life isn’t just what they blog or podcast about. There’s lots of stuff that goes on in between. It’s like the commercial: “For everything else, there’s Twitter.”
Question: When I go to the Twitter home page there’s nothing but tweets about people’s cats, people waking up, people going to sleep, and tweets in other languages—what do I care about this crap?
Answer: The Twitter public feed is only interesting in the sense of thinking, “Wow, even with a big group of connections on Twitter, there’s these other several thousand people I have no idea about doing their own thing.” This almost immediately gets boring. Don’t care about it. Twitter is about you and your connections. It’s a tool that requires you to refine a bit.
Question: Then who are the “must folllows” on Twitter?
Answer: My Twitter “starter pack” includes:
NewMediaJim—he’s a mainstream TV news cameraman. His travels make news real to me.
ScottSimpson—truly one of the funniest guys around bar none. BadBanana—same reason.
DaveWiner—Dave’s pushing lots of great thoughts into Twitter, as well as working with the medium itself.
BassGhost—a high school friend, but generally fun for any old soul to follow.
Mochant—Marc Orchant, interesting and often with neat pointers.
Scobleizer—If you don’t have him, you’re missing a pulse point.
AnnOhio—she rocks out the “human” face of Twitter.
iJustine—makes me laugh out loud. A truly underrated comedian.
Question: If Twitter didn’t exist, what would you use to solve this problem?
Answer: Facebook does something similar, but it’s still so closed in and not as multi-modal feeling.
Question: Why does the New York Times, CNN, and International Herald Tribune bother when they only have a few thousand followers?
Answer: In one way, all the major media sources are using Twitter as a test. In another, it’s allowing those few thousand to propagate news fairly fast. Remember, it’s a network effect. 2,000 followers all have tangential overlaps that span the majority of Twitter. When news happens, we get it fast on Twitter.
Question: Why Twitter versus Pownce or Jaiku?
Answer: Twitter works best for me because it has a US-based SMS short code and because it offers multiple modes of SIMPLE interaction. Jaiku is a little too feature rich for me to spend time there—this is odd to say, but the extra features make it feel more like redundant blogging. Pownce just never struck me the way Twitter did. Maybe too much of an “also ran” feeling, though I think it’s a good app.
Question: What do you consider the ideal mix for the subject matter of someone’s tweets? That is, news, cool sites they found, personal updates (“Getting on a plane to Boston), opinions (“Cheney sucks”), trivia (“My cat rolled over”).
Answer: It’s nice to address your friends and followers using the @person convention and holding little mini conversations on Twitter can be fun. People have a low threshold for someone who just lobs links over the wall unless those links are almost always really interesting. However, the true magic is in answering the right question: “What has your attention right now?” Because the answer to this can span a wide range of topics.
Question: I’ve been accused of not following enough people. Why do people care how many people I follow?
Answer: People view the number of people you follow as a measure of how engaged you are with this community. If you’re just following five or six people, you’re probably a link-lobber. If you’re following tons of folks, nearly equal to who follows you, you’re probably interested in them. It’s a matter or trading attention. Mind you, the more people you follow, the less directly readable it becomes. I have to use Twittersearch and Terraminds to get the most out of Twitter.
Question: But if I follow many people, then the feed is busy and therefore useless. What should I do?
Answer: You could always have two accounts: one to follow the people you really really really need to stay on top of, and the other to hold larger conversations. Or, do what I do and use tools to mine for conversation.
Question: If you were the owner of Truemors, how would you use Twitter?
Answer: If I owned Truemors, I’d build a Twitter-to-Truemors bridge that lets me start a twitter with “tr” and then a space, and then everything after would go in as a “Twitter-Truemor” or whatever you want to call it. This would make for lightning fast news-transfer. I’d make this a stand-alone topic because it wouldn’t look as nicely formatted as other truemors.
The news here would be a little more “unprepared” because how much can you say in 140 characters? But I’ve got a sense that Twitter is faster at finding information, just because it often becomes the dumping ground of what has our attention, and we send links so others can watch too.
I’d probably also do just what you’re doing and find me some of the best/funniest/most engaging articles on Truemors and tweet them in between other things you’re twittering about.
David Bornstein is the author of
How to Change the World: Social Entrepreneurs and the Power of New Ideas.
He recently updated this book, and it’s now available for the first time in paperback. No less than Nelson Mandela said the book is “wonderfully hopeful and enlightening.” David is also the author of The Price of a Dream: The Story of the Grameen Bank, which chronicles the worldwide growth of the anti-poverty strategy “micro-credit.” The Price of a Dream, which drew on ten months of research in villages in Bangladesh, won second prize in the Harry Chapin Media Awards, was a finalist for the Helen Bernstein New York Public Library Book Award for Excellence in Journalism, and was selected by the San Francisco Chronicle as one of the best business books of 1996.
Bornstein’s articles have appeared in The Atlantic Monthly, The New York Times, New York Newsday, Il Mundo (Italy), Defis Sud (Belgium) and other publications. He co-wrote the two-hour PBS documentary series “To Our Credit,” which focuses on “micro-credit” programs in five countries. Bornstein received a Bachelor of Commerce degree from McGill University in Montreal and a Masters of Arts from New York University.
Question: Are there fundamental differences between a social and for-profit founders?
Answer: Depends what you mean by fundamental. In terms of temperament, skills, drive, the way they ask questions and think about problems—social and business founders are very much the same creatures. Increasingly we see more and more social founders who are using a business format to achieve their objectives. So a social founder doesn’t have to run a nonprofit, and in the future you will see a lot more for-profit social entrepreneurship as well as a lot of blending of legal formats.
The difference is really in terms of what the founder seeks to maximize. What is the primary motivation behind building your organization—whatever form it takes? Are you trying to develop drugs for diseases that afflict large numbers of poor people in the developing world as Victoria Hale is doing with One World Health or are you trying to dominate the world market for sneakers or fashionable jockey shorts? For-profit entrepreneurs build all kinds of things. Social entrepreneurs are primarily motivated by an ethical imperative. They seek to respond to urgent needs. The question of why is paramount.
Question: Are there fundamental differences in the people who go to work for a social versus not-for-profit startup?
Answer: The big difference is that the folks who go work for a start up focusing on creating a social change are less motivated to make a lot of money since that usually isn’t the “upside.” If you are phenomenally successful, you don’t get rich—you change the world. That difference must somehow relate to the hierarchy of values that govern that person’s decisions—and what they feel they “need” to accomplish to be happy and feel good about themselves or, alternatively, whose esteem and admiration they are seeking.
Answer: It is very tough since it is all apples and oranges and plums. In business you can compare the financial performance of companies whether they sell coffee or cars. How do you compare the success of an organization that helps disabled people to live more independent and dignified lives with an organization that provides after school enrichment to low-income children? There is no single yardstick that is comparable to revenues or profits in business, but within “sub-industries”—say college access or health care access or environmental advocacy—there are clearly some organizations that achieve more impact per dollar spent than other organizations.
It isn’t as simple as putting the data on a spreadsheet and doing a calculation. But by combining some well-thought-through metrics or proxies, which relate to impact with other forms of non-numeric evidence or analysis, it is possible to make reasoned, reliable judgments about which organizations are doing the best work and which ones should, accordingly, have greater access at a lower cost to growth capital.
In the end, it’s really not that different from what many investors and rating agencies do intuitively in business. Investors look at many intangibles—the team, the enthusiasm, the quality of the problem solving, the drive, the goodwill, the potential for growth—when they make decisions. You can do the same with social entrepreneurs.
Answer: By offering people employment opportunities that align with their talents, interests, and values. By inspiring them with a vision of changing the world, of being part of something bigger than themselves. We have to think about an assumption behind this question—namely the notion that people seek to maximize how much money they make. Certainly, we all care about making money. But choices that people make every day—becoming teachers, having children, giving money to charity—indicate that we are complex creatures motivated by many different things.
We are also at an interesting point in America’s history. With all our wealth and freedom of choice, we seem to be obsessed with finding happiness. Everyday it seems another book is published focusing on how we can make ourselves happy. Most Americans today are phenomenally wealthy compared to their grandparents, yet many studies show we are no happier, and we actually may be less so. At the very top of the list of things that make people feel happy and fulfilled are doing work that you find challenging and deeply meaningful with colleagues whom you respect and care for. Social entrepreneurship offers this.
Question: Is this why many prominent business people move into social entrepreneurship?
Answer: Business people are moving into social entrepreneurship for the same reasons that so many other people across society are moving into this field: They see new opportunities to solve problems in creative ways; as individuals, they have far more power to understand and address problems at scale than in the past; they see enormous needs to solve problems that aren’t being addressed by traditional institutions, whether businesses, governments or nonprofits; they have lived through what may be described as the “failure of success”—the extraordinary accumulation of wealth and possessions over the past fifty years that has left people feeling dissatisfied and often empty.
When Bill Gates announced that he would be stepping down from Microsoft to run his foundation, he made it clear that he was not retiring, but rather “reordering” his priorities. Why? It was through his research trips in the developing world that he came face to face with people suffering and dying—and he couldn’t shake it. He saw that he could be more valuable to the world helping to develop AIDS or malaria vaccines, or expanding access to health care systems, than helping to create more software tools, as valuable as those tools may be. Lots of people are coming to similar conclusions. It is like a global awakening.
Question: People celebrate when a corporate mogul ditches the big bucks and goes to work for a not-for-profit, but has the opposite occurred too?
Answer: What we’re seeing today is much more interflow between business and social entrepreneurship. It’s increasingly common to find people who have been working on social or enviromental issues for many years who discover a business opportunity that will augment their impact.
The surge of entrepreneurship in CleanTech is a perfect example. It’s driven by many people who cut their teeth working in the environmental field who see business as a powerful engine to achieve their environmental goals. In the health arena, we are beginning to see more health professionals or people from public health careers starting businesses that are aimed at solving problems well suited to a business model. More and more people are growing sector agnostic; they are seeking impact and looking for the best tools to do the job. This trend looks likely to continue.
Question: What makes some people take action and others to just cogitate?
Answer: It’s hard to say. Why do people who are procrastinating for months suddenly kick in gear and get their taxes done on April 14? At a certain point the pain of not acting—getting hit with a penalty—overtakes the pain of actually doing your taxes. The same may apply to other aspects of life. There is emotional pain associated with inaction, especially if we care about something. So to the degree that we help people gain more and more exposures to problems in ways that make it more difficult to emotionally accept those problems, we will see more action.
On the other hand, there is the upside of action—the anticipated pleasure and satisfaction. So, to take the tax example again, if you know you’re in for a big refund, you may be motivated to get your taxes done in January—so you can collect as soon as possible. The upside of taking action—the pleasure of collaboration, the feeling of satisfaction and thrill of making a change happen, the joy in giving—are all potentially great motivators. But often we forget to talk about these aspect of change.
The bottom line is that we focus on the “doing good” aspects, on the sacrifice, and ethical components, but we often forget to mention how wonderful it feels to take meaningful action in line with your core beliefs. Finally people often delay because they just don’t know where to go, what to do, or how to take the first step. So there is a big need for tools that help people find their place in the field of social entrepreneurship and social innovation. That is actually the subject of the current book I am working on.
Question: What are the things that keep potential social entrepreneurs from succeeding to fulfilling their potential?
Answer: The major blockages are lack of rationally allocated growth funding that would allow people to build world class institutions. Most of our major businesses are able to raise hundreds of millions of dollars in capital markets—through debt or by issuing stock. But social entrepreneurs, who typically run nonprofit organizations, usually have to raise considerable grant funding from foundations, which usually comes in small, short term installments. Because the funding is so fragmented, social entrepreneurs end up spending 80% of their time fundraising, rather than spending 80% of their time focusing on running their organizations.
This is a huge bottleneck. Social entrepreneurs who run “social enterprises” have a similar problem—which is the difficulty in finding patient growth capital targeted at businesses that seek to maximize social, environmental and economic returns at once. A corollary of this problem is the difficulty in recruiting and retaining highly talented people. Another blockage are the lack of two-way bridges between social entrepreneurs and both business entrepreneurs and governments.
Question: Then what could government or society do to encourage more social entrepreneurship?
Answer: There are many levels at which social entrepreneurship can and should be encouraged. At its essence, the goal is to help build a society in which many, many people have the confidence, skill and desire to solve problems they see around them. The most important qualities in social entrepreneurship are empathy, the ability to collaborate well with others and the stubborn belief that it’s possible to make a difference—which motivates and stimulates people to act.
There are many ways to improve the education system so that young people have experiences that build these qualities, and give them a sense of agency, a sense of their own power connected to an ethical framework. I would argue that this should be one of the fundamental goals of education. Once a child has had this experience, that child will never go back to being a passive actor in society. She will always be asking the question—Why don’t we fix this problem?—and causing waves of creative destruction wherever she goes.
We could build into the curriculum of every school and college such experiences. We could use our powerful media to make the field of social entrepreneurship more visible. At more advanced levels, social entrepreneurs need a variety of financial and structural supports—new laws, less fragmented and more rational capital markets and stronger bridges with governments, business and academia. Lots of work for anyone who has some creativity and likes to be a positive deviant.
Question: Who is the “Steve Jobs” of social entrepreneurship?
Answer: The most famous social entrepreneur would be Muhammad Yunus, the founder of the Grameen Bank. Like Jobs, Yunus took a product—“credit”—that was once an exclusive item (like the early PCs) and brought it to a mass audience. In so doing, his bank helped to democratize access to capital in a way that is similar to the way that Apple Computer democratized access to information. The effect is similar: more choice and self-determination in the hands of more people globally.
Question: Is the entrepreneur in the middle of Africa who gets a micro-loan and supports his or her family much different from Bill Gates or Steve Jobs?
Answer: Yes and no. In terms of vision and aspiration, the Bill Gates and Steve Jobs of the world are pretty rare. Forget about Africa, there are many people born into the heart of privilege, with the best education, broad exposures, lots of confidence, and they don’t become entrepreneurs. It’s just not what draws them. Entrepreneurs are most excited by making their visions real. Other people derive their greatest satisfaction from different things—interpersonal relations, perhaps, or teaching or healing or making beautiful music.
There is not much difference between leading business entrepreneurs like Bill Gates and Steve Jobs, and leading social entrepreneurs like Jim Grant, Muhammad Yunus, Fazle Abed, or Bill Drayton. But clearly not everyone has the temperament and desire to be a for-profit entrepreneur—thank goodness!
There are also entrepreneurs at many different levels. Some people build small organizations, some build medium ones, some build large ones. The difference is what’s most important to them in life, how big they allow themselves to dream and where they come to rest along the way. Without a doubt, millions of micro-entrepreneurs in Africa and Bangladesh and all around the developing world have massive pools of untapped and underutilized potential.
Given the right structural supports and exposures, including capital, many of them would go on to build very successful companies or social organizations; a subset of them would go on to build world-class firms, just like in the United States. But, lest we overemphasize the role of entrepreneurs, it’s important to realize that they are only one ingredient in the change process.
Entrepreneurs are successful only to the degree that they can bring together other people with different talents and abilities who can, as a team, build things they could never do apart. Entrepreneurs are hubs or magnets: organizing forces. It takes many hands working together to produce any significant change.
![egonomics right[1].jpg](http://blog.guykawasaki.com//egonomics right[1].jpg)
Steven Smith has spent the past ten years exploring how great leaders use ego differently than everyone else—how they work, think, collaborate, and who they are. The result of his work is a book he co-authored with David Marcum called egonomics: What Makes Ego Our Greatest Asset (or Most Expensive Liability)
Question: Which comes first: big ego or success? That is, it takes a big ego to be successful or you start with a normal ego, somehow achieve success, and then get a big ego?
Answer: First, there’s a vital difference between “big ego” and big ambition. Successful people usually start with big ambition/big ideas, and a “normal” or healthy ego. That combination of ambition, ideas, and healthy ego drives their success. If they’re not careful though, their success creates the illusion that it was them alone that achieved that success. And the more publicly visible they are, the more they believe the headlines that attribute their success to just them.
Once they assign all of that success to themselves, their ego whispers how great they are, and anything else they think or do will be equally great. That’s when healthy ego becomes “big” ego, and it’s hard to convince ourselves it’s not just us because our self-written history reinforces that we’re the one that did it.
Question: The opening line of your book is, “Ego is the invisible line item on every company’s profit and loss statement.” Why is it invisible?
Answer: Because it hasn’t been measured, and yet people know the costs are there. Over half of all businesspeople estimate ego costs their company six to fifteen percent of annual revenue; many believe that estimate is too conservative. But even if ego were only costing six percent of revenue, the annual cost of ego would be nearly $1.1 billion to the average Fortune 500 company.
The reason ego stays invisible is because we don’t talk about it—we talk about everything else—like numbers. It’s also easier to talk about lighter topics like “communication,” “decision-making,” “leadership,” or “teamwork.” But the most sensitive, yet most powerful topic, is ego.
We think people should look at management capabilities in the same way Dmitry Mendeleyev looked at the periodic table of elements. He was the first person to organize the elements by weight—lightest to heaviest. The same thing is true in business—each capability has different weights; some lighter, some heavier. The “atomic weight” of the ability to manage the human element of ego is greater than all of them.
There are other important elements on the leadership “table,” but ego has the most weight—in large part because of the affect it has on everything else. And yet it’s the most avoided. People have been afraid to talk about ego because they don’t understand how it works, especially at work. And the conversations they do have about it are usually at the water cooler and in private. More importantly, it’s almost always seen as someone else’s problem, and that needs to change.
Question: What are the telltale signs of an over-inflated ego?
Answer: First, let’s be clear that most people—99% of us—don’t have over inflated egos all the time; just some of the time. When ego over inflates, there are four early warning signs:
Being defensive: defending ideas turns into being defensive.
Being comparative: being too competitive actually makes you less competitive.
Seeking acceptance: desiring respect and recognition interferes with success.
Showcasing brilliance: ideas can be overshadowed by your own intelligence and talent.
Let’s take just one that gets a lot of people in business, and usually triggers the other three warning signs, being comparative or too competitive. Here are some things you can watch for.
Seeing someone you work with as a rival and think about how to “beat” them.
Taking disagreement with your ideas personally.
Compulsively following a competitors “lead” so they’re not doing anything you’re not.
Criticizing competitor’s strategies and prematurely discard them as irrelevant.
Believing you don’t ever deserve to lose; a game, a conversation, a debate, a promotion, a raise, etc. and you’re not gracious in defeat.
Disagreeing with someone’s point just because they’re the one who said it.
Feeling worse about where you are when you see what others achieve.
Question: Then what is a “healthy” ego?
Answer: Genuine confidence; confidence that doesn’t have to exert itself to “prove” it’s confidence. Healthy ego keeps us from thinking too highly or too little of ourselves and reminds us how far we have come while at the same time helping us see how far short we are of what we can be. But to understand what healthy ego is, you have to understand the relationship between ego and humility. For most people, tradition holds that the opposite of excessive ego is humility, when in fact having too little ego is just as dangerous and unproductive as having too much.
When we strike the right balance between ego and humility, we’re genuinely confident. We call that the “ego equilibrium” in the book. But since there’s a natural tendency to deviate from the equilibrium, when we move just right or left of center, we get false confidence, and ego manages us rather than the other way around. As a result, our strengths morph into counterfeit weaknesses, like someone who’s passionate now becomes overzealous, or if we’re strong-willed, now we become inflexible. We think it’s the same thing, but it’s not and everyone around us notices the difference.
Imagine that the spectrum of ego is magnetic, with the strongest pull coming from the two ends. At the center, the magnetic pull on either side has little effect on us. But the closer we move to the extremes, the more the magnetic pull affects us and the harder it is to make our way back. The longer we stay off-center, the more comfortable we become being off-center. If we don’t quickly recover, we’re more likely to develop bad ego habits.
Question: How can humility survive in a capitalistic, “dog-eat-dog” market?
Answer: That’s the cool thing we discovered in our work, and the perceived “weakness” of humility is the assumption even in a question like this one. Humility is the only real way to become great, everything else being equal. As a trait, humility is the point of equilibrium between too much ego and not enough. Humility has a reputation of being the polar opposite of excessive ego.
In fact, the exact opposite of excessive ego is no confidence at all. Humility provides the crucial balance between the two extremes. When Jim Collins did his work in Good to Great, humility was one of only two characteristics he discovered that separated leaders capable of leading good—even very good—performing companies, and leaders who made their companies great performers. And all of those leaders who lifted their companies to greatness and sustained them for over fifteen years did it in the same dog-eat-dog world everyone else was in. Humility was custom made for the dog-eat-dog business world.
Question: Is there such a thing as not enough ego?
Answer: Definitely. In fact, more people and company cultures suffer from this than you might think. We call it the “Junior High” side of ego; that we need the approval and acceptance of others so much that we make decisions we wouldn’t make if we felt more genuinely confident about who we are.
That lack of enough ego puts others in the driver’s seat of our self-confidence, and people start to shape their thoughts and actions to what they believe will be endorsed by others; they become “pleasers” and don’t offer what’s on their minds. Companies then get “good” ideas from people—but sadly, not their best. Ironically, when they don’t get our best, they’re less likely to give us the acceptance we deserve.
When our desire for acceptance is healthy, acceptance and respect are still important to us, but they aren’t our solitary goal. We can want acceptance without letting it affect our self-worth or authenticity. When our desire for recognition and respect is balanced, we draw a clear distinction between who we are and what we do.
Question: What is your analysis of Steve Jobs?
Answer: Steve’s gone through a metamorphosis in how he works. He’s always been exceptionally gifted as a creator and designer, but he used those gifts in a way that drove people away from his company and minimized the talent and creative IQ of the people around him. Once he was kicked out of Apple, life began to humble him through his own health challenges, his reputation, losing what he created, etc. Interestingly, Steve came out of that time of his life with a healthier ego, because life had humbled him and he accepted the lessons.
At his commencement speech at Stanford a couple of years ago he said, “I’m pretty sure none of this [NeXT, Pixar, his return to Apple, the iPod and iTunes] would have happened if I hadn’t been fired from Apple. It was awful tasting medicine, but I guess the patient needed it.”
Humility is a powerful antidote to unhealthy ego, and we can either humble ourselves, or wait for life to humble us. There was a Fortune cover about one year ago that had Steve on the cover, but the two-page spread inside had six or seven people sitting next to him. We thought that picture said it all; he’s no longer in this by himself, and it appears that he recognizes that. As a result, he’s a much better leader.
Question: How does an egotist “reform” himself or herself?
Answer: Therapy! The truth is, true egotists rarely reform. egonomics isn’t for the small percentage of egotists in the population who need therapy. In terms of reformation, we all need some. Maybe it’s the way we present our ideas, defend our positions, think about ourselves, share our talent and expertise, motivate people, etc. But the first step in any kind of reformation is awareness because where there is no awareness, there is no choice.
And that awareness can’t only come from ourselves. Get feedback, ask people how you’re doing, and watch for any of the four early warning signs. We give companies who read egonomics free access to an assessment that measures how healthy the culture’s collective ego is.
Question: What should you do if you work for an egotist?
Answer: Run to the nearest exit and find somewhere else to work, but if that’s not an option, then fighting their ego with your own isn’t the answer. Egotists rarely win unless they’re in positional power, then you can’t do much. But if they’re not your boss, then sit down and talk to them about what you’re noticing, and make sure it’s not your own ego.
Sometimes we assign other people the worst of what we’re seeing in ourselves. We also talk a lot in the book about how to communicate to get someone else to open their mind, back off a locked position, or change the way they’re working with you. Bob Sutton at Stanford wrote a very good book called The No Asshole Rule that deals more with the pure egotists. Our work is focused on the rest of us who aren’t assholes, but lack just enough humility to reach our real potential.
Answer: Rather than answer what we think, we’ll let a survey answer that question. We web surveyed about 1,200 people and asked questions about how voters would rank the humility, curiosity, and veracity of each candidate; things like how would handle making mistakes; what kinds of people they would put in their cabinet, how open-minded and forthcoming they are, how curious they are about policies they don’t understand, how diplomatic they would be internationally, etc.
About two-thirds of the people who responded were Republican. Not sure how to explain that. But what’s interesting is that a Republican didn’t win what we called the “presidential egonomics” survey. A democrat, Barack Obama, was the clear winner with a score of 80.3 out of 100. This means that the respondents saw Obama as the most open-minded, curious, intellectually honest, collaborative, and genuinely confident candidate.
The worst? Edwards, Giuliani, Romney, and McCain all came in at about the same score—all about six points behind Obama. Hillary Clinton was clearly last at 68.4.
Question: How would we change if we did a better job of managing ego?
Answer: We would be more open-minded about views that don’t agree with ours, and less rigid in making changes when we’re challenged with them. Closed minds and fixed positions may be the most prevalent outcomes of mismanaged ego. Good leaders keep their minds open. But great leaders open the minds of others in the most intense circumstances, even against the odds of prejudice, politics, and habit.
But in those circumstances ego can trip anyone, at any time, momentarily if they confuse their identity—who they are—with their ideas—what they think and believe. When we slip, we stop defending our ideas and we get defensive. We stop sharing our brilliance, and try to dominate the conversation with it. Or rather than let ideas compete with each other to let the best one win, we start to compete with each other. All of which has the net result of closing minds and the opportunity or innovation or change in a company. After all, if people’s minds are closed—even partially—there isn’t much innovation or change happening in the company.
If this topic is too threatening to buy the book, at least read this whitepaper. You can also print it and drop it on the desk of the egomaniac you work with. :-)
Moira Gunn hosts Tech Nation and its popular segment BioTech Nation, which airs weekly on over 200 public radio stations, on the NPR channels on Sirius Satellite Radio, internationally on American Forces Radio International, and to anyone, anywhere over the Internet. Originally a computer scientist and engineer, Moira started BioTech Nation rather unexpectedly in the spring of 2004 and now, she’s written a book about her experience called Welcome to Biotech Nation: My Unexpected Odyssey into the Land of Small Molecules, Lean Genes, and Big Ideas
* FYI, Moira came up with the title of this post, so she referred to herself as an “Internet babe.”
Question: Why is there a martini glass on the cover of your book?
Answer: I conceived the idea of a weekly biotech segment—and blurted it out, I might add—at a well-lubricated press event whose purpose was to lure the media into interviewing or writing about a host of biotech companies. My publisher gave me the choice of either a martini glass or a huge microphone with DNA coming out of it. It was an easy choice—but please, take note: The stem of the martini glass is the familiar double helix described by Crick and Watson, and our friend, the olive, has been given a special biotech twist.
Question: Can someone without a PhD in genetics understand your book?
Answer: Anyone can understand a book with a martini glass on its cover! And besides, I didn’t know anything about biotech when I made my grand announcement. It was just so clear that there was so much going on in biotech, and biotech was booming. How could I ignore it?
It turned out not to be as hard as you might think. First I found competent people who could explain it all in understandable ways. The trick was avoiding lots of jargon. I call it “Minimalist Science”—the least you need to know to get the point.
Also, since BioTech Nation is radio, it meant that people could only use words. With a little focus, they could make their point quite simply. As an added bonus, I was surprised to see how well what they said translated to the page.
Question: Just how pervasive is biotech in our everyday lives?
Answer: Today, one third of the world’s economy is driven by biotech. I was shocked to learn that, but think about it: There’s the big pharmaceuticals, there’s what we usually think of as biotech R&D and their start-ups, there’s genetically-modified agriculture, there’s the new biofuels like ethanol, there’s manufacturing processes, there’s bio-defense, and the list goes on. The growth potential in these industries can all be attributed to biotech.And let’s not forget computers and the Internet. Biotech is contributing massively to the information explosion all around us. That day when we finally read your DNA, you’ll get three billion letters. Like three gigabytes on your hard drive, or three one-gig chips in your digital camera. Of course, we only read your DNA once. We’ll be reading your RNA a number of times. The RNA is the other side of the double helix structure. For every letter in your DNA, there’s a corresponding RNA, telling it whether or not to take action. Your RNA changes over your lifetime, and so we’ll need to read it more than once.
Today’s biotech ventures are hoping to see if your DNA/RNA combination will tell us instantly which drugs will work for you and which won’t. There’s also hope that we will be able to diagnose depression, cancer and all sorts of medical conditions. And that’s only the beginning. Think of biomedical devices constantly monitoring your status and wirelessly phoning it in to central websites. Computer programs constantly checking this data and alerting your doctor. There’s no end to the imaginative ways that biotech will be using computers, creating and storing information, and much, much more.
Question: I thought that he can’t even spell, but you write that we have Dan Quayle to thank for having genetically-modified foods in our supermarkets. How’s that?
Answer: It’s true that the road to genetically-modified foods in American supermarkets can be traced directly back to Dan Quayle, but make no mistake: there’s plenty of credit to spread around in the entire first Bush Administration. Certainly, it was the vice president, who headed up the President’s Council on Competitiveness, and the Council was tasked with improving America’s competitiveness in biotech. Not only were genetically-modified foods not approved at the time, but also very little scientific testing had been done around their impact on humans.
So, how was the Council going to prove they were safe? The president had already issued “Four Principles,” including this one: “Biotechnology products that pose little or no risk should not be subject to unnecessary regulatory review during testing and commercialization.” Dan and the boys chewed on that for a bit, and then they came up with the idea that genetically-modified foods were safe if there was no scientific evidence to the contrary. That sounds almost rational until you realize it works especially well if there isn’t any science at all! Still, it was this “innocent until proven guilty” strategy which enabled the first President Bush to issue an Executive Order making it acceptable to grow and sell genetically-modified foods in the United States.
An interesting side question is “Why is Genetically Modified not printed on our food labels?” The answer is a fluke of timing: The Nutrition Labeling and Education Act was passed by Congress two years before genetically-modified foods were permitted by presidential order. When the food labels were legislated, genetically-modified foods weren’t approved for human consumption. Our food labels tell us everything else in the world about what we’re ingesting, but we don’t know if the food has been grown from genetically-modified seeds.
Question: Do you see a time when every cornfield in Iowa is converted to growing corn for ethanol and the price of corn to eat is sky high?
Answer: I’m not arguing that growing corn or any other crop for ethanol won’t have any impact on the food supply, but I am arguing that this scenario that has been given way too much weight and I have some very precise reasons for saying so.
First of all, the computations about how much corn is taken out of the food supply for every gallon of ethanol to date has cited the first ethanol process that was developed. There is an emergent ethanol process that has been developed which also uses the stalk and other “cellulosic” parts of the plant, as opposed to the kernels of corn. At the same time, John Deere tractor has developed a machine to separate out the kernels of corn from the rest of the plant. In this scenario, we can literally “have our corn and eat it, too!”
In fact, this new process throws off a by-product which can be burned and lessens the total cost of producing the ethanol. This simply points to the nature of technology and innovation. When humans set their minds to solving a problem, amazing things happen. It always does. In fact, science is working hard to find cellulosic plants which are even more efficient than corn. To me, the message is clear: Projecting economics, the available food supply, and all the rest based on the premise that today’s technology is all we will ever have is a fool’s proposition.
Question: You also write about Brooke Shields in your book. What does she have to do with biotech?
Answer: We started BioTech Nation by recording at the international BIO conference in 2004, and Brooke was a keynote speaker at that conference. She revealed that she had undergone an unbelievable seven in-vitro fertilizations and a miscarriage before finally delivering her first daughter. Brooke is known for talking about postpartum depression and her use of anti-depressants, but her biotech story was also poignant.
Her message underscored the advances in in vitro fertilization as well as genetic testing for a panoply of serious diseases and conditions prior to implanting the fertilized egg back in the mother. This in itself is nothing short of a miracle—that we can work with a single cell at such an early stage. A lot has happened since Louise Brown, the world’s first test-tube baby, became a reality.
Question: Speaking of Brooke Shields, do you feel that celebrity involvement has hurt or helped biotech?
Answer: Without a doubt, celebrity involvement has helped biotech research. Even though we don’t personally know a celebrity, we have an idea in our head of a living human being – their triumphs and, ultimately, their frailties. Whether it’s Alzheimer’s and Ronald Reagan, Parkinson’s and Michael J. Fox, or even Brooke Shields and her quest to have a baby, these people seem real to us, and that’s when we are finally able to pay attention. You know that their plight has reached our consciousness when we recognize how bad Parkinson’s or Alzheimer’s is. We know they are bad conditions, and if there is anything we as humans can do about it, we must.
Question: We keep hearing that the Presidential stem cells are dying. What does this mean?
Answer: That was a tough one to figure out! I was lucky to speak with Dr. Mahendra Rao of Invitrogen, who had recently left the National Institutes of Health, where he had published a special paper, and he explained it in our interview. In 2001, the current President Bush issued the executive order to freeze the current stem cell lines at what existed at that time.
If you were using federal funds for scientific research, you could only use these so-called Presidential stem cell lines. Now, fast-forward to 2007, and everyone has been growing these lines, sort of like the original 49-er’s made San Francisco sourdough bread. Once you get your starter dough going, every time you want more bread, you add more flour and water, mix up a big batch of dough, and then you keep back a piece of the dough to start your next batch.
Unfortunately, a stem cell line isn’t starter dough! It’s precision science, and these stem cells, like every other living thing, want to live and thrive. They weren’t designed to live in Petri dishes, which puts them under chronic stress. As with any living thing, when you stress them, they have a tendency to “change.” But the reason we are developing these stem cell lines is to make all the stem cells identical every single time. Otherwise, the science from one study won’t relate to the next study.
Great care must be taken to watch for these changes. Scientists do this by sampling some of the cells in each new batch. When some of the stem cells start changing, they can no longer be used for their original scientific purpose. Drastic measures can sometimes be taken to save a line, but not always. So, it’s not that the stem cells die, but rather that the stem cell line is producing cells which are no longer identical to the stem cell it started with. To say that the Presidential stem cell lines are “dying” can seem misleading to people who don’t understand the science, but still, it’s a very important concept.
Question: What is your analysis of the stem cell debate? Personally, I would use just about any technology to further medical science, but that’s just me.
Answer: There are a number of drivers in the stem cell debate, and believe it or not, I don’t think it has anything to with whether someone is a Republican or a Democrat. Take Missouri, which is a highly conservative state. We all know about the Michael J. Fox political ad on television in support of senatorial candidate Claire McCaskill. He supported her, because she was supportive of stem cell research for Parkinson’s disease. Yet, most people don’t know that Missouri also had on its ballot an initiative re-affirming that stem research in the state would be no more restrictive than the federal guidelines, ensuring that stem cell research could continue there.
It passed with just over a majority, but it broke party lines. One-third of the Republicans voted for stem cell research, one-third of the Democrats voted against stem cell research, and the independent voters were split 50-50. That says to me that people took it personally. It may be religious faith. It may be the fact that they have witnessed the ravages of Alzheimer’s or cancer or Parkinson’s first hand. It could be that some saw the science as a tool for humankind. It may be that some didn’t want the state or the U.S. to be left behind economically.
Still, there’s no doubt that public opinion has changed in this nation, and it’s swaying for whatever reasons toward support of stem cell research. Thus far, we’ve had two votes to expand the Presidential stem cell lines passing in both houses of Congress, and we’ve had two Presidential vetoes. It’s looks to me that for President Bush, it’s personal. He’s not impressed by the politics of it all. That says to me that any change in presidents—no matter what his or her party affiliation—will result in expanded federal funding of stem cell research.
Will the Executive Order issued in 2001 hurt our biotech industry, our biotech economy? At this point, with the sea of change in public opinion and political will, I think the answer is, “Not much.” Keep it up, and oh yeah, there will be a problem. But the Executive Order only applied to federally-funded research. Privately-funded research, corporate research could proceed apace. That said, we have no time to waste. We’ve got to keep our momentum going on all fronts, especially now that the tools for scientific discovery are now much better and much more available.
Sure, there’s been progress overseas and some outsourcing, but I contend that would have happened any way. Possibly less so, yes. Roger Pedersen would likely not have left UCSF Medical School and moved to Cambridge to head their stem cell initiative. But the future of biotech today is not based a few scientists here or a few scientists there. And scientists everywhere are wildly competent and intensely motivated.
Question: Which biotech story had the most personal impact on you?
Answer: I would say what I learned about diabetes was the real eye-opener. First of all, one out of six people worldwide are either pre-diabetic or diabetic—and over half don’t even know it. That holds true in the United States, as well. And there’s more: if you are pre-diabetic, without intervention, in about ten years time you will become a full-fledged diabetic. Your body will have suffered significant damage along the way, leaving you more open to heart attack, stroke, and all the other side effects we associate with diabetes.
Diabetes—and the lead up to full-blown diabetes—is a ticking bomb in our midst only we can’t hear the ticking. There’s new technology which can help us recognize this condition, and in my opinion, we need to jump on it. One example is a simple device over which you simply hold your arm for thirty seconds. You have to tell it your age, and it can easily tell you if you are likely in a pre-diabetic state. Seems to me we ought to have them at every polling booth, every pharmacy, every clinic, every place people gather simply as a public health measure.
Question: How is it you came to have to an entire chapter devoted to semen?
Answer: I did it! I admit it! I didn’t envision it originally, but it suddenly became obvious to me that there was a natural grouping of provocative findings and anecdotes. I think the most important topic I talk about in what has become known as “the semen chapter” is the new semen-based test for prostate cancers. Right now, 40% of men will test positive for prostate cancer by age forty. And it gets worse over time. With our current method of diagnosis—a notoriously unpleasant physical exam and a blood test to check PSA levels—we get 75% false positives.
Following this diagnosis, there are needle biopsies—even if you are falsely positive—and this can proceed to full-on surgery. The nerves of the prostate are not something we want to fool around with; the downside can be problems in the bedroom, if I may be sort of direct! This new semen-based test is in clinical studies now, and it’s not only accurate, it can also detect the difference between the slow-growing variety of the prostate cancer and the wildly aggressive type.
Don’t forget that two years ago in the United States, 230,000 men were diagnosed with prostate cancer and 30,000 men died from it. That’s serious by any measure. We want to find the 30,000 men with the aggressive form of prostate cancer much earlier and much more accurately than we have before, and we want to leave the hundreds of thousands of men with false positives alone. But truly, there’s much more than this in the semen chapter. There’s the business of the gorilla sperm, but you’ve got to read the book to learn about that!
Question: If Steve Jobs were the CEO of a biotech company, what would it produce?
Answer: Dividends—only kidding! Apple isn’t known for spewing out the dividends, but you have to believe with Steve Jobs at the helm (1) it would be a wildly innovative take at how to look biotech, and (2) it would change how everyone looks at things, whether they are buying the product he’s selling or not. We’ve already talked about the information explosion which is going on in biotech. Why couldn’t your iPod/iPhone hold your iDNA, your iGenes and your iChromosomes. The iCEO himself has got to be thinking about all this. You just have to wonder: What’s he thinking?
Question: How do people stay motivated in the biotech business when it takes a decade to even begin to know if you have something?
Answer: The scientists I have met in the biotech arena are absolutely gripped by the whole concept of biotech right down to the core of their beings. It’s the audacious puzzle of it all, which just might be solvable. It’s the idea that they can make such a difference to individuals, to their families, and to the human race. I have never encountered such people and you see them everywhere. Yes, they inch forward, sometimes they leap forward, and then slide back, or are proven to be barking up the wrong scientific tree.
Also, don’t be fooled by the idea that “it takes a decade to even begin to know if you have something.” Actually, you learn a lot along the way, and scientists take those things and apply them to other challenges. Dr. Ananda Chakraberty received the first life science patent for his “super-bacteria” which he designed to “eat up” oil spills and convert them to something innocuously organic. Now he’s using all his experience and wisdom with bacteria to attack brain cancer. Dr. Joshua Boger, the president and CEO of Vertex Pharmaceuticals, took the scientific methodology he and his firm developed to address HIV/AIDS and converted it to attempt to meet the Hepatitis C challenge.
It’s true that the big wins take a long time. But the little wins? Nearly every day.
I work in the surreal world of Silicon Valley where venture capitalists fund companies based on PowerPoint pitches and executive summaries. My friend Tim Berry rightfully pointed that business plans still serve an important role in "the rest of the world." He's right, and he should know because he's the president of Palo Alto Software, the principal creator of Business Plan Pro, and the author of a blog called Planning, Startups, Stories. He was recently named the US Association of Small Business & Entrepreneurship (USASBE) Corporate Entrepreneur of the Year for 2007.
Question: Who even reads business plans anymore?
Answer: How about “Who should read a business plan”? It’s not about whether venture capitalists read plans, it’s about planning to make your business better. So here’s who should read a plan:
First, you the owner, manager, author of the plan--and you’d better be the owner of the plan too—not some consultant. The plan is by you and for you and if tracking it, reviewing it, managing and executing it aren’t important to you, then you don’t understood planning. Planning isn’t about the document; it’s about controlling your destiny, running your business better, setting goals and tracking progress, and keeping your eyes on the horizon while not tripping over potholes in front of you. If you’re not going to read it regularly, then don’t ask anybody else to.
Second, team members, boards of directors, and collaborators. A business plan is a way to coordinate, communicate, and collaborate with accountability and tracking. It should get all the key people on the same page. Nobody can execute a plan they don’t know about.
Third, relevant outsiders. Banks, investors, boards of advisors, key consultants, and even occasionally—but only with caution—vendors or prospective new high-level employees.
Question: What’s the most important qualities of a plan?
Answer: First, a plan should set priorities with the understanding that you can’t do everything. After all the buzzwords and analysis, strategy is focus. What can you do better than anyone else? What’s your core competence?
Second, specifics. What’s going to happen, when, how much it’s going to cost, and who’s responsible for it.
Third, cash flow. Growth spurts in a company are good things, meaning more sales, and presumably more profits, but unplanned growth can suddenly sucks up liquidity and in the worst cases kill the company. Growth without prior planning can be as fun a hard kick in the stomach.
Here’s a story to illustrate the concept growth versus cash flow: Willamette River runs through Eugene where I live. More people drown in the slow deep portions of the river than in the rapids because people think they’re okay when it’s slow. Cash flow is like that, you think it’s okay when you’re growing and profitable. Profits are good, but cash and profits aren’t always timed together.
Question: In what order should you do the summary, pitch, and projections?
Answer: That’s another chicken and egg question, and the answer depends on who you are, how you think, and how you work. I go through periods of months and in at least one episode years in which I think in broad bullet point terms first, then fill in details, and then I’ll swing over and start thinking in numbers and projections first, then filling in the concepts. I’ve watched people with planning for a lot of years, and it’s a style question.
What’s most important with this order of execution is to understand that it will never be sequential. In whichever order you do it, you will always be doubling back. I’ve done it in every conceivable order, but I’ve never done a plan from step one to step N. Fleshing out the second step will almost always bring up reasons to revise what you did in the first step, and the third step will make you rethink the first two.
At every point that you stop and work with plan, share it, talk about it, or manage it, then you’ll need to review the parts for alignment. I’m not talking about the big fat “Business Plan” as opposed to the larger and more useful real plan, the live plan. You need to keep alignment between the concepts and the numbers, and between the summary, the pitch, and the plan. In the real world it’s hard because a good plan is so alive that whichever part you touch changes.
Question: What about the theory that you should develop a pitch instead of a plan?
Answer: A good presentation is a great way to communicate the core of a plan, but it doesn’t substitute for a plan. A pitch without a plan is like a movie trailer without a movie. The plan and the pitch should work together. Which comes first is chicken and egg, a matter of personal style, but it’s crazy to have a pitch without a plan, or, if you’re aiming high in the investment world, a plan without a pitch.
VCs like the contrarian buzz they get when they say they want the pitch instead of the plan, but they’re really always assuming there’s a plan in the background, aren’t they? They’ll probably have some analyst read it. We hear about some rare exceptions, but they are interesting for just that, they are so rare.
Furthermore, the whole pitch versus plan discussion is limited to the exclusive top of the pyramid: the 5,000 or so deals that get VC funding in an average year plus another 25,000 or so that get angel funding. For the other twenty-six million or so businesses in this country, planning is vital and a pitch is an excellent part of the planning process, not a replacement for it.
Question: What’s the optimal process for writing a business plan?
Answer: Grab whatever part gets your attention first and get going. Understand that it’s not sequential it’s iterative, and a good plan is never done. Some people do the numbers, then the concepts, most people do concepts first, but it doesn’t matter. Planning isn’t a waiting room where you sit until you’re done. Build it in parts, mix and match, choose items from a menu. If you like, do a sales forecast and see where that leads you.
My favorite process starts with what you want for the business on the long term, moves to establishing a conceptual identify: what are you best at, how do you want the world to distinguish your business from all others. Then it goes to the marketing: what message, to whom, through what media. Then it goes to sales forecast, costs, expenses, and last but frequently most important, cash flow. Key concept: a good business plan is never done.
Question: What are some of the common mistakes?
Answer: The worst by far is focusing on the plan instead of planning. This generates the idea that you create a plan as a document, and the related misunderstanding that the plan is for somebody else. You don’t postpone life while you’re developing a plan; you’re always developing the plan. In the meantime, “Get going.” Here are some other common mistakes:
Question: When do you revise a plan?
Answer: You need to revise a plan regularly, like steering a car or walking, both of which are constant small course corrections; but you also need to stick to a strategy consistently for two to three years at least to see it working.
It’s better to have a mediocre strategy consistently applied over a long term than a series of brilliant strategies contradicting each other every six months. The hard part is knowing which is which. Don’t ever stick to the plan like running into a brick wall just because some cliche says you’re supposed to; that’s just dumb. But you also need the patience to let things work. Sometimes we keep solving the same problem repeatedly because we don’t have the patience to let the first solution work before we change to the next solution. It’s paradoxical.
Question: What’s the best format?
Answer: Form follows function. Planning isn’t about the “Business Plan” document, it’s about the planning process that creates management. The vast majority of business plans are for the business themselves—not to be read by outsiders, and they should stay on a computer and in bullet points and financial projections because that’s how they can be used.
Until your plan needs to go to outsiders you keep it simple and practical. I’ve been running my company with a business plan for twenty some years now, it gets revised often, discussed and managed often. But we print it when our bank asks for it—maybe every five yeras or so.
However, when you do have a “business plan event,” as we call it—meaning loan application, investment, or review for board of directors or advisors—then give your readers a break. Include charts to illustrate numbers. Use easy to read bullets. Use 12-point fonts for people over 50. Make an easy outline to follow. Include an executive summary that could stand alone if it has to because it will. Have chapters describing the company, what it sells, the market, the plan specifics —strategy, tactics, and programs, the management team, and the financial projections. Don’t be afraid to use PDF documents, they travel well and are convenient for all concerned. And let your readers decide whether they want hard copy.
Question: How can you project numbers for a new business with no history?
Answer: Aim for the educated guess. Educate the guess with back-up information laying out assumptions for how many potential buyers, what sort of penetration process through the market you’re projecting, and what experience shows in other industries. Look for indicator factors you can tie your numbers to, like web traffic and click-through and conversion rates for one kind of web business, or page views and ad views and ad revenues, on another.
Don’t sit around debating projections—start selling. Prove your sales projections with sales. One of the best things about working with Philippe Kahn during the early days of Borland International was how he jumped out of the planning and into the sales at a moment’s notice. Nothing made the projections more credible than the $90K bundling deal from a computer manufacturer that also put dollars in the bank account (and $90K bought more in 1983 than it does now). There’s no data substantiation better than actual sales.
Always try to get data you can pull apart into assumptions. I just used a web example, but even in the less data-rich world, you can project a restaurant sales by breaking it into meals per sitting and sittings per table and people per sitting and tables available and sittings per hour and peak hours and other hours, all of which helps to educate a guess.
Always try to add experience. People who know a business understand general scale in a way that’s extremely hard to duplicate from scratch. I understand that we’re talking about a new business here specifically, but new businesses are usually derivative. If you don’t have the experience yourself, find somebody who does, and entice them into sharing and listening a bit. Buy lunch. Use flattery. That’s why boards of advisors were invented, as a forum for lunch and flattery.
And remember: Start the planning process immediately. You’re projecting a new business only until you’ve finished the first month, and then you have plan versus actual to deal with. You’re laying down a plan so you can track the difference between plan and actual results. Your plan will always be wrong, but you’ll be tracking where, why, and in what direction.
Question: How do you know when you’re done?
Answer: A good business plan is never done. You’re going to be circling back around it for as long as you care about your business and want to manage it better. If your business plan is done then get out of that business, it’s dead. You’re always moving towards the horizon, and you’re business plan is always there to track where you’re going, mark the steps, and help you steer.
The absolute worst business plans ever, anywhere, are those plans in a drawer somewhere. If you’re not keeping it alive, it’s not planning; it’s just a plan. It’s history. It’s of no business value.
Question: What do you make of these “Web 2.0” entrepreneurs who say that the world is moving too fast for anything as “1.0” as a plan?
Answer: They’re referring to the the big fat “Business Plan” when what they need is planning. Planning is vital because it keeps you on track and mindful of important long-term strategy and objectives. A plan, on the other hand, a plan taken by itself, is only as good as the implementation it causes.
Planning is exactly what you need to deal with the speed of change. You have to remember that your business plan is always wrong—it has to be because it’s predicting the future and we’re human, we don’t do that very well. But it’s still vital because it’s the way you lay down tracks so you can follow up on the constant difference between plan and assumptions.
Without a plan, when assumptions are wrong you don’t even know what they were, how were they wrong, in what direction, and what can you do about it. With a plan, you use plan versus actual all the time to manage the difference between what you thought and what actually happened.
That’s what I love most about having a GPS unit in a car. When I screw up and take the wrong turn, the GPS still remembers where I wanted to go and tells me how to change my course. That’s what good managers do with a sound planning process.
Jeffrey Pfeffer is the Thomas D. Dee II Professor of Organizational Behavior at the Graduate School of Business, Stanford University. He is the author or co-author of twelve books.Dr. Pfeffer received his B.S. and M.S. degrees from Carnegie-Mellon University and his Ph.D. from Stanford.
He began his career at the business school at the University of Illinois and then taught at the University of California, Berkeley, and he has been a visiting professor at the Harvard Business School, Singapore Management University, London Business School, and IESE in Barcelona.
Pfeffer currently serves on the board of directors of Audible Magic and SonoSite (SONO) and writes a monthly column on management issues entitled “The Human Factor” for the 650,000 circulation Time-Warner business magazine, Business 2.0
This interview is based on his latest book:What Were They Thinking?: Unconventional Wisdom