How One of Twitter’s Largest Shareholders Launched His Career

With Twitter’s IPO, the press is publishing glowing profiles of the company’s executives and early investors. The praise is well deserved. But it can be easy to forget, amidst the write-ups of all the wealth that’s been generated, that the bright minds behind Twitter were not born geniuses or born successful. They had to hustle to get where they are.

After all, co-founder Ev Williams was born a Nebraska farm boy. Co-founder Biz Stone was raised on food stamps. Co-founder Jack Dorsey battled a childhood speech impediment and grew up in middle class St. Louis.

Or consider my friend Chris Sacca. Today he is one of Twitter’s biggest shareholders and has served as a longtime advisor to the company. He’s an active angel investor. Previously he worked as head of special projects at Google.

But not so long ago, Chris was an out-of-work attorney in desperate need of income to help him pay off his student loans from law school.

Chris began sneaking in through the back door of networking and tech industry events, utilizing his Spanish-language skills to smooth-talk the workers in the kitchen to let him in. Once he was at the event, he realized that handing his new acquaintances a business card that listed only his name — and no employer — wasn’t impressing anyone.

So he hatched a clever plan to boost his credibility at the events he attended: create a consulting firm and employ himself there. He made new business cards, hired a developer to build a website, and enlisted his fiancée to draw a corporate logo. Then he returned to the same networking events with new business cards that read, “Chris Sacca, Principal, Salinger Group.” Suddenly, the people he met were interested in talking more. Through these connections he eventually landed an executive job at a wireless company, and his career took flight.

Sneaking in the back door of networking events toting business cards with a made-up company name to seem marginally more impressive so people will talk to you? Yup. Every great entrepreneur — or investor — displays extraordinary hustle and resourcefulness and ingenuity. One of my favorite examples in Silicon Valley is Pandora founder Tim Westergren, who pitched the company to over 300 VC’s before receiving any funding. We profile him in The Start-Up of You.

Hustle is hard to deconstruct; it’s not something you “learn” like you would accounting or public speaking. It’s more a state-of-mind that develops — or doesn’t develop. I’ve found the best way to develop a readiness and enthusiasm to hustle is to read stories of people like Sacca and Westergren and be inspired by all the little things they did to get to where they are. Especially when they’re in the headlines and it all seems preordained. It wasn’t. And that’s inspiring.

LinkedIn’s Series B Pitch Deck to Greylock

Reid recently published the pitch deck he used to raise money for LinkedIn in 2004, when it didn’t have a dime in revenue, from Greylock Partners. Alongside the original slides, he includes historical context and relevant pitch advice for entrepreneurs. It’s a treasure trove of information. Mandatory reading for anyone raising money from VCs, or anyone looking for context on the amazing company Reid co-founded. In a separate post, he also summarizes more briefly his top overall lessons on pitching VCs.

Special thanks to Ian Alas on our team who spent several months working on this. It will go down as a piece of Silicon Valley history.

San Francisco’s New Entrepreneurial Culture

My old friend Nathan Heller has a new piece in the New Yorker about how youthful go-getter entrepreneurs, and the companies they’re founding, are remaking the culture of San Francisco. I am quoted in the piece. It’s impressionistic — it gives you a feel of the place — more than it advances a single overriding thesis. This sentence caught my attention:

[San Francisco contains a] rising metropolitan generation that is creative, thoughtful, culturally charismatic, swollen with youthful generosity and dreams—and fundamentally invested in the sovereignty of private enterprise.

 Worth a read.

Knowledge & Networks Enabling More Youth Entrepreneurship

Silicon Valley-style entrepreneurship, practiced around the world, is hot. There are several reasons why starting a tech startup is easier and cheaper and therefore as popular as ever today: the vanishingly low costs of laptops, storage, video conferencing and other technology tools; talent marketplaces like Odesk and Linkedin; cloud computing infrastructure like Amazon Web Services; distribution platforms like Facebook and Twitter for spreading consumer internet apps; a more structured and accessible angel financing market (facilitated by AngelList and others); and so on.

The entrepreneurship boom is particular pronounced among youth. High school and college kids, when surveyed, are clocking in at record highs in terms of expressed interest in entrepreneurship, and as far as media reports and VC whisperings go, it’s no longer unusual to hear about a teen who’s starting a company or setting up some sort of organization or leading an entrepreneurial cause. Youth benefit from all the aforementioned forces that enable more entrepreneurship generally — especially the tech advances that have made everything cheaper.

knowledge

But there’s one category of change that, to me, is as important an enabler of entrepreneurship as any other: in the past few years, the body of knowledge about how to start a company, how to code and work with technology, and how to thrive as a businessperson in general has gotten extremely well organized and of course is freely accessible to all.

Back when I got interested in tech entrepreneurship in the year 2000 (I was 12 years old), I harbored a boatload of raw interest but knew next to nothing about technology and business, and didn’t have relationships with any tech/business entrepreneurs, either. There were no entrepreneurship bloggers. Information on the web was scattered and of uneven quality. I remember posting questions about market segmentation on the low-tech forums of IdeaCafe.com and being confused by the answers I got back.

So from day one, I hustled relentlessly to chip away at my ignorance by doing things that seem positively old school by today’s standards.

I went to the San Francisco Public Library and loaned out books on marketing.

I looked up local event listings in Silicon Valley, tracked down the bios and email addresses of the speakers, and, rather than physically attend each public event, the day after the event was scheduled to have happened I emailed the speaker and requested a copy of their PowerPoint deck. The speakers assumed I had attended, and were happy to send me their decks, on everything from pricing strategy to customer service to internet trends.

I lobbied my 7th grade history/economics teacher, who had a collection of Harvard Business Reviews stacked up on his reading shelf, to allow me to copy a few articles in the school’s Xerox machine. I ended up copying thousands of pages of HBR articles into a custom binder that I kept for myself. I had to stop when a school administrator caught me using the copy machine and insisted, kind of incredibly, that I should buy the re-print rights to articles I wanted for myself instead of photocopying them.

I cold called the business school dean at Golden Gate University and asked if I could audit their business classes, and they agreed. I sat in several classes on management and marketing for free.

I went to Goodwill and bought cassette tapes of Tony Robbins’ original classic Personal Power — my first introduction to the self-help genre. (I have agency in the world!)

I attended a “tech camp” at the University of San Francisco to learn Basic (but switched to HTML and CSS). It was okay. There were no good online classes for on-going instruction; I had to teach myself basic HTML by viewing the source code on web sites, copying the code into BBEdit, and then deleting and editing lines of code line-by-line until I figured out what each command did.

I met with volunteer SCORE counselors at the local SBA office and they taught me about income statements, balance sheets, and cash flow statements.

And I reached out to businesspeople in the community to begin building a professional network. The very first person in my network was my neighbor Mike, to whom my first book is co-dedicated. He was the first node, and he introduced me to a few people, and it grew from there.

Today, on each of these fronts, one has a much easier go of it. For example, sites like VentureHacks and Ask the VC and Mark Suster’s blog and Quora threads explain every aspect of the startup process. LinkedIn is now a directory of most people in white collar industries, and there are many groups there and on Facebook for young entrepreneurs to meet each other and connect. On the tech side, CodeAcademy and several others teach basic tech skills in a structured manner on the web.

It’s not only that there’s more information easily available today, but there’s refined curation. While I learned a bunch hustling about in my teens, I also wasted untold cycles of time. I read bad books; I met people who, in hindsight, weren’t worth the time; I read irrelevant articles while overlooking relevant ones; etc. By contrast, today there are various “best of” lists and other crisp navigational guides to finding very best content related to your business challenge.

I should say I’m aware that the “paucity” of free knowledge and resources available in year 2000 that I’m describing (when I began my quest of self-education) far exceeded what existed in years prior. So I had a huge advantage getting started, from a knowledge-perpsective, than prior generations. Even as we’re now all lapsed by the current teen cohort, as they whiz by us at faster and faster speeds…

Bottom Line: Democratized, free entrepreneurship-related knowledge and networks is the game changer for facilitating ever more youth entrepreneurship. It’s a great thing for the world. It’s a great thing for the young, ambitious, and inexperienced. Even if it makes me a little jealous of today’s teens!

Founders Hiring “Professional” CEOs to Run Their Company

Reid Hoffman’s new essay If, Why, and How Founders Should Hire a “Professional” CEO is worth reading for any entrepreneur or any executive thinking about joining a high growth startup. It’s a very personal topic for Reid, and an important one for everyone in the industry to think about. The concluding paragraphs:

20 years ago, venture capitalists were in a hurry to bring in professional CEOs.  Today, many of the same VC firms are busy touting their support for long-term Founder-CEOs.  Both approaches can work, which means that as an entrepreneur, you should focus less on what’s fashionable, and more on what’s right for you.  This is a highly personal decision, and the right answer depends on you and your team—including your co-founders and your VCs.  You might be a Steve Jobs, or you might be a Pierre Omidyar.  As an investor, I’m willing to back you, even if you’re not sure which one you are yet.  In every investment we make, we hope that the Founder-CEO will be able to lead the company to success, but if not, and if you realize as I did that you want to bring in a professional CEO, we’ll work with you to find someone who is a true partner.

So as it turns out, Ben Horowitz was right.  You always do want a Founder-CEO.  But that person doesn’t always have to be the Founding CEO.  Being there at the start isn’t the only path to being a founder.  “Founder” is a state of mind, not a job description, and if done right, even CEOs who join after day 1 can become Founders.

Steve Jobs Brainstorming at NeXT

Fascinating 20 min video of Steve Jobs leading a brainstorming session (among other things) at NeXT in the late 80's. At his death he was leader of one of the world's largest corporations; but in this video he talks as a founder of a fledgling start-up dealing with office supplies and payrolls. He implores his employees to regain the "start-up hustle." Good stuff.

Good Marketing is Good. Bad Marketing is Bad.

Fred Wilson blogged about marketing:

I believe that marketing is what you do when your product or service sucks or when you make so much profit on every marginal customer that it would be crazy to not spend a bit of that profit acquiring more of them (coke, zynga, bud, viagra).

Brad Feld piled on with a post titled: Why a Start-Up Shouldn't Have a Marketing Budget. Brad says when he hears the word "marketing" he vomits in his mouth a little.

But, Brad's not anti marketing. He's anti bad marketing. He actually says every one of his start-ups spends money on marketing. It's just that the marketing efforts are "wired into the DNA" of the product and company.

And Fred, after dismissing the importance of "marketing," endorses a bunch of activities from his portfolio company that could easily be called marketing.

The word "marketing" encompasses a bunch of good activities and a bunch of bad activities; a bunch of useful philosophies and un-useful philosophies. The question is which specific marketing activities and philosophies are productive and useful and which are a waste of time and money.

And that depends on the specific company, product, industry. We can all agree throwing $10k to a social media consultant to "promote" a product on The Twitter is a waste. But usually it's more complicated. For example, Fred noted he was referring only to consumer internet companies and not enterprise SaaS companies. That's a crucial distinction. Another example: manning a booth at an expensive trade show like CES may be a good marketing expense for Orbotix, but not a good marketing expense for other companies.

Marketing is neither good nor bad, neither a waste nor a necessity. It's both; it depends. This sounds obvious, and maybe it is, but it seems worth keeping in mind when reading broad-brush posts like the one Fred wrote this morning.

The Four Types of Entrepreneurship

Not all entrepreneurship is the same. Steve Blank clearly describes four different types:

1. Small Business Entrepreneurship
Today, the overwhelming number of entrepreneurs and startups in the United States are still small businesses. There are 5.7 million small businesses in the U.S. They make up 99.7% of all companies and employ 50% of all non-governmental workers.

Small businesses are grocery stores, hairdressers, consultants, travel agents, internet commerce storefronts, carpenters, plumbers, electricians, etc. They are anyone who runs his/her own business. They hire local employees or family. Most are barely profitable. Their definition of success is to feed the family and make a profit, not to take over an industry or build a $100 million business. As they can’t provide the scale to attract venture capital, they fund their businesses via friends/family or small business loans.

2. Scalable Startup Entrepreneurship
Unlike small businesses, scalable startups are what Silicon Valley entrepreneurs and their venture investors do. These entrepreneurs start a company knowing from day one that their vision could change the world. They attract investment from equally crazy financial investors – venture capitalists. They hire the best and the brightest. Their job is to search for a repeatable and scalable business model.  When they find it, their focus on scale requires even more venture capital to fuel rapid expansion.

Scalable startups in innovation clusters (Silicon Valley, Shanghai, New York, Bangalore, Israel, etc.) make up a small percentage of entrepreneurs and startups but because of the outsize returns, attract almost all the risk capital (and press.)

3. Large Company Entrepreneurship
Large companies have finite life cycles. Most grow through sustaining innovation, offering new products that are variants around their core products. Changes in customer tastes, new technologies, legislation, new competitors, etc. can create pressure for more disruptive innovation – requiring large companies to create entirely new products sold into new customers in new markets. Existing companies do this by either acquiring innovative companies or attempting to build a disruptive product inside. Ironically, large company size and culture make disruptive innovation extremely difficult to execute.

4. Social Entrepreneurship
Social entrepreneurs are innovators who focus on creating products and services that solve social needs and problems. But unlike scalable startups their goal is to make the world a better place, not to take market share or to create to wealth for the founders. They may be nonprofit, for-profit, or hybrid.

The happiest entrepreneurs I've met are the small business ones, not the scale / conquer-the-world ones.

The Best Books on Start-Ups for General Reader

Tyler C., a loyal reader of many years, asks in an email:

What is the best book on start-ups?  Not a how-to book, but a fun book for the general reader.

Another way of putting the question: What is a good book that conveys the fun spirit of start-ups that’s not an explicit how-to?

I replied:

1. Founders at Work by Jessica Livingston is a collection of transcripts with start-up founders from companies like Flickr and PayPal and Google. No editorializing, no analysis, no conclusion. Just long Q&As with founders that give a surprisingly good glimpse of what it’s like to build world-changing technology companies. The lack of narrative spine may make it hard for non-insiders to get into it, though. And there’s no sugarcoating the long, hard slog.

2. Startup by Jerry Kaplan was the classic book of this genre for a long time. It tells his story of developing a pen-based computer. Written in 1994, it’s a bit dated (pre-internet), but still good. I remember reading this several years ago and feeling inspired by the journey.

3. The MouseDriver Chronicles is very fun. Two young Penn grads start a company that develops a computer mouse in the shape of a golf club / driver. Company ends up failing but super entertaining.

4. eBoys by Randall Strouss is a fun book about venture capitalists. It follows Benchmark Capital as they invest in Webvan and eBay during the dot-com boom. Gives a sense of the era.

I think the best how-to book on entrepreneurship, by the way, is Richard White’s The Entrepreneur’s Manual. Amazingly, it’s out of print. Amazon has used copies.

Opportunities in Old, Stodgy Industries

My friend Josh Newman is shifting his film production company to be a venture capital firm that will focus on growth opportunities in unsexy industries:

Cyanmatrix

I think he's right about the gap in attention and money to that quadrant.

There are many opportunities in stodgy industries that go unexploited because it's not mobile / real time / social / insert-buzzword-of-the-day-here. I always enjoy Marty Nemko's blog, and he often champions unsexy business ideas. In his entrepreneurial ideas tag, you can read about his business ideas for organic perfume, food carts, velcro shirts, and more. His entrepreneurship tag has even more.

One more random thought on generating business ideas: look at segments where most of the businesses feel scammy — and then do the exact same business but in a buttoned-up way. Google "mystery shopping" to see what I mean by "feels scammy." Anytime dozens of weird AdWords pop up, you know there's real money being made, but often by scammy entrepreneurs.

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Alex Mann awhile back had good tips for how to get into the entrepreneurial swing of things even if you're in college.