Collision Conference – Day 2

Posted on May 17, 2014

Day 2 of the Collision Conference was shorter (ended by 2:30pm) and I had the opportunity to attend two roundtable sessions rather than listening to everything on the main stage.  As such, my notes for the roundtable sessions included below are ones that many would not have received.  Mark Suster held a roundtable beside us which was very well attended – wish I had the notes from that one!

The Optimism Bias – Tali Sharot

-“remarriage is the triumph of hope over experience” hilarious quote
-we are optimistic about ourselves, our families, our lives but not those around us
-entrepreneurs are more optimistic than the broader population
-81% said their business would survive (half will be unpleasantly surprised).  Almost all over-estimated future sales and growth
-by being in charge and in control entrepreneurs believe they will succeed
-most people would be willing to bet money they are above average at getting along with people, being interesting, etc
-how do we maintain optimism in the face of reality?
-our immediate reaction is to protect ourselves when something threatens us
-we can protect ourselves by working harder but it is easy to use denial, rationalization and distancing ourselves
-without us knowing it, we essentially think that the threat is not relevant to us
-there is something in the brain that prevents us from wanting to learn unpleasant information
-so they performed experiments using brain scans
-the more optimistic you are, the less likely you are to take on bad information
-benefits of this process?
-less stress and avoid depression
-optimistic expectations can become self-fulfilling
-optimistic people tend to imagine better futures with more details.  Tend to be more likely to come up with the solution
-disadvantages?
-unresponsive to warnings
-how do we fix it?
-social incentives
-immediate rewards and positive feedback
-progress monitoring.  Show people they can get better.  Show them what to do.
-put you in control
-“Smoking kills is wrong” because the brain wants good info such that “not smoking makes you a better athlete” works better
-the key is being aware that this is happening to you

Building a startup in stressful times – Mark Suster

-building and funding a startup
-restarting his show in June “this week in venture capital”
-we are not rockstars.  Building a startup feels like planes, trains and automobiles
-truthfully startups are a grind.  Wants to instil a sense of realism
-everyone is naked in the morning mirror
-need to realize that VCs on the competing side is nothing more than seeing people in their best
-you have to accept a certain level of not believing the hype of the other side and building confidence
-lack of confidence kills startup performance
-take 50 coffee meetings
-who you know and who will help you in tough times is a big determinant of success
-commit to one coffee meeting per week (wake up early) to take 50 coffee meetings per year
-even if just 10% convert to a meaningful relationship then you will have new connections to leverage and 5 years go faster than you think
-create a sense of urgency
-people who achieve a lot set deadlines, big goals and urgency around hitting those goals
-1 out of 30 have this sense of urgency.  A feeling of going somewhere that is perceptible.
-prove you can ship a product
-it doesn’t have to have customers but you need a cadence of product shipping experience
-you manage what you measure
-old saying but true
-urgency has to come with specific goals in mind
-put your goals on the wall.  Make them visible.  If you can’t tell your staff then you clearly don’t have goals.
-start measuring and if you miss then regroup around performance or the goals.  Always possible to fix but drives a conversation
-pay close attention to details
-don’t let the product quality suffer
-don’t let anything get in the way of the little things that matter
-the most successful companies in the world pay attention to every single detail
-raising capital
-you need to meet investors early
-otherwise they are just judging your presentation skills
-that is not a good way to determine whether you can build a good company
-frankly you don’t want to judge investors quickly either
-if the investors are bad or difficult to work with there is no divorce clause.  You are stuck with them.
-you need to know the investors.
-fundraising is simply part of the CEO’s job.  ABR.  Always be raising.  You have to commit time to it year in and year out.
-if raising angel or seed, you need an anchor.  Make that anchor an advisor and hook them.
-most wealthy people are cheap bastards and likely got wealthy because they are cheap
-offering a discount to someone with lots of money is well worth your time
-get as long of a runway as you can (18 months the norm)
-need to have as much time as possible to prove out traction
-There are 99 wantrapreneurs for every one who just starts
-one difference – just start.  Just go.
-there is a huge premium for taking the first leap
-if you have confidence then jump off the cliff yourself and allocate huge amounts of equity to “hire your co-founders”
-control the scope of your work and ultimately most businesses blow up early because of founder tension
-so you can keep the business if you fall out of love
-triangulate
-call 8-10 people and hear opinions
-take in data points but trust your own judgement
-watch for mentor whiplash and trust your gut with the data you receive
-only start with an idea you’re passionate about

The Destiny of Data – Ryan Holmes, Rob Bailey, and Kurt Wagner

-social data is becoming more and more relevant
-need to use the data to respond to issues quickly so they don’t go viral
-video is becoming more and more important at Hootsuite with requests to see what happens with video
-so much data that has been collected is text based but with more and more visual social networks coming there is a need to expand tools
-images are still nascent but growing
-can track context of how products are being used
-compliance around trademarks is another good example
-it is one thing to collect the data but then you need to act on it
-also more tools coming for tracking the kind of social content that companies should be amplifying
-creating compelling content is becoming a bigger part of social media now (more and more like broadcasters)
-there are a ton of different social networks out there with over 100M MAUs – wow!
-talking about expansion of relationships with Twitter and others to get even more data
-brands are going to be learning and refining especially as the tools continue to improve
-social will continue to shift decision making and will likely see more suites of solutions than one off tools
-starting to see more use of social data inside business intelligence applications (e.g. Tableau)

Voices of Vegas – Carolyn Goodman (Mayer of Las Vegas) and Oscar Goodman (former mayor)

-downtown was a vintage Las Vegas and the perception became the reality as no new casinos were built down here
-vowed that it would not become like other inner cities so set out to revitalize it
-the city started moving and acquiring land bringing in Cleveland Clinic showcasing to private sector that they could invest
-2.1M people live in Las Vegas now
-proud of Tony and the team from Zappos that are bringing technology here
-implemented film tax credits to create incentives
-next week they are set to bring Major League Soccer to Las Vegas
-community college and UNLV both have downtown presence now.  One in an old elementary school and another in city hall
-sounds eerily like what is happening in Kitchener-Waterloo right now
-cited lower taxes (no personal income tax, no corporate tax, etc) so this is the place to have headquarters
-wonderful weather too

The Story of Why: The Art of Branding – Michael Dubin

-dollar shave club
-we live in a world of bewildering distractions
-first, you should solve a problem for someone and earn their trust
-insert yourself into a conversation that people are already having with each other
-be refreshing when inserting yourself into the conversation and be authentic
-keep your promises.  Make them and then nail the promises.
-offer great customer service.  Re-enforce trust by offering amazing service.
-go beyond amazing customer service whenever possible
-when you have the trust of your customer you can extend that into new areas.  They take your word for stuff.
-earns you loyalists and champions who will fight on your behalf when things go wrong
-word of mouth is amazing
-cult following is the most coveted access in retail
-600K active users and net promoter score of 72

Living to be 200 – Walter de Brouwer, Ron Gutman, Mike Lee, and Christina Farr

-healthcare is one of the biggest parts of our lives
-it is one of the most motivating areas to work on because of the impact you can have on other people
-getting people to change their behaviour is incredibly hard but very rewarding
-Scanadu trying to change the one to one relationship with their doctor.  Can we have that with a transaction where many have access to quality healthcare and how that will change everything
-re-write the map of medicine
-people don’t expect to get immediate gratification in health and that is one of the biggest pieces that is missing
-this is just the first phase of a long journey as you start measuring things to change behaviour
-the relationship with the doctor will change such that people will do their own triage, bring their own context and jumpstart the discussions
-it enables the doctor to provide a different point of view but also now people can talk about their own healthcare

Roundtable – Building Sustainable Engineering Culture – Ross Hale (Pivotal Labs)

Hiring
-always look for people (active vs. Passive)
-define your interview and why you do it
-three step interview – hour long practical test looking for inherent ability that is tech agnostic. Assume they can turn people into full stack developers. Building a set and is a simple problem. Doing it in an incremental test driven way to see if people can pick up on that. Check for communication skills, high empathy, focus, etc. Assign them a numerical skill. The entire process is scripted and good people will follow the same path. Programming not abstract whiteboard work. 10 percent make it. Using universities as a basic filter (Berkeley, Waterloo, etc). Look for language in the cover letter to ensure they have good grammar. Also create a list of schools they won’t hire from. They will also take self taught people based on industry experience. Won’t hire people without experience.
-Step 2 – bring them in for 1-2 days and don’t pay them. People take a day off and see what they can do. Pair programming at Pivotal which enables them to really get good on the job feedback. Developers feel like they get to select their teammates. Success rate 25 to 50 percent. Try before you buy. How do you deal with people who don’t know the tools/tech? Because of the pairing you can usually help and provide value as part of that pair. Also good to put them on problems they haven’t seen before. Sometimes have people sign NDA depending on the client.
-Step 3 – give them a provisional offer with conditions around the offer. Probation period for ramping up. If not they would cut them loose. They made them contractors for 6 weeks so it was easy to sever the relationship. Stopped doing it now they are larger because of tax and other complications.

All of the rules are flexible. Don’t turn down good talent for stupid reasons. Use internal referrals once you get your initial developers in place. Referrals have been better than walk in candidates.

Sustaining
-try to make the culture bottom up by allowing the devs to really have a say
-you cannot have management push top down changes around how to define the culture
-most people work 9-6
-don’t let people work from home as the current technology doesn’t match the same thing as having that person beside you. This may be a function of pair programming too.
-remote works but isn’t as productive.
-but Ross indicating it is the communication overhead to quickly solve problems and not just with the paired person
-really hard to build a culture when people are remote. By working 9-6 they are focused on building a sustainable pace.
-great benefits of being around people who are productive
-also found that when people work hard in the office they don’t need to put in nearly as many hours
-great to be able to share successes but just also share who you are and learn about them on a personal level
-most research happens outside of work on new tools, languages, frameworks, etc because of the sustainable pace. Most developers have side projects as a way to practice new pieces.
-they try to enforce an end time (not a bell ringing lol) but they do try socially to encourage people to shut down
-many stay after 6pm to drink beer, play some ping pong and share stories. Many insights come from this off time.
-also trying to reduce or avoid information silos

Leaving
-most common reason that people leave is to go to a startup
-they try very hard to be supportive of employees when they want to leave. Don’t leave it on bad terms and say they can come back. Only exception is if they are going to a client.
-good discussion about engineers aren’t motivated by money. Agreed but they use it as a proxy for their value. Or money being used to remove living costs as a distraction
-super fast on firing where they suggest people quit and offer to find them a job elsewhere. A common mistake is that people have an emotional investment in people who shouldn’t be there anymore. When it happens the employee tends to be happier too.
-how do you manage accountability?
-rely on peer feedback as the biggest mechanism to detect poor performance
-suggesting better for people to quit and help them than firing because of the legal risks
-you must have only the best people if you want to maintain a culture of excellence
-after 10 people they break down into separate teams and fracture the code base so they each have control
-still figuring out how to effectively scope the project and the pre-development work. Going from napkin to dev.

Roundtable – Hardware doesn’t have to be hard – Jen McCabe (Vegas Tech Fund)

-hardware design and software
-manufacturing in limited numbers
-sales and distribution
-supply chain management
-great service

-founders are usually more scared of manufacturing than anything else but sales and distribution are the scarier ones
BOM to MSRP should 3-5x and ideally up to 8
BOM to COGS ratio is important if going to retail
-running a hardware company is a lot like a small business where you need to have a ton of skills on many levels
-heavy investor load on hardware investors to help on the detailed operations elements because the founders don’t have the experience
-primarily looking for founders who are willing to listen
-build out a product development schedule and then it becomes your roadmap/bible to guide all of your decisions
-keep a “now” focus for the things that are part of the next ship goal
-role responsibility is very important inside hardware startups to ensure that the right skills are being used in the right places
-really need to get used to ruthless prioritizing
-hardware startups take longer and more money so you need to ensure that the founders can keep people long enough to win
-1-2M seed is her suggestion. Red flag is not raising enough money and that 200K isn’t going to do it.
-start to think about how many units you have to sell in 3 years to replace that money. Think about revenue generation from the beginning. Jump into digital prototyping rather than physical prototyping it.
-cynical realistic optimists are the right kind of founder stage especially when as a team.
-really want to see solid sales people in place who can move product.
-seeing a lot of companies who provide utility hardware that is revolutionizing industries inside larger companies with mixed success
-all of this is so new and we are just starting to see companies come to scale now under the new world
-lots of mergers and acquisitions coming in the space as big companies struggle to adapt
-MakerBot was able to raise based on sales oriented charismatic founders.
-investors share the same fear that you need that person on your team. Everyone is your customer or stakeholder who you need help from.
-areas to spend in hardware companies is people
-PR agency is a good spend but fixed engagement timeframe and ensure they are already in the hardware space
-you shouldn’t have trouble reaching out to people because it is a small community right now. Product hackers and process hackers. It doesn’t take flattery to spew it all.
-marketing is worth money.
-dig in the interviews for additional skills and how you might be able to use that
-clothing and food brands provide good examples of how you can sell and distribute their products. Learn from the best and the models from other industries.
-you cannot divorce the brand from the person for years and so the founders will be important to watch with close detail. Does that person have style and will it carry through to the product?
-marketing and communication channel plans – in-person, online (social and email), print and trade, and some mobile presence.


No Replies to "Collision Conference - Day 2"


    Got something to say?

    Some html is OK