In a nutshell, there is nothing more accurate than this stanza (link starts at 3:22):
“Woahhh, we’re half way there,
WAAA-AAA, livin’ on a prayer!
Take my hand, we’ll make I swear…
WAAAAA-AAA, livin’ on a prayer!”
I think this was originally a love song but the risk-taking, the reassurance, the weird culture, the passion in startup recruiting speeches is all there.
I’m lucky enough to have been raised in a first-world country that subscribes to a free-enterprise model. Therefore with a perfect alignment of opportunity, hard work, and an insane amount of luck, I can make a lot of money so that I can spend it on my own F1 car and private racing league. In light of this opportunity, I’m always quick to tell people looking for job advice, usually those fresh out of college with a useless degree, that there are a “million ways to make a million dollars”.
The idea behind this aphorism is that you don’t need to subscribe to a narrow subset of careers or jobs in order to make a lot of money. Even discounting all the shady options available to you, there are truly a lot of ways to make a very good living, as evidenced by the 8.4 million Millionaire Households in America. In the context of this being a startup blog, I extrapolate this in the startup world as: Forget chasing the millions and work on something you’ll love working on.
This is NOT a proxy for “forget the business plan” though (I talk about why business plans are important here). Any valuable, sustainable, long-term focused business will make significant revenue – but getting to that point is the hard part. I believe if you’re a gifted entrepreneur that can build a great team that can build a promising product or service, you will make a lot of money. My only evidence for this is based on the fact that VCs like Mark Suster will invest primarily on the team that’s founding the startup, and not the idea (source: see first line of “The Team” here).
If that’s the case, the team only helps itself by working on something they inherently want to work on. As Paul Graham puts it, “What do you wish someone would make for you?”. The startup grind will be tough, and depending on your business model, it may take years before you see the fruits of your labor. You increase the chance of burnout if you’re not working on something you’re excited about.
So some people work passionately to solve problems that exist for them – see Mint.com. Some startups are an extension of their founders’ ideologies – see Airbnb.com (local hospitality) and Square.com (Jack’s idea of simplifying and beautifying). And of course, some people simply want to make the world a better place – see any non-profit organization.
My startup is in digital signage, which you can think of as digital billboards (replacing inefficient paper counterparts). There’s nothing inherently sexy about digital signage, and I wasn’t born when the planets aligned to spell out “digital signage” or anything. My passion for digital signage is in proliferating my own vision of the future. Something Minority Report-esque. Digital billboards everywhere. User interactivity and beautiful, not sleazy, ads. Ads and information genuinely beneficial to individual viewers. Maybe one day, interactive holograms!
These are ideas born out of my inner geek, an imagination no doubt shaped by a childhood immersed in reading and watching Sci-Fi. These ideas are an extension of my persona, so of course I’ve set out to build my vision of the future with tremendous glee. This makes me absolutely ecstatic - I highly doubt I would’ve had as much fun building Zappedy (I picked this example because it was the first startup acquisition article I could find on TechCrunch), simply because I don’t really have any interest or preference in the space of building a merchant CRM (Congrats to the Zappedy team though!).
Unfortunately not every awesome startup meets its exit goals (Goodbye, Sprouter), but the ones that do range very widely in the tech they’ve built and the niches they target. There will always be flavor-of-the-month spaces, but you don’t have to restrict yourself to those only. Build some great tech for a company you genuinely enjoy building, and it’ll be extremely fulfilling. I can say this even as a new startupper because I spent the few years prior to my startup playing Poker and I hated every minute of it. I’ve taken huge financial risks ever since quitting my only source of income in order to start my startup, but it’s been enjoyable and fulfilling starting from day 1.
I’ve always imagined the source of my entrepreneurial ambitions stemmed from a mixture of fancy things like wanting to build a legacy, disdain for systematic rules, and really wanting an Audi R8. All joking aside, I’m not sure if something like entrepreneurship can be passed down through genes but I wouldn’t be surprised if somehow my desire to start and build something for myself and my family came from my Grandfather.
In the mid-20th century, my grandfather, or ye-ye (爺爺), traveled from North-east China to Hong Kong (in the very south of China) to escape the Mao Ze Dong-led purges under the new Communist government. His family had been killed off and their land had been taken, which was the case for millions of Chinese at the time.
He began a family in Hong Kong as a teacher and writer, mainly for Anti-Communist publications. At 40 years old, he traveled to the US alone to make money for his family of 4 children (including my Dad), and when the money found its way, had the entire family move over to Santa Barbara, California with him. He started a Chinese restaurant, which was tended to by all members of the family.
As an academic with high-profile Anti-Communist writings, It was easy to acquire a green card, and he was also offered entry into Master’s programs from UC Berkeley and Stanford. At 40 with a family, he decided to turn it down, deciding instead to tend to his restaurant for 6 and a half years, which was enough time and money to put my dad, uncle, and aunts through college.
I talked to him about my startup, Enplug. He had these 3 lessons for me:
My grandparents worry about me a lot and I spend a lot of time communicating to them that, contrary to what they believe, I’m eating and living well. They told me that they also worry for my financial endeavors, but that at the end of the day it’s the experience that really counts, even if it’s failure. To hear this come from an Asian parent, much less a grandparent, is astounding as Asian parents are known for their strict teaching regimen and adherence to low-variance routes to success (in my case growing up, it was becoming a doctor).
This sounds incredibly obvious to anyone in the least bit acclimated with Silicon Valley core values but this is largely oblivious to 99% of the world. He remarked that it’s only Americans that see things this way, and added that only in America could Bill Gates start from a garage and become the multi-billionaire he is today. There’s a lot of truth to this – there are still a lot of countries in the world that inherently discourage entrepreneurship simply because failure is intolerable.
I mentioned that I feel very fulfilled working on my startup, that I had already learned a lot more this year than the years I’d spent at UC Irvine. My grandfather remarked, “Of course, in school, it’s just books. In business you interact with so many different people, all with their own ideas and opinions.” These interactions are more important to your real-world education than what can be taught at school. Again, not only is this earth-shattering coming from my own lineage, but I was giddy given my own polarizing criticisms of college education.
Indeed, working on a startup is human interaction. From learning from others, to building products for people, selling to real people, and working with other people, these are all interactions that one must carefully observe and act upon accordingly in order to succeed.
Starting life in the US was notably hard for someone who only spoke Chinese, not to mention supporting a wife and four kids. The restaurant wasn’t single-handedly adequate, the kids had to work part-time as well. Since having steady revenue was so vital, he believed that as long as you have two hands you should be able to do anything (this sounded a lot better and poetic in Chinese). He said if the restaurant ever failed, he could at least do things like garden work (which he is quite good at) for money if it came down to it. The underlying motive was that you should try to be competent in as many things as possible, so that you can always do something.
He noted that these days, it’s not so much having two hands but really having a brain (once again, this was also a lot more poetic in its native form). I noted in my previous blog post that although I’m not particularly specialized in a single skillset, I have a pretty good abilities across-the-board. In fact, in at least our startup we even prefer hiring those who have broad skillsets. Having someone do 5 things on a B-level instead of having 5 people do 1 thing each on an A-level sounds poor but is actually the leanest way to start up.
My grandparents in Copenhagen, 2010There’s a great thread on Quora that asks who the greatest hustler in history is. The general theme among the people listed is that they built something tremendous out of nothing. From having endured what was undoubtedly unworldly amounts of grief at the hands of Communist massacres, to building something from nothing in Hong Kong, to doing it again in the US, my grandfather easily ranks as the world’s most inspirational hustler to me. To even acquire a fraction of his success and happiness in my life would be enough to make me a fulfilled human being.
Half a year into working on my first startup. We haven’t launched yet, despite plans to do so in March, then April, hopefully May, probably June, but July certainly, and now likely August. I think it’s like a grand spiral staircase – a lot of excitement seeing it and running up the first few floors, but you overestimate your stamina and the inevitable slowdown leaves you confused and tired. The good news is by this point, you’re almost there, which gives you one last stride…
The beginning already seems so far away (Credit)I’ve been fortunate enough to work with an extremely smart and talented team while working on Enplug, a digital signage startup aiming to revolutionize local advertising. It hasn’t been long but working on a startup has been one of the most fulfilling and educational experiences of my life. Here are some revelations I’ve made over the past year:
While people occasionally need deadlines to give their work structure and to ensure on-pace productivity, it’s been our experience that deadlines and time-frames in general have only served to lower morale by virtue of what author/theorist David Sklansky calls “The Acceleration Effect” (book excerpt link). The gist of the acceleration effect is that the way our minds process expectations and results has an impact on our moods when they are not met (for good or bad). So when big deadlines aren’t met, and they constantly aren’t, there’s a cascading effect of moods being shattered, schedules and timelines being affected, and money and time lost.
The problem with deadlines is that they’re arbitrary and not often based on adequate foresight. Small projects aside, for things like our launch, it was easy to underestimate the amount of technical work that was involved, so we unknowingly set very optimistic deadlines and each delay only served to hinder performance and morale. It’s quite silly because if we decided to use an exaggerated, conservative deadline, morale wouldn’t be low and surely we’d complete our objectives on time.
We’ll launch as soon as we can regardless of whatever arbitrary deadline we’d impose. Deadlines are inherently prone to mistakes, and I don’t feel the trade-off is worth it for bigger projects. Jason Freid in Rework suggests breaking up bigger projects into smaller ones, whose timeframes are more manageable. Likely very good advice, but we didn’t have complete foresight of what it took to get a MVP to launch for our specific service, so it would’ve been impossible to do that anyway.
This seems obvious but it took some time to seriously apply. Enplug started with two non-technical co-founders, my partner David and I. We had a lot of overlapping skill-sets, which was a little bit awkward as we need to figure out our responsibilities not just in the short-term but in the long-term.
As we began to understand the scope of Enplug a lot better, and after working with each other for quite a bit, we’ve found our own roles. David is the CEO and leader, and is an incredibly smart person with the traits of a product visionary. As COO, I don’t have specific specializations but I carry a broad understanding over many fields. I work on marketing/public relations, building the company internally, recruiting, and bring industry and domain knowledge to the company. I’m no Jack Dorsey, but I’d be fulfilled if I could even be a fraction of a Keith Rabois.
When you play to your strengths, there’s an added implied benefit that you work on what you actually want to work on. If that’s the case, then your work is a lot more effective as well.
Enplug isn’t a lean software startup, we have quite a few important channels and work on a lot of proprietary development in a nascent industry (digital signage). We grew from a core team of 4 to over a dozen really quickly (pre-launch and pre-revenue), and communication between different groups can be hard. Moreover, communication is key because it creates a sense of accountability. Being at the forefront of this required that I become a better manager for my team, especially as not everyone can work optimally in a flat-organization structure and does need occasional guidance.
It’s been hard for us to be truly lean because we have to deal with a lot of hardware, service providers, and personnel. Our original expense estimates have been half as the reality, which doesn’t necessarily make our business plan any worse, but we certainly weren’t prepared. If not just the capital expenses, but the aspect of actually making sure the people who have sacrificed much to join your vision are compensated as well. Just some poor foresight on our part.
Generally we were too aggressive (while believing we were actually conservative) with our estimates. In other words, our estimates were way off. The ramifications of this include loss of money and time, as well as morale. It’s been a bit tiring making it up these stairs after a huge burst of energy starting off, but we can finally see the end where we actually launch our service we’ve worked so diligently on. I imagine that then, an even greater and longer spiral staircase begins.
For 6 months our team worked without an office, abusing online workflow services and the corner table at “L&L Hawaiian BBQ”. We finally started using real office space in May, and despite launch delays on the surface, productivity surged internally.
The catalyst for change was the hiring of a couple new software developer interns. The Enplug team grew from just the original founding team, and we actually became responsible for others. Despite our start-up expenses being pretty high – though relative to the industry and our competitors I posit it’s rather low – we were always quite picky about luxuries like office space. So we started out borrowing space on Saturdays from a friend’s startup office, meeting just once a week in a rigid, quiet environment. I was impressed – I had already gotten used to working at home and occasionally, in pizza parlors and Hawaiian BBQ restaurants when I had to collaborate with the team.
Even I figured this benefit would be obvious, but it’s worth noting that prior to Enplug, my past occupation meant that I needed to sit down at a computer and be distraction-free for hours on end. Even if there were others around me, as long as I could remove distractions with a pair of headphones and had a consistent internet connection, I was good to go and the setting didn’t matter. When you have to actively collaborate with others, the setting matters tremendously. Most entrepreneurs already know how important laser-focus is in productivity, and most achieve it, but the office environment amplifies it.
I put in around 6-10 hours of work at each office day. While that isn’t all work (finding food is a huge productivity killer), it’s easy to get lost in Facebook, Twitter, YouTube, et al. at home. It’s easier to hold myself accountable in an office because I’d feel awful if a colleague consistently saw me browsing TechCrunch all day while they were putting in real productivity.
Since we deal with hardware troubleshooting as part of our launch, a designated office space provides an adequate test environment than the limited space of “my CTO’s bedroom”. In hindsight, this stage of our testing would’ve taken huge hits in efficiency if we didn’t have a centralized location storing most of our hardware. The office allows for anyone dealing with the hardware project to pop in and diagnose problems. The alternative would’ve been independent testing at several locations and slow software patching between hardware.
I’m an introvert and a huge tech geek, yet I still can’t get the hang of meaningful collaboration without a face-to-face meeting. Sometimes a meeting isn’t feasible and then Skype is a god-send, but maybe it’s because I’m more of a visual thinker but I need a real notepad and a pen to write down notes and plans. To assess current problems or new ideas I need to be able to see the person I’m talking to clearly, and be able to hear what they’re saying without blips. It helps me “read” them so I can understand what they’re thinking better, which in turn helps my decision making.
I certainly believe I get more out of real meetings than online conference calls. The opposite does work though, as Jason Fried of 37signals.com wrote in Rework that he had employees spread over 8 cities in 2 continents. Jason Fried also thought meetings were counter-productive. The gist I got from Rework was that companies shouldn’t emulate and should be pragmatic – for me real meetings and not conference calls are pragmatic. Getting an office too, was pragmatic for us.
Although tech bubble 2.0 lurks in the shadows of Silicon Valley, we didn’t buy fancy office space and thousand-dollar Aerons. We got a 2nd-story 400-sq. ft space that had 1 main room and 1 small cube-sized room. We pay $450/month on the border of Irvine, CA, and pay for electricity as well. Here’s a list of our other main expenses, although there’s also a good guide on saving from inc.com.
The fabled garage is endearing. To say that you built the next billion-dollar, darling-of-SV from just a garage would be endearing. But building a company like that while living on a diet of only ramen and crackers would be too. At some point you need to be pragmatic, if not for the obvious benefits, then for the sake of those you convinced to join you on your dream.
Kevin Ko is a startup entrepreneur and former professional poker player. He is a co-founder of Enplug, a digital signage startup that's changing local advertising. This blog is primarily about his startup journey and ramblings. Read more about Kevin
© 2011 Kevin Ko. All Rights Reserved.
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