CEO Playbook: Follow Your Own Advice

I’m always telling people what to do, maybe that’s why I like being a CEO. But I often find myself hesitating to follow my own advice, especially in social situations.

I was out with a friend of mine and he saw a beautiful woman sitting by herself at the bar. He was afraid to approach her. He thought of a million reasons why it might be a bad idea – she won’t like him, she’s only interested in rich guys, she has a boyfriend, never approach a woman without making eye contact, etc, etc. Fed up, I pushed him into her and they struck up a conversation. She smiles, laughed at something he said, blah blah. A minute later, her boyfriend appears. Not all stories have happy endings. Regardless, my friend came back elated. Just talking to the woman had raised his confidence. The rest of the night he had no problem approaching women. For that night, at least he gave up his negative assumptions.

A week later, I’m boarding a bus behind a really beautiful girl. Guys up and down the entire block had been watching her as she waited for the bus. Inside the bus, I end up sitting near enough to her to strike up a conversation. But I don’t. I figure the last thing a girl this stunning wants is to be hit on by some stranger on a bus. So I read my book, instead. Ten minutes later, the bus almost empty, she gets up and approaches the bus driver. She need directions. He asks her name. They flirt. She’s sweet and open and laughs easily. And I think (via Talking Heads), my god what have I done? I just passed up the chance to meet a lovely sweet girl because I assumed she’d be unfriendly. And even worse, I didn’t even follow my own advice.

I hope the bus driver got her number.

Inspired by http://blog.penelopetrunk.com/2007/01/26/doing-what-you-preach/

Market Opportunity: Ebay Stops Trading of Virtual Items

Ebay has decided to stop the sales of virtual items and currency on its site. Why? I assume that it’s a reputational risk issue. From what I’ve gathered following the virtual item trading world, sellers are not a particularly reputable bunch, leaving buyers without the goods they purchased.

Clearly, the traffic to other virtual trading platforms, most owned by one company, IGE, is going to increase dramatically. People want to trade items. Let them.

Why don’t MMOs encourage in-world trading? Raph Koster has an interesting post about the game dynamics of MMOs that push developers to dampen item trade. His point is basically that limiting trade of virtual items extends the life of the standard MMO.

I have no idea how many millions that Ebay is sacrificing by stopping virtual item trading, but for a company its size, it’s probably insignificant. Yet, it’s short-term thinking. The virtual item economy is huge and continues to grow. Ebay’s core business is no longer experiencing high-growth levels, you’d think that they would want to grab the opportunity to dominate one of the few auction categories experiencing double-digit growth.

But again, it’s an opportunity for a savvy entepreneur to push out a specialized auction site, figure out the pain points specific to virtual item trading (delivery, trust, questionable legality) and address them.

Article about IGE:

http://www.gamasutra.com/features/20060825/carless_01.shtml

UPDATE: You can still buy and sell Second Life related items. Probably because the founder of Ebay is an investor in Linden Labs, the company behind Second Life.

(via slashdot)

Sacrificing to the Startup Gods

Well, kids, being an entrepreneur isn’t easy. I just made my first sacrifice to the startup gods.

I’ve read a lot of books on entrepreneurship. They all talk about the personal cost of starting your own company. Most of the stuff they talk about, giving up a career, neglecting your kids, losing your life savings, don’t matter much to me. I hated my career. I don’t have kids. And since I don’t like spending money on meaningless objects, I can earn back my savings pretty quickly. I only had one vector for the startup gods to attack: my relationship with my girlfriend.

I moved to San Francisco on Dec.1 to start Tenuki with John. My girlfriend remained in DC to finish school; she has another year and a half, so it wasn’t like she was headed out here any time soon. We have been together over three years and were on the marriage path. We never fight and we’re always happy. It’s an amazing thing.

She broke up with me this morning. She couldn’t handle the long distance thing. I felt it coming. I knew it might happen when I left. But I didn’t think it would.

It did. So if any VC asks me if I have skin in the game, well, I sacrificed the woman I was going to marry on the altar of the startup gods. I hope that’s enough.

Root for me, kids. I really need this.

Why You Need a Good Advisor

Tenuki is still at its formative stage, where big things can come from small moments. John and I pitched friendly to one of our advisory board members in a coffeeshop in the Mission (not Ritual, but good guess). His feedback not only helped crystallized the pitch but actually changed our entire approach to the problem we are trying to solve

When you’re developing a piece of software you’re generally developing it for yourself, or someone very much like you. I think this a problem for a lot of engineers, interfaces that are intuitive to them are nebulous to the average user.

Dan, our advisor, challenged us with this question: how would a blind man use your product?

It’s not a facile question. Everyone lives with a set of assumptions about we interact with the world, and for the most part we assume that others see things as we do. With moral issues, it’s often easy to recognize the perniciousness of our assumed biases as soon as they are challenged by someone else. But for seemingly trivial matters, such as how to interpret a red stoplight, few people stop to consider how much behavioral conditioning affects our reaction.

The blind man question keys into the problem of accessibility. How can we make our service usable by someone who can’t see? But it also encourages us to reconsider the product from a different perspective, a very alien perspective from our own. This is invaluable.

It took me a day or so for the insight to really sink in. Then it hit me in the shower as I was visualizing our pitch to VCs. I suddenly saw the entire demo in my head and how to present it. I called John and he had had a similar revelation a couple hours earlier (he's an early riser, I am decidedly not)

Dan’s insight shifted us away from focusing on a particular embodiment (his words) of our solution, and refocused on the nature of the solution. As a result, we realized that the value of what we had conceived was not where we thought it was and we've refocused on that element. Sorry to be vague, but this early on, you can't let out anything specific.

In any case, the take-away, young entrepreneur: get some good advisors!

Don’t Listen to your Friends, Especially the Smart Ones - the Cleantech Boom

The Cleantech boom has got me a bit depressed. About five years ago, I was all hot and bothered about biodiesel. One of my close friends is transportation policy consultant in DC and he used to tell me all about cars that ran on french fry oil. I smelled opportunity. I read up all about the biodiesel industry. I formulated a business model. I met him for coffee and pitched him the idea hoping that he’d come aboard. The guy knew all the top chemists in the biodiesel field for Christsakes!

He proceeded to give me a hundred good reasons why the idea would never work: too expensive, consumer won’t adopt, lack of infrastructure. All great points. All true.

And yet, over the last six months, biodiesel companies are getting funded left and right. Many of them initially launched five years ago. Maybe my friend is still right, maybe all these companies will fail. But if they don’t they’ll have created a brand new industry, solved a horrible economic problem and made their founders rich.

My point: don’t listen to your friends. The smarter they are, the better the reasons they’ll have why your idea won’t work. If you believe them, you’ll never accomplish anything.