Book: Crazy is a Compliment

If you are in Boulder and you haven’t heard of Linda Rottenberg, you are in for a treat. She’s the founder / CEO of Endeavor and recently joined the board of Zayo. Dan Caruso, the CEO / co-founder of Zayo is hosting an event tonight at eTown Hall interviewing Linda about her new book Crazy is a Compliment.

I read the book last night. After a long Monday, I realized I had three physical copies on my desk at home (that had come from different friends) and I still hadn’t read it. That didn’t seem right, especially since I’m having dinner with Linda, Dan, and a small group of people tonight. So I gobbled it up last night.

Before I get into the book, there are still a few seats available for the event tonight. If you are into entrepreneurship, I highly recommend you attend the fireside chat between Linda and Dan from 5pm to 7pm (Tuesday, 1/13/15).

I’ve known of Linda for a while through her work at Endeavor and finally met her for the first time in March 2013 in Rio while I was at the Global Entrepreneurship Congress. Among other things, she roped me into giving a Day1 talk, which was extremely fun to do. If you’ve never seen mine, it’s below.

Ok – on to the book. It’s dynamite. Like my upcoming book Startup Opportunities (which you can pre-order now – hint, hint), it’s aimed at first time and aspiring entrepreneurs. Linda is an amazing storyteller and builds the book around stories from her own experience as well as many of the entrepreneurs who have been affiliated with Endeavor programs. Her stories are all in first person and powerful to read – very personal, easily consumed, and full of lessons.

She weaves the stories into three major sections: Get Going, Go Big, and Go Home. Get Going is about getting started. Go Big is about scaling. Go Home is about getting harmony between work and life.

Linda breaks entrepreneurial companies into four categories:

  • Gazelles: super high growth (I use the same word in Startup Opportunities)
  • Skunks: inside corporations – what is tediously referred to in academia as intrapreneurship
  • Dolphins: social entrepreneurship
  • Butterflies: small, local businesses

I loved her taxonomy and will use it going forward. Then, on page 90, I did something I rarely do when reading a hardcover book – I dogeared the page so I’d come back to it. On this page Linda defined four types of entrepreneurs using labels I’d never seen before.

  • Diamond: Visionary dreamers leading disruptive ventures (Mark Zuckerberg, Sergey Brin / Larry Page, Ted Turner, George Lucas, Elon Musk)
  • Star: Charismatic individuals building personality brands (Oprah Winfrey, Martha Stewart, Richard Branson, Estee Lauder, Giorgio Armani, Jay-Z)
  • Transformer: Change makers reenergizing traditional industries (Howard Schultz, Ray Kroc. Ingvar Kamprad, Anita Roddick, Blake Mycoskie)
  • Rocketship: Analytical thinkers making strategic improvements (Jeff Bezos, Bill Gates, Fred Smith, Michael Dell, Mike Bloomberg)

This categorization totally nailed it and she went on to spend a lot of time discussing different entrepreneurial personalities. Throughout, Linda used examples from all over the world, drawing from the broad range that Endeavor has covered over the 17 years it has been around.

As someone who has spent the last six months immersed in writing a book aimed at first time and aspiring entrepreneurs, it’s pretty cool read one from a totally different experience set, with so many different stories, and feel lots of conceptual overlap. If I’m describing you when you see the phrase “first time or aspiring entrepreneur”, grab Crazy is a Compliment and pre-order Startup Opportunities. And, if you are in Boulder tonight, come check out the fireside chat.

 

Hollywood’s Massive Miss on Strong AI

Strong AI has been on my mind a lot lately. We use weak AI all the time and the difference between then two has become more apparent as the limitations, in a particular context, of an application of weak AI (such as Siri) becomes painfully apparent in daily use.

When I was a student at MIT in the 1980s, computer science and artificial intelligence were front and center. Marvin Minsky and Seymour Papert were the gods of MIT LCS and just looking at what happened in 1983, 1984, and 1985 at what is now CSAIL (what used to be LCS/AI) will blow your mind. The MIT Media Lab was created at the same time – opening in 1985 – and there was a revolution at MIT around AI and computer science. I did a UROP in Seymour Papert’s lab my freshman year (creating Logo on the Coleco Adam) and took 6.001 before deciding to do Course 15 and write commercial software part-time while I was in school. So while I didn’t study at LCS or the Media Lab, I was deeply influenced by what was going on around me.

Since then, I’ve always been fascinated with the notion of strong AI and the concept of the singularity. I put myself in the curious observer category rather than the active creator category, although a number of the companies I’ve invested in touch on aspects of strong AI while incorporating much weak AI (which many VCs are currently calling machine learning) into what they do. And, several of the CEOs I work with, such as John Underkoffler of Oblong, have long histories working with this stuff going back to the mid-1980s through late 1990s at MIT.

When I ask people what the iconic Hollywood technology film about the future of computing is, the most common answer I get is Minority Report. This is no surprise to me as it’s the one I name. If you are familiar with Oblong, you probably can make the link quickly to the idea that John Underkoffler was the science and tech advisor to Spielberg on Minority Report. Ok – got it – MIT roots in Minority Report – that makes sense. And it’s pretty amazing for something done in 2002, which was adapted from something Philip K. Dick wrote in 1956.

Now, fast forward to 2014. I watched three movies in the last year purportedly about strong AI. The most recent was Her, which Amy, Jenny Lawton, and I watched over the weekend, although we had to do it in two nights because we were painfully bored after about 45 minutes. The other two were Transcendence and Lucy.

All three massively disappointment me. Her was rated the highest and my friends seemed to like it more, but I found the portrayal of the future, in which strong AI is called OS 1, to be pedantic. Samantha (Her) had an awesome voice (Scarlett Johansson) but the movie was basically a male-fantasy of a female strong AI. Lucy was much worse – once again Scarlett Johansson shows up, this time as another male fantasy as she goes from human to super-human to strong AI embodied in a sexy body to black goo that takes over, well, everything. And in Transcendence, Johnny Depp plays the sexy strong character that saves the femme fatale love interest after dying and uploading his consciousness, which then evolves into a nefarious all-knowing thing that the humans have to stop – with a virus.

It’s all just a total miss in contrast to Minority Report. As I was muttering with frustration to Amy about Her, I wondered what the three movies were based on. In trolling around, they appear to be screenplays rather than adaptations of science fiction stories. When I think back to Philip K. Dick in 1956 to John Underkoffler in 2000 to Stephen Spielberg in 2002 making a movie about 2054, that lineage makes sense to me. When I think about my favorite near term science fiction writers, including William Hertling and Daniel Suarez, I think about how much better these movies would be if they were adaptations of their books.

The action adventure space opera science fiction theme seems like it’s going to dominate in the next year of Hollywood sci-fi movies, if Interstellar, The Martian (which I’m very looking forward to) and Blackhat are any indication of what is coming. That’s ok because they can be fun, but I really wish someone in Hollywood would work with a great near-term science fiction writer and a great MIT (or Stanford) AI researcher to make the “Minority Report” equivalent for strong AI and the singularity.

Book: Benjamin Franklin: An American Life

Ben Franklin is one of my heroes, along with Albert Einstein, Richard Feynman, and a few others. As I start my march through reading books about American presidents, I figured I’d start with a famous American who was never a president but was deeply involved in creating the situation where there could be American presidents.

I’m a big fan of Walter Isaacson and his biographies (I’ve read many of them.) Benjamin Franklin: An American Life didn’t disappoint. Isaacson is great at making a biography flow easily so it reads like a cross between a novel and a non-fiction book. The stories aren’t embellished, but they are well written, generally efficient, and extensive. If you are worried about biography as “facts and figures over time”, that’s not the mark of a good biography and definitely not Isaacson’s approach.

Being a fan of Ben Franklin, I’ve read plenty, especially as a teenager, about him. I had a healthy list of “Ben Franklin firsts” and things that Franklin was involved in. But as Amy and I watched the HBO Series John Adams recently, I became curious about how much, or how little, about Ben Franklin I really knew.

It turned out to be “how little”, not because I didn’t know much, but because the list of things Ben Franklin created, did first as a human, or enabled in America, is just remarkable. While everyone knows about his role in the American Revolution, American postmaster, printer, experiments with lightening, and invention of bifocals and the Franklin stove, here are a few that are not commonly known.

Ben Franklin:

  • was an amazing swimmer and created swimming fins (well – wooden ones)
  • created the first volunteer fire department
  • created the odometer
  • created the urinary catheter
  • loved to travel and was extremely nomadic between America, France, and England
  • created the first American musical instrument (the glass armonica)
  • created all the electric terminology, such as battery, charged, condense, conductor, plus / minus, positively / negatively, to go along with his experiments
  • helped create the first American hospital

and the list goes on and on and on.

The early Franklin was well-known for the virtues he stated and then worked on personally, not all at once, but systematically over time. When I reflect on them, I find them remarkably contemporary.

  • “Temperance. Eat not to dullness; drink not to elevation.”
  • “Silence. Speak not but what may benefit others or yourself; avoid trifling conversation.”
  • “Order. Let all your things have their places; let each part of your business have its time.”
  • “Resolution. Resolve to perform what you ought; perform without fail what you resolve.”
  • “Frugality. Make no expense but to do good to others or yourself; i.e., waste nothing.”
  • “Industry. Lose no time; be always employ’d in something useful; cut off all unnecessary actions.”
  • “Sincerity. Use no hurtful deceit; think innocently and justly, and, if you speak, speak accordingly.”
  • “Justice. Wrong none by doing injuries, or omitting the benefits that are your duty.”
  • “Moderation. Avoid extremes; forbear resenting injuries so much as you think they deserve.”
  • “Cleanliness. Tolerate no uncleanliness in body, cloaths, or habitation.”
  • “Tranquility. Be not disturbed at trifles, or at accidents common or unavoidable.”
  • “Chastity. Rarely use venery but for health or offspring, never to dullness, weakness, or the injury of your own or another’s peace or reputation.”
  • “Humility. Imitate Jesus and Socrates.

His personal life was fascinating, complex, and non-traditional. It evolved over his life time and while it doesn’t parallel mine in any way, Isaacson’s portrayal of it is robust, although there are points in time in the book where I felt Isaacson let Franklin off the hook for things that weren’t “awesome” and could have been dug into further. But, after all, we are all bags of chemicals and have lots of flaws.

His skills as a politician and negotiator were just awesome. His ability to stay calm in intense situations was awe inspiring. I knew plenty of the specific situations, but seeing Franklin’s role in them from the perspective of a biographer of Franklin was mindblowingly interesting and educational.

I’ll leave you with a few famous Franklin quotes that we repeat or hear regularly.

  • In this world nothing can be said to be certain, except death and taxes.
  • Early to bed, and early to rise, makes a man healthy, wealthy, and wise.
  • An investment in knowledge always pays the best interest.
  • Be slow in choosing a friend, slower in changing.
  • Content makes poor men rich; discontentment makes rich men poor.
  • Wine is constant proof that God loves us and loves to see us happy.
  • They who can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.

The Great Coding School Rollup of 2015

I just saw my first proposal for a Coding School Rollup. As you are probably aware, 2014 saw the explosion of coding schools all over the US. These are typically four to 12 week programs. Some are full-time, others are part-time. Many are immersive and include internships. A few are longer than 12 weeks.

I know several people who have gone through the with great success and gone on to have excellent software development jobs. It’s a powerful model that university education has generally missed on. In fact, I know a few companies that put computer science grads through these types of programs as an on boarding process. I’m a big fan of coding schools.

When I saw the proposal, I immediately thought of the web consulting rollups of 1999. Do you remember US Web, iXL, Scient, and Viant? Companies were being bought (and valued) at 10x forward revenue only to be valued at between 0.5x and 1.0x revenue several years later. I’d argue the 0.5x and 1.0x revenue were the correct valuations since these are generally 5% to 10% net income businesses that are 30% – 40% gross margin and heavily dependent on (a) transitory labor and (b) favorable supply/demand conditions.

But let’s go back a little further in time. Anyone remember the web hosting rollup? Or the ASP rollup? I was in the middle of that with Interliant (I was a co-founder) – we bought 20+ companies, at one point has an almost $3 billion market cap (on $200 million of revenue – recognize the multiple), but went bankrupt in 2002. A few companies got bought before the whole Internet-bubble thing fell apart, and we almost managed to get bought (for around $500 million, but that’s another story for another day.)

Or the ISP rollup before that? Yeah – Verio was the big winner there (and they overlapped with the web hosting rollup since they evolved into that) and their timing was epic being bought by NTT for $5 billion in cash just before everything blew up. I will forever be in awe of the exit execution and timing there by the board and investors (some of whom are friends.)

Or the systems integration rollup of the 1990s. I was involved in that also. My first company, Feld Technologies, was bought by AmeriData, which bought 40 companies in three years. We were bought for a more reasonable 1x revenue (and about 4x pre-tax income) when the value of the AmeriData stock, options, and cash we took out were factored in. GE Capital bought AmeriData for $500 million two years after Feld Technologies was acquired, so that was a great exit, but there were plenty of other system integration rollups that ended up in the dust bin.

Office supply consolidation? Anyone remember that one? I wasn’t involved but some of the players ended up in the systems integration rollup game.

My good friend Phil Weiser often says to me “history doesn’t repeat itself, but it does rhyme” which I always thought was a Mark Twain quote but apparently there’s some confusion about that in the world of Wikiquotes.

In this case, Coding School Rollup definitely rhymes with all the rest. And for those clever entrepreneurs and investors who try to use the word “consolidation” instead of “rollup”, don’t bother, we already tried that. Consolidation and rollup rhyme also (well – actually they are synonyms.)

If You Want A Response, Ask Specific Questions

I try to respond to all of my emails. I’ve always been like this – it’s just part of my value system. I used to be annoyed by other people who don’t, but I let go of that emotion a long time ago. But I still try to respond to all of my emails. A big hint, which is the reason for this post, is to ask specific questions if you want a real response.

Part of my morning drill is to systematically go through all the emails from the previous night. I usually end up at close to – or at – inbox zero when I finish this drill. Over the course of the week I get a little behind on non-urgent stuff so I end up responding to them over the weekend.

The result is a lot of what I like to call cliche loops. Here’s an example of the “will you look at our business, no, will you make a referral” loop.

Cliche Loop

Fortunately I use Yesware so I can respond quickly via templates I’ve already set up. Here’s how the more detailed conversation goes:

Entrepreneur: Happy New Year!  Attached is the our BP. Please let me know if you are interested to talk.

Me: Thx for reaching out again. I took a look – I don’t think it’s something we’d be into investing in but hope to run into you at anonymous-place at some point.

Entrepreneur: Thanks for the quick reply. Can we apply for the techstars?

Me: Of course!

Entrepreneur: Thanks for the advice. If you are willing, can you please comment on our BP? We wish you can be our advisor.

Me: I can’t be “an advisor” in any formal way. I’m also not part of the selection process for Techstars so I encourage you to just apply.

Entrepreneur: Thanks. We understand. You turned down our BP almost right away. So we are really appreciated if you can tell us what we can improve, or whats wrong there.

Me: I wrote a post about saying no in 60 seconds a while ago – http://www.feld.com/archives/2009/06/say-no-in-less-than-60-seconds.html. Your overview is ok – just not something I’m into.

Entrepreneur: Thanks for the detailed message. Do you have any other investors that you can point us to?

Me: Re: Asking for a referral – I wrote a blog about this a while ago – I hope it makes sense. http://www.feld.com/archives/2007/11/dont-ask-for-a-referral-if-i-say-no.html

Now, I’m not try to be an asshole with my responses. I’m just trying to get through one of “yet another email I’m not interested in” and be polite to the sender. If the entrepreneur had asked me any specific questions about his business, I would have tried to answer it or said “sorry – I have no clue” if I have no clue. But all of the questions are of the “please engage more with us” kind. Even the most specific question “So we are really appreciated if you can tell us what we can improve, or whats wrong there.” is painfully generic.

I realize that part of the reason I’m writing the book Startup Opportunities is so that I can point people like this at it. I get between one and five emails like this a day and have for a long time. I’m happy to get them – I just wish I could help more.