Jason Crawford

Recently I was giving advice to someone who is looking to move to the Bay Area and break into the startup world. He’s looking for a job at a startup here, and his plan is that if he doesn’t find one soon, he’s just going to quit his job and move here anyway while he continues the search.

He asked me whether that would look bad on his resume, to have been out of work for a few months. I told him no, and that in fact, as a hiring manager, I would admire his decision. He has the guts to take a risk by quitting his job in order to take a bold step toward his goals. That’s the right mentality for a startup.

Startups don’t hedge their bets. The very nature of a startup is to take a big risk for a huge reward. The challenge is so great, and the resources so small, that everything you have must be concentrated on a single objective. Startups have one bullet in the chamber, one chance to hit the target. You can’t afford to hold anything in reserve for a backup plan. (And besides, compared to an established, profitable company, you have nothing to lose.)

Part of the founder mentality is being willing, indeed eager, to take on this kind of risk.

Ben Horowitz blogged recently about “peacetime” vs. “wartime” CEOs. As with pretty much everything Ben writes, it’s original, insightful, and well worth reading. He defines his terms this way:

Peacetime in business means those times when a company has a large advantage vs. the competition in its core market, and its market is growing. In times of peace, the company can focus on expanding the market and reinforcing the company’s strengths.

In wartime, a company is fending off an imminent existential threat. Such a threat can come from a wide range of sources including competition, dramatic macro economic change, market change, supply chain change, and so forth.

Reading the post, I was struck by a thought: Startups are born into wartime. Startups do not begin life with a large advantage vs. the competition. They begin with an imminent existential threat: they have no product, no customers, no revenue, and no funding. Even after the first round of funding, first product launch, and first paying customers, most startups are burning cash and face imminent death if they don’t accelerate growth or raise another round. “Peacetime” isn’t the default; it’s a massive achievement.

To drive it home, Ben says:

In peacetime, leaders must maximize and broaden the current opportunity. As a result, peacetime leaders employ techniques to encourage broad-based creativity and contribution across a diverse set of possible objectives. In wartime, by contrast, the company typically has a single bullet in the chamber and must, at all costs, hit the target. The company’s survival in wartime depends upon strict adherence and alignment to the mission.

“A single bullet in the chamber and must, at all costs, hit the target”—yup, that’s startup life.

One lesson I’ve learned is that as much as I admire successful leaders and billion-dollar companies, you can’t get to where they are by imitating the things they’re doing now that they’ve gotten there. As Steve Blank says, a startup is not a scaled-down version of a big company. Startups—and their CEOs—operate in wartime and can’t necessarily imitate the peacetime techniques of the companies they aspire to become.

Couple excerpts from PG’s latest essay:

What super-angels really are is a new form of fast-moving, lightweight VC fund. And those of us in the technology world know what usually happens when something comes along that can be described in terms like that. Usually it’s the replacement.

Paul seems to be agreeing with Matt Cohler on the first point—that super-angels are really micro-VCs. (Mike Maples used to call himself “micro-cap” before he switched to “super-angel”.)

On why super-angels are more sensitive to valuation than VCs:

If you’re hoping to hit the next Google, you shouldn’t care if the valuation is 20 million. But if you’re looking for companies that are going to get bought for 30 million, you care. If you invest at 20 and the company gets bought for 30, you only get 1.5x. You might as well buy Apple.

On signalling risk:

Signalling risk smells like one of those things founders worry about that’s not a real problem. As a rule, the only thing that can kill a good startup is the startup itself.

If this intrigues you, go read the whole thing.

Very excited to announce that my new startup has launched. Presenting Barcode Hero!

The launch has gotten off to a great start. Users describe themselves as “addicted” and some have scanned hundreds or even thousands of items. Highlights from the launch press included:

• TechCrunch: Barcode Hero Attacks In-Store Shopping With An Addictive Social Game
• MSNBC: Like it or not, Barcode Hero is your future

(Now you know why I haven’t been blogging the past couple of months!)

Also happy to announce that we’ve raised a seed round from a great list of angel investors, and we’re hiring our first employees now. From our careers page:

We have opportunities in:

• Software engineering: iPhone, Android, and Web
• Community management and customer service
• UI and graphic design

We are attacking a large market with an ambitious vision: to transform the way consumers shop in stores. Join us and you’ll be making this vision into reality. You’ll work with a small team alongside the founders, with the chance to have a major impact on the product and the company. Your role won’t be limited by a job description; you’ll be doing whatever it takes to make the company successful. You’ll be positioned to grow along with the company, your responsibilities increasing as fast as our userbase and headcount. It’s a high-potential entrepreneurial challenge, perfect for someone who wants their next job to be the last before “founder”.

We are committed to creating an environment in which employees can do their best work, executing with discipline and taking pride in the result. We are also committed to helping employees grow, building skills that will take them to the next level in their careers.

We offer a compelling equity package along with seed-stage salaries and benefits. Barcode Hero is located in San Francisco.

Contact us at careers@barcodehero.com.

I’m a stickler for the exact use of language. So it pains me when I hear important concepts bandied about. When words become buzzwords, they are used loosely and a lot of the original context for the term is lost. Here are some examples:

“Disruptive.” Often used to mean any big change in a market or industry. But not all transformational innovations are disruptive. In fact, the term was introduced by Clayton Christensen specifically to distinguish certain kinds of big changes from others, which he calls “sustaining” innovations:

Sustaining innovation is an innovation that brings to market a product or service that a company in the market could sell for higher margins to its best customers. In other words, sustaining innovation brings a better product into the market. Some sustaining innovations are simple, incremental, year-to-year improvements. Others are dramatic, breakthrough technologies the transition, in telecommunications, from analog to digital, and digital to optical….

The odds overwhelmingly favor the incumbent leaders of the industry in battles of sustaining innovation — whether they are simple, incremental innovations or breakthroughs.

A disruptive innovation brings to market a product not as good as the products in the current market, and so it cannot be sold to the mainstream customers. But it is simple and it is more affordable. It takes root in an undemanding portion of the market, then improves from that simple beginning to intercept with the needs of customers in the mainstream later.

I call that a disruptive innovation not because it’s a breakthrough from a technological sense, but instead of sustaining the trajectory of improvement that has been established in a market, it disrupts it and redefines it by bringing to the market something that is simpler.

“Pivot.” Often used to mean any change in business strategy or product. But not every change to a business plan is a pivot. In fact, the term was introduced by Eric Reis specifically to distinguish certain kinds of changes from others, which he calls “jumps”:

I want to introduce the concept of the pivot, the idea that successful startups change directions but stay grounded in what they’ve learned. They keep one foot in the past and place one foot in a new possible future…. By contrast, many unsuccessful startups simply jump outright from one vision to something completely different. These jumps are extremely risky, because they don’t leverage the validated learning about customers that came before.

“Refactoring.” Often used to mean any change made to code. But not every change to code is refactoring. The term names a specific type of change:

Refactoring is a disciplined technique for restructuring an existing body of code, altering its internal structure without changing its external behavior. Its heart is a series of small behavior preserving transformations. Each transformation (called a ‘refactoring’) does little, but a sequence of transformations can produce a significant restructuring. Since each refactoring is small, it’s less likely to go wrong. The system is also kept fully working after each small refactoring, reducing the chances that a system can get seriously broken during the restructuring.

Refactoring is not the same as redesigning, re-architecting, or rewriting, which can entail much more cost and risk.

I won’t get on your case if you use these words in their more general senses around me. But I make an effort to use them precisely, and you should too. The distinctions they make are too important to be lost. Otherwise you’ll end up founding a startup on a sustaining innovation, thinking you’re being “disruptive”; thrashing about from idea to idea, thinking that you’re “pivoting”; and rewriting your whole codebase from scratch thinking that you’re “refactoring”.

Words matter because concepts matter.

On Quora today I saw a question to the effect of: How do I put up with the stupid people I inevitably find myself working with? Here’s my answer:

I consider myself reasonably intelligent, yet I have had no problem surrounding myself with people at or above my intellectual level. I’ve also had good relationships with co-workers at all levels of intelligence. Unless you’re a world-class genius (statistically unlikely), you are probably mis-diagnosing people as stupid.

I’ll assume that you’re not just lashing out at others as a defense mechanism against your own insecurities (although you need honestly ask yourself that). I’ll assume that you sincerely believe that other people are stupid, probably based on finding it difficult to discuss things and agree with them.

But what you’re really evaluating is their judgment. Differences in judgment are rarely due to stupidity—in work, in friendships or in politics. You can’t address the problem until you identify the real cause. Calling everyone “stupid” leaves you with no next steps.

Here’s a guide for what to do instead:

Before you even decide that you disagree with someone, work to understand their judgment. You may not disagree at all. For instance:

• Do you fully understand what they’re saying? Or are you talking past each other?
• Are you answering the same question? Maybe each of you is answering a different angle on the question (e.g., “what’s our next step?” vs. “what’s the long-term solution?”)
• Are you using terms in the same way? Sometimes disagreements come from differing definitions and terminology.
• Are you talking completely in abstractions? Give examples, and ask them for examples, to get clear and concrete.
• Are you both being clear and precise in your formulations? Sometimes people phrase things loosely or talk in metaphors that aren’t meant to be taken literally.

Ask questions, make sure you understand them fully.

If you decide that you disagree, work to understand their thinking process:

• What are the reasons for their conclusion?
• What is their evidence? What observations or data points are they relying on?
• What general premises or lessons do they take to be relevant? What principles, frameworks, or theories are they applying?
• What goals and values are conditioning their approach?

Ask them (and learn to do it without threatening or intimidating them). You may change your mind through the process.

If not, at least you will understand better how to reason with them:

• Have you seen important data that they haven’t? Maybe they missed a key fact, or they just haven’t seen the breadth or depth of data that you have. Inform them and see if they come around.
• Do you have relevant experience that they don’t? Tell them the observations or lessons learned that lead you to your conclusion (without being didactic or condescending).
• Are you bringing different lessons learned from different backgrounds? If so, which context applies, if either? Maybe one of you has mostly worked at startups and the other mostly at big companies. Which context is relevant here?
• Is either of you making an unwarranted assumption? There are lessons learned and then there are “lessons” that you guessed about and forgot to validate through experience or research. If you disagree with their premises, address that directly.
• Are you guided by different goals and values? If so, you’ll reach different solutions to a problem. Get aligned on goals before arguing about problems and solutions.
• Do you subscribe to different relevant theories? If so, you may not be able to resolve the disagreement quickly, and may need to take another approach (e.g., pick anything reasonable and measure the outcome, or let a third party make the decision).

Throughout all of this reasoning, be aware of the emotional context:

• Are they afraid of the conclusion? Maybe it threatens their work, their reputation, or their self-esteem. There’s no excuse for this, but it happens to everyone sometimes. Good people recognize it sooner or later and let their emotions go. Sometimes a close friend or co-worker can get them to see what’s going on by asking sympathetic questions. (Be sure to ask this question of yourself as well.)
• Are environmental stresses degrading their judgment? Time pressure or having your career on the line can make it hard to do your best work.
• Are they intimidated by you? If you really are smarter or better-spoken, they may be swamped by emotions of insecurity that make it hard to think. You may be unwittingly shutting them down, which begins a vicious cycle. Tone it down.

If you disagree with someone consistently over time, consider these potential cognitive and psychological problems:

• They may have good judgment but poor communication skills. If you repeatedly find that you agree after clearing up initial miscommunication, keep this in mind and account for it. It can be frustrating and it takes patience, but it’s better than arguing and they may even appreciate it.
• They may have raw intelligence, but poor thinking habits—patterns of absorbing, processing, and filing information. Cognitively, they aren’t set up to get to the heart of a matter, to distinguish between essential and accidental details, to form and apply valid generalizations. This too may require patience. It isn’t good, but it isn’t willful, irrational, or stupid. Concentrate on what other virtues and talents they bring to the table, such as creativity, diligence, or relationship-building.
• They may have general insecurities that make them afraid of looking stupid or give them a psychological need to win arguments. There’s no excuse for this either, but you can sometimes work with people anyway if they don’t do this too much or too often, or hold onto it for too long.
• They may have a problem with you personally. Maybe they’ve decided that you’re “arrogant” or obstinate. Maybe they know that you think they’re stupid and resent it. In any case, this will make them less likely to listen to you and more likely to argue with you. They may dig in their heels on a particular issue, or just discount your judgment generally. Admit that you’re part of the problem and work to change.

Bottom line: Stupidity explains only a small percentage of people’s disagreements. Calling someone “stupid” is a dead end—you can’t fix it. Instead, figure out what’s really going on.

Some final advice for the workplace:

• Make sure you’re working in an environment that promotes objective decisions. If decisions are made based on personality and emotions instead of data and discussion, it will make everyone “stupid”. Go somewhere else.
• Choose your battles. You don’t have to get your way in every disagreement. Let other people own their work. Fight only on the decisions that are important and hard to reverse.
• Earn a reputation over time through excellent work. This is much more powerful in commanding attention than intellectual prowess.

I didn’t realize I had so much to say on this topic until I started writing the answer. Quora is doing a great job at getting people to write on topics they never would have otherwise—even folks like me who keep blogs.

In the early days of computing, a software application ran on only one hardware system.  Software plus hardware was, in effect, a single, tightly coupled computer system.

High-level languages, operating systems, and hardware standards eventually decoupled software from hardware, allowing applications to run on a variety of PCs.  What was once a single system had split in two, as if by mitosis.  The result was that hardware became a commodity.  Microsoft captured value; PC makers saw their margins squeezed.

Today we are seeing another mitosis, this time within software itself.  The dividing line now is the public APIs published by companies such as Twitter.  Publishing an API decouples features and UI from users and data.

The result: For an online application, publishing an API commoditizes features and UI, without relinquishing ownership of users and data. This is why Twitter’s API strategy was brilliant.  Twitter focused their resources on the core of the system, retaining strategic, defensible assets while outsourcing non-strategic, indefensible ones.

Twitter’s gain from this, virtually for free: a rich variety of client apps, experimenting and competing with UI and features in Darwinian fashion.  There was far more experimentation and creativity than could have occurred within the walls of Twitter itself.  But now, when it’s time for Twitter to own the client and the user relationship (presumably as a critical piece of an ad-based monetization strategy), they can easily acquire popular third-party clients or create their own.

The lesson many Twitter developers are learning: Building clients and “filling holes” on top of a single platform is a fine hobby, but it’s not much of a business strategy.  The best you can do is build a popular client as a one-man shop (i.e., raising little to no capital) and get acquired, as Loren Brichter did.  But there’s also a lesson for Internet apps: publish an API and cultivate a developer network.  It’s a cheap, strategic way to buy a lot of development and innovation.

In business it’s easy to over-focus on the competition.  Knowing the competitive landscape is indispensable; your product has to be differentiated and ideally you are building defensible assets.  But your primary focus must be on the customer or user and the value you create for them.

I was reminded of this today when I read a post by Garry Tan quoting an article on Netscape and how they over-focused on Microsoft.  Garry says that “having an enemy can focus you in intense ways, but might focus you on the wrong things” (and adds that for a startup, “your competitor is the back button”).  I agree.

I’d go further:  It’s wrong to think of competitors as enemies at all.  Business is not war.  You shouldn’t aim primarily to fight your competitors or to hurt them.  The right model is a sport or game: we’re all aiming to be the best in the same field, we play fair according to established rules (law and contract), and at the end of the day, we shake hands and congratulate each other on a match well played.

You should be glad to have competitors: together you form a market that attracts and retains customers.  You should be glad to have competitors who have gone before you: they educated the market on your product category (creating a new product category is extremely difficult).  You should be glad to have good competitors: bad competitors give your product category a bad name.

When you discuss competitors internally, don’t trash them.  Respect them.  Be sportsmanlike.  Don’t be afraid to praise them for what they do right.  Make sure you know what you do better and where you are uniquely positioned to create differentiated value.  Find your confidence in that, rather than in putting down competitors.

Externally, it’s probably best not to discuss competitors at all.  Amazon has a long-standing policy of not commenting on the competition publicly.  It certainly seems like a no-win situation:  If you praise them, you promote them.  If you criticize them, you open yourself to rebuttal.  Either way, you give competitors publicity you could reserve for yourself.  So maybe it’s best to keep your mouth shut.

So go forth and compete, don’t fight—and may the best man win.

Some managers—the pointy-haired boss variety—think their job is to tell people what to do.  They focus on communicating solutions.  If the website is slow, they tell their people to optimize the database queries.  (Hopefully they at least focus on getting alignment with their reports, instead of managing by fiat.)

Better managers focus on communicating problems.  When they have alignment on problems, they query for judgment about the solutions.  They just point out that the website is slow, and they ask their reports how best to fix it.

I think the best managers, the true leaders, focus at a higher level still—on communicating values. When they have alignment on values, their employees are able to identify the problems themselves, and are motivated to solve them.  They communicate ahead of time that a good user experience is important and that performance is part of that.  When the site is slow, their people notice it themselves and know how to prioritize.

Like many of the best management and leadership techniques, communicating values isn’t something you can do at the last minute.  It’s a long, slow process.  You have to start it early and work on it consistently and patiently over time.  It’s not a way to fight a fire.  But it is a way to grow a garden.

When I have 10 minutes or less, I can inform or entertain myself by checking email or Twitter on my iPhone.

When I have 90 minutes and some table space—and preferably wi-fi—I can be productive on my laptop.

Since getting a Kindle a month ago, I’ve found that it’s perfect for that spot in between, when I have around 45 minutes, maybe not much space, maybe no wi-fi—for example, getting lunch by myself in a small cafe. That’s too long to productively do email on the iPhone, but not ideal for working on the laptop, either.

When tablets arrive, what sweet spots will they fill? Michael Arrington wanted one to surf the web lounging on his couch. Web access in small cafes as well? Reading or even writing on buses and trains? It’s possible to use a laptop there, but not always convenient. Presentations and other business meetings in restaurants? I’ve been in meetings recently where someone pulled out hardcopies of mockups or spreadsheets—we both had our laptops, but there was no room for them, and the upright screen on a laptop isn’t ideal for sharing and collaboration across a table.

The top use case for tablets may surprise everyone. Regardless, the winners there—as with any new platform or medium—will not be those who simply bring old experiences to a new space, but those who embrace the differences of the new space and create new experiences there that don’t work elsewhere.