Nesheim Online

BUZZ MARKETING: Learn it well to build a great startup

 

Buzz Marketing = "Capturing attention of consumers and the media to the point where talking about your brand becomes entertaining, fascinating, and newsworthy."

I saw that definition yesterday in a presentation of a business plan from a student team in my class at Cornell University. They understand a powerful element in building your startup's unfair advantage. When you get it, you'll be far ahead of your competition.

Young people think advertising is how to announce your startup and spread the word about your cool new product. But that is not how things work in the real world. Advertising is used to reinforce a brand of a product that has already become branded. It is expensive because there is so much waste to advertising. New brands are build with public relations. Advertising reminds people of the brand you have already built.

Serial entrepreneurs use "PR" instead of advertising to spread the news. More specifically, they are masters of buzz marketing. That is what gets people around the globe emailing, blogging and text messaging about their cool new startup product. China or Chile, U.S. or United Emirates, they all are part of buzzing about new products. It is global. It is now.

The old PR methods are aimed at getting reporters to write stories and reviews about the new startup product. That takes time (magazines prepare stories three months in advance) and money (to pay a PR firm for its staff to call reporters and promote your startup product).

The new PR focuses on stimulating bloggers to start stories about your new product and spread the word of mouth over the internet. That is low cost and very fast.

When picking a PR firm, interview candidates carefully about buzzing. Influencing the new world of bloggers is a new art. Few PR professionals are yet experts at it. So interview bloggers to ask which PR people get it and understand how to talk to bloggers. When choosing, get your PR firm candidates to show you examples of their successes with influencing bloggers. It is difficult to do, and few PR staffers yet do it well. It is a work in progress to learn the ins and outs of the strange new world of internet media communications.

Be innovative. Especially about what you do with events to get attention. Event marketing has proven to be very productive for startup buzz marketing. Events can be one time internet contests or raffles (give away an Audi TT and you will get a lot of attention and a long list of interested end users. The cost of a car is less than one month of advertising.). Or consider sponsoring a charitable golf tournament for handicapped athletes (just supply your employees as weekend volunteers). There is no shortage of stimulating ideas to pursue.

Be worth talking about, excitedly. You must stimulate the "Wow!" factor in people. They have to immediately get what you are communicating and be eager to instantly tell their friends about it. This morning I emailed news about gentle robotic surgery to a friend facing brutal open heart surgery. Word passing is triggered by emotional stimulation. Even about industrial machinery. Yesterday I had graduate students speaking excitedly about moving dirt on farms to get rich. You must find out what in your cool product will turn on your targeted bloggers so word starts to spread quickly. If bloggers are bored, you'll not get far with your new product. It takes a lot more than "twenty percent less energy required" to get the end user excited.

Use real substance in your product offering to stimulate bloggers. Avoid trying to be provocative just to get attention about your boring product. Your boring may be able to be changed to stimulating if you apply a bit of creativity. Here is one example: shift from talking about the reliability of your manufacturing machine and instead move to talking about how it will not set the customer's factory on fire. That triggers emotions and the buzz starts.

BOTTOM LINE: Getting buzz marketing working is central to your marketing communications program. Key to buzzing are bloggers. This is the era of bloggers. They start passing the word along the internet. Find a PR firm to assist you creatively plan and execute so word of mouth is stimulated and goes to work for you. It is a lot more effective and less expensive than advertising. Serial entrepreneurs can do this in their sleep. It is second nature to them. They know its power and devote serious, innovative and determined time to doing it with excellence. When you can, you'll be far ahead of your competition as you build your unfair advantage.

FOR STARTUP CEOs ONLY: Jump on opportunities, wisely

What a week this has already been! Filled with amazing surprises that remind me how special ("different") a job the CEO has in a startup. It is not classical corporate MBA territory.

Here is one thing that popped out to me: this is no job for people who plan on executing their carefully prepared plan and being rewarded for that.

Why? Because too many things happen suddenly. The unpredictable happens. The lucrative "blue bird" lands on your window without notice. The great news was not in your plan. And the terrible surprise smashes your precious plan.

Here are a couple of real examples that I am close to:

• Customer 3 tells his friends and soon you realize you are swamped with hungry customer candidates. But you don't have the sales people to respond. The CEO jumped and the VP Biz Dev got the green light to scramble (code for spend more time hiring and less time selling). Soon four outstanding sales people joined the new enterprise. The orders began to accelerate far beyond plan projections. So did the burn rate and the need for the B round to be closed much earlier.

• Slow Giant Customer finally says it is ready for an order (of very large size) but tells you they want a custom version and are interested in buying a large portion of your company. The CEO jumped and soon the core team emerged from days of intense work with a plan. The custom code would be the basis for the architecture of the next generation product. That would save two years of time to market.

• Competitor ABC launches a game that is wildly successful overnight in China. The CEO of the competing startup sees this as a huge validation of the target market and has his core team hop on planes to accelerate entry into China. Cash burn plans are scrapped for a new one that calls for a much earlier B round (and faster growth in revenue).

• Public Corporation Competitor Z sues the CEO's startup over a doubtful matter, intending to delay the startup's sales progress and confuse customers. The CEO rallies the board and core team who work out a fresh plan to leverage the energy of the legal efforts into even more sales.

None of those significant events were in any business plan.

All of them open huge doors of lucrative opportunity.

To take advantage of big opportunities calls for cool calm in the face of emotional shock and intense competitive fire. Courage and boldness are high on the list of what the CEO and board and core team must exhibit. And a great deal of wisdom is called for, especially from the board of directors.

These are not times for rage and anger, or testosterone highs.  Those chemicals make a  mess out of your brain, clouding its ability to make clever moves and clear decisions.

BOTTOM LINE: Some say "execution is everything" in a startup. Responding to the unforeseen is a big  part of that. This is a game of risk maximization, not risk reduction. Focus of tiny resources on the most lucrative target is how to win, to become the next gorilla. Shifting the focus is very risky, but oftn very necessary. Even if it means abandoning a huge part of your carefully prepared plan and jumping to exploit the unexpected opportunity. When you understand this, you'll add a rock solid element to building your unfair advantage.

MARCH TO IPO (Part of a series): What interview questions do you ask?

Today this question came from an entrepreneur in India who is on a hot streak with a rapidly growing startup:

"I'm a regular reader of your blog and your insights has helped me tremendously. Here is one more thing I want to ask you:

1. How do I go about interviewing candidates for positions like VP/CXO for Mktg, finance, sales etc.?
2. What questions will help me assess them right?
We have a recruiter firm to shortlist profiles, but they aren't involved in the actual interview process. I involve my key employees and investors for assessing them and then compare notes to get a 360 degree feedback to get better perspective.
Still, I believe there is scope to improve the process. Your feedback will help me make a better team."

Okay, here is how I'll respond to his email: Put yourself in this situation. Since yesterday's blog, you have decided to focus on getting the best people you can find. You may be pre-seed or as in this case, you are suddenly hot and need that missing core team of aces to help you convert from small to world-class. And you have run out of able friends and colleagues for candidates. Next come the strangers (resumes emailed by other strangers, the harried recruiters). What do you ask the candidates to be more likely you are getting the people you want. the ones now represented by their resumes and references?

Here is what I suggest:

1. Use the Search feature on my blog to look up "interview". You will find several suggestions. One popular set of interview tips is from a classic posted on 2006 October 24.
2. Trust your intuition more than resumes and references. You are the expert on the chemistry in your company. You understand how people will fit your company's working culture. You know what kind of person you need for your special business.
3. Ask sensitive and personal questions. You are going to become very intimate with your employees over the next half decade. Get to know their inner secrets before you hire them. "What makes you mad?" "What kind of person irritates you?" and then "Why?" Listen well and you'll learn a lot about the person. This is especially important to do with Asian startups.
4. Ask about their coping with failures. Your startup is a child that will get into trouble. Expect a few scrapped knees. But you want vice presidents who can keep the child from getting into serious trouble. Hire people that know how to keep the child from heading off to play on a dangerous highway.
5. Discuss issues rather than grill a person. Open sharing of ideas about how to solve real problems gives both you and the candidate a chance to be real people discussing important business issues. The goal is not to see who is stronger. Rather, you want to observe how the person thinks. This is relaxing to the candidate and more likely to open up the strong skills of the person for you to observe. And the candidate is more likely to admit shortcomings.
6. Ask "What do you think you can do to help me succeed?" That is an open ended question that is less threatening and offers the chance for the person to be creative during the interview. You will often be surprised at what you hear. I have. And I often get some great ideas as a bonus.
7. Ask yourself "When I am traveling, is this a person whom I can trust to be wise running the business while I am away?" The CEO does not run the business. There is too much for that person to do (constant communicating with investors, raising fresh capital, and endless interviewing and hiring all take 40% of the CEOs time away from managing the startup). The VPs have to be able to operate with very little guidance day to day. Look for such people. They are gems. Keep thinking about how this person would work with you out of touch and that person and others like that in the office. Then you can pick wisely.
8. Be prepared to answer your own question. Able candidates will expect you to respond to any question you ask them. Don't be surprised when the ask you to. Be ready. It's fun to do.

BOTTOM LINE: Get your interview questions ready. Practice them on a friend. Get so good that you can ask your favorite key questions anywhere, anytime, of any candidate. I've seen people interviewed on elevators in hotels, while waiting for an airplane and during soccer matches. Your quick questions lead to discovery of outstanding people who were later hired. As CEO, you'll be interviewing the rest of your life. Become a  master, a black belt, of interviewing. Then you'll add the most powerful element to building your unfair advantage: Great people. I wish you The Best!

MARCH TO IPO (Part of a series): Finding GREAT people is Task Number 1

"Where do I find the people I need for my startup? How do I attract them to work for my new enterprise?"

Here are some tips from serial entrepreneurs I respect:

• Finding people will take 20% of your time as CEO for the rest of your startup life. Every day you will be recruiting. It will become as natural to you as brushing your teeth. It will be as important to you as breathing (without it, your startup will die).
• Start early -- years early. Great startup CEOs line up their core team and key techies many years before doing the startup. Yes, I said years, not months. That is how they decide that the people are great people. They know they will work well together on the job.
• Get the people before the money. Read yesterday's blog and think about it. Great investors invest in people, not ideas. Just ask them if you do not believe me.
• People you know are better than strangers. It would be foolish and dangerous to leave your children with a baby sitter you did not know. Your startup is also precious. Serial entrepreneurs do not turn their new enterprises over to be managed by strangers.
• Ability is more important than friendship. You may have to fire the person. That's how to lose friends. Better to focus on the ability of a person than a relationship. Don't pick them for religious reasons, or because they love one brand of computer over another, or because they saved your life once. They have to deliver results. Chose ability.
• "A people hire B people hire C people". That adage was cited recently in a private dinner for serial entrepreneurs that I was moderating. Time brings compromise. It is inevitable. Fight it. Keep the average as high as you can as long as you can.
• Do not compromise on quality. Serial entrepreneurs always tell me "I have learned bitter lessons about compromising on people: in a word, don't. Ever." Enough said. It is hard to do because you desperately need to fill the open position.

So where do you find the missing people? Here is the pattern that I see working in successful startups:

1. Start with people you know well because you have worked with them before.This is the quickest way to get going with quality people.
2. Fan out from your core team, get the entire company recruiting. You hired A people so get them to find more A people. Serial entrepreneur E.C. built an entire company that way, without a penny of venture capital. Amazing. But it works.
3. Birds of feather produce flocks of startup people. For instance, your university alumni organization. And small groups of people at work who like to talk quietly about startups. Forums about new enterprises attract startup people you can meet. Find out where they hang out and go there. Become one of them.
4. Recruit a great HR person, even if part-time. The HR stands for Heavy Recruiter. Able and eager to find the missing great people. That's the payoff for a true HR person in an early stage startup. Soon it will become a full time position because you'll be doubling the number of your employees each year.
5. Choose your recruiters carefully. Once you have cash, you'll grow fast and soon need to user recruiters. Pick them wisely. Serial entrepreneurs choose recruiters like they choose people, after interviewing them in depth.
6. Be patient with your company recruiting. The chances are low of you finding great people arriving in your Job email box. But it will happen. So read them all. I'll never forget John Morgridge CEO of Cisco sitting reading resumes the day I came into his office to interview him. Every resume is valuable. The haystack has some great gems hidden in it. It's your job to find them.
7. Your unfair advantage is the honey that attracts the bees. The great story that attracts the great people is about your unfair advantage. Prepare it well. Then have fun telling it. Over and over and over and over.

BOTTOM LINE: Great startups are built with great recruiting by the CEO and core team. It is a skill you've got to have. Learn it at work so when you are ready for your startup, you can be an outstanding recruiter. Plan recruiting weekly at your startup. Discuss recruiting daily. Make it a way of life for every employee. Get an army of great people recruiting for you. Your startup will then be built with great people. Leave the rest for your competition. When you can do this, you'll be well on your way to building your unfair competitive advantage.

MARCH TO IPO (Part of a series): What comes first? Money or people?

"John, I have a great idea for a startup. Should I next go get some angel money and get started? Or should I find the management team first?

That is a great question. It is central to the success of building a startup. Here is what I have learned:

• People are more important than money. People do the work and without them, money is idle.
• People attract the money -- not the reverse. If you find people who will not join you without the money in the bank, they are the wrong people to join you to do your startup.
• Money invests in people -- not ideas. People have the idea. They give life to the idea. Money wants to invest in great people with ideas, not ideas missing great people.
• Ideas need both people and money to grow. Plan with your people when to get the money, how much, from whom, when. Like watering a garden, you need to be wise, neither over or under watering, choosing the right times to pour on the water and other times to refrain.

So think about a triangle with three elements connected: People + Idea + Money.

Then think about the sequence to connect them: (1) One person gets an idea => (2) The idea attracts the core management team => (3) The people attract the money. This is described in detail in "The 14 Steps to IPO" in my book, High Tech Start Up.

What is hard about this for solo engineers is the attraction of the people. Engineers think they can take a great idea to venture capital investors, get the money and hire a recruiter to get the management. But that is not how to create a world-class new enterprise.

Next time I'll address questions about how to find great people for your core management team.

BOTTOM LINE: Start with finding the people. It is worth the extra time it takes. Wise entrepreneurs work for years to create a core team. After that they go after good ideas for the core team to use to form a great startup. When you understand the power of that principle, you'll be well on your way to forming your unfair competitive advantage.

HOW TO WORK WITH YOUR VCs: Treat them as members of the family

What an amazing past 14 days I have had with startups! Wow!

• Launch of public beta (Nurien.com )in Seoul, Korea for an amazing game startup
• Completion of documents to raise $25 million B round for a hot stealth mode new enterprise
• Attack on startup that is taking away market share from a stogy old-thinking public corporation
• Startup gets surprised and sued about disputed patents by corporation with a lot more cash
• Angel declines to invest at last minute in a struggling startup
• Board members dispute compensation of first-time founders
• CEO struggles with board meeting documentation and processing
• Discovery of VCs investing in competitors narrows list of candidates for future financing
• Hot marquee customers suddenly sign up

All those are events that impact your board of directors. You are on it and are expected to lead it.

Q: "So how do you manage your business when those things happen? "
A: "I suggest you treat them as part of the family."

Here is what I mean about how to work with your board when big news arrives:

• Keep them informed = no surprises.
• Communicate the bad news immediately = do not hesitate
• Celebrate the good news = uplifting moments are precious and energizing
• One bad day is not the end = most days are not terrible
• Ask for advice  = all at once, not 1:1, keep everyone part of the dialogs
• Conference calls work great = do them quickly, keep them short, as soon as discussion is needed
• Remember your lawyer = keep the legal people in the loop, listening in as much as possible
• Keep information to a minimum = if you need to talk a lot, schedule a conference call
• Expect it, this is normal = it is going to happen, all of it

BOTTOM LINE: Your board of  directors is not your authoritarian parents. Treat them as family members, not dictating bosses. Family help you, so get their help. They can do more when you give them time to think. Include them whenever you wonder if you should, they'll tell you thank you and keep rooting for you. When you learn to do this, it will show how wise you are and add a large element to building your unfair advantage.

NAME IT OR LOSE IT: What is "It"? and What are you aiminng to dominate?

"What have you invented?"

"What is this new market category you are aiming to dominate?"

Those are two of the biggest questions startup CEOs will be asked. You have to be able to answer them on the spot. Your responses are central to the formation of your unfair competitive advantage. Without them, you are like a cork in the proverbial startup ocean, rudderless, moving at the will of the waves, tossed to and fro.

Here is a fine example to get your thinking going:

After Edison invented the cylindrical talking playback device, others produced alternatives, some on disks. The public called all of them “talking machines.” All were expensive and unreliable players until Johnson invented a solution for Berliner’s wobbly rotating disk. They decided to call it a “phonograph”. The company they formed was Victor Talking Machine Co. They named their player the Victrola which became hugely popular. It’s icon was the fox terrier dog sitting with its head cocked to one side, listening to a phonograph. Johnson pioneered the mass production of entertainment. He transformed entertainment from events performed live for limited-sized audiences into today’s vast, multimedia industry. [From Investors Business Daily,  2008 March 4].

You need a similar story. The thing you have invented needs a name. The market segment you are competing in needs a name. Both have to be part of your exciting story about your quest to transform a vast market.

BOTTOM LINE: Try inserting your name for Johnson's and then substitute your company name and so on. Keep crafting until you get a story that works for your company. When you do, you'll be way ahead of your competitors and well on your way to becoming the leader and gorilla of a new market category. Like Amazon, Google and [put your company name here]. It is central to forming your unfair advantage.

MARCH TO IPO: (Part of a series) - What kind of money do you want to raise?

"We can raise some seed money from a private person or from venture capitalists? What do you think we should do?"

Good question. Simple to answer.

There are 3 kinds of startup money:

1. Life Ring Money. You need it to save your startup. Often sought when everything goes bad but you are determined to continue. You cry "We just need a bit of time to prove we can turn this thing around!" Comes in $100,000 amounts, sometimes several rounds in a row. Not a sign of strength. Company is desperate.


2. Pillow Money. You put it in the bank to sleep better. Used in case of the rainy day (which will come, that is for certain in startups). Classic round for startups that are growing and successfully on the path to IPO. These are multi-million dollar rounds from mid term investors. The startup is very close to or already at profitability and positive cash flow.


3. War Money. This is for declaring to the world your intention to enter the contest to climb the new mountain to become the gorilla of a new category. Serious money. In the millions. Will take several rounds to know if you have achieved your ambitions. From seed rounds to later stage hyper growth rounds. Aggressive investors with deep pockets are needed.

BOTTOM LINE: Decide on what kind of money you will raise. That will focus you on the precise type of investor you will need. If you need survival money, rethink your plan. Some of the companies I have watched have switched from being careful to being aggressive and have altered their business pland and thereby moved from life ring money raising to completing successful war money rounds. A well financed startup has a greater chance of executing on its plan. That wisdom contributes a vital ingredient to building your unfair competitive advantage.

MARCH TO IPO: (First of a series) - Aim before pulling the trigger

"Hey, John, we are a bit worried. We have a great idea, a couple of great people and see a hole in the market to exploit. And we got $1M from a wealthy internet millionaire. I know that sounds good but now we are wondering about the next round of financing. Did we rush into the seed round and damage getting the next one?"

That is a wise question. You will find several of similar language in my emails. In this case it's a bit late to do much about repairing any damage. But let's respect the questioner because most seed rounds done by first time founders do have major errors in them that can make the next round very difficult.

Here are some of the tips I give the startups I coach:

• Plan all the rounds on your way to IPO. If you don't you may find your first deal will have a valuation or special terms in it that are so repugnant to the next round investor community that none will be interested in talking to you. For instance, who owns your intellectual property?
• Value your company for each year up to IPO. Investors want to see the numbers. If you don't provide them, they will invent their own. How many people will you hire? What cash will you need each year? What will sales and profits be each year? The VCs want to see what return on investment they might get if all goes well. How many times will their investment be for waiting how many years for what percent per year ROI? Do your numbers.
• Beware of the devil in the details of your seed investor's term sheet. Board seats, veto authority on certain subjects and actions, approval rights on the next rounds of financing and more are all going to restrict you and the next round of investors. Get them right to get the next round.
• Get a lawyer who has done startup rounds before. You must learn what is standard practice with startup investors in your community. A lawyer active with startup financing will know what to negotiate.
• Respect that your march to IPO will be full of surprises. Anything can happen. Including Google or Microsoft knocking on your door sooner than you expected. Or stealth startups popping up to give you the scare of your life. A corporate buyer can suddenly back out of acquisition talks for reasons not related to your business. Or you may find even amazingly greater success than you could ever dream of. I have experienced all of those and more. Whatever you think today of such uncertainty applying to your startup, be sure to do a sketch of your march to IPO. You'll find yourself in a much better position to guide your fledgling business to success, including getting the investors you need, year after year, to IPO.

BOTTOM LINE: Before you accept your seed round, do a sketch with numbers of your march to IPO. That will give you a more realistic way of preparing for your subsequent rounds without having to do repairs. I have spent as much a three years helping undue messes created in one startup that got off to an unwise start with a poorly done seed round. They have survived and are now doing well. But most suffer a lot more. Use that good mind God gave you. Do your thinking. Do your numbers. Prepare. The march to IPO is hard enough without having to do a lot of repairs along the way. A great seed round will germinate a great harvest. It is one way serial entrepreneurs build their unfair competitive advantages.

ADDING A REAL CEO: When is best?

"When do you think we should add a heavyweight to our startup? We are techies, building a prototype with angel money. A person with great credentials is available: from the right industry, decades of experience, has great connections. Is it too early? What do you think?"

I get that question often because it is so common and so important.

Here is my response to the founder CEO:

Dear B.,

When you think about adding people to your management team, start by thinking in two categories: (1) marquee and (2) workers. Famous people seldom work, they talk. Working people are seldom famous with marquee recognition but get a lot of things done.

Then think about what thing brings your company the most credibility: (1) people saying they support the company or (2) business results. Supporters include investors and advisers. Results include competitive market positioning and sales progress.

Then decide on what mix your company needs at the early stage it is in.

I have found it best to find working people who get results. Pay them what it takes to attract and retain them. Marquee names typically run out of Rolodex contacts very quickly and are expensive for what they deliver. Work and results trump fame and names.

BOTTOM LINE: Pick people for what world-class results they can bring to your company. Betting on a few contacts to save the day is a sign of desperation. Watching a team of great workers build a great company that customers race to is an inspiration (to investors, employees and bloggers). I put my money on workers and results. Think before you make your decision. It is a key to building your unfair competitive advantage.

 

"Bite!": Your story needs it (to get the money)

"It doesn't have 'bite' " said the VC partner.

The founder and core team sat in silence. They had come to try out their presentation of the startup's business plan as part of preparing to raise a large B round. Their startup is doing amazing things and has multi-billion dollar potential. But less than a minute into the trial presentation the VC's exclamation leaped out at them.

The discussion that followed turned into a workshop with everyone innovating and making suggestions. The result was a much more compelling story, from the first to the last slide. It took a lot of hard work and experience to get to a successful conclusion. But at the end of the morning, the story had "bite."

I believe your story will not get the money unless it has bite. Nor will it attract great employees. Nor will it get bloggers or end users excited. You have to have it. It's a sign that you have an unfair competitive advantage.

So what is "bite?" These are what I think it is about:

• Bold. Your claim to fame must be bold. Shocking is overdoing it.  Boring is death.
• Story. It must be a story. Stories are attractive. They are interesting. They stir emotions. They have beginnings and plot and intrigue, and a happy ending for the heroes.
• Emotion. You must stir emotions with your story. Use facts but more than facts. Use facts to trigger emotions.
• Poignant. Your idea needs to treat a significant pain. A pain being suffered by the end user. That is what is meant by a compelling value proposition. The listener must feel the pain and respond poignantly.
• Grabs. Your story has to grab the attention of the listener. Like a hand that reaches out and pulls the listener into the room. Swiftly and powerfully.
• Believable. It has to be believable. That is where you win or lose. Realistic carries the day. Able to do an amazing thing. Wow!

BOTTOM LINE: Test your idea. How much bite does it have? Is it a bold story that triggers emotions, stimulates a poignant response as it grabs the listener who at the end of the tale believes you can do it? When you have that, you are ready to tell your story. Then you'll have built a powerful element of your unfair advantage.

CREATIVE STARTUP PEOPLE (Number 10 last of a series) : Do you have what they have?

Today I'll move on to the final trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.

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TRAIT NUMBER 10: Openness and sensitivity of creative individuals often exposes them to suffering and pain yet also a great deal of enjoyment.

Application: Startups are both brutal and beautiful. Come prepared to experience both emotions, daily.

“Electrical engineer and prolific inventor Jacob Rabinow put it this way: 'Inventors have a low threshold of pain. Things bother them.' A badly designed machine causes pain to an inventive engineer, just as the creative writer is hurt when reading bad prose. Being alone at the forefront of a dicipline also makes you exposed and vulnerable. Eminence invites criticism and often vicious attacks. When an artist has invested years in making a sculpture, or a scientist in developing a theory, it is devastating if nobody cares."

"Divergent thinking is often perceived as deviant by the majority, and so the creative person may feel isolated and misunderstood."

"Perhaps the most difficult thing for a creative individual to bear is the sense of loss and emptiness experienced when, for some reason or another, he or she cannot work. This is especially painful when a person feels one's creativity drying out."

"Yet when a person is working in the area of his or her expertise, worries and cares fall away, replaced by a sense of bliss. Perhaps the most important quality, the one that is most consistently present in all creative individuals, is the ability to enjoy the process of creation for its own sake."

BOTTOM LINE: "These ten pairs of contrasting personality traits [in this series] might be the most telling characteristic of creative [startup] people. These conflicting traits are usually difficult to find in the same person. Yet without the second pole, new ideas will not be recognized. And without the first, they will not be developed to the point of acceptance. Therefore, the novelty that survives to change a domain is usually the work of someone who can operate at both ends of these polarities -- and that is the kind of person we call 'creative'." CEOs of startups find themselves pulling out their hair daily as they attempt to manage creative people. Calm will return when you learn the ten conflicting traits of creative people. Then you can turn your frustrations into constructive guidance that adds power to your startup's unfair competitive advantage.

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NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.

Today I'll move on to the final trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.

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TRAIT NUMBER 10: Openness and sensitivity of creative individuals often exposes them to suffering and pain yet also a great deal of enjoyment.

Application: Startups are both brutal and beautiful. Come prepared to experience both emotions, daily.

“Electrical engineer and prolific inventor Jacob Rabinow put it this way: 'Inventors have a low threshold of pain. Things bother them.' A badly designed machine causes pain to an inventive engineer, just as the creative writer is hurt when reading bad prose. Being alone at the forefront of a dicipline also makes you exposed and vulnerable. Eminence invites criticism and often vicious attacks. When an artist has invested years in making a sculpture, or a scientist in developing a theory, it is devastating if nobody cares."

"Divergent thinking is often perceived as deviant by the majority, and so the creative person may feel isolated and misunderstood."

"Perhaps the most difficult thing for a creative individual to bear is the sense of loss and emptiness experienced when, for some reason or another, he or she cannot work. This is especially painful when a person feels one's creativity drying out."

"Yet when a person is working in the area of his or her expertise, worries and cares fall away, replaced by a sense of bliss. Perhaps the most important quality, the one that is most consistently present in all creative individuals, is the ability to enjoy the process of creation for its own sake."

BOTTOM LINE: "These ten pairs of contrasting personality traits [in this series] might be the most telling characteristic of creative [startup] people. These conflicting traits are usually difficult to find in the same person. Yet without the second pole, new ideas will not be recognized. And without the first, they will not be developed to the point of acceptance. Therefore, the novelty that survives to change a domain is usually the work of someone who can operate at both ends of these polarities -- and that is the kind of person we call 'creative'." CEOs of startups find themselves pulling out their hair daily as they attempt to manage creative people. Calm will return when you learn the ten conflicting traits of creative people. Then you can turn your frustrations into constructive guidance that adds power to your startup's unfair competitive advantage.

=========================================================================================
NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.

Today I'll move on to the final trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.

======================================================

TRAIT NUMBER 10: Openness and sensitivity of creative individuals often exposes them to suffering and pain yet also a great deal of enjoyment.

Application: Startups are both brutal and beautiful. Come prepared to experience both emotions, daily.

“Electrical engineer and prolific inventor Jacob Rabinow put it this way: 'Inventors have a low threshold of pain. Things bother them.' A badly designed machine causes pain to an inventive engineer, just as the creative writer is hurt when reading bad prose. Being alone at the forefront of a dicipline also makes you exposed and vulnerable. Eminence invites criticism and often vicious attacks. When an artist has invested years in making a sculpture, or a scientist in developing a theory, it is devastating if nobody cares."

"Divergent thinking is often perceived as deviant by the majority, and so the creative person may feel isolated and misunderstood."

"Perhaps the most difficult thing for a creative individual to bear is the sense of loss and emptiness experienced when, for some reason or another, he or she cannot work. This is especially painful when a person feels one's creativity drying out."

"Yet when a person is working in the area of his or her expertise, worries and cares fall away, replaced by a sense of bliss. Perhaps the most important quality, the one that is most consistently present in all creative individuals, is the ability to enjoy the process of creation for its own sake."

BOTTOM LINE: "These ten pairs of contrasting personality traits [in this series] might be the most telling characteristic of creative [startup] people. These conflicting traits are usually difficult to find in the same person. Yet without the second pole, new ideas will not be recognized. And without the first, they will not be developed to the point of acceptance. Therefore, the novelty that survives to change a domain is usually the work of someone who can operate at both ends of these polarities -- and that is the kind of person we call 'creative'." CEOs of startups find themselves pulling out their hair daily as they attempt to manage creative people. Calm will return when you learn the ten conflicting traits of creative people. Then you can turn your frustrations into constructive guidance that adds power to your startup's unfair competitive advantage.

=========================================================================================
NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.

Today I'll move on to the final trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.

======================================================

TRAIT NUMBER 10: Openness and sensitivity of creative individuals often exposes them to suffering and pain yet also a great deal of enjoyment.

Application: Startups are both brutal and beautiful. Come prepared to experience both emotions, daily.

“Electrical engineer and prolific inventor Jacob Rabinow put it this way: 'Inventors have a low threshold of pain. Things bother them.' A badly designed machine causes pain to an inventive engineer, just as the creative writer is hurt when reading bad prose. Being alone at the forefront of a dicipline also makes you exposed and vulnerable. Eminence invites criticism and often vicious attacks. When an artist has invested years in making a sculpture, or a scientist in developing a theory, it is devastating if nobody cares."

"Divergent thinking is often perceived as deviant by the majority, and so the creative person may feel isolated and misunderstood."

"Perhaps the most difficult thing for a creative individual to bear is the sense of loss and emptiness experienced when, for some reason or another, he or she cannot work. This is especially painful when a person feels one's creativity drying out."

"Yet when a person is working in the area of his or her expertise, worries and cares fall away, replaced by a sense of bliss. Perhaps the most important quality, the one that is most consistently present in all creative individuals, is the ability to enjoy the process of creation for its own sake."

BOTTOM LINE: "These ten pairs of contrasting personality traits [in this series] might be the most telling characteristic of creative [startup] people. These conflicting traits are usually difficult to find in the same person. Yet without the second pole, new ideas will not be recognized. And without the first, they will not be developed to the point of acceptance. Therefore, the novelty that survives to change a domain is usually the work of someone who can operate at both ends of these polarities -- and that is the kind of person we call 'creative'." CEOs of startups find themselves pulling out their hair daily as they attempt to manage creative people. Calm will return when you learn the ten conflicting traits of creative people. Then you can turn your frustrations into constructive guidance that adds power to your startup's unfair competitive advantage.

=========================================================================================
NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.

Today I'll move on to the final trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.

======================================================

TRAIT NUMBER 10: Openness and sensitivity of creative individuals often exposes them to suffering and pain yet also a great deal of enjoyment.

Application: Startups are both brutal and beautiful. Come prepared to experience both emotions, daily.

“Electrical engineer and prolific inventor Jacob Rabinow put it this way: 'Inventors have a low threshold of pain. Things bother them.' A badly designed machine causes pain to an inventive engineer, just as the creative writer is hurt when reading bad prose. Being alone at the forefront of a dicipline also makes you exposed and vulnerable. Eminence invites criticism and often vicious attacks. When an artist has invested years in making a sculpture, or a scientist in developing a theory, it is devastating if nobody cares."

"Divergent thinking is often perceived as deviant by the majority, and so the creative person may feel isolated and misunderstood."

"Perhaps the most difficult thing for a creative individual to bear is the sense of loss and emptiness experienced when, for some reason or another, he or she cannot work. This is especially painful when a person feels one's creativity drying out."

"Yet when a person is working in the area of his or her expertise, worries and cares fall away, replaced by a sense of bliss. Perhaps the most important quality, the one that is most consistently present in all creative individuals, is the ability to enjoy the process of creation for its own sake."

BOTTOM LINE: "These ten pairs of contrasting personality traits [in this series] might be the most telling characteristic of creative [startup] people. These conflicting traits are usually difficult to find in the same person. Yet without the second pole, new ideas will not be recognized. And without the first, they will not be developed to the point of acceptance. Therefore, the novelty that survives to change a domain is usually the work of someone who can operate at both ends of these polarities -- and that is the kind of person we call 'creative'." CEOs of startups find themselves pulling out their hair daily as they attempt to manage creative people. Calm will return when you learn the ten conflicting traits of creative people. Then you can turn your frustrations into constructive guidance that adds power to your startup's unfair competitive advantage.

=========================================================================================
NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.

REAL ENTREPRENEURS DON'T MAKE EXCUSES: They make lemonade from the lemons and go IPO

I'm staring out of my jet lagged eyes at the cityscape of Seoul, Korea. Home to hot digital games and food that will turn you mouth into red hot. I'm here helping a couple of great startup leaders prepare for their first board meeting tomorrow morning.

This is the office of Nurien, the world leader of 3D social networks. It was founded by two Cornell graduates, one a former student of mine. The closed beta of their first game will begin in the coming months.

Today they closed on a large Round A financing from world-class venture capital firms who do not have offices here.

The company rocks! Lots of creative employees (Nurenians), attractive working quarters and American business methods in a high intensity industrial center of the global economy. The country has optical fiber to every home. Wireless is everywhere. Taxi drivers use two mobile phones, talk via Blue tooth, have GPSS and digital fare meters with receipt printers. Stores are filled with buyers of world class brands, and giant advertising LCD screens light up the day and night from miles of skyscrapers. This place is hot!

Nurien has special meaning to its root name, but more importantly, in this intense labor market, to me it means "rock" in Korea. And the co-founders, Andy and Tim, know it. In fact they have deliberately taken advantage of the situation here. They have created a startup that stands out so brightly that it cannot be overlooked. The rest of the startups in the city have employees that work for cash wages (not very lucrative) and report to classical Asian managers (not much fun). So for Nurien, a company culture created deliberatively has become a local magnet, attracting the best of the best in the competitive talent market. And it is very competitive: this is the world center for massive player on-line games. The games are hot (make a ton of money) in Korea and China and the rest of the world. Just ask Shanda, Giant Interactive and Perfect World (IPOs now on Wall Street).

Do you think like Andy and Tim? Test yourself: have you complained recently that your local labor market is too tough to compete in? Or that you are missing great investors? Or that your neighborhood is a poor place to do a global startup?

Andy and Tim did not. They saw opportunity where others saw negative conditions surrounding them. And now they are launching a series of breathtaking games created by inventive people who are excited about working with Nurien. Andy and Tim made lemonade from what others saw as lemons. I hope you do that.

BOTTOM LINE: To launch your startup where you live, look for the positives and sew them together as part of your competitive advantage. Think about how to use a company culture to out-maneuver your competition. Cogitate on what management style would attract the best of the best to rush to come to work for you. Those are signs of the serial entrepreneur who knows that with a magnet that attracts top talent comes one of the most powerful elements of unfair advantage building. They know how to make lemonade out of even the most sour of lemons.

CREATIVE STARTUP PEOPLE (Number 9 of a series) : Do you have what they have?

Today I'll move on to the next trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.

======================================================

TRAIT NUMBER 9: Creative persons are very passionate about their work, yet they can be extremely objective about it as well.

Application: Serial entrepreneurs are brutally critical of their own work, as well as excited about it.

“Without the passion, we soon lose interest in a difficult task. Yet without being objective about it, our work is not very good and lacks credibility. So the creative process tends to be what some respondents called a yin-yang alteration between these two extremes."

"Historian Natalie Davis says 'I think it is very important to find a way to be detached from what you write, so that you can't be so identified with your work that you can't accept criticism and response. I am aware of that and of when I think it is particularly important to detach oneself from the work, and that is something which age really does help.'"

A. is wildly enthusiastic about his inventions and harshly critical of his (and others') work when it does not meet his standard.

E. is her own toughest critic and expects others to do the same. Yet she praises people objectively, acknowledging the challenging circumstances she has them working in.

A. and T. bubble with enthusiasm about their new business when strangers and reporters inquire. Yet they are very tough minded about setting a very high bar that their own work must surmount.

P. is quietly objective and positive at the same time. He is a strong cheerleader and supporter of the companies he has invested in. Yet at board meetings he is very outspoken about less than the best results delivered by the startups.

BOTTOM LINE: Experienced entrepreneurs are self critical and yet very enthusiastic about their work. They expect other employees to do the same. At board meetings they are brutally realistic, about the good work and the bad. They expect to be criticized and to be critical. It comes with the turf. It is how they build their unfair competitive advantages.

=========================================================================================
NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.

Today I'll move on to the next trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.

======================================================

TRAIT NUMBER 9: Creative persons are very passionate about their work, yet they can be extremely objective about it as well.

Application: Serial entrepreneurs are brutally critical of their own work, as well as excited about it.

“Without the passion, we soon lose interest in a difficult task. Yet without being objective about it, our work is not very good and lacks credibility. So the creative process tends to be what some respondents called a yin-yang alteration between these two extremes."

"Historian Natalie Davis says 'I think it is very important to find a way to be detached from what you write, so that you can't be so identified with your work that you can't accept criticism and response. I am aware of that and of when I think it is particularly important to detach oneself from the work, and that is something which age really does help.'"

A. is wildly enthusiastic about his inventions and harshly critical of his (and others') work when it does not meet his standard.

E. is her own toughest critic and expects others to do the same. Yet she praises people objectively, acknowledging the challenging circumstances she has them working in.

A. and T. bubble with enthusiasm about their new business when strangers and reporters inquire. Yet they are very tough minded about setting a very high bar that their own work must surmount.

P. is quietly objective and positive at the same time. He is a strong cheerleader and supporter of the companies he has invested in. Yet at board meetings he is very outspoken about less than the best results delivered by the startups.

BOTTOM LINE: Experienced entrepreneurs are self critical and yet very enthusiastic about their work. They expect other employees to do the same. At board meetings they are brutally realistic, about the good work and the bad. They expect to be criticized and to be critical. It comes with the turf. It is how they build their unfair competitive advantages.

=========================================================================================
NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.

Today I'll move on to the next trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.

======================================================

TRAIT NUMBER 9: Creative persons are very passionate about their work, yet they can be extremely objective about it as well.

Application: Serial entrepreneurs are brutally critical of their own work, as well as excited about it.

“Without the passion, we soon lose interest in a difficult task. Yet without being objective about it, our work is not very good and lacks credibility. So the creative process tends to be what some respondents called a yin-yang alteration between these two extremes."

"Historian Natalie Davis says 'I think it is very important to find a way to be detached from what you write, so that you can't be so identified with your work that you can't accept criticism and response. I am aware of that and of when I think it is particularly important to detach oneself from the work, and that is something which age really does help.'"

A. is wildly enthusiastic about his inventions and harshly critical of his (and others') work when it does not meet his standard.

E. is her own toughest critic and expects others to do the same. Yet she praises people objectively, acknowledging the challenging circumstances she has them working in.

A. and T. bubble with enthusiasm about their new business when strangers and reporters inquire. Yet they are very tough minded about setting a very high bar that their own work must surmount.

P. is quietly objective and positive at the same time. He is a strong cheerleader and supporter of the companies he has invested in. Yet at board meetings he is very outspoken about less than the best results delivered by the startups.

BOTTOM LINE: Experienced entrepreneurs are self critical and yet very enthusiastic about their work. They expect other employees to do the same. At board meetings they are brutally realistic, about the good work and the bad. They expect to be criticized and to be critical. It comes with the turf. It is how they build their unfair competitive advantages.

=========================================================================================
NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.

Today I'll move on to the next trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.

======================================================

TRAIT NUMBER 9: Creative persons are very passionate about their work, yet they can be extremely objective about it as well.

Application: Serial entrepreneurs are brutally critical of their own work, as well as excited about it.

“Without the passion, we soon lose interest in a difficult task. Yet without being objective about it, our work is not very good and lacks credibility. So the creative process tends to be what some respondents called a yin-yang alteration between these two extremes."

"Historian Natalie Davis says 'I think it is very important to find a way to be detached from what you write, so that you can't be so identified with your work that you can't accept criticism and response. I am aware of that and of when I think it is particularly important to detach oneself from the work, and that is something which age really does help.'"

A. is wildly enthusiastic about his inventions and harshly critical of his (and others') work when it does not meet his standard.

E. is her own toughest critic and expects others to do the same. Yet she praises people objectively, acknowledging the challenging circumstances she has them working in.

A. and T. bubble with enthusiasm about their new business when strangers and reporters inquire. Yet they are very tough minded about setting a very high bar that their own work must surmount.

P. is quietly objective and positive at the same time. He is a strong cheerleader and supporter of the companies he has invested in. Yet at board meetings he is very outspoken about less than the best results delivered by the startups.

BOTTOM LINE: Experienced entrepreneurs are self critical and yet very enthusiastic about their work. They expect other employees to do the same. At board meetings they are brutally realistic, about the good work and the bad. They expect to be criticized and to be critical. It comes with the turf. It is how they build their unfair competitive advantages.

=========================================================================================
NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.

QUESTION OF THE DAY: Should I work with an Associate at a venture firm?

"We emailed a Partner at a venture firm about our idea. He had an Associate contact us and request a lot of information. Should we respond to the Associate? How much should we reveal to him?"

That's a question I am often asked these days. A decade ago VC firms had only Partners. The current generation is using Associates as they begin to establish hierarchies and career paths in the second generation of modern VC firms emerges.

Here is how the VC funding process works for many first time entrepreneurs:

1. You email something (one page long) about your idea to a Partner whom you found somewhere on some web page on the Internet.
2. The Partner glances at your email and sees it is in a new space that he has been looking at for a while.
3. He decides to have Kim, the Associate, get more information from you.
4. Kim immediately jumps on the project (one of 99 he is currently working on, 36 hours a day, 8 days per week) and emails you a request for your bplan and "the deck".
5. So what do you do now?
1. You could send him your bplan (if you have one. The chances are you do not. And most likely you do not have a financial forecast of the balance sheet, income statement and cash flow. And you are not sure what "the deck" should be, and you wonder how to value your company to open negotiations with the VC Partner).
2. You could send him an executive summary. But that would reveal a lot of information to a stranger. The VC firm may already have invested or be about to invest in a competitor. Your info will then be used as part of "due diligence" work by the VC prior to investing in your competitor.
3. You could politely email the Associate that "We need to speak with the Partner before revealing further proprietary information." Then on the phone you could investigate any conflicts of interest with the Partner, and you could check him out (to see if he has any hope of understanding your cool idea and if he has what you want in network and contacts to boost your competitive advantage).

I recommend 5.3 at this stage. I have 100% results with deals introduced via Associates: zero money in the bank. I find few others with better track records in this regard. You should speak with a Partner before going further.

Is there a better way to get your money?  Yes, there is. Here is a process that I have found more success with:

1. Research the best VC Partner to work with you for half a decade (to IPO). Find people, Partners, not VC firm. You get money from a Partner, not a firm.
2. Choose 12 VC Partners and rank them top to bottom.
3. Finish your homework: business plan, executive summary, financial forecast and Power Point presentation ("the deck" of PPT slides), Elevator Pitch (30 second and 3 minute versions) and pre-money valuation of your startup (a. the opening offer valuation for negotiations and b. a second valuation, your walk away number). Like the Boy Scouts say it, "Be prepared."
4. Get 100% commitment of your core management team (to come to talk to the VC Partner). That is CEO, VP Business Development, and VP Engineering.
5. Pick the top 6 VC Partners and find people (lawyers, CPAs, entrepreneurs, friends, school alumni) to make a personal introduction to the Top 6 Partners.
6. Get personal introductions to VC Partners. Never contact one of the Top 6 Partners without a personal introduction.
7. Speak to the VP Partner (via the personal introduction) and ask for a date to present to the Partner. That is the purpose of your Elevator Pitch.
8. Keep at least 6 VP Partners active until you have a term sheet (summary of the financing). As soon as one of the Top 6 Partners drops out, substitute one from the remaining list of 12 VC Partners on your long list.
9. Continue until you have 2 or 3 VC Partners eager to offer a term sheet. Get the VCs competing for your deal. Competition is the entrepreneur's best friend.
10. Decide on the one VC Partner with whom you will negotiate a term sheet.

That is how serial entrepreneurs do it. It is the process that is fastest to money (and to the supporting resources that come with the money). There are various hybrid versions of the process, so be wise about how to innovate in your local area, each has its special needs, around the globe, in each country and city.

BOTTOM LINE: Avoid those hard working, well intentioned Associates. Work with Partners. You'll have more success getting your money. You'll be quicker to launch, faster to domination of your new space and more likely to become a gorilla. Understanding and executing this VC raising process is part of your unfair advantage. It is worth the hard work and time it takes to do it right.

CREATIVE STARTUP PEOPLE (Number 8 of a series) : Do you have what they have?

Today I'll move on to the next trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.

======================================================

TRAIT NUMBER 8: Creative people are both traditional and conservative and at the same time rebellious and iconoclastic.

Application: Startup people do not fit a standard mold. They are a mixture of elements that defy stereotyping, are tricky to identify and recruit, but very much worth the effort.

“Generally creative people are thought to be rebellious and independent. Yet it is impossible to be creative without having first internalized a domain of culture. And a person must believe in the importance of such a domain in order to learn its rules; hence, he or she must be to a certain extent a traditionalist. [But] being only traditional leaves the domain unchanged; constantly taking chances without regard to what has been valued in the past rarely leads to novelty that is accepted as an improvement."

"Artist Eva Zeisel says 'This idea to create something different is not my aim, and shouldn't be anybody's aim. Secondly, wanting to be different can't be the motive of your work. No creative thought or created thing grows out of a negative impulse. A negative impulse is always frustrating. And that's why "not like" -- that's why postmondernism, with the prefix of "post" -- couldn't work. No negative impulse can work, can produce any happy creation. Only a positive one.'"

"But the willingness to take risks, to break with the safety of tradition, is also necessary. The economist George Stigler is very emphatic in this regard: 'I'd say one of the most common failures of able people is a lack of nerve. They play safe games. In innovation, you have to play a less safe game, if it's going to be interesting. It's not predictable that it'll go well.'"

A. can be "a fist full" to work with or to manage because he for days he will be found strictly sticking to the science of his technological domain and then one day, without warning, is frustrated and filled with energy that fuels a rebellious rant.

E. votes conservative yet has ideas for application of her domain that are "way outside the box." She dresses between non-controversial and very fashionable. Her Midwest values are clear yet she is comfortable with a menagerie of people at work.

A. and T. are opposites who combine to create a balance between traditional and iconoclastic. They switch roles, depending on circumstances. Together they use the combination of these traits to lead a very innovative new enterprise.

P. wears classical clothing yet thinks up startup ideas that are amazing. He works well with quiet techies and yet in the next meeting is very animated, waving arms to make points and laughing with energy.

BOTTOM LINE: Don't expect it easy to find the people with this combination of traits, or to recruit them. But they are worth their weight in gold. Creativity radiates from them. They inspire the less innovative. CEOs find them very difficult to manage, but find the results of the work of such people to be breathtaking. When you can find them, these people are a powerful element in shaping your startup's culture and adding to its unfair advantage.

=========================================================================================
NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.

Today I'll move on to the next trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.

======================================================

TRAIT NUMBER 8: Creative people are both traditional and conservative and at the same time rebellious and iconoclastic.

Application: Startup people do not fit a standard mold. They are a mixture of elements that defy stereotyping, are tricky to identify and recruit, but very much worth the effort.

“Generally creative people are thought to be rebellious and independent. Yet it is impossible to be creative without having first internalized a domain of culture. And a person must believe in the importance of such a domain in order to learn its rules; hence, he or she must be to a certain extent a traditionalist. [But] being only traditional leaves the domain unchanged; constantly taking chances without regard to what has been valued in the past rarely leads to novelty that is accepted as an improvement."

"Artist Eva Zeisel says 'This idea to create something different is not my aim, and shouldn't be anybody's aim. Secondly, wanting to be different can't be the motive of your work. No creative thought or created thing grows out of a negative impulse. A negative impulse is always frustrating. And that's why "not like" -- that's why postmondernism, with the prefix of "post" -- couldn't work. No negative impulse can work, can produce any happy creation. Only a positive one.'"

"But the willingness to take risks, to break with the safety of tradition, is also necessary. The economist George Stigler is very emphatic in this regard: 'I'd say one of the most common failures of able people is a lack of nerve. They play safe games. In innovation, you have to play a less safe game, if it's going to be interesting. It's not predictable that it'll go well.'"

A. can be "a fist full" to work with or to manage because he for days he will be found strictly sticking to the science of his technological domain and then one day, without warning, is frustrated and filled with energy that fuels a rebellious rant.

E. votes conservative yet has ideas for application of her domain that are "way outside the box." She dresses between non-controversial and very fashionable. Her Midwest values are clear yet she is comfortable with a menagerie of people at work.

A. and T. are opposites who combine to create a balance between traditional and iconoclastic. They switch roles, depending on circumstances. Together they use the combination of these traits to lead a very innovative new enterprise.

P. wears classical clothing yet thinks up startup ideas that are amazing. He works well with quiet techies and yet in the next meeting is very animated, waving arms to make points and laughing with energy.

BOTTOM LINE: Don't expect it easy to find the people with this combination of traits, or to recruit them. But they are worth their weight in gold. Creativity radiates from them. They inspire the less innovative. CEOs find them very difficult to manage, but find the results of the work of such people to be breathtaking. When you can find them, these people are a powerful element in shaping your startup's culture and adding to its unfair advantage.

=========================================================================================
NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.

Today I'll move on to the next trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.

======================================================

TRAIT NUMBER 8: Creative people are both traditional and conservative and at the same time rebellious and iconoclastic.

Application: Startup people do not fit a standard mold. They are a mixture of elements that defy stereotyping, are tricky to identify and recruit, but very much worth the effort.

“Generally creative people are thought to be rebellious and independent. Yet it is impossible to be creative without having first internalized a domain of culture. And a person must believe in the importance of such a domain in order to learn its rules; hence, he or she must be to a certain extent a traditionalist. [But] being only traditional leaves the domain unchanged; constantly taking chances without regard to what has been valued in the past rarely leads to novelty that is accepted as an improvement."

"Artist Eva Zeisel says 'This idea to create something different is not my aim, and shouldn't be anybody's aim. Secondly, wanting to be different can't be the motive of your work. No creative thought or created thing grows out of a negative impulse. A negative impulse is always frustrating. And that's why "not like" -- that's why postmondernism, with the prefix of "post" -- couldn't work. No negative impulse can work, can produce any happy creation. Only a positive one.'"

"But the willingness to take risks, to break with the safety of tradition, is also necessary. The economist George Stigler is very emphatic in this regard: 'I'd say one of the most common failures of able people is a lack of nerve. They play safe games. In innovation, you have to play a less safe game, if it's going to be interesting. It's not predictable that it'll go well.'"

A. can be "a fist full" to work with or to manage because he for days he will be found strictly sticking to the science of his technological domain and then one day, without warning, is frustrated and filled with energy that fuels a rebellious rant.

E. votes conservative yet has ideas for application of her domain that are "way outside the box." She dresses between non-controversial and very fashionable. Her Midwest values are clear yet she is comfortable with a menagerie of people at work.

A. and T. are opposites who combine to create a balance between traditional and iconoclastic. They switch roles, depending on circumstances. Together they use the combination of these traits to lead a very innovative new enterprise.

P. wears classical clothing yet thinks up startup ideas that are amazing. He works well with quiet techies and yet in the next meeting is very animated, waving arms to make points and laughing with energy.

BOTTOM LINE: Don't expect it easy to find the people with this combination of traits, or to recruit them. But they are worth their weight in gold. Creativity radiates from them. They inspire the less innovative. CEOs find them very difficult to manage, but find the results of the work of such people to be breathtaking. When you can find them, these people are a powerful element in shaping your startup's culture and adding to its unfair advantage.

=========================================================================================
NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.

CREATIVE STARTUP PEOPLE (Number 6 of a series) : Do you have what they have?

Today I'll move on to the next trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.

======================================================

TRAIT NUMBER 6:Creative people are also remarkably humble and proud at the same time.

Application: Serial entrepreneurs are both selfless and aggressive. They are skilled at finding “the golden middle” where they balance these opposing traits.

“There are good reasons why . . . these individuals are well aware that they stand, Newton’s words, ‘on the shoulders of giants.’ They respect their domain [and are] aware of the long line of previous contributions made to it, which puts their own into perspective. They also are aware of the role that luck played in their own achievements. And third, they are usually so focused on future projects and current challenges that their past accomplishments, no matter how outstanding, are no longer very interesting to them.”

“Another way of expressing this duality is to see it as a contrast between ambition and selflessness, or competition and cooperation. It is often necessary for creative individuals to be ambitious and aggressive. Yet at the same time, they are often willing to subordinate their own personal comfort and advancement to the success of whatever project they are working on. Aggressiveness is required especially in fields where competition is acute, or in domains where it is difficult to introduce novelty.”

A. speaks in awe of the remarkable predecessors in his field and yet in the next breath is aggressive and self-confident about solving the next big problem. He often scares timid people. Yet he is also self-deprecating.

E. speaks quietly yet with a tone that listeners know signals a strong personality, one that is delivering an important message without an ego that demands attention.

A. and T. look strangers in the eye, speak with excitement about their startup and yet are openly respectful of the person they just met. They discuss with respect leaders of prior startups, regardless of how those new enterprises fared.

P. says fewer words than most in meetings, yet commands instant respect when he speaks in groups. Entrepreneurs respect him for lack of arrogance yet he speaks enthusiastically about the string of world-class new enterprises his firm has helped succeed.

BOTTOM LINE: Creativity comes with finding balance in life. This includes balancing humility with pride. I and other ancient veterans respect the creative startup leaders who are proud of their new enterprises and the people who worked so hard to build the success. Yet they respect the role that luck played. And they give credit to competitors who tried but did not have such great success. That adds to the creativity of their new enterprises and contributes power to their competitive advantage. Then their competitive advantage quickly becomes unfair.

=========================================================================================
NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.

Today I'll move on to the next trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.

======================================================

TRAIT NUMBER 6:Creative people are also remarkably humble and proud at the same time.

Application: Serial entrepreneurs are both selfless and aggressive. They are skilled at finding “the golden middle” where they balance these opposing traits.

“There are good reasons why . . . these individuals are well aware that they stand, Newton’s words, ‘on the shoulders of giants.’ They respect their domain [and are] aware of the long line of previous contributions made to it, which puts their own into perspective. They also are aware of the role that luck played in their own achievements. And third, they are usually so focused on future projects and current challenges that their past accomplishments, no matter how outstanding, are no longer very interesting to them.”

“Another way of expressing this duality is to see it as a contrast between ambition and selflessness, or competition and cooperation. It is often necessary for creative individuals to be ambitious and aggressive. Yet at the same time, they are often willing to subordinate their own personal comfort and advancement to the success of whatever project they are working on. Aggressiveness is required especially in fields where competition is acute, or in domains where it is difficult to introduce novelty.”

A. speaks in awe of the remarkable predecessors in his field and yet in the next breath is aggressive and self-confident about solving the next big problem. He often scares timid people. Yet he is also self-deprecating.

E. speaks quietly yet with a tone that listeners know signals a strong personality, one that is delivering an important message without an ego that demands attention.

A. and T. look strangers in the eye, speak with excitement about their startup and yet are openly respectful of the person they just met. They discuss with respect leaders of prior startups, regardless of how those new enterprises fared.

P. says fewer words than most in meetings, yet commands instant respect when he speaks in groups. Entrepreneurs respect him for lack of arrogance yet he speaks enthusiastically about the string of world-class new enterprises his firm has helped succeed.

BOTTOM LINE: Creativity comes with finding balance in life. This includes balancing humility with pride. I and other ancient veterans respect the creative startup leaders who are proud of their new enterprises and the people who worked so hard to build the success. Yet they respect the role that luck played. And they give credit to competitors who tried but did not have such great success. That adds to the creativity of their new enterprises and contributes power to their competitive advantage. Then their competitive advantage quickly becomes unfair.

=========================================================================================
NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.

CREATIVE STARTUP PEOPLE (Number 7 of a series) : Do you have what they have?

Today I'll move on to the next trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.

======================================================

TRAIT NUMBER 7: Creative people are androgynous and do not fit the mold of rigid gender stereotyping.

Application: Successful startup leaders are not stereotypes, but they are have a lot of extra feelings expressed in their special behavior.

“In all cultures, men are brought up to be 'masculine' and to disregard and repress those aspects of their temperament that the culture regards as 'feminine, whereas women are expected to do the opposite."

'Psychological androgyny is a [very wide] concept, referring to a person's ability to be at the same time aggressive and nurturant, sensitive and rigid, dominant and submissive, regardless of gender. It is not expressed in purely sexual terms and is often confused with homosexuality.”

"A psychologically androgynous person in effect doubles his or her repertoire of responses and can interact with the world in terms of a much richer and varied spectrum of opportunities. It is not surprising that creative individuals are more likely to have not only the strengths of their own gender but those of the other one two."

A. is a walking mass of muscles with a tender heart for people. He talks with strength and quickly senses people struggling with even minor issues of daily living.

E. reaches across oceans to care for employees in other countries who have serious health problems. She conducts meetings with an iron fist and a velvet covered club.

A. begins discussions with softness but when he confronts a big problem, the opposing side sees an aggressive behavior of hard steel. T. laughs and jokes easily and then turns deadly serious when problems pop up that demand total focus.

P. is lively in discussions with entrepreneurs and during celebrations of milestones achieved. Yet he is deadly serious and somber when confronting debilitating actions in his startups.

BOTTOM LINE: Super strong and super soft. Tough minded with a real heart. Those are some of the descriptions you may also have heard expressed about creative people. I recall one of my world-class professors who could terrify students in the classroom and be a gentle as a rabbit in his office with the same people. This special mix of the best of the best from both genders may confuse some. But experienced startup people know it is one of the traits of the finest minds you want in your new enterprise. They are part of the structure of a truly unfair advantage.

=========================================================================================
NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.

QUESTION OF THE DAY: How conservative should our financial forecasts be?

"How conservative should our financial forecasts be? We plan on raising a $500,000 seed round with a venture capital firm."

That is a question I often get. The answer is simple: Do not be conservative, NEVER, NEVER, NEVER!

Why "NEVER"? Because the VCs will cut every sales number in half, will double the cost to get the first product launched and assume you need twice the capital you planned on to get going, regardless of how you try to show them that you are conservative with your numbers.

That is "The Rule of 2" applied to financial forecasts of startups. It is a hard rule, meaning it is always applied and never forgotten (by investors).

Engineers want to construct safe inventions so they build in safety factors. They do the same to their financial forecasts. That is good for building airplanes but bad for raising money for startups.

You want your story (bplan) to be believable (plausible). So the numbers have to be realistic. Yet the numbers have to reflect your optimism (MBAs call this your best case scenario). Entrepreneurs are optimistic. It is in their genes. It never goes away. The glass is forever half full.

BOTTOM LINE: So behave like serial entrepreneurs and forecast with confidence. Get excited with your numbers. Be bold without being arrogant. Go for it! The large valuation, the huge IPO, the dream come true. That is what this is all about. That reflects an unfair advantage manifest in numbers that make people say "Wow!" It is yours to forecast and tell exciting stories about.  Just do it!

CREATIVE STARTUP PEOPLE (Number 5 of a series) : Do you have what they have?

Today I'll move on to the next trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.
========================================================================================

TRAIT NUMBER 5: “Creative people seem to harbor opposite tendencies on the continuum between extroversion and introversion."

APPLICATION:  Balanced people make great startup people . Extremes in behavior are costly to new enterprises.

"Usually each of us tends to be one or the other [extrovert or introvert]. Creative individuals, on the other hand, seem to express both traits at the same time."

"The stereotype of 'solitary genius' is strong and gets ample support from our [research] interviews. As we know from studies of young talented people, teenagers who cannot stand being alone tend not to develop their skills because practicing music or studying math requires a solitude they dread. Only those teens who can tolerate being alone are able to master the symbolic content of a domain."

"Yet over and over again, the importance of seeing people, hearing people, exchanging ideas, and getting to know another person's work and mind are stressed by creative individuals."

"Physicist Freeman Dyson: 'Up to a point you welcome being interrupted because it is only by interacting with other people that you get anything interesting done. It is essentially a communal enterprise. . . .  But when I am writing I have the door shut and even then too much sound comes through, so very often when I am writing I go and hide in the library. It is a solitary game.' "

A. works in the wee hours in the office when few others are there to interrupt. Later the next day or so he arrives later in the morning overflowing with excitement and calls for the engineers to gather to witness his latest creation in the open working area of his startup.

E. can be found during some days at home or in the office on Saturdays inventing and thinking strategically. Weekly she has an all hands company meeting to discuss how everyone's work is progressing and to celebrate achievements by one and all.

A. and T. come and go, in isolation and in communal activities. They are a mix of both behaviors, personalities who inspire a very creative staff without suffocating them. The company culture breeds people who love to be creative.

P. is constantly on the go, reading bplans alone and then meeting with groups of entrepreneurs and his fellow venture capitalists. He is here and then gone, but always in touch, responding on his Blackberry in taxis in New Dehli and in his car in Silicon Valley.

BOTTOM LINE: There is a mix of solo and communal in the creative person in startups. They are eager for times of isolation when focus on one thing is so important. Then they seek groups of others to communicate with. That is why working conditions are so key to great new enterprises. Creative people need places to work without noise or interruption. And they need a working culture that welcomes them as one of the team. There are lots of lessons here for CEOs of startups. When you get this clear in your mind, you'll add a lot to building your unfair advantage.

=========================================================================================
NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.

Today I'll move on to the next trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.
========================================================================================

TRAIT NUMBER 5: “Creative people seem to harbor opposite tendencies on the continuum between extroversion and introversion."

APPLICATION:  Balanced people make great startup people . Extremes in behavior are costly to new enterprises.

"Usually each of us tends to be one or the other [extrovert or introvert]. Creative individuals, on the other hand, seem to express both traits at the same time."

"The stereotype of 'solitary genius' is strong and gets ample support from our [research] interviews. As we know from studies of young talented people, teenagers who cannot stand being alone tend not to develop their skills because practicing music or studying math requires a solitude they dread. Only those teens who can tolerate being alone are able to master the symbolic content of a domain."

"Yet over and over again, the importance of seeing people, hearing people, exchanging ideas, and getting to know another person's work and mind are stressed by creative individuals."

"Physicist Freeman Dyson: 'Up to a point you welcome being interrupted because it is only by interacting with other people that you get anything interesting done. It is essentially a communal enterprise. . . .  But when I am writing I have the door shut and even then too much sound comes through, so very often when I am writing I go and hide in the library. It is a solitary game.' "

A. works in the wee hours in the office when few others are there to interrupt. Later the next day or so he arrives later in the morning overflowing with excitement and calls for the engineers to gather to witness his latest creation in the open working area of his startup.

E. can be found during some days at home or in the office on Saturdays inventing and thinking strategically. Weekly she has an all hands company meeting to discuss how everyone's work is progressing and to celebrate achievements by one and all.

A. and T. come and go, in isolation and in communal activities. They are a mix of both behaviors, personalities who inspire a very creative staff without suffocating them. The company culture breeds people who love to be creative.

P. is constantly on the go, reading bplans alone and then meeting with groups of entrepreneurs and his fellow venture capitalists. He is here and then gone, but always in touch, responding on his Blackberry in taxis in New Dehli and in his car in Silicon Valley.

BOTTOM LINE: There is a mix of solo and communal in the creative person in startups. They are eager for times of isolation when focus on one thing is so important. Then they seek groups of others to communicate with. That is why working conditions are so key to great new enterprises. Creative people need places to work without noise or interruption. And they need a working culture that welcomes them as one of the team. There are lots of lessons here for CEOs of startups. When you get this clear in your mind, you'll add a lot to building your unfair advantage.

=========================================================================================
NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.

Today I'll move on to the next trait on the list for creative people, applying it to startups (see the introductory note at the end of this blog). The quotes are from the book cited in the endnote.
========================================================================================

TRAIT NUMBER 5: “Creative people seem to harbor opposite tendencies on the continuum between extroversion and introversion."

APPLICATION:  Balanced people make great startup people . Extremes in behavior are costly to new enterprises.

"Usually each of us tends to be one or the other [extrovert or introvert]. Creative individuals, on the other hand, seem to express both traits at the same time."

"The stereotype of 'solitary genius' is strong and gets ample support from our [research] interviews. As we know from studies of young talented people, teenagers who cannot stand being alone tend not to develop their skills because practicing music or studying math requires a solitude they dread. Only those teens who can tolerate being alone are able to master the symbolic content of a domain."

"Yet over and over again, the importance of seeing people, hearing people, exchanging ideas, and getting to know another person's work and mind are stressed by creative individuals."

"Physicist Freeman Dyson: 'Up to a point you welcome being interrupted because it is only by interacting with other people that you get anything interesting done. It is essentially a communal enterprise. . . .  But when I am writing I have the door shut and even then too much sound comes through, so very often when I am writing I go and hide in the library. It is a solitary game.' "

A. works in the wee hours in the office when few others are there to interrupt. Later the next day or so he arrives later in the morning overflowing with excitement and calls for the engineers to gather to witness his latest creation in the open working area of his startup.

E. can be found during some days at home or in the office on Saturdays inventing and thinking strategically. Weekly she has an all hands company meeting to discuss how everyone's work is progressing and to celebrate achievements by one and all.

A. and T. come and go, in isolation and in communal activities. They are a mix of both behaviors, personalities who inspire a very creative staff without suffocating them. The company culture breeds people who love to be creative.

P. is constantly on the go, reading bplans alone and then meeting with groups of entrepreneurs and his fellow venture capitalists. He is here and then gone, but always in touch, responding on his Blackberry in taxis in New Dehli and in his car in Silicon Valley.

BOTTOM LINE: There is a mix of solo and communal in the creative person in startups. They are eager for times of isolation when focus on one thing is so important. Then they seek groups of others to communicate with. That is why working conditions are so key to great new enterprises. Creative people need places to work without noise or interruption. And they need a working culture that welcomes them as one of the team. There are lots of lessons here for CEOs of startups. When you get this clear in your mind, you'll add a lot to building your unfair advantage.

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NOTE OF INTRODUCTION TO THIS SERIES ON CREATIVE STARTUP PEOPLE

Creativity.

That's a desired skill that stands out in great startup people: Founders, management, leaders, and employees. I also find it outstanding in the venture community: Angels, venture capitalists, bloggers, media reporters, lawyers and finance staff.

On the less positive side, creative people are also a challenge to manage (often "a pain in the neck" and worse).

I am often questioned about creative startup people, so I've decided to discuss them in a series of blogs, who they are, how to spot them and what to do about them.  The series should be about ten blogs in length, spread out over the next three weeks.

I decided begin with this question: "How creative are you?"

To help you answer that question, I'll list the traits of a creative person and let you compare yourself. I expect you to be surprised (I was).

My source for the list is a mind stretching book by Mihaly Csikszentmihalyi entitled Creativity. He is professor and former chairman of the Department of Psychology at the University of Chicago, and author of several books including the bestseller, Flow. The quoted item that I use are from Creativity.