Monthly Archives: April 2017

How to Start a Business That Doesn’t Suck (and Will Actually Turn a Profit)

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How to Start a Business That Doesn’t Suck (and Will Actually Turn a Profit).
A Modestly Simple Guide to Starting a Business
by Michael R. Clarke

I have not read many books about “how to” for start-ups and usually I am bored very quickly, not to say angry. The worst was probably best-selling, The Lean Startup by Eric Ries, and the best was his mentor, Steve Blank .

I just finished “How To Start a Business That Doesn’t Suck” and I liked it very much. And it is funny (not the way Komisar mentions putting back the “fun” in funerals.com in his great The Monk and the Riddle). It is funny because it is fun to read and it is (really) informative.

If there is one thing I missed with his advice, it is how you price a product or a service. But there is so much good stuff. He begins simply with “Why You Should Definitely NOT (Under Any Circumstances) Start a Business.” [Pages 2-7]. And he is right in warning entrepreneurship is not for everyoneone. You should be passionate, crazy…

But if you are still interested, buy his book. Here are just a few good examples:
– Emphasize Learning Over Results [Page 9]
– Realize, It’s All About Value (Not Effort) [Page 11]
– [Have] A Willingness to Move FAST! (and Look Stupid) [Page 13]
– Don’t Listen to Anybody You Don’t Want (Including Me) [Page 19]

I liked very much his chapter 2 about finding an idea (not ideation!). Focus on things you know a lot about [page 26], you have strengths, and it doesn’t mean you have to be an expert. And Focus on things you are passionate about [page 29].

And then be sure to be specific enough about customer group [page 46] and do not waste time with those “that DIDN’T want a result bad enough” [Page 49]. You cannot open a donut shop, but maybe one for vegans with allergies [Page 54] (though my former, wise boss told me not to focus on Chinese food for dogs…)

I had the feeling of being a guinea pig when I read “Writers are a hidden goldmine of promotional potential. They’re also vain. (Trust me.) So email a writer/columnist in your industry and let ‘em know you liked something they wrote in that obscure trade magazine or blog. Then six months later tell ‘em about your new product. You might get some seriously awesome free promotion out of it!” [Page 71]

About products (chapter 5), I loved that customers do not care about products. They care about feelings… “I’d like to begin this chapter about “creating products and services…” …by telling you how unimportant they are. […]The only thing people care about is the result (and/or feeling) your product or service gives THEM.” [Page 84]

I was curious about his chapter 6, on business plans. I hate business plans but I liked his chapter. “Non-Sucky Business Plan Step No.1: Nail Your Elevator Pitch.” […] “Trust me: if you make a point of pitching 2-3 people a day, for the next 30 days, you will QUICKLY get a sense of what parts of your business idea people like (and don’t like).” [Page 105] And yes Clarke is right and I am wrong: “Just remember…it’s good to know the rules before you break them. And unless you have a compelling reason why ya gotta deviate from the pack, stick to the basics.”

I was also curious about what he has to say about funding, as many people hate investors. And he begins with: “Don’t read this chapter.” [Page 133] “But if I could go back and change just ONE THING in my business-building life, besides NOT fill my garage with Nascar™ fishing lures, it would be to have boot-strapped as many of my business ventures as possible and keep them lean, mean and debt-free clean.” OK right again…Still “But if I can give you one piece of advice, when it comes to prototypes, it’s this: make it LOOK good.” [Page 141]So be lean and beautiful…

I though he forgot covering teams and co-founders, but he did too! “These are not fun topics to discuss. (As a co-dependent, people-pleaser I like to avoid these types of conversations at all costs.) And it cost me thousands of dollars. (And three months of Kaiser therapy co-pays.) Because I entered into partnerships in which we had not established a clear plan for how we’d make decisions in the business. We didn’t establish who owned what when things went to crap. And we didn’t establish clearly how people would be paid if roles changed. (Yikes!) Please, if you bring on partners (even ones you’re related to) take the time to go over this uncomfortable territory.” [Page 162] and later “The key to hiring is not to hire your friends, but to “hire your weakness.” That means your staff should be:
• Hungry
• Supportive (without being a sycophant)
• And good at what you’re not.” [Page 177]

You must also read his chapter 10, about stupid mistakes he made, and you not make… Sometimes Clarke says too much he is not an expert in finance, legal, manufacturing, marketing. He may not be. But he gives damn good advice!

As a conclusion, he gives the final good advice: “the only way to find out if your business — and you as a business owner — has the potential to succeed is to let go of the trapeze you’re holding on to, and reach out for the one right in front of you. […]You learn what your strengths are. (Fast!) And you learn what your weaknesses are. (Even faster!)” [Pages 187-8]

A really beautiful and good book…

The Beauty of Mathematics

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Every year I try to convey what I believe to be the beauty of mathematics when I teach convex optimization at EPFL. I have already mentioned on this blog some beautiful books, popularizing the subject. Some recent readings have convinced me even more so let me try to convince you (again)…

Alain Badiou is a rather surprising choice to talk about mathematics but I love what he has recently written: “This quasi aesthetic feeling of mathematics struck me very early. […] I think of Euler’s line. It was shown that the three altitudes of a triangle are concurrent in a point H, it was already beautiful. Then that the three vertices were also concurrent, at a point O, better and better! Finally, that the three medians were equally so, at a point G! Terrific. But then, with a mysterious air, the professor told us that we could demonstrate, as the brilliant mathematician Euler had done, that these points H, O, G were in addition all three on the same line, which evidently was called Euler’s line! It was so unexpected, so elegant, this alignment of three fundamental points, as behavior of the characteristics of a triangle! […] There is this idea of a real discovery, a surprising result at the cost of a journey sometimes a little difficult to follow, but where one is rewarded. I often compared mathematics later to walking in the mountain: the approaching walk is long and painful, with a lot of turning, slopes; we think we have arrived, but there is still a turning point … We sweat, we struggle. But when we arrive at the pass, the reward is unequaled, truly: this gratification, this final beauty of mathematics, this surely conquered, absolutely singular beauty.” [Pages 11-12]

Another source of inspiration is Proofs from THE BOOK. Written in homage to Paul Erdös, the book begins with the two pages shown above. “Paul Erdös liked to talk about The Book, in which God maintains the perfect proofs for mathematical theorems, following the dictum of G. H. Hardy that there is no permanent place for ugly mathematics. Erdös also said that you need not believe in God but, as a mathematician, you should believe in The Book. […] We have no definition or characterization of what constitutes a proof from The Book: all we offer here is the examples that we have selected, hoping that our readers will share our enthusiasm about brilliant ideas, clever insights and wonderful observations.”

Sometimes I try to remember the most beautiful demonstrations I have “felt” since my high school years.

– The most luminous, the proof of the sum of the n first integers by Gauss

– Two demonstrations of the Pythagorean theorem,

– There would be many others like the infinity of prime numbers, the development in series of Π (), the beautiful concept of duality for convex sets (you can look at a set through its “internal” points or through the dual “external” envelope made of its tangents).

– But the most fascinating for me, remains the use of Cantor’s Diagonal:

[From Wikipedia:]

In his 1891 article, Cantor considered the set T of all infinite sequences of binary digits (i.e. each digit is zero or one). He begins with a constructive proof of the following theorem:

If s1, s2, … , sn, … is any enumeration of elements from T, then there is always an element s of T which corresponds to no sn in the enumeration.

To prove this, given an enumeration of elements from T, like e.g.

s1 = (0, 0, 0, 0, 0, 0, 0, …)
s2 = (1, 1, 1, 1, 1, 1, 1, …)
s3 = (0, 1, 0, 1, 0, 1, 0, …)
s4 = (1, 0, 1, 0, 1, 0, 1, …)
s5 = (1, 1, 0, 1, 0, 1, 1, …)
s6 = (0, 0, 1, 1, 0, 1, 1, …)
s7 = (1, 0, 0, 0, 1, 0, 0, …)
…

he constructs the sequence s by choosing the 1st digit as complementary to the 1st digit of s1 (swapping 0s for 1s and vice versa), the 2nd digit as complementary to the 2nd digit of s2, the 3rd digit as complementary to the 3rd digit of s3, and generally for every n, the nth digit as complementary to the nth digit of sn. In the example, this yields:

s1 = (0, 0, 0, 0, 0, 0, 0, …)
s2 = (1, 1, 1, 1, 1, 1, 1, …)
s3 = (0, 1, 0, 1, 0, 1, 0, …)
s4 = (1, 0, 1, 0, 1, 0, 1, …)
s5 = (1, 1, 0, 1, 0, 1, 1, …)
s6 = (0, 0, 1, 1, 0, 1, 1, …)
s7 = (1, 0, 0, 0, 1, 0, 0, …)
…
s = (1, 0, 1, 1, 1, 0, 1, …)

By construction, s differs from each sn, since their nth digits differ (highlighted in the example). Hence, s cannot occur in the enumeration.Based on this theorem, Cantor then uses a proof by contradictionto show that:The set T is uncountable.

But let me add another extract from Badiou (page 82): “I call truths (always in the plural, there is no “truth”) singular creations of universal value: works of art, scientific theories, policies of emancipation, love passions. Let us say to cut short: scientific theories are truths concerning the being itself (mathematics) or the “natural” laws of the worlds of which we can have an experimental knowledge (physics and biology). Political truths concern the organization of societies, the laws of collective life and its reorganization, all in the light of universal principles, such as freedom, and today, principally, equality. The artistic truths relate to the formal consistency of finite works that sublimate what our senses can receive: music for hearing, painting and sculpture for vision, poetry for speech … Finally, the love truths concern the dialectical power contained in the experience of the world not from the One, from the individual singularity, but from the Two, and thus from a radical acceptance of the other. These truths are not, of course, of philosophical origin or nature. But my goal is to save the (philosophical) category of truth that distinguishes and names them, legitimizing that a truth can be:
– absolute, while being a localized construction,
– eternal, while resulting from a process which begins in a certain world and therefore belongs to the time of this world.”

The Paris Innovation Review about Start-ups

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Once again the Paris Innovation Review (formerly ParisTech Review) publishes a series of excellent articles, this time dedicated to start-ups. These are:
– Companies like others? A sociological survey of French startup. http://parisinnovationreview.com/2017/03/21/sociological-survey-french-startups/
– Startups Employees Perks & Incentives – 1 – Wages. http://parisinnovationreview.com/2017/03/23/startups-employees-perks-incentives-1-wages/
– Startups Employees Perks & Incentives – 2 – Equity. http://parisinnovationreview.com/2017/03/23/startups-employees-perks-incentives-2-equity/

The article about the sociology of start-ups shows (in fact confirms) interesting things. I will let you read and jump directly to some of their concluding points: “Some of these results can provide pause for thought for public policies aimed at fostering startup creations. The survival of these businesses seems relatively unpredictable, both for the people involved (entrepreneurs, employees, support bodies) and for analysts who observe them from the outside. We have interpreted this unpredictability as the result of two causes. The first is the selection operated by the support agencies, a selection that has largely guided ours, since a claim of technical innovation, which was our main criterion for inclusion in our survey, is generally associated with subsequent monitoring and aid by these agencies. One might think that a number of projects considered very unrealistic could have been excluded by these services, which in fact limits the variety of the companies we studied. The second, more fundamental cause is the very variety of factors that make or break businesses: outlets that emerge and disappear along with the flow of global economic changes, strategies of major industrial groups and initiatives by competitors, internal conflicts, resources which become abundant or scarce depending on the context, financial problems which are difficult to anticipate, etc. This may encourage governments and public agencies to foster a much greater number of projects and not merely be satisfied with those that they consider to be the most promising. Watering a whole field is often more efficient than dumping all the available water on but a few square meters… Securing solid support by authorities, companies that are deemed innovative are doing better than the others if one considers their survival rate. Perhaps it would not be absurd to offer an equivalent support to businesses in other economic circles.”

The incentive topic is one I have covered at length as you may see with my Slideshare link below. On the salary side, I fully agree with their claim: Be as objective as possible: this ensures fairness and acknowledges a basic truth: people talk. On the equity side, know the rules of vesting and cliffs, and build a granting mechanism based on experience of employees and layers of early and late comers, i.e. the same number of stock options could be granted per year (so more shares to early employees as there are more employees per year when the company grows. If it does not, stock options are probably worthless…)