Tempup artists

Tech is seeing its equivalent of the 1960s sexual revolution. Though once taboo, it’s gradually becoming acceptable for a startup to be like a hookup.

You aren’t always interested in forming a long-term relationship, and you don’t want all the commitment, strings, compromises and messiness. Sometimes you’re just in it for a quick sale, and building what I’d call a tempup. The tempup is all about testing a hypothesis quickly, and generating a small but meaningful return for the founders.

But the investor ecosystem hasn’t fully accepted this new normal yet. Tempups still need to conceal their intentions. Even if they truly just want a hookup, they need to use the language of long-term relationships to attract capital. In tempup rhetoric, every market opportunity is still in the billions, every financial forecast is for 3+ years, and every funding discussion is about bringing on the ‘right partner’.

As with sexual liberation, I’ll reserve judgment on whether tempups represent the moral decline of civilization, or the right step forward to a more flexible, accepting society.

To me, there’s a more pressing question: when will we start comfortably talking about reality?

Yesterday, in announcing his new $50m fund for 500 Startups (congrats btw!), Dave McClure asked “why hasn’t VC scaled?” and my colleague and mentor Roger quickly asked “why should it?” in response.

Something about that conversation, and the discourse around lighter, cheaper-to-build startups misses the mark for me. I believe that Roger and Dave are in two completely different businesses. True, their purposes sometimes converge — a tempup, like a hookup, can occasionally become a meaningful long term relationship. But the forms, functions, and scaling characteristics of venture capital firms are designed around the institution of startup marriage, which has a singular purpose. Programs like 500 and many of the startups that join them have different goals in mind.

That trend alone is not alarming to me. Neither business is better or worse, but they are just different and should be acknowledged as such. What’s more worrisome is rise of a “seduction community” in startup-land, whose objective is to ‘hack’ the signals in VC courtship to conceal tempup ambitions.

Before I explain what I mean, let’s review what’s brought about the revolution. Like sexual liberation, it’s sparked by social change:

  • Tech is exiting the growth stage and entering the early phases of maturity. Big, successful companies like Google are cash-rich, but suck at creating and testing new ideas and entering new businesses.
  • Talent in the information economy is difficult to find and assess through interviews, and competitively hard to attract.
  • Starting a company is largely democratized through open-source tech stacks, variable cost pricing for infrastructure, approachable programming languages, and easy distribution on ubiquitous platforms (browser, app stores, social).

These changes make today’s market a perfect storm for building tempups. It’s cheap and easy to start, and your FNAC tempup has a decent chance of getting bought quickly. Your small hypothesis test about a market leads to great evidence that a new product has potential and your team has the right stuff. It can be a win-win for companies and entrepreneurs, and there’s no shame in that at all.

A new breed of investor is evolving to meet this need. They’re structurally set up to fund lots of similar companies and okay with the ‘relationship’ being shorter-term. Dave related it to making Model T’s, and I couldn’t agree more. Today’s more, shall we say promiscuous founders may be less romantic than the companies of times past, but as an investor, there’s money to be made in these tempups too. Just like satisfaction can be found in both hookups and long term relationships. Different strokes for different folks.

Unfortunately, the language of entrepreneurship is set up around romance, and investors still mostly look for the signals that a company is going for a grand slam rather than a base hit. And that’s where it gets dirty. Enter the tempup artist.

Remember back in 2005 when an entire generation of guys obsessed over Neil Strauss’ book The Game? It was about his forays into the seduction community, a shadow world of “pickup artists” who hacked the signals of social value and attraction to convince women to accept their advances. Men attended a bootcamp, where they were trained on all the right body language, social proofing, and psychological tricks to get women to chase and fight for their attention.

Sound familiar? I don’t think it’s intentional, but accelerators have taken on some striking parallels to seduction bootcamps. You work in an intense environment, refining your pitch into a ‘routine’ with all the right signals – exponential curves (peacocking), paying customers, angels and advisors for social proof, and war stories about how you got out of the building and pivoted to prove your resilience. You demo, work the room, and show that you’re the real deal and going for a grand slam. You make yourself artificially scarce, and go for the holy grail: a big-name VC putting their money in unprotected at a high price.

Sure, all courtship involves putting the best foot forward. Everyone has their game, for sales and deals and jobs, just as much as for sex and love. Dancing the dance is fine when there’s a shared long-term objective. But tempup artists are insidious, in a kind of sociopathic way, when they know their companies aren’t remotely in it for the grand slam. TUAs wrap their true objective (a quick, life changing exit) in the signals and qualities that indicate almost the exact opposite objectives.

I believe it’s high time to talk openly about those true intentions, and make sure all parties involved are playing for the same reasons. Of course, I know perfect clarity is tough to ensure because motivations change — you may think you want long-term right now and later decide it was actually just a hookup. So the best we can ask for is honesty at all times. Things get messy when expectations aren’t voiced actively and often.

So when Dave asks why VC hasn’t scaled, what I hear is “why hasn’t everyone adjusted to tempups”. And I think the answer is that, like hookups, they’re not right for everyone. The values and likely outcomes are different.

Certainly more investors will enter the market over time, with funds structured to have the same goals as tempup founders. They’ll fund thousands of startups like Dave envisions, and be okay with most of them going after small markets and smaller but faster returns.

But in order for that to happen, we need to change our discourse and acknowledge the quantum differences between these strategies. Just like there’s room for both hookups and serial monogamy, tempups and long-term ventures can coexist in the world. So long as we can discuss them openly and make sure the objectives are consensual.

Via xkcd.

Time to honesty

You get back, energized from the conversation over a great meal, only to find a glob of food stuck between your teeth. When you’re finished being mortified, the questions set in: did they notice? why didn’t anyone say something?

It might be tempting to question the character of the people involved, or the quality of those relationships. After all, a good person would discreetly call your attention to your teeth, so you could take action and avoid embarrassment. Instead, were they laughing inside the whole time? Or thinking of telling you but finding it too awkward?

Take a step back and invert those questions. Did you give people the impression that you’d be embarrassed? Or that you’d overreact to someone calling it out? Perhaps they didn’t feel it was their place to tell you.

Whether a morsel in your teeth, a crippling character flaw, or a terrible business decision, in every facet of your life peoples’ willingness to point out your mistakes is crucial to your success.

At what point does someone cross the arms-length boundary of formality and feel comfortable revealing the hard truth?

I call this your time to honesty, or TTH. How long this takes is partly a function of social norms, but mostly a function of how approachable, laid back, and open to feedback you seem.

It turns out, having a dangerously long TTH is common among executives and middle managers. As you rise in formal rank, be it in your business or your social circle, you begin to seem “other” and distant. People become wary of offending you or overstepping the bounds of their ranks, particularly to comment on your limitations or mistakes.

This has an isolating “death spiral” effect — the more important you become, the more you become reliant on your longstanding friends to be real with you. And as you rely on these confidants more, you perceive new acquaintances to have their guards up, and they perceive the same from you.

It’s hard to imagine that you’re complicit in your own blindness to faults; after all, it’s being imposed by others restraining their feedback. You might indulge in rationalizing your own behavior and shifting blame.

But ultimately, the fault is your own. As you get older, more important, and more set in your ways, you need to proactively counter this effect every day by leaning in and making yourself easier to approach with bad news.

The lean-in is a subtle habit worth practicing in every conversation. Sometimes it’s making a joke about yourself to demonstrate that you don’t take yourself too seriously. Or showing a chink in your armor, allowing others to see you as sometimes weaker than you’d like them to know; for example by acknowledging a difficulty, lack of skill, or missing knowledge. Anything to show that as your own world’s emperor, you don’t mind being told the new clothes are missing altogether.

Counterintuitive, perhaps. It’s the exact opposite of the impression management we’ve learned to maintain for every public action. But others will only admit your imperfections when they can see that you already know yourself to be imperfect.

Pride may cometh before the fall, but that’s a spurious relationship. It’s really perceived pride that leads to fault-blindness. The only way to limit that perception is to systematically test it and break it down through actions.

So the next time you feel a seed stuck in your teeth, don’t be so quick to pick it out. Count your TTH, and check your posture. You might need to lean in a bit.

Steve

June 25, 2009, and October 5, 2011.  What those two dates have in common is that I’ll remember exactly where I was, forever.  2009 was Michael Jackson.

And 2011 brought Steve.

[youtube http://www.youtube.com/watch?v=TahH7B_aUZc]

The song playing in the background couldn’t have been more appropriate: Speed of Sound, by Coldplay.

I was absolutely frozen in place by the lyric “if you never try, then you’ll never know“.

Steve was a brilliant man, but I had a more mixed relationship with him. I was a late adopter to the Apple craze, and resisted probably longer than anyone else.

Almost exactly a year ago, I bought my first Apple product — an iPhone 4, on August 8, 2010. Prior to that, I had never owned another Apple product, nor used any of its software, including iTunes.  I found it too unbending to my desires.

In Steve’s world, functions were stripped of excess to their core. In my world, having choice meant better fit, and choice meant more functions. So I resisted.

But as I reflect today on how deeply my iPhone has embedded itself in my life over the last year, I better understand how Steve’s vision has inspired and improved lives of millions.

Simply put, Steve stood for perfection.  He wouldn’t release something that hadn’t reached it. My iPhone experience was so dramatically better than any phone I had previously owned that I now have trouble imagining what life was like before it.

Now, as we all collectively ponder Steve’s legacy, I find more understanding of his management style. He was a notoriously difficult leader, with an extremely strong sense of vision, and an unwillingness to settle for anything less than what he imagined possible.

This makes more sense in context of his passing away.  Steve had no time for imperfection.  He lived every moment as part of his legacy.  He lived as a man would when he knew he was running out of time.

We often pay lip service to living like it’s your last day, and think up bucket lists for ourselves in terms of things we might like to experience before we die. But how often do we internalize them?

Steve’s bucket list contained entire markets and categories of things we interact with.  And he lived with the fire of someone who knows he’s almost out of time. Yet he did that for years, instead of months.

So he checked off most items in his bucket list, and changed the world over and over again.

Tonight I can only echo the thanks that many others have given to Steve for inspiring us all. “Change we can believe in” matters most when the change actually happens. And change he did.

Jobs: a roundup

Yesterday the east coast had an earthquake, but today the entire world was shaken by the news that Steve Jobs stepped down as CEO of Apple. He’s going to continue as chairman, but retiring from daily operations.

He leaves at a time when Apple is truly at its height. He’s disrupted some of the biggest industries in the world: phones, PCs, music, and publishing. Apple’s products have dominant marketshare in markets they almost entirely mainstreamed – smartphones, tablets, ultra-thin computers. And they’re on the verge of launching major product upgrades in the coming months, and maybe even more.

An investment in Apple in 2006 would have 4x return to the beginning of this year, and Steve leaves at a time when Apple became the most valuable company in the world by market cap (exceeding ExxonMobil).

So, here’s another roundup of the best articles about Steve I’ve found around the web today:

News

NY Times: Jobs Steps Down at Apple, Saying He Can’t Meet Duties

WSJ: Jobs Quits as Apple CEO

Lists

AdAge: The 10 Best Ads to Come out of Steve Jobs’ Reign at Apple

GigaOM: Steve Jobs in Magazine Covers throughtout the years

WSJ: Steve Jobs’ best quotes

Wired: Money Quotes, Steve Jobs Style

Reflections

Robert Scoble: A Front Row Seat to Steve Jobs’ Career

Vic Gundotra: Icon Ambulance

Marc Hedlund: You’re The Ones

James Altucher: 10 Unusual Things I Didn’t Know About Steve Jobs

Dharmesh Shah: 16 Brilliant Insights from Steve Jobs 1997 Keynote

Omar Malik: Steve Jobs and the sound of silence

Josh Bernoff: Steve changed the world five times

Walt Mossberg: The end of an era

Steve himself

And of course, the famous Stanford commencement speech: Text and Video

These paint a picture of Steve in the aspects that I most admire. Yes, he has incredible vision and obsessive dedication to quality. But he is also very humble, and a thinker, and an inspiring leader.

What most amazes me today is how Steve’s managed to even touch my own life. A sworn anti-fanboy from my first contact with a bright green iMac in fifth grade and its one-button mouse. Even I am using an iPhone today, begrudgingly love it, and will be buying the next one. Bravo, Steve.

This post is mostly for posterity, and to remind myself at some point in the future to Think Different.

Earthquakepocalypse

Given today’s earthquake, I’m going to commemorate it by rounding up my favorite tweets and posts.

  • The building I am in was just told to evacuate. I just evacuated my bowels. 
  • Did the Internet bubble just burst? 
  • Breaking: Remaining East Coast VCs make plans to move West. Last remaining reason to avoid San Francisco just eliminated.
  • There was just a 6.0 earthquake in Washington. Obama wanted it to be 3.4, but the Republicans wanted 6.0, so he compromised.
  • There will be a benefit concert for NYC earthquake survivors. Except you have to be on the list to get in.
  • RIP Jenga towers everywhere.

xkcd made a great comic about the speed of tweets:

And of course, the winner is this post, which I’ll copy here:

Earthquakepocalypse

“Thanks to all of you for your kind words of support, as we look to recover from the devastation of today’s quake!”

Failure of compromise: the debt ceiling

While reading Howard Marks’ excellent memo on the debt ceiling crisis, titled “Down to the Wire,” I was struck by how deeply the political issue here relates to a core human behavioral problem called irrational escalation of commitment.

Escalation is most commonly seen in the context of financial investments.  For example, gambler’s fallacy leads players to double-down on their original bets to make lost money back. And businesses continue spending money on dying product lines because they’ve already invested so much in manufacturing. It’s usually summarized by the phrase “throwing good money after bad.”

But here we see escalation in a different context: public credibility. Politicians know the consequences of their legislative actions, such as fighting spending cuts and continuing unhealthy tax rebates, but have already publicly taken position in favor of those actions.  So they continue fighting tooth and nail, entrenched in their prior positions, to avoid sacrificing political capital.

It’s perfectly summarized by page 7 of the memo:

There’s another important difference of opinion; which is more important, adherence to avowed principles or action to address the short-term problem? Many politicians have made public pronouncements that render the two mutually exclusive.

As always, acknowledging that you’ve made a mistake and your prior public pronouncement was misguided is a tough pill to swallow.  It requires character, intellectual honesty, and the willingness to submit yourself to questioning. Sadly, politicians lack many of these skills.

Fox-n-hedgehog1

Or perhaps I’m being too harsh on politicians. After all, politicians are only marketers at their core, and respond to the demands of their consumers. So maybe voters are really at fault here. In Isaiah Berlin’s conception, people prefer “hedgehog” thinking over “fox” thinking.  The voting public likes its politicans to be firm, resolute, and predictable. Learning and owning up to mistakes are too scary to handle.

I should hope this will change in the near future.  As Marks says, “Repairing the situation will require difficult decisions and great sacrifices, especially on the part of lawmakers required to vote for unpopular solutions.”  And I’d prefer not being forced to switch countries.

Value pumps

Building a Better Value Pump (via Eugenia Lee)

This article explored how, in order to create a social enterprise with sustainable value to the poor, it should also make the poor more valuable to society. In other words, the best social enterprises are platforms that increase the poor’s own productivity.

Personally, I’ve always liked any approach that involves investment in infrastructure.  It seems like infrastructure, and access to that infrastructure, is what’s lacking in the equation for a lot of people in poverty.  The ‘fishing rod’ in the classic metaphor.

This raises some interesting thoughts:
– How can we make it seem less sketchy to transact with businesses operated from poor environments?  Can we empower entrepreneurs living in poverty?
– Can financial investors make smart investments ahead of growth in poor economies?  How can we make those types of investments attractive?
– What role can crowdsourcing play, where the crowd is the people who are being helped?

Diminishing returns to work

How Many Hours Should you be Working? (via Pawel Hytry)

– There’s a point of diminishing returns to work, and it’s closer to 40 hours a week than we’d think
– Meeting with employees is productive; meeting with consultants or outsiders is not

But how actionable is this?  While I completely understand diminishing marginal productivity, it’s really difficult to observe in the moment.  How can we build in triggers to know when our productivity is going down?

The curse of high achievers

HBR – Managing Yourself: The Paradox of Excellence

What I learned from this…

  • Use your support network and ask for help as soon as you’ve reached the point of diminishing returns
  • Ask for feedback even when the process is painful
  • Practice vulnerability.  Acknowledge publicly every time that you don’t know something or that you’ve made a mistake.  Start among friends to build your confidence, and expand out from there
  • Force yourself to speak up at every meeting.
  • Grant yourself permission to be mediocre, and have attention directed at that mediocrity.  It’s the only way you’ll gain new skills and stretch.

Doing the right thing poorly is better than doing the wrong thing well.

Why can’t companies foster this culture correctly?  One quote in the article notes, “My boss wants innovation as long as it’s done perfectly the first time.”  That type of hypocrisy is what leads to a stifling culture that claims to believe one thing but actually supports another set of behaviors.

I think this article is further pressing at the notion of “intellectual honesty”.  One of my favorite interviews (Dominic Orr of Aloha) discusses how important it is to build a culture of being vulnerable, as the DeLongs mention in the HBR article above.