the essence of entrepreneurship is about
making meaning this mission statement is
going to be good for the shareholders
for the employees for the customers if
HR is there it’s going to be good for
the whales and the Dolphins gonna take
care of everything you should not be
afraid of polarizing people I’m not
saying you should go and intentionally
piss them off using your Rockstar
roommate who happen to be with you the
weekend you got drunk and decided to
start this pet food company it’s not the
crappy logo that your sister-in-law
designed for free you need to tell a
story why did you start eBay why did you
start Google yeah you know the Latin
saying oh I think therefore I am for an
entrepreneur it is a pitch therefore I
am don’t scale too fast I have never
seen a company die because it could not
scale too fast for you to reach critical
mass with a product it’s not because the
Wall Street Journal of the New York
Times blessed your product it’s because
lonely boy 15 embraced your product at
this point in my life you may have
noticed I really don’t give it what
people think he’s a Silicon Valley
marketing executive he was one of the
Apple employees originally responsible
for marketing their Macintosh computer
1984 in 2015 he joined the Wikimedia
Board of Trustees he’s guy kawasaki and
here his top 10 rules for success the
first thing I figured out and learns
sometimes the hard way about
entrepreneurship is that the core the
essence of entrepreneurship is about
making meaning many many people start
companies to make money the quick flip
the dot-com phenomena and I have noticed
in both the companies that I’ve started
and funded and been associated with that
those companies that that are
fundamentally founded to change the
world to make the world a better place
to make meaning are the companies that
make a difference they are the companies
to succeed my naive and romantic belief
is that if you make meaning you’ll
probably make money but if you set out
to make money you will probably not make
meaning and you won’t make money so my
first thought is you need to make
meaning that should be the core of why
you start a company there are three ways
to make meaning first is to increase the
quality of life my background is a
Macintosh division of Apple Computer
then I can tell you the total Sergent e
that we were not motivated by making
money we were motivated by changing the
world to make people more creative and
more productive we were trying to
increase the quality of life for the
Macintosh user and I was a great
motivation it kept us going through many
many difficult periods we were waking up
in the morning thinking how we could
change people’s lives a second way to
make meaning is to right or wrong you
know that this fish is going to die
after jumping out but to write a raw
means that you find something that’s
wrong in the world or you notice
something that’s wrong around you want
to fix that this might be particularly
applicable to not-for-profits where you
know there’s pollution or there’s crime
or there’s abuse and they just their
very core is to end that wrong and the
third way to make meaning is to prevent
the end of something good that you see
something beautiful something wonderful
and you just can’t stand the fact that
it’s been eroded it’s being changed it’s
being ruined so I ask you as you start
your companies your not-for-profits your
churches your schools whatever you’re
starting
please have one of those three
motivations one or more of those
motivations if you don’t have any of
those motivations I suggest that you
rethink what you’re doing because there
are too many MBAs in the world and I
have an MBA because there are too many
MBAs and too many have you have worked
for Bain or McKinsey or Arthur D little
somehow you think that you should make a
mission statement and the way you make a
mission statement is typically this you
go on a 2-day off-site with the
executive team the executive team the
first day of this off-site you’re
outdoors you’re at the ritz-carlton Half
Moon Bay for example because that’s why
you go on these off sites so you go to
the ritz-carlton Half Moon Bay and
there’s a facilitator and the first day
you create these cross-functional teams
and and the facilitator says all right
one of you from each team come to the
front everybody else get behind him or
her turn around
shut your eyes open up your arms and
fall backwards into their arms because
we’re going to build trust you’re going
to learn that your teammates are there
for you so turn around shut your eyes
spread your arms and fall backwards so
after one day of this the
second days you’re out in a small room
there’s a bunch of white papers you know
those tablets of papers and there’s a
facilitator who knows nothing about your
industry and that facilitator is going
to help you craft this mission statement
and this mission statement is going to
be good for the shareholders for the
employees for the customers if HR is
there it’s going to be good for the
whales and the Dolphins we’re going to
take care of everything and what happens
is you get a mission statement like this
the mission of Wendy’s is to deliver
superior quality products and services
for our customers and communities
through leadership innovation and
partnerships now
don’t get me wrong I love Wendy’s I have
four children by definition I like
Wendy’s okay but I have to tell you in
all the times that I’ve eaten Wendy’s it
has never occurred to me that I am
participating in something involving
leadership innovation and partnerships I
dare say that if you ask
Trixie or Biff working at Wendy’s what
is the mission statement of Wendy’s not
one could repeat this I also dare say
that not even the founder of Wendy’s
Dave Thomas could repeat this I know
that’s not true because he’s dead this
is a useless kind of statement it’s too
long it’s not unique it’s not memorable
as an entrepreneur someday when you have
15,000 employees you’re trading on
NASDAQ and you spend two million dollars
to build your annual report fine make a
dumb ass mission statement like this but
right now in the entrepreneurial stage I
submit to you you should create a mantra
three or four words a mantra ironically
entrepreneurs who should have this bias
toward action often can’t get going they
are victims of engineering creeping
elegance where they always want to add
one more feature or they’re marketing
people or and they they need that
external validation they want to prove
that there’s a market they have to read
one more consulting study or they’re
trying to get a focus group to prove
that the product works they need one
more focus group one more test suite one
more something a bunch of crap so here’s
three recommendations about getting
going the first is you got to think
different as an entrepreneur your goal
should not be to do something 10 or 15
or 20 percent better it should be to do
something ten times better it should not
be a slightly better Apple two it should
not be slightly better ms-dos it should
be a completely different operating
system think their friend build the
product or service that you love I
moderated a panel on Saturday where a
venture capitalist from Sequoia was on
the panel and he said that the best
source of entrepreneurial
for Sequoia the best places and
companies to fund are people under 30
years old who are solving a personal
problem
hence Google can see ah who has an Cisco
that’s the kind of sweet spot for
venture capital for don’t just do the
15th thing think different
the second point about getting going is
do not be afraid of polarizing people
you know many people are afraid to
polarize people that my god some people
might not like what we do
and so they try to create this product
or service that everybody likes that is
impossible you should not be afraid of
polarizing people I’m not saying you
should go and intentionally piss them
off but you should not be afraid of
polarizing people the ideal situation is
where some people really love your
product and some people hate your
product but very few people feel sort of
disinterested or or neutral towards your
product you know something like a Toyota
Scion xB you either love that design and
you think it’s very cool or you think
that’s a refrigerator on wheels but
there is nothing in the middle
it’s nothing in the middle same thing
with a Mini Cooper same thing with the
Murano same thing with a McIntosh same
thing with the harley-davidson either
love the product or hate the product but
don’t be afraid to polarize people and
the third point is you need to find a
few soulmates I think there’s a vast
myth about entrepreneurship that it’s
Steve Jobs changing the world
single-handedly Bill Gates changing the
world single-handedly richard branson
changing the world single-handedly Anita
Roddick changing the world
single-handedly Mary Kay changing the
little single-handedly it’s not true
it’s not true you need soulmates you
need I think ideally three people in a
founding team because when one person
falls down needy the other two people to
pick you up and when one person is cold
you need other people to hug you and
keep you warm it’s very hard to keep
yourself warm it’s very hard to hug
yourself all right
so find the soulmate for Bill Gates
there was Steve Ballmer for Steve Jobs
there was Steve Wozniak find a few
soulmates that balance you off that keep
you warm that’ll pick you up
number one then entrepreneurs use all
the time and if you’re going to pitch me
you better avoid this mistake which is
to take this big number and multiply by
a mere 1% so this is how the pitch goes
pretend you go back in time 15 years ago
and you’re pitching that’s calm so pets
calm was a dot-com startup it’s so dog
food online ok so this is the pitch
there are 300 million Americans
these Americans roughly one in four on a
dog 75 million dogs each dog eats two
cans of dog food per day 150 million
cans of dog food per day and this is not
b2b this is Busey or more accurately b2d
because dogs dogs do not take the
weekend off dogs eat every day right so
total addressable market is one and a
half million cans of dog food per day
excuse me 150 million cans of dog food
per day times 365 now let’s be
conservative because that’s a favorite
of entrepreneurs let’s be conservative
let’s pretend that we can get a mere 1%
of this market you know how hard could
that possibly be to get a mere 1% of 150
million cans of dog food per day so 1%
of 150 million cans of dog food per day
you don’t need to go to Stanford to
figure out that’s one and a half million
cans of dog food per day one and a half
million cans of dog food per day let’s
say you conservatively make a buck for a
cat that’s a million and a half dollars
per day one and a half million dollars
their gross for every times 365 equals
500 million oliver’s this conservatively
speaking worst case ok
do you not hear this kind of pitch every
freaking day of the year right right so
that’s what people do and you know it’s
total bull it’s total bull because you
cannot address that kind of market this
is saying you know how hard could it be
to get 1% of the people in China to
drink my soda well that’s not so easy to
get 1% of people in China to drink your
soda so the solution for this is that
you calculate from the bottom up ok so
if you use the mistaken way you
calculate one and a half million cans
per day conservatively speaking let’s go
from the bottom so from the bottom using
your Rockstar roommate who happen to be
with you the weekend you got drunk and
decided to start this pet food company
and because you know you have no
technical skills and he has one class in
programming he’s the CTO now ok
you know I can tell you you you’re
familiar with this practice right right
okay so CTO and CEO and so this is how
you do a bottom-up analysis you say all
right so with my rock star you know PHP
Ruby expert roommate he’s gonna write
this great or she’s gonna write this
great website and but let’s just think
like so website the selling pet food
online let’s figure that we can get
50,000 unique visitors a month let’s be
a little conservative 50,000 and of
those 50,000 people let’s say that using
the same conservative number you know 1%
of the people buy dog food they actually
buy dog food right so so 1% of 50,000 is
500 right all right now so 500 so 500
people buy these 500 people they buy a
case so it’s 500 times 30 so now we’re
at 15,000 so like okay so we have 15,000
cans of dog food per day let’s you know
let’s round it up a little so maybe we
get to 15 maybe get to 20,000 but 15 or
20,000 is a long way from one-and-a-half
million right so using the top-down
analysis you come up with a conservative
one and a half million per day using the
more conservative you know bottom-up
analysis you come up with 15,000 per day
let me tell you something you are going
to be much closer to 15,000 per day than
one and a half million and that’s how
you prevent this mistake you have to be
realistic you can’t just go from this
big old number and try to scrunch it
down using conservative estimates you
need to start from the bottom can you
get 50,000 people to visit your website
a day will 1% actually buy the dog food
that’s a much more relevant way so
that’s how you avoid this mistake and
the results will always be closer to the
bottom-up analysis than the top-down in
all my years of working with
entrepreneurs I have never seen a
company meet their
natural projection never it never
happens the fifth thing is to weave a
map Matt stands for milestones
assumptions and tasks I happen to love
ice hockey I happen to love ice hockey
and there are two of my friends here
from ISO aces where I play ice hockey in
Redwood City and one of the pleasures of
ice hockey is to be the first person on
the ice after the Zamboni because after
the Zamboni has shaved the ice the ice
is just pure smooth virgin ice no cuts
no ruts it’s a beautiful thing and when
you skate you can see exactly where your
skated it’s a lovely feeling it’s like
being the first person down the mountain
and skiing or snowboarding a new company
is largely like that it’s a pure sheet
of wonderful smooth ice there’s no pain
in the ass customers who are trying to
get a free upgrade there’s no stupid
employees you made a mistake hiring
there’s not the crappy commercial real
estate that you paid 15 bucks a month
for in the height of the dot-com
phenomena there’s not the crappy
furniture you bought at Office Depot one
day it’s pure pure wonderful ice it’s
not the crappy logo that your
sister-in-law designed for free you’re
starting from scratch it’s beautiful
beautiful the Zamboni just left the ice
when you have that situation it’s very
difficult to prioritize this is about
prioritization the first thing you need
to do is come up with a handful of
milestones milestones are things like
finishing the design shipping the
software when you’re starting a company
you often think my god we could either
finish the design today or go order
stationary seems like they’re both about
the same importance it’s not true a
milestone is something that you would
call up your spouse and say honey
today we shipped that’s very different
than calling up your spouse and saying
honey
today we ordered stationary
that’s not quite the same the next thing
you do is you write down the assumptions
of your company how many sales calls can
you make per day what’s the customer ROI
how much does it cost to install our
software or product these assumptions
change your business model very few
companies or startups write them down
and test them write them down and test
them and the third thing is then to do
tasks the tasks are the things that help
you either accomplish a milestone or
test an assumption but the priority for
an entrepreneur is milestones
assumptions and tasks ma t you need to
tell a story most people particularly in
technology are horrible at telling
stories
you need to tell a story why did you
start eBay why did you start Google why
did you start Apple you can even make up
the story after the fact okay one of the
great legends of Silicon Valley is that
eBay was because pyramid yars girlfriend
wanted to sell Pez dispensers okay the
truth is that he really wanted to create
a perfect market where demand and supply
cross each other the perfect market and
to have a perfect market you need to
eliminate geography the story of the PEZ
dispenser is after the fact
now I’m not encouraging you to lie but I
am telling you a story is much more
powerful when you launch yu2 in a garage
knew there was a better way to search or
you wanted to bring personal computers
to more people or you wanted a place
where people could upload video of
people dropping Mentos into diet cokes
you know whatever it is tell a story the
next thing is the art of pitching
pitching is usually used to raise money
but pitching more generically is about
the process of seeking agreement you can
seek you can seek agreement for money
you can seek agreement to recruit you
can seek agreement for partnership you
can seek agreement for sales pitching
and you know the Latin sing oh I think
therefore I am for an entrepreneur it is
pitch therefore I am an entrepreneur is
always bitching there is what I call the
10-20-30 rule the ten part of the
10-20-30 rule is that the optimal number
of slides for a PowerPoint pitch is 10
maybe it’s 15 but it’s not the 50 that
you think it is if you can cover these
10 subjects very well the next step will
be due dilligence
many people think that if you put 50
slides together the audience will be
overcome with shock and awe and all they
can ask is how do I wire you the money I
have never ever seen that happen all
right
the purpose of a pitch is to get to the
next stage of due diligence the purpose
of a pitch is not to try to close the
venture capital for the part or the
customer in that meeting the second
point is the 20 I think you should be
able to use these 10 slides in 20
minutes you may have a 60 minute meeting
but I guarantee you it’ll start late the
partners from the firm will come in late
you’re using a Windows laptop you can’t
make it work with the projector
something will go wrong something will
go wrong and the third point is 30.5 the
smallest font you should use on a slide
it’s 30 points this single
recommendation will prevent you from
getting in trouble with most slides lots
of people like to use 8 10 or 12 point
font they like to write out the entire
paragraph and then they read the
paragraph people can read faster than
you can talk so if you put all the text
that you want to say up on the slide
they will read it if they can see it and
they will be done before you’ve
explained it the ideal size font is 30
if you think this is too dogmatic let me
give you an algorithm the algorithm is
find out who the oldest person will be
in the meeting take that age and divide
by two
okay so unless you’re presenting to 16
year olds do not use the 8 point font
you scale too fast this found this is
the foundation of this mistake is the
previous slide so this is how scaling to
fast works so
we have now calculated conservatively
speaking we’re going to do one and a
half million cans of dog food per day oh
my god we need to really put in a
service infrastructure we need to have
multiple warehouses because we need the
dog food shipping out a million and a
half cans of dog food per day you know
we should have a headquarter we should
have a shipping facility in Northern
California Southern California we need
one in Texas we near Chicago we need one
in Boston we need them on Miami we need
one in Burlington North Carolina we need
one everywhere because damn it we’re
going to have great service and so we
need these multiple warehouses we need
support 24 by 7 because people are going
to be buying dog food all over the time
all the places why don’t have million
cans a day conservatively speaking and
so what happens you make your burn rate
come out half a million dollars and
guess what your Rockstar CTO roommate is
late on the software and so you’re
burning half a million dollars because
you have all this infrastructure your
people your buildings you have all these
systems and all these things in place
and the software is late this goes on
for a year right and so during that year
your investors are now getting a little
antsy but you say to your investors you
know we’ve invested so much training
these people how to sell and support dog
food and these are Rockstar support
people and our CTO says that we’re going
to ship next month so it would be really
stupid to fire these Rockstar support
people because in 30 days we’re gonna
have to hire back same kind of people
and they will have to train them because
it’s so hard to sell dog food online we
have so much invested in them so let’s
keep these people on and for the first
three or four board meetings you’re
bored because they’re mostly looking at
their BlackBerry’s I’m not going to even
hear this and they’re gonna sort of not
to do anything all right but by about
the 6th 7th 8th board meeting when
you’re burning half a million dollars
your board is going to wake up and I’m
going to say you know something we’re
starting to not to believe you right and
so the key here is Dalt scale to fast
I
never seen a company die because it
could not scale too fast for once in my
life God willing I would like to have a
problem we’re a company I’m affiliated
with has such demand it cannot keep up
with the demand god please give me that
problem just once in my life okay
so the solution to this problem is my
philosophy that you eat what you kill in
other words you don’t build the kitchen
you don’t build the chef you don’t get
the waiters you don’t get the restaurant
you don’t get anything until you
actually kill something and then once
you kill something once you get the sale
then you build the infrastructure then
you build the support now you’re going
to say well guy you know if you do this
and you’re actually on time then you
might have a bad reputation you can’t
fulfill orders fast enough you can’t do
something like that but again I’ve never
seen it happen so a very good discipline
is you know if you think that you’re
going to get twenty five million
pageviews a month so you need to have
two sets of buildings and you need two
sets of IT and all this customer service
I’ll tell you what when you approach
twenty five million let’s just worry
about it then okay but until there
because odds are you will be late
odds are will you you will be late so
eat what you kill you need to plant many
seeds this is completely contrary to
classic marketing classic marketing is
you plant a few seeds because you know
exactly who’s going to embrace your
product and you water and fertilize just
those seeds you focus I think that it’s
completely wrong in the old days you
would focus on the a-listers and the
top-tier journalists ie
Wall Street Journal New York Times
Businessweek fortune Forbes what you did
is you sucked up to them because you
hope that these great Oracle’s of wisdom
and knowledge would embrace your product
until the hoi polloi and the great
unwashed masses to embrace your product
okay so you sucked up to them if you
didn’t have time to suck up to them you
hired a PR firm and
than 10,000 bucks to suck up for you
then the PR firm would hire an oriental
art history from Wellesley to do the
sucking up for you okay this doesn’t
work anymore because the world has been
inverted the world has been inverted and
now for you to reach critical mass with
a product it’s not because the Wall
Street Journal of the New York Times
blessed your product it’s because lonely
boy 15 embraced your product and lonely
boy 15 told his 20 friends who told
their 20 friends who eventually told
Tiffany 517 and lonely girl to also
embrace your product and what happens
and this is how Twitter and this is how
Facebook happened it’s not because the
New York Times saw Twitter or Facebook
on the first day they launches it aha
we have seen the future we know it total
certainty someday Facebook will have
more members than every other country
except China and India show me a New
York Times Businessweek fortune Forbes
article that predicted the success of
Twitter or Facebook or Apple or Yahoo
pick any of the success stories none of
them so what you need to do is plant
many seeds put your prototype out there
cover the earth with it because you do
not know who your lonely boy 15 will be
this is some loser of a person who has
no life who’s a database administrator
in the bowels of HP right and this
person may be the person that makes your
product a success you cannot reach those
people by focusing and using PR firms
who have hired oriental art art history
majors from Wellesley you need to plant
many seeds I have much I have about
thousand times more communication with
Google than Apple why do you think it is
um you know Apple just tuned into
themselves if you’re outside the Apple
family it’s like you’re a non grata
it’s kind of like LBJ seen you saying
you’re either in the tent pissing out or
outside the tent pissing in so I guess
I’m outside the tent pissing in you know
at this point in my life you may have
noticed I really don’t give it what
people think um so now this is an
enormous ly liberating feeling and so
you know I I don’t really care I mean
you know I don’t think Tim Cook even
knows who I am so you know what does he
care if I criticize his connecter
strategy so if I don’t like to tell it
like it is I’m 58 years old you know two
thirds dead already so you know what
italo’s yeah waste time in it you could
also see me on social media when people
attack me and when people do things I
just block him block away I don’t try to
make it up there screw my block a lot of
people
I just you know I got touched the people
that I block the most are these just
total troll wussies I would like to use
the B word there but I use developing a
learner and I just there’s a there’s
like a small number of people on social
media who have such a feeling of
entitlement and I’ll give you an example
so that Google is giving away copies of
what the Plus okay and so you can get it
from Google for free all day long and so
they they put a little you know banner
we’re not banner a little gift that’s it
click here to get what the Plus for free
as a gift to all Google+ users so
somebody says how dare Google do this
they said there would be no ads on
Google+ and now I see this thing where I
can get a free copy of what the Plus how
dare Google do that basically that guy
say my time is so important in my screen
space my white space is so important I
have such a feeling of entitlement how
dare Google which is hosting my pictures
doing my email handling my social media
giving me search results how dare Google
put a little gift there I just I cannot
relate to that attitude to me you know I
just parts of Google+ I don’t like their
parts of Facebook I don’t like like you
know why do they only send my posts to
10% of the people who volunteered to see
my posts I can’t wrap my mind around
that it’s the same guy who did the Apple
connector strategy so
there’s no way you know I thought like
what I mean how do they what goes
through their brain thinking that and so
these people with entitlement I can’t
stand that thought to me no matter how
much you dislike Google+ or Pinterest or
LinkedIn or whatever you’re not paying I
mean they’re providing a tremendous
service to you so the metaphor I like to
use is if somebody invites you to their
house for dinner you don’t show up and
say you’re not serving what I like right
this is a dinner you are a guest in
someone’s house so shut up and eat only
thank you guys so much for watching I
made this video because Dorian Taylor
asked me to so this is famous
entrepreneur that you want me to profile
next leave it in the comments below and
I’ll see what I can do I’d also love to
know which guys top ten rules meant the
most to you leave in the comments I’ll
Jordan discussion thank you so much for
watching continue to believe I’ll see
you soon
partnership is a very very overused word
in many circumstances the word
partnership means lack of sales okay so
since you don’t have any revenue you say
but we have very promising partnerships
in other words it’s total bull most
partnerships are total bull
there’s only one thing that you care
about its sales remember this is the
most important Agra titanite sales fixes
everything okay
no partnership nothing
strategic you’re either selling or
you’re not selling partnerships are both
if you want to apply a more
sophisticated test to partnership when
you form a partnership did you boot
Excel and either lower costs or increase
sales that’s it because if you form a
partnership and it doesn’t force you to
recalculate your financials it’s total
bull okay that’s the test
it is a spreadsheet test for
partnerships most partnerships you
announce something to egomaniac CEOs who
don’t know anything about the business
go to a press conference you mount this
great thing and then nothing happens the
Middle’s and the bottoms of your
organization can’t stand each other
nothing happens okay so use the
spreadsheet test don’t form partnership
instead focus on sales focus on sales I
swear to you that most entrepreneurs use
the p-word in order to blow smoke
because they cannot use the S word sales
the ideal number of times use your
partnership in a presentation is one I
just say it once you have one
partnership but if you start spitting it
out like it’s the key strategic strength
for your company oh my god you are in
deep trouble okay but generally speaking
unless it changes your spreadsheet
partnerships are both invoke
reciprocation this is a carpet
depicts the battle between Italy and
Ethiopia because Italy invaded Ethiopia
in the 1930s when that invasion occurred
the people of Mexico donated money and
sent it to the people of Ethiopia
something like 80 years later Mexico had
this horrendous series of earthquakes
lots of dead people lots of injury lots
of suffering the people of Ethiopia even
though they were in a famine collected
money and sent money to Mexico because
they felt the necessary obligation to
reciprocate fast forward a few years
about right after the Civil War the
people of Charleston South Carolina were
using bucket brigades to fight fires the
people of New York including Union
soldiers heard about this and they
donated money to buy the city of
Charleston a fire truck that first fire
truck was on a boat that sank so they
had to raise money again and sent
another truck to Charleston
excuse me fire truck to Charleston fast
forward to right after 9/11 the people
of Charleston raised over half a million
dollars to buy a fire truck for the
people of New York because the people of
Charleston pledged that if New York ever
needed its help it would come through
135 years later reciprocation is a very
powerful force to make your enchantment
endure it means that you have to pay it
forward though and I will give you a
couple power tips about reciprocation
when you pay it forward when you do
something for somebody if they have any
social skills they will thank you right
they will express gratitude when that
occurs the optimal thing for you to say
is not you are welcome this is a lesson
from Robert seal Dini the optimal thing
for you to say when someone thanks you
for doing something is I know you would
do the same for
me because when you say that you are
doing two things one is you are saying
to the person you have class I did
something for you you’re thanking me and
I know you would do the same for me
because you have a classy guy you
believe in reciprocation that’s one
thing you’re saying the second thing
you’re saying is let me tell you
something you owe me I’m telling you
right now you owe me let’s just make it
clear you frickin owe me another power
tip you might think that when someone
owes you something you should hesitate
on letting them pay you back you know I
know you would do the same for me but
you don’t really have to it’s okay it’s
okay god bless you go on with your life
the better thing for you to do is enable
him to pay me back because you don’t
want them carrying around this guilt and
hesitation his whole life right so what
you want to do is relieve the guilt okay
you can shine my shoes you know you can
defragment my hard disk you can delete
the spam from my you know whatever you
want you can make my Windows 7 laptop
print whatever right so so by doing that
by doing that you alleviate the guilt
that he’s carrying upon his shoulders
what you’re doing is you are clearing
the deck you’re clearing the deck now
we’re equal I can do more favors for you
you can even do favors for me you’re
you’re relieving the pressure so let
people pay you back it’s good for them
it’s good for you
next recommendation is that you hire
infected people I think that any
infected founding team is probably more
important than a founding team that on
paper has a good background and work
experience or education that you know
that people who love the product or
service that’s more important than their
degrees it’s more
in their work experience focus on the
people who love the product or service
this means fundamentally you ignore
what’s irrelevant and in many cases
education and work experience is
irrelevant this is completely contrary
to what most VCS will tell you if you
have VCS further on into this course and
if you ask them well what are you
looking for they’re going to tell you it
I’ll tell you that right now you can
skip that lecture they’re going to say
we want proven teams with proven
technology and proven traction in other
words we want people who have founded
Cisco won a Nobel Prize and they’re
doing 50 million dollars in revenue
that’s an early-stage deal for a VC
today all right by contrast garages in a
different business we want unproven
teams unproven traction and unproven
technologies completely different world
the irrelevant thing is that you know
think about what an entrepreneur has to
go through so let’s take let’s take what
might seem very attractive to many
venture capitalist let’s say that on
your founding team is someone who is a
senior vice president at Microsoft most
VCS would salivate at the thought this
is a proven executive this executive has
been with Microsoft for ten years has
helped Microsoft grow etc etc but if you
peel the layers of the onion one level
lower you would see that that executive
during his or her career to Microsoft
had on average a war chest of fifty
billion dollars in Microsoft during that
timeframe they had a market market share
percentage of roughly 95% during that
person’s tenure at Microsoft that
person’s greatest fear was the Antitrust
Division of the US Department of Justice
now you’re going to take that prove an
executive for Microsoft and stick them
in a garage with $500,000 zero brand
awareness zero market share I would make
the case that that might not be the
ideal hire for you okay now you may be
wondering why in the world are there
diamond rings in this picture it is
because I am living proof of this
theory I graduated from Stanford in a
psych degree as I told you I attend the
UC Davis Law School and when you say you
attended a school it means you didn’t
finish I attended two weeks so I really
in fact I never got started actually and
and after that I went into the jewelry
business like I enrolled the following
year in an MBA program at UCLA and while
I was there I started working in the
jewelry business my first job was
literally counting diamonds so on paper
if you are Apple computers you know
recruiter you said alright so we need
someone to go out and convince the most
technical audience we have software
developers why they should write
Macintosh software I don’t think the
spec would say psych degree law school
drop-out marketing MBA currently
counting diamonds in Los Angeles you
know that might not be the sweet spot
okay but what enabled me to be
successful with Macintosh is I loved
Macintosh the scales were removed from
my eyes the first time I saw it you know
the clouds parted the angels started
playing their trumpets it was a
religious experience for me that’s why I
succeeded because it ain’t because of my
psych degree and it’s not because I
attended law school for two weeks and
it’s not because I have a marketing
degree from UCLA all right ignore the
irrelevant what is relevant is they love
the product second point you should hire
better than yourself very difficult for
most founders particularly engineering
types who believe that because of their
superior chip speed that they should be
the best salesperson the best finance
person the best marketing person and the
best engineering person you need to hire
people better than you a players by
definition hire a players B players hire
C players and C players hire D players
so pretty soon you’ll be surrounded by Z
players okay that’s what’s called the
bozo explosion
and what follows the bozo explosion is
the layoffs okay
so avoid the bozo explosion the third
thing is to apply the Stanford Shopping
Center test the way this works is
suppose you’re at Stanford shopping
center you see someone who’s being
recruited by your company who’s
interviewing at your company the
distance between you and the person when
you first see him or her is for me to
the back of the room that person up
there has not yet seen me but I have
seen them or her or her so at this point
I have this sort of choices I can rush
over and say hi how are you I know
you’re interviewing can I tell you more
about the company I really think you
should join our company we were just
going to kick some ass we’re going to
make me and we’re going to change the
world with our technology or you can say
Stanford Shopping Center isn’t that big
maybe I’ll bump into them if I do I’ll
say hello if I don’t I won’t say hello
the third reaction is I’m going to get
in my car and go to Valco shopping
center okay if your reaction to the job
candidate is not I’m going to run over
there and say hello to the person don’t
hire a person because when you’re
creating a start-up it is a family
it is a dysfunctional family honestly
but it is a family if you don’t feel the
compulsion to run over there and say
hello probably not the right person
making meaning this mission statement is
going to be good for the shareholders
for the employees for the customers if
HR is there it’s going to be good for
the whales and the Dolphins gonna take
care of everything you should not be
afraid of polarizing people I’m not
saying you should go and intentionally
piss them off using your Rockstar
roommate who happen to be with you the
weekend you got drunk and decided to
start this pet food company it’s not the
crappy logo that your sister-in-law
designed for free you need to tell a
story why did you start eBay why did you
start Google yeah you know the Latin
saying oh I think therefore I am for an
entrepreneur it is a pitch therefore I
am don’t scale too fast I have never
seen a company die because it could not
scale too fast for you to reach critical
mass with a product it’s not because the
Wall Street Journal of the New York
Times blessed your product it’s because
lonely boy 15 embraced your product at
this point in my life you may have
noticed I really don’t give it what
people think he’s a Silicon Valley
marketing executive he was one of the
Apple employees originally responsible
for marketing their Macintosh computer
1984 in 2015 he joined the Wikimedia
Board of Trustees he’s guy kawasaki and
here his top 10 rules for success the
first thing I figured out and learns
sometimes the hard way about
entrepreneurship is that the core the
essence of entrepreneurship is about
making meaning many many people start
companies to make money the quick flip
the dot-com phenomena and I have noticed
in both the companies that I’ve started
and funded and been associated with that
those companies that that are
fundamentally founded to change the
world to make the world a better place
to make meaning are the companies that
make a difference they are the companies
to succeed my naive and romantic belief
is that if you make meaning you’ll
probably make money but if you set out
to make money you will probably not make
meaning and you won’t make money so my
first thought is you need to make
meaning that should be the core of why
you start a company there are three ways
to make meaning first is to increase the
quality of life my background is a
Macintosh division of Apple Computer
then I can tell you the total Sergent e
that we were not motivated by making
money we were motivated by changing the
world to make people more creative and
more productive we were trying to
increase the quality of life for the
Macintosh user and I was a great
motivation it kept us going through many
many difficult periods we were waking up
in the morning thinking how we could
change people’s lives a second way to
make meaning is to right or wrong you
know that this fish is going to die
after jumping out but to write a raw
means that you find something that’s
wrong in the world or you notice
something that’s wrong around you want
to fix that this might be particularly
applicable to not-for-profits where you
know there’s pollution or there’s crime
or there’s abuse and they just their
very core is to end that wrong and the
third way to make meaning is to prevent
the end of something good that you see
something beautiful something wonderful
and you just can’t stand the fact that
it’s been eroded it’s being changed it’s
being ruined so I ask you as you start
your companies your not-for-profits your
churches your schools whatever you’re
starting
please have one of those three
motivations one or more of those
motivations if you don’t have any of
those motivations I suggest that you
rethink what you’re doing because there
are too many MBAs in the world and I
have an MBA because there are too many
MBAs and too many have you have worked
for Bain or McKinsey or Arthur D little
somehow you think that you should make a
mission statement and the way you make a
mission statement is typically this you
go on a 2-day off-site with the
executive team the executive team the
first day of this off-site you’re
outdoors you’re at the ritz-carlton Half
Moon Bay for example because that’s why
you go on these off sites so you go to
the ritz-carlton Half Moon Bay and
there’s a facilitator and the first day
you create these cross-functional teams
and and the facilitator says all right
one of you from each team come to the
front everybody else get behind him or
her turn around
shut your eyes open up your arms and
fall backwards into their arms because
we’re going to build trust you’re going
to learn that your teammates are there
for you so turn around shut your eyes
spread your arms and fall backwards so
after one day of this the
second days you’re out in a small room
there’s a bunch of white papers you know
those tablets of papers and there’s a
facilitator who knows nothing about your
industry and that facilitator is going
to help you craft this mission statement
and this mission statement is going to
be good for the shareholders for the
employees for the customers if HR is
there it’s going to be good for the
whales and the Dolphins we’re going to
take care of everything and what happens
is you get a mission statement like this
the mission of Wendy’s is to deliver
superior quality products and services
for our customers and communities
through leadership innovation and
partnerships now
don’t get me wrong I love Wendy’s I have
four children by definition I like
Wendy’s okay but I have to tell you in
all the times that I’ve eaten Wendy’s it
has never occurred to me that I am
participating in something involving
leadership innovation and partnerships I
dare say that if you ask
Trixie or Biff working at Wendy’s what
is the mission statement of Wendy’s not
one could repeat this I also dare say
that not even the founder of Wendy’s
Dave Thomas could repeat this I know
that’s not true because he’s dead this
is a useless kind of statement it’s too
long it’s not unique it’s not memorable
as an entrepreneur someday when you have
15,000 employees you’re trading on
NASDAQ and you spend two million dollars
to build your annual report fine make a
dumb ass mission statement like this but
right now in the entrepreneurial stage I
submit to you you should create a mantra
three or four words a mantra ironically
entrepreneurs who should have this bias
toward action often can’t get going they
are victims of engineering creeping
elegance where they always want to add
one more feature or they’re marketing
people or and they they need that
external validation they want to prove
that there’s a market they have to read
one more consulting study or they’re
trying to get a focus group to prove
that the product works they need one
more focus group one more test suite one
more something a bunch of crap so here’s
three recommendations about getting
going the first is you got to think
different as an entrepreneur your goal
should not be to do something 10 or 15
or 20 percent better it should be to do
something ten times better it should not
be a slightly better Apple two it should
not be slightly better ms-dos it should
be a completely different operating
system think their friend build the
product or service that you love I
moderated a panel on Saturday where a
venture capitalist from Sequoia was on
the panel and he said that the best
source of entrepreneurial
for Sequoia the best places and
companies to fund are people under 30
years old who are solving a personal
problem
hence Google can see ah who has an Cisco
that’s the kind of sweet spot for
venture capital for don’t just do the
15th thing think different
the second point about getting going is
do not be afraid of polarizing people
you know many people are afraid to
polarize people that my god some people
might not like what we do
and so they try to create this product
or service that everybody likes that is
impossible you should not be afraid of
polarizing people I’m not saying you
should go and intentionally piss them
off but you should not be afraid of
polarizing people the ideal situation is
where some people really love your
product and some people hate your
product but very few people feel sort of
disinterested or or neutral towards your
product you know something like a Toyota
Scion xB you either love that design and
you think it’s very cool or you think
that’s a refrigerator on wheels but
there is nothing in the middle
it’s nothing in the middle same thing
with a Mini Cooper same thing with the
Murano same thing with a McIntosh same
thing with the harley-davidson either
love the product or hate the product but
don’t be afraid to polarize people and
the third point is you need to find a
few soulmates I think there’s a vast
myth about entrepreneurship that it’s
Steve Jobs changing the world
single-handedly Bill Gates changing the
world single-handedly richard branson
changing the world single-handedly Anita
Roddick changing the world
single-handedly Mary Kay changing the
little single-handedly it’s not true
it’s not true you need soulmates you
need I think ideally three people in a
founding team because when one person
falls down needy the other two people to
pick you up and when one person is cold
you need other people to hug you and
keep you warm it’s very hard to keep
yourself warm it’s very hard to hug
yourself all right
so find the soulmate for Bill Gates
there was Steve Ballmer for Steve Jobs
there was Steve Wozniak find a few
soulmates that balance you off that keep
you warm that’ll pick you up
number one then entrepreneurs use all
the time and if you’re going to pitch me
you better avoid this mistake which is
to take this big number and multiply by
a mere 1% so this is how the pitch goes
pretend you go back in time 15 years ago
and you’re pitching that’s calm so pets
calm was a dot-com startup it’s so dog
food online ok so this is the pitch
there are 300 million Americans
these Americans roughly one in four on a
dog 75 million dogs each dog eats two
cans of dog food per day 150 million
cans of dog food per day and this is not
b2b this is Busey or more accurately b2d
because dogs dogs do not take the
weekend off dogs eat every day right so
total addressable market is one and a
half million cans of dog food per day
excuse me 150 million cans of dog food
per day times 365 now let’s be
conservative because that’s a favorite
of entrepreneurs let’s be conservative
let’s pretend that we can get a mere 1%
of this market you know how hard could
that possibly be to get a mere 1% of 150
million cans of dog food per day so 1%
of 150 million cans of dog food per day
you don’t need to go to Stanford to
figure out that’s one and a half million
cans of dog food per day one and a half
million cans of dog food per day let’s
say you conservatively make a buck for a
cat that’s a million and a half dollars
per day one and a half million dollars
their gross for every times 365 equals
500 million oliver’s this conservatively
speaking worst case ok
do you not hear this kind of pitch every
freaking day of the year right right so
that’s what people do and you know it’s
total bull it’s total bull because you
cannot address that kind of market this
is saying you know how hard could it be
to get 1% of the people in China to
drink my soda well that’s not so easy to
get 1% of people in China to drink your
soda so the solution for this is that
you calculate from the bottom up ok so
if you use the mistaken way you
calculate one and a half million cans
per day conservatively speaking let’s go
from the bottom so from the bottom using
your Rockstar roommate who happen to be
with you the weekend you got drunk and
decided to start this pet food company
and because you know you have no
technical skills and he has one class in
programming he’s the CTO now ok
you know I can tell you you you’re
familiar with this practice right right
okay so CTO and CEO and so this is how
you do a bottom-up analysis you say all
right so with my rock star you know PHP
Ruby expert roommate he’s gonna write
this great or she’s gonna write this
great website and but let’s just think
like so website the selling pet food
online let’s figure that we can get
50,000 unique visitors a month let’s be
a little conservative 50,000 and of
those 50,000 people let’s say that using
the same conservative number you know 1%
of the people buy dog food they actually
buy dog food right so so 1% of 50,000 is
500 right all right now so 500 so 500
people buy these 500 people they buy a
case so it’s 500 times 30 so now we’re
at 15,000 so like okay so we have 15,000
cans of dog food per day let’s you know
let’s round it up a little so maybe we
get to 15 maybe get to 20,000 but 15 or
20,000 is a long way from one-and-a-half
million right so using the top-down
analysis you come up with a conservative
one and a half million per day using the
more conservative you know bottom-up
analysis you come up with 15,000 per day
let me tell you something you are going
to be much closer to 15,000 per day than
one and a half million and that’s how
you prevent this mistake you have to be
realistic you can’t just go from this
big old number and try to scrunch it
down using conservative estimates you
need to start from the bottom can you
get 50,000 people to visit your website
a day will 1% actually buy the dog food
that’s a much more relevant way so
that’s how you avoid this mistake and
the results will always be closer to the
bottom-up analysis than the top-down in
all my years of working with
entrepreneurs I have never seen a
company meet their
natural projection never it never
happens the fifth thing is to weave a
map Matt stands for milestones
assumptions and tasks I happen to love
ice hockey I happen to love ice hockey
and there are two of my friends here
from ISO aces where I play ice hockey in
Redwood City and one of the pleasures of
ice hockey is to be the first person on
the ice after the Zamboni because after
the Zamboni has shaved the ice the ice
is just pure smooth virgin ice no cuts
no ruts it’s a beautiful thing and when
you skate you can see exactly where your
skated it’s a lovely feeling it’s like
being the first person down the mountain
and skiing or snowboarding a new company
is largely like that it’s a pure sheet
of wonderful smooth ice there’s no pain
in the ass customers who are trying to
get a free upgrade there’s no stupid
employees you made a mistake hiring
there’s not the crappy commercial real
estate that you paid 15 bucks a month
for in the height of the dot-com
phenomena there’s not the crappy
furniture you bought at Office Depot one
day it’s pure pure wonderful ice it’s
not the crappy logo that your
sister-in-law designed for free you’re
starting from scratch it’s beautiful
beautiful the Zamboni just left the ice
when you have that situation it’s very
difficult to prioritize this is about
prioritization the first thing you need
to do is come up with a handful of
milestones milestones are things like
finishing the design shipping the
software when you’re starting a company
you often think my god we could either
finish the design today or go order
stationary seems like they’re both about
the same importance it’s not true a
milestone is something that you would
call up your spouse and say honey
today we shipped that’s very different
than calling up your spouse and saying
honey
today we ordered stationary
that’s not quite the same the next thing
you do is you write down the assumptions
of your company how many sales calls can
you make per day what’s the customer ROI
how much does it cost to install our
software or product these assumptions
change your business model very few
companies or startups write them down
and test them write them down and test
them and the third thing is then to do
tasks the tasks are the things that help
you either accomplish a milestone or
test an assumption but the priority for
an entrepreneur is milestones
assumptions and tasks ma t you need to
tell a story most people particularly in
technology are horrible at telling
stories
you need to tell a story why did you
start eBay why did you start Google why
did you start Apple you can even make up
the story after the fact okay one of the
great legends of Silicon Valley is that
eBay was because pyramid yars girlfriend
wanted to sell Pez dispensers okay the
truth is that he really wanted to create
a perfect market where demand and supply
cross each other the perfect market and
to have a perfect market you need to
eliminate geography the story of the PEZ
dispenser is after the fact
now I’m not encouraging you to lie but I
am telling you a story is much more
powerful when you launch yu2 in a garage
knew there was a better way to search or
you wanted to bring personal computers
to more people or you wanted a place
where people could upload video of
people dropping Mentos into diet cokes
you know whatever it is tell a story the
next thing is the art of pitching
pitching is usually used to raise money
but pitching more generically is about
the process of seeking agreement you can
seek you can seek agreement for money
you can seek agreement to recruit you
can seek agreement for partnership you
can seek agreement for sales pitching
and you know the Latin sing oh I think
therefore I am for an entrepreneur it is
pitch therefore I am an entrepreneur is
always bitching there is what I call the
10-20-30 rule the ten part of the
10-20-30 rule is that the optimal number
of slides for a PowerPoint pitch is 10
maybe it’s 15 but it’s not the 50 that
you think it is if you can cover these
10 subjects very well the next step will
be due dilligence
many people think that if you put 50
slides together the audience will be
overcome with shock and awe and all they
can ask is how do I wire you the money I
have never ever seen that happen all
right
the purpose of a pitch is to get to the
next stage of due diligence the purpose
of a pitch is not to try to close the
venture capital for the part or the
customer in that meeting the second
point is the 20 I think you should be
able to use these 10 slides in 20
minutes you may have a 60 minute meeting
but I guarantee you it’ll start late the
partners from the firm will come in late
you’re using a Windows laptop you can’t
make it work with the projector
something will go wrong something will
go wrong and the third point is 30.5 the
smallest font you should use on a slide
it’s 30 points this single
recommendation will prevent you from
getting in trouble with most slides lots
of people like to use 8 10 or 12 point
font they like to write out the entire
paragraph and then they read the
paragraph people can read faster than
you can talk so if you put all the text
that you want to say up on the slide
they will read it if they can see it and
they will be done before you’ve
explained it the ideal size font is 30
if you think this is too dogmatic let me
give you an algorithm the algorithm is
find out who the oldest person will be
in the meeting take that age and divide
by two
okay so unless you’re presenting to 16
year olds do not use the 8 point font
you scale too fast this found this is
the foundation of this mistake is the
previous slide so this is how scaling to
fast works so
we have now calculated conservatively
speaking we’re going to do one and a
half million cans of dog food per day oh
my god we need to really put in a
service infrastructure we need to have
multiple warehouses because we need the
dog food shipping out a million and a
half cans of dog food per day you know
we should have a headquarter we should
have a shipping facility in Northern
California Southern California we need
one in Texas we near Chicago we need one
in Boston we need them on Miami we need
one in Burlington North Carolina we need
one everywhere because damn it we’re
going to have great service and so we
need these multiple warehouses we need
support 24 by 7 because people are going
to be buying dog food all over the time
all the places why don’t have million
cans a day conservatively speaking and
so what happens you make your burn rate
come out half a million dollars and
guess what your Rockstar CTO roommate is
late on the software and so you’re
burning half a million dollars because
you have all this infrastructure your
people your buildings you have all these
systems and all these things in place
and the software is late this goes on
for a year right and so during that year
your investors are now getting a little
antsy but you say to your investors you
know we’ve invested so much training
these people how to sell and support dog
food and these are Rockstar support
people and our CTO says that we’re going
to ship next month so it would be really
stupid to fire these Rockstar support
people because in 30 days we’re gonna
have to hire back same kind of people
and they will have to train them because
it’s so hard to sell dog food online we
have so much invested in them so let’s
keep these people on and for the first
three or four board meetings you’re
bored because they’re mostly looking at
their BlackBerry’s I’m not going to even
hear this and they’re gonna sort of not
to do anything all right but by about
the 6th 7th 8th board meeting when
you’re burning half a million dollars
your board is going to wake up and I’m
going to say you know something we’re
starting to not to believe you right and
so the key here is Dalt scale to fast
I
never seen a company die because it
could not scale too fast for once in my
life God willing I would like to have a
problem we’re a company I’m affiliated
with has such demand it cannot keep up
with the demand god please give me that
problem just once in my life okay
so the solution to this problem is my
philosophy that you eat what you kill in
other words you don’t build the kitchen
you don’t build the chef you don’t get
the waiters you don’t get the restaurant
you don’t get anything until you
actually kill something and then once
you kill something once you get the sale
then you build the infrastructure then
you build the support now you’re going
to say well guy you know if you do this
and you’re actually on time then you
might have a bad reputation you can’t
fulfill orders fast enough you can’t do
something like that but again I’ve never
seen it happen so a very good discipline
is you know if you think that you’re
going to get twenty five million
pageviews a month so you need to have
two sets of buildings and you need two
sets of IT and all this customer service
I’ll tell you what when you approach
twenty five million let’s just worry
about it then okay but until there
because odds are you will be late
odds are will you you will be late so
eat what you kill you need to plant many
seeds this is completely contrary to
classic marketing classic marketing is
you plant a few seeds because you know
exactly who’s going to embrace your
product and you water and fertilize just
those seeds you focus I think that it’s
completely wrong in the old days you
would focus on the a-listers and the
top-tier journalists ie
Wall Street Journal New York Times
Businessweek fortune Forbes what you did
is you sucked up to them because you
hope that these great Oracle’s of wisdom
and knowledge would embrace your product
until the hoi polloi and the great
unwashed masses to embrace your product
okay so you sucked up to them if you
didn’t have time to suck up to them you
hired a PR firm and
than 10,000 bucks to suck up for you
then the PR firm would hire an oriental
art history from Wellesley to do the
sucking up for you okay this doesn’t
work anymore because the world has been
inverted the world has been inverted and
now for you to reach critical mass with
a product it’s not because the Wall
Street Journal of the New York Times
blessed your product it’s because lonely
boy 15 embraced your product and lonely
boy 15 told his 20 friends who told
their 20 friends who eventually told
Tiffany 517 and lonely girl to also
embrace your product and what happens
and this is how Twitter and this is how
Facebook happened it’s not because the
New York Times saw Twitter or Facebook
on the first day they launches it aha
we have seen the future we know it total
certainty someday Facebook will have
more members than every other country
except China and India show me a New
York Times Businessweek fortune Forbes
article that predicted the success of
Twitter or Facebook or Apple or Yahoo
pick any of the success stories none of
them so what you need to do is plant
many seeds put your prototype out there
cover the earth with it because you do
not know who your lonely boy 15 will be
this is some loser of a person who has
no life who’s a database administrator
in the bowels of HP right and this
person may be the person that makes your
product a success you cannot reach those
people by focusing and using PR firms
who have hired oriental art art history
majors from Wellesley you need to plant
many seeds I have much I have about
thousand times more communication with
Google than Apple why do you think it is
um you know Apple just tuned into
themselves if you’re outside the Apple
family it’s like you’re a non grata
it’s kind of like LBJ seen you saying
you’re either in the tent pissing out or
outside the tent pissing in so I guess
I’m outside the tent pissing in you know
at this point in my life you may have
noticed I really don’t give it what
people think um so now this is an
enormous ly liberating feeling and so
you know I I don’t really care I mean
you know I don’t think Tim Cook even
knows who I am so you know what does he
care if I criticize his connecter
strategy so if I don’t like to tell it
like it is I’m 58 years old you know two
thirds dead already so you know what
italo’s yeah waste time in it you could
also see me on social media when people
attack me and when people do things I
just block him block away I don’t try to
make it up there screw my block a lot of
people
I just you know I got touched the people
that I block the most are these just
total troll wussies I would like to use
the B word there but I use developing a
learner and I just there’s a there’s
like a small number of people on social
media who have such a feeling of
entitlement and I’ll give you an example
so that Google is giving away copies of
what the Plus okay and so you can get it
from Google for free all day long and so
they they put a little you know banner
we’re not banner a little gift that’s it
click here to get what the Plus for free
as a gift to all Google+ users so
somebody says how dare Google do this
they said there would be no ads on
Google+ and now I see this thing where I
can get a free copy of what the Plus how
dare Google do that basically that guy
say my time is so important in my screen
space my white space is so important I
have such a feeling of entitlement how
dare Google which is hosting my pictures
doing my email handling my social media
giving me search results how dare Google
put a little gift there I just I cannot
relate to that attitude to me you know I
just parts of Google+ I don’t like their
parts of Facebook I don’t like like you
know why do they only send my posts to
10% of the people who volunteered to see
my posts I can’t wrap my mind around
that it’s the same guy who did the Apple
connector strategy so
there’s no way you know I thought like
what I mean how do they what goes
through their brain thinking that and so
these people with entitlement I can’t
stand that thought to me no matter how
much you dislike Google+ or Pinterest or
LinkedIn or whatever you’re not paying I
mean they’re providing a tremendous
service to you so the metaphor I like to
use is if somebody invites you to their
house for dinner you don’t show up and
say you’re not serving what I like right
this is a dinner you are a guest in
someone’s house so shut up and eat only
thank you guys so much for watching I
made this video because Dorian Taylor
asked me to so this is famous
entrepreneur that you want me to profile
next leave it in the comments below and
I’ll see what I can do I’d also love to
know which guys top ten rules meant the
most to you leave in the comments I’ll
Jordan discussion thank you so much for
watching continue to believe I’ll see
you soon
partnership is a very very overused word
in many circumstances the word
partnership means lack of sales okay so
since you don’t have any revenue you say
but we have very promising partnerships
in other words it’s total bull most
partnerships are total bull
there’s only one thing that you care
about its sales remember this is the
most important Agra titanite sales fixes
everything okay
no partnership nothing
strategic you’re either selling or
you’re not selling partnerships are both
if you want to apply a more
sophisticated test to partnership when
you form a partnership did you boot
Excel and either lower costs or increase
sales that’s it because if you form a
partnership and it doesn’t force you to
recalculate your financials it’s total
bull okay that’s the test
it is a spreadsheet test for
partnerships most partnerships you
announce something to egomaniac CEOs who
don’t know anything about the business
go to a press conference you mount this
great thing and then nothing happens the
Middle’s and the bottoms of your
organization can’t stand each other
nothing happens okay so use the
spreadsheet test don’t form partnership
instead focus on sales focus on sales I
swear to you that most entrepreneurs use
the p-word in order to blow smoke
because they cannot use the S word sales
the ideal number of times use your
partnership in a presentation is one I
just say it once you have one
partnership but if you start spitting it
out like it’s the key strategic strength
for your company oh my god you are in
deep trouble okay but generally speaking
unless it changes your spreadsheet
partnerships are both invoke
reciprocation this is a carpet
depicts the battle between Italy and
Ethiopia because Italy invaded Ethiopia
in the 1930s when that invasion occurred
the people of Mexico donated money and
sent it to the people of Ethiopia
something like 80 years later Mexico had
this horrendous series of earthquakes
lots of dead people lots of injury lots
of suffering the people of Ethiopia even
though they were in a famine collected
money and sent money to Mexico because
they felt the necessary obligation to
reciprocate fast forward a few years
about right after the Civil War the
people of Charleston South Carolina were
using bucket brigades to fight fires the
people of New York including Union
soldiers heard about this and they
donated money to buy the city of
Charleston a fire truck that first fire
truck was on a boat that sank so they
had to raise money again and sent
another truck to Charleston
excuse me fire truck to Charleston fast
forward to right after 9/11 the people
of Charleston raised over half a million
dollars to buy a fire truck for the
people of New York because the people of
Charleston pledged that if New York ever
needed its help it would come through
135 years later reciprocation is a very
powerful force to make your enchantment
endure it means that you have to pay it
forward though and I will give you a
couple power tips about reciprocation
when you pay it forward when you do
something for somebody if they have any
social skills they will thank you right
they will express gratitude when that
occurs the optimal thing for you to say
is not you are welcome this is a lesson
from Robert seal Dini the optimal thing
for you to say when someone thanks you
for doing something is I know you would
do the same for
me because when you say that you are
doing two things one is you are saying
to the person you have class I did
something for you you’re thanking me and
I know you would do the same for me
because you have a classy guy you
believe in reciprocation that’s one
thing you’re saying the second thing
you’re saying is let me tell you
something you owe me I’m telling you
right now you owe me let’s just make it
clear you frickin owe me another power
tip you might think that when someone
owes you something you should hesitate
on letting them pay you back you know I
know you would do the same for me but
you don’t really have to it’s okay it’s
okay god bless you go on with your life
the better thing for you to do is enable
him to pay me back because you don’t
want them carrying around this guilt and
hesitation his whole life right so what
you want to do is relieve the guilt okay
you can shine my shoes you know you can
defragment my hard disk you can delete
the spam from my you know whatever you
want you can make my Windows 7 laptop
print whatever right so so by doing that
by doing that you alleviate the guilt
that he’s carrying upon his shoulders
what you’re doing is you are clearing
the deck you’re clearing the deck now
we’re equal I can do more favors for you
you can even do favors for me you’re
you’re relieving the pressure so let
people pay you back it’s good for them
it’s good for you
next recommendation is that you hire
infected people I think that any
infected founding team is probably more
important than a founding team that on
paper has a good background and work
experience or education that you know
that people who love the product or
service that’s more important than their
degrees it’s more
in their work experience focus on the
people who love the product or service
this means fundamentally you ignore
what’s irrelevant and in many cases
education and work experience is
irrelevant this is completely contrary
to what most VCS will tell you if you
have VCS further on into this course and
if you ask them well what are you
looking for they’re going to tell you it
I’ll tell you that right now you can
skip that lecture they’re going to say
we want proven teams with proven
technology and proven traction in other
words we want people who have founded
Cisco won a Nobel Prize and they’re
doing 50 million dollars in revenue
that’s an early-stage deal for a VC
today all right by contrast garages in a
different business we want unproven
teams unproven traction and unproven
technologies completely different world
the irrelevant thing is that you know
think about what an entrepreneur has to
go through so let’s take let’s take what
might seem very attractive to many
venture capitalist let’s say that on
your founding team is someone who is a
senior vice president at Microsoft most
VCS would salivate at the thought this
is a proven executive this executive has
been with Microsoft for ten years has
helped Microsoft grow etc etc but if you
peel the layers of the onion one level
lower you would see that that executive
during his or her career to Microsoft
had on average a war chest of fifty
billion dollars in Microsoft during that
timeframe they had a market market share
percentage of roughly 95% during that
person’s tenure at Microsoft that
person’s greatest fear was the Antitrust
Division of the US Department of Justice
now you’re going to take that prove an
executive for Microsoft and stick them
in a garage with $500,000 zero brand
awareness zero market share I would make
the case that that might not be the
ideal hire for you okay now you may be
wondering why in the world are there
diamond rings in this picture it is
because I am living proof of this
theory I graduated from Stanford in a
psych degree as I told you I attend the
UC Davis Law School and when you say you
attended a school it means you didn’t
finish I attended two weeks so I really
in fact I never got started actually and
and after that I went into the jewelry
business like I enrolled the following
year in an MBA program at UCLA and while
I was there I started working in the
jewelry business my first job was
literally counting diamonds so on paper
if you are Apple computers you know
recruiter you said alright so we need
someone to go out and convince the most
technical audience we have software
developers why they should write
Macintosh software I don’t think the
spec would say psych degree law school
drop-out marketing MBA currently
counting diamonds in Los Angeles you
know that might not be the sweet spot
okay but what enabled me to be
successful with Macintosh is I loved
Macintosh the scales were removed from
my eyes the first time I saw it you know
the clouds parted the angels started
playing their trumpets it was a
religious experience for me that’s why I
succeeded because it ain’t because of my
psych degree and it’s not because I
attended law school for two weeks and
it’s not because I have a marketing
degree from UCLA all right ignore the
irrelevant what is relevant is they love
the product second point you should hire
better than yourself very difficult for
most founders particularly engineering
types who believe that because of their
superior chip speed that they should be
the best salesperson the best finance
person the best marketing person and the
best engineering person you need to hire
people better than you a players by
definition hire a players B players hire
C players and C players hire D players
so pretty soon you’ll be surrounded by Z
players okay that’s what’s called the
bozo explosion
and what follows the bozo explosion is
the layoffs okay
so avoid the bozo explosion the third
thing is to apply the Stanford Shopping
Center test the way this works is
suppose you’re at Stanford shopping
center you see someone who’s being
recruited by your company who’s
interviewing at your company the
distance between you and the person when
you first see him or her is for me to
the back of the room that person up
there has not yet seen me but I have
seen them or her or her so at this point
I have this sort of choices I can rush
over and say hi how are you I know
you’re interviewing can I tell you more
about the company I really think you
should join our company we were just
going to kick some ass we’re going to
make me and we’re going to change the
world with our technology or you can say
Stanford Shopping Center isn’t that big
maybe I’ll bump into them if I do I’ll
say hello if I don’t I won’t say hello
the third reaction is I’m going to get
in my car and go to Valco shopping
center okay if your reaction to the job
candidate is not I’m going to run over
there and say hello to the person don’t
hire a person because when you’re
creating a start-up it is a family
it is a dysfunctional family honestly
but it is a family if you don’t feel the
compulsion to run over there and say
hello probably not the right person
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