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Everyone should carefully observe which way his heart draws him, and then choose that way with all his strength. continued >
The Art of the
by Guy Kawasaki
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GIST
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This manifesto is an excerpt from Guys the Start. To learn more, click here. new book, The Art of
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I use a top-ten list format for all my speeches, and I would love to begin this book with a top-ten list of the most important things an entrepreneur must accomplish. However, there aren't ten—there are only ve…
[ GREAT IDEAS FOR STARTING THINGS ]
create a product or service that makes the world a better place. So your rst task is to decide how you can make meaning.
MAKE MEANING. The best reason to start an organization is to make meaning—to
one can ever remember them—much less implement them. Instead, take your meaning and make a mantra out of it. This will set your entire team on the right course.
MAKE MANTRA. Forget mission statements; theyre long, boring, and irrelevant. No
GET GOING. Start creating and delivering your product or service. Think soldering
irons, compilers, hammers, saws, and AutoCAD—whatever tools you use to build products and services. Dont focus on pitching, writing, and planning.
starting, you have to gure out a way to make money. The greatest idea, technology, product, or service is short-lived without a sustainable business model.
DEFINE YOUR BUSINESS MODEL. No matter what kind of organization youre
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WEAVE A MAT (MILESTONES, ASSUMPTIONS, AND TASKS). The nal step is
to compile three lists: (a) major milestones you need to meet; (b) assumptions that are built into your business model; and (c) tasks you need to accomplish to create an organization. This will enforce discipline and keep your organization on track when all hell breaks loose—and all hell will break loose.
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MAKE MEANING
I have never thought of writing for reputation and honor. What I have in my heart must come out; that is the reason why I compose.
— Ludwig van Beethoven
Many books about entrepreneurship begin with a rigorous process of self-examination, asking you to determine if you are truly up to the task of starting an organization. Some typical examples are: Can you work long hours at low wages Can you deal with rejection after rejection
Can you handle the responsibility of dozens of employees The truth is, it is impossible to answer questions like this in advance, and they ultimately serve no purpose. On the one hand, talk and bravado are cheap. Saying youre willing to do something doesnt mean that you will do it. On the other hand, realizing that you have doubt and trepidation doesnt mean you wont build a great organization. How you answer these questions now has little predictive power regarding what youll actually do when you get caught up in a great idea.
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The truth is that no one really knows if he is an entrepreneur until he becomes one—and sometimes not even then. There really is only one question you should ask yourself before starting any new venture: Do I want to make meaning Meaning is not about money, power, or prestige. Its not even about creating a fun place to work. Among the meanings of "meaning" are to Make the world a better place. Increase the quality of life. Right a terrible wrong. Prevent the end of something good.
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Goals such as these are a tremendous advantage as you travel down the dicult path ahead. If you answer this question in the negative, you may still be successful, but it will be harder to become so because making meaning is the most powerful motivator there is. Its taken me twenty years to come to this understanding. In 1983, when I started in the Macintosh Division of Apple Computer, beating IBM was our reason for existence. We wanted to send IBM back to the typewriter business holding its Selectric typewriter balls. In 1987, our reason for existence became beating Windows and Microsoft. We wanted to crush Microsoft and force Bill Gates to get a job ipping sh at the Pike Place Market.
1 If only defeating sexism were as simple as throwing in an occasional he/she, she, her, or hers. I use the masculine pronouns merely as a shortcut. Successful entrepreneurship is blind to gender. Dont look for sexism where none exists
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Guy has more to say in his new book, THE ART OF THE START.
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In 2004, I am a managing director in an early-stage venture capital rm called Garage Technology Ventures. I want to enable people to create great products, build great companies, and change the world. The causation of great organizations is the desire to make meaning. Having that desire doesnt guarantee that youll succeed, but it does mean that if you fail, at least you failed doing something worthwhile.
EXERCISE
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COMPLETE THIS SENTENCE: If your organization never existed, the world would be worse o because
MAKE MANTRA
Close your eyes and think about how you will serve your customers. What kind of meaning do you see your organization making Most people refer to this as the "Why" or mission statement of an organization. Crafting a mission statement is usually one of the rst steps entrepreneurs undertake. Unfortunately, this process is usually a painful and frustrating experience that results in exceptional mediocrity. This is almost inevitable when a large number of people are commissioned to craft something designed to make an even larger number of people (employees, shareholders, customers, and partners) happy.
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The fundamental shortcoming of most mission statements is that everyone expects them to be highfalutin and all-encompassing. The result is a long, boring, commonplace, and point2 less joke. In The Mission Statement Book, Jerey Abrams provides 301 examples of mission statements, which demonstrate that companies are all writing the same mediocre stu. To wit, this is a partial list of the frequency with which mission statements in Abramss sample contained the same words: Best ………………………… 94 Communities …………… 97 Customers ……………… 211 Excellence ………………… 77 Leader …………………… 106 3 Quality …………………… 169
Fortune (or Forbes, in my case) favors the bold, so Ill give you some advice that will make life easy for you: Postpone writing your mission statement. You can come up with it later when youre successful and have lots of time and money to waste. (If youre not successful, it wont matter that you didnt develop one.)
TIP: Click on an underlined hyperlink to visit that this, visit ( i ) site. For more tips like
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If you insist on creating a mission statement, go to http://artofthestart.com and click on the mission statement generator link http://unitedmedia.com/comics/dilbert/career/bin/ms2.cgi . This will take you to the Dilbert mission statement generator and save you thousands of dollars. Jerey Abrams, The Mission Statement Book (Berkeley: Ten Speed Press, 1999), 25–26.
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Instead of a mission statement and all the baggage that comes with it, craft a mantra for your organization. The denition of mantra is: A sacred verbal formula repeated in prayer, meditation, or incantation, such as an invocation of a god, a magic spell, or a syllable or portion of scripture containing 4 mystical potentialities. What a great thing a mantra is! How many mission statements evoke such power and emotion The beauty of a mantra is that everyone expects it to be short and sweet. (Arguably, the worlds shortest mantra is the single Hindi word Om.) You may never have to write your mantra down, publish it in your annual report, or print it on posters. Indeed, if you do have to "enforce" your mantra in these ways, its not the right mantra. Following are ve examples that illustrate the power of a good mantra: 5 Authentic athletic performance (Nike). 6 Fun family entertainment (Disney). 7 Rewarding everyday moments (Starbucks). Think (IBM). Winning is everything (Vince Lombardis Green Bay Packers)
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The American Heritage Dictionary of the English Language, 4th ed., s.v. mantra. Scott Bedbury, A New Brand World: 8 Principles for Achieving Brand Leadership in the 21st Century (New York: Viking, 2002), 51. Ibid., 52. Ibid., 53.
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Compare the Starbucks mantra, "Rewarding everyday moments," to the companys mission statement, "Establish Starbucks as the premier purveyor of the nest coee in the world while maintaining our uncompromising principles while we grow." Which is more memorable
EXERCISE
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In only the space provided, write your organizations mantra:
Imagine that someone asks your parents or your organizations receptionist what you do. 8 Can it get any better than a three-word mantra such as "Authentic athletic performance" A nal thought on mantras: Dont confuse mantras and tag lines. A mantra is for your employees; its a guideline for what they do in their jobs. A tag line is for your customers; its a guideline for how to use your product or service. For example, Nikes mantra is "Authentic athletic performance." Its tag line is "Just do it."
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Actually, it could. Back in the early days, we toyed with "We take the FU out of funding" for Garages mantra, but we rejected it because it was too long. :-)
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EXERCISE The following chart contains the real mission statements of several organizations, and hypothetical mantras that I made up for them. Which powerful do you think is more
ORGANIZATION Southwest Airlines
REAL MISSION STATEMENT "The mission of Southwest Airlines is
HYPOTHETICAL MANTRA Better than driving.
dedication to the highest quality of
of warmth, friendliness, individual pride, and Company Spirit." Coca-Cola Wendys "The Coca-Cola Company exists to benet and refresh everyone it touches." "The mission of Wendys is to deliver Refresh the world. Healthy fast food.
Customer Service delivered with a sense
superior quality products and services for our customers and communities through leadership innovation and partnerships." respond to emergencies."
Red Cross United States Air Force United Way (Hawaii)
"To help people prevent, prepare for and "To defend the United States and protect its interests through aerospace power." "The purpose of Aloha United Way is to
Stop suering. Kick butt in air and space. Bring people together.
to create a healthier, more compassionate community." March of Dimes "March of Dimes researchers, volunteers,
provide leadership to bring people together
work together to give all babies a ghting chance against the threats to their health:
educators, outreach workers and advocates
Save babies.
prematurity, birth defects, low birthweight."
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GET GOING
The third step is not to re up Word to write a business plan, launch PowerPoint to craft a pitch, or boot Excel to build a nancial projection. Wrong, wrong, wrong! My goal in giving you this advice is not to reduce the sales of Microsoft Oce—remember, Im o the anti-Microsoft podium. Theres a time for using all three applications, but its not now. What you should do is (a) rein in your anal tendency to craft a document and (b) implement. This means building a prototype, writing software, launching your Web site, or oering your services. The hardest thing about getting started is getting started. (This is as true for a writer as it is for an entrepreneur.) Remember: No one ever achieved success by planning for gold.
Don't wait to develop the perfect product or service. Good enough is good enough.
You should always be selling—not strategizing about selling. Dont test, test, test—thats a game for big companies. Dont worry about being embarrassed. Dont wait to develop the perfect product or service. Good enough is good enough. There will be plenty of time for renement later. Its not how great you start—its how great you end up. The enemy of activation is cogitation, and at this stage, cogitating the "strategic" issues of research and development is a problem. Questions like, "How far can we leap ahead " "What if everyone doesnt like what we do " and "Should we design for a target customer or make what we would want to use " are beside the point when youre getting a new venture o the ground.
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Instead, observe these key principles of getting going:
THINK BIG. Set your sights high and strive for something grand. If youre going to change the at least ten times better than the status quo. When Je Bezos started Amazon.com, he didnt build a bookstore with a paltry 25,000 more titles than the 250,000-title brick-and-mortar bookstores. He went to 3,000,000 titles in an online bookstore. world, you cant do it with milquetoast and boring products or services. Shoot for doing things
FIND A FEW SOULMATES. History loves the notion of the sole innovator: Thomas Edison (light bulb), Steve Jobs (Macintosh), Henry Ford (Model T), Anita Roddick (The Body Shop), Richard Branson (Virgin Airlines). History is wrong. Successful companies are started, and made
successful, by at least two, and usually more, soulmates. After the fact, one person may come to be recognized as "the innovator," but it always takes a team of good people to make any venture work.
POLARIZE PEOPLE. When you create a product or service that some people love, dont
be surprised when others hate you. Your goal is to catalyze passion—pro or anti. Dont be
oended if people take issue with what youve done; the only result that should oend (and
scare) you is lack of interest. Car design is a good example of the love-versus-hate reaction; consider the bifurcation of peoples reactions to cars such as the Mini Cooper, Inniti Fx 45, and Toyota Scion xB. People are either devoted fans or relentless critics, and thats good. DESIGN DIFFERENT. Depending on what management fad is hot, you might be tempted to
believe that there is only one ideal way to design products and services. This isnt true. There is
no single best way. Here are four dierent and valid approaches—and I am sure there are more.
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A.
"I WANT ONE." This is the best kind of market research—the customer and the designer are the same person. Therefore, the customers voice can reach the designers mind
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uncorrupted by corporate politics, reliance on the status quo, and market researchers. automobile of my dreams, decided to build it myself." B.
Example: Ferdinand Porsche said, "In the beginning I looked around and, not nding the
"MY EMPLOYER COULDN'T (OR WOULDN'T) DO IT." Not as romantic as "I want one," but this is a credible path. You already understand the customer base, competition, supply product or service and get customers, but many questions are already answered. For such as Checkpoint after developing security software for the military. sources, and industry contacts because of your background. You still need to build the example, alumni of Unit 8200 of the Israeli Defense Forces went on to create companies
C.
"WHAT THE HELL—IT'S POSSIBLE!" This theory isnt popular when times are tough,
and microscopes are ourishing. At these times, the world has turned conservative and leaps are seldom proven in advance. For example, when Motorola invented cellular
demands that every market be "proven." Markets for curve-jumping, paradigm-shifting telephones, no one leaped to buy them. At that time, portable phone was an oxymoron because phones were always attached to places. There was no market for phones that customers could move. D.
the idealistic notion that you can make the world a better place by doing something new.
"THERE MUST BE A BETTER WAY." The organization born of this philosophy is based on
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Forbes FYI (Winter 2003): 21.
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In many cases, the founders had backgrounds with no logical connection to the business. wanted to implement a system for a "perfect market" for the sale of goods. (The story of his girlfriend wanting to sell Pez dispensers was an after-the-fact PR tale.)
They simply got an idea and decided to do it. Example: eBay. Pierre Omidyar, the founder,
uncertainty about exactly what you should create and exactly what customers want. In these
USE PROTOTYPES AS MARKET RESEARCH. In the early days of an organization, there is high
times, traditional market research is useless—there is no survey or focus group that can predict
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customer acceptance for a product or service that you may barely be able to describe. Would you buy a new computer with no software, no hard disk, and no color that simulates the real world— including a trash can immediately get it to market, and iterate quickly. If you wait for ideal circumstances in which you have all the information you need (which is impossible), the market will pass you by. The wisest course of action is to take your best shot with a prototype,
The expected outcome of the "get going" principle is a rst release of a product or service. Remember: it wont be perfect. But dont revise your product to get prospective customers to love it. Instead, revise it because customers already love it. Let me put it in religious terms: Some people believe that if they change, God will love them. Others believe that since God loves them, they should change. The latter theory is the prototype to keep in mind for how to get going and keep going for startups.
10 This isnt how we positioned the rst Macintosh, but its a pretty accurate description of what we had.
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DEFINE YOUR BUSINESS MODEL
You want to make meaning. Youve come up with a mantra. Youve started prototyping your product or service. The fourth step is to dene a business model. To do this you need to answer two questions: Who has your money in their pockets How are you going to get it into your pocket These questions lack subtlety, but they are a useful way to consider the reality of starting an organization—even, and perhaps especially, not-for-prots, which have to ght for money just to stay alive. You cant change the world if youre dead, and when youre out of money youre dead. More elegantly stated, the rst question involves dening your customer and the pain that he feels. The second question centers around creating a sales mechanism to ensure that your revenues exceed your costs. Here are some tips to help you develop your business model:
BE SPECIFIC. The more precisely you can describe your customer, the better. Many entrepreneurs are afraid of being "niched" to death and then not achieving ubiquity.
However, most successful companies started o targeting specic markets and grew (often unexpectedly) to great size by addressing other segments. Few started o with grandiose goals and achieved them.
KEEP IT SIMPLE. If you cant describe your business model in ten words or less, you dont by using simple, everyday terminology. Avoid whatever business jargon is currently hip
have a business model. You should use approximately ten words—and employ them wisely
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(strategic, mission-critical, world-class, synergistic, rst-mover, scalable, enterprise-class, charges a listing fee plus a commission. End of story.
etc.). Business language does not make a business model.11 Think of eBays business model: It
COPY SOMEBODY. Commerce has been around a long time, and by now clever people have
pretty much invented every business model thats possible. You can innovate in technology, business model to one thats already successful and understood. You have plenty of other battles to ght.
markets, and customers, but inventing a new business model is a bad bet. Try to relate your
My nal tip is that you ask women—and only women. My theory is that deep in the DNA of men is a "killer" gene. This gene expresses itself by making men want to kill people, animals, and plants. To a large degree, society has repressed this gene; however, starting an organization whose purpose is to kill another organization is still socially acceptable. Hence, asking a man about a business model is useless because every business model looks good to someone with the Y chromosome. For example, Sun Microsystems wants to kill Microsoft. When is the last time you bought a computer based on whom the manufacturer wanted to kill
11 Inspired by Michael Shermer, Why People Believe Weird Things (New York: A.W.H. Freeman, 2002), 49.
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Women, by contrast, dont have this killer gene. Thus, they are much better judges of the viability of a business model than men are. Dont agree with me The book The Darwin Awards provides irrefutable proof of womens greater common sense. These awards commemorate "those individuals who have removed themselves from the gene pool in a sublimely idiotic 12 fashion." For example, in 1998 two construction workers fell to their demise after cutting a circular 13 hole in the oor while they were standing in the middle of the circle. The Darwin Awards contains nine chapters about the stupidity of men, and one chapter about the stupidity of women. I rest my case.
EXERCISE
STEP 1 Calculate your monthly costs to operate your organization. STEP 2 STEP 3 Calculate the gross prot of each unit of your product. Divide the results of Step 1 by the results of Step 2. STEP 4 Ask a few women if they think you have a chance of selling that many units. If they dont, you dont have a business model.
12 Wendy Northcutt, The Darwin Awards II (New York: Dutton, 2001), 2. 13 Ibid., 70.
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WEAVE A MAT Tasks) (Milestones, Assumptions, and
One denition of mat is "a heavy woven net of rope or wire cable placed over a blasting site 14 to keep debris from scattering." Preventing scattering is exactly what you need to do as the fth, and nal, step of launching your enterprise. In this case, MAT stands for milestones, 15 assumptions, and tasks. The purpose of compiling the MAT is to understand the scope of what youre undertaking, test assumptions quickly, and provide a method to nd and x the large aws in your thinking.
MILESTONES
For most people a startup looks as if it must achieve a seemingly unlimited number of goals. However, out of these goals are some that stand head and shoulders above the others. These are the organizations milestones—they mark signicant progress along the road to success. There are seven milestones that every startup must focus on. If you miss any of them, your organization might die.
14 The American Heritage Dictionary of the English Language, 4th ed., s.v. mat. 15 Inspired by Rita Gunther McGrath and Ian C. MacMillan, "Discovery-Driven Planning," Harvard Business Review (July–August 1995).
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1 2 3 4 5 6 7
Prove your concept. Complete design specications. Finish a prototype. Raise capital. Ship a testable version to customers. Ship the nal version to customers. Achieve break-even.
There are seven milestones that every startup must focus on. If you miss any of them, your organization might die.
These milestones apply to every kind of business. For example, a new school can prove its concept by seeing if two teachers, working as a team, using a new curriculum, can provide more individualized instruction and improve learning in a test classroom. With this proof of concept, the school can then complete the design of its curriculum, raise funds, roll out the prototype, and start teaching classes.
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There are other tasks (well come to them soon) that are also important to the survival of the organization, but none are as important as these milestones. The timing of these milestones will drive the timing of just about everything else you need to do, so spend 80 percent of your eort on them.
Asking a man about a business model is useless because every business model looks good to someone with the Y-chromosome.
EXERCISE MILESTONES Take down the corny framed mission statement in your lobby and replace it with a printout of guests can read it. EXTRA CREDIT Repeat this procedure for every new product or service. Create a wall of fame to track the history of your organization. target dates for completion of the seven milestones listed above. Make sure that employees and
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Assumptions
Second, create a comprehensive list of the major assumptions that you are making about the business. These include factors such as: product or service performance metrics market size gross margin sales calls per salesperson conversion rate of prospects to customers length of sales cycle return on investment for the customer technical support calls per unit shipped payment cycle for receivables and payables compensation requirements prices of parts and supplies customer return on investment
Continuously track these assumptions, and when they prove false, react to them quickly. Ideally, you can link these assumptions to one of the seven milestones discussed previously. Thus, as you reach a milestone, you can test an assumption.
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Tasks
Third, create another comprehensive list—this time of the major tasks that are necessary to design, manufacture, sell, ship, and support your product or service. These are necessary to build an organization, though they are not as critical as the seven milestones. They include: renting oce space nding key vendors setting up accounting and payroll systems ling legal documents purchasing insurance policies
Continuously track…assumptions, and when they prove false, react to them quickly.
The point of the list of tasks is to understand and appreciate the totality of what your organization has to accomplish, and to not let anything slip through the cracks in the early, often euphoric days.
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Minichapter: The Art of Internal Entreprenuering
Innovation often originates outside existing organizations, in part because successful organizations acquire a commitment to the status quo and a resistance to ideas that might change it. —Nathan Rosenberg
A large number of aspiring entrepreneurs currently work for big companies. Like all entrepreneurs, they dream of creating innovative products or services and wonder if this can be done internally. The answer is yes. The purpose of this minichapter is to explain how. The "arts" that this book describes are equally appropriate for internal entrepreneurs—they, too, must innovate, position, pitch, write business plans, bootstrap, recruit, raise capital, partner, establish brands, make rain, and be mensches. But there are special recommendations that apply in this case. Ironically, many independent entrepreneurs envy the employees of big companies—they think that these lucky souls have humongous nancial resources, large sales forces, fully equipped labs, scalable factories, and established brands, plus medical and dental benets, at their disposal. How wonderful it would be, guys in garages muse, to invent a new product or service with the luxury of such an infrastructure already in place.
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Please dont be afraid; PASS THIS ALONG to as many people as you want!
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Guess again. Creating a new product or service inside such a beast is not necessarily easier; the challenges are just dierent. I happen to have been part of a "best-case" scenario: the Macintosh Division of Apple. I can explain the success of this internal entrepreneurial eort in two words: Steve Jobs. His o-the-scale design talents, maniacal attention to detail, and reality-distorting personality (plus co-founder status) made Macintosh successful. Were it not for Steve Jobs, Macintosh would not exist—or it would have taken the form of an Apple II with a trash can.
Anyone with guts, vision, and political savvy should be able to set up an entrepreneurial outpost in an established business.
But if it takes a Steve Jobs to innovate within large companies, you are undoubtedly thinking, we might as well give up right now. While that kind of visionary is in short supply in any business, anyone with guts, vision, and political savvy should be able to set up an entrepreneurial outpost in an established business. I collaborated on this minichapter with Bill Meade, a close friend who helped Hewlett-Packard organize its substantial vault of intellectual property. We came up with this list of recommendations for internal entrepreneurs.
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should remain the betterment of the company. Internal entrepreneurship isnt about grabbing attention, building an empire, or setting up a way to catapult out of the company. When you have a good idea for a product or service, it will attract a large number of employees, from
PUT THE COMPANY FIRST. The internal entrepreneurs primary, if not sole, motivation
the bottom up. They will support you if youre doing it for the company, but not if its for your totally dependent on what the "vice presidents" say.
personal gain. If you can attract a large number of rank-and-le supporters, you might not be
product or service that would put an end to existing products or services. Still, its better that its you whos killing your companys cash cows than a competitor or two guys in a garage. Macintosh killed Apple II. Would it have been better for Apple if a competitor had created
KILL THE CASH COWS. Dont announce this widely, but your charter is often to create the
Macintosh No way. This recommendation is another reason why its so important that youve cash cows, someone external will.
put the company rst: What youre doing is bound to be controversial. But if you dont kill the
can. Awareness of their eorts makes it easier to raise money, establish partnerships, close sales, and recruit employees. However, the opposite holds true for internal entrepreneurs.
STAY UNDER THE RADAR. Two guys in a garage should try to get as much attention as they
You want to be left alone until either your project is too far along to ignore or the rest of the to understand what youre trying to do. This is because the higher you go, the more people want to maintain the status quo and protect their positions.
company realizes that its needed. The higher you go in a company, the fewer people are going
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have paid their dues and are safe from everyday petty politics. They are relatively untouchable and usually have the attention and respect of top management. Internal entrepreneurs should nd a godfather to support their projects by providing advice, technical and marketing insights, and protection—if it comes to the point where you need protection.
FIND A GODFATHER. In many companies, there are godfather gures. These are people who
company, will die by a thousand cuts as each department manager explains why this new
GET A SEPARATE BUILDING. An internal entrepreneur, sitting in the main ow of a big
project is a bad idea. "The new always looks so puny—so unpromising—next to the reality of the massive, ongoing business."16 The Macintosh Division started in a building that was far enough away from the rest of Apple that it stayed out of the daily grind, but was close enough to obtain corporate resources. A separate building will keep your eorts under the radar and pukes is between one-quarter mile and two miles—that is, close enough to get to, but far enough to discourage overly frequent visits. foster ésprit de corps among your merry band of pirates. The ideal distance from the corporate
is too big to innovate" is an idealist who would like to see it happen. Good people in big
GIVE HOPE TO THE HOPEFUL. Inside every corporate cynic who thinks that "this company
companies are tired of being ignored, forgotten, humiliated, and forced into submission. They may be trampled, but they are not dead. When you show them that youre driving a stake in the heart of the status quo, you will attract support and resources. Then your goal is to
advance these people from wanting to see innovation happen to helping you make it happen.
16 Peter F. Drucker, Innovation and Entrepreneurship: Practice and Principles (New York: Harper & Row, 1985), 162.
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good thing for internal entrepreneurs. Whether caused by external factors such as changes in create an opportunity for your eorts. Eective internal entrepreneurs anticipate these shifts and are ready to unveil new products or services when they occur: "Look what weve been six months, and a team of analysts, I can come up with a new product strategy."
ANTICIPATE, THEN JUMP ON, TECTONIC SHIFTS. Structural deformations in a company are a
the marketplace or internal factors such as a new CEO, tectonic shifts signal changes and may
working on." By contrast, corporate pukes say, "Now I see the shift. If you give me permission,
BUILD ON WHAT EXISTS. The downside of trying to innovate within a big company is clear existing infrastructure to make innovation easier—start by stealing, if you have to. Youll not only garner resources, but also make friends as other employees begin to feel as if they are part of your team. If you try to roll your own solutions (as an extreme example, building your internal enemies—there will be enough enemies in the marketplace. and well documented, but there are also benets to doing so. Dont hesitate to utilize the
own factory), youll only make enemies. The last thing a startup inside a big company needs is
suddenly going to take notice of you and question the reasons for your projects existence. If (1) (2) collecting data about how much youve spent and how much youve accomplished and
COLLECT AND SHARE DATA. The day will inevitably arrive when a bean counter or lawyer is
youre lucky, this will happen later rather than sooner, but it will happen. Prepare for that day by:
late to get the data once the antibodies appear.
then sharing it openly. In big companies, data suppresses antibodies, but it might be too
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LET THE VICE PRESIDENTS COME TO YOU. Quick question: Do you think that your rst step of the last steps. A vice president will "own" your idea and support it more if he "discovers" it and then approaches you about sponsoring it. You may have to ensure that a vice president permission to get started. "accidentally" makes that discovery when the time is right, but this is not the same as seeking should be to get your vice president to sign o on your project It shouldnt be. This is one
develop new products and services. Unfortunately, the very cohesiveness that makes it so
DISMANTLE WHEN DONE. The beauty of an internal entrepreneurial group is that it can rapidly
eective can lead to its downfall later if it remains separate (and usually aloof) from the rest
of the organization. Its eectiveness declines further as its members come to believe that only they "know" what to do, and the entrepreneurial group creates its own, new bureaucracy.17 If larger organization. Then create a new group to jump ahead again. the product or service is successful, consider dismantling the group and integrating it into the
prescribes actions that are contrary to what theyve experienced, learned, and maybe even
REBOOT YOUR BRAIN. Many internal entrepreneurs will nd that the rest of this book
taught in big companies. The reality is that starting something within an existing company table (next page) will prepare you for whats to come:
requires adopting new patterns of behavior—essentially, rebooting your brain. The following
17 Andrew Hargadon, How Breakthroughs Happen: The Surprising Truth About How Companies Innovate (Boston: Harvard Business School Press, 2003), 116–17.
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TOPIC Positioning Pitching Writing a
BIG COMPANY Being all things to all people Sixty slides, 120 minutes, and fourteen-point font from historical data Two hundred pages of extrapolation Staying in a Hyatt Regency instead of a Ritz Carlton Corporate headhunters screening
STARTUP Finding a niche and dominating it Ten slides, twenty minutes, and thirty-point font thinking Twenty pages of wishful Staying with a college buddy instead of a Motel Six Sucking in people who "get it" careers for stock options and are willing to risk their
Business Plan Bootstrapping Recruiting
Big Four track records Partnering Branding Rainmaking Being a mensch that the press will like
candidates with Fortune 500 or
Negotiating I-win/you-lose deals Advertising during the SuperBowl Spis for resellers and commissions for sales reps Calling the legal department
Finding a way to increase sales by piggybacking on others Evangelizing in the trenches Sucking up, down, and across Helping people who cant help you
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FAQ (FREQUENTLY AVOIDED QUESTIONS)
Q. I ADMIT IT: I'M SCARED. I cant aord to quit my current job. Is this a sign that I dont have what it takes to succeed Am I not truly committed You should be scared. If you arent scared, something is wrong with you. Your fears are not A. a sign that you dont have the right stu. In the beginning, every entrepreneur is scared. Its just that some deceive themselves about it, and others dont. You can reduce these fears by diving into the business and making a little progress every day. One day youll wake up and
you wont be afraid anymore—or at least youll have a whole new set of fears. No matter what, never admit that youre scared to other employees. A CEO can never have a bad day. But dont go overboard, either, and act as if you have no concerns, because then they will know youre scared sti. Q. A.
SHOULD I SHARE MY SECRET ideas with anybody other than my dog dog. There is much more to gain—feedback, connections, opened doors—by freely discussing your idea than there is to lose. If simply discussing your idea makes it indefensible, you dont have much of an idea in the rst place. (See the FAQ section of Chapter 7, "The Art of Raising Capital," for a detailed discussion of nondisclosure agreements.) The only thing worse than a paranoid entrepreneur is a paranoid entrepreneur who talks to his
Q. A.
HOW FAR ALONG should I be before I start talking to people about what Im doing and background task. The more people you talk to, the richer your thoughts will be. If its just you staring at your navel, all youll see is lint building up. Start right away. By doing so youll be constantly mulling over your idea—as both a foreground
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Q.
HOW DO YOU KNOW IF IT'S TIME TO GIVE UP rather than continuing to pursue a doomed venture The old platitude is that good entrepreneurs never give up. This is ne for books and
A.
speeches, but not for the real world. If three close friends tell you to give up, you should listen. As the saying goes, when three people tell you youre drunk, you should take a cab home. Its okay to fail as long as you try again. Q.
I THINK THAT I HAVE A GREAT IDEA, but I dont have a business background. What should I do now First, if all youve done is come up with a great idea—for example, "a new computer operating
A.
system thats fast, elegant, and bug free"— but you cant implement it, then you have nothing. In this case, dont waste anyones time until youve found other people who can do the engineering. Assuming that you can implement, there are two kinds of people you can recruit. First, you can get a mentor. This would be an older person who is willing to coach you from time to time but never actually do any work. Second, you could get a business partner. This is someone whos willing to work side by side with you—even on a part-time basis—whose skill set complements yours. Either kind of person can make a big dierence in your business. Q.
and an oce A.
WHEN SHOULD I WORRY about looking like a real business, with business cards, letterhead,
Make business cards and letterhead immediately. Spend a few bucks and get them designed by a professional or dont do them at all. Ensure that the smallest type size is twelve points. team. An oce isnt necessary until customers are coming to see you, or you run out of space for the
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Q. A.
DO I NEED A WEB SITE Yes, particularly if youre going to raise money, serve lots of customers, change the world in a
big way, and achieve liquidity. Customers, partners, and investors will look for your Web site from the very start.
RECOMMENDED READING
Christensen, Clayton. The Innovators Dilemma: When New Technologies Cause Great Films to Fail.
New York: HarperBusiness, 1997. 1985.
Drucker, Peter F. Innovation and Entrepreneurship: Practice and Principles. New York: Harper & Row, Hargadon, Andrew. How Breakthroughs Happen: The Surprising Truth About How Companies
Innovate. Boston: Harvard Business School Press, 2003. Kuhn, Thomas. The Structure of Scientic Revolutions. Chicago: University of Chicago Press, 1962.
Shekerjian, Denise. Uncommon Genius: How Great Ideas Are Born. New York: Penguin Books, 1990. Ueland, Brenda. If You Want to Write. St. Paul: Graywolf Press, 1987. Utterback, James M. Mastering the Dynamics of Innovation: How Companies Can Seize Opportunities
in the Face of Technological Change. Boston: Harvard Business School Press, 1994.
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ABOUT THIS AUTHOR Guy Kawasaki is CEO of http://garage.com, a Silicon Valley based rm that assists high-technology startups nd startup capital using the Internet. Prior to this position, Kawasaki was an Apple Fellow at Apple Computer, Inc. A noted columnist (Forbes), speaker, and founder of various personal computer puter. Kawasaki is the author of seven books: The Macintosh Way, Database 101, The Computer companies, Kawasaki was one of the individuals responsible for the success of the Macintosh com-
Curmudgeon, How to Drive Your Competition Crazy, Hindsights, and Selling the Dream. His most recent book is called Rules for Revolutionaries, published in January. 1999.
DOWNLOAD THIS BUY THE BOOK For more details or Kawasakis book, click here. This manifesto is available from http://changethis.com/1.ArtOfTheStart SEND THIS Click here to pass along a copy of this manifesto to others. http://changethis.com/1.ArtOfTheStart/email
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