Thursday, June 30, 2005

Difficult Times Enable Growth

I was talking to a close friend of mine who runs an executive development institute. I was trying to get some perspective on my current situation. Since Aperon I have faced a number of challenges - from starting up a new company that I had to shut down to working with a company where the culture has been a mismatch. After a career of tremendous success, you begin to wonder when things do not go as expected. My friend, Scott, explained that in his discussions with executives, learning is accelerated when a person goes through difficult times. It's when they have to kill a program they advocated or get fired from a position. This is when they take stock in themselves, learn about how they reacted to a difficult situation, make adjustments and move forward. In Giants of Enterprise, Richard Tedlow describes how Henry Ford failed twice before getting it right. Investors in his first 2 companies lost but kept investing at they believed in Ford. Similarly Lee Iaccoca was fired from Ford before regaining his bearings and succeeding at Chrysler. Thomas Watson was fired from NCR in a desk burning incident meant to embarrass, but only inspired. Scott explained that this is the way of Silicon Valley and that resilience and the school of hard knocks are invaluable in moving forward.

This helped me take stock. I have learned about how businesses succeed and fail, up close and personal, in early stage companies as well as much larger ones. I have learned how to motivate when you can pay your employees vs. when the payment is in future dreams. I have seen the difficulties of work/life balance in relationship to the demands of a startup. Also, the need for strict capital controls in a financial company. There are many ways to motivate: one is positive, another is negative and finally there's schizophrenic. Each has differing sets of advantages and disadvantages.

Most importantly, great leaders learn by examining their strengths and weaknesses on a periodic basis. They are constantly measuring and fine tuning. Too many radical moves with jar the employees and create a haze. Yet no change at all breeds complacency and reduces effectiveness.

There is nothing worse than losing an investor's money. Even if the number is small, it affects your being. You want the investor to succeed because they have placed their confidence in you. In many cases they don't really understand what they are investing in. I have made most of my investors a great deal of money. In my recent venture, things did not go so well, but the downside was limited as I will not raise large amounts until I am sure the business will work.

I have learned that I need to be stronger in the way I manage my team, even co-founders that are investing their time and capital. It's much easier when your team reports to you, but the way to get people to move is to set goals and then execute. As you go along you recalibrate, but the important part is to have a set of written plans that are monitored.

The most important advice I received from Scott was to focus on the kind of position and industry that interested you most. If there's a dream job, go get the dream job. Don't make compromises for something that many provide some capital, security or a stepping stone experience. Know what you want and then go for what you want. You can lay out a set of options, but use these to understand what your true priorities are.

Based on this, I'm getting back to making the dream happen. I'm going back to creating and building the next cool company. I know what I need to do - now it's a matter of getting there.

Wednesday, June 15, 2005

How the Dream Made My Start-Up

Many of my B-School alums would talk about how fortunate I was to go through the start-up experience. It's the entrepreneurial dream that motivates so many. The idea of starting something that can change the world. Who wouldn't want to be a Bill Gates, Michael Dell, Steve Jobs or Andrew Carnegie?

The fact is, deep inside, most don't. Being a titan of industry means to go against the grain. It means seeing an underlying trend where no one else does. Then running against accepted wisdom. Most people who go to business want to jump on an established trend and ride it. Companies provide that assurance that people need. The goals are set from above. You might have a role in it, but your world is circumscribed so you may reach your goal in a comfortable manner. Established companies are based on momentum. This natural momentum of the company pushes it ahead in its already established market. A long as you are moving the company forward along an agreed path, you will do well. If not, life is more difficult.

Starting the company is much more difficult. You have to be a bit crazy. There is that fine line between crazy and genius and the entrepreneur rides it. Most peole are not in favor of your concept. If what you were favoring were true, many others would be doing the same thing. I would joke with my friends, "You are too smart to be an entrepreneur."

That's right, entrepreneurs are not particularly bright in the classic measures of intelligence. If they were, they would see how crazy it is to be pursuing a particular business. It like Kotter's book on the HBS Class of 85. Those that had GMAT scores in the bottom third had the highest net worth 20 years later. These are people who take risks and apply their energies in convincing a skeptical world that their ideas have merit.

My wife and I had similar notions about Aperon Biosystems and the need for a home use asthma management device. We saw analogs to the glucose monitoring, but if we know how difficult it would be to convince others, we probably would have done something else. The medical world is extremely skeptical. It is mostly because you are touching the body. To do that, you have to subject yourself to a whole slew of studies. If a study is designed the wrong way, your product could fail. Or you could run out of money making it succeed.

We went against the grain. Our technology had tremendous promise, but it had not been proven commercially. We had a disease state, asthma, that has a slew of established players with a number of therapeutics. However, the treatment cycle was and is broken. There is no way to measure whether therapeutics like corticosteroids are working. If we can measure changes in exhaled nitric oxide, a marker for airway inflammation, we can complete the feedback loop. People can only take the therapeutics they need and control the underlying condition. Imagine the freedom of having asthma under control. You may have the condition, but none of the symptom. The freedom from pain - the freedom from fear. This is the promise Bhairavi and I saw.

We found a few believers amongst the skeptics and one by one, built our case. Today, after raising another $15 million in an up round, we are now a more established startup. We are now up to $20 million in investor capital. We are getting ready to take our product through the paces to get to the home market where we can have the widest impact. There is a long way to go, but the underlying momentum is there.

Now I am not pretending to be anything like Gates, Carnegie, Kodak or any of those great titans. We are not even close to that stage, though I do see great potential in the asthma application of our technology. This whole game is about looking at the world and looking for places to change it. Once you have a base case with incredibly deep research, it is about believing in your solution and lining up all the resources necessary to make it happen. Like the all-Pro running back, you have to be willing to sacrifice your body to push the ball forward against all odds.

This is the key - believe in your dream and then throw you mind, body and soul into making it a reality.

Sunday, June 12, 2005

Crazy Train

You know that you've come of age when you see young girls dancing to Ozzy Osbourne's Crazy Train. Here's a song of rebellion - the guy was known eating small animals like bats on stage. Gimmick or not, he was someone your parents did not want you to listen to.

I'm sitting at my daughter's dance performance. All the sudden the senior (meaning 14-18) troupe is dancing to Crazy Train. They even employ ballet moves in the song. Then another group dances to "Dancing with Myself" by Billy Idol. Jazz moves, ballet? Of course I'm having fun because I enjoy the music, but then I think, "Were these songs ever intended to be danced to, especially in this way?"

In between performances, I go with my daughter to Jamba Juice. There Billy Joel's "You May be Right" is playing. It feels like manna from heaven. My music cool is this.

Then I realized, that 10 years from now, they'll be playing and dancing to rap...argh.

Thursday, June 09, 2005

More Little League

Today our team squeaked through with a hard fought 7-5 victory. It was a hard battle throughout, with many opportunities on both sides. Canaan had some amazing defensive moves to shut us down with bases loaded. My son was thrilled to be on a championship caliber team. I was thrilled to see the kids and parents so happy. At the same time, I felt for the other team. There were not ranked in the top 4, but they came on strong beating the #2 and giving us a run.

It's good that we did not blow them out. Our guys were a sluggish in the middle. They felt their record could sustain that. Well, that didn't happen. Now they know the next game is going to be competitive. They need to be sharp. We are going to have a practice tomorrow to keep them sharp - to work on the fundamentals. It's going to be no nonsense.

Saturday will be the big day. The kids are ready. They know they can win. It's all up to them now...

Monday, June 06, 2005

Coaching Lesson's: From Little League to Real Life

Today, my Little League team won our bracket for playoffs putting us in the final four. My son performed admirably, pitching a couple of innings and taking a wild ball in the arm to get on base. He is a 9 year old in a league with 9-12 year olds. Our record is better 13-3 and we have won every game by hitting the mercy rule. Thinking about today puts some perspective on the coaching and its relationship to life...

I don't run this team. I joined Willie, a manager with over 25 years experience in the field. While my teams have done well in instructional leagues, I have never been in the more competitive ones where we need to develop pitchers. Joining Willie was probably the smartest things I did. Even with my management background, I got the joy of watching how a good coach can get the best out of each player.

Willie has persona. He has a booming voice and a tough look. He expects the best out of each player. If you don't perform, you are going to hear it. Even if you do perform, he'll make some comments after some praise. Each player knows that he means well and don't mind the loud voice. It's because they know he wants them to play better. It is that expectation that makes people perform. They know that if they want to fool around, they can do it home. At practice, if you make a mistake, you'll hear it and maybe do a pushup.

Though this approach is not recommended by the Positive Coaching Alliance (PCA), it works. I see other coaches tolerate all sorts of simple errors - kids standing up in the outfield in the wrong spot, kids out of position in the infield, poor stance, slow reaction time, etc. It shows a tremendous lack of discipline that then permeates throughout the team. A good team feeds upon itself. When players see others perform, they do as well.

Willie is especially tough about hitting. He does not like strikeouts, especially when swinging at stuff way outside the strike zone. Pitchers are not throwing curves or sliders, so there's no excuse for a poor swing. It improves the odds of success. It also sends a psychological message - you can do it, if only you focus on the fundamentals.

The fundamentals are the key. We don't have elaborate plays at practice. No signals from the 3rd base coach. No clever bunts. We just focus on the fundamentals - over and over until it sinks in. You see, runs are scored when the little things don't happen. A player does not charge the ball, does not take the scoot steps or he tries to be fancy. That's not what this is about. We field, we bat, we take fly balls. Same stuff every time, yet when we go too long without a practice, all kinds of mistakes are made.

The other thing we did was develop pitchers. We came in with 2 great pitchers. Then we developed 3 more. Most teams settled for 1 or 2, so when one gets in trouble, they run out of gas quickly. Or because there are rules on how much a pitcher can play in a week, they'll have to start a weak one. It's really amazing. Usually teams will trot out their strong pitcher. We'll be held for a few runs in the early innings. Then, when they substitute, we'll end up killing them.

In our case, all 5 pitchers can shut the other side down. They all have different styles, but the push is there to make them pitch in a way that is consistent. They know what to do if they are sailing the ball or if its hitting the ground. They know that if they are down in the count to walk off the mound and catch their breath. It shows them and the other side, that they are in control.

Our batters have spent so much time working on the fundamentals of hitting, that they can hear the numbers in their head. "One (ready the bat), two (raise it up), three (step forward, level swing, squish the bug)." Now even the weaker batters are hitting. They feel confident. They want it. They are told to take the hit, so after being hit a couple of times, there no fear of the ball. The opposing pitcher knows that. It's a game of psychology.

Our players are no better than others. They are simply more practiced, more focused and calm. There's no panic when they are down. It is simply focus on the fundamentals - no cute stuff. We've heard so many comments about how good the team looks, but its because we have more practices and we are serious in practice. When kids know how to channel their energy, it feeds upon itself, spiraling into a positive powerful force.

There are a lot of life lessons here that even an experienced manager like me can learn. Keep it simple, stay serious, stay focused and stick to the fundamentals. It's the boring stuff that creates victory. Never letting up, even for a minute. This is the key to victory, it is the key to success...