As Founder and CEO of Motown Records, Berry Gordy devised an effective methodology to objectively evaluate and critique the label’s music. Gordy created a unique culture which deemphasized cronyism and encouraged open and honest debate regarding the subjective quality of the company’s creative output. During the 1960’s, Motown’s artistic success was unprecedented. From 1960 through 1971, Motown released 111 singles which entered Billboard’s top-ten ranking, of which 28 rose all the way to #1. Startups consistently identify more ideas and opportunities than they have the time or resources to pursue, such as potential partnerships, new products, entering emerging markets, etc. Motown’s disciplined quality control techniques can be mimicked by startups to objectively evaluate which initiatives should be pursued in the near-term, which should be considered in the future and which should be dismissed entirely.
Noted entrepreneurial blogger and respected Venture Capitalist, Mark Suster, who is also a Partner at GRP Partners, recently published a great post related to influence and persuasion, which is excerpted below: ---------------------------------------------- Mark Suster - Both Sides Of The Table I recently read a book I’d highly recommend to every reader of this blog called “Yes, 50 Scientifically Proven Ways to be Persuasive” by Robert B. Cialdini who is also author of a very well received book called “Influence” (which I plan to read). “Yes” was given to me by one of my favorite angel investor / seed VC’s to work with – John Greathouse of Rincon Venture Partners and author of the blog InfoChachkie that you should check out because it is filled with great info from a guy who has been a very successful operator. Rincon is part of the new breed of Seed Stage VCs and with the leadership of Jim Andelman has charted out the most authentic early-stage investment strategy in Southern California. Any SoCal entrepreneur raising early-stage money should put Rincon on their short list. John gave me the book after I spoke at his entrepreneurship class at UCSB. I was excited to read it because Robert Cialdini had been a speaker at Google when my wife worked there and she told me that many members of the senior management team at Google had been raving about his work. I decided not to be bothered by the cheesy title and to read it anyhow. You should, too. (no, I don’t take affiliate commissions!) ------- If you are not already a subscriber of Mark's Both Sides of the Table blog, you need to be. There is a reason Both Sides of the Table is one of the most well-read startup blogs. I strongly encourage you to check it out.
“Good Lord Boyet, my beauty, though but mean, Needs not the painted flourish of your praise: Beauty is bought by judgment of the eye, Not uttered by base sale of chapmen's tongues” William Shakespeare, British Playwright, from Love's Labour’s Lost, 1598 Intellectual Property (IP) is an ugly thing at a startup. It requires you to expend your two most valuable resources, your time and your money. Yet, it does nothing to help you execute your business model. However, to a Big Dumb Company (BDC), a startup’s IP is a thing of beauty. Although BDCs often act irrationally, in this instance, their perception of beauty is highly rational.
In early December of 1818, Jose de la Guerra devised a brilliant plan to thwart the French pirate Hippolyte de Bouchard who was lurking off the coast of Santa Barbara, contemplating an attack. Even though the Santa Barbara garrison was outmanned nearly six to one, Commandant de la Guerra tricked de Bouchard into believing that his force was formidable by repeatedly marching his small cavalry over a ridge that could be readily seen from the pirate’s ship. Each time the men crossed the hill and descended out of view, they changed clothing, mounted different horses and then paraded again before the pirates. This ruse caused the pirates to assume that each corps of horsemen was a different contingent of soldiers streaming into the Presidio. Believing he was outnumbered, Hippolyte aborted his plan to sack Santa Barbara and proceeded south where he subsequently pillaged San Juan Capistrano. Entrepreneurs can emulate de la Guerra’s strategy and make their adVenture appear far larger than reality and thus increasing its influence and market reach while discouraging competitive threats by creating an industry alliance.
In 1980, following the breakup of the American band The Eagles, Don Henley was asked when the group would reunite. His response, “When hell freezes over.” Surprisingly, hell froze over 14-years later, when The Eagles launched a highly lucrative tour and TV special. According to Guitarist Glenn Frey, "We never broke up, we just took a 14-year vacation." The story is familiar. A young band gets into music for the sex, drugs and fame. They record a few songs, have a couple hits and then hit the road. The rigors of touring, along with the instant notoriety and unending public scrutiny cause the band to disintegrate, often to the point of declaring they will never work together again. In many cases, once the money (and sex and drugs) run out, the band members forget the days of rancor and only recall the “good old days” when creating something from nothing was fun. Eventually one of the band mates swallows their pride, picks up the phone and proposes a reunion tour. A similar phenomenon occurs in the startup world, without the drugs or drama endemic in the music industry.
Below is a talk on Cloud Computing from the University of California Santa Barbara's Technology Management Program, by Michael Crandell. I think you will be surprised by what the CEO of this industry-leading cloud computing has to say about the future of the Cloud. Full Bio: Michael Crandell, CEO and Founder of Right Scale Michael Crandell is the CEO and a founder of RightScale, where he provides the vision and direction for the company as it pioneers innovative ways to bring the power of cloud computing to any organization. Crandell is a frequent speaker at cloud computing industry conferences, and he has played a major role in helping establish and promote openness and transparency in the cloud market. Prior to RightScale, he served as CEO at several Internet Software-as-a-Service (SAAS) companies and as executive vice president at eFax.com. Crandell received his B.A. from Stanford University and completed graduate studies at Harvard University.
During the height of the dotbomb bubble, numerous companies struck Barney deals. These spurious partnerships had no substance and were initiated for the sole purpose of sending out a press release. They were dubbed Barney deals because the structure of such relationships was so lightweight that the underlying agreements merely affirmed the companies’ mutual affection, as articulated in Barney’s theme song, “I love you, you love me. We’re a great big family.” Despite the pathetic nature of Barney deals, the big purple dinosaur offered sound business advice to entrepreneurs in a TV episode entitled, “Sharing means caring.” Barney realized that caring entails a willingness to share the risks and rewards associated with a mutually advantageous relationship. Leverage the purple dinosaur’s wisdom and seek business partnerships which are based upon sharing the results, as opposed to deals in which one party trades their money for promises.
In the first Star Wars film, released in 1977, the seemingly humble Ben Kenobi is confronted by a squad of Imperial Storm Troopers. With a slight hand gesture and a confident stare, he convinces the Storm Troopers that there is no reason to search his vehicle and to leave his droids unmolested. The audience later learns that “Ben” is actually Jedi Master Obi Wan Kenobi and the persuasion technique he deployed is called the “Force.” Unfortunately, non-fictional entrepreneurs cannot draw upon the Force. However, there are Jedi mind tricks that really do work - words, techniques and patterns of behavior that cause people to act in a highly predictable manner. Just like the Storm Troopers, victims of these mind tricks are usually unaware of the degree to which they have been manipulated.
In 1987, a representative of Michael Jackson approached the modest Sycamore Valley ranch house and knocked on the door. The owner of the ranch was shocked by the visitor’s message. He told the homeowner that he represented someone who wanted to purchase the ranch at a substantial premium over its current fair market value. He also indicated that the offer was non-negotiable and the home owner had to respond either “Yes” or “No” in a matter of hours. Although this is a somewhat unusual real estate transaction, it reflects a surprisingly common scenario in the world of mergers and acquisitions, with one important distinction.