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Entrepreneurship

The Philosopher Kings of Silicon Valley

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In startup land, getting out of the building and moving fast are prerequisites for finding a repeatable and scalable business model before the money runs out. Philosophy — oft maligned as self-indulgent and impractical — has no place in the world of startups, right? The philosopher kings of Silicon Valley may beg to differ.

These days Paul Graham is famed for conceiving the idea of startup accelerators and then launching the world’s first, Y Combinator. Graham came to prominence as the co-founder of Viaweb, arguably the first ever web-based application, which he and his co-founder Robert Morris (yes, that Robert Morris) sold to Yahoo! for $49 million in 1998. He’s also known for his work on the Lisp programming language (and his own dialect of it). Terman became aware of Graham in 2005, soon after the publication of his book, Hackers & Painters. A computer scientist friend, who was pursuing a somewhat esoteric Ph.D. topic at the time, introduced me to one of Graham’s eloquent, thoughtful essays, which span a number of topics from startups to how to argue, to practical philosophy. Yes, philosophy. Graham was a philosophy major at Cornell, prior to undertaking his Ph.D. in computer science at Harvard.

And he’s not the only member of the Valley elite with a philosophy degree. Reid Hoffman — LinkedIn founder, member of the PayPal mafia, partner at Greylock and perhaps the world’s foremost angel investor — gained a Masters degree in philosophy from Oxford. His good friend and fellow PayPal mafioso, Peter Thiel, obtained his philosophy degree from Stanford.

Here are a couple of videos from Forbes that show Hoffman and Thiel reminiscing about their time together at Stanford. They describe meeting each other for the first time in a philosophy class, then spending hours on the quadrangle debating “life, the universe and everything”, and seeking “truth”. The videos also show that, far from spurning “public intellectuals” as might happen in certain other entrepreneurial circles, these two billionaires want to foster a culture of intellectualism to help guide the future of their country and the world.

That video provides a taste of Thiel’s and Hoffman’s motivations. But they were only just getting started. The next video touches on Shakespeare, PayPal, Hoffman’s early social media startup, the importance of hiring fast learners, and the importance of novelty in tech startups.

Next time you’re struggling to figure out how to make a big dent in the universe with your own startup, maybe the answer is to take time out to “read the Tempest and talk about its implication in life”. While such discussions obviously didn’t lead Thiel and Hoffman directly to their billions, it is reasonable to suggest that it was practice for thinking about the possible implications their own ideas would have on the world. One gets the distinct sense from watching the videos that these guys wrap the usual nuts-and-bolts business thinking in a meta layer of thought that asks not merely how to achieve product/market fit, but what would a particular idea mean for the world if brought to fruition? The dollars made are a side-effect of having created something that moves the world in a positive direction.

Graham, Thiel and Hoffman are intellectual doers. For them, it seems, there is no contradiction between deep, contemplative, intellectual thought and getting stuff done. In fact, creating game-changing businesses like PayPal, Y Combinator and LinkedIn may demand this sort of thinking. Why? One reason might be that philosophy teaches its students useful ways of thinking, how to look at existing concepts from all angles to see their relation to other concepts, and how to treat fragile new ideas with the necessary patience and care so as to give them the opportunity to bloom. These are soft but important skills in the business of creating things that change the world for the better. Philosophy doesn’t have a monopoly over this kind of thinking; really, we’re using the specific to make a point about the general. But philosophy is somewhat unique in that it typically plays out almost entirely in the mind, which could explain why it is often maligned for its perceived impracticality.

Despite having no formal training in philosophy, many other Silicon Valley heavyweights exhibit similar traits: a desire to understand the world and human nature, a willingness to explore ideas fully before casting them off to one side, an appreciation of the indirect route, and a propensity to question the status quo.

Ev Williams, founder of Twitter, Blogger and Medium, spoke with Kevin Rose recently about, among other things, how to have big ideas. While not explicitly framed in philosophical terms, Williams seems to personify this sort of thinking. Here’s what Williams says in the interview at around the 46th minute:

Any big idea is going to take a while to get there. By definition, if it’s big, and no one has done it before, it’s not going to be 1-2-3, ‘We got it!’ There is going to be a dark period in there, because you don’t know what the key to getting there is. You have to be willing to be in some murky territory, and be prepared to invest, if you really want to do something different.

This is a sentiment echoed by Sir Jony Ive in his Steve Jobs eulogy:

I think [Steve], better than anyone, understood that while ideas ultimately can be so powerful, they begin as fragile, barely formed thoughts, so easily missed, so easily compromised, so easily just squished.

Jobs, inherently philosophical in practically everything he did, was probably the ultimate philosopher king.

Anecdotally, many of those attracted to the study of philosophy possess a contrarian streak: they zig where others zag. Or, as Apple would have it, they Think Different. It is no coincidence, however: doubt and suspicion of the accepted wisdom lie at the heart of the philosophical method. Paul Graham relates that he chose to study philosophy in the first place partly because of the shock value; it was the “most impressively impractical thing to do,” a bit like “slashing holes in your clothes or putting safety pins through your ear”. Thiel, for his part, founded a campus newspaper that challenged some embedded aspects of Stanford University culture. He also created the Thiel Fellowship, which grants $100,000 to around 20 students each year if they quit university to pursue a startup, social enterprise or scientific research. Interestingly, though, he teaches the occasional course at Stanford University! Holding two or more apparently oppositional viewpoints simultaneously is another hallmark of the philosopher. Thiel is well known to live with a few perceived internal conflicts.

Is this post really about studying philosophy? No, it’s about having a philosophy. But it does seem that the general skills one picks up as a result of studying it provide a framework within which to ask interesting questions, play with left-field ideas, and grow them to the point where they’re concrete enough to test with the usual lean startup toolkit. A philosophical approach may just help you bootstrap your thinking into another plane, endow you with the courage to try something different, and give you the patience to persevere where others would pivot.

Just remember, though, that a billion dollar idea in your head isn’t worth anything to anyone. You still need to bring it to reality. Time to hustle.

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About the Author

This article was produced by The Tech Street Journal. The Tech Street Journal is a digital publication that aims to shine a light on everything related to tech creation in Brisbane and the surrounding region. It aims to deliver a steady stream of original local tech news, which will be augmented by opinion and thought leadership from tech luminaries. see more.

Entrepreneurship

What Kills A Startup

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1 – Being inflexible and not actively seeking or using customer feedback

Ignoring your users is a tried and true way to fail. Yes that sounds obvious but this was the #1 reason given for failure amongst the 32 startup failure post-mortems we analyzed. Tunnel vision and not gathering user feedback are fatal flaws for most startups. For instance, ecrowds, a web content management system company, said that “ We spent way too much time building it for ourselves and not getting feedback from prospects — it’s easy to get tunnel vision. I’d recommend not going more than two or three months from the initial start to getting in the hands of prospects that are truly objective.”

2 – Building a solution looking for a problem, i.e., not targeting a “market need”

Choosing to tackle problems that are interesting to solve rather than those that serve a market need was often cited as a reason for failure. Sure, you can build an app and see if it will stick, but knowing there is a market need upfront is a good thing. “Companies should tackle market problems not technical problems” according to the BricaBox founder. One of the main reasons BricaBox failed was because it was solving a technical problem. The founder states that, “While it’s good to scratch itches, it’s best to scratch those you share with the greater market. If you want to solve a technical problem, get a group together and do it as open source.”

3 – Not the right team

A diverse team with different skill sets was often cited as being critical to the success of a starti[ company. Failure post-mortems often lamented that “I wish we had a CTO from the start, or wished that the startup had “a founder that loved the business aspect of things”. In some cases, the founding team wished they had more checks and balances. As Nouncers founder stated, “This brings me back to the underlying problem I didn’t have a partner to balance me out and provide sanity checks for business and technology decisions made.” Wesabe founder also stated that he was the sole and quite stubborn decision maker for much of the enterprises life, and therefore he can blame no one but himself for the failures of Wesabe. Team deficiencies were given as a reason for startup failure almost 1/3 of the time.

4 – Poor Marketing

Knowing your target audience and knowing how to get their attention and convert them to leads and ultimately customers is one of the most important skills of a successful business. Yet, in almost 30% of failures, ineffective marketing was a primary cause of failure. Oftentimes, the inability to market was a function of founders who liked to code or build product but who didn’t relish the idea of promoting the product. The folks at Devver highlighted the need to find someone who enjoys creating and finding distribution channels and developing business relationship for the company as a key need that startups should ensure they fill.

5 – Ran out of cash

Money and time are finite and need to be allocated judiciously. The question of how should you spend your money was a frequent conundrum and reason for failure cited by failed startups. The decision on whether to spend significantly upfront to get the product off the group or develop gradually over time is a tough act to balance. The team at YouCastr cited money problems as the reason for failure but went on to highlight other reasons for shutting down vs. trying to raise more money writing:

The single biggest reason we are closing down (a common one) is running out of cash. Despite putting the company in an EXTREMELY lean position, generating revenue, and holding out as long as we could, we didn’t have the cash to keep going. The next few reasons shed more light as to why we chose to shut down instead of finding more cash.

The old saw was that more companies were killed by poor cashflow than anything else, but factors 1, 2 and 4 probably are the main contributing factors to that problem. No cash, no flow. The issue No 3 – the team – is interesting, as if I take that comment ” I didn’t have a partner to balance me out and provide sanity checks for business and technology decisions made” and think about some of the founders and startup CEOs I know, I can safely say that the main way that any decision was made was by agreeing with them – it was “my way or the highway”. I don’t therefore “buy” the team argument, I more buy the willingness of the key decision makers to change when things are not working (aka “pivoting” – point 9).

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About the Author

This article was produced by Broadsight. Broadsight is an attempt to build a business not just to consult to the emerging Broadband Media / Quadruple Play / Web 2.0 world, but to be structured according to its open principles. see more.

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Callum Connects

Jasmine Tan, Director of Stone Amperor

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Jasmine saves her clients time and effort when doing kitchen fit outs with her biz Stone Amperor.

What’s your story?
I started working in the industry in 2003. I was in a marble and granite supplier company for 5 years. Even though I left the company, I still had customers calling me for my services. I referred them back to my previous company but they refused to because they loved the fast response service that I offered. I realised that customers do look at prices, however most of them prefer quality over quantity. Thus I have decided to establish a sole proprietor company also known as 78 Degrees which later rebranded as Stone Amperor in 2014.

What excites you most about your industry?
The kitchen countertop industry is a very confusing market. There are many brands, materials and prices to choose from. What excites me the most is my ability to help clients choose the best materials and brands within their budgets, whilst saving them time and effort.

What’s your connection to Asia?
I have been in Asia all my life and I love Asia. No matter where you go there is no place like home.


Favourite city in Asia for business and why?
I love Singapore. This is because Singapore has always been a stable country and it is great for doing business. However as it is a small country, it can be really competitive. I believe that if just do your best and give your best to your customers, you can overcome this.

What’s the best piece of advice you ever received?
“Take actions. Learn and improve continuously. An idea without action is just a dream.” This was really good advice that I received from my partner.

Who inspires you?
A very down to earth billionaire from Malaysia, Robert Kuok

What have you just learnt recently that blew you away?
Property is the foundation of every business.

If you had your time again, what would you do differently?
Own instead of renting property for my business.

How do you unwind?
I enjoy going shopping, watching movies and hanging out with friends. I am quite a simple being.

Favourite Asian destination for relaxation? Why?
I love going to Taiwan as I love the culture there. Everyone is so polite and the weather is great.

Everyone in business should read this book:
Sun Tzu, Art of war

Shameless plug for your business:
Perfect top, Perfect price, Perfect life from Stone Amperor

How can people connect with you?
Email me at [email protected]

Twitter handle?
@StoneAmperor

This interview is part of the ‘Callum Connect’ series of more than 500 interviews

Callum Laing is an entrepreneur and investor based in Singapore. He has previously started, built and sold half a dozen businesses and is now a Partner at Unity-Group Private Equity and Co-Founder of The Marketing Group PLC. He is the author two best selling books ‘Progressive Partnerships’ and ‘Agglomerate’.

Connect with Callum here:
twitter.com/laingcallum
linkedin.com/in/callumlaing
Download free copies of his books here: www.callumlaing.com

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