From Students to CEOs

It is a matter of being determined and having the spirit to break through to the other side
- Yamamoto Tsunetomo

Foundry has officially made it through its first year. What began as an experiment with 18 undergrads meeting on Mondays in a borrowed conference room in Draper, UT has evolved into something that is being more and more integrated into the U of U's entrepreneurship pedagogy.

Our third cohort, F3 held its first meeting last week and as a Foundry "OG" participating with a new company, I am reminded of the power the program has to produce capable managers. The delta between the green newcomers and the graduates that have re-upped with their current startups (or new ones, if you've killed a few like me) is evident and I am reminded of my own diaper baby qualities.

For those of us there at the beginning, we are clear that the Foundry began without any idea of how long it would last or what it could become. Save for a few things, most of the Foundry's design was discovered by accident and none of us thought that it would produce the results that it did. A lot has changed over the last twelve months, but some of the few intentional design features remain. Ranging from local executives to heads of PAC-12 business schools, one common reaction from the community about the Foundry graduates is amazement at the operational and management rigor they bring to anything they touch, a result of going through the Fight Club-esque gauntlet that is the Foundry system. They are amazed because the average age of a Foundry graduate is about 24 or 25.

This is the result of an intentional design feature, hardwired in the DNA of the Foundry social system. I am going to talk about how we do it.

My friend, Dr. Robert Wuebker, post-doc professor at the University of Utah and faculty member who co-created the Foundry with the participants recently reminded me of the power of designing organizational roles to pull people to live into.

Upon induction, it is made clear to Foundry participants that they are no longer regarded as students. They are CEOs. Every communication, every interaction - from the emails to the meeting to the project reviews - sees the participants as CEOs and relates to them as CEOs. You are not an intern. You are not a student-founder. You are a capable, high-functioning CEO and are treated as such. Equivalently, you are expected to relate to everyone else as a CEO. This is a subtle but powerful distinction and I think that its effect on Foundry's outputs is critical albeit intangible.

When everyone relates to you like a CEO, (curiously) you start occurring as a CEO. When you have the experience of 30-45 people, from the other Foundry CEOs to community professionals and venture investors, all relating to you like you are at the helm of a company you want to be starting - it catalyzes transformation in some people that is absolutely astounding.

A classic example is from the original cohort: one of the most successful companies was led by an art major that had never had any business training at all - he did $12k in his first two weeks in the Foundry. While there are plenty of other stories like this in the Foundry, Nick just happened to get the most media attention. I recommend that you read one of many of his articles here.

However, we are careful to ensure that we do not just bolster egos. One ethos of the Foundry is that you develop self-efficacy by executing with precision. When you say that X will happen and X does happen, you gain power in your ability to call your shots. This is as simple as turning a management report in on time or accomplishing what you said you would do in your management report. The access to this type of operational/organization integrity (think databases, not morality) is our simple-yet-potent weekly management reporting technology which clearly demonstrates to you (and everyone else) exactly what you are getting done (or not). It also involves a lot of failure and not being your word and not executing precisely. It is this painful experience that catalyzes learning and thus the observable is that participants demonstrate some sort of mastery over the form (wax on, wax off).

The Foundry system provides the experience of you being your word and the power that comes when you believe yourself to be a person that follows through on what they commit to (hint: this belief is not mystical, it is realized when you do the act of following through). Layered on top of that is the shared experience of the group engaging in the same activity and finally a community that chooses to see you as someone who is capable of executing precisely (doing what you say you will do).

Human potential is the greatest, most abundant resource in the world. Few organizations know how to tap it and unleash it productively (Apple, Google, Stanford and MIT come to mind). Foundry aspires to be an organization that sees a human, a nascent entrepreneur as someone who is fully empowered to get for themselves anything that they want (in our case it is in the context of a new company). It is one of the fundamental (and intentional designs) of the system. Dr. Wuebker planted the seed of this design element, the early participants took it on and ran with it and as the graduates go on to create their own "Foundries" or emulate the social system design in their own companies, I whole-heartedly believe that it will be one of the greatest contributions to the lives of the scores of people that have and will pass through the Foundry...

..if they so choose to be imprinted upon by the system.

It is a subtle but important distinction: a constant choice of the group to be stand for people living into the role that they assume when accepted into a Foundry cohort. It is difficult to do as we naturally try to hide our flaws and our shortcomings or hide in the comfort of silence and not calling someone out (or be coachable when getting called out). Some will opt in for this type of experience, others self-select out of it (which is why we say this is not for everyone). But those that decide to double down and play for keeps are the ones that keep the program attract to newcomers. It is an individual choice and each person faces that decision in their own way and their own time. When you aspire to be something great (like a CEO), you must be willing to place something great on the alter (some perspective of who you thought you were).

An Ode to Non-Technical Entrepreneurs

I'm a non-technical startup guy. When selecting my major, I was given the choice between an engineering path and a business path. I opted for business because I like the thrill of hustling and as a kid I was always figuring out how to put extra money in my pocket in addition to my weekly allowance.

I'll admit that I have some irrational fear of programming. After a weekend spent on w3schools.com learning HTML and CSS, I pathetically bumbled my way through setting up and editing a wordpress site. And along each step of the way, I could hear the proverbial ghost of every programming nerd who had their lunch money stolen in high school sneering at me. Like the IT guy from the SNL skits, I felt that no matter what I was doing someone, somewhere was having a vindicated laugh at my expense. Again, irrational. But admitting you have a problem is the first step, right?

However, I will be starting to learn Ruby on Rails with a group of other non-technicals at school so I am relieved that misery will have company. I must admit that not knowing a programming language is the equivalent to not knowing Word or Excel a decade ago. I feel that in order stay relevant, I'm going to need to just get over my childish fears and start being able to have some basic programming skills so that I can have an intelligent conversation with my future engineering guys when.. you know.. I'm COO of a 50M startup.. someday.

With all that being said, here are my thoughts about the unsung heroes of startup world: the operators. The VP-of-get-shit-done guys (and gals). I also have something to get off my chest:

I am sick and tired of hearing about someone farting a new Web 2.0 company every 30 seconds and presenting it at some overblown conference where everyone's tweeting and retweeting the same crap like it's the next Facebook or Groupon or totally pushing the edge of augmented reality. Creating a new way to send a text message is not interesting. We have text messaging. And stop calling is a mobile communications platform.

I love reading VC blogs as much as the next guy but just once I want to hear someone say, "I'm investing in the social layer because anything that requires hard goods and inventory makes me sick to my stomach."

Don't get me wrong, I would love to get investment from Mark Suster or Ben Horowitz, but it seems like unless you are an internet-based company or green-tech startup you have a snowball's chance in hell of getting any attention.

Last time I checked, the water bottle I drink out of isn't composed of C++. My jeans aren't written in Java and the individual apple I ate this morning came from a tree, delivered by truck, sold by a real person and did not have a "post to Facebook" function on it.

The point I'm making is that there are a number of things that the twitterverse takes for granted that gets a little more difficult once you step away from your screen:

1. Try getting the door slammed in your face - getting to product to market-feedback is easy when you are shielded behind a username and have a delete key at your disposal. It's a lot harder when you are in the person's office, having the conversation in real-time, looking for non-verbal cues to gauge what you should say next and personal rejection to stomach (coz they aren't buying the product, they are buying you - ask any salesperson what I'm talking about). I would love for Eric Ries or Steve Blank to try and talk as flippantly about "sell, design, build" after attempting it in the real world: cold-calling for three weeks and then going on a 1 week sales meeting bender. Month in and month out.

2. A new product is not necessarily innovative - I am thankful for the tech industry, the innovations in business models over the last decade are pretty novel. And while they might be saturating the industry, they have yet to be implemented in existing industries. Want to see a highly disruptive opportunity that will make VCs craploads of money? Find a team that is employing the freemium model with hard goods (it's the future). I personally know a team (pair of undergrads) that is tinkering to find a way to give road bikes (quality ones) away for free and still have the firm make money.

3. "Hard" entrepreneurs are operational gladiators - going "lean" is a lot harder when you are dealing with inventory and not a lot of cash. You have to be more intentional about your actions and you aren't afforded the privilege of being completely at the beck-and-call of the market, sometimes you got to move product and hustle. That being said, any freedom that the firm has to pivot is the result of operational prowess. Striking a balance between organizational agility and efficiency when working with hard goods, takes a REALLY smart person (Google: "G Score") with the cahones to even attempt it in the first place.

I'm not advocating that "hard" entrepreneurs are better than technical, "soft" entrepreneurs or that the Web 2.0 surge hasn't benefited the nation. I'm simply attempting to shed light on the fact that there are number of entrepreneurs who are quietly hacking away at innovative non-technical problems in "mature" industries. It requires someone with well-rounded knowledge and competency in areas that are "boring" and "non-sexy": accounting, operations management, and sales. And it will be these entrepreneurs who will take the learnings from the tech industry and apply them to the rest of the world (yes, there is a world outside of Stanford's walls).

And here's my strong claim: while we spent our endowment on Facebook and Twitter, China doubled down on it's clean tech investment. China is working on gaining mastery of a hard problem, cheaply producing things that tend to be expensive. The US is mastering the art of coding an app over the course of a weekend.

In the coming years, "hard" entrepreneurs are going to be more critical if the US wants to remain an economic player in the world. Maybe we should start thinking about providing them with the support mechanisms that technical entrepreneurs have been enjoying for the last decade. Places like the Foundry are a good start and we'll be reporting AUTM numbers for our first year soon. Hopefully, it will serve as an example of what is necessary to support entrepreneurial development in a non-technical realm (hint: it doesn't involve money or resources).