AOM 2011: Parting Shots

Did you know that San Antonio loves God, Country and Free Enterprise?

Neither did I until a massive billboard with this message on the side of the freeway at 3:58 AM this morning on my taxi ride to the airport caught my attention.

Here's some more things I learned on the trip:

1. The temperature difference when you go in/outside a building is about 30 degrees. The experience is like a punch to the gut.
2. Gary spends almost as much time playing Angry Birds on his iPad as he does fixing his hair to make it look like he didn't fix it.
3. Rob compulsively hides things behind the TV... like the iron.
   
4. He's also got the best presentation skills of anyone in the Academy. Seriously, it's like Shaq dunking on midgets... like Gary.
   
5. When it comes to partying, academics beat fraternities hands down. They are PRO and have a system when it comes to effective (and long-lasting) partying. They are happy to share this information at will.
   
6. We have a list of great inside jokes and stories. My favorite is from the first day when I gave someone a Dash & Cooper business card and they thought it was a dog-walking business. Classic.
   
7. I'm convinced Howard Haines is a retired ninja. There wasn't a morning, regardless of hour, that I heard him get ready or leave the room for the day.
8. I'm addicted to the hot sandwiches from The Filling Station. So much so that I'm talking to the owner about franchising with another location in Salt Lake. So if anyone wants to help me start that company, let me know.
9. I sat next to a senior researcher from Harvard in one of my neuroscience workshops. Nothing really interesting came out of that but I thought it was cool.
   

After all the great stuff at AOM, I am undecided on whether or not I will get a PhD. Everything that I hoped for came to fruition: people think my paper idea is a big contribution, my line of work would be very effective for economic development and updating the entrepreneurship theory, there are a number of people who would like me to consider their schools when I send out my application, etc, etc.

But I learned a lot about academics that I didn't know was there. Once you go into academics, there's no "going-and-coming-as-you-please" with the professional world. You often have to make a choice between scholarship and teaching and that affects school choice since brand equity and reputation is all you have in academics. On the flip side, I might be better off putting all my eggs into my professional career and then going after a PhD later in life. There are a number of things that I need to consider about what I really want to do to make a contribution to the world. As my friend Gary put it: "If I wanted to make a contribution to the social entrepreneurship realm, I wouldn't write a paper that adds to the literature, I would just fly to Africa and start a social enterprise that changes lives."

I'm very lucky. Truth be told, I shouldn't be where I'm at given what I deserve. At 24, I have a slew of opportunities to choose from. For me the quagmire is trying to decide which opportunity would best accomplish my commitment to making a dent in the trash can that is the world. This week in San Antonio helped me realized that I am lucky to have the choices that I do but attempting to live an intentional life doesn't make finding the road less taken any easier. Especially when it's a 51-49 kind of choice.

Requests for Advice (Part I)

Over the last few weeks, I've had a few people stumble over this blog and contact me directly to ask for my thoughts on a few things. For one, I try not to be an "expert" on anything and most of what I say is simply a regurgitation of those who have accomplished far more than I ever will.

Yet, as I was writing my second message I noticed that I was roughly saying the same things and because I have a perpetual mini-Adam Slovik on my shoulder reminding me that I'm not being very productive and doing it very much WRONG, I have decided to post them here. Most advice, I believe, is indefensible, contains a lot of bias, is typically self-serving and no way applies to every situation in the world. There, I think I've covered my bases.

There's no such thing as a silver bullet - There's no right way to do anything. Trust me, I've looked and tried. Success is essentially persevering long enough so that the lessons of your mistakes have time to take root and start paying off. Over time, you gain enough scar tissue to develop more intelligent intuition. I've talked to tons of entrepreneurs, investors and academics. This is true regardless of where you go or what you do, be it arts, science or business.

The world changes - A lot of the established academics are confronting the fact that we are now able to do many of the things that were previously thought impossible. Some are struggling to keep up in raw production output because of technological advances (namely, programming's ability to capture and manipulate large amounts of data). This may be a generational thing but my familiarity and comfort with technology is setting me up to overtake what is par for the course as far as data quality and size which means that I put up high volume output compared to my relative age and lack of experience. The difference between me and them is not raw talent but they have more scar tissue and know how to navigate the nuanced systems of bureaucracy and taste-making (there is no short-cut for that). Conversely, I will need to stay relevant with the changes as I get older because the rate of change is increasing at an increasing rate.

The world doesn't change - no matter what field or industry you go to, there will always be those on the inside and everyone else. People who are in power often construct systems to perpetuate their hold on power and limit insiders. This is not as evident as it seems and you might find yourself from time to time in possession of power. Remember that power, like most anything in life, is not real but a game that we've made up and decided to continue to play. I personally don't have a lot of patience for the system. Call it personality flaws or immaturity but I just have a hard time fitting within it. I'd rather create better systems. Focus more on being the counter example. Everyone will be nipping at your every flaw and weak point but at least you are doing something they aren't: something interesting.

Be up to something big in life (really) - You have one life, might as well as doing something really big with it. Someone once told me "if you aren't crapping yourself with fear and excitement, your ideas aren't big enough. I encourage you to enter a much larger discourse in your life and surround yourself with people who are interested in doing big things and not just eking out a living." It's kind of like a "Matrix moment" but essentially you need to be really trying to make something much much bigger than, you to actually be physically tangible in the world. This will force you to start shedding some of the hold habits and perspectives and start creating a new version of you. This is not a bad thing.

You are the average of the 5 people you spend the most time with - this is very true, in all aspects. I have gone through many sets of friends and are very selective about who I choose to spend time with since my habits and perspectives are continuously shaped by our conversations and my fellowship with them.

Stay relevant - the world moves much faster than it did 3-4 years ago. I recommend reading blogs (via Google Reader) and getting an account on XYDO. I'll also recommend some books.

Blogs:

• Ben Horowitz
• Chris Guillebeau
• Seth Godin
• HumbledMBA
• "Change This" Manifesto
• Both Sides of the Table
• A VC
• VentureBeat
• VentureHacks
• Orgtheory.net
• Organizations and Markets
• Steve Blank
• Eric Ries

Vlogs (video blogs)

• TED Talks
  

Books:

• How The Way We Talk Can Change The Way We Work - Kegan & Lahey
  
• High Output Management - Andy Grove
  
• The Goal - Eli Goldratt
  
• Execution: The Discipline of Getting Things Done - Bossidy & Charam
  
• How We Decide - Jonah Lehrer
• Art of the Start - Guy Kawasaki
  

That's all the general advice that I've permitted myself to give right now. Try that stuff out and feel free to dialogue with me about stuff that you think is useful. I'll also publish the second part of this series tomorrow.

AOM 2011: A Different Kind of Book Smart.

It's Sunday and I am enjoying a brief slowdown in midst of the busy session schedule I picked out for myself. There are many emerging customs here at AOM, one of which is that the two undergrads go down to the lobby to respond to email, wrap up projects that we are working on and get prepped for the next day. During this time, Gary and I often decompress from the day's bustle and just do what's easy: normal work.

It's also a time for us to talk about our experiences and the generalizable take-aways. This is a subtle, yet valuable habit the two of us honed through our Foundry experience: group learning. Though we have different interests (Gary's into social entrepreneurship and I tend to be drawn to theory and methodologies), we often share the evolution of what we are up to and discuss insights. One particular insight Gary mentioned was how hard it is to succeed in this space.

After being heavily immersed in the sheer complexity of ideas, problems and the equal complexity of the possible combination of methods to solve them, we were remarking how tough it is to be a successful scholar.

For one, it's extremely difficult to find a question that makes a real contribution to the literature. Everyone that you are competing with is as smart as you are, thinking as hard as you are and bringing as much to bear as you are. Sure you might be able to find that some things are linked together but it's likelihood of making a significant difference is little - that's exactly how high the level of work is being produced. Furthermore, even if you do find something that WILL make a meaningful contribution, the likelihood of actually accomplishing it is another thing entirely.

Writing A-class papers is a lot like starting companies. They require as much commitment and cognitive effort and takes just as long to get into publication (~36 months, 18 of it in the review process alone). Even then, you have to write and present your ideas in such a way that someone who doesn't know the intricacies of your space can easily make the connection.

The other complaint (one that I held for a while) is that it seems so little of academic production translates into practical implications for the real world. At first glance, this seems obvious. But the more that I discover about the nature of the work, the more Emerson comes to mind:

"Tis the good reader that makes the book."

Just reading academic work requires a higher level of cognitive effort. Not to say that academics are elitist but, to reference Sir Isaac Newton, not a lot people are in the practice of thinking really hard about big problems. Furthermore, we take a lot of what we think about the world (our personal truths) for granted. If we tried to actually go prove most of what we say about how the world works, we'd be saying a lot less with even less certainty.

"The world is a complicated place" is a common saying we have here and finding the balance between realism and rigor is not as simple as conducting an experiment and writing about it. I have a newfound respect for academics and the pursuit of meaningful scholarship. Some time it just takes walking a mile in someone else's shoes.

On another notes, everyone has been largely accepting (if not surprised) of my presence and gracious enough to lend their time and attention to converse and in doing so advise on how to avoid their pitfalls and offer other pieces of "scar tissue advice".

I am certainly a better man for having been here.

AOM 2011 and Trending to a PhD

"If others would think as hard as I did, then they would get similar results.'' - Sir Isaac Newton

I have just arrived into hot and muggy San Antonio for the 2011 Academy of Management annual meeting. For "manglement" scholars, it's a big deal where most of the big names in management research come together and nerd out on fantsy pants jargon and various statistical methods.

How exactly I got here has been an unexpected path, but the gist of it goes like this:

I know a guy.
This guy asked me to help on a research project with a looming, near impossible deadline.
I say "Maybe".
He says "How about $1000?"
I say "Works for me."
Two weeks of sleepless nights later he presents the stuff (I get an invite, not common for data monkeys).
Everyone loves it, he and his boss give me a personal shout out (also not common).
They ask me to do more projects.
We eventually have a conversation about getting a PhD after my undergrad.
I think it's a neat idea (researching complex ideas is pretty fun).
I somehow convince the University it's a good idea to fly me to AOM.

So that's about it. I thought really hard during a series of punctuated efforts. Did my best to produce good work and now I'm here largely because some people who are in charge of stuff thought that I was good enough to keep around and let me do things not a lot of people my age get to do.

It's transformed my undergraduate experience and I am forever thankful to the University of Utah to have me involved as much as I have been and underwrite some of the opportunities to let me do what I love doing.

But I'm not a PhD student yet. First, I have to finish my undergrad (this December), I also have to apply with a 700 or higher GMAT score.

Other than that, it's possible that I might be entering the 2012-13 school year as a PhD student at the University of Utah. I'll keep everyone updated as the situation progresses.

But here I am in San Antonio. Eating food, sweating a lot and using my best media training (thanks Foundry). So while I'm here, I'll be updating the blog with the sessions that I am attending and my thoughts about what's interesting about them as they relate to the "real world" and the research I'd eventually like to contribute to the conversation.

So far I've split my time between three themes: entrepreneurial theory, neuroscience and strategy, building and incorporating robust empirics into your research.

Needless to say I have plenty of time and people to get all nerdy with. But since I try to make sure that what I am doing in life has some generalized practical application, the point of being here is to think really hard about what problems I could work on so that my work (and Foundry experience) might simultaneously achieve many subtle aims like touching the next generation of entrepreneurs (mine).

So with that, I hope you stay tuned to hear some of the stuff I'll be participating in. And if you happen to be here at AOM, feel free to connect via Facebook or email to collude session schedules... I'll be in the back sitting quietly, NOT making a scene.

Regarding Discipline and Precision Execution

Right discipline consists, not in external combustion, but in the habits of mind which lead spontaneously to desirable rather than undesirable activities. -Bertrand Russell

Whenever someone asks what skills I bring to the table I do not return with something that is broad and craft-based. I don't say that I have sales or marketing skeelz. Nor do I try to inflate any position held to somehow convey leadership, management or operations expertise. I think that all of that stuff is important and I harbor deep respect for the titans of these various disciplines, but I view expertise in a particular field as the product of task-dependent learning.

Colin Camerer's seminal 2005 paper on how neuroscience can inform economics included an A/B comparison of brain activity images taken when a subject was playing tetris (Gameboy, natch). In the paper, one image shows a large portion of the brain lit up when first playing the game while the other image shows little activity after weeks of playing the game. The (admittedly) simplistic heuristic here is that when you spend enough time in a space that you start understanding and mastering all the nuances and not-so-obvious *why* behind many of the quirky behaviors. It's the 30,000 ft perspective of what we know about how humans learn and it drives a lot of what we do - whether we do it consciously, subconsciously or unconsciously.

While I don't make any claims towards field-specific expertise (marketing, sales or operations), I do attempt to convey that I know something about executing. It's a *small* something, but still a something. I think that it's the fundamental difference from anything that works versus anything that doesn't work. I personally believe that precision execution is the source of any forward progress. It applies to any industry, any business discipline and at all stages of the venture, government and military process.

Truth be told, I totally lucked into this. Learning to execute with precision is a fundamental core Principle (with a capital P) taught at the Foundry and I happen to have been around when it got started. Ergo, I got imprinted (for better or for worse) with the nuances of precision execution. Nevertheless, it's power and efficacy supercedes the needs for resources, permanent space and mentors. It is the refining fire that transforms cookie-dough diaper babies (like me) into capable and effective individuals who know something about the difference between motion and progress.

We don't need software, fancy flowcharts, books or consulting services to help augment the Precision Execution Principle - it's so hardwired into the architectural and cultural design of the program that the participants hardly notice it... except for the discomfort you feel when you subtly (or not) realize that you aren't as good of a manager as you thought. I personally remember what it felt like to realize that I wasn't as disciplined as I pretended to be. Getting present to the reality that I had much difficulty accomplishing a meaningful chunk of the things I committed to doing sucks and it's not fun. But focusing on just completing the things that I said I would do turned out to be the very thing that started churning out businesses or helping me realize (quickly) when to kill one.

Just the other day, I reviewed one of the early documents that Dr. Robert Wuebker wrote in the early days of the Foundry. The document (coupled with the Foundry experience) will likely serve as the most influential touch points in my professional career. Here's an excerpt:

Foundry management practices teach you precision execution—the capability (forged through practice and reflection) of individuals, teams and companies to predictably achieve the outcomes they want. Curiously, if your company can begin to deliver predictably, we have found that this capability also happens to enable breakthrough outcomes for teams. Thus discipline, incremental learning, and breakthrough innovation are a part of one continuous “management strategy” that full participation at the Foundry teaches you.

So if I believe that much in the power of the Foundry process and its core principles then why do we have nearly 50% wash out in the first six weeks? I'm not sure but I have a few conjectures:

• It's not fun giving up the perspective of being "right", "having it all figured out" and being an "expert."
  
• People choose to engage with the Foundry like do with most of their life: at half speed.
• They simply do not understand that becoming resourceful is more powerful than having resources handed to them.
  
• It's really REALLY uncomfortable to thrash about in front of your peers.
• Fill in the ________________.
  

Foundry is not for everyone. We are just as selective as other "elite" programs, we just don't know who will select out and who will double-down. I've seen entrepreneurs come in with companies pulling in 7-figure revenues opt out within two weeks. I've also seen dopey, non-business-type kids with super simple, non-"high growth" businesses take on the notion of "Full Participation" and will breakthrough after breakthrough into existence.

I personally struggled (and still struggle, if I'm not cognizant) with all of the above bullet points. Every participant faces it. Some push through to the other side. Some don't. But the irrefutable observable that Foundry demonstrates is that anyone starting any business, regardless of socioeconomic status, background or expertise who participates fully and musters the necessary discipline to do what they say they will do (even if they have no idea where to start) WILL discover a durable business hardwired with operational rigor and integrity OR they will quickly kill one that will not work. It's irrefutable because we've been measuring outcomes since day one.

For the 30%-50% who stick around I am lucky to be considered part of the small (and slowly growing) community of individuals who are imprinted with the natural inclination to contribute to others and the capability to coalesce the disparate and ambiguous into increasingly predictable (and scalable) results. It's a growing crew of quiet professionals... and I'll take them over anyone else any day of the week.

If any of this sounds interesting to you or you are an entrepreneur that has no idea where to begin and are looking for a community to help see you through. Drop me a line and we'll talk about how to get you plugged in.

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).

The Next Generation of Entrepreneurs: Drug Dealers and Hustlas

If colleges and non-profit programs want to capture and equip the next generation of entrepreneurs, they can start with their local teenage drug dealers.

Yep. Drug dealers. I'm not alone on this one and there appears to have been some research on the linkage between drug-dealing as a juvenile and self-employment as an adult.

I am fortunate to have had a post-hoc peek into the underworld of localized drug dealing through some acquaintances who are ex-dealers. Most of them are now self-employed legitimately (I think). Listening to them talk about their experience is simply inspiring. Talk about resourcefulness:

By the time they graduate high school, these teenage drug dealer know more about margins, sales, customer relationship management, building a brand, strategic alliances, viral marketing, inventory management, supply chain management, product-market fit, negotiations and government regulation than most second-year MBAs. They have more experience in strategic decision-making and maintaining competitive advantage in a fiercely hostile commodities market than 2/3 of academia and know precisely what contributes to the local economy.

My conjecture is that if we tell them to keep doing what they are doing and simply replace the drug(s) they are hustling with some other hard good of their interest, we would see a HUGE spike in high growth startups and innovative revivals in mature/dying sectors like manufacturing and retail. Detroit anyone?

My point is that we as a society should not take a position of moral opposition to their current activities but rather praise their resourcefulness and make an attempt to show them the possibility of "legal" enterprises. Based on my discussions with people who have dealt drugs as teenagers, most grew bored with society's traditional models of classroom learning and mind-numbing lever-pulling jobs at minimum wage. Overall, they have vocalized disgust for anything that appealed to authority or followed general consensus.

Conversely, the University of Illinois at Chicago after conducting research on local dealer behavior and impact to the economy found that archetypical drug dealers in depressed metropolitan areas were not motivated to destroy the community but rather (highly) motivated by the same things as "the rest of us" and were simply presented with different opportunities.

My intuition is that drug dealers, regardless of demography, get a high from hustling. This something that I've experienced first hand - a little of which you can read here. There's something about making things happen, making connections, finding a need and delivering on it - and doing so faster, at better quality with the least amount of resource expenditure as possible. Hustling is a form of creating, it is the feeling of being the exception to the Theory of Impossibility, the sense of personal fulfillment when you break the First Law of Thermodynamics: creating matter - economic value - by taking ideas, relationships conversation and resources and rearranging them in a way that only you can. All this to create the existence of dollars in your pocket and happy customers.

There is simply nothing like it. It doesn't matter what you are hustling, simply being in the midst of the process (e.g. "the game", "the grind") is addictive.

This is a good thing. It is at the core of all entrepreneurial individuals that have a chance of doing something impactful and this country has no idea how to channel this type of energy, intelligence and potential. The best that they've come up with so far is ADD/ADHD medicine and sending drug dealers to jail. I have some theories about possible solutions but nothing solidly based in fact.

Except that you could send them to the Foundry.

As I surveyed the landscape for resources/programs that would help me sharpen my talent potential, nothing seemed very interesting. It all occurred to me as another version of a class project: hypothetical and detached. I discovered that there were other students who were going through the exact same experience. This, in part, led to 20 undergrads co-inventing the Foundry with some super cool (and super smart) "adults" about a year ago.

Hustler's like the "realness" of the grind: fear, risk, uncertainty, ambiguity. Everything looked to me like another appeal to authority: some judge or mentor who as no idea who I am or what I've done is in a position to say what is good and what is not.

This is not the way to teach entrepreneurs and it is not the way to allow hustlers and drug dealer to see the possibility of applying their skills, expertise and talents where this country really needs it: job creation.

I think this is why Foundry attracts a certain kind of individual and why graduates weigh in heavily on the cohort formation process: hustlers like being around other hustlers. Iron sharpens iron. We select for people, not for companies because hustlers can hustle anything, whether it's weed and ecstasy or water bottles and recycling bins.

Again, we don't have a resource problem. In fact, I don't think we even have a resourcefulness problem. We have a training problem. Yes it's scary to think about the prospect of training drug dealers to be contributing business leaders. Yes, drug dealers can be dangerous (a function of being in dangerous work) and can smell a feeb from a mile away. The don't appeal to authority (they actually subvert it) or listen to the general consensus about how things should happen. They have a different relationship to fear than most people and definitely not interested in the hokey pokey of Cubiclelandia that modern society has been offering for decades.

Judging by the current state of the union, it seems that even the President agress that we could use less of the lever-pulling types and more of the lever-creating types.

If you are, or know, a 20/30/40-something drug dealer/hustler that might be interest in a new career opportunity hustling something other than drugs and be part of a group where your skills, perspectives and overall approach to life are praised and sought after, Foundry is actively recruiting for people to fill our summer cohort: F3. Feel free to contact me directly or you can submit an application here.

Just leave your drugs and weapons at home - and please don't take my lunch money.

The Foundry: A Word on Resources

I am fully aware of my bias and propensity to brag about The Foundry's accomplishments. Over the last 10 months, there have been some very interesting results generated from the peer-mentorship model and our unorthodox use of resources (which I'll get to in a second).

To this point, some agencies and sophisticated investors are taking note and want to give resources to the program which I think is great. The only advice that I give to any "adult" (whatever that means) is simple: slow down and listen.

My experience in the Foundry taught me that entrepreneurs don't have a resource problem but a RESOURCEFULNESS problem. When I first started Dash & Cooper, I thought that a substantial round of funding would help me solve all my problems. But thanks to the forced scarcity of the Foundry model and culture, I learned that there were a number of smaller, cheaper steps that I could take to incrementally move from the place I was (high ambiguity, anxiety, fear) to the place where most of my business classes start with (defined product perfectly matched with a defined market).

If I had been given a 5-figure investment at the beginning of the program in exchange for equity like most other accelerator/incubator programs do, my inevitable failure would have been amplified, not solved. I was (and still am) a diaper-baby and had no idea what I was doing. Forced to solve the problem with little more than $500, I broke through all the commonplace barriers that people use to explain why starting a company is hard. Being resource starved forced me to be resourceful and in the process I learned something new about myself.

Every person within every Foundry cohort faces this gauntlet. It also helps explain why the participants emerge unstoppable because we have seen (and created) what the world looks like when creative willpower combined with a social system committed to you (not just your company) gets applied to any "problem".

Of all the things that an entrepreneur can receive from the Foundry, the distinction of Resourcefulness (with a capital R) is the most valuable mainly because it costs you the person you thought you were. Which might help to explain why the underlying connection each cohort has with each other is the respect for this process - and why we, the participants, vehemently defend against thoughtless application of outside financing or other resources. Resources rob participants of the precious and painful opportunity to awaken something in yourself that wasn't there before.

They also attract the wrong crowd.

Now I'm not saying that we shouldn't have resources. There are some world class executives circling the Foundry and I would be delighted if the money showed up to bring these people in full-time. I'm sure Matt would appreciate better filming and editing equipment for his videos. Paid subscription to various software-as-a-service products, used laptops, computers, projectors and whiteboard pens have been the most useful for participants and administrators.

And food. Foundry has been known (allegedly) to run up monstrous tabs at Eva's, The Wild Grape and Dick n Dixie's - so I know that this would consume a large line item in any budget ;-)

These are the high leverage items in which resources would make a difference. And that's about it.

Now to address the issue of equity financing and attracting the wrong crowd.

Anyone that want to ports a seed fund on top of the program simply has no idea how a Foundry participant gets imprinted and this becomes the type of entrepreneur investors want to give resources to. Programs that offer resources attract people that want resources. Notice that Foundry doesn't offer resources...

The reason why Foundry participants show up, start companies, and help manage 80% of administrative tasks despite a schedule that juggles full-time school, full-time work, and family life is because they want to get what no other program offers (hint: not resources). Foundry's lightweight and methodical process of repeatedly bathing participants into the nit-and-grit of discovering businesses from scratch is the reason why it exists. It was born of unmet demand not fulfilled by other programs. Not that the other programs are wrong or not valuable - it's just that a year ago 20 of us wanted to start companies, looked around at what was available, voted with our feet and with the gracious help of Rob Wuebker, Matt Hoffman, Ken Krull, Todd Dauphinaus, Brent Thompson and Adam Slovik we invented the Foundry.

There are plenty of places for entrepreneurs to get resources, they are called business plan competitions. And we actually have a business that can help win any competition at will - CupAd. The Light brothers are happy to coach you to win competitions because we, the children, know that those things are not real life, just another variant of class - and thus don't treat them seriously.

There's nothing wrong with investing in strong teams progressing fundable ideas - Foundry is full of these types of teams and there's nothing wrong with being interested in and having financing discussions with a team or company that you want to invest in. There's also nothing wrong with getting a return on one's portfolio, it is the point of a seed fund and the fiduciary responsibility of its managers.

But if your motive is to profit from a bunch of 20-somthings or be a guy that "has a say" without regard to the process that produces the results that got you interested in the first place, then it is a signal to the *participants* that you are "Not Foundry". One earns this scarlet letter by clearly demonstrating that they don't understand (and not interested in understanding) what is involved in the 'forge' part when we say that "Foundry exists to forge entrepreneurs for life."

Focusing on the entrepreneur creates a fundable company as a catalytic byproduct. Fundable companies are the means, not the end.

How to Get Good at Making Money

Hear them haters talk

but there ain't nothin you can tell em

just made a million..

got another million on my schedule.

-Wiz Khalifa, Black and Yellow

I just finished reading a really, REALLY good article from Jason Fried, CEO of 37Signals. His article on Inc.com titled How to Get Good at Making Money follows his innocent and curious exploration of sales and enterprise during his childhood. Here's some of my favorite quotes:

...people are happy to pay for things that work well. Never be afraid to put a price on something. If you pour your heart into something and make it great, sell it. For real money. Even if there are free options, even if the market is flooded with free. People will pay for things they love.

.. charging for something makes you want to make it better... after all, paying for something is one of the most intimate things that can occur between two people. One person is offering something for sale, and the other person is spending hard-earned cash to buy it. Both have worked hard to be able to offer the other something he or she wants. That's trust-and, dare I say, intimacy. For customers, paying for something sets a high expectation.

When you put a price on something, you get really honest feedback from customers. When entrepreneurs ask me how to get customers to tell us what they really think, I respond with two words: charge them. They'll tell you what they think, demand excellence, and take the product seriously in a way they never would if they were just using it for free.

This article was very insightful and endearing to me as it helped crystallize some "forgotten" lessons from my childhood. As a youngster, I loved making money and was always knocking on doors to shovel people's walk or rake their leaves. The feeling of money in my pocket was great - especially because it signified that I had earned something.

Later on, I had moved into trading cards - first with Pokemon and later on with Star Wars, as the franchise reboot happened when I was in fifth grade. I liked the competition of playing the games (yes there were games to be played) and acquired a large enough collection to let people borrow the minimum required deck size to play and would teach them.

I remember going to Scout summer camp and teaching other boys in my troop (we had about 100 enrolled any given time) and other kids from out of state at the commons area. I picked them because everyone in my neighborhood was already playing Star Wars and the likelihood that they would be interested in buying from me was low. Plus, when you are camping somewhere in Idaho or Wyoming, scout camp provides very little non-scout-related entertainment, thus there was little to do but play card games.

As kids learned the game, I started selling them at a premium since there wasn't any trading card shops immediately available. I could also upsell "foil cards" that were strategic game-makers at multiples of the price of a pack of 10 cards (each pack contained at least one *surprise* foil card).

My parents would marvel at the fact that I would come home with more money after camp than they gave me.

I echo Jason's insight that you have to sell the things that you love yourself - because otherwise nothing gets sold. Even then, you aren't even having a sales conversation as it is traditionally known.

Here are entrepreneurial lessons from my childhood that still show up today:

1. Go where the ground is fertile. - I knew I couldn't sell in my neighborhood because everyone was doing it and there was a card shop nearby so there was little that I could offer them. I had to go someplace where people would be open to a new kind of card game and could easily catch the fever. Scout camp was great because card games were a great way to pass the time when you decided to skip out of your merit badge classes.

2. Enroll, entertain, teach. - I think it's important to find way to get people's attention for just long enough and then you have to do everything possible to make sure that they enjoyed their time with you. You've got to give them the dopamine charge - the "happy-feel-good" experience that leaves them wanting more. When you get permission to have more of their time - that's the perfect opportunity a great opportunity to introduce some of the dry "learning" that is necessary for them to be pleasantly hooked on what you are up to. It's important to love what you are selling because your natural passion is what people are playing off of when you are teaching them about your product.

3. Let the value proposition present itself. - After playing the game a few times, I would typically offer a "premade" deck for sale - mentioning it would take more time and money to construct themselves. By allowing them to participate for free, they could easily see the benefit of having their own deck to curate - rather than some fixed deck that I constructed.

4. Let the users interact. - After I had sold about 8 decks of cards, I organized tournaments with a "heavily stacked" deck as the prize for the winner. This would usually draw small crowd of curious boys who would watch, ask questions and then would want to purchase a deck from me. Because I removed myself from the equation and let kids from different troops battle it out, the players would have their friends show up and I could easily offer the same access to the fun to those who showed up - this saved me a lot of time and effort by letting my customers do most of the work for me.

All in all, I agree with Jason Fried that the skills we build can start at anytime but that we are always practicing them. This has certainly been the case for me. I think that our childhood lessons should be taken at face value simply because they capture the essence of doing business and human interaction. As adults we have a nasty habit of over-complicating things - which can be detrimental when you are leading an early-stage startup with limited resources to use in the quest to find product-market fit.

Thanks Jason for the article. I recommend that you all go check it out and see what shows up for you.

Foundry Company: Coverstruck

He has not learned the lesson of life who does not every day surmount a fear.

~Ralph Waldo Emerson

With this new batch of Foundry miscreants halfway through their cohort, F2 tends to be more tech-oriented than the F1 guys that preceded them. Which means that they are smarter and spend their time mulling their baggy eyes through lines of code at weird times during the night - eating $5 pizza and "liberated" Rockstar Cola that mysteriously showed up on Foundry's footsteps last July.

CoverStruck, an audio/video startup founded by Foundry F2 member, Garrett Smith is like Youtube for the musically talented to showcase their artesian recreations of popular songs and support each other. I was surprised to note that Garrett has somehow locked down performance licenses from the three biggest music rights management companies so that users can upload their "interpretations" without fearing The Man.

While I can definitely see the benefit to "yet-to-be-discovered" musicians and their desire to not be sued, I found the user experience for non-musical norms like myself to be very intuitive. The front page has a rolling feed of videos that are on the site, it's addictive (kinda like Facebook's newsfeed) and I found myself returning to it to see what else was going to pop up.

What also cool is the way that the site is designed to encourage exploration. While the video is playing you can see who else has covered the song, who has covered other songs by the same mainstream artist and how many covers the particular musician has covered.

To give an example, I found a piano cover of "Use Somebody" by Kings of Leon and while I was watching the video, I noticed a tab that showed there were three other covers of that particular song. So once the first video finished, I checked out who else had done the song and then moved on to other Kings of Leon covers.

Surprisingly, I spent much more time than I planned to on the site and I think that speaks to the way Garrett is thinking about the user experience on both sides of the spectrum: the musicians and the music lovers.

CoverStruck is now saved in my favorites and I plan to use as I do work on my laptop - sort of like a Pandora for song covers (it's that good).

I recommend that you check them out and encourage your musician friends to be soothed by their ability to legally express themselves online.

Someday.

I hear a lot of kids in my age cohort talk about someday.

Someday they'll be on time to meetings. Someday they'll care. Someday they'll do things differently... when it matters someday.

I believe that they are right. Someday you will care. Someday.. when things matter you'll try to do things differently.

But none of that will matter because you won't have the capacity to survive when that opportunity comes. When you have been spending years practicing the art of 'just getting by', you get crushed by opportunities that require everything you have.

Not that there is anything wrong with mastering the art of getting by, in fact, I think that it speaks to the potential of human beings to get whatever it is they are committed to getting. It takes a highly optimized machine to get exactly the outcomes they are striving for. The implied heuristic here is that humans aren't broken - they are actually finely tuned. Aristotle makes this point best when he says,

"Excellence is an art won by training and habituation. We do not act rightly because we have virtue or excellence, but we rather have those because we have acted rightly. We are what we repeatedly do. Excellence, then, is not an act but a habit."

I love how eloquently Aristotle states that we don't do things excellently because we are born with an excellence gene - we become excellent (at anything) simply by repetition.

This is good news and bad news.

The good news is that over time (some people say 10,000 hours/625 days/1.71 years) you can become excellent at anything. The bad news is that you can be excellent at anything.

You can be excellent at avoiding conflict. seeking conflict, just getting by, keeping emotional distance from risky endeavors of the heart. Fill in the blank.

So what? What's the next step?

The next step is doing. Simply doing. Again, Aristotle ('cos he's smart) weighs in:

"We become just by performing just actions. Temperate by performing actions. Brave by performing brave actions."

Someday is NOT some state of being that you wake up to one morning somewhere in the future. Someday does not announce itself with you walking in slow motion through smoke. Someday does not arrive after a montage with the latest Kanye West song playing in the background.

Someday is right now. The choice you make every morning to play for keeps or 'do what you can with what you have'. There is a huge difference between playing to win and playing to not lose.

Because when that once-in-a-lifetime opportunities arrives - when you see that wave forming on the horizon- your ability to simply get on and ride is a product of how you chose to ride every other wave in your life prior to that.

And in that moment, when you are put to the ultimate test of doing something you've never done before when it really counts - getting married, building a company, offering forgiveness - how you decided to live your life 'when it didn't matter' is going to be the difference between getting smashed into the rocks or making history in the narrative of your life.

The Foundry - A Graduate's View

It’s a good idea to be yourself, not only because everybody else is taken, but because trying to be anything else doesn’t usually get you very far. - Chris Guillebeau

What is The Foundry?

It's a question that is easy to ask but hard to answer. What's amazing is how glib and cheesy it sounds when you try to describe its state of being its state of being. Foundry is not so much an organization as it is an experience; it focuses more on "doing" rather than "being."

So what is The Foundry? How about I start with what we do:

Participants are trained in the form and function of high-end, lightweight management technology. A high-leverage, precision-execution oriented set of documents that are easy to manage from, communicate the weekly snapshot of the company and allow managers to document their process as they push the frontier of their company forward. We use two documents, each are no longer than two pages. The quarterly planning document is called a MOKR (Mission, Objectives, Key Results) and a weekly planning Management Report that progresses the company to accomplish the quarterly objectives it sets for itself.

CEOs (and Foundry admins) are required to prepare a Management Report each week and upload it to their file within the Foundry Dropbox Folder by 6pm SHARP each Saturday. These documents reviewed by each CEO within a cohort. Each participant views the document with "revision marks" turned on and holds each other accountable for spelling, grammar and format defects. They also review each company's progress, plans and problems, keeping in mind that they are looking to contribute to assisting in any way possible.

On Monday morning they meet at 7:30am SHARP ready to add value to each other by providing insight, solutions or introductions within the their respective networks over the course of an hour so that the group progresses and learns faster together than any one individual would otherwise.

Foundry's role in that meeting is cultivate and batch together commons problems or challenges the cohort is facing ans solve them collectively - often leveraging a group discount or small sponsorship if the solution must be purchased.

The last requirement is to conduct a project review every 4 weeks which serves to model a board meeting. CEOs are encouraged to invite mentors, advisors, potential investors and other participants to engage in a dialoge about the monthly progress (things that are DONE and NOT DONE), personal and organizational learning, forward thinking plans and problems. It's typically a proverbial ass-kicking about your efforts to manage and guide your growing baby.. er, startup. It's an exhausting hour and a half but it provides clarity.

That's it. That's what we do. No fancy pants stratitegery. No superlative "crush it" dialogue. It's that simple. And it's effective.

Here's proof: 7 out 10 startups fail within the first year. 7 out of 10 Foundry companies survive.

So how do we generate the results that we do? The participants do everything. By participating in the Foundry, the act of contributing to each other creates their ownership in its existence. When participants no longer decide that the mechanics laid out above work for them, then we cease to exist. So far it's working.

That's why you can't talk about what it is unless you've been in it. To read and conceptualize what it's like is an order of magnitude different than to actually DO it - just like building a rocket ship out of legos doesn't qualify you to work for NASA.

Yes, we are a cult. Yes, we have rolling enrollment. So with these results and open-source management technology, why doesn't everyone join? The Foundry experience augments the startup experience which, like Fight Club, is confronting. Our management techniques aren't glitzy fancy pants Web 2.0 apps. They are 8x11 pieces of paper and they force you to publicly call yourself out to execute and announce to everyone when you don't. This alone confronts a lot of people who think that "getting the right answer" or "checking off a list" or " appearing to do complicated things with ease" makes them a good person.

For example I have seen experienced entrepreneurs get their asses handed to them in a Project Review or Monday Meeting by a 20-something student founder. And vice versa. This is a culture in which you learn, from everyone - ESPECIALLY when the message is packaged poorly. No one does that naturally, some stick around long enough to be transformed into someone that eventually welcomes this. Which is why most Foundry graduates are seemingly carved out of wood.

All of your inner demons, the thing that you have resistance around, will show up and be present in front of you and everyone else. Those uncomfortable and slimy "realities" that you do a good job of pretending aren't there, start announcing themselves loudly. What you decide to do at that point is what it means to be at risk to learn: you learn something, not about management or your company, but about yourself.

You will do this constantly, day in and day out.

We make a claim about forging entrepreneurs for life. On the surface it looks like company building but it's really the things that one learns when he or she is engages in the trench warfare of starting a company.

This is why Foundry accepts PEOPLE starting companies, NOT companies.