Sunday, February 28, 2010

Kiwi lean startup + Australia next

Wrapping up a fabulous few weeks in New Zealand, where I had the privilege of attending some great events, like Kiwi Foo and Webstock; met some amazing entrepreneurs and inventors (yes, including a jet pack); and generally enjoyed a supportive and enthusiastic reception. I want to especially thank the dozens of Kiwis who acted as my guardians and escorts from place to place, even driving me around on the wrong side of the road

Every tourist will tell you that New Zealand is a beautiful country, and they are not kidding.

I would add that the people I met were extraordinarily welcoming, friendly, and humble. In fact, you have to learn to adjust to the humility. Quite a few Kiwis told me that they "didn't count" as entrepreneurs, even though they own their own business. Their supposed lack of ambition was belied by the many cool demos and startups I got to meet. If you're in Europe, for example, keep an eye out for the innovative YikeBike, a new kind of personal transport device. It was described to me as "what the Segway should have been." Overall, I came away from the experience optimistic about the potential of New Zealand to cultivate a significant startup hub. I look forward to seeing it happen. If anyone is interested, the Wellington Lean Startup Meetup is a good place to start.

Up next is an extremely brief stop in Australia. I'm particularly looking forward to inaugurating the Sydney Lean Startup meetup. We'll be kicking it off with an event featuring yours truly Monday March 1 at 6pm. If you're a Sydney entrepreneur, I hope you'll stop by. Last time I checked, there were still a few half-price tickets left. You can register here.

Most of the events I did here were private, so there aren't as many videos and slides available. For now, you'll have to make do with the slides from my keynote at Webstock:

Hopefully, video of that talk will be available soon. For a preview, you can check out this "backstage pass" interview, which was recorded at Kiwi Foo a few days before.

I also did a radio interview on Radio New Zealand's Nine to Noon program. You can hear me attempt to explain the ideas behind the lean startup to the general public in MP3 or Ogg.

Webstock generated a lot of follow-on commentary, including a number of reviews. For a good synopsis of my talk (and the other keynotes), check out Idealog's blog. I also recorded an interview with them, which should be in the next issue of their extremely cool-looking print magazine. Other write-ups: NZ Herald, gianouts, Te Ara, Public Address, Bibliophile, BIB. Also, if you're an event organizer, check out some of the innovative ways the Webstock team encouraged attendees to interact with each other and with the speakers. Highlights for me were the Webstock Game and Webstock Bingo.

Last, if you didn't get a chance to see it, be sure to check out this video of the closing performance for Webstock (which was also an award show called the ONYAs). It was mind-expanding:

Monday, February 22, 2010

Why diversity matters (the meritocracy business)

Diversity is the canary in the coal mine for meritocracy. As entrepreneurs, more than any other industry, we’re in the meritocracy business. The companies that make decisions based on merit, rather than title, politics, or hierarchy execute faster and learn faster than their competitors. For startups (and other innovators), that’s a decisive advantage.

So when a team lacks diversity, that’s a bad sign. What are the odds that the decisions that were made to create that team were really meritocratic? That’s why I care a lot about diversity: not for its own sake, but because it is a source of strength for teams that have it, and a symptom of dysfunction for those that don’t.

There’s been a lot of hand-wringing about gender equity in the high-tech and entrepreneurship worlds lately. This is a good thing. (I want to especially recognize Vivek Wadhwa and Brad Feld for their leadership.) We have a lot of introspection to do. By any objective standard, we ought to be diverse. Our industries are young, so there hasn’t been time yet to become encrusted with too many traditions that exclude outsiders. The work itself, especially in startups, depends primarily on intelligence, communication, creativity and empathy. Even the most radical Bell Curve-style thinkers have to concede that even if there are differences between men and women in the distribution of these traits on average, these curve have substantial overlap, and there should still be a lot more of them represented in high-tech startups.

For the record, I don’t think such biological differences are one-sided in favor of men. In fact, recent research suggests just the opposite. Vivek Wadhwa and his team continue their excellent work investigating the true nature of entrepreneurship. Their recent article suggests that startups led by women are actually more successful, on average, than those led by men. This doesn’t surprise me at all, and you don’t have to support a biological determinism theory to see why. If women face structural barriers to becoming entrepreneurs, then those few who are able to overcome those barriers are probably exceptional to begin with. Or, maybe it is true that women make better entrepreneurs than men. Either way, we’ll benefit if more women are welcomed into startups and other high-tech companies.

Diverse teams make better decisions than homogenous ones. I won’t recap the academic research that underlies this assertion; for that, you should read James Surowecki’s excellent Wisdom of Crowds. The most counter-intuitive part of this phenomenon, though, is that this diversity still improves outcomes even when the added opinions are less accurate than the previous consensus. The hypothesis, which makes sense to me based on the teams I’ve worked with, is that having someone with a wacky outlier-type experience causes everyone else to reexamine their own assumptions and find flaws in their own argument. So, even if you already know best, you’ll still benefit from having others on your team to challenge you.

Diversity benefits men, too. One of the most pernicious effects of groupthink is the sense of entitlement it breeds. Teams that are complacent are less likely to challenge their own assumptions, less likely to listen to feedback and, therefore, less likely to learn. This is especially important across functional lines. I’ve seen many times what happens when a single department get’s holed-up in its own space, like the terrifying “operations cave.” Outsiders are afraid to enter, let alone make a suggestion. The safety of the group becomes an impediment to dealing with reality. Problems are easily dismissed as PEBKAC ("Problem Exists Between Keyboard And Chair") rather than as opportunities for root cause analysis. Engineers are offenders in this category too, but so is any gender-segregated activity, like an all-female PR or marketing team.

Diversity is not the only requirement for making good group decisions. Two others – that each team member give their input independently and that the results be objectively aggregated – are also key parts of building a meritocracy. To be clear, though, this diversity refers only to diversity of opinion, not necessarily to demographic diversity. So why is demographic diversity important?

Demographic diversity is an indicator. It’s a reasonable inference that a group that is homogeneous in appearance was probably chosen by a biased selector. Even if men have an innate advantage at software development, the gap would have to be massive in order to explain why startup after startup has an all-male team.

Another explanation is that of compounding effects throughout the “pipeline” of candidates. In school, women are discouraged from pursuing math and science. Smart women are often stigmatized. Teachers aren’t encouraging. Women are paid less than men. And sexism is surely implicated in many career decisions. These effects compound, becoming larger over time. But this can’t possibly be the whole story. If it were, entrepreneurship would have a much larger proportion of women at every level compare to other industries – because tech entrepreneurs are younger than successful people in most other fields. There’s much less of a career ladder to climb, and therefore less time for these compounding effects to add up.

Plus, technical skills are easily learned – in my experience – by anyone with sufficient IQ and determination. I have personally taught many “non-technical” people to program – graphic designers, QA folks, even artists and animators. When those people have the chance to contribute in a meritocratic environment, they have many opportunities to learn and grow. So why aren’t more women finding themselves in the position to get started on their 10,000 hours?

With identity issues, there is no dichotomy between symbolic action and substantive action, thanks to a human tendency known as priming. In psychology research, when subjects are simply reminded of some aspect of their identity, and then measured performing a task, the pre-task activity “primes” their brain in ways that affects their performance. If the priming involves a negative stereotype, it has negative effects. So, for example, asking men and women about their gender before giving them a math test produces a significantly different result than asking other innocuous questions. (See this study among many others:

Even the fact that a startup is all-male can make it less likely that a women would want to join. Even worse, it might even affect her performance in an interview. And just solving the gender imbalance might not be helpful, if the solution involves yet more negative stereotypes. Which is why affirmative action doesn’t help. A company with an all-female support staff sends, in some ways, an even worse signal.

Understanding these problems can make the solutions seem intractable. After all, if you already have an all-male startup, you’re already at a disadvantage when it comes to hiring the very women that could fix that imbalance. But priming cuts both ways: when we go out of our way to affirm meritocracy, it actually improves everyone’s performance. In fact, explicitly making meritocracy a value is actually better than rejecting stereotypes – by calling attention to the stereotype, you’re still engaging in priming.

Instead of focusing on programs designed to specifically benefit any one group, I think our focus should be on making our companies as meritocratic as possible. I want to start with the easiest suggestion I can think of, one that I’ve personally used with great success. I first tried it as an experiment after reading in Blink that after symphony orchestras instituted blind auditions (where conductors can’t see who is actually playing), gender equality soon followed. In the US, women’s participation went from about 5% to 50% over the course of two decades. What’s notable about this change is that it has nothing to do with gender per se, and probably also eliminated many other forms of unconscious bias.

Now, whenever I screen resumes, I ask the recruiter to black out any demographic information from the resume itself: name, age, gender, country of origin. The first time I did this experiment, I felt a strange feeling of vertigo while reading the resume. “Who is this guy?” I had a hard time forming a visual image, which made it harder to try and compare each candidate to the successful people I’d worked with in the past. It was an uncomfortable feeling, which instantly revealed just how much I’d been relying on surface qualities when screening resumes before – even when I thought I was being 100% meritocratic. And, much to my surprise (and embarrassment), the kinds of people I started phone-screening changed immediately.

And yet, when I suggest this practice to hiring managers and recruiters alike, they rarely do it. Hiring managers say, “the recruiter would never go for it” while recruiters say, “the hiring manager won’t accept it.” What I think we’re really saying is: “I don’t want to know if I am biased.” That's understandable - it's embarrassing! Even if our biases are only implicit and not consciously held, the systems we build can still contain bias. When we change a hiring policy, especially if we do it in a visible way, we reap two benefits. We actually improve our hiring process and also signal our commitment to meritocracy.

Now, I don’t know how to conduct blind interviews for startup or high-tech jobs. If I did, I would try it in a heartbeat. But even after the initial resume screen, I think there are things we can do to ensure our decision process is merit-based. I’ve covered these in some detail in two previous posts: one on Assessing fit and one on conducting a technical interview. In short, it’s essential to keep the interview focused on the substance of the work the candidate will be asked to do, and not on gotcha or brain-teaser questions. Then, in the evaluation process, it’s essential that the discussion focus only on pertinent aspects of the candidate’s performance, again obeying the three rules of group decision-making: diversity, independence, and objective aggregation.

One last suggestion, which is a technique I learned from my IMVU co-founder Will Harvey. When it’s possible, I always believe in giving a promising candidate who interviewed poorly a chance to demonstrate their skills with a real application exercise. At my last company, for programming jobs, we’d give some candidates a chance to prove themselves by writing a real working program in just a day or two (usually, to write a version of Tetris from scratch). We’d do the evaluations of that code blind – without the person in the room. In some cases, we’d dramatically revise an opinion formed during our live interview. The work product is a more realistic test, although it requires much more work on the part of the candidate.

Beyond hiring, our actual work process matters, too. I already advocate cross-functional teams as part of the lean startup methodology. Here I will only touch on one of their benefits, which is the opportunity for people to learn new skills. When teams are capacity constrained, their natural inclination is to let work pile up. This leads to a loss of quality and an increase in cycle time, both of which are negative. For more on this subject, take a look at The product manager's lament. Suffice to say that when teams are left on their own to innovate, they take on a “whatever it takes” attitude. This often leads to people discovering new skills they didn’t know they had.

By itself, that’s a pretty minor impact. But combined with a true merit-based decision making process, it becomes much bigger. If teams are rewarded for the results they achieve, and ideas can come from anywhere on the team, there’s a positive feedback loop available for people who are willing to learn: as they take on new skills, they become more successful at their job. Contrast that with a traditional siloed department. If you only get promoted for getting better at design, you’re unlikely to get positive reinforcement for picking up some programming skills (and vice-versa). And when people who started out as designers or marketers (or other supposedly "soft" disciplines) have the opportunity to learn programming, we effectively create new pathways to entrepreneurship that bypass the traditional pipeline problems. And, like everything else I've discussed, this also cuts both ways: programmers who learn design skills are much more likely to become successful entrepreneurs, too. I'll let Dave McClure explain why, if you'd like the detailed argument.

There’s a lot more we can do than just these ideas. All the usual ideas are good ones: I support inviting more women to speak at conferences, the creation of women-centric networking events like Women 2.0 and Girls in Tech, reforming the way we teach math and science in public schools, adopting more family-friendly public policy, the creation of TiE-like organizations. And, of course, the Startup Visa will be a tremendous help as well. None of these are impossible. Last year, I traveled to dozens of cities talking about lean startups and meeting people interested in entrepreneurship. Almost everywhere, I spoke to rooms full of (mostly) men. There was one notable exception: Sweden. It’s not a coincidence; rather, it’s the result of proactive public policy. (And, before we get to that old tired argument: no, I do not believe you need to become a socialist country in order to achieve those results. I haven’t seen any evidence to support that assertion, although I hear it all the time.)

I think we could all do some serious thinking about how we can be part of the solution in our own lives. I’ve been in many rooms – and at countless events – with entrepreneurs and VC’s that I think would make women uncomfortable. The sexual jokes, the crude comments, even just the usual "success theater" chest thumping – all that macho BS. Personally, I have a moral objection to that behavior. But I recognize that there are plenty of people who disagree (and I’d welcome a chance to hear why they think it’s OK; I honestly don’t get it). We still shouldn’t tolerate it. We laugh at people who think software patents are awesome, or want to give the RIAA more power, or think big companies should have a veto power over new technologies that are “too disruptive.” Those are all positions that are coherent, understandable, and anti-meritocratic. We need to recognize that supporting a homogeneous status quo is just as dumb, and just as bad for our industry.

After all, we're in the meritocracy business.

Update: Some of the commenters both here and over at Hacker News seem to be struggling with the math part of the argument, which is that even if there are biological differences in ability, they are not large enough to explain the observed outcome. I'm not much of a statistician, so I am indebted to @hypatiadotca who shared this excellent and brief presentation by Terri Oda. It is so much better than my own attempts to argue the point that I am including it here. Enjoy:

Monday, February 8, 2010

Beware of Vanity Metrics (for Harvard Business Review)

The next article in my series on entrepreneurship for Harvard Business Review is live today. Once again, we revisit the topic of Actionable metrics and their nemesis: Vanity metrics. Any entrepreneur with a decent reality distortion field can find metrics that make it look like they're being successful. This "success theater" is occasionally useful for PR or getting through a tough board meeting. But it's lethal when we start to run the company using vanity metrics as a guide. But how do we know which metrics to look at? How do we know how much energy to invest in analytics vs. doing real work? And how do we get the whole team to take action that benefits real people when all they're looking at is abstract numbers on a screen? Remember "metrics are people, too." For more, read on...
Entrepreneurs: Beware of Vanity Metrics - The Conversation - Harvard Business Review:

The idea is simple. Establish baseline metrics by building the minimum viable product — the minimum required to measure the response of early adopters. Then, in each development cycle, use the insights gained by studying customers to make improvements. This is the source of validated learning — proof that the customer insights translate into tangible metrics improvements.

But this leaves a very difficult problem still to be solved: How do we know that these changes are what actually effect change in the metrics that we're observing?

This is the curse of vanity metrics, numbers which look good on paper but aren't action oriented: website hits, message volume, or 'billions and billions served.' They look great in a press release, but what do they accomplish?
Consider a scenario where a team makes a product change, and the very next month page views go up. As humans, we're hard-wired to infer causality from correlation: when the numbers go up, we tend to take credit. But when the numbers go down, we tend to blame someone or something else. Worse yet, different team members tend to attribute positive changes to whatever project they were working on at the time (but not negative changes, of course). As a result, different parts of the team are constantly "learning" in their own private reality. When those teams face difficult choices, it's incredibly hard for them to come together and make an informed, fact-based decision.

To avoid falling into this trap, I recommend you follow the three A's of metrics. All metrics should be actionable, accessible, and auditable...
Read the rest of Entrepreneurs: Beware of Vanity Metrics at The Conversation on Harvard Business Review. Don't forget to leave a comment.

Sunday, February 7, 2010

Tell your Startup Visa story

I've been promising big Startup Visa-related news on Twitter for a few weeks. There is news, it's very exciting, and I still can't share it. Soon, I promise. But in order for this idea to progress into legislation,  we need your help. Whether you're a US citizen or an immigrant, entrepreneur or investor, founder or employee, there's something you can do. This is especially true if you live outside the echo chamber of Silicon Valley. There are four ways to get involved below. Even if none apply to you, see if you know someone who could help. Thanks!

  1. If you are an immigrant founder who has helped build a company that has created jobs in the US, we need you to tell your story. If we receive your story by February 27th, it will become part of our Geeks on a Plane DC delegation (including me) talking to lawmakers. We've created a place where you can tell your Startup Visa story anonymously if you'd like. Or, if you'd prefer to do it by video, you can upload to YouTube - just use the "startup visa" tag.

  2. If you're a startup investor, and you support the goals of the Startup Visa proposal, we'd like you lend your name to our efforts. You can read about the latest iteration of the proposal at If you're willing to publicly sign on to a letter of support, please get in touch. If you'd be willing to talk to the press about your support, please leave a comment here as well.

  3. If you are a US citizen that is employed at a company with at least one immigrant founder, we'd love to hear your stories, too. Part of our belief in advancing this legislation is that more startup founders means more jobs and economic growth for everyone. The fact of Americans standing up for our values - of openness, meritocracy, and entrepreneurship - is especially powerful.

  4. If you're registered to vote in the United States, and you'd like your elected representatives to know that you support the Startup Visa, you can register your support in just two minutes at Although signing up is about as much work as a tweet, the impact is much larger. 2gov does the work to produce hard-copy reports of constituent sentiment and delivers them to the appropriate officials. So by signing up, you're sending a message directly to the decision-makers who depend on your votes for their jobs.
I hope you'll choose one of the steps above to help out. If you have other ideas, please feel free to leave them in a comment.

I know that sometimes campaigns like this can seem overwhelming. But your support has already had tremendous impact. The good news I hope we'll get to announce in a few days is the direct result of the twitter campaign you helped launch last year. At some point, I hope I'll be able to tell you more. For now, take my word for it. You are making this happen. Thank you.

Saturday, February 6, 2010

Speaking 2010: Webstock, GDC, Web 2.0, and more

I've been trying hard to cut back on travel in 2010 so as to have more time for writing. I started to feel like my blog became too much of a travel diary last year - and I still have many videos and presentations from last fall that I haven't shared yet. If you'd like to see me speak this year, there are only a few opportunities scheduled.

Next week, I'll be in New Zealand for Webstock 2010. I'll be giving a day-long workshop as well as a keynote address.They've got a great programme; my workshop will be on Monday, February 15 and my keynote will be Friday, February 19. I'll also be stopping by Kiwi Foo. If you're at either event, please do come say hello.

In March, I'll be speaking at the Game Developers Conference in San Francisco. Since we'll have a game-oriented crowd, I'll be talking more about my "virtual worlds" background than I normally do. I often get asked how lean startup ideas can work for the video game industry - which is, of course, where I originally started working on them. The talk itself will be Tuesday, March 9 at 11:15am.

In April, stay tuned for word on the Startup Lessons Learned Conference, which will also be held in San Francisco. Rather than make a premature announcement, I'll invite you to take the survey and help us make the event better.

In May, I'll be giving a keynote address at the Web 2.0 Expo in San Francisco. I'm especially excited about this, because last year's Expo was the very first time I'd given the lean startup presentation to a large audience. The enthusiastic reception that day was part of what gave me the confidence to leap into this job full-time. I'm quite grateful to everyone who attended, and to the organizers who made it possible.

This year, lean startups will be a big part of the Web 2.0 Expo. In addition to my keynote, Steve Blank will be speaking. There's also a one-day Lean Startup Intensive on the first day of the conference (May 3). This will be a kind of "lean startup all-stars" event featuring a number of speakers and panels. Watch this blog for details. You can register for the intensive here. Thanks to the support of TechWeb, we'll be organizing a scholarship program for this event (stay tuned). Last, there are five large-scale sponsorship spots open for the event. If you've ever wanted to be a sponsor of a big event like the Web 2.0 Expo, but don't want to have your logo lost in the sea of sponsors, perhaps this would be a good choice. To get more info about sponsorship, you can contact Susan Young.

And, if you can't make it to any events this year, you can still catch the video. For example, here's the video of my talk last month at Twiistup in Los Angeles (slides are posted here):

I try to post event-related updates to Twitter, but if you want to subscribe to my event-specific plans directly, I'm trying Plancast (a new startup founded by a friend). You can subscribe to my plans here. Last, for those who are following the Startup Visa movement, we're planning a trip to DC in early March. If you'd like to participate, you can subscribe for updates on our Plancast page.