Working for a startup

A few days ago I commented on a post by Nikos  Moraitakis about why people should, of all things, want to work for a (greek) startup.  Today,  I read a post by Mike Greenfield, titled “Why Developers Aren’t Interested In Your Startup” which kind of reinforced my point of view.

First, here  is what I wrote in my comment, mildly edited.

Nikos, I think we should make understood, as emphatically as possible, that startups are VERY risky endeavors. They are not for the light hearted. And you do not want to lure the wrong people in them, as they will most probably quit on the first few obstacles. But attracting the wrong people  is a very probable turn of events in a crisis as the one we are undergoing in our country: you WILL lure them just because they have nothing else to do.

So, if the picture is as bleak as I am drawing it, how startups can ever find the right people to work for them?
There is a simple guiding principle here: economic behavior is about motives and the motive of a startup job is a reward substantially big to balance the high risk undertaken.
Having said that, I do not imply a financial reward necessarily, although this would be a strong motivator.
Since, by definition, startups do not have enough cash to pay big salaries, any kind of financial reward must have a variable element that relates to startup performance. Stock options is the most common such reward. This is the reason I had tried to open the discussion about stock options earlier this year.
Apart from the financial rewards, there are two other equally strong rewards:

  • do the things that you really really really like and are passionate about, and
  • learn a prodigiously lot of stuff in a very short time.

The first is not obvious. It concerns people with special skills that want to put them into work. If, for instance, someone has made studies in a very specialized area, it is not likely that he can put these studies to work anywhere else than in a startup. So if he really loves his field, he will be willing to undertake the hardships and the possibly less remuneration just to able to work on the thing he loves.

The second has to do with the multifaceted role that each employee plays in a startup. Actually, to be completely honest, there is no role. Not an exactly defined, at least. Especially in the very beginning.
It is, more or less, a broad direction that one gets, than a job description. Which means that he has to have the motive and the guts to pave his own way.

Greenfield’s findings support the view that financial rewards are one of the main motivators, although they appear fourth in the post. The other three are:

  • Industry
  • Founders’ reputation
  • Investors’ reputation

I relate also ‘industry’ to what I refer as ‘specialization’ for obvious reasons, and i tend to agree with Greenfield on his guess that working for a startup that potentially has the power to do social good or change the world in some aspect is also a big factor.

But apart from my beliefs and guesses it would be interesting to hear from others what would attract them to a startup despite the fact that they could possibly get a higher salary in a more mature company. What can counterbalance the financial rewards?

In search of angels

Earlier today, I read and shared a post which recounted the recent seeding of the, so called, drachma startup (congrats on this) and expressed, in the form of a wish, the following thought:

We need a paypal mafia of sorts. There’s enough old money in Greece to put this together, but it’s mostly in shipping and trading businesses, so it’s not connected to the tech scene in meaningful ways. This connection must be made and nurtured. I don’t know how this problem will be solved, I am not the right person to solve it. But here it is, laid out for the more creative minds out there to ponder.

At first, the thought seemed right to me but, pondering on the subject a bit longer, I finally  came to a different conclusion. History  and experience elsewhere (not only Silicon Valley but even in our continent) teaches us that it is the entrepreneurs themselves that become angels and VCs. And not any kind of entrepreneurs but the ones that have, broadly speaking, worked in the same areas and the same fields as the those they later opt to fund.

I don’t think we will see money from shipping flowing in internet startup investments in Greece anytime soon. And if we do, the expectations will most probably be wrong and the management of the investments not appropriate.

There is nothing wrong with the shipping people. They are not morons of some sort that miss to see the ‘lucrative’ opportunities of the Greek startups. On the contrary. They are extremely cunning and capable businessman, used in dealing with bigger and harder issues.  But they happen to have have shaped their mindset, practices and goal setting in an entirely different sector. And this makes all the difference.

Tech startups and internet startups are not traditional investments that can easily fit to appraisal models and have clear cycles and signs of rise or fall. A startup is not a vessel. Its business model is, in most cases, unknown. Or, changing too often. It is unlikely that, if it doesn’t proceed according to plan, it can be sold as scrap. The money that a ship owner can put into startups is money wasted for him as there is no shortage of investment opportunities in his sector with more foreseeable returns.

In my career I have experienced something like this twice. Not from ship owners but from bankers. Once as a simple employee, in the beginning of my carier, and the other as the executive who was supposed to run the ‘investment’.
In both cases the investor was a banking institution and the investment an IT company.

If there is one thing I can immediately pin point as the reason of failure (as they both were failures) it is this: the banking people thought of these companies (:their investments)  as mature businesses and tried  to manage them accordingly. Actually, for a long time,  I thought the same way. It was only after a lot of effort and pain that I realized that my role was not to run the business (as per my job description) but to find the business I was assigned to run. Unfortunately, Steve Blank had not come up yet with the The Four Steps to the Epiphany and he did not save me valuable time.

If there ever is going to be a crowd of angel investors from Greece, for Greece and in Greece, it must arise from the Greek startups and their successes. Which means it is going to take some time. It will not appear before we see some substantial exits and some real wealth  transfered to founders’ pockets. Once we have them both, then there will be angels.

Change the web, Social Entrepreneurship and a new 80/20

change-the-web-challenge-logo-smSome days ago I got glimpse in twitter of the Change the Web challenge. I took a look at it, to discover the underlying Social Action web site and its API. The Challenge was about using this API for a new innovative web application or widget. For some reason this appealed to me, although I generally do not participate to such contests. There was a money prize too, but that was not my  motive:  I would never agree to receive a monetary prize from a socially oriented initiative, only because it would be better spent if it were spent on its very cause.

The Change the Web Challenge
I have to admit that I was hasty in my decision on how to participate and what to build: I did not  look anything else apart from the API itself. I ended up paying in hard currency for this haste: lot of wasted time! Because, I, almost from the first moment, resolved in building a WordPress plugin with the Social Actions API.
I started coding and in a couple of days I was done only to find out that the Social Actions site already had such a plugin, a very well written one and definitively much better than mine.
Almost in panic, because the time was running out, I started thinking what could I build instead. I turned down the option of building a better plugin, because it was not only a matter of quality, but of originality too.
My mistake made me research better what was already in place and found that web site widgets were rather abundant. Except.. Except for wordpress.com where javascript, iframe and flash widgets are not allowed to run.

I remembered then the days I was trying to circumvent this limitation by employing Yahoo Pipes and the WordPress RSS widget. I did not find something similar revolving around the social actions API, and, despite this being a pretty simple solution (even though it took me a lot of hours to remember how pipes worked and catch up with the new features), I found it appealing since it would potentially be useful to the 7mio or so WordPress.com users. So I built a pipe which could be configured by users to retrieve actions theiy were interested in, in the form of an RSS feed (you can see it in action in the bottom of the sidebar of this blog) .

I  barely  had finished when I discovered that even this was not a good plan because Wordpess had committed to adopt the best plugin the challenge produced! This rendered my pipe obsolete and there was no time to go back in rebuilding my plugin. I did then what I should have done from the very beginning: looked at the ideas people had already posted in the relevant page and noticed that some kind of map would be a nice thing to produce.

With a few additions to the pipe and thanks to the Pipes Location Extractor, I managed finally to pull out something. Not much, but something.

so_act_map

Leasons learned

Thinking back my  experience, I realized that the whole thing looked pretty much as a  failed  startup.

I made the mistakes I wouldn’t have made if I was starting a business: I did not make a proper market research, I did  not check  what the users really desired, I ignored the opportunities and the threats… In sort, I got myself entangled in programming instead of building a product. How many such startup efforts had I scoffed in the past?

One step ahead.

From startups, my thought  jumped to social entrepreneurship only to realize the obvious: whatever you build,  the rules are the same. It is just the kind of returns that differ. In social entrepreneurship it’s not about making money. It’s about making a difference, aiding people and, ultimately, changing the world.

The new 80/20 rule

One more step ahead.

If social entrepreneurship mechanics are the same  with pro profit entrepreneurship why people who are experts in these mechanics do not do both? The easy answer is that entrepreneurs are mobilized by greed and not by human solidarity.

But I believe the truth is different. They just haven’t thought  about it!

I know many people that could do both and if they don’t, it is because they focus relentlessly on the success of their pro profit efforts and spend all their time there. And for some stages of entrepreneurship this is not only inevitable, but a prerequisite.

But then, there are so many other people that have tasted success, have turned into angel investors, have embarked on a second, or third or forth startup effort, while their bank account  has enough for the rest of their lives.

What if these people applied to themselves the famous 80/20 Google rule?

80% of their time and effort spent on their pro profit ventures and 20% on social entrepreneurship.

Think of the vast amount of talent, genious, power, skill and  resources that would go into this 20%. I am convinced that even a fraction of it would suffice to change the world.

Nothing lives on until you declare it dead: the web 2.0 case.

NASDAQ in Times Square, New York City.

Image via Wikipedia

The comparison of the current financial crisis with the thirties is a commonplace for bloggers and mainstream media alike. Yet, extremely few, if any, of those making the comparison were born, lived through or near the time of the big crash in 1929. And as history teaches us that history does not teach people anything, the comparison of the current crisis to the 1929 one, is just a matter of impressions. We will not be able to know and understand the implication of the current crisis for years. Which is also a generous premise, since, even today, we do not understand the causes of 1929 crisis.

Another commonplace comparison is the one with the .com collapse. The parallels here run truly scarce, as very few of the  web 2.0 companies made it to the stock market to get exorbitant valuations. So where is the comparison? To the fact that the good times for web2.0, meaning capital flow, copycat financing, building a new venture in a matter of days, etc,  will eventually end. And  end it will, there is no doubt about it, since the melt down of the big financial corporations will dry up the rest of the economy.

Yet, like a forest fire that helps a forest regenerate, this dry up will put the vigor of web 2.0 into a test. And like in the .com era, Darwin will see himself proven right once more, and the fittest will survive.

I can’t help reminding myself of all the articles I read in the late ’90s that were doupting the prospect of Amazon‘s survival.  Amazon is now an undeniable e-commerce king. It has also  gone far beyond that, transforming itself into the main web services provider, the behemoth of cloud computing.

A similar thing will happen to web 2.0: the most valuable companies, those adept and well adapted, those with sound business models and practices will survive to see themselves the business royalty of tomorrow. The crisis may take away some money capital from them, but will also provide the with new cheap human capital, less competitors and a market that settles around them.

Is web 2.0 declared dead? Good! Now it can start living.

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Meeting Jason

Yesterday I met Jason Calacanis. He was attending the Stream 2008 unconference in Athens,Greece  and the opportunity was ideal.
The meeting wasn’t by chance though. I learned about his coming through some Twitter friends and sent him an email asking for an interview.
He counter proposed that I should go to Stream and videotape the whole session he would be leading on Friday afternoon.
It didn’t take long for me to agree. I run there with my colleague Spyros, and recorded the whole session, plus an extra 10 minutes interview.

These are the two videos that follow. People interested in startups, especially now, under the heavy shadow of the looming financial crisis, should definitely watch the first one, where Jason relates his recent experiences from the Techcrunch50 event.In brief, the things covered are the following:

  • Observations and conclusions from Techcrunch50
  • zero cost startups and microfinancing
  • zombie startups
  • the end of servers
  • venture investment in the form of hosting
  • oversourcing of crowds
  • countries that generate startups: US, Israel, Korea, Japan and China.
  • risk aversion and role of negative press in Europe

The bullets might look a bit cryptic, but watch the video and you’ll understand.

The sound is a bit harsh in the first video as there is a lot of background noice (mostly coming from the air conditioning), but voices are audible.

The second is a bit more personal as Jason talks about his Greek roots and Mahalo.

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Short urls contest: bit.ly versus urlborg

The past few days there has been a lot of buzz for  short urls.
First, it was the announcement that tinyurl will support custom aliases for shortened urls, to make them more readable and memorable (see here).

Yesterday, it was the launching of a new short url service, bit.ly, that brings lots of new features hailed by many users.
As I read through Marshall Kirkpatrick’s excellent write up of bit.ly in RWW, I felt that a kind of injustice was done on my friend Panos who has developed a similar service (urlborg) some time ago, but has not received similar attention yet.

Trying not to be partial though, I decided to make a comparison table, to, first, see for myself, if what I was feeling was justified, and then post it here, for others to see too.

Features Bit.ly Urlborg
User Account No Yes (google accounts)
History Through cookie for the last 15 links shortened Total history of urls shortened as well as those clicked
Custom Url By modifying each url separately Through short domains
URL Previews Yes Yes
Thumbnails Yes No
Cached copy of every page Yes No
Media player in url preview No Yes
Mobile version of page in preview No Yes
Coupling Google Maps links to Yahoo maps links No Yes
Referrer tracking Yes No
API Yes Yes
XML, JSON for traffic data/thumbnails Yes Unknown yes
Submission Bookmarklet Yes Yes
OSX service No Yes
Scalability EC2 & S3 Google Apps Engine
Open Calais semantic analysis Planned
Geoparsing Planned

As one can see from the table above, with the exception of the planned features of bit.ly, urlborg, stands pretty well against it.
As a matter of fact, urlborg is better in history tracking because, by emplyoing the Google account mechanism, it can keep track of all short urls created and/or clicked by a certain user.
Urlborg does not support thumbnails, but offsets the lack of this feature by other (mobile page preview, coupled map urls, media player) which, depending on the use, might be more important to a user.
Referral tracking is something missing from urlborg and it should be there. But the support of short domains prevails in significance to the support of custom urls, (or aliases in the case of tinyurl).

From the above, I think that my gut feeling is justified and that urlborg should receive some more attention. It deserves it.

Plurkmania: statistics for plurk (Updated)

Plurk, the recently launched microblogging service, with the uncommon timeline interface, and the features considered by many as childish (: funny emoticons, karma, and karma related ‘creatures’) is not exactly the favorite of A-list bloggers. Despite  the considerable amount of people that joined it, plurk remains in the shadow of the more ‘serious’ twitter and friendfeed. As if it had to be considered an alternative to them! Whatever utility one can get from such services is up to the community that will form around it.

Having said this, I must recognise that the ease of making  threaded discussions, the notifications for new updates, which, unlike twitter, is inherent in plurk, and the toys (:emoticons, etc) available, predispose people to behave differently. So most, actually, use it for chatting. And this is not bad at all, provided one knows what to expect.

It would take just a couple of changes though, to make it a serious twitter competitor: strip all the funny stuff and replace the timeline interface with the one used in the mobile version. Ok, maybe SMS too, although I do not consider it a serious possibility for plurk. Since one thread ca easily reach 100 responses, it would be almost a martyrdom to get so many updates through SMS.

Plurk has not published any API so far, but there is an unofficial one. The lack of an API and the inclusion of auto refresh in the web application, has not motivated developers to create add-ons, twitter style. Adobe Air apps, search engines, statistics, special feeds or hash tags etc. are simply not there.

Not entirely though. Hellotxt and ping.fm offer posting possibilities and one can easily get the plurk feed in friendfeed in the form of a blog feed. There is also twistermc for firefox and maybe some more.

Recently I came across a site that is dedicated to plurk statistics: Plurkmania (A twitter friend introduced me to it. Many thanks!).

2008-07-06_2022

Since there is very little information on the site (although, in a previous visit, I am almost sure that  I saw that a 24 year old was the site creator) I can only assume that it is using the unofficial API to get the stats out.

2008-07-06_2009 Yet, the stats collected are interesting, not for plurk itself only, but for comparisons also.

Plurkmania allows ordering plurk users by:

  • Karma
  • Location
  • Friends
  • Fans
  • Friends & Fans
  • Plurks
  • Responses
  • Plurks & Responses
  • # Recruited

There are also some extra stats for

  • Gender
  • Relationship
  • Creature (!)
  • Theme

but with numbers that do  add up to the plurk population, not even close. This discrepancy may be attibuted to users not filling information as far Gender and  Relationship are concerned  but cannot be explained for Creature and Theme which should be applicable to all.

Of course, one, by entering his plurk name, can get personal statistics too .

Mine follow.

2008-07-06_2020

(At the time of writing, I discovered through this that I am the top plurk recruiter for Greece -although the number is really small- and that I rank 25th for the whole world).

In a sense, like plurk, plurkmania is amusing. Check the rank by fans, for instance. Leo Laporte is nr 1, but his karma is a mediocre 31.64. Likewise for Scoble (#2 and 24.74 respectively). Darren Rowse does pretty well on both though (#10, 74.47).

This is explainable. A-list bloggers can easily attract followers in any new service, but apparently they don’t care for posting in plurk.

Plurkmania can be a success. Whenever and wherever there is a possibility for people to rank high, they come and look. Same for plurk rankings, provided that plurk will be around for long.

:)

Update: Ok, I found the creator. And he gives some important info too. In two days, we should be expecting the official launch.

Update 2: Plurkmania  is on Mashable. If it was this post that helped plurkmania to make it to mashable, then I am certainly glad!

Related:

http://www.mpdailyfix.com/2008/07/while_alisters_hype_friendfeed.html

http://www.problogger.net/archives/2008/06/06/playing-with-plurk/

http://www.downloadsquad.com/2008/06/02/plurk-twitter-clone-or-heir-to-twitters-throne/

http://thenextweb.org/2008/06/02/are-you-already-plurking/

Startups by the sea: the OpenCoffee/Techcrunch event in Athens

My home country is renown for two things: its antiquity and its islands (a favorite destination of millions of tourists in the summer).
Yesterday, I think, we started to change this picture, a bit. We did not eliminate the sea element, but we scrapped the views that Greece is an ancient country with no startups.

OpenCoffee Greece and Techcrunch UK organized an event by the sea, in a very summer-like and relaxed place (as you can testify by the short video below). A bunch of Greek startups had the opportunity to present themselves and become a little bit more known to a larger puplic.
From my small participation in the preparations, I happen to know that it was arranged and organized in record time: only a month from decision to the actual event.

An enthusiastic crowd of around 200-250 people managed to gather at Bocca Beach, and follow patiently the presentations to the end, despite the long delay caused by the failure of some sound equipment, the nervousness of the presenters and the constant beer distractions.

I managed to attend too, despite (or against) my raging flu, and I do not regret it.

Mike Butcher, of Techcrunch UK, kicked off the event, presenting the general trends regarding VCs, startups and investments in Europe. The whole thing can be summed up in one sentence: the future of the European startups is mobile, something that I strongly believe also.

I will not go through the startup presentations, one by one. I will blog about them in the near future.
For those interested, here is a quick list of the startups.

Blymee (more)
Photo Frame Show (more)
Slideflickr (more)
Sojourner (more)
Transifex (more)
Askmarkets (more)
Wadja (more)
Qualia (more)
Product Madness (more)

The greek budding startup ecosystem was one of the reasons I decided to blog in English. Technology, internet and startups are, by definition, global things and English in the lingua franca of nowdays.
So, stay tuned! More startups to come. :)

Soundsnap: a free-sounds repository


A twitter friend pointed me yesterday to Soundsnap, a new site that offers tons of free sounds. Never before have I  bothered to check the existence of this type of sites, so I don’t know whether this is a novelty or not. But, being a  podcaster, I run to check whether the material is available for podcasting use that could fit my needs.

Soundsnap is not a music site. All one can find there is plain sounds that can be used for special sound effects, remix etc.

It is a simple, clean site, with community features. Created by some sound pros, it is dedicated to uploading and sharing sounds. It is ad and sponsor supported.

A quick look reveals thousands of sounds available for downloading which one can listen to with the available flash player.

The site is build with drupal and a few add ons but  it is not the ‘coolness’ of the underlying CMS that matters here.

The only thing I have a slight objection for, is that the terms of use allow only public domain material to be uploaded. A creative-commons-also approach could make Soundsnap more attractive to contributors.
Nevertheless, it is useful as it is.