Does this make sense?

More specifically, does it make sense to think about the beauty of a company?

I’m betting on it

The metrics we read about in blogs and autobiographies or watch in interviews concentrate on product, market size, sales, revenue, profit, competition, margins, and even core company culture to attract the best team. It isn’t often that we hear an entrepreneur speaking directly about the beauty of their company, and even today it’s rare for them to describe that beauty as essential to company success.

When I write of company beauty I’m not referring to gorgeous products, else we may confuse brothels and Apple with a beautiful company. Both of those examples could be beautiful, but an attractive offering is only a byproduct of a beautiful company. It’s one external signal among all the inner workings of the entire enterprise.

How do we begin

Beauty is in the eyes of the beholder, so strict rules make little sense for constructing a handsome company. I’m going to assume you have gotten past the substantial hurdle of finding your niche.

Identify three things that you associate with beauty and jot down a quick sentence about how your company exemplifies each of these qualities.

My list right now:

• Cultivate an environment of calm joyful focus¹
• Provide all reasonable customers with an unmatched experience of satisfaction and trust
• Create separate areas for calm focus where the team can create with minimal distraction, mixed with inspirational open areas with scenic natural views and art

That’s it you’re done with the first step. That is the foundation of helping to create a beautiful company. Get your team on board by creating their own lists and reduce the set into one company charter with ~10 elements of beauty. Update the list periodically as a company, to promote growth and alignment changes. Encourage and call attention to the folks who strive for and champion the essence of what makes your business beautiful.

Notes:

1. Calm and joyful isn’t necessarily predictable. It also entails rooting out and removing bullies and negative influences

Internal Startup Signals

The web is littered with dozens of articles covering negative and positive startup signaling due to investor participation by round, but there aren’t nearly as many focused on internal startup signals and strategy. By signals I refer to sum of all communications both planned and accidental, internal (culture) and external (marketing).

After working on sprint projects (days to months) for a year and a half, I’ve seen more than my fair share of mishaps. Failures are discrete learning opportunities for entrepreneurs, and those who’ve broken through to the other side capitalize on errors by combining action and observation. With each mistake they learn another valuable lesson about building a company or their market. One design lesson I realized in my own missteps is the essential need for a driving long term product vision.

The power of a single cohesive story begins with attracting cofounders and early hires, and leads to landing pivotal partners and customers. Prototypes don’t require the features and polish of a finished product, but each step must be part of a story for realizing the startup’s raison d’etre or reason for existence. Curious side projects have little hope of exceeding the critical threshold to becoming real, unless they can be aligned to an overarching company purpose.

President John F. Kennedy didn’t pitch building better rockets to the American people by showing them a handful of designs, he authoritatively addressed congress in 1961 declaring a national goal of “landing a man on the Moon”.

With the way media celebrates and demonizes pop company leadership, the message implied is that the CEO or founders are the core of a business. But I’m writing today because this is incorrect. A handful of energetic voices are an inadequate foundation for a lasting business. Nor is the core of a business it’s technology staff or creative talent. The vital kernel of any nascent business is purpose. One mega ego or even a few large egos may be present at company formation, but without a mission to drive them forward, to bind them together, and attract new talent they will drift apart, or at best develop a transient business*.

Purpose outlasts founders, investors, and CEOs

Market need met with corporate execution are ongoing requirements for doing business, but they aren’t the corporate identity. If branding is how the world perceives a business, then purpose is how people inside view a company. Businesses survive changing leadership, losing key employees, and trading investors. Corporations die without purpose, and greed is not enough^.

Notes:
*= Transient companies are short lived or the type of companies that are acquired and then quickly fall apart.

^= Unless your Goldman Sachs

Plenty of points of debate, for instance the paying at the top of the market price for an employee is preemptive genius. Plan to have the best staff, and grow with that assumption. I believe Netflix may be pushing execution and performance too far, which inspires a culture of backstabbing when catastrophe hits. Teams need to count on each other under intense stress, and that network focus wasn’t weaved into the message. Managers appear to have supreme authority in market adjusting salaries, firing and promotions. On the bright side the controlled chaos approach Netflix takes towards innovation and execution is like looking into the future of corporate growth. As a frame of reference, Google‘s 20% self directed time and generous salaries are a neighboring corporate culture to Netflix.

I was never interested in team competitive sports as a kid (I couldn’t take the coaches job). My take away from the slide deck is to better understand the positive motivators that went into their cultural design strategy, and apply what best fits with my own startup plans.

Bridges are an iconic form of connection, allowing people and resources to traverse bodies of water. There’s an enormous market for linking separate resources together. Telegraphs and later phones showed us that sending messages back and forth over great distances was not only feasible, but incredibly valuable. Fast forward a couple of hundred years from the telegraph and behold the marvel of Internet connectivity. It is the vastest network in the world, recently surpassing voice data carried by the global telecom network.

Businesses that specialize in being networks, don’t provide end users greater value by diluting resources and also being islands (content). Competition and user value flourish when network companies focus on connecting isolated value, and get out of the way. I can’t enumerate the number of fumbled opportunities caused by organizations that forget who and what they were, which is the fault of poor leadership. Corporations tend to optimize the space they compete in or die out. What this results in are companies that are best at connecting islands, or alternatively businesses that focus on being the best type of island. Large corporations mingle these ideas together and dilute their value by trying to be everything to everyone. If corporations aren’t willing to spin off dedicated companies, the free market forces their hand with leaner and more focused competitors. This corrective force fails in the presence of monopolies, and social unrest results without government intervention. If only governments were subject to free market forces (that’s a topic for a different post).

Fully Connected Networks Favor Verticals

Take this concept and graft the idea of niche verticals and horizontal markets (this is the kind of freedom and fun you can have as a blogger). Horizontal markets have broad appeal and general utility to a large segment of people or businesses. In a world that is hyper connected I’m unsure what necessity the horizontal markets provide other than as connectors. There is a much greater demand for connectivity than there is for one size fits all solutions.

Case Review: The Stages of Social Network Value

From my limited perspective I can extract a framework from the social and business trends over the past 15 years or so since the Internet became commercialized:

• curious developers and entrepreneurs explore, invent, and copy utilities that support a social desire until they happen upon a compelling value proposition for folks to opt in
• widely receptive alpha patterns bind the attention of self sustaining populaces. We call this traction, and it can occur for certain groups with a zero cost of customer acquisition. More folks join and stay growing the user base rapidly
• resources channel to support the largest alpha patterns reinforcing them and making them into scalable structures. This happens best through organic sales, but often requires external funding
• users attempt to customize the broad patterns to their specific needs. This is the beginning of new islands in a connected sea. Depending on the design of the business this reinforces it, or causes splinter markets to form
• big business deals are made to funnel attention and exchange it for capital or greater marketing
• at this point the pattern transforms into a sustainable (profitable) entity, or is acquired by other larger businesses
• there is little left of the original alpha pattern that captured the imagination of users. The business then goes through cycles of evolution, or (slowly?) begins to fade
• shifting social needs and expectations look for alternative alpha patterns

At least in the area of communication and idea sharing on the Net there appears to be an Island->Connector transformation. A systematic problem I see is that connectors try to go back to being islands, or try to remain islands to maximize revenue now. That activity nearly always ends up in killing the network. Corporations that best execute at the different stages capture the most attention and revenue, but the organizations which continue to sustain themselves and grow recognize what their identity is and expend resources supporting that role.

I Could Have Jumped the Shark on this Trend

I’m curious what trends you see in large horizontal markets. Are they being segmented into specialized “islands” of service? Is the ultimate extreme of this trend individual customized products that can easily communicate over a vast network ocean?

Part of the attraction of Windows for me was gaming. You couldn’t pry me away from a great pc game 20 years ago. Even just a couple of years back I was still hooked on World of Warcraft. As far back as I can remember Microsoft Windows has been the premier operating system for games. At the end of 2008 my desire for game emersion waned. It was past time I respect a much deeper calling, the call of the builder.

A small tech company’s soul gets purchased

Sure, I’d built plenty of utilities at work in over a dozen years, but my day job has never been about optimal value creation by tool building. There’s also a very strong heirarchy. Some of the divergent issues between my ideal corporate culture and the company I work with:

• My opinion has never held the weight of my tech directors, or upper management. I understand the reasoning for initial hires, as it takes years to develop an understanding of the problem space of even a single major project. But flat organizations empower each individual to contribute more.
• I have never owned what I have crafted (this is just bad). That’s not true, I used to own a tiny part of what I created through employee stock ownership, but that has been long gone with our acquisition
• Even worse, there was little evidence of repeat usage or wide acceptance for the tools I worked hard to bring to life.

We’re still heavily Windows centric at my day job where I contribute part time. My hours there fuel the work I do at night and on days off as a liberated builder. Windows lock in is a BigCo “group think” choice that cares little about one engineer’s perspective of the future, and I accept that my leadership style doesn’t fit well into that mold. The huge corporate structure demands conformance to minimize costs.

I wouldn’t imagine blaming my company, different responsibilities demand different priorities. Rapid analysis and proof of concept for advanced algorithms and simulations was and still is our driving focus. We had some fun times improvising before being acquired. The act of acquisition by another organization takes a massive toll on the spirit of the purchased business. But even a tiny divergence over the years between my own compass and the needs of my company lead me to a place far from where I want to be. So I took a few months off to find myself at the end of 2008, and what I discovered changed everything.

There are an unlimited number of places with a Zero Gap between the needs of a user, and a developer

This line requires repeating:

There are an unlimited number of places with a Zero Gap between the needs of a user, and a developer.

I found a Social Internet rich with information, just begging for a hungry dataminer to help make new connections. More than that, I muttled my way into an amazing platform to share my ideas. My conscious has been over burdened wlth thought riffs, and wild ideas without a creative outlet. Special thanks to Seth Godin with my time crafting lenses for Squidoo, then Typepad for my first blog, and finally Matt Mullenweg and crew for giving me WordPress, free of charge. As long as I have breath, Victus Spiritus will fly free with my thoughts. My inspiration and salvation is in sharing.

There they go! But at least they’re happy.

(pardon a little geek rage but I find nothing more frustrating then when company’s make boneheaded business decisions)

A Mock Business Strategy Meeting Between Apple and AT&T

Apple: “Hey we’ve got an ultra dedicated fanbase that does our marketing because they love our technology and products so much.”

AT&T: “We’re a big telecommunications company that has wireless internet.”

Apple: “So what?”

AT&T: “We’ll cut you in for some of the money if you lock us in as the sole provider of wireless Internet access.”

Apple: “We have this App Store concept where we’re the sole provider of approval for software so that philosophy sounds great.”

AT&T: “It’s a win win!”

Users: “WTF! Where do our needs fit in?”

What we as customers end up with is a terrible choice.

We can buy the best hardware, but only if we

1. lock in with Apple’s OS
2. accept App Store censoring software
3. lock in with AT&T as the only method of phone and wireless networking.

As a fan of the hardware, and the software that doesn’t restrict my decisions or choices, I picked up the original iPhone and recently the 3Gs. Now I’m actively looking for another way to get my phone/wireless support. The smart phone is in all regards a personal, and ultra portable computer. It has an attached camera, speaker and microphone. It’s important to me as a consumer, to have choices in my service, independent of the computer hardware I choose. The good news I think I found a method that will work for me towards the end of the post (but T-Mobile service is spotty in my area…).

A Step in the Right Direction

The Pwnage tool is a step in the right direction (here’s their latest post). But how many users will actively find and install a method to unlock/hack their phones in order to have a choice of providers?

This is a Video of a Linux Install On iPhone Late in 2008. I look forward to more progress in this area as purchased hardware can be “reclaimed” by it’s owners.

There is some competition coming to the smart phone market inthe form of the HTC Hero. A short review article compares the iPhone to the HTC, but the iPhone 3Gs still has an edge on processing power (although no multitasking support with the OS), and the video camera option.

Related Articles:

• JavaScript speed test: iPhone 3G S whips Palm Pre and Google G1
• Anandtech Analysis

Latest Update:

TechCrunch fills us in on the FCC’s interest on the AT&T, Apple and Google situation

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• Even Google Is Blocked With Apps for iPhone (nytimes.com)
• Apple, the App Store just isn’t you (macworld.com)
• Fed Up, A Popular Mac Developer Quits The iPhone (techcrunch.com)
• I Quit The iPhone (techcrunch.com)

It’s ironic that one of the stated rationales for Amazon purchasing Zappos was for their corporate culture. Such a purchase will ultimately result in the end of Zappos’ independent identity and with it any resemblance to the culture it once had. The real reason I suspect Amazon purchased Zappos is to cheaply remove a future competitor. Yeah, I just said $900,000,000 was cheap. To own internet sales in the US a little longer, it’s probably worth a lot more to Amazon.

I have little doubt that Zappos would have continued to grow in strength and become a real force within the internet sales business. They had something unique and wonderful going on, and unfortunately I can’t imagine how that can survive when your only shareholder is the 800lb gorilla of internet sales, Amazon. I’d really like to be proven wrong on this hypothesis.

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• Amazon Acquires Online Shoe Retailer Zappos.com (thenextweb.com)
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• When you buy Zappos, what do you buy? (sethgodin.typepad.com)

How Important is Culture to a Company?

The culture of a company is the quintessential representation of it’s style.  An organization’s body and life blood is it’s most important asset, it’s people.  Any group’s culture can be characterized by a selection of the following traits they share:

• inherent rules of engagement
• accepted priorities and methods of interacting both internally and externally
• founding and binding principles of the corporation
• socially defined
• language
• dress and clothing style

Without a well developed corporate culture a business is little more than a managed group of mercenaries.  Without culture, a business is likely to blend into the background and fail to stand out to potential customers, collaborative business partners, and to potential leaders/employees.  It is clear that having a legendary (or at least reputable) corporate culture is extremely beneficial to any organization.

Corporate Culture Cannot be Synthesized by Systems

What many larger companies experience is an eradication of the socially defined aspect of corporate culture.  In an attempt to redefine a fading corporate culture new systems are branded and described to management throughout a large team.  The fault of the majority of these strategies lies not in their implementation, but in their lack of foresight. These systematic solutions fail to consider the most important aspect of corporate culture. At its core corporate culture is a socially shared style. The culture is propagated by members from all levels within the business structure, who temporarily act as culture leaders to newer members. The problem is not simply quantitative, it is based upon and communicated by  immeasurable qualities.

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• The Best Way to Change a Corporate Culture (blogs.harvardbusiness.org)