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31 High-Impact Entrepreneurs from 15 Countries Join the Endeavor Network at the 54th Selection Panel in New York City

New York, NY – August 14th – Endeavor selected 31 high-impact entrepreneurs leading 21 companies in 15 countries at its 54th International Selection Panel. Endeavor now supports 948 High-Impact Entrepreneurs from 606 companies across 20 […]

August 14th, 2014 — by admin

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Endeavor Global Board Member Arif Naqvi Honored by Peace Organization

Arif Naqvi, Endeavor Global Board Member and Founder of The Abraaj Group, a leading private equity firm that invests in growth markets throughout Asia, Middle East, Africa, Turkey, Central Asia, and Latin America, was named […]

April 24th, 2013 — by admin

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Five entrepreneurial tips from Michael Feuer, co-founder of OfficeMax

This article, “The Not-So-Secret Secrets To Making It Big: Five Surprisingly Doable Steps That Will Propel You To The Top,” is re-printed from youngupstarts.com. These insightful tips on effective leadership are provided by entrepreneur Michael Feuer, author of The Benevolent Dictator. He cofounded OfficeMax in 1988 starting with one store and $20,000 of his own money, a partner, and a small group of investors. As CEO, he grew it to more than 1,000 stores worldwide with annual sales topping $5 billion. He is also CEO of Max-Ventures, a venture capital and retail consulting firm, and cofounder and CEO of Max-Wellness, a comprehensive health and wellness retail chain that launched in 2010.

Have you ever said to yourself, How in the world did [insert name of powerful business executive] get to where he is? He’s not any smarter than I am! Well, chances are you’re right. That executive who made it big probably doesn’t have more powerful brain cells than you…but what he (or she!) probably does have are three non-glamorous but crucial qualities: focus, discipline, and follow-up.

These three qualities might not sound extraordinary, but they can truly set you apart. The truth is, there isn’t a simple magic bullet that will propel you straight to the top. Success in any endeavor, especially business, really comes down to specific character traits and habits. If you have those qualities, you’ll excel. And if you don’t, you probably won’t.

Before you ever craft a sales strategy or walk into a client meeting, whether or not you have a chance of success has already been decided by how you think about your work, what you have to do, and how you do it. Outcomes are shaped by your focus, discipline, and commitment to follow-up… or lack thereof. It’s important to remember that achievements are often less dependent on your technical know-how and more dependent on how you organize and think.

Read on to learn what these three qualities look like in practice, and how you can make them work for you:
Take good notes.

Taking notes in business is just as important as it was in your advanced economics class in college. Your brain isn’t always as powerful as you think it is, and having a written record of your boss’s project analysis or your colleague’s sales strategy can save you from having “oh darn” moments, and can set you apart from the pack and put you on a straighter path to success.

I’ll frequently dictate the notes from a meeting the second I walk out, or appoint someone to act as a scribe beforehand. I keep all of my past notes in a folder on my computer, and I also always make sure to jot down next steps. These habits ensure that nothing falls off the radar unintentionally, and that I always have a good idea of what needs to happen next. Oh — and I often shock new team members by writing the letters ‘FU’ and a date at the bottom of my notes. New people are always relieved when they learn that those letters aren’t a pejorative, but a shorthand I use as a reminder to ‘Follow Up’ by a specific date!

Do what you say you will, period.

In today’s dog-eat-dog environment, a person’s word isn’t always his or her bond. And that’s a shame. When you fail to follow through on promises and commitments, you imply that you lack discipline and — perhaps — shouldn’t be trusted with more important tasks and objectives. However, if you cultivate a reputation for being completely reliable, you’ll enjoy more responsibility and success as well as better business relationships.

I routinely tell my employees that I’m not their father and won’t babysit them, and that if they tell me they’re going to do something, they’d better make good on that assurance. I can’t afford to have people on the team who are undependable. However, I do provide alternatives by giving everyone three acceptable ‘outs’: They can tell me that they can’t finish on time, that they don’t want to do it my way because they have a better idea, or that they think their assignment isn’t worth the effort and can convince me why.

Give homework assignments.

A leader’s job is to make people think and discover alternatives. It’s a great way to determine who on your team you can rely on and who is capable of taking a project to the next level. You can afford to invest in developing someone who is interested in developing.

When I give assignments, I keep a running tally of what happened or changed from previous sessions on the same topic or project. No matter if you’re on the giving or receiving end of homework, remember that the way these assignments are handled is a great way to gauge attitude, commitment, potential, reliability, and whether or not someone is a player.

Scrap your iron-clad five-year plan.

Being able to work with focus and discipline is generally a good thing…unless you’re focusing on things that won’t help you or propel you forward! To help prevent this, Feuer recommends developing a short-term plan with a six- to nine-month outlook. This plan will help you get through the year. He also recommends creating a longer-term plan with a seventeen- to eighteen-month strategy. It will encompass the goals and benchmarks you need to achieve during this time period. Why have two plans instead of one? Well, the world is simply evolving too fast to rely on a one-size-fits-all five-year plan.

I’ve found that many organizations spend too much time thinking about what’s going to happen way down the road when all they’re doing is guessing. And when their predictions turn out to be inaccurate, they find out too late that they’ve been focusing their efforts on the wrong things. You must always be ready to modify your plans when necessary, change quickly, and deal with the unexpected. That’s what will make the difference between a company that might get by and one that is good or even great.

Use a rifle, not a shotgun.

When you fire a shotgun, your shot hits a wider area, but it lacks focused precision. In business, a shotgun approach gets the job done… but usually doesn’t yield outstanding results. Sure, you’ll hit something with a shotgun, but the price in doing so seldom provides the big payback. Yes, a rifle or laser-sharp approach will take more planning and forethought, but in the end you’ll probably save time and resources. It pays to identify exactly what needs to be done and then focus relentlessly on accomplishing those objectives.

Trying to cover a wider area and hoping that something resonates is inviting your efforts to fall short of the mark or even backfire. A laser-sharp strategy is much more practical, productive, and economical. So make sure that you’re ready, and that you aim well before you fire!”

When you take the time to focus, have discipline, and require follow-up, whether you’re a business owner, a manager, or an employee moving up the ladder, you’re creating a road map that documents what has to be accomplished and by when. Few things ever fall through the cracks when you follow this process. It is the most direct way I know to set yourself up for success!

Want to be an effective entrepreneur? Better have these relationship skills

This article was reprinted from youturn.com, a resource for intern candidates and young professionals running an entrepreneurial driven company or change-oriented non-profit. Author Martin Zwilling is CEO & Founder of Startup Professionals, Inc.

Starting and building a company is all about leadership – formulating an idea, building a unique plan based on vision and experience, and forging a path over and through all obstacles.

Yet the image of leadership in business is at an all-time low, according to national leadership experts, considering the political debacles, record business bankruptcies, and executive fraud cases.

If the country is to recover financially and politically, new leaders will have to emerge to fill the leadership deficit – new leaders who understand that leadership is a privilege, not an entitlement, according to executive coach Michael Schutzler, author of the book “Inspiring Excellence – A Path to Exceptional Leadership.”

Entrepreneurs are well positioned to become the new leaders, because they perceive problems as opportunities, and have the mental mindset to innovate and execute. They have the required passion, perseverance, and work ethic. What they don’t have by default are the skills required, or the relationships. These don’t come automatically with the CEO title.

Schutzler’s view of leadership is different than many academics and executive coaches, who feel that leadership is an innate character trait. He urges people to focus on developing a few key relationship skills, and I agree. Here are some key conclusions:

Leadership is a learned behavior, not a character trait. Good judgment, for example, is certainly a hallmark of exceptional leadership, but it isn’t something you are born with. “More than anything, good judgment comes from listening,” he says. It also comes from paying very close attention to every situation, and learning from it.

Listening is the most important skill for a leader. We need to pay attention to the words and actions of others while suspending judgment long enough to allow your intellect to catch up with your instincts. Why? Because as leaders, if we speak too soon, we shut off creation. We shut off contribution. We force the adoption of our ideas.

Communicating and storytelling. This is not a skill everyone is born with, but it’s a skill we can all develop. People on your team want to believe! They want to believe you know where we are going, or you will get us there even if you aren’t sure of the exact path at this moment. They want stories that compare what they are doing with others.

Acknowledging contribution. This is necessary to sustain motivation during the hard times. It’s not hard to do and doesn’t require a lot of effort or expensive gifts. A thank-you note or peer recognition is enough most of the time.

Negotiation is a practical skill for every leader. Negotiation is often misunderstood to be the domain of clever deal makers. It’s actually really simple. Make very clear requests for a promise. Understand exactly what the promise is – what is being done, when, and what the standard of excellence is, and then check up on the status to make it happen.

Too many leaders are focused on personal ambition. He believes that we need leaders who use power as a tool for inspiring others to create a better future, not as a tool for retaining their position or perks.

The middle four points are the essential skills for great leadership, inspiring excellence, and building a successful business. They are easily practiced, and serve as the foundation for successfully attracting talent, reaching consensus, making tough choices, and harnessing ambition.

In this fashion the general leadership deficit is really an “opportunity” for new aspiring entrepreneurs in business. So practice the leadership skills needed, and step in when you are ready. Now is your golden opportunity – let’s see how many of you are up to the challenge. We need you all.

TechCentral: Endeavor Entrepreneurs bring “big business software to the phone”

The following profile of Endeavor Entrepreneur Wilter du Toit is reprinted with permission from TechCentral (original article here). Wilter co-founded Virtual Mobile Technologies, a mobile enterprise application platform, with his brother Arno du Toit.

Virtual Mobile Technologies (VMT), a local technology company backed by empowerment group Mvelaphanda, has developed products for mobile devices that integrate seamlessly with enterprise software systems like SAP used by big business. But unlike most such applications, VMT says its solutions work on even old feature phones.

And the company is hoping to take the technology to emerging markets worldwide.

VMT says its solution will work on old, monochromatic, three-line-LCD-based cellphones, right up to the latest and greatest smartphones. This, it believes, gives it a big advantage in emerging markets over its rivals.

The company, founded in 2005 by brothers Arno and Wilter du Toit, wants to extend companies’ enterprise resource planning, enterprise relationship management, banking, inventory management and similar systems onto mobile devices.

Aside from offering platform-specific applications for high-end mobile devices such as smartphones and tablets, VMT also creates products that make use of a cellphone technology known as USSD, or “unstructured supplementary service data”, so even older devices can be used.

“Companies don’t have to choose which platform to use,” says Arno du Toit. “When something like Windows Phone 7 comes out, we ensure our products support it, so our solutions remain relevant. Our clients can continue reaching all devices without having to have a development team. It’s also a de-risking in terms of decision making: if a company decides to change devices there are no compatibility problems.”

Wilter du Toit says that this sort of flexibility is essential because the respective market share of the various mobile operating systems shifts all the time. His brother says VMT can adapt to the market as it changes while “managing security, versioning and enterprise integration”.

“Any enterprise service you’re running can now be extended to mobile,” says Wilter. “It’s difficult for companies, even internally, to dictate what devices employees can use.”

The company’s clients include Elizabeth Arden, Imbongi Capital, Zambian mobile banking services company MTZL, Salesforce.com and a handful of Indonesian partners offering VMT’s services in the region.

Wilter du Toit says the company’s support of cheaper and older phones is crucial to its strategy of expansion in emerging markets. “Those are the markets in which we’re most interested,” he says. “Our Indonesian presence is growing, and from there we want to move into other emerging markets.”

Arno du Toit says a number of companies focus on smartphone and tablet applications, and cover the shortfall by means of mobile Web solutions. He says many companies are unaware that they can also reach midrange devices with secure mobile applications.

“Our products can push payslips, leave requests, and other things that help mobilise HR departments,” says Arno du Toit. “We can assist mobile sales forces, streamline mobile workflows and task management, provide mobile access to customer relationship management and enterprise resource planning systems, and provide additional enterprise solutions based on an individual client.”

Wilter says many companies spend large amounts of money on enterprise software systems but don’t always see a return on their investment. “Mobility increases that return by allowing customers and clients to access it and by allowing staff to access information remotely that they would otherwise have to come into an office to get.”

In order to develop its products, VMT has created its own “mobile enterprise application platform” called Ramp. Ramp’s security is endorsed by the US federal technology agency, the National Institute of Standards and Technology, and developers interested in it can download it here.

“We’d like to be the mobile solutions standard for enterprises in emerging markets,” says Wilter du Toit. “This is a market with great potential and one that needs high-quality, secure mobile services.” — Craig Wilson, TechCentral

Endeavor firm Socialmetrix launches online TV series

Endeavor Entrepreneur Juan Damia can now add another position to his resume: talk show host. Damia and fellow Endeavor Entrepreneurs Gustavo Arjones and Martin Enriquez are cofounders of Argentinian firm Socialmetrix. The recently launched a monthly talk show style TV show called Socialmetrix TV, which will explore social media success stories, failures, and general industry issues.

Socialmetrix is an online platform that turns comments, tweets, and Internet chatter into a source of valuable marketing information. The firm’s proprietary technology can tell companies what is being said about them and their products. Socialmetrix has received much local and international attention, most recently garnering British media firm A&N Media’s first investment in Latin America.

In the first installment of Socialmetrix TV, below, the leaders of Movistar Argentina’s Social Media team discuss their experiences creating and running one of the most successful social media projects. Episodes are recorded in Spanish, have English and Portuguese subtitles. (Once the video starts playing, click on the CC button on the bottom right of the player to activate subtitles).

The company recently released its second episode with Florencia Pini of the Starcom MediaVest Group (also below).

For emerging market businesses, don’t just copy Silicon Valley — localize

This article, “Why Silicon Valley Can be Bad for Emerging Market Startups,” is reprinted from Memeburn.com, a site on web insights and analysis. The author, Keet Van Zyl, co-founded PoweredbyVC with the goal of building the VC industry in South Africa.

Launching a startup anywhere in the world is challenging, but launching one in an emerging market territory where there is often limited access to funding and a fragmented entrepreneurial ecosystem it is so much harder. One sure way to fail is to try and duplicate first world solutions for emerging market problems without tweaking them for the unique local conditions.

The Silicon Valley story is inspirational.

Its ability to launch globally competitive, world-changing internet startups is unsurpassed. It continues to be the leading hub for high-tech innovation and development and accounts for one-third of all of the venture capital investment in the United States. And yes – world-changing startups can launch from emerging markets as we are well aware of the much-publicised handful of success stories in our own countries.

The difference is that instead of building and supporting startups, we often measure emerging market startup success by their ability to sell technologies to Silicon Valley headquartered companies. In the last 10 years, more and more money has been flowing from Silicon Valley to the emerging world.

Building sustainable local businesses

There’s clearly good news and bad news for emerging market entrepreneurs in this new world order. In the one corner is the think-global-act-local view that gives an emerging market startup the incredible opportunity of forming an international strategic partnership to accelerate growth. In the opposite corner is the entrepreneurial outlook of building a long-term sustainable multinational business that is locally owned. It is sometimes difficult to pursue both these strategies simultaneously from an emerging market perspective.

In my experience analysing early-stage businesses, too often entrepreneurs only present a five-year business model as Plan B, in case the 18-month Plan A (selling their intellectual property to Google) fails. Building a world leading business that can make a sustainable impact on innovation, job creation and growth in the region is sometimes notably missing in the strategic thinking. The irony is that the best way to unlock value in the IP is to drive the vision and build a high-growth business around it. Traction is never a bad thing. And if someone wants to make you a staggering offer for the business 18 months down the track then so be it, but better yet: reject the offer and continue along the path of building a global business with headquarters on local soil.

Efficiency- vs. Innovation-driven Entrepreneurs

The latest Global Entrepreneurship Monitor (GEM) report highlights that emerging market economies are dominated by efficiency-driven entrepreneurs, where further development is accompanied by industrialisation, capital-intensive organizations and an increased reliance on economies of scale. These businesses are not easily fundable through traditional venture capital. But it does not mean they don’t try and access it…

Somewhere in the entrepreneurial subconscious the Silicon Valley myth is ingrained that if you are starting a new venture, you are per definition a startup, and therefore need to approach a venture capitalist. Often these entrepreneurs actually don’t know whether they even need the funding, or what it is needed for. Traditional VC tools, techniques and funding mechanisms are only geared for high-growth innovation-driven ventures.

As entrepreneurial activity advances into the innovation-driven phase, businesses are more knowledge intensive with expanding services that are scalable. The entrepreneurial landscape in the US, Western Europe and some Asian Pacific countries fall in this economic category, where the environment for launching a high-growth startup is clearly more favourable.

Retweetable tweets

There is a view among certain emerging market entrepreneurs that raising VC funding in Silicon Valley is all about having a good idea and a polished elevator pitch. It also helps to be a college dropout and if there is an empty garage somewhere that you can use as office space you are just about there. Once seed funding is raised, follow-on funding rounds are guaranteed and the VCs are lining up to introduce you to their networks to help you succeed. Movies like The Social Network do little to dispel this myth, but as with most things in life, the great stories get told (and only the good parts) while the less exciting stuff fall through the cracks. “Startup almost break even after 5yrs of bootstrapping and hard work while founders will earn market-related salaries soon” just does not make for a retweetable tweet.

Competitive advantage

Emerging markets need to focus on their own distinctive competencies to exploit the unique strengths of related-industry startup clusters and assist these ventures to achieve a competitive advantage. In short, focus on niches. If emerging markets want to be globally relevant in the startup world they need to create an environment where large sustainable businesses can be built up to create economic benefit to all stakeholders. Silicon Valley success stories should be used as inspiration, but emerging market entrepreneurs need to appreciate that reality is embedded in hard work behind a vision of building sustainable long-term businesses. A vision supported in Silicon Valley by a multifaceted network of interconnected stakeholders in the high-tech value chain. And this does not exist in emerging markets on that scale (yet).

eMBA Field Report: The emerging giant in Santiago

Chris Zefferys is an MBA student at the Thunderbird School of Management and is spending his summer as an eMBA working with Kibernum in Santiago, Chile.

I love the energy, passion and drive that developing markets such as Chile possess. In Chile, I’ve had the opportunity to work with Kibernum, which is an emerging giant. The company is a leading IT services provider that will celebrate its 20th anniversary this year. Endeavor Entrepreneur Mario Araya, Kibernum’s founder and CEO, is making the right steps to build a foundation for the transition to a domestic powerhouse and a global player.

As the emerging giant awakens, there’s a ton of work to be done and that’s truly the exciting part. I am working with the marketing team on corporate as well as global strategy. In a developing market the institutional voids that companies confront are all the more real. Those voids include capital, talent and product. Access to market research, for example, has proven challenging. What is required is an entrepreneurial spirit to seek out what is needed and piece together the story. Through the process I have met and listened to a variety of people and have gained a deeper appreciation for what my entrepreneur has accomplished.

Endeavor has definitely made an impact on Kibernum having provided eMBA interns over the last couple of years. The Endeavor Santiago team has been outstanding. Florence Martin and the entire group have made my experience incredible to say the least.

In closing, Santiago offers a bit of magic every day if you’re tuned in. Examples include a group of clowns walking down the street at night, a big, stray German Shepherd gleefully lounging in a cardboard box that was clearly too small for him, a band of young people banging pots and pans surprisingly in harmony, and waking up every morning to a view of the majestic Andes. As one great author said, “if you’re tired of London, you’re tired of life.” The same is true of Santiago and the surrounding beauty that Chile presents.

eMBA Field Report: Istanbul, East Meets West

Ashay Shah is an MBA student at INSEAD and is spending his summer as an eMBA working with Pozitron in Istanbul, Turkey.

I just completed two weeks at Pozitron, a mobile software company in Turkey. The INSEAD summer break only begins in the first week of July, so we have a bit of a late start compared to the US schools. Landed here smack in the middle of the hottest week of the summer, but the beautiful Bosphorus and the veritable buzz of this city makes you forget all about the heat.

The Endeavor Entrepreneurs, Fatih and Firat Isbecer, have been incredibly helpful and their generosity and attention towards all the company’s employees have clearly been a crucial factor in Pozitron’s successful journey so far. In many ways, my project here (to help find strategic and financial partnerships) has become much easier because of the company’s reputation!

Meanwhile, one of the most enlightening experiences for me has been learning about the Turks and their culture. Istanbul is geographically where the East meets the West, but what is more interesting is that it is culturally so as well. Doing business here requires a keen sense of local manners. And much the same as in India, every meeting here entails sipping 1-2 cups of tea or coffee (as it would be impolite to refuse), which means you are quite wired by the time you are done in the evening!

Overall, my experience so far has certainly exceeded (already high) expectations, and I hope it continues to do so. Skimming through other eMBA blog entries, clearly this is not a unique feeling.

Scott McNealy (Co-Founder, Sun Microsystems; Founder, Curriki.org) offers entrepreneurial tips [Video and transcript]

At last month’s Endeavor Entrepreneur Summit in San Francisco, Scott McNealy, Co-Founder and former CEO of Sun Microsystems shared his entrepreneurial wisdom in the welcome keynote. In addition to telling the story of the company’s beginning and reflecting on lessons learned since, he also talked about his newest venture, a non-profit called Curriki.org. Curriki is the leading K-12 global online community for teachers, students and parents to create, share, and find open learning resources that improve teacher effectiveness and student outcomes. The site, which is summarized in this PowerPoint and PDF, is also highlighted in two case studies (case 1 / case 2).

You can watch McNealy’s speech or read the transcript below:

Summit Keynote:

TRANSCRIPT

Sun Microsystems’ Beginnings

I asked everyone at Endeavor what everybody wants to hear, and everyone said how we got started. I’m not sure that’s a terribly great story. It was four 27 year olds back in the olden days. We got to follow in the footsteps of Steve Jobs who was the first inexperienced, semi-ignorant, young, non-credentialed CEO to go found a company and really lay the groundwork. So when there were four 27 year olds who in 1982 went to get VC money, nobody batted an eye, even though I had three years business experience which was more than the other three founders combined. And we raised $4.5 million the first year. We started on February 24, we were profitable in May, we did $8.5 million in our first year, $39 million the second, $115 million the third, $250 million the next year, then it went to $510 million, and then $1 billion dollars, so that was kind of our growth ramp—I might have a couple dollars off.

Now how did it all happen? It was a Stanford and Berkeley University startup. Andy Bechtolsheim had invented the Stanford University Network Workstation under a grant while a PhD student at Stanford, and so it was the SUN network, so that’s how we got our name, on the Stanford University Workstation. And Andy was looking to get people to build his computer, his desktop workstation, but they weren’t really doing a good job; he was licensing it out to different people. And Vinod Khosla, my classmate from Stanford Business School, who I got to know mainly because he always seemed to be the last guy at every business school party–he found Andy and said to me, quit your job, let’s go start this company. And then we went to Berkeley and found the top software engineer for Unix from Berkeley named Bill Joy and the four of us started this. It was a nice combination of hardware, and software, and business school, somebody who had done it before and somebody who was inexperienced when we got started (that’s a joke). And the good thing about it is we didn’t know any better. Ignorance is bliss. That’s an important thing to remember. If you actually knew how hard it is you probably wouldn’t do it, so don’t worry about that.

Have a Controversial Strategy

I’d like to give you some suggestions, some quick ideas and thoughts to think about. Linda Rottenberg [Endeavor Co-founder and CEO] touched on the one I think is the most important and that’s the crazy thing. I’ve said for many, many years, you have to have a controversial strategy. It must be controversial. In fact, the more controversial, the better chance you have of making a lot of money. If everybody thinks what you’re doing is the right thing to do, everybody’s going to do it. Everybody does it, there’s no differentiation. If there’s no differentiation, there’s no pricing power. No pricing power, you’re not going to get a profit. No profit and you’re not going to be able to hire anybody, and you’re not going to make any money. It’s like walking into an interview and they say, “Why should we hire you?” And you say, “I breathe.” Fogging a mirror is not going to differentiate you at all.

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The real hard part about a controversial strategy is that it’s actually pretty easy to come up with a controversial strategy, but it has to be correct. Because a controversial strategy that is wrong, is just plain stupid! So, I can’t help you with that one, but don’t be alarmed if it’s controversial.

And our controversial strategy was to share. We used open interfaces, open technologies, open components, and really were able to, as we called it, build a Ferrari out of spare parts. It got us to market quickly, we had the whole world doing R&D for and with us…and against us, but it was a better strategy than trying to beat IBM, with their own mainframe technology which wasn’t possible.

Be Quotable, Be Memorable

The next point I would share with you besides being controversial is you’ve got to pick one of two strategies, and my suggestion is to be quotable. And to be loud and noisy and pick a fight. We always tried to pick a fight with the number one and number two company and say we were number three. And then we would make lots of noise.

And we used the media. And I would explain to the media, “Hey, I’m going to give you lots of good quotes; treat me right and I’ll bring you more.” And we had a little deal. And I said just make sure we’re on the front page, spell our names correctly, and I’ll give you lots of outrageous quotes. Because we couldn’t afford advertising. So people think I don’t like Bill Gates, but it was theater, really, truly. [Microsoft CEO Steve] Ballmer and I went to school together, as did Gates and I. It was all theater, and you know quotes are how you get remembered and why I’m up here today.

People remember me for a quote a long time ago: “the network is the computer.” By the way, people are still figuring that out. I would encourage you to think about that because that should be part of your new entrepreneurial strategy. They call it “cloud” computing. Why didn’t I think of cloud in the 1980s? But, that is a big one.

Another one that is all the rage is a statement I made quite a while ago, which is: “You have no privacy; get over it.” And my Chief Privacy Officer just went crazy on me, because she thought it was the worst thing I could possibly say, but it’s obviously true. You have no privacy.

And interestingly enough, most of the new startups here in the Valley are all about invading your privacy. Figuring out how to profile you even more precisely than even you know. So using the cloud to invade your privacy tends to be the number one venture startup, other than using Obama’s stimulus money to do something green, which tends to be the other way people get things started.

Use Other People’s Money

If you’re going to go start a company and it’s your first one and your net worth isn’t really terribly high, my suggestion is use somebody else’s money. There’s a bunch of folks who are going to get up on this stage; use theirs. Practice starting up companies on somebody else’s money. Once you get good at it and you’ve won a couple of times and you have your own money, then you might want to use your own. But there’s no reason not to use someone else’s money. I know it’s harder in other geographies, but you know what? The VCs from the US are starting to go out in other places because there are some more friendly economic environments than the US to invest money. And as your economies develop and people are saving a bit more money, there will be a better opportunity. And it doesn’t necessarily hurt to give away some of your company now to get that capital in, because money does help you fight that battle.

Your Business Plan is Never Static

Another piece of advice is everybody has a mission. If you’ve gone to business school, you learn gotta have a mission, gotta have a vision, gotta have strategies, gotta have objectives, and tactics. And you write this all up and it’s called a business plan. And that’s a necessary component of what you’re doing. Now the problem is, you shouldn’t do it in hardcopy; you should do it online because it’s going to change. And I tell everybody who comes into any startup that I’m involved in, things are going to change above, below, and around you faster than any other place you’ve ever been. And be prepared for that, and to accept change. You know, I don’t think that Apple knew that word processing was going to be their number one market, I don’t think IBM realized that Lotus 123 would be the reason people bought their computer at the start, I don’t think that eBay knew that Beanie Babies was going to be the thing that happened, and I don’t think that Google got started knowing that Page Rank search, selling words to the highest bidder every day was going to be their business model. So you gotta be prepared to get lucky, to be opportunistic, and have that plan.

The Importance of “Why?”

But once you get rolling, and you settle in on what you’re going to be doing and as you’re growing, hopefully you’ll get to the point where you need to think a little about having a cause. And we didn’t really. We weren’t very explicit about our cause at Sun Microsystems for quite a while although everybody sort of knew what it was, and that was we wanted to get everyone connected to the network while doing no harm to the planet. So, that was our cause and we actually articulated it in kind of the second half of our existence. But a lot of people liked that; it was sharing, getting people connected, and being much more eco in terms of the amount of energy we used to go deliver our computing power.

So very powerful in the sense that that made a lot of people want to buy from us, sell to us, work with us, and work for us, and stay with us. People have basic needs—food, shelter, water, all those sorts of things—but they also have a higher-order bit. Some psychic income as I call it, and there’s nothing wrong with stating what that higher order cause is for your organization.

I kind of cornered Linda Rottenberg in the speakers’ room, and I said, “Why do you do this?” I didn’t want to know what she was doing, I said, “Why are you doing this?”Cause I wanted to know what here cause was, what her reason was. And she had a very powerful one. She said she wanted to share the ideas of entrepreneurship—which have been so strong here in the US—with all these other countries and cultures around the world. So she has a very strong cause. And you can see that in the passion and the energy she has in leading this organization. You need to have the same passion and energy wrapped around a cause that Linda has for Endeavor, or people won’t want to follow you, people won’t want to affiliate with you.

Picking the Right Board of Directors

The next thing I would share with you is if you’re going to use somebody else’s money, you’re going to have to have a board of directors, because they’re going to want to have oversight, they’re going to want to have governance. And you will hate that word “governance.” It’s like the worst babysitter you had growing up. So, you have an opportunity most of the time, you know the big money folks are going to put their own people in there, but when you have a chance to put somebody on your board of directors, choose wisely. Companies do fail because of weak boards. And almost always, a weak board is a contributor to the failure of a company.

So, do not underestimate how important it is to have somebody who has hopefully been there. And that means they have been in the piñata. And if you’re the CEO, you understand you’re in a piñata. You can’t see anything and people from random directions are taking 2x4s and hitting you, and as soon as you protect yourself from that flank, somebody’s hitting you from another blind side. And life in the piñata means you need people on the board who understand that, who have been there, and when you stumble they don’t walk in and say you, “Bozo, what is wrong with you?” Because anybody who’s been a CEO has made a ton of mistakes, way more mistakes than anybody else. You know what the problem is with being a CEO? They solve the easy problems down below, and they only bring you the unsolvable problems. That’s the worst part about being a CEO’ you never get to fix anything because they only bring you the unfixables. Do you want to lose your left arm or your right leg? By the time it gets to you, those are the choices you have.

I can remember many times going home to my wife Susan and saying, I didn’t do anything good today. And that’s the way you feel. You need a board who understands that, who can support you, who helps attenuate rather than amplify the bad news, and lets you enjoy the good news. Because you know what, you don’t have any peers in your company and really the board is as close as you’re going to get. And if they haven’t been in the saddle, if they’ve just been a VC their whole life, for instance, or if they’re a banker, or if they’re a politician or a lawyer, or some other thing, they don’t know. It’s a different job. I remember getting a job was a big change, and then I remember becoming a manager was a big change, and then becoming a second-level manager where I managed managers was a big change, and then I became CEO. And that was like going light-speed, you know that was a Star Wars moment where you went *poof* and the whole world just changed. And so try to build a board that has former CEOs on it. Not current. Current CEOs are too busy [ducking blows] so you want to try and get some former CEOs.

Make/Buy and Share/Protect Decisions

Some of the biggest decisions you will make when you get started are make/buy and share/protect. And make/buy I think everybody understands: What do I make versus what do I buy? And that’s a huge question. That is the most strategic decision you will make. And everybody wants to know, what should I make versus what should I buy?

Well it’s very simple. If you know who your customer base is bring ‘em in and listen to the questions they ask. And that will tell you who you need to hire. You need to hire people who can answer the questions they ask. If they come in and say, you know, what do you put in your hamburgers, then you’re probably a restaurant and you ought to hire a chef. But if they don’t ask that question, you probably ought to outsource the lunch room and buy your burgers. I’m trying to give you a simple answer, but it’s very very simple. If you talk to your customers, listen to the questions they ask, that will be the clues as to who you need to hire. Everybody else, you ought to outsource. As much of the rest of it as you can. Why? Because your business is going to change above, below, and around you, and your direction is going to change so fast it’ll to make your head spin. The worst thing we ever did at Sun was sign leases longer than two years. We could have saved Sun billions of dollars if we had always bought on the spot market for facilities. So buy on the spot market wherever you can. Going long, you’ll guess wrong—hey, that’s good. Going long, you’re going to guess wrong. I’m a poet.

And the other decision you have to make strategically, is what do you share versus what do you protect from an intellectual property perspective. We had a different strategy, Steve’s [Jobs] was more successful. But Steve didn’t go out and be quotable, Steve Jobs understands the power of the secret. And that’s another way to go, but I don’t recommend that because none of you are big enough to be a secret. Apple can afford the power of a secret. And it’s very, very powerful. Apple’s also big and strong enough that they can afford the power of proprietary technology. So any of you who use Apple stuff, will know it doesn’t work with anything else. It’s very closed: you have to buy an iPod, you have to buy an iPad, and iTouch, you have to buy the Mac, and then you have to use MobileMe. You’re stuck. He’s the new Microsoft…just with better graphics. Just as many bugs, just as much administration, but it looks prettier.

So Steve has chosen to not share anything and go proprietary. You might not be able to do that. You might need more community support, more people helping to innovate and integrate to whatever technologies you have. But that’s a big strategic decision. Sun made the decision to share a lot of our intellectual property and our APIs, and in the later stages I think we overshared and we got bought. And then Larry Ellison shut down all that sharing stuff. You know you can’t win the Americas Cup boat race by sharing.

Never Give Up on a Sale

So, another suggestion: never give up on a sale. Never assume you’ve lost a deal. I always say, a deal’s never lost, it’s only postponed. And you just have to have that attitude. Selling is very easy. For those of you who went to business school, I can teach selling in about two minutes. You walk in and say to the customer, here’s my product, can I have the order? They’ll say no. You say why, they’ll explain it. You go away and fix it. You come back and say, I fixed it, can I have the order? They’ll say no, you say why? You get the point. After about 15 times they’ll say, OK, here’s the order – get out of my face.

Just remember that. No is a key to yet another feature for your product or service. That’s all it is. Too many people think no means get out of my face. No. Just “why?” is a very powerful question. You say, I’ll be back. You don’t even ask, you just say I’ll be back. Don’t bother ‘em and try to oversell. Just go back and fix their problem. Don’t argue with them. Go back and fix it. Even if you don’t do anything different, come back with a different pitch. But so many people want to go argue, and that’s just not the right way to do it, just keep going back.

I’ll never forget, when we were starting we had Sun workstations and there were four major software CAD (computer assisted design) applications that ran and Apollo was the other startup that we were competing against. The three big ones had moved over to Apollo and none were running on the Sun workstation, but Computervision was the biggest of all; it had 40-50% market share maybe even more and so we had to win the computer vision deal or we were out of business—this was two years into it. And we went and we sold like crazy, and we were doing everything that we could. And all of a sudden, Vinod Khosla was our CEO at the time. He got a phone call, I was in his office I remember, it was about two in the afternoon, closing time in Boston and Computervision called up—the purchasing guy—and said we are formally advising you we have chosen your competitor and we are commencing negotiations to close the contract and we are formally shutting down all conversation with Sun Microsystems, thank you very much. And Vinod went pale. And if you’ve met Vinod that’s hard to do. And he hung up the phone and I said what’s wrong? And he said CV just told us we lost. And I went pale, and I said what do we do now? And I’ll give Vinod an enormous amount of credit, he said, let’s launch a proposal that they can’t refuse.

So we put all of our technology in escrow, we offered free manufacturing rights, we offered super aggressive pricing, we invented a product we didn’t have and wrote the spec down and at 5pm, three hours later, we FedExed to the 12 people we knew this new proposal and then Vinod and two of our engineers got on a redeye and showed up in Computervision Boston headquarters the next morning and started calling people and saying will you come talk to us? Did you see our proposal? Nobody would come near us. We were radioactive. So finally, about 11 o’clock in the morning, one of the engineering VPs came down into the lobby and said listen, your proposal is interesting, but go away. You can’t be seen here, just go away and stay tuned. Sure enough, Apollo got real arrogant in their negotiations. Thursday we got a phone call and they said meet us in Chicago with a word processer and a printer and a lawyer and we’ll do a deal. We got there Friday, worked through Saturday, announced the deal on Monday, and blew away Apollo.

That’s just a story of don’t take no for an answer, but don’t argue. Just give them something better.

Some Personal Advice

Now I’m going to give you a personal suggestion, go start your company before you get encumbered financially and with kids, because you’re going to work a bazillion hours. Next suggestion, the most important strategic decision you make in your business career—this might surprise you—is who you choose to have babies with. I chose very well, I got lucky. I waited til I was 39 and through most of the entrepreneurial phase of my life. But I guarantee you, whoever you have children with, is going to be a big part of your life and if you pick the right person it will make you a better leader, a more focused leader, and a leader who can spend more time on your business without feeling bad about leaving your kids home alone. So, very, very important.

And I will tell you that very few people interview and check references on who they marry as much as they will the VP of Finance. Think about it. Go meet the parents. Go meet the siblings. Go meet the crazy uncles. Meet everybody. Genetics matter. They are in there and if they aren’t there in your wife, they’ll show up in your kids. So check it out. And, by the way, if they were formerly married, you have to interview the ex. Would you ever hire somebody who got fired from a previous company without talking to somebody from the previous company? And we don’t do it!

I’m over time now, so have fun, make it fun. We always have a saying—kick butt—which win and have fun. You’re the leader, make it ok to have fun. Have fun, let them have fun, because they’re all gonna work a million hours. The next suggestion, lean Mandarin.

Scott’s Non-Profit, Curriki.org

Finally, I want to share with you one other thing that’s near and dear to me. I started a dot org, a non-profit, sort of like Endeavor, only tackling a different problem and that’s education, and a piece of education. And it’s called curriki.org. It’s a K-12 educational website that is hosting nearly 50,000 learning assets that are free and open source, in multiple languages around the world. What I would like you all to do is evangelize in your home country, your home school districts, any teachers, parents, or students that you know. And get people to donate to the website, use the website, share. We spend $15 billion a year in the U.S. every year once a year annually on curriculum and you know what, 10 plus 10 was,vis, and will be 20, for a long time. And we spend $130 on a third grade math text book when the one I learned on worked just fine. And I think we can change the world and improve everybody’s lot with free, open-source, self-paced, on-demand, real-time scored, multi-media, web-enabled curricula, as opposed to stupid textbooks. So please check it out. If you get really, really successful and go public, donate and make it happen.

Anyhow, thank you all good luck. Have fun. Go for it. There is no risk if you’re using their money. Thank you everybody.

Endeavor Global Board member launches green tech VC firm

Endeavor Global Board member and Endeavor Investor Network member Michael Ahearn announced on July 18 the launch of his new $300 million greentech venture capital company, True North Venture Partners. In the release, True North said it would focus on early-stage firms in the energy, water, agriculture, and waste sectors, with investments in the $100,000 to $25 million range.

Michael is also the Chairman of the Board of First Solar, which he co-founded and where he served as CEO from 2000 to 2009. During his tenure, he grew the company from start-up to a solar industry leading S&P 500 company.

In addition to his role on Endeavor’s Board and as a member of the Investor Network, Michael is very involved mentoring Endeavor Entrepreneurs and was recently recognized as one of the top mentors in the global network.

Steve Welch of IBM talks about ‘Watson’ [Video, Summary]

Endeavor is pleased to make public the following video and summary of a presentation at the 2011 Endeavor Entrepreneur Summit in San Francisco. The event, which assembled over 450 entrepreneurs and global business leaders, featured dozens of entrepreneurship-related presentations by top CEOs and industry experts.

Bio: Mr. Welch is an engineer at IBM’s Almaden Research Center and corporate strategy expert with over twenty years of experience.

Summary of presentation:

In mid-February of this year, NBC broke its ratings record as millions of American viewers tuned in to a see a game of Jeopardy! The impressive turnout wasn’t due to a collective bout of nostalgia, but interest in a particular unique contestant. Watson, a super-computer engineered by a team of 24 researchers at IBM, made history as the first non-human contestant to compete on the game show and beat the defending champion, effectively earning a one million dollar prize and awakening the world to a new brand of artificial intelligence.

Steve Welch, a Distinguished Engineer and Manager of Health Informatics for IBM and a member of the team that worked on Watson, spoke at the Endeavor Summit this summer about the engineering behind Watson’s development and the implications of this innovative technology for the world.

The biggest hurdle in developing Watson, Welch said, was getting a computer to understand natural human language. Unlike computer code, equations, or the key search terms we usually use to ‘talk’ with our computers, human language is nuanced, ambiguous and contextual. Years of experience and cognitive processes go into any form of verbal human communication, making it virtually impossible for a computer to decode. The breakthrough came in the form of a new paradigm that was created by an IBM summer student. His system reconfigured the way computers process language and provided IBM with the framework that would eventually define the super-computer’s consciousness.

Watson’s ‘brain’ is composed of seven banks of processors and 2,800 cores. The team of engineers and researchers behind his development spent years inputting thousands of pages of data into Watson’s knowledge base that could be called upon when answering questions on Jeopardy (Watson was not connected to the Internet during the game). Unlike traditional search engines, Watson weighs supporting evidence for a number of different answers before producing a response. When he reports his answer, he can also provide the evidence that led him to it and his level of confidence in the findings. Just like a real human, Watson learns to trust different sources of information based on past experience.

Watson’s development marks not only an innovative leap for technology, but also for art. IBM went to great lengths to develop Watson’s humanity, bringing in a voice actor to record thousands of lines and sounds as the basis of Watson’s ‘voice,’ and hiring a generative artist to design Watson’s face. The image he created is a swarming globe that has 27 different states to illustrate Watson’s various moods – when he is very confident in is answer, the globe will swarm towards the top of the screen and glow green.

A member of the audience asked Welch where Watson was now: has he retired on his earnings to a life of leisure? Of course not. For now, Watson is an IBM employee working in healthcare and finance, two industries where there is an influx of information to be processed and analyzed. In the future, IBM hopes to develop practical applications for the Watson technology that will create benefits in many different facets of society.

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