SocialBias :: a Digital Abstraction of Michael Parkatti

The third installment of my weekly articles for the Globe & Mail is now up.

The full text:

Only three weeks into Y Combinator and time is already at a fantastic premium. The focus at this point in the session is to simply create a product. When you consider that development schedules for major software products is usually on the order of years, the fact that most groups are planning, building, testing, and launching a product in just a few months is quite remarkable.

On such a truncated development schedule, we don’t really have time to deal with a lot of distractions, but curveballs are always in various stages of being thrown at us. Case in point: our landlord decided to do some light yardwork last week with what can only be described as heavy machinery. One sliced cable wire later, and our entire house has been without any Internet connection for the last week.

It’s a hard task to try and launch a couple of Internet companies without, you know… the Internet. However, we have been resourceful enough to “borrow” other wireless connections while waiting for the cable company to come sort it out.

The weekly dinners have started, which are held at Y Combintor headquarters in Cambridge. Each one features a guest speaker who comes to impart knowledge and meet with all the different founders.

The first featured founders from previous YC companies CrystalRoot and Reddit who spoke to us about general things that they wish they had known in their first week. CrystalRoot is a company that handles online promotions and events from the summer 2007 batch, while Reddit is a social news and link-sharing site that was part of the inaugural summer 2005 session. Reddit was acquired by Conde Nast in 2006.

Our second dinner featured Mark Macenka, a partner in the law firm Goodwin Procter, who spoke to us about legal issues that most startups need to handle. Topics included incorporation, founders’ vesting, and intellectual property. This was a topic that not many of the founders had dealt with before, so his advice was very well received.

The latest dinner featured founders from four different YC companies, including Heroku (a platform to create and edit your own web applications) and SnapTalent (precisely targeted job advertising).

They spoke generally about their experiences in the program and how they successfully transitioned into fundable companies afterwards. The stuck around for a while after their discussions to talk to the founders and answer any questions we had. We ended up chatting late into the night and getting a lot of fantastic insights from them.

It was almost sobering in a way to hear about the challenges ahead. It’s clear that even though we’re all obsessively building our products, this is nothing compared to what’s ahead of us. Previous founders stressed to take advantage of this time while we have it, because we’ll look back on this period in hindsight and question whether we truly worked as hard as we could have.

Another consistent theme has been to not be afraid of iterating and evolving our ideas if they require it. The most important thing in determining success is whether you created a product that people actually wanted. To underline the point, every founder got T-shirts with the phrase “Make Something People Want” on the front. If a YC company ever reaches a liquidity event, the rumour is that you receive a shirt that says “We Made Something People Wanted.”

Mike and I have been faced with this problem ourselves. We know that the underlying concept of our product is inherently valuable — the challenge at this point is deciding how best to translate that potential into reality. Every single day we’re learning a ton about our idea, refining it, and changing it when necessary.

When it comes down to it, we really just want to launch as soon as possible — the absolute best way to learn about the efficacy of your product is to have people actually use it.

You’ve quit your cubicle-bound job, learned how to hack, come up with a great idea, and delved right into the process of limitless creation.  This shit is going to be easy… and fun!!  Why worry about all those boring old ways of doing things?  This is inspiration.  Nay, DIVINE inspiration.

Is this you?  Then you are a tool.  And I’ll tell you why.

Yes, I’m glad you’ve taken the chance to work on your own stuff.  That takes cajones all on its own.  But if you don’t approach your new-found liberty with the rigour and professionalism it deserves, you will quickly find yourself dripping in debt and smelling faintly like corn syrup.

Case in point: build wireframes first, and implement second.

You may be the John von Neumann of building websites, but I’m sure even he planned his ass off before working on anything.  Building wireframes should be the first step before you start building ANY page on your website.  It’s preferable to wireframe out your entire site before you start, but at the very least before you begin hacking up each page.

What’s included in a good wireframe?  I just use plain old textboxes.  You know, those are boxes, with text in them.  You’d like the text to provide some context.  I have an example of a mock wireframe to the right.  The static parts of your page can just be coloured boxes representing their proportional size on the page.  The important stuff is what’s on the main content pane.  I get down to div-level detail here.  Start cutting up the page in your mind.  This doesn’t have to be exact — it merely needs to start your brain thinking about what will work and what won’t.  You’d be surprised how much can change while you’re at this stage.  You’ll erase boxes and text and move things around and alter your ideas until it looks entirely different from when you started.

What’s the use of all this?  Imagine if you had gone from idea to implementation with no planning.  You spend a day cutting this page up beautifully and populating it with dynamic content.  And then you realize after the fact that you needed to change something.  So you spend half a day making that change.  Then, you realize the context of some other information is off, so you have to alter that, spending another half day.  Soon, you’re three days deep into one freaking page when you could have spent one hour planning and one day implementing.

What should you use to wireframe your stuff up?  You may laugh, but I use PowerPoint.  hahaha microsoft sucks, yeah ok whatever, I don’t care.  I’ve been using that program my entire life, and I can make one of these in about 4 minutes if I need to.  Another good tool is Fireworks, and I know some Mac users use OmniGraffle.  Seriously, it doesn’t matter — whatever program you choose doesn’t need to split atoms, it needs to make boxes that you can add text to very quickly.

Be professional.  Plan every move.  Ideally you have a dynamic in your startup where one guy likes to plan and one guy likes to implement.  In our startup, I do the majority of planning, while Mike does the majority of implementation.  If your founding group is going to disagree about what you’re building, that conversation needs to happen at the box-and-text phase, rather than the code-and-interface phase.  Once something’s built, there are a lot more emotions and animousity involved in changing it.  Therefore, more reasons to ignore problems.

You have no idea how many times we’ve referred back to my original mockups, or redrafted them on the fly to consider how our changes will affect the personality of a page.  Save yourself time.  Wire it up!

The Globe & Mail has published the second installment of our weekly diaries … they don’t provide a unique URL for each entry, so it’s still available at:

THIS LINK

Enjoy…

One eventuality that founders usually seem to ignore when they begin companies is the risk of a founding team breaking up during the venture — this is obviously something that can easily kill a company before it can even get off the ground.

The ability for the founding team to get along is absolutely imperative for any new startup. Creating a healthy working relationship can help determine your chances for success, and will also set the cultural tone for whatever your startup eventually becomes.

Founders are usually friends, family, or former colleagues at the very least. Therefore, they usually know each other pretty well. But it’s important to remember that even though you know someone pretty well, it doesn’t mean you know if you work with them very well. Rationalizing that your combined abilities would create a whole larger than the sum of its parts is only possible if you’ve previously worked together under pressure, either at work or in school. Many of my observations in this post depend heavily on this familiarity.

So what’s important to look for in a potential Co-Founder? Here’s a list of qualities that I suggest you look for:

1. They don’t bullshit about what they can do
2. They get things done when they said they would be done
3. They ask for help/input before heading down dead-end streets
4. When pitching together, they can pick up the slack if you have a brain cramp in mid-sentence
5. They consistently impress you with what they can pull off
6. They respect your domain(s) of expertise
7. You can make decisions together quickly and without day-long meetings
8. They have a similar sense of humour
9. They don’t let themselves get too high during wins or too low during defeats
10. You don’t hate them or anything they stand for

Bonus: They don’t maintain an unsustainable social-life

Use this list wisely. Obviously, there are probably like a thousand things I could write here, but those are the things I think about when working with that Marrone kid these days. The over-riding things in my mind are trust and respect and good humour. If you have those things in your founding situation, you’re way ahead of the game.

Yesterday the Globe & Mail published the first installment of a weekly series Mike and I are writing for them.  They’re calling it “Y Combinator Diaries”, even though I strongly suggested “Postcards from the Edge”.

Basically, we’ll be giving an account of what we do each week, insights we make, or advice we received.  Because our product is still under wraps, we won’t be able to get into specific product details until we launch later this summer.  Before you all collectively yawn, I’ll try to be as entertaining as possible (without resorting to the use of hand puppets).

Keep fit and have fun.

For those wondering, I did get into Boston pretty well a couple of weeks ago, the place is great, and Mike and I are working crazy hard. But I did have a bit of an adventure trying to get into the States, and it’s all due to a few scrupulous border officials.

To get into the States to participate for 3 months in Y Combinator (YC), I had prepared a massive portfolio of documents to support my entry. Description of the program, proof of where I was staying, proof of the financial ability to support myself, printed plane tickets to and from Boston, proof of medical insurance, that kind of stuff. I assumed I was the most prepared Canadian to enter the States for YC ever, because I usually like to overestimate myself.

Entering the country cast a decidedly different picture though. The initial official I talked to didn’t really understand what I was doing… therefore I had to sit in the spare room at the airport and wait for an hour while the rest of the crew had looked over my documents and spied on me.

You have to imagine like an empty customs area. This was in the Edmonton International Airport (not exactly known for its high volume), and for some reason I was like the only person at customs. The only person in the big room with the service stations, and then the only person in the side room. There must have been 12 American border officials, and me, for like an entire hour.

After that, I get summoned to meet with the top guy, and he tells me that I need a student visa to enter the United States for this program, and he presents me with a form for me to sign to withdraw my application to enter the country. For the next 20 minutes, I try to explain what YC is and how it’s not a student program, etc etc. He listens to me, but he’s obviously already made up his mind, and he especially can’t reverse his decision now with his subordinates looking on.

He tells me that I can reapply for entry in the future with new documentation. They escorted me out of the customs area and closed the door behind me. …. … wtf?

I walked right over to the ticketing agent for Alaska Air (yeah, I know), and asked if I could reschedule my trip. He said it was either going to be tomorrow or a week from now. I couldn’t wait a week, so I said just schedule me for tomorrow at the same time.

I immediately got on the phone and arranged the documentation to try again the next day. That night I had a few hurried conversations and desperately compiled documentation and printed out every single scrap of information I could find on the B1 Visa for temporary entry for business purposes.

I was able to fax my materials into the customs office in the morning, and by 1:30 pm I’d received a call back from them saying that I had addressed their concerns and that I would be granted entry that day.

Those few hours were some of the most tense I can remember. I actually spent that time pouring through family records with my mom to figure out when my Great-Uncle Clements had died in WWII and then research what battle it was. It turns out he died during the Allied Invasion of Sicily in the summer of 1943 as part of the 1st Canadian Infantry Division… probably not more than a couple of weeks into his first action. He was 23. Battle hardened Nazis were training their gun-sights on my Great-Uncle on the Italian coast when he was 23… and here I was worrying about a customs problem. That kind of put things into perspective.

I barely slept on the plane, but the rest of the journey was relatively painless.

Here’s a few lessons I learned for future Canadian YCers to take into account:

1. Shave OFF Your Facial Hair! - the first day I showed up with a full beard. The second day I was completely clean shaven. Coincidence? I think not. I’m not sure if they thought I was a terrorist, but it probably didn’t help.
2. Get a Letter from the Program - having an American vouch for you in writing can only help things.
3. Prove that you Live in Canada - I had just moved from Vancouver, so I had a clunky story for why I was leaving from Edmonton. I got my parents to write me a letter saying that I had a place to return to after 3 months.
4. Print off News Articles about Y-Combinator - I printed off stories covering YC from The New York Times, Newsweek, and USA Today. I felt like I was faxing them hand grenades of legitimacy.

And that’s pretty much it. Prove you can pay your way down there, and prove that you’re coming back with a return ticket. Other than that, you should be set.

Speaking from the perspective of someone who has been in the professional workforce for 3 years and has decided to forego that life for the time-being, I think I have some hard-won insights into how younger professionals consider the full-time workforce.

On the surface, gaining corporate employment hasn’t changed much since our grandparents’ generation after WWII. It really isn’t rocket science.

1. Find corporations that make money
2. Apply to a subset of those corporations
3. Accept employment at one of them
4. Buy a cat and learn how to garden … and don’t question your success

Increasingly, I think it’s safe to suggest that younger people are straying from this tried-and-true method of professional ‘entrapment’. Most people I know my age tend to either be working for themselves or wishing they worked for themselves. I think humans have a natural bias towards self-sustenance; whether this means working for yourself, living a life of petty crime, or becoming a total recluse is up for debate.

But the idea of entrepreneurship among the vast majority of people is a worthy but ambiguous life choice. Everyone has their friend who’s trying to figure things out on their own. They talk about that person behind their back, either praising them or smugly disregarding them.

What reasons do people have to fear an entrepreneurial life? Here was my personal Top 10:

1. Work of unpredictable difficulty

2. Inconsistent cash flow

3. An inherent orientation towards sales and the sales process

4. Unconventional working schedule

5. Prospect of failure & social stigma

6. A lack of understanding of where to begin

7. No financial nest-egg to support a period of little to no income

8. General perception in the corporate world that entrepreneurial experience is subordinate to corporate experience

9. Lack of confidence in a claim to unique knowledge

10. A disrupted personal life

Each of these reasons is a legitimate fear, and not having a suitable answer for any of them may subvert a person’s entrepreneurial ambitions. To be able to confidently begin, an entrepreneur needs to personally debunk each of their own set of fears. Some fears need hard data as evidence, some require anecdotal observations, and some simply require a period of time to obtain a level of comfort.

What follows was my personal rationale for simply not fearing each fear:

1. Work of unpredictable difficulty

Would I rather do difficult work or boring work? I’ll take difficult every time.

2. Inconsistent cash flow

Who cares? Worse things have happened. I don’t need to buy a bunch of crap I don’t need. Eat. Wear Clothes. The rest is all scenery.

3. An inherent orientation towards sales and the sales process

I don’t like selling or salespeople — a lot of people don’t. But, it’s a lot different when you’re selling yourself. It becomes an act of pride rather than an act of servitude.

4. Unconventional working schedule

My most productive hours have always been different than 9-5. As long as you preserve the most important things in your life, timing doesn’t matter at all.

5. Prospect of failure & social stigma

So what happens if I fail? Holy shit, I’ll have to get a… job?

6. A lack of understanding of where to begin

Debunking this starts with an objectively good idea. Good ideas beget better ideas. Experience begets better ideas. Chances are, your first entrepreneurial idea in your early 20’s is terrible. But if it’s your 50th decent idea, you can survey that idea against the strengths of all your ideas. Once you pick the right path to walk down, you’ll instantly appreciate how much easier the walk is (ie. having the right idea makes things easier).

7. No financial nest-egg to support a period of little to no income

You can live more modestly than you could imagine. If you need to eat out every day or wear brand name fashion or keep up your crack habit, chances are you probably aren’t cut out to be an entrepreneur. But if you can get by with a reasonable diet and humble living, there’s nothing to worry about.

8. General perception in the corporate world that entrepreneurial experience is subordinate to corporate experience

If you want to rack up brownie points by being an underling for the first half of your corporate career, then go for it. However, lateral movement can skip many levels of the corporate ladder. If you can make a name for yourself, you will create your own brand that can be leveraged into a better corporate job later on (if that’s what you want).

9. Lack of confidence in a claim to unique knowledge

Here’s a universal truth: there are not that many truly extra-ordinary people on the planet. Probably the most important quality of extra-ordinary people I meet is their ability to fiercely question the status quo and to think with genuine novelty. If you don’t have unique thoughts, then how can you innovate?

10. A disrupted personal life

If you surround yourself with people who truly care about you, they will support you no matter what the odds are. On the plus side, once you start banking 16 hour days and forgetting your own birthday, you’ll get a pretty good sense of who the important people really are.

I guess you could say that someone isn’t entirely ready to succeed until they’re willing to risk everything to follow their dreams. In my case, however, that means everything except one suitcase full of stuff… which is exactly what I’ll be bringing to Boston for the YC summer session.

It kind of felt like I was packing for summer camp — but instead of worrying about drinking water that tastes like eggs, I’ll be meeting a bunch of cool people, figuring out what we’re building, and launching a new product. I brought one of everything, just in case.

I won’t take this opportunity to give my rant on our obsession with material goods, but I will say that stripping all of the extraneous ‘things’ in my life felt pretty refreshing. It perfectly summarized what participating in YC will require — cropping out the unnecessary distractions and getting down to work. Not forever, but for a little while. At this point in my life, I need to hide my shame and access the internet… all the rest has been put in storage (literally).

Honestly, looking at this one suitcase was when the implications of what I’m doing really came into focus for me. After all the schooling, all of the jobs I’ve had, all the books/articles I’ve read, all I’ve ever learned, and all I’ve ever accomplished… the only things coming to Boston with me are this suitcase and the reservoir of chaos trapped in the recesses of my brain. Let’s hope neither of them get lost during the flight down… (debatable — I’m flying Alaska Air).

Ok. Quite the controversy was caused by this week’s pronouncement by TechCrunch that Cambrian House is deadpooled (additional coverage here and here). It’s not obvious what’s going on right now… though recently it was brought to my attention that even though the post is over three days old, there continues to be a steady stream of comments added every day. Sure enough, you can find plenty of opinions on why the current model failed. And yes, most of them are anonymously posted. Screw it, I’m going to ball up and give my opinions.

I worked at Cambrian House for about 8 months as a contractor. I’m not going to be talking about proprietary information, nor providing slanderous fodder, nor giving away any precious intellectual property information (whatever the hell that is…?) — rather I’m going to stick to generalizations that anybody with any sort of connection to the company could have also concluded. I keep getting pinged by former employees, current employees, old community members, and investors, and I’m seriously sick of pretending that Denmark smells nice. This is the one and only time I’m going to talk about this stuff.

What follows is a review of what they did right, what they did wrong, and a recipe for chocolate chip cookies.

What Cambrian House Did Right

1. Stimulating work environment - it always had the feeling that you could be working on something revolutionary and you were doing it with some of the most creative and intelligent people possible
2. Professional Trust - no one questioned your work, while you were doing it. They trusted people like adults to finish the work.
3. Fierce Debate - once work was finished, it was open to public debate by almost the entire company. This really made everyone feel like they had a voice.
4. Transparency with the community - weekly meetings were broadcast across the internet.
5. Not playing smallball - trying to spark a mass movement across the world makes everyone feel like they’re part of a mission
6. Making noise - you can say a lot of things about CH, but we certainly made a lot of noise wherever we went on the marketing front
7. Anything is possible - set a lofty goal, and try to reach it. Traffic, business development, partnerships, whatever. You’d be amazed what you can do when you think big. For a few months, CH was magic, in every sense.

What Cambrian House Did Wrong

1. Not having a simple, compelling product plan from Day One - what is the one hook that keeps people coming back?
2. Never finding product-market fit - spending too much time guessing what the world changing product is rather than actually understanding what the market wants or demands.
3. Changing ’strategies’ too much - this confused the community who joined under a certain product expectation
4. Raising too much money - this forced CH into a 9 figure exit expectation right off the bat. Instead of living frugally and scraping by with nothing, CH started with a massive bankroll.
5. Hiring too many people - the mythical man month? For some products still awaiting release, it’s the mythical man year.
6. Over-reliance on marketing and gimmicks - after awhile, the fun conference displays, swag giveaways, and community-owned messages wear really thin. What people actually want is a product that keeps them coming back again and again.
7. A Gossip Culture - It’s hard to trust the mission if certain people don’t trust each other.
8. Acting like a large corporation - having the corporate inertia of a company ten times our size didn’t exactly pan out well for communication across all levels … two guys working in a garage don’t really have that problem.
9. The belief that you’re one mainstream press article, viral video, or linkbaited blog post away from making it big - sure, these things are all important, but what’s the point of attracting traffic if people weren’t entirely sure what they were supposed to do when they got there? Build the compelling product first, and promote yourself, second.
10. Being “built to flip” and advertising ourselves as such - I can’t think of one way to turn off potential acquirers better than to suggest your company is not interested in creating long-term value.
11. Following other people’s advice too easily - one suggestion from a community member or ‘person-in-our-world’ could take us off on a variety of tangents that almost always took our eye off the ball.
12. Extraneous side projects - too much time and money were blown on cute projects that were greenlighted by nobody and eventually went nowhere. If you’re not working on the main product, you’ve got to ask yourself: what are you doing this for?

I’ve got great admiration for some of the people that work at Cambrian House, and I’m really excited to hear about their new direction. I think the TechCrunch article was a little heavy-handed, but probably not entirely off-base. The truth always lies somewhere in the middle with sensational headlines. I enjoyed my time working there, and I learned a lot while cutting my teeth in the startup world. And yeah, I still want us all to win in the end. Good luck.

A Recipe for Chocolate Chip Cookies

Ingredients

• 1 cup butter, softened
• 1 cup white sugar
• 1 cup packed brown sugar
• 2 eggs
• 2 teaspoons vanilla extract
• 3 cups all-purpose flour
• 1 teaspoon baking soda
• 2 teaspoons hot water
• 1/2 teaspoon salt
• 2 cups semisweet chocolate chips
• 1 cup chopped walnuts

Directions

1. Preheat oven to 350 degrees F (175 degrees C).
2. Cream together the butter, white sugar, and brown sugar until smooth. Beat in the eggs one at a time, then stir in the vanilla. Dissolve baking soda in hot water. Add to batter along with salt. Stir in flour, chocolate chips, and nuts. Drop by large spoonfuls onto ungreased pans.
3. Bake for about 10 minutes in the preheated oven, or until edges are nicely browned.

I’ve had the honour of being involved with a wide variety of websites so far in my career, either as a product manager and/or developer and/or founder. In my opinion, the most important phase in any website is its initial conceptualization and development. During this time, decisions are made that cannot easily be undone, the most obvious one being ‘what the hell does this thing do?’. That simple question solidifies both the function and tenor of a website.

Recently, I’ve drawn a metaphor that helps visualize this process. Imagine that you’re going out to eat. You’ve got two decisions to make: a) which restaurant am I going to?, and b) how am I going to get there?

The Restaurant

Off the top of your head, you can think of dozens of restaurants that you could go to. Talking to your friends, they have dozens more in mind. There may be literally hundreds or thousands of options in your city for where to eat. Once you get there, they feed you, and you eat. You’ll draw your own conclusions about whether you enjoyed the meal. Even if the meal was one of your favourites, you’re probably not going back to that restaurant for a month or two. You’ll tell your friends about it… but there is a limit to how much you can consume that product, simply because there are so many options in town that are easy substitutes.

The Taxi

In deciding how to get to your restaurant, your options are much more limited. Every city has perhaps a half dozen viable taxi companies that everyone knows about — and everybody has their numbers saved in their cell phone’s address books. There’s not really much complicated thinking in deciding whether you enjoy their service — they either got you there in good time or they didn’t. You’ll only think about using the well-known large cab companies — why putz around with a small company when you can rely on the company with 2000 cabs trolling around. If you go out to eat a lot, you’ll probably frequent a variety of restaurants but I’d be surprised if you used different cab companies to get there.

Your Website Should Be The Taxi

There are literally millions of publishers on the web. They have websites that offer a specific service. Even if you like that website, you may only have reason to go there once a month or less. It provides you a specific service. Going to these websites is like choosing a restaurant.

On the other hand, there are only so many ‘taxis’ on the web. These are the companies that facilitate traffic and discovery in the internet. They are net exporters of traffic, rather than net importers… but this is simply a reflection of their utility. Think Digg, reddit, StumbleUpon, Google. These companies are the arbiters of the web. You don’t want to use these products… you almost have to. And why use a crappy clone of Digg, when you can use Digg (small vs large cab company)?

Therefore, this is your challenge. It’s most lucrative to tackle large elemental problems that everyone shares. Think about consistent human pain, and what you could provide to address it. It is incredibly easy to manufacture pain in your mind, however. Don’t fall for this trap. If you can’t make a case in your mind that a large proportion of people experience this pain on a highly regular basis (no matter how effective it is), then your product is not The Taxi. Be The Taxi.