How To Stay Motivated During A Pivot

I originally wrote this as a piece for Huffington Post, which you can find here.

Startups face no shortage of uncertainty, and nothing creates more uncertainty than going through a pivot. A pivot can be a soul-wrenching, sleepless, and hair-pulling ordeal that can leave you feeling like the whole startup thing was never worth it. That is, if you let it. But if you have the right attitude, a pivot can be a period of intense personal and professional growth – a unique learning experience that can help you grow in wisdom and fortitude.

I’ve gone through a pivot before. And I’m in the middle of another. Here’s what I’ve learned that has helped me turn the experience into a positive one. Continue reading

Adopting failure and risk in the non-profit world

For-profit businesses publicly fail all the time. When they do, it’s not the end of the world – learning from one’s mistakes (and those of others) can be an enormous factor in long-term success. In the non-profit world, though, failures are often swept under the rug. But since non-profits deal with lives, not dollars, why isn’t “learning from failure” a more widely adopted practice?

A new service called Admitting Failure wants to change that. In this post, we’ll look at why the for-profit world is able to learn from failure, and examine what Admitting Failure is doing to help the non-profit world achieve the same thing.

Failure is natural in business

Failure never tasted so good.

When Apple came out with the $700 Newton PDA in 1993, it didn’t exactly vault the company to success. In fact, it was one of the company’s most ridiculed products. And when Pepsi launched a massive marketing campaign to convince us to drink Crystal Pepsi, the clear cola didn’t live long. But even successful companies prepare to fail from time to time. What makes failure such a natural part of the business world?

Reward for taking risk. Trying something new is often what allows companies to achieve breakthrough success, and that requires risk and the occasional failure. Sometimes “playing it safe” by not taking any risks is a sure way to slowly kill a company.

Investors tolerate failure. A good investor diversifies his portfolio, knowing that some companies will yield negative returns. It’s an expected outcome that factors into any good investor’s calculations.

Failures are made public. Talk show hosts and business blogs alike love to poke fun at “game changing” products that no one bought. Business schools thrive on doing case studies on corporate mistakes. Since everyone is exposed to failures in business, they’re not always a surprise. And even better, there’s a wealth of information out there for anyone who wants to learn from the past.

Non-Profits aren’t allowed to fail

Warfare might be a bit too risky for non-profits, but you get the idea.

If the world’s most successful companies fail from time to time, it goes without saying the even the world’s best non-profits are going to make mistakes too. But unfortunately, non-profits aren’t allowed to fail publicly the way businesses are. For one, there isn’t a massive reward for taking massive risk, so non-profits aren’t as encouraged to experiment.

Secondly, donors aren’t yet comfortable with their dollars being used for experiments, which means non-profits are less likely to try unproven ideas. And there’s no forum for failures to be widely publicized, so logistically, sharing failures in the non-profit community would be hard to pull off anyway.

Can Admitting Failure change the status quo?

Admitting Failure addresses the problem of “private failures” in the non-profit community primarily by addressing the logistical issue – no common forum for non-profit failures to be disclosed and discussed. The platform is a good start; take a look at this post from charity: water about the failure of one of their metrics:

…you have probably heard us say, Tweet or write: $20 can provide clean and safe drinking water to one person for 20 years. But earlier this year, we removed the “20 years” part from that messaging.

As with any retraction, this sparked a discussion with our staff about how we deal with failure… we knew that if we continued to promise that each $20 donation would provide one person access to water for two decades, we’d be using a number we’re not certain about. In effect, we’d be failing the faith of the public and our mission to “reinvent charity”—to restore peoples’ trust in charitable work…

In a way, showing the public where we’ve messed up or why we want to suddenly move in a new direction is like taking a deep sigh of relief. We’ve given ourselves the chance to share the hard stuff. We’re sparking important conversations and welcoming scrutiny because we really have nothing to hide.

Donors need to think like investors

Donors should be more like this guy.

charity: water deserves praise for taking the lead on admitting their own mistakes. But while Admitting Failure solves an important part of the problem, real change won’t happen until donors begin to act differently. In the business world, successes and failures are disclosed so readily because consumers experience and discuss them, and because investors demand disclosure.

So while example like charity:water are fine, non-profits won’t ever widely disclose failures until donors begin taking the approach of an investor. Donors need to encourage the non-profits they support to experiment, make mistakes, and share their learnings. They need to diversify their donations, to improve the odds of them supporting a truly successful project. And most of all, they need to let non-profits know that it’s OK to fail once in a while. Here are three ways Admitting Failure could help them do this:

  1. Give donors tools to encourage their favorite non-profits to participate on the site. They could even take a page from Invisible Children‘s playbook and give users a one-click method to target high-profile non-profits on Twitter.
  2. Rate charities, in the fashion of Charity Navigator, based on the knowledge they’ve contributed to the non-profit community. Messaged correctly, charities who developed a reputation for being honest could benefit from additional donor support.
  3. Allow aid recipients themselves to share their perspective on a non-profit’s work. Nothing’s more authentic than the experience of a person who was targeted by an aid program, so this would be a great way to build a 360-degree perspective of a non-profit.

What do you think – are non-profits likely to admit more mistakes, if only given the right tools? Or do donors need to become more involved before any real change can take place?

Why there is no such thing as corporate values

Did BP lack good values, or did Tony Hayward?

Recently I’ve been reading about corporations and the effect they can have on society. A book called “We First“, by Simon Mainwaring, is a great example – it lauds companies that don’t just make money, but also pursue positive social outcomes. If you haven’t read Simon’s book yet, do it. At least check out his blog.

Outside of “We First”, you’ll find plenty of discussion around corporate social impact. There are “socially responsible companies“, “eco-conscious companies“, “socially conscious businesses“, and of course, the most “sustainable companies“. Whatever that means. Inevitably, writers ask why more companies aren’t acting responsibly: what they should or should not be doing, how they should change, what their values should be, and so on.

However, these discussions are missing the point. Companies can’t and won’t change themselves. But we talk about about ideas like “corporate values”, as if they existed in some independent space. But there really isn’t such thing as corporate values. There are only individual values. We seem to ignore that fact that corporations are made entirely of, and run exclusively by, individuals.

So if we are going to have a discussion about the behavior of corporations, we necessarily have to have a talk about individual values. The effect a corporation has on society is a direct result of the values possessed by the people running that company. In other words, corporate behavior is a reflection of the combined values, influence, and behavior of each individual within. So why don’t we discuss individual values more often? Why don’t we hear about the “500 Most Socially Conscious Managers”, or the “100 Most Responsible Board Members”?

I’ll admit that we do hear a great deal about celebrity individuals – the all-star CEOs, the point guards, the pop music stars, and the politicians. But these don’t count – their celebrity persona may not reflect the real individual, and too much of what we see is filtered by the media.

But it’s still easier for us to praise or vilify the celebrities, because they won’t do the same to us. It’s a one-way communication. We feel free to chastise someone like Tony Hayward, because he’ll never engage in a quid pro quo. So should we turn to criticizing our peers instead? Not if we want to risk destroying our relationships and are willing to open ourselves to the same critique. Are you willing to do this?

So where does this leave us? Who do we turn to if we want to improve ourselves and society? Socrates said, “A self examined life is not worth living”. I’ll extend that further, but saying “A self-examined life is the only way we can hope to have companies that are better stewards of society.” If individuals don’t change, nothing else will. We have to be willing find our faults from within! I know that’s not an easy proposition. But it’s the only way we can really hope for any change, in my view.

If this point resonates with you, I’d recommend checking out Sam Davidson’s blog. He articulates ideas about self-examination far better than I can. In fact, one of his recent articles inspired this post in the first place.

What role do you think individual values play in setting the behavior of corporations?

3 Ways to Improve Cause-Related Retail

I love the idea of joining retail purchases with charitable donations. It provides shoppers with both the prompt and the opportunity to give, creating an easy donation transaction. Here are a few examples: you purchase (RED) coffee from Starbucks, and some of the proceeds are donated to the Global Fund; you check out at Kroger and are asked to donate $1 to a local charity; you buy a bottle of Merlot at onehopewine.com, and a few dollars is sent to the charity of your choice.

These examples have undoubtedly raised a great deal of funds for charity – (RED) alone has garnered over $170 MM since 2006. But does that mean that cause-related purchases are marketed as well as they could be? I don’t think so. The “make a purchase/make a donation” model is still relatively new, and sometimes a bit awkward. Here are three suggestions on how to improve it:

1. Add value, not price

As a business, if you’re going to donate 10% of a product’s sale price to charity, don’t just mark up the price by 10% and expect me to buy it. You’re not adding anything to the equation. Instead, add value in some other way. Tell me that because you donate half of your profits to charity, you can sell your product at a competitive price and give 10% to charity. Or offer a matching donation from a third-party, so shoppers feel like that their donated dollars go further. Be creative. Have some skin in the game. But don’t simply pass the buck to the customer.

2. Give me some credit

Hey, I just bought your product, and I supported a charity! But so what?! If you want customers to feel really good about what they’ve done, show them you appreciate it. Talk about the customers who’ve done the most to support causes on your Facebook or Twitter feed. Give customers who patronize your cause-related products discounts on future purchases, or special access to sale events. A ‘small thank’ you can go a long way.

3. Don’t overwhelm me

Are you asking customers to make a donation every time they interact with your business? Maybe I already made a donation earlier in the day, and I’m tapped out. So I might get a little annoyed if I feel like I’m getting shaken down each time I pick up a bag of groceries. If you ask me too often, or make me feel guilty if I decline, then I’ll just shop somewhere else. Make me feel good for giving, but not bad for saying no.

These are just three ideas – what other ways can cause-related retail be improved? What are some good examples of this being done well?

What can video games teach us about startups?

Video games have been around most of my life, but it was only last week when I realized that they can actually teach us something about startups. Specifically, first-person “shooter” games like Call of Duty, Battlefield, and the old-school Goldeneye 007 provide a good analogy to getting a new venture off the ground. How? Strategy and skill. Read further and I’ll explain.

In this genre, games are variations on a theme – playing through the eyes of your character and given a series of weapons, your goals is shoot/blow up other players and avoid having the same done to you. Since these games are played online, you can play against top players from all over the world. If you want to find out what it’s like to get schooled by an 11-year old, it won’t take long.

Players generally fall into two camps – strategic and skillful. Strategic players think ahead and plan well. They know where the good vantage points are, when to run and when to hide, and are smart enough to predict the behavior of other players. You can be a terrible shot, but if you can be strategic, you can still be pretty effective. Strategy comes out of patience and understanding.

Skillful players are those who are dexterous in handling their weapons. These are the players who can jump of a building, see an enemy running in the distance, and tag him with one shot, all before he hits the ground a half second later. These players can get away with poor strategy, because their action is so quick and precise. Skill can be gained only one way – hours upon hours of practice.

Obviously, the best players are those that combine both strategy and skill. Don’t go near them.

There is a perfect parallel to running a new venture here. Strategic organizations understand where they’re headed, are aware of competitors, and use their intelligence to stay ahead of others. They’re savvy about addressing the needs of their customers, and are effective at utilizing their assets at just the right time and place. They’re led by thinkers and sharp analysts.

Skillful startups ooze technical ability. They have teams of crack programmers and project managers, and they thrive on speed and execution. These organizations get things done. They can take something to market faster than anyone else can, and can iterate with new improvements at the drop of a hat. Skill-based startups are led by tech and management whizzes.

Naturally, successful ventures have to demonstrate both strategy and skill. Without skill, a startup won’t be able to grow and respond quickly enough to remain relevant. And without the strategy – well, doing a good job of providing something that no one wants won’t get you very far. The good news is that if you fall short on one of these and your new venture fails, at least you won’t have been beaten by an 11-year old.

How does your startup fare in its balance of strategy and skill?