Tag: Guy Kawasaki

“The ultimate test of your (mission statement) is if your telephone operator can tell you what it is.” – Guy Kawasaki

… not that small companies have operators anymore.

I’m usually a bit skeptical about mission statements.  Perhaps because most I have seen are pretty weak, or crafted to send a message that is different from reality.  Perhaps because it’s hard to distill the purpose of a complex organization down to a simple statement. Or, perhaps it’s because no one wants to declare a statement of accountability  where there’s natural conflict between customers, shareholders, and the general public.

That doesn’t mean it’s not a worthwhile exercise.  I am biased toward Jim Collin’s idea of the Core Ideology, a set of fundamental beliefs that seldom if ever change.  That combined with the company Purpose covers the basics that provide a firm’s moral compass.  What’s left is then to make sure everyone knows it by heart.

The Boy Scouts start every meeting with the Scout Oath and the Scout Law.  It constantly reinforces Scouting’s Core Ideology that a Scout is trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean, and reverent.  Something that doesn’t change and one remembers 40 years later.


“The best way to build cohesiveness is to suffer,…” – Guy Kawasaki

“…and you can’t suffer if your butt is sitting in a $700 Herman Mller Chair in a beautiful building.”

It takes every penny you can muster to build your company and get your product in the hands of your customer.  The money your investors gave you is meant for that; not for supporting a nice office and a lavish lifestyle.

The best work your people will ever do for you is the work they choose to donate.  You want them thinking about your mission on the weekends and in the middle of the night and here’s the thing: You can never pay enough for that.  It only comes to you when they choose to give it. If they ever feel like their efforts are supporting your hubris, then you will get less than you pay for and the best will find someone else to donate their time to.


BloggingGazelle is published daily by Shawn Carson

“Customers buy products, not technology, science, or research findings.” – Guy Kawasaki

I work a lot with scientists and researchers.  They are very smart and work really hard following their passions.  They spend years proving their theories.  The end game is publishing the results which releases their discovery to the world. A brave few dare to ask the question, “Can we make this a business?”

I don’t have a job if these researchers don’t ask this question.  But as soon as they do, we have to have a deep discussion about value.  To the inventor, value is derived by their personal investment of time and treasure.  They have proven something new is possible and they invested in patents to protect it.  They have every right to believe that.  But the brutal reality is the value they created is validated only by them and their peers.  In order to have a business, you have to have a customer.  Once you file the paperwork with the state to open the business, it’s the customer who determines value.

It’s a harsh reality when investors pass on an investment in a technology that took years to develop.  It’s because they can’t see a pathway from the research to a profitable business.  In other words, it has no value.  It’s even worse to release a great product no one wants to buy because it’s too expensive or too complicated.  It has no value.

Value comes from solving a problem at a price a customer is willing to pay.


BloggingGazelle is published daily by Shawn Carson

“Focus on cash flow, not profitability” – Guy Kawasaki

Profitability is one of those spreadsheet things that we can sit down and calculate.  The inputs are price and cost and we can play with the numbers until they look good enough for investors….

Of course it’s not that simple but cash flow kills the startup quicker than un-profitability.  Cash flow adds the time dimension to the financials.  Not all customers pay on time and some don’t pay at all.  And yet, your suppliers expect you to pay them on time and your employes, for some reason, want a paycheck every two weeks or so and your significant other would like you to contribute to the rent.  This is why Freemium business models can be risky.  You get traction with endusers but you can’t control when they decide to pay you.

Maintaining cash-flow can be a significant challenge and one that most CEO’s are not prepared to deal with.  It’s not fun to bug people about money.  But you need a process to do so and that means you need to measure it… every day!  Who is paying and who is not?  Those that aren’t, how long have they been deadbeats?

Another important measure is how many days it takes to close a sale.  A sales process gets more expensive the longer it takes for the customer to decide to buy.  You need to keep an eye on this.  Some sales channels close more effectively than others.  Excuses don’t matter…only cash.

Sometimes you have to write letters and make phone calls.  Here the thing:  you’re managing your cash flow and all of the businesses in your value chain, including customers, are managing theirs as well.  That means they are deciding who gets paid first and who get’s put off.  It’s the law of the squeaky wheel.

If you are blest enough to receive venture capital, you can also run out of cash.  Going back for more gets REALLY expensive.

Read Reality Check by Guy Kawasaki.

Blogging Gazelle is published daily by Shawn Carson

“Even if your idea is worth stealing, the hard part is implementing the idea, not coming up with it.” – Guy Kawasaki

There are two lessons here.  One is that VC’s consider patent protection a check box.  But a patent doesn’t ensure commercial success by any stretch.  What’s more is that it won’t keep anyone from stealing your idea if they really want to.  This is why Samsung and Apple are suing each other and they have a lot more money than you do.  Lawsuits are very expensive and out of reach unless you’re Apple or Samsung.  This doesn’t mean you shouldn’t protect your IP.  Just understand that a patent is not a key to your product’s success in the market.

The second lesson is this.  Sometimes people are introduced to us and want to talk about their business idea.  Immediately after the business cards are exchanged, out come the NDA’s (non-discloure agreements).  Well-meaning business attorneys encourage this.  But this is a bad move.  It shows a level of immaturity when it comes to pitching your idea.  And the bottom line is, business advisors, incubators, mentors, investors, bankers and pretty much anyone else who’s out there to help you – will not sign them.

As a startup, you need more help than you can imagine.  In order to acquire this help, you need to pitch your company… A Lot!  The secret stuff you can keep secret; like how you make your ‘secret sauce’ or who your investors are.  What business advisors are interested in is your business model and evidence your product works and that people will buy it.  There should be nothing confidential about this.  When it’s time to reveal your financial details or your design specs to a design partner, of course you want the protection of a good non-disclosure agreement.

Patents are a good thing and there is a time and a place for NDA’s but neither will protect you from competition.  And you still have to figure out how to make your stuff, sell your stuff and get paid.


Blogging Gazelle is published daily by Shawn Carson

“If you can begin to enjoy the process of building a startup rather than the outcome, you’ll be a better leader.” – Guy Kawasaki

I played football in high school and loved it.  Small and moderately skilled, I didn’t start till my senior year but I stuck with it from 6th grade on.    Football is a sport where if you’re into it just for playing in the games, there’s no value proposition.  It’s not worth all the work, pain and commitment for a few minutes of excitement each week.

I realized much later that it was the process that engaged me; the practice, the preseason, the teamwork ethic.  Being on the team had to be earned and it was the process that was rewarding, especially for those who would not go on to play in college.

Working with entrepreneurs is a similar experience.  The process is arduous and filled with challenges.  You have to love solving problems.  You have to take the resources available and figure out how to be successful.  And you will have to build your team.  And while you have to have an eye on the big picture, it’s the work one week at a time that breeds success.

Enjoying the process gives you a subtle edge on leadership.  You have an air of confidence that comes from moving in a direction.  People are drawn to that.

Read Reality Check by Guy Kawasaki


Blogging Gazelle is published daily by Shawn Carson

“The optimal number of mouths between a bootstrapper and her customer is zero” – Guy Kawaski

Bootstrapping is hard but it preserves equity and is perhaps your most efficient capital.  Some business are more conducive to boot strapping than others and it all hinges on how much personal equity and investment you have to put in.

Pharmaceuticals – definitely not a bootstrap model for a single entrepreneur.  CD Baby, on the other hand, was a great boot strapping success story for Derek Sivers.

Complex business models, those with a lot of companies involved in the decision making and sales process, cost a lot of money and time.  Sales people, distribution partners and retailers are all worthy  but they take their share.

For bootstrappers, it’s best to sell directly to the customer.

Read Reality Check by Guy Kawasaki


Blogging Gazelle is published daily by Shawn Carson

“I’m certain that the guys who made telegraphs didn’t think the telephone was all that good an idea, but it ended their livelihood” – Guy Kawasaki

With technology it’s hard to pick winners.  The touch screen changed everything.  The stylus…not so much.  And we’ll see about Bitcoin.  (Perhaps one sign of a successful technology is if it’s accepted by spellcheck.)

In any case, innovators are the ones who find new ways of doing things and the first to adopt them.  But they also have to be hyper aware of what’s coming because a new innovation could change things overnight.  The iPod owned 92% market share within 2 years of it’s introduction.  As a result nobody remembers the Sony Walkman, another great brand in the desert of broken opportunity.

There’s no profound wisdom here except to get your product into the market as quickly as possible and grab your share of the market.  Then sell, sell, sell.  You may become the next platform standard or you may only have a few months.


Blogging Gazelle is published daily by Shawn Carson



“It doesn’t matter when you go into beta testing – what matters is that you come out of beta testing.” – Guy Kawasaki

Shipping product is one of the biggest validations a startup can accomplish –  especially shipping the first product.

There’s a rule among sound technicians who run the sound systems for live music performances.  If you can’t hear a certain instrument or singer, the first reaction should NOT be to turn it up, but to turn everything else down.  As soon as you start turning stuff up, then you can;t hear other stuff and it needs to be turned up…and so on.

So it is with getting the product out of beta.  The more you test the more you find wrong and the more you want to fix.  Plus that time gives the engineers more time to release new features.  Instead of “turning up” all the features that need to be fixed, think first about those your first customers could do without and perhaps turn them off until the next release.

A minimally viable product is about deciding what NOT to ship.

Read “Reality Check” by Guy Kawasaki


Blogging Gazelle is published daily by Shawn Carson

Look for agnostics, ignore atheists” – Guy Kawasaki

In customer discovery, and in marketing your product, you will encounter people who are passionate about their existing solution.  That’s ok.  Loyalties develop and it’s really hard to break that relationship.  It will lead you to competition bashing and when you sling mud, everybody gets muddy.

You are better off seeking those who are still searching for a solution.  Maybe the existing solution is too expensive or maybe it is too loaded down with useless features.  Maybe it’s a different audience all together.

Southwest Airlines went to smaller cities and offered scaled down services for a specific type of traveler.  They flew one type of aircraft and made you pick your seat when you sat down.  They balanced with with a superior customer experience. Then they changed air travel all together.

Read “Reality Check” by Guy Kawasaki

Blogging Gazelle is published daily by Shawn Carson