Todd Pinkerton

 Dan Ariely, behavioraleconomist   *ok, so maybe it's still partly about economics. But a recent talk by Dan Ariely shed some light on the quirky, human aspects of our financial decision-making.  A few days ago I saw Dan Ariely speak at MIT as part of the Media Lab's Center for Future Banking.  The Center is sponsored by major banks like Bank of America,  so in that context Ariely spoke about his research and how it relates to the current financial problems we're facing.  Ariely is known as a 'behaviorial economist', which is to say he studies how people relate to money.  I've been following his work for a few years now, but recently he's been getting a lot more attention for his book Predictably Irrational and regular NPR radio series.  So Ariely's big thesis is that we incorrectly assume people behave rationally, always acting in their own self  interest and maximizing their personal gain. As a society we enact policies that assume these economic principles.  For example, we increase penalties as crimes get bigger, because we assume people will weigh the risk vs. reward and decide the increased jail time is not worth the payoff.  But reality is different. People do not always behave ...

In a typical startup, The Management (even if its just you) often wants to do lots of different things at the same time. This is difficult, because you have limited time, people, money, and other resources to carry out all these initiatives. Here are some ways you can get all those projects under control. Create a charter for each project. This is a simple 1-page document that simply describes why you're doing this project (the business goals). It also lists the project's Sponsor, the person you go to for money or resources and whose neck is on the line to get this project done. The charter lets everyone on the team know what the project is all about, and is the guiding force in making decisions. All the work done on the project should support the reasoning in this document. It also includes success criteria, so the team knows what the desired outcome is -- whether to lower the amount of time spent waiting for customer support, or increasing revenues by providing a new paid service for your users. This should be quantifiable and measurable, so you know whether the project has achieved success. ...

In my consulting career, I've been fortunate to see similar problems multiple times -- hopefully, I'll learn from each one and not make the same mistakes the next time I encounter that particular situation. One situation in particular involves a conversation with an entrepreneur, and it goes something like this : Entrepreneur: I have an idea for a web app that will revolutionize the [blank] industry, and make us bajillions! me: That's great! I can tell you are passionate and excited, and that's critical to your success. But do you have enough cash to pay for this coffee? Entrepreneur: Yes, we have some funding to get started. And I have a business plan explaining our strategy, and I have a powerpoint deck of what the product does. Me: That's even better! I'll have another espresso then. Entrepreneur: We'd like you to get us started on our website development. Here's our feature set for beta release. How long is this going to take? How many people, and what other stuff do we need? Me: Ummm....and that's where the conversation gets difficult. Because the business plan doesn't go into great detail about the product (it shouldn't), and the powerpoint slides have a bunch ...

I've long been a fan of Guy Kawasaki. From the early days as Apple evangelist, to his current role as early-stage VC, Guy has always had keen insight into technology and social trends. He's written a few books with some practical advice on building successful companies, drawing upon his own experiences in the trenches. Guy preaches what I have understood for a long time: the cost of starting a web company has dropped dramatically in the past 5 years or so, to the point where the economics of funding and launching a startup are drastically different. Old and busted: $5M in series A VC funding, years of technology development, then hopefully some revenue. New hotness: bootstrap on credit cards or angel investors for

I'm not a designer by training -- in fact, I can barely draw stick figures. But often on a project I need to start laying elements out on a page and seeing what works, and what doesn't belong. I used to do this on paper, which is quick and easy to iterate. Then, start mocking up the layout in HTML. All this is just to get the features and placement right, and leaving the visual design for a professional. The problem with this approach is, there's a huge gap between paper-prototype and HTML mockup. Paper is quick and easy, but not very compelling to look at. HTML looks better, but it's not very malleable -- once you place something, it's often a pain to move it around and get it right again. So I've started using a drawing tool to do these wireframes. I may sketch something out on paper first (because that is still the fastest), but before I share it with anyone, I'll open up my drawing program and draw boxes and text on the screen. I'm on a Mac, and so far the best tool I've found for this is OmniGraffle ...

I've been following Larry Lessig for several years now, and much like many of you I was... entranced by his writing and presentations. He has a speaking style that reminds me of an impassioned minister from my childhood, that of someone who cares deeply about what he is saying and can make his audience care too. After an unsettling outcome in Eldred v. Ashcroft, Lessig is now turning his attention to the problem of corruption -- of our political process, of policymakers, of drug salesmen and doctors -- and has dedicated the next ten years of his life to this problem. To Lessig, the other problems (like copyright extension in Eldred v. Ashcroft) won't be addressible until we remove the underlying corruption which plague our lives. So that's a bit of background to what I'm about to ask you to do -- go now and watch the 1 hr Google video presentation of his latest creation, "The Corruption Lecture". He claims its in alpha version, as I imagine it will be tweaked and modified extensively as he gets practice giving it again and again -- but it deserves a look now, as it is. Watch "Lessig on Corruption" on Google ...

Ok, so I'm a little late to the 4 Hour Work Week phenomenon. Tim Ferriss's book describes how to eliminate the distractions in our day, focus on the most important tasks, and outsource the mundane -- all in the name of freeing up more of your time to do the things you care about. I'm not sure just how accessible all his techniques are -- while I want to believe the 'muse' section, some of it reads like a get-rich-quick scheme -- I do believe that he's onto something. I find myself working more and more hours, harder and harder, in the hope of accomplishing more or meeting arbitrary deadlines and expectations. When the desirable thing to do is to create the most value from the least effort. Selling your time (as most jobs are) is not the way to personal freedom - whether you're making $7/hr flipping burgers or $300/hr writing legal documents. 4 Hour Work Week is one of those books in the vein of Getting Things Done and Never Eat Alone -- but 4HWW is uniquely compelling. While it's not a panacea, I bet you'll find something in it that applies to you. I plan ...

My friend Chuck studies entrepreneurship at MIT; he turned me on to http://startup-review.com, a blog specializing in case studies of internet companies. I haven't seen this approach anywhere else among the 'innovation' blogs out there, and the writing quality is pretty good. I read one in particular about Digg.com , whose lessons I plan to utilize in a upcoming project. Startup-review.com is blogged by Nisan Gabbay, a former VC. While I don't often agree with (or enjoy reading) the investor's perspective -- I'd much rather read a blog by one of the entrepreneurs "in the trenches" -- Nisan's writing is insightful and thorough. One good reason to read his analysis is that he promises to interview at least one member of the founding team at each company he profiles. This alone should set this blog apart from those which merely speculate. This kind of hard analysis of what attributes successful startups have is long overdue. Until we understand what factors contribute to success, we have less chance of getting there. My only criticism would be that he only profiles 'successful companies' -- those that have had an exit, or sustained high revenues, or become a well-known 'big brand'. ...