Personal

Interview highlights from ‘How your digital ecosystem can increase corporate innovation success by 10X’

Diagram showing a vertically integrated company with core and non-core offerings under one roof going to a digital ecosystem where the company focuses on its core assets and third parties build everything else.
Diagram showing a vertically integrated company with core and non-core offerings under one roof going to a digital ecosystem where the company focuses on its core assets and third parties build everything else. A better way to do corporate venture capital.

In August, I was fortunate to be interviewed by Omar Valdez-de-Leon of Latitude 55° Consulting in Copenhagen about a better way to do corporate venture capital by aligning with corporate innovation strategy and digital ecosystem goals. Omar is a known practitioner of digital transformation, having advised companies such as Ericsson, CGI, Honeywell, Cemex, Bosch, Vodaffone, Bell Canada, and more. He is an authority on digital ecosystems, authoring papers about how to develop digital ecosystems, organizing for digital, and the Digital Maturity Model.

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Should a startup founder agree to a non-compete?

Jennifer Rohleder's review of Gust Series Seed Term Sheet

Hell no. Are you kidding me?

Non-competes can advance the interests of investors to the detriment of entrepreneurs. That is why Founder Friendly Standard section 2.5 limits non-competes to the period of a founder’s work for the company, making it possible for a founder to earn a living in his/her industry after he/she leaves.

In 2019, I led a study where attorneys compared popular term sheets to Founder Friendly Standard. The below videos were produced during the study and originally posted on Quora. Other noteworthy outputs from the study include this infographic comparison and this attorney roundtable discussion.

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What are the odds of startup success by US metro area?

1 in how many companies achieves High-Growth status by metro area. Washington DC leads the way with 1 in 326.

District of Columbia leads with 1 in 326 odds of starting a High-Growth Company. Providence is the city with the worst odds—1 in 3,297.

1 in how many companies achieves High-Growth status by metro area. Washington DC leads the way with 1 in 326.

A High-Growth Company is defined as achieving $2M+ in revenue with 20% annualized growth over a 3-year period. This definition comes from page 10 of the 2017 Kauffman Index of Growth Entrepreneurship.

The data table below shows the odds of starting a High-Growth Company in each major city in America. This data serves as a baseline for the ecosystem innovation fund model that I introduced in Innovation Casino. I am sharing my research notes here so that you can incorporate this data into your angel investing or venture capital models.

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Manage 10 of the 20 top startup failure risks.

Founder Friendly Standard and customer-funding can help founders avoid “No market need, Running out of cash, Not the right team,” and 7 more reasons startups fail. 

Source: Top 20 reasons startups fail is from CB Insights. I added the check marks.

The above graph shows the top 20 reasons why startups fail from CB Insights. I marked up the graph with green checkboxes to show which risk factors customer-funding (also called bootstrapping) can help you manage. Orange checkboxes denote risk factors that Founder Friendly Standard can help manage. 

Risk Factor: No market need

If you’re bootstrapping, you’ll find out pretty quickly if there is no market need. Unlike your angel and VC-funded cohorts, you’ll be able to make fast pivots while they’re lining up their organizations’ change management strategies.

Risk Factor: Ran out of cash

If you are bootstrapping, you are financing innovation with organic cash flows. This is a key growth driver in the Credit Suisse Family 1000 research. If your company is controlled by its founders, you’re more likely to pace yourself, spending the money like it’s your own vs. your VC-funded competitors who are quick to spend (principal–agent theory).

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My 7 personal values

Katie, Eisaiah, and Maci in a sunflower field outside of Dallas in spring
Me, my wife (Katie), and our fur kid (Maci) – Photo by 📸 Cyndi Dawn, Dallas, 2022

What makes me tick

According to Joe Cohen, my personal coach for more than three years, personal values are a powerful tool for evaluating what’s important.

Here is a list of 7 of my personal values. Which ones do we share?

Invest long term

I focus largely on systems and how work is done rather than endlessly chasing individual tasks.

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I’ll be the Sean Parker to your Mark Zuckerberg

How the startup struggles of three entrepreneurs inspired Founder Friendly Standard

What follows is the story of the startup struggles that inspired Dan, Adam, and me to write Founder Friendly Standard in 2017 to help other entrepreneurs avoid our mistakes. The story is called, “I’ll be the Sean Parker to your Mark Zuckerberg.” It was originally written as a speech about entrepreneurship I delivered one time at Southern Methodist University (SMU) on March 2, 2018. 

Sean-Parker_Mark-Zuckerberg

When I was in my 20s, I met Gk Parish-Philp, a co-founder of DivX. I asked him how to get investors for my startup. He said, “You don’t want investors. They’ll take too much control.”

“That can’t happen to me,” I thought.

Years later, when I was getting forced out of a successful company that I started, I realized Gk was right.

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If you build it they’ll come moments

Baseball field at night being built

Baseball field at night being built

Lowell McAdam, the CEO of Verizon, told analysts, “This is going to be one of those if-you-build-it-they’ll-come moments…” He was explaining at the JP Morgan Technology, Media and Telecom conference why Verizon plans to keep investing in microcells and attaching them to buildings.

It’s the same reason John Donovan told analysts at the Citi Technology, Media and Telecommunications Conference why AT&T was boosting its network capacity. When network speeds get faster, new technologies spring up to consume that speed. According to Donovan, “5G is different because its performance is so much better that it’s going to enable a whole bunch of new-to-the-world use cases, whether it’s live maps, autonomous cars, virtual reality.” We are indeed witnessing an if-you-build-it-they’ll-come moment for telecom.

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Some time gaps need to be expanded, not closed

Only a few Dallas drivers follow at a two-second stopping distance. Maybe this is why I crawl past two and three accidents every day on my way to work.

Generally, my blog is about designing business-to-business (B2B) marketing that shortens the customer journey. This takes focus and mental energy. Accident-related traffic erodes mental energy. Today at Toastmasters, I raised the issues of following too closely and distracted driving.

My assignment from the competent communication manual was Speech 2: Organize Your Speech. Below is the transcript.

Speech: While Driving, Keep Distance

Thank you for that warm introduction, Mr. Toastmaster.

Good morning! Last week, I left my house at 6:15am to drive to our meeting. Five minutes into my drive, brake lights lit up all around me.

A firetruck was blocking the fast lane on the 30. Ambulance and police lights flashed. There was a car wreck. I got onto the 635 freeway. Five minutes on the 635 freeway and the scene repeated itself. I passed the second accident. As I was taking the off-ramp, I found myself admiring a dark green, sleek Jaguar – as it cut me off.

I pulled into the parking lot here at Denny’s and breathed a sigh of relief. This story happened last Wednesday, but it happens every day in Dallas.

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What’s the value of a head start?

Horse crossing finish line
A head start along with 1 – 2% productivity growth becomes a sizable advantage

Early this morning, I was running on the treadmill and listening to an economics lecture by professor Timothy Taylor.

He said the year 1870 kicked off our modern era of economic growth. If you take the Gross Domestic Product (GDP), a measure of productivity, of the richest countries in the world in 1870 and compare them to the poorest countries, the ratio is 9:1.

By 1990 and the ratio widens to 45:1.

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