Venture Rules from Kleiner Perkins

from:
http://www.briannorgard.com/?p=72

Venture Rules from Kleiner Perkins

I’ll admit, I am all too fascinated with Tom Perkin’s new boat. The interview he did on 60 minutes reinforced the fact that this machine is more than just a boat–it’s a work of art.

Of course, I grabbed his new book, Mine’s Bigger and happened upon a few of Kleiner’s famous laws of venture capital:

• When the money’s available, take it
• When they pass the hors d’oeuvres around, take two
• There is time when panic is the correct response
• Never sell unless there are two buyers
• If a decision is incredibly difficult, it doesn’t matter what you decide
• Make sure the dog wants to eat the dog food
• Market risk is inversely proportional to technical risk

You can’t be normal

from:
http://www.nivi.com/blog/article/normal

You can’t be normal

December 22, 2007

From Jeffrey Pfeffer’s book, The Human Equation:

“You can’t be normal and expect abnormal returns.”

How do you find a badass co-founder? Parts 1 and 2

from:
http://andrewchen.typepad.com/andrew_chens_blog/2007/03/how_do_you_find.html
http://andrewchen.typepad.com/andrew_chens_blog/2007/04/how_do_you_find.html
How do you find a badass co-founder?

Finding a co-founder is damn hard
In the last couple months, I’ve been keeping an open eye out on finding a high-quality co-founder for the startup I’m doing as part of my EIR gig. Ultimately, the scarcest commodity in the entrepreneurial community is NOT venture capital money – there are billions out there – but rather very high quality people. In particular, the highest quality people out there turn into co-founders, so that’s incredibly important.

In particular, a co-founder’s able to help balance you out, especially on mood. So if you are both in a room, the startup is on the rocks, and you say, “god we’re fucked!” then sometimes your co-founder will say, “well, why don’t we do X.” The same will happen vice-versa, which is great.

How many co-founders?
2-3 founders maximum. I think once you get beyond that, you’re diluting the group of talent in place. Ultimately, there’s a huge distinction between founders and employees, and you have to choose carefully. Beyond 3, the equity structure gets messed up too – you take a round or two of VC money and you own a very small piece of the company.

Of course there are exceptions like VMWare, which had 6 co-founders that all did well. But the norm seems closer to 2-3.

What defines a good co-founder?
Short answer is, I have no idea

Long answer is, I’ve done a lot of talking and thinking about the issue, and I think I know what is good for me (and maybe me only). Ultimately, you are looking for a guy with the following:

Complimentary in skills, but from the same cloth in attitude and culture

On the skills front, because I’m more of a business-y person, I’m looking for someone who is very technical. Also, because I’m more of an unstructured creative thinker, it might be useful to meet someone who is more structured and detail-oriented. A big piece of this is also a Mr. Inside versus Mr. Outside designation. Who’s in charge of talking to customers, partners, and potential investors? That might be one guy, whereas the other is more focused on internal operations. This might hold true even as the company scales up.

The other side, which is about attitude and values, is much more difficult. If you are looking to found a company, and you have an idea that you’re driving, that says a lot of things about you already. You’re probably driven, have a vision for where you want things to go, and are self-motivated enough to get things off the ground. You may also be someone who can convince people to follow you, or give you money, or whatever.

My questions for values/culture
For me, I’ve been thinking about a series of questions related to culture and values. Here are a selection of them:

• Let’s say you wanted to start a new company? How would you do that?
• Tell me about a major disagreement you had recently – describe what happened?
• How would you approach hiring people?
• What’s your long-term goal with your career? Where do you want to be in 20 yrs?

… and etc. Lots of questions you’d ask an employee, of course.

I think you’d also ask a couple questions as you observe the guy:

• If you put them in a room with 5 peers, would they emerge with the 5 guys signed up to follow them?
• Would you feel comfortable introducing them to everyone you know?
• If you say something they disagree with, how long does it take before they push back? How hard do they push back?
• If you guys disagree on their side of the complimentary skills, what happens? What happens if it’s on your side of the domain expertise?

Peoples’ views on this are going to be different, but in general I’m going to be looking for the guy who can sign up the 5 guys in a room, who’s great to introduce to everyone at all levels, who pushes back hard and immediately, and doesn’t care if its on your side of the skillset or theirs. I think all of these things define a strong leader who’s a peer, rather than an employee.

I’ll write more on this topic later, as it’s a critical one, but would appreciate comments in the meantime.

How do you find a badass co-founder, Part 2

I had previously written about How do you find a badass co-founder? If you haven’t read the article, or don’t remember at all, I encourage you to back up and spend 5 minutes to read it.

Today, I wanted to extend those comments further, now that I’ve put in more thought to the subject.

So I want to return my description before of a good co-founder:

Complimentary in skills, but cut from the same cloth in attitude and culture

Now interestingly enough, this sort of assumes that YOU are a good founder. In fact, you may not be, and when I define it in a relative way like above, it doesn’t mean much. So let’s return to some of the same factors that make people good founders.

The minimum bar for anybody
In general, there are a couple things I look for within people, regardless of whether or not they are technical or business-y or whatever. Here’s a quick list of attributes:

• Super smart
• Hungry and scrappy (cheap!!!)
• Honest and direct (no passive aggressive people allowed)
• Doesn’t want to be famous (this creates incentive misalignment)
• Assertive and is a natural leader

If you don’t have these in spades, I’m generally uninterested. Obviously these are completely arbitrary, and you’ll want to come up with your own list, but these are some of my prioritizations.

Founders versus executives
Ultimately, there’s a central conflict of what you want out of a founder, whether they are business-y or technical in nature. In general, you want people who are great at execution early on, and who are very hands on with their business. These are great entrepreneurs. The problem is that as time goes on, even when you start raising money, you start to need a different skillset. Usually these skills are more soft skills, and people-oriented in nature. Some folks suck at this, and can’t scale. Here’s what you want in a technical person, when you first start out:

Super hacker

• Really scrappy, fast coder
• Super smart
• Only needs pizza and coke to survive

But at the same time, as the company grows, then you need the same person to grow up into something else:

CTO

• Really scrappy leader of people
• Super smart, and also super communicative
• Only needs pizza and coke to survive

It may be clear to some people that these skillsets often are inversely correlated. Oftentimes, the failure to evolve one skillset into the other leads to founders getting shuffled aside. The truth of it is, as the company grows (even to a state where VCs need to be pitched), people skills become very important, and being assertive and having leadership becomes very important.

What about the business guys?
I’m not letting the business folks off the hook either. Early on, having business guys are very awkward IMHO. You don’t really need Sales or Finance functions, since the early focus is on Marketing and Product. Thus, you’re looking for someone early on who can be a product jack-of-all-trades:

Super product guy

• Defines product, market, and customers
• Jack-all-trades on finance/legal/incorporation and other random bits
• Great at outbound work (customers/investors/etc)
• Might throw in some time on product design and code
• Great at selling ice to Eskimos

Another way to say this is that early on, the job of the business guy is to support the technical guy and help him figure out what to build. Anything other than that is often superfluous. But after a while, you need something else:

CEO

• Leads through company vision
• Puts together team of great executives
• Great at outbound work (customers/investors/etc)
• Hands over all product to product teams
• Great at selling ice to Eskimos

This is also very hard for the early startup CEO, because they are often the initial product manager while the company is a one-product (or in fact, one-feature) company. But once you get past that point, the power becomes much more indirect, and it’s very hard for some people to let go.

Is he Mr. Right? or Mr. Right now?
It’s often very very tempting to just gather your friends and have a bunch of people have at it. The problem is, you end up with one or two strong people, followed by a hanger-on. That’s not what you want.

That’s not to say that working with friends is a bad idea – in fact, you really want someone you can trust, but make sure the skills are there too.

Instead of trying to finding someone who just happens to code well, but could never scale, I think it behooves any strong founder to look at the team they’re building around them and ask, is this a A team, or am I putting together a B or C team just because that’s all I have access to? And if it’s the latter, it probably makes sense to reset, go meet a bunch of people, and start over. Remember:

Giving an incompetent friend/acquaintance 50% of the company and then working them out later is NOT an option.

Questions to ask
So when you’re evaluating your co-founder, I’d ask the following questions of yourself:

• Who are your other choices? (If none, go find some)
• Given a list of X people, where do they sit in terms of skill level? (Hopefully at the top)
• Where are the holes in their skills? (Hopefully they are well-understood)
• How well will they scale as the company gets bigger?
• Would you trust them with direct reports? Would you trust them as CEO?
• Who’s someone you want to impress? Would you let them do a 1:1 with your co-founder?
• Could you imagine reporting to them?

I’d ask these questions carefully, and figure out if they make sense for the people you’re selecting.

Next time, I’ll expand more on the topic of interviewing potential co-founders, and/or add some specifics on where to meet these guys (if you haven’t already).

10 tips for meeting people at industry events

from:
http://andrewchen.typepad.com/andrew_chens_blog/2007/02/how_to_meet_peo.html

10 tips for meeting people at industry events

As someone who’s brand new to Silicon Valley, one of the most important, yet difficult, things to do is to meet new people. The best ways to meet people in the Bay Area is to have grown up here, gone to Stanford or Berkeley, to work at a company or in role where you meet lots of new people, or any combination thereof. For me, unfortunately, I don’t have any of these. All I have are industry events and conferences.

Conferences are a real pain in the ass – there’s a ton of people, it’s loud, and it can be intimidating. It’s particularly hard if you don’t feel like you belong – either you’re trying to break into an insular crowd, or you’re just starting to learn about an industry.

Here are some tips I’ve learned from going to half a dozen such events in the last couple weeks:

1. Use the time before the conference wisely
The hardest thing in the world is when you don’t know anyone at a conference and you’re expected to fit right in. If you can, use the time before the conference to ask people you’ve met whether or not they’re going to go. If so, that’s great! You can tag along with them and they can introduce you to a couple people.

Another option is to e-mail people that are working at the event, and let them know that you’re new. If they’re nice people, when you see them at the event, they’ll introduce you to a couple people. Either of these options should result in 2 or 3 introductions at the very minimum.

One incredibly important way to use pre-event time is to create a little sound bite about yourself. When you say, “Hi, I’m Joe” you want to be able to follow up with a 30 second, 60 second, or 2 minute blurb about yourself and your interests, depending on the context and interest. You may want to make it a little punchier than usual, and get to the salient points quickly. You need to help other people size you up and fit you into their universe as fast as possible.

2. Arrive early, and get some 1:1 time
When there’s lots of people, and circles of 4 or 5 people that all know each other form, it’s tough to break in. The best time to meet people is when there isn’t much competition, and you can have a quick conversation to introduce yourself. So show up early, find someone who looks bored (checking their phone or whatever), and introduce yourself. That way, you’ll have a tiny bit of familiarity that you can reuse later on in the event.

Another good thing to do, if you show up early, is to catch a couple minutes with the speakers, organizers, or panelists. They’re often milling around, waiting for something to happen, and you have a chance to speak to some of the more well-informed and well-connected people there.

3. Sit next to interesting people, and introduce yourself
There are several bad places to sit during a conference. One is at the very front, where people get intimidated by the speakers, so that the seats are usually empty. Instead, do yourself a favor – sit in the middle of one of the rows, and introduce yourself to the people to the left of you or to the right of you, as the event starts. This is another example of the easier 1:1 interactions that happen because of your captive audience.

Sitting next to people who aren’t interesting, or don’t want to talk? That’s easy, just go to a different seat. If you’d rather be polite, just excuse yourself to go to the bathroom and then come back to sit in a different area. The best part of multi-session conferences is that you can constantly mix with different crowds as you enter and leave the rooms.

4. Break into circles of people
By far, the hardest part of a conference is during the “official” mixers. Oftentimes, you have groups of people who are all friends form, and they talk to each other intensely. If they are nice, they’ll welcome new people in, introduce themselves, and help you join a conversation. Oftentimes, they’ll be so engrossed in a inside baseball sort of conversation that it’s hard to break into a circle and start talking.

The best way to resolve this is to look for easy circles to join. This can be made up of people you’ve met earlier in the conference, so you can catch up and ask them how they’re enjoying things. Another option is 1 or 2 people loitering at the edges, who aren’t part of the action. You can make your own circle that way. Another is to watch for groups that have huge holes, with people standing in a U shaped pattern. You can jump in and fill the circle, and try and jump into the conversation.

How do you jump into a conversation? A question is usually a good start, or an observation if they are talking to something accessible. That way, you can shift some attention towards you, and start participating rather than being a bystander.

That said, if you join a circle, don’t understand anything they’re saying, feel free to jump in and out – don’t feel bad about leaving the group and finding another one that’s more approachable.

5. Invite people to talk to you
Once you’re in a circle, you should make sure to invite people to talk to you. So make a hole for people to come join you, if you can, by standing somewhat perpendicular to the other people. And if people come by and stand there, stop the conversation and introduce yourself. That way it’ll be easy for people to join the conversation, rather than feeling excluded.

6. Bring business cards, and ask for business cards
People go to industry events to meet people, period. So bring your business cards, and do the “card blast” when appropriate. And ask for peoples’ cards after you talk to them for a couple minutes. Don’t be bashful, that’s what these industry events are about. And remember to bring enough cards based on the context of the conference. For a 2 day conference, you’ll want to bring a fistful, rather than a 5 or 6, like you might usually do. Sometimes it might make sense to keep a bunch in your car, or your bag, so you can refill if necessary.

On the other hand, asking for business cards is helpful too, but only if you remember who the people are. If you just grab random ones, it’s a waste of time – instead, focus on having quality, interesting conversations with people, so that it’s memorable enough to associate with a card.

7. After the conference is as important as event itself
After you leave the conference, you’ll often have a bunch of business cards and maybe even a member directory of all the people that attended. Remember to follow up there! Send an e-mail, summarize a point or two in the conversation you had – hopefully a memorable one – and ask for whatever followup is appropriate. That might be a phone call, or a coffee, or just a “let’s keep in touch.” Put them into LinkedIn, or your address book, so that you keep some record of it. LinkedIn is great because it also helps you remember a particular person’s professional relevance to you – otherwise, use Outlook’s address book to annotate comments or notes so you won’t forget months down the line.

8. Learn to spot VIPs
One fun trick is to learn how to spot the VIPs at a conference. Oftentimes, this is very hard because they look like all the other conference goers. But there are ways to tell – first off, they may know the speaker well. So if the speaker is having a 1:1 conversation with random dude X, maybe you want to talk to random dude X to figure out what he’s about – he’s probably a friend or affiliated with the speaker, which is always great.

Small social cues are great to pick up and learn as well – at the airport, the guy in the track suit, blackberry, and small bag is often a senior executive who’s learned how to optimize for travel, whereas a young guy who’s overpacked is a complete corporate newbie. Learning small cues like that can be important.

9. Don’t overdo the conference circuit
Going to events and conferences are nice, but remember that at the end of the day, DOING is more important than NETWORKING. Other than the speakers, the most senior folks are generally not at conferences – they are busy doing things, and they can usually talk to whoever they want. So in general, industry events are usually populated by newbies and marginally senior folks – it’s an alliance of people who aren’t quite senior enough to skip the networking thing altogether.

So the important part is to do enough interesting things outside of conferences, and realize that networking is an investment of time – you still need to turn that potential energy into kinetic energy.

10. And finally, have fun! It’ll get easier, I promise
The first couple times going to conferences and forcing yourself into awkward social situations often isn’t fun. But it gets a lot more fun once you meet a couple people, find yourself talking to the same folks, and generally insinuating yourself into the club. It’s a great experience to meet super smart people, and very rewarding.

How to hire the best people you’ve ever worked with

from:
http://blog.pmarca.com/2007/06/how_to_hire_the.html

How to hire the best people you’ve ever worked with

• Jun 6, 2007

There are many aspects to hiring great people, and various people smarter than me have written extensively on the topic.

So I’m not going to try to be comprehensive.

But I am going to relay some lessons learned through hard experience on how to hire the best people you’ve ever worked with — particularly for a startup.

I’m going to cover two key areas in this post:

Criteria: what to value when evaluating candidates.

And process: how to actually run the hiring process, and if necessary the aftermath of making a mistake.

Criteria first.

Lots of people will tell you to hire for intelligence.

Especially in this industry.

You will read, hire the smartest people out there and your company’s success is all but guaranteed.

I think intelligence, per se, is highly overrated.

Specifically, I am unaware of any actual data that shows a correlation between raw intelligence, as measured by any of the standard metrics (educational achievement, intelligence tests, or skill at solving logic puzzles) and company success.

Now, clearly you don’t want to hire dumb people, and clearly you’d like to work with smart people.

But let’s get specific.

Most of the lore in our industry about the role of intelligence in company success comes from two stratospherically successful companies — Microsoft, and now Google — that are famous for hiring for intelligence.

Microsoft’s metric for intelligence was the ability to solve logic puzzles.

(I don’t know if the new, MBA-heavy Microsoft still does this, but I do know this is how Microsoft in its heyday worked.)

For example, a classic Microsoft interview question was: “Why is a manhole cover round?”

The right answer, of course, is, “Who cares? Are we in the manhole business?”

(Followed by twisting in your chair to look all around, getting up, and leaving.)

Google, on the other hand, uses the metric of educational achievement.

Have a PhD? Front of the line. Masters? Next. Bachelor’s? Go to the end.

In apparent direct contraction to decades of experience in the computer industry that PhD’s are the hardest people to motivate to ship commercially viable products — with rare exception. (Hi, Tim! Hi, Diego!)

Now, on the one hand, you can’t question the level of success of either company.

Maybe they’re right.

But maybe, just maybe, their success had a lot to do with other factors — say, huge markets, extreme aggressiveness, right time/right place, key distribution deals, and at least in one case, great products.

Because here’s the problem: I’m not aware of another Microsoft that’s been built by hiring based on logic puzzles. And I’m not aware of another Google that’s been built by hiring PhD’s.

So maybe there are other hiring criteria that are equally, or more, important.

Here’s what I think those criteria are.

First, drive.

I define drive as self-motivation — people who will walk right through brick walls, on their own power, without having to be asked, to achieve whatever goal is in front of them.

People with drive push and push and push and push and push until they succeed.

Winston Churchill after the evacuation of Dunkirk:

“We shall not flag or fail. We shall go on to the end, we shall fight in France, we shall fight on the seas and oceans, we shall fight with growing confidence and growing strength in the air, we shall defend our Island, whatever the cost may be, we shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender.”

That’s what you want.

Some people have it and some people don’t.

Of the people who have it, with some of them it comes from guilt, often created by family pressure.

With others, it comes from a burning desire to make it big.

With others, it comes from being incredibly Type A.

Whatever… go with it.

Drive is independent of educational experience, grade point averages, and socioeconomic background.

(But Marc, isn’t a 4.0 GPA a sure sign of drive? Well, it’s a sign that the person is driven to succeed on predefined tests with clear criteria and a grader — in an environment where the student’s parents are often paying a lot of money for the privilege of having their child take the tests. That may or may not be the same thing as being driven to succeed in the real world.)

Drive is even independent of prior career success.

Driven people don’t tend to stay long at places where they can’t succeed, and just because they haven’t succeeded in the wrong companies doesn’t mean they won’t succeed at your company — if they’re driven.

I think you can see drive in a candidate’s eyes, and in a candidate’s background.

For the background part, I like to see what someone has done.

Not been involved in, or been part of, or watched happen, or was hanging around when it happened.

I look for something you’ve done, either in a job or (often better yet) outside of a job.

The business you started and ran in high school.

The nonprofit you started and ran in college.

If you’re a programmer: the open source project to which you’ve made major contributions.

Something.

If you can’t find anything — if a candidate has just followed the rules their whole lives, showed up for the right classes and the right tests and the right career opportunities without achieving something distinct and notable, relative to their starting point — then they probably aren’t driven.

And you’re not going to change them.

Motivating people who are fundamentally unmotivated is not easy.

But motivating people who are self-motivated is wind at your back.

I like specifically looking for someone for which this job is their big chance to really succeed.

For this reason, I like hiring people who haven’t done the specific job before, but are determined to ace it regardless.

I also like specifically looking for someone who comes from some kind of challenging background — a difficult family situation, say, or someone who had to work his/her way through school — who is nevertheless on par with his/her more fortunate peers in skills and knowledge.

Finally, beware in particular people who have been at highly successful companies.

People used to say, back when IBM owned the industry: never hire someone straight out of IBM. First, let them go somewhere else and fail. Then, once they’ve realized the real world is not like IBM, hire them and they’ll be great.

And remember, an awful lot of people who have been at hugely successful companies were just along for the ride.

Career success is great to look for — but it’s critical to verify that the candidates out of hugely successful companies actually did what they claim in their roles at those companies. And that they really get it, that the real world is a lot tougher than being IBM in the 80’s, or Microsoft in the 90’s, or Google today.

Second criterion: curiosity.

Curiosity is a proxy for, do you love what you do?

Anyone who loves what they do is inherently intensely curious about their field, their profession, their craft.

They read about it, study it, talk to other people about it… immerse themselves in it, continuously.

And work like hell to stay current in it.

Not because they have to.

But because they love to.

Anyone who isn’t curious doesn’t love what they do.

And you should be hiring people who love what they do.

As an example, programmers.

Sit a programmer candidate for an Internet company down and ask them about the ten most interesting things happening in Internet software.

REST vs SOAP, the new Facebook API, whether Ruby on Rails is scalable, what do you think of Sun’s new Java-based scripting language, Google’s widgets API, Amazon S3, etc.

If the candidate loves their field, they’ll have informed opinions on many of these topics.

That’s what you want.

Now, you might say, Marc, that’s great for a young kid who has a lot of spare time to stay current, but what about the guy who has a family and only has time for a day job and can’t spend nights and weekends reading blogs and staying that current?

Well, when you run into a person like that who isn’t current in their field, the other implication is that their day job isn’t keeping them current.

If they’ve been in that job for a while, then ask yourself, is the kind of person you’re looking for really going to have tolerated staying in a day job where their skills and knowledge get stale, for very long?

Really?

Remember — because of the Internet, staying current in any field no longer costs any money.

In my experience, drive and curiosity seem to coincide pretty frequently.

The easiest way to be driven is to be in a field that you love, and you’ll automatically be curious.

Third and final criterion: ethics.

Ethics are hard to test for.

But watch for any whiff of less than stellar ethics in any candidate’s background or references.

And avoid, avoid, avoid.

Unethical people are unethical by nature, and the odds of a metaphorical jailhouse conversion are quite low.

Priests, rabbis, and ministers should give people a second chance on ethics — not hiring managers at startups.

‘Nuff said.

One way to test for an aspect of ethics — honesty — is to test for how someone reacts when they don’t know something.

Pick a topic you know intimately and ask the candidate increasingly esoteric questions until they don’t know the answer.

They’ll either say they don’t know, or they’ll try to bullshit you.

Guess what. If they bullshit you during the hiring process, they’ll bullshit you once they’re onboard.

A candidate who is confident in his own capabilities and ethical — the kind you want — will say “I don’t know” because they know that the rest of the interview will demonstrate their knowledge, and they know that you won’t react well to being bullshitted — because they wouldn’t react well either.

Second topic: process — how to run the hiring process.

First, have a written hiring process.

Whatever your hiring process is — write it down, and make sure everyone has a copy of it, on paper.

It’s continually shocking how many startups have a random hiring process, and as a result hire apparently randomly.

Second, do basic skills tests.

It’s amazing how many people come in and interview for jobs where their resume says they’re qualified, but ask them basic questions about how to do things in their domain, and they flail.

For example, test programmers on basic algorithms — linked lists, binary searches.

Just in pseudocode — it doesn’t matter if they know the relevant Java library calls.

It does matter if they are unable to go up to the whiteboard and work their way through something that was covered in their first algorithms course.

A lot of people come in and interview for programming jobs who, at their core, can’t program.

And it’s such a breath of fresh air when you get someone who just goes, oh yeah, a linked list, sure, let me show you.

The same principle applies to other fields.

For a sales rep — have them sell you on your product all the way to a closed deal.

For a marketing person — have them whiteboard out a launch for your new product.

Third, plan out and write down interview questions ahead of time.

I’m assuming that you know the right interview questions for the role — and frankly, if you don’t, you probably shouldn’t be the hiring manager for that position.

The problem I’m addressing is: most people don’t know how to interview a candidate.

And even people who do know how, aren’t necessarily good at coming up with questions on the fly.

So just make sure you have questions planned out and assigned to each interviewer ahead of time.

I do this myself — always enter the room with a list of questions pre-planned — because I don’t want to count on coming up with them on the fly.

The best part is that you can then iteratively refine the questions with your team as you interview candidates for the position.

This is one of the best ways for an organization to become really good at hiring: by iterating the questions, you’re refining what your criteria are — and how you screen for those criteria.

Fourth, pay attention to the little things during the interview process.

You see little hints of things in the interview process that blow up to disasters of unimaginable proportions once the person is onboard.

Person never laughs? Probably hard to get along with.

Person constantly interrupts? Egomaniac, run for the hills.

Person claims to be good friends with someone you know but then doesn’t know what the friend is currently doing? Bullshitter.

Person gives nonlinear answers to simple questions? Complete disorganized and undisciplined on the job.

Person drones on and on? Get ready for hell.

Fifth, pay attention to the little things during the reference calls.

(You are doing reference calls, right?)

Most people softball deficiencies in people they’ve worked with when they do reference calls.

“He’s great, super-smart, blah blah blah, but…”

“Sometimes wasn’t that motivated” — the person is a slug, you’re going to have to kick their rear every morning to get them to do anything.

“Could sometimes be a little hard to get along with” — hugely unpleasant.

“Had an easier time working with men than women” — raging sexist.

“Was sometimes a little moody” — suffering from clinical depression, and unmedicated.

You get the picture.

Sixth, fix your mistakes fast… but not too fast.

If you are super-scrupulous about your hiring process, you’ll still have maybe a 70% success rate of a new person really working out — if you’re lucky.

And that’s for individual contributors.

If you’re hiring executives, you’ll probably only have a 50% success rate.

That’s life.

Anyone who tells you otherwise is hiring poorly and doesn’t realize it.

Most startups in my experience are undisciplined at fixing hiring mistakes — i.e., firing people who aren’t working out.

First, realize that while you’re going to hate firing someone, you’re going to feel way better after the fact than you can currently imagine.

Second, realize that the great people on your team will be happy that you’ve done it — they knew the person wasn’t working out, and they want to work with other great people, and so they’ll be happy that you’ve done the right thing and kept the average high.

(The reason I say “not too fast” is because your great people are watching to see how you fire people, and if you do it too fast you’ll be viewed as arbitrary and capricious — but trust me, most startup managers do not have this problem, they have the opposite problem.)

Third, realize that you’re usually doing the person you’re firing a favor — you’re releasing them from a role where they aren’t going to succeed or get promoted or be valued, and you’re giving them the opportunity to find a better role in a different company where they very well might be an incredible star.

(And if they can’t, were they really the kind of person you wanted to hire in the first place?)

One of the good things about our industry is that there are frequently lots of new jobs being created and so you’re almost never pushing someone out onto the street — so don’t feel that you’re dooming their families to the poorhouse, because you aren’t.

You’re not that important in their lives.

I can name a number of people I’ve fired or participated in firing who have gone on to be quite successful at other companies.

They won’t necessarily talk to me anymore, though .

Finally, although this goes without saying: value the hell out of the great people you do have on your team. Given all of the above, they are incredibly special people.

Hiring Salespeople

from:
http://www.terrygold.com/t/2006/04/hiring_salespeo.html

Hiring Salespeople

I’ve been asked by an entrepreneur friend to talk about hiring sales people. My friend, like a lot of high-tech entrepreneurs, is a technical person who also has the role of CEO and Sole Salesperson, and they feel it is time for them to “bring in a professional” to “take the company to the next level.”

Here’s where I think a lot of entrepreneurs, particularly those that are bootstrapping, make a big mistake. They hire a VP of Sales and Marketing, capable of growing a large sales force. Maybe. The New VP spends a lot of time thinking about Positioning. They talk about Executive Selling, Leadership Alignment and Developing Value Propositions. What they probably won’t talk about during the interview or after being hired is how many phone calls they are going to make to new prospects every day. When the sales don’t happen, it’s a product or market problem. (They say)

If you are leading a Rocket-fueled, VC-Backed Start-Up, maybe it makes sense to go right for the leadership who will then build out a real sales force. But if you are just hoping to get some sales help so that you can focus on the job of building your business, then you need someone who can first and foremost, SELL STUFF.

I’m not an expert at hiring sales people, but I can tell you what doesn’t work from experience and I can pass on some things I’ve observed about the people who can sell.

The best sales people jumped right in soon after they arrived.  My company sells a complicated product so new people do have a lot to learn, but the best people were on the phone and planning visits pretty quickly.  If they are too afraid to make the calls then they may not have what it takes.  The biggest failures obsessed over learning every last detail of the product and industry at the expense of just getting out there and working with customers.  The successful people were quick to admit that they weren’t experts yet and they were good at getting other people (engineers, sales support, the CEO) to help them fill in the gaps.  And the successful sales people don’t try to fake it with customers.  We sell to smart, technical people and they can smell a fake a mile away.

Great sales people know how to establish relationships, and it starts before they even walk in the door for the interview.  They try to get introductions from people we know and respect.  They research our company and even if they are from outside the industry, they walk in with a decent knowledge of what we do.  They try to connect with everyone that they meet here, starting with the person who greets them at the front door.  (As a sales person, you need to understand that EVERYONE you talk to at a company has the potential to kill your sale.  If you act like a jerk in the lobby, you’ll never get to the board room.)

I have said that one of our best sales people walks the line between persistence and annoyance.  I’ve never had a complaint from a customer saying he was pushing too hard, but I know that he is not afraid to tell a customer that it is time to sign.

The hard part about hiring sales people is that if they are any good at all, they will generally interview well.  If they can’t sell themselves well, how are they going to sell your product?  If they don’t do a good job preparing for the interview, if they haven’t researched your company and if they haven’t cared enough to find an introduction (and this is their career they are pitching) then they probably aren’t going to do a good job selling your product.

Someone said “Past performance is the best indicator of future success”.  If a sales person is unemployed then they need to have a really good reason for it, like they made so much money in their last job that they quit to travel the world.  Companies don’t usually fire or lay off great sales people so you have to be skeptical when a sales person is not employed I think.  I know, everyone experiences set backs and may find themselves in tough positions, I’m just saying you need to be very thoughtful about this.  (One of our best sales people was unemployed when we hired them, so there are exceptions to the rule.)

My entrepreneur friend is at a critical point and I see a lot of companies get stuck here.  It’s easy to hire someone with a great resume who is more interested in managing than doing.  In a small company you just can’t afford that.  The one nice thing about sales people is that there is an objective measure of their success.  They sell stuff.  It may take a while for them to get started, but at some point they have to sell.

Ken Hess’s Checklist for Building a Company

from:
http://www.nivi.com/blog/

Ken Hess’s Checklist for Building a Company

October 25, 2007

There’s a lot of wisdom in Ken Hess’s Remarks to Software Forum Dinner Meeting (from 1997!):

Ken’s Checklist for Building a Company

This checklist is about getting the odds in your favor. Fitting together all these pieces of the puzzle is what separates a good business plan from mere speculation.

1. Are you focused on creating the product?

2. Are you the world expert in your product niche?

…

4. Do you have the force of will to make things happen regardless of the inevitable obstacles?

…

6. Are you spending money wisely?

Then once you’ve shipped, continue to ask:

7. Will today’s task contribute to or diminish the organization’s focus?

8. How can I broaden the market?

9. Is the company’s scale appropriate to the task?

10. Is it time to sell?

Another snippet from the talk:

Spend Money Wisely

Profit. A bootstrap must have a positive cash flow (by definition), even though this is much less important to someone purchasing the company than sales growth.

“Just say NO” to things that aren’t profitable — and be happy

…

Develop products that will be profitable. A give away, market share strategy is inappropriate for a bootstrap.

…

Play on being small, “We don’t have a budget for that…”

…

Many people inside and outside the company want to spend YOUR money because of what it does for THEM. You must ask what spending the money does for YOU.”

Dating…er…Fundraising Etiquette

from:
http://altgate.typepad.com/blog/2007/07/datingerfundrai.html

Dating…er…Fundraising Etiquette

I’ve always been surprised (and somewhat dismayed) at how unpredictable the fundraising / investing process is.  I have been party to many conversations with entrepreneurs along the lines of:

Me:  What happened with XYZ Capital?

Entrepreneur:  Dunno.  They said they were really interested, but it’s been a week and I haven’t heard anything.

Me:  So are you going to call them?

Entrepreneur:  Ya, but I’m going to wait a few days…don’t want to seem desperate.

The funny thing is that I’ve also had many conversations w/ VCs (present company excluded) with the following gist:

Me:  How’d your meeting w/ NewCo Inc. go?

VC:  It was interesting, but I think they’re too [early/late/big/small/whatever].

Me:  So are you going to follow up with them?

VC:  Ya, but I’m going to wait a couple of weeks to let them down so it looks like we did some diligence.

It reminds me of that scene from the movie Swingers!  The more I think about it, the more fundraising sounds like dating.  So with that in mind, I will proffer my “dating…er…fundraising etiquette tips” (which I shamelessly plagiarized and modified from some website on dating):

• [Fundraising] is about two [firms] coming together to see whether they are compatible and then enjoying each other’s company so that they may move towards forming a close bond. In doing so there are things that you should remember. [Fundraising] should always be fun and it is as much your responsibility to ensure it is. When you are [fundraising] ensure that you do everything you can to make the meeting enjoyable.
• You will always turn up for a [meeting] unless you have given enough time for it to be canceled. Standing someone up is not acceptable adult behavior, and shows contempt for your prospective [investor] by wasting their time. This kind of arrogance is detestable.
• You will not be opinionated or arrogant on a [pitch] and you will try to avoid discussions on politics and religion in the early stages. You may be very opinionated on certain topics and maybe for good reason but that does not mean you are right. You will come across badly if you act like this. Arrogance makes most people feel uncomfortable so avoid at all costs.
• You will be a listener and not talk your [prospect] to death, particularly if you are [the entrepreneur]. Listening shows interest and the ability to compromise. If your idea of a [pitch] is talking about yourself and your opinions all [day] then do the world a favor and stay at home alone.
• If you don’t like your [prospect] then don’t be quick to give them a hard time. They are human beings like you and they deserve always to be treated with respect. You can and will have a good time with someone you are not attracted to, so treating someone badly because they are not your type is not acceptable behavior. Rudeness is not allowed.
• You will never tell lies on a pitch to promote yourself because you WILL get found out. Maybe not now but probably when it is too late. Tell the truth or avoid a subject if necessary.
• You will call when you promise to call and not keep someone hanging on. If you don’t like your [prospect] then don’t falsely promise anything or leave the door open. Again this shows a great disrespect for your [prospect] if you do.

Luck and the entrepreneur, part 1: The four kinds of luck

from:
http://blog.pmarca.com/2007/08/luck-and-the-en.html

Luck and the entrepreneur, part 1: The four kinds of luck

• Aug 14, 2007

In the last few weeks, I’ve been reading huge stacks of books on the psychology of creativity and motivation — which is the reason for the relative scarcity of substantive blog posts. Said post situation will be remedied shortly, by a series of posts on — surprise! — the psychology of creativity and motivation.

But first, to complement my post on age and the entrepreneur from a few days ago, this post begins a series of occasional posts about luck and the entrepreneur.

Luck is something that every successful entrepreneur will tell you plays a huge role in the difference between success and failure. Many of those successful entrepreneurs will only admit this under duress, though, because if luck does indeed play such a huge role, then that seriously dents the image of the successful entrepreneur as an omniscient business genius.

Moreover, some of those people would shrug and say that luck is simply out of your hands. Sometimes you have it, sometimes you don’t. But perhaps there’s more to it than that.

Dr. James Austin, a neurologist and philosopher (!), wrote an outstanding book called Chase, Chance, and Creativity — originally in 1978, then updated in 2003. It’s the best book I’ve read on the role of luck, chance, and serendipity in medical research — or, for that matter, any creative endeavor. And because he’s a neurologist, he has a grounding in how the brain actually exerts itself creatively — although there is more recent research on that topic that is even more illuminating (more on that later).

In the book, Dr. Austin outlines his theory of the four kinds of luck — or, as he calls it, chance; I will use the terms interchangeably.

First, he defines chance as follows:

Chance… something fortuitous that happens unpredictably without discernable human intention.

Yup, that’s luck.

Chance is unintentional, it is capricious, but we needn’t conclude that chance is immune from human interventions. However, one must be careful not to read any unconsciously purposeful intent into “interventions”… [which] are to be viewed as accidental, unwilled, inadvertent, and unforseeable.

Indeed, chance plays several distinct roles when humans react creatively with one another and with their environment…

We can observe chance arriving in four major forms and for four different reasons. The principles involved affect everyone.

Here’s where it helps to be a neurologist writing on this topic:

The four kinds of chance each have a different kind of motor exploratory activity and a different kind of sensory receptivity.

The [four] varieties of chance also involve distinctive personality traits and differ in the way one particular individual influences them.

OK, so what are they?

In Chance I, the good luck that occurs is completely accidental. It is pure blind luck that comes with no effort on our part.

Yup.

In Chance II, something else has been added — motion.

Years ago, when I was rushing around in the laboratory [conducting medical research], someone admonished me by asking, “Why all the busyness? One must distinguish between motion and progress”.

Yes, at some point this distinction must be made. But it cannot always be made first. And it is not always made consciously. True, waste motion should be avoided. But, if the researcher did not move until he was certain of progress he would accomplish very little…

A certain [basic] level of action “stirs up the pot”, brings in random ideas that will collide and stick together in fresh combinations, lets chance operate.

Motion yields a network of new experiences which, like a sieve, filter best when in constant up-and-down, side-to-side movement…

Unluck runs out if you keep stirring up things so that random elements can combine, by virtue of you and their inherent affinities.

Sounds like a startup!

Chance II springs from your energetic, generalized motor activities… the freer they are, the better.

[Chance II] involves the kind of luck [Charles] Kettering… had in mind when he said, “Keep on going and chances are you will stumble on something, perhaps when you are least expecting it. I have never heard of anyone stumbling on something sitting down.“

OK, now here’s where it gets interesting:

Now, as we move on to Chance III, we see blind luck, but it tiptoes in softly, dressed in camouflage.

Chance presents only a faint clue, the potential opportunity exists, but it will be overlooked except by that one person uniquely equipped to observe it, visualize it conceptually, and fully grasp its significance.

Chance III involves involves a special receptivity, discernment, and intuitive grasp of significance unique to one particular recipient.

Louis Pasteur characterized it for all time when he said, “Chance favors the prepared mind.”

I thought that was Eric Bogosian in Under Siege 2: Dark Territory, but OK.

…The classic example of [Chance III] occured in 1928, when Sir Alexander Fleming’s mind instantly fused at least five elements into a conceptually unified nexus [when he discovered penicillin -- one of the most important medical breakthroughs ever].

He was at his work bench in the laboratory, made an observation, and his mental sequences then went something like this: (a) I see that a mold has fallen by accident into my culture dish; (2) the staphylococcal colonies residing near it failed to grow; (3) therefore, the mold must have secreted something that killed the bacteria; (4) this reminds me of a similar experience I had once before; (5) maybe this new “something” from the mold could be used to kill staphylococci that cause human infections.

Actually, Fleming’s mind was exceptionally well prepared. Some nine years earlier, while suffering from a cold [you can't make this stuff up], his own nasal drippings had found their way onto a culture dish. He noted that the bacteria around his mucous were killed, and astutely followed up the lead. His experiments then led him to discover… lysozyme… [which] proved inappropriate for medical use, but think of how receptive Fleming’s mind was to the penicillin mold when it later happened on the scene!

OK, what about Chance IV?

[Chance IV] favors the individualized action.

This is the fourth element in good luck — an active, but unintentional, subtle individualized prompting of it.

Please explain!

Chance IV is the kind of luck that develops during a probing action which has a distinctive personal flavor.

The English Prime Minister, Benjamin Disraeli, summed up the principle underlying Chance IV when he noted: “We make our fortunes and we call them fate.”

Chance IV comes to you, unsought, because of who you are and how you behave.

…Chance IV is so personal, it is not easily understood by someone else the first time around… here we probe into the subterranean recesses of personal hobbies and behavioral quirks that autobiographers know about, biographers rarely.

[In neurological terms], Chance III [is] concerned with personal sensory receptivity; its counterpart, Chance IV, [is] involved with personal motor behavior.

Please continue!

[You] have to look carefully to find Chance IV for three reasons.

The first is that when it operates directly, it unfolds in an elliptical, unorthodox manner.

The second is that it often works indirectly.

The third is that some problems it may help solve are uncommonly difficult to understand because they have gone through a process of selection.

We must bear in mind that, by the time Chance IV finally occurs, the easy, more accessible problems will already have been solved earlier by conventional actions, conventional logic, or by the operations of the other forms of chance. What remains late in the game, then, is a tough core of complex, resistant problems. Such problems yield to none but an unusual approach…

[Chance IV involves] a kind of discrete behavioral performance focused in a highly specific manner.

Here’s the money quote:

Whereas the lucky connections in Chance II might come to anyone with disposable energy as the happy by-product of any aimless, circular stirring of the pot, the links of Chance IV can be drawn together and fused only by one quixotic rider cantering in on his own homemade hobby horse to intercept the problem at an odd angle.

A recap?

Chance I is completely impersonal; you can’t influence it.

Chance II favors those who have a persistent curiosity about many things coupled with an energetic willingness to experiment and explore.

Chance III favors those who have a sufficient background of sound knowledge plus special abilities in observing, remembering, recalling, and quickly forming significant new associations.

Chance IV favors those with distinctive, if not eccentric hobbies, personal lifestyles, and motor behaviors.

This of course leads to a number of challenges for how we live our lives as entrepreneurs and creators in any field:

• How energetic are we? How inclined towards motion are we? Those of you who read my first age and the entrepreneur post will recognize that this is a variation on the “optimize for the maximum number of swings of the bat” principle. In a highly uncertain world, a bias to action is key to catalyzing success, and luck, and is often to be preferred to thinking things through more throughly.
• How curious are we? How determined are we to learn about our chosen field, other fields, and the world around us? In my post on hiring great people, I talked about the value I place on curiosity — and specifically, curiosity over intelligence. This is why. Curious people are more likely to already have in their heads the building blocks for crafting a solution for any particular problem they come across, versus the more quote-unquote intelligent, but less curious, person who is trying to get by on logic and pure intellectual effort.
• How flexible and aggressive are we at synthesizing — at linking together multiple, disparate, apparently unrelated experiences on the fly? I think this is a hard skill to consciously improve, but I think it is good to start most creative exercises with the idea that the solution may come from any of our past experiences or knowledge, as opposed to out of a textbook or the mouth of an expert. (And, if you are a manager and you have someone who is particularly good at synthesis, promote her as fast as you possibly can.)
• How uniquely are we developing a personal point of view — a personal approach — a personal set of “eccentric hobbies, personal lifestyles, and motor behaviors” that will uniquely prepare us to create? This, in a nutshell, is why I believe that most creative people are better off with more life experience and journeys afield into seemingly unrelated areas, as opposed to more formal domain-specific education — at least if they want to create.

In short, I think there is a roadmap to getting luck on our side, and I think this is it.

Age and the entrepreneur, part 1: Some data

from:
http://blog.pmarca.com/2007/08/age-and-the-ent.html

Age and the entrepreneur, part 1: Some data

• Aug 8, 2007

A short time back, several smart bloggers engaged in an enthusiastic debate about age and entrepreneurs — some taking the position that kids have a leg up on older entrepreneurs at least for certain categories of startups, and others theorizing that age is largely irrelevant (or as Ali G would put it, “geezers is good entrepreneurs as well, man”).

I have opinions on this topic, but rather than just mouthing off like I would normally do, I decided to go get some data. This post presents that data — the next post will have the mouthing off.

I’m not aware of any systematic data on age and high-tech entrepreneurs. As far as I’m aware, all we have are anecdotes. However, a professor of psychology at University of California Davis named Dean Simonton has conducted extensive research on age and creativity across many other fields, including science, literature, music, chess, film, politics, and military combat.

Dr. Simonton’s research is unparalleled — he’s spent his career studying this and related topics and his papers make for absolutely fascinating reading.

For this post, I’ll be concentrating on his paper Age and Outstanding Achievement: What Do We Know After a Century of Research? from 1988. I haven’t been able to find a PDF of the paper online but you can read a largely intact cached HTML version courtesy of Google Scholar.

Let’s go to the paper:

For centuries, thinkers have speculated about the association between a person’s age and exceptional accomplishment: Is there an optimal age for a person to make a lasting contribution to human culture or society? When during the life span can we expect an individual to be most prolific or influential?

You can see why I think this is relevant.

Here we adopt the product-centered approach, that is, our focus is on real-life achievements rather than performance on abstract… measures. …

[A]chievement [takes] the form of noteworthy creativity… the goal is to assess how productivity changes over the life span… [I] focus on individual accomplishment in such endeavors as science, philosophy, literature, music, and the visual arts. …

[Studies like these focus] on three core topics: (a) the age curve that specifies how creative output varies over the course of a career, (b) the connection between productive precocity, longevity, and rate of output, and (c) the relation between quantity and quality of output (i.e., between “productivity” and “creativity”).

Dr. Simonton also discusses leadership as distinct from creative production, but I’m ignoring the leadership part for now since it’s quite different.

One empirical generalization appears to be fairly secure: If one plots creative output as a function of age, productivity tends to rise fairly rapidly to a definite peak and thereafter decline gradually until output is about half the rate at the peak.

This is the centerpiece of Dr. Simonton’s overall theory across many domains. And is probably not unexpected. But here’s where it gets really interesting:

[T]he location of the peak, as well as the magnitude of the postpeak decline, tends to vary depending on the domain of creative achievement.

At one extreme, some fields are characterized by relatively early peaks, usually around the early 30s or even late 20s in chronological units, with somewhat steep descents thereafter, so that the output rate becomes less than one-quarter the maximum. This age-wise pattern apparently holds for such endeavors as lyric poetry, pure mathematics, and theoretical physics…

The typical trends in other endeavors may display a leisurely rise to a comparatively late peak, in the late 40s or even 50s chronologically, with a minimal if not largely absent drop-off afterward. This more elongated curve holds for such domains as novel writing, history, philosophy, medicine, and general scholarship.

Well, that’s interesting.

It must be stressed that these interdisciplinary contrasts do not appear to be arbitrary but instead have been shown to be invariant across different cultures and distinct historical periods.

As a case in point, the gap between the expected peaks for poets and prose authors has been found in every major literary tradition throughout the world and for both living and dead languages.

Indeed, because an earlier productive optimum means that a writer can die younger without loss to his or her ultimate reputation, poets exhibit a life expectancy, across the globe and through history, about a half dozen years less than prose writers do.

You know what that means — if you’re going to argue that younger entrepreneurs have a leg up, then you also have to argue that they will have shorter lifespans. Fun with math!

You may not be surprised to find that in creative fields, the power law rule — also known as the 80/20 rule — definitely applies:

A small percentage of the workers in any given domain is responsible for the bulk of the work. Generally, the top 10% of the most prolific elite can be credited with around 50% of all contributions, whereas the bottom 50% of the least productive workers can claim only 15% of the total work, and the most productive contributor is usually about 100 times more prolific than the least.

Here’s where it gets really interesting again:

Precocity, longevity, and output rate are each strongly associated with final lifetime output — that is, those who generate the most contributions at the end of a career also tend to have begun their careers at earlier ages, ended their careers at later ages, and produced at extraordinary rates throughout their careers. …

These three components are conspicuously linked with each other: Those who are precocious also tend to display longevity, and both precocity and longevity are positively associated with high output rates per age unit.

OK, so on to the main question, which is, when’s the peak?

Those creators who make the most contributions tend to start early, end late, and produce at above-average rates, but are the anticipated career peaks unchanged, earlier, or later in comparison to what is seen for their less prolific colleagues? Addressing this question properly requires that we first investigate the relation between quantity and quality, both within and across careers. …

This is a very complex topic and Dr. Simonton goes into great detail about it throughout his work. I’m going to gloss over it a bit, but if you are interested in this topic, by all means dig into it more via Google Scholar.

First, if one calculates the age curves separately for major and minor works within careers, the resulting functions are basically identical…

Second… minor and major contributions… fluctuate together. Those periods in a creator’s life that see the most masterpieces also witness the greatest number of easily forgotten productions, on the average.

Another way of saying the same thing is to note that the “quality ratio,” or the proportion of major products to total output per age unit, tends to fluctuate randomly over the course of any career. The quality ratio neither increases nor decreases with age…

These outcomes are valid for both artistic and scientific modes of creative contribution. What these two results signify is that… age becomes irrelevant to determining the success of a particular contribution.

OK, that’s interesting. Quality of output does not vary by age… which means, of course, that attempting to improve your batting average of hits versus misses is a waste of time as you progress through a creative career. Instead you should just focus on more at-bats — more output. Think about that one.

If this sounds insane to you, Dr. Simonton points out that the periods of Beethoven’s career that had the most hits also had the most misses — works that you never hear. As I am always fond of asking in such circumstances, if Beethoven couldn’t increase his batting average over time, what makes you think you can?

[C]reativity is a probabilistic consequence of productivity, a relationship that holds both within and across careers.

Within single careers, the count of major works per age period will be a positive function of total works generated each period, yielding a quality ratio that exhibits no systematic developmental trends.

And across careers, those individual creators who are the most productive will also tend, on the average, to be the most creative: Individual variation in quantity is positively associated with variation in quality.

Wow.

OK, next step:

[This] constant-probability-of-success model has an important implication for helping us understand the relation between total lifetime output and the location of the peak age for creative achievement within a single career.

Because total lifetime output is positively related to total creative contributions and hence to ultimate eminence, and given that a creator’s most distinguished work will appear in those career periods when productivity is highest, the peak age for creative impact should not vary as a function of either the success of the particular contribution or the final fame of the creator. …

Thus, even though an impressive lifetime output of works, and subsequent distinction, is tied to precocity, longevity, and production rate, the expected age optimum for quantity and quality of contribution is dependent solely on the particular form of creative expression.

Wow, again.

Anyone who demonstrates… an age decrement in achievement is likely to provoke controversy. After all, aging is a phenomenon easy enough to become defensive about, and such defensiveness is especially probable among those of us who are already past the putative age peak for our particular field of endeavor…

I think Dr. Simonton is ready to start blogging.

His paper then goes on to discuss many possible extrinsic factors such as health that could impair later-life output, but in the end he concludes that the data is pretty conclusive that such extrinsinc factors serve as “random shocks” to any individual’s career that do not affect the overall trends.

He then goes on to discuss possible intrinsic factors that could explain a relationship between age and creative accomplishment:

G. M. Beard was not merely the earliest contributor [in 1874] to the empirical literature on age and achievement but its first theorist as well. According to him, creativity is a function of two underlying factors, enthusiasm and experience. Enthusiasm provides the motivational force behind persistent effort, yet enthusiasm in the absence of the second factor yields just original work. Experience gives the achiever the ability to separate wheat from chaff and to express original ideas in a more intelligible and persistent fashion. Yet experience in the absence of enthusiasm produces merely routine contributions. Genuine creativity requires the balanced cooperation of both enthusiasm and experience.

Beard postulates, however, that these two essential components display quite distinctive distributions across the life span. Whereas enthusiasm usually peaks early in life and steadily declines thereafter, experience gradually increases as a positive monotonic function of age. The correct equilibrium between the two factors is attained between the ages of 38 and 40, the most common age optima for creative endeavors. Prior to that expected peak, an individual’s output would be excessively original, and in the postpeak phase the output would be overly routine. The career floruit in the late 30s thus represents the uniquely balanced juxtaposition of the rhapsodies of youth and the wisdom of maturity.

Hmmmmmm…

Beard’s theory is not without attractive features… Beard’s account, for all its simplicity, can boast a respectable amount of explanatory power. Besides handling the broad form of the age curve, this theory leads to an interpretation of why different endeavors may peak at distinct ages.

The contrast between poetic and prose literature, for instance, can be interpreted as the immediate consequence of the assumption that the two domains demand a different mix of the two factors: poetry, more enthusiasm, and prose, more experience. Indeed, in fields in which expertise may be far more crucial than emotional vigor, most notably in scholarship, we would anticipate little if any decline with age, and such is the case.

Dr. Simonton, however, then goes on to explain that this theory does not really match the data — for example, the data shows that quality of output in practically all fields does not decline systematically with age, which is what you’d expect from Beard’s theory.

The paper then digs into possible correlations between intelligence as measured by such metrics as IQ, and creative output:

[E]ven if a minimal level of intelligence is requisite for achievement, beyond a threshold of around IQ 120 (the actual amount varying across fields), intellectual prowess becomes largely irrelevant in predicting individual differences in… creativity.

So what have we learned in a nutshell?

• Generally, productivity — output — rises rapidly from the start of a career to a peak and then declines gradually until retirement.
• This peak in productivity varies by field, from the late 20s to the early 50s, for reasons that are field-specific.
• Precocity, longevity, and output rate are linked. “Those who are precocious also tend to display longevity, and both precocity and longevity are positively associated with high output rates per age unit.” High producers produce highly, systematically, over time.
• The odds of a hit versus a miss do not increase over time. The periods of one’s career with the most hits will also have the most misses. So maximizing quantity — taking more swings at the bat — is much higher payoff than trying to improve one’s batting average.
• Intelligence, at least as measured by metrics such as IQ, is largely irrelevant.

So here’s my first challenge: to anyone who has an opinion on the role of age and entrepreneurship — see if you can fit your opinion into this model!

And here’s my second challenge: is entrepreneurship more like poetry, pure mathematics, and theoretical physics — which exhibit a peak age in one’s late 20s or early 30s — or novel writing, history, philosophy, medicine, and general scholarship — which exhibit a peak age in one’s late 40s or early 50s? And how, and why?