On Monday, Mark Zuckerberg showed up to pre-IPO roadshow investor meetings wearing his signature hoodie. Wedbush Securities managing director Michael Pachter commented on Bloomberg news yesterday that Zuckerberg should show the investment community some respect by ditching the hoodie in investor meetings and wearing it is a sign of immaturity.

Pachter’s comment:

"Mark and his signature hoodie: He’s actually showing investors he doesn’t care that much; he’s going to be him. I think that’s a mark of immaturity. I think that he has to realize he’s bringing investors in as a new constituency right now, and I think he’s got to show them the respect that they deserve because he’s asking them for their money."

Predictably the tech elite attacked Pachter; Pacther was even called a “doofus” by Kara Swisher of All Things D. To his credit Pacther is taking it well, even suggesting on Twitter that Mark wear an executive pinstripe hoodie.

As a guy who proudly wears jeans and tee shirts to formal events, you would expect me to attack Pachter as well. While I don’t completely agree with Pachter, he does have a point.

Founders represent the heart and soul of a company. They set the company culture and lead by example. The problem with founders is that they sometimes forget that their company has grown up and they are still acting like the company is a small upstart. This disconnect between the company’s size and maturity and the founder’s attitude and behaviors can cause problems, sometimes major ones.

As startups start to mature, their founders have to mature along with it. As the company moves from startup to challenger, to market leader, the founder has to make adjustments along the way. Behaviors and policies that were appropriate for a small startup may not be appropriate for a company that is public.

For example when Bill Gates rallied the troops by saying that they were going to “cut off Netscape’s air supply”, Bill was guilty of acting like Microsoft was the tiny underdog when in reality it was a huge publically traded market leader and Netscape was the tiny upstart. Gates’ comment became a major piece of evidence in Microsoft’s anti-trust trial.

I’ve made this mistake many times as well. Zagat went through several phases while I was CTO in the dot com boom and my playful behavior that worked so well in the pre-IPO/VC dot com environment of late 1999 did not go over well in the post-crash/layoff environment of 2001. We had brought in a new CEO after the dot com crash and my enthusiasm was misinterpreted by the CEO as not being serious. Unfortunately this reflected poorly on the entire IT staff. I was guilty of forgetting that the company had changed and it was time to keep the same spirit but change some tactics and behaviors. Once I did, things picked up nicely.

Founders also make the mistake of thinking like a startup when larger company decisions are needed. For example, it took Microsoft something like 20 years to buy a corporate jet, Google and Facebook had to get sued to start acquiring patents, and Yahoo! turned down a lucrative offer from Microsoft since they still thought of themselves as a Silicon Valley rebel instead of the blue chip big media company in the trouble it was in.

At Telerik, our founders have had to make adjustments over the years. When I met them Telerik was a scrappy 30 person company. Now we have teams that are larger than that and over 600 people worldwide. The founders have scaled and adjusted their behavior accordingly, all while keeping true to themselves and the company culture. They wear jeans and tee shirts to the office, collared shirts to board meetings, and suits and ties when accepting the Red Herring 100 award.

I’m not saying the Mark Zuckerberg should ditch the hoodie and wear a suit to work everyday. However, he should realize that going public requires some behavioral changes, not just in financial accounting, but also in his leadership style.

The techie rebel in me applauds Zuckerberg for standing up the the man and wearing his hoodie on Monday. The experienced MBA side of me also cringes knowing that Zuckerberg is bound to make several Bill Gates style mistakes, mistakes that could cost Facebook dearly.

On Tuesday 24 April, I’ll take the train on up to Shenzhen, China to speak on startups at the Startup Tuesday group run by the Shenzhen Marketing group at the Chai Huo Maker hacker space.

The topic will be about exits: IPOs, mergers and acquisitions, liquidity events, and the like. We’ll talk about the process of an exit, how a deal is structured,  as well as how the money side of it all works (including earn-outs, stock payments, and incentive payments.) Should make for a fun evening!

While I expect this to be predominately Q&A based, here are the slides:

Last week I wrote about communication struggles at startups and small companies. Since Telerik is the largest company I’ve ever worked for, I’ve asked my sister, Caroline Forte, to write a guest blog post. Caroline has worked at large companies for a long time and is also responsible for several aspects of corporate communications in her current role. Take it away sis:

I’ve worked in communications at a large company for longer than I’d like to publically admit. During that time I have supported many different facets of the business, yet the communication challenges seem to be very consistent. No matter how much information you try to provide there are always two camps – the “you must be holding some information back” camp and the “I don’t have time to read this” camp.

As a divisional or departmental communicator you are competing with the corporate messaging – intranets, memos from leadership, electronic newsletters, messages from HR, internal blogs, message boards and …well you get my drift. How do you prevent your leader’s voice from getting lost in the shuffle? Now throw in the global perspective of language, culture and time zones. And the icing on the cake was when I supported manufacturing where more than half of the audience did not have a dedicated pc.

Basically as a communicator you are always competing - competing with the employees’ time and interest, competing with how the external media skews your internal news, competing with the internal message blogs where employees get to rip apart your messaging.

Readers are fickle – especially the younger workforce. If you don’t grab them in the beginning, tell it to them straight and answer the WIIFM then you’ve lost them. I’ve read somewhere that communications is one of the most stressful jobs – right up there with air traffic controllers. Scary thought, eh? Maybe I’ll try that on for size when I retire.

A few quick tips:

• Communicate when there is new information - be timely
• Don’t hide behind corporate jargon
• Mix it up – experiment with different communication vehicles
• Open the door – let the audience respond and seek out if the messages resonate

So why do we even bother, other than the fact that most of us are a bit quirky and we enjoy the insaneness of the job . Because knowing that each day you have answered someone’s question, pointed them in the right direction, clarified an issue and increased transparency then you can go home thinking, I guess I can do this all over again tomorrow.

I’ve spent my entire career at start-ups. I’m use to small. I once worked at a big table with everyone else employed at the company, resulting in pure bliss. One company that I started with three other guys got up to eight people before we were sold to a company with close to 7,000 people in 40 countries. I am most comfortable working side by side with my colleagues; unfortunately over the last 10 years it has not really worked out that way.

Ten years ago I started Corzen with my partner Bruce. Our first office was the Starbucks on 6th and W 57th street in Manhattan. We got geeky pretty quickly and moved to meeting in my apartment so we can huddle around my desktop (this was before Starbucks had free WiFi). A few months later we took up space in what was probably the first (and at the time only) co-work space in Manhattan down in Union Square.

Very quickly we hired Bob, our sales, marketing, production, ops, product, project manager, and all around nice guy. Overnight we went from Bruce saying “Steve, the web site should have more blue over here and here it should be more red” to “let’s have a meeting and discuss this with Bob.” We went from one communication interface to three.

As you increase the number of people you work with, you increase the number of communication interfaces pretty quickly. As you increase the number of communication interfaces, things start to get bogged down, since the human brain can only keep track of seven things at a time. So the optimal size of a company is apparently four, since there are only six communication interfaces. (You can calculate the number of interfaces by taking the square of the total number of people minus the total number of people divided by two.) You are not going to build the next billion dollar business with only four people; even Instagram had 13 people, with a communication interface of 78.

In year two of Corzen things expanded rapidly (it didn’t hurt that we were mentored by the future rocks stars Fred and Brad over at Union Square Ventures.) We hired some programmers in New York with five more in Pune, India. After another year we had added a few more people in Cairo, Egypt. Altogether the company was around fifteen people, not only having 105 communication interfaces, but also multiple locations in three time zones.

A tiny company of fifteen people had some of the same communication problems of a global conglomerate. We had to learn on the fly. What did we do?

• Every Friday the whole New York office went to lunch together. Even though we all worked at the same co-work space, it gave us time to clear the air on any issues and then talk about whatever was on our mind. Was also a great way to catch everyone up on your last trip. We also talked about non-work stuff too. (Usually baseball, politics, the attractiveness or whoever new started to work at the co-work space, etc.)
• Monday morning New York staff meeting. We did not do many meetings at the company, however, we did do one staff meeting once a week.
• I traveled to Pune and Egypt. A lot. I went to Egypt so much I was put on the TSA watch list. I learned a lot about doing business overseas, other cultures, and a distributed environment. For example I had three young, Muslim, female programmers working for me in Cairo. I had to have multiple meals with each of their families before I made any progress. (Lucky for me, the food was delicious and their families would try to “force feed” me.)
• We did a tremendous amount of on-site, customer visits. We sometimes brought everyone in the office. We shared the results with the remote teams.
• We instituted Agile methodologies, since Agile, and Scrum in particular, stresses communication.
• Skype, Skype, Skype. More Skype.
• Any document that we created was shared on Google Docs
• We had an intranet and internal Wiki about many things (and posted funny photos of co-workers)
• Stressed the importance of face to face meetings as part of our culture

While we still had some communication issues, we did pretty well as we continued to grow. A few years later, we were acquired by a company based in the French part of Canada with about 50 people. Overnight our communication interfaces went from 105 to 2080! (Plus I don’t speak French.) Luckily for me, the acquiring company was impressed with what we did both with Agile development as well as with our remote offices (the buying company was all located in one office), so they put me in charge of leading this effort during the transition. After about six months and going to Quebec City more often than any American should have to, eating too much poutine, and countless meetings and sessions, we all were very happy with the new combined company’s communication.

As you start your new business, or are working at an established company, big or small, make sure communications are part of your corporate strategy. You’ll be better off for it.

The news today is buzzing with the announcement of Facebook’s acquisition of Instagram for $1billion.  Instagram co-founders, Kevin Systrom and Mike Krieger, literally had a billion dollar idea. The idea for Instagram was also Systrom and Krieger’s Plan B.

Kevin Systrom and Mike Krieger raised $500k of seed funding from Baseline Ventures and Andreessen Horowitz while working on Plan A in early 2010. The original idea for Instagram was called Burbn, a check-in app that competed with Foursquare and allowed you to check-in to locations and add photos and videos to your check-in. Burbn’s focus was suppose to be a mash-up of Foursquare and Mafia Wars (where the name Burbn came from.) Burbn (Plan A) did not really take off and after a lot of minimum viable products, several months later Systrom and Krieger pivoted, and released Instagram (Plan B) as we know and love. The rest, they say, is history.

Instagram’s story of pivoting is a great reinforcement for anyone starting a new business today. I’m sure that Systrom and Krieger loved their first idea (Burbn), but they did not fall in love with it and keep sticking to it. This happens too often when a founder keeps hacking away at a bad idea over and over without pivioting. The truth is that most great companies today are the result of a Plan B, or even Plan C, or Plan D. So when starting your business, don’t fall in love with your idea, accept that fact that you will most likely have to pivot and get to Plan B. It just may be a billion dollar idea…

Over the past few months, I’ve judged both the Startup Weekend and ServiceJam in Hong Kong, attended pitch nights, and spoke at some start-up networking events. Almost all aspiring entrepreneurs who I talked to at these events struggled with when was the right time to release V1 of their product. One guy even told me that he was sitting on an idea, an idea that he thinks can be bigger than Facebook, for almost 12 years waiting for patents!

My advice to each all of these entrepreneurs is the same: start small and start now. Your best bet if you are thinking about something is to just do it. Many people think that they can’t do it or that their project is too big. No problem! Start small and test your theory out. We’ve all heard about MVP or minimum viable product, but my advice goes even deeper: minimum viable idea (MVI).

What is a minimum viable idea? It is the smallest version of your idea that you can test and get meaningful results. If you are unsure of your idea or want to validate your idea, you have to build the minimum viable product of your minimum viable idea and compare the results against your assumptions and expectations. Then as the saying goes iterate or exit.

For example someone recently came to me with a social networking idea. They had a big grandiose plan to build their own platform with all the bells and whistles. The idea was good, but would it fly? I just don’t know if their assumptions are valid. They complained that they had to wait a few months for their first MVP to be built so they can start testing and validating their assumptions. I told them why months? You can build a super small version of the idea as a Facebook app, share it with some friends/testers, and gather the results. A minimum viable idea’s minimum viable Facebook app would probably take a HKU student one or two weeks to put together.

Another friend wanted to build an elaborate social media powered electronic display in a drab public place, requiring government approval. (The goal is to increase happiness as well as make some money.) What would be a MVI? Ask for permission to paint the drab public some happy colors with a painted easy to remember link for people to +1 or “like” or comment and display those comments as an RSS feed. No difficult software to build and a much easier conversation with the public works department. (Or maybe this can be accomplished just by buying advertisement space, no need for any approval!) The results that come back will help validate the idea!

The best way to get started is to actually get started. Go out there and find a fast, cheap, and creative way to test your idea (MVI) before you even start to think about the MVP of your true offering.

Good luck.

Twenty years ago when I entered the high tech industry, every aspiring young entrepreneur dreamed of building the next Microsoft and being the “next Bill Gates.” News articles told us that the next Bill Gates would probably come from Eastern Europe rather than from Silicon Valley (or Seattle where Microsoft is located). Ten years ago when Google got big and went public, every new entrepreneur wanted to be the “next Larry Page.” News articles told us that the next Larry Page would probably come from India or China rather than from Silicon Valley. As Facebook eyes its IPO next month, today young entrepreneurs hope to be the “next Mark Zuckerberg”. News articles now tell us that the next Mark Zuckerberg will come from Brazil, rather than from Silicon Valley.

While I am generally optimistic that the environment for entrepreneurship will only get better all over the world in the coming decades, it is important to realize that there are a number of things that make Silicon Valley unique and for that reason, it is more likely that the next Gates/Page/Zuckerberg will come from the Valley.

There are many things that a location needs in order to support entrepreneurship and its startups: access to capital, awesome infrastructure, a large talent pool, a world class education system, rule of law, contract enforcement and property rights, transparency/free media, tax structure, modern labor laws, and an underlying geopolitical system that supports all of the above. You can’t have a successful startup if the local government is going to tax you too high, can’t enforce a contract, or is unstable and about to be overthrown in a revolution (though a revolution is probably good for entrepreneurship in the longer term!)

Most of the places in the world today are moving in the right direction. Some developing nations support all the items above in my list. Unfortunately, that is only the entrance ticket to a startup culture.

Many places that meet the above criteria have a startup community, but lack a startup culture. A startup community is just that, a community of lots of startups who help each other, have regular meet-ups, co-work spaces, pitch nights, and even attract capital. What is lacking is the startup culture.

What is a startup culture? A culture that celebrates failure, a culture that encourages people to take risks, an ecosystem of startup support that will work on equity only or super reduced rates that range from office space, legal services, accounting services, design, advertising, PR, and so on.

Most importantly, you need a talent pool that has had several generations of people who have been through an “exit” or acquisition or IPO. These people serve as both the inspiration for new local startups (“I can’t believe that Bob from the neighborhood made it big at that local startup!”) but also as their mentors and even Angel Investors.  The second and third generation folks are willing to work for equity/reduced wages and inspire others who have not had an exit to do so too. This includes not just the founders and developers, but every position in the company. The more people in your location that has been through an exit, the easier it is to build a new company.

My beloved home town of New York and my adopted home town of Hong Kong both have vibrant startup communities, but are years away from building a proper startup culture. Why? They are both very expensive cities to live in and all the money is in the finance or real estate industries. So if you are starting a new business in New York or Hong Kong you are competing with the banks for not only your developers  and marketing people, but also for office space, accountants, and lawyers, etc. Only after several generations of startups reaching the exit will the floodgates open and the ecosystem will form.

Silicon Valley is one of the few places in the world where this ecosystem exits. I am watching as other locations are trying to build this ecosystem prematurely. Unfortunately, it will take time, potentially decades in some places.

Will the next Mark Zuckerberg come from Silicon Valley or somewhere else? I hope that he or she will come from somewhere else, however, my money is on Silicon Valley. Does this mean you should move, that your startup is doomed unless you are in Silicon Valley? No! All it means is that the odds are stacked against you, but with entrepreneurship the odds are always stacked against you anyway.

The company where I work, Telerik, started almost 10 years ago in Sofia, Bulgaria. At the time (sorry guys!) Sofia was an European backwater that was known more for its corruption and mafia than high-tech entrepreneurship. Telerik has defied the odds and has “made it” and has been selected as a Red Herring Global 100 company. How? By changing the culture and consistently earning the best place to work in Bulgaria award. The odds were stacked against Telerik too.  

After a successful TechDays Hong Kong the week before last, I am off to Bangalore today to speak at Tech Ed India 2012! Besides the usual running around and talking with customers, partners, attendees, and MVPs, I’ll be doing three breakout sessions:

Wednesday @ 12:15 : Beyond Scrum: Kanban and Software Kaizen

This is a slight modification of my Introduction to Kanban talk, here are the slides for that one:

On Wednesday afternoon at 2:15, I’ll be doing a session on Big Data Processing with SQL Server 2012 and Hadoop. I don’t really have any slides for this one besides a few from MS DPE, I plan on using all my time in demos. I’ll be talking about Hadoop on Azure, columnstore indicies, data warehouse improvements, and other things that will help you deal with large amounts of data like table partitioning (I know, I know, “Big Data” does not always mean “Big” data. ) This will be a fun session, come see me screw up some live demos.

Lastly, on Thursday at 4:30, I’ll be doing a session on Agile Estimation. I’ve done this one in India a few times before, but my first time at TechEd India. Here are the slides:

If you can’t make that session, I did it last year at TechEd North America and it was live streamed, so the recording is here:

See you all in Bangalore!

It’s time for all .NET Ninjas to sharpen their skills!

The latest Telerik release is just around the corner and we have tons of new stuff to show off. If you are eager to see the new bits and sharpen your .NET skills, be sure to sign up for Release Webinar Week. This 3-day event is packed with hour-long webinar sessions on the coolest new features shipping with the Q1 2012 release. Release Webinar Week will be held on February 20 – 22, so mark your calendars. One lucky winner from each webinar will leave with a Telerik Ultimate Collection license worth $1999. To enter the drawing and participate in the Q&A session, you must attend the live webinar.

Registration Link: http://www.telerik.com/support/webinars.aspx

I’ve been using the Kindle Fire for three weeks now and figured it was time to post my thoughts on the Fire.

Getting Started

Living in Hong Kong, the Fire is not available here, so I had to order one (the day it was announced) and have it shipped to my mom’s house in New York. I couldn’t wait to go home to New York to visit for the Christmas holiday and get my Fire. As soon as I got there, I opened it up and got started. Out of the box, the experience was great.

Almost immediately I was up and running. Since I use the Amazon App store in my Nexus One Android phone, I was able to immediately log in and download all of my favorite apps. Since I am an Amazon customer and “normal” Kindle owner, I was also able to load up my Amazon cloud stuff right away (my Kindle books, MP3 music, and videos that I have purchased via Amazon.) I like the carousel/bookshelf UI of the Fire and found it easy to navigate (and to be fair, my Fire was updated, so I did not have the swipe problems early owners had.) I also seem to be the only person on the planet who likes the UI, but the iPad and Android UI of icons just bores me, reminds me of Windows 3.1.

I started using the mail client and web browser as well as Pulse to aggregate news and content in the popular e-magazine format. Loaded Twitter and Facebook of course. I also installed my favorite app of all time, Evernote, and immediately started to use it. I also fired up the Amazon Cloud player and got to all of my stored MP3s and videos. Using the Amazon Prime account that comes with the Fire, I was able to watch a bunch of movies and other video content. (But since I live in Hong Kong, I have to push my internet connection via a VPN to fool Amazon that I am in the United States as they don’t have distribution deals internationally.) I sat with my dad and watched a news commentary on YouTube about the street protests in Europe. Lastly, I transferred some of my Kindle magazines over to the Fire as well as all of my books and started to supplement my Kindle Touch reading with the Fire. Reading with the Kindle Fire is just like reading with the iPad or another non e-ink device.

The Fire has a tremendous amount of games. So many that I think they are going after the family segment. (I don’t play games all that often, but at times when I am bored on a plane, you can find me playing Angry Birds.) This is real smart, every kid wants an iPad, but what they really want is a tablet to play games and surf the web. My nephew wants an iPad, so I gave him my Fire to play with and he found Angry Birds and Fruit Ninja in 10 seconds and then disappeared with my Fire for a few hours. I don’t think that he needs an iPad and at $200, families can buy Fires for each kid.

As a frequent traveler (with a laptop) and huge content consumer, the Fire is perfect for me. The smaller size makes it easier to hold and read and travels better than a 10 inch tablet.

The Elephant in the Room

Since the Fire is a tablet, it will get compared the grand daddy of the category: the iPad. While it is only natural to compare the iPad and the Fire, I am not sure it is the right thing to do. While in different categories, they are selling to different segments. Similar to a BMW convertible and a four door Toyota sedan, they are in the same category (autos) but sell to and appeal to different segments (single men for the BMW and a family for the Toyota.)

The iPad appeals to the tech elite and folks who have already made a significant investment in iTunes or the Apple ecosystem. The Fire will appeal to those people who have not yet bought a tablet and like the Kindle, kids, and folks who like to play games. In addition, the Fire will appeal to uber tech geeks who will want to root it and play with the underlying Android OS (like me).

As an iPad 1.0 user, I am not missing anything with the Fire, except the Economist application, but I can side load that on the Fire if I get impatient waiting for that to be available (or break down and buy the Kindle version). Everyone complained about a lack of a webcam on the Fire, but as a iPad 1.0 user I don’t miss it. When I am on the road, I travel with my laptop and tablet, so I don’t need a webcam. The Fire will replace my iPad (at least for now, who knows what the future will bring…)

I won’t say that Apple is in trouble, since Amazon has attacked the bottom segment of the market. Traditionally, vendors eventually work their way up after they conquer the bottom segment, so expect to see higher end Fires in the future.

Enjoy!