After being on a panel at last years’ Social Capital Markets (SOCAP) conference Daniel Epstein, founder of the Unreasonable Institute, asked me about the importance of social entrepreneurship and innovation. Enjoy!

From time to time I find myself in discussions with entrepreneurs and startups about the value of (protected) intellectual property (IP).

The argument often goes something like this: Entrepreneur thinks that the IP she created, is the core of her company and thus needs to be private and protected. Yours truly argues that under certain conditions (and probably more often than not) it might make sense to open up the code with an open source license and work on building a community around it. Entrepreneur reacts in shock and continues to argue that her IP is a precious stone, not to be shared with anyone (though the lure of a community co-developing the product sounds mightily tempting). Yours truly makes his main argument: More often than not your IP is not the important bit. It’s your ability to execute. Entrepreneur is confused.

Let me explain my position: Very broadly speaking I see three classes of innovation (in software) – truly new inventions, innovative combination of existing building blocks and customization.

To make these three categories clearer, let me use a couple of pictures: New inventions are something which didn’t exist before. Sometimes these innovations are complete buildings, sometimes they are more like individual lego bricks.

Which brings us to group two - the people who combine existing lego bricks into new forms & shapes. Sometimes they need to invent their own glue - but the heavy lifting is done by stacking lego bricks in new and innovative ways.

Lastly you have people who customize - they arrange furniture in a barbie doll house to create an innovative arrangement which delivers value. These people tend to use mostly complete solutions, put a little veneer on or make some minor changes and deliver value through content and other areas.

Now - all three models are valid and valuable. But mostly only the first one might require strong IP protection (note that this is all very broadly speaking and thus a vast generalization) – as only in the first case the founder actually created something new and unique which truly didn’t exist before. In the other cases I would argue the “protection” for the startup is much more execution based. If you execute well, you’re golden. If you don’t, your IP isn’t strong enough to make it properly defensible.

Again - this is a sweeping generalization. But I find it helpful to think in these categories and seriously consider using open licenses for your IP to reap the benefits of innovating in the open and with a community.

Last year (jeez - is it really 2012 already?) I had the great fortune to host a bunch of entrepreneur/student groups from all over the world here at Mozilla.

I simply love interacting with entrepreneurs - especially when they are young and/or first time entrepreneurs. The energy is boundless, there is nothing holding them back and they have no fear. One thing which stood out for me was the fact that all these groups came from places outside of the US - essentially they came to the Valley to expose themselves to the culture, DNA and vibe which make Silicon Valley what it is. A truly unique place on earth.

Which brings me to my one advice for entrepreneurs (if you’re not in Silicon Valley anyway) - get the cheapest flight, the cheapest hotel and expose yourself to a couple of weeks of Valley craziness. It will change the way you see the world.

On that topic - The folks from Pioniergarage wrote up a nice summary of their trip to the Valley including a short video interview with yours truly. Enjoy!

And if you are part of a group of entrepreneurs coming to the Valley to visit - ping me and we’ll host you here at Mozilla and talk about some of my favorite topics such as “How you can win when you’re small”. :)

1,205,808... More than 1.2 million people are using Github today. A whole generation of developers & hackers all around the world are growing up with Github deeply embedded into their developer DNA. This is a whole generation of people for whom sharing code is the default (the vast majority of code repositories on Github are public - you have to pay for private repos). A whole generation which not only consumes Open Source software and code but decided that keeping code private is just not important anymore. This is the future. Learn, share and innovate in the open. It's all about execution, not your intellectual property. Now - go and check out what those 1.2 million hackers put into their more than 3.5 million code repositories. Learn from it. Share and give back. And let's create the third wave of Internet startups (after the first boom & bust in the late 90s and the current wave of social/web 2.0/whatever startups) which are built on top of the deeply ingrained ethos of Generation Github.

I can't wait!

Image Credits: Baracktocat by Cameron McEfee

Release early, release often…

You know the drill, right? Today you want to get your product into consumers’ hands as early as possible, learn & iterate quickly and push out updates on a regular cadence. Lean startup and all that…

This works great when you are developing on the Web - where I get to experience your latest and greatest iteration without me doing much. It doesn’t when you do client-side software. So please, please dear iPhone (and Android) developers - be a bit more deliberate with your updates. It annoys the hell out of me (and a bunch of other people) when you update your app every three days - because unlike on the Web I actually need to install your update. Which sucks, is annoying and a waste of my time.

I don’t even have that many apps installed on my iPhone - but finding an update to at least one of my apps on a daily basis just leads to update fatigue.

I recently sat down with a good friend to go through some stats which show the harsh, ugly truth of Angel/Seed/VC funding. It essentially goes like this:

In the first half of 2011 there were about 175,000 startups looking for early stage investments in the US (note that this number is not limited to tech). Out of those, a mere 26,300 received angel and/or seed funding - that’s only 1 in 6.5 (or a 15% yield). Kinda scary if you’re in the position of looking for money. But it gets even scarier - out of the 26,300 startups which received angel and/or seed funding only 7% (a total of 1,850) received series A funding (aka institutional funding from a VC firm). Putting this together - your chance to receive institutional capital is pretty much exactly 1%.

Now - what that tells us is: Your chances to receive funding are slim. You could assume that you’re hosed. But fret not - first of all: There are 1,850 startups which get funding all the way to series A (and are thus well on their way to be successful - at least the odds are stacking up). And probably more importantly - focus on building a product people want to buy - that way you don’t need funding. Or can take funding for accelerating your growth instead of building your product. Which is the best way to do the VC dance anyway - as your leverage is much, much better.

So my friend - fret not! Go, build an amazing product which people love and are happy to pay for. And you will be fine! :)

Part 1 - Roger

This is one of the most inspired moments in the history of athletics: Roger Bannister crossing the finish line on 6 May 1954 during a meet between British AAA and Oxford University at Iffley Road Track in Oxford, United Kingdom, where he became the first human to run the mile in less than four minutes. An extraordinary achievement which was, at the time, considered impossible. Seeing the picture of Roger crossing the line gives me goose bumps. Each and every time. This picture evokes so many emotions in me - in a lot of ways it’s the perfect capture of the perfect moment.

But we are getting ahead of ourselves. For now - keep Roger in mind, we will meet him again later.

Reaching the finish line, never walking, enjoying the race. These three, in this order, are my goals. ~ Haruki Murakami

This presentation is a story about running, running a business and running through life at large. And how all these things can be treated the same. A story about lessons learned. A story about failures, perseverance, winning and the sheer joy of accomplishment - large and small. And it is a story why we should never walk in life.

Let’s get ready… toe to the starting line.

Part 2 - A True Story

We embrace pain. Pain is the purifier. ~ Runner’s Proverb

In 2008 I found myself with pretty severe depression. A condition and feeling which I never experienced before. I felt helpless. I didn’t know what to do. And I didn’t know how to get out of it.

Over the course of some months I first talked with friends and family and tried to fix it myself. Thought I could figure out what it was, mend it and move on. But it didn’t work.

Eventually, I knew that I needed help. So I searched for help. And found a fantastic therapist. She worked with me through a lot of issues in my past - but more importantly she asked me why I stopped doing sports years ago, having spent most of my youth engaging in one sport or another. I didn’t know the answer. Life just got in the way.

My therapist asked me which sport I enjoyed most. The answer was immediately clear to me - running. Running is primal. It’s hardwired into our brains. Humans are born to run.

So I started running again. I ran for life. For my life.

About 10,000 miles later, after endless hours on the roads and trails in every place I lived & visited ever since, running with and without company - I learned something. I learned that the fundamental lessons which running taught me, hold true for running a startup. And running through your life.

They are the essential rules for any entrepreneur. They are the essence of living life. At least if you want to do the impossible - and break your own four minute mile.

Three - Ten Principles

Somebody may beat me, but they are going to have to bleed to do it. ~ Steve Prefontaine

Train hard. There is no way around it. It’s the foundation. Everything else will depend on it.

When I built my first startup, fresh out of university, I didn’t know anything. I had a huge ego and thought that I knew everything there is to know about building and running a startup. But I didn’t. I went into the race without training. It was ugly. I learned on the fly - which is fine. But I had people rely on me. And they suffered from my level of unpreparedness.

Train hard. If you want to race, you need to pour your heart and soul into the preparation. This is where races are lost and won.

Make sacrifices. Emil Zapotek is one of the greatest runners of all times. Emil wasn’t terribly talented or genetically gifted to run. But he made sacrifices. More than anyone else. And he won.

Building a startup requires huge sacrifices. I slept on the floor in my company when I worked through the night. I blew up a long-term relationship. I lost friends as I didn’t have the time to see them anymore. My first startup was a financial disaster. It was a sacrifice which, in the end, made me a better entrepreneur. And my following ventures so much better.

Make positive choices. Your life will be full of decision making points. Make sure you choose wisely. Choose the ones which will have a positive impact on you.

I made a choice in my startup which I paid dearly for - against my gut I chose the investor with the better term sheet. I wanted the money. When the company went downhill, it turned ugly. I didn’t make a positive choice - and paid dearly.

Seek your potential. I recently read that, unless you are an ultra-elite runner, you always have the ability to run faster. Always. I believe this is true for everything we do. Only very few people tap their whole potential.

Seek out your potential. Figure out what you’re good at and get better at it. Don’t waste time getting mediocre at something you’re bad at. It’s not worth it. I learned so much about myself doing startups, working at big, fast-growing companies and helping other entrepreneurs. I think I know my strengths now - and I am sure I haven’t reached the limits of my potential. Keep pushing. Become Muhammed Ali.

Set high goals. Remember Roger? When Roger set out to break the four-minute mile, people believed that the human body will never be able to run that fast. Doctors were of the opinion that the heart will explode if you run that fast. And despite all this, Roger knew that it was possible - he set his goal that high. And only weeks after he broke the four-minute mark, a handful of other runners broke the same barrier. The barrier was was only in their heads.

You can’t change the world if you don’t set out to do so. Be bold. Dream big. Who would have thought that we can put a man on the moon? Or that a little social network for Harvard students can become the largest website on the planet?

Relax under pressure. Look closely at Shalane Flanagan’s facial expression on this photo. Shalane is the world-record holder for the 3000m. And she is completely relaxed and in the zone while racing.

You can’t perform to the best of your abilities if you are tense. You will annoy the people around you. I know - I was tense when I did my first company. I yelled at people. It wasn’t nice - and it didn’t help. Learn to relax under pressure. Breathe deep - it will help you.

Attack pain. Pain is inevitable. You will feel pain. You can choose to let it dominate you or choose to attack it, ignore it, grind through it. At the end pain is just a neuro-signal. You can will your way through it. Pain is the purifier. Be Arnold.

I can’t count the amount of times I came to a point where I just wanted to stop. Wanted to give in to the pain. Or just take a break. Both in running, life and running my businesses. Ignore the feeling. Grind through. It’s just a neuro-signal. If its worth it - push on.

Push the pace. Go out and don’t hold back. Don’t be the guy who races in the shadow of others and tries to sneak by on the last few meters. Keep on pushing the pace. Steve Prefontaine to this day is the most courageous of runners in the world. He kept pushing the pace. Always.

You chose to start a company. Now do it properly - with every fibre of your body, continuously pushing the pace. Be bold. It’s the only way to succeed as a true leader.

Work as a team. Running looks from the onset like a very solitary sport. It is not. Roger had two good friends pace him through the first two and the third round of his four-round record run. Your team is everything. Without them you are nothing.

Embrace the spirit of the team in your organization. There is no room for anything else - you have to work as one, for a common goal. Even the brilliant Steve Jobs couldn’t make things happen without his team.

Run to win. History has it that Pheidippides died after reporting the Greek victory over Persia in the Battle of Marathon to Athens. Treat the marathon with respect. Run to win. Every time.

Don’t get into business if you aren’t in it for the win. And do what it takes to win. Honor Pheidippides. And run like Usain Bolt.

Encore - Two More

I’m going to work so that it’s a pure guts race at the end, and if it is, I am the only one who can win it. ~ Steve Prefontaine

Defeat the wall. When you run a marathon you will hit the wall. After 21 miles of running your body simply runs out of glycogen and wants to shut down. This is the point where your will is tested most. You push through it. You force carbohydrates into your body although your stomach started cramping up at mile 15. But deep down you always knew - it is possible. So you persevered and set one foot in front of the other. Repeat. And repeat.

In every venture, I hit the wall. There always was the day when I didn’t want to get out of bed. Where I just wanted to throw it all down the drain and give up. Persevere. Get dressed, get to work, get going. Force yourself through it. It won’t last. You can defeat the wall.

Relentless Focus & Boring Consistency. Running is all about spending hours and hours doing the same thing - running. You need to have laser-sharp focus and be consistent. There is no way around.

In your company there is nothing more important than making the main thing the main thing and then executing on it. It’s not flashy & glamorous - but it is how you will get to your goal. I ignored this piece of advice in my first company. I kept chasing the next new thing. And failed.

Again

1. Train Hard
2. Make Sacrifices
3. Make Positive Choices
4. Seek Your Potential
5. Set High Goals
6. Relax Under Pressure
7. Attack Pain
8. Push The Pace
9. Work As A Team
10. Run To Win
11. Defeat The Wall
12. Relentless Focus & Boring Consistency

One Rule

The man who can drive himself further once the effort gets painful is the man who will win. ~ Roger Bannister

The first rule is actually the first and second rule of everything you do.

If you don’t have a big, fat grin on your face when you run, don’t do it. Have fun while you’re out there. It is your race.

Remember

Nach dem Spiel ist vor dem Spiel. – After the game is before the game. ~ Sepp Herberger

The only good race pace is suicide pace, and today looks like a good day to die. ~ Steve Prefontaine

NEVER WALK.

I spent this week at the excellent Startup Week 2011 event in Vienna, Austria. I talked with numerous entrepreneurs, founders, hackers and builders. I received a lot of interesting questions, was asked for advice on a wide range of topics and found myself in the middle of many exciting discussions.

Now - Personally I don’t think that my advice is worth a lot. But here’s the deal: I was deeply impressed by some of the startups I met - startups and their founders who truly want to change the world. Who are passionate, driven and humble - the finest qualities you can find in an entrepreneur. And if they think I can be helpful for them, I want to help.

So - if you’re building something which is solving a real problem and making the world a better place (and I mean it - in this context I don’t care about the next social photosharing mobile app, even if it might be a very viable business idea) and want genuine no-bullshit advice, ping me (you know where to find me - don’t you?).

I promise honest, humble advice. I will tell you if I don’t know the answer and introduce you to people who might know. No bullshit.

And if this works - who knows? I know many amazing people, all of them much smarter than I am, who might be in for this as well. Let’s change the world for the better. Together.

During the inaugural Startup Week 2011 in Vienna, Austria, I had the great pleasure to talk about the intersection of two of my main passions: Business and Running (the other two are my family and good espresso).

Below the deck from my talk - I will put together a properly commented version sometime soon as the deck doesn’t stand very well on its own.

As part of my attendance at Emerce’s eDay conference in Rotterdam I was asked to lead a discussion on some of the larger trends we’re seeing happening on the Internet at the moment. Below is the short deck I used as a backdrop.

What do you think? Makes sense? Right on? Completely off?

Last week I spoke at Emerce’s eDay conference in Rotterdam (Netherlands). Emerce reached out to me with the question: “How did Mozilla win?”. In the follow-up calls with the Emerce team we discussed the “David vs Goliath” situation in which Mozilla found itself, competing against Microsoft when we launched Firefox only six years ago, and how we managed to grow its userbase to a staggering roughly 500 million people using Firefox worldwide.

The presentation below is my humble attempt to explain this phenomenon. Granted you need the voice track to make complete sense of the presentation - but probably interesting nonetheless. Feel free to contact me if you have questions or comments.

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This is the way the world ends - Not with a bang but a whimper.

T. S. Eliot

Yesterday HP announced that they would (among other things) spin off their PC business (and thus effectively divest from it). Take note of this event - as it will mark the end of the PC era. At least the PC era as we know it.

A little while ago IBM completely divested from their PC business by selling their notebook unit to the Chinese manufacturer Lenovo. Before that HP bought Compaq. Dell is struggeling. PCs will go the way of television sets - brand manufacturers (often companies which built their fortunes on this very business) can’t compete anymore and divest. PCs will be built by upstart Asian manufacturers. They become complete commodities. The exact same thing is happening (in a later stage) in TV sets: There is basically no large, branded manufacturer left (or they are bleeding money such as Sony).

For me this is the end of the PC era. It went with a whimper.

Now hail the new king. Long live the smartphone.

Mergers and acquisitions are notoriously hard to execute well. Numerous sources quote the success rate of M&A activity across industries at only about 30%. That’s two-thirds of all mergers and acquisitions fail.

Yet - Startups seem to have a huge appetite for acquisitions (especially here in Silicon Valley). Baffling.

The world around us has moved on - yet a lot of us (yours truly included) are somewhat stuck in the past. That is - the PC era. If you ever had a doubt that the future is mobile and that this future is here - read this interview excerpt from Charlie Rose talking with Glenn Hutchins (Hutchins is the Co-CEO of Silver Lake who just made a killing selling Skype to Microsoft). “What made Skype attractive to you? It didn’t look like such a big deal when eBay owned it.” “I think that mobile telephony, or broadband mobility, is potentially the largest investment opportunity of our lifetimes. Rough numbers: There are 5 billion subscriptions to handsets today, 4 billion devices. We’re 25 to 30 years into the PC trend and there’s only a billion PCs in use. There are low­ single-digit billion bank accounts, TV sets, credit cards. These are some of the largest consumer markets ever developed. But 4 billion handsets. Why can’t you make a phone call in New York? Because it’s like everybody is trying to get on the FDR Drive at one time. Everybody wants to be on the network. These devices that we use now are increasing the data that go across the network by 10, 15, and 20 times, which means that the use of networks is at least doubling every year. We’re in an economy in which people are worried about whether it’s going to be 1 or 2 percent growth, and you’ve got a part of the world that’s doubling every year.”

John Carmack, legendary creator of the first and some of the finest 1st-person shooters, kept some sort of work diary in the form of .plan files. They serve as a form of microblog and capture my work and thoughts for the day (more: http://www.team5150.com/~andrew/carmack/plan.html). As we just launched Web FWD, the innovation accelerator program from Mozilla, I will start creating .plan files and post them to GitHub (actually I have a bunch of .plan files up from the early days of my work on Web FWD). When I accomplish something, I write a * line that day.

Whenever a bug / missing feature is mentioned during the day and I don’t fix it, I make a note of it. Some things get noted many times before they get fixed.

Occasionally I go back through the old notes and mark with a + the things I have since fixed. Feel free to follow along…