Here’s the article:
Your organization is growing rapidly, which is good. Or so you think. When organizations (including companies as well as non-profits) grow, they tend to hit plateaus they must pass to successfully continue on their chosen path. Unfortunately, growth rarely (if ever) happens linearly, and to scale an organization from garage to multi-national corporation you need to accomodate massive changes along the way. You will have to change the way you operate. Often this change is painful. When you were three people in a garage everyone knew about and helped out with everything. This won’t happen when you run and manage a multi-national corporation. Growth will change your corporate culture from one built on deep levels of trust to systems which include the awkwardness of more formal, scheduled performance reviews. This change will touch the very root of your organization: when a little sandwich shop that you start in the hopes of changing the world one sandwich at a time evolves into a national food chain, you start measuring success in three-letter acronyms. This challenge is compounded at the point you no longer become the sole master of your own destiny: shareholders demanding quarterly growth and board members calling for industry benchmarking change your focus. You inadvertedly find yourself, as Author Steven Pressfield once described, “in the belly of the beast.” And this beast demands to be fed by further growth. But your evolution need not occur in these ways. Organizations choose not to grow at any price. These organizations put their principles, values, beliefs - and quite often a specific mission - first. Take for example the backbone of Germany’s industrial success, the Mittelstand (loosely translated into English as “SMBs”: small- and medium-sized businesses). These companies are typically just a few hundred employees strong. They pride themselves in producing to the highest quality standards. They are the reason why “Made in Germany” is such an accolade. And they choose to be big fish in small ponds. They are typically family-owned businesses with strong beliefs and principles. These are companies where the founder typically hangs in the CEO’s office and is often his great-grandfather. What’s notable is how these companies deliberate choose to prioritize values (such as quality and the way they treat their employees) over growth. Quite a few of these companies would be highly attractive acquisition targets for large multi-national corporations or prime candidates for a public listing on the stock market. Yet their owners decided to grow slowly, organically and only to the extent that their values & beliefs are preserved, if not advanced. The Open Source movement is a fascinating angle on this approach to growth. In Silicon Valley (and now, effectively around the world) a growing number of founders, dissatisfied with the way business is done, start companies with Open Source at its core. They are out to change the world - but they are doing it under their own terms, with strong beliefs, cultures and missions. Mozilla, the maker of the popular Firefox web browser, is one of these organizations. Founded as a non-profit with a mission to “provide choice and innovation on the Internet,” Mozilla took on the mighty Microsoft Corporation and turned a virtually monopolized browser market (thanks to Microsoft’s Internet Explorer) into a thriving and competitive ecosystem. Firefox is a feather in Mozilla’s mission cap. To continue building on its mission, Mozilla is creating WebFWD, an incubator and accelerator program for mission-based Open Source organizations. Among the first organizations Mozilla is fostering is CASH Music, a non-profit startup founded by musicians to help fellow independent artists market themselves on the Web, effectively making artists masters of their own destiny. When CASH grows, Mozilla grows - not in revenues or headcount, but in expanding its core mission. Let’s return to that sandwich store. There is a wonderful story from the founders of 37 Signals, a software company which itself chose to grow slowly, carefully and organically. Their neighborhood has a sandwich shop which makes the best sandwiches. They use carefully-selected ingredients and ensure each sandwich is freshly-made. Customers love the little shop. Every day at lunch time long queues form outside of the shop. Usually the shop sells out long before meeting all the demand. They are often asked why they don’t produce more sandwiches, as higher production would allow them to serve more customers, grow their business and ultimately make more money, The owner’s response is: “it wouldn’t be the same shop. It would hamper quality as we couldn’t deliver the same product for our customers.” They wouldn’t be able to change the world one sandwich at a time. Building your organization around true values, beliefs and a mission gives it a human quality. Which can be far more valuable than growth and sheer profit. And just what we need. As human beings.
It all began with a rather innocent question: After experiencing the amazing qualities of operating completely in the open here at Mozilla, creating and leading some very exciting Open Innovation projects such as Mozilla’s Design Challenges & since last year our WebFWD accelerator program and thinking, analyzing, discussing and talking more and more about Open Innovation and how we do things here at Mozilla… wouldn’t it be great if we document this knowledge and thus enable more organizations to benefit from it?
This lead to a slightly less innocent tweet:
And so here we are – I am going to write this thing. And use this blog as a testbed for ideas, text fragments, discuss interesting source material I find elsewhere and generally rant about my inability to express myself properly in the English language.
To be clear: Anything I write will only be possible because I stand on the shoulders of giants. So many awesome people have done so much amazing work on this - both inside and outside of Mozilla. I am just a messenger.
Join me for the ride - and please provide feedback!
As you might know I am pretty obsessed with good artisan coffee making (espresso to be precise). Recently I found myself in the middle of a long discussion about the “right” equipment.
Good coffee is pretty much a function of 1) the right beans, 2) the right grinder, 3) the right machine, 4) the right temper and 5) skill. If you ever want to go down the espresso rabbit hole - here’s my current top 5 list.
Today I had the great honor & pleasure of keynoting the Technology Convergence Conference 2012, talking about Open Innovation, Mozilla and how to apply all this to your business.
The summary of my talk reads:
Open Innovation, Crowd Sourcing, Community-driven Innovation, Chaords (describing organizations which are a mixture of Chaos and Order) - the world around us is using "open" as the new default. Fearless leaders are unleashing the beast which redefines the core of many innovation practices. Pascal Finette recounts the inspiring story of Mozilla, the Open Source non-profit organization which managed to break Microsoft's stronghold on the browser market and today has more than 450 million users worldwide. Alongside this fascinating David vs Goliath tale you will learn how Mozilla won by being completely open, working with the wider community and redefining how innovation can be done. At the end of his session, Pascal will have enabled you to tame the beast and make it work for you and your organization.
Here’s the deck:
Every once in a while (and sadly more often than you would expect) I get an email from someone seeking an investment (be it through Mozilla’s WebFWD program, FoundersLink, the VC fund in Europe I am a venture partner at or my own angel investing) which just riles me. Take this prime example (details have been removed to protect the innocent):
Dear Sir / Madam ! Please, examine the project searching for investments. The ∎∎∎∎∎∎∎∎ project is oriented to USA market and the company will be located in the USA. ∎∎∎∎∎∎∎∎ is the project in the mobile area of business, providing ∎∎∎∎ ∎∎∎∎∎∎∎∎∎∎∎∎∎ ∎∎∎∎∎∎∎∎∎∎∎∎ (∎∎∎∎∎, ∎∎∎∎∎, ∎∎∎∎∎∎∎∎∎, ∎∎∎∎∎∎∎∎, ∎∎∎∎∎, ∎∎∎.) ∎∎∎ ∎∎∎∎∎∎∎ ∎∎∎∎∎∎∎. ∎∎∎∎∎∎∎∎ is going to be an online ∎∎∎∎∎∎∎ ∎∎∎∎∎ ∎∎∎∎∎ ∎∎∎∎∎ ∎∎∎ ∎∎∎ ∎∎∎∎∎∎∎ ∎∎∎ ∎∎∎∎∎∎ ∎∎∎∎∎∎∎. It has more than ten years of experience developing ∎∎∎∎-∎∎∎ ∎∎, ∎∎∎-∎∎∎∎∎ ∎∎∎ ∎∎∎∎∎∎ ∎∎∎∎∎∎∎∎∎∎∎∎. ∎∎∎∎∎∎∎∎ project was implemented as a first attempt to ∎∎∎∎ ∎∎∎∎ ∎∎∎∎∎ ∎∎ ∎∎∎∎∎∎∎∎ ∎∎∎∎∎ ∎∎ ∎∎∎∎∎∎∎∎∎∎∎∎ ∎∎∎∎∎∎∎. Its products are based on ∎∎∎ ∎∎∎∎∎∎'∎ ∎∎∎∎∎∎∎∎. ∎∎∎ ∎∎∎∎∎ ∎∎∎ ∎∎∎∎∎∎∎ ∎∎ ∎∎∎∎∎∎∎∎ ∎∎∎∎∎∎∎∎∎, ∎∎∎∎∎∎∎∎∎ ∎∎∎ ∎∎∎∎∎ ∎∎∎∎∎∎∎∎∎. ∎∎∎∎∎∎∎∎ ∎∎∎∎∎∎ ∎ ∎∎∎, ∎∎∎∎∎∎ ∎∎∎∎∎∎∎ ∎∎∎∎∎∎. ∎∎∎∎∎∎∎∎ ∎∎∎ ∎∎∎∎∎∎∎∎ ∎∎∎∎∎∎∎ ∎∎∎∎∎∎∎∎∎∎∎∎ ∎∎∎ ∎∎∎ ∎∎∎∎∎∎∎∎∎ ∎∎∎∎∎∎∎ ∎∎∎ ∎∎∎∎∎∎ ∎∎, ∎∎∎∎∎∎∎∎∎∎∎∎∎, ∎∎∎∎∎∎∎ ∎∎∎ ∎∎∎∎∎∎ ∎∎∎∎∎∎∎∎, ∎∎ ∎∎∎∎∎, ∎∎ ∎∎∎∎∎, ∎∎∎∎∎∎∎∎∎, ∎∎∎∎∎∎∎∎, ∎∎∎∎∎, ∎∎∎∎∎, ∎∎∎. ∎∎∎ ∎∎∎∎∎∎∎ ∎∎∎∎ ∎∎ ∎∎∎∎∎∎∎∎∎∎∎ ∎∎∎∎∎∎∎ ∎∎∎ ∎∎∎∎∎∎∎∎, ∎∎∎∎∎∎∎∎∎∎∎∎∎ ∎∎ ∎∎∎∎∎∎ ∎∎∎∎∎∎∎∎∎ ∎∎∎ ∎∎∎∎∎∎ ∎∎∎∎∎∎∎, ∎∎∎∎∎∎∎∎∎∎∎∎∎ ∎∎∎∎∎∎∎∎. Investment costs - $867 549 Please, find Executive Summary of the project below. I will provide any other additional information if necessary. Thank you for your time and consideration. I am looking forward to hearing from you. Attached Documents: 3-Page Executive Summary & Financial Forecast
BEWARE - RANT FOLLOWS:
Here’s what’s fundamentally wrong with this email:
So - do yourself a favor (and significantly increase your chances that people will actually read your pitch) and do your research, tell us clearly what you do, why we should care and what you want from us.
P.S.: Found my rant a bit harsh? I just don’t want to waste your (or my) time. Read this.
Phil Morle, good friend and cofounder of Pollenizer recently sent me his reading list for disruptors. The list is too good to not share:
All credits for this awesome list go to Pollenizer. Go, check them out - they are fantastic folks!
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.
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! :)
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.
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.
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.
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.
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.
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
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.