Happiness Manifestor: A framework for picking your battles, while keeping your vision

I want to introduce you to a new personal productivity tool, that I am testing with myself, which I think will help you as an entrepreneur. You are welcome to use it even if you are not one, but YMMV.

As a founder there will be many situations when you will disagree with many folks in your organization. With your cofounder, your investors, employees, etc. I have learned the hard way that many of these disagreements result in irreparable damage to relationships, and in some cases permanently. You will become very unhappy in this situations. This tool is to help you avoid many unhappy moments.

Of course, it is very hard, in fact sometimes impossible to be objective about the situation or have a very high level of Emotional Quotient to ensure you are doing the “right thing”.

One of my investors ages ago taught me this lesson early, but I have a blind spot, which I have learned, which is my innate desire to be the “smartest person in the room” and also to be the person that’s “right most of the time”.

This is still in the works, so by no means am I an expert, take this tool with a lot of salt.

When you have a vision as a founder to solve a problem, the first thing I’d advice you to do besides write it down, is to put it in a notepad file or sticky notepad and keep it on your desktop screen all the time. Write down also a list of things you wont compromise on and things you are willing to let go.

Here’s an example: I am making this up on the fly, so bear with me.

Your vision would be, for example, or what happens when you achieve nirvana.

AmazingCo envisions a world where working mom’s are fit and healthy and eliminate their propensity for lifestyle diseases.

Now for your mission statement - or why you exist.

AmazingCo exits to make the best fitness application for working mom’s who have to juggle multiple chores and priorities by making it easier to integrate exercise into her daily routine.

Then the next thing I’d do is to make a list of values - things you  and your cofounder believe in firmly – these will define your culture to a large extent: For example:

1. Speed – we value people that move quickly and make decisions fast

2. Open communication – we value honest feedback

3. Collaboration – we believe people should work with one other well, team before self.

etc.

These will help you determine who you’d like to hire and how they’d be successful in the company.

You and your cofounder may have disagreements about this as well, and that’s the whole point of this exercise.

As a side note, dont be fixated on having 3, 5, 7 or some odd, but arbitrary number of values – list as many as you care. Of course, larger the number, the harder it gets to communicate them. If you need help, read the list of values and culture of the best leading technology companies.

When you have disagreements with your founder, the first thing to know about your self, is to find what triggers and what emotions overcome your self, when you feel disappointed, angry or despair. This is the MOST critical part. I would say the first step is knowing more about yourself.

What I found was that I lacked the ability to overcome the emotional barrier. I recognized the barrier, but I was unable to not go “ballistic”, when that happened. By ballistic, I mean, getting really upset enough to disagree and try to win the argument so I could prove that I was smarter or that I was right.

So, the best thing to do is to appoint yourself a helpful friend, colleague or significant other as your “personal trigger detector”. This person’s sole job is to remind you when you are getting into the unproductive zone.

When you have finished your mission, vision and values, the next thing you need is your “happiness manifesto”.

This list of things is items you consider sacred to your happiness. They should align closely with your values, BTW, so dont be surprised if you repeat them here.

1. I will be happy when things are clean around my work area

2. I am happy when people acknowledge my points, even if they are not valid.

3.  I am happy when I am able to get food on time.

The next part of your happiness manifesto, is what you are willing to compromise.  I have found that this compromise list feed off the values / happiness lists.

What are you okay with because you chose to value certain things will be on this list.

1. I am okay with other people having a messy work area.

2. I am okay if we have many bugs in our product because I value speed over perfection

3. I am okay with many difficult questions from employees because we value open communications.

Then I would put this on your communications and keep reminding yourself to pick your battles.

If a situation arises which triggers responses from you that you dont like, remind yourself to look at your compromise list to see if it deserves a response.

Most likely it wont deserve a response. Move on.

Pick your battles wisely as an entrepreneur – use the happiness manifesto and let me know if it works for you.

It is not that I dont think you are great, but I am not confident about my ability to pick winners consistently

I had a very interesting conversation with an entrepreneur yesterday who I was keen to invest in. He had soft circled $250K of his $750K seed round. I have been a big champion of him and really respect his determination, thoughtfulness and diligence.

I committed to $50K and was going through the details of the investment with him, but letting him know that even if it took him a while to raise the remainder of the funds, I would ear-mark the $50K for his venture.

He then asked me “You know and influence a lot of other investors as well, can you please convince them to join the round”. I said that I can introduce him to investors who have invested in the past with me, but they will have to make their own decision.

I was not going to lean in on them to invest.

He mentioned that I “leaned in” on another VC to invest in a portfolio company, which is what he heard from the other entrepreneur, who I had worked with.

He was correct. I did lean in. So, the signal I sent him (although that was not my intent) was that I was not as committed to his venture as I was to other the one where I leaned in.

First, I dont have as much influence as entrepreneurs give me credit for. That’s just the truth. They may attribute the fact that I am at Microsoft Ventures as a signal that the corporation thinks this is a good investment, which is absolutely untrue.

Second, I believe there’s a HUGE difference between an angel investor (who I dont like to lean in on) versus a institutional investor (who I will lean in from time to time).

Most angel investors invest by reputation, connections and referrals. VC’s will judge an entrepreneur and their opportunity on its own merit, do their required due diligence and will likely pass EVEN if there was a strong referral from a person they trust.

Referral’s get you in the door with an institutional investors, whereas with an angel investor it will usually get you a deal.

Most angels I know have “day jobs” or “other interests” with angel investing being their side project, activity or means of giving back. That does not mean they don’t want a return on their investment, it just means they don’t do as much diligence as an angel group or an institutional investor would.

Knowing that, I believe the biggest challenge is the confidence in my ability to pick winners all the time. I am investing as an individual investor because I believe in the entrepreneur. I don’t know if that entrepreneur, problem set, idea or market is right for the other angel investors I know and invest with.

Well, I do know that to a certain extent, but with angel investors, the relationship I have would be personal as well as professional. With VC’s it is rarely (exceptions exist) personal.

So, when I meet the other angel investors over dinner, with their family, I don’t like having uncomfortable conversations about “the investment that went south”. Many of them are great folks, but not mature enough as an investor to realize many of these angel deals (in fact 70-80% of them) will return in loss of their investment.

Many of the angel investors I invest with are not in the “early seed market” for the long haul and have not seen ups, downs, sideways deals, etc. So, end up investing in 1 or 2 companies, solely because of referrals and recommendations.

I don’t think I have confidence in every deal I do to end up returning my money or generate a great return.

That does not still mean I dont believe in the entrepreneur when I invest in them.

This is truly one of those cases, when its not you, its me.

Are accelerators failing startups or the curious case of “zombie startups” jumping from one accelerator to another

On Wednesday I had a chance to interact with 31 entrepreneurs in the IoT space at Plug and play technology coworking space in Sunnyvale. There were 10 companies in the Healthcare IoT area, 11 in the connected car and 10 in the home automation (IoT) space. Plug and play has 3 sponsors for their programs including Bosch, Johnson and Johnson and StateFarm, so the companies chosen were deemed a good fit for those sponsors to help them with innovation and startup scouting.

The interesting part that was very obvious to me when I looked at the list and later spoke with many entrepreneurs was that 19 of the 31 had gone to another accelerator program before this one. Of the 10 companies in the connected home space, 3 were from the Microsoft Accelerator itself. Of the 31 companies, 28 were outside the Silicon Valley, which makes sense (that they would want to move to the valley). Two that applied were from YCombinator as well, so, there were not just companies from tier 2 accelerators.

I asked the entrepreneurs why they felt the need to go through another 3-4 month program after they had been to one before.

The not so surprising conclusion is that for many (not all) companies, the 4 month accelerator model is largely insufficient. I did learn that most entrepreneurs did value the support, mentorship and advice provided by the accelerator program they were with before, but many had insufficient “traction” to justify a series A after their “acceleration”.

Of the over 3500 companies funded by venture capitalists in technology last year, less than 150 went through accelerator programs. Of them, nearly 50% were from YCombinator.

At the same time, over 1200 companies went through accelerator programs in the US alone last year. Of the over 1200 companies, 68% have gotten some form of funding (or about 800 companies) is the claim from the accelerators.

Which means about 650 (800 minus the 150 who secured VC funding) companies that “got funded” after an accelerator program, have not secured Institutional funding from a VC, but either from angels or from other accelerators.

If you look at the angel data from the US, of the over 4000 deals funded by angel investors in technology, < 5% or about 200 companies have been through accelerators before.

The result is that 450 companies that were claimed as “funded” after an accelerator program actually went to another accelerator.

Going back to the numbers above, if out of the 1200 companies funded by accelerators, about 450 (or 30%) went to another accelerator and 20% of them (on average) shut down, fail or close, then really about 50% of the startups from the accelerator programs or about 600 companies should be technically “funded” institutionally, but that number is 150. So, there are 450 “zombie” companies.

So the question is – what has happened to the “zombie” companies?

There are only 3 possible answers:

1. More companies have shut down that the numbers reported by accelerators.

2. Many companies end up becoming “cash flow positive” or “break even”, so they chose to not raise funding, but instead grow with “customer financing”.

3. More companies are “zombies” or walking dead – trying to raise funding, not succeeding, but not growing fast enough to justify institutional Venture funding.

I have my hypothesis, that it is #3 that makes up most of the “zombie” companies, but I’d love your thoughts.

If the measure of value that an accelerator provides (as measured by entrepreneurs) is funding, alone we are failing big time.

Reducing complexity and making choices – things I learned from Apple’s product designs

The other day a friend who was closely watching the Watch and Macbook announcements mentioned to me that Apple had introduced its new notebook with only one port - the USB C.

He gave many examples of why he need more ports, simultaneously, including charging the Macbook and a phone at the same time, for example or being at your desk and transferring files from a USB flash drive.

I thought they were all good examples actually, and situations I had faced before. Then I decided to challenge all the assumptions he had made with the fact that those situations are the exception not the norm.

With a battery life of 12 hours, there were very few situations where you will need to charge and give your iPhone some juice as well. You could plug the notebook from the power unit and it would go for hours even if it had to charge your phone. Similarly with its long battery life, the chances were slim that it would really run out of charge for “normal” usage.

Then it struck me that most of us do the same thing with all of our daily possessions. Take a look at your backpack for example. There are surely 100’s of things that I have in my own backpack that I have rarely used, but need for a “rainy day”.Truth is, during those “rainy days”, I had options.

I dont need 3 pens because there are 3 pen slots in my bag, neither do I need my check book, etc. I dont need a backup credit card – well I have not for the last 3 years, but I do carry them all and more things.

I believe we make these choices because of our fear of “what if” and apply it to the worst case situation. Which to a large extent prevents us from the “what if” and enjoy the best case scenario.

Optimize for the “likely case” and plan for your options might be a better situation – at least in my case. I think that’s a key learning from the USB-C port discussion.

Trying to save for a rainy day is great, but too much saving results in most days being gray, without enjoying the sunshine that’s all around us.

Trends among the Ultra High Net Worth Individuals that will shape Global attitudes

There are 170K+ individuals in the world who have more than $30 Million in net worth according to the Knight Frank report on UHNWI. They own a total of over $20 Trillion in wealth. That’s a staggering 25% of all wealth in the world. Owned by less than 0.00001% of the population. By 2025, the number of UHNWI is expected to be at 230K.

Over 82% of these people had their wealth increase over the last year (2014) and over 80% expect it to increase the next year as well.

The biggest concern about their ability to generate more wealth (as if that’s needed) was family succession issues.

What does their asset allocation look like? 45% in equities (stocks), 10% in home (property) and rest in other assets (cash, gold, art, etc.)

Where are these UHNWI located? 45K in the US, 60K in Europe, Latin America has about 10K and Asia the rest at about 40K+.

Surprisingly only 40% were inherited wealth. The rest made money via entrepreneurial means – real estate and “other business” were the top professions. Technology UHNWI were less than 5% of the total.

The other surprising part of the equation is that there are 1844 billionaires, 38K $100+ Millionaires and over $172K UHNWI. Over 17 Million people are merely millionaires. Turns out the millionaires are the new lower middle class.

As the “poor” become “richer” the “rich” get “wealthy”. There is a direct correlation between the increasing middle-class, their aspirations and the wealth of the UHNWI.

The most important cities where you should look for UHNWI – London, New York, Hong Kong and Singapore top the list, San Francisco is in the top 20, and Mumbai is the only Indian city in the top 50.

The air traffic information from private jets is another interesting story within the story. The top 10 routes for private jets are mostly from and to the US, but the fastest growing are mostly to the US from other places. Meaning even if wealth is created elsewhere, most end up in the Americas – to invest, to hang out, etc.

Where are they going to and where are they coming from? They are going from China, India to the UK and Singapore.

So where’ the money – Chinese investing in Miami, commercial properties in New York and London.

The Indians are investing in Europe more – London, Zurich (not a surprise here).

If you are an entrepreneur looking to raise funding from UHNWI, you should expect to meet with their adviser than with them directly apparently. Most of the UHNWI prefer to work on their own business and spend less time mentoring or guiding anyone but their own kids.

Overall it is a very interesting report. Worth a long plane ride read.

Apple Watch is going to hurt Twitter the most. Law of unintended consequences

I have been reading the multiple blog posts on the Monday “Spring event” for the Apple watch.

Having worn the Microsoft band for a few months now, I think I now know what I need from a wearable. Note I did not say “watch”. I gave up wearing watches many years ago and switched to a phone for time. I really don’t have a need for a watch and so don’t many others, but they will still buy the Apple “watch”.

I used the fitbit for activity tracking, so I was not actively looking for a fitness tracker before I got the Microsoft band. Being an active user, I think that I want most is “Smart Notifications” from a wearable. That it will track some fitness is an added bonus.

With the very small form factor, it is absolutely important that the right amount of “relevant information” comes to the wearable.

If you just take an email and strip out a few things and send it to the wearable, that wont help.

What you really need is a summary of the relevant portion of the email and the ability to dismiss, delete or provide contextual reply – the relevant actions may differ on the notification itself, but the action should result in not having to pick up the phone for quick responses, which your watch can handle.

Lets look at email notifications first and email call to actions.

I am really surprised the the Microsoft band has no delete or archive actions on the emails received. Which is pretty awful actually. I am pretty sure 60% of all emails that I receive are to be deleted after reading immediately or archived. Of the remainder, I could guess that 50% of them would be able to get a simple answer – Thanks, OK, Sounds good, Approved, etc. I am surprised that does not exist on the Microsoft Band.

The notifications on the Band are not “smart”, which I suspect Apple will get right, because of 3rd party developers.

If you get a bunch of smart app developers to focus on the 8 things most folks do every day, on the phone – check news, weather, sports, finance, email, social networks,  text messages or understand who is calling, then you can pretty much drop the need to pick up your phone by 50 – 60% of the time.

So here are the 3 unintended consequences of a successful Apple Watch launch according to me.

1. The battery life on your iPhone will “increase” since you wont “pick it up and use it as often”. Since 30% (at the low-end) and 60% (at the high end) of the stuff you use the phone for now, you can get on the watch. The battery life wont increase really, but you will charge the iPhone a lot less than every day or twice a day for heavy users.

2. Breaking news alerts, weather, sports news alerts will be more contextual and smart. So you know “just in time” instead of having to scan all of Twitter or social networks to find out what’s hot.

3. Over the longer term (5-7 years) obesity will drop among the “rich who can afford Apple watches” even further. Having a fitness tracker on your wrist that also does other things motivates you to take action.

Which brings me to Twitter.

I think of Twitter a global platform for “what’s happening as it happens” even before the media organizations get to know about it. Twitter knows first. And Twitter’s job is then to let everyone else know.

Well if you can summarize what’s happening and send it via a notification in a smart way, to all those who have the watch, then you dont have as many people posting on Twitter, or retweeting, instead you will increase the # of “consumers of the Twitter feed” even more, reducing the “producers”.

The folks that are “marginal users” of Twitter will use it even less. Why? Largely because they are in it to get information, not share as much. As much as 80% of Twitter’s users consume it but post < 10 times a month.

So, I think Twitter will become less and less relevant to them and more a “protocol” which can easily replaced by other systems.

Another loser from the Apple watch will be those that depend on Advertising on the mobile (Facebook, Twitter, Google, etc).

When you have a watch and use your mobile phone a lot less, the need to view ads on your watch do not exist.

I would short Twitter big time (I should put my money where my mouth is) because I think the Apple watch will drive its value down. I might add that Twitter may go down on its own because of other issues, but the Watch adoption will drive its irrelevance even faster.

With Sugar: Abstinence is better than Moderation #HackWeightLoss

The most important thing I learned when I hacked weight loss was that diet matters more than exercise. So, I set about trying to A/B test what I ate, when and how much.

I finally learned that moderating processed sugar from my diet was the easiest way to control my diet.

Turns out I was slightly off.

Research and science has proven that sugar is the new tobacco.

In fact sugar is more addictive than cocaine. If you think tobacco causes cancer, then sugar is linked to rotten teeth, obesity, changes in blood pressure and heart disease.

The usual guidelines from nutritionists is to moderate your sugar intake. I think that’s actually dangerous.

It is like telling a smoker to “smoke 5 cigarettes a day rather than 7 or 10″ because it will cause less cancer.

Tobacco causes cancer. Period. It wrecks your body.

Processed sugar causes all the diseases that you can survive, but it will leave you with a horrible lifestyle.

I have personally seen this with my own experiments. If I have a small serving or “yogurt raisins” or a small piece of “cake” it almost never is enough. The cravings trigger and I end up eating 1/2 cup full of the raisins or 2 servings of the pound cake.

If, however, I skip even tasting it, I find after my initial craving period, I rarely even miss it.

So, the question is how can you hack your health self without needing all the will power to ensure you dont eat sugar.

Here are some tips I have used.

1. Dont even buy them. Keeping them at home just triggers your cravings.

2. In the mid afternoon when your sugar craving is the most, opt for a piece of fruit. Do this for 7 days and again avoid going near the vending machine

3. Keep a log of the # of times a day you have successfully avoided processed sugar and reward yourself with something you like other than a sugared treat.

4. Teach your pallet to love natural sugars – fruits are the best.

5. Replace your morning sugared cereal with more healthy options (especially good if you are eating traditional Indian breakfasts like Idli or Dosa).

6. Substitute water or plain fat free milk for soda. Avoid adding sugar to your coffee, tea or even adding sweeteners.

With sugar abstinence is better than moderation.

You will be healthier. If she can avoid eating sugar for a whole year, you can do it as well.