Month: August 2011

Mixed Messages from Libya

I’ve been watching US/NATO involvement in Libya for the few months and have a few thoughts.  Just like Saddam Hussein, Mummar Gaddafi was a dictator who abused his own people to varying degrees.  There are horror stories coming out about some of the things his regime did to citizens and its clear that we’ve lost another brutal dictator.

I’ve been interested in the message that foreign involvement sends to dictators around the world.  In 1979, the US placed Libya on the new “state sponsors of terrorism” list as the State Department believed that Libya and Gaddafi were actively supporting terrorist networks around the world.  Over the next 24 years, US/Libya relations worsened, reaching a nadir in the aftermath of the Lockerbie Bombings and subsequent retaliation in the form of increased sanctions.  Full chronology here.

In the mid 90s, Libya restarted its nuclear, chemical and biological weapons programs and further moved into isolation.  Things started to thaw in the 2000s, and by 2003, the US, Britian and Libya reached an agreement where Gaddafi would give up his weapons of mass destruction, let foreign inspectors come in and dismantle the plants and stop any further development.  Libya also exposed AQ Khan’s nuclear secrets bazaar, making the world a much safer place.  In exchange, the sanctions against Libya were annulled and Libya was removed from the State Sponsors of Terrorism list.

Fast forward eight years later.  Libyans rise up against the Gaddafi regime, demanding freedom and self rule.  Gaddafi’s troops respond and start to put the uprising down, but the US and NATO intervene and begin to bomb the Libyan army and later “command and control” infrastructure all over the country.  They demand that Gaddafi step down and attempt to kill him and his family with bombs.

What lesson does NATO’s intervention teach rouge regimes, dictators and others with aspirations counter to western interests?  First, NATO and the US negotiate to get what they want: Libya gave up their WMD asiprations, let foreigners in to actually do the disarmament and later renounced terrorism.

Then a few years later, NATO tries to kill you and your family when there is an internal armed uprising.  This is not to say Quadaffi is a good guy, but after seeing what happened to Hussein and now Gaddafi, Bashar Al Assad, Kim Jong Il, Mahmood Ahamdinejad, Pakistan’s rulers and others must think that the only thing protecting them from foreign bombing or invasion is weapons of mass destruction or a huge military with the ability to strike back at western targets.  It seems like a really bad lesson to teach these foreign dictators who have interests counter to the US and NATO’s.

President Obama said the US got involved in Libya to prevent a massive slaughter of civilians, but in reality, our governemnt really supported an armed rebellion to overthrow a dictator.  Its clear that this dictator did some horrible things, but he did sit down to the negotiating table and give up his WMDs and do exactly what we wanted.  On the other end of the spectrum, we invaded Iraq after Hussein refused to allow inspectors.

If this is how we are repaying those who actually sit down and negotiate and give us exactly what we want, how can we really get mad at dictators and foreign heads of state who refuse to negotiate?  In their eyes, the only way to avoid being attacked is to either have no significant natural resources (Darfur), build up significant armed forces (Iran and Syria) or build weapons of mass destruction (Iran, North Korea, Pakistan).  If you are weak like Hussein or give up your weapons like Gaddafi, you’ll be attacked at the first sign of weakness.

The US/NATO has two conflicting objectives.  Our government wants to stop the spread of weapons of mass destruction and also support uprisings against dictators (Egypt, Libya etc).  I think that we need to look very carefully at the message we are sending to the dictators of the world with our Libya intervention.  In the short term, we’ve helped remove a brutal dictator, but in the long term, have we lost even more of our credibility?  If I’m a dictator, I’m going to build up my army and my WMD program so that the US cannot bomb me without fear of retaliation.  I’m not going to risk being weak like Hussein or make a deal like Gaddafi.  Not a good message to be sending.

Money Saving Ideas for Startups

I attended Alphatech’s Capital Savings and Raising event as part of the Forward Technology Festival on Monday night and it got me thinking about all of the ways we’ve hustled in our startups over the past six years.  In a startup, every dollar counts.  You you need to find creative ways to stretch every single dollar as far as you possibly can.  Most people know about the lean startup method, so I want to focus on some nonstandard ways to save money.  Here’s a few things we’ve done to conserve precious cash.

Share office space with other startups

We contacted a few startups in Madison and told them we were looking for office space.  One of our friends told us they had an extra room in their office that they would rent to use cheaply.  We ended up with prime real estate on the capital square in Madison for $200 a month instead of $600+.  The space was big enough for 8 people at a time.

Interns

Our best money saving idea was to hire University of Wisconsin interns.  We did not pay them a salary, but we gave them oportunities to earn money.  We also showed them that they had real responibility and could actually affect the company on day one.  People are not always motivated by money.  They can be motivated by responsibility, recognition, learning, entertainment and a ton of other things.  Search out what motivates your interns and give it to them.  We made sure that our interns were learning something new every single day and that they were contributing to the company from the very start.  One intern suggested a new features on his first day.  Two days later, we pushed it to production.  Another intern wrote a blog post her first day.  I’m most proud of our intern program over anything else we accomplished at Entrustet.

Play the startup card

Companies know that startups usually don’t have much money and that they need to stretch every single dollar.  They also know that if a startup grows and earns money, they might have a large client in the future.  We always asked if we could get a discount on services since we were a startup. We got all sorts of discounts simply by asking.  It cannot hurt to ask.   The worst they can say is no.

Services for Equity

I’m a big fan of services for equity deals.  I’ve done them in both of my startups and its worked out really well.  Find a service provider who believes in you and ask them if they’ll take some of their compensation as equity.  Saving money at the beginning on expensive professional services is key.

Use your Entrepreneurial Network

I am not a programmer, so when I have technology questions that I don’t want to bother my tech team with, I reach out to other entrepreneurs in my network who can give me advice.  When my tech friends have questions on PR, advertising, marketing, business models etc, I help them.  Instead of paying for outside help, share with people in your network. Make sure this is not a one way relationship so you are not taking advice for free.

Crowdsource

You can use design options like Crowdspring or 99Designs, but be creative.  Think of ways to crowdsource other aspects of your business.  We hired a copy editor who charged us about $1000 to read all of our website copy and a few of our blog posts.  It was expensive.  Next time we needed copy help, we told everyone in our office that they had to read the website.  We put a bounty of $5 or one free drink for each error they found that resulted in a correction.  We found around 30 errors on the site and paid $150 for copy editing instead of $1000.  Plus, it brought our team together.

Keep and active blog and use social media

Our blog on Entrustet generates over 40% of our traffic.  After we created the content, it’s completely free lead generation.  We also had two of our posts go viral, spiking traffic and getting us a ton of press.  Blogging takes time, but I think it’s worth it.

Play the Student Card

While I was a student, I always introduced myself as a student entrepreneur.  People love students who are running businesses and it opened doors that are now more closed to me now that I am not a student anymore.  Our student interns were still able to play the card from time to time and received discounts, extra information and benefits.

Buy in small quantities

It can be tempting to buy more units of something for a lower unit price, but in a startup it’s better to buy just what you need right now.  I still have keychains, schedule magnets and spray chalk from Exchangehut three years after I sold the business.  Complete waste of money.

What have you done to save money?  Do you have any funny stories?  Any techniques that really worked for you?

Like a Ton of Bricks

What makes a person change for the better or for the worse?  What makes someone realize they were wrong? Or that they acted poorly?  How do you realize that you need to make a change?  Is it gradual, or does it hit you like a ton of bricks, creating an instantaneous change?  For me, most of my big changes in my life have happened in an instant.  One second, I’ll be rolling along through life, then something happens and everything changes.  Sometimes these changes are good, sometimes they are bad.

The first time I remember instant change was in 2nd grade.  My soccer team was in the intramural championship game, which was during our lunchtime recess.  In music class in the morning, I tripped a friend of mine, just for fun.  He tumbled down, knocking down a ton of chairs in the process.  I got a detention, my first ever.  It was during recess.  I was going to miss my soccer game.  In my 2nd grade head, I said “screw it, I’m skipping detention and playing.”  It took three quarters of the game before a teacher came out, grabbed me off the field and gave me detention for the rest of the week.  I didn’t care.  I had scored a goal and we won the game.  Detention didn’t matter.  In that instant, I became a terror.  I realized that teachers and school authority couldn’t really hurt me.  Everything changed, probably for the worse.

It took 8 years before an instant snap changed my behavior again.  It was freshman year of high school.  I was bored in class and pretty much made teachers’ lives miserable.  I was in a class and I was goofing around with one of my best friends.  I’m pretty sure we were trying to draw on each other with pens.  The teacher had tried to get us to stop for a few weeks, but we just didn’t care.  Finally, the person sitting in front of us turned back, looked me in the eye and simply said “stop.”  I don’t know why it clicked then, but in that instant, I realized how poorly I’d treated some of my middle school teachers and realized it had to stop.  I had one of those “rapid fire montages” of all the bad things I’d done and felt horrible.  From then on, I never disrupted a class ever again.

I got self confidence in an instant on the soccer field as a 12 year old referee.  In my first game, a coach ran onto the field and cursed me out, with just about every name in the book.  I’d gotten the call right, but he thought I should have given the 10 year old a yellow card.  I was scarred.  I called my referee assignor and he told me I had to stick with my calls and that if anyone did it ever again, I had all the power and should throw them out.  Two weeks later, another coach swore at me over a call he didn’t like.  I threw him out and stood my ground as he threatened me.  In that instant, everything changed.  I knew I could handle pretty much any situation.

Another example came from business.  When I was selling my first company, the final six weeks of the deal were incredibly stressful.  The deal almost fell through multiple times, there were tough negotiations and there was a bunch of shady stuff that happened that caused a ton of stress.  I got more and more involved in the deal and started to turn inward, become less involved with my friends and let my business spill over into other aspects of my life.  I was spending more time on the phone, in front of the computer and let it affect my life.  I was angry at the buyer and I started to take it out on other people.  I didn’t realize it any of this at the time, but looking back, everything was obvious.

I went on a business trip and enlisted one of my friends to help.  We drove to Michigan and I was on horrible phone call after phone call.  We were eating lunch at a diner and I got another phone call.  My friend started to playfully mess with me, just like he had for all of our friendship.  This time, I took my anger at how the deal was going out on him.  I hit him really hard in the leg (sorry Ken).  In that instant, I snapped back to reality.  I was disgusted with myself.  I instantly knew I’d acted like an idiot for the past six weeks and vowed to never let my business affect my friendships.

For me, realization and change comes in an instant.  I don’t realize I’m acting poorly (being mean to teachers, acting without confidence, taking my business frustrations out on friends), until something hits me like a ton of bricks and causes me to realize all of the things I’d done wrong or need to change.  I look back and can’t even imagine how I acted that way in the first place.  I look at my prechange self and see someone else.

I’ve had at least 9 of these in my life so far, 2 for the worse,  7 for the better.  I’d love to be able to find a way to accelerate the changes for the good at the expense of the bad, but I think that’s probably asking too much.  I think it’s human nature to have both.  At the very least, I’m hoping as I learn lessons from these ton of bricks moments, I’ll need to have fewer of them.  I’m just glad that so far my changes for the better outweight the changes for the worse.