Guy Kawasaki Explains The Art of the Start
Guy Kawasaki made a name for himself at Apple in the 1980s as the evangelist who helped launch the Macintosh computer. As founder and CEO of Garage Technology Ventures, he has tested and proven his ideas with dozens of startup companies. He is the author of over half a dozen business books, including Rules for Revolutionaries, Selling the Dream and How to Drive Your Competition Crazy.
We had the privilege recently of attending a presentation by Mr. Kawasaki on his latest book, The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything. He's a tremendously entertaining speaker - funny, irreverent, and above all, insightful. He built his presentation around his top ten tips for anyone starting anything - entrepreneurs, intrapreneurs, non-profit ventures. We share them with you here, along with a few of his choice quips that you won't find in the book.
1. Make Meaning
Focus on making meaning, not money. If your vision for your company is to grow it just to flip it to a large company or to take it public and cash out, "you're doomed". Kawasaki says that great companies are built around one of three kinds of meaning:
- Increase the quality of life. Make people more productive or their lives easier or more enjoyable.
- Right a wrong. A variant on the above. Be a part of the solution, not a part of the problem.
- Prevent the end of something good. Preserve something classic or historical. Save the whales.
2. Make Mantra
Kawasaki took a jab at corporate mission statements by showing Wendy's mission statement:
Our guiding mission is to deliver superior quality products and services for our customers and communities through leadership, innovation and partnerships.
"I love Wendy's," he said, "but I had no idea that every time I eat there I'm participating in all of that." He says if you want to create a generic mission statement, you can save yourself tens of thousands of dollars for a retreat, facilitators, etc., with the Dilbert Mission Statement Generator. Instead, Kawasaki recommends coming up with a simple mantra, preferably three words or less, that succinctly describes your core values. Some examples he gave:
3. Jump to the Next Curve
Great companies aren't created when a book retailer says, "We're going to change the way books are sold. Instead of carrying 250,000 titles, we're going to carry 275,000." Great companies are created when you say, "Instead of 250,000 titles, we're going to carry 2.5 million." Then you have Amazon. He offers three tips for how to do this:
- Reboot your brain. You have to break old patterns of behavior in order to adopt new ones. (Also avoid analysis paralysis).
- Kill the cash cows. The obvious ones are the external ones - the dominant competitors in the space. If you beat them, you beat everybody else, too. The not-so-obvious ones, though, are the internal ones. This mainly applies when launching a new product within an existing company. For example, Apple had to kill the Apple II in order to make way for the Macintosh. They could have continued milking it, but they would have eventually gotten passed up by everybody else. Clear away the old to make room for the new.
- Polarize people. You can't please everyone. It's better to have a small, fiercely loyal customer base than to create a mediocre product that fades quickly into obscurity. Some examples he gave were the Macintosh, Harley-Davidson, Tivo, and the Scion XP (People under 25 look at it and say, "Hey, cool car!" People over 25 look at it and say, "It must have been designed by someone who got fired from Volvo.")
4. Get Going
Don't get caught in "analysis paralysis". Some tips to keep you moving forward:
- Don't type, prototype. There are two kinds of entrepreneurs, he says. One kind thinks that Microsoft Office is the killer app for entrepreneurs. You write your business plan, you create forecasting spreadsheets, you build PowerPoint presentations for clients and investors, etc. The other kind uses AutoCAD to design the product, a compiler to write the code, etc. -- whatever it takes to start actually making the product.
- Don't worry, be crappy. Voltaire once said, "The best is the enemy of the good." If companies waited to completely perfect a product before releasing it, they would never get anything out. It's OK if your 1.0 release is a little rough around the edges, so long as it still creates value for customers. Of course, he says, "This doesn't apply if you're developing medical equipment."
- Find soulmates. "Every young visionary needs adult supervision," he jokes. Behind every Bill Gates is a Steve Ballmer. Behind Steve Jobs is a Steve Wozniak. Build a management team that shares your vision and your enthusiasm, but complements your weaknesses with their strengths.
5. Niche Thyself
Ideally, you create something that is both of high value to customers and that few others are doing. If you consider uniqueness and value creation as the two parameters, you have four quadrants:
- High value, low uniqueness - You compete on price.
- Low value, high uniqueness - This is what he refers to as the "stupid" quadrant. It doesn't matter if you have no competition if no one wants to buy your product.
- Low value, low uniqueness - The "dotcom" quadrant. At one point, someone said, "We're going to change how people buy dog food. We're going to sell it online. We'll cut out the middleman and people will be able to buy it cheaper." But they forgot one thing: dog food is heavy. The money saved was offset by high shipping costs. The crazy thing is not that a company didn't realize this, but that at one point, 16 companies were selling dog food online. Of course, most of them are no longer in business - no great surprise.
- High value, high uniqueness - This is where you make money, margins and meaning.
6. Let a Hundred Flowers Blossom
Your best customers may not be who you expect them to be, and no matter how good you are, no matter how much market research you do, you can't perfectly predict what will happen in the real world. Kawasaki suggests the following:
- Sow fields, not window boxes. Niche positioning is critical, but spread your message far and wide, as much as your budget will allow. Narrowcast your marketing message too much and you may miss out on a market you didn't even realize existed.
- Look for agnostics, not atheists. Everyone wants to have those "marquee customers", but large corporations are usually resistant to those ideas that "jump the curve". Find the early adopters who are open to new ideas and save the big fish for later.
- Don't be proud. Don't be surprised when the people who are buying your product aren't your intended target market. Instead find out why they're buying it and capitalize on your newfound good fortune.
7. Follow the 10/20/30 Rule
When making presentations to clients or investors, use:
- 10 slides - Not 50 as most people do
- 20 minutes - You may have an hour, but some people will be late, others may leave early, and you want plenty of time for Q&A.
- 30 point font - If you use a small font, it usually means you're trying to use a lot of text, which implies that you're a lousy speaker (which most tech company CEOs are, he says). Why? Because they don't practice.
8. Hire Infected People
Hire people who are as passionate about your product as you are (or at least close to it).
- Ignore the irrelevant. A shared passion is far more important than education or relevant work experience. These employees will be more loyal and motivated. Kawasaki himself was working at a jeweler "counting diamonds" when he took the job at Apple. But, he says, the first time he saw the Macintosh, it put tears in his eyes. That's what made him more qualified for the job than anyone else.
- Hire better than yourself. "A" players hire "A+" players, but "B" players hire "C", "C" hire "D", etc., leading to what he calls a "bozo explosion". Hire people who make you look smart for hiring them, not by comparison to them.
- Do the shopping center test. Imagine you see a recently-interviewed candidate at a distance in the shopping mall. Do you...
- ...walk directly over to them, tell them how great the company is, and encourage them to come on board?
- ...figure it's a big place and maybe you'll run into them, maybe you won't?
- ...deliberately avoid them?
9. Lower Barriers to Adoption
Make it easy for people to buy and use your product:
- Flatten the learning curve. Good products should be intuitive to use without having to refer to a manual or take a class. For example, do you know how to set the clock on your VCR? Why is that even a challenge?
- Don't ask people to do something you wouldn't do. While his example of a nuclear-powered mousetrap (that you have to drive to Utah to dispose of the waste) was a bit far-fetched, his story about the Kawai Hyatt Regency hit close to him. At that hotel, there are free washing machines on every floor. People don't want to pay several dollars to wash resort clothes, especially when they're already paying $250 a night for the room!
- Embrace your evangelists. Whether they're your employees or your customers, include them in everything you do. Do everything you can to give them a voice. They are your very best marketing.
10. Don't Let the Bozos Grind You Down
Some bozos are easy to spot. They're grumpy, cynical people who shoot down all your ideas. But beware the "successful bozo" wearing a nice suit. "People automatically equate 'rich' with 'smart'," he says. "That's a big dialectical leap." Often very successful people can't embrace the next curve.
After pointing out some famous tech industry foolishness, he told his own personal bozo story. At one point, he turned down a job interview to become the CEO of a Silicon Valley startup, saying, "It's too far to drive, and I don't see how it can be a business." The company? Yahoo. Kawasaki figures that decision cost him about $2 billion.
"I've been thinking about that for ten years," he said. "And you know what? I made the right decision. I got to spend lots of time with my wife and sons while they were young. I didn't want them to grow up, go off to college, and end up wondering who each other was."
"That explains the first billion," he quipped. "The second billion still pisses me off."
Kawasaki finished off with a Q&A session. The first question out of the chute was, "What's the next big thing?" His answer: "I'm a marketer, not a visionary. I can see the idea and tell you if it will sell or not. If I knew what the next big thing was, I'd either be doing it or funding it. And I certainly wouldn't be telling this audience."