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Guy Kawasaki’s unlikely route from a rough-and-tumble Honolulu neighborhood to a small Palo Alto-area venture-capital
fund didn’t follow any textbook career blueprint. But he’s a living example of the advice he offers in
nine books, as well as his multipronged Web assault, frequent speaking engagements and columns.
After graduating from Stanford in 1976 with a degree in psychology, Kawasaki made a halfhearted stab at law school, then earned an MBA at UCLA while working for a fine jewelry company (“my first real job was literally counting diamonds”). After a stint at an educational software company, his Stanford roommate hired him at Apple as Macintosh “evangelist” (company title for a product super-advocate).
In 1997, he co-founded Garage to provide matchmaking services for angel investors and entrepreneurs. The firm first upgraded to an investment bank helping entrepreneurs raise money from venture capitalists, and then in the dust of the dotcom bust reinvented itself as Garage Technology Ventures, a venture-capital firm focused on making direct investments in early-stage California and Western state technology companies. He’s been involved in numerous startups himself, and written a column for Forbes. He is also co-founder of Alltop, an “online magazine rack” for the Web that collects and posts the headlines of the latest stories from sites and blogs it considers the “best.”
His books include Art of the Start, published in 2004 by Penguin Group, considered by many entrepreneurs as a bible for startups. His Rules for Revolutionaries, published in 1998 by HarperCollins, presents his break-the-rules manifesto for world-changing innovation. Reality Check, published in 2008 by Penguin, shows readers how to avoid the fads and stick to commonsense practices; “it’s meant to be an ongoing reference book,” he says.
SUCCESS asked Kawasaki to share how aspiring entrepreneurs can best tackle the primary challenges facing startups. His “10 tips plus one” offer a clear road map for all entrepreneurs.
1. Make Meaning
“There really is only one question you should ask yourself before starting any new venture: Do I want to make meaning? Consider, do I want to make the world a better place? Increase the quality of life? Right a terrible wrong? Prevent the end of something good? We meet with entrepreneurs all the time and they tell us what they think we want to hear, that they want to make money. When we hear that, it’s so depressing. It took me 20 years to come to this understanding, but the companies that are successful are the ones who create meaning. Create the next curve; don’t improve on sameness.”
2. Create a Mantra
“Creating a mission statement is usually one of the first steps entrepreneurs undertake. This is a mistake: Mission statements are too broad and boring. Throw out the crutch words like best, communities, customers, excellence, leader and quality. You may never have to write your mantra down, publish it in your annual report, or print it on posters. Indeed, if you do have to enforce your mantra in these ways, it’s not the right mantra. Keep it two to four words max. The Garage mantra is ‘We start up startups.’ Some other examples: Target—‘Democratizing Design’; Nike—‘Authentic Athletic Performance’; or Starbucks—‘Rewarding Everyday Moments.’ These are not company taglines, but guidelines for employees for what they do in their job.”
3. Get Going
“Don’t immediately sit down and start banging out a business plan. Think different. Don’t try to do things twice as good; shoot for 10 times better. Don’t be afraid to polarize people. Create something that people either love or hate. The concept of the solo entrepreneur is vastly overrated and untrue—Steve Jobs had Steve Wozniak, Bill Gates has Steve Ballmer. Find a few soulmates—a minimum of three: someone to build, someone to sell, and someone to collect. Use prototypes as market research.”
4. Define a Business Model
“Be specific. Know who your customer is and how you are going to get your money out of her purse. Keep it simple. Ask women for feedback on your business model, never men. Men have a fundamental flaw: Deep in our DNA, we have a gene that makes us want to kill things. Every business model looks good to someone with a Y chromosome. Women have a great common sense and are much better judges of the viability of a business model.”
5. Weave a MAT
“The purpose of making a list of milestones, assumptions and tasks is to understand the scope of what you are undertaking, test assumptions quickly, and provide a method to find and fix the large flaws in your thinking. Come up with four to five principle milestones—such as proving your concept, finishing a prototype, raising capital—to mark your progress. Create a comprehensive list of assumptions you are making about the business, and test them, such as, How many sales can you make in a day? Take care of the tasks that support both of the above lists.”
6. Create a Niche
“Some entrepreneurs are afraid of market niches because they are afraid of locking themselves out of potential business. As a startup, however, you are trying to start a fire with matches, not flamethrowers. This is the Holy Grail of Marketing, and every entrepreneur should understand it: Concentrate on providing a unique product or service that is very valuable to the customer.”
7. Follow the 10/20/30 Rule
“I’ve long been an evangelist for better pitching—the entrepreneur lifeline—because I suffer from Ménière’s disease and a medical condition called tinnitus, which involves a constant ringing in my right ear. I’ve investigated all the causes, and there is a litany of possibilities, but I’m not sure in my case it’s not caused by listening to thousands of lousy pitches with 60 slides each. So here is my guideline for an effective pitch: Ten slides in your PowerPoint, it should last 20 minutes, and it should consist of 30-point font (find out the oldest person in your audience and divide by two). The font size makes the presentation readable and forces you to be economic in word choice. Let one person do the talking. Start with brief intro, explain yourself in the first minute. The audience will be more focused on the rest of the presentation.”
8. Hire Infected People
“Look past the ‘perfect’ candidate. Ignore the irrelevant. Find the people who believe that your organization can change the world, who use the product. Although I wouldn’t have hired me, and still might not today [laughing], I was a good candidate for Apple because I was a zealot for the product. Follow your gut: Only hire someone you would enthusiastically run up to if you saw them from a distance. Hire better than yourself.”
9. Lower the Barriers to Adoption
“Make things easy for the customer. Flatten the learning curve. Never ask someone to do something you wouldn’t do. Recruit evangelists who believe in your product as much as you do, seek feedback and help from your earliest and best customers. Create programs for them, open the kimono for them.”
10. Seed the Clouds
“Sales fix everything. Let people use your product as they will, even if it is in unintended ways. If unexpected consumers buy your product, take the money! Apple was supposed to be developing a spreadsheet database and word processing machine when instead it produced a Desk Top Publishing machine. That saved Apple. Ask ‘Why are you buying?’ instead of trying to fix your product. Enable a test drive. When pursuing sales leads, find the true influences in a company (hint: the air gets thinner as you go higher up—intelligence is concentrated in the middles and bottoms of the organizational ranks).”
Plus One: Don’t Let Bozos Grind You Down
“Ignore the people who say it can’t work or won’t work. It’s depressing to watch a mean, lean, fighting machine of a company deteriorate into mediocrity. In Silicon Valley, we call this process the ‘bozo explosion.’ This downward slide seems inevitable after a company achieves success—often during the years immediately following an IPO. The dangerous bozo is someone who is so successful on one curve that they can’t embrace the next.”