Guy Kawasaki: Advice for Making Your Venture Successful

Guy Kawasaki is just like any other Hawaiian-born,
hockey-playing, trendsetting,
jet-hopping corporate evangelist,
entrepreneur, author, columnist,
blogger, venture capitalist, new
media creator next door. He says success starts with a
proper mantra.

“Almost every entrepreneur begins by creating a mission
statement. Wrong,” the brash 55-year-old Silicon Valley
veteran tells SUCCESS. “Mission statements are too broad
and boring. No matter what kind of organization you are
starting, what you first need to do is develop a mantra.
Keep it two to four words max. 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.”

Kawasaki’s personal mantra: “Empower People.” The mantra of
Garage Technology Ventures, the Silicon Valley venture capitalist
firm he co-founded and directs, is “We start up startups.” Some
other good examples Kawasaki often cites: Target—“Democratizing
Design”; Nike—“Authentic Athletic Performance”; or Starbucks—
“Rewarding Everyday Moments.”

Of course, the mantra is just one step in starting a business.
Kawasaki stays in great demand relating the rest of the story. Author
of the best-selling entrepreneurial how-to guide, The Art of the Start,
published in 2004, and the detail-packed Reality Check in 2008, he
shares lessons forged from his high-flying days at Apple Computer,
his own startups and venture capitalist experience.

"Almost
every entrepreneur begins by creating a mission statement. Wrong."

Finding Meaning

In speeches and interviews, Kawasaki plays off his candid
persona, prompting USA Today to refer to him as “a head-banging
bruddah from a tough blue-collar neighborhood in Honolulu.”

His books are chock-full of specific advice for entrepreneurs, but
ground zero for Kawasaki is “the one question you should ask yourself
before starting any new venture: Do I want to make meaning?”
That is followed by other queries in the same vein: 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,” he says. “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.”

That said, Garage is in a money business, and “revenue is
the single-biggest challenge to entrepreneurs today because
no one is buying anything,” he says.

“The least likely company to make a sale is a startup,” he
says. “In these times, corporate employees are not likely to
risk their career buying from a startup. There’s no magical
answer on how to overcome that. It takes perseverance.”

While the home run has eluded Garage, it has nurtured a
number of success stories, including D.light Design, which
makes cheap, solar-powered lights intended for use in the
developing countries of Asia and Africa, and individual
investor champion The Motley Fool. The firm’s portfolio
company, information-sharing site Kaboodle, was sold to
the Hearst Corporation. PC Magazine named another client,
job search engine and recruitment advertising network
Simply Hired, one of its “Top 100 Websites for 2009.”

It’s a very different
game today than before
the dot-com bust.

“In today’s economy
and tight credit markets,
there is a much greater
emphasis on getting to
revenues fast and more
emphasis on business
models than before,”
Kawasaki says. “You
also meet companies
that are further along.
Whereas, a few years
ago the accepted practice was you raised a bunch of money, then
you went away for a year and built your software. You needed the
money to hire people, buy tools and all that kind of stuff.”

It’s Not as Bad as It Seems

Aside from the fact that no one is buying anything, Kawasaki
explains this may be one of the best times to start a company. “If
you look at the factors a company needs—people, marketing, tools
and Web services, storage, bandwidth, those kinds of things—the
basics are extremely affordable,” he says. For instance:
Marketing is basically free
with Twitter, Facebook
and MySpace.
Tools are basically free
because of Open Source.
There is an abundant, cheap workforce
because of all the people out of work.
Inexpensive services are available—with cloud
computing, for example, basically for $500 you can
get a lot of storage and bandwidth.

“The cost of starting a company is lower than ever, which
means you can go longer without venture capital,” he says.
“It also means, however, that when you do need venture
capitalists, they expect you to show up with more done than
just a PowerPoint.”

In addition to Garage and writing books and columns,
Kawasaki has set his sights on new media communication
as co-founder of Truemors, a free-flow rumor mill Web site
that NowPublic acquired in 2008, and 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.”

“The content and advertising businesses are very difficult
,” he says. “Someone explained it to me this way: If you
look at a tech startup, most people try to go after elephants. A
good elephant would be a Salesforce.com kind of company,
right? Other people happen to bag whales, such as Google.
So you have everyone hunting elephants and whales, but it’s
more reasonable to go after deer. A deer is big enough to fi ll
you but not so big you kill yourself going after an elephant
or a whale. But most tech companies today are going after
rabbits and prairie dogs. I can make the case that even more
Web companies are going after plankton.”

The greatest benefit of founding Truemors (which cost
less than $13,000 to launch) was that it led to Alltop,
Kawasaki says. “We noticed so much traffic came from
popurls [an Internet aggregator launched in March 2006],
which inspired us to do Alltop.” Truemors had no business
plan, no venture-capitalist pitch, and only 7 1/2 weeks to
launch. He registered 55 domain names. Software development
cost $4,500.

Nononina, the company that owns Alltop, is Kawasaki’s
“two guys and a gal” garage band—or more accurately, a
team consisting of “one guy in home offi ce (Will Mayall),
one gal on a kitchen table (Kathryn Henkens) and one Guy
in United Airlines seat 2B (Kawasaki).”

"No
matter what kind of organization you are starting, what you first need to do is develop a mantra."

The New Information Sage

Alltop, which receives the bulk of Kawasaki’s focus
today, tries to offer a robust information shortcut. “There
is no such thing as too much information,” he explains. “I think there
is no limit to the amount of information you can have. The question
is, does it limit you from acting? The amount of information can be
beside the point if you don’t have enough courage to make a decision.”
Alltop is a snug fit with his internal wiring, which is always
searching, learning and regurgitating,
living as he directed in his 1999 book,
Rules for Revolutionaries: “Eat like a
bird; poop like an elephant.”

“It has been a joy to do this company
because the blogs and sites are thrilled
to be on it,” Kawasaki explains. “For the
people who use it, it is like a breath of
fresh air. If you were to Google travel,
you would get over a billion matches.
That’s not really useful. At Alltop, you
would get a few hundred where we’ve
aggregated and displayed the latest
stories. Instead of some computer algorithm,
it’s a curated site—a human has
decided what should be there.”

Immersion is part of his household’s
wiring as well. When Kawasaki’s kids
became enamored with hockey after attending a San Jose Sharks game,
his wife Beth, whom he met at Apple, insisted that if the kids were going
to play, Kawasaki “couldn’t just be one of these venture capitalists on the
sideline playing with a BlackBerry and that I had to take an active part.”

Now, if Kawasaki is not traveling, he plays hockey every day of the
week. “I play more than they do,” he says.

Hockey analogies pepper his conversations (he often talks about how
if he’d accepted the job as Yahoo CEO when it was offered to him in the
late ’90s, he could own the San Jose Sharks right now—“what’s a billion here or a billion there?”
he playfully asks). One of the things he says he’s
learned with Apple, Truemors, and Alltop “is that success is a grind.”

“Many people, especially young people, think success is event-related,”
he explains. “You announce. You ship. And then life is good and you go
straight to the moon. Instead, what happens is you ship with bugs in the
software, and people don’t like your product. Then you fi x and fi x and
fix, and you keep shipping.

“I suppose there are some instant successes, but that’s principally
an oxymoron. That’s like saying [Pittsburgh Penguins captain] Sidney
Crosby was an instant success in the NHL. Well, sure, in his first two
years he did very well, but that ignores the 17 previous years he practiced
or played hockey five hours a day. There’s no instant there, or here.”

Although he acknowledges he shares the entrepreneurial trait that is
always looking for the new thing, the next challenge, not being content
to stick to one thing, he insists he can be satisfied.

“If I were to sell Alltop for, say, $10 million, I would disappear from the
face of the earth,” he says with a laugh. “You’d never see me again.”

His track record indicates otherwise.

Gravitating to Good Ideas

Kawasaki’s Career Paths

The Apple stamp on Guy Kawasaki’s resume made many things possible—high-profile exposure, nine books and the bully pulpit of the speaking forums, he says. But a technology career wasn’t on the horizon when he graduated from Stanford in 1976 with a degree in psychology.

After a half-hearted stab at law school, Kawasaki earned an MBA at UCLA while working for a fine jewelry company. His “first real job was literally counting diamonds,” he says, but that’s where he learned to sell. During this time, he also fell in love with the Apple II.

After Kawasaki’s stint at an educational software company, in 1983, Apple came calling. Or more accurately, the call was from his former college roommate who worked for Apple and knew he had potential, if little computer or technology expertise. The process taught Kawasaki “nepotism was more important than qualifications,” Kawasaki says, laughing. “What it also taught me is, even more important than who you know is who knows you.”

Working as Macintosh “evangelist,” Kawasaki successfully marketed the underdog Macintosh to hardware and software developers who predominantly favored IBM’s technology. With the company’s software sales robust, Kawasaki left in 1987 and started a Macintosh database company.

Two years later, he turned to his “bliss,” plunging into a whirl of writing, speaking and consulting. Kawasaki then helped form another software company before returning to an under-siege Apple for his second stint in 1995. His marching orders: Maintain and rejuvenate the Macintosh cult. “You cannot have an evangelist without innovation,” he explains. “That’s called ‘Guy’s Golden Touch’—whatever is Golden, Guy Touches.” He gravitates to good ideas.

In 1997, Kawasaki co-founded Garage to provide matchmaking services for angel investors and entrepreneurs. The firm earned name recognition by hosting well-attended events and conferences for entrepreneurs. It fi rst upgraded to an investment bank helping entrepreneurs raise money from venture capitalists. Then in the dust of the dot-com bust, it reinvented itself as Garage Technology Ventures, a venture-capital fi rm focused on making direct investments in earlystage California and Western state technology companies.

“We were a boutique investment bank,” Kawasaki explains. “Our fees were dependent on deals closing. When everything started heading south during the dot-com implosion, no one was writing checks. We had to shift gears.” During the height of the dot-com frenzy, Garage had more than 50 employees. Today, Garage Technology Ventures employs about six people. It hears several hundred pitches a year out of thousands of candidates, a handful of which receiving funding.

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