I was wrong…and I’m glad I was, because by having an old beat up car rather than a new shiny one, I know I’m on the right track (or maybe the world’s greatest silver-lining guy). Inspired by the moment, I thought I’d explain its importance and frame it, along with 4 other points, as things I’ve learned since starting our startup.

1. The Startup Wheels. Nothing against riding a bike or taking transit, but a car is simply more efficient  when you’ve got to fight a bit for every meeting you book and are consequently at the whim of the other side’s location and timing. “Every legitimate startup has a beat up car” – so true. Why beat up though? The biggest mistake you can make is splurge on functional things like cars or nice office furniture. Rather, good startups will spend all their money on people and product. This anecdote captures this point very well: How I Spent a Million bucks and ended up with these two chairs. Alternatively, meet my car:
2. Working @ home is the devil. Everyone’s path is different but chances are that you tell yourself working at home is a great way to cut costs. True on the costs but it’s probably the worst decision you can make. Working at home is distracting and generally unhealthy. More importantly, the goal should always be to surround yourself with people. Not only is being an entrepreneur lonely at times but your space and who’s in it changes everything. Check out the theory of change of Toronto’s Center for Social Innovation for a great argument as to why that’s the case.
3. The N word. You end up doing a lot of it, but I don’t like the word or act of networking because it rightfully implies some sort of shallow self centered activity. My preference is to call it ‘being social’. After all, you’re virtually doing many of same things when you’re networking that you were doing when you met some of your friends. If you have genuine interest in people rather than going in with the ‘how can you help me’ mentality, you’ll go far. Nothing like some Beatles to remind you of the value to having friends.
4. Little wins are BIG wins. Do you know an entrepreneur? Someone chasing a dream? Tell them what their doing is awesome and chances are, you just made their week. Heck, you don’t have to even tell them it’s awesome, just tell them that you noticed. Last week a guy told me he read my blog and it made my day that despite the plethora of signals and noise, I caught somebody’s eye. The reason little wins are big wins is because for a long time, little wins is all you got. For a location where little wins are celebrated often, start using Sprouter.
5. You become a kid again. After you drain your personal resources, your loved ones start supporting you as if you were an empty pocket kid again. I couldn’t have made it this far without my parents covering my living costs and without friends who forgive my frugality or ADD.  But being a kid again also implies that you are rich in idealism – unaware yet what of what impossible means and unafraid of the risks that make most people stop. Is there a better movie that reminds us of how fun it is to be a kid (I love what happens at the 1:00 mark)?

It’s our nature to want to understand things. It’s for this reason, why there is no shortage of ‘how-to’ and ‘my-story’ pieces out there. This list is partially that type of sharing but if there’s one thing to take away, it’s that there is no true formula. There are things you can be, character which you can champion, but if you’re doing something new, that story has yet to be written. The best you can do is take valuable pieces from other people’s experiences and piece them into yours.

About where we started and the quote. It’s not absolute truth that you must have a car . It’s a piece that resonated with me when I started and although we still have a very long way to go, it was a needed reminder of all that it took to get  here.

Good Luck,

Adil

One of our favorite traditions at My City Lives, is our once a week meet-up with someone new to throw down ideas and generally just connect. One of the biggest benefits to “Stranger Whiteboards” is that it encourages us to refine or rethink our ideas once we begin discussing them. This week was no different when we were asked by a Stranger about our strategy for Search Engine Optimization (SEO). For those of you unfamiliar, a good SEO means you’re close to the top of Google’s search results and theoretically in a good position for success.

Our answer was fairly standard: we’ve done all the usual things and “SEO is important to us”. That’s kind of a lie. In fact, that’s a lie.

Sure we’ve taken some steps to be SEO friendly but the truth is, we’ve been far more concerned on how we can be Social Media (e.g. Facebook, Twitter, etc.) friendly rather than SEO. Nabeel Hyatt from Conduit Labs just wrote a piece which in many ways encapsulates our thinking, but here are some key reasons why we think more and more people are going to consider going Social over Search:

• Social Networking looks poised to take over Search in overall visits. In December, Facebook had more traffic than all of Google’s properties Combined.
• Not surprising, we read, watch, buy what our friends read, watch and buy. Mainstream news sites are seeing for the first time more hits coming from Facebook than from Google
• Google’s algorithm rewards inherently ranks older links higher than new ones so if I was looking for bars in Toronto, its far more likely that I would be directed to one of Toronto.com’s rudimentary web pages than a far more new and compelling one. Ergo, newer companies are at an immediate disadvantage trying to compete in the search game no matter how great their product or offering is. Unless, of course, you’re willing to pay a lot of money for Ad Sense. A lot.

So more people are visiting and spending time in social networks and are following the information shared with them in there at an increasing rate. Perhaps most important, however, is that the difference between Search and Social is that Search is powered by an algorithm, Social by people. With that in mind, we’ve always felt far more passionate about being great in Social rather than Search as a strategy for growth.

It might be risky, but risk runs strong through the veins of anyone who starts a new business and this is one we’re willing to take.

Clearly both approaches work, but there are also parallels between how these communities grew and what the communities themselves are like. Facebook by nature is closed compared to Twitter. In Facebook you generally have to except people/friends before they can see your profile but you certainly need to be a Facebook member; whereas most of Twitter is open to anyone with a web connection, member or not. One’s content is restrictive by nature while the other is open by nature and this is similar to their community building philosophies as well as developers’ ability to create applications for the platform.

So what kind of platform is My City Lives going to be, exclusive or open?  Well we hope it will be as open as Twitter and that the community will create all the game changing apps that Twitters community has spawned.  So how do we ensure this? We keep it as simple as possible while allowing our users to find useful information. But how will it grow?

Once you’ve decided on the inclusive or exclusive community part, then there comes the actual building and growing of the community. Do you send out press releases? Do you connect with bloggers in your area? Do you buy adds on Facebook (god no)? Do you speak at events/hang out where early adopters hang out? Do you SEO the %*@# out of your site? Do you focus on word of mouth? Do you take the age old inventors angle and just make something that you would use and hope that you’re solving a problem that many people have? Or maybe you just sit back and let Twitter do what it does best.

Well I can comfortably tell you that we are “focused” on most of these options.  But what we really want to do, is build this sucker from the inside out. My City Lives is about recommendations and exploration, so we’re hoping our community will recommend it to friends and recommend through exploration. This is exactly why we are adding 10 StoryCatchers to our team.  In no particular order, Ambreen, Emily, Bill, Gabby, Lu Anne, My Ahn, Simon, Mahmoud, Aliyyah and Grace will be joining our team officially this Saturday.  These StoryCatchers will be responsible for helping to seed the early stage content on My City Lives and will help define what the site is all about by infusing the site with their talent and creativity.  We have also been in contact with quite a few bloggers who write about Toronto as well as conventional media in order to reach the non-techies. There are many things we have on the go and hopefully some will even surprise you.  But for now, please welcome our new StoryCatchers.

Until recently, my thoughts on company culture have been an extension of personal preferences and values, be it something simple like having a library to facilitate continuous development or ensuring that My City Lives will create social value because of a strong belief in the economy of good. Although aware that one day I’d have to gather years of ideas and notes and hack together a manifesto of sorts, I hadn’t really felt as compelled until we made the decision to start hiring. At that point, motivated by the belief that community is paramount, it was clear that creating culture had become our most important priority.

Culture cannot be forced, however, and it’s an evolving entity. As such, to say that one is ‘creating culture’ is not as accurate as saying that we need to ‘facilitate culture’. The distinction is an important recognition of the value that your community brings (i.e. culture collaboration) and that there are simply too many variables that exist in a start-up environment to plan for something which should ideally organically develop.

Accordingly, I thought it would be valuable to share some things which we’ve learned or practiced while considering company culture. In every interview, we’ve said that our salient priority is to “recruit, retain and inspire great people”. Here are four approaches that we’re either learning or practicing that ultimately will ensure that we know exactly how to do that:

Studying the best: This one’s a given and accordingly, I won’t make a case for why it makes sense to do. While there a number of companies I studied, Zappos and I love Rewards stand out to because each is a young company that attributes its success to its strong focus on culture. Here’s a good story about each:

Zappos (source: Wikipedia): All employees that are hired for their corporate office, regardless of position, are required to undergo a 4-week customer loyalty training course, which includes at least 2 weeks of talking on the phone with customers in the call center at full salary. After a week of training, the new employees are offered $2,000 to leave the company immediately, no strings attached. This is to ensure people are there for the love of the job and not the money. Over 97% turn down the buyout.

ILR (source: Metro): Using the “A-players know A-players” strategy, I love Rewards motivated staff to spread the word about recruiting through their social networks by offering points that are redeemable for rewards. The company invited applicants to a wine-and-cheese open house. Resumes were not read but the company still guaranteed interviews that day and the ability to meet the senior leadership team and experience our office. The company estimates that it cut recruiting costs by 99.3%

Create a Philosophical Foundation: While a young company can avoid developing an exact document that outlines its guiding philosophy, it’s not excused from building a foundation of ideas to leverage from. For example, if you want your employees to value passion over their paycheck – you need to give them something to be passionate about. This requires the founders to consider for themselves why they’re doing what they’re doing.  Are you motivated primarily by passion or paycheck? Do you believe that great ideas inspire great people or the other way around? Ask yourself these questions as they’ll help you develop where you want to go while the next two points will help you get there (by the way, an example of laying the foundation is our belief that life is too short to work with jerks).

Create Opportunities for Culture to Develop: A city can point to its playhouses, performance centers and galleries as proof that culture exists – what are your organization’s equivalents?  Where and when can your team collaborate and create with one another? A community cannot develop without interaction and accordingly, leadership must find opportunities for this to occur. One approach that we’re adopting is having a monthly team meeting at a different location each time that will fuse together the company update, personal development and team collaboration concepts into a unique day of community and culture building. We’ll let you know how it goes.

Ask your community: During our interviews, we asked each applicant what they least liked about a previous job.  Asking this gave us some insight of one’s character but additionally helped us understand how previous employers failed to notice what they valued most. Knowing what your employees value is important in the culture development because you can works backwards on how to ensure that you’re a rock star at this. To do this though, you need to ask.

Speaking of which, what do you think? How would you facilitate culture? Do you have any examples of really great company culture to share?

But finally, a sign that someone is coming around. Sports Illustrated seems to have found a modern way to get people back into paying for premium content (not to say what we’re doing here isn’t premium). Please check out that Sports Illustrated link and enjoy the fact that not everyone in the news industry is completely stupid.

The turning point, however, was my introduction to Business Model Generation (http://www.businessmodelgeneration.com) - a book for innovators, visionaries and game changers that is unlike anything I’ve seen before. Sure that sounds like hyperbolic-fan-boy-rhetoric, but its worth noting that we have yet to recommend a book in the history of this blog. Whether that’s enough or not, download or view the sample provided on the site to see for yourself.

When doing so, you’ll immediately see the value and uniqueness of the book ’s design, collaborative thought and creativity (another reason why its a good fit to discuss here). You’re also provided an introduction to The Canvass, a sophisticated yet simple structure created by the authors to map out your business model and the determine your resulting strategy. As you can see from the image, The Canvas is simple and visual which is part intended for easy digestion and part recognition of the importance of the space where design and business meet. The overall product is more than just your average book on business model generation – this is an atypical handbook for a generation who are using business models to create change. The lack of anything remotely similar to this helps explain my own issues with developing a Value Proposition – the books and paradigms that I had studied were created before the movement for ‘profit with a purpose’ really gained steam.

I’ve seen the impact of book manifest in a number of interesting ways, one of which I was spoiled with last night at a Meetup for practitioners of the the book. Think Bible camp meets Business Models. Held at Toronto’s Center for Social Innovation (where else), a group of highly motivated business thinkers assembled to skype-meet the book’s co-author Alex Osterwalder (pictured to the left with event co-organizer Satish Kanwar from JetCooper), learn from some experts on how the Canvas could be used and most importantly, workshop in sub groups  to create new and disruptive business models using the Canvas as our facilitator. I expect there will be a stream of dialog in the next few days  (I’d say the Twitter stream was not as useful as normal because of the hands-on approach to the evening) but I wanted to touch on something that popped up when we were wrapping up at the end of the night.

A couple of groups joked that one of the challenges to the Canvas exercise was unifying all the intelligent minds in each group. As we get more educated and sophisticated in our thinking, a critical challenge for tomorrow’s companies will be how to ensure collaboration trumps competition. To be fair, I think competition can be healthy but when it comes to determining your company’s strategy and executing it, cohesion is essential. I’ve thought of this challenge often but more from a sports perspective – i.e. logically you want a team of superstars but if everyone is used to being ‘the man’, how do you keep everyone happy? Certainly, there are elements of culture and individual personality to consider here, but a large among of this cohesion will be formed when everyone feels like they’ve contributed to arriving at the decision. Again, this precisely is what makes the case for trying the collaborative Canvas approach even stronger.

What do you have to lose by not trying…well, other than your company of course.

While the hippie movement can be explained and characterized in a number of ways; it can alternatively be simply summarized as one of history’s most famous statement against the status quo.  Of course, if we flash forward to present day we’d find that the protagonists have since grown up and ironically now make up the new status quo, which seems a lot like the old one.  Stupid wars are still being fought, much of the world is underdeveloped and our economic systems are still motivated by greed.

And yet, these idealistic and enlightened youth mobilized in ways previously unimaginable to change the world. They marched en masse, they flaunted their sexually liberation and they used peaceful means to make a point especially when rallying against war. They employed novel approaches that embodied their identity and believed that the world would be a better place because of their existence.

Does this in any way sound familiar?

Change is certainly inevitable but what is less certain in the present is who exactly is driving this change. I contend that when historians look back the answer will be quite clear: young entrepreneurs.

Today’s young entrepreneurs, an increasingly rising number relative to the past, are of different bread than their predecessors. Sure, they’re still interested in making money, but the rise of social enterprise and socially-valuable web-based platforms are dramatically changing the world.  They have realized that making a statement today is best done through business after noticing that at the end of the day, your impact is typically dictated by your financial position.

A recent article asked baby boomers, many of whom come from the aforementioned generation, if they have collectively spawned a ‘failure generation’.  I couldn’t help but wonder if their parents asked the same thing when they were out there enjoying free love, drugs and rock and roll. Today’s generation is far from a failure – they are simply doing things different whether it’s the business they create, the age they marry or the point they decide to ‘grow up’.  They are making a statement and doing it most provocatively through the systems that the former hippies now understand the best.

So I’ve read a lot lately (the past few months) about people who had immigrated to America that are emigrating back to their original home country. Most of the cases I’ve seen have been people going back to China and India.  I understand why someone might do this on the surface (these economies are ‘booming’), but when you actually think about it, personally I think it makes absolutely no sense.  Let’s explore….

Never having immigrated somewhere in my life, I can only speculate; but I think that there are two main reasons why someone leaves their homeland. The first being they’re in eminent danger (i.e. war, the KGB, civil unrest, drug lords, etc.) and the second is to find somewhere with more opportunities to flourish.  Now correct me if I’m wrong but over the past generation there hasn’t been so much more eminent danger in India or China than there is now, right? This leads me to believe that people leaving India and China to go to America because it was (is it still?) the land of opportunity and not because India and China were war torn countries.  So, people left their homeland seeking opportunities and now feel that opportunities are better back home and are therefore heading back. (Let me say one thing before we go any further here, I am Canadian and have disliked most of what the US has done for the better part of a decade now, so this piece is not an emotional response, it’s purely subjective… I hope) I do not know why these people are doing this, well I think I do – opportunity, but it seems like an incredibly big gamble. I have done a bit of reading/research on China as of late and here’s why I think moving to China could pose a really big problem.

China’s economy has continued to grow even when everyone else’s was shrinking. Yet China relies on the world to buy products from them. So the world is not buying products, yet the product maker is still making lots of money, strange no? Well it is. The agree upon reason for this that I could find is that the Chinese government, for reasons of communism and dictatorships, is forcing banks to lend money to businesses and citizens at very low rates.  This is essentially leaving the market open for very bad debt, not to different from the housing market in the states in the last few years. This inexpensive money is resulting in people investing other people’s money (in this case banks) into things they know nothing about, for example the Chinese Stock Market – which continues to rise strongly. But really how long can this cycle go on for? At what point in time will this all come falling down? If and when it falls, what’s going to happen to the people of China? Something tells me their government is not going to be as supportive as the American government was of its people (making sure companies don’t fail so people retain jobs – as much as they could that is).

With this potential bubble (see what Google has to say about it) not to mention Chinese living conditions, constant disease outbreaks, disastrous working conditions, lack of free speech and whatever other ridiculousness that people over there put up with on a constant bases. I can’t fathom why moving there with ones family (in the chance that China doesn’t catch on fire and blow up in the not too distant future) is even a consideration once you’re in America… or Canada.

Good Luck

If now is great, when is it not great? Does that mean before the recession – when capital was easier to access and we were rich with optimism and success stories – was not a good time? Assuming that could not be the case, then is it just good spin? I don’t typically dissect hopeful statements, but I also think if we are to give valuable advice to would-be or new entrepreneurs, this is important to clarify.

I don’t really think now is a ‘great time’ to start a business. I think that statement implies that it’s somehow easier than normal, when in fact; it’s probably harder. Now is a great time, however, to take a chance because for many, there is little more to lose. If you can’t take the opportunity to travel, volunteer or enjoy funemployment, you must either look for work or make your own. The asset of our environment, therefore, is that we are more forgiving of failure because there are more barriers than normal. So yes, it’s a great time to try but for reasons that we’d rather not be in to begin with.

It’s likely that the majority of those who were going to start a new business would have done so regardless of the climate. If you’re motivated by the reverse-failure motivator alone, that simply is not enough to carry you through the challenge. To be an entrepreneur, you need to be many things, but many will say that you must first be rich with passion. I’m not going to apologize for being cliché because it’s true. Passion is what people respond to, not the product. Passion is what drives you to work when you have no one to respond to but yourself. Passion makes you naïve to the universally accepted realities, which is good, because you’ll be told it’s not possible more than you will be told it is.

This is especially the case for the most compelling reason why it’s a great time to start a business – Creative Destruction. Creative Destruction refers to the “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” In english, Creative Destruction occurs when someone figures out a dramatically new way of doing something, typically not as well (at first) and at a lower cost than the traditional ways of doing it. Wikipedia, the Huffington Post, Southwest Airlines and MP3 players are all examples of Creative Destruction. I feel guilty glazing over the concept but in the interest of your time, the importance of Creative Destruction is this: loyalty to any brand is down now largely due to people’s sensitivity to cost so if you can figure out a dramatically different way to do something, the market will be inviting. Your litmus test is how crazy people think you are either because of the ambition of the idea or the idea itself. For example, I might strike to ire of many people by suggesting we should dump the world’s garbage into a black hole in space but if it were hypothetically possible and cheaper, I think it could represent big business.

So returning full circle, we should strive to ingrain the idea that it is always a great time to start a business. The recession indeed provides a new field of opportunities, but they simply are replacing the reasons why non-recession entrepreneurialism is a good thing to try. This will work for some people and not for others. New entrepreneurs should be aware that making your own work will always be harder than finding it, but the great news is that if you won’t notice if you truly love what you’re doing. Finally, aspire to think differently because we don’t need another of whatever we already got. Its always a great time to start a new business but it would be difficult to find another time that would be as welcoming to change.

For once, destruction can be a very positive thing.

Early last year, I heard a similar line from Anderson when I obtained a free ticket (how appropriate) to a Communitech conference in Waterloo. At the time, well before the recession hit, Anderson laid out his ‘not-so-radical’ vision for an economy that embraces free. The future, he contended, would be lead by those who created new business models to adapt to information wanting to be free.

Anderson’s book is the hot topic in various circles right now given its potential implications for online and traditional business. Newspapers, for example, could reverse their precipitous decline by embracing new mediums such as the Kindle and charge for the premium service of having their content available on the revolutionary e-reader. Walking his own talk, Anderson himself said that his book would be available online for free and that he would earn money from subsequent speaking gigs.

In a recent book review of Free, Malcolm Gladwell agrees with Anderson’s central argument that “the cost of the building blocks of all electronic activity – storage, processing, and bandwidth –has fallen so far that it is now approaching zero”. Despite this reality, Gladwell argues that there are far too many other inputs to consider and that the way consumers respond to free things (very very well), makes the idea of charging nothing less palatable. It might cost Youtube, $0.25 to stream one hour of video to one person but it’s still estimated that the company will lose close to a half a billion dollars this year. There is no doubting Youtube’s success as modern medium but as a business, the jury is still out. As Gladwell said, “if it were a bank, it would be eligible for TARP funds”.

Truthfully, I remain torn on the idea…or at least, how Anderson frames it. In a 2008 article he used the Gillette model of giving the razor away but selling the blades at a premium as a non-tech example of how his vision plays out. This example made the free argument actually harder to fathom. By paralleling what’s going on now with Gillette, ‘free’ is just a marketing and sales tactic. It’s like the samples they offer at Costco which somehow always makes the grocery shopping experience more exciting. It is not a pricing model.

I’m torn because the ‘free’ argument can be dangerous if it seeds the idea to an entire generation of new entrepreneurs that being popular (and free = popularity) is a larger priority than making money (read: Twitter). So much attention has been paid to the recession being a great opportunity for new businesses but how impactful can these businesses be if they are approaching free incorrectly? To be fair, this is not exactly what Anderson is saying but this is the impression he leaves audiences with especially by using Youtube as his free proof of concept.

With Gillette, getting the razor for ‘close to free’ allows you to try it, but you immediately start paying for it via the razors. With Youtube, I could conceivably go on forever without ever giving the company a dime. Even if Youtube can make money via other methods like advertising, is this really good business? Would we really all leave Facebook if it started charging an annual fee of 5.00? Would Twitter be as successful if it more closely resembled the cost of text messaging?

I don’t necessarily know the answers but at this point, I’m not convinced of free. Why can’t the New York Times charge for subscription fees on the Kindle and for their normal online content? This is exactly what the Wall Street Journal does and they seem to be doing all right.

At this point, all we can really conclude is that free is compelling as a word and idea. It might make online entities into superstars overnight, but it might also be the very reason they, like many others, cease to exist five years later.