Telephone Switchboard Operators - a vintage circa 1914 photoA well-regarded company today usually has a CEO succession strategy. It may be an explicit successor — a “number 2” — or it may be a “pool” of executives running different businesses. Either way, the fatal assumptions are that 1) only the CEO is temporary and 2) the company is permanent. But there really is no reason to believe this.

Everyone knows that the CEO won’t be CEO forever, but more often than not, the CEO is replaced because the company needs to change. Companies should instead plan for changes to themselves rather than just the next CEO.

CEOs should create a company succession strategy. In other words, the CEO should create new companies authorized to cannibalize the existing business or better yet disrupt its industry or adjacent ones. Of course, well run companies can have competitive advantages that keep them going a long time, but it is foolish to think that any company in its current form lasts forever.

If you assume that your current business is going to die, you are forced to innovate to find the next growth opportunity. I don’t know if this is how their chief executives think, but look at Amazon, Google, and Facebook. Jeff Bezos keeps entering and challenging new industries and is now far from only managing an online bookstore. Larry Page is investing in self-driving cars, robotics, and smart glasses. Mark Zuckerberg paid $19 billion for WhatsApp. These CEOs are investing in or buying into their futures while their current businesses are still strong.

To be sure, it’s a delicate balancing act. But if the internal startup does a good job of thrashing the mothership, you don’t need a CEO succession plan. The new CEO — and the new business itself — will be obvious to everyone.

What do you think of this post? Good, bad, neither? Let me know on Twitter @petershiau.

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Photo credit: “Telephone Switchboard Operators” photo by Royce Bair is licensed under CC BY NC ND 2.0

Photo by goat_girl_photos / CC BY

After three years at a corporate innovation lab, I learned that the secret to innovation is this: you just need to innovate.

When I tell people this, I just get the stare of incredulity. There must be a process, an org structure, and/or a personality type which drives innovation. It can’t be just “Just do it.”

But it is.

I searched for an analogy to explain my advice. Learning to ride a bike is the closest one that I could think of because you get the same advice: “You just have to try and try again. You’ll fall a lot, but eventually you just get it.” I can’t think of a better definition of the entrepreneurial mindset.

Try this thought experiment: replace the activities that people do to be more innovative with “learning to ride a bike”. For example:

  • I attended a conference about riding a bike to learn from others who have done it.
  • I attended a seminar and bought a book about how to ride a bike.
  • I invested in a startup that will help me learn to ride a bike.

Of course, these statements are extreme examples, but they prove my point that some things can only be learned by doing them. To learn how to ride a bike, you need to get on a bike. Yes, you will fall down many, many times. But if you keep at it, all of the pieces finally come together, and you are riding a bike!

The best thing of all? You can’t unlearn it. You will have that skill forever.

What does that mean for you? Start making yourself and your organization fit to try new things, then try some new things. If one of those things is successful, then you will hailed as an innovator.

If you are not successful, then get back on the bike and try again.

 

What do you think of this post? Good, bad, neither? Let me know on Twitter @petershiau.

 

“down she went” photo by goat_girl_photos is licensed under CC BY 2.0

Finally, I can come out of the closet about my MBA. Yes, I have one and from a decent school.  But having an MBA in Silicon Valley is like having an 11th finger, and I don’t even mention it unless someone looks at my resume.

Ben Horowitz at Andreessen Horowitz blogged that it might be time to take a second look at hiring MBAs. Perhaps the cold war against MBAs is beginning to thaw.  And I get it: when I was hired at AOL in the mid-1990s, MBAs were brought in to help put processes in place and rationalize the gut decisions. There were many reasons for what drove AOL to becoming a media company and away from its community (AOL was the ‘social network’ of its day), but having a bunch of MBAs crowing about cash flow and looking for ways to pump up the stock price didn’t help.

But there are also a whole bunch of MBAs who have been in the trenches and understand the fragile dynamic between going with what works and the reflexive instinct to whiteboard a flow chart.  A lot about getting a business degree is about having a tool kit to think through issues and prioritize what’s important to work on.  Of course, you don’t need an MBA to get these tools, but you do get a person who can be a good counterbalance to a technical and/or young management team (see Zuckerberg/Sandberg of Facebook).

Still, I don’t plan on bringing it up at the next cocktail party.

Great article on priorities by Tom Tunguz (VC at Redpoint Ventures) on what start-ups should focus on after building their product: distribution, engagement, and monetization.

Doesn’t seem interesting, right?  But when he lays it out on a table, I just slapped the side of my head and thought: ‘Wow, that’s so simple – why haven’t I seen that before?’ Sometimes you need to reframe what you already know to make it fall into place.

There is also a good discussion after the post about when you can focus on what.  Obviously it’s difficult for a startup to focus on all three with the same level of effort.  So you may focus first on distribution and engagement, and worry about monetization later (say Pinterest?).  As the company matures, monetizaion obviously grows more important after you have found some distribution channels that work and know how much they cost to maintain.

You can follow Tom here: @ttunguz

Blake Masters wrote a great piece on the importance of distribution for your product.  It doesn’t matter how great your product/service is; you still need to get it in front of people.  Many people – myself included –  often underestimate how hard it is and underestimating it will crush your company.

How lucky is Blake to have Peter Thiel as a guest lecturer, and kudos to Blake for sharing the knowledge on Tumbler and Twitter.

Follow me @petershiau.

I love David Heinemeier Hansson (DHH) from 37signals.  He never beats around the bush.  This post is another ‘gentle’ reminder of something that people forget: that everyone is responsible for making the product/service work.

Here is also a link to one of my favorite DHH talks – ‘Unlearn Your MBA‘ – which is ironic since I have an MBA.

 

TechCrunch: How Great Entrepreneurs Create Their Own Luck

I read a great article at TechCrunch – “How Great Entrepreneurs Create Their Own Luck”.  It’s so true.

My favorite line: “And even though serendipity is by definition unpredictable, its appearance is anything but random.”

I often hear about how ‘lucky’ some entrepreneurs are, and when I do, I make a point to correct that person.  Sure, lottery winners are lucky, and maybe employee #1000 at Facebook or Google is kind of lucky.  But the founders of those companies are ‘lucky’ in the sense that they pulled together the ingredients that leads to success.  Luck can be created when you stop to notice all of the opportunities and run like hell after them.

I use this story all of the time. It is such a useful shorthand phrase that if I just say ‘Step 1: Collect underpants’, most people know exactly what I’m talking about. Who knew that South Park would be such a great source for start-up wisdom?

This post from Nerd Fitness is a great no-nonsense explanation.

I saw a fun Nike commercial on Reddit today.  The concept itself is ho-hum.  But the quotes in it are great – like historical versions of the ‘Just Do It’ phrase.

My favorite: ‘In the end, it’s not the years in your life that count.  It’s the life in your years.’ — Abraham Lincoln

 

Yeah, it’s been a while. But I have been busy starting a new app studio called Playaxis and working on a holiday app called ‘Gotcha, Santa!’. I’m very excited to finally see these two efforts get off the ground.

Please visit either Playaxis.com or GotchaSanta.com (they’re essentially the same for now).

Let me know what you think!