Garage.com’s Guy Kawasaki is full of advice for those that dream of making it big in the technology sector. He urges those thinking of venturing into the perilous realm of start-ups to eat like a bird, poop like an elephant, and to let a thousand flowers bloom.
But before imparting his rules for revolutionaries, the Palo Alto, Calif.-based investment capital company CEO went over some lessons learned from the year 2000.
The year which saw many a start-up die taught us that tides go out too, Kawasaki said. But this means that there’s hope, because the tide is bound to come back in.
We also learned that we need more Excel, less PowerPoint. We were at a point where anybody who could do PowerPoint could raise $5million, he said.
“Nobody cared about the business model.”
We need to think in terms of niches, not nonsense. Companies need to find a valuable niche and dominate it, not capture a lot of eyes with nonsensical ideas, he said.
In 2000, companies were getting funding just by entering hot sectors, such as selling pet food and other pet paraphernalia on-line, Kawasaki said, but we need to think in terms of companies, not sectors.
The year also taught us that it’s important to make, then launch.
“Maybe people should make something and then launch it. What a concept. Trust me, it wasn’t being done this way. Most companies focused on launching things. It was the Super Bowl,” said Kawasaki, who worked at Apple Computer from 1984 to 1987, and then again from 1995 to 1997.
Kawasaki urged potential entrepreneurs to trust their gut instincts. In 2000, people willingly started up companies that they knew in their heart could not possibly work. They did it because they saw other companies get funding on dubious business models.
Companies need matches, not flame-throwers, Kawasaki said. Companies worked under the misconception that they needed a Super Bowl commercial and a $1 million launch. But the great companies of the world were started with matches.
Dogs need leashes, Kawasaki stressed, pointing out that many companies raised too much funding in 2000. They also spent it very quickly.
The leading cause of failure is death, and when companies run out of money, they’re dead. But as long as you don’t run out of money, you’re not dead, and as long as you’re not dead, you can change your business model.
After going over his lessons from 2000, Kawasaki described his rules for revolutionaries, many of which he said he learned from the follies of Apple.
The company had split itself into two divisions at one point – the Macintosh division, and the Apple 2 division. The latter made all the money, and the former spent it.
“The Macintosh division were the greatest collection of egomaniacs in the history of Silicon Valley,” Kawasaki said. As a result, the Apple 2 division came up with a good joke about the Macintosh division.
“How many Macintosh division employees does it take to screw in a light bulb? The answer is one. The Macintosh division employee holds up the light bulb and then the universe revolves around him.”
Would-be revolutionaries need to jump to the next curve, Kawasaki said. You can’t stay on the curve that you’re currently on. And when jumping to the next curve, it’s okay to be crappy. “You shit and then test.”
The first telephone didn’t offer much when compared to the existing telegraph infrastructure, he said. “For one thing, you had no one to call,” he said.
“Churn, baby, churn,” Kawasaki told his audience. “I’m telling you it’s okay to ship crap. I’m not telling you it’s okay to stay crap.”
Companies need to concentrate on making evangelists, not sales. Evangelists think your product is a way to make the world better. Apple had a lot of evangelists on its side, Kawasaki said.
But the company didn’t always know what to do with its product, and that’s why it’s important to let a thousand flowers bloom, Kawasaki said.
“When you see people perverting your revolution, that’s a good sign.” People started using Apple’s computers for desktop publishing, which was a gift of God to Apple, he said.
“The only explanation for Apple Computer’s survival is that there must be a God.”
Kawasaki advised his audience to eat like a bird, poop like an elephant. Birds eat 50 per cent of their body weight every day, and revolutionaries need to eat information, they need to read. Elephants, on the other hand, poop 165 lbs. a day.
“When you get all the information, poop it like an elephant,” Kawasaki said.
Those looking for a new business ideas shouldn’t let the bozos grind them down, he said. People will tell you your idea can’t work, won’t work and isn’t necessary, but don’t listen to them.