How investors can negatively impact the psyche of startup founders. Last month, famed investor and Sun Microsystems co-founder, Vinod Khosla, shocked a tech conference audience claiming, “95 percent of VCs add zero value. I would bet that 70-80 percent add negative value to a startup in their advising.” Can Khosla be right?
-Philippe [Thank You HBR | by Nir Eyal 11.02.13] A friend called me heartbroken, crying. She had spent months looking for investors to fund her fledgling startup and now she had a big problem. Someone was ready to give her the money. Trouble was, the cash came with a catch. The only investor willing to pony-up the money was someone she didn’t like. She also got the feeling he did not like her much either, and yet, he wanted to invest. “If he was involved, I have the feeling I would quit my company down the road,” she told me over the phone. Time was running out; she needed the funds and with no other investor ready to commit, she feared she’d have to take the money from someone she couldn’t stand. The very thought made her sick in the stomach. I felt for her and her dilemma piqued my curiosity. What differentiates a great early-stage investor from someone no entrepreneur wants to take money from unless they absolutely have to? Negative Value Last month, famed investor and Sun Microsystems co-founder, Vinod Khosla, shocked a tech conference audience claiming, “95 percent of VCs add zero value. I would bet that 70-80 percent add negative value to a startup in their advising.” Can Khosla be right? Can investors be a liability rather than an asset? “I don’t know a startup that hasn’t been through tough times,” Khosla said, and it is during these rough patches that he believes many investors fail their companies. But there are more ways an investor can screw a company than giving crummy advice.
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Happiness at work is rare. Numerous polls show low levels of work engagement in U.S. companies, with perhaps half of employees disengaged and disaffected. That’s an appalling finding. Create Mastery, Membership and Meaning in order to keep your best employees from divorcing their jobs.
-Philippe. [Thank You HBR | by Rosabeth Moss Kanter 10.23.13] The most motivated and productive people I’ve seen recently work in an older company on the American East Coast deploying innovative technology products to transform a traditional industry. To a person, they look astonished when I ask whether their dedication comes from anticipation of the money they could make in the event of an IPO. Newcomers and veterans alike say they are working harder than ever before. Their products are early stage, which means daily frustrations as they run through successive iterations. Getting them to market demands more than corporate systems can handle, so they must beg for IT upgrades, recruit and budget themselves, and even take on sales responsibilities to explain innovations to customers — which adds to the workload. So much pressure, yet they don’t seem to care about the money? Change is happening so fast, many people just can't keep up. I chose to curate this article because I believe it is absolutely spot on. Thank you Mike Novogratz. We need a change of thinking in corporate America. Globalization and the fear of having your lunch eaten by the Chinese has made "shareholder value" the be-all and end of running a company. It is in the DNA of most of our CEOs. We need a shift where company leaders look at a balance between shareholders, customers, and employees.
-Philippe [Thank you CNN Money | By Lauren Silva Laughlin 09.27.13] FORTUNE -- Mike Novogratz and the other principals of hedge fund Fortress Investment Group (FIG) became instant billionaires when the company went public in 2007. Like many other uber-rich on Wall Street, their wealth, some of it created by loose monetary policy, has become the target of criticism from politicians and activists. Recent statistics have renewed the debate about income inequality in the U.S. As referenced recently in the New York Times, 17.6 million households did not have enough to eat at some point in 2012. The Census Bureau recently reported that 15% of Americans, or 46.5 million people, live in poverty. But, according to the Economist, the share of national income flowing to the rich is at a record high of 19.3%, ahead of both 2007 and 1929. Breaking from typical canned responses given by many on Wall Street, Novogratz offers a candid interview with Fortune about how policy can change to close the income gap, how CEOs need to have a "moral revolution" when thinking about their businesses, and how making oodles of money isn't always considered capitalism. Many people at the country's biggest employer -- Wal-Mart -- are on some sort of government support. In your opinion, how did this country get to where it is now? It's the powerful combination of globalization and technology. In 1989, there were roughly 500 million people who constituted the developed world. Then the Berlin wall fell, and China opened up. Over the next 25 years, the developed world would go from 500 million to 3 billion. Labor supply increased, driving down wages, and the cost of intellectual capital went way up. So you look at a guy like Mark Zuckerberg. He developed a scalable idea that can go to the entire world. His single idea was very valuable. In a lot of ways, this divergence of wealth was going to happen no matter who was at the watch. The Gini index [a measure of a country's inequality] has been on a one-way trend since the '80s through both Republican and Democratic regimes. Change is happening so fast, many people and maybe our political system just can't keep up. What the government has a responsibility to do -- and has the possibility of doing -- is looking at these mega-trends and looking at what this does to our communities. Is this the environment that we want to live in? Is this the country we want to live in? Perfectionism can actually get in the way of productivity and happiness. If you are a perfectionist, overachiever or workaholic you are probably used to taking on big challenges. The nature of the obsession makes it easy to do what is hard. Paradoxically, it may be harder at first to try to be average. Sounds Familiar ?
-Philippe. [Thank You HBR | by Greg McKeown 10.30.13] Do you ever “back door brag” about being a perfectionist? Unlike other obsessions and addictions, perfectionism is something a lot of people celebrate, believing it’s an asset. But true perfectionism can actually get in the way of productivity and happiness. I recently interviewed David Burns, author of “Feeling Good” has made this exact connection. In his more than 35,000 therapy sessions he has learned that the pursuit of perfection is arguably the surest way to undermine happiness and productivity. There is a difference between the healthy pursuit of excellence and neurotic perfectionism, but in the name of the first have you ever fallen into elements of the second? Taken to the extreme, perfectionism becomes a disorder. Burns shares the wild example of an attorney who became obsessed with getting his hair “just right.” He spent hours in front of the mirror with his scissors and comb making adjustments until his hair was just an eighth of an inch long. Then he became obsessed with getting his hairline exactly right and he shaved it a little more every day until his hair receded back so far he was bald. He would then wait for his hair to grow back and the pattern continued again. Eventually his desire to have the perfect hair led him to cut back on his legal practice in order to continue his obsession. This is an extreme example to be sure, but there are less severe ways in which our own perfectionism leads us to major in minor activities? Have you ever obsessed over a report when your boss said it was already plenty good enough? Have you ever lost an object of little importance but just had to keep looking for it? Do colleagues often tell you, “Just let it go”? |
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