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In Berlin and on start-up ecosystem self criticism

I spent a couple of days in Berlin this week with other members of the Balderton team. Balderton has been going to Berlin for a very long time and we have a great history of investments in the city (Wooga, RTT and Adjug are among the big names) and while it’s still relatively new to me I’m really excited to have joined the board of our portfolio company Contentful and so will be returning to the city frequently from this point on.

One of us is probably in the city almost every week of the year, but it’s rare for a bunch of us to descend at one time and, when we do, it gives us an excuse to organize bigger things than individual meetings, so we were able to set up a lunch to bring together some of the most interesting angel investors in the city and then take part in an event organized by the awesome Kerstin Bock and Nico LeWoi of Tech Berlin and @opnrs.


Nico expounds with my colleagues Rob Moffat and Daniel Waterhouse

The session was called #ScalingBerlin and there was a good discussion on where Berlin is in the entrepreneurship ecosystem lifecycle and how it compares to other hubs including London, Stockholm and, of course, the Bay Area. Hopefully the video that was being made will come out soon, but in the meantime, a few memes that kept re-surfacing and I think are worth repeating:

  • Depth Matters: It’s hard to start and build companies in a void. The Bay Area has decades of history in this and generations of people who’ve done it before who are ready to pitch in and help. This sort of historical depth is finally happening in Berlin. Ciaran O’Leary wrote about this is his post The third wave of Berlin Startups in more detail than I can or will here and is well worth the read.
  • Embrace Rocket: Once upon a time, plenty of people were happy to dismiss Rocket Internet as nothing more than a clone factory … as though that was all it did and as though that was an easy thing to achieve. I think that mood has changed in Berlin. It’s impossible to argue with Rocket’s success (in many, many different verticals and many, many different markets) and its model is a totally unique one. For once a European city is leading on what entrepreneurship and innovation looks like, rather than following the lead of the US or Asia – this is something to be proud of. Rocket is also a breeding ground for talent that is multi-faceted, experienced, hungry and knows how to build fast.
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    Openers event at the Axel Springer Entrepreneur space

    Patience: Perhaps the hardest thing of all for people who are, by their nature, very impatient, is the need for patience. Ecosystems take time, success takes time, building companies takes time. It’s good to be self-critical and to ask how your city is doing vs. others but be sure not to do this so much that you’re really just navel gazing and don’t let the pundits who need a new story every month get you down – this will take time to get right.

Performing in the Present Moment

(This post originally appeared on the Huffington Post).

I grew up in Manchester and while not a big football fan, it is difficult to forget United’s remarkable 1999 “Treble” season. The match that sticks most was the very last – the Champions League final against Bayern Munich. Bayern scored just six minutes into the first half and the teams played back and forth, well-matched to each other, for the rest of the 90 minutes. Victory looked certain for the German team and Bayern ribbons were attached to the Trophy as it began its journey to the presentation ceremony as the referee signaled just three minutes of injury time.

And then, as if the previous 84 minutes meant absolutely nothing, everything changed. United scored two goals, first equalizing and then winning the match and, therefore, the Championship. In three minutes of critical brilliance, the team turned everything around, shocking a global audience of millions with an audacious victory. What the United players did (and what everyone else that day missed) was realize that (even recent) history didn’t matter. Just because they hadn’t scored a goal in 90 minutes didn’t mean they necessarily couldn’t in the following three – the barrier to that was in their heads more than it was at their feet. Instead, by playing every second as a fresh one and taking every opportunity pulled off the unthinkable.

A difficult day for Munich – from

Believe it or not, there are parallels between this sort of performance the the life of a startup CEO.

In the latter case, of course, these frenetic, down to the wire moments get lived out not on a pitched watched by millions but … yes, in grey conference rooms.

For example, a few years ago, I sat in just such a grey, windowless conference room in a suburban Marriott. Alongside me I had blinkx’s CFO, our lawyer and an investment banker. Opposite me was a team of identical make-up from a company we were in the final stages of acquiring.

The team on the other side was in a tough spot. They were running out of money. Already dependent on a line of credit they were hoping to pay off with aggressive cash collection they had a team to pay, suppliers owed payment on services rendered and increasingly irate partners who were waiting for revenue share payouts. On the other hand, we had every piece of leverage an acquirer could want. While we liked the company, we didn’t have to do the deal. We knew the weak attempts to pretend there was a stalking horse were just a smokescreen. And, most of all, given their precipitous position, all we had to do was walk and there was a very real chance the company could fold in the coming months or even weeks.

Yet despite that, my opposite number, the target’s CEO, was on top form. Joking, smiling, he pushed back firmly on our attempts to lower the price and bargained strongly for assurances for his team, his partners and customers. He had effectively blocked out all of the noise and focused on just one thing: the task at hand. Today, for him, that task was to get the best possible deal out of blinkx and that was all he cared about.

I’ve always found doing a tech start-up to be an irrational thing. You never have enough cash, you have a small team, you’re competing against monoliths with momentum and yet you take it all on. As a CEO, you strive to block some of that reality out for your team: letting them focus on the product, the business while you worry about where the next round of pay checks is actually coming from. But then there are the moments when, despite everything you know, you have to play the same trick on yourself and block out everything except the current problem, the current focus. In yoga this being in the present moment is a key component of sati, or mindfulness. Some people can attain this state naturally, the rest of us have to learn. Luckily, it turns out there’s been a lot of research in just this area but to find it, you need to leave the engineering department and business school for a moment to find and head, instead, to the psychology faculty…

In my spare time, I’m honored to have had the opportunity to chair the Advisory Board for the Sport Psychology Department of JFK University, in the San Francisco Bay Area. I originally got interested because a friend runs the department, but I really got engaged when I realized just how many of the challenges Sport Psychology practitioners help their clients with have parallels in business. The cross-over field that has sprung from this, typically called Performance Psychology, is fascinating and offers lots of hints for those trying to understand how their psychology plays out and what to do to control it. Without further ado, let me hand over to my friend, Head of Department at JFKU Dr. Alison Rhodius:

Being in the present moment is a critical capability for any high-performing sportsperson. At the highest levels of competition, however good you are, you will likely have challenges and letting recent failures or bad form affect current performance can lead to a perilous negative spiral. The Manchester United/Bayern Munich example is a good one. Although they may have thought about a winning comeback when they were so far behind, United had to focus on one play at a time: they had to think, feel and be in the present moment. They couldn’t rely on any chokes from Bayern to bring them the win. Any of the United team could have got distracted by a number of psychological issues, including anxiety (worries about the future – “Can we do this?”), depression (sadness about past mistakes – “if only we had done something different, we wouldn’t be in this position”), or loss of motivation (“we have tried so hard and STILL can’t win and now we’re 1-0 down with just 3 minutes to go”). But instead they focused on what needed to change and kept their focus in the moment – “what do I need to do right here, right now to turn this around?”; they fought and stayed present.

So how do the most successful sports people ensure they stay in the present moment? Here are four key techniques elite athletes use:

1) Focus on your breath. Becoming more and more aware of your breathing and trying to control it more is simple, yet incredibly effective. Several times a day set a timer (or download a mindfulness app) and breathe slowly for at least two breaths and focus on the coldness inside your nose on the inhale and the warmth of air on the exhale.
2) Keep your goals measurable and simple. Keep no more than two goals in mind as you perform and be explicit in defining them. Knowing precisely when you have succeeded (and what you did to get there) will teach you more for future success than choosing to just vaguely “work harder” or “better than last time”.
3) Keep just a few pre-planned words or phrases ready as part of a mental routine. You can say these to yourself regularly to remind yourself of what you need to focus on. They can remind you about why you’re performing and to keep fighting
4) Take a moment before you perform (regardless of whether your performance is going to take 10 seconds, 20 minutes or several hours) and think about what you want your performance to look, sound and feel like. If you can practice this many times before you do the performance, then you will have reinforced good ‘images’ about how you want it to be.​

The Next Chapter

Earlier today we announced that I will be joining Balderton Capital, an early stage Venture Capital firm, as a General Partner. blinkx started back in 2004, and this is the first time I’ve done anything other than that in ten years (well, apart from that whole getting married and becoming a dad thing of course!).

I will write more about what I’m looking at and my experiences on this new path soon but, in the meantime, I’m just really very excited to be throwing myself back into early stage companies that are trying to re-write the rules and nothing short of awestruck that I get to do it with a team as talented as the team at Balderton. They already work with and for a roster of some of the most interesting new companies in Europe and I look forward to finding more with whom to work.  There’s a lot going on right now and between my continuing role at blinkx and this new endeavor I’m fortunate to have a prime vantage point on these exciting times and I’m committed to continuing to share as much of that as possible with those who are interested.

Since when did we become a nation of (over)sharers?

(this article first appeared in The Metro newspaper in their paper edition on Sep 10, 2013)

How often have you clicked the ‘share’ button underneath an article, or a video after watching? According to our Nation of Sharers research, 85% of you are actively sharing content after watching. The proliferation of social networks and powerful connected devices into our daily online habits has profoundly changed the way we interact with the web, with sharing becoming a natural follow on to discovery.

We have been looking closely at our users behaviour, as well as analysing people across the UK – and found that increasingly we are relying less on traditional search engines to find the content we want. We’re using engines like Google as a starting point much less, and instead, we’ve become comfortable scanning and processing long streams of information – Facebook pages and Twitter feeds – content delivered to us by our friends and the people we follow.

Sharing - more popular than you may realize (Image from The Producer's Perspective)

Sharing – more popular than you may realize (Image from The Producer’s Perspective)

After monitoring this trend, last year we had the idea to completely overhaul our video search site to enhance the discovery experience with new personalization and recommendation capabilities, and simple integration across our users’ social graph.

We also conducted our own Nation of Sharers study that found that nearly half (43%) of people aged 18 – 24 prefer to discover through their social networks rather than search engines. This means we are starting to trust twitter over Google. Traditional search will always have a place – but the balance is definitely shifting.

We consulted on the research with leading psychologist from Goldsmiths University, Dr Jonathan Freeman, who conducted supporting research around human behaviour and social media. His team at i2Media worked extensively on what makes a social object (be that a video, picture, song, words) shareable. According to his findings we want to be seen by our friends and followers to be sharing interesting and exciting information – and so brands and publishers have a new opportunity to target the ‘right eyeballs’.

More and more we are opting for a ‘lean back’ online experience – waiting for content to be delivered to us, rather than going to look for it. Essentially, sharing has become the new route to discovery (videos are shared more than anything else on Facebook, including pictures) – and so for any media business to work and engage an audience, a human approach needs to be employed.

We created a new tool especially for this, called blinkx Video Advantage that allows our publishers to have complete control and curate their own content playlist – and actually start generating revenue from video. It’s simple really, we provide video that is topical to their site, then relevant brands advertise against it and the viewer gets personalised content that they want to share.

Creating something worth sharing is all about authenticity. It is an extremely powerful concept – the idea that people can effectively be evangelists for a brand simply by doing what is now natural to their online behaviour, especially when our reliance on recommendation and shared content is only set to grow.

The Final Frontier: Tech Entrepreneurs in Myanmar

(this article first appeared in Forbes and the World Economic Forum Blog)

Downtown Yangon - the final frontier for business, technology, entrepreneurs?

Downtown Yangon – the final frontier for business, technology, entrepreneurs?

The team at Burma Computing Systems (not its real name) had a problem. They had a significant deal with a Singapore customer and were on-site installing bespoke software. The software itself was hosted on servers at BCS’s headquarters. The problem was that a) BCS is based in Myanmar, b) this happened four years ago when the country was still closed off from most of the external world and, c) for some reason, all internet connectivity in the country had stopped for four hours. The team at HQ realized they were running out of time and so did what entrepreneurs do best: hustle. They ripped the servers out, threw them into a truck and drove to the Vietnamese border. Getting to the border, they hustled again. After an hour of negotiation they were allowed through and stopped at the first cybercafé. Then, once more: the hustle. Bursting into the café, they found the owner and negotiated exclusive use of his connection. Finally they re-attached the servers, called their teammates in Singapore and re-initiated the installation process, meeting the deadline by the slimmest of margins.

This story was recounted to me when I visited Mynamar in early June as part of the inaugural World Economic Forum on South East Asia. While the majority of our time was spent in Nay Pyi Taw being introduced to the country’s broad strategy, we also spent a day at the Myanmar ICT Park meeting local technology entrepreneurs who shared more than a few tales like the one above.

Meeting with Myanmar Technology Entrepreneurs at the ICT Park outside Yangon

Meeting with Myanmar Technology Entrepreneurs at the ICT Park outside Yangon

During the day, we were reminded of the stark challenges facing Myanmar’s nascent tech industry. The power went out three times, and there was much discussion on the challenge of building an e-commerce business in a country so underdeveloped that it has just one ATM usable to foreigners. Basic services considered essential in Silicon Valley and other technology hubs cannot be relied upon in Myanmar, although the country’s leadership is taking all the right steps to fix these issues: improving its legal systems, relaxing financial constraints on external investment, building telecom infrastructure, running an open auction for its cellular spectrum and even adapting university syllabi for modern needs.

The staggering Shwedagon Pagoda in Yangon, Myanmar

The staggering Shwedagon Pagoda in Yangon, Myanmar

These changes will take time, but despite the massive uphill struggle ahead, I found myself excited by the potential the industry has. Why? Because, in years of analyzing why Silicon Valley works and why other, equally well endowed hubs do not, I am not alone in identifying a primary issue being a mentality gap. Maybe it’s San Francisco’s gold rush history or the anti-establishment streak that defined the area in the 1960s, people in the Valley bring more than money and skills to the table. They bring a belief that what they are working on matters. When their businesses hit inevitable road bumps, they don’t give up. The drive is too great. They hustle and hustle and hustle. A pivot here, a re-factoring there, a new round raised and a new team assembled. This was the mentality that I saw in Myanmar. While the decades spent under the wilderness of international embargo may have given rise to massive infrastructural (but ultimately tractable) challenges, those same conditions mean that the entrepreneurs in Myanmar have already proven they can thrive in extremely difficult conditions. Ironically that cultural advantage is the hardest one to create in aspiring entrepreneurial hubs and, as a result, Myanmar may find innovation comes more naturally than for others.


When Data Fails: the importance of gut decisions

(this post first appeared in VentureBeat)

The Pain of the Pivot

I remember the conference call distinctly.  It was mid-September 2004 and I got the entire blinkx team together for a big announcement.  We’d spent most of the last year on a desktop-based search product.  We’d had rave reviews from blogs, tens of thousands of downloads, our advisory board was happy, and our engineering and product team had new features they wanted to roll out over the next six months.

Despite all that, my call was to stop work and change direction entirely.  In the previous release of the product, we’d launched a mini-feature called ‘Video Suggestions’.  Sitting behind a tiny icon it let users browse video content from the web relevant to any given topic.  The feature was new and the data scarce, but I announced that we were going to pause all desktop search development and instead build a web video search engine. To launch before the holidays we had just three months to build it, index millions of video clips and secure the marketing necessary to make the launch a success.

I made my big announcement and was hit by a wall of silence.  Starting slowly, soon the pushback was flowing hard and fast in my direction.  There wasn’t enough evidence that this was the right thing to do; all the hard work thus far going to get abandoned; we were throwing away a lead in one market to start in another where we had no brand, no footing.  All of this was right.  All of it was rational, logical, sensible.  Yet something in my gut made me feel I knew better.  I just knew we had to switch and, as CEO, I made that call.

After coaxing, bribing and steam-rolling the team got started and re-launched as a video search engine on December 16 with an article in the Wall Street Journal that brought us an immediate audience.  The exhausted team continued to question the decision—there was no guarantee that the new site would be popular and, worst, Yahoo had launched a rival product precisely a day earlier.

In the end, though, history has proven the pivot right.  Desktop Search, then a hot market, never really came to anything—it got bloated with competition (Google Desktop just a month after we switched direction, Yahoo soon after), then became irrelevant once both the Mac and PC OSes added built-in search functionality. Google discontinued its product in 2011.  Meanwhile, online video has been one of the most influential, significant technology trends of the last decade.  Through it blinkx has continued to grow, doubling in revenue every year on average since 2007 and emerging as one of the true successes of the market (alongside the industry’s big hit, YouTube, and others like the successful video ad networks run by Tremor, Brightroll and others).

Data-driven management misses the value of gut calls

Silicon Valley management strategy fashion suffers from faddish tendencies.  Recently, the CEO gut call has shrunk from prominence as the industry’s fetish on data-driven decision-making grows unabated.  It’s difficult to read about the way companies like Google and Facebook work internally without hearing over and over that data always rules.

As an engineer, I get this.  It’s driven by the scientific method and it’s only natural that this trend will continue.  In fact, at blinkx, we obsessed as much about measurement data as we did about product features from the earliest days and our team’s pedantic attention to detail on stats has driven some of our biggest successes over the years.

But at times worshiping data can fail.  Sometimes it’s impossible to collect the appropriate data at all and at other times you have some relevant data but realize that new, hitherto uncollected data, might reverse the prognosis.  When in this position, you have three options: stall while more data is collected; make a decision based on current data; or ignore the data and go with what your gut says. Problem is, the first two often don’t work.  In the time-starved reality of the tech industry, waiting is really decision by indecision.  And making a decision based on data that you know is incomplete and/or flawed is just an exercise in CYA.

Three tips on how to make better gut decisions

As a result, I believe most leaders will face the need to make gut calls throughout their career—here are three things you need to know about them:

1)   Prepare your ability to take gut calls.  Start by creating an environment that facilitates confident gut calls.  The reality is that gut calls still depend on data, just not obvious or complete data.  The more data you feed yourself, the better you’ll be at gut decisions so keep track of any random detail that might inform strategic thinking.

For example, when blinkx switched to the video product, anecdotal data points gave me confidence to change direction.  I’d noted that the video feature in the desktop product had received more positive feedback from journalists than any single feature before.  While the base was low, I had also noticed that the video feature was growing faster than any of our other ‘content channels’ had at the same stage in their development.  And last, and least quantitative of all, I’d noticed how much stuff I was reading EVERYWHERE about the rise of online video.  Did this data add up to a logically sound decision?  No, but there was a heavy hint I felt increasingly good about in there.

2)   When you make a gut call, grasp its enormity.  It’s important not to make endless gut calls that send your team scurrying off on diversions, so understand the scale of the responsibility in the decision.

In 2011 blinkx acquired Burst Media.  I had pursued the deal over months but, in the last week of negotiations, it looked like things were going to fall apart. Nervous, I called a board member for counsel.  I went back and forth—I loved the team and believed in the strategic value, but the deal was proving complex and what if the market hated the idea in the short term before we were able to prove how great a move it was?  The board member cut me short with a curt response, “listen, Suranga,” he said, “this is other people’s money you’re dithering about.  Millions of dollars of other people’s money.  I don’t know what you should do, but you do.  Just do what you know is right.”  It lacked sympathy, but the call created clarity.  You can never analyze this completely, so stop trying and make a decision because not making a decision might have the biggest cost of all.

3)   Once you’ve made the call, commit.  By their very nature, gut calls can’t be defended by data so once you’ve made one, be prepared for strong follow-through.

Once I wanted to re-arrange a remote office, pulling people out of their offices and into a dense but open space.  We were not the only ones who liked the transparency this structure promotes and I like the buzz created by having tech, sales, and marketing in the same place.  blinkx HQ has always been like this and, though I did get my own office seven years into the company’s development, I still spent 90% of my time out of it.  Of course I got fervent pushback.  People had great, rational arguments: they needed the space for their particular job, they had private calls to make, sales would annoy tech by being on the phone all the time, etc, etc, etc.  I was never going to win this argument on data: there is no data that shows, definitively, that what I was suggesting was the better thing to do.  Instead, the whole management team stuck to the decision and showed no weakness whatsoever. Behind the façade, of course, we listened and six months later made some changes back and even transplanted some of the new ideas back to blinkx HQ, but showing weakness up front would have fatally diluted the impact of the gut call.

The ability and confidence to make gut calls is one of the great tests of being a leader.  I meet would-be CEOs all the time who think they will apply data and process to every decision they need to make.  Beware: the real world doesn’t work this way.  Sure, start with rigor and data, but be ready to leave it behind when you need to.  Collect data, even if it doesn’t always fit perfectly; take big calls seriously, realizing that not making a decision can be as bad as making the wrong one and once you make a move, be ready to weather both the negativity from others and your own emotional reaction in the inevitable cases when it all goes wrong.  If you can do all of this, you have part of what it takes to be a great CEO.  If not, you may struggle.

The Future of Online Video: It’s about more than Video

(this post first appeared in The Huffington Post and M&M Global)

In popular use, the word “TV” is a convenient catch-all used to describe the medium of television, the physical box one receives it on and the content itself.  If you think about it, this stopped making sense many years ago: the three are actually completely different things.  Today I can watch TV—the Content—on my computer, I sometimes enjoy TV—the Televisual Medium—in the form of a film on a big screen at the cinema and the main things I watch on my TV—the Physical Box—are video games.

The spectacular adoption of Online Video has further muddied the meaning of TV.  In the online environment, offline-TV companies and networks cling to terms like “made for TV” or “Television produced” or, perhaps most questionably, “Professional”, in order to position their content as better or more valuable than the (presumably sub-par) stuff made by others.  Meanwhile a crop of newer companies have built a name for themselves as the ‘x’ of Online Video .  Ooyala and Brightcove are the Online Video platform providers, Brightroll and others the Online Video Ad Networks and, of course, the Online Video Search Engine.  But all of this Video-centric positioning is as meaningless as the so-called ‘TV companies’ of the offline world.  You may want the world to think you’re different, you may even believe you are different, but you are only truly different if you are different to your most important constituent – your audience.

Steve Jobs famously said “You have to start with the customer experience and work backwards to the technology – not the other way round.”  Try doing this with Online Video.  Do you sit down in front of your computer (or phone or tablet) and think to yourself, “I’m going to do some Online Video now”?  Or do you sit down and think “I need to know about X” or “I have half an hour to kill, what should I watch?”  I would bet it’s the latter.    Sometimes you watch it because it’s the best way to understand something (how to tie a bowtie), sometimes because it’s the only option (the FT runs some amazing Leadership interviews that do not appear in print) and sometimes just because it fits your current mood (I could read The Economist, but I’d really rather sit back in front of an episode of Chopped.

Furthermore, I’m willing to bet you freely mix Online Video with other, non-Online Video content.  Sometimes I watch a video I find particularly interesting, so I tweet it or stick it on Facebook to see what others think.  Sometimes a TV show we’re watching at home gives rise to a debate that is answered by watching a video on YouTube.  Sometimes I’ll watch news headlines on the bus on my phone (I can’t read in moving vehicles) and then open new browser tabs on certain stories to read in depth when I get to my desk.

Interestingly, if, as Jobs suggested, you work back from this consumer experience to the technology, it turns out that there are no technical constrictions affecting this freewheeling use of video in the context of the Internet. .  From a technology perspective, the Internet simply transports data from one place to another.  The nature of the data is abstracted from the underlying technology and your computer doesn’t care whether the link you just posted is to video, an image or a piece of text.

What does this mean to those of us in the Video (or TV) world?  It means we must think differently and stop limiting ourselves with artificial, outdated terminology.  Yes, there was a meaningful business to be had being a Video Advertising Network or a TV production company, respectively two and twenty years ago but, in the next twenty years your customers won’t see it the same way.  Video Ad Network?  Why bother?  If I promote my brand, I want to buy ALL media that reaches the people who need to know about my brand.  Video Production Company?  Nope.  If I’m a commissioner, I don’t just want the show – I want the second screen app my viewers are going to use alongside the show, I want the web AND the social presence that’ll sustain my audience community in between seasons.  At blinkx, we realised this a few years ago and began  translating our lead in video to build a product that we knew our customers would want over time.  This is why you don’t have to come to to experience our technology: you can use it at your regular default search engine where you search for video alongside text, images, news and everything else.  It’s why we embed relevant content directly into text pages so you come across it while you read at the right time, in the natural place.  It’s why although we lead with video, we can sell you other ad units around the video to complement the entire campaign you’re trying to run.  None of this means we don’t focus on video, it just means we obsess over understanding its place in the ever-changing context of media consumption.

While there’s a need for corporate bravery in navigating this kind of industry transition, it is worth keeping an eye on the prize. In the future, as a brand you will be able to engage and interact with your customers across an infinite range of connection points; It’ll be like you know them, and can talk to them, can listen to their concerns and modify your products and offerings to suit dynamically.  From a consumer perspective, it means you’ll be able to access whatever you want, whenever you want and in whichever form makes the most sense.  I think that’s a New World worth being Brave for.

The Boffin Fallacy

Boffin Fallacy
(ˈbɒfɪn fal-uh-see)
— n
The misconception Technologists do not understand business – that it’s something they can’t do, something they won’t enjoy and something that is beneath them.

As I mentioned in my last post, I spent last week delivering the Turing Lecture around Britain. The Lecture is normally a rather technical affair, but one of the reasons the BCS and the IET invited me to participate was to address the commercial side of computing. Computing has been an area of both commercial and academic endeavor since its very early years, and I enjoyed being given the opportunity to talk about my own experiences, graduating from a very academic institution yet, ultimately, following a very commercial path. There’s been a great deal of interest in Britain recently about the role innovation-led business can play in securing the kind of growth required to get the country’s economy motoring again, so it turned out to be a well-timed theme. Historically, the prevailing perception has been that Britain turns out great scientists, inventors and technical minds (from here I call them ‘technologists’ collectively) but cannot match the American flair for business and marketing. Critics often blame the education system, suggesting that there’s some missing ingredient in the syllabus, or point to the absence of an ecosystem like Silicon Valley but, after much reflection, I disagree. While there is clearly room for improvement, I don’t believe that any lack of entrepreneurship in Britain is related to a skills gap or even challenges such as access to capital, or an economic environment that punishes or deters entrepreneurs. I think the problem is mindset. British culture has a warped view of the technologist—a bumbling boffin who can’t and won’t succeed at business. This attitude, a phenomenon I call the Boffin Fallacy, was the core of my lecture and is the reason I think Britain fails at the technology business, at least in comparison to the US. The most damaging property of the Boffin Fallacy is not that the country woefully underestimates and pigeonholes its brightest technologists; it’s that the technologists have heard it so often that they have come to believe it themselves.

I believe that in recent history Britain has underestimated science and engineering. Once a highly regarded and gentlemanly pursuit, at some point ignorance of these disciplines became a perverse badge of honor. C.P. Snow probably made this point the best (if you haven’t read the Two Cultures, it’s worth a read—both for the content and also for a reminder of a time when great arguments were made over an hour, and were not reduced to simplistic, TV-friendly sound bites). I won’t be able to capture the depth or breadth of his arguments here, but to summarize, as a successful author AND chemist and therefore a member of both the literary and scientific classes, he was dismayed by the great divide between the two disciplines and, in particular, how members of the former appeared quick and proud to dismiss any understanding of the latter. He tells anecdotally of testing this by asking those with a liberal arts background whether they knew what the Second Law of Thermodynamics states. He shares that most are ignorant of the law even though, as he says, the question is the scientific equivalent of asking if you’ve ever read a work of Shakespeare. Snow delivered the Two Cultures lecture in 1959, but this isn’t merely a historical prejudice. Only last year, Alan Sugar, Britain’s own Donald Trump and around the time, the UK Government appointed ‘Enterprise Champion’, dismissed a contestant on Britain’s version of the Apprentice with the disparaging comment that he “never knew an engineer who could turn their hand to business”. Technologists hit back in force—James Dyson wrote an eloquent piece about the country’s misunderstanding of engineers and engineering, while Eric Schmidt, who was visiting the UK at the time, simply retorted, “Really? I don’t think we’ve done too badly!”. But British technologists can’t simply blame everyone else. We have our own disdain for business. During the lecture tour, I played a small trick on my, primarily technologist, audiences. In an updated version of the C.P. Snow question, I asked them if they knew what a Discounted Cash Flow was. Before my lecture, I don’t think most did and would have reacted with the same disdain of a Classics major being asked about the Second Law of Thermodynamics even though I think I can make a convincing argument that the DCF and its use in valuing assets the world over is as significant a force in our lives as the latter. I think this demonstrates that the Boffin Fallacy isn’t simply engendered by the British population not getting technologists. It’s exacerbated by technologists not pursuing (and not wanting to pursue) commercial opportunities. Smart kids who study science and engineering in Britain are encouraged to pursue an academic or at least technical career, there’s an insidious implication that there’s something impure or less exalted about commerce and the block and tackle of business.

I know this because I felt it myself. When blinkx, originally an internal project at Autonomy, readied itself for spin-out and started looking for a CEO, the Autonomy management team kept asking me to take the role. I spent months saying no, assuming there was some special ‘business knowledge’ that I, as a technologist, didn’t possess and assuming instead that the role of CTO was somehow more appropriate (and, ok, I’ll admit it, glorious) for me.

I am, of course, generalizing. There are particular skills and abilities that mean some people are better suited for being an entrepreneur, a CEO or a businessperson. But my point is that I don’t believe technologists are any innately less likely to possess these talents and, while a bit of training can help, I seriously question the idea that an MBA is required to do the job well. In fact, given the increasingly quantitative reality of areas like marketing and finance, I’d make the argument that the analytical, rigorous nature of science and engineering degrees, might make those technologists better equipped to run a business than ever before. Look at just about any list of technology companies in the US and time and time again you’ll find technically educated CEOs (nary an MBA in sight) both start and run companies.

The good news, in Britain at least, is that this appears to be changing. Firstly, as the speech above shows, the government has identified that innovation-led growth is a key ingredient in helping the country out of its current rut. Second, and remarkably, given current economic climate, it has put its money where its mouth is by funding innovation centers and initiatives galore, with over half a billion pounds in investment over the last few years. Also, there are real signs that computer science (versus basic IT) may soon be included on school syllabuses and organizations like the Royal Academy of Engineering, British Computing Society and Institute of Engineering and Technology are all pouring funds and efforts into drawing kids toward technology and also into the business of technology and innovation. (Disclaimer: I’m a member of all of these organizations—this is probably why I’m aware of their recent programs, I’m sure others are doing the same). And, no less important, there are great people out there who are trying to spread this story in their own, unique ways. Some of them came to my lectures and it was great to hear about the ways they are engaging the population to shift this mind-set. The lectures also attracted a whole bunch of entrepreneurs, young and old, neophyte and serial, which was great to see and cities like Cardiff, Glasgow and Manchester are able to hold their own against London in this respect too.

I ended the lecture on this positive note: there is no doubt that Britain with its great education system has, for generations, been the birthplace of amazingly talented inventors whose creations mean the country continues to punch above its weight in innovation and technology. The tragedy is that for a very long time now, we have failed to help these inventors follow through and create and run the businesses that exploit these inventions. Data shows that these technology/founder CEOs do better than their hired ‘businessperson’ counterparts, so when the Boffin Fallacy gets in the way and stops them from making this leap, we end up limiting the positive commercial, societal and even technological impact of their ingenuity. We end up selling innovation short.

Thinking of Alan Turing

Next week I take a break from my day job and spend a week touring the UK delivering the Turing Lecture. It’s a massive honour to have been asked to do this and an experience I’m really looking forward to. Britain is a beautiful country and, living in the US and visiting only for business as I have for the last few years, I have missed the vistas of my childhood—sure, London’s great and majestic in its own way, but I’m looking forward to almost 24 hours on a train, as we make our way between London, Manchester, Glasgow and Cardiff. The BCS and IET (who organize the Lecture Series) have also lined up a number of interesting meetings, many with new entrepreneurs or academics in each of these towns and I’m looking forward to hearing about what people are working on.

Turing holds a special place in my personal psyche. I studied Computer Science at King’s College in Cambridge, which happens to be Alan Turing’s old College. If you study somewhere like Cambridge, people tell you that you need to prepare to no longer be the smartest person in the room … this message is rammed home for any Kingsman or woman studying Computer Science treated, as they are, to an endless reminder that they’re following in impossibly large footsteps that they will really never, ever fill. (This is ok: in my experience, a little humility is not a bad thing when you’re 18!) The College’s computer room is called the Turing Room, the Department has its own Turing Room that you pop into for supervisions almost every week, just about every lecture course has a reference to some aspect of his work, you stumble across his portraits in various rooms in College and, even if you try to dodge work as I did and take up rowing, you’ll discover that one of King’s College Boat Club’s seven boat-strong fleet is called … you guessed it, The Turing Machine!

Kingsmen and women aside, no computer scientist should forget Alan Turing. He who invented the computer, set one of its most compelling (and still unresolved) challenges and then, for bonus measure, made unique and critical contributions to ending World War II through his work at Bletchley Park. In equal parts amazingly and tragically, he made all of these contributions by the age of 41 when he took his own life, seemingly driven to despair by a society that refused to understand his homosexuality and instead punished him for it.

Most people I come across know about the Turing Test and the cracking of the Enigma codes, so allow me to indulge a couple of paragraphs here on his first major discovery. For those who don’t know (and shame on you if you are British and/or a Computer Scientist!), in 1936, Turing essentially invented the computer.

In answering an esoteric mathematical question regarding the extent to which one can prove propositions within a well-defined logical system, Turing needed a model to articulate his argument. He decided on an imaginary machine that was a little like a typewriter, but equipped with the ability to read as well as print symbols and a step-by-step method of processing that would allow it to solve problems when appropriately configured. This blueprint – the Turing Machine – forms the basis of all modern computing.

In a century packed with technological advancement, the computer stands tall, a colossus of invention due to the remarkable ubiquity of its utility. In the modern world, computers do a lot of things. Behind the scenes, they control and regulate devices as simple as alarm clocks, as commonplace as telephones, as complex as jumbo jets and as critical as pacemakers. They are used to model and predict the stock market, the weather and the spread of disease, both across continents and within a single organism. IBM’s Deep Blue beat the world champion Garry Kasparov at chess in 1997; in 2009, Google’s computers provided results for 293 million individual searches every single day and, just a few months ago, eHarmony reported that 500 of the people who get married in the US every day first met on their website. Turing was not blind to the societal or commercial utility of his inventions. Writing to his mother in 1936, he described recently completed work on cipher algorithms suggesting that he might be able to ‘sell them to H.M Government for a quite substantial sum’, but I think even he would have been staggered by the reality we live with today; in 2009 the US Federal government alone spent over $180 billion on information technology. Turing’s Machines are everywhere.

Next time you use a computer (and, let’s face it, you’re probably using at least ten reading this), remember Turing and remember also the repulsive, destructive thing that is prejudice.

Know When to Hold ‘Em, Know When to Fold ‘Em

In high-growth start-ups, learning to assess talent is a critical skill

A few years into the building of blinkx, a very senior person on my team burned out right before my eyes. This person, let’s call him Dave, was (and is) a legendary contributor and one of blinkx’s best secret weapons. He led the charge on key products including two skunk works projects entirely of his own creation that ended up driving tens of millions of dollars of revenue for the company. One night after work he sent me an email: “Urgent: can we meet early tomorrow morning? Not in the office—the Ferry Building at 8:30?”

As soon as I saw him, disheveled and looking like he had not seen sunlight in weeks, I knew something was wrong. He didn’t waste time. “I’ve got to go,” he said. “I can’t come in today or who knows how long.” Just like that, with zero notice, he quit. I told him he should do what is best for his health and his family but internally I was reeling in shock. On the walk back to the office all I could think about was how to pick up the pieces. How would I break the news to everyone else? What would I say was his reason for leaving? How long would he be gone? Who would fill in for him until we brought in a replacement? What if he never comes back?

It may be trite but it is also true that the most important resource for a startup is its people. Moments of hiring and firing can be crucial inflection points in a company’s life. Founding and building blinkx from zero $100 million in revenue involved lots of hiring and team building but I quickly learned that knowing when to let people go is an equally critical skill. In fact, one day, you may even have to fire yourself.

There are as many situations as there are individuals, but there are five personas you should learn to recognize and manage: The Burnout; The Amazing Starter; The Toxic Throwback; The Unfortunate Layoff and The Talented Jerk Everyone Tells You to Fire.

The Burnout
Characteristics: One of the most committed members of your team. He comes up with outrageous, excellent ideas and has the commitment and energy to drive them through to completion. This intensity comes at a cost: an inevitable and massive blow out.
How to spot: Dark circles under the eyes. Wears the same clothes two days in a row. Redbull-and-pizza diet. Occasional emotional outburst, especially if his commitment is in questioned.
How to handle: Don’t let it get so bad that he quits. Force him to take some time off and find ways to mitigate his work and stress levels.

Burnouts are often your most productive employees. They are drawn to the excitement of launching new businesses and work is like a drug to them. You need to be careful they don’t OD.

After “Dave” burned out at the Ferry Building, I broke the news to the team and divided his responsibilities among a few of the most capable people. The group rallied and we made it through the next few months without Dave.

Meanwhile, I kept in touch with Dave. We treated his departure as a no-strings-attached, forced, paid sabbatical. Eventually we worked out a plan so that he could return to work. When Dave came back we analyzed what went wrong and noticed he had two key issues—he couldn’t say no to new projects and he always went deep in the weeds on every detail. We worked together to prevent another meltdown. Now Dave has a strict limit on how many things he can work on at once. Now he can obsess as much as necessary without pushing himself too far. There are ups and downs but Dave has been a star player ever since.

The Amazing Starter
Characteristics: Team player. Passionate. Gifted individual contributor but not yet ready to lead large teams.
How to spot: Projects she’s leading are falling behind schedule and her strategy is unclear. Her team complains of not having enough guidance and she always looks on edge.
How to handle: Consider pulling her from management and offer a senior-level individual contributor title.

The Amazing Starter built a business from zero to $10 million in revenue and (rightly) sees that as success. However you are aiming the business for 100X that size and you need to get there fast. Often The Starter knows there is a problem but she is a go-getter and doesn’t want to give up. Instead, she will ask for just a little more time. It is possible that in five-to-ten years she will be ready for the challenge but you don’t have that luxury. When you lead a startup you are building a rocket ship while it is in flight. You do not have time. You need to discard incrementalism in favor of big, bold leaps in scale. Bring in a more natural leader and find a new role for The Starter where her talents can shine and she can learn from a mentor. There is a risk The Starter will leave for another company but that is a risk you have to take.

At blinkx we had a superstar sales guy who closed deals others couldn’t even start. He eventually became our head of sales. After a year or so we noticed our numbers were growing, but not as quickly as we needed them to grow. We dug into the numbers and saw that our conversion rate was strong but we did not have enough proposals going out. We needed the sales team to take more meetings, make more calls and increase activity in every direction. We set team-wide goals and made it the sales manager’s responsibility to ensure the team hit them. After two quarters, it was clear he wasn’t going to succeed.

We told the Starter we valued him as a sales superstar and asked him to stay as a team-wide mentor who would help close big deals. He jumped at the opportunity. It allowed him to focus on what he knew best.

The Unfortunate Layoff
Characteristics: Great worker building a soon-to-die product.
How to spot: You keep forgetting he’s there.
How to handle: Let him down easy and offer a generous exit package.

When you are running a startup you need to look to the future and take Big Bets. Sometimes that means choosing to kill a product or service that is doing just fine in order to put your resources toward something that could accelerate the company’s growth. The longer you keep this redundant group in play, the longer it will take you to build the Big Bet and the greater the chances that your competition will get there first. The best thing you can do for those employees is to let them know it is not personal and has nothing to do with them, but that the reality of the market has changed. Offer them a generous exit package and assistance with finding a new job. Remember to treat these people with dignity and grace—they could’ve been future heroes of the company and the reason they are not is rarely their fault.

The Toxic Throwback
Characteristics: Steadfast believer in your business as it was three years or six months ago. Fears change.
How to spot: Talks about the past in romantic terms. Spends a lot of time gossiping. Can be overheard disparaging the new leadership and vision.
How to handle: Fire him. Fast.
Startups change at lightning speeds. In the beginning you hire people because they are gifted believers. They tie themselves to your corporate mission and they give it 100% of their energy, intellect and creativity. At that stage you hire people who are attracted to the risk and audacity of a startup. Those people are generally open to juggling ten different responsibilities and they create results out of thin air.

The Toxic Throwback is a tragic character. He is someone you brought on in the early days of the company and was once a star employee. However his skills are becoming less relevant and he can’t let go of the past. He believes so strongly in the mission he is pursuing that he cannot imagine or buy into a new vision.  A lot has been written in the last year or two about the value of the ‘pivot’, but little of it focuses on what I believe to be one of the toughest things about it: getting the team psychology around it to be positive.

The first thing you want to do is help him understand the reasons behind the new move. If he cannot come along quickly and with enthusiasm, you need to get rid of him before he has enough time to poison other members of your team.

People are often aware of the Toxic Throwback but his past brilliance and high standing may make you nervous about firing him. Do not fall into this trap. If you’ve noticed his toxicity, he is likely already poisoning others. Once you let him go, people will likely come up to you and thank you for doing it. I’ve had to fire a few Toxic Throwbacks and, as tough as it always was to take the decision, I have never, ever regretted doing it.

The Talented Jerk You Everyone Tells You to Fire
Characteristics: Makes magic on a regular basis. Entitled and demanding.
How to spot: Multiple employees have come to you in tears and/or shouting expletives because of something The Jerk said or did. Likewise, The Jerk spends a lot of time complaining about everyone else.
How to handle: Do not fire. Find a way to make it work.

Cliff Oxford, a contributor to The New York Times’ “You’re the Boss” column, recently wrote a post about “The Brilliant Jerk.” In it, he said “coddling the Brilliant Jerk…consoling him, giving him special assignments—does not work. It just kicks the can down the road.” I couldn’t disagree more.

Your instincts will shout at you to let go of The Jerk. So will most of your colleagues. Managers at large companies often suggest firing The Jerk but they have the luxury of slow and steady growth. In contrast, startups appear out of thin air and require massive speed. Steve Jobs said that software developers could have a dynamic range of 100:1, whereby an outstanding developer might be 100 times better than a poor one.  If you have one of those 100x performers and she happens to have a few personality issues, learn to live with them.

If you fire The Jerk you may spend years trying to find someone as talented or productive. Thanks to the mythical man-month, hiring a hundred others won’t work. By the time you find her replacement, your competition will have released three new products that are better than yours.

At blinkx we have had our share of Talented Jerks. Some of the most awkward conversations I have had involved counseling people who have been hurt by The Jerk. While the bad behavior can exhibit itself in a plethora of symptoms, the common thread I find with Talented Jerks is that there tends to be a self-esteem issue at the heart of things.

The key to managing the Jerk is identifying the demon. Whether it’s the hyper-successful sibling, the demanding parents who wanted them to follow a traditional career, or a history of being bullied as a geeky kid, it often translates into a desperate need to be respected. You’re never going to remove the core self-esteem problem but you can help by recognizing her hard work and good results. Hold a launch party so the Jerk can invite her family and show off what a strong performer she is; when a product is launched, get a quote from the Jerk into the press and give her a framed copy to send to her parents. Continually link good performance to external factors. Over time, as the Jerk becomes happier about progress, she can become an inspiring leader—fearless, leading from the front and ferociously protective of their team and products. I’d take genius with edge over pleasant mediocrity every time.