aamir virani

Why blow bubbles when you can grow a company?

I read Growing a Business last week, a book by Paul Hawken of Smith & Hawken. The book is pretty old, from 1988, so there is no mention of the Internet, little about software, and nothing at all about startups. In fact, I was struck when the author mentioned the computer for the company. Not a, but the.

Even so, the book is a must-read for anyone who actually wants to build a business that makes money, contributes to society, and does something useful. Hawken doesn’t go into a ton of specifics about finding an idea or market, but he says a few things I’ll keep in mind going forward:

Address problems that money alone cannot solve.

If you’re chasing after an idea that could be solved by an estabished company throwing some dollars and people at it, that’s likely a bad sign. (Whether they do it, can focus on it, etc., is a different consideration.) If you hear about people paying consultants or contractors to do something and it still sucks, there just may be an opportunity there.

Money goes where it causes the least embarrassment.

This one relates to the whole “no one ever got fired for picking IBM” thought process. It’s true, both when it comes to internal spending and when it involves VC funding. Why does it seem like funding cycles come in waves? Why did a bunch of social networks get funded all at the same time, but then it took a few years and a risk for the new wave (led by Facebook) to get additional funding)? Why do some entrepreneurs repeatedly get funding when they have no past success while new guys find it impossible to even get in the door?

Focus on a niche instead of developing a new market.

Hawken discusses how hard it is to create a whole new market, one that people don’t realize is needed or one where the benefits are not apparent until you try it. Instead, he suggests focusing on a niche. If it buys in, you can explore and grow from there.

Also discussed are building a good culture, focusing on customers, funding, and lots of other great insights. The lack of technology talk produces a list of business lessons and people skills necessary for those who want to create a business instead of just raising funding or boosting egos.

Memorex and Harry Potter

During my junior year at Clear Creek High School, I had an AP US History teacher named Ms. Cash. One of the vivid memories I have of that year is sitting in class one day while she lectured about some aspect of some event I no longer remember when she suddenly interjected with:

“I’m live not Memorex!” (or something like that)

I was the only one who snickered at the reference. Even Mrs. Cash seemed stunned, as she asked whether anyone knew what she was talking out. I was the only one who responded with a “yeah, it’s an old TV commercial“*.

At this point, she launched into a mini-rant about how you needed to understand pop culture to understand Americans and current events. That message, that pop culture both defines and explains history, has stuck with me ever since.

In the newest Esquire, Chuck Klosterman states that Harry Potter is likely the main shared experience for the majority of teens (and 20-somethings as well, right?), so he, a non-Harry Potter reader, will be clueless about culture in fifteen years as members of this age group becomes leaders in media.

Klosterman summarizes knowledge as belonging to one of three groups:

1. Information that you know you know.
2. Information that you know you don’t know.
3. Information that you don’t know you don’t know.

That third point is why Mrs. Cash’s rant sticks with me – I hate the feeling of having no idea what people are talking about or referencing. That likely explains my reading, TV, and browsing habits.

* That isn’t the commercial I remember; it’s just the first one I could find on YouTube.