Empty-handed graduates.

I have had some experiences with applicants in job interviews lately that I find deeply worrying. I believe these experience express an ongoing development caused by ill-fated education policy in the past decade.

In the past months I have seen a number of fresh university grads with pretty good grades. People that had sure gone through their higher education career ranking well within the top 20%.

One question that I like to ask applicants is which subject within their studies they enjoyed the most. Most of them can easily answer that part of the question. Then I digg in a bit deeper and ask very basic questions about that subject. Questions that without doubt will belong to the most basic canon. I will ask a business informatics grad enthusiastic about data base systems to build a very basic SQL select statement. Or I will ask someone who enjoyed corporate finance the most to calculate the value of x euros after t periods at an interest rate of r. Or I will ask someone who enjoyed accounting the most to tell me the difference between the P&L level and the cash flow level or the concept of an accrual. Questions that you may find insulting due to simplicity.

More often than not the answer is an emtpy facial expression and the excuse that it has been a couple of months already since the applicant heard that lecture or took that exam.

Wait a minute: I asked about the favourite subject within your studies and you remember nothing but the name and a three-sentence outline from the bird’s eye view?

If this went along with bad grades for that subject, I sure would blame the applicant. However, these people had really good grades in general and especially in what they called their favourite subjects. How does that fit?

To me the only possible answer is this one: The education system has a fundamental problem.

My feeling is that lectures are generally good and do provide the opportunity to learn the fundamentals and motivations of the subject in a deep enough way to be able to really internalize and to develop and apply own problem solving strategies in the domain. However, the exams seem to mainly reward those that develop the ability to recite shallow patterns learned by heart. It is natural that students optimize towards the best possible grade with the lowest possible time invest. But it seems to me that after the shift to the bachelor/master system as part of the bologna process students in many fields of study are forced to take such optimizations to another level. Thus you cannot blame them for cursory learning.

It is possible to deliver contents and design exams in a different manner as most natural sciences show. In mathematics, no matter how many proofs you learned by heart: if there is just the slightest variation in the proposition to prove you would be screwed without deep understanding. In an exam you will always apply existing knowledge to new problems. If you pass such an exam you will have another couple of  tools and techniques to add to your tool box. It is a lot harder and more expensive to design and rate such exams and prepare students for them. But I believe it is possible for any subject.

A university owes students and the society funding it to educate in a way that produces lasting knowledge or at least deeply internalized problem solving competencies. It should worry us that there is an increasing number of young people that graduate empty-handed.

Everybody should learn how to code.

Deep in my heart, I am a total nerd. I am proud of it.

My father taught me how to write the first little BASIC programs at age five or six on a Commodore VIC-20. I got really into coding at age 12 and taught myself to write software in Visual Basic. I developed the usual suspects: vocabulary trainer, floppy disk organiser, you name it.

At age 14 I developed my first 80C32 micro-controller board, designed, etched and soldered the circuit board and developed a 2-line dot-matrix display driver in assembler. A year later, in ´95, I discovered Linux and taught myself to write Unix software in C and got really deep into TCP/IP networking. At age 17 I was somewhat of an expert in developing networking software in *IX based environments and worked in IT projects for international corporations parallel to high-school.

To me learning how to code was a truly exciting journey. I got totally immersed in the problem I was trying to solve. I remember how complete afternoons, days and nights just flew by when I was trying to crack the next nut. Books about programming languages, network protocols and hardware components were with my virtually every minute of my day. I had the steepest learning curve I have ever had in my life thus far. And I learned just out of curiosity, not because I had to.

I believe that learning basic programming skills should be on every kid‘s educational agenda. It provides wonderful opportunities to develop valuable skills, even if you do not plan to pursue a career in IT.

Learn how to break large problems into smaller pieces: Every piece of software you write is a solution to a problem that you or someone else posed. Even if the problem is artificial and nobody really needs the software you develop (nobody used the software I developed in the first years). The programming language and operating system provide a fixed framework of tools that you may use to solve the problem at hand. This restriction helps you to structure the problem rigorously. You have to thoroughly understand the problem you are trying to solve. Code is always 100% explicit. If you understand only 95% of the problem you‘re trying to solve, you‘re likely to solve the wrong problem. Thus programming encourages you to think sharply.

Learn how to communicate complex thoughts: Programming languages are just… languages. And coding is communicating your thoughts in a programming language. As in natural languages there are many ways to say the same thing. But expressed in code a statement is always right or wrong, working or not working, and it is doing exactly one thing. There is no space for interpretation. Speaking „code“ teaches you to express your thoughts in an unambiguous way. And that is a great skill, especially when you are not talking to a computer.

Learn how to educate yourself: Every software developer in the world will tell you that it is part of their day to day job to teach themselves new skills. You constantly find yourself in situations where you have the feeling that there should be a best-practice way to solve the problem you‘re facing. That there should be a method suitable for a given task. That there might be an algorithm to perform a given calculation. You start searching, distill a lot of information, play with possible solutions and select a way to go. Whenever you go through this loop, and it may happen many times a day, you autonomously acquire new knowledge. And this ability is one you will develop even when you acquire just basic coding skills.

Practice endurance: When writing code you will soon encounter a situation where your program is not doing what you think it should be doing. And you can be quite sure that the reason for this is somewhere in your code. But you can‘t figure out what is going on. It can take days to figure out the solution. And you will typically feel very stupid after you found it, cause it now seems so obvious. These experiences develop your endurance like nothing else. You know there must be a solution. So you keep going.

Although these are very useful skills, the biggest advantage of learning how to code at a young age is that it is a great source of self-confidence. It gives you the trust that you can build something and that with diligent efforts you can solve big problems.

For me personally the coding skills I developed during my high-school years were the biggest asset I had when graduating. I went to a fairly bad school where the vast majority of teachers I had to learn from were not at all interested in the subjects they taught and thus were unable to spark any interest for their topics. Problem solving was not on the agenda. Teaching myself how to code is what allowed me to develop a feeling of empowerment and let me feel the joy of diving deep into subject-matter. And I believe that most people who take the effort to learn it will appreciate it the same way I do. No matter if they want to go into computer sciences or not.

On firing.

Having to fire an employee as a founder is one of the most dreadful experiences you can go through. I went through it a couple of times now and though it does get easier with time, it still is something that leaves me with a sense of guilt.

The first handful of employees you get on board of your company show a lot of trust in you and your startup. You feel thankful for that level of trust. You are highly appreciative for the fact that they decided to work with you. And you feel responsible for them.

Nevertheless it is sometimes necessary to part ways with an employee – no matter how well you may like him or her. If you stick with badly performing people for too long it will cost you money and you will risk a bad influence they may have on the rest of the team.

Here are a couple of thoughts on how to handle the situation.

 

  • When it is time to deliver the bad news to your employee be straight and to the point. There is no point in doing silly chit-chat leading up to the bad news. I start of these conversations by saying “I am afraid I will have unpleasant news for you today” or something like that. Then I say what needs to be said straight away.
  • Make clear that you do not make this decision light-hearted and purely based on questions of job performance. Argue with numbers or objective results and not with personal shortcomings that may have led to those numbers and results. This is not the time and place to criticize the person. Focusing on results will allow the employee to save face.
  • Keep the conversation short and crisp. Many people will start to argue and defend themselves, which is more than understandable. Too easily the conversation moves towards a situation where the employee feels that he can convince you. And this is where it may get messy. You must make it crystal clear that the decision is unchangeably made. You should only be having this conversation in first place, when you are sure to be doing the right thing.
  • End the conversation by summing up the following, clearly structured steps for off-boarding. This is something that you must have thoroughly prepared. If the employee is to leave right away, work through a step-by-step protocol with him (return keys, change passwords, return documents, etc.).
  • Right after you had the conversation with the employee, get the whole team together and inform them about what just happened. This way you keep the sovereignty of interpretation. Especially in a startup the departure of one team mate may cause some uproar and people will start questioning the overall stability of the company. Tell them why you made the decision and what it means for them.

After having had to let go an employee I always ask myself: “What could I have done as a founder to make the employee more successful?” I think it is fair to honestly answer that question. And more often than not you will find an answer.

Are we in the post-digital era? No way!

I look forward to being a speaker at this year’s NEXT conference in Berlin. I am invited to an on-stage debate with Patrick Meisberger, Managing Director of T-Venture (Deutsche Telekom’s VC segment), about the question “What does post-digital business really mean?”

To be honest: before thinking about post-digital business I had to come to grips with the term post-digital as such. What constitutes post-digitalism? And are we in a post-digital era then?

What defines post-digitalism?

Post-digitalism is supposed to mean that digital is so deeply woven into the fabrics of our everyday interactions that we are past the point of noticing the difference between digital and non-digital – and that we have fully included digital to our day-to-day life.

So what were the developments leading to this deep integration of digital into our realities? I argue we went through three major developments that partially took place in parallel: connecting, digitizing, paradigm-adaption.

Connecting everywhere and anytime.

In the late ’90s we have moved from an offline society to a society that went online from time to time. There was a clear state of mind associated to being online. You entered this other universe when going online. You had an online-self and an offline-self. Your online friends were not your offline friends. At any point in time you could easily answer the question, if you’re currently online or offline. In recent years we have transitioned to a society that no longer knows the difference between being online and being offline. Access to the web is so ubiquitous that the borders between the online and the offline universe have blurred. There are online features and offline features to your life. And both are so deeply intertwined that online-self and the offline-self converged.

What I just described is solely a result of easier access to the web, primarily driven by smart phones and tablets in connection with 3G. One may assume that it won’t get much easier to connect. It will get cheaper and faster. But essentially everyone is now connected all the time.

I’d be happy to proclaim the post-connect era. Everyone is connected all the time and everywhere.

Digitizing the real world.

The vast majority of enduring and successful mass-market concepts in the internet age thus far involved digitizing the real world. Email: write letters. Skype: Have phone conversations. Amazon: go shopping. iTunes: Buy music. NYT.com: read newspapers. Kindle: read books. eBay: post classifieds. Hulu: watch TV. These are all things that you did before the internet came along. They just got easier, cheaper, more convenient, more accessible and maybe more social. But in their essence they are just translations of old concepts to a new channel.

I believe that pretty much all of the interactions and products we knew in the pre-web world that are suitable for digitization have been digitized by now. And the digitized concepts often fully displaced the original concepts.

I’d be happy to proclaim the post-digitization era. Everything that can be digitized is digitized.

Shifting paradigms.

While I claim that most of the success-stories on the web so far are just old concepts on a new infrastructure and therefore mean no real cultural shift, we are now beginning to see that people develop fundamentally new values and behaviors in an online world. Let me give you an example of what I mean: access vs. ownership.

Think about it – people always wanted to own the music of their favorite bands. In the LP and CD ages people bought the physical objects and put them to their collections. In the napster era people often downloaded gazillions of songs just to own them, to have them on their hard drive. People downloaded songs from napster knowing that they would probably never listen to them and at the same time knowing that those same songs would still be available for download should they ever want to listen to them. Even iTunes is inherently based on owning. You buy the irrevocable right to listen to that song. Music consumption was all about owning – partially just for the sake of it.

Now comes spotify. They don’t sell music but access to music. You have access to basically all the music in the world. While you have a contract with them you may listen. When you cancel the contract all “your” music is gone.

Or consider DriveNow – short term on-demand cars available in bigger German cities. Wherever you are in Berlin, you just flip out your iPhone, search for a car near you, book it with a single click and you are ready to go. And when you don’t need that car anymore you just park it anywhere in the city and log-off. I have friends who sold the car they owned because they now have access to a car all the time.

You may argue that these are just old concepts on new channels as well. People listened to music and drove cars before. You are right. But the underlying economic mechanics have changed dramatically and express a complete shift in expressed utility. Cars are the classic example of irrational buying behavior: the utility you associate with a car is often more a function of your desire to express style and status than a function of its ability to get you from A to B. We have a long tradition in that. DriveNow is putting that long-learnt behavior on its head: The car is reduced to its core function and all non-core features that make ownership so desirable are obsolete.

The paradigm shift from ownership to access is enabled through digital technologies. But it is not only happening because it is technically possible but because people are incorporating the possibilities that come with the omnipresence of digital technologies to their reasoning and their values systems.

The notable thing about spotify is not the availability of music online but the willingness of people to give up ownership in something they are emotional involved with.

We are not in the post-digital era.

As I’ve stated we may be in the post-connect era. We may be in the post-digitization era. We created all the technical infrastructure and moved all suitable concepts to that infrastructure. But we are going to see more and more paradigm-shifts like the one described above. And each and every of these paradigm shifts will change the game big time. I am absolutely certain that we have no clue today, what tomorrw’s paradigm-shifts may look like. To me my preference for ownership in music in the past only became clear to me when I started to consider giving it up. And I am absolutely certain that I will go through that experience in many other aspects of my day-to-day life.

I refuse to call out the post digital-era. The truly exciting times are still ahead of us.

Entrepreneurial Read – Steve Jobs: A Biography by Walter Isaacson

I just finished reading a Walter Isaacson’s (authorized) biography of Steve Jobs. The book is definitely a page turner and I am somewhat sad to have reached the final page today.

The fact that there are 1266 reviews of this book on amazon.com at the time of this writing shows two things: 1) how much Steve Jobs’ legacy resonates with people 2) that there is no shortage in reviews. Given the latter, I’d like to limit myself to a very brief summary of the main points that the entrepreneur in me will take away from this read.

Focus, focus, focus. Apples product range is fairly narrow. Apples products are extremely minimalistic. I believe that this is one of the core success factors of the company. As a founder I know that it is often very tempting to jump at all the other ideas you might have and address all the requests for features expressed by single users. But to succeed you should do very few things but do them the best possible way.

Pay attention to detail. I like the part of the book where Steve Jobs’ obesession with good packaging is described. He says that the packaging should set the tone for how the user perceives the product. It got me thinking: I had about seven or eight cell phones in my life thus far. I do not remeber the packaging of any one of them. Except of one: I do remember like it was yesterday how valuable the surface of the iPhone box felt and how easy the lid slid open. What may seem as an irrelevant detail has the power to shape the user experience. And every product is just a collection of such litte details. Unfortunately in a start-up environment time-to-market considerations do not really allow you to work with such attention to detail in most cases.

Create an end-to-end experience. Apple created an end-to-end experience  by integrating hard- and software, by running their own shops, by selling you the music you want to put on your device – and by controling, wich apps will not be available on your device. That way they control all aspects of the user experience. While most entrepreneuers do not sell hard and software and won’t create their own shops, I believe there is one valuable insight in this: create continuity in your user interactions spanning all facettes of your product. For a web based product that may mean that you align the feel of all interactions the user has with your product: from the website to invoicing and customer support. That way you shape the user’s perception of entering your “product world”. And I believe that apple proved that to be successful.

Besides all the other exciting aspects, Isaacson’s book shows a master of user experience design at work. And that is truly inspiring.

We have pivoted already!

I had the opportunity to spend the last week in Silicon Valley. One evening, when I left the Plug and Play Tech Center in Sunnyvale, I met a woman in the staircase. She and her friends had come from M.I.T. to kick off their venture in the valley. I asked her the standard ‘what do you do’ question and she replied: “Our company builds a facebook based [put business secret here]. We have pivoted already!”

Let’s get this straight: “We have pivoted already!”  was part of her punch line for the venture. She said that with pride and with a smile.

Obviously she thought that at least one pivot lies on every start-up’s path to success and that already having come to that point was a big achievement. To her pivoting did not have the notion of something reality may force you to do. To her having completed a pivot was a badge of honor and a clear sign of doing things right.

Pivoting has become a popular buzz word in the past years. From my understanding its recent popularity comes largely from the Lean Startup movement. I like how Chris Dixon describes pivoting: “You aren’t throwing away what you’ve learned or the good things you’ve built. You are keeping your strong leg grounded and adjusting your weak leg to move in a new direction.

I think it makes great sense to view a pivot as something that you inevitably run into as a founder. It certainly is possible to start a successful business without a pivot on the way. But to me that sounds like the rare exception, not the rule. In a next blog post I will compile a collection of now famous companies that pivoted in an early stage.

If founders see a pivot as something positive that will have a very important consequence: They will be on the lookout for opportunities to pivot. It will keep them much more open to market feedback and constantly challenging their own plans.

Of course I am not saying that you should pivot just for the sake of it. But from my experience founders’ tendency to fall in love with their own ideas (that’s a great thing: it makes you start your business in first place) combined with a good bit of Confirmation Bias are such strong forces that I see a stronger risk to under-pivot than to over-pivot.

The episode described at the beginning, I believe, showed me a cultural difference between Silicon Valley and my German home country. While in the Valley “having pivoted” obviously makes a good ingredient for a pitch for early stage businesses, in Germany “having to pivot” will likely be seen as a consequence of not having done your market research right before you started. It’s time to get rid of that attitude. Market research never works for innovative products.

The obstacle-embracing personality.

Looking at the people that I enjoyed working with the most so far, I come to realize that they have a very diverse collection of backgrounds, skills and characters. However, there is one thing that they all have in common: I call it the obstacle-embracing personality.

Let me try to describe to you what this trait is. Consider you are sitting down with your tech lead to discuss the implementation of your next product or feature. Consider that this product/feature is already well specified from a functional point of view. I claim that in most cases 95% of the actual implementation is pretty straight-forward and you will develop a pretty good idea of what needs to be done right away. Those 95% of the job are a mere routine for a good tech-guy. I am not saying that everyone can do that part of the job. It requires strong skills and hard work as well. What I am saying though is: what sets good people apart is how they communicate about the remaining 5%, the tricky bits of the job, already in an early phase. And this holds true  not only for tech people but for practically anyone involved in your ventures advancement.

I find it extremely rewarding to work with people that embrace the obstacles that they see on the way. Great people try to get a feel for the tricky bits awaiting them right away. They put the concept upside down and turn the knife in the wound. They try to make worst case assumptions and try to find the points of the concept that begin to fall apart under pressure. They try to identify critical co-dependencies and point to likely sources of failure. They push others and themselves out out of their comfort zone when they feel that critical questions are left unanswered. Sometimes people mistake this for being pessimistic and overly critical. I argue: It is the only way that leads to building something sound that has an edge to it. I also believe that the best people always welcome the challenges that are imposed on them by this approach. And I am sure that in the end it creates a more honest and more satisfying team spirit for everyone involved.

Sometimes though you will find that in the concept phase individuals or whole teams will just communicate on the ‘easy’ 95%. They only know answers, no questions. They will feel confident and enjoy the soothing effects of not having to see the obstacles on the way. Everyone can remain in his or her comfort-zone. No one plays the devils advocate and asks uneasy questions.

This behavior may have different causes. Some people just don’t see the obstacles they are going to face. That is often caused by a lack of experience and not a problem as such. You can make up for that by offering a more experienced sparring partner who points to the obstacles that are likely to occur. What is more critical is the kind of person who does not want to see the obstacles. The kind of person who denies the obstacles. These people come with a solve-that-problem-when-I-run-into-it mentality that is both extremely frustrating and dangerous.

In the best case ignoring future obstacles in an early project phase will lead to false predictions about costs or required resources. In the worst case this denial will affect the assessment of the overall feasibility. Good people know that the tricky 5% are what makes or breaks a great product.

The willingness to identify all critical obstacles as early on as possible, to be brutally honest about them to yourself and to your team mates, and to have an intrinsic drive to find viable solutions to them is a must-have quality. It is a question of personality. Company culture and management can support or suppress it. But in the end it is a personal trait

I am not saying that plans must always be implemented according to all the obstacles anticipated. What I am saying though is that if someone deems an obstacle to be unimportant (for the time being) that should be a deliberate and informed decision and not one that is reached purely because of a lack of willingness to admit to the obstacles existence. To give you an example: if you are launching a product as a mere proto type for market testing it does not matter, if that prototype is scalable. But you have to have a sensibility for the obstacles that await you when having to scale it. If you do not have an honest answer on how to do that early on you either have the wrong team or an undoable product. Both is bad.

My point is: Try to surround yourself with people that embrace the tricky bits. People that ask and answer the questions that hurt. People that seek fulfilment in solving the hard bits. Beware of the people that see no bumps in the road coming and have a ready answer to everything.

In the end that is what entrepreneurship is all about: Solving the problems that others can’t.