Christian Renaud's Blog

Startups and Big Corporations- Pros and Cons

What I gave up, what I gained.

During this Global Entrepreneurship Week, I’ve spent a fair bit of time reflecting on the differences between my days in the big corporate world and my time in the startup realm.  Although I regularly shit on the corporate world, referring to corporate jobs as ‘veal pens’ and ‘cubicle farms’ and posting graphics like the one on the right, there are genuine benefits and drawbacks to both.  

Entrepreneurship and Startups are not for everyone, and as your life situations change, your risk profile and tolerance can change as well.  Big corporate jobs are the same, sometimes they are the solid foundation for a broader life, and an fulfilling and enriching career. 

I’d like to explain this fair and balanced, but my current bias is bound to show through.  Apologies in advance.

What I gained in the big corporate world:

I began my career at Baxter Healthcare in Cardiovascular Research and Development.  I made a predictable income that allowed me to get my first apartment, go to school at night, get engaged/married, and pay my bills (mostly) consistently.

I also had the opportunity in the intervening 20+ years to work with brilliant people in sales, marketing, engineering, manufacturing and more esoteric roles that only exist in companies greater than 10,000 people.  These individuals, and the access to outside organizations that was afforded to me by association with the large employers, provided me with a constant mental whetstone by which to learn and refine my beliefs.

What I lost:

In large companies, the meritocratic nature of seeing the tangible benefit of your direct labor is diluted by all of the other processes and groups that your work has to pass through.  You have fractional parentage, at best, of your efforts.  Your successes are muted as they have ‘a thousand fathers’.  Unless you are in sales, then your successes and failures are solely yours.

I also, and this is hard to explain, lost the intrinsic sense of ownership and connection that you get by running your own company (or being a partner).   I have a displaced paternal pride in the products I have built, but I’m sure there are a few hundred other people who claim paternity of those as well.

What I gained in the startup world:

Purity.  Hunting.  You eat what you kill.  You are in charge of what you build, how you sell it, and you live directly and soberly with the outcome of your decisions.  All the success is yours, all the failure is yours.  There is nothing to hide behind in the event of failure, and no one jumping in front of you to claim credit for your successes. The volume is permanently at '11'.

What I lost:

Predictability.  In the initial stages of making a company, a CEO friend of mine once quipped  ‘You’d wake up screaming if you could fall asleep at all.’   I have no income, no health insurance (unless I can afford to buy it privately), and no safety net.  It’s utter chaos, and if you are easily predisposed to despair, quite depressing.  Feast and famine.

In a large company, you are insulated from success and failure, both emotionally and financially, as you are diluted by all of the rest of the company employees and structure.  If you have family circumstances, such as a child with a pre-existing medical condition that requires no break in health coverage, or prefer the surety of knowing that your payroll check is going to clear, you are making a decision.  There is nothing whatsoever wrong with that decision, it is pragmatic and responsible.  You have chosen to limit risk, however that also comes with limiting your upside as well.

In contrast, the startup life has no mute button. In a startup, you know every single benefit and drawback viscerally.  If you can live with it, it’s a full-contact adrenaline-filled adventure.  And once you get a taste for it, you can never go back.

"What do you do again?"

This is an attempt at proactively answering a question I hear frequently from new business contacts, as well as friends, and even immediate family.  I may just permalink this on my business card and email signature to make things easier, given all the balls I have in the air at any point.

First and foremost, I've really been enjoying the slow(er)-time during development of my two startups to spend time with my beautiful wife, perfect daughters, furry felines, and our new dog Hank.  That has fed the soul in so many ways that were so overdue after working 100+ hour weeks for the last 20+ years.

Second, yes, I have two startups.  The first is one that I have disclosed previously, The Athena Project. The short version is that Athena is about applied knowledge in the form of an educational massively multiplayer online game (MMOG) for school children.  I've been working on this one off/on for over a decade and I believe that we've reached an inflection point between gaming technology and outright hostility towards conventional teaching modalities that it may at last have fertile ground to grow. 

The second startup I have to still be a little guarded about as it's awaiting some final legal approvals, but it's in my old arena of collaboration technology.  I think this one is going to be a game changer and it's consuming the lion's share of my time.  The 'teaser' webpage is here.

When I'm not working on those two offspring, one of my own offspring started her own company this summer named Stork.ly, which is a baby-supply delivery service for new parents.  It's all her, with our logistical (read: "Transportation and angel funding") support, and it's been a great applied educational experience for her.

In the 'old habits die hard' category, I am evidently also regressing to my Cisco days of Technology Center with the plans behind StartupCity Des Moines, a technology startup incubator.  Tej Dhawan and I have been working on this for nine months and we are getting close to launching it in a physical location downtown soon.  Tej and I probably spend a good 20-25 hours a week mentoring startups without the benefit of a fixed physical location, so we're looking forward to getting many of these startups together with one another for their natural synergies.

Finally, I am on the boards of directors of two non-profit organizations, the Technology Association of Iowa, as well as the Des Moines Social Club.  Recently I was able to step back from my old role on the board of Des Moines Metro Opera, as it was time to clear the path for fresh blood and ideas.

There are also a million other things that I am actively working on, as usual, but that's about as current a 'status update' as I can capture for the balls that I am juggling.

The Washington Game

As far as I can determine, the rules of the Washington game are as follows:

1) Find an industry or company currently thriving

2) Threaten said industry with special taxation, regulation or 'investigate them as a monopoly'

3) Sit back and receive millions and millions of 'campaign contributions' from said industry or company lobbyists to go away and not pursue special taxation, regulation or investigation.

4a) If the campaign contributions are insufficient to pay for your psychiatric drugs or racism-amplifying drinking spree, then follow through with the threatened taxation, regulation or monopoly-penalties.

4b) If contributions are sufficient, create a ruling that requires that said industry come back again in 3-4 years, wallets open (neatly coinciding with re-election campaign cash needs) to answer for these accusations.

5) When you've drained the industry/company of resources sufficiently, create a law that contradicts other laws already on the books, effectively making it a non-winnable game.  When the industry/company subsequently reaps profits or goes bankrupt due to the regulatory/legal change, then claim that the company acted unethically/inefficiently (and never admit that the regulatory contradiction had any bearing on the outcome), then hotly stampede for the government to 'correct this flaw in the free markets' and create a government-driven replacement.  Remember, government is never the 'disease'. Government is always the 'cure'.

6) Once taken under the 'governmental wing', then subsidize the shit out of said industry with taxpayer dollars to prop them up.  They receive tax incentives, stimulus packages, or other financial largess from the government, creating a supplicant relationship to their patron Congresscritters, which in turn they turn around a large percentage of in donations to their patron politicians.

7) Start searching for the next pot of money to go drain.

For example: Healthcare, Financial Services (specifically banking) Technology Companies, Hollywood (MPAA), Energy Companies.  Related lobby firms here. 

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."- Ronald Reagan

Go Create Your Job

Quick story:

Monday, 5:45pm, Emma (9, pictured) is getting ready to head out to piano lessons.  She turns and looks at me thoughtfully and says "Dad, who helps new parents with their babies?  Who gets them formula and diapers?".  I answered that usually one of the parents crawls into the daylight and forages for supplies, or family members may assist.  She followed up with "Why don't we create a delivery service to bring them the things they need?"

It took me all of a few seconds to realize that she was right.  Anyone reading this who has children remembers the shock of being a new parent, the sleep deprivation, the accelerated learning of what supplies you needed and how frequently.  Having a safety net that you could reach out to that would drop off those diapers at 10pm when the stores were closed would have been very handy.

So, Emma, Janene and I created Storkly.  Emma saw a need, and came up with an idea to fulfill it.  We're finishing up the legal paperwork now, and then we'll contract drivers and get inventory before we open the website to business.  The domain name, site, and everything else was done before she got home from piano lessons.  Her email signature now reads "Emma Renaud, CEO, Stork.ly".  Did I mention she's nine years old?

I was standing in the Ferry Market in San Francisco yesterday waiting to buy coffee, and the two people behind me were discussing how long they had been looking for work.  I furiously typed a 400 word tweet and eventually was able to cough out something along the lines of 'dont look for work, create it'.  You don't have to go find a job, instead find a need, and fill it.  Next thing you know, it will be your job.  Even if you're nine years old.

(the reason she's holding up one finger in the picture is that this is her first startup)

"You crazy kids and your (fill in blank)!"

"Oh this age! How tasteless and ill-bred it is."

I have been thinking about this quote quite a bit recently after receiving two emails from local colleagues asking me for my opinion of Scott Kubie's recent blogpost for BitMethod, How to Write a Fucking Blogpost.  The two colleagues were offended by the blue nature of the language used in his post, and they commented that they thought it was unprofessional and immature.  I personally found the post amusing and the points well made (Disclaimer- I am profane in extremis), but can understand where others will let his style and language distract from the substance of his post.

I regularly read BitMethod's blog, and they don't shy away from controversy.  This will be an interesting case for their team, who regularly interact across the broad spectrum of Des Moines' business ecosystem. They will receive support from some of their colleagues, and controversy and criticism from others depending on the individuals and their own personal values.

During my TEDxDesMoines talk about the Workplace in 2020, I spoke about potential generational and value conflicts like this as the composition of the workforce frequently spans forty years or more.  We touched on this again at the recent Ignite Des Moines Power Breakfast when I spoke about the culture clashes that will occur as a result of the activities of risk-taking entrepreneurial mavericks and those who represent the entrenched business community they will disrupt.  As I spoke briefly at the breakfast about the need to develop Des Moines' entrepreneurial ecosystem and encourage more risk taking, there were a few people nodding and leaning forward in agreement, however there were many more leaning back with arms-crossed for whom the topic of my presentation was anathema.

I want to be clear in stating that this is about individuals, and not generations.  This is not as simple as age or gender, but based on the individual's values and culture. And I am not saying profanity-tolerance and risk-taking and entrepreneurial zest are all facets of the same personality or value system.  They are individual and nuanced like all human emotions and values.

For example, I myself recently received an note from a local colleague who thought I posted the wrong graphic on my Tumblr, as he considered it pornographic.  If you guessed that this was from someone my father's age, you would have guessed wrong......it was a gentleman nearly twenty years my junior.  He and I, like BitMethod and those that will disagree with Scott's post, will need to work through these cultural and values differences and not let them get in the way of getting work done.

As for the quote at the top of this blogpost, it's a clear indicator that this bemoaning of current conditions and values is not remotely new.  The source of the quote was Gaius Valerius Catullus, somewhere between 84BC and 54BC.

Clap that Circadian Rhythm

Since it's been a little while since I wrote something I pulled completely out of a dark orifice:

Circadian Rhythms, as many of you know, are cycles of biochemical and physiological processes in biological organisms.  In humans, these are a key influencer in how we sleep and how and when our organs function.  There are endogenous and exogenous factors that effect these rhythms, as anyone who recently returned from China can attest at 3am.

It turns out that your body is not all on the same timezone.  There are organs that do what they want, when they want, regardless of stimuli ('peripheral oscillators').  There are factors (called 'zeitgeibers') that influence other parts of your anatomy, like how sunlight on your skin alters melatonin production. Your body is not, as we say in my business, time-sync'd.

There is a fair bit of fascinating chronobiological research about this topic, which I am adding to my ever-infinite reading list.

But what if these endogenous factors are as susceptible to human evolution as other aspects of our growth?  Just as hair/eye color are immediately identifiable factors that you can genetically track, what if there are natural, innate, circadian rhythms and peripheral oscillators that you inherit through your genes as well?  What if your natural predisposition is being able to digest the foods indigenous to where certain of your ancestors were from?  What if your peak-learning-times were those shared by your European or Asian ancestors (and time sync'd to Europe or Asia instead of the Americas)?

For example, what if you are living in the United States, eating the high-fructose-corn-syrup-saturated diet so common here, while your body is genetically predisposed to eat a rustic, French country meal during Central European dining times?  What if you are perpetually walking around the states in non-peak mental-acuity, unless you venture to Europe on holiday, and suddenly find yourself on mental-overdrive?

I'm going to read all the chronobiological primers I can find and see if there is any research to affirm/disprove my premise above.  I ALWAYS feel like I am on some cognitive-hyperdrive while on Euro-travel, and definitely function better anywhere when I eat the cuisine of my Continental forebears.  I hope there's a reason other than that the United States just makes me slower.

Reisen Bildet

I don't exactly recall when I first heard the the German aphorism 'Reisen Bildet', which is generally translated as 'Travel educates the mind'.  I know that it was sometime in my teens, when I had not yet sated my wanderlust. 

The saying came up again during breakfast in Barcelona early last month while sitting next to a lovely German couple. They struck up a conversation with our daughters, and asked them why they were not in school as they should be this time of year. My eldest daughter responded that travel was it's own sort of education.

And it really is.  Think about the major events of your life, and how many of those were experiential versus 'I acquired new stuff''?  I think about the 30+ years I planned to purchase my first Porsche, and pick it up from the factory.  I yearned for that day.  When it finally came, timed to coincide with our honeymoon in Europe, it was the experience of picking up the car and the unbelievable trip around Europe that followed that are permanent imprints on my memory and life, long after the car has made it's exit.

In the last month or so, our daughters have watched the sunset and sunrise over the Atlantic, experienced cultures and history on a level that were new even to a veteran traveler like myself, and have noticeably changed as a result.  They view the world through a different lens than they had at the end of October.  Their worldview (and culinary tastes) have expanded far beyond anything I could have imagined at 30, much less 20 or 10 years old.  While her classmates were in a classroom learning about Christopher Columbus in preparation for American Thanksgiving, Emma was standing in the very room in the Alhambra where Isabella gave Columbus his final permission (and monies) to launch the journey.

I received a letter from Emma's school this weekend with a note saying that she had been absent for over 14 days this school year.  She is ahead on her homework (she does homework diligently whilst traveling), and is in the top of her class, however they are legally obligated to track her attendance and report us to the proper authorities should it exceed a certain number.

What do you think the odds are that these 'proper authorities' know any German aphorisms?

Why Video Games make me a better CEO

You may ask yourself, what does a CEO do after a hard day's work?

I wash the dinner dishes.

Luckily, I bought my wife a Chumby a few years ago as a present, which she then thankfully put it in front of the kitchen sink, so I have food for thought while I wash the food off of the dinner plates.

Much to my surprise, this CNET news article from Iowa State pops up, on the aforementioned Chumby, that claims a positive correlation between video game addiction and attention deficit disorder.  I nearly dropped the dinner plate.

OK, enough.  There are gamers and non-gamers.  There are people who were built for speed of thought and reflex, and those that were not.  It's not an affliction, it's the next level of evolution.  It's the higher clock-rate on your CPU.

I am the CEO of a successful security software company.  An average day to me looks like a nightmare to anyone else.  Yesterday for lunch I picked out office furniture for our new headquarters while eating sushi with my CFO and VC, while on the phone with a Norwegian friend who I was advising about Chinese negotiating tactics. I THRIVE on this level of parallel processing.

What some people call ADD I call deliberate training.  Every video game I have played since my parents bought Pong for our television, to Atari, to Wizardry and Ultima on my Apple IIe, to my Macintoshes and Windows PCs, to my countless consoles........they all taught me valuable skills that I apply every day to create shareholder value for my investors and sustain my employees.

ADD?  Yes, Little Big Planet (puzzle & reflex game) moves very quickly on my PS3, as does Rainbow Six Vegas 2 (collaborative team-driven first person shooter).  Guess what.... as a CEO you are constantly, continually, and by design, context switching.  I do this all day long.  You have to be able to move from option valuation equations to VLAN design to hiring decisions to fundraising strategies within a five minute period or else the business stops. Video games have taught me all of these skills and more, and I apply those lessons every day, and much more often that the quadratic equations I learned as an undergraduate.

Pong.  Console. Gradeschool years. Taught me excellence and speed through repetition.  If you don't think that these mind numbing games like Pong and Tetris are useful, try constructing waterfall charts for shareholders or doing pivoted capitalization tables.  Excel is much more mind-numbing than Pac Man or Pong could ever aspire to be.

Lemonade Stand or Taipan.  Apple II.  8th Grade.  Taught me supply and demand, and that demand is variable based on price of sale and episodic fluctuations in consumer spending.  HEY SONY, GUESS WHAT? THAT $299 PS3 PRICE CUT PUT YOU AT THE TOP OF THE CHARTS FOR CONSOLE SALES IN SEPTEMBER, GO FIGURE!

Wizardry and Ultima, Apple II. You will try and fail a million times before you succeed.  It's like picking a lock. And you will start with nothing and build up based on merit alone.  Steven Johnson predicted in his book Everything Bad is Good For You that games were increasing in complexity and that this complexity would make us smarter, and Edward Castronova laid out a very rational thesis in his book Exodus to the Virtual World how a generation (like mine) that was raised on video games that started you with $0 would result in a meritocratic value system (and polis, which we are beginning to see the signs of in voting preferences).

Civilization, SimCity, etc.  Macintosh.  Strategy.  Tactics.  That Sun Tzu was completely on the money when he said "Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat". You need a balance of both to win the race.

Grand Theft Auto 3 and it's sequels.  PS2 and PS3. That life goes fast then slow then fast then faster then slow then slow.  Patience.  Persistence.  And life isn't even remotely fair. Sometimes you are the car, and sometimes you are the flattened pedestrian.

I play games.  I love to play strategy games, shooter games, puzzle games on consoles, casual games in browsers.  The fact that the marketeers in the gaming industry are constantly trying to micro-segment the gaming market and, to paraphrase Al Ries and Jack Trout "Create a market to be first in" is worth diddly to me. I thrive on games that challenge my mental capacity, like I thrive on doing battle in business for the same reason.

So video game addiction has a positive correlation with ADD?  Sounds like a new educational curriculum to me!  You want people who can adapt, evolve, solve puzzles, move and think faster than other people, synthesize strategy and tactics, be persistent and not whine about an unfair advantage a competitor has but instead be actualized that they are out-executing you in the meritocratic business battlefield. You get up, learn where you just failed, dust yourself off, and get back in the game that much smarter.

Video Games have made me to be what I am today, and I thank them wholeheartedly for making me into a fast-moving, context-switching, shareholder-value-creating machine.

Dear AT&T

Honey, we've got to talk. 

I've been patiently using your service on my iPhones for just over two years, originally on my iPhone 1st Generation, and my wife's, then on both of our iPhone 3Gs.  I would have also used you for an upgrade to the 3GS, had you not decided to punish your installed base with punitive upgrade pricing.

I've also watched with great interest your ongoing announcements about a micro-cell to provide me with 3G coverage at my home, as I receive just enough signal at my home to ring my iPhone, however not enough to answer the call.  Despite your assurances that I am in the middle of a strong 3G coverage area, I do not even receive EDGE service here, so was looking forward to the ever-slipping release date on your home cell tower. Even the outlandish idea of me personally paying for hardware to address your shitty cellular coverage so I could continue to pay you your monthly fee didn't strike me as asinine.

All of this would have been somehow acceptable, as it appears that the situation had been growing worse by degrees and I had been beaten-down to the point that the complete lack of cellular signal in my home, my office, and on my daily commute was my cross to bear for having the excellent Apple smartphone.  It must be what they say when they use the term 'boiling the frog', in that I hadn't realized how bad the situation had become, and had just decided to accept my fate.

When I was downtown in our capital city last Friday all day waiting for a phone call from my law firm and VCs so I could complete my venture funding, a call which was repeatedly placed but I didn't receive notification of until Saturday at noon on the small, rural Iowa golfcourse, I began to question our relationship.  When voicemails started arriving two days late that were critical to my company's viability, my loyalty began to waver.

This all came to a head yesterday when I tried in vain to keep a call up with an important investor, while downtown in a 5-bar 3G area.  I was disconnected from him three times before I finally had to resort to borrowing a land-line phone from my lawyer.  This, compared with your totally ironic timing of sending me my absurdly large iPhone-service bill at the exact moment of my peak frustration, drove me into the arms of another carrier.

I've found another provider, AT&T, and her name is Verizon.  Her BlackBerry's may be a joke to the Apple-rati, however I'll be damned if the thing didn't work out of the box, and I was actually able to maintain telephone conversations, without disconnect, all afternoon yesterday and at my home.

There's always a price to be on the leading edge of technology with excellent devices like the iPhone, however one of those prices shouldn't be that the damn thing never actually works as advertised because the carrier has a fatal combination of (a) lack of infrastructure and (b) complete delusion when it comes to addressing (a).  I've used new gadgets for years, but none of them asked me to sacrifice critical communication with my family and business associates for only $250/month.

I'm breaking up with you AT&T.  And it's not me, it's you.

Christian

Good Karma or Bad Karma?

My current 'object of desire' is the absolutely gorgeous Fisker Karma.  Built by Fisker Coachbuild, and powered by a powerplant from Quantum Technologies, the Karma is an eco-geek's dream machine.  It is a plug-in-hybrid, which operates exclusively off of it's batteries, with a gasoline engine to power the electric plant in the event that the driven range exceeds 50 miles between charges.  If your commute is less than 25 miles in each direction, the gasoline engine never kicks on, and you end up with an effective 100MPG.  When you have returned home (or if you have an AC outlet at work), you plug it in and charge the batteries and you are ready to roll after work or the next morning.

The clever folks at Fisker Auto also have the option of a solar array on the roof of the car to keep the cabin (and batteries) cool during idle periods, thereby boosting the batteries' efficiency.  Rumor has it that there is also a garage-roof-solar-panel option with the car as well, to allow it to charge using solar while parked.  Of course, if you drive home from work in the evening, that doesnt give you much time to harness the sun to charge the battery unless you have some sort of fuel-cell that stored it up all day.

In my case, with two young children, it is the perfect pairing of exotic sportscar (it goes 0-60MPH in 5.8 seconds) and family sedan.  Granted, the estimated retail price is somewhere north of $80,000, so it is unlikely that my smarter-and-better-half will green-light the pre-order in these harsh macro-economic times.

Never one to be deterred, I set about trying to justify the value to myself (in preparation for the harder sell to my wife), and was surprised to discover some nasty facts about electric power in the United States that caused me to think twice about a plug-in hybrid. 

I'm going to lay out some data that I uncovered, and hope that some astute readers can point out the holes in my concerns, or new data, so I can justify this after-all: