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Why we should aim to build a forever company, not just a unicorn

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“Unicorn company.” It’s the latest bit of jargon that’s infected our conversations here in the Bay Area, to the point where both WSJ and Fortune have clever infographics and lists of the top companies. In pitches, entrepreneurs are asked to explain how their new company will become the next unicorn startup, and the tech press routinely debates if a hot new team will build the next unicorn. And yet, this term could not be a more meaningless goal for entrepreneurs.

After all, what’s the definition of a unicorn startup? Just one that reaches $1B in valuation? Who cares? I wish we’d just go back to saying “billion dollar startup” rather than unicorn, to reflect the real nature of the term, not one with a cutesy veneer.

It’s the ultimate vanity metric, because $1B of shareholder value is merely the lagging indicator that we’ve created something useful for the world. This should never, in itself, be the goal of starting up a company. So let’s all stop talking about unicorns. I’m calling peak unicorn. Let’s focus on the inputs for building impactful, lasting companies, where wealth creation is a side effect of doing a great job.

Instead, let’s talk about how to build our forever companies.

Low-attention spans in tech
When I first started out, as a young techie with a low attention-span living in Seattle, I had an irrational admiration for self-described “serial entrepreneurs,” the ones who build and sell a bunch of startups in their careers, even when they are quick flips. The variety of starting up multiple companies seems dreadfully exciting, especially when you are young and lack purpose. However, the more time I spend in the industry, the more my admiration shifts to those who start and run their companies for years, decades, and perhaps their whole lifetimes. Warren Buffett, Richard Branson, Jeff Bezos, Mark Zuckerberg, and others all fall into this camp.

These folks have started and built their forever companies. These companies also happen to be incredibly successful, but more importantly, as entrepreneurs they’ve found their life’s work.

After all, many of us in tech idolize Steve Jobs for his sense for design, and his vision. Some even emulate his fashion. But you know what’s hard to emulate? The fact that he started working on hardware/software products as a teenager, and built on those ideas for the next 40 years of his life, until he ran out of time. How many of us can profess a lifetime of dedication towards our work like that?

Counterbalance
The forever company is an entrepreneur-focused counterbalance to the financially-motivated goal of becoming a unicorn. Hopefully we can build both! Of course we all want our companies to be valuable, and make a big impact, but while a unicorn concerns itself with the output of entrepreneurship, the goal of a forever company starts with the inputs and the right intentions.

This is different than a lifestyle company. Bezos runs Amazon as his forever company, but it’s certainly not just to support his lifestyle, it’s to make a much bigger impact than that. And Amazon took millions in venture capital money on their way to becoming a public company, to fully capture the opportunity. There’s a different kind of problem when the desire for a lifestyle interferes with the “forever” part of the goal. Those who underinvest in their products create the danger for a smarter/bigger/funded competitor to put them out of business, which is a lifestyle company that doesn’t last forever! This distinction is subtle, but important.

I didn’t coin the term. It’s the kind of idea that could only come out of a deep, late-night conversation with my sister and bro-in-law Ada and Sachin, who also work in tech. They mentioned it in passing as a worth goal for themselves, one day, and the term really resonated with me. It’s stuck like few things have, and I hope it sticks with all my readers too.

When forever companies scale, and when they don’t
Sometimes forever companies scale and become a multi-billion dollar company. In many cases, a forever company and a unicorn are the same, when the market is big, the team is talented, and there’s some good luck. These are the companies we all want to start and want to fund in Silicon Valley. These companies are easy to embrace.

But sometimes, a forever company just implies a lifetime of dedication towards something that may never get big. There is great honor in that as well, and I can’t help but admire those who pursue this goal. By now, we’ve all seen Jiro Dreams of Sushi, and his passion and skill for sushi is incredible. Closer to tech might be someone like David Kelley of IDEO, who founded his firm decades ago, and while they’ll never be a unicorn, I imagine he must be very proud of the work they’ve done over the past 25+ years.

Finally, I want to leave you with a great interview with Jiro I saw recently. He talks about feeling like a master only after reaching 50 years. The discussion on handmade versus automation fascinating, as well as the work ethic of younger generations. Everyone who’s working in design or engineering in software will relate, I’m sure.

I’ve embedded it below but if it doesn’t show, here’s the link to Vimeo. Enjoy.

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Ten classic books that define tech

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Today, I was asked for the definitive list of books that I’d recommend as the classics for tech products and business. It’s hard to pare things down to such a short list, since there’s so much great stuff that’s been written.

In addition, a lot of new exciting books have been published in recent years, but they haven’t stood the test of time. My lists solely consists of books that skew oldish, but have aged well and continue to provide value today. This leaves out amazing contributions such as The Hard Thing About Hard Things, Zero to One, and The Lean Startup, which will undoubtedly make a list like this in future years.

With that in mind, here’s my list. I’m sure you’ve read many of them, but hopefully you find a gem or two that you haven’t already read. In no particular order:

There’s also a number of great books that just tell the narrative of one company, such as The New New ThingStartup, eBoys, Only the Paranoid SurviveBreaking Windows, but I’ve left those off the list even though they are very fun to read.

I’m sure I’ve missed some great ones! If you want suggest a replacement and/or share your own list, tweet me at @andrewchen.

 

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How I first met Eric Ries and also why I’ve ordered his new Kickstarter-exclusive book The Leader’s Guide

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Taken a few weeks ago at dinner, at Mission Rock in Dogpatch

tldr
It’s the last week to order Eric Ries’s new book, called The Leader’s Guide. In a very innovative experiment, it’s being published exclusively on Kickstarter. It’s the only way to buy a copy. I’ve already ordered a signed version and encourage you to support his work too. Here’s the link.

Making entrepreneurship mainstream
Like many of you, I’m a huge fan of Eric – he’s created a compelling, cohesive framework for thinking iteratively and entrepreneurially about products. The ideas are so powerful that the ideas in the book – such as “pivoting” and “MVP” – are now part of industry jargon and have even been featured on HBO’s Silicon Valley.  (Also, isn’t it inevitable that he makes a cameo at some point?) The ideas in Lean Startup are amazingly powerful, and I continue to reference them all the time.

How I first met Eric
Last month in March 2015, I hosted a dinner at Mission Rock in Dogpatch where he was a special guest, and we talked about how we first met back in 2008. Eric and I had our first coffee before The Lean Startup was a real thing, when he was between jobs and hanging out at Kleiner Perkins. (PS. if you’re interested in attending events like this in the future, subscribe to my newsletter and you’ll get email updates if I do this again sometime)

Anyway, here’s how I first got to know Eric- at that point, I was writing a niche, mostly unread blog about tech and products, at the end of my stint as an Entrepreneur-in-Residence at Mohr Davidow Ventures. I had maybe 100 readers total. It was thrilling to find another niche, mostly unread blog full of content I was interested in :) Looking at my referer traffic, I noticed I was getting a tiny bit of traffic from a blog called “Startup Lessons Learned.”

I clicked through, and my mind was blown…

First off, the blog was anonymously written. There were a ton of essays across a bunch of meaty topics – picking products, continuous deployment, landing pages, and metrics. It was obviously from someone who was on the front lines. I couldn’t tell who was writing it, but whoever it was, the content was amazing. I bookmarked it and added it to my Google Reader, and would diligently check for updates every week.

I just couldn’t believe that someone was writing this much great stuff without taking credit for it :) Eventually I found a cryptic email address from the blog, decided to write in to figure out who the hell was writing this amazing content. Soon after, I got a quick reply, and that’s how we first met.

A few months later, Eric told me a few months later he was going to leave Kleiner to work on a book. I was very confused :) Turns out that book he was working on was The Lean Startup, and it ended up doing pretty well!

Fast forward
The success of The Lean Startup has changed the culture of entrepreneurship across the world. And many new ideas, frameworks, and refinements have been built on top of the ideas presented in the original book. There’s a ton of lessons learned from trying to implement these ideas across a wide variety of industries – for example, at the aforementioned dinner event we heard from Eric on how people have tried to apply the ideas to non-tech industries like manufacturing, aerospace, as well as some of the nuances of applying MVPs in a design-centric world of consumer mobile apps.

Because of this, I was thrilled to hear that a lot of these case studies and ideas have been collected into a new book, The Leader’s Guide. I ordered my copy immediately upon hearing about it.

Here’s the link if you want to check it out too:
The Leader’s Guide, by Eric Ries.

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