October 15, 2013

You Don't Get Any Participation Medals for Just Showing Up

"I need some record of you being in this class," hissed my 8th grade math teacher, looking at me and pointing to my lowly 5% grade to date in his course after ten assignments, by far the lowest mark in the class. My not so glowing 50 points out of a possible 1,000 was the product of many days' not turning in homework, as my continued refrain of "I'll get to it tomorrow" started to become an impossibility to tackle.

Each day I told myself I'd eventually get to the previous day's assignments, taking a penalty for my lateness, but part of me knew I'd just float through the day to day and try to make it up on the tests. For me, it was proving I knew the answers - conveying mastery of the subject. Yet for my grade, it was proving that not only did I know the answers, but I was willing to do the work. Just showing up wasn't enough.

For the past 15 years, I've been working in Silicon Valley, and I've encountered an incredible mix of people who perform as if they are on different gears. Some work incredibly hard, and are driven to succeed at practically any cost, refusing to let traditional limits get in their way. Others seem almost crestfallen if they can't keep up with those gracing magazine covers simply by being in the right place at the right time. And the truth is that life's not perfect. There is an intersection of skill and luck that very often sees great employees at bad businesses punished for their career choices, while less impactful employees at incredible companies gain the benefit of their colleagues' work.

From the outside looking in, Silicon Valley might look like a technology-centric Disneyland, where the future can be experienced today, where dreams can get funded, and you can't walk down the sidewalk without knocking shoulders with millionaires. But every success story you read, and those people who become household names, be they Steve Jobs, Meg Whitman, Larry Ellison or Marissa Mayer, came not as a product of pure luck, but the application of effort against risk.

Risk Is Often Required If Something Is Worth Doing

I remember sitting around our corporate boardroom one afternoon ten or so years ago, as an account manager on our team explained why we had been unable to close a once-promising deal. He said, paraphrasing with some angst, "In his business, the IT manager's job is to reduce risk. At our stage, we're all about risk." And it was true. While our more established competitors didn't have all the whiz-bang capabilities our devices did, what they did offer was a track record of success, integration with top partners, security, and all those things that moved risk out of the data center. We had to look elsewhere to find customers more willing to take a bit and absorb some risk, in exchange for our differentiation.

Which brings us back to "just showing up".

I spent my first three years in the Valley working at two very small startups. The first didn't have any revenue, and some odd ideas. When the founder was let go, the sister company asked me to stay on, and we worked hard at bringing traditional office tasks to the Web. The work was good, and our customers liked our products, but we weren't growing fast enough. When we went out to raise a $10 million B round, we came up light, and that was the end of my tenure. But as we were plodding along with our incremental growth, it seemed like everyone around us was going public, making money and buying homes - which to us was pure fantasy. Some of our best engineers took other jobs, and spoke openly about the frustrations they felt when all their friends were getting rich, while we were still bringing our food in a bag lunch and eating at our desks.

Even in a bubble, showing up wasn't enough. At my next company, where I spent 8+ years, we had enough spikes and troughs to fill a novel. Maybe some day I'll write it. We scored several rounds of venture funding, several rounds of layoffs, and filed to go public, not once, but twice. The company eventually sold for a good amount after I had left, but not before a number of upstarts had soared past us, having much more profitable exits, at valuations anywhere from 4 to 5 what our exit had been. And while we could feel bad about not having hit a home run, I was all too aware of the many other players in our industry who had already gone bankrupt, or returned money to the original VCs, lacking a business model, and other former colleagues who had bounced from company to company in search of something that stuck.

I've always been raised with the mantra that nine out of ten startups fail. I've seen other ratios with different numbers, but the truth is that the overwhelming majority of small business concepts, even those with venture funding, don't have a positive exit, and it's a much rarer one that sees the founders and employees strike it big. For every market sensation like Facebook, Twitter, Instagram, Tesla or Spotify, you have scads of others with software products few wanted, or website plays that have seen their URLs turn into dead links.

In the big race of keeping up with the Joneses, especially in an area ripe with exceptional people who have impacted history, seeing others' success can make it seem easy. Easy to start a company. Easy to start a venture fund. Easy to find customers. Easy to do practically anything. But it's not. I remember the wave of aspiring dotcom millionaires who came from around the country sporting MBAs, only to return when things got tough. And I remember the stories of former Business Development managers loading luggage at the airport when jobs were scarce. Success is not doled out equally and fairly, and the best products and best people don't always get rewarded. But the equation improves with incredible market study, exceptional effort, and the self-awareness to make change where it's required at the right time.

Do read up on the world's successful people, as I remember doing in college, checking out "The Difference Between God and Larry Ellison" from the Berkeley city library. Do make yourself aware of their smart strategies and innovative products. But don't forget the hard work and effort required that set them up with a greater likelihood to succeed. Or you'll be like I was in 8th grade -- getting dressed down publicly by my teacher who questioned why I was even there at all if I wasn't going to do the bare minimum.

Disclosures for fun: I worked at BlueArc from 2001-09 and owned options, as well as stock acquired in the company's 2005 AA round. These converted to shares when HDS purchased the company in 2011. I currently work at Google, and any references to their competitors or partners are just part of the story and presented without intended bias.

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