Industry Analysis: The Bigger Picture

by David Mayes on Jul 19, 2013

Industry analysis is not a well-understood discipline. It sits between macroeconomic analysis and market analysis and uses tools from both. It is most commonly associated with the financial services industry which produces guides for their investors. But there are also large global consultancy firms that specialize in industry analysis.   It is an important tool for governments, regional development agencies. Companies use industry analysts to assist in their strategic planning. Those who can anticipate the changes in an industry are more likely to be successful.  This brief presentation provides an overview of what industry analysis is, examples of industry analysis in action, and why it is so important.

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Industry Analysis: the bigger picture.  Presentation Transcript

• 1. Industry Analysis: The Bigger Picture July 2013 ©David Mayes 1
• 2. Industry Analysis: The Bigger Picture David Mayes, Lecturer ©David Mayes 2
• 3. Introduction 1. Lecturer Introduction 2. What is Industry Analysis? 3. Why Industry Analysis? 4. Suggested Reading Industry Analysis: The Bigger Picture ©David Mayes 3
• 4. Lecturer Introduction ©David Mayes 4 Industry Analysis: The Bigger Picture
• 5. Industry Analysis Lecturer Introduction David Mayes: LinkedIn Profile: http://www.linkedin.com/in/mayo615 Google+ Profile: https://plus.google.com/u/0/118299264663896711410/about Email: david.mayes@ubc.ca mayo0615@gmail.com UBC Office: EME 4157 (250) 807-9331 Hours: Thurs. 12PM – 2PM or by appt. Cellular: (250) 864-9552 Twitter: @mayo615 Experience: Executive management, access to venture capital, international business development, sales & marketing, entrepreneurial mentorship, technology assessment, strategic planning, renewable energytechnology. Intel Corporation, 01 Computers Group (UK) Ltd., Mobile Data International, Silicon Graphics, Sun Microsystems, Ascend Communications, P-Cube, Global Internet Group LLP, New Zealand Trade & Enterprise. ©David Mayes 5
• 6. Introduction 1. Instructor Introduction 2. What is Industry Analysis? 3. Why Industry Analysis? 4. Suggested Reading ©David Mayes 6 Industry Analysis: The Bigger Picture
• 7. What is Industry Analysis? ©David Mayes 7 Industry Analysis: The Bigger Picture
• 8. Industry Analysis What is Industry Analysis? A Proposed Definition of Industry Analysis: Industry analysis looks at long-term trends and forces that affect an overall industry. It is a strategic analysis tool used by governments, economic development agencies, financial services & investment firms, management consultancy firms, and businesses. Current estimates and future industry projections may include consideration of a broad range of global and local factors: economic, supply and demand, individual competitors, other external future forecasts, and government policy affecting the industry. Industry analysis is commonly performed within the framework of macro- economic analysis as well as market analysis theories and tools. ©David Mayes 8
• 9. Industry Analysis What is Industry Analysis? Industry Analysis As A Discipline: • Best known in the financial services industry • Industry performance & forecast guides for investors • High profile industry analysis consultancy firms • IDC, Gartner, Forrester, dozens of others in vertical markets • Used as a strategic planning tool by companies • “How to” guides/textbooks very limited, but masses of primary statistics and reports • Seen as between macro-economics and market research ©David Mayes 9
• 10. Macro Economy: Global, Regional, National An Industry: Global, Regional, National A Market: Can Be Industry Sub- segment(s) Competitor(s) Us Industry Analysis What is Industry Analysis? Hierarchy of Economic Analysis OUR FOCUS ©David Mayes 10
• 11. Industry Analysis What is Industry Analysis? IDC Forecasts Worldwide Semiconductor Revenues Will Reach $305 Billion in 2012 IDC Forecasts Worldwide Semiconductor Revenues Will Reach $305 Billion in 2012 Business Wire FRAMINGHAM, Mass. — December 15, 2011 “Despite the continuing global macroeconomic problems, semiconductor inventory overbuild early this year, and current DRAM oversupply, semiconductor revenues will register positive year-over-year (YoY) growth of 3.4% and 3.1% with $296billion and $305 billion for 2011 and 2012, respectively, according to the year-end 2011 update of IDC’s Semiconductor Application Forecaster (SAF).”The 2011 year-end update reaffirms the views IDC expressed in its qualitative SAF update published in November 2011….” Yada yada yada… Full Report Price: $1,000, other reports up to $10,000 Industry Analysis Example ©David Mayes 11
• 12. Industry Analysis What is Industry Analysis? http://www.youtube.com/watch?v=31SpS3 6ynDs&hd=1 Semiconductor Industry Analysis: Intel Cuts 2012 Outlook on Hard Drive Shortage (Flood in Thailand) ©David Mayes 12
• 13. Industry Analysis What is Industry Analysis? http://www.youtube.com/watch?v=- I50V4PO1y4&feature=g- wl&context=G25b6f51AWAAAAAAAAAA Information Technology Industry Analysis: Samsung Economic Research Institute ©David Mayes 13
• 14. Industry Analysis What is Industry Analysis? http://www.economist.com/node/21541746 The Economist on Video Gaming: World of Warcraft vs. New Market Entrants ©David Mayes 14
• 15. Industry Analysis What is Industry Analysis? http://www.dailymotion.com/video/xblts0_in dustry-analyst-jesse-divnich-on- v_videogames Video Gaming Analyst Jesse Divnich on the Video Games Industry ©David Mayes 15
• 16. Industry Analysis What is Industry Analysis? Answer: Huge consumption of microprocessors for game consoles “Over the past two decades the video-games business has gone from a cottage industry selling to a few niche customers to a fully grown branch of the entertainment industry. According to PricewaterhouseCoopers (PwC): • Global video-game market worth around $56 billion last year. • More than twice the size of the recorded-music industry • Three-fifths the size of the film industry, Including DVD sales Video games will be the fastest-growing form of media over the next few years, with sales rising to $82 billion by 2015.” — The Economist. December 10th, 2011 How Does The Video Games Market Relate to the Semiconductor Industry? ©David Mayes 16
• 17. Industry Analysis What is Industry Analysis? Leading Industries in Canada (GDP): • Aerospace (5th largest in the World) • Agri-food (4th largest exporter) • Automotive (3rd largest exporter in World) Leading Industries in British Columbia (GDP): • Construction • Manufacturing (?) • Mining & Gas Extraction Leading Industries in the Thompson Okanagan (GDP): • Construction • Manufacturing • Services (retail, tourism, etc.) Key Industries in Canada ©David Mayes 17
• 18. Questions? What is Industry Analysis? ©David Mayes 18
• 19. Industry Analysis 1. Instructor Introduction 2. What is Industry Analysis? 3. Why Industry Analysis? 4. Suggested Reading ©David Mayes 19 Industry Analysis: The Bigger Picture
• 20. Industry Analysis Why Industry Analysis? ANSWER: Large scale economic shifts caused by demographic, geographic, political, technological and social changes can create new opportunities or can lead to the demise of a company. Competitors that can anticipate these large-scale economic shifts are more likely to survive. Why Industry Analysis? ©David Mayes 20
• 21. Industry Analysis Why Industry Analysis? • Government Policy • Taxation, incentives, international export market development • Focused Economic Development Programs • Which industries should be promoted? • Example: New Zealand Trade & Enterprise* • Institutional/Individual Investment Management • Tracking Industry Trends and Growth • Management Consultancy Firms • Strategic Business Decisions on Markets • Individual businesses Why Industry Analysis? ©David Mayes 21
• 22. Industry Analysis Why Industry Analysis? • Federal, Provincial Ministries & Economic Development Agencies • Canadian Ministries of Industry and International Trade • BC Ministry of Energy, Mines and Petroleum • Central Okanagan Regional Development • Financial Services and Investment Firms • BMO, CIBC, RBC, TD Canada Trust, credit unions • Stock brokerages • Financial news networks • Management Consultancy Firms • Accenture, BCG, HP, IBM, PWC, Forrester, Gartner, IDC • Businesses • Executive management, strategic planning units • Corporate positioning, SWOT, long range planning Who Conducts and Uses Industry Analysis? ©David Mayes 22
• 23. Industry Analysis Why Industry Analysis? Example: New Zealand Trade & Enterprise Marketing an Entire Nation as an Industry http://www.nzte.govt.nz/Pages/default.aspx http://www.youtube.com/watch?v=eh-0knDpn5g ©David Mayes 23
• 24. Industry Analysis Why Industry Analysis? Example: International Data Corporation (IDC) http://www.idc.com/prodserv/maps/consumer.jsp ©David Mayes 24
• 25. Industry Analysis Why Industry Analysis? Example: Central Okanagan Economic Development Commission http://investkelowna.com/ ©David Mayes 25
• 26. Questions? Why Industry Analysis? ©David Mayes 26
• 27. Industry Analysis 1. Instructor Introduction 2. What is Industry Analysis? 3. Why Industry Analysis? 4. Suggested Reading ©David Mayes 27 Industry Analysis: The Bigger Picture
• 28. Industry Analysis Suggested Reading: Suggested Reading: HBR’s 10 Must Reads on Strategy, Harvard Business Press, 2011 (HBR article anthology). Blue Ocean vs. Five Forces, Burke, A.E. (HBR journal article, online) http://toby.library.ubc.ca/subjects/subjpage2.cfm?id=660 How to Conduct An Industry Analysis, Small Business and Technology Development Center, http://www.sbtdc.org/pdf/industry_analysis.pdf ©David Mayes 28
• 29. ©David Mayes 29

Big Idea Social Entrepreneur: The New 21st Century Career

Late last year I wrote on this blog about my frustration with the lack of Big Ideas driving innovation. My rant was stimulated by a New York Times article on the grim underbelly of the “an app for everything” culture: people who were working on “small ideas,”  and losing their shirts in the process.  I also shared the thoughts of other entrepreneurial leaders, investors, and journalists, also bemoaning the fact that we seem to have lost our way, and are no longer thinking BIG.  This morning I stumbled on a post on the HBR Blog Network, entitled “Idea Entrepreneur: The New 21st Century Career.” I took some editorial license and added the words “Big”  and “Social” to my blog post, simply because the author was actually making the case for Big Ideas and Social Entrepreneurship, and the hopeful sign that there may be a re-emergence of people who care about Big Ideas.  Read my original post here, followed by the HBR Blog post.

The concept of “social entrepreneurship” has noticeably taken off with this generation of young people. While there some debate about the definition of “social entrepreneurship,” I am comfortable with the following explanation.

A social entrepreneur is a person who pursues novel applications that have the potential to solve community-based problems, both large and small. These individuals are willing to take on the risk and effort to create positive changes in society through their initiatives.

Examples of social entrepreneurship include microfinance institutions, educational programs, providing banking services in underserved areas and helping children orphaned by epidemic disease. Their efforts are connected to a notion of addressing unmet needs within communities that have been overlooked or not granted access to services, products, or base essentials available in more developed communities. A social entrepreneur might also seek to address imbalances in such availability, the root causes behind such social problems, or social stigma associated with being a resident of such communities. The main goal of a social entrepreneur is not to earn a profit, but rather to implement widespread improvements in society. However, a social entrepreneur must still be financially savvy to succeed in his or her cause.

I had the good fortune of working with the global social entrepreneurship NGO,  Enactus and a group of my students from the UBC Faculty of Management. We interacted with other social entrepreneurship groups as far afield as Perth, Australia, and Rotterdam in the Netherlands to develop our own project. Enactus categorizes projects by the potential for the project to become self-sustaining by the participants, and the original project volunteers working themselves out of a job. Our project was designed to meet the highest categorization within Enactus. We designed a roof-top hydroponic vegetable garden project that would produce high yield cash crop fruits and vegetables for the homeless community, managed by a local housing organization.  The end goal was to enable the homeless volunteers to take over the operation, generate income for themselves, and collaborate with the charity organization to enter into simple permanent housing.

Read more: What Makes Social Entrepreneurs Different?

Read more: http://mayo615.com/2012/11/18/app-development-booms-depressing-underbelly-what-ever-happened-to-big-ideas/

“Big” Idea Entrepreneur: The New 21st Century Career

Reblogged from the HBR Blog Network

by John Butman  |  10:00 AM May 27, 2013

Read more: http://blogs.hbr.org/cs/2013/05/idea_entrepreneur_the_new_21st.html

There is a new player emerging on the cultural and business scene today: the idea entrepreneur. Perhaps you are one yourself — or would like to be. The idea entrepreneur is an individual, usually a content expert and often a maverick, whose main goal is to influence how other people think and behave in relation to their cherished topic. These people don’t seek power over others and they’re not motivated by the prospect of achieving great wealth. Their goal is to make a difference, to change the world in some way.

Idea entrepreneurs are popping up everywhere. They’re people like Sheryl Sandberg (Facebook COO and author of Lean In), who is advocating a big new idea from within an organization. And like Atul Gawande (the checklist doctor), who is working to transform a professional discipline. Or like Blake Mycoskie (founder of TOMS shoes), who has created an unconventional business model.

In my research into this phenomenon (which forms the basis of my book, Breaking Out), I have been amazed at how many different kinds of people aspire to be idea entrepreneurs. I have met with, interviewed, emailed or tweeted with librarians, salespeople, educators, thirteen-year-old kids, marketers, technologists, consultants, business leaders, social entrepreneurs — from countries all over the world — who have an idea, want to go public with it, and, in some cases, build a sustainable enterprise around it.

The ones who succeed — whether it’s disrupting an established way of doing business as Vineet Nayar has done with his company or bringing a mindset change to a small community like Maria Madison has done in Concord, Massachusetts — share the following methods:

• They play many roles. They are manager, teacher, motivator, entertainer, coach, thought leader, and guru all rolled into one. Think Reid Hoffman (founder of LinkedIn and author of The Start-Up of You), Daniel Pink (author of Drive) or, in India, Kiran Bedi, leader of a worldwide movement to transform prisons and root out corruption.

• They create a platform of expressions and generate revenue to support their social activities. Idea entrepreneurs have to be exceptionally good at expressing their idea, and usually do so in many forms. They give private talks and major speeches, write books and blogs and articles, participate in panels and events, engage in social media — activities that can generate revenue (sometimes in considerable amounts), through a combination of fees, sales of their expressions, and related merchandise. Jim Collins has created a long-lasting enterprise supported by the sale of books and media, as well as fees for consulting, speaking engagements, and workshops.

• They offer a practical way to understand and implement their idea. Because people have a hard time responding to an abstract idea, the idea entrepreneur develops practices (and personally models them, too) that lead people to the idea through action. Bryant Terry, an “eco-chef” who argues that good nutrition is the best path to social justice, embeds his ideas in cooking methods and suggestions for social interaction around good food.

• They draw other people into their idea. The idea entrepreneur gathers people into the development, expression, and application of their idea. They form affiliations, build networks, and form groups. Al Gore created the Climate Reality Project Leadership Corps to bring his ideas about environmental sustainability to people around the world. Eckhart Tolle, a spiritual leader and author of The Power of Now, has established the online Eckhart Teachings Community with members in 130 countries. This inclusion of many people in many ways creates a phenomenon I call respiration— it’s as if the idea starts to breathe, and takes on a life of its own.

• They drive the quest for change. It is all too common that people with an idea for an improvement or a change to the world are satisfied to point out a problem, propose a solution, and then expect others to execute. The idea entrepreneur, however, sees the expression of the idea as the beginning of the effort — and it can be a lifelong one — in which they will continue to build the idea, reach new audiences, and offer practices that lead to change. Dr. Bindeshwar Pathak, based in Delhi, believes that world-class sanitation is necessary for India to realize its full potential. In forty years of idea entrepreneurship — spent in writing, speaking, travelling, network building, and technology development — he has influenced the way millions of people think and act.

People who have shaped our thinking and our society over the decades, even centuries, and continue to do so today — from Benjamin Franklin to Mohandas Gandhi to Hannah Salwen, an American teenager who modeled a disruptive approach to philanthropy — have followed the path of the idea entrepreneur.

These days, the model is well-defined and, thanks to the amazing range of activities we have for creating and sharing ideas, is within reach for just about anyone. If you have an idea, and want to go public with it, idea entrepreneurship can be one of the most powerful forces for change and improvement in the world today.

Are LinkedIn and HR technology suppressing hiring?

Ask the Headhunter: Are LinkedIn and HR technology suppressing hiring?

Unfortunately, the answer is YES.

Yes, LinkedIn and Human Resources screening technology are suppressing hiring.  The fact is, the task of submitting a resume’ that will make it past the filtering technology used by almost all recruiters these days, requires cunning and a shrewd understanding of how to manipulate these screening apps, something akin to Search Engine Optimization (SEO).  However, HR SEO techniques requires a knowledge of the app itself, which is a closely guarded secret. WRT to LinkedIn, I have growing concerns that LinkedIn no longer meets the “WIIFM” test, or “what’s in it for me?”  LinkedIn seems to have aligned its business and destiny more with the needs of the recruiting industry than with my own needs, while still trying to sell me on the benefits of paid “Premium Membership.” Increasingly blog discussions on the value of LinkedIn to business users are concluding that it’s value has diminished sharply. Perhaps the recruiting industry represents a bigger potential revenue stream and LinkedIn does not wish to reveal that to its individual users. Then there is the matter of the LinkedIn merger with Microsoft, which has left many observers underwhelmed, despite pronouncements of the exceptional strategic value to both companies.

Reblogged from: PBS Newshour (WordPress)

Source: Ask the Headhunter: Are LinkedIn and HR technology suppressing hiring?

NICK CORCODILOS

BY NICK CORCODILOS  September 14, 2016 at 2:04 PM EDT

Only 5.2 million people were hired into the 5.9 million jobs available in July. Indeed, LinkedIn and HR technology stand between virtually every open job and all those job seekers, writes Nick Corcodilos. Photo by Michael Nagle/Bloomberg via Getty Images

Nick Corcodilos started headhunting in Silicon Valley in 1979 and has answered over 30,000 questions from the Ask The Headhunter community.

In this special Making Sen$e edition of Ask The Headhunter, Nick shares insider advice and contrarian methods about winning and keeping the right job, on one condition: that you, dear Making Sense reader, send Nick your questions about your personal challenges with job hunting, interviewing, networking, resumes, job boards or salary negotiations. No guarantees — just a promise to do his best to offer useful advice.

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I admit I’m a skeptic if not a cynic. I just don’t buy the ballyhoo about how much better the “jobs numbers” are. Whether the numbers we’re getting from the Department of Labor are getting spun for political purposes or the data are not reflective of what’s really going on, something just doesn’t smell right.

And now a new JOLTS report (Job Openings and Labor Turnover Survey) from the Department of Labor has sent a jolt through some jobs watchers.

READ MORE: Ask the Headhunter: 8 steps to better hiring

In “A New Record for Job Openings Deepens Mystery Over Lack of Hiring,” the Wall Street Journal reveals a hole in our job market reality. Even though the number of jobs available in July grew to 5.9 million, only 5.2 million people were hired into those jobs.

After citing drops in unemployment numbers, the Wall Street Journal warns that:

What would normally sound like good news — abundant jobs — is tempered by the fact that people simply aren’t being hired into the positions at rates like in the past. About 300,000 fewer people are being hired each month compared with the pace reached in February.

Yep — fewer jobs are being filled.

The Wall Street Journal cites the routine suspects: “It could be workers lack the skills for available jobs or that employers have become too picky.”

Come on, folks. Let’s get out of the weeds and take a look at the huge tree that’s landed on job seekers — about 19.5 million who are unemployed, underemployed and looking for new jobs, as well as those who’ve “fallen off the rolls.”

Workers are no less skilled today than they were 15 years ago, adjusting for technology and other factors.

Peter Cappelli of University of Pennsylvania Wharton’s School has shown “lack of skills” is a straw man. Workers are no less skilled today than they were 15 years ago, adjusting for technology and other factors. Employers might be picky, but what analysts are missing is the employment infrastructure that dominates and suppresses hiring.

Indeed, LinkedIn and HR technology stand between virtually every open job and all those job seekers. Yet we’ve seen no analysis about whether or not these are the roadblocks. It’s too easy for economists to blame “the workforce,” because who dares question HR technology?

Where is the economist assigned by the White House or Congress or the Department of Labor who is doing the hard work of reviewing the employment infrastructure that employers and job seekers rely on? Where are the success statistics? Where is the failure analysis?

READ MORE: Ask the Headhunter: How did recruiting become so perverted?

I think our employment infrastructure is the single biggest culprit, and I’ve said why in plenty of columns. (For just one example of where investment in insane HR technology is leading us, see “HR Technology: Who’s Bad?”)

The HR technology seems to:

• Encourage irresponsible “recruiting” — solicitation of too many people from untargeted pools of candidates.
• Promote automated, reductionist “matching” of candidate keywords to job keywords. The algorithms make it look like HR is recruiting when HR is doing nothing but diddling keyboards. (See “Reductionist Recruiting: A short history of why you can’t get hired.”)
• Result in rejection of good candidates because the keyword model is woefully inadequate.
• Turn HR into rationalization central. “We’re doing our job incredibly well using state of the art technology, so there must be something wrong with the talent,” they say. (See “Why HR should get out of the hiring business.”)

The JOLTS numbers should be a wake-up call to legislators and employers: You’re not addressing what’s broken.

Labor Secretary Tom Perez needs to stop blaming “unskilled workers” and start looking hard at America’s employment infrastructure, which is controlled by a handful of private companies that profit when jobs don’t get filled, not when they do.

America’s employment infrastructure is controlled by a handful of private companies that profit when jobs don’t get filled, not when they do.

Indeed makes no money when a company fills a job — only when employers keep paying to keep looking. LinkedIn’s incentive is to convince employers to add more criteria to job postings, to make it harder to match a good hire, to keep looking. Applicant Tracking Systems — software applications that enable the electronic handling of recruitment — earn huge subscription fees from HR departmentswhen HR can’t fill jobs.

So do you think any of these vendors design systems that actually fill jobs? That would kill their revenue streams. There’s your roadblock.

The tip-off to the problem is this JOLTS report — companies are not hiring. When the Department of Labor tells us, “we just don’t know what’s going on,” all I hear is, “We don’t want to look under that big rock…”

Dear Readers: Let’s put it to a vote here: What’s the real reason fewer open jobs are being filled? What is suppressing hiring?

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Nick Corcodilos invites Making Sense readers to subscribe to his free weekly Ask The Headhunter© Newsletter. His in-depth “how to” PDF books are available on his website: “How to Work With Headhunters…and how to make headhunters work for you,” “Keep Your Salary Under Wraps,” “How Can I Change Careers?” and “Fearless Job Hunting.”

Send your questions to Nick, and join him for discussion every week here on Making Sense. Thanks for participating!

LinkedIn Microsoft Merger Raising More Questions Than Answers

The World’s Most Connected People Have Disappeared From LinkedIn

The most connected members of LinkedIn have vanished. What does this mean for you?

BY CANDICE GALEK

Founder and CEO, Bikini Luxe@bikiniluxe

Amidst news of LinkedIn being bought by Microsoft, one mystery remains: Where have all of the “Super Connectors” gone? It appears that the website built on making connections might frown upon having too many.

Most users on LinkedIn have under 500 connections. There is a subsection of LinkedInusers who are connected to hundreds of thousands of people. Individually Steven Burda and Zura Kakushadze have accumulated more connections than the majority of people in your office combined. Their accounts, along with a slew of others have vanished.

It’s impossible to determine exactly how many of their accounts were deactivated, mostly because outside of LinkedIn messages nobody knows how to reach each other. Their voices have been lost. While they wait in limbo for an answer as to when their accounts will be reinstated, we can only make assumptions as to what the real reason for their disappearance is.

Kakushadze earned his Ph.D in Theoretical Physics, has over 11 years of experience in quantitative finance, and has published over 100 scientific papers. Burda has a background in finance, IT, and accounting but feels at home as a social media consultant. To say that their loyal followers are missing out on their teachings is an understatement.

Curiosity may have killed the cat, but I wanted to know why they were deleted. Did they violate the terms of service? Did they somehow game the system, lie, cheat, or steal? I was able to contact the top two most connected users to get their side of the story.

How Many Connections Is Too Many?

LinkedIn is built on the expectation that you can build your professional identity and discover opportunities online. Mutual friends on LinkedIn introduced me to these two Super Connectors who felt as though they had grown too large of a following, and were banned because of it.

When I was a child I cared for a friend’s pet hamster while she was away. I knew I had to feed him, but I didn’t know how often. One day, I emptied the whole box of food into the cage and let the hamster eat as it pleased. I came back to check in on little Hammie, and to my dismay he had passed away.

I later learned that he had eaten himself to death. He didn’t know any better, food was good, it helped him to survive.

The same goes for LinkedIn users whose businesses thrive on the platform. Why were they given the ability to make connections only to be slapped on the wrist when they had too many?

The top ten Super Connectors have all been denied access to their accounts. In fact, when you go to their pages it simply says, “Sorry, this profile couldn’t be displayed.” Most claim that their emails asking for help from LinkedIn have gone ignored.

Why Are Some Allowed More Than Others?

L.I.O.N: LinkedIn Open Networker. These people usually have the most connections, and currently it’s not known why some people are capped at thirty thousand while others aren’t.

I have nearly 30k connections and 8k open requests that I cannot accept. I use LinkedIn to advertise my business, Bikini Luxe, and to connect with like minded people. These days it’s all about who you know, not what you know.

When asked how they amassed such a following, Kakushadze said, “Painstakingly. You either receive a connection request or you send one. One at a time.”

Could This Happen to You?

We can only speculate as to what the motives are, but the vague wording of the LinkedIn Terms of Service leaves a lot to the imagination. According to Kakushadze he doesn’t market, advertise, or make any money from LinkedIn. His main purpose on the website is to popularize his research and spread knowledge.

His papers on quantum finance, cancer research, and theoretical physics make my head spin. Why anyone (or any Social Platform) would want to halt someone like him from educating others entirely for free is beyond me.

Steven Burda spent ten years carefully cultivating his LinkedIn connections and growing his business. Will people still be interested in attending his LinkedIn Workshops if he isn’t actually on the platform any longer?

What I have found is that this could happen to anyone, for any reason. What we are led to believe to be our virtual property is not really ours at all, and it can be taken away at any time.

In a world where who you are on Social Media is all that matters, when your popularity online grants you access to more clientele and deems you as valid, having that stripped away when you’ve worked hard to achieve it must be devastating.

Reid Hoffman: Venture Capitalist Loser | MIT Technology Review

UPDATE: Since I wrote this post last week, on November 25th, events swiftly unfolded to underscore the points I made in criticism of Reid Hoffman’s views on venture capital, in his interview with the MIT Technology Review. Bill Gates and a host of global leaders, Silicon Valley industry leaders, and high-tech billionaires announced the Clean Tech Initiative, at the opening of the UN COP21 Climate Change Conference.  This initiative precisely makes my point that venture capitalists like Reid Hoffman fail to see their social responsibility, or to examine the ethics of their investments.  At the time I wrote the opening paragraph to this post (below), I had absolutely no idea that my points would be validated by Bill Gates, Obama, and high-tech industry leaders  Meg Whitman of HP, Facebook Chief Executive Officer Mark Zuckerberg, Alibaba Chairman Jack Ma, Amazon CEO Jeff Bezos, Ratan Tata, retired chairman of India’s Tata Sons, the holding company of the Tata group, and South African billionaire Patrice Motsepe of African Rainbow Minerals.  I would now go so far to say that Hoffman’s views are an embarrassment to himself in the face of the vision of others.

READ MORE: Bill Gates, Mark Zuckerberg, Jeff Bezos And A Host of Others Announce Clean Tech Initiative

An insightful interview with Reid Hoffman, venture capitalist and founder of LinkedIn. But to my mind, Hoffman seems blase’ about Big Ideas and “deep tech” funding. I share the views of Startup Genome founder, Max Marmer, and bemoan the limited focus of VC’s on world-changing technologies, leaving it to billionaire angels. I also sense a myopia about the ongoing intense debate over the distortion of the sharing economy by Uber, Airbnb, and others.  Thanks to Gary Reischel for posting this article on his Facebook page.

My attention is focused on two privately funded Big Idea entrepreneurial ventures in Vancouver B.C., General Fusion, and D-Wave.  General Fusion and at least two other companies in California and Germany are competing against the two massively funded governmental nuclear fusion projects, ITER at Cadarache in France, and The National Ignition Facility at the U.S.  Department of Energy’s Livermore National Labs. D-Wave, is pioneering quantum computing, having successfully sold two early quantum computers to Google and Lockheed Martin/NASA in Silicon Valley.

Max Marmer…read more: Reversing The Decline In Big Ideas

Read More mayo615: Are Venture Capitalists and Big Ideas Converging Again?

 

Source: Venture Capital in Transition | MIT Technology Review

VC Reid Hoffman on VC’s Evolution

Silicon Valley entrepreneur and investor Reid Hoffman wants venture capital to adapt to an era in which startups must grow faster.

• By Robert D. Hof on November 23, 2015

BUSINESS REPORT
Funding Innovation

Reid Hoffman

Reid Hoffman has worked the entire tech startup ecosystem: he cofounded LinkedIn in 2002, used the money he made there to become one of Silicon Valley’s most prolific angel investors, invested early in Facebook, Zynga, and many others, and is now a venture capitalist at Greylock Partners. At Greylock, which he joined in 2009, Hoffman has focused his investments on consumer Internet companies that use software to create networks of millions of users, such as the home-sharing site Airbnb.

Startup incubators that nurture entrepreneurs’ early ideas, super-angels who invest small amounts in large numbers of early-stage companies, and project crowdfunding via Internet sites such as Kickstarter are all presenting alternatives to traditional VCs. Hoffman thinks firms like his can compete by providing services such as dedicated teams that recruit engineers and holding dozens of networking and educational events to help startups get big faster. He’s currently teaching a Stanford University class for entrepreneurs in “blitzscaling,” his term for the rapid scaling up of startups.

Hoffman spoke with MIT Technology Review contributing editor Robert Hof about why that’s especially important today and whether enough investing is being done in core technologies such as computer science, networking, and semiconductors.

How have changes in technology altered the way you invest?
Starting a software company is now a lot cheaper and faster than it used to be, thanks to Amazon Web Services, open-source software, and the ability to build an app on iOS or Android. Speed to realizing a global opportunity is more critical competitively. I wanted to build out a [venture capital] platform that was appropriate to the modern age of entrepreneurship.

VCs have always provided help on networking and hiring. How is your platform different?

Think about how an application gets built on iOS. It calls up services on Apple’s platform, such as a graphics framework or how to create a dialog box. Similarly, a business gets built by hiring people, developing its product or service, growing its revenues. The modern venture firm needs to provide a set of services that the company can call upon. We have a dedicated team to recruit engineers and product people. We have more than a dozen communities of people from big Valley companies like Apple and Facebook focused on technical topics such as big data and user growth. They meet with our companies to teach things like growth hacking, the use of social media, and other low-cost alternatives for marketing.

“There are still billions of people coming online. Also, software is affecting almost every industry … And we’re just beginning to see how data informs everything.”

How long will these software-driven networks you’re focused on be good investing opportunities?

There are still billions of people coming online. Also, software is affecting almost every industry, from transportation, with Uber and self-driving cars, to personalized medicine, health, and genetics. And we’re just beginning to see how data informs everything. Those trends are in the very early innings, so they’re the ones that will have the macroeconomic impact over the next five to 10 years.

You’ve said you don’t think there’s a bubble in tech investing, but surely not all these upstarts are worth so much?

People are so exuberant about finding their way to the cutting-edge companies that valuations are going up across the board. Some companies are so massively valuable that even when you invest in them at an accelerated valuation, they’re still cheap in retrospect. But many companies are given [high] valuations when they actually shouldn’t be.

I don’t think higher valuations in private [venture capital fund-raising] rounds lead to a massive [public] market correction. A private down round [fund-raising that values the company at a lesser amount than the previous round] doesn’t destabilize the public capital markets. But it’s still pretty frothy. So when you’re seeing inflated valuations, you sit it out.

Have you been sitting out more often?
We’ve passed on many more deals in the past two years.

Is true innovation beyond slick apps being financed to the extent it should?
Markets tend to go toward realizable, short-term rewards that require little capital.

$10 billion
Value of Airbnb, a Hoffman investment, in its most recent fund-raising round

That tends to favor pure-play software companies like Airbnb, Dropbox, and Uber that have global reach and network effects [in which a service becomes much more valuable as more people use it]. If more capital naturally flowed toward deep tech, I think that would be a good thing for the world. But you do have SpaceX, you do have Tesla. Deep tech isn’t that starved for capital.

VC investing is way up, but the traditional exit, the IPO, often comes after a company has already grown quite large. As a result, public investors, as well as employees don’t share as much of the increase in value. Is that a problem?
It used to be, back in 1993–’96, tech companies would go public and then public market shareholders would benefit from the huge growth in valuations. Now it’s more the private investors who benefit. I don’t think that’s necessarily a problem.

Doesn’t that go against the idea that employee stock options and so on will democratize wealth, or at least spread it more broadly?
Ideally, you’d like to make the capital returns available to everybody, not just to the folks who can participate in these elite private funds or elite private financings. I’d rather have it democratized. But on the other hand, it makes complete sense from a company perspective to delay liquidity, because they can run much more efficiently as a private company and get as much momentum as possible.

What’s Up With LinkedIn?

LinkedIn shares yesterday plummeted precipitously after the company announced poorer than expected results, and downgraded prospects for the remainder of the year.  Looking beyond the downgraded forecast and the costs associated with the $1.5 Billion acquisition of lynda.com, some analysts scrutinizing the press release, noted that there was no growth reported in the user base of “over 350 million users”, despite moves into China and other markets. Premium user revenue grew significantly but that did not come near to offsetting the total revenue number.  Revenue and number of users are the two numbers followed most closely by investment analysts.
LinkedIn’s recent acquisitions have been noted as a LinkedIn strategy for compensating for flat overall user growth, and for diversifying into new markets to augment growth.

Some journalists are already asking if the market is over-reacting to LinkedIn’s downgraded forecast yesterday.  The company has demonstrated solid results since it went public in 2011, and management seems to be confidently “in charge.”  However, in my personal view, as a LinkedIn user for many years, I do think that the sell-off by shareholders may be justified and prudent, even if most analysts have not followed the company as closely as some others.   I have this sinking feeling of LinkedIn losing its way, strategic errors, and the accelerated corporate life cycle in social media, in Silicon Valley, and at LinkedIn in particular. John Chambers has commented on this rapid pace of change in the context of his management of Cisco Systems. It is also akin to Andy Grove’s “strategic inflection point,”where the fundamentals of a business are changing but management may or may not realize it, and may or may not take the appropriate actions. Put plainly, something simply doesn’t feel right in my gut about LinkedIn

My concerns fall into three major areas: acquisitions, Premium user subscriptions, and LinkedIn user Terms & Conditions.

1.  While observers have complimented LinkedIn management for some of their recent moves to acquire synergistic businesses in new markets, other moves have seemed ill-conceived and poorly executed.  I wrote on this blog about the curious LinkedIn acquisition of CardMunch,  a business card processing app for smartphones. The application was only available on iPhones, and enjoyed first-mover status, but the assumption was that an Android version would be imminent for obvious reasons.  That never happened. After more than a year of doing nothing with the app and “leaving open a competitive market opportunity window the size of an aircraft carrier,”  LinkedIn announced that it was changing focus to Evernote business card services, and apparently ceasing support for CardMunch. IMHO, the amount of time LinkedIn frittered away on this left them no option but to kill the app.  While LinkedIn may argue that Evernote provides its users with a superior solution as justification for their decision, if LinkedIn had moved promptly when they had the opportunity, partnering with Evernote would have been unnecessary. There is also the matter of the money wasted on Linkedin’s original acquisition of Cardmunch, though the Cardmunch founders may feel they dodged a bullet, and probably now own LinkedIn stock.

2.  Yesterday’s announcement noted that LinkedIn Premium subscriptions had grown dramatically in the last year. What we do not know is the raw number of Premium subscribers so the percentage numbers may be misleading.  My sense of Premium subscriptions is that there is a significant amount of “churn” in Premium subscriptions. That is to say that LinkedIn may be adding numbers of users in new markets but the core base of Premium subscribers may be simultaneously eroding in the core U.S. market.  My evidence is based on a recent LinkedIn Support discussion asking users their assessment of the value from their Premium subscription.  The responses were an almost unanimous torrent of complaints of limited to no value experienced from paying the Premium subscription. This was only the most recent incident.

3. LinkedIn’s Terms & Conditions seem to have morphed into policies designed to make the site more of an app for recruiters and staffing personal than a “professional networking” site.  I think I can safely stick my neck out and say that while LinkedIn was originally conceived as a professional networking site, few if any users truly think of the site or use it for professional networking. It is a bit of an arm’s length experience for LinkedIn users. The oft cited 3rd Level connections are useless.  I will go farther and say that I do not know of anyone in my 500+ network who has successfully secured a senior position via LinkedIn. As we all know, this happens primarily through the kind of networking that does not occur on LinkedIn.  In an odd turn of events, LinkedIn Groups policy was unilaterally changed without notice or discussion. The change enabled group admins to unilaterally bar specific group members from posting discussions for reasons that were obscure. The obvious problem was admin censorship and bias against a particular user.  The apparent concern was that some users were posting discussions to multiple groups, though this was never made clear.  The decision led to an uproar of angry comments on the LinkedIn Support Forum. After weeks of stonewalling and stalling, LinkedIn finally reversed the policy in the face of the stiff criticism from users.  To me this smacked of Facebook’s ill-conceived policy changes which were eventually reversed.

In summary, I think LinkedIn has evolved into something very different than the site/application that many original users imagined they were joining and using.  This fact seems to be sinking in with users, some of whom are showing increasing dissatisfaction with LinkedIn and with paying for Premium services that do not seem to offer value.  I sometimes wonder about the people who view my profile, many of whom have no professional connection to me whatsoever and may be halfway around the World from me.  Some of the new businesses sound interesting potentially, but I am not at all certain that I would use them. I have expressed concerns that the LinkedIn brand itself is being tarnished and devalued by some of the changes and policies.  Most concerning, I wonder if LinkedIn management are aware of these issues and even admitting it to themselves, if not to analysts.

*I want to first declare that I have no special insight or information regarding LinkedIn.  My comments and opinions on LinkedIn are based only on my own observations over a considerable period of time, my own interaction with LinkedIn Support, and recent media articles on LinkedIn.

Here’s How To Get A Job At Facebook….

…Or any other hot company in Silicon Valley…

I have told my UBC Management students this story. It has been repeated over and over since then. The story this morning from Business Insider and SF Gate, the blog of The San Francisco Chronicle serves to underscore just how tough the competition is in Silicon Valley. The competition for jobs has become so fierce as to defy comprehension.

Once upon a time, long ago and far away, in a galaxy many light years from here, I worked in a senior position at Silicon Graphics. At that time Silicon Graphics was pioneering 3D visual computing, with the highest performance computers out there. Today, Silicon Graphics is gone and a distant memory. Think about early gaming and bleeding edge computer animation used in Disney films.  SGI was the hottest place to work in Silicon Valley, the Facebook or Google of its time. SGI routinely got thousands of applications from very highly qualified candidates for very low level entry programming positions. Competition for marketing positions among Ivy League MBA’s was even worse.

I distinctly remember the interview process for engineers that ended up being a competition for who could draw the best “giraffe” with one piece of white copy paper and a box of Crayola crayons..  The artwork was posted around SGI’s Building Seven hallway walls, like in the photo below. Ironically “SGI building seven” is now a Google building.  SGI employees were solicited to help judge the best “giraffe” drawings. This became the basis for the hiring decisions for these jobs at SGI.. From my distant perspective, I saw a lot of good people who were hired and did very good work, but there were just so many good applications that the company needed to find some radical way to cut down on the numbers…  That is how it is, only worse today, at companies like Facebook, Google, or a dozen other high profile new companies.

Here’s How To Get A Job At Facebook

Jacquelyn Smith, provided by

Published 11:00 am, Sunday, December 21, 2014

Reposted from SF Gate

• 8

Thanks to its famously easygoing culture and fabulous perks, Facebook is one of the most in-demand places to work — and getting a job there is no easy feat.

To get a better sense of what it takes to land a highly coveted position with the social media giant, we recently spoke to one employee who walked us through his interview process and shared what it’s really like to work for the company.

Nicolas Spiegelberg earned a Masters in Computer Engineering from the University of Alabama in Huntsville in 2006.

After graduating with a 4.0 GPA, he worked for a telecommunications company in Alabama for a few years — but had a serious interest in the “greatly unrealized potential of online social networking.”

Spiegelberg, 32, tells Business Insider he was “hooked on the idea of working for Facebook from the start.”

In 2009, “Facebook had fun programming puzzles that you could solve and get your performance evaluated online,” he says. “I solved a variant of the Stable Marriage Problem and submitted the answer. Turns out Facebook recruiting saw the results, and I got an interview request from a recruiter as a result.”

The first step was a 45-minute phone screening. “Most of the interview was spent on a coding problem but there was a decent chunk of time at the end where I could ask the engineer questions about their job and what motivates them to work at Facebook.”

Spiegelberg was invited to California to meet with hiring managers in person. He went through a total of four interviews with a quick break in the middle.

“It was refreshing from some of the other 10-plus hour interview slogs that I’ve been through in the past,” he says. “I feel like they got a good assessment of my skills while not spending so much time that I was too drained to perform well at the end.”

Spiegelberg says if you’re flying a long distance, Facebook normally gives you an extra day to rest before your interview. “I strongly recommend taking it so you can relax, freshen up, and give it your 100% the next day.”

He says two of his in-person interviews focused on coding and algorithms. “They give you problems that require you to take the common programming structures (lists, graphs, caches) and combine them together to solve a single problem,” he explains. “The problems are a little contrived, but definitely mirror the sort of problems you encounter on a day-to-day basis here.”

Another interview focused on work philosophy. “The interviewer had me walk through tough problems I had solved in the past and various lessons I learned from it,” says Spiegelberg. “Facebook wants to make sure that you want to constantly improve and can use lessons from the past to apply to current challenges.”

And the final interview focused on system design. “I believe my particular question was to design a traffic light system,” he recalls. “Facebook doesn’t ask this anymore — but the basic gist was to see if I could take a complicated problem and break it into parts. Nowadays, we focus more on designing some of the basic products that comprise Facebook.”

Spiegelberg says he wasn’t a shoo-in after that round.

“It turned out, my packet created a big argument during candidate review. One person really didn’t want me hired. However, a couple different interviewers thought that Facebook would be making a mistake by letting me go. The people who fought for me were able to convince management to reassess me on the criticisms of the negative interviewer and I had two follow-up phone screens.”

Spiegelberg has seen candidates demoralized because they didn’t do well in their interview, and they just give up. “What they don’t realize is that Facebook values somebody who will go to bat for you. That’s why you need to give it 100%. You actually have multiple chances to convince Facebook hiring managers that they are making a huge mistake if they let you go.”

Spiegelberg did just that and eventually won over the skeptics.

In November 2009, he landed a job as a software engineer in Facebook’s California headquarters, and in January 2012, he relocated to Facebook’s New York office, where he was promoted two years later to Engineering Manager.

“I love it here,” he says. “There is so much opportunity for personal and professional growth. I started by joining a brand new team that created Facebook Messenger, scaled their storage system to billions of users, open sourced my work, and traveled all over the world to share my experience at conferences.”

“Then, I moved to New York to help start an office,” he continues. “A year ago, I moved to Mobile Infrastructure and am learning how to scale out a completely new set of challenges. There are always new, unexplored growth opportunities for engineers here.”

Facebook is always at the top of workplace rankings, including Glassdoor’s list of the best companies to work for. Spiegelberg says Facebook’s mission, culture, and values are what make it such a great place to work. “Making the world more open and connected for billions of users is a high impact and personally rewarding mission. Friends and family are constantly sharing how Facebook helped them connect with people they care about.”

Internally, he explains, the Facebook culture is also very open and connected. “You can learn about any area of Facebook, even it’s not immediately related to what you do.” If you don’t fully understand how Facebook’s News Feed works, for instance, you can go watch an internal presentation. “If you’re wondering what Zuck thinks about Occulus, ask him this Friday at the company Q&A.” 

Spiegelberg says Facebook values building products that people love by moving fast and being bold. “As an engineer, this means that you’re empowered to fix problems instead of resign yourself to them. Engineers are constantly trying to move faster and make a better experience.”

Another important thing to know, especially if you’re interested in working for Facebook: it’s imperative that you study up before you apply for a job.

“Facebook attracts people that want to make an impact,” he says. “Our interview process might be tough, but you know that your coworkers are individuals with the same perseverance that you demonstrate,” he explains.

“One of my favorite quotes, echoed by multiple Facebook engineers, is an ancient Latin proverb: ‘Fortune favors the bold.’ Maybe you’re a great fit for Facebook; maybe it’s something else. You’ll never know if you don’t try,” he says. “The act of being bold and putting your all into preparing for your dream job can only end well.”

What are the historical shrines of Silicon Valley?

The answers to this question make a great tour of Silicon Valley history. I added my own answer: the historic bronze plaque commemorating Bob Noyce’s invention of the integrated circuit. It is outside the front of the old Fairchild Semiconductor building, at the corner of Ararstradero Road and Charleston Road, and is almost completely forgotten. Probably the most important invention in our generation. Like so much of Silicon Valley, it is very difficult to easily visit the most important sites or get any sense of their significance. But this list is very good.

The historical significance of some of these places will be instantly obvious, others less so. They are all important, so it’s your homework assignment.

i.e. the places of great historical significance to the technology industry … HP Garage, Googleplex, Shockley Semiconductor office, etc.

The Top 20 to my mindonScaruffi’s list include these (using his words here):

1. Stanford’s building 50, where the Physics Dept was (1891),
   next to the Memorial Church in the “quadrangle”
2. Stanford’s “Engineering Corner”, where Fred
   Terman used to work (1902)
   
3. The site where in 1909 Charles Herrold established the
   first radio broadcasting station in the world: Fairmont Tower, 50 W. San
   Fernando St & First St, San Jose
4. The site of the laboratory and factory of Federal
   Telegraph Company (1911), where Lee de Forest worked: 913 Emerson St &
   Channing Ave, Palo Alto
5. Philo Farnsworth’s laboratory (1927), where television was
   invented: 202 Green Street & Sansome, San Francisco
6. Fisher Research Laboratories (1931) was based in this
   house: 1505 Byron St, Palo Alto
   
7. Hewlett-Packard’s garage (1937), where William Hewlett and
   David Packard started their business: 367 Addison Avenue, Palo Alto
8. U.C. Berkeley campus and Lawrence Berkeley National Lab
9. The location of Hewlett-Packard’s first building (1942):
   395 Page Mill Road, Palo Alto
10. Ampex’s original building (1944): 1313 Laurel St., San
    Carlos
11. The street where Varian (1948) was started: Washington St,
    San Carlos
12. IBM’s Western Lab (1952), where the Random Access Method
    of Accounting and Control (RAMAC) was built: 99 Notre Dame Street, San Jose
13. Shockley’s Laboratory (1956): 391 San Antonio Road,
    Mountain View
14. NASA Ames (1958): Moffett Blvd./NASA Parkway, Mountain
    View
15. Fairchild (1959), the site where Robert Noyce and others
    co-invented the integrated circuit: 844 E Charleston Rd, Palo Alto
16. The building that became the corporate headquarters when
    HP moved to the Stanford Industrial Park (1960) and then HP Labs (1966): 1501
    Page Mill Road, Palo Alto
17. Venture capital’s headquarters in Menlo Park (1969): 3000
    Sand Hill Rd, Menlo Park
18. Kleiner Perkins Caufield Byers, where Genentech’s first
    office (1975) was located and where countless start-ups were funded: 2750 Sand
    Hill Road, Menlo Park
19. Xerox PARC (1970): 3333 Coyote Hill Road, Palo Alto
20. Four Phase Systems, which started out in a former
    dentist’s office (1969): 991 Commercial St, Palo Alto

View Question on Quora

Culture Eats Strategy For Breakfast

 

 

Culture Eats Strategy For Breakfast

Next Story

Reblogged from TechCrunch

Editor’s note: Bill Aulet is the managing director of the Martin Trust Center for MIT Entrepreneurship and a senior lecturer at the MIT Sloan School of Management. He is the author of the recently released book, Disciplined Entrepreneurship: 24 Steps to a Successful Startup. 

I used to think corporate culture didn’t matter. Discussion of vision, mission and values was for people who couldn’t build product or sell it! We had work to do and this MBA BS was getting in the way!

And then my first company failed.

Cambridge Decision Dynamics did not fail because we didn’t have a great technology or a great product or customers. It failed as a sustainable, scalable organization because we had no meaningful purpose to create team unity to fight through the tough times. Now the company sits comfortably in a perpetual state of what I like to call “deep stealth mode.”

Compare this to the rapidly growing company Eventbrite that I visited recently with some of my students. Eventbrite enables event planners to manage ticket sales and RSVPs online, and its users have sold over $2 billion in tickets.

There was palpable energy and excitement in the air when we stepped in the door. Dozens of neatly parked bicycles spanned a row next to the smiling receptionist. The employee who gave us a tour proudly showed off their conference rooms named after big events that they had helped their customers pull off, including “Promunism,” which was a Communist-themed high school prom. That room had a conspicuous red rotary phone for the emergencies that might come up in planning such a large event, a clear and visible sign linking the company to its customers in a positive manner.

A minute later, we walked by a whiteboard with the prompt “Home to me is…” that was covered with enthusiastic employee suggestions.

Being from New York, I am inherently skeptical about worlds of happiness and cohesion. But it all made sense when our host, VP of marketing, former MIT student, and single-digit-number employee Tamara Mendelsohn, came striding in the room, beaming with pride and energy, to discuss how Eventbrite went from just a few employees to hundreds and became a model of success for others in Northern California.

There was a lot of technical advice on primary market research and marketing techniques to drive market traction, but by far the most interesting part was about how the founders and the leaders of the company had consciously “engineered the company’s culture.” At first, she explained, the primary focus was testing for humility during the hiring process, and they had a checklist to enforce their “no assholes” rule. But they quickly realized they needed to do more.

As the company grew, they wanted to keep the same GSD (Get Stuff Done) attitude across the company and not let their company turn into “just another company.” This was tricky, but because the founders and employees were deeply committed to this attitude, they developed the following solution: “You can’t complain here,” Tamara explained. “If you see something wrong, you must fix it. We say it is a great opportunity to come up with a solution, and this is where many of our best programs have come from. Anything can be changed. We aren’t victim to anyone. We own the culture.”

It is no accident that such a strong culture has produced such a successful company. Event planners have enough to worry about without their ticket-sales software having problems – it needs to just work. When we have used the tool for our center’s events, we have found both a good feature set but also a super-responsive technical support team that has us covered when we screw up or don’t understand certain features. When Tamara explained Eventbrite’s culture to us, it made sense to me why their support team was so on point.

As we talk about in our classes (and credit to Peter Drucker who had the original quote which we have modified), “culture eats strategy for breakfast, technology for lunch, and products for dinner, and soon thereafter everything else too.” Why? Because company culture, a concept pioneered by Edgar Schein, is the operationalizing of an organization’s values. Culture guides employee decisions about both technical business decisions and how they interact with others. Good culture creates an internal coherence in actions taken by a very diverse group of employees.

Some may believe that culture cannot be “engineered,” and that it just happens. It is true that culture happens whether you want it to or not. It is the DNA of the company and is in large part created by the founders – not by their words so much as their actions. So the very decision to not try to create a corporate culture, or worse, to not have company values, is in fact your choice of what culture will prevail – and not for the better.

Should this have been a surprise to me? No, because for over a decade in the 1980s and early 1990s, I worked for IBM when it was the most respected, profitable and rapidly growing company in the world. From day one of training (training which lasted often for two years), the company made clear the importance of their trio of core values: respect for the individual, superlative customer service, and the pursuit of excellence in all tasks. It was this fervent adherence to these core values – through the training, the monthly communications, the performance-appraisal system, the role models, and ultimately every decision we made –that made us great.

In my later years there, I had seen a distinction erosion of management’s commitment and adherence to these values. Leaders started to cut corners on these to achieve short-term objectives, as they felt less confident in their position and felt it was more important to deliver short-term results. It was this ambiguity about these values that contributed so mightily to the fall of IBM, which led to the installment of Lou Gerstner as CEO.

As he worked to turn around the business, he came to a deeper understanding of the issue, which he voiced himself at the end of his tenure: “I came to see in my time at IBM that culture isn’t just one aspect of the game – it is the game. In the end an organization is nothing more than the collective capacity of its people to create value.”

While IBM is a large company, this pattern is true as well for the world of startups I now operate in — especially startups that want to scale. My colleague, Paul English, built a unique culture at Kayak that was the foundation of that company’s success. The founders created a system where their company culture of excellence and productivity was created from the hiring process through to operations. Meetings where decisions were to be made were to have no more than three people because then people were wasting their time. This created a culture of action and accountability while trading off consensus.

This culture does not work for all people and all companies but they made no apologies for it at Kayak and pursued it consistently. It was reinforced daily by practices ranging from Paul’s behavior, to size of conference rooms to the incentive system. The result of these efforts was that the company’s revenue per employee was $1.25 million, which was more than double the industry average. In June 2013, Kayak was purchased for $1.8 billion byPriceline.com.

Another example is a company called Dyn, which is based in Manchester, N.H. This company performs the crucial but unglamorous work of creating, managing and improving the plumbing of the Internet for users. The company’s founders believed deeply that they needed to have a strong culture. Aligning with what will create value for their customers, they focused on creating an environment that was exceptional at allowing people to be honest about their mistakes, driving them to rectify them, and then celebrate and immortalize the technical efforts that brought the solutions to life.

Again this culture was brought to life by the real estate, the way visitors were handled, the actions of the company leaders and their highly visible movie posters. An example of a movie poster is shown below. In this case, the customer had a broken workflow for registering new domains, so the employees worked on a solution that made it so easy “even your parents can figure it out.” The company then invested in creating the poster below and then having the team sign the poster. It is now permanently and prominently hung in their headquarters. It is no surprise to me that Dyn has grown from 53 employees in 2011 to 300 employees today and is considered a huge success story in an unconventional location.

Every company, especially startups, will experience random events that will help or hurt. It is impossible to fully anticipate these events ahead of time. That’s not the question. The question is how your organization will react to the series of inevitable unknown and random events.

A strong product plan is great, but it also takes strong culture to handle potentially adverse scenarios in a positive way. A positive culture like Eventbrite’s takes what would be an inherently fragile human system and makes it anti-fragile (i.e. it gets stronger with random events), to use the concept that Nassim Nicholas Taleb describes in his books. The unpredictable world of a fast-growing startup, and the daily decisions that must be made in response, tend to make the venture stronger rather than weaker or more confused.

So count me among the completely converted. When I talk to entrepreneurs now, before I get too carried away with the idea, I want to probe them about their vision, mission and values. Ideas are cheap – and tasty too. Culture eats them even before its pre-breakfast morning run.

“So Do You Have Any Questions for Me?”

Joel Peterson, Stanford Business School Professor, and Chairman of JetBlue Airways, is the author of the LinkedIn post below. My MGMT 481 Strategy students will recall his YouTube lecture on corporate culture shown to our class.   In this piece, Professor Peterson emphasizes the importance of preparing in advance for your interviews, and responding intelligently to the inevitable question from your interviewer, “So, do you have any quesitons for me?”

The One Job Interview Question to Get Right:

October 15, 2013

When it comes to job interviews, preparation is key. But it’s not always easy for prospective employees to show interviewers who they are, and how well they’ve done their homework. The best chance comes when you’re asked the inevitable – but tricky – open-ended question: “What questions do you have?”

This is an interviewer’s chance to find out how much research you’ve done, how self-absorbed you are, and where your priorities lie.

There are good and bad ways to respond. If you want to mess up what might have been an otherwise successful interview, be sure to ask one of the following:

1. “What will my salary be?” — followed by the even worse, “And how often do you give raises?

2. “What are your policies regarding vacation, time off, and breaks?”

3. “Can you tell me about your healthcare plan? Will my spouse be covered?”

The first questions reflect a “what’s in it for me?” attitude. The second two are the types of questions more appropriate for human resources than for your valuable time with a decision-maker. There’s plenty of time to learn about these issues if an offer is made.

So instead of asking questions about you, try asking a few about the place to which you may be devoting a great deal of your future time and energy:

1. “How can new employees become familiar with, and begin to contribute to, the culture you’ve developed here?

2. “What’s the most important way that your company differentiates itself from competitors?” (Focus the question on the particular industry you’re in, showing that you’re knowledgeable about the company and its sector.)

3. “What are a few of the most important challenges that the industry is facing, and how is your company going to approach them?

4. “What might I do to add the greatest value to the business?” — followed by, “What kinds of things can I do to prepare myself for the job?”

These questions reveal three important things: that you know the company has a unique culture; that you understand that a successful business is ultimately about offering something unique to the market, and that you’re already imagining yourself as part of a winning team.

If such an open-ended question scares you, don’t let it. If you’re ready, you can transform a challenge into an opportunity, and either get the job offer or get called back for a second interview — where your interviewers will remember how prepared you were for the toughest question of all.

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