Sean Eby

Last week, I was invited to be a part of an entrepreneurship forum at the University of Illinois in Champaign-Urbana. During the actual panel session, we used my product, Poll Everywhere, to allow the audience of students to submit questions to the panel during our talk. This is a great use of Poll Everywhere and it worked really well in this instance.

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The panel consumed all of the available time so we didn't quite get to as many of the audience questions as we hoped so I thought I might try to answer a few good ones that didn't get answered. Here we go:

Where do you go for inspiration? Where do you get ideas from?

On one level, ideas seem to come at me, randomly being around the city or driving or visiting with friends or out at a bar. Other ideas also come from reading new and interesting books that I've found or were recommended to me to read. Different environments and experiences also seem to give me new insights and ideas such as traveling through many different countries as I have or visiting new places (museums, national landmarks, small neighborhoods, and on and on). I also like challenging friends on different issues or problems to see if we can construct an answer to a tough problem. I suppose it has been said before but inspiration can come virtually from anywhere.

Team or idea? Which is important? Paul Graham said, you cannot change a team, but you can change an idea anytime.

Well, both are important. I disagree that you can't change a team but it is definitely harder to change a team than it is to change an idea. On the other hand, it's also easier (most of the time) to see whether you have a good team in place than if you have a good idea or not. A good team will eventually be able to figure out what it needs to do or how to transform the wrong idea into something new (and perhaps entirely different). When starting a business with partners or hiring outside employees or contractors for the first time, you absolutely have to think about who those people are with a critical eye.

Do you have someone like a mentor to review your business plan before launching your business?

Certainly advisers to the company and me personally are valuable for feedback on what you're trying to accomplish and how you are going to accomplish it. A business plan is not necessarily a prerequisite to starting a business but having at least something written down about what you are going to attempt to do, how you'll be doing it, who you're doing it for, etc., helps when trying to have meaningful conversations with advisers to get feedback in the first place. Also, remember that just because an adviser or mentor says something is good or bad also doesn't mean that you should or shouldn't do it.

Does team matter? What is the best size for a team?

Team absolutely matters as I said above. Team definitely comes before idea (usually). The best size for a team is not a known number but when starting from scratch, having at least 1 other person involved, either as a co-founder or hired help is probably best. Starting a business from scratch and doing everything yourself with no help is almost impossible (you need other people to help and be a part of what you're doing to succeed).

I've always heard "Starting a business is no time for on the job training." How much experience did you guys start with?

Starting a business is very much on-the-job training, at least in the sense that you will be learning what works and what doesn't in how to build a business around an idea, how customers are really using your products/services, and how the specifics of the business model function. Maybe that saying refers more to if you are building, say, software and have absolutely zero programming experience on your team. That lack of skill is probably going to prevent you from building anything significantly useful. Starting with more experience can definitely be a plus but as was said in the panel, some ignorance about certain things can also be beneficial! I definitely wouldn't look at "how much" experience you have as a barometer to whether you should start a business. There are too many examples of young people with very little experience launching a new business and getting somewhere with it. Would additional experience have helped them? Yea, maybe, but so what and why wait?

What separates you all from unsuccessful entrepreneurs? Luck? Sweat? Brains?

My success is only a small amount so far with my business so I can't claim some major public success as of yet. What separates me from others (I think) is my persistence and focus. Giving up and giving in too quickly or too easily is what kills people's momentum and any significant chances of success. Persistence and focus and maintaining those two things requires an ability to filter out emotions such as fear, trepidation, and feedback from the random person on the street who might say "no" to buying your product/service. Also, not that this is a big differentiator, it helps to simply start getting to work and getting shit done! Don't mull around all week or month *thinking*, start doing it, and do it now.

Start full-time or part-time?

Does not matter much. I started part-time and it worked reasonably well. In fact, having a nice paycheck and moonlighting on the side can be a really great combination for later success, including the ability to balance the two workloads appropriately and not get steamrolled by too much, too fast. With less time to focus on your product/service, it forces you to spend time on the absolute essentials of what is important about what problem you're solving for other people. Get the simplest product/service in place for people to start using and consuming it.

Do you think I should start a company while in school?

Definitely. You're surrounded (hopefully) with a plethora of other smart and bright people who might later want to be a part of what you're doing. It goes back to moonlighting while working a full-time job in that you will be forced to balance the important things against what your responsibilities are while still in school. Starting a company, even if it fails while in school, will also be of value if you decide to later get a job with a regular employer. That's a huge differentiator over other candidates. Come in with a story about what you did, why it didn't work, and the valuable lessons you learned from it.

 

The best advice I ever received and ever followed was simple: Save money. Live below your means by eliminating costs and personal belongings and expenses so that you have money left over to save in an account. What you do with the saved money is either let it sit there for a long time (not the wisest thing around) or invest it (a good idea but not all of it, and this sounds like a pretty bad idea had you done this just 18 months ago, right!?). Seriously, though, making sure you have a large stash of cash around for yourself is probably the best thing you might end up doing for yourself. There are thousand-and-one reasons why you will one day need that cash and I can assure you it won't be to help finance a new yacht.

For me, it's what allowed me to start my business and leave my full-time job so I could invest my efforts full-time into the new business. Most new businesses, naturally, don't start making significant revenue or profit for awhile. We're fortunate enough to have started a business that generated some cash practically from day one but still, making the money over time does take patience and discipline. Nevertheless, things would have taken even longer had I not been able to go full-time and I guarantee you that I wouldn't have been able to go full-time had I not saved money.

It's so simple... the concept, that is. Just save a little money and build a stash. Don't touch it, just keep adding to it. Keep most of it in cash and you'll know you're reaching a significant point when you have *at least* 9-12 months of living on the cheap stored in your stash. Some people suggest 3 months, maybe 6 months, but they're usually suggesting that for people who leave their jobs (or are fired or laid off) and need some cushion to find a new job. I'm talking about leaving your job for good and doing something else with your life to make a new living. Trust me, build cash, save it, and then be ready for that day when you'll need it. I promise you, one day you will need it, and you'll be glad you saved that money. Very glad.

I think that all of us work towards a better life, a better day. One of the ways to do that is to create wealth and one of the ways to create wealth is through technology. Technology, by itself, though, doesn't always automated every task and every obligation that humans require, like, say, plumbing.

The reality is that as we more ahead technologically, there will always be gaps in what we can automate. "Progress" is everything you can define as that which you can accomplish without thinking about it: Technology helps us get there but doesn't always solve the lower level details along the way.

If this is true, we have to accept the fact that some jobs, at least for now, will always require a human to do them. It makes me think twice about college since, technically, if everyone had a college degree (like 100% of the population), wouldn't you then need a master's degree to "get ahead"?

I don't know what this ultimately means... does it mean that we should all be getting degrees? Who is left to mop the floors? If we all get degrees, then are we all super-fantastic? If not, then don't we need Master's and PhD degrees? What happens to society if we then need to be in school for another 3-6 years? Can we assume our lifespans are that much longer?

My social democratic side struggle with relativism while my republican fiscal side thrives. Perhaps the point of human nature, no matter what, is that some people will always suffer and some some people will always thrive, no matter the circumstances.

The relatively new book by Dan Ariely called Predictably Irrational looks like a pretty good read. I have always had a fascination and curiosity with trying to understand how we really think and make decisions. There have been so many times in my own life that I (or observing others) that I have seen strange decision-making. The kind of thing where you scratch your head wondering how someone could reach such an utterly stupid decision. Sometimes it really is because someone is just dumb but that's more rare than you would think. More often, it is a circumstantial fact that you may not be aware of which drove the decision. Other times, it could be one of the traps described in Ariely's book.

Those traps are what interest me in seeing if decisions can really be made better if you become self-aware of your own natural human tendencies to be susceptible to them. Herding is a decent example. From the book outline:

• Herding: Assuming that something is good (or bad) on the basis of other people's previous behavior

  • Example: People wanting to go to a restaurant where people are waiting outside

  • Example: Going back to Starbucks because you recall enjoying yourself on your previous visit

    • At that point, you no longer ask yourself if you'd be better off with the cheaper coffee at Dunkin Donuts, or with the free coffee at your office

I like this one because it is something we can all identify with. In the first example, we somehow assume that a restaurant with a line outside "must be good." Who can blame us? I mean, clearly if that many people are waiting and the line extends outside, that restaurant must be good, right? Therein lies the predictably irrational behavior because while 8 times out of 10 that may be true, you're wrong 20% of the time. The area the restaurant is in might just be overly busy (nearby sports event at a stadium, maybe?). Perhaps the restaurant is physically just small and it is a Friday or Saturday evening (even if it is not a great restaurant, they're bound to fill up some tables if they don't have many to fill?). Maybe the restaurant actually has slow service (and bad food)? All of these are explanations of why just having a line outside the restaurant doesn't necessarily make it a great restaurant. Therein lies the question: Does noticing our tendency to make these assumptions help us make better decisions? I mean, if you know that the line outside the restaurant is not because it is good but because it is small (and not so good) make you a better decision-maker? In this case, a better decision-maker is one who is able to choose/find good restaurants. Obviously, the solution here is to locate additional facts about the restaurant before going there, in addition to the fact that it may (or may not) have long lines waiting to get in.

Predictably Irrational paints many examples of these situations and I reflect on my own personal experience when reading about these various "irrational" behaviors because I have been guilty of them myself. I just wonder if becoming more self-aware of them ahead of time would make me a markedly better decision-maker.

With so many different philosophical views on how to live life, no one can doubt the spectrum presented with the phrase, "what you do now affects what you do later" against "what you do now is changeable and/or reversible later."

It's true that many decisions made now can be changed later but often recognizing which decisions are changeable later are sometimes more ambiguous than you would otherwise know. To complicate matters, "what-if" scenarios about choices you didn't make and predicting their outcomes makes it all the more interesting. "What if I hadn't taken that job and took a different one?" "What if I had applied to that other university?" "What if I had pushed harder for that promotion?" "What if I had made that sales call?" "Wouldn't it be more fun to have taken that time off?"

Quite honestly, I believe that woven between the fabric of decisions is a slight element of luck, perhaps even fate (if you believe it). A small pence of luck does indeed have a role in life as in nature. The luck is really masked by the things you don't know that you don't know. This area of knowledge is the truly unexpected; the things we absolutely know nothing about and can't even describe to others that we don't know anything about them. The absolutely undiscovered area of reality; things that, hopefully, scientists are moving towards discovering bit by bit. Of course, the game be as it may is such that the more we know, the more we learn that we don't know. Luck, whether prescribed by some higher spirit or fate or not is the area of the unknown.

Walking into an area unknown (but perhaps opportunistic) is what makes things happen. Life is about bets and making choices that sometimes you don't always have all the facts for up-front. Risk really is the reality, if not the most interesting part of life. Risk is about trying to discern between the choices that affect what happens later and cannot be changed against choices that can be changed. Ideally, all decisions are somehow reversible or fixable later on but the reality is such that they are not.

The funny thing about that is that opportunity is what creates "reversible" decisions. Counter-intuitive, maybe, but opportunity and finding new opportunities is what allows someone to escape (or "fix") a bad decision or situation. In contract terms, it is all about your BATNA (Best alternative to a negotiated agreement) [Thanks Jeff], which basically means your substitutes or alternatives if something were to not work out as you thought. Just as if you were stuck in a house fire, having more doors in the room that hopefully aren't up in flames yet is a set of opportunities that might just save your life.

The lesson (at least for me) is to try and make decisions that create more opportunity. Straight-forward, you say? Not quite. In fact, making choices that create more opportunity often involve the risk factor that I mentioned. What I mean is that sometimes creating more opportunity means closing doors to existing opportunities and, yes you guessed it, making a bet that more opportunities will emerge down the road even if you forgo existing opportunities now. Economists would call that opportunity-cost but in fact, it is part of our everyday life, and should be embraced as first-class tool for doing the best things for ourselves. Think about the new opportunities you can make for yourself, not just the immediate or short-term value, the next time you make any decision.

I grew up in an upper middle-class family and learned upper middle-class (Midwestern) values. Being a 1980s kid means my parents and family were 1940s/1950s kids. I owe much of my knowledge and wisdom to my parents. I also owe some of my flaws to them, too. I'm not a prisoner of them, though. One gift I have that many folks don't know they don't have is the gift of being observant of those flaws.

Fixing flaws in yourself (whatever they may be) takes a lot of time and discipline. It's really tough to disambiguate them sometimes, not to mention just difficult to break habits. Difficult, sure, but definitely something worth doing. The interesting thing about fixing some of these flaws over time has been seeing new flaws emerge. We all change and much as we try to improve ourselves, we also introduce new flaws in ourselves. It's a by-product that perfection isn't possible.

That's actually the way of the world, not just the way each of us individually behaves. Fix one thing, and something else breaks or another problem emerges. Our dissatisfaction with practically everything is a function our being prisoner to relativism. Give a man a million dollars and he'll want more; Give a man ten dollars and he'll want more. Give a man pain and he'll want less. Give a man a lot of pain and he'll want a lot less.

The power to overcome relativism is adaptation and flexibility. In other words, live below your means. Don't buy the new car, don't buy the new house, don't go on that expensive vacation. If you are trying to save your money, the fact is you must sacrifice something. You really have to put off some of those expensive things in order to accomplish whatever it is you set out to do.

Living below your means is the same as living with an attitude of "you don't need much to live." I can't stand how often I hear about people fretting that they "need" a new car or "need" that new house or whatever the hell they damn well "need." 95% of the time, they don't need it at all, they just want it badly. Restraining yourself from wants when you should focus on your needs probably accounts for the lion's share of any successful person's life. Successful people focus on their needs and their wants become fulfilled as a by-product. People that focus only on their wants end up just treading water and often never reach neither their wants or their needs.

It really requires basic financial discipline and self-restraint to keep one's self from being overwhelmed with debt and unnecessary things. By ignoring a lot of those wants, your emotional stress will find itself a new home in some other schmuck.

There isn't a doubt in my mind about doing the things you love. They require virtues difficult to fabricate out of thin air: Patience, Flexibility, Adaptability, Preparation, Organization, Perseverance, and Practice. If you're wondering why you or someone you know is struggling to do the things they love or succeed at best, it's because they're lacking 1 or more of the above. It takes someone with a minimum level of all of those traits to be successful in any endeavor. I'm convinced that a lack in any one of those areas requires huge amounts in the others to offset any weakness in the lacking trait.

It's certainly possible to train one's self in these areas, to become better at them. Nevertheless, make no mistake: Future success is all about increasing amounts of chance opportunities and the more one can do that, the more one is exposed to higher level opportunities, be they based on challenge, financial reward, intellectual reward, or just fun.

This post, though, is about preparation. Most people, my family included, are somewhat in awe or surprised about my choice to start my own business. Not that anyone think it's bad (in fact everyone thinks exactly the opposite) but that a lot of folks' reactions comes off with caution and it isn't because they're concerned about me. No, I think they're concerned about themselves because most people love the idea of "self-employment" and "being your own boss" with such an affliction that they doubt their own abilities internally when they hear that someone else is running their own business. Of course, when they hear that, they assume that person is "self-employed" and "being their own boss."

The self-doubt people have about their own abilities is often exaggerated but then again, if you're seriously lacking one of the above areas, you're going to find trouble starting a business. Starting a business is straight-forward but certainly not easy to make successful.

As far as preparation is concerned, starting your own business should include making substantial amounts of savings before you do so. You should be prepared to live for 12-24 months with ZERO pay. In fact, 6-12 months is my own personal minimum even if you work a professional career. To add to that, I'd say your savings should never decrease below 6 months, but grow indefinitely to the point where you could not work for years and years and years straight and still maintain a suitable lifestyle. Most people may think this is insane: "How could I possibly save when I live paycheck to paycheck?" "Why would I expect to be able to get to that level when I only save $50 a week?"

The answer to saving is a combination of living below your means, saving, and investing your savings. Most people I've run into lack all of those traits and thus can never live long without a job. Fortunately for them, at least some semblance of a retirement plan is a way to stay disciplined about the prospect of one day living without a regular income.

The fact is, in all these situations, whether it be starting a business, living well without a regular income, or retirement, preparation always starts right now.

If you really do care about finding meaning and being successful in life, you must absolutely have mentors. I know of no successful person without at least 1 trusted adviser or mentor or teacher. I don't mean remembering a great teacher from grade school or university (though they can become life mentors in some cases), I mean relying on people who are successful themselves and are those you also trust.

It's not that you are not intelligent in your own right to be successful and do great things but mentors and teachers create a network and a balance that requires fairly little investment in exchange for great returns. A great mentor and teacher will challenge your views (even your aspirations) and you must find deep in yourself a way to understand what it is you're doing in life. For many, this is a most challenging task. After all, a mentor or teacher should care about you and will challenge you, much like a caring and loving parent. This doesn't mean that success is only rooted in "complex" things but certainly, doing rewarding things (especially financially) do require some talent and skill. A great mentor and teacher, especially one from the business world, will be able to help you understand the details.

What if you don't have a mentor now but want one? Well, you can't really go to Wal-Mart and buy one on the cheap so you're left to network on your own. Find people you share a similar worldview with. Who knows? Maybe they blog? If you email them and speak intelligently about the issues, perhaps you'll find someone who is responsive and willing to talk to you, if not help you outright. You'll never know until you do, though, so you'll need to try. The worst thing you can do is just sit there and fear rejection because frankly, rejection will happen, all the time, no matter awesome you are.

One of the keys to success involves finding a great mentor. If you don't have one (or two or three) and want to be successful, you need to find one, right now.

I wanted to put a few South Africa pictures up and here was really, really easy way to do it.

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Sean Eby