Cloud helpdesk service provider Zendesk today debuted on the New York Stock Exchange with the stocks seeing a 49% surge on their IPO price, taking its value to just under a billion dollars.
Svane is an enthusiastic, open guy and clearly passionate about customer service – a field that’s the ugly stepsister of modern business. As Svane himself says, “no-one ever gets the girls by working on the helpdesk.”
‘Beautiful and elegant’ is a phrase Svane uses to describe his software and it’s notable how many other founders of cloud services use those words about their products – Xero’s Rod Drury even uses it as the company’s slogan.
Like many cloud services, both Xero and Zendesk are still not making a profit and a big fat stage for a stockmarket listing is always a worrying sign that an IPO might have been undervalued.
At the moment though, the initial stockmarket success of Zendesk is a win for some nice guys.
Salmon though goes further in skewering some of the myths around startups; pointing out that with 90% failure rates not everyone can be ‘killing it’, yet few startup founders will admit their venture are doing anything else but crushing the market, despite the mantra of ‘celebrating failure.’
Possibly the most telling point Salmon makes is on the myth of the engineering entrepreneur, the truth is most coders value stability over the uncertain life in startup.
There is no reason whatsoever to believe that computer engineers make particularly good entrepreneurs. Quite the opposite, in fact: engineers tend to do quite well in structured environments, where there are clear problems to solve, and relatively badly in the chaos of a startup, where the most important skills are non-engineering ones, like being able to attract talent and investors. No Exit makes it very clear that the life of a startup founder is a miserable one, and that engineers are invariably happier when they’re working for a big company.
Life in a startup, or any small business, can be miserable if you don’t have the skills – and most importantly the risk appetite – for doing your own thing. This is a point often missed by those hyping the start up world.
Salmon’s piece is a good read and it illustrates that founding a business or taking the risk of working in a startup is not for everyone. It’s a timely reminder for anyone looking at liberating themselves from their cubicle and making the jump into self employment.
Earlier this week Microsoft co-founder Paul Allen celebrated his Seattle Hawks winning the Super Bowl while his former business partner, Bill Gates, still struggles to escape the clutches of the software giant they founded forty years ago.
After a long drawn out process, software giant Microsoft has finally chosen its replacement for CEO Steve Ballmer however founder Bill Gates finds himself firmly trapped in the company’s orbit.
Hoodie wearing Satya Nadella‘s ascension to Microsoft CEO was probably the poorest held secret in the tech industry having been openly reported for several weeks.
Nadella has a massive task ahead of him as the industry that’s been so lucrative for Microsoft over the past thirty years evolves to deal with the post-PC era.
Microsoft CEO Satya Nadella
How Nadella manages Microsoft’s transition will define his business career and tenure at the top job, it will also determine the company’s position in a marketplace where PCs running Windows are no longer relevant.
The biggest news from Microsoft’s announcement though was that Bill Gates will step down as Chairman of the Board and take a new position as ‘founder and technology advisor’.
Microsoft also announced that Bill Gates, previously Chairman of the Board of Directors, will assume a new role on the Board as Founder and Technology Advisor, and will devote more time to the company, supporting Nadella in shaping technology and product direction. John Thompson, lead independent director for the Board of Directors, will assume the role of Chairman of the Board of Directors and remain an independent director on the Board.
Despite leaving the CEO role over a decade ago, Gates finds himself back in a hands on role at the company.
The value of Bill Gates
It’s questionable what value Gates is going to add in the role of ‘Technology Advisor’ as Microsoft’s markets are very different to those the company was founded in and came to dominate in the 1980s and 90s.
For Nadella, it’s not exactly a vote of confidence from the board in appointing the company’s founder to hover over his shoulder offering helpful advice.
On a personal level this must be disappointing for the founder and former CEO as well in that his mind is on far greater topics such as eliminating malaria through the Bill and Melinda Gates Foundation.
Trapped by Microsoft’s gravity
Gates’ situation though is a classic example of a business founder who’s never been able to get out of the orbit of their business. Despite their best efforts, they keep being dragged back to give a helping hand.
Bill Gates’ dilemma though shows how tough it is for business founders to escape the gravitational pull of their creations, even when it’s as big a business as Microsoft.
Paul Allen showed how to step away from a business and is enjoying life, Bill Gates’ story though is much more typical for business founders trapped in the enterprises they built.
Looking foolish is one of the biggest risks when taking chances in business. It’s something every innovator and entrepreneur has to consider.
Venture Capital investor Mark Suster explains why he doesn’t mind looking foolish with his choice of investors on his blog today.
One of the toughest things in life is taking the risk of looking foolish in front of your peers yet that’s what the real high risk inventors, innovators and entrepreneurs do with their ventures.
Light bulbs and the telephone looked ridiculous to many at the time they were invented and no doubt the inventor of the wheel or the Neanderthal who came up with the idea of cooking meat in a fire both probably received a far bit of scorn when they told the others in their tribe about their idea.
While Suster is talking about ‘moonshot investments’, even the most modest venture is going to attract scorn.
There would be few people who decided to buy a doughnut franchise, establish a cafe or set up a lawn mowing service who weren’t told by some of their relatives, friends or colleagues that they are doing the wrong thing and they should stick to their safe job in their cosy cubicle.
Should someone want to change the way doughnuts are made or lawns mowed, then they can expect even more naysayers laughing at them.
In this current craze about ‘entrepreneurship’ it’s easy to overlook the real costs and risks of running any sort of business. Looking foolish is another of those risks.
Having a thick hide is another useful attribute when you’re investing, running a business or changing an industry.
Social media scheduling startup Buffer takes transparency seriously, will it help the business?
Many fine words have been written about openness, sharing and collaboration in recent years but few organisations really practice what’s been preached. An exception to this is social media service Buffer that takes openness to extreme levels.
The company’s CEO Joel Gascoigne believes this helps build trust in his startup, saying in his blog:
There are many reasons we default to transparency at Buffer, and perhaps the most important is that I genuinely believe it is the most effective way to build trust. This means trust amongst our team but also trust from users, customers, potential future customers and the wider public who encounter us in any way.
Building trust is one of the most important tasks of any business owner or manager; whether it’s with customers, staff, suppliers or investors and startups have a bigger task than most. So Joel is onto something with this approach although one wonders how long the philosophy will last as the company grows.
One thing that stands out in Buffer’s figures is how little Joel and his staff earn; while $158,000 is a good wage it isn’t the massive income that those who glamourize startups pretend founders earn.
Joel’s experiment with Buffer is an interesting experiment and it will be fascinating to see how long the company continues the philosophy of extreme transparency and how many others follow the example.
While it might not be necessary to be as open as Joel Gascoigne and Buffer, the idea of defaulting to transparency is one that many organisations – particularly governments – would benefit from adopting.
