Category: Entrepreneurship

More Practice, Less Theory

Category : Entrepreneurship, Sports
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“What do we need to know this for?” I asked as my K5 teacher tried to tell me how to write more clearly.

My penmanship was pretty bad and the teacher realized that I was writing my letters backward.  Instead of writing some of my letters from bottom to top, I wrote from bottom to top.  I remember being annoyed and asking “what do we need to know this for?”  I could read my writing and so could the teacher, but I wasn’t following the rules.  In 3rd grade, I pretty much refused to learn cursive because I could print really fast and hated the new rules, again asking “what do we need to know this for?”  I continued this (probably incredibly annoying) refrain all the way through middle school: manually calculating slope instead of using a graphic calculator, diagramming sentences, specific types of bibliographies.  Even gym class wasn’t safe from my middle school ire.

Somewhere along the line, probably around freshman year of high school, I kept the questions to myself, but decided to tune out anything that I thought wasn’t going to help me later in life.  I loved reading about interesting things that had happened in real life and writing about current events, but hated theoretical or outdated lessons.  My favorite class in high school was consumer economics, an entire class devoted to balancing your checkbook, investing in stocks and personal economics.  It was real and I still use many of those skills I learned sophomore year.

I hated geometry because of the rigidity of proofs, hated calculus because I couldn’t understand why we had to do it by hand when we had graphing calculators to do it for us.  I hated memorizing the parts of a cell in freshman biology and reading about the Greek Gods.  It was boring and I couldn’t see the benefit later in life.  I haven’t used any of those “skills” since. This choice was the main reason why I got waitlisted at UW and almost didn’t get in, but I don’t regret it one bit.

When I got to college, I was expecting a change.  I thought we would learn how to succeed in the real world, but I quickly realized it was going to be more of the same inside the classroom.  I realized that if I was going to learn, I would have to do it myself.  After I bought ExchangeHut, I thought I’d try the business school.

After about half of a semester, I realized it wasn’t right for me.  Accounting 100 was rule driven and required you to do problems by hand.  After managing ExchangeHut’s accounting in Quickbooks for a few months, I couldn’t understand why we would figure out any of that stuff by hand.  Why not just use Quickbooks and save all of the trouble?  After the first four weeks, we started to learn about how Wal-Mart manages its inventory and how other large corporations prepare financial statements.  While I understand accountants need to know this stuff, I realized it was worthless to me.  I could use quickbooks for my accounting and if I ever got really successful, I’d hire an accountant.  Why bother?  I found the over reliance on theory to be extremely prevalent in business school classes.

I had a simple accounting question for ExchangeHut and asked four different friends who were Accounting majors with good GPAs.  None of them knew the answer, but they could sure solve the question on the exam about WalMart’s inventory system.  It happened again this year with an intern for Entrustet.  We have a finance major who earned a 4.0 from UW and is graduating in the spring.  He is clearly smart and learns quickly.  We have him doing some balance sheet work and other finance related tasks and he’s good at it.  He was working on our balance sheet and ran into a somewhat complex issue, so he went to his finance professor and asked for help.  The professor said “just use quickbooks, it’ll know where to put everything in the right place.”

At first I just laughed, but then I realized this was a microcosm of why students are having trouble adjusting the the real world.  I don’t think its our intern’s fault.  He just was never taught how to use quickbooks and as soon as he got to the real world, his professor says “use quickbooks.”  That’s what happens to graduates all over the country.  Rebecca Thorman’s post addresses how colleges are failing students, but I really think the over reliance on theory in the place of practice is what is hurting students.  Ellen Nordahl looks at the problem from the other side in her post about how students are unengaged.  Universities need to teach students more skills they will use in the workplace or they will not be prepared.  I bet if students weren’t asking themselves “what do we need to know this for” in their heads, they would be more engaged in their school work.

I am not saying that we should throw out all theory.  It is clear that you need to understand the basic theory in order to implement them in practice, but universities have swung way to far to toward the theory end of the continuum.

Schools are not the only place where the balance is out of whack. I ref a bunch of soccer each year and see the same basic problem.  I ref everything from U-11 to high school to semi-pro adults and I really enjoy it.  Each year, all refs have to take a recertification course that is supposed to refresh refs on the laws of the game and let us know about any rule changes.  It also gives instructors a chance to stress certain aspects of the game and teach better game management.  At the end of the class, everyone has to take a 100 question test and get at least a 75% in order to retain their badge. All USSF refs have to take this class each year, so attendees range from 12 year old first year refs to 70 year old guys who have been reffing for 35 years.  Sounds like a good system, right?

Wrong.  The test focuses on incredibly abstract game situations that would never happen, even to a World Cup level referee.  Here’s some actual questions from the test:

Q: An offensive player is dribbling toward goal, standing outside the penalty area.  A defender who is standing in the penalty area takes off his shoe and throws it at the ball, knocking it away.

Q: A player takes his shin guard off and slaps the ball with the shin guard in his hand.

There are a ton more, but you get the idea.  You have to know the rules to get these questions right, but they cause everyone’s eyes to glaze over.  It would be a test that would be great to do as trivia, but doesn’t really help a 12 year old new referee manage a game.

Because the test is so skewed toward situations that will never happen to you, the instructors have to teach to the test, just like teachers in middle and high schools do for state tests.  To make matter worse, the instructors use jargon heavy language instead of using concrete examples.  For example, at my most recent clinic, a kid of about 13 was confused about offside.  The instructor had said “as the assistant referee, make sure you stay with the second to last defender.”  The kid raised his hand and said “I thought it was the last defender.”  It was clear that the kid forgot that the goalkeeper counts as a defender, but instead of explaining it with an example, the instructor just repeated his sentence again, but more slowly and with more emphasis.  The kid didn’t understand until another ref at my table explained it to him with a diagram and an example.  There were so many other examples like this during the 8 hour course, my head started to hurt.

A huge percentage of kids quit refereeing each year because they get screamed at by coaches and parents.  The recertification classes should teach foul recognition (ie, when to blow the whistle and when not to), how to kick a coach out, how to deal with parents and the basic rules of the game, not what to do if someone throws a shoe at the ball or whether the correct restart after a chicken walks onto the field and knocks the ball over the end-line is a drop ball or a goal kick.  They should be showing videos of fouls from youth and adult games to keep people engaged.  A quick search of YouTube for “soccer violence” or “youth soccer red cards” brings up tons of teaching moments.  Additionally, FIFA makes rule changes each year, usually as a result of something that happened in an important game.  We could have watched videos of each situation to explain why FIFA decided to make the change, but instead we just read it from the book. Just like you learn how to succeed in the real world by doing things and learning practical things like Quickbooks, soccer referees learn from watching other successful referees work and learning from real life situations.

It is harder to come up with engaging, real life lesson plans than it is to teach theory.  Its also riskier.  I think educators are less likely to try to teach real life situations because it takes time to come up with more in depth lesson plans and it’s not the safe choice.  In The Wire (my favorite tv show ever), a teacher realizes that he can teach probability to his inner city students via dice.  The kids love it and learn because they can see how they will use this skill in real life.  I think everyone agrees that the US has to do a better job of preparing students for the future.  The first step is to stop teaching so much theory and start teaching things that students will use in real life.

Thomas Friedman’s Advice to President Obama is Spot On

Category : Entrepreneurship, Entrustet, Political Science & Economics
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From time to time, Thomas Friedman writes something that has the power to change lives.  So far, Friedman’s The World Is Flat has had the greatest impact on me, as it inspired my business partner, Jesse Davis, to start work on our startup, Entruset.  The ideas in his book are still reverberating through our company today, as we got our first mention in the press in today’s Washington Post and continue to work to solve the problem he identified in the book.  You can read the entire story over on our company blog in a post called How Thomas Friedman and The World Is Flat Helped Spawn Entrustet.

I think his latest piece titled More (Steve) Jobs, Jobs, Jobs, Jobs has the potential to impact the lives of even more people.  Friedman says:

The most striking feature of Barack Obama’s campaign for the presidency was the amazing, young, Internet-enabled, grass-roots movement he mobilized to get elected. The most striking feature of Obama’s presidency a year later is how thoroughly that movement has disappeared.

I remember getting inundated by posts from my friends on Facebook in the weeks leading up to the election urging me to support Obama, attend rallies or make sure to go out and vote.  The movement continued for the next few weeks, but has completely lost steam.  Even the most ardent Obama supporters among my friends aren’t engaged via social media anymore.  This in itself is pretty amazing, but not Friedman’s main point. He wants President Obama to re-engage America’s youth and doesn’t believe that going after Wall Street or other negative methods will work.  He continues:

Obama should launch his own moon shot. What the country needs most now is not more government stimulus, but more stimulation. We need to get millions of American kids, not just the geniuses, excited about innovation and entrepreneurship again. We need to make 2010 what Obama should have made 2009: the year of innovation, the year of making our pie bigger, the year of “Start-Up America.”

Obama should make the centerpiece of his presidency mobilizing a million new start-up companies that won’t just give us temporary highway jobs, but lasting good jobs that keep America on the cutting edge. The best way to counter the Tea Party movement, which is all about stopping things, is with an Innovation Movement, which is all about starting things. Without inventing more new products and services that make people more productive, healthier or entertained — that we can sell around the world — we’ll never be able to afford the health care our people need, let alone pay off our debts.

I am 100% behind this idea.  It makes perfect sense and would appeal to both sides of the aisle at at time when partisanship is at a seemingly all time high because of the fight over health care.  It would harken back to the Obama that many young people voted for, rather than the less than inspirational version of the President who we have gotten to know since his election.

I believe that entrepreneurship is our best hope for saving the US from its mammoth debt obligations.  We need to find ways to “grow the pie” rather than trying to raise taxes on a stagnant (or shrinking) pie.  I believe that all kinds of entrepreneurship are going to be necessary to solve our problems.  We are going to need traditional entrepreneurs like Steve Jobs and Bill Gates, but we will also need social entrepreneurs like Muhammad Yunus and the social entrepreneurs featured in Business Week.

I think that if President Obama were to make entrepreneurship a central portion of his presidency, he will find a huge groundswell of willing entrepreneurs who will be willing to help.  Friedman mentions National Lab Day and the Network for Teaching Entrepreneurship as examples of organization that are helping young people get interested in innovation.  Both programs would not be able to survive without older, successful mentors.  I think that entrepreneurs are willing to help out as mentors and young people are waiting to be entrepreneurs, but some are just waiting to be pushed.  Inc. Magazine contributor and author of Upstarts!, Donna Fenn says:

Over 75% of the entrepreneurs I interviewed for my book, Upstarts! said that they were very or highly likely to start another company; most had already founded two or more.”  She continues, “70% said their companies had a social mission. But make no mistake: they’re laser-focused on the bottom line as well and they understand why growing a profitable, sustainable company that creates jobs is a social good in and of itself. It’s pretty clear to me: this is a generation worth investing in.

Fenn‘s point is important because many startups are not only creating jobs and coming up with new solutions to problems, but they are also trying to make the world a better place.  If we can get more people to think with this mindset, the US and the world will be a better place.  So President Obama, please follow Friedman’s advice.  This is a no lose issue for you and the country.  You should be able to get support from both sides of the aisle.  You should be able to reconnect with an electorate that wants to support you, but has not because you have abandoned what got you into office.  Go back to the politics of hope, propose real solutions that everyone can get behind and see what happens.  I bet it will change lives.

Entrepreneur Profile: Justin Beck, PerBlue

Category : Entrepreneurship
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Note: This post is the third in a new series called “Entrepreneur Profiles.”  These posts focus on an interesting entrepreneur who I’ve gotten to know and hopefully provide a window into their business that you might not otherwise find in a newspaper or magazine.

Justin Beck is the co-founder and CEO of PerBlue, a software startup in Madison.  PerBlue’s flagship product, Parallel Kingdom, is the first location based game built for the iPhone and Android and has over 80,000 players worldwide.  Founded in January 2008 while he was still in school, Beck and his team have worked to create a successful game and an interesting business model.  Beck graduated with a degree in Computer Engineering from the University of Wisconsin.

Nathan Lustig: Hi Justin, thanks for taking the time to answer my questions.  Can you give me a brief overview of your company?

Justin Beck: Sure.  PerBlue was created when we started developing our flagship game, Parallel Kingdom, in January 2008. The first version was released in October 2008 and we’ve been steadily gaining players and improving the game ever since. The game is on its 3rd major version and we currently have over 80,000 players.

We have 7 more or less full-time people working for us and are growing nicely. We have also developed several other applications for the iPhone and Android platforms but our most successful app remains Parallel Kingdom.  As we’ve grown we have found our business to be building great multiplayer games for mobile platforms.

NL: What kind of background did you have to be able to start a mobile gaming company?

JB: I have been programming since I was 12 years old and love to do it.  I graduated from UW-Madison with a Computer Engineering and Computer Science Degree and I interned as a software engineer at Google and as a program manager at Microsoft on their ASP.NET team.

NL: Many founders of startups have some sort of an “ah-ha moment” when they first got the idea for their company.  Did you have one and what was it?

JB: I’m thinking that could be true for us.

I was working on a different startup with some friends from Google.  We were going to build a community bar and real-time chat for webpages as a script mashup, which was going great.  But when Andrew Hanson (my partner) and I were doing homework one night, we starting thinking about the next game we should make.  I was like, we should build something mobile, something people actually would play, simple, and we should throw GPS into it somehow to make it interesting.

From that conversation, we started with Parallel Kingdom.  It was about a month later when I realized the mobile space was really growing and I should invest myself into build a company around that space.  This was before the iPhone Appstore even existed.  I would say that was my “ah-ha” moment.  I just knew it.  It wasn’t a tough choice.

NL: What is the biggest reason you founded your startup?

JB: I love adventure.   I saw building a company as the next challenge in my life.  Two of my life goals were to work at Google and Microsoft.  I had been there and gotten offers from them, but this opportunity came up and the timing couldn’t get much better.  Many people assume lots of things about people who run their own business, many of these are explicitly not true with me.

I actually really like working for someone else and trying to make them as successful as possible.  I also really have no interest in the money.  I took a 2 year pay cut to do PerBlue.  So for me, it’s the adventure and challenge.

NL: What is the biggest unexpected challenge you had to overcome?

JB: I would say my biggest unexpected challenge was how hard it is to be a really good manager of a creative team. I am still working on it, but doing it well is very hard.

NL: What advice would you give to someone who is thinking about starting a startup?

JB:

1.       Play to win, commit yourself to playing the game and be willing to be very flexible in how you navigate the pathway.   Watch and model people who have built successful companies and learn from them.  (Watching failure doesn’t teach you how to succeed)

2.       Have a specific goal: we are going to do “this.” Drive yourself and your team to this goal.

3.       Have a schedule, (roadmap) that is a reasonable plan of getting to that goal.

4.       Commitment and talent are the 2 most important traits of your teammates.

5.       Stay focused.  You can only build one business at a time.  Choose your business and stick to it till its done.

6.       It’s a marathon not a sprint, pace yourself emotionally, mentally, physically

NL: What are three websites you check everyday?

JB: Not many. Pandora, Facebook, Google Analytics, PKStats, Bug Tracking is my honest list. But websites I check weekly bi-weekly when I am thinking about strategy or competitive research.

http://techcrunch.com
http://news.ycombinator.com/

I have my executives I try to watch.  Marc Pincus (Zynga), Eric Schmidt (Google), Jason Fried (37signals)

I like watching talks, Google Tech Talks are amazing.

NL: Do you have any funny stories or amusing anecdotes about starting or running the company?  Do people ask you “when are you going to get a real job?”

JB: There are lots of funny stories.  One of the easiest ones to explain is DB Death Day and yes it is a PerBlue holiday.  We had some problems with the database and issued a statement that:  “There was a massive forest fire in PK, resulting in every tree in the western hemisphere being burnt to the ground.”  Along with the loss of every GeoBuzz post.  It was a sad day, but somewhat comical looking back.

I have actually never heard that statement about getting a real job.  Most people are very encouraging.  Most people don’t understand what it takes to build a business. So that makes their empathy hard. I think the most negative person towards PerBlue was my recruiter at Microsoft when I turned down their offer and counter offer, but that was her job.

NL: What/who has been the biggest help to you and your company?

JB: My mentors have been amazing.  During PerBlue’s life I have now had about 7 mentors, as the life stage of the company changes the mentors I use and depend on also changes.  But I can’t imagine doing this without mentors.  My partner Andrew has also been an amazing asset, starting a company with a partner is an extremely wise idea.  Team is what makes the company, without the PerBlue team, we would have never gotten off the launch pad.

NL: What is the most fun part of running your company?  The least?

JB: I would say the most enjoyable parts of running PerBlue, are working with the team, building and solving big problems, having things work, and seeing players love the game and play it so much and actually see our business become successful.  I personally get a lot of gratification when I see my co-workers growing and become excellent at what they do.  I think the least enjoyable part of my job are the days when it seems like everything “breaks” or when things just don’t go like you need them to.

NL: Thanks for taking the time to answer my questions, you had some great advice.  Good luck in the future.

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Entrepreneur Profiles: Fashion Entrepreneur Sukara Sterling

Category : Entrepreneurship
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Note: This post is the second in a new series called “Entrepreneur Profiles.”  These posts focus on an interesting entrepreneur who I’ve gotten to know and hopefully provide a window into their business that you might not otherwise find in a newspaper or magazine. Sukara Sterling is a young entrepreneur and friend who started her own clothing boutique on State Street.  This post is about her experiences with life after her store.

HI! my name is Sukara Sterling and I am a young entrepreneur. I opened up my very own clothing boutique when I was 21 years old on famous State Street in Madison,Wisconsin.  I named my shop after me, calling it Sukara Sterling.  I owned and operated it for nearly 5 years, closing it in July 2009.  After closing my store, I searched and searched for the right job, and was offered many, but I really realized I really wanted to be my own boss.

People always ask me “how did you go from growing up in the country to owning your own boutique at age 21?”  It all started at a young age.  I was always interested in fashion as a child.  I grew up in the country playing outside with my siblings, exploring abandoned buildings and playing in the Maribel caves. Being the outdoorsy child that I was, I somehow also had an interest in fashion.

I can remember making my first garment, I think in 4th grade. It was made out of a farm print fabric (I’d like to bring that look back….hahaha). Anyway, from there I continued to have an interest in fashion and also started to learn more about business. I remember buying my first business book as a Sophomore in high school and bringing it to class with me.  The book brought a ton of attention and lots of questions from the my teachers and students. I told everyone I wanted to own my very own clothing boutique. I definitely got a mixed response.  Some thought I could never do it and others gave me their full support. (Thanks to those who did ;).

Next, I graduated from high school and went on to college. Let’s just say I picked the wrong school and switched colleges a few times. Never finding my niche at school, I ended up dropping out, even though I loved fashion and had been able to choose to major in fashion marketing.

I had two major problems.  First, I had to pay all my bills through school, leaving me with hardly any time to study. I had two part time jobs and I was also a full time student.  My first job was as a waitress.  I loved that job, the money was good, and I had a blast running around the restaurant with my co-workers.  Some of the girls are now my life long friends, they were also college students at the time, and moved on to other things.

The second problem, and this one was a BIG one was, in class I would sit and think, “gosh why cant I just do this in ‘real life’, and skip the stuff I don’t need?” Well, that is exactly what I decided to do. The second part time job I had was at a clothing boutique called Lupe. The women who owned it wanted to get out of her lease and I saw this as a great opportunity to start my own store by taking over her lease.

That is exactly what I did. After a few weeks of getting everything needed together including taking out a small loan, I inked my name on the lease with a hefty monthly rent. I really wasn’t worried about how I would pay the bills, I just knew that it was what I wanted. For me when there is a will, there is a way.

I changed the name of the store to Sukara Sterling, restocked the store with my own inventory and was on my merry way for a great learning experience. Let’s just say I jumped into this.  I didn’t know much about business and only had read a few books. I went with the flow and learned what I needed to run a successful business and grew with my new company. I learned to do everything including, HR, Accounting, Taxes, Managing, Operations and my favorite the buying. I remember going to my first show for a buying trip in LA and having no idea what I was doing. I just nodded my head and agreed acting the part, they bought it. It worked.

A few weeks later I was ripping open boxes of new inventory, and reaping the benefits of checking out customers and making some cash. As a few years went on, I got bored with being in the same place; I needed more flexibility in my life, not to mention the economy decided to tank and sales were down. I saw this as the perfect time to sell out my inventory and move on with new ventures. Owning and operating the store gave me tons of experience and exposure and enabled me to be qualified for some pretty sick jobs. I closed in July of 2009 and attempted to move to Los Angeles. I made some money, learned a ton, but it was time to move on.

My beautiful sister is also an entrepreneur, running her own jewelry label out in LA.   She was lovely enough to fly home and road trip with me and my dog Benson across the country from Wisconsin to California. In California I was lucky enough to find some great job opportunities even though California’s unemployment rate is very high compared to other places. I was offered an office job and a job as a store manager for a fashion label, but, let’s just say LA is not my bag, so I turned down the job offers.

I found that it was great to visit, but decided it wasn’t right for me to be living there. Among other reasons, oddly enough I needed rain, and there was hardly any rain in California and bunch of other stuff I didn’t love. I packed up everything and came back to where I am from, still in search of my perfect place to live.  I was comforted where there was fresh rain and green cut grass in good old Wisconsin. I drove solo across the states in 36 hours.  If you drive straight through, it takes 30 hours. So if you do the math, you can see I slept little and only stopped when needed for gas. I slept once for 4 hours in the beautiful Rocky Mountains, waking up to a shiny dusting of snow. I loved driving across the country solo, it gave me plenty of personal one on one reflection time and thinking time, which I love.

I applied for jobs in several different states when I got back.  I still didn’t know where I wanted to have my home base. I was lucky enough to get job offers in several different states from several different companies. I was offered a job in Boston, but wasn’t ready for Boston.  Got offered a job in Chicago as Store Manager for a clothing line that I love, but I finally realized that I did not want to live in a big city whether it was LA or Chicago. Finally, I took a job in Milwaukee, working as store manager for a large clothing retailer.  I saw this as a huge opportunity because I would be managing a store that did $7mm  a year in sales, and it was a different path for me coming from my background in boutiques. However, that wasn’t for me either.

I realized that corporate America is really not my friend and I needed more freedom and flexibility in my life. That is when it dawned on me that I need to be doing my own thing again, fully running my own show. I decided I would look for some consulting work and quit when I found that.

Fortunately, my experience has given me a leg up in the harsh world of trying to find a job. The work came to me faster than I thought. I went in for an interview and I was on the payroll 5 minutes after my interview ended and immediately started working that same day. I am now currently working for a company called Madison Avenue Worldwide. This awesome couple who I adore dearly has given me a great opportunity. They were looking for someone to help them start a retail store from scratch. That is where I come in. I was hired to do exactly what I know how to do. Start a retail business. It is the closet thing to working for myself that I can get right now.

My job is to implement all the procedures and operations for a retail store that was just started called Fashion Playground. I am in charge of basically starting the store from scratch and getting it running and profitable. I am doing all the public relations, marketing, HR, writing the store manuals and implementing all the procedures and policy’s etc. for store operations. It is a great concept idea for a store where the kids get to come in and be their own designer for their own garment. I was recently informed that after I finish up with my current project with them, I get to start traveling for their other company and will be doing marketing and PR which I am really excited about. The owners of this business are very lovely and have given me the flexibility that I want and positive feedback that I was hoping for.  This jobs gives me a good mix of entrepreneurship and the steadiness of knowing I’ll have a paycheck.

While moving around and trying to figure out where I should live I also realized that I need to be a citizen of the world, because I love traveling so much. I do however, still want a home base but am not sure yet where that is going to be. I am thinking a mountain town somewhere, perhaps Big Sky, Montana where my brother lives or the northern west coast in Portland to join my friend Mrs. Tedford.

I’ve also learned that its kind of fun not knowing.  I like to go with the flow and see what happens because it keeps life more exciting. The moral of my professional life story thus far is that I would ultimately like to be fully running my own show from a laptop and a cell phone from anywhere in the world. In order to get to this point, I need to work hard and get my own business’s going.

In addition to working fulltime, I am working on a few other companies that I am starting, designing a fall 2010 clothing line, representing a clothing line outside of New Zealand called Federation as the USA and Canada rep, working with global summit (a non-profit that I helped found) and doing other consulting on the side. Hopefully it will all will pay off so I can get the lifestyle that I want and ultimately strive for!

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