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How to host your own Resistance Revival

Sara had the idea, right after the election, to get some friends together to talk about what we need to do now that the country’s gone upside down. We started out planning a dinner, and then it turned into the meeting we had yesterday — more than 80 people, offering support to each other in acting personally to make our country better. We called our meeting “Bowling Together,” a flip of the Robert Putnam book Bowling Alone.

We then noticed many other groups are hosting similar gatherings — on Twitter someone called them “Resistance Revivals.” So here’s how to host your own.

Pick a date and time (far enough away to give people time to plan to attend, like a few weeks) — we had our meeting last four hours.

Participants! Make a list of people you both trust and respect. Invite them. We used a combination of email and Facebook. Here’s the text we used to invite our friends. We wanted to set expectations about what kind of meeting this would be — about helping each other act, not about a group debate about what we should all do.

Logistics! Once you know how many people you’ll have, find a space to meet. (We used a local city parks-owned auditorium that anyone can rent.) Plan for food and drink; nothing stops social change like an empty stomach. If you want people to be able to make presentations, consider getting the projection equipment for that. Lots of our friends have kids, so we also organized childcare.

Speakers! (Optional.) Ask a few of your friends to speak, to “provoke” the group with a few suggestions for action. (We did this with six people: a housing advocate, a local elected official, an economist, an activist, the head of a media nonprofit and the head of an arts nonprofit.) You could also have your friends just share their own perspectives — we’re all peers.

Agenda! Decide what format you want to use for the conversation. Here is the slide deck sharing the format we used. We introduced the group (we’d done a survey to find out what people are interested in), and then had three one-hour sessions on different topics, each with a pair of speakers. In each section, after the speakers suggested some views, we invited the group to offer commitments of their own, or support for others’ commitments. No criticism allowed; there’s a different time and place for that.

Notes for later! Lots of people will make points you’ll want to remember later. We wanted to organize for a group note-taker and we ran out of time. The most important thing for us was to write down all the projects and groups people wanted to support. Here was ours:

Center for Investigative Reporting

Dream Corps

East Bay Times

Economic Security Project

National Domestic Workers Alliance

National Popular Vote

OUR Walmart

Restaurant Opportunities Center

U.S. Department of Arts and Culture

Yerba Buena Center for the Arts

(We also made a worksheet for people to fill in with their commitments. We’re unsure if it was useful, so we’re including it in case you want to use it.)

We sent a thank-you to everyone who participated the next day. We created a Facebook group for people to continue the discussion, and we’ll see where the resistance goes from here…

Economic security should be a right

I spoke recently to a group of former foreign ministers about technology’s effect on the future of work. I surprised myself by sharing the idea that economic security should be a right, in part because of the risks technology poses to work, and in part because it might unify us as a country. These are my notes.

I know little about foreign affairs — despite being the son of immigrants (who were themselves the children of immigrants) with my entire extended family overseas, and having lived or worked on several continents (including campaigning for the Olympics in my hometown of New York).

Yet, like many Americans, I know communities in my own country even less: I remember the first time my wife brought me home to her relatives in Wisconsin! And I’m ashamed to admit I’m more comfortable meeting in a foreign country with a stranger I’ve never met who speaks broken English — but is a professional in an office-based company, like me — than I am getting dinner with my Uber driver. Urban cosmopolitanism might cross national borders, but it splats into the brick wall of class.

Already today the job market in America leaves people feeling the game is rigged: you can work hard (two jobs! three!) and still fail to provide an acceptable life for your family (who you hardly get to see). A growing class of people works harder and harder to make an ordinary life while watching others ride further and further into the distance. Who wouldn’t rage at that ravine? In our own family, we have relatives who are as talented as we are — and struggle to make the math of their lives work.

People who work on technology (like I do) often herald it as the great equalizer — on the internet, nobody knows you’re a dog. The truth is technology could make this all worse. If we want our social glue to stick, we need to answer the question technology poses about the availability of work: will the automation and improvement of work done, today, by people, take away all the jobs? Will we all go the way of switchboard operators, with no new jobs to replace those lost? Will we be the horse to technology’s automobile?

Many technologists I respect believe our economy is teetering on the precipice of something that could destroy work as we know it: an acceleration in the powers of computers that will dwarf the advances of the last 25 years. Truck driving employs more men in America than any other profession. Imagine the self-driving truck is real, or the self-auditing accountant, the self-lending mortgage officer, or the self-checking cashier. Pick your needle; any one would be enough to pop the balloon. When software engineers estimate the arrival date of a new technology, it’s usually “two or three years away” — for a decade at a time. With today’s advances — and especially artificial intelligence — many estimated arrival dates pull closer and closer by the month.

This tune has played before… and always been a false alarm. The economy has always created more work than it’s destroyed.

Is this time different?

I have no idea — and the “is this time different” debate misses the point. If this time turns out to be different, we must prepare. That’s why Bloomberg and New America created the Shift Commission: to imagine a wider range of possibilities for the future of work and build a community of leaders to respond to whatever might unfold.

The Shift Commission has been gathering leaders in every sector of American society (business, government, civil society, faith, culture, technology, and more), held focus groups with truck drivers and people caring for the elderly, and pored over existing research (more than 100 other groups have done important, recent inquiries into the future of work). What have we learned?

Good jobs are few. There are even fewer where the employee feels like an equal partner with an employer. Without a power balance between employer and employed, jobs are less secure, pay less, and otherwise may fail to meet a typical person’s needs. The biggest companies rival the biggest governments in size and power — people often feel lost in those workplaces. While some of the smaller companies create wealth with a shockingly tiny number of employees — Instagram had 13 employees when Facebook acquired it for $1 billion — most small companies struggle to create enough good jobs. Tens of millions of people aren’t even seeking work.

The social contract is broken. When I speak with young people, they don’t understand we have one. My mom worked in one place for 30 years, has a pension, and actively works in her 70s. For my parents, the social contract tucked most support for the individual and the family— health, retirement, etc. — in the handbag of a long-term, full-time job. That formula has gone stale.

We also underestimate the effects of slow, tectonic shifts. Aging! The future of work is as much about older Americans as it is about “millennials” — the percentage of people 55 and over in the workforce has doubled in the last decade. Those older Americans tend to work in the jobs most vulnerable.

These crises of work defy labels of “left” or “right.” They are, as often, better understood in terms of young and old, city and country, or race. My cosmopolitanism binds me more tightly to someone in central India than in central Illinois — something I’d like to fix. I spend time with too few people over the age of 70, too few people different from me.

How we might respond

For us to tear down the wall of class, we first need everyone to be free from want. (I’m talking about roofs over heads, clothes on backs, not about the sunglasses from Snapchat.) We might need to decide that economic security is a right —it was Roosevelt’s third of four freedoms, and while we’ve done a reasonably good job with freedoms of speech and worship, we need to get working at want (and fear, don’t even get me started on fear). Maybe, under some government, we’ll be able to amend the Constitution to add it. To support all this, I’m contributing to the Economic Security Project, which will explore a universal basic income in earnest.

People prize stability. Maybe we’ll think about providing financial assistance on a timetable shorter than a year (as tax policies unfortunately do), and longer than just one phase of a life (like Social Security).

Second, we need to re-connect to each other as an American people. We — and I mean all Americans, not red or blue — need a new, shared, positive, forward-looking national identity and vision for our country. Our country has grown large and diverse, so we need to invest time to get to know one another again. Maybe we’ll need to change what we want to buy and live in a “human corner” of valuing the things we personally make with each other. Maybe we will treasure the virtue of all work, like caring for our elders and youngers, whether or not it pays.

Maybe we need a common life experience, a national service program that brings together young and old, black and white, urban and rural, atheist and of faith. An option for any American to take a year to serve the country, and a requirement for all people of a certain age to do so — including but not limited to military service — might be just the forced bear hug we need now. We could even make national service a prerequisite for earning a basic income dividend from the country for the rest of your life.

The idea of a social “contract” is itself a misnomer, because contracts imply exchange, which imply trading limited resources — and knowledge economies run on an infinite resource. Sharing knowledge is like sharing love; it enriches rather than depletes. We’ll need both knowledge and love as we re-invent a society free of crippling need and wrapped in a new American identity.

Thank you to the Aspen Ministers Forum and Secretary Albright for hosting the delegation that gave me an occasion to discover my own thoughts. And to Sara who has been seeing this all for years; I am a lucky man.

Why some people are great at school, but only so-so at life

Years ago, I had the experience of meeting Donald Trump. I worked in city government in New York and he wanted to buy a building from the city. (He pitched poorly, and totally misread his civic nerd audience, telling us over and over how Britney Spears had a whole floor of rooms at his hotel….)

He did say one thing that’s stuck in my mind ever since:

“You know that person who did well in school and then never made much of himself? I’m not that guy.”

As an investor in startups, I often see the very qualities that made me and others standout successes in school turn out to be straitjackets. The setup of school might even be conforming us to something less than our best selves.

As I meet founder after founder, some of the reasons are becoming clear to me. I summarized the things that school asks that are wildly different from the things that life, and founder life in particular, ask.

The same attributes that in school are features, in life are bugs.

If you have to choose, be good at life — school lasts just a moment. Succeeding in school can make your no-risk path more attractive — just be sure to ask yourself if that’s what you want.

Who should a startup hire first?

Avoid people whose skills complement yours! Consider the “cell division” approach instead.

Early hiring, yet another area where startups often reverse Muggle business logic. Conventional hiring wisdom says to add people who excel at important skills you lack. “I’m great at product and engineering. We need sales, though, so let’s hire a fantastic salesperson!”

It’s understandable. Founders start out doing everything. As you run out of time in your day, it’s natural to want relief. Wouldn’t it be nice to bring on a person who excels at the things you find unfamiliar? So you hire someone to do that new job — sales, marketing, community management, something. Magic!

You spend a while searching for just that special person, and then… disappointment. “I can outsell this person and I don’t even know how to sell!”

The problems with the “hire someone who brings new skills” thing are that:

People who are good at doing early startup stuff often (sensibly!) prefer to start companies — so there can be some adverse selection in first hires (unless you know them already and they join for you, you’re famous and they join for your reputation, they’re personally passionate about the problem you are solving, you are offering co-founder levels of ownership, or you get lucky).

Founders have so many innate advantages doing any job that you’ll get frustrated when you realize the (supposed) expert has no clothes. Even a portion of your time spent doing the new thing can be powerful, given your innate knowledge of everything in the startup, the intense motivation of your fused identity, and (let’s face it) your general founder greatsomeness.

It’s hard to assess a skill you’ve never practiced (it’s like getting a specialist doctor, you pretty much have no choice but to trust the referrals of others).

So, maybe you should do the job, at first, instead. Even if it’s only with a part of your time. How might you do that?

Solve the problem of freeing up the startup’s single most valuable resource — your time. Many founders will look for a head of sales before they’ll hire a virtual admin to handle minutia. That seems silly: your time is more valuable to the company than anyone else’s, so you should free it up in the least expensive way possible. Yes, all great founders have to handle some of the scut themselves — everyone is in the boat together. But too many founders pride themselves on shouldering the load for everyone else by doing the least valuable work.

If you’re a technical founder, hiring an engineer so you can focus on sales might be better than hiring a salesperson (at first). The founder often has to do a new job herself for the company to be great at it. The founder has to be the first salesperson, the first content marketer, the first X in many essential areas. (There is, of course, the risk of spreading yourself thin at the expense of doing your One Thing with excellence — as with all things startup, exceptions are the rule and you have to use your judgment.

In general, call this the cell division approach — because you first hire people to take on some of what you are already doing.

Once you’ve tried to learn the new skill, even if it feels awkward at first, you’ll more confidently hire a better fit for the job. The company will — more often than not — be better off.

To upgrade yourself, find an advisor who can coach you (or maybe one of your investors can do this, as we do from time to time in areas we feel we know well). Get a project-based contractor so you can stub your toe leading the work before you make a permanent hire, even if their work is mediocre.

When should you, eventually, hire the expert in some new skill?

When you’ve already been doing it and now have a confident feel for exactly what you want.

When it’s a crazyodd subspecialty (e.g., RF engineering) that you just know you can never learn, and you need to have on the team.

When it’s actually not that critical a skill to the company, even if it is necessary (why startups outsource finance and HR in the early days).

When you get big, famous, or rich enough to hire someone extraordinary without needing luck.

In general, though, consider hiring by cell division — bringing in a next person good at the same things you are good at, and handing her some of your work in that area — so that you can focus on practicing the next skill the company needs.

Thank you to Jeff LaBarge for reacting to an early draft.

Yesterday, I went to prison

With about a hundred other volunteers, I spent a day at Solano State Prison judging a business plan pitch competition.

Thanks to an organization called Defy Ventures that partners with incarcerated men to launch new careers and startups upon their release, I had one of those days.

When I told my son where I was going, he asked “Why would you do that?? They’re criminals!” Level III, almost the most heavily guarded inmates, no less. Cue Peanuts parent voice talking about paying your debts to society, getting a second chance, and growing by getting uncomfortable. (Later, I learned they’re actually not criminals. They’re people who committed criminal acts — an enormous difference, and a kindness of distinction I would extend to my friends so why not these men.)

I’d love to say I went there to be giving, but that’s not true. I went not to give but to get. I am tired of hearing the same catchphrases in the same meetings with people who dress the same (like me) and live in our monoculture. I want to see different. To spend time with people talking about something other than who is interested in buying Twitter. As I was on the way there (1% admission moment: yes, Ubers and Lyfts can pick you up from prison), I thought I’d get more out of the day than the prisoners.

Observations:

Most of the questions we raised in the business pitch discussions were, roughly, the same things we talk about with early-stage technology startup founders. OK, OK, I hear you about your service — where will you find your customers, though?

These entrepreneurs see, more clearly than Silicon Valley does, one of the most vivid business opportunities: serving the elderly. Two of the six finalists pitched businesses to serve older people — no other demographic is as big, growing as fast, with as much spending money, and needs as unique. These prisoners see the opportunity plainly in their lives. (Yet another reason we need a more diverse pool of founders, because diversity has better eyesight. Silicon Valley’s horse blinders to the problems of everyday people is our biggest incapacity as an industry, a flag Sara first waved in my face long before it was fashionable.)

Given that I invest in the future of work for a living, I realized I need to understand the potential of the incarcerated. On the way home, I asked one of our founders about hiring released inmates for his operations center. (There’s also a chance that policies I’ve been exploring, like a universal basic income, might unlock more unexpected magic from this group than any other.)

As I think on the day, boy did I get: a steroid shot of something I am struggling to name. These men, with their optimism, their relentlessness, their fellowship, their art, their pluck, made me proud to be a citizen of the same country. They talked about their real incarceration, an “incarceration of the mind.” I bang against my own bars now and again. And again. We all shared in the remorse and, sometimes, shame we carry for acts we have yet to make right.

I left believing in their futures. Yes, I barely understand the upside downs and backwards of our criminal justice system — I can’t even imagine.

Yesterday’s Hamilton verse, coincidentally, nailed it:

Where are you taking me? I’m about to change your life Then by all means, lead the way

— Your Daily Hamilton (@HamiltonaDay)

October 5, 2016

If men like these define our country’s future (and next year more of them will be able to vote), we’re gonna be OK.

Thank you to David and Gina for the invite. All that and a good time with good people. It was a gift to open up to friends I often see about the parts of our lives we rarely discuss. I hope they share what they learned, so we can make this more than a day we tuck away. And thank you to Defy for, you know, defying.

More to learn about the future of work

If you want to do some thinking on where work is going, you got the gift this week of more grist for the mill…

Pondering the big policies

Andy Stern, the former president of SEIU, wrote the deepest treatment yet of the reasons for a universal basic income in Raising the Floor. Whether you are a u- or dystopian, or just bracing for twenty years of discussion about the future of work, the book is worth a read — surprisingly, Andy, who for all intents and purposes led the American labor movement, agrees unions play a weakened role in that future.

Understanding the future of work in a new way

Together with New America, Bloomberg announced our joint commission — The Shift Commission on Work, Workers, and Technology — to do proper long-term scenario planning about the future of work.

Fortune gave us room to lay out how we think the future of work should best be understood in Anne-Marie Slaughter and my “Memo to CEOs: You Can’t Predict the Future of Work.”

While some trends like the aging workforce are clear, it’s the uncertainties that loom largest. Take those job-eating robots, for instance: One prominent recent study estimated that 47% of American jobs are at risk of automation, while another study pegged it at only 9%. And it’s equally uncertain how many jobs might be supported, enhanced, or even created by technological innovations. Technology affects work in unexpected ways: One technological innovation, the oral contraceptive pill, supported the dramatic increase in paid employment for women in the latter part of the 20th century.

(I’m honored to co-chair the Shift Commission with Anne-Marie, the President & CEO of New America, and a person whose writing Sara and I have read, discussed, and cared about for some time.)

Our scenario planning exercise, which will include leaders from every discipline connected to work, and especially technology, business, policy, civil society, and academia, started with research — to get us all on the same page as to the facts. Jed Kolko, technology’s favorite neighborhood economist, presented the highlights of his work earlier this week — simple and substantive thanks in large part to design help from Rebecca Bortman.

What Bloomberg Beta believes about the future of work

Last, physician, heal thyself: since our venture fund invests exclusively in work’s future, we need to have a view on the society our companies will enter (and, we believe, shape). For the first time, we described our beliefs on where work will go. I trust our views will evolve as we learn more from the Shift Commission and the many others now investigating the future of work.

Toward a more truthful resume, starting with my own

Imagine picking up a novel at the airport, reading through it, and getting to the end before realizing, “Hey, only good things happened to that person. Everything they touched seemed to go right.” You’d toss the novel; you got something phony.

Yet every resume, every LinkedIn profile, does exactly that — selects only the good, to give a picture of a person — and tries to pass for truth.

(This was the case back to the first known resume, written by Leonardo da Vinci in 1482 — surprisingly little has changed since then.)

Recently, an academic “CV of failures” made the rounds — it turns out that seeing all the things a person missed is just as (more?) illuminating than seeing their hits. There was also something to the exhale of thinking, “I can share that? And people will still work with me?”

Inspired by that resume of bombs, Chunk’s blender-induced confession in The Goonies, and the victory-through-self-destruction finale of 8 Mile, I tried writing my own CV of failures. (It was, needless to say, longer than my regular resume.)

Our venture fund, Bloomberg Beta, invests to make work better and we believe the only way to create trust at work is to be truthful and transparent — so why not start with my own story.

See, all resumes are spin. If everyone expects us to spin, then there’s a dilemma where the first people who “get real” can suffer because they look worse by comparison. We get only the truths we deserve, unless we start to make it safer to be more honest. So I took a try…

Problem is, once I finished my failureroll, it was just as manufactured as the one that only selects the good-tasting jellybeans. (Even failures are spin!) Worse, it was a gimmick — and a self-indulgent one.

So I tried something even harder: rewriting my actual LinkedIn to include both successes and failures, choosing the most important moments, good or bad.

I now see that no resume is truthful without some telling of the important setbacks, yet-to-achieves, challenges, and failures.

What did I learn writing my own? For me, being truthful at work means sharing my harebrained schemes, and I hope that I can make it a little bit safer for others to share their sideways.

It’s complicated, though: for many people, it’s clear that a strict separation between work and regular life is better, and I respect that. There may also be many jobs where any revelation of an issue can limit your career growth — I had to have some successes before I felt comfortable advertising my failures.

Personal stories might also be much more complicated for others to share: I’m a straight white male who went to good schools. Yes, my parents were immigrants who arrived in this country with no money, connections, or legs up — but they were highly educated (my father trained as an architect, and he worked his way up to designing the Limelight, before he passed away when I was 12, and my mother was an urban planner who became a three-decade nonprofit executive).

So in a way, it’s easy for me to reveal my life story. For others, society may be much more judgmental (and services that explicitly obscure someone’s personal background may be valuable for reducing bias in hiring).

We should all be thinking about how to make it safer for people to be more truthful at work —we protect ourselves with the masks we wear, but they can also sear. If people want to remove them, we should try to make it safe.

(And, subject for another day, really we should evolve away from resumes that are about what we’ve done, and toward resumes that are about what we can do — our skills, our values. That would be a much longer post.)

Turning on the headlights for mobile

The form of mobile apps has had a challenging go of it — hard to find users, hard that so few even download apps, and until recently almost impossible to develop a product with any regular feedback. So apps serve either only the most committed users (who are willing to jump hurdles) or those who lack another choice (as, for example, with apps that need to access the camera easily).

Mobile app developers work to build a version of their product “ready” for the app stores, without much user contact at all. They update their apps only every so often, and have to squint at the indirect shadows of user behavior to know if they are on the right track. Mobile app developers have worked to bring their visions to life — games, productivity tools, new forms of expression, and more — while driving down a road at night with the lights turned off.

On the web, we now develop with tightly-integrated feedback tools to gather user reactions, almost-instantaneous updates to live product so frequent that the difference between build and release is shrinking to nil, and all-baring diagnostics that make finding issues fast.

Mobile apps can access more of the phone’s powers than a website, they can be more fluid, beautiful, and responsive. Imagine how much better mobile apps might be if their developers could hone them, as they build them, with real users.

In our fund’s efforts to make work better, we see inventors and creators in many trades—journalists, scientists, artists, business leaders, software developers — reimagine everything about their craft when they find new tools. Business leaders now communicate frequently and openly with employees all over their companies. Artists refine algorithms that wield their pens. Journalists atomize stories into thousands of parts.

So mobile app developers will also remake their work — and buddybuild, one of our portfolio companies, is lighting up one of the roads to make this possible. With buddybuild, a mobile app developer has continuous integration, testing, and feedback that feels closer to the web’s immediate gratification. So mobile app developers can quickly harmonize their products with the ways their users use them.

Now we’ll get to see how powerful mobile apps can become. The headlights will turn on as the car drives down the road, so now it can both adjust its course and accelerate safely. Today, buddybuild announced it’s taken another step by raising a new round of funding and recruiting Mike Abbott to the cause. Here’s to the new visions brought to life, faster, by the next wave of mobile app developers.

Early startup pitches are like movie pitches, not business pitches

Often times, like any investor, someone comes along with a still-in-formation startup idea and asks me what I think. Unlike many investors, I struggle to answer — maybe the question is broken.

Startups, at the day-zero phase at which we often invest, refuse to obey the laws of regular business physics. Still, we insist on thinking of them as “little businesses” — with strategies, plans, and ways that look more or less like the established companies about which so much has been thought and taught.

Take the funding pitch of even a day-zero startup: Our market is big! We have a strategy to beat our competitors! If you were hiring founders for this startup, ours would get offer letters! Even the fundraising pitch presentation form — slides — follows the format of big company meetings.

Is there a better way to think of it? I’ve seen one example, when I worked in media: though I’ve never greenlit a movie, I’ve been around filmmakers and the executives who finance their pictures. An early startup pitch might be more like a movie pitch than a business pitch.

In a movie pitch, the one-liner of the concept is impossibly little grist for feedback. A treatment of a few pages might matter, depending on who wrote it — or maybe if it’s a wild outlier. “SaaS to help architects design buildings” becomes, in this analogy, “a romantic comedy with people who met in college and are reunited years later.” The question is, how to tell if it be When Harry Met Sally?

Conversely, some of the best-performing movies sound absurd when all you have is the concept. “Tall blue aliens in space who re-enact Pocahontas except one of the aliens isn’t actually an alien, but a human controlling the alien.” Is your startup Avatar? Or is it Ishtar?

(Is early feedback really that valueless? How do early ideas harden into strong companies without the oxygen of feedback? Some founders just get building, and let their code or their customers do the talking — many of the best startups ever skipped past the concept stage before they ever asked for feedback. And, yes, it’s wonderful to have a nurturing response that helps founders discover the kernel of something new. The trouble starts when you begin evaluating an idea too soon.)

So if a startup pitch is like a movie pitch, how do movie producers figure out which movies to back?

It depends on who is doing the pitching. [Edited: My friend who actually makes movies explained this a bit. It turns out, even movie pitches aren’t really about the plot concept! The plot is less the focus than the emotional arc of the story, the reason to care about the characters. Novices tend to get in the specific weeds. They also get caught flat footed on that age-old movie and startup question… why now?]

If you have yet to make a film, maybe you show a reel, or have a short… what little piece of this have you made, and does that make an investor excited to see the rest? That’s one reason demos are so important. It’s a piece of the thing, vs. a description of the thing. Maybe you describe exactly how you’ll cast it, or paint a picture of how the cinematography will work, enough to excite your backer. Some of our openly-posted criteria for investing describe similar signals for day-zero startups.

The flipside of this: who are the investors in an early movie pitch? Early startup investors might be more like Hollywood movie producers or A&R people in music — listening to the tape! — than they are like Actual Businesspeople. The best ones just know what a few bars of good jazz sound like when they hear it.

The animals in the open source business model zoo

Docker, Mesosphere, Cyanogen, Elastic, Cloudera...

These days, it seems difficult to find a successful new open source project without an “attached business.” (There are many past open source projects that succeeded without a single business alongside them, and they become so important that their ubiquity makes them almost invisible: Apache’s web server, the Linux kernel, OpenSSL, GNU Emacs, perl, python, and many other programming languages, among others.)

As open source projects spread and become essential in every business, I wonder -- why and how do new open source software projects often seem to twin with valuable startups?

At Bloomberg Beta, we invest in companies that make business work better – and it’s clear that’s impossible without a view on how open source software breeds businesses (and how it breeds new ways of thinking about business, though that’s a subject for another time).

The birth of businesses around open source projects is surprising because there’s a myth about open source – that it’s not owned or directed by anyone, that a “loose band of hackers” can make something that competes with the biggest corporations in the world. So how can open source projects spawn startups?

The myth about open source is (to some degree) real: the eyes (and keystrokes) of the many can make and maintain better software, faster, than closed software development. So open source often beats out proprietary software. Openness breeds trust – the same reason we open sourced the full investment manual for our fund. (It’s hard to imagine what Adam Smith would have thought of the capitalists sitting on top of a freely-offered product that anyone can copy and use for themselves, built by a coalition of the compensated and the volunteer.)

The reality, well known to technologists, is that (successful!) open source projects are led with a strong hand, and the most frequent contributors are most often paid to contribute to the open source project as their job (e.g., 80% of contributors to Linux are paid). The various open source licenses carefully parse aspects of ownership – and some licenses are more open than others.

So, open source projects twin with valuable startups because -- without those startups -- some open source projects may lack oxygen (in the form of paid contributors, and users who care about the development of the open source project). So then the question is, if successful open source projects may thrive when they’re twinned with valuable startups, how exactly does that work?

Docker is re-introducing many questions about the relationship between open source software projects and viable business models. (Look at Mesosphere, Cyanogen, Elastic, Wordpress, and Cloudera for other recent examples – and of course Red Hat as the pioneer.)

Good open source projects are fast, have active and engaged user bases (often developers building for themselves), iterate quickly in response to needs – just like a good startup.

For many years, the assumed business model of companies commercializing open source was enterprise services. Red Hat famously made it easier for large corporations to use the Linux operating system, as it helped them deploy and maintain the system more rapidly and more efficiently than they could do on their own. That model, with its reliance on selling time to service software, is hard to scale.

(The focus of this piece is about startups. Plenty of established technology companies use lots of open source software in meaningful ways, some -- like Bloomberg, the backer of our fund -- contribute to it and gain better software, a stronger reputation with talent, and are just doing the right thing.)

Surveying startups commercializing open source technology today, we may be seeing experimentation at a new clip. It’s too early to say which will work better than others -- it’s early days for this. I see two types of models...

Wide Models

These add value to the broad swath of the community of a given open source technology by building better infrastructure, making it easier and more convenient to work with the technology (making it more accessible for a wider array of developers), offering differentiated features, etc. Basically, these tools make it easier, faster, and better for companies or developers willing to pay to use the open source technology.

Narrow Models

These focus on concentrating the potential of the specific open source technology around a specific business use case. These startups are born of the opportunity that arises when a specific industry or enterprise function could find significant value in the open source technology, but the associated community doesn’t necessarily have the interest or incentive to focus on that use case. Entrepreneurs fill that gap with their own modified version of the project designed with that specific type of user in mind.

There are many variations, and the list below is overlapping, imperfect, incomplete, and will invite (in success) many a rant. Nonetheless here is a walk through of…

… The Zoo of Open Source Business Models

Wide Models

The “Cleaner Shrimp”

aka Enterprise Service (they make it work for you)

Example:

Open source technology: Linux | Company: Red Hat

In many ways, this is the granddaddy of the open source business model. Take freely licensed software and build a slate of services around implementation and support that allow enterprises to get that open source software running, dependably.

The “Lioness”

aka Convenience SaaS (she goes out hunting)

Example:

Open source technology: Elasticsearch ELK stack | Company: Elastic

Software-as-a-service has revolutionized how software is deployed in the enterprise. In response, many of the modern open source business models are based not around on-site deployment and servicing, but around deploying and supporting the open source software through cloud based service(s). A perfect example is Elastic (formerly Elasticsearch), which helps business add a search and insight layer on top of their data and is available either for free or deployed as a service for a fee.

The “Cheetah”

aka Time-to-usefulness (you can do it in your own, it’s just harder)

Example:

Open source technology: Apache Mesos | Company: Mesosphere

Sure, you can set up Mesos on your own to manage your data center resources as if they were a single environment. If you’re in a corporate environment, though, there will be lots of pieces you’ll need to build to make it work. So it might be faster and less expensive to let Mesosphere do that for you.

The “Peacock”

aka Premium Features (adds on the glory)

Example:

Open source technology: Wordpress | Company: Automattic

Open source communities chose their own direction, and don’t necessarily develop the set of features that a commercial company layered on top would want to offer business customers. Given that, some companies give paying customers access to premium features. An example is Automattic, who in addition to offering a “Lioness” SaaS-style deployment model, offer premium templates for customers who want to customize their blog.

Narrow Models

The “Finch”

aka Use-Specific Fork (the beak fits the food source)

Example:

Open source technology: Linux | Company: Cumulus Networks

The beauty of open source software is that it can be refined and modified for specific use cases. One of the business model opportunities is to fork a piece of software and customize it for one of those use cases. An example might be Cumulus, which is a Linux solution specifically customized for data center & network hardware. Sometimes the commercial project can become more successful than the open source project (CouchDB was at risk compared to its commercial variants), putting the underlying technology at risk.

The “Remora”

aka Add-On (a company extends an open source project to make it their own)

Open source technology: git | Company: GitHub

One of the most popular modern open source business models is to sell companies a private version of the software, so they can use it within their corporate (organizational or server) walls. This is the model for one of Silicon Valley’s most essential companies, GitHub. GitHub has some “peacock-y” aspects -- now-essential concepts like the pull request are missing from the underlying open source technology.

As our industry develops, we’ll likely develop better words for these models… share your feedback on this list, and let’s try to invent business models that help make open source software even better. I have skipped comparing and contrasting the merits of these models -- their merits as companies, in terms of community support, or otherwise.

Once we see how open source works in software, we’ll see it elsewhere: Bloomberg open sourced the code for Paul Ford’s feature-length article on code itself in Bloomberg Businessweek, for example. Our investment fund open sourced our previously-internal operating manual for our fund, inspired by the Series Seed financing documents. Open source software and communities give us a model of a clear hierarchy of leadership over a project, with contributions open to anyone, and the results of everyones’ labors shared broadly. That way of working has many implications for open source beyond software and into the heart of how business (and much other human activity) gets organized.

Thank you to Nathaniel Whittemore for helping me get started on this too many months ago, and to Jesse Vincent, Charlie Robbins, Justin Erenkrantz, Kevin Fleming and others for helping me learn the very beginnings of what They Know about open source software and communities.

The corporation is dead, long live the corporation!

Companies are smaller now. They’re also… bigger.

It seems like smaller and smaller companies are lifting bigger and bigger mountains, at least in startopia.

As it gets easier for a small team to do more, standing on the shoulders of giants in infrastructure, communication, payments, data, and other areas, are we seeing the beginning of the evaporating corporation? Will organizations just get smaller and smaller until, one day, poof? Will we work, in the future, for companies of one?

The logic would go like this: Why do corporations exist at all? People could work independently and coordinate their activities with one another, buying and selling services as needed (“You want that weekly update on sales? Sure, $1,000.”) The answer is that it’s too complicated to make it work in practice or, in economish, “transaction costs.” Corporations are formed because it’s less expensive to transact with someone within the same company — you trust each other, your incentives are more aligned, you have a common language and expectations, among other factors.

As those transaction costs go down — reputations are shared online, so people trust each other, marketplaces help you find ever-more granular business services, communication becomes free — the corporation could disassemble into its components, with one small firm (or even a person) doing each task and coordinating with others.

The trick is that those same falling transaction costs can also make it easier to do business within a company, too (Intranets instead of employee manuals, Slack instead of a phone tree, etc.) — which might make some companies bigger as they’re capable of managing bigger staffs.

So those same falling costs of communicating both bring down the cost of internal coordination (which might, all other things being equal, make firms bigger) and communication between firms (making firms smaller).

In the data, which is it? Are companies getting bigger or smaller? Both.

Most companies are (a bit) smaller now

Average does seem to be getting a bit smaller — at least for the last 10 years or so. In 2001, a firm had just under 23 people on average, and a decade later, just under 22. That’s a modest shift (and might be hard to separate from other effects, like changing composition of industries), especially given all that happened in the world in that decade — it’s when you look closer, you can see the change may be more significant.

When you exclude the biggest companies (and we will see why that is relevant in a moment), the smaller ones are now a third smaller than the same set a decade earlier. For all companies smaller than 500 employees, the average firm size was roughly 19 in 2001, and roughly 13 ten years later. You can find the raw data here.

The median firm size has always been small — fewer than 4 people, which has been true recently and a decade ago. Though the percentage of all firms that have 4 or fewer people went up (by a hair) over the most recent decade for which we have data.

The tail is starting to stretch a bit longer, as it is in so many industries disrupted by modern technology. The flipside is that the head is getting taller…

The biggest companies are getting (much) bigger

In 2000, the biggest company in the US (by number of employees, and several other measures) was Wal-Mart — with 1.15 million people on staff. By 2012, they’d almost doubled in size to 2.2 million people. (The next three on the list went from having 300,000 employees or so to 400,000 employees or so, a significant jump.)

The average size of companies with between 500 and 10,000 employees — large companies by any standard — also increased, by roughly 35% during those 10 years (to, near as I can see from the data, roughly 2,200 employees on average).

Because those large companies are so so big, most people now work for a company with more than 500 people — and in the year 2000, that wasn’t the case. So even though the average company is now (a bit) smaller, more people work for large corporations because the biggering ones are getting (so much) bigger. Math.

And while it seems that market forces, management styles, and technology may be bringing company size down— they are also enabling the megacorporations to grow to sizes previously inconceivable. Will those trends continue? It’s hard to see reasons why they won’t, though I’m open to learning more.

This piece originally ran in the What’s The Future of Work publication on Medium.

The O’Reilly Next:Economy conference gave me the excuse to make some progress on this research.

Thanks for a review from one of the most direct and practical numerate people who I know, Jed Kolko (who reminded me, among other truths, that (1) there are different companies in each year’s set of data, so companies aren’t exactly shrinking so much as the companies in one year’s set are smaller than another and (2) that it’s just as remarkable how stable the distribution of firm sizes has been over the years, all revolutions considered).

And to research from Wonder — fast, phenomenal — for literally every fact in this piece. All your errors are belong to me. #proudinvestor

Basic income could enable a new level of innovation.

The Washington Post is doing a series on basic income. I’m still learning about it, and shared my perspective on the area closest to home -- I think it could be a boon for early-stage startups.

Are nonprofit boards better than company ones?

A few weeks ago, I sat down with a group organized by Wishbone, a nonprofit that funds student scholarships, to talk about how to make nonprofit boards work. They gathered a wonderful group (I played secretariat, mostly), and I’m sharing their insights.

I’m a skeptic on whether early-stage boards are useful. They were originally created as representative bodies for fractured groups of owners, and now we often ask them to be advice-offering, work-doing bodies for executives. They’re inconsistent, at best, at serving that purpose.

Maybe, though, it’s different — and better — for early nonprofits. (I’m on the board of two nonprofits: CodeNow, a new organization that teaches underprivileged kids to code, and the Center for Investigative Reporting, a longstanding investigative newsroom that funds research into abuses of power.)

How are nonprofit boards different than company boards? Nonprofit boards…

Volunteer to do real work that, in companies, gets done mostly by paid staff, like financial planning and fundraising.

Are often continuously funded personally by their board members, year in year out.

Rarely if ever pay their board members (unlike companies where board members often represent shareholders as part of their job as an investor, or receive cash or equity in exchange for serving on a board), let alone reward them personally for smart risks taken by the organization.

Are often much, much larger than company boards, which can have functioning boards with as few as 3–5 people. Many nonprofits, once they get larger, have tiers of boards (local ones, national ones, fake ones for giving people a title to affiliate themselves, real ones for evaluating and overseeing the executive leader).

Especially in early nonprofits, board members must do real work for the organization to succeed. As my friend Vincent Pan, who runs a community-based social justice organization and has served on a dozen boards, says, at the best times the board feels like a department, doing work for the organization. (Maybe, because nonprofit boards do this out of necessity, nonprofit founders might make better board members for companies than businesspeople do!)

Work is 10x better than advice. Nonprofit founders, like company founders, are constrained by their time to execute, not their ability to ideate. (They roll their eyes at board members’ well-intentioned advice just as often as startup founders do.)

To do work, board members need to be both informed and excited. One issue with that: board members need to know the truth of what’s happening, which can be invigorating (wrestling with a challenge) or deflating (wrestling with too big a challenge).

The danger is that board meetings become kabuki theater, elaborate productions to make board members feel engaged without influencing the organization, open their wallets, and tell their friends to do the same. Nonprofit founders, like startup ones, dance a “how much truth to share” dance more often than anyone would like.

If you’re on, or running, a board — company or nonprofit — some thoughts:

As with all boards, it’s more about board members than board meetings. Meaning, give and get value from the individuals involved, vs. focusing on making the once-every-so-often gatherings valuable. Ask your board members to do things for you between meetings (you should do the same on for-profit boards). For board members, attending meetings is necessary — but insufficient. You need to do real work outside the meetings.

There are better ways to deliver information than a group lecture. Send reading in advance and expect board members to have consumed it before the meeting.

Explicitly separate the “job” of the board (governance, hiring/firing the CEO) from the “work” of the board (helping the organization succeed by opening contacts, dollars, wisdom, etc. to the organization). Tasks, not meetings.

Nonprofit boards can sometimes separate these roles into two boards: a “real” board (a small body to make the few decisions that need to be made, and wrestle with hard issues) and an “involvement” board (a group that gives elite supporters a role, a forum to meet each other, and a channel for the information they need to be advocates).

It does seem like nonprofit boards, in part because they’re more necessary to the health of an early nonprofit, might be more useful, too. (If done right!)

Thank you to Wayee Chu and Beth Schmidt from Wishbone for gathering this group, (separately) Ryan Seashore of CodeNow and Phil Bronstein of CIR for suffering with me their boards, and Vincent Pan for influencing my thinking on how leadership works (generally, and at nonprofits).

Once upon a time, if someone asked how your company was organized, you’d give them an “org chart” -- a page with lots of boxes on it. One box for..

TechCrunch was kind to run this piece I wrote, inspired by our investing in making work better, on how to think about the new ways companies are organized.

Why journalists might make great investors

There seem to be clear reasons why being a journalist would make you a terrific investor http://t.co/I30Ru7orxB

— Roy Bahat (@roybahat)

June 7, 2015

Someone asked me to elaborate--fair enough!

Hard things, I’ve found, about being an investor are:

Separating truth from noise, noisy noise noise

Building real relationships with people who so many others also want to know

Developing a unique view on picked-over terrain

Demonstrating trust when you are tempted by many, many opportunities to play a moment for immediate gain

Becoming known for all of the above

Wonderful journalists often excel at all of those. So the idea that a wonderful journalist (read: Mike, Om, Stewart, Ryan, etc.) might make a wonderful investor sounds entirely reasonable. My partner James Cham, who once wrote, shares these abilities.

Others say “journalists lack business sense” and think the hard part of investing is analyzing financials, competitive strategy, or sizing markets. Those skills seem both less essential and easier to learn on the field. (You can find plenty of corporate executives who also lack business sense...)

One question for journalist-investors is how they turn their ability to assess and win deals into support for founders after they’ve invested. Will the empathy, grit, judgment, and savvy needed come naturally?

Personal caveat: my dad was an architect, and for that or whatever reason, I respect people who practice a trade (unlike me!). So the work of journalists, engineers, carpenters, scientists, etc. has always fascinated me.

The essential investor attribute that neither journalists nor anybody else seems to have reliably cracked: luck. Venture is a business for the lucky.

For a founder

As an investor, I’ve spent the last couple of years meeting some founders and founders-to-be. OK, many — and they’re all giving a gift to the rest of us, sacrificing to build things we have yet to imagine.

In every founder, though, I keep seeing the same face: Julie Uhrman’s.

She’s going through an intense time right now, so I’m sharing how I feel.

Julie’s the founder and CEO of OUYA, a company we started together. She brought me into the world of “starting things”… or did I bring her? The truth of early moments is it’s hard to say; there are only the stories we tell.

My story: Julie showed me what it means to start something. Here is what I learned from her about…

Courage: A startup to make a… game console?! As one executive of a big game publisher told us, “it’s great you raised millions on Kickstarter, but you’re going to need billions…” Who did this Julie woman think she was? Let alone a she—taking on well-funded incumbents who had been leaders for decades, inventing a first-of-its-kind product, getting funded by those Sand Hill VCs (who gave her a real vote of confidence), and building a team of women (at one point 4 of the top 5 leaders at OUYA were women) in an industry known for being less than welcoming to them (see: #gamergate).

Pain: For a founder, having a high pain threshold is a job requirement.It’s easier to feel for their anxiety or loneliness than to admit the truth: starting things hurts. The system slaps you back. So a founder is a pain sink. An employee joins and tells you things are harder than he expected; wash the pain down the founder’s sink. An investor says you’re missing the numbers you shared just last month; it goes down that sink. A partner renegotiates a deal while you are away with your family; watch it go down the pain drain. I now see why people say some founders are sociopaths — it must be easier to do all this if you feel nothing. Otherwise, it aggrieves. Julie can take unusual amounts of pain, but she still feels every punch.

Being, truly, fried: You might think you’re tired at work. I’ve worked in places where all-nighters were a norm, where people kept toothbrushes at the office for the next morning. And only now have I seen what a 10th degree black belt in fried looks like. Julie is energetic, tireless. But when you have only hours left before the payroll you can’t afford comes due, and you’ve just called in a favor from someone reluctant to help you, to rescue a company-saving deal from the brink, it’s Thanksgiving and your family wants you at the table… and that’s merely the baseline stress level for the episodes that then unfold… let that pan bubble for a few months,that’s fried.

How much easier things are for me, since I’m a he: When we raised our seed round (or, failed to raise a seed round from proper VCs, begged our college roommates for money — thanks fellas! — and then went to Kickstarter)… more than one VC pulled me aside and asked if I was “really” the CEO. “You’re just taking an option here in case this thing takes off?” Julie made a better CEO for OUYA than I could have been, despite treatment, again and again, that made it difficult — even for her, the first person in the “I can do it” line — to call it anything but sexism.

Honor: It’s easier to succeed if you hold the value of your commitments at zero, if you’re willing to re-interpret, redefine. Julie, instead, puts others ahead of herself by default: I was her first investor, and when we negotiated, she asked me to take more of the company! I asked her to take more, and we stopped when we both had the most we could accept. Classic Julie, turns a tug of war inside out. Founders give so much, and sometimes wonder if they’ve given too much — while being asked, always, for just a bit more. And, in the 11th hour of any tough moment, Julie stretches, yet again.

I’m grateful to the teammates, partners, investors, advisors, friends, and loved ones who met Julie’s honor by committing to OUYA even when their bank accounts, or their smart friends, suggested they do otherwise.

Julie and the OUYA team launched a game console in less than a year, with fewer than 30 people. A console that has more games than any other, including products from those companies who have billions, not millions. OUYA changed the conversation about games, brought high design to game consoles with Yves Behar’s fuseproject, invented a new product category, provoked the industry giants to respond, and planted their flag first and tallest.

Thinking to the beginning, it really started with a suggestion from my wife, Sara (incidentally, also a founder), that Julie and I work together. (More on my wife, and Julie’s — Kelly — soon. They, like so many other spouses, are a startup’s unsung, unintentional cofounders. I intend to sing for them.)

For now, to Julie, and all our founders who remind me of her, thank you for teaching me about courage. About going first (maybe too first, sometimes). Taking the punches. And doing it with class.

This piece originally appeared on Medium.

“I'd like to start this company. All I need is a CEO!”

I’ve heard that so many times over the years, even said it a few times myself.

It’s the kind of thing you tend to hear from people who have yet to build anything. The people who say things like “I’ll get someone to code it up” as if you can separate the code from the thing you build, like an arm from Mr. Potato Head.

I’ve started hearing this differently, now that I’ve seen so much sweat spilled on startups. Now, to me, it sounds something like... “I’d like to make a movie. Know any directors?” “I’d like to fly to the moon. Do you have a rocket ship?” “I’d like to make a baby. Have any parents to refer to me?”

The founder is the thing.

The idea, the intense desire to see something exist, the expertise, the relationships, the money, all those are necessary, and wonderful. Still, the founder’s the thing.

Sure, you might find one, but it’s (almost) an oxymoron to “hire” a founder. Until the founder’s there, everything else is merely imagined. The founder’s action is what makes it real and, in acting, the founder changes the thing you want to build.

There are exceptions, and of course you might think your case is the exceptional one. It might be. Startups are like that; if you’re in the outlier business, it’s hard to have a set pattern.

More often than not, if you want something started, start it. If you’re unable (as I’ve been on more than one kooky scheme and a couple of real runners), know that you’ll have to get lucky (so lucky!), spend as much time searching for someone as you would getting going, and -- if you do succeed -- it will be the founder’s, not yours.

The thing belongs to the person whose sweat drenched it, not the person who suggested they sweat.

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