How I sold my first lemonade and made a buck

I sold my first lemonade. This is a personal story of creating (tiny) wealth and earning (tiny amount of) money on my own. The amount is not so important as is the illustrative value of the process.

Flavor of the lemonade

Not lemonade.  Rather I sold tickets to an event.  An event I organized.  In short: 1) I had a customer in mind. 2) I used resources I had to create value from thin air to serve those customers.  3) Then, I monetized the value I created.

The value I created was a panel talk geared to educating community members.  It included product managers from well known companies like Facebook, Indiegogo, and Snapfish.  It was titled What do product managers really do? and represents things I love about meetups - which is another blog entry about using meetups to do more.

1) Customer in mind & value proposition

It starts with the customer and their needs. In this particular case, we had a strong hunch (from other validations) that people are interested in learning about product management and willing to pay to network with product managers. Bringing that to the customer would be a valuable service to them.

Demand as manifested in pricing was unclear to us, but I knew that a hypothetical customer would pay something.  In this case, we priced the tickets at around $15 - 20.

Demand as manifested in headcount was also unclear.  We knew that some would be interested at the above price range - just not sure exactly how many.  You can see that headcount and pricing points are opposite sides of demand for the service in question.

2) Using resources to create something from nothing

As a former B-school student, I must say that this is a technique that absolutely should be discussed, yet not included in the curriculum.  MBA programs should have a class called "creating something from nothing."  How do you create this event?  You need a venue, you need speakers, you need to market/distribute to customers.  You need team hours to make all those things happen.  How did we do it?

• venue - we had spoken to many startups in San Francisco in our prior work. We decided to host the event in the evening (when the work places are empty anyway) and pitched the value of exposure to prospective startups.  We sold the value as a concept, and came out with several venue choices for free.
• speakers - this was all about gaining traction. Again, we knew that some people love sharing and teaching (just as we do) and are eager to connect with crowds.  After 'signing' that first person, the next ones become easier.  We used this technique to find four high caliber product managers, including a director-level product manager and a PM from Facebook.
• distribution/marketing to customers - in our case, this was done in the course of validating the customer needs.  In particular, we built an educational meetup community centered around the product management vertical.  So, we cheated on this one.  And I love the fact that we cheated legal and square.  That should be another MBA class: how to stack the odds in your favor to win.

3) Monetization

Well, the three bullet points above outline a value creation for potential people interested in this sort of thing.  Being the first of its type of service, we had no idea how much to charge (in retrospect, we could have benchmarked from similar events in other arenas).  So we experimented.  Let's price at $15 and see if we can fill the seats.  Then we hustled, and over-filled.  We planned for 55 people, but over 120 people signed up to go and begged us to let them in: "pleeeaaase!" Lesson learned!  Next time, we should find a bigger venue or charge more.

The lucky few who were able to get in - and were happy to pay money to do so ...

Was this bit of profiteering?  No, not really?  We have done other events free out of love of the work.  We are involved in building a community.  But time is not free.  To create a sustainable enterprise, you should charge.  You should charge fairly, but you should charge money.  That is the clearest indication that you have indeed created wealth - that customers are willing to give you something back in return for the wealth you created.

There you have it.

"The people most likely to grasp that wealth can be created are the ones who are good at making things, the craftsmen." - Paul Graham essay: "How to Make Wealth"

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In a future post, I would talk about growing a community through meetups:

• successfully organize your first event/meetup
• successfully build a meetup community and  techniques to grow your community

Stay tuned!

Silicon Valley's Tech Talent Hegemony Endures

How does one build a magnet for talent? It is a question equally important to cities and to teams working in cities.  One of the favorite past-times among tech people is whether Silicon Valley's glory days are over.  For example, an article recently featured on LinkedIn: "Why Silicon Valley's heyday might be over." (It stood out to me that the title suggests lack of confidence about the assertions.)  Rankings are like comfort food. They are dime a dozen (see Startup Ecosystem Report) and are like debates over religion or politics. Useless. This kind of debate misses a key point. Instead, your sole focus as an entrepreneur, a serious technologist, or political/business leader should be to focus on the attributes that produce outcomes of a successful startup hub, and decide whether you can locally produce those (or better) attributes or decide (as many do) to move to San Francisco.

Did I say San Francisco?  Well - I won't digress - it's yet another fun debate, but you can read about it in this article written by Hermione Way.

Deeper thinkers like Paul Graham get the point. In a (more confidently titled) article "Why Startup Hubs Work," PG outlines 3 factors that explain success of startup hubs: 

1) Environment,

2) Chance, and 

3) Numbers.

PG explains that #3) numbers is an underlying driver for the first two important factors. "To make a startup hub, you need alot of people interested in startups." In other words, density of right talent is a key driver for success of ideas, of innovation, of teams that capitalize on opportunities, and of successful tech companies that grow from those small teams. PG originally frames this problem in the inverse, noting that successful areas reduce the attrition rate of failure: "Somehow it's as if most places were sprayed with startupicide."

To be sure, this idea is not new. Density is a pre-requisite to ideas having sex, as elaborated in this popular TED talk by Matt Ridley.  Economist Richard Florida also studied this theme extensively and coined an entire academic sub-discipline around the Creative Class.  We, the People, have known this for millennia. When first hunter-gatherers settled into cities, all sorts of innovation happened: irrigation, plows, granary to store crops, military to protect the crops and settlements, weapons to steal neighbors' crops and settlements, rule of law to avoid such conflicts, and on and on.

What about the Internet?

Yes, internet has democratized exchange of ideas, but those outside of SF miss the simple truth. Tech people who live locally have internet AND the meetings that take offline.  Do you have that, RTP? Berlin? Vancouver?  Does your Ruby meetup group have 6,000 members and meet almost every day with dozens of organizers and hosting different events for different audience?  Do you have comparable sized communities around JavaScript, around node, visualizations, machine learning, etc?  I'm not bragging. Instead, step back and think about the causes that lead to this reality.

I'll make one more point on the effects before going back to causes. It is a cursory and high-level evidence that SF's tech hegemony will accelerate, and not slow relative to competition.

Natural phenomena generally follow a logistics curve - an exponential growth followed by inverse version flattening out to an asymptotic line:

Key question is whether we are at a turning point

Implication => If we have not reached a point where deceleration of growth has been reached, then SF will continue to outpace competition, because the growth is exponential.  If you actually live in SF, then it's not difficult to believe that we have not reached that turning point. Things are blowing up. Every day.  

Let's come back to point.  Rather than envy SF's leading position, focus on outcome and how you can also build it. Specifically, how does one build a tech talent magnet? What are the attributes that attract tech talent?  It seems at times that SF has cornered the market on this problem.

More to come

In a future post, I'll delve into what is visible and what lies underneath the visible layer.  In so doing, I will explain why features noted by critics like "high cost of living" or "fierce talent for engineers" totally miss the point.

• How SF Tech community differs (macro-analysis)
• Building a better (talent) mousetrap (micro-analysis)

There are some interesting implications.  For example, large companies that do not have a strong presence here may want to reconsider their future headcount investment.

Stay tuned!

ROI on MBA vs Coding Schools - which is better?

A data-driven approach to career choice.  Return on investment.  ROI.

Plain and simple in language that both prospective engineers and business students can understand.  We will keep things as apples-to-apples as possible by using annual salary and normalizing class time period - 2 years for MBA.  We do gross (before-tax) salary and expenses.  Basically, cash in and cash out.  We will leave the discussion about the intangible things like network or personal growth, etc.  It's definitely a separate debate.

Get an MBA?
Let's take a premier Business Schools - Harvard Business School (HBS)

Investment -
Per HBS cost summary page.

• yr 1 - Fully loaded cost - $87k/year for single person
• yr 2 - Repeat at $87k/yr => let's round down to $170k for two years

Return -
Salary depends on the industry/company, but let's take highest median, which is private equity/LBO per HBS Employment Report.

• Summer internship salary for LBO/private equity (assume 3 months) - $24k
• Yr 3 - median LBO/private equity salary year 1 - $150k
• Yr 4 - let's assume 10% bump with good performance in year 2 - $165k

So, here you are, 4 years after you first attended business school.
ROI = $339k / $170k = 1.994 or basically 200%

Go to a coding school?
There's not a strong or widely publicized salary data around this yet (so this is slightly an orange), and so I use a well-recognized industry report from Riviera Partners - a San Francisco based placement firm for tech talent.  I can corroborate these figures based on indeed.com postings and also local tech group mailing lists where salary figures are thrown around ... so it's reasonable.

Investment -
This varies by program from around $10k to $20k, but let's use an approximate mid-point at $15k for the program duration, which is generally about 3 months.  You can read more about the schools and coding in a prior post - Soon your taxi driver may know more Ruby than you do.

• yr 0.25 - $15k
• rest of year 1 - 0, you're making money
• rest of year 2 - 0, you're making money

Return -
Salary figures, as noted are from Riviera Partners 2012 engineering salary review. Let's use JavaScript.

• yr 0.75 - junior dev: $83k * 0.75 = $62k
• yr 2 - $91k (after 10% raise)
• yr 3 - $100k (after 10% raise)
• (junior dev is 0 - 3 according to this report, so afterward you're a midlevel*)
• yr 4 - $132k ($120k in 2012 reasonably adjusted for inflation - but likely higher)

* The reality is, many graduates from the 3-month program are hired directly out as non-junior devs and after 3 years, may work as senior developer.

So, here you are, 4 years after you write your first lines of code at a school.
ROI = $385k / $15k = 25.66 or basically zomfg%

Conclusion

• So which would you rather have?  200% or zomfg%?
• Isn't this damning for the traditional education?  Somewhat looks like a rip-off to the consumer.
• Also, if you are a consumer, it's got to be a no-brainer from a financial perspective (of course, don't do it for the money, do it for interest/passion, etc, etc, but I mean, who has a passion for MBA? That was for money, too, right?  Apples to apples.)
• Traditional schools/companies - please wake up and smell the competition

Truth is life and career is far more than simply about the money.  It is doing things you love doing, and about working with people you enjoy working with.  Even on this note, I would assert that tech is just as compelling, if not more so.  By all means, be well informed about the big decisions in your life.  Coding schools are still not widely known, and I think it's worth considering for many.

Updating Ruby, Gem, and Rails versions ...

Hanging out on a beautiful San Francisco Sunday at Hack Reactor.  Been burning hours trying to implement _.last method from underscore library from scratch.  Hours because I suck at JavaScript (definitely learning more Chrome dev tools, though).  Anyway, after banging my head on trying to understand how to implement the _.last on functions, which involves prototype.call chain (I think), I decided to take a little break to upgrade my Ruby on Rails versions which have fallen out of date.

I want to share the links I've used and they worked straight up from command line for me.  With Ruby on Rails (RoR), you'll want to update three areas: Ruby itself, Rails framework, and Gems.

Updating gems

Gems
My gem version was 1.8.24, pretty out of date.  Go to http://rubygems.org/.

~$ gem update --system

Ruby (rvm first)
I was running 1.9.3 on Ubuntu.  As it was, I am a Ruby Rookie, so I wasn't using rvm (primarily because when I first started and had installed, I was on Windows and there is no rvm for Windows.

However, on Ubuntu, the following blog post worked well for me.
http://www.andrehonsberg.com/article/install-rvm-ubuntu-1204-linux-for-ruby-193

Since you likely have curl and all that jazz, skip to the bash script and remember to change your .bashrc home name ... as Andrei points out in his blog.

bash -s stable < <(curl -s https://raw.github.com/wayneeseguin/rvm/master/binscripts/rvm-installer)  

You may need to reload:
~$ rvm reload

This does not upgrade me to Ruby 2.0.0.  It does however install the rvm, which will make future version installations easier.  For example, type:

~$ rvm use 2.0.0

and you'll be told "ruby-2.0.0-p0 is not installed."  And then told to do:

~$ rvm install ruby-2.0.0-p0

You may have to update some packages and such, but that should basically get you there.

Rails
Rails is a gem, so you want to associate the correct rails version to your gemset.  To select between your installed gemsets, you can use:

~$ rvm gemset list

So, let's say you want to install the latest rails to your gemset called 2.0.3, you could do something like:

~$ rvm gemset create rails4

will create a set you can remember is associated with latest rails.  For more on rvm basics, you can go to the source.

Once you have the up-to-date gems, then Rails is simple:

~$ gem install rails

see bottom lines - run rails --version, ruby --version, gem --version

I love the Ruby Rookies ...

I love the Ruby Rookies ... that is all!

Test first learning with rspec exercises -

Learning, learning

Euler project algorithm night at Zendesk ...

Learning, learning, pizza!

Should MBA first-years start meetup groups? Do more, talk less.

MBAs are a favorite punching bag for whiz bang entrepreneurs, especially those too young to have five years of corporate work experience.  Take Dale Stephens, for example.  He young, he's a Thiel fellow, probably brilliant, entrepreneurial and successful.  He's a baller and he knows it.  He wrote an incendiary essay called "A Smart Investor would skip the MBA" featured on WSJ.  Yup - MBA is probably a waste of time and money for him, even though I think MBA teaches some very valuable leadership skills. Of course, there are no end to such debates, and for folks like me who have a top-tier MBA and loved the experience, the debate is irrelevant.

Instead, what would be more relevant is how we close the gap between MBAs and do-it-yourself entrepreneurs.  After all, Stephens notes that networks are invaluable, and I don't see how you can build a Harvard MBA network without getting a Harvard MBA (well, actually, I can see how you can do it, but it would be easier with MBA).  The focus should be on learning and not on warning.  At Harvard, entrepreneurship is now a required first year curriculum course.  What about at Darden, my alma mater?  I am sure the classes are great, but I want to specifically address a common complaint within class walls - too much talk, not enough action.  This mirrors a common mantra among startups and entrepreneurs: talk less, do more.  So I have a suggestion.  First years, take those classes, and read and talk about those cases.  And also, start a meetup group.

gratuitously provocative and probably infringing some copyright

Yes, start a meetup group. Instead of some silly simulation on a laptop, try a live, human capital building, meetup group - like this Product Lovers group my friend started.  Here's what a meetup group would teach a MBA who was not already an entrepreneur coming into a program.

For starters, what could a MBA frosh do via meetups?  Well, lot of my classmates loved volunteering at the Humane Society.  That's a meetup.  What about workouts?  Meetup.  Networking while on long-runs?  Meetup.  Raise funds for local children's group?  You guessed it.  How about ski enthusiasts ... you get the idea.  It's fun, it generates human capital, and is a good hands-on learning with many positive externalities.

1. Pragmatism - It forces the team (learning group) to focus on real issues in the world of practical affairs.  Meetups are geared toward real human beings.  By its very nature, it affects something of practical impact to people.
2. Segmentation - Did you find that market segmentation case a bit abstract?  You will find it less so when the rubber hits the road.  You will need to figure out what problem you are solving and make best initial guesses about who will resonate the most with your messaging.  You will then iterate and fine tune your target audience.  And you have to figure out how to reach them.  It is a good exercise in both marketing and management communications.
3. Leadership - Meetups (done right) will lead to building goodwill in the community.  In other words, you can strategize all you want inside the board room or inside the learning room.  No one in the surrounding city will know about it nor will anyone care.  If MBA programs are such a concentration of talented and intelligent people (as we were often told in self-congratulatory manner), why shouldn't these gems of human beings be shared with the surrounding community?  Mind is a terrible thing to waste, right?  Let's be doers and build some human capital, people!
4. Measurement - Paul Graham (affectionately known as PG) writes in his essay "How to Make Wealth" that you need two things to make crap-tons of money.  Measurement and leverage.  Problem with class and grades is, that you either lack measurement or leverage.  Simulation is cool, and Socratic methods are cool, but how do you measure if it was successful?  Will grades do?  I think not.  Instead, try a meetup.  The measurement becomes very simple - how many members have you signed up.  It's cold, hard, bottom line.  And what comes with growing membership?  Leverage.  Your messages or events reach a wider audience.  You're fast on your way to building wealth.
5. Fun & Trust - Which do you think will create a great bond among the team members and between the school and the community ... MBAs doing abstract case work or real events that gather people together and help each other learn, or do something fun, or eat together, or whatever - anything that's people to people?  Plus, it's heck of a challenge and hella fun!

There you go kids.  It doesn't cost much to set up.  Get out there and start your own meetup today!

Fun meetup we had back in Feb - where so many people learned: it's a feel good

Hacker's words against MBA-bashing (or other forms of dismissing each other)

I am a a minnow among sharks.  I am an MBA among Hackers.  At hackathons, I am the business guy, the idea guy - or as it turns out - the guy that generally inspires disdain at worst and condescension at best from the developers (especially those who label themselves "full stack").

So, I ask around and try to figure out how I can make myself more useful.  So I pick up some graphic design skills - GIMP (aka poorman's Photoshop), HTML/CSS, some sensibility with typeface, learn to make logos and icons, etc.  Even so, oh how tall and lofty those full stacks appear.

So, I learn to code.  It is a long process, but turns out it's a fun process, so I am happy to learn.  I learn.  And even as I write procedures and google stackoverflow answers for error messages on my local server, I realize that you never stop being a minnow among sharks.  Here I am learning to write a factorial, and there Drew Houston is building Dropbox.  Holy shark!

Speaking of sharks, Mark Cuban is a colorful entrepreneur, well known for among other things his disdain for MBA's.  He didn't write this, but his views are well-known, as captured in this blog by Walter Frick called "Don't Get an MBA."  It turns out, that there is a whole list of those who dismiss MBA's.  It's a sport.  Even famous business people advise against MBA - like Tom Peters (who was himself an MBA), Jeff Pfeffer (who writes about Power - you should read it).

The shark, mocking the minnow.

Even the uber-Hacker Paul Graham wrote "evidence suggests you'd do better to learn how to hack than get an MBA." (Though to be clear and fair, PG was speaking about startups and what gets you there.)

PG: The Oracle of Silicon Valley says forget the MBA

But, I am an MBA. I am a minnow. I can't change that.  Ironically, as I learn to code, I find one of the best responses to those who play the popular game of MBA-bashing.  It comes from an introduction to SQL from the author of the popular "Learn [programming] the Hard Way" series Zed A. Shaw.  In the section called "Against Indoctrination," Shaw warns against those who thinks technology x is superior to technology y (i.e. SQL vs. NoSQL debate).  Shaw advises:

"The problem with these people is they are trying to indoctrinate you, not educate you."

He goes onto note:

"I want to educate you so that you have the ability to make your own choices and learn anything you want."

Wow.  I want to hug this guy!

So, there you have it.  Keep learning.  Learn for the sake of learning, so that you can be a better person.  So that you can help others.  Don't label each other.  Don't disdain each other.  Instead, learn from each other.  Full stacks, share your stacks with rookies.  MBA's, learn to respect developers.  Developers, be curious about what the non-engineers do before you write them off.  And your personal learning path may involve learning to code, or getting an MBA, or whatever.  Keep an open mind.

And the lion and the lamb shall lie together ...

St. Zed, the patron Saint of Minnows