Creating Business Start-Ups the Kawasaki Way

0:17 the next recommendation is that you hire infected people i think that and if an infected founding team is probably more important than a founding team that on paper has a good background in work experience or education that you know that people who love the product or service that's more important than their degrees it's more important than their work experience focus on the people who love the product or service this means fundamentally you ignore what's irrelevant and in many cases education and work experience is irrelevant this is completely contrary to what most vcs will tell you if you have vcs further on into this

1:04 course and if you ask them well what are you looking for they're going to tell you and i'll tell you that right now you can skip that lecture they're going to say we want proven teams with proven technology and proven traction in other words we want people who have founded cisco won a nobel prize and they're doing 50 million dollars in revenue that's an early stage deal for a vc today all right by contrast garage is in a different business we want unproven teams unproven traction and unproven technologies completely different world the irrelevant thing is that you know think about what an entrepreneur has to go through so let's take let's take what might seem very attractive to many venture capitalists let's say that on your founding team is someone who was

1:51 a senior vice president at microsoft most vcs would salivate at the thought this is a proven executive this executive has been with microsoft for 10 years has helped microsoft grow etc etc but if you peel the layers of the onion one level lower you would see that that executive during his or her career at microsoft had on average a war chest of 50 billion dollars in microsoft during that time frame they had a market market share percentage of roughly 95 percent during that person's tenure at microsoft that person's greatest fear was the anti-trust division of the us department of justice now you're going to take that proven

2:36 executive from microsoft and stick them in a garage with 500 000 zero brand awareness zero market share i would make the case that that might not be the ideal hire for you okay now you may be wondering why in the world are there diamond rings in this picture it is because i am living proof of this theory i graduated from stanford in a psych degree as i told you um i attended uc davis law school and when you say you attended a school it means you didn't finish i attended two weeks so i really in fact i never got started actually and and after that i went into the jewelry business i i enrolled the following year in an mba program at ucla and while i was there i

3:23 started working in the jewelry business my first job was literally counting diamonds so on paper if you were apple computers you know recruiter you said all right so we need someone to go out and to convince the most technical audience we have software developers why they should write macintosh software i don't think the spec would say psych degree law school dropout marketing mba currently counting diamonds in los angeles you know that might not be the sweet spot okay but what enabled me to be successful with macintosh is i loved macintosh the scales were removed from my eyes the first time i saw it you know the clouds parted the angels started playing their trumpets it was a religious experience for me that's why i

4:11 succeeded because it ain't because of my psych degree and it's not because i attended law school for two weeks and it's not because i have a marketing degree from ucla all right ignore the irrelevant what is relevant is they love the product second point you should hire better than yourself very difficult for most founders particularly engineering types who believe that because of their superior chip speed that they should be the best sales person the best finance person the best marketing person and the best engineering person you need to hire people better than you a players by definition higher a players b players hire c players and c players hire d players so pretty soon you'll be surrounded by z players okay

4:57 that's what's called the bozo explosion and what follows the bozo explosion is the layoff okay so avoid the bozo explosion the third thing is to apply the stanford shopping center test the way this works is suppose you're at stanford shopping center you see someone who is being recruited by your company who's interviewing at your company the distance between you and the person when you first see him or her is from me to the back of the room that person up there has not yet seen me but i have seen them or him or her so at this point i have this sort of choices i can rush over and say hi how are you i know you're interviewing can i tell you more about the company i really think you should join our company we're just going to kick some ass we're going to make meaning we're going to change the world with our technology

5:43 or you can say stanford shopping center isn't that big maybe i'll bump into them if i do i'll say hello if i don't i won't say hello the third reaction is i'm gonna get in my car and go to valco shopping center okay if your reaction to the job candidate is not i'm gonna run over there and say hello to the person don't hire a person because when you're creating a startup it is a family it is a dysfunctional family honestly but it is a family if you don't feel the compulsion to run over there and say hello probably not the right person you