Category: Life in a Startup

The Unlikely Journey of Our Newly-Minted COO

The Unlikely Journey of Our Newly-Minted COO

Peter Cauton

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We’ve all been through those moments in life when everything seems to be falling apart.

That was where Kellda was when I first met her two years ago.

You wouldn’t know it through my interview process with her. A former Unilever achiever and fastfood startup founder, she was introduced by a mutual entrepreneur friend. She was in-between jobs.

Kellda dazzled us in the recruitment process with her intelligence, strong will and demeanor. Even if she had no prior exposure to tech, she was obviously eager to learn more about our industry. I wanted to woo her into joining our company as one of our product heads.

Soon, I gave her an offer. I knew it wasn’t going to be easy. She had bigger brands pursuing her. Fingers crossed.

After some waiting, we arranged a meeting. I had a good feeling.

We met in our office and I started giving her the offer.

It then evolved into one of the most bizarre job offers I’ve ever been involved in.

Right there and then, she said yes to my offer…but then she started to tear up! And these weren’t exactly tears of joy. (this was VERY hard to mentally process when it started happening!)

With emotions still very fresh from her very recent personal challenges, she started to emotionally narrate the difficult things she was going through.

I then asked her if she would want to take some days off first before starting immediately as we had planned.

“I think the work will do me good,” she replied

I asked if what she was experiencing right now would affect her work.

She told me that she was at “80% of her usual capacity, but that that would be enough.”

After chatting some more, she was effectively telling me that she was accepting this job because it was an immediate offer and that she badly needed the distraction.

Uhm, not really what you want to hear in a job acceptance meeting.

I was trying to be supportive, but I remember that it was at this point that I mentally stepped out of our conversation and thought this job offer might not be such a good thing. I was already thinking of ways on how to stop this train from leaving.

But then, I remember thinking to myself that all of us go through bad days. I was thinking of the very worst days I had and how I would sound like if someone talked to me at that precise point. So…

Fingers crossed.

We started to get to know Kellda in the next few weeks.

Brilliant. Very operational. Great with detail. Dots her I’s and crosses her T’s. Short temper. Explodes.

Soon, there was a nickname going around.

Kill-da.

A month or so after she started working with us, I invited her to this retreat the community I belonged, Living Hope, was organizing for young professionals. I thought attending might be good for her. It’s good that she said yes.

Long story short, it was in this retreat that she realized that this God whom she felt so distant from, this God whose existence she started to doubt, was in fact, very real. And did, in fact, love her with such immensity.

It was from this point on that I noticed a difference.

We would talk about her legendary temper, but she now struggled with it. And month after month, I would see improvements in this area.

She had also more bounce in her step. She was just happier.

It showed in the work she was producing, too.

Our company eventually assigned her to handle E-commerce operations, where she just flat-out killed her performance metrics. She transformed her function: our customer service teams did MORE with less people, our fulfillment teams shaved weeks off of their delivery times, our merchant teams added a record number of merchants. Her people, while still being a bit afraid by her, grew to respect and love her. They began to appreciate all that she brought to the table. All this, while learning about tech and how tech platforms work.

I was so excited with her development in the company. But I was also so excited about the person she was becoming month after month.

Then, of course, one day she asks me, “Peter, can I talk to you?” (nothing good ever comes out of this question, nothing)

We met at Figaro in Taipan Place in front of our office. She had a job offer from another company which doubled her pay. (like being in so many startup moments like this before, I struggled to maintain a calm expression while the blood drew from my face)

My mind…raced.

My gut instinct was to just launch into a whole argument why that was such a bad decision and why staying would be best for her.

But I realized that this was her journey we were talking about, not STORM’s, not mine.

I told her, “Pray and discern. Seek out what God wants for you. I will be at peace and will be happy with whatever direction He says you should take.”

Well, I don’t know about happy, but I meant every other word in that statement.

A few days later, she said she was staying. (hoorah!)

(She would also just BAFFLE her headhunter by explaining that she was declining the lucrative job offer because God had told her so. Her headhunter couldn’t properly explain this to her boss, so she asked her boss to call Kellda directly)

Fast forward to the very end of 2016, where I really felt a powerful need for someone to take on the COO role in STORM. While I could do the job, I felt I could do a lot more for the firm by focusing on some of its more strategic, future direction, and let someone else operationally focused handle the day-to-day.

It was an easy decision, not only to me, but to everyone I asked in STORM.

During the second workday of 2017 (yes, first day would have been MUCH more dramatic, but I got sick and I couldn’t make it), we announced that Kellda Centeno would be promoted as the company’s new Chief Operating Officer.

You know, in that picture above when she took the stage I’m usually in…I couldn’t be prouder of someone.

I am incredibly excited. I CANNOT WAIT to see the great impact she will inevitably bring.

What’s the best thing about your job, Peter?

I would always answer that question by saying it’s the sheer learning.

I’m beginning to think something else is better.

There is just tremendous fulfillment I feel when people adopt and share my startup dream, make it their own, open up their lives, and start journeyingwith me.

Are you a manager of people? Are you putting up a startup? Are you scaling and hiring more people?

I think it’s important to remember just what a privilege it is when someone decides to work for or with you.

They are making you, your company, your idea, part of their journey.

It’s important to remember that each person is a blessing God has given us the duty to take care of and nurture — not merely as professionals, but more importantly, as people.

The sooner we realize this, the sooner we see people doing just amazing things.

What Happened When We Killed Timekeeping and Attendance

What Happened When We Killed Timekeeping and Attendance

Peter Cauton

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One of the great perks of being an entrepreneur is having complete control over time.

From the time we founded STORM, Pao and I have always worked with a completely flexible schedule.

Actual sms messages:

Dude, coffee shop muna ako this morning.

or

Had a late night, will work from home today

or

Won’t be in the office this afternoon

We never had to be worried that the other person is slacking off. We’ll even tell one another if we need a break to slack off. This is because we trust one another. In the end, I know Pao cares about the firm and will work his tail off for its objectives. I know that goes both ways.

This never became a rule for our employees though.

We followed a semi-flexible work schedule: people came in anytime between 8am to 10am and could leave 9 hours after. You were really only late if you came in after 1oam. Like most firms, we had punctuality and attendance rules: 3 lates merits a written reprimand, 5 lates merits a suspension…something like that.

I never considered anything more flexible. After all, we did have teams like Customer Service and Supply Chain which needed people present in very specific time slots.

How could we do anything more flexible?

As owners, Pao and I still pretty much enjoyed the freedom to go in and out at our discretion. Functional managers also had this level of freedom, but everyone else kept to the semi-flexible rules, with disciplinary actions for violations.

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One fateful day though, I was asked to sign a Written Reprimand for someone whom I thought was performing reasonably well.

That disturbed me. The punctuality issues had little to do with the performance.

Why couldn’t we give all our people the same freedom we enjoyed?

And at the heart of it: can we trust our employees first?

True to our form as a company which decides fast and then measures outcomes, I met with Pao and our People Operations team that afternoon.  We created the following rules:

  • From 15 SL’s and 15 VL’s, we created a policy where an individual could use unlimited leaves. Actually, there would be no more “leaves.” We just didn’t count.
  • We totally separated salary and timekeeping. There is now no need to log-in and out of the office. Salary would be given wholly every 15th and 30th. Deductions per timekeeping are now extinct.
  • The 15  SL’s, which was converted to Flexible Benefit Points when unused, are automatically given as Flexible Benefit Points at the person’s daily rate. The person cannot convert this to cash and can only use it on her Benefits Marketplace. We believe in the power of benefits given in kind.
  • For those eligible for OT, the person will now file OT herself, no questions asked. If you think you deserve to be paid OT on a particular day, you just file it, and it will be given to you.
  • Teams with definitive service hours, like customer service and supply chain, were given the directive to create their own rules, to be managed and policed within the team.
  • Leaders were then asked to step up: the company will be monitoring metrics and individual performance much more closely – the leaders have to lead.

We did an impromptu general assembly and instituted the new rules. I told everyone we’ll be doing this for a month and see what happens.

Apparently, the market already had a name for this: ROWE (Results Only Work Environment), I didn’t like the name because I felt it ignored one very powerful factor our firm valued – culture. Alas, the name “Rowe” stuck internally.

Our people loved it. They began posting on social media how great they felt being trusted and being “treated like an adult.”

But of course, the proof would be in the pudding. We locked in on our metrics and let the weeks pass.

The first thing I noticed was how Fridays would be much leaner than every other day. As a lifelong HR practitioner, I felt this was a bad sign.

A month after, our numbers were in, and it confirmed my suspicions. Our metrics were evidently down from a month ago.

I talked worriedly with my management team – did this mean we recruited poorly? After all, shouldn’t the RIGHT people fare well in this sort of environment?

We did another assembly and I told everyone about our results.  I told everyone I was tempted to just pull the program – the results more than justified that move.

But I said we’ll give it another few weeks. I reminded them that things have to change drastically for ROWE to continue. Like most worthwhile things, they would have to fight for it. I told them I WANT the program to succeed, but it would be up to everyone.

Soon, a lot of people in the our Yammer group began sporting this profile picture.

prowe

Weeks went by, and I didn’t really see anything different. Fridays were still extra-lean, attendance-wise. People came in much later than 10am.

I was going to chalk this up to a “Well, we tried” and wreak personal havoc on our recruitment process.

As another month crept in, I asked for the metrics. I was shocked to see the results.

They were up.

At first I couldn’t believe it. But there they were.

Assembly again. I told everyone about the metrics. ROWE was on the resuscitator, but it was alive!

I told everyone I was extending the program to see if the figures were just a fluke.

A month after, the numbers held.

This brings us to today. We’re still very much studying the program. There weren’t a lot of things changed with the original rules we drafted. But before declaring the program as a permanent part of the company, I  still want to generate more data.

Some notable observations and key realizations:

  • With absolute freedom comes…absolute transparency. If there’s one thing about this program, it’s that a person’s true colors will shine. A performer who really makes the firm her own will excel even more because of the flexibility, while people who have discipline and/or commitment issues will have their problems exacerbated.  We had to release a couple of employees whose lack of discipline really negatively impacted the teams they were in.
  • So…Fridays are STILL lean days. But with our metrics being met, I think this is more MY problem. As a lifelong HR practitioner, I think I still very much equated SEEING people with ACTUAL productivity. This is a paradigm shift I have had to swallow.
  • The employee satisfaction that comes from being able to take leaves whenever you want and being trusted for your work IS the biggie. We will trust you first. Will you be worthy of this trust? Most people we see will respond very well to this.
  • For this to work, a company’s metrics and numbers obviously have to be managed well. This is something we continuously work on.
  • Leaders HAVE to step up in this sort of framework. With less structure, more leadership and influence have to be exerted so people will consistently use the flexibility effectively and not abuse it.
  • I don’t believe in purely working from home though. I’m still old-fashioned when it comes to this. I think part of the fun being in a startup is that feeling of being in the trenches with a close group of people. Tough to do that if you aren’t in the same work area. I think our culture and our sense of fun as a company encourage everyone in the firm go to the office even if its strictly not a requirement – a welcome development for me.

The program for us has taken very interesting twists and turns. Promising though.

Let’s see what happens from hereon.

 

5 Reasons Why You Should Quit Your Job Now and Work for a Startup (With Traction)

5 Reasons Why You Should Quit Your Job Now and Work for a Startup (With Traction)

Peter Cauton

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So, you want to put up a startup.

You want to take the leap.

But it’s sooooo hard to let go of the cushy job you’ve spent numerous years cultivating…

You worry about the sudden disruption of that bi-monthly cashflow you’re now so accustomed to and built your life around.

So what now?

Here’s a solution – work for a startup. But don’t just work for ANY startup – work for a startup with traction.

What’s traction? I like Naval Ravikant’s (Angelist founder) efficient definition of traction: “Quantitative evidence of market demand.”

A startup has traction when it has increasing numbers – revenue, users, profitability, engagement, traffic, etc…

These are evident signs that the startup is WORKING, that the business idea has merit and potential.

I’ve been mulling about my own leap into entrepreneurship, and I think one of aspects of my own leap that I underrate the most was my stint in Chikka back in the mid-2000’s.

I underrate it because I started forming STORM before my stint in Chikka. But I think my 5-year stint in the startup (it was 3 years old when I joined) helped solidify my readiness in taking my full leap into entrepreneurship in 2008.

Recalling my stint in Chikka, and my own experiences in running startups, here are 7 reasons why you should quit your job now and pursue a job in a startup with traction.

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1. It’s Inspiring

After 5 years in a very “corporate” environment (IT consulting), I had a very different experience on my first day, when our CEO sent me an email welcoming me to the team, and on the last line saying: “Let’s kick ass and rule the world!” I don’t think I’ve ever seen the word “ass” in formal company channels.

But after that, I was sucked in. I loved the informality and culture they were trying to create. I loved that everyone was in t-shirts. (my previous firm made me wear a tie)

More than this, however, I loved experiencing the growth.

In seasoned corporations, you’d expect conservative growth figures of perhaps 12% or 15%. In startups with traction, we’ve experience numbers like 700%, or even 3000% growth. This is undeniably exciting for everyone in the firm. When a startup CEO makes announcements about growth figures – everyone feels giddy (because everyone feels he/she contributed).

I remember reading that in Amazon’s early years, they made a bell ring whenever a customer would purchase from Amazon. This made the culture electric, they created a real buzz (pun intended) in the air. (obviously they stopped this after there came a point when the bell just rang incessantly.

Traction makes things ultra-exciting for a startup.

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2. You Can Get Paid (!)

Here is where the big difference I think lies. At STORM, I tell people who come in: “You probably won’t get the same salary as you would command in a multinational – but present salary isn’t why you would join a company like us.”

But you know what? We would come close.

And combined with everything else we offer (culture, learning, excitement, contribution, input, upward mobility, etc…), this makes it a sweet deal.

You get to work in a startup without sacrificing that big a monetary sacrifice.

“But I won’t get equity.”

No, probably not the big 20%-30% ownership that you would get when you join a pure from-scratch startup with no traction, but….

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3. You Have A Shot at Significant Shares

Noah Kagan was one of Facebook’s first 40 employees. He was there when Facebook was still in that rented house we saw in The Social Network. He was fired in his first year (so he didn’t get his shares, because it was vested). He basically lost $100,000,000. Of course, not every startup will be Facebook, but what I want you to look at here is the shares given to Noah. No, as the 40th employee, he won’t have the same % as Zuckerberg or Sean Parker, but got a much, much larger percentage than current employees get. (and he doesn’t need to buy them at $100,000,000 if he bought the same shares now).

Let me break it gently to you: you have NO chance of gaining significant shares in a seasoned corporation, especially if its public.

On the other hand, a number of startups offer equity shares to strategic/loyal employees.  I know some young startups who give all their starting set of employees shares in the firm. In some startups, you need to prove yourself (if you do, most entrepreneurs I know would be happy to give you shares). Dino Alcoseba now owns a portion of the startup he leads, Strata.

If your goal in becoming an entrepreneur is equity (which makes a ton of sense, as this is how most billionaires acquire their wealth), then you might actually find it by working for a startup with traction.

You’re going to have to prove yourself, though. Bottom-line, you have a shot.

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4. Learning From Success

You now have so many stories on entrepreneurs learning from their mistakes. We hear a lot of quotes like:

That company I started failed, but the learning I garnered from it was why I now succeed…yada, yada..

This is true, of course (in fact I write about it here).

But you know what? You can also learn from successes! Yes!

By joining a startup with traction, you can see what it takes.

You can work for a dozen failed startups, amass a TON of experience, and STILL have no clue about how a startup can succeed.

In working for a startup with traction, you can see and observe best practices. Want to be a successful startup CEO? Then learn from a successful one.

5. Upward AND Horizontal Mobility

Dino is my poster boy for upward mobility in a startup. 5 years from “Junior HR Consultant” to CEO. (We have numerous examples of less dramatic upward movements as well 🙂 I think this is a clear advantage of working for startups – you get to grow with the firm.

But horizontal mobility is extremely important as well. Increased horizontal mobility allows you to find your own traction within a firm, and contribute where you can do your BEST work (a tremendous difference)

In a large corporation, it is often very difficult to change departments. Let’s say you start a career in Sales. You go up the ranks. If, suddenly, after some discernment, you decide, “I want to transfer to supply chain,” don’t be surprised if it takes time for your request to happen, or more likely, it doesn’t happen.

With a startup with traction, you can be flexible. With traction comes growth. With growth comes the need for new positions. Hence comes the opportunity to not only contribute in different areas – and try them out!

Longtime JGL advocates would be familiar with AR, who originally worked as a recruiter in (the now defunct) Searchlight, then she was hired by STORM. She then became STORM’s HR Officer, then HR Manager, then transferred into Consulting, then became our Content Management Head, before occupying the position she holds now in STORM, which is Customer Service Head. All in 2-3 years!

For startups, traction is king. Once a startup experiences traction, the possibilities are endless.

Make your possibilities endless as well and join one.

(Part 2 coming up soon!)

 

 

 

Thursdays Unplugged Postscript (July 31 Edition)

Peter Cauton

TUWEEK2

 

See that bottle of Pepsi in the picture?

I started this Thursdays Unplugged session by accidentally dropping the closed bottle, and then proceeding to absent-mindedly open it.

The result was an explosion of cola and pride, mostly on my shirt (which, incredibly, looks the same in the picture).

It was all uphill from there though!

With the third participant calling that he couldn’t make it the last minute, this became a 3-person session. Of course, I loved the result, as Jode, Gerome, and I not only got into the technicalities of the their startup ideas, but more importantly, we got to talk about their journey, and the softer parts of the startup life.

The thing I love about these sessions is that they’re discussions. Even if Gerome and Jode had very different concepts (one design, and one more IT-logistics) and were in very different stages of the startup journey, the exchange proved to be quite open, honest, and everyone was more than helpful to one another.

Can’t wait for the 14th. Seeya Mike, JC, and Michelle!

Slots still open for the 21st (1 more slot) and the 28th (2 slots free), so if you wan’t to secure a seat, do email me.

 

 

 

 

 

 

Soft vs. Hard Entrepreneurship and What to Prioritize

Peter Cauton

HARD vs SOFT

You can divide all the elements of entrepreneurship into two distinct categories: hard and soft. Here’s what the HARD column can be populated with:

  • Valuation
  • Product-market fit
  • Lean Startup Methodology
  • A-B Testing
  • Seed, Series A, Series B, Series C….
  • Pivot
  • Runway
  • Dilution
  • MVP
  • Growth Hacking Strategies

Here’s what the SOFT column can be populated with:

  • Passion
  • Founder Dynamics
  • Culture
  • Maturity
  • The entrepreneurial spirit
  • Mentors
  • Perseverance
  • Following the heart
  • Following the dream
  • Motivation
  • Taking a leap of faith

Now, ask ANY successful entrepreneur what the reasons are for her success.

Do you think most responses will fall within the HARD category or the SOFT category?

Yep.

It’s interesting that despite having MOST entrepreneurial educational material out there focusing on the HARD part, it’s the SOFT part which will largely determine your entrepreneurial success.

Here’s another task: ask most ANY startup/early stage investor what factors they closely consider in investing in a startup. Watch those answers fall within the SOFT category.

In fact, I’ve a strong suspicion the first factor isn’t even in my list above – integrity. 

Does that mean the HARD factors are unimportant? Of course not. (I blog about a lot of those here)

It’s the order of priority that’s crucial.

Master the SOFT column first, and then the HARD column becomes that much easier to accomplish.

Inner before outer.

(Hit that subscribe button so you won’t miss a post and get access to insider material!)

I Forgot I Was On Vocation!

I Forgot I Was On Vocation!

Peter Cauton

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The past few months have been some of the most rewarding for me as an entrepreneur. At the start of 2013, we made a crucial decision to split STORM Consulting, my startup baby, into two, distinct, laser-focused firms: STORM Rewards was going to focus on flexible benefits. I was going to lead the efforts as its CEO. STRATA was going to focus on HR competency frameworks. The big difference here was that I really wanted to source an independent management team to lead Strata – I didn’t want to be involved in the day-to-day operations.

In hindsight, it proved to be a very pivotal decision. (yep, focus is everything)

Armed with a new business model which allowed it to offer Flexible Benefits for FREE to large firms, STORM more than doubled its client base and became the country’s flexible benefits leader in 12 short months. A learning junkie, I got to learn how to do two things: a) running an e-commerce firm (something STORM pivoted into with our new model), and b) truly scaling a firm. I am 3/4 into hiring a complete management team using internal revenue. Last week, I was in Cebu setting up operations to expand there. We’re also in the midst of a major fundraiser to fuel our efforts to expand into the region. There isn’t a shortage of interested parties. We will be in another country in a few months. That’s a statement I never thought I’d utter this soon.

Struggling out of the gate in 2013, Strata started 2014 with a risky decision. We decided to let 26-year old Dino Alcoseba, who started in STORM immediately after his graduation, to run EVERYTHING. It was risky because the usual service providers to the HR market are typically led by people decades older than Dino. With STRATA more consulting-heavy than STORM, and with management consultants usually being a lot more seasoned, the risk was real. However, with Dino’s proven record with us of being ultra-dependable, a leader, extremely coachable, entrepreneurial, and someone with a high degree of integrity, I heavily endorsed his appointment.

Dino started the year off landing no less than three 7-figure projects and one 8-figure project for STRATA (with significant help from COO Orvin Hilomen and HR wonder-boy Mico Subosa). In one quarter. He also has raised his game, showing a strategic side of him I’ve never seen, and most importantly, showing a genuine care and interest in the members of the team he was building.

As an entrepreneur, I should be on cloud-nine. But there was something missing.

Don’t get me wrong, I am extremely happy and feel extremely blessed for all of this. Some part of me WANTS me to be satisfied with this.

However, I felt like Tom Cruise near the end of Jerry Maguire when triumphant Cuba Gooding was surrounded by reporters. I was supposed to feel awesome. It WAS awesome. Still, I felt terribly incomplete.

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It was shocking not to remember after years of mindlessly logging in

“When are you posting again?”

I had been avoiding any talk of Juan Great Leap for months now. It took me 5 tries to remember the right username-password combination to access this WordPress account. I would brush off queries as to when the next blogpost would be, or when the next Open Coffee would be. I would indefinitely postpone requests for a coffee-chat or a Skype session with dozens of people. I would ignore internal moments of inspiration for a new blogpost. I’d ignore all of these, rationalizing it with thoughts like:

“I had done my part”

“It’s now time to concentrate on my own firms.”

“I’ll do it next month.”

“I’m busy with more important things.”

“Why do I need to spend several hours writing a post when it doesn’t make me a centavo?”

But that gnawing feeling would come to haunt me every so often, accentuated by the occasional “when’s JGL coming back?” comment.

That made me think.

What is my purpose for JGL anyway?

Is it a medium to share my thoughts? To network? To better my brand? To help? A medium for a frustrated writer?

I then got around reading this and this, which, reading now, I almost feel comes from a different person.

Juan Great Leap was is the central medium for my vocation.

The reason I felt incomplete as an entrepreneur was precisely because my vocation wasn’t to be just an entrepreneur. It was to help others find their own vocations in this brave, new, fascinating world, where one has a lot more choices than to be a corporate cog.

I felt incomplete because I wasn’t following His plan. The Strata experience exacerbated this incompleteness even more, because seeing Dino finding himself and develop into his own brought such an intense feeling of satisfaction in me.

I think this incompleteness comes to us in many different forms, called by many different names:

“quarter-life crisis”

“mid-life crisis”

“existential angst”

“something is missing”

“why the heck am I not happy?!”

“I feel detached”

I believe God has a plan for all of us. It is a beautiful plan – one where all our talent and faculties are used to the fullest. Where we feel whole.

God tries to give us clues as to what it is. We see glimpses of it in our innermost desires, in our unique gifts and talents. We feel a bit of it when we find ourselves in situations where we can clearly help others with our gifts, where we cease noticing time and find ourselves in the “zone.” It is when we feel not merely happiness, but true, inexplicable joy.

It is when we are doing what God BUILT us to do. So naturally, there is a FELT alignment when we are on the right path, and a FELT misalignment when we are off the path.

Steven Pressfield and Seth Godin call this doing your “art” (as opposed to doing a job). I call it pursuing your vocation.

And I almost let it get away.

reset

Do allow me to start over.

There’s so much I’ve learned in the last 6 months which I absolutely need to share with you. New insights. New paradigms. New strategies.

But let’s start small and simple. Starting small and simple has worked tremendously for me.

First, you can now expect regular updates from hereon. Let me ease into this again.

Second, I want to organize a quick, intimate get-together – largely because I want to meet some people who have recently reached out to me wanting to do a coffee-chat. There are around 5 of them. I’m opening 5 more slots. I just want to meet 10 people in an intimate setting. Criteria: you need to be someone who has a clear startup idea and needs a bit of advice or you need to be a current startup entrepreneur with less than 1 year experience who needs a bit of advice. It also needs to be okay with you to share your idea with the rest of the people invited.

Email me your idea and your background. If things check out, you have the slot. First 5 people to email (and fits the criteria) gets in. Coffee will be on me. I’m thinking of scheduling it next Thursday night, July 24. We can meet at the STORM offices along Julia Vargas.

Let’s do this.

How Failing 2,032,198 Times Helps You Succeed

Peter Cauton

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We’ve heard it so many times for entrepreneurs – how you have to know how to fail in order to succeed.

I wanted to dissect how exactly this is so.

How exactly does failure help you succeed?

My first instinct in answering this question is to look at my own entrepreneurial journey.

Has failure helped me?

When asked this question, my reply is almost immediate – yes, it has helped me tremendously. It’s not just because of the sheer learning that happens afterwards (though this is big as well, and is the basis for the lean startup movement)

The great thing that failure has given me is the stomach for it.

Having failed so many times before and knowing first-hand what the consequences are, I am mostly unafraid to try things out for the first time. I think this is where I get one of my strengths as an entrepreneur.

I would ace the question:

“when was the last time you’ve done something for the first time?”

Recalling just this year, I could easily name 20 things I’ve done for the first time (entrepreneurially, at least).

But thinking about it, this wasn’t always the case.

I remember a time when I was deathly afraid of failing, when I would rarely step out of my comfort zones.

So how did my paradigm shift come to be?

I remember after my college graduation, I decided to teach for a year. All my college friends went corporate. Naturally, I had the lowest salary in our group. Sure, I told myself it was the noble thing to do and I got to practice my speaking skills, but in truth, this bothered me. Knowing what I earned, I remember my friends would sometimes offer to pay for me when we went out. Inside, this killed me.

Upon transferring to corporate, I got a much larger salary. But then, tragedy struck as my family went through a big financial problem (which would drag on for a long time). Of course, I volunteered to help out and put in my share on the table.

So for a good number of years thereafter, I would work hard, get salary increases, and then see a chunk of it transferred out of my account. I had to find a way to make do with what I had.

In retrospect, these events transformed me.

I knew what swallowing pride was like. I knew what losing money was like. I knew what working very hard and not getting rewarded was like. I knew how to scrimp and live simply to make ends meet. I knew what failure was like.

So when faced with a decision where the risk involved failure? (a potential loss of money, reputation, comfort) As long as I found the reward side worth it, I would find myself taking the leap.

worstmistake

There was one particular instance in the founding of STORM where I think this all came to a head.

Back in 2005, Pao and I invested 30K of our money incorporating STORM. Ignorantly, we went (almost) all-in with one strategy: we spent most of the money arranging Flexible Benefits learning seminar. We thought we could pull in a few clients from the event.

The seminar was quite packed, but was a failure. It was a failure because when we met with the customers, we found they were expecting a fully working online platform.

EricRies-TheLeanStartup
Where were you in 2005 Eric Ries?!

We estimated it would take us a full year to technically develop the necessary system with our resources. The problem was, we only had a month’s worth of salary, since you know, we spent it buying food and wine for our guests in the learning seminar.

That would have been it. The decision WAS the wrong one and we dealt with failure and its consequences.

I never really considered folding right then and there, which, in retrospect, I now find interesting. (we had ONE MONTH runway left and had NOTHING)

Instead, Pao and I had that fateful meeting in that small cafe in Renaissance and did a pivot. We designed a new product in that meeting (an online survey tool, predating all the online simians), which Pao (incredibly) developed in a month. That became the basis of a very profitable business line which we rode until our Flexible Benefits services were profitable.

It wasn’t exactly smooth sailing after. We failed so many times after. I remember that time when I was praying to God and I felt so sure we would land that big account we were putting most of our eggs in. We didn’t. I remember putting up startups which failed and lost money. Or when people I trusted would lie to my face and betray me.

I know failure. I’m still afraid of it, but since I know I can take it, I don’t mind taking risks, or doing something for the first time.

thomased

My advice in all of this: don’t spend your days avoiding failure. There are tremendous advantages of knowing failure directly.

These advantages are quite evident in the stories of practically all successful entrepreneurs I know. This is why it’s very easy for entrepreneurs to share “war stories.”

In our time now, we see winners lauded like never before (and failure more scrutinized than ever before) We see comfort and pleasure being considered as THE primary objectives for a lot of people.

I think this is dangerous, because it leads to a life when the easy path is always chosen. This is NOT the path to any kind of success. We have to get used to taking leaps.

Sort of like this guy.

(Want to hear from like-minded people sharing war stories and ideas? Why don’t you check out JGL’s next Open Coffee session? You can register here!)

My Year in the Philippines: Reflections On Starting Up and Development

Miarayon, Bukidnon, Philippines
Miarayon, Bukidnon, Philippines

I’ve been in the Philippines for almost exactly a year now.

Oh, what an incredible ride it has been so far. Within the year, I’ve had so many different experiences from starting things up with JGL to a brief stint at co.lab to being part of the launch of Ashoka Philippines.  Life has been unpredictable. I’ve been exposed to so many new and different ideas. So many different people. I’ve gained a sense of belonging in a country that has opened my eyes to the world.

The year has really been such a gift and a strong driving force of change for me.

I remember the days when I only had one peso in my pocket. I remember the days when I was so desperate for blog content that I would write about playing board games with my nephew. I remember the days when I’d use the term social enterprise at least once a day. I remember the days when everything seemed so new and fresh…when every opportunity that presented itself seemed like a great one. I remember the days, as if it were a distant past and as if I were a different person.

Why do I feel like I’ve changed so much within the last year?

I guess it’s the feeling of being challenged because of people. For example, a two-hour conversation with a passionate and well-informed changemaker would turn my world upside down. From learning about problems in our healthcare system to peace conflicts to education reform, I felt as if I were learning something new everyday from individuals who were really immersed in the world.

I don’t know which direction these reflections are taking me…but I guess that’s how development works. One starts something, learns from it in an ever-changing environment, and works towards progress.

I am developing in my work and my thoughts, as a young person and would-be entrepreneur. I urge young people to soak in everything that the world is willing to teach them.

Never be afraid to speak your mind in hopes of understanding your life and the world that you live in. It is a helpful exercise that will help you get to that aha moment.

Thanks JGL for giving me a platform to start and grow. Cheers to a full year in the Philippines!

Avoid These 5 Absolutely Crippling Startup Choices, Part 2

Peter Cauton

(This is part 2 of 2-part series. You can read part 1 here)

3) Reluctance to Get Down and Dirty

dirty

Take a gander at some of the Lean startup methodology books. There is a reason why this line of thinking has become quite severely influential for startups around the world.

The principles are quite sound: information and validation over guesswork and assumption.

Getting to that information? You have to talk to a lot of customers. You have to SYSTEMATICALLY do it in an unbiased manner. You have to do it over and over. You have to iterate your product over and over.

This is serious, rigorous work. You want success, as with anything worthwhile, you have to pay the piper.

But I think this pitfall goes beyond merely fulfilling lean requirements.

You have to want it.

You have to want it hard enough that you are willing to do the things you don’t want to do.

Programmers? You will have to do more than code and build. You have to talk to customers. Yes, you’re going to have to help LOOK for them. You have to RUN the firm, keep it afloat.

“Marketing” guys? You’re going to have to have to go through detailed product development. You’re going to have to set up internal processes.

Raise funds. Recruit. Corporate governance. Financials. Managing other founders. Managing investors. Customer service. Selling. Researching.

To any individual, one (or more likely, a bunch) of these tasks is just sheer torture to do.

Each of them can be extra-crucial at different times of a startup’s life. You’re going to have to suck it in and do them.

As a founder, you don’t have a boss, so you have the freedom to do what you want when you want. The temptation then is to just choose to work on the stuff you like.

I know a whole lot of startups that have quietly faded away because of this. Not for lack of talent. But a lack of want.

4) Choosing Optimism Over Realism

half full

I’ve heard or I myself have uttered the following phrases in the last eight years of startup work:

“He’ll come around.” (referring to a partner or employee not pulling his weight)

“Our funds will last.”

“We’ll land that client.”

As a startup founder, you NEED to be an optimist. I mean, that’s exactly what an entrepreneur is, right? Someone with a vision of the future. You can bet its a rosy picture that’s painted in the entrepreneur’s mind.

Ah, but here is the irony of it.

You also need to be a realist at the same time. (perhaps the better term is pessimist)

You have to assume the worst, and prepare for it.

I think as a people, we can be prone to being fatalistic (bahala na), sometimes just HOPING for the ideal scenario to magically appear, choosing to actively ignore the danger signs.

I know some entrepreneurs who ignored obvious warning signs, doing nothing about huge problem areas THEY KNOW are there, but for some reason, they choose not to directly confront. (a number of these perhaps have to do with another Filipino trait we need to overcome – being non-confrontational)

Are your funds looking like they might not last the next 3 months. Do something about it.

Having problems with a founder? It will not magically disappear. TALK to the person. If

A related tip here? You HAVE to be decisive. In a whole lot of startup scenarios, making ANY decision is so much better than INdecision.

5) No Compelling Vision

road-blur

This often stems from either of two reasons:

a) The idea isn’t compelling enough to be worth of a “vision”

Another milk tea wannabe.

An idea with no clear customer. (when you cannot explain who exactly will DESPERATELY want it)

An idea you’ve been pitching for 3 years that no one seems to want to bite at.

A small idea.

You know how to identify a good idea? It generates excitement. Energy. When you talk about it with people, you see eyes light up, and people throw around their own ideas on how to build on it. Then people begin asking “fishing” questions like, “So what are your plans with this idea? Where are you taking it?” (hoping you’d ask them to help out)

A bad idea tends to generate a lot of questions and pauses. It generates awkward moments when the person you talk to WANTS to get excited about your idea (you did talk to him about his idea), but is a lousy actor. They begin to ask you questions covering areas you ALREADY THOUGHT you explained like:

“Who is the target market again?”

“Why do think this will work again?”

(and usually, there’s a spattering of non-words thrown in, like “uhm” or “ahhh,” like “Uhm…who will be buying this product again? (waits for your answer) Ahhhh”)

On the other hand, a good idea is typically absorbed quickly by the listener. The listener also will tend to expand the subject matter by talking about how it can be applied to situations in HIS circle of influence, for example, “Hey, that’s a cool idea! And you know, aside from administrators, I think even the teachers I work with in school will just LOVE that.”

Don’t get married to an idea. Validate with people in the industry you are targeting. Allow people to build on your idea without getting defensive. (Huwag mong agawin yung idea ko!)

b) The CEO is not compelling enough

There is a HUGE advantage if your CEO is a great pitchman. What a great pitchman does is to sell the vision.

Steve Jobs was just AWESOME at this. In fact, people who work with him say he had a “reality distortion field” around him. You might be convinced of one thing before you talk to Steve, but after speaking to him, he’ll have you believe HIS vision instead.

Selling the vision is EXTREMELY important. You have to be compelling. Compelling enough that you get co-founders to go all-in with you. That you get the BEST employees. Compelling enough that potential clients will trust you enough to do business for you even if your startup hasn’t proven itself. Compelling enough that investors will part with their hard-earned money for you.

These are ESSENTIAL startup activities.

Even if you have a GREAT idea, if your delivery falters, then it almost doesn’t matter.

If you cannot COMMUNICATE a compelling vision, then the answer is simple: get another co-founder to be CEO. Don’t sabotage your startup and force yourself to play a part you know someone else can be better at.

(Do you know someone who will resonate with this post? Perhaps someone whom you know is cooking up a startup? Be a blessing and share!)

The Compass, The Anchor, and The Propeller

The Compass, The Anchor, and The Propeller

Peter Cauton

PR

When we moved into our new office, we were in a momentary quandary about what to do with a good-sized room that was right smack in the middle of the layout.

We could turn it into another meeting room – you could never have enough of those.

Or perhaps a designated interview room?

Incubate a startup idea (or two)? (such a temptation!)

Then, it hit Pao and I at the same time – we just HAVE to turn it into a prayer room.

It’s obviously not the bottom line-friendly alternative, but knowing our history, it just made too much sense to put a prayer room in the middle of the office. This was our little way of honoring the God who has been so faithful to us and our journey.

Prayer has been absolutely essential in my life as an entrepreneur.

I know “prayer” and “entrepreneurship” don’t really mix that well in the eyes of some people, but for me the opposite is quite true – I think prayer is absolutely critical in the life of the (believing) entrepreneur.

compass

COMPASS

“I want to be the CAPTAIN of my own ship!”

This was my battle cry all those years in corporate. Then, one day, I made it happen  –  the big leap.

Then I felt it.

It was very clear to me from day 1 as a “captain.”

…I felt that I had NO CLUE whatsoever on how and where to steer the ship.

That was a HUGE adjustment I had to make. In corporate, everything was (mostly) laid out for me. I had a boss. He had goals and objectives for me. The company had overall goals I had to align myself with. There was an accepted method of doing things.

As an entrepreneur though, everything was MY CALL.

This amount of freedom – without any accountability – is very dangerous.

Sure, you can lead your firm to quick profitability and success, but if you don’t watch it, the subtle costs can lead you to be someone you don’t want to be.

I remember years ago, at a time when we were just starting to turn it around as a startup, we got an opportunity to service a motel chain.

We certainly needed the cash, but after going back and forth on the matter, we declined.

I would probably get a lot of flak from that decision from most entrepreneurial experts (an employee actually questioned me about this), but ultimately, my prayer led me to the conclusion that it wasn’t a project aligned to what I wanted the company to stand for, and ultimately, to what I wanted to stand for.

There are many, many, many other morally ambiguous items which you would have to decide on when you run a firm. These ultimately will have an impact on the company culture you create, and perhaps, more importantly, to who you become. (our decisions make us, after all)

Tread carefully.

This is where prayer has really come in handy for me as a discernment medium. As a much-needed COMPASS, prayer helps me navigate the sea of infinite choices and options I find myself in.

Anchor

ANCHOR

I’m not so sure if I blogged about this before, but I remember many many years ago when I happened to find myself doing some work for one of the richest men in the country.

As I would come to know after a few months working with him, he was – bar none – the most power/money hungry person I’ve ever met.

What I remember mostly were his eyes. There was something about them. Even before I knew about how he was, I remember looking at his blank eyes and finding something off.

They were soulless.

I remember vowing to myself NEVER to walk that path, never to love money that much.

This isn’t easy. It’s an incredibly slippery slope.

When most of an entrepreneur’s time is spent safeguarding and ensuring “bottom line”, it’s very, very difficult not to obsess over it and make it the ONLY target.

This is where prayer comes in as a much-needed anchor. Prayer has helped me, over and over and over, realize that my worth does not lie in money…nor in my startup, for that matter.

It lies with the fact that I am God’s child.

Prayer helps me put things into perspective.

But it does more than that.

I realize now that prayer has become my propeller.

propellerPROPELLER

Without prayer, I would still be in corporate. Without prayer, I wouldn’t have had the right amount of serenity to realize there was a call for me to give back and encourage other people to take their own leaps. Without prayer, there would be no blogging. No JGL.

Prayer is where I draw the necessary strength (the secret – it isn’t mine) to do big, hairy leaps.

The Grand Design

So, my friends and fellow entrepreneurs, never forget and take prayer for granted.

Pray.

Fight for your prayer time. Don’t pray much? Start. Don’t pray much in conjunction to your work as an entrepreneur? Start the integration.

Do you believe we all have a specific purpose here in earth? I do. I believe in a Grand Design. This is why I am so excited about today’s entrepreneur-friendly world. I think we can pursue our truest passions (inextricably linked to our purpose) in a much easier way than it ever was. I think it is much easier now to stop compromising and live up to what OUR grand design is.

The MOST efficient and effective way to figure this out?

Talking often with the Grand Designer.

comanchller