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    Stories of Startup Survival Mode

    enMay 26, 2022
    What are the essential factors for startup pivots?
    How did the CEOs feel during tough decision-making?
    What is the misconception about startup success types?
    Why is finding courage important for entrepreneurs?
    What challenges did Palmer Luckey face during the pivot?

    • Startups are a series of pivotsEvery startup goes through pivots, even successful ones, and a CEO's courage and clear vision are crucial for making tough decisions during these times.

      Every startup goes through pivots, which are essential for survival and growth. Ben Horowitz and Jason Rosenthal, in this podcast episode from 2017, shared their experiences of making tough decisions during hard times, such as major pivots, selling unfinished products, and securing financing in challenging markets. They emphasized that a CEO's role is lonely during these moments, and the hardest part is finding the courage to make the decision in the first place. They challenged the common perception that there are only two types of startups - those that succeed from the start and those that don't. Instead, they believe that every startup is a pivot along a spectrum, and even the most successful tech companies, like Google and Apple, have gone through significant shifts in their histories. Ultimately, the confidence to make these pivots comes from a combination of factors, including data, intuition, and a clear vision for the future.

    • Navigating tough business decisions as a CEOCEOs face challenging decisions during company pivots, requiring courage and uncertainty management to ensure survival.

      Making tough business decisions, especially when pivoting a company from one direction to another, is a challenging and lonely process for CEOs. Andy Greff's experience with LoudCloud illustrates this well. Despite having built a company with tremendous momentum and growth, the market conditions led to a near-certain disaster. When faced with no good options, CEOs often have to make the least bad decision. The LoudCloud Pivot involved a drastic change, going from a company worth over $200 million to pivoting the whole business just a year after going public. The decision was not an easy one, but it was necessary to avoid bankruptcy. Change is hard for humans in general, and as the CEO, the responsibility and blame for the outcome rest solely on your shoulders. While it may be tempting to merge with a struggling competitor in hopes of combining resources and customers, the outcome is not always guaranteed. Instead, CEOs must have the courage to make difficult decisions, even if they are uncertain, to ensure the survival of their company.

    • Ben's difficult decision between software and cloud businessAdaptability is crucial when facing business challenges, as Ben learned when he had to pivot from focusing on both software and cloud businesses to focusing on a new path due to financial instability and skepticism from team members.

      During a critical period in his company, Ben faced a difficult decision between focusing on their software business or their cloud computing business. While on a family vacation, he received a call about a potential deal that could potentially put them in a tough spot if not pursued. This led to the creation of a new product project called Oxide, which aimed to decouple their software as a service from their cloud computing platform. However, this project was met with skepticism from some team members. Just as they were preparing to raise funds to continue, their largest customer went bankrupt, leaving them in a dire financial situation and unable to raise the necessary capital. Ultimately, this forced Ben to reconsider their business strategy and focus on a new path. This experience highlighted the importance of adaptability and the risks associated with having too many business focuses.

    • Discovering hidden gems during business uncertaintyDuring uncertain times, be open to pivoting and discovering hidden potential in your business. Adaptability, teamwork, and perseverance can help you overcome challenges and thrive.

      During a time of business uncertainty, it's important to be open-minded and adaptable. The founders of Opsware, a company initially focused on cloud services, faced repeated rejections from potential customers due to the industry's instability. However, they discovered that their operational software, which customers found intriguing, could be a potential gem hidden within their business. Initially dismissive, they eventually realized the gap between their product and what customers wanted. The transition was long and arduous, with many challenges along the way, including resistance from engineers and technical limitations. Despite these obstacles, the exceptional team's resilience and determination ultimately helped the company survive and thrive in the software business. This story underscores the importance of adaptability, teamwork, and perseverance in the face of adversity.

    • Company culture as a team's glue during challengesStrong company culture, deeply rooted in shared goals and values, helps teams coordinate, adapt, and persevere during tough times, setting Homo Sapiens apart.

      A strong company culture acts as the glue that enables a team to coordinate, adapt, and persevere during challenging times. This was evident in the speaker's experience, where the team's unwavering commitment to their shared goals and values helped them overcome numerous obstacles. Culture goes beyond superficial perks and is deeply rooted in a team's identity and way of operating. It's especially crucial during difficult times when people are tested and may be tempted to give up. The ability to coordinate effectively across a group of strangers is what sets Homo Sapiens apart and is the essence of culture. In the context of startups, this means being open to adaptation and giving up rigid visions when necessary, as was the case with Lytro and its shift from being a hardware to a software company.

    • Hardware startups face unexpected financial crisesHardware startups require large upfront investments and face the risk of unexpected financial shortfalls due to non-refundable commitments to suppliers.

      Starting a hardware company, particularly a consumer hardware company, comes with unique financial challenges. Lightfield, a company focused on developing a new kind of consumer camera using light field technology, faced this reality when they discovered they had only six weeks of cash instead of the expected nine months. This shortfall was due to large outstanding debts to suppliers for prepurchased components. Raising necessary funds under these circumstances became impossible, leading to a day one crisis. The harsh truth for hardware startups is that large financial commitments must be made before bringing a product to market, and those funds are non-refundable regardless of the product's success. This mismatch between supply and demand curves and the need for substantial upfront investments make financing a hardware company a significant challenge.

    • Evaluating market fit and pivoting strategiesStartups must assess market fit and adapt strategies when necessary. A company using light field technology for consumer cameras initially struggled but found success in virtual reality instead.

      Even with a promising product and significant funding, it's crucial for startups to evaluate their market fit and reassess their strategies when necessary. In this case, a company had developed a new product using light field technology, initially intended for the consumer camera market. Despite positive reviews and a substantial investment, the founders realized that trying to build a consumer business around such an innovative technology was premature. The team's "spider sense" told them that something wasn't working, as their product, while innovative, didn't meet the basic expectations of the market compared to existing alternatives. Instead of continuing with their initial plan, they pivoted and focused on using light field technology in virtual reality, which was just beginning to emerge. This pivot led to more excitement and potential for the team, demonstrating the importance of adaptability and reassessing strategies when faced with challenges in the market.

    • Pivoting from consumer products to new opportunitiesRecognizing the need to shift focus and having courage to make tough decisions despite initial viability of consumer business.

      Pivoting a business is a challenging decision, especially when it involves shifting from consumer products to new opportunities. In the case of this company, they had recently bought Oculus and were exploring the potential of light field technology for movies and TV. However, they faced challenges such as having to let go of 55% of their workforce, fulfilling commitments to customers and distributors, and going back to the board to ask for a change in direction. The CEO, Palmer Luckey, recognized the need to focus on the cinema camera and virtual reality opportunities instead, but it was a difficult decision since the consumer business was still viable. The board supported the pivot, but it required courage and conviction from Luckey to make the change. This story highlights the importance of being honest with oneself and the board about the direction of the business, even if it means making tough decisions and going against initial plans.

    • Staying true to core technology while adapting to new marketsA company's initial focus on innovative technology doesn't mean abandoning the original vision. Embrace challenges, adapt to new markets, and stay true to the core technology for a more effective business model and greater impact.

      A company's initial focus on groundbreaking technology doesn't necessarily mean abandoning the original vision. In the case of this company, they invested in Lytro for its light field technology, but faced skepticism due to their detailed explanations. However, when they discovered a better way to bring the capability to market, they pivoted to VR and cinema, where their unique technology was met with excitement and validation. This shift led to a more effective business model and a more significant impact on their audience. The technical challenges they faced, such as high data rates, were embraced rather than shrinking from them. In essence, the company's journey demonstrates the importance of staying true to the core technology while adapting to new markets and audiences.

    • Navigating the Challenges of EntrepreneurshipEntrepreneurship involves facing unique challenges, trusting instincts, and seeking support to adapt and succeed

      Entrepreneurs often face significant challenges and uncertainty, especially during the early stages of a startup. The path to success can be painful and uncertain, and it may require pivoting from a one-time business model to a recurring one. It's important to remember that every entrepreneur faces unique challenges and that there's comfort in knowing that you're not alone. However, sometimes the most courageous decision is recognizing that what you're doing isn't working and being open to finding a better way. It's essential to trust your instincts and make decisions based on your unique perspective, as no one else has all the information. This can be a difficult and lonely process, but seeking validation from others can lead to missteps. Instead, entrepreneurs should focus on identifying patterns in their business and seeking out resources and support networks to help them navigate the challenges they face. Ultimately, the journey of entrepreneurship requires resilience, courage, and a willingness to adapt in the face of uncertainty.

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    ***

    For more interviews with inspirational women building inspirational things, visit: https://www.foundedbywomen.com

    Connect with Founded By Women host, Margie Chuang: 

    LinkedIn.| Twitter | Instagram

    Follow the Founded By Women journey: 

    Website | Twitter | Instagram

    #004: Jaime-Alexis Fowler on Leading with Empathy, Meeting People Where They Are, Increasing Diversity and Equity Within Teams, Following the Need, Creating Ripple Effects, and Much More

    #004: Jaime-Alexis Fowler on Leading with Empathy, Meeting People Where They Are, Increasing Diversity and Equity Within Teams, Following the Need, Creating Ripple Effects, and Much More

    Jaime-Alexis Fowler — Leading with Empathy, Meeting People Where They Are, Increasing Diversity and Equity Within Teams, Following the Need, Creating Ripple Effects, and Much More (#004)!

    Jaime-Alexis Fowler (@jaimealexis) is the founder and Executive Director of Empower Work (@empowerwork), a non-profit organization that provides confidential, free, immediate support for work issues. Empower Work envisions a world where everyone can thrive at work. 

    Jaime-Alexis is a seasoned leader with a track record of building agile, high-performing, healthy teams. She has developed a reputation for being a go-to resource for people management. Jaime-Alexis has led marketing at a $100M international NGO, run operations for a national post-abortion counseling nonprofit, overseen marketing at Code for America, and most recently, before Empower Work, launched a nonprofit investigative newsroom. Her work has been featured in NPR, The Wall Street Journal, Tech Crunch, Slate, Fast Company, and Forbes. 

    Please enjoy this wide-ranging conversation with Jaime-Alexis Fowler (@jaimealexis) and Founded By Women host, Margie Chuang (@margiechuang)!

    For more about this episode, visit: https://www.foundedbywomen.com/podcast/jaime-alexis-fowler

    ***

    Connect with Jaime-Alexis Fowler:

    Twitter  | LinkedIn

    Empower Work:

    Website | Twitter | Instagram | Facebook | YouTube

    ***

    If you have a moment, please consider leaving a rating and review on Apple Podcasts/iTunes. It helps us to get more amazing guests on the show and grow the podcast. Thank you so much!

    ***

    For more interviews with inspirational women building inspirational things, visit: https://www.foundedbywomen.com

    Connect with Founded By Women host, Margie Chuang: 

    Twitter | Instagram | LinkedIn.

    Follow the Founded By Women journey: 

    Website | Twitter | Instagram | Facebook

    The Power of Resilience | Soulaima Gourani's Journey from Adversity to Silicon Valley Success

    The Power of Resilience | Soulaima Gourani's Journey from Adversity to Silicon Valley Success

    Dive into an episode featuring the remarkable Soulaima Gourani, a masterclass in resilience and ambition. From her dramatic escape at 13 to dominating Silicon Valley, Gourani's story is a rollercoaster of triumphs and trials. Discover how a troubled childhood fueled her rise in the corporate world, leading to prestigious roles at IBM and Hewlett Packard, and her bold ventures in the tech startup scene. It's more than an interview; it's a journey through adversity to success, offering priceless insights for anyone dreaming big. Tune in for an unmissable episode that's both a heart-tugging narrative and a playbook for aspiring entrepreneurs and dreamers.

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    Early Struggles and Fundraising for Startup [00:01:30 - 00:03:10]

    • Gourani discusses her admiration for Altucher's podcast, which supported her during her startup's fundraising phase, marked by personal challenges and rejections.

    Traumatic Childhood [00:04:04 - 00:07:21]

    • Gourani recounts her tumultuous childhood, including running away from home at 13, her father's bankruptcy and abuse, and her family's multiple relocations.

    Education and Early Career Moves [00:07:32 - 00:13:45]

    • Despite being kicked out of school, Gourani completed her education. She discusses her early career, including jobs in the hospitality industry and moving to Switzerland to work as a waitress.

    Career Growth and Success [00:17:04 - 00:20:01]

    • Gourani's career growth included working in tech, scaling a software company internationally, and holding high-profile roles in large corporations.

    Entrepreneurial Ventures and Personal Life [00:20:01 - 00:22:32]

    • She talks about her entrepreneurial ventures, starting several companies, moving to Silicon Valley, meeting her husband, their family, and the importance of her support system.

    Challenges as a Silicon Valley Founder [00:31:33 - 00:35:46]

    • Gourani shares the psychological pressures and challenges of being a tech startup founder in Silicon Valley, including fundraising and dealing with rejections.

    Current Ventures and Reflections [00:53:55 - 01:03:40]

    • The interview concludes with Gourani discussing her current startup, a software company, and reflecting on the lessons learned and experiences gained throughout her life.

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    I write about all my podcasts! Check out the full post and learn what I learned at jamesaltucher.com/podcast.

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    • What do YOU think of the show? Head to JamesAltucherShow.com/listeners and fill out a short survey that will help us better tailor the podcast to our audience!
    • Are you interested in getting direct answers from James about your question on a podcast? Go to JamesAltucherShow.com/AskAltucher and send in your questions to be answered on the air!

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    Thank you so much for listening! If you like this episode, please rate, review, and subscribe to “The James Altucher Show” wherever you get your podcasts: 

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