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The Scarcest Resource at Startups is Management Bandwidth

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Re: The Scarcest Resource at Startups is Management Bandwidth

#11

Post by larrys »

_pius wrote: post #8
ryanmolden wrote: post #6

Earlier quoted context omitted.

http://www.freakonomics.com/2008/07/28/from-good-to-great-to...

That article is little more than FUD and neither refutes the Hedgehog concept nor adds much value to the current discussion.

How do you feel that putting a link to the Freakanomics article doesn't provide perspective on this statement:

"Much of the entrepreneur blogosphere would go up in a puff of smoke if people would simply read the business books that stand the test of time."

I think it does and is appropriate. I've been around long enough to have read "In search of Excellence" which Levitt refers to this way "These business books are mostly backward-looking".

What the books that are backward looking don't reveal is the companies that follow the same practices that have failed. There is never any data on that.

Re: The Scarcest Resource at Startups is Management Bandwidth

#12

Post by ryanmolden »

_pius wrote: post #8
ryanmolden wrote: post #6

Earlier quoted context omitted.

http://www.freakonomics.com/2008/07/28/from-good-to-great-to...

That article is little more than FUD and neither refutes the Hedgehog concept nor adds much value to the current discussion.

So to be clear, a man writes a book purporting to identify the characteristics and behaviors that make companies great. He calls out some number of such great companies and shows how they all fit into his analysis. Said companies go on to do objectively less than great, and someone calling that out is engaging in FUD? Interesting.

In my opinion Jim Collins has made a career on identifying success in hindsight, plunging headlong into a classic case of survivorship bias in order to divine the root causes of these successes, and then publishing his analysis. Can you point me to anything he has written that is predictive instead of simply retrospective? Can you actually claim that there aren't likely to be hundreds of businesses that exhibit all the traits that make businesses 'great' and yet failed?

Re: The Scarcest Resource at Startups is Management Bandwidth

#13

Post by larrys »

officemonkey wrote: post #4

The book "Good to Great" sums this up amazingly well as something called "the Hedgehog Concept." * What are you deeply passionate about? * What can you be the best in the world at? * What drives your economic engine? If there is something that does not fit in those three circles, do not do that thing. Much of the entrepreneur blogosphere would go up in a puff of smoke if people would simply read the business books th…

"What can you be the best in the world at? "

Ridiculous and idealistic. Is Porsche the best sports car or the best selling sports car? Is Avis the best car rental company and on what metric? Is Burger King the best fast food? What is the definition of best? Best selling? Most profitable? Highest quality?

Re: The Scarcest Resource at Startups is Management Bandwidth

#14

Post by _pius »

larrys wrote: post #11
_pius wrote: post #8

Earlier quoted context omitted.

That article is little more than FUD and neither refutes the Hedgehog concept nor adds much value to the current discussion.

How do you feel that putting a link to the Freakanomics article doesn't provide perspective on this statement: "Much of the entrepreneur blogosphere would go up in a puff of smoke if people would simply read the business books that stand the test of time." I think it does and is appropriate. I've been around long enough to have read "In search of Excellence" which Levitt refers to this way "These business books are m…

How do you feel that putting a link to the Freakanomics article doesn't provide perspective on this statement: "Much of the entrepreneur blogosphere would go up in a puff of smoke if people would simply read the business books that stand the test of time."

I think it does and is appropriate.

I don't think it does.

The problem of business books being mostly backward-looking is interesting, but completely orthogonal to the question of whether many lessons written about in blog posts have already been covered by classic business books.

Re: The Scarcest Resource at Startups is Management Bandwidth

#15

Post by ojbyrne »

Rather than Jim Collins, I'd vote for Michael Porter as the management guru to read. His idea of generic strategies is a great way to deal with this. Essentially he says there are 3 generic strategies - cost leadership, differentiation, and focus (market segmentation), and that you need to pick one and follow it 100%. Doing that really can focus the company on what needs to be done now and what is irrelevant to your success.

http://en.wikipedia.org/wiki/Porter_generic_strategies

Re: The Scarcest Resource at Startups is Management Bandwidth

#16

Post by _pius »

ryanmolden wrote: post #12
_pius wrote: post #8

Earlier quoted context omitted.

That article is little more than FUD and neither refutes the Hedgehog concept nor adds much value to the current discussion.

So to be clear, a man writes a book purporting to identify the characteristics and behaviors that make companies great. He calls out some number of such great companies and shows how they all fit into his analysis. Said companies go on to do objectively less than great, and someone calling that out is engaging in FUD? Interesting. In my opinion Jim Collins has made a career on identifying success in hindsight, plungi…

So to be clear, a man writes a book purporting to identify the characteristics and behaviors that make companies great. He calls out some number of such great companies and shows how they all fit into his analysis. Said companies go on to do objectively less than great, and someone calling that out is engaging in FUD? Interesting.

Nothing in the article actually shows that the Hedgehog concept is bad or wasn't a factor in these companies' past success. It's little more than a glib, cocktail party-sized nugget of contrarianism with no real substance. That's why I dismissed it as FUD.

In my opinion Jim Collins has made a career on identifying success in hindsight, plunging headlong into a classic case of survivorship bias in order to divine the root causes of these successes, and then publishing his analysis. Can you point me to anything he has written that is predictive instead of simply retrospective?

That's the whole point: it's not predictive, it's retrospective.

I said the article you linked to is FUD not because I'm a Jim Collins or business book industry apologist, but because the article attacks a strawman, namely that the book claimed that companies' past success implies that they will always be successful. It'd be great if one could prove business success by induction, but it doesn't work that way. This article doesn't even attempt to address whether or not the failed companies it mentioned continued to use the concept described in the book.

Re: The Scarcest Resource at Startups is Management Bandwidth

#17

Post by SoftwareMaven »

donw wrote: post #5

Focus is the most important thing you can have as a startup founder. Every failed company that I have founded, worked at, worked with, or heard of, has ultimately failed because they could not focus on a single goal, and instead pursued multiple, divergent plans... all at the same time. Not 'some failed companies', or even 'many failed companies'. Every company that I have seen fail, has failed because they could not…

Yes, but too single-minded of a focus can lead to opportunity blindness. Daily pivots are bad. Never pivoting is bad. Building a successful startup is highly nuanced.

Re: The Scarcest Resource at Startups is Management Bandwidth

#18

Post by ryanmolden »

officemonkey wrote: post #10
ryanmolden wrote: post #6

Earlier quoted context omitted.

http://www.freakonomics.com/2008/07/28/from-good-to-great-to...

Companies change. CEOs leave. For example, the thing that made Fannie Mae succeed (being able to manage risk) was abandoned with the loosening of the credit markets in 1999 and beyond. Discipline is hard and success in the past gives you a false feeling of security. Interestingly enough, this is covered in the book, but a dismissive blogosphere article isn't going to admit that.

Sure, but have you analysed these cases to see that is what happened or are you just saying that happened because they went on to do poorly? People have, for ages, been purporting to identify the secrets to success and sell you something that will allow you to predict the future/replicate the winners, and yet it is still rare. You could claim it is because it is hard and success breeds hubris, both of which are likely to be true, but it could also be because Jim Collins, like others before him, has not stumbled upon the secret to being great and found a way to distill it into a book or a simplistic maxim that actually works.

Re: The Scarcest Resource at Startups is Management Bandwidth

#19

Post by ryanmolden »

_pius wrote: post #16
ryanmolden wrote: post #12

Earlier quoted context omitted.

So to be clear, a man writes a book purporting to identify the characteristics and behaviors that make companies great. He calls out some number of such great companies and shows how they all fit into his analysis. Said companies go on to do objectively less than great, and someone calling that out is engaging in FUD? Interesting. In my opinion Jim Collins has made a career on identifying success in hindsight, plungi…

So to be clear, a man writes a book purporting to identify the characteristics and behaviors that make companies great. He calls out some number of such great companies and shows how they all fit into his analysis. Said companies go on to do objectively less than great, and someone calling that out is engaging in FUD? Interesting. Nothing in the article actually shows that the Hedgehog concept is bad or wasn't a fact…

>Nothing in the article actually shows that the Hedgehog concept is bad or wasn't a factor in these companies' success. It's little more than a glib, cocktail-party sized nugget of contrarianism with no real substance. That's why I dismissed it as FUD.

And nothing in Jim Collin's book shows it was a factor in their success, he just claims it is because all the companies he analyzed allegedly fit into his rubric. Does he research if failed companies did not fit into it equally well? Or perhaps other competitors in the same industry? If all you are doing is retrospectively identifying success, well great, but that isn't terribly hard to do. If all you are doing is cherry picking examples or worse, simply grouping already successful companies and then deciding that their success must be due to some common trait(s) they all share, then you also aren't providing any real insight in my opinion.

As others have pointed out his theories are vague to the point of uselessness. Do only what you can you be 'best in the world' at? Really? Best in the world? Well by that metric there really only should be one company in every single industry, since clearly we can't have multiple 'best in the worlds'.

All he is engaging in is book length common sense "Do what you are good at, don't do what you aren't good at, don't waste money on ill-conceived ideas". Trite sayings that are not really anything anyone would argue against but also don't give a lot of amazing insight.

Maybe I am just too dense to get his brilliance, but I have never seen anything amazing from his writing, which was why I originally responded to someone that appeared to be implying that he was apparently the diviner of the one true path to success.

Re: The Scarcest Resource at Startups is Management Bandwidth

#20

Post by bmelton »

larrys wrote: post #13
officemonkey wrote: post #4

The book "Good to Great" sums this up amazingly well as something called "the Hedgehog Concept." * What are you deeply passionate about? * What can you be the best in the world at? * What drives your economic engine? If there is something that does not fit in those three circles, do not do that thing. Much of the entrepreneur blogosphere would go up in a puff of smoke if people would simply read the business books th…

"What can you be the best in the world at? " Ridiculous and idealistic. Is Porsche the best sports car or the best selling sports car? Is Avis the best car rental company and on what metric? Is Burger King the best fast food? What is the definition of best? Best selling? Most profitable? Highest quality?

If nobody tried to be the best, there wouldn't be anything good.

Porsche may not be "the best" sports car overall as that is a very subjective metric. Though for sure, they make an exceptional car. For various definitions of 'reasonable', the 911 is the most performant car in at its price point (or at least, generally is, these things wax and wane).

The key isn't whether they are the best sports car, but whether or not they're succeeding at being the best at ... something. That something may not be as broad as 'best sports car', but may be much more narrow. Twitter isn't "the best website" in the world, but it might be the best way to transmit short messages to a broad list of friends. Similarly, Dropbox might do very poorly in a "best system backup" utility, but might win competitions involving ease of use, or in being convenient enough that its users actually bother (which is better than most backup providers.)

The companies that try to be all things to all people are few and far between, and us, as entrepreneurs, are thankful for them because all it means is we have to beat them in one small segment and they acquire us. ;-)

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