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25
Jun 12

My three favourite Buffett & Munger quotes

As a regular visitor to the Berkshire Hathaway Annual Shareholder Meeting in Omaha, NE, I enjoy these lesson in sanity and clarity in thinking. I have now more than my fair share of Buffett or Munger quotes that I can instantly pull out of my memory and I wanted to share three of the less known ones that have helped my own thinking.

  1. “If it ain‘t worth doing, it ain‘t worth doing well“ 
is Charlie Mungers way of saying that it is not worth going after too small opportunities.
  2. „I am a better businessman because I‘m an investor, and I am a better investor because I‘m also a business man“ – is an encouragement for me to continue doing both.
  3. „I‘d rather pass on a fantastic opportunity, than lose one night‘s sleep over it“ 
- has saved me more money than any book on investing.
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29
May 12

How to take a startup across borders

This text is a slightly longer version of my contribution to the May 2012 edition of WIRED UK 

Taking companies across borders is incredibly rewarding and also sometimes very challenging. Here a brief summary of some lessons learned. There is no right or wrong for all businesses. For some models you need to build a local salesforce, sometimes you can get away with just having a great central Search Engine Marketing team. Sometimes you need to do both.

Most companies chose to have product central at HQ and sales regionalized in other markets.This is tried and tested and works well if your product is „one size fits all“ like a facebook or Google. The limits to this system of a stong HQ and relatively weak satellites start to show if local tastes and preferences differ too much, or if the sales process has to be adapted massively.

I have seen many satellite offices where people did feel marginalized and unhappy because they had no influence on product direction or felt that top management did not understand their regional needs.
Some recipes to reduce international friction:

 

  1. Get local the local staff to work from the central office.
    If you are in an attractive location like London or Berlin, you can get the people from other countries into your HQ. We have done this for 9flats in Berlin. Currently we have 14 different nationalities working at 9flats. We have French, Italian and Spanish people who moved to Berlin to do local marketing in their home markets. Hence if something is not right for Italy, people will go up to the development guys and tell them until they fix it.
  2.  Hire key people from other countries.
    At Qype we had an English  CTO, French COO, and today we have even a British CEO for Qype, a company headquartered in Hamburg. At 9flats, our CTO is Mexican and our head of sales is from Russia. I like the culture this creates and it has worked very well for us.
  3.  Check you assumptions.
    People might say similar things but their different cultural context will associate totally different meanings. „Consider it done“ means something totally different in different cultures. I was often surprised, that our spanish colleagues often had a more germanic approach to work than the Germans. And language is more stressful than most people admit: I found that people do get tired more quickly if they have to run meetings in English.
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23
May 12

Painting your own painting

This is a very short post but it contains an essential guiding principle for investors in dealing with CEOs.

At this years Annual Meeting at Berkshire Hathaway, someone asked Warren Buffett and Charlie Munger how they intend to keep their managers of Berkshire‘s subsidiaries. This and another question triggered Warren to explain that he does not do micromanagement of his firms. He said he speaks only maybe twice a year to several of the CEOs of companies Berkshire owns. „If we thought that they needed us to be successful, we would get out“ . He then went further to explain: „Charlie and I like to paint our own painting without someone else telling us to use more red or more blue. And we think that the Berkshire CEOs feel the same and want to paint their own painting“.

This attitude contradicts massively with what I sometimes observe in the behaviour of investors in startups. There is a difference, the argument goes: In startups, we often have inexperienced founders, and sometimes more experienced VCs.

Nevertheless: I strongly believe that most VCs would do well to remember the basic truth in “Painting your own picture”.  Nobody becomes a startup CEO because they want to do what Investors tell them to do.

English — 1 comment
21
May 12

Entrepreneurial Fads

It is surprising how quickly entrepreneurs tune into the latest trends. As a group, we seem to do no better than other humans in our judgement. Remember “Second life”, or the now gone “beta” era? Here is a personal collection of fads that I grow tired of.

  1. Everything in the cloud.
    Fact is: I travel a lot. Whether it is on the train, on the plane, or any time I spend in other European countries: More often than not, I don‘t have high speed internet connection. So good bye, Google docs. Goodbye Apple mail. The success of dropbox, and in part evernote can be attributed to their ability to bridge offline times with great syncing.
  2. Co-working.
    As much as I like the idea of sharing (the relative success of 9flats is owed in part to the idea): Coworking does not work in my view. We tried with avocadostore. It was just plain stressful for people to be in a large and changing office environment. In my view, humans need consistency. They need their place, their space, their quiet zones. Coworking usually does not provide this.
  3. Open floor plan.
    Nearly every startup has it. The open floor plan office, with people not even in cubicles, but in rows of desks. Even the CEO – except: did you realise, the CEO never actually sits at his desk? He spends time in meeting rooms, where he can speak to people in private. I have worked in startups where the coffee shop nearby got rich by offering an anonymous setting for a private chat.
  4. Always on.
    Facebook, skype, twitter, whatsapp, email. We all know about the addiction this generates. We check every minute whether something important is being sent their way. Which seems to be an acknowledgement our their very existence. I have recently been partially successful in weaning myself off my mobile gadgets. The result? People start to wonder why I missed their emails for a private get together on a weekend.
  5. Social where there is no social.
    Some transactions benefit tremendously from social media. Others don‘t. I‘m not sure what why a detergent needs „likes“ in order to work.

All these things are great, and they work sometimes. But more often they do not.
Closed doors allow me to be more open with people. Sitting at my own desk makes me more comfortable. Sometimes social media is just a waste of money. Taking my work with me for and switch off my web connection often results in precious and productive solitude.

What are your favourite fads?

English — 6 comments
12
Apr 12

What meetings.io can teach us

Last night, I was drawn into an email dialogue with Joel Kaczmarek, editor in chief of Gruenderszene, one of the Berlin startup blogs. I had declined to vote in a “Startup of the Year” award for the 25 companies that in my view without being arrogant did not contain a startup of the year. Several will be successful financially, but I said that I think that we should aim higher and should at least search for a great idea and a great execution in something we truly admire.

Less than 12 hours later I tested http://meetings.io and it struck me because it combines everything I admire about truly great startups.

Meetings.io focuses on one thing only: it takes down the many barriers we have for video conferences. No need to sign up beforehand, just send a link to a person you want to talk to. The technology has been around for a while as anyone who ever played with chatroulette will confirm.

But applying this technology zealously to one single goal is enough to give you this wow effect. I believe it was not easy for them. Picture quality is still an issue. Bandwith will probably be an issue either tomorrow or the next day. But congrats to the team of meetings.io to show all of us what really matters: Dedication to reducing obstacles. And focus.

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