art

The Art of
the Start

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Also by Guy Kawasaki
Database 101
ART
Hindsights
How to Drive Your Competition Crazy
Rules for the Revolutionaries
O F T H E
Selling the Dream
The Computer Curmudgeon
The Macintosh Way
START
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THE TIME-TESTED,
BATTLE-HARDENED GUIDE FOR
ANYONE STARTING ANYTHING
Guy Kawasaki

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Many years ago Rudyard Kipling gave an address at McGill Univer-
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Published by the Penguin Group
sity in Montreal. He said one striking thing which deserves to be re-
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or position, or glory, he said: "Some day you will meet a man who
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cares for none of these things. Then you will knoiv how poor you are."
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To my children: Nic, Noah, and Nohemi.
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80 Strand, London WC2R ORL, England
A child is the ultimate startup, and I have three.
First published in 2004 by Portfolio,
a member of Penguin Group (USA) Inc.
This makes me rich.
16 15 14 13
Copyright (c) Guy Kawasaki, 2004
All rights reserved
<i
Publisher's Note
This publication is designed to provide accurate and authoritative information in regard to
the subject matter covered. It is sold with the understanding that the publisher is not en-
gaged in rendering legal, accounting, or other professional services. If you require legal ad-
vice or other expert assistance, you should seek the services of a competent professional.
LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA
Kawasaki, Guy, 1954-
The art of the start: the time-tested, battle-hardened guide for anyone starting
anything / Guy Kawasaki.
p. cm.
Includes bibliographical references and index.
ISBN 1-59184-056-2
1. New business enterprises. 2. Entrepreneurship. I. Title.
HD62.5.K38 2004 658.l'l--dc22 2004044773
This book is printed on acid-free paper. (c)
Printed in the United States of America
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Without limiting the rights under copyright reserved above, no part of this publication may
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Acknowledgments
In giving advice, seek to help, not please, your friend.
-- S o l o n
y thanks to all the people who helped me with this book.
First, Rick Kot at Viking, because this book was his idea.
Furthermore, he tolerated my crazy ideas--including the
M title and subtitle and having a cover-design contest. Every
author should be so lucky to work with an editor like Rick. (The con-
verse is not necessarily true.)
Second, Patty Bozza and Alessandra Lusardi of Viking, and the
Portfolio team: Joe Perez, Will Weisser, and Adrian Zackheim, as well
as Lisa "Her Highness" Berkowitz. Behind every successful author
stands an amazing team.
Third, a group of readers who truly sought to help, not please,
me. They spent many hours reading and refining my drafts. My eternal
gratitude to: Marylene Delbourg-Delphis, George Grigoryev, Ronit
HaNegby, Heidi Mason, Bill Meade, John Michel, Anne P. Mitchell,
Lisa Nirell, Bill Reichert, Gary Shaffer, Rick Sklarin, and Andrew Tan.
Fourth, a group of people who contributed by making sugges-
tions, course corrections, and additions. They are: Mohamed Abdel-
Rahman, Anupam Anand, Imran Anwar, Dave Baeckelandt, A. J.
Balasubramanian, Steve Bengston, David Berg, Scott Butler, Tom By-
ers, Antonio Carrero, Lilian Chau, Pam Chun, Tom Corr, Stephen
Cox, Deborah Vollmer Dahlke, Martin Edic, Bob Elmore, Eric Erick-
son, Elaine Ferre, Pam Fischer, Sam Hahn, Lenn Hann, Steve Holden,
Hilary Horlock, Katherine Hsu, Doug Ito, Bill Joos, John Michel,
Cindy Nemeth-Johannes, Tom Kosnik, Pavin Lall, Les Laky, Molly
\/M

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Lavik, Eric "I'm Open" Lier, Anthony Lloyd, Robert MacGregor,
Contents
Tom J^teade, Chris Melching, Fujio Mimomi, Geoffrey O'Neill, Bola
Odulate, Colin Ong, Steve Owlett, Lakiba Pittman, Gina Poss, Julie
Pound, Warrick Poyser, the Propon Team, Richard Putz, Anita Rao,
A friend is one to whom you can pour out the contents of
Jim Roberts, Marty Rogers, John Roney, Aaron Rosenzweig, Michael
your heart, chaff and grain alike. Knowing that the gentlest of
Rozenek, Brian Rudolph, David Schlitter, John Scull, Izhar Shay, Marc
hands will take and sift it, keep what is worth keeping, and
Sirkin, Marty Stogsdill, Judy Swartley, Russ Taylor, Larry Thompson,
with a breath of kindness, blow the rest away.
Amy Vernetti, Ryan Walcott, Shelly Watson, Tim Wilson, Ryan Wong,
--anonymous
and Jan Zones.
Fifth, the people who helped me to market this book: Alyssa
Fisher, Sandy Kory, Tess Mayall, Ruey Feng Peh, Shifeng Li, Shyam
Read Me First xi
Sankar, Betty Taylor, and Kai Yang Wang.
Sixth, my loving and lovely wife, Beth. Thank you for bearing
Causation
with me as I wrote this book during a very busy time in our lives, and
for the best twenty years of my life.
Chapter 1: The Art of Starting 3
Seventh, Sloan Harris of International Creative Management.
Articulation
Thank God for Sloan--otherwise, Rick Kot and Portfolio would have
eaten me alive.
Chapter 2: The Art of Positioning
29
Chapter 3: The Art of Pitching
44
Eighth, Patrick Lor and the gang at iStockPhoto.com who helped
this graphically challenged author.
Chapter 4: The Art of Writing a Business Plan
66
Finally, John Baldwin, Ruben Ayala, and Ken Yackel of the Ice
Oasis Skating and Hockey Club. Were it not for them, I would have
Activation
79
finished this book six months earlier. But then I wouldn't be the best
Chapter 5: The Art of Bootstrapping
fifty-year-old, transplanted Hawaiian, beginner ice hockey player in
Chapter 6: The Art of Recruiting
100
Silicon Valley. And this is certainly a desirable niche to fill.
Chapter 7: The Art of Raising Capital
119
Proliferation
Chapter 8: The Art of Partnering
151
Chapter 9: The Art of Branding
167
Chapter 10: The Art of Rainmaking
192
Obligation
Chapter 1 1 : The Art of Being a Mensch
211
Afterword
217
Index
219
V l l l
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Read Me First
The most exciting phrase to hear in science, the one that heralds
new discoveries, is not "Eureka!" (I found it!) but "That's funny. . . . "
-- Isaac Asimov
here are many ways to describe the ebb and flow, yin and
yang, bubble-blowing and bubble-bursting phases of busi-
ness cycles. Here's another one: microscopes and telescopes.
In the microscope phase, there's a cry for level-headed
thinking, a return to fundamentals, and going "back to basics."
Experts magnify every detail, line item, and expenditure, and then
demand full-blown forecasts, protracted market research, and all-
encompassing competitive analysis.
In the telescope phase, entrepreneurs bring the future closer.
They dream up "the next big thing," change the world, and make
late-adopters eat their dust. Lots of money is wasted, but some crazy
ideas do stick, and the world moves forward.
When telescopes work, everyone is an astronomer, and the world
is full of stars. When they don't, everyone whips out their micro-
scopes, and the world is full of flaws. The reality is that you need both
microscopes and telescopes to achieve success.
The problem is that this means gathering information that is
spread among hundreds of books, magazines, and conferences. It also
means talking to dozens of experts and professionals--if you can get,
and afford, an audience. You could spend all your time learning and
not doing. And doing, not learning to do, is the essence of entrepre-
neurship.
The Art of the Start alleviates this pain. My goal is to help you
use your knowledge, love, and determination to create something
Y l

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great without getting bogged down in theory and unnecessary details.
My4kpresumption is that your goal is to change the world--not study
it. If your attitude is "Cut the crap and just tell me what I need to do,"
you've come to the right place.
Causation
You might be wondering, Who, exactly, is "you"? The reality is
that "entrepreneur" is not a job title. It is the state of mind of people
w h o want to alter the future. (It certainly isn't limited to Silicon Val-
ley types seeking venture capital.) Hence, this book is for people in a
wide range of startup endeavors:
9 guys and gals in garages creating the next great company
* brave souls in established companies bringing new products and
services to market
* saints starting schools, churches, and not-for-profits
Great companies. Great divisions. Great schools. Great churches.
Great not-for-profits. When it comes to the fundamentals of starting
up, they are more alike than they are different. The key to their suc-
cess is to survive the microscope tasks while bringing the future closer.
Let's get started.
Guy Kawasaki
Palo Alto, California
Kawasaki@garage.com

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C H A P T E R 1
The Art of
Starting
Everyone should carefully observe which way his heart
draws him, and then choose that way with all his strength.
--Hasidic saying
GIST (GREAT IDEAS FOR STARTING THINGS)
use a top-ten list format for all my speeches, and I would love to
begin this book with a top-ten list of the most important things an
entrepreneur must accomplish. However, there aren't ten--there
are only five:
1. MAKE MEANING (inspired by John Doerr). The best reason to start
an organization is to make meaning--to create a product or service
that makes the world a better place. So your first task is to decide how
you can make meaning.
2. MAKE MANTRA. Forget mission statements; they're long, boring, and
irrelevant. No one can ever remember them--much less implement
them. Instead, take your meaning and make a mantra out of it. This
will set your entire team on the right course.
3. GET GOING. Start creating and delivering your product or service.
Think soldering irons, compilers, hammers, saws, and AutoCAD--
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whatever tools you use to build products and services. Don't focus on
The truth is that no one really knows if he* is an entrepreneur un-
fetching, writing, and planning.
til he becomes one--and sometimes not even then. There really is only
one question you should ask yourself before starting any new venture:
4. DEFINE YOUR BUSINESS MODEL. No matter what kind of organi-
zation you're starting, you have to figure out a way to make money.
Do I want to make meaning}
The greatest idea, technology, product, or service is short-lived with-
out a sustainable business model.
Meaning is not about money, power, or prestige. It's not even
5. WEAVE A MAT (MILESTONES, ASSUMPTIONS, AND TASKS). The
about creating a fun place to work. Among the meanings of "mean-
final step is to compile three lists: (a) major milestones you need to
ing" are to
meet; (b) assumptions that are built into your business model; and
(c) tasks you need to accomplish to create an organization. This will
* Make the world a better place.
enforce discipline and keep your organization on track when all hell
* Increase the quality of life.
breaks loose--and all hell will break loose.
* Right a terrible wrong.
* Prevent the end of something good.
Goals such as these are a tremendous advantage as you travel
MAKE MEANING
down the difficult path ahead. If you answer this question in the neg-
ative, you may still be successful, but it will be harder to become so
/ have never thought of writing for reputation and honor. What I
because making meaning is the most powerful motivator there is.
have in my heart must come out; that is the reason why I compose.
It's taken me twenty years to come to this understanding.
--Ludwig van Beethoven
In 1983, when I started in the Macintosh Division of Apple
Many books about entrepreneurship begin with a rigorous process of
Computer, beating IBM was our reason for existence. We wanted to
self-examination, asking you to determine if you are truly up to the
send IBM back to the typewriter business holding its Selectric type-
task of starting an organization. Some typical examples are
writer balls.
In 1987, our reason for existence became beating Windows and
* Can you work long hours at low wages?
Microsoft. We wanted to crush Microsoft and force Bill Gates to get
* Can you deal with rejection after rejection?
a job flipping fish at the Pike Place Market.
* Can you handle the responsibility of dozens of employees?
In 2 0 0 4 , 1 am a managing director in an early-stage venture capi-
tal firm called Garage Technology Ventures. I want to enable people to
The truth is, it is impossible to answer questions like this in ad-
create great products, build great companies, and change the world.
vance, and they ultimately serve no purpose. On the one hand, talk
The causation of great organizations is the desire to make mean-
and bravado are cheap. Saying you're willing to do something doesn't
ing. Having that desire doesn't guarantee that you'll succeed, but it does
mean that you will do it.
mean that if you fail, at least you failed doing something worthwhile.
On the other hand, realizing that you have doubt and trepidation
doesn't mean you won't build a great organization. H o w you answer
''If only defeating sexism were as simple as throwing in an occasional he/she, she, her, or
these questions now has little predictive power regarding what you'll
hers. I use the masculine pronouns merely as a shortcut. Successful entrepreneurship is blind
actually do when you get caught up in a great idea.
to gender. Don't look for sexism where none exists.
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o Excellence--77
|XERCISE
* Leader--106
Complete this sentence: If your organization never existed, the world
* Quality--169 *
would be worse off because .
Fortune (or Forbes, in my case) favors the bold, so I'll give you
some advice that will make life easy for you: Postpone writing your
mission statement. You can come up with it later when you're suc-
cessful and have lots of time and money to waste. (If you're not suc-
MAKE MANTRA
cessful, it won't matter that you didn't develop one.)
Instead of a mission statement and all the baggage that comes with
Close your eyes and think about how you will serve your customers.
What kind of meaning do you see your organization making? Most
it, craft a mantra for your organization. The definition of mantra is
people refer to this as the "Why" or mission statement of an organi-
A sacred verbal formula repeated in prayer, meditation, or incanta-
zation.
tion, such as an invocation of a god, a magic spell, or a syllable or
Crafting a mission statement is usually one of the first steps en-
portion of scripture containing mystical potentialities."1"
trepreneurs undertake. Unfortunately, this process is usually a painful
and frustrating experience that results in exceptional mediocrity. This
What a great thing a mantra is! H o w many mission statements
is almost inevitable when a large number of people are commissioned
evoke such power and emotion?
to craft something designed to make an even larger number of people
The beauty of a mantra is that everyone expects it to be short and
(employees, shareholders, customers, and partners) happy.
sweet. (Arguably, the world's shortest mantra is the single Hindi word
The fundamental shortcoming of most mission statements is that
Om.) You may never have to write your mantra down, publish it in
everyone expects them to be highfalutin and all-encompassing. The
your annual report, or print it on posters. Indeed, if you do have to
result is a long, boring, commonplace, and pointless joke.* In The
"enforce" your mantra in these ways, it's not the right mantra.
Mission Statement Book, Jeffrey Abrams provides 301 examples of
Following are five examples that illustrate the power of a good
mission statements that demonstrate that companies are all writing
mantra:
the same mediocre stuff. To wit, this is a partial list of the frequency
with which mission statements in Abrams's sample contained the
* Authentic athletic performance (Nike).*
same words:
* Fun family entertainment (Disney).J
* Rewarding everyday moments (Starbucks).11
* Best--94
* Think (IBM).
* Communities--97
* Winning is everything (Vince Lombardi's Green Bay Packers).
* Customers--211
"Jeffrey Abrams, The Mission Statement Book (Berkeley: Ten Speed Press, 1999), 25-26.
jTbe American Heritage Dictionary of the English Language, 4th ed., s.v. mantra.
:f If you insist on creating a mission statement, go to www.artofthestart.com and click on the
tScott Bedbury, A New Brand World: 8 Principles for Achieving Brand Leadership in the
mission statement generator link (http://www.unitedmedia.com/comics/dilbert/career/bin/
21st Century (New York: Viking, 2002), 5 1 .
ms2.cgi.). This will take you to the Dilbert mission statement generator and save you thou-
Jlbid., 52.
sands of dollars.
"Ibid., 53.
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