• How can I tell if I am really an entrepreneur or just somebody who likes talking about being an entrepreneur?

    It was the fall of 2003 and the four of us co-founders were all working from our homes.

    TheLadders was a free product with 15,000 subscribers to our weekly newsletters at that point. We’d get together for a weekly meeting on Tuesday nights at my apartment in the East Village. It being a bachelor pad, and my being a bachelor, meant that hospitality was a generous helping of all the Pringles and salami you could eat. Mmmmmmmm-mmm!

    We’d talk about all the stuff we were going to do over the next week and divvy up the work.  This worked fine at the beginning, but after a few weeks, you just kinda knew that this arrangement wasn’t putting us on the path to prosperity.

    If we were going to make it, we needed to be working together, closely, every day.

    We needed an office.

    So we went looking for office space and found Select Office Suites, a really good-looking and tidy space with 170 offices for rent on an enormous floor at the corner of Sixth Avenue and 23rd Street here in Manhattan.  The office manager Ray showed me around the place, and it had all the characteristics we needed: cheap, cheap and cheap.

    The offices were twelve feet by six feet, and you could just barely fit four desks in there. Ray asked if we wanted an interior office without a window for $1,000 / month, or an exterior office with a window for $1,500 / month. It didn’t take more than a couple seconds for us to rationalize to ourselves:

    You know, sunlight is for sissies anyway. We’ll take the dark box.

    Now Ray is nobody’s fool. He’d seen plenty of start-ups come and go and he filled me in that payment would be 6 months in advance plus one month’s security deposit.  Which meant that our new office space was going to cost $7,000 out of pocket.

    Out of my pocket.

    And this was at a time when I hadn’t gotten a paycheck in 18 months and wasn’t bringing in any dough from this new project either but I sure had dough going out the door the other way.

    It was the entrepreneurial moment: I’d hit that point where you kinda need to figure out what you’re going to do.  And I remember thinking that this could either end up being the greatest decision ever… or it could end up being the stupidest, most expensive hobby I’d ever had.

    So I went over to Ray’s office, pulled out my checkbook and got out my pen:

    November 13th, 2003

    And then filled in “Payee”:

    Select Office Suites, Inc.

    Followed by the amount:


    Then, because “they” want to rub it in, want you to be entirely aware of what a fool you’re being and all, “they” make you write it out again, this time in long form….

    Seven Thousand and 00/100 ——-

    Next comes the Memo:


    And then… and then you come to The Line: the signature line.

    It’s the line that separates the past from the future.

    It’s the line that separates who you were from who you will be.

    It’s the line that separates the people who want to talk about being entrepreneurs from those who just became one.

    It’s the line that separates you from you.

    And the most beautiful thing about The Line is that you get to decide.

    You’ll be standing there — in an empty office park outside of Dallas, or your in-laws’ garage in East Egg, or in the parking lot of the Jack in the Box in Cupertino, or huffing under a cold icy full moon night in Union Square with Coffee Shop twinkling in front of you…. and The Line will be there, and you will be there, and you’ll be there together, and nothing else will be there.

    For just one moment in your life, just one moment… you’ll get to decide who you are.

    What a gift! What a moment! What a treasure from the heavens above to have just this one moment in the whole expanse of time and space and the stretch of days from when you began on this earth to the stretch of days when you’ll leave it…

    …and the only person who can make that decision is you.

    And you may find that on that day, you’ll walk up to the line, and look over to the other side… And look back to where you came from…. And look over again….

    And you may find yourself deciding that it is, in fact, a country too far: too cold and too cruel, too careless and too clobbering for who you can be right now.  And you’ll decide that you need to stay on this side of the line.

    And that’s OK!  The world needs people who do big things at big companies — we entrepreneurs love you and cherish you and want to work our asses off around the clock in order to invent your future for you.  Please! We are here to create for you!

    But for those tiny few of us – for that slice of the population that is too unbalanced and too dreaming and too antic and too fired and too bold and too bored and too much of everything and yet not enough….

    …for those of us for whom the line is not a choice, but a need, The Line is a definition.

    As for me, I knew what I had to do.

    I took my checkbook in hand, and swallowed hard; a comet exploded in my stomach and the hot sweat in my head burst open like I’d been microwaved…

    And I signed myself away and beat on, a boat against the current, borne forward ceaselessly into the future.

  • The Digital Soul, Part VIII: Intention layers

    Intention layers capture the intentions or indications of interest by users via clicks or other indicative behaviors.  From the intention layer, inferences can be made about the user in the form of correlations.  Prior to the 21st century, intention layers required a human to contact another human to indicate intention – via telephone, physical presence, or in written form.

    Intention layers improve their absolute quality with the volume of information over which they are enacted, specificity of the information acted upon, number of intentions expressed, and trackability; but they must not attempt to charge differentially for provisioning based on volume, specificity, number of intentions expressed, or trackability.

    Intention layers segment provision by various aspects: (car-buying, dating, job-seeking, home-seeking, search results, and content pages.)

    Intention layers enable the subsequent layer – inferences – but do not yet monetize the relationship.  As of this writing, in April 2011, the intentions-to-inference transmission interface takes place within the firm, and no market has yet emerged. Using Christensen’s innovation architecture framework, this suggests that the transmission is not yet sufficiently understood, remains interdependent with the intentions layer, and requires additional work to become a modular interface.

    Intention layers must not attempt to charge per action, click, or preference indicated, as these are internal to the expressions or indications and are means, not ends in themselves.

    Examples of intention layers are Google, QVC, direct mail, Match.com, blippy.com, eBay,  Kayak.com, ServiceMagic, and lead gen services.

    As there is no market yet for intentions-to-inference transmissions, there has not yet been the opportunity for inter-firm conflict to arise. Possible sources of conflict are: the inference layer will constantly desire additional increments of information about intentions which could impede the expression of intent in the first place; relevance of inferences within the context of the intentions (somebody clicking on 1950s baseball cards on eBay being shown ads for tree doctors, for example, because that is what is inferred, even though it is out of context, could be a jarring experience); and whether the display or communication of inferences inhibit the display of intention.

  • The Digital Soul, Part VII: Information layers

    Information layers provide the sensory material that users watch, read or listen to.  From the information layer, users generate intentions about possible behaviors. Those intentions take the form of conscious or subconscious user volition, or explicit expressions such as clicks or calling 1-800 numbers.

    Information layers improve their absolute quality with accuracy, timeliness, and breadth of information provided; but they must not attempt to charge users differentially based on accuracy, timeliness or breadth of information provided.

    Information layers segment provision by various aspects: geography, topic (medical advice, financial opinion, sports scores), or source.

    Information layers enable the subsequent layer – intentions – and charge for the delivery of it.  A wide variety of pricing models exist: cost per lead, cost per action, cost per click, or, indirectly, CPM.

    Information layers must not attempt to charge on a per bit, per word, per second, measure or frame, as these are sub-components of the complete sensory experience. They are internal to the provision of the experience:means, not end results.

    (Charging per article is achievable when it comprises the entire experience, such as in distinct articles required for research, but is not achievable when the article comprises a sub-component of the complete experience — the “daily news” experience for example.)

    Examples of information layers are Gawker, Google, Gannet, TechCrunch, Grey’s Anatomy, Pandora radio stations, Twitter.com, ESPN, podcasts, Hulu, and NYMag.com.

    Information layers must provide a sufficient amount of material for users to peruse in order to generate sufficient indications of their intentions.

    Conflict breaks out between the information layer and the intention layer over editorial purity, the “separation of church and state” between editorial and advertising, instances when the desire to monetize attempts to override the provision of accurate information in the interests of generating more indications of intention.

    Conflict also arises over signalling: whether or not the consumption, production or display of information signals an intention or not. If interacting with or participating in the information layer is a signal of intention, it has the tendency of deterring the proper functioning of the information layer and the causing the user to behave in a more constrained manner.

  • The Digital Soul, Part VI: Access layers

    Access layers provide the means for users to consume information in a human-understandable format.  The means for doing so include telecommunications networks, broadcast, newsprint, magazine stock, oral advice from human beings, cable networks or any other media delivery format that allow for human understanding.

    Access layers improve in their absolute quality with higher fidelity, larger pipes, broader distribution or coverage; but they must not attempt to charge users differentially based on fidelity, speed or coverage area.

    Access layers segment provision by various aspects: geography (covering your country, your city or your house), topic (medical experts, financial info, ) or medium (radio, TV, GSM frequency bands, human experts)

    Access layers enable the subsequent layer — information — and can charge for delivering it.  A wide variety of pricing models exist: per sip, all-you-can-eat, time-delimited, periodical delivery, or advertising-supported.

    Access layers must not attempt to charge differentially for the means of access — per access pipe, number of nodes used in conveying information, size of frequency band, etc.  These considerations are internal to the layers’ provision of information — means, not end results.

    Examples of access layers include cable networks, radio broadcast networks, FiOS, expert networks such as Gerson Lehman, Bloomberg terminals, LexisNexis, 3g networks, Whispernet for Kindle, and Netflix.

    Conflict breaks out between the access layer and information layer around pricing, distribution, and positioning.

  • The Digital Soul, Part V: Decisions constitute business

    Decisions constitute business.

    In the industrial age, those decisions concerned, largely, the extraction, manipulation and production of physical goods.  The information businesses of the 19th and 20th century were smaller, but important, predecessors to their 21st century counterparts, and dealt with non-material information goods.

    In the Digital Age, decisions increasingly concern decisions, and the components of decisions, themselves — as examples, Google, Match, Netflix, OpenTable, and Monster sell decisions that humans make about their own behavior.  They do not themselves sell physical goods, nor (with the exception of Netflix) goods commonly considered “content” in the business press, but rather the ability and the propensity for humans to make decisions about their own behavior and information consumption.

    In the IIII Hierarchy, in order for a human to behave, she must have access to information and intend, from which we can infer and provide the ability to interact at times and places, opportunistically inducing trial, testing, or diversion.

    Indicated in bold above, the layers of the IIII Hierarchy constitute information businesses in the 21st century. Each layer facilitates and enables the next, and is itself constrained, in a regular and predictable way.

    Each layer must be as whole, accurate, and complete as possible, as it is the infrastructure enabling the subsequent layer.  Capacity must be orders of magnitude greater than the likely utilization of the subsequent layer – as humans proceed through the component parts of decision making, they process, they think, they consume, far more information than they ultimately act upon.

    This is a difference in kind with physical goods production where waste, by-products and breakage may account for 0.9%, 9% or even in rare cases, 99% of the usage of the raw materials or inputs.

    In information businesses, 99%, 99.9%, or even in rare cases, 99.99%, of the information materials provided to humans via each layer are not acted upon.

    Each layer can not charge, segment or apportion users for incremental quality or quantity.  Because users can not “comprehend without comprehending”, and because comprehension requires order of magnitude more consumption than will ultimately be utilized, humans are definitionally incapable of making decisions about the manner in which a layer is provisioned, instead being appropriately concerned with the information provided.

    Each layer can vary how it provides by aspect: geography, subject matter, topic, source, etc.  As businesses, two different approaches to a particular aspect will generate differing sets of users; if we aggregate two or more of these approaches, this overlap, when combined, will be a max function, when kept separate, a sum function.

    The provisioning of each layer enables the subsequent layer, where monetization occurs.  Therefore, for each layer, entering into the business of the subsequent layer conflates source and production, and typically leads to inefficient or ineffective performance of the present layer.

    Next up!: we’ll proceed to a definition and examination of each layer in the IIII Hierarachy.

  • If words didn’t matter, why are you reading this right now?

    How you use words makes a big difference in how well people listen to your story.

    I should know. I’ve been writing a  weekly newsletter for seven years now, and have built a following from three subscribers to 4,500,000 over that time.  And how I choose the words I use makes the difference between a newsletter breaking through the clutter and having a chance to stir your emotions, and ending up ignored and unread in your inbox.

    For example, the subject lines on some of my best newsletters over the years worked well because they make you want need to know more:

    “Man, I Hate American Airlines”

    “May I have a word with you about your reputation?”


    “I know what you did last summer”

    But this video brought me to the verge of tears with its story about how words count.  It’s 108 seconds, and I think you’ll learn a lesson you will never forget:

    Now reflect on why it is so powerful (I have my answer) and let me know your thoughts in the comments.

  • Leonardo da Vinci’s Resume

    Before he was famous, before he painted the Mona Lisa and the Last Supper, before he invented the helicopter, before he drew the most famous image of man, before he was all of these things, Leonardo da Vinci was an artificer, an armorer, a maker of things that go “boom”.

    And, like you, he had to put together a resume to get his next gig. So in 1482, at the age of 30, he wrote out a letter and a list of his capabilities and sent it off to Ludovico il Moro, Duke of Milan.

    Well, we at TheLadders.com have tracked down that resume, and I’m presenting it to you in honor of da Vinci’s birthday coming up this Friday, April the 15th. You can click on the link below to see the full-size version.

    The translation of this letter is quite remarkable:
    “Most Illustrious Lord, Having now sufficiently considered the specimens of all those who proclaim themselves skilled contrivers of instruments of war, and that the invention and operation of the said instruments are nothing different from those in common use: I shall endeavor, without prejudice to any one else, to explain myself to your Excellency, showing your Lordship my secret, and then offering them to your best pleasure and approbation to work with effect at opportune moments on all those things which, in part, shall be briefly noted below.

    1. I have a sort of extremely light and strong bridges, adapted to be most easily carried, and with them you may pursue, and at any time flee from the enemy; and others, secure and indestructible by fire and battle, easy and convenient to lift and place. Also methods of burning and destroying those of the enemy.
    2. I know how, when a place is besieged, to take the water out of the trenches, and make endless variety of bridges, and covered ways and ladders, and other machines pertaining to such expeditions.
    3. If, by reason of the height of the banks, or the strength of the place and its position, it is impossible, when besieging a place, to avail oneself of the plan of bombardment, I have methods for destroying every rock or other fortress, even if it were founded on a rock, etc.
    4. Again, I have kinds of mortars; most convenient and easy to carry; and with these I can fling small stones almost resembling a storm; and with the smoke of these cause great terror to the enemy, to his great detriment and confusion.
    5. And if the fight should be at sea I have kinds of many machines most efficient for offense and defense; and vessels which will resist the attack of the largest guns and powder and fumes.
    6. I have means by secret and tortuous mines and ways, made without noise, to reach a designated spot, even if it were needed to pass under a trench or a river.
    7. I will make covered chariots, safe and unattackable, which, entering among the enemy with their artillery, there is no body of men so great but they would break them. And behind these, infantry could follow quite unhurt and without any hindrance.
    8. In case of need I will make big guns, mortars, and light ordnance of fine and useful forms, out of the common type.
    9. Where the operation of bombardment might fail, I would contrive catapults, mangonels, trabocchi, and other machines of marvelous efficacy and not in common use. And in short, according to the variety of cases, I can contrive various and endless means of offense and defense.
    10. In times of peace I believe I can give perfect satisfaction and to the equal of any other in architecture and the composition of buildings public and private; and in guiding water from one place to another.
    11. I can carry out sculpture in marble, bronze, or clay, and also I can do in painting whatever may be done, as well as any other, be he who he may

    And if any of the above-named things seem to anyone to be impossible or not feasible, I am most ready to make the experiment in your park, or in whatever place may please your Excellency – to whom I comment myself with the utmost humility, etc.”

    What a fantastic piece of personal marketing! There’s none of his famous backwards-mirror writing here — this letter was intended to be read and to persuade.

    I’m a hopeless pedantic, so of course I’m going to take this opportunity to let you know what you can learn from Leonardo’s resume …

    You’ll notice he doesn’t recite past achievements. He doesn’t mention the painting of the altarpiece for the Chapel of St Bernard; he doesn’t provide a laundry list of past bombs he’s built; he doesn’t cite his prior employment in artist Andrea di Cione’s studio.

    No, he does none of these things, because those would be about his achievements, not the Duke’s needs.

    Instead, he sells his prospective employer on what Leonardo can do for him.

    Now imagine being the Duke of Milan and receiving this magnificent letter / resume from the young Wunderkind of Florence. The specific descriptives paint a wonderful picture (that is, if you’re a Renaissance Duke) of siege engines and bombardments and mortars and trench-draining and bridges to defeat the enemy. You can almost imagine the scenes that ran through the Duke’s head as he held this letter in his hands and read through Leonardo da Vinci’s bold statements of capabilities.

    I mean, who wouldn’t want “kinds of mortars; most convenient and easy to carry; [that] can fling small stones almost resembling a storm”? Sounds pretty enticing.

    And that’s exactly what your resume needs to do, too. Not the laundry list / standard bio that talks about you, but the marketing piece that talks about the benefits to your future employer and how you fit into his or her needs and desires.

    So it turns out that even on his 559th birthday, this remarkable fellow Leonardo da Vinci is still teaching us something about the future. What a genius. ..

    Here’s wishing you an illustrious week, Readers!

    *** This post is a version of  my original in January 2010, updated for 2011 to note da Vinci’s birthday! ****

    UPDATE: I love this spoof of da Vinci’s resume from the very musing Ed Weissman:

    1. I have a sort of extremely light and strong functions and modules, adapted to be most easily ftp’d, and with them you may pursue, and at any time combine them with others, secure and indestructible by standard mean time to failure of hardware and denial of service, easy and convenient to compile and catalog. Also methods of unzipping and storing the data of the customers.

    7. I will make secure firewalls, safe and unattackable, which, entering among the hackers with their utilities, there is no body of crackers so great but they would break them. And behind these, software could run quite unhurt and without any hindrance.

    10. In times of low revenue I believe I can give perfect satisfaction and to the equal of any other in maintenance and the refactoring of code public and private; and in guiding data from one warehouse to another.

    Check out the whole thing on his site, here.

  • The Digital Soul, Part IV

    Business is the voluntary exchange among free adults of goods and services.  We’ve typically made a distinction between goods and services having a physical form or impact and those for which the good or service is not material, or can not be touched.  It is the difference between a truck, a chair, or a razor on one hand, and insurance, trademarks, stocks (and lists of stock prices) on the other.

    With the coming of the Information Age, more goods have been released from their physical form and exist only as information: music has lost the LP, books the paper, games the physical board.  Human behavior has also been productized in the Information Age – no longer do we need to fill out the form and mail it in for more information, show up at Ladies Night to meet the opposite gender, or pick up the phone and “call now” because operators are standing by.  In what could only be a dream-come-true for the behavioral economists of our era, the information-seeking, intention-displaying, inference-driving, interaction-enabling of human behavior have exploded in scale since losing the requirements of physical actions by users (other than, it should be noted, the movement of keys on a keyboard or the mouse on a mouse pad, we have not entered into a world of pure telepathy… yet.)

    Students of business want to analyze the behaviors of present businesses and study the history of past ones in order to understand the “why” of the development of businesses.

    When students of business talk about McDonald’s being a real estate business, enabled by the automobile, that happens to sell food at their physical locations, we are talking about root causes and the underlying nature of the business, rather than what they appear to be on the surface: in this case, a fast way to get burgers and fries.

    To understand what business the various successful business models of the Internet are truly in, we need to better understand their nature and the nature of transformation in our time.

    The development of new technologies leads to the development of new businesses.  The rise of the railroad, the telegraph, the steel mills, brought about, and were brought into being by, the Industrial Revolution.   That revolution overturned the conception of what goods we could produce and at what scale.  It also separated the production of goods into several component hierarchies – raw materials, energy, distribution, capital goods, consumer durables, consumer packaged goods – that were novel at the time of their creation and changed considerably the understanding of the farmer receiving his Sears Roebuck catalog out in the plains of Nebraska of what was meant by “goods”. It was no longer possible to think of them all as being the same kind of thing.

    On a similar model, the Information Age reinvents the intangible.

    But rather than a revolution, I think this transformation is a reflection. We have reconstructed and re-imagined our societies in bits — sometimes quite literally, as in Second Life – even as Facebook maps our relationships with friends & family, 1 in 6 marriages now start online, my Kindle books don’t “exist”, and there is a thriving market for swords, potions and gold that exists only in the cyberspace World of Warcraft.

    We are reflecting our world through the means of digital bits, and we are also able to reflect upon ourselves: who we are, what we are doing, what we like, which things give us pleasure or who we want to create communities with.  The discoveries enabled by Netflix, Amazon, Pandora or Hunch teach us more about who we are.

    We’ve been happy to refer to these as online, or internet, or web-enabled businesses, but the time has arrived to understand and define them better, because they have different characteristics.

    Are dating sites, Netflix, a program that teaches chess, Google, prediction markets, Kindle books, Kiva, iTunes, GoDaddy, virtual currencies, job sites, and Pandora all in the same intangibles goods business?  If not, what are they?

    Is a dating site a matchmaking service? A content site?  A seller of intangible goods?  A subscription business?  Those in the online dating industry can tell you: yes and no.

    And as a practitioner in an online information business, I can tell you that this lumping of all online businesses into one undifferentiated framework leads to a worse, rather than a better understanding of our businesses.  Even thought we acknowledge the topical differences between dating and movies and books and music and jobs, this lack of a conceptual framework confuses the analogies we can use to understand our businesses, undermines the selection of the right metrics to drive the business, and turns management in the Information Age into a series of happy accidents rather than deliberate planning.

    In my post on the IIII hierarchy, I broke out an Information Age business framework:

    - Access
    - Information
    - Intention
    - Inference
    - Interaction
    - Time-space
    - Trials & diversions

    Each of these layers represents a human need in making economic decisions:

    - We need to be able to consume the information in human-understandable form.
    - We take information in with our senses – we read, watch, listen.
    - We make decisions based on that information to the best of our rational ability.
    - By our actions, we also enable experts in that area, whether human or machine, to be able to suggest other information that will be of interest to us.
    - From the above comprehension, decisions, and implications, we have desires to interact with people or products.
    - We make decisions to do so at a particular time or place, whether online or offline, with others or alone.
    - From which comes the ability of businesses to entice or induce us to try out new things.

    Over the course of the next several posts, I’ll assert that online businesses are not just one undifferentiated mass, but rather that they should be categorized according to the nature of the economic behavior they are enabling or supporting.

    It is worth noting that in the 20th century, the newspaper was able to stretch across all of these layers – from providing the physical platform that gave the industry its name, to advertisements, to announcements, to coupons, and so on: the newspapers were the information appliance tool of that century.

    As new technologies grow strong, we’ll see businesses shrinking back from trying to own more than one of these layers.  That is not to say we won’t see legacy businesses that stretch across two or more of these layers (the Wall Street Journal as an excellent example) but these vestigial exceptions will grow increasingly rare and idiosyncratic, like Japanese holdouts from World War II or the Medieval German spoken in Southern Pennsylvania.

    In discussing each layer in the Information Age hierarchy, I’ll discuss what they must, can, could and mustn’t, do.  See you tomorrow!

  • Congratulations to this week’s most active recruiters on the Career Graph

    We have thousands of recruiters using MyPipeline each week to communicate with TheLadders’ 4.5mm members.  Here are the cleverest and most effective recruiters using TheLadders this week:

    So what’s going on here?  For recruiters, MyPipeline is a phenomenal way to get your message out:

    1. You invite who you want to see your jobs from our 4.5 mm subscribers
    2. Build a warm pipeline of competitive candidates from companies in your industry.
    3. You send your Hiring Alerts (for free) to your followers anytime — we take care of sending it to their inboxes.
    4. The highest read rate (43%) in the industry means the best social referrals for your job.
    5. It’s the largest Passive Network on the planet.

    Read more

  • Eisenmann’s Treasure Chest

    If you’re an entrepreneur, you couldn’t possibly do better than to go to Tom Eisenmann’s blog Platforms and Networks, cancel the rest of your day, lock the door, and r-e-a-d.

    The top two posts, which should take you one day each to read, are:

    Launching Tech Ventures, readings


    Compilation of the Web’s Best Advice for Entrepreneurs.

    These are two big meaty treasure lockers full of the best of the best — you should thank Prof. Eisenmann for curating for you and saving you untold wandering hours.

    These excellent collections of great blogs make me feel appropriately sheepish about my own entries in the “entrepreneur’s story” category:

    How can I tell if I am failing at my entrepreneurial venture or start-up?

    How to raise angel money with the ’send’ button: TheLadders’ $635,000 angel round

    OK, you can go now.