You’ve decided to ignore the date on the calendar and throw caution to the wind saying that today is a brand new day. That’s right, a new beginning can happen at any time, at any moment.

Last week I wrote about how to recognize when a pivot is needed in life or in your startup. If you are going to pivot, then the next natural question is: what direction should you take? 

 Your past was never meant to create history, but to build the future.

Oftentimes with founders, they need to pivot but are not sure in which direction or how. I am defining pivot for a startup as either changing WHO you are serving or WHAT the product is. 

Many people do not know that Kabam started as a corporate social network, then built fan communities for TV shows and sports teams, then moved into Facebook gaming and finally sold as a top mobile gaming company for over a billion dollars in 2017. A lot of experience in one company, making me an expert in a very very very very small slice of the world, very small. Total number of pivots: 3.5

Reflecting on each pivot, we looked at the following things:

1. Markets
2. Core Competencies – Team
3. Passion points

Looking at each one of these for your life and your startup can shed some light on which direction you should take. And hopefully, the direction you take is forward. 

Markets

The most important thing was making something that people wanted. It was clear that our first try – our corporate social network – no one wanted. 

Within 8 months, we had done three product iterations, thousands of welcome emails and only had 1400 registered users, 20 cease and desist letters, and 5 daily active users which were probably our moms. It did not take a genius for us to know that no one wanted our product. 

At this point, opportunity knocked for us and many other developers. Facebook opened up their Developer Platform to third-parties. Facebook held a hackathon and within one weekend app developers had millions of users from a few hours of building apps. It was like the old adage, if you can’t bring people to church, you should bring church to people.

For us, it became: 

If you can’t bring users to you, then go to where the users were. 

This fundamentally changed the culture and trajectory of our company. We decided to focus on Facebook and at the same time change our product. Using Facebook made discoverability easy because that’s where the users were.  Our userbase began to grow, we gained traction and soon we had a market. [a]

Markets are like gravity, they get you every time.  

Core Competencies – Team

Building a startup is just plain difficult. Any advantage you bring to a space can be the difference in helping the company progress and stay alive which is a requisite to grow.

At YC I was able to work with some of the brightest founders, and whenever a team was trying to figure out what to pivot to we’d always ask them: 1) what are the things you’re good at that hopefully not a lot of people are good at and 2) why or what makes you want to chase the new idea? The goal was to discover some hidden talent or secret advantage they had that could give them an edge. 

Because no one wanted to use our corporate social network, we spent a lot of our time sending (un)wanted Welcome emails to people. Soon we found that we had a little bit of traction among the IT departments of small and medium sized businesses. [b] There were some that were willing to pay us to license the product in their company. In order to provide this type of product and company, we needed a completely different team with different competencies. We needed to become sales people that did cold outreach. After a few weeks of “smile and dial” posters in front of us, we decided this wasn’t core to who we were, and we did not like it enough to build that competency. A few years later, Atlassian, a company that makes internal social networks,would go onto IPO for over a billion dollars - a great team meets a great market. It was not our team or our market, we had our sights set on something different. 

In life, a strengths-based approach helps you go forward in choosing what your core competencies are as a person. Choosing something you are already good at gives you advantages that are not afforded to others. If you have strengths in things that are valuable and not as many people know – even better.

Building on Passion Points

The usual life advice is to “follow your passion”. However passion, like energy, can wane over time. Is this something that can sustain the ups and downs or enable you to cover living expenses? Instead, when considering change, think about why you really want to change and what value aligns with it. You can’t go wrong by following your values. Passion points though are incredibly valuable as they can indicate what you value. 

Building a corporate social network was all about our users enhancing their reputation at work.  But this wasn’t something that people were so passionate about that they would go home to google more information. This is problematic from a marketing point of view at that time since we were working in a space that people did not naturally look for, it was hard to “benefit from SEO marketing”. 

We began taking a closer look at what we spent time googling in our spare time and discovered the following:

Every Monday we would leave early to watch 24, a popular TV show at the time and then spend Tuesday morning talking about it. We’d debate theories using points we researched on the internet. We discovered that there was not a place on the internet where we could find out about our favorite TV shows. There was no Rotten Tomatoes or Flixster for TV. This also meant it must be difficult for show creators  to get in touch with their audiences and fans. Thus, the idea for Watercooler’s community apps for TV shows and eventually sports apps was born. We grew these communities on Facebook to over 30 million registered users and when ABC network wanted to distribute their TV shows on Facebook, they did not call Facebook, they called us.

Passion points are clues to what your values are, which guide the direction of the pivot. When considering a pivot, we started with ourselves and our own interests to find an ecosystem where we could provide value. 

When faced with a pivot, we looked at these three things: markets, core competencies and passion points. These can help guide the direction to which you need to go. 

Regardless of how you fail, when you fail or why you fail, may you always fail forward. 

Notes:
[a] Much has been written on the most important ingredient of startup life. I am in agreement with Marc Andressen, the former founder of Netscape and now prominent A16Z venture capitalist:  “When a great team meets a lousy market, market wins. When a lousy team meets a great market, market wins.When a great team meets a great market, something special happens.” https://pmarchive.com/guide_to_startups_part4.html

[b] Our stats – 5 daily active users (DAU) –  is pretty dismal for a consumer company (B2C), which is how we are building it. For a B2B company, this might be okay given that pilots matter and the person purchasing the product may be different than using the product. Usage does matter in B2B but revenue does seem to trump all. 

Follow me on Twitter @hollyhliu!

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January 2020 ushered in a new year and a new decade, signaling change for many people. Change involves either a pivot towards or away from something. A successful pivot requires a bit of art, a dose of luck, and a lot of hard work. Granted, some of these are out of your control, but focus on what you do control: your mindset.

The first step to change is recognizing that you need to change.

But before even getting to that step, how do you recognize you need a pivot? Here are some signs that a pivot may be in store for your life and your business:

You have exhausted all possibilities on growth

When a baby is first born, milestones happen on a daily basis. When the baby doesn’t grow at a certain pace, something is wrong. In the early phases of a product or startup, growth is so critical that if you’re not growing, then something is wrong.

If you are not growing, you are dying.

For founders, the short-term goal for any startup is growth and progress, usually measured in revenue or usage.

We raised seed money for our first product — a corporate social network. After seven months of emailing all of our friends and family, three product iterations, cold calling companies, we only had 1400 users, 20 cease and desist letters and 5 daily active users. It doesn’t take a math genius to know that we were dead unless we did something drastic.

If your company or product is not growing after exhausting all possibilities across a reasonable span of time (3–6 months), then it’s time to pivot.

But, what if your growth is okay but not great? Look to your long term goal for your company. If it’s venture backed, you should research benchmarks within your industry, factoring in stage and size. YC pushes founders to grow 10% week over week, but on average their companies grow around 5–7% week over week [1]. For a Series A, revenue growth of about $1-$2MM in ARR for SaaS companies and organic month over month growth within 12–18 months are expected. [2]Note:These are rough benchmarks, it’s best if you do your own research. Basically if you are VC backed, you need to grow really fast in a short amount of time.

The success case is not winning.

Early in life if you’re not surviving then you are dying — and survival looks like growth. But change is more enduring when you can define the end goal. Even with kids, it’s easier to model the behavior you want from them rather than telling and showing what you do NOT want.

It is better to run towards something than run away from something.

In order to run towards something, you need to think about the long term, especially when you finish what winning looks like. In life, only you can determine what winning looks like. People can be successful and (e.g. make a lot of money, achieve a great feat), but they may not have felt like they have won. This is akin to winning the battle but not the war. Make sure your life is not set up for a series of successes but fail to win.

Success is more easily measured for a business. A successful business sells a product or service at a profit and usually that’s what winning looks like. However, this isn’t the case for every startup, especially VC backed tech startups. If it were, then companies like Amazon or Uber could not exist. Amazon and Uber do not make a profit but focus on growth. Depending on the type of company you want to build, the winning case may look very different.

We were successful, but we didn’t win.

We took $500K in seed funding from venture capitalists before we had the product. You should consider the goals of the investors that give you money and what is their winning case. The pressure on growth from venture capital is enormous because becoming a winning venture capitalist is dependent on the Power Law. In short, very few companies will make a lot of money for venture capitalists — which means growth.

The founder will continually move between growth and profitability. Yes at some point the founder will have to make a profit, and when even that happens making a profit may not even be winning. For us, we needed to have a profit and grow.

We were more than 1,000 employees and had several profitable games. Some of these had two people running them; however, we decided to shutter or sell profitable games. This seems counter-intuitive, the games had been around for awhile, butgrowth stalled. Profitability wasn’t good enough to overcome our low growth rate. Selling the profitable games would help us focus the entire organization on our 1–2 winning games.

Exogenous conditions cause irrecoverable harm.

Sometimes life can force a pivot. A loved one gets sick, you get injured, or a bundle of joy comes earlier than anticipated. In many of these cases a pivot is forced regardless of how many times you ask “why me” or “why now”, it does not change the fact that you need to change.

In startups, forced pivots can be caused by market conditions such as a recession or external factors like Google changing its algorithm. Basically any change outside of the startup’s control that is disaster for the business can force a pivot.

We had a problem. The day we were to receive funding for our Series B in our bank account was the same day Bear Stearns and Lehman Brothers crashed. For a whole week we didn’t hear from our Series B investors. Finally they told us they could not fund us. They were too scared. With no investment money coming in and ad-revenue tanking, we built Kabam. Nine years later that forced pivot became a billion dollar company.

No matter what causes the pivot, recognizing the need to do so is more important than the reasons why a pivot is needed. And sometimes “disasters” might be the “why” to pivot into a billion dollar business.

You cannot create a flywheel in your life or business

A flywheel is something that gets faster the more it moves. It should feel like nudging a snowball down a hill. It gets bigger and bigger with very little help. In personal life, you can create a flywheel by looking at the tiny changes that will build remarkable results in the form of atomic habits.[3]

If you do not create a flywheel, it feels like pushing a snowball uphill. The more you try, the more difficult it gets. Successful companies create a flywheel by exposing (or “exploiting”) one thing in the ecosystem setting off a chain reaction of bigger events. Dominant companies use flywheels to build moats. For example, Musical.ly (now TikTok) exploited app search engine optimization to help them climb the charts (flywheel), once they got their they had viral content that allowed them to share, and when shared the watermark was visible on every video shared (moat), making it hard now for any new competitor to grow. Now, instead of the snowball going uphill, it goes downhill with very little help, picking up every snowflake along the way.
 
In 2009 we launched our game “Kingdoms of Camelot” on Facebook when many game developers were using viral tactics to get users. For us, no matter how hard we tried, we couldn’t get our moms and our aunts to try building their kingdoms in Camelot, to raise armies and then go to war. In short, our game content was not inherently viral. We appealed to people who were already gamers, but did not have games for them on Facebook. We had to pay for advertising to acquire players, which was not something Facebook game developers did, making the prices cheap. This was our flywheel.Because we were able to acquire users cheaply, they would make new friends, engage and spend money within the game. The pyramid was flipped upside down. Instead of playing a game because your existing friends were and to not be “left out”, we provided another type of game where you played because you liked the game and where you could meet others who shared their passions — “never feeling left out”.

Acquiring users through paid advertising was our flywheel. One small nudge started a chain reaction and our first game took off. Of course other things fell into place, but that was the catalyst to move from pushing a snowball uphill versus downhill.

When looking for your flywheel, boil it down to the one thing that needs to go right for your business to work well. For us, it was finding players cheaply. We went looking in places no one else was looking at the time. Those are the best places to find treasured flywheels.

The team won’t be able to move the business from initial growth to sustained growth.

Sustained change and deep fulfillment in life happens when you are doing what you are meant and built to do. It is easier to do something you were created to do.

This is similar to a strengths based approach to what you should do with your life. Remember when Michael Jordan quit basketball to play baseball and then went back to basketball? Even Michael Jordan can’t be good at all sports let alone two sports. If he can’t do it, what makes us think we can be good at something that is not rooted in our strengths?

For your startup, imagine the success case three to six months out: are you the team to make it successful? Can you hire the team to make it successful? Is it the type of company you want to build?

Going back to our first product — a corporate social network. We decided to pivot. Part of the reason is that we were the wrong team to be running this type of business. It was clear if we were to continue to be successful, we would have to be superb at sales; however, all of us had consumer backgrounds — spending the last five years not just building consumer products but also analyzing and investing in them. Our intuition and expertise were in different areas. It was as if we were raised by wolves but expected to be successful humans.

Growing up in the US schools give you a broad foundation and reward you for being good in all of them; however, to be exceptional at everything is impossible. Pick one or two things to be very good at and preferably they’re things that naturally align with your strengths, talent and experience in. If not, many things will be uphill.

The first step to change is recognizing that you need to change.

Once you have decided you need to change, the next question you need to answer is should you pivot or shut down. Stay tuned for more on that.

Footnotes: 
[1] Startup = Growth. Paul Graham 
[2] Series A Startup SaaS Benchmarks. Thomas Tungz. Please note that this is for SaaS companies in 2018. There are different benchmarks for consumer and B2B, and even more granular when you look at industries and competitors. 
[3] Atomic Habits. James Clear

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One of the most popular prayers is the Serenity Prayer. This prayer is repeated often within Alcoholics Anonymous and addiction circles. The first words are the most powerful:

GOD, grant me the serenity
to accept the things
I cannot change,

Courage to change the
things I can, and the
wisdom to know the difference.

This prayer and mantra is centered around change and control. Control and change go hand in hand. You can really only change what you can control.

While I had heard the prayer many times, the last time I heard this was in church, and it caused me to really reflect and listen to the words about change.

I went home and began to make a list of things that could be changed and things that could not change. Ultimately, what did I have control over? In other words what were the things that I could really change?

Things I could control:

• my attitude/perspective
• my actions
• my behavior (who i listen to, who I hang out with, how I spend my time)
• my time
• my intentions
• my thoughts (sometimes)

Things I could not control:

• other people’s action /behavior /thoughts
• other people’s thoughts about me
• nature
• outcomes /results
• circumstances

Several observations came as a result:

1. There was very little I could control. Reality was I could not even control my feelings or thoughts. I could only control the output of my feelings or thoughts.
2. What was in my control was a much shorter list than what I could not control. Yet, I spent most of my time thinking about what I could not control.
3. Most things that I had control were about me, while things that were out of control had to do with other people.
4. You have 100% control over actions and behavior. This means if someone told you to dance like a chicken or you would be harmed, I’m sure you would dance like a chicken. And actions are kicked off by a thought.

And actions are kicked off by a thought.

Therefore, all actions can be changed with your mind and what you believe. And if you can change your thoughts, you can change your actions. If you change your actions, you will change your habits. If you change your habits, you will change your outcomes. If you change your outcomes, you change your life.

So, change your thoughts, change your life.

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If a user does not know how to buy a product — deisgn fail 
If a user cannot figure out how to sign up — design fail
If a user does not know what to do — design fail

Before founding Kabam, I was a UX designer at AOL working designing product from the Media Player to Safety & Security (Spyware/Anti-virus) to Community (Blogs, Forums, etc…). Three years passed and nothing launched out of Beta. Every single one my products were cancelled.

This type of failure was the worst kind because before a single user was able to use it — some executive, who was not a user, killed it. Therefore, it was a death of a dream.

As a designer this type of failure was incredibly disheartening because a designer grows from feedback. Design has a purpose outside of self-expression. The designer creates features for a purpose, task, achievement or emotion. Whereas art grows mainly from self-expression.

Art is an expression of oneself. While Design is devoid of oneself and all about purpose.

Design inherently needs a purpose. Oftentimes, UX design puts the user at the center, making it as easy as possible to use the product. However any great business will place the customer at the center.

Designers get into religious wars over the placement of OK/Cancel buttons, all in the name of “usability”. When in reality the product should be designed to support its larger purpose that is part of the business and measured. Measuring your success along the lines of business success will remove religious wars from the team.

Data-driven UX Design

UX designers have a large hand in impacting 4 areas of analytics that drive businesses forward. Oftentimes, what users do is more important than what they say. Users will report something that do not show up in the metrics.

Thus, coining the framework “Designing for Dollars” but some people might just call it data-driven UX. Whatever you call it, it’s a framework for tying UX to the overall business goals.

These are the 4 areas of business analytics that UX designers directly impact:

Acquisition — Getting users to come

The best way to move this needle is to track the conversion funnel via metrics.

Your conversion funnel could be the following: user sees an ad => clicks on it => signs up => fill out profile => do action on your site.

If there is a dramatic drop off of users between any of the =>[next step], investigate not just from an engineering point of view but also from a UX point of view.

UX questions to ask are:

What use cases are people dropping off? Is there something users are not understanding?

Better yet, can you watch people use your product?

Retention — Getting users to return

Retention is seen though the lens of usage — DAUs (Daily Active Users), WAUs (Weekly Active Users). This usually means on average how many users login/use your site daily (DAUs) or weekly (WAUs).

Looking at churn is the flip side of retention. Users that never return. Churn becomes important in B2B SaaS or subscription based companies.

At a UX level, the impact on retention can look like this:

What does the user see when it is their first time vs their second time vs their Xth time? What actions are easily available to them?

What kinds of messaging does the user receive? What actions kick off a notification? What do the notifications say? This may be broken up amongst different people like PMs but I think UX people should think about this as a whole.

What action occurred before the user decided to leave? How long did it take for them to return to the site before churning all together?

Engagement — Getting the user to stay

If a lot of users stay few seconds and then bounce, then you may have an app that is not deep and cannot create too much value — thus likely to be labeled as “spammy”. Engagement is usually measured by time spent on app, which is the crudest form of measurement of this. As you get more sophisticated and as you get more users the engagement metric may be a measurement of how many “active” they are on your app/product, which could be translated to how many friends they have, how many videos consumed or how many alliances they are in.

Example: When designing our trivia game, the UX was critical to enagement. After a user answered a question a new one was automatically pushed to them getting them into a great flow and increasing their engagement on the site. Within a few short months we had over 1 billion trivia questions answered.

Most products do not need this; however, those that do, are the ones that need to move out of the “spam” category. Also in many products, engagement and retention (if the user will return) is strongly correlated.

Monetization — Getting users to pay

Assuming you are monetizing by collecting money from the end user, then all of the above will tie into one metric — the Life Time Value of the customer. At the highest level it is # of users X amount pay each time they come X how much they come back over their lifetime. This is a difficult and tricky one to calculate. Businesses are constantly working to improve this and better forecast.

How UX can significantly impact these metrics are in the following:

Payment flows — any way to save the user time in helping them remember their credit card? Ease of use can really help with reducing friction to pay

Surfacing the Buy buttons in an easy to find manner

Checkout flows should be painless

Regardless what metrics a UX designer wants to move, the designer and everyone on the product team should always be asking:

What is the purpose of the feature?

Which business goal — acquisition, retention, engagement and monetization – is the feature trying to move forward? Does the design support these features?

The UX designer should be creating an experience and interactions to support these goals and if done well, the designer can sit back and watch the dollars come in!

This blog post was inspired by a panel I was on at Web Summit — How to be a UX-pert. I was the lead designer at AOL and then at Kabam I led the design our flagship franchise — Kingdoms of Camelot which has now grossed over $350 million dollars in its lifetime.

This was posted originally on Medium

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When I first started my design career, I worked at AOL doing a lot of web design for Media, Safety & Security, and Community. I could have never guessed that I would be designing games.

I would like to say that what I have learned that web/app design has a lot to offer game design, but it has been the opposite.

Game design has more to offer web design.

This is non-obvious as there have been entire companies dedicated to the shell of games, called gamification — an amalgation of points, badges and leaderboards to keep a user engaged.

But the truth is that a really good game like a really good product is far more than gamification.

In both types of design you need to focus on the core. The core meaning:

What is the purpose of the product?

This is where game design and web design divulge pretty quickly. In app design, the focus is on a task. In game design, the focus is on the purpose.

In other words, game design asks “WHY is the user here?”, app design asks “WHAT does the user want to do here?”

Great games give the person interacting with their app a purpose, reason and role for that person to meet at that time. Great games pull the user in, not as a user but as a person — given them for that short brief period of a time a purpose.

Never underestimate how more engaged that person will be when you give them a purpose.

Humans work interact with the app, so we must cater to purpose over task. We are all that but human beings and not human doings.

At the heart of a game is the story is built between the game to where the person using it is the protagonist: accomplish a quest, defeat that boss,or create a character. At the heart of non-game, the person is someone who executes your tasks — create a blog post , accept friend request, search query.

So, to make your product as engaging as a game — give your product a purpose where the person interacting with it can be a human. The best way is to start with WHY.

Related Articles:
The First Step to Product Market Fit
Do this one thing to make your product sticky
Five Crucial Questions that Lead to Great Product

I am the co-founder of Kabam, a mobile gaming company that built hit games such as Kingdoms of Camelot, The Hobbit: Kingdoms of Middle Earth, Fast & Furios: The Game, and Marvel: Contest of Champions. I was lead designer on Kingdoms of Camelot, which grossed over $250 MM dollars in its lifetime.

Post originally appeared on Medium

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Scaling is magical because you take the same amount of inputs and get greater outputs. This sounds great when it comes to code — one line of code can hit hundreds of people, thousands and millions — and nothing (or minimal) changes to the code. But how can you do the same with people.

During the growth phase of the company, I often get, “yah but can (s)he scale?” What they mean is the following:

Can (s)he continue to drive successful results as the organization gets bigger?

So that when you add another person to that team, the amount of quality output will be greater than what was before. This is the scale of people.

Traditionally with people, “experience” gives the organization the ability to shortcut time and scale. But oftentimes this is not feasible given timing as well the technology is usually created by younger talent with a desire of rapid iteration and innovation as the guiding principle. So, how does an organization shortcut time? The answer is simple, but not easy. You must 1) Identify people who can scale and 2) help them scale. Easier said than done.

Identify people who can scale

We have seen this before: the candidate looked good on paper, and even interviewed well, but is completely unwilling to adapt or learn. As with most things in life, it comes down to to willingness, and many things will snap into place. For an organization to scale its people, it first needs to identify talent that has the potential to scale?

Communication

The ability to communicate is fundamental to teaching and scaling yourself. Whether the person has a team or not, they will be using other people to get the better results than what they did before. Before they might have been an individual contributor, but now they have more work and working longer hours won’t be the answer. So, the person is assigned more resources to borrow or a team to use. In order for them to get better results, they need to effectively delegate or influence them. If they can communicate, it’s a good sign they have potential to scale.

Rarely does scale have to do with can they do the work. It becomes — can they teach the work?

Empathy

Empathy means being able to fully relate and emotionally and perspective-wise get into the fox-hole with the person. This does not mean internalizing and taking on the emotion, but it does take a willingness to try and understand the other’s perspective. (Here is a short video by Brene Brown on this).

Core to being inspiring and motivating without understanding where they are to take them where they are meant and could be. Ultimately for people who end up scaling, it was because they were able to motivate and inspire those who they are leading. Empathy is the driver of all of this.

Coachability

“Let the wise listen and add to their learning, and let the discerning get guidance” — Proverbs 1:5, The Bible

A wise person responds to feedback and changes; however, idiots just don’t listen. Oftentimes, with many skills, we get better with practice. Managing and leading is not any different. However, if a person practices the wrong thing over and over that person will never get better. Imagine if the person had a phenomenal manager who coached them on their behavior and actions, if the person listened then there is a very slim chance they would not get better. At the core of being coachable is the willingness to change and be changed.

Lean into ambiguity and make a clear path

One executive started out as an individual contributor, then moved to lead a team and eventually became an executive of a division within the company. One of his special talents was that he would be able to not only be okay with ambiguity , but would try to help bring clarity. He was concise on assessing the issues but at the same time had a path to move forward. The most important thing is the ability to bring clarity of the current situation — if you just like ambiguity you become the king of queen of drama. Running and growing a business has enough ambiguity in it of itself.

Manager (3x)

There is such thing as over-hiring, when we hired executives who managed orgs that were 10x the size of our company in terms of people. We found these executives to not have the ability to operate without all the (people) infrastructure as well as could not get as detailed with the product teams to help them out.

Whereas, we have also had people who managed smaller orgs or was an individual contributor and had issues with micro-managing or not being able to manage at all.

What is right for your org is personal and sometimes relative. We found if someone had managed an org 3x the size of what you were currently asking them to manage is something that has worked. But oftentimes when the org is scaling we can’t wait for best and have to settle for good enough.

Bonus Note: If you have to choose — it is better to under-hire and help them scale up than have them scale down.

Help them to scale

Once you have identified people who can scale, how can the organization help?

Coaches

While these people often behave as office therapists, it enables someone from the outside counsel the executive. Oftentimes business or work problems has less to do with strategy and much more with the people executing the strategy. Have you ever heard a leader say, “If we were all robots this would not be a problem”?

Good leadership involves some hard work in being vulnerable and authentic, and oftentimes, it’s hard to find the safe space within the organization to explore what is preventing that without fear of being judged. The coach can often help people with potential to scale by giving them operational experience as well as a safe space. While many executive coaches have an HR background, there are many coaches who have actually ran Marketing, was a CEO or in some function that the executive is in.

We all know what having a good coach can do in developing an athlete’s sport’s skills, now imagine if a good coach was applied to help develop a leader’s skills. Who knows what kinds of potential the leader can reach, and in turn the organization.

Giving people opportunity

Grooming talent can be one of the most rewarding and satisfying thing you can do for your organization. Getting outside talent is great but this cannot be the way an organization grows. It is not sustainable to constantly hire from the outside once the org hits a point where it needs someone to grow. Also, promoting from within strengthens the organization as people can feel motivated and inspired that the org is growing and they can see themselves as a part of the future. And, more importantly you have culturally trained them to be inline with your values so they can “think like your org” and ultimately “behave like the org”. Ultimately when you get alignment in mindset and behavior from people it is the only way to scale.

Culture

The only way an organization can scale through its people is through its culture.

As an organization gets bigger not only do job positions get specialized, but also organizing the people to do these specialized roles becomes more complex. Now you need to hire connectors (aka project managers) and empower them to connect, so people can focus on what they are specialized in. This means you need to build a foundation of trust.

Like likes like.

Hire people with similar values and then reinforce it with a culture of actions that reinforce (rewards/punishment, hiring/firing, rituals, and communication).

Actions will always speak louder than words as culture is caught, not taught.

Culture ensures that people will be doing what you want them to do when you are not there. Culture enables you to be everywhere in thought and deed.

Strengthen HR support

HR can help an organization scale if brought in at the right moments and correctly. They help build the people infrastructure so that the organization can be ran more effectively. Examples of this include onboarding (better onboarding = shorter ramp up time on org and business) , HR support (who does the employee go to if they have an issue), and compensation (how does the org know how to pay — imagine if the system was adhoc, eventually the org would be wasting time and a lot of frustrating pay decisions)

If you think of an organization like your product, you will know that the better quality your acquisition is, the better impact on the product or org. Attracting the right talent can have the largest impact to your business and org.

Once in the door, retention and engagement will be the highest impact to your business. HR can not only build the measuring and reporting tools but they can also build the infrastructure so if a person can scale in the org, their potential will not be overlooked and there is a spot for them to continue to help make the org successful.

People are the engine to pushing the company forward. The company can only run as fast as its people. Investing in people scale can only benefit your business. Not doing so means you are leaving a lot of money and time on the table.

I am co-founder of Kabam a mobile gaming company that recently sold for $1- 2 billion dollars. We grew Kabam to over 1500 employees with 6 offices worldwide. The thoughts here are my own. If you would like to reach out to me, please DM me on twitter @hollyhliu

This article was originally posted on Medium.

The post How to scale people appeared first on Founder Musings.

Last time I spoke about expanding your market globally. The question that follows is, how do I build a team or an international office?

I will tackle this with examples of how we did it, or really mistakes we made, as Kabam grew its offices to 6 locations with a workforce of over 1500.

Whether you are considering expanding to a new location or globally, many of these steps still apply.

Step 1: Determine the purpose of your overseas office.

Here are some questions to ask when determining the purpose:

• Do we expect this office to be responsible for our market expansion in this region?
• How much input is expected from this office regarding market expansion?
• Is this location expected to generate revenue?

In February 2010, our CEO decided to take a one week exploratory trip to China. By the time he came back he told us: “Okay guys we are opening an office in China and I already hired the first 3 guys.” While we knew China would be strategically important to us, we did not have a clear purpose for the office, so we decided to have them work on building Facebook apps, as our games were on Facebook at the time.
 
Only one problem — Facebook was and is blocked in China. So, we had a team who was building on a platform they could not access unless they were on the VPN (Virtual Private Network) in the office, let alone understand how a platform like Facebook would fit in their lives culturally and socially.
 
Eventually, the office was able to provide strategic importance, but it took a lot longer to get to that point because of the lack of clear purpose in the beginning.

Step 2: Choose your first employees overseas (wisely)

The first employees set the cultural tone, communication tone and strategy for that overseas office and region. They set the quality bar for future hires, location, strategy as well as partnership recommendations in that region. In choosing a first employee for the office, you should create a job profile tightly aligned with the purpose of that office. They represent your company internally and externally in that region.

Here are some questions to ask when creating the job profile:

• How familiar is this person with the industry and the region?
• Have they ran a satellite office before? Bonus points if they have worked for an MNC (Multi-national corporation)
• Have they had P& L responsibility in the past? (if they have P&L responsibility)?
• How culturally aligned is this person?

The company then faces the dilemma when growing a team overseas:

Should this office be grown organically or through an acquisition?

Organic People Growth

Organically is when you hire people one at a time. Usually there is someone from HQ who hires the first few people and individually onboards each hire. This type of growth creates a cultural bond between the HQ and the overseas office, and the overseas office tends to identify with the company. For this type of hiring strategy, it is best to hire the leader first. Then, let that leader make all subsequent hires.

Our China office was grown organically. Our first hire was hand picked by the CEO and therefore, this person reported to the CEO and was quite aligned. The office identified as “Kabam China” and there were weekly calls and a change in time for the All Hands meetings to accomodate them. The good communication cadences between HQ and Kabam China helped keep the office and HQ aligned.

In deciding where we should move our European HQ, we decided to send someone from HQ to head up these efforts. This enabled the company to be truly agnostic upon location (more in the next step), and truly align purpose and strategy to the overseas office. While we built the Berlin office organically, the alignment was much tighter with frequent communication beats as well as the identification of the employees in the Berlin Office.

The best way to build an overseas team organically is to take a trusted leader or early employee from HQ and send them overseas to figure it out. They are the ambassadors of HQ and can inform HQ on best location. And ultimately the team they hire overseas will view that leader as truly a part of the company’s entity.

However, organic people growth takes time, and needs to endure the onboarding and creation of a team. The close connection with HQ can also hamper the new team’s ability to execute and adapt quickly to the local markets. We felt this more accutely in our Berlin office. By the time we realized that our European HQ should be in Berlin (and not Luxembourg), many other gaming companies were already in that location. Talent was harder to find and attract, slowing down any of our growth plans we had in that region.

Acquiring People Growth

People growth through acquisition of a team overseas can bring the tremendous benefit of a fully functioning team from Day One with the ability to execute quickly. Finding a team ready to go for M&A purposes may be difficult but can be done. Oftentimes this strategy is used when the company is looking for a team rather than a location. They have decided they cannot build this talent in house, and partnering does not make sense. Therefore, they are investigating the acquisition front.

This happened with the set up of Kabam’s Vancouver Office. We were able to get the license for Fast and Furious ; however, we had no in house talent to build a racing game. Many physics are involved in the game design of a racing game that we just could not build those talents in house. We learned that the team that build the racing franchise Need for Speed was in Vancouver, Canada and working on some mobile games. We first struck up a partnership. After working togher for some time, it made the most sense to acquire them and securing the Fast and Furious license. From Day One we had a full team expert in racing games. They became Kabam Vancouver and we had opened another new office overseas.

Growing via acquisition has it’s benefits but also its challenges. Culturally the acquired team will likely identify with their team over your company and will not be as aligned with the corporate strategy and goals. More often than not, HQ becomes referred to as “the mothership” no matter if they are just across the street or in another country. Also, culturally there can be distance, not because of geography but ways they want to maintain their old identity. For example, Kabam Vancouver did not want to cater food for their employees daily, unlike Kabam HQ. They currently did not provide it and it felt like a shock to their small office. Instead they continued to hold onto the tradition of going out with colleagues. Instead they would use the extra money to fund pajama movie nights and other office events.

How to Choose

With either strategy, the first employees will set a direction for that location and act as the conduit and representative of the location and HQ for communication and strategy. When choosing either one, it is best to review the purpose of the office, timeline and whether you can build, partner or buy within that time frame. Usually acquiring talent comes along not because the target company is in a strategic location, but because the talent has either a product of strategic value or existing revenue to enable the company to grow. Otherwise many companies decide to build the team organically. The benefits of alignment in execution to the overall company strategy can outweigh the benefits of acquiring. 
 
Regardless of what strategy you choose, we found with two of our first overseas offices who we hired impacted the next big decision — the overseas location. It just so happened that both of our European HQ and China HQ were in close commute to those offices.

Step 3: Choose your overseas HQ (wisely)

One of the most important things to look at when choosing your HQ location is how well the local talent pool lines up with your needs.

• Where can I hire the best talent?
• Who am I competing against for talent?
• Is there a local eco-system to feed off of this talent?
• Are the local partners for me to grow my market share?
• Is the business tenable for the cost of talent and purpose of the office?

Right after hiring the first three guys in China, two of the three were in Beijing. One of them was the GM. We did not give much thought to where to place our China HQ. It would be in Beijing. The GM was already living there, it had the best engineering talent (given that Beijing has the two best universities in all of China) , and it was China’s capital.

We failed to realize that traditional western gaming companies had set up their headquarters in Shanghai. Shanghai had always been the place where the arts and design had thrived. As we moved into more console quality games on the mobile phone, it became harder to recruit just gaming talent as we needed more than just pure engineering talent. While some people made the 4-hr commute from Shanghai to our office in Beijing, there was a lot of talent we were not able to bring into Kabam China for because of the commute.

Our initial European HQ, we decided that Luxembourg made the most sense at the time. It was an multilingual location and we needed people who could speak a lot of European languages. And there was a tax incentive. But a large factor influencing our decision was that it was a reasonable commute for our first European employee, who had come in as part of an acquisition. In retrospect, that was short-sighted. Over time the tax incentive expired, the labor costs were getting too expensive to justify the type of talent that location was attracting, and it didn’t make sense to base such an important decision on one employee’s commute. We eventually had to move our European HQ to Berlin where there was much more gaming talent and better labor laws for our work.

While all the other reasons about the cities certainly justify why you should place an HQ in that city or country, just make sure that the location is determined by the purpose and then the best place to choose that talent and less by its first employees.

Step 4: Build an Integration and Communication Strategy

Congratulations! You have added another location, if not another time zone. which brings on a whole host of logistics and people to care for. If you thought breaking your HQ into two floors was a challenge then this is a +10 challenge.

Integration

How does this office fit in the mission, the strategy and the organization? Each person should know the company’s mission and how their office and their job fit into that mission (strategy). Each person should also know who they report into and what metrics or goals they are responsible for. If you have sorted out the purpose of the office it will be easier.

When our co-founder later took over the China office, the mission was clear. The purpose of the office was to expand revenue by helping the company enter into the U.S. mobile markets. The co-founder built a mobile team in China and focused on building our first generation mobile game. That game — Kingdoms of Camelot : Battle for the North — became our flagship mobile game and earned us the Top Grossing App in iOS the year it came out.

That is what tight integration can do!

Communication

Create a regular cadence of internal communications. There are two levels of this: managerial meetings and all hands meetings. Managerial meetings can be determined by the managers leading those functions.

At Kabam we experimented a lot with all hands meetings. Once a quarter we would try to rotate the all hands timing so that our European offices could join, or so our Asia offices could join. Sometimes we had separate all hands meetings for each continent where just the execs would re-present their presentations. Whatever it is, find a time to meet or communicate regularly with your overseas teams.

Presence

Reinforce your mission and strategy with company presence. Satellite offices feel disconnected and on the outside by default, so anything you can do to help connect them is net positive. Execs or others from HQ should visit consistently, and not only be done when you need to deliver bad news or shut down the office. Rotating normal hosting events make the satellite office feel a part of the company. Kabam had a Design Symposium every 6 months where all the game teams would get together and trade what they have learned and connect with one another. This was hosted in several locations and rotate offices.

Also, make sure there is company branding, schwag and similar benefits as in HQ. The whole purpose of these things, which may seem small, are to align them with your mission, strategy and culture so they can execute as if they were at HQ or even better so that you too can create that #1 hit!

I am co-founder of Kabam a mobile gaming company that recently sold for over $1 billion dollars. We grew Kabam to over 1500 employees with 6 offices worldwide. The thoughts here are my own. If you would like to reach out to me, please DM me on twitter @hollyhliu

Thank you to Karen Lien who read previous drafts of this post.

Article was also  Medium 

The post How to expand your team globally appeared first on Founder Musings.

3 things I wish we knew

You have a successful growing business in the US market, and you want to expand globally. How should you tackle it? Hire a team internationally? Send someone from HQ? Wait until there is traction?

Every business is different. But, in today’s world, it is hard for any entrepreneur to not think about expanding past one’s own door step. Most of US and western goods are created internationally and flown in. And when it comes to entertainment, little to no shipment required. Therefore, the world is at any entrepreneur’s doorstep no matter where they are.

For Kabam, we started in the US, but quickly expanded into the Western markets. We quickly followed suit by opening up an office in Luxembourg , and then China. We eventually opened up 6 offices with the majority being outside of the US: Canada, China, Germany, Korea and the UK.

Lesson #1: Nail it then Scale It

Oftentimes, investors and future customers look for traction. Traction is not the same as buzz, traction is “when a lot of people are using your product or service frequently.” But before you have traction, you must first build your product and NOT launch it in your target market.
 
 First, launch your product in BETA, so you have a smaller group of people to get feedback and get the bugs fixed. For those that are doing a mobile app, it is best to go into another country and do your BETA there. The main reason is Apple tends to like to feature new apps, so you do not want to waste your chance at getting featured in on Apple in your target market, fixing bugs and iterating on your product. In choosing a BETA market to launch your app, you should identify markets that have similar behavior and spending habits to those in your target market but also cheaper to buy some traffic. Spend some time buying traffic (at least 30 days) so you can get data over time and make some good conclusions about your product. 
 
 For us we first began buying BETA traffic in Canada and then moved to other western countries once it got too expensive for us to buy BETA traffic. For those that are operating outside of the US and wanted to expand to US markets, consider your home country as the BETA market and then move into the US markets.

Lesson #2: Localization beyond language

Before we opened our first European office, about 40% of our revenue was coming from Europe and the only thing we had done was translate our game. We began to expand our team overseas as we thought about how we could localize beyond just the language. We began to imagine the impact of a local person from the country being able to answer customer support tickets in their language and in their time zone. 
 
 As the mobile industry consolidates even more, the importance of localizing beyond language becomes more and more important. Take for example the practice of Ramadan in the MENA region. 
 
 “During Ramadan people watch more online content, perform more searches and access the Internet on their mobile devices more frequently.” 
Thinking With Google

If gaming companies just localized their game, they would miss out on a large featuring and timing opportunity to get their hands into more people in that market. And sometimes the market can be quite large

Lesson #3: Investigate and iterate

As a Western company entering into non-Western markets, it is imperative that you learn the landscape and markets thoroughly. Although we had an office and team presence in China since 2010, we did not even attempt to try to enter the Chinese markets until 2016. This is because the ecosystem was so incredibly different in China that we needed time to learn about all the players as well as to build relationships. For example, in China the market is dominated by the Android OS, but Google is blocked. This means there is not one (or even two) app store platforms but dozens. AND, the market is so big (1.2 billion people) that you need to integrate with several to make sure all your bases are covered.

China itself is a very special country. There are many things that make China unique to where you need time to investigate, understand to have the right approach. And even then, you should investigate some more.

Countries that are more similar to your current markets in language, culture, regulation are often the best places to crack first. Oftentimes, for mobile gaming companies that are popular in the US, it is so much easier to expand into Canada, Australia and UK simultaneously, then into the western European countries.

As you are thinking of expanding globally, remember to nail and then scale it, push beyond just localization and investigate and iterate. Think past what is locally offered in that country and how your product and company can fit into that culture and society. Most of all, best of luck!

I am co-founder of Kabam a mobile gaming company that recently sold for $1- 2 billion dollars. We grew Kabam to over 1500 employees with 6 offices worldwide. The thoughts here are my own. If you would like to reach out to me, please DM me on twitter @hollyhliu

Article on Medium

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How much you learn is based on the perception of where you are currently at and the end goal. A test usually can confirm what you were taught.

However, most things in life do not culminate into a test: learning to be in a relationship, learning to be content and happy, learning to love each other, or learning how to be responsible. Most of these things are life skills that you know you have achieved when you have “avoided” disasters.

For this type of learning you can 10x your personal development by doing the following:

#1 Cohort (or group) learning

Get into a group of like-minded or same stage people. The most important thing is to have the same general goals and values. This happens a lot in support groups, recovery groups and startup accelerators. It is no wonder that AA, Divorce Care, weight loss groups and even startups are done in a group.

This helps with three things:

Accountability

It’s one thing to face yourself in the dark, it’s another thing to face others in the light. When facing something that you have to take a day at a time, it is good that over time there should be progress towards your goal. The accountability of meeting on a regular basis helps keep yourself honest as well as your peers.

The light shines in the darkness, and the darkness can never extinguish it. — John 1:5 (The Bible)

Success is relative

Oftentimes with personal development, success is not necessarily relative to one another, but rather each person has a different success metric. However, having others can help you move faster towards your inner goal of where you want to be.

Comparison should not be made on each other’s goals nor even how quickly one reaches their goals, but how fast one moves towards achieving them.

Success is more about the slope than the y-intercept.— Paul Buchheit

Therefore it is not where you begin, but where you end.

Where you start is rarely indicative of where you end.

Encouragement

More often than not the thing you are facing is harder when done by yourself. Life is meant to be lived in a community and it is no wonder that loneliness is the number one killer of people, or that people with strong community bonds live longer.

Two are better than one, because they have a good return for their labor: If either of them falls down, one can help the other up. But pity anyone who falls and has no one to help them up. Though one may be overpowered, two can defend themselves. A cord of three strands is not quickly broken. — Ecclesiastes 4:9–10,12 (The Bible)

#2 Focus on one thing

Choose one thing to do and focus on that. In AA it is getting to sobriety. In Weight Watchers it is losing weight. In Y Combinator it is growth. This goal is large and meaty, and many ways to get there. That is by design. This way you can choose paths but they should all feed into what you are trying to do. It becomes the most important thing for the group to focus on.

Having that one goal enables a group or person to focus. It is amazing what type of focus that one goal can do for a group of people.

As an organization gets larger, a strategy in reducing feedback loops is to introduce a “rally cry” for the entire organization. The purpose for the rally cry is to focus the organization on one thing to create momentum. Netflix it was “Defeat Blockbuster” and for every Blockbuster that closed, a pin would change color on the US map to denote its eventual decline. For our organization our rally cry was “51% of traffic off of Facebook”. We reported on this weekly, it was top of mind and in a few months, we had achieved this goal. Within 6 months, all employees plus a guest were taken to Tahoe as a reward trip.

A rally cry is a goal that is the most important thing that needs to be done for the organization to succeed. It is usually time boxed. It reduces your feedback loop to just one thing, which creates a sense of urgency, focus, and purpose for a group of people.

#3 Timebox

There should be a beginning and an end (or milestone) to the program. Continuously meeting together without a show of progress can be debilitating and leave someone spinning in circles. There should be a clear sense of how long the program is to help kick start and focus yourself for a period of time.

This is why bootcamps are only 6 weeks, accelerator programs are 3 months and organizational rally cries are 6 months.

A deadline creates momentum and urgency. The time frame forces yourself to push yourself to the limits and surprise yourself on what you can do in that amount of time. At the end of the period you can look back and measure movement. And, when tackling personal development, movement is the one thing that matters.

So next time you are looking to lose that extra 10 pounds, exercise more, or start your company — consider joining a group, focus on one thing for a period of time. You may just surprise yourself on how far your limits are.

I was a Visiting Partner at Y Combinator for 2 years. The thoughts here are my own and lessons I have learned. If you would like to reach out to me, please DM me on twitter @hollyhliu

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Michael Mortiz from Sequoia sent a memo that was meant to shake Silicon Valley to its core, but has gotten a lot of feedback: here, here, and here. While I do not argue with his observations, but his advice to Silicon Valley seems amiss. To sum up his advice: China is working faster and cheaper, and will hit breakthroughs and innovations faster than you. Therefore, stop talking about #meToo and #youToo should GBTW (GetBackToWork).

In order to out-innovate a country that is 3x your size, and tech talent that is about 40% cheaper than what is available, it will take more than working harder, but working smarter and understanding what you are up against.

The Dark Side of Frugality in China

The frugality is a result of so many people being poor. My parents who immigrated over to from China via Taiwan were so frugal in the US because they were pulling themselves out of poverty. China as a whole is moving itself out of poverty and their way of doing that is by controlling their burn and increasing their income. But what the observation lacks, is often the spartan furniture is of poor quality. Also, regarding the extra clothes and re-use of tea bags could be because the heat is state controlled. In Beijing, they cannot turn on the heat until a certain date determined by the government. Twice when we were living there, it was snowed before the heat was not allowed to be turned on.

Modern China has been formed by this saying:

It does not matter the white cat or the black cat, as long as it catches the mouse. — Deng Xiaoping

有办法 （you ban fa), which translates to “there is a way” is a common phrase in Mainland China. On the one hand this saying displays an amount of determination and grit that if held by 1.2 billion people should scare anyone. The darker side is despite whatever regulations come their way, they find a way to achieve their goal.

This can account for the growing “disposability” mindset. There is a whole generation that is growing up on Taobao (their online store equivalent to Amazon), rock bottom prices but poor quality. If something breaks or does not work, it was so cheap; another one can be bought. This mentality can become problematic when building substantial businesses that need to be long lasting. Furthermore with over 1.2 billion reported people in China, the “disposable”mindset does extend towards the labor force. Churn can be high and replacing employees are common.

This “achieve at all costs” mentality is similar to what has taken down titans such as Uber and Harvey Weinstein here in the US and is something that China needs to be able to remedy. While their “all costs” have been different, “frugality at all costs” can cost the Chinese companies more in the long run. The melanin scare in baby formula and plastic inside of rice are examples of “frugality at all costs”. Repercussions are already seen by the discount that many Chinese companies receive because of their accounting practices and low quality.

Manufacturing Mindset

The most recenty way many Chinese were able to gain wealth was through manufacturing. Right around the same time of privatization of land and the wealth of coal, many of the current Chinese class made their money via manufacturing and factories. Within a manufacturing mindset the amount of time you are at the office equals more productivity. This may be true if you are factory but most (Western) studies [1]will claim after a certain time limit, creative and heavy analytic work is no longer productive. Nor can you incentivize like a manufacturer [2].

In 2015, when we were selling our games to a Chinese company, my HR team leader (born and raised in China) brought up an interesting story about the acquiring company’s CEO. The CEO out of all things to worry about was upset over a linke worker who had a time and attendance problem on the weekend. Her conclusion was that this company still had a manufacturing mindset to where instead of managing employees to have creative output, the CEO still viewed the world in man-hours as a proxy of productivity.

Also the relentless of work, and lack of family time over the luxuries of life are afforded to first world countries who have already climbed out of poverty. And, the complaints about weekend work — well there are complaints, it is 
that the author just does not have a great grasp of knowledge of Chinese or spoken to Chinese employees, or in the right WeChat groups. There have been cases where I’ve heard employees at MNC (Multi National Companies) who love coming in the weekend, but it was because that MNC provided free food, high speed Internet, and a VPN with access to the outside world. At home it was too difficult for them to get this type of internet access.

So, you want a revolution?

What may be so relentless about this generation of entreprenuers is not only have they been fueled by the success of Alibaba, TenCent and Baidu, but they are the first generation who has not seen a revolution or as much poverty as the founders of BAT (Baidu, Alibaba and TenCent).

Jack Ma was born during a time where the Cultural Revolution (1966–1975), where most of society stopped. [3] Teachers were being accused of not being loyal to the Communist Party, kids were turning in their parents, and neightbors were turning each other in. My cousin was born the same year as Jack Ma and he remembers the Labor Camps for teachers and other intellectuals. Through this adversity there raised a set of founders like Jack Ma were able to rise. My Chinese teacher told me that for so long these types of students did not have books since school was shut down and they became the fiercest and determined to make up for what they lost.

For women who grew up during Jack Ma’s generation and the decade thereafter, all have quoted Chairman Mao stating: “Women hold up half the sky” has helped witht he equality of men and women. China had gone through a great starvation in the Great Leap Forward and could not afford that women not be part of this revolution.

However, this current generation of entreprenuers have those types of people as their parents. And — they have no siblings. This one-child policy places a lot of pressure, moreso, on the woman who is still seen as the general caretaker when it comes to childcare. Single Chinese women I speak with talk about their fear of getting married will stop their careers — even with grandparents on standby. One woman who came from the more rural part of China and in Beijing working at a tech company told me she did not want to get married because she was expected to take care of her own parents and then her husband’s parents, and if a baby was born she was expected to take care of the baby as well. We also had a local Chinese employee who quit her job with us, so she could take care of her mother-in-law. If parents are being cared for, it is expected that the children take care of them, not some outsourced nanny.

While there are nannies to care for the top executives children, the middle managers are not afforded this luxury. Also, this generation if they come to Beijing from the countryside, has seen sex-selective abortions as well as forced abortions. As reported by a family member, this was happening to women even through the 1980s in Tier 1 cities like Guangdong, China.

With both countries racing to out-innovate and out-compete one another, wouldn’t you want everyone, man or woman, young or old , who is qualified to help you win?

China is STILL the Middle Kingdom

When you visit China, it is very clear you have stepped into a foreign kingdom blocked off by the Great Firewall. The apps that once worked elsewhere (Facebook, Twitter, and Youtube) do not work inside of China. The RMB that is needed to transact is only useful in China, and not outside of China borders.

During my stay in China from 2015–2016, the conversation that I would encounter with Westerners during this time would be:

In the last 300 years what has been an innovation that has had worldwide impact to have come out of Asia, and more specifically China?

The greatest inventions that have had world-wide impact in the last 300 years were first invented in the West: airplanes, bikes, television, cameras, computers, internet, etc… . The last great innovations that have come out of China has been paper and gunpowder, and someone from the outside had to go and get it and bring it to the rest of the world.

For example, China has long banned gaming consoles. As a result the birth of microtransactions (ability to play and then pay a la carte for items in a game) has created billions upon billions of dollars in the gaming industry and has rocked traditional gaming console revenue to its core around the world. This new business model has expanded and somewhat cannibalized the video game economy [4]. Zynga was able to take popular farmer sim games like Harvest Moon and adapt them to the West as Farmville, ushering an entirely new business model.

Steps to Out-Innovate China

Now that we can understand some of the reasons how China has come to be, the best way for Silicon Valley to out-innovate is to work faster and smarter. How can Silicon Valley do it?

1. Change your mindset about China. Connie Chan wrote an excellent piece in 2016 that still applies today about how we need to change our mindset about China. We are now competing against the world and it is fierce. Only the paranoid survive, and they need to be taken seriously as a competitor. It is hard to argue countries with a low work ethic increase their GDP. The opposite is not true; however, a high work ethic does not automatically yield a growing GDP — due to corruption, infrastructure, full development etc…This proves the point that hard work alone will not out-compete any country.
2. Go to China and learn. The old saying goes: “It is good to keep your friends close, but your enemies closer.” If Silicon Valley changed their view of China, they would be learning, and not just looking at them from sources of capital or unsavvy investors. 
   One could argue that the West is much better at mass marketing , commercializing and branding. Even the last large inventions, it took someone from outside of China, to go there and bring it to the west, much like the invention of paper, which was only brought to the West (Germany) one millenia after it was invented. Their paper : “Once they had learned to make paper, they became more interested in also learning about Chinese printing” which led to the Gutenberg press. [5]
3. Use technology as leverage. In many ways the population can be a crutch for them. For example, C-Trip, the largest travel site grew by having people hand out flyers. This is using the power of people rather than technology. But in the US the density of people are so low and the tech talent is rising that Silicon Valley should be thinking how to off-load tech as much as possible.
4. Use quality as leverage. Currently, this has been something China has not been great at. Moving fast and breaking things makes sense in the experimental phase, but building a competitive moat at some point will include quality. If bringing something into China, we have noticed brands in consumer packaged goods have done really well: Nike, McDonalds, Coca-Cola, and Apple. The tide is slowly changing (e.g. Lenovo), but for now I believe the West still is winning out.
5. Enable affordable (childcare) services in the US. In the US, about half of the workplace population is being left out and that is due to exorbitant childcare services where many couples find it untenable for both parents to work, and oftentimes it is the women that are left out. Also China has a much more generous paid maternity policy, and they only allow one-child! [6]
6. Have a win at XX costs attitude. Instead of having a win at all costs attitude, have a win at XX costs attitude. Where, XX costs defines your moral and values on what you and how you would like to win. This will ensure you build a company that lasts.

And finally…

Keep your burn as low as possible, grow as fast as possible, and work your a$$e$ off.

[1]https://cs.stanford.edu/people/eroberts/cs181/projects/crunchmode/econ-hours-productivity.html
[2] https://hbr.org/1993/09/why-incentive-plans-cannot-work 
[3] https://en.wikipedia.org/wiki/Cultural_Revolution . I would also recommend watching Farewell My Concubine by Cheng Kai-Ge and To Live by Zhang Yi Mou to see the impact of this on a generation of chinese. 
[4] https://www.statista.com/statistics/276768/global-unit-sales-of-video-game-consoles/
[5]https://quatr.us/china/invented-paper-ancient-china.htm[6]http://www.china-briefing.com/news/2017/04/06/maternity-leave-allowance-china.html

I am a Chinese-American who majored in Communications and East Asian Studies.My first time to China was in 1991 , two years after the Tiananmen Square Incident. Since then I have been going China off and on, and my last trip was a longer stay in China from 2015–2016. In 2010 our company, Kabam, set up an office in Beijing, China and grew that to over 200 employees before selling our company in 2017 for between $1–2 billion dollars. My thoughts are my own.

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