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Guy Kawasaki’s “Reality Check” for Startups

Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition

Photo by Brajeshwar

Reality CheckThe Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition

Guy Kawasaki’s book “Reality Check: The Irreverent Guide to outsmarting, outmanaging, and outmarketing your competition” is an entrepreneur’s cheat-sheet. A must-read book for any entrepreneur in general and startup founders and co-founders in particular. If you’re not reading it, your competitor will and you’ll regret it sooner than later.

I got my review copy of Guy Kawasaki’s book Reality Check few days back and I was hooked to it, read it all and I might come back to it later, refer to it occasionally in future. I also checked my EQ (Entrepreneurial Quotient) and scored 17 out of 22 (not bad).

The book is 474 page thick but don’t get intimidated at all. It is separated by short and quick-to-read topics which you will love reading, finishing up and moving on to the next topic. Guy starts quickly with a warning much like a bullet from a double-barrel gun, “I want to provide hardcore information to hardcore people who want to kick ass.”

Reality Check is Guy’s all-in-one guide for starting and operating great organizations — ones that stand the test of time and ignore any passing fads in business theory. This indispensable volume collects, updates and expands the best entries from his blog and features his inimitable take on everything from effective e-mailing to sucking up to preventing “bozo explosions,” including but not limited to (i) the art of getting the attention of investors, (ii) the 10/20/30 rule of pitching and (iii) how to get a standing ovation.

Reality Check: The Irreverent Guide to outsmarting, outmanaging, and outmarketing your competition by Guy Kawasaki (on Amazon) is your book if you’ve been bitten by the startup bug and you’re dreaming of making it as an entrepreneur. The books goes deep on — how to raise money, how to build a team, how to sell, how to schmooze, how to make presentations, how to influence people and make them believe in you.

Well said in the book, “to join a startup, to leave a Microsoft, you have to be fundamentally unhappy with the way things are and unrealistic enough to believe the world can change.” The book and the ideology isn’t for people who are happy working for mega corps with their mortgage, insurances paid in time, paycheck that comes in regularly and not willing to take risk and who are not hungry, are smart enough to not dilute those luxuries.

There were many re-freshed ideas and reality checks — “the shortcuts you have to take and the problems you couldn’t anticipate when building version 1.0 of your product always mean you’ll have to rebuild some of it in version 2.0 or 3.0.”

The chapter on the Art of Executive Summary reminds me that MBAs are taught to be employees and not employers or co-founders of startups (if they’re, they’re very rare and far in between) — “most venture capitalists want to invest in hardcore engineers, not overhead — also known as MBAs. The MBAs come later, so focus on engineering and sales experience, because in the beginning, all you need is someone to make a product and someone to sell it.”

Of course, the famous 10/20/30 rule of presentation, be it powerpoint or keynote, is well emphasized. So, it is 10 slides + 1 that contains your contact information, 20 minutes of presentation and 30-point font. This is particularly useful while pitching for your curve-jumping, paradigm-shifting, patent-pending idea and technology.

You’ll definitely like ‘the lies’ series (facts better maintained under Omerta) —

  • top 10 lies of venture capitalists
  • top 11 lies of entrepreneurs
  • top 16 lies of lawyers
  • lies of engineers
  • top 10 lies of partners
  • top 17 lies of CEOs

which will help you see what things are coming to you beforehand or what they mean when you hear them, encounter them yourselves.

In the Zen of Business Plans chapter, the book wants you to give a good focus to the Executive Summary even before getting down dirty with Business Plans. The Executive Summary, all one of two pages of it, is the most important part of a business plan. If it isn’t fantastic, eyeball sucking, and pulse altering, investors won’t read beyond it to find out who’s in your great team, what your business model is, and why your product is curve-jumping, paradigm shifting, and revolutionary. As for the business and financial projections, the mantras are — always under-promise and over-deliver, don’t go beyond 12 to 18 months and re-forecast every three months — the favorable forecast method being Waterfall Forecast, a report that shows how your forecast changed over time.

Well, once you’ve done your homework, be ready to execute — execution is not an event, a onetime push toward achieving goals. Rather, it is a way of life and this way of life is set in the early days of the organization.

Reality Check also dedicates a good chapter on The Art of Bootstrapping and covers ideas on how to forecast from the bottom up, ready-fire-aim, how to hire young, economical and hungry people — people with fast chips, but not necessarily a fully functional instruction set.

I learnt something new from the book with regards to bootstrapping. The term bootstrapping comes from the German legend of Baron von Munchhausen pulling himself out of the sea by pulling on his own boos-traps. Which is actually what we at startups do!

Besides many good advise in the chapter “The Seven Sins of Solutions”, I particularly like the advise about Not Invented Here (NIH). NIH means that you refuse to consider solutions that are from external sources. It means, “If we didn’t come up with it, it won’t work. It is of no use.” Next time you’re waiting for an elevator, watch someone walk up and hit the button even though it’s already lit. We often don’t trust others’ solution!

Do you remember in the movie 300, King Leonidas failed to hit Xerxes where it should, perhaps because he was stifling. The book advise you not to Stifle. We naturally do the “Yeah, but …” dance, in which we stifle, dismiss, and second-guess ideas. It’s ideacide, pure and simple. And it’s not just others’ ideas we stifle; we often do it to our own and kick ourselves later when someone else “steals” our great idea.

The books talks quite a bit about Silicon Valley, besides the numerous references it enjoys in most of the chapters. The chapter tries to answer the common question by many leaders, political and otherwise, “How can we be innovative and create our own Silicon Valley?”

Silicon Valley is an amalgamation of hard work, luck, greed, and serendipity, but not planning. Indeed, Silicon Valley has probably worked because there was no plan. Few from all the good points —

  • Focus on educating engineers. Guy thinks that the single biggest reason for Silicon Valley’s existence is because of Stanford University School of Engineering. Business schools are not as important, because MBAs seldom sit around discussing how to change the world with great products. Mostly they care about how to get interviews at multinationals and consulting firms.
  • Encourage Immigration. Guy says, if he had a choice between funding someone from a family who moved to the Silicon Valley from Vietnam whose father and mother runs a 7-Evelen versus a descendant of a Mayflower passenger with “IV” after his name, he’ll pick the former. You need to attract smart, hungry and aggressive people from around the world. And to do that, you need good schools. To Mix several metaphors, if you want to cover your ass, you need to open your kimono, because trust-fund kids don’t make good entrepreneurs.
  • Don’t focus on “creating jobs.” The sole goal of a startup is to kick ass. If it also has to create jobs for the sake of creating jobs, then you defocus it. The thinking should be: “If this company kicks ass, then it will survive and grow. If it survives and grows, then it will create jobs.” So, let startups focus on kicking ass, and the jobs will come naturally.

Well, I would like to add “aim a little higher because every arrow feels the attraction of the earth’s gravity.”

While we’re at the story of Silicon Valley, you might enjoy this YouTube video “The Secret History of Silicon Valley” embedded here.

The book also emphasizes a lot on The Zen of Presentations — how good are the likes of Seth Godin, Steve Jobs, Al Gore, Lawrence Lessig, Tom Peters, Hans Rosling an Barack Obama. The book mentioned Majora Carter who won the MacArthus Award in 2005 for her work as the executive director of Sustainable South Bronx. She gave a presentation at the 2005 TED conference which was as good as Steve Jobs performance. Watch Majora Carter’s Greening the ghetto or download the High-Res version (263.5mb).

I like the bet Guy throws in his book. “She exhibits excellent coordination with the person who is advancing her slides (her fiance). If I find out that they didn’t rehearse this at least twenty-five times, I’ll switch to Windows.”

A fantastic tip for public speaking was “get your teeth whitened.” Also, notice that Majora Carter uses a Countryman E6i wireless mike (perhaps the world’s best). Presentation is all about performance and acting.

Acting is standing up naked and turning around very slowly — Rosalind Russell.

“Reality Check” finally ends with good tips on hiring the best and firing the non-performers and how you can brush on the art of Recruiting and also the art of laying people off. Double check the No-Asshole Rule, make sure you’re not an Egomaniac and that you’re not an asshole. Of course, don’t forget to check your EQ (Entrepreneurial Quotient).

So, those are the few notes rendering the prospects of such an awesome book from Guy Kawasaki — Reality Check: The Irreverent Guide to outsmarting, outmanaging, and outmarketing your competition. If you’re in a Startup, and if you’re not reading this book, you’re seriously missing out on something.

“It’s a race and we’re going to work like hell to reach escape velocity.”

Some uncommon words used in this article.

  • Omerta: a popular attitude, common in areas of southern Italy, such as Sicily, Calabria, and Campania, where criminal organizations like the Mafia, ‘Ndrangheta, and Camorra are strong. A common definition is the “code of silence”.
  • Kimono: A Japanese inspired garment that is traditionally loose, and floor length, though current styles offer shorter varieties. A Kimono typically has wide sleeves, wraps in the front and is held closed by a sash.

Note: This book is not available in India and is very unlikely to be available in Indian Print at all. If you’re in India and want to buy the book, may be I can procure it and ship it within India (shipping within India is cheaper but I should have at-least 10 or more people interested). You know how to email me, right!

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