Here’s what not to do as a start up CTO: use a completely new set of technologies to build your product, stuff you’ve never used before or have little experience with.

Why?

You’re usually convinced that the idea you’re working on has a place in the market.  Therefore your number one goal should be to create value.  The more product you build that customers like and use, the more value you’re creating for the business.  Eventually you want to prove enough value that you attract investors.  But they need to be convinced that you have a product that cannot easily be copied and that, aside from just satisfying customers, has some intrinsic value that may lead to an acquisition.

From a software perspective, what is value?  It’s really good code that is high quality and well tested.  It’s used to create features that satisfy specific user needs while strengthening the overall product.  The more code I write, the more value I create.

There’s also value in creating a lot of product that doesn’t work out as expected because this allows the team to abandon features that would otherwise consume development cycles and not get used by customers.  But in both cases you need to move quickly, write a lot of code, try a lot of things out to figure out what works and what doesn’t.

As a developer, I’m far more capable of producing lots of top quality code using tools and systems that I’m familiar with and that I’ve built things with in the past.  There is an inherent level of bugginess that a programmer is going to introduce programming in a new language – things get done in a way that work but are not necessarily the correct or maintainable way.  A lot of time can be wasted figuring out how to best integrate the various pieces being brought together – what library is best to use to connect PHP to MongoDB?  Which gem should I use when incorporating payment processing into my Ruby project?

A start up CTO recently told me that he had decided to use Ruby, MongoDB and Node.js for his current project.  I asked him why and he remarked that he felt he needed to learn them and this was a great time to do it.  If you want to learn new languages or technologies, jump into the next hackathon and hang out with other experts that can quickly show you how to use the tools.  Or buy a few books and spend a weekend messing around generating tons of questions to post to message boards and mailing lists.

Two important points that I don’t want misconstrued: 1) the proper process for prioritizing features is absolutely essential.  I’m not advocating that you just build software until you stumble upon value.  Build value based on customer driven development.  2) You cannot build a web application on yesterday’s standards because you will have a hard time attracting the talent you need to lead.  It is very tricky to balance the need for practical technical solutions and bleeding edge implementations for the sake of experimentation.  So tread lightly here but don’t let your stuff get old.

AT&T Bell Labs, Murray Hill NJ, Summer 1995

My time there is something I sorely miss.  There is something about being immersed in a place that requires you to learn and challenge yourself while being surrounded by some of the greatest minds in science and technology – Brian Kernighan, Dennis Ritchie, Bjarne Stroustrup, Jim West and others.  I walked the same grounds on which Paul Erdos strode, and played bocce ball and Killer Crayons with s_alice, s_ambrose and s_vipul, other summer interns with whom I share a deep bond.  I sharpened my skills working under Kathy Shipley on a project called HuMaNet.

The grounds of the Bell Labs campus were so expansive and the hallways, lined with labs on either side, seemed to stretch on for miles.  It is impossible to this day to wrap my head around the amount of innovation and science that must have been taking place on a given day.

I squinted down the long hallway one day and was able to make out a lab all the way at the end, one I decided to explore.  I picked up my AT&T issue notebook and pen and started the journey.  I entered the lab and was immediately greeted by the following, “I don’t know who you are and I don’t see any donuts.”  I interpretted that to mean I should leave and return with some circular treats to be granted access.

The next day I returned, a twelve pack of Dunkin’ in my hands.  I didn’t make out the person that addressed me the day before because no on turned away from their computer.  This time, someone did and they started immediately, “Put the donuts there and sit down in front of this computer.  I am going to teach you about Plan 9.  We took all of the things we should have done in UNIX and built them into this OS.  Everything is essentially a file.”  All of this was so cryptic including the ritual I just went through.  There were no names or introductions.  No one else in the lab seemed to care who I was or why I was there.  I sat down, listened and learned.

I spent several days making my way to the lab and sitting in front of this foreign operating system trying to figure it out.  I focused so much attention on it and almost none on the people that I now believe sat around me and taught me this amazing project they were spending their time on.  I believe they were Rob Pike, Ken Thompson, Dave Presotto, and Phil Winterbottom.  In fact, I’m convinced that either Rob Pike, Ken Thompson or Tom Duff walked me through Plan 9 for which I had paid the paltry sum of 12 Dunkin’ Donuts.  Either way, I was surrounded by genius and didn’t take even a minute to stop and appreciate it.  To those temporary lab mates who inspired a tiny little college student like me I say, Thank You!

Those days are always sunny in my memory.  Lunch by the bocce courts listening to the mad Russian and Hungarian scientists argue about something.  Trying to concentrate in my lab with Vipul’s incessant “Testing 1…2…3″ in his thick, rich Indian accent.  Trekking down to the supply room and picking up books about vi, LaTex and C++ all at no charge.  Going to seminar after seminar and listening to some of the most brilliant people in the world tell me about their discoveries, their life’s work.

Somehow, I just don’t feel like I’ve lived up to my potential.  I wonder if I’ve honored the brilliant people that came before me, those that let me work in the same spaces they did.  I don’t think I have…yet.

Doubt is an essential emotion for an entrepreneur.  After all, it’s because you doubted something was being done as well as it could be that you decided to start a business.

Throughout my career I’ve had those moments when I’ve been gripped by doubt – am I capable of building this business?  Is my team the right make up of skills and attitudes?  Are our plans right?  The product features we’re working on, are users going to find them as valuable as we think they will?  Going through those bouts often yields the best results and over the years I’ve become more and more comfortable with doubting.  In fact, if I don’t deal with my own doubts now I get a little nervous that I’m not thinking critically enough about things.

Doubt triggers introspection, investigation, and planning and is an integral mechanism for change and innovation.  Constant optimism, on the other hand, leads to complacency and stagnation.  If you always think what you’re doing is right then there’s no need to think about different approaches or to study what your competitors or the market are doing.

Fear, the inability to deal with doubt, leads to paralysis and failure.  I appreciate that there is a fine line between the two and have developed a mental process for making sure my doubt doesn’t turn into fear.  To put it simply, it’s important to appreciate doubt for what it is: your gut screaming at you that you have to flesh out in better detail some of the things you’re working on.  Before you panic, and start to fear, appreciate that you’ve got some hard questions you need to answer to smooth things out.

There are two things I wish I had learned in school: typing and how to negotiate.  They are essential skills both in my profession and in the everyday interactions I have with people.  More often than not I’m communicating with someone by email, Twitter (@MichaelMontero) or text (typing) or negotiating terms, a deadline or a discount.

Learning to type was easy – once I got it, I could tell it was working.  Negotiating?  Not so easy.  Every situation is different and outcomes can range from exceptionally good to exceptionally bad based on how well I’ve done my part.  Sometimes, you won’t know which until it’s far too late.

With a few mentors and some good books I’ve learned quite a bit about the skill and art of negotiating.  There are a few mistakes, though, that I see made time and again that I think are worthwhile to point out.

• Ranges.  Never give them, period.  Know what you want to make or pay and give that number.  Giving a range essentially communicates that you’re too weak or scared to give the better number so you’ll soften the blow by putting it in the context of what seems like a reasonable range.  The outcome is almost certainly that you will get immediate agreement on the low.
• Pauses.  Not saying anything speaks just as loudly in a negotiation.  You don’t always have to have an answer or a decision.  Sometimes taking a long pause and staring across the table is far more effective than agreeing or countering.  Pausing and remaining silent forces the other side to deal with the uncomfortableness of your lack of response and often results in follow up.  For example, “We were thinking $25,000.”  You are completely silent.  “But if that’s not good enough we can come up with something more suitable.”  Better outcome and you didn’t say a thing.
• Decisions.  You do not need to walk away from every discussion with all of the details finalized.  It is perfectly acceptable to decide that you need more time to evaluate something or don’t feel comfortable deciding immediately.  Force yourself to think through the tougher decisions by deferring them.  Show you are reasonable by deciding or giving on the easier stuff.
• Leverage.  To be decisive you have to have leverage.  That usually comes in the form of either being willing to walk away from the negotiation or having another going on that is equally as enticing.  You will be more confident and have a better frame of reference if you have leverage.  It’s OK to seek out other opportunities if the current negotiation makes you feel you have something of value (a product, skills, money, etc.) that is beneficial to other parties.
• Honesty.  Negotiations lend themselves to the opposite.  Often times you are filling in the details of legal agreements that will never be used for their intended purpose.  Unfortunately, it seems perfectly acceptable and I’d go as far as to say expected, that a certain number of statements made during a negotiation will not be true.  Don’t ever do this.  Each lie you tell or fact you stretch is one more thing you need to keep up during the term of the agreement.  If a bad relationship gets litigious it won’t be long before the deceptions come to light.
• Respect.  Negotiations can be hard and personally trying for all parties.  The more personally involved you are in the details the more likely this will be the case.  After a hard negotiation, step back and remind yourself that the other party is probably negotiating in good faith to produce a favorable outcome for you.  Don’t be afraid to acknowledge that by reaching out by email or phone and thanking the people involved for putting in their effort in dealing with you.  Not only will this demonstrate that you are reasonable but you might win a few allies on the other side.  I’ve done this in the middle of a several day negotiation when things got a bit rough.  I felt like I scored far more points by showing I appreciated what the other side was enduring to make things work.
• Reputation.  During a negotiation you are setting your reputation through your actions, preparedness, attitude, stubborness, etc.  On the other hand you are learning about what it is like to deal with the other party involved.  Make sure you set the tone for what dealing with you is going to be like (don’t be weak) and make sure you like how the other side reacts in tough situations.  You don’t want to get into a long term relationship with someone that either can step all over you or thinks they can.

I deliberately did not touch upon preparedness.  Strategizing what you want, what you are willing to give, and what a good outcome looks like is critical to honing your skills.  Knowing with whom you are negotiating and their motives can signicantly alter the dynamic of a negotiation in your favor.  These topics, though, are far too detailed and perhaps the most difficult things to master.

A few things I hear in pitches that I think do more harm than good:

“Our product is simple and easy to use.”

This statement is redundant.  When I hear it the first thing I think is that you’re trying to solve a problem (most likely a UX challenge) that isn’t easy to solve (or that has been complicated in existing products) and you want to convince me that your solution is better than the existing ones.  I ignore statements like these.  Your users and I will decide if your implementation is easy to use.  However, ease of use, in my opinion, is subjective and if I find your implementation isn’t easy to use it’s going to count against you.  Instead, cite empirical information that demonstrates how your product is converting more users by virtue of being simple and (intended redundancy) easy to use.

“We’ve looked at all of our competitors’ products and they are terrible.”

I think petty people focus on the weaknesses of others.  I think confident people focus on their own strengths, in fact stand by their perceived assets even in the face of contradictory information.  Focus on why your product is special or different but do it in a way that conveys your strength and not the weaknesses of others.  You have competitors for a reason – they got there first, share your idea (which I presume isn’t terrible) and have the advantage of being live and collecting data about how to refine their product.  None of that is good for you.  Instead, start with “Our product is the best in the market because….” and blow your audience away with some cool differentiators.

“We’re going to disrupt the market.”

The odds that you disrupt are low.  Entrepreneurs are always looking for two elusive types of success – “turn arounds” and disruption.  They are elusive because it’s impossible to sample enough of a market in a reasonable amount of time to determine if your idea is, in fact, going to change behavior.  I can’t wait until I’m sitting around the table at the local pub scribbling on a napkin with some other folks and we simply write down “disruption”, walk away and nail it.  Instead, focus on how you’re different.  Explain why your product is something the market has never seen.  Be prepared that some people just aren’t going to see it quite the way you do.  Convincing people that you can disrupt is tough.  Either it’s crystal clear from your vision or it isn’t.  Which opinion your audience has depends entirely on to whom you’re talking.

“This idea is going to be worth billions.”

Ignoring the obvious silliness of statements like this, I don’t feel comfortable with people that are strictly doing what they are doing to make money.  I hope that your idea is worth billions (and that I have the chance to get involved) but I’d much prefer to hear that you are so passionate about what you’re doing that you’ll put up a fight in the absence of billions.  Instead, talk about the market size and your strategy for capturing a large portion of it.  If the data are clear and your audience is convinced of your vision, they will figure out how much they think it is going to be worth.

[Funny story, I was actually pitched an idea during which I was told we'd launch a product and within 12-18 months be making "milboes."  Not sure if that is how you spell it but to this day I find that word hilarious.]

“I’ll need you to sign this NDA before I can pitch you my idea.”

Please don’t waste my time by having me meet you before you tell me this.  Tell me over email so I can respond that I have no interest in meeting up.  No good investor is signing an NDA to talk to you and the level of naivete that asking demonstrates is indescribable.  Get over it, someone else is already working on your idea.  Instead, only discuss your ideas with trustworthy people that you feel aren’t going to steal things from you.

“The market will either use our product or we’ll roll right over them.”

This is taking confidence to the level of arrogance.  I get the sentiment and people that know me know I love when people go over the top with passion and strength.  I’ve tried to learn the art of staying on the side of confidence and not coming off as cocky.  Statements like this are downright cocky and can be insulting.  What if I’m included in the market you’re targeting and am not convinced by your idea or implementation?  Are you going to roll over me?  Instead, try something like “We believe the market is going to see the value of our product causing our growth rates to be aggressive.”  Bold.

To drive this home, let’s say you’re applying for a position at work that a close friend and co-worker is vying for as well.  There are two ways to pitch why you should get it.  Which do you think conveys that you are competent, balanced, and will do a better job?

There isn’t a single employee here that is capable of what I am.  Bob’s work ethic is terrible, his results are subpar and he often smells when he comes to work.  I’m going to be the CEO of a big company some day so I know I’m the best you have for this promotion.  You need to give it to me because you’re going to regret it if you don’t and I will probably have to find another company to work for that values my skills.

Or,

Over the last 2 years that I’ve worked here I’ve strengthened a number of core assets that make me the right person for the job.  To date I haven’t missed a single deadline on my projects and my peers have constantly praised me for working hard and getting results.  Bob is very strong but is not capable of performing at a level that I can.  When you called on me to complete the XYZ project I killed it.  I learned a ton from that experience and utilized it to increase revenue when I was leading the ABC initiative.  I feel these experiences and my successes with them make it clear that I will be the most effective person for the position.

Over the last several months I’ve read about or fielded questions along the lines of whether or not someone should quit their career or forego going to college to “become an entrepreneur.”  Given the amount of money available for start ups and the strong culture that is evolving both in this country and localized to cities like New York, it doesn’t surprise me.  Starting up is definitely en vogue.

I believe entrepreneurship chooses you more than you choose it.  There are several characteristics that I think many people possess that make them right for the journey:

• In the face of unbeatable odds, they cannot be convinced that their idea or product is wrong.  They’ve convinced themselves they can change the world and they won’t give up on their vision.
• My brother-in-law, Shay, is constantly pitching ideas.  Anytime he sees something that doesn’t work right he obsesses about the process or product that will revolutionize it.  He’s an entrepreneur.
• Entrepreneurs look at not working for themselves or not trying to build an idea as the biggest risk they can ever take.  They think about how they would feel in ten years sitting around regretting that they never gave it go.
• When they talk about their idea their passion is palpable.  They become animated, they raise their voice, they start using words and phrases like “suck”, “kill it” and they invariably drop F-bombs.  But you get it – they’ll
  take on any challenge to convince you they are right.

There are so many other things that define an entrepreneur.

I don’t think you can learn these things.  I don’t think you sit down one day and decide that for your next career move you are going to “become an entrepreneur”.  If you don’t already know, it isn’t for you.  If you just don’t feel it about something, some idea or concept, it isn’t for you.  If you don’t get emotional or personally insulted by watching someone else try to do something near to your heart, it isn’t for you.  If you can’t imagine working an unlimited number of hours to achieve your dream, it isn’t for you.

Should you quit school to “become an entrepreneur”?  You should not.  If you should have you wouldn’t have had to ask and you would have quit already.

Yes, you can “learn” to become an entrepreneur.  Here’s what that looks like: you’re doing something you do everyday and you just feel there’s a better way to do it.  No matter how hard you try you can’t shake the feeling.  You tell yourself over and over again that you aren’t wrong about your idea – “It will work!”  Then you convince yourselve definitively that you’re wrong and that it won’t work.  Then you realize your doubt is fear and you have no choice but to do it.

I don’t feel bad for the people that think they have what it takes, give it a shot and fail.  I admire those people.  They tried.  I’m concerned about the people that feel it in their bones that they should do it and don’t because they are afraid or feel their family or mortgage or lack of education or specialization is a burden to them.  I fear that in the culture of starting up we’ll lose someone that could have otherwise changed the world.

So I beg you – if you can’t let it go….GO FOR IT!

After graduating college I built and sold two internet start ups: Community Connect Inc. (publisher of AsianAvenue.com, BlackPlanet.com, MiGente.com) to Interactive One for $38 million and Fotolog to The Hi-Media Group for $90 million. Nowadays I’m the co-founder and CTO of my third venture CrowdTwist, Inc. and I’m a seed stage investor in VYou.com and Year One Labs.

I’ve had the unique opportunity to be involved in an industry that has not only changed within itself but has shaped how we do almost everything in our lives now – interact, shop, research, and learn. So my experiences leading up to CrowdTwist have been so different even though the fundamental premise of what I do hasn’t changed: I start companies. I’m fascinated, though, how some things haven’t changed much and others are completely different.

Here are 11 observations that struck me as really interesting as I’ve grown CrowdTwist over the last year:

#1 I’m amazed that Craigslist is still an effective place to find incredible entrepreneurs and still an amazing recruiting tool. The quality of people that still use the site is staggering. Scott Heiferman and I first encountered each other there before starting Fotolog and Irving Fain, Josh Bowen and I (the partners at CrowdTwist) met through a posting they made about their idea originally called Kick Flow. Cheryl Tom and Paul Young, the other two absolutely incredible developers at CrowdTwist, found me by way of postings in the Internet Engineering section of the Montreal job board. I call Craigslist my dirty little secret and I have some advice for you – the person on the other end of that posting could be a hitter…like me.

#2 I was absolutely fascinated by the fact that we started CrowdTwist and began developing a killer product before ever having met Cheryl and Paul in person. She’s in Montreal and he’s in the UK. This idea that you can build a business by finding talented people in other locations, coordinate with them online and produce something amazing is just incredible to me. So to all those spoiled NYC developers (including me) – be careful! We’ve got some stiff competition.

#3 Gamification is going to be something everyone hears about this year. Many people are going to start integrating the basic concepts into their products. CrowdTwist is clearly in the gamification business though we believe our set of features offers a better user experience than just basic game mechanics. But we’re in the right place at precisely the right time and I have to say there is nothing more exhilarating than being on the innovating end of a new concept. You may not have heard of CrowdTwist yet, but you’re going to very soon.

#4 I have a really hard time getting to sleep at night. It’s not that I have a disorder, I just don’t like it very much. I give myself a very hard time before I go to sleep because I’m absolutely paranoid that my competitors aren’t sleeping, that they are sitting up coding their brains out trying to catch up. So I’m happy that the paranoia has not subsided, it’s an important attribute to have as a start up entrepreneur. It’s balanced now, though, with the confidence I’ve earned by having two prior successes. I’m confident I will be paranoid tonight before bed but I’m also confident that I’m going to lead.

#5 I absolutely love the fact that CPUs are now essentially utility. At Community Connect Inc. we had to procure hardware, build it out, screw it into a rack and wire it up, a process that could take days to weeks. Now with a few mouse clicks I can spin up a new server and within seconds add more horsepower to my infrastructure. I would be surprised if I ever have to purchase a server again and I am very happy to never have to “rack and stack.”

#6 I never actually sat down and thought about this in the past but I’m amazed at how many times I’ve rewritten our product. It isn’t something that happens consciously. I just say to myself, “Oh man, I can make this so much better.” And the more I dig in the more I realize I need to take out large parts of the code to make the changes that much sweeter. If you’re a first timer, don’t get attached to what you just built because it’s going to be rewritten 4 more times (and counting).

#7 Ten years ago the idea of companies implementing other companies’ APIs was almost laughable. If I tried to bring Facebook Connect to the market when we launched AsianAvenue.com I would have been laughed out of the room. Now, I’ve integrated with Facebook, Twitter, MySpace, Foursquare, SendGrid, Authorize.net, Amazon AWS, Yahoo!, Gmail, Windows Live, and AOL. It’s amazing that so much functionality and power can be provided through simple APIs like this. But it’s also important to notice how many you can bring to bear free to enhance your product.

#8 Dan Cowgill, the Chief Architect at Community Connect Inc., told me a few years back that the most innovation in our industry was happening in the browser. The back end hadn’t change – it was still Linux, Apache, PHP, Oracle, MySQL, etc. But the browser was taking huge leaps and bounds. I really appreciated his comment but didn’t realize to what extent those changes would effect the Front End Developer (FED) role. Being able to put together world class HTML, CSS, and Javascript is an essential part of building Web applications now and HTML 5 is going to require even stronger skills. Watching the FED role evolve and now being super dependent on it has been really interesting. I don’t think it’s a matter of if I will have to delve into learning what a good FED knows, but rather a matter of when.

#9 I love how the tools for building a business have completely changed. Two absolutely critical services that we use at CrowdTwist are Skype and Pivotal Tracker (among many others). But more mind blowing is that I can talk at my computer and be communicating with Cheryl and Paul in other countries while organizing our project plan in real time by dragging and dropping tasks around…and it’s ABSOLUTELY FREE! In the past this was all done with everyone in the same room using whiteboards and index cards. Shawn Smith – that one was for you!

#10 No corner office, oak furniture or executive assistant for me. Not just because I’m running a cash strapped start up either. My “office” is my North Face backpack complete with all of the cables, books and laptop that I need. The essential ingredient is Wifi. As long as I’m connected I can do my work from anywhere in the world and be just as productive as when I’m at home at my workstation. It’s still a little amazing to me how crappy bandwidth is in general and how difficult it can be to find publicly accessible hot spots. Thankfully, there’s Starbucks.

#11 I’m loving how much respect the start up ecosystem is getting and how NYC is changing in this regard. It’s fascinating to read questions like, “Should I get a college degree or do a start up?” Or to see people actively quitting their careers because they believe they can build a company that provides an essential service. I invested in Year One Labs (located in Montreal) because the city’s abuzz with start up activity. In addition to being beautiful, it has the advantage of McGill University and thus a wealth of incredibly smart, motivated engineers. It helps, too, that they’ve got great technical infrastructure and a lower cost of living. But I don’t think what’s happening in Montreal is unique. It’s happening in Boston, Chicago, Seattle, Paris and I’m sure plenty of other cities. But I definitely get more respect now and fewer odd glances when I tell people that I’m a founder in an internet start up.