Factories of Make-believe

Ben Horowitz recently published his book “The Hard Things, about Hard Things”. It’s no exaggeration to say I love it. As a third time founder having experienced many of the challenges first hand I wish that book was written 15 years ago when I tried to build my first company (although I’m not sure, I would have read it back then. Learning seems to be easier in hindsight).  One of the great things about Ben’s book is that it focuses on sharing the hard lessons, when it’s not all smooth sailing.

Inspired by this, I thought I would add some of the lessons from Tradeshift. Just like Opsware, Tradeshift is a company in wartime as are most B2B companies trying to break into highly entrenched software markets controlled by incumbents with massive cash moats. At Tradeshift we have been fairly lucky in our ability to attract high-level investors who believe in our vision and who want to back us for the long-term, but that doesn’t mean every single day isn’t a fight.

The topic I want to focus on is leadership. Three years ago at a dinner with Ben White and Stephen Chandler from Notion Capital I asked them what had been the hardest part of scaling their company, Message Labs, from startup to a 750m USD exit. They both replied without blinking – scaling leadership above a 100 people.

Curious, and still full of youthful arrogance, I asked why. “Isn’t it just a matter of hiring the right people?”

Stephen patiently explained to me it was not as simple as that. You need to build a culture, training and leaders and make sure communication is aligned all the way through the company. You can’t rely on your own ability as a founder to just stand on a soapbox and be heard and understood.

Talking to other CEO’s and co-founders it’s clear to me that lack of clear leadership across the organization is what kills most C or later stage companies. Having earlier talked about how we handled culture and leadership in the earlier stages of Tradeshift’s history
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I thought I would share how we organize leadership at Tradeshift today and some my own beliefs in what makes for efficient leaders.

Two weeks ago we had a Global Leader Camp, which is our own new talent and leadership development program at Tradeshift. We invited 27 current managers or people who were seen as leaders in the company from their actions or roles, making sure to both include current leaders and the talent for the next generation of leaders.

The goal was to make this a generation of leaders that would help shape Tradeshift through the next three years and lead from the frontline.  We focused on leadership and not so much management (leadership is the job of setting direction and inspiring others, management is the process of getting shit done) as we already have a very strong results culture.  We wanted to make everyone capable leaders of product, people and vision in the diverse and challenging environment that is Tradeshift.

One of the reasons we started this program was to get away from relying solely on the founder signal – where leadership basically was me or my co-founders getting up on that soap-box and having everyone listen and be inspired. We needed leadership on the ground. We were seeing too many people feeling disconnected from the vision of Tradeshift and what it meant for them, too much cynicism (building highly complex B2B products in wartime will do that to you) and people who loved Tradeshift, but were starting to burn-out after three years of running at max speed. You can’t just wish these issues away or do an even more powerful speech to have them disappear. As a founder or CEO you need to go to the root cause and even more scarily hand over some responsibility to others in maintaining and building the vision.

The below presentation is what I used as a starting point, detailing my own leadership beliefs as a way to start discussion about what we all considered leadership.

 

As a leader you have to realize that the only real tool you have is yourself, your own experiences, beliefs and ability to execute. It’s an extremely exposed position because any failure point to flaws in what makes you who you are. It’s also extremely rewarding to succeed as you are growing personally.

So the first disclaimer is that what works for me, might not work for you and that’s ok – as long as you do believe something and use that in the way you lead others. I encourage everyone to find out what works for him or her.

So adding a little bit of context on my core beliefs:

Start-ups are factories of make believe
Everyone remember that scene from Peter Pan where he tells you that you can fly if you just believe it? Stepping out of that window and trusting it is a radical move is the same thing as working for a startup. A startup is only suspended by the collective belief of the people who work to build it, its investors and its customers.

That also means you always must to walk that fine line between hope and cheerleading and being realistic and critical. You can challenge direction of where you are flying, but never if it’s possible to fly (unless you want to crash badly). At Tradeshift we typically say it’s great to be critical, but sucks to be cynical (permanently not believing in anything).

Flying requires bold and visionary ambition
This next step is almost as important as believing you can fly. Make sure you have a bold and visionary ambition. People generally won’t risk their life (or time) on something that is not meaningful. Very few people will take that step into emptiness to make 1% better toilet paper. This goes for both your company and your team. Make sure the goals you set and the team is connected to the vision of the company and not just “make x 1% better”.

Vision without execution is just hallucination
It feels really nice, but doesn’t do shit. When you are challenging people to trust you, to take the leap into emptiness, it’s really easy to get called a liar if you fail. The only difference between being a liar or a visionary is execution. Once you have taken the jump, work your butt off to make sure that the vision becomes reality. You need to cross that chasm of disbelief and the only way to do it is by proving it through execution.

Lead from the front
In the second year of Tradeshift I was sitting together with a new colleague getting our board presentation ready for the next day at 1am. I felt really sorry that he had to spend his night like this and I told him that I was really sorry. He looked at me and said, “That’s no problem, and the difference between tonight and my old job is that my CEO would never had been sitting next to me.”

There are plenty of long nights, weeks, months, years in any start-up – remember that everyone is watching you and if you are the first to shovel shit – they will follow. 

Fight for your vision, always
Quitting is for pussies. This is Ben Horowitz advice for CEO’s but I think it’s valid advice for any leader pursuing an idea.  Any new idea that matters meets massive resistance so get ready to fight for it. The difference between a leader and everyone else is often how much they are willing to fight for their ideas.

Challenge conventional wisdom
Ben Horowitz talks about selection bias, which is what happens when decisions are close to 50/50 and leaders go with the group because they are afraid of being alone when they fail (better to fail as a team). This is not just something that matters between a CEO and his board, but all the way down in an organization. Leaders are leaders because they dare taking controversial decisions and stick to them, even when they go against the grain of the group. 

Be the first to change direction when needed
You have to fight for your vision and challenge the conventional wisdom. But you also need to be the first to change direction if your decision was wrong. Don’t cling to it because you are afraid of losing face. The ability to let go and move on is one of the most important skills of a leader.

Radical trust
If somebody fucks up the biggest thing you can do is help him or her, rather than blaming or yelling. Trust me, they will remember that a 100x more than you being angry. In Tradeshift we practice radical trust in the people we hire and give them a lot of freedom and when they screw up we don’t take it away. We encourage them to move on and learn.

Vulnerability is strength, not a weakness
I’m an insecure overachiever and I can be afraid that others will think that the incredibly skilled and experienced leaders working for me are better than me. But I’m not afraid of showing that vulnerability. Through the years I have learned it’s better to be real and flawed as a leader rather than trying to project a picture of constant perfection. Everyone will have an easier time relating to you and they will not abandon you the moment you fail (and you will fail many times).

These are the beliefs that have helped me navigate as a leader and what I shared with the next generation of leaders in Tradeshift. Together with an intense program of strength based leadership training, coaching, cultural leadership and working with real life leadership challenges I’m sure we have generated a strong generation of leaders in Tradeshift who will help lead from the trenches for the next three years.

Screen Shot 2014-10-22 at 7.19.52 PMWhen we created Tradeshift, it was always with the idea to do something bigger than what we had done before. I think it’s common for entrepreneurs to want to change the world for the better, but I think what is fairly unique to my co-founders Mikkel and Gert and I is that we had already gotten a taste of that in our previous jobs. Before creating Tradeshift, we all worked for the government, and while it’s quite embarrassing to admit in a world of ultra-libertarian start-ups who all think the government is the enemy of anything good and the private sector is the perfect answer, I actually have to admit that working for the government was one of the best jobs I ever had.

Not because of the system or the structure or the rules or the bureaucracy – all of that is as bad as you imagine, if not worse, really. No, it was because of one simple thing – we could change the world (or at least our country). One of the first things I realized as a young public servant was that, if you have ever asked why they don’t do something about a problem, working in the public sector, there is no “they” to fix things – if we had a problem to solve, we could either mess it up and my country (Denmark) would be worse off, or we could fix it for the better. Nobody else would do the job – Tag, you’re it!

The second realization was that, as technologists, we were in a unique position to do this. Most people don’t realize it, but governments are software today: any law voted on by Parliament needs to be implemented in software before it will have any impact, and as anyone writing software knows, there is a lot of flexibility in interpreting those rules as they are handed down. The law might say that the government needs to save a billion euro by digitizing payments, but maybe we can “hack” it a little bit by implementing it as open-source instead of a proprietary system and further tweak companies’ insights into those payments, increasing transparency and creating a better overall system.

Some would of course say that this is not ethical or how the system is supposed to work, but as a hacker (of culture and processes), I believe it’s your duty to try to change structures for the better when you can whenever you can.

Overall, I think we did more good than bad while we were there (and many of my brilliant colleagues continue to do good as public servants). In our case, we were lucky to have a small, crazy crew who believed in the mission, and together, we created an impact many times larger than what we could have achieved if we had played by the strict rules. I believe that Denmark today is better off in many areas, such as open-source policy, open networks for trade, accessibility for supply chains, and openness and transparency in government IT-projects. I know that, technically speaking, we were probably supposed to be neutral and perfect public servants, but who cares? I didn’t study to be a public servant, but sociology, and I’m mostly just a geek who thinks that social and cultural systems are as interesting as technological ones.

So back to the idea of creating something bigger. We always knew that we would not be in the public sector forever, partly because our impact would diminish as we started to worry about our careers and not making mistakes and partly because there are only so many lawmaking meetings you can sit through without going crazy. So whenever we asked each other, “What next?” we always agreed it should be “bigger” – not bigger as in more money or prestige but bigger as in impact on a global scale that matters. But how could we do that?

As a sociologist, I’ve always thought that the current view of the world, which many have of good or bad – is wrong. Capitalists want a better world as much as socialists do. Companies don’t work the way they do because anyone is out to screw everybody over; they work the way they do because they are stuck in suboptimal structures and processes, and the same is true for governments, by the way. The way you change them is by creating incentives where everyone wins; in a way, you have to “terraform” the landscape of business, change the conditions and optimize the outputs while increasing value for the system as a whole – this to me is not a political goal but a human one.

In the world today, there are a lot of things we can do to make the world better, and I think that a lot of things are already happening, such as greater transparency and media freedom through new services like Facebook or Twitter and access to education and knowledge through Wikipedia, but when it comes to the core economic structures and their outputs, we are stuck, and this is one area where we really can make a change. Far too often, business is still a zero-sum game, and far too often, the way we think of production creates a net negative impact on society when you include pollution and waste in the supply chain.

So with Tradeshift, we set a big vision, to change how business is done. Previously, I’ve talked about how we see this affecting the value chains of businesses by democratizing access to data and information (link), but I think that there is another area where we can have an impact: the environment. Of course, there is the obvious impact of getting rid of paper in the supply chain: today, 97% of all B2B transactions are done on paper (estimated by some to account for more than 10% of the world’s paper use). This is a massive waste, not just because of the resources going into producing, recycling, transporting, and processing it but also because it has absolutely zero value in its paper form. Whenever we receive a paper invoice or something similar, the first thing we do is digitize it by entering the information into a database or transforming it in some other way to a format we can actually use.

Initially, we spent some time trying to figure out the impact of all the paper being removed (15 million pieces of paper every year for the NHS alone), but it became clear that, for us, it doesn’t stop there. We were blind to the real problem by looking at the obvious one, which was the paper in front of us.

All this paper, all these transactions, make up the global supply chain. This is where the real waste is today. The way we produce goods is linear – we mine materials, we build things, we ship them, we sell them, and we trash them. One of the reasons for this is not bad will or intent but the fact that our processes are not configured for anything else. In a better world, we would repurpose a lot of the goods sold or, even better, lease them (do you really need to own a refrigerator?), but our supply chains are stuck. Imagine that all goods were built not merely for becoming output (waste) but for becoming input (value) in the production of new goods. This is not just some hippie idea of building a better world through recycling but actually makes great economic sense (McKinsey has calculated that repurposed goods provide net 12% more margin than non-repurposed goods). We also see a lot of companies beginning the transition from manufacturing or production to delivering managed services (Rolls Royce now leases jet engines instead of selling them), improving their business overall, employing more people, and reducing the environmental impact. But often, companies wanting to go through this transformation end up stuck not because of technical limitations but because it’s too hard to change processes because the underlying systems are manual, paper based, and frozen.

My personal view is that it’s possible to make another “hack” on the global economic system by enabling different processes at the core level – change how the supply chain is linked and what is considered inputs and outputs, and you can change how production happens. Just like the government, companies are governed by laws. These laws are not created by Parliament but most often by their ERP systems. The business logic and rules express limits on what is possible, so if we want to change the supply chain to work for the good of the environment (and these companies), we are up against the walls of legacy software (… it will take a long time … it’s too complex … this is not how our processes work). Hack those processes by enabling a different kind of supply chain, and you open up the world for change.

Of course, you can’t do this just because it’s a good idea. Everyone involved needs to believe that the new way is better. Most often, the driver is not the environment but real pains that are caused by the inflexibility of current systems: suppliers being paid late and going bankrupt, difficult cash management for the Fortune 500, process cost, information lag, and the lack of ability to innovate and change processes. At Tradeshift, we help companies solve these challenges all the time, but at the same time, we “hack” their culture a little bit, show that running a modern supply chain can be a net positive not just for one company in the value chain but all of them, and we are very lucky to have cool customers who are using this process to enable them to create new kinds of supply chains, like DHL working on a sustainable supply chain or NHS eliminating 15 million pieces of paper per year (environmental and people waste).

I personally think that this is just the beginning because, as the supply chain data become digital and opened up to innovation, the possibilities are endless. Imagine what could happen if Fortune 500 companies could not just monitor the economic health of their supply chain in real-time, but also the environmental health. I think the parallel is obvious in the consumer space. Think about how our smartphones with their sensors and digitized app platforms enabled us to monitor our health in real-time and let others innovate on top of that data. Why shouldn’t we do the same to our business processes?

I know that the change won’t change overnight, but as the Internet generation, we believe that change for the better will always happen if you enable it and that, as long as you are on the side of the principles of the Internet (collaboration, openness, and access), everyone wins.

(Also next time you see a young talented person working for the public sector, give them a high five for trying to make an impact where it is the hardest)

facebook-egypt

I don’t think that most people in Silicon Valley understand what viral means. Facebook is viral, Twitter is viral, but they think it means it spreads fast, “like a virus”, but a virus don’t just spread fast, it changes everything it touches. That is why it’s viral to begin with, because it changes the subjects it spread through. The same is true for technology; Facebook and Twitter have undeniably changed the world. We are changed as a result, Mark Zuckerberg claims that more transparency is better, I tend to agree with him, but I only think we have touched the surface. We haven’t touched anything that really matters. We have democratized media, without democratizing the underlying world that media reports about.

Business is an organism, networks of trade move value, and money is a signal, switching value among the participants, empowering the ability to act. Today this system is opaque, closed and built to defend the status quo. Huge chains of companies move money, goods and value up in the system towards those who have leverage over those who have not; this is the literal supply chain. It defines the world; the top is in the west, the bottom in the emerging world. The lower you are in the chain, the more of the value you produce and the less of the benefits you get. If you are a supplier you will be paid in 60, 90 days, just because those higher in the chain can set the terms. Causing people to get paid less, companies to grow slower and create fewer jobs than they potentially could and in the end I will argue, everyone to lose.

This is reflected in the technology of business, those who can afford it run SAP and similar. They are all built on the same idea and principle, centralize data, power and control, those who buys these systems exerts control, over suppliers and their employees.  While they sell on a promise of cutting cost, cutting cost in organizations by centralizing and controlling how people work, cutting cost in the supply chain by enforcing anachronistic systems for business, that all benefit the large buyers.

They reinforce the structure of the business networks they are a part of, in a literal sense. If you were a supplier to one of our large customers before they switched to Tradeshift, you would pay a “tax” of 0.15% on every single transaction you did with them, just for the privilege of telling your customer “you owe me money” often thousand of dollars, for no other reason than because SAP could get away with it. At the same time if you worked at this company you would be using systems, that would force you to be like a trained monkey, say “yes or no” to this invoice, move this data. Most corporate systems are an extension of the assembly line, but instead of moving parts, you are moving data, our corporate software is build on 100 year old ideas about how people interact.

This is why there is no independent revolution in business, no massive network of indie developers bringing down the house and causing an internet revolution, yes maybe for small business, for the small things, but when it comes to the things that matter, the core of the economy in banking and the real value the incumbents are still tightly in control by centralizing power and building closed systems.

We propose something radical; we propose that we democratize business. That we open up the networks, that we create transparency and that we do it all with the blessing of everyone participating (except for the old incumbents). What if there was a global network for business, where everyone could participate? Where everyone would get value out of participating. Not just the top of the supply chain, where developers had free access to develop and build applications on top of shared data and where increased transparency is the result. Nobody would have said that this was possible in media before Facebook or Twitter launched, by now nobody is arguing.

This is not something we just think, it goes into everything we do, summarized the following are the values we design our product by, build our organization by and values we share with our customers:

  • We value transparency over closed systems
  • We prefer value generation through sharing over profit maximization
  • We value collaboration over command and control
  • We believe in empowering the individual over micro-managed processes

We do this by following the money, we start by offering companies a better way to connect and do what matters to them, to exchange value. In Twitter the media is the tweet in Tradeshift the media is value, money, business information and trust exchanged digitally and we open it up for everyone to participate on equal terms (free for suppliers, paid for by buyers). Today these processes are all inside the SAP system and heavily taxed, data arrive manually, as millions of invoices processed on paper in India, payments written as checks, phone calls, as a network it’s not unlike the manual process of news just a few years ago. With Tradeshift companies connect and do business in real-time, starting with the suppliers, connecting, sharing with each other and creating transparency in the supply chain, they then approach the buyer and say, let’s connect electronically, but on our terms. Without the paper business changes radically and the SAP system becomes the last stop of data rather than the central hub that controls everything.

So why will large global companies participate in this idea? Because it works. The philosophy behind SAP and their partners is slowly dying. They were created in a time were profit maximization was the primary objective for any large company, today those objectives are much more nuanced a new breed people inside these companies focus on value creation, they don’t see the world as a zero sum game, they have figured out that if their partners, their supply chain and their customers grow, they will too. This is not just technology companies, but also companies within manufacturing, health-care and most verticals you can imagine. This change is global too, in the 2.5 years Tradeshift have been live we have signed up 500,000 companies (with millions of employees) in hundreds of countries. Not because they wanted to be part of a revolution, but just because it was easier, faster, more convenient this way (just like I doubt anybody ever signed up to Facebook because they felt they needed to join a revolution). This change is real, we have companies all over the world that now are getting access to global customers, finance, data they did not have before. Because they have data they have power, they are suddenly in control and can make informed choices, they can build better companies, grow faster and create more jobs.

This is just the start; imagine what would happen if all the companies in the world is connected this way.

I’ve tried both failure and success. When I built my first startup Human Zoo, everything went well until 2001 — at which point we lost our largest customer and shortly after, ran out of money. I was probably too young to run a company, too inexperienced and I made a lot of mistakes along the way for sure but I tried and I fought hard but it didn’t help. In 2001 we were out of options, we couldn’t extend credit or raise new funding and so there was only one option: bankruptcy.

Well that’s part of startup life, right? Just go out and try again?

Not quite. See I lived in Denmark and in Denmark you don’t just go bankrupt. It haunted me for 10 years, not just financially, but also mentally. People I knew would avoid me, my parents would avoid talking about it at parties, I was branded a failure. Even 10 years later, running Tradeshift, I would still get skeptical questions that referred to those early days.

But this is not really a story about me. Instead it’s about something fundamentally wrong with Danish startup culture — or maybe just Danish culture. We don’t celebrate success; we just see it as a failure waiting to happen and when people fail, we can’t wait to kick them when they’re down.

Recently, my friends at AppHarbor had to make a tough move: close down their Danish branch with three employees or close down the entire company. They were still growing, had an increasing customer base and revenue stream, but it was just wasn’t happening fast enough and they soon knew they would run out of money before reaching break-even.

They made a very tough move; they made the Danish branch go bankrupt, even though the employees offered to work for free (under Danish employment law, employees would not be protected  in such a case.) The result was that the Danish authorities (by extension tax payers), other Danish companies collectively got stuck picking up the bill of 3 months pay for the developers and some creditors are owed money.

Was this a pretty move? No. Does this move have some bad karma? Yes. Did they somewhat exploit the system? Yes. But did they save their company? Yes!

What happened next was unfortunately predictable: the Danish startup scene exploded with scorn. The co-founder of 23 Video wrote this blog post, quoting:

“but it’s a symptom of a problem, a symptom of startup chic infecting us. There is honor and character in how we succeed and how we fail, and AppHarbor reflects poorly on the Danish startup community.”

The CTO of another Danish startup (who just got funded through Dave McClure’s 500 Strong – which I think is awesome) wrote this post , which I’m quoting from too:

Rumours had been going around for a while before this, that the heavily funded Y-Combinator alumni company, who’re supposed to be the Heroku of .NET, was not doing as well as expected. This is probably in part caused by the fact that selling hip cloud services to the enterprise, which traditionally uses .NET and Java based solutions, is a little more difficult than selling a hosted Ruby on Rails environment to young developers without a mortgage and thus also no concept of risk aversion — or “nobody ever got fired for buying IBM equipment.” 

It’s interesting that it’s not outsiders, or even journalists ripping AppHarbor apart. In fact, not even the employees that were fired (who offered to work for free, because they believe in the idea) but fellow startup founders.

Nick basically states that he never believed in their business model and always found it hard to see how they would succeed. Steffen, who is a co-founder himself, called them “startup-chic”.  There seems to be a good portion of jealousy at play here, with telltale use of phrases like “heavily funded.” Since when has 1.4M USD meant strongly funded?

This is Danish culture at play at its worst. Yes, they fucked up. They know it. But they are not fucking “start-up chic”, in fact I would go as far and say they are more real than most Danish startups.

They went to San Francisco without any money, shared a crappy apartment for 6 months without visas and coded like mad. They have built a platform that is amazing from a technical perspective and they have users who love them. They got into YC! because they were good and willing to take a HUGE risk personally. They bet everything on their dream.

I wonder how many of the armchair founders that are now calling them startup-chic (or expected them to fail) have ever have taken a similar personal risk? Or if they have, how come they suddenly forgot how it was…

In my opinion Nick & Steffen and the others ripping at AppHarbor don’t get it. Yes, it was not a good move, it was not a nice move, it was not the ethically cleanest move — it was the ONLY fucking move they had and they took it. There is no honor in failing. It’s always brutal, messy and dirty and everyone who thinks differently has never tried it.

To quote Ben Horowitz, from “The Struggle”:

You think you have no moves? How about taking your company public with $2M in trailing revenue and 340 employees, with a plan to do $75M in revenue the next year? I made that move. I made it in 2001, widely regarded as the worst time ever for a technology company to go public. I made it with six weeks of cash left. There is always a move.

I don’t expect journalists to understand this, or anybody in a normal job, but I’m sad that fellow founders don’t get it. This will never be a real community if we turn on each other at the first sign of trouble.

So today the internet went on strike – for good reason. Stupid politicians are trying to censor the internet in the name of protection against piracy (not the pirates who kill people off the coast of Africa, but the geeks with glasses who download illegal files in the basement). Not only is the attempted legislation of SOPA and PIPA stupid because of the potential for abuse of censorship, but it also opens the very scary possibility of having trade wars online, where US companies ask to have global competitors blocked or banned, and vice versa.

So we all agree that SOPA and PIPA are bad, they suck and they should go away.

But I still have a bad taste in my mouth about some of the protests, to the point of agreeing with Paul Carr when he says that it’s silly of Wikipedia to go dark to protest about local US legislation. The reason is simple: SOPA is far from the first legislation implementing DNS-blocking globally (this has even been removed from SOPA). Where were Wikipedia and Google when seven European countries implemented similar legislation? Now the Americans will of course say, silly European – why don’t you get your own companies to protest? But here’s the problem: for a protest to have any kind of effect, it would need to include companies that consumers use every day, and they are – at least on the surface – American right now. Unfortunately, SAP, Spotify and Just-Eat haven’t done much to combat European censorship, and even if they did, I’m afraid it would not make many dents in Fortress Europe when it comes to censorship and DNS blocking.

That’s why Google and Wikipedia suck, because even if they are US-based, they should realise that they have a global reach and responsibility. Don’t get me wrong; I’m very happy that they are doing something: I just wish they had done more, and earlier. We will not gain a free internet just by winning the fight in the US, and that is why it’s hypocrisy when Wikipedia goes black when the US implements SOPA, but didn’t do so when Denmark started blocking foreign betting sites. It is especially dangerous behaviour for a site that is being relied on by users from around the whole world to be neutral: today’s move has shown that these sites are, first and foremost, US organisations.

Nevertheless, we have to start somewhere, and the lack of action previously should not stop us from doing something now. I just wish that these organisation would step up again when censorship is enacted in Germany, Denmark or China, or we will lose Wikipedia for real, because we won’t trust its neutrality.

Personally, I will start by bringing this topic to the table when I meet Neelie Kroes, the EU Vice-President and Commissioner for the Digital Agenda in two weeks’ time as part of a young advisors panel.

That said, happy internet strike day!

Recently Michael Arrington wrote a very open blog post about being fat and wanting to do something about it, which really struck me. He was inspired by the scientific approach of one of the characters in Neal Stephenson’s Reamde, who uses a treadmill while working. The post struck me not just because of Arrington’s honesty about his own challenges, but also because I remember reading the book and having exactly the same reaction. This was really smart, and finally the blog post stuck me, because I’m fat—and, worse than that, I’m fat and smart.

Most people assume being smart and fat are opposites; in fact, you often hear overweight associated with stupidity, which makes it an even bigger taboo to talk about. I’m not fat because I’m stupid; I’m fat because I obsess about things to an extreme degree. In fact, I’m anything but stupid, having started three companies since I was 19, becoming the youngest ever Head of Division in the Danish Government – responsible for the Danish IT infrastructure when I was 30 – and later starting Tradeshift and taking it from 3 to 67 people in under two years. I should by now have proved that I’m anything but stupid; but I obsess, and that can be a problem.

When I do something, I do it to the exclusion of everything else in my life: the only thing in focus is the project – the goal. That is what makes me a great, but also quite uncompromising, person to be around; I just keep trying, keep attacking, keep finding a way to succeed with whatever I’m doing. The only rule is that it has to pique my interest; if it doesn’t, I will never, ever obsess about it and will rarely succeed. If I do obsess, well, then I succeed—every time. Unfortunately, my body has never been one of those things: it has, more than anything, been a victim of my other obsession with trying to change the world (like a lot of other people, family and so on) unfortunately overweight is seen as a sign of low intelligence in most societies today and I have often seen people judge me by my size before they know me, in fact one of the small joys I have is the advantage you can get just because people instinctively think that fat = stupid. That should of course not be understood as me wanting to be fat or that I don’t care about the negative consequences, it’s just that when I obsess about a something I shut everything else out.

That kind of obsession is great when you are trying to build a company—maybe even a requirement: you need to be able to focus to the exclusion of everything else or you will have a very hard time succeeding against the odds. So what to do? For me, the revelation came with the same book that inspired Arrington, but in a different way: for me, it was about the feedback loops. In Tradeshift, one of the things I obsess about is our data; we have data dashboards creating very visual feedback loops on how we are doing, and suddenly, after reading Reamde, I was curious: could I do the same thing for my body? After all, the body is an organic thing, which unfortunately is not built with a set of Bluetooth sensors, but I started researching what was possible today (and, yes, started to obsess a little bit).

Within a week, I found that there were gadgets that could wirelessly monitor and measure my weight, steps, blood pressure and sleep, and finally I needed a way to monitor what I ate. For that I picked WeightWatchers after reading a Wired article about the science behind points. In other words, I suddenly had complete data tracking on everything I did, and it instantly changed my behavior. I can’t wait to get up and exercise in the morning to see if there is an effect on my blood pressure or weight, and I’m curious as to how altering my diet will affect my BMI; and suddenly I can monitor this in near real time.

This made me think… I suspect we are on the verge of a revolution. These tools seem to be only the beginning: What if food could report wirelessly its exact composition in the supermarket? What if we could monitor every aspect of our health 24/7? I know a lot of stuff is already going on in this field, and it’s not my area of expertise, but my instinct tells me that this could be an even bigger revolution than the transformation that tech has made to information and knowledge over the last 10 years, all fuelled by the ability to have computers everywhere in the form of smartphones.

Anyway, if nothing else, next time you see a fat guy or girl, don’t think ‘stupid’; they might just be focusing their energy another way than you are.

The other day we were interviewing a great new software developer for our marketing team, Denica, when I asked if she had any questions, she said, “I would really like to work for a startup and I’m unsure I will fit into a big company like Tradeshift”.

I yelled, “We are a startup!” and then I realized – we certainly don’t look like it.

We have four floors in the centre of Copenhagen. Nice desks, furniture – we are comfortable. In Danish you would say it’s “hyggeligt”, which means something like cozy.

It scared the shit out of me. Being from a nation where government welfare is the default, a nanny state, I can see how “hygge” can kill any startup. The reality is that Tradeshift is still very much a startup: we might look like a real company, but underneath that very nice and well-marketed exterior is a fragile being in its most dangerous state – “a startup looking like a real company”.

This is the state where new hires might not know the difference between a startup and the former companies they worked at if someone didn’t tell them. Two years ago it was self-evident that we were a startup from the simple fact that we were sitting in a garage freezing our asses off as we could choose between running the heater or having power for our laptops and Internet (no we did not choose warmth); back then we were never in doubt what was next, because everything was on fire and nothing worked – we worked like maniacs and loved every second of it, we were not afraid of anyone and we had nothing to lose.

As your company grows, you can’t help loosing a little bit of that feeling, you hire managers, create new processes and just settle into certain ways of “doing stuff” and suddenly before you realize it you look like a real corporation not a startup, but you are not, the investors still expect extreme growth and that you disrupt something, comfortable people don’t disrupt. But more than I believe that most existing management methods are not scalable to the hyper scale required for fast growing startups, classic command & control just breaks down when scaling fast.

So what do you do?

At Tradeshift we specifically try to counter becoming too corporate by disrupting our own organization continuously.

As we grew we knew we had to do something to keep the startup feeling alive. We introduced some simple concepts to fight the corporatification and make sure we keep the best from the early days.

1)        Break the pattern: every three months we have our Tradeshift team camp, which is a crazy experience of 48 hours non-stop work on new concepts, strategies and ideas combined with plenty of beer and lack of sleep – in short original startup-life simulation.

2)        Piracy is expected: we try to drill into anyone that we expect them to be pirates and make decisions they think are right first, and ask later. I believe in hiring really great people, giving them a direction and then letting them run as fast as they can.

3)        Accelerate the problems: challenges are good and comfort isn’t; if we are becoming too comfortable I try to break something, typically by overloading it. We just told our sales team that there are no limits to how much they can sell in 2012, knowing that the rest of the organization still don’t have a clue how we will deliver, but in the end I know they prefer the challenge to boredom.

If you can keep your organization challenged, breaking the patterns and encouraging piracy I think you can postpone the inevitable growing up (at least for a little while).

Now I can’t wait till Denica experiences her first team camp in December and hopefully learns that we are still very much a startup.

But just to be sure, I did this presentation at our last company wide meeting.

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