Twentysomething: Start a company in 3 days with 70 friends
By Ryan Healy – According to adults the world works in a centralized, hierarchical structure and that’s the way it will always be. They say young people will eventually adapt and accept things for how they are, despite the fact that decentralized websites and organizations have defined our childhood and early adult years.
I don’t buy it. We grew up with open source websites like Napster and Kazaa. Now we use Wikipedia and Craigslist daily. All of these sites have one thing in common; users control them. I don’t need permission to post an apartment for rent on Craigslist and I can make up any word I want and create a definition in Wikipedia.
Now there is undeniable proof that Gen-Y is bringing decentralized organizations mainstream…
After turning down $1 billion, 23 year-old Mark Zuckerberg took the user controlled Facebook to a whole new level by allowing everyone to create applications without pre-approval. If you really think about it, Facebook allows anyone to work for them without the hassle of reporting up the ladder, attending pointless meetings or even leaving their living rooms. With a good idea, a little programming knowledge and a small amount of money, anyone can make money through Facebook while simultaneously increasing the company’s bottom line.
Facebook’s revolutionary new concept is just a glimpse into the all inclusive, non-hierarchical, “out of the box” future that generation-Y will continue to invent and embrace. My friend and web designer, Devin Reams reaffirmed this thought when he told me about his experience at Startup Weekend.
The event began on a Friday, when 70 people showed up above a bike shop in Boulder, CO to vote on their favorite previously submitted business ideas. They decided to create a business that allowed people to take quick polls of their friends’ opinions.
“We broke into groups based on ‘expertise’: business development, PR/marketing, user experience, design, front end development, back end development, and legal. The groups allowed for quick action,” says Devin. “We had seven-minute update meetings every hour and the each hour flew by. On Sunday night we had a business model, website, and marketing campaigns ready to go for a product launch.”
The company was successfully started but no product had launched to the public. “This was frustrating,” says Devin, “since the world was every move on live video from Ustream. But, the project has continued beyond the weekend and a launch is expected next week. We’ve been playing with it internally and it’s amazing what a decentralized group can accomplish.”
After this amazing weekend, the group ended up with a “fast polling” website called Vosnap. The site allows you to send out a quick poll to friends via email or text messaging. For example, if a bunch of friends want to meet up for lunch, but all work in different places, they can send out a poll and meet at the restaurant that receives the most votes. Sounds pretty cool to me!
Sure, Andrew Hyde is technically the “CEO,” but he doesn’t have to approve everything, and the majority can vote him out at any time. This is strangely similar to Wikipedia’s structure of open source use based on a community of trust, rather than checks and balances. Can you imagine a typical company trying to agree on a product, design a website, create marketing campaigns, and draft contracts and legal arrangements in three days? It would take me three weeks to jump through the bureaucratic hoops just to pitch an idea to the person in charge. On a weekend; forget about it.
When you put a group of talented, motivated young people together for three days without bosses, titles or egos, things seem to magically run very smoothly. Watching Facebook evolve and hearing stories like Devin’s excite me. They are proof that young people are not only motivated and capable of working together, but they show that we don’t have to adapt to the status quo of the corporate world to succeed. Hopefully big business starts taking a few lessons from these progressive young leaders.
Ryan Healy’s blog is Employee Evolution.
Can you provide more detail on Facebook’s revenue model and compensation to contributors?
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You can find out more by following the link at the end of the post that goes to TechCrunch
http://www.techcrunch.com/2007/05/24/facebook-launches-facebook-platform-they-are-the-anti-myspace/
Excellent post, Ryan. It is really exciting what people can do when all the barriers to entry are taken down. The thing about this whole conversation that amazes me is that we hear so many people saying “no” to the vision of young workers or “your way won’t work and here’s why” or “that’s a pie-in-the-sky dream, so have fun thinking it will work while you’re young!” But what they don’t realize is, we are out there living “yes” with or without their approval by making things happen anyway. And we are making money. Learning and teaching. Spreading ideas. Changing the world, even if it is just by making it easier to decide where to go to lunch. That’s a start.
Is this a business or just a bunch of guys working on a project? Last time I checked a business has a product or service that made a profit. Reading this story reminded me of what garage bands must have been like during the day.
Starting a business can be easy. Having a profitable ongoing business will take longer than 3 days.
Anyway, great viral marketing
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Great point, this probably is what garage bands were like during the day. Some make it out of the garage and many don’t, but at least these guys are giving it a shot.
-Ryan
This is a great overview of how Gen Y works- intense purpose during an intense time. Our impatience to accomplish our goals clearly gets the job done.
To me the most amazing aspect of this weekend accomplishment is that you did it with 70 people involved. Getting that many people to formulate an agreement, make a plan, work together and move forward on “anything” is the real success here. But just how much effort did each of the 70 individuals contribute? Could this have been an 80/20 accomplishment with 14 people doing most everything while 66 stayed out of the way.
Is this Gen Y independent inventive energy really new or just something old being discoverd by a new generation? The new aspect for the Gen Y group is the discovery that they can work and perform well without always needing a corporate apron string for security. Like the internet, corporations have always existed for Gen Y so it is sometimes hard for them to separate work and accomplishment from a corporate entity. The reality is individual and small group initiative existed long before today’s corporate structure and Gen Y.
Vosnap started in a bike shop which is ironically the same place The Wright Brothers perfected the airplane and both were accomplished without a corporate engineering department.
Hey, Ryan. Am I reading you wrong? I know you live at home and your parents pay you an allowance but, really, you’re over 21 so, like, maybe you’re an adult now, too? I know it’s hard to realize, I’ve been there myself (I’m very immature) but in the end it’s going to be better if you bite the bullet and admit that you’re technically no longer a kid.
Secondly, not every technical opportunity presented to Gen Y is a Gen Y creation. Technology progresses on its own. People take advantage of it and it comes to define their culture but it is not a product of their age-culture. Somebody invented television and it became a defining element of 1950s culture but it wasn’t necessarily a creation of the TV Generation.
Finally, I’ve written a contract in a few days with a few friends and happily we stuck to it when we had major disagreements. But I wouldn’t trust a contract between 70 strangers to survive a major strategic divide. If 3 are the real players and the others are hangers on it’s another story.
But let’s say your partners think that your decisions are going to sink the firm. Are they going to smile and remain a loyal opposition or are they going to try to break the contract?
I agree with Recruiting Animal on the point that Gen Y is benefiting from the technology rather than creating the trend, but I’m not sure you were trying to say otherwise, Ryan.
Either way, once the technology to allow for effective remote monitoring of an employee’s responsibilities and simple video conferencing is available to the average Joe, the cost-benefits will be what moves the American workplace toward decentralization.
Of course, Gen Y is comfortable doing business without having met someone face to face, so that final obstacle might be overcome thanks to that aspect of Gen Y’s upbringing.
The question is, what do we do with all the empty office buildings ; )
-Chuck
Gen-Y “invented” decentralized, open-source working? Better inform the Linux people that they must have been doing something else…
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Gen-Y did not invent the technology, but we are inventing new ways to capitalize on it, and hopefully bring it to the workplace.
-Ryan
“Is this Gen Y independent inventive energy really new or just something old being discoverd by a new generation?”
Something old, but still exciting.
Examples–HP, Apple, Microsoft–just off the top of my head. I wonder, too, about IBM and Henry Ford. The Wright Brothers…
lol if only life were so simple.
but you can’t build a car or a house or a mobile phone or a laptop without someone to manufacture the parts and someone to assemble the parts.
But yeah in the world of ideas and marketing, the internet & PR – you can do all sorts of things.
But one cannot forget the product or commodity for sale.
Amazing how many people go into a small business thinking they want to be their own boss, and then find they are their own slave, the 1001 things one must do to make the business get ahead. And then of course they look for someone to do the ‘actual’ work – whether stacking the shelves in the grocery shop, serving the coffe in the coffee shop, or working the till in the book shop
For any business the first thing you need is seventy clients, and the pyramid scale means that if seventy colleagues each bring in seventy clients, thats 4900 to be starting with.
And if they each bring seventy clients …
but other than the CEO and matbe a handfull of the seventy that stay the course, the idea is not a money maker for all – on the contrrary it requires all to be clients.
After all seventy divorce lawyers looking to make money and getting their heads together, will start looking for clients who are going thru a divorce – and will even encourage divorce among the ‘staff’
Seventy estate agents looking to make money, will be looking for people buying & selling homes, and encourage employees to move home (and move often)
Isn’t life fun, it’s sort of like a grown ups game of musical chairs.
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All of this may be true if you are looking at starting a business through the lense of an existing corporation. However, I don’t know of any companies started by 70 people. Who is to say they each need 70 clients? Who says they all care to make this their sole source of income? If 50 people each own 1% after a weekend of work, they can go ahead and pursue other businesses or start a “real job” and continue collecting. If the business fails, oh well; it was 3 days of fun.
Ryan
I would hardly call Facebook, Craigslist, or Wikipedia decentralized web sites. These sites are similar to a central community brought together by the creators. Think anthill or beehive. Each worker contributes a bit to make the whole.
Also, I would recommend reading the book “Good to Great” by Jim Collins. The book details what historically have allowed just ordinary companies become truly great. One of the key points Collins makes is that Great companies often times have a single idea that is the central focus. Thus, centralized leadership is needed to ensure that focus. If everyone in the company could change the business plan every year, what would the company stand for and how would consumers be able to identify with it?
Good to Great is a good book for corporate managers or VP’s. A central focus is key, but the means of growing a company can be different today. Read The Starfish and the Spider for a great book about “the unstoppable power of leaderless organizations.” Also, check out Ricardo Semlars The 7-Day Weekend to see some proof that decentralization can work in a large company.
-Ryan
This is complete rubbish. Wikipedia *does* have controls and people with authority. Yes, you can create any nonsense page you want, but it’ll be deleted in short order.
Decentralized work has been around since ‘Gen Y’ were small children. As a semi-famous text on the matter, have a read of “The Cathedral and the Bazaar”, which discusses developing models of software creation and maintenance.
Nothing you mention in your article is anything terribly special that wasn’t happening at *least* a decade ago.
Ryan,
Great post! Right on target. To the pundits: No, Generation Y did not create or pioneer decentralization, but that’s not the point here. The point is that Generation Y is catalyzing it’s development and dissemination.
To Jennifer’s point, Linus’s Law is what will delete the page, not a centralized authority.
Jonathon – “Good to Great” is a wonderful book, and I understand that there is need for some structure in order to execute effectively and to ensure accountability during an implementation effort (think PMO as opposed to hierarchy). However, I don’t think we’re talking in absolutes here. At least my interpretation of what we’re talking about is that organizations will shift (on a continuum) towards decentralization; not make an all-or-nothing decision to restructure.
Also, there is subtle but very significant distinction between management and leadership. To focus an organization around a single mission, vision, creed or idea takes leadership, not a centralized structure and management hierarchy. In order to be effective at leading a group of people, any leadership team must be highly communicative and aligned to the same objectives, goals and messages that are being carried throughout the organization. But we see Greatness in both centralized organizations (GE) as well as those that made the jump towards decentralization (Google).
Technology is clearly a driving force in Gen Y’s ability to advance decentralization in modern organizations, but there’s something even more significant than technology that is advancing this trend. It is the most important product of the Internet and the greatest asset of the Next Generation. It is the reason that businesses must decentralize, or risk complete failure. It is shifting the balance of power in the workplace. It is: Knowledge.
Traditionally, institutions have been the gatekeepers of knowledge, and have leveraged that position in a powerful way. Think about the way institutions typically relate to employees: the lower you are on the totem pole, the less information they feel you need to know (and you, my friend, are on a need to know basis). Consequently, lower-level employees have significantly less influence on the development and direction of the organization. Traditional institutions hold back knowledge in order to retain their power. Not such a good idea, nowadays –
Enter Wikipedia: "proprietary knowledge" becomes the brunt of discussion board jokes. In today's world, there exists an inverse correlation between age and one's efficiency of acquiring knowledge. The implications of this are huge. Now, the master of the Internet is the keeper of the knowledge. For companies to keep their competitive edge, they will need to solicit knowledge from the lowest rungs of their employees. This gives entry-level employees an unprecedented amount of power, and is the reason that the United States will witness an inevitable trend to decentralized organizations.
Did you mean to write “According to adults the world works in a centralized, hierarchical structure and that's the way it will always be?” Unless you add the word “some” in front of the word “adults” your statement is patently false. Many adults have [for generations] thought differently. And they have put their beliefs into practice and others have written about the positive results.
BTW I just read a post that said today’s college students are more narcissistic and self-centered than their predecessors, according to a comprehensive study by psychologists.
– The psychologists examined the responses of 16,475 college students nationwide who completed an evaluation called the Narcissistic Personality Inventory between 1982 and 2006.
The standardized inventory, known as the NPI, asks for responses to such statements as “If I ruled the world, it would be a better place,” “I think I am a special person” and “I can live my life any way I want to.”
The researchers describe their study as the largest ever of its type and say students’ NPI scores have risen steadily since the current test was introduced in 1982. By 2006, they said, two-thirds of the students had above-average scores, 30 percent more than in 1982.
Traits of excessive narcissism:
* He or she has a grandiose sense of self-importance (exaggerates accomplishments and demands to be considered superior without real evidence of achievement).
* He or she thinks of him- or herself as “special” or privileged, and that he or she can only be understood by other special or high-status people.
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Laurence,
You are right I was completely over generalizing by implying all “adults” believe this, and I apologize. Jean Twenge’s narcissism study has been covered to death, and frankly its completely misguided. She states that websites like MySpace and Facebook are causing Gen-Y to feel special. 5 months later, the whole world is on Facebook, not just young people. I guess we are all special now. Check out my buddy Ryan Paugh’s first post over on Employee Evolution about the study:
http://www.employeeevolution.com/archives/2007/03/09/the-most-self-centered-generation-ever/
Ryan
Ryan,
You are onto something, the world is changing.
Technology allows anyone, not just gen-Y, to bypass imploding bureaucracies and create something special that may work well for long tail clients. This technological cohort (Netcohort as a term was removed from Wikipedia by the monitors) is unbound by distance, age, or national identity.
That group of 70 may have made a great product, or perhaps this effort only served to enhance the reputation of the active 20%. That smaller group can now work together on other ideas; each time their growing relationships and enhanced reputations will increase cohesion within the team’s projects.
By the way, the hive always considers individualism narcissistic. “I can live my life any way I want to,” is freedom. “I have to live as others demand” is slavery.
Regarding the second paragraph: Napster and Kazaa were not websites but applications. And neither were they “open source” in any real sense of the word.
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Thanks for the corrections, I should have double checked my terminology.
-Ryan
“The company was successfully started but no product had launched to the public.”
What measurement of a company would class it as successful if it had no product (or service) available?
Hi Ryan – Quite
If it’s for fun it can be great fun
If it’s for ‘business’ – it takes on form
You can only have seventy people building a tower block or pyramid, if they each now what they are doing or meant to be doing – and they are all pulling in the same direction or heading the same way!
“When you put a group of talented, motivated young people together for three days without bosses, titles or egos, things seem to magically run very smoothly.” Isn’t that pretty much what they said at Woodstock?
In the 60s, the world was never going to be the same because of sex, drugs and rock ‘n roll. Today, apparently, it’s all different because of Facebook, Craig’s List and tech startups. Decide for yourself whether this is progress.
The fact is, every generation brings new attitudes and experiences that change society and the work place. And, yes, technology is accelerating the pace and visibility of change.
But it’s sort of sweet to hear to folks who are experiencing for the first time breathlessly tell the rest of us that nothing like this has ever happened before.
I think it was Solomon who said in Ecclesiastes that there’s nothing new under the sun. But, hey, he’s not on YouTube, so what does he know?
What is an open-source website? That sounds like something Al Gore would say. Do you mean user-powered? :)
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User powered is the word I was looking for, thanks. I never thought anyone would compare me to Al Gore on this blog! I guess there is a first for everything.
-Ryan
This post left me confused. While Facebook’s product may be undeniable proof that Gen-Y is bringing decentralized organizations mainstream, the company behind it is not: reporting goes up the ladder to a CEO through VP’s and C-levels.
Wikipedia, Craigslist, Facebook — the products may foster non-hierarchical communities, but the companies that drive them are CEO-led hierachies. Don’t most great ideas would eventually flail without clarity of leadership?
Thomas Malone wrote a book called The Future of Work that that is worth reading to understand some of the history of decentralized organizations. He writes about centralized and decentralized organizational structures and provides some great examples of the two, how they co-exist, their characteristics and applications for both. Decentralization has been around; what’s new is the technology to support decentralization and how popular this technology has become outside of corporations. Now corporations are scrambling to understand the cultural phenomena that is driving the technology adoption and they are investigating how to use these technologies and the cultural phenomena for business purposes.
Sweet blog. I never know what I am going to come across next. I think you should do more posting as you have some pretty intelligent stuff to say.
I’ll be watching you :)