Venturing on the frontier: requisite attention

Venturing on the frontiers requires distinctly holding attention on two discrete aspects of any venture:
- Productive, iterative, exploration of the complexity dynamic
- Core venture viability

Simple to say but in practice, venturers who aren't stuck in perpetual analysis and thought, are pulled toward focusing on linear, or hopefully exponential, growth of the most promising aspect at hand particularly after attracting professional investment capital. Stop thinking and just do it right?

Well, avoiding the trap of perpetual analysis does not have to mean stop thinking and exploring, it simply means actively cycling through observation, reflection, interpretation, and decision that moves the venture forward. It means not getting stuck.  There are many models for doing this with the key aspect being that the focus of the exploration tends toward the deeper purpose, that the cycles are measured in weeks and months as opposed to quarters and years, and that the results change the venture in some way.  Explicit attention on this process will ensure that the venture continues to innovate and work toward it's purpose including continually improving upon it's ability to achieve that purpose.  Another important consideration in this exploration is that the greater the chasm between the purpose and the daily activity of the organization (as is the case with ventures on the frontiers), the greater the flexibility the venture needs to be able accept and meaningfully enact the outputs of the process. This flexbilty is informative in understanding what is meant by 'core' venture viability.

Core venture viability at its essence is the ability for the venture to maintain its existence in service of its purpose.  Commonly, and importantly, a key aspect is financial viability. Early-stage ventures tend to be perpetually resource constrained making the flexibility required of the outputs of the exploration process described above, very difficult.  This is where 'core' viability comes in.  The core viability does not have to do with maintaining the venture as it is but rather maintaining the ventures ability to continue to serve its purpose which often does not require doing everything that is currently being done. It could be a subset of what is being done, it could be something entirely new. Usually it boils down to concentrated set of people and relationships and the synergistic activity/supports among operations. Taking this perspective can often illuminate the amount of activity that could be done with out.  It also will enter into decisions about growing operations and help to clarify what actual purposes of growth related activities are.  Another way to look at it might be refined bootstrapping. 

The tension created by these two attentions inherently have the potential to compel the venture toward being more efficient and focused with less risk of failure and higher probability of meaningful achievement of its purpose. And like everything else, easier said than done right? Yup.

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Venture investing shake-up? Really?

An interesting article about a new way of doing deals http://mobile2.wsj.com/beta2/htmlsite/html_article.php?id=1&CALL_URL=http://online.wsj.com/article/SB119889558568757053.html (thanks to Fred @ USV http://avc.blogs.com for the pointer).

What this article really seems to be dancing around is value of relationships in finding and doing deals and in venture success. What also comes is the conventional approach of being hands-off if you are going in early and also the power of being lean/lightweight in early-stage venturing. I'm in the midst of doing a series of posts from my lastest conversations on the frontiers of venturing and this fits... and it's also a good reminder of how little really is changing on the frontiers.

We'll see if what I'm working on will change that any. I sure hope so... we're leaving a lot on the table when it comes to venturing and venturing for good. We really must be able to get better at this as venturing is simply the process of organizing people and actions to get something done. Is that really so mysterious? :-)

The dynamics of the frontier: complex ambiguity

The frontiers of venturing are the places where conventional venturing and planning approaches become least effective. It is the effective limit of conventional approaches to venturing that define the edge of the frontier with the deepest depths of the frontier being the pre-concept stage of a systemically focused venture.

Conventional approaches loose effectiveness the earlier a venture is in the development phase because of increasing ambiguity.  The less that is known the harder it is to do linear modeling and planning.  Choices made continually reduce ambiguity as the venture moves along the development and into the realm where conventional planning approaches can be effectively used.

On the depth axis, the more systemic the purpose, the greater the complexity. As the system changes, so will the problems and opportunities being addressed as will the community addressing those challenges and opportunities. The interrelatedness of planning decisions and planning context can be an all consuming black-hole. The more you are trying to shake things up, the less you know how things are going to shake out.

While all ventures face a degree of ambiguity, the depth of your foray into the frontiers depends on the depth of complex ambiguity being taken on - a function of complexity and abmiguity.  Conventionally, managing this is accomplished either through blind faith in the entrepreneur and management team or by reducing the complex ambiguity by advancing the planning horizon and responding to situational opportunities and problems. Taking the latter approach often serves to reduce near-term operational risk but also severely limits or eliminates the potential for achieving systemic level impacts, while the former approach is limited by the abilities of the entrepreneur/management team in the unique situation of this specific venture. Neither option suggest even modest probabilities of success particularly at the depths of the frontier... which describes the venturing and venture investing community as it currently operates.

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Venturing on the frontiers - Inquiry #1wrap-up

A little over a year-ago I began considering what's next in my journey and exactly 3 months ago I initiated my first inquiry into what's needed on the frontiers of venturing and venture investing. It hasn't been a linear journey of course, with a good deal of my attention going towards getting Causeway going over the last year.

While that was ongoing, I had about a dozen conversations over November and December with some extraordinary social venture investors and funds in North America (including Renewal Partners, Social Capital Partners, Kellogg Foundation, RSF Social Finance, Good Capital and others). To all of you I am tremendously grateful for the generosity of your time, the candor with which you shared your experiences and the enthusiasm with which you've approached this exploration. Each conversation integrated into my own experiences and readings, and into every other conversation. What has emerged for me is a point of summary from which I feel ready to attempt some active experiments into how do we get better on the frontiers as venturers and venture investors.

What follows now is a series of posts on:

• The dynamics of the frontier: complex ambiguity
• Venturing on the frontier: requisite attention
  
• Gettin' it done without goin' under: cohesion and incipient instability
  
• Giddy-up: getting better on the frontier

Onward...

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Social blogging

Fred Wilson at USV had a post exploring the differences in twitter and tumblr from other things like blogs and social networks.

I am sure there are a lot of people reading this who think "how is this different than blogging?" I'd like to suggest that everyone try this

I blogged earlier about a simple way to give twitter a try (here and here) and think that both of these need to be experienced to get a sense of what they are like. There's something about the ambient nature of twitter (think the value of fb status updates amped up). It's of course much more than that and I'm finding tumblr encourages me to explore and share creatively. So much of it has to do with the sharing of pictures, videos, music, and quotes that I'm finding it interesting to watch what it is that interests me in what I'm posting or reblogging. I think it keeps me on the frontier - exploring things that I can't quite articulate yet and certainly finding things that have prompted a breakthrough in my thinking in ways never intended.

Give it a try - both twitter and tumblr and add me if you do (igniter on twitter and igniter.tumblr.com on tumblr).

Measuring incipient instability

I've been thinking about what it is that really needs to be tracked in early-stage and transformative ventures. There certainly is the simple dynamic of financial viability and then there is the concept of productive, iterative exploration in the area of complex ambiguity I raised in an earlier post. I've been digging into what the measures are that actually help indicate the emergence of potential instability - before it's actually happened. That's the trick because learning that ap has exceeded cash + ar at the next board meeting isn't very helpful. And that's not such a rare scenario - e.g. customer holding 80% or your ar is suddenly unable to pay.

So what is it then that could be tracked. In my experience these things are often foreshadowed by either a lapse/misplaced/confusion of responsibility and/or changing dynamic in relationships. Seems to me that consciously tracking the trend in the key relationships (e.g. Strengthening, stable, destabilizing) and mapping the responsibilities for the key drivers/activities of the org may be the most enlightening things to monitor in terms of indicating potential instability. It shouldn't really be a surprise because relationships are the essence of cohesion in any venture particularly in those early stages of development.