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I'm going to toss this out there because I want this tool to exists. Customer Discovery is an art and a science. Each step:

is important enough that, if you've never done it before, help may be called for. Many entrepreneurs are so enthusiastic about their idea that they make two basic sampling errors: they chose customers who share their views and they sell instead of interview. Enter Laddering Works and specifically Eric's new book Laddering: The Book. What Eric does is teach you how to choose the right archetypes and how to interview them so that you learn their deeper motivations. If Henry Ford would have had Eric's book he could have asked his customers what they wanted and understood that “a faster horse” meant cleaner, faster, and more reliable transportation that could mean any number of things.

So what I want is a service that finds users for all of Eric's archetypes, helps me run an interview, and provides the video conference infrastructure to do the interviews. Pay the interviewees a fee and provide an interview coach that can help entrepeneurs ask and not sell. This way all of the best practices are applied and the cost of finding the right customers to interview is much lower.

I can haz?

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Several weeks ago I wrote The National Space Society: organizational inertia and term limits where I expressed some thoughts about how the NSS is organized and whether it could be done better. Long time NSS leader and volunteer Ronnie Lajoie responded with a detailed discussion about why the NSS was run this way and how it worked. Instead of responding to the original post I wanted to break this out into a top level post to discuss organizational behavior in non-profits. Ronnie's original response is in-line and blockquoted.

Despite what appears to be a mess, try to plot the entire organizational structure of Boeing or Microsoft on a single chart. This chart shows multiple levels and can/will eventually be made into several more pretty charts. But the bottom line is any large organization needs some kind of structure, and NSS is involved in a lot of different activities. It was the lack of such official structure in the NSS bylaws that led to the creation of the NSS Corporate Policies document (CPD) in late 2004.

While I definitely agree that structure is needed, the goal should be to make that structure as simple as possible. Following the lead of Google, Apple, and yes, even SpaceX, many large companies are trying to simplify and flatten their management structures. From that article there's this from KPGM CIO Chris Robinson:

“KPMG experiences nearly 20 percent turnover in its global workforce every year. “A lot of people choose to leave any organization because of silos and hierarchy,” Robinson said. “Our challenge is how do we change the hierarchy so it isn’t one of the top three reasons people leave?” Being from the financial industry, a heavily regulated industry where risk departments often say ‘no,’ “You have young people coming in and saying I don’t really conform to that sort of style of organization,” Robinson said.”

One key difference between these companies and the NSS is that the NSS works with volunteers that have varying levels of experience, time and self direction. The key to flat structures is transparency and accountability. That is difficult when the team members are volunteers. Volunteers don't like feeling like unpaid employees. But even so, flatter and simpler is better. It is more transparent, accountable, and responsive.

For nearly two decades (1987-2004), NSS struggled with four unnamed Vice-Presidents (per the bylaws) whose roles and responsibilities varied with each NSS election. Ditto the committees, which had near zero authority. Since every Officer was either a voting or non-voting member of the Board of Directors, every little disagreement went to the Executive Committee or, worse, to the Board of Directors. Do NSS critics really want us to return to those chaotic times???

I don't think anyone is suggesting that, myself least of all. I can see where what exists now is an improvement. What I think some are suggesting is that the current organization is in response to past issues rather than future needs. Instead of asking how to fix what happened then, could we ask a different question: “If the NSS were created today from whole cloth to accomplish its mission, what would it look like?”

The sunk cost fallacy is just as applicable to organizational structure as it is to financial decisions.

Since the CPD, the NSS has made great strides in getting “its act together” (in the words of Mr. Cowing). We have a Strategic Plan (also published in /docs) and have been making progress towards achieving its goals. That too was also a product of governance activities that began in 2004. We invite you to review that and other corporate documents and send us your feedback – or better yet, become involved! NSS is a very democratic organization – with all that comes with democracy.

Having been involved with many open source projects over the years where the individual members are all volunteers (some dedicated and some very tenuous), I think there is a limit to democracy and I wonder whether that pendulum may have swung to far in one direction at the NSS. In “Homesteading the Noosphere” Eric S. Raymond coined the term “benevolent dictator”. Within certain areas of the NSS could there be a role for 'benevolent dictators'?

The dashed “coordination paths” were meant to show that an NSS leader does not need to go up and down the chain to talk to other leaders – so I have to disagree with Mike on that point. In fact, it seemed to me that Paul LIKED the NSS chain-of-command and was happy to let his “boss” (the SOO) control the flow of information to and from him. But in this time of email, instant messaging, tweets, and texting; it remains far to easy for any NSS leader to immediately contact any other (Paul did so as well). In reality, these “coordination paths” are still all over the map, so the real intent of the CPD was to clarify the chain-of-command for decision-making.

Yes, in a world where communication is easy the default is to assume coordination paths between all leaders. Especially if the default is that those communications are available to all other members unless it involved something that needed to be confidential. A flatter organization also negates the need to clarify the chain of command.

Since the creation of the CPD, there has been much less arguing AFTER a decision is made by the appropriate authority. The current crisis in the NSS leadership can “easily” be resolved by a vote of the NSS Board of Directors, because the current argument is between the two highest Officers of the Society over the scope of authority of the NSS Policy Committee. The NSS bylaws apparently is not clear enough, which means the Board of Directors needs to revise the bylaws and/or add a clause in the CPD to make it clear who is responsible for what. So yes, NSS actually needs a bit MORE bureaucracy (of the right kind) than less.

I encourage you all to read the NSS bylaws and the CPD, because there seems to be a misunderstanding of the role of the Executive Director in this particular Society. Unlike other organizations to which you may be comparing NSS, the NSS Executive Director is not a dictator and is not in charge of everything that happens in the Society.

I have looked through the bylaws and CPD and my instinct it to toss it and start over. What I didn't find in the bylaws and CPD was why the two highest offices exist? My instinct in this case would not be to add a clause but delete one. Delete the Senior Operating Officer role, make the Executive Director report directly to the Executive Committee, and cut the number of people on the Executive Committee in half.

The bylaws (written a very long time ago) makes it clear (and Paul knew this) that the “Executive Director shall: (a) Manage and direct all activities of the Society as prescribed by the Board of Directors and the Executive Committee; (b) [hire staff]; © [supervise staff]; (d) Serve, if he or she so desires, as an ex-officio member, without the right to vote or the right to be counted as part of a quorum, on the Executive Committee and any or all other Boards, Committees and other bodies of the Society; and (e) Perform such other duties as may be assigned by the Board of Directors or Executive Committee.” So (again, correcting Mike) Paul (like all past EDs) was a very active participant on the Board of Directors and Executive Committee, and any other committee of interest.

There's a big difference between participating and having the authority and responsibility to act. In the current structure how much autonomy does the Executive Directory have and what would be the drawbacks of combining the Senior Operating Officer and Executive Director into one position?

Since the creation of the NSS in 1987, the Executive Director has always been the recipient of directives from the Board of Directors, Executive Committee, and its Chair (CEC).

Ouch! Three bosses?

The CPD is an Executive Committee document of official directives. While inserting the SOO as well, the CPD provides a structure to formally clarify roles and responsibilities of the various Vice-Presidents and their operatings committees, and their working relationships with the Executive Director and HQ staff, Chapters, and individual volunteers. Paul very much understood this.

I can see someone understanding it. I'm questioning whether its the most effective way of doing things.

Truth is, NSS is short-staffed, short on volunteers, short on money, and unfortunately increasingly short on members. Yes, NSS is hurting and needs YOUR help.

Yep, and that's what I'm trying to do. If it were beyond hope I wouldn't be setting up a state level chapter. What I am trying to do is bring industry best practices to bear. I've experienced much larger organizations accomplish truely amazing things with a very flat organization (IETF) while others with very complicated ones (ITU/OSI) accomplish very little. I think its time the CPD, L5, NSI, and all that has come before be tossed and start over with something a bit more like this:

The thickness of the line represents how much of the day to day coordination and communication is done. If anyone above the Executive Director is involved then we're doing it wrong. No vice presidents, board of advisors, senior operating offices, etc. In this model committees are as autonomous as possible but report to the Executive Director in order to implement things sent down from the Board. Take the two Internet committees for example, in this model there would be one but internally it could be organized according to whatever rules it needed. Committees chose their leadership but are subject to override by the Executive Committee. Conflicts are handled by a Board subcommittee.

The President is elected and concerned with up and out while the Exective Directory is a paid position that is all about down and in. The Board's job is contemplating the future and basic governance. The Board should be very bored.

I hope this is taken as a constructive suggestion. What I'm worried about is how what we currently have could be replaced with something more lightweight. If current constituencies and power centers are involved in developing something new then the same structure will simply be re-created. There needs to be a dictator somewhere. In the worst case that dictator can be an empty bank account.

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Over the past year many new beyond LEO space companies have been created: Planetary Resources, Deep Space Industries, Inspiration Mars, and Golden Spike. Between just these four new companies the capital requirements are some of the highest in the industry. I estimate roughly a billion per company. In other mature industries a billion dollars in capital for a well understood return is common.

But ours is not a mature industry. The time needed to mature it enough to support those kinds of capital requirements is long. Every company on that list has a plan for incremental revenue and dual use technology development. But until someone somewhere demonstrates profitability on the scale of the return from the Bakken formation oil fields I'm not sure there is enough capital available. Our industry needs an economy firing on all cylinders to create that capital and I don't see an economy like that anytime soon.

Or maybe its just the cold, gray winter sky outside and I just need to see the blinding bright blue of the high desert to put the optimism back in my heart.

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Earlier today Elon Musk had this to say on Twitter:

Pods 1 and 4 now online and thrusters engaged. Dragon transitioned from free drift to active control. Yes!!

— Elon Musk (@elonmusk) March 1, 2013

Thruster pods one through four are now operating nominally. Preparing to raise orbit. All systems green.

— Elon Musk (@elonmusk) March 1, 2013

This was after a very hard day that started off very well. The Falcon 9 put Dragon into its intended orbit perfectly but almost immediately three of the four thrust pods failed to initialize:

Issue with Dragon thruster pods. System inhibiting three of four from initializing. About to command inhibit override.

— Elon Musk (@elonmusk) March 1, 2013

What followed was an intense several hours. If the pods didn't initialize then not only would Dragon not be able to reach the station it wouldn't be able to circularize its orbit and would re-enter within a couple of days. Hopefully it could have enough control authority to re-enter normally. But Elon's statements about Dragon being in free drift suggests it wouldn't, losing not only the vehicle but its cargo.

But the SpaceX team pulled it out (apparently with the help of the Air Force's comms system). And that's some sci-fi shit right there.

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I work out of a co-working space so I see a lot of startups and entrepreneurs in various stages of formation. One of the more concerning things I've seen lately is how statements coming out of Silicon Valley and Y-Combinator are suggesting companies can get multi-million dollar pre-money valuations with no revenue and no customer validation. I would like to think that in Atlanta we have a bit more financial sanity.

There are two general methods used to value a company. Which one you use depends on whether or not the company has revenue and earnings. If the company is pre-revenue then something like the Venture Capital Method is used. The general idea is to figure out the terminal value at harvest time (i.e. how much the company is worth when you want you liquidity event) and then discount that back to the present. The key is understanding how you get to that terminal value. I personally prefer Perpetuity Growth Model since that includes both a discount rate and a growth rate. Others use a comparable company metrics to proxy for those but, IMHO, that hides to much information and includes assumptions about future markets that may not hold.

The other method is to look at liquidity events for similar companies and simply figure out a multiple of EBITDA. I.e. if I'm building a consulting company I can generally assume a multiple of 2x or maybe 3x if I have something strategic. So if my EBITDA is $2 million/year I can value the company at $4 to $6 million. That's a large range and it becomes a negotiation about where along that range you should be. Knowing WHY those comparable companies got those values means you go into that negotiation as an equal.

I would really like to help entrepreneurs to better understand this. ATDC has a series of workshops that includes a workshop on Financial Literacy for Startups. I will find out when the next one is scheduled for and update this article.

Are there other tutorials out there that can help an entrepreneur understand the hows and whys of valuations and finances?

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WUSA Channel 9 in Washington, DC has discovered a tribe of Americans living a life of breathlessly whispered horror: they all own guns! In Kennesaw, Georgia's 1982 Gun Mandate Still On The Books, Every Home Owns A Gun a reporter from DC acts as though she has discovered some tribe lost in the jungles of the Amazon. The story includes an informal survey of home owners that discovers unanimous support for the law. The funny thing about the survey is the reporters ability to talk to only residents of trailer parks. In a city covered in million dollar homes its actually kind of difficult to find the two trailer parks we do have. It takes intentional work.

For those that aren't aware, I live in Kennesaw and I own firearms. The law is on the books but it has no enforcement mechanism. I.e. there's no “or else” part of the law. So even if the police wanted to enforce it, there's no punishment allocated. Yes we generally all do own some kind of firearm. But that also applies for almost all of suburban Atlanta. I think our crime rate is low because of the notoriety of the law. We make a point of being proud of the law and the metro area knows it.

I propose someone from WXIA head up to DC and interview the homeless on Minnesota Avenue in Southeast Washington and ask them about real estate prices in Kent. Maybe the next unenforceable law Kennesaw should pass is banning unethical faux-journalists with a pre-determined narrative.

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This morning I ran across this piece from Pacific Standard Magazine:

We Aren’t the World Joe Henrich and his colleagues are shaking the foundations of psychology and economics—and hoping to change the way social scientists think about human behavior and culture.]

The gist of the article is that the authors of a new paper suggest that much of the anthropological research of the past fifty years may be fatally flawed. The basis for the conclusion is summed up here:

The potential implications of the unexpected results were quickly apparent to Henrich. He knew that a vast amount of scholarly literature in the social sciences—particularly in economics and psychology—relied on the ultimatum game and similar experiments. At the heart of most of that research was the implicit assumption that the results revealed evolved psychological traits common to all humans, never mind that the test subjects were nearly always from the industrialized West. Henrich realized that if the Machiguenga results stood up, and if similar differences could be measured across other populations, this assumption of universality would have to be challenged.

While these were the general findings it is the consequences that are important:

The growing body of cross-cultural research that the three researchers were compiling suggested that the mind’s capacity to mold itself to cultural and environmental settings was far greater than had been assumed. The most interesting thing about cultures may not be in the observable things they do—the rituals, eating preferences, codes of behavior, and the like—but in the way they mold our most fundamental conscious and unconscious thinking and perception.

but most importantly for the field of anthropology and psychology:

It is not just our Western habits and cultural preferences that are different from the rest of the world, it appears. The very way we think about ourselves and others—and even the way we perceive reality—makes us distinct from other humans on the planet, not to mention from the vast majority of our ancestors. Among Westerners, the data showed that Americans were often the most unusual, leading the researchers to conclude that “American participants are exceptional even within the unusual population of Westerners—outliers among outliers.” Given the data, they concluded that social scientists could not possibly have picked a worse population from which to draw broad generalizations. Researchers had been doing the equivalent of studying penguins while believing that they were learning insights applicable to all birds.

While IANACA (I Am Not A Cultural Anthropologist), one of the things I take from the paper and this article is that culture affects cognition enough that it affects economic decisions (i.e. butting up against behavioral economics) and therefore some cultures end up developing economic systems that are more prone to advancement than others. Take the Machiguenga for example, they “had traditionally been horticulturalists who lived in single-family, thatch-roofed houses in small hamlets composed of clusters of extended families. For sustenance, they relied on local game and produce from small-scale farming. They shared with their kin but rarely traded with outside groups.” In other words, their culture had not changed significantly since the invention of agriculture and language. Their culture and thus cognition were so perfectly adapted to their environment that they had no need to develop further. Their system is an evolutionary dead-end. In order for it to still exist today it must keep itself as isolated as possible.

My conclusion? Some cultures are capable of surviving in a technological world and some aren't. Not because of anything complicated but because they are just cognitively incompatible. For the same reason that Amazon tribes that don't count past the number three will never develop or understand calculus. As a species we have two choices: we can shrink our numbers back to neolithic levels and live unchanging lives like the Machiguenga or we can grow and evolve. As we've seen in the past few hundred years, the cognitive, cultural and economic systems behind technological progress and yes, Western concepts of capitalism, are what allowed us to support billions of people in lifestyles that are the exception. Unlike much of the nasty, brutish, and short lives most of humanity has lead, the past few hundred years have been a marvelous time in human history. Most of the people alive today are outliers given human history.

So, unlike the author of the Pacific Standard article who wrote

“Still, I had to wonder whether describing the Western mind, and the American mind in particular, as weird suggested that our cognition is not just different but somehow malformed or twisted. In their paper the trio pointed out cross-cultural studies that suggest that the “weird” Western mind is the most self-aggrandizing and egotistical on the planet: we are more likely to promote ourselves as individuals versus advancing as a group.”

I am proud that we are a country of outliers. Given human history we certainly need to optimize for the outliers, not the 'norm'. We may not be “the world” but we are certainly a template worthy of emulating. If that's “weird” then count me in. I'm going to try and be as weird as possible.

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This coming Wednesday, February 27th at 1 pm Dennis Tito will announce Inspiration Mars. A lot of the information has already been released. Rand Simberg even discusses the feasibility of the mission.

All of this is probably predicated on SpaceX flying the Falcon Heavy which is currently scheduled for its first flight at the end of this year or early next. If the Heavy flies and Tito gets even close to launching it will probably cause the SLS to be immediately canceled. Given the time-lines involved that would mean SLS doesn't survive to see the summer of 2015. The open question is whether that includes Orion and how the SLS budget gets re-allocated.

If Tito's mission launches and makes it to Mars then many will begin to question NASA's entire budget. NASA and Congress will need to get out in front of that story to justify NASA's budget. Senator Shelby's response will truly be a magnificent thing to watch.

What I fear is a mission failure. A free return trajectory is low risk but that's a very long trip and a lot can go wrong. I sincerely hope the result of a mission failure is Congress not falling back to the “see, only NASA can do this” mode.

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This past Saturday was the first meeting of the Georgia Space Society. We had about twelve people show up and many more who joined via the Meetup. This is just a beginning. The NSS currently has 78 active, dues paying members across the state. We have a base to build from. So what are we going to build?

1) We are going to use space as inspiration (push the rope) and as an industry (pull the rope) to turn Georgia's education system around.

2) We are going to build companies here. Whether its in Atlanta or Woodbine there will be jobs here in Georgia for AE grads from Georgia Tech, ME from Georgia Southern, or Welding and Joint Technology from Georgia Piedmont College.

3) There WILL be grits in space!

4) There will be enough going on in Georgia that the center of gravity will move from Huntsville to somewhere around Rome as more and more is done here. This assumes SLS will be canceled as it inevitably will after the Falcon Heavy flies.

5) The Georgia Space Society will help by providing political support, financial sponsorships, event infrastructure, and hundreds of motivated and inspired activists.

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I've been using stitcher.com while driving for my own personal version of NPR. On the drive back from south Georgia yesterday I listened to this one:

Development Drums: Episode 35: Migration and Development - In this episode Owen talks to fellow CGD Senior Fellow Michael Clemens about the relationship between migration and development.

Most of the podcast is spent dispelling the myths that immigrants cause unemployment. The easiest example is that if additional people entering a country caused unemployment then simple increases in population would do the same thing. In nearly all conceivable cases there is a 1:1 ratio of jobs created for each new immigrant. One of the more interesting points was research that showed that, worldwide, 59% of a persons income was determined by what country they lived in. In other words, no matter how educated, well-off, etc you were, all of that combined had less effect on your earning potential than the simple fact of which country you lived in.

The guest spends much of the interview beating his “stop all immigration at the origin country” strawman. It is a generally accepted economic principle that free movement of labor always helps and that when it occurs it is in response to bad policies in the origin country.

But the host is determined to get the guest out of the generalized economic discussion and into the effects of migration on individual workers in the destination country. Even then the economics says that the ONLY individuals affected by immigration are those that refuse to switch employment sectors.

One of the effects of a globalized economy is the mobility of labor. Since economies with diverse workforces grow the fastest and are the most durable, immigration is an extremely good way of keeping your economy running. But every worker needs to be taught from the first day of school that there is no permanent job and there is no permanent job sector. The best way to deal with instability due to migratory work forces is to learn early to deal with instability. Those that do will thrive. Those that don't will be the countries people leave.

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