The First Version of Your Start-Up Should Embarrass You

Why you want to build the simplest possible solution to a problem, and launch it.

Once you've identified a real problem and done your research, start trying to solve it in the simplest way possible. Your first version should certainly embarrass you. "Minimum viable product" has become a startup cliché for good reason. Just build the simplest possible solution to a problem, and launch it.

This probably won't take as long as you might think. Each round of Y Combinator was designed to be three months long because Paul [as in Paul Graham, founder of Viaweb and co-founder of Y Combinator] wanted it to be a summer program, so students could decide to take time off from school if their company was going well. This happened to also be a reasonable amount of time to go from idea to a live product. If it takes longer than a few months to start testing your idea, it's because you're either trying too hard to perfect it (you never will, so don't bother) or there's some other bigger problem.

The first version of reddit was absurdly simple. We didn't have voting, and we certainly didn't have commenting or the ability to create subreddits. It was simply a place where one could submit links and, based on clicks, see them rise and fall on the front page. A new user would simply see a front page of interesting links to click on.

Hipmunk was a flight-only search when we launched (no hotels, car rentals, etc.), and even that was strikingly bare-bones. Thanks to Adam's hustle with the online travel agencies, we not only provided flight data but also started to collect a commission on referrals right away. We were making money from day one, which always puts a smile on investors' faces.

And bear this in mind: the first version of Airbnb, the startup that has more rooms available for rent than the Hilton corporation, started from a single apartment in the SOMA neighborhood of San Francisco. The founders began the site by renting out air mattresses in their own home to conference attendees looking to save money.

Once you're up and running, spread the word and start watching how users interact with what you've built. Listen to how they're talking about it. This is key. There's something incredibly satisfying about seeing the logs of the first users who try out what you've built. It's one reason why I can't encourage enough students to start building projects just for the experience of having real people all over the world use something you've built. Compared to dull schoolwork, learning by creating something relevant and usable is incredibly rewarding.

Once you've got something to show, use the growing number of available tools that allow people to share that great idea. We launched reddit in 2005, before "social media" was a phrase. Just five years later, launching hipmunk was drastically easier, because by then there were more tools than ever for people to spread the word about things they care about.

Word of mouth has always been the most powerful form of advertising-;and it spreads faster and farther than ever before. Make something people want, and people will find out about it. If you're not getting traction, it simply means you haven't solved that core problem of making something people want. But that's okay! Figure out what people are using. Talk to your users--those first hundred or so people who are willing to take a chance on a product they've never heard of are golden. Treat them well and get to the root of whatever problem it is that you're not currently solving for them.

Alexis Ohanian

The One Thing VCs Could Do Immediately to Increase Returns

If the person who can cure diabetes came to you for money, if you were a VC you’d likely turn that person away. And, an inventor who could reduce global dependency on oil by designing better batteries? That VC might not even take the meeting. By venture capitalists’ individual actions, they are limiting growth and innovation. By their collective choices, they are risking our very lives.

Now that might sound a little extreme. But bear with me.

Ted Schlein, general partner at Kleiner Perkins, was recently invited to discuss race and investment in technology. The conversation took place at an inaugural conference called Platform, created by Hank Williams after a provocative series that Soledad O’Brien did on CNN on black entrepreneurship. At Platform, luminaries like Quincy Jones and Governor Deval Patrick, as well as entrepreneurs like urban revitalizer Majora Carter, and Juliana Rotich of Ushahidi came together to discuss what specific changes could be made to have all aboard the innovation economy.

And so all ears were tuned in when well-known VC Ted Schlein of Kleiner Perkins started talking… but Ted denied there was a problem. Despite the story the numbers tell — women receive less than three percent of all venture capital funding, and blacks even less than that — Ted said that the venture capital community was “color-blind” and “operates fully on a meritocracy.” This continued argument disregards the astounding facts that essentially 100 percent of funded founders are white or Asian, and 89 percent of founding teams are all-male.

Since then, we’ve had the case of Paul Graham, who recently got into a brouhaha because he claimed a correlation “between founders having very strong foreign accents and their companies doing badly.” He continued to dig into his argument, believing people were simply misunderstanding him, but he doesn’t acknowledge the facts: immigrants with accents do found successful startups, but often without VC support. Kauffman Foundation research shows that more than half of Silicon Valley start-ups are founded by foreign-born entrepreneurs. Imagine if those with accents could get your support — what tougher problems could they solve?

And who can forget that only two years ago, Vinod Khosla said that only the young can innovate. “People under 35 are the people who make change happen,” said Khosla, who explained his belief that old entrepreneurs can’t innovate because they keep “falling back on old habits,” because “people over 45 basically die in terms of new ideas.”

So, basically, if you followed this limited logic… you’d hear that if you’re a woman, black, foreign, or old, you need not apply; you will not be seen. No matter how good your idea could be. No matter how many lives it could save, or new solutions you create, or how much revenue it could generate.

Listening to Ted Schlein, Paul Graham, Vinod Khosla, and countless other conversations among VCs reminds me of playing peek-a-boo with a baby. Amazed that the person is there, even though they can’t be seen, this mystery creates joy. In the vast majority of VCs case, they believe that the person isn’t there, because they can’t see them. And there’s no joy in that.

Venture capitalists are often “pattern matching”, thus actively looking for someone who looks like the successful founders of Google, FaceBook, Amazon, or Apple. In other words, you are actively looking for people who look like Larry Page, Mark Zuckerberg, Jeff Bezos, or Steve Jobs — white men. Forget differentiation. Forget newness. VCs primarily invest in sameness.

By not seeing (and funding) new-ness you are actually blind, not color-blind.

Now what each of you says when this topic of “blindness” comes up is this: “I am not a racist / sexist / whatever it is you are accusing me of.” And, let me assure you that you’re (likely) not. What you probably are is biased, which is to say your lens is altered by cultural norms and so see what you expect to see. If you’ve largely been surrounded by, say, women who don’t work outside the home, your lens when it comes to women may be warped. But, as I’ve already written in a prior HBR post, bias is fixable — though it takes work.

Others of you say that it’s okay to pass up any particular group since you’re not interested in what you believe is a limited category. The most common one I hear is “I’m not interested in investing in fashion which is why it’s fine with me that I don’t see a lot of women’s pitches.” What doesn’t seem to occur to you is that women are also interested in bio-tech (like Nina Tandon), policy (like Marci Harris), and electronics (like Ayah Bdeir). Even the consumer goods industry is affected. Kara Goldin of Hint is taking on goliaths in the consumer beverages space by redefining what “is” and “is not” water. Each is an innovator, and many more like them exist. If you want to create higher returns, see these “new” types of innovators and watch them deliver home runs. But, first, you have to first actively filter them in, not out.

Finally, I hear you say is that this is about market capitalism and the only measure of success is whether you have made money. You, of all people, know that if you only focus on the profits of your existing enterprise, even though the rules of the game are changing, you leave yourself open to disruption. You now face the innovator’s dilemma — and if you fail to adopt new approaches, you will eventually fall behind, fail, and die. You know this, but mostly you dismiss the opportunity to reinvent.

But my bigger concern is that you will take us collectively down with you. You have — by far — the most access to funds to invest in new ideas. You are the structural gateway of innovation.

You recognize capitalism as an economic system, while dismissing these issues of inclusion as “social”. But I would argue that, in practice, your collective acts in venture capital are fundamentally a new type of structural power, the effect of which is economic in nature. When your collective actions limit human capital, when they deny opportunity based on race, gender and age, then that must be viewed and evaluated as an economic system. Today, practically speaking, it is not the laws that are structurally limiting our economy; rather, it’s money — specifically the flow of money to new ideas.

Ignoring inclusion is something you do at your own peril — and at ours. For we are all at risk when your system excludes. We — society, that is — need you to reinvent how you do what you do.

Now I’m not an innocent. While I’d like to believe in a just world where all creative and hardworking people will be seen, I know better. I know enough of Jeffrey Pfeffer’s work to know that the world has pervasive power differentials and that groups in power, like yourselves, will often respond to outside pressure by digging in your heels because you’d rather feel good about yourselves than risk change.

But what I also know is that it takes some relatively small set of influencers (data says only 10-20% are needed) with an unshakable belief to convince the rest to adopt the same belief. And, of course, some of you are already there, trying to get the rest to join you. Challenging the venture community may seem like an attack, but actually this is a call from the future. Step into the leadership we so need from you.

Nilofer Merchant

Nilofer Merchant is a corporate director at a NASDAQ-traded firm and a lecturer at Stanford, and formerly the founder and CEO of Rubicon. Among other Fortune 500 firms, she’s worked at Apple and Autodesk. She’s the author of The New How and 11 Rules for Creating Value in the Social Era. 

Educate Everyone About Second-Generation Gender Bias

More than 25 years ago the social psychologist Faye Crosby stumbled on a surprising phenomenon: Most women are unaware of having personally been victims of gender discrimination and deny it even when it is objectively true and they see that women in general experience it. 

Many women have worked hard to take gender out of the equation — to simply be recognized for their skills and talents. Moreover, the existence of gender bias in organizational policies and practices may suggest that they have no power to determine their own success. When asked what might be holding women back in their organizations, they say:

"It's nothing overt. I just feel less of a connection, either positive or negative, with the guys I work with. So sometimes I seem to have difficulty getting traction for my ideas."

"I look around and see that my male colleagues have P&L responsibility and most of us are in staff roles. I was advised to make the move to a staff role after the birth of my second child. It would be easier, I was told. But now I recognize that there is no path back to the line."

"My firm has the very best intentions when it comes to women. But it seems every time a leadership role opens up, women are not on the slate. The claim is made that they just can't find women with the right skill set and experience."

These statements belie the notion that gender bias is absent from these women's work lives. Second-generation bias does not require an intent to exclude; nor does it necessarily produce direct, immediate harm to any individual. Rather, it creates a context — akin to "something in the water" — in which women fail to thrive or reach their full potential. Feeling less connected to one's male colleagues, being advised to take a staff role to accommodate family, finding oneself excluded from consideration for key positions — all these situations reflect work structures and practices that put women at a disadvantage.

Without an understanding of second-generation bias, people are left with stereotypes to explain why women as a group have failed to achieve parity with men: If they can't reach the top, it is because they "don't ask," are "too nice," or simply "opt out." These messages tell women who have managed to succeed that they are exceptions and women who have experienced setbacks that it is their own fault for failing to be sufficiently aggressive or committed to the job.

We find that when women recognize the subtle and pervasive effects of second-generation bias, they feel empowered, not victimized, because they can take action to counter those effects. They can put themselves forward for leadership roles when they are qualified but have been overlooked. They can seek out sponsors and others to support and develop them in those roles. They can negotiate for work arrangements that fit both their lives and their organizations' performance requirements. Such understanding makes it easier for women to "lean in."

Second-generation bias is embedded in stereotypes and organizational practices that can be hard to detect, but when people are made aware of it, they see possibilities for change. In our work with leadership development programs, we focus on a "small wins" approach to change. In one manufacturing company, a task force learned that leaders tended to hire and promote people, mainly men, whose backgrounds and careers resembled their own. They had good reasons for this behavior: Experienced engineers were hard to find, and time constraints pressured leaders to fill roles quickly. 

But after recognizing some of the hidden costs of this practice — high turnover, difficulty attracting women to the company, and a lack of diversity to match that of customers — the company began to experiment with small wins. For example, some executives made a commitment to review the job criteria for leadership roles. One male leader said, "We write the job descriptions — the list of capabilities — for our ideal candidates. We know that the men will nominate themselves even if they don't meet all the requirements; the women would hold back. Now we look for the capabilities that are needed in the role, not some unrealistic ideal. We have hired more women in these roles, and our quality has not suffered in the least."

In another case, participants in a leadership development program noticed that men seemed to be given more strategic roles, whereas women were assigned more operational ones, signaling that they had lower potential. The participants proposed that the company provide clear criteria for developmental assignments, be transparent about how high potential was evaluated, and give direction as to what experiences best increased a person's potential. Those actions put more women in leadership roles.

Herminia Ibarra, Robin Ely, and Deborah Kolb

Herminia Ibarra is is a professor of organizational behavior and the Cora Chaired Professor of Leadership and Learning at Insead. Robin Ely is the senior associate dean for culture and community at Harvard Business School. Deborah Kolb is the Deloitte Ellen Gabriel Professor for Women and Leadership (Emerita) at the Simmons School of Management.

Why Do So Many Incompetent Men Become Leaders?

 

There are three popular explanations for the clear under-representation of women in management, namely: (1) they are not capable; (2) they are not interested; (3) they are both interested and capable but unable to break the glass-ceiling: an invisible career barrier, based on prejudiced stereotypes, that prevents women from accessing the ranks of power. Conservatives and chauvinists tend to endorse the first; liberals and feminists prefer the third; and those somewhere in the middle are usually drawn to the second. But what if they all missed the big picture?

 

In my view, the main reason for the uneven management sex ratio is our inability to discern between confidence and competence. That is, because we (people in general) commonly misinterpret displays of confidence as a sign of competence, we are fooled into believing that men are better leaders than women. In other words, when it comes to leadership, the only advantage that men have over women (e.g., from Argentina to Norway and the USA to Japan) is the fact that manifestations of hubris — often masked as charisma or charm — are commonly mistaken for leadership potential, and that these occur much more frequently in men than in women. 

This is consistent with the finding that leaderless groups have a natural tendency to elect self-centered, overconfident and narcissistic individuals as leaders, and that these personality characteristics are not equally common in men and women. In line, Freud argued that the psychological process of leadership occurs because a group of people — the followers — have replaced their own narcissistic tendencies with those of the leader, such that their love for the leader is a disguised form of self-love, or a substitute for their inability to love themselves.

 "Another person's narcissism", he said, "has a great attraction for those who have renounced part of their own... as if we envied them for maintaining a blissful state of mind." 

 The truth of the matter is that pretty much anywhere in the world men tend to think that they that are much smarter than women. Yet arrogance and overconfidence are inversely related to leadership talent — the ability to build and maintain high-performing teams, and to inspire followers to set aside their selfish agendas in order to work for the common interest of the group. Indeed, whether in sports, politics or business, the best leaders are usually humble — and whether through nature or nurture, humility is a much more common feature in women than men. For example, women outperform men on emotional intelligence, which is a strong driver of modest behaviors. Furthermore, a quantitative review of gender differences in personality involving more than 23,000 participants in 26 cultures indicated that women are more sensitive, considerate, and humble than men, which is arguably one of the least counter-intuitive findings in the social sciences. An even clearer picture emerges when one examines the dark side of personality: for instance, our normative data, which includes thousands of managers from across all industry sectors and 40 countries, shows that men are consistently more arrogant, manipulative and risk-prone than women. 

The paradoxical implication is that the same psychological characteristics that enable male managers to rise to the top of the corporate or political ladder are actually responsible for their downfall. In other words, what it takes to get the job is not just different from, but also the reverse of, what it takes to do the job well. As a result, too many incompetent people are promoted to management jobs, and promoted over more competent people. 

Unsurprisingly, the mythical image of a "leader" embodies many of the characteristics commonly found in personality disorders, such as narcissism (Steve Jobs or Vladimir Putin), psychopathy (fill in the name of your favorite despot here), histrionic (Richard Branson or Steve Ballmer) or Machiavellian (nearly any federal-level politician) personalities. The sad thing is not that these mythical figures are unrepresentative of the average manager, but that the average manager will fail precisely for having these characteristics. 

In fact, most leaders — whether in politics or business — fail. That has always been the case: the majority of nations, companies, societies and organizations are poorly managed, as indicated by their longevity, revenues, and approval ratings, or by the effects they have on their citizens, employees, subordinates or members. Good leadership has always been the exception, not the norm.

So it struck me as a little odd that so much of the recent debate over getting women to "lean in" has focused on getting them to adopt more of these dysfunctional leadership traits. Yes, these are the people we often choose as our leaders — but should they be?

Most of the character traits that are truly advantageous for effective leadership are predominantly found in those who fail to impress others about their talent for management. This is especially true for women. There is now compelling scientific evidence for the notion that women are more likely to adopt more effective leadership strategies than do men. Most notably, in a comprehensive review of studies, Alice Eagly and colleagues showed that female managers are more likely to elicit respect and pride from their followers, communicate their vision effectively, empower and mentor subordinates, and approach problem-solving in a more flexible and creative way (all characteristics of "transformational leadership"), as well as fairly reward direct reports. In contrast, male managers are statistically less likely to bond or connect with their subordinates, and they are relatively more inept at rewarding them for their actual performance. Although these findings may reflect a sampling bias that requires women to be more qualified and competent than men in order to be chosen as leaders, there is no way of really knowing until this bias is eliminated.

In sum, there is no denying that women's path to leadership positions is paved with many barriers including a very thick glass ceiling. But a much bigger problem is the lack of career obstacles for incompetent men, and the fact that we tend to equate leadership with the very psychological features that make the average man a more inept leader than the average woman. The result is a pathological system that rewards men for their incompetence while punishing women for their competence, to everybody's detriment.

Tomas Chamorro-Premuzic

Dr Tomas Chamorro-Premuzic is an international authority in personality profiling and psychometric testing. He is a Professor of Business Psychology at University College London (UCL), Vice President of Research and Innovation at Hogan Assessment Systems, and has previously taught at the London School of Economics and New York University. He is co-founder of metaprofiling.com.

Using Humor in Business: Some Practical Advice

 

Is business the right place to be funny? Surely business is a serious place and humor doesn’t have a place in it? I disagree, I think humour is greatly underused in business today and can differentiate you from the crowd. Let me give you an example...

When I was in corporate life I attended one of my first very senior meetings. It was on the top floor of our HQ, and in the special board meeting room where only the most senior exec met. You had to have an IQ test before they let you in!

As I entered the meeting room and sat down I looked around and was surprised by the lack of conversation as we waited for people to arrive. You could feel the tension in the room. I had to make a decision. Do I join them and just sit there and say nothing or do I act normal? Well normal for me anyway! I decided to act normal, so I did something terrible! I spoke to them and made a few funny comments! I decided to treat them as I would if I met them socially. I asked them how their weekend had been. These guys looked at me shocked! As I didn’t get much of a reply from them I started to tell them a funny story about something that happened to me at the weekend. Within 5 minutes everyone was laughing, the tone of the remainder of the meeting was business like but when appropriate I threw in the odd quip to lighten the mood. I had cracked the ice and more importantly for my career, I had made an impression. They wouldn’t forget who I was…

If I go back in time I was not a model student. A teacher wrote in my end of year report that “Colin is the clown of the class.” I read that and I had to agree, if by clown they meant that I like making people laugh - guilty as charged. School gave me a great audience and I used it to hone my humor skills. I am not a joke teller, my speciality is every day banter or as we would say in England ‘taking the mickey’. These are the things that naturally occur in everyday conversations. You may call it wisecracking or sarcasm, but whatever you call it, that’s what I do.

Wisecracking has a price, however. All the energy and time that I was devoting to my witty remarks at school should have been used to focus on my studies. So when school was out I didn’t have the marks and education needed to really join the workforce in a meaningful way. While my friends went on to get good jobs and start their lives after school, I found myself stacking boxes. Not exactly my dream job!

What I have learned since then is what was a distraction in school has become an asset in business. I learned that humor is good for business and is not used enough. If you are funny, people like you and people want to do business with people they like. A joke can be the differentiator from landing the account to getting passed over.

Some people are naturally funny. My son, and my youngest daughter, have inherited my humor. But my eldest daughter, did not. She takes after my wife Lorraine who was bypassed when they were giving out the humor genes. It’s not she doesn’t laugh, it’s just that she is not funny. For those two, I often find myself saying, “If you have to explain a joke, it’s not funny!”

Comedians have common traits that give them the ability to be funny. They are observers and notice things that other do not. But seeing things is not enough. Comedians can also be judgmental, which when combined with humor is the basis for some forms of comedy, particularly stand up comedians. They are, in a sense, like professional complainers.

But comedians are more than just complainers. Generally, they are more open to trying new things. They are curious by nature and are more open to new experiences. But that should not be confused with being agreeable. Their disagreeable nature comes in handy when complaining about the experience. This trait is another way that they can differentiate themselves from the non-humorous.

Using Humor in Business
Here is how I use humor in the workplace and it has helped me immensely when:

• Building relationships: I use laughter, wisecracks, banter to get on with my clients and build rapport. I believe if someone likes you, then that is half the battle won. Our repartee let’s us get to know each other and start building a relationship.
  
• Increasing the impact of my speeches: Audiences remember things better from speeches when they laugh so I now make sure I get the audience laughing when I deliver my keynote speeches on Customer Experience as I find they retain more of my message this way. Like the comedian, I look for examples of where companies provide poor experiences.
  
• Engaging audiences on a serious topic: Serious points can be a drag for audiences, and unfortunately, they can tune out. But if you combine your serious point with humor, they are far more engaged and you can still get over a serious message. We use this in our Customer Experience Management Training . It’s a combination of laughing at some of the poor customer experiences and why people do what they do, while, at the same time, communicating an important concept.
  
• Creating a happier work environment: Humor goes a long way in the workplace atmosphere. Laughter can create a happier environment, which in turn creates a more harmonious team.

How Do You Use Humor in Your Customer Experience?
Humor helps create relationships and build trust. The basis of a good, long-lasting customer relationship is to create trust with them. But humor also begins the relationship with an emotion, maybe surprise or relief or amusement. Whatever the emotion, it is engaging your customer and generates value. As a regular reader of my blog, you know that a good customer experience is important. Here are some ideas on how you can incorporate this important tool in your customer experience.


4 Tips for Using Humor Effectively:

1. Identify the right points for humorous interaction: Humor may not go over well in the accounting department, or at least they need to be number related jokes for them to get it! In my view, front-line staff should be encouraged to joke with customers, but they have to have the skills to do this. They will set the tone for the experience moving forward.
   
2. Know the limits of taste: This is critical to successful integration of humor into business. You need to know what would be a great wisecrack to one person, could be offensive to another, especially when dealing internationally. Always err on the side of caution.
   
3. Encourage the natural exchange: Please resist stifling staff with scripts; we should encourage people’s personality to come forward.
   
4. The only target is you: There is a big difference between laughing at someone than with someone. I have learned not to make fun of people in the audience but to make fun of myself.

Humor is underutilized in business situations. I believe that humor can be what aids your success in nearly every part of your working life. Most of all, humor can be the difference between landing the account and hearing that the client is ‘going in another direction’.

Maybe you, too, are a funny person. But honestly, it’s okay if you aren’t. There are things you can do to seem like a funny person. Better yet, you can hire people to be funny for you.

I would be very interested to hear how you use humor in your business life…

Also, if you liked this article, you might like the following blogs :

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world's first organizations devoted to customer experience. Colin is an international author of four best-selling books and an engaging key-note speaker. 
Posted by:Colin Shaw

The out-of-town founders

Country swing: Go Ape founders Tristram and Rebecca Mayhew say there are plenty of entrepreneurs in the country

 
Every day this summer, forests in the UK and the US have been ringing with ex­cited cries, and occasional screams, of adults and young people experiencing the thrill of clambering among the branches on rope bridges. 

These pursuits are thanks to the entrepreneurial talents of husband-and-wife team Tristram and Rebecca Mayhew and their business Go Ape. The brand extends across 34 centres in the UK and the US and is a multimillion-pound business. They plan to open more sites and expand into Russia in the next year.

Received wisdom is that the city is the place for ambitious founders, while the countryside is for bumpkins and where city folk spend a pleasant holiday. But what if entrepreneurs could just as easily spend their working lives in bucolic bliss? 

When the Mayhews hit upon their business idea 12 years ago, they were city- based. They had made home in the fashionable south-London area of Clapham, just as an influx of early-stage venture capital, networking clubs and general buzz about entrepreneurship was fuelling a boom in start-ups in the city.

However, rather than turn their spare room into an office and launch a web venture, the couple upped sticks to the Suffolk village of Hargrave, a 90-minute drive away, used a tent in the garden as their workspace and launched a treetop-climbing business on Forestry Commission land. “The countryside is full of ambitious people,” Ms Mayhew says, noting she now has a group of friends that she meets at the pub who are founders of high-growth companies. 

Rural start-ups in other parts of the UK include eco-clothing brand Howies which was founded by Clare and David Hieatt in the west Wales town of Cardigan after they quit London to indulge their passion for surfing and the outdoor life. Similarly, Jack Wills, the youth clothing brand, began in the Devonshire sailing village of Salcombe. Dyson, maker of bagless vacuum cleaners and bladeless fans, is also still headquartered in the Wiltshire town of Malmesbury, and exports around the world.

The image of the city as the only place for fast-growth start-ups is a myth, according to Grant Thornton, a UK accountancy firm specialising in founder-led companies. It recently noted that 40 per cent of the companies on its GrowthAccelerator programme were based in rural locations. 

Pros and cons of starting in the sticks

● Advantages
Lower cost base. Whether it is rent, wages or support services, such as accountants and lawyers, the cost of doing business tends to be lower. 

A stronger position when recruiting talent. The best people locally are likely to have fewer alternatives.

Networking. It can be easier to get candidates with personal recommendations when everyone in a community knows each other. Local suppliers are more likely to want to do a good job because they know that news about the quality of their service will travel fast in a small community.

● Disadvantages
Lack of choice in certain services. There may be lawyers and accountants in the countryside, but the best ones are more often found in the cities. 

Poor transport links. You may not miss the commute, but the lack of a decent rail service or fast roads will make it hard to get to clients and customers based a long way away.

Inadequate infrastructure. The countryside is usually the last place to receive the fastest broadband and mobile phone services. Getting a line connected to a remote location where there are no other buildings is expensive. 

Networking. Chance encounters with people you might need are less likely when everyone lives a long way from one another.

The Kauffman Foundation, a US-based think-tank that res­earches ent­re­preneurship, found that Montana, which ranks 48th out of 50 states for population density, had the highest proportion of start-ups per capita. That may be because there are few other sources of employment. How­ever, second on Kauffman’s list is Vermont, home to one of the most famous US start-ups of recent years, ice-cream maker Ben & Jerry’s.

One of the fastest-growing companies in the US is the Greek-style yoghurt manufacturer Chobani, based in upstate New York. It started trading six years ago and is now the market leader, with more than $1bn of sales. It has been credited with saving and creating hundreds of rural jobs. The area is a lot like rural Turkey where Mr Ulukaya grew up, and this was important. “When I arrived it immediately felt like home,” he says. “When you are home you can do your best work.”

Even some of the benefits usually ascribed to busy city clusters are present in the countryside. It is often observed that one of the characteristics of Silicon Valley’s highly successful urban start-up cluster is the deg­ree to which people help each other out without expecting anything in return. Potential explanations include that many founders have backgrounds in the sciences, where collaboration is encouraged, or that entrepreneurs do not view their activity as a zero-sum game.

However, generosity of support is something Christian Jones, managing director of Gro Group, which makes baby sleeping bags and other nursery items, claims is a benefit of its location amid the farming communities of Devon. “People here are genuinely more willing to help without a need for you to do something reciprocal.” 

Raised in the rural northwest of England, Mr Jones worked mostly in London before moving his family to Devon after his wife fell ill with lung disease. They also felt it would suit their two sons.

Mr Jones joined Gro Group as managing director before taking control through a management buyout, back­ed by the bank HSBC and London-based venture capital trust Mob­eus. Access to capital has not been an issue. “We had no shortage of offers when we did our last funding round at the end of last year.” he says. 

But not everything is rosy for rural entrepreneurs. There is less choice of people for recruitment and transport links may be poor, making it hard to meet potential suppliers, clients and investors, and for staff to commute – although that can become a benefit. 

“There is a real advantage, if you are going to do it, to moving to a place where it is not easy to commute daily [to the city],” Mr Mayhew says. “By doing so you instantly remove a lot of the competition for the best local talent because, for these people, moving to a city job is just not a realistic option.” 

On the other hand, he admits that good transport links are desirable for getting to the city for meetings with backers or advisers.

The lack of broadband connections is another big frustration. “Increasingly, our business is digital with demand for online bookings and the need for faster communication with suppliers and customers, but we suffer a lot of power and broadband outages,” Mr Mayhew says.

Reliable broadband would enable Go Ape to accelerate its growth, but that would require paying out about £100,000 for a dedicated cable to the of­fice. Ironically, extra sales generated by a faster digital line would probably mean Go Ape having to move its headquarters to a location with a larger building.

Although the Mayhews are happy to have set up in business outside London, they do recognise that it has nevertheless helped them in their ambitions. By renting out their Clapham home, they were able to cover their living costs in Suffolk for 22 months when they did not draw a salary.

Even the most successful rural founders admit that they could not do without some city support.

What's the Point of Creativity?

Creativity and innovation are hot topics these days, and they are being studied more frequently and intensely. Great observations have come of the attention, as Will Burns writes for Forbes: A coffee-shop study from the University of Illinois concluded that moderate levels of noise, as opposed to high or low levels, foster greater creativity. A study from the University of Stuttgart found that low levels of lighting enhance creativity. And then there's my favorite, another study from the University of Illinois, that concluded that alcohol intoxication improves creative problem solving.

The attention is good, but too often creativity is studied and written about without examining context. Why would we want to be more creative? Why bother fostering the conditions for creativity? Why dim the lights, adjust the volume, and get drunk? What's the purpose of it all?

The unspoken assumption is that our goal is to gain competitive advantage, to crush the competition, to win. But I believe that the best creativity comes from a much deeper place than the desire to win. It comes from a desire to contribute to the lives of others, either by introducing something new that improves the quality of their lives or by showing people that something thought to be impossible is in fact possible. When you change people's perceptions about what can be accomplished or achieved, you contribute to their humanity in the richest possible way. You give them hope for the future — a sense that life is not the demoralizing, unchanging drudgery day after day that the world so often teaches us that it is. When you change the way people think about possibility, it is an existential experience. It makes them feel understood. More than that, it makes them feel loved. 

When JetBlue said it was going to bring humanity to its business, it reunited two worlds that had been estranged for decades. When it put those TV sets in the backs of the seats, upholstered the chairs in leather, and gave everyone a little more room, people felt loved. "You know what it's like to be crammed in one of those tiny seats for five hours going out of your mind with nothing to do! You're one of us! You understand me!" 

This, in a world in which people so often feel not just that they're misunderstood but that no one is even bothering to understand them. Have you ever been on hold with customer service and heard a recording that says, "This call may be monitored for quality assurance"? Have you ever once seen evidence of customer quality improving as a result of all of that monitoring?

Increasingly, creativity — and the study of it — is divorced from the real needs of real people. Adding ever more gimmicks to a smartphone in the interest of increasing market share, rather than giving people something revolutionary that will make their lives better, reeks of something other than love and has no power to stir peoples' enthusiasm.

So the question we have to ask ourselves in business is this: Why create? Are we doing it for the gratuitous sake of creativity itself, without any larger purpose? Are we doing it because Harvard Business Review writes about it all the time? Are we doing it out of fear? To make more money? To get on the cover of Wired? Or are we doing it out of a desire to improve people's lives and transform their sense of what possibilities life itself has to offer?

I write a lot about philanthropy. Philanthropy means, literally, love of humanity. You don't have to give a million dollars to charity to be a philanthropist. You simply have to actively demonstrate your love of humanity. Your empathy. If the purpose of our creativity is philanthropy — if it is love for our fellow man, an appreciation that people struggle in their lives, and a desire to somehow lessen that struggle and increase their joy, with a little more leg room or with an iPad — it will change the world. And that is the greatest competitive advantage of all.

Dan Pallotta

Dan Pallotta is an expert in nonprofit sector innovation and a pioneering social entrepreneur. He is the founder of Pallotta TeamWorks, which invented the multiday AIDSRides and Breast Cancer 3-Days. He is the president of Advertising for Humanity and the author of Charity Case: How The Nonprofit Community Can Stand Up For Itself and Really Change the World.