My favorites:

2. If you can’t be first in a category, set up a new category you can be first in.

3. It is better to be first in the mind than to be first in the marketplace.

4. Marketing is not a battle of products, it’s a battle of perceptions.

5. The most powerful concept in marketing is owning a word in the prospect’s mind.

6. Two companies cannot own the same word in the prospect’s mind.

Some of the highlights:

“Pre-dodgeball I went thru 3-4 years thinking I was going to meet some magical engineer who would build all the stuff I was thinking about.  But I never met that person, so I taught myself ASP and MS Access (yikes! eventually PHP an MySQL) out of a book and got to work just hacking stuff together.  I’m still a really shitty programmer”

“Don’t let people tell you your ideas won’t work…If you’re passionate about an idea that’s stuck in your head, find a way to build it so you can prove to yourself that it doesn’t work.”

On the First Round Capital website we write that: “We love investing in technologies and business models that are able to shrink existing markets. If your company can take $5 of revenue from a competitor for every $1 you earn – let’s talk!”…

I remember at a board meeting at Powerset Peter Thiel asked us how the morale of the company was going.  Like all founders at board meetings, we said it was going great.

Peter said “let’s prove it.”

What we did is offer the following:

1. Anyone can voluntarily, permanently reduce their salary by one or more strata levels,
2. For each competency level forfeited you get XX,XXX more ESOP shares.

That’s from Steve Newcomb, the founder of Powerset, in a post that contains the most thorough, nearly step by step advice on implementing good hiring practices and culture at a company that I’ve encountered.

It’s long but worth the read.

For those who don’t know what Powerset is, Microsoft bought it for $100 million and it essentially became Bing. Steve Newcomb wasn’t the guy I met or insulted though. That co-founder of Powerset was Lorenzo Thione, and I insulted him as at a gay piano bar in New York called Marie’s Crisis.

After drunkenly begging the piano player to play “Gary, Indiana” (It was musicals night and that was the only musical song I knew any of the words too, plus, my friends and I were all from Indiana. No one in the bar was happy about this song choice.) my friend told me a guy he was talking to was from the Valley and that he’d started a company.

That’s all I knew. I had no idea who Lorenzo Thione was or what Powerset was. I can’t tell you exactly how that conversation went except that I didn’t hesitate to tell him that I thought starting a search engine was a dumb idea. I didn’t mince my words.

At that point in time, I was skeptical of anything that sounded like a “me too” idea to the point that I acted supercilious towards anyone not working on something innovative, and in my first 2 minutes of talking to Lorenzo, that’s how I assessed the situation. (Remember, I was drunk enough to request “Gary, Indiana,” and even that doesn’t begin to describe my state of inebriation. Also, I think there were a lot of new search engines in the news around that time like Cuil and WolframAlpha which really did disappoint)

I probably talked down to this guy for a good 10 or 15 minutes and he just heard me out. He never once took a shot back at me or even really acted annoyed.

He asked about me and I told him I had just started a company and was working on it full-time. He asked where I was from and I told him Indianapolis, and the only thing he had to say about me was “You’re trying to start a company? Then why are you in Indiana?”

Well, somehow I stumbled back to my friends apartment after that conversation. In the morning, I remembered just enough of Lorenzo and Powerset to do a Google search.

At this point, I still had no idea I was talking to anyone of any significance. For all I knew, I was just talking to another entrepreneur at the same stage as me in starting a business.

But then Google showed me that I was actually talking to a guy who had helped build one of the most powerful natural language search engines ever built.

Foot in mouth. Open palm to forehead.

Sometimes I think what a wasted opportunity that night was, but usually, after I cringe from nostalgic embarrassment, I just think how much that event cleared away a bunch of my unhealthy bravado. There was a lot more bravado clearing as I proceeded to start my first company, but never again was so much cleared in one swoop.

Complete with a link to a template in Google Spreadsheet

I don’t think I can be more pithy than my headline currently is in summing up a deep philosophical question I’ve struggled with ever since starting Pocket Tales.

Is being logical, logical?

Without hesitation I answer this question “yes” and add that we should always strive to be logical, but that’s the easy part of the question and just the tip of the issue. Let me show you what I mean.

Read this Business Week article from 2001 (read that date again, that’s almost a decade ago): “Sorry Steve: Here’s Why Apple Stores Won’t Work?”

Then check out this post about Malcom Gladwell’s “Blink” vs. Michael M. Lewis’ “Moneyball.”

Finally, in “Mad Men” Season 4, Episode 4 the hypothesis of creative advertising genius Don Draper is being challenged by “facts” from a focus group. His response to the focus group is it has “nothing to do with what I do.”

What do all of these have in common? They demonstrate a titanic debate between two sides. One side says we must believe the facts. The other side says the facts as we know them right now don’t lead us to the truth.

In a startup, this is a core issue that will determine how you run your company. Will you only make decisions based on tangible data? How will you know when you have enough data to get an accurate picture? Conversely, will you favor your gut over the facts? How will you know when to trust your gut?

Every entrepreneur strives to be rational. No successful person believes the path to success is acting randomly, but sometimes what we know in our gut contradicts the facts. When we act on our gut, it looks random to others. It looks illogical, even though it’s not. This creates a problem when you have employees, advisors, and investors looking over your shoulder.

Like most things in life, there isn’t one right way. Your gut is as valuable a tool as Google Analytics, but you will second-guess your decisions, and others will second-guess them too. The goal is to know whether you’re following the reason of tangible facts, or the less tangible reason of your gut. This self awareness will help you make decisions more confidently and to sell your decisions to others.

Learn this concept: Network Effect Startup