Scientific American has a terrific article about raising kids, titled The Secret of Raising Smart Kids. The article confirms my own instinct that raising your child to be “hard-working” rather than “smart” leads to success in school and life. I encourage you to read the article; here’s one of many interesting insights:

In studies involving several hundred fifth graders published in 1998, for example, Columbia psychologist Claudia M. Mueller and I gave children questions from a nonverbal IQ test. After the first 10 problems, on which most children did fairly well, we praised them. We praised some of them for their intelligence: “Wow … that’s a really good score. You must be smart at this.” We commended others for their effort: “Wow … that’s a really good score. You must have worked really hard.”

We found that intelligence praise encouraged a fixed mind-set more often than did pats on the back for effort. Those congratulated for their intelligence, for example, shied away from a challenging assignment—they wanted an easy one instead—far more often than the kids applauded for their effort. (Most of those lauded for their hard work wanted the difficult problem set from which they would learn.) When we gave everyone hard problems anyway, those praised for being smart became discouraged, doubting their ability. And their scores, even on an easier problem set we gave them afterward, declined as compared with their previous results on equivalent problems. In contrast, students praised for their effort did not lose confidence when faced with the harder questions, and their performance improved markedly on the easier problems that followed.

When hiring, I try to look for “grinders,” people who will work hard to solve problems. In fact, I will take a grinder over a merely smart employee any day. In the article:

In 1972, when I taught a group of elementary and middle school children who displayed helpless behavior in school that a lack of effort (rather than lack of ability) led to their mistakes on math problems, the kids learned to keep trying when the problems got tough.

I find that putting smart people around the table can lead to interesting (and often long discussions), but put together a bunch of hard-workers, well, progress happens. Now when we can find people who are wicked smart and hard working, well, these people we do anything to keep for life.

When my son was about 2 years old, I repeated an experiment that my grad-school economics teacher told me about. I offered my 2 year old some candy. Then I gave him a choice. If he chose not to have candy that day, I would give him two candies the next day. He went with getting the candy right away. I upped the offer: three candies. This went on to about 6 candies when he started to think about it seriously. I quickly cut off the experiment then (Mom would have killed me) and we had a nice candy break.

As a father, a real scenario of choice is the act of disciplining a child and suffering short-term grief and trauma with the hope that this is a good long-term life lesson. This can be a very grueling experience and the easy path (giving the kid what they want) is sooooo tempting.

Business is the same way; startups especially so. The pressure to move quickly and keep moving “up and to the right” is very strong. Getting momentum and KEEPING momentum feels paramount above everything. So when a decision to take a short-term hit for a long-term gain comes up, the decision is always harder than it should be. What looks so sensible on paper feels so counterintuitive to an entrepreneur.

But take that deep breath and be like a responsible dad: live with the temporary trauma and headache of a sobbing, pouting, screaming kid so you can have a well-balanced child in the long run.

So what’s the chart? That’s our monthly unique visitors: one of the key currencies for consumer Internet startups. The pressure to grow “uniques” is very strong. Recently at Boxxet, we decided to make some big changes to our site (improved algorithms, new page link styles, moving out certain types of content) to make it stronger and healthier for the long term. But there would be a big short-term hit.

One of the benefits of being experienced entrepreneurs was that we knew we had to do it. So we took a deep breath and took the hit. And so far, we are seeing the gains. Whew.

2. Evaluating Relationships
3. Conversation
4. Handling Difficult People
8. Giving
10. Saving
13. Debtor Responsibility
15. Practicality
16. Politics of Advancement
18. Positive Thinking
19. Personal Accountability
20. Setting and Achieving Goals

I just finished my first season as coach for my son’s baseball team (6-year olds).  As my wife said about the experience, “it’s like a long vacation; it was very fun and fulfilling, but we are ready for it to be over.”

The most challenging part of coaching a team was getting the kids to focus on the drill, lesson or even game.  All the stereotypes of kids staring into space, spinning in circles, playing with the dirt…  all true.  Even my most gung-ho players would lose focus.

I tried to keep the players in check but not let their lapses bother me. 

Leading a company somethings feels like coaching a kids’ baseball team.  How do we stayed focus with all sorts of distractions surrounding us.  Here’s some commonality between coaching and leading a company: 

LONG TERM and SHORT TERM GOALS

For kid’s baseball, the season goal is to keep them interested and learning enough so they want to continue next season.  Weekly goals were focused on things like specific skills (throwing, batting) and game rules and strategies (running through first, covering second). 

In business, I’ve set such long-term goals such as “Making marketing and communications a more accountable department” (Biz360) or “Finding the best content on the web’s most popular subjects” (Boxxet).   Short-term goals would include “Capture 25% of the Fortune 200″ or “Grow web visitors 1% per day every day.”

EXPLAIN | DEMONSTRATE | PRACTICE

The best practice for doing a baseball drill is Explain | Demonstrate | Practice.  I wrote that phrase down on the top of all my practice plans.  It was a not-so-gentle reminder to not rush into drills but to be deliberate. 

The business version of this is probably: EXPLAIN | LEAD | MANAGE.  I posted a while back about Leaders vs Managers, and the best startups have some of both.  Too many times, I hear people not knowing what the goals of the business are.  It is up to the leaders to set the goal and the managers to communicate thoroughly.  In a perfect world, your executive staff have a lot of both leadership and management skills.

Tell them what you’re going to tell them.  Tell them.  Tell them what you’ve told them.

This is the sales and Powerpoint cliche.  SOOOOooooooo true though.  You’re think you’re being boring but repeating yourself.  Nope.  Do it.  True for 6 year olds and 60 year olds.

Until next season…

Money gets people all twisted up, both in business and families.  My wife and I got tired of negotiating with our six-year-old son everytime we went to the store to buy something, especially for a birthday gift for a friend’s birthday party.  It was time for an allowance.

Generally, we would think pretty hard about something like this.  We would talk to friends, consult books, ask the ouija board.  But we came to quick conclusion on how to proceed.  We were pretty aligned on the value and purpose of money as well as the responsibilities we wanted our son to have.   We decide that we would try something quickly and make adjustments if needed (for which we made sure we warned our son).

The allowance had the follow attributes:

•  The allowance was not tied to chores or behavior.  He gets his allowance despite behavior and outside chores.  Bad behavior led to lost privileges (GameBoy, sweets, etc).  Chores are part of family life and we all do them without direct monetary compensation.

• The allowance is to pay for all the kid’s discretionary spending.  With few exceptions, we no longer buy him discretionary items.  If he wants to pump quarters in the video arcade at the pizza place, that is his money.  If he wants to buy something at the museum store, he needs to buy it himself.

• We give him $10/week.  We do this on Saturday.

• Of this allowance, he must do the following:

  • 25% of the allowance goes into savings.  I don’t have a great explanation to a kid on the benefits of savings, but he seems to understand the rainy-day and future nature of savings.
  • 10% goes to a charitable fund, which he can dispense to a charity of his choice
  • That leaves $6.50/week for spending.  It seems like a lot to me, but so far, it seems to be working OK.

Some nuances, which I have not yet broken out (and may not break out) include:

• Matching 1:1 any money he moves from spending to savings,
• Adding an interest rate to savings.
• Adding an interest rate to any borrowings. 
• An old friend from college, when she heard about this plan, said that she certainly was taught how to save, but not how to invest.  Good point.  I’ll need to think about that as well.

We’ve put the responsibility on the kid to make decisions on what to buy, which is fascinating to watch.  I hope that he understands the value of savings, the discipline of spending, and the warmth of giving.  So far, it’s been a very positive experiment and, thank goodness, has stemmed the nagging at the store.

Note: we use Google spreadsheet to track the simple calculations.  I’ve put up a template, which you can copy and use yourself:
http://spreadsheets.google.com/pub?key=pyRRMru19_p6OCJ3s7kZcWA

I may not always make the direct link between fatherhood and business in these posts, but at least an overlap ought to be obvious.

I’ve marked some older posts as Fatherpreneurship and will write a bit more about fatherhood in the future.

We had a great time.  We made some upfront decisions on philosophy, product, pricing, positioning and go-to-market strategy, but as in any “startup,” it did not go as expected.   Here are some highlights and lessons:

Clear Corporate Goals and Philosophy:

I figured the lemonade stand will help my son learn about cost of goods, the potential monetary profit of work, salesmanship, and responsibility.  I also wanted to do it because (1) I never did it as a kid and (2) I wanted him to get a taste of the entrepreneurship (see my line of work at my startup, Boxxet).

Maximizing profit was not our philosophy that day.  We wanted to learn, have fun and share our great product.

A Unique and High-Quality Product:

I’ve bought lemonade, hot cocoa, cookies and smoothies from kids all over.  I am a sucker for the stand and will stop every time to buy.  But I don’t often buy truly great product from a lemonade stand.  Yes, that is not the point (and why I always stop at stand), but I felt there was room for improvement.

The week before, we had made ice cream cookie sandwiches as a family for a party.  We had fun making, eating and sharing these desserts.  They were fun to make, easy to handle, delicious to eat and were a hit at the party.

It became clear to us that the ice cream cookie sandwich would be a unique and desirable lemonade stand product.

Product Pricing:

This was a discussion between my wife and I about this.  These types of sandwiches would go for $2-$3 at a store or restaurant.  I felt that the lemonade stand needed to keep a $1 threshold for someone to the stop the car and help the kid.  Also, I felt that we need to leave value on the table by giving more to the customer.  We looked back to our Corporate Philosophy and went with $1.

Of course, it was the five-year-old who nailed it when he said, “if they have money, it costs one dollar; if they don’t have money, it’s free.”

Go-to-Market Strategy and knowing when to change it

Our first plan was to market via cute kid and kid-created signage along a high-traffic road in the heat of the afternoon.  We abandoned the strategy after about 10 minutes.  In the end, I believed we would have sold our inventory, but hanging on the side of a busy road was not that pleasant and it wasn’t fun to watch 30 cars pass by without stopping (people are intent on getting from A to B when they drive).

Then we went to the local park where people were hanging.  While we thought we could sell stuff there, we did not want to “sell” to or bother people who are relaxing.  Once again, we turned to our corporate philosophy and we moved on.

So we did what my son wanted to do in the first place.  Sell in front of our house.  It was lower traffic but much more highly targeted: neighbors who were more motivated (guilted?) to buy.   Turned out to be a great move.  We hung out, brought out music, chairs and drinks, had neighbors hang with us and caught up with people who were walking and driving by.  We had access to corporate HQ for freezer needs and potty breaks.  There were a great deal of intangible value. 

Building The Right Team

We knew we had the back-office and operations all handled (mom and dad).  Once the people saw the product and price, they were willing customers. But we knew we had a hole on the sales side.  My son is a great closer but not a good opener.  He’ll engage in a great conversation once warmed up and the customer will want to buy.  But he’s not the “jump up and down and holler at the top of his lungs” type (pretty useful for a lemonade stand).  So this leads me to..

When to Hire Your VP of Sales

At one point, our ten-year-old neighbor came over to see what was going on.  He volunteered to help.  We quickly agreed as we just gotten to our final selling spot after unsuccessful attempts elsewere.  He hopped on his bike and started tracking down cars and bringing them to the stand.  We had our “opener,” some would call him a “hunter.” He insisted on helping for free but we made him take a commission (need to have a “Win Win”).

Relying on Friends and Family:

In a startup, you often rely in friends and family to help get the company started: financing, the first few sales, moral support.  No different here.  Our neighbors really put fuel in our tank.  One came over and bought seven (for his extended family who was having dinner later but had no dessert planned).  In fact, it turned out that two party goers would buy about half of our inventory.

The Sweet Feeling of Momentum

Startups are a struggle, but there is nothing like the feeling of momentum.  And we had it as people stopped, bought, and enjoyed.  We sold about 22 of these things.  After a few discounts, commissions to the ten-year old and paying $5 back to mom/dad for COGs, our son netted about $10.   My wife and I had a great time, we hung out with neighbors and I think our son learned something.

And, of course, we saved a few ice cream cookie sandwiches left over for us to eat for dessert that night.  We enjoyed our day and our treat, and that turned out to be a great exit strategy.  

Well, I am a Blackberry Dad (actually, I use a Treo, but let’s stick with the Blackberry theme).  And I confess to doing some of those things mentioned in the article.  I sneak many peeks on my Blackberry, sometimes at inappropriate times.  I like to stay in touch and not fall behind.

But technology has made me a better dad.   Here is what I know: I am a hard worker and very focused on work.  My dad was this way; I am this way.  Earlier in my career, it made for tough going with friends and girlfriends.

But the Blackberry and its tech cousins have made it possible for me to work when and where I want.  I work hard, but I am able to work the hours I want to work in the location where I want to work.

So I wake up late, work hard during the day, grab my 6-year-old son in the late afternoon and we spend a lot of time together.  We have a great time: we play spies, we cook dinner, we go shopping, we design all sorts of stuff, we have a family meal, we do some math and reading.  When he goes to bed, I read him a story and we talk for a few minutes.  We talk about the day and that’s when we talk about the “why’s” (why it is important to treat everyone well; why bullies bully; why being afraid to lose means you may not get the chance to win).

After he is tucked in, I spent an hour or two with my wife and a little relaxing.  Then I work late into the night (don’t ask how late I go) on my next big thing.  Before the Blackberry, I would be putting in my long days at the office, since that is the only place where work can be done.   I would probably run through the door hoping that he was still awake.   It would have been Cat’s in the Cradle for me.

[By the way, I know I am lucky to be able to do this.  Technology has not given everyone this choice.]

And while only time will tell the ending of this story, I am thankful, truly thankful, that technology has allowed me to try to be the kind of dad that I wish to be.