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Hollywood and Silicon Valley often seems worlds apart. While movie making and startup building may always be very different endeavors, great managers use the same techniques in every discipline to empower their teams, hire the right people, and change the world.

Over the weekend, I watched Woody Allen: A Documentary which profiles the great director through the words of his actors, editors and producers. Allen’s management ability shone through every interview.

For years, a product can grow linearly before suddenly seeing compounding growth. Facebook is a great example. From 2004 to 2007, the company grew at a fairly linear rate. And then, the magic happened! The network effects kicked in and exponential growth ensued.

Linear growth always precedes exponential growth. For market places, in social networks or in advertising exchanges, the story is always the same. Linear, linear, linear. BOOM, exponential. One day, the magic happens.

Did you hear ‘em talkin’ ‘bout it on the radio

Did you try to read the writing on the wall

Did that voice inside you say I’ve heard it all before

It’s like Deja Vu all over again

- John Fogerty

I am emotionally attached to Android’s success. It’s the same loyalty I displayed when I campaigned for Apple in the mid-90s. But with a tinge of betrayal.

I reminisce about spending hours sifting through Zapf dingbats to transform PC Word files into usable Mac documents; choosing from a threadbare gaming library comprising three titles: Bungie’s Marathon series, SimCity and Civ; and waiting years for updates to Quicken and the Office Suite.

Clarity is everything in a startup. That’s why metrics can be such a great help. But not all metrics are created equal.

One of my CEOs recently shared with me the way he thinks about metrics. I thought it was simple and brilliant. There are 3 kinds of metrics in a business:

1. Vanity metrics are great indicators of momentum. These are useful for garnering press, investment and partnering interest. But they most often aren’t the end goal, the metrics that correlate to a business’s value.
2. Business health metrics are high level metrics about the business. Revenue is a prime example. User activity is a second. Conversion-to-paid is a third. These metrics tend to be the ones shared with the board and leadership of the company. Goals can be established for these metrics and the health of the company’s initiatives can be measured in comparison to these goals.\
3. Product decision metrics inform product, marketing, sales or other team level decisions. Examples include cost-per-customer-acquisition per channel, % of users using a particular feature, etc. Think through what kinds of metrics you and your team are focused on and run them through this filter. It will help you prioritize the right things.

Facebook is asking me to redefine my closest 7 friends.

I logged into Facebook today to see this new feature, starring your friends. Below this text is a Google circles like UI that asks me to star friends whose updates are particularly important to me.

With hundreds of friends, the average Facebook user logs in to see wall of updates that aren’t quite relevant. Some of us have reduced our friend graphs and unfriended contacts in order to return the feed to relevance, which isn’t a desired user behavior. Facebook, after all, wants to encourage expansive graphs.

Apple has built the most successful tech ecosystem of the past ten years. And they have done it, surprisingly, by dictating the rules of that ecosystem.

Compare iOS and Android. To win, both needed to develop initially 2 but eventually 3 things:

1. A mobile OS
2. Mobile hardware to run the OS
3. And later, the content ecosystem

Apple controls nearly every aspect of this stack, from the prices of books and movies, to the place where apps are downloaded, to the payment mechanisms, down to the advertising and user tracking.

First there were RSS feeds (Google Reader

Although today’s society is said to be in a state of information overload, in fact it may not be in excess. It’s just an overflow of odd and fragmented information in the media. The amount of information in each fragment is in fact quite small. In this slew of half baked information, isn’t the brain oppressed? The stress on the brain isn’t because of quantity, but because of limited quality.

I met a seasoned executive recently. He made a bold claim. “Management is an art, and one that is overwhelmingly undervalued in Silicon Valley.” I wondered, are we investing enough in our managers?

Talent is the largest investment of an early stage company. 80%+ of startup operating expense flows to compensation. Retaining these employees is good business. Especially in such an expensive and competitive talent market.

Research shows employees leave their jobs because of poor leadership and poor management. All managers in a company influence employee retention - from the C-level to the line manager. This is why investing in each creates a competitive advantage.

The UK is just starting to enforce EU’s cookie consent law. Visit the FT for the first time in a while and you’ll see:

In effect, this law requires consumers to define a Personal API. Consumers carry a trove of data: browsing data, ad click data, friend network data and social sharing data. Web businesses have realized the value of that data ($12B in 2011). This EU law encourages consumers to become aware of the value of this data and manage it.

On first glance, SMB SaaS companies, those who sell Software-as-a-Service to small to medium businesses, may seem like any other software company. But they are quite a different breed. It’s not just the sales process that differs from traditional software. The entire business has be built differently. So must the product. And typically these products have a 2 step value proposition.

SMB SaaS companies sell to a radically different market than enterprise software companies. See the table below. The average traditional enterprise software company sells to firms with 3300 employees whose average payroll is $160M annually. In the US, there are only 17,500 of these firms. On the other hand, SMB SaaS companies sell to firms with 10 employees and $400k in annual payroll. There are about 5.8M of these firms in the US.