Contaminated Labs

Steven Johnson’s Where Good Ideas Come From could also be called Where Good Posts Come From. I’ve got at least a half dozen posts rumbling around in my head as a result of that book. This is one of them.

There’s a line in the book I love:

The best innovation labs are always a little bit contaminated

The line comes at the end of a section that explains how noisy signals, mutation errors, and screwups often lead to great things.

I’ve seen this in startups. If you look at our thirty something portfolio companies you will find that many of the most successful companies have been highly chaotic organizations for a significant part of their existence.

You will also find that some if the best managed and most disciplined startups have struggled.

This is not always the case. I am thinking of one portfolio company that is very focused and disciplined that is absolutely killing it.

But there is always an exception that proves the rule.

If you want to unleash more creativity in your company, you need to allow for a little contamination. It is the sand in the oyster that creates the pearl.

#VC & Technology

Comments (Archived):

  1. reece

    “It is the sand in the oyster that creates the pearl.”Fred just got all Confucius-like on us. Brilliant line.And if we literally pull back on those companies, I think you’d agree that the chaos of cities has something to do with the clustering of startups around them.

    1. JLM

      Cities which become centers of creative endeavor have in common quality of life, climate, access to capital, fairly high population densities and great universities.When folks are working for free, environment becomes way more important than almost anything.Some instances the attraction follows the creation of critical mass.Silicon Valley, Boston, RDU, Austin

  2. Vladimir Vukicevic

    I absolutely agree with this wisdom Fred. It’s nice to hear a VC express this as well. But sadly I don’t believe that you are part of the majority for this opinion. I’ve found that chaos often represents the most productive period of a company’s development – particularly when it comes big picture issues. But that it can’t be the steady-state for a company.

    1. fredwilson

      the chaos can’t last foreverthat’s for sure

  3. awaldstein

    You would think that there needs to be a mid ground between ‘chaos’ and ‘managed and disciplined’.Managing to foster creativity (and the chaos that surrounds this process) is something that places like Google and Landor in their early days were masters of.

    1. Joe Siewert

      Yes, Google is a great example of striking a balance between being a technology fun house and a successful company.Was just reading yesterday about a web agency in Minneapolis that gave their employees a lab day to tinker with whatever they wanted. Definitely some productive results.

      1. awaldstein

        Thnx…I’ll check out the link.The idea of fostering creativity and the need for maniacal concentration around details to successfully run a company are the perfect pair of opposites.

      2. JLM

        The way they have maintained their creative encouragement is even more impressive given the fact that it is not a startup, it deploys significant capital in the process and has resulted in real products.Google has 4-500 “projects” in which it has significant investments and of which only a handful will ever see the light of day.This is a conscious effort and is not happening by accident.Of course, an 83% gross operating margin will allow one to fund a lot of good ideas.Google will become an economic city-state in the next 20 years. They will be teaching the Medicis how the game is played. It will become more important to know who is the CEO of Google in future Presidential elections than who is the Prime Minister of the UK.

        1. Matt A. Myers

          I can think of at least one they lost out on …. 🙂

  4. JLM

    “When order is made from chaos, value appears.”The above thought has been my guiding mantra for a few decades whether rehabbing large scale institutional real estate or doing corporate turnarounds. It has propelled me to the pay window a few times and that is, after all, the final exam.Almost without exception when something is spinning out of control (and thereby leaking value) and you bring it back into control, you have to return to the value level from whence it originally departed — and, sometimes, then some.In many moving mechanical processes — an example aviation and aeronautics — this concept of dynamic stability wherein a process is evaluated by its natural ability to return to stability is a critical element.Business is no different.If an aircraft is “in trim” at a certain altitude, power setting, fuel mixture, direction and trim settings — when you inject an outside force — such as a bit of turbulence — it will quickly return to that same stable flight characteristic if it has “good” dynamic stability.In business, it is management which creates the dynamic stability of getting everybody to color back inside the lines when their crayons slip. It is process documentation which creates the lines that define the edges of “best practices”.I view BRAINSTORMING as the manner in which otherwise orderly businesses tap into their creativity and attempt to take a peak over the horizon or into the customers’ minds or — I hate this expression — to think outside the box.It is very important to brainstorm in a playful, non-judgmental manner and to have the space and time to allow it to happen. There are a couple of good tomes out there on how to do it. It is like learning to meditate. Or maybe blogging. Very hard work.I think it is a bit of a cop out to accept an otherwise disorderly business environment and to rationalize or justify its lack of order as an adventure in creativity. The business should be be framework for the creative endeavor and should be supportive of the creativity.It is the difference between breeding thoroughbreds and work horses. You still need a bit of order to frame the creativity. Somebody has to ensure there is Mountain Dew in the refrigerator.

    1. William Mougayar

      Order out of chaos is such an important revelation.What usually happens is that there are only “temporary moments of clarity” during that chaos, and it’s the CEO’s role to quickly seize these moments and turn them into something.Watch this incredible birds formation video… that makes this point so well. Not only are these formations unbelievable,- they only last for very short moments. These are the moments that startups should seize.

      1. JLM

        What an incredible insight.I have a theory that “learnings” are all around us and that if we keep our eyes open there are enormous lessons to be found. You have found one and applied it in a practical and abstract manner.I have a theory that business folks today should become 360 degree businessmen with meaningful levels of expertise in every facet of a business — management, law, regulation, technology, finance, marketing, operations, personnel, etc.I developed this theory from a conversation I had w/ a CEO who ran a huge Argentenian oil company who I saw interviewed on Charlie Rose’s show.I wrote him a letter and we had coffee in Dallas once. It was quite enlightening. One of the most truly brilliant men I have ever met — and in a couple of different languages.Now, as to the birds — who is the LEADER? I want to meet THAT bird! LOL

        1. William Mougayar

          I read that the leader changes often so no one bird carries the burden of the prevailing winds on their own. I don’t think that part applies well to business! Lol

          1. Harry DeMott

            Its like watching a bike race. In the peleton (group of riders) the leader takes the wind – and then shifts out. That way the group moves far more quickly and everyone uses the minimum of energy.No reason this can’t work in business – with each person taking a pull working hard at a problem or problems – while others rest a bit – or think about different stuff.

          2. William Mougayar

            1. Exactly2. I meant for the CEO’s role that wouldn’t work. I expect all my team members to punch above their weight. Resting is for holidays or off-hours, but rotating to other problems is Ok.

          3. Tereza

            I know some people at IBM who developed and espouse an approach called “sense and respond”, which I think is along those lines.

          4. Peter Beddows

            Hence the expression “free as a bird”? Could that be because they have no investors’ expectations to worry about? To see those birds maneuver is an amazing sight, particularly in that none of them appear to suffer harm in the process even though the changes are dramatic and seemingly spontaneous.However, the metaphor of the birds multi-leader rapid trajectory and formation changes can be carried over into business as “an approach to leadership that could not work in business”.While in many cases, agility and ability to “pivot” may be the difference between ultimate successful outcome or otherwise, no business could survive, never mind ever become successful, if it got into the habit of making such rapid alternate changes of direction as would inevitably happen under a multi-leadership regime. Reminds me of “a camel is a horse designed by a committee”. Harry DeMott’s reference to the peleton in a cycle race is a quite different metaphor from the birds changing leadership and direction metaphor in that a) there is still only one true leader ~ team captain and b) even while the pack leader may momentarily change, as it does, neither the moment of peleton (business) direction nor it’s objective are changed: Each alternate “pack leader” is simply going after the same target/objective but with refreshed energy, not refreshed ideas. On the other hand, human nature being what it is, for a business to grow successfully, it must have a leader who is singularly focused, objectively determined and broad scoped, yet also not so rigid that he/she will not be ameanable to hearing and possibly following corrective guidance when and if appropriate.

        2. Peter Beddows

          The true, and very real, value of the snippets of insight, guidance and wisdom that you share here JLM in expanding upon the themes initiated by Fred and upon the contributions of others to that theme is fully supported by the evidence that “you put your money where your mouth is” as shown by the very real successful corporate track record of your current business. You speak so clearly from experiences gained within the trenches which makes your observations contemporaneously very relevant.For example, rather than seeing a limitation or constraint to business as many others might in a fundamental change of a critical business circumstance, you see an opening allowing you to take advantage of a lease expiry to relocate to an alternate locale offering potential for better business growth over time. Strategically and opportunistically, very smart business.

      2. Matt A. Myers

        “What usually happens is that there are only “temporary moments of clarity” during that chaos, and it’s the CEO’s role to quickly seize these moments and turn them into something. “BINGO!!! :)And as I’ve discovered you need to be well-organized in order to jot this direction down, or it’ll get lost and decrease productivity. 🙂

    2. panterosa,

      I am so interested in your ‘brainstorming, and your dreaded ‘thinking outside the box’ in a non-judgemental, loose time frame way, I hope you will elaborate. I have read years back that the creative force of many companies are the ‘wild ducks’, a super creative, mainly unmanageable, chaotic creatures who brainstorm up a storm, and take massive, or ‘creative’, management to optimize/control. Wild ducks exists alongside sprinters, milers, and so on.Being a wild duck by nature, I am fascinated by the paring needed to harness the ideas to produceable, salable, goods. Wild Ducks just s**t ideas all day, and hope to find the right mate to pair with, to fertilize the idea, and to incubate it. I am lucky enough that I am a disciplined and well trained wild duck. Still I get told not to try to ‘boil the ocean’ on big projects. But thinking big, and failing big is how one learns, no? (I have been encouraged to ignore small mindedness – to just think, by several who simply feel that thinking big is the way to go, and the practicalities will be sorted out eventually.)How do you reconcile this?

      1. JLM

        I think that “brainstorming” is as mechanical an intellectual exercise as conducting a focus group.There is a way to do it that is challenging, supportive and non-threatening. The key thing is the sponsorship and buy in. The CEO has to be the sponsor and has to be both an active participant but also not a restriction to the direction things go.The issue is how far afield one is going to go and that is why it is so critical to ensure that nothing is out of bounds and everything is perfectly non-judgmental.I introduced focus groups and customer satisfaction surveys and other customer centric ideas to a couple of hide bound businesses and the results were startling. After a rocky start, we learned gobs of information which we immediately put into practice. We were the ones being educated.Thereafter, the conducting of focus groups became one of the most sought after assignments in the company and the results progressively more useful and targeted.I think the same thing about brainstorming.I suspect it is best done by being both a bit democratic — time for everyone — and a bit loopy — following ideas which may initially have absolutely no initial appeal.It almost has to be done regularly to be believable and credible otherwise it is just a lark. Nothing wrong with a lark from time to tme.

        1. panterosa,

          So your definition of effective brainstorming happens in safe, open, supported spaces, created on a regular basis by those in charge, in which there is trust, no directed goal. Learning may be surprising in it’s usefulness and hence a welcome benefit, and when conditions are right, it is not only massively beneficial to the company but desirable enough for the employees to seek involvement in this as a prioritized and energized role.I agree in all of the above. Briefly, what qualities would you look for in a CEO to achieve this, beyond just past history of having done so before?

          1. JLM

            The whole issue of CEOs is an interesting topic to me particularly having been one for a few decades.I guess I would look for a CEO who is comfortable in his own skin, naturally inquisitive and is confident enough in his own abilities that he is able to absorb and adopt an idea that did not start at his desk. He would have to be comfortable in a team atmosphere. Patient, caring in a non-judgmental way and willing to see through things over a protracted period of time.There is a huge difference between being a QB and being a coach. A coach who has been a QB is the best of all. He knows he could do it once upon a day. He knows that things don’t always work according to plan. He is ready to make adjustments to his own plan. A good game day coach. He knows he might have to pull the QB unless the results are what he desires.It is also useful to employ a facilitator from time to time in order to ensure that folks fight fair.It is worthwhile to note that not everybody is really a “thinker” — some folks just want to told what to do and then excel — at extraordinary levels, in fact — in the doing rather than in the conceptualizing or foreshadowing of what needs to be done. In some ways an “executive” — a very good one — just wants to execute.Last caution I would make is that not everybody is truly interested in the business as passionately as a founder, entrepreneur or CEO. But they may still be crackerjack at their job. It’s just not their passion.I cannot tell you how many times I have worked with wonderful folks who simply view the business world through a different lens and this is why entrepreneurs and those in close concert are such unusual characters. They possess a different — not necessarily better — lens.On the other hand, sometimes you can love something too much and miss the opportunity to re-charge, re-load and re-set. It is important to regain a bit of your perspective from time to time and reinvigorate the life force within. I think there is 4 year natural rhythm to life.

          2. Peter Beddows

            While I fully agree with JLM’s responses to you panterosa, I also think that what you brought up broaches two different creativity issues.Brainstorming sessions such as JLM suggests have a very important part to play in ensuring any business can stay relevant as time goes by simply because the world outside changes and thus a business must stay relevant to its intended market place or, at the very least, be swiftly aware ~ in the case of buggy whip makers ~ of any impending radical shift in its market place. During such sessions, naturally “thinking outside the box” is an essential component if anything productive is to be achieved.However, I also believe in, and think it is worth, encouraging, team members to very naturally “think outside the box” while focusing upon completion of the immediate tasks and objectives before them: There should be a way for them to be able to offer up for broader consideration by the management team, any insightful, business relevant ideas that may occur to them in the course of doing their everyday work otherwise one might find the brightest sparks amongst your team getting fresh ideas based upon what they are doing for you but then taking those ideas away with them to start in competition with you.Not that anyone can be, or should be, allowed to independently go off on a tangent way from the general plan or away from completing the tasks before them because then you would be back to the chaos situation as depicted in the Birds video listed by William Mougayar above. You also have to be extremely aware that, in an intensely creative environment of any start-up or even within an established business that may be undertaking new project or contract work, that certain people will constantly want to pivot in their own work based upon “new ideas that occurred to them overnight based upon what they did yesterday” ~ typically referred to as the infamous source of budget/profit depletion – “project creep”. Hence, here is just one more aspect to be aware of in managing creativity, managing your team and managing accomplishment of strategies, tactics and objectives in building your business.

  5. Matt A. Myers

    Do you think this applies to all stages of a company no matter how young or old? Honestly though I think creativity is a process of chaos, so the initial idea would have been formed in this way.I would think not having a clear path for a company in their first year could be a bit worrisome — or perhaps it is more the end goal that matters and thus leads the contaminated creativeness.Maybe you just mean executives being overly anal about things that can allow for some creativeness or trial and error?

    1. fredwilson

      it’s the last point you make that seems most clear

    2. JLM

      There is a period of time in the creation of a company in which its governance, financing, culture and product are taking shape simultaneously.This is not really “chaos”, this is simple development and I would say that all companies go through a similar process. It is like organizing a political campaign and going from a single office with one computer to a nationwide organization with a fully developed fundraising and social media communication campaign.The development of management systems, accounting systems, finance resources and reporting systems is where most inexperienced entrepreneurs lack expertise. Not a huge problem because these are the framework issues which can be done by others.Once you have done it a few times, it is a huge advantage to be able to snap your fingers and make them appear as if by magic. That’s why serial entrepreneurs are so successful, they don’t get tripped up by the business process and can focus on the creative process.All of this business process stuff is just the infrastructure in which the creative processes are housed. But lots of companies fail because they cannot keep the lights on.Some of the most “anal” business executives are, in fact, relieving the creative folks from these burdens to allow them to create. It is when the business processes intrude into the creative process that a cost is extracted.The job of a CEO is to provide an efficient business environment in which good folks can be productive in accomplishing the company’s vision. The CEO is a servant.

      1. Matt A. Myers


      2. Peter Beddows

        Shades of our good friend “Peter Drucker” once more.

    3. fredwilson

      i think it mostly applies to the early formation period

  6. LIAD

    Some environments are more conducive to creativity than others. There are innumerable diverse factors, physical and intangible, which engender creativity. I don’t like thinking of these as contaminants. To me contamination implies the presence of impurities. Foreign bodies which need to be expunged, to regain purity.If we’re after innovation and creativity, these things aren’t contaminates, they aren’t impurities and shouldn’t be viewed as such. They are the exact opposite. They are the seedlings of innovation – they are the elixirs of creativity itself.

    1. Matt A. Myers

      I agree. It really would be the kind of direction people are given I feel.There’s a bit of trust and learning of an individual to know that the person won’t go too far off course, but even if they do hopefully it’s just a first draft that’s not allocated too much time. :)Plus, even just implanting a thought will stir around with people for days and they may come up with some interesting things. Whether they tell you the ideas or decide to do the “ex-Yahoo / ex-Google employees that start their own ventures” is another matter. Hopefully they’ll have a vested enough interest to share though. 🙂

    2. nakisnakis

      “A little bit contaminated” can also serve as a very graphic way to describe diversity in a team. It’s also a good reminder -> groups that are “a little bit contaminated” (aka heterogeneous in age, gender, orientation, race, etc.) outperform homogeneous ones. 🙂

  7. William Mougayar

    “Nail it before you scale it”.

    1. JLM

      A chuckle and a brilliantly insightful comment.It actually applies to something I am doing right this instant.Consider it stolen.Thanks!

      1. William Mougayar

        I’ll admit it’s not mine. I saw it tweeted not too long ago, but it resonated so well. I’ll join the thiefs club. It reminds me of “Take my content, please. (and link to it)”

  8. Dave Pinsen

    “It is the sand in the oyster that creates the pearl.”That seems to contradict the post a while back about the benefit of comfortable workplaces (e.g., Etsy’s chef-prepared lunches and the knitted covers it has on its HVAC pipes). The analogy of sand in the oyster would seem to be uncomfortable office chairs, etc.Maybe I’m being too literal-minded though.

    1. Donna Brewington White

      I’m thinking the sand in the oyster would be the business challenges, conflicts, etc., and the chaos that Fred describes.You can have a wonderful culture and comfortable offices and still have a ton of “sand.” There are some who would actually see chaos as a perk.Somehow this reminds me of Winston Churchill who worked from his bed for part of each day (with his secretaries taking dictation). Funny with all the major issues and events in his biography — this little detail captured my imagination. Talk about a cushy work environment.

      1. Dave Pinsen

        Good point, Donna. I hadn’t considered that other interpretation, which seems obvious in hindsight. The perils of commenting before having my first coffee of the day.Interesting note about Churchill.________________________________

      2. JLM

        Please, don’t get me started on Churchill.

        1. Donna Brewington White

          You will get no complaints from me if you do!Did you read The Last Lion?(BTW thinking of presenting the idea to Fred of starting an AVC Book Club.)

          1. JLM

            I have read just about everything I can get my hands on about WC — including his version of WWII. I am currently reading Winston’s War by Max Hastings. I respect the intellectual rigor of Hastings’ writings immensely and they are so informative and challenging of the “western” view of WWII.Churchill and George Catlett Marshall (VMI ’01) are my greatest heroes.I honestly believe that they are what stood in the way of evil taking over the world. Evil in such a pure and undiluted fashion as to be the proof of the presence of the Devil on earth.I cannot read the description of Churchill visiting Marshall on his deathbed at Walter Reed without tearing up. Churchill was no young man and Marshall was in a coma and never regained consciousness. This tribute is one of the most poignant moments I have ever seen committed to words.Churchill talked Hitler off the invasion of Britain with sheer bluster at an instant in time when the Brits probably could not have defended themselves. It was theater of the highest order and he never let on to the British people how hollow he personally knew the bluster to be.Marshall was truly the architect of victory for the Allies. The greatest unknown fact — having been a 5-Star, Sec of Def/State, Amb to China — he dismissed out of hand a $1MM check in the garden of his beloved Dodona Manor for his memoirs with the statement: “I did not enter public service to aggrandize my purse.”I read everything about Marshall not so much as a student of history but when I was a professional soldier as professional development. Forest Pogue’s writings and the accumulated letters of GCM are an unbelievable insight into real greatness.The greatest tribute to him was his acknowledged reputation for being a perfect gentlemen. That is something that VMI guys of a certain age foster and pride themselves on.I ended up at VMI in a funny way which is a long story. I was headed to WP but had a medical problem enroute. My Dad, a professional soldier for 35 years, had had a bunch of VMI guys at a summer camp and was teaching them hand to hand combat. He noted that the VMI guys always were good at it and that whenever they had flipped another cadet into the sand, would always extend their hand and help their victim up.In the Korean War, one of his cadets — from San Antonio, VMI ’50 — won the Medal of Honor. My Dad said it did not surprise him in the least.Sorry for the ramble, watching football w/ one eye.

          2. Donna Brewington White

            An enjoyable and educational ramble, JLM. Thank you.I don’t know as much about Churchill as I’d like, so always welcome any new information or insight that comes my way.I know almost nothing about Marshall, but your description “The greatest tribute to him was his acknowledged reputation for being a perfect gentlemen.” definitely gets my attention and makes me want to learn more. If I was going to read one thing about him, what would you recommend?

          3. JLM

            Read one of the Forest Pogue books. I met Pogue when he was in residence at the Marshall Foundation in Lexington, VA. He is a devoted and brilliant writer.More importantly, I held Marshall’s “black book” from when he was the Commandant of the Infantry School. Enshrined in that book were the names of the great American generals of WWII who Marshall had identified when they were only Majors attending the Infantry Advanced Course.In there were also some incredibly obscure notes — a comprehensive list of underwear manufacturers in the US.Marshall would ultimately oversee the expansion of the Army by a factor of 400 ending with 11MM men under arms — that’s a lot of underwear.Asking me to choose amongst my Marshall books is like asking which M & M I like the best.

          4. Peter Beddows

            The point of Churchill “working from his bed for part of the day” occurred because he had a bed set up for him adjacent to the war room so that he was available on an instants notice as things developed.The bluster also included fabricating an abundance of life-sized model planes to give the appearance to spies that the Brit’s had far more planes available than was actually the case.As an aside, I remember the black-out curtains, after the war, made great material for building play tents and also remember walking, on my way to school, through places where houses had been flattened by German bombs: Made for great places, as kids, to play spy games much to the concern of parents who knew what was left of those buildings was very fragile and dangerous.

  9. Steven Kane

    I 100% agree with the postBut, I have never understood the expression, “the exception that proves the rule”What?How?I wonder where that expression came from.We all use it, over and over.But I don’t think it actually means anything.;)

    1. Donna Brewington White

      I always took it to mean that if something is an exception or out of the norm then this further proves that there IS a norm — or rule. So long as there is a range of possibilities, outcomes, etc. for a given situation (or problem, set of circumstances, etc.), then there is no set rule and therefore nothing can rightfully be considered an exception.

        1. Donna Brewington White

          Thanks. I confess to a fascination with language and questions like the one you posed. Although most of the time don’t have the luxury of stopping to figure out how certain phrases/terms were derived.Like you, I get frustrated by meaningless phrases (or use of language in general) — but didn’t think this particular one fit the bill.

    2. fredwilson

      to me it means that there will always be exceptions to every rule

      1. Jared McKiernan

        which maybe proves that the rule is useful and not just a dictatorship? if you’re waiting for a rule to be 100% true i guess then you’d never have any rules, save for tautologies. guess it’s a decent phrase although i don’t think i have ever said it

  10. paramendra

    Now we are talking. “Discipline” is groupthink, no recipe for out of the box thinking/greatness.

    1. Jared McKiernan

      i find it interesting how “out of the box thinking” is a saying pulled right from said box.

  11. BillSeitz

    Woof, you just gave ground-cover for thousands of managers and board members to rationalize their brain-fart-du-jour… Would you care to talk me down off the ledge with some qualifications?

    1. fredwilson

      at some point, you have to create order out of the chaos or it won’t work as a business

    2. BillSeitz

      Some good RibbonFarm bits:* on the dangers of business books: “So if you follow the “great” formula faithfully you will accidentally build walls that prevent your own bits of luck and serendipity from getting through. It is only by creating your own bloody mess that you will be responding to your own unique local conditions and environments, and the lucky breaks your unique initial conditions and unique path offer.”…* opportunism: “many people just see opportunism as reactivity in a different guise, but the two are in fact radically different… (reactive approaches) can easily get lost in a series of knee-jerk next-actions that head nowhere… Not only does the opportunist not get disrupted by the changing world, she actually takes advantage of it… The bad news: opportunism is a probabilistically effective way of getting things done… there is a chance opportunism won’t do the job… But year after year without opportunism in your toolkit, and a scary, frightening thing will happen to your life. It will become ordinary. You’ll achieve nothing remarkable. In purely decision-theoretic, Las Vegas terms, you will fail to “beat the house.” This is because the rational incentive structures of the world are designed to pay off less than the investment of rational players. Salaried jobs take more out of you than they pay. Non-financial rewards work the same way…” (lots more)

  12. Michael Yavonditte

    Oh my gosh what a subject!I have now worked at 4 start-ups. My first one went public (Juno), my second one almost did (AltaVista), my third one did really well (Quigo) and my fourth one (Hashable) is tbd, off to a solid start.Juno and Quigo were both very successful financially. If you asked any of the early employees of either companies they would tell you that both places were chaotic at times. Juno also suffered from employees fundamentally questioning their leadership, which is worse than chaos, it’s cancer.Quigo felt like a chaotic slog to me. I was the CEO. It wasn’t my style to micromanage. We built two products. We talked about building many more but never did. Just the talk of new ideas made a certain subset of employees nervous.AltaVista had many layers and a lot of process. A bunch of the senior managers from Compaq ended up running the company. It had a lot of promise but eventually lost its way and its dominant position to Google.

    1. fredwilson

      so your take is that a bit of chaos is necessary for success?

      1. Jared McKiernan

        thought it was interesting to read joel spolsky’s posts about working at Juno- it certainly sounded like the leaders and employees weren’t on the same page (and the employees page might have ended up better, had the leaders embraced the dissonance rather than pushing back at it)

  13. Michael

    Thanks, Fred! Good entrepreneurs neither foster nor manage chaos — they orchestrate it.

    1. JLM

      Well said!

  14. ShanaC

    You make me feel a lot better about chaos and how it resolves. back to doing what i was doing.

  15. vruz

    “it is the sand in the oyster creates the pearl”that’s some inspired thought.regarding chaotic workplaces, this reminded me of Mayor Bloomberg’s office.

  16. Richard

    This is an interesting contrast to the usual idea that the biggest thing you need to get an early-stage business to survive and endure is to create order (as JLM described well earlier). I’ve been pushing for increased order pretty hard for the last year too, but I’m in a more steady service business and not a big-bet startup.I think where the two ideas merge and truly reinforce each other is something that I have done from the start; push towards order but expose yourself to the full force of disorder where it strengthens your business. For example if you get in the habit of explaining away small inconveniences to customers in a way that they accept then you don’t need to do the extra work to solve them and you keep the business a bit more orderly – but if you expose yourself to the pain for a bit you may find a better solution that other competitors can’t match. Similarly in managing a small team you can keep things very orderly if you only delegate small and insignificant tasks, or you can delegate a lot more responsibility and risk missing some deadlines now (increased disorder) to build a far stronger team down the road (which is more order in the long term).To bring both sides together I make sure we’re highly ordered in following through promises that we can’t break (to borrow from Seth Godin) – delivering great results that customers can rely on to run their business – but when it’s something that allows us to grow through the pain without significant external effects then I let the disorder continue until we have the best long-term solution.It’s really just good long-term management which means investing in the future in a way that may not have clear outcomes now. Over-managing to the point of choking off growth is just a short-term outlook, whether it’s a blue-chip company managing quarterly earnings or a startup locking in to the first revenue stream without looking for bigger opportunities.In my book good management is usually the ability to apply two contradictory ideas at the same time – in this case increasing order to make things smoother and simultaneously allowing the real problems to stay in plain sight until they’re solved in the way that adds the most value.

  17. David Bloom

    I’ve worked like a dog to cull my ideas down to an executable vision. More worried about too many ideas than too few. But recently a client contaminated our lab with a simple question. It’s led to such a big idea I sometimes wonder if this is one of those moments. We are holding course but definitely keeping this in mind for v2.0.

  18. Harris 497

    Sand in the oyster only works if the oyster knows what to do with the sand once it’s in there. I have worked in startups where departure from the prescribed pattern was frowned upon. The company did not grow because the main financial contributor didn’t value other thoughts, and the partners did not have the courage to over rule him. The spirit of adventure and a certain amount of open mindedness, respect for the opinions of others, and the courage to defend one’s ideas are necessary for startups to benefit from the sand of contamination:)

    1. fredwilson

      An open mind is key. Great point

  19. Carl Rahn Griffith

    Great observation.Have – very much so – witnessed/experienced this.

  20. LaurenceWiliams

    Really great post and a fantastic analogy at the end just come across this blog thanks you Fred.

  21. JLM

    The Skunk Works idea is one of the most orderly concepts possible in which an organization frees a few of its very best minds to work exclusively on a project of significant proportions without the restraints of a bureaucracy and with greater financial resources.It is however the autonomy of action that drives the creative process.Sixty minutes of every hour is spent on the creative endeavor and none is spent on the baloney of the company or business. It is an exercise in concentration rather than chaos.The Lockheed Martin Skunkworks created the U2, Nighthawk, Blackbird, Raptor — huge advances in engineering completed in record time and all making it to the production floor in very good shape.I think this insight — that folks can do some great groundbreaking work when relieved from the pedestrian and mundane — is a great inspiration for how such businesses should be managed.

  22. JLM

    Great quote and one that resonates with me. Thanks.I am curious why the Japanese would have any opinion on the Marshall Plan as it was entirely in Europe. Am I missing something?

  23. JLM

    I wonder how some guys whose countrymen started WWII are in no particular position to be critiquing guys who had to pick up the world’s marbles. But, hey, I could be wrong. Just my feel.