Subscribe to the Tough Things First blog

The Advice to Follow … Or Not

The Advice to Follow … Or Not
In Entrepreneurs, Management

“You shouldn’t work for anyone.”

That odd advice came from my boss over 40 years ago. It was insightful, timely and genuine guidance from a man holding a large purchase order from Texas Instruments for a product we did not make, had never designed, and which only existed in my head. That this product, the Wafer Stepper, later became an essential piece of gear for every silicon chip manufacturer on the planet is an amusing footnote.

The nature of advice

We all get advice, but we don’t always get good advice. This is because much of the advice we get…

Lacks insight: Good advice has to fit the situation, and that begins with understanding the situation. Many people toss out advice without first understanding what you are facing.

Lacks Experience: Amateur advice is insufficient. An advisor must have some real-world expertise in order to know viable answers (which is why my book Tough Things First is so popular, because by being the longest serving CEO in Silicon Valley, I have learned quite a bit about business and leadership).

Is Biased Opinion: Everyone has an opinion, but fewer folks have data and experience. However, a lack of data and experience rarely keeps people from sharing their advice.

The issue then is what advice to take, what advice to not take, and why.

The advice I took

My boss at Electromask was none too pleased with me.

I had been sent to Texas Instruments to make them a customer. But I knew the equipment we sold did not radically improve TI’s prospects. Yet all along I had the notion of the Wafer Stepper in my mind and I knew Texas Instruments would see its value. So after playing a shameless game to get an appointment with the right people in TI, I hinted at the Wafer Stepper concept and showed how it would allow TI to radically increase the number of transistors in a silicon chip. But I never said we made it, only that we were looking at the concept.

That last bit was half true. I was thinking of the concept. Nobody else in Electromask had even heard of it.

Not too long after, I had a purchase order for four units at a per unit price much higher than I thought TI would pay. I handed these to my boss, who was perplexed by the combination of the opportunity, the urgency of engineering something that was barely note scribbles from my skull, and my sheer chutzpah for selling something that did not exist to a critical new customer.

“You really shouldn’t work for anybody else. You just don’t fit in. You’re not the kind of personality that belongs in an organization. You really have to work for yourself.”

I took his advice, quit my job, went home to tell my wonderful wife that I had walked away from gainful employment and would never again work for anyone else. That led to me founding Micrel Corporation, leading it for 37 years (36 of which were profitable on a GAAP basis), employing thousands of people and continually changing the semiconductor business.

My boss’s advice was insightful, based on his organizational experience, though at this point his opinion about me might have been somewhat biased.

The advice I ignored

“You cannot launch a startup, much less a semiconductor startup, without venture capital.”

That was not good advice then and it is not good advice now.

One thing was clear to me about venture capital and entrepreneurs – the latter did not care about the former. VCs (by and large) have a mission to make money in five years. In this case, “money” means increased share price valuations. The easiest way to make this happen is to artificially drive top-line growth at the expense of everything else, including letting the CEO build an enduring company. In fact, VCs encourage reckless corporate spending on anything that pumps up top-line numbers, including keeping the CEO on the road raising follow-on rounds instead of sculpting corporate culture, nurturing his employees or establishing a bulletproof brand.

Since I did not want to work for anyone else, including Silicon Valley venture capitalists, I took a different path. I leveraged everything – my house, my car, my investment portfolio (I would have leveraged my gold fillings if necessary) – and borrowed to kick-start Micrel. And I did so by borrowing from a bank.

“Mister Zinn. We do not loan money to startups,” was the advice I ignored from my banker. Instead I asked them to document what terms they would insist upon to lend to a startup like mine. I said it was an exercise to help me approach the next bank. They did draft a document with onerous terms and covenants, which I agreed to sign on the spot. It took a bit of talking to move these bankers past the bewilderment of having their bluff called, but they took my collateral, handed me a few hundred thousand dollars, and I built a profitable company that endured multiple industry cycles, several recessions, and outlasted nearly six United States presidents.

Advice worth ignoring is advice that tells you what can’t be done. As a Robert Heinlein character once said, “Always listen to experts. They’ll tell you what can’t be done, and why. Then do it.”

What makes advice good

Bad advice has many causes. Good advice has four key traits:

Timely: Advice has to fit the timeframe of the problem. Not only must you get the advice when you need it, the proposed solutions must fit the timeframe in which you need things to happen.

Relative: The advice must conform to the problem. Advice is not one-size-fits-all. What applies to other companies and other markets may be meaningless to you.

Factual/genuine: Opinions are based on very incomplete observations. Good advice is based on deeper knowledge. Avoid advice from people who are not intimate enough with your field or your challenge.

Doable: “Hand me that piano,” was a phrase George Carlin said had never been uttered. Likely so because it is an impossible task. Advice that requires superhuman effort is no advice at all.

Sticky advice fits your needs and lasts

Advice that sticks does so because it was a good suggestion, at the right time, carefully considered by someone with enough experience to point you in a direction. The art lies in recognizing good advice and ignoring the other stuff.

Comments (0)

Leave a reply

Your email address will not be published. Required fields are marked *

*

3 + 8 =


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>