The door opened and into the room walked the most dangerous person I’ve ever met. He reached towards his belt and slowly pulled out his .45 caliber handgun, raised it and paused to evaluate my expression. “No disrespect, but it’s been pressing into my hip all day.” He placed the gun on the coffee table, relaxed into the leather sofa and let his guard down for the first time in a very long while.

This person, let’s call him Kobayashi (I’m a Usual Suspects fan), is one of the most interesting people I’ve ever met. He was a well-educated entrepreneur who ran a profitable business that employed dozens of people. He lived in a swanky downtown Los Angeles penthouse. His kids went to private school. He kept his fridge well stocked with imported beer and wine for guests even though he didn’t drink. He was, by all measures, a gentleman.

But Kobayashi ran an unusual business. He was in the business of organized crime. He started this venture quite young, expanded his operations, diversified revenue streams, and created very profitable independent business units. “I have two lawyers,” he once told me. “I keep them both because they hate each other. Neither one of them can get out of line because the other one is watching him. That keeps me safe.” Kobayashi was brilliant, witty, and dangerous. He was a friend and mentor to me during an interesting period of time in my early 20s.

Everything I need to know about startups, I learned from Kobayashi. While I can’t get too deep into specifics (would you?), I can share a few the things he taught me.

Don’t sell rocks when you can sell mountains

Kobayashi didn’t work with small packages. His business transactions involved risk at every stage – product acquisition, transport, and distribution. But the marginal risk on each decreased with the size of the transaction. Working in large volume reduced his overall risk and rewarded him with a shrink-wrapped palette of cash rather than a suitcase of cash.

As founders and early stage employees, we go to great lengths to mitigate risk. So why do we overlook the total marginal risk?

Building a profitable small-market company is difficult and carries a high risk of failure. Building a profitable large-market company is also difficult and carries a high risk of failure. But the marginal risk in building a company decreases as the addressable market increases. While a larger company may require more total work, the relative effort is less. Make no mistake: small-market companies still come with 18 hour days, flaky vendors, upset customers, and exasperated spouses.

Thinking small increases our risk. So let’s think big.

[Notes: “Large vs. small” is a different debate than “bootstrapped vs venture-backed”, though the two are often conflated. It’s also worth noting that serving a small segment and progressively expanding outwards to serve the larger market is a totally legitimate large-market strategy.]

Cut out the middleman

As Kobayashi’s businesses grew, he was in a position to start bypassing middlemen. Instead of dealing with distributors, he went straight to producers. Instead of hiring contractors, he purchased required equipment and moved people onto payroll. Everywhere he saw a third party making money, he figured out a way to replace that person or bring them in-house. He reduced costs at every step. He constantly encouraged me to do the same.

Interesting things happen when we cut out the middleman. In addition to reducing cost, we often end up creating an internal byproduct that can be productized and sold to a completely new customer. (Amazon Web Services is an example of this.) Sometimes the middleman’s market is so huge, that a freaking enormous business can be built simply by providing their customers a lower cost and more efficient option. Two-sided marketplace businesses are a textbook example of this type of disruption.

Don’t shit where you eat

“When someone’s doing something for the money, people can sense it, like a desperate lover. It’s a turnoff.” – Derek Sivers, Anything You Want

During this period of my life, I was running a couple businesses that overlapped around the edges. One business had loyal and enthusiastic customers. This business was glamorous, but hemorrhaging money. The other business was transactional and lacked any customer loyalty or love. This business was “anti-glamorous” and a bit closer to Kobayashi’s world than I care to admit.

As time passed, I felt increasing pressure to monetize customers from the first group. I began to overlap these businesses more and more. While they included the same customer segments, there were two completely different products. This pollution of something beautiful with something cheap was my act of shitting in the proverbial kitchen. I watched as revenues increased and looked away from the damage I was causing to the customers I really cared about.

Thankfully, Kobayashi pulled me aside and straightened me out.

The lesson for us is simple. Don’t screw with your users. They are your golden-egg-laying goose. Protect them from rapacious cofounders and investors. Don’t spam them. Don’t abuse them. Don’t be a douchebag.

If it don’t make dollars, it don’t make sense

“A business without a path to profit isn’t a business, it’s a hobby.” – Jason Fried, Rework

We can build an awesome product and then give it away for free. We can bolt advertising to it. We can turn it into a lead-gen property. We can even sell some virtual goods.

Kobayashi wouldn’t.

He would have built Birchbox rather than Pinterest and Airbnb rather than TripAdvisor. He would have found product market fit and a viable business model before spending money on development resources. Kobayashi stayed close to the money, close to a transaction.

Kobayashi was around for the late 90’s tech bubble. He knew many of the players and saw the writing on the wall long before they did. He talked about the first tech wave as if it was a fad that had simply passed, saying things like “when dot-com went out…”

“If it don’t make dollars, it don’t make sense” may sound like a gross oversimplification. But Kobayashi outlasted those late 90’s startup founders. And he’ll probably outlast most of us.

Closed mouths don’t get fed

I’ve written before about the importance of networking and moving from wallflower to evangelist. Kobayashi was adamant about the importance of this. “Closed mouths don’t get fed,” he would say. “If you want something, you have to either ask for it or walk up and take it.”

We can’t expect good fortune to fall into our lap. It’s our responsibility to create the circumstances for it and then capture that good fortune. The meek may inherit the earth, but they’ll be getting it from Kobayashi.

Be a badass

“There’s only one thing that will make them stop hating you. And that’s being so good at what you do that they can’t ignore you.” – Orson Scott Card, Ender’s Game

My friend Chris DeVore makes a comparison I love: pirate ships as organizational models. Pirate ships combine an “us against the world” mentality with a hunt for treasure. This crucible of chaos and ambition somehow allows unstructured groups of mercenaries to complete complex tasks without killing one another (very often). A pirate ship is a meritocracy where he/she who is most badass, leads.

I’ve met several “badasses” over the years, though Kobayashi is the most memorable. Each one of these people had a gravitational pull for talent and resources. The world reorganized itself around them as they passed through it. They were larger than life, energizing everyone in their periphery.

The one thing these badasses shared was the source of their power: influence rather than authority. This lesson is the most important and also the most difficult to implement. There’s no pill, book, or retreat that will turn us into badasses. But if we want to captain a pirate ship, we must become the most badass version of ourselves. Kobayashi taught that we lead only with the influence we earn.

Donald DeSantis is a developer and UX designer at TechStars company Giant Thinkwell. In his free time, he travels to faraway cities and helps make Startup Weekend events successful. You can find him on Twitter at @donalddesantis.

Image courtesy of Flickr user Abhisek Sarda.

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Getting porn as a kid in the ’70s was hard. You had to be part 007, part Pee Wee Herrman and part Rocky (specifically, the meat beating training scene). In short, there was no internet. How’d they do it?

They had their ways. Although old-timers may tell you they had to wank uphill both ways in the snow, there was porn to be had. It might not have been great porn, but mankind got off before there even was porn.

The only odd part about many of these methods is that you had to interact with somebody to get your porn. An oddity in today’s one-man private show in front of the computer.

Gizmodo ’79 is a week-long celebration of gadgets and geekdom 30 years ago, as the analog age gave way to the digital, and most of our favorite toys were just being born.

Thanks to Noobs-R-Us in sparking the idea for this post

Sneaking into porn theaters. Yeah, there were porn theaters. These looked like regular theaters on the outside, but on the inside there were many, many more penises and vaginas. If you were underage but clever, you could somehow sneak into the theater via an older brother, a friend working at the theater or a fake mustache.

Of course, once you were inside and watching the movie, you still had to hold it until you got home. Despite it being a communal function, it was still generally frowned upon to pull one out while other dudes were sitting next to you.

Porn quality: 10
Privacy: 5

Using lingerie and clothing catalogs: Various women’s undergarment catalogs like JC Penney provided ample material for the youngsters of the 70s. What they lacked in actual nudity they made up for in quality of models (sometimes).

Although guys (especially young ones) had easier access to these catalogs than more mature fare like Playboy or Penthouse, it was just as hard to explain away why they had one of these stashed under your bed. The excuse of shopping for a birthday/Christmas/Hanukkah present would be tenuous at best.

But, the fact that the models had most of their clothing on provided a great imagination-building exercise that strengthened minds for the future. This explains why movies today are just uninspired rehashes of what we already saw in the ’80s.

Porn quality: 3.5
Privacy: 8

Image credit

Mental spank bank: The ultimate in bare-bones beating, this required you to be ultra-vigilant during your day in order to store images for later use. Trips to the beach, the department store changing room, the food court at the mall, the post office, the pool, the dentist’s office, the Grand Canyon and the polling booth could all obtain lucrative deposits for your bank.

The downside, of course, is that this relied solely on your memory. So any errant noise or smell could interfere with the delicate recollection process, making an already longer-than-usual activity take even longer.

But, the fact that you can do this anywhere, in any position, trained you well for life down the road. If you can squeeze one out standing up in the shower, lying down in bed, squatting in the woods, kneeling in your neighbor’s bushes or face down in your backyard, you could literally squeeze one out anywhere. At work, during your lunchbreak? No problem. At night, while you were visiting grandma’s smelly apartment? Cake. In the car, waiting for your old lady to pick up the dry cleaning? Done and done.

Porn quality: 0-3 (Depending on how well your imagination worked)
Privacy: 10

Playboy, Penthouse and Hustler: As a teen, you may not have legally been able to get these magazines, but when has that problem stopped any kid from getting anything? You could bribe the guy at the corner store, swipe your dad’s when he wasn’t looking, borrow one from your friends, ask your older brother to buy one for you, or just plain steal one.

Although the more commonly available magazines didn’t show hardcore penetration, it was usually enough for kids in the ’70s to get the job done. If you somehow froze that same kid in 1979, unfroze him in 2009 and showed him YouPorn, he would simultaneously masturbate while holding up his other hand to shield his eyes in disgust. It’s a new world, my friends.

Porn quality: 7
Privacy: 3

Nude scenes on TV: Before VHS (or Betamax) became common, people had to stick to their programming schedules. As Adam Carolla (a man who was alive and masturbating during the ’70s) says, they had to time their diddling sessions in accordance to whatever movie was airing.

If something had a nude scene 57 minutes into the film and started at 11:00 PM, you would do the mental calculations and turn on the TV at 12:25 (accounting for commercials) and see maybe a boob and a half. That would have to last you for a week and a half.

Porn quality: 3
Privacy: 2

(Credit: Crave UK)

During the day, we’re mild-mannered tech bloggers, wearing glasses and looking moody in our vast, yet innocuous, Crave penthouse. But at night, we fight crime. We take on the persona of a creature of the night–black, terrible, shadowy. We become the Ghost Pigeon.

To protect our loved ones, we have to keep our secret identity super-duper seekrit. That means hiding our calls and texts to the police commissioner, especially when we send him MMS messages with videos of us collaring a miscreant.

Luckily, just for people like us there’s Sonaworks’ Ghost Pigeon software, a secret-phone-within-a-phone that will hide your texts, MMS messages, and calls. It’s available now in the U.K. and a bunch of other countries, including Estonia, Bulgaria, Norway, Nigeria, and Cyprus, but apparently it hasn’t made its way to the U.S. yet.

Ghost Pigeon is invisible on the phone–there’s no icon in the menu. Instead, you launch the application by typing in a password. Here at Crave UK, we installed Ghost Pigeon on our 8GB Nokia N95, and although it’s visible in the list of installed apps, its name is well disguised.

We could hide contacts, so that we only saw them from within Ghost Pigeon, not in our normal list of contacts. The phone rang normally for incoming calls from hidden –or “pigeonated”–contacts, but they were only stored in Ghost Pigeon’s call logs and weren’t visible in the normal call log.

Similarly, our phone alerted us to incoming texts from a hidden contact, but the texts didn’t show up in our normal in-box, only in the Ghost Pigeon in-box.

…