7 Types of Leaders based on Vision, Execution, and Empathy

This article is written by Erik van Mechelen, based on the Octalysis framework by Yu-kai Chou and lessons from Octalysis Prime, a mentorship journey with Yu-kai Chou.

So you want to be an effective leader. Maybe even a great one. It is a good thought, a great feeling.

As a leader, you have the chance to inspire, direct, and support people to team and individual accomplishments, to make society and the world better through those people.

These statements might feel to you too grandiose. But we know from Core Drive 1: Epic Meaning & Calling, that having a Why will drive you to become a stronger leader.

This article will briefly touch on how to learn and train yourself to be an OP leader, the convergence of a leader with Vision, Execution, and Empathy.

Continue reading 7 Types of Leaders based on Vision, Execution, and Empathy

Top 10 Mistakes I Made In My Life

Top Mistakes

The end of the year is a good time to reflect and learn. I’ve made many mistakes in my life. Some were more penalizing than others, and some may have cost me my company or set back years of my efforts.

Fortunately, because I also did a few things correctly, I ended up okay. But these mistakes are valuable lessons for me today, and likely for new entrepreneurs who want to maneuver the crazy startup/life jungle.

Interestingly, as I look through the list below, I realized one of the common themes in the mistakes below relate to caring too much about what other people think but not following what made sense to me. Good advice is golden, but following bad advice or mere pure pressure may be detrimental for an entrepreneur.

Here is list my top 10 mistakes in life as an entrepreneur.

10) Listen to MBA students from Anderson School to write a 60 page business plan

When I started my first technology startup as an undergrad at UCLA, I looked towards some students at the Anderson business school for some mentorship. To an undergrad student interested in business, MBA students were like masters of the universe, and we believed in everything they said. They advised that I create a very robust business plan that factored in all the MBA training they were receiving.

This whole process took more than 4 months of valuable startup execution time, especially when our plans keep changing. When the business plan was already 55 pages long, one of the MBA students said, “you still missed a section on listing out and describing the 5 Risk.” That was another one week.

At the end of the day, once I finally proudly displayed my 60 page bullet proof business plan to a Venture Capitalist, she annoying told me, “Oh we don’t look at anything beyond a presentation deck or a 1-page executive summary.” That crushed me.

Lesson Learned: just because someone is successful in their own rights doesn’t mean they are the expert at what you are doing. MBA students are generally smart individuals who worked mostly entry-level at big corporations like Consulting or Investment Banking Firms. Their achievements of being there is highly respectable, but often they don’t know a lot about how the startup world works.

Your divorce lawyer uncle is not a corporate lawyer. Don’t mistaken success to true relevant expertise.

9) Spent too much time making my first business “look legit”

Similar to the mistake above, when I started my very first business (not tech startup) first year in college, I was enthralled with the idea of having my own business.

I spent a lot of time figuring out legal options, website stuff, logos and business cards – basically the things that made me look like a “legitimate business.”

I did that for a couple months, and I felt great about it. However, I later realized I didn’t spend any time making my business actually more valuable. My ego probably got in the way (you know, like giving people a business card with a fancy logo that says you are CEO of your company), but since my business didn’t have true value or content, eventually all that was trashed as I moved on to other ideas, logos, websites and concepts.

Lesson Learned: many of the most successful companies came about as hobby projects that didn’t have any business structure before they got traction. Instead of making your business “look” legit, it is much better to focus on your product or talking to customers to ensure that they would actually buy your service once it is ready.

8) Trying too hard to fit into my business fraternity

Continue reading Top 10 Mistakes I Made In My Life

A CEO’s account of how his Startup Failed (RewardMe)

Startup Fail

A post that will cost me $13,000 (regarding how I lost $1 Million in Funding)

This post has been long overdue.

Partially it was because I felt rather embarrassed about the unfulfilling results of my startup Rewardme, and partially it was because I had been so busy growing my new business on Gamification Framework in the past few years. Also, I wanted something to clear with a major Silicon Valley Law Firm that we had a detrimental history with before sharing my experiences too publicly, but it became clear that this would take too long and I have given up (in fact, writing this post would cost me at least $13,000 because of that).

But alas, the lessons from my failures could possibly benefit thousands of entrepreneurs out there, so I’m taking the bold step forward to share what happened from my viewpoint as well as some lessons learned during the process (for an account from my life-long friend and former CMO Jun, click here).

An overview of RewardMe

I was running RewardMe from 2010 to the end of 2012. It was generally bringing gamification into the offline retail/restaurant market through a digital loyalty program. Nowadays there are quite many of these companies, but we were the very first in the market if you didn’t count FourSquare’s “Mayorship” system.

Our product metrics were great (actually 10x more than our competitors based on what they published on their press releases), customers loved us, we were covered by large media sites including Forbes and Business Insider. Towards the end of our reign, we closed a $1.5M deal with a big chain store that would allow us to deploy our product nationwide. We were also attracting many of the biggest chains, getting multiple meetings with top executives from Carls Jr, Subway, Swarvoski, and many more.

We decided that going door-to-door was not the way to scale (I still believe in this today, even after seeing the traction of the top leaders in the industry who dumped tens of millions with only thousands of paying stores), but it’s to go through the big hurdle of closing large chains early and deploying nationwide quickly (since chains and mom-and-pops alike like to follow other chains, but not the other way around). That would give us a strong barrier to entry, as when our competitors realized they need to go after chains, we would be one year ahead and compounding our traction there.

Runway is Everything

We however, did not raise a lot of money. We raised a bit over $1M to get to where we were when our competitors at the time already raised over $10M. I wish I had knew more about my own Octalysis Framework and the 8 Core Drives at the time, but since we did not come out of a famous incubator or had a celebrity startup team, fundraising was particularly difficult (so I guess a lesson here is: join a famous incubator if you can. It would increase your fundraising hype regardless how great you can get your company to become. The equity taken is peanuts when compared to decreased chances of dying).

Because of our stellar results mentioned above, the investment/VC community was impressed with our execution, but liked the door-to-door model better because it produced “predictable growth” such as “next week, 30 more mom-and-pops will signup.” They told us that just because VPs of gigantic chains are taking 3rd meetings with us does not mean they will sign a deal with us, which was a fair statement.

So towards the end of our runway, we finally closed a $1.5 Million revenue deal with a large national chain brand, thinking it would get us our next round of funding. The big problem is, this two-year contract would at least take 6 months to implement and revenue collection had to come later.

Most investors became interested and wanted to talk more immediately, but then got to a point where they still wanted to see “predictable growth” and would like to see the second and third big deal come in before they wanted to commit. To take some personal responsibility, perhaps I just wasn’t being a great salesperson and just didn’t close the deal (now I understand it as – I didn’t use any Black Hat Gamification/Motivation Techniques that drive urgency, but merely used White Hat Techniques that makes people feel good and trust me, but no urgency to act).

During this time of fundraising, I was also heavily distracted because of a devastating issue that escalated from some work a “Top Silicon Valley Law Firm” did for us (we can just call them GD). Even though I believe initially it was an honest mistake, instead of spending more time on fundraising, I was stressfully dealing with the IRS day in and day out for many months. To be fair, I know many entrepreneurs who have had a great experience working with this firm, but according to my own experiences and especially how they dealt with it afterwards, I cannot recommend any entrepreneur I care about to work with them (email me if you want details – I’m scared.) Lesson here? Don’t take every sentence as truth just because it came out of a prestigious firm – especially if you are on a “startup deferred payment plan.” Double check and use common sense.

At the same time, when we still had a few months of runway left, we realized how VCs liked the predictable mom-and-pop growth, but we didn’t think door-to-door was scalable (in fact we were rejecting small stores reaching out to us since we only had very limited resources and needed to focus on supporting the chain stores). We started to setup the first self-serve freemium program in our industry, hoping to capture our daily inbound leads. 

At this point, we were at the end of our runway, and since we (or rather, I) couldn’t raise our Series A with the traction we had, we were in big trouble. Our existing investors however, were very excited and impressed about our progress and execution, so they committed a lot more money to get us to the place where we can close those other big chain stores that are excited to sign-on but still waiting on the bureaucracy. Literally, our current investors were at the point of, “Hey, what was the wiring information you gave me last time? I can’t find it anymore but I’ll wire you the money as soon as I get it!”

However, this is when the Big Burnout happened in our company.

The (Anti) Climatical Fall of RewardMe

Continue reading A CEO’s account of how his Startup Failed (RewardMe)

Black Hat Motivation within Fundraising (Gamification)

Fundraising GamificationBlack Hat Motivation within Fundraising (Gamification)

(Below is a snippet of Gamification Book: Actionable Gamification – Beyond Points, Badges, and Leaderboards. Please subscribe to the mailing list on the right to order the book when it launches. This post may be moved into a Premium Area after a certain period of time).

In the realm of fundraising, I regularly get approached by startup entrepreneurs who are looking for some support to help them navigate fundraising from angel investors as well as venture capitalists (I also get approached by many investors, but on an entirely different set of motivational challenges – mostly White Hat).

The thing about investors is that they are generally motivated by the forces of greed and fear. The force of greed – the intense desire to make a billion dollars (Core Drives 2 and 4); the force of fear – the apprehension of losing all their money (Core Drive 8).

At the beginning, the entrepreneur may promote many great attributes about the company, appealing to the investor’s sense of Core Drive 1, 2, 4 and even 5 if there is a good social proof. (Here you see the value of remembering the numbers for each Core Drive. Don’t worry if you don’t remember these numbers now, but just take note that they are mostly on the White Hat side of things.) The investor starts to show a lot of excitement, and the entrepreneur feels like the deal is sealed.

However, as the investor gets closer and closer to writing a check, the fear of losing all their money begins to preoccupy them, which is driven by Core Drive 8: Loss & Avoidance. They start to ask for more metrics, traction, and further social proof. Often, six months go by, and still no funding is committed.

From my personal experience, investors generally only close deals quickly when they are *convinced* that they will lose the deal if they don’t commit. If an entrepreneur *convincingly* tells the investor that a lot of people are already in on the deal, and if the investor does not act this week the round will be full, only then will they finally react. Black Hat creates urgency and closes deals.

When I was trying to raise $600,000 for my gamification startup straight out of college, I found the experience to be extremely difficult and sobering. We were a very young team, and this “gamification” thing seemed like a half-baked crazy idea.

After struggling for awhile to raise a modest amount of money to keep our small team afloat, we were finally able to secure $650,000 from three investors. At that point, I wrote an email to all our potential investors, who for over a year continually “wanted to see more” and “weren’t sure about this gamification thing.” I simply told them, “We are going to close the round, but thank you for your continuous (and non-existent) support!”

At this point, many of these investors who didn’t want to commit for an entire year suddenly responded with passion, enthusiasm, and even anger. “Yu-kai. I thought we agreed that I could invest this much money in your company. Why are you telling me that you are closing the round without me?” I was thinking, “Well, you kind of had an entire year to do that…” but they oddly made it seem like I was burning bridges if I didn’t take their money.

As a result, we tried to cap the round at $800,000 instead of $600,000, and we couldn’t do it. We tried to cap it at $900,000 and couldn’t. We tried to cap it at $1,000,000 and we still couldn’t. Finally, I capped the round at $1,050,000, while rejecting some investor money, just to show that we were serious about the cap. (I’ve also heard this same experience retold many times by other entrepreneurs.)

This illustrates the irrational power of Core Drive 6: Scarcity & Impatience as well as Core Drive 8: Loss & Avoidance (while also serving as a fine example of the limits of White Hat motivation). All these “potential investors” clearly liked what I was doing. They were encouraged whenever I gave them good news. They saw that it could potentially make the world a better place. But they didn’t acted until they saw that the deal was being taken away from them. With White Hat motivation alone, people will always be intending, but never actually doing.

For the curious, eventually my startup launched RewardMe, a product that gamified the offline commerce experience. RewardMe was performing eleven times better than the numbers our closest competitors published. (Sorry – since these companies are still in existence, I won’t cite sources here in respect to their current success.) Towards the end of my time there, we even closed a $1.5 million sales deal with a national chain.

Startups are risky, and the unfortunate thing is, just having a stunning product doesn’t mean a company will be successful. A few years after RewardMe’s launch, we hit a combination of personnel, funding, and legal issues. I stepped down as the CEO, and eventually the company folded. If only I had my Octalysis knowledge back then, many things would likely be different, which is why I am hoping my readers learn these elements on motivation before they run into issues in their own companies.

Fortunately, by stepping down as the CEO of RewardMe, it freed up a lot of my time to further study gamification, human-focused design, and develop the Octalysis Framework.

Today, even though my Octalysis Group organization is becoming busier and busier, I’m a lot happier than when I was running a technology startup. That’s because I am now mostly motivated by White Hat Core Drives, as opposed to the Black Hat Core Drives of constantly counting our runway before dying.

The Mysterious Case of the Startup CEO

What the **** is our CEO doing???

In the past 6 years of being an entrepreneur, I’ve had many small, private conversations with Startup CEOs, and I noticed a pretty interesting but common trend.  I initially thought this was more of a unique experience of my own and very few people had the same issue, but I started to see the same thing among technical and non-technical CEOs alike. I then realize it’s something that may be worth sharing about.

Often times, when I ask these startup CEOs about their roles in the company, they would sheepishly say, “Yea…so I’m the ‘CEO’ of the company….whatever that really means…” I’ve been in that mentality myself. It’s hard to explain what you do as a startup CEO, as everything seems pretty vague and does not sound like it tangibly makes the business more value. The only clear task that people actually credit their CEOs is “fundraising”.

But these CEOs unanimously say they work crazy hours. So what are they doing anyway with these hours? It’s somewhat of a mystery.

Continue reading The Mysterious Case of the Startup CEO

The First 90 Days of Being an Entrepreneur


In most people’s minds, the hardest part about being an entrepreneur is starting. That’s actually not true. Starting is the easiest part and it just requires you to get off your butt and start doing things. You only think it’s the hardest part because that’s the part YOU are stuck on.

For that reason, here’s a little guide to help you get over that “but I don’t know how to start!” hurdle, so you will have no excuse not knowing how to start your company.

Days 1-5: Decide to be an Entrepreneur and learn as much as you can about it

This is the day that you finally decide to take that leap of faith and begin a real life. Some people start this day by being laid off, but hopefully you came to this conclusion on your own terms.

Continue reading The First 90 Days of Being an Entrepreneur

Want a Real Life? Be an Entrepreneur


Living the life of an entrepreneur is tough. You work your butt off and get paid almost nothing for years, and the chances are you will fail at the end. Living the entrepreneurial life is definitely not the “easy” life.

However, in my opinion, it is the most fulfilling one.

I believe that being an entrepreneur is the best way to make sure you live a life of passion and adventure – a life that leaves you a legacy and stories to tell your grand kids.

The corporate life story

Lets look at a regular corporate life person. This person graduates from college, finds a job, gets married, possibly gets an advanced degree, has kids, advances in her job, gets old, and then there’s goodbye. That just sounds very unfulfilling to me, especially when you are working at a job you hate like most people are.

Sure, some people love their jobs, and I’m all for that, but most people settle for a job that they don’t like just because they are afraid of change and and slowly wait for their midlife crisis.

That’s when they buy their fast car.

Even for those of you who say you love your jobs, if you suddenly had $10M in your bank account, how many of you will choose to quit your job this week?

Yes, you might say that this question is unfair as you could say that about anything. However, I can tell you as a sure fact that lots of successful entrepreneurs who HAVE over $10 Million in their bank accounts keep going back to the torturous startup life because it is just too exciting and addicting to stay away from!

Continue reading Want a Real Life? Be an Entrepreneur