Month: November 2018

  • The Last 10%

    Lately, I have talked about “the last 10%” in a bunch of conversations and interviews. Most notably I referenced it while speaking about B2C competing with Amazon and the mass market.

    This is a nugget I loved when I first heard it and I’ve kept it part of my decision-making framework for some time. Generally I think about “the last 10%” as the things that are left after “the first 90%” of things that everyone does, get done.

    I also think about the concept in terms of customers and customer experience, but believe it can be applied more broadly.

    I wanted to expound upon it a bit here, channeling my inner Seth Godin in doing so:

    The last 10% are usually the things toughest to scale.

    The last 10% are the things a company can do when it truly understands its customers, market and their respective needs.

    The last 10% usually centers on service, nuance or originality.

    The last 10% can only be identified if you’re really listening.

    The last 10% is what Amazon can’t / won’t do because they serve everyone with every widget instead of participating in-market and more narrowly with segments of users.

    The last 10% are the things that the outsiders, spreadsheet-ers, short-sighted, mass market or uninformed may call “diminishing returns”.

    The last 10% are the things that amaze your customers because they can’t believe you actually do them.

    The last 10% are the things that show you care consistently and will go the extra mile.

    The last 10% are the things that are still supposed to happen, even when no one is looking.

    The last 10% comes from proprietary insights or “secrets” that your customer may tell you but most likely only show you with their actions (data).

    The last 10% focuses on value creation, not value extraction.

    The last 10% improves your CAC: LTV over time, but probably not tomorrow.

    The last 10% is like compound interest.

    The last 10% is the magic that will make your customers vote with their credit cards, love you, stay loyal and tell their friends.

    The last 10% is how you build a brand or a cause, not just a business.

    The last 10% is what separates the truly remarkable from the merely great.

    The last 10% of things are very hard, but pay off in the long run.

    PS –  You could change a few words here and this entire post could be about people. Specifically, how great managers manage and great leaders lead. Maybe I’ll do that next week.

     

  • Management Quick Reference Guide

    I find myself talking management and ops a lot. I talk about it here, a lot. Some of it you have to learn on the job and some you can quickly digest and adapt (steal) from other places.

    This is my management quick reference guide from some of my favorites. I send this list (crash course) out often and wanted to clean it up and share here with a bit of texture.

    Whether you’re just starting out, in the middle of your management or exec journey or you have lots of battle scars, there is something on this list that will make you better.

    At some point, I’ll pull these out into individual posts and highlight the best nuggets, but for now, why wait? Add them to your war chest or quick reference manual.

    Videos 

    How to Operate: Keith Rabois – One of my all time favorites
    https://www.youtube.com/watch?v=6fQHLK1aIBs

    How to Manage with Ben Horowitz
    https://www.youtube.com/watch?v=uVhTvQXfibU

    The entire How to Start a Startup Class Playlist is amazing. There are 20 videos on various topics, roughly 45 minutes long each. What the hell did founders do before the internet?

    These are high leverage, easy watches.

    MBA Mondays

    I’ve been reading Fred Wilson (avc.com) for the better part of a decade, if not longer. He used to insightfully post on a meaty topic every Monday until, after a few years, he exhausted his list. He continues to be one of my fave VC reads on the internet and the usefulness of his posts, like the “X / Y Axis of Giving Feedback” and “Asking an Employee to Leave the Company“,  will live on probably forever. They all helped me a ton as I was trying to stay ahead of the demands of fast growth, high change management.

    Full MBA Mondays List Here

    Books

    Traction  – Once when I was in the messy middle of trying to evolve my management framework from startup to grown up, someone said to me, “You’ll eventually figure it out, but remember, there is no paint by number system”. I believed that, and went about amalgamating nuggets from a multitude of sources until a fellow founder / CEO, Dan Roitman, put Traction on my radar.

    Vision, mission, values. Strategy, goals and ops. Alignment, frameworks and outcomes. It’s a comprehensive mix of theory and tactics for managing a high performance team and company. Read it cover to cover or hunt, peck and steal from it. I wish I found it in 2009. The Level 10 meeting chapter is especially useful if you want to start with a useful tactical pillar and work outward. #middleout

    Get the Traction Book 

    Principles – Ray Dalio – I’ve written about this before. This is the management bible from one of the best. It looks like a bible and should sit on every CEO’s nightstand to read from and prayed with often. I have a friend who runs a huge agency who actually does just that. Don’t be offended by my referencing the church of Dalio. It’s that good.

    His story is fascinating in the first third. The second third, Life Principles, should be read by every single high school or college age kid at the beginning of their journey. I give it out as all grad gifts at this point. The last third is Work Principles, which he puts forth as a reference guide, but it’s as compelling as it is useful.

    Get Ray Dalio’s Principles

    (BONUS) The Hard Thing About Hard Things – Remember Horowitz from the Video section? I call this book a bonus, because it’s great for two things but not necessarily the essential read if you have hit the other stuff.

    This book is great for expanding your exec toolkit and crafting a more nuanced managerial playbook. It’s also great if you are reporting to an executive and you’d like to maximize your ability to manage up. That said, there is an adversarial tone to his approach and I’m of the opinion that you can be just as effective, wartime or not, with a constructive communication and leadership style – so long as people are listening.

    If you are on the fence about THTAHT and have the bandwidth. Read it.

    Get The Hard Thing About Hard Things

    This isn’t the first list like this, and it won’t be the last.  My friend Tom, an excellent executive, mentor and RevZilla board member, once told me, “Remember, you don’t have to be bad to be better”. Even if you know a lot, you can always improve.

     

  • $1 to Spend

    I used to say that if I only had $1 to spend on my business, I’d spend it on customer experience, vs marketing. I actually think I stole that from Tony Hsieh of Zappos about a decade ago – and it held up for a long time.

    The thought process was “Why pay for more customers to enter into a suboptimal funnel when you could spend to make that funnel better for them, and in turn have a better chance to make them love you for the long term?”

    The point was to compete on value-added service for the consumer and have that layer become your company’s differentiation when compared to more commoditized approaches (mass retail, Amazon, etc.). Build your brand and defensibility around an amazing experience.

    Recently, I was asked that question again and while I still hold what I’ve previously said (or stolen) to be true, I gave a slightly different answer in these later innings of the consumer web.

    Today, I’d spend that dollar on learning about my customer. I’m less focused on WHAT we are improving for the customer than I am about learning WHY the customers are doing things and what they are trying to accomplish.

    It’s a move upstream. What are the customers’ needs, wants and pain and what’s driving them?

    Those are the non-obvious proprietary insights or “customer secrets” that you can use to build a product, service, brand, experience and/or company that are compelling and defensible. That data is more valuable than something incrementally more sexy or useful to meet their needs today. That data is the foundation of your moat for tomorrow and beyond.

    Your company is only as good as what it knows about its customers that no one else knows. In this age of measurability on nearly all fronts, the company that spends the time to piece together the less obvious story lines is the company that will own the customer. With proper execution and a continued customer obsession, that company should win.

    Steve Jobs was famous for giving customers things that they didn’t know they needed. He was a tastemaker, product builder and artist who also (like all who are successful) happened to have great timing. He also flopped on the Mac, the Lisa, NeXT and so many other projects that he “birthed”. We should all eliminate as many guesses as we can. Jobs’ hit rate was rough, and he was the legend.

    Listen to your customers’ words, but more importantly measure, observe and mine their actions. Only then can you begin to own the relationship with them by building what they need and, hopefully, monetizing their trust and attention for the long haul.

  • Speaking in Tongues

    Yesterday CNBC tapped me to join a conversation on eCom defensibility in the age of Amazon on the show Fortt Knox. A bit of an oxymoron, but fun to wax on nonetheless.

    I was joined by Jon Fortt, Chegg CEO Dan Rosensweig and Nadia Shouraboura a former Amazon exec and biz founder in her own right. The conversation was focused appropriately on customer value creation. I found it amusing that Nadia tried to insert Amazon as a force for good / friend of the retailer, but managed to take a deep breath and let it slide 😉

    Always fun to do something new and if you didn’t pick up the reference, Speaking in Tongues is one of my fav’ Talking Heads albums – and if I wasn’t before, I guess I’m a non-moto talking head now too. #dadjokes

     

     

  • Chamath’s Investor Letter

    Chamath from Social Capital released his first annual letter a few days ago. He’s had a long and storied career, lately as a VC founding Social Capital, and previously spearheading acquisition for Facebook. I’ve been following him for some time. Google him for more.

    There were many notables in his ~15-page letter covering topics from investor returns to the current state of VC to their views on AI and their future investment thesis in light of these “later innings” of the internet.

    This is one of the early nuggets that jumped out at me from the piece:

    Said more simply, Big Tech will get bigger and will leave less room for obvious companies
    doing obvious things. The demands of innovation are going up, and the quality of the ideas and
    teams working on those ideas matter now more than ever in this David v. Goliath landscape.

    The issue of big tech’s consolidation he speaks to is real. We watch it every day via many proxies. The FAANG moats get larger while customers supposedly get more for their dollars now and most likely less in the long term.  Many great companies will continue to die on the treadmill next to their outsized and overcapitalized foes.

    I continue to be concerned when I think of macro issues like Facebook owning and monetizing this age’s “town square” while Facebook and Google’s combined ad duopoly continually raises acquisition and reacquisition costs for digital customers. Amazon is also playing with free and unlimited capital for the annexation of everything valuable well beyond B2C. And don’t get me started on all the issues with software patents, IP and closed systems like Apple, which make it harder for the next wave of startups to find an early foothold by being “taxed” from go on multiple fronts. I don’t know if regulation is the solve, but there is certainly a fair amount that’s broken or breaking in today’s tech landscape. #exhale

    On the topic of Innovation, I’d agree that everyone will need to spend more time, money, effort and energy to actually find durability. The easier or “more obvious” wins are neutralized in months versus years or let alone Drucker’s decades. And big tech’s gravity for attracting the true A talent needed for real innovation is only becoming harder to overcome.

    Back to Chamath’s letter – this is the view of one man, albeit a smart and experienced one, on where the puck is and is going. If you play in the digital world as a consumer, employee, leader or potential investor, you will at least expand your perspective via this quickish read.

  • Value Over Polish

    This week was Halloween, and as is normally the case, friends and OG Zillans occasionally text me magical video nuggets of yesteryear.

    At the end of this post, please see two absurd RevZilla Halloween Deals videos from 2010 and 2011 respectively. They have bad light, bad sound, bad jokes and bad dancing. Our table was also way too low so in every shot is a product and my fly behind it – well, when we’re not putting an intern or our 80-year-old landlord in a costume, at least.

    These early videos also contain honesty, perspective, a unique voice and curated product information in them. At the time, that mix of information and value could not be found elsewhere in the online motorcycle aftermarket.

    Over time, to find the right video positioning and ultimate sweet spot for conversion, trust and brand development, we tried a lot of things that were quick and cheap, knowing if customers revolted we’d take them down.

    It was the internet and while our jokes may have sometimes been funny only to us, no one was really offended. If anything, our customer base applauded us for taking chances and being us, even if we got it wrong or they didn’t get it. A great side effect of some of the most bizarre was that customers would say, “I feel like I’m part of your inside joke, even though I don’t get it.” Brand equity built, albeit from a different angle.

    I actually can’t remember ever taking anything down except for an early video at a FBI shooting range and a Cinco de Mayo deals video which in hindsight was not appropriate. Maybe 2 videos out of thousands.

    My point in all this is that as businesses scale, managing polish, professionalism, voice and production value become important things, especially when you have teams that are accountable specifically for those actual functions.

    Be careful though, that polish doesn’t get in the way of moving fast, iterating quickly or launching things that may be rough proofs of concept that ultimately lead to major ah-hahs down stream. Sometimes you have to place off-kilter, half-baked or riskier bets, knowing that it’s the necessary cost of R&D for future upside.

    Playing it slow, safe and polished is what some incumbents do. And they are the ones who are sitting ducks, just like they were in 2008, when we showed up in Moto and pressed record with our “loose” script.

    Most importantly in my experience, customers will always forgive production, polish or presentation issues so long as the value of the information they need or want is there. They will keep watching, root you on and hopefully tell you to “raise the table away from your pants” lovingly in the comments. They are your feedback loop. Make sure you’re listening.

    All that said, now please enjoy 2010’s RevZilla Halloween Deals tour de force as well as 2011’s Halloween dancing intern. The legendary Akash, patriarch of the RevZilla intern family tree.

    Pro Tip: If you only click one of them, click the second one. #amazeballs

    Thanks Taylor and Chomsky for the inspiration on this one.

     

     

Close