Yesterday, L2 released what looks to be the last of the Winners and Losers in the Digital Age weekly series on YouTube. The series started in late 2014 and was one of the more fun and interesting weekly tech biz follows. It was sharp, candid and took chances by way of its host, Scott Galloway. I probably shared it as much as I enjoyed it.
Here is the last video:
On a personal note, a friend worked for Scott at a few of his startups in the 2000s and randomly invited me to catch a drink with them both in L.A. in September of ’17. (Thanks, Johnny) I’d been watching since the beginning, so it was pretty cool to get to connect.
We all chatted over a few vodkas and I found Scott to be just as I expected from watching, albeit taller in person (people always say I’m shorter lol). There’s usually no faking it, when half the value of the YouTube series was his personal brand and delivery. I was not surprised, as it followed the pattern of other YouTubers that I had met previously in my other travels. No one is playing a Hollywood character, they are just themselves, but usually amplified. (yelling?)
Also, I believe that recently before our meeting, L2 had a great exit to Gartner. It hit my radar that Scott bonused his team in a meaningful way and made sizable donations to educational institutions that he believed in. Right on.
Lastly, I appreciated the part in the final video when he answered the question about what it feels like when people recognize you and tell you they appreciate your work. He said it feels great and then he ended by genuinely thanking the audience.
I can relate. It always feels great. The medium always depends on the support of a group of people who do care, offer feedback and appreciate what you have created for them. Thanking them is wise.
We’ll see if I can get Scott as Leia out of memory, though. That image could haunt me.
Find Scott weekly with Kara Swisher doing the Pivot podcast – which is worthy of the follow but unfortunately lacks the costumes…
Earlier this fall, a friend of mine and fellow founder in the moto industry asked if I’d do a Q&A for Dealer News Magazine. It was published surrounding October’s AIME Expo in Las Vegas.
Thanks for the opportunity to reflect on the current state of business in moto, Eric Anderson.
We’ll always have that Lufthansa flight from Frankfurt to Milan in the early twenty-teens. Remember, they stuffed me randomly into 28B next to you? You didn’t fit and neither did I. I still think you are as amazing as you are ridiculous.
Also, the views are my own. I’m not representing RevZilla leadership or ownership on this one.
=== BEGIN INTERVIEW ===
DN: Anthony Bucci says he was always a tech guy with a side hustle. “I have always been a brand and retail geek,” explains the RevZilla founder, serial entrepreneur and king of the online product videos. “There is just something inherently fascinating about the emotions and decision-making of consumers interacting with brands. It’s probably because I’m a sucker for a great story.” We are suckers for a great story, too. We had the opportunity to ask Anthony what he sees happening in the powersports world and just like one of his legendary YouTube videos, he was on point and chock full of insights.
DN: How has e-commerce affected the powersports industry… and the riding customer?
AB: Since the mid-1990s, eCommerce has affected customer expectations worldwide. Speed, price and selection have become table stakes in an arms race which, in some industries, has led everyone to the bottom. The customer expects more for less, generally — the benchmark is Amazon, which, unlike nearly every other business, is playing a zero- sum game. They have zero cost of capital and no current need for the healthy economics other companies live by. Good luck differentiating, beating or even competing with the ‘Zon in any category that is a utilitarian or less-considered purchase. Unfortunately other than verticalized brands and specialty categories, the eCommerce game is rapidly approaching maturity, now 20+ years post-dotcom inception.
All that considered, the US powersports industry is roughly 90% passion and 10% transportation. It’s primarily driven by a love for a sport that also happens to stand on the shoulders of highly considered and often expensive purchases. Bikes, parts, gear and accessories are not cheap and are often emotional purchases, as well. Powersports is specialty or “enthusiast” retail at its finest, which is one of the last defensible bastions against big discount players, including Amazon.
The industry’s moat, online and offline, is that the knowledge of how, what and when to buy things matters a lot in terms of happy and safe riding. Riders can always use a helping hand, online and off, if it eases the pain of not knowing what they really need. Alleviating that customer pain is the service that all retail, including eCom, can provide that creates value for the customer, earns their dollars, pulls the sale from Amazon and keeps customers loyal over time.
Great eCommerce that will stand the test of time will succeed the same way great dealers will stand the test of time, by being service businesses that facilitate their customers’ joy of riding by supporting them every step of the way. Customers have been trained to expect more generally, but within our industry they also expect knowledge, service, accuracy and customer care. If we don’t provide it, why wouldn’t they just buy from Amazon? I would.
DN: Have customer “standards in gear” been raised above where brick & mortar dealers had established quality/comfort levels?
AB: I’d say the customer expectations have greatly increased. Forums, social media, YouTube, customer service, eCommerce companies and brands have generally demystified potential gear purchases through expanded choice and customer education. I’d like to think my work at RevZilla was a part of helping customers evolve their gear thinking from “This one on the rack fits fine for today” to “What product is the right solution for my riding style, climate, budget, fit and safety needs?” and “Who are the reputable brands and why do they do what they do?”
In short, I think the loftier bar today is one part the evolution of knowledge creation and sharing in moto and one part the same evolution happening in all other categories of researched purchases, online or off. Customers that care are pretty savvy. It’s a virtuous cycle that benefits both the customer and the manufacturer because everyone has more information at their fingertips.
That brings standards up from both ends of the equation. The brands can’t hide or fake it and will be held accountable if they are not delivering on their promise.
DN: What’s the next big thing? Amazon? Mobile mechanics? Pre-owned bikes delivered to your doorsteps?
AB: Amazon is here and may never leave, so it does not qualify as the next big thing.
I believe the next big things in moto will be continued consolidation of customer attention, where retailers will continue to act like media and media will continue to try to evolve their monetization model to be more like retailers.
Manufacturers are also going to need to figure out how to provide more bike for the dollar while simultaneously finding a Cupid’s arrow for new riders that will actually stick. I don’t like the negative new bike purchase trends of the past two years and we all know the Boomers are aging out and have been.
On the tech front, I don’t see a need for a crypto token in moto, but I do see an evolution of customer expectations of buying everything, including bikes, in the most immediate, direct and frictionless way possible. Who’s going to do the Tesla biz model of bikes? I’m sure someone, but I hope it has a motor, not a battery. I still want to feel it, hear it and smell it.
DN: How can brick & mortar dealers do a better job on PG&A? Is that a never-ending battle?
AB: Be the best for your local customer. It’s a service business. Offer amazing service. Engage your local riders and become the hub for their continued enjoyment of the sport. Be the center of the local riding community. Listen to your customers’ pain and figure out how to alleviate it. Be the best in all the ways you can control. Know your customers.
Help your customer find the right product and then incentivize them to order it from you by adding value to the transaction in the form of a future relationship, not just a discount under the cheapest online price. Remember, eCom companies don’t just have websites. They have tech platforms that they enhance and optimize every single day. It’s the backbone of the business. It is the business. The traffic is higher, but the loyalty is lower than what a great brick & mortar dealer can deliver when focused on customer needs and customer pain.
Don’t play the eCom game, play the game you can win. Deliver joy and help to create love for your PG&A department. It’s the same equation as your dealership. It’s an old-school equation people still appreciate.
DN: Do brick & mortar chain stores like Cycle Gear raise the bar for “More of the Right Stuff?”
AB: As an owner of Cycle Gear by way of my stake in Comoto, I hope it continues to evolve in that direction. Before we became part of the same umbrella, the great team at Cycle Gear was working uphill against, in my opinion, mis-optimized inventory and a lack of operational support systems for a long time. My hope is the local Cycle Gear can be more of what I described earlier and less like the model of having the cheapest possible “house” brands stacked wall to wall, which is what we saw 5 years ago.
Great riders who want to help other riders have been the backbone of Cycle Gear for 40+ years. I believe the current owners, including myself, are trying to arm them with the right tools and untie that hand that someone else forced behind their back. If we can do it, everyone should be better off, starting with the riders in those communities and the staffs at those stores.
DN: Would a universal retailers association of all types of dealers benefit the industry? Should MIC offer a membership category for e-commerce retailers… and if they did, would RevZilla join?
AB: I think there is a lot of benefit in shared knowledge at all levels done appropriately. I can’t speak for current (RevZilla) management, but I personally see the value in it even if the only output is enhancing the industry’s collective ability to keep people enjoying the sport. I think the eCom guys have always been sidelined and that has been a missed opportunity. We (online players) see customer sentiment nationally, immediately and at scale which in my opinion can act as a powerful leading indicator for the industry.
DN: How can we — Dealernews, MIC, RevZilla, Comoto — raise the “tide” to oat all retail boats in powersports?
AB: Riding and bike sales are the beating heart of the industry. If people aren’t riding or buying motorcycles, businesses can do things right and still not be able to overcome that headwind. I believe that more natural consolidation may occur, fortunately, or unfortunately. I also think more of the leading brands that have relationships with their customers apart from the manufacturers need to work together to add value, enhance the customers’ experience and decrease the friction (and potentially cost) of owning a new bike. And that’s most important of all, especially if it’s a first bike.
DN: Do you see Millennials beginning to riding motorcycles soon… or do we need to wait until the next generation to try again?
AB: Millennials are a product of many things, but what they are not is the 1950s or 1960s male. They just don’t look at motorcycles the same way. They see life differently and in some cases through an understandably pessimistic lens. Riding needs to become more accessible for them and there will have to be something — a bike, a movement — which makes it more culturally relevant, accessible and cool, in a broader sense.
I don’t have a crystal ball. I know many, if not all, of the manufacturers, have been trying to crack this for more than a decade. My biggest current fear is what happens if we see another recession in the next 1 to 3 years? We could see an accelerated culling of businesses that have not found stability in the lagging new bike sales of the last 24 months. I hope not.
I’m an optimist. I think the powersports industry will figure it out, but when it does stabilize, like many things, the norms of then, will not be the norms of today. #fingerscrossed
DN: Is bigger better in this industry? What’s too big? Parts Unlimited? Tucker? Amazon? Was RevZilla/Cycle Gear the beast that awakened the Amazon mega monster to powersports opportunities?
Size and scale matter in every business. There is a value to big, just as there is a value to the smaller company’s ability to shift, change and execute more quickly. It’s all tradeoffs. Outside of Amazon, profitable revenue growth can cure many things, but we do run the risk of big companies feeling like they can get away with being “evil” here and there or potentially biting off too much and getting sideways. We’ve seen both in our industry in the past decade. It cycles, no pun intended.
Regarding Amazon, they have been “woke” (speaking Millennial for a second) for more than a decade, nearly two. Bezos is a terrifying super genius. Motorcycle eCom Anthony fears, hates but respects him. Business Founder Anthony thinks he is amazing in a way that few have ever been. I’d like to think RevZilla’s presence staved Amazon off in a tenuous time, post-recession, when they could have siphoned the lion’s share of online sales very quickly while offering much less service, knowledge and content value add, but probably with the same price. That mass-market online consolidation, which can crush the manufacturing and retail landscape forever, has happened in so many other categories.
In my heart, I do believe we “did good, by doing good” in the sense that our conversation with all of our brands was always, “How do we do more for the customer together in the medium to long-term and allow riders to get more for their moto-dollar?” I think our model, with the support of so many brands that were willing to think new-school, allowed the industry to raise the bar for what’s expected for online shopping in moto and create avenues for more customer satisfaction and value beyond “Well, it’s cheap and Prime-able.”
Healthy competition always benefits consumers in the long term and transparency for consumers is only increasing. The same things apply to Comoto and the other larger players at this point. There is nowhere to hide if big guys decide to stray from their brand promises just as the discount mass market of Amazon, Walmart/Jet and the rest is always ready to pounce.
DN: What are your thoughts on Harley-Davidson’s stock situation, introduction of smaller models like e-bikes, the FXDR street fighter and the Pan American Adventure model?
AB: Try new things until you can get your balance sheet healthy and stabilized while still trying to figure out what’s going to get the Millennial off the couch, or iPad for that matter, and riding a new (or used) bike. Not evolving and challenging your accepted norms is giving up, even for the Bar and Shield. I applaud the Live Wire, small cc bikes and other jolts to the expected HD approach.
DN: Would you share what you are thinking of doing next?
Right now I’m kissing lots of frogs in an effort to be openminded to what next large opportunity may move me – in or out of moto. No good kisses to report yet. In the interim, I am angel investing and advising a handful of companies while also doing some non-profit work with the Tony Hawk Foundation and pro bono exec coaching. I’m having the most fun helping founders and CEOs grow and intermittently jotting down some of my leadership nuggets on my blog.
The other half of the time is a prolonged moment to enjoy my wife and young family in a way that was completely foreign while leading RevZilla. The business always came first, until one day it didn’t. Reflecting on one’s lifestyle while transitioning into a very different one generates great perspective. A little bit of space also allows you to finally appreciate what you have created along with all the amazing people who did it with you. The goal is still the same. Always keep moving forward but be able to look back fondly.
“Anthony’s opinions in this article are his own and he’s made it clear he’s not speaking on behalf of RevZilla management or the board.”
=== END INTERVIEW ===
That was like giving birth, right? You get a gold star for finishing it.
In the war for VC content marketing supremacy, I have to believe First Round Capital is operating near the front of the pack. Between their videos and written word juggernaut, First Round Review, it’s a strong offering.
From the outside, the VC game looks like a competition of value-add. It’s a service business. FRC is building their brand by giving something away for free (content) to “sell” something related (money), among other things.
As famed Apple marketer Regis McKenna once said, “The best marketing is education.” I obviously approve.
I was second screening a few nights ago, on Youtube with the Eagles game on in the background and I stumbled upon this recent FRC upload. It’s a 25-minute talk from their CEO Summit focused on Company Growth Frameworks, given by former Facebooker, Twitterer and current President and head of Growth at Wealthfront, Andy Johns.
Here are a few things that jumped out at me that make this worth the watch.
Growth Framework – Andy discusses how to systematically construct the growth framework for any business, using Amazon as an obvious example. It’s something many of us do implicitly, but it was insightful in the way he walked through what most of us would call the “levers”. This goes beyond Conversion Rate, Traffic and Avg. Ticket, although they are expectedly present in the middle of the chain.
Magic Moment – Beyond marketing channels, he speaks to the “Magic Moment” that wows the customer, creates a real impression and sets the hook for a potential future relationship. For RevZilla, this is when the customer says, “I can’t believe the knowledge, service level and seamlessness of shopping here. How do they do this?” as they compare it to their other eCom experiences. For goPuff, it’s when the customer says, “I placed my order, went to the bathroom and the driver was here when I came out? How does this exist in the world? Game changer.” For Five Below, I’d imagine it’s when a mom and kid walk in and kid says, “All this stuff is awesome” and then mom says, “Umm, all this stuff is awesome”. The point is there has to be something more than memorable for the customer, if you want a chance at making a real impression and your marketing dollars affecting more than a single transaction.
Value Creation – Andy also speaks to the fact that the business has to create value for the consumer. I’d describe that by saving them time, offering a solution, creating a source of joy, relieving pain, etc. This is about value creation for the customer beyond the transactional of what they need in that moment. Why is the product or service indispensable? Why does the customer actually need the business in their life?
Testing – This is a loaded topic in so many situations with both junior and senior people often having inappropriate expectations of methodologies and results. There is great insight in this section on the big company compounding approach vs smaller company curveball tossing. He also speaks to the push and pull of “test everything” vs “build what we know is right” cultures in which balance is usually the best dynamic – because you know, the left and right brain people always get along, right?
Evaluating the Growth Leadership Hire – In one of the last notables, he talks about the patterns, experience and skill that comprise a great growth leader, coupled with the fact that these hires need to be empathetic product execs at heart, not the run and gun growth hacker archetypes. This is a nice wrapper around the last two points and a great bookend.
The Eagles won, but I was even happier to make it a more robust use of my time. Thanks for the free milk, FRC.
I was recently asked, “How do you approach the conversation of innovation within a company when you are a board member vs the CEO?”
First I think I have to start with the board member distinction as it’s a meaningful one. I usually describe the board role to be more like “grandparenting” versus the “parenting” role of an operator. When you are the CEO, you are the parent of the org. You are hands-on and accountable for the totality of results. It’s your team, your baby, your strategy, albeit with a lot of extra helpful hands on the wheel. You are appointed and held accountable by the board of directors.
As a board member, you are a grandparent of the org. Your value-add, beyond that of governance, is not to pull operational levers or to try to do the parents’ job, but to share your stories (hopefully not the same ones all the time), which can highlight perspective and experience so that the actual parents (CEO, ELT, etc.) can make better and more informed decisions. You hope they potentially avoid some of the less obvious pitfalls that you may be able to inform them of, but you acknowledge that the decisions are theirs. You hopefully also acknowledge (realize) your business is or was different from theirs.
Relating to the topic of innovation itself, I think this is still very straightforward. It’s still an exercise in creating new value for the company and I still approach the framework in the same way as I would as a CEO. I would ensure the following questions are addressed in a constructive way although, from experience, the process is usually not this structured:
Customer Insights and Value Map – Do we know enough about the customer to invest our innovation dollars in places for more certain return or the most efficient payback period? If no, can we invest more to learn more? If yes, have we ranked the macro roadmap by a matrix of 1) resource and time needs, 2) value realized or risk mitigated, and 3) time period before we realize the impact of our work? This is a shorter lens conversation with hopefully the lightest lifts with the biggest impacts and shortest payback periods bubbling up. I’d also probably call it an investment framework vs an innovation framework, but these insights are useful to 2 and 3 below, as well.
Saturation – Where are we on the saturation time curve with our current products or services? Do we need to invest in innovation in places which will augment or displace our current revenue streams in the medium to long term? Are current revenue streams becoming more efficient or deleveraging? Many times it’s hard to place a couple new bets each year with 2-to-3-year payback periods, but the best and most robust companies get over the pain of the investment window and make the new investments happen to ensure their businesses are not focused solely on incremental wins. Many do not, especially if they are held hostage by quarterly guidance or current underperformance. As a side note, at RevZilla we continually expanded our offering structurally with new products and segments in the market, but on my watch, we never had to dramatically change our model outside of spinning up our own vertical brand(s).
Disruption – The last question I ask is the silver bullet question or the silver bullet question in reverse. “What’s the silver bullet or innovation that would kill us?” If there is a clear picture of what actually could be disruptive to the current model, a great conversation is a debate about the pros and cons of disrupting ourselves before someone else does. The other way you could view this would be to ensure your industry is not at a strategic inflection point a la Andy Grove’s book, Only the Paranoid Survive. If you had a silver bullet you should know which company to fire at. If you don’t obviously know the competitor to shoot, your industry may be changing around you faster than you are keeping up. You have to watch for that as well.
Essentially, the three questions are: “What do we know about our customer and our potential short wins and how have we prioritized them?” “What should we do about saturation and the medium term?” And “What can kill us and should we kill ourselves?”
The best board conversations on innovation and beyond focus on questions driven by strategic “whats” with a dash of “why” sprinkled in.
As a board member, I’m hoping to help illustrate a more complete equation for the management team in a way, again, that can augment or further inform their thinking. I’m hoping we ask hard “what should we do” questions, share experiences and review all intellectual capital in the room.
I’m not, however, advocating for generating consensus or making strategic choices for the CEO.
Someone once told me, “Smart people typically make the same choices, so long as they are looking at the same facts.”
Great board work should offer a better chance to expose the most useful facts for everyone to debate. Hopefully, the best decisions can then be made by the operator(s) who are accountable.
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.
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.
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.
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
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.
(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.
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.
