There are 2 incredibly tough aspects of starting and running a business and they are both related to time under tension.
In my life I have not found anything more challenging or stressful than voluntarily starting a business. It is also the most rewarding — but that comes later and always seems to be fleeting before reality crashes in again.
To succeed here you need to build entrepreneurial muscle. This is not a natural act so when we start we are basically all flabby. An idea and a statement of intent does not mean you are in shape to handle the task ahead. Being an entrepreneur IS a muscle that builds over time under tension.
When you use that muscle for the first time and realize it is there, it becomes something you flex for a lifetime. Putting time under tension here is part of your long game. Baby fat be gone, you are learning how to build a business one ripped fibre at a time.
Once you are waist deep in the muck you will experience the other, more visceral, aspect of time under tension.
This is where the real development happens.
Weight lifters use the time under tension strategy to spark muscle growth by slowing down their lifts in order to keep their muscles under stress.
Entrepreneurs are subjected to time under tension as the business requirements grow and the pressure to succeed increases. We are always under a form of pressure regardless of the stage of company. It is a constant and, subjected to it long enough, that muscle grows allowing you to carry more without your legs buckling.
When you get right down to it, success or failure in startups, or entrepreneurship, or business building comes down to how long you are willing to stay under that tension.
Scaling a company does not only mean revenue growth or geographic expansion or hiring or automation. It also means process and management and product diversification.
Early on, the first group gets you leverage, the second group gets you fat.
The most important balance in the early days is to not get in your own way of growth. There are so many false/positives in earlier stage companies that when you think you should add a process, hold off until it is obvious you should have done it months ago.
2 years into my current company we had a clear vision for the product and had determined that we were in need of a product manager to guide us. We promoted from within and set them on what we thought would be the path to product success — for them and the company.
We quickly realized we were WAY too soon for this role.
We almost immediately ran into conflicting processes — we needed to still be moving at a pace that was in conflict with a product management process and methodology. We were still finding our way, our product/market fit and adding a layer and strict process slowed us down to a frustratingly slow pace.
We were not ready.
There are countless moments at this stage in company where you may think you should automate or add process or delegate. Make sure you are doing it for the right reason — to unlock or unblock growth or people.
It particular, hold off on adding fat to:
Email <– personalized won’t scale but it is how to establish trust. Templates are lazy at this stage.
Product <– no one knows your product and your customer requirements better than you. Don’t distance yourself from this too soon.
Marketing <– Grit and grassroots reign supreme over templated initiatives. Visit, call, email, connect instead of broadcast and hope.
Sales <– Lose the generic patter — you see through it and so will your own customers. Remember why your company exists and put the effort into helping your customers see how you can help them achieve their goals.
We ALL hate receiving generic responses or sales pitches or products that look and taste the same. The companies doing everything the same way have become burdened by process. Trim your fat, stop tipping to laziness and put the work in to stay that way for as long as possible.
To build a startup has no equal when it comes to pressure, strategy, proper execution and hiring (not recruiting — hiring). There simply isn’t a similar experience anywhere.
After product market fit, hiring is the next most important thing to get right because the first hires will always be unique in the history of the company. They will be asked to do things they are uncomfortable doing, they will be stretched to their stress limits, they will have to work with speed and ambiguity and do it all for the potential of a hefty upside while taking home very little actual pay.
The tendency is to paint a picture of a family coming together. The trenches have a way of seemingly creating this familial bond amongst the early team. I look at the first group of misfits at this stage as a team and here’s why:
– YOU choose the team. – The team has specific skills your company needs. – You may have to let someone from your team go. – Your team is aligned with the goals of the company. – Your team will weed out the weak links.
To go into the startup arena hardens the entire team — it creates a bond that is special in business. The sense of accomplishment and triumph pulls people together. This is part of the startup culture, the team grows together. It breaks down when the company succeeds and that familial bond can’t stretch to new team members. This ends up holding people back and causing stress on them and the company.
Most people don’t switch families every 2 years but it is common for teams to shift as people outgrow the company or gain new skills. As founders and operators our goal is always to find the right combination of people to move everything forward — imagine having that conversation with your family…
Profound change happens in a startup one dollar at a time and it is a founders job to make sure that stays in focus.
I still wake up every day amazed at the entrepreneurial possibilities that have unfolded over the last 20 years. It’s never been easier to start something new but it’s never been harder to contain the breadth of the idea to see it through to a business.
Great operators know that a business without focus is a doomed one. There needs to be a relentless fixation on the problem they are trying to solve and for whom. I frame it as remaining as close as possible to the dollar.
Staying close to the dollar means really understanding what your ideal customer will pay for that helps them solve a real problem right now. Business is not complicated: Other companies have a problem that needs to be solved. You have devised a way to solve it for all of them.
The focus muscle comes in when you have collected that first dollar. The temptation is to branch from your core and try to solve another problem for the same customer instead of finding more customers that have the same problem. This is where startups fail.
Three really relevant examples come to mind around focus — these are things that I see companies doing too early and at their peril.
Expanding too quickly into new markets (that could be new cities or new verticals)
Building features that are only impactful for a small percentage of customers
Spray and pray marketing initiatives
The closest path to revenue is selling your existing product to more customers. The focus and discipline it takes to do this is what differentiates great operators and companies from the rest.
Nobody makes a purchase after 1 call. It takes seven (ten? twenty?) interactions to create some sort of brand awareness. Kids need 5 wake up calls before getting out of bed.
The hard truth is that things don’t happen by saying them once…or twice…This is as valid in business as in the rest of life.
Startups move so quickly that things often get overlooked, forgotten, deprioritized, re-evaluated or simply disregarded.
Operationally exceptional startups focus on easy to digest priorities and then set them on repeat until they are part of everyone’s conversations.
It is not good enough to write them down, talk about them once in a meeting and then assume everyone understands and will execute.
Repeat them everywhere. Repeat them every time. Repeat them until you hear them coming back to you from everyone.
The best advice I’ve ever read about starting a company is to not over-engineer the offering.
I think of startups as rockets trying to get into orbit. The challenge is so complex that most don’t even make it to the launchpad properly ready for launch.
To get a startup 1 inch off the ground so many things need to go right. It needs to be built for purpose, proven in the market to make a different to someone, fabricated (or coded) to work, packaged, sold and shipped.
Building too much, too soon is the same as trying to move a rocket with less fuel than required.
Building too little burns out before reaching the needed velocity.
Physics and friction are constant drags on a company’s velocity and nothing is more important than getting the mix right for that first inch of motion.
The hardest part of early startups is how to clearly know if you’ve found product/market fit. It’s an elusive term with even more elusive definitions — only really understood when you actually find it.
I’m so tired of trying to “be the aspirin, not the vitamin” thinking, it is killing ingenuity and innovation and the messy part of being an entrepreneur. This truth is that building a business is hard, it’s dirty, it’s lonely and every thing is stacked against you. It is unconventional to want to do this and it is next to impossible to get right.
Being perfect is not an option. Stumbling in the dark, blindfolded but finding your way is where most of us end up. But that’s ok.
I like to think of business building as looking for a hole and trying to fill it. Thinking this way means you are looking for an existing problem in need of a fix — instead of wasting time building something no one needs now. It also makes it clear that this journey will not be easy.
It’s not fancy but neither is building a business.
When a startup moves to scale up, the biggest blocker happens to be the people that actually made that happen.
Early leaders that don’t build for their future team are doomed to becoming the leader that “got them here but won’t get them there.”
Moving from a doer to a delegator means knowing that the work may not be done the way it was intended right away. The work may suffer. It may take more time. But more work will get done once the responsibility of ownership is shifted.
This transition doesn’t mean that quality should suffer long term — never settle for “ok”. This transition doesn’t mean the abdication of responsibility — outcomes are still owned. This transition doesn’t mean it will work with the current team — leading means monitoring and adjusting constantly.
The hardest thing to do is to trust that the work will get done without you actually doing it. The worst thing to do is make this leap and fall back to old habits because it isn’t happening fast enough or the way it was done before. Have faith in the team, give it a time limit, don’t revert and always move forward.
Stalling at this moment most certainly is the inhibitor to growth and for a company at this stage that cannot happen.
On March 17, 1845 the elastic band was patented by Stephen Perry.
179 years later a simple use of Perry’s invention makes for a powerful example of customer service.
Have you ever bought blueberries — or any berries — from a grocery store only to get home to find them free and loose at the bottom of your grocery bin?
One of my local grocery chains has solved this with a simple elastic band, wrapped around the plastic berry container. Problem solved. No crushed berries, no spillage.
This small attention to detail at checkout won’t change the world but focusing on things like this will change your business.
Balance in a startup has nothing to do with work or life.
Balance is the time between an ask and an answer. Balance is the moment between realizing a strategy isn’t working and what’s next. Balance is knowing when a person is not a fit and having that conversation.
Balance in a startup has everything to do with progress and action.
Do you know when you are going to die? To most of us, the answer is no (unless you’ve been to the crossroads like Jimi Hendrix, Kurt Cobain and Jim Morrison).
For startups the answer needs to be yes.
A startup has one foot in the grave the day it is born — and it stays that way until it graduates to becoming a business or the other foot drops.
At the startup stage a precise death date is easy to figure out: Take what’s in the bank, what’s coming into the bank, and subtract what’s leaving the bank. That gives a simple runway and when the runway runs out, so does the startup.
Personally, I like to share this date with the entire team for 2 simple reasons: (1) It level-sets to where/what we are as a group. (2) It (should) motivate the team to focus on the most important/impactful things.
No one in a startup should be surprised if things don’t go as expected. A death date brings unbelievable and ruthless focus — also known as the discipline a startup needs.
His wife was a week away from giving birth, she was unemployed and I had to lay him off because I didn’t see the obvious.
It was 2009 and I was the CEO of a small software company and we were starting to feel the effects of the banking crisis. Our top customer was a bank and they were slowing their spend, reducing their team and that was hurting my business.
I thought, like many inexperienced younger CEOs, that it was my responsibility to shoulder and shield. Shoulder the weight of the crisis and shield the team from the reality. The opposite is true. By keeping anything from the team it robbed them of their ability to make any decisions — especially about their own future.
When I finally explained our situation to the team it was too late to save 7 employees, including the soon-to-be father. After the dust settled and the wounds were healing, the remaining company took me to task for not letting them be a part of the solution. They were there for a reason. They believed. They just needed to be included in the good and the bad.
Laying people off because of something out of your control is one thing. Doing it because you didn’t adjust is something completely different. It took me until that day in 2009 to realize that business is not a solo mission.
There is a misconception that you work FOR a startup. This gives it a persona as though it is a real business — one with process and hierarchy and a cadence that allows everyone to breathe. This is simply not true.
To be a part of a startup you need to think of yourself as a group of renegades trying to prove that the idea — whatever it may be as the sands shift beneath everyone — is something WORTHY of becoming a company.
You don’t work FOR a startup, you work ON a startup.
The business of baseball and the business of technology are, in many ways, alike. Both types of organization are trying to assemble a balanced but elite team that ultimately dominates their industry. Each pays the “appropriate” amount for the talent that could get them there. The simple difference is the number of humans that can hit an 84MPH curveball after seeing a 100MPH fastball or throw that 100MPH fastball are scarce. That makes them a sought-after prize. Where else can you get paid an average annual salary of $4.41 million?
Compare those elite 975 employees that play for the 30 Major League Baseball teams to the millions of tech workers on the planet. At one point, their skills were needed – necessary even — and they were swallowed up into companies like DoorDash, Twitter, Facebook and Shopify. Assembled into teams, paid well in cash and options and sent on their way to help contribute to the success of the company.
The biggest difference is their approach to winning:
Baseball organizations — for all their faults — have a recruiting process that mostly works. It limits the number of players in the pool and, each year, forces ball players to be better and better to achieve stardom. Tech casts a wide net, over-hires and hopes.
Baseball nurtures their talent if you make the cut. Tech cuts the talent when times are rough.
Baseball builds teams with a cause but are only allowed a certain number of people per team. Tech hires everyone and hopes.
Baseball doesn’t lay off their team during an economic downturn. Salaries don’t go down. Ex team mates don’t share condolences on LinkedIn for other players who have been fired. No docs circulate with “great and talented” people for consideration.
You see where I’m going here — it may be far-fetched to compare baseball teams and tech companies but how can we be ok with 10’s of thousands of people being considered “extra” to their companies and being laid off? Without remorse. Without penalties. When a baseball team fails to live up to their promise, the leaders get fired. How do we not hold up our tech leaders to this standard? While it isn’t criminal to hire too many people, it is a complete failure on the management that did this. Think of all the wasted time, money and effort (and more money on gracious exit compensation) all for zero value to the company?!?
Over hiring can happen but if you have to fire over 88000 people collectively in one moment to correct it, that is not over-hiring, that is bad management.
Can you imagine your favourite team, in any sport, reading the Wall Street Journal and then deciding to fire 13% of their team like Facebook did in 1 day? Nope. The behaviour of boom and bust that we’ve become accustomed to in tech is NOT normal but we’ve normalized it. How can we accept that humans have become the collateral damage of bad management?
I always take a window seat when I travel on an airplane — even if it means denying my kids that very joy. I love seeing the grind of the plane as it rolls down the runway, lifts off the runway and barrels towards the heavens as the earth gets instantly smaller. It is never lost on me — the miracle of flying is so cool.
There are those days, tho, when the plane is sitting in the middle of a rain or snow storm and the windows are thick with precipitation and it’s cold and dark. These ascents are the bumpy ones and I always think “this is what’s it’s like to be in an early stage company.” <– really, I do.
Let me explain.
Early stage is hard. Not just notionally hard, I mean physically, emotionally challenging. The kind of stress on the system that is unique and acute. Going through those early days/months/years is akin to that plane barreling down the runway in a rain storm. Every bump felt, every drop hitting getting harder and harder. With every meter movement forward the stress gets worse and worse. Getting off the ground takes absolute power, strength, planning, commitment and, in the case of a startup, great timing and tremendous pain.
Then come the thick blanket of storm clouds that the plane rolls through. Turbulence. There’s a reason you keep your seatbelt on during ascent. The plane bounces and heaves as it makes its way up, up, up. For a startup, once off the ground, the real work begins. It is this real work, through those storm clouds and gravity trying to bring you back down to earth, that makes or breaks it.
Once the plane cracks the plain of the cloud cover it becomes a different world. The sun is shining, the air is clear, no more storms, no more bumps, just miles of visibility. It almost feels like there is nothing else up there but the airplane. This is where great companies end up when they’ve hit product/market fit, built the right technology that solves that elusive problem for the right customer, lined up the right financing, built the right team and are growing in the right way. You have the wind at your back and momentum in your favour.
When a startup is in that rarified air it can do no wrong. It is the talk of the town, the media is glowing, the CEO is everywhere, investors want in, people want to work there, customers refer customers because that startup at that moment owns the air. Owns the conversation. Owns the momentum. As a startup, this is what you’ve fought for the entire ride.
The problem is that, just like being in an airplane, all things must land.
As with every trip, eventually the plane must descend back through the clouds and land. The momentum for startups is fleeting and It is this brief time that good companies become great companies by leveraging momentum and bad companies listen to their own press and miss their moment.
To make momentum work is hard work. Harder yet is to use the momentum to turn the startup into an actual company.
There is nothing that beats a fast “no”. Doesn’t matter what language, what circumstance, what context — a fast “no” is the greatest gift to receive.
Don’t mistake a fast no with every other type of “no” that is used. There is the “no, but” <– NOT a fast no. What about “not now”? Nope. Not a fast no. Anything without a concrete, 2-letter, hard end or anything remotely sounding optimistic is absolutely, 100% NOT a fast no.
So why is a fast no such a gift? How can that little word, usually the first one out of toddlers mouth or the thing you yell at your dog to stop bitting strangers, be a good thing?
Two reasons.
The first is obvious. It’s the end of a line of conversation. If you’ve ever tried to raise any kind of venture financing you know that VCs are notoriously vague with their answers. Only the good VCs that know and follow their investment thesis say no quickly. The rest string you along for fear of missing something — anything — that pops. They want to keep their options open. Often you’ll hear “let us know when you find a lead” <– that’s a “no”. Or, you’ll hear “circle back with me in a month” <– NO! The fear of that little word is real and sometimes you need it to move on.
The second reason is not so obvious. A fast no is sometimes the real start of the conversation. If someone can say “no” it means they have a line and you are on the other side of that line. A fast no means they can define why “no” makes sense for them. This is glorious. It means you can ask why they said no. It there truly isn’t a fit you are liberated. You are free to move on. There is no more baggage, no follow ups, no awkward emails or calls. But sometimes there IS a fit and the “no” helps clear up any confusion or misconception. Yup, “no” can be a conversation starter. I’ve seen it happen. Often.
Getting to a fast no takes courage from you. YOU need to be able to give the other side the permission to say it. At the end of every optimistic investment pitch or sales call I like to ask a variation of the “asshole” question (nicely, of course): Do you see a fit here? Can we work together? Does this fit your business/investment requirements? We often don’t want to hear no so we avoid asking for it.
Getting to a “no” is a gift — often AS valuable as a “yes” — but anything in between is pure anguish.
Pandemic supply-chain issues aside, closing the loop is the ENTIRE goal of e-commerce: To enable customers to find and purchase product. Dollars spent in building, promoting, staffing, warehousing and fulfilling are directed to one thing: Closing the sale. Here’s a tale of two e-commerce experiences that show both sides of closing the commerce loop — I’m not sure which is worse…
The “we’ll take your money” approach
Do you want to buy those Edmund dining room chairs? No problem. Expected delivery date is 3 weeks? Sounds good. Just pay now.
This is a grab. Those chairs were ordered in March, delivered in August. Not 3 weeks. Not even close. The delivery date simply kept on slipping. No note or apology from the merchant until a text came letting me know that my blessed day had arrived. 3 weeks to 6 months in incremental time increases plays on the sunk cost fallacy because if they had said 6 months from the onset, the likelihood of an order would have been 0%.
The “we won’t take your money” approach
Do you want that Lindbyn mirror? Sorry, out of stock. Can’t have it. Can’t order it. Can’t preorder it and certainly can’t have it shipped from another store that has it in stock. It MUST come from your city.
This is the other extreme. Those companies that have inventory elsewhere but don’t seem to have unified logistics or simply don’t have inventory at the moment. Even if they anticipate inventory in the coming weeks, we the people cannot reserve or pay for it. Just a “please come back later” note and be off.
Two extremes: We’ll take your money and you’ll eventually get the product (capture) or we won’t take your money but please please please come back and check regularly (release). Both fail to close the loop.
There is a revolution that is underway that will challenge even the most financially secure companies in a way that has never before been seen.
The fundamentals of how and where work gets done is changing.
For the first time since office buildings, foosball and free snacks emerged, the fight is on to leave all that behind and work from home.
This may be a new normal for some but for most of us it is something we’ve embraced for many years already. What is new is having to be patient at the learning curve of others that haven’t done this before. It has been comical. It has been frustrating. It has been rewarding and eye opening to see how quickly humans adapt. It has also been all of those things to everyone who was opposed to it prior to the pandemic who now think a work from home balance can exist.
We discovered that humans aren’t the problem here. We can change and adapt and we have over the last 100 days. Work has been done. Governments have been run.
There is, however, a clash between how humans operate and the rigid “rules” of business that have evolved over the last 150 years.
THAT’S the problem.
We’ve built an infrastructure in business that follows the same path with very few deviations. A company fights for survival, finds an office, hires employees to work in that office, competes for new employees by adding perks and incentives (loosely called “culture”), and then adds more office space, a slide, a stacked beer fridge, comfy chairs, hidden rooms, a wood burning oven for personal pizzas, themed boardrooms, more employees, more floors, scooters to get around, spaceship campuses, dorms, massages, and the list goes on. The cycle is what happens to companies. All based on a physical address.
Then the pandemic and the only food around is whatever is in your refrigerator. No more lattes, no more prepared lunches — only the coffee and stale Cheerios in your cupboard. Yet we’ve survived.
This is the new corporate America. One that shuns the ridiculously high burden that office space has put on a company’s bottom line. One that focuses on the value of the work and attracts employees who are willing to fight for the cause — even without unlimited bagels. One that trusts its employees to get the work done regardless of their location. One that builds a culture based on the values of the company and what it is trying to achieve because when you strip away all the perks that’s what is left.
Many organizations will be faced with this new reality and thrive. Others will need to take a hard look in the mirror and determine how they can rethink what they do to inspire and attract the right people that share the same vision. They will need to break years of doing things the way “they’ve always been done” and embrace new methods that are more inline with the way businesses should be run.
Perhaps we’ve swung too far to one side and the “work from home movement first” movement decisions were knee-jerk reactions to a weird moment in time. It’s possible that we end up somewhere a little towards the middle on this but it certainly won’t settle back to where we were. What took 150 years to build up has been stripped away in 100 days and it would be corporately irresponsible to go back to the way it was.
The upheaval is here. The only way to make it work is to embrace it and instead of focusing on the perks of the office, focus on building a values-based company that people will want to contribute to. The showroom shouldn’t be the reason employees are there, the mission must be. Build that and the rest will come.
We’ve all heard the story of Billy Bean by now. The GM of the Oakland A’s who was immortalized in the Michael Lewis book Moneyball and had Brad Pitt play him in the movie adaptation. As a baseball fan and stats geek, this book was one of the most accessible on the subject for everyone. It is also stacked full of lessons about leadership, management and focusing on the important things — which may not be the popular things.
Baseball is business
Despite the fact that Bean operates a Major League Baseball team, he has many of the business constraints that you and I do. First off, his team is not the Yankees, he doesn’t have a seemingly endless budget, he can’t simply buy his lineup. His management team was old school, they measure things the same way they’ve been doing it since baseball began. They prayed to the alter of power and speed and batting averages and ERA — the same way each and every other team in the league did it, including the rich teams. The A’s are not rich so Bean needed to adopt a different approach in order to build a competitive team. He needed to think differently to compete.
So do you
This describes the majority of the companies that operate today. We are in this odd time in innovation history. Most of the heavy lifting was done 25-30 years ago and companies today are refining that technology and building non-disruptive businesses on top of that layer. 20 years ago the commercial Internet was born and we are still refining it. 30 years ago cellular technology emerged with feature phones and we are still refining it today. The companies that laid the foundation for both these disruptive technologies are mostly dead and gone but their technology still enables the companies of today to build upon them. The thing is, there is so much duplication in industry today that it is very hard to differentiate between them if you are an investor or, more importantly, a potential customer.
Generally, companies today all look the same, feel the same and act the same. They also all look at data the same and are judged the same. With so much sameness, it takes a Billy Bean like character to be bold enough to change it up. To stop focusing on following a similar narrative and break the mold by looking at the data through a different lens.
“Not everything that counts can be counted and not everything that can be counted counts.”
Albert Einstein
There is competition in every business category and most businesses look and taste similar to each other. Those that are truly on the edge and innovating face the different challenge of waiting for the market to catch up to them. That is, of course, provided they’ve made the right bet and aren’t too far ahead of the curve (think Magic Leap). For the rest of us, we need to start thinking about what the right thing to focus on is in order to build our businesses.
In a stats-rich environment like professional sports, owners and managers have spent most of their history focused on what we would call today vanity metrics. Batting averages, homeruns, RBIs are all personal stats that increase a players contract value but don’t necessary propel the team forward unless all the players excel in those categories. The focus was on the wrong metrics and so were expectations. When the worst team in the league can have a player win the MVP award at the end of the season there is something wrong with the way we rank that data. If the goal is to win the World Series, is having an MVP on a last place team a victory?
When Bean focused on underused metrics like OPS (on-base plus slugging percentage) and WAR (wins above replacement) he transformed his team — until the rest of the league caught on. He had a momentary advantage. Most of the companies out there are still focused on vanity metrics — their “batting average” — to define their business. If that’s the case they will be lumped in with the rest of the carnage that will happen when one of their competitors or a startup ends up disrupting them with a different approach.
If Google and Facebook were baseball teams
Put this lens to the business models of some of the largest companies in the world today and it’s pretty clear they aren’t innovating. Facebook earns the majority of their revenue from advertising. They have refined it and with the data they have on all of us and have probably made it as close to perfect as possible. It is still a 100 year old model and still a single source of the majority of their revenue. As soon as we get smart about protecting our data and protecting democracy that business is ripe for renewal. A rethinking.
Google’s value has always been as an innovative search tool. There is no denying that their approach to indexing the internet was the greatest breakthrough for search ever. It humanized the use of the platform and left the early search companies in their wake. Now they are an intent company matching, yup, ads, to requests. Another company relying on a 100-year old business model in order to earn.
Both Google and Facebook gather data from their various platforms (including Google’s Android OS + Chrome browser + Google Maps) to serve ads. Hardly innovative. Hardly democratic. Both companies have subsumed industries and it is most likely that your company has an unhealthy reliance on one or both of them to find an audience.
Then Amazon are the Yankees
Amazon seems to be the only company of the big three that has been able to continuously innovate and earn. It started in commerce but quickly identified other business models to build out (AWS, memberships, streaming) and even have been able to pull advertising revenue from Google and Facebook while those two haven’t been able to do the same in capturing any significant ecommerce revenue from Amazon. Amazon earned roughly $3.9 billion (5% of total revenue) in advertising in Q1 2020 while Facebook pulled in a paltry $300 million (less than 2% of total revenue) from commerce in the same period.
Baseball is doing a better job at adopting data from technology to better their production. The book MVP Machine by Ben Lindbergh and Travis Sawchik dives into how coaches are pushing camera technology to create ball players. If there is a hint of natural ability can the proper use of technology be applied to creating technique that turns that hint into a career. If so, it means that the way and types of players that are drafted changes and the game evolves yet again. Nothing is too small to focus on — even counting the number of spins the ball makes after the pitch is thrown. Think about that, they count the number of times the stitching rotates and focus on increasing that number…that is precise and measurable and makes a huge difference.
Under Billy Bean, the Oakland A’s never won the World Series. His approach was quickly adopted and perfected by many of the rest of the teams in the league and it set in motion a new wave of thinking. In a sport that imbues tradition, the constraints put on Billy Bean forced him to rethink how things were done.
Some people don’t consider baseball a sport really but if a bunch of tobacco chewing luddite baseball GMs can adopt a new approach to their business what’s stopping you?
We’ve all had this question as we check out of our grocery store or local Ikea. Companies looking for our data to help them service us better. The optimist in me hopes that retailers ask for your postal code to better understand what parts of the city their customers are coming from in order to better serve them. The realist knows that they can merge this data with my credit card information and find out my name and address. Whichever you subscribe to, giving up even something so innocuous as a postal code means giving up a small piece of privacy for little to no personal benefit. Why do we do that?
There is a considerable fight going on right now that is important for our kids as they emerge fully ensconced in the digital age. They will only know a world with social media, streaming video and online shopping. They, and the generation that follows, will also be comfortable in trading a little bit of their privacy for little to no value.
Privacy has become the new global exchange of currency and the value of that currency depends on the companies that are collecting it.
Social Currency
This is where the now old slogan “you are the product” hails from. Social media and search companies use personal data to sell highly targeted display ads. Visitors are measured in CPM and the value of each click depends on the amount of personal data that has been collected for each person. Give more data, click on more links, like more posts and get more “relevant” and tailored ads.
For social media companies your data is their lifeline. Something to think about as Facebook and similar companies start introducing services for children under 13 and home video conferencing products…
Utility
The postal code is a simple example of data as a utility. Understanding how to service customers better/faster/cheaper does a number of things that benefit everyone. In the case of online shopping, giving up a little data could help with finding the right product. Giving up your location for services like Uber, Lyft or DoorDash could help find your ride or local restaurants that you’ll like faster.
By giving up data to utility companies the goal is a transaction of some sort. Value for the customer in the form of a product or service that they are seeking. Utility companies don’t necessarily use your data as the product but as a means to improve theirs.
Blurred Lines
There used to be two camps. One that focused on selling ads, the other focused on selling product. That isn’t true anymore. Social media companies whose business has traditionally been selling ads are now moving into online stores while Amazon now derives 5% of their revenue from selling ads. This is where it gets tricky for consumers and businesses that use social and e-commerce companies to reach them.
They who control the data
Giving up small bytes of our privacy for value doesn’t seem that bad — provided that the use of that data is for the intended purpose. For example, we’ve all become accustomed to giving up our general location to see if our local Home Depot has inventory. This is much easier and faster than getting in your car, driving the 10KM to the store to find out the product you want is out of stock. Temporarily giving up a little bit of privacy currency eliminates the uncertainty. This is a value transaction. Focusing on the utility of using the data for the purpose of actually helping moves customers to share more. Keeping the “utility gained vs privacy lost” value high on the utility scale will guide the decisions needed to make a deeper customer connection.
The data exchange
If every bit of data has a value to some company, there needs to be a fair market exchange that happens when it is given up. Or at least there needs to be an option for that. In the same way that stocks are priced based on demand, perhaps data should be priced that way as well. We set the price of our data, we determine its value to us as it relates to its use. The social media services and retailers can then decide if the price is right to ask for it, to pay for it in cash or additional services. Can you see a day where Ikea asks for a postal code and in exchange offers up free assembly?
This isn’t a call to arms — you do with your data what you want to. We just need to get smarter about the amount and the value of the information that we freely throw out with no expectations of return. We take great care in managing every other aspect of our lives that provide a return — our homes, our jobs, our investments, our credit scores — but when it comes to our identity we give it away often and for free. What is your privacy score?
The next time the cashier asks for your postal code ask what you’ll get in return. A blank stare of discontent is my guess…and that isn’t enough for me.
Do something different. Challenge the status quo. Don’t build something that already exists. Stop building features, build products that move people. Be innovative. Be first. Be unique. This is the pressure and scrutiny of every single idea that gets floated by every single entrepreneur in the world. It is a lot to ask yet there are some that succeed in breaking through by making something new and make us wonder how we ever lived without it.
There are lots of entrepreneurs that have done this and along the way they’ve faced incredible criticism and ridicule because of their ideas. As someone who has started businesses I understand this acutely. Seeing things slightly or radically different than everyone else makes people uneasy. Change is difficult to see and to rationalize but it happens all the time.
The real innovator’s dilemma isn’t limited to disruptive technologies that dethrone incumbents — you have to get to that point first. It is in the criticism that casts self doubt on something that is different and derails the confidence of the entrepreneur before an idea is fully expressed.
Remember when experts wondered why anyone would ever need a computer on their desk? Remember when no one would ever sign up for streaming music services? Remember when the same was said for streaming video services? Think back to when no one would ever submit their credit card information online or when the idea of renting someone else’s home for a night or getting in a car with a stranger was insane. The ideas were revolutions. The criticism was based on the conventional approach. All you have to do is look at where we are to understand how those “radical” ideas turned out. They are accepted and imprinted on us and are now normal behaviours. Not so crazy after all.
If the founders of each of these companies had listened to the pundits talk about their businesses they would have given up and gone off to work in the government. Ours would be a mundane world of bureaucrats and paper work not missions to Mars. Change makes people uncomfortable, it also makes them critics.
Everyone’s a critic.
People see things differently and upending normal will bring detractors and naysayers. Entrepreneurs need to remain resolute on their path and ignore the critics. If the idea is worthy, if it truly does alter our path, those critics will come around. This is easy in practice but those that think differently are often those that also suffer from self doubt and imposter syndrome. How many revolutions have been quashed by a parent or friend saying that an ideas was dumb or that it will never work. Crushing.
Not every idea is great.
That’s not to say that every idea turns into a unicorn. The fact is that even revolutionary ideas need hard work and 10 years to get anywhere. The great ones that manage to do so will be scrutinized every step of the way. They will be the crazy ones, then the darlings, then chastised for their successes and then ostracized for their monopolistic tendencies. That’s if the idea is an elite idea. Most are not but who are we to destroy dreams by offering our commentary on someone else’s vision?
Future mud pie entrepreneur (age 4)
If you have kids you understand the balance between encouragement and reality. The unfettered and unbridled imagination of children are a perfect example of wild swings. What do you say to them when they detail their next greatest invention? When my son says he’s going to sell mud pies for a living did I immediately crush his dreams at age 4? Nope. I encouraged the thinking. The idea wasn’t great (who am I to say?!?) but the fact he had that idea was.
Ideas are plentiful. Some change the world, some don’t.
But the courage to come forth with one is the thing that needs to be celebrated. I had a professor in college that would always ask for ideas. Students were tentative and would all start their explanation by saying “this is a dumb idea but…” and Professor Knowles would stop them dead in their tracks to say “there is no such thing as a dumb idea.”
So to all the critics and dream dashers and soul crushers out there that think destroying ideas builds you up and demonstrates your superiority I mean this with all sincerity — STFU.
It seems as though I am always consuming content. A nonstop treadmill of daily news, ideas-based podcasts, audiobooks, books books, documentaries, reality television and the fictional worlds of Bobby Axelrod and John Dutton. It’s a lot.
When I pull in content my goal isn’t to learn every concept that is explained or remember every single date and nail the timeline, it is to understand milestones — the big picture. Sometimes, depending on where my head is or what I’m involved in with work, I get something completely different out of content than I would if my context was different. This happens a lot and is why there are certain articles and books that I reread regularly when my context changes.
Regardless of when I read something, my goal is to get a single idea out of it — something that I can use or something that clarifies another idea that I have already noted. I tend to group my reading around themes in order to get a wider viewpoint. For example if I’m reading about climate change I’ll group articles, books and podcasts together and then read and listen to them in succession. I try to bring in contrasting viewpoints in order to balance my thinking. Depending on the subject my views are my views (especially around the climate) but it is solid practice to hear the other side. You will learn something that either reinforces your viewpoint or opens up an opportunity for more exploration.
Learning shouldn’t be a stressful endeavour when you are doing it for personal growth. I don’t put any pressure or timeframes on when I should know a subject because it is a process. One book, one article, one podcast at a time until you’ve got enough perspective to have your own earned opinion. When the world moves as fast as it does and content can be created and distributed as quickly as it is, knowing how to build an opinion one idea at a time — slowly and deliberately — is essential. I once worked for a CEO who read business articles and switched our company strategy based on them. We bounced from the latest thing to the latest thing making no headway and, eventually the company failed (for many other contributing reasons but lack of clarity was one of the top ones). The lesson is to extract an idea from everything you ingest but do it to build upon what you already know.
It’s not complicated. Bring in content. Chew on the fat. Disregard the rest. Repeat. Doing this starts to fill the gaps in knowledge, confidence and expertise. The key is to start with the first idea.
Imagine having a baseball team with two future Hall of Fame players on it during the same season. Then picture that team stacked with perennial all-stars and a 74-40 record (best in the major leagues) and heading into the second half of August with a 6 game lead on the Atlanta Braves. That was the Montreal Expos right as the strike killed the season, the World Series and the future of the team. They finished with a winning record only 3 more times over the following 10 years before they were folded up and became the Washington Nationals (who then took 16 more years to win the World Series).
So what happened?
People. By the time the next season started they had traded most of the anchor talent away for next to nothing in return and eventually the team fell into ownership issues and everyone else was traded for beer and cigarette money. It was a self-fulfilling circle of doom and the team and city suffered through it — all due to bad management and terrible owners.
What if…
It’s easy to play armchair GM in retrospect. Had the team been able to keep their core together a little longer or the strike not happen, perhaps that team would have been able to win and start a run similar to what the Yankees did a few years later. The difference was that the Yankees were able to keep their core intact — most of that core were to become future Hall of Fame members as well. Winning is essential for a small market team who’s fans are not passionate about the sport unless they win. Montreal is that city and the Expos had their chance but circumstances and bad management blew it.
People are it.
The cost of letting their people go was the team itself. First it was the faith of the crowd, then it was the faith of the players, then it was the faith of creditors and then it was the faith of the league. The franchise was lost when the players weren’t valued. The Expos became known as being the league’s farm system. Great players earned their stripes and then were unloaded when they hit their prime because the team couldn’t afford (read: planned poorly) to keep them. Those core players that were released or traded went on to win and succeed and form the core of other teams and, eventually two of them ended up enshrined in Cooperstown. Many of those players wear World Series rings but with the wrong team logos embossed on them.
Companies make the same mistake
That 1994 Montreal Expos was a team of all-stars and were poised for a dynasty run. I’ve worked with many companies stacked with the equivalent talent and have watched them all walk out the door for almost the same reasons, some with similar devastating results. Where incremental concessions from the company are seemingly impossible to negotiate or the bureaucracy too challenging to get through. People leave at tremendous cost in dollars to replace and train new people, employee psyche and confidence in leadership. Companies operate at the behest of people and the great ones will be great wherever they end up. It should be the company’s responsibility to try to keep them. Period.
The business advantage over baseball
As we are witnessing today, baseball has devolved into a fight between billionaire owners and millionaire players over money. There doesn’t seem to be any joy left to be had in that game for anyone — including a dissolving fan base. Businesses have an advantage because they can show their humane side by offering benefits where pay increases can’t be accommodated. Simple things like transportation, meals, WFH, shifted schedules, fitness memberships, free coffee — small value items with big impact on employee happiness. Hell, even just TRYING to accommodate change and fighting for employees goes a long way in creating a core team dedicated to the fight.
It isn’t easy to keep a team of all-stars together. They are bound to leave at some point because of who they are. But to have a stacked team and not try to do whatever is necessary to win with them sets the tone for the current team and limits the possibilities of attracting and keeping future all stars. Great people want to work with other great people. They also want to work for an organization that will fight for them.
You’ve seen where this ended up for the Montreal Expos. Their history has been erased because their ownership didn’t value their people. Don’t do the same.
When I was younger, in my early 20’s or thereabouts, and starting my first technology business, I was seeking advice and building my network. After each meeting with someone I would ask if they could make a recommendation of anyone else I should meet within the community. Invariably they would always say someone older and close to retirement age (at least they seemed that way to me!).
It was weird. Here I was, young, on the forefront of a massive technology revolution (something called the Internet) and they wanted me to speak to fossils. Business people that faxed and dictated memos. I had followed up on a number of those referrals only to have my beliefs reinforced when they would ask me “why we need the Internet when we have TV and radio and newspapers”…it was time to move on.
I was asking the wrong questions
As I moved from intro to intro it dawned on me that I was clearly not going about this the right way. There had to be a reason that everyone was referring me to the same bunch of old people. It wasn’t an accident and each person was incredibly successful. That’s when it dawned on me that I was asking the wrong questions. They didn’t need to understand the shifts in the business landscape. They didn’t need to digest the underpinnings of the technology that was moving the bytesphere. They understood how to build a business. They knew how to avoid the many mistakes that I was about to make. They knew where to focus and what to ignore. In short, they knew how to run a business.
As soon as I reframed my behaviour I began to ask the right questions. They weren’t specific to the actual product I was trying to sell, they were fundamentals on how to sell, grow, hire, lead, market and manage. This is the common language of business that a stubborn young founder needed to know in order to succeed — or at least not make avoidable mistakes.
They were like I am now
They didn’t have all the answers at the time and there were still plenty of mistakes that were made on my end before the lessons sunk in. Sometimes this is just the unavoidable human trait of stubbornness. I am now at the age and experience level of the same people that I asked for guidance 30 years ago and I get it. It’s not one thing that changes over night, you don’t suddenly see the answers to things that have plagued you along the way. It has become a repertoire. A menu of skills. Subconscious and present. All those conversations over the years, the advice, the mistakes, the testing and way finding is in there ready to be brought forward to help.
Doing it versus reading about it
I’ve had the great privilege to travel extensively around the world for joy and I’m now bringing that expansive thinking to my kids. Nothing cements something more than experiencing it. Making the book come to life. We were in Paris the summer before Notre Dame was severely damage by the fire. When that dominated the news my kids felt it because they had touched it, understood its history and importance. You can get that from a book but the experience of being there makes it real. This is the power of experience.
The same thing can be said about building and running a business. You can read many books and articles, listen to podcasts and watch documentaries all you want but the real world often needs tactile experience. A balance of book learning and real learning makes things stick. Following someone else’s game plan from a page and a moment in history may motivate but it does not replace the need for experience.
The path of an entrepreneur is never linear. There are many highs and many lows but the goal is to balance those in order to make progress. Moving forward means spending less time in a manic state of up and down. A guy like me and those that I have relied on during my 30+ years in business help round down the peaks and round up the valleys to spend more time in the middle — where the growth happens.
After most dinners, my kids ask for the natural nightcap to a great meal — dessert. We go through a back and forth that usually sounds like this:
Me: “How many steps have you taken? You know the rule, if you don’t hit your step goal there is no dessert.”
Them: “Uh”
My wife: “Go run around the yard 10 times and you can have dessert.”
So off they run, gleeful that a small amount of running will get them a fine bowl of ice cream. This is, quite frankly, the ONLY time that running in circles will get you anything.
There is such an important distinction between movement and action but it sometimes gets lost in the motion. We are often “too busy” to take a minute to understand if what we are doing is movement for the sake of it or action with purpose.
We all have a finite amount of time to work on something. That thing could take an hour, a year or a lifetime of effort to accomplish. Eventually time runs out, the opportunity has passed or you get where you were aiming. I think of that as a mission. When it is darkest and you are in it the deepest it is very easy to get lost and start heading in the wrong direction. This happens to us all. No matter how you describe it — losing the forest from the trees, losing your path, whatever analogy you use, we’ve all been there. It is at this moment that knowing your mission or ideal outcome, writing it down and putting it somewhere visible makes all the difference. When I get lost or confused about the thing I’m working on and why, I read that mission or goal and If they line up I keep going. If they don’t line up, I stop.
This is how I check myself to make sure I am not just in motion but I’m actually moving towards my goal. Movement vs action.
There are so many easy distractions that pull us away from what we should be focused on. Most of these are on other people’s schedule. If you don’t control your time you aren’t able to control the action that comes from it.
Some practical things to think about as you walk through your day on the job:
Meetings
We all hate meetings. We do. Sometimes there are meetings that move the earth but those can be counted on one hand in an entire career. I can’t remember my last good meeting, let alone great one. Can you?
Right.
Meetings are mostly movement. Think before you request one. How else can you stop the cycle of meetings for meetings’ sake and turn it into something that creates action. My default is to not have the meeting. Can it be summarized into an email or document and distributed to the members and let them take 10 minutes to read it and get back to you with thoughts instead of using an hour to read it to them in a meeting. If the purpose is to get consensus, ask for it in another form and move on.
If you MUST have a meeting, be clear on the agenda and the goals of the meeting. Distribute information prior to the meeting so everyone comes in versed and ready to ask questions — to move things along. It’s ok to impose on attendees to do some reading before the meeting. This will also force you to make sure ONLY the right people are in the meeting so you don’t waste others time. Meetings are a crucial skill and can be effective to take action but that isn’t the truth today. Do your part. A quick rule of thumb: If there is no agenda, don’t attend/schedule. Period.
Email and messages
Nothing is worse than message overload and that is what we all suffer from. Mainly because they are misused. Most of us use email and a messaging service like Slack or Teams. Email has been around for a generation and yet we are still learning how it fits into business it seems. Slack and Teams are newer but abused nonetheless.
Here is how I use them consistently. Food for thought and you should discuss with your team how you see it working internally.
Email
I think of email as the company archive. We all get way too much because it is way too easy to send. I love email though because I can get a full thought out and send to my colleagues and they can answer it on their own time. This is powerful. When I send an email I don’t need an immediate response. I expect thought and, if needed, a reply at some point. Email for me is movement. If I’m cc’d on anything it means it is something I need to know but a response is not necessary. Those are the best emails.
Messaging Services
Slack and Teams are where the action happens. I mostly use Slack in my work and I think of it as if it was a telephone. When there is a near immediate response needed — if I have a question or a request for example — I send a Slack. Slack is a message wrapped in a form of urgency. Again, I don’t expect an immediate response however I do assume that a Slack message to be of higher priority than an email. Slack messages are action-oriented, short requests. No long drawn out paragraphs here.
A word about SMS.
I use SMS as the ultimate action request. In work terms, this is something that I need a response to immediately. Full stop. If I send a work colleague an SMS it is at the highest priority and help is needed right away. I don’t use it often so it isn’t abused but SMS is the ultimate tool of action for me.
As an organization that uses these tools there needs to be some structure on how to use them effectively in order to not overwhelm your team. It is the responsibility of the company to enable everyone by implementing the right tools for the right reasons.
If all else fails I guess you can ask yourself one important final question: Are you simply mimicking the action of my kids running around the yard for a quick sugar high?
There are times in history that are always discussed by the elders as before and after it. There was a time before electricity altered the working day. A time before the Internet made everything and everyone in the world accessible. A time before Amazon made shopping a 24/7 sport. A time before social media corrupted the electoral process. And a time before a pandemic forced us to rethink 100 years of business evolution.
This is what happens with the curse of human ingenuity. We don’t stand still and we don’t give up. It seems like there are always big thinkers and doers waiting in the wings for just this kind of change to happen and they capitalize on the shifts. We all know it doesn’t happen exactly like that. Change happens at a glacial pace until we reach a tipping point and then it accelerates.
Welcome to the tipping point
And this is where we are. There will be a before and after the pandemic and there will be stories of companies coping with the outcomes and stories of companies thriving — the difference will be how they adapt the way they operate in a world that looks dramatically different and will for the foreseeable future.
Operating in a pandemic
There are two ways for businesses to operate as the world awakens to the new reality that there is no quick fix to a pandemic. They can retrench in their old way of doing things and wait for this to pass and hope that it returns to the way it was or they can rethink their business model and product offerings and operate in the new reality.
There are obviously risks in both choices but understanding that whatever normal was prior to the pandemic is not something that we will return to. That era has passed. However, we are not yet in the after stage and that requires a different kind of thinking. In order to make it through this time, companies need to embrace this reality and build their business to accommodate it.
For those companies that remain in the bubble of before the pandemic it is time to recognize that waiting for the doors to open on the economy won’t be the savior. It is time to be entrepreneurial again and to solve the same original business problem that prompted the creation of the business but under our new circumstances. Rethink the idea. The risk in not doing so will jeopardize the business even more. Don’t try to cannibalize an offering but find something that compliments, that adds to the value for your existing customers.
The realities to be faced
The world has been through something like this before and it survived. Not just survived but thrived. The flu pandemic in 1918-1920 essentially ended a war and rolled us into the roaring 20’s. Advances in science — our understanding of immunology was momentous — was just the start. That pandemic killed as many as 100 million people in weeks at a time that pales to now in advances of technology, immunology and science. We are a different human race today compared to 100 years ago. With this comes our ability to bounce back faster given the generation that did it in 1918 was doing so while recovering from a world war and having lost 10% of the world’s population to the flu. Despite where we are today, it will never be as bad as it was in comparison.
We just need to accept a number of hard truths.
Truth #1 – Consumer confidence is shaky
This is the greatest risk to the economy right now. Consumers need to feel a sense of normalcy as a base to move towards true economic recovery. This is a psychological hurdle that is the hardest to overcome as we are still trying to balance leaving our homes and defending our communities against the virus.
Truth #2 – There are fewer employees
Massive layoffs have led the news but the macro impact on small businesses — the engine of our economy — has been devastating. We are starting to see it as provinces and states start to reopen and those businesses stay closed because they can’t earn with the imposed safety restrictions. Worse are the businesses that didn’t survive and are closing permanently.
Truth #3 – Financial aid will stop
At some point — one that we are nearing — the government will not be able to prop up the economy and people will have to get back to work. A high unemployment rate is just the beginning. Many will need to be retrained in order to re-enter the workforce because scarcity rules over the workforce right now. This obviously has an impact on any ability to spend and erodes confidence and the economic outlook.
Truth #4 – Humans are resilient and entrepreneurial
Opposable thumbs aren’t our only differentiator in this world. When this chapter is written about our history it will be about the step changes that happened as a result of human ingenuity. New business models will emerge. New companies will be formed. Existing businesses will adapt or die. New habits will have formed. New efficiencies will make us wonder what we did before. There is no doubt that sewn into the seam of this pandemic are the secrets to a great human renaissance yet to emerge.
Truth #5 – We are all watching
There has been a reckoning that has forced us all to look at how we operate as a race. We do this periodically as individual communities or cities and sometimes as countries but we don’t often do this as a planet. Nothing brings the real humanity out like a challenge to humanity. The reality of senior care, white privilege, hourly workers and the fragility of — and our reliance on — others are lessons soon not to be forgotten. Neither are those that disregarded the safety instructions, thought only of themselves and put many more people at risk. Human character has been on display in all its glory and disgust. Noted. Filed.
The global economy is a human construct — our race existed before all of this. We built it, grew it and thrived as a result of it. It also allowed us to stop it to to save ourselves from a similar fate that befell the generation that faced the 1918 flu pandemic. We are now standing at a time of great challenge where human complexity has brought us to a boiling point. When something like a pandemic strips away the veneer we are left with the things we’ve built, the things we’ve let pass and it is clear to EVERYONE there is change that must happen to evolve. We can’t ignore it now because it is front and centre today like never before. This is our turning point. This is our moment to be remembered for acting like humans.
Let’s not waste it by holding on to the way it was.
I’ve had a number of conversations over the last couple of weeks during this pandemic about fighting to win versus fighting to not lose. They were spurred by the global shutdown but they are rooted in two very different business philosophies.
It is hard to talk about pushing for growth during a global crisis without sounding soulless but businesses need to grow to survive in the best of times. These certainly aren’t those. Fighting to win or to not lose is a mindset and sets a tone for the organization. It doesn’t mean taking unnecessary risk that puts everyone in jeopardy. It means focusing efforts in the right direction to build towards something other than getting by when the economy comes back to life.
Leaders focused on not losing tend to short their business. There is a growing voice that times like these are very entrepreneurial. This leads to much more competition in the market and many will look at rethinking established business practices. Plus, they have nothing to lose. They are thinking about growing, about taking. They will be aggressive. There have been massive layoffs in every industry and organizations that have let their people go just for survival won’t win. They won’t last. If a business is in peril and the layoffs are not to retool, refocus and come out in a better position for growth, then the leaders are focused on not losing.
Leaders focused on winning take the opportunities that are in front of them and make the hard calls to retool. They rethink their business and turn a terrible situation into a call to arms. They refocus the team on a greater goal which is to take from their competition or to find an entirely unique model to grow the business.
How do you know if your company is fighting to win or fighting to not lose? You know the answer to this already. If hunkering down to you means turning off all growth levers and conserving money without doing anything but that, you are fighting to not lose. Companies don’t exist to exist. They are here to grow or let the underbrush take hold.
Times like these also show holes in your current business model and may force you to rethink your offerings. Now is the time to do this. Once a company transitions from focusing on winning to focusing on not losing it is too late to think about recovery. This kind of thinking permeates the executive team and paralyzes the company because of it. It’s hard to shake the status quo when it is entrenched.
The common attribute in today’s successful leaders is always the fight to win. Jeff Bezos starts every single letter to his shareholders by reminding them this is day 1. It has been day 1 since 1996 because, as he says, day 2 means Amazon has lost its relevance. This is fighting to win.
Does this sound familiar? You decide to take a family vacation one morning so you pack up the car full of things you may need on that vacation, gather up the kids and the dog, jump in the car and then figure out where you want to go.
It seems ridiculous to the average person to plan and execute a vacation on the same day without an idea of where you are going. How do you decide what to bring? How long will you be gone for? Do you need sunscreen? Just plain ridiculous. Right?
So why do so many companies operate in this exact situation?
Having a semblance of a plan is one of the most important responsibilities a leadership team owns. How else does anyone know what is expected of them and what success looks like? Providing clarity on the vision makes everyone’s job measurable and focused. Lack of clarity (read: lack of leadership) has everyone confused about expectations, frustrated with their role and the company spinning its wheels.
Lack of clarity = Lack of Leadership.
In 2006 I was asked to take the CEO role of a company that had seemingly lost it’s way. The software company had a great track record in the emerging mobile market but had seemed, in the eyes of the board, to be stalling.
When I stepped into the role I had no idea why the company was stuck. It was stacked with the smartest people I’ve worked with from the engineering core on down. It was a vibrant place full of motion, full of love for the products and full of creativity. This would be a hard puzzle to unravel.
My first 3 months inside were just going with the flow. Trying to rationalize the way the company was viewed by the board and what the reality actually was. It was not clear to me why these two views were different. We had a great cadence of product releases and updates that I couldn’t see what the real culprit was and then three things hit me.
We had too many products
We operated with a small team and this meant that we were all swamped all the time. Especially the software engineers. Yet somehow we had 8 products in market. This company did not stand still. This company knew how to get product out the door. This company executed at a delivery level that was far greater than the number of people should allow for. The problem was that we had a deliver and forget mindset. We couldn’t circle back to every product fast enough for bug fixes and updates. It was just impossible to do shiny new product development at the same time as maintain existing products on a platform that was ever-changing.
We weren’t focusing on the money maker
We had 8 products in market — including 2 that launched early in my tenure as CEO. We were a machine. The problem was that most of those products were utilities of mid-to-low value when it came to earn. Launching new products pulled the focus away from our main enterprise software that was earning the bulk of our revenue and was being ignored.
We were too many things to too many people
It became increasingly clear to me that we had a positioning problem at the company. Sales and marketing were all over the place because we sold 8 products to 8 different types of customers. It was impossible for them to do their jobs properly as a result. I couldn’t tell you what we did in an elevator pitch, I couldn’t define our ideal customer, I couldn’t direct the team to do anything other than what they were doing.
Something had to change. We needed a clear path and that required drastic change.
The best decisions are often the hardest to come to
There is a time where a leader must lead by making difficult choices that may be one-sided in favor of the company and this was that time for me. We needed to pair down our offerings and focus on the product that would allow us to earn and grow. The product that would allow us to have a clear understanding of who our customer was. The product that would give definition to the roles and responsibilities of the team. In other words, clarity.
We ended up pulling back to a company selling a single product. Of the seven other products that we offered, we sold one, offered two of them free (as a feeder for our main product), rolled 2 more into our main product as paid features and killed the rest. We were now a single product company.
This was not a democratic process. We weren’t able to all get to the same conclusion on this so it came down to the role of the leader to do so. Sometimes you need to hear everyone’s insight, sometimes you need to seek outside advice and sometimes you need to be a benevolent dictator.
Benevolent Dictator
The changes were immediate but not without pain. I feel that in making these important decisions I lost the faith of some of my most important team members. We were abandoning loved products that many had invested significant time and effort into. In particular I believe it cost me two crucial partnerships in the company: My CTO and my Director of Marketing. Two of the smartest and most passionate people I’ve ever worked with. They both soon left the company. No hard decisions happen without consequence.
The resulting impact of this decision was absolute clarity on our mission. The entire team got behind the one product and we all pushed together. We showered attention on that product and our customers. We all understood the new guardrails that the company operated within. We could build a real product roadmap, marketing roadmap and sales channel. There was no more confusion about our business.
Clarity.
Companies can not operate very long without it. There is nothing worse for the people who are giving everything of themselves for the success of the company only to have no purpose or direction. Lead with clarity. Create that vision and then make sure it is the creed by which the company operates. Doing so will stop the questioning, stop the bouncing from shiny object to shiny object. Your role as a leader is to carve the path and then lead the way. If you aren’t doing that, it’s time to get out of the way.
I don’t think I finished my first book, cover to cover, until I was 13. It was as if my eyelids responded to words on a page like they were tiny sleeping pills, each one just…making…my…eyes…so……..heavy. I couldn’t read without falling asleep. So I didn’t.
In high school and university I relied on Coles notes or similar (there was no Internet back then!) to get the gist of the books that were assigned. For reports I would focus on the chapters or pieces of the books that I had read or heard talk of or were things that were in the news. Book learning was not a strength and it is something I regret not making into a routine today. All those wasted hours not spent reading has a compound effect — those books are still there and need to be read but I have fewer hours in a day available and fewer years left to get them in.
Both my parents were readers. My father wrote a book and had it published. I grew up with a sister that read books all night if she was into it. I just couldn’t do it. There was always a baseball game on or something to distract.
I remember finding my reading groove when I was in my early twenties and it was transformational. Two books stood out for me that made me realize what I had been missing trying to avoid it. The first was Clayton Christensen’s The Innovators Dilemma. The second was Charlie Wilson’s War by George Crille. Both of these books were prime examples of non-fiction that transforms thinking and broadens horizons. I was hooked.
It was probably timing that allowed me to find my reading niche. I was building my first company at the time and realized that there were many before who had done the same thing. It was time to learn from them. So I did. From that point forward I would consume 30-40 books per year and, thanks to technology, have scaled that to 60-70 books per year.
I’ve tried all sorts of speed reading techniques and courses but none really worked or stuck. I don’t think that reading a book with a mission of finishing is something that works. Reading is meant to be enjoyable so blowing through a book by skimming or selective reading (i.e. the summary, intro and conclusion) seems pointless to me. So I gave up on speed reading and learned how to determine if a book was worth the effort.
It’s ok to give up on a book
There is a “go, no-go” moment at about page 50 for me that determines the fate of the book. If I can get past that I’m usually in it for the long haul. I’ve heard this advice many times over the years but sometimes you have to quit books without guilt. Quitting a book doesn’t mean you don’t go back to it later. I quit The Four Hour Work Week by Tim Ferriss but went back to read it when I was in a different mindset and loved it. Even if you give up on a book you can always retry and sometimes it works out. Then there are books that I just soak up and get excited to implement — Gary Vaynerchuk’s first book — Crush It! — was that for me. I also re-read books that have had, and continue to have, impact on me every single time I read them.
The magic of audio
My speed reading technique now is audiobooks. I can read a physical book when I have time to sit and read AND listen to an audiobook while I workout, walk the dog, do work around the house, etc. This has literally allowed me to double my reading rate and consume many more books than I ever thought I could. I listen to biographies (human and business) and history books and keep the more technical or books requiring deeper thinking and notes to my kindle. If it’s a great story I listen and if it’s a note-taker I read it. This alone has given me the gift of making up for lost years wasted without reading.
News as context
While I always have a couple of books on the go at any given time (one audio, one physical) it is also critical to understand the current world around you as well for context. I rely on the obvious choices including The Economist and the New York Times. I don’t read the physical copies of the NYTimes but do read the print Economist — again it’s about focus for those articles. Podcasts have also enabled me to consume a variety of deeper level discussions and programming that I would never have had the ability to get to but are now completely accessible. I focus on current news in “print” — the NYTimes and Economist — while my podcast playlist is full of deeper interviews with business leaders, authors and experts on various topics that interest me. I stay away from “news” shows that are typically outdated by the time I get to them.
I never would have thought that having a reading strategy would be one of the most important things I would ever develop but it is. There is a difference between going through life enriched by reading and plodding through it ignorant of the stories that have been immortalized on a page. Today I can’t imagine a life without reading. A love of books brings opportunities to see the other side of an argument, to undo the fog of war or knowledge gaps and to be more whole in your thinking. It also sets an example for your children and, in doing so, hopefully helps them gain an appreciation for a lifelong opportunity to learn from some of the greatest minds to have lived.
The 20-year old version of me would laugh at this post but he was an ignorant kid who didn’t read…
Do you remember that scene from Austin Powers? That scene has been playing out in my head as we slowly emerge from the clutches of the pandemic and head into the next great unknown. It’s very clear that recovery will look like a good old recession but one the likes of which we’ve never had to deal with before. Whatever the truth is of what’s to come it won’t be a normal recovery — mostly because we’ve had enough time to adjust to living with a pandemic. Our habits have changed. What was unthinkable in January is now normal.
Along with the massive disruption to our lives are incredible opportunities to build upon for businesses. We have the chance to accelerate the rules of business, build new revenue streams and deepen relationships with customers like never before.
For 100 days we’ve had time to reflect and prepare for the coming recession. Stopping the economy dead in its tracks will have some serious consequences as we slowly open up to the new normal. This will be a world that has not conquered the virus yet. We can’t wait for that to happen so we’ll all have to make adjustments to the way we operate.
The four massive adjustments that will come out of our COVID-19 start to 2020 are:
The Delivery Economy
Without a doubt this will have the largest impact on our recovery post-pandemic. Businesses that were on the fence about delivery must now operationalize and quickly. Consumer expectations, coupled with their unwillingness to go into a store, mean if you want to grow your business you must get good at delivery.
This is not limited to simply figuring out how to deliver existing product to existing customers. Take this time to think about new lines of business. New revenue streams. Some closed restaurants have started wine pairings by subscription, some have started selling prepared meals shipped to your door. Both of these can continue even when the restaurant is fully operational as entirely new earning opportunities.
It used to be that a customer had to come to your place of business to deepen the relationship but that has changed because the habit of delivery happened. How can your business extend offerings to core customers and have it arrive on their doorstep — bringing your relationship into their homes.
Appointment economy
Most services work in the appointment economy but given there will be restrictions on the number of people allowed to congregate at any one time we’ll start needing a more sophisticated way to make appointments for our appointments. We won’t be able to arrive early for our appointments and that means fewer time slots, more delays and less revenue for those businesses.
This is a great way to right the wrongs of delays that typically happen at hair salons or dentists or doctors offices. Businesses are asking customers to wait in their cars until their appointment time and this is a great opportunity to surprise and delight those idling outside or, even better, to send a preparatory package to their customer prior to their appointment. In the case of a hair salon, they could send a sample size of shampoo and conditioner ahead of time so they can wash their own hair before arriving.
I think generally adhering to appointments will be a huge step forward for all of us — especially in family medicine and dentistry.
Video economy
Video used to be feared or make people uncomfortable but today has become a staple of our day. Zoom and Hangouts are the norm and we’ve learned to connect with friends, family and coworkers more as a result. This will not go away now that we are all set up to use the tools. Businesses large and small — from all industries — will need to look at how to incorporate video calls. It can help with triage, solve for limited gathering sizes or even in between appointment support.
There are so many service industry opportunities with video as business slowly ramps up. There are already live and canned music and cooking lessons available online but they aren’t often localized. Why not leverage some down time to do this. Teach online. Deepen the relationship and extend further into your customers life.
The Community economy
At no time has there ever been more of a community business focus. Support local has become a battle cry to help our restaurants and niche shops survive while the pandemic rages. More people will search for ways to help neighborhoods reopen by shopping and vacationing localy.
We are craving human interaction and while the convenience of online and delivery is indisputable, we all need to get out and be a part of the community. The crowds will come and the lines will grow outside of local businesses opening up several chances to make it a unique experience. Waiting in line or scheduling appointments for the gym or to buy a tent are not normal behaviours for us but they will be going forward. Local businesses need to create a differentiated experience outside and inside their stores in order to make the effort to show up worthwhile — all the while making sure they feel safe.
The best businesses will combine all 4 of these approaches. Doing this will create unforgettable interactions with their customers and deepen the relationships they’ve worked hard to start and maintain. In this brand new world of convenience every business needs to find a way to be more than just a physical incarnation of an online store. Personality, thoughtfulness and connection is at the core of the recovery. Do not take customers for granted. Put in the effort or fear the convenience of one-click purchases.
This twitter post by Hiten is as perfect a sentence that can be written and should give hope to every entrepreneur out there. You don’t need to invent the industry, you don’t need to be a pioneer and pave the way and you certainly don’t need to give up because you weren’t first.
There are two camps that people subscribe to — those that invent and those that execute. For the most part, invention is over rated. The odds of an idea being so unique and so timely as well as have a fully-baked business model would be on par with petting a real-life unicorn. In Matt Ridley‘s “How Innovation Works” he details pretty convincingly that innovation is a misnomer for consistent product evolution. This means that ideas happen but timing and execution are the more important parts of the equation and nothing happens over night nor without a lot of heavy lifting.
It is very easy to come up with an idea — although very difficult or near impossible to come up with an idea that hasn’t already been thought of. The hard part is executing properly. This is where the focus on the work happens. Restauranteurs didn’t invent the dining out experience yet there are 1000’s of restaurants in your city. They may have figured out how to get duck fat into their butter but their challenge is the same as most other similar businesses…they need to get people to notice them. They need to execute. They need to do the work. There are no industry monopolies, even niche businesses have competition. Everyone needs to focus on refining and building. Not inventing and waiting.
Shopify didn’t invent online stores. Uber didn’t invent rideshare — they also didn’t invent food delivery, nor did Doordash or Skip The Dishes. UPS, FedEx and the like didn’t invent home delivery and their competition are nationally funded postal services like the USPTO and Canada Post. Apple and Spotify and Amazon didn’t invent the digital music industry — not even Napster did that — yet each has millions of paying users. The macro point here is that invention is over rated and execution is under represented.
As you search your soul for the next great idea, the next technological solve to the world’s greatest problems, divert your attention for one second to how you can build on an existing idea that is already out there. The race is not to the idea. Innovation is for universities, labs and companies with R&D budgets far greater than yours. The race is to win in your field. The race is to bring on customers faster than the others. The race is to build a business by out executing the competition.
Trying to be first is trying to be perfect. Roll up your sleeves and embrace the work to be number 2 or 200. Doing this gives you control over your destiny right now. Waiting for the idea that will let you be first to market means one less business out there trying to compete against me and I’m good with that.
If you can sing you are a threat. If you can sing and dance you are a double threat. If you can sing, dance and act you are a triple threat. The difference between them is that you can make a living doing one or all of them. The more you can do, the more likely you can make a living when one or two of your talents are not in demand. Why settle for one scoop of ice cream when you can have three?
This is how I evaluate businesses really. Are they a threat or a triple threat. Are they a single product company or do they have the ability to earn on multiple fronts. If the industry is an emerging one, surviving with a single product offering as the only source of revenue will be impossible for most. The landscape is littered with the carcasses of single threat companies to prove this.
I worked for one of Canada’s largest media companies to help them transition from a print/web world into mobile. Moving a monolith into the web was devastating for their industry and rethinking for mobile at the time was equally jarring. The company had multiple newspapers across the country, each with their own website and each with their own mobile app. They considered each of these as products. Print + web + mobile = 3 products. By far the biggest challenge was helping them to see that they only had a single product that lived in three distribution channels. This left them open to competitive forces and closed their eyes to greater opportunities.
When Research In Motion was at its peak it owned the early smartphone industry. Everyone carried a BlackBerry and they were Canada’s most valuable company. Then almost overnight they disappeared. As they started to decline in market share they scrambled to compete by releasing other products. They released a tablet after the iPad came out but it was a lesser product in comparison. Too little too late. It would be next to impossible for a company with declining marketshare to fight the likes of Microsoft and Apple and Google at the same time — each with multiple lines of $1B+ businesses.
Those companies can afford to fight longer because of it.
Choosing a second line of business needs to complement the first.
It may have seemed natural for BlackBerry to make a tablet as their second product — Apple did it. So did Microsoft. The difference is that both of those companies owned the operating system. BlackBerry didn’t have either. BlackBerry was also a corporate-first platform. Their focus was on corporate security so their natural next step should have been commercializing their security platform. Instead they got caught up in the consumer swirl and lost it all.
Almost at the same time as the rise of BlackBerry, another company was transitioning from a single product company into what would become the world’s largest online retailer. Amazon.
Jeff Bezos’ company was a one-trick pony. It sold books online but it did not stay there for long. Almost as soon as it became known as the world’s largest book store, Bezos started expanding the company’s offerings. They did it in a sequential way that opened up other products like membership (Prime), AWS, storage, music and video. Amazon bought Audible and Goodreads and used this combined force to keep people in the Amazon domain.
Single product companies are not all destined to fail but they are left exposed when something changes in their industry. When an incumbent refocuses or a new entrant emerges it is hard to defend against momentum and a declining market share. When you are the incumbent and an upstart emerges that starts disrupting your business (think Google vs Yahoo or Excite) and there is no other source of revenue, the challenge is mighty.
Waiting until your primary business is under siege is not the time to think about a second product. Desperation makes for bad decisions and business history is littered with the carcasses of those that waited too long.
And where do we go from here? Which is a way that’s clear.
Rock on: David Essex
We are over 80 days confined to home and are mostly a mixed bag of anxiety and anticipation as our economy slowly rolls open. We’ve never been here before. We’ve never had this kind of wonder about our future before. The only thing that is for certain is that no one has a clue about what comes next.
In most cities almost 90% of all restaurant staff are no longer working. Rideshare, taxi and public transportation usage has fallen off the deep end of the deep end, there are no more summer festivals, concerts or gatherings and the likelihood of getting on a plane for a destination vacation is next to zero.
We are waiting for the magic switch that turns on the economy in whatever shape it looks like when we are ready. We’ve been warned about what this might look like coming back. The restrictions on gathering size, social distancing in restaurants and shops. We’ve heard it from every level of government. These are all assuming that there are consumers willing to part with their money on the other side of this.
Unprecedented unemployment
We are in the midst of massive layoffs and company restructurings that will generally see fewer people employed — permanently. These aren’t temporary layoffs. These are ground shifting times and business will look drastically different when they wake up whenever that is. There will be fewer employees. Period. We may not stick at 13% of our nation unemployed but it won’t be near the all time lows we were seeing prior to the pandemic.
Work from home
Many companies and even governments are calling themselves “work from home first” now. That means they are giving their staff the right to decide where to work from. The impact of this is deep. Competition for talent is now truly global and, regardless of the company headquarters, WFH means more flexibility in hiring outside of the city. Having an HQ in a city won’t mean what it used to mean.
Then there is real estate/corporate leasing side where a combination of layoffs and WFH will mean fewer square feet in leases. This will impact cleaning teams, security guards, snack/food companies that deliver to the offices as well as telecoms companies that support infrastructure and connectivity requirements for the offices.
There has also developed a great ecosystem of downtown services that really only service the core office goers during office hours. Take a huge portion of those people away and the impact will be felt by the local diners, coffee shops and dry cleaners.
Then there is transportation. With fewer people coming into the office to work, fewer people will take the bus or taxis or rideshare. Less commute time means fewer lattes from Starbucks, fewer podcasts consumed, etc.
You get the point.
These shifts were supposed to be gradual as we eased into a remote work society over the next number of years. Instead we’ve been startled into it and are now adapting — perhaps too far to one side. The pendulum will swing a little but it certainly won’t go back to where it was. We have to be prepared for another fallout due to the impact of our post COVID-19 world.
Even when we get a vaccine, the combination of fewer people working (or working for less money) + the work from home economy will give shape to an economy that is drastically different from where we were just 80+ short days ago.
Do you have mentor envy? I always do when I hear about co-workers or friends talking about meeting their mentors for coffee or bouncing an idea off their mentors. Where are all these mentors and why don’t I have one anymore?
One of the greatest things to do for your own personal development is to find a mentor. This is fact. Having the guiding hand and, more importantly, ear of someone who has experienced things beyond you is one of the fastest and best ways to level up at life. I also think being a mentor is of great value to help grow and learn as a person as well. Finding a match is the hard part — it’s not just as easy as meeting someone you admire and want to learn from, there needs to be a common feeling of “for the greater good” to make it really work.
The clear focus of a mentor/mentee relationship is to pull in different thinking through different experiences. It’s always preferable as you problem solve to look at something from all angles and we tend to stick to what we know. It can be uncomfortable to extend beyond the box we live in and mentors have that ability. We are born into this world with a pair of mentors in our parents and perhaps siblings. We then gravitate to our chosen social structure based on the school you attend, your close family friends and then work or community connections. By the time we are of age where we would like to assert ourselves we’ve created our very own knowledge construct and it all depends on your upbringing. Your thinking could be expansive or contracted simply based on who your circle of influence is.
The unknown unknowns
This is where we can fall into a trap of unknowns. If you don’t venture out of your comfort zone you often miss the other side of the story. We spend so much time building our own view of things in business and life that when challenged about a different viewpoint or approach it is human nature to retreat to the stuff and places we already understand. Ignoring other options and sticking to your tight thinking is not growing. Think of this as the ignorant stage. I went through it as a 20-something year old entrepreneur trying to make the transition to a 20-something year old leader. Learning to see other peoples perspectives is a skill that a mentor smooths over. Discover the unknowns that a mentor has already figured out and you move very quickly from ignorant to accepting.
The known unknowns
Having a mentor is like taking the red pill and being exposed to options. Being contained in your own head with your own purview and decision making frameworks means you will make the same decisions each time even as you expect outcomes to be different. Being exposed to other thinking, other frameworks and other styles helps to identify the areas of improvements in your life and how you interact with those around you.
The known knowns
By working with a mentor you start to bring their approach and thinking into how your decisions get made. It may not alter the outcome but taking into consideration a different process means that you are looking at whatever you are trying to achieve from a different set of eyes. The key is to consider alternative approaches, to see things from more than one vantage point and to take the appropriate path for the challenge. A mentor is not a person that tells you what to do they simply help you light up the corners that you weren’t exploring so decisions aren’t made in the vacuum of your upbringing.
My mentor journey
I’ve tried a few avenues of mentorship. My first was more of a peer group of CEOs going through relatively the same challenges that I was going through at the time. This was a great way to understand multiple approaches and opinions of challenges — some were similar to mine, others were completely different but they all helped contribute to the way I thought things through. This peer group was a facilitated peer group and it was tremendously valuable as a way to start to find other perspectives.
I then set out to find a true mentor for 1:1 acceleration and it took some time to find the right one. There was a local CEO and community leader that I knew on the periphery who I thought would be able to help me on my journey. I was at a small breakfast roundtable and he was the speaker and his approach and demeanor was exactly what I thought I needed. He eventually did become my mentor and friend for 3 years as I learned the ropes of being a CEO of a growing software company in my twenties.
The approach he took before discussing being my mentor was elaborate. He interviewed me and did his research on me before accepting a meeting for coffee to really connect for the first time. He talked to my peers to understand who I was in order for him to feel comfortable about the relationship. It’s hard to simply pair people together and there be a bond. It takes both sides to completely commit to each other and that takes continuous effort to get right. You have to like each other, respect each other and have a completely open and honest relationship with each other and that cannot change throughout. Before we agreed to work with each other, my mentor handed me a code of conduct that laid out his rules for this partnership and that’s when I knew he was the right person for me at that time.
We worked together for 3 years and they were the toughest and most rewarding years I had experienced professionally. We worked through every imaginable challenge you could dream up and then some. HR challenges, hiring challenges, product challenges, motivational challenges, productivity challenges, investor challenges, banking challenges, economic challenges, partner challenges and even family challenges. His was a voice and guiding hand that helped when despair would have certainly taken hold and crushed me.
There was many a time when the company I was running was at a crossroads and during one of these instances his calmness and experience allowed me to make the right but hard decision to move forward. I had asked my mentor to sit with us during our yearly corporate offsite to observe and help decipher some of our challenges. After a long day of hard discussions there was little consensus among the leadership team on a direction and my frustration was at a peak.
My mentor, who had been with us the entire time taking notes but not saying anything, suggested we take a break. He then took me for a walk around the grounds of the Inn we were staying at. I’ll never forget the silence that seemed to envelop us as we walked.
He didn’t speak, I didn’t speak. We just walked.
I was frustrated at how the day had gone and he knew it. Everyone did. We just walked and eventually he prodded by asking what the core issue was at hand. He kept asking until I got to it. His was a guiding hand, helping me to see where the real problem was. He wasn’t there to solve it for me, he was helping me solve it for myself. To see it. And I did.
In a 15 minute walk at the end of a long frustrating day, my mentor helped me set the direction for my company by only being present and asking me the same question over and over — each in a different way — until the answer was right there. The team returned to our room, my demeanor was completely different and we agreed on the path forward because I was reminded of what we were trying to do.
This is the power of a mentor. Someone that understands you as a human, your eccentricities, your leadership style, your drive and your passion. A mentor is not a business arrangement, it is a partnership at the deepest of levels and that’s why it is so hard to find the right one that will make a difference.
It’s hard but, in the end, the greatest thing you can do for yourself.
Hustling Is a young mind’s game. That doesn’t mean that it is only for the young, it means that to do it all the time is to waste energy that could be used better elsewhere.
My first thought when someone says the word hustle is of James Spader in any role in any John Hughes movie. Slick suit, feathered hair and that air of smarmy that leaves a trail. That’s hustle to me.
My second is when I’m lagging behind and need a short burst of energy to catch up. I push a little harder, pick up my pace and then settle back to normal speed when I’m with the pack.
My third is of Charlie Hustle. Pete Rose. The all time hits leader in Major League Baseball. Rose always had this crazy look when he was in hustle mode — a cross between the Hulk and Charlie Manson.
I guess hustle means running fast, oozing slime with a crazy look to me. That’s also how I would describe operations during the early stage of a career or business. Not exactly the picture of composure and confidence but a necessary place to start for sure.
The problem is that you can’t stay in that mode. It doesn’t work for the company, you will get tired of always sprinting and it looses its heroism quickly.
When I started my first company — an Internet Service Provider — I would do house calls to help customers get set up on the Internet. I just figured this is what I would want so I did it. No big deal. But it was — to my customers. Some of them were leaders in the business community in my city and they would tell me that they chose me because of word of mouth. That I put the effort in and they respected that. #Hustle.
As the business scaled I couldn’t do that anymore but didn’t want to lose that level of service so I had to operationalize the process. I went from hustler to operator in order to scale or I would have capped my growth potential and I would have died young from sprinting 24 hours a day.
In the early days of every business there is frenetic motion that is hard to understand unless you’ve been there. The pace is relentless and the demands are high. There is a camaraderie that emerges at that time as everyone does everything in order to solve for the problems of a growing business. No clear roles, no clear direction other than get it done. Then the business must scale and those hustlers are no longer able to cope. It needs to move beyond that particular brand of hustle. To do this is where frenetic activity turns to operations. It is a repeating function: Hustle to operations to hustle to operations. Each step leads to scale. Each scale often means new people. Old hustlers move out, operators move in. New hustlers move in. Growth happens.
Good operators know when to replace the hustle and start putting repeatable processes in place. Bad operators don’t and have been sprinting in place their entire lives.
Creating something out of nothing is incredibly difficult. Think about what that means. An idea occurs, usually as a cumulative result of years of subconscious data gathering and observation. Then the idea is somehow articulated and refined and built. A million things have to go right to succeed and a million decisions have to be made to keep it working. It is no coincidence that only a statistical few get this right and even fewer than the few make it work long-term.
Ideas are everywhere. We all have them but what sets an entrepreneur apart from everyone else is how they execute on those ideas. Having a big vision is great. It can inspire incredible people to do great work but it also may be too much too soon. The gap between the reality and the vision is often too large and it paralyzes everyone because the very next steps are too hard to see.
Cognitive overload.
Most initial ideas are too large to move forward. Just think to your own experiences when you are presented with something that is important but there is no clarity on where to start. It may be a great cause or idea but if there aren’t explicit next steps to move things forward, it doesn’t budge.
The problem here is that the cognitive effort is too high. It takes too much thinking to take the leap and we spend all our time trying to define something that is too hard to define. To be good at executing on ideas, those ideas need a definitive first and next step. Too much thinking means there is too much unknown and the idea needs to be refined.
The wedge.
Great ideas are great because of their simplicity. All of us have seen businesses and thought “of course! Why didn’t I think of that?” The founders have done their job in finding their wedge.
The wedge is the thing that holds a door open. That’s all. In order to bring an idea to life it needs to be able to find a way to a customer and it needs to offer enough simple value for it to be used. No one thinks of a wedge but it is a simple and powerful tool when used in the way it was intended. The wedge is an enabler that can lead to many other things.
If Jeff Bezos tried to describe what Amazon would look like today back in 1996 — the grand vision of being the greatest retailer and logistics company while also being the worlds largest digital infrastructure company — it would have been too grand. It required too much thinking. Whether this was his vision or not, his wedge was books. Rare books, then every book. Then every product. Then mining space.
Finding the wedge
It’s hard to visualize going from books to space but Bezos always intended to build a space business. Amazon became his path. You can see his ambition even in the name he chose for the company. He didn’t pick a name that had anything to do with books. He chose the river with the largest water flow in the world. His ambition was mighty but he started by finding his wedge.
The trick to finding a wedge is to start at peak vision and work down towards something that impacts the grand vision but is almost immediately actionable. A perfect example is a company called Fellow. They took on the task of making meetings better. Perhaps the secret vision of the company is to reorganize how corporations operate daily but their wedge to that goal is to make meetings and 1:1’s better for everyone. Adopting their software starts companies down the path of more effective meetings which will lead to a more efficient business with less wasted time and ineffective interactions. If everyone gets meetings right, the company is better. 2 years from now companies that buy into the Fellow process will be better as a result.
Finding a wedge is not a compromise to the bigger idea, it is the first step towards it. Most ideas can’t be actioned on because they skip over 99 of the 100 doors that need to be opened — with the most important one always being the first. If you can’t get in, you aren’t in business.
It takes a certain kind of crazy to get into building a company around hardware. To invent something from scratch that people find valuable is hard enough at the best of times, to do it by creating a physical manifestation of that is near impossible for many reasons. Then to find a way to distribute it, support it, update it…is an Everest style challenge without oxygen or winter clothing.
Hardware is hard.
Look around you right now and think about the hardware that you use regularly. It isn’t hard to point them out. You wear a watch (or smart watch), you carry a smart phone, you type on a computer, you talk to Alexa, you watch TV, you make coffee or cook your food. Hardware is everywhere and building it as a core to a business seems easy enough. Right?
So many things go into building the right hardware for the right reason. And that is the challenge to overcome before going down this road.
The last company I worked for had an incredible product. It was the company that I had wished I had started. It was a hardware company that focused on the gym market. The system was designed to lead and track a workout for a gym member. The product was actually multiple products including a wearable, multiple types of sensors, native mobile apps and a web component. The sensors were installed on each piece of gym equipment, the wearable was worn by the member of the gym and the apps pulled it all together in a programmed and directed workout.
This was a very complicated but beautiful challenge to solve and the company did just that but here’s why it was hard to build and, eventually what led to a product switch.
Challenge #1: Too many moving parts
The company was in 3 different businesses which often happens with hardware companies as they start. We were building hardware, software (mobile app) and content (workout routines). We had to build it this way to make it all work together. Until we had enough momentum and our partner channel was well stocked and we built our API on top of a reliable hardware stack, we needed to do it all ourselves.
Gym equipment is not easy to attach a sensor to either. There are so many different styles and types of machines — from free weights, to selectorized machines, to plate loaded — so there would never be one sensor, there always needed to be many.
The key was making all the hardware and software work together and this was done by adding beacons (yet another moving part) to each machine to help identify it as unique. We then had to build something that would allow us to register that beacon (yet another moving part) which ended up being a wearable in order to be the conduit that paired the app with the machine. Incidentally, for those asking in your head about timing, this was before the smart watches emerged. Being a little ahead of a curve is also a great risk with hardware.
Software played such an important part in what we did. We needed app developers to work on building native apps for iOS and Android. We needed data scientists in order to differentiate between a dumbbell arm curl and a tricep extension. We needed software engineers to build the operating system that connected the app to the machines and we needed it all to work without a hitch.
Counting reps
Challenge #2: Manufacturing is slow
It’s pretty easy to build a prototype with a 3D printer these days. We can jimmy up a quick test piece of hardware made of plastic and make it work. But once you are ready for full production for sale — or in our case installation on gym equipment — time is what kills you. Some of our installs were for 300+ pieces of equipment at a time, split between all those different styles mentioned before. Manufacturing took weeks, sometimes months depending on component availability. Things don’t happen quickly in hardware. The plan needs to incorporate some give in order to make sure the supply and production chains have adequate time for slippage. This will happen unless you control the chain or have the clout of Apple. Which you don’t so expect delays.
Challenge #3: Costs are higher than you think
It costs a lot to build a product. There are no easy workarounds. Committing to building a piece of hardware needs money and time. Double whatever money you think you need to build and, while you are at it, do the same for time. Even the best designed hardware on paper will run into adversity when you hit play on manufacturing. Very rarely (if ever) does the product leave the screen to be produced and distributed as it was originally designed or with the same component parts.
To test the product in the wild, companies will typically do low volume production runs — we did ours at a local manufacturer — and this increases cost significantly and is often not scalable at this cost. It’s necessary because in order to test it, you need the hardware. It could be an interative process — build, test, optimize, build, test, optimize. This has to be done until it is done right.
Challenge #4: Distribution
Our challenge with distribution was that it was a complicated installation. The decisions we made to have different sensors meant that it was not an easy thing to drop ship and have set up in a moment. We had magnetic coils that needed to be installed into selectorized machines, end caps for the barbells, RFID rings that needed to be glued onto dumbbells, bluetooth beacons that needed to be affixed in visible locations on each machine, wearable charging stations that needed to be prominent when members walked in…the list was endless. Distribution for new products is never going to be easy — especially something as far ahead of its time as this was. We knew that and it was part of the vision to make a new standard for gyms. The workout operating system.
Most companies suffer from distribution challenges. Today you can set up an online store and sell your product — creating a new challenge of rising above the noise of the crowd. It’s a different expertise needed to distribute an unknown product. It takes time, relationships, luck and a beautifully designed product that consumers or businesses understand immediately.
Challenge #5: Defects
Let’s face it, stuff breaks and when you are in the hardware business things are bound to stop working. There will be a small percentage of product that simply fails out of the box or something in the environment makes it stop working. Failure is inevitable.
One of our early designs for counting the amount of weight someone was lifting was also something that was a magnet for dust. Eventually enough dust gathered on the sensor and it stopped doing what it was supposed to do. Corrosion, humidity, the pounding of heavy weights all lead to potential defects. It could be something as simple as a battery slipping from its contact. We even had a percentage of our components that reached us already defective.
Challenge #6: Capital
Hardware is not software. When it comes to funding it always needs more. More time, more resources, more research and way more money than originally thought. That may seem simplistic and obvious but undercapitalizing a hardware company will seal its doom. Our company raised a seed round on the large size but it really needed 10X that amount to actually build what it set out to build and stay alive long enough to see it through. When raising investment for a hardware business, raising too little or selling too big a vision is a non-starter. Sell the vision but insist on the right raise or the gap will be too wide.
Challenge #7: Knowing when to pivot
Sometimes hardware startups bite off more than they can chew and are facing one or many challenges on this list. It might be time to pivot the product in order to simplify and to live another day. This is a hard compromise to make but the alternative may be giving up altogether.
The key to a pivot in hardware is time. It can’t happen near the end of life for the business. There needs to be enough money in the bank that gives enough time to design, build, test and deploy the new product.
Our company had to pivot for all these reasons but we did it with enough runway to test the idea on customers, validate requirements and then move into production and deployment without raising another round. The next product was closer to commercialization and would start earning immediately upon launch. It wasn’t the one we had set out to create but it was on a path towards that vision.
Hardware is not for the feint of heart. Version 1 of any new technology will take longer and cost more than initially thought. The vision of the product may need to be recast many times during the early days in order to get it out the door. Then, slowly, it is refined release by release. Sometimes component parts get better, sometimes a different approach is discovered. Regardless, getting that first version out the door is crucial. That’s where the real work actually begins.
I love working. I love that feeling when you know you are contributing to building something greater than just you. Call it work ethic or elbow grease or being reliable — call it whatever you want — but doing the work is what makes me happy.
This wasn’t always the case. I was a terrible student because I didn’t want to do the work. I scraped by with marginal marks the entire time I was in school. I remember the exact moment where I realized effort did not equate to success at school. It was grade 5 math and my teacher said she was generous and gave me a 50 for the term. It was crushing and I explained that I had really made an effort that term and I had. She said that my effort is why she gave be a passing grade but it didn’t necessarily translate into good marks.
I really learned to work when I started my first company. There was no hiding from it then. The need to eat and live under a roof made for enough motivation to put the work in. As most entrepreneurs know, having to run a business and be the business takes an incredible amount of focus and dedication. As Springsteen says, “he don’t work and he don’t get paid.” That forces you to learn to work.
I levelled up again at my work game when I had twin boys. There is no escaping the amount of effort it takes to raise a child but two at the same time means you have to suck it up and get to work. Whatever I thought work was before kids, I was wrong and I needed to get more done in the same time. This is where you really have to love the work or it will beat you down. You need to balance the job of the job, the responsibility of the parent and the commitment to your spouse. An imbalance in any of those and the whole system is off.
There is a lot of wasted space in work. It is this wasted space that makes people hate the work. It can happen when you aren’t focused on doing the right things because of a lack of direction or instruction. It will happen if you don’t like what you are doing. It does happen if you don’t understand the game you are playing and how to win at it. All of these things zap your energy and work becomes work.
As an entrepreneur you can always find things that need to be done but you’ve got to love the grind or you will get tired quickly. As I moved up in my work life into more senior roles I realized that I missed the work. I love being a leader but I love being a leader that contributes by rolling up my sleeves and getting involved. It’s an example I want to set for my kids that despite a title and the prestige that comes with it, you have to work hard to make a meaningful contribution.
We all have an ego. It varies in size, weight and visibility, but we all have one. It is human nature to want to mean something in the world or to be admired for something that we’ve accomplished. It starts as a child looking for approval from a parent or a peer. It continues in life to be something that propels you if kept in check or destroys you if you let it lead.
To be an entrepreneur you must have an ego. Politicians, writers, actors, musicians, tv hosts, reality show contestants, the mailman, the grocery clerk…they all have one as well. Ego is a central requirement to have enough confidence, enough hubris to aim for something big and take it. But there is a process, a way to keep your ego at bay so it doesn’t overflow before it is deserved.
Ego is a life force that can affect a career or relationship path. If you exert too much unearned ego at the start of your career you will rub people the wrong way and be labelled. If you don’t push a little out in front at that same time, you will most likely be ignored. What is the ego balance?
I like to visualize ego as the path of earth reentry that spacecraft have to take. Too steep (too much ego) and the craft will burn up. Too narrow (not enough ego) and it will bounce off into space. The perfect balance between speed and the angle of descent leads to success.
As an entrepreneur, there are 4 phases of ego.
Contained.
Early in a career the ego needs to be contained. Too much and it is off-putting. Too little and there is nothing memorable. You need to understand when to assert and when to leave it alone. If you look back at today’s most successful artists to before they were stars they will often seem as though they are completely different people. That artist is driven by ego and a craft but full of insecurities as they read for a part, sing to empty rooms or campaign from the heart. Business people are no different. Humble confidence.
Controlled.
A little bit of success in any field bolsters the confidence and brings with it a little ego that escapes into the world. You start to feel as though people should recognize you or listen to you because of the success. The release of ego needs to be earned and timed. Believing your own press releases too much ego into the world. Making up your own press means you are overflowing with too much ego and have no control over it. It must be controlled. Just listen to interviews with young athletes or artists. Most of their comments are about the team or cast and contributing to the win or the play or the ensemble and praising their team, band or director. They have been trained to keep the ego in check. Sports teams train players to keep their ego controlled for the health of the team. We all know players that have overstepped in this arena and let their ego spill all over the clubhouse. Those guys are still not in the hall of fame because their ego oozed out and was rubbed in everyone’s faces.
Released.
At the core, ego is a belief in the self. If trained properly, it can be a massive secret weapon. It can help people persevere and overcome incredible odds. This is what it’s like to be an entrepreneur and business leader. Every entrepreneur or small business owner has a deep belief in the fact that what they are building is something that other people will value. Despite the many people who will wonder why or feel as though there is no way that the idea will succeed, the entrepreneur pushes forward. What gives them the right to do this? To venture into the unknown and try to build something that has never been built before? To shun the traditions of the workforce in order to follow a dream? Ego. This is where an ego needs to be given some leeway, to be released into the world. Ego is stamina. Ego is a self-belief in the abilities of the entrepreneur. Without a little extra ego at this formative time, there is no entrepreneur and there is no business. You need to believe in your ability to get it done and to stick it out when others are saying you are crazy. That is all ego.
Corralled.
Here’s the tricky part. Ego is a fuel for entrepreneurs but at some point it becomes an accelerant that burns everything down if used too much or for the wrong reasons. This is where it goes so poorly for so many. It usually starts with success coming too early in the process or too quickly and the belief is that it is warranted and the attention becomes expected. There are so many examples here that cover every industry. When it happens, the ego subsumes the entrepreneur and it must be able to be corralled or it will need to be fed.
Having an ego is not at issue. It is the life-force of the entrepreneur. Used properly it will propel you forward. The opposite is also true. To be filled with ego yet humble is the mix. Those that practice this will have the fuel that motivates them but also the wherewithal to direct it in the right way to use it as a tool.
There are some simple, hard-earned rules about ego that I’ve learned through the years of having one and doing my best to control it.
It may be your idea but it has to be everyone’s quest so never take the credit
Show your value by doing the work — it should speak for itself
Defer to the experts. Don’t say anything if you don’t know what you are talking about
Be open to feedback and criticism. Don’t take any of it personally, it’s an opportunity to improve
There is no room for ego inside the family unit. You have to change the diaper and take out the garbage regardless of your net worth…
It’s easy to listen to the praise and let it define you but that path takes too much energy to follow. Just don’t be the asshole in the room and you should be fine.
*photo credit: NASA / Public domain. Soyuz capsule returning to earth
When I was a kid I only loved Elvis Presley and baseball. These were both incredibly important and influential in their own way but weren’t things that I could realistically do anything with. But go ahead and ask me who played centre field for the Montreal Expos in 1983.
Then somewhere in my 18th year I decided to try my hand at the guitar. My parents had “forced” me to take music lessons most of my life. It was first the recorder with Mrs. Hopkins and then piano with Mrs. White and then I settled on the clarinet in grade school and high school. Even played in the school band. I tried singing in choir once as well. This led to our music teacher, who was conducting, to ask me to mouth the words while the others sang. It wasn’t a glorious moment for me.
Then I found the guitar.
It had always been there in the music that I migrated to. Guthrie, Dylan, Springsteen, Mellencamp and Petty. It just wasn’t something that I thought I could do. I was lazy and this looked like a lot of effort really. Then my best friend snuck me into a bar to watch a local band of legends – Cooper, Emmerson and King – and I watched in awe as they transformed from normal humans into artists in front of my eyes. Seeing those guys play made me want to play. I saw them a dozen more times and just watched their hands move along the fret boards. It really was magic.
So I bought a guitar and for 32 years it has been with me, beating me up every time I play.
The guitar I bought was out of my price range and made me feel uncomfortable but the price alone made me commit to getting value from it. I started playing and I sucked. Bad. But I kept at it and, for years and years and years, I sucked bad. There were moments when I would be walking down the street and hear an incredible performer playing on a corner and think to myself “if this person is that good and playing for coins, why am I doing this?”
There were some highlights during the early days. Like the time I was playing on the front steps of my house and my neighbour walked up and waited patiently until I was done whatever song I was butchering. I remember thinking that I had an audience. A REAL AUDIENCE listening to me play. Was this the start of something? Could I be on my way?!? She placed a $1 coin at my feet and said “for the love of god, please stop.” This, and many other similar interactions made me realize that I wasn’t going to be able to make a living playing this thing.
I didn’t get it.
My mother played the piano and I remember she would sometimes sit down at ours at home and play. She played for joy. That was it. But I didn’t understand that you can learn and read and do things for pure joy until my forties! I spent my time comparing my outcomes to others and was never ever satisfied. It made me give up playing for almost 2 years. My guitar sat in the corner of my basement and mocked me.
Then I had kids and in a world of screens, music seemed to me to be an example I had to set. I picked up that guitar but this time for joy. When they were babies I would just play for them. Sing them to sleep. Teach them words to sing with me. I was still terrible but I would work to improve, slowly. They didn’t judge — mostly because they couldn’t talk.
Today I play every day for at least an hour. I fit it in because it brings incredible rapturous joy to me. Maybe not so much for my family. Both my kids are interested in playing instruments — one the trumpet, ukulele and guitar, the other the piano. They tolerate my singing and playing and I encourage theirs without forcing them. They have to find their joy for it to take.
My secret reason for playing is to give them memories of their old man. There are things they will remember about me long from now — some good and some not so good — but I want them to recall their dad sitting at the dining room table struggling through and then nailing a song. There are so many lessons in that for life and it all starts with taking the initiative by playing the first note and sticking with it for the right reasons.
