Love and Entrepreneurship
And though I have the gift of prophecy, and understand all mysteries and all knowledge, and though I have all faith, so that I could remove mountains, but have not love, I am nothing. And though I bestow all my goods to feed the poor, and though I give my body to be burned, but have not love, it profits me nothing. - 1 Corinthians 13:1-3
I recently finished reading How to Win Friends & Influence People by Dale Carnegie. It’s a classic book not just about business but about life. Carnegie uses a conversational style and a hefty dose of anecdotes to teach the reader the most valuable skill a business person can ever learn - how to handle relationships. From Carnegie’s intro:
…investigations revealed that even in such technical lines as engineering, about 15 percent of one’s financial success is due to one’s technical knowledge and about 85 percent is due to skill in human engineering - to personality and the ability to lead people.
Why Do We Let Politics Suck in the Information Age?
I know you hate politics. I know you would rather sit at your computer and read about the BHC or write a python script that organizes your music collection or build your own utopia in Sid Meier’s Civilization. I would too. All of those things sound like more fun than following the farce that is the United States election process.
The problem is, the MPAA and the RIAA know you would rather do those things too. Comcast and Time Warner cable know that SXSW and TechCrunch Disrupt are far more interesting to you than the RNC and the DNC. Apple and Samsung’s patent attorneys know that you could care less if Barack Obama or Mitt Romney was elected and that they’ll get rich because of it. They all know that you don’t want to participate in politics, and so they’re going to use that to figure out how to eliminate Net Neutrality, workable copyright laws, a sane patent system, and a chance for foreign-born entrepreneurs to build startups in America.
So maybe it’s time for developers and technophiles to start caring about politics.
Facebook Should Not Fire Sheryl Sandberg - A Retraction
What is the value in having a conversation? In being part of a large conversation?
Well, I wanted to be a part of a big conversation, so I wrote an inflammatory blog piece last week to see if I could elbow my way into it. And I was successful at that.
After getting into the conversation, I have been convinced some of my thoughts were wrong - while other thoughts I have are emboldened. That is the great thing about peer review - it allows you to separate the chaff of your lousy ideas from the wheat of your good ones.
Facebook Should Fire Sheryl Sandberg
Sheryl Sandberg became the chief operating officer of Facebook in March 2008. She came to the company at a time when it was still experiencing rapid growth and had yet to find an exacting monetization strategy. At Google she had excelled at selling online advertisements and growing Google into a cash gushing behemoth.
Having built an impressive resume at Google and charming the then 23-year old Mark Zuckerberg into making her COO, Sandberg took control of the monetization strategy at Facebook:
She had come to the company to turn it into an advertising powerhouse. She needed all her staff and peers on the [top management] team to work in synch. There was no question in her mind that Facebook represented one of the great advertising environments of all time. - The Facebook Effect, David Kirkpatrick, pg. 256
UPC Items as a Service
I just reblogged Fred Wilson quoting Chris Dixon. Dixon’s point was that mass produced items like books and DVDs will always be cheaper at and delivered faster from Amazon than any startup could hope to achieve.
In my response, I used Dollar Shave Club as one of the examples of companies that could beat Amazon because they are providing an item (razers and blades) that has a UPC in a way that provides more value to the customer than Amazon can presently do - and doesn’t seem like they want to move into that space.
Dollar Shave Club is providing a consumable product as a service. I’m proud to call myself a member, and I haven’t had to think about buying razer blades since. I also haven’t had to think about the cost of razer blades since. Every month, 3 dollars is taken out of my bank account, and 5 blades arrive in the mail. I use a blade for a week (maybe 3 shaves?), and then I throw it away. I’m actually shaving more because of the service, I love it for that reason, but I love it mostly because it has solved a problem for me in a way that I never have to think about again.
ManPacks is another example of a startup providing items that their customers go through pretty quickly. If you often find yourself getting low on socks, undershirts, underwear, or condoms, than ManPacks is solving your problem.
These aren’t the only items that could be turned into a subscription service so we never have to think about it again. The winner at this year’s SXSW was Cerealize. They want to make sure your shelf is always stocked with a custom made cereal of your choosing.
Diapers.com was the first that I can think of to enter into this space, and I think the space come a long way since then, but it still has a long way to go, before it really starts solving a lot of problems.
Whenever I finish making a sandwich, I go into the snacks cabinet in my kitchen looking for a handful (ok, maybe two) of chips to put on my plate. Imagine the torment when I open the snacks cabinet and all I find is granola bars and despair? Chips are vacuum packed! Why isn’t there a service that is sending me two bags of chips every week?
The home run in this department occurs when someone figures out how to do this legitimately for milk and eggs and bread, but those items are highly perishable and it’s probably not the best place for this nascent industry to go to.
Take a moment, though, and look around your house. How many non-perishable or semi-non-perishable consumables do you see? Light bulbs? Plastic cups? Laundry soap? Shoe laces? Break-pads? Golf balls? Printer paper? Duct-tape?
If you think e-commerce is where you want to be, and you’re looking for a way to beat Amazon, then pick a single product and solve your customer’s need for that product forever.
If it has a UPC code, Amazon will beat you [Unless it’s a computer part and you’re NewEgg or TigerDirect. Unless its a food item and you’re a local grocery store. Unless it’s a razor blade and you’re Dollar Shave Club. Unless it’s a resold item and you’re eBay or Craigslist. Unless it’s a high fashion item and you’ve got a contract with Chanel or Louis Vuitton or Burberry.]
Adversarial Customer Relationships and the NBA Finals
Last fall, I got a piece of mail from Time Warner Cable. It was a bill. The same bill I had gotten twelve times earlier since I started my relationship with them. Or so I thought. Tearing the left side of the envelope away, and puckering my lips to open the Carsonian slot I had created, I had no idea that the corner of the envelope falling to the ground was a gauntlet that TWC was dropping at my feet. They were no longer satisfied receiving the standard rate for their services. The bill that I held in my hand declared that they wanted an additional ten dollars a month. No increase in services. No expiring specials. No warning. No explanation. No apology.
In April, I moved a lot of money around for the same reason a lot of people were moving a lot of money around - the federal government wanted my contribution to the United States Treasury for the protection, services, and leadership they provide me. In moving that money around, I made a few miscalculations in our family spending habits. One of our accounts overdrafted by $5.00. That temporary five dollar loan from Pittsburgh National Corporation Financial Services cost me $41.00 to pay back, or 820%. A thirty second transfer before 12am that night could have saved me from the draconian, punitive loan-sharking PNC imposed upon me. A heads-up email. A 10pm SMS. A push notification to their app on my phone would have given me the chance to make it right, and not miss out on a chance to take my wife to the movies or treat my daughter to a baseball game. When I logged in the next day it was there, in the transaction log. Five dollars overdrafted. Thirty-six dollars charged. A letter in the mail three days later explained how I had been fleeced.
On July 8th, 2010, Lebron James sat down in front of a camera in Greenwich, Connecticut to announce he was leaving the Cleveland Cavaliers to join Dwayne Wade and Chris Bosh with the Miami Heat. I sat and watched in a bar in Niles, OH with my fiance, 16 days before our wedding day. Darkness had surrounded Cleveland sports since 1964 when Jim Brown walked off the field for the Cleveland Browns a champion, and out of football for good, prematurely chased off the team and out of the league by owner Art Modell. Lebron James was chosen to cut through that darkness. Annointed to be the greatest basketball player of all time, every fan in Cleveland knew that this was the man who could bring a championship to Cleveland. The problem was that Lebron did not know that. He left and took his considerable talents to South Beach. Today he did what every fan in Cleveland knew he could do 9 years ago - exert his will for two months and dominate the NBA playoffs and finish a champion. Only he did it for another city. For another team. For another group of fans.
The legal team at Time Warner Cable would tell me that they have the right to raise their rates at any time without notice. I have the right to discontinue services at any time. Nevermind that I live in suburban Ohio and there are no other broadband providers around. Nevermind that I as a web application developer I need internet access to make my living.
My grandfather, your grandfather, and the proverbial grandfather would tell me that if I managed my money better, I wouldn’t have to pay PNC 800% on my money when I made some clerical errors. Nevermind that I’m running a business and raising a family and have limited time to disect balance sheets. Nevermind that any of a hundred simple algorithms well within the ability of PNC to provide could have saved me a date night with my wife.
ESPN talking heads will tell you that sports are a business, and that NBA free agents have the right to do what they want. That they can play for whatever team that they want for whatever reason that they want, and that if the fans don’t get it, that’s their problem, and they shouldn’t be so naive. Nevermind that Lebron’s dumping Cleveland (a suffering, sports-crazed, cold-weather city whose basketball team made every effort to build its superstar a championship team) for Miami (a vibrant, tropical destinantion where sports are priority #217 whose basketball team just finished wasting 4 years of its superstar’s prime) was the greatest injustice in the history of sports. Nevermind that the business you’re talking about is the business of selling tickets and merchandise to the very fans you claim don’t get it.
I do business with these three companies. Regularly. Time Warner, PNC, and Lebron James are brands that I gain value from. Broadband internet access, finacial services, and sports entertainment have strong value propositions in my life, and I want to continue to gain access to that value.
But I hate that those three brands treat me as an adversary.
The unfortunate position I find myself in is that most professional athletes are prima donnas. Most cable companies raise their rates without warning or explanation. Most banks charge fees to their customers when they make mistakes.
So I have no choice.
And if you’re running a business, and your customer has no choice, then it makes sense to annoy them. It makes sense to pad your bottom line with their frustrations. It makes sense to glorify yourself with their suffering.
It makes sense, to not love them.
That is, until someone in your industry decides they’re going to love them. Then they’ve got a problem.
So the lesson for entrepreneurs is simple. Are you going after Time Warner? Do you want to take down PNC? Do you think you have what it takes to compete with Microsoft, Yahoo, Ebay, Amazon, Google, Apple, or Facebook?
Well, then all you have to do is make sure to do one thing that large companies seem to forget to do every now and again - love your customer.
Eventually, the incumbents in the industry you’re trying to disrupt will forget to love the customers you’re trying to steal from them. You don’t have to hate your competition, you just have to love your customer. If that’s your motto, your mission statement, and your modus operandi, then you’ll never fail. You’ll always be successful, and your customers will never feel like Time Warner customers, PNC clients, or Cleveland Cavaliers fans. Your customers will love you, and they’ll happily give you their money.
And that’s what every entrepreneur should be shooting for.
Lebron James 2012 Finals MVP Acceptance Speech
I’d first like to thank my teamates who were by my side, every step of the way. Dwayne Wade, who’s been like a brother to me through these past two seasons, you’ve made this journey one of the best of my life, and I am so thankful to be a part of the starting lineup of the Miami Heat with you. Eric Spoelestra, thanks coach, for getting the most out of me. I could never have achieved this without you. And Pat Riley, thank you, for having the vision to put this team together and the fortitude to turn that vision into a reality.
The past two years have been a long maturation process for me, both as a basketball player and as a man. I made a lot of mistakes and I tried to take shortcuts that don’t exist. It was a hard lesson learned, and I hurt a lot of people along the way. For that, I’m sorry.
So, in accepting this MVP trophy today, I don’t just want to share it with my great teamates, my coach, my general manager, and the fans of the Miami Heat. A piece of this trophy also belongs to the great state of Ohio, the City of Akron, the City of Cleveland, the fans of the Cavaliers, and everyone who worked so hard to enrich me as a basketball player and a man during my seven years there. I know that I handled the end of my time in Cleveland in the worst possible way, but I want to make amends, starting right now. This is your trophy, too, Cleveland, and I want to share it with you both as a thanks for the love that you showed me for my seven years as a player, and as an apology for the mistakes I made when I left.
Thank you, Miami. Thank you, Cleveland.