Tue, 24 December 2019
How Clark Valberg and InVision are bringing founders’ creative ideas to life, and leading the way for remote workplaces.
Clark Valberg can tell you the exact date that his digital product design platform, InVision, launched. It was also his wedding day.
In hindsight, it’s telling that Valberg was able to successfully overlap these professional and personal milestones—InVision is known for its culture of work-life integration, with a 100% remote workforce nearing 900 employees. Eight years later, both InVision and Valberg’s marriage are still going strong.
When Valberg first launched the platform in 2011, it was meant to be a simple prototyping tool for his creative agency. Today, the company offers a full collaboration suite, InVision Cloud, that has redefined how companies design their products.
In addition to collecting over $350 million in funding and a being valued close to $2 billion—officially making it a unicorn—the startup now boasts over 5 million users and is the platform of choice for 97% of Fortune 100 companies, including major names like Amazon, Starbucks, and Uber.
Along the way, the company also redesigned the way its employees relate to the workplace, demonstrating early on just what’s possible in a remote company culture done right.
A Graceful Stumble
Before Valberg was known as the CEO of one of Silicon Valley’s most beloved tech companies, he ran a New York-based creative agency called Epicenter Consulting, from 2003 to 2011. It was a design and development shop that created websites for software companies. However, there was one issue their team consistently ran into when working with clients—incorporating feedback.
Valberg found it challenging to bring his clients along on the design journey, which meant that the first time they saw their website or app was after it had already been coded. That made the feedback process difficult and inefficient. This got him wondering: How could his team show designs to their clients earlier and more often?
That’s how the idea for InVision came to life. It was created to put all their designs into a platform where clients could see and comment on them — similar to how a Google Document allows multiple people to collaborate within the same project. This was a huge step forward compared to the standard method of sending out designs in PDFs or as screen shots.
Valberg had zero intention of turning this product into a standalone business. It wasn’t until someone inside his agency suggested sharing InVision with other companies that the thought even crossed his mind.
At first, Valberg resisted the idea. He figured people wouldn’t be open to drastically changing the way they worked with their clients. However, he was eventually swayed and put out feelers to see if people would bite.
As it turns out, people were interested. While Valberg was pleased with the response, it still hadn’t occurred to him to turn InVision into a full-time business. After all, his agency was doing extraordinarily well and bringing in $1 million in revenue each year. Again, fate stepped in and a designer Valberg worked with suggested raising venture money. And again, Valberg brushed off the idea.
However, the designer persisted and made an introduction to angel investor Daniel Wolfson. Immediately, Wolfson saw the potential of InVision and connected Valberg to investors at FirstMark Capital. From there, a deal unfolded rapidly.
All of these events were, as Valberg puts it, a graceful stumble onto the path that he’s on today.
By the time Valberg secured his seed round of $1.1 million, users were signing up by the hundreds every day. This was when he realized that he needed to go all in on InVision. His wife took over his agency and successfully ran the business until 2018, while Valberg went through the next eight rounds of funding and elevated InVision to its esteemed status.
Ahead of the Curve
One of the characteristics that differentiates InVision from other companies is its 100% remote workforce. While the concept is more common now, it was considered bizarre back when the company first launched.
The idea originally came about as a talent hack. When the startup was in its early stages, Valberg and his co-founder, Ben Nadel, spent entire days taking engineers out to lunch to woo them into being their first developers. They quickly discovered how competitive the New York talent market was—especially with a behemoth like Google opening up their new office next door.
They sat down and asked themselves—what do we have to do over the next six months to be successful? They came to the conclusion that their focus needed to be completely dedicated to finding product-market fit and product development. However, they didn’t have the resources to address either of those priorities with the amount of time they were spending on recruiting. So they decided to hack it.
Valberg recalled working with many contractors at his agency. They were extremely talented but lived in far-off places, like Phoenix, Arizona. What if they hired those folks and let them stay where they were? Valberg reached out to the freelancers he worked with in the past and, instead of pitching a job, he pitched a lifestyle.
According to Valberg, it wasn’t the remote work that was appealing; it was the shift to life-work integration that his company offered. Valberg recognized that work-life separation wasn’t realistic in today’s society. Instead, he decided to focus on offering a flexible lifestyle that would allow employees to better integrate their work and home lives. The idea resonated. The co-founders hired 10 people remotely in less time than it would have taken to hire two people in New York.
“At the time, this was a big, scary idea. It’s a question about trading complexities. We can handle the complexity of this extremely challenging market and end up overpaying for talent that wasn’t necessarily the quality we needed. That feels like a war you can’t win. Or we could figure out this remote thing, which felt like a design challenge,” Valberg says.
Clearly, this strategy has been a huge success for InVision. The company is anticipated to reach 900 employees by the end of 2019 and doesn’t have plans to slow down. Valberg recognizes this as an inflection point in their growth, and he remains extremely conscious of the problems that may pop up from scaling, HR, and culture perspectives. However, he believes the advantages profoundly outweigh the challenges—and his team is ready to lean into any they run into.
Solving Problems With Bad Ideas
At a design-forward company like InVision, creativity is paramount. But even the brightest minds experience slumps and roadblocks. That’s why Valberg and his team have a secret weapon in their back pockets for any time they get stuck in a rut. It’s called “bad version.”
This phrase, which has become a cultural mantra at InVision, is a permission slip that says, “What I’m about to say might not be a great idea, but that’s OK.” Valberg says his team uses it whenever they hit a wall during brainstorms. Most of the time, the wall is a result of people holding back their ideas out of a fear of judgment. “Bad version” serves as a catalyst for the creative process and empowers people to share less-than-perfect ideas without fear of judgment.
Valberg recalls one time he was in a room with five other marketers, designers, and engineers. They were trying to figure out what to call the new plugin they created for Sketch and Photoshop, and they were stuck. To break the rut, someone said “bad version” and suggested the name Craft. The person who suggested the idea didn’t think it would end up being the name of the feature. But, as Craft users know today, it did. More importantly, it sparked the conversation and allowed the team to consider other options.
Valberg uses “bad version” at home with his wife too. He says it gives each other permission to not be right and asks the other person to help expose the best part of their idea. In other words, it’s a way of encouraging healthy conflict. This is a mindset Valberg hopes more people will adopt for work, life, and beyond.
“You probably have decent ideas that you’re just unwilling to share at that time for fear of judgment. That doesn’t make you an insecure person, that makes you a human person. … We become so fixated on arriving at the right answer, that we forget it’s a winding road.”
Clark Valberg’s 3 Tips for Scaling a Remote Workforce
When the InVision team gets together in person, it’s not about getting work done—for them, the real work happens in the cloud. Instead, in-person time is used to get to know each better.
Valberg believes that sharing this experience positively translates to the online environment, which is why in-person gatherings are an important part of every remote workforce. That’s why InVision has an in-person all-hands once a year and encourages employees in the same cities to get together regularly.
InVision is a truly global company. Its presence extends across the United States, South America, Europe, and beyond. Which means they have to take time zones into consideration. However, they don’t let those differences limit their teams.
For instance, InVision is mindful of not having geographically-bound teams work on projects together. So while they might not group an engineering team in Australia with one in San Francisco, that doesn’t stop them from hiring engineers all over the world.
Of course, using the right project management software and communication tools is key to maintaining a remote culture. Valberg believes these tools can make remote cultures more efficient than working in physical places.
Consider the amount of time spent gathering people physically for meetings. People run late, dip in and out of the conference room, and have to quiet down before diving into the agenda. Whereas, tools like Zoom enable people to start meetings within seconds and allow everyone to take advantage of any dead time in between. “If I’m five minutes late to call you, you don’t have someone waiting and twiddling their thumbs doing nothing,” Valberg says.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Sophia Lee
Direct download: FP282_Clark_Valberg.mp3
Category:general -- posted at: 9:51am AEST
Wed, 18 December 2019
Joe De Sena, like many of us, is a fitness fanatic. But his approach to fitness is a bit more...intense than most.
De Sena used to participate in countless obstacle course races, Ironman events, and marathons around the world. But even those weren’t challenging enough for this hardcore athlete. That’s why, after wrapping up a decade-long career on Wall Street, De Sena decided to start his own adventure racing company.
The first race De Sena hosted was on the British Virgin Islands, and it didn’t go very smoothly. That race cost De Sena half a million dollars and resulted in a participant getting lost at sea for several days.
Thankfully, the races have evolved a bit since then—although are no less challenging—and are known today as the Death Race and Spartan Race, which are collectively a $60 million business that has revolutionized the world of obstacle racing.
Check out this interview to learn more about De Sena’s financial, mental, and physical journey to popularizing this global franchise.
Direct download: FP281_Joe_De_Sena.mp3
Category:general -- posted at: 11:09am AEST
Wed, 11 December 2019
280: From Online Poker Affiliate to Referral Marketing Mogul: Ambassador’s Jeff Epstein Shares His Journey
Jeff Epstein paid off his law school student loans in an unconventional way.
When he and a couple of friends noticed the booming online poker sites in the mid 2000s, they created an affiliate company to refer traffic to them and get paid in return. The business did well enough that Epstein was able to sell his stake to his partners for a nice profit that helped him pay off his debt.
Epstein ultimately decided not to pursue law, but his entrepreneurial experience stuck with him. In particular, he recognized the power of referrals to help businesses gain more customers. As a result, Epstein eventually founded Ambassador, a referral marketing software that enables brands to build and scale referral, affiliate, partner, and influencer programs.
While the journey to growing Ambassador was far from a smooth ride, Epstein picked up many valuable lessons along the way that helped him grow as both a person and an entrepreneur. Eventually, Ambassador became successful enough that it was acquired by a large corporation.
Check out this interview to learn more about Epstein’s journey and hear him open up about his biggest mistakes, regrets, and lessons learned.
Direct download: FP280_Jeffrey_D_Epstein.mp3
Category:general -- posted at: 9:33am AEST
Sat, 30 November 2019
Investing in the Future
How three women from Iceland launched Crowberry Capital, a Nordic venture capital fund seeking to support the next generation of creative entrepreneurs.
To be boldly creative, you often have to strike out on your own adventure. So that’s exactly what Hekla Arnardottir, Helga Valfells, and Jenny Ruth Hrafnsdottir did.
While working together at an investment capital fund, the three women noticed a pressing need for more early-stage funding in their region. The trio wondered if they could not only meet that need, but also create something exciting and visionary by launching a private fund of their own.
In 2017, they took the leap, and set out to launch Crowberry Capital, a Nordic venture capital fund with its sights set on supporting creative technological advancements in spaces ranging from gaming to health.
No matter the field, their goal was to help young and promising Nordic companies (in Iceland and Sweden) grow into global brands. And just two years later, they already have 10 startups under their wing.
There were, of course, many steps in between the launch and the fund’s present day success. For one, before a fund can start scouting new talent to back, it needs a whole lot of cash to invest in the first place.
As you might imagine, launching a venture capital fund isn’t cheap. But you might be surprised to learn that venture capitalists don’t necessarily need to have their own personal wealth to get started (although it certainly helps). VC firms offer financial and other forms of support to early stage companies with high potential for growth, often deploying assets from other sources—wealthy individuals, banks, other investment funds, etc.
Although Arnardottir, Valfells, and Hrafnsdottir knew many of the institutional investors in Iceland and had impeccable reputations, they still found themselves cold calling smaller investors. They even spread word through the media that they were launching the fund.
“We went out early in the process to the local media and said we were going raise this fund,” Hrafnsdottir says. “So we sort of got it out in the open. Of course, that increases the risk that if you fail, you fail publicly, but we took that risk.”
Although they acknowledged the risk, for them, failure was never an option.
“That’s why it’s great to be three,” Valfells says. “There was always at least one optimist.”
That process of raising capital also gave the team a fresh perspective on life as an entrepreneur.
“It made us more empathetic toward entrepreneurs, because you realize you just have to cold call rich people you’ve never met and say, ‘Would you like to invest in my fund?’” Valfells recounts with a laugh.
Being on the “selling side,” as she puts it, helped them to recognize more clearly what it takes to pitch effectively and reemphasized the importance of passionate energy, lessons they carried forward into choosing where to invest once the fund was up and running.
But despite the daily strain of cold calling for investments, Valfells says that living in Iceland took away much of the stress others might experience in their position.
“There’s a great safety net,” Valfells says. “Everybody has access to childcare and school and healthcare, so I think you’re willing to take a risk with your professional life because you know there’s a safety net that catches you.”
She says that this safety net makes walking away from stability much easier and, because of that, creativity is free to flourish. And by extension, people are more liberated to do what they love.
“I think we’ve all made sacrifices in the sense that we’ve turned down higher paying jobs and jobs with more security, but it hasn’t been a sacrifice because this is what we love doing,” Valfells says.
After six months of phone calls and meetings, they had raised $40 million, and Crowberry Capital was ready to take flight.
Comfort in the Chaos
When the time came for the trio to begin investing in up-and-coming companies, they weren’t just focused on the products coming across their desks. Instead, they took the time to learn as much, if not more, about the minds behind the products.
“Everybody wishes to invest in bold, creative, and hardworking entrepreneurs,” Valfells says, “but I think that one part of the process with us is we get to know the entrepreneurs really well and really see the ones that can kind of do things to move the needle.”
By taking everything into account, from the passion behind the pitch to the willingness of the entrepreneurs to leave jobs behind and throw themselves entirely into their projects, the three founders of Crowberry Capital single out investments with staying power.
“It’s about finding the comfort in the chaos,” Hrafnsdottir says. “I think the ones that really go with the flow and are determined with their mission manage to prosper at this early stage.”
They also consider how the entrepreneurs plan to enter the market, draw attention to their product, and brand themselves. Essentially, they have an eye on the creative spirit that exists within a team.
“It’s becoming more important than anything, because in this age of artificial intelligence it’s really important that we as people build up our and social intelligence,” Hrafnsdottir says. “These are the things AI is never going to bring to the table.”
Arnardottir also says that they pay particular attention to what kind of team the entrepreneurs surround themselves with, citing gaming companies as being particularly talented at building stellar teams. Do they communicate well? Do they represent a diversity of skillsets? These are the questions the trio talks over before choosing to invest.
Valfells even noted that she’s seen particular success when it comes to going global when a team is international from day one.
“Having a diverse, international background helps build an international company,” she says.
But, while they try to find teams and companies that can thrive and grow internationally, they aren’t just on the hunt for the next unicorn.
“I think there’s a risk in the world today that unicorns overshadow a lot of good businesses that can give investors great returns,” Valfells says.
She explains that, while unicorns are great, they also keep their eyes peeled for racehorses: companies that won’t make a massive splash but will never fail as they faithfully speed forward into the future.
And the future is where all three women have fixed their sights.
Planning for a Digital Future
In an increasingly digital world, Crowberry Capital has chosen to focus on businesses that are focused on building a better future within that reality.
“We invest in technology that we believe is changing the world for the better,” Valfells says, “and that makes you feel really happy and good about your job.”
For example, Travelade provides online travel guides curated from the recommendations of locals, and Aldin is an immersive VR company. They’ve also welcomed Monerium, an e-currency supported by blockchain technology, and Kind, a virtual communication tool for the healthcare industry, into the fold.
They are also very mindful to choose companies they will want to work with for years, because Crowberry doesn’t just offer seed money to startups. They also plan to support businesses through B and even C round funding, with up to $6 million set aside for each company as it grows over the 10-year lifespan of the fund.
So, Arnardottir explains, if one of the three founders is more passionate about a company than the others, she takes point on guiding that business while the others serve more of a support role.
But no matter how passionate they are about a business, they are very careful to let the entrepreneurs make the big decisions.
“I think it’s very important that we are hands on and not hands in,” Valfells says. “For us, it’s very important that we’re backing teams that are really good at execution and are in the operations, and we’re more like sounding boards and mentors.”
So, as the trio behind Crowberry Capital presses forward into the future, searching for the final five investments they plan to make, they are excited to lead another generation of Nordic entrepreneurs onto the international stage as creative innovators who will change the world.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Erica Comitalo
Direct download: FP279_Crowberry.mp3
Category:general -- posted at: 10:56am AEST
Thu, 28 November 2019
Konrad Bergström and X Shore have set out to change the boating industry, one electric motor at a time.
Timing is everything for Konrad Bergström.
So when he first got the idea for X Shore in 1996, he trademarked the name immediately, but didn’t launch the company he had in mind just yet. It wasn’t the right time.
Bergström wanted to build safer boats, but he realized that the boating world was lagging behind the automobile industry when it came to details and design. Instead of forcing his dream, he chose to wait.
Over a decade later, inspiration to launch his boat company struck once again, but this time the dream had become bigger. With the world beginning to fully embrace electric vehicles, he wanted to build and sell a sleek, top-of-the-line, 100% electric marine craft.
“This makes actually more sense on the water,” Bergström says. “Because it’s an open area where you are getting fumes, and you are getting noise disturbance, and it’s actually taking more energy to drive in the water.”
Twenty years later, in 2016, X Shore developed its first working prototype. Today, Bergström and his team are ready to change the world’s view on how boats are powered. Not only do they hope to reduce pollution and the impact on wildlife with their electric engines, but they also hope to improve the overall boating experience for the consumer.
But long before Bergström would design his first boat, he started with headphones.
One Journey Ends, Another Begins
If you ask Bergström, he’ll say that he’s never experienced what a real job is like. He’s just experienced different ideas.
From an early age, Bergström has had an entrepreneurial spirit and a knack for creativity. At just 16, he moved to New Zealand, launching a distribution company for windsurfing gear called Thule Roofracks, among other projects. However, his greatest achievement was founding Zound Industries in 2008, where he served as its president until April of 2019.
While at the skateboarding fashion company WeSC, Bergström helped the brand to create a line of fashionable headphones. Wanting to take the concept one step further, Bergström founded Zound and turned it into an electronics giant, specializing in headphones and speakers. The company created many popular headphone brands such as Urbanears, and held licensing deals with audio behemoths like Marshall.
During his 10 years as president of the company, they would go on to sell over 20 million products in 135 countries. Despite the strong sales, Zound and Bergström parted ways over differences on the direction of the company.
“I always think that things happen for a reason,” Bergström says. “So I have moved on and I wish them all the luck. And I did build a fantastic company, so that’s never gonna go away, even if I don’t have any ownership anymore.”
The separation from Zound allowed Bergström to give all of his attention to X Shore, which had gained new life in 2012 after Bergström saw the rise of Tesla and its technological advances. With the electric revolution for automobiles well underway, he felt that concept of the electric boat would also take off.
“We started the electric product in 2012, and basically, I thought it was going to be easy,” Bergström says. “Looking at the internet at some lithium batteries and some engine, like, how hard can it be?”
Very hard, as it turned out.
Over the next four years, the team would work on the concept before completing their first working prototype in 2016. And although it took years longer than he anticipated, Bergström was glad that they went through the growing pains.
“That one, by the way, looked like crap,” Bergstorm says about the initial prototype. “Sometimes, an idea on paper is very far from getting it industrialized. So it takes time, especially with such a big product, to go through all the details and find solutions that economical, so you can have the margins and survive as a company.”
Let the Other Guy Build the Tech
Bergström and X Shore don’t want to recreate the wheel. Rather, they just want to right the ship.
With Tesla and other companies openly releasing their electric technology, Bergström didn’t feel the need to develop his own tech for boats. Sure, he’d have to develop some things on his own, but for the most part, why not use what’s already out there, he figured.
“X Shore, of course, has some of its own technology,” Bergström says. “But basically, we are piggybacking on the automotive industry.”
With armies of engineers grinding away on this type of technology, which is changing all the time, it made more sense to have others advance the technology and for X Shore to translate it into a marine environment. Not to mention, this approach helped their bottom line.
“Instead of having like 100% of the development cost, say that we are paying like 3%,” Bergström says. “But it’s still a lot of money. … We have the first mover advantage of building a new segment, but we are not driving the technology.”
The approach has also allowed X Shore to keep its staff smaller, which includes not having an in-house engineering team. That’s basically unheard of for an innovative company such as this. X Shore has partnered with automotive giants such as BMW and Rolls Royce to help find the best solutions for maximizing speed and driving range.
Despite not having an engineering team in house, it doesn’t mean that X Shore is done innovating. They still have a lot of work to do in order to become a leader in the marine industry.
“We spent around 50,000 engineering hours so far,” Bergström says. “And I think that we are going to have to spend another 50,000, so it’s a total of 100,000 engineering hours.”
Bergström is excited to start selling boats and shipping them, starting sometime next year. More importantly, he’s ready to bring more awareness to X Shore, which includes unveiling the third generation of its product in January.
When he first started to openly share the idea of an electric boat, the reception wasn’t warm. Now he feels, the timing is finally right. Proof lies in the company’s recent investment campaign, which raised €1.5 million.
“With a product like this, I needed the car electric revolution to go first,” Bergström says. “When I talked to people in 2012 and said that I’m going to do an electric boat, they are like, you are crazy. But now when we are at the tradeshow, everybody is like, oh that makes sense why didn’t anyone do it earlier.”
Even if people are still skeptical about the concept, however, all they’ll need to do to become convinced is take a ride.
“Once you experience the power of silence, you never go back,” Bergström says. “It’s truly amazing.
Tips for Inspiring Creativity
Konrad Bergström has built a career around opportunity and creativity. A founder of multiple businesses, he’s always kept his eyes open for new concepts and has kept his ideas free flowing. Since 1980, he’s created businesses that ranged from snowboarding contests to stereo headphones. Bergström now is onto his next adventure, X Shore, where he hopes to change the world of boating by making it greener and quieter.
If you’re in a creative funk, here are three tips from Bergström for inspiring creativity:
Bergström initially wanted to start the boat company in 1996, so much so, that he trademarked the name X Shore before actually creating the company. Unsure of the direction he wanted to take, he waited until 2012, when after witnessing Tesla’s new technology with electric cars, he was inspired. It only was then that he knew wanted to build boats that were fully powered by batteries.
If at first you don’t find the right concept you feel comfortable with, especially when it comes to creating a business, be patient. Pursue other interests, and along the way, you may get the inspiration you were looking for in the beginning. Even if it takes 16 years.
But Also Be Persistent
“It took me a long time on different things,” Bergström says, “But sometimes, time is what you need because when you can think things over and over again, it does make you come to better conclusions, especially when you work in design.“
X Shore launched its first working prototype in 2016, nearly four years after officially moving forward on building an electric boat. However, just as Bergström was patient in coming up with the initial concept for the company, he was also very persistent when it came to the design and functionality of the boat. He wanted everything to be just right before releasing it to market.
Look Around You
Bergström was raised in a home of creative individuals. His mother was a theater director, his father was an engineer, his grandmother exposed him to nature, and his grandfather was an innovator in medicine with over 200 patents. Wherever he looked, he saw a creative role model.
However, according to Bergström, you can be inspired anytime and anywhere. You don’t have to be from a family full of creative individuals. It’s more about exposing yourself to different environments, people, and settings. You just have to “change rootings” as Bergström puts it. You can draw inspiration from playing with children, products you’re buying, or even the food that you’re eating.
“You just have to open your senses to make the right choices when it comes to creativity,” Bergström says.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Nick Allen
Direct download: FP278_Konrad_Bergstrom.mp3
Category:general -- posted at: 7:04am AEST
Wed, 20 November 2019
Content in a Flash
How Grant Munro and Flashstock created an agile solution for on-brand, custom photo and video—and reaped a big windfall.
For Grant Munro, nothing felt right.
He had always aspired to start his own business, but never knew what to pursue. He went on to work for larger companies as a software developer and product manager, but those paths didn’t feel quite right either.
Despite not having an explicitly creative background (what with coming from tech and software development), Munro finally found a pursuit that excited him—helping brands express themselves creatively.
He first came upon the opportunity after major clients he was working with at a creative boutique kept asking for help with creating custom visual content. As photo and video on social media were taking off, and major brands were seeking solutions for creating unique content, Munro realized it was time to start his own thing.
“It got to the point, I was like well, if I’m gonna to start a company, this seems like a pretty good one,” Munro says.
Good turned out to be great. In 2014, Flashstock was born, and it was perfectly timed to the rise of Instagram as an advertising platform.
As a leading custom content creation company with a global network of freelancers and contributors, Flashstock’s proprietary platform allowed hundreds of brands across the Fortune 500 to streamline on-demand visual content (think photos, videos, GIFs, and so on). With its steady growth, unique software, and a list of high-profile clients, Shutterstock acquired the Toronto-based company in 2017, after it had been in business just four years, for $50 million in cash. Flashstock was subsequently rebranded as Shutterstock Custom.
However, had it not been for a former employer making a change to its business model, Flashstock may never have come into existence.
This Seems Like a Good Company to Start
After those early stints at major companies and acquiring his MBA, Munro took his first steps into the startup world, joining a boutique social media agency in Toronto. That’s when he really started to find some joy in his work.
With his experience in product development and software engineering, he joined the company’s product team with the hopes of coming up with new ideas to increase their SaaS revenue. Along the way, he learned that he enjoyed the customer development process, and understanding clients’ pain points and problems.
As the company’s product business grew and it became established as an early player in social media management, the team realized that they no longer wanted to focus on traditional creative agency services, such as content creation.
“They viewed that as something that wasn’t a good type of revenue that they wanted to continue, so they discontinued offering it,” Munro says. “And because we were providing content mostly for social at the time, and some digital stuff, the clients were very unhappy about this.”
Munro was surprised by his clients’ reactions. Although this shutdown may have provided a temporary inconvenience, he assumed that someone else would simply take over their content production, maybe another agency.
That wasn’t the case.
The agency had created a formula for creating low-cost, quick-turnaround content for social media, and clients loved it. They didn’t want to see it go away, and they kept asking Munro for different solutions around content, despite the agency no longer providing the service.
Realizing that these questions would never go away, and that companies were not finding a solution for their content production, Munro got creative and took a risk.
“I ended my role there and then sort of rolled over and started Flashstock pretty much the next week,” Munro says. “And went to some of the early clients from the previous company that had requested help on the content side and offered up a solution that would basically connect them, through some software that I wrote, directly to freelancers all around the world.”
By acquiring early customers and refining the product, it provided Flashstock with some growth and sustainability early on, but not without some changes.
Visual Identity Calibration
When Munro initially started Flashstock, the positioning for the company was that it was an alternative to stock photos and videos. The messaging was working with marketing agencies, but brands were not as interested. Munro knew he had to change it up.
As Instagram was making some changes and starting to take off, Flashstock’s positioning went in a new direction. It was no longer just an alternative resource for stock imagery—it was now a place where brands could go for help in telling their stories in unique ways, using differentiated content, but at a much lower cost.
More brands started to buy into this concept, recognizing that creating custom content on a large scale posed a great challenge. Major corporations didn’t have the time to find freelancers and manage the creative process, so they need needed a service to do that for them. They needed Flashstock to do this.
Munro first and foremost needed to come up with a way for a brand to communicate in a non-ambiguous way what it stood for and their target audience. And most importantly, all of this needed to be presented in a way that a freelancer could understand, despite never meeting the client.
“If you’re a big organization, it’s usually okay , because when you’re creating content, you’re usually with the people that are creating it,” Munro says. “But when you’re in this networked world where you’re communicating through software and you’re never talking to people, that level of ambiguity breaks the system. So we needed to come up with a way to solve that, frankly, for our own survival.”
Something Munro calls visual identity calibration.
This phrase describes a system in which a brand enters its information and describes its identity to Flashstock, and then the Flashstock team puts the brand through an exercise to pin them down on the right details. The end product is a well defined set of creative variables, which Flashstock then provides to their freelancers to create new, on-brand content.
The system garnered great feedback and has been praised for its innovation in solving this communication pain point. So much so, that some companies have even used a lot of these tools internally to communicate with each other, according to Munro.
Power of the ‘Gram
Around 2014, Instagram really began to open up its platform for anyone to be able to post and create company pages, and major brands wanted to get in on the action. In order to fully take advantage of it, brands would have to post often, but on the cheap for it to make sense for them financially.
This was right up Flashstock’s alley.
“Every organization wanted to be on the platform, but because there was no paid promotion behind it, they wanted the cost of the content to be as close to zero as possible,” Munro says.
This demand allowed Flashstock to be able to acquire new clients regularly, as many brands wanted to create content for Instagram, but not many agencies were offering this custom service at an affordable price. With Flashstock, brands could log in to the platform, find contributors around the globe, and receive on-brand content in a timely fashion.
“I was really able to complement what a traditional creative agency was doing and not really be a competitive threat because they didn’t want to create that type of content,” Munro says, referring to custom content at low cost.
Soon thereafter, Instagram turned on its ad platform, allowing brands to really promote their content that they made native for the platform. Once Instagram flipped this switch, it really took off as an effective place for brands to advertise, and Flashstock’s growth took off with it. The rest, as they say, is history.
The company grew extremely quickly, and within just four years of operating, was acquired by leading stock photography company Shutterstock.
Today, Munro is the senior vice president of Shutterstock Custom, where he has been since Shutterstock acquired Flashstock back in 2017. The division operates as its own unit, where it continues to provide major brands with quick, authentic branded content.
As for Munro’s future, and whether he’ll ever return to entrepreneurship, he’ll never say never.
“Right now, I’m still with Shutterstock and I plan to be with Shutterstock for some time,” Munro says. “When you’re a startup, you’re out there doing it alone and sort of fighting for your life, and then when someone takes you into the fold like Shutterstock has, they provide you with a ton of resources. So, we’ve got a bunch of unfinished business that we have left to take care of.”
3 Tips For Scaling A Creative Company
When Grant Munro decided to start Flashstock, he was learning everything in real-time. Building a company culture and fostering creative talent were all new to him. Fortunately, Munro was a quick learner. He found the right formula for success and company growth, and in just four years, sold Flashstock to Shutterstock for $50 million.
Here are three of Munro’s tips for scaling a creative company.
Know Your Customer
During a stint at a startup, Munro learned how much he enjoyed the process of customer development and understanding what a company’s pain points were. By really diving in deep and talking with his clients about their problems, or even understanding your own company’s problem, it becomes easier to think of novel solutions, or to have “aha” moments.
When you’ve invested the time into knowing the problem and understanding the ecosystem of that problem, you open yourself up more to those flashpoints of creativity and resolution. If you don’t spend the effort doing customer development, you’re making it harder on yourself, maybe not now, but later.
“I feel like a lot of that gets overlooked at companies of all sizes,” Munro says. “Where they almost have to reinvent the wheel every time they want to launch a new campaign because they haven’t created that discipline around customer development.”
Go Chat With Someone Who’s Done It
When a person sets out to create a product or scale a business, they tend to focus first on what they’re good at and what interests them. And if there is a challenging task ahead that may be intimidating, it is quite natural for them to put it off and go back to working on something they’re good at. This can stunt the growth of your business and make it hard to scale.
Munro suggests that if you’re struggling with a component of your business, or need some guidance, go talk with someone who’s done that task before.
“When you talk through your current priorities with people who have sort of done it and been there, they can help you recalibrate those ,” Munro says. “And they can help you say, ‘No, no, you don’t need to write another line of code, or you know, you don’t need to tweak your designs anymore. What you need to do it is set up your accounting software.’”
Define Your Core Values and Mission
Flashpoint’s growth was very, very fast.
Within the company’s first few years, they had grown to around 80 people, so they had little time to set up any processes, let alone establish values or have a clear company mission.
It was when he was repeatedly asked questions about the company’s future, and he realized he didn’t have a hand in the interview process with some key employees, that he felt it was time to create a company mission and values.
With the help of a third party to facilitate a retreat, Munro and key members of the team came up with Flashstock’s mission and values. And immediately, he saw results across the company. It would help them formulate an employee handbook, and to use these values in the hiring process.
“It simplified everything,” Munro says. “We would reference them all the time. From a creativity perspective, people feel really comfortable, people feel really consistent, people feel really welcomed their ideas based on the culture and that sort of frees up their thinking.”
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Nick Allen
Direct download: FP277_Grant_Munro.mp3
Category:general -- posted at: 6:27am AEST
Wed, 13 November 2019
Rise of the Urban Beardsman
How Eric Bandholz challenged the stereotypes of bearded men and built a booming community with Beardbrand.
Eric Bandholz didn’t like being put into a box.
In his former life as a financial advisor at a big bank, for example, he was expected to fit the stereotypical facade of a banker—suit, tie, clean-shaven.
He didn’t like it, so he quit.
With his newfound freedom, Bandholz embarked on an entrepreneurial journey, all while sporting a fresh, full beard. While he loved his rugged new look, he noticed it was happening yet again. This time, he found himself stuffed in a box with the likes of ZZ Top and the guys on Duck Dynasty.
Of course, Bandholz didn’t identify with any of these well-known bearded figures either. And he began to realize that other full-bearded men from all walks of life didn’t fit this mold either.
“I ended up going to this event where I sort of meet other guys like me, like stay-at-home dads and ministers, salespeople, doctors, lawyers, who are all rocking beards and they didn’t really fit the traditional stereotype,” Bandholz says. “So I was thinking about it. … Who are these people? How do I describe them?”
Seeing there was a broad community of bearded men without a home to call their own, Bandholz founded Beardbrand in 2012. Along with co-founders Lindsey Reinders and Jeremy McGee, Bandholz created a community where bearded men could unite, evolving later into a full-fledged lifestyle brand complete with their own beard care and styling products.
With an army of loyal followers on social media, which includes a YouTube channel with over a million subscribers, Beardbrand has grown into an “upper seven-figure business” with ambitions to reach eight in the near future.
Bandholz has come a long way from his suit-and-tie-wearing days.
In the Beginning
In 2011, Bandholz was working for Merrill Lynch in Spokane, Washington, as a financial advisor. It was a respectable career that had a bright future and potential for growth, however, it wasn’t a future he saw for himself once he was in it full time.
Although he loved the work of financial advising and investing, it was stuffy atmosphere and the overall “bank life” that Bandholz knew was not for him. Not wanting to spend another moment in a job that wasn’t a good fit, Bandholz packed up his portfolio and moved on.
The next move?
With a background in marketing prior to his career in finance, Bandholz founded Sovrnty, a startup with a mission to help companies set up marketing automation. Although he had great plans for the business, it never took off.
“I was like one of those gurus. I’d never done it, right?” Bandholz says. “So I’m telling people to do something that I had never really done.”
Unable to sell businesses on his idea, he shifted Sovrnty’s focus to something that he was good at, which was designing and building WordPress sites. Although he was getting some business, it still wasn’t enough. He was pulling together around $2,000 a month at Sovrnty, but he was mainly relying upon his wife and her full-time job to keep the lights on.
Always searching for new clients and ideas, Bandholz was a regular at networking events. And at whichever event he attended, he was always getting called out as one of those cliched bearded figures.
The light bulb went off.
If he didn’t like to be lumped into the stereotypes about bearded men, there had to be others who felt the same. These guys weren’t lumberjacks, roadies, hillbillies, or hipsters, but how exactly would he characterize them? What would he call them?
He settled on “urban beardsmen.”
And in 2012, Beardbrand was born.
The first thing to launch was the blog, Urban Beardsman, which would become a place where Bandholz could help foster a community and connect with other men who didn’t fit the Grizzly Adams stereotype. Beardbrand would soon follow, an organization that united that community of urban beardsmen. There they could also find the tools they needed to feel confident about their beards and personal styles.
But getting from simple blog to full-fledged business proved to be a difficult task.
Although Bandholz was still working at Sovrnty to help make ends meet, he had high hopes for Beardbrand. However, a clear vision on how to grow this new community was nowhere in sight.
“Aw man, it was terrible. It was just terrible,” Bandholz says. “There was just no strategy at all in those early days.”
The community was growing, but it was hardly going viral. He was posting regularly to Urban Beardsman, had a Tumblr page, and posted some videos to YouTube, but nothing was really taking off.
Despite its middling traffic, the blog was the only one of its kind back then, which by default made Bandholz an expert on the topic of beards. Because of its uniqueness, the Urban Beardsman would catch the eye of a reporter at The New York Times who was writing an article and wanted to quote Bandholz.
As Bandholz waited for the Times article to be published, he convinced friends Reinders and McGee to join him and collaborate at a Startup Weekend, where they could share their ideas on potential projects. They originally came together to work on a different startup idea that Reinders had, but it soon became clear that they didn’t have the capabilities to create her software product in house.
Needing a new business to work on, Bandholz proposed his side project.
“I was like, hey, I got this Beardbrand thing and this New York Times reporter is going to quote me in an article,” Bandholz says. “Why don’t we turn that into something?”
And turn it into something they did.
Reinders and McGee were on board, and in 2013 the business arm of the company was born. Without much capital to start making their own products—they only put $30 into the business at first—the team opted to become an ecommerce company that sold beard oils from a vendor with standard retail markups.
“When the New York Times article posted, we were able to get a couple sales,” Bandholz says. “And I think the first month we did like 900 bucks in sales. And then it was kind of like 900 bucks, 1,000 bucks, 600 bucks … 2,000 bucks, 3,000 bucks, 7,000 bucks. And then it just seemed like we got a lot of momentum into that fall season and holiday season.”
After almost seven years in business, which included an appearance on Shark Tank (spoiler alert: they didn’t get a deal), the momentum is still going strong. Beardbrand continues to grow in community, employees, and revenue, and is now located primarily in Austin, Texas with about 15 team members and 120 products sold through their website.
Bandholz, whose main focus is on the creative direction of the company, still has major plans for the future of Beardbrand. They intend to try their hands at branching out to create their own custom barbershops, where they can create the same experience a customer may see in a Beardbrand YouTube video. They do this by not only creating an amazing barbershop environment, but also by hiring the right barbers and stylists and coaching them on the information a customer is looking for when they sit in the chair.
“[Customers] can to go Great Clips or they can go to their local barbershop and get a really good haircut,” Bandholz says. “But what we want to deliver is that education similar to how we deliver it on our YouTube Channel.”
Whether it is through their popular YouTube videos, blog, or even future barbershops, Beardbrand will always work towards its core mission.
“We’re not just here trying to sell products for vanity,” Bandholz says. “We believe that when you invest in yourself, you become a better person and you make the world a better place. You live longer. … I feel this responsibility that I’ve got to get that message out there as much as possible so that we can make the world a better place.”
3 Content Marketing Tips for Bootstrapped Startups
When Eric Bandholz first started Beardbrand, cash was minimal. He was still working at his first company, Sovrnty, and was building Beardbrand on the side. They knew that they didn’t have the money to pay for marketing, but what they did have was their time to invest in content marketing. Bandholz knew that with the right content and strategy, they could reach millions of people.
“Content marketing was essentially our only option in those early days,” Bandholz says. “We didn’t have cash to put into the business. So it started with sharing our story on Reddit. It started with, you know, reaching out to people on Twitter and sharing our product with influencers and not paying them for it.”
Being proactive with their content marketing strategy in the beginning was a key component of Beardbrand’s success. Here are three tips to help your startup bootstrap using content marketing.
Get Started, But Be Patient
Without a marketing budget, Bandholz turned to content marketing to help draw eyes to Beardbrand. It was cost-effective, with the bulk of the investment being his own time to create the content.
The trick was not only to post content and to post it often, but to also know that in the beginning, you won’t get much of a return on your investment. Content marketing is a long-term play. The first step is to just create something. Anything.
“While it does build up over time, it also doesn’t do anything in the beginning,” Bandholz says. “And you really have to like… stoke that fire and get it going. And you get it going by creating, you know, 20 or 40 or 50 pieces of content that start to build that foundation.”
Do What You Like To Do
With so many different funnels and channels to produce content for, it can be intimidating on deciding where to start. According to Bandholz, the type of content you should produce first should be for the channel you’re most interested and passionate about.
“I think you look at yourself and what you like to do,” Bandholz says. “Are you more of an audio person? Then maybe podcasting’s the way to go. Are you more of a writer, you know, introvert? Do you like to express yourself through words? Then blogging is a great way to go. Then, of course, if you’re narcissistic like me…then video is a great source for you.”
The more passion you have for a certain medium, the more likely you’ll churn out content and stick to the long-term plan.
Not all content is created equal, and it’s important to understand the goal for each piece of content you create. At Beardbrand, they use the sales funnel model, where their “content at the top” is there to bring awareness to the brand, the “middle” is used to introduce the products, and the “bottom” hopefully helps to turn the reader into a buying customer.
“Sometimes we have content that is there to inspire people,” Bandholz says. “You know, it’s not going to drive any sales. It’s just there to help build awareness to the brand. And then other good content is stuff that drives sales and gets engagement, or gets people talking and spreading the word.”
By diversifying the types of content you create, you enhance your chances of attracting different types of readers and content consumers on different platforms. As Bandholz says, as a creator, you don’t know exactly what part of the funnel really “helped them become a customer.” For instance, the customer may have first learned about your company through a YouTube video, but it was perhaps the blog or an email newsletter that really got them to trust you and that turned them into a paying customer.
Whichever type of content strategy you decide to implement, one thing is for certain—just get started. You never know who is reading.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Nick Allen
Direct download: FP276_Eric_Bandholz.mp3
Category:general -- posted at: 9:46am AEST
Wed, 6 November 2019
The dramatic tale of how Marc Merrill and Brandon Beck set out to make a better video game, and changed the industry with League of Legends.
Marc Merrill and Brandon Beck were typical college roommates. They went to class. They studied. They played video games. OK, a lot of video games.
But they also shared an avid interest in business, including the business of their favorite hobby. So while other gamers helplessly yelled at their screens when a glitch popped up or they felt burned by an expensive new sequel, Merrill and Beck thought up ways they could fix these shortcomings—ways they could make the industry and the gaming world better.
Today, the duo co-chair Riot Games, a video game company that places a unique focus on the needs and experiences of gamers. As their signature game League of Legends approaches its 10th anniversary, it operates in 19 languages worldwide, has inspired a line of Marvel comics, and holds competitive tournaments, with the latest championship drawing nearly 100 million viewers.
How does a free game that can only make money through selling virtual goods become such an enormous business? The answer is in the radical vision for gaming that Merrill and Beck strongly believed in, and were determined to realize—even if it meant challenging game publishers, investors, developers, and themselves.
As Merrill tells it, the story of how they pulled it off is legendary.
From Passion to Plan
“We had two shared passions,” Merrill says. “One being gaming—we were both incredibly hardcore gamers, and we loved playing games with each other—and the other being business.”
Merrill and Beck were studying business at USC and, although they spent every spare second gaming, they never imagined it would lead to a career. Even as they worked toward their “responsible, adult jobs,” they constantly bounced ideas off of each other, dreaming up ways to solve the problems that irritated them most as gamers.
After they graduated, and Merrill moved into a career in banking and Beck went into consulting, they continued the conversation in their West Hollywood apartment.
They, and many other gamers like them, found the current model of game development frustrating. The industry ran on new releases, sending gamers to retailers to buy endless $60 sequels to beloved games. Meanwhile, those who played the games didn’t actually want a brand new game or a sequel to what they were playing. Instead, they would have preferred updates, new features, and new adventures to appear in the game they already loved.
Was there, Merrill and Beck wondered, a way to create a game that first and foremost served the wishes of gamers, rather than the needs of retailers? One that could grow over time with the players?
They sensed that the video game industry was headed toward a significant disruption, and as the days passed, they began to realize they might be the disruptors.
“We, as passionate players of games, had identified that we felt really underserved at the time,” Merrill says, “and so had a whole thesis about how to go create a company that solved a problem that we deeply felt.”
So, when the twentysomethings weren’t working diligently away at their respective day jobs, they drafted a business plan for a new kind of game. But they were nervous about taking the plunge, and they wanted to be sure this was something they could see all the way through before moving forward. So they asked themselves three crucial questions.
Was there a demand for what they wanted to build?
Could they build it?
Would they be able to find the necessary capital to turn their dream into a reality?
The moment they felt comfortable answering yes to each of these questions, they charged forward and, in 2006, Riot Games was formed.
The creation of something revolutionary is never easy.
“We’ve had many catastrophic circumstances that should have torpedoed the company,” Merrill says.
From day one, they knew that overcoming their lack of credibility was going to be the biggest challenge in creating the game they were imagining.
“Knowing what we know now, we literally wouldn’t have invested in ourselves back in the day,” Merrill says. “We ironically believe that our naïve optimism was one of the incredibly important ingredients for success.”
Experienced developers were hesitant to join the team because of Merrill and Beck’s inexperience and lack of funding. Meanwhile, shrewd investors were skeptical about hopping on board due to their inexperience and lack of experienced developers. But Merrill and Beck moved forward anyway with the best they could recruit, and they strove to build credibility.
At one point, they tried to bring someone on board as CTO and executive producer who had thrived in the industry for years and even had a publishing background. But as the three of them worked to recruit talent for the business, Merrill and Beck soon realized that they didn’t quite gel with their new teammate.
They felt more drawn to interns who lacked experience, but understood the vision of the game and had great potential. Meanwhile, the senior staffer tended toward experienced developers the co-founders would not have chosen themselves.
Because they didn’t want to come off as overpowering, micromanaging founders, Merrill says they let the developers work freely. But this soon created a serious problem. Merrill says they discovered that the lead developer had plans to steal the company and had been secretly pitching his own version of the game to other publishers.
The cultural divide Merrill saw growing within the young company, punctuated by this betrayal, inspired the co-founders to become far more hands on with their business.
“That was a really galvanizing event that helped teach Brandon and I that when experienced individuals say, ‘Trust me, because my 20 years experience in this particular industry or this field means that I know what I’m talking about,’ it’s really important to say, ‘Well, enlighten us,’” Merrill says. “If somebody can’t articulate a good rationale for whatever it is they’re doing, even if it’s a deeply technical concept, that’s a red flag.”
Merrill and Beck righted the ship, took a more active role, and set out toward building a game demo that would illustrate their idea to investors and publishers. But after constructing the demo, they realized they didn’t have the internal talent yet to fully realize the game they envisioned.
So they established an advisory board, through which very experienced, talented developers could gain free shares in the company by mentoring Riot Games’ young developers, without leaving their full-time jobs.
Over time, the relationships with those on the advisory board grew. While initially, those developers would have said no when invited to join the the team, things began to change. “As that equation changed, those eventually turned into yeses,” Merrill says.
With each new, experienced addition to the team, the game development leaped forward with new input and inspiration for the junior talent, pushing the limits of what was possible for the company.
While the game slowly took shape, they started approaching publishers with the idea. Unfortunately, Merrill says, every publisher they spoke with believed the concept of a free battle arena game that generates revenue through in-game purchases was insane.
“Our whole business model was very unproven at the time,” Merrill says, “because our game was planning to be free, and we were literally selling virtual goods.”
Because of this, they realized they were going to have to publish the game on their own. And that was going to require some serious cash—$20 million, in fact.
“We had no idea if we were going to be successful until spending about $17 million of other people’s money and bringing the product to market and then starting to get validation,” he says.
This made investors nervous, and Merrill says that 50 VCs turned them down before Benchmark and FirstMark Capital decided to come on board at $7 million. Riot Games was given the first half of the investment up front, with the second half to come after they had conducted a 1,000-user beta test.
The only problem was that in 2008—before widespread smartphone adoption or cloud computing—the technology was not yet in a place to support the user base they anticipated for their game, meaning they had to build that, too.
After briefly partnering with a startup in an attempt to outsource the creation of the necessary backend, they were $1 million poorer and no closer to what they needed. So, in the second half of 2008, they worked to build the platform internally from scratch.
With only three months of funding left in their account, Merrill says they hired 1,100 people in the Philippines to beta test the game in internet cafes. The test was successful, and Riot Games lived on.
Charging Toward Launch Day
But Riot Games’ potentially catastrophic struggles were not in the rearview just yet. With launch day rapidly approaching, Merrill, Beck, and the 55-person team prepared to self-publish in North America and to publish in Europe through a licensing deal with GOA, a division of Orange Telecom. They even had a set “ship date” despite the downloadable nature of the game, to try to build credibility with media outlets skeptical of the level of quality found in most free games.
Everything was ready to go. At least it seemed like it was.
Rather than building the store feature of the game themselves, Merrill says they had hired an online store provider to handle the construction and management of the in-game shop. But as the beta tests progressed, the store struggled to keep up with growing demand. They tried removing unneeded features, but it made little difference.
The store was the hinge on which the door swung. It was the only way for the free game to generate revenue, and it housed the players’ in-game wallets and account systems, meaning that without the store, players wouldn’t have any content.
Because of this, Merrill was eventually forced to conclude that, once again, it would be better for them to build something of their own from scratch that could meet their needs. He reached this decision two weeks before Oct. 27, 2009, the set launch date for League of Legends.
It was time to get creative.
To buy themselves the time necessary to build the store, the game started with a “launch party,” during which all players could access all of the game’s content for free. The strategy worked well, attracting tens of thousands of players to the game, and once the shop was introduced, the paid content began immediately generating revenue.
But Merrill says that the main reason League of Legends succeeded wasn’t their ability to attract new customers. It was their ability to retain them. So when the game continued to grow steadily in North America but remained stagnant in the European market, they had to take a closer look at what was happening underneath the hood.
In North America, Riot Games made players feel heard, addressing their concerns with regular two-week patches. The European publishing partner, however, was unable to meet this same level of service, and Merrill says this is what caused the stagnation.
So they immediately set to work unwinding the deal they had made with GOA, and then had 45 days to create a European entity, build an office, hire staff, create servers, and get the whole operation rolling so that gameplay in Europe would go uninterrupted.
Despite the hassle, the change made all the difference.
“We were able to operate differently and demonstrate why quality service matters because the second we took it over, we started growing,” he says. “Then, Europe started growing faster than North America.”
Slowly but surely, month over month, League of Legends gained an avid fan base until it became the worldwide sensation it is today.
But there was one more dream Merrill and Beck wanted to try to bring to life.
A New Kind of Sport
Both Merrill and Beck grew up loving and playing sports in the same way they loved and played video games.
“We always believed that competitive online games of a certain type had all of the same dynamics that ‘real sports’ did,” he says.
They knew that someday, a game would become an arena sport just like basketball or football. So why not theirs?
In July 2010, they introduced the first significant update to League of Legends called Season One. With this update came the concept of singles and team rankings. This enabled them to launch a tournament system that would end in a final tournament in Sweden for a $100,000 cash prize.
Interest in the tournament exploded as gamers battled for the crown. But Merrill says the realization that this could actually become something big came not from the competitors, but from the fans.
During their first end-of-season tournament, over a million viewers tuned in to watch.
“For us, that was validation of, like, ‘Wow, a lot of people are like us and really do want to watch games played at a competitive level.’”
From that moment, the esports aspect of Riot Games grew rapidly. They established leagues worldwide and a world cup system similar to soccer.
Today, they operate 13 leagues across the globe and hold their World Championship in the Staples Center, home of the LA Lakers. Merrill says there is even a player in China sponsored by Nike and that their most recent World Cup had more than 99.6 million live viewers, besting the viewership ratings for the Super Bowl.
“As a League player, there’s always something to watch,” he says. “There’s always something to talk about. There’s interesting drama between teams. There’s players and pros to aspire to or to become fans of. There’s events that are happening all around the world.”
Podcasts have sprung up analyzing players and teams, and fans cheer on players from their country the way they would with any other sport.
Merrill says that about half of League players will never spend a cent in game, but that’s OK with him.
“Our business is fundamentally about keeping players entertained and engaged over the long term,” he says, “and our view is that the only way to really do that is by delivering incredible value to them.”
And if they don’t buy in-game items, they might buy one of the ancillary products, like the comic line currently running through Marvel. Or they may simply tune in for big events to cheer on their favorite players.
While they work to further establish esports leagues, Riot Games is also striving to improve every aspect of the game itself. Merrill says that, since launch, they’ve redone every aspect of the game multiple times, improved their tools pipeline, overhauled their engine, and expanded their team to 3,000 globally.
They are also looking into the creation of new games.
“Riot is Riot Game right now, we’re not Riot Games,” he says. “The ‘s’ is still aspirational.”
But Merrill knows that there is so much more to come for the video game company he and his college roommate founded to solve the woes of gamers like them.
“We really feel like we’re just getting started.”
Marc Merrill’s Tips for Building a Successful Business
When founders set to work on their first companies, they are faced with a whirlwind of concerns, needs, and potential goals. But Marc Merrill believes these four items should be at the top of every early-stage founder’s to-do list:
Set a Clear Mission
“Having a deep sense of purpose and mission can really carry you through the darkest days, and also carry you and your team to great heights.”
Build the Ideal Team
“In our view—and I think in many businesses—the team is by far and away the most valuable asset. So getting the right people, building the right culture, being thoughtful about mission and purpose…those are all really important things to evaluate when building a team.”
Establish a High Level of Trust
“I think Riot’s success has largely been fueled by incredible people who are very committed to our mission and are willing to acknowledge mistakes and learn rapidly through failure because there’s a lot of trust.”
Don’t Get Discouraged
“You’re going to have days where you feel like you can take over the world, and there are so many possibilities, and then other days where you’re like, ‘Oh my god, how are we possibly going to solve this problem. We’re so in trouble.’”
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Erica Comitalo
Direct download: FP275_Marc_Merrill.mp3
Category:general -- posted at: 9:44am AEST
Tue, 29 October 2019
Turning Obsession Into Success
Real estate mogul Grant Cardone explains his obsessive approach to business, and his 10X Rule for goal-setting.
Grant Cardone, a self-made real estate mogul, sales and marketing trainer, and bestselling author, credits his success in life to persistence and an obsession with being the best. That, and his time working at a car dealership.
“The first real job I had was my sixth job,” he says of the gig. “I was fired from my first five. Fired from my sixth job. I was fired six times, but I wouldn’t leave the last job. I just would not leave.”
Part of the reason Cardone’s bosses kept getting so fed up with him was that he was a terrible driver. Not a great quality when working in the car business, as he kept smashing up the merchandise. But his relentlessness made up for it.
“I would wreck their cars and they would fire me,” he says. “And then before I would leave, I would go sell something and they would keep me on. Selling something was always forgiveness.”
By the time Cardone finally did leave, he was the highest-grossing salesman at the dealership. He was the first one there in the morning and the last one to leave at night, his goal always being to make himself indispensable to the company. And to make a lot of money.
So yeah, Cardone is, well, obsessive. Coming up from nothing, financially speaking, he quickly learned that was the way to rise to the top. It’s helped him achieve his lifelong goals to make money, have a successful career, and help people along the way. Now, Cardone’s exploring that approach to life and business with his new book, appropriately titled Be Obsessed or Be Average.
The Origins of Obsession
In his book, Cardone writes, “I didn’t have a father who could lead me to the land of the rich, lend me a million dollars for my first real estate deal, assist with political connections through introductions at country clubs, or show me the ways of business.”
His fate was forged, instead, by the tragic death of his father when Cardone was just 10 years old. Until that day, he had watched his father work hard to provide for his wife and his five children, starting a variety of businesses, from opening a grocery store to starting a life insurance company, and finally becoming a licensed stock broker.
His father’s “drive and his obsession,” as Cardone puts it, were inspiring. And when he died, leaving the family behind to get by on their own, Cardone became obsessed himself—with the idea of creating enough wealth so he would never worry about money again.
But his was a winding path to success. He carried around a lot of anger about his difficult situation, and fell into the wrong crowd in high school. He started smoking and drinking. He got into a lot of fights and a lot of trouble. By the time Cardone graduated, he writes in his book, “I had a massive daily drug problem.”
He did go to college, however, fulfilling a promise his mother had made to his father. He graduated with an accounting degree after what he called “five long, miserable years.”
At 23, he was broke and still doing drugs every day, just barely getting by at his car dealership jbo. “I was 20 pounds underweight and had a gray complexion, thanks to the drugs,” he writes.
At 25, his mother gave him an ultimatum: get clean or never come back. Cardone checked himself into rehab, and although he says it didn’t address the underlying problem, he discovered he could get by without drugs. He vowed to never touch them again and to use his “addictive personality” to his advantage.
Turning It Around
After rehab, his boss gave him his job at the dealership back, a move that Cardone says probably saved his life. He worked harder than any other associate, and doubled his earnings in the process.
“It wasn’t until I figured out how to make somebody else rich that I could be rich,” he says.
Cardone finally left his sales job at the car dealership and moved to a sales consulting firm. “I treated my little department as, ‘This is my company within a company.’ And I wanted to make that company as a strong as possible,” he says.
When he left the firm to go out on his own, it was because he felt there was no more opportunity to grow. So at 29 he started his first company, Cardone Automotive, a sales consulting business for the automotive industry. By 30, he’d already made his first million, but it didn’t come easy.
“That was a company where I was cold-calling other businesses across the U.S. and Canada.”
Cardone was working hard, doing what most entrepreneurs do and devoting all of his time to his business.
“I was just hustling. Everything was a transaction...to get money and pay the taxes and have a little bit of money left over.”
And even though his company was making money, year after year, Cardone knew he had to do more to become a true entrepreneur.
‘You’re Not a Business’
Cardone had never stopped to think about what an entrepreneur really is. Sure, he’d started a business and it was running smoothly, but he wasn’t reinvesting in it. He wasn’t thinking about marketing or expanding. Instead, he was following the old adage, hard work pays off.
“All I was doing was knocking on doors. It was pure effort. I wasn’t spending money. I wouldn’t spend real money until I was 50 years old, about 10 years ago, when a guy said, ‘Bro, you’re not a business.’”
Cardone knew it was time for a change if he wanted to achieve the kind of success he’d set his sights on. He had to rethink how to do business, how to expand, and how to get the word out.
“The first thing I did was flipped everything. I could no longer be sales first. I had to be marketing first. Marketing and branding. Because to me, a business is, I can walk away from it and it will still operate. I was a guy. I was no different than when I was 30, just pounding doors.”
That’s when he came up with the 10X Rule.
The 10X Rule
In 2011, Cardone published his personal business philosophy in his first book, called The 10X Rule: The Only Difference Between Success and Failure.
The 10X Rule challenges readers to estimate the amount of time and effort it will take to achieve a goal and then multiply that estimate by 10. It also trains readers to think differently about what they can achieve in the first place.
Cardone writes that most people underestimate themselves and what they can achieve. If they identify a goal, say making $100,000 in a fiscal year, they should multiply that by 10.
“10X woke me up. 10X was not for the public. 10X was for me,” he says.
He created it because he was trying to figure out why, despite his success as an entrepreneur, he wasn’t growing the way he had expected.
“I work hard, I’ve got great products, I’ve got a great reputation, great reviews. People like me. They like my content. They like my content actually better than they like me. That might have been an exaggeration.”
Is 10X totally achievable? Not necessarily, but that’s not really the point of the rule. It’s to shake up the way you perceive what’s possible.
“It’s not achievable, but it’s worth it. You have four, five million dollars sitting in an account today. What if you had $50 million? It’s not achievable, but it’s worth going for it. It’s fun shit, man.”
Even if you can’t achieve 10X, anything you hit will surpass your original goal.
Investing in His Brand
Cardone started toward his own 10X goal by spending the money he made, reinvesting in his business, starting or acquiring new businesses, and making himself known across industries.
“People knew me in a particular industry. They didn’t know me in every industry. So the first thing that I took on was that I need to get people know me in every industry while I continue to knock on doors and pay my bills.”
He began by writing books and business programs, which got his brand out there while generating their own money. His next two businesses were sales education platforms, Cardone Education and Cardone On-Demand, online training seminars that established him as a subject matter expert and drew in revenue from large and small businesses alike.
He also started to grow his influence on social media.
“I started with one follower, just like everybody else, and I was the follower. My second follower was my wife because I created an account for her on YouTube and said you’re going to follow me.”
Currently, he has 6.1 million followers on Facebook, almost 395,000 followers on Twitter, 2 million followers on Instagram, and almost 1.2 million subscribers on YouTube.
“I’ve grinded for every one of those followers. And delivered content to them so I could scale out.”
His goal was to expand his reach beyond the U.S., and bring in a global audience for his 10x message. He now holds speaking engagements that attract thousands across the globe. He consults for major brands, and his videos on Grant Cardone TV get thousands of views.
Investing in Himself
The best business advice Cardone has ever received came not from someone in business, but from his mother, he once told CNBC. “She said, ‘The best investment you will ever make is in yourself. It’s a no-lose deal. It will always give you a return. Nobody can take it from you. It’s yours.’”
Cardone looks for every opportunity to improve himself, whether that’s a charity event that helps him build new relationships or a seminar that will help him acquire new skills or refine old ones.
“People should be invested in the beginning, just in themselves. Every chance you can get to go to something that could possibly help you. If it has a 1% chance of even adding to the value. Spend the money. Don’t sit on the money. Money’s useless.”
He eschews saving money or even spending it on something most people wouldn’t think twice about—buying a house.
“That’s the dumbest thing anybody could do. That’s the dumbest thing I ever did was buy a house. I bought a house and I didn’t improve myself. I spent more time picking furniture out than I did , “Hey, how do I fix me?”
What’s 10x for Cardone, Now?
So what’s the next big move for Cardone? Turning those millions into billions, of course.
“10x is how do I do a billion dollars a year in income? And then how do I do $10 billion in real estate? How do I have a $10 billion real estate portfolio? How do I start competing with these banks so they’re like, you know what? We really don’t like all this noise you’re making. You’re a noisy guy. And we’re kind of getting tired of it.”
Cardone’s ability to disrupt industries and make noise has landed him where he is today, as an influential sales trainer and real estate mogul.
He turned an obsession into a reality and used a quirk in his personality to create a global empire.
Advice for Budding Entrepreneurs
Cardone now runs five privately held companies, including Cardone Capital, an $800 million real estate company. His 30-year success as an entrepreneur has given him the unique opportunity to share insights with other budding business moguls. He shared with us some of his best bits of advice.
‘Make money your battle cry.’
“Make money. Make money. Make money your battle cry. Go collect money. Don’t make money, just go collect money. Have a great product. Have a great service. Over-deliver. Collect money. Charge for it.”
Put your team in the spotlight.
“If you notice, I show off my people a lot. I don’t keep them behind the scenes. I’m like here, let’s have more than the Cardone show. Why do I do that? Where did I learn that? Great companies.”
Don’t cling to your money—reinvest it.
“The first sheet of paper I get every day is how much cash I have. That’s not for bragging rights. It’s because I want to get rid of it. It’s like trash. I want to get rid of this money. Money is being devalued worldwide right now. I didn’t say I have no reserves, but I don’t need $167 million.”
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Laurie Mega
Direct download: FP274_Grant_Cardone.mp3
Category:general -- posted at: 9:14am AEST
Wed, 23 October 2019
How Jack Zhang and the Airwallex team built a billion-dollar company in just three years.
By the time he was 30, Jack Zhang had already launched more than 10 businesses, with interests ranging from coffee to real estate.
While many of them were successful, Zhang never got to the point where he left his full-time job.
“I just tried to do different things to see if I could achieve something or feel happy about what I was doing,” he says, “but I hadn’t really found anything I was passionate about.”
He certainly wasn’t afraid of the hard work and long hours that came from starting and sustaining businesses, saying that “work was never a torture.” Despite all that time and effort he invested in each startup, he ultimately felt that none of these businesses ever amounted to much more than a new way to make some extra money. Nothing ever became a greater purpose.
With a passion for technology and a love for writing code, Zhang longed to do something within the tech sphere that would have a real impact. Like so many serial entrepreneurs, he finally found a business he was passionate about by looking at his own personal pain points.
Zhang would become the co-founder and CEO of financial tech company Airwallex, which eliminates foreign transaction fees in an increasingly globalized world. In doing so, he’s created a company that, in just three years, entered the $1 billion club.
While the creation of a fabled “unicorn” company was far more nitty-gritty and far less magical than one might imagine, he still owes a little bit of his success to that almighty and mystical force: luck.
The Magic of the Perfect Team
The idea for Airwallex came from the difficulties Zhang and one of the co-founders ran into while running import businesses between Asia and Australia. Sending international payments through a payment service provider (such as PayPal) not only slowed the process but piled on an unpleasant foreign transaction fee.
So, with his background in tech and foreign exchange trading, Zhang and friend decided to tackle the problem themselves. They soon invited three other friends on board as co-founders, forming the Airwallex quintet: Jack Zhang, Jacob Dai, Ki-Lok Wong, Lucy Yueting Liu, and Max Li.
With $1 million invested between Zhang and his first co-founder, along with an additional $2 million from outside investors, they began creating the first version of their product, geared toward the SME (small-to-medium-sized enterprise) market.
“ believed in the team we had at the time, and believed in the company’s vision, and believed we were solving something quite important in the global scale,” Zhang says.
And as the business grew, so did the team. But Zhang says that as they hired new people, they presented an intentional hurdle to ensure that new additions were passionate about their vision. Every new hire was required to take a pay cut to work at Airwallex.
Zhang says that, for ambitious, passionate, top-tier talent, the money isn’t the deciding factor in where they choose to work. He believes they pay far more attention to whether the work aligns with their passions and if the scope of the work presents an exciting challenge. And these were the kinds of people Zhang wanted to hire.
“I still think that the people willing to take a massive pay cut to join you are the most fundamental people who really believe in the vision,” he says. Even with that condition, Airwallex was able to scale from 80 to 320 employees in just 12 months.
While hiring was going well and the business continued to grow, because the creation of Airwallex cost so much, they flew through the initial $3 million investment and needed another round of financing to go to market. Turns out, building an expansive, global financial network isn’t easy.
Hard Work and a Little Luck
“My personal experience is full of luck, really,” Zhang says, “but also we put an incredible amount of effort into the business in the first 12 months. Me and my co-founders slept in the office every day.”
They put in long days, but that gave them a familiarity with the product that only comes from an all-in, hands-on approach. And the challenges didn’t stop Zhang and the rest of the Airwallex crew. It only made their belief in the product grow.
“When you talk to investors, they can feel your genuine passion,” he says. “That honesty—that genuine transparency—about how you want to solve , and you can describe it in detail.”
Investors ended up putting in another $13 million raised, but they were still only able to cover further development of the product. So they decided to begin pursuing other opportunities that could bring in revenue, rather than focusing solely on the SME market. They created a suite of APIs (application program interfaces) that would appeal to much larger corporations, positioning themselves as more of an infrastructure company. But they were still living on borrowed time.
Zhang says that, for the first two-and-a-half years, they didn’t bring in any revenue, with only three to six months of survival guaranteed at any given time.
And that’s where Lady Luck collided with crazy hard work, and the first signs of the unicorn-to-be showed its face.
“We just went from almost no transactions to processing billions of transactions a month,” Zhang says.
While long hours and business savvy played a major role in his company’s success, Zhang is also quick to credit forces beyond his control. He says plain ’ol luck is one of the reasons that his business took off, which perhaps accounts for Airwallex’s good timing and sudden influx of users.
Gazing Into the Future
Because Zhang and the rest of the Airwallex team focused on building a strong foundation and infrastructure, they were able to attract high-profile clients like MasterCard, and retain them when they came on board.
These important connections then put Zhang in the room with other top executives who were excited to try out Airwallex in their own businesses. And as the infrastructure grew through these strategic investments, it only added value to the business.
Today, Airwallex has built connectivity with more than 50 banks across the world, is equipped for international banking through accounts unhindered by borders, and grants access to competitive exchange rates and international payments, with more features on the horizon.
Zhang says he is always looking at least five years out, planning for the future of the company. He also invests time in learning from others who have been in his shoes by attending conferences and interviewing other CEOs.
“I spend a lot of time interviewing people to learn from people,” he says. “Whether they are good or bad, there are things I can learn.”
After three years of explosive growth, and now with the added pressure of leading a billion-dollar company, Zhang isn’t ready to slow down.
With his “get shit done and grow” mentality, he plans to continue taking Airwallex to new heights.
“Not everyone can do it. You have to sacrifice a lot of things," Zhang says. “Are you willing to sacrifice your house, your time with family, everything to do that? If the answer is yes, then maybe you are born to be an entrepreneur.”
To learn more about Airwallex, check out airwallex.com.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Erica Comitalo
Direct download: FP273_Jack_Zhang.mp3
Category:general -- posted at: 9:54am AEST
Wed, 16 October 2019
Suzy Batiz’s journey from bankruptcy to founding Poo-Pourri, a $100 million business that’s become a household name.
For many consumers, the initial reaction to Suzy Batiz’s product is laughter.
I know it was for me. I remember back in 2008, my mother waving me over to the checkout register of our favorite boutique soap shop, giggling uncontrollably. I saw the tiny bottle and laughed out loud myself. Then handed one to the cashier.
After all, you just can’t walk away from a product called Poo-Pourri.
But it’s Batiz who has had the last laugh. A little over a decade since it launched, Poo-Pourri has become a household name and a $100 million business. The all-natural air freshening spray, once a boutique-only brand, is now sold by major retailers like Target, Costco, Walgreens, and more. Poo-Pourri has taken the world by sweet-smelling storm.
Given her success, you probably wouldn’t have guessed that Batiz had previously gone bankrupt (twice!) and once swore never to launch another company ever again. With a list of former businesses so long she can’t even name them all, Batiz had always come up short in pursuit of her big break.
It wasn’t until she failed hardest and stepped away from the world of entrepreneurship entirely that she had her life-changing epiphany.
The journey from broke to multi-millionaire wasn’t an easy one for Batiz. But her commitment to creativity, willingness to remain flexible, and her indomitable spirit helped her to shake the stink of failure and bring lovely aromas to bathrooms around the world.
For years, Batiz was the kind of person who always had a full-time job and a side hustle, with another side-hustle in mind should the current one fail.
“I had a lot of businesses, and nothing seemed to really work long term. Nothing stuck,” she says. “But I was desperately trying.”
She’d owned a clothing store, a beauty salon, and a tanning salon to name a few, and she grew accustomed to taking big risks in the process. She learned early on how to bounce back from failure.
For example, Batiz went bankrupt for the first time before she was even old enough to drink. At 19, she took on a bridal salon, and at 20, the salon had gone under. But that didn’t slow her down.
“I was in this frantic race,” she says. “I was doing everything that you’re supposed to do, you know, pushing through.”
She continued trying new business ideas until, in 1999, she experienced her second bankruptcy. This one hurt far more than the first.
Batiz had sunk much of her own money into building Greener Grass, a recruiting platform designed to match employees with the right company cultures. If views were dollars, she would have been swimming in cash, but when the stock market crashed in 2001, so did her fledgling business. Batiz lost everything.
“They took away the big house, the two cars, and I had to face myself,” she says.
Batiz realized that all her life, she’d been chasing success—which really meant an overflowing bank account—without taking the time to find out what she was actually interested in.
“What’s worse than losing everything is losing everything and realizing you didn’t even have fun to begin with,” she says.
So, Batiz called it quits on the business world and decided to take some time away from it all for herself. During those years of self-discovery, she found the world of essential oils.
A Breath of Fresh Air
Ordinarily, if dinner party conversation trended toward discussing bathroom odor, it would be bad news for everyone involved. But when Batiz’s brother-in-law began to wonder over dinner if that unpleasant smell could be trapped and eradicated, sparks fired in Batiz’s mind.
After the time she’d spent working with essential oils, she realized she might be able to create something that would do exactly that. Off she rushed to her kitchen to spend nine months concocting the perfect blend of oils that would one day become Poo-Pourri.
In January 2007, she sold her first bottle.
“I really wasn’t interested in owning another business,” Batiz says. “I had sworn off business, but the product was so good, I had to bring it to market.”
She started with a website, and before long the wholesale requests came flooding in. Within a year, she’d brought in a million dollars in revenue. And it all happened through word of mouth.
“When you have an idea that is great, people tell other people about it,” she says. “I see a lot of people in founder stages stop at a good idea. And if you just have a good idea, it’s like pushing a train uphill. But when you have a great idea, people will stand on the rooftops and tell other people about it.”
Boutiques everywhere began selling little spray bottles of the cleverly named product, and before long, larger chains followed suit.
Seven years after launching, Poo-Pourri was bringing in $8 million in revenue, Batiz spent 12 weeks a year in Maui, and she truly felt like she was living the dream. But she believed her product could truly breakthrough and become the premier bathroom air freshener if she just made a big enough splash.
So, she decided to partner with the Harmon Brothers, the well-known creators of viral advertising videos, to create one of her own. You may recognize the Harmon Brothers’ name from their hit ad for Squatty Potty (yes the one with the unicorn you-know-what), or the Purple Mattresses “egg test” video.
In September 2013, the now-iconic video of a sassy-yet-classy socialite in a turquoise dress proclaiming that “our business is to make it smell like your business never even happened,” burst onto the scene.
In just four days, Batiz’s entire inventory had sold out, with $4 million in backorders waiting their turn to be fulfilled.
With the explosion in sales, Batiz knew it was time to invest all of her attention in creating a stable structure for her business, while still maintaining her company culture.
Fear of Being Number Two
There are three words that define everything done at Poo-Pourri: defy, liberate, and transform.
“We don’t do things status quo, and we don’t ever want to,” Batiz says. “We’re over here shakin’ shit up.”
Batiz strongly believes in hiring employees who can become experts in their areas without micromanaging, and can make big decisions. Of course, with that freedom comes the responsibility of owning up when those decisions don’t pan out. But Batiz believes the best idea can come from anyone or anywhere, so she wants to make sure every employee feels comfortable taking initiative.
But above all, Batiz believes the thing that sets Poo-Pourri above the big air freshener companies is their ability to shift direction at a moment's notice. She calls that agility their “superpower.”
So when the time came to build structure into the business, she knew it couldn’t come with the rigidity some organizations hold to.
“We are this young, rebel kind of company,” Batiz says, “and how do you put some procedures in place, yet keep this rebel nature?”
She tried bringing in a string of leaders, but with each attempt to establish a more defined system, the company’s culture died a little. So, Batiz had to find a way to balance shift-on-a-dime agility with much-needed stability.
She realized that much of her stability could come from within her supply line. By keeping six months worth of sprayers (a part of the product that can take up to 16 weeks to arrive) in stock, she’d be ready for the next boom when it came.
While the company’s edginess has provided a competitive advantage, that need to be the fastest or the hippest has also been a liability at times.
As a rule, Batiz tries not to worry about the competition, but she once became aware that a product similar to hers was going to hit the market, using an automatic dispenser. In a fit of competitive panic, her company tried to release its own version, pushing through timelines and moving far quicker than they should have to keep up.
As a result, they sold 500,000 faulty units to major retailers and had to take them all back, losing millions of dollars and three-quarters of a year in creative energy.
“It was a really good lesson for us to keep our blinders on and stop worrying about what other people are doing,” Batiz says. “Sometimes the best lessons cost us a lot of money or time or energy. The key is to learn.”
The Future Smells Sweet
As Batiz heads into the future, she’s not that focused on expanding the Poo-Pourri line, although they have branched out here and there, including a shoe freshener line, and some clever bathroom art.
“I’m not worried about the dollars as much as remaining king of the hill of what I’ve created,” she says.
The focus on the core product is clear, as Poo-Pourri somehow manages to create a bathroom air freshener that is irreverent but not crass, all while avoiding the grandma’s house aesthetic of most bathroom products. The smells are creative, the names are funny, the packaging sharp and sometimes even beautiful. Some could even be mistaken for luxury items. There’s an obvious level of care here placed on something we may not like to think about, but we all have to deal with.
Batiz hopes to achieve and maintain the level of awareness brands like Kleenex and Band-Aid have, becoming totally synonymous with the product they sell.
“What I want is when you have a “before you go” spray—knowing other people will enter the market—that they go, ‘Oh, do you have a Poo-Pourri,’” she says. “We are that iconic brand.”
To achieve such iconic status without a cent from investors is nothing to sniff at. Batiz says that when times get tough, she sees many entrepreneurs race to investors for help. She, on the other hand, prefers to keep total control of her business and figure things out on her own.
“If you have a problem with the problems, that’s a problem!” she says, laughing. “As an entrepreneur, all you do every day is solve problems, and they’re only going to get bigger.”
But despite the big problems she’s faced both in her current role and past businesses, Batiz has emerged triumphant. This year, Poo-Pourri is on track to bring in $100 million in revenue.
The boutique essential oil concoction with a cheeky name now sits on bathroom counters around the globe. And she’s hoping the scent will continue to spread.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Erica Comitalo
Direct download: FP272_Suzy_Batiz.mp3
Category:general -- posted at: 10:32pm AEST
Wed, 9 October 2019
Ben Simon showed up at his college classmate Ben Chesler’s door with a giant, ugly sweet potato, plopped it down in front of him, and declared, “This is the future.” Chesler believed him.
Simon had visited multiple farms in California, and discovered that 20% of the state’s produce was being thrown out, which amounted to around 3 billion pounds of unnecessary waste. Together, with their friend Ron Clark, the trio launched a service in 2015 that would save ugly, unwanted fruits and vegetables and deliver them to consumers at low prices. They called it Imperfect Foods.
Thanks to an admirable mission and relatively untouched market, Imperfect Foods took off. Four years after the launch, the company now boasts six fulfillment centers in over 20 cities and more than 1,000 employees. The team is also expanding their offerings in order to fight food waste across the entire system, now offering dairy, dry goods, and canned foods to their customers as well.
Learn more about food waste, the power of customer interactions, and the importance of giving employees a stake in a company in this interview with Chesler.
Direct download: FP271_Ben_Chesler.mp3
Category:general -- posted at: 12:06pm AEST
Wed, 2 October 2019
If you’ve ever bought a bottle of Jack Daniels BBQ sauce or Febreze kitty litter, you’ve seen Michael Stone’s powerful approach to brand licensing in action. This attorney-turned-entrepreneur pioneered the form of corporate licensing that makes such products possible and wildly successful.
Stone made his first foray into the world of licensing with the launch of his company, Beanstalk, in the mid-1990s. The firm quickly became the go-to resource for prominent brands like Procter & Gamble, Coca-Cola, and AT&T—all corporations that were eager to expand their reach into different product categories and strengthen their relationships with consumers.
In 2018, Stone and his company were responsible for generating over $7 billion in retail sales of licensed product. While he stepped down as the CEO a few years ago, Stone still serves as the chairman of Beanstalk and is committed to innovation in this industry.
Check out this interview to learn more about the ins and outs of licensing and to hear about Stone’s experience writing his book The Power of Licensing: Harnessing Brand Equity.
Direct download: FP270_Michael_Stone.mp3
Category:general -- posted at: 1:52am AEST
Wed, 25 September 2019
How Matt Morgan, a misfit from Montana, took the booming marijuana industry by storm.
A typical life was not in the cards for Matt Morgan. Fortunately, he found an atypical career.
Growing up, he was fired from every traditional job he ever had, and when he tried college, he lasted just 10 days before dropping out. Next, Morgan became an electrician apprentice at the age of 19, still hoping to find a career path that he might enjoy. But like his previous ventures, this too was short-lived and he resigned after a year.
Having always possessed an entrepreneurial flair, Morgan did find quick success as a realtor, which would lead him in a roundabout way to the world of legalized marijuana. Finally, it was in the Wild West of the cannabis boom where Morgan found his home.
Within a three-and-a-half year period, Morgan would become one of the most recognizable leaders in the cannabis industry. He is the founder of multiple cannabis companies, such as Bloom Dispensaries and Reef Dispensaries, with the latter becoming the first in the world to hit a $100 million revenue run rate. In 2018, Morgan was named one of the most influential people in cannabis by High Times.
But as we all know, the highs are so often preceded by lows, and had there not been an financial crisis in 2008, he may have never entered the business in the first place.
Taste of Entrepreneurship
Growing up in Missoula, Montana, Morgan had a hard time finding his niche in the working world, but he did find one thing that he was quite good at, which ended up being a gateway drug to starting his own business—real estate.
“ really opened up my eyes to entrepreneurship,” Morgan says. “Running your own business. You know, basically, eat what you kill. It’s totally up to you, whether you’re going to survive or not. That’s the type of environment that I thrive in.”
And thrive he did. By the time he hit 22, Morgan became the managing partner of his own real estate company.
By early 2008, he had begun to take notice that prospective homebuyers were reaching out to him with very specific guidelines on the type of home they wanted to purchase. Not only were they asking for roughly the same amount of land, they were all specifically requesting that each home have a shop out back — a detached garage or external structure that could be used as a hobby space.
And if it didn’t have a shop, he didn’t have a deal.
This left Morgan perplexed. He had met most of their demands, and more times than not a deal fell through because of this one caveat. This finally left him to ask himself, “what’s so important about these shops?”
At the time, Montana’s legal cannabis industry had just started to boom, and people wanted in with a place to grow. This was an industry that Morgan was not in tune with at the time, but he started to pay attention to.
Then the financial crisis of 2008 hit and Morgan’s real estate business was dead in its tracks. He needed a new play.
Despite his youth, Morgan was old enough to have seen one tech boom and one housing boom, and had an itch that he may be in the presence of the next gold rush.
“All these crazy people talking about this marijuana stuff, there must be something to it,” Morgan says. “So I started digging into it.”
One day, after months of research, it became clear to him that marijuana was going to be the next big boom.
“That day I went and found a light and a warehouse and I was damned if I wasn’t going to grow some marijuana, “ Morgan says.
With the exception of spending some time on his grandparent’s farm, Morgan wasn’t that experienced in horticulture. He knew the basics of how to grow some crops, but after looking around at the competition, he felt he could succeed in marijuana.
“How hard could this be?” Morgan says. “There’s a bunch of hippies in tie-dye with hoop houses out in the wilderness growing, you know, grade-A cannabis. I’m sure I can figure it out.”
He didn’t. At least not at first.
Morgan set up a small operation in his garage, and after about 15 failed attempts, he finally found a grow system that worked. Then in 2009, he teamed up with another grower in Montana and they opened a state-of-the-art, 15,000-square-foot cultivation facility, one of the largest in the state at the time.
This new abundance of space gave them a controlled environment to grow a significant harvest of plants. Within Montana’s medicinal marijuana caregiver program, as long as you had a patient card, you were legally allowed to grow six plants per patient that you were a caregiver for. With Morgan’s patient list growing to over 500, he was legally growing over 15,000 plants. Not bad for a guy who didn’t know much about the business just one year prior.
But just as quickly as he had struck gold, a new law would bring things grinding to a halt.
Next Stop: Arizona
Per Morgan, in 2009 Missoula’s population was over 65,000 people and the city was home to over 60 dispensaries. That equates to around one dispensary for every thousand people.
In short, that’s a lot of dispensaries.
The state began to worry that the new industry was growing too quickly. So to help slow it down, Montana had an emergency legislative session and reversed its laws so that a caregiver could now only have three patients total. Instead of having 15,000 plants, Morgan was suddenly only allowed to have 18 plants total.
Once again, Morgan was stopped dead in his tracks. Feeling the cons outweighed the pros of running the facility in violation of the new laws, he shut down his operation in 2010.
Having tasted the fruits of his labor, he turned his focus elsewhere. He immediately began to look around the country for states with more favorable marijuana laws so he could scale a business.
“I knew I had the skills sets at that point, I just needed the right vehicle and platform to do so,” Morgan says.
Arizona ended up offering that platform.
The Grand Canyon State was about to roll out an extremely favorable and innovative program that was to be the first of its kind, and Morgan wanted to be a part of it. Morgan says the state’s population was also substantially larger than Montana’s, and it was going to allow a permit holder to have unlimited plants, unlimited square footage to grow, and unlimited weight in product. He felt like it was a “dream” and couldn’t wait to head south.
“I literally packed up all my stuff into my Chevy Silverado and I drove down to Arizona within that week,” Morgan says. “And literally, probably the best decision I’ve ever made. I was 25 years old.”
Upon his arrival, Morgan opened up a chain of hydroponics stores to help gain a foothold in the area and to network with the locals as he waited for the new laws to roll out. While doing so, he befriended the son of a senator who would become key in helping him land one of the state’s limited marijuana licenses. (Morgan chooses not to divulge the senator’s name during our interview.)
“These licenses were looked at as a valuable asset,” Morgan says. “There’s no way these guys are giving some kid from Montana one of these licenses that could end up being worth, you know, millions of dollars.”
His chances may have been slim, but a senator’s chances were very good.
After agreeing to terms, Morgan says he and the senator’s son partnered up and convinced the senator to put his name on the application. Soon thereafter, the two won a Sedona license through a lottery system and within four weeks after that, they purchased a Phoenix license on terms from its winner for $450,000. With two licenses under their belt, Bloom Dispensaries was well underway.
Like Morgan’s real estate business, Bloom took off, and in under a year grew to 100 employees and was generating $1 million in revenue a month.
Everyone came calling.
By 2013, Bloom was drawing national attention and was destroying its competition. This led to private equity firms and wealthy families to reach out to Morgan for advice and potential opportunities.
“People were starting to look at marijuana,” Morgan says. “It was still kind of in the shadows, but it was starting to come to the light.”
Due to Morgan’s knowledge in the space and Bloom’s exponential growth, companies wanted to replicate his success and learn his secrets. However, Morgan says one such wealthy family, worth billions, wanted to do more than talk. They wanted Morgan and offered to purchase Bloom in order to get him. However, after negotiations between the family and Bloom’s investors fell through, the family extended a proposal to only Morgan for him to come and launch their new venture.
Realizing a good opportunity when he saw it, Morgan accepted their offer. As for Bloom, he divested his shares and gave the company to his partner in order to remain on good terms. Now armed with over $100 million in capital from his new partners, Reef Dispensaries was born. And its growth was on a whole other level.
“I came out of the cannon like a cannonball,” Morgan says.
Reef quickly expanded to 200,000 square feet of cultivation, had two extraction laboratories, and six retail dispensaries, with one of them becoming the busiest dispensary in the world. And to top it off, Reef became the first cannabis company in the world to hit a $100 million run rate.
Despite the success Morgan was able to create at Reef, he says tensions began to grow between him and his partners. After months of disagreements, Morgan resigned as CEO of the company in November 2017, forcing a buyout and shocking the cannabis industry.
The Next Frontier
Morgan’s next major move took some time to develop.
Much like the beginnings of Bloom, an entrepreneur reached out to Morgan about a potential partnership. However this time, the individual challenged Morgan to look at the other chemical compounds in the cannabis plant other than THC, and to research how they were being used in the healthcare space. After spending close to a year discussing healthcare and the science on how to use cannabinoids, the two of them founded Oneqor Technologies.
“It’s really a hybrid of a biotech pharma company that’s leaning heavily on cannabinoids in the cannabis plant, excluding THC, the psychoactive one,” Morgan says.
After spending 10 years in the THC business, Morgan says he was becoming bored with the industry. Oneqor presents something new and exciting for him, plus he’s able to operate it almost like any other typical business. Working in a business that doesn’t deal with THC is a whole new frontier, and one with barely any restrictions.
And without the restrictions, Morgan’s ambitions grew.
On top of helping brands such as GNC create private label CBD products, Morgan wants Oneqor to revolutionize the market. He hopes to dominate the cannabinoid industry in the same way Intel did with computers by becoming the secondary brand.
“If you see a product and you know it has cannabinoids in it, I don’t want it to say CBD inside,” Morgan says. “I want it to say Oneqor inside.”
Matt Morgan’s Playbook for Building a Business
In a span of less than 10 years, Matt Morgan became a leader in the cannabis industry by creating Bloom Dispensaries and Reef Dispensaries, along with his new venture Oneqor Technologies. After some early growing pains, Morgan came up with his own playbook on how to grow a successful business.
Believe In Something
Many founders, especially first-time entrepreneurs, tend to look at only the financial aspect of creating a business, rather than if it’s something they actually want to do. Other times, people may start a company because they feel that the idea might be a fun thing to do.
Morgan believes, that although the financial upside is something to consider, you must also believe in the product and have passion for it if you’re looking to build a company. Otherwise, you may lose interest and not do the things needed to succeed.
“You shouldn’t pick something you want to do because you think it’s cool,” Morgan says. “You should pick something you do because you believe in it and you see a lot of upside potential. Or else, what are you doing it for?”
Look at the CEO
Morgan credits much of his early success to the teams he’s built. From building a C-suite team to hiring the employees for his stores, he believes that everyone is important. And to find those right employees, it starts at the top with the CEO. That means either looking within yourself if you’re the CEO, or by sitting down with your leader and asking them what their core values are. Skill sets are important, but if your employees don’t share the same values, the culture won’t work.
“You want to hire people that have the same core values as you, because you can’t teach people core values,” Morgan says. “They’re born with that…or their environment, whatever it may be. You can teach people anything, but you can’t teach them that.”
Another trait that Morgan says led to his success is the ability to go outside his comfort zone. He used to be a nervous wreck, he says, but wanted to rid himself of that anxiety. So beginning from the age of 20 until he was 28, he put himself in uncomfortable situations daily in order to grow as a person. This not only helped in his everyday life, but also as a professional and leader. It helped him with everything from speaking in front of 10,000 people to raising capital for his businesses. In order to succeed, you must be willing to put yourself in uncomfortable situations and get to the point where you’re calm and collected in every situation.
“Human beings have a defense mechanism and they don’t like getting out of their comfort zone,” Morgan says. “You don’t know what to say, what to do, how to operate. But that’s really your biggest growth potential as a human being, is outside of your comfort zone.”
Maintain Focus Among the Chaos
Founding your own startup can come with lots of unexpected surprises. Especially within an emerging field such as the cannabis industry, things can become chaotic as the rules are still being established. Unfortunately, there will be a lot of chaos around you, a lot of drama, and a lot of arguing. But the only thing you can do is figure out how to control your reaction to it and always remain focused on your goals. Find what makes you relaxed and focused, and master it.
“One thing that has really helped me with that is meditating,” Morgan says. “It’s really helped me, you know, keep my concentration, collect my thoughts. … There’s not really anything that can rock me mentally.”
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Nick Allen
Direct download: FP269_Matthew_Morgan.mp3
Category:general -- posted at: 10:50am AEST
Tue, 17 September 2019
Figuring It Out
Why Marie Forleo walked away from Wall Street to help people build lives they love.
Marie Forleo was on the brink of the American dream.
After graduating as valedictorian from Seton Hall University, making her the first in her family to graduate from college, she’d landed her first post-grad job on the floor of the New York Stock Exchange. Her peers were millionaires, and she was on track to become one, too.
But that dream came crashing down after a panic attack halfway through a workday left her sobbing in the pews of the nearest church. Just six months into her job, the little voice in her head was telling her that she was on the wrong path, and she knew she had to make a change.
Of course, she was petrified by the idea of leaving her job behind (especially with the mountain of debt that came with the pursuit of the American dream), and she didn’t know if she’d ever find something that would truly fulfill her.
Determined to figure it out, Forleo eventually made her way to a new career path that would not only bring her happiness, but would also enrich the lives of many others experiencing their own difficulties.
Today, Forleo inspires millions through her work as a life coach. She has over 578,000 YouTube subscribers on her award-winning channel, MarieTV, with over 49 million views spanning 195 countries. She’s also ushered 55,000 students through her eight-week marketing school for business owners called B-School. She’s even been interviewed by Oprah herself. And now, Forleo’s got a new book coming out, Everything Is Figureoutable, in which she unpacks the life lessons that she considers to be the secrets to her own success.
While coaching wasn’t her next, or even her next-next career choice after leaving Wall Street in the dust, by trusting her gut, advice from her parents, and the tiny voice of truth in her head, she found her way there eventually and built a life she loved.
Struggling to Start
When she was younger, Forleo dreamed of becoming a Disney animator or a fashion designer. But amid her disillusion with the job on Wall Street, all she could think was, “What else am I going to do?”
With her head spinning and stomach performing an intricate gymnastics routine, she called her dad. She was horrified by the idea of disappointing him, but didn’t know what else to do.
“I was quite broken,” she says.
She told her dad about how unfulfilled her coworkers seemed, her growing fear that she would end up like them, and her unmet desire to do something that brought joy to herself and others. After baring her soul, Forleo nervously waited for her dad’s response.
What he said would shape the course of her entire life. He reminded her that she would be working for the next 40 years or more of her life, and she needed to spend that valuable time doing something she loved.
She quit her job two weeks later.
But as little voices in our heads often do, Forleo’s told her just enough to get her out the door, but didn’t offer much insight on what she should do next.
She loved design, but was also fascinated by business, so she decided to give the world of magazine publishing a go. Through a temp agency, she got an ad sales assistant position at Gourmet magazine. Forleo loved her boss and publisher, and, with a desk conveniently located right next to the test kitchen, she believed she had finally found her niche.
But six months in, the voices of doubt took up their chorus once again. “I couldn’t deny the fact that I didn’t want to be there,” she says.
Forleo wondered whether a more creative role in the magazine industry would quiet the voices, so she snagged a job on the editorial team of Mademoiselle. Sure enough, when she reached that six-month hurdle, the voices told her that, once again, it was time to move on.
Discouraged, frustrated, and afraid for her future, Forleo wondered if there was just something wrong with her. Why couldn’t she find any work that made her truly happy?
A Calling for Coaching
The profession of life coaching wasn’t something most college graduates in the 1990s considered or even knew existed. In fact, Thomas Leonard, who is commonly called the father of the profession, only began his work in the 1980s.
So when Forleo stumbled across an article about life coaching in the early 2000s, it was as if she was uncovering a buried treasure.
“When I read this article, I swear to you, it was like the clouds parted and cherubs came out and they were shooting little sunbeams into my chest,” she says.
At just 23, Forleo questioned whether she had anything to offer as a coach, but she says something about it just felt right. So she enrolled immediately in a three-year, part-time training program. When the six-month wall that had diverted her path so many times arrived, she pushed through it like tissue paper.
And for the last two decades, Forleo’s “move along” voices have been silent.
In 2001, she launched her first weekly newsletter, called Magical Moments, which attracted a modest following. Slowly, but steadily, her reach grew. Forleo attributes much of her success to her tremendous patience, calling herself “a worker bee.”
Her skills and audience grew, and she launched new, ever-evolving platforms. As the 2000s rolled into the 2010s, Forleo launched B-School, her online course on marketing for business owners, as well as her wildly successful YouTube channel, MarieTV.
But her journey wasn’t all unicorns and balloons. She encountered moments of failure (like the time she tried to build a custom coaching platform without a lick of relevant tech expertise), but each one taught her a valuable lesson.
“I realized the power of positive quitting,” she says. “I think there’s a big distinction between giving up and moving on.”
She also learned the principal of, as she puts it, “simplifying to amplify.”
As Forleo began to draw international attention for the work she was doing, she felt the pressure to create more, attend more, and give more. Pulled in so many directions, the beginnings of burnout set in and she felt she wasn’t giving her best to her flourishing business.
“Having a really successful, thriving business is not just about the money,” she says, emphasizing each word. “How does your team operate? How do they feel showing up to work every day? How do you, as the founder, feel? Are you so stressed out that you want to run away and hate that you even started this thing?”
So in 2013, she decided to scale back and focus instead on the things that enabled her to make the most impact. She says she killed over a million dollars in revenue with a snap of her fingers.
But the flood of creativity and renewed sense of direction that followed laid the groundwork for her to rapidly recuperate that amount and much more. So when others tell her that she should be investing more time in a particular platform or conference or trend that she feels will take her off track, she has no problem saying no.
“I’m not out there to chase things,” she says. “I’m not going after vanity metrics. I give no shits about any of that. The metrics that matter to me are the lives I can impact, the profitability of the company, the difference I can make through our philanthropic endeavors, and am I actually enjoying my life.”
She also knows who to listen to when considering what to add to her business—her customers.
“The feedback, the iteration, the constantly making it better is how you get to something that’s legendary,” she says. “And I think folks don’t have the patience or the ability to focus over time and the desire to make something extraordinary, and that’s why we have so much mediocre.”
Forleo says that the Customer Happiness department is the largest chunk of her 30-member team because they are committed to responding to every single email received. So, for example, when she noticed an influx of emails from MarieTV viewers lamenting that they most enjoyed listening to her show in the car as they drove but hated running up their data, she created a podcast to solve the problem.
And if anything is clearly evident, it’s that Forleo is, to her core, a committed problem solver, a trait she attributes to her enterprising mother.
Sharing Her Secret to Success
Forleo’s mom, the child of two alcoholic parents from the projects of north New Jersey, “learned by necessity how to stretch a dollar bill around the block like five times.”
She was always looking for ways to save money, so if something was broken and the price for a professional to fix it was too steep, she would fix it herself. From a leaky roof to cracked bathroom tiles, lack of experience or a college degree didn’t keep Forleo’s mother from tackling even the most complicated projects.
One day, Forleo found her mom hard at work fixing her favorite radio, a Tropicana orange with a red and white straw for an antenna. Staring at the fully disassembled radio, amazed, Forleo asked her mom how she planned to put it back together again.
Her mom told her that nothing is too complicated if you just jump in and get to work, because “everything is figureoutable.”
That conviction lodged itself deep in Forleo’s heart, and it carried her through everything life threw at her, from difficult relationships to launching her own business. So when the time came to write her second book, she knew she had to share this principle with the world.
In Everything Is Figureoutable, which comes out this month, Forleo builds on three simple rules:
While these principles can be used in every aspect of life, Forleo feels they are particularly applicable to entrepreneurship, a career path she feels is often “over-glammed.”
She says that being an entrepreneur is a lot harder than it looks because it’s all about suffering in the short term to reach long-term goals, and sometimes that period of suffering can feel neverending.
“I think we all really feel stuck in our lives from time to time, but if you do embed this belief that everything really is figureoutable, it gives you this energy to get up and go again,” she says.
Forleo also insists that the ability to change direction is essential for a business owner.
“To survive as an entrepreneur, you have to be incredibly nimble and flexible and to keep evolving yourself,” she says. “Otherwise, you’ll get left in the dust.”
And she advises any founders who are living in fear or doubt about their business or career path to pull out a trusty journal and write it all down.
“We, just as humans, underestimate the value of writing things out and writing things down,” she says. “When it comes to feeling stuck—when it comes to feeling fear, which can stop many of us—we allow it to stay amorphous and kind of shapeless like a boogeyman in our head, rather than being concrete and specific about it on the page.”
Forleo’s particular brand of down-to-earth optimism has inspired millions, and, through her new book, she is excited by a new opportunity to share a piece of how she achieved her dreams.
As Forleo’s business continues to grow, expand and evolve, one thing has remained ever constant: the belief that her audience can fashion a life they love, just like she did. Because, after all, everything is figureoutable.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Erica Comitalo
Direct download: FP268_Marie_Forleo.mp3
Category:general -- posted at: 8:46am AEST
Tue, 10 September 2019
Blake Mycoskie had a number of hits and misses as a young entrepreneur, but it was a trip to Argentina that inspired the idea that would become his mission—and end up having a huge impact on the business world.
Mycoskie wanted to find a way to help the children he encountered who didn’t have proper footwear, but he wanted to do it in a for-profit, self-sustaining way. That’s how TOMS came to life.
From there, Mycoskie blazed a trail in the way companies think about social good, by popularizing the one-for-one giving model and building the beloved brand that still exists today. TOMS generates hundreds of millions in sales and still stays true to its mission of giving back to communities around the world.
Check out this episode to learn more about Mycoskie’s advice for those who want to pursue social entrepreneurship, the business model that led to his success, and the expansion of TOMS into other types of products.
Direct download: FP267_Blake_Mycoskie.mp3
Category:general -- posted at: 10:11pm AEST
Wed, 4 September 2019
266: How Warby Parker Changed the Way We Shop for Glasses, With Founders Neil Blumenthal and Dave Gilboa
Why are glasses so expensive?
Dave Gilboa could not stop asking himself that question. After leaving his $700 pair of eyeglasses on an airplane while returning from Southeast Asia, he could not wrap his head around why a technology that was so archaic could cost him more than his iPhone.
Within his first weeks as an MBA student at the Wharton School of Business, he repeatedly brought this question up among some of his new peers. Gilboa, along with fellow students Neil Blumenthal, Andrew Hunt, and Jeff Raider, had all shared in the pain of losing or breaking glasses and had all agreed: the high markup made no sense.
Inspired by Gilboa’s pricey misfortune, the four of them founded Warby Parker. Now led by co-CEOs Gilboa and Blumenthal, the billion-dollar empire with 2,000 employees is revolutionizing the prescription glasses industry by selling stylish eyewear online at affordable prices.
The New York City-based company is also on a mission to combat the global problem of impaired vision through its charitable Buy a Pair, Give a Pair program. Since the company’s start, the program has distributed over 5 million pairs of glasses to those in need by donating a pair of glasses for every one sold.
But long before they could build an ecommerce giant, the team would first have to learn how to even build a website.
A Moment of Clarity
Prior to going to Wharton, all four co-founders had already spent some considerable time in the workforce. This allowed for each of them to gain valuable real-world experience, and it helped guide them to understanding if they had an actual problem to solve and a business to move forward with.
However, it was Blumenthal’s experience while running the nonprofit VisionSpring that would become crucial to the early concept of Warby Parker. During his time with the company, they trained low-income women in the developing world to start their own businesses. Participants were to take their new skillsets back to their rural communities and administer vision screenings and sell glasses. But it was something else Blumenthal had witnessed that would have a lasting impression on him.
“I had been to the factories,” Blumenthal says. “Here I was producing glasses for people who were making less than four dollars a day, but 10 feet away were factories that were producing…the $700 pair of glasses Dave had. So we knew something was awry.”
A light bulb went off and the classmates soon pulled together $120,000 and went to work on developing Warby Parker in 2008. The problem they wanted to solve: How can we make glasses we want, but at a low cost?
Eager to launch, but more focused on preparation and planning, the founders began sketching out all the main aspects of the company. With limited funding, they knew they’d have to really refine and plan each facet of their business before revealing it to the public. Their first steps were to design glasses that they’d want to wear and then find a manufacturer who could produce them for less, starting with Blumenthal’s connections.
The next step would be trying to figure out how to sell their glasses directly to the consumer. The answer was simple.
“This magical thing called the internet,” Blumenthal says.
The founders all knew that ecommerce was an innovation they wanted to take advantage of for their direct-to-consumer brand. Had they come up with this idea 10 years prior, the company may not have gone any further than an idea. With a brick-and-mortar store requiring a lease, utilities, and other costs, they knew it would be hard to make their new dream a reality with limited capital.
“If we did , we would have one location that we might be able to attract some local customers, but with the power of the internet, we were able to all of a sudden, launch a store to the entire US,” Gilboa says.
But there was a small problem. None of them knew how to build an online store, nor did they understand the many other details that came with creating an online shopping experience.
“We started talking to friends on how you build a website,” Blumenthal says. “And then we started visiting a bunch of websites that we would normally already go to. But now with a critical eye, we were understanding, okay, what’s the shopping flow?”
Over the next year and a half, the four of them kept chipping away at all the details of Warby Parker. Nothing got overlooked. They spent countless hours going over the vision and mission of the company, and worked on all the brand architecture of what they wanted their company to be.
In addition, the group constantly sought out feedback from friends and professors. Could something like this work?
One glaring concern that kept surfacing was whether or not a person would actually buy a pair of glasses online. With fit being so important, it would be hard for a person to gauge on a computer screen if a pair of glasses would fit their face and feel comfortable.
This forced them to reconsider their business model, and ever the problem solvers, the home try-on program was born. Breaking new ground, Warby Parker would allow a customer to select five pairs of glasses from the website and then ship them free of charge, allowing five days to test out the frames.
This was a major ecommerce innovation that would get them past the biggest challenge facing the business’s core premise. But there was one other challenge that would prove nearly impossible to overcome—agreeing on a name.
Thank You, Jack
Prior to Warby Parker’s launch, brands had already started to emerge that were selling glasses online. Customers were able to purchase glasses from sites such as 39DollarGlasses.com and FramesDirect.com, but they were sacrificing other elements, such as quality and customer service, for their lower prices.
The founders wanted to take a different approach with their company. They wanted to launch a fashion brand that not only offered great quality, prices, and service, but also one that made the world a better place. The company vision was clear and ambitious. But they could not come up with a name.
“We wanted kind of a proper name and didn’t think Gilboa-Blumenthal, our last names, really rolled off the tongue,” Gilboa says.
They sought out inspiration and ideas from historical authors and artists. People who represented the brand ideals that they were trying to carry out. One author that stood out to them was Jack Kerouac, the novelist and poet who was a pioneer of the beat generation.
Coincidentally, the New York Public Library was holding an exhibit one afternoon with some of Kerouac’s private diaries and journals. Seeking inspiration, Gilboa made a visit to the exhibit and stumbled upon some of Kerouac’s unpublished works, finding some interesting character names.
Two jumped off the page: Warby Pepper and Zagg Parker.
“So I took those back and the four of us were discussing,” Gilboa says. “We all loved those names and were debating, do we pick one of those, and we decided to combine the two and make it our own. And the URL happened to be available for nine bucks.”
After six months of debating and with over 2,000 names rejected, Warby Parker came to life.
The challenge for any new brand is figuring out how to gain exposure. With a small marketing budget, the co-founders had to be strategic about finding a cost-effective way to maximize their exposure in such a competitive industry. Realizing glasses are an accessory and that the fashion industry was an insider’s game, the team hired a fashion publicist to help set up meetings with editors and writers at major publications.
In February of 2010, WarbyParker.com officially went live. Within days of launching the website, they were featured in GQ, where they were dubbed “the Netflix of eyewear.” Soon after, another profile appeared in Vogue. From there, things went viral.
“We ended up hitting our first year’s sales targets in three weeks,” Blumenthal says. “Sold out of our top 15 styles in four weeks and it was just complete mayhem.”
Soon, they found themselves sold out of all their inventory with a waitlist of over 20,000 new customers. Warby Parker was an overnight success, a year and a half in the making.
Onward & Upward
Today, Warby Parker is valued at over $1 billion and has cemented its place among the top glasses retailers in the world. Even after they made it to the big time, however, the team kept innovating.
In 2013, Gilboa and Blumenthal began to expand their brand with more storefronts, having now opened close to 100 stores in the US and Canada. And within some of those stores, they’ve begun to employ their own optometrists where states allow it.
On the technology side, they’ve found new ways to cater to the customer. Within the Warby Parker app, any customer with an iPhone X can now virtually try on any one of their frames. In addition, they’ve made a move into telemedicine by allowing eligible customers to take eye exams from their phones, allowing a licensed doctor to write them a prescription remotely.
But no matter how large the company becomes, the team’s underlying values remain the same: they do whatever it takes to make customers happy.
3 Tips for Standing Out From the Crowd
When Neil Blumenthal, Dave Gilboa, Andrew Hunt, and Jeff Raider founded Warby Parker in 2010, they knew it wouldn’t be easy. But with the right planning, execution, and maybe some good luck, they felt they could make the world a little better, one pair of glasses at a time. The founding team knew that in order to get any attention in the noisy fashion industry, they had to be different and they had to stand out.
Here are Blumenthal and Gilboa’s tips for helping your new startup gain exposure.
From the beginning, the founders knew that it would be hard to get any immediate attention in the fashion industry without the help of insiders. They knew their service and product would be different from any other retailer before them, but if no one knew who they were, it wouldn’t matter.
So the team hired a fashion publicist to get them meetings with top fashion publications. By being able to tell their story directly to their target audience, and through a medium that their audience trusted, it was a giant step in the right direction. And since Warby Parker was so different from its competitors, once it got on the insider crowd’s radar, it wasn’t hard for them to draw media attention.
“There was a bunch of things that we were doing that were novel,” Blumenthal says. “Selling glasses online, in 2010, was pretty novel. Having this home try-on program was really novel. Providing a pair of glasses for every pair we sell, was really novel. Charging $95 instead of $500 was really novel. So they really wanted to write about us.”
In today’s startup world, it’s never been more crowded and harder to stand out. Be different with your concept and separate yourself from the fray.
Although WarbyParker.com went live in February of 2010, the four co-founders spent over a year and a half focusing on their company’s mission, product, and business model. And after they found success, staying focused became an even more important priority.
“We got some advice early on that if you’re walking down a path towards a giant pot of gold, you shouldn’t stop to get distracted by any shiny little coin that you see along the way,” Gilboa says.
It would have been easy for Warby Parker to launch dozens of different products or to expand into new markets for monetary gain. However, that would’ve brought about great distractions that could have pulled them from their main goal, which is to solve their customers’ problems by offering them quality products and experiences.
“We’ve just seen so many businesses that have failed due to lack of focus,” Gilboa says. “But it’s rare that you’ll see a business that fails for being too focused.”
Remember the problems your business is trying to solve and stay focused on it. By always learning and iterating, you’re working towards providing the best service possible for your customers.
From the very beginning, the Warby Parker team knew they had to keep their customers happy. They understood that they had to not only provide a great product, but also provide superb customer service.
In the beginning, all four co-founders were directly in touch with their customers. They each replied to customer emails and even set up an 800 number that would be sent to their personal cell phones until someone picked up. They were willing to do anything to make sure the customer was always satisfied.
“Do whatever it takes to make customers happy and make them feel good,” Blumenthal says. “Smile, personal notes, whatever it takes.”
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Nick Allen
Direct download: FP266_Warby_Parker.mp3
Category:general -- posted at: 8:52am AEST
Wed, 28 August 2019
265: Battle-Tested Lessons on Scaling a Fast-Growing Global Company, With Printful CEO Davis Siksnans
Success On Demand
How Printful co-founder Davis Siksnans rose to the top by helping entrepreneurs custom print and ship products with greater speed and ease.
Davis Siksnans’ motto as an entrepreneur has always been, “If you can’t find it, build it.” It’s led him to some fascinating and quirky pursuits, from building a business that sells customized friendship bracelets to launching an ecommerce store that creates motivational posters for startups.
Having spent much of his career working at a startup incubator, coming up with ideas and helping to bring them into reality, much of Siksnans’ expertise has involved smoothing out and speeding up that business-building experience. He’s especially excelled at improving the fulfillment process, allowing businesses to whip up clever ecommerce product ideas and then ship them out to eager customers in a heartbeat.
While not all of his ventures took off, they were critical stepping stones to Siksnans building his most successful business yet—Printful. This leading drop-shipping, fulfillment, and printing business has mastered the process of creating on-demand ecommerce products. As a result, Printful has grown exponentially since its launch six years ago and now has a 500-person team across the U.S., Mexico, and Europe.
Survival of the Fittest
Long before his days as Printful’s CEO and co-founder, Siksnans always knew he would end up doing something in tech. Fascinated by technology from a young age, he taught himself to code, saved up his allowance to purchase his first computer, and built custom websites for his friends and neighbors. In the process, he realized he had a knack for turning ideas into businesses.
So it came as no surprise when Siksnans secured his first job as an IT administrator with Draugiem Group, a startup incubator and one of the most exciting technology companies to work for in his home country of Latvia.
Over the course of 15 years, Draugiem Group funded over 100 business ideas. Today, only 12 of these businesses remain, which is the nature of entrepreneurship, Siksnans says. What makes Draugiem’s model unique is that it doesn’t source ideas from outsiders—only from its own founders and employees. This means that everyone at the company has the opportunity to come up with the next big idea.
“At Draugiem, if you do good work and gather trust, you’re given more opportunities to step up in your career,” Siksnans says. “I was given the chance to work on business ideas based on the fact that the founders thought I was doing a good job.”
Timing was also on Siksnans’ side, as Draugiem Group was just starting to focus on the US market for the first time. He had previously completed an exchange program in the United States for one year and was familiar with the market, so Siksnans officially began his career as an entrepreneur.
Take Your Vitamins
After experimenting with a variety of ideas under the banner of Draugiem Group, Siksnans hit gold with Startup Vitamins, a company that sells, no not vitamins, but motivational posters.
Siksnans and his team initially came up with the concept when they moved into a new office space that had ample wall space and wanted to put up some posters. But they couldn’t find any designs they liked. That’s when his motto of, “If we can’t find it, let’s build it” came into play, and Siksnans decided to launch a Shopify store to meet this need.
Initially, the Shopify store sold posters with motivational sayings such as “Life is short. Don’t be lazy.” He and his team started off with one printer in the Los Angeles home of one of the founders, which made it convenient to produce posters on-demand and was also low-cost.
After seeing promising growth, Siksnans decided to expand by taking on the biggest category in ecommerce—apparel. He liked selling posters because they could be easily printed on demand and didn’t require inventory. He wanted to replicate that model with apparel, so Startup Vitamins started working with a fulfillment partner that could produce on-demand products.
This turned out to be a horrible experience. The fulfillment partner’s website was clunky; it took one-to-two weeks to fulfill orders; the quality of products was subpar; and there was no public API—no way to automate the orders that were coming into Startup Vitamins.
That got Siksnans thinking.
Siksnans realized that there was a significant gap when it came to services that could produce on-demand and high-quality products at a reasonable speed. He also recognized the lack of a powerful API that could integrate with ecommerce platforms like Etsy, Shopify, and Storenvy. He decided to test this theory, and that’s how the idea for Printful came to life.
The key difference was that, with such an API, his company could allow clients to automatically receive and process orders for their online business instead of serving as the middleman.
“When we launched Printful in 2013, we didn’t even own the domain printful.com because we didn’t know if this idea was going to work or not," Siksnans says. "Maybe it would fail and we would have to refocus. We used Startup Vitamins’ mailing list as our first marketing channel to push out Printful’s services because our customers overlapped—startups that were likely to be open to using print-on-demand in their respective niches."
Printful found product-market fit immediately. Its combination of drop shipping (when an ecommerce store purchases inventory from a third party and has it shipped directly to the consumer) with a custom print API and other services made it easy for anybody to sell posters, t-shirts, canvases, and other merchandise, seamlessly. As a result, Printful made around $800 in revenue in its first month, then $1,600 the next, and the business only kept growing from there. In under six months, Printful had become larger than Startup Vitamins.
Lessons on Scaling
Since its launch, Printful has seen impressive growth. The company now has a team of more than 500, locations in four geographies, 6.83 million orders fulfilled to date, and $540 million in products sold by its customers.
Of course, with growth comes growing pains, which Siksnans says has been one of the toughest aspects of his job. He has turned to certain resources to help him navigate the challenges around scaling.
“I recommend the book Scaling Up by Verne Harnish," Siksnans says. "Whenever I see a person in management struggling with growing pains, I give them this book and discuss it with them. It contains so many great practices and tactics, and it shows that this is a normal process that many companies have dealt with."
Siksnans also emphasizes the importance of collaborating across cultures. At Printful, they make a point of educating team members about cultural differences. The company also invests in resources to make sure its employees have the opportunity to travel between Latvia and the United States to conduct knowledge and culture transfers.
While it’s important to acknowledge the differences among Printful’s various locations, Siksnans believes it’s critical to maintain a thread of consistency throughout every employee’s experience.
He once sat in on an onboarding process for an employee in Riga, Latvia and noticed it lacked many of the helpful components found in the US process, so he connected both HR departments to make sure they were added. That’s why Siksnans stays involved in all of Printful’s HR processes—from running new hire trainings for employees once a month to being involved in the recruiting process.
Siksnans has several thoughtful predictions for the future of the print-on-demand and drop-shipping industry.
For starters, he envisions decreased reliance on advertising. As Facebook ads become more expensive over time, Siksnans believes it will become increasingly important to build microbrands. This means becoming less reliant on advertisements and turning more to influencers, who have powerful audiences on social media and promote products organically to their user bases.
Siksnans also anticipates potential policy changes around shipping. Consumers are already demanding faster shipping speeds as companies like Amazon set a new standard. He’s keeping an eye on what happens with the Universal Postal Union, the UN agency that coordinates postal policies among different nations. They’re experiencing many issues, for example, the fact that it’s cheaper to ship a mug from China to New York than it is to ship a mug within New York. As a result, some countries are already taking steps to limit the influx of cheap drop-shipped goods coming from other countries.
Finally, Siksnans is focused on understanding ecommerce algorithms. A growing base of users is leaning into newer marketplaces such as Etsy, which have less advanced ranking algorithms to figure out than sources like Amazon or Facebook advertisements. As a result, Siksnans is noticing a lot of people finding success by learning the ins and outs of various internet marketplaces.
Regardless of which direction the market goes, Siksnans believes Printful is well positioned to continue growing. All of this success came as a result of him identifying a need and deciding to go for it—a mindset he believes all founders should emulate.
“I have a lot of people asking me when is the right time to start,” Siksnans says. “There’s no right time when someone is ready to start anything new. You will never feel ready, so just start now.”
Davis Siksnans’ 4 Tips on Scaling Company Culture
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Sophia Lee
Direct download: FP265_Davis_Siksnans.mp3
Category:general -- posted at: 4:30am AEST
Tue, 20 August 2019
264: How Revolve’s Founders Went from Finance and Engineering to Running a Billion-Dollar Fashion Brand
Where Data Meets Denim
How Revolve founders Michael Mente and Mike Karanikolas, a duo with backgrounds in finance and engineering, used data to take the fashion world by storm.
You would think that finance, computer engineering, and fashion have nothing in common.
But Michael Mente and Mike Karanikolas, the founders of the wildly popular online clothing company Revolve, would beg to differ. It’s true that when they first met each other at a software startup, they never thought fashion was in their cards. After all, Mente was a finance guy and Karanikolas was a computer engineer. They weren’t exactly cozying up to the catwalk.
And yet, a series of unfortunate events led Mente and Karanikolas to the retail business, which ended up yielding quite the fortunate outcome—together, they built a billion-dollar business that serves as inspiration for any entrepreneur looking to get into the online apparel game.
Using their respective strengths in analytics and number crunching, they developed a hunch that there was a gap in the market when it came to places young, millennial women could buy fashion brands online. Their hunch proved to be correct.
From there, it was Revolve's famously prescient marketing strategy — in particular, the company's influencer marketing — that set them apart from other online clothing brands coming onto the market.
"We had first-mover advantage and recognized power of social early on. We’re been working with influencers before they were even called influencers — before instagram even existed," Karanikolas says.
With their near-perfect product-market fit and the love of influencers like Chrissy Teigen, Chanel Iman, and Jessica Alba, the California-based company has grown from being a small online store to an iconic billion-dollar business.
Challenging the Mainstream
Mente and Karanikolas were both working at the software startup NextStrat when the dotcom bubble burst, kicking off a recession that eventually led to the company’s collapse. That’s when the duo started to brainstorm ideas for a new venture. They knew they made a great team and had a feeling they could achieve big things together, it was simply a matter of finding the right opportunity.
Given their math and engineering backgrounds, they approached the research process of finding that new endeavor in a very methodical way. Ecommerce was on the rise, and after digging into keyword search data, they noticed there was growing interest around online apparel. There were other attractive aspects of the apparel business too, such as the fact that it promised high gross margins and was a relatively untouched market in the late 90s and early 2000s.
“There were a lot of questions about whether apparel made sense online at that time,” Karanikolas says. “But any time there’s a new space, that means there’s room for innovation. We recognized that online represented a wealth of opportunities, and it was just a matter of figuring how this new medium worked for apparel and how to make it appealing for consumers.”
It didn’t take them long.
From Denim to Dominance
Mente and Karanikolas launched Revolve in 2003 with $50,000 of their own savings. That meant carefully watching cash flow was extremely important, which forced the duo to be highly disciplined about how they made decisions. Even early on, they leaned heavily on data to inform what products to sell. The core of their business model was to sell clothing from other brands, start with existing numbers, and then test and iterate as they identified what worked and what didn’t.
For instance, they initially assumed denim would be one of the hardest types of clothing to sell online, since fit is so important and there are lots of size variations. Through data analysis, however, they discovered that people actually did shop for jeans online and even returned them less frequently than other clothing categories. So for the first year or two of running Revolve, denim made up a majority of their business, which led to their first wave of success with the company.
They also weren’t afraid to go against the grain in how they ran an online store. When they realized the inherent risk that came with buying online due to fit issues, they instituted a policy of free shipping and returns. Mente and Karanikolas also quickly recognized the importance of having big, high-quality photos of their apparel—so they kicked standard web guidelines to the curb and covered their site with beautiful images, even if it meant it took a little longer to load.
“There were all sorts of different ways we approached retail and online fashion that ended up working out really well for us,” Mente says.
“Eventually, we came to understand the creative and aesthetic side of things more and become expert in areas we weren’t before. That piece took us many years to develop, and it wasn’t easy because it didn’t leverage our initial core strengths. But building that expertise on top of our existing strengths helped us become really powerful.”
Struggling to Survive
Mente and Karanikolas’ journey wasn’t without difficult times. They were still self funded when the Great Recession hit in 2008. Demand plummeted, and they saw that competitors were responding with extreme discounts, which made it challenging to make money.
Despite the fact that they were fighting for their lives, Mente and Karanikolas agree that this period actually led to incredible personal and professional growth. It also showed them they had the right company culture and people to get them through these challenging times.
The duo recalls one particular memory with fondness. Since Revolve also had to offer discounts to make sales during the recession, they had to ship a massive volume of product to remain profitable. During this time, every single employee voluntarily came out to the warehouse on weekends to help get all the products out on time. That’s when Karanikolas and Mente knew they would survive and come out on the other side as a stronger company.
Revolve is now a major player in an incredibly competitive online apparel market. But Mente and Karanikolas aren’t worried because they’ve come to deeply understand one of the most important lessons in marketing: You’ve got to stand out from the noise.
The way they do this is by leaning into the authenticity of their brand. Everything, from the events they host to the people they work with, is saturated with a genuine desire to grow relationships with consumers. It has never been about trying to outspend their competitors.
This type of commitment to their consumers is also what led the founders to start Revolve’s own line of clothing back in 2010.
Through data and conversations with their audience, they knew that there were products they either didn’t have a big enough selection of, or weren’t stocking fast enough. They realized they had the ability to provide a better product and have since launched an array of new clothing lines to meet the different needs of their customers.
Next Level of Growth
Karanikolas and Mente are optimistic about the future of Revolve.
“There are more opportunities today than ever, and we’re the best positioned we’ve ever been in the history of our company. We’re trying to build one of the biggest fashion and apparel companies out there,” Karanikolas says.
The duo plan to continue focusing on their core business of building a better experience for their target consumers, youthful women in 20s-30s looking for premium fashion. They’re passionate about getting better at everything they do, from improving their data to creating better products. Thoughts of further international expansion are top of mind for the founders as well, given that more than 40% of their social media following is international.
When it comes to the secret of success, the duo say there isn’t one—it’s simply about putting in the hard work, grit, and perseverance.
“There’s so much chance involved in the short term, but if you keep making the right steps, over the long run you’ll go in the direction you want, even though there are periods of time where it feels like things aren’t working for you,” Karanikolas says. “It’s a lot of hard work, but it’s going to be more rewarding than anything you’ve ever done.”
Mente agrees and leaves aspiring entrepreneurs with an additional piece of wisdom.
“Hard work and dedication are 100% important, but another aspect is to take care of yourself and your life,” he says.
“Your physical, mental, friendships, and relationships are all important as well. When you’re living well, you’re thinking clearly, healthier, and more productive over the long run. You need to recharge and have some balance in your life. It’s something I’m still trying to learn.”
3 Tips to Build a Powerful Consumer Brand, From Michael Mente & Mike Karanikolas
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Sophia Lee
Direct download: FP264_Michael_Mente.mp3
Category:general -- posted at: 6:00am AEST
Wed, 14 August 2019
263: From Food Writer to Digital Entrepreneur: Ed Levine’s Journey to Launching an Award-Winning Culinary Website
In business, everyone wants to win.
But sometimes it’s the people who refuse to lose who end up finding success. This is the mindset that food writer, author, and founder of the website Serious Eats carried with him throughout the ups and downs of his career. This tumultuous journey is also the primary focus of his latest book Serious Eater: A Food Lover’s Perilous Quest for Pizza and Redemption.
In this interview, Levine shares the details of how he got into food writing, experimented with media platforms to diversify the way he told stories about food, and ultimately bootstrapped the money needed to launch Serious Eats. From struggling with being profitable to testing his tolerance for risk, Levine shares the sacrifices he had to make to keep his company alive for the eight years leading up to its sale.
If you want an unflinching look at the challenges of entrepreneurship, this is your chance. Levine speaks with candor about the toughest aspects of launching a startup and dispels the most common myths around starting a business.
Direct download: FP263_Ed_Levine.mp3
Category:general -- posted at: 9:07pm AEST
Wed, 7 August 2019
When Nir Eyal has a burning question (which he frequently does), he goes on the hunt for an insightful answer.
That curiosity is what led Eyal to publish his first and wildly popular book, Hooked: How to Build Habit-Forming Products. He was inspired to delve into this topic after launching a startup in the advertising and gaming industry, where he observed that product design had the powerful ability to change human behavior. Eyal wondered why some companies were so good at it while others failed.
In this fascinating interview, we chat with Eyal about his early days as an entrepreneur, the behavioral model behind forming habits and get a sneak peek into Eyal’s upcoming book Indistractable: Mastering the Skill of the Century.
Plus, Eyal uses Nathan as a live case study and shares his best tips for breaking bad habits!
Whether you’re an entrepreneur who wants to better understand the link between product design and human behavior, or you’re an individual looking for tangible ways to build better habits, this is an episode you don’t want to miss.
Direct download: FP262_Nir_Eyal.mp3
Category:general -- posted at: 7:53am AEST
Tue, 30 July 2019
Against the Odds
How Raegan Moya-Jones built a $100 million business from the ground up—no fancy MBA required.
Raegan Moya-Jones was an Aussie in New York City, pregnant with her first daughter, and she couldn’t find the right baby blanket.
Every Australian mother from time immemorial had swaddled her baby in a cotton muslin blanket, and Moya-Jones wanted to do the same. But no matter where she looked, she couldn’t find one.
Rather than simply becoming frustrated by the futile search, she had an idea.
“I figured that all Aussie parents couldn’t have it wrong, and if I introduced it to American parents, they’d feel the same way,” she says. “Luckily for me, my hunch was right!”
Moya-Jones went on to found the successful baby product company aden + anais (partly named for her first daughter), publish a book about her journey, and launch a second business all while raising four daughters.
Even when success turned sour, as it so often can in the entrepreneurial world, she didn’t let that stop her. Moya-Jones has weathered the heartbreaking end of a partnership and gut-wrenching business betrayals, becoming stronger, wiser, and more successful for it.
A Rocky Start
In 1997, Moya-Jones moved from Australia to New York, after her Chilean boyfriend landed a new job. She was partway through an MBA, but put it on hold to be with the man who is now her husband.
Without a visa, she struggled to find work, but eventually managed to land a position at the Australian consulate. Through connections she built there, she moved into a job at a conference company and then into a position as a sales executive with The Economist, where she worked for over a decade.
It was when she learned she was expecting her first child in 2003 that she began that fateful search for the perfect swaddle.
For three years, she toyed with the idea of starting that business. As a first-time entrepreneur, she had to learn everything from product design to manufacturing, but in 2006, she set out to launch her brand.
While she may not have had a completed MBA under her belt, she had years of experience in sales, a degree of common sense she felt she could truly rely on and, above all else, the drive to work as hard as it took.
“I really am a huge believer that common sense and work ethic are the two keys to building a successful business. They’re the two most important things,” she says. “At the end of the day, it’s how much work you’re prepared to put in to be successful. I could never, ever have estimated how much work had to go into building a business from scratch.”
For the next three years, Moya-Jones would work her day job, then return home to spend quality time with her family (which now included three daughters). But once the bedtime rituals were complete, she burned the midnight oil building her business, from 8:30 p.m. until 3:30 a.m.
“It was pretty brutal,” she says.
But the odd hours she kept weren't the only tough part from the early stages of aden + anais.
Moya-Jones launched her business with her friend Claudia Schwartz, and for the first few years, they worked together flawlessly. They initially invested $15,000 each into the company to build a basic Yahoo website, design a logo, and make their first manufacturing order. They anticipated the investment would last them six to 12 months.
The money ran out after eight weeks.
They each invested another $30,000, but at this point, Moya-Jones had run through her savings. Timing is everything, and it wasn’t on their side.
“We were starting out during the worst recession since the Great Depression, so it wasn’t really good timing in terms of having access to capital and people wanting to loan us money,” she says.
So Claudia made an additional investment that Moya-Jones was unable to match, and once they asked Claudia’s father-in-law to grant them a $200,000 loan, Moya-Jones says she noticed a bubble of resentment growing.
“I think the disparity in what I could contribute financially to what Claudia could was one of the biggest catalysts for the partnership dissolving,” she says.
Moya-Jones says she found three other women to buy out Claudia’s 49% share in the business, and in 2008, the partnership ended.
Off Like a Rocket
Although Moya-Jones was struggling through the personal blow of saying goodbye to a friend, aden + anais was steadily growing into a healthy, flourishing business.
“It was a rocketship in the early stages, for sure,” she says.
The muslin blankets were an instant hit, and thanks to 20 years of sales experience, she was well equipped to get the products to those who wanted them most. Moya-Jones loaded up taxis with samples of her product and went door to door sharing it with every store that might be interested.
“That’s where definitely my sales experience came in handy because I was extremely comfortable with that part of the business,” she says.
In the early 2000s, brick-and-mortar stores still reigned supreme, so she wasn't yet focused on the ecommerce side of the business. She also chose to build relationships with existing retailers, rather than launching into fraught competition with them.
“We didn’t want to piss off the retailers by competing against them with our own website and sales and everything,” she says. “Then, Amazon entered the picture, and of course, all bets were off at that point.”
Meanwhile, Moya-Jones was still balancing her company with her day job. She didn’t want to cause financial strain on her family, which would eventually grow to four daughters, and she didn’t want to put added pressure on her business to perform.
“It was my conscious decision to choose sleep deprivation over any kind of financial pressure on my family and on the business in the early stages,” she says. But the years of toil took their toll.
“There were definitely times when my hair was falling out,” she admits.
She still believed in her business, though, so she powered through the strain, set a goal for when she would leave her day job, and waited for the right moment to arrive.
“Statistically, only 2% of all women-owned businesses ever break a million dollars in revenue,” she says. “I knew it was a pretty stretch goal, and so I sort of said, ‘Well, if I can get to a million in revenue, then I’m prepared to dive fully into aden + anais and quit my day job and give it a really good go,’ which is what I did.”
In 2009, Moya-Jones went full time with the company.
But even though her business was a success, she still needed additional investments to keep the business alive. She borrowed money from just about anyone who would lend it to her for nearly a year and a half after the dissolution of her partnership.
“Initially, it was friends and family, and then it was friends of friends, and then once we got to the point where it was just obvious that we were never going to be able to scale doing it that way, that’s when I went out and looked for investment money,” she says.
Although the business had traction, Moya-Jones says that she struggled to find investors. But in 2010, her first investor came aboard. That investment led to aden + anais’ first year of $10 million in revenue.
A Dark Day and a New Dawn
With the acquisition of another business in 2016, aden + anais pushed past the $100 million mark. But even as Moya-Jones’ success continued to blossom, disaster loomed on the horizon.
In 2013, the first investors in the business departed, and their parting piece of advice to Moya-Jones was to bring in another private equity firm to share the load. They could never have known what this would mean for the company’s future. The new firm bought the majority share of aden + anais, which would lead to an internal struggle for the future of the business.
“That’s when the whole thing started to go downhill for me,” she says. “We did not agree on the way forward. I don’t think they really understood me. This is the whole Stanford, Harvard, Yale backgrounds coming up against the crazy, opinionated Australian girl who has no education on a piece of paper to show. We just didn’t see eye-to-eye on very much at all. It was sort of the beginning of the end to tell you the truth.”
Outspoken about her disagreements as she saw her beloved company moving in a direction she didn’t support, Moya-Jones was informed in 2016 that she was being moved from the position of CEO.
“My story is actually way more common than I think people realize,” she says.
After a string of failed replacements, a new CEO finally stuck, and in 2018, Moya-Jones was fired from her own company.
“It was a pretty awful time,” she says.
But the new firm had the controlling interest in the company, so they were well within their rights to show her the door. And it wasn’t as though Moya-Jones had planned to run the company forever. The luster of serving as CEO of a massive business had already started to fade for her, and she missed the rush of innovation.
“Once you get up to the $60, $70, $80 million dollar mark, you just become the person that all you’re dealing with is shit every day,” she says. “The fun stuff everybody else is handling. The only time you’re really needed is when it’s too hard for somebody else or they don’t want to make the decision and deal with it.”
But she still wishes she would never have sold the majority share, at least until she was prepared to exit on her own terms instead of being forced out as CEO.
“I’m grateful in that I ended up making a very nice amount of money from aden + anais, but it’s definitely bittersweet. If I could do it all over again, I would do it differently.”
To this day, she is still the single largest individual shareowner in aden + anais.
But her story wasn’t over. In fact, a publisher soon approached Moya-Jones and asked her to share, well, what it takes.
While she was initially hesitant because, as she says, until the business reached about $50 million in revenue, she was operating largely on common sense, she decided to move forward with the book when the publisher said they didn’t want a conventional outline of what it took to become successful. They just wanted her story.
“To say I’m the antithesis of the MBA-educated business mind is an understatement,” she says.
And in her book, What It Takes: How I Built a $100 Million Business Against the Odds, she shares just how she did it and hopes she inspires others to do the same. She believes that anyone could follow in her footsteps without any kind of training or prior experience, as long as they are willing to put in the work.
And being asked to leave aden + anais didn’t keep the tenacious Moya-Jones down for long. Today, she is elbow-deep in a brand new business that has taken her “from babies to booze.” In June 2018, she co-founded the moonshine company Saint Luna Spirits.
“We wanted to create a high-end moonshine that was served in five-star restaurants and the best cocktail bars out there,” she says.
The business has already won gold and silver medals at spirit competitions, and after only a few weeks on the market, the label already appears in renowned establishments across New York, such as Jean-Georges and Employees Only.
“It’s super fun to be back in the trenches building something and creating,” Moya-Jones says.
And no matter what she does or where she goes next, by weathering the storms of her first business, Moya-Jones has proven unequivocally that she has what it takes.
Raegan Moya-Jones Tips for Entrepreneurs
Through successes and trials, Raegan Moya-Jones has build up an extensive bank of knowledge when it comes to launching and shepherding businesses, and these are some of the tips she shares with every entrepreneur she meets.
“Not all people have common sense, but what I’m trying to say is you don’t need to be an expert in really anything, I believe, to start and build a successful business.”
“Never, ever sell the controlling interest of your company if you’re still passionately involved in it and dedicated to it.” Unless you are looking to exit a company for good, Moya-Jones recommends that founders think twice before relinquishing control, even for a nice payout.
“Everyone’s going to have an opinion. There will always be the people who want to come in once you’re successful to change the way you do things.” Moya-Jones reminds founders to trust their instincts and remain true to the things that help them launch and grow their business, even if others disagree.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Erica Comitalo
Direct download: FP261_Raegan_Moya_Jones.mp3
Category:general -- posted at: 6:19am AEST
Tue, 23 July 2019
Back in the Game
How Nimble’s Jon Ferrara returned to the startup world to revolutionize customer relationships for a second time, all while maintaining a life he loves.
Jon Ferrara was frustrated.
As a young computer software salesman and son of an entrepreneur, he firmly believed that one of the most vital aspects of business was relationship building. But in the 1980s, managing those relationships was a giant pain. He was stuck fumbling with paper leads, appointment calendars, spreadsheet forecasts, and no great way to keep or share records. He wanted to fix the problem, and thought he might just be able to.
Of course, he could have stayed content where he was and raked in a sweet $200,000 a year, while waiting for someone else to solve the problem. But surrounded by aging coworkers who regularly lamented the shots they didn’t take, Ferrara didn’t want to be just another guy with a good idea who didn’t chase his dream.
So at 28, he quit his job to see what he could create.
Three decades and two successful companies later, Ferrara changed the Customer Relationship Management (CRM) game—and then changed it again! Through his work in founding GoldMine and Nimble, Ferrara strives to boost the R in CRM by improving the way salespeople relate to each other and to their customers, first by integrating email, contacts, and calendar, and then by drawing in social media.
“As I went into my career and struggled to sell in the technology arena, I found it hard to scale connections and relationships and pipeline and marketing, and I looked for a tool to do it,” he says. “I couldn’t find it, so I built it. And it turned into a gold mine for me.”
The path Ferrara has traveled has not been a straight line. But thanks to a willingness to pivot, seek partnerships with high-profile businesses, and put relationships before profit, he has built businesses, and a life, he is very proud of.
With no Windows, Outlook, or Salesforce, the life of a salesperson in the 1980s was an endless wilderness of loose scraps of paper.
The salesperson was handed a lead that they would cold call, making notes on the piece of paper and scheduling further meetings in a separate-but-also-paper appointment calendar.
If the paper was lost, so were the notes. Forget about other team members sharing information to build well-rounded relationships with a client. And the bigger the company got, so grew the problem.
This was the root of Ferrara’s frustration.
“What I wanted was a tool that integrated contacts and email and calendar with sales and marketing automation, not just for me, but for the whole team,” he says.
No matter how hard he looked, he could only find pieces of the tool he sought. A marketing tool here. A calendar there. A pipeline tool way over there. But nothing that brought it all together. So, he set out to create it himself.
Ferrara sketched out the idea for GoldMine, and Elan Susser, a friend from college, made it into a reality. Using the money in their savings accounts, Ferrara and Susser created a CRM that integrated every tool a sales team would need and designed it to be accessible across a network.
They had created something revolutionary, and that filled a prevalent need, but they had no money to advertise and no real connections to reach out to.
“There we were, two kids in an apartment with $5,000 in the bank with basically Outlook and Salesforce before either existed,” he says. “So, how do you sell that?”
They say our struggles become our greatest strengths. And it’s in his past sales struggles that Ferrara found the key to GoldMine’s success. During his two-year stint as a software salesman with Banyan, Ferrara was often beaten to the punch by the local resellers of a competing company, Novell.
“The Novell resellers used to kick my butt as the enterprise Banyan sales rep because I had to sell at the top level, the enterprise, all the way down to everybody in the company, and that took months if not years,” he says. “Whereas the Novell guys sold into work groups.”
Rather than focusing on the top dogs at well established companies, Ferrara’s competitors got to know the small groups in coffee shops that would one day form successful startups and eventually large corporations.
With their bottom-up approach, Novell representatives were becoming the trusted go-to software salespeople of small workgroups, allowing them to spread more quickly and eventually become the corporate standard in a fraction of the time it took for top-level executives to make decisions.
So when Ferrara wanted to spread the word about GoldMine, he sought out his former competition. He called top Novell sellers and showed them what a difference GoldMine would make in their own businesses.
As they fell in love with the software, the trusted, local reps recommended it to their customers. Ferrara says that this proto-influencer marketing tactic was the secret sauce that allowed them to reach their first $100,000 in sales.
But as the business grew, so did the needs of the GoldMine customers. While Ferrara’s company initially targeted solopreneurs and small teams, they were rapidly being asked to cater to the needs of organizations with as many as 5,500 people. They needed a more scalable model.
So, when Microsoft approached Ferrara with a deal, he knew it would be mutually beneficial.
“They said, ‘Well, we just built NT Server, SQL Server and Exchange Server, and we want an independent software vendor to help us drive adoption because nobody’s going to buy SQL Server without a business application that calls for it and makes it sticky,’” he says.
As Microsoft created new servers, the company needed to find a way to sell them to business owners who were reluctant to leave the comfortable. By partnering with up and coming business applications that would run only using their newest servers, they drove sales of both products.
Ferrara decided to create a new version of GoldMine that supported the needs of larger corporations by relying on the tools provided by the Microsoft servers. In turn, Microsoft pushed GoldMine to its customers.
“We became corporate standard at 50 of the Fortune 500 companies, and that’s what propelled us to $100 million a year in revenue,” Ferrara says.
But as he stood on the mountaintop of success and looked down at what he had built, he began to question whether he wanted to keep climbing or if it might be time to take another path.
The life of an entrepreneur can be tough. Building a company, particularly a large one, requires high levels of dedication, brainpower, and time.
“Ten years of scaling a company to $100 million in revenue took everything I had,” Ferrara says, “and it cost me time and moments with everyone around me.”
He started searching for his exit.
It was 2000, the stock market was soaring, and Ferrara suspected it wouldn’t last, so when he was offered $125 million in cash to sell GoldMine, he took the deal.
Four months later, Ferrara says, the dotcom bubble burst, sending stocks plummeting. But even as he sighed with the relief of a bullet dodged and settled into the stay-at-home husband and father life, another much more insidious threat was already growing. One year after Ferrara sold GoldMine, doctors found a tumor in his brain.
“Life is going to hand you blessings, and it’s also going to smack you, and you can’t control that,” he says. “The only thing you can control is how you react to it.”
Ferrara chose to react in the way he knew best: through research and relationships. He visited a variety of doctors while also learning about Eastern medicine, and through a combination of these treatments, he says he healed his body while also taking a deeper look at his soul.
“I came to a simple conclusion about my purpose in life,” he says. “I think we are on this planet to grow our souls by helping other people grow theirs. Rinse and repeat. That’s it.”
Even though he had only planned to be away from the business world for a short period, his brush with mortality caused him to reevaluate where he invested his limited time.
“They don’t write on your grave, ‘kickass entrepreneur,’” Ferrara says with a laugh. “They say, 'beloved father, friend, husband.' So I decided to dedicate time to being a present father, husband, and contributor to my community…and to be able to do that at 40 years old was priceless. It was precious.”
So for nearly a decade, Ferrara was almost entirely absent from the world of technology. Then in 2009, as his 50th birthday approached, the rise of a new technological power caught his attention: social media.
Still with an eye for relationship building, Ferrara recognized that social media was about to reshape the way people related to one another and also how consumers related to businesses. He also knew that the current CRM options weren’t built to integrate with social media.
With contacts spread across CRM software, company software, and every kind of social media platform imaginable, salespeople were once again as overwhelmed trying to manage contacts as they were in the days of pen and paper.
“So I said to myself, ‘Imagine if you could build a CRM that worked for you by building itself from the disparate data you already have in your business—the email, contacts, and calendars that you have in GSuite, Twitter, Facebook and LinkedIn,’ and I built it,” he says.
In 2010, Ferrara built an exploratory team. In 2011, he launched a beta test. In 2013, the paywall went up, and so Ferrara returned to the entrepreneurial world with the creation of the social CRM, Nimble.
Back in the Game
It was like déjà vu. Once again, Ferrara felt he had a valuable piece of software, and once again, he had no easy avenue to market it.
“I’d been out of technology for 10 years,” he says. “Most people in technology have only been in technology for 10 years, let alone out of it.”
No one remembered who he was, or even what GoldMine had done. But while he may have lost name recognition and connections during his absence, there is one thing that had only continued to flourish in his time away: his ability to build relationships.
So, Ferrara dove into social media, sharing and commenting on the posts of thought leaders in the entrepreneurial space.
“Rather than me having to go out and write my own content, I shared content that resonated with me in and around the value that my product provided, which generated eyeballs to my brand,” he says.
Over time, this led to moments of interaction with the influencers whose content he shared. But he avoided diving right into a pitch for Nimble. Instead, he would hop on a call with them and ask them questions based on research about their lives and businesses.
“If you let somebody talk, you’ll learn what you need to learn to add value, and they’ll love you because people love to be heard,” he says.
As the connections grew, he would offer them meaningful introductions or even business ideas. Only when he was asked would he share his current venture, Nimble. And as he shared, some of those he spoke with decided to give it a try. Then those happy customers shared their experiences with their followings.
And while this approach to marketing took time, Ferrara believes you can’t put a price on authenticity.
“Real, solid relationships are one to one,” he says. “They’re heart to heart. They’re relevant and authentic. And when you blast, people feel it.”
His patient methodology led to over 100,000 Nimble subscribers and such high-profile investors as Mark Cuban and Google Ventures, all without a single cent spent on marketing. And, after partnering with Microsoft once again, Ferrara sees explosive growth in Nimble’s future.
With the rise of cloud computing, he has his eye on which businesses are finding the most success in that arena. And Ferrara points out that, according to the numbers, it’s undoubtedly Microsoft. He says that while G Suite has about 7 million users, Office 365 has 175 million.
“Essentially it’s really game over in the cloud productivity wars, and Microsoft dominates and will grow from here. “Most businesses that use Microsoft products rely on their local reseller to facilitate their adoption and implementation. Microsoft has hundreds of thousands of them around the world, and nobody has that.”
With Nimble’s status as the simple CRM for Office 365, Ferrara says they’ve signed up 30 of the 50 top Microsoft distributors and over 1,000 Microsoft resellers in just the last six months. And it’s only onward and upward from there.
But even though lightning has struck not once but twice in Ferrara’s journey as a tech entrepreneur, he feels that his greatest achievements are those he has made as a husband, father, and member of his community.
“Life isn’t about money,” he says. “It’s really more about the moments that create the memories. All you leave are the moments you’ve been truly present with the universe around you—with other human beings—and the ripples that you leave behind.”
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Erica Comitalo
Direct download: FP260_Jon_Ferrara.mp3
Category:general -- posted at: 7:03am AEST
Thu, 18 July 2019
Taking on Google
Gabriel Weinberg has made it his mission to protect internet privacy, and his scrappy Google competitor DuckDuckGo is leading the charge.
Everything we do online is tracked. Searching, browsing, shopping, even navigating.
Most of us have grown accustomed to this. Although we may acknowledge now and then that it makes us uncomfortable, we haven’t changed our habits. Maybe we’ve become too reliant on our preferred online services for basic day-to-day tasks. Or maybe we don’t even know how we’d change our ways in the first place.
This is a problem that Gabriel Weinberg has been helping people solve since 2008, when he first created privacy-focused search engine DuckDuckGo. While the company has been charging ahead ever since, Weinberg’s mission is on everyone’s mind these days. Concerns about internet privacy and data protection are at an all time high, following recurring scandals around tech companies leaving their users vulnerable.
While still far smaller than industry leader you-know-who, DuckDuckGo’s popularity is surging, thanks to its commitments to never collecting personal information or tracking your activity to sell to advertisers. The search engine offers other services like informing the user of what tracking is being blocked, and now has a mobile privacy browser and desktop plugins. Since incorporating in 2008, DuckDuckGo has grown to a global company of 63 employees.
As internet privacy has taken the spotlight, Weinberg’s been busy, writing and advocating for federal “do not track” legislation, and speaking up in the New York Times opinion page and other platforms. He’s also got a new book out that explores the power of mental models he’s relied upon during his career.
But Weinberg’s core mission remains: to make it a lot easier for you to use the internet without being creeped on.
The Start of DuckDuckGo
DuckDuckGo is a search engine, but it’s also an internet privacy company that’s out to help you protect yourself online.
“We like to say the internet shouldn't feel so creepy, and protecting your information should be as easy as closing the blinds,” Weinberg says.
DuckDuckGo offers a variety of tools to help consumers achieve this privacy—and feel confident about it. The company started as a search engine and has since expanded to offer a browser for iOS and Android, along with extensions for desktop browsers.
The company is 10 years in the making, but it wasn’t Weinberg’s first internet startup. After graduating from MIT in 2003, he created educational software that supported student achievement by using the internet to connect parents and teachers. Unfortunately, the software was developed about 15 years too early, and it fell flat.
Next, Weinberg started a pre-Facebook social network that helped people find old friends and classmates. That fell apart in 2006, and DuckDuckGo followed soon after in 2007. The company incorporated in 2008 and officially launched at the end of that year.
So, how has DuckDuckGo competed with giants like Google for over 10 years and lived to tell the tale? It’s a modern day David and Goliath story, although in this case David is growing bigger and stronger every day.
Weinberg attributes a lot of DuckDuckGo’s success to his team. As he often tells other entrepreneurs, “If you're going to succeed, you're going to need an amazing team around you. Work on crafting the values and mission to attract a team... to reach your ambition.”
The Power of Mental Models
Weinberg also credits much of his success to years of dedicated research on mental models, which he’s recently turned into a book with his wife Lauren McCann, Super Thinking: The Big Book of Mental Models.
“Mental models are concepts ... be a better strategic thinker,” Weinberg says.
He encourages people to think of mental models like this: When you first learn arithmetic, you learn addition, then multiplication based on addition. If you didn’t advance to multiplication, you could still combine quantities using addition, but it would take you much, much longer.
Mental models operate the same way. “Once you know something, you can think in a higher-order way really quickly,” Weinberg says. On the other hand, if you didn’t have a mental model, you’d have to start from scratch, every time. It’d be more difficult and time-consuming to make good decisions, repeatedly.
When he started training the DuckDuckGo executive team, Weinberg realized a significant knowledge gap: His team didn’t recognize more than half the mental models he’d instructed them to learn and use.
That’s how Weinberg and McCann, a statistician, came up with Super Thinking—when he realized his current training method was inefficient and no other resource would suffice. Through their research, they also realized that many of the mental models were related.
Almost all 300 mental models in the book are existing concepts. Super Thinking simply collects and organizes them into main themes—nine, to be exact. The last two themes are called “Unlocking People's Potential” and “Flex Your Market Power,” and the mental models in these chapters apply to leadership, management, and other business best practices.
“People are really different, and if you want to manage effectively, every person requires different characteristics,” he says. That’s why effective managers take the time to understand personality types and strengths, using questionnaires like Myers-Briggs and DiSC.
One notable mental model is called Joy’s Law, which tells us that all of the smartest people already work for someone else. “This means that you can’t corral smart people,” Weinberg says. “Instead, if you arrange people in just the right way and give them jobs that fit , they can reach extraordinary success both as teams and individuals.”
In their book, Weinberg and McCann explain that Joy’s Law also overlaps with mental models like 10x Teams and Resonant Frequency, the latter coming from physics. “A lot of mental models come from different disciplines,” Weinberg says. “The idea of mental models is to take a multidisciplinary approach—to take the best ideas from all different disciplines and combine them to use them for general strategic thinking.”
To understand Resonant Frequency at work, imagine an opera singer breaking a glass by hitting just the right note. “The same happens with people; hitting the right frequency and absorbing energy from the right role and jobs,” Weinberg says.
But just as a singer can’t break glass with every note they sing (it’s actually quite rare), a team can't operate at a resonant frequency at all times. So, how do you know when you’ve reached it with your team? You constantly shift around your team and test to see which combination produces the best output.
That’s what Weinberg does at DuckDuckGo, where he doesn’t have a traditional management hierarchy. Instead, they’ve divided management responsibilities between positions and operate based on objectives and projects, and the team doesn’t hesitate to shuffle around when needed.
”We are constantly moving people around to fit what they're most interested in and best suited for... to achieve these 10X Teams,” Weinberg said.
Gaining Traction for Growth
Weinberg previously authored Traction, which serves as a scientific experimentation approach to marketing. In it, he systematically lists 19 different channels that companies can use to gain traction with their audiences.
“My advice is to not leave anything out,” Weinberg says. “It’s often one of the unusual things might be the thing that actually works.”
Over the last 10 years, DuckDuckGo has found that different stages of growth have required different marketing channels. In the early stages of growth, the team used social media, content marketing, and PR, but these channels eventually saw diminishing returns. Since then, the team has transitioned to organic, viral growth and offline word-of-mouth marketing.
In the last nine months,DuckDuckGo has succeeded at brand marketing that has also raised market share. “I wrote some long-form articles on Quora on topics like why to use DuckDuckGo vs. Google, how tracking works, how to avoid it, and more,” Weinberg says. “These got such high engagement, more than anything else.”
Since publishing the posts, Weinberg and his team have been working to promote that content on platforms like Quora and Reddit. As one of the first native advertisers on Quora, their posts have been promoted to over 150 million people per month.
“It’s all about finding bigger audiences and putting content in front of them that's compelling and native to the platform,” Weinberg says. The team has made just seven Quora answers and has been promoting them to 100 million people. It’s not cheap, but it’s working, he says.
What is DuckDuckGo’s traction like at this point? Since the DuckDuckGo engine doesn’t track unique users, they can only report on total searches, which is currently at over 1 billion each month. For a company competing in a search engine space that’s dominated by one player, that’s pretty astounding.
A top 100 website, the engine is ranked #4 in most countries and #3 in Australia. “Some third party estimates say we’re at 50 million users per month, which would be about 40 million searches per day.”
What’s Next for DuckDuckGo?
How does a search engine that doesn’t track customer data make money?
“Search is unique because Google still makes money off search without having to track much ,” Weinberg says. Instead, Google conducts contextual advertising, which displays ads based on what a user is searching (versus behavioral advertising which uses customer data to display ads).
DuckDuckGo can do the same contextual advertising without having to track any data. Calculating customer lifetime value (LTV) isn’t as simple, though. “It’s is even more difficult because of the lack of tracking,” Weinberg says.
Instead of relying on customer data, the company measures factors like brand awareness and market share. Through national surveys, DuckDuckGo asks users if they're familiar with the brand, how they heard about it, and if they associate it with privacy.
Feedback is an important tool at DuckDuckGo. As they’ve expanded their product line, the team conducted primary research on privacy and people who are interested in privacy.
“We ran different methodologies, national surveys, user tests, and diary studies,” Weinberg says.
DuckDuckGo’s diary studies involved a small group of 12 to 15 people who adopted the product and kept a diary for a period of two weeks. The team would then check during those two weeks to see how the subjects were using, navigating, and feeling about the product.
“We found that would use DuckDuckGo but then click off to other websites that can track,” Weinberg says. “They felt unprotected, and we realized search was only part of the solution.”
This inspired the company’s latest release, DuckDuckGo Privacy Browser, including extensions for desktop that help block trackers and enforce greater encryption across the internet.
“It’s all about encryption and education,” Weinberg says. “We’re trying to simplify privacy.”
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Allie Decker
Direct download: FP259_Gabriel_Weinberg.mp3
Category:general -- posted at: 8:28pm AEST
Wed, 10 July 2019
Selling Luggage and a Lifestyle
How Steph Korey and Jen Rubio co-founded a luggage company for the modern adventurer that is taking the world by storm.
Jen Rubio called her friend Steph Korey to vent about an irritating, expensive problem that just about any frequent flyer has endured at some point. She had a busted carry-on.
Rubio was suffering from suitcase-demolition blues, and Korey wasn’t sure what brands to recommend. So Rubio texted a dozen of their trendiest, travel-savvy friends—the kind of people who would know all the best hotels in Bangkok—but they had no clue where to direct her to buy the perfect suitcase. They were quick to tell her which brands to avoid—sharing similarly frustrating stories of failure—but no one had the answer she was searching for.
The search seemed hopeless.
A single, action-packed year later, Korey and Rubio shipped the very first piece of Away carry-on luggage.
Today, the luggage company that is so much more than a luggage company has sold over a million bags to customers across the world and captured the imagination of a generation known for its desire to chase down experiences instead of possessions.
“This business isn’t really about luggage or suitcases at all,” Korey says. “What we’re really creating is a travel brand, and travel has the ability to really impact someone’s life.”
With an eye on revolutionizing the luggage industry while leaving the world better than they’d found it, Korey and Rubio designed a bag that is durable, practical, and looks dang good in an Instagram photo.
And that was only the beginning.
Charting the Course
In the beginning, Korey wasn’t sure she even wanted to start a business. She just wanted to learn more about the way other people traveled.
She and Rubio had become friends while working together at Warby Parker, the online store that home delivers hip eyeglasses at affordable prices, so they knew firsthand the challenges that come with life at a startup.
Rather than cannonballing into the deep end, the pair chose to start small and simply follow their curiosity. They decided to create a survey and send it to 50 people in a vast array of demographics, including male and female students, young professionals, established professionals, and retirees, who lived both in the US and abroad.
After sharing information about how they traveled, how they packed, and what travel products they used, each person taking the survey was asked to forward it to five of their friends who also came from varied backgrounds.
When the survey finished making its rounds, Korey and Rubio had over 800 responses to sift through. The pair was quickly able to start noticing themes, particularly when it came to how the existing luggage industry wasn’t meeting travelers’ needs.
The survey results showed that travelers wanted a light piece of carry-on luggage that maximized packing space and still fit in the overhead compartments of airplanes. They also dreamed of a bag that could take a baggage handler’s beating if they decided to check it, including wheels and zippers that wouldn’t fail.
Respondents also expressed the need for a place to put dirty, sweaty laundry after trips to the gym, summer walking tours through cities, or perilous mountain climbs. Oh, and they hated traveling with dead cell phones.
With these results in mind, Korey and Rubio moved into the next stage of development.
Korey says they were still unsure whether they wanted to start a business when they sat down with a group of designers from the fashion, luggage, and industrial design industries. They weren’t even sure when they decided to partner with two industrial designers to transform their findings into a product design.
The team had plans for their new carry-on bag in one hand, and plane tickets to Asia—where they planned to meet with dozens of luggage manufacturers—in the other, but were still unsure where this journey would land them.
It was only when a family in the manufacturing business told them their radical design could be actualized that it all clicked together. And just like that, the family agreed to manufacture the first 3,000 Away carry-on bags.
Well, not quite.
“I’m glamorizing this story a little bit,” Korey says. “It’s, in reality, probably a little more along the lines of we begged them to work with us.”
Korey and Rubio spent days with the family, attempting to convince them to manufacture the bags. With every new pitch she used to convince the family—that they were about to revolutionize the luggage industry, and their business model was totally unique, and this was a chance to get in on day one with a company that was going to be huge one day—she felt herself becoming more convinced that this was it. It was finally time to start this business.
Their manufacturers came around, too.
“I’m entirely certain that they didn’t believe any of that,” she says. “Actually, they’ve told us that they didn’t believe any of that, but that we were so sincere and passionate about what we were doing that they just couldn’t turn us down.”
Now that the ball was officially rolling, and Away was on the verge of becoming a reality, they had to jump a final, daunting hurdle. They had to find the money.
“Raising any kind of capital is difficult, but raising seed capital is particularly difficult, because you can’t really tell the story of your business metrics at all, because they don’t exist,” Korey says. “You just have to tell the story of your vision and what you’re trying to create, and it really takes a leap of faith from investors.”
But she adds that the knowledge she had gathered from her time leading the supply chain at Warby Parker, and Rubio’s experience in the marketing team there, gave them a definite advantage.
“That is for sure the only reason that we were able to convince investors to take that leap of faith,” she says. “We knew what we were doing, and we would create something that resonated and that was successful.”
In fact, she recommends that all aspiring entrepreneurs invest some time working at a startup.
“I think it’s essential that you spend at least a couple years working at a startup first, for two reasons,” she says. “One, find out if you like it! Some people don’t like that chaos. … And then the second reason is it really gives you a sense of context of all the different pieces that go into creating something from nothing.”
In the summer of 2015, Korey and Rubio were ready to create something, so they met with more than 20 different investors across the United States over the course of a week.
After many failed pitches, and several uncomfortable red-eye flights, the pair met with Forerunner Ventures, a Silicon Valley venture capital firm that invests primarily in early-stage ecommerce brands.
While most of the firms they met with simply didn’t understand what they were trying to do with Away, Korey says that Forerunner was captivated by their vision.
“We’re really creating a broader brand and business around inspiring people to live a life of new experiences, and equipping them with all the products they need to make those travel experiences more seamless,” she recalls saying in her pitch.
Within the first meeting, Forerunner was on board as a partner. With over $2.5 million raised, it was finally time to make some suitcases.
Excited by the prospect of holiday sales, Korey says they set their launch date for November 2015. But as the date drew closer and the production of the first 3,000 suitcases was delayed until February of the following year, they had to get creative.
Instead of selling the suitcases during the holiday season, they published a coffee table book called, The Places We Return To and paired it with a gift card for the February release of the first round of suitcases.
“It was really one of the first moves we did as a brand really establishing ourselves as first and foremost about travel and not about travel products,” Korey says.
In the book, they featured stories and photos of successful chefs, writers, photographers, and other talented professionals. Each person was asked about their favorite place in the entire world, why they loved it, and what they did during their visits.
“We ended up with this collection of short stories that were very intimate because it was about people who were so knowledgeable about their favorite place in the world,” Korey says.
Those featured in the book helped spread the word about the exciting new travel company, its mission, and the revolutionary new suitcase that was on the way. And the word traveled like a millennial with a break between jobs.
Korey says they prepared 2,000 books and gift cards. By Christmas, every one had sold.
Embarking on the Journey
In February 2016, the first ever Away customer (his name is Adam) received his carry-on bag. Three years later, over a million bags in a variety of colors, shapes, and sizes have made it across the world in shipping boxes, overhead bins, and car trunks.
The ribbed, hard-shelled luggage is becoming more recognizable by the day. By offering their luggage at direct-to-consumer prices, what was once reserved for only the chicest of travelers could now make it to the general public.
They take their social impact seriously, as well. Away works with manufacturing companies that have, as they say on their website, “exemplary and thoughtful work environments we would want for our own employees.” The company has also partnered with several charitable organizations, including Peace Direct, Charity: Water, and Kode with Klossy.
So what’s next for Away?
Korey says the company is currently working to expand across Europe, Asia, Australia and other parts of North America. Taking a page from Warby Parker and other disruptive ecommerce startups, they’ve also launched a brick-and-mortar component to their business with six American storefronts and one in London.
And as Away continues to expand, they’ll continue to release new products that support the modern traveler.
Korey is excited to see where the company goes next, not merely because she wants the business to flourish, but because she genuinely cares about the needs of Away customers. From the moment Korey and Rubio sent their first survey, they knew that the “why” behind their brand lay directly at the feet of their customers.
“You should never start a business because you want to start a business. It’s a terrible reason to do it. It’s going to be a long slog if you’re not really focused on a particular insight or a problem that you’re trying to solve,” she says. “Whether you’re just getting started and you don’t know where to start, or you’ve already gotten started, and you’re trying to figure out the next step, it really starts with deeply understanding the customer.”
It starts the way Away did: with a need, an idea, and a customer survey.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Erica Comitalo
Direct download: FP258_Steph_Korey.mp3
Category:general -- posted at: 2:37am AEST
Wed, 3 July 2019
Hunting for the Next Big Thing:
How Ryan Hoover established an online home for tech geeks that changed the way makers get inspired, recruit, and launch their products.
When he wasn’t overseeing the gumball machines at his parents’ video game store as a kid or pushing carts at a home improvement store as a teen, Ryan Hoover was tinkering with tech.
As personal technology advanced, and new programs and applications exploded, Hoover and his friends were fairly obsessed with whatever was emerging from the Silicon Valley pipeline next. Over the years, however, he found that there was no single outlet that satisfied his cravings to learn about the very latest products and developments.
Sure, he avidly scrolled tech Twitter and Reddit threads. But what if, he wondered, there was some kind of a reliable destination where those in the tech field, or otherwise infatuated with its latest offerings, could show up regularly to talk shop—to share and learn about all the latest and greatest in tech?
“The initial inspiration was just the desire to explore new technology,” Hoover says.
So began a side project that, in just over five years, has become the wildly popular hub for the tech community, Product Hunt. In 2018, more than 1 million registered users and many more unregistered visitors stopped by Hoover’s creation, and over 20,000 products launched on the site. More than just a news site or message board, Product Hunt has evolved into the definitive place for makers to introduce their new projects and learn about what their peers are up to.
But this great, big community all began with a simple email list.
Building a Home for the Tech Community
Hoover had been working in a product management position at growing startup PlayHaven, where he was employee #10. He values his time spent at the company, especially lessons learned about management. But at the time, he had only been out of college a couple of years, and was eager to try hs hand at something new, so Hoover moved into a part-time role to explore new projects.
Going part-time gave him the space in his schedule that he needed to pursue something of his own. He’d been mulling over the idea of Product Hunt, and the time had finally come to make it a reality.
It began as a simple email newsletter between friends sharing the latest tech product releases and mind-blowing apps they stumbled across. But soon, friends of friends and friends twice removed were added to the list.
Before long, Hoover was managing an email list that included far more strangers than friends from all around the globe. He decided to bring his friend Nathan Bashaw on board to build a website, giving Product Hunt a home online, and the community continued to flourish.
“We sort of filled this hole I think, in the market that no one really observed or noticed,” he says. “We do have Twitter, and we have subreddits around technology, and we have blogs and publications talking about new tech, but there is really no home for the tech community to talk about the latest products.”
With a brand new website, Hoover planned to turn it into that home.
But in order to host meaningful conversation, he knew he had to engage users with something other social platforms weren’t offering. Hoover says he intentionally focused on positive community building from day one by sending personalized welcome emails to each new user who joined Product Hunt.
“As proud as I am of what we’ve built on the product and technical side, that’s not what’s going to make us successful or make us special and unique,” he says. “It’s really the people and the brand that we’ve built.”
But the site membership ballooned rapidly, not only exceeding his ability to email each new visitor, but also evolving into much more than just a side project or an email list.
Product Hunt grew to fill an important hole, helping entrepreneurs face a daunting task that so many in the tech space must take on at some point: product launch.
Reinventing Launch Day
Hoover noticed that traditional media outlets were the primary way that creators would get the word out about new products, but even tech publications weren’t particularly suited to support a launch. It’s also hard work to land coverage.
“Historically, to get your first users, to get the word out, a lot of people would go to the press to do so,” he says. “They would have to have a relationship in many ways or get lucky cold emailing reporters and hoping that they’d get somebody to write about their company.”
And when launch day is imminent, few creators even have the time to dedicate to those pitches.
On Product Hunt, tech creators can share their new products in detail, build a following before launch day, and advertise to groups of people who are most interested. Makers, founders, and startups soon flocked to the website, eager to share their newest releases, and the community responded with upvotes galore.
Even visitors to the site who had not yet built products of their own could find incredible value on Product Hunt, Hoover says. He points out that the site is full of inspiration for future makers, and is just a great way to pass an afternoon.
“I like to think that it’s like a productive procrastination,” he says. “Instead of looking at maybe cat photos or memes on the internet, at least you’re spending time exploring what people are building.”
And maybe gathering ideas for “the next big thing.”
Comparing it to an afternoon in a museum for an artist or a visit to a music venue for a songwriter, Hoover says that a scroll through Product Hunt can trigger fresh ideas and show up-and-comers new ways to approach tech.
“I think if you’re someone who’s excited to build a company in the future or if you’re a product manager, or whatever your role is, I think there’s a lot of value in searching for inspiration,” he says.
As traction grew, so did their reach, and before long, San Francisco-based Hoover noticed that over 50 percent of Product Hunt’s audience was international.
“It’s cool in that sense because it’s not just a reflection of Silicon Valley technology,” he says. “It’s a reflection of the world and the technology that’s being created all over the place.”
Hoover had a successful brand on his hands. All he had to do was figure out what’s next.
Planning for the Future
In 2016, three years after Product Hunt launched, Hoover and his team mulled over whether they should begin another round of funding or pursue acquisition. Unsure which way to go, they decide to take the first steps down both paths, and then go with the one that had a more natural fit.
Because community was such an important aspect of the business, both internally and externally, Hoover wanted to ensure that, if they did pursue acquisition, the companies would have complementary cultures.
“That’s where a lot of acquisitions can go sour,” he says. “There can be a wildly different culture or vision for the company, and if that’s not aligned then it’s probably not going to work out long term.”
During the company’s first two rounds of funding two years earlier, Naval Ravikant, the CEO and co-founder of AngelList, had invested in the company. He already understood what Product Hunt was all about and appreciated the work they were doing, so when he approached Hoover with an acquisition proposal, Hoover realized that this was the natural fit he had been waiting for.
While he acknowledges that the AngelList culture isn’t a clone of the culture that exists within Product Hunt, he feels that they weave together into a perfect fit.
“It’s sort of like when you hire a teammate,” he says. “You don’t want them to be just like you. Ideally, they have a similar belief and mission as yourself but also have different skills and different areas of focus. That’s kind of how I think of AngelList and Product Hunt.”
Both companies have similar passions for tech and supporting founders, while AngelList focuses on engineering and Product Hunt approaches those passions from the angle of community building, Hoover says.
Nearly three years have passed since the acquisition, and Hoover feels things are going well. Product Hunt continues to operate mostly independently, and has employees across 10 countries, all communicating via Slack. And the platform has continued to evolve.
Today, creators in the tech space can advertise jobs, promote events, and launch new products with ease. They can also promote an upcoming product launch through the tool Ship, a three-in-one toolkit where makers can create landing pages, build email lists, and send out surveys without bouncing between platforms.
As the world of tech continues to expand, Hoover sees a future of continued growth and ever-increasing user engagement for Product Hunt, particularly this year, as they direct their primary focus toward increasing users and community contributions.
No doubt, as technology continues to advance far beyond anything we can imagine, Product Hunt will be there, ever inviting users to discover their next favorite thing.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Erica Comitalo
Direct download: FP257_Ryan_Hoover.mp3
Category:general -- posted at: 5:45am AEST
Wed, 26 June 2019
A Digital Meet Cute
How Geoff Cook linked up dating apps and live-streamed video to form a happy and profitable relationship.
Geoff Cook has built a small empire of successful meeting and dating apps—beginning long before anyone ever swiped right on Tinder—by following a philosophy of fearlessly trying new things.
“Ten years from now, what will I have regretted—losing half a million dollars or not having done the thing that I wanted?”
Of course, the fact that he has a half a million dollars to lose in the first place should be some indication that a lot of those risks have paid off. Thanks to a series of auspicious business decisions, starting with a profitable essay and resume editing business he launched as a sophomore at Harvard, Cook is living proof that experimentation lies at the heart of a successful startup career.
While his fellow Harvard-attendee Mark Zuckerberg was busy refining Facebook, Cook launched his own spin on a social media platform. Rather than focusing on adding friends that users already knew in real life, his platform would be geared toward meeting entirely new people. So myYearbook was born.
Today, myYearbook has evolved, changed hands, and expanded to encompass a whole collection of meeting and dating apps, all housed under The Meet Group, where Cook serves as CEO.
“I tend to be a tinkerer,” he says. “I’ll push forward an idea even if it seems strange, just because it’s an itch and just keep moving the ball forward. Sometimes, opportunities fall out of that, and sometimes you just lose a lot of money. But it’s an itch I had to scratch.”
In this instance, Cook’s itch proved to be so much more.
Cook started his first business in 1997 when, while still writing college essays of his own, he decided to put his economics classes to work and start a small side hustle editing his classmates’ papers and resumes.
But in astoundingly short order, EssayEdge and ResumeEdge had scaled to millions in revenue, and the Thomson Corporation was knocking at his door with an acquisition offer.
So Cook sold his first business in 2002, and just like that, he had the seed money to begin his first post-grad venture. But it wasn’t until he was in his mid-20s, when the social media era had just begun, that the light bulb flicked on.
“The thought was that there needs to be a place to connect to people you don’t know,” he says. “It seemed both MySpace and Facebook were heavy into connecting to your real life friends.”
Teaming up with his brother and sister, who were both still in high school, he created a social network designed to introduce rather than deepen existing friendships. Using games and his search algorithm, making new connections was simple.
All they needed now were users. Luckily, the Cooks had the perfect in.
At Montgomery High School in Skillman, NJ, where both of the younger co-founders were still in school, myYearbook rolled out in 2005. In the first two weeks, there were hundreds of users. Within nine months, there were over a million.
But the road to a million required some clever maneuvering.
“I think we built a pretty good mousetrap in the beginning, but we had nobody in it,” he says, laughing. “What really helped it take off was…we were able to create this great quiz app that ended up getting millions of users every month.”
Reminiscent of today’s Buzzfeed quizzes, users would take a quiz to determine what Seinfeld character they were most similar to. They would then share their results on their MySpace profile, and when a friend—intrigued to learn whether they were an Elaine or a Kramer—clicked on the link, it whisked them away to myYearbook where they were invited to register.
“Quizzes are a very high-uniques business,” Cook says. “You get a lot of uniques, but you get very few page views per unique, because you only basically need to see the quiz and the quiz result. So we turned that business from two page views per user to closer to two or three hundred, because we brought them into a very social experience.”
Once the former MySpace users began chatting with the new people they met through myYearbook, the platform blossomed.
“That was when we were basically off to the races,” Cook says.
But unfortunately, “the races” had an expensive entry fee.
‘The Servers Were Melting’
“We had to raise some money,” Cook says. “The servers were melting. The traffic was growing. The expenses were going up.”
So, in 2006, to keep their rapidly growing platform afloat, Cook and crew decided to begin their first round of funding. The success of this venture round left them with enough money to put a team and an office together.
The social media website continued to flourish, and in 2008, they began a Series B round of funding that enabled them to raise $12.8 million just before the financial crisis laid waste to the economic landscape.
Grateful for their luck, but tired of raising capital, they vowed that this second round of funding would be their last, which meant only one thing: it was time to monetize. Luckily, Cook had a rapt audience at his disposal.
“I’m of the belief that if you can amass a big enough audience…you can monetize it,” he says, “especially if it’s an engaged audience that’s spending 10 or 20 or 30 minutes a day with you.”
In 2011, revenue was up to around $25 million to $30 million, and Cook was thinking long term. What was next for his company?
When he was introduced to Quepasa—a company similar to myYearbook but for South America, and the first publicly traded social network—he knew he’d found a fit. The two companies merged, transforming myYearbook into a publicly traded company, and Cook thought the time had come to rename the company, as well.
“We were always a social network for meeting new people, but the name [myYearbook] to people who didn’t know that made people think of Classmates.com,” he says. “It was not really what we were about, so we changed the name to Meet Me.”
As part of the merger, Cook stepped into the role of COO with the intention that he would soon move back into the CEO role. In 2013, he made his return as CEO of the company, a position he has held since.
When asked how the job of CEO at a private, venture capital-funded company differed from that of a publicly traded company, he says that the two roles are far more similar than they are different.
In a privately owned, venture-backed company, he says, the CEO answers to several large investors who are knowledgeable about the industry and who demand growth. It’s the same for a CEO whose company goes public, he says. There are just a whole lot more investors to keep happy.
Cook says it can be difficult to know when the time has come to take a company public, but he did offer some insight for founders.
“I think the best time to be public would be when you have a lot of insight into your future revenues and profits,” he says. “One of the key differences of a public versus private company is that…you offer some guidance for the year—or even long-term guidance—on how the business is going to go, and then you’re measured to a quarterly yardstick on that.”
Without a degree of foresight, he says that going public would be an extremely difficult task.
“If you don’t have enough insight into your business to know your revenues except within a very wide range, or to know your profits except within a very wide range, that’s probably not the best candidate to be public,” he says. “You’re just setting yourself up to have some very bad quarters.
In other words, the key is predictability. But he reminds business owners that even the most predictable companies can present a challenge.
“You’re never gonna know everything, and there’ll always be some surprises, because things happen,” he says.
But despite the added pressures and challenges, Cook insists that there are many advantages to being publicly traded.
“There’s definitely pros and cons of being public,” he says, “but I would say we’ve had more pro than con.”
And the primary advantage of going public for Cook was a clear path toward acquiring other companies.
Forming the Group
Not long after myYearbook became Meet Me, the business was renamed The Meet Group, the moniker it’s known by today. Because the business encompassed more than a single app, the name change was apt, and it only became more appropriate as the years passed.
In late 2016, The Meet Group acquired Skout, a meet-up app that was approaching its 10th birthday. Then in 2017, they acquired Tagged, the San Francisco-based meeting app with high engagement in the African-American community, and Lovoo, a European dating app. And this year, The Meet Group also acquired GROWLr, a dating app geared toward the gay community.
But Cook says all of these acquisitions stemmed from a strategy inspired by one popular Chinese dating app. The company decided to start building a live-streaming video product after seeing its success at a Chinese dating platform called Momo.
Cook felt the app was somewhat similar to Meet Me, and when Momo added live streaming, he says that about 90 percent of Momo’s revenue was a result of that service. The Meet Group wanted to give it a try.
“We were also kind of clear-eyed enough to know that building a live-streaming business is a big commitment,” Cook says. “It’s essentially kind of an all-in sort of company bet.”
It was the kind of bet Cook was comfortable making. So they dove in headfirst and got to work building up the infrastructure, talent, and moderation capabilities they would need to execute their plan. And it paid off in tens of millions. Cook says that their annualized live video revenue grew from $0 to $82 million in just 16 months. This became the inspiration behind their acquisition of meeting and dating apps—to integrate video and watch as revenues skyrocketed.
“If we believed in our story enough to make that bet, well, then we could make that bet again and again,” he says. “There’s no reason not to double down, triple down, quadruple down on it.”
As they acquired social apps and fitted live-streamed video into them, they noticed that the engagement on those apps markedly increased.
“In meeting- and dating- and chat-oriented communities, there’s often periods of time where you just don’t have any inbound chats,” he says. “So, it’s kind of boring.”
But rather than exiting the app, the users of the video-fitted apps can simply hop into the tab labeled “Live” during those gaps.
“Our users are coming to us for human connection,” he says. “Meeting new people is kind of all about that. Interactive live video is actually human connection, right?”
Cook says that around 20 percent of their users visit the live streaming sections of the apps each day and that those users, on average, spend 20 minutes more a day on the app. Users can watch popular streamers, send them comments and witness their reactions. They can also buy and send digital gifts to the streamer.
“They do this because they want the attention of the streamer,” he says. “It’s almost like buying someone a drink at the bar. You don’t have to, but if you want a better shot, you maybe should.”
Cook is pleased with the success The Meet Group has found by incorporating live streaming into the apps—but he still has his eyes on Momo. Thirty percent of the Chinese app’s users visit the live section daily, a goal that Cook wants to push toward.
He also wants to continue pushing the boundaries of live video and sees one-on-one live video and various video dating experiences in the company’s future.
As the social media landscape continues to coalesce around a select few apps, this self-proclaimed tinkerer believes that the unique nature of his business will allow it to keep flourishing.
After all, as long as there are people searching for connection, there will always be a need to meet someone new.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Erica Comitalo
Direct download: FP256_Geoff_Cook.mp3
Category:general -- posted at: 12:09am AEST
Wed, 19 June 2019
Great service is hard to come by. This eternal problem is what Jim Penman set out to solve when he started his part-time lawn-mowing business—and even though his business has since grown into a multimillion-dollar enterprise known as Jim’s Group, it’s still the core focus.
Jim’s Group was an unintentional empire, started by an aspiring academic back in the 1980s. Today, Penman’s company has almost 4,000 franchisees that provide over 50 services around the world. As a result, Jim’s Group has become a household name in Australia for all things home services.
Here’s how Penman grew his business from a humble mowing service to the largest franchise in Australia.
The Unintentional Founding of Jim’s Group
In the 1970s, Jim Penman was pursuing his Ph.D. in history at Latrobe University in hopes of joining academia. His plans changed, however, when he graduated in 1982 and realized he had little to no chance of working in academia: “My ideas were far too wild.”
At the time, Penman also happened to be operating a part-time lawnmowing business, as he made his way through the grueling grad school years. This turned into a full-time gig upon graduation. “It was something to do until my real business came along.”
Or so he thought. While he waited for his real life to kick in, Penman was excelling at his temporary one. He had a passion for making customers happy, which made it easy for him to attract and keep regular clients. “It was the biggest thing I had going for me,” he says. He also found success building and selling ramps (for transporting mowing equipment onto raised beds or platforms) to his customers.
As his business grew, he tried employing subcontractors, but he couldn’t find people who matched his quality of service. Then in 1986, necessity forced him to evolve.
Major competitor V.I.P. Home Services came to town. This was a turning point for Penman. “I simply franchised in self-defense,” he says. “Otherwise, they’d swallow me whole.”
For those unfamiliar, franchising allows other entities to use your company’s name, trademark, business strategies, and so on in order to share essentially the same products and/or services offered by the franchisor. Franchisees typically pay a licensing fee and a percentage of sales revenue to their franchisors. It’s an effective way to quickly expand a business without massive financial investment.
Penman started with about a dozen franchisees, most of whom were previous customers. But even as Penman expanded his business, his focus still remained on the short term. He truly had no idea his business would grow to where it is today.
“When people asked me how I thought might go, I said, ‘If it's really successful, one day I could have as many as 100 franchisees,’” Penman says, laughing. “That was my reach goal. Now, I have just under 4,000.”
Franchising Jim’s Group to 4,000 Strong
When Penman was a contractor, he had one simple idea: He wanted to make customers into raving fans. “I wanted customers to be so delighted that they’d recommend me and use me forever.”
That was the core concept of Penman’s business, and when he franchised, he had the same concept for his franchisees.
With that in mind, he developed a contract that would catch the eye of any prospective franchisee. His goal was to make it so enticing that potential owners would be “mad not to join the system.” Penman even got ahold of a competitor’s contract to better understand how he could make his more favorable.
For example, he promised his franchisees that he wouldn’t take regular clients from his franchisees without their consent (unless a customer complained). He promised territory rights—meaning he couldn’t give any client in their area to anyone else, but they could take work wherever they wanted. Penman also promised an automatic right to renew.
“This was all really strange stuff,” Penman says. “One reason it took nine months to get the contract done was because the lawyers kept arguing with me.”
They thought he was being way too nice and that the contract was unreasonable and extreme. They encouraged him to “soften it down,” but over time, he actually provided his franchisees more rights. These included the right to move to another regional franchisor, to walk away from the franchise for a small exit fee, and to vote out their franchisor.
At every stage, Penman put his franchisees first. In his opinion, the secret to looking after your customers is having a great staff. The same thing applies to great franchisees—you make them the actual first priority.
“There’s nothing particularly clever about what has done,” he says. “It’s more how we do it that matters. The way we treat our franchisees, how we maintain quality, how we make sure they're looked after, that they're happy…that's the innovative part of the system.”
As you can imagine, Penman’s franchisee selection process is quite rigorous. With such a favorable franchising package, many people apply, but few are chosen.
“We are very selective,” he said. “Unless I’m convinced they’ll succeed, I don’t accept them.”
When interviewing franchisees, Penman looks for a handful of key attributes: Good character, a concern for customers, reliability, and basic decency. He takes each interviewee on test drives to watch them perform their service. He also never accepts anyone who is not putting up their investment money themselves.
“To run a successful cleaning or mowing, you don't have to be a genius,” Penman said. “You have to be somebody with good character.”
Expanding the Jim’s Group Services
In the first few years of his business, Penman didn’t just expand through franchising. He also began adding different service divisions.
With a successful mowing system in place, Penman considered how he might apply his approach to other services, such as cleaning. He created a separate cleaning brand called SunLite and sold a couple of franchises. That avenue failed completely.
Penman liked the idea of expanding under the Jim’s Group name, but he didn’t think it’d be successful, because the brand image was so vastly different. Who’d hire a cleaning service with a brand image of gardening and mowing?
Well, a lot of people did. Penman added a cleaning division to Jim’s Group and found that the familiar brand name actually helped grow his new business.
Penman continued expanding under the Jim’s Group brand to include services such as dog washing, computer services, bookkeeping, and roof repair. Today’s Jim’s Group has 52 divisions, and the company cross-sells through a client newsletter with about 500,000 recipients.
“The brand just works far beyond what you think it would,” Penman says.
When asked about how he manages such a wide variety of services, he says, “There’s no real difference between mowing and cleaning and dog washing. The basic issue is the same: Follow up on a lead, respond quickly, turn up on time, provide a reasonable quote, and satisfy the customer.”
To Penman, it doesn’t matter what the service is. His goal is getting everyone to do provide consistent, high-quality service.
Still, Penman is always making tweaks to Jim’s Group to constantly improve that service. For example, Jim’s initially offered a flat rate fee system to its franchisees. Over time, Penman learned that franchisees weren’t always following up on leads. In fact, a survey found that 25 percent of client leads never received a follow up. Penman changed the fee system to reflect a lower base fee and a separate charge per lead. After that, the number of leads not being followed up on dropped to just 3 percent.
Penman also made recent changes to the Jim’s Group complaint system. In the pre-franchise days, Penman would see approximately 100 complaints for every 100 leads. After franchising, that number dropped to about five complaints.
However, Penman wasn’t satisfied with 5 percent. To fix the issue, he went to his regional franchisors, who manually receive these complaints. The team decided that every time a complaint comes in, the franchisor would alert Penman and the respective franchisee. Then, the franchisor would call the franchisee to better understand what happened and how to solve it.
Today, Jim’s Group has an automated complaint system. If a franchisee gets six complaints within six months, they receive a warning letter. Another six, and the franchisee has to attend retraining. They’re now down to just 1 percent, and working to cut that at least in half.
In a world full of new ideas, how does Penman stay focused on Jim’s Group? “You might think we do 50 different things, but as a national franchisor, I do one thing: I provide a service. Jim’s Group is a very focused and limited company.”
With almost 4,000 franchisees, it’s even easier to provide global services. Today, the company also benefits from a much more sophisticated software and a wide variety of resources for franchisees.
Beyond Jim’s Group
While Penman continues to expand Jim’s Group, he never forgot his original passion: research. The only difference now is that he can afford to really pursue it.
Until his academic career stalled, Penman never considered becoming wealthy. “I've never been that interested in money,” he laughed. “I'm notoriously stingy. I go around the house and office turning lights off.”
But now he’s able to use the success of his company as a vehicle for funding, so he can dedicate more time and resources into continuing his research on the epigenetics of social behavior. He believes this could help in the treatment of mental illness and addictive disorders.
Valuable Advice to Franchisors
In Penman’s opinion, many people have a misleading idea of business. They think they must have a breakthrough or a big idea to be successful.
“It's not the brilliant ideas,” he said. “It's thousands of little ideas. Every day I say, ‘How can I do this better?’”
Penman encourages anyone who wants to grow to focus on yourself before considering franchising. “If you don't do it well, there’s no point in franchising, because you don't have anything to teach anyone else.”
He encourages entrepreneurs to build a brilliant business, then, master a working model that you constantly change to make better.
Penman also believes in a people-first mindset, instead of money first. He encourages people to ask themselves: What's the long-term interest of the people I'm dealing with? How can I make my customers and franchisees into raving fans?
“Every day, I’m asking myself the same question,” Penman says.
Finally, he recommends keeping in touch with the grassroots. Every single franchisee has Penman’s personal number and email. “I get multiple contacts a day,” he says. “I’m always listening to what's going on. I also read through most complaints.”
After all, it's the thousands of little things that count.
Direct download: FP255_Jim_Penman.mp3
Category:general -- posted at: 2:58am AEST
Thu, 13 June 2019
Success doesn’t happen overnight.
This is something Foundr CEO Nathan Chan knows all too well. Before he started his business, Nathan was in a common predicament: he hated his job and he had no idea what career path to take. It took many steps to plant the seed that eventually became Foundr.
Even then, it wasn’t an easy path forward. He stayed in his job long after starting Foundr, and at one point, Nathan even launched a webinar from his parents’ basement. There was no magic involved—only hard work, strategic decisions, and many lessons learned.
In this video interview, Dave Hobson, our Head of Growth and Marketing and one of the first to join the Foundr team, has a raw conversation with Nathan about his journey to building a global brand. Nathan opens up about what it took to get Foundr off the ground, shares the key takeaways he picked up along the way, and reveals the nitty gritty details around how he turned a webinar presentation he hacked together into a multimillion-dollar product.
This episode is chock-full of sage advice, life lessons, and even an embarrassing story or two from our CEO’s humble beginnings that you’ll definitely want to hear.
Direct download: FP254_Nathan_Chan.mp3
Category:general -- posted at: 3:13am AEST
Tue, 4 June 2019
253: How Refinery29 Defied Critics and Became a Digital Media Pioneer, With Co-Founders Christene Barberich and Piera Gelardi
“I think about how little we knew, but how—I believe—how courageous we were,” says Christene Barberich, reflecting on the early days of Refinery29.
Before she and co-founder Piera Gelardi were the women at the helm of one of the fastest-growing digital media companies in the world, they were new entrepreneurs working tirelessly on a vision (first sketched on a napkin) that outsiders failed to understand.
The Refinery29 founding team formed in 2004, and in those early days (before Twitter had even launched), people struggled to grasp even the concept of digital media. The co-founders’ pitches were met with skepticism.
“We would go talk to people, and they would act like we were trying to sell them a carpet or something,” Gelardi says. “They thought it was a scam.”
Potential advertisers and brand partners also didn’t think customers would ever want to buy something online. “I just remember thinking, like, ‘I don’t think that’s true,’” Barberich says.
That skepticism gave them an advantage, though: It gave Refinery29 the freedom to operate and experiment without the pressure of competition.
Today, Refinery29 has an international audience of 550 million and has earned multiple distinctions, including Webby awards and Inc. 500 list mentions.
Direct download: FP253_Refinery29_PT2.mp3
Category:general -- posted at: 9:18pm AEST
Wed, 29 May 2019
252: The Refinery29 Story—From Bar Napkin Sketch to Media Empire, with Philippe von Borries and Justin Stefano
How four founders turned a sketch on a cocktail napkin into an iconic digital media brand.
One night in 2004, in a bar in New York City, three ambitious entrepreneurs huddled around a cocktail napkin and sketched out a vision.
They essentially wanted to translate the concept of the mall for the internet, only instead of catering to big name brands and retailers, it would connect visitors to all of the amazing independent brands and makers that were flourishing at the time.
That initial sketch—it started as a picture of a virtual mall—has evolved a lot since that night, and the team solidified around four dedicated co-founders. But 15 years later, the dream of Justin Stefano, Philippe von Borries, Christene Barberich, and Piera Gelardi has become a reality, and so much more, in the form of now-iconic digital media company Refinery29.
“One of my biggest regrets to date is that we didn’t save the napkin,” Stefano says.
Since they set out on that journey, the team has created an online space where media targeted toward women is distilled, removing the impurities of stereotypes, taboos, and shame. Initially focused on fashion and style, Refinery29 has since expanded to a staggering breadth of content.
Covering almost every topic imaginable—from skin care to the latest in immigration legislation—Refinery29 is a comprehensive digital media company dedicated to elevating women’s voices. It’s built an international audience of more than 550 million across all its platforms, which include all major social media, a YouTube channel with nearly 2 million subscribers, an award-winning podcast in its fourth season, a short film series, an app, and more.
But Stefano and von Borries, the two who initially had the idea for Refinery29, didn’t come from a background in publishing or fashion. In fact, as you may have noticed, they aren’t even women. But they saw a need, set out to meet it, and connected with the right partners to realize their vision and help it evolve.
In the early 2000s, Stefano and von Borries were just a couple of friends from high school, who had recently graduated from NYU and Columbia, respectively, and were embarking on their first post-grad endeavors.
Von Borries headed off to Washington, D.C., to work for a political startup called The Globalist, and Stefano took a position with the Civilian Complaint Review Board in New York City, where he investigated complaints against the NYPD.
Despite the distance, the duo stayed close, and maintained a group of friends who were mostly in the creative space. They began to notice a frequently recurring topic of conversation among the group: dissatisfaction with media coverage, especially when it came to fashion.
“Most of the media companies that existed, most of the magazine businesses, were fairly mainstream,” Stefano says. “They would write about big designers that bought pages in their magazines. That’s how the model worked.”
Stefano and von Borries found that many of their friends still read these magazines, but not because they felt particularly connected to the content.
“They didn’t think it was good. They didn’t think it was interesting,” Stefano says. “It was just what they were forced to read, because that’s what you could buy at a newsstand.”
Their friends hungered for something with a more independent edge and authenticity, but couldn’t find it anywhere.
So the pair had the spark of an idea: What if they created something that appealed to young New Yorkers by focusing on serving their audience rather than on serving big companies and brands. But with no experience in publishing or fashion, they knew they needed to call in reinforcements.
At the time, Piera Gelardi was dating von Borries (they went on to get married), who worked as the photo director at CITY Magazine. When von Borries shared their idea and asked for her advice, she encouraged him to reach out to her former boss and mentor at CITY, Christene Barberich. Her knowledge of fashion and brands, as well as the world of publishing, would prove invaluable to the pair.
Barberich says that she was already paying close attention to the transformation happening in the media landscape. She noticed that with the rise of the internet, the one-way nature of traditional publications, with outlets talking at their audiences instead of with them, was slowly being set aside in favor of platforms offering more conversational approaches.
So when von Borries and Stefano shared their idea, she had a gut feeling that they were on to something big.
She immediately reached out to Gelardi and told her that she didn’t just want to consult. She wanted to become a partner in the endeavor. Barberich’s infectious excitement for the project then made Gelardi reevaluate her own position as a consultant.
“Because she wanted to sign up, it showed me that bigger vision and also reminded me to think about my own value in the equation,” Gelardi says. “Now we have four co-founders.”
Building the Brand
With the team assembled, the quartet was anxious to get their vision off the ground as quickly as possible.
But all four of them still had day jobs, so much to learn, and very little money to put toward the project. They met in a coffee shop every night after work and on every weekend as they powered toward their goal.
“It just became an obsession until we got it live,” Stefano says.
They called in all kinds of favors with friends who were programmers, engineers, and graphic designers, and built the first iteration of Refinery29 over a period of six months.
“It felt like forever,” Stefano says. “That six-month period, I think it felt years of work went into that.”
But in June 2005, the wait was finally over, and the team celebrated the launch of Refinery29 at a bar called Union Pool over pizza and beers. Looking back at nearly a decade and a half and several waves of changes since, the founders are still proud of the original website they launched that day.
“When you look back at the first iteration of Refinery29, it just really, deeply warms my heart, because I think it’s still beautiful,” Barberich says.
While the website received some fanfare on launch day, growth was a slow, gradual process, and they struggled to be taken seriously, especially by traditional media outlets.
“Most of the traditional publishers saw digital as a phase,” Gelardi says. “It’s so laughable now, but truly we would go talk to people, and they would act like we were trying to sell them a carpet or something. They thought it was a scam.”
Challenges aside, the untested nature of their business model was also a blessing in disguise.
“I think we were able to really pioneer this new space because it was, you know, an open road,” Gelardi says.
Barberich agrees. “When you start out and you really are at the beginning of something, you have so much freedom to just test things,” she says. “I do credit that period—the first two years when we were essentially flying under the radar—as this really important testing ground for us.”
They gradually tried out new content, such as a segment called “Neighborhood Watch,” in which local creatives shared fun activities and events they loved, and “Spotlight,” a section featuring products by homegrown, independent makers.
“The products that we would feature would sell out overnight,” von Borries says. “That was the first time that something we had created had really been validated. So we started to look into commerce.”
In early 2006, they decided to raise capital for the first time to fund a marketplace on their website, and in 2006, it launched, taking Refinery29 into its next phase.
“We didn’t engineer this thing at all to be what it is today,” von Borries says. “In fact, I think the journey for us has been sort of going down the river and hitting different moments of momentum in the business and seeing the world shift.”
And as the world shifted, so did they.
Experiments and Expansions
Before long, von Borries had quit his D.C. job and returned to New York City to work full time for Refinery29, and not long afterward the other three joined the work full time, too.
Stefano says that, over the first five years, they sold ads, hosted live events, held sample sales (retail events that involve selling extra prototypes, often from big names in fashion or design) and did everything they could to drive slow-but-consistent growth that took them to $1.7 million by their fifth year.
They then decided to raise capital to grow their branded content and native advertising. This resulted in a single-year leap to $8.9 million in revenue.
“It was not a fast journey,” Stefano says. “I think that a lot of people have this belief that you’ll launch a business and within, you know, 18 months, you’re going to be on fire, but it often takes far longer. And I would say it took us probably 10 years before we felt like we had a business that was here to stay.”
As von Borries and Stefano toiled away on the technical and management side, Barberich and Gelardi dove into the content and creative aspects of the business.
“Our desire has always been to elevate underrepresented voices, to really bring these new ideas to the surface and challenge sort of what is in the mainstream, and how the media speaks to and about women,” Gelardi says.
While the focus was initially centered on fashion and style, the pair slowly experimented with content expansions that appealed to the women who visited the site. Barberich was interested in topics surrounding health and wellness, so she tested the waters and found the audience receptive. Gelardi noticed that most mainstream editorial content on sex for women was “not focused on women’s pleasure or bodily autonomy,” so she looked to offer something better.
As they grew, they found an almost endless hunger for content on just about every topic imaginable, and with each new addition, a new wave of readers joined the ranks. Soon, stories on politics, finances, and entertainment appeared on the website, continuing to meet the interests of modern women.
They were also able to quickly learn from mistakes and make changes, thanks to the instant feedback provided by comments, shares, and analytics.
“We really were focused on experimentation,” Gelardi says. “We were so invigorated by having access to the knowledge of our audience in real time.”
With the kinds of data that traditional media outlets simply didn’t have at their fingertips yet, they were able to make informed decisions and pursue avenues that seemed utterly foolproof. But, Barberich says, information in this space can be both a blessing and a curse.
“I think in some ways you lose that spontaneity,” she says. “Just having an idea to do something and being able to pursue it and not worry so much about what the outcome was going to be or worry that it was going to hit a certain traffic benchmark.”
So while they take advantage of the analytics available to them, Gelardi says she always wants to leave room for risks.
“I think influence also comes down to risk-taking,” she says. “It’s the art and the science; it’s not just about volume. Quality can be subjective, as well, but I think it is about risk-taking and knowing that core of who you are and staying true to it.”
Barberich and Gelardi say that they see their roles as a balancing act between the numbers and creative spontaneity.
“I think that that’s really what motivates people,” Barberich says. “When they feel like they’re making content that they deeply love, but that’s also touching a person’s life. The greatest success is to know that something struck a chord that is universally felt.”
Scaling With Heart
As the company continued to grow, all four founders felt an overwhelming pressure to keep the train on the tracks.
“I think that a lot of people lose sleep in this company because they care so much,” Barberich says. “In laying that foundation, we want to make sure that people feel really fulfilled by it and it doesn’t lose its path.”
They knew they had to stay true to the heart of their mission and remain in sync with their audience, all while rapidly expanding far beyond what they had imagined possible.
“The audience has been the single most important focus—and staying committed to that audience—and clearly everything that’s happened in the world at large has sort of snowballed our commitment to serving women amazing content,” von Borries says. “Our belief is that, in this moment, to really build a long term, sustainable brand in this space, you really have to mean something to your audience.”
And Barberich believes the key to scaling while staying true to the heart of the business lies in a single, but incredibly vital, part of the business.
“Honestly, if I’ve learned anything in the near-14 years that we’ve been doing this it’s that it all comes down to the people that you hire,” she says, “because scale is all about the people that you’re trusting to handle the scale.”
And she says they have been fortunate at Refinery29 to find and hire people who care deeply about the mission of their brand.
“When you bring people on board that really, automatically love the brand, when things get har, and they will inevitably get hard, it actually helps those people to deal with the issues that arise and recover quickly.”
Gelardi also believes that hiring new staff members who have that entrepreneurial spark inside them helps the brand thrive.
“The industry that we’re in is ever shifting. The work that we do is ever shifting,” Gelardi says. “I think it requires that level of entrepreneurial creativity in order to really be able to roll with things and to find the solutions.”
Establishing a Legacy
Much has changed in the 15 years since the four founders first tossed around the idea for Refinery29. Especially on the internet.
What once felt like a wide open space, now feels more like an overstuffed room pumped full of noise. Because of this, von Borries believes people have begun seeking more intimate, offline experiences, something Refinery29 is working to supply.
“We were always doing events,” he says. “Back 15 years ago when we launched Refinery, we would host local events at stores and boutiques and would bring people together. We’ve always been thinking about the real world, and when you do something in digital, the real world is very validating.”
One such example of Refinery29 IRL is 29Rooms, an art exhibition that features 29 collaborative spaces touching on topics meaningful to readers, such as virtual reality, body positivity and music.
At the end of the day, all four founders are focused on building a legacy they can be proud of.
“You can’t have a media company, I don’t think, without having a really true understanding of what it is you want to leave behind someday,” Barberich says.
And she believes that today’s world, with its renewed focus on social justice, women’s rights, and political activism, is the perfect place for a platform like Refinery29 to thrive. Now more than ever, people are seeing unmet needs, especially in areas of representation and diversity, and feeling driven to meet those needs.
“I think the motivation to start a business is fairly universal,” Barberich says. “You feel that there is something missing. You feel that there is something missing and usually, you’re not the only person.”
She encourages those who feel that tug not to ignore it, but to step out boldly.
“When that happens, you have to really face the facts that this is going to be scary. It’s going to be a ton of work. You’re going to make mistakes. You’re going to need the help of a lot of people, and a lot of times you’re going to need their help for free, and you have to be able to ask for that help, so great relationships really make a difference.”
When looking at Refinery29, that was certainly the case. If one thing made Refinery29 what it is today, it’s relationships.
The relationship built between two high school friends. The relationship between a mentor and her intern. The relationship between a couple that brought them all together. And the relationship between a business and its audience—a two-way exchange of encouragement and authenticity that has amplified the voices of women for 15 years and will continue to do so into the future.
Direct download: FP252_Refinery29.mp3
Category:general -- posted at: 5:42pm AEST
Thu, 23 May 2019
251: How a Humble Typewriter Salesman Started a Software Company Now Worth Billions, With Red Hat Co-Founder Bob Young
The Open Source CEO
Bob Young’s journey from renting typewriters to co-founding an open-source software company to founding a self-publishing platform.
Entrepreneurship carries a lot of prestige these days. But back in the 1970s, when one freshly minted, Canadian college grad decided to start his own business, the only real perk was a business card that read, “Bob Young: President” that he could show to his mom.
This, Young explains, was the single greatest benefit of starting a business back then. It wasn’t about the money, the eager investors, or the thousands of devoted fans (he didn’t have any of those). He just hoped he could reassure his mom that she didn’t have to worry about him anymore.
“We now have the smartest kids in our high schools going to college to study entrepreneurship,” he says. “Whereas, back in my day, all the smart kids went and got ‘real jobs’ as lawyers or accountants or whatever and became CEOs of big corporations, and it was us dumb kids who started businesses because no one would employ us.”
For Young, that meant printing up a fancy business card and, with a little money from friends and family, buying a small, failing typewriter rental business for cheap.
From there, though, things got interesting. Young quickly pivoted from typewriters to computers, until a mid-career stumble led him to the world of open source software, a field in which he thrived. Young has since gone on to found Red Hat, a multinational company that offers non-proprietary software solutions to businesses. In 2018, IBM announced it would acquire Red Hat for around $34 billion.
Today, Young is at the helm of a few businesses, including self-publishing platform Lulu.com, continuing his passion for democratic, open distribution models that favor the little guy. But despite his 40 years in entrepreneurship, he still lists just a single skill under “Specialties” in his LinkedIn bio: typewriter sales.
“I’m a typewriter salesman, and that is the value I bring to the companies that I’m involved with,” Young says. “I’m a sales and marketing guy, and I have to hire smart accountants and smart engineers and smart product managers, because those are skills that I don’t have. My one contribution is in the sales and marketing side of the projects I’m involved in.”
When Success Turns Sour
Young realized almost immediately that his first business had to evolve, and fast. Shortly after he bought the typewriter rental business, he dug through old customer records to find those listed as inactive, and began calling them to try and entice them back into the fold.
One of the businesses that had often rented typewriters from the previous owner was a phone company called Bell Canada. After speaking with the office manager, a sweet woman who invited him to come visit even though, “when you come by all I’m going to do is show you why I don’t need your services anymore,” Young headed off to downtown Toronto to meet with her.
As she walked him through the open-plan office building, he saw several hundred employees, who only four years previously had used rented typewriters, at work in their cubicles. They were all staring into computer screens.
“We then, immediately of course, got into the computer equipment rental business,” Young says, laughing.
He managed Hamilton Rentals from 1979 until he sold it in 1984. He then founded Vernon Computer Source, another equipment rental business, that same year.
In 1992, Young was on cloud nine. He had just sold his second computer rental business to technology services company Greyvest Capital, Inc., mostly for shares in the company, and took a stable, comfortable job there.
Then came NAFTA (the North American Free Trade Agreement), which eliminated tariffs between the United States, Mexico, and Canada. That led to financial troubles for Greyvest, and suddenly Young’s life ceased to be as stable as he’d expected.
“In ’93, I found myself in Westport, CT, unemployed with a net worth of something less than it had been when I graduated college 15 years earlier, only now I had three children, a wife and a big mortgage.”
Just as Young had made his next big step forward in his career, it had all come crashing down around him. But looking back on this time in his life, Young is grateful for this heartbreaking failure, because he links it directly to the birth of Red Hat, Inc.
Trying on a New Hat
Shortly before its demise, Greyvest sent Young to New York to pursue the Unix workstation (a special computer designed specifically for scientific or technical endeavors) market, asking him to get to know the users in the big financial services companies and engineering companies in and around the city. Greyvest was in pursuit of new rental and leasing customers, and this was precisely what Young did best.
To accomplish this, he had been attending evening user group meetings and offering a helping hand. He had even started a modestly sized newsletter.
But when the bankruptcy of Greyvest forced him to walk away from the computer rental business for good, his goals shifted. What if, he wondered, he could transform his newsletter into something more?
As Young explains, the true value of an online newsletter doesn’t lie in the subscriptions. It’s all about the mailing list. Products of value to those particular customers can be marketed and sold using the list. And so, ACC Corp. was born, and through it, Young transformed his mailing list into a catalog filled with programs and software that catered to his audience: the ACC PC Unix and Linux Catalog.
Linux and Unix were two similar but competing operating systems initially released in the early 1970s. The major difference? Linux was free and open sourced. Unix was not.
Through the catalog, he had the greatest success in the sale of Linux-based products, so when he asked his customers to share what else he could add to his catalog, and they directed him to a tiny project filled with potential called Red Hat Linux, he was intrigued. Red Hat Linux promised to be a new and improved version of the Linux Young’s customers already knew and loved, so Young knew he needed to check it out.
Young called the creator, Mark Ewing, who was working out of his spare bedroom and his own bank account, and asked him to send over 300 copies of Red Hat Linux for him to sell through the catalog.
Young questioned Ewing’s hesitation to do business with him. Ewing explained that he had only planned to manufacture 300 copies of Red Hat Linux in total.
Young meshed his big dreaming style with Ewing’s engineering prowess, and the two co-founded the version of Red Hat, Inc. that still thrives today.
He had taken a circuitous route to the software industry, but he was grateful that he finally arrived when he did.
“Whether it was Steve Jobs or Bill Gates, they’re both contemporaries of mine and it’s been fun sort of growing up in the industry watching those guys be successful,” he says. “I was late to the party of success, but I was pleased with Red Hat’s success.”
Young served as the company’s CEO from its founding in 1993 until shortly after the company went public in 1999.
“Once we became a public company, and we had 400 employees, I realized I’d never worked for a company of 400 employees, much less managed one,” he says.
As he faced down the wild host of new rules, regulations, and responsibilities that came with being CEO of a public company, Young recognized that the best thing he could do to ensure the company’s success was to embrace his own weaknesses and step away.
“One of the tricks to being successful is to be self-aware,” Young says. “None of us—no human being—is anywhere close to being perfect. In fact, I’d argue that most of us are barely adequate, even among the most successful of us. But if you know what you’re good at, and you know what you’re not good at, then you can build organizations that protect themselves from your failings.”
Young also recognized an entrepreneurial wanderlust stirring in his heart.
“I’m an early stage startup guy,” he says. “I really, really like the big idea, and I really like selling the big idea, but once I convince people that the big idea is worth pursuing, I lose interest in it and I’m looking for the next big idea.”
He explains that this is an excellent quality when you’re just starting a business and hunting for your great, big idea, but that, once a company is off and running, it can become a serious problem.
“Repetition and precision are things I do not do,” he says with a chuckle. “I never have done. This is why I was such a terrible student as a kid. My mind just doesn’t work that way. My mind works always on the next idea.”
So, he decided to call Matthew Szulik, who would become the next leader of Red Hat, into his office for a chat.
“Probably the biggest single contribution I made to Red Hat’s success was getting out of Matthew’s way and letting him turn our fledgling Red Hat business into the billion-dollar enterprise it is today.”
Although the time had come to bid Red Hat farewell, Young is still incredibly proud of their ongoing success.
“It was this wonderful adventure that worked out astoundingly well,” he says. “We weren’t sure if we could build a business there, but we knew if we could it was going to be a huge business, because open source—sharing your software, sharing binaries with your customers—was simply a better way of building software than the previous proprietary model that all the other software companies were pursuing at the time.
“To have that vision come true has been a bit of an out of body experience, and it gives me great pleasure,” he says.
And just like that, the co-founder of Red Hat was off on a journey to find his next big idea and turn it into a reality.
Open Source Publishing
Today, at just shy of 60 years old, Young owns the Canadian football team the Hamilton Tiger-Cats and serves as CEO of craft marketplace Needlepoint.com and chairman of drone company PrecisionHawk. But the endeavor he says he is currently most passionate about was one he founded in 2002—Lulu.com.
Through this print-on-demand self-publishing and distribution platform, Young wanted to revolutionize the publishing industry. He wanted to serve authors who write on niche subjects and catered to niche audiences. In other words, the ones that would be turned away by the traditional publishing industry, no matter the value the book offered to the market it intended to serve.
“We serve the interests of the author,” he explains. “The publishing industry is set up to serve the interest of the readers, and the author is just a cog in their machine.”
Young has a special passion for creators would otherwise get chewed up by “the machine,” no matter their industry. This is partly why he recommends founders consider platforms like Shopify to sell their products rather than relying on the “FANGs” (Facebook, Amazon, Netflix and Google).
“The consolidation we are seeing on the internet is making early internet pioneers nervous,” Young says, “because the whole point of the Internet was to bring more democracy—to put more control in the hands of the consumer, of the user of the internet—and we are seeing it move away from there.”
When a business owner sets up an Amazon store or a Facebook page to sell from, those customers no longer belong to the business owner. They belong to Amazon or Facebook.
“You want your customers to have loyalty,” he says. “The problem with setting up your shop on Amazon is Amazon is competing with you for the brand and the attention of the customers you’re sending to Amazon, and that’s not in your interest of building a strong brand for your product and your service.”
Young explains that when an author sends their customers to Amazon to buy their book, Amazon immediately begins recommending other titles in that subject to the customer before they have even been able to purchase the title they originally intended to buy.
“Amazon has just absconded with your customer,” he says. “Amazon is happy to have you as a merchant, because they want you to bring all your customers to Amazon so they can sell them other things. Shopify is the exact opposite of that.”
Rather than sending new customers to Facebook.com/YourBusiness, he urges business owners to start sending customers to YourBusiness.com. He also encourages founders to “pay attention to the principles behind the internet, not just the buttons that Facebook and Google give you.”
“The internet itself is this great, open vista, and if you build your market using the foundational elements of the internet, no one can ever take that away from you.”
He’s hopeful that the rising generation of founders and business owners will be savvy enough to navigate these stormy seas.
“As this next generation of entrepreneurs get going, they’re going to understand…you’ve got to be really careful about surrendering your customer to your supplier,” he says. “You want to find suppliers who are going to partner with you to build your business, not using you to build their business.”
Whether in the computer rental space, the arena of open source coding or his current realm of self-publishing, Young has always lived by the principal of democratizing access to the tools that build success.
Through collaboration and inviting more voices to the table, advancements come more swiftly, and this is a principal that even Young, a self-proclaimed “dumb kid” who started out selling typewriters, can embrace.
Bob Young’s Tips on Cultivating Self-Awareness
Bob Young says that he owes much of his success to self-awareness. By leaning into what he is good at and hiring others to cover areas where he struggles, this self-proclaimed typewriter salesman has found remarkable success. Young insists that even those who struggle with self-awareness can develop it, and these are three of his tips for harnessing that growth:
1. Put the Pride Aside
“So many of us are prideful,” Young says. “We worry about being criticized.”
But as founders, and as humans, there is always room for growth. Rejecting that evolution in favor of belief in our own mythology only prevents us from reaching our greatest potential. Young says that, in order to achieve any increased level of self-awareness, pride first has to be eliminated from the equation.
2. Listen to Critiques More Than Compliments
Once pride is silenced, it’s time to let the criticisms reach our eyes and ears, even though it may sting a little.
“We worry that people think we’ve made a mistake or that we’ve done something dumb,” Young says. “If you can flip that around and look at your mistakes as your biggest single learning opportunity that day or that week or that year, now when people criticize you, they’re more valuable to you than the people who compliment you.”
Choosing to embrace our own failings today, no matter who brings them to our attention, is the only way to make sure those same failures don’t repeat tomorrow.
3. Be Honest With Yourself
Young is comfortable with sharing the skills he lacks, especially in the area of customer support. He explains that, although he loves his customers, he cannot find the patience to help a new customer struggle through a problem he’s solved for 600 customers who came before.
He says that it took many years, and many, many customers pointing out this flaw, for him to internalize the criticism, but once he did, and once he genuinely considered the critique, he recognized that he and his customers would be better served if left that work to someone else. He says his brain simply isn’t wired for customer service, so he relies on those around him who are.
To maximize self-awareness, Young says we should accept what we are great at, grow where we are able, and rely on the talents of others to support us where we perpetually fall short.
Direct download: FP251_Bob_Young.mp3
Category:general -- posted at: 6:36pm AEST
Fri, 17 May 2019
250: How Dollar Shave Club Used Mission, Humor, and Viral Videos to Lead Up to a $1B Acquisition, With Michael Dubin
A viral video put Dollar Shave Club on the map, but it took a team to get it where it is today. CEO Michael Dubin talks about DSC’s growth, acquisition, and expanding product line.
It was the commercial seen round the internet. On March 6, 2012, Dollar Shave Club uploaded its first YouTube video, featuring one-and-a-half minutes of offbeat humor, during which founder Michael Dubin rides in a kid’s wagon, wields a machete, and encounters, among many other things, a person in a bear suit.
“Do you think your razor needs a vibrating handle, a flashlight, a back scratcher, and 10 blades?” Dubin deadpans while riding a forklift. “Your handsome-ass grandfather had one blade—and polio.”
It was a totally unique way to explain a simple concept: For an affordable fee, Dollar Shave Club subscribers would get quality razor blades delivered to their doorsteps on a regular basis, thus skipping the trips to the store for overpriced, gimmicky alternatives. And people loved it—the resulting traffic from the video’s launch crashed their site.
Since then, that commercial has been viewed over 26 million times on YouTube. It cost only $4,500 to produce, yet it launched the company on a trajectory that would later lead to a $1 billion acquisition by Unilever.
“It put us on the map, no doubt,” Dubin says. “We wouldn't be where we are without it.”
But this isn’t a story about Michael Dubin and his famous viral video. It’s not even a story about razor blades. As Dubin is quick to point out, getting DSC to where it is today required a team effort. And with its ever-expanding product line, today, the company is about so much more than a good shave.
Timing Is Everything—In Comedy and Business
They say the most important thing in comedy is timing; the difference between roaring laughter and painful silence can be a fraction of a second.
Maybe this was something Dubin learned during the eight years he spent training at New York City’s Upright Citizens Brigade, an improv theatre with notable alumni such as Saturday Night Live’s Horatio Sanz and Amy Poehler. While taking improv classes, Dubin worked various media jobs, starting as a page at NBC, then moving into production and news writing at MSNBC, and eventually, getting into digital marketing at SportsIllustrated.com.
But it wasn’t just Dubin’s punchline delivery that set DSC up for success out of the gate. Even the timing of its launch was strategic. As Dubin told NPR’s Guy Raz in a “How I Built This” interview, he chose that specific date—March 6—because, with his media background, he knew that news outlets would be hungry for a tech story leading up to the annual South by Southwest conference that takes place in Austin in mid-March. The launch date also coincided with Dollar Shave Club’s announcement of its $1 million seed round.
It Takes a Team
A viral video can be a major boost for any company, but it’s far from the secret to a successful business. For that, you need great people, and assembling them is easier said than done.
“Big business is a team sport,” Dubin says, “and it requires talent from all corners of the universe that will help you build what you're looking to build.”
Knowing where to find your future teammates can be a challenge.
“Finding great talent is always going to be the hardest thing that any entrepreneur does,” Dubin says. “Because, ultimately, there's somebody out there in the marketplace that can help you do your job really well and help you build your company the best way possible. But you've got to go out and find them in the great wide world.”
That’s why Dubin is a fan of recruiters, “because recruiters are paid to have knowledge of the network that you're looking in.”
When building his team early on, Dubin had just moved from New York to Los Angeles and lacked a network in his new city, so he relied on his early investors to make introductions. “That's a great reason to take investment—besides, obviously, needing to take it to drive growth and invest where you need to.”
To attract the right talent, Dubin recommends founders do two things. First, focus on your company’s mission. What are you trying to achieve? What gaps in the market are you trying to fill? Why do you come to work every day?
“Really talented people want to work for companies that have purpose,” he says. “And that's defined in the mission of the company.”
Second, consider granting employees equity. “People want to feel like they're participants in the success—if you ultimately do have the success—and that's super meaningful.”
And if your mission changes, that’s okay. It’s natural for it to evolve as your company grows; that’s certainly true for Dollar Shave Club. “It started out more as a shave-only proposition,” Dubin says. “And then it grew out into becoming…more of a men's health, more of a men's grooming platform.”
What’s their mission today? “Help guys take care of their minds and bodies so they can be their best selves.”
Growth, Acquisition, and Expansion
Taking on the shaving industry was a gutsy move. To put that into perspective, it was around the year 1900 that King C. Gillette invented the world’s first disposable razor, according to Gillette’s website. So when Dubin decided to disrupt the shaving market, he was going up against a company that had already been in it for over 100 years.
Eight months after the launch of its first commercial, Dollar Shave Club secured a Series A round of $9.8 million. And two years after that, the subscription razor blade company hit 1 million members.
In July 2016, Unilever acquired Dollar Shave Club for a reported $1 billion. At the time, DSC had 3.2 million members and was expected to exceed $200 million in turnover (which is sometimes defined as net sales and sometimes defined as revenue) that year. Dubin stayed on as CEO and continues to serve in that capacity today.
“Unilever's been very good to let us run the company our way,” he says, “and that was part of the design.”
Today, Dollar Shave Club boasts over 300 employees and continues to expand its product line and global footprint. Beyond razors, DSC now sells cologne, body wash, shampoo—even flushable toilet wipes (they’re called One Wipe Charlies). It also has sites live in Australia, Canada, and the UK, with plans to expand further in the next couple of years.
Knowing When It’s Time to Add a New Product
For a long time, razor blade subscriptions were Dollar Shave Club’s bread and butter, and it gained a loyal following with its single product line. But growth almost always means product expansion, so how can a founder know when it’s the right time to add new products?
“You have to stay true to your core,” Dubin says. “You have to develop credibility in your core categories before you can expand outward. There is such a thing as doing that too fast.”
Timing matters. Move too fast, and you could confuse your customers and dilute your brand. Too slow, and you may miss your opportunity to take the market.
As for figuring out what your next product should be: ”You should definitely do your research. It's always a blend of gut and research.”
Time Well Spent
These days, Dubin doesn’t star in any viral videos, but he told Foundr about a recent, albeit lesser-known, YouTube video of his commencement address to the 2018 graduating class of his alma mater, Emory University. In it, he sums up the lessons he’s learned over the years, including one about “little choices.”
“They're the ones you make more frequently, maybe even every day,” he says to the graduates, “the ripple effects of which, I believe, actually have a bigger impact over the course of your life. They’re choices about where to invest your time.”
Given Dollar Shave Club’s meteoric success, it’s safe to say that Dubin and his team’s time has been well spent.
5 Entrepreneurial Lessons from Michael Dubin
Dollar Shave Club is a massively popular company that attracted a billion-dollar acquisition. What are some parting lessons we can take from this interview with CEO Michael Dubin?
Direct download: FP250_Michael_Dubin.mp3
Category:general -- posted at: 12:18am AEST
Wed, 8 May 2019
Raise your hand if you’ve experienced the all-too-common dilemma of wanting to read new books but instead falling slave to long hours and mindless digital content consumption. (I’m raising mine right now.)
Self-education takes time, and time is often the one asset we don’t have nearly enough of.
Well, Niklas Jansen found a way to give his customers more time. “Some of my friends and I didn't have time to read books, and we were working full time. We also noticed more people consuming content on their mobile phones,” he says. “We wondered, ‘Is there a smarter way to combine these two things?’”
This was the very question that Niklas Jansen and three of his friends addressed as they formulated the idea for Blinkist, a mobile app subscription that provides 15-minute insights from the bestselling books we all wish we had the time to read.
Today, Jansen and his team of 130 are bringing ideas from the best nonfiction books to some of the busiest people on the planet. Blinkist is paving a new path for modern content consumption and self-education, and they’re doing it in a remarkable way.
Jansen has been an entrepreneur since he was in college. He did consulting for a couple of years, but once the idea for Blinkist hit him, he dove right in and founded one of the most unique startups in Berlin. That was seven years ago.
As Jansen and his three co-founders developed the company, they each managed different parts of the business: content, product, operations, and marketing. (Jansen owned the product side.) The team tried to stay lean from day one, a decision they’re happy about today because, as they scaled Blinkist, they didn’t become distracted by a large team.
“We had to figure out so much every day,” Jansen says. Keeping the team small allowed Jansen and his co-founders to hustle every day, soaking in new knowledge by trying new things, reading voraciously, and talking to others. This process was especially important for Jansen, as he had no experience with product management prior to Blinkist.
Despite initial obstacles, it only took a couple of months to build the first version of the Blinkist product. To keep the development process simple, Jansen and his co-founders decided they only needed three things to get started: a mobile application, 50 nonfiction books to populate the app, and a marketing plan. “After five months, we were ready to launch,” Jansen says. “We were incredibly productive in that time.”
As the Blinkist team did their competitive research, they found that there was only one similar product on the market, but since it served a different audience and used a different business model, they weren’t worried. “We designed our content for mobile from day one in order to be different,” Jansen says.
Blinkist closed their launch day with five customers, “after our parents, of course,” Jansen says, laughing. To promote the launch of their product, the Blinkist team published a variety of articles in startup magazines and relevant websites. Jansen had high expectations for launch day. “I thought everything was going to explode,” he says.
The number of initial Blinkist customers was fewer than Jansen expected, but he still enjoyed watching people discover and purchase the product. “It felt good to watch it grow.”
And grow it did. Blinkist is now a worldwide product with major markets in the US, Canada, Australia, Great Britain, and Germany.
The leap from five customers to more than five global markets wasn’t an easy one. It took years of trial and error, but Jansen and his team eventually scaled Blinkist to a successful, profitable level.
With unique approaches to fundraising, marketing, and team management, Jansen has lots of valuable insights to share with aspiring founders.
As they built the company, Jansen and his team raised about $35 million from investors in the US, Germany, and other parts of Europe. They raised their first $300,000 as early stage, pre-seed money. If he could, Jansen isn’t sure that he’d do that part again.
“We felt a pressure to use it without having figured out a lot of things,” he says. He also suggests other founders be careful about taking on too much money too early. “Investors have expectations, and building a company takes time. Mistakes can be more costly if you have too much money in the bank.”
Of course, money can be helpful, but with too much, it can be tempting to spread your business too thin, too early. “If you can do one thing really, really well, that can be your superpower,” Jansen says.
Working from a small budget can also help you focus.
Jansen boils Blinkist’s marketing strategy down to one word: Sustainability. “It’s important that whatever you do in marketing to grow your company is repeatable,” he says.
For example, Jansen wouldn’t consider PR a sustainable growth channel. It might work a few times, but after one or two days, PR stops being effective. “Marketing needs to be able to be repeated and sustainable,” he explains. “You don't want to burn money for customers.”
As for Facebook and other social advertising, Jansen and his team know precisely how to target their customers and how much they’re going to spend on acquisition. Through different campaigns focusing on different creative elements, his team was able to conduct A/B testing and determine what the best parameters were.
They now apply those parameters to replicate successful campaigns. “It involves lots of mechanics and details, but once you find something that works, you can scale it,” Jansen says. “That's why we call it a ‘marketing machine.’ We automate as much as possible.”
Recently, Blinkist has started investing in TV advertising—a completely new channel for the company. “It’s very different from the others, but it’s exciting because now we’re part of mass marketing and mainstream media,” he says.
Additionally, Jansen and his team rely heavily on word-of-mouth marketing and customer stories to grow the Blinkist brand. “It’s a very shareable product,” he says. “People share stories about how they use Blinkist and how it improved their lives.” The team also polls customers and uses the feedback they receive to further improve the mobile app.
With such a robust strategy, one must wonder how the Blinkist team manages so many marketing channels. Contrary to what you might think, the team doesn’t outsource any of its marketing strategy or creative work.
Blinkist keeps everything in house, which is helpful for making lots of updates and changes to a campaign or strategy. “We want full control of the whole customer experience and what customers see from Blinkist,” Jansen says.
What started with the Blinkist co-founders testing various ads has turned into a team of six to seven tech marketing experts. Today, they manage their marketing by channel: Two managers for paid social (such as Facebook and Instagram), one for paid content (such as Outbrain), one for AdWords and Google, one for podcast and influencers, and one for TV.
The team also retains a creative team in house, including videographers, designers, copywriters. These folks work with the Blinkist channel managers, who develop audiences and strategies. These managers, in turn, go to the creatives for the right vision or creative assets.
A single, in-house creative team can be tough to share across an organization, but Jansen believes Blinkist has established a good model for dividing resources. “Some designers work directly with marketing. Video and copy are shared with other teams, but they do prioritize marketing needs.”
At Blinkist, this model works because the marketing sees faster duration cycles than the product teams do. Marketing has daily cycles of content production, whereas product managers deal with longer cycles of design-build-test-repeat.
The entire Blinkist team still resides in Berlin. “We haven't expanded offices yet,” Jansen says. “So far, we’ve established a global business, but we work out entirely out of Berlin.”
While Jansen doesn’t plan on expanding the Blinkist team outside the Berlin office, he is excited for the international growth of the Blinkist product. The team is currently pushing into brand new markets and eventually wants to expand to be a truly global brand.
They’re also making changes to how they select and source the content available on the Blinkist app, by selecting local curation from different markets. “We want to find what's popular in each market and be very local when selecting and curating content,” Jansen says.
He’s also aspiring to build out more original content under the Blinkist brand. Right now, the product is mainly focused on third-party books and authors, but there’s a potential to create a learning space and provide new content formats.
At the moment, Blinkist is a curation tool, but Jansen can see the product creating original content, not unlike what Netflix has done. “We know what users like and their behaviors and favorite topics,” he said. “We can use that data to make original content that our customers love.”
Above all, Jansen encourages other founders to stay on top of what’s happening. “Learn as much as you can,” he says, “whether through books or podcasts or Blinkist!”
Direct download: FP249_Niklas_Jansen.mp3
Category:general -- posted at: 12:15am AEST
Thu, 2 May 2019
The Sky’s the Limit
Space enthusiast, doctor, and serial entrepreneur Peter Diamandis on abundance, exponential technologies, and why the world is better than you think.
Ever since he was a child, Peter Diamandis has been looking up, literally and figuratively.
Captivated by the lunar landing in 1969, he’s spent much of his life pushing the boundaries of space exploration through his various companies. And as a proponent of the concepts of exponential technologies and abundance, he has a refreshingly optimistic outlook on the future.
“I believe that we're heading towards a world where we can uplift every man, woman, and child on this planet,” he says.
And as the founder of more than 20 companies in the fields of longevity, space, venture capital, and education—perhaps most famously the XPRIZE—Diamandis is doing his best to advance the world he envisions.
“I’ve always followed my passion,” he says. “And at the end of the day, that’s really the world that I feel extraordinarily lucky to live in, one where I am doing what I want to do.”
Exploring Medicine and Space
Born in New York to Greek immigrant parents who both worked in medicine, Diamandis felt obligated to become a doctor just like his father. But as a child of the 1960s who was fascinated with the Apollo program, he also felt compelled to explore space. So, he did both.
After getting accepted into Harvard Medical School, Diamandis co-founded the International Space University, which today has graduated more than 4,600 students from over 105 countries, and started International Microspace, a rocket company that was later acquired by CTA Incorporated.
Even after he obtained his medical degree, instead of practicing medicine, Diamandis continued building businesses, many in the area of space. He founded XPRIZE, a global contest whose winners include a team that developed the first non-governmental manned spacecraft; and Zero-G, which has helped people like Stephen Hawking, Buzz Aldrin, and Martha Stewart experience weightlessness in a modified Boeing 727 that performs aerobatic maneuvers at 32,000 feet (if you fancy a ride, the Zero-G Experience starts at $5,400 per person).
While Diamandis has worked hard to get here, he’s having a lot of fun too. “I've always been a 9-year-old kid pursuing my dreams,” he says.
Turning Science Fiction Into Fact
Looking at Diamandis’ long list of companies is a bit like reading synopses of science fiction novels. Space Adventures sends private citizens to the International Space Station to live and work alongside astronauts. Human Longevity seeks to extend the human lifespan through genomic and phenotypic data. And XPRIZE hosts multimillion-dollar global competitions to solve humanity’s most challenging problems.
There are some truly out-of-this-world inventions that have emerged from XPRIZE competitions that are worth noting here. To make space travel possible for private citizens, Mojave Aerospace Ventures designed a privately financed manned spaceship with technology that was licensed by Richard Branson for Virgin Galactic. To provide clean water to the underprivileged, the Skysource/Skywater Alliance invented an energy-efficient device that gleans water from thin air. To make healthcare more accessible, Team DMI created a device that can run hundreds of lab tests on one drop of blood, alerting the user within minutes if they have a cold, the flu, or even Ebola.
Diamandis says that XPRIZE helps address just one of his many passions: “How do I empower entrepreneurs to really go big and change the world?”
On Emerging Technologies and Abundance
Watch the evening news or read the newspaper, and the world seems pretty bleak. But Diamandis believes we have good reason to be hopeful. One of his most popular contributions is his concept of abundance, which he’s given a TED talk and written a book about. It’s the idea that technology is transforming scarce resources into abundant ones, quickly closing the gap between the haves and the have-nots.
Google, for example, has given the general public access to a storehouse of knowledge that history’s greatest philosophers, mathematicians, and scientists could never have imagined.
Further, exponential technologies—such as artificial intelligence, 3D printing, and virtual reality—have made it easier than ever to produce solutions at scale, solutions that, previously, only governments and massive corporations were capable of producing.
“Energy is a perfect example,” Diamandis says. Humans went from killing whales to get oil for lamps, to mining mountains for coal, to drilling the ocean floor for oil. Meanwhile, the sun bathes the earth in more energy than we could use in a year. An exponential entrepreneur, therefore, would find a way to use technology to efficiently harness the sun’s energy and distribute it to the masses.
Through the lens of abundance, Diamandis sees an opportunity for entrepreneurs to change the world, so much so that he created an exclusive community, Abundance Digital, that aims to do just that. He hosts monthly webinars and provides courses to inspire its roughly 3,000 members to think bigger, teaching them that “the world's biggest problems are the world's biggest business opportunities.”
Because of exponential technologies, Diamandis envisions a future where AI makes education and healthcare effectively free and available to all, where self-driving electric cars make using a car service cheaper than owning a vehicle—a future where nothing is truly scarce.
Finding Your Massively Transformative Purpose
Though Diamandis keeps his eyes to the sky, that doesn’t mean he has his head in the clouds. He acknowledges that every new venture carries the potential for failure.
When asked if he ever has doubts when starting a new business, he says, “Of course, I mean, I'm not insane. But it doesn't slow me down.” That’s because, though he recognizes entrepreneurship’s inherent difficulties, he draws strength from his unshakeable sense of purpose.
Diamandis recommends beginning every entrepreneurial journey with determining your “Massively Transformative Purpose,” or MTP. This is what keeps you going when the going gets tough; it’s the thing that, even if you do not succeed, grants you the satisfaction of knowing that your time was spent improving humanity.
“People have to understand why they're building their business,” he says. “If you're just trying to build a business to make money, I view that as sort of an empty pursuit, and when it gets hard, you don't have the emotional energy to push through and succeed.”
So what are Diamandis’ MTPs? He has a few: opening up space exploration to more people, extending the healthy human lifespan, and inspiring entrepreneurs to solve the world’s biggest problems. For an advanced entrepreneur, having three MTPs is fine, but Diamandis recommends beginners start with just one.
On Hiring a Team and Finding a Co-Founder
Behind every great entrepreneur is a great team, and Diamandis is no exception. He has a roughly 12-person “strike force” that works with him across all of his ventures. Each team member has been carefully selected.
“I don't suffer assholes or fools,” says Diamandis, whose rigorous hiring process is proof of that. To fill a position, he’ll sometimes run a global contest. The winners advance to a 60- or 90-day trial period, after which, the entire team has to vote them in, meaning there must be 100 percent acceptance.
“One person who's out of whack can send the whole thing careening,” he explains. “So it's really important that we operate as a team.”
While he uses the Kolbe test, which assesses conative skills, Diamandis doesn’t rely heavily on testing to make his choices, preferring to use the team interview process as a major determiner.
Ultimately, though, his hiring decisions boil down to one simple metric: He needs to genuinely like the candidate.
“If when we're in the meeting and that person is talking, if I'm, in the back of my mind, saying, ‘I wish this guy would shut up,’ that's not a good situation. On the other hand, if we're in a meeting and I'm saying, ‘Listen, I haven't heard from you. I really want to hear your thoughts,’ that's a good situation. So I need to respect them and want to hear what they have to say.”
Those same likeability and respect factors go into his selecting a co-founder or CEO. For every company Diamandis has started, he picked a co-founder or two to help him get it off the ground. Now that he has more than 20 companies, for some of them, he may step back and serve as founder and chairman and then either promote a co-founder to CEO or hire one to run the company.
Not one to rest on his laurels, Diamandis has his hands on many projects, including a new book he’s working on with Tony Robbins. “I'm doing a lot,” he admits, “but it's all driven by passion.”
As for work-life balance, for him, it doesn’t exist. “It's more about work-life integration,” he explains. “I am ‘on’ 24/7. I have two 7-year-old boys; I do my best to prioritize them, but there have been…too many days away, and so there is, for sure, the trade of time.”
That trade-off is a familiar one for any entrepreneur trying to make a difference, big or small. “I know some of the more successful Silicon Valley gazillionaires,” says Diamandis, “and it's brutal sometimes. But at the end of the day, it's living a life of meaning and a life of where you get to choose how you spend your time and the dent you want to leave on this planet.”
4 Lessons Every Visionary Founder Can Learn From Peter Diamandis
It’s one thing to want to build a lifestyle business, one whose sole purpose is to make enough money to support the way you live, but it’s quite another to want to build a business that changes the world. If you fall in the latter camp, here’s what you can take away from our talk with Peter Diamandis:
Be true to yourself.
“The most important thing you need to do as a founder of a company is know that you love what you're doing, and you're not doing it for your parents, for your friends, for your teacher, out of obligation. … You’re doing it because it is what you love doing.”
Know your MTP.
“What's your massively transformative purpose? What is it that keeps you going? Who do you want to be a hero to?”
“I teach that the world's biggest problems are the world's biggest business opportunities. If you want to become a billionaire, help a billion people.”
Harness exponential technologies to help people at scale.
“As an entrepreneur, you can choose to work hard 40 hours a week…and impact a hundred people, or you can work those same hours and impact a million people. It's your choice. The tools we have to impact the world are extraordinary.”
Direct download: FP248_Peter_Diamandis.mp3
Category:general -- posted at: 8:27pm AEST
Wed, 24 April 2019
The Power of Focus
How Jake McKeon of Coconut Bowls stopped chasing new ideas, and scaled a business and community that he’s passionate about.
Jake McKeon considers himself an idea man, and that’s not always been a good thing.
For years, he lept from one idea to another, always enchanted by a shiny new business possibility. With a thumb on the pulse of social trends and a knack for testing new business ideas, McKeon always had two or three ventures going at the same time.
It’s common for new entrepreneurs to begin their journeys by following their ideas, imaginations, and curiosities. But McKeon was taking that to the extreme, and eventually found himself a little scattered. He needed to find a way to center himself, and ultimately that meant being grounded in his personal passions.
Through some tough experiences and hard lessons, McKeon learned to mute the part of himself that saw potential in every new idea. Instead, he turned up the volume on the interests he personally cared about the most, and let that guide him to his sole venture today—Coconut Bowls.
The name may sound a little funny when you put it in such a serious context. But today, Coconut Bowls is a thriving business with a charitable initiative that supports rural coconut farmers and local artisans in Vietnam and Indonesia. In the process, the company is providing people with ethical and healthy livelihoods and reducing environmental waste. Here’s how McKeon is proving that having a heart is good for business.
The Creation of Coconut Bowls
McKeon had already experienced a few failed startups by the time he finally connected with Coconut Bowls, but when this one took shape, it was an entirely different story.
“Coconut Bowls has been the most natural of all my businesses,” McKeon says. “The product fell into my lap.” McKeon was walking through a market in Bali and came across some handcrafted coconut products. He was running a health and superfood business at the time and thought that his customers would love this simple concept—bowls made from coconuts.
So, he had a bunch of bowls made, filled his suitcase, and started selling them online back home in Australia. He found that—on his shoestring budget—it was actually cheaper to fly back and forth to Bali with empty suitcases than to ship the product.
McKeon ended up making a few more trips, each time bringing more and more luggage. On one trip, he brought along a couple friends and a load of empty surfboard bags. “We didn’t have any surfboard equipment, just coconut bowls. So coming back through customs was ridiculous, but they let us through, thankfully,” McKeon says.
It wasn’t long after that trip when Coconut Bowls started to see sales and momentum build (and made the switch to sea freight).
But what originally brought McKeon to Bali, and to that fated market that brought him face-to-face with his most profitable business venture yet?
It was a thirst for travel and healthy food—and failure.
To understand McKeon’s story, let’s back up to the very first business he started, six years prior, Moodswing. Moodswing was a social networking app for sharing emotions. “I wanted to create a safe platform for peer-to-peer emotional support, for people to speak openly and honestly,” McKeon says.
With no experience in business or tech, McKeon came up with the idea for Moodswing, and simply assumed people would want it. Following that assumption, he went on to spent all $40,000 of his savings—money he’d originally intended to use to travel.
“Moodswing was my most outlandish business concept,” he recalls. “I was very naive at how hard the process was going to be.”
McKeon hooked up with a co-founder and developed the app idea. On top of his savings, he raised another $20,000 from family and friends, increasing his overall funding to $60,000. He also put significant efforts toward marketing it and growing his user base.
His growth hacking worked. In 10 weeks, Moodswing had reached a user base of 100,000 people, faster than either Instagram or Facebook had experienced early on.
Moodswing’s significant and immediate growth only fueled McKeon’s naiveté. “I thought I was the next Mark Zuckerberg.”
He flew to the States and met with a few investors, namely Snapchat investor Jeremy Liu. During McKeon’s pitch, Liu promptly asked about his app retention metrics, and McKeon was stumped. “I thought, ‘What are ?’” he says, laughing.
It turned out that only 10 percent of those who downloaded Moodswing returned, which reflected poorly on the user experience of the app. McKeon returned to Australia, humbled.
With only $20,000 left in the bank—not enough to improve on the app—he decided to pitch to an accelerator. They agreed to invest $25,000 in exchange for 10 percent of the business, but only if those friends and family who invested were no longer involved.
“So I used the remaining $20,000 to pay back our friends and family members who’d invested,” McKeon says. “I didn’t want them to lose out, and it was good, because I’d never do business like that with friends and family again. I learned that lesson and got out scot-free.”
McKeon and his team spent three intensive months creating a beautiful new app for Moodswing, then returned to the US to raise more money. “At this stage, Moodswing had a 60 percent retention rate, which was really good. Forty percent of users returned seven days later, and 30 percent returned 30 days later,” McKeon says.
Investors essentially told McKeon that if Moodswing could get to 10,000 daily users, they’d be able to raise whatever they wanted. But the app only ever got up to 8,000 weekly active users.
It was the end of the road for McKeon and Moodswing. “We just couldn't get there. We didn't have any more money,” he says. The business also started to lose McKeon’s attention. His co-founder’s, too.
With Moodswing in his rearview mirror, McKeon switched gears and started an organic superfood business called SupermixME. This time he took a more traditional route, ordering a batch of products for $5,000 on his credit card, packaging them at home, selling them, and buying another batch. But things were moving too slow for him.
So he took a step back and asked himself, “What am I good at?” He realized that, although Moodswing didn’t work out, he’d gained valuable insight into the world of social media marketing. He used that experience to start an agency, 7 Star Social, and quickly landed a few profitable clients.
At that point, McKeon was ready to take a break. “I decided I was going to travel for six months and work online,” he says. “I didn't want to focus on growing anything.”
His travels brought him to Central America, Europe, and—you guessed it—Bali. When McKeon returned, armed with a suitcase filled with coconut bowls, he started to scale his social media agency. At its peak, 7 Star Social was servicing more than 35 clients, each paying between $500 and $2,000 per month.
And in the background, Coconut Bowls was growing slowly. Eventually, McKeon decided he didn’t want to work for other people anymore, so he turned his sole focus to Coconut Bowls.
A Few Valuable Lessons
McKeon walked away from his experiences with Moodswing, SupermixME, and 7 Star Social with much more than the idea for Coconut Bowls. “I look at my journey like an apprenticeship,” he says, one that gave him a crash course in failure and success.
McKeon’s first major lesson from that time was around building a minimum viable product—a process he failed to follow when launching Moodswing. “It’s all about finding product-market fit before doing anything,” McKeon says.
That can be a hard thing to define, exactly, but when you’ve got it, people will start buying and enjoying your product organically. “It shouldn’t feel like a hard sell,” he says.
McKeon thought he had a good idea and spent all of his money without testing whether it was something people wanted. Looking back, he realized that he could've created a simple website or Facebook group and asked for feedback. “There are so many ways to test . It’s cheap to do and saves time and money in the long run,” McKeon says.
The second major lesson he learned was to avoid doing things too fast. “Take your time. Don't expect immediate success.”
With Moodswing, McKeon spent all his time getting those 100,000 users as fast as he could, but in reality, he says that businesses shouldn’t want to achieve that level of growth until they’re happy with their product.
“When our users tried , didn’t like it, and deleted it, they weren’t going to give us a second chance,” McKeon says. “Focus on product first, make sure people like it, then look to marketing.”
The Power of Focus and Community
McKeon’s biggest takeaway, though, was about focus. He had always given more attention to new ideas than the things he was most passionate about, despite the advice he’d heard countless times from others.
McKeon found that with every new business, there was always a new, more exciting idea that held more potential—hence his quick transition between Moodswing, SupermixME, and 7 Star Social. But he doesn’t recommend the same for other entrepreneurs.
In his opinion, when you focus on just one business, you learn more about the product and industry, and you invest more time into talking to your customers. Over time, McKeon has found that this only strengthens your passion, or develops a new one.
When it comes to Coconut Bowls, for example, McKeon has always been passionate about health, and has since become passionate about running a socially responsible business. “While I’ve always been mindful and conscious of sustainability, it’s never been a passion. But it’s been developed since I’ve fed off excitement and passion of our community.”
McKeon has derived valuable learnings from his community since creating Coconut Bowls three years ago, none more so than from a live strategy session with Quest Nutrition co-founder Tom Bilyeu.
The duo conducted the session on a live Foundr podcast, and McKeon walked away with some valuable lessons. “We were one year into Coconut Bowls and had some epic growth,” he recalls. “But we were chasing our tails. We didn't have a long-term strategy, a community strategy, or a brand strategy.
As an avid supporter of building community, Bilyeu helped McKeon learn the value of “supporting the people who support you.” That conversation helped shape the Coconut Bowls business and influenced a lot of McKeon’s current marketing and growth strategies.
One of his biggest marketing wins with Coconut Bowls has been building a customer base that markets for them. Through social media engagement, a thank-you card and follow-up email, McKeon and his team encourage customers to share on social media what they made in their bowl.
“We started with this strategy and are still using this call-to-action today,” McKeon says. “We’re very lucky that our customers do our marketing for us, and it’s basically been the driver for our growth.”
Another successful tactic has been creating something to do with the Coconut Bowls community. Along with his customers and other content creators, McKeon and his team came together to create a cookbook, Vegan Bowls for Vegan Souls. It’s had tens of thousands of sales to date.
“We’ve had feedback from customers saying that it’s changed their lives,” McKeon said. “It’s not just a cookbook; it’s also built around having fun in the kitchen and being mindful about where your food comes from.”
Eventually, McKeon sees the Coconut Bowls brand expanding, which will allow him to expand the product line and its “made-by-nature” concept.
But McKeon and his team don’t only see Coconut Bowls as a brand—they view their business as a community and a collective of people who are all passionate about health, nature, and sustainability. “We share recipes with each other. We share inspiration and experiences,” McKeon says. “It really brings people together. … It almost comes back to the root of Moodswing—people who support each other.”
Direct download: FP247_Jake_McKeon.mp3
Category:general -- posted at: 6:54pm AEST
Thu, 18 April 2019
Matthew was a guest of StartCon, Australia’s largest startup and growth conference. It was held at Randwick Racecourse in Sydney on Nov. 30 and Dec. 1.
When he was young, Matthew Brimer spent his days taking apart old electronics and dreaming of space exploration. A child of the Midwest, he was raised on the belief that hard work and passion could turn even the grandest dreams into realities.
As he grew older, he continued to hold tightly to this conviction, and, with the blood of two entrepreneurial parents pumping through his veins, Brimer knew he wouldn’t be stuck in his high school job selling ice cream forever.
Always that tinkering kid at heart, Brimer wanted to be an inventor. And he ultimately achieved his dream, but in a way he never would have imagined while growing up. He became an inventor of businesses, of communities, of experiences.
Co-founder of several brands to date, including dance party/lifestyle brand Daybreaker, VC firm The Fund, and most notably online education platform General Assembly—Brimer has developed an incredible knack for building passionate, engaged communities. Today, General Assembly has 20 campuses and more than 35,000 alumni, and Brimer serves as a mentor to members of the next generation of entrepreneurs through his role at The Fund, a New York City community of founders that he co-founded.
And it all began with an old piece of furniture and a lucky break on eBay.
In 2005, during Brimer’s freshman year at Yale, he and a few buddies noticed that some of the buildings were under renovation and the university was selling the contents in the process. After perusing the items for sale, they decided to buy an antique piece of furniture to see what they could get for it on eBay.
They took a couple photos of the item, posted it and hoped they could make a few extra bucks from the sale.
They had purchased the piece for $50. It sold for $1,000.
Minds blown, they rushed back to the buildings, bought more items and the college freshmen launched a small online business in the antique furniture space.
Having caught the entrepreneurial bug, Brimer wanted to try his hand at something a little bigger—something that required more technical skill.
In 2007, he and four other college students launched the website GoCrossCampus.com, an online game that turned college rivalries into a wildly popular online battle.
“We made every first time founder mistake in the book. It ended up a few years later becoming a total failure,” Brimer says. “But for a while we were the largest college gaming network in the country.”
He acknowledged that with too many founders and no way to generate new revenue, the project was doomed to fail, and GoCrossCampus shut the doors to its battleground in 2010. But while his first project may have ended, Brimer’s desire to create new things had only begun to grow.
He graduated, moved to New York and freelanced as a web designer while he spent all his free time immersing himself in the tech space. Although the city was bursting with brilliant entrepreneurs and new, exciting ideas, Brimer soon realized that bringing them together to interact and exchange those ideas was a challenge.
What if, he wondered, there was a physical building dedicated specifically to serving those in the tech space? What if there was a place where they could work alongside each other and learn while building meaningful community?
With that dream in mind, Brimer, Jake Schwartz, Adam Pritzker, and Brad Hargreaves co-founded General Assembly in early 2011.
Education for the 21st Century
General Assembly launched as a place for coworking, education, and community, under a single membership model, and this system worked well at first. But Brimer quickly noticed that, to better serve members, a greater emphasis had to be placed on building out the educational branch of the brand.
“There’s this huge skills gap between where traditional higher education leaves off and where the 21st century begins,” he says. “College education isn’t changing that much relatively speaking. But the 21st century—in terms of what employers are looking for, in terms of the talent they’re hiring, in terms of the skills you need to be effective in any industry today—that’s moving quickly.”
Brimer says that a traditional university education can leave graduates in tech fields woefully unprepared for the challenges ahead, and this was the gap he hoped General Assembly could fill. So they eliminated the coworking aspect of the business and doubled down on providing quality education from stellar instructors.
According to Brimer, these practical training programs on digital skills taught by actual practitioners currently working in the space were the most powerful, the most transformative thing they could provide. He wanted to equip students with valuable skills that enabled them to land a new job, upgrade their current position or pursue their passions in the digital economy.
Brimer and his cofounders threw themselves into the new phase of their business, raising more capital, expanding their curriculum both online and off, and launching a new branch that offers corporate training and assessments to large companies. They also built out a credentials program and launched a philanthropic wing designed to lift up those with talent and tenacity from all socioeconomic backgrounds.
With this grand expansion came a need to cement the trust consumers had in the brand.
From day one, Brimer placed a significant focus on delivering measurable outcomes at General Assembly, as a way to build firm trust in the brand. He wanted to answer the question, “What can I do after experiencing this product that I couldn’t do before,” with an unequivocal answer: get a job in tech.
It’s no secret that a college degree doesn’t necessarily guarantee a job after graduation, and this, Brimer feels, is a major issue right now for traditional colleges and universities.
“So here you have spent all this money, all this time getting a college degree and it doesn’t guarantee you a job anymore,” he says. “The outcomes are a little nebulous.”
Brimer and General Assembly wanted to provide something with more certainty. By supplying classes in coding, data, design, marketing, business, and career development, as taught by instructors with the most up-to-date information, Brimer feels that General Assembly fills the gap left by traditional education, more directly preparing students for a career in the industry.
The co-founders of General Assembly also made a concerted effort to attract instructors who were not only excellent in their fields, but also who cared deeply about passing their knowledge and skills on to others.
Brimer says that the best instructors at General Assembly are those who love giving back and empowering others, even if they’ve never had any teaching experience. Today, according to its website, there are more than 250 expert instructors. With an ever-evolving curriculum, and continued expansion, General Assembly is bound to continue making a splash in the tech world.
Brimer began as a cofounder, later transitioned into a part-time position, and this summer he stepped into a new role as an external “evangelist for the company,” when the Adecco Group acquired the brand for $412 million.
While his day-to-day work at General Assembly may have come to a close, he is still extremely passionate about what he was able to accomplish during his time there, and is excited to see what new frontiers they are able to conquer in the years to come.
Brimer is no longer the kid tinkering with household electronics in Missouri, but with free time to concentrate on new ventures, he’s still dreaming big.
“It would be a hilarious thing,” he says, “to explain to my 6-year-old or 8-year-old self what it is that I am, have been, and will be.”
4 Ways To Establish Trust in Your Brand
When competing with major colleges and established universities, the way Matthew Brimer was when he co-founded General Assembly, it is absolutely essential to establish deep trust in the brand as quickly as possible. But all brands, not just those in the education space, have to find a way to build a bridge of trust between company and consumer to become successful. These are four of Brimer’s best tips on how to establish trust for your brand.
1. Deliver Measurable Outcomes
Brimer says that one of the best possible ways to build trust in your brand is to deliver outcomes that are clear and measurable. To decide what that outcome is, he recommends asking, “What is possible for a customer after engaging with the brand or product that would have been completely unattainable before?” By nailing down the measurable outcome and then delivering it, it turns word-of-mouth references into undeniable, tangible results.
2. Celebrate Success Stories
Once you’ve determined what “measurable success” for your brand looks like, it’s time to celebrate those who have achieved it! Brimer says that even prestigious colleges only gained the clout they have because of the success of their alumni. In the same way, the successes of others who have interacted with your product reflect back onto your brand.
3. Establish and Adhere to Core Values
By crafting a definitive and concrete set of core values you can stand by, customers learn what they should expect from your products and services. Brimer says that by delivering on those values, you can develop an invaluable level of trust with consumers that can only come from maintaining integrity.
4. Stay Humble
Brimer says that, all too often, as companies grow larger, so do the egos of the people at the top, preventing them from quickly acknowledging mistakes and accepting feedback with humility.
“The more human of a relationship you can have as a company with your users, the more trust you’re going to have,” he says. “Trust goes away when it’s a faceless brand—a faceless corporate entity—interacting with live humans on the other side. That’s when things go downhill.”
Direct download: FP246_Matthew_Brimer.mp3
Category:general -- posted at: 2:43am AEST
Wed, 10 April 2019
How Aidan Clarke grew global brands 2XU and Saint by prioritizing product.
In a market saturated with quick, cheap fashion, building a high-quality, global apparel empire was not an easy feat—but in 13 short years, Aidan Clarke paved a way.
It took a lot of dedication, but Clarke was determined to make a game-changing clothing company. Clarke decided early on that he doesn’t care about how his apparel looks, as much as he cares about its quality, and that commitment has paid off in a big way.
His first and primary brand, 2XU, is based on the idea of making high-performance athletic wear, with a focus on unique, custom-engineered materials first. This approach and the resulting success would lead him to his second brand, Saint, which takes that same emphasis on materials and applies it to safety gear for motorcyclists.
The funny thing is, by focusing on high-end users and materials, Clarke’s companies ended up creating products that have much broader appeal than the initial target audiences, branching out into athleisure, workwear, and potentially even streetwear for skateboarders.
Through these two brands, Clarke has found a way to sell products that look good and perform well—and outfit consumers in over 60 countries.
From Door-to-Door Sales to 2 Worldwide Brands
Clarke got his first taste of the clothing business at just 18. As he was preparing for a school dance, he took a second glance at the neckties he and his friends were buying. A young entrepreneur’s mind started crunching numbers and realized that the fabric only cost $30 per meter, and each meter could make up to seven ties. Yet here he was shelling out almost $100 to purchase just one. “I thought, ‘Hang on, there’s a business here,’” Clarke recalls.
He decided to start making his own ties and selling them door-to-door to businesses in his home of Auckland, New Zealand.
Clarke’s entrepreneurial path didn’t continue in a perfectly linear fashion, a common theme we see among emerging founders. After graduation, he went to college and started a corporate career. His pushed his entrepreneurial passions to the back of his mind, but not for long.
“I ironically landed back in clothing,” Clarke says. “I’d grown up around seamstresses and saw the value-add of clothing.”
Clarke started his first apparel brand 2XU in Melbourne in 2005 and moved his family there soon after. He spent the following five years on a plane building 2XU into a multinational business reaching more than 60 countries.
Why Melbourne? Clarke and his team had received a significant amount of startup funding, and their investor was based in Melbourne. The Australian market for 2XU was also better than in New Zealand. “We spotted an opportunity. New Zealand had lots of local sports brands, but Australia ironically didn't,” Clarke says. “We wanted to take on the big boys.”
2XU started with audacious goals. Clarke and his team wanted 2XU to be uniquely performance-focused, so they spent the entire first year developing fabrics for their apparel, before creating their product. “You can either buy fabric or focus on quality,” Clarke says. “We said, ‘Hey, we want to change the fabric.’”
With millions in seed capital, they were able to spend ample time and resources on fabric development. Eventually, their warehouse became so full that they had to start selling their product.
Clarke and his team did wholesale and direct sales at the same time. While most clothing brands avoid direct sales so as to not compete with wholesalers, 2XU opened its first retail store to prove they could sell premium, expensive sportswear in Australia. “Selling at our own store motivated retailers to accept products,” Clarke says. “Having our own hero shop drove demand for wholesale.”
The team also visited both retail and special sports stores. Selling next to well-established international brands was difficult, but they pressed on. Their first major sale was to a now-closed triathlon store that purchased the entire 2XU line for over $3,500.
Another significant sale Clarke remembers was to Rebel Sport, a major retail chain in Australia and New Zealand. “Needless to say, we had a few drinks that night,” he says, laughing.
Clarke’s next step for expanding 2XU was finding ambassadors and distributors. But that wasn’t always easy. “Trusting someone with your brand is like a glorified babysitter,” Clarke says. “You have to find someone with the same passion to sell your story.”
He found that the best thing about distribution is how it taps into local knowledge and expertise. The 2XU team worked hard to find passionate brand ambassadors and people to accurately represent 2XU brand in each country. In doing so, they found mostly nontraditional distributors: athletes.
In the following years, 2XU celebrated two major equity events. In 2011, a local company bought 30 percent of the company. Next, the capital arm of Louis Vuitton discovered the brand and bought in at 40 percent, a significant valuation for 2XU.
Since then, 2XU has scaled up and hired corporate CEOs to run the company. “The challenge we face, though, is how to still act like a small business…an underdog,” Clarke says. “We used to say, ‘By athletes, for athletes,’ but we can’t say that anymore.”
But at the end of the day, the 2XU product is “still sensational.” It’s been well-received at the professional and Olympics level and is very much considered a premium brand. In the United States, it’s worn by the NBA, NFL, and even Navy Seals.
In other places, 2XU apparel has become an athleisure staple. “You don’t have to be a world champion to still want quality,” Clarke says.
After getting 2XU settled, Clarke pulled back and spent a “non-executive year” focused on himself and his health. One day, while riding bikes with his co-founder, he came up with what would become his next big idea—a new form of safety apparel for motorcyclists.
The idea sounded simple, but as the duo dove into R&D, they realized creating this type of product would require a significant commitment. “It cost us a couple million dollars after a couple years,” Clarke says. This effort would go on to become Saint, Clarke’s second global clothing brand.
Their goal was to create a single-layer safety product—ensuring a flexible, comfortable riding experience—that wouldn’t rip or tear if someone fell off their motorcycle. The global “slide time” standard for the fabric on these products (which defines the amount of time that a fabric should withstand sliding across an abrasive surface, such as pavement, before it tears) is four seconds, and they’re routinely tested in facilities equipped with spinning disks of sandpaper that replicate sliding on the street.
Their first fabric lasted 3.67 seconds before ripping—just short of the standard but still much longer than any other single-layer fabric. After continual development, Clarke’s fabric now lasts almost six seconds.
This single idea helped Clarke and his brand break into work clothes and other tough lifestyle applications.
They’ve since patented their super-durable fabric, which involves a unique material spun into the yarn. “As for workwear, no one can do what we’ve done,” Clarke says. “It’s nice to have the IP protection.”
Premium Product > Price
Both of Clarke’s businesses, 2XU and Saint, lead with a premium product line. And there’s a reason for that. “People often lead with price,” Clarke says. “That’s a lazy way to sell. Product is king.”
Some clothing retailers also find themselves tempted to sell their products relying on aesthetics alone, but not Clarke. “Rather than being a fashion brand, I’d rather be an authentic motorcycle brand with tough products…that also look good,” he says about Saint.
How can you create this demand? Clarke relates it to a “chicken and egg” situation. If you create demand before you’re ready to supply and distribute your product, you risk wasting resources because you’re essentially creating demand for competitors. On the other hand, if you develop and supply your product before the demand is there, you risk wasting resources on product that never brings in revenue.
To build demand for your product, Clarke recommends doing so authentically. He and his team often attended sports events and spread the word about 2XU to one person at a time. Those early adopters and advocates would then tell friends. “It’s like a grassroots movement,” Clarke says.
Clarke claims that social media, in fact, is a lot more directed. “The ability to target and generate demand is more focused than ever,” he says. “That’s what’s exciting about today.”
Every business’s website is now the flagship store, at least to begin with, Clarke says. People form their judgments about your products very quickly, and you’ve got to have your website synchronized with the products you’re offering in the real world.
The Future of Saint and 2XU
Looking ahead, Clarke is excited for the futures of both 2XU and Saint. The brands are at different stages, but they both sell high-quality product and are both in growth mode, as Clarke calls it. His primary growth measure isn’t from a focus on sales numbers—it’s from a focus on communities.
“Saint is a rocketship about to take off,” Clarke says. “It’s five times tougher than standard workwear.” The brand has even had inquiries about street fashion and safety gear for skateboarders and other action sports.
As for 2XU, Clarke says that seeing more and more people discover the brand is exciting.
“The tough thing about clothing is that scalability is hard,” Clarke says. Small businesses often buy too much stock, but Clarke encourages the opposite—pay more to make fewer units and sell them up.
In his opinion, it’s better to scale yourself up. Too much stock can put clothing brands in a hard place. Unlike the whiskey business, apparel product is worth less and less every year.
At the end of the day, Clarke reminds brands and entrepreneurs to prepare themselves for the road ahead. “It’s a tough game,” he says. “Just believe in yourself, be resilient, and keep pushing.”
Direct download: FP245_Aidan_Clarke.mp3
Category:general -- posted at: 8:12am AEST
Thu, 4 April 2019
At 16, he began building websites.
At 18, he became a regular at the gym.
At 20, he started sewing and screen-printing workout apparel in his garage.
By 26, when most adults are only on the cusps of their careers, Ben Francis had already launched a viral gym clothing line, served as its CEO, and stepped down in favor of a more creative role in the wildly successful company.
Today, the Gymshark founder works alongside 190 staff, including the high school buddies who partnered with him to launch the brand, bringing this unmistakable apparel line to customers in more than 130 countries.
And while it seems like this former pizza delivery boy magically rocketed to entrepreneurial stardom overnight (OK, he sort of did), his success can be traced back to a dedication to community building and an innate understanding of social media influencer marketing, long before it was a thing.
But it all started with amateur website building, a love for fitness, and a whole lot of YouTube.
Years before he was a CEO, Francis longed to make a name for himself in the fitness space. But the closest thing he had to investors were people calling to order a pizza, so establishing a clothing brand couldn’t have seemed less attainable.
Not to be discouraged by limited funds, Francis and his high school friends began a workout supplement drop-shipping business and quickly realized that there was an opening in the workout apparel market.
Dressing a bodybuilder and a skinny, weight-lifting newbie are two totally different jobs, especially when you’re going for form-hugging designs fit for a workout. Francis and friends, however, believed they could create a line that would be sleek, modern, and appealing to gymgoers of any body type.
“And so,” Francis says, “I bought a screen printer and a sewing machine and started to make the clothes by hand.”
The designs were an overnight sensation.
“People were seeing the clothes, and they were so iconic and unique, that it sort of started to spread like wildfire,” Francis says.
But the real secret sauce was the passion he and his friends had for YouTube.
In the early 2010s, YouTube was rising fast. People passionate about everything from movies to knitting, gaming to, yes, fitness, were creating video content and building communities around shared interests.
Francis and his friends were among the millions who joined online followings based on their hobbies, but stuck around for the personalities in the videos. One such fitness YouTuber who held their attention was Lex Griffin of Lex Fitness, whose channel now has over 440,000 followers. Another was Chris Lavado, whose channel has 65,000 subscribers today.
Realizing they could leverage the followings of others, Francis and his friends pursued a business strategy that put them on the map, and that they still use today.
They sent samples to Griffin, Lavado and other fitness YouTubers they admired, and hoped for a stamp of approval—and a video to prove it.
While the term “influencer marketing” has only recently entered into the pop consciousness, the principle has been around as long as marketing. Attracting the favor of a wealthy or influential person by showering them in gifts that define a brand is as a classic move, a point Francis illustrated by sharing some history of his hometown of Birmingham, UK.
For hundreds of years, the Jewellery Quarter in central Birmingham has been a hub for opulent accessories. Many jewelers open businesses in the Quarter, and the competition is fierce. But historically, there was one way to ensure that a brand’s name would be on everyone’s lips: become the first choice of royalty.
Frances explained that this principle of vying for favor worked then and still works now.
“They would provide a bunch of free jewelry to royalty so that people would associate that jewelry with the royalty and then hopefully back to the brand and go buy it,” he says. “It’s no different to what influencer marketing is nowadays.”
“I think it’s worked forever, and as far as I’m aware, I think it’ll always work.”
And so, like an ambitious jeweler in the 1700s, Francis sent off his product to curry favor with those who had the power to make his brand catch fire. And it worked.
“They absolutely loved it, and they’re still with us today,” he says. “That started, I guess, what you’d now call an influencer market for us.”
Today, Francis continues to leverage the audiences of athletes through an ambassador program that now includes such personalities as bodybuilder Matt Ogus, lifestyle and fitness vlogger Nikki Blackketter, and weightlifter Whitney Simmons.
Because of Francis’s early success in harnessing an influencer-generated market, Gymshark has never relied on investors for capital.
“We never needed investment,” he says. “So why complicate things?”
Francis recognizes, though, that there was also a component of luck at work. He entered the world of social media influencer marketing when it was still a young idea, and those with followings weren’t inundated daily with products in search of a boost.
“I do think it’s a hell of a lot more difficult than when we first started,” he admits. “It’s a completely different place now.”
But if he were to launch a new business today, a venture he says would be a fun challenge with the vastly changed online landscape, he knows exactly where he would focus his attention.
“Product is king at the end of the day,” he says. “I would focus on creating an absolutely brilliant and a gorgeous product because I think from that, it’s like a snowball effect.”
He believes that by designing a remarkable, unique, and stunning product, anyone can rise above the cacophony online.
“If you get someone’s attention with a genuinely brilliant product, people will wear it, people will use it, and people will talk about it.”
But for now, Francis is focused on the current community he has built.
Growing up, Francis loved attending events and expos in his hometown and dreamed of the day he would not only participate, but host his own. His belief in the power of person-to-person advertising was instilled in him as a young expo attendee and has continued to stick with him into his mid-20s.
“Even though the world is becoming ever more online, and 99.9 percent of what we do is online, there is always space for that human connection, and I think that’s really, really important, and it’s a real important thing to Gymshark.”
So in Gymshark’s very early days, when an opportunity to participate in an expo presented itself, Francis says that nothing could have stopped him from finding a way to join.
When he reached out to one of the coordinators to find out how much it would cost to get Gymshark a spot, he was quoted a price far more than they were able to afford at the time. But as Francis likes to emphasize, he plans hyper long-term and hyper short-term and lets the rest in between work itself out.
“This was 12 months in advance of the show, and I was like, ‘Right, yeah. We’ll have it. We’ll get that, and we’ll just sort of make it work,’” he says. “It was our dream to go to an event like that.”
And go they did, beginning a successful string of expo appearances that were initially in the UK, but rapidly branched out internationally until, eventually, they stopped going to expos and started hosting them.
“I literally think, ‘Let’s make the product that I love,’ and by default, I think other people would love, and let’s create the event that I would love to go to, and by default, I think that other people would really enjoy to go,” he says.
He also says that when it comes to events, making a profit is not the immediate goal. Just like the early days spent working a screen printer in a garage, Francis’s motivation is simply a desire to create something awesome. Something he loves.
“We just sort of think, ‘Right, what would we really, really love to go to? Let’s go make it happen. Let’s forget about the profit and loss at that point for that event. Let’s just go make something really, really cool.’”
But rapidly gaining a dedicated following, especially when selling a physical product, has its challenges. Francis says that Gymshark’s biggest challenge at the moment is keeping up with demand, especially when YouTube influencers or expo attendees are hyping them.
“We definitely made massive improvements in the last six to 12 months, but there’s still a long, long way to go,” he says.
Part of the Gymshark’s effort to keep up with growth meant Francis himself coming to terms with his right role within the company. As CEO, he quickly came to realize that he was in a position that he was not suited to fill.
“We were growing so fast, and the role of the CEO is very people oriented,” he says. “I’m very much an introverted person. I’m much more suited, and work better, in either a very small team or on my own where I can really dive into a project, focus on that thing and make it really special.
“As we were growing bigger, it became more and more evident to me that the CEO really needs to be a lot more of a strategist and a lot more of a people person than what I am.”
So Francis made the difficult decision that it would be best for him to step into the role of Chief Brand Officer instead. But the transfer of CEO power didn’t just happen overnight, which he feels helped build trust among himself and the staff. It happened over a period of about a year as Steve Hewitt, the current CEO, slowly took on more and more until he finally stepped fully into the role.
Of course, passing leadership on to someone else is always a humbling and challenging process, but it’s one that Francis has come to embrace as an opportunity to become more fully himself.
“I think it’s very important to be self-aware and to understand what you are good at what you’re not good at,” he says. “I’m a massive, massive believer of that.”
Today, Francis has the freedom to focus on product and vision, gathering small teams together to pursue new designs and strategies for the future.
So what’s next for Gymshark?
Francis says that they are always pursuing innovation and are currently in the process of designing new fabrics, as well as looking to branch out of the strictly apparel space.
And in an effort to keep avid followers and fans of the brand up to date, Francis has recently launched a vlog series of his own, giving a behind-the-scenes glimpse into Gymshark and into his world.
In the 10 years since Francis started creating amateur websites from home, his world has utterly transformed. But many things remain the same: a love of fitness, a passion for social media, and an unbreakable bond with his high school friends turned business partners.
The Gymshark brand invites each customer and avid follower to “Be a visionary.” And Francis is asking nothing of his followers that he hasn’t done himself. After all, where would Gymshark be without an enthusiastic pizza delivery boy who had the vision to buy a screen printer, and the boldness to show the world what he could create?
Ben Francis’s Tips for Success
Launching a brand new product on your own or starting your own business is never easy. No matter how large or small the venture, it requires vision, courage, and determination. But Ben Francis believes that there are three things any beginning entrepreneur can do to improve their chances of success.
Francis says he was once asked to share a story about a time when he was told that he couldn’t do something. He paused to think, but his mind came up blank. “That never happened, because I never surrounded myself with those people,” he says. Starting a business is a challenge, but with the support of people who inspire and motivate you, Francis believes that mountains are reduced back into molehills.
Being honest with yourself and clear about who you truly are is one of Francis’s crucial steps to success. “Self-awareness is key,” he says. “I think it’s massive. You can only kid yourself for so long.” Without the ability to identify which skills you have in abundance and which you lack, you’ll be unable to build a team around you that complements your abilities and improves upon them.
Once you’ve identified your strengths and weaknesses, Francis insists on the importance of allowing them to guide your decisions. “Could I do an operational…role for a little bit? Absolutely. I’m reasonably intelligent. I could manage,” he says. “But would I be able to do it for a sustained period really, really well? Absolutely not.”
Rather than forcing yourself to be something you’re not, Francis encourages all entrepreneurs to be honest about their strengths and find ways to play to them, even if that means relinquishing, as he did, the title of CEO.
Direct download: FP244_Ben_Francis.mp3
Category:general -- posted at: 1:33am AEST
Wed, 27 March 2019
When Kim Perell landed a job at a hot new internet startup in 1998, she thought she had hit the jackpot.
She loved her job and learned a lot, but when the dot-com bubble burst, the startup went bankrupt. What was once a dream company that she recruited many friends to join had become a nightmare when she had to lay off those friends, and then lose her own job too.
“In an instant, someone pushed delete on my life, and my future, my identity,” she says. “My multimillion-dollar stock went up in flames and was worth nothing.”
Perell turned to the one person she thought might give her a loan to start over: her grandmother. And sure enough, even though Nanny didn’t know what the internet was, she loaned her granddaughter $10,000, which Perell spent on a computer, a GoDaddy account for a website, and a one-way ticket to Hawaii to live with her boyfriend rent-free.
Perell launched Frontline Direct, a digital marketing company pairing brands with online advertising. Scarred from the bankruptcy, she was eager to work for herself and get back to basics, which meant focusing on profitability and growth. In 2008, Frontline Direct was acquired for $30 million, and again by Amobee, where Perell now serves as CEO.
Through all the ups and downs, Perell has learned many lessons, which she passes on to fellow entrepreneurs in her latest book, The Execution Factor: The One Skill That Drives Success. After investing in over 70 startups, she noticed one thing stood out in particular for those who succeeded: they focused on execution more than anyone else did.
For her, writing The Execution Factor was a way to pay it forward.
“If I could shortcut the system and share, based on my own experiences, what is important as an entrepreneur, that was really meaningful to me,” Perell says. “And I just felt like my grandma made a bet on me, and I was going to pay that back.”
In addition to the book, she established The Execution Factor Fund to provide seed stage funding to execution-driven startups. One hundred percent of the proceeds from her book are contributed to this fund.
(And in case you were wondering: Perell paid back the loan to her grandma.)
Direct download: FP243_Kim_Perell.mp3
Category:general -- posted at: 2:33am AEST
Thu, 21 March 2019
Tony Fernandes has worn many hats over the course of his decades-long career. And if the Group CEO of AirAsia (and former host of The Apprentice Asia) ever finds himself dissatisfied with a signature look, he’ll just invent a new one.
“You have to keep renewing yourself,” Fernandes says. “You’re only as good as tomorrow.”
That philosophy undergirds Fernandes’s entire career trajectory. Before starting what is now one of the world’s most successful budget airlines, Fernandes was an accountant, working briefly for the likes of Virgin Atlantic and Virgin Communications. He then reinvented himself within the music business, where he served as a Warner Music executive in Malaysia.
Fernandes’s latest reinvention is his biggest, and most complex. He’s the co-founder and Chairman of Tune Group, a conglomerate of hotel, automotive, financial services, education, media, and telecommunications industries subsidiaries. And he sits at the helm of AirAsia, a budget, no-frills airline that has revolutionized travel in Southeast Asia. After purchasing the then-bankrupt airline for a shocking 24 U.S. cents, Fernandes has grown the brand to a net worth of more than $1.5 billion. AirAsia is now the fourth-largest airline in Asia, behind only the big Chinese carriers (in 2017, AirAsia flew over 90 million passengers), and it recently embarked on an ambitious program that will see the airline transform itself into a travel technology company.
To hear Fernandes tell it, two primary factors differentiate AirAsia from other companies. For starters, the company has always embraced digitization. And secondly, the organization is built on inclusivity and creating a fantastic work culture. Here’s how Fernandes has leveraged those strengths to build a company that no one thought possible.
Pursuing a Childhood Dream
In 2001, during Fernandes’s more than decade-long stint in the music business, digital advancements began to threaten deeply entrenched industry norms. Fernandes spotted an opportunity, but his colleagues weren’t so keen on the digital revolution.
“Napster had come along and Spotify was just starting, and I thought, ‘Wow, this is super exciting for the music industry,’” Fernandes says. “But I was a lone voice.”
No one at Warner Music or Time Warner Inc. (where Fernandes was working at the time) thought it was a good idea. “They thought the internet would destroy music,” Fernandes says. “My premise was that we can’t hold technology back and that this was a fantastic distribution model to create more revenue.”
But his vision didn’t gain traction, and when Time Warner merged with AOL, he decided to bid adieu to his music industry career.
He was sitting in a bar in London, trying to figure out what to do next with his life, when he saw mention of the budget airline easyJet on the pub’s TV. Fernandes instantly recalled his childhood love of planes.
“Always from a very young age, I’d told my dad, ‘I’m gonna own an airline one day,’” he says. “That’s one of those things you say, but you’re not entirely sure you’re gonna do. But I always said it. And so I thought, ‘Well, this could be the time.’”
It might seem like a bold move for a music industry exec to presume he could run an airline, but Fernandes was motivated by one simple premise: YOLO.
“I thought… ‘You only live once,’” he says. “If I fail, I fail. It’s okay. I’ll go get a job doing something else. But I don’t want to sit there at 55 and say, ‘I wish I did it.’”
Fernandes’s idea gained further traction after he started studying the models of low-cost airlines such as RyanAir. (RyanAir’s then-Director of Group Operations would later become a shareholder of Fernandes’s airline.) Inspired by what he refers to as an “amazing concept,” Fernandes gathered up some partners and returned to Malaysia for a meeting with the Prime Minister.
The Prime Minister agreed to let Fernandes and his partners into the airline industry, but only if they purchased an existing airline. As a result of some devastating circumstances, there were a lot of opportunities. Fernandes was looking to purchase an airline around the time of the September 11, 2001 terrorist attacks, which had sent the industry reeling. He ended up purchasing AirAsia, a Malaysian government-owned airline that was $11 million in debt, for a grand total of 24 U.S. cents.
After purchasing AirAsia, Fernandes knew he had to move fast. “It was very clear to me once we started moving that…I was going to put the foot to the accelerator because there were some big around me,” Fernandes says. “When you have something, scaling up is important.”
Luckily, Fernandes spotted multiple avenues for growth.
For starters, he knew that at the time he acquired AirAsia, only 6 percent of Malaysians flew. If he could capture even a portion of the other 94 percent, he’d be in business. What’s more, he was willing to fly to places that most airlines didn’t go. “A lot of our growth has come from destinations that no one did before,” he says.
But perhaps AirAsia’s biggest differentiator was its use of the internet at a time when, globally, many still weren’t online. “Back in 2001, most people didn’t even have internet yet,” Fernandes says. “But I said, ‘Trust me, when I put a fare at 2 dollars, people are going to find their way to the internet.’” Since then, AirAsia has been religious about tracking and keeping data. So when huge brands started to embrace digitization many years later, they were already ahead of the game.
Still, Fernandes knew he was at a disadvantage, due to his lack of industry knowledge, so he accelerated his learning to ensure he could continue AirAsia’s rapid growth. He sat down with engineers, pilots, simulators, and cabin crews; learned how to change a wheel; and generally threw himself into understanding the intricate workings of planes and airlines. “I was a sponge,” Fernandes says. “I took everything in.”
A strong focus on innovation, learning, and growth helped Fernandes and his team make up for what they lacked in capital.
“Let’s be real, three guys from the music business coming in to start an airline is not the most convincing business ,” Fernandes says. “No bank gave me a cup of coffee. Did we want capital? Of course. But we didn’t have it. But again…we built a massive airline with very little capital.”
In fact, AirAsia only raised one round—$30 million around year three—before launching its initial public offering (IPO). “I’m old-fashioned in that aspect,” Fernandes says. “I believe in cash. I believe in making some profit. If you have a model where you can make money, make money. And of course reinvest some of that money, which we did.”
Much of that money went into flying to new places. “The product was going places that no one else wanted to go,” Fernandes says. “We couldn’t stand still… kept adding routes and new destinations.”
While the airline continues to add new destinations, today it’s equally focused on developing a multi-pronged digital strategy. The organization is digitizing all of its processes to enhance efficiency and the customer experience. It’s also attempting to create a comprehensive travel ecosystem that will enable users to book train tickets, purchase concert or other event tickets, use financial services, and so on, all from one central hub.
“We’re using and building platforms that will provide more value to my customers…and it’s an exciting vision,” Fernandes says. “There’s a huge potential if we can execute well.”
That execution hinges on a top-notch team working cohesively and effectively. Luckily, Fernandes has been building that since day one.
Building a Dynamite Culture
“Culture is, I think, the most important thing in the success of AirAsia,” Fernandes says.
Fundamental to that culture is a bedrock of transparency and trust—even among 24,000 staff. “It is by complete choice that we’re open plan,” Fernandes says. “When you have an office, you have all these invisible walls. … So one day I just came in and smashed all the offices. I brought a contractor in and just tore them all down. And we’ve been open-plan ever since.”
In keeping with the open office concept, AirAsia also employs a fairly flat organizational structure. “I like to think we utilize everyone’s brain,” Fernandes says. “We put everyone…in the same building. Everyone eats in the same place, everyone goes to the same gym. I want people who believe they can do a lot more and grow in this company.”
This spirit of inclusivity extends to diversity. “We embrace diversity,” Fernandes says. “We don’t care what race, creed, color, sexual orientation you are. And I think that’s a strength. Because that gives us a huge diversity in our workplace, and a huge ability to attract great talent and great ideas. … I wanna have a fantastic, multi-ethnic, diverse company, and I think we’re not far from that.”
Of course, when you’re dealing with a team of 24,000 people, it’s easy for bureaucracy to rear its ugly head. “We got big, and politics and bureaucracy creep in,” Fernandes says. “But it’s not something I’m gonna run away from. I confront it because bureaucracy and politics is the cancer of any organization”
One strategy the team uses to confront bureaucracy is simply having fun. “I think too many business leaders take life too seriously,” Fernandes says. “Too many entrepreneurs get too stressed. Have a balance. You don’t have to work 18 hours a day. Make sure you give time to your family and your kids and your friends.”
In Fernandes’s view, this juggling act is worth it in pursuit of building a great team. “You’ve gotta surround yourself with good people, and you’ve gotta be prepared to listen,” he says. “Too many founder CEOs think they know it all. … You can have all the ideas you want in the world, but the execution is what it’s about, and you need a good team.”
Luckily, developing a great team has always been fundamental to Fernandes’s vision for AirAsia.
“My vision was to create a great place to work—a fair place to work, where it didn’t matter whether you…had money or a great education, but if you had a great brain and you had the will and belief, you could achieve anything in this airline,” he says. “To turn a raw diamond into a diamond—and we have so many of those. … If you really push me, it’s allowing a lot of my staff to live their dreams—that would be something I’d be most proud about.”
That spirit of affirmation and inclusivity extends from AirAsia’s team members to its customers. In spite of the many ways that Fernandes and his airline have reinvented themselves over the years, the company’s slogan has remained the same since Fernandes first developed his vision all those years ago: Now everyone can fly.
5 Mini-Lessons in Entrepreneurship from Tony Fernandes
“Great ideas are great ideas…only people know about them,” Fernandes says. “Too many businesses don’t spend enough on branding and marketing. Keep a budget for that.”
“The world is littered with products that didn’t reinvent themselves,” Fernandes says. For example, he references Nokia. “Who believe a world without Nokia phones? They were it.” Today, of course, the phone landscape is very different.
“You have to live within your means and live within your resources,” Fernandes concedes. “But you also can’t stand still. It’s a balance. But life is a balance. Everything you do is a balance.”
“Failure doesn’t worry me, because I’d rather fail than not try at all,” Fernandes says. “Many people are too worried about failing, so they don’t do anything. I’ve had many failures… I don’t have any regrets, because if I didn’t try I didn’t know.”
“You can do all the marketing research you want,” Fernandes says. “You just gotta go with your heart sometimes and do it.”
Direct download: FP242_Tony_Fernandes.mp3
Category:general -- posted at: 11:25am AEST
Thu, 14 March 2019
Life in the Fast Lane
From washing cars, to selling them, to building businesses, Sendlane CEO Jimmy Kim credits focus as the key to his rise to the top.
Like many children of Asian-American immigrants, Jimmy Kim knew his parents had high expectations for him. When he was a child, his mom told him that he needed to become a doctor because that would make him the most money.
“I don’t wanna be a doctor,” the young Kim replied. “I’m gonna make more money than a doctor.”
Fast forward to 2018, and Kim is making good on that promise to his parents, as an entrepreneur working in online marketing.
He’s built and sold multiple companies, and now sits at the helm of the fast-growing email marketing software Sendlane. The bootstrapped company employs 25 full-time employees in its newly remodeled, 6,000-square-foot office in San Diego. As of May, Sendlane had already more than doubled its revenue over 2017 and was on track to triple or even quadruple that number by the end of the year.
How did he get here? Kim attributes his success to one thing: focus.
From Washing Cars to Building Businesses
At 15, Kim was entirely focused on one goal: saving up enough money to buy a car. He started working 10 hours a week making pizzas at a local shop. But earning $4 an hour made saving enough money difficult.
“When I turned 16 and I got my driver’s license,” Kim recalls, “I still couldn't afford a car because, well, I came from a middle-class, first-generation Asian family, and my dad's not going to buy me a car. I mean, it didn't matter what my grades were at that point.”
He figured the next best thing to owning a car was working with cars, so he got a job washing cars at a dealership.
“That was my solution,” he says. “That was my first mindset: ‘Okay, let me go at least get to drive cars.’”
Kim worked at the dealership until he went off to college. During summer break, he returned and asked for his old job back, but they said the positions had been filled. He felt defeated. But as he walked out of the office, one of the salespeople spotted him and asked him a question that would change the trajectory of his career: Why don’t you try selling cars?
Thanks to his excellent work ethic in the past, the manager hired him on the spot. During Kim’s first month, he sold 31 cars, made $14,000, and became salesman of the month, at the age of 19. Some brushed it off as beginner’s luck.
“That just fuels the fire in me,” Kim says. “That's how I am. I'm a competitive person.”
His second month, Kim made even more money and, again, was named salesman of the month. That’s when he decided to make the difficult decision to drop out of college.
“Now, as an Asian growing up in an Asian family, it was probably the hardest conversation that I ever had with my family,” Kim says. “My parents did not approve. They thought I was crazy. They thought I was wasting my life, ruining my life.”
As a compromise, he agreed that after a couple of years of making money, he’d go back to school and fund his own education.
After that conversation, Kim went full time at the dealership and was doing well, but being the ambitious kid that he was, he felt he could do even better. He noticed a finance position opened up at the dealership, and he was drawn to the challenge of selling intangible goods—life insurance, car insurance, paint protection, etc.
“I wanted to be that guy to sell that intangible because I thought it was really fun to take it to the next level.”
Excited by the possibility, he asked if he could take the finance position. The manager said he would need to speak with the general manager, and a couple days later, came back to Kim and said the position had already been filled.
“The anger inside of me actually grew at that point,” he says, “which, I'm not an angry guy at all, but for some reason, I just felt like he was lying.”
Infuriated, Kim marched up to the general manager’s office (“It's totally disrespectful. I should have never have done that.”), and told him he couldn’t stand the place and he was quitting.
A month later, he got a call from the owner of the company, inviting him to come back and talk it out. Kim shared his aspirations with the owner, and eventually, was sent to a finance class where he obtained his certifications and earned his coveted spot in the dealership’s finance department, where he eventually worked his way up to finance director.
At 25 years old, Kim became general manager of a Saturn dealership, and under his oversight, it became one of the top 10 Saturn dealerships in the nation.
The End of an Era, the Start of an Empire
In 2009, General Motors, which owned Saturn, filed for bankruptcy, forcing Kim to make his next move.
“It was kinda sad,” he recalls. “I remember that bittersweet moment that it was the end of that realm.”
With GM going under, some people wanted to reopen the Saturn dealerships as Kia stores instead. They asked Kim if he’d be interested in helping, and he agreed to help them get started, but set a hard date for when he would leave the auto industry.
“I realized that this isn't what I wanted to do for the rest of my life.”
Kim wasn’t entirely sure what he did want to do, but he had a friend, Anik Singal, who had an internet marketing company, and he’d always been curious about what he was doing. So he approached him and said, “Look, I don't know what's going on as far as what you actually do in business, but there's one thing I'm really good at—I can sell stuff and I'm really good at operations.”
The timing was perfect. At that point, Singal’s company had more than $1 million in debt and needed help. The two friends worked out an agreement. Kim would help the company get out of debt, but in exchange, Singal would teach Kim everything he knew. As soon as the company was out of debt, Kim would move on.
And just like that, Kim went from making around $250,000 to $300,000 a year at the dealership to about $80,000 a year at the internet marketing company. But remember, for Kim, it’s all about focus, and he had a plan.
By 2013, after delivering on his promise to get Singal’s company out of debt, Kim transitioned to the next phase of his career by starting his own internet marketing company, JK Marketing. In 2016, he estimates that business brought in $4.5 million in revenue.
From Side Hustle to Full-Fledged Business
While Kim was running his internet marketing company, he and his team developed an in-house solution to their email marketing woes: Sendlane.
“We never intended it to be anything else but for us,” he says. “That was the number one thing: We built it for us. It was a platform. It was ugly. It was purposeful. That was all we built it for.”
But by 2014, friends and clients alike began asking Kim where they could find out more about Sendlane. The problem was, they couldn't. All that existed was a login page for Kim’s company to use to access the app. So in 2015, he and his team decided to open the doors to the public and see what happened. They put up a simple webpage with a payment portal—and people started signing up. From 2015 to 2017, they ran it passively. In its first year, Sendlane reached $40,000 to $50,000 in monthly recurring revenue. By 2016, it climbed to $80,000 to $90,000 a month.
So there Kim was, juggling his internet marketing company, a growing side business, and on top of that, a clothing store in Las Vegas. But in August 2017, a life event changed everything for him. His daughter was born.
“The moment I saw her I realized that I needed to find more time in my life,” he says. “Yet I knew that I couldn't slow down business because I love business too much. So I had to find a good balance.”
To do that, Kim decided to sell most of his companies and revive his favorite tactic—focus. He would pour his energy into one company only, and it would be Sendlane.
“I took that hard look,” he says. “I looked at the companies and I was like, ‘You know, this is the company that I can see incredible legs, and I know we haven't focused on it, but look what we did without even focusing on it. What can we do by simply focusing on it?”
That was in August 2017. From September 2017 to May 2018, Sendlane grew an average of 10 percent, month over month.
Bootstrapping Versus Raising Capital
That age-old question. So far, Sendlane has been 100 percent bootstrapped, but Kim says he will be raising capital to the tune of $5 million later this fall.
“Bootstrapping is great and it's a way of life, of course, and I totally respect it, and I think that it's been a great journey for me.”
But as someone once explained it to Kim, you can own 33 percent of a $30 million bootstrapped company, or you can own 20 percent of a $100 million VC-funded company.
“Being bootstrapped, you're always going to slow yourself down because of revenue and money,” Kim explains. “But when you have a large infusion of money, it becomes a different mindset because now all you're focused on is growth and not the money.”
And what would Kim do with an infusion of $5 million? He says he plans to spend the majority of the funding on growth, such as media buying and salespeople, keeping a close eye on getting an ROI as fast as possible.
The One Thing Your Email Marketing Needs
While we had his attention, of course we had to ask Kim to share some of his email marketing knowledge. The first thing Kim wants people to know, though, is that you can’t use outdated tactics and expect awesome results.
“People are still trying to do what worked in email marketing in 2008, in 2018,” he says. “People don't recognize things have changed so dramatically. … People are just getting a heck of a lot more emails every day.”
In fact, a whopping 269 billion emails are sent each day, according to a 2017 report by research firm The Radicati Group. So how can you stand out in a crowded inbox? Kim recommends behavior-based automation.
Using your email marketing platform, create emails based on actions a user took (or didn’t take). Did they open your emails? Did they buy anything? What kinds of actions have they taken in the past?
For example, if a subscriber isn’t opening any of your emails, it may be time to get more aggressive. On the other hand, if a subscriber is opening all of your emails but hasn’t made a purchase, that tells you they’re highly engaged, but for whatever reason, they’re not buying. It may be time to move that subscriber into a separate email funnel that pushes them to make a purchase.
“Creating that personalized experience is, bar none, the best way to make people want to actually listen to you and want to open your emails,” Kim says. “That's email automation and that's the best way you can do it now, in 2018, and forward.”
This level of personalization can be achieved with email marketing software that allows tagging, revenue tracking, and “if this, then that” statements.
“Things like that you can do with email, you can do with Sendlane of course, but you can do it with most email platforms that are more advanced thinking.”
What’s Next for Sendlane and Jimmy Kim?
Aside from raising a round of funding later this year, Kim has an entire roadmap for Sendlane that he wants to continue to implement.
“I'm not going to tell you that I'm not going to ever sell the company,” he says, “because if someone offers me enough money, I'm going to sell the company, and I'm going to move on to the next project. But the coolest thing about that is, being the owner or founder, you don't have to worry about that if you just put your heart and soul into it.”
Kim also wants to put more time into sharing nearly a decade’s worth of his digital marketing knowledge. He plans to get more into vlogging; he’s already started a YouTube channel where he shares tips on anything from Facebook ads to affiliate marketing. And a recent project he’s particularly proud of is the Advanced Email Marketing course he put together in collaboration with Foundr.
“It's always been kind of a small passion of mine to share this information,” he says. “Whenever comes out, that's something you should be looking for.”
Kim’s 4 Tips for Founders
NEW COURSE ALERT: Want to learn advanced email marketing secrets from the cofounder of Sendlane? In our latest course, Jimmy Kim is sharing all the knowledge he’s learned to help you transform your email list into a money-making MACHINE.
In Advanced Email Marketing, you’ll learn:
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Direct download: FP241_Jimmy_Kim.mp3
Category:general -- posted at: 5:20am AEST
Wed, 6 March 2019
240: How to Use Excellent Customer Support to Stand Out in a Crowded Market, With Ross Paquette of Maropost
When Ross Andrew Paquette founded email service provider Maropost in 2011, he never expected it to take off.
“The plan was to have 10 customers and maybe sit by the pool a little more often than not,” he says with a laugh.
But since then, he’s scaled the company to nine figures, with an impressive customer list that includes DigitalMarketer, Livestrong, and The New York Post. And beyond email marketing, Maropost has expanded into customer acquisition and ecommerce solutions.
These are extremely crowded markets, but at the core of the company’s success is its strong commitment to excellent customer service, with heavy emphasis on a 24-hour in-app live chat and five-minute support response times.
We chatted with Paquette to learn the strategies he used to so impressively grow his SaaS company in a short amount of time.
Direct download: FP240_Ross_Paquette.mp3
Category:general -- posted at: 7:29am AEST
Tue, 26 February 2019
You don’t become the richest self-made woman in American real estate by playing it safe. Dottie Herman has proved time and time again that bold moves pay off.
In the 1980s, in a maneuver that solidified her path to the top in real estate, Herman flew to California and convinced Merrill Lynch to hire her to help the company expand into the real estate market.
In 1990, when Prudential decided to sell its regional holdings, Herman then persuaded the company to lend her $9 million to purchase its own Long Island real estate offices.
And in 2003, Herman expanded her empire into New York City with the nearly $72 million purchase of the most prominent Manhattan real estate company, Douglas Elliman (again convincing Prudential to finance the deal).
“If you don't ask, you don't know,” Herman says. “And the worst that can ever happen is someone says no.”
Direct download: FP239_Dottie_Herman.mp3
Category:general -- posted at: 2:47am AEST
Thu, 21 February 2019
238: Juggling Multiple Projects and Knowing When to Step Away, With Grasshopper Founder David Hauser
David Hauser’s life changed forever the moment he taught himself how to code.
Like so many other nascent entrepreneurs, the power of computer programming set him on a lifelong path as a tinkerer, always fine-tuning and building in an effort to shape his and others’ futures.
In much the same way Hauser learned how to code, his entire entrepreneurial journey has been one of unrelenting trial and error, involving a mix of success, failure, and personal and professional evolution. With the creation of tech companies like Grasshopper and Chargify, Hauser used his talents and curiosity to shape his own destiny, and make a splash in the startup world.
Now, in his latest endeavor, he’s directed that very sense of experimentation to the field of health and fitness, with an upcoming book documenting his extensive adventures in improving his own physical well-being.
But it all started with a few lines of code that enabled him to pursue a nontraditional professional life.
“I always worked for myself since before high school,” Hauser says. “I never had a traditional job.”
In the late 1990s, the internet was gaining unstoppable momentum, and as websites started to become viable means of doing business, the demand for web designers and ad creators increased dramatically. This shift granted new opportunities to clever teens on the cutting edge of new technology who wanted to make a few bucks (and sometimes much, much more) from the comfort of their childhood bedrooms.
Hauser, who has no formal tech training, was one of these teens, swiftly making his way into the world of banner ad management and creating his own company WebAds360.
“From there, I started grabbing onto different things, learning different technologies, working with other people,” he says. “But it all started with web design.”
Before graduating college, he founded a second company, called ReturnPath, to help businesses that used permission-based email lists to keep their addresses up to date as subscribers graduated college or changed jobs.
Being a teenage entrepreneur in the late 1990s and early 2000s presented some major limitations, however. For one, what phone number were prospective clients supposed to call?
Cell phones of the time were still extremely basic and lacking features like putting a caller on hold or setting up a conference call. Meanwhile, home landlines might be answered by baffled family members. Neither option exactly screamed professionalism. It wasn’t just a problem for young people working at home, either, as lots of scrappy new entrepreneurs were lacking dedicated business phones.
So when the born and raised New Yorker headed off to Babson College in Massachusetts, and met Siamak Taghaddos, another entrepreneur with a similar problem, they put their heads together to pursue a solution.
Leaping Toward Success
“It started with a really simple idea,” Hauser says.
All they wanted was a way for tiny companies, startups, and solopreneurs to have the phone presence of a large, established company. And when neither he nor Taghaddos could find an existing solution to their problem, they did what so many successful entrepreneurs end up doing. They built their own solution.
Because they were only out to solve a problem for their existing businesses, Hauser admits they didn’t spend a lot of time on research or planning.
“It wasn’t well-researched necessarily, beyond the fact that we knew we had a problem, and we thought that we could solve it,” Hauser says.
During the process of creating the solution to their own problem, they realized that they were really onto something. That maybe this was going to be much bigger than a new tool for their own tool belts.
And because he and Taghaddos had their fingers in a lot of pies, and the money flowing in from their existing projects was enough to fund their new endeavor, they never needed to request outside funding.
In 2003, the pair officially launched Grasshopper, a service that enabled small businesses to present themselves like big businesses using just a cell phone, complete with extensions, customizable greetings, and simultaneous call handling.
Before long, Hauser shut down all of his other businesses, including WebAds360, and decided to focus entirely on the management and growth of Grasshopper.
And business boomed.
Small businesses and startups flocked to the service, delighted that it enabled them to operate with the professionalism of a well-established corporation. The company continued to grow for the next six years, when Hauser decided it was time to relinquish his role of CTO.
“I was always relatively technical,” he says. “But I am definitely not a top programmer, and as we really started to build out the company, it was clear that we needed to have better leadership from a technical perspective, and I could apply my talents better elsewhere.”
So, Hauser moved through another phase in his evolution as an entrepreneur and broadened his scope.
“Rather than being just focused on the technology side, I spent a lot more time in company culture, HR, hiring, process, goals and how we implemented those,” he says. “I shifted my focus.”
And as he stepped back, looking at Grasshopper from all angles, he saw possibility everywhere.
Trial and Error
Even though Grasshopper was a big success, Hauser’s head was bursting with new ideas and new problems to be solved.
In 2009, he developed Chargify for streamlined recurring billing. Then in 2010, he created PackageFox, a way to secure guaranteed refunds from late or lost packages shipped through FedEx or UPS. And in 2011, he launched PopSurvey, a graphical survey creator.
These are just a few of the self-funded side businesses born out of Grasshopper, and Hauser says there are many more that aren’t resume-worthy or that never saw the light of day.
“Those are probably just the ones that became something,” he says. “There are tons of others that failed and never really got very far, or failed horribly bad and we lost a lot of money.”
PopSurvey eventually fizzled out, overcome by competitors. PackageFox was an opportunity for Hauser to learn more about automation, but he eventually sold it off to someone in the space who could make better use of it. Hauser kept Chargify longer than either of the other two, but recently sold it, as well.
And while Hauser learned much during this time of exploration and creation, he admits that it created a lot of tension within his team at Grasshopper.
“We thought maybe we couldn’t keep growing Grasshopper, and we started all these things, and wasted a tremendous amount of time and money, but more importantly distracted ourselves—and even worse, probably, distracted the team—from the thing that was growing well. We could have just doubled down,” he says. “The success would have been much better than if we had wasted all that time, but that was the blind spot we had, and luckily we realized it.”
Hauser says that internal blind spots are some of the most difficult challenges that founders face. While an entrepreneur is wrapped up in the excitement of a new creation, he says it can be nearly impossible to determine impartially whether or not that is the best possible use of time.
“We’re overly invested in something, and we have that blind spot to maybe this isn’t the right thing to be working on right now,” he says.
But whether by choice or by force, the decision to take the left fork instead of the right is eventually made.
“I think sometimes it happens naturally. That progression just happens and you kind of see it,” he says. The problem is that sometimes it takes too long, and we over-invest in something that’s not productive, taking time away from something that has a much brighter future.
And while he is thankful that the ultimate effect this period of distraction had on Grasshopper was minimal, he would have done things differently given the opportunity.
“Looking back on it, it was not the best choice,” he says. “We should have focused on Grasshopper and grown Grasshopper.”
But despite any amount of distraction, Grasshopper grew and grew until the company was raking in $30 million in annual revenue. Before long, the success of Grasshopper drew the attention of hungry eyes, and the acquisition calls started pouring in.
Sales and Farewells
“When we started the company, we had no exit plan,” Hauser says. “Our goal was to build a company we loved being at and loved doing what we were doing. That was it.”
So when the first of the interested buyers knocked, Hauser turned them away empty-handed.
But as Grasshopper was a privately funded company, without the limitations placed on it by investors and capital, interested buyers were not to be discouraged. Eventually, Citrix, a multinational software company, made them an offer that they couldn’t ignore.
Citrix said that Grasshopper could retain their brand name, keep the team together and continue growing the company.
Over the course of a year, Citrix worked with Hauser and Taghaddos until they recognized that this proposal was a great fit for everyone involved. So they decided to sign on the dotted line.
As soon as the sale was finalized in 2015, both Hauser and Taghaddos bid their greatest success farewell, something Hauser describes as being “very emotionally difficult” but “best for both the company and Citrix.”
He trusted the management team to keep steering the ship in the right direction, and with Citrix’s new ideas for growth and strategy, he knew the business was in good hands. Neither he nor his partner were interested in sticking around for “two more positions for highly paid executives with titles that are kind of meaningless in a big public company.”
While he knew he had made the right decision, Hauser was rocked by the impact of his choice.
“All of a sudden, your email address changes, your phone number, your identity,” he says. “For 12 years, I was the guy involved in Grasshopper, and I ran Grasshopper. That’s who I identified with and people identified me with, and that just changed overnight.”
For a year after stepping away from Grasshopper, he continued with Chargify, but in July 2016, he sold that business, too.
With a clean slate, Hauser stepped into his next phase of evolution.
He explains that the core purpose of Grasshopper was to empower entrepreneurs to succeed. Now, he’s just hopped into a larger field.
“After a year, I came back to and found my core purpose,” he says, “and that’s empowering others.”
The Pursuit of Health
It’s been two years since Hauser’s life changed with the sale of his two most successful brands, and he spent the latter half of that time on an exciting new project: himself.
“I really wanted to change my life, and that included changing my exercise and diet, and I went from doing extreme endurance sports to practicing yoga six days a week,” he says. “Like massive change.”
In pursuit of this change, he also took just about every test imaginable—blood tests, stool tests, sleep tests, DNA tests and more. All in the pursuit of a healthier life.
And now he is ready to share what he has learned.
Thirty pounds lighter, Hauser is releasing a book in 2019 called Evolve: Optimize Your Life, Body and Mind. In it, he busts myths around fad dieting, trendy workouts, and quick fixes, sharing instead the methodology he used to transform his own life.
He also tackles many of the health sacrifices entrepreneurs make while chasing lofty goals. And despite all the changes he tried in his own life, he isn’t necessarily an advocate of massive life shifts or hours spent in the gym. He believes that often the little choices can make the most impact.
“It’s always easier to work an extra hour past midnight because no one is bothering you, right?” he says. “It’s easy to pick up the phone and call for pizza, because you know you get that instant boost and gratification and can continue working for an extra hour. But I think, at the end of the day, what I care about is output and productivity, and I don’t think there is very much value in that extra hour of work when it is low productivity and low value, and it is just work for work’s sake.”
Through his book, Hauser hopes to open the eyes of founders and non-founders alike to the power they have over their own lives and the small adjustments they can make that will bring huge impact.
“The idea with the book is allowing people to understand that their life is a self-experiment and doing little things like maybe just buying a new pillow for your bed…could have massive gains,” he says. “Each thing in your life is an experiment, because you’re different from everyone else.”
Once again, just as he did as a teenager learning to code, Hauser is relying on the power of trial and error—how the slightest adjustment, addition, or subtraction can make a big difference. He is, yet again, learning to crack the code, and yet again, hopes it can change lives.
David Hauser’s Tips For Living A Healthier Life
Since founding, building and selling Grasshopper, David Hauser has invested much of his time in pursuit of a healthier life. In 2019, he is releasing a book on the subject, “Evolve: Optimize Your Life, Body and Mind,” and these are just a few of the tips held inside for entrepreneurs pursuing a healthier lifestyle. For more information on the upcoming book, and a free chapter on the impacts of coffee, visit www.evolvebook.com.
“I am a huge believer in routine,” Hauser says. “If you talk to the most successful people in the world, most of them will tell you routine is very important.”
He is such a strong believer in routine that, even when he doesn’t plan to work out, he still goes to the gym because it’s on his schedule. By developing a routine that allows for more movement, more stability, and more sleep, he thinks entrepreneurs can improve their lives—as well as their businesses—in enormous ways.
“As founders, understanding our sleep patterns—improving our sleep patterns—I think has tremendous effects and gains on our productivity the next day, the next week, the next year that we don’t realize,” Hauser says.
By making more time for sleep, and being unwilling to compromise that time for a little extra work at the end of the day, he believes that entrepreneurs will actually be far more productive. Entering into each new day refreshed improves mood, interaction, and problem solving—all areas that are vital for success.
“Life is a self-experiment and doing little things like maybe just buying a new pillow for your bed…could have massive gains,” Hauser says. “Each thing in your life is an experiment, because you’re different from everyone else.”
Even the smallest changes can make a massive impact, and what works for others may not necessarily be the best choice for you. By trying new ways to solving old, persistent problems, he believes people can make great impacts on their health, and what is more entrepreneurial than that?
Direct download: FP238_David_Hauser.mp3
Category:general -- posted at: 8:41am AEST
Wed, 13 February 2019
Jay Baer was born to be in business. As a seventh-generation entrepreneur, he always knew he’d start his own company one day.
Over the years, his ventures have run the gamut—from an early internet company to a design firm to his popular marketing consulting firm, Convince & Convert. His clients have included Hilton, Cisco, Nike, and Oracle, just to name a few.
And if that weren’t enough, Baer is a New York Times-bestselling author, with six books under his belt. His latest, Talk Triggers—co-authored by marketing expert Daniel Lemin—dives into the power of word-of-mouth marketing and how to use it in your own business.
What is a talk trigger? According to Baer, it’s a “strategic, operational choice that creates conversations.”
Take DoubleTree, for example. Their talk trigger is the warm chocolate chip cookie given to every guest who checks in. Baer and Lemin interviewed 1,000 DoubleTree customers for this book, and that’s just for one of the 30+ case studies you’ll find inside.
If you want to acquire customers faster and cheaper, listen in as Jay Baer shares his marketing know-how to help you identify your business’s talk trigger.
Direct download: FP237_Jay_Baer.mp3
Category:general -- posted at: 5:30am AEST
Wed, 6 February 2019
“I don’t think CEOs should be able to be CEOs if they can’t code,” says Grant Petty, founder and CEO of Blackmagic Design.
That’s a bold statement, but Petty is a bold guy. Working as an engineer in the television industry, he realized the technology was overpriced. So he started a company that cut costs and put power into the hands of creators.
“Really what I was doing was a protest against the way the TV industry was,” he says.
And soon, Petty began to challenge the status quo of business in general. He runs his company a little differently: There are no spreadsheets, very little planning, and to him, metrics hardly matter.
“In the Western world, business culture becomes so rigid and so inflexible,” he says. “If you’re a creative person, you can get destroyed by that because they don’t allow you to exist.”
Today, Blackmagic Design boasts nearly $300 million in annual revenue and is still 100% bootstrapped. Its technology is used by 80% of modern day feature films. We sat down with Petty to discuss what he’s learned about how to run a meaningful business in the face of opposition.
Direct download: FP236_Grant_Petty.mp3
Category:general -- posted at: 7:20am AEST
Thu, 31 January 2019
These days, Sabri Suby reigns supreme as the founder of King Kong, Australia’s fastest-growing digital marketing agency. But he’s come a long way since his first job, selling ink cartridges over the phone, which he describes as a “cold, hard slap to the face.”
“I sucked incredibly badly at doing that in the beginning,” he says.
Soon enough, thanks to mastering the art of sales and persuasion, he became the top producer in that role, went on to travel the world, and eventually, forged his path as an entrepreneur. For all of his companies, he realized he was asking the same fundamental question: “How do we get more customers?”
His obsession with answering that question has helped him perfect his selling skills and scale King Kong from zero to $10 million in annual revenue in just four years.
In his latest book, Sell Like Crazy, Suby reveals the selling system he’s created and honed over the years, including things like the Magic Lantern Technique and the Halo Strategy. He says he’s deployed this system in more than 167 different niches and markets—and it’s worked every time. With Sell Like Crazy, he shares the steps you need to take, regardless of what stage you’re in, to level up your business.
Direct download: FP235_Sabri_Suby.mp3
Category:general -- posted at: 9:34am AEST
Tue, 22 January 2019
From humble beginnings to fitness empire, Sweat CEO Tobi Pearce tells us what it takes to run a multimillion-dollar business and grow a powerful brand with a significant other.
At just 26, Tobi Pearce has accomplished a lot. He’s the CEO of Sweat, a fitness app that’s been downloaded 30 million times. He’s engaged to his business partner and Instagram fitness star Kayla Itsines. And together, they’re worth an estimated $63 million, according to Australian Financial Review.
But just a decade ago, Pearce was homeless and struggling to get by on $45 a week, something he revealed in an Instagram post in July 2017. “I am not posting this for sympathy and this is not a sob story,” he wrote. “I just thought it was time some of you got to know ‘me.’”
To get to know Pearce is to discover many unexpected facets. While he’s popular for his fitness empire, prior to all of that, he was a “nerd” who grew up in a small town in Australia and loved playing classical music. From what we’ve seen on social media, he can just as easily shred it on piano as he can in the gym. On his Facebook page, he posted a video of himself playing a complicated Chopin number, writing, “I used to be embarrassed to tell people I played piano as a kid because it wasn’t ‘cool’ or classical music made me a ‘nerd.’”
Today, Pearce has plenty to be proud of. In addition to his upcoming wedding to Itsines, TechCrunch reports that the couple’s fitness company is on track to bring in $77 million in revenue this year.
From Classical Music to Fitness Classes
Pearce began his foray into fitness when he started working as a personal trainer to pay his way through college. He and Itsines met at a gym and began dating around 2012. Eventually, the pair became business partners, too, with Pearce taking over the marketing side, helping to promote Itsines’ popular Bikini Body Guides ebooks and grow her Instagram account (today she has more than 10 million followers).
Not one to be easily satisfied, Pearce then set his sights on expanding the business “to kind of shake up the industry.” That’s when the Sweat platform was born.
“My whole career and this particular field has always been about trying to push boundaries and kind of see how far we can move the dial and how big we can build things,” he says.
Originally dubbed “Sweat With Kayla,” the Sweat app provides workout videos, meal plans, and progress-tracking tools to its subscribers, for $19.99 a month or $119.94 a year. It targets millennial women with programs from bikini body to post-pregnancy workouts and boasts well over a million monthly active users.
The Appeal of an App-Based Business
Moving from ebooks to a mobile app, what made Pearce choose a new platform for Sweat? As he tells Foundr, there were three main reasons:
First, he wanted a better user experience. Originally, Itsines’ workouts were being shared through ebooks—not a very interactive platform. Pearce wanted a way to have more control over the user experience, including being able to gather user data to improve the product.
Second, he wanted to meet the needs of millennials. Most of Sweat’s customers are in that age group, so Pearce knew that meant the content needed to be mobile-friendly.
Finally, he wanted to be able to scale. To be able to make a real impact on the health and fitness industry, internationally, Pearce knew Sweat needed to switch business models.
“The big move was, yeah sure, from ebooks and a website to an app,” he explains. “But it was also a huge migration from a single-purchase service into a subscription business. And subscription business economics are completely and fundamentally different to that of a traditional ecommerce business.”
Combating Churn With an Engaged Community
As with any subscription business, churn is always a concern. One way to combat the tendency for members to cancel their subscriptions is to cultivate an engaged community. For Pearce, this is a no-brainer: He’s seen how it works from his personal training days.
When he was a personal trainer, he often picked up on the social habits of the people he was training. At 8:30 a.m., for example, a few women attended a 30-minute class with Pearce, while another group of women had coffee together downstairs awaiting their 9 a.m. slot. Once 9 rolled around, the groups would exchange spots, and by 9:30, when everyone was finished with training, they’d all go to the beach together.
“Fitness actually brings people together,” Pearce says.
But how can you recreate the social aspect of in-person fitness classes in a mobile app? The Sweat team knows people feel their best right after they’ve exercised, so within the app, users are prompted to invite their friends once they’ve finished a workout. They can even share their trophies and achievements, as part of what Sweat calls “social currency.”
Beyond the friend-invite feature, Sweat has a community forum where members can share stories, find advice, and get motivated.
“Not seeing much progress :( starting to panic,” wrote one bride-to-be on the Motivation & Encouragement forum.
“There is such a difference between the two photos,” replied another member. “You’re definitely making progress so keep up the good work!”
“There's all these different stories,” Pearce says of the forums. “But there's hundreds of thousands of women that can connect and relate with one another, and that really brings them together.”
On Chasing Growth Without Sacrificing Quality
While Pearce is aiming for growth, he’s not willing to do it at the cost of top quality and a strong brand. Sweat’s trainers, for instance, are carefully curated.
“We're not really looking to have like a hundred or a thousand different trainers and programs,” Pearce says. “We're kind of looking to have best in house and best in class.”
A prime example of this is Kelsey Wells, who joined the Sweat team over a year ago and leads the weight training and post-pregnancy programs. Beyond her finesse in the gym, she’s excelling on Instagram with 1.4 million followers. Her brand growth and depth have impressed Pearce, who says, “We'd much rather work with 10 people like her in their own specific categories than a thousand people that are just generalists.”
With a team of talented trainers who are also Instagram rockstars, does Sweat have aspirations of acquiring influencers abroad to boost international growth? “There's definitely a potential for that,” Pearce says.
How a Fitness Power Couple Finds Work-Life Balance
Google “Tobi Pearce” and you’ll find plenty of headlines referring to him as “fiancé of Kayla Itsines.” From the start, he’s been comfortable doing the behind-the-scenes work while Itsines steps into the spotlight for the Sweat brand. As soon-to-be spouses and current business partners, how do they strike a healthy balance between work and personal life?
“It has its testing moments, that's for sure,” says Pearce, adding that he’s obsessed with the business aspects while Itsines loves handling content creation and community interaction.
“She’s able to switch off,” he says of his fiancée.
Pearce, on the other hand, not so much. “I've always been probably a little bit too interested in ,” he says. “If I'm not talking about it, I'll be reading about it. If I'm not reading about it, I'll be listening to something about it or learning one way or another.”
Pumping Up Your Personal Brand
In recent years, a movement to build your “personal brand” apart from your company or product brand has taken hold of the entrepreneurial world. Big names like Gary Vaynerchuk and Neil Patel come to mind; both social media powerhouses use their personal brands to funnel clients into their consulting agencies.
Sweat has a similar story. It began as Itsines’ personal brand, which Pearce helped grow into the formidable Instagram presence it is today. Recently, Forbes named Itsines as the top social media influencer in fitness. Many of her faithful fans have followed her to the Sweat app, too, where she leads high-intensity workouts based on her Bikini Body Guides.
So what’s the secret to building a powerful personal brand? “Content and messaging are really king,” Pearce says. That means content that is high quality and messaging that creates interest.
“There's so much crap on social media,” he adds.
In the fitness sphere, he says it’s more than just looking good and posing for the camera. You need to create content in an intimate and authentic way. Just take a look at @kayla_itsines on Instagram. Instead of polished, picture-perfect content, it’s a mixture of motivational quotes, funny memes, before-and-after praise for her clients, and of course, workout videos—all with conversational captions where Itsines’ personality shines through.
While Pearce is hesitant to give a one-size-fits-all strategy for growing your Instagram—”Every industry is different,” he warns—there is one Instagram tip he recommends for fitness brands: lay off the endorsements.
“It's all well and good to sell a product or do endorsements, sure,” Pearce says. “But if that becomes everything that you do, it really becomes a bane of your existence and it's actually quite saturating for your personal brand. It's impossible for you to maintain credibility and authenticity as a brand if every second post that you do is talking about a new deal that you've done.”
Instead, says Pearce, focus on what you’re good at. Let’s bring Gary Vee back into the discussion. Take a look at his social media accounts. How many times does he mention his agency?
“I don't think I've ever actually seen him do that,” Pearce says. “The point that I'm making there is that if you do have a product, it's very often what you're trying to do is sell yourself and sell the opportunity, sell the dream. You're not really actually trying to sell the product itself because telling people to buy stuff is irritating.”
The Sweat brand steers clear of hard sells. That’s no small feat in an industry that’s always pushing guarantees of six-pack abs, a celebrity body, or a nice rear-end. “We would never, ever do that,” Pearce says of his company, “because reality is that it instills the wrong cycle of mindset in consumers. It predicates the wrong perceived mindset before consuming a product and that only actually sets up consumers for failure.”
How to Sell Without Selling
If people hate being sold to, how do you get them to buy? Sweat focuses on the benefits, not the features. For instance, instead of promising you amazing abs, Sweat’s messaging would tell you how you’re going to feel more confident and develop better relationships by getting healthy with its app.
“The best car salespeople are the ones who actually don't try to sell you anything, but they make you feel like you really want to buy the product,” Pearce explains. “They're telling you why this car's going to be perfect for your family. … They're not telling you that it's got 19-inch rims and blah, blah, blah.”
For Sweat’s Instagram account, Pearce focuses on posting educational, credible content that adds value: healthy eating tips, user-generated content, and motivational quotes, with a few posts highlighting the Sweat app sprinkled in.
“It pitches us as industry experts—which we rightfully are—but then it makes people turn to us when they do want to spend their money on a product that's actually going to help to solve these problems in their life, rather than going for the one that just says six-pack abs, because no one actually believes that crap.”
And Pearce doesn’t get fixated on the one-off purchases; he’s looking to create long-term users and repeat buyers, which is something the Sweat platform is built to nurture. “They develop friendships with other members of our product and that builds our community.”
Working Out What’s Next
For the next year or two, Sweat will be focusing on reducing churn and improving the product, namely, getting more quality content and keeping users engaged.
Long-term, though, Pearce hints at something more. He says there are three big pillars in the fitness industry: facilities (think studios and gyms), trainers and therapists, and content. “We obviously kind of only play in the content spectrum of that at the moment,” he says. “I think in the longer term, we'll probably, hopefully, get a chance to play in some of the other areas as well.”
Direct download: FP234_Tobi_Pearce.mp3
Category:general -- posted at: 8:53pm AEST
Wed, 16 January 2019
Steve was a guest of StartCon, Australia’s largest startup and growth conference. It was held over two days at Randwick Racecourse in Sydney on Nov. 30 and Dec. 1.
One For The Books
The story of Booktopia, ‘Australia’s favorite bookstore,’ and how they’re conquering the competition—even Amazon.
Once upon a time, a programmer who got his start with IBM was given an enchanted opportunity to create a magical bookstore that would one day battle powerful giants. The magical power? With just a click of a button, Australians could have brand new books delivered within days to their doorsteps.
And just like in most fairy tales, our hero and his friends stumbled upon the opportunity entirely by accident. “We literally fell into it,” says Steve Traurig.
Traurig and his two brothers-in-law, Tony and Simon Nash, were running an online marketing consulting business when Angus & Robertson, the 130-year-old Australian bookseller, approached them and asked if they would be interested in getting into the book business. The pitch was a white label book retail website, meaning that everything from the website creation to the distribution would be handled by Angus & Robertson. All Traurig and company had to do was add their personal flair.
But Booktopia, the company that arose from that project, would end up becoming something much bigger. Nearly 15 years after Traurig’s brother-in-law said he “wouldn’t mind giving that book thing a bit of a go,” Booktopia has served over 4.2 million Australians and is on track to bring in $115 million this year, making it the market leader in online book sales. Oh, and they now own Angus & Robertson.
The journey from their very first book sale to squaring off against Amazon for online book supremacy in Australia was a chess game of strategic move after strategic move. Thanks to some shrewd decisions, including focusing on customer interaction and building their own ecommerce and fulfillment systems, Booktopia’s well on its way to happily ever after.
A White Label Bookshop, Transformed
In 2004, with only $10 a day to put toward advertising their new business, Traurig and the Nash brothers dove headfirst into the book world.
“When we first started, we owned nothing,” Traurig says.
When Booktopia first launched, Angus & Robertson created their website, managed their distribution and owned the brand. Traurig and his brothers-in-law were responsible only for marketing, so they created a few Google AdWords campaigns (one of which is still running today) and waited for their first books to sell. By the end of the first year, they were doing $100,000 in business a month.
This worked beautifully for the trio and for Booktopia for three years, but in 2007, they had to confront the reality that what they were building, with revenue ever increasing, could all go away in an instant. They also realized that the fulfillment company was neither able to keep up with the growth they were experiencing, nor were they able to meet the expectations Traurig held.
“We decided we had to go out on our own, because we were actually building a company of value,” he says, “and we realized that if you want to have something of value, you have to do it yourself.”
Things were going well, and they realized that in the current setup, they didn’t really own anything of substance, should they ever want to sell.
So they broke away from the fulfillment company and set out to turn Booktopia into something of their own. They set up their first warehouse, hired a warehouse manager, bought some shelves off eBay, and got to work building their own core systems.
“Dealing with those sorts of numbers in databases, in the website, in the front end, in the backend, etc., the scale is beyond almost any other retail environment, and we had to make it all work,” he says. “We built the systems ourselves and that takes particular commitment and skill.”
With all of the changes taking place, it would have been reasonable to see a marked customer drop off. Before the transfer, they did about 130 orders a day, but that number only dropped to about 110 a day, even after everything from their systems to their website changed.
Through it all, the Booktopia customers remained loyal. In fact, the focus Booktopia places on the customer experience would come to define their brand.
“It’s about the customer obsession,” Traurig says. “About putting yourself in the place of the customer.”
When Traurig and his brothers took on the fulfillment side of the business, they began with only a single book on their physical shelves, but knew that building up their stock was the only way to give their customers the best experience.
Instead of the long wait from the moment an order was placed until a supplier could deliver the order and then ship it off, all they had to do once they built up stock was grab an item from the shelf the moment the order came in and send it along.
“That was essentially a business-changing experience, because the feedback we got from the customer was instantaneous,” he says.
Customers responded with glee that their books arrived so quickly, inspiring them to remain loyal and recommend the bookseller to friends. Because of this organic growth, Booktopia has never needed to take on investors.
Even without investors, they have consistently outmatched the competition and met their sales goals. In fact, they made the BRW Fast 100, Financial Review’s list of the fastest growing Australian brands, seven times between 2009 and 2016, the only company to do so.
Traurig says that they have also built strong relationships with their banks, something he describes as a critical part of doing business. This gives them additional wiggle room if necessary, staving off a need for traditional investors.
“A lot of startups, a lot of founders, think they immediately need to go out and grab someone else’s money and give away bits of the company,” he says. “There’s definitely merit in doing that for certain types of models. We chose to actually build a solid business organically and build it off the back of our customers and customer service.”
And this approach has carried them through what could have been a business-ending battle.
Squaring Off Against a Giant
When Amazon announced that it would be launching in full in Australia at the end of 2017, Traurig wasn’t nervous. The institutions they worked with, however, had concerns.
The gargantuan online retailer had generated $136 billion in revenue the year before, with all signs pointing to continued growth. So how was “Australia’s local bookstore” going to keep up?
Well, according to Traurig, they had been keeping an eye on the behemoth from the very beginning and hadn’t let its success deter them.
“From our point of view, when we started Booktopia, Amazon was shipping $100 million worth of books into Australia already, and we didn’t worry about that,” he says. “We were fearless.”
They focused instead on their own business, and the most important asset: the customers.
Due to its global nature and size, Amazon has an impersonal quality to it that Traurig says Booktopia always vowed to counter. For example, Booktopia’s website has the office’s physical address, email, and phone number on every single page, not only allowing but encouraging customers to reach out and share praise, complaints, and questions instantaneously. They wanted to be accessible and feel like a part of the community.
To keep up with the emails and phone calls, they quickly hired their first customer service staff, a cheerful individual who still answers the questions of Booktopia customers today.
Traurig says they take customer feedback extremely seriously and use it to inform their continued development. With a 20-person development team on the case, he says that Booktopia is always in pursuit of the best possible user experience, a quest that can only be completed through regular, honest feedback.
Traurig says that this approach to customer service has been the key to keeping up with the competition.
“All throughout our history, Amazon has been this massive company…but we were just focused on getting product to our customers.”
And if winning 2016’s National Book Retailer of the Year and 2017’s National Bookstore of the Year at the Australian Book Industry Awards is any indication, Booktopia’s approach is working.
The Next Page
Today, Booktopia has over 6 million products available on their website with over 150,000 of those titles in stock in a 140,000 square-foot distribution center. They also acquired Angus & Robertson, along with its online store Bookworld, in 2015.
“It’s a 130-year-old company that had a very, very good chance of disappearing completely,” Traurig says. “So for us, it was also an honor.” The company currently runs as its own business unit with independent marketing, branding and customer base.
The founders also have high hopes for the company’s automated systems and distribution center. To demonstrate their capabilities, Booktopia acquired an online camera and optics company. In doing so, Traurig and his partners are hoping to show that their systems can handle more than a single type of product.
So what’s next for Australia’s favorite bookstore?
Although they ventured down the path of going public in 2016, they pulled the IPO just before launch, choosing to remain a private company. With Amazon looming, and after watching several other online companies attempt to go public and fail spectacularly, they decided to keep things as they were.
While Traurig has a “never say never” mindset toward another try at going public, there are no plans to move in that direction for now.
“Our customers have been our investors,” Traurig says. “What we’ve always chosen to do is delight the customer.”
And in true fairytale fashion, delight them they will.
Steve Traurig’s Tips on Building a Sellable Company
While founders are still scaling the challenging mountains that come with launching a business, it might seem silly to think 500 steps ahead to the day they will be shaking hands on the sale of the company. But Steve Traurig believes building a company that will someday attract a buyer starts on day one, so he offered three tips to creating a company that will sell.
“One of the things we’ve always done is make sure that our financials, our financial reporting and our accounting are top notch,” he says. As you might expect, well-kept books have always been a priority at Booktopia. From the very beginning, they sought financial advice when necessary and kept all of their books in perfect order. And because neither he nor his other co-founders had strength in bookkeeping, they always made it a number one priority to hire someone skilled.
“It may just all look like a whole bunch of receipts and a pain the neck…but aim to set up solid financial management right at the beginning.”
In the beginning, Booktopia was a white label website, but when it started to flourish, Traurig and his partners realized they needed to make some changes. “If we wanted to sell it,” he says, “we had nothing to sell,” Traurig says. So they decided to build all of their own core systems to create something that would be attractive to eventual buyers. Traurig encourages founders to use as many original systems as possible and innovate wherever feasible. In doing so, the value of the company you may someday look to sell increases significantly.
Now that you’ve created something original, it’s time to show what it can do! Perfect its intended capabilities and then push its limits. This is what Traurig says they are currently doing at Booktopia with their distribution systems. Because they created the automation used in the center, they decided to demonstrate to potential buyers that it could handle more than one product at a time, leading them to purchase a camera company. The only thing better than an innovative creation is one that can be used in more than one way. Traurig says that demonstrating this is a great way to build a sellable company.
Direct download: FP233_Steve_Traurig.mp3
Category:general -- posted at: 11:43pm AEST
Fri, 11 January 2019
232: Create a Company Culture That’s Healthy and Profitable, With David Heinemeier Hansson of Basecamp
Eighteen years ago, David Heinemeier Hansson was a college student sitting in his little apartment in Copenhagen when he stumbled across a blog post by 37signals (which would later become Basecamp), a Chicago-based design company he had long admired.
In the post, co-founder Jason Fried posted a question on some aspect of programming. Hansson knew the answer, so he contacted Fried. Several emails later, Fried was asking Hansson to work with him.
“Jason decided it was easier just to hire me than to learn how to program,” Hansson says, “and that's how we started working together.”
That was the beginning of a now-legendary tech startup team, and an illustrious career for Hansson. In Hansson’s early days at Basecamp, he famously created Ruby on Rails, an open-source web development framework once used by Twitter, and still in use by GitHub, Shopify, and many more.
We were excited to talk shop with Hansson (often known as DHH) because, in an industry dominated by breakneck Silicon Valley culture, Basecamp stands out in many ways: It’s been profitable every year since its inception in 1999, it doesn’t chase growth, and it doesn’t even set numerical goals.
With their latest book, It Doesn’t Have to Be Crazy at Work, Hansson and Fried are hoping to challenge the prevailing narrative about chaotic work culture by sharing the unique way they run their company.
This is Part 2 of our Basecamp co-founder interviews. To hear Part 1, check out our podcast interview with Basecamp co-founder Jason Fried.
Direct download: FP232_David_Heinemeier_Hansson.mp3
Category:general -- posted at: 10:17am AEST
Wed, 2 January 2019
Ditching Growth and Setting Up Camp
How Jason Fried and David Heinemeier Hansson turned their backs on lofty goals and created a profitable tech company quite unlike any other.
Growth is exciting. Sales boosts, climbing revenue, and eager investors are all signs of a happy, healthy company. Right?
Basecamp founders Jason Fried and David Heinemeier Hansson beg to differ. While they rejoice in revenue and profit as much as the next set of tech company founders, they define success a little differently.
Instead of chasing arbitrary growth goals and deadlines, they simply aspire to do their very best work day in and day out.
Instead of always expanding their line of software products, they double down to perfect the one they already have.
Instead of scrambling to hire more people when revenue is climbing, they enact a hiring freeze so as to not lose sight of their mission.
Critics might call their approach too timid. Others call them brilliant. Fried and Hansson don’t care much either way. They’ve followed the startup road less traveled and have pitched sturdy camp at the end of it—all while remaining profitable and highly respected.
Today, Basecamp is one of the leading project management and team communications tools on the market, while boasting remarkable employee satisfaction. The duo also have a new book out explaining their unique take on startups and how they’ve found success.
Setting Up Camp
The origins of Basecamp date back to 1999, when Fried started 37Signals as a web design company. It’s since transitioned to a web development company, specializing in project management and team communication software, and became Basecamp in 2014.
The transition to web development happened in the early 2000s, when young Danish developer Hansson responded to Fried’s blog query about PHP. Hansson had been a fan of 37Signals for years and jumped at the chance to help out. After a handful of emails, Fried decided it was easier to hire Hansson as a programmer than learn to code himself.
The firm created Basecamp’s flagship software product in 2004 and drummed up 45 customers in its first year. The idea was simple, but met an important need in the modern workplace: It allowed for real-time, remote communication to help teams identify what needs to be done (and when) and work together smoothly and efficiently. In the following years, the pair saw their product achieve steady growth, which also caught the eye of venture capital and private equity firms.
Even so, working with investors never made sense to Fried and Hansson. They didn't want to sell any control of Basecamp or be forced to exit their business on someone else’s timeline. But they did need money to continue developing Basecamp and its products.
In 2006, the pair was approached by Jeff Bezos himself. In exchange for a yearly dividend payout (but without making any other demands or staking any other claims to the company), Bezos purchased a piece of ownership and became a member of Basecamp, LLC. This arrangement worked well for Fried and Hansson as they didn’t have to sell control of their business to raise money, and the purchase was a lucrative investment for Bezos.
“[After Bezos’s investment], the appeal of selling the company subsided and allowed us to pursue our mission to build a wonderful company to work in for the long term,” Hansson said.
Fried and Hansson maintain a fiscal relationship with Bezos, but that’s about it in terms of what they’ve taken from the richest man in the world. As for perspectives on growth, productivity, and culture, Basecamp has blazed a trail of its own.
It Doesn’t Have to Be Crazy at Work
Or does it? Fried and Hansson’s latest book introduces a new perspective on the modern-day entrepreneurial hustle. They published this book to “[send] out an alternative beacon,” Hansson says.
The cover of It Doesn’t Have to Be Crazy at Work features a big red “X” crossing out words like "packed schedules,” "80-hour weeks," and "overflowing inboxes."
Sadly, a lot of today’s business literature and role models celebrate crazy schedules, packed days, and little sleep. “[This has] been a predominant narrative for quite a long time,” Hansson says.
Pushing back on the norm, It Doesn’t Have to Be Crazy at Work argues that this kind of lifestyle isn’t healthy, sustainable, or necessary. “You can do great work in a normal eight-hour day and 40-hour week,” Fried says.
Basecamp’s culture and success is a testament to this ideal. The 20-year-old business has been profitable every single year since it started, and the company’s 50-plus employees work a totally normal schedule. “At Basecamp, it isn't crazy at work,” Hansson says. “Crazy at work should be an exception; it shouldn't be the norm, and certainly not be an aspiration.”
The (Mis)Guiding Principles of Goals and Growth
As of 2018, Basecamp has more than 100,000 companies utilizing its software. But unlike most tech companies, that number goal doesn’t dictate their work.
“We have no interest in building [our] company to a certain amount of dollars or size,” Fried says.
In Silicon Valley, businesses often feel the need to dominate industries and destroy the competition. Basecamp isn’t driven by those criteria, and they’re definitely not driven by constant growth or lofty goals. “We've always felt that we don't need to chase anything but profit and quality...and quality of life, for both our employees and customers,” Fried says.
To Fried and Hansson, it’s much more about running a sound, sustainable, profitable business. Instead of prioritizing OKRs or various other acronyms, they simply focus on doing the very best work they can every day.
“The idea that a goal should be driving you harder. ... I don't understand why that'd be,” Hansson says. “People forget that goals are figments of their imagination.”
He explained that as a primary indicator of what success should look like, goals are not helpful. They’re arbitrary measures of success or failure…and falling short of one can make you feel bad when you shouldn’t.
Moreover, goals are often determined by looking at others. “They become this death of enjoyment by comparison,” Hansson says.
Basecamp does set a few loose, top-level goals, such as “build a good product,” “create a great place to work,” and “treat customers with dignity, honesty and kindness.”
But what about specific metrics, like sales, retention rate, or customer success? “We can look at [those] numbers, like retention rate, renewal rate, etc., to see how well [Basecamp is] working,” Fried says. “But we don't have goals around those numbers.”
To measure the success of their product, the team simply uses it themselves. They actually use it more than any other company. By employing their own product and improving it every day, they’re able to better understand their customer experience. And when it works better for them, it works better for their customers.
“We judge our success by how we feel about our work, and the customer reaction and reviews,” Fried says. They ask themselves, “Are we proud of what we did today? Are we proud of the way we did it? And ultimately, do customers like the product?”
How Basecamp Approaches Success
Such a nebulous approach to growth and goals is sure to make employees feel adrift, right? One might think so, but the opposite is actually true for Basecamp employees, they say.
There are very few meetings at Basecamp, and that’s not just because they are a mostly remote workforce. The company does have an office in Chicago, but even those who live nearby only come in a few days a week.
“We’re a writing-heavy company,” Fried says. Instead of insisting on weekly stand-ups or organizing project check-ins, the pair encourages their employees to chronicle all updates, ideas, and thoughts. This gives employees a chance to ponder what they’ve read and formulate thoughtful responses—instead of presenting an immediate reply the way you’d expect in meetings and boardrooms.
This notion of slow, delayed communication inherently pushes back on live chat, an up-and-coming trend in today’s tech companies.
“The idea of chat as a primary means of communication inside of a company, I believe it to be a very toxic idea,” Fried says. He argues that outside of social communication and quick check-ins, keeping in touch with chat can cause a massive distraction for employees.
“I think that, right now, chat is why work is more hectic for more people,” Fried says.
Like they contend in It Doesn’t Have to Be Crazy at Work, Fried and Hansson don't expect, require, or support a culture that's “always on." They routinely monitor for “overwork,” and occasionally have to gently remind employees that late-night emails or mid-weekend product updates aren’t necessary. In fact, they’re frowned upon.
We don't reward late, hard overwork,” Fried says. “We’d rather reward someone who works normal hours and gets a lot done…someone who protects and manages their time. There’s no celebration of long hours here”
Basecamp hasn’t always been like this, though. Some of the values have been around since the beginning, but the company has spent the last 20 years constantly tweaking the way they work.
One major change Fried and Hansson have made is the way Basecamp gets projects done. The company used to work with absolutely no deadlines, then started implementing three-month work periods. Today, they work within six-week cycles.
The team doesn’t do anything they can’t complete in six weeks. When asked if that sort of deadline adds pressure, Hansson is quick to respond: “It could if you don't approach the idea of the budget as a tool. It’s there to shape your decisions and guide you. Budgets make it easier to say ‘no’ or ‘not right now.’”
Fried and Hansson are less interested and impressed by the results of work done with unlimited resources or timeframes. In the past, working with no deadlines left each project open-ended. It was harder for developers to say “no” or know when to stop working.
Each six-week time budget forces employees to make decisions and weigh tradeoffs. “That's what's enjoyable about product development,” Hansson says.
By implementing changes such as these, Fried and Hansson have noticed that Basecamp has become a calmer company. While the pair conducts employee audits twice a year, they mostly take the pulse of employee success and satisfaction by staying close to each team, which isn’t hard given the company only has 53 employees.
“We're constantly seeing [our employees’] work and talking to people,” Fried says. “We have a really good sense of how things are going. It’s pretty obvious when someone’s not doing well.”
How does their remote culture affect this? It doesn’t. The team has a few in-person outings each year—when they gather everyone in their Chicago office—but even those are spent “reconnecting and recharging social batteries,” as Hansson explains.
Basecamp’s culture is simply based on trust and harmony between words and actions.
When asked about the challenge of building a culture with a remote workforce, Hansson says, “[That is] based on a misconception of what culture actually is. Our definition is that culture is repeatable actions, what you actually do.”
Fried and Hansson do instill specific values and principles throughout the company, but Basecamp’s culture arises when they live up to those words. “Nothing transmits culture more than seeing actions, especially during hard times.”
He also believes that a remote workforce is better situated to building a strong culture because such culture is derived even more explicitly from the actions you actually take and the shared writings you commit, given there’s no office or in-person meetings to do the work for you.
The numbers behind Basecamp’s culture and employee satisfaction are off the charts. The industry average for employee turnover is about 18 months. Of the 53 employees currently at Basecamp, the average length of employment at Basecamp is 5.8 years. Eight employees have been there over 10 years, and almost half have been there over seven.
“Basecamp employees stick around a long time, even in traditionally high-churn positions,” Hansson says.
In the spirit of constraints, they’ve capped their headcount and are doubling down on good, effective work.
“We have no love for size,” Hansson says. “Big companies can’t solve small problems. The bigger they are, the more divorced and less able they are to relate [to customers]. More layers of management and indirection only harm empathy and kindness.”
Direct download: FP231_Jason_Fried.mp3
Category:general -- posted at: 9:41pm AEST