Digital Logistics: Ignore at Your Peril

In the digital world we study Tech Crunch and worship Lean Startup (often getting no further than the title which we misinterpret). Analog competitors are called dinosaurs, and we smugly believe history holds no lessons. The tech community believes it is pure innovation from top to bottom. We invent words for things analog business has been doing for years and reject the foundations on which our business is built. How many people even realize that the term “shipping code” is appropriated from the analog world? This willful ignorances is silly, wrong and brings with it peril.

Sun Tsu said “The line between disorder and order lies in logistics.” General Robert Barron, former Commandant of the Marine Corps famously said “Amateurs talk about tactics, professionals study logistics.” These aphorisms are as true in the digital age is in the analog world. Our tools and outputs are different but the way ideas are nurtured and turned into products- where they come from, who works on them and how, what happen after something is launched- is a logistical challenge.

Winning is all about logistics but when was the last time you heard a Unicorn founder say they were in the logistics business? In failing to recognize this many digital businesses- and non-digital businesses that need to compete digitally- fail to organize themselves to compete.

Generations of business school students studied logistics and its’ cousin, operations, using the quasi-novel The Goal about a troubled factory trying to overcome constraints to achieve amazing productivity and growth. As far as b-school textbooks go, this one is a page-turner. The Goal highlights the need to align the people of a business and the things they do to avoid bottlenecks, errors and market shifts. Smart logistics turn organize your people from a mob into a hive that hums with happy workers and customers.

Think of it this way:

  1. Tech companies run on ideas. Ideas come from somewhere- our imagination, consultants, team activities, customers, competitors… there is a never-ending pool of ideas. Without ideas we would have nothing to build. The best organizations start with a clear process to acquire and prioritize ideas. Do your workers have motivation and opportunity to learn and try new things? Do you have sufficient knowledge sharing? Do employees at all levels go to conferences or just your CXO? Sourcing the best raw ideas is no different than sourcing any raw material and is the essential first step in building a powerful digital factory.
  1. Ideas by themselves are worthless. Each factory has a receiving department responsible for taking in, sorting and distributing raw goods to where they do the most good. Great digital companies must have a parallel system for distributing ideas. Try rewarding every idea shared publicly; and reward everyone involved in turning an idea into a product no matter how small the contribution. Your organization will soon develop the neural pathways required to turn the best ideas into products.
  1. When a raw good (or idea) is sourced, factories have people who take actions to build the product you sell. In tech we call this area product development instead of operations because, well, just because. Digital businesses often make the mistake of starting here and thinking too literally. Developing a product involves more than writing code. You need architects to design systems, lawyers to do contracts, security, QA, PMs, engineering team leaders to guide staff developers and more. Each part of a product flows through these players like raw materials through a factory floor. Team members need to clearly know their role and how it fits into the context of a project, product and company. This clarity empowers everyone to recognize when things get off track, help each other when needed and feel connected and engaged. Define each role and make each employee the CEO of that job.
  1. Coca-Cola, Sysco Foodservice, Cintas Uniforms and other old world businesses have trucks and drivers that are in front of customers every day. Every time one of these drivers walks into a store they see how much product sold, which competitor has shelf space. They look the store manager in the eye. Digital businesses have hundreds of tools to gather customer insight but virtually everything we do is at arm’s reach. You need to think about how to get in front (literally in front) of customers. Do you have engineers embedded in your client teams? Is customer service given a real voice in all decisions? Does the community manager know how to turn a customer exchange into insight that informs the direction of the product? Do you have a mechanism for getting market insight back into the product loop? If you are not collecting and feeding customer insight back to sourcing, product development and distributions, your logistics are not creating the virtual cycle your digital business needs.

The common thread through all this is organizing people to succeed. When empowered, focused, and motivated for team success you win. Successful businesses, digital or otherwise, are collections of processes that turn ideas into products that delight customers, in ways that excite employees and reward shareholders. If your logistics stink, your Growth Hacker will be peddling buggy vaporware built by disinterested employees to a market visible only from a share space office.

Job Titles and Gender Bias

The tech world loves to talk. God we can talk. We can talk in 140 characters, Medium posts, whispers and Whispers, from conference stages and in blog comments. We talk to ourselves so much we’ve developed special vocabulary like a 6th grade clique. Secret signals that are utter nonsense to outsiders but make us feel special, apart, better. We’re all a bunch of starbelly sneetches. But the words we choose matter and sometimes they are bad for business.

Today I am going to focus on one specific term, job title really: Growth Hacker. I hate this term. Why do we need it? What new meaning does it convey? Line up the word “marketer” next to “growth hacker” and tell me the difference. Turns out there have been growth hackers growth hacking for hundreds of years. We call them marketers. Is this just a vocabulary update? No; it is a big deal. Vocabulary is nefarious. Seemingly innocuous word choices are freighted with meaning, perhaps unintended, perhaps not.

What comes to mind in the instant you think of the word “hacker”? I bet nine out of ten of you just thought of a man, probably young. Now what comes to mind when you think of the word “marketer”? The images are probably much more diverse. Psychologists talk about “Selective Perception” which is the tendency for expectations to affect how we view things. And according to research published in 2006 people form lasting impressions in 100 milliseconds. We do that by taking mental shortcuts rooted in biology, experience and perception.

Using Growth Hacker instead of Marketer in a job description creates expectations that affect outcomes. Think of it like customer signaling in a purchase funnel. The employee pool and the hiring team get subtle but consequential messages about the role when you give it one title or another. Marketing is one of the few functional areas where women have strong roots. This vocabulary shift undermines that strength. This is stupid.

Women make 85% of all consumer purchases including half of all products marketed to men, and have higher rates of engagement– including content creation and consumption- on every major social network except LinkedIn (Snapchat was not surveyed). But according to a widely discussed report from She-conomy, 91% of women say marketers don’t understand them. Companies that care about diversity, for business and moral reasons, must work harder to include women in marketing roles. This starts with how we talk about these roles.

We A/B test the hell out of email subject lines but we give far, far less scrutiny to the words we use ourselves everyday. This isn’t about political correctness or the first amendment. The words we use matter. They reflect a worldview, create perspective and give direction. Growth Hacker, like any business title, is free to give and use. But just because it is free doesn’t mean it is without cost.

Rethinking Goal Setting

Goal setting is a well-covered topic. Hundreds of books, thousands of posts; goal-setting consultants, conferences and committees.  Goal setting is a multi-billion dollar industry. It seems everyone believes in goal setting. Everyone except me.

I believe goal setting is one of those terms that is so overused that is’s lost it’s meaning; so ripe for misinterpretation as to be worthless. I am banishing it from my business vocabulary starting now. There are three reasons.

First, a goal is a result. The cumulation of action leading to specific outcome(s). Earning a college degree is a goal. Knitting a sweater is a goal. Achieve 100K MAU? Not a goal; it is a milestone. Unless of course you are capping yourself at 100k. Not likely.

Second, setting goalS means you are chasing more than one thing. I want 100K MAU and 80% retention and 10% monthly revenue growth. Great. Chances are a different person or team is now focused on each of these, and trust me they are at odds. Your organizational alignment just went out the window.

Third, goals are usually set periodically while business moves dynamically (or should). Early stage startups that set goals too early lock in their perspective. Obviously late stage startups and older companies should have a firm perspective on their market but even they get locked in and can miss opportunity.

So here’s my alternative. Set corporate standards, not goals. Standards are company-wide metrics that everyone is rated against. Let’s say you have 10% MAU growth, 80% retention and 99.5% crash-free quality. If your sales people are responsible for quality and retention they won’t yell about rushing new features before they are tested. Engineers responsible for acquisition? They’ll be more likely to focus on critical delivery instead of playing with the cool piece of tech no one is asking for.

Standards, shared by the entire organization, also are powerful reminders of corporate culture. They say what the company is all about. “We need to achieve”, not “My goal is”. They get people to work together and establish frameworks for decision-making. Standards help you break ties or avoid them altogether. Fewer conflicts, more empowerment. Now that’s a goal I can support🙂

 

Patent Reform Helps Plaintiffs, Too

Recently the good people at the Application Developers Alliance offered me a chance to guest blog. Rather than my usual focus on patent trolls I focused on how anyone who cares about a strong patent system- defendants and plaintiffs- should support reform. You can see the original post here, and sign up to be a member (it’s free!).

As the victim of a patent troll that ultimately cost me my small business, I am adamant about the need for patent reform. Most recently I wrote about the need for reform in the New York Business Journal.  Afterward I received emails and messages from small inventors, concerned that reform will hinder their efforts to win in court.

From a distance the legislation being considered looks “pro-defendant,” and the false rhetoric put out by trolls and their enablers is confusing. As a small inventor, I understand that changing the rules is scary. But in reality, the House and Senate reform bills are bad for trolls and good for every legitimate patent holder who wants to enforce their hard-earned patents.

The legislation in the House and Senate removes the incentives for frivolous lawsuits. The result will be lower litigation costs for everyone—troll victims and legitimate plaintiffs alike.

First, patent troll cases are clogging the courts making the road to justice longer for everyone. If you are a small inventor you’ll get in front of a judge or a jury much faster without the thousands of troll cases blocking your way.

Second, if you have a legitimate case you’ll be protected from the drag-it-out, drive-it-up tactics of deep-pocketed infringers. Defendants can use unlimited discovery and other motions just as easily as plaintiff trolls.

Third, these bills give you a clear shot at getting your patents confirmed. This is big for legitimate patent holders and terrifying for trolls. Patents that cover real innovation can be reviewed and upheld fast, clearing the way for settlements that make sense. Opponents of reform argue that fee-shifting and bonding provisions will harm small businesses. This is false—a lie told to scare small inventors into advocating against reform that will help improve the system for everyone. The reform bills in the House and Senate take somewhat different angles but agree the standard should be that fees can only be shifted if the case was not “objectively reasonable and substantially justified.” Trust me, no small business is wasting their money and time with a lawsuit so frivolous as to be considered unreasonable.  And there is no bonding provision or any requirement for plaintiffs to demonstrate their ability to pay cash before bringing a lawsuit. This is complete misinformation. These provisions will protect small plaintiffs, while changing the calculus for trolls bringing frivolous lawsuits.

The Innovation Act and the Protecting American Talent and Entrepreneurship (PATENT) Act, in the House and the Senate respectively, will rebalance the asymmetries in the patent system that allow trolls to exploit it, while protecting the rights of legitimate patent holders.  Both bills require greater specificity in complaints, modify discovery, protect end users, and make plaintiffs who bring frivolous lawsuits pay the legal fees of the prevailing party.

Most critically, the current system makes us all hugely vulnerable to troll attacks. Trolls don’t care that you own a patent. They don’t care about justice. They just care that defending yourself is more expensive than settling. Your patent won’t do you any good until you get it in front of a judge and jury. That can easily cost you more than a million dollars.

The result of legislative reforms will be a better functioning patent system for all businesses.  Trolls that assert weak patents are devaluing all patents, including legitimate patents held by inventors and small businesses. Companies that are frequent targets for patent trolls may ignore smaller legitimate licensors merely because they are lost in the deluge of frivolous license demands and lawsuits.  With fewer bad actors poisoning the system, inventors, startups, and all legitimate patent holders have faster access to justice at lower cost while being protected from frivolous suits brought by trolls.

Change can be scary but it is far, far less scary than the situation we all face today. The facts are clear: reform helps all legitimate patent holders and hurts trolls.  Plaintiffs and defendants should be united in this effort. No matter which side you’re on, reform makes us all winners.

Thinking about when

When I make more money  ______________

When the kids are older ______________

When we find that A player ______________

When the stress calms down  ______________

When I get through this year ______________

When we have more traction ______________

When you come around ______________

When I have more time ______________

When the quarter is over ______________

When I get through this crunch ______________

When we close that deal ______________

When I raise the round ______________

When my parents retire ______________

When I graduate ______________

When I’m sure  ______________

When I’m over her ______________

When we’re all together ______________

When the stars align ______________

When I am done ______________

When you are done thinking about what will happen when ______________

We spend forever thinking about what we’ll accomplish when. Imagine if we spent that time and energy accomplishing all we can accomplish now.

Remembering AOL, You Ungrateful Punks

Fruit flies live longer than human memory. It is in our nature to focus on the here and now, not the there and then. This is doubly so in the tech world. It is literally our job to create obsolescence. So it is easy to forget the importance of tech companies that have come before us. What a shame. We all grow from the seeds of harvests past.

The consumer internet as we know it was built on the back of a small handful of companies. Without question one of those is AOL. Simply put AOL was the way people around the world accessed the internet. At it’s peak, AOL had 27 million subscribers, dialing up to discover content, connect with friends, shop. It was as ubiquitous then as Facebook is now, probably more so. AOL’s 2000 merger with Time Warner was valued at $350B. In today’s dollars that is the equivalent of Comcast and Google combined. You can fit Uber’s latest paper valuation inside that actual deal 10 times.

AOL is now being acquired by Verizon for $4.4B. It will probably be chopped up for parts; AOL will go the way of the Roman Empire. A powerful legacy that is so complete it is easy to overlook. Sadly instead of an Irish wake there’ll be snark, lots of people will say it’s about time. Ungrateful punks. AOL turned hundreds of millions of people on to the web. The entire industry is the beneficiary of that success. Steve Case invested his billions in new generations of startups. Ted Leonsis financed the transformation of downtown DC. Now that’s a legacy.

We should spend less time on the arbitrary unicorn club and remember businesses that were transformational for more than their arbitrary, ephemeral paper valuation. Tonight I am going to drink good scotch and rest my glass on my vintage AOL CD coasters. Thanks, AOL. We owe you.

 

Is New York Dead? My Response to an Asinine Quora Post.

banksy-rat-nyc

New York is so alive we took the 80’s drug epidemic and spit out Basquiat, Koons, Maplethorpe, Sherman, and Haring. Michael Bloomberg’s second biggest accomplishment was being Mayor. Bernie Williams won four World Series with he Yankees AND was nominated for a Grammy. When Russian oligarchs want to stash their loot they buy an apartment here. An apartment! Want to take your startup public? Try listing on the San Francisco Stock Exchange. Miami would fit inside Staten Island with room to spare.

More than 30% of us were born overseas and more than 800 languages are spoken here. When the polling firm Harris Interactive asks Americans “If you could live in any city in the country except the one you live in now, which city would you choose?” New York City has been #1 for 12  years in a row.  When people say “if you can make it here you can make it anywhere”, they ain’t talking about Paris.

Does this sound dead to you? Does it? Maybe, my friend, the right question is not “what does that mean”, but “who the fuck wants to know?”

 

Original on Quora