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 🙂

 

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.

Platform v. Application

Platforms are systems on which applications are built. Applications are built on top of platforms. Applications are things end users interact with. Platforms are things applications interact with. Twilio is a platform for building telephony platforms. Airbnb uses Twilio to power their guest/host communication application.

Are we all cool?

 

 

Patent Trolling: How it Felt, What it Did and What I am Doing About It

Being sued by a patent troll felt surreal and scary. I hated the time suck and the money lost and the horrific sense of injustice. And I was afraid other trolls would decide we were wounded, vulnerable to a quick hit. Like many troll victims I kept my mouth shut, my head down and hoped the whole mess would go away.

Privately I raged against the USPTO for issuing such obvious, ambiguous dreck. And I railed against the people who patented (among many things) entering menu data into a form so the menu can be displayed on a device. I paid my lawyers and cried. Some nights I had to slide my hands under my pillow to keep my fingers from clenching in tight fists. The overwhelming feeling of injustice was ever-present. Some douchebag effectively claimed ownership of a massive swathe of the internet with lawsuits against Apple, Eventbrite, Hyatt, Micros, Pizza Hut, Dominos, Fandango, OpenTable, Expedia, GrubHub, Hotel Tonight, Starbucks, and many startups like Ordr.in. What patent, granted in 1998, could possibly be relevant to this range of companies? None of us, even direct competitors with their own patents, are suing each other.

Between the normal challenges of building a company and the added burdens of the lawsuit, we failed to thrive and shut down this month. I feel shitty in many ways but one I way I feel free and excited is the fight against B.S. patent trolling. Come and get me suckers! My company is gone, I’m broke, and I have a megaphone.

What do I care about most? Right now it is passing HR 9, The Innovation Act, working its’ way through the House. A companion bill is expected soon in the Senate. These bills focus on patent litigation abuse which is the hammer trolls use to pound their victims. Check out the App Alliance press release for perspective and join their Troll Fighter movement. You are especially important to this fight if you live in a State represented by Members of the Senate Judiciary Committee or are represented by members of the House Judiciary Committee (or live close to their districts). Send an email and let them know you are in favor of The Innovation Act.

And if you have been attacked by a troll your personal story has power to open minds, to counteract the through-the-looking glass logic of the anti-reform movement. I have seen opinions change in a simple conversation. Legislators and their staff only know what they are taught. We must teach them this is pro-innovator, pro-startup and pro-jobs. If you have a story about being trolled, please contact me or the App Alliance. You can truly make a difference, even confidentially. When I was first sued I did an anonymous video interview about the experience. It was #1 on Reddit for an afternoon. Think of how many people got the message! There are ways to communicate that don’t leave you feeling exposed.

Patent reform is a bi-partisan issue that has many supporters, often with differing reasons. That is what makes this a powerful moment. But it won’t happen without support from the community. This is what I am devoting myself to while I get my feet back under me. It is a worthy cause for us all.

The creep creep creep of the normal range

I was sitting on the couch with tears in my eyes. I had just hit save on changes to my startup’s website, adding a nifty announcement bar across the top that said “2011-2015. Beloved startup of David, Felix and many wonderful colleagues. We are now closed. Thanks for all the fish.”

This is one of the things you do when your startup shuts down. You tell people. So I told, and I was definitely very sad. My wife asked how I was doing. She’s been my biggest fan and constant supporter. I looked at her and said “I’m okay.” And I was. How fucked up is that?

Founding a startup, for me, was a constant exercise in running along the cliff edge while trying to grow wings. The highs were super high, the lows super low. And there were so many massive swings, sometimes multiple times a day. The hardest part was not the surviving the lows but the constant shifting, the never knowing what the hour would bring. The EEG rhythms of normal life look like ripples on the pond compared to the seismographs of startup life. I have proof*:

Normal People:

EEG Normal

Normal adult with regular job EEG

 Founder People:

Founder EEG, 24hr including sleep cycle

Like hands on a jackhammer, my brain grew numb to the vibrations of founder life and the range I considered “normal” expanded steadily over time. Our first client, first term sheet, first term sheet not signed, landing a massive client, getting into TechStars, paying myself a salary, telling my wife I was skipping paychecks, and then more paychecks, having our credit card suspended…again, the perfect hire, being recognized on the subway, firing the team….After four years it took a lot to throw me.

Maybe it’s the Lexapro but the emotions of finally hitting publish on the going out of business announcement fell in the normal range. Tears be damned.

 

*Proof is completely fictional but it feels right.

Looking up at the cliff

 

CarCliff

Most life blogs talk about starring up at a cliff, giving advice about how to get to the top. Start climbing and don’t stop. Don’t look down. Climb as though your life depends  on it. Visualize being at the top. Glory for the taking. Just do as I do.

This is not one of those blogs.

This is about being at the bottom of the cliff because you fell off and landed on your ass. Well, my ass. I fell on my ass. And it is also the voice I had privately as a founder. The thoughts and aggravations that I wanted to talk about but didn’t because it was off brand. Well, world. It is all on-brand now!

Enjoy.