The Entrepreneurial Strategy Compass

I like frameworks. They're usually not good to solve problems. But they're good to help you think differently about problems. In this article by HBR (Do Entrepreneurs Need A Strategy?), the authors offer a quite simple quadrant to help you think about you strategic orientation as a new company. Basically, the questions are: 1) do you collaborate or compete? and 2) do you build a moat or storm a hill?

“Strategic opportunities for new ventures can be categorized along two dimensions: attitude toward incumbents (collaborate or compete?) and attitude toward the innovation (build a moat or storm a hill?). This produces four distinct strategies that will guide a venture’s decisions regarding customers, technologies, identity, and competitive space. The emergency-services provider RapidSOS used the compass to explore its strategic options.”
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Founder-product fit

In startup land, there's a lot of talk about product-market fit. There's this idea that you should spend all your time finding a good product-market fit (i.e. something people LOVE and would be really sad if it went away, think Netflix) before doing anything else. It's the glue behind everything.

One thing less talked about is founder-product fit (info here and here). It's the idea that as a founder you should be working on something that literally keeps you up at night. Something you would work on even if there was very little chance it would make you money in the long run. I believe founder-product fit is the true glue behind everything.

Because it's really hard to do anything hard within truly being into it. Even your body (not just your mind) has to believe in the idea you're working on. Otherwise, you'll never make it through the difficult times. 

I tweeted this little rant yesterday after reading this Inc.com story about all the hype digital-first CPG brands are getting. It's a really hot space. Money and MBAs are flowing into it. They all want to be the next Warby Parker.

I do believe it's crazy to work on something that has no meaning for you. I didn't think about it when I tweeted this but this reflexion comes from first-hand experience.

I had an awful experience of working for a startup founder who was 'in to make a quick buck'. He saw a growing space and a business opportunity. He thought it was really cool to do a certain type of business model. He thought it would make him rich and successful like the case studies he was reading on Business Insider.

I ended up losing lots of money, lots of time and it even cost me an important relationship. It was a bitter experience and I learned a ton from it. It was only a few years later that I realized that all of this would have been different if the founder truly believed in the mission of its company (and cared less about making a quick buck or fame).

Founder-product fit is simply a fancy expression to say do the stuff that truly matters to you / don't waste anyone's time.

Humans are underrated

If you want to read about Tesla and how it's burning lots of cash these days, I suggest you read this: Tesla Doesn’t Burn Fuel, It Burns Cash. The article presents a pessimist outlook on Elon Musk's auto company and criticizes how quickly it raises and spends money. It's a good read, whether you're long or short Tesla.

The interesting part, in my opinion, is this quote from Elon Musk about excessive automation. Musk's had mentioned in the past that the company would be able to automate most of its production. 

“Musk recently admitted that “excessive automation at Tesla was a mistake” and said that “humans are underrated,” an indication that the costly legions of employees won’t be shrinking as quickly as he once imagined. In that email, he vowed to hire hundreds of additional factory workers. Tesla lists nearly 3,000 current job openings.”

Well, it appears even with millions of dollars of investments in equipment and machine learning, humans are still required to make stuff. Humans are underrated.

How to build presentations

This is a great deck on how to build presentations for consulting by the Entrepreneurship, Leadership and Consulting group of Columbia University.

It's a fun reminder that being a keynote artist is not just about the font & the photos.

It's also about the logic. So the underlying argument must be strong.

You might even have to write a long-form text before.

Here are the two most important slides of the presentation:

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2how_to_do_consulting_presentations__elc_.jpg

 

 

Andy Rachleff's Wisdom

This interview of @arachleff by @Jason is:

  • a crash course on personal investment
  • a history class on Venture Capital
  • a guide for consumer insights
  • a guide for product strategy
  • a collection of precious dad jokes and fatal one-liners
Andy Rachleff shares insights from co-founding Benchmark & building Wealthfront to manage $10b+ assets, announces 50% fee cut for Risk Parity, talks stock market, financial literacy & the wisdom of investing against human instinct

Seamus Heaney on condescension

con·de·scen·sion: an attitude of patronizing superiority; disdain.

This is what Seamus Heany, poet, playwright, translator and noble prize winner, had to say about it.

“Everything flows, an old Greek said.
Nothing’s secure. Gold’s only lead
When you stop to think.
On your way up, show consideration
To the ones you meet on their way down.
The Latin root of condescension
Means we all sink.”

More at Brainpickings

Podcast: Moonshot Investing, with Nikhil Kalghatgi

I said I would be posting more of the podcasts I listen to. Here's a mindblowing conversation between Patrick Oshaugnessy and Nikhil Kalghatgi about investing (and a lot of other things). 

INVEST LIKE THE BEST Nikhil Kalghatgi – Moonshot Investing - [Invest Like the Best, EP.82] 30 00:00:00 30

Nikhil is the CEO of CoVenture Crypto, but he ended up there because of an overarching investing style that he calls moonshot investing, which we explore right from the start and in great detail.

He is obsessed with productivity and happiness, and we spend a long time on those topics. One of the most interesting experiments I’ve heard about on the podcast is his Happiness project, for which he interviewed more than 100 of the wealthiest people in the world. The lessons he gleaned from those conversations are very helpful, and I won’t soon forget the lesson related to sacrifice.

We also discuss asteroid mining, networking, shared experience, and philosophy. Oh and crypto currencies. Nikhil’s take on crypto has always been refreshing to me. In fact the first time I met him he was throwing cold water on a room full of enthusiastic crypto investors. Within crypto we discuss business opportunities, mining, and how new retail and institutional capital will affect the asset class.

(Source: Investor Field Guide's Podcast, Invest like the best)

Patrick Pichette on Planning

Patrick Pichette, former chief financial officer of Google and new VC at iNovia, talks about product planning and evaluating projects inside a growing company in this McKinsey interview from 2011. It seems as relevant as it was 7 years ago.

“The challenge is in the planning. How do I feed the winners and hold back on the ones who aren’t performing the way they should? ”

We have a quarterly review process that examines every core product area and every core engineering area against three beacons.

“First, what did it do in the last 90 days and what will it do in the next 90 days. ”

Because in those 180 days, there’s a lot to deliver—for example, in the amount of code that has to ship out and the number of users and whether it’s going viral or not. We track these things continuously, but it’s worth taking a look at—in some cases weekly, in some cases monthly, but at least every 90 days, given where we are.

“The second beacon is what’s your trajectory? ”

Do the financial models and operating metrics for a couple of years out suggest a trajectory that is gaining or losing momentum? In some cases, are you going to need more capital expenditures because you’ll need more data? If you have a fantastic success, then you need more capacity—Google Instant, for example, sometimes generates answers to user queries before they’ve finished typing. That requires a lot of computing power.

“Then the third beacon is what’s your strategic positioning in the context of a fast-changing landscape? ”

If a competitor buys another company, what does that mean? Or if we ourselves decide to move on something this quarter, what does that mean for everything else that we have? 

These beacons are very tactical and short term, with financial and operational metrics always running, and always viewed in the context of a shifting strategic landscape. For example, if we thought product growth would be X but now it’s three-quarters of X, we retune our resources accordingly. So if we had planned to hire a sales force of 200 in the expectation that a product would be ready to ship, we might delay hiring them for an additional 90 days to give engineering time to run through all the testing. And we have those kinds of conversations in most areas of the company every quarter. It takes about a week, a week and a half—and if we need to, we shift resources.

(Source: McKinsey, 2011)

Two sides of the Facebook coin

I just finished reading the full transcript of Mark Zuckerberg's testimony concerning the 'trust breach' that happened earlier this year. It is a lesson on how to write a memo. It's clear and concise. And let's be honest, it's well written. We can almost « feel » empathy for the visibly shaken CEO. Anyways, it's a convincing and charming statement.

I paraphrase what I think is an important lesson:

“Facebook is an idealistic and optimistic company. For most of our existence, we focused on all the good that connecting people can bring. It’s not enough to just connect people, we have to make sure those connections are positive. It’s not enough to just give people a voice, we have to make sure people aren’t using it to hurt people or spread misinformation. It’s not enough to give people control of their information, we have to make sure developers they’ve given it to are protecting it too. Across the board, we have a responsibility to not just build tools, but to make sure those tools are used for good.”

As a growing company, you must be taking a broad enough view of your responsibility. When you start, you can avoid thinking about that because you need to survive, grow and get to the next step. But as you grow bigger and your responsibility extends, you realize there are often two sides of a coin. What makes you great can make you weak. What makes you smart can make you dumb. What makes people love you can make people hate you.

“I started Facebook when I was in college. We’ve come a long way since then.”

Yes, we've come a long way since then.

 

 

Trusted brands

This is a summary of Union Square Venture's thesis for investing in companies:

“USV backs trusted brands that broaden access to knowledge, capital, and well-being by leveraging networks, platforms, and protocols.”

Trust has never been more of a competitive advantage. That's one thing investors and marketers/advertisers agree on. We know how marketers/advertisers think about trust and the solution to build trust usually include a pretty big media budget. But why and how do you build trust according to the investors?

“The goal of these businesses is to build trusted brands—products and services that not only serve a purpose, but integrate into the hearts and minds of their customer in a way that is durable and important. Trust comes from true alignment and convincing the customer that their values and priorities are shared. The bar for this is higher than ever but the best businesses will continually meet it.”

Long-term alignment of values. Integration in the hearts and minds of people. In a way that is durable and important. Shared priorities. I think a lot of that is NOT a communications problem. Communications might be the tip of the iceberg. I think a lot of that is an acting challenge. You need to prove yourselves through your actions over a long period of time (read: more than a quarter / more than a 4-week media flight).

So when you think about building trusted brands, think about what you'll do first, and how you'll communicate it second. Not the other way around. Because the most successful investors are currently betting on companies that are committed to building trust the right way. Truly trusted brands will be the standard 5-10 years from now. How you do measure against that?

Thinking independently

Independent thinking is making sense of the world based on your personal observations and experiences rather than just going along with the thoughts of others.This tweet is a great reminder of the importance of thinking independently and obsessing over learning / not winning an argument or comforting old thoughts.

Time, Money & Anxiety

A good re-read from The Economist, Why is everyone so busy?

“The relationship between time, money and anxiety is something Gary S. Becker noticed in America’s post-war boom years. He found that when people are paid more to work, they tend to work longer hours, because working becomes a more profitable use of time. So the rising value of work time puts pressure on all time. Leisure time starts to seem more stressful, as people feel compelled to use it wisely or not at all.”
“The more cash-rich working Americans are, the more time-poor they feel. So being busy can make you rich, but being rich makes you feel busier still. ”
“E-mail etiquette often necessitates a response within 24 hours, with the general understanding that sooner is better. Managing this constant and mounting demand often involves switching tasks or multi-tasking, and the job never quite feels don”

Capital Allocation & Marketing

As I spend more time thinking about developing & financing companies and less time thinking about marketing, I can't help but notice the gap between the two disciplines. Here's an attempt to bridge one of these gaps. One expression that is extremely common in the financial world is « capital allocation ».

“Capital allocation describes how businesses divide their financial resources and other sources of capital to different processes, people and projects. Overall, it is management’s goal to optimize capital allocation so that it generates as much wealth as possible for its shareholders.”
— Investopedia

Capital allocation is a simple term to help you think about the opportunity cost of the money you spend. I think it's useful to apply a capital allocator's mindset to marketing. I'll even say that during my years in advertising, I was surprised of how bad people around me thought about capital allocation.

In finance, it's easy, capital allocation is optimized for wealth generation. The objective is clear, you need to return the money. In marketing, it's less easy, capital allocation is rarely optimized for a clear objective. Because objectives are rarely defined. Or objectives are qualitative or not easily measured in the short term.

For example, you instinctively know that spending 50k to develop a microsite that will live 3 months and will be supported by 5k of media is bad capital allocation. You can do much better with 55k. But do you really if you should spend 8k on a PR firm or 4 times 2k on 4 other opportunities? Do you know if you should invest 20k to re-design your website or should you invest it elsewhere? What's the opportunity cost of that capital? Are you a good capital allocator?

Capital allocation is important when you build a business. Because your benchmark is a simple alternative: putting that money you invest in an index fund and get a small, predictable return. So you know pretty quickly if you're a good capital allocator or not. 

But capital allocation is extremely important when you develop your marketing strategies. Because your benchmark is your competitor doing a much better job with a similar budget. Or generating the same results with a tenth of your budget. The tricky part is that it takes much longer to know if you're a good capital allocator in a marketing context.

Recommended podcasts: Capital Allocators; Invest like the best

Forbes + Crypto

Stocks got baby boomers interested in the economy.

Crypto will get millennials interested in the digital economy.

Newspapers understand that and many of them are rolling out initiatives following that thesis.

One of them is Forbes's spinoff, Crypto Confidential. I don't know a lot of 18-34 who subscribe to Forbes publications. But I suspect this Crypto Confidential ecosystem might attract them. Here's how they pitch their new platform to readers:

“Many think crypto assets like Bitcoin are the new gold. However they are so much more. Blockchains and digital assets will revolutionize a myriad of industries, including financial services, health care, government, technology, energy, real estate, and more. Be among the first to know the most important news and information in crypto, with this e–letter delivered every Friday.”

I read it. It's well curated and well written. It is indeed doing a good job of being a decent guide to the cryptocurrency revolution. You can subscribe to the newsletter here and to their Twitter updates here.

The Risk Of Being 'Wrong And Alone'

This is a nice framework (thanks to Super LP) for a lot of situations in life, including fashion, music, arts, investing, entrepreneurship, politics, careers, etc.

It states that we are generally more likely to be dismissed for being wrong and alone than for being wrong and in company. It also states that being right and alone is where you want to be (if you want to create anything original or of value). Food for thought!

source: Super LP

source: Super LP

“I often note that the fear of being wrong and alone pushes people in finance to do conventional stuff and run with the crowd. But in doing so, they take the possibility of being right and alone out of play. ”
— Chris Douvos, Super LP

Purpose > Vision > Mission > Values > Measures

If you work in a corporate environnement, these five terms might seem like fluff. You've seen them and you don't really know the difference between them.

If you work at a startup or a smaller company,  these five termes might seem unfamiliar or useless, either because you've never thought about them in a business context or because you had to write some BS in your business plan about them.

If you've encountered a very difficult strategic shift in your organization, and you felt resourceless, I bet you now tell everyone how important it is to clearly define your purpose, vision, mission, values and measures. You know it, I know it, they know it. We never do it properly.

Here's a great round up by NOBL (full article here) :

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Figuring out your editorial strategy

I'm still figuring out my editorial strategy. I'm not a brand, a company or a personality. I didn't need to figure that out before I started. I didn't need to present a well-crafted strategy to anyone. I just started writing and experimenting with my own platform. I publish my thoughts to better organize and understand content I consume, both professionally and personally.

On the positive side, it allowed me to focus on doing it before thinking about it too much. It didn't paralyze me. I started writing and publishing, without overthinking the topics and if it was in line with my editorial strategy. For what it's worth, I don't think humans should have an editorial strategy. You should have your voice and you should develop your own opinions on things. But having a well-planned agenda for your personal diaries is kind of weird.

On the negative side, this blog is a mess. It doesn't have categories nor tags. The format is not consistent. I like to post big long rants as much as I like to « re-post » videos. I changed the description a couple of times as I'm figuring out my editorial strategy.

A few ideas emerge naturally from blogging every day. Here's a list of various things I'd like to implement in my blogging adventure. Things that I now wished I had figure out before. It's nice because I now know for sure they're real needs or pain points. This is my features request list to my self. Not prioritized yet.

The weekly reading list

I often have a list of 5-10 articles I gathered during the week that I would like to share. But I'm not motivated to write about each one of them. It would be nice to have a Sunday roundup or Monday reading list. It would also take 1 post/week.

The book list

A permanent section of wither the books I'm reading right now, the ones I read in the last year, my top 20 or top 5 / categories.

The podcast list

Same as for books but for podcasts.

En français s'il vous plait!

I write in English because I personally want to develop my writing skills. It's one of the objectives of this blog. It's not always practical. It's a very bad short time decision for any kind of business development in Québec. And I naturally avoid French-specific debates and topics because of that. I should have a section for rants in French about particular issues that need to be discussed in French. Also because I need to keep my writing sharp in both languages.

Categories & Tags

I have a technical debt on this blog: categories & tags. I need to go back to each blog post I wrote and categorize them and tag them. I think it's more painful to do it backwards but at least I have a decent sample to organize things properly.

Featured Images

I used to post featured images on each blog post. I liked to use archive images from Montréal. Not sure what to do about this. It got in the way of writing. I would sometimes skip a day because I knew it was annoying to find images and so. I might go back to each blog post and removed them. Or go back and add an image to each of them.

Essays

A list of longer posts + a list of things I want to think deeply about. Separate from the blog. More like a resources section.

Products I like

What I use in the day to day to do my job. Maybe recommendations on tools I use and products I'd recommend for companies that are just starting out. Kind of a « startup » stack. There's already a lot of info about that. I'd have to find a twist that creates value for me / readers.

Cross-posting

I'm extremely bad at cross-posting. I don't have auto-tweet my new blog posts. I don't want to annoy people. Maybe I create a separate Twitter account that acts like a bot to post new articles? Maybe I find a way to integrate highlow (which I'm slowly ramping up into a real company with its own activities) into the loop. Maybe I cross-post on Medium or on Quora. Maybe I do a weekly email. I don't want to do too much. I want to automate and keep it simple. But my distribution sucks.

If you're reading this – any ideas? ;-)

Crypto's Wild Ride

Scott discusses the future of altcoins and the volatility of the market with NYU Stern finance professor David Yermack. Sources (00:48) Coindesk.com. (01:15) Investopedia. (02:31) Investopedia. (05:35) "Understanding Ethereum (Report)," Coindesk, 2016. (11:12) Coindesk, Coingecko. Episode 167 Song - Chris Record - HODL GANG https://youtu.be/JZYZoQQ6LJQ