Tag: business

• In support of narrative memos

  This is not new. It has been reported on before. But I just finished reading this article about Jeff Bezos’ relentless commitment to “high-quality and high-velocity decision making” at Amazon.

  Here are a couple of high level points:

  – There are decisions that cannot be easily reversed (Type 1) and there are decisions that can be (Type 2). Knowing which is which is important. To help get better at this, they are very diligent about tracking the outcomes of previous decisions.

  – Make decisions without all of the info you wish you had, because if you don’t, you’re probably moving too slow. Speed is paramount. If you’ve categorized your decisions properly (see above), being wrong may not actually be that costly.

  – There’s a company philosophy centered around “disagree and commit.” It is about moving forward – since speed is so important – without full consensus. In other words: We may not all agree, but can we disagree and commit to this?

  Perhaps the most interesting, and seemingly paradoxical, aspect of Amazon’s “high-velocity decision making process” is that it is built upon narrative memos, instead of PowerPoint decks. In fact, decks have been banned at the company since 2004.

  The reason for this is that narrative memos are more difficult to write, which means you really have to understand what you’re talking about. It encourages deeper thought and it allows nuances and interdependencies to come through.

  Apparently important meetings start with everyone just sitting in a room reading the narrative memo, which are often between 4-6 pages. Once everyone has read the memo and is on the same page, the meeting starts.

  As someone who writes a daily narrative, this approach really resonates me. It would be a hell of a lot easier if I could just show up here every day and throw down a few bullet points. But then both of us would get far less out of this practice.

  Writing takes time. Bezos has acknowledged that these memos cannot be written in a day or two. But clearly there’s a belief that more time spent up front translates into greater overall speed. Their market cap suggests that is working.

  2018.10.14

• The world’s best brands — 2018 edition

  At the beginning of this month, Interbrand released its annual ranking of the world’s best global brands. This year’s 2018 report marks the 19th year of the study. If you’d like to download a free copy of the report, you can do that here. But below is a snapshot of the first 24 brands:

  

  Apple and Google are in top position for the 6th year in a row. And Amazon is on a hockey stick trajectory with its brand value jumping by 56%. More than half of the list is comprised of the following five sectors: Automotive (16), Technology (13), Financial Services (12), Luxury (9), and Fast-Moving Consumer Goods (9). Luxury is currently the fastest growing sector.

  In their report, they outline five themes that have emerged and that are helping these brands outperform. They are:

  1. Positive utility – not enough to just make people feel good through storytelling; you need to create real value and a positive impact in the world
  2. Subscription mindset – there’s an increasing amount of brand value in subscription-based businesses (29% in 2018 compared to 18% in 2009); you need to offer your products and services with the least amount of friction as possible
  3. Customer-centricity – bring the voice of your customer into every aspect of your business; be nimble enough to respond quickly
  4. Learning from luxury – the top performing category in this year’s ranking; about exclusivity and authenticity
  5. Role of brand – make your brand part of the decision-making process; build brand equity and trust

  I’ll stop there and let you all dig into the rest of the report if you’re interested. 

  But one thing I found particularly interesting about the study is that they used – insert buzzwords here – “AI-powered social listening” to try and measure the emotion and sentiment floating around on the internet around specific brands. The goal was to pin down the perceived trustworthiness of specific brands.

  Not surprisingly, they found a pretty strong correlation between customer trust and purchasing intent. Makes sense to me.

  2018.10.13

• The double opt-in introduction rule

  

  I am a fan of the double opt-in introduction. I am guilty of not doing it, but I’ve been hearing of this approach from a few people and I think it makes a lot of sense. And it is probably only going to make more sense as we all become even more connected.

  The way the double opt-in introduction works is that before you make a cold introduction, you simply ask both parties if they would like to be introduced to the other party. If one party doesn’t opt-in, then you don’t make the introduction. Simple.

  The reason this is so valuable is because, without this double opt-in framework, it can be easy to get sucked into a call or meeting that you may not want to be a part of, which in turn means that you’re not in control of and managing your own schedule. Somebody else is doing that for you.

  This may seem harsh, but as we’ve discussed before on the blog, there’s a ton of value in saying no. We all need filters, especially today. And if we don’t say no often enough, we’re all bound to run out of time for the things that really matter and that we should be focusing our attention on.

  The underlying principle behind the double opt-in introduction is that it’s a lot easier to say no to an introducer than it is to a person you have just been introduced to: “Sorry, I have no interest in talking and/or meeting you.” Now that’s not very nice.

  Photo by Andrew Neel on Unsplash

  2018.09.23

• Any decision over no decision

  The Hard Thing About Hard Things is a book that I read a number of years ago (Amazon just told me that I purchased it on March 12, 2014), but that I frequently come back to in my mind. 

  One of my favorite themes in the book can be summed up with this quote: “Often any decision, even the wrong decision, is better than no decision.”

  Decisions can be scary. What if I make the wrong decision and things go horribly wrong? Then things are on me.

  In some organizations, indecision may feel like the safest decision. Let’s do one more study just to make sure that we’ve got this right. 

  But in a startup (which is what Ben Horowitz’s book is about) and in organizations that would actually like to grow, innovate, and accomplish things, indecision can mean death. Without decisions, organizations lock up.

  None of this is to say that bad decisions are okay. Executives must make high quality decisions as fast as possible, and as a rule of thumb you probably want to make more good decisions than bad decisions. 

  But speed, momentum, and organizational clarity also matter a great deal. 

  One of the reasons why I mentally come back to this book is because oftentimes I find that things can get hung up on relatively inconsequential decisions. So I like to remind myself that go is better than stop.

  As Ben points out in his book: “The only mistake you cannot make is running out of cash.” And time has a funny way of burning through cash.

  2018.09.16

• Apple and the humanities

  

  This morning I came across two news item that are interesting in their own right, but also have a noteworthy relationship.

  $AAPL now has a market cap that exceeds $1 trillion. And not surprisingly, everyone, from the New York Times to Bloomberg (photo essay), is talking about it.

  But the one thing that continues to stand out for me about this story is what Steve Jobs said back in 2011 when he unveiled iPad 2.

  He said that fundamental to Apple’s DNA is its ability to marry technology with the liberal arts and the humanities. Its secret sauce is not technology alone.

  Now let’s move on to the second piece of news that caught my attention.

  As of 2017, less than 5% of college and university students in the US were studying one of the big four humanities majors – a sharp cliff-like drop from 2011 according to this data.

  That’s almost certainly because business degrees and STEM degrees are thought to be more valuable and in demand in the labor market. And I’m sure they are right out of school.

  But perhaps we shouldn’t forget Apple’s trillion dollar lesson. And I think this goes for both the tech space and the real estate industry, as well as others.

  2018.08.06

• Value of distribution and reach for consumer facing products

  

  Forbes recently pegged social media influencer Kylie Jenner’s net worth at somewhere around $900 million. That makes her the youngest (she’s 20) person on Forbes’ annual ranking of “America’s Richest Self-Made Women.” 

  And if the trend line continues, she’ll be the youngest self-made billionaire, ever. Mark Zuckerberg apparently holds that title right now. But he was a classic underachiever and only became a billionaire at age 23.

  Most of Kylie’s net worth is derived from Kylie Cosmetics, which launched less than 3 years ago, but did an estimated $330 million in revenue last year. Forbes values the company at almost $800 million. And Kylie owns every bit of it. 

  The reason I am mentioning this today is because I was fascinated by the above Forbes article. It’s such a powerful example of social media leverage. Forbes put it differently: “Social media has weaponized fame.” 

  Kylie has 111 million followers on Instagram (plus many more on her other social channels) and that’s really the most important part of this equation. She has the distribution and reach to acquire boat loads of customers. It doesn’t matter what you’re selling if nobody knows you’re selling it.

  The rest of her business is pretty much outsourced. Seed Beauty (out of Oxnard, California and Nanjing, China) handles the manufacturing, packaging, and shipping fulfillment. Shopify (headquartered in Ottawa) is her e-commerce platform.

  We could of course have a debate about whether a celebrity-fueled business is really all that sustainable. And perhaps there’s risk in relying so heavily on social for customer acquisition. But youngest billionaire is youngest billionaire.

  Image: Forbes

  2018.07.17

• Writing is thinking

  Steven Sinofsky recently tweeted out this thread where he talks about the virtues of writing in business. His argument: writing is thinking.

  Writing is difficult. It takes a lot of time. I’ve been writing posts – albeit short ones – on this blog every day for almost 5 years and I can tell you that somedays it is downright painful. Somedays I ask myself: Would I be better served spending this time elsewhere?

  It’s much easier to talk, throw down bullet points on a slide, or send out pithy emails. And because, today, we’re all so focused on “agility” and “execution”, it is easy to dismiss writing as being slow and cumbersome. 

  But the act of writing is indeed thinking. To write about something you have to wade into the details and actually understand what you’re talking about. It’s far more nuanced.

  One of Sinofsky’s arguments is that “execution is in a constant state of diverging as more expertise deals with more details that fewer people understand.” Business becomes “I just know.” Writing can fill in those missing parts.

  He goes on to argue that agility is also not mutually exclusive with writing. In fact, when you write, clarify, and collaborate early on, overall execution speeds up because now people get the details and better understand the context.

  I’ve mentioned this before on the blog, but my Grade 4 English teacher used to make us write a daily journal. He would tell us that it didn’t matter what we wrote or how long it was, but we had to write something every day.

  I did it and I enjoyed keeping those journals, but at the time I didn’t really appreciate was he was trying to get us to do. I do now.

  2018.04.22

• Would it be insider trading if Kylie Jenner traded on her tweets?

  Lately I have really gotten into Matt Levine’s daily newsletter about “Wall Street, finance, companies and other stuff.” Maybe that’s how I should describe this blog: Cities, real estate, design, and other stuff.

  If you aren’t familiar with Matt’s writing, here is an article that he wrote about Kylie Jenner’s recent tweet concerning Snapchat. You know, the one that wiped out $1.3 billion of market value because she revealed – using only 88 characters, I might add – that she was no longer using the app.

  sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad.

  — Kylie Jenner (@KylieJenner) February 21, 2018

  https://platform.twitter.com/widgets.js

  The article was spurred on by this question:

  “Would it be insider trading for Kylie Jenner to buy short term out of money put options on Snap and tweet out that she’s no longer using Snap?”

  And this is the start of his answer:

  Insider trading, as I am constantly saying around here, is not about fairness; it is about theft. It is not illegal to trade on your own nonpublic knowledge of your own intentions. Warren Buffett can buy stocks before he announces that he’s bought them, even though that announcement will predictably make the stocks go up. 

  If I did describe this daily blog like Matt describes his daily newsletter, this post would clearly fall into the “other stuff” camp. But maybe you too will find it interesting. If you do, you can subscribe here. 

  2018.03.17

• How to act like an entrepreneur

  I really like the post that Seth Godin wrote on his blog today called: The four elements of entrepreneurship.

  He defines entrepreneurs through their actions and behaviors. In his view, this is what they do:

  1. They make decisions.

  2. They invest in activities and assets that aren’t a sure thing.

  3. They persuade others to support a mission with a non-guaranteed outcome.

  4. This one is the most amorphous, the most difficult to pin down and thus the juiciest: They embrace (instead of run from) the work of doing things that might not work.

  As far as I can tell, that’s it. Everything else you can hire.

  He then goes on to say:

  All four of these elements are unnatural to most folks. Particularly if you were good at school, you’re not good at this. No right answers, no multiple choice, no findable bounds.

  Perhaps this is why many VCs seem to favor young founders. They’re not old enough to think they know what will work and what will not work.

  2018.01.16

• Don’t fall off the “humor cliff”

  Some of the most successful people I have ever met in business are also some of the funniest people I have ever met. This, of course, isn’t universally true. But I don’t think it’s pure coincidence. These are people you want to be around and do business with. 

  There’s lots of research out there to suggest that humor is an incredible way to build relationships and strengthen workplace cultures. Joel Stein recently penned an article about this at Stanford Business called Humor Is Serious Business. Naturally the article itself is also funny. Here is an excerpt:

  “The reason humor works as a bridge (just go with it) is that laughter sparks the release of oxytocin, a hormone that facilitates social bonding, increases trust, and quickens self-disclosure. This is key in a workplace since all the other ways to release oxytocin are no longer permitted by Human Resources. In a 2015 study, psychologists Alan Gray, Brian Parkinson, and Robin Dunbar had participants watch either a funny or neutral video clip before engaging in a self-disclosure exercise with a stranger: People who watched the funny clip revealed 30% more personal information relative to those who watched the neutral clip.”

  The article goes on to talk about how humor at the negotiating table can lead to increased concessions and how, if you’re in a senior position and you make fun of yourself, people tend to assume you’re highly confident in your abilities. It also humanizes you.

  One of the interesting things about this topic is that, according to research by Stanford professor Jennifer Aaker and lecturer Naomi Bagdonas, most of us fall off a “humor cliff” when we enter the workforce. That’s roughly the moment where we start laughing less and finding stuff less funny.

  We shouldn’t let that happen and I’m going to make a concerted effort. Not just because of business, but because laughter is good for you.

  2017.08.05