Entrepreneurship, Strategy & Growth
5 SaaS Features For Big Enterprises
- Single Sign On (SSO)
- Admin View & Permissions
- Security & Compliance
- On Premise (Honorable Mention)
How to Get Press Coverage - Startup PR for Dummies
Remember that journalists are humans, too: keep this in mind and try to help the journalist achieve their goals.
- Target the right people–
- Don’t waste money on mass distribution services
- Leverage your network
- Build relationships ahead of time
- No BS
- Keep it simple
- Make it easy for them
- Consider giving someone an exclusive and try to create some urgency
- Tell them how much you’ve raised
- Write a founder blog post
- Come up with a great story
Many Strategies Fail Because They’re Not Actually Strategies
- Communicate your logic
- It’s not just a top-down process - You need a clear, top-down strategic direction, but this will only be effective if, at the same time, you enable your employees to create bottom-up initiatives that fall within the boundaries set by that strategic intent.
- Let selection happen organically - Strategy implementation requires top managers to design the company’s internal system that does the selection for them.
- Make change your default - We often resist change unless it is crystal clear that the alternative is substantially better. For a successful strategy implementation process, however, it is useful to put the default the other way around: Change it unless it is crystal clear that the old way is substantially better. Execution involves change. Embrace it.
Make It Sell Itself: On Referral Systems
A referral system might fizzle out if:
- My Precious: Customers would lose their edge if they shared your service. Think of a marketer finding a tool that allows them to capture new hidden markets. Would they share their secret weapon with other marketers?
- Training Wheels: Customers would admit to being a beginner if they shared your service. People rarely admit they’re not good at something.
- Empty Pockets: Customers would admit needing the savings from the referral system. We don’t like admitting not to be able to afford something. If sharing a link might make other people think we’re cheap, we’d instead not share it.
Conversely, a referral system will work best if:
- Network Effects: Customers stand to gain something from another user joining the service.
- Reputation Gain: Customers can show that they are experts in their industry to their peers.
- Way Above the Bottom Line: Customers can show that they are doing well using your service.
How to Craft Your Product Team at Every Stage, From Pre-Product/Market Fit to Hypergrowth
- Phase 1: “Drunken walk." The company’s goal is to experiment as much as possible to find product/market fit. Product is tasked with painting the founder’s vision, and is working as more of a service or project management function.
- Phase 2: Product/market fit. It’s time to double down on what’s working. As founders get more busy scaling the company, product’s role is to own collaboration with other teams and drive communication while predictably delivering releases to improve the product.
- Phase 3: Hypergrowth. This stage is about innovating while scaling the existing product. The product team needs to articulate the strategic roadmap, translating the mission and long-term vision of the company across multiple quarters. This requires a blend of introducing new products and supporting existing successful ones, while starting to add a new layer of team leadership that can make decisions on their own.
- Mistakes that are easy to make
- Neglecting the core business
- Failing to change culture
- Staying too deep in the weeds
- Who to hire
- Look for entrepreneurs at scale
- Power up your internal talent pool
- Remember that it’s not a “pipeline problem"
- Mistakes that are easy to make
- Phase 4: Scale. Company becomes market leader (think FAANG). “Inside the building” problems stack up, focus shifts to sustaining growth and the innovator’s dilemma becomes most acute.
Top 10 Learnings from the Redpoint "Free Trial" Survey
- Annual Contracts Dominate
- Aim for 90%+ Logo Retention
- Target 100-140% Net Dollar Retention
- Time and Usage Based Free Trials Convert Better
- Conversion Rates Aren't Impacted by Trial Length. Shorten Trial Length
- Salespeople Increase Conversion by 3.5x+
- Target 4%+ Unassisted Conversion
- Target 15%+ Assisted Conversion
- Scoring Leads by Activity May Lead to False Conclusions
- Requiring payment Increases Conversion Rate by 2.5x
The eight essentials of innovation
Aspire - Do you regards innovation-led as critical, and do you have cascaded targets that reflect this?
Choose - Do you invest in a coherent, time- and risk-balanced portfolio or initiatives with sufficient resources to win?
Discover - Do you have differentiated business, market, and technology insights that translate into winning value propositions?
Evolve - Do you create new business models that provide defensible and scalable profit sources?
Accelerate - Do you beat the competition by developing and launching innovations quickly and effectively?
Scale - Do you launch innovations at the right scale in the relevant markets and segments?
Extend - Do you win by creating and capitalizing on external networks?
Mobilize - Are your people motivated, rewarded, and organized to innovate repeatedly?
Are you a growth leader? The seven beliefs and behaviors that growth leaders share
- I am all in.
- Always put growth first.
- Keep raising the bar.
- Unite the business around growth.
- I am willing to fail.
- Make plenty of bets.
- Back the risk takers.
- I know my customer as a person, not as a data point.
- Take the customer’s side.
- Make it personal.
- I favor action over perfection.
- Put yourself on the line.
- Act on “good enough” insights.
- Face the facts.
- I fight for growth.
- Avoid short-termism.
- Break down internal barriers.
- I have a growth story I tell all the time.
- Infuse the business with purpose.
- Communicate, communicate, communicate.
- I give control to others.
- Build up people’s growth muscles.
- Give power to the front line.
- Go outside to get what’s needed.
Starlink is a very big deal
Obviously these assumptions can vary a lot, in either direction. But in any case, being able to deliver a competent communications constellation to LEO for $100k, or even $1m, per unit offers a substantial business opportunity. Even taking into account its ludicrously low usage fraction, a Starlink satellite can deliver 30 PB of data over its lifetime at an amortized cost of $0.003/GB, with practically no marginal cost increase for transmission over a longer distance.
The SEA-WE-ME 4 is a major submarine cable running from France to Singapore, commissioned in 2005. It is capable of transmitting 1.28Tb/s, and cost about $500m to deploy. If it operates for 10 years equivalent 100% capacity, with a 100% overhead for capital costs, then the price per bit works out to be $0.02/GB. Transatlantic cables are shorter and a bit cheaper, but the undersea cable is just one entity in a long line of people who need money to deliver data. The middle of the road estimate for Starlink is 8 times cheaper, all in, than just the undersea cable.
One final point is to compare the revenue per Watt of solar power generated for Starlink. Each satellite’s solar array is about 60 sqm according to photographs on the website, which means that they generate an average of around 3kW, or 4.5kWh, over an entire orbit. With a ballpark estimate of $1000 of revenue per orbit, each satellite is generating about $220/kWh. This is 10,000 times the wholesale cost of solar-generated electricity, once again demonstrating that space-based solar power is a losing proposition. Modulating microwaves with data is an enormous value-add!
All up, 2500 channels each supporting 58 Gbps is a staggering quantity of data, roughly 145 Tbps. For comparison, total internet traffic in 2020 is predicted to average 640 Tbps. This is good news for people worried about inherently low satellite bandwidth. If the 30,000 satellite constellation is active by 2026, global internet traffic may reach 800 Tbps. If 50% of this is served by the ~500 satellites over densely populated areas at any one time, then each satellite will have a peak data rate of about 800 Gbps, ten times higher than our original basic estimate, and thus earning potentially ten times the revenue.
What is the customer profile for Starlink? The default use case is hundreds of millions of suburban subscribers with a pizza box-sized antenna on their roof, but substantial opportunities exist for other streams of revenue.
In remote and rural areas, ground stations won’t need phased array antennas to maximize bandwidth, so smaller user terminals are possible. These range from IoT asset trackers to pocket-sized satellite phones, emergency beacons, or scientific animal tracking equipment.
In densely populated urban environments, Starlink can provide primary and backup backhaul for cellular networks. Each cell tower can have a high-performance ground station mounted to the top, but exploit ground-supplied electricity for amplification and transmission over the last mile.
Finally, even in congested areas during initial roll out, there is a use case for the exceptionally low latency offered by VLEO satellites. Financial firms are willing and able to pay top dollar to get vital information just a bit quicker from every corner of the globe. Even though the path taken by Starlink data is longer due to the hop into space, the vacuum speed of light is about 50% faster than in glass, more than making up for the difference over longer distances.
Space-based solar power is not a thing
As Elon Musk has concisely pointed out, the fundamental problem with space-based solar power is that it’s obtaining a commodity, power, somewhere where it’s expensive and selling it somewhere where it’s cheap. This is not a good business.
How to Make Wealth
"Companies are not set up to reward people who want to do this [work ten times harder than average]. You can't go to your boss and say, I'd like to start working ten times as hard, so will you please pay me ten times as much? For one thing, the official fiction is that you are already working as hard as you can. But a more serious problem is that the company has no way of measuring the value of your work."
"A company that could pay all its employees so straightforwardly would be enormously successful. Many employees would work harder if they could get paid for it. More importantly, such a company would attract people who wanted to work especially hard. It would crush its competitors."
The Million Dollar Question
"It's like everyone fantasizes about... whatever... but once their fantasies start to become reality, they piss their pants and self-sabotage."
"A lot of times I want to throw up when I'm trying [to go for multi-million ideas]."
"He's got coworkers right now he can commiserate with who understand him. [He could easily start a successful business.] But then what? Then he's the only guy doing this thing. No commiseration. People won't understand him as much.And the more you do that, the more people don't understand."
"The million dollar question... why don't people take the large opportunities in front of them? Why don't they allow their dreams to become realities? Because it means you won't be understood. And we need to be understood, fundamentally, it's so important to us."
Why Product Market/Fit is Overrated
- Are you are ok with the idea of having lunch with one of your customers every Friday?
- Is your intuition good enough that 80%+ of your product decisions are correct without having to ask customers?
- Are there at least 10 people in the market that know, like and trust you?
- Is the market growing 10% year over year?
- Do you like what you would be doing on a day to day basis to grow the business?
- Are you good at it (or are you willing to get good at it)?
- If you didn’t make any money, would you still have had a great time?
Why New Technology is a Hard Sell
- Convincing people that you can solve their problems is harder than it seems because people don’t want to be told that the way they’ve always done things is wrong.
- New technologies often spark cultural shifts towards ease and convenience, which for older generations are hard to distinguish from moral decline.
- Familiarity is hard to distinguish from utility, so “this is how we’ve always done it” becomes synonymous with “this is the best way to do it.”
- Grasping the value of new technology requires imagination. But unless you have skin in the game that doesn’t seem worth the effort because technology is supposed to make things easier and simpler, not wrack your brain.
Inside the Realm of Tech Influencers
- Analyst firms
- Innovator and early adopter CIOs
- Independent analysts
- Tech bloggers and book authors
- Trade press
- Leading IT vendors
How to Succeed In Startups (Without Getting Lucky)
"Focus on your customers, not the competition. Satisfied customers are not enough. Generate fanaticism and love."
"Society is optimized in the present for the past. When you build the new, societal pressure nudges you down paths of consensus & external validation. Yet that’s not how you’ll build the future. Follow the paths of truth, even if you must initially move forward alone."
Five ways to build a $100 million business
- Hunting flies
- Hunting mice
- Hunting rabbits
- Hunting deers
- Hunting elephants
Netflix and the Conservation of Attractive Profits
The Law of Conservation of Attractive Profits
Netflix isn’t that far off from Uber or Airbnb or any of the other market-makers that are transforming industry-after-industry. Netflix:
- Is an infinitely scalable network…
- That has commoditized a previous constraint and…
- Positioned itself to be the chief beneficiary of industry transformation.
The Characteristics of Aggregators
- Direct Relationship with Users
- Zero Marginal Costs For Serving Users
- Demand-driven Multi-sided Networks with Decreasing Acquisition Costs
- Level 1 Aggregators: Supply Acquisition
Level 1 Aggregators acquire their supply; their market power springs from their relationship with users, but is primarily manifested through superior buying power.
Level 1 aggregators typically operate in industries where supply is highly differentiated, and are susceptible to competitors with deeper pockets or orthogonal business models.
- Level 2 Aggregators: Supply Transaction Costs
Level 2 Aggregators do not own their supply; however, they do incur transaction costs in bringing suppliers onto their platform. That limits the growth rate of Level 2 aggregators absent the incursion of significant supplier acquisition costs.
Level 2 aggregators typically operate in industries with significant regulatory concerns that apply to the quality and safety of suppliers.
- Level 3 Aggregators: Zero Supply Costs
Level 3 Aggregators do not own their supply and incur no supplier acquisition costs (either in terms of attracting suppliers or on-boarding them).
Tech’s Two Philosophies
The Google and Facebook Philosophy
- In Google’s view, computers help you get things done — and save you time — by doing things for you.
- Not only does Facebook want to do things for you, it wants to do things its chief executive explicitly says would not be done otherwise.
The Microsoft and Apple Philosophy
- Microsoft's expectation is not that the computer does your work for you, but rather that the computer enables you to do your work better and more efficiently.
- Apple has always been the greatest proponent that computers are an aid to humans, not their replacement.
The Chicken and Egg Question
- Microsoft licensed software, while Apple sold software-differentiated hardware, but both were and are at their core personal computer companies and, by extension, platforms.
- Google and Facebook, on the other hand, are products of the Internet, and the Internet leads not to platforms but to aggregators. While platforms need 3rd parties to make them useful and build their moat through the creation of ecosystems, aggregators attract end users by virtue of their inherent usefulness and, over time, leave suppliers no choice but to follow the aggregators’ dictates if they wish to reach end users.
The Network Effect Spectrum
The Moat Map
Shopify and the Power of Platforms
This is ultimately the most important distinction between platforms and Aggregators: platforms are powerful because they facilitate a relationship between 3rd-party suppliers and end users; Aggregators, on the other hand, intermediate and control it.
Amazon and Aggregation
Aggregators tend to internalize their network effects and commoditize their suppliers.
The Shopify Platform
I would argue that for Shopify a high churn rate is just as much a positive signal as it is a negative one: the easier it is to start an e-commerce business on the platform, the more failures there will be.
The Shopify Fulfillment Network
Shopify is not doing everything on their own: there is an entire world of third-party logistics companies (known as “3PLs”) that offer warehousing and shipping services. What Shopify is doing is what platforms do best: act as an interface between two modularized pieces of a value chain.
Platforms Versus Aggregators
Shopify clears the Bill Gates Line — it captures a minority of the value in the ecosystem it has created.
The Bill Gates Line
“That’s a crock of shit. This isn’t a platform. A platform is when the economic value of everybody that uses it, exceeds the value of the company that creates it. Then it’s a platform.” – Bill Gates
The Internet and the Third Estate
- Europe’s Three Estates
- The Printing Press
- The Second Estate and the Press
- The Internet and the Third Estate
- Facebook’s Power
The Founders' Pie Calculator
- Business Plan
- Domain Expertise
- Commitment & Risk
- + Execution
- + Founding