Few things are as pure as a transaction.
It’s the aggregate of factors affecting customer choice.
Where marketing, sales, customer want, brand value and UX mash together.
Where belief and timing intersect. Where trust meets the swipe of a credit card. Where a decision—a vote of commitment–is made.
Marketing generates scads of data. It’s inspired the science of analytics and measurement. We measure reach, build conjectures around engagement and social touch points. We even attempt to measure brand, the purest connection of belief to a market.
This data is really useful and essential to our job. It’s a tool of the trade but all of it is conjecture around behavior. None of it is not as revealing as what we learn from customers during the sales process.
In startups where you are in the business of selling things, putting a price on value, revenue is more a marketing data point than proof of a model. Especially early on.
More an indication of product market fit than anything else.
It is the truest KPI.
Think about your first $1M in revenue.
When you cross it. When you seriously believe that you are on the run rate towards it, it is pure magic. Emotive and primal and a damn epiphany.
It’s also a reality check and bellwether for investors. A gateway to a host of fundraising opportunities.
It’s certainly time to take the team to the bar.
Truth be told though, revenue, especially that first couple of million, has little to do with your future business model. Almost nothing to do with how efficient your model is today.
I’ll take the bet that 90% of the time how you are making money at the $1M mark will look completely different than at $20M, even $10M. The value you are selling at 20x today’s revenue may be the same but how you are delivering it won’t be.
Today you are muscling things into place. Creating consulting services before productizing the value.
You are touching flesh with each and every one who shows interest to find a connection. It’s romance that feels more solid than a fling.
It couldn’t however be more important, more indicative and more valuable.
What early revenue does is give you a glimpse of what your market could possibly look like.
You get the chance to see, maybe for the first time, what your brand looks like to the only individuals that matter, the customer and the superset of them, the market.
Marketers dream of visceral touch points with the market.
The best go out into the world and sell products to understand their customer behaviors at the point of sale. Online we fuss and obsess about every piece of data that implies a connection, a dynamic, or an understanding. But we are always one step removed from reality.
We desperately want to know what the customer thinks and are invariably stymied in that understanding.
The art of business is about creating an environment where sales is a natural process and where it is comfortable for a customer to discover and choose you.
How you do that is what defines success.
Marketing as a discipline builds the touch points and creates the environment for that to happen. Sales manages the timing of that choice, the understanding of how the thing you sell plays into the urgency of the customer to buy.
Revenue early on for startups is where this comes together.
I’ve been at that first $1M revenue mark a bunch of times.
Every time it happens it’s a wonder and invariably I can tell who bought what, when, how they felt about the purchase and where they found us.
This is information to die for.
This is the data to understand the connection between what you are selling and what the customer thinks they are buying. From that data you start to figure out how to scale what you have. How to price, deliver, expand the line and support it.
At my core I’m a brand builder who simply loves numbers, sales data especially.
I love them later on when they are the scorecard for company health and wealth. I love them early as they show you how to get there.
Building a business is all about making decisions.
Often from the gut, invariably through presupposition. Too frequently in the dark.
There is nothing like a transaction, like sales exposure, to make your assumptions and your decisions more concrete and more valuable.
That’s the real definition of a KPI.
This is straight from the heart.
From my own experience with a fair share of solid wins and painful losses.
From an eternal optimist with a strong pragmatic bent who seriously loves winning.
From my core belief that against all odds, that you can grab a tiny piece of the collective heart of consumers by giving them something to hold onto—a product with a hint of their own personal future in it—and create a brand that tens of millions can make their own.
That’s the romantic side of winning.
Add a real pay window to that equation (thanks JLM!) and it’s as good as it gets. No—even better actually.
I’ve been lucky to land there a few times. I’ve been on the other side as well—everyone has—and as much as we romanticize winning, loosing seriously sucks.
It’s painful regardless of your personal track record. Painful even if you don’t need the win economically. Painful to the best VCs with amazing portfolios who just hate writing off the losers as par for the course.
This is only natural as it takes every ounce of yourself for years to build something. All of your heart splattered across your sleeve and shared with everyone in your personal and professional networks, and in many cases your friends and families as investors.
Damn—it’s a wonder of nature when success ricochets across these networks.
Not so the other way when you write the humble blog post thanking everyone from the heart for their help cause truthfully without a lot of help nothing happens.
So why this post?
Is the very idea of the acculturation of failure, some folklorish ‘What doesn’t kill me makes me stronger’ thing? Or ‘We live to learn and that in itself is a win’ set of bumper stickers?
Is there really an upside to failure other than it is inevitable and we simply roll on?
We luckily work in a business climate where the culture of entrepreneurship has become the foundation for much of what we do. I love this. Alongside of that, the vernacular of how we address the flipside of dreamed success—failure—has become a bit more mythos than it deserves.
I understand all to well the pathological effect that fear of failing can have on us. How it stops us from starting. How it engenders bad decisions.
Its reality that we all fail. It’s equally true, that you can’t fight with all of your soul to win over time and then decide that loosing is, well—good for you after all.
It is simply bad when it happens…but with benefits over time.
People are smart and they bounce back and take advantage of the gift of hindsight. They do it because its there and they learn. They do it cause its both therapeutic and elucidating.
In all honestly, the true learning of shuttering a company touches you at your very personal core.
So of course we learn from failing.
If I look back at all the ones that didn’t work, there are learnings about how we did this or that, should have raised more or less money, or certainly not counted on that big deal to close on time.
The real value is more about composure, like an athlete watching themselves on tape and learning how to recalibrate muscle memory to be different.
Here is where I depart from common startup lore.
I can’t say that I learn more from loosing than from winning. The opposite actually.
We lionize success.
And rightfully so. Winning is why we work. And winning is our well deserved reward.
We emulate and copy success. We hire people who have rubbed against it before to bring it to our team. We put it on the stage and pay money to be told again what we already know.
How do you bounce back from projects that we spent years of our lives and tens of millions of dollars of others money and the good will of our friends and families?
You bounce back by being smarter and winning the next time. You bounce back because even this noirish plunge is no more risky than the chance at real success in a corporate job.
You look inside yourself and discover whether you have the spark to do it again.
Business is not a game nor a lifestyle, it’s the work of creating value and wealth. There is more money to support people who can actually do this, then there are people who actually can.
So my advice to myself (and I still need to tell myself this), to my clients is always simply is to just do it if you have it in you. If you can be the leader great, if not, join another team and lend your skills.
The truth of it all is that as deep as the sorrow you feel when you just can’t make it work, winning is really all that sweeter.
It’s so worth chasing.
I simply couldn’t resist the urge to chronicle the Climate March, held this past Sunday in New York.
I was there and blown away by the sheer magnitude of people and spirit.
As a New Yorker living in the flood plain downtown, climate change is not an abstraction but reality, as two times out of the last three hurricane seasons, our building was evacuated and we were handed a personal warning sign of changes surely to come.
Of course, climate change touches everyone and everything not just us. From the rising level and temperature of the ocean, to how we produce nutrients to feed the world, to the rising alcohol levels in the wines we drink.
This march, even for NYC, with some 400,00 strong participating, was hyper symbolic simply by its density and size.
It was also a wondrous and large-scale mess from the crammed, uncontrollable mass of humanity overcrowding the uptown trains on a lazy Sunday morning to total bedlam at the intersection of 77th Street and Central Park West.
For myself, ever the pragmatic optimist, it was a graphic reinforcement of my personal belief that truly giving a shit about something, and sharing that belief, is a force that can change the world.
I was egged on to write this by a friend’s Facebook comments to my Instagram photos of the march. ‘Does it really matter?’ was her question punctuated with glass-half empty ennui and painted in inevitability of doom and gloom.
My response is undeniably—Yes!
It is the only thing that matters! Without caring nothing gets done.
Let’s be clear that what was united in this sea of chanting humanity at the march was the passion and collective acknowledgement of a real threat. That’s the key point.
Beyond that communion, it was a jumble of slogans, crazily diverse, many misguided, blaming our current state of the planet on everything from Wall Street to Obama, to industrialization to the decay of religion and ethics.
As diverse as the messages was the population. A melting pot of people, seniors and baby boomers aplenty, but way more teenagers acting out awareness, many costumed, dancing with childlike seriousness and pensive joy.
Granted that this march was more expression than platform, more celebration of unity than a coherent coalition or fund raising effort. Some of the secondary offshoots like Flood Wall Street, and Choose Life over Money seem counter productive if not misguided.
But—exultations at this level mollifies most everything else, even the practical, to some extent.
This was a gathering to show solidarity, to cheerlead the fact that people do care and are willing to do something about it.
I never found my group at the march and in my wandering about, two truths struck me, one from my heart and one absolutely from my head as a businessperson.
The largest cultural changes always comes from the heart of the people up, not from legislation and the government down.
This seems to play itself out time after time in my life.
People are the kernels of the largest changes, not government nor certainly institutions. People are in fact where businesses and government get their cue and permission to act.
Think back to the world you lived in the day after you graduated high school. My bet is the largest cultural changes you are living with today are the ones that you personally were part of making happen.
Civil rights, gender equality, the criminalization of bigotry and hate crimes, gay rights, sexual freedoms—even recycling and large scale composting–all started from people, from individual actions atomizing into groups and communities embracing trends that evolved society and eventually impacted government.
In my personal world, the change is really dramatic.
Post high school, no one was out of the closet, gender equality was an aspirational idea, with not even a hint of reality. Racial and religious intolerance was commonplace. Littering wasn’t even a concept and on the health front, lead was a prime ingredient in the paints used in every elementary school. Asbestos was wrapped around every plumbing pipe in NA.
All of these were taken on by the people and to varying degrees moved in the right direction against overwhelming odds. Fueled by the web of course and instantiating a new moral status of transparency and civil customer rights.
The world is hardly perfect but you are wearing blinders if you don’t see this as a better place and time. And even moreso if you don’t think the world’s population can’t tackle the massive issues affecting everyone—climate and equally of how to feed the world’s hungry without killing the planet itself.
I call bullshit on the doom and gloom crowd.
We shall prevail and not only will change happen it will happen in ways that drive our economy, not hurt it.
Saving the earth just may save the world’s economy
This is not a feeling, this is calculated hypothesis. Maybe optimistic but smacks of possibilities.
VCs are now talking about investing to do good. I applaud this but I also know they are following the money as well and investing smartly.
I believe the real money from capital investments over the next decades will come from AgTech more than tech, from logistics ingrained with sustainability and from leveraging science as truly the partner of computer and behavioral sciences.
I believe that projects around carbon footprints, growing more nutrient dense food per acre, water usage, power and land usage generally are ‘good’ as in the realm of stuff for the ‘common good’ but equally, they are where the smart money is going to be made.
The real reason I’m positive on the future is because good intentions and great business will come together here as a perfect wave.
That not only does the mass of people I followed down Central Park West have a heart to push and support change, but it is also the market for the products of change.
This group of 400,000 and the hundreds of millions they touch in their networks across the web, are both the spirit for change and the consumers who will support it with their choices of what to buy and what not.
This is a big deal. Product without markets fail. Markets chanting for products they can love, change the world we live in.
I also agree with Rob LeClerc, CEO of AgFunder, that AgTech as a category is the next major asset class in the capital markets.
If you can solve any one of thousands of critical agricultural supply chain opportunities, the market is already here.
This was the best use of a Sunday afternoon I’ve done a while.
To say that people don’t care is simply not true. The march here and around the world proved that. People seriously are concerned and united around that concern.
To think that world leaders can ignore this—I guess is possible, but not for long as the coming generations will be way less patient that we are. And they were out en mass at the march.
The real power here is that the people who were present were united in spirit and will create the market to support it.
From rose colored,peace-signed glasses on baby boomers to musings on AgTech economics—simply a great day.
Reblog of my post from a year ago. Feels as right today as it did then.
All day yesterday working on my schedule, whenever I noticed the date, my concentration ground to a halt.
I kept thinking back to that Tuesday, 12 years ago, being stranded in San Francisco on business with the country’s air space shut down. Sitting in bars, watching the news with strangers and having the reality of what happened burned into memory by the incessant replaying of the events on network news.
Talking on the cell to friends in New York, every one of them, shell-shocked. Many of them seeing the plane hit the second tower. Watching the buildings crumble and a very different world appear as the dust settled.
I came back on the first flight out, the Saturday night redeye, circling into JFK over the smoking debris. I remember walking to the intersection of West Broadway and Canal, staring at the barricades on the South side of Canal Street. The surrealistic image of a Schwarzenegger movie billboard that was coming out with him fighting terrorists somewhere. In smug contrast with the real grim reality on the streets.
I’m not going to recap. We all have our memories and have dealt with them. Many moved out of town. Many took years to come to grips. Everyone moved on.
This was a pre iPhone camera world. A pre Facebook and Twitter reality where real-time sharing and connections were absent. Rather than post, you walked around seeing scores of make shift memorials with flowers and pictures of people. Telephone numbers scrawled on papers to call if you saw or heard of someone.
In retrospect, it feels like a black and white photograph of a different time. Frozen yet wrapped in very real memories. My memories as I was there.
People need memorials of horrible events to place them. I light a candle for the passing of my father and grandfather and it helps ground my thoughts. The fiasco of building the new Freedom Tower and the passage of time has squandered the memory of this event somewhat. Even today, more than a decade later, the memorial is not really complete, surrounded by a fence and a construction site.
The reality of 9/11 was that we felt attacked where we lived. As you went further from the physical event, even uptown, it became less real, less yours and less somehow immediate.
In the years following, when I worked in LA, I tried mostly in vain at my companies to make the day mean something. Invariably it always fizzled. It meant as little to many on the west coast as to many people I work with today in their 20′s. They aren’t insensitive, but, to them, it’s a historical event, not an experience that shaped any part of who they are. That distance is the difference.
I’m not a romantic about this. And I didn’t lose any friends or family. And while sensitive and a downtowner, I don’t gush over this often or have loose emotional ends.
But it’s important, because if I don’t make it so, it will indeed go away. If the only reminder is of the skyline view in pre-9/11 movies or photos with the towers in them, this is indeed a waste.
When I posted something about this on Facebook yesterday, a friend responded that the 9/11 light sculpture that they erect every year is her favorite.
The light sculpture is indeed amazing but it’s more art than memorial to most unless we personalize it.
The connection between the fact that crazies who truly hated us navigated hijacked planes using Broadway as their map to the towers, is somehow below the surface. The family from New Jersey who I met in Union Square that brought their then young children into town to experience the community side of this nightmare, is absent somehow in those beams of light till I talk about them.
This post is my nudge to myself to spend a few moments thinking about it. Connecting the dots so that they stay real.
I’m all about moving on. I’m a hardass generally. For this particular memory, making my own little memorial of it on my blog seems like the right thing to do.
The Wellness Market is an anomaly, undefined and amorphous by definition yet potentially a game changer for how consumer products are marketed and sold.
On one hand it’s an economic torrent with some $2T a year estimated in spend.
On the other hand, it’s a completely ambiguous, self-defining category loosely covering everything from fitness to meditation, from workout apparel to fashion, from beauty products to self-help to nutrition.
At its core its simply a catchall term for living a healthier life, embraced by Google and other corporate wellness teams, your local Vinyasa Yoga studio and business coaches alike.
It’s undefined, mostly leaderless and exploding from humble beginnings as a predominantly women’s yoga gathering idea with a few supportive brands a few years ago, to most everyone doing most anything.
It’s so vague it’s almost meaningless. It’s so core to a change in cultural perception, it cuts through everything, and feels solid and just right.
Wellness is simply life with an ingrained healthy attitude towards how we want to exercise, work, eat and interact with people…and ourselves.
It’s still below the mass market surface but bubbling up as a strong foreshadowing of changing consumer behaviors that will transform our markets, and, to some degree, culture in general.
Is this an idea or a market, an aspiration or a reality?
This is the real deal.
Just a very different slant on a market change.
It’s easy to stereotype this as the juice drinking, LuluLemon wearing, stroller pushing, Yoga and Crossfit moms and dads with scads of expendable income and a fashionable bent towards health and wellness.
It’s easy to pooh-pooh this as the epitome of the $12 green juice trend.
This is about people, a huge cross section of the market spanning all economic strata, deciding how to spend their expendable income. I agree that it’s not for the economically challenged budget but it is not the purview of the rich either. It is about people choosing exercise, food, clothes, products in general that fit a conception of their own core values. Not religious or acerbic or whacked out, just overtly healthy.
Healthy as a life choice and a point of view.
It’s also tied in some ineffable way to the rhythm that the social nets bring to our lives and sense of community, and the demand by the population that we have transparency in the goods and services we buy.
When you look at the wellness population, it’s clear that the same people doing Yoga and Pilates, making fitness and nutrition part of their lives are also riding bikes, adventure and wine tasting travel, starting companies, writing code, raising capital and families.
Wellness as an umbrella of beliefs is nothing less than the beginnings of a new market norm. More inclusive and aggregating as a community force then exclusionary and niche defining.
The thread that binds this wellness landscape together is neither income nor age.
If anything, this segment, and the culture mushrooming up around it, is very much about the enjoyment of how we live our lives and how we work. It’s touching how exercise enters our personal lives and equally how executive coaches are teaching pacing and balance to CEOs.
Do not side step this one as a hula hoop type trend.
It connects me personally to clients my son’s age. It connects people sitting next to someone else on the plane. It connects you to those you meet at an exercise class. It connects all of this to a new business perception of how to manage people and the stresses of our work lives.
Massive brands are paying serious attention. And it is not uncommon to see a billion dollar company and local artisanal brands team up to sponsor community activities around this theme. The consumer is the great equalizer and somehow, this sense of wellness is the glue tying the pieces together
It’s a bit ineffable but amazingly powerful once you get your head around a reconfiguration of the consumer marketplace with health and community and a sense of self empowerment at its core.
It’s a game changer for a host of segments that are still stuck in the old world.
I have a friend with a plan to disrupt the $60B weight loss industry by taking it out of the calorie counting reality of 25 years ago and toward what people need today, a coherent and body/mind/spirit process with support to feel and look better in every aspect of life.
This is not the only billion dollar pot of wellness gold out there.
A trend that will fizzle or a market change?
You know the old adage that ‘the future is here we just haven’t found it yet’?
What is happening with the wellness world is similar, as it has been percolating up from a core yoga niche and alternative nutrition enthusiasts. But uniquely different as this feels more like a rising tide of consumer perceptual change than a cross over or mainstreaming process.
As recently as a year ago, it was estimated that 1 in 4 women purchased under this category, and with trillions in sales, this is hardly a niche.
A market change this certainly is and it has brought some sweeping transformations with it that are ingrained into the fitness and food sectors already, but spreading into how fashion, self help, even tech and business solutions are being sold.
Two defining pieces jump out as core.
A rapid consumerization of the market. All markets.
Remember when there was a consumer and business market, when how products were sold depended on the characteristic of the product not the channel they were purchased through or the wants of the consumer?
That was the definition of niche marketing in a nutshell. Unique language to the product not the person. This is fading and fast.
I see a predominant focus on the person as the single buyer, choosing products for family, personal, fitness, leisure and business all within the same vernacular.
Those of us who advise teams and fill whiteboards figuring out how beliefs become micro brands and brands markets, understand that this is not a subtle change at all.
Inclusiveness is the market side of an open web
Wellness at its core is about defining yourself by what you like, not by what your don’t. About connecting across differences and across category to find the binding thread.
This puts a pretty final nail in scarcity as a business model and exclusiveness as a market ploy.
The market wants frictionless, informed, fun, referential and participatory buying. In everything we buy from tomatoes to s-crm systems.
The market acid test
I’m steeped in this segment personally by investment and personality certainly, but to varying degrees most of the people across all the work that I do in many types of business, and friends from all walks of life, are part of this.
People generally are more aware of the impact of both how we eat and exercise impact our lives, but also on how our attitudes and poises in office and out, are more critical to not only mental health, but team building and productivity.
I see this as goodness.
The acid test here is not the staying power of the term, but the behavior. Not wellness as a category but people and how they want to interact and consume generally.
Whether wellness as a market or category will last over time is irrelevant.
If you push wellnes aside as a term, but embrace a sense of inclusiveness, a sense of being the market you are selling into, and address consumers cross category with the same sense of transparent openness and intent, it will be a win.
Regardless of what you sell.
That’s the test of changing markets. This one is fast becoming the status quo.