Cogblog

The Official Blog of Cogmap, the Org Chart Wiki

 

Why Young People Are The Most Common Entrepreneurs

April 2nd, 2013

People wonder why more VCs fund young people, why more young people are entrepreneurs, and things like that. I have a theory: Young people are too dumb to know better.

This is a huge advantage and it has multiple dimensions. Certainly, it was true of my first start-up. Ah, I remember it well. Our initial business plan said that if we worked really, really, really hard, we could make $35,000 per year!

That is what people are up against. Start-ups where the goal is only to make $35,000 per year. The result is that their cost structure is massively lower, they have access to talent that is incredibly inexpensive, they think 100 customers offering them $20 per month is a mind-blowing business.

But here is the real challenge: They will do anything for a buck. Think about it. If what I just described sounds pretty awesome, imagine what they would offer to do if a customer offered them $15,000. They would do ANYTHING. People with experience out in the corporate world don’t just have mortgages and families and cost structures. They have an idea of what a dollar should be worth. They look for businesses that have “models”. They look for businesses with “Market Size”. And they look for businesses that sound “reasonable”. This is probably the most heart-breaking of all. Very few “grown-ups” try to start businesses that are incredibly hard and/or expensive. They know better! It’s too hard! It’s too expensive! The model doesn’t work!

Young people will start that business and then slowly pivot their way to real revenue and profitability.

If you want to start an awesome start-up, you should start thinking more like that.

Company Culture & Advertising.com

March 26th, 2013

advertising-dot-com-logoBen Horowitz recently wrote my favorite company culture blog post of all time. Here is the key:

In this post, when I refer to company culture, I am not referring to other important activities like company values and employee satisfaction. Specifically, I am writing about designing a way of working which will:

  • Distinguish you from competitors
  • Ensure that critical operating values persist such as delightingcustomers or making beautiful products
  • Help you identify employees that fit with your mission

That is a big deal. It is not about yoga or massages or open layout or all-hands meetings or transparency. Great culture is about things that help you win.

When I reflected on it, I have only been a part of one company that had a culture that was meaningful in this way: Advertising.com.

Advertising.com had a culture centered on one event: The War Room.

The War Room was an all-hands meeting that happened every day at 9am. It was a 30 minute review of the previous days results. The CEO attended, the COO attended, everyone attended – almost every day.

This was a powerful, powerful message. Advertising.com was (is) a performance advertising network – we were arbitrageurs. We were squeezing pennies out of nickels, so there was a significant operational component to the business: When you make all of your money at the margins, neatness counts. The CEO and COO would call people out: What happened with this campaign yesterday? Why was performance not better? What are we doing to improve results tomorrow?

This had an interesting by-product: There was a culture of early risers at Ad.com. At 9am, someone important was going to ask you about the operational details of things that happened the prior day. The worst answer was, “I don’t know, I will look into that”. The best answer was, “The targeting was over-constrained, we have already made a change this morning and it is already looking better.”

You wanted to give the best answer, so you needed to be ready. You needed to have reviewed your campaigns prior to the all-hands. You needed to identify and resolve issues right then.

And if you think about it, the result was not just that the all-hands was better and you looked better: We made more money. Results the next day were better because you took care of business at 8am instead of 2pm. That is 6 hours of incremental profitability that goes right to the bottom line.

What made this work: This was a rare and real example of top-down commitment. The entire senior management team was in the room at 9am every morning. They called in if they were traveling. They were engaged. This isn’t about putting together some values and sending out a quarterly email. This is 30 minutes every day spent reinforcing the real, REAL values of the business: Operational excellence, attention to details, doing the little things that make the difference between losses and profits in a performance business.

The result: One of the best acquisitions of all time. Because the founders stayed after Aol acquired them and continued to reinforce the culture, even Aol was unable to screw it up for years and years.

Mentormania

March 19th, 2013

Mentoring is great.

I am a mentor at Fortify.vc’s The Fort incubator. You know what I get? I get to be a mentor!

Lot’s of people want to give back and I am all for that.

But I wish we had more qualified mentors.

Let me be clear: Mentor’s can make or break your business. In David Thomson’s book Blueprint to a Billion: 7 Essentials to Achieve Exponential Growth, he reviews a significant amount of documentation explaining how if a business does not have a board member that has built a billion dollar business, the odds that an entrepreneur will build their own billion dollar business falls dramatically.

You should get a billion dollar mentor for your start-up.

But most mentors, myself included, are nowhere near what you are looking for. What is really crazy is that these days, I see people that are still in incubators, not yet having found product/market fit for their product, in many cases doing start-ups straight out of college, that are mentoring! I don’t want to be a jerk, and I have no illusions that I am some special guy, but really?

On the one hand, everyone should have a mentor. Larry and Serge have Bill Campbell. Bill Campbell probably has God actively mentoring him. Are these people bad mentors? No way, they are probably great (I have never met them personally). Still, if your mentoring qualification is primarily that people have mentored you, that is a bit disturbing.

Let me spend just a minute throwing myself under the bus: My last start-up was acquired when we were just 3 people. I have never directly managed an organization larger than 30 people. I have never raised a significant amount of money. Yet I advise people all the time because I think about all the crappy advice and crappy advisors that I got/had at my start-ups and I feel like I can at least keep people from getting the same crappy advice/advisors that I got.

Still, don’t pick a mentor for how nice and friendly they are. You need a mentor that will push you. You need a mentor that you respect. Everyone is a mentor, but you don’t want them to be your mentor.

 

The Mobile Advertising Market is a BIG, BIG Opportunity

March 13th, 2013

A lot of chicken little’s have been heard from this week proclaiming the doom of everything as “digital dollars are turned into mobile pennies”. Specifically, I saw two articles that caught my attention:

Digital Cinders in the Financial Times:

While mobile ad spending is the fastest growing among all media categories, it captures $6.5bn, or just 1.3 per cent of total advertising revenues, according to Interpublic’s ad buying firm MagnaGlobal. In five years, mobile ad revenues will inch up only slightly to 3.3 per cent of total ad revenues, the group predicts.

They act like this is terrible, but this is a CAGR of > 20%! Billions of dollars flowing in every year.

Similarly, I saw this comment on AdExchanger:

Pandora reported better than expected (but still a loss) fiscal fourth quarter earnings late Thursday as the company continues to concentrate on a mobile future. See the release (PDF).  The Wall Street Journal digs into the details, “Mobile ads still aren’t as lucrative as those on traditional computers. The latter garnered $52.82 per 1,000 listening hours, compared with $25.05 for mobile.”

Now, you read that and you say, “Man, mobile totally sucks!” But keep in mind, that the CAGR is 20%+ YoY!

Display advertising has been around for more than a decade! Mobile advertising is just starting. From a market size perspective, digital advertising was around the same size as mobile is today way back in 2005! It seems to me that if mobile is in “2005″, being at 50% of desktop’s monetization is actually pretty good. I would expect that in the next two years, that 20% CAGR could increase Pandora’s revenue on the mobile side fairly dramatically.

The efficient growth of mobile value for publishers promises a bright future in the mobile advertising space. There is a lot of headroom!

I already wrote every post on Hacker News

March 12th, 2013

Screen Shot 2013-01-31 at 8.06.58 AM

I must admit, this blog post is no longer timely. About 60 days ago, I felt like Hacker News became much more technical and much less “How I didn’t get into Y Combinator and why rejection will help me win/fail”. But I wanted to make the point that if you are looking for entrepreneurial goodness, look no further! I already wrote all those posts.

Vacation and Entrepreneurs: I wrote that!

Pivoting, etc.: I wrote that!

Online Advertising is terrible (a popular HN meme): I wrote that too!

How to make $250,000 in two hours: I wrote that!

Something about technical architecture and start-up: I wrote one of those!

Complaining about Google: I did that!

The secret to recruiting engineers for your start-up: I told you that!

How my company got acquired, blah, blah: I wrote a bunch of those.

Writing better blog posts: I wrote about writing that.

Diet/Exercise/Tim Ferriss: I wrote that!

Starting Start-ups and stuff: I wrote that!

Incubators, etc.: I wrote that.

Confess that this looks like Hacker News when all the non-technical entrepreneurs are upvoting things.

What is an elite quarterback?

March 6th, 2013

tumblr_kuy6a1knoo1qz8lvoo1_500Here in the greater Baltimore/DC area, after the big Super Bowl victory, everyone is debating whether Joe Flacco is an elite quarterback. The argument goes something like this:

Joe Flacco is 9-5 in the playoffs. Tom Brady is 9-11 in the playoffs. Peyton Manning has never won 9 playoff games. Neither has Drew Brees.

Joe has won a Super Bowl, he has won a Super Bowl MVP award.

Ipso Facto: Joe Flacco > Tom Brady > Peyton Manning > Drew Brees > all

Joe Flacco is elite and he is a free agent. He should be paid $20m per year.

The counter argument tends to revolve around how he has never thrown 30 touchdowns in a season. Or how he has never thrown for more than 4,000 yards. His advocates say this is because of the offense. His detractors say the offense is geared to hide his shortcomings.

I believe these arguments stare down the wrong problem. This is much like being in business. The best programmers think different. The best CEOs think different. The yardstick is relevant, but there is other stuff also.

The reason that people do not talk about Joe in the same way that they talk about those guys is not 100% a function of winning or touchdowns. It is intangible. It is Jerry Maguire action:

What Tom Brady, Peyton Manning, and Drew Brees have is that they are the unquestioned leaders of their teams. When they switch teams (like Peyton and Drew did), they instantly, INSTANTLY, became the unquestioned leader of their new team. They set the standard, they drive the organization, and they are the tone of the business. You get in line. When they tell everyone to run into a brick wall, people run. BAM.

Joe has never had that role. Ray Lewis and Ed Reed are the leaders of the Ravens. They are real deal elite leaders. If they went somewhere else, they would be the leader there. Joe is not. It seems likely, that with the retirement of Ray Lewis, Joe will have the chance to step into that role. Ben Roethlisberger had the same challenge. The Steelers did not become his team until Jerome Bettis retired. His first few years were filled with many, many wins but not gaudy stats. Even today his stats are not insane, but most people agree that he is a Top 10 quarterback in the league.

Joe Flacco can make that next step as well. His ability to do that will define whether he takes the next step in becoming an elite quarterback.

The Secret to Product Training for Product Managers

March 5th, 2013

To understand product training, first you need to understand high school debate.800_mcbridesmall

High School debate changed my life, but one of the things that I reflect back on frequently (and thought about frequently at the time) was that I was not too smart. I would have these debates with people about the economy, but really, I didn’t understand the interaction between deficit spending, inflation, and interest rates. I would tell people things like “anthropocentrism is bad for the environment”, and that may be true, and I may have been able to articulate it well, but I didn’t really, REALLY understand it.

This is not unlike the world a sales person lives in. If she is at a company that doesn’t suck and she is good at her job, then the possibility that she can know products well is very low. I am a product manager and if I thought a sales person could know the product as well as me, it would offend me.

Now let’s bring it back. So when we launch a product, what do we do?

Let’s assume that from a materials perspective, you already have it covered: slides to add to their decks, leave-behind material, whatever.

What is the best format: Multi-format. Different sales people learn things differently – some need the white paper. Some need you to come into the office and sit with them. Some can dial into a webinar. Newsletters? Sure. My feeling is you have to do all of these things to do it well.

When is the best time: Over and over and over again. People need different formats. Also, people tune in and tune out. I have always found that training is 100x magically more effective if the sales person just talked to a customer with this problem. Part of hitting them 20 different ways over and over and over is hoping that it will be at a magic moment when they are feeling exceptionally receptive to the message.

Now here is the secret that brings it full circle:

THE OBJECTIVE: The goal is not to educate the sales people about the product. It is to give them what they need to sell it.

Think about this for a second because this is big. They don’t need to know how the product works or what it does. They need to sell it.

I have found that this is about “giving them war stories”. The products they sell every day in the market are easy for them to sell because they have sold them before. They talk with the customer about how they worked for other customers, what made them particularly effective, and why they would work for the customer. I always called this “patter”: 30 second spiels I used over and over again. I did this in high school debate, I did it in sales, and I do it now today talking about all sorts of things. I tell the same stories again and again to different people as I try to make a point. I tell them the same way, I use the same verbiage, and I have the same cadence. Why? They work. Most sales people do something similar.

Your job as a product manager, when releasing a new product, is to fill your sales people with the stories they need to talk to the customer about the product. Part of this is having a because: “Dove is softer on your hands because it is one quarter moisturizing liquid”. Sales people don’t really need to know how you got it in there if the customer will take it on faith, but knowing that it is one quarter moisturizing liquid makes it sound like it works! Recognize where this boundary is and how much you need to give information. The sales person has to be able to go deeper than the powerpoint slide you gave him, but usually only one level deeper than the slide itself.

They need a voice track that is slightly more sophisticated than the slide, but simplified in a way that is mnemonic.

Finally, they need a success story. They have to be able to relate the customers experience back to a previous experience they had that was good for a similar customer. This is the essence of consultative selling: “I did this for customer X, you have the same problem and I can take care of it for you.” A discussion like that is a critical trust-building activity for a sales person.

You have to give them that success story. This doesn’t need to be a formal case study. It can be anonymous, it can be vague, it just has to be a single talking point in the salesperson’s dialogue. And it needs to sound real.

(Attached is a picture of the legendary Brian McBride, a man I idolized in high school, (although I knew him when he was ~19 years old, so maybe it is a stretch to call him a man in this context) (He also had much better hair at the time). He invented the “kritique”, a philosophical argument used by almost every high school debater in the country today to argue that discussing certain things in the context of debate is so offensive that it should cause him to lose (e.g. For a man to propose a policy to help women is to further repress women by enforcing the patriarchy.))

 

 

Product Management Roadmaps, Example and Discussion

February 26th, 2013

Plan Cannot Fail

When I google “Examples of Product Management Roadmaps”, the answers are all nonsense. This blog post is expected to serve as a better #1 result.

My most popular blog posts are the long-form posts where I explain to people how they should do things. In that vein, I am desiring to start a new series of posts on Product Management. My first post is intended to answer the following question: As a product manager, when someone asks me for a product roadmap, what should I give them?

First, as with virtually all of my blog posts, I have some caveats:

  • All of the businesses I like to join are growing at more than 30% YoY. That means that multi-year time horizons are ridiculous. 6 months is the firm plan, 1 year is the strategic plan, 2 years is the vision. Many people think a roadmap is 3-5 years. I am unsure what industry I will be working in 5 years from now. So I don’t do that.
  • Different people mean different things when they say roadmap. Sometimes they are asking you to lay out a market driven vision for the company. To me, that means something else – it is usually more closely related to the fund-raising deck. In this discussion, the best situational case is that a customer (internal or external) wants to “know where the product is going”. Telling them about market demand or customer research is only tangentially important – they want to know what you are doing for them and when, not so much why, except in-so-far as it justifies or de-justifies projects related to them.
  • Of course, it is all software, generally enterprise. With consumers or non-software, your mileage may vary. Although it seems on-face relevant.

This is not a caveat in the same sense, but it is an important point: Product Roadmap decks for external customers are different than roadmaps for internal customers. Typically, I will lag product commitments externally by one quarter (The only things they are getting this quarter are things that are already code complete/in-testing/being rolled out). Also, you probably want to filter out roadmap activities that are not contextually appropriate for the client or are confidential.

Finally, the document I am sharing is based heavily (100%, basically) on Ian McAllister’s concept for Product Roadmaps on Quora. Frankly, my contribution is producing an actual reference deck.

So I have attached an example (fictional!) product roadmap for Cogmap to give you a sense of how I organize it.

Download an example product roadmap now!

This deck has both examples and comments in red. Plain red comments are straight commentary from Ian’s Quora post. Bold red comments are my additional opinions.

Powerpoint is the best format, of course, because it may need to be injected into other content.

This deck is also designed to be easy for me to refresh. This usually gets refreshed quarterly.

This is not the end-all, be-all of product roadmaps, but I want to improve the discourse in this area, so this is my contribution.

Is this blog an inefficient use of scarce resources?

February 24th, 2013

I think it is a fair question to ask my readers: Would you prefer tweets to blog posts? Is the long form format consuming too much of your attention without delivering value? It certainly takes me a lot longer, even though I try to be a good writer (“I would have written a shorter letter, but I did not have the time!”)

As I have been working on some particularly lengthy blog posts, I wondered: Maybe I should be posting this slide show to slideshare and tweeting a link and be done with it?

Please take a moment and let me know how you would like to consume my content.

Ad Network studies continually represent network as modeling the space!

February 18th, 2013

The Onion recently released an article entitled “Cogmap, dismayed over poor data quality of other vendors, releases one man’s opinion in data sampling errors”. Link below!

Flurry recently released a delightful set of Mobile 2013 data, but they did not caveat it enough for my taste. (I will soon be guilty of doing the same thing, FWIW.)

So I thought I would complain because, in short, when I see an ad network release data my perspective on every single slide is “How is this skewed by network composition”. And usually the answer is: “I bet it is skewed a lot.”

A couple of examples:

Screen Shot 2013-02-18 at 9.35.28 AM

 

This is kind of set-up as “the growth of mobile”, but really it is the growth of Flurry. What we need to add to this is a retail storefront data point: How much of this is “same store sales” versus “new sales”? I will say, Flurry is big. This data is probably pretty good, but it is probably not unfair to say that many of their biggest customers are probably tracking a lot more data than they were. This could cause in-application events to skyrocket even as application usage remained static. Those big jumps could be a change to the way Angry Birds tracks apps, or it could be the installation of a new app, or it could be some broad market growth descriptor. It would be nice to know which.

Much later, we saw this slide which has similar issues:

 

Screen Shot 2013-02-18 at 9.36.48 AM

 

They disclose that this data comes from Flurry. So this is really more about their network composition. This means that one of two facts is true: They either have Facebook or they don’t. If they have Facebook, then their data sample over-indexes the Social Networking (i.e. they capture most of the Social Networking activity happening in phones, but they don’t capture all of the other activity.) If they do not have Facebook (as seems likely from this graph), they are missing most of the social networking activity people perform on their phones. Instagram? If they disclosed the sites they track, we could better understand the relevance of this data.

Last slide:

Screen Shot 2013-02-18 at 9.36.08 AM

There is a more interesting problem here: They are comparing apples to oranges. They pull the television time from the Bureau of Labor Statistics, then they pull the web browsing time from comScore and Alexa, and then they pull the Mobile App numbers from their own data. I assume that the Bureau of Labor Statistics does a good job controlling for people that don’t consume any TV – and I assume that pulls the average down substantially. I assume comScore does an OK job controlling for this – once again, pulling the average down substantially. I assume Flurry does a terrible job controlling for this – they are not really that kind of company, why would they? So I suspect that this data is quite wrong.

I know people in glass houses shouldn’t throw stones, I just can’t help it. If you are still looking for the Onion article about me, go buy a book from the Onion using my affiliate link. You owe me a nickel for falling for that.