Boston Globe and Snapchat

Two seemingly unrelated stories over the summer of 2013 should seriously wake you up.

At face value, it wouldn’t appear these events are connected but pause and think about them and realize the implications.

The Boston Globe was founded in 1872. It is the dominant newspaper in America’s oldest city with nearly 3x the circulation of its rival. There are apartments in Manhattan for more than the price Mr. Henry recently acquired The Globe for from the New York Times. Think about this – it was owned by the New York Times, arguably the single most well known newspaper company in the world, and it couldn’t survive. Oh, and they paid over a billion dollars for it in 1993.

snapchatThe Snapchat ghost is laughing at you.

Meanwhile, Snapchat started as a student project at Stanford at the end of 2011. Its creators, Spiegel and Murray, were basically dismissed by even fellow students for the notion of a social network based on impermanent pictures.

(Background on Snapchat: users take pictures that last for between one and ten seconds on the recipient’s phone).

The average user of Snapchat is 13 – 23 years old and the majority of “Snaps” are selfies, where the user takes a picture of him or herself. It’s no secret that a healthy percentage of “Snaps” are not safe for work, as a subtle description. Within one year, one billion photos had been shared with twenty million photos shared per day. While Snapchat doesn’t reveal its user base, its users are now sharing 200 million pictures a day. Until early 2013, Snapchat was still operating out of its founder’s father’s house and had less than ten employees, including the founders.

The amount of money Snapchat just raised is more than an almost 150 year old newspaper in one of America’s biggest cities with over 25 Pulitzer prizes just sold for. Let that sink in.

What are the implications?

  • Content: People demand content – and a lot of it. Some newspapers have done a great job of moving to mobile and creating a wider array of content (albeit a bit belatedly). There’s a time and a place for all content – even ephemeral and seemingly nonsensical. Certainly there is a difference between reading a random blog and the Wall Street Journal, but the “content kings” of the media no longer control all that is seen and heard.
  • Consumption: The ways in which people consume content will continue to evolve. It’s no longer enough to just have mobile and a Twitter/Facebook account if you want to connect with everyone. You can choose not to engage with new platforms (whether it’s Pinterest, Snapchat, or whatever’s next), but you may do so at your detriment.
  • Value: Gary Vaynerchuk wrote an amazing piece for Medium last week entitled “Value is Subjective. Even When It’s a Little Ghost.” His point was that you may think Snapchat is stupid (disclosure: I do), but there is a huge number of people who find value in it, so don’t write it off. You can examine it and choose to pursue other routes as the best way to move forward with your time, money, or business, but think back to how many people said Facebook and Twitter were stupid. Early adopters of these new technologies and networks, like Gary himself, have created enormous advantages for themselves.
  • Opportunity: Lastly, take heart in knowing that an idea dismissed by many at its inception is now worth almost a billion dollars (relevant context restated: Snapchat is now almost worth what the NYT paid for the Boston Globe in 1993). Get off your butt and go create something, anything. You have no excuse not to. While I don’t buy in to the inflated valuations of Instagram and Snapchat – and I recommend you not chase them or bank on them as your only option – shouldn’t it prove to you that an incredibly simple idea, even one that seems foolish, could be something huge?

On that final note, something to remember about the difference between an idea and execution.

strikingtruths_go-do-it

My First Fifty CrossFit Days…

… I’m never going back.

Friends had been telling me for years to do CrossFit. I’ve been a “GloboGym” guy since high school. I’ve always enjoyed weightlifting and hated cardio. I figured I knew what I was doing after more than a decade in the gym – why did I need to do CrossFit? Weightlifting defined a big part of who I was. I spent an hour or two five to six days a week every morning before dawn. I didn’t need someone to tell me how to work out. To be clear, I did more than crunches, curls, and bench press and even competed in an amateur bodybuilding competition in college. I also looked at the guys who were at the elite CrossFit level and thought to myself “There’s no way they do a five minute workout and achieve that level of fitness.” After staring, admittedly curiously, from the outside in, my friend and business partner Web Smith finally got me to give it a go.

There was no question I was going to CrossFit Dallas Central to give it a shot. Widely viewed as the best CrossFit box in Dallas (“box” = gym), I’d even heard it’s one of the best in the US.  One of my first reactions was a bit of sticker shock at the price. Gold’s Gym was $50 a month. I was looking at $200 a month to join CrossFit. I had enough people at this point in my life telling me I had to try it that it was more than worth a one month trial. Having started a clothing company last year, something else I’ve learned first hand is that quality is never cheap. It it’s a great product or service, it’s going to be worth the cost. Our “chasing cheap” culture has distorted reality to an unhealthy level with everyone expecting things to cost less than it takes to actually deliver that product or service. There exists an almost automatic assumption that there should always be a discount, and if it costs more than something in the same product category, it’s too expensive (even if they aren’t really comparable). Past the signup, I got my world rocked.

I can’t remember my first week of workouts in terms of specific movements/time, but I can remember being humbled as never before. There will always be someone faster or stronger (unless you are Rich Froning), so it wasn’t that someone finished something faster or with more weight… It was that I felt like the workout had obliterated me. No exaggeration. I remember collapsing on the floor thinking “But wait! I’m FIT!”. The important distinction with CrossFit is that you may be able to run a marathon, but you can’t lift much weight at all. You may be incredibly strong, but if you have to row a 1000 meters, you may actually pass out. CrossFit is all about exactly what their slogan says “Forging Real Fitness”.

Perhaps even more amazing than this realization that I was nowhere near as “fit” as I thought I was, was the bonding experience that took place almost instantly. From the coaches to those getting obliterated with me, the sense of community is phenomenal. Perhaps shared suffering (and of course triumph at the completion of each WOD) is a stronger bonding tool than I had ever realized.

This false sense from those who have not ever even tried CrossFit that it’s a bunch of workout lunatics/muscle heads couldn’t be further from the truth. I’ve seen the fittest people right next to those who are one hundred pounds overweight, all doing their best to improve their own fitness level while encouraging each other. From teenagers looking to get ready for soccer tryouts to men and women old enough to be grandparents, there is absolutely something for everyone. You do not need to get fit in order to show up on your first day. The coaches will tailor workouts to your level and push you, in a healthy way, for consistent improvement.

So about my “fitness” level… I rarely combined aerobic activity into workouts. I’d never done an overhead squat. I’d play with my phone or have long conversations with friends at the gym. I’d gotten really good at specific movements and while I was “strong”, I now understand I’ve just scratched the surface of true fitness.

Can’t wait for what’s next. Thanks Web and Lindsey Smith for opening my eyes. Thanks to the CrossFit community for welcoming me and making me want so much more for myself.

What they were bad at was making money…

Things are not going well over at Zynga.

While I always root for companies to succeed, it’s not all that surprising to hear that the company responsible for 1,400 invitations I’ve received to play pretend farming with lackluster visuals isn’t doing well, particularly when they pay nearly $200,000,000 for a company with a history of failures and a poor track record of making money.

A little over a year ago, another app was “on fire” called Draw Something by OMGPOP. It acquired almost 15 million daily active users in 6 weeks. That’s truly an unbelievable figure, particularly because it was a paid app. A bit of analysis by Tech Crunch poked more than a few holes in it’s monetization potential though: people paid a small fee upfront to download the app and in app purchases were “durable”, meaning people could retain their in app purchases (such as color packs) rather than virtual currency like other Zynga games that was “spent”.

But… like a lot of what happens in tech, there was a huge amount of hype with very little meat on the actual bone. FOMO, or Fear of Missing Out, ruled the day. Plus, with so much hype and people engaged, it’s a guaranteed success, right? Where has that not worked out before?

Andrew Carr wrote a great piece recently with some very enlightening insider interviews about the bungled acquisition which has caused Zynga to write down nearly $100 million on the OMGPOP acquisition. The most enlightening quote of all?

“I knew the OMGPOP guys–they were really talented, and really good at making games,” says a former Zynga general manager. “What they were bad at was making money, and they were struggling for a long time.”

The enormous war for talent in Silicon Valley – and the broader tech world – is no secret. Many companies are bought outright by larger ones just to bring in good engineers and developers, with the company purchased being not all that important to the new parent. This “acqui-hire” model is currently being debated in many circles, but it’s clearly not without its major flaws. The biggest flaw has been watching those “acqui-hired” depart as soon as their lockup period expires. Another insider was quoted saying “The cofounders who get hired in will stay for exactly how long it takes to vest in whatever exclusionary clause was in the acquisition. I think there are very few people who are still left who came through acqui-hires…” This has implications, on stock price and profitability, as others see things being run poorly along with hitting employee morale. Says a former designer, “I wish that they would focus in on their own employees a little bit more, because people in there have great ideas.”

When companies focus a bulk of their energy externally, chasing the next hot thing for fear it will overtake them, rather than focusing on creating value internally and building products and services that people are actually willing to spend money for, it catches up with them. Zynga’s market cap at the time of the OMGPOP acquisition was just over $10 billion. What’s a measly $200 million? Zynga’s market cap today hovers around $2-3 billion. One mistake or failed acquisition is understandable, and OMGPOP’s astronomical acquisition price and very real flameout bring a lot of attention; however, it’s clear this strategy has been more the rule than exception, and reality is beginning to set in. I wrote about this problem recently.

OMGPOP did not have a successful track record. The (overpriced) acquisition was mostly based on the skyrocketing (month long) growth of one app and apparently the talent of some of their developers. Some people may disagree with my (and other’s) analysis, saying that talented developers eventually create value, even if they aren’t successful at first. That is completely reasonable. Paying $200 million (for one popular, but fiscally lukewarm success) is not. A great deal of what Apple has built over the last decade has been predicated on acquisitions (touch screen technology, a good deal of the software). Acquisitions are a valuable tool for growth and innovation, when pursued rationally and successfully incorporating them into the company’s already proven innovative ecosystem.

What’s clear is the focus of Zynga has been more skewed towards chasing popularity than creating real value from the inside out.

Start Something.

Start Something. I think this is an amazingly simple challenge that can have profound implications for our economy and society at a macro level and our overall wellbeing and outlook on so many things at a micro level.

Start something, anything really, as long as it something in which you can make money. You don’t have to go start the next multibillion dollar business empire, next Facebook, or even the next hot gaming app. Why? There are a few main reasons.

Start Something

  • Experience. The experience of accomplishment (or failure) that is yours. Working for others, for companies, will mean that your successes and failures are always on on other’s shoulders – your boss, your coworkers, your direct reports, and the company’s shareholders. When things go well, or poorly, generally, the accolades or blame get spread around, even if it was virtually all because of you or in spite of you. Even if it was your idea, your execution, and even your job on the line, with almost virtual certainty you relied in some way on company resources, capital, prior experience, connections, reputation, and personnel.
    It’s an indescribable feeling when you can look at something you made or a service you provided and know that someone paid their hard earned money for it.
  • Ownership. If I were to say “lemonade stand”, most of you would likely think of young kids selling lemonade in their front lawn. It’s a fantastic experience as a kid, mostly because it’s all profit for you, but to make something yourself, then watch as people give you money for your time, effort, and product.
    What I’m speaking of isn’t vastly different – maybe you have some artistic or crafty talent, you’re really good with computers, or perhaps could be a freelance personal trainer to help friends or family get in shape. Whatever your talents, use them, even if it’s selling hand made candles out of your house or apartment. The feeling of ownership is one our society is lacking on a growing level. Knowing that you can build something or offer your skills or talent is a powerful feeling, and one that you will never fully realize working for someone else.
    This doesn’t mean you have to quit your job and be a starving soap maker. I’m merely saying start something that is yours, even as an occasional activity at night or on the weekends, to really get that amazing feeling of ownership.
  • Opportunity. Do you notice how those that are successful just seem to have the right opportunities fall into their laps? I promise you, that isn’t true. They are out there working their tails off every day, whether it’s building a business as an employee, as a partner, as an owner, investing in others with their time and resources, or networking and proving their worth as a person with whom others would like to do business or just simply be around.
    You’ll be surprised at the opportunities that begin to present themselves when you begin to put yourself out there.
  • Understanding. There’s a great deal of hostility towards business owners these days. Walk a mile in their shoes, even in your own small way, and begin to understand things in a new light.
    Certainly negligent or malicious business owners deserve the scorn they receive, but the large majority of business owners are men and women who wanted to build something of their own, hire a few employees, and make their own way in the world.
    Daymond John recently said “Being a boss is this: Your employees don’t like you. Your family doesn’t think you’re doing enough at home. You share the success with everyone, and the failure is yours alone.” It’s no cakewalk, despite the widespread perception.
    Business owners are also the ones who create jobs – no one else.
  • Economy. That is a perfect segue. New businesses, new products, new services. These drive us forward. The beautiful thing about starting something is it’s not a zero sum game. Think about GoPro – they created an entire industry around high quality video cameras on the go out of virtually nothing and destroyed no other businesses in the process. This results in more jobs and new opportunities others had never imagined.
    We need people who are willing to take risks and grow this economy. Status quo is unacceptable.

Start something. Anything. Do it for the experience and fun at first, then grow. Get to a point where you are ready to start something great. Something that will have a real impact on the world. Don’t worry about changing the world with your first go – doing it at all is more than 99% of people. As you gain experience, aim higher than a flash in the pan or a quick buck. It will be so much more rewarding than all your past experiences combined.

Please don’t misconstrue this challenge. It is vitally important that people start and continue efforts to help those around them, their community, and those that deserve our assistance. Another disclaimer that must be said: anyone who starts something is likely going to rely on the help of partners, employees, investors, or family and friends at some point. That does not diminish the points made above, and if you are fortunate enough to start something and receive help from those around you, be sure to recognize it.

Was this in your business plan?

Progress

These two images were apparently both taken in St. Peter’s Square, one in 2005 when Cardinal Ratzinger became Pope Benedict XVI, and the other in 2013 when Cardinal Bergoglio became Pope Francis. Honestly, these pictures could have probably been the exact same in 2007 and 2012, meaning only a 5 year difference. Businesses frequently work on their 5 Year Plan, carefully charting out the future of their company’s efforts and finances.

So… was this in your business plan?

Look at how people receive information, share information, and process information today versus even a few years ago. The iPad will be 3 years old in April of this year. Let that sink in. Remember when everyone scoffed and said “It’s too big, too small, can’t make phone calls, and isn’t a computer.” How’s that working out for you?

Business planning is a necessary endeavor, on many levels, but it’s clear we see far too many businesses writing their plans out for the future and ensuring they do everything they can to stick to them, even following them right into bankruptcy. “But it’s the plan!” you can almost hear management cry out… Certainly companies (and people) should not chase every new opportunity just because it’s there (FOMO, or Fear of Missing Out, is equally detrimental as “sticking to the plan” in my opinion), but I watch many companies today completely ignoring the freight train of reality coming straight towards them. Kodak and Blockbuster (and perhaps Blackberry though there may still be a small chance for recovery/turnaround) are two great illustrations of the picture above being played out in reality and knocking these once dominant (even industry defining) companies out of existence.

And to the person in the foreground of this now widely circulated image, please do us all a favor, and stop taking pictures with your iPad. Thanks Tumblr.

*All image rights to their respective owners (Luca Bruno, Michael Sohn, AP, NBC). No copyright intended – this is just sharing*

Do something that matters.

Brent Beshore recently shared an article titled “The Hypocrisy in Silicon Valley’s Big Talk on Innovation” which challenges many out there talking about their hugely important projects and super sexy startups to remember that the newest timewasting app (or, let’s be honest, the 10,000th productivity app) may not be all that innovative, or all that important.

It’s an interesting article, particularly in the light of the current reality of many of the “hottest startups” in recent memory. Andrew Mason of Groupon was forced out of the company he started last month. Living Social is in dire straits (some may disagree, but their financials speak volumes). Remember when group couponing was going to revolutionize commerce? The insane valuations of investors crazy to pour money into a “sure thing” that was “innovative” beyond any doubts seems almost comical, in retrospect. One thing Groupon and Living Social have accomplished is a strong contribution to the race to the bottom on prices and quality many companies are locked into these days, destroying company and product value and consumer perspectives on what something is actually worth. Looking at Zynga, another innovative next big thing, tells a somewhat similar tale. Things aren’t going well, in terms of management (Founder forced renegotiations on equity promises when things were going well), stock price, or future. Even Zynga itself got caught up in other’s hype when it paid $180 million for Draw Something, an app that became hugely popular in a relatively short period of time. It’s taking a $100 million write down on that purchase. These are just a few examples. Certainly we’re seeing great things in innovation and tech these days (from Twitter and Square to Tesla and Shopify), but there is a continued fascination and obsession with a multitude of companies that seem highly talented at raising money and making noise rather than building real companies of true value. Why?

Real Work

For what little my opinion matters on the subject, I think it comes down to three things.

  1. Short sightedness. This is on behalf of both the investors and the entrepreneurs. The few stories we hear today of founders and investors cashing out for hundreds of millions after 3 years has poisoned people’s thought processes. Building something of real value takes a long time, great sacrifice, and more than most could ever imagine. If you’ve cashed out early for hundreds of millions, it was almost certainly a fluke. Since tech companies seem to be all the focus, let’s look at the ones we rely on the most: Google, Apple, Microsoft, Samsung. These companies took years, even decades, to build and massive investments. There is no get rich quick. There is no build value quick. There is only hard work. Time will tell on Facebook’s real valuation (read: value). Right now, in pursuit of calming investors, they are making just about every single one of their users incredibly frustrated at every turn. Look at LinkedIn: once the ugly duckling of social media, they are the darling of the investor world today because they are creating real value and something people actually want and need. Twitter remains a toss up in my opinion – it is fundamentally the most transformative communication tool since the cell phone, but let’s see how they handle things moving forward.
  2. Tech. Tech isn’t a dirty word, but it is distorting perspectives on what is worthwhile and valuable. The ability to scale an app company quickly, reach millions, and quickly flip it for $180 million (see Draw Something) or $1 billion (see Instagram) has changed the way people pursue innovation, has changed the way investors look at risk and reward, and has changed the public’s perspective altogether. Look at Elon Musk with SpaceX and Tesla Motors. One man (supported by investors and an all star cast of employees, of course) is responsible for carrying the greatest nation on earth’s dream of space travel forward through his private sector efforts WHILE ALSO building the first real attempt at a viable electric car company. Most of the country laughs at him and says he’ll never make it. While many probably laughed at Steve Jobs and Bill Gates, monumental gains in demonstrating what is possible (computers, cell phones, satellites, the internet) should have us cheering for Elon and others like him rather than worshipping a photo filter app… For some reason, most aren’t.
  3. Distractions and Ease. The first two aren’t really the general population’s fault. They’re really more reserved for investors, entrepreneurs, and the media (particularly the startup media). We aren’t getting off that easy though. As Gary Vaynerchuk said, “Stop watching F-ing LOST” (I’m paraphrasing here and in full disclosure I absolutely loved LOST). Many people say how busy they are and how little time they have to a) do something that matters or b) do something they really want to do. I don’t need to quote any articles to point out how much time is spent wasted on Angry Birds, Social Media, or picking your latest filter. Sure, there’s a time and place for fun and social media is an amazing tool for business, communication, and maintaining friendships… but they’re also fantastic time wasters. Many people have lost sight of the big picture because they are focused on the very small screen right in front of them with flying birds that knock down pigs. People can get quite frustrated when their phone freezes or they lose service on a phone call. While this is indeed a frustrating experience, many forget the hundreds of billions of dollars and too many hours to count that went into creating computers, processors, cell phones, satellites, infrastructure, new forms of programming so on and so forth. The ease with which we live our lives, and the very entertaining distractions, have made most of us lose sight of what really matters and how hard it is to really build something of value.

I’m not trying to suggest that Mizzen+Main is a cure for cancer, or that we shouldn’t be excited and engage with fantastic tech developments. Not at all. I am all the more convinced, however, that we are on the right path to building something of real value, something that matters, and something that can have a very positive impact on our communities and our country. For a great perspective on our journey so far, please check out my brilliant cofounder’s thoughts on How to (Really) Found a Startup. It feels good to be getting our hands “dirty” (don’t worry we wash them before handling the fabric!), it truly is a labor of love. We’re building real products and aim to build something of true value.

In response to Brent, I said that companies need to aim for more than the next “hot app” while investors need to aim for more than a quick flip. Brent summed it up nicely: “Do stuff that matters”.

Please let me know what you think on Twitter @KevinSMU.

Get it done. Period.

Of all the things that have been most surprising in starting a business, I think the lack of interest in earning new business or retaining existing business I’ve experienced from a number of vendors has to take the top spot. It also makes me appreciate vendors, or companies I am a general customer of, who don’t just do the bare minimum, but go above and beyond. In a world of low-touch interactions and poor customer service, any business has an easy shot at standing out from all the rest. I came across this quote recently and was struck how many different ways it applies to being successful in business. It also reminded me of how much I love companies that I work with that I know will just get “it” done. Whatever it is. I know I can trust them to get it done.

Be A Good One

“Whatever you are, be a good one.” Abraham Lincoln

  • If you are starting out as an assistant, be the best assistant there is. You won’t be an assistant for long.
  • If you are in charge of new business, don’t let anything or anyone slip through the cracks or feel like they don’t matter. Trust me, you’ll be at the top of their mind anytime they have to make a decision related to your industry. If they can’t choose you for whatever reason, be it price, timing, etc., they will recommend you to their contacts or network. You won’t be in charge of new business for long, because everyone around you will see how much potential you have to get things done and get them done right. You’ll be in charge of all business, operations, or the company.
  • If you are a customer service representative, each customer should feel like once they call you, you will take care of their problems on your side of the fence. People are way too busy, all the time right now. If a customer calls you and says “I have a problem.” When they hang up, they should feel like 1) it’s resolved or 2) you will personally see to it that it is resolved.
  • If you are a sales representative, don’t make your clients or customers work to give you business. This should go without saying. If you make them work for you, you won’t be a sales representative long – you won’t have a job or, if you are the only representative, your business may fail. If you work your tail off for them, you won’t be a sales representative long – you’ll be in charges of sales, or the company, soon.

See a pattern?

I strongly encourage you read this article called the $4 Million Complaint Call. In a nutshell, one customer named Bob required an enormous amount of help with a software package, including basic training on how to use the computer itself. While some at the company encouraged the CEO to give up (“We can’t AFFORD to help him – just refund his money and move on”), he didn’t. Six months later, a call came in out of the blue with a new company requesting to standardize their systems on this company’s platform. How did they know they should select this company? Bob was brought on to their team a few months earlier – he said there was no one better to go with.

One final thought: things go wrong. All the time. If something can go wrong, it will. Maybe not now, but sometime soon. Don’t lose yourself. Don’t start cutting down people around you. Just get it done. Be the person that people want to have on their team, as a partner, as an employee, as a boss, or as a friend. People should know that if you’re involved, you are so good, whatever needs to get done, will.

Whatever you are, be a good one. Get things done. Period.

Everything else will fall into place.