I watched this episode of This Week In Startups yesterday where Jason Calacanis interviews Glenn Kelman, CEO of Redfin. Kelman shares several key learnings and advice for entrepreneurs and leaders, so it’s worth watching the episode.
The advice that stood out to me the most is that sometimes the team just needs someone to make a decision. As a leader, when you see your team paralyzed in an ongoing debate, you need to step in to settle the debate by making a decision – not necessarily because you know that the decision that you’re making is the right one, but because the team just needs a decision to be made in order to move forward. I’ve seen this so many times. There are no clear answers in business. And, teams can get wrapped around the axle debating based on data, experience and even opinion. Leaders need to feel comfortable stepping in to settle the debate – even if they don’t know they have the right answer.
This reminds me of Colin Powell‘s rule of thumb when making tough decisions: you should have no less than forty percent and no more than seventy percent of the information you need to make the decision. If you make a decision with less than forty percent of the information you need you are shooting from the hip and you will make too many mistakes. If you get more than seventy percent of the information you need to make the decision then the opportunity has usually passed and someone else has beaten you to the punch. You need to be comfortable making the decision with forty to seventy percent of the information you need to make the decision, and then go with your gut. Lean into your intuition. Many times it will be wrong, but often it will be right. And, either way, the team moves forward and learns from the decision.
Last week, Snapchat’s parent company, Snap Inc., filed paperwork for an IPO, with an expected valuation of $25 billion or more. In 2014, Snapchat introduced advertising into the platform. In 2015, it generated $60 million in revenue from that advertising, and, in 2016, it expects to exceed its target of $350 million in revenue. Snapchat is targeting $1 billion in revenue in 2017.
Snapchat reports 150 million users daily and 235 million users monthly, including 41% of 18- to 34-year-olds in the U.S., according to Nielsen. Snapchat shows strong signs of being a healthy business. With continued user and revenue growth, Snapchat will be a hot company for several years to come – even with the new scrutiny of the public markets.
But, long-term, Snapchat could face a similar issue as Twitter: being a company that offers only a niche audience advertisers. Unlike Google and Facebook that offer a large and broad range of audiences to advertisers, Snapchat caters mainly to younger Millennials and Generation Z audiences. Facebook touts ~1.71 billion monthly users – approximately 25% of the world’s population. By comparison, Twitter has ~313 million monthly users. Twitter has struggled in recent years to win over investors – primarily because it is compared to Facebook. Twitter has only ~18% of the monthly users that Facebook has. And, Twitter has been criticized for its slowing user and revenue growth while being unprofitable. Twitter’s stock price has dropped from $69 per share at its peak in January 2014 to $18.79 today.
While we can expect that Snapchat will continue to grow its user base at a nice rate for the foreseeable future, as it captures more of share the 34-year-old and under audience, the real test will come when Snapchat can no longer rely on that audience for user growth. It will need to stay relevant to the new young audiences entering their teens and twenties, while expanding its relevancy to older audiences. And, it will need to do this while achieving profitability. Otherwise, in a few years, we could be seeing Snapchat face similar issues that Twitter has faced in recent years.
I spoke to a class of advertising and PR students at University of Texas last week. Below is the Slideshare of the presentation that I gave. This is an updated version of previous presentations I’ve given on my Reciprocity Theory and The Purpose Economy. I dive into foundational human behavior, technological revolutions, socio-economic evolutions of the last fifty years, and what this means for marketers.
It’s time we seek out women leaders. I’ve worked for male led companies my whole career. While I have always connected with some mentors to coach and develop me, mostly the companies that I’ve worked for have been harsh and competitive environments. The women that succeeded in these environments had to be as cut throat – if not more – than the men, having to sacrifice their personal lives to get ahead at work.
My wife, Courtney, just went back to work after five years at home raising our kids. She joined StitchFix because there was just something different about that company. Founded and led by women. Purposeful about how they develop their people. They encourage their people to take time off and actually check out of work when they do. They encourage their people to not over work themselves and to spend time with their families. Many employees are working moms with impressively balanced lives. And, yet, it’s an incredibly healthy business that hasn’t gotten caught up in the media and capital-raising frenzy of Silicon Valley, even though it’s founded and headquartered there. This opened my eyes to what women led companies can accomplish.
I recently joined WP Engine, another women led company. 2/3 of our executive team are women, including the CEO, CFO, CMO and SVP of Customer Experience. The company is values driven and has won no less than 5 best places to work awards in the last 2 years. The people are incredibly collaborative. The business is also very heathy and growing rapidly. It’s an exciting place to be. And, it’s a testament to the values and culture that our Founder and CTO (a man) instilled in the business from the beginning and that our leadership team has embraced and built upon.
My eyes have opened up to the power of female leadership. We need more women to step up into leadership roles – even if they don’t believe they’re ready yet. Statistically, women tend to hold back from pursuing new roles until they feel they are qualified and have the experience the role needs, while men tend to pursue new roles despite not having the experience. So, we need more women to step up and take the leap of faith that they are capable. As men, we need to actively seek out and encourage more women to step up into leadership roles. I think our world, businesses, governments and families will be better for it.
I discovered this TED Talk from Halla Tómasdóttir about her journey running for president of Iceland. It touches on the struggles that women face in becoming leaders, but maintains an inspiring tone. My favorite quote from the talk and the video below. Take a look.
“What we see, we can be. So, screw fear and challenges. It matters that women run. It’s time for women to run for office – whether it be the office of the CEO or the office of the President.”
As much as I’ve tried to go completely digital in my note-taking and creating To Do lists, I keep coming back to pen and paper. The process of writing things down just helps me absorb information and store it in my long-term memory.
Being a writer at heart, I’ve become a loyal Moleskine user. I’ve continually been impressed with their innovation in connecting the analog and digital world through their products, while maintaining a classic look and feel in their notebooks. But, this morning on Fred Wilson’s blog, I came across this wonderful project on Kickstarter to redesign the classic composition notebook using modern technology. This brings back so much nostalgia from grammar school all the way up to high school when I first started writing more purposefully. I couldn’t help myself and backed the project. Take a look. Maybe you’d like to support it too.
The single best indication of someone’s abilities, from CEO on down to the front line employee, is the quality of the questions that he or she asks.
The more experience I gain in life, the more I’m convinced that the above statement is true. Not only does the quality of questions a person asks reflect that person’s curiosity – a character trait that is immensely important in the business environment – but also, it reflects the person’s ability to think effectively, and influence both decision-making and action.
All too often, leaders are measured by the frequency with which they speak and their loudness in the room. This gets misinterpreted as having a “presence.” They’re interpreted as the smartest, fastest person in the room, and the company becomes reliant on his visionary and decision-making capabilities. And, it leads to a command and control culture that actually handicaps the speed with which the organization can move and innovate.
By contrast, leaders that listen first and ask poignant questions can quickly lead a team to a breakthrough insight and enroll the team into action around that insight. Indeed, while people might follow an order, they still want to, and will, come to their own conclusions. If this conclusion is out of alignment with the leader’s order, the leader will quickly find his directives silently questioned, challenged and usurped in the daily actions of the organization. Brilliant questions, on the other hand, are designed to lead a team to the same conclusion, and, ultimately, to aligned action around that conclusion.
Questions reflect a person’s ability to expand the context in which an organization operates and the possibilities that an organization creates. Questions reflect a leader’s ability to coach and guide her her team. Questions reflect what is important to a person. Questions say a lot about a person. So, chose your questions wisely.
Airbnb is in talks to settle a suit in which they sued New York City and New York state after Governor Cuomo signed a law that would impose fines on Airbnb hosts that break local housing regulations. According to a Bloomberg article, people that advertise vacant apartments in a multi-unit building for 30 days or less could be fined as much as $7,500 (for repeat offenders). People are still allowed to rent out a room in their house or apartment as long as they are also staying there.
The settlement of Airbnb’s suit concerns whether or not the company will be liable for fines incurred when users of its platform break local regulations. Airbnb claims that the new law seems to target its company and violates Section 230 of the Communications Decency Act, which protects Internet intermediaries (such as Airbnb) from being held liable for content published by its users on its platform.
My city of Austin, TX has seen similar regulatory tension this year. In February, the City Council imposed regulations to restrict short term rentals that are not owner-occupied, limiting Airbnb and Austin’s own darling, HomeAway, from operating in the city. In May, Uber and Lyft lost Proposition 1, which aimed to let the two TNCs (transportation network companies) self-regulate background checks for their drivers. In a fairly tight election, Austin citizens voted 56% against Prop 1 and 44% for it – leaving it to the city to run the background checks on drivers. Uber and Lyft left Austin’s city limits instead of complying with the new law.
What we’re seeing is a natural tension between fast innovation in the private sector and slow evolution in the public sector. Regulators at city, state and federal levels are grappling with how to manage the changes brought forth from companies in the sharing economy. These companies are eliminating wasted capacity at a rapid rate, and that can have some positive and negative side effects. A frequent complaint around Airbnb and HomeAway is from neighbors of the apartments or homes that are being rented out – that the guests at these short-term rentals are disruptive. On the other hand, Austin saw a 12% drop in drunk driving crashes after Uber came into the city, and then saw a 7% spike in drunk driving incidents immediately after Uber and Lyft left the city.
Personally, I believe that the benefit derived from these companies outweighs the negative impacts. But, I do believe these companies need to strike a balance between entering a market and proving customer demand, and proactively engaging regulators to find a reasonable long-term regulatory framework for operating these new business.