Category: Notebook

An interesting left turn

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Most of the amazing outcomes in my personal and professional life have come when I favor an interesting path over a sensible one and most of my regrets can be traced to times I did the opposite. Not surprisingly, the interesting things turn out to be more sensible in retrospect. This principle recently steered me towards a hard left turn and I wanted to share an update about it.

As some of you might know, last fall my VTF Capital partners and I decided not to pursue raising a new fund. Each of us has grown interested in other areas so the timing felt right to split off on our own new adventures.

Over the past two years, my interests shifted heavily towards the food system. I spent most of the last year in Montana and Los Angeles and by early 2018 was focused on a few key things, including spending more time with a group of partners at Acre Venture Partners, a venture firm focused on the future of the food system and agriculture led by people I’ve come to respect as rational, thoughtful people.

Recently Acre introduced me to one of its portfolio companies, Pilotworks, the nation’s largest provider of scalable production and distribution infrastructure to small, medium and large food, beverage and CPG companies. The easiest way to explain it is to imagine AWS but for food companies in the physical world.

Pilotworks is one of the few companies that my random collection of professional experiences spanning tech product, food production, distribution, and real estate directly aligns with. Acre’s thought was that I might be able to advise the company occasionally. After spending a week with Nick, its co-founder and CEO, and his team of nearly 60 people across six states, Nick asked me join as its COO. A few days later I was on a plane back to NY. I joined the team on Feb 1.

The decision was a hard left turn. Until meeting Pilotworks and Acre, I planned to leave the venture industry and focus on building several long-term businesses and deepening my work in real estate. My ideal approach to life is to be, in both my personal and professional life, a portfolio of interesting things.

So although it conflicted with nearly every one of my plans, I could not pass up an opportunity to work on a set of problems as compelling as those the combination of this role and this company present. If I had chosen the sensible path I would have later regretted it.

I’m writing this from NY where I’m now mostly based. As the year progresses I’ll be splitting time between NY and a home on a small ranch outside of Austin, TX. I’ll continue to travel frequently supporting Pilotworks’ growing national footprint.

If you find yourself in NY or Austin, please look me up. If you know of anyone or anything interesting in NY (e.g. tacos), please pass thoughts my way. And if you want to talk food, call me anytime.

Interview with Ecommerce Fuel

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Earlier this year Zack Kanter introduced me to Andrew Youderian who is, among other things, the founder of Ecommerce Fuel. Later in the summer, at the tail end of my summer working from rural NW Montana, I drove to Bozeman to hang out with Andrew and do a podcast interview with him.

We drove to a wilderness area a few hours outside of Bozeman in his VW camper van, camped, fly fished and talked how I see retail, the misuse of venture capital in retail and many other things. Andrew is a wicked fly fisherman. I am a terrible fly fisherman.

My views on the future of retail and the use venture capital are very different than those of the larger venture market. Second perhaps only to conversations with my partners, this interview is the place I’ve been most authentically clear about how I see the industry and why.

This is likely thanks to a combination of factors namely, the outdoors is my element and I’d spent over a month before this interview mostly in the outdoors. Also Andrew is just a great guy to talk to.

Here’s the interview which is also presented as a transcript.

If you are an ecommerce or retail entreprenuer building a company to last, you should check out Ecommerce Fuel. The members I know say it’s very powerful. And Andrew is a really great guy.

I took the photo while we were fly fishing in a protected wilderness before the interview. I’m pretty sure the cows were owned by a land squatter. They did not like me. You can see the beginnings of the smoke from the fires that ravaged Montana starting in August. 

 

Social

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According to Facebook a lot has happened since I last logged into Facebook. Strangely, I feel fine.

On a random Sunday a few months ago I decided to break a habit loop checking Twitter and Facebook obsessively. I had some deep thinking to do that day so I wanted to stay away from distractions.

The next day for the next two months I kept not checking it. I haven’t been to either site since some time in April.

I’ve done this before. I intentionally took a month off of social networks in January 2016 after reading Fooled By Randomness and realizing my entire life was about consuming bits of undistilled information. I did this by obsessively reading tech blogs, perpetuating a comparison bias that made me feel terrible about myself.

From there I developed an information habit that I explained in a post called We are addicted to now. I’ve kept that habit for well over a year.

But things changed in November 2016 around the time of the Presidential Election. Like most people, I started following the flashing lights related to Trump.

The periods of my life when I’ve been disconnected from Twitter and Facebook have some of my happiest periods. So when I accidentally started doing it again in April, I was quickly reminded of the decision’s impact.

I am happier today because I keep those things out of my life.

The most comical aspect of this experience has been Facebook’s reaction to it. It started behaving like a petulant child forced to sit in a corner. At a certain point, it realized it wasn’t getting its way and started screaming wildly to get my attention.

Facebook started sending me emails in an attempt to trigger FOMO. What I found most interesting is just how bad it was as selecting things I actually cared about.

I’ve received about 70 of these emails.

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All but about three of these notifications are about people I have never or rarely interacted with. A few I can’t specifically remember becoming Facebook friends with. Not once did it notify me of things shared by, for example, my best friend.

The one above is a photo notification from a friend’s wife who I have never met.

Then there are the summary FOMO emails. which come intermittently.

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A mild vote of confidence in Facebook’s interest algorithm can be seen in the the FOMO emails about things I’ve at least sent a reasonably recent signal (last four months) that I enjoy:

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I would show you how Twitter has reacted but poor little Twitter hasn’t sent me a single email.

It’s worth noting that my blog automatically publishes new post notifications to Twitter and sometimes Facebook. The fact that I broadcast to these platforms and don’t interact, even to see the responses, makes me a bit of a hypocrite. But worse things have happened.

Overall, I’m a happier person today than I was a few months ago.

And what’s most interesting is that I don’t feel disconnected from friends in the slightest. I didn’t expect to feel this way.

So what now? Well, like most things, specifically drinking which I stopped doing accidentally in 2015 and never started again, not even once, I may one day go back to it in some way. Who knows? But for now, I’m content with the way things are. My brain is more focused.

And I get to watch Facebook have a hissy fit.

Motivating Employees During Tough Times

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One of our company managers sent a note to shareholders the other day that included an ask for advice.

Several underperforming team members had recently resigned and he was considering removing a few more. In his words:

Some people need to be removed from the business. With some of our recent resignations, it has been a good thing for the business either financially or because they were not adding enough value to the business. How do you manage through these times without having the other people on the team feel like they should also be seeking job security outside

How do you remain transparent with the changes that need to be made while still inspiring people to stay together?

My number 1 focus on the business is to get our revenue growing again. Is this the wrong focus? What do I need to keep in mind?

Not surprisingly I have strong opinions on this matter. I’ve been through it in my own companies and worked through this problem with a number of CEOs over the years. But never taken the time to write out my thoughts.

Running a company is a hard job. It’s a lot easier if you meet challenges head on and approach your employees with a sense of respect and directness. Problems are problems. You have them whether you talk about them or not. Great CEOs meet them head on.

A few days after I sent the email the CEO encouraged me to share my response publicly.

 

I wanted to comment on the latter part of your email. I’ve been through this scenario a number of times as a CEO and also as an advisor to the same. It’s a tough but incredibly shaping experience. These hard moments truly define who you are as a leader and a company.

A strategy that has worked for me in a number of scenarios is to be open with the team about why you are doing what you are doing. Leaders are people who do hard things before they are forced to do them because they want the company to be more in control of its destiny.

A leaner company is, by definition, a less expensive company to operate. So when you make decisions to part ways with underperforming team members you do it for two reasons:

  • To reduce unnecessary costs so that the company is more in control of its future than it was before and,
  • To make it clear to continuing employees that your company has a standard of performance that must be upheld at all times.

So when you speak to your staff you have two goals:

Stave off fears that the ship is sinking.

You do this by tackling the issue head on, ideally in front of the whole company at once. We are a strong company. And we are stronger as a leaner company. We also have to work harder as a leaner company. With fewer people, we have less slack. We also have less friction in the system (lookup Netflix’s experience with early layoffs…they were more productive after than before).

When I advise CEOs on how to handle these situations I use a line that’s been powerful for me in the past: “We took the action we took so we could be stronger, not because we were forced to or because we’re freaking out. Your job is safer because we took this action.”

Energize your top performers.

If you have sub-par performers, you can bet your top performers are wondering why those people still have jobs. You are expressly communicating to your company that a B player can earn what an A player can. A-Players have no incentive to hustle.

When you convey this to our company you don’t want to crap on the people you let go, but you can say things like “we need to be a company of top performers, and we think the company we are on the other side of this action is that.”

When an employee is fearful about the company’s future you can only tackle that with motivation. Facts about burn rate, etc. don’t matter because you took an action that is freaking them out just a week or two ago. So in their eyes, you could do it again.

You have to show them that your decisions were focused on building a strong company. Not just on disaster aversion.

On your revenue focus, it’s your job to decide what the most important focus is for the company. Revenue is either the driver of growth or a measurement of it.

The risk of solely focusing on revenue growth is that you lose sight of revenue quality, cultivating current customers, etc.. I don’t know enough about your business to have a strong opinion here, but I encourage you to think hard about how you can properly break down the contributors to revenue so that individual teams can feel a sense of agency in driving it. Otherwise, salespeople can be the only thing that matter and the company can become reactive. Those approaches often lead to problems.

The History of Time + Perception

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Derek Thompson is one of my favorite writers. His work criss-crosses between economics, psychology and marketing in often wild ways.

His piece on the history of the construct and perception of time came out in December and I just got around to reading it this week. And I’m mad I waited.

Like most of Derek’s work it’s a simple read but full of fascinating detail. Derek’s substance to words ratio is always off the charts.

I probably should have known that the use of watches came about en masse because of war and time zones, in fact even the construct of an agreed upon standard time (what minute is it), came from the railroads.

As railroads covered more ground and more people were connecting from one railroad to another, 2pm had to be 2pm otherwise people and freight would miss trains.

Imagine walking through an airport terminal (already logistical chaos) and learning that Delta and United now operate by entirely separate time schedules: A United flight that takes off, on-time, at 1pm leaves at the same time as a Delta flight departing on-time at 2pm, and the clocks on the wall correspond to neither Delta nor United.

Imagining a time when such a thing was not widely accepted is like considering a time when gravity was widely believed to be not a result of a mathematical calculation, but because rocks “wanted to be on the ground.”

The piece goes on to discuss our perception of time, specifically how we think about work and leisure.

But those who valued time over money were happier, even when the researchers controlled for income. Among people with similarly high income, those most satisfied with life were far more likely to choose time. As they wrote, “the value individuals place on these resources relative to each other is predictive of happiness.”

This is really just one of the better things I’ve read in a long time.

Clayton Christensen Profile in The New Yorker

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The New Yorker has a great profile of Clayton Christensen, author of The Innovator’s Dillemma. I’m not sure when it came out, like many things it may have been sitting in my Instapaper queue for a long time.

It’s long. I read it over a solo dinner recently. Christensen is a fascinating human, full of contradictions. I particularly loved two things.

First, this bit.

But Christensen was a man of function, not form. He loved machinery, he loved to see how things were made and problems solved. Every Christensen family vacation included a trip to a local factory, and it was usually Christensen’s favorite part of the trip.

I did this recently, in Italy. I took a trip to Naples for the express purpose of visiting a factory. Not only did it quench my mechanical mind’s thirst but the journey itself led to a set of incredible experiences. Understanding the details gives you a different view about how to solve problems in any context.

Second, a great anecdote about a large company (probably McDonald’s) who couldn’t figure out how to sell more milkshakes. How they approached the question is definitely worth reading. For brevity I’ll leave out the why and jump to their conclusion:

“Once you understood what job the customers were trying to get done, how to improve the product became clear: you make the milkshake even more viscous. You stir tiny chunks of fruit into it, not to be healthy, because they didn’t hire it to be healthy, but to make the commute more unpredictable—they’re driving along and—upp!—a lump of fruit. And you move the dispensing machine to the front of the counter and give people a prepaid swipe card so they can just gas up and go.

Going the other way

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The nav said turn right. It was a dirt road. It went straight down and disappeared into trees. I checked around. There’s no other road. It had to be that one.

I was taking a quick morning drive to an out of the way small town on the Amalfi Coast before a meeting in a small town an hour inland later in the day. I wanted to avoid the highways. I’ve seen highways in plenty of countries. I live in the land of highways.

The drive started up a mountain. I stopped at a small town shop to have an espresso. The lovely older woman refused to let me pay.

The road to the top of the mountain was as winding as they come. My little rental Audi took them like a champ. I was driving in Le Mans. O can’t think of a time I’ve had more fun driving.

Then the nav told me to turn right. It seemed straight down. And leading to nothing. I thought of the scene in The Office when Michael drives into the lake because the nav told him to.

Back on the dirt road the car is barely making it through the brush. I stopped a few minutes in and got out. I had a feeling I was driving on someone’s farm.

According to the nav I was on Via Casa Falcone. Am I in the Falcone’s driveway? Aren’t movies made about people with that name? I’m in a small town in Southern Italy driving on the Falcone’s property.

It was getting smoky. In a clearing I come across the man who must be the farmer. He’s burning some trash. I’m definitely on his land. I waved. He waved, cigarette in his hand, with the baffled look only a 70 year old farmer in the middle of nowhere who sees a black Audi driving through his farm can.

I kept going. There was no use stopping. I speak the kind of Italian that gets you a coffee without sugar. Not the kind that explains why I’m trespassing on his farm. My best hope was that the road didn’t dead end at his house forcing us to meet again. A few minutes later I was back on pavement.

I followed the nav again. Take a right at the fork. There’s no way the car will fit through that passage. It did. Another. It’s smaller. It fit. All the while I’m passing parked cars. They made it. Surely I will.

Just in front of a shop the road forked again. But one way went up and the other down. A three dimensional fork. Shit. I have to turn around. How?

And there’s a dog that keeps getting right behind me. Now I have to do a 45 point turn while trying not to kill a dog.

A lady just came out of the shop to watch me. That must be her car I have to avoid. It’s more fun to watch me suffer than to move her car.

I just need to get back to the fork. This time I’m going left.

For the next 20 kilometers it was back to the same kind of erratic, winding wildness of the first part of the drive.

I come to the base of the mountain. I see water. I don’t know where I am but there’s water. And a restaurant.

And now I’m sitting at a cafe on the Amalfi Coast having a salad.

Then I’m getting in the car and making the two hour drive to my meeting in a small inland town that Anthony Soprano claimed his family was from.

It’s noon.