Managing Expectations

Over the past several months one question has consistently kept me up at night: how can I, both as an individual dedicated to self-improvement and as an aspiring social entrepreneur, manage expectations more effectively (i.e. reconcile what I want to happen, with what actually takes place)?

It is a quandary I’m sure we have all wrestled with over the course of our lives. Be it in a professional setting (e.g. driving profitability within a year), an interpersonal setting (e.g. winning over a member of the opposite sex), or a personal setting (e.g. following-through on a commitment to write a monthly blog (ugh!)).

In each case the challenge (it appears) lies in being able to manage  internal and external forces adroitly. For instance if a company’s goal is to achieve profitability, managers must not only work  together to align internal strategic goals (which in and of itself, I can assure you is no easy task),  but also to address the ever-changing needs of their vendors and consumers. Likewise, if one’s objective is to write a monthly blog (ugh!),  he/she must not only account for external work-related obligations but also internal desires to spend whatever little free time he/she has relaxing/”being lazy.”

Needless to say, succeeding is an art – one that takes years to master.

Nevertheless, upon reflection, it seems as if organizations/individuals who do succeed – who do reconcile their aspirations with actuality – do so in large part because they abide by the following core principles:

Believe in a vision – It all starts with a vision; whether your goal is to change the world or simply get out of bed, you must be fully and deeply aware of what you are trying to accomplish before you can set out on your journey.

Focus on achieving quick wins – By design, a vision can either be vague or specific. However, regardless it will only come to fruition in a viable manner if you embrace all the steps it takes to attain it. If your goal is to run a marathon for example, understand that before you can run 26 + miles you must run one.

Develop a set of key metrics – How you measure progress is entirely up to you (e.g. businesses oftentimes use KPIs); the point is that you must push yourself to meet certain standards. For example, if my goal is to write a blog at least once a month and I know writing is difficult for me, I might try and define how much time I have to come up with a concept, how early I must create an outline, and how long it should take me to flush it out.

Implement a set of processes – Metrics are meaningless unless you can measure them meaningfully; thus, it goes without saying that you must create a set of processes that will enable you to take advantage of the data you collect/feedback you receive. If for instance your goal is to talk to a girl without coming across like a complete tool (clearly not talking about myself!) – wherein quick wins constitute being able to smile, say “hello”, and hold a conversation for more than 5 minutes without stammering – then perhaps you might want to try: engaging in dialogue with someone new every day, going out to a social event once every weekend, or incorporating something you read/heard in your day-to-day conversations.

Communicate these processes effectively – Communication is key throughout, but especially here. For if your vision is ever to succeed, everyone who has a stake in its realization must be in agreement – if not for their own well-being, then at least to ensure that you do not neglect yours.

Execute  – Once the aforementioned processes are in place, there is no need to wait; meet your shadowy future with courage and determination. If you fail, you’ll fail quickly thereby giving yourself more opportunities to ultimately succeed.

Seek feedback – Lastly, in order to ensure that you give yourself every chance to realize your ultimate vision, it is imperative that you seek  feedback every step along the way. Is your long-term objective in line with who you want to be? Are the metrics you’re holding yourself to a true measurement of whether or not you’re making progress? Are the processes that you have in place enabling you to receive feedback as efficiently as possible? Are all the parties involved on the same page as you or do you need to communicate more precisely? Are your actions moving you in the right direction? Etc.

The more frequently we answer these key questions, the sooner we will realize that: by holding ourselves accountable we put the future in our hands.

Thoughts?

The 3 Needs

Having spent the last couple of posts focusing on self-improvement, I thought I’d transition back to the business side of things for a bit.

The past 2-3 weeks a few of my friends reached out to me regarding concepts that they’re working on, and as is usually the case, it got me thinking: assuming all else is equal (e.g. a great founding team, seed capital, discipline, a bit of luck etc.), what exactly makes for a viable business idea?

If you ask me, all great companies have one essential ingredient in common: they all address three fundamental needs.

Philosophical Need: On a macro level all companies, large and small, must address an overarching “philosophical” need. For Google, it’s ensuring that search is as intuitive as possible, even as content on the web continues to proliferate; for Twitter, it’s enabling people to broadcast what they’re doing whenever they want, wherever they want; for Boeing, it’s making flight as cost-effective, and safe as possible; for Toyota, it’s manufacturing more fuel-efficient automobiles without sacrificing standards; and for Ikea it’s providing consumers with quality furniture at a discount – just to name a few.

Practical Need: Of course, addressing a macro-level need, while powerful, is not nearly enough. There are practical considerations as well.

Take Twitter for example. The social media upstart would have never become a phenomenon, if its value proposition was solely predicated on enabling users to publish status-updates (i.e. answer the question, “What am I doing right now?”); after all, what’s the point in telling people what you are doing, if nobody is there to listen?

Thus, not surprisingly, it wasn’t until Twitter addressed an even more basic need – the need to integrate with existing social media applications (e.g. Facebook, AIM, gchat etc) – that it started to realize its potential as a tool that could empower people to concurrently reach out to an audience with a megaphone while engaging  individuals  in a “coffee-shop.”

Mechanical Need: Finally, no concept can truly succeed unless it addresses the most elemental (and forgotten) need of all:  the need for a simple mechanism that will make the philosophical and practical solutions feasible.

In Twitter’s case, the mechanism is obvious: SMS technology (i.e. text-messaging). However, what about more traditional companies like Ikea or Toyota?

If you think about it, they too have distanced themselves from the competition by addressing mechanical needs. Ikea is able to provide furniture at a discount (“philosophical need”) by using material comparable to its peers (“practical need”) because it transfers the majority of its assembly costs to its consumers by selling ready-to-assemble goods (“mechanical need”).

Toyota on the other hand is able to consistently manufacture top-of-the-line fuel efficient cars (“philosophical need”) by employing some of the automobile industry’s most advanced technology (“practical need”) because of its world famous Toyota Production System (“mechanical need”).

In short, when considering an idea, ask yourself one question: how many needs does it address?

Never Compromise

If you haven’t read “The 7 Habits of Highly Effective People” by Stephen Covey, I suggest you put it at or near the top of your to-do list (right after enabling world peace and watching 24 consecutive hours of ’24’). If not for the life lessons, then at least so you can put into practice what you have long known in your gut to be true:  “if you want to achieve… [you must] identify and apply the principle or natural law that governs the results you seek.”

Because, as obvious as those words  may seem, many of us (myself included) are guilty of addressing our most fundamental challenges with short-term, short-sighted fixes consistent with today’s increasingly “on-the-go” society – instead of seeking lasting solutions based upon timeless principles.

To illustrate this dichotomy, here are some examples from Covey’s book that I found particularly relevant:

“What’s in it for me?”: “Our culture teaches us that if we want something in life, we have to ‘look out for number one.’ It says, ‘Life is a game, a race, a competition, and you better win it.’ Schoolmates, work colleagues, even family members are seen as competitors – the more they win, the less there is for you. Of  course we try to appear generous and cheer for others’ successes, but inwardly, privately, so many of us are eating our hearts out when others achieve. Many of the great things in history of our civilization have been achieved by the independent will of a determined soul. But the greatest opportunities and boundless accomplishments …are reserved for those who master the art of ‘we.’ True greatness will be achieved through the abundant mind that works selflessly – with mutual respect, for mutual benefit.”

Blame and Victimism: “Wherever you find a problem, you will usually find the finger-pointing of blame. Society is addicted to playing the victim. ‘If only my boss wasn’t such a controlling idiot…If only I lived in a better place…If only I hadn’t been so poor…If only…If only.’ Blaming everyone and everything else for our problems and challenges may be the norm and may provide temporary relief from the pain, but it also chains us to these very problems. Show me someone who is humble enough to accept and take responsibility for his or her circumstances…and I’ll show you the supreme power of choice.”

Lack of life Balance: “Life in our cell phone society is increasingly complex, demanding, stressful, and exhausting. For all our efforts to manage our time, do more, be more, and achieve greater efficiency through the wonders of modern technology, why is it we increasingly find ourselves in the ‘thick of things’ – subordinating our health, family, integrity, and many of the things that matter most to our work? The problem is that our modern culture says, ‘go in earlier, stay later, be more efficient, live with the sacrifice for now – but the truth is that balance and peace of mind are not produced by these things; they follow the person who develops a clear sense of his or her highest priorities and who lives with focus and integrity towards them.”

Conflict and Differences: “Society’s competitive approach to resolving the conflict and differences tends to center on ‘winning as much as you can.’ Though much good has come from the skillful art of compromise, where both sides give on their positions until an acceptable middle point is reached, neither side ends up truly pleased. What a waste to have differences drive people to the lowest common denominator between them! What a waste to fail to unleash the principle of constructive  cooperation in developing solutions to problems that are better than either party’s original notion!”

Think about that.

The Basics are Good

If you don’t know of Umair Haque, the director of the Havas Media Lab – “a… strategic advisor that helps investors, entrepreneurs, and firms experiment with, craft, and drive radical management, business model, and strategic innovation” – you should; the man is an absolute genius.

His post, “Why Ideals are the New Business Models,” is unquestionably one of the most impactful reads I have come across in a while. Not so much because it’s profound (though I assure you it is), but more so because after years of having the “merits” of business models shoved down my throat (seriously, I was almost gagging!), it is refreshing to see someone take a stand.

He argues, in essence that:

Business models aren’t today’s fundamental economic challenge.

If there is a silver lining to the current economic crisis it is that the complex, cumbersome business models of yesterday are slowly being supplanted by the basic ones of tomorrow; and as President Palmer (for all of you 24 fans) declares in a recent AllState commercial: the basics are good.

Twitter for example has become a world-wide phenomenon for two reasons. For starters, it enables people to answer a basic human question: what are you doing (thinking) right now? Secondly (and perhaps more importantly), everything Twitter’s engineering team does reinforces that notion. From emphasizing the concept of followers, to building robust back end functionality (e.g. integration with mobile phones and other social media platforms), they are dedicated to making the act of tweeting (i.e. sending and receiving simple status updates) as easy for their users as possible.

In contrast, Facebook’s latest redesign marks a troubling departure from and obfuscation of its original objective. By making a conscious effort to mimic Twitter and focus on “conversations” rather than life-streaming many (including myself) believe that Zuckerburg and company have created two distinct challenges for themselves: first, to impose a seismic shift in philosophy will not be easy considering Facebook has over 120M users (the majority of whom are used to interacting with the interface in a particular manner); and secondly, in trying, they will effectively dilute much of the value they had previously created.

In other words, instead of doing one thing well (i.e. enabling users to engage in each other’s lives), Facebook is on the precipice of doing two things “poorly” – though of course it remains to be seen if that has any effect on their long-term strategy (or viability).

My guess is no.

Creating something valuable in the first place is.

In his book, “Four Steps to the Epiphany” serial entrepreneur Steve Blank writes:

“If you want to get my blood pressure up when you invite me in to see your newly formed startup introduce me to someone with a Business Development title. This is the most ill used and ill-abused title in a startup. By itself this function and title more than likely decreases the probability of success when used early in a startup more than any other single factor. When I hear it used in an early-stage company I question the competence of all involved.”

The point is, if you can’t convince consumers of your product/service’s value before or during production, chances are slim to none that you will be able to sell it to them (i.e. via Business Development) once it’s completed – irrespective of its merits or your efforts.

“Monetizing” + “business models” = zombieconomy

Though I fundamentally believe that you must become ramen profitable in order to have any chance of creating value for your customers in the first place (unless of of course you’re Twitter), I do agree with Haque in one key respect: innovation and consistent long-term growth derive from a customer-centric approach.

It’s not about beating the snot out of your competition in order to achieve higher margins anymore. It’s about building lasting reciprocal relationships with your end user.

Forget business models. Focus on ideals

If creating value is today’s “fundamental economic challenge” (and like Haque I believe it is),  then nothing will empower us to rise to the occasion more than pursuing concepts founded in our ideals.

Freedom. Peace. Fairness. Justice. Principles like these not only create “authentic, deep, meaningful value” for the customer, but also (as I can tell you from experience) equip founders with: the focus to navigate a difficult competitive environment; the stamina to stay in the office until the wee hours of the morning; the determination to cold-call hundreds of prospects in an effort to pre-sell; and the humility to listen to and learn from users and mentors alike.

Thoughts?

1 to 100,000

The other night I was scrolling through my Facebook news feed, mindlessly glossing over pictures, posts, and status updates, when one headline in particular caught my eye. My friend and mentor Mukund Mohan (founder of a new do-it-yourself PR company called Buzzgain), had posted a talk by Matt Mullenweg, the visionary genius behind none other than WordPress, entitled, “The First 100K Users Are Always the Hardest.”

Having spent the better part of 18 months working on two start-ups, and having experienced firsthand just how difficult it can be to attain 100 users – much less 100,000 – I felt compelled to hear what Matt had to say. If not to gain an intuition for achieving critical mass (though of course, I thought that would be nice!), then at least to audit what I had learned from my time as an entrepreneur.

Much to my surprise, the lessons that I had gleaned and the teachings that he bestowed were, for the most part, one and the same.

1) Be your most passionate user – If you can’t spend hours a day using your product, you cannot possibly expect anyone else to.

More than a year after we decided to close up shop, my former partner Ryan and I still chuckle about the mistakes that we made at The Freight Exchange. Not because we made them (for it’s always difficult to manage unknowns and succeed in spite of them when you’re doing something for the first time), but because we made them trying to start an online load board for shipping carriers and brokers.  If the concept doesn’t sound particularly interesting, well, it’s because it isn’t!

2) Be anal – Everyday is an opportunity to be a new user.

One of my fondest memories working with Ryan came in early August of 2007, when after a particularly grueling and mind-numbing afternoon of work, Ryan and I decided to step outside onto the fire escape adjacent to his apartment to get some air. However, no sooner had I come to my senses, than Ryan took a deep breath, directed my attention to the brick edifice across the way and said, “You know, if you think about it, the only reason that building is still standing is because every brick was laid just right, every ounce of mortar was applied just so…” That’s when I knew I had a like-minded partner.

3) Get off the “computer” – Reorient yourself!

Like many first-time entrepreneurs (or so I tell myself), Ryan and I figured that superior technology, class room theory, automated processes, and the illusion of credibility would be more than enough to propel sales. However it wasn’t until we began cold-calling, sending out surveys, and meeting folks in person, that we realized albeit too late that: there is simply no substitute for human spirit, insight, and interaction.

4) Do your own support – Every time a current or prospective user contacts you is an opportunity to impress them.

The problem with expanding too quickly is that it marginalizes a founding team’s usefulness. For instance, at Smart Genetics our CEO oftentimes found himself with the unenviable task of prioritizing  between the launch of company’s flagship product Alzheimer’s Mirror, acquiescing to the demands of board members, seeking financing, forging partnerships, creating a physician outreach program, running operations, and testing different revenue generating strategies all at once! So alas, instead of pushing a customer first approach (which is the way it should be in my opinion), we were forced to spend the majority of our time focusing on making sales.

5) Have a tagline – Distill what you’re doing in 5 customer-centric words or less.

Post. Find. Deliver. If not for those three simple words, TFE would have nose-dived in less than four months instead of gliding to a halt in seven. For, not only did they enable us to frame our value proposition both internally and externally, but they pushed us to recognize inconsistencies in our overall strategy as well. So even though the result was ultimately the same, I’d argue that we were able to stay in afloat long enough to learn how to build a company “the right way.” Not bad for a $5000 investment if you ask me!

6) Get version 1.0 out ASAP –  Nothing beats real users using your product, even if it sucks.

If only Ryan and I had internalized that truism a year and a half ago! Maybe then we wouldn’t have burned through our funding pursuing speculative development projects that ultimately provided little or no value, and actually engaged and catered to our target audience. (But hey, look on the bright side; had that been the case, I wouldn’t be sitting here writing this post.)

7) Measure EVERYTHING – Do as your users do, not as they say.

Despite the tremendous feedback that Alzheimer’s Mirror received from media outlets and customers alike, it became abundantly clear once we filtered through the noise and started focusing on actual analytics, that in order to succeed we were going to have to overcome three distinct challenges. For starters, the $399 price point was simply going to be too high, especially in a down economy; secondly, older and less tech-savvy consumers were  going to be reluctant to purchase a direct-to-consumer risk assessment over the web; and finally, in spite of the test’s merit, 70% of our consumers made health-care related decisions in conjunction with their doctor.

8) Simplify  – Period.

To say anymore would be to, as Matt says, defeat the purpose.

9) Start strong, finish strong – Create a synergy of expectations.

Though I can’t be certain (for unfortunately with so much on my plate, I never had a chance to prove or disprove my theory), I’d be willing bet my right pinky finger that we could have gotten a few more sales at Smart Genetics if our landing pages didn’t look like we were selling used car insurance instead of a genetic risk assessments!

10) Be a painkiller not a vitamin – People don’t care if you make their lives marginally better; they want you to help them kick butt now.

Part of the problem with Alzheimer’s Mirror was that the test itself had very little inherent value. For starters, Alzheimer’s has no cure, and so even if someone is at increased risk for developing the disease, there is little if anything they can do to prevent it. Secondly, even if there are things one can do to delay the onset of AD, they are no different from the life style choices physicians already recommend to their patients regardless of genetic disposition (e.g. eating healthy, exercising regularly, challenging the mind, socializing etc).

In short if there is anything I have internalized in the past two years it is that business, like many things in life, is a journey into the unknown: the more you understand what drives you, the more readily your path and destination will reveal themselves.