Nat Turner

How I manage my inbox

Fri, 25 May 2012 19:00:42 -0400

A few people have asked me recently how I manage my inbox. For me, there are a two inboxes, primarily (1) email (which I use Gmail exclusively for, both personal and corporate) and (2) anything related to my phone (which I manage via Google Voice) such as texts, missed calls, voicemails, etc…. It’s a true skill to be good at managing your inbox(es), and personally I think it is very important to do it well (and I hope I do). How quickly you respond to an email or return a call reflects on your level of responsibility and productiveness. I do think it is unfortunate, however, that people (myself included) feel a sense of expectation that someone should respond to your email, however weak your connection to said person may be. For me it’s very structured now in terms of my process.

Generally, my strategy is to archive anything that does not need immediate attention so that every item in my inbox represents something that I need to do. This departs from some people’s strategy of using read vs. unread to denote items needing attention. I personally like to keep things clean and as such use the Archive function for inbox management frequently (I’d go crazy if I saw 4,300 messages in my Inbox like most people keep). I don’t like unintended uses for features like that where you mark emails unread even though you’ve read them, because for example I may re-read an email but not respond multiple times and don’t want to have to keep marking something as unread. For email, threading is great for this, as I can quick reply to someone’s message knowing I’ll need to reply more deeply later but can keep the entire thread in my inbox, and Read vs. Unread means what it means. Here’s the breakdown of what I do for email, which translates to Google Voice too:

Anything that doesn’t require any attention, Archive the thread. I do this having full confidence in being able to find things later via Search. Anything requiring long-term attention, I’ll Star it (more on this later). My email inbox becomes a relatively short list of items that require near-term action such as a thoughtful reply, follow-up, some other event (such as sending out a calendar invite post-scheduling, or calling someone back). My Google Voice inbox becomes the same, any calls I need to return, voicemails that I need to remember to listen to and/or act on, texts to reply to, etc…
I’m not a big fan of typing on a tiny mobile device, as I like to reference other things (ex. other emails, the browser, calendar, etc…) while doing so, so I mainly use my phone as a means of scanning emails and Archiving threads quickly. This is great so that when I sit down in front of a computer, my Inbox is pretty well organized and ready to go. For example, I get a bucket of emails during the night like most people. Every morning, I take 2-3 minutes on my mobile phone to quickly go through and archive things that don’t need my attention. Same goes for getting out of a meeting, I’ll spend a minute or two in the elevator or cab afterwards quickly organized it. I sometimes leave things in my inbox that I need to use my PC for mainly due to lack of feature support on mobile or a bigger screen making it easier, such as setting up a new filter for that particular type of email.
On any email I’m sending that I need a response for, I utilize Boomerang religiously to remind me if someone doesn’t reply in X days. This is great to use when, for example, scheduling something time sensitive. Boomerang automatically Stars the thread and moves it to your inbox when the deadline passes.
I use the Labs feature in Gmail for “Send and Archive”, so that when I send any email I also Archive it simultaneously.
Any item that doesn’t require immediate attention but I may need to do something in the future or reference it, I Star the thread and also Archive it so as not to clutter my inbox. The Starred folder then becomes a folder of threads that I need to keep track of for some future reason. Examples here may be needing to send someone a check after you receive something you’re expecting from them, or a legal template that you know you’ll need to use in a few weeks. There’s some redundancy built in here too, whereby I may Star something even if it’s in my Inbox still that I know is super-important not to forget.
Every so often, I make a point to go to my Starred folder and clean it up. I probably average once a week for this. I’ll Unstar threads that have became obsolete, or realize I need to follow-up with folks again to threads I’m tracking, etc…
Another critical piece to my inbox management is that it is an absolute requirement that any device I use syncs seamlessly with any other device. In other words, the status of my inbox is synced effortlessly regardless of device. This is why I exclusively now use Gmail via the browser (I used to be an Outlook guy and can’t believe I ever was). Since I’m addicted to Google products such as Gmail and Google Voice, I’m also an Android guy, both for mobile phone and tablet. This is great for me since both look and feel, syncing, and features are the same on every device I use from PC to phone to tablet.
I haven’t perfected this yet, but I utilize Labels in Gmail setup with filters. For instance, I have all of my Amazon order confirmation emails tagged as “Receipts”, or any email from American Airlines tagged as “Travel.” I have occasionally found it easier to locate a thread being able to check these Label folders. However, the main purpose is for items that don’t require immediate attention every time but I still want to receive and occasionally read. Examples here may be corporate updates or newsletters I subscribe to that are non-critical that I still want the ability to read from time to time, so I auto-Archive them and auto-Label them and can every so often go check that folder and read those emails.
I’ve played around with Priority Inbox, as I’ve found it useful to be able to prioritize emails based on who it is, but frankly I haven’t perfected it yet. I just know in my head who I respond to all the time and quickly vs. those that I don’t (and do so naturally) . For instance, any email from my family or co-founder I know what to do with, or someone I know and trust third. I don’t get absolutely inundated by random strangers who want a reply in terms of emails, but when I do get one of those emails I do my best to reply with my honest quick opinion (if asked) or go/no-go of being able to find a time to talk. Unfortunately it’s most often a “Please get an intro from someone I trust” response, as if I took 30 minutes to chat with everyone who emailed I’d be underwater time-wise which is a different issue.
Like most people, most of my work now is via the Browser. So for me, I always have two tabs pinned, one for each of my email inboxes (corporate and personal), and the auto-updated favico’s of Gmail that show # of unread messages is great. Second, my next tab open is permanently my calendar, so I can quickly cross-reference with email and vice-versa.

Anyways, that’s most of the note-worthy strategies and tactics I use to manage my inbox. I’ve been told many times that I’m unusually quick at responding and considered good at email, which I’m proud of. I’m sure I can do a lot of things better, and personally think that being “quick” at email responses isn’t as important as being “good” at responding, so there’s that to keep in mind in terms of balance. But either way, it’s important to me that my inboxes are managed and I think constant upkeep and monitoring and quick archiving is the way to do it.

Lastly, I’m always looking to improve, so if anyone has any suggestions for how I can manage my inboxes better that what I’ve laid out, I’m all ears.

Enterprise Sales: Seed your customers with the right questions

Mon, 21 May 2012 16:46:23 -0400

In enterprise sales, one of the most effective tactics I’ve learned is to put yourselves in the shoes of your customer and help them figure out what the right questions are to ask in an evaluation process. This is important because your customer is probably going to issue a request-for-proposal (RFP) that tries to standardize the evaluation process, or will at least be meeting with your competitors. What better way to ensure the process is well-run than by helping them figure out the right questions to ask you and your competitors?

We’ve all been there in enterprise sales when you receive an RFP and the questions seem like softballs or unrelated/irrelevant to the core reason they need a particular product. This sets up a messy situation where the best technology/product combined with appropriating pricing may not win the RFP. The more advanced the RFP and specific, the better (unless your product sucks and is weaker than the competition). The best situation is when you gain enough trust from your customers to the point that they literally start asking you to help them write the RFP(s). Needless to say it’s a big advantage to see the exam before you take it.

Let’s say, for example, your software system is built on cloud-computing and is horizontally scalable, and you know one of your competitor’s isn’t. A first-draft RFP from a potential customer may neglect to ask a forward-thinking question such as “If we sent you a crazy amount of traffic, could you handle it?”. A competitor that isn’t as scalable as yours may dodge a bullet if that question isn’t asked and save some points in the process.

The best enterprise sales organization recognize that there’s a lot of potential to gain competitive advantages “upstream” before an evaluation process has even begun. It also has to be an entirely honest process, whereby you help the customer ask the right questions for them, not just the right questions for you. Send them a list of questions that you recommend asking you and your competition (broken down by category or type), build a white paper describing why certain features or differentiating factors are important, etc… The goal is to help the customer be able to compare apples to apples as an outcome of their RFP process and to ensure that your company and your competitors are judged fairly.

Why aren't there more traditional tech entrepreneurs in healthcare?

Tue, 15 May 2012 21:19:00 -0400

In my brief time as an angel investor and future healthcare IT entrepreneur, I’ve noticed that there just aren’t that many true technology entrepreneurs in healthcare. It’s well known that healthcare is way behind in terms of technology innovation and adoption, so this is a problem. I know for sure it’s not because of a lack of market size. Pick just about any sub-market of the overall $2.5 TRILLION dollar healthcare industry and you’ve got a market worth tens of billions (which is bigger than most markets entrepreneurs choose to focus on these days). I’ve encountered a bunch of MD’s-turned-entrepreneurs, or MD’s doing a startup on the side, and they all know medicine well but not really technology. A few of them are able to start disruptive companies, but healthcare is noticeably missing those “garage tech startups” that shake things up and the techie entrepreneurs behind them (who are often very young). There are of course exceptions, including a few “MD/programmers” who remarkably learned how to code and also somehow managed to get their MD, but they’re rare.

So what’s behind this? Why aren’t more of the super-smart young entrepreneurs coming out of college choosing healthcare as their industry to build a startup? In my opinion, it’s because of a few reasons: (1) healthcare as an industry has a reputation for being “highly regulated”, (2) it’s really hard to learn the ropes, and (3) the key people in the industry aren’t that approachable (many of them are busy saving lives) and/or are hard to find. I’d also argue it’s unfortunately not currently “sexy” to start a healthcare IT company like it is an Instragram or Pinterest, but hopefully that changes as there are some big outcomes that don’t take 25 years to develop. I’m going to go into each of these three problems real quick based on my recent experience, as I think it is very important that we foster and encourage more tech entrepreneurs to focus on healthcare instead of building some marginally useful consumer app.

Healthcare has a bad reputation for being highly regulated. Yes, it’s true that the government regulates certain parts of the healthcare industry. And honestly, they should for certain things like drug safety, patient confidentiality, insurance providers, etc… But for the most part, these regulations either don’t apply or are easily surmountable for a healthcare IT startup. In general, all you’ll run into would be the HIPAA regulations around dealing with patient data if that’s something you have to do, but that’s a well-known and defined problem to deal with. So, I don’t buy that as an excuse unless you’re starting a new health insurance company or something like that. Perhaps there is a business opportunity in starting something like AWS for healthcare IT companies, whereby you productize the hoops a healthcare IT startup would need to jump through onto a platform that is usage-priced.

The people aren’t as approachable or easy to find. This is important to solve, as the way you learn an industry and build early partner/customer relationships is via networking. I heard this going into the industry, “when they’re not saving lives, doctors are generally too arrogant to spend time with people who aren’t doctors.” This unfortunately isn’t entirely inaccurate for many doctors, but there are some who couldn’t be more willing to spend time with prospective healthcare entrepreneurs, it’s just really hard to find them (you’re also not only going to meeting with doctors). I feel advantaged being a successful second-time entrepreneur who is able to get meetings more easily, but that’s the problem. It shouldn’t be the case that only successful second-time entrepreneurs can get the meetings, we need to lower the walls and open the doors. That’s why I like what some of the healthcare-specific incubators like Blueprint, Rock Health and HealthBox are doing to create “mentor networks” that bring key opinion leaders and industry stakeholders in the same room. I think over time it will be important to make sure the industry mentors get something out of the process too for it to persist. But we need more than incubators, we need a change in mindset of the healthcare industry stakeholders. I wish I knew how to do that quickly.

It’s really hard to learn the ropes. I’m not gonna lie, this part is hard and that’s a big problem. This isn’t about knowing medicine and needing to spend 8 more years in school, it’s about learning how the industry operates and why. The ad tech industry was generally easy to learn, either because of available blogs/online resources or people willing to walk you through things. It took about six months to get our heads around that industry at a high-level. In terms of healthcare, it’s really confusing and there’s no good place to start. There are payers, providers and patients, and multiple variations of all three. Then of course there is the government who is also a payer. Figuring out how the money flows and how all of these people interact with each other is super confusing. I’m a fan of what a few of the healthcare-specific incubators are doing with some “pre-incubator” initiatives like industry education for prospective entrepreneurs where anyone can show up and learn. I think in general, the industry needs to invest more energy into education outreach to entrepreneurs at universities, perhaps via sponsored classes or programs, or the government could create a program like what Todd Park did with opening up health data to opening up knowledge of how the system works (i.e., a more basic problem). Perhaps some successful healthcare IT entrepreneurs can teach a class online and post their notes about the industry. I know I’ll do that if we’re actually successful in this industry.

"Indeed, I suspect that our collective search for villains—for someone to blame—has distracted us and..."

Tue, 15 May 2012 12:59:27 -0400

“Indeed, I suspect that our collective search for villains—for someone to blame—has distracted us and our political leaders from addressing the fundamental causes of our nation’s health-care crisis. All of the actors in health care—from doctors to insurers to pharmaceutical companies—work in a heavily regulated, massively subsidized industry full of structural distortions. They all want to serve patients well. But they also all behave rationally in response to the economic incentives those distortions create. Accidentally, but relentlessly, America has built a health-care system with incentives that inexorably generate terrible and perverse results. Incentives that emphasize health care over any other aspect of health and well-being. That emphasize treatment over prevention. That disguise true costs. That favor complexity, and discourage transparent competition based on price or quality. That result in a generational pyramid scheme rather than sustainable financing. And that—most important—remove consumers from our irreplaceable role as the ultimate ensurer of value.”

- http://www.theatlantic.com/magazine/archive/2009/09/how-american-health-care-killed-my-father/7617/?single_page=true

It's a small world...

Sat, 05 May 2012 23:03:46 -0400

Some days you just can’t help but think how small the world is. I was playing golf in Bandon, Oregon a couple of weeks ago. Caddies are required, and my caddy on the third day was a fellow named Harry. Really nice guy, and we got along quite well. A few holes into the round, I started to recognize Harry’s accent as being from the South, and potentially Arkansas where most of my mother’s family is from. I asked, and sure enough he was from Little Rock.

Seeing that my mother’s family seems to know everyone in Little Rock, I took a shot in the dark and asked “Do you happen to know any of the English’s?” (my mother’s maiden name). He thought about it, and a couple minutes later said, “Well how about Trudy Baxter?”. I was kind of taken aback for a second, as that’s the name of one of my aunts. Then he goes, “Also, I went to Northeast Highschool with an Ellen English”. I couldn’t believe it, as that’s my mom. Turns out, he was the same class as my mom, was her dance partner in Westside Story, and also went to University of Arkansas in the same class (and remembered all of this). He also knew my mom’s sister Trudy quite well, even though she was a couple of years ahead.

I texted my mom asking her if she remembered Harry, and sure enough she remembered the same details as he did, including the nickname everyone at high school called Harry (“Zip”) because of his quick speed on the football field (he was their running back).

What a small world it really is.

Should you share your startup idea with someone?

Sat, 31 Mar 2012 20:46:00 -0400

Ever so often, I get asked a question like “Should I be worried about telling people my idea?” The question almost always comes from first-time entrepreneurs. It’s a commonly blogged about topic among entrepreneurs and VC’s, but I’d like to add in my two cents.

First, I should I say I agree with about 90% of the “there’s no white space anymore for new ideas” position. I agree that there is likely always someone else working on your idea and that it’s all about execution (that’s a great mindset to have for motivation anyway). However, I believe that there still truly are novel ideas out there to be found, perhaps enabled or built on top of platforms/services that didn’t exist last year or new takes on old models (see here for some more of my thoughts around ideation).

So, back to the point of the post. Should you keep your startup idea close to your vest? My general answer to that question is that it depends on your idea and it also depends on who you’re talking to, but probably not. In regards to your idea, you need to make a judgement call as to the development difficulty of your idea (not just technical). If it’s a massively complicated software system that will take several years to build with lots of trial-and-error with beta clients and an equally delicate sales approach, then I doubt it matters at all who you tell the idea to. We used to joke internally at Invite when someone would say “don’t tell me your idea if you don’t feel comfortable” before we pitched them by thinking “honestly, good luck trying, this shit is complicated.” The point is, it’s really hard to build a business, and the idea is typically just the initial spark of inspiration. Of course we probably wouldn’t have gone into very specific product differentiation details to someone who intimately knew the space we were in and likely walks in the same circles as our competitors, but our approach was to not be so coy and get as much feedback as possible.

Now, if your idea is very simple and just may be one of those white space ideas that is easy to build but will be protectable once it gets critical mass of users (so first-mover advantage matters), I’d probably keep the details a bit closer to the vest when talking to folks who may be in a position to commercialize it. The main folks you want to be careful of are the capable entrepreneurs who are trying to find that next idea to work on. In general, disclosing any idea to an investor of any kind is probably extremely low-risk and worth the feedback you could get, as no professional investor I’ve ever met has posed any risk of switching careers to start your company from scratch (excluding EIR’s and half-committed entrepreneurial venture partners). I guess they could be at-risk of telling a portfolio company of theirs who has interest in your idea, but that would be shitty of the VC and probably pretty rare (so maybe do your homework on their portfolio first). It’s also highly unlikely that any large company that you tell your idea to is going to be able to execute better than you can unless they have some massive competitive advantage (like an existing customer base to sell it to). And in that event, if your idea is so easy that a big company can beat you to it, you probably have a crappy idea. I don’t want to invest in a company that can have a nuclear bomb dropped on it at the push of a button by an existing large company.

So, to conclude, don’t be so coy with your startup idea. I’ve always felt that the benefit of getting feedback as a result of disclosing your idea far outweighs the potential cost of someone “taking your idea” and beating you to it. Very few ideas in my book don’t fall in that category.

I want to do strategy

Mon, 12 Mar 2012 12:08:00 -0400

How many times have you heard this from a potential recruit or student looking for a job at a startup? It’s scary that people think that will work or that that’s an actual job. The other one I hear a lot is “I want to do strategic partnerships” or “I want to manage projects”. I can’t tell you how much that bugs me, as it’s basically saying “I want to do nothing.” Not to stereotype, but I hear this most from people coming out of business school, or folks leaving the consulting or banking world looking to “get into startups” (maybe it’s something big companies instill?). What does it even mean to want to do those things? Shouldn’t that be the founder’s job?

The best candidates I’ve ever interviewed for a startup job are the ones who say “I like details” and/or “I like digging into the weeds and getting my hands dirty.” Who cares what it is you’re working on (it’s always different), as long as you’re detail-oriented and hard-working you’ll get things done, and that’s all that matters.

The reason this is important is because in startups, unless you’re a designer, engineer or stellar salesperson, you’re day-to-day role is basically unclear. On the business side, the founder(s) is probably the one doing “strategy” and high-touch deals, and anyone left should basically be doing everything else that’s needed that day. This of course changes over time as the startup grows out of being a startup. Early on however, those people are *extremely* important for any company, and often times are co-founders, but you won’t be successful at that role unless you’re heavily in the details and get off of the “I want to do strategy” mindset.

Quick thoughts on picking entrepreneurs vs. ideas

Thu, 08 Mar 2012 22:06:00 -0500

All too often (and I find myself doing this too), due to the plethora of startups being created people tend to quickly dismiss many of them solely based on the current idea without even paying consideration to the entrepreneur or where it could go. The conversation often goes like this, with the entrepreneur or referring person saying “Hey, interested in looking at this startup, they do XYZ?”, and the investor replying “Yeah, XYZ doesn’t really fit in my focus area and probably won’t work.” It’s almost like going through emails, whereby the more you get the quicker you try and filter through them.

The reason this is interesting is that we all know that most successful startups pivoted their way there, and the ones that are more likely to do so are the ones led by compelling/talented entrepreneurs (pivoting isn’t typically luck!). I imagine a lot of great entrepreneurs these days had startups that eventually found a successful idea but were quickly dismissed early on by investors just because their first idea sucked. I can recall a few recent conversations with investors where they said something along the lines of “Man, I wish I invested in XYZ startup but they weren’t doing what they’re currently doing when I saw them.”

So, what I’m saying/asking is (and I will try to do myself), before quickly dismissing a startup just because you don’t like the idea they’re currently working, spend the extra time to figure out if you’re talking to a talented entrepreneur who will do anything it takes and has the ability to successfully pivot their company to something bigger.

Amazing commercial from the DollarShaveClub.com guys

Thu, 08 Mar 2012 18:17:02 -0500

Amazing commercial from the DollarShaveClub.com guys

Entrepreneur accountability in angel-dominated startups

Wed, 07 Mar 2012 19:38:00 -0500

Over the last 18 months, I’ve made 19 angel investments in startups (and hope to do more) and have seen plenty more go down like most angel investors. One of the things I’m seeing more and more of lately is startups raising entire rounds from either (a) a group of angel investors and/or (b) relatively uninvolved VC’s “planting seeds” by throwing in a little bit of money in to create a future option (which has its own risks). The result of this is a fragmented investor group, often no board being created, and in general a bunch of people who are watching on the sidelines but no one investor greatly incentivized to be involved. I think this is a result of the growing angel investor community that many have talked about (and which will hopefully only grow with companies like Facebook creating thousands of millionaires) and also historically later-stage VC’s firms moving earlier and earlier up the chain.

However, one of the things I’m worried about as a result of this (and have noticed with a few companies I’ve invested in) is a lack of accountability on the entrepreneur if he/she takes money from such a fragmented group. Don’t get me wrong, I’m ALL for entrepreneurs being able to stay focused, kept away from investor meddling and in general maintaining control over their companies. I’m talking about the happy medium, which in my head is a board of some sort and/or a watchful investor early on, which gives the entrepreneur at least some basic oversight in terms of building a team, spending (or saving) money, and keeping him/her on track.

Chris Dixon’s post on the clock starting to tick when you raise money got me thinking about this. I couldn’t agree more with Chris that raising money too early and/or raising too much money has very bad consequences that you pay for later. But I think one of the beautiful things about raising money from someone who from that point forward starts to watch what you’re doing is that your steps start counting, and the things you do start to become more important (and thus you take it more seriously). Perhaps you weren’t thinking about hiring a professional to do sales, or someone to manage your engineering efforts, or didn’t realize your product wasn’t working the right way. I know at Invite that the added pressure of having someone else’s money in our company’s bank account created a sense of urgency, and having 1 or 2 guys who had contributed the most and had a lot riding on us made it even more important.

I should mention that I’m also not a fan of creating too much process and board structure too early, and as such am equally worried about startups who do this. In other words, don’t have 3 hour meetings every month with tons of material for your investors when you haven’t even figured out what you’re building yet. But maybe it’s a good thing to agree upfront on a more casual small board structure (treat it as a formal check-in on progress), perhaps just the entrepreneur and one investor, and add more structure over time as the company matures.

I think sometimes entrepreneurs, especially first-time entrepreneurs, give themselves too much credit when it comes to knowing what to do and when. I know we did, and would have made more mistakes if we had less accountability. There are of course those who seem to always know what to do, but for some reason (and maybe I’m wrong to feel this way) I get nervous when I see or invest in a startup that raises a round from only angel investors, has no no board, and there isn’t one clear person who the entrepreneur feels accountable to.

"…We need to separate out those who benefit from a drug and those who don’t. When a drug works,..."

Wed, 07 Mar 2012 16:08:40 -0500

“…We need to separate out those who benefit from a drug and those who don’t. When a drug works, patients and insurance companies should pay the full price. When it doesn’t, they should pay nothing.”

- http://www.nytimes.com/2012/03/07/opinion/pay-only-for-drugs-that-help-you.html?_r=2&src=tp

"While victims of Mr. Madoff’s fraud, like most Ponzi victims, condemned their accused betrayer in..."

Mon, 05 Mar 2012 14:20:03 -0500

“While victims of Mr. Madoff’s fraud, like most Ponzi victims, condemned their accused betrayer in court as a monster, many of Mr. Beachy’s investors have said in court that it is more important to forgive him than to recover their money.”

- http://www.nytimes.com/2012/02/26/business/in-amish-country-accusations-of-a-ponzi-scheme.html?pagewanted=all

There are two ways to increase ROI

Mon, 27 Feb 2012 15:13:00 -0500

In advertising, ROI is everything. If the marketer doesn’t get some sort of positive ROI on his advertising expenditures, he won’t (or shouldn’t) run said advertising. A whole side discussion can be had around how you define “return” to a marketer, which can range from very measurable “direct sales generated” to softer stuff such as purchase intent, brand lift, etc…, but we’ll leave that alone for now. And of course the marketer’s goal is always to figure how to measure and value the advertising he does, and ultimately to increase the ROI of his advertising. Take a look at the formula for how to calculate an ROI percentage:

It must not be forgotten that, according to the above formula, there are two ways to increase ROI: (1) by increasing the net program benefits, and/or (2) by decreasing the program costs. By achieving either one of these, you by definition increase the ROI percentage.

Now let’s apply this to online advertising technology. In ad tech, a vast majority of the companies I see being founded appear focused almost exclusively on the numerator of the formula (i.e., increasing net program benefits). In other words, they try to make things “smarter” by being more intelligent about which media to buy. In online advertising, that could mean focusing on bettering click-through-rate (CTR) or click-to-conversion rate, etc… It’s often easy to spot these companies, as they constantly tout algorithms as the core part of their technology and talk only about optimization techniques and “machine learning engines” that can identify the best media to buy, the right audience, etc… This is very important stuff no doubt, but it forgets that there is a denominator in the ROI formula (the cost of an ad program). In other words, there is a whole other option to increase ROI.

According to the formula, you can achieve the same ROI uplift for an advertiser as increasing a program’s benefits by 50% if you were just to decrease the inherent cost of the advertisements purchased (assuming similar/same media) by 50%. Often times, that can be a more straight-forward and fundamental problem to solve. For instance, in banner advertising that meant the creation of ad exchanges (which led to the reduction of middlemen), the reduction of waste by increased ad serving times, etc… All of these things lowered the cost of buying the same media as before, and as a result positively impacted the ROI for advertisers.

In my opinion, it often times can be a much more valuable endeavor for starting a client-performance-driven company (aren’t they all?) that focuses on the denominator as opposed to the numerator. In online advertising at least, if you build something that lowers the cost of media, you may have built something that is more fundamentally valuable to the industry and stickier than any one algorithm every could be. As one of our early advisors told us at Invite, sometimes it’s more valuable to build better piping than to worry about what water is flowing through them.

Update to post:

I’ve received a few emails and notes related to the above post, and feel clarifying one thing is important. In my post, I talk about lowering the cost advertisers pay for media as a means of increasing ROI. This is entirely accurate. However, I should have been more specific as to what I mean. It’s not by artificially lowering the revenue the publisher ultimately receives, it’s by reducing the margin and friction that occurs in the exchange of media. In the post I mentioned a few examples, such as the advent of ad exchanges, faster ad serving, the building of better piping, etc… Those examples in my head relate to making the buying/selling of media more efficient, which lets the advertiser pay less for their media but also lets the publisher get the same amount or more in revenue. I should have made that more clear.

"Like technical debt, management debt is incurred when you make an expedient, short-term management..."

Sun, 12 Feb 2012 22:48:15 -0500

“Like technical debt, management debt is incurred when you make an expedient, short-term management decision with an expensive, long-term consequence. Also like technical debt, the trade-off sometimes makes sense, but often does not. More importantly, if you incur the management debt without accounting for it, then you will eventually go management bankrupt.”

- http://bhorowitz.com/2012/01/19/management-debt/

Build partners

Sun, 12 Feb 2012 21:02:00 -0500

In startups, I’m a big fan of “you don’t know most of what you don’t know.” This essentially translates into you don’t know anything when you’re just getting started, which many entrepreneurs can relate to. Looking back at Invite, it is utterly amazing at how little we knew about the ad industry, how to build a company, how to run an engineering team, etc… when we were just geting started (and for awhile after that).

One of the ways we tried to shortcut that problem was by accepting that we needed a “build partner,” which was our term for someone extremely knowledge about the space we were entering and was willing to be a “super advisor” as we built the product/company. They weren’t an employee, but were vested in our success via a sizeable equity grant that was more substantial than a typical adviser (and ideally also a personal angel investment if they’re able to).

They key for us entering the ad tech industry, which we knew nothing about, was to find a build partner who knew a ton about that space. They could teach and explain in english who all the different players were and why (often times what companies say on their website differs greatly from what they actually do), introduce us to key players and customers, and most importantly give critical feedback on our product builds. We also knew we needed someone who had experience in general company building, not just ad industry knowledge, as we had never built or managed large teams, sold deals into major companies, etc… It’s hard to find someone who can do all of these things, so typically it’ll be an entrepreneur who successfully built and ran a company in your space (and even better if they successfully exited). It’s also a good idea to get someone who can put themselves in the shoes of your potential future client, so-as to help you achieve “product market fit” (perhaps it’s someone who could actually be a client when the product is ready).

At Invite, we had so many great advisers along the way, but the “build partners” who really stand out were Brian O’Kelly and David Brussin. Both had built and sold very successful companies (Brian’s being directly in our space), were generous with their time, and were willing to take us under their wings to teach us about building a product and company. We couldn’t have done it without them.

So what’s the point? If you’re starting a company for the first time, or even if you’re a successful entrepreneur but is entering a brand new space, sometimes simple advisers aren’t enough (and you definitely won’t be enough). Find a partner who will help you build the product and company as a super adviser of sorts, compensate them with equity accordingly, and treat them as part of the team even though it’s your responsibility to execute.

New Way to Pay Doctors

Sat, 11 Feb 2012 12:47:00 -0500

UnitedHealth, Nation’s Largest Insurer, Is Latest to Announce Fee Overhaul

This is really big, if they actually go through with it and roll it out in a big way. In my opinion, one of the biggest structural problems with our healthcare system is that the incentives are all screwed up. As a result, and as Jon Stewart smartly said, it’s one of the few systems where literally every side thinks they’re getting screwed and not one comes out on top. Healthcare providers think they’re getting screwed by the insurance companies, the insurance companies think they’re getting screwed by the healthcare providers, and patients/consumers think they’re getting screwed by everyone.

The “fee for service” model our nation currently employs to reimburse healthcare providers means that the more surgeries a surgeon does, the more revenue they make. And because there are no caps on overall revenue (just on a per surgery basis in terms of the reimbursement rate card from insurance companies), the incentive for the surgeon is rightfully to do more surgeries. The more MRI’s and PET scans a center can do, the more revenue they make, etc… It’s not aligned to getting patients better.

There are certainly hospitals and groups that put the patient first, such as Mayo and St. Judes, but they are in the minority from what I’ve seen. And while there are initiatives such as bulk paying healthcare providers and the creation of accountable care organizations (ACO’s), these are still struggling to become widespread and lack widespread support in Washington.

Until then, it would be great to see insurance companies try to hold their healthcare provider network more accountable for their results, and I suspect you’ll start to see more providers start to “verticalize” their offerings by introducing their own insurance plans or vice versa. The struggle insurance companies face is that you can’t control the care of the patient if you’re not the provider, and if you’re the healthcare provider you can’t control how much you’re getting paid. Healthcare groups such as Kaiser and GroupHealth have proven that this model can work, and may be the only solution in our current system to truly do right by the patient and control costs.

Ideation

Mon, 06 Feb 2012 22:20:00 -0500

I’ve pretty much decided in my head that no one, except for a few people, have that lightbulb in their head that goes off from time to time with genius, entirely unthought of ideas for new businesses or inventions. It’s cliche at this point, but the concept of “there’s no more white space, it’s all about execution” comes to mind. In my experience, both in starting companies and investing in them (although that’s more recent), most companies evolve and pivot into creatures almost entirely unrecognizable from their initial form, with the initial idea being rendered almost irrelevant.

So, as an entrepreneur, where do you get started if there’s no “white space” ideas left out there? That’s a problem Zach and I have been grasping with, whereby we’re trying to find what’s next. It can also be applied to investors, looking for areas that are worthy of investment. My gut reaction to first-time entrepreneurs looking for something to work on is typically just to get started on anything that interests them, and see where it takes them.

One idea that came up recently in a discussion along the lines of ideation is an exercise of looking at companies that have been acquired about 2-4 years ago, and then assuming the acquiring company has sufficiently slowed down the innovation and developement of the acquired asset. It’s often said in the ad technology space, for instance, that the industry goes in 3-4 year cycles. First you had the ad servers, then you had the ad networks, then you had the ad exchanges, then you had the DSP’s/SSP’s, etc…

For example, Successfactors just got bought by SAP. Perhaps in 2-3 years, the “business execution software” space could be ripe for disruption if you assume SAP doesn’t keep the same speed that Successfactors did? I would take that bet over the opposite happening.

Another exercise for ideation could be to look back (this data may be harder to find) at startups that failed, with the goal being to find startups that were good ideas but just victims of bad timing. I think it’s safe to assume that if an entrepreneur starts a company, gets outside funding, etc…, generally speaking the idea wasn’t insane, it was probably just ahead of it’s time (again, exceptions to every rule). Therefore, and it will take some sifting, maybe a good way to find a business to start is just to look back at the startup ashes for ideas that were ahead of their time.

"The business model has worked to attract young aspiring entrepreneurs who were concerned about the..."

Wed, 25 Jan 2012 17:14:39 -0500

“The business model has worked to attract young aspiring entrepreneurs who were concerned about the risks of a startup – many of them attracted by the Samwer’s focus on “execution innovation” rather than “conceptual innovation”, a model followed more by Silicon Valley.”

- http://eu.techcrunch.com/2011/12/15/rocket-misfires-%E2%80%94-samwers-lose-key-people-ahead-of-huge-fund-raising-to-clone-globally/

betashop: Knock-Offs Are Bad Design

Wed, 25 Jan 2012 17:11:33 -0500

betashop: Knock-Offs Are Bad Design:

betashop:

Here at Fab.com we’re all about good design.

Authenticity is part of our soul.

We guarantee that every product we sell is authentic and that we are authorized to sell it.

We offer our own unique graphic designs on website.

Everything is home grown and original.

That’s what good design is all…

Here’s a cool vintage baseball card I recently acquired....

Sat, 21 Jan 2012 23:08:47 -0500

Here’s a cool vintage baseball card I recently acquired. It’s from 1915 and was inserted in packs of Cracker Jacks. Also featured in the set were players such as Ty Cobb and Larry Doyle. Shoeless Joe, as he was called, is famous for being involved in the Black Sox Scandal in which the world series was rigged.