To be successful, we have to humbly admit what we don't know and can't do alone.

Sputnik ATX: What Entrepreneurs Really Need (and It Isn't Funding), 2019-Nov-19 by Joe Merrill

What you think holds you back:

  1. Startup Funding (from investors)
  2. Bug fix (make it work better)
  3. Design (make it easier to use and pretty)

What actually holds you back:

  1. Launch (get product to market)
  2. Design (make it easy use and pretty)
  3. Pricing (create consumer surplus)

Remember, high growth covers a multitude of sins.

Short on cash? Sell more. Product buggy? Get code fixes to market now.

Alternatively, Failory did a study that patterned start up data to identify why some fail and some succeed. The 4 reasons for failure generally fell into four categories:

Incompetence – lack of planning Inexperience – lack of product know-how Inexperience – lack of managerial skills Personal problems – you’re a hot mess.

The worst thing you can do, is say to yourself, “I believe, therefore I am right.”...

We see many founders who fail to identify that they are in one of these categories. Successful founders know that they are always one or more of these, and fill their gaps by building a diverse team that is united and motivated around common goals and vision. It takes humility to assume you know nothing, and build a team with the skills to succeed. And humility is what you really need.

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When it comes to building community, go small or go home

For years I've helped companies send hundreds of newsletters to active customers. However, the newsletter that I'm working on now will serve a community. A much different approach is required. You don't want people to click to order--you want them to engage in a conversation. Person-to-person recognition is required, and if the community will really grow, then we have probably have to staff employees to members at around 150-to-1. The total audience can be larger, but not the active community. 

Local News Lab: Journalism’s Dunbar number: Audience scales, community does not. 2019-Mar-4 by Damon Kiesow

To succeed, local media have to abandon scale and refocus on community. Advertising remains part of the equation, but reader revenue, donations, foundation funding — yard sales if necessary — are all in the mix.

Twenty years ago, evolutionary psychologist Robin Dunbar postulated there was a limit to the stable and close social relationships a human being could maintain. He informally defined it as the number of people you know well enough to join “uninvited for a drink if you happened to bump into them in a bar.”

“Dunbar’s number” is 150 — and he argued it was set by the cognitive capacity of the human brain. Smaller primates with smaller brains have smaller social groups.

Media have a similar limit — it is the number of readers who feel you are part of their community and are willing to invest their time or money with you.

We can work to boost that number, but it takes more than a marketing campaign. It requires actively listening and sincerely engaging with your community — see Trusting News as an example. It takes better understanding your readers, and better serving them — Shifting to Reader Revenue/API. And it takes a retreat from the artifacts of scale that litter your websites, organizational structure and business model.

What does that look like? How about fewer people focused on SEO and building products for Big Tech, and more working to source story ideas from the community — like Hearken. More ability to do targeted local news products such as pop-up newsletters and less time chasing the next “pivot” strategy — see Lenfest for local ideas. And less space on the story page taken up by spammy recommended links and… well, there is no “and” there actually, we just need less of some things.

But individual tactics are not as important as the philosophy: Local readers need to be served at local scale. The internet is infinite, your community is not. Go small or we are all going home.

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Considering where to learn about startup success

Since I've started joining startup communities, I've be deluged with opportunities to hear how founders "made it," as well as offers of mentorship from people with a lot less experience than myself. Granted, I'm not a successful entrepreneur, but I have a deep and flourishing understanding of how businesses succeed. And it's not by imitating someone else's success. 

Farnam Street: Survivorship Bias: The Tale of Forgotten Failures, 2019-Dec by Shane Parrish

Considering survivorship bias when presented with examples of success is difficult. It is not instinctive to pause, reflect, and think through what the base rate odds of success are and whether you’re looking at an outlier or the expected outcome. And yet if you don’t know the real odds, if you don’t know if what you’re looking at is an example of survivorship bias, then you’ve got a blind spot.

Whenever you read about a success story in the media, think of all the people who tried to do what that person did and failed. Of course, understanding survivorship bias isn’t an excuse for not taking action, but rather an essential tool to help you cut through the noise and understand the world. If you’re going to do something, do it fully informed.

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Perspective on marketing: no easy answers

I enjoyed reading this article in Entrepreneur, and I decided to dig a little deeper into the concepts discussed. In particular, the article referred to ROAS, or Return On Advertising Spend. A Google search provides the following automatic answer:

The formula is quite simple. You simply divide the revenue that is produced by advertising by the dollar amount that is spent on that particular advertising to arrive at your ROAS.

Unfortunately, as the author of the article noted, the marketing challenge is never that simple. ROAS is frequently used to select advertising channels. In the real world, ad channels don't perform independently, and the length of the sales cycle has to be adjusted from both the product and the target audience. No easy answers. 

Entrepreneur: Marketing Is Still an Art (and a Science), 2019-Dec-28 by George Deeb

And lastly, we were managing our agency to optimize the wrong data metric. We were pushing them to drive an immediate ROAS. The problem with that was the only transactions that happened immediately, were the small ticket online ecommerce orders worth $500 each. Not the big $5,000 offline orders we wanted to be closing, which had a longer 2-3 month sales cycle. We immediately shifted gears and told our agency not to worry about immediate ROAS (we would track that in 3-4 months). Instead, the only data point we care about is driving big-ticket leads into our sales pipeline (that we know won’t close for 2-3 months). In this case, patience for proving ROAS would be a virtue. 

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Flourish by nurturing both kinds of social capital

Alex Pentland, author of Social Physics, is one of the under-recognized leaders of sociology research. He recently shared his work on distinguishing two kinds of social capital: 

  • Bonding capital is built by sticking with your tribe
  • Bridging capital is built by exploring and building connections outside your tribe. 

Quartz: A pioneer of wearable technology explains how it can connect instead of divide us, 2019-Dec-17 by Jenny Anderson

There is tension between the two types of capital. “This is one of the fundamental conflicts of the human nature,” he says. “People need that tribe that reinforces them, but new opportunities and things come from exploring,” he said.

The people who build up bridging capital by pushing themselves out of their comfort zones and getting away from the tribe tend to do better in life (pdf). They learn different perspectives, see more opportunities, and make more money. “They just live better,” Pentland says. “But it is uncomfortable.”

The key is to invest in both types of capital. But few are aware of how they divide their time between the two (or that they even exist). Pentland’s hope is that awareness of how people live might incentivize them to live better, so he’s spent 20 years developing metrics to quantify social connections.

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To build trust, ask questions and listen carefully

We have the mistaken impression that people trust us because we do what we say. Actually, they trust us because we ask what they do. 

Trillion Dollar Coach, by Eric Schmidt, Jonathan Rosenberg & Alan Eagle, 2019 by Harper Business

When you listen to people, they feel valued. A 2003 study from Lund University in Sweden finds that “mundane, almost trivial” things like listening and chatting with employees are important aspects of successful leadership, because “people feel more respected, visible and less anonymous, and included in teamwork.” And a 2016 paper finds that this form of “respectful inquiry,” where the leader asks open questions and listens attentively to the response, is effective because it heightens the “follower’s” feelings of competence (feeling challenged and experiencing mastery), relatedness (feeling of belonging), and autonomy (feeling in control and having options). Those three factors are sort of the holy trinity of the self-determination theory of human motivation, originally developed by Edward L. Deci and Richard M. Ry...

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