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And its CEO thinks more companies could and should do the same.
Treehouse--an online service for teaching web design, coding, and more--has flaunted a four-day workweek since launching in 2010. Treehouse does so with no strings attached. Workweeks range from Monday through Thursday, and each day is comprised of the typical eight hours. According to CEO and co-founder Ryan Carson, Treehouse has never done business on a Friday.Recruiting and Recharging
Carson tells Inc. that the system has multiple benefits.
First, it lends a major recruiting edge. Treehouse currently employs about 75 people, and he says many of them chose Treehouse over offers from major tech companies like Facebook and Twitter. While Carson says he likes to think Treehouse's educational mission inspires them to jump on board, he knows the benefit of three-day weekends is attractive on its own right. New employees, he says, are usually suspect of the policy at first, softening once they escape their first Friday without seeing any emails nagging them to get something done from home.
Carson says the three-day weekends also help employees come into work all the more eager on Monday morning. Having recharged for three days rather than two helps, he says, but even more effective is the threat of the week ending so soon. Thursday (the last day of the Treehouse work week) "comes fast," Carson says, so employees tend to work all the harder to make sure they meet their weekly goals inside that limited timeframe.
Third, Carson says, it means everybody gets more time with their families or other outside interests, including himself. Carson doesn't feel any shame in making that an organizational priority. He has select words for the modern entrepreneur myth of 16-hour-a-day, seven-day workweeks. "I think it's bullshit," he says. "A lot of entrepreneurs want to work because it makes them feel important. But they don't have to work." Carson says his business is on his mind almost all the time, but he doesn't feel like he or his team should need to always be working.
The policy puts an even greater onus on hiring. Carson sees the three-day weekends as a strand in the same organizational DNA as Treehouses flat, manager-less structure. Between a 32-hour workweek and a lack of direct supervision, his employees need to be self-starters. "If you’re lazy there’s no way you’ll survive at TreeHouse," Carson says.
Carson thinks the company's success thus far is validation of the idea. Aside from the 75 employee count, Treehouse has tallied 70,000 users and secured $13 million in funding. Investors have never batted an eye at the weekend policy, Carson says.
"They don't care how you do it," he says. "They just want it to happen."
How the president of Northeastern University instilled an entrepreneurial mindset all across the campus
Among the responsibilities of every leader, says Joseph Aoun, is to become increasingly irrelevant. That sounds like an odd tip, but it's one I'm inclined to take seriously given Aoun's track record as president of Northeastern University.
Before I give Aoun a chance to explain what he means, let me share just a few of the things he's accomplished since taking the helm of my alma mater in 2006:
- The school has risen in the U.S. News & World Report rankings of the nation's best colleges from 96 to 49 (U.S. News says that's an unprecedented gain in so short a period of time).
- NU has transformed an old, dull institutional campus into a cutting-edge, eco award-winning model of urban beauty.
- The university has recruited more than 400 tenured and tenure-track faculty over the past seven years.
- NU has become one of the most competitive universities in the nation. It received nearly 50,000 applications for just 2,800 seats in this fall's freshman class. The quality metrics associated with these students are the highest in the university's history.
I wanted to know how this change agent has instilled an entrepreneurial mindset throughout the 116-year-old institution, and achieved such remarkable success in so short a period of time. I also wanted specific tips that you, the Inc. reader, could apply to your organization.
Inc.: What were the most important things you did to make NU the hot school it's become?
Joseph Aoun: I did three things: First, I doubled down on our point of uniqueness. Beginning in 1898, Northeastern pioneered what's known as co-operative education. Students spend six months in the classroom followed by six months on the job, and vice versa. I doubled the number of corporate partnerships with whom we have co-op relationships and doubled the number of countries in which our students can gain co-op experience. So tell your readers to stay laser-focused on what they do best, and invest heavily in maintaining their leadership position.
I also focused our multiple areas of research into three main domains: health, security, and sustainability. We call these use-inspired fields because everything focuses solely on future societal needs. So I'd advise Inc. readers to stop doing research solely for the sake of research. Focus on how your organization can truly help future society, and you'll find employees will rally 'round the flag.
Third, expand when everyone else is constricting. After the 2008 market crash, we invested heavily. In fact, we recruited more than 400 new faculty members. It may seem contrarian to an entrepreneur, but a weak economy is the single best time to invest even more in your business, precisely because you can leapfrog those who are hunkering down.
How did you turn a staid 116-year-old institution into a fleet, entrepreneurial-minded one?
JA: One person cannot change an entire organization. I needed to find early adopters who embraced my mindset and could lead by example. We broke down the old centralized operational model, and made each dean the CEO of his or her school. We also created a senior team whose members have two responsibilities: their own, and the university as a whole. We tackle macro problems, and ask members to expand their worldview and think university-wide.
That team, by the way, has made me increasingly irrelevant. So, instead of tackling the massive, institution-wide issues like I did eight years ago, I have a fully empowered team to do so. That frees me up to continue to think and act in new and disruptive ways. Entrepreneurs need to delegate key P&L decisions, create a team with both vertical and horizontal responsibilities, and then let the group run as fast as it likes. Meanwhile you should be scanning the horizon for what's next.
Tell me one major mistake you made, and what you've learned?
JA: That's easy. I made the mistake of assuming that because the leadership team I inherited fully embraced my change plans, the overall organization would also have the mindset to change. I soon realized there are three types of employees in any organization undergoing massive change: A small group of early adopters who are excited about change and possess the mindset to enact it; an equally small group of Luddites who will resist any change whatsoever; and a silent majority who will sit back and see what happens.
I quickly learned to keep myself out of the spotlight and shine it instead on the early adopters. We championed their successes, made them stars within the university, and let them carry the rest of the institution along with them.
Since many Inc. readers aspire to be the next Bill Gates or Mark Zuckerberg, convince them the ROI of a college degree is still relevant.
JA: It's more relevant than ever at some institutions in which students are literally surrounded by entrepreneurial breakthroughs each and every day. Our campus, for example, has become a living, breathing incubator of entrepreneurial-minded faculty and students. Our students have created 12 companies that attracted $500,000 in venture funding. We stopped one entrepreneurial-minded academic who was about to mortgage his house to pay for his research and instead found him funding from private sources.
Inc. readers should see enlightened colleges and universities as partners for their research and development. We have countless small companies working with our students to bring their startups to the next level.
Last but not least, a college degree prepares you for life itself. The children of Inc. readers will one day soon be faced with multiple career and life choices. We don't know what the future will bring, but a college degree from the right school will have your son or daughter better prepared to leverage it.
I'm an alumnus, so I'm naturally rooting for the continued success of Aoun's leadership ideas and of Northeastern. That's why--although some of my employees might say it has already happened--I'm really looking forward to making myself irrelevant. And I'm starting today.
Fred Wilson Q&A: The Legendary Investor Talks Retirement, Tumblr's Exit, and Getting Over a Tough Year
The VC discussed his current investments and the future of the investment space.
It took Fred Wilson 10 years to become what he calls a "half-way decent" venture capitalist. It took him 20 to become a startup legend.
Lately, rumors have swirled that the Zynga, Tumblr and Twitter investor might step away from the firm he co-founded, Union Square Ventures, and retire. The 52-year-old investor has written about his post-Union Square Ventures plans on his popular blog, A VC.
"My daughter Emily asked what I plan to do when I retire in the next ten or fifteen years," Wilson wrote in December. "I replied that 'I plan to do what Mom does (angel investing)'. It looks like a lot of fun and I think I might be pretty good at it."
As Wilson wrote, he doesn't plan to retire in the next few years. But stepping away from his day-to-day role at Union Square Ventures has crossed his mind. The firm, which was founded in 2003 by Wilson and Brad Burnham, has been grooming successors for the initial partners with more recent hires such as former Delicious President Albert Wenger and Betaworks Co-founder Andy Weissman.
A few weeks ago, we had an hour-long conversation with Wilson about his career, the New York tech scene, and what will happen when, inevitably, Wilson decides his venture capital days are over.
The interview was intended for a longer piece on the New York venture community, but the transcription was so compelling, we asked Wilson if he'd mind us publishing the full interview instead.
Here are the topics we covered (it gets really good half way down, when he starts talking about why 2012 was a difficult year)
- Why 20-somethings are starting funds straight out of school, and how the investing industry is changing
- What investments Fred has personally made in the last few years, and what USV's thesis is
- Who some of the rising VC stars in New York tech are right now
- What Fred does when he feels uninspired at work
- How he handles investments that aren't going to pan out, plus what happened to Turntable and Brewster
- Why Tumblr's sale didn't feel like a major win for New York tech
- Why the New York tech scene has seen better days
- Fred's retirement plans
Below is the lightly edited Q&A with Fred Wilson:
BUSINESS INSIDER: What's happening to the world of venture capital? Tools like AngelList make it easier to find deals. Young people are going out and raising funds. Is the industry changing?
FRED WILSON: For somebody who has spent a decade doing venture capital at a big firm to leave and start their own firm, that's kind of always been the way the venture capital industry has worked. I'm seeing a lot of it even right now, this year. Not in New York as much. But certainly a lot of it is going on in Silicon Valley where partners who are in their late 30s or early 40s are departing the more established, bigger firms and starting new firms.
The reason that's a pretty good model is because they have been doing venture long enough that they understand how it all works and they go and raise a fund and they put their name on the door. Generally speaking, those funds perform well because you don't have a legacy portfolio so you're just working on the new stuff. If the world's changing and a new thing is coming, you can get on that more quickly sometimes than other people can.
It's a tried and true mechanism to create new blood, energy and creativity in the venture business. I think that's something we'll continue to see happen. Then, you have these other things you mentioned, like AngelList and a lot more angel investing and seed investing activity.
That's been a big theme for what's been going on in the venture business over the past five to ten years. I think that is a good thing because it allows more people to participate in the financing of startups. You don't need to have a $100 million fund to do that. Actually, with the launch of the syndicates feature on AngelList, you can be in business as a venture capitalist with other people's money without even raising a fund because you just get a bunch of people to follow you on AngelList and effectively, you could marshal up a million dollars of funding without even having to raise that money. I think that will make raising the first round--the seed round for most entrepreneurs--a lot easier. And it has gotten way easier I think, which is why there are so many startups to talk about every day.
BI: You mentioned that i's always been a trend of people leaving bigger firms to start new ones. What about, for example, Josh Kushner? He raised a fund soon after he graduated from college. Is this something we should expect to see more of?
FW: I think there are a few people in the venture business in New York who come from families that have the resources to start their venture capital careers.
In New York, because of the media industry, the real estate industry and Wall Street, there are a lot of families with large capital bases. It wouldn't surprise me that we'd continue to see young people getting out of college and deciding that this is what they want to do and having their families support them in that. That could be an emerging trend. In the Bay Area, too. I'm sure something like this has happened in the Bay Area as well.
BI: Mike Rothenberg (28), Dave Tisch (32) Joshua Kushner (28), Nikhil Khalghatgi (30) and Mike Brown (30) are all examples of young people who have raised their own large funds. But you've said you feel venture capital should be an "old man or woman's business." Why?
FW: What I meant by that--
BI: Not that you're old.
FW: Well, I am 52. I'm pretty old. What I meant by that is there are a lot of people in the venture capital business who used to be entrepreneurs. In fact, if you look at a firm like Kleiner Perkins, Gene Kleiner and Tom Perkins were entrepreneurs and then when they got into the second half of their careers, they moved to become VCs.
The same thing is true with Ben Horowitz and Marc Andreessen. They were entrepreneurs and when they got into their 40s they thought, "Starting a company is hard work and we've done it a bunch. We know a lot about it. Maybe, if we transition to being VCs, we can have hundreds of entrepreneurs become successful with all the things we learned being entrepreneurs."
I think there's this classic thing where, when you're in your 20s and 30s, you're an entrepreneur. And when you're in your 40s and 50s, you're a VC. That's kind of what I meant by it.
I don't mean that Josh Kushner or Dave Tisch or Mike Brown--some of the younger VCs in New York--can't be good VCs. Although, I do think it's a business that takes a little bit of time to learn. You can learn it much faster if you move from being an entrepreneur into being a venture capitalist 15, 20, 25 years into your career, because you have a network and you have all that experience and a lot of it is transferable.
But if you come into the venture business right out of college or grad school as I did, it takes a long time to learn the business because you've got to learn everything.
BI: You've said it took you 10 years to become a "halfway decent" venture capitalist. Now you're one of the best-known and admired investors. How did you create your legacy?
FW: I've been at it for a long time. I was doing deals here in New York City in 1990, so that's almost 25 years ago, and there weren't many people who were doing deals in New York City in 1990. When Jerry Colonna and I started Flatiron Partners in 1996, we were really alone with RRE, one of the two New York-centered venture firms. We were high-profile for some reason. I don't entirely know why. We certainly didn't really deserve it. We made a lot of money, but everybody made a lot of money in that period. If you couldn';t make money in the venture business from 1996 to 2000, you were bad. Just really bad.
We were okay, we weren't great. But we were good enough and we made a bunch of money. We did some high-profile deals like TheStreet.com and The Industry Standard--which was the big magazine at the time--Inside.com, which was another media-focused thing, so there were a lot of people writing about us. Maybe that's what it was.
By the time we started USV in 2003 I'd been investing here in New York for over a decade. I think along with Kevin Ryan and a few other people, I sort of became one of the veterans of the community.
BI: When people think of USV, they think of you. But there are other partners there doing great jobs. Tell me about Albert Wenger. Could he one day run USV?
FW: Albert did the MongoDB deal. I think in some ways MongoDB is one of the most interesting New York success stories of the past decade because it's the kind of company you wouldn't expect to find in New York. It’s a hardcore tech company; a database software company. Oracle and MySQL and all the big database companies came out of Silicon Valley. Albert's a computer scientist and he was really taken with what Dwight Merriman and Elliot Horowitz were building there.
Albert has Foursquare and Edmodo, which is a really big education network platform based in Silicon Valley. He's got Twilio, which has become hugely successful and Wattpad. He also found Etsy for us.
If you look at the portfolio Albert's built since 2008 when he joined us from Delicious, he's made 15 to 20 investments. I think at least half of them could be billion-dollar companies. A couple of them already are.
He's probably the best relatively new VC in New York City based on his track record. There are other people you mentioned--Josh Kushner, Dave Tisch and Mike Brown--who could emerge as good or better than Albert, but they haven't been at it quite as long. I'm really pleased to see the success he's had because he's super bright and he's great to work with.
BI: Why does he fly under the radar?
FW: It's hard because I have such a big profile and it's difficult to have multiple front people in a venture firm … Brad Burnham has been an equal partner with me since the very beginning. He should get as much credit for our success as I do. He doesn't, and that’s not right or fair. It's because I've been more public and more out there with my blog and public speaking. I'd like to try to tone it down as much as possible and push them out into the forefront. But it will take a long time before [the public perception] changes.
BI: What about your newest partner, Andy Weissman? How did you recruit him from the firm he co-founded, Betaworks?
FW: My view of it (and Andy and John Borthwick may have slightly different perspectives) was that Betaworks had one foot in being an incubator and one foot in being a seed investor.
We invested with Betaworks in Tumblr, Kickstarter and a number of other startups. From afar, I felt like John really wanted Betaworks to be more of an incubator and Andy wanted Betaworks to be more of a seed investor. They were struggling to figure out if they should create more startups like Bitly and Chartbeat, or if they should do more investments in Tumblrs and Kickstarters. It felt to me that what John really wanted to do was become more of an incubator--a holding and operating company. I didn't think Andy was as excited about that path. I approached Andy.
We had already had a lot of experiences with him before we asked him to join us as a partner. We knew how he conducted himself with entrepreneurs. So I said, "We need another partner because we're doing another early stage fund and we need to have some more capacity. Would you be interested in possibly joining us?" He was.
Then he went and said to John, "Look, I think you want to take Betaworks in more of an incubator direction and I really have my heart set on doing venture, so maybe we can find a nice parting of the ways," and they did. He joined us for our 2012 fund, which we raised in the final quarter of 2011. He's been here for about 2.5 years.
What's interesting is, we've done three early stage funds and we're about to embark on our next one. The first early stage fund, the 2004 fund, Brad and I essentially made 10 investments each. Then the next early stage fund, Albert joined us. Brad and I made four investments each and Albert made 10. Then our next fund, Brad and Albert and I made three investments each and Andy made eight investments.
That's kind of how we've done it: We've invited one new person to come in and that person drives a lot of the new investment activity in that fund because the existing partners have legacy portfolio companies we spend a lot of time on. There's no way I could make eight investments, for example, in the next three or four years. But when someone comes in here without a legacy portfolio, they can do that. That model has worked really well for us.
Now what's happened is that Brad and I are coming off of almost all those investments we made in the 2004 round. I'm not on the board of Twitter anymore. Delicious, TACODA, Twitter, Tumblr and most of those companies have exited now. There are a few that haven't, like Etsy, where I'm still on the board. But now we have all this new capacity that we didn't have three or four years ago. So our next early stage fund we're not going to have a new partner come on because Brad and I can collectively be the new partner.
Andy came in and he's done a bunch of really good investments for us. Unlike Albert, I can't tell you yet that Andy's got the greatest portfolio of any VC his age [because he hasn’t been at it for long enough and cycles take about seven years], but I think early signs are quite good for Andy. He has really fit in and helped us make a lot of investments that fit right into our model.
BI: What were the three startups you invested in during the last fund?
FW: One we've not announced. It'll be the last investment of the 2012 fund and we haven't closed it yet, but I'm leading that. Then Sidecar and Coinbase.
BI: What is USV's investment thesis? Social platforms?
FW: What we say is "networks." Social was the predominant kind of network we invested in during the 2004 fund. That fund had Twitter, Tumblr, Zynga and Delicious in it. The 2008 fund was more things like Kickstarter, Edmodo, Wattpad and SoundCloud, which are networks. They are social, but not like the others.
Edmodo is a really good example of what I mean by networks. Edmodo is a Facebook-like network that public school teachers use. It's free, so any teacher can just say, "We're going to be using Edmodo in this class this year." Then the teacher invites the students to connect to her on Edmodo, and in their timelines they get all their homework assignments, their reading assignments, their practice tests and all that. When they go home it' all in their Edmodo. It's a network, teacher-to-teacher, then teacher-to-student … It's social, but not in the way Instagram is social. It's social in the pursuit of education; like Wattpad is for writing and reading; or SoundCloud is for making and listening to music.
The 2004 fund had these big horizontal social platforms. In the 2008 fund, it was more vertically-oriented networks that had a social component to them. In the 2012 fund, it's really been more marketplaces. So Funding Circle, Kitchensurfing and Sidecar. We're still doing "networks," but we've been looking more for transactional networks where there's money exchanging hands. It's not that we wouldn't do something purely social, but we haven't so far.
BI: Is that because all the social platforms and networks have been built already?
FW: No. I think it's just that we invest in what's interesting to us. We maybe suffer a little bit from from been-there-done-that and want to move on to whatever's next. I do think that being first to something is often better. If you think about the big social platforms, LinkedIn and Facebook were started in 2004, and Twitter was started in 2006, and they are as big, or bigger than, any other social platform out there. I think Instagram may be as big as Twitter now, but the next wave of social platforms have in general been a little smaller: Tumblr and Pinterest and Foursquare.
The next wave of social platforms didn't quite get to the same scale. I think that oftentimes the first of a category ends up being the biggest of a category. Then as the category matures and there become more segments, those segments might not be as big, so we tend to like to try to be in the first wave. In crowdfunding, Lending Club and Kickstarter I think are going to be bigger than the next wave of crowdfunding things, which are more constrained and more niche. It doesn't mean that those aren't going to be good, but I think getting there first is oftentimes the best.
BI: You said Instagram is as big as Twitter. In terms of active users?
FW: I think it is. Not in terms of revenues. But I think in terms of active users they're probably as big as Twitter. It's easier to post a photo than it is to write a Tweet.
BI: It’s all about the selfie craze, too.
FW: Although the selfie craze has really moved to Snapchat, right? It feels to me like photo sharing went from Facebook to Instagram. Then with the arrival of Snapchat, there's now the stuff that I really want people to see and then there's the stuff that I really only want my friends to see.
A lot of the stuff that was on Instagram has now moved to Snapchat. It doesn't mean that people are not using Instagram, but if I go back and look at my Instagram feed a year ago versus today, there's a lot of people who were in my Instagram feed a year ago who aren't there today. They've been replaced by brands.
So now my Instagram feed is full of things like the New York Knicks and restaurants posting amazing photos of food. The young Facebook user base who left Facebook to go to Instagram has now seemingly moved mostly to Snapchat and my generation plus brands are what's on Instagram now. That's in the U.S. I think outside the U.S. might be a very different story.
BI: Do you think trends like ephemerality and anonymity are here to stay?
FW: I think social is here to stay. The idea that people use the Internet to connect and share with other people is, I think, a forever phenomenon.
I think a lot of what we're seeing is a reaction to Facebook and how Facebook was so dominant as a social platform for the past five to 10 years. The things that Facebook forced you to do--to use your real name, to post something publicly that everybody could see … these are things that people ultimately had a bad reaction to.
We use the word ephemeral, but to me, part of Snapchat is the fact that it's controllable. It's more about the control than the ephemerality. With Snapchat, I know who's going to see this and I know it's not going to move out beyond that place.
With anonymity, for a long time it was all about real names. Mark Zuckerberg was like, "Real names is it, and anonymous is bad." Now all of a sudden we see a lot of innovation happening with people using anonymity. I think all of this might be just a phase we're going through.
The Democrats controlled the White House and Congress for 20 years and we got The Great Society, and then Republicans came into control in the Reagan-Bush era and we got a new model, which was a reaction to that. Now it seems like the public is moving back a little bit away from that and we've had Democrats in the White House now for most of the past 20 years. Public mood shifts. They go this way and they go that way.
I think a lot what we're seeing now is because the Facebook model was the dominant model for a long time and I think a lot of people now are interested in these other models. But I think they'll have their run and then it'll be something else.
BI: Switching gears a bit: 2012 was not the best year for you, if I recall a blog post I read.
FW: Yeah, 2012 was a bad year for me because I had too much on my plate. A lot of it was dealing with companies that weren’t going to succeed and I knew they weren't going to succeed, yet I had to spend a lot of time on them. It got in the way of being able to make new investments.
I also wasn't particularly inspired by the things I was seeing. I talked a little bit about been-there-done-that. The whole world of social wasn't particularly interesting to me. It was a combination of all of that, really. 2013 was better. I made two investments and found this other one, which we're going to close in another week or two. We were much more productive in terms of new investments.
With Bitcoin and the blockchain, I found something that got me excited again.
BI: How do you deal with feeling uninspired? Even if you get in a rut, you don't seem like someone who will ever retire.
FW: There’s a question about what’s the right thing for USV. With Andy and Albert, there's a next generation here that at some point needs to become front and center. I've got to figure out a way to allow that to happen and not be hogging the limelight.
Maybe an answer is to go from being the lead founding partner to more of a lower profile so their profiles can rise. But I really like working with entrepreneurs and finding new things, new technologies, new business models, new things to get excited about. I can't imagine that I wouldn't be doing this work in some way. But I don't know that it will be in exactly the same way that I do it now. I’ll figure that out as it goes.
We just raised two new funds, which we're going to start investing in at some point this spring, and Brad and I signed up to be full partners in those funds. That means we're committed to continuing our involvement at USV in the same way that we've been involved for the past ten years for another three or four years, minimum, because that's how long it takes to invest a new fund. Then there'll be another fund and then we’ll have that same decision to make.
If you come back here in three years, we can talk about whether or not I'm going to sign up for another early stage fund. Right now, I'm all in.
BI: What made you personally decide to go through with this new fund?
FW: Part of it was feeling a lot better about the fact that there were things I wanted to invest in. There were also four or five investments that we either sold or wrote off or wound down in one way or another in the past year-ish that I was the lead investor on.
BI: Turntable comes to mind.
FW: Turntable and Canvas and Boxee.
BI: What about [once-buzzy contact app] Brewster?
FW: No, Brewster's still going. Brewster's doing okay. There was TargetSpot, which we sold to Radionomy. Boxee sold to Samsung. Turntable wound down. Canvas wound down. I think there's one other, but I can't think of which one it is right now.
Those--let's call it five because I'm pretty sure it was five--were probably collectively taking up half of my time. Now I don't have to work on any of those, so that frees me up for a lot. Working on companies that aren't going to be successful is, I think, an important part of being a VC because you say to the entrepreneur, "Take my money because we're going to bring my time and our resources to help you be successful." Just because they're not successful doesn't mean you can just bail on them. Eventually, these things wind themselves down and move on, but you have to be there through that whole process.
It's like having a kid, right? You can't decide to have a kid and then at age 10 just say, "Okay, I'm out of here." You've got to get the kid into college.
We pride ourselves on that here at Union Square Ventures. I've written about this a lot, but our ratio is about a third, a third, a third. Meaning that about a third of the things we invest in literally don't work out at all, things like Turntable and Canvas. A third of the things we invest in work out, but don't work out very well. They lead to some kind of a sale, but it wasn't a very successful outcome. Only a third of the things we invest in actually turn into the Twitters and Tumblrs and Etsys and Zyngas of the world.
That means that two-thirds of the things you're spending time on are things that aren't going in the right direction, which is kind of a bummer.
BI: Investing in a startup like Turntable has to be hard. You put money in and it seems like a rocket ship--then all of a sudden it tanks. What's that like?
FW: Well, I think we made a bunch of mistakes there, some of which I would blame on the board and some of which I would blame on the company. But in general I think we did not react to the data. The problem with that service was people churned out of it very quickly.
People would come in, fall in love with it and then six to eight weeks later, they were done with it. We knew that pretty early on, but it was hidden by the fact that the number of people who were coming on board every day was higher than the number of people who were churning out. It looked good, but we actually knew that there was something about the service.
I think the problem was that it was too demanding. You had to be in it. It was too social of an experience. What I think we could have done, if we had moved quickly, is that we could have created a passive listening experience. The reality is, if you're into electronic music or Indie Rock music or Hip Hop or whatever, there were Turntable rooms that were creating as good of a passive listening experience as anything you could get on the Internet, with these super-engaged small groups of users who were creating the streams. If there was a way to just put a Turntable room on and listen to it in the background, I think we could have built an interesting business. But we didn't move to do that. We just stuck with it too long and it fizzled out.
BI: Spotify came out pretty soon after and stole some of the thunder.
FW: Spotify had been around. I think Spotify launched in the U.S., though, in a big way. I think those are different things. I don't feel that that was the problem. Someone told me a long time ago that 80 percent and this number has been true since the dawn of recorded music--80 percent of listening is when someone's playing the music for you and 20 percent of listening is when you're playing the music for yourself.
Vinyl records, CDs, MP3, iTunes and Spotify are experiences where I get to control what I'm listening to and Pandora or AM radio or FM radio is when someone plays the music for me. I think there's a huge market out there for, "I don't really want to think about it. I just want to listen." Pandora is huge.
I think with Turntable we just got that mix wrong. But it was good while it lasted.
BI: USV was in Tumblr. Tumblr had a billion-dollar exit to Yahoo, but it didn't get the New York scene excited like Instagram did in Silicon Valley. They were both the same sale price, both sold to big companies. Why did their sales caused different reactions?
FW: Some of it might be the narrative. Instagram came out and when it was super hot, Facebook bought it. Their whole thing happened in the span of 24 months. Tumblr, we invested in in 2007 and it exited in 2013, so it was a six-year experience.
I think people understood that the sale of Tumblr in some ways was a reflection of the fact that Tumblr struggled to become a business.
The product is still hugely successful. If you look at the numbers in terms of number of active participants on the network and pageviews, all of that keeps going up even after Yahoo bought it. It's never, ever slowed down.
But Tumblr really struggled to build a business, a sustainable business that could make it an independent company the way that Twitter successfully did, the way that LinkedIn successfully did, the way that Facebook successfully did. The sale to Yahoo in some ways was, I think, a reflection of the fact that they ran out of time on that.
The sale price was awesome and David made a great outcome for himself personally and we did really, really well on our investment. But I do think that the narrative there wasn't quite the same thing. It was maybe a little bit like what could've been, had Tumblr been able to figure out how to make itself a stand-alone business. Maybe it could've ended up going public and being worth five or 10 times what it sold for.
By the way, the same thing's true with Instagram. If Instagram had stayed independent, it would be worth a lot more than $1 billion, no question. Both of those companies probably sold too cheap, relative to what they could've been had they remained independent companies. But I think the Tumblr story is different because they gave it a shot, whereas Instagram never even tried.
BI: What's happening in the New York City scene? Is there something happening here that makes the startup scene less exciting than in years past?
FW: What I was thinking as you were asking the question is that I'd love to look at the data. We make about eight investments a year, maybe 10. It would be interesting to look at the percentage of those investments that are in New York vs. outside of New York and to see if that's changed.
I feel like the percentage of investments that we make in New York, out of the total that we make every year, has come down, and that we're making more investments in other places like Europe, Silicon Valley, Waterloo, Toronto (Kik is in Waterloo and Wattpad is in Toronto).
I think a couple things are happening in New York. I think that there are a bunch of companies that have been around for a while in New York. Tumblr is an example of that. Foursquare is an example of that. Etsy's an example of that. Kickstarter's an example of that. Gilt could go on and on and on. These are not new stories and haven't been new stories in a long time. They're doing really well and soaking up a lot of the talent.
But what's an example of a company in New York that has come out of the gate in the last few years and really made a name for itself? Another company's Warby Parker, but Warby Parker's been around for four, five years. I'm just trying to think. It feels like the breakouts that we were having in New York in the 2008, 2009, 2010 period produced a lot of interesting companies.
Kickstarter's going to be 100 employees probably by the end of this year. Etsy's going to be 500 employees. MongoDB, Foursquare have 200 employees. So these are all big companies now. Has there been a breakout? I don't know.
BI: Not that I can think of.
FW: You would know. Let me just look quickly at some data and see [pulls up computer screen]. The companies we've invested in in New York ...
There's Codecademy, Shapeways and Stack Exchange. Now Stack Exchange is amazing. It's a huge company. People don't write about it, but Stack is an unbelievable success. But because it's like GitHub, it's a service for geeks, people don't write about it.
We had three companies in 2010 in New York. In 2011, there was Skillshare, Codecademy, Brewster, and then Canvas and Turntable, which are no longer. In 2012 we did Behance, which got sold. Then in 2013, we did Kitchensurfing, VHX and Splice. Those are all three interesting companies, but they haven't broken out yet. I think all three could do amazing things, but they haven't yet, so I don't know. But we continue to invest in New York: Three out of eight is not a bad number. That's 40 percent.
BI: Going back to your 2012 rut and coming out of it: Discovering Bitcoin seemed to lift your investing spirits. Why?
FW: I first heard about Bitcoin in 2011. It was in the winter, so maybe January or February of 2011. I bumped into my friend who was the founder of our portfolio company, Covestor, in the Garment District.
I said, "What are you up to?"
He said, "I'm starting a Bitcoin company."
I'd never heard of Bitcoin, so I said, 'What's that?"
And he said, "I've got to tell you about this. It's amazing."
He came in and told me about it. We thought about investing in his company, but everybody here at USV was like, "I don't know if we can do this. This thing is sketchy. There's all kinds of weird stuff going on here." So we spent about a year, and it was mostly me and Albert, doing our homework on Bitcoin. By the middle of 2012, we felt like we should invest in something. That's when I bet on the Coinbase guys.
They were at Y Combinator. I immediately knew I wanted to invest in Coinbase, but they were coming out of Y Combinator and they did a seed round, and frankly it wasn't really a good fit for us in terms of how much they were raising.
About six months later, in early January of last year, Brian reached out to me and I said, "Yeah, we want to invest." I guess we were interested in Bitcoin for a long time and Coinbase was the first company we saw that was built on top of Bitcoin that we thought was a good investment. It's turned out to be a great investment. The fundamentals of the business are great in terms of their revenues and their users. They have over a million hosted wallets now--that's like a million bank accounts basically--which is amazing. It's a million people.
BI: I think the majority of the world still has no idea what the heck Bitcoin is, so to have a million that quickly is impressive.
FW: And they’re in the U.S. If you don't live in the U.S., you are less likely to use Coinbase because it's a U.S.--dollar centric investment, U.S.--banking centric. The thing about Bitcoin is that Bitcoin's like this global system. What service was your first email account on?
FW: Good. I was afraid I was going to date myself. In the early days, you would have AOL email, or Compuserve email or Prodigy email. Then SMTP came on as this underlying protocol and all of a sudden, if you are on AOL, you could email someone who was on Prodigy. It changed everything.
The thing about Bitcoin is Bitcoin is like SMTP, so you have the Chinese banking system and you have the German banking system, which is really the EU now, and you have the Brazilian banking system and you have the U.S. banking system. They all kind of sit on top of Bitcoin, but if you want to do Bitcoin in the United States, you've got to use a Bitcoin provider that's connected into the U.S. banking system or there's no way for you to get your money in and out of Bitcoin.
What's happened is, these companies that have gotten built up on top of Bitcoin tend to be geography-focused. So Blockchain.info is really Western Europe-focused and BTC China is focused on China and Coinbase is focused on the U.S. What's interesting about Coinbase is they have a million customers in the United States, so it's not even a global customer base. If they go to Europe, which I hope that they will do, they could potentially double in size just by opening up a new market for them.
I just really like the technology of Bitcoin. The thing that I believe in more than anything is that when you have technologies that open up markets, lots of good things happen.
The thing that was always amazing about the Internet is that anybody could put a Web server on the Internet and then anybody anywhere in the world could open up their browser and connect to that Web server and nothing else had to happen. That was the only thing that had to happen. Bitcoin's kind of the same way. It's a completely open system. Nobody controls it. It's not owned by a company. It just is. It's Bitcoin.
I think as a platform to build stuff on, the way that the Internet was in the early 1990s, it's just amazing. I think the architecture with these blockchains is going to get replicated for lots of different applications. It won't be Bitcoin. It'll be Namecoin for identity, it'll be Mastercoin for exchanges. There's all these new blockchains that are coming up that support different use cases. I think this architecture is really, really important. That's what got me excited about it.
BI: Final question just to bring this conversation full circle: To clarify, no retirement plans anytime soon? You're in venture capital for at least a few more years and even if you were to take a step back, USV would go on?
FW: I can't imagine a time when I'm not going to be part of USV, but I can imagine a time when one of my partners--Andy or Albert or both of them--are the people.
People say, "Oh yeah, go talk to Fred at USV." It'll be, "Go talk to Andy at USV," or, "Go talk to Albert at USV." They'll become front and center in people's minds when people think about USV. I think that'd be a good thing.
That's what happened at Kleiner Perkins. Gene Kleiner and Tom Perkins passed the business to John Doerr and Vinod Khosla. That would be a good thing for us to do as well.
Here are some of the most common ways in which small businesses' websites are lacking.
Your customers today expect to be able to go online and easily find information about your company as well as ways that they interact with you. For many small businesses, however, this isn't the case. The infographic below, created by Column Five Media for legal practice management software developer, MyCase, highlights some of small businesses' most common (and fixable) website design mistakes.
A sociologist examines why entrepreneurs team up with the same people again and again.
At the core of most successful organizations are people who work well together.
Happy collaborators are typically more productive and are less apt to look elsewhere for work. But what are the circumstances that lead people to want to team up again and again?
Research by Stanford’s Daniel McFarland suggests that the reasons people continue to collaborate with others in their professional networks are quite different from the motives that led them to begin those relationships in the first place.
Relationships, including professional partnerships, often begin because two (or more) individuals who work in the same place see one another often and have a lot in common. It’s easy to relate to someone the same age who shares your background and values. Beyond that, some people choose to associate with others in hopes of boosting their status or paycheck.How 'Tie Inertia' Drives Partnerships
They often stay in these relationships due to “tie inertia,” which is essentially a tendency to stay with what is known out of a sense of familiarity and commitment. This sense of obligation is strengthened if the people have invested a great deal of time and other resources in the partnership. It stays strong when partners have multiple types of association--they co-advise students and co-publish research, for example--because they know each other more deeply, and also because they have more resources to share.
“To form and sustain these ties, pairs of colleagues must interact frequently to share knowledge,” McFarland writes in his paper with Linus Dahlander, "Ties That Last: Tie Formation and Persistence in Research Collaborations Over Time." In short, he says that people initiate relationships due to “opportunity and preference selection” but stay in them out of a sense of “obligation and complementary experience.”
Colleagues remain in these unions because of positive experiences they’ve had together, regardless of who else may be available. Rather than risking the time and other commitments it takes to seek out new groups, co-workers tend to stay in useful teams they’ve already formed. This continuity is more likely, however, only when people have complementary--but not identical--expertise.
“At the beginning of a relationship, being the same is terrific, but that only lasts so long,” says McFarland, who teaches organizational behavior at Stanford's Graduate School of Business. “If you are too similar, there’s too much overlap” in capability, knowledge, and contacts, which can hamper creativity and breed turf issues. It also can render collaboration unnecessary since partners can do essentially the same things.
That explains why, in the long run, teammates who realize they are too similar often end their relationship unless they can find or develop new points of complementarity. "The surviving ties are those with a degree of similarity so we can communicate but a degree of difference so we can plumb the relationship for additional value and skills one of us may not yet possess," McFarland says.When Partnerships Break Down
When a team is working well, this continuity is a good thing; however, the inertia can have consequences. “People tend to stick to the ties they have formed, for better or worse,” McFarland writes. “By implication this means that some individuals are locked out of fruitful collaborations, while others become less open to collaborations with attractive potential partners.”
When McFarland started this research with co-author and former postdoctoral fellow Linus Dahlander, he recognized that while research about how people initiate ties filled scholarly journals, there were scant findings on which ties they chose to maintain and why.
This struck his interest, in part, because McFarland found himself stretched for time, with competing research projects and many potential collaborators. He had to deliberately narrow down his partnerships. “As a mid-career faculty member, you get tired of dating, so to speak,” he says. “At some point, you have to say no to people. You can’t carry 20 collaborations forever. People fatigue.”
McFarland and Dahlander focused on their most immediate network: Stanford University professors. The researchers tracked newly hired, untenured faculty members over a 15-year period. They recorded which of their peers they repeatedly chose to co-publish research projects, co-write grant proposals, and co-advise doctoral students.
The researchers’ findings about the importance of shared positive experiences and complementarity can help businesses maximize the productivity of their workforce and minimize turnover, especially since more established teams tend to be more productive. Churn can be expensive for organizations. A 2012 study by the Center for American Progress think tank found that, for most pay levels and industries, businesses spend about one-fifth of an employee’s annual salary to replace that worker.Making Partnerships Last
To foster staff longevity, organizations can arrange for group members to switch roles with one another. Allowing colleagues to explore new sides of one another can keep partnerships fresh “like a healthy marriage,” McFarland says, noting that rotating leadership roles are frequently prescribed in classrooms to help students develop new skills.
Google, for example, encourages employees to leave their positions and take on "bungee" assignments for three months to one year in different areas of the company. Employees can acquire new skills and find out whether they like a new job (or are good at it) before committing to it. Most staffers return to their original jobs with new knowledge and experiences to share with their workmates, infusing new energy into their collaborations, creativity within their original groups, and job satisfaction within themselves.
In McFarland’s study, the researchers recommend “adopting activities that look less like mixers and more like team-building exercises” for companies that want to build long-lasting teams. Cocktail parties encourage people to meet one another and expand their networks, but it takes retreats and team-building exercises to encourage trust, communication, and interdependence among group members. It also requires a willingness to rotate your expertise and roles in relationships, so that you can learn new sides to one another and engage in fresh experiences.
And what role does personality play in these professional matchups? McFarland’s study tracked instrumental relationships centering on specific tasks, such as co-writing a research paper. It did not capture what he calls “the warm side of things,” or personality and style.
In the case of his collaboration with Dahlander, the study couldn’t illustrate “that Linus is a kind and giving guy, or that I was willing to traipse across campus many times to engage in research conversations with colleagues that synchronize well and move at a fun clip.”
This piece was originally published by Stanford Graduate School of Business and has been republished with their permission. Follow them @StanfordBiz
Would you trust the 'Bank of Facebook' with your cash? Here's how Facebook's big money project is getting started.
Facebook is mere weeks away from having a regulatory green light in Ireland to allow its users there to store money on the site, and make payments to individuals, the Financial Times reports.
Yes, Facebook is getting into electronic money.
The company's primary initial interest in e-money authorization throughout Europe is so that it can facilitate remittances--the transferring of money by a foreign worker to an individual in her home country--and other various person-to-person payments, the paper reports.Mobile Transactions
"Facebook wants to become a utility in the developing world, and remittances are a gateway drug to financial inclusion," a person familiar with the company’s strategy told the Financial Times.
At first glance, remittances might seem like an odd and narrow path into becoming a trusted online bank, or even a digital Western Union. But over the past few months, as Facebook CEO Mark Zuckerberg has been talking about getting Facebook to more users around the world and, particularly, to those in developing countries, it makes more sense. Facebook spent $19 billion to acquire WhatsApp in order to reach toward that goal of expanding its user-base to places without reliable wireless Internet.
This time, Facebook isn't just acquiring companies that can help it--it's doing the leg work itself, with Sean Ryan, the company's vice president of platform partnerships, at the helm. (Though the Financial Times reports that the social network attempted to pay $10 million to acquire a senior employee from Azimo, a UK-based social money-transfer service.) Facebook would not comment to the Financial Times, calling its reporting "rumor and speculation."
Let's take a step back. It was back in February of 2013 that Azimo added Facebook integration. But the integration is simply to pull user information from Facebook to Azimo; it does not allow one to send money over Facebook. At least not yet.
The Financial Times reports that Facebook has been in discussions with Azimo, and also two other London-based startups in the international money-transfer space: TransferWise and Moni Technologies.
Facebook already makes about 10 percent of its revenue from transactions that take place within the site--but this isn't really banking. Not yet.
Last year, $2.1 billion in transactions happened on the site. But these were almost exclusively payments for games (Facebook takes up to 30 percent of these payments), according to SEC filings. Facebook formerly hosted a virtual currency, Facebook Credits, which was used for apps and games, but no longer exists.
In the United States, Facebook is authorized to do some money transferring. But, according to the Financial Times, that's fairly limited. Mostly, the company processes payments for the companies using its platform to charge users for in-app purchases.
It makes sense that Facebook appears to be first working on performing bank-like services in Europe, where regulations are slightly less complicated than in the United States. And more than half of Ryan's team is based in Europe and Asia, with a particularly significant team in London. And it already has the rails in place to process payments through Facebook.
Google already is authorized in the UK to issue electronic money, and Vodafone has en e-money license in Europe.
These facts considered, one can reasonably expect it won't take long for Facebook to soft-launch the payment features once it has the Irish stamp of approval. It will be interesting to see whether--and if, then how--the company goes about targeting foreign-born workers.
Also, it's unclear how much of a cut of each transaction the social network will take. It'd be simple to charge a smaller rate than Paypal, Western Union, or the startups in the space. But perhaps that's not the value-add Facebook--which already connects friends and family around the globe--seeks to provide.
Then again, Facebook Gifts--the company's marketplace for virtual goods, gift certificates, and deliveries--hasn't exactly taken off, so it's possible the company might ditch the inside-marketplace strategy and adopt a more mobile-wallet-minded approach, as has Google with Google Wallet. If it is moving in that direction, it's certainly mindful that other major web companies around the globe, including Tencent and Alibaba, are also adding mobile transactions to their business models. And it better move fast.
The Internet-connected glasses go on sale today--for one day only. But it's not as big a deal as it seems: Google Glass may be destined for another market.
Google Glass hits the market today--for only 24 hours. For $1500.
Will people rush to embrace their inner cyborg and snap them up? Maybe, but Google has had some significant marketing problems, including people who, out of privacy concerns, are getting openly hostile with some Google Glass wearers. The devices have also introduced a host of other legal issues that have yet to be worked out. And that's to say nothing about the whole super pocket protector vibe. For most of the populace, nerd chic remains an oxymoron.
Even so, Google Glass has some interesting sales opportunities. Not for consumers, but for businesses. Google just launched a Glass at Work program. No wonder. If you think about what such devices can do, they're perfect in many industrial and business settings. Doctors already love reading patient records without having to hold a clipboard or tablet. Using such a lightweight display on an assembly line or warehouse could make a lot of sense.
To put it differently, Google has already begun a pivot. There are times you go to one market with a product or service and eventually realize that someone else would be a much more logical customer. Here are three takeaways, taken from the Google Glass experience, to help make that switch.Start off with a first version.
You can't blame an entrepreneur for wanting to be efficient and immediately finding the right market. Unfortunately, that's often not possible. For all the planning and thinking you do, it might be that you won't immediately know the sweet spot for what you're doing. That's fine. Just start someplace. If you don't, everything remains theory. It's only by getting products and services out in the world that you find out what they won't do and, eventually, stumble across what they can do. It took 3M 12 years to develop the Post-it note after it had the adhesive.Welcome new uses for the same product.
Back to the Post-it note for a moment. Years after the adhesive existed, another 3M employee who had heard about it had the brainstorm that he might be able to keep slips of papers stuck in a hymnal for church choir practice. Then the people in 3M started writing on the sticky slips and leaving notes for each other. It was genius that only happens through classic creativity, when disparate ideas clash. The more people and areas of experience and expertise you can bring together, the better the chance of getting some real innovation. Google has had Glass in people's hands for a year. Chances are that it's learned a lot that will change the direction of the product.Pay attention to what you learn.
The danger with a product pivot is stubbornness. Determination is important to an entrepreneur. Being married to a particular idea is dangerous. Persistence can help move a new venture forward, but you need to acknowledge that force won't work. If another potential use shows up and it seems to have better commercial prospects, jump on board that ship and sail it into some actual business. If your original hunch was right, you can come back to the first market. But if you're selling product and creating a revenue stream, you'll check back out of a position of strength.
In the second episode of HBO's 'Silicon Valley,' a familiar theme crops up: Making tough choices means not always being nice.
The second episode of startup comedy Silicon Valley ventured into familiar territory for entrepreneurs: the terrifying first moments of starting a company.
In this episode, the marble-mouthed protagonist, programmer Richard, has just accepted a $200,000 investment from a Peter Thiel-esque VC named Gregory. After a rather distasteful opening scene with a stripper (let's not get into gender politics here), the show follows Richard trying to figure out just what the heck starting a company is all about.
In his first meeting with Gregory, Richard mutters his way through not having a business plan, go-to market strategy, P&L statement, or company vision for his startup, Pied Piper. Finally, Richard says: "When you said you'd offer guidance, I thought this is the stuff that you'd guide us through."
"I cannot guide you if I have nothing to guide," responds Gregory, quietly enraged.
And there's the rub. When Richard actually starts putting the pieces of the puzzle together, he finds himself in front of one of the biggest challenges that define the life of the entrepreneur: tough decisions.
To make these choices, Richard's oafish mentor Erlich keeps pushing him to "be an asshole." His logic: All the greats were assholes, and if you aren't an asshole, everyone is going to walk all over you.
Elrich has a point. For example, when Erlich refuses to help Richard come up with a business plan (what an a-hole!), Richard asks business dev guru Jared for help. As the two are reviewing the team of coders that will make up Pied Piper, it becomes glaringly obvious that Richard's best friend, Bighead, is absolutely not crucial to getting the company off the ground.
This is when the "asshole" theme comes to a head. Richard is faced with doing the smart thing--being a jerk to his BFF and firing him--or the dumb thing and keeping the mediocre Bighead, a move that will anger the legitimately talented coders at the company.
The point in this episode, for me, was that as a founder, you are going to be an asshole. It's unavoidable. Your job is to just figure out what kind of an asshole you're going to be.
How'd it end? Well, after making a big soapbox stand in front of the company to explain that Bighead is staying, Richard learns that, in fact, Bighead is jumping ship: another startup poached him for $600,000.
When Richard finally gets the check for $200,000 he goes to the bank to deposit it but can't--because it's made out to the company, which he hasn't even created in the eyes of the IRS. (This actually happened to Larry and Sergey when they got their first check for Google).
So yeah, starting a company isn't easy, and can turn just about anyone into a big, bad asshole.
After collapsing from exhaustion, Huffington Post founder Arianna Huffington made these small changes that had a big impact on her quality of life.
Success is great, but it’s not the same thing as thriving.
Your business (and bank account) can be growing impressively, earning you all the outward signs of success and the esteem of fellow entrepreneurs, and yet it’s totally possible that you’re haunted by the sense that your life isn’t all it could be. You’re surviving--even succeeding--but you’re not quite thriving.
It’s a nagging worry that hits people at all levels of their careers, even those who appear to be at the very apex of achievement, such as über-successful Huffington Post founder Arianna Huffington. Seven years ago, she explained recently in an interview with Knowledge@Wharton, she was doing exceptionally well by all outward measures, but inwardly, big trouble was brewing.
"I collapsed from exhaustion, burnout, and sleep deprivation. I broke my cheekbone on the way down and got four stitches on my right eye," she tells her interviewer, Wharton Professor Adam Grant. "It started me on this journey of asking myself the big questions that we stop asking ourselves when we leave college: 'What is a good life? What is success?'"
The result was both her new book, Thrive: The Third Metric, the realization that our definition of success was often impoverished. It includes money and power but not well-being, wisdom, joy, and our capacity for empathy and wonder. Without these, "life is really reduced to our to-do list," she concluded.
How to thrive, not just succeed, raises big, meaty, philosophical questions, but as Huffington tells Grant, her approach to rebuilding her life with an expanded definition of success actually started with small changes. She outlined three modest alterations to her lifestyle that helped her not just look successful but feel successful, too.An Extra Half-Hour
We’ve all read article after article about exactly how awful sleep deprivation is for your mental and physical health, but for many busy business owners that knowledge doesn’t translate to actually getting the recommended amount of rest. Huffington was one of those underslept and overworked, at least until her collapse. Then she made a series of small modifications to her sleep schedule that eventually added up to a profound improvement.
"I began getting 30 minutes more sleep a night than I was getting before, until gradually I got from four to five hours, which is what I was getting before I collapsed, to seven to eight hours, which is what I’m getting now. The result has been transformational," she tells Grant, adding that "all the science now demonstrates unequivocally that when we get enough sleep, everything is better: our health; our mental capacity and clarity; our joy at life, and our ability to live life without reacting to every bad thing that happens."Work On Your Body and Your Mind
Getting healthier doesn’t have to mean training for a triathlon or signing up for weeklong silent retreats, Huffington argues. Doing right by your body and mind is a matter of minutes a day--so, no excuses!
"I used to meditate on and off, ever since I was 13 years old. But I actually introduced a daily practice, which started [at] five minutes and is now at least half an hour. I got to half an hour, again, gradually by experiencing the rewards of those five minutes," she says. "[I also do] some form of movement--yoga, exercise--even when I’m traveling, in my hotel room, for just 10 minutes."Make Space for Giving
For many of us, a meaningful life isn’t about what we get or achieve; it’s about what we give to others. Again, moving from surviving to thriving is largely a matter of putting that simple wisdom into practice, and the best way to do that, Huffington insists, is to start small.
"Giving in small daily ways has been really important. Leaving aside what we give to charity or volunteering time, just one of the first steps I recommend and I practice is to make personal connections with people who otherwise you might take for granted--the checkout clerk, the barista in the coffee shop, the cleaning crew," she advises, claiming even these small actions make a big difference.
Success in this climate requires listening to your customers, establishing their trust, and changing your relationship with them in fundamental ways.
Top-down business is dead. People are now bypassing established brands entirely to get what they need from each other. Welcome to the sharing economy, just one part of an overarching collaborative ethos that is fundamentally revolutionizing not only our global economic system, but also our lives and our communities.
Smart brands needn't be threatened by the collaborative movement. Instead of holing themselves up in branded ivory towers, pioneering companies are redefining their relationships with consumers to form an active collaboration with them or other independent partners. These partnerships can create mutually beneficial change and empower organizations to make faster (and smarter) business decisions. Here are five ways brands can not only embrace, but thrive in the sharing economy.1. Build trust
In her TED Talk, Rachel Botsman, author of What's Mine Is Yours: The Rise of Collaborative Consumption, says that "The real magic and secret sauce behind collaborative consumption marketplaces like Airbnb isn't the inventory or the money. It's using the power of technology to build trust between strangers." The social media-enabled open feedback loop that's built into the sharing economy is raising the bar on service standards. Brand reputation and trust is governed almost exclusively by the voice of the people. After all, without trust, why would you let a stranger sleep at your house when you're not there?2. Listen and act
Establishing trust and enabling sharing requires engaging with consumers through all aspects of company operations, from new product development to messaging to brand relevance. Savvy companies that listen to their customers, and then actually take concrete action to address them directly, gain people's trust, money, and respect.
Of course, this is easier said than done. But here's one example of how a brand can do it right: National Car Rental is collaborating (via a private online community) with well-traveled customers who voiced their perspectives about the rental car experience. This open, honest dialogue informs important business decisions and keeps National in lockstep with customers' shifting needs. And it's paying off: National's membership and revenue have increased steadily over the past four years, and the company has won widespread industry praise and top honors for customer experience.3. Adapt to fit the new economy
Prospering in the sharing economy will require some brands to borrow a page from the Spotify and ZipCar playbooks by catering to those who prefer access over ownership. Brands must find unique ways to emulate--not outdo--sharing-economy startups and innovators. For instance, Home Depot allows customers to rent tools and trucks for all their home improvement needs, rather than buy equipment that may only be used occasionally. And Toyota has designed the i-ROAD, a small, electric concept car eventually meant to be deployed in urban fleets and shared, similar to the bike shares popping up in many cities.4. Build sharing into your pipeline
There is no one-size-fits-all business model for thriving in the sharing economy. Participation will mean, in some cases, extending a product's lifespan, or incentivizing customers to trade or share, rather than to throw away and buy new. For example, H&M customers can trade in used clothing of any brand for store credits, and the old clothes get resold or recycled into new fabrics.
You can embrace the sharing economy by expanding manufacturing sources, like the retail chain Nordstrom, which now sells custom handmade goods in-store and online through a partnership with Etsy. Or consider outsourcing distribution, as in the example of Walgreens, which recently ran a collaborative promotion with online freelance marketplace TaskRabbit, delivering over-the-counter cold medicines to the doorsteps of people who were sick at home.5. Embrace others
Born from the recent tough financial climate, environmental and sustainability concerns, and the ubiquity of technology, the sharing economy empowers us to improve the greater good and solve problems together. For brands, this means rethinking business as usual. Brands have to think of their customers not just as targets or data points, but as active, ongoing partners; a quick look at crowdfunding sites like Kickstarter, Indiegogo, The Lending Club, or Kiva will reveal why. These sites are so successful because people want to see that they are making an impact. And when they do--when people are given the chance to share their ideas, wisdom, and aspirations, and to actively and authentically collaborate with others--they are willing to invest their time, money, and energy toward the collective good.
In order for brands to evolve, adapt, and ultimately flourish within this new economic reality, they'll need to fundamentally reframe their relationship with consumers. Sharing is a nonstarter without equal partnership and trust. Trust is the currency of the collaborative economy, and brands have to actively invest in order to get results.
Are blog comments alive and well--or dead and over? Or has the conversation just moved elsewhere?
If you are one of the 164 million-plus people or businesses that publish a blog, you may be interested to hear that, according to social-media experts, blog comments are dead.
If this surprises you, you're not alone. I was a bit surprised to hear it myself at the Social Media Examiner, Social Media Marketing World conference in San Diego last week. Nichole Kelly, author of How to Measure Social Media and CEO of Social Media Explorer, proclaimed, on a panel moderated by Jay Baer, that blog comments were dead.
That's food for thought indeed for business bloggers. Here are three reasons I think she may be right.1. Moderated comments don't make for conversations.
Most blog comments are moderated, which means someone is looking at them before publishing them to weed out all the spam comments (I'll get to this in a bit), all the self-promotional, SEO-seeking link comments, and the just plain no-value comments like this gem posted on my company's small-business marketing blog: "It's really a great and useful piece of information. I'm happy that you shared this useful information with us. Please stay us up to date like this. Thanks for sharing." Huh?
The point is that moderated comments really leave it up to the publisher to decide what to post. So, you don't always get a real conversation happening because that conversation is edited. And unfortunately, it kind of has to be edited, owing to the problem comments I mentioned. If blog comments were not monitored, you would potentially have a sea of junk in your comment section that could potentially lessen the value of your blog.2. Hear crickets?
Many of the blogs out there get less than a thousand visits per month. This is a recipe for disaster when it comes to comments, unless you've got super-engaged readers who comment and comment often. Many blogs get people to comment by running contests, in which the reader is required to comment in order to be entered to win. But I'm talking more specifically about blog posts that provide help, advice, tips, how-tos, etc., that get no comments, just crickets.
But contrary to what Kelly said at Social Media Marketing World, that doesn't mean your content is crap. It just might mean you don't get enough visits, or that those conversations have moved. And guess where they're happening now? They're taking place on social-media platforms such as Facebook and Twitter. It makes sense. You share your blog posts to these social platforms, and people engage with them there, because social platforms are inherently social in a way that blogs may not be.3. Spam is prevalent.
Anyone who publishes a blog with comments knows that you get absolutely pounded with spam. In fact, Copyblogger shared that, "In a little over eight years, Copyblogger has published more than 130,000 approved comments. Which is pretty amazing, right? But over that period, that's only about 4% of the comments that were left on the site. The remaining 96% were pointless, time-wasting spam."
Ninety-six percent of Copyblogger's comments were spam! And that's with spam filters like Akismet in place! Someone still has to sort through all those comments and mark them as spam or delete them. I don't know about you, but I'd rather focus on creating great content than manually go through a bunch of bogus comments.
There are, of course, many blogs out there with devoted and engaged readers who actively comment. Take, for example, the Moz blog. It's one of the best examples I know of a blog in which every post gets interaction. It allows readers to give each post a thumbs-up or thumbs-down as well as to comment, and most posts have comments in the double and triple digits. It's an effective strategy combined with excellent content targeted at SEOs.
What do you think about blog comments? Are they alive and well, or DOA? Leave your thoughts in the comments.
Brian Cohen, Chairman of New York Angels, tells Inc.'s Scott Gerber everything entrepreneurs need to know about building a business that will impress investors.
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