3 Secrets To Building Billion Dollar Companies From David Sacks
Plenty of people in Silicon Valley would pay $10,000 to sit down and chat about business with the extraordinary David Sacks.
David is one of the all-time great entrepreneurs. He’s the founder and CEO of Yammer, which sold to Microsoft for a cool $1.2 billion.
He was also on the original team at PayPal and an angel investor in Facebook, Airbnb, and SpaceX.
Now, he’s having incredible success in VC at Craft Ventures.
I recently sat down with him on my podcast, which means you get to listen in on a killer conversation.
For free.
In the episode, we covered a lot of ways to get businesses off the ground and the power of ‘going viral.’
He told me one-way founders can go viral is to focus on their product hook rather than their value proposition.
So, how strong the hook — or viral attention — your company gets initially is a good barometer for how successful it will be.
David insights about how to recognize, and create, a successful business are priceless.
Here’s what he recommends:
1. Hone in on your product hook.
Just as a hit song needs a catchy chorus (Hey! Ho! Let’s go!), your product needs a hook if you want to build an extraordinary company.
Without a hook, nobody will engage with your product, and potential customers won’t get the chance to discover the value you bring.
When David’s considering whether to invest in a startup, the first thing he does is look for the product hook — a simple and repeatable transaction, flow, or behavior.
Think of it as the search box for Google, the status update for Twitter, or sending a friend request on Facebook.
The simpler and more discrete, the better.
A lot of founders layer on a bunch of complexity too early.
Think additional features, extra services, premium options.
But the problem with complicating your hook too soon is users need to be engaged with your product before they’re willing to grow with you.
Before he started Yammer, David had been bouncing around the idea to create a corporate social network for a year.
But it wasn’t until Twitter launched that he realized what the hook should be: the status update, but for the workplace.
BAM!
Once he realized what to center the product on — and, in turn, how he’d get users on board — he started Yammer.
At this time, “freemium” in the enterprise space was still pretty new as a hook.
And he is a pioneer because he used this expertly.
2. Innovate on distribution, not just product.
But it’s not enough to have an enticing product.
Really great companies also have a distribution trick.
Something to enable them to grow at an explosive rate.
David has done a genius job of managing explosive distribution with many ventures.
At PayPal, for instance, he embedded PayPal logos on eBay auctions to accelerate growth.
And you could owe money to somebody who didn’t have a PayPal account, which attracted new users.
With Yammer, he allowed individuals to sign up directly, rather than asking their company’s IT department for permission.
The electric scooter sharing startup Bird was the first check David’s venture capital fund wrote — and it also had a great distribution strategy.
When people were walking down the street or driving in their cars, they saw these scooters whizzing by and got curious.
My friend, John Bielenberg, the legendary designer, would call this distribution trick,
“Looking for the dog with a hat.”
If we’re walking down the street, there’s a thousand normal things we won’t notice — signs, pedestrians, cars.
So when there’s something unusual, like a dog with a hat, people naturally notice.
Bird scooters stationed all over a city’s sidewalks is a dog wearing a hat!
David recognized the genius of enabling anyone with a smartphone to scan the QR code and easily become a rider.
And Bird is really soaring now: it’s the fastest growing unicorn in history.
3. Design opportunities to go viral early.
A lot of founders think good marketing is the key to making a product massively successful.
But making your company go viral requires more than just the right story: you must thoughtfully build your business from the bottom up and design plenty of opportunities for virality.
David has a saying: “architecture is destiny.”
In other words, how you structure your product determines how it can grow — and it’s much easier to get it right from the beginning than to change your blueprint later.
Because he strategically designed Yammer’s software to be cloud-based from the beginning, the product won out over similar companies that had to course correct down the road.
Bird’s QR code is another example of deliberate, virally-engineered, design.
It was a fundamental part of the company from the start.
As a VC, David has realized most companies either work quickly or not all.
There’s little to no in-between.
PayPal and Yammer were both under four years old when he sold them to eBay and Microsoft, respectively.
There’s no simple recipe for creating a flourishing business, but designing your product and distribution model with the goal of going viral will set you up for success.
Now that you’ve gleaned the insights from my conversation with David, feel free enjoy the whole conversation.
Legendary Executive Sue Barsamian Shares Her Playbook For A Successful 36-Year Career
All professional sports teams use a playbook—an extremely detailed outline of repeatable offensive and defensive tactics to win a game.
In the business world, top executives use playbooks too. Whether it’s for sales, marketing, product management, or company culture, leaders reference their playbook for replicable, scalable processes directed at boosting the bottom line. Having one saves time and ensures consistent results.
No one has written a winning playbook like Sue Barsamian, a former colleague of mine from my days at Mercury Interactive—a software company HP bought for $4.5 billion. I recently had the pleasure of talking with Sue on my podcast Follow Your Different where we discussed her 36-year career and game-changing approach to running large-scale corporations.
Sue is the most effective executive I’ve ever worked with. And she has had the kind of career people in Silicon Valley dream about. Today, she’s created an amazing legacy. Retired from being an operating executive, Sue now sits on the board of billion-dollar companies like Symantec and Box Inc. as well as Gainsight and Xactly.
But Sue wouldn’t be where she is today if it weren’t for her playbook.
She’s taken her 30-plus years worth of experience and translated that into a guide for responding to almost any situation that arises in business. Sue doesn’t leave anything to chance. By creating highly differentiated strategies to planning and execution, and refining them over time, she’s ensured critical executions are no longer implicit, but explicit. There’s power in writing it down and putting it into a model you can see, or a graphic that explains how something needs to work.
And, like any good coach, she’s able to use very explicit techniques and strategies to teach others strategic ways to achieve real, repeatable results.
As an executive, it’s essential you have a playbook. When we take a situation and break it down—when we “pop the hood on it” so to speak—we’re able to gain so much insight into how it works. From there, you have the ability to get thousands of people to act as one, to get them working together on the same page, and that’s a powerful thing.
With these six tips, you can enact Sue’s approach to have long-term success in business.
1. Discover what works and innovate from there.
When Sue was at HP, they didn’t have the resources to compete with larger, more established businesses like IBM.
To drive sales, she pulled from her playbook to help the team exceed expectations in a limited time-frame. She executed lightning strikes, a short focused set of integrated marketing strategies designed to produce a maximum impact in a short amount of time. At HP, Sue made a name for herself competing with other companies using these highly-focused plays. Her team would pour money into a campaign for one week and drive massive growth. The result was a sales wave they could ride until the next strike.
“I just re-ran that play, time and time again,” she adds, “when we did, we were guaranteed success. We had everything at our disposal to speed through a sales cycle and absolutely crush it.”
2. Diverse teams are strong teams.
Sue credits much of her success to surrounding herself with a different group of people, each with a unique skill-set. While there is a million axis for diversity, the idea was to build a team that didn’t look homogenous.
Diversity, in all its forms, breeds success. McKinsey reports that 366 public companies with the most ethnic and racial diversity in management were 35% more likely to have financial returns above their industry mean.
“It just means mix it up and put different people around you that will challenge you and bring a different perspective,” says Sue.
3. Aim for straight talk.
Sue and I learned a lot about authentic leadership at Mercury.
Both of us were very clear and direct about what we needed and expected from others because Mercury was notorious for its straight talk. We fit in because of it. A culture where everyone was able to be real with each other was created, and things got done more efficiently.
“It’s a very freeing and positive environment for people to operate in,” she told me.
The experience you have working with Sue is that she’s your partner. A true partner says “Hey Michael is something wrong?” “On most things, I agree with you, but on this, you’re wrong.”
She was able to be brutally honest and clear. Sue would have no problem telling you when you were doing something stupid. You might disagree with her, but you’d go with it because it would make sense in the end. You could trust that straight talk was going to get shit done, and done right.
You want to be straight with people, and do it in a way that’s professional. It’s all about cutting out the unnecessary back-and-forth and getting right to the point.
4. Self-awareness is a gift that helps you bring people along.
Part of being an effective leader is the ability to be self-aware.
Not only is Sue amazing at all this other shit, but she’s also great at knowing what she is, and what she’s not. That allowed her to build a team around what’s best for every member. There’s no ego.
You don’t have to be legendary at everything to be a great leader. You just have to create an environment where everyone can thrive. Like Sue, you have to be radically aware of what your abilities and strengths are, and build your team around you.
A lot of executives have a hard time doing this. That’s when you see teams that lose focus, and turmoil ensues. Then executives are left putting out fires instead of getting shit done.
“As a leader, you can’t walk into every room the same way,” says Sue. “Different people resonate, engage, or communicate in various ways.”
It’s a critical skill every executive must practice to earn employee respect, support staff, and motivate people to reach their goals. At the end of the day, if you’re not about other people and their success—if it’s all about you and your ego—the whole team will crash and burn.
5. Stay where you can be stretched.
When you’re doing something completely new, it can be intimidating—but it’s also a phenomenal opportunity to achieve more.
“There were many times in my 36-year career where I was like, ‘Holy crap. Do they know I am really in no way ready for this?’ Being in that type of environment has benefited me tremendously throughout my career,” recalls Sue.
When Sue started working for HP she was offered a job running a billion-dollar cybersecurity business. At the time, she knew nothing about cybersecurity, but executives pushed her to take the role because they knew she could figure it out. Sud did more than find solutions, though. She mastered it, and from there she was put in charge of both sales and marketing.
The positive, unintended consequence of being thrust into those extreme situations was Sue’s ability to continuously drive the company forward.
6. Focus on delivering and exceeding expectations.
Taking Mercury through a multi-billion dollar buyout wasn’t easy. There were a lot of messy problems.
“I’d wake up every day and say, ‘I’m going to do whatever I need to do to fight through this crisis,’” adds Sue.
To get shit done, her team became legendary at analyzing these giant tasks, determining the ideal outcome, and then break it down into easy-to-digest parts. Her mantra became “mile by mile is to trial, yard by yard it’s hard, and inch by inch and it becomes a cinch.”
Part of that meant developing these weekly, monthly, and quarterly milestones. Pretty soon they were seeing these phenomenal six-month, 12-month, and 18-month transformations. By maintaining focus and following Sue’s playbook, they hit their targets in record time.
As an executive, you want your company to win. A playbook is not only a go-to resource for how to run your company. It’s also a guide for creating future success. With one, you give your team the tools to innovate, drive change, and ultimately grow your business.
To listen to the full podcast, click here to Follow Your Different.
Jerry Colonna, “The CEO Whisperer,” Says Vulnerability Is The Key To Strong Leadership. Here’s How
When in a position of power, there is strength in vulnerability.
I recently had a jam session with Jerry Colonna on my podcast to discuss positional power in the workplace—more specifically, how to lead properly in a place of professional power. For those that don’t know, Jerry is the founder and CEO of Reboot.IO, a coaching company aiming to “foster a revolution around work because better humans make better leaders.” As noted by WIRED magazine, this guy can make founders cry—for their own good.
His new book, Reboot: Leadership and the Art of Growing Up, is really something—powerful and intimate. It’s not the same, worn-out business leadership narrative that’s been penned time and time again. As a certified professional coach, he believes in the corporate world leaders should take what’s called “a warrior stance.” Displaying a position of stability and strength, but also openness and non-aggression—and never with a “strike-first” attitude.
If anything, he urges every business leader to always remain humble and vulnerable—characteristics you don’t hear to describe people in positions of power very often.
Here’s some of the wisdom he shared:
To put it simply, better human beings make better business leaders.
Before becoming a great CEO, you have to first make sure you’re a great human.
This requires what Jerry calls “radical self-inquiry.” Or, “stripping away the bullshit mask.” Dropping our manufactured personas, and self-defining with complete honesty.
He went on to explain that only once you’re completely comfortable and confident with your true, human self, can you be a great leader. Because true faith in yourself is so much deeper and stronger than false machismo.
This is what it takes to become a Warrior Leader.
And it all comes down to mindset.
In our darkest hours—when our co-founder quits, investors pull funding, we lose our best client, our board fires us—these are the moments when business leadership is defined. In these situations, a true warrior leader does one important, definitive action: acknowledge they created the conditions that led to their misfortune.
Carl Jung, the father of analytical psychology, once said, “Until you make the unconscious conscious, it will direct your life and you will call it fate.” Jerry loves this quote.
We must always recognize that we are complicit in our failures. We influence everything that happens to us, good and bad. People should not be afraid to ask, “In what ways have I been complicit in creating these conditions I say I don’t want?”
Of course, some of what happens is out of our control. Warrior leaders accept this. Because a warrior leader is confident, secure, has an open heart, and says to the world: “Do what you will with me. Screw you. This is who I am. This is where I stand. I don’t have to be aggressive. I don’t have to attack—but I get to be me. Now, let’s do some great work.”
Positional power isn’t always true power in business leadership—and can be toxic.
Organizations experience power struggles all the time. I’ve seen this happen firsthand and it is nauseating. People need to grow up.
One of Jerry’s biggest points was how your job title doesn’t matter as much as you think it does.
In my own professional life, I’ve been in plenty of “powerful positions” where I could hire and fire whoever, and spend a lot of company money on whatever I wanted. But at some point, I realized that unless I had the power to effectively communicate and influence people, I was powerless.
Because true power is in collaboration.
Business leaders who say, “Do this or you’ll be fired” are powerless, really. The greatest power isn’t granted through a position or title. Because a title can be revoked. Bonds with people can’t.
When we lead from a place of love, however, we bring out the best in others. But when leaders just leverage their power and neglect to be truly compassionate, they create toxicity and fear.
Jerry firmly believes those who hold positional power need to be confident and unwavering, but also humble. They need to be willing to share their story—including both successes and failures—to connect with people. Great business leadership creates a safe environment conducive to growth through its own actions.
The first step is committing to a warrior stance: stable and confident, but also respectful, personal, and accessible.
To listen to the full podcast with Jerry, click here to Follow Your Different.
What is the number one thing a startup founder can do to ensure a seed stage investment?
Sell category potential.
Investors must believe they are getting in early, in an emerging market category.
Savvy investors seek potential, not performance.
They identify companies leveraging technology to create and dominate new market categories that show promise for significant growth.
Because elite tech investors know two things that others don’t:
First, the category makes the company. There is no such thing as a legendary company (brand) that does not dominate it’s niche.
And second, the technology business is a winner-take-all game, where companies that dominate specific markets in tech, such as Google, Facebook and Salesforce, often gain of 76% of the total value in the category.
“Smart investment choices require understanding the potential size and importance of the market category. We seek mission-driven founders who can build a great company and category at the same time,” Sequoia Capital partner Jim Goetz says.
He should know.
His early investment in WhatsApp turned into the $19 billion transactions heard around the world.
Facebook didn’t just buy WhatsApp’s revenue, technology or its 450 million active users. Facebook wanted WhatsApp’s leading position in a strategic, massively growing new market called mobile messaging. The transaction was reported to be the largest acquisition in venture history.
To gain investments from the greatest startup investors, you must get them to believe that you can create a legendary product, company AND category — while executing to earn 76% of the total value in the space.
Cards Against Humanity Co-Creator Max Temkin Has An Unorthodox View On Work Ethic. Ironically, It’s What Made Him So Successful. Here’s How
Max Tempkin is creative, irreverent, unpredictable, and quite candidly, one of the most fascinating people I’ve ever met.
Eight years ago, Max and some friends co-created Cards Against Humanity—a party game for horrible people—with the modest hopes of “delighting a few people.” Within a month after its May 2011 release, the offensively fun card game snatched Amazon’s number one game spot.
But to give you some insight into how Max and his crew have always approached building their unconventional business, look no further than their perspective on Black Friday—the biggest sales day for the toys and games industry.
In 2013, instead of seeing this day as a way to the madness of discounted sales, they actually increased the price of Cards Against Humanity by $5 as a Black Friday special. Later, in 2017, they fibbed about leaving the game industry to instead produce “Prongles” potato chips (which were actually produced and sold at Target).
Then, last year, they held a 99% off sale on a series of bizarre, expensive items, from golden dildos to the actual flight suit worn by actor Bill Pullman in Independence Day. While nearly impossible to land, some lucky online shoppers did indeed receive the ridiculously discounted items.
I was incredibly stoked to pick Max’s brain about design, success, ideas versus execution, and more on my Follow Your Different podcast. Here’s what he had to say about not taking yourself too seriously, building a business, and more.
“No one succeeds purely because they work themselves to the bone every day.”
In fact, he went as far as to admit he “has no work ethic” and is an “awful serial procrastinator.”
So, how is he so successful?
”Coping mechanisms.” He allows himself to “get mad on Twitter.” Grab a coffee. Remove himself from annoying situations. Clear his mind. Whatever helps him get in the right head space to get some work done … eventually.
If work doesn’t provide a certain level of creative freedom and matter dearly to him, he isn’t interested in doing it. And perhaps he simply won’t. He says Cards Against Humanity has been successful mainly because “it means something” to him and his team. He’s more willing to deal with the fallout of missed deadlines than completing a task he doesn’t want to. Each day, he wakes up and decides to focus on whatever creative project (he typically has many in the works simultaneously) he’s most interested in.
When it comes to success, Max emphasized the value of four qualities and approaches: critical thought, good energy, effective collaboration, and patience.
Also, he recommends you get some damn sleep—another reason why the “grind” mentality is flawed. A sleep-deprived person is neither creative nor productive, he asserts. Getting better at anything—whether working out or building a company—requires rest and recovery.
“Design has the ability to speak to consumers.”
When creating anything, your intention is its design. And your design determines how people feel about, perceive, and interact with your work/product. To create without design, Max said, is to speak without language.
If you follow Max’s work, you may have noticed everything is very black and white—literally. That’s the color scheme of every creative project he’s ever worked on, in large part because he never went to art school, so he doesn’t know color theory. What began as a crutch is now a design celebrated for its no-BS simplicity.
The lesson here, for Max, is that there is merit in simplicity and power in constraint. In this regard, he urges every designer to “figure out what’s special about your thing and make it only about that. Get rid of everything else that’s not the special part.” For example:
- Jack White once said his early work, produced when he and Meg White knew just a few chords, is his best.
- Star Wars: Episode IV – A New Hope (1977), was a disastrous production, rife with constraints created by broken equipment, Tunisian sandstorms, and ruined footage—but the movie is legendary. Meanwhile, newer Star Wars films—produced with infinite budgets—can’t compare.
- Part of what made Twitter so great was its 140-character (now 280) limit.
- Jaws (1975), while filming the movie, they couldn’t make the shark work or look scary. It comes out in the end. But for most of the movie, you actually don’t see the shark very much.
There are endless examples of the value of simplicity and constraint.
The topic of constraint also reminds me of a conversation I had with legendary venture capitalist Jim Goetz where he said “Giving a startup too much money was a kiss of death.” Proof that the smallest ideas have the ability to turn into huge phenomenons.
“People tend to dramatically overvalue their ideas and undervalue execution.”
A great Roger Ebert quote which is relevant here: “It’s not what a movie is about, it’s how it is about it.”
Cards Against Humanity, which he calls a “dog shit idea,” is a great example. The concept isn’t original—it’s borrowed from a parlor game format which has been around for 500 years. But he says they executed well—from writing to packaging—on “a pretty stupid idea.”
If you ever come across a Cards Against Humanity t-shirt, that means Max and his team have given up, he says. “That means we’re creatively done with the company and we’re just trying to cash in and get the last money we can out of it. T-shirts will be the last thing we do before we go out of business or kill ourselves.”
Max Tempkin, ladies and gentleman—never one to mince words, be inauthentic, or be afraid to offend someone.
To listen to the full podcast with Max, click here to Follow Your Different.
Why Category Creation Is The Hottest Marketing Strategy Today
Giant billboards. Direct mail promotions. Glossy print ads.
They’re the oldest marketing strategies in the book. Used for decades, companies simply played the comparison game until someone came out on top.
But the days of traditional marketing are over. Having a winning company isn’t about beating rivals in an old game anymore.
Instead, today’s most legendary entrepreneurs, CEOs, leaders, and marketers are category designers. They’re redefining the game by establishing entirely new market categories, developing them, and executing to position themselves as the leader. Category queens and kings.
In the past decade, the legends of this craft have been able to show the world why their breakthrough innovations matter. They strategically grow their markets by influencing customers to abandon old ideas and products and embrace a new way of doing things.
As an entrepreneur, CEO or CMO, you have to ask yourself: Are you playing someone else’s game? Or do you have the courage to create and design your own market category?
Categories are how we assign value to things.
Have you ever questioned why a flat-screen TV at Costco sells for $150, while a high-end pair of sunglasses is $400?
When you step back and consider the options, it’s laughable. Why is a TV—an advanced piece of technology that can talk to satellites in space—less than a piece of plastic a fraction of the size?
Both of these products are examples of a category—the human filing system that allows us to relate goods and assign value.
And that $400 price tag is all thanks to category designers.
That’s their job. They’re the ones strategically positioning products for success. It makes sense that when you design a category around things people care about, you’ll automatically create value while increasing the speed with which customers respond. You become more strategic, you make your company more important, and you change the way people think about you.
If you do this well, you can make people believe a pair of sunglasses is more valuable than a complex piece of electronics. When you do, you’re also considered a pioneer. You’re a visionary entrepreneur that’s breaking—and taking—new ground.
The category makes the brand.
As human beings, we put the category first and the brand second. If we like the category, we’ll be interested in the brand.
Categories build a filing system to create a priority network of brands we “must-have, have and aren’t interested in.” For example, if I like a muscle car like the Ford Mustang then I’m not excited about a Chrysler minivan. And I would even go so far as to assert that categories can make your career as an entrepreneur.
Why? Because companies and brands only matter if they rule their category.
Dentists are a good example. If you’re driving around and you notice a sign for a dentist, the vast majority say, “Dentist,” and below it, “Sally Smith, DDS.” It’s understood that the profession is more important than the person. So they put the category first and their name second because dentists know that categories will make their personal brand stronger.
Likewise, as entirely new categories emerge, they have the potential to drive fresh labels into the spotlight. Take the craft beer explosion on the West Coast. Over the last decade, we’ve seen the rise of the India Pale Ale (IPA). Today, it feels as though a craft brewery opens every 15 seconds, and everyone sells multiple IPAs.That’s because so many people like the category—or IPA—so it suggests if a new brewery has a few, they’ll also like their brand. It’s category first, brand second.
Most entrepreneurs are intuitive about this and understand that category drives interest. So it’s not uncommon to see craft brewery billboards in Southern California that say, “Craft Beer,” followed by the brand name.
Even though I can see all this, it still blows me away that a pair of high-end sunglasses can cost $400 when a flat-screen TV is $150. But it’s just further proof that category design is the new marketing tool.
There’s no such thing as a legendary company in a terrible category.
Companies that want to do notorious shit don’t focus on incremental objectives. They’re set on changing the world at an exponential level. These are the companies that shape our lives and, frankly, they design a different future for all of us.
A great example is Dell computers. In the late ’80s and early ’90s, Dell was famous for designing a new category—selling computers directly to consumers when competitors like IBM and Compaq were selling their products through distribution channels. As the personal computer was establishing itself, Dell came in, changed the game, and became the biggest player in the market.
Then the Internet became significant, and Dell was a pioneer in that space, as well. They designed the category by selling desktops, servers, and laptops that allowed you to access the World Wide Web from anywhere.
Back then, Dell had one of the most powerful labels in technology, but now their brand is boring. And while it’s a $90-billion company that’s run well and creates a number of amazing products, none of that matters. They aren’t creating—or attempting to dominate—any of today’s new technology categories.
They’re simply a great company with great products that nobody cares about.
The most exciting companies are creating entirely new categories in business. They’re solving problems we didn’t even know we had until they came along.
If your brand has a lackluster category, it isn’t going to be memorable and you’re not going to matter tomorrow. Harsh, but it’s true. So it’s up to you to become the category designer for your market. When you do, you just might become a future pioneer of the startup world.
To listen to the full podcast, click here for more from Lochhead On Marketing.
How To Build A Legendary Company: Say ‘No’ To Business Models, Forecasting & Projections (And Do This Instead)
By Christopher Lochhead
It can be terrifying to start a business.
Between finding customers, figuring out your core offering, and projecting revenue, you face a lot of uncertainty as an entrepreneur. And that’s before you’ve even gone to market.
To be truly legendary, however, you need the courage to be different than everyone else.
Rejecting the pack mentality takes guts. And not everyone is able to identify a problem that no one’s ever thought of before, let alone believe in themselves to solve it, and why their solution matters, with every fiber of their being.
But that’s where category design comes in. Once you “niche down” by identifying where you can be different, you’re not competing with other companies in your industry. Instead, you’re making your own category.
We’ve already explored legendary entrepreneurs who’ve nailed category design and expertly executed their magic triangles, so this is all about YOU.
Here’s how you can make your business massively successful by niching down.
Building a legendary business means having the courage to step forward into the coming “niche-nado.”
Technology allows us to reach huge, global audiences, and the tools at our disposal will only increase in the months and years ahead.
Podcasts, video-streaming platforms, and newsletter-distribution services are a few technologies that make it possible, nay easier than ever before, to become a personal enterprise by selling your expertise at scale.
You can hit the big time without needing the support of a massive organization or administrative network. In other words, you can niche down.
Remember when small companies actually knew their customers and tailored things to their exact needs? Kevin Maney, the co-author of my book Play Bigger, foresees artificial intelligence facilitating a closer relationship between entrepreneurs and customers.
Once you have a tighter bond with your clients, you can understand and better anticipate their specific needs.
An example of this concept in practice is Stratechery, a media and consulting newsletter that offers daily and weekly analysis of technology giants like Apple, Google, and Microsoft. Created by former marketing and strategy executive Ben Thompson, Stratechery isn’t trying to beat all the sites hawking tech news. Instead of chasing clicks or scoops, Ben decided to appeal to a narrow audience that he intimately understands: industry insiders.
Today, his newsletter is a Silicon Valley must-read in certain executive and investor circles, and he counts subscribers in 30 countries.
Technology enables you to build your personal enterprise and share your expertise with a much larger, yet more niche (read: interested) audience than ever before.
Embark on a journey of self-discovery.
Being legendary isn’t something that happens by accident. You have to make a choice to be legendary.
NBA basketball legend Bill Walton explains this mindset simply and perfectly: “I wanted to great.” And Bill is one of the happiest people I know. In one of his podcast episodes on my show, he told me that his decision to be excellent brought a majestic calmness to his life.
Rather than waiting around for opportunities, you have to have a goal and a plan to achieve it.
Learning about yourself is the first step to figuring out how you can use your unique talents and skills to be legendary, how you can find your niche. By increasing your self-awareness, you’ll be better able to examine the accepted norms and practices of a given industry, and then blaze a trail that verges away from the road well-traveled.
Here are some questions to serve as guideposts for your journey:
- Is the industry you’re seeking to address dominated by companies that are complacent?
- Is the category you’d like to occupy growing or shrinking?
- What do people think about the problem you’d like to address?
- How might new technologies affect your category?
Avoid the very real struggles facing your competitors.
People often have a hard time starting something new.
But the important thing to remember is once you get an idea for how you can niche down, don’t worry about now knowing how to do it.
Instead, just dive in and forge your own path.
Jordan Harbinger, the lawyer turned podcast pioneer, started his show “The Art of Charm” on a whim 11 years ago. He didn’t even have any production experience, but this didn’t matter.
Back then, there were only 800 or so podcasts (rather than ~500,000 we have now). There wasn’t much competition for ear time. Jordan had plenty of room to experiment, and his unique hosting style developed—and resonated with listeners. Rather than approach interviews with a long script of prepared questions or treat guests as his friend, he cast himself in the role of audience advocate.
And that became his differentiator.
So he ditched his day job in law to dedicate himself to defining the self-help category. Today, “The Art of Charm” is widely recognized as one of the first podcasts to build a mass audience, and he has his own eponymous show.
Don’t laugh at me here, but being different is what makes a difference. By being a category designer and niching down, you can achieve a deep-rooted satisfaction knowing that you brought something altogether new to the world.
Fast-forward, and after all this awesomeness happened for Jordan, he and his business partners had a falling out, which meant the Art of Charm was no more. All of a sudden, he had no podcast and no business.
But in less than a year, he created the Jordan Harbinger Show, and now he’s more successful than ever. And he won best of 2018 by Apple podcast, with one of the most popular podcasts— surpassing even his old podcast.
How?
He had established himself so powerfully as a category king in his niche that when his show got taken away from him, and his brand got taken away from him, he was able to reinvent himself again, and in less than a year, be one of the top podcasts on Apple—and build a business today that is even stronger than it was before. In a year, he was able to build a more popular and recognized presence than what he had done in the 11 years prior.
This is yet another powerful example of what can happen when you establish yourself by owning your own niche. You can have everything taken away from you, and then bam, you can come back even more powerful. Because when the niche wants you, and the category wants you, they must have you.
For more legendary stories from legendary leaders, listen to the Follow Your Different podcast.
Note: This post first appeared on Minutes Magazine.
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Is There A Formula For Happiness? Science Says There Is
By
Lately, it seems that we talk more and more about success and satisfaction and less about being truly happy.
This is especially true for young people, who have to work harder than ever for financial security. While NYU Stern Professor of Marketing, Scott Galloway, has done his fair share of research on how we perceive “happiness” in modern society, he’d like to make it known he’s no social psychologist.
Most importantly, he thinks we should all be thinking more deeply about what makes us truly happy—the things in life that give us that warm, enriching sensation of genuine happiness.
I was stoked to have Scott on the “Follow Your Different” podcast. He told me that, over the arc of our lives, we cannot lose sight of happiness as we strive for success. Scott has worked tirelessly to differentiate the two—in both self-interest and the interest of others.
At one point in his career, he felt like he was on a hamster wheel. Constantly working to level up his economic status, he was unsure as to why he felt the need to make more money and boast a more astute job title. After much introspection, Scott, an atheist, decided he wanted to maximize his time on Earth by trying to feel genuinely happy as often as possible.
He knew he wanted to always “live in the moment.”
But what exactly does that mean?
Binging Netflix, eating Chipotle, and taking a Cialis to perform with your partner all provide short-term happiness—and when it came to fulfillment, Scott said he was looking for something more. When looking back upon his life at some later stage, he knew he wanted to be able to say he checked the right boxes.
In order to determine what exactly “the right boxes” were, he conducted a ton of research, made lists of observations, and created a series of algorithms—before turning all of those findings into a video and a book titled “The Algebra of Happiness.”
Scott isn’t an eternally happy individual, by any means. He’s struggled with anger and depression and has experienced a profound personal loss—something we both have in common. But instead of coping with drugs or alcohol, he’s chosen to relentlessly pursue true happiness. He lives by the belief that “success equals resilience over failure.” Explaining this philosophical equation in the aforementioned video, Scott said, “Everyone experiences failure. Everyone experiences tragedy. You will get fired, lose people you love, and likely have periods of economic stress. The key to success is the ability to mourn and then to move on.”
The arc of happiness.
Appropriately, the arc of happiness looks like a big smile.
On the happier (not happiest) end of the spectrum is childhood—years spent watching cartoons and playing outside with friends. High school, with all its sexual exploration and football games, is also up there. Young adulthood, when we discover partying and alcohol and find freedom, is also generally quite happy. These, of course, are all times in our lives when we have little stress due to financial insecurity. (They say money can’t buy happiness—and it can’t, but financial security can.)
Around 25 is when “shit gets real,” says Scott. Many experience a quarter-life crisis in which they realize they may never have their own fragrance line or become President. This realization often coincides with personal loss—a loved one’s death, a rough breakup, the loss of a job—and the weight of life crashes down on you fully for the first time ever.
Generally speaking, 25 to 45 is the bottom of the arc of happiness. Of course, that doesn’t mean we can’t be genuinely happy during this stage. But this career-focused stage of our lives is usually very challenging, emotional, and stressful.
It isn’t until we’re 45 or 50 that we begin to appreciate what we have, reflect on the meaningful relationships we’ve built, and take stock of our blessings. And, of course, the happiest people in the world are the ones who perhaps shouldn’t be, given that they deal with the most health issues: senior citizens. With wisdom comes happiness, apparently.
True happiness requires being willing to find the right zip code.
Migration has proven transformative throughout human history.
Moving to a new place requires us to adapt and develop new skills. And the best of us are willing to move to a megacity like San Francisco, New York, London, and Dubai when we are young—where we’re most likely to succeed. We find and join the right environments. An aspiring pro skier will move to Aspen, a motivated stockbroker will set his or her sights on Wall Street.
But you don’t have to stay in that prime environment forever. Once you’ve honed your abilities in a challenging environment where only the elite survive, you can return home. If you built a successful tech startup in San Francisco because you were good at it, you can eventually move back home to Indianapolis where you’ll be one of the best at the sport.
Especially with research suggesting that, over the next 30 years, two-thirds of GDP growth will occur in a small number of super cities, it’s imperative that you’re willing to move to succeed. To find ways to “put the wind at your back, ski on better snow, surf with better waves,” as Scott puts it.
Telling someone to follow their passion is dangerous.
Most of us are passionate about finding something we’re good at, becoming great at it, and making a living at it.
But there are plenty of happy millionaire tax accountants who aren’t passionate about tax accounting—but are passionate about making a good living and supporting their families. And are driven by going to conferences, networking, and becoming a better tax accountant. This considered you don’t have to be passionate about the actual work you do to lead a passionate, fulfilling life.
You can be passionate about professional success in any industry.
Telling people to “follow their passion” is dangerous because they perceive that as “if it’s hard, if it feels like work, then it isn’t for you.” People think, if they’re passionate about something, it should come easy to them. But that’s not the case.
We’re often most passionate about risky prospects—trying to make it as a professional athlete or a movie star, opening a bunch of flashy night clubs as an entrepreneur, or setting our sights on writing for Vogue magazine. Of course, it’s possible to make a living doing these things.
But even if you do succeed, there was likely an easier path requiring less emotional and time investment leading to a similar financial reward. In other words, a less-sexy industry would have been a safer, easier bet.
As an investor, Scott prefers non-sexy industries. “If it sounds cool, I don’t go near it,” he says. “A friend of mine is opening a members-only club focused on music and artists downtown. Sounds amazing. I want to be a member. But I will not invest.”
Obviously, his ideology on choosing a career and choosing industries to invest in parallel with each other.
Scott disagrees with the idea that we should “never give up.” There is a point at which we need to realize it’s time to abandon ship. “There’s a balance. You need people to advise you when you need to persevere through obstacles, but at the same time don’t just bang your head over and over again.”
We’re all going to fail and some point—so we’re better off failing fast, learning from the experience, and moving on better for it. Scott has had plenty of failed business ventures. One cost him $3 million out of his own pocket. He doesn’t regret them. “The best thing that can happen is success. The second best thing that can happen is failing fast.”
At that point, Scott had gotten away from the connection between success and happiness. “I want to finish where I started,” he said. “Depth and a number of meaningful relationships are key.” He says young people need to recognize when they’re unhappy, whether it be because of substance abuse, unhealthy relationships, or a lack of professional success, and address the underlying issues.
Above all, being happy requires removing the things separating you from being happy.
Note: This post first appeared on Minutes Magazine.
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3 Women Who Are Changing The Way We Think About Designing A Product
The best way to design a category is to find a problem, articulate it powerfully, and make sure others see the solution as you see it.
By Christopher Lochhead
Most of us can’t go a single hour without reaching for our iPhones.
But nobody even knew why they needed an iPhone until Steve Jobs told them. And he did it by creating a brand-new category: a touch-enabled “smartphone” that can connects to the internet and doubles as a media player.
Rather than simply solving the problem of, “What should a phone be capable of?” Jobs redesigned the problem by showing us, then conditioning us, to equate smartphones with his product. He owned this niche. Today, it’s still the standard against which all other smartphones are measured—with over 1 billion iPhones sold and counting.
To build lasting brands and products, legendary companies focus on category design, the purposeful and proactive decision to be different, to stand out from everybody else. Category design is about creating demand for something entirely new, rather than chasing share in an existing market.
The best way to design a category is to find a problem, articulate it powerfully, and make sure others see the solution as you see it.
Here are three female Entrepreneurs (with a capital “E”) who have nailed category design, and what you can learn from them:
1. Sara Blakely (Founder of Spanx): How To Identify A Category
Category designers are on a mission to solve a problem in a new, better way. To make a difference in the world.
Sara was a fax-machine salesperson who grew more and more frustrated with the challenge of getting her pants, skirts, and dresses to hang on her body just right, without unseemly bulges. To give her appearance a sleeker look, she used to cut the feet out of her pantyhose and wore this modified garment under her clothing.
Sara knew she wasn’t the only woman with this problem, so she worked for two years to turn her idea into a bonafide product while continuing to sell fax machines.
Although she didn’t have any experience in fashion or retail, she did have an infectious enthusiasm for how her undergarments could help other women. She was a missionary, and her goal of solving a common problem led to Spanx, a wildly successful new underwear category.
By narrowing the problem and niching down, Sara established herself as a billion-dollar category queen.
And she became the youngest self-made billionaire (of any gender) in the U.S.
2. Debra Sterling (Founder of GoldieBlox): How To Prevail In The Face Of Rejection
Category designers are rebels: they break the rules, flout convention, defy the odds. But as a result, they often face pushback from the establishment.
Debra, who studied engineering and product design at Stanford University, was inspired by her friend’s story of playing with her brother’s construction toys as a child, there were no alternatives for the fairer sex. She saw the lack of building blocks for girls as a golden opportunity to fill an unmet need and expose young women to the male-dominated field of STEM.
Her solution was simple, but her path to success was difficult.
For one, the toy industry, plagued by gender stereotypes and outdated ideas about consumer demand, wasn’t receptive. Then she was rejected by Y Combinator, a reputed organization that funds early-stage tech startups.
[Oh right—did I mention the VC universe is decidedly male-centric with its investments—female founders received just 2% of venture capital funds in 2017. Many male VCs weren’t interested in her product.]
But Debra persisted. She started a Kickstarter campaign and raised more than $285,000 for GoldieBlox, demolishing expectations.
Her company has now sold more than one million toys worldwide. But even more importantly, she’s empowering young girls to learn about the sciences from an early age.
Because Debra wrote her own rules rather than chasing share of the existing market, she successfully reimagined the toy category from a brand-new, female point of view.
And she dominated the category.
3. Dushka Zapata (Top Writer on Quora): How To Design And Dominate A Category
In hyper-competitive fields like publishing, the people who become legendary often find alternative paths to the top.
My friend Dushka is a great example of this.
After working in marketing and PR for years, she courageously quit her job to pursue her long-time dream of being a writer.
But then reality set in: she was drowning in a sea of relative obscurity, competing with thousands of other writers (many with decades more experience) who also yearned to be published.
Dushka’s solution was to imagine a new place for herself as an “amateur social writer” on a digital bookshelf. She designed an original “writer” category by combining her unique point of view with Quora, an online question and answer platform.
Instead of hiding from her readers in dark library corners, Dushka wove herself into the community. She answered users’ questions on the site, for free, sharing her experiences and what worked or didn’t work for her.
Today, she has over 100 million views on Quora. And she’s a best-selling essayist, all because she made her own way. For context, Hillary Clinton’s official Quora posts have roughly 32 million views.
To dominate an industry, you have to focus on category design from the start. Because these three entrepreneurs identified a problem and niched down, they’ve become legendary category queens.
Note: This post first appeared on Minutes Magazine.
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