We discussed how to project sales results, how to be analytical about what’s working and what’s not, empathy, transparency and a bunch of other things related to working in a high pressure environment.
Check it out below on Stitcher or on iTunes.
We discussed how to project sales results, how to be analytical about what’s working and what’s not, empathy, transparency and a bunch of other things related to working in a high pressure environment.
Check it out below on Stitcher or on iTunes.
As a sales leader, your most important metric is top-line revenue.
But a very, very close second is the percent of sales team members that are attaining quota. Ideally, this number should be around 60% to 70%
If you’re hitting your top-line number but only 10% or 20% of reps are hitting quota, you have a couple heroes but you don’t yet have scale. That’s a problem. You’re placing all your cards on a small number of individuals that could stumble. And you’re also wasting a lot of time and money on reps that aren’t carrying their weight.
Some reasons why you might have this problem:
Product/market fit isn’t yet validated (broadly, or in specific markets or product segments).
Inequitable territory allocation.
Quotas too high.
Lack of training.
Inadequate management or coaching.
Ramp-up times are too aggressive.
Lack of quality sales talent.
Low employee engagement.
One caution: be careful about the time period that you’re using to measure this metric. For SMB sales teams, it’s fine to look at quota attainment over a month or a quarter. For enterprise sales teams you probably want to look at this on a rolling 12-month cycle.
Finally, view this metric as a journey that never ends. When a company starts, generally the founder is the only one that can sell the product, then a couple more can do it, then a few more and so on. As you grow, you’ll need to continuously evaluate and solve for the problems listed above. When you solve for these things and get quota attainment up to 60% to 70% it’s time to increase your quotas and do it all over again.
The hardest part of building a growth machine is that it’s never finished.
I’ve started writing year-end book lists rather than summer reading lists. See past lists here.
I recently heard someone say that they only read books that are more than ten years old. His thinking is that if the book is still getting good reviews after all that time then it must be really good. I think I like that idea. A lot of newer books that get good reviews don’t end up standing the test of time. This past year I read a lot of new books. I’m going to change that in 2019.
Here are the best books I read in 2018, in order:
Atomic Habits by James Clear. I’m such a believer in the power of habits. Motivating yourself every day is just too damn hard. This book offers a very actionable guide for creating them. A fast read with great advice that you can put into action right away.
Empires of Light: Edison, Tesla, Westinghouse, and the Race to Electrify the World by Jill Jonnes. Business history is my favorite book genre. This one gives the reader all the detail on these three amazing entrepreneurs and the competitive dynamics they faced in trying to commercialize electricity and light. Not much has fundamentally changed in entrepreneurship since the 1800s. Success in new ventures requires the ability for the founder to see the crazy big opportunity that most can’t see. Most people thought electric lights would only be used to replace gas street lamps. These three saw so much more than that.
Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou. The story of the rise and fall of Theranos. Even if you don’t care about tech or healthcare or startups this one is just a great read. It reads like a great fiction novel. Carreyrou was the Wall Street Journal reporter that exposed what was really happening within the company and this book lays out all the troubling detail.
Tribe of Mentors: Short Life Advice from the Best in the World by Tim Ferris. This is one of the best books I’ve ever read. The only reason it isn’t first on the list is because it isn’t really a book; it’s a series of short interviews with dozens of world-class performers (writers, entrepreneurs, athletes, etc.). It talks about their habits, morning routines, secrets to success and other philosophies on life. I made more highlights in this book than any book I’ve ever read. After reading nearly 600 pages of interviews with high performing individuals, if I had to summarize their secrets to success I’d say it’s two things: they read a lot and they meditate daily.
The High Growth Handbook by Elad Gil. Gil has been through it all at several high growth startups (Airbnb, Twitter, Google, and others). This book is basically a technical handbook on growing a startup. It offers extremely practical and actionable advice and gets really, really specific. I’d call this a must read for any first-time founder.
The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor by David S. Landes. The title says it all. A fascinating and detailed look at the way societies have evolved and why some have done so well while others have struggled (hint: it’s mostly about climate). Despite the heavy topic, Landes keeps this one pretty readable.
Tribe: On Homecoming and Belonging by Sebastian Junger. I think I’ve read everything Junger has written since the Perfect Storm (one of my absolute favorites). He’s such a great writer. Tribe is a quick read and covers the topic of PTSD for veterans returning from war and the irony that so many troops are happier at war than they are when they return home. The reason is that war-time creates such strong bonds between platoons regardless of race or ideology or other individual traits. It creates enormously strong ties and loyalty and there’s a strong human desire to belong to a tribe. All that seems to fall apart when troops return home. A troubling but really interesting topic.
Shackleton's Way: Leadership Lessons from the Great Antarctic Explorer by Margot Morrell. This is a classic leadership book that I can’t believe I hadn’t heard of it until someone recommended it to me a few months ago. The book chronicles Sir Ernest Shackleton’s leadership of his crew through a failed 1914 Antarctic expedition. Shackleton’s boat got stuck in ice and sank in the middle of the Antarctic and he and his crew survived for two years before being rescued. The story itself is amazing but Morrell lays out really interesting and classic leadership lessons from Shackleton along the way.
This Is Marketing: You Can’t Be Seen Until You Learn To See by Seth Godin. I’m pretty sure I’ve read all of Seth books and I rarely miss his daily blog posts. Seth’s books are always a little idealistic and aspirational and this one is no different. This one is sort of a summary of most of Seth thoughts on marketing. If you haven’t read anything by Seth this one would be a good place to start, though I think Permission Marketing should be required reading for business school students and is one of the best business books ever written. So read that one too.
Behind the Cloud: The Untold Story of How Salesforce.com Went from Idea to Billion Dollar Company and Revolutionized an Industry by Marc Benioff. The story of how Benioff flipped the enterprise software business on its head. This is a great read for anyone that works in enterprise software. Someone recently made the point that every 1% of Salesforce.com’s market cap represents a unicorn. I think this company is going to be really interesting to watch over the next several years. There are literally hundreds of startups trying to unbundle this massive CRM. Benioff is an outstanding salesman and a great leader and for anyone that works in enterprise software this one is definitely worth reading.
Several months ago, my company’s CEO, Jay Desai, was featured in the First Round Review in a piece titled The Indispensable Document for the Modern Manager. The feature was about Jay’s “user guide” that he had written for his team that outlines the way he works and how his team can work with him most effectively.
From the piece
This guide has been a great help to Jay’s direct reports and many others across our company.
As the piece mentions, Jay inspired me to write my own user guide.
I’ve found it to be invaluable — especially for my newer hires. Rather than taking several months to figure me out they can cut right to the chase and get lots of context on how to quickly start working together most productively.
I highly recommend writing a user guide and sending it to your team and asking them to do the same.
See my user guide below. I’ve embedded it as a Google Doc so any changes I make to it will flow through to this post.
Like many jobs, sales leadership can be quite stressful. Success in many ways is binary. You set a goal at the beginning of a period and you either hit it or you miss it. Lots of jobs don't have that level of clarity around success or failure. In sales you can’t hide. There’s no grey area.
This kind of pressure isn't easy to deal with. Here are some of the things I've picked up over the years to make the stress a bit more manageable.
1/ First and foremost, set goals that are attainable and that you believe in. Don’t let finance or your CEO or your board dictate the number for you. You have to believe you can hit the number.
2/ Have your own financial model and forecast. Your finance team and others will have their own models. Have your own as well. Ideally, the elements of the model will consider the following assumptions: 1.) quotas by role 2.) headcount and hiring plan 3.) ramp-up time for new reps 4.) quota attainment % and 5.) rep turnover rate. If you have 10 ramped-up reps with a reasonable quota of $250k and, on average, the team hits 80% of quota then you should be comfortable with a $2MM quota. The math isn’t hard. The hard part is getting comfortable with each of the above assumptions. And that takes time. I'd encourage you to create some slack around your assumptions while you're still figuring out how accurate they are.
3/ In the early days, you won’t have any of those assumptions. You’ll have to calculate your target from a bottoms-up perspective; e.g. what you can accomplish based on current pipeline and your current understanding of deals are likely to close. This means you’ll have to set shorter term targets (monthly or quarterly instead of annual).
4/ Approach your job as a police investigator would approach an investigation. Always look for clues as to what’s working and what’s not working. Create your own dashboard in your CRM that shows you what's happening in real-time. The dashboard should include things like revenue, opportunities created, pipeline dollars created, speed to close, etc. All of these reports can be broken down by sales stage, rep, market and customer segment. Watch these numbers on a daily basis and have a borderline obsession with what's happening. Find the bottlenecks. Write up and document wins and learnings every week and have your team do the same. Those tools will give you the clues you need to track down what things you should do more of and what things you need to change. I’ve written a bit about pipeline management here, here and here.
5/ Create a weekly meeting where you review the learnings and findings above and invite your sales leadership. The topic of the meeting is one thing: are we going to hit our number? Don’t leave that meeting until you have consensus on that answer. And if the answer is “no” then get consensus on what’s going to be done that week to get back on track.
6/ Be as transparent as possible with leadership and your board. Think of this as a see-saw. When you’re on track to hit your number, the see-saw goes to the left (numbers up, need for transparency down). When you're not on track, the see-saw goes to the right (numbers down, need for transparency up). When things aren't working people want to know why. Don't wait for them to ask.
7/ Build a process around how you update various stakeholders (weekly meetings, email status updates, pipeline reports, deal reviews, etc.). Again, be proactive on this. Nobody should have to ask for these updates. Make sure people are getting what they need.
8/ Learn from others that have the same challenges. Some sales books and blogs are great but I've found sales and sales leadership podcasts to be the most effective way to get smarter about this topic. Listening to an actual person that does what you do is a great way to gain insights and generate ideas for what you and your team can improve. Check out a couple here and here.
9/ Finally, and most importantly, take care of yourself. Create healthy habits and get more aggressive about following those habits when the pressure increases. Get enough sleep. Eat well. Drink lots of water. Exercise. I also encourage meditation. I'm not as consistent with meditation as I could be but there's no doubt mindfulness gives you important perspective on the pressure you’re under. I use the Calm app and love it. Again, I've found that doing all of these things is more important when the pressure increases. When you're feeling good no problem is insurmountable.
Several weeks ago I spoke to a partner at Andreessen Horowitz (also known as a16z), the prominent, Silicon Valley venture capital firm.
He explained to me that his firm takes more of a "marketing" as opposed to a "sales" approach in attracting entrepreneurs to their funds. For people that know the firm, this may seem obvious.
When I started working in tech, the best venture capital firms did not take this approach. Their investments were driven by rooms full of young associates cold calling entrepreneurs to find the best companies. a16z has taken a different approach and has focused on getting entrepreneurs to come to them.
The way that they’ve accomplished this is through the production of great content — blogs, social media, podcasts, videos, etc.
The quality of their content is phenomenal. The a16z podcast has been a favorite of mine for years. One of their founders, Ben Horowitz, has written a best selling book, The Hard Thing About Hard Things, that has become an indispensable guide for people starting a company. They’ve also recruited partners that were great at producing content long before they joined the firm. Chris Dixon, now a partner at the firm, was a major inspiration for me to start writing this blog. He no longer blogs independently but you can find his archives here. I also followed Benedict Evans closely long before he joined the firm back when he was a mobile analyst in Europe and writing great stuff about tech. Now he's a partner at a16z. He’s arguably become the new Mary Meeker of tech with his annual State Of Innovation Talk.
a16z made a brilliant move by recruiting these two guys. I'm sure they're great investors in their own right, but I know for a fact that they're incredible content producers.
Case in point: when my company started talking to a16z about taking an investment from them I was very excited; not because I knew the firm well, but because I had an extremely high opinion of them that was driven by their content before ever actually meeting or speaking with anyone from the firm. That is the definition of great content marketing. High quality content that doesn’t ask the consumer for anything, but passively improves the perception of the company or product.
I just started reading Seth Godin’s new book, This is Marketing, and in it he reminds us of the right way to do marketing:
Seth has been saying this in one way or another for almost 20 years (at least since writing the Purple Cow) and it’s a great way to think about content production. If a16z’s content went away, a lot of people would miss it. That’s a great standard.
Most marketers are producing some form of content these days. But very few are going all in. At last check, a16z sees about 2,000 qualified inbound pitches per year, only to make 20-40 investments. So going all in is clearly working for them.
Marketers don’t necessarily need to hire the top thought leaders in their space to create content. But it’s worth thinking about what going all in would mean for your brand and asking yourself if anyone would miss you if you were gone.
A few weeks ago I had the opportunity to be interviewed on the B2B Growth Podcast with Logan Lyles. I really enjoyed the discussion. We touched on a few things I’ve been thinking a lot about lately; including how to structure a marketing team with sales objectives in mind, the different profiles of marketing leaders and some thoughts on hiring great leaders.
Union Square Ventures had a great blog post the other day on The Myth of the infrastructure Phase.
They argue that the narrative in tech that says there’s an orderly infrastructure phase followed by an application phase is a bit of a myth. Instead of orderly and distinct phases, they argue, it looks more like an ebb and flow. Apps, in many cases, drive infrastructure then that infrastructure enables new apps, and vice-versa. From the post:
“Planes (the app) were invented before there were airports (the infrastructure). You don’t need airports to have planes. But to have the broad consumer adoption of planes, you do need airports, so the breakout app that is an airplane came first in 1903, and inspired a phase where people built airlines in 1919, airports in 1928 and air traffic control in 1930 only after there were planes.
We’ve seen this trend in healthcare technology as well.
The first electronic medical record dates back to the 1960s when Dr. Larry Weed created the problem-oriented medical record that allowed his fellow providers to see notes, medical history, etc. in an electronic format (application). The first EMR as we know it that included additional functionality such as billing and scheduling was launched in 1972 by the Regestrief Institute, though adoption was extremely slow. In the 1980s, the need to transfer clinical information between providers led to the creation of Health Level 7 (HL7), a set of international standards for transfer of clinical data between different applications (infrastructure). By the late 1980s, low-cost personal computers (more infrastructure) allowed providers to do what Dr. Weed was doing at scale. The emergence of the internet in the 1990s (more infrastructure) allowed providers to use electronic medical records remotely, increasing adoption and leading to more use cases (more applications).
Today, thanks to meaningful use incentives enacted under President Obama, the vast majority of healthcare providers use electronic medical records and Dr. Weed’s initial application has become an infrastructure of its own. EMRs, originally just a collection of apps that sat on top of an infrastructure, have now become the infrastructure for a new wave of applications that can plug-in to the data stored within the EMR.
Now we’re seeing a new layer of infrastructure being built that will connect all of these EMRs to one another across the full continuum of care — acute to subacute to post acute to home care to ambulatory, etc. There are lots of organizations working on this (including my own) and there’s no doubt that success is on the horizon.
Once this “connective” infrastructure is built we’ll see a new wave of health tech applications that will be built on top and will bring enormous value to our healthcare system.
We don’t need airports to have planes, and we don’t need connectivity to have medical records. But pilots, patients, and providers are a lot better off when we do.
I'm beginning to think this is the best piece of leadership advice I've ever read.
As a leader, when your company grows and the demands of your job become greater the need for crisp, direct and candid communication becomes increasingly important. At some level of scale, avoiding or delaying hard conversations with customers, prospects, peers, a boss, the board or direct reports can literally become disastrous. Decisions get delayed, expectations aren't set, people lack clarity, bad habits persist, and individuals and teams row in the wrong direction.
I've found that uncomfortable conversations, like most things, get much easier with practice. As you have more of these conversations you start to build an "uncomfortable conversation muscle" and these conversations seem much less daunting. When you start getting comfortable with the uncomfortable you really start to see the value.
I'm not saying that one needs to walk around looking to have difficult conversations but a willingness to jump into a sensitive and thorny dialogue is crucial for success in leadership. Uunfortunately, the easy and natural thing to do for most people is to avoid or put off the hard conversations. The leader that doesn’t hesitate to go there quickly and is willing to address the elephant in the room will have a much higher likelihood of success than the leader that does what’s natural and easy.
I recently had the chance to sit down with Scott Sambucci from SalesQualia on his Startup Selling Podcast to discuss: The Selling Process vs. The Buying Process in the Enterprise Sale. We covered a wide range of topics, including the most common mistakes entrepreneurs make when selling into large companies, selling innovation and building and managing teams. Check it out below on Soundcloud or on iTunes.
Whenever I interview someone that recently worked at a startup that went out of business I ask them why it failed. How analytically someone answers this question says a lot about them. But the truth is that I'm mostly asking because I'm curious. I want to know what to look out for.
More often than not, the answer comes down to one thing: dysfunctional leadership. More specifically, for some reason, leadership didn't communicate well and couldn't make quick decisions.
Tomas Tunguz had a great blog post on this topic recently, titled the Challenge of Uncertainty. From the post:
Slow decision-making can be paralyzing for a company.
Management teams should check themselves occasionally on the speed and quality of their decision-making. It will almost always deteriorate over time. There are dozens of little things that can weigh down management and cause them to slow the pace -- too many direct reports, too many meetings, not enough meetings, new personalities, fear of telling the truth, personal issues, different communication styles, poor prioritization and on and on. All of these things will come up at some point. How well a leadership team weeds through this stuff and finds a way to continue to make good, speedy decisions might make the difference.
Joining a tech startup for the first time is extremely difficult. If you’ve come from a big public company or a non-profit or the public sector it can feel really unnatural and even uncomfortable. The way you’ve operated in the past likely won’t work. Things will feel weird.
I’ve had the luxury of working in five different tech startups and have been in a position to see trends around the things successful people do and the things the not so successful people do. Here's some advice based on what I've seen over the years. I hope it’s helpful for people that are joining a tech startup for the first time.
Be incredibly good at dealing with change. Depending on the number of employees in the startup, headcount can literally double in a month or even a couple of weeks. The number of customers serviced can double. Cash in the bank can grow by 1000x. A crucial employee can quit. A major customer can cancel. Because startups are small, change and its impact can feel radical. The company can become a different company in an instant. This is a strange thing. This doesn't happen in a normal company. In addition, in the early days, a startup is really just a hypothesis about solving a problem. And the way that the company is solving the problem will change constantly. For the employee, this means they are likely to have different bosses and jobs and roles and projects in a short amount of time. Learn to enjoy and thrive in this change.
In your first 90 days do something awesome. When you join a startup, because of its small size, you’re going to have a lot of eyes on you — particularly from people that can make decisions about your future. Find a way to impress them. Take ownership of a project or a sale or a product or a process improvement and dive in deep and make it great. Be transparent about what worked and what didn’t. You’ll find that failure is generally not frowned upon and learning is highly valued. Doing something awesome is not necessarily easy. It’s not going to come to you. Have zero expectation that someone is going to set you up for success. Go get it and make it happen.
Avoid playing politics. In larger companies, to get ahead you have to play the political game. This is much less true in startups. In a large successful company an employee can do nothing and play politics and the damage to the company is non-existent. The great employees aren’t playing this game and if you are you’ll stand out. People will pick up on it and you’ll get a reputation as someone that is political and it’ll be hard to shake. Get stuff done and be transparent about your success and learning. The downside of a startup is sometimes if one person doesn’t like you it can hold you back because there isn’t a defined system to move you forward. This is why you should avoid playing politics because it’s a quick way to get people that matter to not like you. The way to be liked is to produce results and share what you're learning.
Think short term and long term. This is one of the hardest things to do. It's not natural but it's necessary. The main thing that is going to get you ahead is your ability to produce short-term results and to be transparent about those results (and your learnings). You have to think short-term and show weekly if not daily progress. But you also want to have a longer-term point of view on your industry and where things are going. Your leadership team is getting paid to predict the future and that's hard to do. They will love the employee that can deliver short-term results but can also act as a thought partner in how the company should be thinking about longer-term strategy.
Make work a very big part of your life. There are times in our lives where we want to focus lots of attention on things outside of work. If you’re going through that time in your life then I’d encourage you not to join a startup. A startup’s cost of capital is generally extremely high. It costs the startup a lot of equity value to raise the capital needed to pay your salary. Because of that, there will be high expectations around your commitment and production. This is a crucial point. It’s simple math. It costs much more for a startup to employ you than it does a big company. And your impact is also greater. If you’re in a 30 person team your contribution, on average, is 1,000 times greater than the same person in a 30,000 person company. The startup is going to rely on you greatly. If you’re uncomfortable with that pressure you’re in the wrong company.
Be humble. It is enormously difficult to effectively operate in startup if you’re not humble. It almost can’t be done. The way you are doing things today is going to change dramatically because it’s not right. Your product isn’t right. Your pricing isn’t right. Your process isn’t right. Your go-to-market isn't right. You have to have a perpetual curiosity about what can be done better, the humility to recognize it can be done better and the willingness to go out and do it better. If you can’t check your ego and do this well you will fail.
Hire people that are better than you. When you’re hiring people there’s a temptation to make sure that you’re not hiring someone that can take your job. Do the opposite. Hire people that can take your job. This may not feel natural but I’ve found over and over again that people that are willing to take this approach win because they build A+ teams and that’s much better than the safety that comes from hiring a B team. A+ teams create exponential value. B teams create linear value and in some cases negative value.
Be insanely commercial. Most startups are not sustainable. If they weren’t taking in outside capital they’d go out of business. Be very aware of this reality. This is not a comfortable situation for the executive team. By definition it’s uncomfortable. Embrace this reality and get onboard with leadership in understanding that it all could come crumbling down. Commercial success is the only thing that matters in the early days.
Challenge yourself to understand context. Because things move so fast and there often isn’t clear ownership and process, decisions made by leadership or other teams may seem dumb. People may seem incompetent. This generally isn’t the case. At one startup I worked in I had the luxury of working closely with the leadership team but I wasn’t on the leadership team. I’d be in the room and see how leadership made decisions and then I’d be out for drinks with my peers and they’d complain about how leadership was clueless and didn't make good decisions. I couldn’t believe what I was hearing. The problem wasn’t that leadership was incompetent, the problem was that my peers lacked the context and lens that leadership was operating under. Challenge yourself to not dismiss seemingly bad decisions as people being uninformed and try to see the decision through the other person’s eyes.
Consider doing the impossible. If you dive into the history of most extremely successful startups they probably did something at some point that seemed impossible. This is true of most major success stories. For some reason, I always think about poker on television. Today, millions of people watch poker on television but there was a time when this was a crazy idea. The reason was that the great players would never agree to have the cameras see their cards during a game. And if the viewer couldn’t see the cards all the drama would be lost. But it was a non-starter with the players. No way. Never going to happen. But some ambitious TV producer saw the opportunity and didn’t accept that reality. He forced it and found a way to get the players to agree and now television poker is a multi-million dollar product. Consider the things that you think are non-starters or are impossible and try to see if you can find a way to break through. Don't be the naysayer. Be the one searching for the solution to the impossible problem. Find a way.
I’ve found that one of the most important things an executive can do is to regularly identify the “issue of the day” for their company or their team or their group and to address it with urgency.
Peter Drucker refers to this as identifying “what needs to be done?” Ideally, it's one thing, but definitely not more than two.
The discipline to continuously have this in mind and to have the emotional intelligence to be able to accurately identify the issue of the day is difficult and something that separates great leaders from the rest.
The issue of the day could be a number of things: some are opportunities, some are problems, some are strategic, some are tactical, some are elated to business problems, some are related to people problems. An example could be launching a product that will create a large growth opportunity or retain a specific set of customers; onboarding new managers and making them into productive leaders or something as small as fixing a commission policy or plan that is frustrating for top salespeople. The key is the ability to recognize the issue and measure its importance and urgency in comparison to the hundreds of other burning issues that could be addressed.
One of the most difficult things about determining the issue of the day is that different people will often have different perspectives on what the issue of the day actually is. The board, the CEO, the executive team, the line managers will often have different opinions. Getting alignment here is crucial. And, just as important, if alignment can’t be gained across all relevant stakeholders, the executive must make the call on what's most important now and focus on that thing more than any other.
Back when I was working at Next Jump, an e-commerce company that enabled big brands to offer their products and services at a discount to large employers and customers of large consumer marketers, our primary objective was to drive spend through our website.
My specific job was to drive user acquisition. I was focused on acquiring more companies to buy the product for their employees and then to get employees (users) to register an account and keep coming back. My colleague, I'll call her Jane, was in charge of site merchandising and had the job of converting those users into buyers once they came to our site. So my job was to get people to our site, and her job was to get people to buy once they arrived.
Every week our teams would meet to review results. We’d start by focusing on the total spend on our site during the previous week. Some weeks the numbers would be up and some weeks they'd be down. In the weekly meeting, our leadership would look at Jane and ask what happened during the previous week. Frequently, Jane would look at me and say, “we didn’t have a lot of spend on the site because we didn’t have a lot of traffic.” Other weeks I would look at Jane and say, "we had plenty of traffic but that traffic didn’t convert into spend."
This was obviously unproductive. We were pointing fingers at one another and defending our impact on the overall number which meant that nobody was responsible for the overall number.
Our solution to this problem might seem counterintuitive: we created silos.
We came up with something we called “the box.” My team had the job of getting people into the box (get people to the site) and Jane's team had the job of making good things happen once they were in the box (get people to buy things once they were on the site). My primary metric was weekly unique users and Jane’s primary metric was conversion of those users (spend per unique user).
This changed everything. We set up specific metrics for each team where neither one of us could ever blame the other. My team wasn’t measured on overall spend (something we couldn’t control alone) and Jane’s team wasn’t measured on overall spend (something her team couldn’t control alone). We were measured on our slice of the spend metric (users and conversions) and if we both did our job we had a great week. This change created crystal clear ownership and accountability which led to lots of creativity and powerful initiatives to drive each teams' numbers. Our overall spend numbers started heading up and to the right.
Over time, though, things started to break down. Because we were so silo’ed my team wasn’t focused on the overall company goal, we were focused on our team goal. So my team would do whatever we could to drive users to the site regardless of the impact on spend. We would repeatedly promote offers from Target and Best Buy (brands that had 'mass appeal’ and would drive traffic but had relatively low value discounts with low conversion rates). This would drive a ton of traffic to the site, but the traffic didn't convert. Similarly, Jane was focused on conversion so she would promote the best offers on the site (30% off Juicy Couture, as an example). Users would come to the site expecting to see an offer from Best Buy and would see a great offer from a brand they had no interest in and a not so great offer from Best Buy. This led to a low-quality experience, lower spend, and user churn. Overall growth in spend began to slow down.
In response, we quickly setup processes to begin working more closely together. We had to fix the disconnect. We had to collaborate.
We built a monthly merchandising calendar that every team member could access in real-time. We set up several 10-minute check-ins so that the acquisition team knew exactly what the site merchandising team was promoting each day and which offers were converting at the highest rates. The acquisition team would send all marketing emails to the merchandising team prior to sending to users to get their sign off. We used data from the acquisition team to convince the mass appeal brands to offer deeper discounts.
At first, these efforts forced collaboration. But over time the collaboration became much more organic. The teams became inclined to be collaborative. After a few weeks, the numbers started to head back up. That said, we definitely didn’t abandon the silo’ed metrics for each team. Hitting those metrics was still the primary job of each team. What changed was the approach we took to hitting each of our metrics. It was about transparency and collaboration and a broader focus on what was best for the company as a whole.
The point here is simple: not having silo’ed metrics is a bad thing and being too silo'ed is a bad thing.
As an example, sales teams need to have silo’ed sales metrics that they’re accountable for to force ownership and creativity and high performance. But if the sales team is only focused on one top line metric and nothing else, over time they’ll be motivated to close deals that may be bad for the company and will lead to high churn rates. They have to have a silo’ed metric but also be forced to consider what’s best for the company as a whole.
Companies get in trouble when they lean too far towards one side. Telling groups to just work together to drive an overall number leads to a lack of accountability and creativity. And too much separation leads to a lack of collaboration and focus on the broader goal.
Well run companies find a balance and learn to silo and un-silo.
Tim Ferris had a great podcast with Daniel Pink a couple weeks ago. I'm a big Daniel Pink fan. I highly recommend reading his book To Sell Is Human.
In the podcast, Daniel talks about the fact that one of the main reasons he writes is not to teach people something but rather for him to learn something. And often, when he sits down to write about an idea part of the way into it he realizes that the idea stinks. Or that the theory he set out to write about is just wrong.
This really resonated with me. The reason I've kept writing on this blog for more than ten years isn't to tell people things I know that they don't (though if that happens that's great). The primary reason is that I learn through writing more than other medium. If I have an idea or a theory I find it enormously valuable to get it down on paper. I'm no different than Daniel in that I have literally dozens of draft blog posts in my Squarespace account that I haven't published because halfway through writing them I realized the idea wasn't good or was wrong or wasn't fully baked.
I highly recommend that people write down their ideas on a blog or an Evernote or a personal journal. Writing forces you to focus and think clearly and consider alternatives and ensure that an idea isn't just a whim but a well thought out, actionable concept that matters. The clarity that comes from writing is invaluable.
For me, that clarity has been the best thing about writing on this blog.
Recently someone asked me how I get comfortable that I'm hiring great people. Obviously there’s a ton of work that goes into making a hire so I won’t go into all of the detail. But just before I’m ready to pull the trigger there are four checkpoints I use to make sure I’m making the right call.
There are obviously lots of other things I could add to this list but I’ve found that I'm generally making a great hire when these four things are in place.
Here are four apps that I've been using recently that have increased my productivity.
Accompany. This app will scour your calendars and see who you're meeting with in the coming days and weeks and will build out a profile for each person that includes news mentions, bios listed on the web and updates from their presence on Twitter, AngelList, Crunchbase, LinkedIn and other social networks. It pulls everything into a one-page profile. Just prior to your meeting it will send you an email with all of these details. Last week I was at the HIMSS conference in Las Vegas and found it invaluable. As I walking between meetings I could read through the manifest for my next meeting and get a refresh on who I was about to talk to. Following the meeting it adds the people you've met to your network and it will continue to push out updates. You can set preferences so you only get updates on people you want to hear about.
MobileDay. I’ve been using this one for a while but just started using it more often. MobileDay scours your calendars for upcoming conference calls and pulls the conference call dial-in details into the app and pushes you a notification just prior to the meeting so that you can dial into the call with just one click. You just literally just click on the notification and it will dial you in. This is so much better than switching between my calendar app and phone app trying to remember a ten digit number to get dialed in.
Brain.fm is an app that has ambient sounds on a timer that helps with intense focus. I often listen to music when I'm writing but I've found that if I really need to focus on something for a sustained period of time the sounds on Brain.fm work a lot better than Spotify. Note that the app requires you to be online so when I’m on a plane or somewhere without access to the internet I'll use the Noisli app. Not as good but gets the job done.
Astro is an AI-powered email application. It's pretty amazing and I'm not sure I'm getting everything out of it that I could. The more you use it the smarter it gets. It does a great job of building a priority inbox based on the emails you open and the people you email often. And it has a bot that pushes questions to you about your contacts and makes recommendations and reminders to follow up on important emails. It also can track email opens and has a send later feature. I understand that there's a lot more coming as Astro is building a big AI company around the app. The sooner you download this one the better.
One of the best salespeople I've ever worked with wasn't all that great at giving presentations. He wasn't great at building relationships. He didn't know the product as well as others on the team.
So what made him so good?
He would ask the prospect questions. Lots of questions. I mean almost obsessively. When it got awkward with the prospect because he was asking so many questions he'd ask five more questions.
This helped him sell for several reasons:
Too often salespeople want to hear good news so when they hear it they don't dig in and ask lots of questions. I learned from my former colleague that it's much better to assume the worst and dig in with good questions to understand and confirm everything.
Here are some of the questions that can be asked as a salesperson navigates the sales process. As I said, these may seem somewhat obsessive, but because buying things at a large organization can be so tedious and difficult I've found that most buyers appreciate the thoroughness.
I could easily list twenty-five more. Of course, it's worth noting that there is some art to how you ask the questions and the questions should be documented and placed at different stages of your sales process so it makes sense why they're being asked at the time.
I've found that in complex sales a salesperson almost can't ask enough questions. Those salespeople that have the discipline to use good questions to understand the prospect and uncover potential pitfalls significantly outperform their peers.
There was a lot of buzz going around this past week around Apple’s announcement that they're adding a personal health record to the iPhone.
Of course, this has been tried before; Google, Microsoft, and many, many others have tried and failed. This time Apple has a better shot in that they 1.) have a device in people's hand and 2.) they've partnered with several large hospitals & health systems and electronic health record (EHR) vendors to pull data down to the device.
Bijan Salehizadeh asked the right question on Twitter: did past efforts at consumer-driven personal health records not work because of poor user experience or did they not work because people just don’t care enough about their health records?
I’m in the camp of people not caring enough. Put aside the importance of what Apple is trying to accomplish and the incredible impact it could have if it were successful and get back to the basics of consumer behavior and what makes an iPhone app work.
In order for someone to choose to spend time on an app (when there are millions of them in the app store) the user needs to get something in return. And they need to get that return quickly. When I search for a restaurant on Foursquare I get a return (recommendations). When I use OpenTable I get a return (a dinner reservation). When I use WhatsApp I get a return (a conversation with a friend). When I use Spotify I get a return (music).
But what does the consumer get when they upload a bunch of health data into the Apple health record? Nothing. At least not immediately. At least not until they’re sick. Which they hope they never are. There's no clear return. This is the challenge with patient-driven health records.
This is part of the brilliance of Zocdoc (disclaimer: I worked there for almost 4 years). They are able to compile important health information from the consumer. Lots and lots of it. Every single day. They’re able to do it because the user gets something in return immediately for engaging and sharing their health information (a doctor’s appointment).
In my view, the companies that have failed on personal health records have failed because they didn't fully appreciate the way consumers engage with their own healthcare and they ignored the core tenets of consumer behavior. People are busy and have been trained to ignore everything unless it makes them feel good or gives them some near instant utility. Unless Apple's personal health record app can find a way to deliver utility back to the user (quickly) I fear that it may share the same fate as those that have tried and failed.