The Post Money Value

A Very Clear Lesson for Your Start-Up

People love convenience, right? You can always count on people who will pay for the benefit of stepping up, past, and through others, eh?

Not necessarily.

Verified Identity Pass Inc., the company behind the CLEAR card has shut down.  This was the trusted traveler card that essentially was a line cut card for airport security.  The company couldn't reach a deal with one of her creditors and, buh bye.

The basic premise of the company was that business people would pay for this bad boy to cut down on the time in line.  Combine this with a NEXUS Card and you were rocking when it came to going over borders and through security at special airports.  It all made sense and I, along with a couple hundred thousand of my friends ponied up the cash.

Unfortunately, the basic bet ran smack into the realities.

1. Signing up was a bit of a hassle. Fingerprints, eye scans, etc.
2. It wasn't available at every airport so you had a a narrow field of paying customers that were road warriors between to clear cities.
3. The road less traveled, aka, the economic hairball didn't help a bit.

Personally, I admire the people who tried it, the money folks who backed it, and the customers to signed up and (for the most part) loved it.

Lesson to you: People, habits, and friction to get that transaction completed.  Pesky but deadly details.

RIP: CLEAR

Geeks Linked to Business = Success

Here are two examples from my past that I will connect in a minute, stay with me.  A very long time ago, I had an opportunity to work for Sabre (the airline reservations system).  During the interview process, I had a chance to speak with 5 different systems developers.  I asked each one: “What do you do?” In each case, these folks were able to link exactly what they do to a business result.  For example, one guy told me that he was responsible for the queuing algorithms for the reservations line.  He knew that by shaving off .0001% of a second in the route to free sequence, he could improve throughput which directly translated in X dollars of revenue on an annual basis.

It was amazing.  Contrast that to some big lumbering insurance company I worked for in the late 80’s.  The what do you do question would be answered with “I code” or “I’m an analyst” or “I’m a tape (!) librarian.”  Any answer except the specifics of what they do as it relates to the business.

Fast forward to today.  The problem/difference exists today.  As part of due diligence on companies, I ask everybody in the company “What do you do” and am always surprised how the company’s success trajectory can usually be linked to to the granularity of  the answer(s).  

I Love Rewards, a JLA portfolio company, is a particularly good example of this thinking in action.  The technical team at ILR gets this in spades.  There is the “simple” process of looking up your points, picking a reward, etc, which makes up a fairly good chunk of the ILR offering.  When you ask one of the coders “what do you do”, you get back answers around the speed of the dB look ups. They will tell you they’ve tweaked/improved some queries by X% so that the user gets a result faster which in turn gives them a great experience which is then passed on to fellow employees.  They translate that directly into sign ups which translates into new customers, seats, points, etc, all of which means good things to the company.

Joe Taiabjee, my technical uber-brain at b5 Media, knows to the sub atomic particle level how fast pages load, where, what, and why because he can track ad serving, page abandonment rates, etc, and tie it directly to revenue.  He is not “just the tech guy” by a long shot.

Our main tech man Frank, over at Xobni, along with Adam (one of the co-founders) obsess over every pixel paint, refresh, etc.  When I interviewed Adam and we go past the co-founder state, he dived into the WDYD answer with an almost line by line source code linkage to how it impacted the product and where the paid things would be impacted.  It was impressive.

And so it goes.  If you are a CEO/Founder, ask yourself if you’ve got your entire team thinking like this. Can a random stranger come in and ask that WDYD question with results that are technical but business focused. 

If your tech team is a “those people” or they think of “them” as the “others” in the company, you’ve got a problem. 

I’m beginning to think this is a seriously important key to success.

The Stop Watch Test

Over the past few weeks, I’ve been heads down working on a bunch of things for a few portfolio companies as well as having a ton of 30 minute no harm, no foul meetings.  One of the interesting things about those meetings is the vast majority of them are pretty much centered around either “Let me tell you about my idea/business” or a discussion about the VC/Angel world.

On the idea/business front, I’ve been giving people the 60 second stop watch test.  I simply say, okay, step one, let’s see if you can, in 60 seconds, tell me what you do and why.  Currently, I’m running about a 35% success rate which is, in a weird way, a good thing because we can then spend 39 minutes working on a bit of fine tuning. Makes for a true no harm, no foul session.

Try it. Get a clock/watch with a second hand and see if you can do this. 60 seconds is a long time, much longer than you realize.  Check out the various radio and tv ‘quick updates’ and watch how much can be packed into 60 seconds.

Get this down to a science, it is a great step one.  With a tight opening, lots of practice, you’d be amazed how many people will appreciate the clarity, direct information, and engage you in a productive conversation.

60 seconds.

 

P.S. I’ve typically told people, what’s the problem, how do you solve it, where’s the money, as being the three things that are core to any ‘pitch’ or idea looking for funding.  What you are doing and why in sixty seconds is the same things.

Big Upgrade At Microsoft

Microsoft is formally giving up on American talent for executives.

I know this to be true because Uber-Canadian Mark Relph is leaving Microsoft Canada and heading over to Redmond to be in charge of the Windows Ecosystem Team.  You can read about his promotion here but before you head off let me just tell you that the quality of management in MSFT HQ just went up by a factor of 100.  Mike Nash, Mark’s new boss (and also one of the smart/good guys in Redmond), just guaranteed his own promotion to super senior vice chancellor or whatever the next level is for Dr. Nash.

Congrats to my buddy Mark. I’ll miss you. Can I have your laptop? It has a Canadian plug and they’ll give you a new one in Redmond.

P.S. I think I saw David Crow wheeling your chair out the back door.

OVCF Sends Out the Love to ILR

Razor and the gang at I Love Rewards continue to blow the doors off on all fronts and metrics.  The fine folks at the Ontario Venture Capital Fund (OVCF) jumped onto the ILR bandwagon with its first direct co-investment of $1.8 million dollars.  This brings the total capital raised to $8.7 million. 

ILR is an amazing rewards and recognition company.  Check em out of you are looking to motivate your team.

Congrats Team!

Ruh Oh- Do MacBook's Really Die?

So after landing here in Sydney, changing planes for Melbourne, my MacBook Pro doesn't love me anymore. Press power button, get grey screen and nothing else. No howdy tone; not even a lighted caps lock key. This feels really bad. Now, as I type this on my RIM, I have a flashing folder with a big question mark in it. I can only assume the OS is toast.

Anybody know of a Melbourne computer shop open on Sundays? Naah, I didn't think so. Bummer.

Smart phones (Blackberries) rule.

Sigh.......

iStopOver Launched

Brightspark Studios, located here in Toronto, launched iStopOver this week.

The value proposition is simple. Company A has unused office space and you are coming to town. Rather than sit on your bed for a meeting with a client (yeah, I know, just get out of the gutter), you zip into the iStopOver database, do a search and, presto, you have some options besides Starbucks.

Obviously, being new means limited listings but that will grow over time. Check it out and list some of that unused office space you have.

Congrats to my investing partners at Brightspark.

Ignore Everybody (Including me)

My good friend, Hugh MacLeod was not ignoring me by being kind enough to let me get an advance copy of his new book called Ignore Everybody: and 39 Other Keys to Creativity.  You can pre-order it both in paperback and for the Kindle. 

It is a short, fast read, which is great.  What’s even better is the fact you will return to this book over and over again, picking it up and reading a chapter or two just to get yourself back into it when some jerk generally screws with your day.  Hugh’s advice and commentary should be required reading for everybody doing a start-up, coming up with a earth changing idea or dreaming of the day they punch out of that Dilbert-like cubicle.

Along with 80 of his cartoons, Hugh gives you some seriously unvarnished straight up advice in 40 bite-sized chapters:

• Good ideas have lonely childhoods.
• Selling out is harder than it looks.
• Don’t try to stand out from the crowd; avoid crowds altogether.
• Beware of turning hobbies into jobs.

Of course:

• Ignore everybody.

“The more original your idea is, the less good advice other people will be able to give you….You don’t know if you idea is any good the moment it’s created.  Neither does anyone else.  The most you can hope for is a strong gut felling that is it.”

And my personal favorite:

• The idea doesn’t have to be big. It just has to be yours.

“The sovereignty you have over your idea will inspire far more people than the actual content ever will.”

This book probably should be a must read for everybody who wanders into a VC office but, for sure, you should get it. 

Well done, Hugh!

Loyalty Should be a Friction Free Activity

My friend Tom Corr co-owns the Soup Nutsy here in Toronto. More spots opening around town, great soups, good prices, and a very simply loyalty program: Get a card, get stamps, get a free soup after you get a bunch of stamps. Simple.

My office partners and I will head over for soup during the week. We collect the stamps on one card and get a free soup between the three of us. Eventually, it all works out, etc.  Good soup and we typically bypass other soup places for the quality. And the free soup.

Compare this to a place called Cora’s, a really nice breakfast/lunch restaurant which stores all over Canada. The women who started the company has a great story you might be interested in reading here.  But, I digress. 

I’m in the Cora’s Newmarket, Ontario location and I witness an amazing event at the cash register.  There’s a customer with a couple of friends up front.  They are done with lunch and this women is paying. She has the Cora’s loyalty stamp card ready to get three stamps. Nope. Cora’s has rules. One stamp per meal, per customer, per visit.  This women is not happy. She says, rightfully so, WTF! You’ve modeled this to give away a free meal after so many purchases, who cares if it is 3 on one card or 1 on each of three cards, etc.  She is clearly angry, her friends are rolling their eyes, and the other people in line are watching all of this.

Of course, Cora’s has a sign saying all of this no no no stuff right there by the register so the person taking the money points to it and shrugs.  Yep, points and shrugs as the response.

Here’s the really important part for you: The women and her friends left the place a) without speaking to a manager, b) pissed and c) tossing the loyalty card in the garbage outside the place.  All of this in front of other customers.  All of this over a free sandwich.

I point out the manager thing because this has or will happen to you, kind start-up person.  Something isn’t going to go right for a customer. The reality is most people get angry quietly and you won’t get a chance to fix it.

Lesson/Challenge: What are you doing to empower your people to try and prevent angry people from leaving your web site, store, etc. Is complaining friction free? Do they “point and shrug” or feel empowered?

Cora’s dumb policy forgets the breakage rules, didn’t factor in the math, and has enough friction in it to devalue the program. 

Lesson/Challenge: What’s are you doing, in the age of one click they’re gone, to make loyalty as friction free as possible.

Cora’s: Good Food with dumb policies.

An Important Tip for Pitching VCs

Many VCs are super accessible.  They will listen to something at least once. Most of us will take a read at an coherent email.  Heck, even if English is your second language, most of us will give you some time.

Here’s a tip:  If you go to all the trouble of finding me (or one of us) on LinkedIn, etc, write a good intro and point to a presentation; that presentation should be in English or whatever the native tongue your target speaks.  So far this has happened 3 times in the last 60 days so I guess it warrants a blog post.

I’m not suggesting English is the only language of the world, it’s not. It just happens to be the one I understand the best.  Your mileage may vary.