Sharpshoot

The early days of hacking growth as a formal discipline came from the work being done to optimize the virality of consumer apps. This is evident in the work of Andrew Chen, Sean Ellis, Brian Balfour and others between 2007 and 2012. 

As online channels proliferate, sales cycles come down and software is instantly delivered and paid for the boundaries between systematic growth strategies and enterprise sales are being blurred leading to the development of a new discipline. Led by the CRO, as one who weaves marketing activities, sales and retention activities as one cohesive strategy to drive fast and sustainable growth against product market fit. 

In the last year as CRO at Plato Design I discovered and formulated a strategy for systematic growth, leading to going from 0 to $1.6m in revenue in just 7 months. 

I believe there are a set of systematic steps for identifying where to grow by starting with the unoptimized inbound demand, and refining the resonance of messaging against key verticals (good revenue) while discarding verticals or segments that are more costly to serve (bad revenue). This refined messaging then filters through into compressing the sales cycle into being as short as possible (how self serve can it be, how much qualification can happen up front, what’s the threshold of payment that’s valuable but bypasses committees etc). All this up front work should be demonstrable by the CRO as an individual contributor, eventually leading to a bottleneck in the number of inbound leads processed by the time available in a single day. Then its time to bring in a team to scale up. 

With a magnet of messaging resonating against the emotional pain of each target vertical, and a refined sales process, that is when the top of funnel tactics can be amplified to drive more appointments per rep per day, with >90% conversion rate. At that point the CRO role becomes about process optimization, and increasing the number of collisions between qualified clients, and ready to close reps. If the process is working you will achieve the nirvana of the one call close. The ask is already resonant, and no one who gets to a zoom call will not buy because you’ve filtered out everyone who doesn’t have pain, budget or timing. 

The subtle dance of incentivisation between product and sales then becomes an issue. If the product isn’t fully ready, creaks will show up in retention, not in sales. At that point it makes sense to slow growth and drive growth in a step function, not an exponential curve for a little while. The more self serve and the more intuitive the product the easier this transition will be. The less well documented a product the more that needs to be explained by humans. Once the product is through the door, confusion is the only thing that stops it from being adopted and obsessively retained. The more up front work that is done before the sales lift to optimize this, the easier this is later, but inevitably sales and product have to empathize which each-other’s jobs and play nicely, as the refinement of messaging and segmentation may throw up changes which are unanticipated or new use cases that are profitable and easily retained.  

Upon locking in process, messaging, product and retention, its time to aggressively grow. Aggression isn’t subtle. You want reps who are addicted to the speed of closing, who love making a lot of money. Reward plans should have a small number of reps who make huge amounts of cash. Keep it elite. The best place to be is when you can sell a high margin product that every customer will have great experience on. That is when you want to drive 20% month over month consistently -- focusing on getting from 1 to 10m, and 10m to 25m, and 25m-50m in revenue. Each phase will have a speed bump, but the goal is to saturate your resonant verticals, before developing new segments. Distraction will be easy, you will have to tell your reps to catalog any deviations from your messaging into a separate optimization process. 

Upon each checkpoint, the ability to use reps as signal generators for what the expansion plan for the next resonant verticals will define your total addressable market. Picking one strategy to hit $10m in revenue is the best thing when you have very few people. Later on you can imagine as a portfolio of strategies. Divide up $100m into 3-4 different opportunities, and start achieving more sales predictability.

Just like consumer growth hacking, developing the fastest path to $100m in revenue involves optimizing the collision between resonant customers, hungry reps, and highly engaged products. 

Pay Attention to What Surprises You

A principle i’ve been employing in the last few years is to pay attention to what is surprising or confusing.

Our mental map of concepts need to be constantly refreshed and for most people building stability in these concepts is what is comforting. However, if you want to profit from how the world is changing – it is important to focus on what surprises you, and pay even closer attention to it.

A diet of information surprise requires several habits:

1) Seeking surprise – by exploring edges constantly. Every time you find a frontier, go into it and see even more.

2) Being shocked/surprised/confused often and then seeking to understand even more about what it is you are looking at. Don’t reject it or judge it.

3) The widest variety of information inputs possible. Travel widely, learn languages, watch TV from other countries, look at art and science. Explore without boundaries.

Don’t have the same information inputs as others. Keep a wide variety of friends across ages and cultures. Listen to everyone, especially if they introduce you to new things. Ignore the popular, instead focusing on the ultra novel. What is novel now, is the future mainstream as things propagate. Continue to extend your boundaries – if logic is your thing, look at things you find illogical. If reality is your thing, explore surreality. If Science is your thing understand Art. If News is your thing, understand history.

This works well if your focus is on innovating, or investing in innovation. Sometimes what you do will surprise others. Retain your conviction. You get one life, so seek to redefine your boundaries every few months.

Good luck.

Credit: Swedish Photographer Eric Johanssen [1] 

Inventing the Impossible

The truth is no one likes to attempt something that is impossible. Then it wouldn’t be attemptable or in fact achievable. In fact If I have some conviction around it there must be an approach I believe that makes the impossible possible.I have been told I like to attempt impossible things. This has been a recurring comment throughout my life. Rather than taking this comment at face value, I think the reaction is “that seems impossible to me”, and is a projection of how difficult it seems to the commentator. 

My thought process is simple. I don’t like doing things others have done. So my mindset gravitates towards finding problems that if they were solved would seem like they were impossible to attempt. The result has to be worth it, for the world, for the species to be warranted to be attempted. This is what I live for. 

Step one in solving an impossible problem is simply asking the question of how one makes it possible? Then one starts to look at whats possible today, and the intersection with the impossible conditions. 

Atomic Assumptions

In the realms of possibility are a set of assumptions. By dissecting these assumptions from first principles one can start to see their atomic makeup. These atomic possibilities are things that can be combined again to create something new. 

By reducing these atomic assumptions, one uncovers a whole new set of assumptions of what is missing. Then the round of first principles problem solving begins again - you find proxies for those assumptions. Maybe you bring in approaches from other fields, maybe you look at the same problem from a different angle. Either way there is a concentric investigation of adjacent assumptions and atomic discovery of a set of solutions. 

The Objective Truth

These atomic assumptions then enable one to find a semblance of truth, that may only look like 1% of the impossible condition. Sometimes a root assumption that stopped others from looking into the problem has been overturned by some other breakthrough. People stopped looking. But that is where breakthroughs come from. When you have your 1%, you can reevaluate the set of problems you have to solve again. 

Great solutions come from atomic incremental steps. It is what allowed Edison to discover the light bulb, the Wright Brothers took to developing the first plane. There is a proxy of truth to every problem. Otherwise it is genuinely impossible. The key is discerning the line between the genuinely impossible to the impossibly feasible. 

With incremental design-centric approaches, and long term aspiration one can solve “impossible” problems with focus that spans years. I see the work and progress friends have made in building companies like Mobius Motors, Academia.edu, LightSail Energy, and even entrepreneurs I’ve seen from a distance do this like Hampton Creek, and uBeam. 

Meredith Perry’s TEDx talk still inspires me as a tale for attempting something rooted in assumptions of old, ignored and undervalued. 

Most people don’t have the patience to support impossible endeavors, nor the discipline to break down a problem to find the possible in impossible. This barrier is what makes impossible problems worth solving. 

The journey, and the foresight is rewarded by a lack of competition and an inevitable jealousy by your peers when you solve it. 

The pursuit of the impossible, is a creative force for discovering the improbably possible. 

[1] Eric’s TED talk is here

Knowledge usually skips generations. This is how I define generational loss. Every ten years the same ideas are rediscovered. The progress of human civilization has always depended upon building upon each others ideas. This is the basis of successful movements or ecosystems like the Renaissance or Silicon Valley. Without a concentration of people exchanging ideas, new ideas don’t get created. Until they degrade. This is why stopping generational loss is an important societal problem. If the vast majority of people suffer generational loss then it means that there might be some advantage in counteracting generational loss. For example, if we took old ideas that were highly formed and returned to them in light of current generational ideas we can create truly novel ideas as well as benchmark this phenomenon. For example the definition of Artificial Intelligence in the 70s was very different to the current definition this century. We’ve had generational loss in that artificial intelligence was designed for aiding humans rather than replacing them. Which suggests that media exposure has significantly colored the original academic definition.

Knowledge usually skips generations. This is how I define generational loss. Every ten years the same ideas are rediscovered. The progress of human civilization has always depended upon building upon each others ideas. This is the basis of successful movements or ecosystems like the Renaissance or Silicon Valley. Without a concentration of people exchanging ideas, new ideas don’t get created. Until they degrade. This is why stopping generational loss is an important societal problem. If the vast majority of people suffer generational loss then it means that there might be some advantage in counteracting generational loss. For example, if we took old ideas that were highly formed and returned to them in light of current generational ideas we can create truly novel ideas as well as benchmark this phenomenon. For example the definition of Artificial Intelligence in the 70s was very different to the current definition this century. We’ve had generational loss in that artificial intelligence was designed for aiding humans rather than replacing them. Which suggests that media exposure has significantly colored the original academic definition.

The phenomenon of Psychout happens when one psyches themselves out of doing something before they have actually started.

An antidote for psychout is understanding a root assumption. Typically there is something assumptive about immediately psyching oneself out. 

These assumptions may involve fear. Its too hard, its been done before, I don’t if i can do it. Or the assumptions override permission. I’m not allowed to do it. I haven’t seen anyone else do it. 

Psychout creates opportunity. If its rational to psych yourself out to do something occasionally, the root assumption about fear or permission may actually reveal an opportunity that is highly feasible to action on, but others have hidden. 

It maybe that the root assumption is outdated. In which case revisiting a Psychout may actually create a protective sphere to create an advantage. Others maynot compete because they psyched themselves out. 

I see many instances of opportunity in psychout, which shows how dangerous human negative psychology can be. 

Next time you have a Psychout blocker, lean back for a second and ask, how could that be feasible? Is the root assumption the same, or not?

I think a lot about standards. Particularly the standards we apply to selecting ideas to work on, the magnitude of these ideas and possibility for success. Often the ideas people pick determines whether they succeed or not. This is because drive can be more uniformly distributed than taste within a population of individuals. 

Being driven and able to make things real can apply to things that aren't valuable, as well as those that are. It takes the same effort to work on something bad, as it does something extraordinary. Yet that choice isn't one for consideration at the beginning by many entrepreneurs.

I don't believe in equality when it comes to startups and human effort. To make big impact is an elite pursuit. It requires very large ambition. A desire to make historical change. Not everyone is driven to do this. It also takes extraordinary effort. 

However there is a binary switch when one pairs the right idea with the right effort. The one which is guaranteed to succeed because its future is inevitable and absolute. 

Biology fascinates me because our tools for the comprehension of what is going inside of us are imperfect, yet the reality of biology goes far beyond what we can comprehend. Over time, our comprehension of its reality will converge with the truth, but we may not know when. 

For this reason it is important to develop tools to view our biology in more detail than we can today, as well as leverage existing tools - mathematics, statistics, computer science, novel materials etc to build interfaces to human cognition that can detect, assemble and display the objective truth to our brains. 

For example our understanding of disease is limited by the imperfect understanding of disease as a reductionist construct. Aging is multifactorial, but are there two types of aging or six? We don't know. Similarly, the limitations of the speed and cost of genome sequencing mean we can't index all of the world's species, as well as all of the species on other planets. If we could -- then autonomous robots, robust gene spiders, and manifold computational power could help us understand the perfect reality of biology that exists out there.

The delta between a perfect reality and imperfect understanding is incredibly influenced by the resolution of the tools we have built. Right now we believe that gene expression can be described by a set of primitives - genes, boundaries, on/off switches, selective expression, amino acids, environmental stimulus etc But every year the number of primitives we have to integrate into our model increases -- RNAi is more complicated than we imagined, epigenetic control is more nuanced, that there are regions of the genome that control what gets expressed ("duons') in addition to what is being expressed [1] and i'm sure more we will discover over the years.

In Computer Science, and Engineering, our model of technology becomes more sophisticated over time -- the edge is firmly where we want to take it, it is in our control. As a result the field is influenced by use cases, and can be logically built up from logical primitives.

In biology, the objective truth is in nature. The fact that we can only comprehend a fraction of the truth is like staring at the sky with muddied glasses. Are the things we understand about disease or the world's species real or do we lack the tools to dig deeper? What if our model is completely wrong -- are we wasting human effort in treating disease right now? 

Why are we not directing more efforts to build the tools to explore the vista of biology so we can disassemble it (hat tip to Synthetic Biology, Genome engineering & Stem cells) or the tools to measure and benchmark it (nanopore sequencing, physics coupled detection methods, high resolution data analysis) [2]

I believe we are entering the era of biology which will profoundly impact the human species. It is paramount  that we direct our efforts to reducing the distance between our imperfect understanding and perfect reality by building the tools we need. 

[1] http://www.washington.edu/news/2013/12/12/scientists-discover-double-meaning-in-genetic-code/

Visualizing the formation of the network of 900M Android devices. Really like the way it animates rate of formation

Image is Titian's The Tribute Money (1518), National Gallery, London - Jesus asks the Pharisees if it is right to pay taxes to the romans. The evidence is the coin itself. Symbolic of the interchange fees under disruption in the card issuer ecosystem

Here is an excerpt of an interview I did with paybefore magazine about the future of payments

More than $8.5 billion in investment funds have flowed into financial services innovation since 2010, said Sumon Sadhu, Director of Intelligence at Quid, a San Francisco-based text analytics firm that studies mobile payments industry developments. Innovations in payment processing accounted for the largest share of investment so far, at $812 million, followed by $626 million invested in e-commerce and mobile commerce, $583 million invested in online financial services, and $250 million invested in mobile payments, according to Quid. According to the rate of investment growth from 2010 to 2011, investments surrounding payments processing, lending, virtual currencies and online gaming are sone of the fastest-growing categories attracting venture capital, Sadhu said. The average venture capital investment for mobile payments companies is $2.7 million, he noted, and that figure is on track to rise this year.

--Why exactly is venture funding flowing into mobile payment ventures? How many of these ventures are likely to become IPOs? Or is it that backers hoping to make money when larger companies buy smaller ones as the industry matures?

SS: "The global payments market is huge. According to data from BCG It is estimated to be worth $782 trillion in non cash transactions and $492 billion in cash transactions by 2020. Therefore there is ample room to support new independent companies that have stable value on the public markets. In addition to being a large market opportunity, there are fundamental shifts in technology that are enabling new forms of payments. The rise of mobile devices, the digitization of transactions and cheaper storage and processing applied to deriving value from that data will drive new conceptions of how money flows within society. The combination of the size of the market opportunity coupled with changing times is what is igniting venture investment. Just like the first coins, printed notes or credit cards, innovation that is happening now will be looked back on in the history of our species as a significant landmark in the evolution of money. 

Companies that are able to be strong enough to IPO will be taking approaches to the payments problem that are ignored or orthogonal to what large public companies are doing. So for example peer-to-peer lending companies like Lending Club, or loans companies like Wonga where users are qualified for loans with algorithms instead of humans. These companies are pioneering approaches that seem contrary to established logic, by lending directly between people or removing human decision making entirely from the process. These approaches will form the basis of future financial services companies, so by the time big companies realize that these approaches these companies can reach scale and have the revenue run rate to go public. 

Companies that will be bought by larger players will be those that have good user experience but no scale. Fortunately there are some strong incumbents that exist in payments like PayPal, or the card issuers like Visa, Mastercard and American Express. A company like Card.io, which was acquired by PayPal for its ability to read the credit card on the phone using its camera, was acquired for their ability to augment what these large players already do.  

Outside of these categories most of these companies will fail, as returns follow a power law distribution."

--Do the potential opportunities for investors in mobile payments match the reality? Or is there a lot of "irrational exuberance" in the notion of payments going mobile?

SS "The future of innovation in payments will make user's lives significantly easier, with benefits like rewards for loyalty, but without providing any friction or change in behavior. We have the enabling technology to do that. It will be easier than using cash. Good venture investments must achieve a meaningful change in user experience and achieve scale with respect to the number of people they reach in order to succeed. Not every company will achieve scale or win on user experience. So the irrational exuberance will be demonstrated in chasing all the companies pursuing the payments opportunity, or focusing on features like NFC instead of the end user experience.

Very good companies will be able to realize the aspiration of making users lives better at scale. Since the future is grounded in changes in underlying technology the opportunity is very real. These companies will make a lot of money for investors. However, not every investment can be a good company."

--What effect is Silicon Valley's interest in mobile payments having on the industry?