The news about Julian Assange being arrested two days ago reminded me of a blog post I wrote eleven years ago. I went back to read it today as I couldn’t remember what I said about Wikileaks that long ago. Prior to blogging at Lucky7, I used to blog quite a bit at Bazaarvoice. I felt a real sense of us creating history there, as I do today at data.world, with a power of Archimedes lever of working alongside some of the largest brands in the world. It is important to recall when you read this that at the beginning of Bazaarvoice in 2005 only three retailers in the United States offered customer reviews on their products, Facebook was closed to the public, the iPhone hadn’t come out yet (that was 2007) or Android (that was the next year), and there was no such thing as Snapchat, Twitter, and many of the other mediums, including Medium, that have moved more and more of social interactions - and in some cases transparency (certainly in the case of customer reviews) - online. I’m archiving the post here and will discuss it below, for now here it is as I wrote it on March 2, 2008 (note that I couldn’t recreate all of the links referenced as some have gone offline):
I had dinner with my good friend and Bazaarvoice co-founder, Brant Barton, on Tuesday at the new Sway in West Lake Hills (yummy) and we talked about lessons learned in angel investing. It was on my mind as I’m doing an AMA (Ask Me Anything) webinar with my good friend and often investing colleague, Josh Baer, on Tuesday, Feb. 5 from 4-5pm CT (you can sign up here). During my conversation with Brant, I distilled down to seven lessons learned (in the spirit of Lucky7, of course). Brant is reading Jason Calacanis’s book on angel investing and told me that many of these are in there (maybe all of these, I haven’t read the book), so you may want to turn to that to really dig in as I’m going to do my best to keep this post short. My hope in sharing these with you is that it ignites more angel investing in Austin - it is vital to our startup ecosystem here. We are doing better on that front in Austin than ever before, but I believe we are only scratching the surface here. And I hope these lessons have an impact beyond Austin angels and startups as well.
Happy New Year's, everyone! I wish you much prosperity and love in 2018.
As you may have seen me tweet earlier this week, my New Year's Resolution is to write more. I truly love writing - to write is to serve, to write is to learn, to write is to meditate. I'm going to take a different tact this year, though - I'm going to write more frequently and hopefully much shorter. I like writing longer posts but I'm spending over 70 hours per week on data.world and then some time on our startup investments - and of course I very much care about spending time with my wife and children. So, in short there just isn't much room for more. As a matter of fact, in 2017 I resigned from two non-profit Boards (Conscious Capitalism and Entrepreneurs Foundation) that I really love just to create more time for data.world. Both were painful decisions for me but a startup really needs that type of focus, and I'm truly having a blast working alongside an incredible team at data.world on a very important mission.
I've already got a running list of seven more topics (and growing quickly) that I plan to write about as soon as I can but for now - for my first post in a long time - I want to talk about the importance of having an Always Be Learning mindset and practice.
It has been a long time since I wrote anything on my Lucky7 blog and there is good reason for that. Back in June, I started to brainstorm my next big idea with long-time friends Jon Loyens and Matt Laessig (both of whom were amazing at Bazaarvoice and had moved on to HomeAway). Bryon Jacob (a 10-year veteran at HomeAway) soon got involved as an idea he had been thinking about was better than anything we came up with and one thing led to another until we founded data.world.
It may feel curious to my regular readers that I would jump back into the arena as the CEO of a company built from scratch. After all, our investments in startups and venture capital funds have been performing well, including a recent exit with Deep Eddy Vodka being acquired (and us subsequently investing in Clayton Christopher’s VC fund, CAVU). There are many factors that led to this calling for me:
With this being the season of giving and saying thanks, I wanted to share some thoughts on the right way to do it. Unfortunately, it is common in business to rush through your to-do list and quite often that means not thinking hard enough about what gift to give, especially when it comes to giving chotskies at tradeshows. In business, there is much mediocrity.
Every year I look forward to the Shop.org Annual Summit. It brings together the smartest experts and entrepreneurs working in the digital retail space for discussions about the state of the industry and solutions to some of our biggest challenges. It’s an expansive showcase of innovation and insights.
There are a number of companies exhibiting this year that I’m excited to speak with, but I wanted to highlight three in particular that all of my retail friends should check out: Edgecase, Shelfbucks, and Together Mobile.
In the interest of disclosure, I’m an investor and/or advisor (Hurt Family Investmentsportfolio) in all three of these companies (and also a former three-term member of the Shop.org Board of Directors). But there is a reason I’ve been impressed by these companies and believe in them and their value - and think retailers and brands should as well. They are all transforming multi-channel shopping in important ways. They are focused not only on conversion (still a primary pain-point in digital shopping) but also revolutionizing the customer experience.
December 5th marked my first year of blogging personally (I had previously been a corporate blogger for 7 years at Bazaarvoice). I began blogging primarily as a service to entrepreneurs - a form of giving back to the community that I believe is the greatest force for change. I named my blog Lucky7 as a tribute to my amazing mother, who passed away last year. My first Lucky7 post on December 5, 2012 was a revisit of my manifesto to Bootstrap Austin on March 15, 2005. Looking back, it was clear I deeply cared about the development of our entrepreneurial community in Austin. That caring - and passion - drove a year of many highs in 2013. I've been actively investing in startups since December of last year with my wife, Debra, and I formally chose this as a career a few months ago, forming Hurt Family Investments. We've made 14 startup investments so far, 9 of them Software-as-a-Service (SaaS) companies. I've also joined the Advisory Board of 6 additional companies, all of them SaaS. Out of the 20 startups we are involved in, 16 are headquartered in Austin.
For all of us Austin fans, I'm talking about Cotter Cunningham, the founder and CEO of RetailMeNot. Last night, Cotter was one of our keynote speakers, along with Mark Cuban, at the University of Texas for Longhorn Startup Demo Day (the event was just fantastic, by the way, and Josh Baer, Ben Dyer, and Bob Metcalfe deserve a huge round of applause for it).
As of today, RetailMeNot is worth $1.33 billion as a public company (it went public in July and just filed for a follow-on offering). It is just four years old - for a value creation of $333 million per year. Who says Austin can't do B2C now? HomeAway is another one of our five tech IPOs in the last five years. It is worth $3.4 billion today as a public company (it went public in 2011). It is just nine years old. Yes, we haven't produced a Facebook or Twitter size outcome - there needs to be a higher volume of failures (entrepreneurial experiements) to do that, but don't forget we did produce a Dell, a National Instruments, and a Whole Foods.
Two days ago, Blockbuster announced that it will close all of its remaining approximately 300 U.S.-based stores (news link). This has been a long time in the making, and there is a lot you can learn from this. Prior to Netflix, Blockbuster thrived due to its use of "bad profits" (a term from Fred Reichheld's book, The Ultimate Question, which introduced the concept of the Net Promoter Score, NPS). Bad profits are a highly disruptive source of negative word of mouth. Blockbuster's bad profits were, of course, late fees. Everyone I know that was a Blockbuster customer - including myself and my wife - hated late fees. You knew Blockbuster "got you" and you felt that you "only had yourself to blame" because you were the one that was late on returning it. Sometimes you would plead with the in-store associate to have mercy on you. It became the primary source of Blockbuster's profits. Anytime bad profits are your primary source of profits, you are due for a hard-knock. That hard-knock came from Netflix. Their original ad campaign, "The end of late fees", was pretty much all they needed to say. Their business model was designed very differently - leveraging the Internet and network economic effects (a nod to another favorite book: Net Gainby John Hagel III). When Netflix said, "The end of late fees", word of mouth took care of the rest. This is why NPS has become so important to companies as a form of measurement for their most important external stakeholders - their customers. It is used by thousands of companies, including many Fortune 500 companies. Brad Smith, the CEO of Intuit, said, “Thank goodness for Net Promoter. It provided a framework for thinking about—and managing in this social media world… our teams call it the love metric”. Tony Hsieh, the CEO of Zappos, said, "We use NPS every day to make sure we are wowing customers and employees."
As I continue to help more startups in Austin, I want to go on a bit of a rant. In my opinion, there is simply too much derogatory language in business - and there is no place for it. Most leadership training comes from the roots of the military, where people can die if they don't follow orders. As I always told our incredible people at Bazaarvoice, especially during the very difficult Great Recession years, we are working under an air-conditioned roof, receiving free snacks, and seeing our families at night much of the time. If we take too many of our leadership cues from the military, we don't honor the unique culture of modern-day business.