Home Leadership Turn Archives Me RampUp Solutions Option Sanity

  • Categories

  • Archives
Archive for January, 2016

If the Shoe Fits: Lucas Duplan and Clinkle

Friday, January 29th, 2016

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

5726760809_bf0bf0f558_mYesterday we looked at the bootstrapped success of Tuft & Needle and before that at bootstrapping serial entrepreneur Andrew Wilkinson.

All very successful sans venture money.

Sure, thousands of bootstrapped companies fail, as do hundreds of funded companies; some go with a bang and others with barely a whimper.

But a few provide a cautionary tale for both founders and investors.

Lucas Duplan’s Clinkle is one such tale

Clinkle was supposed to be what Apple Pay is today.

In what is termed a “party round” 22 year-old Duplan raised $25 million dollars, mostly in convertible notes, from high profile investors, including Richard Branson, Peter Thiel and Marc Benioff, as well as VCs Accel Partners, Index Ventures and Andreessen Horowitz.

“In a typical party round, no single investor cares enough to think about the company multiple times a day,” wrote Y Combinator President Sam Altman in a June 2013 blog post. “Each investor assumes that at least 1 of the N other investors will be closely involved, but in fact no one is, and the companies sometimes wander off into a very unfocused wilderness.”

However, in the 5 years since founding, 3 since funding, the company has done nothing, gone nowhere and in an almost unheard of action investors are asking for their money back.

Clinkle had a polished demo that came before things like Apple Pay, said one former employee, who declined to be named. But most importantly that person added, Duplan “was charismatic when he wanted to be” and could “raise money in absurd abundance.”

“It was his one skill,” they said. (Emphasis mine.)

The takeaway is beware of great stories, charm and party rounds where the person at the helm has never sailed a boat.

Knowing the correct names of the equipment doesn’t mean a person knows how to use it in the real world or in what order.

Image credit: HikingArtist



Entrepreneurs: Tuft & Needle’s Bootstrapped Success

Thursday, January 28th, 2016


You hear it all the time, “build a product that solves your own problem.”

That’s exactly what JT Marino and Daehee Park, both software engineers, did when they quit their jobs to create mattress company Tuft & Needle, seeding it with $3000 from each each of them.

They didn’t take venture money because they wanted to build the company for the long term and borrowed the money they needed to grow.

“The reason why we turned them down all those times is because we figured it would change the way we operate as a company.”

Instead, Marino, 30, and Park, 27, took out a $500,000 loan, at a rate of 10%, from Bond Street, one of the new breed of alternative lenders, in order to keep control of the company and continue doing things their own way.

They built the business online — no showrooms and no salespeople.

No hassles returning a mattress you hate. And, perhaps most important, no gimmicks on prices, which range from $350 for a twin to $750 for a king.

They’ve considered other products, even developed a few, but with no investors to force them to expand, they are focusing on the mattress business.

Is it paying off? Absolutely, so no problem meeting their loan payments.

By its first year in business, Tuft & Needle had reached $1 million in revenues. And then it just kept growing, hitting $9 million in 2014, then $42 million in 2015. This year, Marino and Park expect revenues to reach between $125 million and $225 million, a three- to five-fold increase over last year. And, yes, it’s profitable.

However, recognizing that not everyone, especially older buyers, are comfortable buying a mattress online, they are opening their first retail store at 637 King Street in San Francisco (where else?) — first and possibly last.

“It could very well be our first and last store, or it could be the first of many,” Marino says.

That’s the priceless reward for bootstrapping.

Call your own shots, experiment as you choose and stay true to your values.

Image credit: Tuft & Needle

The Long Tail of Arnnon Geshuri

Wednesday, January 27th, 2016


Some bad actions seem to have a much longer tail than others and are more personal.

The length of the tail also seems related to how much the breach affects “people like me.”

The proof of this is happening right now and playing out in social media. It started with the addition of a Wikipedia board member.

Nearly 200 Wikipedia editors have taken the unprecedented step of calling for a member of the Wikimedia Foundation board of directors to be tossed out. (…)  “In the best interests of the Wikimedia Foundation, Arnnon Geshuri must be removed from his appointment as a trustee of the Wikimedia Foundation Board.”

Geshuri played a central role in the “no poach” scandal (where a number of top companies, like Apple and Google, agreed not to recruit from each other) that has had lasting effects on countless careers.

Although I’ve said many times that past performance does not predict the future and I firmly believe in second chances there are caveats.

One is that the the person agrees it was wrong, takes responsibility for their share of the action and accepts some kind of punishment — whether a monetary fine, jail time or just a public statement.

When it’s an ethical lapse, as in this case, I consider if the person should have known better — which Geshuri should have.

However, this wasn’t just an ethical lapse; both the scheme and his actions were illegal.

And there is no question that as a high ranking HR professional he did know it was both illegal and unethical and was in an excellent position to assess the long-term damage it would do.

Geshuri was actively involved along with facilitating others.

Therefore, I tend to agree with the editors that he doesn’t belong in an organization that runs of pure trust.

But I am just as sure he still has a great career path in most of corporate America, where they would understand (and in some cases even condone) what he did, as well as in politics, where both the criminal and civil breaches would just be business as usual.

Image credit: Myleen Hollero / Wikimedia Foundation

Ducks in a Row: Shocking Reaction

Tuesday, January 26th, 2016


Way back in the 1965 there was a major blackout that knocked out power throughout the Northeast. It may not have actually increased the birthrate nine months later (that’s an urban myth), but I know from friends who lived there that after the sun went down the choices of what to do were limited, so many fell back on age-old entertainment.

So what happens when technology goes down?

A foreshadowing came in early December when the Azure Cloud was incapacitated.

Under the heading “Services Experiencing Downstream Impact from Azure Active Directory” Azure’s status page additionally clarified:

Engineers are engaged on an underlying Azure Active Directory issue impacted several Azure properties that rely on the service. Services currently reporting impact include Web App, Operational Insights, Machine Learning, portal.azure.com and manage.windowsazure.com. Updates to this message will be provided as events warrant.

One Reg reader whose office has thoroughly adopted the cloud informed us of the savagery this outage is causing their colleagues to stoop to: “Some people seem to have got a connection, but most of us have now given up and some have even taken the drastic measure of actually talking to each other. It’s most unnatural!”

Can you imagine the shock and consternation when colleagues actually had to talk directly to each other?

And just in case our message is too subtle for you, the world is not improved when talking directly to another human being is considered unnatural by even one person.

Hat tip to KG for taking time to send this.

Image credit: gorfor               

Golden Oldies: Mine’s Bigger Than Yours

Monday, January 25th, 2016

It’s amazing to me, but looking back over nearly a decade of writing I find posts that still impress, with information that is as useful now as when it was written. Golden Oldies is a collection of what I consider some of the best posts during that time. Read other Golden Oldies here


I’m no happier about the AIG and other bonuses paid to screwed up Wall Street banks, but I’m not sure why any of us are surprised.

“In the largest 25 corporate bankruptcies between 1999 and 2002, while hundreds of billions of dollars of investor wealth and over 100,000 jobs disappeared, the Financial Times found the “barons of bankruptcy” made off with $3.3 billion.”

Giant compensation packages, guaranteed bonuses and platinum parachutes are excused by Boards and executives as necessary to attract the “best and brightest,” but here’s what’s really going on.

The ‘name’ demands outsize compensation/stock options/guaranteed bonus/etc. in order to validate their ‘brand’.

Those responsible for hiring not only meet the demands, but even exceed them in an effort to attain or sustain the company’s reputation as a better home for ‘stars’—the more stars you have the greater the bragging rights— mine’s bigger than yours in high school locker room talk.

Now let’s consider the folly of this attitude.

Those hiring often seek a name brand in the mistaken belief that the brand comes with a warranty that guarantees good results.

But no matter who you hire you’re actually paying for their past performance, which is always influenced by

  • circumstances—boss and company positioning in its market and industry
  • environment—culture and colleagues;

and let us not forget that minor factor

  • the economy.

The hiring mindset is that everything the brand accomplished was done in a total vacuum and dependent only on the brand’s own actions, therefore changing every single surrounding factor will have no impact on performance.

Put like that it sounds pretty stupid, doesn’t it.

This is one of the prime reasons that so many CEOs bring their ‘own team’ over when they move, as do managers all the way down the food chain—they know they didn’t do it alone.

CEOs aren’t like movie and rock stars whose very names draw consumers into spending money—nobody ever bought a product from GE because Jack Welch was CEO, nor do they carry Jobs’ iPods—so why pay them that way?

Moreover, assuming that performance occurring during an expansion is a valid yardstick for performance in general, let alone a downturn, is sheer idiocy.

You have only to remember the difficulties faced by people whose management skills were honed between 1991 and 2000, the longest expansion in our history. When the recession hit in March of 2001 they had no experience whatsoever of how to drive revenue or manage in a down economy.

That recession and the previous one in 1990 lasted only 8 months each. The longest recession we’ve had was 2 years, January-July 1980 and July 1981-November 1982, and that one had a 12 month break in it. This means there are a very small number of managers with any actual experience managing in anything even close to what’s happening now.

The current recession officially started in December 2007, so it’s already 15 months old and the end isn’t in sight.

What experience makes these folks the ‘best and brightest’ for today’s world?

Just what the hell are companies still guaranteeing oversized compensation and exorbitant exit packages when now is definitely the time to pay for future performance—no guarantees.

Sad, isn’t it. Seven years and nothing’s changed, in fact, it’s gotten much worse.  

The wealth of the richest 62 people grew by more than half a trillion dollars in that last half-decade, while the wealth of the poorest 50 percent of people globally decreased by more than $1 trillion during the same period.

Image credit: flickr

Entrepreneurs: Marc @ Connect 2016

Thursday, January 21st, 2016


Cross Pacific Mobile Internet Conference, or Connect 2016, was a one day event January 14 in San Francisco.

It was co-hosted by Coinvent, Cheetah Mobile, and Silicon Valley Tech Innovation and Entrepreneurship Forum.

Connect featured a host of speakers that included executives from Yahoo, Skype, Google, Yandex, Twitter, Carnegie Mellon University Innovation Institute, Oxford Internet Institute and Al Gore.

The theme of the conference addressed how cultures connect from a technology innovation standpoint — a noble task.

There was a broad range of agenda topics, including:

  • The impact of big data across international borders
  • Tech society, and our future
  • Future of big data (not the band, actual big data)
  • What’s the big deal about big data
  • How not to confuse big data with big papi or David Ortiz who incidentally, will have his last season of pro ball in 2016. (not actually a discussion on the agenda)   
  • End of Ad harassment
  • Future of mobile search
  • Vision for mobile presence
  • Differences between Asian and United States in mobile internet era development
  • Mobile Investment Outlook – Hottest Start-ups all VC’s chasing after
  • Start-up Scale Up – Comparisons between US & Asia
  • Crossing the Pacific to build new start-ups
  • Investment and technology flows between China and the U.S.

If any of the above sounds of interest, make an effort to add future Connect events to your calendar.

Taken as a whole, the discussion topics are certainly relevant enough, but the format of the conference didn’t seem to include adequate networking time to connect thought leaders and those interested in further development into the respective spaces.

Not to mention, they ran out of goodie bags of conference centric accoutrements.

However, one thing swirling through the tsunami of information was clear.

The effect of the enormous amount of data readily available in the IoT (Internet of Things) is unfolding in a sprawling fashion, with and over an ocean of opportunity for the intrepid across the globe, who cast out into the deep.  

The Far Side of Ridiculous

Wednesday, January 20th, 2016

From KG:

ice meal

From Miki: KG hasn’t had time to write, but he sent this timely warning that even good ideas can go too far and that those who follow them may be left out in the cold.

Ducks in a Row: Falling Star Marissa Mayer

Tuesday, January 19th, 2016


There is nothing wrong with Marissa Mayer’s compensation.

Yahoo! Inc.’s Marissa Mayer was the country’s highest-paid female CEO. The 39-year-old was awarded $59.1 million in 2014, making her No. 3 among the eight women on the Bloomberg Pay Index…

However, there is a lot wrong with Marissa Mayer’s performance.

The problem is, as As Wally Bock succinctly said last year, “We live in a world of microwavable answers and quick fixes” — and bosses see stars as quick fixes,” and Yahoo’s board thought Mayer the star would quickly fix Yahoo.

Hiring stars is often a function of bragging rights, better known as “mine’s bigger than yours.

But in a world where where people want star status in order to brand themselves, boards and bosses would do well to remember that they don’t come with any kind of money-back guarantee — in fact, they more often come with some kind of golden buyout.

Most star performers are a product of the ecosystem in which they perform. Change the management, culture, especially culture, or any other part of that ecosystem and stars may fall.

And never forget that that ecosystem is permeated by that insidious little detail that impacts success and is so often ignored in discussions — the economy.

As everyone knows, Yahoo isn’t Google, so…

A rising star at Google has become a falling star at Yahoo.

And a lesson learned for thinking bosses at any level, especially those responsible for hiring  executive and strategic talent — the past is no guarantee of the future.

Flickr image credit: Tim Spouge

Golden Oldies: Are you (in)competent

Monday, January 18th, 2016

It’s amazing to me, but looking back over nearly a decade of writing I find posts that still impress, with information that is as useful now as when it was written. Golden Oldies is a collection of what I consider some of the best posts during that time.

This particular Oldie is one of my favorites; probably because it poked such large holes in all the giant egos back in 2000. And it should do the same thing to the even larger egos walking around today. Read other Golden Oldies here.

Gotcha! I see all you readers twisting your arms in order to pat yourselves on the back because you know that even though you could improve at least you’re not incompetent.

Are you sure of that?

Way back in 2000 I read about research that stuck in my mind, an unfortunate reminder to me that I’m not nearly as good/smart/interesting/funny/etc. as I’d like to think I am.

It was done by Cornell’s Dr. David A. Dunning, who describes his research in the field of social psychology this way, “My social psychological work focuses on two related phenomena. First I am interested in why people tend to have overly favorable and objectively indefensible views of their own abilities, talents, and moral character. For example, a full 94% of college professors state that they do “above average” work, although it is statistically impossible for virtually everybody to be above average. Second, I am interested in how people bolster their sense of self-worth by carefully tailoring the judgments they make of others. That is, people tend to make judgments of others that reflect favorably back on themselves, doing so even when the self is not under explicit scrutiny.”

According to the research, “most incompetent people do not know that they are incompetent. On the contrary. People who do things badly are usually supremely confident of their abilities — more confident, in fact, than people who do things well…One reason that the ignorant also tend to be the blissfully self-assured, the researchers believe, is that the skills required for competence often are the same skills necessary to recognize competence.”

Isn’t that encouraging.

How bad is it? “Asked to evaluate their performance on the test of logical reasoning, for example, subjects who scored only in the 12th percentile guessed that they had scored in the 62nd percentile, and deemed their overall skill at logical reasoning to be at the 68th percentile.”

However, since the skills that make you competent are the same that you use to evaluate your ability, if you’re good at something you’ll know, right?

Wrong! “Unlike unskilled counterparts, the most able subjects in the study were likely to underestimate their competence.”

So, damned if you do and damned if you don’t.

The research did find that, “…a short training session in logical reasoning did improve the ability of low-scoring subjects to assess their performance realistically…”

But if you don’t know, why would you get the training? Or should you get it as preventative medicine.

Or maybe, just maybe, you should actually start listening to those around you and really hearing what they’re saying—even if it’s not complimentary, makes you uncomfortable and you don’t agree.

It doesn’t mean that “they” are always right, but if multiple people are all saying (by word or body language) the same thing, it’s very likely that they know something about you that you don’t know.

Listen, learn, think, change.

Entrepreneurs: Ajo and His Startup Quant Price

Friday, January 15th, 2016

Quant Price logo

Yesterday I described how I came to start my company Quant Price. Today is the story of what happened after that decision.

I first did the Founder Institute program that helps entrepreneurs create companies. They introduced many concepts that are hard for first time founders to grasp. Things of HUGE importance ranging from talking to potential customers to validate the idea to seeing how buying decisions are made.

There are many things that can make a startup fail. Each of these factors are risks. A successful startup has avoided each of these pitfalls in succession.

There is a step by step process to developing the idea and de-risking it. The founder Institute program helped me think through them.

One shortfall of the program was that it has a cookie cutter view to creating startups. It requires that everyone fit into a mold. This may not serve every startup well. I’d probably have taken it to completion if I were not “terminated” for having a hard time getting a sufficient number of video interviews.

Though to be rational, I’ve to admit that it’s also possible that I just have a very bad idea or am not really cut out for this. I may only know very late because “I’m drinking my own Kool-Aid”.

The risks are huge. There are a lot of things that matter to a startup being a success. There has to be value in the product. There has to be a way to reach a big chunk of the market. There has to be a way to convert all those gains into money. People have to believe in the dream and be willing to contribute for free for the duration that the cash flow doesn’t exist.  It takes a lot to keep a startup together.

It was very hard to find my first customer. I didn’t even have my marketing material when I went to interview Katherine Krug the founder of Getbetterback.

Partially because I didn’t realize that I was supposed to bullshit my way through such meetings and, frankly, partially because I didn’t know how to bullshit about it if I had to.

Fortunately, Katherine is one of those people who tests things like prices. I think she was lucky to not have a mentor who had a strong opinion about pricing. (I still can’t believe that people don’t test their prices.)

Katherine first did a price test with Optimizely. Unfortunately, Optimizely is not really geared to do price tests. Additionally, putting Optimizely code on your web page makes it load a lot slower for the end consumer. That itself reduces conversion rates.

It made me wonder if people don’t know or just don’t care about the impact this has on the browsing experience.

Optimizely targets conversion rates, so once Katherine was done with the test it told her how many people had converted to buy at different prices. Obviously at the higher price, fewer people converted.

But the real question was which price lead to better margins?

And was the test significant?

That is when she realized she needed Quant Price.

I salvaged the Optimizely results to guess what the next prices for the next test should be.

We used our pricing engine and did an A/B test. It turned out that seemingly identical prices $49 and $59 were over 26% different from a revenue perspective.

We also realized that changes to the web design and the holiday season could change the optimal price. So much so that at some point $69 was 22% better than $59 because of the Christmas buying spree.

Hidrate, my second client, was easier to find after we put up a video interview with Katherine.

With Hidrate, we seemed to run into some bad luck. The $59 price for them was identical to $49 from a profit perspective. But as luck would have it, they were running out of inventory. Now, at the $49 price they were burning through 45% more inventories to make the same amount of money as at $59.

Once we told them about it, they raise their price to $59 to save inventory. They kept their customers happier for longer AND made money to buy more inventories without losing the company to investors.

Here are details from our first two clients,

We did all this by using technology developed for finance. Quants in the financial industry are usually tasked with pricing securities worth trillions of dollars based on market data. There are multiple factors that affect the “fair” price of a security.

I learned how this valuable task of pricing can be automated incorporating available data.

Many companies now quote prices and sell exclusively online. Computers can be used to make pricing decisions based on price sensitivity of individual customers, business specific parameters, such as inventory availability and market conditions and the current season.

Airlines and Amazon already do this on a massive scale and are very profitable as a result.

SaaS companies and large-to-medium scale retail operations could be next in line.

Fortunately, our market is easily defined. We are looking to help companies with more than 300 distinct customers. This is desirable because with more data we can get statistical significance on more complex models.

We are looking to help SaaS companies that want better pricing models. For them, we have a solution that reduces churn and increases revenue at the same time !

To justify building a company-specific solution, we need to be able to service a pool of revenue of over 10M$/year.

Quant Price’s free app Qbot is available to smaller companies in the Shopify app store.

In order to make our technology more accessible we packaged it into APIs and apps, that help us expose this functionality to more companies.

Two final points.

  • We are looking for talented people  who can participate in the development of our product.

And if you have any questions or comments you can respond here or use the email address above.


RSS2 Subscribe to
MAPping Company Success

Enter your Email
Powered by FeedBlitz

About Miki View Miki Saxon's profile on LinkedIn

About Ryan ryanrpew

About Marc marc-dorneles-cpcu-b8b43425

About KG View KG Charles-Harris' profile on LinkedIn

About Ajo View Ajo Fod's profile on LinkedIn

Clarify your exec summary, website, marketing collateral, etc.

Have a question or just want to chat @ no cost? Feel free to write or call me at 360.335.8054

Download useful assistance now.

Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.

Give your mind a rest. Here are 2 quick ways to get rid of kinks, break a logjam or juice your creativity!

Crises never end.
$10 really does make a difference and you'll never miss it,
while $10 a month has exponential power.
Always donate what you can whenever you can.

The following accept cash and in-kind donations:

Web site development: NTR Lab
Creative Commons License
This work is licensed under a Creative Commons Attribution-NoDerivs 2.5 License.