Reviews Archives - Scrollin' On Dubs

Oct 20

Book #2: Abundance- the future is better than you think

Of the twenty books I read recently I would put this one in the top three as being a must-read. I have a bunch to say about this book but let me just hit the main points:

It provides a much-needed dose of optimism in the face of constant doom & gloom predictions about climate change, population explosion, terrorism, drought, food shortages, epidemics, nuclear proliferation, etc. It’s presented in a credible and evidence-supported way (exactly half the book is footnotes and references to other sources). And it gives a prescriptive path offering ideas for things we can do to positively affect outcomes.
The first part of the book addresses the cognitive biases that explain why each successive generation tends to believe that calamity is imminent. Two biases in particular (anchoring and loss aversion) lead folks to blind spots that stem from fear and inability to think beyond the current reality frame. A great example of this was the widespread fear in mid-1800’s that the town was doomed to drown in horse manure. Given the situation it was a rational conclusion but they couldn’t have foreseen the advent of the automobile and the fact they’d soon be concerned over polluted skies rather than polluted streets.
The mechanism for this unforeseen, quantum leap type progress is what Diamandis calls the “adjacent possibles” or “doors that immediately lead to more doors.” This was one of my favorite paragraphs explaining this concept:

Twenty years ago, most well-off US citizens owned a camera, a video camera, a CD player, a stereo, a video game console, a cell phone, a watch, an alarm clock, a set of encyclopedias, a world atlas, a Thomas Guide and a whole bunch of other assets that easily add up to more than $10,000. All of which come standard on todayâ€™s smart phones, or are available for purchase at the app store for less than a cup of coffee. In this, our exponentially enabled world, thatâ€™s how quickly $10,000 worth of expenses can vanish. More importantly, these things can vanish without too much outside intervention. No one set out to zero the costs of two dozen products, inventors set out to make better cell phones, and the path of the adjacent possible did the rest.

The author gives his definitions of some fundamentals:
- what is abundance? everyone maximizing talents
- what is prosperity? saved time “true measure of something’s worth is the hours it takes to acquire it”
- what is culture? ability to store, exchange and improve ideas
He then goes on to discuss the “Eight exponentials” which are the eight fields that they chose as curriculum for Singularity University: biotech, computational systems, networks & sensors, AI, robotics, digital manufacturing, medicine, nanomaterials. He posits these fields uniquely have the capacity to compound the effects of the others and yield impossible leaps.
He maintains that the “abundance backbone” consists of four disciplines: literacy, basic math, life skills & critical thinking. These four fundamentals provide the essentials necessary for one to then use the internet to attain other. knowledge to make advancements. It made me think of the analogy of a computer BiOS for being able to call a bootloader and load the rest of the OS. As long as you have these core skills you can fetch everything else later. So the challenge becomes to deliver these core skills to more people who currently lack them, along with the means to get the rest from the internet.
He says that “creative ideas are the ultimate resource yet our current educational system does little to nourish this resource” and then quotes Sir Ken Robinson. I strongly recommend his TED talk on the subject of education. I’ve written at length on my ideas for how we could revamp education and agree that we need to fundamentally rethink the system from the ground up prioritizing creativity.
Apparently the author co-founded Singularity University with Ray Kurzweil. I saw Kurzweil’s “Transcendent Man” film last year and highly recommend it.
It’s core premise is that Artificial Intelligence + computing power + Moore’s Law means we’re approaching an inevitable shift where AI will soon blow past the human brain in performance capability. The author points out “whether the lightning fast search results of Google or the speech recognition of Siri like it or not we are already AI codependent today.”
HavingÂ Jeff Hawkins’ book “On Intelligence” recently I found it interesting there’s no mention of the Numenta technology. To me that’s the most intriguing advancement for AI (essentially biomimicry of the human neocortex).
He cites the the “lab on a chip” innovation as an exciting synthesis of sensors, AI, and network which dematerializes the HIV test: What once required long doctor visits, a vial o flood, and days or weeks of anxious waiting now needs no visit, a single drop of blood, and a fifteen-minute read, all for under $1 using a microfluidic optical chip smaller than a credit card.” When combined with geo-awareness via GPS and machine learning it opens up the possibility to catch and contain epidemics at an earlier stage, which is especially relevant given the current frenzy around the Ebola scare.
There are four major motivators driving innovation: curiosity, fear, desire for wealth creation, desire for significance. In addition to founding Singularity University the author is also creator of the X Prize which leverages all four of these motivators.
He makes the case that incentive prizes do a couple useful things, namely: 1) raise visibility of big challenges and 2) pave the way by creating a public mindset that the challenge is in fact solvable. Also 3) in areas where market failures or entrenched incumbents have thwarted progress, prizes like the X Prize can serve to break up otherwise impassable bottlenecks.
The irony of this is that a fellow company at the last incubator where we were a tenant, Paraslice, had solved the genome sequencing X Prize just before the prize was revoked and the contest canceled.

In all, I found this book hugely encouraging and thought provoking. We are deluged with such negative and substance-less information daily, it was so refreshing to get a glimpse of an optimistic (yet realistic) potential future. For more info see the author’s blog or .

Tagged with: 20books

Jul 08

Thoughts on Infusionsoft from a new user

Entrepreneur, Nerd, Reviews 4 Comments »

Three months ago became the newest customer of Infusionsoft. I’ve learned a ton about this product during this time and wanted to offer a brain dump of thoughts. These are directed both to potential users of the software as well as Infusionsoft the company.

What it is: CRM + automation fabric

Describing this product concisely is difficult because it’s more of a “fabric” than an application geared towards a specific use case. As far as I know it’s the first system to bring the capabilities of something like Eloqua and Marketo within reach of the small business, only better because it combines CRM. Think of it like a pliable Silly Putty for marketing & CRM automation that allows you to set your marketing material up like one of those “Choose your own Adventure” books from back in the day. It’s tempting to call this system “a nerve center of customer communications for a SMB” but that too would be pigeon-holing it to customer communications when it can be equally valuable for vendors, partners & resellers. I like the “moldable marketing fabric” analogy because it captures the right essence of the flexibility of it. My friend Eric who works there calls it “the OS of small business” and I think that’s an interesting and valid way to put it.

Another way to think of it is via the phrase coined by one of their star customers, Jermaine Griggs. He did a stellar webinar about a week ago that is a must-watch for people getting started with Infusionsoft. He cites the main benefit as enabling the “scaling of personal attention” – basically gaining the ability to render customer experiences you’d expect of a small mom & pop shop only on web scale supporting hundreds of thousands of customers with the same level of intimacy. This guy has a truly incredible story having come up from nothing – he’s worth listening to just for his humility alone but he also has a brilliant mindset of how he approaches marketing and relationship building online.

How this can benefit SMB’s

Again it’s tough to reduce the benefit to a sound byte here because it really depends on how one uses the fabric. What would you do if you could imbue your selling knowledge into your web app so it intelligently did things the way you would do if you were standing there in person talking with the prospective customers? How might that change both their experience as well as your insight into what they want/need? I find it find Dave McClure’s AARRR pirate metrics framework useful when examining online businesses – Infusionsoft can basically help in 4/5 phases (activation, retention, revenue and referral).

We “hired” Infusionsoft for two main reasons: 1) on the back end there’s simply no way for us as two people to stay on top of all the deals handled by our network. We had tried using Google Docs, Longjump, a custom WordPress app and Basecamp and while those each sufficed on the CRM front, none gave us a way to intervene and actively and intelligently babysit transactions. 2) On the front end our leadgen apparatus was very static. We had a single linear funnel for on-ramping new customers. While Mailchimp auto responders are better than nothing, you’re still highly constrained by how adaptive you can make your marketing and it’s not unified with CRM so there’s no straightforward way to pull up contacts and get a clear picture where everyone stands.

What it’s lacking

Infusionsoft has been great at addressing these issues so far but I feel like maybe I’m fawning over this product a bit much; it’s definitely not perfect. The difficulty of setup is its Achilles’ heel right now impeding mainstream usage. It took us roughly two months to implement and we are moderately-technical and highly motivated. While they’ve made strides with their new visual campaign builder, it’s still missing the mark in a couple fundamental ways. There are IMO two separate shortcomings with their current onboarding process:

They ask customers to make the leap to wiring up a solution before mapping the current landscape. The campaign builder put some sanity to an extremely unintuitive implementation process that involved jumping amongst many screens to wire up templates, action sets, rules, web forms and follow-up sequences. But it doesn’t solve the intermediary step needed wherein the customer visually maps out their existing processes, identifies the opportunities to fix the funnel and thereby establishes the plan. For those with a background in software development, think of it like parachuting into a programming scenario and trying to leap to writing code to solve a problem before you’ve mapped out the current process and hashed out the user stories for what you’re trying to build.
I think even if they were to add this intermediary step, it’s still going to a far stretch to ask the average SMB owner to complete this process on his/her own. There’s real artistry and skill involved in identifying the biggest opportunities and then taking the knowledge of the software and translating the business objectives into implementation. I believe their model needs to shift from a DIY solution for the end consumer to incorporate an agent as the intermediary. These “marketing architects” would have a thorough understanding of both online marketing best practices as well as detailed understanding of Infusionsoft and be bridge builders to close the current gap. In fairness, they do pair you up with a “success coach” employee who helps get you through the initial onboarding process (big shout out to ours, Brett was instrumental in our implementation). But IMO this is a band-aid fix to symptoms which would go away if the consultant ecosystem were made to be a more integral role.

It’s impressive how many people they have using the system in spite of these impediments. It’s a testament to how useful it is that folks want it badly enough to figure out how to bushwhack their way through it all to get it working.

What I would do if I were Infusionsoft

So I hate criticizing things and not offering solution suggestions. Here’s what I would be doing if I were Infusionsoft to remedy these issues:

Create an “assembly exchange” They’ve already got what appears to be the equivalent of an AppExchange for vendors to market plugins to users but what I propose is actually making it so I as a user can turn my configured instance into a template I can sell other people. Think the way AWS allows EC2 users to convert a running instance into an AMI that can be made available to others – it opens up a whole new ecosystem. A bicycle store owner in Tampa who has developed a successful marketing framework in Infusonsoft should be able to productize his/her instance and sell it to bicycle store owners elsewhere. This would do some miraculous things, namely a) create a new revenue stream for that Tampa bicycle store owner without cannibalizing his/her local business b) help the new Infusionsoft user expedite her bicycle store marketing implementation and get a proven system unique to her vertical c) reduce customer attrition for Infusionsoft by reducing frustration and failed on boarding d) potentially spawn a whole new class of companies like how WPMU and Thesis grew around WordPress.
Disentangle planning from implementation. Right now the “architecture” and “brick laying” are intermingled when setting up a new instance. It would be beneficial to have a separation that allows one to articulate the current business processes, then map out the ideal new flow after Infusionsoft. This document could then be handed off to a commodity implementation resource via oDesk or Elance and the tedious grunt work of implementing stuff could be offloaded. I haven’t formed a strong picture of how this looks but my hunch is they don’t need to reinvent the wheel here – this format already exists either as a specialized sequence diagram in UML or via BPM with an open source tool like Intalio. The sharp consultants are probably using a homegrown tool of their own to achieve this step – I would start by asking them how they’re doing it.
Consultant ecosystem of brick layers v. architects I realize there’s already a consultant community for Infusionsoft but as best I can tell there’s no commonly accepted format for mapping out the vision with one “marketing architect” and then taking portable definition to a more commodity “infusionsoft implementor.” In my mind that first piece is what they should give away free: a way for any visitor to come and sketch out their funnel and current vs. proposed marketing interactions. Then simply charge for translating the proposed version into reality. Once the architecture can be partitioned from the implementation it opens it up to be able to commoditize the brick laying aspect and drives the architectural role to be more about formulating valuable constructs for the funnel rather than worrying about nuts & bolts of implementation.
Sandboxed dev v. staging v. prod environments I would love to outsource some of the grunt work I’m doing now but I’m also very hesitant to give access to our system over to a stranger in the Philippines. The way we do this with our site now is by cloning our WordPress instance with BackupBuddy and spinning up a duplicate instance on EC2 and giving the contractor access to that system. They can break it all they want and there’s no damage. What’s better, I can spin up 5 instances and compare 5 different contractors apples-to-apples in parallel for two hours of trial work to see who gets the furthest and does the best work. It would be great if there were a way to clone our Infusionsoft environment and run sandboxed versions that could be promoted to staging and ultimately production. If the above separation of “architects vs. brick layers” is to be achieved this will be an important capability.
An offline IDE This is perhaps too demanding to ask for this now but I will anyways- it’d be great to have a non-web-based way of building stuff. In the same way that Quickbooks online is cumbersome to accountants who are used to flying through screens on the desktop product, when you’re building a bunch of sequences and emails and whatnot, the latency of the web even on a fast connection is annoying. I totally get why it’s all web-based now (I would do the same) but perhaps there’s opportunity to do an Eclipse-based IDE that would generate a file which could be uploaded to Infusionsoft and provide an easier way for building a system?

Other random thoughts

So this is my random catch all for other things I wanted to mention that would be useful:

Bizspark equivalent the $2-3k initial startup cost is going to be preclusive for most startups even though they stand to benefit dramatically from this software. If Infusionsoft can stomach giving away some super-cheap accounts they should strive to offer a no-support, self-serve, feature-dilluted option for startups and take a longer-arc view harboring people who can’t afford it today but represent prospective future customers. Those folks are also typically more vocal startuppy types so there is likely some marketing benefit to serving them even though they’re free accounts today.
The gmail core plugin rocks This is missing functionality in the core Infusionsoft app but I’m happy to see that someone nailed the plugin that provides it. This plugin makes it so Infusionsoft will automatically monitor your Gmail and append communications that happen there to their corresponding contacts in IS. The benefit is multiple people can be working how they normally work and a centralized record of communications is retained in Infusionsoft for all to see. I would love to see the option in Gmail Automation Core to do attachments via filebox as well as the ability to do a one-time retroactive pull of past communications from a gmail account.
Global & shared dashboards There’s no way I can see for me to create a dashboard which gets shared amongst other members of my team. It’d be neat if they made it possible to have tabbed dashboard pages and possible for one to mark his/her page as “shared” so others could use it.
Past emails should be snapshotted by value rather than by reference There’s a glaring issue IMO right now with how past automated emails are preserved: currently it stores the variable names instead of the actual communication to the client. This needs to be a snapshot of what exactly was sent at that point in time. Think of changing prices, new sales reps, etc. There’s no good reason to store it by reference with variable names- it really needs to be snapshotted.
Tags and follow-ups listed in search results I would imagine they’ll add this soon but it’d be useful to be able to see sortable search results with the tags appearing in columns separated by tag category. Likewise it’d be nice to scan a bunch of results and see what follow-up sequences they’re in.
Calculated fields This is the one thing I really miss from Longjump: the ability to have fields on the contact record that are derived from other fields. Consider adding the ability to make a field that is simply a formula builder consisting of other fields on the record.
Lead origin tracking We’re likely going to do a bit of a tap dance on our site to get what I want in terms of tracking all the data on how customers originated (ie. which ad channel, campaign version, landing page, keywords, etc). This is fundamental and important enough that I believe this belongs in the core product. For now we’re planning to roll a cookie with all this info and then pass it via hidden fields on form submissions.
Snooze button on follow-up sequences It’d sure be nice to be able to click on the date of a follow-up sequence and just override it for that contact record. We end up doing a hoaky process now whereby we remove the sequence, create a scheduled task to remind ourselves to start that sequence over again at a later date. It’d be much preferable to be able to have a “snooze button” that would let you manually override the date of the follow-up sequence and push the whole thing out X days.
File-type form field to upload attachments The form builder tool is very good but it’s missing an obvious field type: there’s on ability to do file attachments. This one shouldn’t be terribly difficult to implement but there should be a new type of form field for attachments and they should be sent to the filebox for that contact.
No split testing I’ve seen the recommendations for how to implement split testing in Infusionsoft and unfortunately it’s pretty ghetto. I understand people are working on IS plugins that will lend this functionality but A/B testing is so integral to online marketing now that I would argue it belongs in the core product. If this is too peripheral to be in the core product today I would suggest making a one-click option for integrating something like Optimizely or Visual Website Optimizer. We’ve used Optimizely for awhile now and it’s excellent.
No funnel visualization There’s no way I’ve seen to visualize the various funnel interactions and run cohort analysis. Likewise this is pretty core to online marketing and if it’s not something they want to bake into the product itself I’d lobby for making it easy to enable KissMetrics or MixPanel by just entering in your acct ID for those products. I’ve used KissMetrics for about two years and it’s great for determining which section of your funnel demands attention.

Anyways, in summary, Infusionsoft is a really promising product and I’m excited to finally have our v.1 implementation in place. I’ll report back here on what I learn as we go. It’s great to see a local AZ company delivering a service that’s represents so much promise and has customers around the world. I look forward to seeing it evolve. If you’re interested in potentially using Infusionsoft for your business request a demo or check out some of their past client case studies.

Apr 30

Book review: Get Lucky

Reviews No Comments »

This book is fantastic. Here’s the main premise (albeit over-simplified):

Mega successful entrepreneurs consistently cite luck as being one of the most critical factors of their success. This is depressing from an aspiring entrepreneur perspective because it’s disempowering. It means for all the energy we expend to improve our odds of success, our efforts are ultimately trumped by a force that’s out of our control. Thor and Lane posit that while we can’t manufacture luck, we can court it by cultivating the conditions for serendipity.

Suspend all your disbelief for a second and think about the ramifications of this premise. If:
a) luck truly trumps the importance of other factors like productivity, creativity, intelligence, communication, etc. in the success of a venture and
b) there is a framework that can amplify it
Strengthening that “muscle” is the single best exercise we can engage in to help our respective causes.

I tried to think how best to do justice to this book in a review and I’ve come to the conclusion that the best way is via an experiment I’ll call: “A post a day for the month of May.”

It’s a rare gem of a book that takes a counterintuitive premise (ie. “luck can be courted”), offers well-thought & researched ideas, anchors the theory with memorable stories and does it all in a style that’s entertaining and believable. But it’s extremely rare to read a book that lives beyond the paper, compels one to behave differently and generates an immediate noticeable impact.

I’ve struggled with writer’s block over the past few months. Truth be told it’s a problem far larger than writer’s block more on the order of “connective paralysis.” I think we all occasionally find ourselves in life’s “eddies” where the stream of life flows past us while we remain stuck. I’ve had a dry spell of creative energy and connective apathy stuck in one of these eddies for awhile. It’s like having a dirty windshield where you know your view is diminished but you don’t care enough to stop and clean it. I can say though in the ten or so days I’ve been reading through this book it’s had a very real impact already.

I’m not going to attempt to cram all my thoughts on this book in this post but rather leak them out over the course of the next month. I will say that in the span of beginning and finishing this book I landed what I believe will be a pivotal business relationship and I directly attribute it to what was in these pages. Once the ink is dry on that contract I’ll share ;-) And after a four year drought of original music creation, I’ve begun writing some material I’m proud of which I’ll post soon here.

I have no idea if I’ll be able to crank out a quality post per day over the next month given the volume of stuff happening. But I plan to pick a different passage or idea from Get Lucky book each day, explore it, modulate it with my own take and release it back into the ether. I’ve got some of the same hopeful neurons firing now that were firing five years ago when I wrote posts like this one. Thank you Lane and Thor for writing this and challenging the world with a premise that seems patently absurd on the surface and yet could be so life-changing for many.

Oh and in the spirit of this book I’m going to include a unique song “pairing” that hopefully introduces a few readers to new music and captures the essence of each post muiscally. Sooo…. Change your tune: Radical Face – Glory

Tagged with: padftmom

Jun 23

My problem with The Black Swan

Reviews 4 Comments »

A couple people have recommended I read the book The Black Swan recently. I’m only 40pgs in and already I have a serious issue with it. The picture below is a good summary of my gripe:

It’s essentially like that highway roadsign that warns you of falling rock – it’s useless advice. Since when has that sign ever altered your driving behavior? In fact it’s worse than useless, it’s presence is detrimental because it generates unnecessary worry and distraction without giving you any actionable info to be able to do something about it. It merely broadcasts, ”
Yeah, so rocks might fall on you. Sucks.”

Similarly The Black Swan appears to offer this as its core message:

Despite our best efforts to make sense of situations throughout history, inevitably a massive, random event at some point manifests and its unpredictable effects trump everything we knew previously.

Basically “rocks might someday fall on you. sucks” – a completely worthless and defeatist message. And yet somehow this book has won a bunch of praise as being insightful. I’m not sure if the author is advocating that we stop applying science to attempt to understand current situations but that is a message that one could infer.

I’ve admittedly only read a sliver of this book thus far so maybe the author eventually gets around to offering some type of prescriptive advice. But at this point it appears to be a pop psychology wankfest (and a verbose one at that). At least books like “Tipping Point” and “Blink” had concise writing and referenced interesting psychology experiments to yield conversation fodder. This one appears to be entirely devoid of both. Somebody who’s read it and found it valuable – what did you take from it that was useful and how has it changed your behavior and how you think?

Tagged with: suppressrevivepost

Feb 25

50 acoustic artists you need to know

Reviews 142 Comments »

acoustic If you’re in a musical rut and need to change your tune here’s a list of my all-time 50 favorite singer/songwriters. I’ve linked to a live clip that’s a good representative song for each artist. Disclaimer: this list is HUGELY skewed towards male singers (in fact there’s only one female on the list) plus, yes I play myself and of course dig my own music so I’m on there. If you have any good suggestions to balance out this list with the female gender, please make recommendations. I’ve just rarely found female singers that I connect with. But I’m sure there are great ones out there – add them in the comments if you have suggestions!

Joe Purdy
Sean Tierney
Jose Gonzalez
Nate Stone
Greg Holden
Mat McHugh
Shane Alexander
Matt Costa
Griffin House
Rocky Votolato
Brett Dennen
Dustin Kensrue
William Fitzsimmons
Colin Hay
Chad Stokes
Jack O’Neill
Ryan Adams
Jeffrey Gaines
Howie Day
Teddy Geiger
Xavier Rudd
Damian Rice
Alexi Murdoch
Conor Oberst
Elliot Smith
Jeff Buckley
Ray LaMontagne
Glen Hansard
Angus & Julia Stone
Joshua Radin
Avett Brothers
Kevin Devine
Joseph Arthur
Mike Doughty
Adam Stephens
Ryan Miller
Brian Chartrand
Mark Kozelek
Misha Chellam
Andy Mckee
Cat Stevens
Nate Ruess
Justin Vernon
Todd Snider
Sam Beam
Nick Drake
Bobby Long
John Prine
Charlie Mars
Sean Hayes

This list can’t be complete – who is conspicuously missing and who are the female equivalents to these guys?

Tagged with: songwriters

Jan 07

"Getting to Plan B" is a must-read for every entrepreneur

Entrepreneur, Reviews 11 Comments »

I just finished the book Getting to Plan B. This is hands-down the best book for a startup I’ve read in the past year. It’s got just the right balance of theory anchored by real-world examples to make the lessons stick. It’s like basic anatomy for business and it shows you how to think about the all the organ systems involved, how they function together and how tweaking one ripples effects to the others. I’ll a do a brief review/summary here for anyone who is thinking of reading it, and if you’re in a startup this should be the next thing you read.

Synopsis

The core tenet of the book is that business planning is a misnomer, it’s more accurately business guessing. And companies almost never pick their destiny right on the first guess. The art of building a startup is the iterative process of zeroing in on the right formula over time. It’s all about making and testing hypotheses with empirical data rather than drafting a massive plan up front and clinging to that. If you’re familiar with software development methodologies this is the age-old “waterfall vs. agile” distinction. And this book is essentially the Agile Manifesto of business formulation that provides a creed as well as a framework for how to think about your business and conduct this iterative development.

The book is divided into two sections: the verbs and the nouns. The verbs are the processes you’ll use to hone your plan with each iteration. The nouns are the five models or “organ systems” to consider as you look at your business. First let’s look at the verbs:

The Verbs: Processes for refining the business

The ultimate goal is to zero in on the best formula for doing things that lead to the best outcome as quickly as possible. I’ll use Netflix (before it existed) as an example to demonstrate each concept.

Find Analogues: These are the parallels you can look to in order to answer questions without doing anything other than research. The idea here is to not reinvent something that’s already been proven. Find relevant design patterns from existing businesses either in your space or better yet, in a completely different industry (because competitors likely will have already considered your adjacent players). Glean what you can from what these guys have already proven and treat it as free brickwork in building your foundation. In the Netflix scenario this might have been looking to businesses like Columbia House or BMG for proving that people were willing to purchase media mail order via subscription service.
Find Antilogues: These are the anti-patterns to study- either the failures that have come before you or the businesses that are out there succeeding marginally but doing something wrong. Study their shortcomings and resolve to consciously do things differently. Again, this is freebie insight you get from analyzing the efforts of others – these bricks cost you nothing and allow you to work from the base of experience others have proven out rather than starting from dirt. In the Netflix scenario Blockbuster could be an analogue for its physical stores, per rental fee & late fees aspects. Another one might be Divx for how it attempted to rent DVD’s and then expire them using DRM technology. Basically anything that’s been tried and either failed or shows status quo thinking and can help you decide what not to do.
Identify your Leaps of faith: These are the important questions left over once you’ve applied the relevant analogues and antilogues- basically the stuff that keeps you up at night wondering if it will work. Presumably you’re going to be breaking new ground- these are the do-or-die questions that will determine the viability of your proposed business. The success of your plan hinges on proving or refuting these questions as soon as you can. In the Netflix scenario some key leaps of faith: A) would people ever embrace the mailed DVD approach or would they need the spontaneity of in-store rentals? B) Would the turnaround times be sufficiently quick to provide enough liquidity and selection in the catalogue? C) Would loss or damage from postal mail as the transfer medium add costs making the service unfeasible under rates the customer would accept?
Test them via Dashboards: These are the collections of metrics you monitor to prove or disprove your leaps of faith. For each leap of faith you determine the specific metrics necessary to test the validity of your hypothesis. For the Netflix LOF’s above some dashboards would have been: A) adoption as measured by signup rate, random surveys to determine % of movie watchers who used Netflix vs. traditional rentals over time B) avg time users held a movie, satisfaction ratings on selection quality, avg time movie was in transit C) user complaints related to loss or damage, inspection reports upon receiving returned movies.

The Nouns: The five models to consider

If you distill it all down, there’s five aspects of your business you need to refine. They’re all interrelated and tweaks to one will impact how the others function. None of this is rocket surgery when you examine them in isolation but it gets interesting when you see how changing one can allow you to play with the others for strategic advantage.

Revenue Model: Who/what/when/where/why/how will people buy your stuff? How often? At what price? On what terms? Can you think of more meaningful ways to sell the same products under different assemblies that will increase the perceived value and allow you to charge more?
Gross Margin Model: All about cost of goods vs. revenue – how low can you drive your COGS and how high can you kite your prices? What are the knobs you can twist on how you spend on packaging, manufacturing, delivery and sales to help your gross margin approach 100%? How can you hedge in scenarios of uncertainty using multiple product lines with mixes of different gross margin models?
Operating Model: How can you slim down your overhead? Is it possible to transition fixed operating costs to variable in the short term so you have the benefit of that cash early and optimize for profit later? What assumptions can you challenge and what can you cut out of your offering that is non-essential and can make you a lean athlete and give you a competitive advantage in your operating model?
Working Capital Model: Available cash as determined by Assets minus Liabilities. We all try to pay our bills at the last possible minute and collect our receivables as soon as possible but what are the real implications? How can being ruthless in optimizing this equation allow you to minimize investment required or make life difficult for a competitor? Can thin margins allow you to pass savings onto customers, create volume and allow you to negotiate better payment terms with suppliers giving you more cash on hand?
Investment Model: the cash and other resources needed to get things started, get to break even and to then grow. How can you stage rounds of investment to increasingly remove uncertainty and therefore raise the capital you need on better terms? What can be bartered, eliminated, deferred or substituted to reduce the needed cash investment up front? What culture can you instill early on by taking a spartan approach? How much of the pie can you keep in the early stages so you can splurge on giving your employees more options and retain more control in later stages?

Takeaways

Isolate the leaps of faith and develop the metrics that test each independently: We’ve been intuitively testing hypotheses and adapting our business at JumpBox based on feedback since day one. What Plan B helped me fully absorb is the benefit of unraveling knotted hypotheses that involve multiple leaps of faith and thinking about each individually. Think of some unknown in your proposed business plan with a seemingly-straightforward question like “will people buy durian-flavored lemonade?” and I bet you can decompose it to constituent questions of “will people buy lemonade that’s a) purple b) tastes like durian c) branded with a durian fruit image on the cup? This is a simplistic/silly example but the point is the more you can tease apart the variables the better you uncover the true drivers.

Think about how you can unlock more cash: The gross margin, revenue and operating models all affect your working capital model which then dictates what you need to do investment-wise. The more ways you can find to free up cash (whether by improving your gross margin, reducing operating costs, getting your customers to pay you in advance, extending terms on accounts payable, etc) the less money you have to raise and the less equity you have to give up. This of course should be common sense but the examples in the book of Costco, Go and Skype hammered these lessons home and showed how you can not only grow your own business but actually suck the oxygen out of the room for others and create impossible living conditions for your competitors.

The importance of the dashboard: We already monitor key metrics in our company but Plan B hounded importance of aggregating these figures in one place and snapshotting them over time so you can see unequivocal evidence (and substantiate it to others if necessary). Traditional business intelligence systems are too heavy for most early-stage startups. But free online tools like yahoo pipes & dapper feeding a google spreadsheet can give you much of what you need. Of course if you’re slightly more technical there’s ETL and data presentation JumpBoxes that can give you even more control over your dashboard ;-)

Sources for inspiration of analogues and antilogues I read magazines like Wired, Fast Company and Inc and I find the stories of the companies interesting but Plan B gave me a new way to think about the companies covered in these articles. It’s impossible not to start envisioning what their underlying working capital model must look like and start thinking of them as an analogue or antilogue. I love books that peel back the translucent film on life and allow you to look at something in a completely new light and see it more clearly – this book absolutely does that. It makes reading these magazines take on a new “treasure hunt” aspect and gives leisure reading a very real prospect of producing insights that can be put to work. Awesome, just awesome.

Critique

The only major deficiency I see with this book is that it hovers at a strategic level and never dives under the water to give truly tactical advice on how to do the dashboards. The dashboard is arguably the pivotal piece in all this because it’s how you determine if you’re right. The book has a section towards the end that helps you with “what do I do next?” but it never presents example dashboards to demonstrate how they work in practice. I would LOVE to see a paperback workbook complement to this novel. Even better, I’d like to see Komisar & Mullins team up with someone like MindTouch and include a CD complete with a functional piece of example software that shows a real dashboard referencing live data in spreadsheets, a site, a database, a CRM system, etc.

On a tangent, this is precisely the type of thing we want to enable by allowing an author to bundle working, data-filled JumpBoxes on CD with a workbook. I can easily envision including JumpBoxes for MindTouch Core, Snaplogic, SugarCRM and MySQL and then having them pre-filled with actual data and referencing Google Spreadsheets, a live web site and Excel files to show how an actual dashboard works in practice. Rather than talking abstractly about measuring nebulous things like support efficiency and sales conversion, it would be great to be able to see exactly how this works. Those physical examples would bridge the last mile here – the piece that’s missing which allows you to close the book and open up your laptop and apply dashboarding to your own situation. If the authors happen to read this, let’s talk- I’ll help you write this workbook and give you full working examples that anyone can use in minutes to play with a live dashboard in action.

Conclusion

A good book gives you theory backed by concrete, practical examples that demonstrate the concepts and emblazon them in the memory for later recall. A great book gives you this material but in a way where you can’t help but look around and start seeing the world differently. I found myself constantly thinking about other businesses and our own through the lens of these nouns and verbs. The biggest benefits to me have been to help disentangle my thinking where there are multiple leaps of faith wrapped upon one another. It’s also helped me clarify how the interplay of the various models and how deeply attaining the holy grail scenarios of negative working capital and 100% gross margin can liberate and propel a business.

Of all the books I’ve read on business and entrepreneurship, if I had to recommend just one it would be a tossup between this one and Innovator’s Solution. My head is spinning with thoughts and I feel like I’ve only retained maybe 30% of the material so I’m inclined to turn to page one and read it again. I’d say towards Eric Ries’s challenge of developing a working theory of entrepreneurship, Plan B comes about as close to a bible as any I’ve found so far.

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