Managing failure, Sales tactics, Industry dynamics in '23-'24 and more #0022

14/12/2023

INTERVIEWS

Lenny Rachitsky, Author of Lenny’s Newsletter interviews Katie Dill, Head of Design at Stripe, Paul Adams, Chief Product Officer at Intercom, Tom Conrad, Chief Executive Officer at Zero Longevity Science, Sri Batchu, Growth Advisor at Ramp,  Jiaona Zhang, SVP of Product at Webflow, Gina Gotthilf, Co-founder and COO at Latitud, Maggie Crowley, VP Product at Toast on how setbacks and challenges contribute to personal and professional growth in “Failure“

• Katie Dill on Building Trust and Adapting Leadership:

  • "... I walked into the room and there were five of them seated around the table... they went on taking turns quietly reading from the papers all the things that they saw that I was doing wrong... I hadn't earned their trust... I wasn’t bringing the team along with me... I heard them out... I took from that to then immediately shift how I was operating... really a key part in building trust was to listen... because you can inflict change on people but if you want to do it with them, you really know trust is the key element there."

• Paul Adams on Handling Public Speaking Challenges:

  • "I was at Facebook... I did a lot of talks... Facebook had a keynote slot at Cannes... I was three or four minutes into the talk and I just froze... I couldn't remember what I was supposed to say... I had some version of a panic attack... I walked off stage... I was still miked up... cursed... started laughing... I managed to turn around, walked back out... you have to go with it with these things... you have to adapt."

• Tom Conrad on pets.com and Market Timing:

  • "One of the things that happened was that there were three kind of overfunded pet e-commerce sites... we all raised an excessive $50 million... we all thought it was a zero sum game... it became this kind of unwinable arms race... timing is really important... like you [...] probably can’t make it work when 80% of the country on the Internet is still on dialup... it’s really, really early."

• Shri Raghavan on Conclusive Failure in Experiments:

  • "You want to create a culture where people aren't afraid to fail... if you have a hypothesis that you're testing just throw all of the possible tactics and resources that you think would move that needle because you can always cost rationalize later if it works."

• Gina Gotthilf on Resilience and Career Longevity:

  • "I thought my career was over... I was miserable... between all of those highlights [...] most of us have a lot of B moments every day, every week, every month... and it's easy to think that things are just not going to work out for us because we're in one of those be moments if we don't recognize them as moments."

Turner Novak, Investor at Banana Capital, interviews Kevin Liu, Co-founder and CEO of Metronome on the intricacies of software pricing, and the challenges of building and scaling a startup in “Pricing Lessons from the Fastest Growing Companies with Kevin Liu, Co-founder and CEO of Metronome”

• On Aligning Pricing with Market Norms:

  • "Pricing and packaging is contextual[...] Your packaging and your pricing has to be compelling given that comparison and it can't be too divergent from market norms or else a customer is going to look at that and get kind of like this weird feeling that it doesn't align with what everyone else is doing."

• On Keeping Pricing Understandable:

  • "It's really easy to come up with a list of 100 things you want your pricing and packaging to optimize for [...] but it's much harder to pair that down to the handful that you actually need. So the most common mistake that we see companies making is actually just releasing pricing and packaging that's too complex and having to roll it all the way back because the customer doesn't understand it."

• On Focusing on the Most Critical Goals:

  • "I think it's important to take a step back with Scott and always align on what we think the most important [...] being brutally honest about if we strip away like every single other thing that we're doing and we're left with only accomplishing one thing in this next period of time next month next quarter whatever it is what is that one thing."

SALES

Harry Stebbings, Founder of 20VC, interviews Steve Goldberg, Chief Revenue Officer at Salesloft, exploring how to build relationships with prospects, have tough conversations and more in "20Sales: How to Close Sales When Selling to CFOs,[...] with Steve Goldberg, CRO @ Salesloft"

• Building Relationships with Prospects:

  • "You always have to understand everybody's business motivation and their personal motivation and more about what motivates them in work and outside of work... once you understand that, you understand more about them more about their personal life, their professional life you really can help just relate to them and what they're trying to do..."

• Integrating Customer Success Early in the Sales Process:

  • "You have to bring the CS team into the pre-sales process... the customer can feel comfortable with the customer journey and how you're going to make them successful... you bring them into the pre-sales process so the customer can feel comfortable with the customer journey and how you're going to make them successful..."

• Revenue Operations as a Key Component:

  • "I think revue Ops is probably the most valuable role in company and you're going to start to see the evolution of revops be moving into the cro world..."

• Rigorous Interview and Hiring Process for Sales:

  • "What we do in our interview process... we'll spend um two to three hours with you and we'll have you walk us through your life [...] say you had a coach and you were a quarterback and you decided 'hey I'm going to go be a receiver,' well walk me through how'd you make that decision..."

• Handling Tough Conversations and Decisive Actions:

  • "You can't be afraid to have a tough conversation... if you don't have it then somebody else will... or you just won't get to the objectives you gotta... you got to leave it on the field..."

STATE OF THE INDUSTRY

Adam Fishman, growth advisor and investor on the strategic missteps and market dynamics that led to the shift in funding environment, and challenges faced by startups in 2023, and what we can expect in 2024 in “2023 in the Rearview Mirror“

• Historical Context:

  • "Over the last ~decade there was a boom in startup funding. As has been well established this was likely the result of the embrace of the Zero Interest Rate Phenomenon (ZIRP) which continued long-after the financial crises of 2008 and 2020 [...] For an extended period of time it was significantly easier to raise money than it is now. Money was a renewable resource and plowing it into increasingly risky and earlier-stage startups seemed like a great idea."

• Mistakes Made Due to Abundant Capital:

  • "With an influx of relatively cheap capital, and a push for growth at all costs (because capital was cheap and renewable), companies shifted their weighting heavily towards exploration. They then went further overweight towards the scale of that exploration—investing in larger teams much sooner than they might otherwise have on each of these exploration areas."

• Neglecting Unit Economics:

  • "Somewhat related is that companies lost sight of healthy unit economics along the way. When capital was cheap we didn’t have to do more with less. Instead, we did more with more; or in some cases less with more. A lot of companies funneled that excess capital into customer acquisition in the form of paid growth."

• Strategic Shifts Post-2023:

  • "In an effort to rightsize the ship a lot of companies have laid off hundreds or thousands (or tens of thousands) of people over the past 18 months... From a strategic perspective we’ve seen most companies swing the pendulum back to weighting exploit much more heavily than explore."

• Refocusing on Core Business and Growth Fundamentals:

  • "A lot more companies are starting to take the advice of Chris Zook and James Allen who wrote Profiting from the Core... This means a return to the fundamentals of growth – how to retain customers, how to acquire customers and how to appropriately monetize them."

• Outlook for 2024:

  • "As to where we go from here entering 2024 I’m excited and hopeful to see a few changes on the horizon: A renewed focus on building products that people actually want, enjoy and need. Helping customers build healthy habits with your products. Lean into more authentic, useful and cost-effective growth loops... Strike the right balance of explore vs. exploit."

OPPORTUNITY

Cowboy Ventures, a seed-focused VC, highlights the significant demographic shift towards an aging population and to explores the resulting opportunities for entrepreneurs in “The Future is Graying: Tech Opportunities for the Aging Landscape“

• Demographic Shift and Its Implications:

  • "One in six Americans is now 65 or older — and this demographic has grown 38% in the past decade, vs 2% growth of people under 65. Growth of the 65+ population is accelerating — there will be 50% more by 2050. These figures [...] underscore the pressing need for our society to adapt."

• Evolving Needs of an Aging Society:

  • "Stereotypes about older adults being frail and resistant to technology are increasingly outdated as retirees are more active and use tech throughout more of their adult lives. The growing tech-savvy and dynamic aging population is a near greenfield for new solutions in fintech, healthcare, real estate, and longevity sectors."

• The Great Wealth Transfer and Personalized Wealth Management:

  • "The Great Wealth Transfer, involving $78.3tn of the nation’s $140tn held by Boomers, is reshaping wealth management. As younger consumers and more women (who often outlive men) become decision-makers, AI will play a key role in hyper-personalizing wealth management. By leveraging financial and behavioral data, it aims to optimize returns and address the unique financial needs of individuals."

• Consumer Spending and Activities of Retirees:

  • "Americans aged 65 and older account for the largest and growing share of consumer spending. As they enter retirement, they have less debt, the most home equity, and are the least susceptible to economic shocks, making them a more consistent consumer. Yet, consumer tech innovation has predominantly targeted Millennials and Gen Z, leaving a gap for the aging population."

• Potential for Technological Innovation in Aging Tech:

  • "Demographics, economic and regulatory shifts combined with an increasing appetite for technologies create the perfect storm for technological innovation. Customer acquisition continues to be a significant hurdle in this space. However, as this age group becomes progressively tech-savvy and more focus is placed on this demographic, we believe this problem is something that can be solved."

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