Foundational Events in a Company’s Life

April 12, 2011 Leave a comment

In the life of an organization, it’s easy to reflect back at certain foundational events that either resulted in a new level of organizational development and success, or just the opposite in the case of failure.  But they are “foundational” because their occurrence contributed so significantly in either a positive or negative direction.  While there are numerous important wins or losses that are memorable and significant along the way, especially in a startup, these foundational events are set apart based on their epic significance.

At TrueCar, there have been at least 2 such events over the past 3 years.  The closing of our first Venture round of financing in 2008 and merging with our sister company Zag in 2010 to create TrueCar, Inc.  Well, we just had another one announced Monday that I believe could lead to a tipping point for TrueCar – A partnership with and equity investment from Guthy-Renker, the leading international infomercial producer.  The most notable of their product partnerships is Proactiv, the acne treatment system that has grossed over $800M.  This partnership with GR involves a large equity investment from them that will help fund a massive brand development and advertising campaign for TrueCar.  It speaks to the potential for success that the experts in this process are confident enough to invest capital and put their own skin in the game.

Why is this so significant for us and why now?

First, why now?  The past several years we (Zag & TrueCar) have been quietly and gradually building our product and brand and have been gaining share of automotive retail with little to no marketing spend.  We’ve instead grown through large partnerships with companies like USAA, AAA, Consumer Reports, American Express and others as well as a robust PR machine that has helped build a foundation for the TrueCar brand, both in the automotive industry and with consumers.  But PR and distribution partners will carry you so far, to really scale the brand you must have widespread, household awareness which can be incredibly expensive.  However, in order to spend marketing dollars to acquire customers, there has to be a positive ROI on that investment, meaning for every dollar spent on marketing, more than one dollar must be generated in profit.  That’s a tough equation to make work unless the product engine is converting customers at high rates.  This is an oversimplification, but suffice to say that we now have the engine in place that enables a positive ROI on paid customer acquisition.  So, the time is right.

Second, why is this significant?  A partnership, including investment, with a leading brand-proliferation company like Guthy-Renker enables a mass introduction of TrueCar to consumers that would be almost impossible to achieve otherwise.  It has the potential to make TrueCar a household name among consumers.  It enables us, now that the “product engine” is built, to immediately and rapidly build the TrueCar brand nationally as the new and only way to purchase your next vehicle.  If our conversions (website visitor who purchases through our program) stand up, this will not only be a large cash outflow to pay for the marketing, but also a hugely profitable partnership due to the revenue generated from paying customers who see and respond to the advertising programs.  It’s also significant because this widespread, infomercial approach has never been done before in automotive retail, and we believe auto is ready for this type of innovation.  That could lead to an important first-mover advantage.

Only time will tell whether this will be an epic foundational WIN or LOSS.  But it will certainly be foundational.

What were your “foundational” company events that defined success or failure?

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Goal Setting and My Happiness Project, Part 1

April 11, 2011 Leave a comment

I’ve been thinking a lot lately about the age old question, “Where do I want to be in 5 years, personally & professionally?”  Like I said before, impending fatherhood has a tendency to make you think about all sorts of stuff that is typically “easy” to avoid.  That, in combination with some changes likely in my professional world, is leading me to dig a bit deeper in this area.  Some of my thinking on this subject has also been influenced by a book I recently completed titled The Happiness Project by Gretchen Rubin.  It’s a tedious read, but its a story of her 1-year project to identify and document those things that bring her happiness, joy, satisfaction and engagement in life and also to identify those things that bring anger, guilt, boredom and remorse.  Out of this exercise comes a set, again documented, of resolutions to pursue and principles that guide her actions broken into monthly objectives over a 1-year period.  Gretchen is quick to point out that you don’t have to be unhappy to embark on a Happiness Project, rather its an explicit and written attempt to identify and focus on those things that already bring happiness in your life and to minimize those things that don’t.  I’m at a great place in life right now with a new and wonderful wife, a baby boy on the way, but this seems like an interesting experiment and a way to get committed to some life planning.  In fact, by sharing my plans to do it here, I’m already committed!

I posted recently about training for a difficult cycling event in May that is requiring a disciplined, daily approach to executing against a documented plan in order to successfully achieve the goal.  For this type of fitness or event training, I’m typically very diligent, disciplined and ultimately successful.  Interestingly, I don’t always apply this same goal-oriented approach to other things in life, both personally and professionally.  But is it any different?  Having a goal or objective, no matter what its nature or time frame would likely benefit from this type of planning, right?  When I tell people that I’ve completed an Ironman Triathlon, they often say “I could never do that” and I always respond that ANYONE can do it, not tomorrow or the next day, but six months or a year from now with a detailed roadmap that starts easy, yes you can.

So this post is a setup to several more  in this series –

1. My process for identifying 5-year personal goals

2. My development of a professional plan to achieve 5-year career objectives

3. My Happiness Project

As Yin to my Yang, Renee reminded me after reading a previous post that life shouldn’t only be about planning for the future,  but also living in the moment and enjoying life as it comes.  Yes, brilliant, I agree!  So I’ll commit to “Living in the Moment” being one of my Happiness Project resolutions.

Bear with me, there’s work to do here!

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What Are You Reading?

April 8, 2011 Leave a comment

While I wouldn’t consider myself a voracious reader, I do have a habit of reading 2-3 books concurrently and they are typically of varied content.  I also have a hard time getting through an entire book unless it is very well written and engaging.  For whatever reason, I’m finding the interesting and important components in a lot of the books I’ve read lately could be communicated in 20 pages or less.  I guess I need to find better books… or get a longer attention span.

Anyway, here are the books I’m currently reading –

1. The New Dad’s Survival Guide: Man-to-Man Advice for First-Time Fathers by Scott Mactavish.  As an expecting father, I’m absorbing quite a few books in this category.  This book is laugh-out-loud funny, seriously I blurt out laughing, and easy to read, written in a quasi-military drill sergeant tone with acronyms like NFU (New Family Unit or baby), FPP (Female Parenting Partner) and BCF (Be Cool, Fool).  It’s more humor than useful, but it’s a welcome relief from some of the other father-focused books that are not only serious, but packed with more information that anyone could possibly absorb.

2. The Reason For God:  Belief in an Age of Skepticism by Timothy Keller.  It’s interesting how being a first time expecting parent can affect areas of your life that you haven’t given much thought to lately.  Spirituality and religion, for me, is a case in point.  I grew up in an active Catholic household, which I think provided a good foundation of values, but I’ve never really explored other faiths, faith in general, and challenged that belief system that I grew up in.  It has been easy to put off.  But now I feel some responsibility as a father to do some research, explore my own beliefs and develop a point of view on religion so I can at least provide a foundation for my son until he is old enough to do his own exploration of his beliefs.  This book by Timothy Keller is very good.  He makes an analytical case for God and takes it one step further, for a Christian God.  However, he does it with a balanced approach by acknowledging many common objections to God, then presenting arguments for both viewpoints.  I’m enjoying this read and intend on my next book in this category to be the opposing argument.

3. Good to Great:  Why Some Companies Make the Leap… And Others Don’t by Jim Collins.  This is an annual re-read for me.  I’ve read this book a handful of times, it’s that good.  The leadership principles in this book are so spot on as I’ve had sufficiently varied experiences to see different leadership styles perform just as Jim predicts in his book.  This book keeps me in check.

4. Inside of a Dog:  What Dogs See, Smell and Know by Alexandra Horowitz.  I’m a huge animal lover, particularly of dogs.  I know everyone thinks their dog is the greatest, smartest, most affectionate animal on the plant and I feel the same way about my dog Foster (who passed in 2008).  I really wanted to find some analytical research into the mind of man’s best friend.  Whereas most books on the subject seem to be based on opinion and experience, Alexandra, a behavioral psychologist, actually performs behavioral studies and analysis to get inside the dog.  There are nuggets of interesting facts in this book, but I’m finding it difficult to read.  At the end of the day, how can we really know what our dog is thinking?  For the most important things we long to know about what our pets are thinking, I don’t think she definitively answers them.  Probably one of those books I won’t finish.

So, what are you reading?

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It’s About the Journey

April 7, 2011 Leave a comment

Ever since our cycling trip to France last year (600 miles and 60,000 feet of elevation gain in 9 days), I’ve missed the commitment, preparation and sense of personal accomplishment that training for a strenuous physical event brings.  To prepare for France, I trained for about 6 months, riding 4-5 days per week on a pretty strict schedule of mileage & elevation gain.  As other priorities have now taken over, I’ve not spent much time on my bike, maybe one decent ride per week since we returned from the Tour de France last July.  In fact my fitness in general has taken a back seat.

Recognizing this “training” void in my life for the past 8 months, Renee for my birthday offered to drive the support vehicle so I could ride 2 stages of the upcoming Amgen Tour of California.  This is an 8-stage, pro-cycling tour event that is gaining in popularity and now competes directly with the major European tours, taking place May 15-22 along the California coast.  Amateurs have the ability to ride stages in the morning before the riders begin.

I’ll be riding Stages 6 & 7 of the Tour, the first being a relatively easy time trial through the Santa Ynez wine country outside of Santa Barbara.  The second is the defining stage of the race – Claremont to Mt. Baldy, twice!  It will be a 75 mile stage with over 10,000 feet of elevation gain during the day.  If I had to do it tomorrow, I wouldn’t make it.  That’s what makes the training journey so important and rewarding – there’s no way the objective could be achieved tomorrow, but with a detailed plan, broken into manageable and achievable components, success is all but guaranteed.

So I have roughly 6 weeks to get my cycling legs and have laid out DAILY training objectives between now and May 20.  I know precisely what I have to do tomorrow to prepare, and the next day, such that on May 20 the objective will be achieved.

Many endurance athletes would agree that the training journey, the hours, the pain, the discipline are what makes the actual race or event special.  It’s an adrenaline payoff for a lot of hard work, but many would also agree that training itself is enjoyable, even addictive.  We don’t do the training solely for the event, we do the training because it is rewarding all by itself.  The event or goal is simply what helps us stay on track, an additional motivator.

Why not apply these principles to most things in our lives – professional and personal?  I can see lot’s of opportunities in my own life to be better about setting stretch or aspirational personal goals instead of living life day to day.  Or perhaps being more diligent about my career objectives 2, 3 or 5 years from now to ensure I’m on my DAILY path to get there.

What objectives have you been putting off defining?  Maybe, just maybe the journey to reach them will be as rewarding as reaching the objective itself.

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The Future of Online Gaming

April 6, 2011 Leave a comment

I had the opportunity recently to see a talk by Richard “Skip” Bronson, Chairman of USDG, a business focused on helping states, through a proprietary technology platform, capture tax revenue from the (illegal) gaming activity happening online in the US.  Illegal gaming is a $5B industry and Skip anticipates that market to double if it were to be made legal.

Skip clearly knows this business, he’s been at the top of the gaming and hotel industries for years having partnered on multiple projects with Steve Wynn and sitting on the Board of Starwood Resorts, and he believes the key to unlocking business opportunity in this industry is licensing on a state-by-state basis.  It’s not creating the next best online game as there is already incredible creativity and progress made in that arena, rather it’s partnering with states in a way that allows them to capture tax revenue from all the gaming transactions.

Apparently, many states are listening to USDG’s pitch for a responsible, regulated and legal online gaming system.  Now that 43 states have lotteries, an obvious form of gaming where consideration changes hands, gaming is no longer seen as socially unacceptable or taboo.

And California seems to be leading the way with Bill SB40 which would license and tax Internet gaming and which is under serious consideration.

What really struck me about Skip’s talk is the incredible business opportunities that will open up if and when gaming begins to become legal among the states.  Advertising is a prime example.  Large brands with huge online ad budgets are obviously reticent to advertise on illegal gaming sites, but imagine the value of ad placement and sponsorship to an audience that averages over an HOUR online per session if sites were operating within the law.

What other opportunities do you think legalization of online gaming will uncover?

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What Kind of Leader Are You?

April 4, 2011 1 Comment

There are so many different kinds of leadership & leadership styles.  A broad categorization might include People leadership (management) and Subject Matter leadership (expertise).  Then there are various styles of leadership – inclusive, authoritarian, hands on/off, etc.

I would like to talk about People Leadership in this post, and specifically leadership in a startup or early stage organization where innovation, speed, energy and passionate engagement need to be the life blood of the organization.  My leadership style for direct reports is very much one of inclusion, collaboration, and support to enable people to perform at a high level.  But it all starts with the team composition and quality from both a skills and personality standpoint.  This will be an oversimplification, but I see the “process of people leadership” something like this:

  1. Ensure the individuals on your team are the most skilled at what they do.  I’m specifically talking about pure intellectual horsepower and subject matter expertise.  Every individual that works in my current organization goes through skills testing, both general intellect and functional specific.  There are homework assignments that are evaluated in a panel/presentation setting by a group of the prospective candidates peers and hiring manager.  This is an area I simply won’t compromise.  True story – I interviewed over 100 individuals for a critical VP Analytics/Statistician role I was trying to fill.  The skills test was nearly impossible, taking a consultant 3 months to solve.  Most candidates fell flat, some solved 10% of the problem.  My eventual hire solved the problem and recreated the statistical model, in its entirety, over a weekend.  Find the best no matter how long it takes.  The best team wins, always.
  2. Direct reports must have the right personality and cultural sensibilities to gel with your leadership style and culture you desire to create.  This is really important and I think often overlooked.  Team dynamics and how they operate as a team, not as individuals, will define the success of achieving organizational objectives.  I look for team members that share my philosophies on desired culture and management styles.  This does NOT mean, and this is important, finding “yes” people to agree with you all the time.  Quite the contrary, I explicitly encourage feedback and dissonance to create healthy debate.  The best idea should win, not the strongest personality or the person with the most authority in the room.
  3. Show up credible as a manager, leader and problem solver. I must inspire confidence in my team as a leader.  Have I provided a clear vision for where I am leading them (strategy)?  How do I treat people?  I often participate in even the most technical conversations outside of my experience, there is likely an angle to the problem that has not been considered.  My suggestion:  Inspire your team through your engagement in their work.
  4. Recognize what each individual needs – rewards, support, level of autonomy. Knowing this and responding to it on an individual level I have found will  maximize productivity, engagement and happiness.  I have also found that every individual can be widely different on these requirements.
  5. Become a master at conflict resolution and personality management.  All of us are different and respond differently to varying personalities.  It’s human nature.  I have also found that highly intelligent subject matter experts who are the best at what they do have a high degree of confidence that their way is the right way.  Getting different personalities to work together and facilitating the flow of information & communication in a way that creates a highly effective team environment is a lot of what I do on a daily basis.
  6. Encourage risk taking and let people fail. While I often hear this in organizations, I’ve rarely experienced a real commitment to it.  People may be given a second chance, but often the reputational damage discourages further risk taking.   A culture of innovation through a tolerance for mistakes and failures starts at the top of the organization, plain and simple.
  7. Make sure each individual knows clearly how success will be measured for the organization and for themselves.  This is an important point that I see too often misguided.  By setting rigid, documented objectives for individuals and tying compensation directly to these objectives can often result in undesired behavior, particularly in a startup or early stage organization where the continuous need for flexibility and adjustment for things as core as strategy and business model are paramount.  Don’t get me wrong, I see a need for written objectives and planning, but I also am explicit about how objectives can and will shift along the way and that there is no substitute for close and ongoing communication with direct reports.  I simply don’t get overly dogmatic on this point, especially since there is always a subjective nature to the review process.  A fully objective review process will undoubtedly lead to undesired behavior if there is even the slightest shift in objectives.
  8. When times get tough, real leadership begins.  I’ve been through some tough segments in organizations that I’ve run and you really learn about people when we go into “self-preservation” mode.  More than ever, I try to lead by example during tough times.  I over-communicate.  I really try to treat people with integrity and honesty through the challenging times and I’ve found by doing so it increases people’s tolerance for uncertainty, inspires confidence and increases loyalty.
  9. Don’t be a dick.  Seriously, this is a simple tenant but one I constantly review so as to not abuse the position of authority.  How are you perceived?  I have witnessed “dick” behavior destroy the culture of an organization almost overnight, morale sinks, motivation wanes, and at 6pm every night the place is a ghost town whereas before everyone was passionately working and collaborating long after the sun went down.

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The Need for Rest

March 28, 2011 Leave a comment

Renee and I just finished a weeklong vacation (honeymoon) in Cancun.  It was much needed for both of us and incredibly relaxing and just great for us to have time to connect given our hectic lives.  There was a time when I was terrible about taking time for myself and my family – going multiple years in between any real time off – and I’ll never do it again.

I know there will be those entrepreneurs and early stage veterans who will say that doing early stage work is all consuming and you have to do “whatever it takes” and there simply isn’t the ability to take time off from a startup.

I disagree.  I’ve lived on both sides of this fence and there’s one fundamental truth – there will always be more to do than you can get done.  And I’ve never taken a vacation when the timing was right, it never is.  And I’ve also never taken a vacation where my absence resulted in a catastrophic event for the business.  To the contrary, time off rejuvenates, enhances focus and most important, it’s an explicit pronouncement of your priorities, not just to yourself, but to your family.  I learned my lesson the hard way as a result of all those years without taking time to remind my family of my priorities.

And I’m not suggesting that in a startup you can disappear into the ether for 2 weeks at a time.  When I take vacation, I still check email once per day and respond to any urgent issues.  This frequency still allows me to relax and focus on vacation, not work, for the bulk of my day.  That is simply my personal balance and one that works just fine for Renee too.

I do realize there are exceptions and I also realize that startups require obsessive, compulsive, even paranoid behavior, but not enough of any of these to avoid putting vacation plans on the calendar in advance and not enough to repeatedly cancel vacation time.

So take some time off.  Disconnect if even just a little.  Connect with your family.  It will all be there when you get back.

There’s a great article detailing a well respected VC’s struggle with the same issue “Do More Faster”.

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Airport Security – CLEAR

March 15, 2011 Leave a comment

Today I flew back to LA from Denver and noticed the CLEAR program being marketed heavily in the security line with 4 or 5 kiosks, yet very little traffic going through the CLEAR line itself.  I was there at 5:30am and it looked like largely a leisure crowd going through an already steadily increasing security line.  Perhaps a bit early for the road warrior Monday morning folks.

I couldn’t help thinking that if I lived in Denver this would be the first thing I would do (after purchasing a new set of skis) – enroll in this program if the price point was reasonable, say $200-250 per year.  My experience with DIA is always greeted with long security lines because security is centralized in one location for the entire airport.

Once I actually landed in LA and dug into the research, this is actually a re-brand and launch of the failed Clear program across 18 airports that ended in class action lawsuits and bankruptcy back in 2009.  A new investment and management group has purchased those assets and is attempting to revive the program.  There are only 2 current participating airports (Denver + Orlando) but their presence at DIA security was prominent – multiple kiosks, attendants – you couldn’t miss it.

The program is $179 per year with an additional $50 family plan and this program is completely privately run, using biometric identification, same as before.  I think its a great idea provided there is a large enough ACTUAL time savings from the first class security lines to offset the cost of the program for the target consumer, which I assume is the frequent traveler – who will likely have access to first class security lines.  Perceived benefit I’m not sure gets you there, it’s gotta save time for the business traveler.

I think Denver is a great place to have this program.  Problem is, the only way I’d join the program is if my resident airport participated.  It will take a load of $179 subscriptions to pay for the operation I witnessed today, I’d like to see behind the curtain on those economics.  Particularly for airports where security is NOT centralized, like LAX and dozens of others.  The additional cost of hardware for convenient placement in a distributed airport, with more than 5 disparate security locations, has to quickly add up.  Well, I hope it works out and that LAX is next on the list!  Check ’em out at www.clearme.com

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iPhone is changing my life!

March 11, 2011 Leave a comment

Wow, received my iPhone yesterday after a long unsatisfying union with Blackberry. I was always wary of switching away from the button keyboard since I’m such a heavy email and text user on my mobile device. But here I am on day 2, writing this post on the plane and, by the way, doing so on the airline’s wifi. Try doing that on your Blackberry. The keyboard is actually pretty good due in large part to Apple’s autocorrect technology. The iPhone web experience is captivating especially compared to the unusable interface on the BB Tour. Literally unusable.

And the apps! Some of my favorites:

Dropbox – a must for accessing and syncing all of your files

Yelp – especially if you travel. A great location aware app.

Tripit Pro – for road warriors keeps track of all travel and points and monitors flights real time.

Google – pretty cool picture recognition technology that enables search.

Google voice – read or listen to your voice mail, for free of course.

Nirvino wine and beer ratings – separate apps with huge databases

I have much more to explore but I’m hooked. Here’s a (humorous) good review of how I’m feeling.

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A Great Ride!

March 6, 2011 Leave a comment

I finally had a chance to get out on my bike today after a 2-week hiatus, which is a long time for me.  The combination of work travel and illness has put a real damper on my fitness routine.  My commitment to cycling, running and generally staying in shape is important to me and its taken a back seat lately.  I’m an avid cyclist, it is by far my favorite hobby.  Last year I cycled in France during the Tour de France, an amazing experience I will never forget.  It was a gorgeous day today, 70 degrees and not a cloud to be found.

I did one of my favorite routes today – roughly 50 miles and 5,000 feet of elevation gain over several canyon climbs in the Santa Monica mountain range.  PCH, Topanga, Fernwood, Stunt, Piuma, Saddle Peak.  Being on my bike, alone and suffering, is where I have the largest blocks of time to think.  About work, life, whatever is occupying my energy at the time.  I really enjoy riding alone for this reason.

Today I took a different approach.  I’ve been pretty stressed and preoccupied lately so today I focused my energy on NOT thinking about all the things going on in life.  Rather, I focused on enjoying being outside, my rhythmic breathing, the scenery, getting to the top of the next climb – all the things I’ve been unable to think about over the past few weeks.

It was truly a breath of fresh air.

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