Madonna and the Engineering of Success

I'm currently in Santa Monica for some work travel, which has given me some unique and valuable time to hop out of my daily routine. This being my first time to Santa Monica, I was and am blown away at how nice the waterfront is, to the extent that I've found myself each day excusing myself to take a walk along the beach just to take it all in.

On my walk today, I was listening to Pandora, mostly because I'm at the age where I can no longer reasonably keep up with modern music, and thus I'm beginning to exhaust the music I'm already familiar with. I was in an upbeat mood, so I chose the 1980s as the guide, letting Pandora do the rest as I upvoted and downvoted.

Three or four songs in: Madonna, "Dress You Up".

Now, I'm not a Madonna fan, insofar as I don't see her as any different than nearly any other artist of that period, apart from an acknowledgement of her success and unique brashness in achieving it. I'm not an expert in her music by any stretch of the imagination. As I listened to the song - and it's actually quite good, in that 1980s neon sort of way - I noticed several obvious things.

First, the percussion in the song is full of syncopated hand claps on the off-beat, a signature drum pattern popularized by then-superstar Prince. It is literally all over his music at the time.

Second, the countermelody to the synthesizer is a funky rhythm guitar line very similar in style to the one in the chorus and bridge of Michael Jackson's "Billie Jean". It's a line melodic enough to be a hook on it's own, but played against the synthesizer and mechanical drum beat, it works even more effectively.

This pattern of "inspiration" follows throughout the song: background vocals straight out of any 1960s Motown hit, a guitar solo straight of out any 1970s-era FM radio rock tune, and a basic Cm-Bf-G7 chord structure, an extremely common progression in pop music.

This is not to say that Madonna or Nile Rodgers of Chic, who actually wrote and produced the song are thieves. If anything, they show a very fundamental understanding of the molecules of success. This is structurally no different than a successful startup that capitalizes on new markets with an X of Y product strategy, or one that simply looks historically at the traits of successful companies and emulates them.

We certainly took the same approach at numberFire. We modeled our initial seed pitch deck after Next Big Sound. We modeled our initial front-end engineering structure off of Hunch. We algorithmically turned structured data into editorial content like Automated Insights, leveraged user-generated content like Bleacher Report, and bolstered a consumer-facing media site with a high LTV subscription business model like ESPN Insider.

There's a common maxim that good artists copy, and that great artists steal. While obviously the maxim is meant to be flippant and provocative, it glosses over what is really the key message: stealing is a fruitless endeavor if you don't have the capacity to understand what is valuable to steal. You have to be able to internally curate good ideas from bad.

Nile Rodgers clearly not only knew what elements to build from, but he intuitively knew how they would work together in concert and not as a disparate soup of independent elements. I think a lot of companies, particularly when they're battling uphill, either don't have that intuition or simply override it in a panic to figure things out as quickly as possible. That is a certain spiral to failure.

Are there companies (and musicians!) who ignore everything, and completely do it themselves, free of any inspiration, be it organic or curated? Sure. But they're far fewer than you would think, and I certainly don't hold it against any one who has the good sense to be a careful study of the past in order to create a more promising future.

Lines and Equality

Everything hates flying, simply because it's a miserable experience in just about every way. Everything in the flying ecosystem is mismanaged and seemingly optimized for customer dissatisfaction, from opaque/cartel pricing to inefficient security to disorganized boarding. It is truly unique in the world of business so far as it's intersection of importance and awfulness.

Of course, all of these problems and frustrations are known to everyone, but what's the real alternative? Without competing options, industries stagnate and ignore their customer. Just as the taxi commission about that.

But you know all of this already; you didn't need to click on this entry to hear me bitch about flying. No, I actually wanted talk about something else, and that's lines. And no, not lines in the startups or lines in a slang sense, but literal lines. Queues.

While I was frustratedly waiting to board thanks to Delta's frankly bizarre and disorganized way of doing it, I noticed that for the most part, everyone waiting for the flight queued up nicely when ultimately asked. Everyone sort of shrugged, and realized that they were in it together to some extent. And since the plane was there, waiting, everyone would get on and therefore another two or three minutes spent looking at a phone or impatiently tapping a foot would ultimately be fine. - just another annoyance in an experience full of them.

It hit me that lines are the ultimate leveler - everyone waits, regardless of who they are. You might be broken up into different lines by zones at the airport or by colors at Whole Foods or simply by the services you want, but the line is the line. Everyone waits.

This made me think of something I once saw at Six Flags, where you could pay extra to literally always hop to the front of the line. The more I thought about it, the more I concluded that while that kind of upsell has significant utility, the damage it ultimately does from an experience perspective isn't really worth it. The utility derived from the subset of people who buy it is never going to, at least in mind, even out the negative utility felt by the majority who didn't buy it and think it's complete bullshit that the product exists in the first place.

Not every startup is going to have an equivalent of this (and certainly any sports connection I might try to make her would be fairly belabored at best), but it's an easy lesson: make your product equally accessible and enjoyable for everyone. No one likes to feel left out.

I also just realized that I never talked about the people who ignore the line altogether and try to cut in at the amorphous merge point , tacitly make the argument that they are too good for the line and too special to be treated equally. Unless you're an aforementioned cab driver, there's a pretty clear label for you: asshole. And you're probably enough of one to buy that upsell package from Six Flags. There's probably a strong correlation there, don't you think?


One of the biggest problems I have with a lot of data-related businesses is that they only provide half of the value that I think they should. While it is indeed valuable for a company to help you look at your information and dissect it into smaller and smaller chunks, to me it's even more valuable for that company to provide timely recommendations based on that data.

I said it an awful lot in VC pitches, to myriad levels of success: what's already happened will never be as interesting or valuable as what's going to happen.

Take something like Google Analytics as an example. numberFire has been set up on Google Analytics since the day it was first put online. It can tell me what piece of content was the most successful, how long people on Android phones stay on the site, and any number of vaguely useful things. What it doesn't tell me however is that the ideal headline length is seven words, or when an article is showing the initial signals of virality.

This is an equivalency to the frustration that I had when I founded numberFire in the first place. Far too many sports analysts were just regurgitating the information, as if all situations were apples to apples (is playing the Seahawks the same as playing the Browns? Hmm..) and broad comparisons were predictive of future events. By using machine learning and various other data mining techniques, we took wide swaths of sports data and turned it into something predictive, because having predictive knowledge on future events is a very valuable piece of information to have.

I would love a dashboard that would tell me how many page views I can expect, just on the basis of the content matter and the headline. I would love to know when an article is about to go viral, so that I can highlight it on social media and re-order the items on my homepage to reflect that. I would love know on which channels and what times I should double my marketing efforts, suggesting keywords that are undervalued in the market. I don't really see why that's not possible, given what Google Analytics, Heap, KissMetrics, and everything else in our reporting stack knows.

And what's even more strange about it is that everyone seems to be creating companies that harness the information, creating largely fungible businesses to what is already out there - I should know, because I get about fifteen cold emails from them daily. No one is creating a business that simply ingests that information, and serves you the recommendation at the precise moment. It's a missed opportunity.


Bubbles, Irony, and Terrelle Pryor

I spent a large chunk of last week at Google, participating in a design sprint with some members of their UX research team and eating far too much free food. During one of those gorging sessions, I struck up a conversion with a partner at Google Capital and like almost any discussion about startups these days, the conversation quickly turned to discussion of bubbles.

While her specific thoughts on bubbles weren't all that provocative or divergent from mainstream - and thus not really notable for the purposes of this post - what really struck me is something she said about the companies that were pitching her: although Google Capital is a growth-stage investment fund for proven businesses, a lot of the entrepreneurs that she met with really didn't have much understanding of the fundamental metrics of their business.

This floored me. How could that be?

It struck me later in the day that there is an irony embedded in growth, particularly the kind of growth that will ultimately enable you to reach a size where you need growth-stage capital. That kind of explosive growth is such a fortuitous rocket ship that it tricks you into one, thinking that growth is possible forever and further, and two, thinking that stoking that growth is the only important thing.

Now obviously the former is false and the latter is debatable but both wash out at the same point: eventually that growth vector you've found becomes saturated. When it does, you may have a real problem, particularly if you've spent zero time on understanding your acquisition costs, mapping it across channels, building a proper reporting infrastructure, and getting an iron-clad picture of your LTVs. There's only so many times you can raise money on the pitch of "Well, we've got a shit ton of users!".

The irony here is that so many seed and Series A-level companies have those basic unit economics down cold. They have to. If you've got a very finite amount of capital to work with, you better believe you're maximizing the return of every dollar spent. They might not be able to get over the Series A hump because they don't have the explosive growth I previously mentioned, but I believe 100% that most of these companies know their fundamentals better. My friend at Google Capital will never see them though, since a majority of them will never find the product-market fit to grow large and grow quickly enough to eventually need investment in her criteria.

The sports analogue here is Terrelle Pryor, one of the most talented high school athletes to come out of Pennsylvania and QB at Ohio State, the Oakland Raiders, and elsewhere. Pryor was such an athletic freak that he simply destroyed the competition at the high school and college level, using his innate gifts to dominate without properly learning the fundamentals of the position. This was his ultimate downfall; once he got to the NFL, his throwing mechanics and decision-making were far below acceptable standards.

Compare that to any number of QBs who came to the table with far less natural gifts, but instead focused their energy on learning as much as possible in the film room, grinding away in the gym, slaving away on the practice field - only to find out that what was once a rather average set of natural talents was now a rocket ship when paired with a clear understanding of what it takes to succeed.

The Importance Of Optics

My co-worker Adam often gets anxious when I'm scheduled to speak at a conference, because I'm known to a certain extent for being very outspoken with my opinions. As anyone who has every gone to a conference can tell you, most conferences are pretty close-to-the-vest, with speakers not really saying all that much, very similar to how football coaches say very little in post-game press conferences. I like to think my style of being somewhat brash and irreverent is a breath of fresh air, but to him, it's nothing but a headache.

This is an issue for him because as the owner of all of our business relationships, he sometimes has to deal with the fallout of someone who was turned off by something I said about them or the industry or what have you. I can't help it; I'm a passionate guy. But I get it. He's the one who has to clean up after me, and that is frustrating, particularly when the mess is totally and utterly avoidable.

Anyway, today there was a vaguely viral story going around about Martin Shkreli and how he raised prices on a necessary and ultimately life-saving medication by over 5,400% after purchasing the rights to distribute and market it.

Now, I'm far from a bio-tech expert and pretty much anything I say on the subject would be glib and ignorant, so I'll punt and simply say that if the story is as cut-and-dry as the New York Times seems to think, then he's a scumbag and that's pretty much that. What's more interesting to me is his Twitter, where he's recently vacillated between on a defensive and flippant series of responses and another, different series of severe conspicuous consumption, thereby doubling down on the public's enmity.

There is certainly something to be said for the Internet rage washing machine that is the status quo: it's a page-view driven world where outrage is stoked, aggregated, and provided with gasoline. A good example of this is the story of Pax Dickinson, the former CTO of Business Insider, who had a couple of out-of-context, yet patently offensive tweets buried in his history spiraled into his public excoriation and even more public firing. The tweets in question for him were undoubtedly offensive, but the swiftness of the public response necessitated getting some things wrong, such as misunderstanding context and making perhaps unfair generalizations about him based on a thin-slice of evidence.

But it's giving Martin way too much of a pass to chalk up his current problems on that. Even if we ignore that his Wikipedia page seems to indicate a history of ethical and legal problems or this Gawker article which lays out a history of SEC violations quite damningly, he doesn't seem to realize that it's his own arrogant, indifferent responses to legitimate criticism that is compounding the issue. If his motives were really as misconstrued as he would like us to believe, would he act the way he has, the equivalent of all of the former baseball players, cyclists, and track stars who have indignantly pounded the table declaring their steroid-related innocence, only to have to eat their words later? Probably not.

I firmly believe that you learn more about a leader and really, anyone by looking at how they handle themselves in times of crisis. Many do extremely well. I like to think that I do OK, with a personal growth area related to being more open, communicative, and seeking of help instead of just loading it onto my back. Martin here seems to be doing everything wrong, particularly the public-facing optics of the situation and those optics are incredibly important - even if he really is being portrayed unfairly, no one would ever know because no one likes to defend an asshole.

But defend him they will - his investors, his PR people, everything, all over a mess that could have been handled much better every step of the way. That's probably how Adam feels whenever I run my mouth.

An Introduction

I'll be the first to admit it - I'm not really a blogging person. Or at least, I haven't been, historically. It hasn't been for lack of ideas, or even interest; it's more that I've simply always convinced myself that I didn't have time and further, it wouldn't be of interest to anyone.

I'm not really convinced of the former just yet - although Fred Wilson, who is exponentially busier than me, posts every day - but on the later, I've come around to thinking that whether or not my thoughts are of our interest to anyone is sort of beyond the point. Getting in the habit of elucidating the ideas that rattle around in my brain can only be a good thing, but if you do happen to be reading this, I'm glad you're here.

Anyway, the introduction: I'm Nik. I'm a lot of things: a son, a brother, a boyfriend, a Yinzer, a founder and CEO, a veteran of multiple successful startups and even an acquisition. I'm also not a lot of things that I wish to be; I plan to talk about that a lot, and I think I'll start on my very next entry.