Multivariate Logistics

I think it’s fair to assume at this point that on-demand is generally here to stay. Now, it’s possible and more likely probable that you’ll see a few more companies die off due to unit economics and/or over-aggressive expansion (and definitely consolidation of similar companies), but the general pattern has now been established and certainly the demand for someone else doing something for you will always be there.

As it currently stands though, full value isn’t really being met. We’re still stuck in this unitary view, a one-to-one relationship where a single user is interacting with a single service and a single deliverer of labor. (I know that last part is awkward; I don’t know how to phrase it.) This doesn’t really impact the user all that much apart from surge pricing, but it absolutely impacts the worker, as they are very inefficient relative to opportunity. Let me give you an example.

It’s an average Saturday night, and my lovely fiancee is getting cocktails with her friends. I’m staying in because Alabama/LSU is on, and because the easiest thing in the world to do is nothing. Instead of making myself dinner like a normal adult, I decide to get some Thai food. I send the order out via Postmates, it gets accepted, and the wheels turn.

Now imagine concurrently, someone in the building across the street from me puts in an order from the same restaurant. Or imagine that a worker driving for Uber has a request to take someone two blocks down the road from the Thai place into DUMBO where I live. In a perfect world, whatever dispatch logistic system the driver is using should be able to determine that and allow him or her to double down, since it’s unlikely that the passenger would be all that upset to have the delicious smell of Thai food as their traveling companion.

I assume that all of the logistics of these companies are handled internally and thus, there’s no chance for them to speak to each other. I think that’s a missed opportunity. As these companies get larger and face more competition (and as more labor enters the market), the labor is going to get squeezed as the companies either up their revenue share or decrease the fixed payments. As such, you’ve got an increasing dissatisfaction amongst the labor, which causes them to churn as making a living becomes nearly impossible. Having this multi-variate logistics – potentially served by a third-party which not only means the on-demand service doesn’t have to build/maintain it, but theoretically would increase demand – would make everyone happy.


Going Where The People Are

Today HBO announced that they are canceling Bill Simmons’ “Any Given Wednesday”, his first attempt at establishing himself as a reliable draw outside of the ESPN universe. I can’t say I’m surprised.

No one can ever really doubt that Simmons brought a fresh, new voice to the fray when he started writing his sports columns back in the late 90s. He was on the first wave of writers who grew up not just loving sports but pop culture in general, mixing it all together to simultaneously be entertaining and relevant to a very wide audience. Gone were the old, crotchety writers in the press box; the Internet was a new medium and he accurately foreshadowed the abrupt tonal shift towards the snarky and the irreverent that was to come.

He also fell to the same issues that a lot of guitarists and second fiddles on championship sports teams fall to, which is to say he began to see himself as something larger than the entity in which he was launched. He reasoned that on the basis of Grantland’s success, his fanbase would follow up onto whatever platform he chose. He was wrong.

That’s not to say that he’s suddenly become irrelevant or he won’t have a second act in his career. He’ll simply have to go to where the people are, and not expect the people to come to him. First, that’s just not the way it works anymore, which is why you’ll increasingly see celebrities and other large brands get involved with Facebook Live, Snapchat, and other areas where the community is congregating. Second, an individual creator like Bill Simmons is unlikely to ever create the same kind of brand strength that the platform itself can generate; ultimately they’re not loyal to you, they’re loyal to the platform that supported you and will be around before and after your popularity peaks.

As for ESPN? They may have a host of other issues to struggle with as people cut their cords (although their OTT offerings are exceptional) but they’ll rock solid in one regard: there are easily millions of people around the world who want to be and in fact think they’re the next Bill Simmons. One will emerge, and the cycle will happen all over again.



So I know it’s Wednesday – the sports day – but unfortunately I’m behind with some things I have to do today and therefore I cannot post the long, thoughtful rumination of the sports world that I previous planned. Doh.

Instead, I’ll share with you a quick story that I was reminded of earlier today, when I was setting up alias emails for our customer support to use.

Back at Carnegie Mellon, all of our email addresses were tied to the Andrew file system, which was a super revolutionary enterprise-wide file management system that CMU built in the 1970s that even today I don’t really have my head fully wrapped around. As such, to email me in 1999, you’d have to email and not simply, which caused a lot of problems for parents, friends, and various well-wishers who may not have been as knowledgeable of CMU’s system.

To combat this, you were allowed to create aliases that forwarded the email on as a simple pass-through. The first one I created was simply nmb2@, to solve the obvious problem above. Once we learned however that CMU didn’t protect the namespace or set really any kind of rules on what (or how many!) aliases you could set up, my friends and I had a field day. It basically became a race with other parts of the University, most of which had no idea they could or even how to set up these aliases in the first place.

One of my friends reserved admissions@, which basically meant that he got a ton of overflow mail from prospective applicants, SAT results, and a host of other stuff. Another reserved dining@, and he got tons of requests for various catered lunches and presentations within the university.

Me? I went with housing@, which made me privy to an awful lot of hilarious emails about different mishaps that happened around various dorms as well as the occasional “My roommate used my toothbrush!” kind of stories. The only one we couldn’t get was police@, which in retrospect, was probably better that we didn’t.

(I will say that for anything really serious, involving abuse and the like, it was forwarded on correctly.)

Retrospectively and with the wisdom of age, it’s not quite as funny as it was to us back then because it’s very possible that had an actual email gotten to admissions or to housing to whomever correctly (or if it had just bounced and that person had realized their trivial error), lives could have been permanently changed. But it was for me an example of what happens when you give a lot of leeway to very bored 18 year olds, and it’s sort of the kind of random jackassery you can see all over the Internet today.



Yesterday was the first entry in my new commitment to writing; I hope you enjoyed it. I think I’m going to like the Monday entries the most, because they let me postulate a little bit about current opportunities available in the marketplace for entrepreneurs. The Tuesday one will also be fun, albeit in a different way; it will allow to really think outside of the box and dream up some crazy ass ideas that you would never attempt unless you had a few years and a large trove of someone else’s money.

The first big idea I have requires a bit of exposition. Like almost everyone in the tech world, I was what you could charitably call a nerd growing up and in high school. I’m not saying that from a point of regret or from self-deprecation or anything like that; it’s just the truth and there’s no longer any reason not to be open about it. It wasn’t until college at CMU that I really blossomed into the social and moderately extroverted person I am today. The root of that development is partly due to the demographics of the school and being surrounded by other people with similar interests, career goals, and experiences. Another, perhaps equally large part, is due to the structure in which social life at CMU is set up, with a surprisingly robust Greek life and a host of activities and traditions baked into that experience. It’s fair to say that at just about any other school, it’s unlikely I would have found myself in a fraternity. But I did, and inasmuch as those experiences were the most CMU could do to create a proxy of the prototypical college experience, it ended up a profound effect on my life then and my friendships to this very day.

Now, into the meat of the post: I think the current fraternity system, despite it being an overall net positive for me, is outdated and tangibly useless.

If we take the idea of college at it’s most utilitarian value, we conclude that it’s there to prepare the student for professional life. We can assert that the whole reason why people choose to attend and to pick a course of study is to set themselves up for a long-lasting career in the field that they choose. We all know however that the full potential of that career is not only shaped by domain knowledge, but the development of a professional network and the social skills necessary to succeed in the real world. Given that, we can generally conclude the traditional idea of college is well-suited for the former but very ill-suited to the latter.

The question then becomes, what’s the best way for students to gain those skills? For a minority of the population, they’re self-starters and can do it themselves, hustling their way into internships, conferences, networking events, and a host of other things that allow them to hit the ground running upon graduation day. Those students are few and far between, and if we’re being realistic about how we develop those skills in the majority, the scale of resources required to teach that on an individual level to a student is functionally impossible for a university to take on.

To solve this problem, I look at the opportunity for a third-party organization or club to take on this role, sort of like a finishing school. Play this out with me for a second:

Let’s say I wanted to create a non-profit company called Success, Incorporated. (Or whatever, I didn’t think about the name too much.) This company would be tasked with starting branches at college campuses, merging the social concept and exclusivity of fraternities (only accept the most promising of students, creating a cache of interest) with the utility of exposing those students to business executives, career advice, skill development, and the social intelligence that conventional education doesn’t teach. Keeping it in the tech world, I would start with a campus like CMU and reach out to established alumni executives in the Valley and elsewhere to join the cause for that specific branch of the company. The value prop for them would be the honest chance to help out students who are interested – thereby leveraging the natural altruism of people – and concurrently give them first crack of graduates coming out of CMU – thereby leveraging their pragmatic side. I’m also somewhat convinced that both sides of this would pay money for the opportunity, given the difficult competition for the best young talent (corporate) and the value of having this advantage as an emerging graduate (student).

The perfect implementation of this is figuring out a way to combine the positive things that people report about being in a fraternity – the shared experiences, the leadership development, the philanthropy, and yes, the social life – with all of the advantages that a strong professional network and a course of education in the more intangible aspects of career success can bring you. How it potentially could work out in the real world is beyond me, but it’s fun for this ex-frat boy to think about, and given how many people in the startup ecosystem were also in college fraternities during their undergraduate days, I wouldn’t be surprised at all if there were people who are already working on something similar.



I’ve know I’ve said this before but I’ve generally decided to take a more consistent approach to writing. I haven’t been particularly active on this front; not necessarily due to lack of time or content ideas, but rather I’m simply one of those people who finds it very difficult to do things that I consider to be routine. It’s just not who I am.

But like I said, I’m going to give it another honest shot and to achieve this goal, I’m going to take a page from Fred Wilson and try to form some habits around it. I almost always up eating lunch at my desk, so instead of randomly perusing ESPN, why not take some time and jot down some thoughts, as incomplete as they might be? I have to be fair with myself in this regard and recognize that to achieve the kind of volume I want, I’ll have to not be as perfectionist as I usually am and maybe even adhere to a consistent set of themes for the content. So with that in mind, here’s my first attempt at a consistent structure:

Monday: Realistic Things Someone Should Build
Tuesday: Crazy Ass Ideas
Wednesday: Sports
Thursday: Fly or Die
Friday: Fearless Prognostications

So without further adieu, here is my first shot at forging a routine and writing more, and it’s a semi-realistic thing that someone – not me – should build. (And forgive the choppiness of the segue; they were originally written as two separate posts.)

I’m sure I’m not alone in saying this, but I want this election to be over. I’ve wanted it to be over basically since it started, and I’m incredulous that there could possibly be any undecided voters at this point. Regardless of your politics, I think at this point you’ve generally chosen your side and likely dug your heels in super deep against the opposition. I can’t name really a single positive attribute about the candidate I’m not voting for, and sadly I’m sure there’s a reciprocal feeling among the other half of the population.

One of the more distasteful aspects of the election for me has been the rise of super partisan, extremely misleading echo chamber media. While I don’t doubt a big swath of it is simply opportunistic scumbags exploiting the worst in people, you shouldn’t minimize or ignore the impact it has. It’s simply a matter of fact that this election features two very, very polarizing candidates, and their faults are exacerbated by an ever-present constant news cycle and the rise of easily shareable memes as a means of disseminating political opinion. In this vacuum of nearly infinite content demand, it’s no surprise that this echo chamber has formed, dramatically wounding discourse and the general civility of the electoral process.

Whether you visit Breitbart and their ilk as a check-in to see what the other side says or as a trusted source of unbiased news, you’ll see a pattern form very quickly. “Confident Trump Sprints Into Blue States”. “Border Deluge The Worst We’ve Ever Seen”. “Early Numbers Show Trump On Warpath To Victory”. And on and on it goes.

It’s worth noting at this point that Breitbart, relatively speaking, is much more established and polished than many of the outlets on their ideological side. There’s nothing inherently wrong to speaking of a population you’re self-selecting for and presenting your opinion from that point of view. When it crosses over to something more vicious or blatantly untrue or abusive, that’s where the issues start to rise, and ironically it’s that type of content that are more likely to see on Facebook. The more incredible the headline, the more it gets shared, and you better believe these publishers know it: why else would a headline like “ALERT – WikiLeaks Exposes THIS Shocking Hillary Secret, ARREST HER!” even exist?

It’s a post-fact world, which is sad in and of itself, and the more I see friends and family of mine from back home in Pennsylvania pulled into it, the more I try to figure out what a solution might look like. It’s difficult because on one hand, I don’t want to censor anyone and I certainly don’t want to stop someone from publishing simply because I may ideologically disagree. However, I think it’s reasonable to provide some level of consumer protection against unverified sources, the more cynical operations that are exploiting the more base instincts of partisan voters, the ones who are simply stoking the flame in order to get cheap page views.

The more I think about this problem, the more I get hung up on the idea of “unverified”. It’s an analogous situation to Twitter; if I were to start posting as if I were Penguins goalie Marc-Andre Fleury (And I did as recently as 2009, but that’s a separate post), people might believe me solely on the basis of how I was presenting myself. After all, I *say* I’m Marc-Andre Fleury, why would I be making it up? The simple solution of the verified profile on Twitter mostly solved this problem; people should have no reason to believe that it’s actually Fleury unless the blue check mark appears next to his profile.

This situation also analogous to site verification through SSL/TLS, which provides consumers protection against fraud and ensuring trust in any transaction the user and a third-party involve themselves in. This SSL security is managed in the form of a digital certificate that is managed by a trusted authority, so given that, why isn’t it intrinsically possible to ask the same of publishers? If you are truly a publisher that is operating earnestly then getting verified should be something you’d welcome, for the same reason that public figure welcome the verification process on Twitter.

I’m fully cognizant of course that this concept ultimately is somewhat subjective, in the sense that at some point you’d have to have a human being determining whether or not someone is worthy of this level of verification. Embedded in that subjectivity is the potential for political bias, unwitting censorship, and a whole host of other issues that Twitter itself is trying to grapple with. Still, I think you’d be hard-pressed to say that the state of verification/authority/trust amongst notable voices on Twitter is somehow worse than it is on the open web, and given the ever increasing number of these super-partisan publishers, I think taking a firm approach is probably the right step.


Minima and Maxima

Computing, in the beginning, was all about less. It had to be – the computers were extremely limited, therefore almost all procedures were suited for a singular task with little room for error. Up until the introduction of the GUI, there wasn’t even the idea of multiple processes; you had to finish what you were doing, and therefore for everyone’s sanity, everything was designed with the speed and efficiency of process completion in mind.

In the desktop era, it eventually became all about more. Bigger monitors, more resolution, faster processors; more, more, more. As a result, designers and engineers began to create products that were packed dense with features, stretched to the edge of the screen with functionality for every use case. Sure, there was still a need for hierarchy and an architecture to the options, but they were a secondary concern to the density – why not have it all, if the form factor allowed for it? The Microsoft Office suite is a vestige of this, while more straight killed AOL’s Instant Messenger.

Then the mobile revolution happened, and it kicked off an inexorable revolution. Just as Moore’s law dictates a reduction in size while maintaining power, the reduction of form factor dictates that products eventually get distilled back down to the basics. An great example here is Tinder, which reduces the process of finding a mate to the most basic form imaginable. Or Twitter – 140 characters, bite sized, on the go for the mobile user.

This all leads me to what my subject is, which is chat bots. While the rise of the bots isn’t anywhere close to the revolution that the desktop, Internet, social, mobile epochs have proven to be, it’s certainly something that has caught the imagination of the technology world. And before I get too long-winded, I’m going to tip my hand on them: they’ve got it all wrong.

Let’s say you want to order lunch, and like me, a decent chunk of your time is spent in Slack collaborating with your team and getting into arguments about the proper ranking of Starburst flavors. Lucky for you, Postmates has a command line integration into Slack, and it wants to remedy that ache in your belly.

@postmates tacos near 37 east 28th street, 10036

So let’s stop it there, after the very first command. If you don’t know this already, please understand that handling even that initial request requires an ENORMOUS amount of intelligent, difficult code. First, you have to build the basic language processing to even parse the request. Second, you have to have a repository of locations, in order to determine the vicinity of the request.

Third, now, you have to start making some assumptions. For example, since there’s no scalable way to query in real-time to see if a restaurant is open, Postmates would have to pull that potentially outdated information from somewhere, and then assume that if the request falls within that window, the place is open…assuming of course that since you didn’t specify a delivery window, that you want it immediately, and also assuming the request itself is formatted in a way that parser can understand. Further down the chain, it has to assume that the menu it has saved is correct. And so on, and so on.

But let’s get back to the chat interface of this. Since the interface is reduced down to a very minimal form – unlike a desktop version! – it’s naturally not going to allow for much path deviation or special requests. (Much like the software built before the desktop revolution, of course. But I’m beating it into the ground at this point.) Ask yourself: is it going to be easy to request no beans on your taco? What if you want a hard shell instead of soft? What if you want to tell them to make the steak well-done, to call when they’re downstairs, or that you don’t need a plastic knife because there’s fifteen million at your office already? It’s really no different than wanting to know if the person on Tinder profile has a college degree; the form factor in which it is presented simply doesn’t allow for an effective way to branch out to that level of detail.

To do all of that effectively, you have to overlay so many steps that it kills the very utility it had in the first place. Eventually the user is going to wonder if it’s really worth all of the effort, especially when there are other interfaces for the same task that are likely quicker and easier to use. At a certain point, it’s like tweeting from your Wii. Yeah, you can, but why? Where’s the utility relative to other options?

That’s not to say that I don’t think that chat bots will be useful for certain tasks. Far from it, actually. You just can’t however go into it trying to replicate the functionality that a more robust form factor will allow, which is why I think none have yet made a significant impact. Early mobile development suffered from this problem – trying to mobilize all of their desktop functionality – until people realized that it required a completely different level of thinking. Unfortunately for bot programmers though, a lot of the hardware that phone manufacturers eventually put into their phones to facilitate that creativity (cameras, GPS, accelerometers, etc.) are going to be impossible to integrate into a chat bot.

So going back to my initial example, what can Postmates do in this arena? Through the bot itself, probably not all that much, which is it’s a bit perplexing to see so many companies try. What it could do however, is try to figure out a way to accept a parameter-rich link that is generated from the bot. Maybe something like this:

@postmates tacos near 37 east 28th street, 10036
>Sup Nik, hungry, eh? No worries. There’s six Mexican restaurants within 0.5 miles of your address. The highest reviewed one is Dos Toros.

Now imagine that entire string is a link, that sends a string of parameters into the Postmates app or website. Voila – the discovery aspect is knocked out, and you’re already on step three or four of the process. Dos Toros is preloaded, as is your receiving address, as is the request for tacos, and now you’re on an interface more ideally suited for handling all of the branching that might occur.

But getting back to my point, right now, the people building the bots are getting it all wrong, in the same way that early mobile development was all wrong in trying to “mobilize” desktop functionality. The Apple Watch, for example, doesn’t have the form factor to do much by itself, but it certainly is an effective and streamlined interface for your phone; this is a good start. The sooner chat bot developers turn the corner and start thinking of their tools as interfaces and/or completely new paradigms, the better.


The High Dive

I love the Olympics. Part of it is because of the spectacle and part of it is because I’m an acute track and field nerd, but I have to say that another significant part of it is that reinforces a lot of things that I’ve come to learn about life. I know it’s trite – and certainly heavily represented in the soft-focus human interest stories conventional TV coverage is throwing at me – but I find that sports can teach a lot of lessons, particularly about understanding other people.

Here’s an example. (And before you ask, this example has nothing to do with me. It’s just an example.)

Let’s all agree that startups are incredibly difficult. They’re mostly long, lonely strokes through the pool, punctuated by periodic gasps of air. You launched your first product? Awesome! Enjoy the traffic that the buzz of newness creates, because in two weeks you’re going to feel even further behind than when you started.

So what do you do? You grind and you grind and you grind and you grind. In a way, you’re declaring war: war against free time, war against other priorities, war against personal relationships, and war against your own emotions. Take it away, Thomas Powers:

The logic of war seems to be if the belligerent can fight, he will fight. That leaders will not surrender until surrender is academic. How is a national leader to explain the sacrifice of so much for nothing?

Next time you’re watching the Olympics – or any sport, really – watch very closely when the goals are scored, when the time is up. The events are almost always zero-sum, but I tend to almost always focus on the team on the wrong end of the match. They’re disconsolate, but I think most people misunderstand the nature of that: they’re not upset about what might have been, they’re upset because they let somebody down.

(And before someone asks about individual sports, let me stop you there. No man is an island; there are coaches, parents, and fans.)

This was in full-force the other day in the Olympics, when I was – of all the things I could have been doing for that hour – watching synchronized diving. One of the divers for Brazil had badly mangled his dive; he knew it the second he hit the water. When he got out of the pool, he was on the verge of tears; not for himself, but rather for letting his teammate down. You could see it so plainly on his face, even more so when his teammate tried in vain to console him. It was compelling to watch in the most heartbreaking of ways.

Looping this back to startups, this fear of letting your team down is one of the strongest and most pure virtues of early-stage startups. When the going is tough, more often than not what keeps the team coming back is the unspoken contract they have each other. The founders and the executives that do the best job of fostering that spirit are the ones who are truly worth backing, and it’s not an accident – it’s a gift, and that’s why certain founders get backed again and again.

This connection also illustrates a critical difference between a large company and a startup. Larger companies are simply unable to foster that spirit, essentially making every team member a mercenary unit, unwilling to fight through the muck. Lots of employee loyalty these days at Groupon, right? Timely to recent news, it also illustrates one of the problems that hit Yahoo! hard, particularly in their acqui-hire phase; when you bring teams on for their talent, it is next to impossible to keep that team together if their putative leader – the dreamer who is most likely to leave and try to start something new – leaves. The connection is no longer there.

Interestingly enough, the founders who are most successful fostering that spirit – at least from my anecdotal experience – seem to all have significant experience in some high-level team sport. But that is another topic for another day.


The Extinction Of The Dinosaur

This is probably going to be long. Just a heads up.

So if you’re here, you’re probably interested in technology or are related to me, and since the former population is much larger than the latter it’s probably fair to assume that you’re familiar with the concept of disruption. It’s certainly a buzzword in the technology sector and a rather hated one at that, but that doesn’t render it meaningless: it refers to an inevitable entropic decline, fueled equally by advances in technology and the fat, bloated intransigence of the incumbent.

You can follow the pattern of disruption across almost all sectors; Uber for taxis, AirBNB for hotels, Warby Parker for glasses. While those are all interesting cases, they’re slightly less interesting to me because I don’t work with them or think about them on a daily basis, other than perhaps the nifty pair of Ramsays I use to make sure I don’t fall down the stairs. What I do think about is media, partly as a byproduct of being a rabid consumer of content like every modern person, and partly due to sageness of Will Porteous, who I wrote about earlier as being forward-thinking enough to know immediately that my little sports analytics company wasn’t just a pile of algorithms, but rather a media company that simply served data (and derivations of) as content.

Much, of course, has been written about the disruption of the media industry. And really, you almost don’t even need it to read about it to understand it just from intuition – how do you think record labels are doing these days? How about your local newspaper? Both are prime examples of legacy industries who either didn’t grasp, didn’t care, or wildly underestimated the effect that the move to a digital world would have on their businesses. And why would they? They controlled their little fiefdom with impunity, with nary a threat in sight, for years and years and years.

Of course, with no threats and no reason to stay thin, well, those pigs got fat. And hogs get slaughtered.

(As an aside, that in and of itself isn’t really a cause for celebration, even though it tends to be held as one within the technology industry. Even if we accept the damage as collateral as industries evolve and technologies shift, there’s still a very real impact felt in all of those people who were miles away from the decision making that ended up losing their jobs. It wasn’t their fault that their management got fat, but they bore the brunt of it to a disproportionate degree and that’s not something to feel great about.)

What’s most likely unique about the media industry relative to some of the others I mentioned is that the scale is so large and technology shift is such a living thing that the disruption never really stops. You might say for example that the move to digital killed the concept of the printed magazine and the local newspaper; you’d be right. But it’s also true that the digital magazines that killed the print ones are slowly getting killed themselves, as since as the barrier to entry is asymptotic to zero, supply on the media side is essentially infinite with little replacement cost between choices. This naturally causes the value of programmatic and remnant advertising space to plummet, thereby forcing only two viable business models onto the marketplace:

  1. premium content sitting behind a subscription wall that people are willing to pay for, such as the Wall Street Journal or the New York Times. Very few publications have the brand or the content to pull this off, and even then, the battle shifts to fighting fraud, piracy, and a host of other problems.
  2. or incredibly cheap, often user-generated and/or syndicated mass-appeal content presented in slideshow form. This survives almost completely on the basis of costing extremely little to produce, and costing even less to propagate thanks to the exploitation of the curiosity gap and other dark patterns to generate social sharing.

Want to play the middle? You’re toast. Unless you’re commanding a massive audience, you won’t be able to generate enough ad revenue as programmatic rates plummet to keep the lights on. Even then, the goal of “commanding a massive audience” fundamentally misses the point that #1 dictates: going after quantity as a primary goal implies that you are creating content for everyone, which is another way of saying that you’re creating it for no one. Beyond that, even if you decide to eschew programmatic and go for other forms of monetization, your users will be on to you quick: native advertising is disastrous for buy-side ROI, even if you ignore the user experience issues of passing off advertising as editorial. There just aren’t that many ways to keep fooling your users to click on ads without them learning how to ignore it, hating you, or simply installing AdBlock and telling you where to stick it.

What’s interesting to me is that you’re seeing this exact same extinction happen in the TV world as well. Remember when TLC used to be The Learning Channel, and Bravo showed simulcasts of philharmonic orchestras? Those simply didn’t pull in enough viewers, which didn’t draw in enough advertising revenue, which couldn’t subsidize the continued broadcast. So what happened? It bifurcated, just like digital media. Premium services like HBO flourished, doubling-down on quality (The Sopranos, The Wire, Game Of Thrones, etc.) to create a virtuous cycle of prosperity. Niche TV channels turned incredibly broad, going to airing mass appeal content (TLC airing Honey Boo Boo, History Channel becoming all about aliens and conspiracy theories) cynically designed to drum up publicity because at least ensured their survival, brain cells and their somewhat earnest roots be damned. After all, reality TV is functionally equivalent to user-generated, low-quality content, right? Neither has the labor cost of hiring expensive writers, and therefore it’s designed specifically to be more competitive in the marketplace because it combines a much wider audience with a much lesser cost.

While I’m not around it enough nor am I of the right pay scale to consider how to fix the TV problem, I do have a couple of thoughts on how to solve the media problem on the digital side.

The first, and most important step I believe to having a sustainable media business is taking ownership of your delivery stack. No one media company is exactly like another; each one is serving different users with different styles of content, syndicated via different platforms and so on and so on. I can’t think of a wildly successful new media company that doesn’t have their own stack; in fact, it’s probably easier to think of a company like BuzzFeed (SuperPoster) or Vox/SB Nation (Chorus) as a technology company first and a media company second. They do this because they want to attack the problem their way, building the tools they need to address problems as they come up.

In the case of numberFire, we wanted an easy way to import data from our algorithms into our articles. Seems pretty simple, right? You’d be surprised. Now extend that to what a seemingly simple site like BuzzFeed has to do: it has to test multiple headlines in real-time, it has to dynamically generate a homepage based on what you’re likely to enjoy, it has to constantly monitor the content to search for signals that an article might be going viral, and so on and so on. Think any out of the box CMS can do that? Of course not. The magic of BuzzFeed isn’t just that they command such a wide audience, it’s that they make it look so much easier than it really is. Technology has a way of doing that.

(Somewhat ironically, I’m writing this right now on WordPress, which while it’s fine for a personal blog, is an awful choice for any serious media business. The fact that so many run off of WordPress VIP is borderline comical, but hey, I’m a software engineer first so perhaps that more of a reflection on me than anything else.)

The second step is to create diversified revenue streams. This one seems kind of obvious – sort of like, “Hey, have good content in the first place” – but it’s strangely overlooked. Let’s think about it another way: retail businesses are getting into the content game because it allows them to onboard people into their experience for very cheap. They’re getting people familiar with the brand by performing the digital equivalent of showing up to the town hall where everyone is congregated, walking people the front door of the store and inviting them inside. They’re moving the audience, and once they’re relatively captive, monetizing them either directly through some sale conversion, or indirectly through brand awareness.

For the media business, this means taking that exact same audience – your audience – and figuring out different ways of drawing value. The most obvious way, of course, is advertising revenue. But let’s move it beyond that. Is there something in particular that you do better than anyone else, that people might show some willingness to pay for? Build a SaaS business around that. CBInsights does this amazingly well. (So does numberFire.) What if you’ve built a strong, credible brand and developed a reputation for being a tastemaker? Put on a conference like TechCrunch. Remember all that work you did above in taking ownership of your delivery stack? Great! I bet I know a lot of people who might like to white-label that as their own.

The third step is to stay ahead, or failing that, at least stay current. In line with the first step, investing in technology to stay ahead of the trends will put you at an enormous advantage. Again, that’s obvious but you shouldn’t underestimate that power. Even if you don’t have a VC whispering in your ear about what’s coming next, it’s not all that difficult if you simply pay it some attention. You would have known to build with mobile in mind a few years ago, you would have known to consider social as a key distribution strategy years before that. You would already be distributing via AMP and in cards and be thinking about what the eventual move to VR might look like. Proactive is infinitely better than reactive, even if the negative ROI in the short-term can seem untenable.

It’s worth saying so far as a conclusion: none of this is easy. If it were, you wouldn’t see so many dead companies on the road. The scary part is that it’s most likely going to get worse before it gets better, since other than a few instance that I noted, very few traditional media companies have taken these steps in advance and thus, they’re trying to play catch up while simultaneously having their hands tied by the same entropy and poor management that got them in the mess in the first place.

What I suppose I’m ultimately saying is that it’s ugly out there, and I think that’s going to get even more ugly soon. Transformative changes in an industry – particularly those forced by adoption of new technologies – rarely happen without some serious carnage. Part of that story is the root of what makes following technology compelling, while another part of that story is unfortunately also the root of a lot of social unrest regarding jobs, the economy, and the future.

Does this mean if I were an investor that I’d forgo any investment in media? Probably not. It’s often said that a slow down in the market doesn’t really affect highly investable companies, but instead it simply raises the bar to a point where the questionable ones have a harder time. People still need to be educated and entertained, to be informed and to find community, to lose themselves in music and in writing. The market is there, but only if the new entrants think of themselves as technology companies first, and media companies second.


They’re Firing You

Like many people my age, I have a special place in my heart for Yahoo!, so much so that I moved across the country to work there shortly after graduating from CMU in 2005. It was a brand on a downward trend even then, but I knew that they were attempting to take a cue from Apple in the form of doubling down on talented visual and interaction designers. I also knew that despite the all of the difficulty they were facing as a brand, they still commanded a large audience and thus maybe it was some young, hungry blood was exactly what they needed.

While the design half of my theory absolutely came true, the rest didn’t. The company moved way too slowly for me to consider staying relative to other opportunities (note to young software engineers: the startup game is very much about the proper management of opportunity cost) and the inability for them to make any real development in regards to obvious market trends (mobile, social, etc.) showed very clearly and very quickly to me that their leadership was inept. I quit in 2007, and most of the talented designers I worked with quit sometime shortly thereafter.

Fast forward to 2015, and the story is the same: Yahoo! has missed opportunity after opportunity, failing to capitalize on obvious trends. Marissa Mayer, who I was extremely bullish about when she was hired, certainly appears on her way out. I have some years of experience under my belt since then and when I was reading about Mayer’s tribulations, something rather obvious hit me:

When employees quit, they’re recommending that the CEO be fired. They’re saying (in their actions, of course) that they don’t trust leadership, that they don’t believe in the direction of the company, and that the opportunity upside is higher somewhere else because of it. People leave en masse because of bad leadership; they will run through walls and stay through tremendous difficulty because of good leadership. I’ve seen both happen up close. Even in the absence of everything else, just look at the turnover Yahoo! has had since Mayer has taken over, and look at it in comparison to their peers. That tells you all you need to know; the people who are most directly impacted by her leadership, her employees, have made their feelings loud and clear.

It’s a pretty simple concept, and I don’t really know why it never codified with me until now. I’m happy to say that no one has ever quit numberFire.


Owning The Experience

Everyone loves convenience and everyone loves efficiency: that’s why you’ve seen on-demand services that leverage the impulsivity of consumers with exact geolocation and logistics become such a large growth sector. Nothing groundbreaking there, right?

But one of the weird things that happens to a company when they start to play in this space is that you start to lose control of the experience. There has been about a million articles about Uber and the differentiation between employees and independent contractors, so while I don’t necessarily belabor that point, it’s important to note how that differentiation affects customer service and perception .

Let’s use this as an example:

I run a small Thai restaurant in the East Village called Nik’s Larb Hut. I’m on Seamless, but since my delivery staff are fully paid employees of my restaurant, I need to be intelligent about how they’re resourced and therefore, I set a relatively small delivery radius because I need to make sure they’re able to deliver at least three orders per hour by bike.

But since my larb is so good and because we lucked into a mention in an Eater article, we’re now getting a lot of requests by phone for deliveries outside of our radius. It doesn’t make economic sense for us to expand our radius, so we begin to mention to interested callers that there are a host of companies that can provide this delivery service, such as Postmates and Caviar.

This works out well for us until a rainy Saturday, where Postmates gets swamped with orders as everyone seems to be staying in for the night. We get the food into the hands of the couriers without much issue – we control this experience and we’re experts at it, since it’s no different than having a busy night inside of the restaurant – but once the couriers receive it, complications from the weather as well as the volume of requests severely delay the delivery of the food. To make matters worse, some couriers begin to double and triple concurrent deliveries, trying to make a higher return off of the demand-based surge pricing. The delays frustrate the customers as well as negatively impact the quality of the delicious larb; as such, we start to receive a plethora of complaints over the phone and eventually posted on Yelp and Foursquare.

See what happened there? Once the food left out hands, the experience left our control, even though in the mind of the consumer, it never did. Even if the Postmates courier was at fault, the blame and negative impact gets assigned the restaurant, damaging our brand.

Now, I don’t know enough specifically about Postmates to know whether or not this sort of situation can be avoided, but it’s certainly a dangerous thing for an industry like food, where things like Yelp reviews have a very tangible impact on business. Uber can say all they want about their drivers aren’t employees, but the more news articles there are about drivers harassing passengers and/or driving unsafely, the worse it’s going to be – and there’s no effective way of managing it.

The biggest lesson here for the zero CEOs and/or startup people who are reading my blog is that it’s very critical to understand the full gamut of experience from creation to delivery, and recognize that you ultimately are responsible for anything with your name on it, even if it gets handed off.