Unicorns vs Donkeys: Let’s Do the Math

Abhas Gupta writes about the impotance of the ratio of lifetime customer value to cost of customer acquisition – and what it means for startups on Medium:

Like Newton’s laws of gravity or momentum, most tech startups (see exceptions below*) who sell directly to their customers — both enterprises and consumers — must eventually obey the Fundamental Law of Growth: LTV/CAC > 3. There’s a lot of nuance as to why — a discussion that is better suited for a semester-long class than a blog post — but suffice to say that the LTV/CAC ratio speaks to a startup’s revenue trajectory, capital needs, and in turn, how much “irrational exuberance” is demanded of its investors. The lower the LTV/CAC ratio, the less efficient a company is at deploying capital and the more money it needs to fuel growth; conversely, the higher the LTV/CAC ratio, the more efficient the company is and thus the more value it creates for the same amount of capital. Though this can be derived, many before me have empirically observed that 3x is roughly the threshold needed to build big, sustainable businesses.

Read Gupta’s apply this analysis to startups like HelloFresh, Evernote, Oscar, and ZocDoc: Unicorns vs. Donkeys: Your Handy Guide to Distinguishing Who’s Who

Featured image from Flickr user Cathering/rumpleteaser.

Lucidworks CEO Will Hayes and Clef BD Head Darrell Jones III on Why Diversity Starts at Home

Lucidworks CEO Will Hayes interviews Clef’s head of biz dev, Darrell Jones III about how individuals can make a lasting impact on youth and breed inclusivity in the organization from the ground up – and why Oakland is poised to be the Atlanta of the west coast – in this snippet, Hayes ask Jones about the common tech habit of hiding behind meritocracy:

“When I hear people talk about meritocracy… I question whose history they’ve been reading, whose life they’ve looked into and how objective that really is. You can’t expect children growing up on welfare with no access to education and mentors to be able to compete. For every thousand kids, you have one Barack Obama. You will have one Jackie Robinson. But far and away, the odds are not in that favor. That is privilege. When 50 out of 70 privileged kids do well and only 1 out of 70 kids here do well, I don’t want to talk about how the other 69 should have been better. I was a bright kid and when I was in the inner city of Chicago, I was surrounded by plenty of other bright kids. I’m here now and a lot of those equally intelligent kids, who had similar family structures — if not better because I had a single parent — don’t have the same outcomes. You can’t look me in the eye and tell me that’s meritocracy.”

Full inteview on Forbes.com: Why Diversity Starts at Home

The Top Five Things You Should Be Working On

Habitry co-founder Vanessa Naylon helps you preempt all your pre-New Years habit shaming:

“When you know you need to make a change, the number of choices and “should”s in the world can overwhelm you. It can feel difficult to know what exactly to try next. Let’s talk about the top five things you should be working on. But…

“There’s no list here, because you haven’t written it yet.

“Below you won’t find twenty things to do when you wake up or the habits of successful CEOs. (Why is “meditate” always on these lists? People love telling each other to meditate.) There’s no universal list for making you your best you. In the next three minutes, you’re going to create that list for yourself.

“First, don’t trip on other people’s habits.

“Other people’s ideas are cool for getting started, but you’ll waste energy and money if you choose habits that aren’t right for you. …

“Start with something you won’t discard in hard times: start with what matters to you.”

Read the full post on Habitry’s blog: The Only Habits That Matter

Dooce Walks Away: Why The Queen of Mommybloggers Stopped

From the XOXO 2015 conference, alpha queen mommyblogger Heather Armstrong talks about her 14 years of success and tribulations as a blogger and how the death of the banner ad and the rise of sponsored content led to her decision to exit the space:

For the last 14 years, Heather Armstrong shared her life online with honesty and wit—work and marriage, raising two daughters, struggles with depression and parenthood—earning her a massive audience. But it took a uniquely modern emotional and physical toll, contributing to her decision to walk away from full-time blogging earlier this year. Recorded in September 2015 at XOXO, an experimental festival celebrating independently produced art and technology in Portland, Oregon. For more, visit http://xoxofest.com.

LinkedIn Expands Blogging Platform to All English-Speaking Users

Previously US-only, LinkedIn has expanded their blogging platform to include all English-speaking users.

The professional network expanded its publishing tool late Wednesday, granting long-form publishing power to more than 130 million English-speaking LinkedIn members outside the United States, according to LinkedIn’s Head of Content Ryan Roslansky.

From their blog:

Each week, members publish more than 40,000 posts on average. Posting on LinkedIn is a powerful way for members to underscore their expertise in their respective fields, extend their professional reputations beyond LinkedIn, and have valuable conversations with the largest group of engaged professionals ever assembled.

Venturebeat:

With many other channels available on the Web for networking, LinkedIn has been careful not to become stagnant and follow the likes of Bebo down the path of social networking irrelevance. By opening up its platform to more user-generated content, it’s looking to help drive engagement and encourage people to spend more time with the service. More eyeballs means more advertising dollars, after all.

How Pulp Paperbacks Changed Publishing

The New Yorker looks at how pulp fiction changed the economics of book publishing:

“Instead of relying on book wholesalers—”jobbers”—who distributed to bookstores, de Graff worked through magazine distributors. They handled paperbacks the same way they handled magazines: every so often, they emptied the racks and installed a fresh supply.

Pocket books were priced to sell for twenty-five cents. De Graff is supposed to have come up with that figure after paying a quarter at a toll booth. No one, he concluded, misses a quarter. Penguins sold for sixpence: Lane believed that his books should not cost more than a pack of cigarettes. This meant that people could spot a book they had always meant to read, or a book with an enticing cover, and pay for it with spare change.

This stuff was not trying to pass itself off as serious literature. It was a deliberately down-market product, comic books for grownups—pulp fiction.

The paperback presented the publishing industry with a dilemma. Many people in the business, whether they actually read books or not, believed that they should be packaged as upmarket commodities, cultural goods for people looking for something superior to mass entertainments like Hollywood movies and, after 1950, television. “Read a good book” is a phrase that has the ring of virtue. It implies that what is, after all, just another form of distraction is more than that. It recommends taking some private time away from the world to immerse yourself in a mode of enjoyment and edification that belongs to an ancient and distinguished tradition.

This marketing philosophy may have reflected the fear that, if books competed directly with the movies, the movies would win. Whatever the thinking, Pocket Books and its progeny defied it. De Graff packaged books as just another form of distraction, and one completely compatible with everyday life. He imagined people reading books on the way to work, during the lunch hour, standing in line at the bank—exactly the way that millions of people listen to music through their earbuds today.”

Full article Pulp’s Big Moment: How Emily Brontë met Mickey Spillane.

5 Ways to Increase Reading Comprehension

From a discussion about increasing read comprehension:

  • “Read for meaning rather than sound. Reading without vocalizing has a lot in common with listening to someone speak. When someone speaks, you hear the words, but you only hear them in connection with whatever thoughts and ideas the speaker is trying to convey. The same is true of reading without vocalizing: You read words for meaning, not sound. You see the word on the page and respond to its meaning without the intermediary step of hearing the word’s sound. You don’t read the words as words — you read units of meaning (like ideas, thoughts, and descriptions) whose building blocks happen to be words.
  • Try to perceive the words rather than see them. Imagine that each word is a symbol (not a sound) that conveys a meaning.
  • Turn off your ears. Pretend your ears have a volume control and turn it to the mute setting.
  • Widen your field of vision. By taking in more words on a line, you force yourself to read more words at a time, and this helps prevent vocalization.
  • Identify the thought units in sentences, not the words, and read thought unit by thought unit rather than word by word.”

Read many more tips in the discussion: How do I stop internally vocalizing words as I read them to speed up comprehension of text in books?

Brand Voice Is Inherently Inauthentic

Cogent point from a Metafilter discussion of the Twitter account @brandssayingbae: (bae is slang for ‘my dear’ or ‘my boo’ and is an acronym for ‘before anyone else’)

“This is one of the many things about marketing that I find so stupid and so baffling. There’s so much talk in the industry about “authenticity”, yet the entire premise of the enterprise is inherently inauthentic. When you craft a made-up “persona” and “voice” through hours of painstaking statistical research, creepy data mining, customer profiling, spreadsheets, meetings, 60-page Word documents, and multiple rounds of review and debate and focus-grouping? When you pay some employee to play-act on social media as an anthropomorphized version of the ‘brand identity’ you thusly constructed? That’s the fuckin’ opposite of authentic. That’s like sociopath-level inauthenticity.

 

Inside Stephen Colbert’s Creative Process

Master satirist Stephen Colbert describes how he runs his (now retired) Colbert Report each day:

“I say hello to the guest. I ask them the if they’ve seen the show. Sometimes they have, sometimes they haven’t. I always say the same thing, ‘I do the show in character. He’s an idiot. He’s willfully ignorant of what you know and care about. Please honestly disabuse me of my ignorance and we’ll have a great time.'”

Full interview on Slate‘s ‘Working’ series with David Plotz:

Screencap from one of Stephen’s funniest moments where he broke character.