Friday Sabbatical

Posted on by Ryan H Vaughn

Whatever you’re doing this Friday, I invite you to take a sabbatical, pause, and check in with yourself. Look inward to see what it feels like to be you right now. Really just look, without ideas or assumptions. Breathe, and consider that that cacophony of sensations you’re feeling is always there, even though most of the time you just ignore it.

Here are five things that stuck with me this week:

1. Firstly, I must say I’m impressed with the speed of response from our federal government. After I and others called out how the CARES act was unfairly singling out VC backed companies to be the only type of small business ineligible for government relief programs, a week later, it looks like they’re going to fix it. Our government gets a bad wrap for being slow and bureaucratic, justifiably so in many respects, but there’s nothing like an existential threat to our economy to get everyone on the same side. Kudos to all involved here. (Note that PE owned companies are still ineligible)

2. Sports! 4. Life during COVID has been hard for a number of reasons, but a big one in my opinion is the lack of sports. Since I was a small child I have never been far from a ball, whether physical or on TV, to such an extent that most people I spend time with have become sports fans in one capacity or another by proxy, and it’s been many years since March when I last played or watched any. So I was unreasonably excited to see that various NBA players would be competing in a 2K tournament, and that the Big3 would be staging a Corona 3-on-3 basketball tournament/reality show, in an effort to fill that gap. I try not to think about how this compares to the actual real live NBA, and simply enjoy that something is on offer these days.

3. This time in our history is similar to other times in that there is no shortage of lists of things we should all be doing better. It says something about our society that short, punchy lists about how to be more [insert generally desired attribute here] are among the most popular bits of content consumed by the human animal. We’ve all outsourced the structure and focus of our personal values to the masses (I wrote about how this has applied to startups yesterday), and ended up in an unwinnable race to transform ourselves into an ideal that we didn’t choose. It’s clear to me that that’s a silly way to spend our lives, but it’s also tough to articulate a compelling alternative, submerged as we all are in the 21st Century American zeitgeist; even coming up with your own ideal is done from within, and based upon, inherited cultural values. Tim Ferris wrote an article this week quoting Martha Graham, one of the most influential dance choreographers of the 20th century, in which she articulated well a real alternative to simply trying to be a better version of who everyone else wants to be, and I loved it. Life is too brief, weird and magical to try to be someone else’s definition of great.

“There is a vitality, a life force, an energy, a quickening that is translated through you into action, and because there is only one of you in all of time, this expression is unique. And if you block it, it will never exist through any other medium and it will be lost. The world will not have it. It is not your business to determine how good it is nor how valuable nor how it compares with other expressions. It is your business to keep it yours clearly and directly, to keep the channel open.”

Martha Graham

3. Speaking of which, although our experiences differ, it seems as though most of the world right now is living, or risks falling into, a purgatory state in which one simply bides one’s time waiting for whatever is going to happen out of all this to happen, after which one will get to the business of getting on with things. I hear some version of this story a lot. Ryan Holiday wrote about Alive Time vs Dead Time back in 2019, but and it remains relevant today.
The thing is, this, right now, with all its mess and uncertainty, this is your life. It maybe seems as though it’s not because it’s different from what you’re used to. It seems as though it’s wrong somehow, but it’s not. It’s the only time we have, right now, and if we are waiting for something we’re missing our lives. This time is uncertain, but no more or less so than the rest of life. It only seems different because we’re all being confronted with how little control we have over things, all at once, in a way that we can’t ignore and pretend otherwise. We can’t even pretend that guy over there has control, as it’s finally clear that nobody does. But the thing is, nobody ever has, despite what we’ve told ourselves. There are many valid reactions to learning we don’t control our lives, and about the only one that doesn’t work is passively sitting back in “dead time,” waiting to regain that feeling of control. Instead, lean into this crisis, embrace your lack of control, and live! Make a ruckus, make a business, make mistakes, but for heaven’s sake GO!

5. It’s amazing to me that people are still ignoring, bending or otherwise disregarding all the guidelines to stay at home. Perhaps it wasn’t stated catchily enough? If that’s the case for you, if what you’re really looking for is someone to make the instructions memorable for you, and then you’ll stay home, well, then this guy’ll be glad to oblige.

(Also, does anyone have any paper towels? Hit me up.)

As always, please let me know what you think in the comments, or if you stumble upon something excellent I should be aware of let me know that as well.

Don’t settle for success, prioritize purpose over giving the people what they want

Posted on by Ryan H Vaughn

The Lean Startup methodology has proven to be the most effective and efficient way to build a successful company. But if it’s your only North-star, you risk optimizing yourself into building a company your customers like, but about which you could care less.

The Lean Startup methodology, first codified by Eric Reis and now in wide use by the vast majority of fast growing companies in the US, is the scientific method applied to startups. It’s lessons are many and profound, but first among them is the virtue of building a company by first transforming it into a series of assumptions by a process of abstraction, and then systematically validating those assumptions against actual customer behavior, BEFORE ever actually building anything (to whatever degree that’s possible).

This process saved us $999,400 on an idea I once had.

It was an app that would geofence communication and media sharing into a single experience available to people attending high school sports events. Instead of building that app immediately, we figured the riskiest assumption was that people would actually use it, so we tested that by marketing a Twitter hashtag as a proxy (we thought that if we could get people to communicate and share on Twitter, that would indicate that there might be an appetite for a standalone app dedicated to high schools). After a grand total of 6 tweets over 5 events we killed the app idea, having spent $600 instead of the $100,000+ we might have spent if we built the app on a hunch, only to find out people didn’t want it.

It’s examples like these that have earned the Lean Startup methodology its status as the de facto best way to build a startup. But like so many things, it can be taken too far. Lean Startup enables you to optimize your business for what customers ACTUALLY want, rather than what you think they want. But as potential customers guide you to the business most likely to succeed, you can find yourself losing the spark that made you want to build your initial idea in the first place.

And you’ll need that spark for what comes next.

Customers, on average, want average stuff. That’s why the concept of a bell curve is so pervasive in every industry. If you optimize for what most people want, you’ll find out that they want something pretty close to what they already have, maybe with one little tweak. So if customer feedback is the only thing guiding your business, in the effort to optimize for success you may end up building yet another me-too app in a competitive market.

You didn’t set out to build another me-too app. You set out to change the world.

I’ve spoken with founders who started out passionately chasing an important idea — solutions to climate change, PTSD for veterans, homelessness — only to pivot to more palatable, generic solutions after learning through customer development that the market for their revolutions was weak or immature. And if sacrificing the soul of your company to ensure its success sounds like a fair trade, there’s no guarantee that even that will work, because it turns out you need that soul to build your company.

The greater the distance between the business you’re building and the one you are passionate about, the less resilience you will have to weather the inevitable storms (tempests/hurricanes/tornadoes/gale-force winds, whatever you like) that come with building a company. You need to want it so badly, way worse than your customers ever will, to succeed. So you can counterintuitively optimize your business toward your customers at the cost of the resiliency which is also a prerequisite for success.

At the end of the day, successful companies require both a market in need of a solution, as well as a founder with an unreasonable passion for building that solution. You won’t have that unreasonable passion if you pivot to something that doesn’t inspire you, even if customers want it.

The answer, so far as it looks to me, is to lean into customer validation and Lean Startup as hard as you can, but only at the right time, and only with appropriate constraints.

For example:

  1. Define why you want to start a company
    1. Is it just about building a successful business?
      1. If so, no problem, but maybe stop listening to me.
    2. Or is it about making an impact in the world?
      1. If so, be really clear on the impact that you want to make, so you don’t lose it along the way. Having that crystal clear definition of why you’re doing this will be critical when you’re putting yourself through all kinds of necessary hell.
  2. Setup constraints around whatever it is that really lights you up, and commit to not going beyond them, even if that’s what customers want
    1. For example, if you’re trying to save the world, commit to only building a business that you are confident will drive humans to be more sustainable, even if what customers tell you they want is to look at new dance videos
  3. Then run a Lean Startup process within those constraints

The smartest businesses leverage lean startup to bring all the power of the scientific method to building companies. There’s a reason that science has eaten the rest of the world. It works. Bringing scientific process to startups enables founders to build their companies with an efficiency not otherwise possible, by surfacing customer desires & feedback early in the process while you still have time to pivot.

But pivots change businesses. Mostly for the better, for sure, but if not done consciously with each pivot you risk losing the spark that made the business worthy to build in the first place. You risk building the business people want, but one you don’t care about.

Protect your spark at all costs, even if your customers don’t yet understand. Building a company is an opportunity to change the world for the better. Don’t let the masses convince you to settle.

Supporting Local Restaurants during COVID-19

Posted on by Ryan H Vaughn

We went outside as a family the other day, a Saturday. We’d been locked in the house for a week straight, my six sojourns outside our block by far the most in the family, and the kids were driving us crazy. I had a matchbox car hurled at my head the evening before, our three year old finally deciding to give up all pretense of obeisance, and we’d decided we needed to get out of the house. 

That week prior was a whirlwind of emotions and change. The outside world was by degrees falling apart and going to be ok in two weeks, depending on the combination of my mood and whatever input I’d consumed, while the crisis in our household revolved around two issues: (1) the macro, as in how would we as a society with our fearless leader at the helm make the decision between millions of lives lost to disease on one hand and millions of lives lost to poverty on the other hand (so far outside the realm of our control, this topic was easier to discuss objectively because nobody in our house was on the hook for it), and (2) the micro, as in what did we as a company and we as a family need to do to weather the sudden elimination of the American economy.

The micro was harder. At work, our company’s executive team was cycling between developing a new strategic plan for the “new-normal”, starting to implement said plan, and then developing a new plan with the next daily news briefing, while at home Laura and I had cut expenses past the threshold of “comfortable” and into the realm of “possible,” at which point we were able to sustain the idea that we had somehow done enough. So I carried a sense of fragile solidity as I pulled our Chrysler van out of the driveway. I generally felt On Top of Things, even as the world was falling apart. 

We couldn’t go to the bounce house, obviously, and museums, restaurants, retail stores, friends houses and every other place we typically took the kids to kill a weekend morning were also off limits, but Laura had learned that a couple of our favorite restaurants were serving takeout so in the interest of helping out those worst affected by the crisis we had organized the trip around three separate restaurants-come-takeout-joints. Laura and our oldest played eye-spy for most of the drive downtown.

I took a detour down College Avenue, driving by the kids’ closed school before making our way down Monroe, driving alongside the river. Laura told the kids maybe tomorrow, when it was warmer, we’d do one of dad’s favorite things and walk along the river. I used to do that walk almost every day, as our office is (was?) right next to the river.

Even looking for it, it was jarring to see the neon OPEN sign on the door of the bakery, the lights on and a placard outside inviting us to come in. There were even a few people inside. Every other retail window on the block was dark. We pulled up to the curb. I normally parked in a lot off to the side with loosely monitored “residents only” parking signs, but figured given the circumstances who would care? I tossed the keys on the seat behind me to leave the car running while I went inside.

Over a year before, a friend’s mom had died near Christmas. She was in her fifties when she passed, unexpectedly, and they had been close. Shortly after it happened, I remember talking to her and inadvertently mentioning moms in a way that implied everyone at the table had one. It got silent and, realizing what I’d done, I looked over to her. On her face was the kind of raw pain and vulnerability usually reserved for your bedroom pillow, which transitioned by degrees to a sort of defiant resilience, determination and even anger–at the event certainly but also at being suddenly open and vulnerable in public–and then finally into a placid and wistful smile on an otherwise blank face, at which point she said “it’s ok, don’t worry about it.” I watched that specific sequence play out on the faces of the five staff members of the bakery when I walked in the door, at the conclusion of which a woman I’d exchanged pleasantries with during hundreds of previous visits said with her blank face, “Hi Ryan, how are you?” 

I told her I was fine. It was clear we were both more comfortable talking about bread. I bought a loaf of sourdough, and watched her select the loaf from the back shelf with a pastry napkin and inadvertently brush her bare finger on the crust. I pushed it out of my mind. When she returned to the counter I asked also if I might purchase a hundred-dollar gift card. She paused, a complicated flash in her eyes, and then said “thank you, yes you may.” While she got me my gift card, I asked the barista how he was doing. He took a breath and smiled, “we’ve laid off half our staff, but we can survive on 60% sales now so we should be ok,” he said. “At least until they shut us down entirely.” I said something woefully inadequate, took my gift card, and left. 

“I imagine you saw what I did,” I said when I got back in the van, thinking that Laura must have seen the alert for the $106 loaf of bread come across her phone. She nodded. I turned away, heat rushing to my eyes as the boys in back asked if they could have a piece of bread. Laura told them it was for lunch, and then asked me what happened. My explanation couldn’t quite capture what had happened, tears welling under my eyes we pulled away from the curb.  The boys asked for bread again.

After a drive we pulled up to the market. Laura handed me a discarded candy wrapper with which I covered my finger as I pushed the button and took the entrance ticket. We parked right by the door, next to the only other car in the lot, a Prius. The door that went straight to the deli had a sign on it saying it would be indefinitely locked, and to use the main entrance. Thus entering the building down a ways, I walked past rows of empty shelves that used to be a bakery, a bare space on the floor that was a spice store, and a coffee shop which, while deserted, looked like they would be back tomorrow, before reaching the deli, which in comparison looked surprisingly normal. I reviewed the cheeses displayed in front of the counter, and meandered to the wine rack where I immediately saw three bottles of Il Follo displayed, one of which I reached for before I saw the sign politely instructing me to have the staff handle all purchases. Returning to the counter, I asked the man behind the counter to select his favorite snacking cheese and an accompanying salami which, along with the Il Follo, he bagged. He put on blue hospital gloves and asked me for my credit card, apologizing that they didn’t accept Apple Pay (a statement with newfound gravity). I asked about them, how they were doing, considering. “Surprisingly well,” he said with a smile. “Our bar is closed, but the deli has been doing better than we thought.” They were five people in a market staffed with 20 across various stores. I looked around and failed to find another customer. I smiled and said something intended to be encouraging and left.

As we pulled out of the parking lot, delicately inserting the ticket without touching the machine, we decided we would grab a smoothie for the kids from a store we both liked, and swing by a restaurant I frequented for breakfast to pick up a few of the take-out lunches they had posted on Facebook. Laura instructed me to get a single smoothie, split into two cups each half-full in the way of experienced parents. I nodded and smiled. 

We pulled up to the curb and peered at the smoothie store. The lights were out and there was a white paper sign on the door. We sat in silence for a beat, then pulled the van away from the curb to go get lunch, glad the boys apparently hadn’t heard us discussing smoothies. 

After a drive, we pulled up to the restaurant and parked a safe distance from the bus stop that we decided was probably still active. The restaurant had been a landmark of Grand Rapids until its proprietor passed two years prior, after which time it transitioned into a delightful and less obscenely busy restaurant/deli which I much preferred. They had outstanding breakfast, and the servers never blinked at my frequent visits to just order coffee with my laptop (intermittent fasting being a thing I tried intermittently). Anyway, I always tipped as if I’d ordered food. 

That day, I walked into the deli-side and saw my normal server behind the counter. The lights were off in the restaurant-side of the suite, and my usual table by the window was conspicuously bare, like all the others. Tupperware filled half of the shelves in the deli, and raw vegetables had been placed on tables around the perimeter of the room, blocking benches where patrons once sat. I briefly caught the eye of the server before she busied herself with Other Things. I put my phone to my ear and listed the available tupperwares to Laura as she sat with the kids back in the car. She instructed me to get a couple soups, a couple sandwiches, and a pastry that Laura and I had agreed was the best in the city. I hung up, walked over to the server behind the counter, and reported Laura’s order. She grabbed the tupperwares, and with a flat tone apologized that their pastry chef was not in due to “lack of demand.” There were tears in her eyes.

I assured her it was no problem and asked that she pass along my compliments to him when she saw him. “Her,” she said, entering prices for our lunches on the screen. “I’ll tell her.”  Of course, I said.

While typing prices into the screen, she reported that they had laid off most of their staff, and that she expected to be laid off soon. She said the owner (pointing behind her at a bearded man in an apron) was simply going on as normal, but that they all fully expected to be shut down any day by the state government in an effort to curb the spread of the disease. She explained that they were trying to sell off the rest of their ingredients so that things didn’t go to waste when they were forced to close their doors. I purchased another $100 gift card. She thanked me but did not smile.

On our way home that Saturday, as Laura and the kids eye-spied bridges and grass and trees, I kept replaying that encounter, wishing that I would have also bought a cabbage or zucchini, or maybe more tupperware. Or something.

Governor Gretchen Whitmer issued an Executive Order asking all customers to stay home the following Tuesday, socially distancing each of us from each other and confining us to our own problems. Settling in to our new life indoors, managing two kids with tons of energy and a full time job in a confined space, at some point I forgot where I put the gift cards.

If you enjoyed this labor of love, please subscribe, like, share, or let me know your thoughts in the comments. Thanks for reading! — Ryan

Friday Sabbatical

Posted on by Ryan H Vaughn

Whatever you’re doing this Friday, I hereby invite you to take a mini-sabbatical from it. Check in with yourself. Feel your breath, the sensations of sitting, or standing, the contact between your body and the world. Notice what’s going on without trying to influence or change it, and simply feel what it is to be alive. This, right now, including everything even COVID, is your life. Be here, just for a second.

The above is way more important than the below.

That said, there are five things below which I think are also pretty important (even one request of my readers), so I invite you to please enjoy:

1. There’s a sense that the world is disintegrating. That everything that was once solid and reliable — life, liberty and the pursuit of happiness, say? — is now falling apart at the seams. This well and truly sucks. This week I refreshed one of my favorite books on the topic: When Things Fall Apart, by Pema Chodron. She articulates beautifully the fundamental reality that things are always falling apart, and our peace is reliant solely on us embracing that fact. This feeling of disintegration is usually a solitary one, so it’s truly unique (and maybe important) that this time, everyone in the world is confronting the reality of disintegration together. The world is dying all around us. And the world will continue afterward.

2. Speaking of, COVID feels like one of those moments in history with a Before and an After. We know what the world was like Before, and here are experts from all over the spectrum predicting what life looks like in their field, After. I hold out hope that the last one is prescient, as I think it makes life much more raw, visceral and ultimately worth living.
And, if you’ve read Yuval Noah Harari’s work, do yourself a favor and read his latest essay, an analysis on the bridge between Before and After, and the two decisions that citizens of America are already making that will reshape our society after COVID (whether we’re aware of it or not).

3. In 1970, Milton Friedman said “the sole purpose of a business is to generate profits for its shareholders.” Based on current events this can now be understood to be demonstrably not true (if it wasn’t already), as business leaders across the globe are stepping up in what effectively amounts to a wartime effort to combat the virus, putting people’s wellbeing at par with or above their own profitability. A personal mentor of mine, founder of Cascade Engineering Fred Keller, who even in peacetime operates by a more complete set of rules than most companies, urges business leaders not to waste what we’re learning through this crisis.

4. The world is changing, and people are feeling tremendous pain, both physically and economically. No matter who you are, you can help.
PHYSICAL: Godspeed to the heroes in the healthcare field right now, some of whom I speak with personally. Even if you’re not in that field, Tim Ferriss has an excellent episode on his podcast about how you can help.
ECONOMICAL: This one is hitting more people than anything right now, as 1% of the US filed for unemployment in the last week alone. There are a few ways to help, including the United Way’s COVID Fund and Humanity Forward’s fund, each helping individual people make ends meet. If you are struggling yourself, findhelp.org and here are good places to start.

5. Finally, an issue near and dear to my heart. The CARES (Coronavirus Aid Relief and Economic Security, the naming of which is probably why it took so long to get passed) act was passed, and includes $350bn in potentially forgivable loans for any small business (<500 employees) to help them get through COVID without layoffs. It’s truly the mack daddy of programs available right now (soon) to business owners.
HOWEVER, in Congress’s efforts to avoid giving undue favors to big business, they have constructed the Act in a way that unfairly penalizes venture backed startups. Check out this Twitter Thread from a leader in the VC community and the NVCA for details, but below is a synopsis:

  • Otherwise eligible businesses <500 employees are subject to something called the SBA “affiliation” rules. Basically, SBA determines the 500 employee test by looking the applying entity, as well as all of its “affiliates”. Unintentionally, a company applying for a loan that has “significant” minority stakeholders – such as one or more VC firms, or a family office, or major angel/HNW investors – will be subject to a requirement that the 500-employee limit be applied *IN AGGREGATE* to all of the *OTHER* portfolio companies in which that minority investor is also a minority shareholder.
  • Let’s use VNN as an example, a company of 70 employees, which you’d think would be well underneath the line. We’re who this program was written for. However, since we have about five VCs with “significant” interest in our company (guessing here as to the definition of significant), as written we would be ineligible for this funding because “VNN’s employees” would include all the employees at those five VC firms, as well as all the employees from all the companies they have invested in, even as those entities are entirely unrelated.
  • The rules weren’t meant to disqualify small VC backed startups from accessing the exact same small biz loans offered to literally every other small biz, but someone missed this scenario so that’s what it does. VC backed startups are the ONLY small businesses ineligible.

So a request: We have contacted our local Chamber and Congressman, but we need help. If you have connections to the Senate or the House, please reach out to them and explain the situation. The entire unfortunate situation is due to something called the SBA AFFILIATION RULES. If you don’t have any direct connections, you can contact the Senate Small Business Committee at +1 (202) 224-5175. And if nothing else, please share this info far and wide (just copy/paste. No need to attribute — just get it out there). In advance, thank you.

And as always, please let me know what you think in the comments, or if you stumble upon something excellent I should be aware of let me know that as well.

When quitting is the logical decision

Posted on by Ryan H Vaughn

I went to bed crying about business once, years ago, and I remember feeling like the whole thing was fucked.

We were running out of cash, over 70 employees and their families were counting on me to find more cash, and even though the business was meeting its objectives fundraising was going terribly.

The day before it had been going well, funny enough, before the investor who had spent literally dozens of hours with us pulled out instead of offering a term sheet as he had told us he would. He explained that his partners weren’t as excited about the market as they had been, and the $10m that we had been expecting to close within the next 30 days evaporated when I hung up the phone.

I knew the next step was to open my laptop and get back to work, but it all seemed pointless. We were going to run out of money, I was going to let down everyone that had believed in me, and I personally would be branded a failure and run out of town as a response. I forced myself to look up when Laura got home, and her smile turned to concern when she saw me. We talked, and because she’s amazing she tried to mirror me in such a way that I could see my way out of the situation. She talked through alternative options, bright sides, everything, but I didn’t want to hear it. All our options sucked. We had banked it all on one investor, which I knew was a bad idea but had somehow convinced myself would work, and now it was all going to blow up. Our business was gone, my life was over, and I wanted to crawl into a hole and sleep until I died.

So I went to bed at 6:30pm.

When I woke up, the investor was still a pass. I went through my situation logically, evaluating all the options that we had, and came to the unavoidable conclusion that we still didn’t have any options. I hated that reality, but it was fact. We would run out of money, we would fail, and it would be all my fault.

I’ve found that there are choices and decisions in life, and the two are very different.

Decisions are what you make when you know where you’re going and you’re trying to optimize for the best way to get there. There is a right-est answer, so you evaluate all the data and then make a decision based on that data, trying to steer as close to the correct answer as possible. Choices, on the other hand, are what you make when there is no right answer, you don’t know where you’re supposed to go, there is no available data, or the data contradicts. You don’t evaluate anything in making a choice. You make choices based on gut (said differently: based on nothing), and if someone asked you why, you might be able to spin up some logic in support of that choice, but you’d know it was made up as you said it.

At that moment, sitting in my kitchen with everything telling me to simply pack it in, I made a choice to keep going. All the available data said we were screwed, and I maintain that the correct decision would have been to stop, were I evaluating data. If I had done a pros/cons list the piece of paper would have tipped over due to the weight of ink on the Cons side.

But I chose to keep going.

Three months later we’d secured follow on financing from a new investor just in time, and from that were able to launch the 2.0 version of our product which leads the market today. None of that was possible sitting at my kitchen table looking at the data, but all of it happened because I chose to keep going despite its impossibility. We reached second base not because we knew how to get there and were skilled navigators, but ultimately because we were willing to step off of first base despite having no idea if second base really existed.

Running a business means making thousands of decisions every day. You succeed or fail based partially on your ability to make those decisions with a high degree of accuracy. But running a business also means making at least a handful of choices, and in those moments every successful entrepreneur has consistently made the choice to keep going.

In the words of a mentor of mine, Chelsea FC Avram Grant:

If you persist, you may succeed, or you may not. But if you quit, you ensure you will not succeed.

Update: I went to bed crying about business this week, as COVID-19 shut down the economy. I know a lot of founders who did.

I see how you got there, Billy McFarland

Posted on by Ryan H Vaughn

I finally got around to watching the Fyre Festival documentaries, two distinct movies (Netflix and Hulu) each chronicling the rise and spectacular fall of what might have been the largest, most exclusive party in history, held by Ja Rule and a frat bro named Billy McFarland, who is now serving 6 years in prison.

First off, if you haven’t seen them, you should. It’s like watching a train wreck in slow motion, in which the people driving the train are smiling and telling passengers they’re safe and are going to go right through an invisible tunnel while at the same moment the train accordions against the mountain car by car. It’s glorious and horrifying.

Second off, after giving some thought to the horrifying manipulation of people, the careless disregard for people’s safety, the blatant misrepresentation of the truth, the wholesale financial fraud and the general nastiness of the whole situation, I’m left with one distinct conclusion:

I see how you got there, Billy McFarland.

In fact, I would go so far as to say that Billy McFarland (and Steve Jobs wannabe Elizabeth Holmes, for that matter — I see how she got there too) is the logical conclusion of some unique characteristics of what we know as “startup culture,” and that if it hadn’t have been Billy and it hadn’t have been Fyre Fest, it would have been someone else. Perhaps you or me.

The best practices of building a startup nowadays are based loosely around the Lean Startup methodology, which I’ve written about before, and specifically the absolute critical importance of validating customer demand before building anything. In the same way that previous cycles threw money at good ideas with great powerpoints (see dot com bubble), today’s entrepreneurs have been instructed to take the old adage, “fake it till you make it,” as gospel and user manual. Because the largest risk to any new enterprise is whether consumers actually want to pay for what you want to build, techniques to test consumer behavior have become dogma.

It’s a general truism that “you can build anything, it’s just a matter of time and money.” So it follows that the only thing that’s really risky is figuring out whether people want the thing you’re planning to build. Figure that out, and you can figure out how to actually build the thing after. Building the thing is “details,” and you should never “let the perfect be the enemy of the done,” are things I’ve actually said before in my career.

The essence of all this is to figure out if people want it, and then after that figure out all the other details. This is key. I’ll come back to this later.

The best example of this I can think of off hand is Dropbox, the file sharing program you probably already use. Before launching their first product, they went out to test the assumption that people would pay for file sharing service that worked like magic, and to do so they created a video, walking through how the product would work (or something close to it), and then asking people to sign up, in advance of the product actually being built. Now, the guys at Dropbox were up front about the fact that the product wasn’t yet available and in fact people were signing up for nothing, yet. So fair play to them, no issue there. And they learned a ton, and are now the posterchild of how an effective MVP (minimum viable product) can be something very different than an actual product.

So what did the startup world learn from that? Well, that we needed to get customer commitments up front, before building the product, to validate customer demand. Marketing is good, but definitely, for Heaven’s sake don’t actually build the product until you know whether people want it, because building it is where all the cost is.

From this, and following Dropbox’s example, an entirely new startup category blossomed, with landing page builders like LaunchRock, Unbounce, Leadpages, and the like. With these, it became easy to stage digital experiments to validate customer demand:

  1. Launch landing page which shows off your tool or technology as if you have already built it and it’s available for sale
  2. Put a “buy now” button on the bottom of the page with a price, just as if your imaginary product were real and available
    1. When clicked, this goes to a dead link, or a page that says “coming soon” and asks people to enter their email address to be notified when it’s ready
  3. Send paid traffic to your landing page
  4. Track conversion % (the number of visitors / the number of people who clicked the button thinking they were buying your imaginary product)
    1. If the number is high enough, then go build that thing, knowing that people want it
    2. If the number is too low, scrap the idea and maybe tell the people who signed up that it’s not coming (but probably not)

It only took me like 30 seconds to type that whole process above because I’ve done it so many times. It’s one of the most effective tools I’ve run across to validate customer demand, and has proved invaluable in ensuring I spent time and money building things that were likely to succeed (and more importantly, didn’t spend time/money building things people didn’t want). Much better than surveys, experiments like the one above allowed me to closely mimic the actual buying process, so that I would get data on consumer buying behaviors in an environment as close as possible to the real thing. Once buyers clicked a button where they thought they were actually buying a thing, then build it.

For that matter, probably the best example of all this is Kickstarter, where you don’t need a product at all, just a compelling story to get people to preorder your product before you make it. And where 9% of all products flame out without ever delivering on what they promise. This is all acceptable and reinforced by our startup culture.

But it’s also not that different from what Billy McFarland did. Billy basically ran a lean startup experiment at massive scale, figuring he’d figure out how to deliver the party once he was sure people wanted it.

Then when he learned that people were into what he was selling with those orange Instagram tiles he made the mistake of going waaaaay overboard on marketing the shit out of it before he bothered to figure out how to deliver the actual party. Of course it would have been better if, once he had learned that people wanted to party on a deserted island with models in bikinis and Blink 182 (imagine), he had taken a beat and simply asked himself “ok, Billy boy, are we sure we can pull this off? How are we going to do this?” But I’m sure he believed in his own hype and ability to pull off the impossible (sound like anyone we know and admire?), so instead he doubled down on scale and scope. Then, when he had built it into the biggest party in history, he finally looked around and figured hey, we can make this happen, right? In the Netflix documentary you can see him trying to create his own reality distortion fields at that point, channeling his inner Steve Jobs.

This whole thing was a mistake, sure. But more on the lines of a tactical error than a moral travesty. And an error I could have absolutely seen myself making with my own customer development experiments. And if his reality distortion field had worked, if he would have pulled off the party, he’d be just another in a long line of Silicon Valley all stars, proving the primacy of the American spirit over all odds. But it didn’t, and he found himself deep in the shit.

Granted, once there he made some stupid and indefensible decisions on how to dig himself out, which is where the real fraud came in (not to mention some seriously uncomfortable situations for his coworkers). I can’t explain or defend his decision to do such brilliant things as cook the books, or try to sell discounted tickets to other shows that he didn’t have, while on bail during the trial for selling tickets to Fyre festival. What he did once he was down at the bottom of the hole I have a hard time relating with (but it’s worth remembering he was 26 years old, an age eight years younger than I was when I figured out how to work a wash sink), but I can certainly empathize with all the steps down the stairs.

Billy McFarland simply went for it at a massive scale, in a way that had it worked people would have been singing his praises (for the outcome AS WELL AS THE PROCESS), and failed to deliver. This whole thing is different from 9% of Kickstarter campaigns only in scale and publicity, and because some dumb kid didn’t know when to quit.

Leave it to America to crucify the logical outcomes of the cultures we create, especially when they don’t win.

Corona Newswire

Posted on by Ryan H Vaughn

My son coughed the other day. It was only one cough, but Laura and I immediately looked at each other. We waited a beat, while he boxed-out his brother from the “Mickey Mouse Clubhouse” made of Magnatiles, but there were no more.

When the shit first hit the fan, I was just getting over a bug, and both our kids had runny noses. I looked it up at the time and that’s “rare” for COVID, but I still thought about it when I wiped their faces with toilet paper.

In between legos and nose wipings I spent most of my time on Twitter those first couple days. I saw a tweet that said:

  • Instagram: My life is a party.
  • Snapchat: My life is a quirky tv show
  • Facebook: My life turned out great!
  • Twitter: We’re all going to die.

and I think it’s true (update: so does Seth Godin), although maybe I’m biased because 50% of my recent experience with Twitter has been during a pandemic. I found myself retweeting things that seemed worth sharing, like people should know about them, and that’s how I, too, became a 21st century doomsday crier. I saw a side-by-side of Trump telling everyone it’s no big deal cases are already going down next to him saying he always knew it was a pandemic next to him assuring people we would win while he clutched a podium with white knuckles. A startup founder sent a link saying millions of people would die in the next three months, and another sent a link to drunk people on Spring Break in Miami. “Fuck the ‘rona,” said those people, probably. Some people posted about people losing their jobs, and some people gave those people money. The whole internet was talking about flattening the curve, but an epidemiologist who for some reason decided to publish on Medium explained that no amount of flattening would prevent hospitals from being entirely overwhelmed. While Wall Street sank into the East River, the internet filled in admirably by shouting partially informed data and instructions at one another. I felt like I was staying up to date. Laura told me to stop talking about it. I couldn’t sleep that night. Someone tweeted:

  • stay home as much as you can
  • i know it sucks but it’s necessary
  • you’ll literally save lives
  • this is the easiest it’s ever been to be a hero
  • just think on it like:
  • 1. soldiers who stormed the beaches at normandy
  • 1A. people who stay home right now and watch Netflix

The next day I remembered that I used to avoid Twitter entirely, and it felt like a good day to revive that practice. I knew enough to stay in my house, and whatever news I would miss by unplugging wouldn’t change that fact. We had a nanny come in to help in the morning, and as she walked in I nonchalantly washed my hands in the sink and mentioned how often we were all washing our hands.

I was productive, which felt amazing. Laura and I officed out of our basement, while the nanny kept our kids busy collecting pinecones at the park (she made the boys wash their hands when they got back). I spun up a new Corona-inspired business model in the morning, and spent the afternoon on phone calls telling people that all we can do is to focus only on what we can control. I knew that was right, and that leaders are forged in the crucible of pandemics, but it still felt forced. Maybe it didn’t matter.

Laura was in good spirits coming back from her first foray out of the house in days. She’d just watched the latest coming out of the White House, and commented that she was impressed by the transparency and competence the doctors showed with Trump leaning over them. They said they’d had challenges but they were taking steps, and they expected we’d get past this. Good news felt good. I called my mom later that night, and she said she felt better about things, too. Yes, hundreds had the virus, maybe thousands by now, but this was the combined ingenuity of the entirety of the American population we were talking about. Even Bezos was involved. We’d get past it, just need to lay low for a while.

After our youngest finally fell asleep Laura joined me in front of our gas fireplace, joking that we’d kicked the ass of day five. Who knows how many more to go, but it felt like a number we’d get through. I checked Twitter, skimming through tweets rapidly. Same old shit, but toned down a bit. People finally felt heard by the government, maybe? Either way the tone seemed to have shifted. I saw someone summarize an Imperial College Study which seemed like legitimate, trustworthy information, which was unique, so I read it.

My eyes glazed over. I felt my heartbeat in my chest. I sat there silently for I don’t know how long, then I put down my phone and sighed. We went upstairs after a time and I slept restlessly.

I woke up at 5am as normal. I ground coffee and made a pourover as normal. I read a bit from a spiritual text as normal, highlighting quotes I liked for a book I’ll write someday. I meditated as normal, and when the chime went off after 40 minutes I checked the NY Times. Because fuck Twitter, that’s why.

The lead article said that China had had its first day with no new local cases. They only needed 13 more consecutive days and they’d have “won,” although I wasn’t sure what that meant, exactly. The photo showed what life looked like in China, city streets empty, gated and guarded. I wondered what it took to win this war, and if we were doing enough.

I worked for 30 minutes and then got the boys up, watered down some apple juice and made them some dry Cinnamon Toast Crunch. It seemed to me that our government effectively had a choice between millions of lives and our economy. There were smart sounding people who talked between and around the President, and China was winning, and I allowed myself to hope that maybe we could actually win this thing. Something close to faith, maybe. Study be damned.

Laura coughed as she reached the bottom of the stairs. Without looking up, I told her I was ignoring that.

I finally grew up enough to read “Fail, Fail Again, Fail Better” by Pema Chodron

Posted on by Ryan H Vaughn

“Ever tried. Ever failed. No matter. Try again. Fail again. Fail better.”

Samuel Beckett

I was putting away our Christmas lights (finally), when I ran across a book in the storage area of our basement that made me pause and look closer. It’s called “Fail, Fail Again, Fail Better,” by Pema Chodron, with a forward by Seth Godin.

I’ve owned this book for several years, having bought it in a frenzy of Seth Godin consumption, but the spine was still uncracked. It was one of those books that I’d like to HAVE read, but not enough to go through the trouble of reading it. Like learning Spanish. I want to know it, but don’t particularly want to learn it. That was this book.

But this time, looking with different eyes, the book was simply right for me. I had to read it.

I still admire Seth Godin greatly–his is one of the three blogs I subscribe to–but more importantly I’d had the opportunity to read two of Pema Chodron’s books as a part of my re-introduction to myself after leaving the CEO role at VNN. It was her name on the cover that called out to me, to that human and vulnerable part of me that is playing a much greater role in my life these days. Seth’s name then complemented that call, justifying the read with an assurance that I would be better at work for the investment. It was an utter flip flop from when I had first bought the book, funny enough.

FFAFB is for the most part a transcript from a commencement address Pema did at Naropa University in 2014. Between that and “This is Water,” by David Foster Wallace, it’s fair to say that I’m a fan of reading commencement addresses. As I think about it, they cover some of the same ground, albeit from very different perspectives. The type of advice on how to live a meaningful life that we so often simply skip in our Western education’s rush to tell us how to get and perform jobs.

I won’t spoil the read, as I highly recommend the book whether you’re a vulnerable human or a professional optimizing for results, or some combination of the two. But I will say my favorite part was Pema’s intentional use of the word “forward,” rather than “positive,” in describing the power of being intentional about your attitude on life.

“Let’s use the word forward, instead of positive, because that includes whatever might happen. Instead of going backward into trying to find these little islands of security that keep giving out on you, you learn instead to fly or float and be okay in the formlessness or the groundlessness or the open-endedness of things, which is who you truly have been all along.”

Pema Chodron — Fail, Fail Again, Fail Better

Day 3 of COVID-19 quarantine

Posted on by Ryan H Vaughn

I walked out my front door on Sunday to the mailbox to get our first delivery of the New York Times newspaper (as opposed to digital). Laura had been excited that morning to work on the crossword, and I needed to fulfill the promise of that excitement. There hadn’t been much excitement since things started closing down on Thursday, but the little things still shined through if you blew on the embers.

I caught my neighbor’s eye from across the street as he returned, clad in spandex and a helmet, from a bike ride. We nodded to one another and he went into his house. Another neighbor drove past our house and up his driveway, waving at me as he passed.

As the street cleared I felt a sadness. It was a beautiful day, and it dawned on me that I was disappointed our interactions hadn’t been more meaningful. I realized that I yearned to talk to my neighbors, to connect, although we had never been more than neighbors. Amidst all the uncertainty and chaos, the sun was shining and I longed for contact with these people I knew only generally.

I went back inside.

I walked out my front door on Sunday to greet the middle aged couple approaching our house with their labradoodle. I didn’t make a habit of watching people out the window, much less meeting visitors before they made it to the door, but today was a special day. The third day since the world changed.

They stopped about 20 feet from me, and the woman brandishing a pink envelope said, “we won’t come any closer” either because of something in her or in response to something she saw in me. She explained that the letter had showed up in their mailbox as someone had miswritten a digit, and they were simply dropping it by and figured they’d introduce themselves. I was glad to talk to these people, but was relieved all the same when they said they would put the letter in our mailbox and walked away. I went back inside.

I didn’t retrieve the letter until much later, after they were long gone.

I walked out my front door dressed in workout gear over long underwear I’d last worn to go snowboarding a few weeks prior, and before that not since my crossfit days years ago. I put my Airpods in and selected a podcast about the mind’s powerful but mysterious ability to heal the body. I began jogging down the street, easing into a motion I had avoided for years. Basketball 3-5 times weekly had kept me in shape, but after the NBA shut down our local YMCA followed suit and so it appeared that sports-as-fitness wouldn’t happen for a while.

So I jogged. My side hurt almost immediately, but I pushed through and the pain soon subsided. The guy on the podcast explained that pain was simply a miscalibration of chemicals in our brain. The guest, a neuroscientist, said that the evidence showed that people lived with all the pain we’d ever experienced throughout our lives, but that the brain kept us from feeling much of it with a cocktail of chemicals purpose designed to neutralize old pains. To bring us back to normal, tare out the scale. An old ache in my hip and in my knee flared, and I wondered when my brain would neutralize it. I wondered if the world’s brain worked the same way for global pain.

I passed people walking, people in their front yards and in their cars as I ran. I made eye contact with many of them, and returned wistful smiles even as one or the other of us crossed to the other side of the street.

After about an hour run the podcast ended and I rounded the corner into our cul de sac. I saw another neighbor outside with his sons, tinkering with a car. I stopped about 10 feet away, took out my Airpods and said hi to him, as his son glided around on a hoverboard. He explained that they’d be heading to a cabin in North Carolina in the next few days, because he figured if everything was going to be locked down he’d prefer to be in a warm climate. “Trying to make memories out of all this, ya know?” he said. I said I thought we’d all remember this no matter what we did. He agreed, and clarified: “well, good memories. As much as I can, at least.” He went back into his house and his sons followed.

As they walked away I felt that yearning again, a sense that there was something more to say. But I didn’t know what.

I stood alone on a street normally filled with kids playing with rockets and bikes. Cars were in every driveway, lights flickered from every house, but even though we were all here, each of us was alone. Everyone hunkering down in their home with their families and their interpretations.

I thought of Laura and my boys. I thought of what might happen to them, what I needed to do to keep them healthy. I thought of trying to get a 3-year old to stop touching his face, never mind explaining “social distancing.” I thought of mortality statistics, of 14% for old people and 0.02% for young people, and how nobody seemed to really know. I thought about the world and about all the people who relied on gatherings over 50 people. I thought about my basketball team, many of whom thought the media was blowing things out of proportion and were simply angry they couldn’t play. I thought of the day I spent in bed the week before, which at the time seemed like only a “gastro thing.” I thought about my mom, over 60, but relatively healthy. No respiratory issues. I thought about how easy it was to get swallowed up by all the grey area in the world.

And then I saw Laura through the window, in the living room assembling a puzzle with my son. I saw a smile on his face. I smiled.

I went back inside.

Friday Sabbatical

Posted on by Ryan H Vaughn

I hereby invite you to take a mini-sabbatical from your hectic Friday, and the hectic world around #COVID19.

Especially in times like these, when everyone is nervous and nobody knows quite what to do, it’s important to take a moment, or two, and breathe. Look out the window, take a deep breath, and notice the space around you.

Here are six things I explored this week. I usually aim for five, but I needed to include #6, as I hope it’s the most impactful one:

  1. Gary Vaynerchuck doesn’t mean as much to me as he might to some, but he posted a profound lesson on LinkedIn this week that has me thinking: “I’ve realized that I’m okay with ‘steps back,’ ‘micro losses’ and even sometimes failure. I don’t over judge myself and am ok winning ‘121-98’ instead of trying to win ‘1-0’ like most do.” I’m trying to take this to heart, as I think being willing to win 121-98 is a good start toward building a company without burning through your humanity.
  2. We voted in Michigan this week in the democratic primary. I will admit to being torn between the two candidates, but this article in the New York Times summarized my thoughts well. The reality is that Every. Single. Candidate. in the Democratic primary is left of Obama. So while the revolution may or may not happen this cycle (and some will scream in fury if it does not, no doubt), the world is definitively progressing in a progressive direction.
  3. One of my favorite newsletters is from OnBeing, and this week they called out a line from a poem by Tracy K Smith, responding to the photo at the top of this post of a protestor in Baton Rouge: “Is it strange to say love is a language / Few practice, but all, or near all speak?” I don’t think it’s strange. Amazing relationships have come into my life and deepened since I started openly discussing my human vulnerability. I was so scared to open up at first, but I’ve found nothing but deep human connection as a result.
  4. Here are two of my favorite business books from the past year: Brave New Work, by Aaron Dignan, was a great analysis of how letting go of your (perceived) control of your company can be the key to unlocking great results, a lesson I’ve learned first hand at VNN, and The Advantage by Patrick Lencioni defines organizational health as the key to sustainable success in rapidly changing markets. Both of them, and many other thought leaders, are coalescing around the idea that “context>control” in business.
  5. Talking to people about COVID19 is a lot like talking to people about politics. People have their ideas about what it is and how worried to be about it, and only listen to information that supports those beliefs. At the risk of some people not listening, one of the consistent themes has also been a misunderstanding of how exponential growth works, and how small differences in case #s can carry huge implications. Thanks to Brad Feld for putting together a simple summary about this.
  6. The financial impact of COVID19 is just getting started, I fear. I am fortunately in a position to have a steady paycheck which is unlikely to be disrupted by all this. Many are not. Many people have lost significant income already, and will be adding “making ends meet” to the already long list of pressing issues. If you are in a position to do so, I hope you will consider visiting ILostMyGig.com, where you can help people who lost their income due to COVID19. They do diligence on each person who applies, and each person provides Venmo/Cash etc so you can donate directly. I just sent a donation to a bartender who has lost many of her shifts due to the cancellation of SXSW. We will get through this together, and I think that helping those in need is a big part of that. It doesn’t have to be a lot, everything counts.

Let me know what you think in the comments, or if you stumble upon something excellent I should be aware of let me know that as well.

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