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| I See Your Darwin Fish And Raise |
Part of a continuing series
of moments from my career, in which great breakthroughs came from great setbacks.
The point, as always, is to work away from fear, and learn from every mistake.
Besides, they make for better stories.
In early 2000, I took a gig
with a hot start up. My new employers were a pair of college kids who started a
Web site for musicians. Their concept was to start with a vibrant community by
offering up great content, then expand it to commerce with peer to peer sales
and online studio file sharing, then cap it all off by offering direct
e-commerce sales. As direct sales to musicians were rife with hard sell abuse
from commissioned salespeople and very high profit margins, there was
definitely an opportunity to be disruptive. Besides, it was 2000, when you
could get funding for the idea of shipping heavy bags of pet food over the
Internet, just so long as you offered free shipping and talked about the Long
Tail.
The site was beloved by a
billionaire who was also a musician. The billionaire gave the kids $15 million
in venture capital through his funding company, with the promise of as much as
they could feasibly spend later, such was his love for the site and its vision.
All we had to do was prove the concept and Get Big Fast. The kids hired
some pros, and those pros hired more pros. I took the gig as one of the first
dozen employees as a direct marketing manager. Within three months, we had 60 hires, new
offices, and plans to change the world.
My duties included
generating a lot of selling copy for the e-commerce play, coming up with ideas
for and doing the execution of sweepstakes to grow our house list, and serving as
on-air talent at gear shows. My main duty on a week-in, week-out basis was to
write e-commerce newsletters. We started from nothing, and through consistent effort,
effective promotions, and appealing price points, quickly drummed up a six-figure
house list.
The newsletters had some viral
pass-along and good metrics on response and unsubscribe, and directly generated
over 10% of all sales… but it started to plateau. I noticed that more and more
of our competitors had better looking emails than we did. Ours were text only,
with long URLs, and no images of the gear we were trying to sell. (Remember, it
was 2000.) Theirs had images of the gear, and call to action buttons.
I asked our CTO, one of the
two kids who started the enterprise, for help to bring us up to the new
standard… and got pushed off, then pushed off some more. There were other priorities
that we needed to take care of first. The newsletter ROI was doing just fine as
is. Our core demo had low bandwidth (remember, 2000) and did not need rich
media. We needed to wait for the second round of funding. And so on, and so on.
Recognizing a wall for a wall, I worked on other stuff and waited for the
second round of funding before I asked again.
Then one day, I came into
the office and caught a whiff of something burning. Popping up from my cubicle,
I found our founders poised over a conveyor belt with a complicated apparatus
and monitor. This turned out to be an industrial engraving machine with lasers.
They were using it to test for possible trade show use. The idea was that
instead of buying stuff and paying to have our logo put on it, we’d burn our
logo into goods. Well, OK then. I went back to my desk… and spent the rest of
the week wondering when these kids were going to get tired of their new toy, as
they pretty much turned into Beavis and Butthead in setting the laser on literally
hundreds of objects, because hey, LASERS.
Within a month, the billionaire
pulled out from the second round of funding. No one else in the industry
stepped in to buy the company, since we hadn’t drummed up enough sales to prove
the concept. (Also, well, they liked their old margins.) Nearly everyone lost
their jobs. I still can’t see a scene in a movie with lasers in it without
thinking of the experience.
Lessons learned?
1) In direct marketing, design is more important
than copy.
Yes, this one hurts. I’m a
writer, after all. Nevertheless, if your work cannot compete on a level playing
field, there is only so much that you can do to overcome that. For the most
part, it does not matter how good your copy is; imagery trumps.
2) Your competition is (always) watching.
Especially in email
marketing, where signing up with a personal email address is beyond easy. If
your work is not being looked at, your work is either too weak or compromised
to be of interest, or your competition is criminally negligent. Our sweepstakes
were copied quickly by the competition, and our pricing made life better for
consumers in the category… but only for as long as we were around.
This also means that, in the
event of company blowup, you might discover you have some fans. I wound up
doing consulting work for another player in the space for many years.
3) The wrong venture capital or money will get you killed.
After this experience, I have
ran into any number of people who have similar horror stories about the
billionaire in question. He is infamous for it, really, though in fairness, the
track record was not as pronounced back in 2000. Had we known the second round
was shaky, there is no way we would have been as aggressive with our burn rate.
4) The wrong engineering will get you killed faster than the wrong money.
Why did my old CTO spend
more time on lasers (frickin’ lasers!) than, well, something that might
actually make money? Maybe because he already knew the jig was up, and selling
more gear was not going to change anything. Maybe because he was in his ‘20s
and really liked lasers. Maybe because he really believed that musicians in our
world did not care about pictures. Maybe it was all an Andy Kaufman-esque
performance art piece, or that we were secretly filming my reaction for a “Punk’d”
style show.
In the end, the reasons do
not matter. Either engineering gives you the tools you need to succeed, or they
do not. And if they do not, you’ve got a massive problem.
5) Sometimes, it is better to ask for forgiveness,
instead of permission.
If I had this situation now,
I probably would not sit back and wait for the CTO to change his priorities to
match mine. Instead, I would hire for the necessary skill, either on a contract
basis or with a free-lance project, and run the test as soon as possible. If
the test won, the CTO might have been annoyed with me for running an end around,
but probably not aloud, since he would be on such poor political footing. If
the test failed, I would give my blocking agent the good news that his future
roadmap was now more open, and moved to testing other parts of the program,
while learning something profound about our customer base. In any event, I
would not have been sitting on my hands for the last month of employment.
6) Never sit on your hands.
* * * * *
You've read this far, so feel free to connect with me on LinkedIn. I also welcome email to davidlmountain at gmail dot com, or you can use the top right form on this page. All quotes are free of sharks, lasers, and cost.
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