The Economy Of Good Enough
A few weeks ago, I had the honor of being invited to speak at MIT Sloan business school. This was big to me, specifically as I've never graduated as a Computer Science & Mathematics major.
I called the presentation "The Economy Of Good Enough." I mainly discussed why in my mind the world has seriously changed and entrepreneurs should consider doing things differently, and carry new type of tools to be competitive and better than others. Why? Because it's not 1976 anymore. New game, new tools.
I thought I'd connect that MIT presentation to the fastest growing market these days: online video, growing from $1.5B last year to shy of $6B by 2014 (by eMarketer), and provide some tips that might help to capture meaningful pieces of it.
Background: the world is different. In today's world where technology and information is so available, the path to know if things are working is much shorter and cheaper. It's all about "do," run a small pilot, get some data, fail multiple times, and get better.
Some of the things I do and believe in you might find useful:
1. The beauty of failing - "winner takes it all" is a very risky statement. You see, if you're all about winning you might be missing out on some really good failures. In the "economy of good enough," it's all about embracing a journey of multiple failures. Most of us by nature are tuned to plan "the win," how to behave when winning, how to defend our business when we are there, market size analysis to make sure it's a billion dollar market, etc. However, in the "economy of good enough," we are likely to have many little failures and unknowns as an organization and it's much more important to get ready to the next failure instead of the next win. Statistically it will happen much more. By doing that, you're building a culture that embraces trying, data collecting, and optimizing. In the "economy of good enough" - this is key to success in my mind. Here is an example of the mighty Phil Collins being ready for a potential fail, at minute 1:09, in front of 90 thousands people, he misses a note. He didn't start from the beginning, he didn't get up and leave, he wasn't looking disappointed - he smiled. He was ready to fail.
2. Golden moments do not exist - This is really a human challenge in my mind, and in the "economy of good enough" it becomes a real risk. By nature, most of us would default to defer something that we don't (really) have to do now, waiting for that golden moment to happen before actually doing it. Anything from why it makes sense to ask for a raise only next year, why now is not the right time to fire an employee as they are "just about to crack it and you're sure they will be great in the future" to why pitching that big client with your product doesn't make sense now because we're not fully ready. And that's ok. We're human.
In the "economy of good enough," it's all about the idea that making any decision is greater than making no decision. This means that in a very fast pace industry such as Online Video, it's all about accepting the fact that things are changing fast, not being sure most of the time, making decisions, measuring and optimizing to become the best at what you do. In the book "Startup Nation" the author writes that one of the reasons the Israeli army is so successful being so extremely small is that - there is a culture among the officers of allowing the soldiers fighting in the front to make decisions without "looking back for approval" all the time. This culture refuses hesitation and encourages decision-making and change. It worked for Israel; it might work for your video startup.
3. Don't solve a new game with old tools. This is really a comparison between the Donald Drapers of the worlds to today's entrepreneurs. Donald is a real star at what he does, growing from being a creative director, to becoming even more senior, ending up opening his own firm as a partner. At every phase, he did everything right to deal with his challenges, he knew how to operate a meeting, leading a small team, talking the language and drinking the drink. He didn't invent anything.
Today's entrepreneurs are required to deal with a whole different game. Small capitals in the $18k size from star-added-value-investors (Chris Dixon, Fred Wilson, Y-Combinator), high competition because it's easier to start a business, flood of information, high visibility (techcrunch, mashable, twitter), new type of incubators and communities (WIX lounge, General Assembly, Techstars), and new type of winners. A few examples that you can start with "who would have thought":
-- Huffingtonpost doesn't grow journalism (a la NYTimes that we all grew on and love on a Saturday morning), instead - they build an advanced technology that is based on aggregation and was sold to AOL for a third of a billion dollars.
-- Justin Bieber doesn't pitch himself to studios waiting for a chance. Instead he uploads a video to YouTube, gets picked up by Usher, and becomes a $100 million business.
-- No huge capital, No huge team, No 4year plan, No market analysis -- a side project becomes Twitter.
In the "economy of good enough" there is no room for old tools (only). We have to re-invent the tools we need to face our challenges. Whether that means upload a video to YouTube, or change the way journalism is known.
If you are an entrepreneur or a business in online video, the fastest growing market, I hope the above might help you. Good luck !