Supported by Greenhaven Road Capital, finding value off the beaten path.
Kara Swisher joined Barry Ritholtz on the Masters in Business podcast. What a two-hour trip. We’ll touch on just a few things.
Structure. In physical spaces there’s no ‘good’ or ‘bad’ but low-friction and high friction activities.
An example is automotive infrastructure. Roads, intersections, and bridges are built for the scale of cars. Go see for yourself. Or read about it. Or search for it. Physical low/high friction is easy to see but this exists everywhere.
Twitter, Ritholtz and Swisher note is good for a certain kind of communication by a certain kind of person. They focus on politicians but that again is just an easy to see case.
An unnoticed but relevant instance is organizational structure. Swisher co-founded startups with angel investments but also operated in a skunk works arrangement within The Wall Street Journal. Now, ‘skunk works’ sounds cool and the original’s conent looks cool but it may not be the best model.
It’s not about imitating models from Google, Lockheed, Goldman, Hollywood, or sports. It’s about implementing models with the best friction coefficients for your organization.Tweet
We wrote about how the skunk works model can work. Swisher noted the startup and the skunk works model were “good and bad in different ways.” It all depends on what actions the structure makes low friction and which it makes high friction.
In a previous MIB episode, Robert Cialdini told Ritholtz how a restaurant increased their friction to decrease their no-shows.
“A hostess changed from, ‘Please call if you have to change your reservation,’ to ‘Will you please call if you have to change your reservation,’ and she waited for people to say ‘Yes I will.’Robert Cialdini
It reduced no-shows by 64%.”
Physical or organizational structures aren’t good or bad, they just make certain actions easier or not. One specific example is a decentralized command. As Ray Kroc said, the person closest to the problem is the one best suited to solve it. Yes!
And no. Teams need coaches, units need commanders, and newspapers need owners. Swisher said that Katharine Graham (and her family) and Jeff Bezos have done a good job owning the Washington Post because “they were not twitchy owners.”
It takes a balance of intervention and trust that can be hard to find. David Chang said one of his restaurant launches bombed because “I fucked up by not editing enough and not finding that balance. I handed it off too completely to them. I didn’t put them in a place to succeed.”
Good decentralized command requires the right people. Sometimes that means great hiring, sometimes it means great training, sometimes it means both. It depends.
When Swisher and Ritholtz both (independently) thought podcasts were a good idea they were both (independently) told podcasts were not a good idea. One way to forcast these kinds of will-they-won’t-they-work situations is to ask if a version of it is already happening.
Tony Hsieh was doubtful about e-commerce for shoes. “To me it sounded like the poster child of bad internet ideas.” But he went along (Hsieh was bored, he didn’t even fully vest after his last startup was acquired) and asked the person pitching him how this idea could work.
‘It already works!’
‘Huh?’ Hsieh thought. He was in the internet and no one was buying shoes. ‘It’s not on the internet,’ the person pitching said. It’s in catalogues. People order shoes without trying them on all the time.
Swisher was told podcasts wouldn’t work because ‘millennials like snackables’ and two hours is too long. Well, no. As Zappos was to catalog shoes, podcasts are to talk radio. Barry added, “The 92nd Street Y has been doing that (live interview and talk shows) for decades.”
Kara has done a lot of podcasts with a lot of technology leaders. She said that Marc Andreessen, “is actually one of the people who will go back and forth.” Andreessen likes to argue well. John Hempton too.
Swisher also got a chance to interview Steve Jobs and said, “I really enjoyed interviewing him. What an interesting and complex person…he was just a complicated and interesting person. A lot of people try to cartoonize a person, ‘He was mean to people!’ Yeah, but lots of people are mean.”
Ed Catmull said almost the same thing about Jobs. Ken Kocienda too. Why does the ‘mercurial’ (and it’s always ‘mercurial’) image of Jobs remain? It’s a tasty story. Our POV 40 IQ emails regularly remind us of the work required to break what Tyler Cowen warns about:
“You have to worry about many more things that might be true and it’s a huge burden and people don’t like it. They like to push that stuff away, keep things neat and easy to deal with, what I call the philosophy of once-and-for-all-ism.”
Swisher is great because she argues well, because she avoids once-and-for-all-ism, and because she recognizes the structure we live within. Thanks for reading.