“It’s like Uber but for paramedics and first responders. You gotta meet the founder, Eli”.
My friend Joe shared some version of this with me early last year. Shortly thereafter, I met with Eli and then my family decided to donate an ambucyle. It was an easy decision.
However, we wanted to take it a step further…
But first, quick context…When I was young, maybe six or so years old, I remember seeing these heroes on the ski mountain wearing red jackets, with white crosses, skiing around helping to save lives. I thought they were real-life superheroes. Twenty-plus years later I still try to make it to Vermont to volunteer as a member of Ski Patrol.
Back to Feb 2022…
I thought maybe we could recreate that feeling for kids to inspire a sense of wonder and adventure. We asked the United Hatzalah team if we could donate the bike at a school, with all the kids there. They were of course happy to do so. Little did we know the bikes would be in the field responding to the worst atrocity against Jews since the Holocaust.
The bike reads:
“Whoever saves one life, saves the world entire.”
And that’s the point: all it takes is one act and one person to change the world.
Maybe that will be you today… stepping up, getting out of your comfort zone, and doing even just one thing that can make a small but massive impact.
The first CEO I worked for (Andy Monfried) survived a suicide bombing in Tel Aviv. When he got home he quit his company doing door-to-door paper sales to join two brothers on their startup. That company was acquired and years later Andy launched his own.
The second CEO I worked for (Michael Lazerow) was 19 years old when his heart valve stopped working. His blood pressure dropped to zero and had 3 hours to live. He did indeed survive and later that year started his first company. It would be the first of many. Most of those companies were acquired.
The Uber driver I had this morning told me a story… “I used to work as a sales rep hitting quota. I was always working for the next president’s club, over and over again, stuck on the hamster wheel.” He then told me about how he survived 9/11 and how all he wanted to do was get home to see his one-year-old son who was beginning to walk. He made it home that day. And the day after that? He quit his job and became a pasture.
Many of us coast through life stuck on a treadmill we never realized we got on in the first place. The conveyor belt of life loops around again and again, year after year, and we don’t jump off in search of better use and meaning with our time.
We hear about people who completely change their lives after being faced with a life-or-death situation. We hear and read about how they’ve found new meaning and a new calling. Or as Andy put it, how they are “playing on house money.” Yet most of us still carry on like zombies…
Most of us should be so thankful that we haven’t had to live through such a dire moment, but most of also us need a wake-up call to make the most out of this game called life.
If we look around we can find moments and stories like these that can act as a mirror and help us ask the hard question…
“What am I doing with my life?”
My Uber ride this morning was a good reminder of that. We’re all playing on house money and once you internalize this idea it’s a little bit easier to jump off the treadmill.
After recently building companies in both the B2B SaaS and CPG sectors, a common question I encounter is, “Which one do you prefer?” Both have their merits, but here are the key distinctions that have stood out to me over the past year or so:
1. Acquisition Path: Build or Buy?
When it comes to Mergers and Acquisitions (M&A), a recurrent question to potential acquires is whether to construct a new product or feature in-house or to acquire a company that already offers it. Here’s how this unfolds:
Technology & B2B SaaS: Major tech companies often possess the means and innovation drive to build new products and services in-house. An M&A prospect prompts teams internally to perform a ‘build vs. buy’ analysis, weighing the benefits and drawbacks of internal development against those of acquisition. This creates more internal debate and friction, which can impede the ability to get a deal done.
Consumer & CPG: Conversely, in the consumer space, most strategic acquirers rarely construct new brands from scratch. The challenge of distinguishing a new brand in a crowded market and the associated capital expenditure makes it a daunting endeavor, compared to allocating more capital to winning brands with existing distribution. Consequently, consumer companies have a more predictable acquisition trajectory than their tech counterparts.
2. Business Model Dynamics
CPG Companies: The business model for consumer goods is remarkably linear: design a product, package it, and sell it. Although challenges arise in marketing and pricing, the general model and contours for the business remain consistent across the board.
B2B SaaS: The business model here is multifaceted, and can often feel like a game of four-dimensional chess. I know it has for me. Founders must consider product-market fit, define target customer profiles, understand pricing dynamics, deal with platform risk, and stay on top of an ever-shifting competitive environment. This landscape is populated by well-established players, emerging and well-funded startups, and copycats, all vying for market dominance. Yes, all of these things are true in the CPG world, but I think they are much messier and elevated in the software world especially since you can, and have to, iterate on the products every day.
3. Profitability Profile: Understanding the Costs
Consumer World: The financial framework for physical products has established rules that are easily comprehensible.
Technology World: At Salesforce years ago, I would hear people talk about the beauty of SaaS because it is an annuity business. You build the software, sell it, and your gross margins are high because your marginal cost to build the product again is zero. You’re just provisioning a new account. However, what sometimes gets lost here is that software companies have to keep innovating and investing in R&D to stay ahead, which can mean more people and more expense. Not to mention adding customer success people to ensure the customers are happy and using the software correctly and successfully. Add to the fact that the most talented engineers are expensive, in terms of cash and stock-based compensation, and you quickly realize that your COGs for software development may get out of hand very quickly in order just to compete and stay ahead. We saw this happen this past few years which resulted in mass layoffs from larger tech companies.
4. Brand Awareness: Social Media’s Role
CPG Companies: The world of social media has no shortage of discussions about beloved brands and products. This kind of visibility can boost brand awareness, making it exhilarating for those involved when their products become household names.
B2B SaaS: In contrast, enterprise software seldom garners the same kind of public enthusiasm. People rarely give the same amount of love to a workplace tool or solution in the same way they’d rave about their new favorite snack, shoe, beauty product, or piece of clothing. This translates to a subtler brand awareness for B2B companies.
In summary, we’re really comparing apples and oranges here and one is not better than the other, however, these are just some of the categories that have been most top of mind for me the past year or so when asked about the differences of running a CPG companies vs a B2B Software company.
As the countdown to the new school season begins, I’ve been having some chats with the newest wave of freshmen and others going back to school. Each chat’s been a flashback, making me share those game-changing tips I wish I’d known when juggling the whirlwind of engineering classes and side hustling with startups.
So if you or anyone you know is heading to college this fall, here are a few tips that worked really well for me.
1. Treat College Like a 9-to-5 Job: In my first semester, my GPA was a mere 2.5. Instead of studying in between classes, I’d chill in my apartment, wrongly assuming good grades would follow. The next term, I committed to a 9-5 school routine, keeping away from home distractions. Suddenly, everything became manageable and way more productive.
2. Sync Up with Study Buddies: The above strategy felt a tad tedious until I teamed up with like-minded friends. We synced our schedules, adding an element of fun and accountability to our academic grind. Our time together also gave birth to new business ideas which then became actually companies we built together. We also ended up leveraging school resources for our companies. For example, we used giant engineering printers to make banners for our first company.
3. Be a Regular at Professor Office Hours: Like anything in life, building relationships is key. Frequent visits to professors not only clarify doubts but also help in forging genuine bonds. Remember, they’re often the ones marking your papers, so a positive impression goes a long way.
4. Pick a Practical Major: Some majors just don’t translate well in the job market. Instead of art or the dubiously termed ‘political science,’ (politics is not a science!) hone in on pragmatic fields like Science, Technology, Engineering or Math (STEM). Even if you don’t directly use the degree, the critical thinking skills acquired are invaluable.
5. Embrace ‘Work Hard, Play Hard’: Yes, diligence is vital, but so is downtime. After a long week of productivity, reward yourself with some relaxation and partying. These things feel a hell of a lot better after you’ve clocked in some productive hours.
6. Craft Your Own Curriculum (Bonus: Start a Company): Many institutions offer independent study options. I once teamed up with a professor, Nicholas Hitchon, to start a tech company as a course, which was both entrepreneurial and educational. For me, I needed 3 more credits of a specific engineering course so my friend and I proposed a “start our own technology company” course where we would literally start a company together and get engineering credits for it. So we did, launched The Campus Atlas, and checked off the last credits we needed for our major. In another independent study, we wanted to check out the new multi-million dollar engineering equipment, so we proposed a research project and got to spend time in an Intel-like lithography bay. Pictures below.
7. Launch a Startup: The college ecosystem is a rich environment for startups. Surrounded by smart minds and abundant resources, it’s the ideal incubator for your ideas. And hey, if it doesn’t pan out, college life continues. Need inspiration? Just look at Facebook.
8. Network with Alumni: Seeking counsel from successful alumni can open doors in unexpected ways. A simple request for career advice might evolve into job offers, insightful guidance, or valuable introductions. Plus, the very act of doing the cold outreach is a life lesson in sales which is useful no matter what you do.
Those are a few things I wish I had known earlier on heading into college. They were ultimately very helpful for me and maybe they’ll be helpful to you.
Me (2007) – Wisconsin Center for Applied Microelectronic Devices
The best part of being an entrepreneur is getting to work with amazing people, and I’m excited to be able to once again team up with the folks at LCatterton, and of course, Ken Landis. And just as good, getting to work with Courtney Shields and Jeff Lee from day one on this venture. Exciting times ahead!
L Catterton is betting once again on the founders of Tula Skincare. The private equity firm has just made a “significant” growth investment in color cosmetics brand Dibs Beauty, launched in September 2021 by Tula Skincare founders Ken Landis (who also cofounded Bobbi Brown Cosmetics) and Dan Reich, with Austin, Texas-based influencer CourtneyShields and former chief operating officer of A-Rod Corp Jeff Lee. Terms of the transaction were not disclosed.
This is a repost from a LinkedIn post, for easy reference and since the topic keeps coming up.
A lot of entrepreneurs are now hustling to raise more money or sell their companies. Having just lived through two M&A events this year with P&G and Salesforce, wanted to share some brief M&A lessons:
1. Companies don’t buy companies. People at companies buy companies. Know who your buyers and champions are and build relationships with them.
2. 1,000,000 things need to go right for successful M&A. 1 thing needs to go wrong for unsuccessful M&A. Every detail matters.
3. Bankers are helpful, but don’t expect them to be a silver bullet to getting a deal done. You may pay more than feels reasonable, but it’s still a good insurance policy to making sure a deal gets across the finish line.
4. A deal isn’t done until it’s done. The unexpected will almost certainly happen.
5. You need competitive tension and urgency. Just like sales, or raising money, without compelling events and some FOMO in the process, it’s easy for things to drag out. See 1.
6. Get organized. All of your files, contracts, documents, vendor lists and pretty much everything you’ve ever done will need to be reviewed. Get ahead of it and organize it all so you can move fast and efficiently. Also, see 2, 3.
7. Understand the buyer’s intentions. What’s strategic to them and why? Your business will be valuable for different reasons to different buyers, therefore, your story will need to be different to different buyers. For example, with TULA, some buyers cared more about our science and R&D while others cared more about our digital capabilities.
8. Delegate everything. Once you get into the M&A track, it becomes a full time job. Make sure you’ve delegated as much as possible to your team so you can focus on getting a deal across the finish line. Also, see 3.
9. Manage your emotions. The highs are high and the lows are low. Be prepared to deal with a roller coaster of emotions.
When it comes to building SaaS products, all founders dream of having killer Product Market Fit (PMF). It’s the idea that your product is so good, and solves such a pain, that it basically flies off the shelves.
To do this, founders and product managers think about ways to increase the value of the product. One way to do this is to make the product valuable to a larger set of users across a company. As Clark Valberg, CEO and Founder of InVision once told me about Troops, “your product is so good because it is like tentacles into the entire organization.” The idea is if more people at a company find value, then obviously, the more valuable the product will be and the more likely it will be to sell that product.
However, the paradox of creating more value for more people, is that more people may feel like they need to weigh in on the purchasing decision. And more people, means more meetings, more friction, more decision-makers, more gatekeepers, and a longer period of time to sell the deal, if ever.
So what to do? Well, one approach is to focus on creating a valuable product for just one individual persona, thus limiting how many other people need to weigh in on the decision. Less friction! If you do this, you can get better bottoms-up adoption for that group of people. And perhaps after you’ve done your job here, you can move on and create value for other people in the company. But, making this transition from a single-use, single-persona product, to many personas is not that easy either.
This is the paradox of adding more value, to more people, in SaaS products.
Many of us have ideas for things we’d like to create and invent.
They could be projects or businesses. They could be projects that turn into businesses.
Whatever the case, it’s easy to get stuck in the idea phase but never evolve that idea into reality.
This is true for a lot of people looking to start companies.
I have an idea, but how do I start a company around it?
This is a question I’ve heard a lot over the years.
One trick that’s worked for me is to make that idea tangible by giving it a name.
When you give it a name, it becomes something you can almost touch and feel.
And then it’s easier to talk about and point to.
And the easier it is to talk about and point to, the easier it is for consistency theory to kick in. And this idea of consistency theory, where you must be consistent with what you’ve said or intended to do, will make it more likely that you’ll want to see that idea come to fruition.
So if you have an idea you’ve been thinking about, just try giving it a name to make it more tangible.
What a time to be alive. I asked a machine to provide me with a template to reflect on the year, and now, I’ll do just that.
Personal Reflections: Our family grew to four with the addition of our son, Brayden. Our daughter Michaela is now three and a half years old, and the “time flies” cliche becomes emblazed in my skull a little more each day. I became an uncle, we moved to a new town, and the silver lining with Covid-19 became apparent: I could spend more time with my family and experience a work-life balance I never experienced before. And speaking of family, I was able to make another small dent in the universe by rededicating my childhood school, and renaming it in honor of my grandparents who were Holocaust survivors.
Professional Highlights: I achieved some of my financial childhood dreams with the sale of two of my companies, TULA and Troops, to incredibly iconic companies with Proctor & Gamble and Salesforce (and Slack). But the best part? The people that helped me build those businesses also had life-changing events. There is something incredibly rewarding about building a platform that lets other people do their best work, and seeing it come to fruition is one of the greatest gifts there is. This is one of the reasons I’m so drawn to entprenuership. And if that wasn’t enough, I went on a wild goose chase trying to free some crypto coins from a hard wallet, backed a bunch of amazing founders, and doubled down on beauty with another business I’m excited about called DIBS Beauty.
Challenges and things that keep me up at night: One of my grandfather’s best friends past away. He too was a Holocaust survivor, having survived Auschwitz. I used to think, “one day they won’t be here, and they won’t be able to tell their story.” That day is here. And as their voices diminish, the drum beat of anti-Semitism gets louder and louder with incidents and hate crimes being at an all-time high. Against this backdrop, we have a recession, a population with insufficient education and understanding of history, an economic environment that provides incredibly ripe conditions for scapegoating, and people with pulpits willing to use these conditions to their benefit at the expense of humanity, decency and democracy. We’ve seen this movie before. I’ve been warned about this movie before. Only now, I wonder to what degree my kids will experience this movie.
Looking ahead: I mix these things and more together and I’m still the most optimistic I’ve ever been. We have rockets launching into space and landing on floating barges, artificial intelligence driving cars for us and creating generative images on the fly, gene editing being commercialized, energy being created using nuclear fusion, and the list goes on. I believe that our political institutions will continue to erode, but I’m also confident that founders and innovation will outpace our self inflicted wounds. As one example, while politicians debate things like climate change for political theater, entrepreneurs will develop products and services that people will love (e.g. Tesla) and also produce benefits needed to combat climate change. In short, the spirit of American entrepreneurship will continue to win out.
Conclusion: Despite the hardships and global conflicts that exist, and yes, there are a lot, it’s never been a better time to bet on yourself and try to be a change agent for good. It’s easy to get hung up with the million and one broken things going on, but we each have an opportunity to make a difference in our own lives and the lives of others. The question we should all ask is, how do we do that? And with the year coming to a close, what will our New Years’ resolution be?
For me, I’ll continue to invest in myself, invest in my family, and be a change agent for good. Seems like an appropriate and simple list.
The recent controversy surrounding Twitter’s decision to permanently ban several high-profile accounts has sparked a renewed debate about free speech and the role of social media companies in upholding it. This issue is complex and multifaceted, with no easy answers.
On one hand, companies like Twitter are expected to act as guardians of free speech and uphold the principle of free expression. In this view, Twitter should be a “global town hall” where all voices can be heard and where people can engage in meaningful dialogue with one another. However, as companies operating in the private sector, they are also entitled to their own moderation policies and the right to decide who can participate in their community.
One way to think about this issue is to consider a local bar and restaurant. Everyone is welcome to come in, eat, drink, and talk among themselves. But what if someone stands up at the bar and starts yelling at other patrons? They might start screaming about how Fauci is a crook, how Jews are Satan, or how inflation is ruining our country. People start to yell back, dinner is ruined for some, and a fight might break out. As the bar owner, you have the right to free speech too. You also have the right to decide who can participate in your community and whether or not someone’s behavior is acceptable.
The challenge we face with social media companies is that they are more powerful than most countries. When the people who use these platforms, like scientists, journalists, or even presidents, cause a ruckus and spark a debate, and then get banned, the implications and consequences can be dramatic. We are seeing this play out in real-time and how these decisions impact the most important issues of our time.
Furthermore, our elected officials are often unable to keep up with the times and technology. This leaves us with a group of people, just like us, trying to do their best and make difficult decisions. However, these people also have their own biases and ideas of what is right and wrong.
Ultimately, the debate about free speech on social media is likely to continue for some time. While some may believe that these platforms should be bastions of free expression, others may argue that it is more important to protect users from harmful content.
The echo chamber of social media turns nuanced issues into black-and-white issues, and this is one issue, that has a lot of nuance to it.