2016 San Francisco Subscriber Summit

On Oct 21, 2016 I attended The Information’s 2016 San Francisco Subscriber Summit. Here are my notes and reflections from the most memorable sessions of the day.

The Takeaway

Being a “technology company” is an increasingly generic designation as tech (a.k.a. software) is becoming a horizontal capability, not just a product vertical. The media business is as good of an example as any, where technology continues to shape evolving business models and product features.

P.S. China is emerging as the new gold rush of 1849 (I love the poetry of life). For now, everyone seems to know it exists and the opportunities are plenty, but no one in The West has cracked the code on how to unearth the treasures of The East.

Read further for my notes and reflections on select sessions.

Keynote by Jessica Lessin (CEO of The Information)

  • The Information has goals to become the largest, most comprehensive technology news publication.
  • They are launching an invite-only limited-edition $10,000 investor edition.
  • Three focus areas they are investing in: (1) Artificial intelligence, (2) Automotive, and (3) China
Imagine this as “China, China, China! We got some China here too!”

The degree to which China has become mainstream to American businesses is incredible. Especially in the technology sector.

Ev Williams (CEO of Medium) being interviewed by Jessica Lessin (CEO of The Information)

Media Meets Tech

  • Feedback loops are broken in digital media because they are based on 1-dimensional metrics (e.g., total views)
  • Social feeds provide evidence for this over optimization of 1-dimension metric. Their bite sized content baits you to click by appealing to your basic senses
  • According to Ev: “Just because I look when I see a car crash driving down the road, doesn’t mean that I want to see more car crashes”
  • Medium was started to provide a platform to share stories of substance with built-in distribution and feedback mechanisms
  • Networks with feedback loops are the key to distribution and growth, this is what Ev learned at Blogger; Blogger had no network effects
  • Medium: Come for the no-hassle great publishing tools, stay for the expansive audience and direct distribution
  • Advertisers are publishers on Medium, they can pay for distribution but they are charged based on total time reading so they are incentivized to create engaging content
  • Another monetization approach they are exploring is memberships: a subscription monetization mechanism for publishers
  • Memberships enables publishers to monetize their content on a spectrum between paywall and patronage
  • “Stack Fallacy”: Incorrect belief that once you build the bottom of the stack, it’s easier to build higher parts of the stack
  • Twitter is both tech and media company; tech (I read as software) is no longer a vertical, it’s now a horizontal capability

Ev’s comment about 1-dimensional metrics supports my belief that optimizing for metrics will not yield a great product (or industry) by default.

Identifying the true value of a product is difficult; defining the right metric(s) to measure said value is even more difficult; remembering not to blindly follow your defined metrics is the most difficult (especially once you tie incentive structures to them). Metrics can only ever amount to a simplification of reality, it cannot fully represent it (yet).

Ev’s commitment to building products in media is admirable and evident in his track record (Blogger → Twitter → Medium) and how he spoke of the industry.

Dennis Woodside (COO of Dropbox)

Bridging Consumer and the Enterprise

  • Dropbox is moving into Enterprise, serving bigger businesses such as Adidas and Expedia
  • Dropbox believes that products such as Paper is the key to the next leg of their journey to bring it more into the forefront in consumers’ minds
  • 90% of their revenue today is acquired via self-serve channels

Dropbox appears to be in an existential crisis. My speculation is that they don’t want to become just the enterprise data layer provider because it’s a low margin, mostly-commoditized and sales-heavy business. However, their attempts at becoming a consumer product feels forced. Can they really win in the documents space? Is good (even really really good) syncing and convenient hosting really the key to this market?

I wonder if Dropbox has become victim to their earlier successes (e.g., creating one of the most viral growth marketing campaign the valley has seen to date). Once they tasted the glory of being a consumer tech business, they no longer wanted to build the unsexy enterprise SaaS business. Even though their core syncing technology is still one of the best, though that advantage is being quickly eroded by Google Drive.

New World of Biotech Panel

New World of Biotech

  • Traditionally “wet lab” biology problems are moving more towards “dry lab” problems
  • In other words, our ability to collect data in biology has now outpaced our ability to understand the data

It would appear that biotech (allegedly the next hot thing in the valley) is speaking the same language as chatbots (our recently passed craze). Engineers who know machine learning (a.k.a deep learning, A.I.): Look out for the new frontier!

Another example of technology as a horizontal capability.

Julia Hartz (CEO of Eventbrite)

Future of Live Events

  • Eventbrite was supported by 3 major tailwinds: (1) Mobile, (2) social and (3) the need for big data in consumer insights
  • Discovery remains the challenge, which they are solving with 2 strategies: Distribution (e.g., via partners such as Facebook) and Destination (e.g., with their events portal, Rally)
  • Self-perceived competitive moats: They have solved ticketing workflow (a thankless and unsexy software problem) and they have access to an abundance of long tail hyperlocal events
  • They acquired an RFID wrist band company that serves as a ticket and digital wallet. They have been able to demonstrate that the digital wallet wristband generates incremental revenue for the event
  • Media (live events) and tech is also blurring

Eventbrite is at a really uncertain juncture as Facebook recently announced a standalone app to make events a core platform offering. Facebook’s advantage and challenges are the exact opposite of Eventbrite. So the age-old question unfolds: Who will win, the company with better distribution or the company with better tools (and events-focused brand)? Definitely a simplified view, but I think it’s more real than Julia’s demeanor. She seemed to shrug at Facebook’s advances as NBD.

Event wristbands sound awesome and intuitive! Though I believe Disney got there first.

Another example of technology as a horizontal capability.

Dustin Moskovitz (Co-founder of Asana)

Future of Productivity

  • Collaboration market can be organized in 3 broad categories: (1) files/documents, (2) messaging/communication and (3) work tracking
  • Asana’s mission is to solve the complex workflows for medium to large teams (from 5+ people to 1,000’s of people)
  • Equity-based compensation has now become a major component of compensation in the Bay Area as compared with 20 years ago
  • Dustin feels that certain clauses (e.g., 90 days exercise window upon departing a company) is dated and unfair to employees. Asana provides 10-year option exercise windows
  • While this precludes them from utilizing a short-term retention tool, it affords them the ability to do right by the employee and gain an advantage in closing new candidates
  • Asana is trying to make its hiring practices more inclusive. A couple of examples: Reaching out to new networks such as the tech inclusion conference and non-traditional colleges to source more diversely; Creating an interview guide to help employees feel more prepared and comfortable in the interviewing process to accommodate multiple ways of preparing.

I wish more time was spent on discussing Asana’s future vision (a la the title of the session). However, I was impressed by Dustin’s thoughtfulness, especially on fair comp, diversity and philanthropy.

Arguments for keeping the 90-day exercise window as a retention tool are silly to me. You have bigger problems if that’s the only way you can retain an employee.

East and West: Building the Bridge (with Michael Zeisser of Alibaba)

  • China is a huge market but the competition is fiercer than you can imagine
  • According to Michael, China’s growth in personal consumption in the next few years will equal the entire economy of Germany. Not China’s total economy, not the total personal consumption portion of the economy, not including growth in industrial or government spending. Just China’s growth in personal consumption.
  • Needs and culture are vastly different in China vs. the West
  • Building trust is an important part of doing business in China. And it’s a more deliberate and more time consuming activity there.

I continue to be impressed by the magnitude of China’s economic growth and market size. It’s the new (and reversed) gold rush of 1849.

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