The Short Stack 🥞 Vol #26
First emailed to newsletter subscribers on June 17, 2017
Good Morning All ✌️
Welcome to your weekend dose of the Short Stack. We understand time is limited this weekend, considering we know you’re all watching the new Rihanna video on repeat. (Or maybe that’s just me? Nope, no way.) But if you get some downtime, read on. This week we examine how curiosity leads to innovative and creative breakthroughs. Plus, Episode 26 of The Journey gives insight into iterating on our product and process at Jakt.
Ok Baiiiii 👋
Making Movies 🎬
Episode 026, by our CEO Anthony Tumbiolo.
☝️ Here are the things we’ve been thinking about this week.
At Jakt, we’re on a mission to positively impact as many people as possible. We’re also on a mission to use work to become better humans ourselves. So in addition to our insight on design, innovation, product, and company building, we’re going to start providing a little more intel on things we’re working on personally. We’ve touched on the impact that our own coach has made on our overall happiness and productivity at Jakt. Think of this as us paying it forward, serving you some helpful hints we’ve picked up on our own journey.
Building on last week’s Short Stack, where we discussed learning vs. goal setting, this week’s theme is curiosity. Approaching any situation with curiosity — whether it’s a business problem, a relationship issue, or product snag — means letting go of whatever the outcome might be. We humans love to forecast results before they happen, even the ones over which we have absolutely no control. Staying curious lets us focus on what we can control by letting go of whatever “way of being” we’d typically use by default in the given situation. Let’s look at some examples.
I, Mike, have a tendency to approach challenging situations with avoidance. Case in point: When I was working on Wall St., my bank account grew as I moved up the corporate latter. I stopped paying attention to my budget as closely (how much $ I was spending) because, for the first time, I didn’t have to. This was avoidance. Similarly, as I left my job at Oppenheimer to help start a company that wasn’t yet funded, my bank account shrunk. I loved what I was doing but hated seeing my account diminish, so I stopped looking at it for a while. This, too, was avoidance — a defense mechanism I used to distract myself from reality. Avoidance is a way of being that’s destructive to curiosity and can lead to much bigger problems than whatever is being avoided. In other words, the issue doesn’t lie with whatever it is you’re avoiding; the issue lies with avoidance itself. When you fear what’s on the other side of a problem, opportunities to be innovative are missed.
Examples where innovation is lost —
- Managing finances. XYZ Company has bootstrapped its way to 500K users without ever raising capital outside of seed money from friends and family. Management has always paid close attention to the finances, and while never profitable given the nature of the business and its growth plans, the cash burn rate has always been relatively small. The same company raises a $2M Series A. Now, with a bank account, management stops paying as close of attention to the finances because, well, it doesn’t have to! What used to be a close eye on cash burn turns into high rent, excessive sales and marketing spend, and two or three non-technical employees who probably shouldn’t be employed at the company until Series B. This happens over and over again in Silicon Valley. The game becomes raising more money to stay afloat instead of working on the business model and focusing on achieving break-even cash flow. This isn’t creative nor innovative despite what the conventional Silicon Valley story portrays.
- Managing work relationships. Julie, a salesperson at XYZ Company, is frustrated with her superior Margarette. Julie is having a challenging time managing a large customer who’s thinking about leaving for a competitor. Julie hasn’t dealt with this type of situation before, and she wishes Margarette would step in and help her with the client. Julie wants Margarette to do something — step up — but she’s never directly asked Margarette for help. She’s created a sad story about Margarette’s leadership capabilities without curiosity for Margarette’s side of the story. Perhaps Margarette is overwhelmed. Maybe she’s afraid of stepping on junior salespeople’s toes. Or maybe she believes the hands-off approach will yield better long-term results by letting junior salespeople figure out tough situations through trial-by-error. Either way, the opportunity for innovation, through having empathy for Margarette, is lost.
Approaching shit head-on with curiosity allows you to problem solve and be truly creative. This is where the magic happens —
- Managing finances. One of XYZ Company’s investors asks for a quarterly update. XYZ Company’s financial manager, Joe, starts putting together the report and notices the cash burn is significantly higher as a percentage of sales. Joe could explain away the cash burn in his investor report by stating higher sales and marketing expenses. But this would be avoidance. Instead, he decides to call a meeting with senior management to examine exactly why the cash burn had increased to this extent. Turns out, none of the sales and marketing hires had produced positive ROI. In fact, the returns on S&M dollars spent were far higher before XYZ Company raised its Series A. Through close examination of its financial ratios, XYZ Company innovates on its sales and marketing practices. Instead of salary plus equity, XYZ Company offers its salespeople cash incentives which closely align with the company’s revenue targets. It also begins A/B testing marketing strategies, tracking the return on every dollar in various channels to determine what’s working and what isn’t.
- Managing work relationships. Julie receives a call from her large client which indicates the customer is going to leave for a competitor. She immediately approaches Margarette for help, but because Margarette appears busy with other things, Julie assumes Margarette isn’t willing to help. Instead of falling back into her story about Margarette, however, she approaches the situation with curiosity. Julie walks back into Margarette’s office and firmly requests a meeting. During the meeting, Julie says, “Look, Margarette, I’m worried ABC Client is going to leave. It’s important to both the firm and to me that we keep them around.” Julie then presents her solution and asks for Margarette’s opinion. “I haven’t dealt with this particular situation before, and although I have a solution, I would really love your advice.” It’s now obvious Julie cares about doing a great job and looks up to Margarette as a leader. Together, Julie and Margarette come up with an innovative strategy which involves attractive pricing and incentives for 1 year, so that XYZ Company can prove they’re the right choice. Moreover, Julie has now opened up a whole new word of possibilities in her working relationship with Margarette. She later learns Margarette was overwhelmed at the time. Margarette had never managed such a large team and was also in need of advice given her new position. Relationships strengthen and both Margarette and Julie can become influential leaders.
By approaching situations with curiosity, we can avoid our default and sometimes damaging behavior patterns, opening up space for innovation and creativity.
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