Hey, everybody. I apologize in advance
because it’s going to be the equivalent of a 3-hour workshop jammed into,
I think 45 minutes or is it 25 something, about 45 minutes. I also realize I’m
standing between you and lunch so I’m going to try to make this pretty quick.
Fear not, there’s going to be a lot of text here it’s going to be a bit of a
deep dive on a lot of things. We’re not going to cover it all but if you
want to follow me on Twitter, I will post a link to this entire playbook
for you. My contribution I’d like to give to you in this giant potluck feast of
ideas is for those of you that want to work in this field of longevity,
of transformation, of self-empowerment. It’s for you CEOs, founders,
for you coaches that are looking to make a living out of this. It’s kind of a
playbook for building the longevity of your business in this area.
Mayfield fund is where I work. I’m one of the partners there.
Mayfield is actually one of the first venture capital firms in the world.
So, some quick stats have been around for almost 50 years,
have done almost 500 deals. And, these date way back to Atari and
Genentech and Compaq and companies way back then way before I was even there.
But, you might know us and more for some of our companies today which include Lyft.
We were the first investor when they were called Zimride, and back then it was the
craziest idea of who the heck wants to get in a stranger’s car.
I personally lead the consumer practice and, I’ve been fortunate that
some of the investments I’ve led in and be involved in have generated close to two
and a half billion of realized market value. So, I want to share the
patterns and best practices, the tips and tricks I’ve seen from that.
Other companies that are in this world of commerce or consumer or
self-empowerment, transformation, include companies like Classpass,
Poshmark, Lumosity, which is early pioneer in brain training. I saw them ramped up to
a hundred million in subscription revenues.
Companies like Tripp which are trying to do consciousness alteration using
virtual reality. So, you could think of it as a digital
psychedelic, if you will. One of the first wearables companies
called Basis. Dave Asprey has been a longtime friend so helping them out
Bulletproof. Geoffrey Woo’s company, HVMN, which has distilled ketone esters to help
you the benefits of prolonged fasting with a energy shot that could displace
things like red bull or a five-hour energy drink. But more importantly,
I’d like to share a bit about my story. There’s sort of the yes,
I’m from Silicon Valley and sort of venture capitalist. But, really,
I’m just kind of an overgrown geek. And, it starts from here,
I grew up in this state, Michigan. And, in the early 80s,
my dad brought home one of these things. And, I said, “What’s that? He said,
“It’s an Apple II computer.” And, I said, “Cool, I want to play games on it.” And,
he said, “It’s 1982 there are no game companies.” He chucked an Applesoft
manual at me and said, “Why don’t you learn to make your own?”
And, that embarked a lifelong love affair with screens like these.
I spent hundreds of hours sitting in front of screens like these,
playing these role-playing games where I’d obsess over maximizing or minimizing
statistics of these made-up characters, these alternative personalities that I’d
pretend to be. And then, it dawned upon me later in life,
how come so many of us who play games obsess about these pretend characters when
we don’t pay the same attention to our stats in real life? Hence,
was born kind of this notion of, “If life is a game, why don’t we treat and
master it like a game? If we are our own game characters,
how would we min/max these? How do we gamify our existence and track
these sort of things?” My other big obsession was growing up with
superhero comics and stories. And, what I noticed about them is they
always had a unique individual identity that was usually born out of extreme
challenge or pain or something that just about killed them.
And, in coping with that, they figured out their superpower. And,
what I loved is there was always room in the pantheon for one more.
Nobody was trying to become Batman 3. They were all coming up with their own
identity and there was always a new costume or set of tights they could put on
that was unique to them. And, I loved that the universe could
accommodate them all. My other big love as Mia talked about was
music. And, this has been a form of my own identity but also for me,
the magic of mashups. This is one of the bands I
perform in called Black Mahal. It is literally a Punjabi hip-hop punk
collective. So, we have the equivalent of George Clinton of doldrums,
the older gentleman in the middle. We have the champion battle scratch DJ,
freestyle rappers, I played the bass in that. And, normally,
there are styles that would not work together but somehow we’d lump them all
in. and, we’ve been able to play the Vancouver Winter Olympics,
Montreal Jazz Fest. And, it’s kind of the magic of when you
treat life like a giant, potluck festival of different
superpowers, you put them together, weird magic will ensue that you could
never plan for. So, I’m a big fan of that as a playbook. My other favorite place is
the Playa at Burning Man and if you’ve never been, please go once in your life.
This is what I like to say, this is the most evolved form of our 10
year old selves before self-judgment, before critics came in.
It’s where you get to be that alternative superhero character or that videogame
alternative personality. And, what I really love about this, it’s
how wonderful humanity can be when there’s no money, there’s no agenda,
there’s no programming. You are the programming. Okay. So,
the areas of investment I look at range quite a bit. These are literally the
future of work, the rise of the freelancer economy, on-demand
services, the future of shopping, how are we going to buy things and consume
them? Do we have consumers as the curators? The future of health and
wellness that ties to the longevity theme quite a bit, the future media marketing.
We’ve all seen what’s happened when you hack or weaponize things like social media
and perhaps, learning now that free and ad-supported can lead to behavior
manipulation that we never anticipated. The future of play. When we can remix our
reality, how do we want that reality look through things like VR, AR, mixed reality?
The future of smart homes. Who here was a big fan of the movie,
Herwhere Scarlett Johansson is your personal operating system did you fall in
love with or Jarvis from Tony Stark’s Iron Man house, right? My favorite growing up
was do you remember in the early Star Trek, Captain Kirk when he wanted
something, he’ll just say, “Computer,” and it would just respond?
Kind of reminds you of Alexa and where things are headed today. But,
the bigger picture is trying to look at where we’re headed for the future of
literally everything from money, capitalism, voting, the future of food,
the future of death. Really, I think what we’re talking about
is actually the fate of humanity and I will touch upon that in a second.
So, what is going on? What’s around the corner?
Is it all gloom and doom? Here’s the big trends to watch out for.
In essence, this year, we’re going to have 10 billion plus mobile
connected devices. That’s more devices than people on the planet.
Everything around you, everything in your home,
everything even inside you will get connected to the Internet,
the so-called Internet of Things as they grow ears and eyes and brains.
They’re going to be learning about us enhancing our reality.
Also, we are now addicted to messaging apps, chat.
How many of you are on Telegram or WhatsApp all the time even more than
Facebook and Instagram itself, right? These messaging apps become the new
Internet and they know everything that we say, they know all our conversations.
This creates this huge digital footprint, this digital exhaust of all our behavior.
Something I like to say is that, you know, profile pages is the aspirational self we
have. We all like long walks on the beach, we all like puppies and sunsets,
but the truth is I could probably get a better love match for you by looking at
your shopping habits on Amazon, your adult content search,
the things that you actually do as opposed to the things that you say you are,
and that’s the opportunity right here. Where we’re headed. So,
I was a PhD fellowship student in control systems engineering. In control systems,
there’s just one big loop. It’s a feedback loop. And,
the theory behind this whole thing is that you observe it, you measure it.
Because you can’t control that which you don’t look at. Second is, you analyze it.
How do you make sense of it? Once you can analyze it,
you can start to tweak it, you can write it, you can give some
feedback to control it, and then, you can improve or optimize it,
you can evolve it. This loop is the framework I think of for how we can
systematize self-improvement, we could hack the world,
hack our environment, and this feeds into I think the key
ingredients for longevity. I was early on a proponent and
practitioner of quantified self. I remember meeting Tim Ferriss at Summit
Series and he had just done a subdermal implant. And, I said,
“Dude what are you doing?” He’s like, “I want to track my bio signals in real
time.” Dave Asprey, Dan Party, these are all friends who taught me a lot
of the practices that Ben had talked about earlier. And, it’s amazing what you
can do when you start to hack your bio signals, right? But,
the principle behind quantified self also extends to life in general.
What happens if you take the same measurement, optimization loop,
and apply it to work? I can analyze all your emails,
I could look at the email open rates, I could have AI then help you write your
emails better than you could. Quantified play and entertainment.
By tracking what you watch, what you read, I might know what to recommend you next.
Netflix has built a pretty big business out of that. Quantified commerce and
consumption. Amazon knows everything you’re buying in real time,
trying to suggest, trying to predict what you’ll get next. Even attention and
intention, looking at your browsing habits the YouTube videos you watch,
your Instagram, you know, kind of rabbit holes.
How many of you have spent time where you’re on Instagram,
next thing you know you’ve looked at 45 minutes worth of donuts and then thinking,
“Oh God, I didn’t mean to do that,” right? That’s because that endless newsfeed knows
what rabbit hole you’re going down and feeds you more of it.
I even think you can quantify love and relationships. If you look at
messaging patterns, frequency words, you could probably predict when two people
are about to fall in love. Quantified home, pet, baby, parent,
it applies to everything in life. Sports, learning, creativity,
these are all things that can be measured, understood, enhanced. So,
we’re going from simple quantification where you measure things to then,
using technology to understand it and then help us get better at things.
That’s my main thesis on this whole area of longevity and the business of it.
Really, what we’re going to have is this entire digital selfie of your life.
All aspects, health, work, money, environment, content.
You will basically be a data portrait of your actual behaviors. You know,
in the old days your whole life was summarized in a one sentence obituary in
the paper. You were born this year, died this year, you had this many kids and
that was it. Pretty soon, your next sort of obituary, if you will,
could literally be an entire day-by-day, second-by-second representation of
everything you’ve ever done, seen, thought, said, texted, etc.
That digital selfie will be a composite reflection of your entire life because the
behaviors are there and trackable now. Where are the business opportunities for
this? How many of you have felt frustration in scenes like this, or this,
or this, or this? These experiences are all going away really fast and this is
where you can make a lot of money by helping get rid of these things,
because humans hate now dealing with these sort of long waiting, forced face to face
kind of queues that we used to suffer with. Instead, you’ll have experiences like
this. This is a early Silicon Valley startup called Magic where you literally
could text anything. And then, you would have things like flowers show up
to your mom or you would have a car show up to pick you up to the airport. And,
the thing is you couldn’t tell were you talking to a human, AI or both. Now,
we’ve gone so far that a startup called Lark has shown that by having a pocket
coach, therapist, could be more efficient, have better efficacy than actually
in-person visits with a therapist for one hour. They just got FDA approval
and now can be prescribable and this is showing better efficacy than live therapy.
But why? Why are we working on all this stuff? What’s the point of this?
This is actually nothing new. For millennia, since time immemorial,
human beings have been looking for frameworks to understand our behaviors,
to be able to shape them to figure out which Star Wars figure are you?
We all sort of remember those social quizzes, that personality
profiling, we’ve been looking for that for years and years. Actually,
I like to say the fortune teller, the soothsayer is the world’s second
oldest profession. So, it was first about selling you the tea
leaves but really selling you what do these tea leaves mean?
What is the interpretation of that? And, I would say that, you know,
the roots of longevity, self-improvement were in this so-called
self-help industry, the $10 billion dollars of books and seminars and DVDs and
workshops. What does that actually get you, though? Gets you a lot of
information but not necessarily a lot of help in getting people to transform.
Where is the money behind this? If the ’80s were about Richard Simmons,
again, if people woken up to the notion of physical fitness,
if the 2000s were about understanding the fitness of the mind and the importance of
mental health, I would say we’re headed towards now the fitness of your soul,
your spirit. I like to define longevity then as kind of self-development 2.0.
This is where we can bring together old meets new, east meets west,
sensors and the sensei, tech and wisdom, data, intuition, AI and spirituality or I,
like, even say math meets magic. The formula that I think is kind of
interesting is until now, we’ve had a lot of coaches,
we’ve had a lot of one-on-one training, but when you can combine that with the
always-on, see everything nature of AI machine learning, combining that together
can create this notion of what I call precision wellness, where you’ve got
continuous measurement, remember tracking everything, but then,
you can have optimization with coaching. Human coaches that are scaled up by being
able to serve thousands of clients at once because they have AI agents working and
understanding what’s going on. That shifts this notion to having an
always-on concierge, a curator for all aspects of your life,
and being able to supplement that with a tribe, cohorts and communities of
people going through the similar challenges and transformations that you’re
undergoing in all these aspects of your life. It’s kind of moving towards
this notion here. I just love this movie,Herwhere Scarlett Johansson is your
personal operating system. The vision could be of your own pocket
angel, you know, on your…living in your phone, could become your best
friend, your lover. It is maybe the technological version of the old, mirror,
mirror on the wall. But really, at its best, I think it’s decision
support. And, what I mean by that is we are overloaded by a number of choices that
we have to deal with in this world. You go to the buffet at lunch here,
you have more calories than you could shake a stick at you. Go on Netflix,
there are so many shows. I don’t know if you have this but I go to
binge-watch something, I spent 30 minutes just looking through
the choices and never end up watching anything because I couldn’t
figure out what to choose. Amazon, do a search for red shoes,
a thousand pages to search through. It’s actually too much.
We’re looking now to get help with offloading that because every choice
you make is cognitive load. It actually tires you out to think about
those things, right? So, where I think we’re going is if we
have this better machine intelligence, it leads to better human intelligence,
maybe better humans. It’s an area that some of us like
Mikey Siegel, Nicole Bradford, former A-Fester, has called transformative
technology or consciousness technology. There’s a whole stack of technologies in
this area of human improvement, longevity, sensors like wearables,
data technologies like analytics, there’s genetic technologies like CRISPr,
where you can edit your genes as simple as copy/paste, Word document processing
now. Chemical technology, smart drugs, psychedelics, material science advances.
Neurotech, EEGs, fMRIs getting smaller and smaller,
accessible to everybody. Cyber technologies where we’re going to be
able to hack our wetware, our biology, our neural interfaces.
Behavior technologies, this is the ancient wisdom, coaching,
social psychology, therapy, group meditations. Spiritual technologies,
fits in these as well. These are a combination of human practices
as well as cutting edge data, hardware sciences as well. This does leave us to a
brave new world, but it’s not necessarily all shiny there. Could we have technology
that helps us self-regulate and transcend, help us navigate this world
of way too much abundance, way too many choices that we have deal
with? We’re moving away from just having the attention economy,
the Facebook economy, to what I think of as the story economy.
The biggest thing of all is helping people figure out what is your identity,
your personal story, expressing it, sharing it, figuring it out.
We’re going to see the rise of super and transhumanism because of all these
augmentations. And maybe, just maybe we’re headed towards this
notion of a collective consciousness, that’s what maybe neo tribalism is all
about. This could also lead to a new cybernetic divide. William Gibson always
said, “The future is already here, just not evenly distributed.”
What that means is, early adopters or sadly, the rich, are the ones who get
access to things first. What if we create a divide where you have
post-humans and then everybody else? There’s a wonderful book I like.
It’s a science fiction trilogy which I think is the successor to The Matrix
called “Nexus”. It’s a wonderful read on a science fiction version of this as well as
Yuval Harari’s “Homo Deus” on where things are headed. All in all though,
technology is neither good nor bad. Like all things in life, meditation,
drugs etc., it’s just a tool. What matters is the intention and the
energy you bring to it. What are you trying to do with it?
Give you an example, VR, AR this could be a wonderful machine for
generating empathy and compassion with others. Or if you could hack your
perception to be exactly what you want, why would you ever leave it? Maybe a
big business opportunity in the future is VR addiction clinics for people who don’t
want to leave that perfect utopia. So, for you as founders and business
peoples, you probably often have to talk about how you’re going to grow your
business. You may have to seek funding. You might have to pitch it to investors or
angels. When you look for funding, investors will always say we look for
three things. We look for a great team, we look for traction,
is there some sign that there’s product market fit? And, we look for a big theme,
is there something that could be a huge massive outcome, the so-called unicorn
worth a billion dollars or more? What we’re really saying though,
we’re looking for good storytelling from you supported with data.
Why? Everything in life is storytelling. Fundraising is storytelling. Recruiting,
sales, business growth, building your communities or making a
movement. Even when you sell your company and go IPO, it all hinges on your
storytelling ability. And, the core of all stories is the hero’s
journey. If you know Joseph Campbell’s template,
every story is the same meta story. There is a reluctant hero,
gets stressed in a magic world gets mentors, enemies,
faces an existential challenge, figures out some way to deal with it,
is transformed and then returns home. This is the prototype for every business,
every self-transformation journey, every tribe has to go through this.
This is actually the core of every good business, it’s the core of every good
life actually to me. So, think about you when you are designing
your product or service. Are you engineering a player’s journey,
a hero’s journey for your user that they go from being a newbie to becoming
onboarded, they become a regular, and then someday, they become a leader or
elder. If you can architect that, it’s a wonderful way to look at how your
user advances over time. In fact, game designers even build this into how
they architect products. There’s the onboarding phase for newbies,
there’s habit building loops, and there’s even a mastery level when you
become a guild or team leader. So, you can bake that into your service.
My friend, Nir Eyal, writes a wonderful book on habit design
and it’s all about trigger theory which is that you have to design triggers that lead
to good actions, you reward them right, and that you create investment in that
habit to have an ongoing behavior. So, Nir Eyal, N-I-R E-Y-A-L is a wonderful
person if you want to learn about designing these engagement loops.
If you want a successful business, though, we ultimately know what business are you
in? What is that business model? What are those archetypes? And,
that’s what I want to kind of walk through in this section.
Again, there’s a lot of text, I’m not going to cover it.
I’m going to put the link for this deck up on my Twitter so you can have all of
this and read it. But, there’s classical business model
archetypes. You’ve got, you know, product maker, you’re a manufacturer,
you could be a merchant, you could be a community,
distributor of content, you could be a coach,
you could be a trainer. These are classic business models. But really, what’s worth asking is what
are you selling? Are you selling a product? Is it apparel,
is it supplements, is it devices? Are you making that product?
Is it your own brand or are you curating and collecting third-party products and
selling them together? Are you selling software, apps, chatbots,
maybe even AI? Are you a content vendor? Are you providing paid or ad-supported
content? Or maybe you’re a marketer, you’re endorsing, you’re an influencer,
you’re sponsoring, you’re certifying things. There are many
different things you could sell here all the way down through you are producing
paid events and gatherings, you could be nonprofit, there’s newer models,
you could be selling tokens and cryptocurrency of what you’re doing.
You could even be selling money itself. You could be offering financing, lending,
leasing, fundraising. These are all different types of things
that you might be selling. But, I kind of want to give you a little
advanced tip. Did you ever play that game the fortune cookie one where you open your
fortune at the end you tack on “in bed?” This is sort of equivalent to what I’ve
been thinking a lot about about what business are you in that you think
you’re in but what could you be in or should you be in? So,
instead of tacking the words “in bed” on to what you’re doing,
could you tack on the word as a service? So, instead of selling devices or gadgets
or wearables, could you sell it as a service? Instead of selling kind of
supplements, could you sell it as an ongoing service,
something that’s recurring? So, service business model types,
this part I think is the future and can really help you turbo-boost your business.
There are the basic things we’ve seen in the self-help industry until now which
is help me track something that’s data research, help me understand it:
that’s coaching, training, education, there’s help me make something:
which is design and manufacturing services,
help me market it and promote it: advertising, influencers. But,
the big opportunity, you know, how I talked about we’re overloaded with too
many choices. I think what we really need is to help people get away from just
having tools and information and education to helping me do it.
It’s really offloading all of that work because even for me as a hardcore body
hacker and then studying ketogenic diets and all these supplements,
the list of things to keep track of that Ben walked through, I took copious notes,
it’s at least 50 things there to do. But, it’s almost even easier if somebody
takes away all my choice in the day and says, “Here is what you do,
you have no choice.” That’s actually how celebrities,
Fortune 500 executives do so well. They have personal staff that removes
choice, tells them what to do. They don’t question it,
they just follow it. So, can you for your business instead
of giving tools and information to just empower people? Ultimately,
we’re too busy, we might be a little bit lazy. Can you help them do it?
Can you help me decide? More than that, can you help just do it for me?
Can you offload it for me? Can I outsource it to you?
Can you automate it for me? Once you get it for me,
can you help me set it up? Can you manage it? Can you maintain it?
Can you help me finance it? As an example, instead of me buying it,
could you just lease it to me? How many of you are basically Apple
product addicts, you just buy whatever comes out with? Instead of like having to
worry about when it gets upgraded, wouldn’t you just rather pay like a yearly
subscription and just have them send you the new thing? That’s kind of an example
for how businesses as a service can be recurring when it could be more rental and
subscription. Plus, as it is, Millennials and Gen Z,
they don’t want to own stuff, they want experiences.
Buying crap actually creates more cognitive load, because you got to find
places to store it, you got to take care if it breaks, reselling and getting
rid of it is a pain in the ass. Who actually likes buying and owning
furniture anymore? It’s things like that, right? The biggest one of all,
help me tell my story and connect with others around it.
That’s ultimately what we’re looking for. Figuring out your identity,
helping you tell that story and connecting with others to see, does anybody else
resonate with this? Is anybody else on the same journey?
That is probably the biggest business opportunity of all. The ultimate business
longevity, I actually think of longevity, is not about more,
it’s not about more lifespan, it’s about less and more quality.
So, less choices, less noise, less distraction, less calories,
less fear, less busy work, less cognitive load.
It’s kind of a subtractive process for those of you who meditate,
have you noticed that it’s something about getting rid of all these extra
impulses, these distractions. It’s the same thing also in fitness,
in nutrition, it’s cutting out the things that don’t serve you well.
Enhancing your life is removing stories and narratives
that no longer serve you. Ultimately, I think longevity is
subtractive in its nature. So, the real business,
what we’re really selling in longevity, simplification,
which can lead to the room to have empowerment.
A transformation along the hero’s journey, the keys though are with that process
helping people figure out their own story, their identity, and then,
forming a community of connecting with others around that. Long, long term,
I actually think we might be headed towards a form of digital immortality.
From remember, think, and do it for me, all the way to remember me,
characterize me, synthesize me, and then think and do as me.
Imagine the chatbot that would be able to talk to your great grandkids in the
same language that you use? That would be able to talk like you do,
respond like you do, learn new information, integrate it,
process it like you do? These technologies are already here.
There’s so much corpus of data, if you gave me your logins for your email,
all your text message apps, all your social media,
running a semantic analysis on that, I could probably synthesize a chatbot that
could fool half the people into not knowing it’s you on the other end of it.
So, these are kind of really interesting ways that we’re approaching another form
of longevity. Not just extending your biology, but maybe your consciousness
itself. Some lessons learned. I’ll give you an example.
I helped to found one of the first wearable companies, a heartrate tracker
called Basis. And, we thought we were selling devices but it turned out to be a
lot harder than that, because to build these connected devices,
we had to build this Avengers-like team of all these different ninjas
that came from different skill sets. If you’re trying to do a business as a
service, that means you might have to be able to build hardware, software, apps,
data tracking, APIs, all these things that’s kind of like
running four or five companies in one. So, you have to have talent that spans
that range. A lot of these people might never have sat under the same roof before.
So, being able to recruit from across the spectrum is a skill set you’ll need to
have. Second, the notion of don’t just build it and they will come.
Maybe, you could pre-sell it, you could crowdfund it,
you could do an ICO around it involving crypto. It’s a really interesting
way to reduce your risk around it and test product theories before you have to invest
in making stuff. Quick example. You could run just on your credit card,
a Facebook ad just to see would people sign up on a wait list before you actually
commit to building something. You’ve got Kickstarter as well.
Another thing I like to say is, we’re no longer in the business of getting
customers and audiences, we’re trying to build movements.
You want communities that will have ongoing support for your product and
ongoing demand after that crowdfunding campaign.
You know that you have a community when users are sharing stories of how they use
your product, service, event whatever it is,
that you hadn’t even thought of. If they come up with ways that it helps
them, that they explain to others, that it wasn’t even in your marketing
copy, you’re on to something there. Another advanced trick for you is
bundling. This is a great way to add extra margin into your product.
A lot of times you might think oh I’m selling a new supplement or I’m selling a
new tracker for my breath or whatever it is. Humans we are a little bit kind of
like lazy in nature but we also kind of sometimes want the easiest
decision-making factors for us. So, as an example, in your shopping cart,
if you have sort of a basic plan, silver plan, gold plan,
if you default it to the deluxe starter kit and you add extra straps and batteries
an extra six months of subscription and buy one for a friend,
most people will just accept that? And, what’s nice is those extra
accessories, the extra battery packs whatnot, it’s usually pure profit
margin. And, you can boost the amount that you’re selling and people will default
right to it. When people believe it’s good for them, they simply want the best
package. Another advanced trick from Dan Ariely, a great behavioral
economist, is the notion of in your shopping cart, always have the VIP baller
plan. And, that might be the lifetime subscription or something like that for
some outrageous price. You’ll be surprised,
0.1% of your customers will convert and buy that thing. The secondary benefit it
will lift the next highest plan up by 7% conversion rate. That means if you had a
gold plan, that’ll go up by 7% because people will see the super lifetime baller
plan and say, “The gold plan is not too bad in comparison.” So,
there’s little tricks like that. As I’ve talked about, think of everything
as a service. Since software and services are eating everything, hardware,
consumer packaged goods, how can you make it a recurring service?
It’s more healthy for you as a business because you have more repeatability and
forecast-ability as well. As we talked about before,
many of us in this room do a lot of coaching, we do a lot of lifestyle
design, we do a lot of teaching. The notion is instead of one time
coaching, can you or a limited number of clients you could support,
can you supplement that? Can you provide concierge-like services?
Can you provide ongoing tracking? Can you use automation,
machine learning to help you scale up and support thousands of clients at once
without degrading the quality of the connection you’re offering people,
and giving yet around-the-clock service by automating some things?
I’ll give you one example. Text messaging with templates is a great
way to do daily data collection. You ever notice if you’re a teacher,
you answer the same questions over again and you’re just looking for input,
how was your week? How was your day? Those things can be automated by box
agents that can handle that for you, and then you as that concierge can look at
the exceptions or the yellow flags as they pop up. Hence, you might be able to do
10x, the number of clients that you could support otherwise before.
One of the main points of this, too, is if you used to just sell data know-how
information to people, it’s good but it doesn’t really change
behavior. People need the human touch. You need that other person who is your
concierge, your coach, that adds a little bit of fear, a little bit of
accountability, it gives you a bit of that bedside manner. So, I’ve always found that
this human touch of coaching is superior to just data, just dashboards,
just those sort of information, recipes. There’s also this notion of the channel
dance, who you’re actually selling to. Many of us here start with direct
consumer, we’re doing e-commerce, we’re doing infomercials,
we’re doing all those sorts of Direct Selling. But,
if you really want to scale your business you might get to 10, 20,
30 million a year on direct consumer. But, where things really start to explode
to the 100 million level, is then when you start to be able to sell
to employers. The thing is if consumers like it, employees and HR benefits
managers will look at it and say, “I need that for my employees.”
That’s what happen to companies like Fitbit and others. And,
if employers start buying it in bulk and offering it to employees as a subsidized
sort of purchase, more employees will pick it up. And, if employees and employers
really pick up, insurers and payers will start to look at it.
That’s how your business can turn into the billions of dollars mark.
But it’s an interesting channel dance that you start with consumer,
that goes to employers, if you get employers that’ll lead to the
insurers and payers. Never go the other way around because if
you start trying to sell to the insurers and the health care system,
you could just run out of money and be beating your head against the wall for
years trying to crack into that as opposed to getting organic adoption.
So, I’ve got 10 minutes left. I’m going to buzz through some of these
again. This is going to be on the deck that I’ll put up for everyone to see.
But, in commerce, what are the opportunities? I still think there’s a
lot of room for all of us entrepreneurs in the room to make money outside
of just selling against Amazon. Selling against Amazon is tough.
They always win if you know what you want to buy. The good news,
half the time you want to buy something, you’re doing it for entertainment or
discovery you don’t know the exact SKU or model that you want and that’s the
opportunity to win against Amazon. Right? It’s when people are buying for
entertainment, self-expression, the when they want artisanal or custom
goods, when they want unique brands that are collectibles or handmade that aren’t
available on Amazon, or the other model we talked about.
Instead of buying stuff, maybe they just want to rent it or share
it or try it as opposed to owning, right? And, this is where I think us as
entrepreneurs should focus. The Playbook that we’ve had, in Mayfield,
is something I call the three Cs, and this is great for next generation
commerce and service and product companies. It used to be you
focused on one of these three Cs. the first one being are you a content
company or a curator? Do you tell people what’s cool?
That’s the old magazine business. Here’s what’s new, here’s what’s coming.
The second Cs you might be a community like a Reddit or those old forums like
homeavforum.com or you’d host discussions about things where people could geek out
about products. Or, the third is you were a commerce company, you
are actually selling this stuff. Today, to be a world-class company,
you might actually do all three of these. Just like you’re the magazine,
you are the online discussion forum and you are the marketplace all in one.
If you can do that you, get a really wonderful virtuous cycle around how your
business operates. There are also six other emerging Cs which are kind of fun
that I encourage people to look at. Crowdsourcing, the wisdom of the crowd.
Your users might know your product or what to build better than you do.
Get their input, deputize them, recruit them as the merchandiser of the
buyer maybe even the designer of your next product or service. If they do that,
they’ll even pre-buy it. They’ll do pre-sales, they’ll crowdfund
and tell you that they’re ready to buy. Right? If you are building a community out
of your users, they also want to trade with each other. So,
this notion of C2C marketplaces, enthusiasts, passionate customers,
they want to buy, sell, trade their stuff with each other and do a
lot of shared storytelling in the process. You can offer coaching and concierge on
top of this to help people manage their lifestyle, offload decisions,
tell them what to get, buy it for them, set it up for them, do it for them.
We’re going to have then conversational commerce,
chatbots messaging bots, which help automate that process to be in
touch. Like Scarlett Johansson in that movieHer,talking to your customers
around the clock all the time, hearing their stories, interpreting them,
telling them back. What is it that they’re actually looking for?
What should they get next? And then, cryptocurrency.
Maybe your next company is a network protocol, maybe it’s tokenized,
maybe you do an ICO on it instead of a traditional corporate model.
If you are in the product and service business, I highly encourage you
to see if you can make first party products, have your own brand over
time. Even if you just do kind of a private label, maybe you start by curating
other great products. But, then you start to introduce some of
your own brands on top of it. Costco has done this then with Kirkland
brands Best Buy has done this with their Rocketfish brands. It’s wonderful to build
more profit margin and more exclusive products you couldn’t find on Amazon.
So, how do you know if you’ve got a good business? Key metrics.
What are the numbers that can tell if your business is scaling pretty well? Well,
it’s not just the amount of revenue. A lot of entrepreneurs will pitch me and
say, I’m doing $100 million of revenue a year. But,
the real question is, what’s the quality of that revenue?
Quality is defined as what are your gross profit margins? And,
the real litmus test is what is known as a contribution margin.
After you strip away marketing costs, warehousing cost, returns,
credit card processing fees, all those sorts of things,
what is the actual contribution margin profit that comes to that?
If you’re doing over 20%, that’s a world-class business.
If you’ve got high gross profit margins of north of 50%, it’s a good way to start.
But, if you’re only selling other people’s products and Amazon is squished you down
to like 10, 20% gross margins, that’s really tough.
That’s like barely basically living on oxygen-deprived kind of lifestyle right
there. The other notion is to grow your business, there’s something called a
payback period versus your CAC. CAC is your Customer Acquisition Cost.
How much money does it take for you to get a paying customer? How much do you have to
spend on Facebook Ads, Google etc., and then, how long does it take you to get
that recovered? World-class metrics are if you can on this contribution margin basis
pay back your cost of acquisition within three to six months,
you’re doing something really well. If it takes you a year,
two years to get back that acquisition cost, that’s really tough
because what that means, we get this growing gap between how much
you grow versus how much you’re returning your investment on getting new customers.
The other health metric is how long does it take to double your cost of
acquisition? If you can do it in 12 to 18 months, that’s pretty strong. And then,
my favorite hack of all, instead of one-time purchases,
can you turn every customer into a recurring revenue opportunity?
Could you do subscriptions? Can you do bundles? Can you be a lessor,
a financier, a lender? If you can do that, you get this wonderful repeating and
building revenue stream instead of just a one-time episodic kind of sale.
If you are selling products or services, see if you can get this mix between your
own produced brand and maybe curated products somewhere in the 50-50.
Why not just do a 100% first party? Actually, something we found is if you’re
trying to get more share of wallet in a category, let’s say you’re doing
organic soaps or something like that, you will expand your share of wallet if
you’ve got a good mix of your own products that are unique, that stand out,
that helps people remember you and you have a competition power against Amazon.
But, if you also can curate the other stuff they want from other brands,
you will eventually capture more share of wallet in that category for them. So,
something we’ve seen that’s really powerful, if your mix is 50% your
own unique products, 50% curated products which fit the
customer need, you get more share of that category and your overall profit margins
go up. Some other key metrics. How addicted are you to paid acquisition?
How much do you have to spend on Facebook Ads to get more users? Ideally,
if you could be doing 50% of your traffic or your business through organic channels,
meaning word-of-mouth, referrals, non-paid, that’s a really,
really good sign. It could be that you’ve got a movement going on.
If you are doing paid acquisition, try not to be just dependent on Facebook
or Google. In fact, ever since Facebook’s been criticized for a lot of the data
hacks they’ve had, Facebook paid spend is actually going up in terms of how much it
cost to get a new user, because they’re able to use less and less
targeting. A lot of our companies have seen the cost of acquisition on Facebook
is going up, that paid acquisition spend per user, because they’re unable to target
as much, they have to be very careful with how much data they’re using now.
Can you use other channels like Instagram, Reddit, Nextdoor is one that hasn’t been
thought about a lot but there are other platforms out there you could use for paid
acquisition. Okay. Like I said before, community effects. You know you’re doing
well if it’s not just a customer you have but you’re inviting them to share their
stories, how do you use the product, what other products do you use it with,
what is your setup, what’s your configuration? Because really,
if you think about it, your customer’s journey,
their experience begins when they get that box from you, when they get that beginning
of that service. You want to invite them to share their story because they’ll
recruit with others. And your product is really meant to help
them figure out their story, their identity, how they improve
themselves with it. There’s a lot of case studies here. Some of my favorites are
Peloton. You would have thought it was just a simple fancy exercise bike. But,
it’s really exercise bike as a service. It’s useless without the cloud-connected
classes and so they’re really a subscription company.
The same thing with e-commerce companies like TrunkClub, Dollar Shave Club,
they turn their customers into repeat subscribers instead of just one-time
purchasers. In the world of longevity and precision wellness, Illumina has created
mass genetic sequencing for everybody, bringing it pretty close now we’re well
under $1,000 bucks you’re probably approaching $100 for genetic sequence.
This opens up all new personalized wellness opportunities for your gut biome
like you biome. Companie like Helix where they’ll take your genetic sequence,
then try to personalize everything from your supplements to the food
to the fitness regimen that you should have. Right. We’ve got new businesses going on
in brain training and mindfulness, meditation that’s tech-enabled,
companies like Lumosity, Headspace calm.com. These are all
companies have shown you could scale up to $100 million dollars of
subscription revenue by helping people with their transformation each day.
We’ve talked about next gen foods and smart drugs all these different kind of
companies providing products that are replenishables and will likely be
subscription business as well. And then, my favorite is in the coaching world.
Many of us in this room do a lot of coaching in behavior change.
There are companies like Retrofit, Waybetter, Strava that have shown how you
can combine technology and in-person, connection and community to really scale
up and build up coaching businesses. I’m going to end on this.
What is really at stake? Why are we trying to build business in
longevity? Why is it so important? I think that we’ve got one big disease
that business is really stuck on and this notion of growth. We’re addicted to
growth, that things should keep growing, we should sell more, produce more,
consume more. Thing is the only thing that grows non-stop in nature is cancer until
it kills the host organism. I think we need to move beyond mindless
consumption. And, so what we’re trying to do is rewrite what are markets?
What are corporations? Are we moving more towards things that can
help us share more, reuse more, maybe spend less but spend more wisely.
Spend better. Remember that notion of getting rid of too many choices and
getting down to what serves you the most? If anything, I think we’re in a battle
with our monkey and our lizard brains that always wants more. Wants more sex,
more novelty, more calories. We’re trying to shift from the scarcity
mindset to this abundance mindset. I think that’s what future businesses will
be built on. And if, anything it’s maybe hitting a planetary
equilibrium because basically, let’s face it, we got 30 years to figure
out how to feed 12 billion plus people when we have a planet that mathematical
models show support three to four billion people maybe. So, really I think with
longevity, with this consciousness technology, it’s our duty
as a species. We’re trying to reach the next wrung on the
evolutionary ladder. And, to do that we got to get beyond this
current adolescence phase we have when we’re addicted to more stuff,
more production, more content, more news. What we really want, I think, the mission,
has been talked about knowing your purpose is your business helping everybody do one
of three things I think humans were put on this planet to do. First,
heal whatever trauma or challenge that superhero kind of existential crisis
you’re facing. It might even be, whatever you inherited from your parents
or their parents before them, if you can help them heal and understand
that, you give people the freedom to figure out what is their truest form of
play? What is it that makes them feel most alive? They were put here to do,
puts them in that flow state. And then the biggest hack of all,
if you can turn your play into something beyond ego, beyond achievement,
into a form of service. That, I think, is the biggest playbook of all. And,
that, in many ways, is invaluable and is actually, when people take what they’re
put here to do and use it as a forum to help the rest of the world,
have it as a gift and offering to the whole universe itself. So,
I hope that is helpful for folks and thank you very much your time.