Coleman McCormick

Archive of posts with tag 'Analysis'

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Weekend Reading: Children of Men, Google Earth at 15, and Slate Star Codex is Gone

June 27, 2020 • #

📽 How Children of Men Became a Dystopian Masterpiece

I didn’t realize until reading this piece that this movie was a commercial flop. $70m gross on a $76m budget. I remember seeing this several times in theaters, and many times after. This retrospective (from 2016) brought the film back to mind and makes me want to rewatch.

🌍 15 Years of Google Earth and the Lessons That Went Unlearned

Brian Timoney:

Google Earth led us to vastly overestimate the average user’s willingness to figure out our map interfaces. The user experience was so novel and absorbing that people invested time into learning the interface: semi-complex navigation, toggling layers on and off, managing their own content, etc. Unfortunately, our stuff isn’t so novel and absorbing and we’ve learned the hard way that even those forced to use our interfaces for work seem very uninterested in even the most basic interactions.

It’s great to see Brian blogging again!

📄 Doxxing Scott Alexander is Profoundly Illiberal

What’s happening between the New York Times and psychiatrist-rationalist-blogger Scott Alexander is incredibly disappointing to see. In writing a story including him, they want to use his real name (which they found out somehow, S.A. is a pseudonym), which seems completely unnecessary and absurd to the point of disbelief — given the Times’ behavior and policies of late, there should be little benefit of the doubt given here. As a result of this, Scott has deleted his blog, one of the treasures of the internet.

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Weekend Reading: The Anti Portfolio, Downlink 2, and nucoll

February 1, 2020 • #

📂 The Anti-Portfolio

Bessemer maintains this page of companies they passed investing on. I like the idea of publicly acknowledging your big misses or errors as an organizational accountability tool. Some big names here like eBay, Airbnb, Google, and FedEx.

Almost a year ago I shared a link to the first version of Downlink. The main feature added here is you can create your own custom views by putting a bounding box around your area of interest. Then you’ll get a live look at the Earth as your desktop background.

🐦 nucoll

A collection tool for retrieving and analyzing Twitter data. I’ve seen some neat social network analyses shared from folks that have used this to map degree relationships between Twitter accounts.

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Weekend Reading: Enemies of Writing, Wealth, and the Superhuman Inbox

January 25, 2020 • #

✍🏼 The Enemies of Writing

A great piece from the Atlantic’s George Packer, a transcript of his acceptance speech for the Hitchens Prize.

At a moment when democracy is under siege around the world, these scenes from our literary life sound pretty trivial. But if writers are afraid of the sound of their own voice, then honest, clear, original work is not going to flourish, and without it, the politicians and tech moguls and TV demagogues have less to worry about. It doesn’t matter if you hold impeccable views, or which side of the political divide you’re on: Fear breeds self-censorship, and self-censorship is more insidious than the state-imposed kind, because it’s a surer way of killing the impulse to think, which requires an unfettered mind. A writer can still write while hiding from the thought police. But a writer who carries the thought police around in his head, who always feels compelled to ask: Can I say this? Do I have a right? Is my terminology correct? Will my allies get angry? Will it help my enemies? Could it get me ratioed on Twitter?—that writer’s words will soon become lifeless. A writer who’s afraid to tell people what they don’t want to hear has chosen the wrong trade.

💵 Wealth Is What You Don’t Spend

Morgan Housel:

It might seem obvious that savings is your ability to reject what you could spend. But the majority of financial goals are about earning more – better investment returns and a higher-paying career. There’s nothing wrong with that. Earning more is wonderful, just like exercise. We just shouldn’t lose sight of the fact that earning more will do little for building wealth if every extra dollar is offset by a dollar of new spending.

The world is filled with the financial equivalent of athletes who finish every workout with four Big Macs. Wealth, at every income level, has less to do with your gains and more to do with your ability to leave gains alone without cashing them in.

📨 Superhuman and the Productivity Meta-Layer

An interesting response argument to Kevin Kwok’s post from a while back called the Arc of Collaboration. The meat of the argument is that corralling notifications from the dozens of input streams we all have is challenging, and that a “command line”-style interface like Superhuman’s could function as a filter point to visualize the input stream, but also engage with items in real time. A compelling case with mockups of how it could work (if service providers wanted to plug into this sort of “notification nexus”).

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Weekend Reading: The Worst Year to Be Alive, Chinese Sci-Fi, and Slack Networks

December 7, 2019 • #

🌋 Why 536 Was the Worst Year To Be Alive

You may have thought the entire 14th century was pretty bad, or maybe 1918 with its flu pandemic and millions of war casualties, but how about the 6th:

A mysterious fog plunged Europe, the Middle East, and parts of Asia into darkness, day and night—for 18 months. “For the sun gave forth its light without brightness, like the moon, during the whole year,” wrote Byzantine historian Procopius. Temperatures in the summer of 536 fell 1.5°C to 2.5°C, initiating the coldest decade in the past 2300 years. Snow fell that summer in China; crops failed; people starved. The Irish chronicles record “a failure of bread from the years 536–539.” Then, in 541, bubonic plague struck the Roman port of Pelusium, in Egypt. What came to be called the Plague of Justinian spread rapidly, wiping out one-third to one-half of the population of the eastern Roman Empire and hastening its collapse, McCormick says.

That sort of worldwide famine caused by devastating volcanic eruptions would’ve been impossible to deal with. And the Plague of Justinian was no small thing either, thought to have killed up to 25% of the global population.

Life is good these days.

👽 How Chinese Sci-Fi Conquered America

The Remembrance of Earth’s Past trilogy (translated by Ken Liu and featured here) is one of the best sci-fi works there is, regardless of origin or era. I also read and enjoyed Liu’s Paper Menagerie collection of short stories. I didn’t realize how involved he was personally in bringing so much new material here, and introducing so many Chinese authors to wider audiences:

He has found sci-fi stories in unusual corners of the internet, including a forum for alumni of Tsinghua University. Chinese friends send him screenshots of stories published on apps that are hard to access outside of China. As an emissary for some of China’s most provocative and boundary-breaking writers, Liu has become much more than a scout and a translator. He’s now a fixer, an editor and a curator — a savvy interpreter who has done more than anyone to bridge the imagination gap between the world’s current, fading superpower and its ascendant one.

His job as a translator, given the sensitivities of the material and the players involved, is a complex one:

“It’s a very tricky dance of trying to get the message that they’re trying to convey out, without painting the writers as dissidents,” Liu told me over coffee one day, as we sat in the kitchen of his home in Massachusetts. “A lot of Chinese writers are very skilled at writing something ambiguously, such that there are multiple meanings in the text. I have to ask them, how explicit do you want me to be in terms of making a certain point here, because in the original it’s very constrained, so how much do you want me to tease out the implications you’re making? And sometimes we have a discussion about exactly what that means and how they want it to be done.”

💬 Why Shared Channels Are So Cool

We’ve not scratched the surface much on Slack’s Shared Channels feature, but where we have it definitely makes staying plugged in with important tangential networks (like customers and partners) dead simple and much more engaging.

This network analysis uses some interesting visualizations to show the topology of the network, with its subnetworks creating a connection graph of communication pipes.

Also on an hourly basis, these mini-networks from the outer ring get sucked into the internal mega-network, as connections are formed between organizations on the inside and the outside. The overall result is a roiling sea of proto-networks surrounding an ever-expanding network of super-connected teams.

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On Retention

July 12, 2019 • #

Earlier this year at SaaStr Annual, we spent 3 days with 20,000 people in the SaaS market, hearing about best practices from the best in the business, from all over the world.

If I had to take away a single overarching theme this year (not by any means “new” this time around, but louder and present in more of the sessions), it’s the value of customer success and retention of core, high-value customers. It’s always been one of SaaStr founder Jason Lemkin’s core focus areas in his literature about how to “get to $10M, $50M, $100M” in revenue, and interwoven in many sessions were topics and questions relevant to things in this area — onboarding, “aha moments,” retention, growth, community development, and continued incremental product value increases through enhancement and new features.

Mark Roberge (former CRO of Hubspot) had an interesting talk that covered this topic. In it he focused on the power of retention and how to think about it tactically at different stages in the revenue growth cycle.

If you look at growth (adding new revenue) and retention (keeping and/or growing existing revenue) as two axes on a chart of overall growth, a couple of broad options present themselves to get the curve arrow up and to the right:

Retention vs. growth

If you have awesome retention, you have to figure out adding new business. If you’re adding new customers like crazy but have trouble with customer churn, you have to figure out how to keep them. Roberge summed up his position after years of working with companies:

It’s easier to accelerate growth with world class retention than fix retention while maintaining rapid growth.

The literature across industries is also in agreement on this. There’s an adage in business that it’s “cheaper to keep a customer than to acquire a new one.” But to me there’s more to this notion than the avoidance of the acquisition cost for a new customer, though that’s certainly beneficial. Rather it’s the maximization of the magic SaaS metric: LTV (lifetime value). If a subscription customer never leaves, their revenue keeps growing ad infinitum. This is the sort of efficiency ever SaaS company is striving for — to maximize fixed investments over the long term. It’s why investors are valuing SaaS businesses at 10x revenue these days. But you can’t get there without unlocking the right product-market fit to switch on this kind of retention and growth.

So Roberge recommends keying in on this factor. One of the key first steps in establishing a strong position with any customer is to have a clear definition of when they cross a product fit threshold — when they reach the “aha” moment and see the value for themselves. He calls this the “customer success leading indicator”, and explains that all companies should develop a metric or set of metrics that indicates when customers cross this mark. Some examples from around the SaaS universe of how companies are measuring this:

  • Slack — 2000 team messages sent
  • Dropbox — 1 file added to 1 folder on 1 device
  • Hubspot — Using 5 of 20 features within 60 days

Each of these companies has correlated these figures with strong customer fits. When these targets are hit, there’s a high likelihood that a customer will convert, stick around, and even expand. It’s important that the selected indicator be clear and consistent between customers and meet some core criteria:

  • Observable in weeks or months, not quarters or years — need to see rapid feedback on performance.
  • Measurement can be automated — again, need to see this performance on a rolling basis.
  • Ideally correlated to the product core value proposition — don’t pick things that are “measurable” but don’t line up with our expectations of “proper use.” For example, in Fulcrum, whether the customer creates an offline map layer wouldn’t correlate strongly with the core value proposition (in isolation).
  • Repeat purchase, referral, setup, usage, ROI are all common (revenue usually a mistake — it’s a lagging rather than a leading indicator)
  • Okay to combine multiple metrics — derived “aggregate” numbers would work, as long as they aren’t overcomplicated.

The next step is to understand what portion of new customers reach this target (ideally all customers reach it) and when, then measure by cohort group. Putting together cohort analyses allows you to chart the data over time, and make iterative changes to early onboarding, product features, training, and overall customer success strategy to turn the cohorts from “red” to “green”.

Retention cohorts

We do cohort tracking already, but it’d be hugely beneficial to analyze and articulate this through a filter of a key customer success metric is and track it as closely as MRR. I think a hybrid reporting mechanism that tracks MRR, customer success metric achievement, and NPS by cohort would show strong correlation between each. The customer success metric can serve as an early signal of customer “activation” and, therefore, future growth potential.

Customer success leading indicator

I also sat in on a session with Tom Tunguz, VC from RedPoint Ventures, who presented on a survey they had conducted with almost 600 different business SaaS companies across a diverse base of categories. The data demonstrated a number of interesting points, particularly on the topic of retention. Two of the categories touched on were logo retention and net dollar retention (NDR). More than a third of the companies surveyed retain 90+% of their logos year over year. My favorite piece of data showed that larger customers churn less — the higher products go up market, the better the retention gets. This might sound counterintuitive on the surface, but as Tunguz pointed out in his talk, it makes sense when you think about the buying process in large vs. small organizations. Larger customers are more likely to have more rigid, careful buying processes (as anyone doing enterprise sales is well aware) than small ones, which are more likely to buy things “on the fly” and also invest less time and energy in their vendors’ products. The investment poured in by an enterprise customer makes them averse to switching products once on board1:

Enterprise churn is lower

On the subject of NDR, Tunguz reports that the tendency toward expansion scales with company size, as well. In the body of customers surveyed, those that focus on the mid-market and enterprise tiers report higher average NDR than SMB. This aligns with the logic above on logo retention, but there’s also the added factor that enterprises have more room to go higher than those on the SMB end of the continuum. The higher overall headcount in an enterprise leaves a higher ceiling for a vendor to capture:

Enterprise expansion

Overall, there are two big takeaways to worth bringing home and incorporating:

  1. Create (and subsequently monitor) a universal “customer success indicator” that gives a barometer for measuring the “time to value” for new customers, and segment accordingly by size, industry, and other variables.
  2. Focus on large Enterprise organizations — particularly their use cases, friction points to expansion, and customer success attention.

We’ve made good headway a lot of these findings with our Enterprise product tier for Fulcrum, along with the sales and marketing processes to get it out there. What’s encouraging about these presentations is that we already see numbers leaning in this direction, aligning with the “best practices” each of these guys presented — strong logo retention and north of 100% NDR. We’ve got some other tactics in the pipeline, as well as product capabilities, that we’re hoping bring even greater efficiency, along with the requisite additional value to our customers.

  1. Assuming there’s tight product-market fit, and you aren’t selling them shelfware! â†Š

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Weekend Reading: Rays on a Run, Apple's Pivot, and Mapping Grids

May 18, 2019 • #

⚾️ The Rays are a Surrealist’s Delight

Love to see the Rays getting some deserved attention in the mainstream sports media. They’ve put together a great, diverse lineup of consistent hitters that have performed well all season:

The Rays emphasize power now, but in a different way: Through Monday, their hitters had the highest exit velocity in the majors, at 90.1 miles per hour, and their pitchers — who specialize in curveballs and high fastballs — allowed the lowest, at 86.3. Hard-contact rates enticed them to trade for Pham from St. Louis last July, and to land Yandy Diaz in an off-season deal with Cleveland. Pham was hitting .248 for the Cardinals, but the Rays assured him he had simply been unlucky; he hit .343 the rest of the season.

And I get to post this on the back of their 11th inning win over the Yankees this afternoon.

📱 The Pivot

Great quick read from Horace Dediu on Apple’s Services business. As he points out in the piece, Apple’s business model is continually oversimplified and/or misunderstood by many:

This disconnect between what people think Apple sells and what Apple builds is as perplexing as the cognitive disconnect between what companies sell and what customers buy.

Companies sell objects or activities that they can make or engage in but customers buy solutions to problems. It’s easy to be fooled that these are interchangeable.

Conversely Apple offers solutions to problems that are viewed, classified, weighed and measured as objects or activities by external observers. Again, it’s easy to be fooled that these are the same.

🧭 Mapping Gridded Data with a Voronoi Diagram

This post goes into how the author put together a visualization of tornado trend data for Axios. Observable notebooks are so great. The interactivity lets you not only see the code and data to create it all, but can be forked and edited right there.

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