Product Thoughts

Being Messy

Photo by todd kent on Unsplash

Chanel Miller said her New Year’s resolution for 2020 was to fail as much as possible.

“Making things that are really crappy and undeveloped until maybe they can be good. I’m way too young to confine myself to one lane and lose the ability to openly experiment.”

This is exactly how a the first draft of a film script develops. Characters and ideas float around in your head, and one day, they’re done with the floating and demand to live on the page. The script gets written, and when you’re done… it’s shitty. It’s embarrassing, you don’t want to show it to anyone, and you wonder how on earth your magical characters and ideas amounted to this pile of doodoo on the page.

But, it’s really important to have this first draft. Because as Miller said, yes, it’s crappy and undeveloped, but you need the crappy and undeveloped to have hope for the good and the great.

Struggling, wrangling, failing, crying, working, pushing forward allows your characters and your story to breathe, thrive, and for the bones to slowly emerge from the pile. Experimenting openly, taking the story in unexpected directions, adding or removing key characters, and messing around with no pressure allows the sparks of creativity that makes the script sing.

Every creator needs that messy time.

The same is true for startup creators. Ideas for a product form in your head over time, sometimes over years. Then one day, you’re ready to put it on the “page” — to code something, to craft something. And it may be a sloppy, messy ball of hair, mud, and hope. Don’t clean it up, polish, and shine it in order to raise money too early.

Love your messy stage, because it is so important to relish that stage. You can only do it once for each startup, and it’s when experimentation, ideation, hanging out, and trying weird things is entirely possible. It’s where ugly is awesome.

At some point, a screenwriter will have to share the script with producers. At some point, you have to share your startup with users and, if you want, with investors. If things go well, they love it, and you build an amazing company. Fantastic.

If you’ve grown your company into a wonderfully world-changing one, it’s worth finding ways to go back to being messy. Get into small groups. Make room for experimentation with ugly, creative things that may fail, because that can lead to new lines of growth. If you have the urge to start again, you could start another company and embrace the new ugly ball of mess. Whatever path you follow, the messy part of creation can be the the best part of creation, and the challenge of it makes your ideas and your company better.

Hardware as a Moat

Photo credit: Peloton

When investors look at companies, one of the things we try to understand is whether the company can build a moat. In tech, a moat is a conscious business design choice that allows a company to develop and maintain a sustained competitive advantage over other players in the space.

Economies of scale and network effects are two of the best-known moats. But there are others—like deep tech, etc. Today, I want to propose a new moat: hardware. I’m talking about products like Peloton, where the hardware is central to having the full experience.

In the wellness space, software solves real problems, and the app ecosystem in these spaces is thriving. These apps help with things like meditation, period tracking, sleep tracking, and exercise of all kinds. But in a crowded market like that, investors ask, “How does a company win?”

Now, when you have “just” apps in these spaces, with no connected hardware, they are fungible. To move from one app to another, you just… click. If you have paid an annual subscription, you might wait until it expires, or you might just eat the cost and try a new app regardless. With these apps, there may be UI differences or instructor differences, but the experience is largely similar. The customer choice is being made based off of relatively small differences.

As my colleagues and I have written, in a software-only space where differences are minimal, a product-led community can be a great moat. Another moat could be sales to enterprises, where a company buys the app/service as a benefit for employees. If you lock up as many companies as possible, very quickly, the employees of those companies become your customers. But this kind of lockup, while valuable, may not be driven by passion or love for the product.

So, a moat that could be longer lasting is hardware. Yes, hardware often scares VCs, because it can be complicated. You need to create processes around mailing things out, dealing with returns, production challenges, and more. There seems to be an endless list of issues.

However, hardware has changed over the past few years, becoming easier to manage than it was 10 years ago. A whole ecosystem of companies has emerged to support hardware companies with many of the logistical issues. And engineers, product people, designers, and marketers who have built and shipped multiple versions of good consumer hardware are available in the market.

In a crowded software market, hardware can be your moat.

The most successful of these companies is Peloton. If you buy a bike (or presumably a Tread), to just get your hardware to turn on, you have to pay Peloton $39 a month for a subscription. And while your parents’ generation ended up using exercise equipment mainly as a clothes horse, these new devices are a joy. They are well-designed, they are connected, they often have community elements, and they have a rich user experience that’s compelling and powerful. So, sure, much like your parents, you could turn your Peloton into a dumping ground for your shorts and t-shirts, but once you’ve bought a device that costs several thousand dollars, the additional monthly pinch of $39 is likely making sure that you are using the device. Their numbers back this up: their S1 claims 95% 12-month retention for those who buy their hardware. Even if it is a bit lower, like some analysts debate, it’s still incredibly strong. Also, just yesterday, agreeing with this point of view, Lululemon bought Mirror, a connected hardware exercise mirror, for $500M.

Photo Credit: Core

It is even better when the hardware gives you unique data. For example, our portfolio company Core provides your Heart Rate, your HRV, your minutes of calm, and your minutes of focus for each session. Because you are holding a device that vibrates to give you a point of focus, and that same device gives you all this data, once you’ve bought a Core, you’re unlikely to want to use anything else to meditate. Same goes for Peloton.

In addition, unlike another apps on your phone, which are all behind the black glass screen, hardware is visible. You can see your Peloton bike in your house, your Core trainer on your desk or bedside table. And by being visible, and by being well-designed, they beckon to you to use them and experience the tactile, live user experience with them. They exist in the real world.

These are still the early days of connected hardware, but between the physical presence, the cost paid to acquire the device (which could be a proxy of customer commitment), the tactile experience, and the data generated, these devices can serve as a moat in crowded software markets. Over the next few years, companies will evolve their model and create fantastic new experiences for consumers. Both as a user and as an investor, I am excited to see where this world goes, and I’m excited to use these beautifully designed products and apps to achieve my goals.

Standing and driving

I’m bought into the whole standing and working thing. I don’t do it enough, but sitting hurts my back and I feel better when I stand.

While this is starting to be a fixable problem in the work environment, one place where there is no alternative is the car (or any kind of transport). Why can’t we stand and drive?

standriving

Or how about seats like this where you are sit-standing? Even this, would be a huge improvement over the one option we have today.

Focal-S-2

Cars would get taller, yes. That’s bad for aerodynamics, so the designs would have to change around them.

The only other alternative is where you are almost reclining, like a race car driver – but I’m not sure people want to crawl into their cars.

I hope someone in the car industry is thinking about this as they rework most of the other things about how cars and transportation work.

*Image of standing driver made in Paper by FiftyThree
*Sit-stand seat is the Focal Seat