Postal Banking

In most of the developed world today, as well as a fair swath of middle-income and developing countries, you can walk into any government post office and after posting a letter or buying stamps, also deposit money into a savings account that is safe, secure, fully insured, and most of all, free.

“Postal banking” is a phenomenon that most Americans today don’t recognize, but in much of the world, it’s almost the definition of mundane. In the UK, Germany, Japan, South Africa, Korea, India, the Netherlands, China and France, just to name a few, the national postal system also offers basic financial services. Depending on the country, these range from no-frills savings accounts to checking and bill-paying services, to more sophisticated stuff like small loans, money transfer and forms of insurance.

Postal banking is an old idea whose utility for America has returned. We should bring it back, updated for the 21st century. It represents a big solution to two major problems Americans face today: first, and most importantly, low-income communities are seriously “underbanked.” The FDIC finds that over a quarter of Americans either have no access to the banking system or must obtain financial products outside of it (ex. payday loans). Second, the U.S. Postal Service has been teetering on the edge of crisis for years, as legal strictures imposed by Congress starve it of funds and the overall volume of mail decreases. Postal banking would go a long way to restoring its stability.

With large swaths of low-income Americans feeling shut out of the economic growth story happening in much of the country, reviving postal banking should be one part of any progressive agenda to build greater economic resilience and strengthen the social safety net.

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Social platforms and responsibility

I’ve been mulling some words on free speech on the internet for a while, but a couple of pieces on Tyler Cowen’s blog finally moved me to write them down.

Recently there have been many, many white men on the internet extremely concerned about “censorship,” and a lot of credulous observers giving these absurd complaints the time of day. Most of them have the issue precisely backwards. The internet, and democratic society itself, would benefit from a much stronger sense of responsibility by those who own and control the platforms that matter, and by more aggressively nixing toxic and abusive behavior.

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An aside on television

I gave some long thought to this earlier in the gym. Presented here in no particular order is my list of the best-written, best-presented television characters of all time:

  • Jack Donaghy (30 Rock)
  • Omar & Stringer Bell (The Wire)
  • Benjamin Linus (LOST)
  • Ron Swanson (Parks & Rec)
  • Poussey & Suzanne (Orange Is the New Black)

With honorable mentions going to:

  • Tyrion (Game of Thrones)
  • Al Swearengen (Deadwood)
  • Phillip & Elizabeth (The Americans)
  • Josiah Bartlett (West Wing)

These are all amazing works of theater – “television” is a bad label for it. I would have to say that The Wire is probably the single best series of them all. If, somehow, you have not seen it, stop what you’re doing right now and go cue it up on Netflix. For sheer acting talent, Orange Is the New Black definitely leads this list. It’s so ridiculously stacked that there’s no real comparison – I had to drop Taystee (Danielle Brooks) from this list just to not make it ridiculous. LOST’s acting, by comparison, was actually pretty bad – besides Linus (and Hurley), I wasn’t super impressed, but the story was just super compelling. The Americans is probably the least-watched of all of these shows, but I think that’s going to change. It’s an incredible show – great writing, solid acting, compelling drama and all the 1980s kitsch you can ask for. I’m looking forward to seeing more from Westworld, which we’ve really been into, but so far I haven’t been blown away like with these other shows.

Adobe and Transformation

I’ve written a bunch lately about enterprise software and why its future looks bright. (Check out Tech Has Grown Up and Enterprise Software and the Deployment Age if you’re interested.) I’m gonna continue with that theme in this post, in which I’m going to hit a pet interest of mine: Adobe.

I think Adobe is one of the best-executing tech companies out there today. Its transformation over ten years from a license-based professional packaged software company for creatives into a first-in-class, multi-segment enterprise SaaS solutions vendor is singularly impressive. The pace of their innovation, to say nothing of their rocketship business results, are almost unparalleled. I’m not just talking about the stock price – when you actually understand what they had to do as a company to get where they are today, you have to be astonished. Neither the tech nor HBR-reading chattering classes seem to give Adobe the recognition it deserves for this turnaround. The latter group of graybeards mostly doesn’t understand the magnitude of what this transformation entailed, and the former is too in thrall to the GAFA glitz to care.

Here’s a look at what this transformation into a cloud vendor looks like:

Adobe full-year segment revenue (all figures in $MM)
2012 2013 2014 2015 2016
Creative Cloud $117 $472 $1,268 $2,265 $3,370
Marketing Cloud $556 $663 $798 $937 $1,180

I’m going to give my own high-level view here of how this transformation took place, why it’s so remarkable, and why anyone in enterprise software has a lot to learn from it. This post wound up being longer than I intended, and there’s still so much to say. But here goes.

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Resources I’d recommend to new Product Managers

I get asked from time to time what resources I’d recommend a new-ish product manager consult to prepare for the job and level up quickly. I thought about it. Ben, my co-author on Make It So, and I have discussed this a few times. Here’s what I came up with.

Part of the reason why we wrote Make It So was, honestly, because there was really nothing out there we thought fit very well for the challenges enterprise product managers face. So check out the book when it comes out! But in the meantime, here’s some other stuff that will probably help too.

  • Product Management in Practice by Matt LeMay. I was a reviewer for Matt’s book, and can attest that this is an outstanding practical guide to what product management is and day-to-day skills that PMs need to master.
  • The Innovator’s Dilemma by Clayton Christensen. An obvious classic. This is not really PM specific, but key background and foundational stuff to understand.
  • Crossing the Chasm by Geoffrey Moore. Ditto the above, plus this offers a really valuable framework for thinking about types of users and customers to target.
  • The Hard Thing About Hard Things by Ben Horowitz. This gets into the business management/leadership stuff, but I found it extremely readable and informative.
  • Product Management for the Enterprise – this is a video course that I recorded for O’Reilly. (Disclosure: I get paid a little when you watch this whole course.) It’s aimed at people working in product management for enterprise software. I hit on some of the themes from the book in a more encapsulated format, though not all. I think I sound funny.

There is no shortage of leadership/management-y books out there in our space, including many better known than some of these. I’ve read a bunch of them, but personally have found many to be lacking in applicability to what we do, either in terms of not being terribly enterprise-relevant or being hyperfocused on the startup life, which I’m not in. But your mileage may vary.

If I think of more, I’ll add them!

Enterprise Software and the Deployment Age

In “Tech Has Grown Up,” I wrote about how we’re moving into a new stage of the tech industry’s development. A lot of the bigwig tech people around today made their careers (and/or fortunes) in the 2000-2008 GAFA mega-growth cycle, and as a result, over-learned lessons from that period. Since 2008, GAFA has only increased its dominance over the consumer web. As they say, it’s easier than ever to start a consumer-facing company, and perhaps even to advertise for it; but harder than ever to profitably grow.

I mentioned in that post that I’ve been re-reading this talk by Jerry Neumann called The Deployment Age. It’s really excellent. The gist is that cycles of technological progress tend to look like surges of innovation followed by longer periods of adaptation and – you guessed it – deployment. Multiple strands of technological innovation combine to form productive “systems:” think of how steam engines, metallurgy, industrial production and precision machining all had to come together to make railroads possible. It’s pretty clear that similar productive systems using new tech are forming today – indeed, many are already here.

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A year at the shelter

When we moved to NYC last year, I had a hard time adjusting to life in the big city. Soon after we got here, I discovered a homeless shelter that was reasonably easy to get to (right down the 6 off Canal Street), and began volunteering there for a few hours every week. It’s now been a little over a year since I started, and the New York Rescue Mission has become one of the two or three things besides our little apartment and work that I most associate with NYC. It’s a part of my life here now. I want to say a few things about it.

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Tech has grown up

I see this tweet and many variations on it from time to time:

The point the author is trying to make here is something like, “look at how rapid and innovative the tech industry is!” But I take away something quite different from this list.

Frankly, I’m pretty unimpressed. There are some sustaining innovations (Square, WhatsApp) on this list, digital toys, two stubbornly private companies whose real value is still highly controversial, and one – Bitcoin – whose reputedly revolutionary potential has begun to sound a little like cold fusion – forever just around the corner. (Shout out to Josh Cincinnati, a deeply knowledgeable buddy of mine who has helped me understand crypto just a little a bit. You should follow him.)

The transition to an industrial, oil-based economy led to the formation and then consolidation of the oil giants, particularly Standard Oil, whose descendants (post-breakup) include ExxonMobil (both of them), Chevron and a big part of BP. Likewise, the rise of the automobile economy led to the big car companies like Ford, GM and Chrysler. These firms all still dominate their sectors, and continue to rank among the biggest companies by revenue in America. Since 2000, a few big pharma firms and health insurers have joined that list, as well as Walmart, CVS and Apple.

Those of us who grew up experiencing tech’s ascendant rise from the 90s into the late aughts (learning to code QBASIC on a Gateway 2000 – anyone else?) got to witness something quite rare: the formation of a wholly new type of industry. A lot of people, including new types of investors and lots of early (mostly very lucky) employees got extremely rich. Indeed, a large crop of today’s tech VC wealth stems from the IPOs of this ’00s tech cycle. A lot of careers were made, and perhaps accordingly, many lessons were over-learned from this era.

By contrast, in the cycle since the ’08 crash, the leaders of the last one – Google, Apple, Facebook and Amazon – have only strengthened their dominance. Through both acquisition and internal development, they have broadened their grip over the digital landscape: search, advertising, social, commerce, media, more. Everyone points to IBM and Microsoft’s dominance in their heydays as proof that this kind of success is fleeting, but I think that’s wrong; instead, I look at ExxonMobil, Ford and JP Morgan. Success can be sustained over time. Tech is not special that way.

Most investors are smart, and I think they realize that GAFA are here to stay and pre-2008 cycles of mega-growth are unlikely to be replicated. Instead, the path to liquid 100x returns (on which the VC model is based) is to push for an acquisition or, barring that, an IPO. In either case, as I alluded to in “Mercenaries,” tech investors have gotten smarter about ensuring that investors capture more of the upside, regardless of what happens to the share price or, in most cases, employees. This leads to companies prioritizing sheer growth over all other concerns, including profitability. Growth in an attractive market segment makes you an acquisition target by a GAFA, or better yet, a fat-cat non-tech firm looking for a shot in the arm. Ergo, the tediously earnest discussions we see in tech circles of “growth strategies” (growth hacking, hypergrowth, etc) and manipulating CAC vs LTV instead of basic P&L. As a friend put it the other day, there are a lot fewer people working in tech today than you’d think, especially on the consumer side, who have ever had to worry about managing a business to profitability.

My hunch is that most tech-sector venture funds in the post-2008 cycle will not make great returns, relative to the overall market. The VCs will still get paid, of course, and there will be a lucky few outperformers; but in a tech cycle characterized less by innovation than baubles and distractions, returns will be modest.

Someone is going to tweet me to offer Tesla as a counterexample to my generalizations here. This is partially fair, though I await to see how the Model 3 rollout actually goes. Nevertheless, the truly revolutionary stuff Musk spouts off about – massive home-based solar, the PowerWall, tunneling under cities – are still mostly theoretical. I’m not yet a believer, but hope to be proven wrong.

The other area of revolutionary technology that still seems genuinely early-days to me are drones, and drone software. I am honestly fascinated by the potential in this area. (Battery tech, too, but I think that will be mostly dominated by major industrial firms.)

Yet today, what I hear tech VCs chatting about is a new high-end frozen yogurt gadget. One can’t help but think of the $120 million that Juicero raised. World changing innovation, right?

The frothy tech startup scene has mostly had its day. I expect that Silicon Valley has built its last 5,000+ person company (where would you even house that many today?), and that increasingly in the future, the really important stuff happening in tech will come from the majors, not startups. It may be easier than ever to start a company today, but it is harder than ever to scale one. I am re-reading this classic piece, The Deployment Age by Jerry Neumann, with increasing interest. Maybe I’ll write about that later.


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