Hindsight : CLAY CHRISTENSEN

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Friday, June 14, 2024

HOWARD TULLMAN JOINS LISA DENT ON WGN RADIO TO DISCUSS SECOND CHANCES

NEW INC. MAGAZINE COLUMN BY HOWARD TULLMAN

As a Founder, You Need to Be More Forgiving

You've poured your heart and soul into your startup, so any mistake or transgression your team makes seems like a betrayal. But learning how and when to give second chances is an important part of growing your business.

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

JUN 11, 2024

As a group, entrepreneurs are among the least empathetic individuals in the world and, for better or worse, that's probably responsible for a significant portion of their success. They're also horrible listeners, which is undoubtedly part of the empathy problem, but not really much of an excuse for their studied obliviousness. They're also not very good at being grateful or saying, "thank you," but that's a story.

By way of further explanation, there are any number of drivers built into the entrepreneurial equation: a constant need for speed and being forever in a hurry; a single-minded focus on getting things done; no patience and plenty of paranoia; and a refusal to look backwards, admit their mistakes, or learn from them. None of this rearview mirror stuff for these folks. Of course, these attributes don't exactly help to make them into warm and caring "people" persons.

But there are a couple of elements of the prototypical personality that seem to dwarf all the others in terms of explicating their inability to empathize with, understand, or appreciate the pain and problems of their people.

New business builders believe that there's always an alternative path and a straightforward solution to every problem, so their focus and attention jumps immediately to solutions and the future rather than the present. This is the "get busy and get on with it" element of the process. Let's figure out how to fix the situation. Trouble is, trying to solve the "problem" without listening to the person and addressing their ills as well is -- at the very best -- only going to get you halfway to a satisfactory answer; it's much more like searching in the dark for a candle.

Even more important is entrepreneurs' inflated belief that they've also been there emotionally and otherwise and had plenty of tough times and difficulties of their own. Somehow, they survived, so why can't you? I call this the "get over and forget it" element of the process. Forget your feelings and frailties. Pick yourself up and put it behind you. Don't dwell on the past. Entrepreneurs are always ready to tell you how rough things have been for them and how the struggle only made them stronger. They're all heroic mini-Nietzsches.

Given all the charitable chatter, you would think at least that entrepreneurs are among the very best practitioners of the "forgive and forget" doctrine of personnel management. But they're among the worst even though in building their own businesses virtually every one of them has benefitted from a boatload of breaks, do-overs, and second chances. Notwithstanding their own good fortune, most still have a chip on at least one shoulder and love carrying a grudge or two. This isn't just mentally unhealthy, it's really bad for business.

Learning to truly forgive (even if you never exactly forget) takes some time and practice. When you forgive, you're also acknowledging that you can't change the past. There's a lot to be said for giving folks a second chance. If you don't make room for mistakes and even occasional misdeeds, you're likely to lose a bunch of talented people, cost your company plenty in terms of churn and turnover, and waste a bunch of time that no growing business can spare.

The leader's job is to forgive first when the circumstances are right. But you've got to be careful and know when and where to draw the lines. It takes a lot more strength in many cases to forgive than to struggle on, but you need to be smart about it. There are four critical considerations to keep in mind.

First, any person whose actions impair or demean the basic values of the business -- honesty, loyalty, mutual commitment and sacrifice - gets no pass because the impact and injury is not limited in any sense to the actor alone. It harms everyone. Consistently honoring and enforcing the core values of your company and trusting in them is more important than any given decision or any individual because - especially in a new business where the culture is still being built and affirmed - once you slide, compromise, or change the rules to accommodate a specific case, it's all downhill from there. As Clay Christensen said: "It's easier to hold your principles 100 percent of the time than it is to hold them 98 percent of the time." Decide what you stand for and stand for it all the time. You can't overlook obvious offenses and then pretend that excusing the behavior is a charitable act of forgiveness rather than a craven refusal to avoid conflict and controversy.

Second, disappointment is not necessarily disqualifying. Great expectations (of everyone) are part of the entrepreneur's disease right alongside the highs of unbridled optimism and boundless enthusiasm and the lows of despair, regret and impostor's syndrome. Few, if any, team members (who are merely human) can ever live up to the high standards and demands that the best entrepreneurs ask of themselves and foolishly expect of others. Be smart enough to know when you shouldn't trust your own feelings. Spoiler alert: get ready to be regularly disappointed, but don't take it out on your team members.

An entrepreneur's life is constantly suspended between excitement and disillusionment, doubt and despair, and the occasional nauseous feeling of betrayal. So, it should come as no surprise that, as dedicated and committed as others may be to your dreams, they also have their own lives and families and other obligations. Get used to it. We've all got our duffels of disappointment to lug around. You expect people to be as loyal to you as you believe you are to them and when they're not, you're devastated.

The cruelest disappointment of all is when you let yourself down and the easiest way to do that is to abandon hope in order to theoretically protect yourself from any impending downsides. Don't give up on yourself or your team members as long as they're doing their best, committed to the mission, and giving it all that they can. Not everyone signs up to set the world on fire every day. Forgiveness in these cases is a gift you give yourself.

Third, a breach of trust or law is, by definition, unforgivable. Especially today, trust is at the very heart of every team and every enterprise. For brands and businesses alike, to be trusted is an even greater compliment than to be loved. And, while Hemingway said that "the best way to find out if you can trust somebody is to trust them," a better rule in instances of lying, theft or other dishonesty, is "one strike and you're out." Fool me once, shame on you. Fool me twice, shame on me. As harsh and draconian as an ironclad rule may seem, there's simply no room for excuse or negotiation when the firm's integrity, reputation and honesty is at risk.

Finally, if you're prepared to forgive, make damn sure that the beneficiary is prepared to be forgiven. Acceptance and accountability are central to the process and without a demonstrable and immediate change in behavior, an apology is just words. Convicted felon Donald Trump -- 34 counts -- is a perfect example of a criminal without the slightest sense of remorse; we can only hope that New York State Supreme Court Justice Juan Merchan acts accordingly in sentencing him. Lip service, a smug shrug, or anything else that manifests a lack of seriousness -- "whatever" is one of my favorites-- means that all bets are off, and the business would do much better without the presence of the poseur.

But also, be careful not to make the entire process more painful than remedial and more personal than productive because no one ever really forgets where the hatchet is buried.

Tuesday, November 14, 2023

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

TikTok Now Tops Twitter in Adult News

TikTok Has Tons of Lessons to Teach Entrepreneurs

The wildly popular app may be a target of a China-wary Congress. But what it has accomplished is something that we can't ignore.

BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

Leaving aside all the crazy MAGA conversations about whether TikTok is really another subversive scheme by the Chinese Communist Party (along with Covid-19 and Fentanyl) designed to poison the minds of young Americans, the fact is that there's an enormous amount that entrepreneurs and business builders can learn from the popular app. How is it that, rapidly and remarkably, TikTok has taken over online entertainment media, peer-to-peer education, celebrity commerce, news, and even everyday political conversations?

TikTok has become the short-form, algo-driven, sugary sweet, bite-sized attention grabber that is here to stay whatever you hear or think about the Chinese boogeyman. And it's about a lot more than video recipes for baking drug-laced brownies, fixing your fantasy face, or parkour pranks and bungee jumps. TikTok is a powerful and valuable resource that is changing the daily behavior of tens of millions of people worldwide -- an emancipating revelation for young and old listeners and learners as well as a lightning-fast tool for distributing and democratizing news, content, and commerce. More than a third of the users say that TikTok is where they get their daily dose of news and, overall, they open the app on average eight times a day.

The core and critical TT lessons are less about the content (so much of which is admittedly useless crap) and far more about how TikTok emerged, quickly and continually morphed, and set about eating the lunch of the traditional entertainment and media in what I would call a textbook case of Clay Christensen's vision of disruptive innovation. Except today it happens in triple time. Quick and dirty, simple to use, bottoms up entry, ignored and ridiculed by the big guys for too long, constant iteration based on user feedback and very smart technology. And then, all at once, TikTok is sitting on top of the heap. Creators and visitors today are on the app more than 95 minutes a day on average and about 26 hours a month. 00:00

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Yet the TikTok takeover wasn't exactly an overnight success or even much of a surprise to the folks who were watching and living through the process. Anyone who thinks that the TikTok creators are just a bunch of kids rather than the next generation of entrepreneurs simply isn't paying attention --- attention being the critical currency of today and tomorrow. The TikTokers have absolutely mastered the triple talents of grabbing attention, leveraging virality and engineering authentic engagement. Half a dozen of the TT leaders each have more than 50 million engaged and active followers who are willing to share and spread the gospel daily.

Maybe what spooks the politicians is that TikTok is just getting started in building its economic engine. Already, more than five million U.S. businesses actively use TikTok, including Inc. Sponsors, brands, and advertisers are welcome, and TikTok is building out management and agency support as well as a marketplace for creators to assist in the process of matching the proper parties with the best messengers. TikTok will be the lead sponsor of the 2024 Met Gala. (See https://newsroom.tiktok.com/en-us/tiktok-goes-to-the-met .) Creators will soon be able to sell their merch directly. A billion-dollar TikTok Creator fund will provide direct financial payments to attract, support and compensate new creators. And, in a throwback to the old days of appointment TV, TikTok is launching nightly programming which -- just a guess -- may be the last nail in the coffin of the very old, stale, and tired late-night TV shows.

So, if you're trying to build your business and create buzz, here are four of the most important TikTok tactics to keep in mind.

1. Build a Culture of Support, Cooperation, and Partnership with your Key Players.

Only two industries call their customers "users" -- tech businesses and drug dealers. TikTok decided early on that even "influencers" was too passive a description and not a strong enough identity. "Creators" meant power, agency, and talent as well as a desire to make something. They are happy to work together, collaboratively, and competitively, and alongside TikTok to make their dreams and desires real. Unlike Uber, which treated its drivers as disposable cogs, or other sites which initially served everyone but the talent, TikTok made creators the central focus of its attention from the outset and the creators returned the favor. More than 80% of TikTok's 1.1 billion monthly active users have posted a video. It's a two-way partnership and a mutual admiration society.

2. Explain and Insist Upon a Fierce Work Ethic, Accountability, and Everyday Output.

Creators listen and learn from their peers, copy, and build upon the best work they see elsewhere. They quickly realize that it's a 24/7 undertaking if they want to keep up, build their base, and hold on to their followers. Everything is about speed and currency and, if you don't have something new and different to say today, your visitors will quickly go elsewhere. Interestingly enough, in this rapid-fire world, chunky clunky, unpolished video reads as authentic rather than amateurish. Another lesson the old-time makers never learned. Nonetheless, for the serious creators, it's still a much higher bar than many beginners realize and a lifestyle that leads to exactly the same kind of rude awakening which many new employees in other startups and high-growth businesses experience as well as early burnout. Success in this space also requires that the company itself be attentive, responsive, and infused with the same sense of urgency as all of the other parties.

3. Keep Moving the Cheese and Stay Ahead of the Competition.

When the competition wakes up, we want them to find our smoldering campfires while we're already over the next hill. Iteration and constant improvement are the whole ballgame, and no one has moved faster than TikTok. While the traditional players continue to ask their users to fit within their systems, TikTok listens aggressively to its creators' needs and moves quickly to respond. A great example is the length of permitted videos which started at one minute, moved to three minutes, and is now at 10 minutes. That opened up new opportunities and changed the game entirely. This adjustment was largely creator and data driven. Engaged viewers are far more willing than anticipated to watch their favorite creators' work for longer periods of time.

4. Make Sure Your Technology is Top Notch.

While the front ends of the various video players may look similar, it's what's under the hood in terms of technology and how the specific content is parsed, selected, and delivered to each follower that really differentiates the competitors. TikTok's development of the "For You" page algorithm represented a material departure from the way that the game had been played and a major growth accelerant as well as a powerful tool in securing and cementing engagement. Previous programs fed visitors content from sites that the given viewer followed - a somewhat closed loop and really limited discovery. TikTok's system listened and watched what you were actually selecting and viewing in full as well as what you skipped over and then - from a vastly larger universe - selected and sent you content that the algorithm thought you'd most enjoy. This was a page taken right out the Steve Jobs bible. His famous quote: "People don't know what they want until you show it to them." TikTok did just that.

TikTok has plenty of old and new competitors, but no equals on the near horizon. If politics and regulators don't get in the way, it's hard to imagine that TikTok won't overtake Facebook and Google in the next year or two and become the world leader in social media.