A Blended Life: living and working after the pandemic

As a parent of two kids in the NYC public school system, I am anxiously awaiting the start of the school year and our local school’s approach to blended learning.

“Blended learning” was not a mainstream concept one year ago, and now every parent and child in the school system in America has blended learning experience and adjusting to this new normal. Within weeks last spring, kids, parents, teachers and administrators figured how to deliver and receive educational instruction through technology such as Zoom and how to hand in and check assignments through tools such as Google Classroom.

It was really painful in the beginning, but we’ve learned the basics. Over the summer schools have been iterating their curricula and approaches so that the return to school is successful. Our kids continued their education this summer with content providers such as Khan Academy and live courses with Outschool and Context Travel. My kids learned about dinosaurs live with a British Museum paleontologist and Galileo with a Venetian historian. This would not have been straightforwardly possible last summer.

Blended will be a permanent shift to the way we approach education, even when things return to normal. Medium term, we’ll continue to get better at it, and create a superior educational experience. More possibilities for live and personal instruction; easier communication and collaboration between parent, teacher and student; more democratized access to high quality educational content at schools with increasingly limited resources.

For the vast majority of companies, I believe remote-only is a holding pattern until it feels safe to return to work again. However, blended work is another shift that will remain beyond the pandemic.

Many friends in Europe are already back in an office environment several days of the week. Other friends who work in the legal and financial services world have been individually productive throughout the pandemic, but at the sacrifice of new business development and organizational development for more junior team members.

Even in the tech world, once product development cycles are exhausted and what to build next becomes the highest priority, in-person is a much more efficient means of figuring this out. Most people I talk to greatly miss office interaction. Humans crave in-person contact generally. Interviewing, onboarding and integrated new hires over Zoom is possible but also has real challenges

Still, we’ve all embraced remote organizational management over the past few months, and this will permanently alter the traditional office experience for most areas of knowledge work.

I don’t believe we are likely to return to a mandated 5 days per week in an office for most knowledge companies. Work from home will become a permanent allowance by most knowledge employers. This is a welcome development for many reasons — more time spent with family and loved ones, less time commuting, less colds & flus going around the office all winter.

Some roles will be remote, which opens up the hiring pool dramatically, with the added benefit of allowing organizations to hire staff in lower cost locations. Formerly this would have been considered the domain of call centers and low-cost engineering hubs — now, its entirely normal.

Another blended industry will be conferencing & events. At the beginning of COVID-19, live conferences were cancelled as providers were waiting to see what happened next. Yet with no improvement to the travel situation in sight, I’ve seen a proliferation of live online conferences priced similar to their offline counterparts. In our world, Virtuoso Travel Week moved online with Swapcard — and it was actually pretty great. In many ways, virtual conferences are superior to their real-world counterparts — seamless breakout rooms, more structured interaction, cheap & easy to record and share content + live sessions with participants, post event collaboration. And how many potential attendees can virtual events now address without the requirement to travel — both financially and logistically? Event organizers can dramatically reduce overhead, pass savings on to customers, and greatly expand addressable market — even when live events are feasible again.

Cultural travel is another category that would have been unthinkable to deliver a viable online experience even a year ago outside of niche use cases. But with travel plans on indefinite pause and a generation of lifelong learners now armed with Zoom, at Context we’ve been able to participate in the emergence of an entirely new type of cultural experience.

Nothing replaces the enrichment and passion awakening that live travel provides — however even in normal times these experiences are inaccessible to many and highly occasional for most. Among those that can afford it, how many people will actually be able to visit all of the destinations on their bucket list, or even fully explore their favorite country? How many countries have rich history & culture and are no longer safe to visit? How many travelers have experienced a transformational experience on a trip but can’t imagine getting back to that destination or meeting up again with the historian that taught you all about Venice?

We launched our live online offering, Conversations, in March. This offered customers the opportunity to engage in a live online dialogue structured around cultural travel and history with our network of scholars — every day of the week. More recently, we launched online courses — deep dives into topics that would formerly have only been available at the local university — another activity not currently possible. It’s not a replacement for travel — its an enhancement of our overall cultural and historical education. Our customers are telling us these online experiences fit neatly alongside travel plans and local cultural offerings — even in a normal year. In a post-pandemic world, cultural experiences will now be available before a trip, during a trip and after the trip — or without the trip. The future of travel is blended.

Many other aspects of life, such as healthcare, health/wellness and fitness have been similarly altered. We’re only beginning to see the emergence of these blended ways of living, working, educating, and spending leisure time. The combination of COVID-19, software and high-speed broadband has permanently changed the game. It’s exciting to imagine the possibilities of a blended life in the coming years.

Maybe now is when that bad idea will actually transform the company

I really enjoyed Benedict Evans’s annual tech trends presentation. It’s worth going through in its entirety.

One of the ideas in the presentation is that as of 2019, the world is a very Internet-enabled place. There are 5.5bn people on earth, and 4bn have a smartphone.

Now that we’re all online, all sorts of new businesses can be built that weren’t possible a decade or two ago. This has enabled the explosion of D2C e-commerce, platforms to support e-commerce (e.g. Amazon third-party, Shopify) and Netflix / Prime Video (at the expense of paid TV subscriptions).

Indeed:

I think this idea is broadly applicable.

Changing circumstances —> lots of new possibilities.

That failed marketing campaign? Maybe it was actually the ‘then’ website capabilities.

That failed product launch? Maybe it was just pricing.

That failed new hire? Maybe it was the wrong role spec.

Companies are complex systems and the dynamics are always changing. In the modern era, healthy growth company capabilities tend to get exponentially better over the course of a year or two - more and better data, better tech, better insight, better team collaboration.

Maybe now is when that bad idea will actually transform the company.

Knowing What You Want

We lost a candidate for a senior role recently. Losses always hurt, but are of course normal to some degree in startup recruiting. Part of being a startup by definition is having more constrained resources yet needing higher levels of talent than the average employer.

What surprised me about this loss was that at the initial screen, we seemed to be exactly what she said she was looking for. Our specific stage of maturity, role scope, product offering. The role she ultimately accepted was at a later stage company in a totally different line of business. 

Over the past decade or so of building businesses, I’ve been struck by how few people seem to really know what they want professionally, and pursue it intentionally and aggressively as a result. These are the candidates that network their way to someone on the leadership team, that can answer the ‘why’ question with a high degree of fluency, that aren’t running personal auction processes.  

Job boards like Indeed make applying for lots of jobs at the same time incredibly easy & efficient. Yet how many applicants bother to submit cover letters? Read about a company, then apply directly on their career page? In my experience: less than 2%. 

Recruiters bring opportunities to candidates who are particularly attractive, at least on paper. Professionalized talent functions operate in a similar way. Update your LinkedIn profile & wait for the opportunities to come you. I’ve had candidates tell me about past job searches where they’ve gotten ‘several offers’, but didn’t end up accepting any. Perhaps that speaks to the qualifications of the candidate, but doesn’t offer much assurance that they’re taking a proactive approach to building a career. 

It’s easy these days to be professionally reactive, but is this best for the individual or the organization? Is it coincidental that as it's become easier to lob in job applications or wait for someone to find you, employee satisfaction is dropping? We need dynamic organizations built by proactive people who want to come together to solve hard problems relating to a specific microindustry. 

I only recruit candidates who know what they want, and can articulate it clearly and coherently. Despite all of the professional advances the Internet and startup recruiting models have brought, this type of candidate is still in very short supply. 

A playbook for meetings at startups

At some point in every company’s trajectory, a leader looks at her weekly calendar in horror and wonders how her company too has fallen victim to excessive meeting culture. Often this is paired with a simultaneous realization that execution has slowed down. Speed of execution may matter less when you’ve already ‘made it’ – but it’s everything when you’re trying to scale quickly, quite likely burning cash, & trying establish yourself as a legitimate business.

Yet meetings are critical to a company’s success. I don’t buy that companies can succeed without having lots of meetings.

So it’s a paradox.

This post is a playbook for how to set up meeting infrastructure at growth companies.

Why have meetings at all? 

Ah yes. The building a business without having meetings idea.

This sentiment is a symptom of ‘bad’ meetings - not that all meetings are inherently bad. If you like the people you work with* and set the right structure, meetings can be mostly enjoyable. 

Additionally, the meetings and less formal interaction implied by your organizational structure (e.g. who reports to who) form the backbone of the way people within an organization work and communicate with one another. Meetings are the primary mechanism to shape strategy and allocation of time and resources. In other words: the difference between success and failure.

Speed

As a rule of thumb, meetings should be speeding things up, not slowing things down. As such as a guideline, meetings should happen because they are the most efficient vehicle to do one or all of the following goals:

1. Make decisions

2. Figure out hard problems (e.g. because a diverse group is looking problems or data collaboratively)

3. Assign out work for follow up

4. Keep colleagues updated

5. Support a direct report

A ‘bad’ meeting - e.g. one that feels like a waste of time - may be a sign that the meeting that shouldn’t be happening. But it may also be a sign that the agenda for the meeting is wrong, a direct report is coasting or underperforming, or the manager or participating stakeholders aren’t adequately prepping for the meeting. A bad one-on-one is a sign of a deeper underlying symptom - one-on-ones should definitely be happening.

Standing meetings, mission meetings & one-off meetings 

‘Standing meetings’ form the backbone of our communication architecture at Context. They happen with recurrence and don’t go away. 

'Mission meetings’ (borrowed from Andy Grove) have a specific business goal (e.g. a mission) in mind, and happen for a finite amount of time. The meetings that support our OKR cycle are a good example of mission meetings, yet non-OKR examples crop up regularly too whenever cross functional teams get together to tackle a specific strategic challenge.

‘One-off meetings’ happen once for a specific reason and not again. 

For the purposes of this post, I will be outlining our standing meetings, as these are not company-specific. However, I’ll note that key contributors to meeting bloat in my experience are:

• Confusing a mission meeting - which is really to produce a specific decision or action on a specific initiative - for a standing meeting

• Creating a standing meeting for what should be a one-off meeting

• Having a standing meeting to make decisions when one of two things should really happen: a topic is more urgent, and shouldn’t wait for a recurring meeting, OR a topic is not that important, and shouldn’t be reserved for a meeting at all but rather a Slack or email discussion.

I would also note that in order to cut down meeting bloat and to make more decisions over email, an accountable party should try to propose a solution upfront rather than wait to do this for the live interaction, unless the purpose of the meeting itself is to brainstorm something.

Context’s current meeting architecture

Here’s a list of the standing meetings we’re currently running at Context Travel:  

Steering committee - in lieu of a staff meeting (e.g. where the CEO and her direct reports meet weekly), we’ve carved out two meetings. One is our business performance meeting (see below), where we review trailing week business performance with a slightly larger group. The other is a ‘steering committee’ - we run it at the end of the week – a very small group that sits between the board and the company to make certain decisions, in particular around resource allocation.

Business performance meeting – the business performance meeting is our key trading meeting. The goal of the meeting is to improve business performance: keep key stakeholders on the same page regarding business performance, and generate a list of follow-up tasks. Rinse and repeat. This meeting forms the beginning of the ‘trading week’ and as such is the beginning of a communication cascade to the functional staff meetings & one-on-ones.

Functional staff meetings & team standups - staff meetings are meetings where a team manager meets with their direct reports, and maybe one or two individual contributors. The goal of this meeting is to cascade key messages, review functional performance, and remove blockers.

• We’re agnostic on whether these are better as a standup or a scheduled weekly meeting. However they do need to be happening, and probably no less frequently than weekly in situations where a lot is changing quickly.

• They should include cascaded messages from the business performance meeting & one on ones, as well as a review of relevant departmental KPIs.

• Relevant senior team members outside of the function can and should be regularly invited to attend these meetings with some regularity and depending on the agenda, or for special topics.

Sales standups – whether this is appropriate at your startup depends on your business model. At Context, we have a reasonably complicated lead-to-confirmed booking sales process, with a lot of opportunity to enhance the value of the lead throughout the sales process, as well as opportunity to create a ton of delivery complexity for our operations team downstream. As such, sales is an activity that necessitates daily senior attention. The goal is to improve sales conversion and maximize booking values. These meetings can be very short (e.g. 10-30 minutes). Here’s a flavor of sales stand-ups:

• Daily sales standup - sales leader runs meeting with sales team. Everyone’s top leads and strategies to close are discussed

• Sales & operations standup - sales leader pulls the key top leads for discussion with operations leader

• End of week sign off - before taking off for the weekend, have all possible open orders and leads been closed out?

One-on-ones - a lot has been written about one-on-ones. It’s the primary way junior team members are directly supported by their manager. The goal is to best support the work and development of a direct report, as well as to provide less senior reaches of the organization a way to contribute ideas that can make it straight to the top. A manager’s role in a one on one is to help tease this out. 

• I don’t have any strong views as to how best run a one-on-one, but I believe they need to happen weekly with direct reports. I will offer up one thought - the one-on-one should be 50/50 manager/direct report talking. Ben Horowitz actually suggests one on ones should be 90% listening.

• I can't improve on Ben's post here, also featured in The Hard Thing About Hard Things.

Other types of one-on-ones: skip levels & laterals. 

• A skip level meeting is where a manager reaches one or two levels down in her reporting line. I use skip levels when there are new roles that I want to stay close to, or a disproportionately important area of the business that’s a step removed from my regular work. I find them to be very useful but also use sparingly.

• Laterals are meetings where two people from different functions meet. Organizations need this to happen - however I would note caution around making these standing vs mission specific. In my observation recurring laterals are a key contributor to meeting bloat.

Standing cross-functional meetings (e.g. operations & tech meet every two weeks) – I’m personally not a fan of these. I would caution using as standing meetings vs one-off or mission specific. It’s another key contributor to meeting bloat, and worse still can really unnecessarily slow the organization down. Don’t wait for a meeting in the future - if something is critical talk about it now, if something is less critical perhaps a decision over email / Slack can suffice. 

All hands - the goal of all hands is twofold - to provide transparency on company performance and key initiatives, & to make your team feel included & good about working here.

Conclusion

It’s often said that meetings are expensive, and it's true. Andy Grove highlights this point in ‘High Output Management’. Our weekly business performance meeting costs well over $1k in staff time. Even more routine meetings in smaller forums rarely cost less than $100. Just as I wouldn’t flippantly expense a $100 business lunch, we should be very aware of the hidden costs of meetings. 

What can often get lost: meetings are cheap compared to everyone not being on the same strategic page. The cost of an unproductive team member, or a team member focused on the wrong thing, is far in excess of their salary – it’s their salary plus the strategic impact that a productive team member could be having.

So embrace it: proactively plan out your communication architecture to use meetings to supercharge your organization.

* If not, start there

7 simple rules for company-wide OKRs

We’re getting ready to set our Q3 company OKRs. This morning we discussed 7 rules we’re following that describes our current OKR process.

Reminder: for something to be a company OKR

1. Describable and scopeable (is it ‘baked’?)

2. Sized based on internal or external data. Impact $ can be annualized or for Q3

3. Threshold should be material contribution (e.g. 5% revenue uplift)

4. Work should require cross functional support from scarce resources: tech, data, & senior leadership time

5. Co-leads should be appointed, with at least one from the global leaders team

6. Commitment is a scoping doc & timeline, weekly meeting and weekly reporting

7. Requirements for a functional OKR are much more relaxed, although these can also be lightly cross functional. Rigor around opportunity sizing and scoping is important.

My Thoughts on the Evolution of the Travel Agent Industry

Earlier this week a friend forwarded me a teaser from Phocuswright on the strength of the travel agency industry. The headline is that contrary to general belief & lots of discussions I have with friends & entrepreneurs, the US travel agency industry is:

• Growing consistently, not shrinking

• Arbitrarily large ($112 billion in 2017) 

• Still the largest consumer of travel products. 

Context Travel has been selling through travel advisors for many years, and is a preferred supplier of the two largest agent consortia - Virtuoso & Signature. onefinestay was as well. It would be impossible for anyone who attends Virtuoso Travel Week, with 6,000+ attendees spanning 3 hotels in Las Vegas every August, to believe travel advisors are on the way out. It’s the one week every year Bellagio employees aren’t allowed to take off. 

Here’s my take on the resilience of the travel agent industry, & a few thoughts about how advisors can ensure ongoing relevancy. 

What’s contributing to the resilience of the travel agents industry? 

Customer rate parity (+) - suppliers guarantee rate parity to their own published rates on site - it costs the same for the consumer to book through an agent. once consumers realize that booking a hotel or activity provider costs the same as it would if they booked direct, working with an agent suddenly becomes much more of a no-brainer. 

Additionally, if book the Four Seasons direct as an individual vs through an advisor or agency who sells a lot of Four Seasons product, which customer is more likely to get the upgrade when the suite is unsold? 

Supplier commission competitiveness & storytelling - in many ways the rise of the OTA was the best thing that could have happened for the agency industry. It created a structural reason for suppliers to seek alternative sources of demand. Booking.com is a $100 billion dollar company partially due to the juicy margins OTAs command from suppliers - standard for B.com & Expedia is 25%. This makes OTAs actually more expensive - certainly on a direct commission basis - than travel agent distribution. 

The OTA environment also creates real challenges providing suppliers with proper merchandizing for their products - it's really hard for differentiated suppliers to actually communicate what makes them differentiated with the standard templates and lack of branding. Advisors play a valuable role in product marketing for suppliers: working with advisors ends up also being a brand building activity. 

Consumer information overload & time scarcity - we are now bombarded with rich media about where to visit, where to stay, & what to do. As the mobile and desktop experiences have evolved and retina screens are in everyone’s pocket, lots of travel products have come online. It’s now easy to self-serve, but this has also resulted in a paradox of choice: sure it's straightforward to book all of these things now, but what do I actually want to do and who can I trust? Time spent traveling is precious time. Advisors can help cut through the noise and curate a personalized experience for their customers because they really know their preferences. For the most part, this is still not being done well online today. 

And here are a few things that need to happen for the agent industry to ensure it stays relevant. 

Structuring rules of engagement for cobranding & comarketing - suppliers like Context Travel are getting really good at direct to consumer marketing & brand building, and are making significant investments in these areas. Additionally, these businesses are being built around the idea of direct communication with customers prior to, during & after the event. 

Yet often advisors are overly protective of customer contact information to avoid getting cut out in subsequent transactions, which can create real operational challenges on the ground and missed opportunities for future trips. 

This will ultimately end up hurting the advisor, supplier, & customer. Suppliers need a way to market directly to customers, advisors need reasonable rules to protect commissions, & customers should be able to harness the investments suppliers are making in personalization for better awareness of destinations, accommodation & activities. 

Providing best practices & onboarding opportunities for new suppliers - most agent websites don’t have a way for new suppliers to pitch their products. This means that products offered by travel agents generally are from suppliers with the means to afford to market to agents or invest in becoming a preferred supplier of the consortia. Yet even that comes with speculative ROI for new suppliers who are time & money-constrained. The game favors those with the big marketing budgets & sales teams, hence why a lot of suppliers never get beyond the OTA and direct distribution. 

Creating simpler ways for quality suppliers without the same reach as more established companies to enter the consideration mix for agencies will ensure that travel advisors can offer innovative products alongside the more established ones. 

A parting thought 

Travel products have many routes to market - OTAs, the various direct to consumer acquisition techniques, in-destination, & travel advisors. It’s hard to be really good at even one of these. However I’d argue for a differentiated, quality supplier the travel agent industry belongs near the top of the list. 

OKRs (20 cycles later...)

I’ve been using OKRs to set and measure organizational objectives since 2013 or 2014, when we first implemented them at onefinestay. I took the OKR process to Context Travel when I joined earlier this year. One of my top reads of 2018 was John Doerr’s ode to OKRs, Measure What Matters.

Full disclaimer: I love OKRs and think they are the best goal-oriented management tool I’ve seen in practice. I’d enthusiastically recommend implementing OKRs to any size & type of organization. However I am very much approaching OKRs still as a student, not teacher: it’s a work in progress.

What are OKRs?

A lot has been written about OKRs - objectives & key results - so I won’t attempt to rehash here. OKRs were invented by Andy Grove at Intel and popularized at Google. At its essence, OKRs are an process and an alignment tool to provide organizational focus in order to achieve better business outcomes by clearly expressing ‘objectives’ (goals) and' ‘key results’ - how we will know if we achieved the goal. OKRs are what turns organizational aspirations - wishes - into actionable initiatives.

OKRs become particularly important as organizations scale beyond very small teams ( < 10 people) and begin to split out into functions or different locations. Informal systems of communication - e.g. open plan office chats - begin to break down. Functions inadvertently become siloed from each other - yet cross functional collaboration is needed to harness the full potential of the organization.

Here’s an example of a multi-year OKR for Youtube, from Measure What Matters:

A multi-year OKR example from Youtube

At Context we run a quarterly OKR cycle. We have not yet attempted an annual OKR process, although this is common. The way we balance short term initiatives - quarterly - with long term initiatives - annually and beyond - is through a combination of the budgeting process (which lays out base case growth plans) and expressing our mission & vision. We typically ladder our OKRs, starting with mission/vision:

Mission/vision —> long term aspirations —> key initiatives over the next 12-18 months —> quarterly OKRs

When OKRs are working well, they serve several functions in an organization. They:

• clearly communicate top priorities for the organization

• provide transparency & visibility into what every function (& potentially individual) is working on at any given time

• create a naturally accountable process

• protect a team’s time from ad-hoc requests

• help avoid the ‘try something new every week’ risk at a fast-paced company by putting some structure around medium-term planning cycles

OKRs are a process, not a deliverable

One of the biggest risks with OKRs is that a lot of upfront time and effort is spent in setting OKRs at the beginning of the planning period, and then the OKRs end up in some document to be dusted off 30 or 90 days later. OKRs should form the drumbeat of the organization - it’s what we set out to achieve every month or quarter. I’ve found getting this to work in practice is really difficult. It’s still a work in progress for us.

Our current OKR process begins about 15-30 days before the measurement period. We create a Google Doc & the leadership team inputs candidate company-wide OKRs. Functional leaders go back to their teams for feedback over the course of a few days, and we then gather for a half day together to decide at a high level what we are going to focus on in the upcoming quarter.

An OKR isn’t a freebie that happens on top of lots of other initiatives - its the top initiative in the company and will create hard decisions around trade-offs. I’ve experienced lots of cake-and-eat-it-too OKR setting, & it doesn’t work. By committing to a handful of key things, another handful of things is not going to happen.

So in practice here’s what we commit to when we set a company OKR:

1. A sponsor in the leadership team who takes overall accountability for delivery of the OKR

2. Drafting a charter that lays out a specific project plan and all of the stakeholders involved (we are currently using a variant of the RACI framework for this)

3. A launch meeting & weekly project status update that includes all relevant stakeholders & supported with performance data

4. Weekly progress reporting to all@

5. Unlocking appropriate resourcing and/or budget support to achieve the OKR

6. An end of period wash-up that includes lessons learned. OKRs are not about achievement only, but learning.

Once company-wide objectives are set, these are cascaded down to the functions, who in turn create their own set of OKRs. Good functional OKRs first and foremost are in direct or indirect support of company-wide OKRs, but this doesn’t need to exclusively be the case. Often functional OKRs have a little more leeway for long-term capability building & are at the discretion of the functional leader. However once set, they should follow a similar process with a written charter, accountable stakeholders (this time largely within the team), & a regular project cadence.

Here are some other lessons we’ve learned along the way:

OKRs are big bets, not to-do lists - OKRs should reflect a material departure from business as usual outcomes. It’s OK if a lot of the work that one does on a daily basis is not reflected in the OKRs. OKRs are all about what time is spent doing on the margin while busy doing other work, in addition to the overall the redistribution of that time generally.

Less is more - there’s often the temptation for OKRs to become a wish-list of everything the leadership team wants to get done. I’ve never worked in an organization that can get more than a few big things done every quarter. Last quarter at Context, we actually set only 1 company-wide OKR, and it was way more impactful than the prior quarter when we had 4. This upcoming quarter we will have 2 company-wide OKRs. I would never suggest more than 4 for a company or a function.

Good OKRs involve the majority of stakeholders - there’s often really important work that needs to happen at the functional level. However in my experience having a company-wide OKR that is really specific to a function - just because it’s really important - isn’t a great practice.

Good OKRs should have the majority of relevant stakeholders - functional leaders at the company level, key team members at the functional level - knowing ‘what to do about it’ after the OKR has been set. If actions taken at the individual level to achieve an OKR aren’t obvious, it may be appropriate to recut the OKR itself or drop it down to functional OKRs or individual initiatives.

Don’t fetishize the software or format - I spent a long time demoing OKR software to find the perfect tool for our organization, and it looks like we are just going to revert back to Google docs. Of paramount importance is that OKRs are living and breathing in the organization. The best OKR platform is probably one you are already using, so I would suggest hitching OKRs to whatever tools are common in the org - Slack, Google docs, etc.

Similarly, we had long debates over what makes a ‘perfect’ OKR. There are lots of opinions:

• Objectives shouldn’t contain financial metrics

• Is this an ‘initiative’ or a KR? Is this a KR or an objective?

• This objective needs to have more key results

And so on.

Don’t obsess. Just having a structured forum where team members explicitly convene around common goals is 90% of the magic. I’ve read a lot about Google’s OKR process, & even they don’t follow one specific OKR format consistently.

Use OKRS to build your org design & ID key gaps - OKRs are an amazing way to identify key gaps in the organization. It’s fairly common for personnel needs to be a bottoms-up activity that only somewhat relates to the key goals of the organization. All leaders should want more resources - that’s normal. However it’s hard to then figure out what trade offs to make when setting or freeing up budgets.

The OKR process, with all stakeholders laid out for everyone to see, will give a great window into where the real needs are. Don’t have enough data to measure success against? Maybe it’s time for a dedicated business insights hire. Find the OKR management cadence to be too difficult? Maybe it actually makes sense invest in a project manager. And so on.

What are some of other lessons or OKR best practices that others have learned at their own companies?

Beyond product/market fit: the product/pricing/channel loop

Much of this post has been inspired by Bryan Balfour’s very excellent Four Fits Framework, a must read.

The concept of product/market is often used to describe when a startup finds its core customer group (market) with a product its developed. Finding product/market fit is a critical path item for any new & small business to become a big business.

It’s often assumed following product/market fit, there’s a mostly linear progression to distribution: we have a great product, we know our market, time to go sell it. Product development capabilities are redeployed to features & requests.

However, to become a really big business, this linear process from product -> channel often fails to properly consider the nuances around really scaling.

Fragmented distribution channels

Sometimes everything checks out on paper - addressable market is large and well-understood, early customer feedback is great, product works - but there’s just no scalable source of demand. As such, acquisition ends up begin a grab-bag of tricks - some SEM here, a little social there. The logic follows that organizations just need to get really good at all of these various increasingly technical activities, & growth will follow.

The problem is that channel fragmentation is really high overhead and unlikely to deliver outsized performance. It requires an army of technical specialists, or expensive agency support. It’s easy to fool yourself as well, as the hidden cost of these channels is often not the media spend but the expensive people required to be good at these activities - the fully-loaded rather than marginal cost of acquisition. Worst of all, the little of this, little of that approach is by definition a portfolio approach, and will deliver a well-diversified growth rate similar to buying an index fund. Portfolio of channels delivers a portfolio rate of return. It’s really hard to build a $100 million business this way.

Keeping prices too high

Sometimes the real volume unlock in a specific channel is the same product, just priced 30% cheaper. Marc Andreessen famously advises entrepreneurs to raise prices. This might be the exact wrong thing to do depending on channels. Premium travel products sold through mass market OTA channels is a good example of this.

It’s incumbent on the company to understand where pricing meets volume in any of its distribution channels. Many product driven organizations never develop a comprehensive understanding of this & fall into a trap of protecting unit economics at the individual level at low volume - e.g. high gross margins - instead of sacrificing margin for high volumes, which then lead to scale economies and greater contribution overall.

Growth through the product/pricing/channel loop

In most startups today, fixed costs are relatively low. Airbnb & onefinestay can create hotel equivalent inventory for a fraction of the cost and time of a traditional hotel group. D2C brands rely on contract manufacturing (Harry’s a notable exception). Context Travel can launch new tours in new cities in a matter of days. This is where a lot of the market disruption comes from.

However, the trade-off with this low cost of product development vs traditional industry is that often for a company to really scale, the product development is an ongoing art. It’s not a case of the ‘doors open to the hotel, & now let’s sell the rooms’. The hotel needs to be constantly reconfigured.

It’s almost certainly easier to reverse engineer a product for a channel at a certain price than it is to find a distribution channel at a specific price for a product that has been developed. This is what the product/pricing/channel loop is all about. The scale organizations over the next decade will need to have a deep understanding and organizational process to figure out how all of these elements interact with one another to unlock growth.

What's real and what's a story?

One of Yuval Noah Harari’s hallmark ideas is that humans ultimately became the dominant species on earth due to its ability to invent & share stories that led to large scale cooperation. Some stories are good for humanity as a whole - e.g. the story of human rights - and some are harmful - ideologies such as Nazism.

Other stories are neither good nor bad - e.g. corporations are stories, and money is a story. A piece of paper is intrinsically worthless - it only becomes infused with meaning because we all choose to believe in it. A piece of paper is intrinsically worthless.

One way Harari brings the unique human trait of believing in stories to life is through an illustration of chimpanzees seeking out food in the jungle. Can you imagine trying to convince a group of chimps to sacrifice eating a banana when hungry because of the promises of a monkey Heaven?

At the personal level as well, we tell ourselves stories all day long. We’re in constant dialogue with ourselves. We invent narratives with ourselves as the central character. Rather than pay attention to the present moment - what’s happening right now - we’re busy spinning up versions of an anticipated future conversation, or looping on something that happened to us earlier in the day or years ago. We often become so absorbed we miss the simple joy of being alive.

If everything is essentially a story, what’s real?

Harari has a simple rubric: real things can suffer. Stories cannot. Human rights cannot suffer. Corporations and countries cannot suffer. But people can suffer. And that suffering is very real.

Which brings me to the news of yet another mass shooting in America - this time 12 victims at a college bar in Malibu. Less than two weeks ago it was 11 victim attending services in a synagogue in Pittsburgh.

Politics have become too intricate and divisive in this country for me to be able to competently follow. Red states and blue states. Trump and the media. The NRA. These are just stories.

But the pain inflicted is very real. 23 more people senselessly killed. Their families living with this pain for the rest of their lives. Above the political debate itself, we all need to set our sights on ending this unnecessary suffering.

The Rise of the Independent Affluent Traveler

Earlier this year, Skift published an interesting research paper on US Affluent Traveler trends.

Affluent Americans, defined as household income greater than $100,000, make up 20% of the US population but account for 51% of travel spend.

That affluent Americans comprise the most important segment of travelers isn’t surprising. What is a little more surprising is just how much of this travel is trending toward more independent vs packaged options. Thanks to offerings like Uber, HotelTonight, & Airbnb, affluent travel is becoming much more unbundled & spontaneous. As the need for logistical coordination subsides, the destination management company’s stronghold on in-destination travel is also weakening for this segment.

Additional information about the affluent traveler:

• Affluent travelers are self-sufficient planners and bookers

• They prioritize experiences that can teach them new things  

• They would rather spend money on travel than on other things or possessions at home (81%), but they don’t think that spending more makes a trip more meaningful

Perhaps most interesting is the growth of the alternative accommodation segment within these higher end travelers. In 2018, 50% have stayed in a short-term vacation rental at least once, compared to 38% in 2017. This number rises to 56% for family travelers.

There’s a movement happening between the traditionally defined categories of budget and luxury travel. The independent affluent traveler is a mega segment that’s trading the airport transfer for Uber, the 4 or 5* hotel for an Airbnb, & stitching together itineraries of local restaurants & activities based on their own research or agent recommendations. Within the travel agent industry, this segment is booking hotels & activities while eschewing integrated packages. Some agents report 75% of their business is now independent vs packaged options, particularly in Europe.

The independent affluent traveler will define much of the travel industry in the coming decades. It’s exciting to be a part of it.