Whirling Thoughts

Chewing, swishing, and spitting thoughts out. Personal blog of Nicholas Chan.

Execution vs Strategy

In business school, we are taught a lot about strategy. We glamorize it. We talk a lot less about execution.

We’re taught that if you know the “4 P’s” or how to build a financial model or how to setup a marketing strategy, then you will be able to succeed at business.

Something I’ve come to appreciate since joining Clearbanc is that reality is a lot messier than this. You can dream up something in boardroom, but you really need to know how to make stuff happen. Otherwise ideas just stay ideas.

Good execution is identifying all the actions required to support the strategy / goal, then making sure those get done. People who know how to get stuff done, get paid. They’re rare.

Strategy is useless without good execution and good execution is a bit messier than I expected. Here are some boring, practical, unsexy things that I’ve learned to make execution work.

Getting the Incentives Right

One area that I realized you have to account for is politics. Politics boils down to the simple fact that people in organization just have different interests. The product team is optimizing for different metrics than marketing. Marketing is optimizing for different metrics than finance. And legal is just trying to make sure no one is going to get sued.

What happens here is that in trying to optimize for their metrics, marketing might take actions that actively undermine the product team’s goal. As a tangible example, the marketing team might be optimizing for getting leads, without a focus on the quality of those leads. Meanwhile, the product team might be optimizing for conversions. By funnelling more leads of lower quantity, marketing is meeting their goals while product is frustrated and underperforming.

The mixing of incentives is a sticking point in good execution. A practical learning from all of this is that to execute properly, a really important point is to make sure that everyone is tracking the right metrics, understands what other people are tracking, and that you take the time to think about any second order effects. AKA. ask yourself the question, if this is how we are going to track success, are there going be some unwanted side effects of this?

In the above example, marketing and product should both be measured by conversion rate. This way marketing doesn’t actively undermine product. A second order effect of this change might be that marketing begins to drastically increase advertising costs or CAC in response. This is something else that would have to be monitored.

Time Lag

Executing a strategy rarely results in instantaneous results. It often takes months if not years for your actions to bear fruit. This means that it is important to be patient. Don’t kill a good thing before it has some time to age and mature.

A new sales process and organization in Clearbanc took more than two hard months before it started to show results.

A Linkedin content strategy I’ve been playing around got some initial traction, but I had to wait until week 3 for my first “conversion”. It’s still too early to judge if the program is a complete success, so I simply have to keep executing and posting.

The practical takeaway? Things take time. Be patient.

Nitty Gritty, Hands Dirty, Detail Devil Execution

Setting a good strategy is only the beginning to getting good results. The reality is that the boring day-day details are what gets you results. Surprise!

To use sales as an example. You can talk about a completely revamped and sexy sales strategy to get more revenue. Blue ocean and all that shit. But have you checked to make sure that your existing reps are doing their job?

Are they sending the right length emails? With the right headers? Are they following up with people? How often are they following up? *yawn it’s so obvious and boring, but I’ve seen 6-figure deals pop out of nowhere because someone decided to…send an email and followup.

To use marketing as an example. We at Clearbanc were trying to get more companies to become repeat customers. There were a lot of ideas tossed around, but ultimately what made a big difference was just sending them emails to remind them how they can use our money. No AI involved. No extreme data processing or segmentation.

I think that business students are overly obsessed with the glossy, sexy solution. I know I was. It’s a mentality that’s supported by case competitions and projects that reward ideas that are creative and clever. Ideas you rarely have to go out and execute.

There’s certainly value in creating those strategies, but something that I’ve grown to appreciate these past few months is that sometimes you have to take the time to sit down and just get (the boring) stuff done.

Data as a Crystal Ball

Wouldn’t it be amazing to always have the most up to date information? What if you could monitor and predict what was going to happen before it actually happened?

I’ve realized recently that it is possible to build a business that gives you a magical crystal ball into the future.

Wouldn’t we all like to know when businesses, particulary SMB’s, begin to recover from the current Covid crisis? As a result of how their businesses are structured, both Clearbanc and Shopify have extremely high amounts of data, that lets them monitor trends in small businesses that normally only banks would be able to realize.

This information gives these two companies an edge that lets them move quickly and make better decisions than competitors who don’t have that information.

How did they get to this point?

Both companies built data collection and aggregation into their core product offerings. In return for access to data, they provide their customers with value they would not be able to derive independently. At Shopify, this takes the form of tracking website traffic, sales, and customer information on behalf of the merchant.

It is critical that the data being collected on customers is providing them value, otherwise these customers will stop providing it or using the platform.

What Happens When You Misuse Data

Today’s most relevant example of the misuse of customer data is Amazon. Shopify was able to carve out a significant chunk of the e-commerce space because Amazon did not let their merchants view and control their own data.

Amazon sellers did not know how often customers were repeat customers, who was buying their products, and could not monetize them with retargeting campaigns or email lists. These sellers lost control of their brand.

Adding insult to injury, it has been discovered in recent years that Amazon has started to launch their own private label brands. Think Amazon Basics.

They would find the best selling products by their sellers, then do the production and manufacturing themselves, promoting their products over their sellers.

It’s easy to see why sellers would like to avoid Amazon and control their own destiny when their own data is being used against them.

Both employ data science divisions who can make sense of all that information.

Data as a Competitive Moat

When it’s easier than ever to code something and copy other people’s code, how do you maintain a competitive advantage?

Just look at Facebook ripping off Snapchat’s stories and adding it into Instagram. It was incredibly successful.

Features can be copied. Data can build a moat

IMO there are two key pillars to this “moat”.

The first is time. If you have been operating for a year, it takes an incredibly long time for your competitor to amass the same amount of data. Meanwhile, you continue to race ahead, gathering increasing amounts of data. It will take them years to catch up, unless they figure out a way to collect useful data 2x faster than you can.

The second pillar is scale. The more data you have the more useful it is to you. Think about it like this. What is more useful? Your personal information or the personal information of 10 people? How about a million people?

With the latter, I can identify trends, demographic data, and start to train machine learning models that optimize my product and drive more revenue. By gathering more data, you can build a competitive moat by improving the processes that drive revenue, making them a magnitude better than your competitors.

Food for thought as you brainstorm your next billion dollar business idea 🙂

How to Pick an Internship? Raise Your Ceiling.

During my internship hunt this summer, I received two very enticing offers. The first was to go work with RBC Amplify, an intrapreneurship program in RBC, where you would work in a multi-faceted team to build a new product for RBC.

The second offer was with Clearbanc for a growth marketing position.

Here’s the catch.

RBC would pay me nearly double what I would be earning at Clearbanc. I would be taking a significant pay cut to work at Clearbanc, a fast growing fintech startup.

It was a tough decision.

My friends thought I was insane. My parents didn’t say anything perse, but implied that I should be trying to earn as much money as possible.

I chose to go work for Clearbanc.

There were two key principles that drove me to this.

Optimize for learning

Whenever I need to make decisions, I like to consult some friends who are more experienced and are doing what I want to be doing. The first piece of advice that was offered to me was that, if I could afford to take on the opportunity, then I should optimize for learning.

What I took away is that when you focus on learning skills in the present, you will do better in the long term. If I can significantly improve my growth marketing skillset at Clearbanc, I will be able to take those skills and either demand more at my next job or better monetize a future venture.

At Clerabanc, there were some “green flags’ that I liked. Visionary leadership in Michele and Andrew. My boss, who has experience exploding growth for several startups. The role, which was focused on data-driven growth tactics vs brand building. A promise from the team that I would be able to take charge and lead my own project during my term.

In short, a wealth of mentors doing what I want to be doing, learning the skills that I want to learn, and the autonomy to accelerate that learning by taking the lead of a project of my choosing.

Raising your ceiling

Where do I want to be in the next ten years? Or if there isn’t anything specific, what is a hunch of where you want to be in the next 10 years. Then…. how do you want to get there?

For me, a dream would be to be working on my own ventures, either as a startup founder or an early employee at a startup. I would also love to have side income coming in from projects.

I did some research on RBC amplify. I was asking myself: “where do the interns of the company end up after their internship?” I then wanted to compare my findings with Clearbanc.

At RBC, it appeared that many of the interns there ended up… working for RBC. Nothing wrong with that, but it’s not where I want to be in 10 years nor will it help me accomplish my goals. A large company like that focuses a lot more on their processes vs getting stuff done. That’s not going to make me a very qualified founder or an attractive first employee.

At Clearbanc? Oh boy. I followed the career paths of new employees. People who have gone from customer service positions to launching new markets in Australia. Employees going from an entry campus recruiter position to…head of people?

Heck, my own recruiter got promoted in the 4 month span that I met her. One day, I received an email that she was being promoted into a more strategic HR role. Good for her.

If I am looking for explosive growth, then Clearbanc was the winner by a far margin.

Ending Thoughts

As students, let’s all try to be a little bit more strategic about our career choices. Think in the long term and ask yourself if you will learn what you want to learn to meet your goals. Raise your ceiling, don’t settle.

Dirt Cheap Dirty Canadian Oil, Time for a Change?

Yesterday, I found out that the price of a barrel of Western Canadian Select has plunged below $5. That means a barrel of Canadian oil costs less than a 6 pack of toilet paper.

Why is this the case?

Saudis have started a pricing war

The first is that recently, the Saudi Arabians and Russia have gotten into a bit of a price war. They were unable to agree on prices, after China’s drop in production severely crippled demand. Now Saudi has “turned on the taps” and flooded the market with more supply

Lack of Pipelines and Distribution

Due to political barriers and Aboriginal opposition, pipelines needed to increase capacity to transport bitumen from the oil sands south to USA and west to ports in BC have been cancelled or put on hold indefinitely. This has forced companies to instead have to pay a premium to ship their oil via rail or other methods. This has further decreased demand.

Abundant and Cheaper Alternatives

In recent year, shale oil production in USA has exploded, propelling America to be the 4th largest exporter of oil. This significant increase in supply has made Canadian crude look even worse in comparison. Shale is cheaper to manufacture than oil sands, which takes around $45 USD per barrel to breakeven.

Compounding the problem is that shale oil can slow and start production very easily. When prices are above an operation’s breakeven point, they will simply turn on the taps again, setting a cap on how high the prices of oil can go.

Where next?

This is a purely qualitative analysis, so take it with a grain of salt. To me, it appears as if the Albertan oil industry will remain unviable for many years ahead. The industry is beset with poor unit economics, political headwinds, and superior competitors.

Countries have already started to invest significantly into renewable energy. Norway is the prime case study for how to take oil wealth and transition it into creating a more sustainable a circular economy. Texas (of all places) has become a renewable energy giant, with wind outpacing coal as a power source in Texas for the first time ever.

Alberta is still far behind the curve when it comes to renewable energy, but progress is starting to be made with propositions such as the Rattlesnake Ridge Wind wind farm project. This is a promising sign of things to come.

However, there is still more that can be done. The afore-mentioned project had a price tag of $200 million CAD. Meanwhile, the government is proposing an investment of $4.5 billion CAD into purchasing the TransMountain oil pipeline. What is the point of this? If we are aiming to transition into a green economy, why are we investing capital into infrastructure that will be outdated by the time it is actually built? $4.5 billion CAD would be enough for 22 wind generation projects.

The world is not moving back towards oil and gas. It is time to look to the future.

Stay Safe

Bye. Have a great day. See you later.

These words are embedded in the fabric of our daily interactions. They are words that tend to be taken for granted. We rarely think much about these daily platitudes. They go in one ear and out the other.

I’ve noticed a jarring shift in how people have been ending conversations recently. “Stay safe” has become one of the most common ways to send off a friend, acquaintance or loved one.

I find it quite dark. Would be great if we could just get back to “have a great day!”.

“Stay safe” shows how the fear of the virus and its consequences have begun to dominate our psyche. Over time, the influence of the virus has started to seep into benign conversations as a constant reminder of its lingering threat.

Stay safe, because if you’re not careful you could get sick.

Stay safe, because the virus has made it dangerous to go outside.

Stay safe, because after we leave this video call, I hope nothing happens to you. I won’t be able to tell until we call next.

Stay safe, because the world has gone mad. Toilet paper and canned food has flown off the shelves.

Stay safe, because if we don’t flatten the curve, we are going to be the next Italy, Iran, or China.

Stay safe, because if you hurt yourself or get sick for another reason, it’s a terrible time to be going to the hospital.

Stay safe, because I care about you. I hope everything will turn ok.

Stay safe.

Disappointment

Covid-19 has wrecked havoc on the world. It is a critical time for all governments as they deal with the urgent medical and economic situation.

I understand all measures being taken and agree that they are necessary. With travel bans in place and the virus lurking around every corner, it is impossible to decry any measure as too extreme.

As a result of them, my exchange in Singapore has been cut short, and I have returned home for the rest of the winter semester.

This is disappointing. The year was supposed unfurl as one of adventure. One filled with joy and discovery and new friends. One where I would go to the far ends of the world treasure hunting for stories and new experiences; a wealth to be shared with friends and family upon my triumphant return.

I am all the poorer for it.

Creating a vision, building foundations

This year, I will be one of 4 cochairs for the Queen’s Tech and Media Association. I’ve taken to asking myself what I want to accomplish this year, and what would make this year a success.

I wanted to write this down because it’s important to have a larger goal in mind when you inevitably have to work through a mire of boring, mundane tasks to accomplish this vision. It’s easy to slack or stop giving 100% on these tasks without a strong vision.

QTMA is a product management organization. We build software products. But that simplifies things too much. I would argue we teach people how to build great products, launch these products, while creating awareness for tech as a viable and exciting career path for students.

  1. Our products acquire real users
  2. Our members recruit successfully into technology positions
  3. Our members walk away with new skills
  4. QTMA is one reason students end up choosing Queen’s Commerce (as is the same with our investment council and case teams)
  5. Members return next year, or if graduating, remain involved in some capacity.
  6. Everyone has a fun time

March hiring will soon be in full swing. Interviewing 50+ people in three days is not going to be fun, yet it is a necessary task for building a strong foundation for the coming year.

Good times ahead.

Thinking About Change

Heading on an exchange is a temporary goodbye. You wish farewell to your friends, your school, and your family for the next five months, with the hope that everyone and everything will be here waiting for you when you return.

Yet, as you say goodbyes, there is the creeping inevitability of change. As my group of friends said our farewells to one another, one of them posed a question to the group that got me thinking:

“Do you think we will change?”

The answer is yes. But I think that the most important thing in this question is answering how we will change. We can add more to that by asking “how do we want to change?

Change can be sudden. In a few short days, I expect to be waking up in another country. While the rays of sunshine filtering through my windows will be the same, everything else will be different. The room. The temperature. The food. The people. These are superficial markers of change, things that can be quickly reverted with a flight ticket. They’re givens that don’t mean much.

Change can also be slow. I’m imagining this type of change to be the result of pressure. Where old beliefs and perspectives slowly morph as a result of exposure to new stimuli. This change leaves an indelible mark on your perspective and approach to life.

Something that I’ve noticed among friends who have gone abroad is that they have come back with a perspective that is “bigger”. No longer can they imagine staying in Toronto for the rest of their life. They yearn to explore the world more. They think about opportunities globally, unrestrained by borders.

So how do I want to change? I want to be able to dream just a little bit bigger. Instead of being stuck within the boundaries of Toronto, Canada, I want this experience to break down those boundaries and let me sense opportunities for impact around the world.

I want it to be a slow change, something that I won’t notice until I return home and realize that I make decisions just a little bit differently than before.

Know What You Want – Choosing to Leave a Business

It’s with mixed feelings that I have chosen to leave the business that I’ve spent the last 4 months working on. It’s called Cromble, and what we did was take brewing byproducts called spent grain from breweries then upcycle them into higher value products.

After the end of the summer I chose to take a week and reflect on whether continuing with this business was the right decision. This was not as cut or dry as it would seem. We had just received $15,000 in funding in addition to another $4000 in seed funding.

We had world class mentors. One of them had is PhD in molecular chemistry, and was building a startup in Silicon Valley. The other had sold a multi-million dollar chocolate business, and was focused on helping food startups commercialize their products.

I think that ultimately, I had to detach my emotions and critically evaluate whether continuing with this business would be helpful to my long-term career trajectory.

To do this, I filtered the decision through three key questions: what do I want? How do I get there? How does this business align with those goals?

What do I want?

When I was in high-school, I had the chance to interview the CEO of a rapidly growing marketing agency. To me, he was (and is) someone who was very successful. I asked him what he thought was the most important message he wanted to share with people.

I expected a long monologue. Instead all he said was “Know what you want, then everything else will follow”.

That was a recurring theme when I talked to other business leaders in my community. Another made the point of saying:

“As long as you know where you want to go, your decision making becomes way clearer. All you have to do is determine whether that decision will move you towards your goal.”

I want to own and run businesses in the future. But those businesses are the type that are digital in nature. I want to have multiple digital businesses that can be automated or systemized, which then gives me the financial freedom to pursue a “big bet” – a high-growth startup. For that high growth startup, it doesn’t matter if I am a founder or early employee, but I want to contribute to growing this business substantially.

In summary

  • Work in digital / tech based businesses
  • Be able to grow businesses
  • Own multiple businesses

How do I get there?

To me, the key thing linking all of these goals is my ability to drive revenue and grow businesses. Really, digital growth marketing.

This means I can drive revenue to my own businesses. It’s one skillset that allows me to contribute meaningfully on the business side that I haven’t developed yet.

For me, this means that I have to develop this skillset.

Does this business align with those goals?

Cromble is a logistics and R&D heavy business. It’s in the business of moving grain and processing grain.

The next steps in Cromble involve taking funding and investing heavily in those areas. It means lab work, trucks, and drying equipment.

I felt that while this was an exciting opportunity, when measured against what I want to do and how I need to get there, this was not the right business to get me there.

Moving Forward

I’ve chosen not to continue with Cromble, and I sincerely wish the best of luck for my 4 co-founders who have chosen to continue working on this business.

Moving forward, I am looking to sharpen my digital marketing toolkit at a technology company! Looking to work with some great people 🙂

Confidence in Entrepreneurship

Having gone through the QICSI 2019 program this summer, I’ve had the unique opportunity to start a business. While I’ve chosen not to continue with this business moving forward, the experience has left me with many critical learnings and takeaways.

The most important thing I’ve learned has been to have confidence in myself and my capabilities.

Midway through the program, I realized that I had been setting a lot of mental barriers for myself when it came to having a business. I would tell myself that I needed more money, that I didn’t know enough, or that it wasn’t the right time for me to start a business.

Something that this summer program has taught me is that when you really dig into those barriers, they either don’t exist or can be easily overcome.

Don’t have the money? Do a couple of things. Figure out how you can start your business using… less money. Find a way to pre-sell products to add value (checkout Airbnb and Away Luggage strategies). Look for grants and research programs such as SREDS and pitch competitions.

Don’t know enough? No one does. One of the most important things is to have faith in your ability to learn things quickly. My business involved working with craft breweries and spent grain. I knew nothing about either. I quickly got up to speed reading articles and research.

Other ways that I found could quickly accelerate my learning were making sure I had a multi-disciplinary team that complemented my own skills, making sure to ask questions frequently and early, and making sure to… talk to people. It’s impossible to build a business in a silo. You can learn exponentially quicker by finding the right mentors or customers to talk to. There’s a lot of information that is not easy to Google, and the only way to unlock it is to talk to people.

Not the right time to start a business? It will never be the perfect time. It’s easy for us to make excuses, whether they are financial or otherwise. My perspective is that you really set the criteria for yourself on when the right time is. I would make the argument that as a student, it will likely never be easier than now.

Getting even older comes with even more obligations. You have the typical ideas of having a mortgage and kids. Other concerns that I’ve thought about are golden handcuffs and inertia from a cushy career. Why delay?

Grateful for the Opportunity

I had so many reservations about taking an opportunity like QICSI, where I had to work for myself. I don’t have any brand name on my resume. I got paid less than I would have in Toronto. I missed out on friends for an entire summer.

But I have no regrets.

Moving forward, I have confidence in my ability to start a business. To me, that is priceless.

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