💸 Fix your monetization strategy, teach your team about stocks, ...
I listen to 10 hours of podcasts a week, so you don’t have to.
This is the 43rd edition of Best 3 Podcasts of the Week 🥉🥈🥇, featuring a16z, 20VC, and Lenny’s Podcast.
What you need to know
🎨 How to foster creativity
👨🏫 Teach your team about stocks
💸 Fix your monetization strategy
🎨 How to foster creativity
🥉 Third place (3 min read vs 1 hour 20 mins listening)
Bob is back. In his first stint as CEO, Bob Iger famously acquired Pixar, Marvel, and Lucasfilm while retaining their independence and culture. The 71 year old returned at the helm of Disney late last year.
He shared his insights on how to empower people to take ideas to execution and how to create rituals that facilitate creativity on the recent episode of the a16z podcast. This is a must listen as well as a must read.
What they say
From idea to execution
Pixar was a highly different creative culture than Disney. Not even close. We ended up adopting a lot of Pixar’s creative processes at Disney.
For example, at Pixar every movie they make is driven from the idea of a director. A director pitches the idea then Pixar says ‘We like your idea go and make your movie’.
There’s a passion that exists deep inside within that director that is evident in every single step of production and creativity.
In Disney’s case, we assigned ideas to directors. It was someone else’s idea. The connection didn’t exist. The passion didn’t exist.
Bob Iger
Rituals facilitate creativity
At Pixar every movie got assigned a nice conference room. The movie lived in that room full time.
The director and the team put pictures up all around the walls and had music that was referenced to the movie.
They had all of their meetings about the film in this room. The movie started taking on a tangible quality of actually existing in space.
At Disney we had one room that all of the movies shared. One movie came in for a few hours, had a meeting and moved out.
That’s subtle. Really subtle. A sense of place and collegial feeling. The film that feels like it has a home, the people become part of the film. It comes to life! I’ve never really told that.
Bob Iger
What I say
Why it matters: Bob’s insights align with the concept of self-determination. The theory posits that people have innate psychological needs for autonomy, relatedness and competence and that fulfilling these needs leads to increased motivation, well-being and performance.
By giving people the freedom to develop their own ideas, by creating a sense of ownership and connection to a project, and by providing the resources and support necessary to bring the ideas to life, it can lead to increased passion and ultimately, better results.
Between the lines: The importance of fostering a creative culture cannot be overstated. If you block new ideas and have a top-down approach your business will stagnate and die.
Why? You become stuck in your ways and miss out on new market opportunities or technology like AI. A lack of fresh ideas can also lead to a lack of differentiation, making it harder to stand out in a crowded market.
The moral of the story is listen to Bob. Create a safe space for new ideas thrive.
👨🏫 Teach your team about stocks
🥈 Second place (4 min read vs 47 mins listening)
Employee morale is a living animal. Feed it, nurture it, and protect it. It’ll return the favor with dedication, loyalty, and trust. Abuse it and your staff will run for the hills.
In times of volatility, this animal becomes sick. Through no fault of your own, employees become uncertain about their job security and their future. This can very quickly lead to a lack of motivation and lower productivity.
Henry Schuck, founder and CEO of Zoominfo, breaks down the importance of education in healing employee morale and developing a positive and productive working environment.
What they say
The interview question
Morale in these times is tough. Team members see their stock is worth considerably less than it was yesterday just because of the market. How do you think about managing employee morale in volatile stock price environments?
Harry Stebbings
It's all about education
First of all people have to understand what is going on - which they don't. There isn't a fundamental understanding of how the stock market works and what's happening.
If you track our peer group there will be a day where our peer group goes up 7% and a day where our peer group goes down 7%. Those days don't matter at all. They're just the markets doing its thing. I'm not going to pay attention in any situation where we're in line with our peer group.
I pay attention when we go up or down relative to what the peer group is doing. The employees don't know that's how it works.
The biggest thing you have to do is explain how the thing works - you get valued on growth and profitability over time.
It's our job to execute on the strategy that we told the market we're going to execute on. That's how we get rewarded. They have to understand those fundamentals. I'll send out emails to explain that.
Henry Schuck
What I say
Why it matters: Your employees want to understand how your company is performing and how their role fits into the bigger picture. By keeping them informed and educated, employees become more invested in your company’s success.
This is especially true for startups. It’s important to educate your employees about stock options and how they can benefit. Employees often lack understanding about how stock options work, leading to confusion and frustration.
Here’s my suggestion to you… Break the mold and be clear about your stock options (think vesting periods, strike price, and dilution to name a few). You’ll earn an immense amount of trust and gratitude from your team. They’ll be able to make informed compensation decisions. In some cases, people will value your transparency more than the proposed stock options.
Between the lines: I say all of this from personal experience. When I started at Medicspot, I was naive about the types of stock options available and how much I’d actually walk away with if we sold for $10M, $50M or $100M. Fortunately, I’ve had my own deal doula in the form of Oliver Brooks.
Oliver has been around the startup block. He started 5 companies before co-founding Medicspot so he’s well versed in everything stock options. Since day one, every time I had a stupid question he’d patiently answer in layman terms, giving me a much better understanding of my options. I realize that 1-to-1 support may not be scalable for larger teams but this reaffirms the importance of education around stocks.
💸 Fix your monetization strategy
🥇 First place (4 min read vs 53 mins listening)
Pricing is a crucial aspect of any business. Yet it's often overlooked or undervalued. Naomi Ionita, Partner at Menlo Ventures, explores what startups get wrong about monetization and how to fix this.
What they say
Don’t wait too long to monetize
I see companies wait way too long to make the shift from building a product to building a business.
The true signal of product market fit is ultimately having people open up their wallets and pay you.
You're missing out on critical feedback loops to understand what people are willing to pay if you don’t monetize.
You're also shooting your future self in the foot because at some point you're going to start charging and you're going to experience some backlash so it's nice to get ahead of that.
Naomi Ionita
Don’t underprice your product or service
Startups often set the base price too low. They also leave money on the table by not offering different plans to cater to different segments.
You're inadvertently cheapening your product by under pricing. People attribute a lower dollar value or a zero dollar value to what you've built.
Prioritize your roadmap over time so that you're building based on what people actually want and are willing to pay you for.
Naomi Ionita
Don’t set it and forget it
There's this idea that your product development work is never done. Well, neither is your pricing.
I see companies labor over designs and build this perfect product that's delightful to use and then pricing is plucked out of thin air and then they don't revisit it.
This was Evernote. It was many, many years before we went back and overhauled the pricing. Instead, think about your pricing just like you do your roadmap.
Every 6 to 12 months there's probably something meaningful that you're launching for users. Treat that as an opportunity to revisit your monetization strategy and make sure you're compensated appropriately.
Naomi Ionita
Case study - Envoy
Envoy is an iPad-based way of checking in and sharing information with the person you're visiting at an office. Larry, the CEO, was meeting with a big hospitality company and the conversation was going really well.
The prospect was excited about using Envoy and the conversation shifted to pricing. In that moment, because Larry was feeling some good vibes, he decided to 10x the price that he was typically charging people.
The hospitality exec said 'Okay, sure. Sounds good.' There wasn't a second of hesitation.
What Larry learned in that moment was that he was wildly underpriced. It was very clear he hadn't thought about what the ceiling was.
The truth was he probably could have pushed it even further considering there was no hesitation.
The vast majority of companies are are definitely under charging. Continue to ask for more to understand where the upper bound might be.
It's okay to lose some deals due to price so that you can get a sense for where where the limit might be.
Naomi Ionita
What I say
Why it matters: Most of us will hold our hands up and admit we’ve not revisited our pricing recently. It’s a hard pill to swallow, but this may have lead to missed opportunities and lost revenue. We need to remember that pricing is not a one-time decision, but an ongoing process that requires constant attention.
You should monitor the market and customer feedback regularly and adjust your pricing strategies accordingly. This applies to base line pricing as well as different pricing plans or tiers to cater to different segments of customers.
Between the lines: Have you tried utilizing pricing psychology techniques to influence your customers' perception of value and increase their willingness to pay? Here are two examples to whet your appetite:
Anchoring is the concept of using a higher price point as a reference point to make a lower price seem more appealing (i.e. a premium tier).
Loss aversion is the idea that people have a stronger emotional response to losses than they do to gains (i.e. promotions with deadlines).
Try listening to one of my favorite podcasts Nudge for more behavioural science tips and tricks.
Shoutouts
When I find newsletters, podcasts, or books worth sharing, I’ll feature them here:
Ready to have your mind blown? Reid Hoffman has a fireside chat with ChatGPT. We’ve all had the chance to play around with AI but this reaffirms just how brilliant it is now - even in its formative years.
Note, these quotes were pulled at different points of the episode. Some sentences were left out to make the narrative clearer and more concise. Podup is not associated or affiliated with any podcast (unless otherwise stated). All roundups are independently written and do not imply any sponsorship or endorsement by the podcast.