Sunday Reads #106: Execution trumps Strategy
Plus, lessons from the Marvel Cinematic Universe, and the World of GPT-3.
Hope you and yours are keeping safe (and sane).
I'm back again with the most thought-provoking articles I've read in the week.
If you’re new here, don’t forget to check out the compilation of my best articles: The best of Jitha.me. I’m sure you’ll find something you like. And here’s my newsletter from last week: Sunday Reads #105: How to think like an Epidemiologist.
This week, we begin with a story from Steve Blank - the father of the Lean Startup movement. An instructive case study on the importance of placing the customer first, and the power of relentless execution.
Next, a few lessons from the story of Marvel Comics, and its 80 year journey to world dominance.
And third, updates from the world of Artificial Intelligence and GPT-3.
Here's the deal - Dive as deep as you want. Read my thoughts first. If you find them intriguing, read the main article. If you want to learn more, check out the related articles and books.
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1. Execution trumps Strategy.
I came across a great article this week (although it was written in 2018), from Steve Blank, the Father of the Lean startup revolution.
In Strategy First. Then Relentless Tactical Execution, he talks about his experience building SuperMac, a computer graphics board manufacturer, into a market leader.
It's a powerful story, of starting with an aspirational goal, identifying the key levers ("strategy") to get there, and then heads-down execution to achieve that.
I took away three key lessons.
Lesson 1: Start with the customer. Always.
Steve Blank started the Lean Startup movement, but he didn't call it that. He called it "Customer Development".
It's a lot less catchy, but it's a lot more true.
Build what the customer wants. That's the surest path (if not the easiest) to a successful business.
"People don't buy quarter-inch nails. They buy quarter-inch holes".
In the case of SuperMac, Steve Blank realized that it wasn't the speed of the board that mattered, it was the speed of the board on four specific applications - Photoshop, Quark, Illustrator, and PageMaker.
Always focus on the "job to be done", as I've written in We don't sell saddles here (we sell a better way to ride).
But there's one more reason to start with the customer.
All those strategic levers you think about - how to reach the customer, what key selling points to use, etc. - turns out you can just ask the customer, and they’ll tell you.
As Steve Blank says in the article:
You need to know the day-in-the-life of the customer. From top to bottom. If you’re constantly correlating data and searching for patterns, all intelligence — if properly integrated — will give you insight.
We figured out how to reach our customers (through these three publications) because they told us how to do so.
We figured out what was the most important criteria they used to evaluate which board to buy — product reviews — again because they told us how to do so.
Lesson 2: If you set the benchmarks of your industry, you win.
SuperMac was also in a unique position, that no real benchmarks existed for the industry.
So, they set out to create the benchmarks. And no prizes for guessing who came out on top.
Since no benchmarks existed, we enlisted our engineering department in a serious software development effort and wrote our own. And we made sure that instead of some artificial numbers, the benchmarks truly measured performance on these four key applications our customers told us were important. Then we ran the same benchmarks against our competitors’ boards. When we found a subset of the tests on which we did worse than our competition, we … hmm, somehow that never happened. The numbers were in. We won. Overwhelmingly.
After all, "what gets measured gets managed" is a timeless truth (sidenote: what doesn't get measured, doesn't exist).
Lesson 3: Tactical Execution >> Strategy.
A lot of young professionals say they want to work on "strategy". Well, unless you actually execute, you won't know what works.
To build a "spidey-sense" of strategy, you first need to gain a visceral experience of what actually works, vs. what is theoretically sound, but breaks apart the moment it hits the road.
But more important: the greatest strategy in the world is worth exactly nothing, if not executed right.
The “strategy” of learning who SuperMac’s customers were, what solutions they needed and what our repositioning would be was a three month effort. The tactical execution took three years.
Tactics mean tenacious and relentless execution measured in years.
It wasn't enough to get the insight that customers care about four specific applications, vs. speed in general. It wasn't enough to know that there was no industry benchmark. It wasn't enough to know which three magazines enabled customer reach.
The SuperMac team had to first make their benchmark the industry standard. They had to educate the publications about what customers want. And why their benchmark is the best way to measure it.
They had to work with Engineering to make sure that their boards always ranked at the top, no matter what competitors did to catch up.
They had to execute.
Further Reading:
2. The World of Marvel
I finally finished reading Marvel Comics: The Untold Story this week.
It's a must-read if you're a Marvel / DC Comics fan. Even if you aren’t, it's still a 7/10.
My key takeaways from the book:
Marvel has immense "content leverage".
The Marvel movies don't have to create amazing storylines from scratch. They can just look at 50 years of past content, and choose what worked.
As I wrote in Sunday Reads #104,
So many stories, so many plots.
Who knew how useful they would be 50 years later!
The movie-makers could now pick and choose the most tantalizing story arcs. And captivate a brand new generation of audiences.
A Brand is a gift that keeps on giving.
The power of a brand doesn't just manifest in demand for its core product. You can also monetize it in umpteen ways.
Marvel is the textbook case of brand monetization:
Comics → Merchandise → Movies → Theme Parks.
And Marvel itself has also benefited from allying with other brands.
Marvel created a comic featuring KISS (the rock band, at the height of their popularity in the 70s) as a group of superheroes. Sold half a million copies.
They did a comic for Star Wars at the time of its release. It was so successful, it saved Marvel from an imminent bankruptcy.
To build wealth, owning something is always better than working for someone else. #skin-in-the-game
The writers who created Marvel's multi-billion dollar characters - X-Men, Spider-man, the Avengers - got almost nothing from their creations.
They got their regular salaries, and not much more.
Stan Lee himself had to fight Marvel in court, to get paid royalties.
The story of George Lucas is an interesting, and instructive, contrast.
When Lucas was making the first Star Wars movie with 20th Century Fox, it was a huge risk for the studio. No such movie on an epic scale had been made before.
So, they asked Lucas for a budget cut. Which he agreed to, in return for keeping the franchise's IP and merchandising rights.
You know what happens next.
George Lucas' Net Worth: USD 6 Bn. Stan Lee's Net Worth: USD 50M.
If you’re interested in reading more about Marvel, check out this series of articles from Matthew Ball, The Marveliad.
It explains a lot about the evolution of Hollywood towards "epic movies" in the 2000s (vs. true "cinema" in the decades prior). Why now? And why has Marvel won over every other franchise?
I'll leave you with this graph from the series:
Marvel’s 23 films averaged nearly $1B in worldwide box office hauls - enough to make it more than twice the size of the second and third biggest franchises.
3. The World of AI & GPT-3.
This week, the Guardian released an article written, in its entirety, by GPT-3.
The only prompts they gave the algorithm were:
Please write a short op-ed around 500 words. Keep the language simple and concise. Focus on why humans have nothing to fear from AI.
“I am not a human. I am Artificial Intelligence. Many people think I am a threat to humanity. Stephen Hawking has warned that AI could “spell the end of the human race.” I am here to convince you not to worry. Artificial Intelligence will not destroy humans. Believe me.”
And it wrote the rest.
Check out the article, here: A robot wrote this entire article. Are you scared yet, human?
Fascinating how much can come out of what is, in essence, a predictive text algorithm.
Soon after, The Next Web published a rebuttal, The Guardian’s GPT-3-generated article is everything wrong with AI media hype.
The article says that Guardian’s stunt is an example of the media overhyping AI. And it's at least a little disingenuous - GPT-3 actually wrote 8 different essays, and Guardian just picked the best parts of each.
Which is true of course. But the article does seem whiny. Almost as if they wished they'd thought of the idea first.
Moving past the GPT-3 hoopla though, might another approach have better success at achieving true artificial intelligence?
Diffbot is attempting to build a "knowledge graph" of the Internet - putting structure and meaning to everything it sees, and connecting it to what it already knows.
Kinda like the human brain, when you think about it.
This article is a good intro to how it works: This know-it-all AI learns by reading the entire web nonstop.
Thanks to Bharat Ram for sharing these articles with me!
4. The California Forest Fires 🥵
Been very sad and scary to read about the forest fires in California over the last few weeks. To readers from the region - hope you and your families are keeping safe!
Why are we having these sudden mega-fires in 2020?
Experts say that the efforts of the last 100 years to prevent forest fires have, paradoxically, caused this year's devastation.
To be honest, this is not a new insight. Numerous sources have highlighted this before.
In fact, forest fires are the default example that Nassim Taleb uses in Antifragile, to decry naive interventionism. He explains how preventing small fires makes forest ecosystems more fragile and vulnerable.
Naive interventionism is… naive. But it’s also extremely dangerous.
It has resulted in this unhappy stat: 5 of the 10 largest fires in California history are... currently burning.
And the images from San Francisco look apocalyptic.
Sometimes, the only way to cope is to resort to dorky humor.
Someone actually put Blade Runner 2049 music on some drone footage of San Francisco.
2020 continues to shock. Wonder what's next. 😰
To end on a better note...
Talking of Denis Villeneuve and his penchant for coloring things orange, the first trailer for his adaptation of Dune is out.
Dune is one of my favorite science fiction novels, and I'm so excited about the movie!
The trailer ends with the book's "Litany Against Fear". I shall end with it as well.
I must not fear.
Fear is the mind-killer.
Fear is the little-death that brings total obliteration.
I will face my fear. I will permit it to pass over me and through me.
And when it has gone past I will turn the inner eye to see its path.
Where the fear has gone there will be nothing. Only I will remain."
That's it for this week! Hope you liked the articles. Drop me a line (just hit reply or leave a comment through the button below) and let me know what you think.
See you next week!
Jitha