Perspective Newsletter # 2
Curated content across Tech, Product, Leadership and Startups.
The Unified Content Business model
Here Ben Thompson highlights a few key aspects of the Content Economy that has grown exponentially in the last few years.
Content cost - Economies of scale or a moat - more subscribers means average content cost per subscriber is very low and margins are good which in turn create cash flows for future content creation. This is the reason why Mr. Beast is spending more and more in making each of his videos, he knows that no one else can do this(no one has that scale). Thus creating a moat in otherwise a no-moat world of content creators.
Attention is the ultimate currency and there is a hard upper limit to it. After that everything is a zero sum game. Till now, internet companies have been growing without really competing. But now since they have covered all our idle time, it reduces to a zero sum game. Tiktok’s gain will be Instagram’s loss. (though we still have a huge chunk of world population to cover, but economic realities make that difficult and out of control of the internet companies).
Another key questions that he highlights here is - “Publishers need to answer the most fundamental question required of any enterprise: are they a niche or scale business?
Niche businesses make money by maximizing revenue per user on a (relatively) small user base or
Scale businesses make money by maximizing the number of users they reach”
A unified model is emerging where is you have a freemium strategy for your content - Watch for free but pay indirectly by watching ads or Pay for subscription.
The Science of persuasion
Here the writer talks about the fundamental challenge of Leadership - Getting things done through others. He talks about the science behind getting to this and highlights six key parameters -
Liking (Uncover real similarities and offer genuine praise)
Reciprocity (Give what you want to receive)
Social Proof (Use peer power whenever it’s available)
Consistency (Make their commitments active, public, and voluntary)
Authority (Expose your expertise; don’t assume it’s self-evident)
Scarcity (Highlight unique benefits and exclusive information)
Two parameters that I feel are really powerful in motivating others and getting things done that are not covered in this essay -
Understand what motivates them and align the task with their motivation. A hustler should be given ownership of tasks/projects that involve out of box thinking and iterative approach. On the other hand, another person might more be interested in complex problems that require very deep thought.
Purpose or potential impact - Show what the task can do. Your belief in a project can be translated to their energy and passion. Key point is to reiterate why a certain project is important and what it can change.
Function or Domain - Basic Org Design
Here the author talks about the trade-off between the two fundamentals ways of organization structuring - Function i.e. Android team, iOS team, Back-end team and so on and Domain - Search team, Checkout team etc. He compares the two models on 5 parameters
Ownership & Agility - Here the domain model shines for obvious reasons. Functional model can work if we create virtual domain teams
Engineer Happiness & Growth - Domain based teams lack in this but this can be mitigated by creating secondary structures for knowledge sharing and mentorship.
Quality and Consistency - Again Domain based teams fall behind in this but overall quality is more of a function of Company’s culture rather than specific org model.
Elasticity - Again Domain based theme suffer because not all features require the same team structure and it becomes difficult to optimize for efficiency.
Alignment with cross-functional (non-eng) orgs - This is where Domain based teams shine as they are independent and can take decisions. He says, “This is perhaps the ultimate reason why domain-based models became so popular recently.”
Bloomberg’s Most Valuable Application
Simple but remarkable. I think this is what is missed as companies grow. Most of the products are an outcome a small team motivated to solve a very specific problem they are facing and then they discover that they were not alone.
Another highlight was how conviction is important in aligning and convincing people. Something that should be evaluated during interviews especially in Product Managers and by Investors in founders.
Ending with a quote:
One sign that determination matters more than talent: there are lots of talented people who never achieve anything, but not that many determined people who don't. - Paul Graham