Kiko's Musings

@franciscohmello
Founder of Qulture.Rocks
Trying hard to be a: Writer, entrepreneur, angel investor, curious mind.

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The never-ending cycle of disruptive innovation

“Disruptive innovation” probably doesn’t mean what you think it means. The term was first coined by Clayton Christensen on his “The Innovator’s Dilemma” to mean when a company creates a simpler, cheaper offering of some product or service and wins customers that are overwhelmed by the more complex and expensive offerings of established players [1].

Let’s take the example of Salesforce. A disruptive innovation attacking Salesforce would be Pipedrive: a simpler, cheaper version of Salesforce’s CRM system (sales force automation??) that gets the job done fine but for less of a hassle.

Here, the concept of a “job” is important: a job, or job-to-be-done, is the actual progress a customer can make given a set of circumstances. Sales managers probably need more process, organization, data, and therefore buy a software product and some services to do that, which is Salesforce.

But...

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On the structure of stories

Today I was reading John McPhee’s book, Draft No. 4: On the Writing Process. The book, which is brilliant, by the way, talks, among other things, about how to structure a story. At one point, McPhee discusses one of his writings, a New Yorker piece (or was it a book?) about Alaska. Using parts of his writing to explain how he chooses among various structures for his stories, he says “readers are not supposed to notice the structure. It is meant to be about as visible as someone’s bones”. It strikes me as true. Even though I’ve read many books about the craft of writing, ranging from how to tell a story on to how to best use punctuation, I can hardly remember a moment when I’ve stopped reading a book or watching a movie to think about the structure of what my brain was consuming. To think about arc, character, verb tenses or periods.

So if reading was not a good way to learn with the...

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What should we build next?

This is a hypothetical, but highly realistic, dialogue we’ve been having with ourselves and our mentors about what we should build next here at Qulture.Rocks:

What should we build next?

Talk to your users!!!

But which users from the 1000’s we have?

Sort them by size, or relevancy to the business!

Hmmm. But then I’d talk to the biggest elephant, which we don’t even think has a great fit with our solution….

Then pick the next biggest one.

Sounds good. The next biggest customers uses our 3 different - but interrelated - products. Which one should we focus on?

What do you think?

We’ve thought about picking the one that’s used the most; we’ve also thought about picking the one that’s used the least. Or something in between…

Why don’t you focus on the product that people use the least? So you can maybe drive adoption?

Well. It’s so bad we’d have to rebuild it from the ground up.

An...

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Why Michael Porter is still very relevant these days

My interest in Michael Porter’s work goes way back to when I was still at the start of my career in finance. I had a manager/mentor - Pedro - who was a former McKinsey consultant and introduced me to Porter’s Five Forces model. It’s elegance and simplicity really hooked me. I could basically apply the model to any company, and the insights were always very interesting and relevant.

That's him

Porter deals with competition, and how it affects industry [1] and company-level profitability. He says that “competition in an industry continually works to drive down the rate of return on invested capital toward the competitive floor rate of return, or the return that would be earned by the economists’ ‘perfectly competitive’ industry”. If a market has tough dynamics - or, we could say, if the five forces are particularly strong in that market -, its companies may have a more difficult going, and thus...

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Do SaaS stocks perform alike?

Ever since I’ve started following SaaS stocks on my Iphone, I’ve noticed that Workday and Hubspot’s historical price graphs looked a lot alike, but that Veeva’s didn’t. So I decided to plot them on a chart builder to see what they looked like against each other. Turns out they really do behave similarly (Hubs and Wday), and that indeed Veeva is on a different path (rocketing upwards):

Screenshot 2017-02-21 07.56.37.png

As you can see, Salesforce, a much more mature play, is less correlated, showing a kind of “tamed horse” price trajectory when compared with both. When we take Veeva (the incredible growth story) and Salesforce (the mature daddy) out of the way, we see that Hubspot and Workday look a lot alike in terms of price action:

Screenshot 2017-02-21 07.57.07.png

Two selloffs call our attention, around Jul'16 and Dec'16, about which I have no information or recollection (it’s been a long time since I haven’t followed the markets closely). But...

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My review of Phil Knight’s memoir, Shoe Dog

I have to say I only picked up Shoe Dog, Nike’s Phil Knight’s autobiography (or memoir? What’s the difference?), because of it’s mention on Gates Notes, Bill Gates’ blog, where the Microsoft founder publishes an yearly holiday book list based on what were his top reads of the year (in this case, 2016).

Here’s what Gates had to say about the book:

[the] memoir, by the co-founder of Nike, is a refreshingly honest reminder of what the path to business success really looks like: messy, precarious, and riddled with mistakes. I’ve met Knight a few times over the years. He’s super nice, but he’s also quiet and difficult to get to know. Here Knight opens up in a way few CEOs are willing to do. I don’t think Knight sets out to teach the reader anything. Instead, he accomplishes something better. He tells his story as honestly as he can. It’s an amazing tale.

I tend to trust book suggestions by...

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A Brief Economic History of Brazil - pt 1

When Portugal decided to double-down on colonizing Brazil, it based this decision on some wishful thinking: that Brazil carried precious metals just like Peru and Mexico did.

Brazil was first “discovered” when a squad of Portuguese ships found its land when navigating east from Portugal in the hopes of finding an alternative route to the Indies, where it could buy stuff like cinnamon and pepper to resell back home.

Unfortunately for Portugal, there wasn’t a lot of gold or silver around here.

So in the first few years of the “discovery” (16th century), Portuguese settlers explored native indians to extract Pau-Brazil from the jungle. The trade was terrible, since the noble wood was very difficult to transport back to Europe.

Next came sugar cane agriculture. Brazil had lots and lots of land to spare, so Portugal divided its territory into many lots, and these guys who received the...

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What a BAD pricing page - and revenue model

Today I ran into this pricing page for HackerRank, a recruiting platform for technical jobs (i.e., developers):

Screenshot 2016-11-10 00.35.12.png

The page and its content is highly confusing.

First of all, “free trial” and “premium” are displayed as two different plans. But a free trial is not a plan: it’s a trial, that let’s you - try - the software, decide, and buy it. So a much better info architecture for the page would be to offer one plan, called whatever, and explain that this plan is available on a “free trial” basis.

The second problem is that “free trial” and “request a demo” are two things that shouldn’t coexist. If the company offers a free trial, it’s moving along the lines of a self-service model, where the trial is the actual demo, allowing the potential buyer to decide if he wants to purchase the software. If it offers a trial, it should also offer pricing for customers that decide to buy it for...

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What makes Brazilians Brazilians?

Gilberto Freyre, arguably Brazil’s greatest sociologist, does a great job in studying and hypothesising why Brazilians are the way they are.

According to him, it all boils down to the Portuguese people, and their adaptation to the newly conquered land, Brasil, named after a common native tree that is nowadays almost extinct. The Portuguese are themselves a melting pot of differences: on one hand, there’s the European heritage, more Germanic, cold, and direct. On the other, there’s the influence - and ethnic mixture - of the Moore peoples of northern Africa, who’d maintained control of the Iberian peninsula for a long time.

The cold and the warm also come together on the climate of Portugal, which is almost as northernly as New York, but that bathes itself on the warm, velvety winds that flow north from the Saara desert and over the Mediterranean sea. It softens the Portuguese; brings a...

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Are you Amazon, or are you Zappos?

I once spoke to a fellow startup founder (huge funding rounds, killer team), and asked him a pretty simple question: are you Amazon, or are you Zappos? The startup had the mission of disrupting one of these really large industries, like mobile phones or banks. It sounded like a crucial question to me: What, in the eyes of this founder, would his company be like towards consumers? A frugal cost-cutter, that would extract huge inefficiencies from the industry by vertically integrating it with the use of technology (and thus offering little or no customer support by heavily investing in self-service technology), or would it make a killing with amazing customer service, (something consumers in the space were incredibly unused to), like having reps talk on the phone to customer for hours, order pizzas, and so on and so forth?

I’m a manager by training. I onde had a former McKinsey consultant...

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