Happy Friday and welcome to letter # 2.
A few people have asked what propelled me to start writing. There are two main reasons:
I used to think that writing is the by-product of deep thinking. I’ve become convinced that writing is a form of deep thinking.
Writing encourages me to read more. I enjoy reading, but now I do it intentionally and create time for it.
I have diverse interests just like you. They range from building a company, creating a high performance team culture, marketing a brand, investing, personal development, sports and much more. I don’t consider myself to be a domain expert in any one thing but a student who strives to sit at the intersection of many domains.
Thoughts on capital markets and it’s reaction to current events
I wrote a 4 min essay on understanding the stock market in the midst of COVID-19, social unrest and tweet storms.
Main drivers for growth in stock:
Latest jobs report is promising; US added 2.5M jobs for the first time in weeks
We’ve likely already experienced the bottom
Trust in the federal reserve; The Fed can turn anything bad into good
Investors do not know where else to invest; Equity markets get a lot of love when other asset classes become uninteresting
The essay captures each of the above bullets in more detail.
How retail brands are revising their plans post-COVID
The pandemic has pushed many retailers to their heels. It goes to show that operating in a highly constrained environment can bring great ideas to life; there’s a reason why good startups don’t raise too much capital and maintain their agility in a resource constraint environment.
McKinsey wrote a great piece on retailers adapting to a new normal. Worth a quick read.
The big-short list:
Marketing.
Reaching the right people at the right time. Reduce media waste, start tracking better. Every good marketer in a large organization will need creative and technical chops.
Build a better digital ecosystem.
Discovery and intent start on mobile. The phone is an extension of people. Next gen retailers will double down on mobile experience and optimize for “zero friction.”
Product assortment.
Less is more. Having hundreds of thousands of products sitting under one umbrella brand isn’t strategic in the mobile age. For example, JC Penny would be better off compartmentalizing and creating micro brands for fashion, fragrance, beauty, etc versus having it all transact through one large brand. In the mobile world, brands need to optimize for communities. What resonates with my mom won’t resonate with my sister.
Do me a favor and go to JC Penny’s website. Just try to find the ideal product for you in any category. There's a high likelihood that you’ll face a paradox of choice and eventually just leave. “More” isn’t actually “more” in the mobile world… legacy retailers must consider having microbrands under their ecosystem to thrive.
Become value driven.
Experiential retail is a big opportunity. Most non-essential retail must think like luxury retailers. I wrote a thread on Twitter about how brands can take simple steps to achieve this. I recognize it doesn’t work for all, but it can certainly work for many non-essential product categories that have high average order value and/or is a considered purchase.
Ultimately, legacy retailers have attempted to win on both cost and value, and are not winning in either. Here’s a quick 1 min essay on value vs. cost… relevant for startups and large companies.
Book recommendation
The Effective Executive is a book I’d recommend to anyone. It’s written by one of the greatest management thought leaders, Peter Drucker.
I encourage reading the whole book because of the examples he shares, but if you prefer to scroll through a summary first, then here’s a great overview: link to summary.
Links meant to be shared
Pretty motivating. Building is the only solution.
People achieving phenomenal things quickly
Incredible to see what good teams are able to build when everyone is on the same mission.
The running list of 2020 retail bankruptcies
This list will give you a nostalgic feeling of walking around the mall when you were young…
Why more startups should aim to be “camels” than “unicorns”
Author makes a solid argument regarding the resiliency of a camel; slow, steady, doesn’t require a ton of intake, always keeps a reserve. Many great companies would still be around if they approached their business like this.
Parting Thoughts
If you enjoyed this letter, please share it with colleagues and friends.
Have a great weekend.