Choosing a strategy is a lot more complex for companies than it used to be
BUSINESSES are bombarded with advice on strategy. Many gurus urge them to discover a “blue ocean” where they can swim without competition. Others argue that this is a pipe dream—a blue ocean will immediately be turned red by competitors—and advise them to focus on flexibility. Some pundits preach the first-mover advantage; others urge firms to be fast followers. Bosses end up confused and cynical, with some lurching from one strategy to another and others concluding that they never want to hear the word “strategy” again.
The Boston Consulting Group (BCG) made its name with clever ideas about strategy, most notably the growth-share matrix, which helps firms divide their lines of business into stars, cash-cows, dogs and question-marks. Now it has brought some clarity to the current confusion with a new book, “Your Strategy Needs a Strategy”, by Martin Reeves, Knut Haanaes and Janmejaya Sinha. The BCG trio argue that business is so fast-moving and diverse these days that a single, overarching strategy will no longer do. The competitive landscape is constantly changing in many industries; businesses speed through the life-cycle from stars to dogs. So, they say, wise bosses should choose from a “strategic palette” in much the same way that artists choose from a palette of colours. The book identifies a handful of primary strategies, that bosses should be ready to switch between and, at times, blend.
It starts with the “classical” strategy that business schools have taught since the 1950s: find a good niche, develop a plan to dominate it, then muscle up. Mars, a confectionery giant, maintains its dominance through close relationships with suppliers, relentless cost control and timeless products. The Milky Way bar was invented in 1923 and the Mars Bar in 1932. Consumer-goods makers such as Procter & Gamble, retailers such as Walmart and logistics firms such as UPS all use variations of this strategy. But stable markets are getting harder to find. So companies are making more use of four other types of strategy.
One is the adaptive, evolutionary approach. This is particularly popular among technology firms. Tata Consultancy Services talks about its 4E model—explore, enable, evangelise and exploit—which in English means trying lots of small things and then backing whichever ones work. But it can also be applied in older industries. Inditex’s global success as a fashion retailer is based on first producing its clothes in small batches, then scaling up production rapidly if they sell well.
Another is the visionary, blue-ocean approach: generate a compelling new idea—a whole new market, with you at its centre. This was Steve Jobs’s approach with Apple’s iPhone and iPad, but there are plenty of smaller examples. Anna Wojcicki, a founder of 23andMe, came up with a new health product—a kit that allows you to analyse your susceptibility to various diseases—and then focused on selling her new idea to both investors and the general public. “The average individual just didn’t know why they should get their genome,” she said. “So educating the individual and getting them excited about it was our first challenge.”
A third is the shaping approach: working with partners to create new markets. The partners could be private-sector ones. Apple and Google have worked with many small app developers to create an ecosystem of mobile services. Or they could be public-sector ones. Novo Nordisk, a Danish drugmaker, has captured 60% of the Chinese market for insulin by working closely with Chinese doctors and health authorities to raise awareness of diabetes, which had previously been under-diagnosed.
A fourth strategy—for companies on the brink—is renewal: refocus the business decisively, preserve capital, free resources to apply to areas of growth. After its government bail-out, AIG, a giant insurance conglomerate, got out of many businesses and took drastic action to stop rivalry and overlap between the rest.
Overlying all these options is the strategy of being “ambidextrous”, that is, being able to skip nimbly from one strategy to another, or to pursue several of them simultaneously. Some companies, such as PepsiCo, have two separate groups of people in each division: one whose strategy is to maximise the efficiency of the business in its current form, and another that looks for ways to disrupt it (before someone else does).
Smudging the canvas
The BCG trio’s taxonomy of strategies at least brings a bit of clarity to some of management theory’s cloudier waters. But they have little to say on how managers should apply their palette of strategies to the canvas without making a Jackson Pollock of it. The classical, niche-domination strategy often entails minimising variation to squeeze out costs; the adaptive strategy involves maximising variation so as to find out which variant works best. The shaping strategy is all about sharing between companies and others; the classical strategy is typically all about being closed and defensive. How to solve such contradictions?
Besides offering little advice on how best to pivot from one strategy to another, the authors also avoid discussing how companies can pursue a multi-strategy approach without creating battle lines between their various chiefs. It is simply assumed that the executives running the “business as usual” strategy will get along happily with those pursuing the “disrupt everything” approach. It is hard enough for businesses to switch wholesale to a new strategy without encountering resistance from managers who have tied their reputations to the old one; maintaining different teams working simultaneously on opposing strategies is a recipe for internecine warfare, and for wasting resources as the firm is pulled in opposing directions. The BCG trio are no doubt right that companies will need to become more ambidextrous if they are to survive in turbulent times. But what bosses need now is a book on how to prevent such organisations from becoming self-contradictory and conflict-ridden ones.
KOMPAS.com - Dengar ya, pokoknya saya ingin keluhan saya ditangani saat ini juga, atau Anda dan saya sama-sama tidak pulang ke rumah!
Wah, jangan begitu pak, saya kan hanya petugas perusahaan saya tidak memiliki kuasa untuk menangani komplain bapak?
Saya tidak mau tahu, itu urusan kamu, sekarang saya ingin kamu selesaikan komplain ini!
Nah, seperti itulah pak Jay, kira-kira contoh nyata keluhan yang bersifat emosional dari pelanggan kami yang saya rasakan sangat sulit ditangani dan sungguh mengancam saya waktu itu.
Ya di atas adalah diskusi saya dengan salah satu sahabat kami peserta training Handling Complaint Skill. Dan saya sangat yakin pengalaman serupa juga pernah Anda hadapi, minimal 1 kali dalam seumur hidup.
Perlu saya tekankan bahwa yang dimaksud pelanggan disini bukan hanya mereka yang membeli produk dan jasa yang Anda jual atau pelanggan eksternal. Tetapi juga pelanggan internal kita, yaitu: atasan, rekan kerja, dan juga anggota tim Anda.
Keluhan atau komplain yang bersifat emosional saya analogikan sebagai “Bara Api” yang menyala. Dia begitu panas dan siap membakar siapapun yang gagal mengendalikannya. Artinya jika tidak bisa dikelola dengan cermat, jelas “bara api” itu sukses menghancurkan Anda.
Lalu apa yang dimaksud dengan memetik “Bara Api”? Dan mengapa pula kita harus memetiknya?
Memetik “Bara Api” adalah teknik bagaimana mengatasi keluhan pelanggan Anda yang bersifat emosional, dan mengubah keluhan itu menjadi peluang atau bahan bakar untuk pertumbuhan Anda.
Dengan kata lain, memetik “Bara Api” lalu menggunakan “Bara Api” itu sebagai bahan bakar atau peluang untuk pertumbuhan penjualan Anda juga Karir Anda. Hal ini penting karena teknik yang akan saya sampaikan begitu mudah dan terbukti mujarab.
Teknik tersebut kami kembangkan dengan Formula Take HEAT.Terjemahan sederhana Take HEAT adalah mengambil Panas atau mengambil Bara Api, dalam hal ini adalah mengambil amarah pelanggan anda yang sedang murka.
Formula Take HEAT, juga merupakan singkatan dari teknik bagaimana mengatasi keluhan pelanggan yang bersifat emosional dan mengubahnya menjadi peluang.
Ok, kita mulai saja mengupas Formula Take HEAT:
H berarti Hearing to Understand atau mendengar untuk memahami. Ini adalah langkah pertama yang harus kita lakukan saat mengatasi keluhan pelanggan. Ingat! Kebutuhan orang yang sedang marah atau emosi tidak stabil adalah didengar serta disimak apa yang disampaikannya, bukan dibantah.
Meskipun terkadang kalimat yang disampaikan terasa tidak mengenakkan , terkadang kasar bahkan mengancam, maka teruslah bersabar dengan menyimaknya. Langkah pertama ini secara bertahap akan mampu mengurangi dosis amarah pelanggan Anda.
E berarti Empathy bermakna empati. Langkah kedua ini dapat ditafsirkan sebagai menempatkan posisi kita persis seperti posisi pelanggan yang sedang terbakar emosinya.
Empati sangat bermanfaat untuk segera memulihkan logika pelanggan yang sedang terganggu oleh api emosi, sehingga memudahkan kita melanjutkan ke langkah berikutnya.
Empati disaat yang sama juga sanggup membuat Bara Api amarah tidak semakin memanas dan membesar dengan kata lain memudahkan anda untuk mengauasai serta memetik Bara Api amarahnya.
A berarti Apologize, yaitu langkah ketiga yang berarti meminta maaf kepada pelanggan yang sedang tidak enak hati akibat emosi. Dengan meminta maaf meskipun belum tentu Anda yang bersalah, maka buktikan anda sudah sukses memetik Bara Api itu atau mengendalikan amarah pelanggan.
Apologize bermanfaat untuk memindahkan Bara Api di kepala dan hati pelanggan ke tangan Anda. Kini saatnya kita manfaatkan Bara Api itu untuk bahan bakar pertumbuhan karir dan bisnis Anda dengan menuju kepada tahap keempat.
T berarti Take Action atau mengambil tindakan. Langkah keempat ini harus disesuaikan dengan jenis atau bentuk keluhan yang disampaikan pelanggan. Artinya ada beberapa kondisi Anda membutuhkan bantuan dari atasan yang memiliki otoritas lebih tinggi untuk mengambil tindakan dalam rangka menyelesaikan keluhan mereka.
Ada kalanya dalam langkah keempat ini anda membutuhkan kolaborasi dari bagian atau departemen lain, bahkan bisa saja membutuhkan pertolongan dari rekan kerja sejawat.
Oleh sebab itu sangat saya sarankan bahwa pemahaman Memetik “Bara Api” tidak hanya untuk mereka para Front Liner Customer Service, namun sangat wajib hukumnya bagi seluruh penghuni perusahaan yang berorientasi kepada pelanggan atau customer centric.
Maka dengan Formula Take HEAT (Hearing to Understand, Empathy, Apologize, Take Action), sangat dimungkinkan bagi anda untuk Memetik setiap “Bara Api”, sehingga Anda sanggup tersenyum dan berkata “pelanggan marah? Siapa Takut?
https://hbr.org/2014/11/the-hard-data-on-being-a-nice-boss?utm_campaign=Socialflow&utm_source=Socialflow&utm_medium=Tweet by Emma Seppälä
There’s an age-old question out there: Is it better to be a “nice” leader to get your staff to like you? Or to be tough as nails to inspire respect and hard work? Despite the recent enthusiasm for wellness initiatives like mindfulness and meditation at the office, and despite the movement toward more horizontal organizational charts, most people still assume the latter is best.
The traditional paradigm just seems safer: be firm and a little distant from your employees. The people who work for you should respect you, but not feel so familiar with you that they might forget who’s in charge. A little dog-eat-dog, tough-it-out, sink-or-swim culture seems to yield time-tested results and keep people hungry and on their toes. After all, if you’re a leader who seems like you care a little too much about your employees, won’t that make you look “soft”? Won’t that mean you will be less respected? That employees will work less hard?
New developments in organizational research are providing some surprising answers to these questions.
“Tough” managers often mistakenly think that putting pressure on employees will increase performance. What it does increase is stress—and research has shown that high levels of stress carry a number of costs to employers and employees alike.
Stress brings high health care and turnover costs. In a study of employees from various organizations, health care expenditures for employees with high levels of stress were 46 percent greater than at similar organizations without high levels of stress. In particular, workplace stress has been linked to coronary heart disease in both retrospective (observing past patterns) and prospective (predicting future patterns) studies. Then there’s the impact on turnover: research shows that workplace stress can lead them to look for a new job, decline a promotion, or leave a job.
Is it any better with “nice” managers? Do their employees fare better — and do kind bosses get ahead?
Harvard Business School’s Amy Cuddy and her research partners have also shown that leaders who project warmth – even before establishing their competence – are more effective than those who lead with their toughness and skill. Why? One reason is trust. Employees feel greater trust with someone who is kind.
Such a culture can even help mitigate stress. While our brains are attuned to threats (whether the threat is a raging lion or a raging boss), our brain’s stress reactivity is significantly reduced when we observe kind behavior. As brain-imaging studies show, when our social relationships with others feel safe, our brain’s stress response is attenuated. There’s also a physical effect. Whereas a lack of bonding within the workplace has been shown to increase psychological distress, positive social interactions at work have been shown to boost employee health—for example, by lowering heart rate and blood pressure, and by strengthening the immune system. In fact, a study out of the Karolinska Institute conducted on over 3,000 employees found that a leader’s qualities were associated with incidence of heart disease in their employees. A good boss may literally be good for the heart.
Taken together, this body of research shows that creating a leadership model of trust and mutual cooperation may help create a culture that is happier, in which employees help each other, and (as a consequence) become more productive in the long run. No wonder their nice bosses get promoted.
But what constitutes a compassionate leadership style and workplace exactly? That is a trickier question. Many companies try to offer well-being “perks” such as the ability to work from home or receive extra benefits. A Gallup poll showed that, even when the workplace offered benefits such as flextime and work-from-home opportunities,engagement predicted well-being above and beyond anything else. And most of the research suggests that a compassionate workplace fosters engagement not so much through material goods as through the qualities of the organizations’ leaders, such as a sincere commitment to values and ethics, genuine interpersonal kindness, and self-sacrifice.
What is clear is that we’re going to have to start valuing kindness at work more. One depressing study out of Notre Dame suggests that for men, the more agreeable they are, the lower their pay rate. Because agreeableness does not impact women’s salary, the researchers theorize that when we don’t conform to gender norms, we’re punished. The answer is not for men to be cruel, but for us all to help change the norms. With a little skill, there are ways to be agreeable while not being a pushover or a softy. And then maybe we’ll all be a little bit happier at work.
Emma Seppala, PhD, is a Stanford University research psychologist and the Associate Director of Stanford University’s Center for Compassion and Altruism Research and Education. She consults is a corporate well-being consultant as well as a science journalist with Psychology Today, Huffington Post, Scientific American Mind and the e-magazine she founded, Fulfillment Daily. Follow her on Twitter @emmaseppala or her website www.emmaseppala.com.
https://hbr.org/2015/04/5-signs-its-time-for-a-new-job?utm_campaign=Socialflow&utm_source=Socialflow&utm_medium=Tweet by Tomas Chamorro-Premuzic
Regardless of your age, background, or accomplishments, you have probably fantasized about the possibility of a new career at some point in your life – those who haven’t are the exception.
LinkedIn reports that of its 313 million members, 25% are active job seekers, while 60% can be considered passive job seekers – people who are not proactively searching for a new job, but seriously willing to consider opportunities. In addition, there has been a steady increase of self-employed and temporary workers over the past two decades. This is true even in rich economies with low unemployment rates, like theU.S. and the U.K., partly because of the glamorization of entrepreneurship, the rise of the sharing economy, and the ubiquity of incompetent management, which makes the prospect of not having a boss rather alluring.
Yet at the same time, humans are naturally prewired to fear and avoid change, even when we are decidedly unhappy with our current situation. Indeed, meta-analysesshow that people often stay on the job despite having negative job attitudes, low engagement, and failing to identify with the organization’s culture. And, since career changes are often driven by emotional rather than rational factors, they often end up disappointing. So at the end of the day, there is something comforting about the predictability of life: it makes us feel safe. As the Danish philosopher Søren Kierkegaard observed: “Anxiety is the dizziness of freedom.”
The inability to make a decision is in itself anxiety-provoking, because it increases uncertainty about the future. In addition, most people, even millennials, value long-term job stability, not just in themselves but also in others. Unsurprisingly, theOECD sees job security as a key component of quality of life, while academic studies report that job insecurity is a major cause of psychological stress.
All this explains why it is so hard to leave a job, no matter how uninspiring or monotonous it may be. In order to help you decide whether it may be time for a career change, here are five critical signs, based on psychological research, that you would probably benefit from a career switch:
You are not learning. Studies have shown that the happiest progression to late adulthood and old age involves work that stimulates the mind into continuous learning. This is particularly important if you are high on Openness to Experience/Inquisitiveness, a personality trait associated with curiosity, creativity, love of learning, and having a hungry mind.
You are underperforming. If you are stagnated, cruising in autopilot, and could do your job while asleep, then you’re almost certainly underperforming. Sooner or later, this will harm your resume and employability. If you want to be happy and engaged at work you are better off finding a job that entices you to perform at yourhighest level.
You feel undervalued.Even when employees are happy with their pay and promotion prospects, they will not enjoy their work unless they feel appreciated, especially by their managers. Furthermore, people who feel undervalued at work are more likely to burnout and engage in counterproductive work behaviors, such as absenteeism, theft, and sabotage. And when the employee in question is a leader, the stakes are much higher for everyone else because of their propensity to behave in ways that could destroy the organization.
You are just doing it for the money. Although people tend to put up with unrewarding jobs mostly for financial reasons, staying on a job just for the money is unrewarding at best, and demotivating at worst. As I pointed out in a previous post, employee engagement is three times more dependent on intrinsic than extrinsic rewards, and financial rewards extinguish intrinsic goals (e.g., enjoyment, sheer curiosity, learning or personal challenge).
You hate your boss. As the saying goes, people join companies but they quit their bosses. This implies that there is a great deal of overlap between employees who dislike their jobs, and those who dislike their bosses. In our research, we find that 75% of working adults find that the most stressful part of their job is their immediate supervisor or direct line manager. Until organizations do a better job at selecting and developing leaders, employees will have to lower their expectations about management or keep searching for exceptional bosses.
Of course, these are not the only signs that you should pay attention to. There are many other valid reasons for considering a job switch, such as work-life balance conflicts, economic pressures, firm downsizing, and geographical relocation. But these reasons are more contextual than psychological, and somewhat less voluntary. They are therefore less likely to lead to decision uncertainty than the five reasons I listed.
At the end of the day, real-world problems tend to lack a clear-cut solution. Instead, the correct answer depends on its consequences and how pleased we are with the outcome, and both are hard to predict. As Abraham Lincoln said, “the best way to predict the future is to create it,” so the only way to know whether a career move is actually right for you is to make it.
http://www.forbes.com/sites/alexkonrad/2015/03/25/how-venture-cowboy-chris-sacca-made-billions/?utm_campaign=Forbes&utm_source=TWITTER&utm_medium=social&utm_channel=Technology&linkId=13116990 by Alex Konrad This story appears in the April 13, 2015 issue of Forbes. Chris Sacca's signature cowboy shirts make the trip to his new Montana home. (Credit: Jamel Toppin for Forbes) Between the parade of wet suits and abundant seafood and yoga joints, Manhattan Beach, just south of Los Angeles, tries to cling fast to its surf town roots. It’s a tough battle. Strolling the boardwalk, I pass beach volleyball gold medalist Kerri Walsh Jennings practicing spikes close by glitzy homes locals say belong to Mark Cuban and former Oracle boss Ray Lane.
My guide, tech investor Chris
Sacca, represents another evolution: The beach serves as his de facto office,
and the 39-year-old eagerly points out spots more notable for his startup
stakes than surf breaks. Here’s where Instagram cofounder Kevin Systrom pedaled
beach cruisers with Sacca as he wrestled with fundraising options for his
photo-sharing app. Nearby, Twitter cofounder Evan Williams pondered the future
of social media. There’s the beach house from Beverly Hills, 90210 , past which
WordPress founder Matt Mullenweg and Sacca biked toward Redondo Beach. And
that’s the spot where Twitter CEO Dick Costolo and Sacca endured an early
morning workout. “Kevin Rose did half of it and told me I was crazy and he
wouldn’t come anymore,” Sacca says, mentioning, unprompted, the founder of Digg.
All these boastful highlights
have an underlying number: $1.2 billion, the amount of money that FORBES
estimates Sacca is now personally worth, up from pretty much nothing just nine
years ago. The young former Google employee suddenly finds himself in the same
financial league as veteran venture billionaires such as Jim Breyer, John Doerr
and Michael Moritz. And in terms of a hot streak he rates even higher. Sacca
has already had two ground-floor bonanzas: Twitter, in which his funds held
more at its IPO than any outside investor, and Uber, in which they hold 4% of a
company valued at $41 billion. And he’s sitting on investments in
billion-dollar startups Stripe, Lookout and WordPress parent Automattic.
“Chris has found every hot
startup in the Valley and found them all during angel rounds,” says Yahoo CEO
Marissa Mayer, who has invested in Sacca’s funds. “This is completely without
precedent or equivalent.” The 39-year-old ranks third on FORBES’ 14th annual
Midas List of tech’s 100 top investors.
Sacca didn’t study business or
engineering, doesn’t know how to program a computer, never started a company of
his own or worked at a big venture firm. What he does is buddy up with
well-chosen founders, console them when they’re down and cajole them when
they’re wary of big risks. “I don’t feel like I have a big institution to
protect,” says Sacca. “That’s made me faster than the big investors.”
But his track record is also
flecked with broken friendships and hard feelings. While he keeps a relatively
low media profile–this story marks the first time he’s cooperating for a major
story–his big mouth, incessant name-dropping and blunt elbows cause eyes to
roll. “He’s got a bit of a hero complex,” says a peer who knows him well. “He’s
an amazing investor, but that’s not enough–he has to do this heroic stuff.” At
Google he crashed every meeting he could and then wouldn’t shut up. Twitter
eventually had to pass a rule, driven in part by Sacca, barring nonemployees
from showing up at all-staff meetings. He and Uber CEO Travis Kalanick, once
close friends, now barely speak, despite Sacca’s major stake in the company.
“Chris is brutally honest about
everything,” says mentor Steve Anderson of Baseline Ventures, an Instagram
backer and No. 5 on the Midas List. “And he’s aware that he’s insecure.” But
don’t mistake insecurity for timidity. “I get close to people easily,” says
Sacca. “But do something to me, I will light that bridge on fire.”
As we’re talking on the
Manhattan Beach pier, Sacca’s iPhone buzzes. It’s a Twitter direct message from
Ben Rubin, CEO of Meerkat, a white-hot new app for live-streaming video. Sacca
is not going to invest in Meerkat but had been playing with it ahead of its
early challenge at the popular conference, South by Southwest. He rapidly types
back with a thumb and forefinger combination. “I told Ben that the festival is
the first big test, and if you keep the stream up, you win,” Sacca says,
thrusting the DM thread toward my face quickly, then back away. “You have to
offer value without expecting anything in return.” Such is how new bridges are
built, amid the smoldering embers of the old ones.
Sacca is busy building what
will be one of the premier houses in Manhattan Beach, a terraced
5,000-square-foot place powered by solar panels. It should be ready by August,
but until then, he, his wife, Crystal, and their two young daughters (a third
child is on the way) have been camping out at a nearby guesthouse.
Due at a board meeting, Sacca
bounds in, ripping off his beach T-shirt to get into his investor uniform.
Steve Jobs had his black turtleneck. Chris Sacca has his embroidered cowboy
shirt. He bought his first one, impulsively, at the Reno airport en route to a
speech, and the reaction prompted him to buy out half the store on his return.
He now owns almost 70, in various flavors, which he keeps near his front door
and in the trunk of his car in case of emergency. “Entrepreneurs get
disappointed when I show up without one of these,” he says, donning a black
shirt with silver stitching.
The Howdy Doody look is just
one more of Sacca’s incongruities. He’s only from the West if you define it as
western New York. He grew up in a suburb of Buffalo, the son of a college professor
and a lawyer. A top student, he wound up at his father’s alma mater,
Georgetown, and then Georgetown Law.
Sacca did not, however, make
for a natural lawyer. As an associate at Fenwick & West’s Silicon Valley
office he sat in on a meeting one day with John Doerr, the famed partner at
venture firm Kleiner Perkins Caufield & Byers. “It became obvious to me
that the investing side was where the action was.” Let go during the dot-com
bust, Sacca wound up cold-calling members of the FORBES Midas List for a job,
with no luck. Finally he landed at a startup, Speedera Networks, helping to
fend off continual lawsuits from its larger rival Akamai.
In November 2003 he jumped to
Google, where he got a job on the legal and business development team going
undercover to scout locations with low taxes–and cheap electricity–for Google’s
new data centers and then creating nondescript holding companies to buy up the
land.
Sacca started sponging up intel
in whatever senior executive meetings he could muscle into. Former Google
manager turned investor Hunter Walk remembers walking into a meeting with Larry
Page one day to update him on AdSense. Sacca, with no advertising role or
background, chimed in with advice. “Google then was a culture that rewarded
people who got things done,” says Susan Wojcicki, a longtime Google executive
who is now the CEO of YouTube. “He gravitated toward interesting projects and
the new important ideas, always trying to work on the next big thing.”
He sometimes put his foot in
his mouth. Sacca was on a fellowship at the University of Oxford when, speaking
publicly at a conference, he blamed wireless carriers for Google Maps not
appearing on U.K. phones, sparking a headline that embarrassed the Google
Android group. His boss, general counsel David Drummond, told him to start
prepping his résumé. Instead, Page reassigned Sacca to work on wireless
projects, including an ambitious but ultimately failed effort to bring free
Wi-Fi to San Francisco. “During one of our meetings Chris volunteered to drive
around the city and rubber-band routers to street lamps,” says Mayer, who got
to know Sacca at Google because of the project.
Sacca tried other projects as
well, such as head-faking a multibillion-dollar bid in a spectrum auction (a
ploy that succeeded in driving up the price for carriers), but hit a wall with
Eric Schmidt when his group pushed to acquire two satellite companies. Schmidt,
then the CEO, wanted Google to hoard cash and brace for a downturn. In December
2007, with most of his options vested, Sacca quit.
For the next 18 months Sacca
took his spectrum project and helped execute it on behalf of Philip Falcone’s
investment firm Harbinger Capital, netting several million dollars in fees for
himself. While he spent an increasing amount of time at a house in Truckee, a
town that sits atop Lake Tahoe, he decided to focus on angel investing in
Silicon Valley.
He’d done a bit of it at
Google, but it was somewhat rogue. One of Sacca’s Google friends had gone off
to launch a podcasting startup called Odeo. By 2006 the guy, Evan Williams, had
decided instead to start a new microblogging service called Twttr and asked
Sacca if he wanted in. Sacca wrote a check for $25,000 and started tweeting
madly, intrigued by the service’s revenue and data potential. Sacca even caused
one of the service’s first gaffes, when he privately messaged graphic details
of a fatal car accident he had witnessed in San Francisco and Twitter posted it
unintentionally on a public feed.
“He became an investor, an
advisor, a friend,” says Williams. “But the most helpful thing was that he’s
such an enthusiast. He made us believe in our own product more.” When early
celebrity adopter Shaquille O’Neal sent out a viral tweet or when a Twitter
handle appeared on a TV talk show, Williams and his core team would get a
one-word note from Sacca: “BIG.”
Through 2009 Sacca continued to
make savvy individual investments in companies like Kickstarter, Twilio and
Lookout, until he started running out of cash. He’d joined Google too late to
make tens of millions. Hans Swildens, an old contact from his Speedera days,
was running a firm called Industry Ventures in town. Swildens liked what he saw
in Sacca’s angel investments and suggested he raise a fund. Industry would sign
the first check for Lowercase Capital, joined by Google friends like Mayer and,
improbably, Schmidt. “It’s easy to forget now, but in 2009 or 2010 early-stage
stuff was still risky-feeling, and the market was still a big question mark,”
says investor Brad Feld, a mentor and eventual investor in the fund.
His bet on Instagram, started
by another ex-Googler, Kevin Systrom, would follow, but in late 2009 he scaled
up his investing to another level when he decided to deepen his position in
Twitter. “I wasted months trying to get others to believe it could be a real
business, not just a toy,” he says. “And I decided to just buy it all myself.”
Emulating his Google land-buying, he created four funds with generic names to
buy up privately held Twitter shares from former employees. He wasn’t the only
one. Ron Conway, a former mentor and the cofounder of SV Angel, began raising
tens of millions with much the same goal.
Sacca had been content to raise
a few million more, but a little-known friend with billions under management
named Suhail Rizvi convinced him to go big. The coup came when Ev Williams
approached Sacca to sell $400 million of his Twitter shares. Sacca then went
traveling in Southeast Asia, with a secret plot to propose to his girlfriend
(now wife) in the place where her parents had gotten married. That
accomplished, he rolled up his sleeves on the Williams deal.
Sacca secretly secured
commitments for up to $1 billion in 30 days from J.P. Morgan and municipal
endowments. He and Rizvi spent it over the next 18 months, buying out former
employees and other investors right up until the cap table closed in May 2013,
before the IPO. When the positions became known, other investors were ticked
off to see Sacca’s camp had accumulated the largest outside position in Twitter
right under their noses. “He was an innovator with that secondary, structuring
a number of vehicles that didn’t really exist like that before,” says Anderson
at Baseline. “He saw the chance before other people saw, so they asked: ‘How
did this no-name dude come up with all this capital?’ ”
The person who gave up the most
potential upside in raw dollars, Williams, sees no problem with what Sacca did.
“
In retrospect, if I had perfect knowledge I
wouldn’t have sold any stock then,” Williams says. “Some people didn’t like
what he was doing, but he did what anyone would.” The value of Sacca’s first
Twitter fund, Lowercase Industry, has soared about 1,500%. All told, his
various Twitter deals have returned $5 billion to investors.
Jamel Toppin for Forbes
Well before the Twitter
machination came to light, Sacca was cementing his reputation as a reliable
friend to startups post-financial-crisis. A group of San Francisco
entrepreneurs and investors would often soak for hours in Sacca’s hot tub at
the Truckee house, drinking and laughing and talking. The so-called Jam Tub had
its own check-in on Foursquare, and serial entrepreneur Travis Kalanick was its
unofficial mayor.
The Jam Tub was an annex to
Kalanick’s Jam Pad, his home in the Mission district of San Francisco, where a
rotating crew of techies would brainstorm, party and enjoy a home-cooked meal.
Sacca went at times, but Kalanick’s friend Garrett Camp, the founder of the
website discovery tool StumbleUpon, was a fixture. Camp, who sold StumbleUpon
to eBay for $75 million in 2007, had the idea to make an app so his friends
could book a black car to take them around town. He first called it UberCab.
Camp’s friend and early advisor, the author Tim Ferriss, remembers that the
idea seemed “ridiculous” to many outside the Jam Pad circle. “People who had
the opportunity to invest laughed it off as this one-percenter vanity service,”
Ferriss says. “Chris was not one of them. He had faith very early on.”
Kalanick became a mega-advisor
of sorts to the fledgling startup, and Sacca wanted a piece. The pair cemented
the startup’s angel $1.3 million financing at the Truckee house, with Sacca
ponying up $300,000, a large check for an $8 million fund. “I went all-in,” he
says. More than just money, he helped negotiate Kalanick’s compensation and
secure the Uber name from Universal Music Group. Lowercase would add another
$400,000 worth of Uber at the Series A round in early 2011, led by Benchmark Capital’s
Bill Gurley (see story, p. 78), and Sacca would make more side investments
later on.
Through a spokesperson,
Kalanick declined to comment, but conversations with those with knowledge of
the pair and the startup’s early days indicate that the Uber CEO got upset with
Sacca for trying to repeat his Twitter move of buying up secondary shares in
Uber from other initial investors. “Travis was 110% about the company, and with
Chris it became a ‘What about Chris?’ issue,” says one of these sources. Kalanick
told Sacca to stop coming to board meetings, which Sacca monitored as an
advisor. They barely speak today.
“What’s frustrating is I
honestly don’t know what’s wrong,” Sacca says. “I’ve apologized multiple
times.” When pushed, he concedes that his efforts to buy shares might have
created a rift. Kalanick kept telling him it was impractical to do, Sacca says,
yet Sacca kept coming up with workarounds. “I guess I wasn’t hearing what he
was really saying, which was ‘Don’t f–king do it.’ ”
If shunned by management, Sacca
remains loyal to the product: Back in Manhattan Beach Sacca orders an Uber to
take him, cowboy shirt and all, to the board meeting.
En route a famous founder asks
him to tweet in support of a new hire. Sacca gobbles up every one of the ensuing
Twitter mentions before we arrive at a small, poorly ventilated office building
in Santa Monica. This, he says, is the home of his next big score.
Sacca met InVenture CEO Shivani
Siroya at a TED dinner when he spotted Siroya sitting by herself on the fringe.
Hours later he was sold on the former financial consultant and UN analyst’s
vision for a new way to score credit in the developing world. “
Once I determined she wasn’t allergic to money, it
was a no-brainer,” Sacca says. Sacca greets Ted Rheingold, the COO he helped
match with Siroya, and the other staff like old friends as each discusses the
group’s progress.
Six months ago these meetings
were depressing. In Venture’s business wasn’t working in India, and since it
didn’t handle the loans itself, the payback wasn’t there. Now it’s growing
rapidly in Kenya, and the team shows Sacca detailed breakdowns of how Kenyans’
spending varies in different neighborhoods and what they take loans for and
why. Their repayment rates, Siroya tells him, are higher than those for loans
in the U.S. “How much more fun is this?” he asks one manager whose last project
was shuttered. Sacca then leans forward and looks across the table right at his
founder, waiting for eye contact. “You’ve got more data on users even than Travis,”
he says. “This is freaking big. It’s time to move from the dreamy hypothesis
phase to wanting to fan the flames.”
Friends wonder out loud,
though, how much more fire Sacca has for the kind of startup discovery and
coaching that has defined his rise–especially when success seems twinned with
friction. Sacca now oversees a few billion dollars in more than a dozen funds,
with cowboy names like Stampede, Frontier and Spur. But he’s going to far fewer
meetings, preferring to spend time at the beach and a new house in Montana.
Rivals feed this narrative, whispering that he’s dialing back. Sacca is not
denying it. Two years ago he brought in his first partner, Matt Mazzeo, a
rising CAA agent, who is taking on more of the seed investing for Lowercase’s
funds. Says Mazzeo: “I don’t think Chris is one of those guys who makes a ton
of money and drops the mic and leaves the room. He loves the people in the
room so much that he’ll stay.”
“He’s young,” adds Sacca’s
close friend actor Edward Norton, who has cofounded startup CrowdRise, “and I
could imagine the appeal of not wanting to manage other people’s money
forever.” If Sacca wants to amp it up, given his base in L.A., his outsize
personality and his signature look, there’s surely a future for him in show biz,
extolling and beating up entrepreneurs in the vein of a Cuban or Trump. Sacca
smiles at the thought: “Being quiet is not a natural state for me.”
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