Wes Melton

Thoughts about Business, Life, Family, & Stuff

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Bayesian Mult-Armed Bandit

Here is my PHP implementation of the Bayesian Bandit algorithm originally developed by Chris Stucchio. Read more

Success is not hassle averse

Chipotle or In-N-Out Burger?

In-N-Out had a huge line while Chipotle had virtually no one in it. I enjoy both, but we don’t have In-N-Outs back home. We don’t have In-N-Outs within a 4 our flight of home actually, so I had a decision to make.

Was I going to go through the hassle of standing in line and fighting the crowds to get an indulgence I can’t get at home or go with something that will be painlessly easy that I can get within a 10 minute drive from my house back home?

I went with the hassle.

While we could definitely make the argument that greasy (delicious!), tasty, tasty meat and fries is definitely not being successful diet wise, when we think about success on the whole, there is definitely a lesson here that’s worth a brief pause.

Success does not avoid hassle. Success embraces it.

Every day when I’m in the office, there are opportunities that constantly present themselves to me to stop what I’m doing and invest in our staff, or provide that extra level of customer service that’s special, or write a customer an email just to touch base and see how things are going, etc. and so on.

Of course it’s easy in the moment of stress or being tired or busy to write off the hassle – to make the erroneous conclusion that if we don’t go through the hassle our business will be fine – success will still be waiting for us.

Unfortunately – the truth is very much different. Sure on the micro-scale, a couple of missed moments here and there likely won’t tank the ship, but a stature of avoiding hassle will result in a long history of missed opportunities that required some hassle along the way that I believe will most definitely add up to a sum of failure that you can’t undo.

This doesn’t apply to just business – this applies to every area of life: Family, Health, Spirituality, Financial Success, you name it.

If you live your life trying to avoid the hassle and pick the path of least resistance constantly, you will inevitably find yourself looking back at a history that collaboratively paints a grand picture of failure.

Leaders embrace hassle because they see the reward that comes from embracing the challenges of the moment. It’s not ideal and it’s never natural – it’s always a choice – the best things in life are never free and they always cost you something. But, you almost always get something better in return than you would have otherwise.

Tonight my reward is tasty, tasty In-N-Out burgers. What will your reward be?

Are you driven, or just naïve?

Presently I can see Twitter headquarters across the street from the AirBnB condo I rented for the week here in San Fran. On the roof top they’ve got a really cool patio area setup for employees to break free and also apparently play “Cornhole” and kick back in some cool outdoor seating. I sure hope they turn it around.

Walking around downtown I’ve been overwhelmed at the plethora of new and exciting startups that you’ve probably never even heard of. Few of them have likely barely closed Series A funding, and fewer still will get over the hump before the clawback terms kick in, their funding gets sucked back, and they inevitably fade in to the background as another failed startup.

So it made me think about our current venture and the mini emotional seasons I’ve been through already on our journey.

By 25 I had already secured a 6-figure salary and was being promoted rapidly. By all American Standards, I “made it” early. But corporate America is a great place for people with drive to take their ideas and passion to die – after 6 years, I knew I was built for something more. Something that required a little more drive. A little more ingenuity. Something with a little more risk, and hopefully a lot more reward. So I left.

When we started our brand, being driven was easy though. It was new and exciting. Failure wasn’t even a conceivable plausibility in my mind – working 80-100 hour work weeks for months to get it up off the ground wasn’t even a big deal – we were probably going to get acquired before we even launched, if you had asked me back then.

Boy was I naïve.

3 years in and on an exponential growth path, we have been very successful. We’re the fastest growing company in our region by a long shot – we’re proud of that and thankful to be where we are.

Still though – there are days where I would kill to be that naïve again just so it’d be easier to show up and keep grinding it out.

That’s the problem with experience. Once you have it, you can’t lose it and you can’t neglect it when you evaluate next steps in your plan (unless you’re an idiot).

Now more than ever we’re grappling with the reality of the challenges that lay ahead of us on our growth journey. There’s no more warm fuzzies, no more raw excitement to carry you through the long nights and weekends – just unbridled reality: there is a ton of thankless work ahead with very little tangible payoff to be had for a long time.

Now is when we’re faced with the daunting reality: Are we really driven, or just naïve? Being naïve is easier, but being driven is better.

When you’re naïve, it’s easy to be excited, easy to push, easy to think it’s all going to work out. Statistically speaking though, your business will fall in to the 80% that crash and burn or the 95% that fail in the first 5 years.

It’s costly to be naïve.

When you’re driven, you know it likely will not work out. You know there are a ton of unforeseen challenges ahead. You know you may fall flat on your face.  You know that there are likely a million things you don’t know. You’re excited but somber. Motivated but realistic. You know every decision counts and that failure is lurking.

Most importantly – you’re honest. You’re honest with yourself that hard work doesn’t always pay off. That failure isoption likelihood. You’re not foolish enough to think that running a business is actually about something grander than putting more dollars in your bank account then went out today (and by a decent margin at that).  You know how businesses in your space are typically valued, and you’re not putting fanciful ideas in your head that your business will somehow be valued differently just because it’s yours and you feel great about how awesome it is.

Yet despite all of that – you keep showing up. You keep hustling. You keep pushing and driving to hopefully make it passed that next bend in the road, no, matter, what. The driven folks know that hardship lays ahead and they embrace it. That’s why they’ll ultimately succeed in life – they thrive on overcoming challenges.

One thing I’ve observed that I believe to be true is this: There are dreamers and there are doers. Both categories can and do fail in business. The difference is that it’s easier for the doers to get back up and start hustling again because they knew all along they were just outrunning the likelihood of failure.

So which are you? Are you driven, or just naïve to the fact that your business isn’t that great, your idea isn’t that original, and more than likely, you’ll fail and your business will fade in to the background?

Sorry to rip the band-aid off, but it’s true. The sooner you start sobering up, the sooner you can start focusing on addressing the real issues your business is facing, and start laying the true ground-work to sustainability for your growth and business for years to come.

The “made it” syndrome

It seems to be a recurring theme for my thoughts recently: Failure is an option. Failure is an option. Failure IS an option.

A huge direct competitor of ours closed it’s doors over night two weeks ago. About 5 times our size, they were open on Thursday and closed on Friday. Stunned is how we felt when we talked about what might have ultimately lead to their demise. What underpinned our entire discussion was the reality that none of us are ever immune from the ship going under no matter how high we’ve climbed or how far we’ve raced.

In 2008, Jim Keyes, then CEO of soon to be doomed national brand Blockbuster, was quoted in an interview as saying, “Neither RedBox nor Netflix are even on the radar screen in terms of competition,” he said. “It’s more Wal-Mart and Apple.”

5 Years later, 1000 locations were closed, and Blockbuster was history.

While I wasn’t close to that deal and do not know Jim Keyes, an outsiders perspective could say that it seems Jim may have fallen in to the lurking quagmire that is the “made it” syndrome.

As any business owner will understand, when you’ve worked, and slaved, and fought to grow a business from nothing to something – from a place where every day you’re hoping something doesn’t happen that closes you down to a place where you know that even if you lost 20% of sales you’d still have the doors open – it can be painfully easy to fall in to deception that you’ve “made it”.

You’ve “made it” – you’re there! You’re successful! Nothing can take you down now! You’ve got a rockstar brand, people love your product, you’ve got solid processes in place, reliable income, employees, a leg up on your competitors – you can breath easier.

Well here’s the giant slap in the face (and what we preach to ourselves constantly): You’ve never made it.

I don’t care if you are doing a million in sales or 100 billion in sales – capsizing and bringing the whole ship to the ocean floor is still an option on the table.

The proof is littered through history. Consider Apple who almost went under before Jobs came back and righted the ship. Consider Circuit City – a once national main stay for electronics, now a sore spot for DirecTV’s investors. Or consider Polaroid – how does a company who was the industry leader in innovation for the photographer industry close it’s doors because the photography industry changed and left them in the dust?

Humbly I submit they fell in to the “made it” syndrome (among other errors of course). Somewhere along the way, in the midst of the expansions, huge increases in sells, executive retreats and media applause, the team at the helm lost it.

They got comfortable.

What happened after they got comfortable? They got on the defensive. They started focusing on preserving instead of ever-evolving, growing, changing, improving.

They stopped taking risks – stopped looking at the bigger picture – being hungry/driven to be the one at the leading edge of innovation and growth. How else would the leader in photography equipment go from photo-stud to closing for good?

So what’s the point? What’s the moral?

Stay hungry or accept inevitable failure. Don’t fall in to the “made it” syndrome.

Don’t make it. Keep making it. Every. Single. Day.

The ROI Of Your Mom

So I found myself sitting at a totally hip breakfast spot in New Orleans with some new friends this past week enjoying some authentic cajun breakfast (shrimp in the morning anybody?).

Over breakfast we were all talking about various aspects of each others business, and challenges we each uniquely needed to overcome.

During the conversation, the topic of getting clients to buy in on spend for non-tangible ROI came up. Almost immediately my buddy Matt spoke up and said, “Well you just have to ask them what the ROI of their mom is.”

We all kind of laughed and thought that he was joking.

He wasn’t.

As the story went on, he shared an incredible anecdote that went something like this:

“A social media consultant that Matt knew was sitting at the table meeting with corporate executives attempting to sell them on the value of investing in Social Media Marketing. The all-too-capable CEO kept pushing back on him demanding an understanding of how to measure ROI on the spend. The consultant kept trying to give him solid answers to help the CEO understand it’s value even though true ROI would be a hard figure to get to.

Try as he might, the CEO kept refusing to entertain the idea. Exasperated the consultant finally spoke up, interrupting the CEO and said, “What is the ROI of your mom?!”.

The CEO was stunned. “Is this guy being serious right now?”, he thought, fuming hot.

Much to the rooms surprise the consultant asked them again, this time slower, “Seriously everyone. What is.. the ROI… of YOUR mom?”

Speechless and still not sure where this was going, he had the rooms attention and was clearly running out of time to explain.

He continues, “When you were a kid and had a really bad hair cut and your mom told you how handsome you were. Or when you got the flu and she brought you soup and kissed you on the forehead. Or when you lost the soccer game and your mom would still take you out for ice cream after the game. What’s the ROI on all of that? What is your moms ROI? There is no tangible number to any of that but can we all safely agree that it played a massive role in who you are today and how successful you are? Of course we can.”

The room was stunned and impressed.

So when you think of our own businesses, are there areas you’re afraid to spend because tracking ROI is difficult or impossible to do? As our business is growing and we’re learning about effective marketing and sales initiatives, we’re finding these fluid-ROI endeavors are becoming more (not less) critical to our long term success.

Take Moz for example. As co-founder, Rand Fishkin has discussed openly, Moz allocates 20% of it’s annual budget to activities that have no direct ROI attached to them. Why would a super successful brand spend 20% of a multimillion dollar budget with no responsibility for how it helps the bottom line? Because typically, when visionaries and employees are empowered to just “do something great” without concern for the bottom line – they typically wind up doing something great for the brand that pays massive dividends later on.

Is it a risk? Sort of. But as entrepreneurs we love taking risks and understand that risk-taking is a huge part of our own success.

So my advice? Stop tracking every penny spent and every penny earned and start focusing on the bigger picture. What’s the ROI of YOUR mom and how can you provide value to your customers intrinsically without knowing the return of every investment. Figure that out and you’ll start rising as a go-to brand whose customers naturally feel drawn toward, which in turn could result in increasing the over-all efficiency of every dollar spent on marketing.

Ironic: Stop sweating over ROI to focus on helping the customer and see ROI increase. Amazing!

You have to spend it before you have it so you can have it

The ole’ adage is true – you have to spend money to make money.

For us at my company this has continually looked like discussions where one of us will say, “We have to spend on X”, and the other says, “I don’t think we have the money to do that”, and then the other will respond, “I don’t think we can afford not too.”

And that’s how it goes in business. Especially in the early years, calculated risks on an on-going basis are your lifeline. You’ll never have the money to grow like you want too, or need too. To beat the growth curve, you have to spend even when you don’t have it on activities that are going to result in immediate growth in sales and expanded user base.

It’s illogical. It’s terrifying. How do I make a decision that could literally sink this ship we’ve been struggling, striving, fighting to build day after day for years now? How can I know that the right decision is to do something we can’t afford to do in hopes it will pay off? You can’t. You can only hope that you’re right, and take the risk.

For us, it’s paid off. Every time, by the grace of God, we have made it through, even when we think the next decision could flip us over and fill our bow with water. We’ve continued to grow, expand, and make it one more step forward.

But it’s all about risk and reward. The more risk, the more reward – or piling heaps of life sucking dung. But that’s life. Paralyzing fear isn’t doing you any good. So spend those dollars!

Don’t sit still. You can’t stop moving, stop growing.

If your business isn’t growing, it’s dying. So don’t think you’re preserving your business by guarding every single dollar. You’re not. You’re probably killing it anyway if preservation and not growth are your objective.

Most people say that anything in business is possible if you have enough money. But money shouldn’t be the reason you can’t make your next business objective. Think about what you need to do strategy wise to grow. Take money out of the equation. Just think about what you need to do, put a plan together, and then do it and trust that it will pay for itself.

Again, it’s illogical. Having been through it over and over again now, it still seems ridiculous – but it’s been true for us time and time again: You have to spend it before you have it so you can have it.

Take your own risks. Run, don’t walk. Take notes along the way.

 

Money is not your personal success metric

It was 10pm on a cold January night. My business partner was out of town, and I was the lone man on the ground out here running our operation. Due to a series of terrible, terrible mechanical failures at one of the properties we manage, I found myself in a bathroom, with gloves, a mask, and a dust pan scooping up human waste from the bathroom floor.

Apparently, as luck would have it, when a guest had drained a tub upstairs, about 30-40 gallons of water surged down to the bottom floor, and then proceeded to back-flow out of the septic system out of the toilet and the bath tub, and filled the tub and covered the floor with a nice thick layer of the most disgustingly terrible thing I’ve ever had to deal with.

My partner felt like crap. 8 hours away, and all he could do was make calls and try to find someone who could get out to the property and help me fix it. He kept apologizing that he wasn’t there and kept encouraging me that I was going to get through it. He felt so helpless. He was a lot more help than he thought.

It was while I was dealing with this mess (ugh), that I found myself pretty distraught. Frustrated. Gagging in my mask repeatedly. Trying to figure out how someone who had just wrapped up a whirlwind year, breaking 7-figures in sales our first year, was now on the bottom floor of a property literally dealing with someone else’s crap.

But this was a pivotal moment for me. I thank the Lord for it honestly.

I realized, while I was brushing all sorts of semi-disposed waste particles from the base boards with a toothbrush, that money is not a personal success metric. Money – dollars – are a business success metric. Breaking 7 figures our first year in business was amazing, but it was completely irrelevant to my life, my joy, my personal feeling of success that night. Honestly, most days it makes little difference to how happy I feel.

Obviously, our contributions to a business directly influence the financial success of the business, but it’s all too easy to confuse the success of the business with your personal success and satisfaction. I definitely feel a sense of accomplishment some days when things are going well, we’re having a strong month, landing another deal, etc. All of it is Grace, and we’re thankful for it, but it has been invaluable to me to realize that the numbers on a P&L are a much greater indicator of  the fact that I have a job tomorrow that is able to fund us doing something we’re passionate about, than it is of how successful I am as a person.

Getting the two confused(personal and business success) are the reason I see a lot of folks get their personal priorities all screwed up – they’re just so convinced if they can get that business to just make another dollar, or cross a financial line, then they’ll finally be happy.

That’s a dirty lie.

How much the business is making plays very little in to how I feel on any given day. It doesn’t make me any happier when I have to go scoop up some poop, then when I get to close another sale.

That’s why you have to find what you love to do. Work hard at it. Be an honest person. Be passionate every day. Get up, fight for it. Strive for it. Learn as much as you can. Keep showing up. Take the risks. Give it 100% even when you’re tired and burnt out.

The dollars don’t ultimately matter to your feeling of personal satisfaction. If they do – your priorities are broken. Get that through your head, and you’ll be set up for a lot more success that will matter a lot more through your life then how much your business made in the previous year.

Sometimes, not rolling the dice is your biggest gamble

If you’re early on in your first business venture, here is something you really need to know: Anyone who tells you that you should always know the right decision to make when you’re at a crossroads is a liar. Furthermore, anyone who thinks they’ll know all the decisions to make is an idiot. Read more

Stop whining. Get to hustling.

My first year in business was absolutely exhausting. When we started our venture, I was working my 8-5 job in corporate america, coming home for a quick dinner with the wife and kids, and then off to my business parters home office to work from 7-10 (sometimes later). Every day of the week we did this, and it sucked.  A lot. Read more

Love your business enough to kill it yourself, or someone else will.

The number one mistake I see a lot of people make when running their business is falling so deeply in love with the idea of their business – their dream and vision – that they fall in to a paralyzing fear of making any decision that could destroy or jeopardize what’s been built.

After years of passionately striving, fighting, and growing something from nothing, they get to a place where they’ve “made it”. They can finally afford to run the business and pay themselves too. They’re not stressing over every little decision. The business isn’t at risk because a customer leaves you today. You did it. You created something out of nothing.

But then what? Are we naive enough to think that the market place is going to just stay static in our paralyzed dream state with us for the next 50 years until we get ready to hang up the towel and ease in to retirement?

If we are – we’re really, really stupid. Read more

© 2016 Wes Melton. All rights reserved.