Real Estate: They’re not making any more of it

Over the past several months, I’ve heard the same response from many friends after I share my thoughts on the world and things that need fixing: “A lot of what you’re into is Real Estate”

Its true. Over the last couple of years, my natural interests have gotten me involved in several projects, all of which have something to do with how people live in homes, how homes get made, and what a home really is made of.

Plus, as an investor, there are a ton of interesting things about the real estate game that appeal to me. Building a house is as visceral experience of creation as any other creative act. It has all the fun of planning and management of software, but as a house is coming up, it is literally and really coming up in front of you. Empty or wild land is terraformed and tamed into something that was just a drawing a few months before. Unlike stocks, bonds, or angel investments, property is relatively simple to understand, and evolves over multi-year cycles instead of with a daily ticker. You can touch and feel it. You can even walk around inside it! Most people spend the majority of their lives in it! As a product, it might be even more intimate than foods and apparel, which some might know are other past interest areas of mine.

So to start: a chart

The message really jumps out at you. Excepting a big chunk of spend that goes to transportation, 46% or nearly half of a typical american family’s income goes to shelter & taxes. Half our capital given just to living and dying. There’s something tragic about that.

There are enough games people play with their taxes, and the general transportation problem for the majority of scenarios has been basically solved by Uber.  But housing? There’s an interesting domain to do some digging.

As you would expect from an insight pulled from the census, there’s more beneath the surface. While the average American spends 15% of their money on just the roof above their heads, and just a little less on the expenses around the home, the picture is much more stark for those in the bottom third of income and renting. A study from Pew finds that lower third income renters spend nearly half their money on rent.



What if the structure of our society and the structure of inequality are also actually related to the structures?

It is impossible for me to believe that the advances that we’ve made as a people and as a country over the past 100 years cannot be put toward empowering and transforming housing as well as we’ve done so in other industries and create a better world that is also better for many more people.

In the coming weeks and months, I’ll plan to use this space as an area to think aloud, partially to see how I like it, and partially to see if anyone else does as well.

Returns vs Safety: How much leverage is correct?


As a businessmen, an entrepreneur, an investor, the allocation or effort/capital is a common one. Should you put the next $1 into Activity A or Activity B? It can only go to one of those places.

As you grow your business, should you buy that new truck or lease it? Buy that new machine or rent it? If you’re thinking through the acquisition of a company or a piece of property, is it better to take it down with cash or with leverage?

In a theoretically perfect world, where nothing ever goes wrong, and we never make the wrong decision, its a no brainer – you should use leverage every time, and as much of it as you can get. But in the world we live in, where sales don’t always increase month-over-month, where surprise new expenses can come up, and basically anything can go wrong from speeding ticket to full-on Hurricane Sandy, it helps to have a little margin of safety.

Screen Shot 2014-10-04 at 5.15.47 PM

The above is a chart from an investment I was researching earlier this year. I knew I could get a 6% interest loan on it (or better), and was trying to figure out what the optimal amount of leverage was. Of course, as you increase leverage, you exponentially increase the potential returns on equity. However, you also cover the interest payment fewer and fewer times.

As with so many things, the right answer here depends a little on how comfortable you are with risk, and how lucky you’re feeling. If you’ve got the interest covered 2x, and we’re talking about a rental property, that means you could have 50% vacancy and still do just fine. But if you are only just barely making the interest payment, any less than 100% vacancy will bankrupt you.

The same math applies to a garmento buying a factory, or to a huge corporation thinking about leveraging the buyout of another company.

Warren Buffet suggests in many of his annual letters that he’s uncomfortable if he sees any less than 2X interest coverage, and many of his companies have much more than that. But with more liquid investments (sometimes including real estate) 2X could be a lot if you have a conservative estimate of what the equity is worth.

What do you think? I’d be very interested to know how fellow business owners and investors consider their risk & reward.

Breaking bad: Top 3 terrible email habits


If you asked digital executives today what was the one activity that they credited with a majority of their day-to-day commercial success, 90% would tell you ’email’ without missing a beat.

But if asked most of these guys whether they were happy with their email, whether they thought it was a real center of excellence for them, you might start getting some mumblings: “Our customers keep unsubscribing, our conversion rates are going down, I’m not really sure if we’re doing the best we can.”

Email is the lifeblood of customer communications today, and the majority of digital groups that I’ve seen are suffering from a cancer of email. A slow degrade away from quality communications, away from excellence in marketing, and away from their fans. Cancer. And if there’s anything we’ve learned about the cure for cancer from TV, its that you have to Break Bad. (Was that too much of a stretch?)

So next time you hear a digital exec offer you the excuses below, or the next time you hear yourself saying them – think about how you can break away from these, or more simply, what Walter White would do.

Excuse #3: “We have to tell them everything” 

Pour acid on the desk. I hear some variant of this whenever I find myself criticizing an email campaign that is full of text – 500 words of dense gibberish. Remember the last time you got one of these? Probably not, you marked these companies as spam a long time ago.

The goal of the email is not to tell the entire story, nor is it to close the sale. It’s about sharing a glimpse into life at your company, a peek at a cool product, a hint of a story. The email is an invitation to join the conversation, to learn more, to belong. How can you get that subtlety across if all you’re saying is BUYMYPRODUCT BUYMYPRODUCT BUYMYPRODUCT ?

Excuse #2: “We understand the customer, we don’t need to see data”

Set something on fire. What this digital exec really said is that they are so terrified of reality, they are clutching to their hopes (read: Hope is not a marketing plan) and probably to their job. Whenever I hear this, I know its time to start sending the resumes of actually competent people to this guy’s boss.

Excuse #1: “This is how we’ve always done it”

Throw a chair through a window. This is what you’ve always done, and you continue to get mediocre results. Keeping the same tactics is going to keep those mediocre results, or worse.

“The definition of insanity is doing the same thing over and over and expecting different results.” – misquote of Einstein

If what you are doing is failing, try something, anything, different. It just might surprise you.

Sales Yield: How to not waste money growing a business


If you ask a digital business owner today what their job is, I bet you’d get pretty strong alignment:

“My job is to grow revenue – 10%, 50%, 100% over last year” – Every digital business owner, everywhere

But if you ask the next level question, you’d likely get a lot of disagreement, confusion, and if you have more than one of these guys in a room, an 8% chance of fistfight.

The common threads of Ecom VPs, Digital strategists, CMOs and other titles that business owners take on are instead: confusion, misinformation, and wasted opportunity.

Some folks will tell you that the right answer is to give all of your money to Google, others will tell you that they have a preferred high-cost consultant, and others might say that spamming their shrinking email database is the way to go.

The right answer, as it is with so many things is – it depends.

For products and services that are either super pain-point driven, or extremely timely, it may not at all be a bad idea to put some money into search. For products that are interesting, and at an impulse price point, channel partnerships make a ton of sense. For commodity items that are selling on known terms, it might make sense to have another dimension of value, like a well-known affiliate, help to peddle the goods.

But no matter what, no one should go into such a mission with unflinching preconceptions of the right answer. The marketing budget should be split by month and by channel – and then measured rigorously for conversion optimization.  So if at the start of this program you don’t know what the hell you’re doing (this is not an insult: the first step is admitting the existence of an issue), and if you have a theoretical $1,000 for the month, put $333 into search, email, and affiliate and track the results. This may involve discount codes, or it could involve cookie tracking – whatever your level of savvy is. The next month, maybe you do the same split but for display ads, sponsored posts, and radio (don’t laugh, I know some brands that make an absolute killing on remnant radio).

Over time, you should have a reliable list of different marketing methodologies, conversion rates by cohort, and a real shot at calculating yield: dollars produced per dollar spent.

Acquisition cost and LTV get all the headlines, but for all their pomp, they remain really challenging metrics to get right. You could run a dozen campaigns and get a different CaC for each one, and run three different styles of calculation for three different LTVs per.

Yield, however, is yield. Keep doing high yield activities, and eventually you will dance past your competitors.

Hope is not a marketing plan


“Build it and they will come”

We’ve all heard that before. Many product-focused people in industries as far apart as CPG, apparel, and software will tell you that all you need to do is put out a better product, a better service, a better story — and customers will come and find you. Through intuition, through magic, or just through the grapevines, people will sell themselves. Somehow.

“Build a better mousetrap, and the world will beat a path to your door” –misquote of Emerson

This whole backwards way of thinking can be best paraphrased as: If I just sit here quietly, tooling away at my desk, and just hope really hard, I’ll succeed.

HOPE is not a marketing plan. At best it is misplaced sentiment, and at worst, its a spin of the die. Its a gamble that luck will carry you, or a complacent excuse to fall back on when the inevitable failure appears.

The best executed businesses do not run on hope. They run on discipline, structure, and raw hustle. Even the companies known for being the best, and with a reputation for being the best for decades don’t sit on their laurels. Fedex has thousands of salespeople, even though they are practically a verb. Apple, in Jobs’ time, and even today, meticulously plans and coordinates press, retail, wholesale and partner activity. Even apparent exceptions like Google and Facebook are lobbying like crazy behind the scenes for advertiser dollars. They will work super hard to close deals and then super hard to paint the veneer of effortless success.

Are you or your team out there pulling harder than your competitors? Or are you just hoping to win?

Product as the Hero. Let them fall in love with it.

GG LegoBatman2

There’s a narrative that’s happening on your site whether you’re writing it or not. The only question is: who’s your protagonist?

In a well told story, the audience cheers for the protagonist. Is that your brand? Company founder/face? Something else entirely? Some sites are so poorly organized that people get bored and get out.

Some, on the other hand, are awesome.

Hard Graft:

I love these guys. Even from the landing page (as previously featured here), these guys are clearly all about product. They live and breathe product. And after getting you from the landing page to the product detail page, they take it to the next level.

hard graft Product 1

Crisp, uncluttered page. Its all product, a review from a dude with a Managing Director title. The leather looks so crisp you can practically taste it.

But then, if you click on the product: it takes over the entire screen.

hard graft Product 2

Full page shots. Multiple of them. Product in action, product on a desk. Product in use, product not in use. All with super-clean, focused photography. I don’t even need an ipad/laptop case, but i’ve got so much depth and detail on this thing, I can’t help but want it.

Now, is it crazy to suggest that you put product pictures on your site? Of course not. The crazy observation is that sites with focus on the product, rather than lists of features, expounding copy, and other extraneous picture are better at creating an emotional link between you and your customer.

Take a hard look at your product page. Do you have tiny pictures? Do you have paragraphs and paragraphs of text and bullets that no one cares about? Do you do that weird zooming thing where a magnifying glass follows the mouse pointer? (you know who you are.)

Get back to the basics, clean it up, and let your product be your hero.



Telling stories: There’s a reason we love your brand

Old Book 2

The landing page. Its the start of a narrative, the beginning of a relationship, and if you’re good — the opening of a great story.

Sometimes, the product is the hero. Sometimes, its something else entirely. However, the common thread is that the great sites start showing you the road to walk down, paved with yellow bricks and all.

In the first example above, we’re looking at The North Face:

Landing rotation The North Face

The story is clear, and comes at us from all directions. The North Face isn’t just slinging product — they are collaborating with top athletes from multiple disciplines to bring us awesome stuff. Cool photography and immediately believable.

It’s about adventure, adrenaline, and athleticism — in some out-of-the way spots all around the world.

The second example above is from the Yoox site over the holidays. landing color voice

Here, the story is a little different. It’s colorful and fun. Its evocative of the holidays, and the heartfelt silliness that comes from hanging out with our loved ones. Its playful, hints at presents (and who doesn’t love presents) and extremely interactive. Each color had a different scene with relevant product and a similar spirit.

Indeed, you can click right on the scenes to start getting lost in the store.

Finally, one of my favorite storytellers: J.Crew.

J.Crew Landing 1


Sure, the landing page shows you product, and good landing pages do that. But it does more — it starts telling you about the reason you came there. Were you looking for a cashmere sweater => come right this way.

No? That’s okay, maybe you came looking for a suit.

J.Crew Landing 2

You’re thinking about fabric, and the clothes, and before you know it, you imagine the places you’ll go, and the things you’ll see in the sharp new threads that you could have in a few clicks.

Ultimately, it doesn’t matter whether the shopper was looking for cashmere or a suit. The juices are flowing, the pictures are inviting, and the story of what might happen has begun.


Deep Dive: Greats Sneaker Site Walkthrough

Greats Landing 1

The Greats footwear site is effortlessly executing on so many best practices, I just had to pull the whole thing apart here. I was geeking out the entire time, and very nearly ordered all of their product in my exuberance. From landing to checkout, they’ve nailed details that even savvy ecom professionals might miss or screw up. Greats team, my hat’s (and shoes) off to you.

Landing Page: Lets just count up the things these guys are already crushing

  • Full-frame imagery
  • Well-executed product photography
  • Easy to understand product
  • Streamline path to the next step

Greats Landing 2

Putting your mouse anywhere on the screen brings up the name of the product, and its price, it begs for a click — which of course, is the point.

Greats Product 1

Product Page: This, too, has a ton of textbook and innovative wins on it.

  • Interactive product – the thing you think is just the product image, is a 3D rotating feature
  • Construction – They show the simplicity and detail of the product, and even manage to show it de-constructed, so you an see all the components of the show.
  • Not 1, but 5 different images of the product on-model
  • Crisp call to action
  • Other product (just in case)
3D Shoes
3D Scrolling on the shoes
The peices
Construction / De-construction


Which of course, takes us to checkout. they keep it clean and simple, without any extra needless steps on the way out.

Greats Checkout 1


All in all, a masters class in how to get this done. Any retailer without a massive amount of product needs to copy everything these guys do.

Greats team – I don’t know you, but I wish I did. Kudos.


High-value Contact Acquisition at Marine Layer

Marine Layer Contact Collection


Marine Layer is a fun brand that found a humorous way to collect contact information from their shoppers, inject a bit of humor, and showcase one of their key selling points all at the same time.

Clothing is tough on the web because you can’t touch the fabric. These guys offer you to ‘cop-a-feel’ of said fabric, but of course, they need your contact info and address in order to do so.

Anyone looking to  boost their email and has something relevant to give away– take note here.

Innovative Parallax scroll on Krystal Rae

Krystal Rae Landing 1

The Krystal Rae site is a gorgeous site to start with, and does a great job of using interesting visuals right off the bat. However, what caught my eye was that while casually scrolling down the page, a picture that I thought was just a normal model/merchandised shot, was actually the entry point to a really cool experience.

Krystal Rae Landing 2

As you scroll, the model changes outfits. And as a result, They actually showed off a ton of their product without needing me to click into the shopping section.

Krystal Rae Landing 3


Very cool, and definitely a best practice for anyone with an interesting, model-driven merchandising strategy that wants to play with the ever-trendy parallax feature on the web.

Krystal Rae Landing 4