Geek Philanthropy, the Netflix of Podcasting, and Cliff Oxford on Membership Models

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CLIFF’S TAKE  

The owner of several Morton’s Steakhouses out of Houston asked if we could help develop a “hybrid” membership model for its business. The company has been retreating and rebuilding its brand over the last decade to regain market edge. If hybrid were a human, we would not be friends. I’ve never met one I liked, but I was intrigued so I showed up ready to go. The first membership plan offered freebies like upfront valet parking, a glass of wine and monthly mingles. After listening for a couple of hours, I shared what I’ve learned:

Conversation – Talk to your members daily. A conversation is different from contacting them or sending them something that really benefits you. Morning Report members often told me that even though they hadn’t seen me in six weeks, they felt like they talked to me every day. After a conversation, members should think, “You get me and live in my world.”

Connect – When we connected members, they did business with each other. For us, the bottom line was that memberships had to make money for members. “Networking” was a dirty wordwho has time for that? We did the matching for them. Revenue and romance were realities but not said out loud. What members want and what they tell you are often two different things.

Content – You often hear that content is king. No. Content is more like a fish market – it needs to be fresh and big every day or don’t send it. Members wanted information to improve their business that day, not philosophy for tomorrow.

Care – You need a ridiculously responsive 24/7 support model to show you care. We did not send out birthday cards, but we did take calls at 9:30 pm on a Friday night. I can’t tell you how many movies I’ve walked out of to answer a quick question and frankly members loved it and gave back more.

Here’s the big secret of the membership model: When members felt we Cared, they were quick to forgive us if we fell short on the other three C’s: Conversation, Content and Connect. But here is the best thing we did—we started in April 2008, long before membership became a flavor-of-the-month business model. Of course, focusing 100 percent on being the best in class at what you dolike making the best steak in the worldwill always be the most important thing.

MANAGEMENT

“Whaddya got?” T. Boone Pickens says that’s the most important question you can ask to start a meeting: “That question forces my team members to be well informed in their area of operation and to bring value to the table. Knowing the question is coming also encourages everyone to be in the game, and on their game, and triggers knowledge sharing among the team. My team learns that only two possible responses will prompt my immediate scorn: ‘Nothing.’ Then why are you here? And the worst: ‘Can I be honest with you?’ Oh, so you haven’t been honest with me before?”

In December, Kris Maynard, CEO and co-founder of Essential Ingredients, was kind enough to join us at the Oxford Center holiday party and to speak about why he decided to sell his business to his employees. Now Kris wants to return the favor.

On April 22, he has invited all Oxford CEOs to join him at Essential Ingredients in Lawrenceville, GA, for an evening of food, drink and conversation. Along with having some fun, the goal is to talk about the Evergreen philosophy of building a business that stays private “forever” and can last 100 years. That’s the path Kris has chosen for Essential Ingredients, a Forbes Small Giant with more than $100 million in revenue. Also speaking will be Dave Whorton, founder of the Tugboat Institute, which is a community of Evergreen CEOs. (You can learn more about Tugboat here, and you can read Bo Burlingham’s story about Dave and Tugboat here.)

From Loren: I know Kris and Dave well and can promise that this will be a fun and provocative evening. Plus there will be barbecue. RSVP with Lindsay Armeen: larmeen@thetugboatgroup.com.

STARTUPS

Luminary wants to be the Netflix of podcasting, an ad-free space that fosters daring, high-quality productions: The company “has emerged from stealth mode to unveil nearly $100 million in funding and a subscription-based business model that it hopes will push the medium into a new phase of growth.”

Several podcasting stars have already signed on, including Guy Raz, known for “How I Built This” and other hit podcasts; Leon Neyfakh, the “Slow Burn” creator and host; and Adam Davidson, a force behind “Planet Money,” the award-winning NPR podcast. Most podcasts are free, but the Luminary app—set to arrive by June—will focus on subscriptions. For $8 a month, subscribers will gain access to Luminary’s ad-free lineup.

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HUMAN RESOURCES

In a recent study into pay equality, Google found that it has been paying men less than women for doing similar work. No, really: “The study, which disproportionately led to pay raises for thousands of men, is done every year, but the latest findings arrived as Google and other companies in Silicon Valley face increasing pressure to deal with gender issues in the workplace, from sexual harassment to wage discrimination. …

“Critics said the results of the pay study could give a false impression. Company officials acknowledged that it did not address whether women were hired at a lower pay grade than men with similar qualifications. Google seems to be advancing a ‘flawed and incomplete sense of equality’ by making sure men and women receive similar salaries for similar work, said Joelle Emerson, chief executive of Paradigm, a consulting company that advises companies on strategies for increasing diversity. That is not the same as addressing ‘equity,’ she said, which would involve examining the structural hurdles that women face as engineers.”

ZACK ELLER’S DEAL OF THE DAY

Comcast has acquired BluVector, a cybersecurity firm that focuses on AI and machine learning for an undisclosed amount. “It comes about two months after Comcast rolled out a new subscription security service for customers’ at-home networks that uses machine learning to recognize suspicious activity and detect potential threats.”

OxyContin maker Purdue Pharma is reportedly preparing a bankruptcy filing as it seeks to contain liability from hundreds of lawsuits alleging it fueled the nation’s opioid epidemic: “Purdue has been targeted in lawsuits by some 1,600 cities, counties and states seeking to recoup costs incurred by widespread opioid abuse. The municipalities claim Purdue and other drugmakers’ aggressive marketing of prescription painkillers helped hook the nation on opioids, leading to a proliferation of overdoses from both legal and illegal opioids. Purdue has denied the allegations in the lawsuits and said it is committed to being part of the solution to the opioid epidemic.”

INNOVATION

Gamers are using their platforms to raise millions for charity through “geek philanthropy,” or live streaming on the Twitch network: “Games Done Quick–a twice-a-year multiday showcase where speedrunners utilize technical knowledge, well-honed skills and physics-defying glitches to race through games as fast as possibleis one of the scene’s biggest events. But it’s far from the only charity stream out there. Streaming platform Twitch estimates between 2012 and 2017, more than $75m was raised for various charities on its service alone.”

Along with the revenue, charities see a range of benefits “not least of which is exposure to a wider audience. … Streamers often find it an avenue for major profile boosts or even a way to deflect criticism. Controversial streamer Felix “PewDiePie” Kjellberg, for example, has raised substantial amounts through live streams for various charities including Save the Children and the HIV/Aids support organization (RED).”

TECHNOLOGY

Elon Musk’s SpaceX just reached a huge milestone: In its first test mission, the company’s Dragon crew successfully docked with the International Space Station. There were no humans on board. “Instead, it carried 400 pounds of supplies for the space station and a mannequin passenger named Ripley, outfitted with multiple sensors to measure her ride to space…

“It was Crew Dragon’s first test flight and the first launch of NASA’s commercial crew program — a public-private partnership in which the agency awarded SpaceX and Boeing Co. a combined $6.8 billion in contracts to build separate spacecraft that will take NASA astronauts to the space station.” Musk says reentry is his biggest concern.

FUN FACTS

The Iditarod began over the weekend. It’s the most demanding race in the world and takes weeks to finish. But what gave Alaskans the idea for the world’s most famous dog race? Though the routes vary over the years, mushers take the journey to commemorate the bravery men, women and sleigh dogs exhibited during a 1925 diphtheria outbreak in the city of Nome. 20 mushers got together to bring medicine from Anchorage in relay fashion. It only took them 127 hours.

And that’s what’s ahead.

Please send comments and suggestions to mattg@oxfordcenter.com and lfeldman@oxfordcenter.com.

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