This is the second Marketing BS podcast. Alex Norman is an old friend who co-founded TechTO, the leading tech-event company in Canada. He is also a partner with AngelList, co-founder of HomeSav and runs a micro-seed venture fund. In Part 1 we talk about Alex’s career. Tomorrow in Part 2 we dive into how he grew the TechTO business. (Note: Originally the interview this week was going to be with Nick White, head of marketing for Osano, but due to some issues with the transcript I am pushing that episode to next week)
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TRANSCRIPT:
Edward Nevraumont: My guest today is Alex Norman. Today's episode covers his career, McGill university, Lehman Brothers, Simply Business, McKinsey, HomeSav. He's now Managing Director of Tech TO and a partner with AngelList and N49P among other things. Alex, the first time you oversaw marketing was when you were running HomeSav and you got that opportunity by starting the company yourself. How did you go about making that company happen?
Alex Norman: Yeah, that's an actually really good question. I want to break it down to two things. Why did we start this company? And how I was in a position to start this company? One is I had recently been at McKinsey and I felt giving other people advice is great, but I like building something and I started looking for opportunities. My co-founders and I were spending time looking at money, different opportunities, looking at acquiring companies. Over six months we realized we all had a similar problem, finishing our houses. It sounds silly, but we all realized you buy more furniture and home decor than you think you do over your life and you constantly buy it and it was really no good solution. The brands out there were all retailers. It's a huge category with very few leaders. You had Ikea you have like a couple other like restoration hardware, but the whole process of what you buy and how you buy, it's pretty crummy experience
Then we saw there was an opportunity to change how people buy furniture and home decor and to leverage, we thought people were now becoming comfortable with the internet for purchase like this. So we found this opportunity the problem we had, we saw that there was an interesting way to insert ourselves in the value chain and use a changing environment.
Now, Why I was able to set myself up to do this is a couple of things. One is, I was already 10 to 15 years in my career and I'd never, lived at my means. What I mean by that is, when I was working at McKinsey, you make a decent salary, decent bonuses. But I was consciously keeping a lot of dry powder cash there in case I ever needed it. So when it came time to starting a company, investing in a company and living with no salary, I had six figures liquid saved up. So I could deal with that immediate casual pressure. Second of all, my experiences gave me insights on knowing what starting a company looks like, the challenges that I'd face and the skills that we would need and I had found the right co-founders to do it with. So one was finding the right opportunity. The other was positioning myself in a career that I could actually jump in on the opportunity when I saw fit and also knowing what to do or believing. I knew what I needed to do.
Edward: When you were there you grew the business to about 350,000 subscribers before you sold it. How did you know what you were doing on the marketing side? Because you didn't have a lot of traditional marketing experience going in.
Alex: So I think some of it is intuitive. I've been around marketing functions for a long time. I had previously worked at startups in the States and UK. Where I wasn't responsible for marketing, but I was close to marketing strategy and I was building into my product, so I understood and saw what they did and watched the approach. I did a marketing major in my MBA, whether or not that's practical or not. It gives you a framework and how to think about it. Also did some marketing projects at McKinsey. So I was aware, of let's say the frameworks and strategies to use. But I think it was more just customer development and intuition are saying how the internet works. So my approach was, it was doing customer development and also from marketing channels to build a bunch of experiments in a portfolio approach.
Sorry, let's take a step back and say, there was two things we had to build. We have to build a brand and awareness and we had to build, actual get transactions, either people, micro transactions to sign up, to be subscriber or to actually purchase, and I think the, transaction building the list, that was much more natural to me. We figured out who our target customers are or we had hypothesis, we test it with a bunch of different campaigns to refining to figure out a customer. Now we did research and it was 28 year old to 42 year old women living in metropolitan areas who had a white collar job and had limited time and was interested in home decor.
So we figured out where we believe this woman was, what our habits were and then we did a bunch of experiments to reach out to her and run a portfolio of, different distribution channels and messaging and figured out which ones are the right ones to double down on. When we had something that was working, we put 70% of our efforts and have a portfolio of other activities that we'd keep on testing. From the branding perspective, we took a bunch of different activities and I would say that was a lot less measured. So you'd probably be disappointed in how I ran that. But it was more of, how do we get awareness and credibility by leveraging off brands that, would resonate. So we had a BizDev approach where we'd go partner with people like House & Home or Styled Home or approach not and try to do BizDev where we'd get our national post even.
We'd get opportunities to get our brand in front of people and get distribution. And it was really the ability to consistently show certain type of product, a certain value proposition. We have partnerships that wouldn't necessarily drive people to sign up through email or to do purchases, but we'd give people comfort that when they saw something else and are deepen our channel they'd feel comfortable to interact with us. How do I learn to do this? This is just read a lot. So my past history taught me some of the frameworks and how to think about it and an experimenting a lot and just looking at the data, looking at what's happening and just quickly iterating and talking to a lot of other people. because there's, a lot of people doing startups that you could just reach out to for help.
Edward: How did You come out of the HomeSav experience different than when you went in? Like, what did you learn there that set you up for growing free future businesses?
Alex: So I think a couple of things, one is trying and understand the high level game you're playing. So this is not applicable necessarily to marketing, but we usually try to bootstrap, bootstrap, his business. People say, don't look, all your competitors are doing, but I think it's understanding the value chain and who you're competing with and what your ultimate goal for that business is in planning a bit more backwards. So, the One Kings Lane existed, they were competitor to us and there's a few others emerged like FAB, pivoted into our space and they had a lot more capital play and act a lot more irrationally. So while you don't really want to worry about your competitors, normally. The actions of people that were much significant, more well-funded to us caused us to go raise money and, change our game at the game we were playing.
So I think understanding the value chain, who the competitors are and where you can compete differently. So like, what's your unique accesses and how you can compete and how that lets you either compete completely differently or where do you have to overlap and value proposition and what the implications are? I'd build a much stronger hypothesis at the beginning. I think the second thing is, a team perspective. I think strategically mistakes we did is we kept a few people that were excellent performers, but bad culturally for too long. And so they create some ill will in our culture that hurt the productivity of other people. So we had some people are excellent. They were like, they're 10 times their former at half the cost. But what we didn't realize is by having them in the company too long they infected another five, six people and hurt their, ability to deliver value.
I think, the third thing is I think in the marketing channels, we did the right thing by focusing what's winning and keeping portfolio activity, because every channel or message eventually changes. The ultimate vision stays the same, the ultimate positioning stays the same or can be changed over time, much slower than the channels and distribution. So I think we did the right balance of 70% investment on what's working in 30% in experiments. I think for some of the core business, we probably should have done less experiments and double down a bit more while it was working.
I think those are high levels from running business. I think it's a lot and as you scale, it's all about the people, because we got to 45 people, 50 people at one point, it became either about recruiting, about setting the culture or about handling people issues. So I think realizing that as a business scales, you want to get the right leadership set that helps. I think as leaders, the CEO or founders, you're always going to be responsible for that, but the level of the, bench strength of the management team faster, would it have been helpful.
Edward: That's helpful. So I want to go back on how you got there. So I have a theory that the things people do when they're in junior high school or early in high school affect their entire lives. How did you spend your time in junior high? What were you passionate about Back then?
Alex: Comic books, reading, sports. Wasn't a big athlete, but I was a big fan of the Blue Jays and the Maple Leafs.
Edward: What drew you to those things? Was it the math behind the baseball? Was it the money behind the comic books? Was it the Superman jumping over buildings? What, what drew you to those things?
Alex: That's a good question. So two things which I think drew to most of my activities in my life, and I wouldn't say necessarily for comic books but is, I have an inherent desire and this is something I've realized later in my life is, that I like taking stuff apart, figuring out how they work and putting it together. Not necessarily physical things, but I like understanding how things are interrelatedly work. I just have an innate curiosity to figure things out. I say I'm numerically logically inclined, but it's not necessarily like, I'm not like someone who needs to do deep calculus. I think for comic books and reading I think and just reading. I was an avid reader, comics is just, was a great way to escape. It was fun to read. Just different ways of thinking, I guess, a bit of fantasy.
I think just like reading in general, just to see in different perspectives. Reading in general is just a great way to explore a world without leaving and I think comic books as a kid was something that let you do it and it was superheros, but eventually as I got older, it was like stuff like Sandman, which was, it was more mythology. So I think it's a bit of escapism, I think that it's a bit of creativity. It's just a bit of ways to see the world differently and then eventually I started buying and selling comic books and that was, it was almost as much a challenge of as much enjoyment of reading. So originally started off to pay for my comic book collection because it was spending way too much. But then it was also a way to just figure stuff out, figure out, make the business work for lack of a better word.
Edward: Those skills carry forward, the stuff you developed back then, how did that affect things later in your career?
Alex: So, and this is a nature versus nurture question. Most people today, especially in the tech world, don't believe there's anything as business skills. They just think that, inherently you can learn everything and I, feel that, there's like business common sense, which I think I've naturally had and this helped me, nurture it and help me bring up sooner, faster. So like I understand clearly supply and demand. Like I went there and I had these words, I understand arbitrage. I would understand basic marketing. So it taught me lots of skills. People learn in college. It taught me a lot of just experiential experiences, with a lot of concepts that are important to business. I didn't have any experience with managing team, but like at this time this was before the internet and so I would see arbitrage opportunities by reading local newspapers, for example.
So I'd buy stuff in Toronto and put them for sale in the States. Vice versa, I'd see stuff for under price in the States and sell them in Toronto. I had a whole business, so I had to understand profit and loss. I had to understand, I understand supply demand. I can understand, so I think there's a lot of basic business skills that I picked up that I had advanced learning. But I also think if I look at my career, I think I just have an innate understanding of some like common sense when it comes to business.
Edward: Now you went to university in Montreal, McGill. How did you come out different from that experience than when you went in?
Alex: Much more global view. I think, if you asked me before McGill I'd have probably said, I'm going to be right back in Toronto, probably may, my career mission, maybe being an accountant like my father. McGill had a, it still has a very international student body. It was just eyeopening to see people from all over the world and with all different ambitions and spend time with them.
Alex: I had a roommate that just moved from Delhi a few years ago, years before McGill, I spent two years living with him. I like, one of my friends originally from Hong Kong, also people from small town Ontario, which didn't have the perspective I had growing up in Toronto. So I think you go there for the education supposedly. But I think with the education you get is from your peers and they change your perspective and they change how you view the world. I went right to New York after that. If I didn't go to McGill and didn't meet the people I met, I wouldn't have had, lack of a word ambitions our desire to go to New York and I wouldn't have gone into finance. So it, it changed my whole career trajectory.
Edward: So let's talk about that. So let's say you went to York, the local university in Toronto, instead of going to McGill, how do you think your life would have been different?
Alex: Well, probably lived at home for those four years. So right away. That's a whole different experience because living on your own, you have to do adulting. You have to clean your house. You have to be responsible for rent. Like basic life stuff, but you're not sheltered by living home and second aspect of not living at home is you spend a lot more time doing social stuff. Like my parents really didn't care what time I came home or not but like I had car, I'm sure if I came home a few nights at three o'clock in the morning, it would have been an issue. But when you live by yourself, you are responsible of yourself. You have your own social calendar. So I think, you get a bit more responsible taking care of place and budgeting and everything like that.
I think it also gives you more Liberty to do what you want without any oversight and again, I'm the oldest of five so my parents just really didn't care about me because they thought I was responsible but I don't know. But I still think there's self pressure that it opens up. I think also I do think York, two things, it doesn't have an international group of people. It's a bigger university I think student body wise, but more homogeneous and how they think and it doesn't have, also one benefit of McGill's as an international alumni base and reputation, which also has benefited me, which I think York has is a strong school, but its reputation is probably limited to the Southern Ontario region.
Edward: Where would you have ended up, like you wouldn't have gone to New York, you think you would have gone and taken a job as an accountant in Toronto?
Alex: Like I probably go on accounting. Maybe I'd gone to one in the Bay Street, which is okay, I think. But Bay Street it's probably better destination out on the was 20 years ago at best would have been at Bay street, but probably been an accountant or, some professional service job.
Edward: After you left Lehman, you went to San Francisco and then less than a year later, you went to London. How much of that was chasing the good opportunities and jobs and how much, what was the allure of new cities in places?
Alex: I'd say it's more cities and places than a good job. To give context. So this was 2000, 2001. So as a Lehman doing Tech M&A, it's funny I didn't believe in the valuations of dot-coms, but what I saw was technology was going to change how business was done. So I wanted to get close to it and at that time, the experience you get as a 22 year old at working for these dot-coms was way beyond what you'd get historically. They come in and say, run a division, run marketing. So start off, I left Lehman to go to the company in New York, which wasn't working out and there was an opportunity that came to me via several contacts to say a couple of people I knew were, moving to San Francisco once said Hey, there's a great startup that I'm going to work at why don't you apply?
So I went for that job and I wanted it because it was the ability to be close to where the actual what's happening and then you have to be honest, I was a bit disappointed with San Francisco at that time from, again as going for the experience of the startup, but also experience of being somewhere other than New York and other than East coast. And it's funny, I was, it was more at that time, San Francisco was more middle America and New York is. I think it's now much more like New York than it was in 2000, 2001. So we'll come in. I was working at, I was failing for a couple of reasons. One being the CEO and founder got really sick and so she was going to basically resign and the investors want to take the money back because it was a big bet on her.
So when I knew that was going to happen, I said, you know what? I want to go outside of States. I want to see a bit of the world and I actually literally reached out to a colleague of mine, a senior VP of mine that worked with me at Lehman brothers in London. He was about to start a company and one of my friends from McGill was in Hong Kong and I asked them both what opportunities do you know? A week later I was in London interviewing with this ex former senior VP from Lehman brothers, learning about his company, meeting his founders and I left London with an offer and I was there two weeks later. So it was an ability to get out of North America, see a bit of the world, get a different culture. It was also another opportunity to continue working in tech and actually a more senior role and they had an interesting idea, which was worth pursuing.
Edward: It sounds like that you were at a few different places that didn't work out. What were the biggest failure points in your career? Where did things not go as expected?
Alex: I guess maybe I have a growth mindset. I don't think anything was really a failure, there's companies I worked for that don't exist and didn't work. But they weren't my companies. So I think the activities I did, I think in those companies were successful, but though either a strategy wasn't right. They didn't have enough funding and I learned a lot from them. Like if I look at companies that fail, so I worked one in New York, they were the first B2B marketplace and they raised a ton of money from a bunch of notable investors. I just think the timing was off and they were trying to do too much because they raised like a hundred million dollars, but we were trying to cover 30 markets and you'd have people raise $30 million just to cover excess apparel inventory. So we were trying to do a hundred markets with not having any traction anywhere.
We have competitors doing every single market and, I just want some for market, for sub markets and even when I had everything that looked like it was ready to be in place. I had supplied and a man lined up at all those things, ready to create that market. The timing wasn't there.
So like I remember they did a deal with Stanley works. Stanley works is going to put $400 million of excess goods on our marketplace, we're going to help them sell it and we're going to clear it, go to implement the steel with the CFO and CTO at Stanley Works. Drive up to I think it was Connecticut. They said, "Yep, we're all for this. We know we have $400 million of excess inventory. We don't know what it is or where it is". Their technology systems were not ready and then the people that like the jobbers or buyers that are brokers are going to buy stuff still will want to do stuff offline. So half the time we even did transactions, we've done offline and recorded online. The timing was not right and we were just too spread thin to actually to make it work. So that company didn't go there.
Edward: So if that company had succeeded. What would have happened to your career? You've had a very different experience going forward, what would it happen?
Alex: I don't know. Like even if I stayed at Lehman instead of going there, like the good thing is every change has a compounding impact on my career. If that worked out hypothetically, I could be much wealthier than I am that. Think about it, you have a startup in 2001, let's say it works out. The IPO out of had probably enough money to make some money that, and more importantly would have been an early person that has an exit or an IPO you to be in the flow with people and that ecosystem that could have probably invested and had many more opportunities based on that. I don't know what I'd be doing. Like, I don't know if I'd be a market builder because I was responsible for four different markets here and I was getting supplies, getting demands, some partnerships to build awareness and get, I guess I was doing some marketing that I think about there.
So maybe it'll start something sooner. I don't know. It's hard to know. That, interesting is also if that company was started in 2008, instead of 2001, there was a hundred employees when I was there. I'd be probably in touch with those people because I think right now, occasionally I hear from one of the people, but there wasn't a social network. You didn't have personal emails. So it would have been completely different, if I say the Lehman Brothers, I could've be there till it went bankrupt and I could have still walked away with a lot of money. I'd have probably been in New York. I'd probably had a complete different perspective on what gets me excited, probably be an investment banker for so long. Your justification life is, how much money you make, which money is important but it's not the end all be all measuring stick for my life right now. So culturally I would have been different and opportunity to be different. So it's just hard to know.
Edward: Let's, jump ahead. You went to business school, spent four years at McKinsey, came back to Canada, started HomeSav, you sold it. How did you figure out what to do next after HomeSav?
Alex: So I had silver bronze handcuffs. So which means, I had incentives to stay at the choir, but once you get acquired, you have pressure to perform, but it's not the same as being a founder. So that was the time to start figuring it out. I actually thought I'd just start another business by now. That's actually the first thing I started doing, I found new co-founders. I thought I had problems and I tested some ideas. So one of the key learnings also, I guess, going back to the question about HomeSav is, after being a first time founder and selling something, you realize it's a 10 to 20 year journey for a really good outcome and building a real sustainable business. Every day you can get hit in the face or I have a huge celebration within 10 minutes and so I started exploring other ideas.
I went through two or three different ideas where I got a team together. We explored it and I was much more critical about what information I have to learn to make a no go or go decision and how much passion I have to have. So try to ideal around providing technology for early education like kindergartens and Montessori schools. I did another idea, can't even remember what the other, second one was? Then as a third one, which is like class pass for hair salons, you can look at my hair, you can see I'm definitely a customer for that, but actually that, that, one's actually funny. I have four sisters, a wife, a daughter, my co-founder. They're also like just, we start off with doing classical blow outs and that one actually looks successful, two months in, we had 5,000 customers paying us a hundred bucks a month.
You know the accounts were horrible though and we actually got offered venture funding and I think we did for another month and a half and said, like we're not passionate about this and we don't believe fundamentally you could have a create something that delivers values for all the stakeholders. You always, having leakage at one part of this business model. So we actually put a bullet in it. So I thought was start another company right away over a series of a year, the three companies, they put bullets in all of them. I started advising startups. So it wasn't clear and then, I sort of organically found what, I had the luxury of time to figure out what I wanted to do and I followed what I'm excited about
Edward: You ended up, Managing director, co-founding Tech TO and then becoming a partner at AngelList and then launching your own VC fund. How many more jobs are you planning to do? Can you consider being the CEO of a social network and a payments platform for them simultaneously?
Alex: I'm only goal is to be as talented and connected as Jack Dorsey. It's weird because I think a lot of people believed the only way to be successful is to have a clear end set of where you want to get to and build towards it. I do believe that increase your chances of success significantly. I think the other thing with the path I follow, which makes it more difficult is if I were inherently interested in doing stuff I enjoy and doing stuff where I believe adds value and which will eventually pay for it, pay for itself. So all these things are connected and I think by giving a lot to others without expecting, anything in turn has helped me build this career path. So like Tech TO was started when Jason who we both know, Jason Goldlist came back to Toronto, said had, I'm working remotely.
I'd like to get involved with the tech ecosystem, I said, here's some opportunities. There're some things you can do to help improve the culture, the Kane or the Toronto tech ecosystem and we had both experiences, he'd be in Seattle, I've been in three other startup ecosystems. What do we bring the best from organizations we saw there? We just started doing what we thought would be best for the ecosystem that got, for lack of a better word product market fit. It wasn't planning on being an organization. I was planned on me like a three hour per month give back to the ecosystem and it's grown into something much bigger. We can get that later. So I started doing that is actually what happened was the timing was before I started Tech TO I was, actually going through a series of startups that I was seeing if I want to start one up, I advising a bunch of startups.
So I started doing this three hours a month and then it start getting traction. So okay let me figure out what we can do to have a bigger impact and bigger impact that continue to grow. And because of that, and we've been advising startups, eventually AngelesList was looking for someone to launch a candidate and reached out to me. I wasn't looking for anything. So if you look at Textron, we're trying to help the ecosystem by helping people get knowledge faster, learn from others, faster, meet people faster and build awareness of what's going on in Toronto. One thing I never explicitly touch was we believed it was more capitalism ecosystem, but we didn't think this organization was well positioned for that. Angels reached out to me, spent like three months talking to them, their mission as an organization, as a company, it was very aligned with what I'm trying to do with Tech TO.
They had the ability to bring capital and SQL system. So there was a natural fit there and to sort of live the mission I'm trying to live in and help him with another organization. So that's why I took on the role at AngelList. Then in that draw, I'll take up both of these.
I started as an angel investing and I found I had good deal flow, good judgment and I had well positioned myself again. Love say the strategic. Maybe, if I was forced, I'd say this is what I'd like to do with my life. I would have strategically taken both these roles and built these up, but it wasn't. So I said, okay, here's an opportunity for me to further align myself with the companies I'm investing in by bringing more capital, more connections to them. So I've raised the venture fund based upon the leverage, basically all the different networks and all the different skill sets and learnings I've had and have a bigger impact on the ecosystem. So while it looks like three different jobs, they're all very correlated. They have synergies for lack of a better word. Do I want to take on more roles? No. Am I taking on too much right now? Probably will there be a shift in how I allocate my time between all three? Probably there's been shifts over the last few years. It'll probably be more shifts over in the next six months.
Edward: Awesome. Thanks Alex. We're going to dive into more into Tech TO when we do part two of this interview, which should be released tomorrow.
