Chapter and Lesson #6

Winning is habit. Unfortunately, so is losing.  

Vince Lombardi


My next move at Microsoft happened fairly soon after I joined the Windows Team, by this time I had delivered some cost-saving measures for Product Support issues, and I had also got some experience working on Windows as a Product Manager handling the details of delivering the retail box of Windows for resellers.  It was 1996 and the Internet “Browser Wars” were starting to really heat up.   With new urgency around winning on the Internet, Microsoft Executives decided to carve off a team of people to focus solely on battling with Netscape and their market dominant browser Netscape Navigator.    I was offered a choice to stay with the Windows Marketing team or move to the new team that would be focused on marketing Internet Explorer.

There was no specific job that was set out, they were going to figure that stuff out later.  So I had a choice to join this new “Internet” thing, or stay with Windows and keep working on the “old thing”.   This was an easy choice for me.  It was obvious the Internet was going to change everything, and while I had been young and dumb in the past, not seeing the future and the opportunities ahead.  This time it was so blatantly obvious how big this was going to be, I jumped at the chance to join the Internet Explorer (IE)  Marketing team.  The guy heading up the IE team was a young up and coming executive named Yusuf Mehdi.   Yusuf was extremely charismatic, smart and charming, with incredibly strong marketing instincts, killer intellect and deft PR and public speaking skills.  He had made a name for himself with the Windows 95 launch, and he was set up to lead the Internet Explorer marketing effort under the tutelage of Windows Marketing Vice President Brad Chase.  Yusuf had a hot job, and was recruiting some of the best marketing people from across the company, he was set up for great success.   

A lot has been written about the browser wars, and I won’t bother trying to cover that in any detail here.  The browser wars are well documented because of the antitrust case they eventually brought against Microsoft in May of 1998.  Amongst the many charges against the company the DOJ claimed.

  • In May 1995, Microsoft executives attempted to persuade an internet browser software competitor–Netscape Communications Corporation–not to compete with Microsoft and to divide the browser market, with Microsoft becoming the sole supplier of browsers for use with Windows 95 operating systems and with Netscape becoming the sole supplier of browsers for non-Windows 95 operating systems. Netscape refused to participate.
  • Microsoft unlawfully required PC manufacturers to agree to license and install its browser, Internet Explorer, as a condition of obtaining licenses for the Windows 95 operating system.
  • Microsoft now intends to tie unlawfully its IE Internet browser software to its new Windows 98 operating system, the successor to Windows 95.
  • Microsoft continues to misuse its Windows operating system monopoly by requiring personal computer manufacturers to agree, as a condition of acquiring a license to the Windows operating system, to adopt a uniform “boot-up” or “first screen” sequence specified by Microsoft. This sequence determines the screens that every user sees upon turning on a Windows PC. Microsoft’s exclusionary restrictions forbid, among other things, any changes by an OEM that would remove from the PC Microsoft’s Internet Explorer software or that would add to the PC a competing browser in any more prominent or visible way than the way Microsoft requires Internet Explorer to be presented.

Some of the claims were accurate, some were not.  And for the purposes of this book, they don’t really matter now.

What was important was that Microsoft had a strong preference for winning.  They were aggressive, they hired what they believed were “A Players”, they had a culture of winning.   It was sort of just assumed, that if Microsoft was going to go after something with all of its power and will, they likely would win.  This was all prior to the DOJ case and settlement.  Things were very different in those early days.

My personal experience was one of great learning, fast pace working, and a feeling of teamwork and comradery I would never again experience at Microsoft.  Because we had a small team, I was fortunate to wear many different hats and do many different types of Marketing and Product Management jobs in a short period of time.  Nothing beats the feeling of winning a big battle and doing it with a team of people who work well together, who you genuinely enjoy working with.   Yusuf and Brad were both great leaders of that team and effort, and they had a great set of people they pulled together from across the company and industry to decisively win.

It was tons of fun- the most I ever had while working anywhere.   If you are competitive, being on a winning team is super important.  There’s a reason that great athletes late in their career only want to play on teams that have a shot at winning a championship.  After they get all the money, fame and respect of being a great player, they realize, nothing compares to winning.   

Learning Lesson #6  It is better to Play Backup on Winning Team than be a Starter on a Loser.   I think this holds in business and beyond the business world.   I would rather be a group manager at Facebook than an Executive VP at MySpace.  I would rather have the 3rd spot at Wide Receiver on the Super Bowl team than the 1st spot a team that didn’t make the playoffs.   Winning is fun!  Losing sucks.  In business losing is fatal.  And when working in technology it is a horrible and thankless spot to be in.

I spent time on several winning and dominant teams and a few real losers at Microsoft.  Windows, Windows Server, IE, those were great times.   MSN, and a lot of my time on Bing, well, those were often very tough times and not nearly as fun.

If you know you are on a loser, try and find a way to get traded, or move to a winner as fast as you can.  Sitting on a sinking ship is thankless, and no matter how much your boss, your co-workers, or your employees seem to need and want you to stay on.   DON’T DO IT!   Play for a winner, even if it means stepping to a lower level position to get on with a winner.   I can’t tell you how many people I knew who left their loser group at Microsoft to go to an obvious new leader – be it inside or outside of the company – and made great things happen.

Staying too long on a losing battle is normally a case of you getting caught up in your own ego – thinking you can turn it around, or you feeling like you are more important or capable than you really are.   Just like the stocks you may own where it is almost always better to kill your losers and keep your winners.  You should do the same with jobs if you know you are on a losing team get out.  It is a simple strategy, but hard to follow.  I followed the strategy reasonably well, but I wish I had done it even better.

A Big Weekend and No Major Moviepass Meltdown Reported

The stabilization of Moviepass seems to be continuing. A big holiday weekend, with surprisingly decent box office numbers came and went without any serious issues for Moviepass.

There was some complaints on available shows and showings, but that is a bit of a new normal for Moviepass.

My spot checks on supply and variety of movies in the Seattle and Portland areas was actually not bad at all. I didn’t see anything, but could have easily gone any of the major films had I wanted to.

Complaints seem moderate to low on social media. No emergency loans, no new negative changes to the service.

It’s like thy are acting like a normal respectable company that is in business for the long term.

Go figure! With all the negative press you would’ve never thought it would be possible.

More Terrible Clickbait From Business Insider

This story is just sort of unbelievable, along with being idiotic. Business Insider has jumped the shark on Moviepass Clickbait with this headline and story.

A passionate army of shareholders has shouldered MoviePass’ massive losses, as its leadership feeds them empty assurances

These kids at BI have no shame. They are basically turning into paid bashers. This story is so idiotic that it is almost funny.

The story conflates and confuses Farnsworth’s comments at the July 23rd shareholders meeting. BI says “While seeking support for measures he needed passed at a special shareholders meeting in July, Helios CEO Ted Farnsworth characterized them as an “army” and stressed that he had their best interests in mind.”

BI references this comment as it were made about shareholders. When it was totally obvious that Farnsworth was talking about the loyal Moviepass subscribers. Remember even in the Hollywood Reporter hit piece there are still 52% of subscribers who are VERY LIKELY to recommend the service. So even if you hate Ted- the guy has a point that there is a big base that still loves the service.

The author goes on to describe the obvious dilution that has happened and the R/S – all of which are now old news. Then makes zero effort to explain the many factors why more shares were needed to be issued, and making no mention of how this dilution could stop on a dime. And how shares could easily be bought back in the hundreds of millions very quickly.

Also no mention of the B/E statements Farnsworth made in the Fox Business News segment earlier today.

These negative one sided articles are all about driving clicks. Covering all sides, ensuring multiple perspectives, none of that matters to Clickbait farms like Businesses Insider.

Business Insider is a fake news organization founded by a Wall Street convicted SEC banned personality.

Done trust BI – they have more misses, half truths and flat out biased coverage than almost any other online pub.

Model Update Post CEO – Ted Farnsworth Fox Business Interview

In Today’s Fox Business Interview CEO Ted Farnsworth claimed that the Moviepass subscription businesses is now break even.

Specific numbers Farnsworth claimed in the interview.

  • Utilization Rate is now at .9
  • Approximately 10% of yearly subs quitting.
  • Did not give monthly sub retention rate.

If you believe Ted’s #’s – and the prior numbers given for non subscription revenue – it does appear that the company is very close to breakeven. And on the sub basis alone, they should be showing a positive gross margin. I used $11 for a average ticket price. Which is higher than MPAA estimates.

I dropped the subs to 2.6M and built back up from there.

Here’s the model. Things are looking pretty good!

Fox Business Interview and New Model

Link to Interview on Fox Business

  • Utilization Rate .08
  • 3M Subs Holding
  • Down to $12M cash burn now
  • Changes “will make us profitable”
  • Ted Denounces dilution
  • Say they have 6 month worth of cash
  • 1 Million already switched to new plan
  • Mitch – “New plan gets us to cash flow positive, and when the market starts to realize that the need for capital is declining rapidly I think people..Investors”.  Cavuto interrupts “what’s in it for the customers?”   Damn it Cavuto – let the man answer the question!

New Model – at .8 Utilization and $11ticket price  (highest I have ever modeled) show GM positive.

I am not sure why they can’t just show a profitable month for August now.  Maybe they will?