Execution Eats Ideas for Breakfast: Building Real Businesses from Big Ideas | David Bell | 654

And welcome, welcome, welcome. This is Peter Winick. I'm the founder and CEO at Thought Leadership Leverage, and you're joining us on the podcast, which is Leveraging Thought Leadership. Today, my guest is David Bell. David's really interesting. He's a trailblazer in e-commerce. He's the founder of a company called Idea Farms. He is an academic. That's been published all over, and he's an investor. And some of the companies that he's invested in, you've probably heard of because they're direct-to-consumer brands like Bonobos and diapers.com, Harry's, Warby Parker, jet.com. So he, he knows a couple things about a couple of things. So welcome aboard, David. How are you?

Hey, good. Thanks, Peter. Good to, uh, good to be here.

So you're kind of hard to put into a category, right? We can say David is an academic. That is true. We can say David's an investor. That is true. We can say David's a CEO. That's true. But talk about, I guess, how the thought leadership has had a role in your work.

Yeah, thanks, Peter. No, I guess I was very fortunate to have a few different bites at the cherry and I'm sort of by no means in this league, but one of the most interesting people I would speak You know, it was a couple of years ago at a conference in Germany and Munich called Bits and Pretzels. And that's all the European sort of startups and tech founders and so on. And it was coincident with, uh, with Oktoberfest. So they decided on Sunday morning, who are they going to put on the bill at 8 o'clock in the morning on a Sunday during Oktoberfest was actually Arnold Schwarzenegger. And, uh, I think one of the most interesting people you'll ever hear in terms of 3 totally different orthogonal careers, you know, bodybuilder, movie star, and then into, uh, Governor of California, very high-level politics. Now he's of course doing other stuff. So yeah, I'm certainly nowhere near that league, but I think this idea of, you know, a little bit of reinvention is not a bad thing. And I was very fortunate, you know, to get to the United States as a student and go through the American academic system and teach. And while teaching, got exposed to early-stage consumer investing, which is a bit of a passion, and then kind of transitioned into doing that full-time, but also retaining the academic interest.

So I think Be there a minute because, you know, when you think about what it takes to be a successful academic at the places you are, right? You know, we're talking about significant, reputable places and then to just sort of move over to the other side as an investor.

That's right.

Most academics, quite frankly, I don't think have the, I don't wanna say the courage, but maybe I'll say the courage to sort of take that leap because when you get to a certain level in academia, it's really comfortable. Like it's, it, life's pretty close. You're making decent money, you're doing what you love, you, you know.

Yeah, no, it's, that's certainly true. And I think, you know, in my particular case, you know, I have a very good friend who sort of did it on the front end. He was a professor in finance at UCLA. He did a few years, got married, and then he actually went straight into working as an investment banker, was very, very successful. And then by the time he got into his mid-30s was effectively able to stop working, at least stop working for other people, but still continue to publish. So, you know, he's really one of my best friends and that was always very inspirational to me. I never thought I'd be able to carry off something like that, but I think what's happened, particularly post-COVID, I mean, now we're in this AI world too. Like a number of really good friends actually have left academia, left Harvard, left Wharton, left Cornell, uh, and other really good places have gone to start companies, some of them have sort of at least part-time, sometimes full-time, worked in large corporates. So, you know, Microsoft, Amazon, Google, those kinds of companies now have chief economists and scientists and people who fit naturally out of academia. So, you know, one of my friends from Stanford, I mean, he was a chair professor at Stanford at the business school and a really great role. And he actually also quit. Now he's a, he's a big shot at Google. So I think people are looking to do other stuff and it's really a confluence of two things. I think Peter Winick, there's just so much more opportunity on the outside for people who've been through that academic training, because some of it could be potentially quite useful, number one. Uh, and number two, I think academia is also under a lot of pressure now, and it's, it's not quite the environment that maybe it was, right? There's all kinds of sources of education now. I'm taking a class on Coursera along with about 600,000 other people. So I think the traditional university, you know, that model of, you know, offline courses and very high fees, some tenured professors, that's under a lot of threat. And if you look at where AI is going, you know, one of the largest sectors that people think is going to evolve is the edtech sector in all kinds of forms. So I think it's a confluence of all that. It's still probably a small total number of people, but certainly much more common than it was, you know, 10 years ago.

Interesting. So I want to talk about your thought leadership. You've published, you've got your own models, your methods, and your frameworks. And one of the cool things that I've learned from our conversation is the theoretical and the applied, right? So you've, you know, it's one thing to get up there and teach something, but you're, you've now invested in companies that we all know, you know, Diapers and Jets.com and Warby and Harry. So obviously e-commerce. What are, what are the models and the frameworks that you look at when evaluating one of these businesses? Because I would argue if you had one or two of those, I could say, eh, maybe Dave is just a lucky fellow, right?

I'm going to give him a little bit more than luck. No, I think luck certainly factors into it too, right? You're just fortunate to be around at places where there are good people. But I think, you know, there's a couple of things that you look at. So one is, you know, you look at whether there's an opportunity that's kind of visceral thing that if you could improve upon it, would people take notice of that? So to take Warby Parker, you know, very, very successful company and in some ways emblematic of that whole space, Peter, the whole direct-to-consumer. You know, if you go to Google and you type in Warby Parker of, you know, there'll be a whole list of completions, including Warby Parker of Cochranes, you know. So what they did is they said like, you know, people are paying a lot of money for glasses. There's no reason why they should be $300 other than you and I have got no idea who's making them. They're licensed. To brands like Tiffany and Dolce Gabbana, and they show up in stores, and that's just kind of what we're, what we're used to. The whole thing's opaque. The Leslie Stahl did a really great 60 Minutes segment back in 2012, kind of on this, right? So the first thing you look for is, you know, is this sort of a structural problem with a sector or a product? People are getting ripped off, the product's substandard, you know, diapers.com. You're stressed out, you're a young parent, you really want to go to the supermarket. Well, Maybe not everyone does, right? And diapers, there's no surprise when it shows up, you know, Pampers are Pampers. You're not going to be shocked. It's not like buying bananas, you know, uh, online. So you look for that sort of visceral pain point. And then number 2, you ask if it's, if it's ubiquitous. And then number 3, you start to look at the tactical stuff, you know, do, do the people behind this idea have the right conception of brand, the right conception of go-to-market, are they pricing for value? Now all of that blocking and tackling. So I think there's a statistic I remember from my academic days, you know, very depressing, you know, 90% of all ventures sort of tank and fail. But the majority that do, Peter, it's a failure of execution typically more than a failure of conception. So sometimes people just have stupid ideas like the Juicero, right? I don't know if you remember, that was like a terrible product. Somebody on YouTube went on with the juice bag and squeezed it and, you know, it was kind of game over. So At times there are just bad ideas, but I think oftentimes there are just great ideas with sort of bad execution or bad timing. So I'm old enough to remember when, you know, Webvan was around and it went out of business, but that's kind of come back. You know, I remember a company called, what the heck was it? They would deliver you a six-pack of beer and Cosmo.

Cosmo.

Exactly. Cosmo. Well, genius, right? And now you've got, you know, DoorDash and companies like that that are worth tens of billions of dollars. So sometimes the idea is too early and it comes back, but I think that's what we are really looking at is, you know, is this a team that can really execute against what seems to be a pretty fundamental idea?

If you're enjoying this episode of Leveraging Thought Leadership, please make sure to subscribe. If you'd like to help spread the word about our podcast, please leave a 5-star review at ratethispodcast.com. /ltl and share it with your friends. We're available on Apple Podcasts and on all major listening apps, as well as at thoughtleadershipleverage.com/podcast. So I, I, I want to extrapolate from that because in my work, right, I spend most of my time or a good chunk of my time developing strategies for thought leaders. Right? That's what I get paid to do. Right? And I think that the reality is I would say that we do a really good job at that. And I think our clients would say we do a good job at that. The execution is the problem. So it's not just the direct-to-consumer. You know, ideas are to some degree a dime a dozen. Right? We should sit around with a couple of cocktails and come up with great ideas to change the world and do this and do that and whatever. But if all we do is wake up in the morning with a headache that we didn't mean, nothing happened there. And I think in the world of thought leadership, it's almost harder than in e-commerce CPG stuff because at least with e-commerce here, here's, you know, I'm holding up my Warbys, right? I've got 10 pairs of them. If the idea is let's, let's build a pair of glasses for $100 that are stylish and fashionable and, uh, don't look cheap or whatever, whatever. Okay, well this is a representation, the divide, this thing in my hand of what that looks like. I can touch it, I can feel it, whatever. In the world of thought leadership, you can't put that idea in your hand, right? You, we could describe it and we could talk about it, but you gotta get it down to the level of, uh, detail that says, I'm gonna take my ideas on X, whatever X might be.

Yep.

I'm gonna put it into these modalities, a validated assessment tool, a video-based training, whatever it is. And I'm gonna deliver that at this price point to this market with this, within this period of time. I think a lot of thought leaders don't put that or don't apply that level of rigor to their businesses as someone like you, Peter, might. So do you— have you seen that amongst your thought leader friends?

Yeah, a little bit. I think, um, you know, I really love where you're going because there's a, there's a framework I sort of think about, very, very simple, that I think speaks to some of these issues. It's called, uh, marketing math or business math 101, right? So defines your success. And the success really is the interaction. It's not additive. It's like an interaction between— so how good is your product and how good is your your go-to-market. And it's a really simple exercise, but you think about, you know, when the iPod first came out, I was in Boston in 2003, I'm riding on the T and I'm wearing the, you know, the white headset and I'm listening to the dial, listening to the songs. People forget around the same time the Microsoft Zune came out as well. It was basically the same thing. But you know, one went on to enormous success, a company that's worth multiple trillions of dollars. Other companies successful too, but that product tanked. And the tanking is usually not to do necessarily with the quality of the product. I mean, if you build a zero, it's going to go to zero. But the other side of the equation, the marketing, can you position it properly? Can you go through the right channels? Can you price to value? Can you message it? And it's much harder to sort of reverse engineer a company that's been successful because of the nuances of positioning and go-to-market than it is a company that's been successful purely on the basis of a product. And I think Certainly in 2025, it's hard to be successful just purely on that dimension. So with respect to the short, the thought leadership, having a simple idea, something of that nature that can be unpacked, that's got immediate tangible value. It's like, probably the most famous, at least of the last half century, more famous business academic would be Clay Christensen at Harvard Business School. Sadly, passed away. But think about some of his ideas like jobs to be done or The Innovator's Dilemma. I mean, you could take that idea and you apply it to everything from the government to the military to an auto manufacturer to chip technology, right? I mean, the idea sort of is so fundamental that it's got one or two simple levers that if you actually drill down on them, you'll see success and it's very tangible and very implementable.

I think that's true. And I also think a pattern that I see quite often with thought leaders is they're brilliant. They're, you know, many of my clients are literally the best in the world or amongst the best. In the world at what they do. However, when, when you get under the hood at their business, it could often be a mess. And I, and I always scratch my head and say, well, why, why is that so? Why are these really smart people not sort of following the rules? And then I think about that and go, okay, well, this makes a lot of sense, right? Like if I, if you and I were to sit around and say, you know, we're gonna open a, a line of vegan pizza shops in college towns. And we want to put them next to marijuana dispensaries because that'll stimulate. That's gonna be our model. We say, okay, that's kind of cute, right?

Yeah.

We put together a business plan, blah, blah, blah. But ultimately we have to sell that to the investors that says, okay, here's the branding, here's the positioning, here's the this, here's the ROI, here's what we're looking for in locations. And we're gonna be in this sort of, you know, college town in, uh, near Penn State, but we're not gonna be near NYU 'cause the, real estate's a different structure, whatever. They're gonna hold us to that. But thought leaders sometimes put themselves in a predicament where they're only accountable to themselves. And that's a bad thing, right? Because we couldn't go back to our investors and say, okay, we took $10 million for you. Our idea was pizza, vegan pizza, college shop next to marijuana dispensaries. And 6 months later, say, you know, we had a different idea that we executed on. It's donuts next to Weight Watchers meetings.

Right. You know, it's funny, just made me think of another thing, you know, think about people whose work I admire who are thought leaders. I think there's sort of two other things that come to mind as well. This is obviously true of Clay Christensen, or you look at some of those other, you know, really sort of big people. Is there some real underlying research of substance to it? Like it's not just purely an idea, but there's empirical findings or facts. So you think about, you know, The Long Tail by Chris Anderson. Yeah. What a What a great idea. Anyone who understands the internet's got to read that book, right? Why the future of business is buying less and more. You know, there's more stuff, smaller volume, and all the nuances of that. Or, you know, another person I really like is a former colleague and a friend at Wharton is Jonah Berger. He writes a lot about why things take off. And again, if you look at his work, there's always some like real empirical studies underneath. Like why do certain articles get shared in the New York Times? Well, yes, it can all be explained by this. Steps framework, you know, S being social currency. I share things with you that make me look cool. And not only is the idea appealing and clever, but there's actually some real grunt work's been done underneath it. Even Michael Porter, you know, the Five Forces, I mean, to my recollection, he did real sort of industrial economics, you know, nerd type papers that then led to this.

But in this market, you know, what's, I agree with what you're saying. However, in this market, I call it the sort of the steak and sizzle dilemma. There's a lot of folks out there on social that there's a lot of sizzle. They, they've got the charisma or the energy or the whatever it is, and it's magical and whatever you, you want to believe what they say, right? Whether it's influencers or thought leaders or whatever. But you know, if I were to say sell David a ruler and the, the concept of the ruler is it measures 12 inches each and every time. But then you took it home and sometimes it, you know, 12 inches was kind of 9 inches and sometimes 14, I'm gonna be, you know, my reputation's gonna be hurt and that's not gonna work all that long. So I think there's a space in the thought leadership world for that entertainment, feel-good, motivational, pump it up, whatever. It's, it's kind of the, the Peloton burst or a dopamine hit, you know? That's right. But, but I think you're right that the hard work and the things that just take time, the, the, the, that, that are held to a research standard, an academic standard, et cetera. And then you build those other things on top of it. Not every, you know, Jonah Berger's a good example of an academic that has a little bit, I, I wouldn't say he's like off the charts charisma, but he's got enough of it to bring it to life. Yeah. You think about some of the rockstar academics and Adam Grant. I'd say good Christiansen as well. Michael, you know, there's some gravitas as well as presence.

Yes, exactly.

And I, you know, I remember today, but if, if a Clay Christiansen was coming out today, would his stuff work on social? And I think probably not, you know, because sometimes it takes more than 30 seconds to get a concept and that's okay.

Yeah. Yeah, exactly. But you know, and this, this could be, um, just sort of a personal preference. It's just been shaped by my own background, but I always have a lot of respect. You know, another one would be just a great guy, he's a good friend of mine, Kevin Keller up at Dartmouth, the Kotler and Keller textbook that Kevin came onto. I mean, Kevin is basically the guy that came up with the concept of brand equity in the '90s. And so that's, that's a really important practical idea. I mean, every company in the world thinks about that, but the underlying work that he did and what were the components of brand equity, how would one measure it? How would you, leverage it. So to me, I think it's actually a great discussion, but it's making me think about my own, you know, way of constructing this, but where it's the combination of it's accessible and it's understandable and implementable, but you know that it's kind of built on something pretty solid, you know, so you pick up Kevin's book and would help you audit your brand and figure out how to extend it if that was something that you wanted to do. But in doing that, you know that he did just didn't out of his brilliant head pull all this stuff out. That he spent, you know, 10 years doing serious research to get principles right. Yeah.

And you know, we, you know, you mentioned sort of the sharing of the New York Times articles. The 3 steps to lifetime success article is going to do better than here's the article that says you've got to work really hard and be the emperor. Which article is going to get shared more? You know, unfortunately, that's human nature, right? We're looking for the hack. We're looking for the easy way. We're looking for all that. And I think thought leadership, like everything else, you have to put in the reps, right? For it to be, for it to be true, for it to be valid. This has been fantastic. What would you say as, as we sort of start to land the plane here to someone that's out there today, that's where you might have been 15, 20 years ago, rising academic that's in the middle of things, thinking of going to the dark side.

What advice would you give? Potentially give. So my advice will be just to spend people— I would spend time with people who operate in the dark side, you know, go to some, uh, conferences that are industry conferences, you know, get involved in. So, you know, when I was an academic, I would go to, you know, the management science conferences. It was great, you see all your colleagues, but really interesting work being done, but it's all of a very academic type. Whereas if you go to, you know, like a retail conference, there's people who are actually in industry, or a startup conference, so you listen to other speakers. So I think just having breadth of interaction with people. Because when you're an academic, sometimes, Peter, and you know this as well as anyone, you know, you're in your bubble. Let's say you're at Harvard Business School. That's a very prestigious place. There's cool things happening, but there's actually a whole world outside that. You know what I mean?

What I think academics sometimes forget that is, is that they're fighting so hard to get that paper, that next paper that 9 people are going to read. 3 of them have the same last name.

Exactly.

No. Well, I think that's good advice. Well, appreciate your time. And I thank you.

Anytime, Peter.

Sharing time with us today, David. Thank you.

Likewise.

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