Another blanket article about the pros and cons of Direct to Consumer (D2C) isn’t needed, I know. By now, we all know the rules for how this model enters a market: its disruption fights any given sector’s established sales model, a fuzzy compromise is temporarily met, and the lean innovator always wins out in the end.

That’s exactly how it played out in the music industry when Apple and record companies created a digital storefront in iTunes to usher music sales into the online era. What now appears to have been a stopgap compromise, iTunes was the standard model for 5-6 years until consumers realized there was no point in purchasing and owning digital media when internet speeds increased and they could listen to it for free through a music streaming service.  In 2013, streaming models are the new music consumption standard. Netflix is nearly parallel in the film and TV world, though they’ve done a better job keeping it all under one roof. Apple mastered retail sales so well that the majority of Apple products, when bought in-person, are bought at an Apple store. That’s even more impressive when you consider how few Apple stores there are in the U.S. (253) compared to big box electronics stores that sell Apple products like Best Buy (1,100) Yet while some industries have implemented a D2C approach to great success, others haven’t even dipped a toe in the D2C pool, most notably the auto industry.

What got me thinking about this topic is the recent flurry of attention Tesla Motors has received for its D2C model. It all came to a head at the beginning of July when a petition on whitehouse.gov to allow Tesla to sell directly to consumers in all 50 states reached the 100,000 signatures required for administration comment. As you might imagine, many powerful car dealership owners armed with lobbyists have made a big stink about Elon Musk, Tesla’s CEO and Product Architect, choosing to sidestep the traditional supply chain and instead opting to sell directly to their customers through their website. These dealership owners say that they’re against the idea because they want to protect consumers, but the real motive is that they want to defend their right to exist (and who wouldn’t?). They essentially have a monopoly at their position in the sales process, and they want to keep it that way. More frightening for the dealerships is the possibility that once Tesla starts selling directly to consumers, so will the big three automakers, and they fear that would be the end of the road for their business. Interestingly enough, the big three flirted with the idea of D2C in the early 90’s before they were met with fierce backlash from dealerships. I’m sure the dealership community has no interest in mounting a fight like that again. 

To say that the laws preventing Tesla from selling online are peripherally relevant would be a compliment. By and large, the laws the dealerships point to fall under the umbrella of “Franchise Laws” that were put in place at the dawn of car sales to protect franchisees against manufacturers opening their own stores and undercutting the franchise that had invested so much to sell the manufacturer’s cars.  There’s certainly a need for those laws to exist, because no owner of a dealership selling Jeeps wants Chrysler to open their own dealership next door and sell them for substantially less. However, because Tesla is independently owned and isn’t currently selling their cars through any third party dealership, this law doesn’t really apply to them. Until their cars are sold through independent dealerships, they’re incapable of undercutting anyone by implementing D2C structure.

When it comes to running a start up, leaders need to make sure that their key players are motivated. This has been seen with many companies. Back in the 1970's it was found with the inspiration and diligence of the late Daniel Nigro when he formed Kleer-Fax. More recently it was seen in David Khasidy, the founder and recently retired president of SunRay Power Management, the most dynamic green energy leader in the US today.

The question is, what is it that great leaders like David Khasidy and Daniel Nigro do that make the difference? How do the most vulnerable companies (start ups) break the mold and become a part of our everyday lives?

It starts with their mission and vision.

Create a Strong Mission and Vision

There are many reasons why start ups fail. For one, they usually lack the capital to last through the lean times. Secondly, they often don't have the tolerance for setbacks that occur. Lastly, they do not have a long-term plan, also called a mission.

When a business has a strong mission, the team knows it and their focus toward their work and service to others within and without the company reflects that. To complement that, the shorter term vision of the company needs to be present as well.

This can even be seen in sole proprietorships with no employees, such as when Brian Pascale started his law practice. His vision was to find justice for his clients while his mission was to build upon a career that had already set precedents in the area of tort law.

As his practice has grown, new staff members can sense the vision and mission he exudes.

Encourage Ownership of Projects and Processes

Start ups need to inspire and motivate their employees because they need to know that they are not only a part of something important, but that their contributions mean something.

What won't happen if they are not there? What contribution do they make, and what are the consequences of them not fulfilling their part of the work?

By encouraging ownership in projects, team members can find that the work they are doing is not only important for the organization, but that they are going to be a big part of what makes it happen. The alternative is that they feel replaceable.

Offer Incentives That Keep the Company Competitive

When team members embrace the mission and vision of the company, and then take ownership for the company's success, they are going to need to be justly rewarded.

This could include flexible schedules (for those who don't need a stringent one), use of an account at a nearby takeout place, or even the potential for ownership as a result of a vesting program.

The incentive everyone is looking for more immediately, though, is cash. When the company takes in more revenue as a result of the efforts of those on the team, rewarding them can go a long way not only in making them feel appreciated, but in encouraging them to bring in more business.

Members of a start up team are usually very talented, and commonly underpaid. However, if they believe they are going somewhere, it will make a big difference.

Related:

Good non-programmer jobs for people with software developer experience

Anonymous reprint from Quora (career advice)

Occasionally we come across a unique profound perspective that makes one stop and really listen. The following advice is one such as this.

1. Small actions compound: Reputation, career trajectory, and how others perceive you in the workplace can come down to a handful of things/moments that seem inconsequential/small at the time but compound. Random Thought: Redwood trees come from small seeds and time. With every action you're planting small seeds and these seeds can grow into something bigger (sometimes unimaginably bigger) over time. Don't let small basic mistakes sabotage your reputation because it only takes a few small snafus for people to lose confidence/trust in your ability to do more important tasks. Trust is a fragile thing and the sooner people can trust you the faster they'll give you more responsibility. Some Examples: Being on time (always) or early (better); spending an extra 10-15 minutes reviewing your work and catching basic mistakes before your boss does; structuring your work so it's easy for others to understand and leverage (good structure/footnotes/formatting); taking on unpleasant schleps/tasks (volunteer for them; don't complain; do it even when there's no apparent benefit to you)  


2. Rising tide lifts all boats: Fact: You don't become CEO of a multi-billion dollar public company in your 30s based purely on ability/talent. Your career is a boat and it is at the mercy of tides. No matter how talented you are it's a lot harder to break out in a sluggish situation/hierarchy/economy than a go-go environment. Even if you're a superstar at Sluggish Co., your upside trajectory (more often than not) is fractional to what an average/below average employee achieves at Rocket Ship Co. There's a reason Eric Schmidt told Sheryl Sandberg to "Get on a Rocket Ship". I had colleagues accelerate their careers/income/title/responsibility simply because business demand was nose bleed high (go go economy) and they were at the right place at the right time to ride the wave. Contrast that to the 2008 bust where earnings/promotions/careers have been clamped down and people are thankful for having jobs let alone moving up. Yes talent still matters but I think people generally overweight individual talent and underweight economics when evaluating/explaining their career successes. Sheryl Sandberg Quote: When companies are growing quickly and they are having a lot of impact, careers take care of themselves. And when companies aren’t growing quickly or their missions don’t matter as much, that’s when stagnation and politics come in. If you’re offered a seat on a rocket ship, don’t ask what seat. Just get on.


3. Seek opportunities where the outcome is success or failure. Nothing in between! You don't become a star doing your job. You become a star making things happen. I was once told early in my career that you learn the most in 1) rapidly growing organizations or 2) failing organizations.  I've been in both kinds of situations and wholeheartedly agree. Repeat. Get on a rocket ship. It'll either blow up or put you in orbit. Either way you'll learn a ton in a short amount of time. Put another way; seek jobs where you can get 5-10 years of work experience in 1-2 years.


4. Career Tracks & Meritocracies don't exist: Your career is not a linear, clearly defined trajectory.  It will be messy and will move more like a step function.


5. You will probably have champions and detractors on day 1: One interesting byproduct of the recruiting & hiring process of most organizations is it can create champions & detractors before you even start the job. Some folks might not like how you were brought into the organization (they might have even protested your hiring) and gun for you at every turn while others will give you the benefit of the doubt (even when you don't deserve one) because they stuck their neck out to hire you. We're all susceptible to these biases and few people truly evaluate/treat folks on a blank slate.


6. You'll only be known for a few things. Make those labels count: People rely on labels as quick filters. Keep this in mind when you pick an industry/company/job role/school because it can serve as an anchor or elevator in the future. It's unfortunate but that's the way it is. You should always be aware of what your "labels" are.


7. Nurture & protect your network and your network will nurture & protect you: Pay it forward and help people. Your network will be one of the biggest drivers of your success.