Kraft needs lesson in ‘Crowd Sourcing’
The bungled Kraft Vegemite iSnack 2.0 comes down to a really simple problem. Something they (Kraft) do all the time, and I should know, I used to work there.
They can never seem to fully embrace new ideas in their entirety. They want to innovate, but leave the final decisions to senior management. They tend ignore research, or take snippets from consumers. They only ever go half way.
Latest news is that they are changing the name – your jar might be a collectors item in 10 years!
What Kraft should’ve done:
Not ask for ideas to chose from, but let the crowd choose and vote – like Digg! It’s crowd sourcing 101. If you want an opinion from the crowd, then you’ve got to let them decide too. That way you have them ‘on your side’. To choose a brand name for 48,000 is as pointless as letting a very uncool CEO decide. Which is ultimately what they did.
Startup blog says: Embrace the crowd entirely, or don’t bother engaging them.
Risk Taking
As an entrepreneur I’m not afraid of ‘considered’ financial risk. Just like any Plumber or Electrician would guarantee their workmanship, we must provide a satisfaction guarantee. It’s a great way to reduce purchase barriers. Something most successful brands do…. here’s a little exercise for you: Next time you a buy a household cleaning product or chocolate bar, flip it over and read the fine print and *bang* you’ll see a money back satisfaction guarantee. We must provide that too.
I’ve also done this on my latest little project Startup School. Here’s a recent conversation I had with my wife over email:
ME: Hey check out my Startup School receipt – pretty cool huh? (below is a part screen grab of said receipt)
Wife: As a law graduate of course, I would nervous about making guarantees but up to you… Like the poetry!
Me: One must embrace risk in entrepreneurial fields and guarantee work, or revenue wont happen. it’s that simple. It’s a risk I’m prepared to take.
Wife: I know….that’s why YOU’RE the entrepreneur!
Web Business Valuation 101
A great spoof by the crew at 37 Signals which really says it all:
Here’s the start of the blog entry to whet your appetite:
CHICAGO—September 24, 2009—37signals is now a $100 billion dollar company, according to a group of investors who have agreed to purchase 0.000000001% of the company in exchange for $1…..
…
….In order to increase the value of the company, 37signals has decided to stop generating revenues. “When it comes to valuation, making money is a real obstacle. Our profitability has been a real drag on our valuation,” said Mr. Fried. “Once you have profits, it’s impossible to just make stuff up. That’s why we’re switching to a ‘freeconomics’ model. We’ll give away everything for free and let the market speculate about how much money we could make if we wanted to make money. That way, the sky’s the limit!”….
Startup School this November
If you’re planning a Corporate Escape or are an early stage entrepreneur. Then 2 day event I’m running is an investment worth considering. For a very simple reason: It’ll save you many thousands by not having to make all the mistakes I did before I got it right.
What stuff are we covering?
Content taught includes:
- Idea generation
- Idea validation
- Art of bootstrapping
- Setup costs / legal Tips & tricks
- Project / Cash flow management
- Outsourcing ( digital & production)
- Raising capital
- PR – Getting on TV, radio and in newspapers (all of which I’ve done before – see www.rentoid.com/about and scroll down)
- Social media tools
- Staffing & handling the growth curve.
All of which will be interactive – and busts the myths of success. You wont read the truth about this stuff in books because the truth isn’t shiny and doesn’t sell. All 10 alumni graduates get me as an on going mentor to help them startup and success like I have with www.rentoid.com.
It also includes food & drink for 2 days. It is $998 for the 2 days. It’s not cheap – bit it’s the real deal. A worthy investment with a money back guarantee to blow your mind.
If you think it’s expensive – then think about this:
- How much is 17 minutes of prime time ‘in program’ TV coverage worth? More than $500,000. I’ve done it and startup school will teach you how.
- How much is full page spreads worth in National Newspapers & magazine worth?
- How much did your last website cost to build? I built www.startupschool.com.au for $220 and I’m not a tech person, designer or a coder.
- How valuable is knowing how to raise Angel and Venture Capital? Or even know the right people?
- What about in market validation without the actual expense of launching?
The point is your investment will pay for itself many times over.
It’ll be running In Sydney and Melbourne for 10 people only. It’s pretty much a one off event. So if you want to come book or seat at www.startupschool.com.au or feel free to give me a call {0438 779 566} for more info. Be quick it’s limited to 10 people only.
Steve
Unlearning & decorporatisation of self
Another interview I did with Fiona Boyd the uber successful on-line entrepreneur who built and sold www.artshub.com.au about ‘Unlearning’. A concept which we need to embrace when leaving the corporate world to start up land. Enjoy.
Fiona has a great site with interviews and ideas on niche content. www.nichecontentmillionaire.com The title says it all – and she’s done it. Check it out.
Steve.
Selling – breaking down barriers
I’ve been out selling rentoid to major Australian rental companies and I’ve come to the following conclusion:
In personal selling being liked is more important than our product, price or offer.
Unless they like us, we wont really get the chance to explain the benefits of doing business with us. We might be saying it, telling them all the good reasons why we should be doing business, but they a probably not really listening.
What I’ve been doing is looking for relationship links. Things which we have in common. I know it sounds quite obvious, but when we have something in common we are essentially paying them a subtle compliment. We are saying “Oh, me too, your smart, you have good taste.”
Here’s some of the simple things of been using to find said common ground:
- Geography – Living in the same area, having an office close to theirs. People like dealing with locals. Geagraphy matters.
- Sport – Footy finals, if I see an interest in football or see some physical evidence then I get straight into it.( a bit blokey this one, but it works a treat)
- Industry Love – if we show you really care about the industry they are making their living from it’s a good thing. It means we are supporting what puts bread on their table. They like us if our objective is the help the industry we are both working in grow.
There is physical evidence all around us in sales calls from which we can find a link to develop a micro yet ‘instant relationship’. We just need to be perceptive while we are out there. It isn’t about being deceptive either. We’ve got to find a common interest. Something we actually believe. If we fake it they’ll smell it and we’ll blow the sale.
Why cash flow matters
Here’s a simple description of why cash flow is the most important financial measurement in business.
Cashflow positive means: More ‘actual’ cash money is coming in than is going out. It does not mean revenue exceeds expenditure.
Hence:
It’s impossible to go broke while your business is cash flow positive.
It’s possible to broke while your business is making a profit.
This is the most important financial fact startups must know and understand.
Micro Fame
Recognition of effort is an important to the human psyche. We actually don’t like money as much as society would have us think. We what like is the recognition that people believe money buys. In this sense the human brain of the ‘uber consumer’ breaks it down a little like this:
I want to be recognised as a worthy
I want people to know I have achieved
If achieve I will be rewarded with payment in the form of money
People can’t see my bank account and wont know how successful I am (my self worth)
So I’ll buy things with my money which are on public display (car, house, holidays, clothes)
People will know these things require lots of money
People will know I have earned lots of money
Only people who are successful at ‘something / anything’ get lots of money
I can be happy that people will know ‘I am somebody’.
I am a worthy person
Then there’s people who know all this but take the short cut and just buy stuff they can’t afford on credit cards to define their success through consumption.
Smart startupss can use this human pshyche to their advantage as well. Rather than the success, money consumption trail, they can provide something much more immediate and altruistic. They share reconigition. The reward and promote their people as part of the success process. They provide micro fame.
This can be done is so many simple ways. Ways which rarely have a large financial burden on either party, but create a union between the two players for mutual benefit. Stuff not limited to but including:
- Member ratings
- Access to exclusive services, parties, insider events.
- Recognition in digital and print media
- Crowd sourcing & revenue sharing of such User Generated Content
- View counts
- Followers / friends / subscribers
- Most forms of social quantification
- Overt branding which has ‘user personlilty rub off’
So the question then begs:
What sort of Micro Fame is your startup or business providing its people?
Startup School
I’ll be running a one time Startup School event in Melbourne and Sydney. During November. It’s a 2 day weekend course for a maximum of 10 people.
It wont be free like the blog – but it has a money back guarantee to blow your mind:
Details to follow soon, but it will also include on going personal mentoring for Alumni & other benefits.
I expect seats to go quick – there’s only 10, and if you register your interest as a Startup blog reader you’ll be first in line and have priority to attend.
To register send me your details directly via email (which is in the side bar to your right) – please let me know if your registering for Sydney or Melbourne.
Steve.
We need each other
I used to think my skills base limited the areas of business I could play in. I remember thinking back to the dot com boom in the mid and late 1990′s wishing and dreaming that I could some how be involved in the excitement, the fervor, and yes, maybe even the money. But I wasn’t a programmer, a digital designer or media player or a venture capitalist. I was merely a marketing manager trapped in the industrial complex of consumer goods. The bust came and I was quietly happy that peoples paper fortunes and egos got busted too. Which in hindsight was not a nice way to think. It was built on jealously, lack of knowledge and immaturity on my behalf.
Since then I’ve learned this: The type of skills we have matters far less than the fact we have a skill set which is valuable.
Translation: We don’t need to be a technology gurus to be operating or starting up in the technology space.
Maybe we are good at sales, marketing, raising capital, managing and motivating a team, project management, accounting. All of these skills will be needed in whatever business we start or are involved in. What matters is that we can add value in the chain somewhere which takes us from idea to revenue. Where we sit in that chain isn’t as important as we think. What really matters is being able to create the value chain.
It’s a rare combination indeed for a person to have tech genius and business brilliance. Fact is we need each other. We couldn’t have succeeded at rentoid without the business heads or techies collaborating. I wish I’d known this 10 years ago.
Sure it can be an advantage to startup in an area where we have expertise. It can be an incredible way to keep our costs low. But it’s not necessarily a barrier to entry. If we want to success, we’ll have to build a team in any case. And building a revenue infrastructure is what we ought be focusing on as entrepreneurs.
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