Super insights
You’d be forgiven for thinking marketing is a numbers game if you have worked as a marketer any time in the past 10 years. The advent of the spreadsheet has severely messed up what people think business is about. It’s an attempt to add science to what is essentially an art form, sure all arts have an element of science, but numbers are a much smaller part of what matters than what people think.
Financiers, economists and marketers feel like the poor cousins of actual scientists. They feel this way because what they do is seen as softer and assumption based. So the natural ego response is to add science to what they do. They add this science (in the form of spreadsheets) to cover their asses, justify their decisions and sometimes even justify their existence. In fact, it’s this assumption based number crunching and spreadsheet marketing which lead us the the GFC.
For startups there are only two numbers that matter. Money in and money out. Any other spreadsheet generated number is there to make you feel good about yourself and or help you avoid doing the actual hard stuff which might bring in more money, like building something, or selling the stuff you’ve already built.
If you want to be a good entrepreneur choose understanding human behavior over number crunching as your core competency. Human behavior is what it is all about. When we understand this can we do stuff that creates profitable numbers.
I’ve recently been reading SuperFreakonomics. It is full of tasty unexpected insights which teaches us more about human behavior, just like the first book. Every marketer and entrepreneur should read this. Not only is it incredibly entertaining, it takes us further down the track of being the behaviorist we must be. Read it.
beware of averages
If we added up all the men, and all the women on our planet, we’d find that, on average, the typical adult human being had exactly one breast and one testicle. Yet how many people actually fit that description?
Statistics are used the create meaning. Yet, very often they create the opposite. In a world for of numbers, statistics and analytics (yes, even the Google kind) we are better off deciding what we want to find out, than we are looking at the available statistics and asking what they mean.
Startup Blog says: First decide what you want to find out, then devise a way to measure it.
Be needed
Our job as entrepreneurs is really to build a business in which people depend on. The best we can possibly hope for is having a group of people at both ends of the value chain who really need us. Not just customers, but suppliers as well.
Suppliers who need us to succeed so they can feed off our success. Customers who need our stuff to get through their months, weeks or days. When we are needed, we are on our way to have a solid business.
Do your people in your supply chain need you to exist?
Coffee isn’t coffee
Coffee isn’t coffee.
Coffee is social facilitation
Coffee is a distraction
Coffee is a ritual
Coffee is a reason to meet
Coffee is micro generosity
Coffee is time out
Coffee is a representation of personality and economic status.
Coffee is very rarely a beverage which is a mild stimulous, or thirst quencher. More often it’s one of the ideas above. With this in mind what other categories are waiting to be reinvented to form part of the social structure. As humans we are social creatures, and every now and again a marketing campaign emerges around some form of product which builds in our genetic social dynamic, and when this happens, the category and business is changed forever. The good news for entrepreneurs is that it’s usually the domain of a startup, not an all powerful incumbent.
Pricing & relativity
While reading SamsMojo earlier this week I was surprised to learn the prices of the top 10 selling iphone apps for 2009. In fact, the price for the top seller was more than 10 times what I expected at $99 – The TomTom navigator app. Not the $3 we’d get as a response if we asked a random sample of people.
Sure, it’s a high price as far as iphone apps go, but it much cheaper than a $500 TomTom. The point for startup is this. There is no such thing as expensive. There is only expensive in relation to the set of relevant substitutes. And when we are pricing our brand or startup all pricing decision need to be made relative to the alternatives.
Your friends & family don’t care
Seriously, your friends and family don’t care about your startup. They don’t have to. Sure they might pretend to care, but mostly they’ll wish you luck and get on with their lives.
Of all of my family members, only one has ever listed an item for rent on my website rentoid.com At first this surprised me. I thought that having a very broad target audience, they’d like it and get involved. They didn’t. So why we feel the need to seed our new startup with family and friends is beyond me. It’s really a waste of time. If they don’t like what we do, we’ll be offended. If they don’t buy what we sell, we’ll be offended. The feedback is less like to be honest than from a stranger. And most of all we are not going to get rich selling to our family and friends.
Startup blog advice is this: Go direct to your real market. Family and friends rarely, if ever, hold they key to startup success. So why delay the start of said success by launching to them?
The art of innovation leadership
I was speaking with my brother today when he nailed the topic of innovation leadership in a few words.
He said; You can’t ask the market what they want, you need to invent it, build it and tell them why the future as you conceive it is better.
I really liked his sentiments.
Incentives
Financial incentives are only useful insofar as they help people fulfill their physical and emotional needs.
Great marketers and entrepreneurs are able to circumvent the financial bridge and help people with these deep seeded human needs directly.
Ben & Jerry’s nice quotes
I recently had the pleasure of Ben & Jerry attending my the hallowed halls of my sometime employer Melbourne University. It really was something special, with great insight for startups. Guys who not only get it, but do it. here’s some quotes from the two ice-cream headache regulars during their talk. I can’t remember who said which bit, but I guess it doesn’t matter, and I’m sure they won’t mind.
Cool stuff they said:
Unilever bought Ben & Jerry’s and Slimfast in the same year.
Ben is a dropout from 5 Universities.
They wanted to make ice-cream. So they both did an ice-cream making course.
They chose a market with no competitors, over a market with warm weather.
They didn’t know how to write a business plan. So they copied a plan from a pizza palour and exchanged the word pizza for ice-cream in the plan.
Their first store was in an old abandoned gas station.
They bought used equipment.
The got through their first winter by selling to local restaurants.
Ben had the idea to start selling packaged ice cream in winter. He bought an old truck and manned it himself. Selling mainly to distributors and mum and pop stores. he got 30 accounts in one month.
The flaw in their business model created the packaged ice cream opportunity
They had push back from Pillsbury who sold Haagan Das for distributors to not stock Ben & Jerry’s. So they started their famous underground gorilla marketing campaign ‘What’s the Dough boy afraid of?’
They even ran a ‘What’s the dough boy afraid of’ advertisement in Rolling Stone magazine.
They put a toll free number on the pack for a free Doughboy marketing kit to gain support. In it included a letter to Pillsbury titled – Pick on someone your own size, a t-shirt and and bumper sticker. The media picked it up and eventually Pillsbury backed down.
Eventually they realised they weren’t ice cream guys, but business guys, and they had to change.
So they did an equity offer just in the state of Vermont. The net result was 1 in 100 local families took stock ownership in the company.
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