Start Up Blog

Super insights

Posted in entrepreneurship by Steve Sammartino on December 28, 2009

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.

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4 Responses

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  1. Sam Granleese said, on December 28, 2009 at 9:11 pm

    Hi Steve

    I agree that spreadsheets can be a big distraction for entrepreneurs. However, it would also be foolish to ignore cashflow which is equally important as customer/client service or managing operations.

    There was a good article in The New Republic by Noam Scheiber last week that went further – saying America’s (and probably many of Australia’s) business schools are geared too far towards finance and not as much on operations. This is hurting startups and driving manufacturing offshore, as management do not understand how to improve or innovate their businesses, but focus too much on capital, and financial engineering — I highly recommend reading it: http://www.tnr.com/article/economy/wagoner-henderson

    Cheers,

    SG

    PS Looking forward to hearing your thoughts on Superfreakonomics.. I read an excerpt in The Australian a few weeks ago and it sounds like another good read.

    • Steve Sammartino said, on December 28, 2009 at 9:28 pm

      Sam, I’ll check out the link – thanks for sharing that. For sure, operations matter. In fact I think understanding operations, which I usually call ‘project management’ is maybe even the core entrepreneurial skill.

      I also agree with the comment about cashflow – which is essentially what I was referring to with money in and money out. That’s the number that matters. So far Super Freakonomics is just as good as the first.

      Great, thoughtful comment.
      Chat soon,
      Steve.

  2. Chris Schwarz said, on January 2, 2010 at 8:43 am

    Hi,

    I tend to disagree, I think maths is everything in marketing – especially online marketing. I understand there’s an element of the arts especially in marketing creativity, but fundamentally it’s a very numbers based game.

    I have recently come from an engineering background into a marketing role and it’s incredible how much high powered maths can be used to model the market, the business and the marketing campaigns.

    Ill listen to your insights about human behaviour and entrepreneurship though, it’s an element that’s not quite that strong in my skill set.

    • Steve Sammartino said, on January 2, 2010 at 11:21 am

      There’s no doubt our history, experience and education shape our beliefs and focus area. I’m not saying numbers not important. I’m saying behaviour is what should determine strategy…. the calculations of what to invest where and how often…. the numbers stuff comes second in my strategic thinking, but we all get there in our own way.
      Steve.


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