The truth about small fish

When starting out or chasing new customers on an existing business it makes sense aim for smaller players first, to build confidence, and get a few small wins on the board…. right?

The problem with thinking like this is that it makes life harder and less profitable.

The truth about small fish, is that they are harder to catch than big fish. They’re more elusive than the big guys and are often much harder to convince to invest their money in whatever we are selling. With the small fish the decision is often about whether they should invest their money or not. The advantage of the big fish, is that the investment funds are usually allocated, it’s more a question of doing business with company A or company B. From a  revenue perspective it’s far wiser investment of time to court a customer whose decisions to invest are already made.  A $10,000 customer is harder to get than a $1,000,000 one.

The other factor worth considering is our reputation. If we become successful selling to the small players, we’ll be seen as a small solution provider.  But if we land a big one it gives us a license to knock on other big doors. When the investment is time, its worth chasing the bigger reward, and the truth is that it’s often an easier sell job.

The infrastructure disadvantage

I was really excited to read about the new Eday hatch electric car which will be launched in 2012. It’s very cool for a few reasons including: It’s price is under $10,000. It’s an Australian startup. They are IT focused, not automotive focused. All the major functions are controlled electronically. It’s also the first eco / electric car option which isn’t priced at a premium, so it’s a total game changer.

What I find most interesting in the article is the advantage of zero infrastructure. When industries go through significant change as the automotive industry is, existing infrastructure can be a major disadvantage. Not only can it define how things should be made, but it also has the added burden of it needing to be supported financially. It demands asset utilisation and so limits the potential for a real change in product output.

The only way to innovate in an industry is to re-imagine the best way to build something from scratch. To ignore what we know about the incumbent mode of operation and create a new one. It is examples like the Eday that should inspire entrepreneurs to believe that that no company or industry is all powerful.

Visual Orgy – Retail

This is an amazing piece of creative work from H&M at a new retail store launch in Amsterdam. Check it out below.

The same theme shines through again. Creativity wins. The production costs are clearly much less that the creative input. I wonder what other startup brands could use the visual projection idea to make something worth sharing on the web?

The great price divide

We are currently seeing a massive shift in pricing in many consumer markets. Anecdotally it feels as though product and service categories which typically operated in the middle of the market are either being pushed either into a premium pricing space, or into heavy price competition.

And so what is emerging are two larger markets of pricing extremes. Some categories which one would expect prices to rise, such as air travel with rising fuel infrastructure costs, prices are actually falling. And categories where we’d expect to see prices to decline (ice cream) we are witnessing inflation. Granted much of the premium pricing that is occuring is caused by consumers upgrading and the move to gourmet versions of the product. But the fact remains that consumers are gravitating to markets of extremes.

In order to illustrate:

Deflationary items: Air travel, hotel rooms, computers, internet access, computer programming, digital design, televisions.

While on the inflationary side we have the gourmification (if you can call it that) of products and services where people are paying an ultra premium for bottled water, gourmet ice cream, gourmet yoghurt, gourmet coffee, spa treatments et al…

The implications for startups are many. But the primary consideration should be how this paradigm influences which categories we want to get into, and which ones we believe there is an opportunity to shake up at launching in one end of the pricing extreme.

Satisfaction is not enough

Satisfaction is boring.

Satisfaction is forgettable.

Satisfaction is corporate yester-world.

Satisfaction is cost focused.

Satisfaction in short, says that we aim for the minimum viable product that people will find acceptable. Satisfaction was a valid strategy when our knowledge of the available options was limited to what we would see in our local geography and what we were told in main stream media. Satisfaction was a valid strategy when we operated in oligopoly markets with homogenius consumers.

Satisfaction is not enough when we market to tribes of people (not consumers) who like to spread the awesome things they find in a fully supplied, fragmented market place.

Startups which aim for satisfied customers, are living in an era which is quickly evaporating. Instead we must aim for inspired evangelists.

Brand voices are now a collective

You Can’t Control Social Media
Marketers and advertisers alike are largely aligned when it comes to their views on social media. We all know how to use it, and why it can be so valuable to brands. But there is one area which is most often the area of heated debate,
and that is this:

Can we really control the output of our social media?

It’s clear what big brands want – A single voice to represent the brand personality. On the surface this sounds reasonable, even rational, but the more I think about it I really believe it goes against what it is all about and here’s why:

The voice of a brand is the collective actions of all of its representatives.

Not the CEO, the Marketing Director or the advertising they put in the market. Just ask anyone about their opinion of banks in Australia. It has nothing to do with the voice banks project, and more to do with the customer interactions. The voice is what the people hear and experience on a personal level, not what the brand stewards say. Social media can’t be controlled. So why try? There is nothing worse than limiting the voice of your people. They will talk anyway. They’ll share links, write about your brand and talk about it on line and off. They will have real interactions with customers, and if what the authorised voice says (brand marketers and advertisers) doesn’t match the reality of the brand in action, then it all sounds contrived and is useless anyway. It’s more likely to have meaning and be authentic if it is the word of the people, not the King. So let your people participate. All brand managers should run twitter accounts for their brand, giving updates on what they are planning and doing, a sub-communications strategy of sorts.

Create culture, don’t control output.

It’s an errant assumption to believe we know better than our front line employees do. It’s just not the case. What we need to do is educate our people in various levels of the business on what we want to be as a brand, the persona. We need to give them some guidance boundaries within which they can play, and some no go zones, and then let them represent us, make mistakes and be human. People love dealing with companies who have a human voice and mistakes are part of the human experience.

Trust creates value.

I find it curious that companies trust their employees with the keys to the building and the cash register and not their voices. It’s best to approach it like a parent does with a teenager. Give a bit, let them prove themselves and then loosen the lead a bit more. Trusted people usually over deliver to expectations. People who are shut out and mistrusted often act in the opposite way to what we desire. In a social media context we need to trust the average human outcome, rather than block all for fear of a single bad outcome. But again, this is where the boundaries come into play.  There needs to be augmented boundaries with clear repercussions for those who step outside of them.

The key point for brand marketers and entrepreneurs is this: if you want a controlled voice, then social media isn’t the right vehicle for a brand. More traditional media would be more suitable. The word social is the giveaway here, because social implies conversation, not lecturing or monologue. If we really want to create social brand value then all voices in the social value chain need to be heard.

This article was written for the Eye on Australia research program.

We don’t have to create

Recently I was helping a colleague who works in the design area. We were discussing the merits of blogs, photo sharing and other social forums which can be used well for business purposes. Although he’s not a luddite, he is not so keep on self promoting. He tends to let his work do his talking, rather than lead people to his own output. When I suggested he get busy with a a design blog or twitter account, he was hesitant.

I told him that some of my favourite blogs and tweeters aren’t the domains of original content, but finding and directing me to the great stuff that I am interested in. They become become a personal curator for me. And althought we might think that this is all very altruistic, there are benefits for the so called ‘curators’ too. What they share says a lot about who they are. What they value. Their taste in things and their industry knowledge and experience. It can show they really get it. The point is this:

Showing what we value often translates into what we are capable of. Displaying what we have already done, may only display the limited opportunities we’ve had so far. When collaborating in industry we should be far more concerned what people can do, that what they did do.

Startup Blog says: The social web no longer just requires content creators, but content curators.

Decalology

The simple idea of displaying support is important. It says who we are, what we value and very importantly why we are different and or better. It plays to the ego. This occurs in all facets of life, real and digital. If  your brand represents a movement or counter culture, then it only makes sense that we give our audience some tools to celebrate it publicly.

A simple idea for cool startups is to distribute stickers. Not just any crappy old sticker, but one that is awesome in design, and limited in distribution. They can’t be bought, but need to be earned – the free prize inside.  Over the last 30 years many brands have used stickers as a tool to promote themselves. The two best industry examples are in the fashion and social space. Here’s a visual collage of examples.

Before you hit the print button on getting some logo stickers done up – make sure it fits the brand. There’s some good clues above from a design and brand proposition perspetive for those who it could work for. It’s also vital that the stickers are high quality – and not a boring block. There has got to be a level of cache. It can be a cool way to promote your startup, but remember Decalology only works when bone fide members of the tribe can access them.

A Collaboration Conversation

Rachel Botsman is in town this week as part of Melbourne Knowledge Week but more importantly to spread the good word on her book on the new world order of Collaborative Consumption – What’s mine is yours. Rachel contends that the 20th century was all about Hyper Consumption, while the 21st century will be all about collaborative consumption – and I couldn’t agree more!

In order to bring the uninitiated up to speed we are having a Collaborative Conversation with founders of collaborative businesses. This will include Daniel Noble of Drive my Car, Julliette Anich of the Clothing Exchange and myself – rentoid.com

I really think it will be a great evening with lots of fresh ideas, because to be quite honest the collaborative economy is only really starting. At the end of the forum there will be a Pop Up Swap where anyone can bring up to 6 items to swap with anyone else – so we’ll be crossing the virtual sharing chasm into the physical one.

Click here to get a ticket - and come up and say hello.

Steve.

A Tiny Twist

Today I sent this tweet which got quite a bit of comment:

There were over 400 video sharing websites when Youtube launched. Often it’s smarter to do it better, than build something new.

Immediately after the tweets started coming through about other businesses which entered the market late and taken a strong hold’.

The most recent example for me is Instagr.am

It’s ‘another’ photo sharing platform to add to the long list of mobile apps for doing just this, including but certainly not limited to Flickr, Twitpic, Yfrog, img.ly, Mobypicture…. I’m sure there are hundreds.

Next thing I knew all the photos being shared on my tweet stream had all converted to the Instagr.am format – so I had check it out. Turns out Instagr.am added a tiny twist which enabled it get busy with the ‘in’ crowd. By simply adding a filter feature, it made  photo sharing a whole lot more fun.  What filter does is transform the pic and stylise the look to give a retro feel, add few scratches and a white Polaroid frame and you’ve got the hottest new pic app on the entire web. It’s easy to use, and once again photo sharing has been reinvented.

So what’s the lesson here?

Design matters. In fact design is the thing that wins in the long run. Humans like things of beauty. It is coded in our DNA, we prefer the beautiful. Side note: beautiful is both usable and and nice to look at, it must have both.

Existing Market. Sometimes it’s easier to build a better version of something people are using, than to invent a new market. We don’t have to invest time convincing people it is worth participating. Rather, we just need to show them why we are superior. In an industry like we apps where the switching barriers are so low usability and design are often the catalysts for this to occur.

The question for startups is this: How do we sustain a leadership position against the next tiny twist?