Start Up Blog

Arrogance = your opportunity

I bought this reasonably cool pair of board shorts for surfing this summer.

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They cost me a whopping $80. Which is what I call ‘insult pricing’. It’s a pretty simple equation actually. The key players in the surfwear industry (Billabong, Quiksilver and Ripcurl) charge these prices because they can. They don’t have any ‘credible competitors’ in this board short subsegment of clothing.

In recent years surf brands have been hit by many competitors in other areas of the market which they used to ‘own’. Especially in t-shirts, from the myriad of streetwear companies, to the uber cool on-line players like Neighborhoodies and Threadless. Interestingly the shorts in this photo would cost >$5 to make. There is significant margin in the product. Such high margins often begets competitive entry into the market place.

The arrogance of said surf brands has invented an opportunity for a nimble entrepreneur to steal part of this market. And the way to do it is exactly the way Threadless have. Go online and build a community to design the uber cool boardshorts / shorts and sell them globally at a fair price. In fact, surf wear is so clichéd and over branded these days that I avoid wearing it. Most of the designs are very rank and have really lost their edge. I only use surf brands for surf equipment. The only reason I bought the pair in the photo is ‘lack of options’.

If anyone knows some one already doing it – let me know
If anyone wants to do it – let me know as well. I think it’s worth ‘investing in’.

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Competitors

Competition is eternally existential. We compete for love, money, attention, fame, wealth, recognition, and sometimes, we even compete for food. Turns out humans aren’t the only species who must to compete to survive. All living things must do it. Even trees in a deep forest compete for sunlight by growing as quickly as possible forgoing width for height.

What I find most interesting about competition is how we or any being chooses to do it. When a competitor catches us unaware, they usually achieve this through  using some form of subterfuge. Like growing in a smaller segment of the market. Focusing on a neglected geography. And the really smart competitors disguise what they are doing so you don’t even see them coming. A little like Google has done to Microsoft who was overly focused on the ‘desktop’, while the world was moving to web app’s and gathering and storing of information externally.

I noticed this phenomenon first hand recently. My business was moving along swimmingly (which in this case is my tomato plantation). As you can see from the photo below. My Roma’s looked healthy and almost ready for the picking:

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But upon closer inspection a competitor had been eating away at my market for quite a long time without me noticing. Once I turned around the tomato to inspect the back side of them – I was devastated to find my competition. They caught me napping and had a very big impact on my market share. As can be seen here:

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How did they manage this?

  • The caterpillar was smart enough to attack on the reverse side out of view.
  • His color is exactly the same as the tomato proving an excellent camouflage.
  • He waited till the market was already developed (by me) and the tomatoes had a reasonable size and were worth attacking – in this case risking his life over!
  • In true terrorist fashion he penetrated the market at one entry point and ate it inside out. That is, the caterpillar was so deep inside the market, he was completely out of view.

None of this was by mistake. It has been driven by millennia of evolutionary survival and subsequent genetic coding. Nature is smart.

The implications for startups are many. When we start out to compete, the best thing we can do is replicate what nature does. Stay out of harms way. Stay small and unseen. Try and gain some momentum and size. If we’re lucky will have built our share of the market and be ensconced before anyone notices.

(FYI – I picked the tomatoes, and placed them in another location of the garden to let the caterpillars fight another day – they may just leave some seeds which will flourish next season!)

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Tell your story – ‘Quickly’

People are very time poor, or maybe just a little impatient. Regardless of which it is we have to be able to tell our story quickly.

Vanguard Investments do it in 2 seconds. Click here to see how they do it. (Watch the animation)

Even this chart below tells the story on long term ‘index’ investing. Of which Vanguard are the founding forefathers.

vanguard-story

The recent downturn is a best a ‘blip’.

How long does your startup story take to tell? Here’s a tip – we’ve got a few seconds at most.

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People Watching

If you’re an entrepreneur and you’ve never been ‘people watching’, then start up blog strongly recommends a session. For a lot of reasons it’s a cool thing all entrepreneurs should do. For one, all our revered entrepreneurs are champion trend spotters. And they spot these trends a long time before they are reported in the Sunday newspaper lift outs.

What’s next?

Go some where busy, go somewhere where there are zillions of transactions, go somewhere sans commerce, go where families hang out, go somewhere singles hangout, look for the subgroups, watch people looking at shelves in stores – guess their decision process, see if this process is the same for all or different for all, see what they wear, see how they move, how did they get there, where are they from, bring a notepad with you and write down ideas, go places you’ve never been before…. Watch people, guess their motivations, view their life in action and then we’ll be the ones gaining life experience…. Just go and watch.

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The funny thing about our world is that we are all in it every day, but very few of us are actually paying any attention to it. Step off the stage and become the director. Make it a habit to pay attention to what is going on in our world.

As entrepreneurs and marketers we are lucky. We can do our homework everywhere we go, and our start ups are the key beneficiaries.

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Revenue

One of our jobs in business is this:

“Make it as easy as possible for people to give us their money”

It’s already hard enough to convince people to buy our product or service, so why some businesses minimize payment options is beyond me.

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photo by Mike Monteiro

Cash only, just doesn’t cut it these days. Regardless if we are on line, business to business or in retail, minimizing the payment options has this simple repercussion: It minimizes revenue.

Live example is a café in Melbourne called ‘Journal’. I had a company breakfast there and they wouldn’t accept my credit card. They even had the audacity to say ‘Who doesn’t carry cash on them?’ Answer: plenty of people. That’s fine. I’m never going there again and they missed out on around $100 this week.

Startups ought make it easy to collect revenue.

Steve – founder rentoid.com

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Theatre & customization – Active feet

I was recently enthralled by the in store theatre of local Melbourne sports shoe retailer Active Feet. In fact it was much more than theatre. It was service, theatre and attitude. The store is owned and run by podiatrists.

We walked in the store and the first thing the store assistant did was introduce himself, and ask if we’d been in the store before. When we gave the ‘yes’ response and name, he asked to be excused for a few moments and went out the back to check the computer. Upon his return the assistant asked how the flat feet were going, how the particular joggers purchased worked out, and even how boot camp was going. It wasn’t contrived, but I could sense in the tone of voice and body language that this guy cared. I could sense it. All humans can, we can sense people who are faking it.

After this we moved onto the walking machine to assess the feet with some pretty impressive podiatry tools. He then went onto recommend some shoes to try based on the treadmill assessment and a mutual discussion. All of which can be seen in some action shots below.

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How many companies have things like databases and valuable customer information that just sits on a computer somewhere and never gets reviewed, let alone used to great value for a returning customer.

Startup lesson: If we are going to collect information for our customers, then maybe we should use it, and not only use it but customize it.

Oh, we bought the shoes there.

Steve – founder rentoid.com

The Wingman & advertising awards

The following is a true story as told by Ender Baskin:

 A few mates went out for some beers at a local bar. They were young, vibrant guys who where looking to meet some girls. Fine. One of the guys had a very cool t-shirt which said the following:

 “Don’t get too excited I’m just the wingman.”

 The group of boys all loved it. They thought it was very cool, awesome in fact. They were certain it could only enhance his changes of meeting a girl on said night.

 As expected people ‘did’ love it. They all came up and remarked on how funny, cool and smart the t-shirt was. Only problem was, it was all the blokes who happened to remark upon it.

This parable is a a little bit like the type of advertising that wins awards. The producers and colleagues in the industry love it. Yet award winning advertisements don’t always sell the product. Cool and funny is great, often a nice bonus when communicating with our people. But if the basic objective isn’t met, we’re better off with something less cool that actually works.

Chief Mojo Officer

Chatting with Chris Mander from docolo.com and he came up with an awesome idea – which every business should have.

The Chief Mojo Officer, or the CMO.

Sure, I asked him what they did and here’s what he told me: (with some embellishment)

“Firstly you have to believe in mojo. If you don’t believe in mojo, then forget it. If you do, the CMO is in charge of general “Vibe Strategy”. The CMO has to make sure that the ‘vibe’ is right. There are no real quantitative measurements for mojo – you can just feel it. The CMO is the type of dude who can just feel it. They’ll know when it’s out of whack. The CMO is in charge of things which are nebulous, but actually matter. When the CMO has the general vibe grooving, the mojo is right, and revenue happens.”

Good news for startups with small staff is that we don’t have to wait for the employee head count to justify a new CMO. We can  and should be doing it anyway. It’s our job!

But when you make it, I reckon it would be the best investment any company could ever make. 

Prices vs Relationship

A while ago Philip Welnman spoke at the Hive. (Australian Entrepreneurial forum) One thing he said struck me, and I think it’s true

“Without relationships we can’t win. We never lose business over price, it’s always the relationship, and price is the fall guy.

Sure, there’s probably some exceptions, like commodity trading. But who wants to trade commodities anyway?

Steve – rentoid.com

The techcrunch crowd

Posted in Bootstrapping, business, entrepreneurship, startups by Steve Sammartino on December 5, 2008

You’ve probably read or heard about techcrunch. Which is one of the most popular – technology / startup / silicon valley style blogs. Many tech savvy web addicts trawl it daily if not hourly for the 15+ updates a day.

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Not sure if you’ve ever bothered to read the comments. But they are literally 90% negative. Sure, some or a large part of the ideas or start ups on there will disappear, but it’s not as if every success story only has positive comments either. There is no discerning between any of them.

Rentoid got featured over 12 months ago and got bagged big time. More than 12 months later we are still here, while the pundits are “still in their cubicles”. Calling it from the cheap seats!

The techcrunch crowd – ‘the commentators’, are the type of people us entrepreneurs should stay away from. Their disease of negativity, isn’t worth catching.

The point of entrepreneurship is the journey into the unknown and excitment of creating change, and maybe even proving a few people wrong. Nothing wrong with that.

Any entrepreneur worth his salt is way too busy making their stuff happen, to spend time citicising other peoples efforts. So when someone looks down on your startup, smile and ask them to show you theirs.

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