Start Up Blog

Feature Creep

Posted in entrepreneurship by Steve Sammartino on November 11, 2009

The art of adding features to any product or service is this:

Those who need or want the new features can find them easy.

Meanwhile those who don’t need or want the features don’t even notice them. They are invisible.

Sounds impossible to do, but I think the team at twitter are doing a pretty good job of it. The way I’d try and achieve this would be by making sure the visual structure doesn’t change, and the sequence of events to use it is not interrupted.

shhh – here comes the controversy.

Production values matter

Posted in entrepreneurship by Steve Sammartino on October 12, 2009

Sure we live in a mash up society. It’s acceptable to bootstrap. It’s OK to learn on the job in the digital arena. What’s not acceptable is to get worse. To not reach previously set quality benchmarks. In any business, no less your start up. All of the self made youtube stars invest time in the final production of their content. People expect a higher level of quality these days especially if we want to gather long term fans and loyal viewers. Production values matter. What was acceptable in 2004 in not acceptable in 2009.

The first thing you notice in the video output of these highly subscribed Youtubers is production quality: HotforwordsCommunity Channel, Kev Jumba, Happy Slip, Fred and others.

So when Miley Cyrus throws together a home made video of her leaving twitter seen below, we realize how much value her producers add to her usual output – seen underneath.

Home made Miley

Produced Miley

I myself, need to improve the videos I make for rentoid.com. So I’ve recently been investing a lot of time learning how to use iMovie editing software.

The lesson for startups is to invest in our digital output. A little more effort in production can be the difference between gathering customers and looking like an amateur.

Startup Blog Live – episode 3

Posted in entrepreneurship by Steve Sammartino on August 10, 2009

I’ll be doing another Startup Blog Live session at 8pm this Thursday night. It will be via http://www.twitcam.com under my twitter sign up which is http://www.twitter.com/sammartino or @sammartino for current members.

Thursday 13th August at 8pm – Live.

TV Studio

The topics of discussion will be Tactics vs Strategy – which was the topic of a blog post below and a very important issue for startups and entrepreneurs. If you can make it – ask a question in teh comments and I’ll answer it live for everyones benefit. Last time we had over 70 people tune in. So join us.

Steve.

I am on TwitterClick here to chat with me

Free – is not a business model

Posted in entrepreneurship by Steve Sammartino on July 2, 2009

Firstly – I’ll start by saying I think Chris Anderson is an incredibly clever guy. I thought his book ‘The Long Tail’ was and is the future of business. But when it come to ‘free’ he has got it wrong this time. As has Seth Godin and all the other ‘free’ converts.

As Malcolm Gladwell correctly points out, they are forgetting many of the fundamentals in business, by getting caught up in the stale newspaper argument, which in the new digital economy, is the easy and soft target of who will disappear. The irony of this ‘newspaper’ argument is certainly lost in the broader economy. The non digital economies are a lot bigger than newspapers and other beleaguered digital industries.

Picture 15

So why is it that ‘Free’ is not a business model. Quite simply, any business without a revenue generation model wont exist over time. We only need look at the the dot com bust of the late 1990’s to see this reality. It’s also much too easy to get caught up in the success of Google and others which ‘started free’ to build demand. But many of the subsequent ‘Free’ offers like Youtube, Facebook, Myspace, Flickr may have been successful for the owners, only because they sold to a business with a large chequebook – not because the business itself was financially successful. The Google business model is not too dissimilar to that of Network TV – generate eyeballs, sell advertising….. Nothing new here.

The real question in the so called ‘Freeconomy’ is how many businesses can be supported by the advertising sales model? So why the idea of ‘Free’ is being touted as new is beyond us here at Startupblog.

Here’s what ‘Free’ really is – it’s part of the marketing mix. It’s the 4th P – Promotion. It always has been and always will be. Anything a company gives away for free is a promotional tool to sell something. If these businesses who use the so called ‘free model’ fail to sell something there are only two options for them as time passes:

  1. Go broke & run out of cash
  2. Get bought by large company who values what they have created, albeit ‘non-financial’

Whether it be Proctor & Gamble, giving free shampoo in letter boxes in 1957 or Google giving free search and maps in 2009. It’s part of the mix to attract potential customers, who will be converted into on going revenue. It isn’t free. Free is not a business model, moreover it’s sampling & promotion for associated revenue generating activities. So to call it the future of business as ‘free’ is absolute folly.

Sure Anderson can argue that digital stuff is becoming so cheap it may as well be free – as per the transistor example he uses. But the thing that really costs money is building demand and infrastructure – the kind of stuff that’s really expensive. The other point to consider is the example of some things which previously cost money (a newspaper) is now available free on line, doesn’t mean everything is heading down the free path. Rather it means that certain industries are dying – not that ‘paying’ will be a thing of the past. In fact there are just as many examples of items which were once free, consumers are now being charged for Education, Toll roads, Water, Seeds.

The advice I’m giving here is simple.

No business can survive without revenue. Free, isn’t free, but a promotional expense, the 4th P. If your industry is getting flooded with free – it’s on it’s deathbed – look elsewhere. Industries die all the time when the revenue dries up just like those trying to cope with the current digital conversion. Don’t assume you can build something awesome and give it away with the ability to sell it (the business) or something associated later – chances are you’ll run out of money before that.

The future of business isn’t Free, and the idea isn’t new, it’s part of a complex marketing mix. And if you want to own a startup to thrive, my advice is simple. Have a price which isn’t all zeros.

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