Start Up Blog

Websites & The Network Effect

Posted in entrepreneurship by Steve Sammartino on April 18, 2011

I took this piece of copy directly from the 37 Signals blog. When it comes to websites, it’s what often the one thing we really need to break through. I also think it is why ‘free’ on the web just wont go away. It’s something web startups just can’t ignore.

The Network Effect: The network effect occurs when the value of a particular good or service increases for both new and existing users as more people use that good or service. It can also occur when other firms design products that compliment an existing product, thereby enhancing that product’s value. For example, the fact that there are literally millions of people using eBay is the thing that both makes eBay’s service incredibly valuable and makes it all but impossible for another company to duplicate its service.

twitter-follow-me13

2 minutes of Screen Culture

Posted in entrepreneurship by Steve Sammartino on April 14, 2011

Our lives are increasingly being influenced by what I like to call ‘Screen Culture’. Which I posted a piece on here. I thought it would be worth showing the idea in action – hence the video I made below. Many of the statistics to support the concept were garnered through ‘Eye on Australia‘ which is an annual Grey Advertising study on consumer sentiment. The video explores the impact screens are having on our lives in the geographically specific & connected world. Enjoy!

twitter-follow-me13

Car smash marketing – Rebecca Black

Posted in entrepreneurship by Steve Sammartino on March 20, 2011

I’m not about to make any comment on the song Friday, or about Rebecca Black. She seems like a nice enough kid having a crack at the music industry.

It is interesting how anything has a chance in a zero cost media world. Sure, not everything will cut through, but in 1991 Rebecca didn’t stand a chance. She had no where to put her song (Youtube), nowhere to sell it (iTunes) and no one to spread it (Twitter / Facebook ). The invention of all this infrastructure made it possible. The thing that is different about the infrastructure versus 20 years ago is that cost of entry has been removed. Extremely good and bad start in the same place. And occasionally something unusual makes it through – so long as it is extreme in nature. No-one has placed multi-million dollar media bets on selling Rebecca’s song, so the cost of promotion has been reduced to taking 3.48 minutes from our day, or typing 140 characters. It’s like a car smash, we can’t help but slow down and take a look.

The question it makes me wonder, is if there is a valid strategy in being the ‘worst’? And if there is, how do we make sure we qualify? And if we qualify, how do we then transform?

Love or or hate her, right now Rebecca has 100% share of voice.What that turns into is entirely up to her.

twitter-follow-me13

 

Winklevoss syndrome

Posted in entrepreneurship by Steve Sammartino on February 18, 2011

You may have heard of the Winklevoss Brothers. They’re two of the luckiest people on the planet. They received a reported $65 million in a settlement from Facebook for essentially having an ‘idea stolen’. Latest reports are that they unhappy with the settlement terms because Facebook has recently been valued as high as $50 billion.I’m calling it Winklevoss Syndrome.

Winklevoss Syndrome = the false belief that an idea is ownable and that the real value of a business is strongly linked to the idea. People who suffer from this syndrome believe that they have some kind of ownership rights to something because they thought of it.

Although Mark Zuckerberg may have taken their idea, but he’s the one who built, it, funded it, promoted it, resourced it and expanded it. I’ll go as far as saying that the Winklevoss brothers are delusional if they believe they had anything to do with the success of Facebook. The idea of a social network has nothing to do with the act of building and populating a social network. Ideas in isolation have no value, ideas once executed ‘may’ have value. It’s also worth remembering that every idea that any number of people could or did have, would always be executed very differently. I think the Winklevoss brothers are the luckiest entrepreneurs on the face of the planet. They received a $65 million dollar gift for an idea and some unfinished pieces of code. They got very lucky they ever met Zuckerberg.

Every fresh idea usually has thousands of entrepreneurs around the world toying with it or building it. Simply because they have foundations in common trends, insight and technology evolution. So next time you see your ‘idea’, being brought to life, remind yourself that you didn’t ‘do’ anything about it. And then resist the temptation to suffer from Winklevoss Syndrome. Instead we should go and build something and see how limited the value of the original idea is.

twitter-follow-me13

Old Spice: Campaign of the decade?

Posted in entrepreneurship by Steve Sammartino on August 1, 2010

Everyone loves the Old Spice campaign, how can you not, he’s on a horse! But the reasons why it is so great are probably more important than how great it really is. For anyone who has been living under a rock, the original advertisement deservedly won the Gold Lion at Cannes this year. You can watch it below:

I think we can all agree it is brilliant. The reasons are many and include the fact that the only promise is what the product will actually deliver, it pokes fun at the category norms and general communication, yet the humour and idea is inextricably linked to the product. In addition it’s one of the few product types where a global message can actually work. In general most global campaigns are obviously made for multiple markets and banal as a result. This was an exception.

The next iteration of the campaign is what put into the consideration set for campaign of the decade. The lead character in the advertising campaign AKA the ‘old spice man’ had a voice and tone which was was unique. He didn’t cannibalize the brand idea, just extend it and give it strength. The actor playing the role Isaiah Mustafa personified the brand, to the point where he could almost say anything and it would work. Knowing this the brand team and advertising agency decided to embark on a semi-live advertising campaign featuring his monologues. It involved setting up studio for a two-day session creating a series of humorous, personalized YouTube videos, with Mustafa reprising the character from the original Old Spice commercial. These were directed at members of the public and celebrities, who had asked him questions on websites such as Reddit, Facebook and Twitter.

It was so slick, so entertaining and brand extending it took a lot of convincing before I believed they were shooting it live. I even tweeted that there was no way this could be live. Just too slick. I was wrong and stoked to be wrong. What they did was set up a studio with Mustafa some props and the copy writers from the agency and they pumped out a TVC every 11 minutes, answering questions posed by key influencers on a few core social networks. Extreme trust by the brand owner Proctor & Gamble was given, which is a massive hat tip to such a large organisation embracing chaos, opportunity and potential risk. Let’s hope that other equally conservative brand stewards take the lead from P & G and let set boundaries instead of requiring approval. You can read more about how they did it here.

The proof of the success goes beyond eyeballs. Of which they generated plenty, in fact the dominance they had over the Youtube most watched page is something I’ve never seen in the 5 years Youtube has been around. They did have well over 110 million views of various executions.

But far more importantly Old Spice has doubled it’s sales since the campaign hit the web. Up 107% currently (Nielsen) though I’m not sure if much coupon or price activity is behind it, you’d have to say the campaign was the biggest driver in a category that has growth below 10% per annum.

What does this all mean?

If any old world marketers have any doubt about the power of the web as a tool should stop and consider for a few moments what has just happened here. It also tells us that old media and new media are clearly ‘better together’. And lastly, brands who want to get the best results have to let go, forget about control and understand that moderating a message will only ever dilute the results.

twitter-follow-me

Media Exponential

Posted in entrepreneurship by Steve Sammartino on July 12, 2010

The speed at which media consumption has grown is mind boggling. So I thought I’d pull together a little info graphic titled Media Exponential using my Artline 725. Makes you wonder what’s next? Answer = what we create.

twitter-follow-me

Google overtaken by Facebook? Not really.

Posted in entrepreneurship by Steve Sammartino on March 17, 2010

It’s all over the news that Facebook has overtaken Google in terms of traffic in the USA.

But make no mistake, Google has not been overtaken by Facebook. Facebook is a long way off Google as far as commercial success is concerned. The importance difference, which isn’t about to change anytime soon is this:

People do business with Google.

People socialize on Facebook.

And just like any party, they tend to fizzle out. This seemingly small difference has a dramatic impact on their futures. My analogy is that of a fun park versus CBD. Facebook is being touted as the final platform, the social network to beat all social networks. And yes, it still has some laughable valuations ($100 billion) .

The reality is that numbers can be very deceiving, and when looked at arbitrarily like this, and I’m still certain the value of each Facebook visitor is marginal compared to that of Google. The question I asked myself is this: Could I live without Facebook? Yes. Could I live without Google? No. I’m not about to predict the future, but I want to leave startup blog readers with a reminder that statistics only have value when they are placed in context.

twitter-follow-me

The deception of history

Posted in entrepreneurship by Steve Sammartino on September 6, 2009

Reading about Craigs list the other day I started thinking about business history and strategy. As entrepreneurs we often get fooled by the deception of history. And it’s easy to see why. All the business books and articles we read on success are based on what someone or some company we respect did. The problem with this is that the world lives in a state of flux, and what worked then, most certainly wont work now. This is where the Craig’s list example comes to the fore.

Craigslist Head office

Would a 3 color page of hyperlinks which looks like the internet did in 1994 work today? Highly unlikely. Craigslist works now, because it worked well then. It had things working in it’s favour like the ‘in crowd’ in the Bay area spreading the word. That it was first to market with an on-line classified. Now these legacy issues become a strategic proposition which is worth maintaining. What it doesn’t mean is that it’s a strategic template worth copying for Startup X. It’s also less likely we’ll get the support needed from the web community or the investors needed.

The same can be said for pretty much any startup with an interesting history.

A social networking site which is set up for alumni of an Ivy League University probably wouldn’t work.

A trading website where auctions are used to develop the perfect market place probably wouldn’t work.

An on-line retailer which aims to sell every book available in the world probably wouldn’t work.

As entrepreneurs, what we are better off understanding is the insights into why things worked, and try and leverage human behavior in developing a strategic direction to launch our business.

twitter-follow-me

Social media – Numbers are irrelevant

Posted in entrepreneurship by Steve Sammartino on August 4, 2009

I saw this little 1 minute video from Seth Godin (Who I used to worship, and now just ‘like’) and had to post it here. Be sure to read my comments below the video.

Why the numbers are irrelevant to me….

  • My blog has few promotional elements on it (they’ll find me if I deserve it)
  • I only follow people on twitter I know. I want a conversation. Mind you if you @sammartino at some point I will follow you…. yes I’m interested in conversation.
  • Quantity loses to quality every time. Scores are misleading. Numbers are pointless.
  • Yes you can meet people on line and then create strong physical friendships. I have many times.

In summary I’d say this. If it doesn’t make sense in the real world (physical life) then there’s a good chance it doesn’t make sense on line. In ‘real life’, that is our off line life we think of our friendships and even business contacts in terms of quality. We don’t go around trying to make 1000 friends and wear a t-shirt that says ‘I have 1000 friends’. Rather, we prefer to have strong meaningful relationships which are one on one. Where both parties benefit. We don’t have a list in spread sheet with the people we’ve met. Sounds ridiculous doesn’t it?

Startups should be using social media to build relationships – not gathering numbers.

From now on I’ve changed my twitter link below on my blog posts. Can you see the change?

I am on Twitter Click here to chat with me


Zero Cost Advertising & Social Media

Posted in entrepreneurship by Steve Sammartino on March 11, 2009

I’ve blogged before many times about how to generate brand awareness with limited or zero budget. The list of tools available is pretty long actually. No need to list them here – you know what they are. But to use them effectively takes two important ingredients:

Ingredient No 1: Frequency
If we think are are going to start a brand blog, a youtube channel, twitter account and all our communication problems will be solved over night, then we have really not understood what has happened with social media. If I was to summarize it it succinctly. I’d say – we’ve gone from a ‘produced’ world to an ‘organic’ world. The produced world took large capital investments. The organic world is free, but not everything grows, and those that do take time. It’s a lot like nature, free but time & frequency of events is the asset.

The more often we return to our crop and nurture it, the healthier the return we’ll get. Occasionally something will just click. We only have to do something ‘once’ and it will grow astoundingly with little input other than the raw ingredients. The market will take get hold of the communication and we’ll crack it – it’ll go viral. This is the anomaly – it happens so rarely, that we know about it every time. Best advice is to assume it wont happen to us.

Ingredient No 2: Patience
We don’t have to buy the communication asset. They’re here, we have been given them, but we have to work them. We need to allow time for our compound effort to accumulate. Be patient and trust that our continual effort and focus on frequency, will work in the long run.

Patience has something on its side that the old media world didn’t – digital foot prints. Our stuff stays on line forever. So when a passionate web surfer finds one of our things they like – they can do a back catalog on our stuff. This is when things can work, even months after launch date. A TV ad on the other hand has one shot at the eyeballs. If it’s missed by the target market, it’s all too late.

No doubt, we need to build great stuff for people to care, but in the new world of zero cost communications, Startups can can get it wrong and learn as we go.

twitter-follow-me

Follow

Get every new post delivered to your Inbox.

Join 1,233 other followers