I think demographic segmentation should be added to the bundle of tools from yesteryear. The redundant list. Note just because it is a cold and dehumanizing concept, but because we no longer have to use economic and social indicators to guess who cares about something. In a connected world, where we opt in to tracking our own behaviour guessing is no longer required. Instead we can know precisely who cares, and what matters to them.
Age, Location, Income, Education levels, Employment, Race and Gender are all proxies. Estimating by proxy is very quickly being circumvented by knowing through tracking and connecting. In the old world we’d imagine a potential target audience or we’d research a target audience if we could afford it. The good news today is that none of us have to guess anymore, and all of us can afford the price (very often zero) to find out who they are. And most importantly we should remember our people are not some statistical cohort we attack, but a group of individuals that we should be bending over backwards to help out.
This weekend I’ve been a mentor at the #SAPIhack event in Melbourne down at the York Butter Factory. During the event I was having a chat with Frenchie about what makes a great technology based startup team and he gave me the best answer I’ve heard yet.
The 3 core skill sets you need in a team are the following:
You can probably guess what they are but let me give you a little explanation of each. The Hacker is the code monkey. The development guys who knows how build or construct the actual thing. The Hipster is your design guru, the UI guy, this person has a style sensibility to them and knows how to make ‘it’ beautiful, desirable and usable. The last guy, the Hustler is the deal maker, the dream seller, the phone call maker and snake charmer.
You get the point – but it’s a great and simple way to structure a team. And we all need each other. It’s a rare situation indeed when one person can do it all. And it’s probably impossible to have the time to do it all even if you are a 3H-er. The other thing it points to is the oft divergent personality types that are needed and that there is room for all of us in startup land.
Most Seinfeld fans are in raptures about the new series by Jerry Seinfeld – Comedians in cars getting coffee.
It’s so good on so many levels. But it’s not the just humour that is worth commenting on, it’s the way the series has been presented to the market place. It has been launched on it’s own website comediansincarsgettingcoffee.com and hosted by video sharing website Crackle.com (which is owned by Sony). It’s a classic example of the strength of personal branding (admittedly there is possibly non bigger than Jerry) and the hacker approach the web brings to those with a brand strong enough to self publish. Going direct to fans not only enables one maintain creative integrity and control, but invents all sorts of monetization possibilities.
At this stage I can’t see where the financial win is for Jerry or Crackle (Crackle is free with little evidence of advertising?), while the deal between the 2 parties is also unclear. One thing for sure, is that this model is one we are going to see far more often – big stars and micro entrepreneurs going direct to market – to create the art and projects they want to create. Another comedian who did a great job of this approach was Louis CK who also decided to sell tickets to his fans direct from his website. This all reminds me of one of the great visionary talks from Garry V who predicted this a few years ago.
Smart brands and people are now going straight the web. It’s not about asking how we can ‘also use the web’ but it is a simple web first or maybe even web only mentality. Controlling our own distribution channels matters more than ever. The fact is it works better for most people to do business directly and it allows fans and content creators (or sellers) to have the direct relationship they’ve always wanted.
Up until very recently – maybe 10 years ago – the people who made the stuff we use, didn’t really care if we could use it. Which is why anyone who have ever owned a VCR can remember the time flashing at 12am for most of its shelf life.
People who made stuff didn’t care, because they didn’t have to. Our options were limited. There were only so many brands to choose from, and only so many retailers to buy from. It was buy from them, or miss out. But they were nice enough to a write manuals for us. If you’ve ever had struggled to read or understand a user manual of some sort. I’ve got good news for you… I have the translation below.
“Hi there, we’ve written this manual in order to avoid have to give you any real or human feedback. You see, we are too busy selling this thing in so many countries, that caring would impact our short term profitability too much. So instead we just got some of our engineers to write this thing, and then we hired a translation company to put it into your language….. so if this is all reading a bit back to front, or just too technical to understand, then that is why. The reason our product needs a manual is that we are pretty much trying to be everything to everyone. We couldn’t really decide which features to include or exclude, so we just put all of them in. We believe we can charge a higher price if it has more features, we are not 100% sure, but why risk it? We know having this many features makes it harder to user, but it really makes it easier for our sales and marketing team to tell customers and retailers our ‘thing’ does everything. Our policy is to do the bare minimum when it comes to anything related to our product after we already have your money. And we know that all our competitors do much the same stuff so we reckon we can roll like this. Good luck!”
Lucky for us manuals are a thing of the past and smart brands know this. In this day and age the thing itself should be the manual. If it isn’t we can be pretty sure that someone will replace our stuff with a better user experience that’s intuitive and actually cares about the people using it.
I’m starting to believe that the ultimate requirement for innovation is ignoring barriers. Not inventing rules that are not there. The second part of this thought is that we are trained over time to ‘assume the rule’ – when in actuality there is no rule.
I’ve been watching my daughter recently do little the things that I’m sure all kids do.
I play a game with my daughter where I show her how to stand on one leg. I don’t tell her what to do, I just stand on one leg…. and of course she wants to do it too because it looks like fun. And she copies me immediately. But because she has only recently learned to walk, she can’t quite manage it the way I do. So she without hesitation runs to the nearest wall, puts one hand against it to gain balance, and successfully stands on one leg. At this point she is very pleased with herself that she has managed to do it. Big smile ensues as she looks to me for approval…
And here’s the kicker… I am pleased with her too. But not in a kid like condescending way. I am seriously happy with her approach. And here’s why:
At no point was any rule given that you can’t lean against the wall. She hacked the system and got it done. I clap her and encourage her. In this instance it’s all about the objective, not the method. And the one thing I will never do is start to reduce her mind with rules that just aren’t there.
What we should do with our startup is innovate like kids do. Ignore how the bigger, more resource laden and older incumbents do things, and just hack for a result.
In my previous blog entry I spoke about ‘leveraging the wood chips’. Which is an old business maxim on how whatever we do has some kind of externality, off cut or by product which can be leveraged (very often sold) in some way to invent a new revenue stream. And while it may be obvious that many large business have such an opportunity, we also have this opportunity as individuals to realise the value of our wood chips.
Before I get into the what and how we can leverage our wood chips, let me share a couple of examples of well known brands, companies and products which are essentially ‘the wood chips’ – which incidentally comes from the obvious description of what we can do with timber off cuts from some kind of craftsmanship.
Vegemite: Australia’s largest brewers including CUB (now SAB) sell their brewers yeast (a form of woodship) to Kraft foods to make Vegemite from. All my Australian readers will now how big this brand and business is.
Paddle Pop: The Australian stick ice cream stalwart is actually what is called a ‘re-work’. The raw materials are the off cuts from other more premium ice creams in the factory.
Ruby on Rails: Is a software programming language that was developed for the building of Basecamp – a 37 Signals application. Which has now become a general programming language that was released to the public as an open source platform – as a gift.
LPG – LPG is synthesised by refining petroleum or wet natural gas. Liquid Petroleum gas can be used to run cars and heat homes. At first it was wasted, then it was captured and used.
Infact, many of the startups funds and Angel investing organsations are the wood chips of previously successful entrepreneurs.
My wood chips
In the first instance I took my Marketing skills into the web startup entrepreneurial scene when I launch rentoid.com. While I had virtually zero web and tech skills I made up for the gaps in project management, promoting my work and understanding consumer trends.
After I launch rentoid successfully as a ‘boot strapped’ business – this blog became a source of woodchips where I could further share and promote my ideas as they developed.
My Startup School, was the wood chips of rentoid and this blog – all pulled together as intense weekend where I share all my key learnings over 2 years into 2 days. Hence providing a valuable short cut to others entering the space.
Public Speaking is something that I have embarked upon more recently where I share ideas on business, the digital landscape and marketing. The real reason this is possible is due to the amount of pitching I have done in my own business endeavours. Without realising I became quite a proficient public speaker for which I am now regularly paid very well to do.
There are others, but you get the picture.
We all have some form of wood chips we can leverage and generate revenue from. Often at a higher rate in relation to the investment required to generate them – remember they are essentially an externality. We just need to stretch our imagination to see what they are, and most important let people know we have them on offer.
Happy wood chipping!
For the best part of the last 10 years I haven’t been able to explain to my mum what I actually do for a living. Both with startups I have created and jobs I have had. Probably more so with the paid roles I have had. And this is an important insight into the world today and how we all fit into it.
How my mum responded to various activities I have undertaken:
My blog: Why do you do that? What is it about? Who pays you for it? Why do people want to read about startups?
Startup School: How can it be a school if they don’t get a certificate at the end of it? What curriculum do you follow?
Rentoid.com: Why would people trust strangers with their things? Why would people rent or share stuff when they can just buy it?
Director of Strategy: If you don’t write the ads or make the film at this Advertising agency, what do you actually do? I don’t get it.
Twitter: Who cares about what you have to write? Why can’t you write more than 140 characters? What do you mean people follow you?
In fact, without being disparaging, we need to ensure our mums don’t understand what we do. It’s the best indication that we are a scarce resource in a rapidly changing landscape.
When everyone understands what we do, it almost certainly means there are plenty of people who can do it. And if there are lots of people who do what we can do, then there is less chance we can extract significant value in the marketplace.
It’s all shifting in front of our eyes. A new plutocracy is arriving. Some of the roles have already been filled…. Maybe there are some new ones to arrive that we just can’t forsee yet. But to enlighten us a little, let’s consider 3 examples:
The real question for entrepreneurs is which ailing legacy industries are still waiting for their shake up?
Screens are beginning to permeate our entire existence. This latest effort from Samsung is seriously a step into the future. A fully connected web enabled window. It’s not hard to imagine this appearing in architectural designed houses and offices in the next 12 months a la minority report. Again it seems that UI is what really matters.
Startups need to be thinking about how they design around next generation screen UI beyond Apple.