Virtual Classroom

The thing that we are fortunate with today, is that it is easy to catch up. If we haven’t been paying attention to the world we make our living in, someone usually has been. And of those people who have been paying attention, these days they are often generous enough to share what they’ve seen. If we’ll take the time to invest a few minutes with a sharp mind, they can teach us what took them years to uncover themselves. I recently happened upon two Youtube videos which do just that – albeit in different ways.

Then & Now

This keynote from Seth Godin is the best I’ve seen from him. It really is a master class in how to do a keynote. It provides the most compelling story about our exit from the industrial era and shift to the connection economy. If by chance you’ve not noticed the structural shifts in our economy in the past 20 years, this 55 minute mind boggle will get you up to speed. Given you’re a reader of this blog and that can’t possibly be true, please share the link with someone who you think will find value in it. Click here to watch.

Tomorrow

Tim O’Reilly is one of the great philosophers of our time. He knows how to see, he notices the long play, more than most I think. I often just type his name into Youtube and the word ‘interview’ after it. I then sort the Youtube search result by date to get most recent content. Every time I do this I find an astounding interview with him which provides deep and profound insight. That’s what I did yesterday and I found this gem. A discussion about the maker movement, and evolution in the web of things. The stuff that is coming in our technology world. Really leading edge thinking:  Click here to watch. (or listen as this has no important visuals)

In today’s world we can know anything, on demand from the worlds best thinkers. It’s the first time in human history this has been possible. There aren’t really any excuses for a lack of knowledge in our topics of interest. These days knowing or not knowing, has little to do with access and a lot more to do with effort.

twitter-follow-me13

Idea or invention?

Marketing polymath Seth Godin was asked for his distinction between an idea and an invention on his blog today. I think it is important and worth sharing right here:

An idea is something you can write about in a science fiction book.

An invention is when you build something that people who read about it in the science fiction book said was impossible

Before we venture into our next startup and invest capital (Human or Financial) it is worth knowing which one we have.

twitter-follow-me13

Maxibon Manchew – Radvertising

This is the best advertising I’ve seen so far this year. Really love the concept and the execution. Made me hungry.

If you’re going to advertise your startup then I reckon we can learn something form the radvertising above. And the lesson is this:

Don’t get lost in the middle. Go as close the edge as possible. Make outrageous tongue in check claims and be hilarious, or be 100% authentic and truthful. Everything in the middle of either of these two extreme edges is simply, wallpaper.

twitter-follow-me13

Famous to the family

Seth Godin has an interesting idea of being Famous to the Family. Which is similar to my definition of cool: the stuff that matters, to the people who care.

This short interview is a 5 minute investment worth making.

Next steps:

  1. Decide who your family is.
  2. Build them stuff they really care about.
  3. Enjoy doing it enough, to be able to continue without riches.
  4. Be patient.

twitter-follow-me13

Q & A – New Media and Small Business

I was asked to answer a few questions at a talk I gave last week at the Nationwide Networking Event. It was aimed at Small businesses with the topic about new media and the advantages of being small. I thought it was a nice snippet of ideas worth sharing here.

Q: What type of changes can we expect from media in 2010 and how do we need to prepare for it as business professionals?

A: Media will fragment further, it’s increasingly like fashion with new ideas appearing daily. The art of value, like with fashion is by going with the classics and choosing the right style for the brand you want to build. Match your environment, by being involved in the right channels.

Q: Where do you see the role of the blog in the future?

A: Increasingly important. Blogs are a trusted source, because bloggers become, or are an expert on their topic of choice. This is because all good blogs are topic specific. And people want to deal with experts.

Q: What can we expect from the evolution of twitter and our capacity to use it as a marketing medium?

A: If we use it as a marketing medium we’ve already lost. It’s a conversation…. Conversation can turn into business, but it is primarily a conversation. First we need to be a resource. A resource to others, from which we can build trust and valued relationships. These may eventually lead a business relationship.

Q: What trends are coming from America that we need to be aware of?

A: Trends are global now. We don’t have to look overseas to see it. Things arrive simultaneously. It’s not like it was 20 years ago where our friends return from sojourns overseas to tell us all about the cool things they saw, and we have to wait for them to appear in our market a few years later. Now it’s on our desktop the day it happens. This is been further facilitated by web tools such as Springwise, Twitter and Youtube.

Q: How do we (small business people) benefit from the changes in the media landscape?

A: Barriers to entry have been removed so anyone can play. But it requires a long term consistent effort. New media requires a low financial investment, and large human capital input. Where as old media requires a large financial investment with little human effort. At least now we have to choice. In addition large companies have been (so far) pretty bad at using new media. It creates an advantage for us.

Q: How can we better utilize technology tor reduce our costs and increase our profits?

A: Shift from being doers, to becoming project managers. Outsource where ever possible. It’s easier now with all the tools we have at our disposal like elance and skype. Why do we even need an office? Is it because we need to, or because we don’t trust the people we work with?

Q: Your blog has 50,000 readers a month, how did you do that?

A: Two simple things. One blog entry every day. Staying on topic (entrepreneurship / startups). Then wordpress and Google did the rest. It’s not a trick, it just takes consistent effort.

Q: What is the meaning of micro brand building and how would it be relevant to soloprenuers?

A: Build your personal brand first. That’s the first part of micro branding, becoming known for something. Having a skill you can share with others. Then eventually cross fertilize to your business brand.

Q: What are the simplest things we can do to build a micro brand?

A: Have a tight focus area of interest. Share our lessons honestly and openly. Frequency of output.

Q: How do we protect our brands?

A: Not with IP and legal stuff…. Most of that is a simple waste of money.  We protect it with customers, innovation and reliability.

Q: What one piece of advice would you give to those of us that need clients and need them quickly?

A: Cold call. Not on the phone, but turn up and talk.

Q: What books have influenced  you?

The Cluetrain Manifesto

The Purple Cow

The art of the start

22 Laws of marketing

Q: What marketers / speakers have influenced you?

A: Steven Wright (comedian) he taught me how to flip my perspective for alternative solutions.

twitter-follow-me

Delayed Revenue Model vs Free (DRM)

I know I am being a bit of a dog with a bone here. But we really need to put this ‘Free’ stupidity to rest once and for all. Sure it’s semantics, but this is what the Free model really is:

Delayed Revenue Model

If we have a so called ‘Free’ model, we are simply providing resources (at out cost) in order to extract revenue through alternative means later, or via a trade sale to incumbents who see value in what we have created. In both cases the ultimate goal is Revenue.

delayed

In many ways it’s riskier to go down the free track, simple because time and money are inextricably linked. If we don’t end up ‘Monetizing’ (another word I hate) then we are simply in the wealth transfer business.

I am on Twitter Click here to follow me

Free – is not a business model

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.

twitter-follow-me