A tyre is only flat at the bottom

flat tyre

When I got my first car I once had a flat tyre and asked my dad if he could come out and help me change it, show me how to do it. And he said;

“I wouldn’t worry about it, it’s only flat at the bottom.”

A pretty funny dad joke. But a very good analogy for problems we face in business.

The entire business is running smoothly, except for some cultural problems in the warehouse.

The UX and product market fit of the app is great, the server is just a bit slow.

The retail store layout, the range and prices are all perfect, we just keep running out of stock.

Our startup is perfectly placed to disrupt this industry, it’s just there’s no way to scale it.

Our customers, supply chain and brand perception are as good as it gets, it’s just our margins are too small to make a reasonable profit.

While the tyre may only be flat at the bottom, it affects the entire operation.

You should totally read my book – The Great Fragmentation.

The 2 simple questions all successful startups have answered

Here’s two great questions to ask when starting a business endeavour:

  1. Is there a gap in the market?
  2. Is there a market in the gap?

Question 1 is about needs being unmet or not fully satisfied. In the realm of disruptive technology, you may be able to solve customers problems a better way. The gap in the market could even live at the emotional level – $200k Hermes handbag anyone?

Question 2 is about whether we can make money filling it. Until we have real revenue and real costs, outside of a VC funding cycle the question remains unanswered. Users alone, do not a market make – just ask Fab.com. The cool thing about being small is that previously unprofitable segments for big players can now become a super efficient money spinners. Legacy infrastructure is the enemy of today.

These questions are not new, but we’ve got new tools to ask them with. We can know about the market gaps quicker, and maybe even change what they answers are.

You should totally read my book – The Great Fragmentation.

Why I already trust you

lost of faces

People often talk about earning someones trust. Which is a bit like saying, I think you’re a jerk until you prove otherwise. My approach is the opposite. I trust you from the outset. The moment we meet you have my trust. Occasionally this means I get burnt. Probably around 5% of the time, it turns out to be a bad policy. Which then gives you a clear indication of why I choose to trust first. Most humans are good, and will honour the trust given to them. Which means that 95% of the time it works out well.

The problem is that most companies make policies to account for the 5% of bad apples. The few that take advantage of things. They punish the majority to account for minority. A better option is to have a business model with the robustness to account for those we who do the wrong thing. By doing this we respect the humanity of our most important customers, the majority. They also happen to be the trustworthy ones.

You should totally read my book – The Great Fragmentation.

The simplest brand building tool of all

black mercedes

Building a brand with meaning is a difficult thing to do. But there is one hack which tells us more than any other signal, and it takes less than a second to give that signal.

The price.

If it’s super cheap or outrageously expensive, it tells a stronger story than any other feature immediately.

It tells us where it sits in the scheme of things, the consideration set of where I could cast my dollar votes. It tells me if this is option is in my range or not for me. Sometimes the price is most important feature, we want people to know how much we paid. The story I tell myself has already began. I make a decision based on the price which tells me I’m being smart and frugal, or I deserve this most expensive option. In some categories like apps and software, these days there’s an expectation of no price at all.

If our price stands out, then even before our product or service has been trialled we have a brand perception. The only challenge of course, is making sure that after consumption the experience lives up to what was expected.

You should totally read my book – The Great Fragmentation.

Podcasts are a University on wheels

podcast head

After a false start in the mid 2000’s podcasting is back killing radio. For anyone who spends a fair amount of time driving, exercising, travelling or just existing as a human, it is the ultimate short cut to ‘get learned’ by some of the worlds best thinkers – University on Wheels say some.

So here are some great podcasts I literally rub my ear balls in whenever I am on the move.

My top 7 Podcasts:

  1. EconTalk with Russ Roberts – Not as highbrow as it sounds. An incredible array of topics related to business, culture and sociology. The most insightful look into our economic lives you’ll ever listen to.
  2. The James Alticher show – Mostly about entrepreneurship, technology and financial independence. He interrupts the guests a bit much, but with good thoughts & questions. Has great guests on the show.
  3. Crap Hound with Cory Doctorow – Mostly about cyber security, IoT, income disparity, privacy & surveilance, Gov policy regarding digital rights, and other important digital issues around control and the world you’re about to live in. Eye opening view of the future. One the globes sharpest minds.
  4. HBR Idea cast – Podcasts of around 20 mins. Perfect for short trips. Covers topical issues in business and management. Gets to the critical issues quickly.
  5. The Long Now with Stuart Brand – Seminars about long terms thinking. Generally a long 1 hour plus podcasts which are from Keynote speeches from the Long Now Foundation. Has the world best thinkers on key topics regarding the long term survival of humanity. Kinda heavy I know – but the topics are more ‘human and now’ than you’d expect. Everything from why stories last to can we live on Mars to the long arc of moral progress.
  6. Planet Money NPR – Great stories about all things money and finance. Super interesting stories with insights you’d never expect. Totally entertaining on the usually boring topic finance. Short podcasts too around 20 mins.
  7. Here’s the thing with Alec Baldwin – Has a great range of guests with entertaining content regarding creative and business pursuits. Lots of laughs and relaxing.

If you like hearing me rabbit on, then you can always check out the #BBB podcast (Beers Blokes and Business) which I appear on and I recent recording I did for the newly launched Future Sandwich podcast.

Oh, and if you’re wondering why podcasting has made such a massive comeback in the past couple of years, there’s probably a myriad of reasons. But here are two that spring to mind. (1) We’ve had a couple of super ‘hit’ podcasts to put it on the agenda like ‘Serial‘ and (2) I think the increased data most people now get on their phones these days removes the download it now and listen barrier. No need to plan and download at home.

Startup blog says – let your ears do the reading.

You should totally read my book – The Great Fragmentation.

The only way you can compete on price

Screen Shot 2016-01-11 at 11.52.46 AM

My favourite blogger Seth Godin talks about competing on price as being a race to the bottom. I couldn’t agree more. Yet, it can be a valid business strategy, and here is the only time when competing on price is a smart thing to do:

When everything the customer does not see is focused on price.

If you want to compete on price, then the price tag itself is the least important part of the ‘low pricing strategy’. It’s the back end, and every single thought and action in your business needs to be about efficiency and reducing cost, all day, everyday.

If we can manage to do this, then we can win on price. But we should always remember a price sensitive customer is always the least loyal.

You should totally read my book – The Great Fragmentation.

Yes, we know Uber has no cars, but what do they really sell?

So by now everyone knows that Uber has exactly zero cars and Airbnb has zero hotel rooms. But this shouldn’t really be that surprising given it has been the playbook of the internet since like Altavista was a thing. So we can stop putting it in presentations as though it is a surprise. The web is a connection device, those who make the most useful connections win. It’s all about access, not ownership. While these two tech companies don’t own the assets they rely on, we ought remember some older examples from the ‘Connection Playbook’.

  • Apple have 800,000+ app developers they don’t pay.
  • Alibaba has 4.2 million factories they don’t own.
  • Facebook has 1.2 billion content creators.
  • Amazon sells almost every author in the world.
  • WordPress has 75 million journalists writing for them.
  • eBay doesn’t own any good it sells.

The web has always been about leveraging cognitive surplus and idle assets. Owning stuff and paying creators is so Industrial era.

Now let’s consider what people are really buying when they get an Uber: Certainty & Transparency.

Uber time to arrival

For me the thing that makes Uber valuable isn’t the nice black vomit-less cars, or the random risky strangers who drive them. It’s knowing the car will be at my house in 6 minutes. It’s far superior to whenever I order a taxi – they still to this very day have the gall to tell me they’ll send the ‘Next Available’ – which does not help me get to the airport in time. I’m also a fan of just leaving the car without having to waste like 7 seconds swiping a credit card to pay. Yes, human laziness knows no bounds. Interestingly, the key features that make it work could all have been done by the taxi industry. But heck, why would they do that in monopoly conditions?

As for Airbnb, I’d much rather stay in a hotel when travelling on business. Hotels are far more convenient and have a number of services that matter when travelling for work – like late night burgers and concierge. But whenever I hear someone talk about their Airbnb experience, it’s never about convenience and amenities. And it’s not always about price. Most often it is about the story of where they stayed and how authentic it was. Airbnb sell the story of accommodation. They localise the experience for strangers.

Yes, it’s quirky that many big businesses connect things rather than own them, but it’s more important we understand what their customer advantages really are.

You should totally read my book – The Great Fragmentation.