09
Aug 09

The Large Market Fallacy

Last week, during a new product presentation, I had an all too familiar moment. We had reached the point in the meeting where it was appropriate to review the business logic behind the concept at hand. At this point the presenter threw up a massive sheet of numbers and calmly commented to the audience, “well, overall this is a $4 trillion dollar market, so we think if we only capture 5% of the market, we’ll earn around $200M in the first year.” She didn’t even blink. (I changed the numbers to protect the innocent…the sad part is they’re lower than the actuals.)

I sort of live for these moments in presentations. It’s probably the same attraction that keeps baseball fanatics glued to their television for hours of what appears to be a pretty boring game. After waiting patiently, and watching things slowly play out, something goes very wrong, At that point, all hell breaks loose. At that point, you see who’s the power player in the room, who’s done their homework, and who’s completely out to lunch. This part of the meeting was pretty mush a wash, that argument basically threw itself out the window. This presenter had just committed a pretty common error, one I now refer to as a Large Market Fallacy.

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14
Jun 09

Adwords Evolved

I don’t usually get too inspired by advertising. Some times it makes me laugh or pulls at some heartstrings, but it doesn’t really inspire me to look at the world in a different way. Then my co-worker Clark showed me this.

Converse just won an Effie for flipping Google Adwords completely on its head. In the past, if people wanted to sell shoes, they would by the Adword for ‘shoes’ or ‘footwear’ or if they’re feeling adventurous, ‘kicks’. Then if people search for “shoe” they’ll see the link. The more marketers buy the same words, the more expensive that Adword is. That basically means every shoe marketer in the world is inflating the price of the word, creating more competition for themselves, and probably not meaningfully reaching anyone. (When’s the last time you searched for shoes? You either hit the brand or you go to Zappos.)

Converse flipped the script, they started buying Adwords that their demographic were already searching on. How did they know what they were searching? They just looked at Google Zeitgeist. So now, when a teen is searching for ‘how to kiss’ they might see a link for a Converse mini-site. The mini site is a moment to connect, and it’s a link back to Converse (if they want it). The only way you get to pull that off is by intimately knowing your customers and knowing what they want.

I would expect that Google will start to price terms in Zeitgeist slightly higher (if they don’t already). I think this campaign will probably change the way people buy Adwords. It’s like human-centered media planning…what an oxy-moron.


05
Jun 09

Business Models Happen

So I’ve been following Umair Haque for a while. A few months ago he made a comment that stuck with me, but didn’t sink in until just recently. He was discussing edge economies, so not traditional established businesses, rather new organizations creating value in a new ways. When discussing these bold new businesses he sort of made an offhanded comment that “business models just happen“. Wait, what?

That statement sort of offended my sensibilities at first. How can business models just happen? They take time, they’re complicated, and most of the time they fail. Also, edge economies are less proven. Wouldn’t that require more big brains and lots of ‘innovation’? It felt odd to say those models just happen.

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03
Jun 09

Experience: the biggest lever you don’t know you have

Springwise has a post about a concept called Charlie’s Burger’s. It’s an anti-restaurant of sorts that does dinners by private, sporadic invites. One thing that caught my eye was that people weren’t emailed directions when the event was happening, they were directed to a satellite location to pick up the actual dinner location and directions. In the rave days, that sort of maneuver was called a “map point”. Some guy hanging out in car or a record shop with the actual directions to an underground party. You didn’t get directions to the party, you got directions to the map point and you would go from there. (There’s other variations, sometime it was a phone number with a voice recording.)

Can you imagine how much this dials up the experience for the diner? Instead of wading through a crowded restaurant to speak with a stressed out greeter, you’re going on an adventure. Even better, once you arrive at the venue, you have a shared experience to share with 20-30 other people.

I think a lot about how to flip business models on their head to build something different. I’m beginning to think I’ve been going about things all wrong. I’m beginning to believe business models happen only when you create a compelling offering or experience. (I’ll blog more about that next.) I’m starting to think you that you have to start by to flipping the experience around, then figuring out what kind of business model could deliver that experience. I think building models for the sake of building models doesn’t get you to the right place.


17
May 09

Minimum Viable Product

I’ve been thinking a lot about prototyping businesses. I think it’s a hangover from years in the software industry. It’s regular in a business of bits and bytes to build something small as a proof of concept for bigger things. In fact, much of my career in software I was working on something that had been already sold, trying desperately to make good on someone else’s promises.

I’ve had this continuum in my mind for a while, on one end is vapor wear (sold products that don’t yet exist) and at the other end is military-grade (products so refined and tested, they should live through a nuclear winter.) I’ve been trying to figure out how to start building new lines of business in a traditional business, (restaurants, CPG, service businesses, etc) without building up an entire supporting enterprise. Seems like it should be simple, but it’s not.

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12
Apr 09

Crowd Sourced Journalism

This internet newspaper deathwatch has been exhausting. I can’t even pretend to keep up with it all, but I’ve been pretty fascinated to try and keep up.

Jeff Jarvis had a really good post yesterday that reminded me about the Associated Press and their relationship with newspapers. The newspaper thing is fascinating to me because it’s a slow disintermediation of that whole value chain. The local newspaper is basically the confluence of a few forces – advertising, syndicated news, local news and distribution. Continue reading →


03
Mar 09

Bandcamp

I had heard of this site before and sort of shrugged it off, but I just watched a video that blew. my. mind.

Bandcamp is a service out of SF (I think) that works for grassroots music acts as a promotional + distribution tool. Basically, you upload you tracks and sell them…so what, right?

Well…there’s all sorts of nice interactions going on here, but I’m more blow away about how the interactions lead to some sort of ‘value creation’ (sorry, that’s what it is, yes I hate that phrase too).
– site functionality where you can see how many people have listened to a track in it’s entirety
– name your price sales model (with minimum prices…smart)
– Sharing music the way fans want to share, online linking (AND a way to track who’s linking/listening from where.)
– free download campaigns with track-able codes (and moo cards so you can get away from everything living online!)

There’s a massive paradigm shift going on here, using this site single-handedly creates new avenues to connect with fans and then manifesting the connection to mean something greater for the bands.

Record labels should stop worrying about p2p pirating and start worrying about these guys….

this site + a solid street team + and a good booking agent = game over

Video about the site here.
Special video about the online promo cards here.