Tag Archives: Consulting

Navigating To Success

One of the roles I play along with my regular consulting gig is an advisor. I am what’s call a “Navigator” at one of the oldest incubators in the area. Each month, the Navigators get together and listen to a pitch from a resident company. It’s good practice for them (you can NEVER have enough practice pitching your business) and it’s good for us to become better-versed in what’s going on.

Most of the companies headquartered at the incubator are engaged in scientific research of some sort and there are a lot of Ph.D.’s wandering around the building. They know a phenomenal amount about their fields and about the company they’re germinating. The problem is that they don’t seem to know that they’re building a business and not a science experiment. We had one of these get-togethers yesterday and I was speaking to another Navigator, comparing notes about the companies we’ve seen and the pitches we’ve heard. He had found, as had I, that most of these very smart entrepreneurs had no trouble explaining the nuances of some very complicated science but had massive difficulty in explaining how they were going to make money.

A book from a few years ago wrote up research that found that 87.5% of Millennials disagreed with the statement that “money is the best measure of success.” On a personal level, I couldn’t agree more with their thinking. There ARE many more important things in life that reflect success and failure. On a business level, unfortunately, that’s dead wrong. When you raise capital, your ability to provide a return on that investment – i.e. money – is the measure of success. Otherwise, you’re not a business: you’re a charity. Since these entrepreneurs – almost all of whom are Millennials – claim to be building businesses, part of what I and the other Navigators help them do is to focus on the business of their business and not just on the science and their products.

We ask them the kinds of questions I hope you ask yourself. What problem are you solving? Who else is solving it? Why is your solution better? How much will it cost to build your product at scale? How is it priced? What is the profit margin? What’s the competitive set in how big a market? Pretty basic questions, I know, but these are smart people who have never been asked them before. The ones that can answer them clearly are the ones that will get funded and survive. Do you fall into that group?

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Filed under Consulting, Helpful Hints, Thinking Aloud

The Pivot

Way back when in 1995, I was working at ABC Sports as their VP of Marketing. My job entailed meeting with advertisers and constructing packages of media and on-site benefits. We’d collaboratively design in-program elements, popularly known then as “enhancements”, to capitalize on the marketers’ involvement with a sport or an event. These things all took place on-air or on-site. The other big “on” – online – didn’t exist.

One day the president of ABC Sports walked into my office and asked me if I knew anything about computers. As a user of AOL, Prodigy, Compuserve and other early services, I replied that I did. He informed me that I was in charge and was to attend a meeting. ABC corporate had made a deal with this little start-up of under a million users called America OnLine and I was now to provide sports programming on behalf of ABC.

That was my pivot into digital. I didn’t realize it at the time, but saying “yes” to my boss’ question and being willing to take on some new, different responsibility had changed my life forever. None of us knew at the time that digital was going to disrupt the television business. We certainly didn’t think of it as anything other than an interesting sideline. But we began to see a little money coming in based on what we were doing, and once in a while, I could add some online stuff to the broad package of rights and benefits I was offering in my “real” job. Less than 5 years later, my job had become fully centered on digital, as I was now running a division of the NHL that didn’t even exist when I entered the digital world.

Being willing to pivot is a critical thing. Many businesses would be long gone if they were unwilling to do so. Foursquare, for example, pivoted their business from a consumer product to a B2B product, providing “location intelligence” to marketers. 90% of their revenue comes from that change. YouTube started as a video dating site. Nokia was a paper company. Twitter was a podcasting network. None of those businesses would be as successful, or maybe even exist, if they hadn’t been willing to shift their business paradigm and pivot.

I’d love to tell you that I saw the digital tsunami coming and got out in front of it on purpose but that would be a lie. I was lucky enough to ride the wave once it did show up because in my mind we were just doing what we’d always done – making great content and deriving value from the attention users gave it – albeit through a very different channel. The pivot was allowing my mind to be open enough to make that connection and to take the risk that it would be a rewarding road. Is your mind open to things like that?

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Filed under digital media, Growing up, Reality checks, sports business

Weenies!

It’s the start of the college football season this Foodie Friday and that means weenies. You may call them pigs in a blanket but my daughter and I, who are aficionados of them, refer to them as weenies. One football Saturday several years ago we heated up a tray to watch our favorite team play (Go Blue!) and have never looked back. They are a staple of our game day experience and we’re so serious about them that we have tried just about every brand we could find. We learned a few things, some of which have to do with your business as well.

The first thing we learned was that these are one of those foods that are just as good bought frozen as making them yourself. It’s not that they taste appreciably better from the store but the effort required to roll out the puff pastry and properly size either the cut pastry or the hot dog doesn’t yield a dramatic improvement over the best of the store-bought products. That’s an important business thought as well, as we return to the old cost/value equation. For consumers to choose to use your product or service to solve their problem, you need to provide a better return on their investment of time and/or money. In this case, the final results of our homemade weenies took a fair amount of effort that wasn’t a significantly better solution.

Next, we learned that not everyone’s concept of what a weenie should be is the same. We bought versions that were bland hot dogs in buttery puff pastry. Some pastry was dense, almost biscuit-like. Some had parmesan cheese rolled in. Some folks even try to pass off a bagel wrap as an acceptable option. Ha! None were perfect. We found that we loved one brand’s hot dog and another brand’s pastry. Yes, it crossed our minds to buy both and combine the best parts, but our top choice has decent enough pastry to negate the Frankenweenie from happening. But the business point is that you can call your product whatever you want, even a fairly common name, but not everyone is going to think of it in the same way. I think the IHOP even calls sausages wrapped in pancakes pigs in a blanket. That’s definitely NOT what we have in mind to munch whilst watching college football.

Present your product clearly. Excel at solving the cost/value equation from the consumer’s perspective. That’s a dish worth eating every time.

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Filed under Consulting, food

Living In A Potemkin Village

I’m not sure if the story is true (historians disagree), but back around the time of The American Revolution, Russia had fought a war to annex Crimea (talk about history repeating itself!). The governor of the region, Potemkin, was trying to impress the empress and the ambassadors from other countries as they toured “New Russia.” Although the region was devastated, Potemkin set up “mobile villages” which were populated by his men dressed as peasants. As the barges with the VIP’s passed by, they’d be impressed by how lovely it all seemed. Once they were gone, the villages would be dismantled and moved to the next location. The term “Potemkin Village” has come to mean any construction (literal or figurative) built solely to deceive others into thinking that a situation is better than it is.

The term (as well as a key plot element in Blazing Saddles!) came to mind as I read an article about a new app that allows businesses employing it to summon “its ideal crowd and pay the people to stand in place like extras on a movie set. They’ve even been handpicked by a casting agent of sorts, an algorithmic one that selects each person according to age, location, style, and Facebook likes.” Presumably, when you see the line, FOMO kicks in and you are overcome by an insatiable desire to join the crowd.

I’m not naive. I worked in TV for a long time and know how laugh tracks are used and how stage managers will fire up a crowd to applaud as a show goes to and returns from a commercial break. I get enough press releases to recognize hyperbole and the need to surround something very common with an uncommon sense of excitement. The use of this app by a business, however, reeks of opacity when transparency is a critical element in marketing these days. In my mind, it’s as bad as any other kind of “fake news” that is manufactured out of the air to advance an agenda.

How would you feel if you found out that most of the other people attending a party were paid to be there? Deceived, I’ll bet, and that feeling generally leads to anger and a determination never to go back. Is that how you want your customers to feel?

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Filed under Consulting, Huh?, Reality checks

Playing The Long Game

One of my favorite movies is The Sting. It’s the story of how two men run a long con. That, as defined by The Urban Dictionary, is:

A con-job that requires a certain amount of effort and as a namesake, is usually in it for the long haul. Gaining someone’s trust for a number of months and then when the stake is in your court and you have their complete trust–taking advantage of it. Usually denotes relationship status or high-level business partnerships.

In less evil terms, the protagonists are playing the long game. They are less focused on short term success as they keep their eyes on the rich reward gained over the long term. I’m a big believer in playing the long game, both in business and in life. Let’s address the business part here.

English: Marshmallows

(Photo credit: Wikipedia)

The folks at MIT‘/Sloane did a study about the digital maturity of various businesses. One thing that they found to be true of digitally mature organizations was:

Their strategic planning horizons are consistently longer than those of less digitally mature organizations, with nearly 30% looking out five years or more versus only 13% for the least digitally mature organizations. Their digital strategies focus on both technology and core business capabilities.

I’m always surprised at how many organizations have a short-term focus and which then wonder why they’re not gaining on their long-term goals. I’m not advocating spending time creating a 10-year plan or even a 5-year plan. I think seeing that far over the horizon is pretty much impossible in these times of rapid change. But I do think every business needs to have some long-term goals and a focus on meeting them while ignoring some of the short-term things that might cloud your vision.

Maybe you’ve heard of The Marshmallow Experiment. A researcher put young children in a room with a marshmallow for 15 minutes, telling the kids that they would get a second marshmallow if the first was still there when the researcher returned. What’s interesting about this is that the researcher did follow up studies with the kids over the next 40 years. He found that the kids who chose to delay gratification (and get a second marshmallow!) did better in life. They had higher SAT scores, lower obesity, better social skills, and lower levels of substance abuse. They were playing the long game, even at 5. Are you?

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Filed under Helpful Hints, Consulting

Thanks For Nothing

I get emails all the time urging me to win something. In a previous life, I used to send those emails as well. Because of that, I became very well acquainted with the rules that govern sweepstakes and contests. I’ve had multiple lawyers explain the three-legged stool of chance/prize/consideration to me on more than one occasion, and I’ve never run afoul of the gaming laws either here in the US or in Canada.

I thought about those rules as I reviewed an email from an electronics company this morning. The email urges me to “Get Rewarded For Sharing Your Opinion.” I had a couple of immediate thoughts that might just be pertinent to your business, whether you’re running a contest or not (BTW, I know the difference between a “contest” and a “sweepstakes” but I’m lumping them together today, OK (damn lawyers…))?

My first thought was to wonder if asking someone to write a review isn’t consideration? We used to wonder if asking for a photo or a video as part of an entry constituted consideration. My take is that even if it’s not deemed to be such by a lawyer, it is still asking someone to take some time and write a review. For some of us, writing is like breathing but for many people, cranking out a couple of hundred coherent words is grueling. Asking them to do so for a CHANCE to win a $500 gift card with nothing else as a consolation (a coupon, you cheap bastards?) seems like an unfair trade-off.

More importantly, the headline on the company‘s landing page is “Your Thoughts, Our Thanks?” Really? Unless you dive deeply into the fine print of the rules, you might not realize that unless your review contains a very specific phrase it won’t be counted as a contest entry. That won’t, of course, stop the company from using it in advertising and by entering, you’ve signed away all rights to it as well as the right to contest the company’s use of it and your name.

The bigger point is that the company is positioning this as a “win-win“:

Write an honest review and you’ll automatically be entered for a chance to win $500*. How’s that for a win-win?

It’s not, actually, You win. You get the content you can use to sell your products. A consumer might win but the vast majority of them will send off the review and get bupkis, maybe not even an entry if they haven’t read the rules carefully. You’re awarding cards every two months (and by the way, your entry doesn’t count after the two month period in which it was received). $3,000 over the course of a year for an important type of social proof – consumer reviews seems awfully cheap on your part, particularly when most of what you’re selling costs hundreds of dollars.

We can’t ask our customers for something beyond buying our products without offering something in return. Don’t hype a relatively low-level reward that’s not universally available to everyone supporting your brand when all you’re really offering is a fuzzy “thank you.” Your thanks? Thanks for nothing in this case. Do you agree?

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Filed under Consulting, Huh?

Learning From The Apocalypse

While you’re probably aware of the loss of jobs in the coal mining sector, you might not have been paying attention to what’s going on in retail. Department stores alone have lost 18 times the number of jobs when compared with coal miners since 2001. That doesn’t include all the smaller players that have gone out of business nor the number of jobs lost among those who are support people at shopping malls – cleaners, etc. The term you see most often as you begin to research this topic is “apocalypse.” If you’re in the media business, the music business, or many others, you might think of it as just another incidence of disruption.

Inside an abandoned mall in Allen, Texas. The ...

(Photo credit: Wikipedia)

One of the most disturbing things I’ve read recently was as study by GetApp, which reported that

Two out of three business owners who currently run both an online and physical store believe that they will close their physical store’s doors within ten years and operate their business solely online, according to new research conducted by GetApp.

In fact, there were over 3,500 store closings from Macy’s, JCPenney, K-Mart, and others this year. It’s happening because of technology and globalization. Ask yourself when the last time you went to the mall to go shopping. The only times I’ve been have been when I needed something in my hands immediately, and even that reason is being addressed by Amazon and others. It’s not going to get better, either.

So what do you do if you’ve invested millions of dollars building malls or other large retail spaces? That’s really the situation many businesses find themselves in. Not with respect to owning physical space but in having to expand their thinking. Landlords who thought of themselves as containers for retail are now having to think about servicing a different clientele. Churches, movie theaters, medical offices, gyms, and other tenants can move in while others move out. I drove through what used to be an outlet mall this weekend, and while it was pretty deserted (and kind of depressing), there appeared to be a couple of small start-up companies who had leased space. I’m wondering if the space was less expensive than comparable space in one of the many start-up hotels that have popped up seemingly everywhere. Of course, servicing these other tenants will require a different set of services and skills but that’s what disruption breeds, isn’t it?

The retail apocalypse is just one manifestation of what’s been happening for the last 25 years. Every business is ripe for disruption and it’s really a case of how far along it is in the process. The real question is how prepared are you as it’s happening?

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Filed under Thinking Aloud, What's Going On