Tag Archives: Marketing

Secret Judo Guides Start-Up Success

What do you know about martial arts? Here’s a few things I found through a combination of sources:

  • Karate – is a series of punches, blocks and kicks that focuses on strength and offensive techniques; a primary theme is to either put or catch the opponent off guard and then attack.
  • Tae Kwan Do – incorporates many aspects of karate, but with more emphasis on the use of feet and spinning/flying kicks.
  • Jujitsu – uses strikes, kicks, strangles, locks and takedowns to disarm the competition, still aimed at offensive techniques for the most part.
  • Judo – uses throws and its intent is to avoid an opponent’s strength while redirecting its power to one’s benefit.

Tom Tunguz (whom I have quoted before), in his blog Ex Post Facto, encourages entrepreneurs to recognize the highlights of  judo philosophy  in never trying to fight strength with strength, and to find ways to maximize leverage. Tom also references Peter Thiel (from a series of lectures given at Stanford Graduate School of Business) who describes the use of a “secret” to secure a unique niche within your target market. The “secret,” though is not as one would think, but instead “something just not widely believed to be achievable or feasible. In other words, it’s an insight, a thesis that isn’t widely held.” The Secret becomes the “flywheel” of Jim Collins’ strategy – a series of well-executed small decisions that others find it near impossible to duplicate. For many entrepreneurs, the choice of distribution channels is a ripe field for building out one’s “secret.”

Tunguz writes of distribution:

Many companies are now using distribution as their secret – mobile app stores and Facebook Open Graph enable startups to access hundreds of millions of users in ways that incumbents simply aren’t prepared to leverage. Expensify uses mobile app stores to acquire hundreds of thousands of SMBs in ways that their market’s incumbent, Concur (market cap $3B), simply can’t copy. Branchout is building a massive job network on top of Facebook to compete with LinkedIn. If LinkedIn were to copy Branchout, they would marginalize the value of their existing network because LinkedIn would cede their graph to Facebook – an example of the classic “innovator’s dilemma.”

In order to remain relevant, (solve the innovator’s dilemma), entrepreneurs must find a way to continue to grow new ideas within their organizations, less their businesses become to mainstream and lose their uniqueness. This is where/how moving to principles-based strategy trumps reliance on a skilled technician and his or her own suite of strengths and abilities. Continue to recognize what strengths competitors have, then find a way to use those strengths against the competition and towards one’s own competitive advantage!

Start-Up Key: Sell to Educated Customers

Tom Tunguz of Redpoint Ventures has a WordPress blog I follow, Ex Post Facto. While many of the posts are over my head in terms of technology terms, his posts on carving out a market advantage always catch my attention. Today’s post, “How to Pick Your Start-Up’s Market,” makes the point that the Goldilocks Principle is key–picking a market that is right-sized; neither too big nor too small.

Tunguz credits the Blake Masters blogs, and Peter Thiel’s summary classes in particular, with illustrating what others have learned through expensive market plays. In “The Last Mover Advantage” class, Thiel argues that:

Too small a market means no customers, which is a problem. This was the problem with PayPal’s original idea of beaming money on palm pilots. No one else was doing it, which was good. But no one really needed it done, which was bad.

Markets that are too big are bad for all the reasons discussed above; it’s hard to get a handle on them and they are usually too competitive to make money.

Tunguz attempts to explain major internet successes by combining Goldilocks with Last Mover:

  • Google – last mover in search and search ads. The search market was roughly half of the $8B market– not too big, not too small.
  • Facebook – last mover (at least for now) in social media. Social media ad market was less than $1B when the company started.
  • Dropbox – near last mover in consumer storage. The industry was considered unprofitable by investors given Mozy and Carbonite’s trajectories and was at most $2B at the time the company started.
  • Apple – near last mover in portable music players and computers. What a turnaround we’ve seen.

Common across all these examples is significant market growth driven by one company who brought much better product design, strategic management and effective sales processes. It’s easy to point to the product differentiation – later founders used previous product generations and built something significantly better. But it’s also easy to overlook the importance that sales had on most of these companies.

  • Google had a team which mechanized closing and on-boarding large search partners growing the revenue base dramatically.
  • Dropbox focused significant fractions of their engineering team on optimizing conversion-to-paid funnels. And they maxed out the refer-a-friend program.
  • Apple built the best retail experiences which today drive a huge, but undisclosed fraction of sales.

Significantly, Tunguz goes on to say that each of the example successes were selling to a market that someone else had educated. It is important that the target customers already knew both the Problem and the Solution the product(s) were created to address. In each case, others had been first-to-market, but were not offering premium products. With a premium product and an educated consumer, the start-up enjoys favorable pricing and better selling scenarios. Who wouldn’t want those factors in their favor, right?

Avoid 5 Positioning Mistakes

When a company is trying to get off the ground, it is critical to send the right message to the right audience in the right way at the right time. However, entrepreneurs with fantastic products or services often ruin their chances at making the sale, securing the revenues, and building credibility by being inexact in how they position their offering.

Admittedly, it is challenging to create and refine a value proposition when there are so many other demands on your time.  Frequently, entrepreneurs work on concept, design, and other technical details without giving earnest heed to the value of top-notch marketing. Is this because marketing is seen as a discretionary expense? Is it because the typical entrepreneur has bought into the “build it and they will come” idea? For whatever reason, the decisions regarding market penetration strategy are poorly executed and offerings positioned poorly more often than not. If you’ve never applied the premise that “you never get a second chance to make a first impression” to business, do so now! Your company’s success depends upon it!

Start by determining within your team what success will look like and how it will be measured. Take time to ferret out what, exactly, you are offering, how it solves a unique problem, and how your approach to the market is both unique and appealing. Once you have ironed out some of these influential factors, take the time to think about your intended target and the nuances of explaining your offering in such a way that you “rise above the noise” of distraction and become intriguing to them.

Don’t make any of the 5 mistakes below when launching your business. Not surprisingly, targeted investors, employees, and customers often evaluate you before they commit.  You can enhance the chance that you will earn the commitment you deserve if you follow the advice of David Scholtze of Ariadne Capital. Writing in Entrepreneur Country a couple of months ago, he described “The 5 typical problems I keep seeing in misaligned propositions”:

1) Thinking big and forgetting the baby steps that get you there

The real market opportunity is won one sale at a time are you constantly refining your sale or slapping it out there? Go-to-market is about aligning your achievable market to your vision, are you building credibility?

2) Spread too broad and lack focus

Fix-all solutions are hard to buy or too good to be true, is your proposition tight? Tight propositions mean new services can develop in parallel, are you giving too much away in solving too much?

3) Forget that your audience don’t know your product

Even high tech can be simplified beyond technology into enablement, can your mother understand the proposition? Don’t assume your market knows the problem like you do, are you selling from a common starting point?

4) Defining the proposition as a nice to have not a solution

Too much emphasis is put on the extra benefits, are you selling lots of benefits or a solution to a specific problem? People feel the need to over validate with external information, are you forgetting the original “spark” that led to the solution and how you solve the problem?

5) Don’t align the message to the solution

Proposition pitches try to be catch all and complex people buy simple, are you selling a solution or a service? People are looking to solve a problem, does your product proposition enable champions and evangelists?

Once you understand, plan for and execute along these principles, you can create a strong market position.  This means you can challenge your sales team, empower your marketers and “wow” your investors. Only good things can happen from there…

 

Content That Speaks C-Suite Language

 

Roanne Neuwirth of the Farland Group (http://www.farlandgroup.com/) writes in a post this week for The Content Marketing Institute that McKinsey & Co has mastered the language of the c-suite. McKinsey Quarterly newsletters are read by corporate executives because the subject matter is engaging, relevant, and contains key topics related to global business excellence. Here’s what distinguishes their approach to content that has proven to be so effective:

Data-driven credibility. Whether a survey of hundreds of technology executives or interviews with 15 chief strategy officers, McKinsey starts with peer  insights and gets compelling facts on which to build their content.

Actionable, relevant, timely information. McKinsey focuses on leading-edge management topics that are  top of mind for executives and shares cases, examples and stories of how other executives have taken action on the opportunities and challenges presented. It’s easy to see how to take these ideas into other environments.

Succinct insights. McKinsey extracts the key points, the most relevant highlights and the most provocative  ideas in the layout and design making the key takeaways easily identifiable and consumable.

Channeling their audience. McKinsey moved its  model to a stronger focus on online formats (audio, video, print) and shifted the print publication to quarterly round-ups. It has integrated a strong social and email strategy to ensure that the content gets to executives in formats that matter.

Even though top executives can be challenging to approach, it is well worth the effort. They control the purse strings.  For marketers in the B2B setting, knowing how to attract and engage the attention and commitment of this critical target audience can make a business very successful.

 

Know that top executives think Return On Investment continuously—whether the investment is their time or the purchasing power they wield. As a rule, the psychographic mindset of the C-suite is to trust a small handful of advisors as subject matter experts. Inherently, most sales approaches are mistrusted and it is very hard to gain enough gravitas to be heard among all the voices clamoring for the right to earn the respect and trust sought.

 

Farland recommends the following guidelines for their clients to penetrate the C-suite “blockade”:

  1. Hard facts drive credibility… and credibility is key. Content based on data makes an impression on executives; peer-based insights and stories add to the credibility of the data collected
  2. Provide actionable and timely information on issues that matter, in formats that allow ready extrapolation. There has to be a “so what” that comes out of the data and it needs to be up-to-the minute, on topics relevant to the executive’s business, role, and current challenges.
  3. Summarize, summarize, summarize. Deliver your ideas with targeted summaries, succinct points, where the bottom line ideas and actions are easy to extract and consume.
  4. Channel matters. With executives in particular, the content has to be easy for them to access, wherever they are — on their iPad during a flight, in a printed paper to peruse after dinner, or in a short video while waiting for a meeting to start.
  5. Push beyond the common wisdom and top-of-mind trends. Executive content needs to present a provocative vision for future possibilities.
  6. Evolve from technical to strategic. Executives are not interested in reading about technologies and products—those are only a means to an end…Position solutions in terms of the bottom line and what can help grow the business.


Like Being in a Rut?

As a business owner, every day brings new challenges and issues that demand our attention. When 100% of our time is given to doing the business (marketing, selling, making, fixing, shipping, accounting, etc.), we’re stuck.  We’re in a rut that (often) leads to failure. Perhaps not failure in the sense of going out of business or having to take a day job, but a missed opportunity to see the business become what it could/should be.

It’s a common trap we can all fall into.  We have something the market wants.  Demand increases and the technical activity associated with getting and filling orders completely fills our schedules.  Forty hours per week becomes fifty and then sixty.  We start taking work home (it’s a sign when what we once enjoyed becomes work).  Everything becomes more mechanical.  We lose balance often at the same time our business is losing steam.

When we’re in the rut, the solution appears to be counter-intuitive and impossible to execute, but we must allocate a portion of our time to work on the business if we want our business to survive.  It’s not optional – it’s essential. You may have heard the admonition to not work in your business at the expense of working on it–the question, though, becomes “how?”

We need to continually infuse creativity into our business–if we want to stay out of the rut.  That won’t happen if we don’t:  1) purposefully allocate time for it and 2) utilize an agenda that maximizes the creative input in the time allocated. The best solution to infuse the most creativity in the shortest amount of time is setting aside 5 days per year with your executive leadership team and 90 minutes or less per week (5% to 6% of your total work hours), using specific agendas to extract creative input to prioritize, solve your issues, maintain focus and advance your company.

Applied faithfully, this regimen will move you and your company to a top performing level. Rather than rehashing worn out frustrations, being stymied in your rate of growth, or feeling like you have to come up with all the answers by yourself, you will find freedom, organization, and synergy flowing from your efforts. Dare to try it!

A special thanks to Don Tinney, who posted many of the concepts above in a blog entry this week at http://www.eosworldwide.com