SXSW – Summary

Saturday afternoon was kicked off by a keynote by Seth Priebatsch, Chief Ninja of SCVNGR.  I liked that Seth incorporated playing games into his presentation, which made it really interactive.  I’m really excited about the prospect of integrating real-world and online experiences, and I enjoyed the presentation.

I wrapped up the first day (other than checking out the Digg Nation party that evening) by attending a session on how countries around the world use social media, which was one of my favorite sessions because it included an open discussion with many SXSW participants who were coming from around the world.  It was interesting to hear that companies have very different approaches to social media (and, of course, preferred social media networks) around the world.  Regardless, Facebook and Twitter still dominated the discussion.

The following day, my favorite session was Guy Kawasaki’s presentation about Enchantment. I’m almost done reading the book, and Guy’s presentation was a great way to solidify the key take-aways from the book and hear additional supporting anecdotes.

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SXSW – The First Morning

I spent the weekend in Austin at South by Southwest Interactive with the imo team, which I recently joined.

This was my first time at SXSW and I had a great time.  The event was much larger than I expected – close to 20,000 attendees over the course of a week.  This made for some pretty packed sessions and escalator rides!

I arrived late on Friday night, so the first panel I attended was on Saturday morning – Social Media Mythbusters, presented by Peter Kim of the Dachis Group.  Peter had some fantastic examples of memorable marketing campaigns, including one from Nuts Online about their “nutty” campaign to save Jericho.  Nuts Online shipped 40,000 pounds of nuts to CBS to lobby for the show to be saved.

I’ve met Jeff from Nuts Online and I love that the company is a family business that has been passed down for three generations.  I also love that they sell the most excellent chocolate-covered macedemia nuts ever!

Back on track.

I then attended a “Core Conversation” (i.e. an interactive session in which the participants and speakers sit in a circle and interact closely), hosted by Cathy Brooks, Founder & Raconteur at Other Than That, and Ellen Mcgirt, Senior Writer at Fast Company.  I’ve been a subscriber to Fast Company for 7(!) years, so I was excited to listen to the hosts’ (and fellow participants) discussion of online identities and authenticity, and let Ellen know that I’m a loyal subscriber.

After the session, I met Michael Margolis of Get Storied, a professional storyteller.  Michael helps companies and individuals create narratives around their work and passions, which I thought was a fun way to spend the work day 🙂

And that was just the start…

Useful App of the Week: Android Barcode Scanner

A few mornings ago, my flat iron broke (not a great way to start the morning).  When I got to the store that evening to pick up a new one, I was paralyzed by almost 20 different options and immediately wished I had taken the time to do research before I got to the store.  The experience reminded me of an article I had seen in the New York Times about customers being paralyzed by too many choices and limited information about the benefits of any given product.

Then, I remembered that my G2 had a barcode scanner and got to work scanning the barcodes of all of the flat irons (for good measure), including ones that were “infused with avocado oil” and “included crushed pearl particles.”

The barcode scanner was easy to use and often identified the product by name and model number.  I then clicked on the button to search the web for the item and, inevitably, one of the first results was an Amazon listing of the product, which includes user ratings directly in the result.  Based on these, I was able to make my decision within minutes.  The barcode scanner is my new defense against shopping paralysis.

To Start-Up or To License?

One important decision to make when creating a new product is whether to sell the product directly to consumers (or businesses) or to license the technology.  There are, of course, various mixes of the two approaches.  For example, a company can be established solely to develop and license products.  Or a company may need to be established and the technology proven in the market before it can be licensed.

At the outset, it may not be obvious which route will be more successful.  However, there are some indicators that can hint at whether licensing or selling the product directly is the better route to market:

  1. Existing intellectual property rights
  2. Established distribution channels and barriers to market entry
  3. Technology production and manufacturing capabilities
  4. Funding opportunities and financials
  5. Lifestyles preferences of the founding team / inventors

Below is a matrix that may help clarify whether a technology would be better commercialized via licensing or selling directly to consumers.

 

License Idea Sell Directly
Market research indicates a market

Yes

Yes

There are high barriers to entry

Yes

No

You can protect intellectual property

Yes

Yes

You want to be an entrepreneur

Not really

Yes

You have knowledge and access to resources for production

No

Yes

You will be able to obtain financing for your business by demonstrating favorable ratios and financial statements

No

Yes

You plan on “going it alone” without a team

Yes

No

You have a high tolerance for risk

No

Yes

Top 10 Innovation Marketing Blogs

If you’ve created a new product and are wondering how to encourage early adoption (and viral spread), check out these blogs, which regularly feature advice that you might find helpful.  They’re also some of my favorites!

  1. How to Change the World – I’ve been a fan of Guy Kawasaki’s books and writing for many years.  His recent post on how to enchant customers is an example of why I’m a committed reader of the blog.
  2. Chris Brogan’s Blog – Tips and insights on marketing & all things related.
  3. Duct Tape Marketing Blog – Focused on small business, this blog offers many tips for marketing on a start-up budget.
  4. Copyblogger – More than just about copywriting, this blog covers tips for creating meaningful content (a great way to go viral!).
  5. Heath Brothers – The authors of Made to Stick and Switch have interesting insights into psychology and sociology, with many marketing applications (and examples).
  6. HubSpot Internet Marketing Blog – The blog offers a mix of strategies and tactics for online marketing.
  7. The Viral Garden – How to’s and tips for social media strategies and creating viral content.
  8. Influential Marketing – Plenty of tips and reviews of successful and floppy marketing campaigns.
  9. Viralogy – Focused on social commerce.  Although this site includes news about products from viralogy, it also has interesting coverage of the social commerce space and successful campaigns.
  10. Seth Godin’s Blog – Short & sweet food for thought.

What marketing blogs do you read?

Social Networking Doesn’t Matter

In a controversial article for the Harvard Business Review, Nicholas Carr wrote that information technology (IT) doesn’t matter.  To grossly summarize, the article claims that IT’s ubiquity diminishes its strategic value as a competitive advantage so that IT has become a commodity input.  Carr makes the point that IT is an infrastructural technology – a technology that increases operational efficiency through sharing and general adoption.  Unlike a proprietary technology, infrastructural technology does not allow any individual company to accrue the benefits of the technology, although infrastructural technologies in their early stages may act like proprietary technologies because of high initial costs of adoption and, thus, a barrier to entry.

Recently, I’ve heard many people, including friends, colleagues, and the friendly and collegial strangers I follow on Twitter, complain about difficulties of managing multiple social networks.  The increasing tide of concern led me to suspect that Carr’s reasoning about IT may also apply to social networks.  Increasingly, merely a presence on a social network does not render a business competitive.  However, an absence from one of the major networks (Facebook, Twitter, LinkedIn) can be equally damaging because such a presence is in many ways an expected element of the marketing strategy.  As social networks become essential infrastructural components of the marketing landscape, it is no longer enough to redundantly post press releases across different social networking platforms (read this Fast Company article for reasons not to link your Facebook to your Twitter account, for example).

According to Carr, overspending is one of the dangers of adopting broad IT practices to keep up with competitors rather than doing so strategically.  The only way to leverage IT so that it becomes a proprietary technology is to have superior insights into its use.  The same caution should apply to social networking strategies – it’s possible to spend inordinate amounts of money on social network marketing expertise, but this alone does not necessarily lead to successful outcomes.  Thus, before creating a presence on social networks, it pays to consider how the strategy will fit into your broader marketing mix and, indeed, whether it reaches your target demographic at all and whether there is an opportunity to use social networks to your advantage, perhaps to reinforce your brand, help you build a community, or gather consumer intelligence.

Brand consistency can be a challenge with fragmentation across different social networks, as well as online and offline campaigns.   While social networks can reinforce your brand and your message, they can also dilute its value if consumers see your company in a different light through your social networking activities than they do offline.  In some cases, social networking may fragment your user base across different sites rather than bring them together around a common message, particularly since each social networking site reaches a different demographic.  The first step, therefore, is to ask whether a presence is warranted on all social networks, or whether you should selectively target the networks that are aligned with your brand.  For example, many musicians use MySpace whereas many professionals are more likely to be found on LinkedIn or Ecademy. You may not need a corporate presence on Facebook or Twitter if your business services other businesses rather than individual consumers.

In addition to reinforcing your brand, you can also use social networks to more deeply involve your community.  By aggregating passionate consumers and potential customers, you can encourage brand loyalty, entice customers to make subsequent purchases from your company, and help your customers feel like they are part of a broader network in which they can find like-minded individuals.  Your customers may band together around challenges that are common to your consumer demographics, but beyond just your product.  The question, of course, is how to engage your committing, particularly given the aforementioned fragmentation.  The strategy should derive, once again, from your audience and what you hope to achieve by building a community.

With a great opportunity to build an online community also comes a great responsibility.  The costs of deploying social network marketing strategies include costs of monitoring the community. Unfortunately, social networks can also be forums for dissatisfied customers and detractors to very publicly voice their objections.  The issue of control over communication about your brand is very serious, as is the issue of how the situation is handled.  Some companies limit comments on their social networks, which leads some people to question how open and honest the companies are to creating communities.  On the other hand, some companies monitor the interactions closely and remove dissenting opinions.  In this case, monitoring costs can rise quickly and customers may wonder if the communication on social networks is honest (should negative customer feedback be removed from the site or should policing be limited to expletive remarks, for example?).

Apart from encouraging your customers to form a community around your products and their common interests, you can also tap into the collective intelligence of your consumer base to better understand their needs. This is somewhat different than building a community.  Using social networks to gather consumer intelligence and crowdsource solutions requires additional planning.  You may choose to actively solicit feedback with surveys and questions about what your customers (or the general public) would like your company to provide.  For example, LinkedIn offers a Answers feature that allows you to post inquiries to LinkedIn users – a very active community of professionals.  Alternatively, you may choose to monitor social networks for your name, as well as the mentions of your competitors, to understand how your consumers perceive your product and what they may need.  Twitter is a network particularly rife with opportunities for gathering consumer reactions, so you may wish to use Twitter search to check for tweets mentioning your products, your competitors, or your industry.  You may come across comments from consumers who are either very excited or very disappointed with a particular product because customers who don’t have a strong sentiment either way may not post their thoughts.  However, social media can be a great gauge for how you and your competitors are perceived in the marketplace.

As they have evolved, social networks have become an essential part of the marketing mix and, increasingly, an infrastructure technology.  Thus, social networks present many opportunities for understanding your existing and potential customers, crowdsourcing, reinforcing your brand, and building a passionate user community.  However, simply having a social networking presence can be costly and is simply not enough.  And so, now that social networking doesn’t matter, we have to be even more aware of its impact.

Winning Business Plan Competitions – Part II

Continuing from my post a few weeks ago, I wanted to comment on the elements of some of the strongest business plans I have seen in competitions:

Having a clear route to market: This involves identifying a tactical plan, not just a strategic plan, for how a venture will access its target markets.  This involves an understanding of the potential customer’s demographics and behavior rather than using only the market size to estimate the number of potential customers and the eventual size of the venture.

Working with a knowledgeable team of advisors and mentors: Many first-time entrepreneurs face questions about their credibility or knowledge about a particular market or aspect of business operations.  By finding industry and management veterans who are willing to share a bit of their time to help you navigate challenges, you can address concerns about how you will deal with problems that might arise.  In addition, by including a list of current advisors, you can show that you are proactive in anticipating challenges.

Making sure to have a thorough understanding of the competition, particularly how it will react to new entrants: Naming your competitors and explaining why their product is inferior to yours is not enough.  Competitors who are already on the market may have resources that allow them to engage in a price war or roll out a product similar to yours more quickly, thus undercutting your customer base.  You should also consider companies that can easily re-purpose their production or sales force into your market.  While intellectual property can offer some defense against infringing competitors, it can be prohibitively expensive to defend.

Building a profitable business model based on realistic predictions and market entry: Think about how the growth of your customer base may be influenced by the growth of your sales team and different phases of adoption of your technology by customers in addition to how much your customers would be willing to pay for your product and how many units you will sell.  Remember, also, that pricing is both an art and a science.  One of my favorite books on the topic is The Strategy and Tactics of Pricing: A Guide to Growing More Profitably by Thomas Nagle and John Hogan.

Mitigating risk: We all know that start-up ventures are risky.  By enumerating possible risk factors and briefly explaining how you plan to address them, you show that you are aware of problems that may arise and add depth to your analysis.  Often, the section on risk mitigation is included at the end of the business plan.

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