Sunday, August 3rd, 2008

Memo from the past: Don’t fight city hall

in: Competition, Create, Startups

Sometimes, the benefits of a new product are so awesomely, amazingly, tremendously good that people are willing to change their behaviors.

It’s not going to happen for you. Most of the time, people won’t work to try and understand a new approach. And no amount of education is going to change that.

koolaid6mixs.jpgThis is a fundamental challenge for entrepreneurs. We’re deep in the product, conjuring up reasons why it will win in order to attract investment and keep our employees motivated. But just because the rank and file is drinking the Kool-Aid doesn’t mean the rest of the world will.

There’s a great example of this, and it’s not just a small company example. It happened to the word processing industry.

Read more…

Monday, July 21st, 2008

The path less travelled by

in: Communicate, Create, Standing out, Startups

What can a bookstore teach Canadians about positioning their companies?

Marketing is increasingly about attention, and less about product.

Most competent people can build a competent product or service. But in today’s world of instant attention, it’s often more about how to succeed in the market than how to get the product right.


I had lunch a couple of weeks ago with Robin Axon, formerly of VenturesWest (and candidate for the coolest cyborg name of a VC ever.) We were chatting, as often happens among Canadian entrepreneurs, about The Canadian Ailment. Despite tremendous competence in product design, we never seem to make it North of the Border in the same way the US does. Even US bookstores, apparently, know this instinctively.  But more on that later; back to Robin.

He had a pretty clear theory about what ails us, which I’ll paraphrase (badly) here:

Canadians try to succeed with a product, but Americans succeed with a market strategy.

Read more…

Wednesday, July 9th, 2008

Targeting and repetition

in: Communicate, Create, Standing out

The Nova Scotia Liquor Commission is trying to sell more wine.


This campaign does three things really well. If you’re trying to put together a marketing effort, you should:

  • Know the purpose of your marketing effort. A lot of times I have clients tell me, “we need to do some marketing.” They’re often surprised when I push back. But unless they know what outcome the marketing should have — and how to measure it — it’s a waste of time. The Nova Scotia Liquor Commission clearly wants to sell more wine, and can measure sales of wine that accompany beer purchases.
  • Know your target audience. This picture’s taken in the gigantic beer fridge. There’s no wine in this room. It’s where the men go to get cases of beer. Nagging reminders from housewives with facemasks and towels on their heads might be stereotypical, but their target market notices them.
  • Repetition, consistency, and simplicity. Every message is a variation on, “while you’re getting beer, bring some wine home for your wife.” There’s no way to mistake it. It’s something even a beer-obsessed weekender can grasp.

When it comes to beer, nothing beats Nova Scotia brewery Alexander Keith’s focus. They even have a bar (the Lower Deck, the “official home” of Keith’s.) Revel in these gems where a mad Scot channels Mike Meyers, some of my favorite ads of all time.

Spilly Talker

Label Peeler

Who’s With Me?

Beer Eulogy

Beautiful. “Often, I’d dreamt of a lake of beer. But not like this. Never like this.”

BTW, the actor who played this Scotsman was arrested on charges of child pornography, and Keiths has since pulled them. Sick bastard, but the ads are no less funny.

Monday, June 9th, 2008

Not following through on an idea

in: Create, Startups

A lot of startups have great ideas. But unless they follow through with them to the end, they can backfire.

Like mugs, for example. I was at a Starbucks in the Bay Area recently and someone brought in their own mug to avoid using paper cups.


Unfortunately, Starbucks tracks cups by writing your name and order on them. It’s how they survive the chaos of the morning rush. So the same company that says, “save the planet, use a mug,” puts those mugs in paper cups to keep track of them.

A lot of startups have a great idea, but they fail to think it through all the way. This is a great example of the consequences of thinking it through. If you have a concept, you need test cases. You need to describe your end user in great detail, then build a prototype, then watch them use it, and then iterate quickly.

Monday, June 2nd, 2008

Scarcity rocks

in: Communicate, Create, Standing out

I wrote an article a while back about Linkedin and Notchup. The short version: With a particularly viral offer, Notchup used Linkedin to harvest and enrol 900,000 users in around 3 weeks.

kk-hotdonuts.jpgMany of the blog comments that came back concerned scarcity. The whole premise of Notchup was to help recruiters find the hottest candidates–the ones who weren’t looking. They figured that it was worth paying to talk to this talent, and with a decent paycheck at the end of it, even the most tight-mouthed candidate would be willing to part with some personal details.

But with popularity, the cachet of “reach the people who are hard to reach and not looking” goes away.I call this the Krispy Kreme problem. A friend of mine handled operations for the donut maker years ago (sort of the opposite of high tech), and he wondered to me one day whether the fact that you could get their donuts pretty much anywhere was a bad thing. He was right.

Unfortunately, scarcity doesn’t scale.

Read more…

Monday, May 26th, 2008

Plan B: Five reasons companies merge and acquire

in: Competition, Create, Exit strategy

Every startup dreams of making it big. And some do; but it’s vastly more likely that you’ll get acquired by a bigger fish.

This is one of the reasons VCs look so hard for exit strategies involving other people in your market. It’s a more likely outcome, and it means that if when things go wrong, you have a Plan B. It’s important to understand why companies want to merge and acquire within their space.

When acquisitions happen, particularly by public suitors, the business must be accretive to revenues in the first year, and must not impact margins. This is because the public company’s investor’s will scrutinize revenues and margins, and will expect to see an uptick. So the obvious motivations for acquisition are for getting new stuff to sell to existing customers, or for getting new customers.

When a market consolidates — meaning firms of roughly equal size acquire one another, or the bigger players roll up the smaller ones, different criteria dominate. This tends to happen in “nuclear winters” like the funding shortage many think is upon us.


Strategic Marketing 101 talks about four kinds of products: Stars, Dogs, Cash Cows, and Question Marks. The classification comes from two dimensions: Whether the product line is profitable (showing things like decent revenues and good margins) and whether it’s growing (showing an increased number of users and buyers, with hopefully an accelerating rate of adoption.)

Everyone wants a star, and that’s what startups are after. Most startups are question marks: No customers, no revenues, and high hopes. If they can get both growth (customers) and profitability (revenues), things are good. But if they manage profits without accelerating growth, it’s a clear sign that mergers are in the cards.

Here are five other motivations behind M&A in consolidating markets. Read more…

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