January 17, 2011
Reports just out say that Apple shares are set to take a pounding, overseas markets gave up 8%, because of today's announcement that Steve Jobs is taking medical leave. Forbes is quoting an expert predicting up to 15% carnage to APPL's stock price due to a lowered multiple.
This is typical panic-paranoia-myopia behavior, because Apple will run full steam ahead while Jobs recovers. Many business-beat writers point out the bench strength at the company, the existing innovation pipeline and the reduced role that Jobs is playing. Tim Cook is a rock star, running day-to-day ops. (Business Insider: Apple Is Fine Without Steve Jobs, for now...)
This is typical short term biz-think by investors. When a person feels sick, his ability to be creative, patient or think critically will be inhibited. If Jobs takes a minute to increase his energy level (to use a video game device), he may come back with NEXT BIG THING. I think he deserves not just time off, but pressure off as well. His company is, IMHO, the shining star of USA-Industry right now. He's a super hero in my book.
We've got to send the following message to great leaders that battle with their health: We want you to take time off. We believe in your team. Don't kill yourself on the job on our account: most of us are just gamblers on E-Trade, etc. Buyers, wade in if you see a buying opportunity. Just a few days ago, without much assumption of a Jobsian breakthrough, one writer predicted that Apple would surpass Exxon to be the #1 company in the world. One article posed the question: Will Apple Be The First Trillion Dollar Company?
Quick, who's in charge of Exxon? Is there a central figure that's turning all the switches, bringing all the killer apps to work every day? Nope, and Apple should be no different. I mean honestly, if Bill Gates had bugged out to devote 100% of his energy to non-profit-world in '03 ... would Microsoft be any less or more great right now? And here's another POV - Jobs is an incredibly strong personality that could intimidate other (and better) ways of thinking as Apple grows into its valuation. Ever considered what would happen if Apple became more open or more truly social?
This is my point: Don't put the business on the shoulders of one person. It's not fair to him/her and will punish people for their success with a long-term sentence of 20 hour days, 30 meeting weeks and gigabytes of urgent information flowing through their battered minds. In the long run, much like me, who would want the hassle of starting or running a company of any size or significance?
People freak out, sell and evangelize Apple because of the products' user experience and design wow. Not Steve Job's presentation at the Verizon launch. Find an AppleAddict and ask him/her, name five things you love about Apple. Steve won't be one of them.
BUY APPLE ON THE DIP.
December 14, 2010
It's a fair question, I guess. All of us would love to catch a trend-wave, and ride into the beach with our pockets full of cash. We read about it all the time, from the dotcom boom to the rise of social media. Part of it is that we don't want to be left out, toiling in the past.
Here's the problem with this search: When you find it, and know for sure that it's the real-deal, you are usually too late to get a free ride. It's matured a great deal, and you will need to bring some real innovative value to the table to join it in progress. A better way to think about the 'timing of your life' is to be in search of "The Next Big You." That is when your capabilities, passions and purpose intersect with a sustainable trend. It could be a business trend (like quality in the 80's) or a tech trend (like social media today). That's what happened to me. I didn't look for the next-big-thing, I looked for a trend that leveraged what I had to offer.
When I went to work at broadcast.com (AudioNet in 1997), I connected my evangelism skills and marketing acumen to online broadcasting and advertising. The next big "Me" was the guy that sold the internet's potential, direct online marketing and communications innovation. It wasn't that I jumped in at the right time, it was a matter of fit: The trend suited me.
So, stop your search for the next big thing and instead:
1 - Identify three sustainable trends each January. They have financial value, are growing exponentially, and are generating tremendous buzz.
2 - Outline your core skills, interests and passions each January. Hopefully, you are adding something to your personal resume each year.
3 - Compare the two lists every month, to see if there's synergy. When you can straightline connect a trend with your potential, you now have something to pursue.
Whether by design or by accident, this is what all 'lucky' people do -- those that are often labeled as in-the-right-place-at-the-perfect-time. Bill Gates, Mark Cuban, Mark Zuckerberg ... all of them made this connection and made their mark.
November 30, 2010
Likely, you may also wish for his success - even if you don't know a lick of computer programming code. The movie (Social Network) and myriad books (my fave is The Facebook Effect) chronicle the rise and rise and rise of Facebook as well as it's multi-billionaire founder. Zuck. He's an iconic image, eclipsing others before him including the cats at MySpace, Yahoo and even Google.
So how did he do it? How does he think? What are his rules-of-the-startup road? Absent an auto-bio, there's little to gather from. But in my case, it's Déjà vu'. Between 1998 and 2004 I worked with two billionaire startup moguls pretty closely, and observed their personal operating systems. First, I worked for Mark Cuban at broadcast.com. Then, after he sold the company to Yahoo, I worked with Jerry Yang (and to a smaller extent, David Filo). Between the two of them, the make-it-huge DNA is out there to deconstruct, or as in the case of Zuck, emulate.
How To Make A Billion With An Idea:
1 -- Solve A Problem, Then Create An Addiction:In the case of AudioNet (later, broadcast.com), Cuban and Todd Wagner, saw a problem: Indiana University basketball games were not broadcast nationwide, where alumni could listen. So they solved that problem via audio streaming and soon, people got hooked on watching videos or listening to programs on their computers. Yang and Filo saw a problem: The internet was difficult to navigate, making it hard to find information on golf and sumo wrestling (their fave sports). So they created a guide to the web and people got hooked on searching. This is what Zuck saw at Harvard: No facebook solution for students to use to hook up or network.
2 -- Build Something That Scales: This is why most tech-billionaires can code, or at least have a firm grasp of technology. Absent this intelligence, you'll build solutions that crash when they take off (like Friendster or PointCast) or flame out because their niche appeal is just a novelty (not a solution). Zuck's obsession with keeping the system up at all times is likely the #1 reason for Facebook's continued success and growth.
3 -- Thing BIG: Don't limit your solution to the problem at hand, devise a plan to take over the world. Yang and Filo wanted to build the killer app that made the web mainstream. Cuban wanted to shake up the media industry, make a billion and buy a jet. Zuck, from day two, wanted to make the world more open. Without a BHAG, you won't attract talent, money and media with enough mass to bust a grape.
4 -- Keep The Biggest Slice For Yourself: Yang and Filo, somehow, held on to a huge amount of Yahoo (by investor terms), which mostly came from good negotiations and a positive cash flow situation (which by most accounts was in place by 1996). Cuban held on to even more (some speculate around 20%) by rolling over his take from his first startup into Audionet, limiting investment rounds, arguing well about valuation and giving a micro-slice of equity to employees. Zuck is much the same here, very good at holding on to his stake. Over time we'll see if he has 20% on IPO day...
Note: Not all blockbuster CEO's or founder teams did it this way. Dell and Google were much more generous, giving a higher % of the company to early stage employees and partners. Google went further: Setting aside 10% of shares for a social-change-the-world play (Google.org). That's a risky move, though, unless you end up being super=massive like Google was, you'll just be a multi-millionaire. Personally, I'd more likely do it this way if I was every crazy enough to try a tech-startup. But I digress, this post is about how to think like Zuck.
August 20, 2010
Yesterday, a Twitter system issue caused me to temporarily lose all my followers. One moment I had over 11,000, the next moment .... 0. The tweets were there, the following was gone. Poof! The day before, a friend of mine lost his Facebook account due to a (disputed) terms of service violation. He's been on for years, and had hundreds of friends there. Poof!
Fortunately for me, I got my account restored. Unfortunately for my friend, he's probably lost his forever. The whole experience begs the question: Marketers -- What would you do if you lost your following? It's very possible this can happen to you, and if it does, there's very little you can do about it. Think you can call Twitter, LinkedIn or Facebook like you can call Zappos? Wrong. You'll send emails, get form replies from dispassionate 20-somethings (that could care less about NetPromoter scores) ... and you are at their mercy.
A few years ago, when working at Yahoo!, I'd get frantic emails from people that lost their Mail accounts - losing tens of thousands of archived emails, etc. along the way. They too couldn't get a caring person on the phone and in very rare situations, I could help them. What do they do now? They use an email client (like Apple Mail, Entourage or Outlook) where all the data sits on your machine - not 'out there'.
If you are putting time into social media to drive your business, and building up an audience (following) to target - you need to find ways to localize the relationships to regain control of your destiny. If you are going to trust Twitter or Facebook to manage your following, you are really vulnerable. Here are a few takeaways for you:
1. Don't use social media to build up a big audience you can monetize later - If you use social media of any type, do it to be helpful. Think of your followings as congregations you help, not targets you can pound when your product launch is at hand. If you are helpful enough, your following will click over to your blog (and subscribe to the feed) or sign up for your monthly newsletter (now their in your domain). They key to conversion though, is a steadfast commitment to being helpful, not markety.
2. Back up your social media following: For Twitter, run Tweetake once a month (this free service will download your following, tweets, etc. to a spreadsheet). For Facebook, you can use SocialSafe. If you lose either following, you can hire a virtual service to either message them to rejoin (Facebook) or follow them on Twitter (where about 70% will follow back). Neither solution is complete or easy, but it beats losing everything.
3. Dedicate time to your blog and newsletter - Give each one a unique value proposition and never let them be less of a priority than what you do on Twitter, FB or LinkedIn. Think of any platform you have no control over as a marketing front end to those you own (like blog/newsletter,mail list, etc.)
When I first joined Yahoo!, I spent time with then CEO Tim Koogle. He started out at Motorola, where there were countless stories about founder Paul Galvin. One of them is relevant here. Koogle told me about one of Galvin's early businesses that made battery eliminators (for radios, etc.). There was a transition time when AC power (wall plug in) was being installed into homes, but appliances still ran on batteries. Galvin's company made the incremental adaptor solution.
Galvin went out of business, though. The appliance makers (Maytag to RCA) offered an electrical cord as part of the device and designed batteries out. Galvin was disintermediated! Koogles point: Always own your relationship with your clients, lest you get cutoff out of the blue. Get it?
June 09, 2010
A recent government report indicates that employees are quitting bad jobs as the economy improves. It's like 2004 all over again. Back then, millions went from lock-down bad jobs to startups and good employers when they gained some confidence in the market.
For the last eighteen months, I've heard employers sniff that "if their employees didn't like the workplace or task load, they could join the rest of the unemployed in line." While that might have been true in Q1 2009, it's not a long term strategy for talent retention.
In First Break All The Rules, former Gallup researcher Marcus Buckingham offers the #1 reason people quit jobs: Bad bosses. These bad bosses have a sense of entitlement, combined with Michael-Scott ineptitude that can lead to a jail break when the recession clouds part.
And according to this article (More Employees Jump Ship As Economy Improves), it's starting to happen. There are a few implications for you, whether you run a small company or work at an enterprise:
1. The current labor pool is weak, gunked up with everybody's B, C and D team from 2007. In other words, most people (75% or more) that were laid off were laid off because they weren't effective in their jobs and the poor economy exposed it. Trying to replace people you lose now is a whole lot more complicated than it was in 2006.
2. The work experience is as important as the customer experience. In his fantastic book, Primal Leadership, Daniel Goleman observed that the mood state at work was a predictor of employee engagement - which is the #1 way to retain talent. Focus on purpose, recognition, empathy and giving people what Dan Pink calls "Self-Directed Mastery". (For more, check out the RSA Animated Video: Dan Pink on the surprising truth about what motives people)
3. Give raises, bonuses and incentives as you can afford them. You might be tempted, for years, to keep thinking that you can't afford any love for your people, and besides, they have no where to go. Don't rest on that. Google was handing out bonuses and raises back in '02 and '03, and you can see where that got them on the talent tree.
Whatever you do, don't take your people for granted. By the time you realize your company's culture stinks, it will be too late to turn the ship around, and when the economy totally improves - you are toast.
March 31, 2010
There's a war for talent coming, and the companies that win it will have a social value proposition to offer hi-potential candidates. These companies will have an outstanding quality, social and financial reputation. Their employees would be proud to list them as their employer on a social networking site - even fanning the corporate public page and using the company logo.
In the near future, we'll see a big shortage of high skill talent in a variety of areas from computer sciences to health care to sales management and beyond. The 1999 McKinsey study (The War For Talent) explains why - it's a demographics phenom driven by declining birth rates in Gen X, Y and Millenials.
A follow up study found that the condition was actually escalating. As companies grabble for talent in this new world, the financial comp plan won't be enough to win over the bold and smart. They are young, socially aware and highly networked - all bad things for companies that have a weak reputation or a non-existent mission of value.
Here's a video clip from my keynote speech at MPI's convention in Houston in 2008. I've been booked several times since then to speak to companies about the primacy of employership/social responsibility branding as part of the talent acquisition process.
January 08, 2010
For the last five or six years, the burning question I get is "how did Google pass Yahoo?"
It's not my favorite discussion, but in the spirit of abundance, I've pontificated. Initially, I thought it was the result of a breakthrough search algorithm (Page Rank). But that wouldn't have sustained them up until today. Next, I concluded that it was leadership and management style (read Peanut Butter Manifesto).
However, after watching a recent CNBC Special (Inside Google), I finally realized how they rose to the top -- and will likely stay there for a long time. They are focused on the cloud based services: stocking it, mining it, providing access to it, generating value from it. Their main competitors like Yahoo have been focused on content (Bill Gates wrote an article in 1996, Content Is King, that dominated the leadership vision of Web 1.0 and permeated Yahoo speak for years.)
The "Content Is King" mantra may have been right for the mid-90's, but today with over fifty percent of online advertising (against content) still unsold, it makes you wonder. Yahoo's main acquisitions, with the exception of Overture, were content related: Broadcast.com (audio/video), Geocities (user), Launch (music) and so on. Meanwhile, Google worked on making the cloud's database more useful to users who needed to buy things or hire companies (search). They scanned hundreds of thousands of books, not just for content, but to improve the cloud's research capabilities. They invested in satellite based maps to dramatically improve the cloud's ability to compete with Mapsco's and the like (remember how bad Mapquest was?).
As Yahoo experimented with a CNBC type show (Finance Vision) and a variety of others (Entertainment, Business, etc.), Google worked on getting our favorites apps out of the software realm and into the cloud. Services like Google docs are "software as services" and only require bandwidth to access and use.
Finally, consider the issue of wireless phones. Yahoo's approach was to aggregate content for the phone and provide a thin layer of services. Google went all in and developed Android, an operating system for the phone that elevated the competition beyond dotcoms -- to Motorola and Apple!
I can't say for sure, but I'm willing to bet that certain Google executives have read and digested the book Customer Capitalism (a classic from the early 2000's). This book suggested that to win tough business battles, you need to surround the customer with services that solve all of their problems and leave no value gaps. While Yahoo, AOL and MSN thought wide, Google went deep. Combined with management and the reality that paid search is the biggest win/win in online advertising, the whole picture makes more sense to me now.
Recent articles seem to support my view that content is no longer king, it's likely queen or maybe a duke (Content As Pauper). For entrepreneurs watching from the sideline, make sure your strategy keys in on the issue of web based services and not just content to watch/read or listen to.
December 22, 2009
Earlier this week, Prince William lived out at least one side of the famous story of The Prince and The Pauper. After all, it's in his DNA. When William slept rough in the streets recently, he carried forward his mother's vision of increasing awareness about the plight of homeless teens in London.
While some may cast a cynical eye towards William's efforts (along with front page publicity and goodwill it generated), I look at the exercise as a win/win/win venture that all of us should draw from insight from.
For Prince William, this exercise is a coming of age story for a young leader. First of all, he makes the move from sympathy to empathy when it comes to the issue of homelessness. Before this night of "sleeping rough," he felt bad for the poor (sympathy). After the experience, "he could only imagine...," which takes his understanding of the situation to a higher level. This is also the level that the poor would like to be thought of at too. The homeless don't want pity. They want safety, food and to feel good. Pretty much the same thing all of us want. I think Prince William gets that a little bit better now.
The second benefit to the young leader is that he's smashing his fears by confronting them through the experience of being destitute. Last year, I viewed a five minute talk by Tim Ferriss on "Practical Pessimism." In it, he shared ideas from Stoicism that suggested that the powerful, rich and noble all experience poverty and eat what the beggars eat and wear what they wear. The exercise, helps the have-alots confront their greatest fear: Losing all the stuff. I predict the exercise will help Prince William feel fearless when it comes to moments or even extended periods of not having more cash than you can count.
For the homeless he encountered, there are benefits too. For some, he gave them a shot of hope, believing that help might be on the way. For others, the attentive appearance of Prince William in their hood gave them a voice to the world - and a dose of dignity too.
Done with taste, you can benefit from this exercise too. You can find a way to immerse yourself in the intersection of the community's biggest needs and your greatest assets. Who knows, you might be the only person reaching out this year.
Is there a customer in need? In my first book, I shared the story of Michael Rawlins (former CEO of Pizza Hut). Each Friday, he called his best customers to check on service, thank them for their loyalty and hear out their life stories. One day, he called a single mother of five that worked three jobs to make ends meet. While he didn't walk in her shoes for a day, he listened empathetically. For both of them, it was a life changing conversation. Thanks to Google Books, you can read The Pizza Hut story for all the details.
What is the analog in your business? What did your mother (think founder) care about? Are you still carrying that cause on?
December 07, 2009
One of my first jobs was a sales position at an early stage cellular phone company in Dallas . It was the mid-80's and cell phones were brand new, mostly installed in cars. Coverage was very spotty, but coverage maps promised eventual service. The portable phones were housed in Haliburton briefcases and required a weight belt (and an external antenna) to operate. The entire service was expensive and iffy.
I worked for a Southwestern Bell Mobile System dealer, so we had little to no initial competition. By 1986, Metrocell (Lyn Communications) opened up shop in our region and started to woo customers away from us with free off-peak calls, steeply discounted (or free) phones and various claims about quality of service.
We countered with The Map. We had the most coverage, and we knew that in the end coverage was the feature that counted the most to the most profitable users on the network. The more you need coverage, the more strategic the phone is to you -- and the more coverage trumps all. Eventually Metrocell came up with their version of The Map that attempted to take away this advantage -- but due to FCC regulations and heavy oversight at the time, their map showed their weaknesses. They eventually lost the battle and were swallowed up in a consolidation.
The lesson to be learned is simple: Your most valuable customers need the last mile to work. The Law of the Last Mile is an old telco adage that states that if the customer doesn't hear dial tone, you are not in business. This is very true. Additionally, the more you use the phone, the more coverage trumps equipment, rates or promotions.
Over the last few weeks, AT&T and Verizon have stepped up their public battles to win the coverage feature debate. Today, over twenty years since the industry popped up, coverage is still king. Verizon kicked it off with their "There's a Map For That" TV ad. Ouch. First, AT&T took the litigation approach. When the courts didn't salute, AT&T took to the airwaves with a variety of commercials that combatted Verizon's Map. They even offered ads of Luke Wilson reading off all the cities where AT&T's service works (for the least sophisticated viewers). Other Wilson ads offered an analysis of how the two networks stack up. Verizon is responding biting (Truth Hurts) and funny ads to counter. Who is winning? It's hard to say for now, but there's a lesson in it for all of us:
1. The iPhone gives AT&T an edge UNLESS you become convinced that you could get a comparable phone (The Droid or the Palm Pre) at a network (Verizon/Sprint) that offers a better last mile. AT&T gets this, as well as the fact that the iPhone will soon be network-agnostic. So the Map really matters to them. What's your Map issue? Do you have an exclusive product, yet can't deliver competitively at the results level? Are you seduced by the sizzle?
2. The 20/80 rule is still true, even in mature industries like wireless. Your top customers, usually one in five, drive the majority of your profits. At their volume or plan, you capture the margin upside as your incremental delivery costs (billing, marketing, etc.) drop to zero. AT&T is protecting it's "platinum customer base", which is likely to be more-than-average swayed by The Map argument. What are you doing to protect your platinum base? Do you know who your top customers are and what results they'd come to depend on? Have you benchmarked the benefits you deliver and not just the features you offer?
Always look to learn lessons from fierce market battles. They are usually led by wicked smart people thinking in very strategic ways.
November 17, 2009
Today, a WSJ Article (Thor Industries: On The Road Again) highlights a bright spot in the embattled automotive industry. Sure, they had layoffs, but they didn't have debt - which was key. Thor Industries is a Phoenix company, that will emerge from the 2008-2009 great recession stronger and more profitable than ever. Two of its mega competitors have either failed or been parted out by private equity firms. In the end, Thor picks up market share and top talent.
How did they do it? They stayed lean in production and fat in creativity. They used much smaller factories (75,000 is a very small RV factory) that could easily close when demand softens. Their IKEA like design acumen also allows it to scale up if/when demand takes off again. This results in less debt, faster turnaround times and better morale.
While many businesses have done this recently, they'll likely behave like Thor's competitors during the next expansion - sprawling out production to capture economies of scale. They'll be exposed to downturns and slow to react to innovations. I guess it is really hard for modern leaders to stay lean and mean during expansions, but that's what Thor Industries did -- and will likely keep doing in the future.
Takeaway: When your industry takes off and you are filling up your boat with fish, remember to keep your debt obligations small and focus on design based scale. Many companies are realizing this, and getting out of the "making-things" businesses and into design/marketing -- a much lighter model to support.