Category Archives: marketing

Twitter’s Platform Mojo

Betaworks’ John Borthwick recently posted the informative Ongoing tracking of the real time web…  Combined with Fred Wilson’s AVC post Twitter v. the Twitter Ecosystem, these two posts illustrate and highlight important learnings for startups and entrepreneurs everywhere.  Those learnings are the subject of this post. 

The key points of this post are: (1) Twitter is indeed a platform; and (2) platforms’ own profitability are related not a little bit to the revenue driving capabilities of those partners that build on the platform.  Twitter has clearly enabled other applications to create and build innovative services, a la Tweetdeck, Seesmic, Bit.ly, etc.  These are great as they extend Twitter’s value even further.   Over time, we should expect that the traffic through the platform will dwarf the traffic of the application/web site called Twitter.  This is a useful illustration for web- internet-based entrepreneurs on the value of platform building in a business.  Here’s what I mean…

I give a talk called Revenue: Of Moats & Models in Silicon Valley.  The purpose of this talk is to help the very early stage startup—ideally the 1-2 founder team in the garage—frame quickly and easily how to think about revenue and building their business.  One of the things that I talk about a lot is thinking through how to build a fly-wheel in your business.  Some people call this a “platform play,” but I tend to prefer a more crisp illustration of a positive feedback loop.  The steps that I illustrate and walk through with founders is one that is simple and seems to resonate with most founders.  The steps are:

  1. Create something users want.  (Smart, effective founders recognize this as the Paul Graham [YC] mantra.  It totally makes sense—this is step 1, without this you’ve got nothing.)
  2. Build user base and share leadership.  (This is just about extending step 1 into momentum.)
  3. Create a extension that attracts and enables a second stakeholder group.  E.g., application developers who want to access your users; teachers who want to access your students; advertisers who want to sell stuff, etc., etc.
  4. Empower that second stakeholder group to reinforce and extend the value to the core users who you started with in step 1.

Wash, Rinse, Repeat. 

This is a very basic description of the positive feedback loop that the vast majority of massive tech companies have used to achieve their dominance—Microsoft, Google, Facebook, Apple Iphone, etc.   Sometimes tech folks will look all dreamy eyed and say the words “platform play,” and this is probably what they mean (or should be).  Specifically, the platform means that there is a second stakeholder group that is specifically betting on you to make money, gain share, whatever for themselves. 

In the talk I give, I suggest or recommend that the founding team spend an hour or two trying to think about building that precise feedback loop around their idea.  I contend that this can be a useful exercise, one more should do.

Part of the reason this exercise is so useful is now highlighted with the blog posts that I started this off with.   What Borthwick and Wilson are both highlighting is something that has been obvious to me for months: namely that the power of Twitter is as a Platform, not as an Application.  Others – bit.ly, tweetdeck, tweetfeed, etc. – are now investing their R&D budgets, engineering talent, marketing efforts towards extending brands that build on Twitter.  Twitter as the platform enables this, and Twitter gets some benefit by having these partners do this work.  This is all great, and it reinforces arguments I’ve made before on this blog about why skeptics focusing on Twitter traffic or retention, while important, is probably less important than the health of its ecosystem. 

The second thing that I’d illustrate on Twitter as a Platform is a point that’s common to most platforms but not well understood.  Namely, while platforms on their own can be massive from a revenue and profitability standpoint, over time, healthy platforms can pale in comparison to the revenue pool created for the partners betting on the platform.

Microsoft’s Windows business is a great example.  According to MSFT’s Annual Report, the Windows division pulls in roughly $16B in revenue, and makes >$12B in operating income.  (What a machine!)  This is awesome.  What is also awesome though, is that you are probably talking about an order of magnitude in terms of the amount of revenue that the partner ecosystem makes. 

Same thing with Google.  Massive revenue, massive margins.  But the amount of money that advertisers are making through getting direct contact with users, massive.  Facebook, starting to show the same thing.  Its an awesome thing on its own, but as Zynga, Playdom and others are showing, they are making massive amounts of money on the Facebook platform.  As Facebook extends, I expect to see even more companies making more money off of them.

This brings us back to Twitter.  As I’ve said before, its easy to think that Twitter is too simple to be a viable business.  That’s wrong-headed.  Twitter is en route to becoming the platform for the real-time web.  As I’ve said, it will create massive value for its users, employees, founders, and investors.   To me, the key quesiton with Twitter is not whether it will continue to thrive in users and traffic (it will), or whether it will make money (it will).  The question for me is whether its ecosystem will find ways to make real money, as this is ultimately a partner ecosystem’s profitability is ultimately the best way for a platform to ensure its long-term viability.

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What I learned teaching myself SEO

I wrote last summer about my quest to teach myself SEO in 2 weeks.  At the time, the key task was simple: get the NYT wedding announcement proclaiming my wife, Aimee Jamison (nee Aimee Vincent), and me as married to show up on the first page of search results to anyone who typed “Aimee Jamison” into Google. 

At the time I started, this announcement showed up as #48 in the search results on Aimee Jamison, at the bottom of the 5th page.  As of today, going to Google and typing “Aimee Jamison,” returns Aimee’s LinkedIn Profile, Aimee’s Twitter Stream, and then the NYT Wedding Announcement.  So we moved her desired result up 45 spots!  Nice!

In my prior blog posting, I’d talked about taking 2 weeks to work on this.  In fact, it was much shorter.  Here were the key things I did:

  • We filled out a Google Profile for Aimee Jamison, which linked to the NYT article.
  • In Aimee’s LinkedIn Profile, we added a Personal Link, which in turn linked to the article.
  • We got her a posterous page, which linked to the article, as a backgrounder on her. 
  • Finally, when you sign in to Google, Google puts little Up and Down arrows that you can use to move around the search results.  It presumably saves results for you, so that when you type common searches, you get the custom results you want.  I assume that Google takes input from what things people move around here, though I’m not certain that this is true. 

In any case, what I learned here was pretty simple—if you want to get that certain link to show up higher in the page rank, there are a lot of routes that you can use to help yourself.  Now obviously, we’re not trying to compete with others on Aimee’s name, so this was an easier task.  Still, if you’ve never done SEO, I’d recommend this, as it was a pretty useful, straightforward exercise, and it definitely got results.

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The How To Guide to Naming & Branding for Startups

This week I again had the pleasure of speaking at the Founder’s Institute’s sessions on Naming and Branding.  This is the second semester for the Founder’s Institute, and I saw a lot of great improvements from what was already a strong first semester. 

The slides I presented this January 2010 are here:

The slides are pretty self-explanatory, so I won’t go through them here.  I’ve also spoken about this before on this blog here.  In this post though, I’ll respond to the notion that I heard in one session which was that the name of your brand or company really doesn’t matter when you are starting out.  The argument (I think) was that there are many other issues to focus on, and that any name will do. 

While I agree that a founder can’t get so caught up in naming that the vital stuff—getting product built, getting customers engaged, etc.—I disagree strongly with the idea that a company or product’s name doesn’t matter.  For startups or early stage companies, I think this is even more important.  Here’s why.

First off, when you’re just starting the only marketing you’ve really got is the name and brand of your company.  No one knows who you are.  No one has ever heard of you.  When you tell them you’re name, some neurons fire in their brain and they have a reaction.  Are they going to want to lean in and see the demo or are they going to ask “How do I spell that?” or “Say that again, I didn’t hear you.” 

Here’s a concrete example—try recruiting a rock star A++ engineer with a crumby name.  The types of people you’ll want to recruit, I contend, will respond like anyone else.  A crumby name, without a concrete sense of what brand you’re trying to build, will be uninspiring or confusing to a rock star A++ engineer, as with anyone else.  I’d say avoid it. 

My philosophy with startups is simple: When you are all by yourself, you have to use every tool at your disposal to increase the chances of success.  Taking that philosophy means you have to push forward on anything that can help.  I contend your company’s name can help in important ways, beyond recruiting your star engineering talent. 

How can your company’s name help?  Your name can do lots of things, but to me one of the keys is that it can set the competitive landscape to your advantage. 

Here’s my current favorite example from Niman Ranch.  Niman Ranch is a maker of all natural, humanly raised meats.  When they entered the hot dog market, notice the name they chose.  “Fearless Beef Franks,” is a great name for them—it totally positions Niman’s offering relative to their competition.  Niman is a premium priced provider—this name makes it totally clear why their hot dog will cost more per pound than one from Oscar Meyer.

In closing out, I’d say sure you can succeed without a great name, but why would you want to? 

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I’d listen to Jon Stewart before Chris Anderson on fixing media’s business model

Jon Stewart reacting to a George W. Bush clip ...
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TechCrunch summarizes Wired Editor-in-Chief Chris Anderson’s rules for pricing on online media by calling them “counterintuitive.”  Author Erick Schoenfeld, writes that Mr. Anderson “articulated something that is now increasingly becoming obvious: As products go digital, their marginal cost goes to zero.”

“This is the law of gravity online,” says Anderson. “Everything that becomes digital will become free. There will be a free version, either you will be competing with free or giving it away for free and selling something else. If it is not zero today, it will be zero tomorrow.”

He then goes on to summarize Anderson’s new “rules”, which appear to be:

  1. The best model is a mix of free and paid
  2. You can’t charge for an exclusive that will be repeated elsewhere,
  3. Don’t charge for the most popular content on your site,
  4. Content behind a pay wall should appeal to niches, the narrower the niche the better

I’m scratching my head a bit here, and I’d love to have read more evidence of this actually working at mass scale. There are a bunch of counter-examples that a hard-headed business guy like me might push back on here with a hearty WTF.   First off, some counterexamples.

The best model is a mix of 100% pay / 0% free, like World of Warcraft.  It’s media IMHO, you want onto their servers, you pay to be there.

Any packaged software (or pharmaceutical for that matter) has a marginal cost of zero, it is still for pay.  I reject the idea that media–becuase its marginal cost is zero–cannot be for pay.  Plenty of other high-value products have zero marginal costs and extract high prices.  Linux and Windows have been two versions of digital OSs for more than 10 years.  Windows still has the vast, vast majority of revenue and unit share.

Plenty of authors are finding opportunities to charge for their content–especially in the financial sector. Jeremy Siegel for example.

Finally, nowhere do I hear that the core model of big media brand (e.g., WSJ) and all its writers are needed to do what they do.  I love the WSJ, and this stinks to write.  But the net net is that most news will be covered by more citizen-oriented news outlets by  citizen journalists and niches that are running around snapping Twitpics and posting to blogs.  This will mean that vastly smaller newsrooms are going to be needed to do what they do today.  Some will be needed and some are crucial.  But many will be continuing to compete with free.  Very hard to deal with.  This needs to get teed up and discussed.  Openly.

With that out of the way, now I want to explain why I think this talk is off base with respect to big media.  Brands such as the WSJ, Wired, Time, Newsweek do have a well-known problem–they’ve got a bunch of folks in a priesthood of journalism competing with their congregation of citizen bloggers, twitterers and so forth who are happily, ignobly disrupting the stuffing out of them.

Anderson’s prescription may work for them, but I’m extremely dubious.  I think that the congregation of citizens is going to disrupt all the slices of profit from the priesthood of jounralists.  While I might pay a few bucks for virtual currency on Zynga or a special hat on WeeWorld, I’m not going to pay $0.99 for an article that I can just read somewhere else.

I really think that we’re watching in journalism what we saw in the auto makers a few years ago.  We are looking at an industry that doesn’t realize its dead yet.   The business model needs far more dramatic reinvention in terms of what we’ll consume.  That debate ain’t happening though.  Instead, what we’re hearing is that the pricing model needs to go this long tail route, which is a baby step.  They’re using a pea shooter against an elephant on this.

As an example of how radical things need to get, here’s Jon Stewart talking to Katie Couric about what the TV news should do.  His ideas are closer to what I think needs to happen than working on a long-tail price model.

Jon Stewart Interviews Katie Couric

Here Stewart gives Couric all kinds of crazy suggestions–“free colonoscopy for viewers,” etc.  These get laughs, but he’s basically right.  Old media is going to need things like cage-matched talking heads debating health care pay-per-view, manage Wolf Blitzer’s as a multi-medai franchise similar to Tom Petty, and a bunch of other completely crazy ideas.

The idea that a pricing model as suggested is going to do the trick is in my mind, extremely short-sighted and likely to fail.  Media franchises will need to think radically about trying vastly new and different things, else they’ll be in the same spot GM / Chrysler are in now.

Jon Stewart’s become one of the most trusted ‘newsmen’ in the US, crazily.  His ideas on how to fix big media may make him the smartest business person too!

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My Founder’s Institute Talk on Branding & Naming Your Startup

Last week, I had the pleasure of speaking as a Mentor at Adeo Ressi’s TheFunded’s Founder’s Institute with entrepreneurial superstars James Hong and Bryan Thatcher.   image

First off, before I get into the topic, let me say that I think the TheFunded Founder’s Institute is innovating the approach to startups in an important way.  The approach is a mix of company building philosophies.  It’s one part bigger hammer–that is bring in lots of smart people as founders.  It’s also another part strong social networks, connect those founders to each other and to experienced, proven entrepreneurs.  Add top-tier, discounted, startup services (legal, accounting, etc.) and that gets at crux of the approach.  The new stock class—F-Class—which Ressi’s introduced is also super interesting.

There are a lot more unique details to how Ressi’s going about this, which I’ll not go into here.  But suffice to say, it is both empowering for entrepreneurs and it has a bunch of detailed thought behind it.  Ressi’s vision is big and broad.  It is exciting to be a part of, and I’m eager to help it succeed.   More concretely, I wish I had had access to such a thing when I was trying to start out as an entrepreneur.

Ok, so that’s the Founder’s Institute, now onto what I was talking about when James, Bryan and I spoke last week.  Our topic was Naming—as in, you’ve now figured out what customer problem you think you’re solving and what you want to do, now what do you call this thing?

This is a fantastically rich and interesting topic.  It’s also, IMHO, super super important.  When you’re a startup, your name is about the only marketing you really have at first.  Also, everyone—customers, potential employees, and potential investors—will ask you about your company’s name.  So whatever you name and brand your company had better be good.

My slides from the presentation are embedded here (hat tip to the folks at Igor International, who’s free naming guide was very influential):

(Shared with permission from TheFunded Founder’s Institute.)

It was a good discussion, and my sense is that this provides a useful prescription for startups thinking about what to name their company and how to approach their brands.  Some key points for reinforcement.

Having a process for naming helps.  What I think is particularly useful about this approach is that you can put numerical scores next to how you think about names.  This enables you and your team to have a concrete discussion about why someone likes versus dislikes a certain name.  This is important, as it enables your team to come to a more objective decision, as opposed to just who yells loudest.

Think BIG picture first, then worry about finding the .com or URL that’ll work. Following my talk, one common theme in speaking with people afterwards is that I think many people get hung up on the challenge of finding a good .COM URL that’s not already been picked up.  While certainly a challenge, I think that worrying about this tends to drive entrepreneurs to small thinking.  You’ll have to work through it, but that’s an end point, not the beginning.

As I’ve said in other posts—as an entrepreneur, my advice to other entrepreneurs is to think big in everything you do.  So when it comes to naming and branding your company, think big.  Go for a big name, figure out what that makes sense and helps position you strongly relative to your potential competitors.  Figure out a name that really delivers on the strategy that you’ve put in place.  Get that strategy right and solid.  Then you can go and figure out the more tactical issues of what the URL hunting strategy needs to be.

Commit to going through the process.  The other thing that I’d encourage people to do is really commit to going through the process that I’ve described in the PPT deck.  I’ve met with several companies over the past year who’ve listened to this process, ignored it, and then have ended up hiring a naming consultant to basically help them go through the same thing.

Acknowledgments to the folks at Igor International. Igor International have open sourced their naming guide, which is a great thing.  My deck basically walks through how I used that free information to secure Moonshoot, an awesome brand name, IMHO ;).  The tool Igor’s provided is for frugal founders like us a tool to go figure this out on our own.  Invest the time to commit to doing it.

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DriverSavers & Its Awesome Customer Experience

This mail is a big shout out to the Incredible folks at DriverSavers, who saved over 20K of our photos from a HD and backup regimen that went horribly wrong.  I also think that there are some terrific lessons here that any company–large or small–can take in terms of delivering a great customer experience.

The background

My wife is a serious amateur photographer.  She takes a lot of pictures that are artistic, and as we have two young children, she also takes tons of pictures of our children.  Our approach to backing these up was to use an attached HD to her mac, with a backup HD that used Apple‘s Time Machine.

The problem we faced was that the HD failed slowly.  When my wife would look at photo thumbnails, they would appear to all be there.  When the HD finally failed, and we went to Time Machine, we weren’t able to find any archived copy that had the actual JPEGs of the 25K photos that it was supposed to be backing up.  Disaster time.

After a few trips to the Apple Store and elsewhere, we got pointed to DriveSavers.  DriveSavers is a data recovery service in Novato, California, that promises to deliver data from hard drives that have suffered massive failure.  They’ve apparently been involved in recovering data from drives damaged in 9/11, drives that have been in fires, underwater, etc.

From the beginning of this experience, DriveSavers approach impresses.

First call. Upon my first call to them, I was instantly connected with a real human being–no long number prompt trees.  Despite the fact that I was *desperate* to get a solution, my advisor at DriveSavers slowly and calmly asked me to walk through the situation in detail.  This works to his favor, as it lets me and my wife get out all the concern and anxiety around having lost all the photos our children.  He listened very patiently, would have let me go all afternoon, if that was going to be needed.  As he listened, he then started asking a few questions about what happened with the specific drive, how big it was, when it had failed, had we continued trying to use it after we had had it fail, etc.

After about 20 minutes, our Advisor suggested his path forward.  First off, as we only needed photos recovered, he thought we’d qualify for a price point that was roughly 40% less than their normal drive recovery.  This was a relief as this ain’t cheap.  Second, and frankly more important, he was confident that they could have excellent chances for successful retrieval.  This is what I wanted to hear.

I wanted to hang up immediately and get myself up there to hand off the disk, but he then asked that I work with him to answer some more questions, as he walked through what they woudl do with the disk and how it would work.  This turned out to be awesome–he made me understand that they do this all the time, that the disk failure I experienced was very common, etc.  Now I was in the car and ready to run stop lights to get to him to save our photos.

DriveSavers Office.

DriveSavers office in Novato has its entry wall covered with photos of celebrities who have had their drives saved by them.  The Late President Gerald Ford, Bruce Willis, Brad Bird (writer/director of Pixar’s The Incredibles), Johnny Depp, etc.  That wall dropped my blood pressure even further.

The people in their offices had the same message as our initial advisor–they’d have the disk back to us in about 5 business days, all the content they could recover put onto a brand new drive we provided.  They also gave us a phone number to call anytime–24/7–in case we wanted to check in.

Very impressive.

5 days later.

5 days later, they called me to let me know that our engineering supervisor, Bohi Nadler, had successfully signed off on a saved data set that we could pick up at our convenience. My wife drove up to pick up the photos.  We have the business cards of the specific engineer who did the work, a set of new tips on how to manage data backup and recovery at home to a stronger degree than ever before.  (We now use 2 HD backups and have all our photos on Smugmug as well.)

I love these guys, and had to share the experience a bit.

Lessons on customer service

This experience really showed me how few companies really get on it regardign customer service.  Here are some of the key tips and techniques that I think are important:

  • Have someone answer the phone, and if not, then at least be super responsive.
  • Let your customers vent, listen, and guide them through your solution.  This both disarmed me and gave me a sense of hope.
  • Always offer a deal.  It was very smart of them to offer me 40% off for a Photos Only recovery.  I felt it was expensive, but at least not full price.  I was “saving” money.  Help your customers feel like they’re saving money, always.
  • Get every human at your company to have a consistent message to your custoemrs.  Having the receptionist have the same information as the sales advisor and the engineer made a difference, I felt as though they knew who I was and were willing to help me.
  • Humanize the service–they told me the name of the perrson who actually did the work.  Having a name behind the work made me feel even happier about hte experience.

I can hardly believe that a data recovery service can create such a positive feeling in their customers–part of it surely is the magic of finding what is lost that is valueable.  But I truly believe that their ability to think through the experience they want their customers to have is waht makes their business truly stnadout.  We can all learn from this, and I wanted to both share my tgratitude and my lessons.

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Be in the Review—MKTG Lessons from Windows Mobile

Yesterday was a tough day for Microsoft, and not because of its earnings announcement, which Silicon Alley Insider rightly calls its first revenue drop in memory “horrible, considering the circumstances.” 

I think it was a much harder day, because of two prominent articles talking about the relative mobile ad share and Application Development traction of the Iphone relative to Microsoft Windows Mobile.  The lesson from this is useful to marketers everywhere—namely, get in the review!

First, Erick Schoenfeld’s article Android Catches Up To Palm In Mobile Ad Market Share. IPhone Still Blows It Away compares ad share on mobile OSs, with the Apple IPhone garnering 50%, RIM at 12%, MSFT‘s WM at 11%.  #3 in the market, never a place MSFT wants to be.  It is especially tough that the story is about Android playing catch-up to the IPhone.  Microsoft’s Windows Mobile platform is an also-ran, not even mentioned. 

Second, in MG Siegler‘s article “Zero Remains a Popular App Number for Non-Iphone Owners” analyzes the user traction of apps on IPhones versus non-IPhone platforms.  The classic “Leader v. Everyone Else” story.  Here the only Microsoft comparable is the Motorola Smartphone Owners.  What’s very tough here is that  Windows Mobile isn’t even called out, it’s as if Motorola is the only platform not Apple, RIM or Android.  Yikes. 

I love Microsoft, loved working there.  I remain an unabashed fan, and those who count it out are nuts IMHO.  Great people are still there.  Great businesses are still there–Windows 7 should be a super release.  XBOX and XBOX live are coming along, as businesses .  The Server and Tools business is a powerhouse, despite current market conditions.   Its enterprise business is thriving.  MSFT is and will remain powerhouse.

In mobile– a vitally important area of growth and focus in this industry and to MSFT–to not even be mentioned is a real problem.  This is particularly true, as Windows Mobile is now nearing release 7.  With a v7, having traction as a dev / app platform is vital. 

The silver lining is that the mobile app dev platform is still *very* early.   MSFT has come back before, and it can again.  Still, it’ll be important that the WM marketing guys are extremely aggressive in getting the word out and getting into the reviews. 

 

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