Marketing in the Age of Consent

I have joined Mark Blessington and Karl Hellman as partner in a new type of marketing firm, one that’s centered around customer consent. The name of this enterprise, appropriately enough, is Consentric Marketing.

We believe customer-centric thinking takes a great leap forward when consent is placed at the center of the marketer’s thinking:

Screen Shot 2019-01-25 at 3.56.29 AM.png

Here are three papers that we offer without requiring registration:

Between us, we have eight key areas of expertise:

  • Marketing Transformation
  • Ecosystem Marketing
  • Content Marketing
  • Product Management Training and Coaching
  • Brand Activism
  • Customer Data
  • Buyer’s Journey
  • Personas
In addition, here’s a sample of our blog postings:

Learn more about us, and what we can do to help your business grow.

Saving Barnes & Noble from Itself

I’m guilty. 

I go to my local bookstore, drink a coffee and
browse the shelves. When I get home, I rush to the computer and buy the books I
fancied – online! If it’s a business
book
, I download a copy on my digital reader, and if it’s a literary
work
, I buy the physical book at a discounted price. 

As a way to assuage my guilt, I’ve thought of
some ways to help my local bookstore survive – because, like so many of us, I
love the physical bookstore experience – nothing beats the Zen practice of
disinterested info-grazing – and I’d like to continue to enjoy it.

However, I notice at my local Barnes & Noble that
they’re busy selling Nook ereaders in every cranny. [Do they really think they
can compete with the iPad or even Kindle?] Is this really going to save the
physical store?  Nope. 

Most likely, it’s an idea dreamt up by the
financial types at headquarters who’ve been “missioned” to tap into the digital
value-stream. After all, why should B&N just stand there and watch their
profits drift lazily down a South American river? It’s important to note that
despite B&N saying the Nook is a “success,” they still rely on brick and
mortar stores (retail and college bookstores) for over 75%
of their revenue
and the competition is going to become even more intense with
dozens of new tablet and reader devices being introduced this year.

And how does B&N take a trip down the Nile? Apparently,
the secret sauce is that they allow Nook owners to take their devices into any
B&N physical store and read any e-book for free. Nooktalk
tells us  that in reality, it’s not
exactly a seamless reading experience. 
And now that Amazon allows Kindle owners to “lend
books to each other, the Nook may find itself in the, ahem, corner.

So what can your local bookstore do to take advantage of its strengths? 

Here are three suggestions to shake up the physical bookstore business model:

Daily Book Rental
Why can’t the bookstore become a pay-as-you-read library? As a kid growing up
in India, I remember borrowing books (alright, some these were Asterix and Tintin comics) from the bookstore for a daily fee.  This business model shows some reverse
innovation
promise. Can you imagine “tiered pricing” linked to free coffee
rewards?  Sign up for the all-you-can-read buffet. And of course,
we get to pay fines if we return our books late.

Publish and
Distribute Local Books

What if a physical copy of your book
gets published
in-store
and sold in your town’s bookstore? 
Can you visualize a “Newbie Authors” section where one copy of your book
gets to sit on the shelf for a week?  If
it doesn’t sell in a week, you can either pay for shelf space or you can buy
your books back.  The minute you or your
mother buys your Great American Novel, a new one is printed and placed on the
shelf. The top 5 bestsellers in each town get national distribution and
placement for a week.  Book fest!

Nurture Communities
of Interest
Some book stores think they are already doing
this by sponsoring author readings and cheese tasting events.  But what we need is more focused on the
actual needs and interests of the customer – practical and impractical.  Here are some examples of the types of
participatory communities that could be grown and nurtured in your local
bookstore:

  • Healthy Living
  • Relationships
  • Entrepreneurship
  • Food + Wine
  • Storytelling/Writing
  • Music
  • Art History
  • Travel

How does a bookstore do this?  If you’re Barnes and Noble, you could hire
retired teachers to do this; pick people who are enthusiastic and spread their
love of the subject.  If you’re a small
bookstore, you can still find enthusiastic community leaders to do the same –
in fact you can specialize, and create a niche around the main clientele in
your store.

Does all of this sound a bit off the wall?  Good, then it’s worth a try.  The Nook, I’m sorry to say, isn’t going to
save Barnes & Noble.

P.S. Over at HBR, Sarah Green gives us another suggestion: Amazon should partner with Independent Bookstores!

Quit Twitter & Improve your Marketing ROI

For the past two years I have been conducting some extensive testing with a number of my clients in various fields – software, consulting services, academics, non-profits, entertainment, and self improvement – and here’s what I came up with at the end of the study. I’m interested in one metric – conversion to sales.

social2sales.gif

Conversion to Sales

Website: 29.5% of sales
Facebook: 4% of sales
Twitter: 1.5% of sales
Print: 2% of sales
Book: 9% of sales
E-book: 7% of sales
Email newsletter and blog combined: 42% of sales
Seminars: 5%

The old rules of online marketing beat social media by a mile, period.

See you later, FB and Twitter… 

Marketing ROI: Notes on Advertising Effectiveness

For the first time, in 2010, online advertising will pass traditional advertising on TV and print:

admoney2010.gif

While this is remarkable, I can tell you where the highest ROI is. 

It’s with the Republican party.  You can buy every single Republican vote for a paltry $34 million, as the health care circus has shown us.

Wow. Who needs Google when all you need is the budget for one Superbowl ad.  Think about that: all it takes to buy the entire GOP is one Superbowl ad.  There goes the future of our country. 

PS – On a side note, I wonder what it takes to buy our Supreme Court… 5 bucks to Clarence Thomas’ wife?

Forrester should have talked to Jakob Nielsen (What You can Learn from their Mistakes)

Just a few days ago I praised Forrester‘s decision to create individual blogs for all their analysts.  So they finally get it, I thought.  Boy, was I wrong!

Yesterday I noticed how their migration to the new blogging platform was executed:

forresterkaput.gif

Yes, that’s the dreaded “The requested page could not be found” message. 

Apparently, for Forrester, moving to a new platform means all old URLs die.

This is just so wrong. Linkrot is a common mistake that companies and institutions make all too often. For this to happen at an institution like Forrester shows me they don’t understand web basics.  Don’t get me wrong, a lot of big companies have made this mistake, but for Forrester it’s inexcusable!

Maybe Forrester should have a chat with Jakob Nielsen.  Check this:

Any URL that has ever been exposed to the Internet should live forever: never let any URL die since doing so means that other sites that link to you will experience linkrot. If these sites are conscientious, they will eventually update the link, but not all sites do so. Thus, many potential new users will be met by an error message the first time they visit your site instead of getting the valuable content they were expecting. Remember, people follow links because they want something on your site: the best possible introduction and more valuable than any advertising for attracting new customers.

and

At other times, it becomes necessary to re-architect a site and impose a new structure. Even then, the rule continues to be: you are not allowed to break any old links. The solution is to set up a set of redirects: a scheme whereby the server tells the browser that the requested page is to be found at a new URL. All decent browsers will automatically take the user to the new URL, and really good browsers will even update their bookmark database to use the new URL in the future if the user had bookmarked the old URL.

I remember when the same stupid mistake was made by Harvard Business Review back when they switched domains from hbswk.hbs.edu to harvardbusiness.org. Overnight, they destroyed their online ecosystem, as Forrester has just done.

What’s the big deal, you ask?  In today’s connected world, this is brand destruction plain and simple. Not the way to build an attention platform.

IBM: Keys to innovating your business model

This is something that keeps happening with IBM’s FTP server.

ibm_oops.gif

I was just trying to download this report: Seizing the advantage. When and how to innovate your business model”…

I have to say, this happens all the time on the site.

What’s going on IBM? This is not exactly the best way to win friends and influence prospects.

P.S. – will let you know if I ever get to the document!

UPDATE: Not sure if this is the same document, but I found it on the UK site.

UPDATE #2: Look what I found at Booz >>

UPDATE #3: And this from EY >>

Bet You Can’t Eat Just One: Addiction as a Strategy

Listen to this:
Junk food elicits addictive behavior in rats similar to the behaviors of rats addicted to heroin, a new study finds. Pleasure centers in the brains of rats addicted to high-fat, high-calorie diets became less responsive as the binging wore on, making the rats consume more and more food. The results, presented October 20 at the Society for Neuroscience’s annual meeting, may help explain the changes in the brain that lead people to overeat.
So is this another example of addiction as a business strategy – similar to what the tobacco companies were doing earlier?
Maybe that’s why the IT geeks have such a hard time implementing Lean IT >>

Wild Phil Townsend: Where is GE’s Open Reverse Innovation?

Phil Townsend wonders why GE hasn’t opened up it’s Reverse Innovation model in his post: Opening up Reverse Innovation >>

Townsend makes a good point:

So why can’t a company like GE follow down this path with “open reverse innovation
– inviting small companies in India and China to submit their products,
services and ideas to be evaluated by GE for global distribution.  Of
course, the open model would require an environment of trust
but what better way to create goodwill in new markets than to be seen
as a development partner in the China, India, and resource-starved
Africa?  A.G. Lafley sits on GE’s board; surely he could help them get started.

Townsend also proposes the formation of innovation collaboratives funded by companies like GE to create a pipeline of new products for GE. 

Not a bad idea, if you consider that a recent
McKinsey survey found that 20% of companies have opened up their
innovation processes to employees and customers and they report a 20%
rise in the number of innovations
, on average.

The Future of Media: Not Just a Song but an Attention Platform

Edo Segal has an interesting guest blog at TechCrunch describing the “Future of Media.”

He points to Apple’s App Store as an example of what the rest need to learn:

The only way to block the incredible ease of pirating any content a
media company can generate is to couple said experiences with
extensions that live in the cloud and enhance that experience for
consumers. Not just for some fancy DRM but for real value creation.
They must begin to create a product that is not simply a static digital
file that can be easily copied and distributed, but rather view media
as a dynamic “application” with extensions via the web. This howl is
the future evolution of the media industry. It has arrived from a
company that is delivering the goods. Apple has made it painless for
consumers to spend money and get the media they want where they want
it, proving that consumers are happy to pay for media if delivered in
ways that make it easy and blissful to consume.

He also states, rather matter of factly, that “he premise of extending the media experience to the cloud is a core
necessity for the survival and growth of the media industry.”  I agree.  The media industry needs to “sell access and experiences, not media files.”

So how does an artist or a media company build these experiences?

I’ve been doing some thinking along these lines for a band I’ve followed for many years – Steel Pulse. What’s interesting is that while the band has a huge, global, cross-generational following built over the past 35 years – the media companies that were responsible for promoting them have done absolutely nothing to tap into this enthusiasm.  Not one thing.

The same goes for most of my business thought-leader clients as well.  The publishing houses do nothing to create a conversation with the passionate fans. 

Engagement is the key.  How does a musician or an author engage with their audience, their fan-base?  It starts with the quality of the conversation. And let me tell you, it’s far easier for an individual thought-leader or musician to do this than companies, largely because companies are too formal, too corporate, and don’t usually communicate with a human voice.

What’s needed is a way to go direct. 

Let the celebrity or thought-leader engage with their fans directly to build an attention platform, unique to the celebrity. The company that empowers this attention platform, and builds new services for the fans, will build the next media empire with the “lock-in” that comes with authentic engagement. 

Of course, none of this works without authenticity.  The celebrity must remain true to themselves. In Steel Pulse’s case, this means they need to stick to their core brand dimensions.  So each successive album, each song, each product, each statement, builds on the Steel Pulse Experience.wordle_spbrand.gif

They could even track the core messages of a successful album – in this case “True Democracy” – and extend their meaning in new songs and releases:

wordle_truedemocracy.gif

So now let’s talk engagement, and I’ll break it into two simple phases – push and pull (borrowed from JSB and JH3).

Phase One: PUSH

So what does the celebrity do today?  In Britney Spears‘ case, she’s
tweeting her launch of a new song.  To me that’s not much of anything.
Yes, she’s reaching out through social media -Twitter, Facebook, and MySpace – but these are all still one way marketing pitches – push media.

The artist pushes their songs, their products, their newsletter, their tweets, etc. etc. No discussion, no give and take.  Products are created and sold. One market, one size fits all. Core fans are treated the same as newbies. Nothing special except the show and the products – media files: audio or video. See what I’m getting at?

All of this is still just pushing product.

Phase Two: PULL

What happens if the fans come to you – with their suggestions, requests, and insights? What happens when they want to participate? Is it possible to co-create products and services based on insights from yoru fans?  Of course it is.

Start the conversation. Go 80/20: focus on the 20% of fans that will get you 80% of your profits. Start talking (and listening) to your biggest supporters.

Engage: physically meet the 20%. Create special events for them. In soccer for example, fans pay $30-50 dollars just to watch Cristiano Ronaldo practice. What’s wrong with doing a 30 minute sound check for your fans?  Invite them to the sound check – and have exclusive “sound check products” available only for these fans – available at the event, and online as well.  You could even have a question and answer session that they get to download later that evening.

Then of course you sell the live version of the show – for a “limited time only.” Vary the show slightly with the song set, so every night is a different.

Let your fans download the raw tracks and make their own mixes. Have a contest for the best mixes. Sell the mixes to other fans.  Use them in your album.

And when you create a new album, it’s version-time.  Reggae music has a long history of selling versions. What’s sad is they’ve stopped this traditional practice when really they need to be exploiting it. (See Hal Varian on versioning.)  So every song should have the following versions: album version, extended version, dub version, accapella version, acoustic version, dance version, Nyabinghi version, etc. etc.  

Talk to the fans about the songs through webcasts, band-calls.  Let then know where and what’s next.  Let them vote on what you should do next.

For legacy songs, make sure you sell versions-in-time. The 1983 version of Chant a Psalm a Day is quite different from the 2000 version, which again is totally different from the 2009 version. Real fans want them all.

All of this is do-able today. It’s not about technology, it’s about attitude, and the ability to communicate, to lead.  For a cause-driven band like Steel Pulse, this is their opportunity to shine.

And let your fans share in creating and spreading your experience.

Now let’s take a quick look at the business world. 

VG, as he’s called affectionately, is an author and well known strategist. His latest article in the Harvard Business Review, co-authored with Jeffery Immelt and Chris Trimble, has been a huge success – introducing the world to a concept called reverse innovation.

What we’re doing now is building his engagement strategy – through his innovation newsletter.  The idea is to start a conversation about innovation with the people most interested in this topic.

A small step to start, but I know from experience that a “simple” newsletter can drive over 50% of monthly sales online.

The great news is anyone can build an attention platform like this. And if you have something important to say, your platform will bring you the attention you deserve. 

It may even elect you President!

As I was finishing up on this, I just saw a tweet from John Hagel on author platforms (read here). Again, if Apple can help an author or musician build that platform, then Apple will “lock-in” that artist for life.  Same goes for Amazon.com. The distribution model for media is changed forever, period.

Interview with Hal Varian: The Economics of Information

This is a digital reprint of an interview I did about ten years ago with UC Berkeley’s Hal Varian. At the time Varian was co-author of a bestseller: Information Rules: A Strategic Guide to the Network Economy; it’s still worth reading today. Today he’s the Chief Economist at Google. There are still a number of good things in this interview that the media companies could learn from…  (I’m a bit embarrassed by the silliness of my questions, but hey.)

I suppose we should begin by asking you for your definition of “information” and what you call “information goods”.

When we talk about information goods, we mean anything that can be digitized. Text, pictures, moving images, sound, all the media that can be delivered over a digital connection. Some people call them digital goods.

Information goods have some interesting properties. On the supply side there’s normally a big fixed cost to create the first copy, of say a movie, and then a negligible cost to create additional copies. On the demand side, the interesting feature is that you don’t really know what information is until after you’ve consumed it. So you have to experience it to know what it is.

When you’re selling information, you’re dealing with how do you give free samples, how do you give part of it away, how do you establish a reputation so people will purchase the information you’re providing, etc. etc.

I read about a travel publishing company that put its contents on-line, and their book sales went up, because people wanted the books with them when they traveled…

Yes. Another example is the National Academy of Sciences. They found when they put all their content on line and people could actually look at what the content was, they were more likely to buy.

What are some of the techniques you find companies use to create and sell information products? How do you sell an information product to different customers at different prices? How do you find out what the different customers will pay? Can you do this on a website?

The trick is to “version” your information product: construct a product line of your information goods that will appeal to different market segments. A common way to do this is to use delay: issue a book first in hardback, then, a few months later issue a cheaper edition in paperback. The people who are really interested will get the hardback, whereas people who are only casually interested will wait.

We see financial sites on the Web that sell real-time stock quotes, but give away quotes that are 20-minutes delayed. A movie first comes out first in the theater then six months later in video.

Then there are other things, user-interface, for example. If you look at Dialog, which is a search company, they have two types of search engines- one is a professional search engine, with Boolean searches and all sorts of options, and then they have an “ordinary-person” search engine, with a stripped down interface. It’s nice because the ordinary person wants to use the simpler interface, while the paying professional uses the professional interface. So there isn’t any cross-market cannibalization.

Other dimensions on which to version your product are user convenience, image resolution, capability, features, tech support, etc.

You mention Gresham’s Law of Information in your book. What is it?

Gresham’s law said “bad money crowds out good”. We coined “Gresham’s Law of Information” which says “bad information crowds out good”. Low-quality, cheap information can displace high-quality, authoritative information: look what happened with Encarta and Britannica. However, Britannica is now fighting back and has come out with products that are much better suited to computer use. Smart consumers will look for quality information.

Your example of the struggle between Encarta and Britannica, how Britannica lost out to the upstart $49 Encarta…

Right, although they’re coming back. They’re doing some clever things now. What happens there is the incumbent in the industry has a very low marginal cost, so they should be able to beat the entrant but they can’t quite change their business model. It’s hard. Telephone companies are having this problem, the print/publishing media is having this problem, TV networks have this problem vis-a-vis cable.

(This was before Wikipedia!)

Since there’s a high cost of innovation and a low cost of imitation on the web, isn’t it harder to keep “first-mover” advantages?

You’re right, we talk about this — the competition is only a click away. But the clever company, which has that first-mover advantage, will try its best to create “lock-in” for their customer base. For example, look at what Amazon has done- one click ordering, keeping information on what you purchase so they can recommend books to you. If Amazon is recommending good books to me and I want to switch to say Barnes & Noble, I have to start all over.

Another good example of that is e-toys. You put in the birthday of your nephew, your neice, and your cousins, whatever, and they send you a reminder that your nephew’s birthday is coming up and here’s a nice stuffed rabbit that’s very popular with children in his age group.

Can you tell us a little more about your lock-in strategies?

Since the competition is just a click away on the Web, it pays companies to invest in building customer loyalty. The best way to do this is to produce a product that is so much better than the competition that they don’t want to switch! But there are other ways too, such as loyalty programs, like frequent flyer programs that reward frequent purchasers.

What about lock-in strategies for suppliers and partners?

What we were thinking about there was that if you have a group of loyal customers that are purchasing your products, and there may be other complementary products that they would also purchase, but you may not be the best firm to supply that. So then what you do is sell access to your customers.

The portal companies are doing this. For example, I go to Yahoo, and Yahoo charges other companies to have access to me. Let’s say e-toys wants to move into baby or children’s clothes. They might not do that themselves, but they could partner with other companies that do that.

So once you have a loyal customer base, then you can sell access to that customer base for other products that complement what you are selling.

What about the dangers in this, with privacy issues?

It’s certainly convenient for me to be reminded when my anniversary is or my nephew’s birthday or something. That’s a service, a good thing. Of course they can use the information about me in ways that could be detrimental- they could sell it to mailing lists and I get deluged by email. So the trick is to make sure that consumers give their consent; you want to know exactly how the information is going to be used by the company in question. There are companies like e-trust which meet a very important need.

I was looking at ANX, the auto-industry supplier network, and I found out that Chrysler, despite its enthusiasm during the pilot, isn’t part of the production version of ANX. And if you go to the Chrysler supplier website, you find they’ve created tons of business applications. So when does it make sense to join a standards organization and when does it make sense to go it alone?

There’s this fundamental equation that says that the value to you is your share of the market value times the size of the total market. So some of your actions, like standardization, can increase the total size of the market, but it can decrease your market share because it creates more competition. So you have to trade-off these two effects.

So you’re saying if the total size of the market gets bigger, and you make a bigger profit despite a lower market share, then you are on to something… How do you protect intellectual property on the web? Will the current move of providing patent protection to internet business models help or hurt the future of e-commerce?

The point is to maximize the value of your intellectual property, not maximize its protection. You can charge a lot lower price for content on the Web because you can reach a much larger audience.

I’m quite unenthusiastic about patent protection for Internet business models and feel that it will retard progress in this area.

(Like I said, my questions are quite stupid, but the versioning of information goods – that’s still something the media companies can learn about! This cartoon was also done about the same time…)

http://www.onewwworld.com/noodleman/noodle98.gif

Finally, to get you up to speed, here’s a decent interview with Prof. Varian with the [global-warming deniers](http://blogs.harvardbusiness.org/winston/2009/10/superfreakonomics-misses-the-b.html) at Superfreakonomics >>

“How GE is Disrupting Itself” by Immelt, VG, and Chris Trimble

VG has touched a chord with this article in Harvard Business Review

HBR

How GE is Disrupting Itself describes the concept of reverse innovation – how products developed in and for low-cost countries (like India and China) by multinationals (like GE) lead to growth – not only in the low-cost market, but at home as well.

VG says the article has touched an “emotional” chord with readers who are saying that this approach is just what “western” multinationals should be doing – designing products for the local market at a price-point which is within reach.

Check out the advertisement for one such product:

To me, this is just the first step to being truly global (as they say at Thunderbird). With business commitments at a local level, social commitments will surely follow. 

Now let’s see some “ecomagination” in action and build portable solar/wind electrical generators for off-grid villages at an affordable price-point. Right, Bob?

The Rise of Intuitive Intelligence: An Interview with Francis Cholle

Here’s my intuitive intelligence interview with Francis Cholle at Emory Marketing Institute >>
Cholle’s main point is that businesses have lost track of how to manage holistically. They are too focused on counting beans to create sustainable business value.
He’s not saying analytics are useless. He’s just saying that Mark Hurd at HP isn’t going to come up with the products HP needs for the future by using analytical processes (that’s not in the published interview – but we did discuss it!).
Read the interview here>>

Intel and Wind River: Shaping Strategy for the Future of the Consumer Experience

The acquisition of Wind River by Intel should not come as a surprise for anyone who has been paying attention to the rapid evolution of the online experience. We know for example that the future of electronics is collaboration, sharing, and accessanytime, anywhere, on any device..
Companies that build a vision around the future and then work to make that future a reality using their business ecosystems will win the next round of competition after we emerge from the recession. Intel’s shaping strategy, as my friend John Hagel would call it, is nothing short of brilliant.
Let’s see why.
In the automobile “infotainment” world, Intel has been quietly working with Wind River and BMW (and others) to build a shared platform for devices based on open source standards. The ecosystem partners comprise the Genivi Alliance and are in competition with another, smaller ecosystem of partners driven by Microsoft. The difference is that Microsoft’s infotainment stack is not open. Ford’s Sync and Fiat’s Blue & Me products are based on this competing platform. (How long before they switch?)
The ultimate irony – both platforms are built on Intel. And in this case, Intel knows something that Microsoft doesn’t – that open systems are the future.
The Wind River platform is not limited to automobiles. They’re doing the same across a variety of marketspaces, like the Open Handset Alliance Android – another open source platform.
The Wind River acquisition also helps include “Intel Inside” on all the devices which cloud computing will bring. Intel is making sure that the Telcos, IT hosting providers, hardware and software vendors – everyone gets to use Intel as the foundation of their future business.
Shaping Strategy 101: Intel gets it.

Byron Katie: Challenging Your Assumptions

The Work of Byron Katie can be used as a tool to challenge business assumptions.
Here, on Byron Katie’s blog we find the following business inquiry: “Having More Customers Means Having More Profits” in which a biz-dev manager starts questioning his team’s belief that “more customers equals more profit.”
The process is described as business inquiry.
Here are the manager’s conclusions:
“Having fewer customers means having more profit.”
“One, we could focus on the customers that have the strongest cash positions, the ones who are most likely to weather the recession.
“Two, we could stop wasting time on difficult customers, the ones that keep changing their orders. They’re very high maintenance, but we keep them because we think we need them to meet our numbers.
“And three, we could stop serving customers that don’t pay in a timely manner, the ones with poor payment history.”

More at Byron Katie’s blog >>

Backlash: How Early Adopters React When the Mass Market Embraces a New Brand


David Reibstein‘s theory holds true online as well. Let’s look at an example of how this works with online communities, knowledge – based communities in particular. Let’s say we build an online community around a specific topic. When the site starts up, we attract the early adopters – some of them thought leaders in their fields. The posts, articles, and debates are generally led by a handful of these thinkers, and they attract a following. The newbies, as they engage with the community start off by learning, asking questions, sometimes just lurking. The quality of these early debates is typically high and participation intense and invigorating.
So what happens when the community suddenly experiences growth – massive numbers of the hoi-pollloi descend on the site and suddenly the quality of discussions takes on a Twitter-like feelstupid and stupider. The old school rebels, first through silence, and second by disengaging. This takeover by the wisdom of the masses can be avoided, through ruthless editorial direction and skilled moderators. And every once in while, the new participants challenge assumptions that deserve to be challenged, and are given their space in the sun.
So how do we manage this growth and stay true to the community’s intent?
Three options come to my mind:
1) Manage membership – simply keep the community at growing in a measured way – firing the “bottom” 10% each year, and bringing in a fresh crop of participants at 20%… This is the surest way to sustainable growth.
2) Create a merit-based aristocacy – with tiered membership based on the value of the participant’s contributions.
3) Create a feeder community which is built for the masses and an elite community for the thought leaders and their followers. Moderate the interaction between these groups with the possibility of upward migration based on peer-based invitations.
You’ll notice I am not advocating open communities where everyone has an equal voice. That’s because I’m not talking about social communities, but communities of practice where respect is reserved for the competent.

Axel Springer: Thriving in a Dying Industry – Newspapers!

While newspapers and print outfits are losing their shirts all around us, the German company Axel Springer recently reported its “highest net income since the company was founded” 62 years ago.
How is this possible?
What are they doing that our friends at the NY Times aren’t?
From the NYTimes:
Axel Springer generates 14 percent of its revenue online, more than most American newspapers, even though the markets in which it operates — primarily Germany and Eastern Europe — are less digitally developed than the United States.
One reason, Mr. Döpfner said, is that Axel Springer has dared to compete with itself. Instead of trying to protect existing publications, it acquired or created new ones, some of which distribute the same content to different audiences.
At one newsroom in Berlin, for example, journalists produce content for six publications: the national newspaper Die Welt, its Sunday edition and a tabloid version aimed at younger readers; a local paper called Berliner Morgenpost, and two Web sites.
Though advertising has slumped in Germany, Axel Springer has been able to offset the shortfall by raising the price of publications like Bild, which sells more than three million copies. Now Axel Springer is looking for “undervalued assets” to buy.
Mr. Döpfner said the company would even have a look in the United States “if a meaningful position arises in a significant market.”

OK. So what are newspapers in this country going to do? Stay tuned.

How to Use YouTube for Market Research

Have you ever used YouTube‘s “Insights: Statistics and Data” feature?
It’s a remarkable tool for effective market research in real time.
Let me walk you through how I use it to:
– test new product ideas
– learn what customers like right now
– deduce where events should be held
– learn exactly which portion of a video clip grabs audience attention
– see which topics get customers engaged and why
– learn the exact demographic profile for each product
The first thing to do is create a separate video for each product or idea you are interested in selling. If you’re selling an information product – like a video or an audio, simply use a short excerpt. Keep it under five minutes. Three minutes is optimal. Upload your clips, make them visible to the public, and watch the fun begin.
In a few days or when you get to over a thousand views, it’s time to check your YouTube Insights.
Here’s what YouTube gives you:
stats
This summary of your results:
(1) Tells you how many views your videos are getting. This will tell you if you’re getting any attention at all.
(2) Shows you which video is getting the most attention. Now you know what your prospects like – and the margin between what’s getting attention and what’s not.
(3) Expose your real demographics. Not too fancy, but you get to see the age range your product resonates with. Every now and then I’m surprised.
(4) Identifies the regions where you are getting traction. Again, results do vary by geographic location, so you can decide if you want to spend some money to gain exposure in a particular country or state, for that matter, or if you want to focus on your natural geography – the places in which you’re getting organic attention.
Now let’s go further:
stats
(1) View your traffic over time – days, months, a year.
(2) Sort video popularity by region – again, a handy guide to what the reaction is to your message… country by country.
(3) Details on which videos are winners and which are not. Based on this you can decide which product merits backing, and which ones need more work.
stats
(1), (2) and (3) Which videos are getting the most traffic and from where…
stats
(1), (2) and (3) Which countries (or states) are most receptive to your work!
stats
(1) gives you the age breakdown for your products. Is it senior women or adolescent boys?
stast
(1), (2) and (3) tell you which products get the most response from your prospects – positive or negative. Let’s you know early on if you need to go back to the drawing board. A quick measure of engagement.
stat
Probably the most powerful piece of information, this tells you the level of attention – the peaks and valleys – for your work. Use it to optimize your messaging. Now you too can be a Frank Luntz (just don’t go over to the dark side).
All of this information costs nothing. And from my experience, the quality of results can’t be matched easily, not even by expensive focus groups!

Cloud Storage Strategy

The Cloud will change the way you live. Everything as a service: your computing, your desktop, your life.
One of the things I like about my job is I learn about cutting edge stuff, like customer-driven innovation, intuitive intelligence, and now cloud storage strategy.
We launched the cloud storage strategy site a few days ago, and now it’s simply a matter of keeping up with ideas. The Economist for example, in their global entrepreneurship survey, tells us that:
The development of “cloud computing” is giving small outfits yet more opportunity to enjoy the advantages of big organisations with none of the sunk costs. People running small businesses, whether they are in their own offices or in a hotel half-way round the world, can use personal computers or laptops to gain access to sophisticated business services.
Now that’s what we’re talking about!

Business Models for Short Attention Spans

I wrote once on another blog, that no one has time to read Harvard Business Review, or listen to an entire music CD, or watch the whole movie.
Our attention span is somewhere between 3 to 5 minutes. And that’s the size your idea-bite has to be if you’re going get heard at all. See Twitter, YouTube, CNN, et. al. We’re getting dumber second by second by second.
How do you build a business model for short attention spans? I think this is the key challenge for online publications – from newspapers, to blogs, to forums. Perhaps the key is enticing readers to return over and over – let’s say twenty times a day! So online journals must be updated very often (compare HuffPost with the NYTimes) with corresponding micro-blogging on the same topics.
And the revenue will come not for selling ads, but selling products and services. And sometimes, you may just sell them the longer version of your story.

Starting a Business in a Recession

As someone who has started a business in a down economy, I have to say it is not as easy as these articles (see below) make it out to be.
For starters, this is not the time to write a business plan, as some of them would have you do. Instead, focus on finding and keeping customers.
Two, get ready to answer these questions from your customers, er, prospects:
– Who are you?
– What can you do for me?
– Why should I believe you?
– How soon can you make a difference to my bottom line?
Starting a Business in a DownturnBusinessWeek
Strategies: It’s a good time to start a businessUSA Today
How to Start a Business During a RecessioneHow
Starting Up in a Down EconomyInc.
Five reasons why a recession is a good time to start a companyThe Industry Standard
What’s a good business to start now? Something you’re good at, crazy about. Something people call you about to get free advice on. Something you want to do for the rest of your life.
Can’t think of anything yet? Here are some fun new business ideas, 999 of them to be precise…
If you already have an ongoing business, here are some things to do now >>

Indian Innovation: Distributed R&D

The points raised by Anil Gupta and Haiyan Wang in their book – Getting China and India Right: Strategies for Leveraging the World’s Fastest Growing Economies for Global Advantage are echoed in this BusinessWeek article by Gunjan Bagla and Atul Goel.
So are things slowing down with the global recession? Here’s what they say:
We believe there may be a temporary hiccup in R&D globalization, caused primarily by companies freezing in their tracks as they reassess the new financial realities. But as soon as they rebuild their product road maps, nimble companies will actually accelerate their globalization efforts, pushed harder by tight budgets and the realization that the old ways can be disastrous.
Next up: What’s up with Dubai?