"Fix your toaster."
VC Confidence Plunges
This morning I caught a little story on NPR by John McChesney about venture captial. Seems that Mark Cannice runs a quarterly confidence survey of SV VCs. His most recent survey showed confidence plunging to a four year low.
What does that mean? VCs hunkering down and making sure they have the dry powder to do follow on investments that may not exit quite as quick as they hoped. Whether that happens or not remains to be seen, I am still seeing healthy investment. But the piece is worth a listen.
Positioning
Continuing my series of short articles on startup marketing this week I want to talk about positioning (yet another P). Positioning is a concept in marketing which was first popularized by AlRies and Jack Trout in “Positioning – The Battle for Your Mind” back in 1981. The basic concept is that any brand/company/product is valued by the perception it carries in a person’s mind. It is something that big tech companies typically do a horrifically bad job of. But to give a few examples in my mind:
Amazon = world’s largest online store
Apple = simple design
Blackberry = mobile email
Dell = made to order computers
Flickr = photo sharing
Microsoft = hard to use software
Oracle = databases
Positioning is a bit of an old school concept that still has great utility today in the construct of startup marketing. Like some more colorful words, positioning it can be used as both a noun and verb.
Positioning, the noun, is the market’s perception of a company and its products. It is what your competitors, customers, investors, prospects, and vendors perceive about the offering. The key word here is perceive.
Positioning, the verb, is the act of selecting and emphasizing individual associations that can influence the overall perception. It is creating, or at least influencing, the noun version of the word. Positioning is a crucial step and a foundation of any startup marketing strategy. If you don’t do it, your competition will, and in a way that does not put you and your company in the best light.
With that said, I have found that entrepreneurs hate to try and position their companies. Why you may ask. Because it forces a niche approach. A niche approach forces you to decide what you want to be when you grow up. Entrepreneurs typically don’t like to address this because it reduces options. If you don’t reduce options you become Yahoo!.
So, how does one go about the act of positioning. I have found that a combination of the concepts presented by Geoffrey Moore in Crossing the Chasm (page 161) and Chris Coleman in The Green Banana Papers (page 36) work best. While it takes a lot of research, strategic thought and time (it will take at least 90 days to distill this), simply fill in the blanks or modify to suit your needs.
For __________________
(target customer)
______________________
(company/product name)
is a _________________
(category in which you compete)
that _________________.
(functional need filled)
Unlike _______________
(your primary competitor)
we ___________________.
(why you are different).
And once you get that down you consistently repeat it. Consistently repeat it.
Here are a few examples from startups that I have been a part of in the past that I still can recite.
CipherTrust
CipherTrust provides email security to enterprises so they can protect their messaging systems. Unlike the competition, Ciphertrust offers comprehensive protection designed from the ground up for demanding messaging environments.
MindSpring
For individual consumers who are frustrated with their online experience, MindSpring is a national Internet access service that offers easy to use software, a reliable network that enables customers to connect, and accessible, friendly customer service. Unlike America Online, we are not trying to be the biggest, we are trying to be the best.
One final important thought. You can’t turn a Chevette into a Corvette via positioning. The act of positioning has to begin with where your are currently positioned in the market and has some bounds.
With that said, positioning is powerful. Take the time and thought to do it.
Entreprenuer Rodeos
The title is a tribute to being named a member of the "Atlanta Startup Posse" by Jeff Haynie. If you are an entrepreneur there are a couple of round ups that you might be interested in.
Last week Sanjay Parekh announced Startup Riot. It’s a pitch event focused on getting entrepreneurs in front of potential employees, customers, and investors. Sounds like a lot of fun so jump on your horse and sign up.
I also got a little pony express delivery from my dear friend Andrew Hyde encouraging me to encourage you to go West young man. Apply to TechStars. Since there are no cool summer programs in the Southeast you might as well go enjoy the mountains. Tell David I sent you.
Giddy up!
Quote of the Week
"Airlines learned their human factors from hospitals."
Hat in Hand
On Tuesday Stephen Fleming announced on twitter that the Director of ATDC job has been posted. This led to a small twitter flurry from folks like Sam Bowen, Jeff Haynie, Michael Mealling, and a DM or two suggesting that I am a good candidate for the position. While I appreciate the support from the entrepreneurial community and have the required skills and experience in the job description, I am not throwing my hat in the ring for consideration. I feel that with the public show of support I need to let people know why.
First of all, it’s off strategy. To be clear, as I have stated before, I love my job. But I am not here to climb the ladder at Georgia Tech. I am here to find other like thinking entrepreneurs and create/join a startup that I can make go. Becoming the Director of ATDC is a long-term commitment that takes me away from my goal.
Second, Haynie is right, I have great passion for technology startups. I enjoy interacting with and helping entrepreneurs. Becoming Director of ATDC would most likely reduce the amount of time I can spend on what I most enjoy about my work.
So, I am staying on the sidelines for this one. I trust Wayne Hodges and the search committee he has assembled will do a bang up job finding the perfect candidate. While that is taking place I intend to keep doing my part as a Venture Catalyst with the same energy and passion that you have seen over the past 16 months.
Marketing Is Simple
Twenty five years ago legendary marketing scholar Theodore Levitt of Harvard Business School made the statement that "The purpose of a business is to create and keep a customer" which at the time was pretty revolutionary at the time. As I discussed last week, to get a customer you have to solve a problem.
When it comes to startup technology marketing, from a more traditional marketing function perspective, I find that a lot of companies don’t do it. They don’t do it because they don’t understand it. They don’t understand it because some marketing type dressed in all black and drinking a latte starts spouting in marketing speak the need to "segment the paradigm in a way that leverages your core competencies into product attributes that effectively capture your brand essence so at the end of the day you can create a customer centric communication platform that will enable you to not only enter the target’s evoked set but create acquisition programs with strong calls to action that have effective ROI and meet your KPI metrics. And by the way, this is going to cost about $15k per month for the next year."
By the time Mr. Marketing is finished the geeks are looking at each other as befuddled as they should be, trying to get the guy out the door, and left with the impression that marketing is difficult and expensive. Well let me tell you it does not have to be.
Marketing is simple. It is two things. And number one is a lot more important than number two.
- Getting customers
- Building awareness of your company and product
In the early stages of a company you can filter any marketing proposed activity through these two lenses. If you do not understand how some marketing program can help your company to achieve one of these two things don’t do it.
Marketing is simple. Just keep away from all those types dressed in all black. The good marketing types wear blue jeans.
Why I Love Purdue
Skribit In Open Beta
Skribit entered open beta last week. Since we launched the product in private beta we have spent a good deal of effort making sure that the service and production environment were stable to handle the load. And the load surely is growing. We are getting upwards of 25K UV with no marketing spend as this Compete graph demonstrates:
The main customer visible changes as we move into open beta are notifications to bloggers when they get new suggestions and to readers when a blogger writes about a topic they suggested. We also created weekly activity summaries for bloggers and added the ability to comment on suggestions.
The team is now at work on creating the next rev of the application that is focusing much more on improving the overall usability of the application and increasing user engagement. And that is what Skribit is all about, increasing the engagement between bloggers and their readers.
What’s also pretty exciting is that I think we are also getting close to paring down the group to a core team that is going to dedicate more time moving the project forward. Not sure about this but we could be the first Startup Weekend project to take this step. When it happens we will announce on the Skribit blog.
Regardless, if you blog give Skribit a whirl on your own site. If you don’t blog make a suggestion in the application on the sidebar for something interesting for me to write about. Either way the team and I would love your feedback on the Skribit application.
Quote of the Week
"Democracies don’t make great products."
Jean-Louis Gasse