Category: Management

Guy Kawasaki talks to Margie Zable Fisher:

# The client doesnt understand the publicity process. PR folks need to better educate people about how publicity works. The first thing many clients ask is, Can you get me on Oprah or the front page of the Wall Street Journal? The answer might be yes, but the process to get to the yes may take months or years, and may first include a series of smaller placements.

# The scope of work is not detailed and agreed upon by both parties. Heres a typical example: a client signs an agreement to spend $3,000 per month. Client expects to get three publicity placements per month. PR person expects to work 20 hours, regardless of the outcome. The inevitable disconnect leads to customer frustration and the feeling of being burned.

# The client has not been properly trained on how to communicate with the media. Proper training for interviews is crucial; otherwise, key messages can be misconstrued, and even negative stories can result. Clients seldom blame themselves when this happens.

N. Venkat Venkatraman writes:

Platform architecture is essentially network-centric. it involves coordination of modules (or sub-components) designed and delivered by different independent entities. So, while we may credit Apple for shifting the music industry to the network era, its success equally well depends on the broader ecosystem that it has orchestrated. Microsoft–despite succeeding in architecting the Wintel platform–has been unable to win with Zune thus far. Similarly, GM OnStar is a relatively closed (GM-centric) telematics platform that has not yet been adopted by any non-GM automakers for it to be considered a network-centric strategy while Microsoft is initially partnering with Ford Motor Company to launch a new dashboard OS. When Microsoft extends this experiment to deliver this functionality to non-Ford cars, it becomes a platform architect in the same spirit of Windows and Office platforms.
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Platform architects earn revenue in two ways. There is direct payment from the users of the platform (e.g., Windows Vista or Office 2007, Sony PS3 or Xbox) or indirect payment from other parties involved in business transactions (e.g., advertising in the case of Google or transaction fee in the case of Visa or Amazon or eBay). The choice depends on network characteristics and customer propensity to pay for different features under different conditions.

VentureBeat writes:

Facebook is growing quickly, adding between 100,000 and 150,000 new users per day, the company tells us, with the highest growth rates coming from abroad.
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The break-neck growth shines a spotlight on two challenges possibly at odds with each other. The first is pragmatic: find more ways to monetize, possibly with an eye to go public. The latest example of Facebooks efforts here is Marketplace, its classified-ads service. The second strategy is more exploratory, but more exciting: provide a users social context, such as a list of their personal interests, their friends and groups to other sites and applications. This creates an online social ecosystem of sites offering any number of services.

Next week’s Tech Talk is on Facebook.

Matt McCall writes:

Cash is the life’s blood of any company. It comes from either the company’s operations or from raising capital. There are a number of definitions of cash flow. I prefer to focus on what the core operating business is generating or burning net of any financing activity. As a result, I look at Operating Cash Flow minus Cap-X. A gross generalization of this includes (apologies to all of my accounting & finance profs):

Net Income: plus depreciation, amortization and other non-cash cash income statement items, minus working capital needs, minus core, recurring capital expenditures (exclude large one time charges)

Since both working capital and cap-x can vary significantly monthly, you should average across a period of time that smooths out the swings such as the average monthly cash flow for a 3 or 6 month period. You should also understand how this changes as your business ramps since it will impact your financing needs.

Pamela Slim gives some tips:

# As soon as you get to your location, set up and test your equipment. Schmoozing, coffee and furniture re-arranging can wait.
# Check and double check to make sure you bring the right presentation, and right version of the presentation, to the live event. Am I the only one that does last-minute changes to a presentation and mistakenly saves it to the wrong place on my hard drive?
# Fully charge your laptop battery, and bring a backup if necessary, even if you are planning to use a power cord.

Matt McCall writes:

One day, I was going through a bipolar moment. One of our companies was about to sell for a nice multiple on invested capital. However, later that day, another company informed us that it had lost two major customers and was in a severe liquidity squeeze. Since your attention always goes to the fire drill of the day, I jumped into crisis mode on company B while much of the euphoria from company A receded. Ironically, later that day, I was talking with a friend about children. He mentioned the quote above. You’ll often find yourself, as a parent, happy that one of your children finally mastered a hard task but find yourself stressed because another is struggling due to health, friends, academics or the like.

I began to think about the children/portfolio analogy and realized that there were a lot of other common lessons. Most of these relate to how you interact or manage the deal. One of the most difficult tendencies to avoid as a venture capital is to jump to deeply into the day to day operations of an entrepreneur’s business. VC’s have to walk the fine line between being helpful and being meddlesome. Many of these lessons also apply to CEO’s and how they manage their lieutenants.

VentureBeat has a post by Igor Shoifot about “the ingredients to success in todays brutal Web 2.0 world.”

1. Work: get customers by resolving real pains, listen to them, create what they really want/enjoy, more importantly – co-create with them, address technological issues of scalable growth, build multiple revenue streams, greedily capture the key distribution channels by being valuable to the channels, incentivize, put low cost at the foundation of your growth and assure that growth brings business, not just eyeballs (that is, unless you are in a magnificent real estate business a la Youtube/Skype/Myspace).

2. Play: give customers real and compelling reasons to come back, and often, get their creativity going, make them enjoy (better: compete) expressing themselves, turn them into your best marketers by honestly serving them better than anyone and by passing as much value onto them as you can (or even more!), build viral growth mechanisms (and, no, incessant daily emails reminding your users to buy something are not a viral growth channel).

3. Shut up: If you really-really want to succeed for sure, then forget about everything else in life and concentrate on what youre building, that is, yes on #1 (working) and #2 (playing).

Michael Mace writes:

Most of our companies tend to focus on building what I call how products. That means products that focus on enabling technologies to let people do a wide range of tasks. For example, building a web browser and a WiFi connection into a product that doesnt currently have them is a classic how move, because it enables the user to potentially do a lot of different interesting things.
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The problem with the how approach is that normal people dont think this way. They are much more focused on what, as in What does the product do for me? Because they dont understand technology at a deep level, they cant see the possibilities created by a great enabling technology. And even if they could see the possibilities, they dont have the skills necessary to adapt it to their needs. Even an (allegedly) simple act like pairing a wireless device to an unfamiliar WiFi router can be enough to give a typical user hives.

In competitive situations, how products usually lose to whats…

WSJ has an article by Dr. McAfee and Dr. Brynjolfsson:

If this brutal competitive cycle — first described as “creative destruction” by Austrian economist Joseph Schumpeter in 1942 — makes you uncomfortable, we’ve got some bad news.

We’ve been studying competition in all U.S. industries, not just the high-tech ones, and we’ve observed a remarkable pattern: On average, the whole U.S. economy has become more “Schumpeterian” since the mid-1990s. What’s more, these changes have been greatest in the industries that buy the most software and computer hardware.

Over the past dozen years, in other words, information-technology consumption is associated with the kinds of competitive dynamics we’re accustomed to seeing in the IT-producing industries. And because every industry will become even more IT-intensive over the next decade, we expect competition to become even more Schumpeterian.

Stephen Johnston blogs about comments made by Lester Wunderman at the Forrester Marketing Forum:

# We used to be in the business of direct marketing now were in the business of relationship marketing.
# We will eventually move on to personal marketing, which will be facilitated by the use of data.
# Four goals for direct marketing: Relevance, relationship, repurchase, and retention.