Startup Brand Marketing

Andrew Chen, one of my favorite marketer and essayist, argued yesterday in a Tweetstorm that startup brand marketing is almost useless. You can read the entire story (around 15 tweets) here:

With the Cannes festival going on right now there's a lot of discussion on the value of brand marketing and the incentives in the industry. I agree with Andrew directionally. I think he hit the nail on the head with this:

If this seems contrarian to you, it’s because there’s a vast ecosystem of consultants, agencies, and other middlemen who are highly incentivized to have you spend $ and effort on non-ROI/non-performant activities.

Here's the punchline. Great brand is a lagging indicator of success. But it is confusing for founders and early-stage entrepreneurs because, on top of badly incentivized actors who want to "help you with marketing for X$", you see a lot of successful companies who have great brands. I've blogged about imitating consequences before. It's a very tempting thing to do.

It’s easy to confuse correlation and causation: If you’re starting a consumer startup, you see successful late stage cos with fawning media coverage, amazing conference speaking slots, celebrities on the cap table, etc., and think that’s what caused their success: Great brand. But great brand is the lagging indicator of success. The buzz is created by the hard work that the entrepreneurs put in: Finding product/market fit, hiring a great core team, finding acquisition channels that scale.

If anything, brand marketing is more about everyone else than your customers. 

Where brand marketing does matter, especially outside of consumer: Recruiting a great team. Raising money. Partnerships.

I'm adding a tweet by a fellow planner (Stefano Augello) that I think is extremely on point. Let's not confuse everything here. Brand > Brand Identity > Brand Advertising, etc. There are different components in a brand – not matter what lingo you use. And not all parts should be treated equally.

The takeaway here is that if you're startup and you're still looking for product/market fit, you should not overspend of brand marketing.

Hiring a PR agency for 5K to get 2 press mentions in a niche media won't help you survive the next quarter. Spending 75K for a rebranding by the top design agency in town won't help you in the short term either. Spending 45K for a series of events that reach influencers that will never engage in consider buying your products is also a bad idea.

But you can take a day with your team/co-founder to think about the kind of organization you want to build – and what the brand should stand for. You can do the 3-hour brand sprint developed by Google. It can be a straightforward Vision / Mission / Values / Strategy statement. It can be a paragraph or a 2 pager. You can develop a brand identity around that with an affordable designer/agency. But do the 20% that covers 80% of your needs. Not the other way around. Because you'll run out of money real quick otherwise.

Blue Ocean Shift

Many books could be blog posts. Especially business books. So when my girlfriend told me she had to read Blue Ocean Shift, the follow up to Blue Ocean Strategy, my first thought was to look for a good summary. I found one on YouExec.com (PDF). Here's an expert of the summary:

In 2005, the book Blue Ocean Strategy described how some organizations across many industries have successfully made the leap from a “red ocean,” where competitors are trapped in a blood- red fight for customers, into a wide-open “blue ocean” of uncontested market space. Blue Ocean Shift is the recipe book to help organizations shift from red oceans to blue oceans.

Whether the head of a large bureaucratic corporation, a small non-profit, or a government department, organization leaders tend to assume that the conditions of their industry are a given, a set of constraints that form the boundaries of the red ocean in which they must compete. Focused on competing over customers, leaders assume that there is always a trade-off between value and differentiation. But that assumption is wrong.

Organizations can break out of red oceans and move into a blue ocean with a Blue Ocean Shift. Breaking out of the red ocean starts by swapping market-competing moves in favor of market-creating moves. There are three overall components to a successful Blue Ocean Shift.

  1. Adopting a blue ocean perspective: looking to the far horizon, recognizing that different questions have to be asked, and pondering what could be;
  2. Having practical tools that guide the process: these will translate a blue ocean perspective into a whole new offering;
  3. Embracing the concept of humanness: inspire people and build their confidence, so that they drive the process forward and can successfully implement the shift to a blue ocean.

My rule of thumb is that if that you should read summaries of books you don't want to read but you think might contain useful information. And it should free up enough time to re-read multiple times the books you truly want to read. Knowledge builds up. You have to be careful

The Theranos Story

WSJ investigative reporter John Carreyrou shares how he broke Theranos story & reveals its staggering scope of fraud & deception in his new book, "BAD BLOOD: Secrets and Lies in a Silicon Valley Startup"

Stakeholders

I read AVC.com every day. I often stumble upon useful bits of wisdom. Mostly about technology and business. Sometimes about high-level decision making and governance. Here's one about why it's important to do a stakeholder analysis when you make decisions.

Stakeholders have vested interests and they potentially clash.

Consider a neighborhood school. There are students, parents, teachers, administrators, non-teaching staff, taxpayers, the community, homeowners (whose home value is impacted by the quality of the school), and possibly other stakeholders. In theory every one of those stakeholders has a vested interest in the success of the school but in reality there is often conflict between them.

Stakeholders might not agree with you but they still need to be considered.

All complex systems have many stakeholders and while they all want the system to succeed, because they have a stake in it, they rarely view success in the same terms. You never want to surprise or be surprised by your stakeholders. They may not like you, agree with you, or even support you. But they must be understood, respected, and considered in your decision making process.

Interests might be easier to align over a long period of time.

Done properly, a stakeholder analysis attempts to determine what each and every stakeholder desires and the impact to them of an important decision. It is like a scorecard. It is often helpful to look at short term, medium term, and long term impacts. I find that it is often the case that conflicts are the most extreme in the short term and that if you can frame a decision and the impact of it over a very long time horizon, it can be easier to get alignment.

The Investability of Digital Assets

Grayscale was founded in 2013 and is on a mission to invest in digital currencies. The firm just published a research paper on the 'investability' of digital assets. Here's the opening statement of the paper:

It’s not every day, or even every decade, that an entirely new asset class is born. Yet, through a combination of computer science, cryptography, economics, and network theory, digital assets have arrived and are proving that they are an asset class unlike any other. As they transform our global financial infrastructure and challenge modern monetary theory, we believe digital assets are one of the most exciting investment opportunities of the 21st century.
— Grayscale

Here are the takeaways:

  1. In any portfolio, in the long run, diversification matters. Money managers work hard to find diverse assets that will provide optimal return/risk ratio to their clients (me, you, us).
  2. Digital assets, such as cryptocurrencies (Bitcoin is ONE of them) represent a brand new investment opportunity that is uncorrelated to other asset classes. The important part is that it's uncorrelated – meaning it provides a return stream that enhances diversification.
  3. Looking at numbers from December 31, 2016 through May 31, 2018, it appears that small allocations to Bitcoin can significantly enhance the returns of traditional portfolios without materially increasing volatility.
  4. Looking at the same time frame, it seams that investment portfolios containing allocations to a mix of digital assets performed even better than those only including Bitcoin.

And here's the graph you need to see:

 

Note: 2016-2018 was a very particular period for digital assets. The whole space was booming. Fast – maybe a bit too fast. And depending on where you stand on the topic, you may want to consider that past performance is never a guarantee of future results.

Value Chain Mapping

Antoine Buteau from The PNR sent me this video. It a criticism of bland business strategy. More precisely, it highlights the importance of figuring out your 'why' and your 'where', two questions are often skipped in strategy documents. To answer these questions, we often say 'well x% of the industry is doing it, so it must be a good idea'. It introduces the idea of value chain mapping. The idea is to use maps to figure out 'where' things are going and 'why' and 'when' you should go there or not.

"Apparently we are living through a time of disruptive innovation, with the creation of new value and the destruction of old norms. Cloud computing, Big Data, the rise of open source and the internet of things are all examples of this -- or so we are told. But whilst we all have inertia to change, disruption implies that the change is unexpected, even unpredictable. However, if you have 20 years to plan for something, can you really call it surprising, random or unexpected?

Alas, it turns out that companies are being disrupted by broadly predictable changes. But how can this be? The problem is poor situational awareness to the point of blindness. In this keynote, I will present the general principles of industry change and describe what can and cannot be predicted. I will then examine how companies can better understand the environment around them and by anticipating the nature of change then manipulate the market in their favor through open techniques."

Digital Ad Fraud

This is a must read for anyone who buy or is involved in buying advertising online. It is not sufficient to read a media agency's ad performance report. Go check out the sites your ads are on. Spend time in the ecosystems you advertise on, wether is social networks, mobile apps or other platforms. Develop analytical reflexes to grasp what ad fraud looks and feels like. Run tests with smaller budgets. Because according to this report, the state of ad fraud is not good.

The psychology of money

This article (link) describes 20 flaws, biases, and causes of bad behavior when people deal with money. It's a great read. Here's my favorite (#5). It illustrates how our personal context can influence our view of the world – in this case being mostly optimist or pessimist about the stock market.

Your personal experiences make up maybe 0.00000001% of what’s happened in the world but maybe 80% of how you think the world works. If you were born in 1970 the stock market went up 10-fold adjusted for inflation in your teens and 20s – your young impressionable years when you were learning baseline knowledge about how investing and the economy work. If you were born in 1950, the same market went exactly nowhere in your teens and 20s:

Build your own sous vide cooker

My girlfriend doesn't use YouTube a lot. Last week she asked me why do people really go on YouTube. I answered there was a lot of DIY stuff. People who want to cook, build things, repair stuff, test products, etc. Well here's a great example: you can build your own immersion cooker for around $75 (instead of 2000$) and this guy shows you how to do it, step by step, in this video. 

Internet Trends 2018

The Internet Trends 2018 deck is out. You can clip some slides for your pitch next week. Yes, social media influences purchases. You are all good.

 

I would sum up the 294 slides deck in one word - pressure. "Internet" is coming of age. The law of diminishing returns applies. Pressure on advertisers, CPMs go up, ROI goes down. Pressure on the United States / Canada, China is growing faster. Pressure on retailers, e-commerce forces prices down online and in stores. Pressure on manufacturers, mobile phone sales growth slows down. Pressure on employers, because freelance is facilitated. Pressure on large platforms, privacy is an issue. And pressure on people, because we sincerely wonder if we are in control.

My twitter commentary + top 10 slides below, follow the thread!

Disrupting management consulting

Here's a provoking article by CBinsights that explores how management consulting came to be, what are its main functions, and the changes that are coming. The article, titled Killing Strategy, argues why the practice is in danger. The key image is this one:

Management consulting's vulnerability to disruption isn't often discussed, but it is very real. It's a primarily human-driven industry — which doesn't bode well for its ability to defend itself against technology. (CBinsights

A Reminder To Read

I read a lot when I'm on vacation. That's the first thing I want to do when I wake up. I want to brew coffee, find a quiet spot and read. I literally go through books when on vacation.

When I come back home, in my routine, the craving is not as strong. I work all day, come back home and have little concentration to read. I feel it should not be that hard to go through books at home too.

Is it being far away from home? Is it that there's less noise and distractions? Is it because we're less tired on vacations? Is it because reading feels too passive of an activity to do at home?

No matter what it is, there's a special feeling on vacation that you're «free» to read.

So this is reminder to read. Everyday of the year.

Stephen Wiltshire

British Artist Stephen Wiltshire can draw a huge landscape completely from memory. Wiltshire, who recently drew a detailed sketch of New York after a 45-minute helicopter ride over the city, has a photographic memory and autism, which he was diagnosed with when he was 3.

Josh Wolfe at FirstMark

Pretty mind-blowing talk with Josh Wolfe from Lux Capital about ideas, opportunities, ventures, founding teams and Tesla. The topics discussed go beyond what I can understand or apply in my day-to-day but there's certainly a thing or two to learn from a person who invests in emerging science and technology fields such satellites; neurostimulation; nuclear energy; 3D audio, printing and scanning; metamaterials; synthetic biology; self-driving cars; etc.

Strategy Ressources

Julian Cole is a quite famous advertising strategist (BBDO) and he recently shared a nice list of free resources for planners/strategists. The kind of stuff you want to bookmark and want to save for a rainy (non-productive) day.

1. 50 Free Data Tools For Planners - https://lnkd.in/dmM2B2n

2. 150+ Innovative Advertising Examples - https://lnkd.in/gy5B8dF

3. 10 Best Strategy Papers - https://lnkd.in/gEa-Ycb

4. Day 1 Advice for New Planners - https://lnkd.in/ga2JWpa

5. Strategy Mate - https://lnkd.in/g59rJus

Say thanks to Julian here.

Listening

Listening is THE ultimate underrated skill. I will always remember what my manager at l'Oréal told us when asked about strengths and weaknesses of millennials at work. He said something like: « you have everything you need to succeed in the workplace but you lose all your credibility when people talk to you and they realize you're not listening – you're just thinking about what you'll reply with. » It stuck with me since. Here's a great tweet about this: