What was the action taken and what was the result?
What might have been a more preferred result?
What was the specific lesson learned?
How could we identify a similar situation in the future?
What behavior is recommended for the future?
Who needs to be informed about this lesson to ensure a more preferred result?

The progression of questions take you from recalling the action, analyzing the action, determining new lessons, and deciding who needs to have this knowledge.

Try it for yourself and for your teams.

Of the five trunks, three of them used to be alive with leaves sprouting. Now,  only one trunk is left sprouting leaves and it’s flourishing, all the others have died. This tree reminds me of a lesson about starting a business. A lesson about focusing resources and not being pulled in all directions. About how some ideas and ventures will eventually fail, and how by staying in there, eventually one idea will flourish and grow.

Growing a startup isn’t about taking on many goliath’s in parallel. It’s about nurturing the most promising ventures and then building from that success. Create leaves, not trunks.

The relentless search for “tell me what to do” 

If you’ve ever hired or managed or taught, you know the feeling.

People are just begging to be told what to do. There are a lot of reasons for this, but I think the biggest one is: “If you tell me what to do, the responsibility for the outcome is yours, not mine. I’m safe.”

When asked, resist.

I’ve received the largest batch of resume’s from a craigslist as as I ever have in December 2009 99% of applicants haven’t changed their stripes. Here’s the advice:

1. If you’re out of town, specify whether you’re willing to re-locate or work remotely. Unless you’re exceptional I’m not going to contact you to find out.
2. Read the job posting and respond relevantly. I have a boutique shop that does cool things and a job posting that’s asking for some unique qualities. That means, don’t respond with a standard copy/paste letter or with no email body at all.
3. Along those lines, tell me why you’re a good candidate for the job. I spent time being detailed about the position, spend some time and tell me why you’ll fit. Don’t make me figure it out by deciphering your resume.
4. I get over 100 responses to each job posting. Ask yourself if you’re really going to stand out.
5. Give me your phone number and address, not just an email.
6. I don’t care about your GPA unless you list it as low. Maybe others do. Leave the GPA off, include the year of graduation. If there’s no GPA, I don’t care to know it. If you list a 2.2 GPA, I’m going to notice.
7. I expect everyone is embellishing to a degree, make yourself sound awesome because I’m probably going to assume you’re not as good as you say (unless you say it *really* well)

All that said, it’s a hard market out there and I wish everyone good luck with the job hunt. We’re not at 12% unemployment because it’s easy!

What is Google?

Let’s look at Google. At it’s core, Google is a content company that derives revenue from advertisement. If you look at Google’s 10Q, 99% of their revenue comes from advertising services.

Google looks at online, desktop, and mobile software as content that can be offered free to users in exchange for advertising.Rather than having a blog, or a wiki, or a magazine, or pornography, or some other form of content, Google’s driving content is software. Software to search the web, software for email, software for editing documents, software for managing photos, software for getting directions, software for reading news and blogs. Google provides free web, desktop, and mobile software in exchange for advertising attention.

I’d like to note an exception to the above with Google’s business services, but that business unit is an insignificant revenue stream and has insignificant market share.

Google is best defined as a content producer, monetized by advertising. They are unique from what we would traditionally think of as content producers in that their free content is software and web services.

What is Microsoft?

Microsoft is a pure software company at it’s core. Microsoft designs, develops, tests, and packages software for desktop, server, mobile, handheld, tablet, vehicle, surface, and other devices. From operating systems to games to productivity tools, Microsoft is a company that produces licensable software across a breadth of industries.

Microsoft licenses software and sells support and maintenance contracts; targeting both business and consumer customers. Microsoft has the sales, marketing, and support infrastructure to back up a large software business.Gaming, media, advertising, consumer electronics, hardware, and other businesses Microsoft has extended into. Leveraging their software business they develop or advance new markets to sell software into.

At the end of the day, Microsoft sells software and has an ecosystem built around it for support, certification, maintenance, and development.

Winning the Consumer Market

Google is moving more and more into the consumer space. A space where advertising is a legitimate form of revenue generation. Google can continue to offer free software content to consumers and monetize through advertising. By offering software and services for free, Google is granted more leeway from consumers regarding the quality of the software… whether it be bugs or lack of functionality. Consumers are also okay with software being in a perpetual beta when the software is free.

For traditional software sales, Microsoft is maintaining it’s dominance. Despite all the bad talk in the press and blogosphere, Microsoft’s software business is still growing, as is the company as a whole.

Microsoft is cognizant of the intrusions into the consumer space by free software and web services from Google and other companies and is putting together strategies and making acquisitions for when the time comes that their software unit becomes flat. Today, there is still a lot of money to be made with traditional software sales, and Microsoft isn’t about to jump into the advertising for software content business until they’ve finished milking the software licensing cow.

Winning the Business Market

Today, Google doesn’t have the pieces in place to serve the business community. They have not invested in the sales and support infrastructure, nor have they invested enough in their business software offerings. Their business offerings are not as feature-rich, end to end, or functional as Microsoft offerings. Google does not have the world wide sales teams and support infrastructure that Microsoft has. Google has no certification program and a weaker partner network.

Google is a consumer facing company today, and from their investments it looks to stay that way for a long time. Microsoft is business facing and has leveraged that market to get to the consumer.

Recently, Microsoft has made investments and acquisitions in cloud computing and web advertising (including their recent $42 billion bid for Yahoo). Microsoft is in a dominant position overall and is getting prepared to compete when software goes more and more online. Remember, Microsoft still has a large web presence, a large IM presence, a large email presence, and a large social networking presence (especially in other countries). Microsoft is already ramping things up to take over when packaged software slows.

Google has a long way to go to enter domains Microsoft is dominant in. Microsoft has much less work to upset Google’s consumer web dominance.

In general, optimized business means greater operating profit. But, there are some times when you should consider putting your short term operating profit less than front and center.

• When you’re launching a product.When launching a product there are a lot of concerns. First, is even getting the thing off the ground. Then there are considerations of adoption rate, market success, customer feedback, supporting operations, and quality testing are also important. At this time if you are engineering down product and operational costs you could be sacrificing a few things of value: time and money. It takes time to optimize your offering, and in the mean time you’re not in business. It takes money to streamline your business, but you may never see adoption of your product and that investment was of naught. Or, maybe worse, a competitor makes it out before you.
• When you have a market but are entering new territory.If you have a product that is successful in a market and you are looking to expand, this could be another time to consider de-prioritizing profit. Business is fast and if you’re racing to grab market share you sometimes need to put product optimization behind you so you can control a market. This can mean entering contracts with less margin. It can also mean that those plans to engineer down costs are backburnered so you can capture a new customer base.
• When the cost/benefit doesn’t work out. Often times we see the carot. We see that we can increase our operating profit by a certain percent. Or we see that we can decrease our costs by so much per unit. We get tricked into investing time and money into chasing these margins. We don’t really do a cost/benefit analysis. Look at the man-hours and money it will take to reduce costs. Try to quanitfy for yourself the lost opportunity cost of time passed. Look at your increased margin per unit. Look at your sales projections. Look at the opportunity cost. Then, decide what the best course of action is.

So, with all that said. Optimizing your offerings and operations is a great thing. It can be easy money to capture. Just be cautious of the situation you are in before pursuing optimization.

It’s tempting for startups to look for increased margins, especially if they are thin to begin with. Sometimes you have to make the investment so your business can survive. Just remember, sometimes the search for optimization can kill you. I’ve seen it a lot.

If you’ve read a lot of books and articles on business and “how to win,” or “the top ten attributes of successful businesses,” or “how to execute” you’ll notice that you get somewhere between a couple morsels of applicable information and zero. Maybe you’ll pick up the latest buzz words.

So why do we read all these books and articles if what we get seems to be very little? Well, it’s to fill gaps, to build confidence, and to reflect. There is a lot of good information out there, it’s just sometimes the context of the writer doesn’t match the context of your business.

There is a lot of context missing from business advice. What is a priority for a company, group, or individual not only changes by individual but is also a function of change over time. Funding is most important, now it’s people, now it’s a sales strategy, now it’s protecting IP, now its [fill in the blank], etc., etc.

Take time to regularly evaluate where you stand. It’s easy to get caught up in the flow of things. Every week or two take some time to slow down, sit back, and think critically about where you’ve come from, where you’re at, and where you want to be. Give yourself some context, try to recollect all the advice you’ve gotten, and then modify your plans.

And, if you find yourself needing some advice, just remember to translate all that you hear and read into the context of your business.

The ideal state of a business is sustained growth, a nice gentle line that trends upwards.

A bad state, obviously, is a sharp downward slope. The only positive behind a sharp downward slope is that it’s obvious, you have to react to stop the bleeding or you have to cut your losses.

A not as obvious state of danger is a slow decline. Having a metric slowly go downhill is dangerous. The trend takes longer to see. People can still remain apathetic. It’s the kind of thing where people say “how did we get here?” If your performance metrics are trending down, even just by a small amount, be on your toes.

Probably the most dangerous times are high growth. If your metrics are off the chart it’s a time to celebrate… cautiously. Growth is good, sustained growth is what we want. If you have a peak, be critical. Is it a fluke? Is it sustainable? Be conservative, put money in the bank, don’t overspend. High growth leads to high emotion and that can lead to poor decisions. Get to a sustained growth and you’re golden.

There are a few direct ways to make money on the Internet. Subscription to services, sale of goods, and advertisements. For pure online plays, in other words businesses that are in the business of information, it’s either subscription or advertisement to monetize content.

As time passes, fewer and fewer companies can survive based on the subscription model. People want free access to online information. Today, advertisers provide a means for the average person to freely access online content.

This is why we see the domination of Google, a company that makes 99% of its revenue through advertising… $11.6 billion in 2007 to be exact. Advertising networks drive the monetization of today’s Internet. Content exists, people want it, producers and publishers rely advertisers to sponsor their content.

Here are some figures…

• There is $26.53 billion spent on advertising for Internet, mobile, video games and digital out-of-home
• Total Internet advertising is projected to to reach $61.98 billion in 2011, surpassing newspapers as the nation’s largest ad medium.
• Marketing segment is a $254.01 billion industry

The advertising market seems to be bubble proof and Web 2.0 proof. Regardless of the *what* and *how* of the medium, it’s going to be sponsored by advertising until there is a cultural shift or another clever way of monetizing eyeballs on digital content.

In an effort to capture this revenue, ad optimization is the game. Advertising networks such as Google, Yahoo, AOL, and Microsoft among many others are working on providing the best click-through and conversion rates to keep advertisers paying and keep content publishers paid.

Contextual targeting, recommender engines, consumer behavior tracking, and now social networking are the means for optimizing advertisements online today. Making sure the right person is looking at a relevant advertisement keeps this market growing. Undoubtedly there will be other methods of creating optimized advertisements in the future.

Not for profit groups are an interesting animal. They are here to meet a social goal with ultimate primary focus on that goal and not profit. At the end of the day though, a not for profit organization is very much like any other incorporated entity. It needs to make money, market, and make their customers happy to survive.

Here are some categories that not for profits want:

1. Survival – Like all entities a non-profit wants to survive and continue. This could be indefinately or for the duration of its mission or grant. Survival is usually a cost for not for profits and includes taxes, government filings, human resources, and other operational items that are required to function.
2. Stability – Stability is a category of want that a not for profit has that is somewhat unique. Many not for profit organizations are not concerned with growth or change. They reach a plateau and want to maintain. If you can help an organization to maintain it’s user base, volunteer base, funding, etc. then you can help the organization meet its want.
3. Achievement of Mission – The ultimate goal of a non-profit is to accomplish a mission. This can be a mission with an end or something that is onoing. If you can help a not for profit better fulfill its mission statement you’ve got a potential customer.

The not for profit sector is a different animal. The culture and wants and needs and problems are unlike that of traditional business. But, the not for profit sector is huge.

There are many not for profit organizations that do run more like typical businesses with profit as a focus. This is especially true with not for profit medical. There are stories about not for profit board members and executives making millions and millions of dollars personally. There are regulations that have been passed and changes continue to be made.

The entire US not for profit market is composed of 1.3 million organizations. There’s definately money to be made and problems to be solved.

Distilled down, businesses are concerned with two things:

1. Survival – This category is about ensuring the ongoing operations of the business. These are often times cost centers for the business such as taxes, regulatory compliance, corporate filings, human resources, etc. They are required for the business to function and survive.
2. Profit – This is the ultimate goal for business. This category is about offering ways for businesses to increase profit. See return on investment. This includes optimizing processes, reducing cost structures, providing product for resale, etc.

While businesses can be socially conscious or do good, charitable, and altruistic things, a business at it’s core is concerned with it’s own survival and profit.

When developing offerings for businesses you should ask yourself how your offerings fulfill one of these two wants of the business entity. If you can offer a business a better way to survive or profit you’ve got something.

Illustrate a return on investment and you’re gold.

By evaluating your offerings in these categories it helps to give clarity as to the “why” a person is after your offering and how to tailor your offering and marketing.

The categories

1. Survival – This category encompasses basic needs. Food, shelter, clothing and all the things that go with it.
2. Comfort and Contentment – This category includes entertainment, leisure, and creature comforts.
3. Ego – This category is about power, status, and standing in communities and social circles. These are purchases made for image and status.
4. Peace and Fulfillment – This category is about seeking or finding something to give a feeling of inner peace. Religion, meditation, counseling, and self help.
5. Family – This category is about providing for your family. This includes services for children, education, and health.
   <.ol>

   There may be other categories that are more general or more specific, but I believe these cover most all offerings. So let me give a few details to clarify these categories.

   1. These categories embody various types of wants, needs, or problems. Find a gap that keeps someone from meeting their needs for survival, comfort, family, etc and you’ve got a potential market.
   2. Wants within these categories don’t necessarily have to be real or actual wants. It’s the perception of want or need that we’re considering.
   3. Solutions to wants or needs or problems can cross categories. Cars, for example, provide survival, comfort, and ego depending on the state of mind of the consumer.
   4. There is a hierarcy of these needs. The problem is the heirarchy changes based on the person. Survival should be at the top, as should family (from my moral and ethical view anyway), but people will often times put personal comfort or ego above family. Or will put ego above fulfillment. The hierarchy can define our cultural values.
   5. These categories don’t derive from a natural or biological need. These categories are about what people say to themselves and perceive as needs.

   That’s the category list, if you can think of any other categories or a better list, please let me know.

   These categories help me with brainstorming and execution. It allows me to think in small chuncks and once an idea comes it is easier to evalulate the execution of the idea.

   ]]> http://blog.lowesoftware.com/business/categories-of-wants-for-consumers/feed 0 http://blog.lowesoftware.com/startup-ventures/hair-on-fire-analogy-expanded http://blog.lowesoftware.com/startup-ventures/hair-on-fire-analogy-expanded#comments Mon, 03 Dec 2007 16:36:30 +0000 Alex Lowe http://blog.lowesoftware.com/startup-ventures/hair-on-fire-analogy-expanded Maybe you’ve heard the analogy of somone with their hair on fire as an image used to demonstrate the idea that when developing a business offering you should find a critical problem and figure out how to solve it. If you haven’t heard the analogy it goes something like this:

   If someone’s hair is on fire they’ll want a hose, they’ll pay you anything you want for it and it the details about the hose doesn’t matter. If you can put the fire out, the person will not care about the color, size, shape or other details about the hose. When starting a business, developing a product, or brainstorming an offering look for a problem that people have and solve it for them. Fix a critical problem and the consumer will not care about the details of the solution.

   
   
   

   Great advice, right? I think so. But I think there are a couple elements missing from the picture. I think the hair on fire analogy needs expanding on. Here are a few things to consider:

   1. As stated, find a critical problem and provide a solution for it.
   2. As illustrated in the image, but not usually considered; the customer has to know about the problem. This fits the hair on fire analogy. If the user’s hair is on fire, they’ll know. Solving problems that nobody perceives as a problem means you have to spend time and money to educate the consumer. And, if the consumer doesn’t know they have a problem, they will not seek you out. You have to find them.
   3. This one is not illustrated in the picture. There have to be enough people with hair on fire. Or, the small number of customers with their hair on fire must pay big. Make sure your market is large enough to sustain.

   So, I think the new analogy should be to find lots of people with their hair on fire and sell hoses to them. That would cover the three points above.

   There are other considerations, but I think those three weed out a lot of non-starter business ideas. Cost structures, risk, competition, etc are considerations. But, if you find an idea that meets the three requirements that I’ve outlined, I think you’ve got a great idea to start with… and if you need help with any of the execution, give me a call or send mean email.

   ]]> http://blog.lowesoftware.com/startup-ventures/hair-on-fire-analogy-expanded/feed 0 http://blog.lowesoftware.com/software-development/entice-educate-engage-the-three-e%e2%80%99s-of-marketing-and-presentation http://blog.lowesoftware.com/software-development/entice-educate-engage-the-three-e%e2%80%99s-of-marketing-and-presentation#comments Mon, 19 Nov 2007 17:12:25 +0000 Alex Lowe http://blog.lowesoftware.com/software-development/entice-educate-engage-the-three-e%e2%80%99s-of-marketing-and-presentation A mental strategy for marketing and presentation. This article will focus on how you develop software, web sites, press releases, pamphlets, or marketing copy. Basically, anything you present to the world and want to draw users into.

   When offering a new application, a new web site, a new service offering, or anything else you want to drive users to there are three concepts to remember, fortunately they all start with the letter “E.”

   1. Entice
      • First you must entice the user to check your offering out. There’s a lot of ways to do this, think of what works best for you. Offer something for free, coupons, a trial, an interesting tag-line, stellar graphics, pose a question, point out that you can fix a problem in the users life. The enticement has to be short, sweet, and to the point. You have to hook the users attention and you only have a few seconds to do it here.
   2. Educate
      • So you’ve done a great job enticing the user, the next step is to educate your audience about what you’re offering. You have more time to do this, but don’t take more than 30 seconds up to a few minutes of the users time. The nature of your offering and audience will dictate how much user attention span you have here.

        If you have an offering that is compelling, solves a problem, and is scarce you’ll have more opportunity to talk to the user. If you have an offering that is in a saturated market place you’ll have less attention span.Don’t go overboard here, give the benefits and value proposition to the user as concisely as possible. List your features and benefits, provide cost information, testimonials, quotes, or links to further information such as white papers or case studies.

   3. Engage
      • If you’ve gotten the user this far and your offering is compelling you’ve done a great job. Now’s the time to make a call to action. Sign up now, order here, do something, talk to a representative, get a free trial, try the demo. This is where you want to engage your user to an action. Let them explore your offering and learn more.

        Ask the user to make an investment of themselves, even if it’s only a few minutes of their time.Remember to continually engage the user. Give the user opportunities to try different things, learn different aspects, and interact. At this point the user probably wants your offering and they’re making sure it’s something they can actually use. The more engaging your offering the more the user will invest. A positive investment of time and research in your offering will give the user an emotional connection to go with you.

   These may seem common sense, I think they are. But it’s the type of thing to keep in mind when writing code or writing copy. If any “E” is weak you’ll lessen your chance of closing the deal and gaining the user. And, of course, having a great offering is the prerequisite to all of this!

   Good luck with your ventures!

   ]]> http://blog.lowesoftware.com/software-development/entice-educate-engage-the-three-e%e2%80%99s-of-marketing-and-presentation/feed 0