Archive for August, 2007|Monthly archive page

Read This….

quit.jpgTim Siedell is a friend who I met through Twitter.  Like many of the people I follow, Tim is in the marketing business.  More specifically, Tim is the Creative Director/Co-founder of Fusebox, a brand communications studio in Lincoln, Nebraska.  Today, he is celebrating seven years of running his own business and wrote a great post that offers this advice…

Caveat here: the advice is not intended for everyone, but for those who feel it works for them, Tim offers seven lessons learned…

I highly recommend that you check out the post and subscribe to Tim’s blog whether you are planning to quit your job or not.

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What’s Wrong With This Picture?

Ah, the vacation. I remember when I was a kid (pre-teens), we would go to Va Beach and rent a “cottage”. It was usually an old, weather worn structure with wooded (sandy) floors and no air conditioning. Other families would join us making for a week long party. Every day, the Moms would packed lunches while the Dads packed Styrofoam coolers with sodas and beer (Falstaff or Schiltz as I recall), and you and the other families would spend the whole day at the beach. If you needed to make a phone call, you walked or drove to the nearest Bell System phone booth. You might get a newpaper, but that was not likely and you didn’t watch much television because the closest station was 40 miles away.

Instead, you played games, listened to music, had conversations. It was a big party. The adults had amazing staying power. They could be on the beach all day long and then party until 3am, much to the annoyance of the kids who wanted to sleep (or wanted to be part of the action). It was extremely “Social”.

I’m at the beach this week with another family. We have been doing the beach thing together for 20 years and we do our share of social activities. We do come up for lunch everyday because we love air conditioning. Yesterday, as I was finishing my lunch (and Twittering), I looked up to see four other people at the table with me. Each was on their own computer.

Five people sitting around a table having lunch at the beach should be talking with each other, but instead, they are all in their own digital worlds. I’m more guilty that ever this year as I take the iPhone to the beach everyday to Twitter, read blogs, etc. It used to be that I went to the beach and read a good book. Now, I go to the beach and read good feeds.

That lunch table image and my own realization of being too plugged struck me as both funny and sad. We have become so accustomed (addicted) to our hyperconnectivity and our digital networks that we can’t take a vacation from them.

I think I’ll head back to the beach with the boogie board instead of the iPhone.

What is Innovation?

3is_innovation.jpgLast week, Jon Burg asked a simple question on his blog Future Visions. The question was

“What does innovation truly mean?”

I’m sure all of you can come up with a definition, but if you are like me, it might require a little thought. For most of us, Innovation is not an everyday concept that we can immediately describe with a consistent Webster’s definition (Frankly, I think the Webster’s definition misses the mark). For me, Innovation falls more in the “I know it when I see it” category, but after a little consideration, I was able to come up with my definition.

So did lots of people who weighed in with their definitions. Some thoughtfully, some humorously, but all adding a voice to the discussion resulting in a better understanding of the idea. Jon posted a summary of the discussion here. It’s well worth the read.

I commented on Jon’s follow-up post that people often believe they all understand a concept or idea similarly, but when you ask each to describe it, you see a beautiful diversity in their interpretations. That diversity gives depth and clarity to the idea.

We Interrupt this Blog….

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We had a major storm come through last week and a lightning strike in the backyard wiped out the cable and the router (among other things), so this is the first time I’ve been on-line since then. Today, we started a two week vacation on the increasingly crowded Outer Banks of North Carolina. Hope to be able to play catch-up on the blog posts and also share some of the vacation happenings. More to come, but first, a cold beer and a walk on the beach is on order.

The Social Entrepreneur

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As part of my ongoing job search (BTW, are you hiring?), I met Michael Pirron this afternoon. Michael has a distinguished educational and professional background with a focus in Information Technology and has worked around the world in various consulting roles. Last year, Michael created a new company called Impact Makers, which to my knowledge and his, has a very unique business model. I also think it may be disruptive (more on that later).

As Michael explained to me, there are generally two types of social enterprise in the US today:

  1. A nonprofit who generates their own revenue stream by operating for-profit businesses to support their service delivery to the community. The problem with this model is that most nonprofits lack the capacity and the experience to run a competitive business venture.
  2. A for-profit business that gives a small percentage of their profits to fund nonprofits (i.e. Ethos Water or Newman’s Own brand). The problem with this model is that the shareholders can, at any time, decide to stop the program or sell the company.

Impact Makers has introduced a new model where a partnership is formed between one nonprofit entity (Impact Makers’ Management and IT Consulting Services) focusing on generating income in the for-profit marketplace, and a nonprofit partner who is delivering services to the community. Impact Makers not only donates it’s profits, but also provides consulting services to the partner, allowing it to focus with greater effectiveness and efficiency on its core competency – delivering community services.

Is this model disruptive? I think so for two reasons:

  1. In today’s marketplace, companies are increasingly concerned with the other bottom lines – environmental and social responsibility. Major companies frequently use vendors to provide services like IT consulting. A company that chooses to use a vendor like Impact Makers gets top talent at competitive rates, but instead of generating profits for the vendor, they are directly funding a community service provider and that gives a vendor like Impact Makers a competitive advantage.
  2. Individuals working outside of non-profit systems do not have many opportunities to make a substantial difference in their community. They might volunteer occasionally or donate money to charities, but unless you are Bill Gates, you probably don’t have the resources to contribute on the scale of funding a program. Under this model, employees receive competitive salaries while their profit generated from their work directly contributes to improving the community.

This second point, the ability for individuals to have a bigger social responsibility impact, struck me as being analogous to what has happened in a number of other other industries where power has shifted to individuals, thereby giving them a voice and disrupting the status quo.

Impact Makers does not have capital lying around with which to build their business. Instead, Michael is relying on networks and contacts to get contracts. Impact Makers currently has one service delivery partner, a local organization called Safe Harbor which provides confidential shelters for abused women and children. Over time, Michael would like to see other professional service industries adopt his model, should it prove successful. There really isn’t a limit to the types of businesses that could adopt this model. I don’t normally use this blog to promote a business, but I was so impressed with Michael’s model that I wanted to share it. I don’t have a huge number of regular readers, but when you consider the reach of the people I do have conversations with, both here and on Twitter, the reach can be pretty big.

What do you think about this idea? If you like it and have a blog, consider telling your readers about it. Do you have clients who need Management or IT services? Tell them about Impact Makers. If you want to learn more about it, contact Michael ((804) 212-5056 or mpirron@impactmakers.org ), and tell him I sent you.

Four Foundational Innovation Lessons From Apple

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Just saying you are focusing on innovation and spending a big chunk of change on “being innovative” does not automatically lead to innovation success. Lots of CEOs have jumped on the innovation bandwagon in the last few years declaring, like Ford Motor Copmany, that Innovation is their new mission. Most of those companies, like Ford, have not seen their business improve as a result and some have started to curtail their investment in innovation. The problem, as I see it, is that these CEOs have latched on to the idea of innovation as some sort of magic bullet. With lots of fanfare they tell the organization to “start innovating” and then get frustrated when the billion dollar winning ideas don’t materialize fast enough. Soon, innovation in the organization goes the way of previous magic bullets like Six Sigma or TQM.

Still, there are companies like Toyota and Apple who have seen great success as a result of their innovative ideas. What makes them different? For these companies, innovation is not a program layered onto the existing organizational framework. It’s not just a marketing pitch. It’s not a subset of your top talent sequestered in a room for a couple of days a week to come up with the next big idea. It’s just part of their chemistry. It’s ingrained in their culture.

This past June, The Economist ran a story on innovation at Apple and highlighted four lessons that other companies can learn from the “master of innovation”.

  1. Innovation can come from without as well as within: Not all innovation has to be manufactured from scratch. Apple didn’t invent the MP3 player or the mobile phone, they just redesigned them. Oftentimes it is stitching ideas together to make a more seamless experience that is more important.
  2. Designing new products around the needs of the user: The Swiss Arm Knife may have been a great innovation, but don’t believe that a product will sell itself if you can force enough features into it. Focus instead on fewer features that are developed around the needs of the users and executed in an intuitive way. In other words, make you product more “experiential”.
  3. Sometimes ignore what the market says it wants today: While it’s important to listen to your customers, don’t limit yourself to what they are asking for. Nintendo proved this to be true last year with the introduction of the Wii with its motion-sensitive controller. The market had been saying more realistic graphics, HD output, etc. Nintendo went for a better experience through the human interface and disrupted the competition in the process. Consumers did not ask for the MP3 player, the microwave oven or any number of other innovative products that we can’t live without today but, relating back to lesson #2, we did have needs and companies that had a keen understanding of those needs and the ability to leverage new, disrupting technologies, were able to translate those needs into innovative products.NextUp › Edit — WordPress
  4. Fail wisely: Don’t stigmatize failure. Failure leads to learning and should be tolerated, even encouraged where risks can be minimized. The article points out that before the Macintosh, Apple had the Lisa failure and that the iPhone was born out of the music phone that Apple produced in conjunction with Motorola.  While my former employer’s innovation program had it’s flaws, this was one component that was understood and embraced. “Fail Early and Fail Often” was the mantra. The idea was to be constantly looking for and testing many innovative ideas, knowing that most of them will not make it past the first business acumen checkpoint. That’s ok. It’s better to kill of the ideas that are not going to fly and learn from that failure as you move on to the next idea.

Will these basic concepts make you a successful innovator? Not necessarily, but I think they are foundational. What other innovation lessons do you believe are foundational?

(image courtesy of Getty Images)

What’s Wrong With Virtual World Marketing

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There has been lots of discussion lately, in both blogs and mainstream media, regarding the slowing growth of Second Life and the money corporations are wasting there. Having spent the last six months at my previous employer leading the effort to develop a significant SL presence, those stories peaked my interest. The adult-oriented Second Life has grown significantly over the last year, primarily because of all the media attention given to brands entering that virtual world. For the most part, brands who have invested in Second Life have not seen any return on their investment and some, like Starwood’s Aloft Hotel and American Apparel, have pull up stakes and left. In fact, most brand islands in Second Life are ghost towns. Why is that? I think that most of the companies that have built in Second Life have done so without really knowing why and the approach they typically use comes from their traditional marketing experience.

The Wrong Reasons

The rush started about a year ago following reports in business magazines about the economy of Second Life and the money some people were reportedly making. Companies started rushing in, not wanting to be late to the party. Some, like Starwood, saw the opportunity to use Second Life as an innovation platform, but others were there thinking this would be a great marketing or even sales channel without really understanding what they were dealing with. The common thread here is that their reasons for being in Second Life have been heavily focused on them and not the Second Life community.

The Wrong Approach

In most cases, companies have approached building a Second Life presence with a traditional marketing mindset. Because it’s a 3D world, the typical approach has been to build a virtual “physical” destination; a store or building where consumers can interact with your brand. But unlike the real world where the best locations are those with high traffic, companies have chosen to build on isolated private islands, safely away from “populated” areas. This allows the companies to totally control the experience and minimize risks from neighbors who may not be complimentary to their brand. The analog to this is the traditional website, which is effectively a island, isolated from other websites on the internet. Since most companies have entered Second Life without understanding its social nature, this approach is understandable, but flawed.

To get people to visit your island, you have to provide incentives like freebies and events. That’s like advertising in the real world, but it’s relatively ineffective in Second Life considering the relatively low traffic stats compared with a real world website. This approach is also hard to sustain and when the initial buzz dies off, so does your traffic and consequently, support for continuing the incentives.

The third and probably most significant flaw in the typical approach is failing to understand the community you are trying to engage with. Virtual Worlds are very different from websites and physical presences in that they are, by nature, platforms for social networks. In Second Life, its all about adding value to the community. Companies generally have not gone the extra mile to:

  1. Determine if there is a community within Second Life that they can/should connect with and..
  2. Design a differentiated and sustainable experience experience that adds value for that target community.

While much of the recent coverage of Second Life has been negative, there have also been articles and posts that argue, as I do, that the failure of companies to get the return they were expecting from Second Life lies squarely with the companies themselves. You should check out HBR / Paul Hemp’s take on the debate as well as Marshall Sponder’s great post responding to the Wired story. (Thanks to Greg Verdino for the links)

It should be pointed out that there are organizations, like Pontiac, who have taken a different approach in Second Life and have clearly had different outcomes. It should also be pointed out that Second Life is not the only game in town. Some of the PG-13 rated virtual worlds have taken a much different approach to marketing as part of their overall framework. Unlike Second Life, which imposes minimal restrictions regarding what can be built there, the more youth-oriented worlds have been fairly restrictive and exert significant control over the content that is allowed. Although much more controlled, worlds like MTV, There & Doppleganger, have built compelling social experiences first and then have layered branded items into the experience. These virtual worlds are generally smaller and more focused around an idea or theme. If There.com is a “world”, the Second Life is a galaxy containing many worlds. I think this size and focus difference is important in that it makes it easier to embed marketing messages “globally” within the virtual world.

Coke vs Pepsi

In Second Life, you can go to Coke’s Virtual Thirst and get some freebies, but it’s generally empty. Brand engagement with Coke in Second Life is virtually non existent (pun intended). Pepsi, on the other hand has taken a very different approach to virtual world marketing. Given their orientation toward a younger generation, they partnered with MTV to develop a brand presence in the worlds of Virtual MTVs. At the Virtual Worlds ’07 conference this past spring, Matt Bostwick, senior vice president for franchise development at MTV Networks’ Music Group discussed this in detail. Avatars in these worlds don’t have to go to an island to interact with Pepsi. Instead, Pepsi has embedded themselves throughout the virtual world with Pepsi vending machines, branded clothing, and contests where you can win “rare” branded items. This embedded approach feels more natural. Conversely, a Pepsi Island that I visit to learn about Pepsi in return for a trinket or a dance party seems interruptive, like a TV ad.

What’s your take? What organizations are getting it right in Virtual Worlds and how are they doing it?

Marketing to Youth in Social/Virtual Worlds

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As I sit here in my kitchen looking for a job, my daughter Tyler and her friend have the big HP notebook fired up and pointed at Disney’s Virtual Magic Kingdom. Tyler, who just entered her teen years, has been playing around in virtual worlds for a few years now. She has as many friends in these communities as she does in real life and she is not alone. Millions of younger kids are spending significant time in virtual worlds like Disney’s Toontown, VMK, Club Penguin, Webkinz and Whyville. The market for “safe” teen social sites and virtual worlds continues to grow as well with MTVs virtual worlds, There.com, Doppelganger and others.

According to a recent study, 71 percent of tweens and teens between the ages of 9 and 17 visit social/virtual world sites weekly. There isn’t a clear tally of the virtual world population, but the number of registered users for kids and teen worlds is growing. From the study:

Urban teen environment Doppelganger has nearly 150,000 registered members, while PG-13 site There.com has 1 million members, 70 percent of whom are between the ages of 13 and 26. Self-described “edutainment” site for tweens, Whyville, has 2.3 million users.

As has been pointed out in numerous studies, many kids are watching less television, preferring instead to spend time on the internet. In the last week alone, my daugher has watched maybe 6 hours of TV, but has spent three times that much time on YouTube, VMK and other social sites. I’m beginning to think the computer is somehow physically attached to her as she takes it everwhere.

Enter the Marketers

Over at ClickZ, Matthew Nelson published a good article last month which discusses the the marketing landscape in youth oriented virtual worlds. He points out that in the PG-13 worlds, marketers are quite active in promoting specific items that appeal to todays teens (clothing, music, electronics). The challenge here is to find ways to engage them. As Nelson points out, this audience has been the target of sophisticated campaigns since they were babies. They recognize when they are being marketed to and will simply ingnore the message if it doesn’t add value to them.

To appeal to teens, advertisers and virtual worlds often team-up around themes that are clear fits, such as music, entertainment, clothing and electronics, but marketers need to engage their audience to keep them coming back. Recently, There.com signed an agreement with Capitol Music Group to bring music artists into its world, and created a series of virtual nightclubs for them to play in. More than that, users will be able to watch videos and interact with band members.

“The artists are realizing they need to be more involved with their market,” said Michael Wilson, CEO of There. “And this is a more efficient way to meet a fan, to change the engagement with them from a few moments to minutes.”

Nelson points out that there has been conscious decision among the young kid oriented sites to disallow all in-world advertising, but that’s not to say that the sites themselves aren’t powerful marketing vehicles for the brands that own them. The point of sites like Nicktropolis, Toontown & VMK is to get kids to interact and engage with the brand. Spend any time in VMK and you will see all kinds of in-world ad for Disney properties.

Youth Are Receptive to Marketers IF….

A recent study conducted by Grunwald Associates found that kids (9 to 17-year olds) are not only spending significant time in social sites, but are willing to engage with advertisers in those spaces is they are approached in the right way (i.e. must be relevant and perceived as adding value).

Disney obviously understands the attraction of social/virtual worlds to their target consumer (kids) and are aggressively moving to expand their presence. They are planning new virtual worlds around specific properties like Pirates of the Carribean and just this week bought Club Penguin. By simply renaming it “Disney’s Club Penguin” club penguin fans become Disney fans. Others brands, such as Capital Music Group, are partnering with virtual worlds to build persistent experiences for their consumers to interact with. If you market products to youth, social/virtual worlds are clearly channels that you need be exploring. These are two examples of what I think are successful approaches to marketing in social/virtual worlds.

Do you have some examples to share (good or bad)? What are the big pitfalls of marketing to youth through these channels.

Discuss……

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