Jony Ive, Harold Ramis, copycats, and creative wisdom

I recently read that Apple’s lead designer, Jony Ive, was quoted about his disdain for copycats, calling them lazy, and their actions, theft. Elsewhere, I read of plans to remake Harold Ramis’ classic 1984 comedy Ghostbusters.

This got me to thinking that even as the products, services, and ideas we produce are later copied by weaker minds and less innovative companies, the original remains. The original contributes something that copies can never match; that is, the creative viewpoint of the originator.

Jony Ive’s creative contributions are widely recognized, and many of us benefit from his product design - and in fact will soon be reminded of these contributions every time we glance at out forthcoming AppleWatch. And when the writer and director of Ghostbusters, Harold Ramis, died earlier this year, he left behind not only an impressive body of creative work (including Animal House, Caddyshack, and Groundhog Day) but like Ive, also many wise, quotable insights about the creative process. The quotes from Ive and Ramis below are just a few that are applicable not only to creative professionals, but to those in nearly every line of work. Here are just a few nuggets of wisdom that Ive and Ramis have shared:

• "A psychologist said to me, there are only two important questions you have to ask yourself. 'What do you really feel?' And, 'what do you really want?' If you can answer those two, you probably can leave your neuroses behind you." (Ramis)
• "I think if you do something and it turns out pretty good, then you should go do something else wonderful, not dwell on it for too long. Just figure out what's next." (Ive)
• "My characters aren't losers. They're rebels. They win by their refusal to play by everyone else's rules." (Ramis)
• "‘Different' and 'new' is relatively easy. Doing something that's genuinely ‘better’ is very hard." (Ive)
• "The cutting room is where you discover the optimal length of the movie." (Ramis)
• "True simplicity is, well, you just keep on going and going until you get to the point where you go, 'Yeah, well, of course.' Where there's no rational alternative." (Ive)
• "First and foremost, you have to make the movie for yourself. And that's not to say, to hell with everyone else, but what else have you got to go on but your own taste and judgment?" (Ramis)
• "What I love about the creative process, and this may sound naive, but it is this idea that one day there is no idea, and no solution, but the next day there is an idea. I find that incredibly exciting and conceptually actually remarkable." (Ive)
• "Nothing reinforces a professional relationship more than enjoying success with someone." (Ramis)

The adage that imitation is the highest form of flattery is of little comfort when faced with copy cats, second rate knock-offs, and credit-stealers. Still, while it is nearly impossible to try to stop others’ imitations of your unique ideas, perhaps that is not what is important. Your contribution should be more than the sum of the patents, productivity, and profits you delivered.  It is perhaps more helpful to remember that the true innovator has not only have contributed great ideas to the world, but like Ramis, Ive, and many others before them, have contributed the wisdom that only their unique perspective can create. 

Can you answer this question? Your customers can.

At a casual business gathering this week, I overheard the CEO of a Fortune 1000 company being asked what his company did. He appeared to intentionally bite a cracker just at that moment, to buy time and think about his response. “Well, it’s complicated,” he finally replied.

This smart, educated Chief Executive Officer was elbow deep in company operations yet hadn’t an (uncomplicated) response to that 'simple' question - not because he was oblivious, of course, but because he had spent the last several years buried in finance, production runs, board meetings and other demands. Demands that took him farther and farther away from his customer, farther and farther from a good response. So when he was asked “What does your company do?”, he could only respond to the question by explaining details about the company’s software.

The ability to describe your product is a start, but it’s an answer to an altogether different question, that is, “How do you do it?”.

Perhaps counter-intuitively, the question “What do you do?”, whether asked about you or your company, isn’t actually about what you do, it’s about the value you offer. “What does your company do?” is a question that summarizes several others, such as, “Who do you sell to?” “Why do customers buy from you?” and “What’s next?"

“What do you do? …to provide value to your customers?” It's not a question that only the CEO needs to know. Everyone in the company from the receptionist to the CEO should be able to articulate the company's value, because it should be the motivating factor for going to work every day. If you’ve spent the last several years being pulled farther and farther away from your customers, it is possible that you yourself may find this question harder and harder to answer.

But your customers know. It might be time to ask them.

How the CFO can become the CMO's best friend.

My dog doesn't fetch. It’s a retriever that doesn't retrieve. In many ways our trips to the dog park resemble a CMO submitting a budget proposal to his CFO. That budget, like my dog’s ball, isn’t coming back, or if it does, it’s late and torn apart.  

Not fetching is not my dog’s fault. It’s mine, for not properly teaching the dog that returning the ball will result in greater reward, getting thrown many more times. Similarly, as marketers, it is our fault for not instructing the CFO on how our marketing proposal will provide returns for the company.

Like dogs and their owners, finance and marketing need to learn how to communicate. As marketers, we cannot expect the CFO to understand what we are trying to accomplish if we do not use terms that finance can understand from their perspective. Using terms like mindshare, awareness, and – ugh! – ‘marketing investment’ are anathema to finance. They are unquantifiable, unreportable, and in the case of ‘marketing investment’ mean completely different things to a finance executive than a marketing executive. (An ‘investment’ has a specific reporting requirement according to GAAP rules, it isn’t simply a synonym for ‘budget’.)

Of course, mindshare, awareness, and visibility are critical. So are a number of other objective measurements marketing uses to benchmark and improve. Cost Per Page View, Cost Per Lead, and similar measurements are useful, but only internally to the marketing team to test, adapt, and improve. And I've written before about my own concerns about Return on Marketing Investment (ROMI).

To build a better relationship with finance, marketers must do what we do best – communicate. We must work with finance to determine the most useful metrics to the CFO to help us to explain and defend our budget strategy and – this is critical – the way it will be measured. Finance measures revenue (EBITDA), growth, and costs, among other similar 'bottom line' numbers. If you cannot produce numbers to illustrate how your plan will contribute to these figures, you will lose your credibility and your budget. Use your internal measurements for tactical improvement, but then translate the results into metrics that reveal, say, Time to Payback (breakeven), Customer Acquisition Cost, and Customer Lifetime Value, among others. Agree with finance the target numbers for these metrics and ratios, and then build your plan to grow to meet them.

The CFO is naturally protective, growling often and bearing its teeth to protect the cautious spend of your company. But with a little communication, the CFO can become man’s, er, marketing’s best friend.

Building teamwork between marketing and sales

It goes without saying (at least I hope it does) that to be effective, the relationship between marketing and sales demands close cooperation. Yet even as the most critical of a company’s interactions, marketing and sales are often at each other’s backs, placing blame, demanding action, and generally acting worse toward one another than they do to the competition.

The metaphor I like to use to describe a well-functioning sales and marketing organization isn’t a Kumbaya campfire, but a relay race. In this example, marketing hands off sales tools and campaign leads, with sales taking the hand-off and running toward the finish line – the completed sale. Yet as simple as this example is, anyone familiar with track knows that the hand-off is the most difficult part of the race.

Before taking the hand-off, the runner ahead (sales) must start getting up to speed. The runner behind (marketing) therefore, needs to share plans and metrics so sales knows what to expect and can begin to prepare their customers, prospects, and accurately complete their  forecasts. Efficiencies are lost when these racers aren’t fully aware of where the other is on the track; that is, salespeople are accidentally or purposefully unaware of what marketing objectives are, when campaigns are running, and what to expect in terms of number and quality of leads.

Further, in relay races, there is only a set amount of track space allowed to make the transfer – racers must understand the distance each racer will run. In my example, if sales expects marketing to qualify leads further or marketing expects sales to follow-up on leads in a certain timeframe, the baton can be passed too soon or too late, outside the zone, resulting in missed sales opportunities.

Even when the runners are up to speed and the transfer is made, disconnects between objectives, targets, and priorities can cause our metaphorical baton to be dropped and take an organization out of the race altogether. Marketing is in charge of evaluating the market and strategizing initiatives, but always with the input of sales so common targets, messages, objectives and timing can be established. This needs to be done quarterly to not only stay aligned, but to evaluate what is and isn’t working.

Relays are the most team-intensive sport in track, and therefore are won only when every participant is not only performing at their best, but makes certain that they’ve passed and received the baton smoothly between team members. To do well, marketing and sales need to do their best individually. But to win, marketing and sales need to cooperate as a team.

5 reasons to persevere through start-up obstacles

They said it was going to be hard. But you had no idea it would be this hard. Exhaustion, a poor diet, a parade of ‘no’s and disappointments. Plus mentors and advisers, including me, listing reasons to pack it in. It isn't easy to maintain your enthusiasm and energy in the face of all that.

So when should you not shutter your start-up?

The only thing I hate to see more than good people burning cycles on lost causes is to see good people giving up too early on good ideas when in reality the opportunity was far more promising than they could see from their trendy co-located office loft.

Persevere

So when are the discouraging obstacles not an apocalyptic sign, but simply short-term hurdles, perhaps requiring just a bit more effort and diligence? Here are just a few clues that it’s time to stick it out and renew the energy and resources to continue:

1.      Required capital was initially under-estimated (this is common) but doors are still open to you for additional resources, even if from friends and family.  You may be reticent to ask again, and that's a fair concern... and indicative that you are being wise with investors' trust and money. Still, it is your responsibility to manage your enterprise wisely and to sell your vision. But never confuse your very real fiscal responsibility with imagined guilt of the risk both you and investors are taking together.

2.      You’ve not yet introduced your MVP (minimally viable product)... but it is because you’ve made a valid pivot from the original plan. If the delay from these pivots are based on honest and useful customer feedback, the delays are valid and a good reason for asking for more runway. 

3.      Your reasons for delays and obstacles are not excuses. There’s a difference between a problem you cannot control and therefore must accept and overcome, versus a crisis you created or could have changed but chose to ignore.

4.      The market gap that your product/service is intended to fill is still not being adequately filled by established competitors. As long as it will fill a genuine need in the market (presuming you’ve done that diligence) then there is still an opportunity to be exploited.

5.      You can identify all the voices telling you that you cannot do it - because they all sound remarkably like you. They are all inside your own head. Take a step back and look at yourself in the third person. Is the negativity you are hearing from yourself the same you’d tell someone in your identical position? Or would you be kinder, more encouraging while still realistic? 

Like my earlier post giving you good reasons to shut the doors, there are no hard and fast rules, and of course, any one of these are not a guarantee of a successful start-up deserving your continued effort. But just as it is unwise to continue to pursue a start-up out of obligation, it is unwise to make a permanent decision about shuttering it without taking a moment to review the real reasons for your current discouragement.

Few if any start-up situations ever meet ideal expectations. But with a deep breath and a little introspection, you might find that the reality of the situation is far from desperate. 

5 reasons to shutter your start-up.

There's no lack of enthusiastic blogs, posters, and gurus out there encouraging you to follow your dreams and strike out on your own. So I am aware that my contrarian posts can be a real downer, as I’ve written several posts that discourage potential start-ups from, well, starting up, including the fallacy of expecting a ‘better’ product to succeed, or the idea that you should chase your dreams.

But there are great ideas that deserve your attention and enthusiasm. Yet once you’ve already sunk your heart and soul and 401K into your business, when is negative thinking just ‘nattering nabobs of negativity’, and when does it become a warning that something is wrong and you need to get out? After all, the sage tells us that ‘everything is temporary given enough time’, and we all know that even expected obstacles cost more and take longer to overcome than ever often predicted.

So when is enough enough? There are a few clues that it’s time to recognize that it’s time to close the doors:

1. You, yourself, are exhausted and cannot continue to infuse your discouraged team with requisite energy to soldier on through the current circumstances.
2. Resources are spent. This seems obvious, but resources are never really ‘gone’, just harder to raise - but if you are spending more time raising funds instead of selling an MVP (minimally viable product), you are on a slippery slope.
3. You’ve made little progress in overcoming objections from potential users either in fact or positioning.
4. You’ve missed initial, and extended, deadlines and milestones.
5. The market gap that the product/service needed to have filled is beginning to be adequately filled by established competitors.

There are no hard and fast rules, and any one of these are not indicative of a start-up needing to be shuttered. But any two or more create an uphill battle that takes the joy, enthusiasm, and health and finances of founders down with it.

Unless your start-up is a cruise line, there’s no glory in going down with the ship. 

3 marketing topics to school yourself on this fall.

Labor Day marks the second start of a new year, an opportunity, as with the one in January, for a fresh start and self-improvement. As marketers, it’s a good time to take stock of what we don’t know, in order to stay on top of the latest innovations in accountability, effectiveness, and customer satisfaction.

Social media. It may seem obvious, but the proliferation of platforms, broad use of them for customer interaction, and still-experimental state of the industry can result in huge opportunities for you or colossal blunders. Study up to learn from past mistakes and to prevent your own.

Content marketing. Understanding the changes in creating intelligent dialogue with customers is a larger change in the marketing landscape in the past several years than even social media, which has merely accelerated the process. Marketing as a provider not only of information but also of unbiased value is a sea-change and must understood to be properly executed.

Mobile marketing. There are more mobile internet users online than desktop users. Understanding the needs of the mobile user goes beyond device compatibility. Get ahead of your competition because companies that do not adapt to mobile will suffer the same fate of the latecomers to the internet in the 90s.

There are many others, including marketing automation, search engine optimization (Google makes sure you are out of date almost monthly), and alignment of social and search. 

What others are you studying up on?

Teaching entrepreneurship isn't impossible.

My son starts his junior year in high school Monday. His first class? “Entrepreneurship”. Given that he’ll have me, our clients, and associates as resources, I expect him to ace the class. Yet perhaps that is an unfortunate expectation, because I’m not sure entrepreneurism can be taught.  

I also taught a college course last year on Small Business Management. I conveyed useful information as required by the curriculum, and included important speakers, videos, and motivational information for added emphasis for important topics. The students seemed to benefit, I’m pretty sure I did a good job, and I’m pretty sure my son’s high school teacher will also. Still, some students in that class will never venture off on their own, some will fail and quit, and still others will succeed. One already has.

But what part of entrepreneurism can be taught, and of that, is it truly entrepreneurism? Or is it simply management? What are the building blocks of entrepreneurship versus the innate personality required to be knocked down seven times and still get up an eighth?

Can you be taught to have a comfort with risk?

No, but you can teach risk management, and offer advice on where others have faltered

Can you teach passion?

No, but you can promote sacrifice and self-reliance.

Can you teach leadership?

Absolutely, but it grows with experience.

Can you teach commitment?

No, but you can inspire and encourage.

The rest, perhaps, is tactics and processes. This is why mentors are so important to the entrepreneur. Mentors are as much about reviewing operational plans and go-to-market strategies as they are about being an example, and a source of inspiration and encouragement.

On the whole, I don’t think you can pluck anyone off the street and make them a confident entrepreneur, ‘Trading Places’ style. But those who have a natural inclination to go against the grain and rise above the noise can learn to be entrepreneurs, even if it can’t be taught. 

Should your start-up consider a convertible debt deal?

Recently a new friend and prospective client asked me about a financing opportunity that had been presented to his bootstrapped start-up. He asked me the advisability of accepting a convertible debt offer versus straight equity financing. The answer I provided was general, as the question was general, and because I was not familiar with his company's valuations or deal specifics. I am familiar, however, through my experiences with other clients and mentees, and through teaching a small business course, with the options.

Fortunately, my friend’s question was whether or not he should even consider a convertible debt deal, not advice on whether he should actually take it. (That took the pressure off of me.) I assured him that it was in fact a common practice for a firm at their level of maturity and it was likely to be a more favorable solution for them. This wasn’t financial advice (I’m a marketing guy, after all) but I thought I’d share my reasoning more broadly.

Firstly, however, let’s define our terms.

Equity financing is financing by issuing shares of the company. While rumored to be the simpler of the two approaches, at least for mathematics challenged types such as myself, in fact the tricky part for early stage start-ups is determining the valuation of the company. There are as many approaches to this as there are founders and investors (and stages of growth), but through several formulations and more than a little guesswork, ultimately the company value is “simply” the figure investors and founders agree that it is.  Post-investment value is just the pre-investment value plus the investment. It can all contained within simple t-chart accounting.

Convertible debt is borrowing money where your intention, and that of the investor, is not to pay back the loan with interest as in a typical loan, but to convert the debt to equity in the company at a discount (typically 20%). The terms, timeframe, discount, any valuation caps, are all negotiable, and vary widely. The debt also has an option to be paid prior to maturity with an outright cash payment should circumstances change.

So which is better?

To quote my old graduate B-law professor, “it depends” (such was his answer for most hypotheticals).

A main advantage for equity financing is that it doesn’t require repayment like debt would, and is a simple calculation - assuming you can settle on an acceptable valuation. Disadvantages include the need to determine valuation (difficult for young companies) and a loss of some management control.

Convertible debt, alternatively, does not need to have a valuation upfront (it converts based on a valuation from a subsequent round of investment when presumably valuations are easier to calculate) but will need to be repaid, like debt does.  While interest will not (usually) need to be paid in cash each month, there is a limited timeframe before it needs to be repaid, or convert automatically into equity at previously agreed terms. If the latter option isn’t part of the agreement, the repayment requirement can lead to unintended fire sales forced by holders of the debt. Still, as most founders believe their start-up will be worth more at a later date, this approach will result in less dilution, by issuing debt and leaving the valuation flexible in order to meet the requirements of the company and those of later investors. I also understand that this is a faster and cheaper transaction when compared to the legal paperwork of an equity play.

In the end, I recommended he welcome a discussion of convertible debt. But I hope he (and you, dear reader), remember this fine print: I’m a marketing guy. I’ve been brief here, and your circumstances will vary from your neighbor’s start-up, and even change as your company matures. Each company and each stage of growth requires a different type of financing. Ask a professional. Whatever you decide, try to limit the dilution, retain majority voting rights, and use your brain, but leave your ego at the door.

(Finance guys who want to clarify any points in this post are asked to comment.)

The 5 Most Important Marketing Spends for a Start-up

As I work with a number of start-up companies, I am often approached by these hungry entrepreneurs (and their investors) to help execute a demand generation campaign,largely in the 'lean marketing' or 'growth hacking' mode. However, there are a number of prerequisites I demand of prospective clients at early-stage start-ups. These prerequisites are fully marketing activities, but also have cross-functional utility because it helps young companies get a sense for themselves before promoting themselves to the outside.

1. Market and competitive research

Useful to finance, sales, and product development, gaining a full understanding of the industries and individuals (personas) that are in the target market is critical. Young companies should know their customers as well if not better than they know their own product or solution. The same goes for the competition – there is always competition, even where the product, niche, or industry is brand new.

2. Positioning strategy

The world of marketing is ruled by Venn Diagrams. Understand the similarities, differences, Unique Selling Proposition, potential black holes and growth opportunities in your market. Know the desired customer behavior and how slow or rapid adoption would reshape the market and your own assumptions.

3. Go to market planning

Plan the routes to market and go to market strategy for each channel; direct sales, online, partner, etcetera. I am always surprised at the number of companies (even large ones) seeking to promote their solution before they even fully understand how they will sell and fulfill orders. Really.

4. Branding and identity

In spite of the myriad number of self-proclaimed designers and fiverr designs out on the market, leveraging the knowledge and experience of a professional designer is critical to bring the above three investments to the public. A designer that understands your market, what you are trying to achieve, the emotional bond you want to create in a customer, how colors, typefaces, and imagery interact. Great marketing is easily undermined by an identity that doesn’t reflect the marketing message.

5. Inbound/content marketing strategy

Finally, the first stage, 'growth hacking' promotional, demand generation actions begin with the foundations of the content management strategy that drives initial value and interest among your target publics. As content management takes some time to spin up, this should be initiated as early as possible, and ideally prior to product release, in order to drive demand upon release.

Once these five prerequisites are established, then, and only then, should any shorter-term aggressive promotional lead generation activity be undertaken. Excepting perhaps the days of being featured on Oprah’s Favorite Things, there are no shortcuts to effective marketing and sustainable lead generation for a start-up, or for any established company.

Leaving the nest

One of the greatest opportunities for a young start-up is to find itself in the feathered nest of a larger firm with whom they’ve partnered. Often these start-ups are services providers for enterprise software, VARs or ISVs; or offer integral technology, new applications, or differentiating product ingredients. The leads from the partner organization are plentiful and the protection strong, and this warm partner nest is an ideal place to find the needed runway and references for a start-up.  

As young start-ups mature however, they often find themselves as overshadowed as they are emboldened by the larger firms with whom they partner.

Therefore it is critical that even while enjoying the partner’s nest, these companies begin to direct their own destinies to grow broader than their current dependencies on their larger partner companies. To accomplish this, they must leverage branding to elevate themselves into an independent and more credible visibility to their industry.

Differentiating and identifying the unique value the smaller organization offers customers of the larger company’s product is the main function of branding for a young company in this type of mutually beneficial relationship. It establishes market credibility for later product extension, product introduction, and establishes a distinct market value helpful for investment, merger and acquisition.

Simply being able to walk through a branding exercise and begin to articulate the unique value provided allows a young company to strategize their growth. As the branding is then communicated out to the marketplace through content marketing, event sponsorship, public relations, or myriad other tools, this strategy begins to identify potential customer personas, inform product and investment decisions, and  that free it from the decisions and whims of their larger partner.

Strategy180 understands that in the cacophony of demands from operations, finance, engineering, and sales, longer term strategy often takes a back seat. Yet it is important that the longer term vision and goals of the organization are tended to with as much attention, or the short term fight for ideal position within a large organization’s nest may soon prevent a young start-up from ever having the option to leave it. 

Networking is a waste of time…

Yes, networking is a waste of time…

…if you can’t answer the question, “So, what do you do?”

This is a common networking question that everyone should be able to answer. Interestingly, however, few actually answer it. Like a good politician or crisis management firm, most people answer the question they wish they had been asked, the easier one to answer. Instead of answering the question “So, what do you do?”, they’ll tend to answer a different question. “So, what do you do?” becomes “What is your title?” or “What can you do?”. Answer those two questions instead and you are just wasting your time by networking.

Instead, “So, what do you do?” is best accepted as a marketing question, as if someone rang up your office and said, ‘let me speak to a salesperson’. Treat the question this way and you’ll immediately focus on the value you provide – not a laundry list of capabilities or a corporate title earned that may or may not suggest anything about what value you or your company can offer others.

And if you aren’t certain of the value you offer others, how do you expect anyone else be expected to figure it out?