Your dream is a sunk cost: Facing reality with your start-up

This article from the New York Times underscores a point I've made to unemployed friends, my college students, even in articles a few years ago for the Dallas Morning News, and I've alluded to it in this blog, here.

Treat your dream to build a business as a sunk cost.

Feel good Successories posters and legions of Twitter career coaches would have you think otherwise. They've no skin in the game. Of course they're going to tell you to 'go for it'. They aren't investing their savings, their time, their energy.

A sunk cost is a cost that is irretrievably lost. Business professors tell us to ignore them when making go-forward decisions. Any entrepreneur, hell, any gambling addict will tell you that it's hard to do. One more sale, one more roll of the dice, and it's all alright again. But it's not real. Your dream is a sunk cost. No getting it back - that is, it's there, it's been imagined, it exists. No turning back on having the idea. The 'one day'. It's a yearning, and therefore a drain on your energy, but not yet your wallet, or your family. Turn your back on it. Because everything that follows is not, not yet anyway, a sunk cost.

Now, hopefully this allows you a bit more objectivity. Every additional moment you put toward this dream is a sunk cost. An opportunity cost. At some point you invest in research and site location reports, engineering drawings or trips to see investors or check out competitors. Sunk costs of time, energy, initial but modest expense. But you still have money in the bank and a steady job.

The dream, the drawings, the unsigned lease agreement, a logo, and business cards. Sunk costs.


Now the question is, IGNORING your sunk costs, ignoring the biggest sunk cost, that is, IGNORING the fact that this design/store/studio/idea is 'your dream', are you ready to move forward?

Really?

Because if you are really ignoring the 'sunk cost' of this emotionally compelling dream of telling your boss to f- off and instead go it alone, then you need to be able to tell yourself this: That you are sufficiently distanced from this dream such that even if this was someone else's dream, you'd still invest this level of energy and money into it.

Because in the end, dreams aren't real. Sunk costs, on the other hand, are real. And bankruptcy, particularly self-inflicted bankruptcy, is a nightmare.

Okay, still? Great. Dream's over. Wake up and get to work.

Squirrels first. Golfers second.

I live on a golf course and more than occasionally golfers either walking, searching for a ball, or in golf carts driving near the wrought iron fence toward their lay get too close for my black lab and he'll bark incessantly with a menacing tone until they move on (I try to keep him quiet during the backswing).  He doesn't understand that the entire golf course - even just the fifth green - is not his to protect.

No, his focus should be on his own backyard. A modest yard, two mature live oaks, a flower garden, shrubbery, patio, arbor. Not acres of well manicured greens running the length of the neighborhood.

But I, myself, too often try to 'boil the ocean' when all I can really control is my own pot. In truth, that's all we ever can do. But if we do a good enough job at that, collectively, the ocean - world peace, world hunger, the environment, the industry, the company - will come along in time.

Seeking to solve the bigger issues is noble. These issues may be they charitable, or simply problems at work beyond your authority (not ability) to change. Ultimately they are past our own ' fence'. In reality, our real responsibilities lie within our sphere of influence, in our own backyard. While we need to keep our eyes on the ultimate, broader objectives (in my Lab's case, ridding the world of golfers) it is because results matter that for our objectives, our sanity, our accomplishments, we focus first on what we can impact most directly in our own sphere of influence, that is, within our own backyards.

Proving that social media is not a slam dunk.

Here's a broad, but direct and succinct analysis about the role and effectiveness of social media... as a tool, clearly not a solution in itself. Numbers tell the story on Oreo's real-time response to the Super Bowl blackout - what I still see as perhaps the best use of social media (creatively and contextually) since we as marketers started talking about it. But as good as it was, it wasn't a slam dunk. Read more here.

Three rules for managing third party resources

Harvard Business Review publishes an interesting article here on how smaller companies can hire third party services to get the same data insight (as in the case featured) or resources as bigger competitors. Managing these resources is a separate issue altogether, but there are best practices for getting the most out of, well, companies like mine. Essentially this involves three key areas: Shared objectives, regular benchmarking, and communication.

Tomorrow's lawsuits start here

I've written for years about the failure of the biggest companies failing in the most fundamental ways, like here, here, and here. 

And now there's this. East Carolina University Suing Cisco Systems Over Slogan ‘Tomorrow Starts Here'.

Simple due diligence. C'mon people. If you're gonna steal, don't steal from a client. And if you steal from a client, at least make sure it's a good slogan. This doesn't even pass the 'bakery and bedpans' test.

When Harry met silly

So tomorrow I start teaching my college class and curriculum be damned, I’m going to do my best to once again speak to the class of teens and twenty-somethings about personal brand, privacy, and the impact on their future selves. 

I posted once or twice before on this topic, notably years ago when Michael Phelps was photographed taking a hit off a bong, and my essential points are the same: nothing is private. That is true of royals and celebrities, and it’s true of little ol’ you, too. The difference is whether we have the coverage thrust upon us (Harry, Michael) or we go looking for it (future employers, clients). 

I don’t think the point is lost on Gen Y and Millennials (after all, Harry was quoted in Vegas, in a prediction worthy of Nostradamus,  that he had to be careful or else he’d be ‘up on Twitter or Facebook or YouTube thanks to somebody’s mobile phone camera’ ) but the understanding of privacy and long-term impact of their actions is lost on young people. Even on young men like Harry - steeped in tradition, highly scrutinized, with a closely guarded upbringing. In fact, it should be noted that unlike the US, and in spite of its tabloid history, the UK has laws meant to keep certain scandals out of the papers. The Royal Family argued that if UK papers were to publish photos of Harry’s Vegas game of strip billiards (which he apparently lost) it would violate UK press and privacy laws. Of course, the UK’s Sun argued that the photos are already in the public domain, and that publishing them is therefore not a privacy violation. It’s an antiquated notion... it's just not possible to take back a digital photo or badly worded tweet. As former democratic representative Anthony Weiner certainly understands, once it’s out there, it’s done. That’s the benefit and the curse of communication technology today. 

So let me suggest to those who find temptation…, well, too tempting. Be aware that every decision you have made has led you to this moment. Every decision you make from here on out will determine the course of the rest of your life. That has always been true, but in today’s digital age, there is no longer an opportunity for a do-over. Every decision you make is one-and-done. 

Here are three things to understand to help evade the seemingly inevitable:

1. You do not need to be on camera to legitimize yourself.  Learn to understand the importance of private moments, private thoughts, private actions, and private lives. Work hard to keep them that way. There is power in having and keeping secrets.  

2. You must choose your friends wisely. You may only have only had a single beer at that party, but there you are in the photo, standing next to the naked dude being held upside down on the keg. I’m not suggesting you can’t let loose and have fun, but you need to understand that the concept of ‘guilt by association’ is valid, like it or not. 

3. Remember what Ben Franklin said. No, not “early to bed…,” although that’s a good one. I’m thinking of “Three people can keep a secret only if two are dead.” 

Finally, remember this, which ties in particularly well with pictures of Prince Harry’s ginger crown jewels: Privacy is like virginity: It’s the most valuable thing you possess, and once it’s gone, it’s never coming back.

Related articles

• How Facebook design tricks people into trading away privacy
• How U.K. Tabloids Are Getting Around Prince Harry's Nudity Warning
• California To Tackle Privacy Crimes With New DOJ Unit

When a tree falls: The one skill every marketer needs

A fallen tree in a field. (Photo credit: Wikipedia)

I’ve mentored students and spoken at many industry luncheons and as a result I am asked more than occasionally what the skills are for a successful marketer. Not a run-of-the-mill, forms-filling automaton, but a ‘real’ marketer, one that is insightful, creative, innovative, and focused on results.

 
The good news is that it’s really simple, but the bad news is, it can’t be taught. What separates outstanding marketing professionals from the merely satisfactory is the ability to actively listen.

And right now, reading this, you’re wearing the same expression I get when I say it to others face-to-face.

“Yeah, yeah, I get that,” they’ll say. “But what else?”

“Nothing, that’s it,” I’ll reply.

“But they need to be able to write, right? Or design? Or understand statistics? Or ‘know’ social media?”

Silence.

“Okay, so you’re all about results, right? So they need a finance background?”

Well, maybe, but that will define what kind of marketer they’ll be. What field, what industry, what specialty. But listening is what will make the difference whether they are good at the process of marketing or good at intuitively understanding audiences and the messages required to reach them. And that’s what really matters.

Especially in an age where marketing is about relationships above all else, good marketing increasingly resembles any decent relationship. And we all know (directly or indirectly!) that relationship counselors will remind us that all relationship issues eventually boil down to listening to what the other is saying.

In business, communication used to mean managing what we say as companies. What, how and when we express our brand, our values, and our products’ benefits. But if anything at all has changed in the past couple of decades, it is that communication has a great deal more to do with listening than talking.

It starts before the first pen is put to paper planning a first product, and doesn’t stop even after the product is launched to an eager marketplace. It’s a cycle of listening and iteration. Listening so closely that you can hear what isn’t even being said so you can build a product and create a story that users didn’t expect but that absolutely captivates them. And that’s when they’ll start talking... and their friends and peers will be listening.

So if a tree falls in the forest and there’s no one there to hear it… what does it matter anyway?

Related articles

• How Pharma is Learning to "Listen" Online
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Fast and cheap and unsuccessful

New entrepreneurs. Committed to a diet of macaroni, peanut butter and cases of Mountain Dew for late night 'ideation' sessions. They tell me they're going to be better... because they're faster and cheaper. 

Copying what has been done before in a way that is faster or cheaper is a formula for long-term failure.

Faster and cheaper is not better. Better is better.  

Instead, the success formula is a disruption - a new way to look at things, a new way to define your market. Faster and cheaper is a natural order of established markets, so start-ups dedicated to this proposition will be overrun. Even if you go 'all-in', spend all the angel's money, live a life of sleep-deprived sacrifice to build the mousetrap, there is no guarantee of success if all you are chasing is a faster or cheaper way to do an old thing. Faster and cheaper are only useful long-term when they are outgrowths of the new and differentiated.

If all your new idea offers is a faster or cheaper way to do an old thing, think again.  

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A Living Death

George A. Romero was an early contributor to the genre with his 1968 film, Night of the Living Dead. (Photo credit: Wikipedia)

No, this post isn't about the Zombie Apocalypse, although that'd get a lot of page views. Its about yet another pundit suggesting something is dead. That too gets page views. Death, vampires, and celebrities. Dead celebrity vampires are especially good for page views. But I digress.

No, this post is about a recent speech to the IoD given by Saatchi and Saatchi CEO Kevin Roberts who boisterously proclaimed (as ad people are fond of doing) the following things as dead:

Marketing.
Value Statements.
Strategy.
The 'Big Idea'.

Suddenly I'm not feeling too good myself.

In fact, these things are not dead, they are merely changing. I'd use a caterpillar/butterfly analogy here but I fear metaphors may be dead too.

Marketing used to be about positioning, segmentation, and anticipating customer needs. Roberts says that approach is dead because change is too rapid today. Essentially, he says, think too long about it and 'poof!' its different and you're on the wrong track.

That's not death, that's just an acknowledgement of the importance of agility. Marketing requires greater agility than ever before. It means marketers have to listen more than ever before.

Value statements are dead and dreams are in. Dreams are in all right, dreams in the form of stories that register with customers. That's not death, that's an ability to convey moods, emotions, and to create relevance for your brand among customers. Tell a story, don't recite a fact... build a relationship, not a transaction.

Strategy involves too much consideration in a hyper world. Take an action, any action. Strategy is death. Still, if you don't have a destination in mind, to paraphrase the Cheshire Cat, any road will get you there. Strategy isn't dead. Analysis paralysis is dead.

Big ideas are dead, small ideas are where the excitement is. A series of ideas appealing to segments to build relationships that taken together add up to that one... big... idea. Dead? No. Chopped into little pieces to create something new? Very much alive.

Marketing isn't dead. It's just that the margins for error are slimmer. So the decisions we make now as marketers just appear more, well, life or death. 

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Halftime in America

Arguably (because there’s always an argument about it, as VW pointed out in their actual ad), the best ad of the Superbowl was the Clint Eastwood “Halftime in America” narrative for Chrysler, an ode to Detroit. It was very “Morning in America” Reagan-esque and very stirring. At least for some. I was actually more moved by a similar effort by Chrysler last year using a Chrysler 300 and an Eminem soundtrack.

This one, alternatively, annoyed me. It wasn’t the moody imagery, the obvious attempt at emotional manipulation, or the subtle insertion of exclusively Chrysler products to represent a revival of Detroit (it was their ad, after all). It was the choice of Clint Eastwood as spokes-icon.

Because weeks earlier, Clint had stated that GM and Chrysler should not have been bailed out. It is a position I agree with, incidentally, although likely for different reasons than Clint. But regardless of my politics, there was Clint, inspiring the citizenry with an inspiring, Dirty Harry voiced call to arms that dared me to disagree with him = that it was, in fact, halftime and an opportunity for America to renew itself in the ‘second half’. A second half that should never have occurred, per Clint.

This is not to say that I think it was a bad ad. Just... untrustworthy and lacking credibilty to anyone familiar with Eastwood's politics. Its an important message. A stirring message. It was also a bit of a whitewash given Clint’s values, something more akin to a political ad overlooking the candidate’s shortcomings. And it should be noted that at the half, the 'Patriots' already had the lead, came out in the second half and padded that lead, and then ultimately lost.

Indeed, its halftime, America.

UPDATE: Insincerity breeds contempt,and parody. I'm not alone in this, I guess. http://www.youtube.com/watch?v=j_8qCbHsUA

99% of readers think this is an awesome post.

Years ago as a graduate student at TCU, we were taught in Statistics class to poke holes in the methodology and analysis of reporting on statistics. It was treated as a sort of debate based on metrics and not opinion; their use, misuse, and abuse. We were taught to look carefully at sources, graphical representation, equivalent measurements, causality, sample size, and so forth. Ever since then, I've been quick to criticize statistics like a middle-school English teacher picks out typos.

As marketers, we are among the first to abuse statistics in our favor, and even as consumers have more information at their finger tips, so too do they have mis-information. Even today, buyer beware is the watchword.

Yet as we enter a political season, the stakes are even higher and we must think and vote with care. This recent article in The Atlantic illustrates some more egregious info-graphic lies used to increase interest and click through rates to study sponsors, and advertisers.

We are a graphical, headline-loving, sound-bite oriented culture. Yet it takes only, on average, 12% more time to learn the truth behind the hyperbole.

Okay. I just made that up.

Jesus as pitchbaby?

In a recent story on MSNBC, I learned that the American Family Association has apparently declared progress against what they referred to as American retailers' "War on Christmas" - where retailers tend to celebrate 'holidays' and not 'Christmas'.

For what it's worth, I'm fine with 'Happy Holidays' being used by retailers. As a former ad executive, I could stomach Joseph (a carpenter by trade) shilling for Craftsman Tools, but I cannot trust my former advertising colleagues not to trade Baby Jesus' swaddling clothes for a Snuggie - size small. I find that prospect more than a little disquieting.

The AFA should be careful what they wish for.