In reading this profile of the artist Rachel Harrison in the 12/22/14 issue of The New Yorker I found many traits that are common among successful entrepreneurs; particularly her focus and mindset. It also reflects the travails she endured and hard work she put in that is similar to the entrepreneur’s path to success; an overnight sensation many years in the making. And, yes, she is my sister.
Facebook Jumps The Shark And Are We Smart Enough To Notice or Care?
This is a brilliant piece by Danny Flamberg. By changing its pricing model so that it is, in effect, paid media, Facebook has exposed all of its flaws in terms of its effectiveness as a marketing channel and thus becomes a less attractive alternative; one that will drive smart marketers away.
This new Facebook policy should be the impetus for marketers to get back to basics and stop being mindless lemmings jumping on the latest fad even when the numbers prove that the latest fad does not come close to delivering improved results for the only metrics that really matter – increased sales and increased profits. Yes, increased customer engagement is a good thing, too, but Facebook doesn’t do that either. As Mr. Flamberg states, Facebook users are passive when it comes to sponsored posts. And “likes” don’t translate into sales.
And by getting back to basics, this is what Mr. Flamberg means:
Focus on Business Goals.
Plot Facebook in an Ecosystem.
Pre-Think the Conversation.
Pick Your Shots.
Make Videos.
Demand Data Sharing.
It ain’t sexy, it ain’t flashy, but it works. With more marketing options out there than ever before, understanding your customer and your offerings are critical when choosing where, how and when you tell your story to the world.
What Uber Really Fears
Isabel Roughol posted a very interesting piece on LinkedIn today about how Uber’s Privacy scandal is a symptom of Uber’s culture. She paints a cautionary portrait of a company that is endangering its future with its wanton disregard towards privacy and threatening its enemies, even if these “enemies” are journalists doing what real journalists are supposed to do.
Your move, Uber.
Big Data – Useless If You Don’t Know What You Are Doing
In a wide-ranging interview posted last week on IEEE-Spectrum, “Machine Learning Maestro” Michael Jordan discussed the current state of Big Data; its strengths, its shortcomings and the ways it can be misused. Here are a few excerpted quotes which highlight the key issues, in my mind, that people must be aware of when they use Big Data.
“When you have large amounts of data, your appetite for hypotheses tends to get even larger. And if it’s growing faster than the statistical strength of the data, then many of your inferences are likely to be false.”
“I think data analysis can deliver inferences at certain levels of quality. But we have to be clear about what levels of quality. We have to have error bars around all our predictions. That is something that’s missing in much of the current machine learning literature.”
“It’s not a year or two. It will take decades to get right. We are still learning how to do big data well.”
“Spectrum: What adverse consequences might await the big-data field if we remain on the trajectory you’re describing?
Michael Jordan: The main one will be a “big-data winter.” After a bubble, when people invested and a lot of companies overpromised without providing serious analysis, it will bust. And soon, in a two- to five-year span, people will say, “The whole big-data thing came and went. It died. It was wrong.” I am predicting that. It’s what happens in these cycles when there is too much hype, i.e., assertions not based on an understanding of what the real problems are or on an understanding that solving the problems will take decades, that we will make steady progress but that we haven’t had a major leap in technical progress.”
Okay, so here’s the deal for marketers:
- Using Big Data successfully to identify customers and prospects is totally dependent on
- the strength and reliability of your data; and
- your ability to ask the right questions
- At this point, Big Data is another thing in your marketing tool box. It’s still in its infancy.
- Implementation still rules. Big Data is useless unless you create, execute and deliver marketing campaigns that resonate with customers and prospects, driving them to buy your products and services.
Sticking With What You Love (and Do Best)
Tristan Louis posted a wonderful piece comparing Apple circa 1997 and Puls’ recent launch. Either will.i.am is an astute student of history or he and his team have no sense of history.
While the post cites the eerie parallels, there are two key differences:
1) Apple was around 20 years old when it launched that campaign in 1997 and Jobs came back to save the company; so it had some cache and history. There was an effort to build an expand the company, ideally maintaining cutting edge innovation. As the article inferred, the bigger you get, the harder it is to innovate, be leading edge. You have to buy new ideas while preserving what you have. Institutionalization sets in.
2) I think Puls is a product/business that is being built to be sold (a la Beats). The mindset and preference of will.i.am is to create, build and flip, so he can continually create and not have to worry about maintaining a business long-term; that is not in his DNA.
Which brings me to a key takeaway from the piece – stick with what you love and do best. There are very few people who have the whole package – the dynamic depth of intelligence, managerial skills, business savvy/people skills, product expertise and vision – and the PASSION to take a company from start-up to Fortune 100 company. In this case, will.i.am just wants to create.
More power to him.
RIP, Digital Entrepreneurship 1.0
by Andy Harrison
Fatigue is overtaking the digital startup world. The economy as a whole is cyclical in nature, as is each segment. So why is the tech/start-up/digital space any different? There is product fatigue – a lack of substantive innovation. Only incremental work. Nothing resembling a game changer – nothing new is there – how many more new ad tech algorithms do we really need? There is consumer fatigue (e.g. app downloads are down by up to 25% depending whose research you believe) and device overload. There is investor fatigue – concerns of 1999 – The Sequel.
But as importantly, this fatigue shows that key parts of the startup world are in need of significant overhaul. Yes, it’s Darwinian. But for the start-up ecosystem to sustain long-term health, there needs to be a significant purging of the crappy businesses, as well as the short-sighted business practices that have become common in this first wave of digital entrepreneurship.
Digital Entrepreneurship 1.0 is dead. It is time to move forward in the continuum.
Overall, how startups are born and grow needs to be revisited. What happened between 2007 and 2012 is gone. To quote John Lennon, “The dream is over.”
Bootstrapping will only take most startups so far. The minimum ante now is $100,000 out of your pocket (both living expenses and business expenses). You don’t starve an infant. And there is a difference between running lean and being financially anorexic. Either way, young businesses increase the chances of failure by not making the necessary investments of resources and personnel in the gestation period. If you don’t have the money (or a sugar daddy or momma), expect to fail and hope someone adds you to their team for your next gig.
But mainly, I think that the start-up accelerator model is broken, especially now when there is such an explosion of such programs around the United States. Accelerators are becoming institutionalized, which is a subtle form of stagnation. Understand that there are certain accelerators that are excellent (e.g., ERA, Kaplan Education, DreamIt), but the current model is a flawed.
- Three-to-four months is not enough time to accomplish more than an MVP, maybe. An MVP is a waste of resources if there is no pressing need for the product and you have no clue how to monetize it. Smart investors are looking for entrepreneurs who understand their businesses – the key drivers, what and who they have now, what and who they need to add, the financial fundamentals of their businesses and their markets, milestones, the competitive landscape. And you’re not going to learn all of that in three-to-four months while working 20 hours a day building that MVP and going to sessions where you don’t fully understand the material.
- Companies get admitted that shouldn’t – These companies have an inferior product/service offering and people who are not leaders or even managers. They lack the basic business building tools and the requisite business savvy.
- Lack of Commitment, Part I – The resources/people offered by a corporate accelerator aren’t easily accessible nor are they always top-notch (i.e., the A-team is not going to drop everything to help a startup or two).
- And the programs themselves aren’t well-thought out in terms of training/structure/etc. Some accelerators are glorified 120-day efforts to develop and deliver an investor pitch – with no substantive assistance in developing and building the companies they admit.
- Certain accelerators/incubators use a template-model partnering with companies that want to start an accelerator. It is highly dependent on 1) the company finding the right people – people who understand how an accelerator is supposed to operate and have a culture of mentoring and intrapreneurship, 2) Structuring a program of substance; and 3) a substantial commitment of corporate resources (people, access to the host company’s resources, etc.) to make it happen. It is not like getting a plug-and-play franchise like a Subway sandwich shop.
- Lack of commitment, Part II – $20,000 to $40,000 is not a lot of money to invest, particularly If you’re in New York City, it barely covers the living expenses of team members (a diet of Red Bull and Ramen is highly overrated.) If a company is accepted into a program, it should get more resources and cash. It must be nurtured. This isn’t Survivor. Presenting inferior companies at the end of a program not only damages the inferior company, it tarnishes the reputation of the accelerator.
Not everyone is meant to be an entrepreneur. I think people who offer programs like Entrepreneurship Boot Camps or Entrepreneurship in 12 Easy Steps are missing the point because these programs are built on a flawed premise and are a form of opportunistic cashing in on success. Some entrepreneurs may be sincere in wanting to share their knowledge, but they are not sharing all of their secrets, contacts and other true, critical elements to their success (besides timing a market perfectly or dumb luck). They are offering false hope. It is a mirage.
Further, funding is broken. There are unrealistic investor expectations (no hockey stick) from an investing cohort where a 15% success rate is considered amazing. That is sad. Crowdsourcing sites have become a fuster cluck. Just like the App Store, discovery is difficult – to get people to invest, a full-bore marketing/PR plan is necessary to build awareness and get people to your listing. Do you really want to spend time and money to attract low-dollar investors, as opposed to putting it towards building your business?
Another concept that has become distorted is the MVP. It has devolved to the point where MVPs are being designed for investors, not customers. While there have been a number of posts in the last month or so on what an MVP really is or how to build one, there is still a mentality of “slap together a few features and throw it out there” with no plan on how to incorporate feedback, let alone how to build out the platform, app, service, whatever.
Finally, there is culture. The nature of startup community has changed as 1) it matures; and 2) MBAs who once flocked to Wall Street now go to Flatiron, which results in an odor of arrogance that is permeating New York.
So what’s the solution? How do we evolve? Embedded in this piece are the cornerstones for Digital Entrepreneurship 2.0. It’s not for everyone. For those who participate, investors need to change their expectations (singles and doubles, not home runs), accelerators and development programs must be fully committed (no lip service) and the entrepreneurs they choose to help must have substantial products and services – which they have developed to an “investment ready” level. But that is a conversation for another day.
Farewell, Captain
The game tonight in the Bronx couldn’t have ended any other way. In his last game in pinstripes (he will wear the gray road jersey this weekend), Derek Jeter won yet another game for the Yankees.
While I have not been a Yankee fan for quite some time, I always admired the way that Jeter played the game. The only reason you didn’t like him was because he wasn’t on your team and he consistently found a way to beat your team.
He was the leader in the latest (and probably last, thank you luxury tax) golden era of Yankee dominance. You don’t get named captain of the Yankees just because you’re a great player. There is more to it. The public only got to see the “on the field” Jeter, but he was named captain because of how he led the team when the games weren’t being played – in the clubhouse, on the road, in Spring Training and the post-season.
We will never hear him boast about his successes and accomplishments because he is essentially a private person, a believer in the team concept and a sincerely modest person (it took me a few years to figure that part out). We get stories and comments from teammates, coaches and members of the media who were privileged to have access to the “off the field” Jeter.
He earned the respect of teammates and more, and the adoration of fans everywhere – even, grudgingly, a number of Red Sox fans.
So, in three days, Derek Sanderson Jeter will start the next chapter of his life. It will be without fanfare; he will just go to work. Just like he has for the last 20 years. Not that he needs it, but I will root for him.
sbjopinions by Andy Harrison 