What I Learned About Business from a Chris Brown Concert

May 5th, 2011

I recently attended a Chris Brown concert – Yes, I am big fan – but as I sat there, and walked around, I couldn’t help but notice that CBreezy was losing out on an opportunity to:

  1. WOW the audience
  2. Create Buzz
  3. Continue to Resurrect His Image
  4. Make More Money

What I noticed applies to most businesses.

For musicians, concerts are where they make their money – if you glance over any of the annual top earners in music lists, you will find they are dominated by artists who have gone on tour. Touring is where the money is.

Tours, and concerts are important for musicians – it allows them to a) sell loads of merchandise (often cheaply constructed and designed) at ridiculous prices b) sell more albums c) connect with their fans on a more personal level d) generate increased buzz and awareness in specific markets

As I sat and watched, tapped my feet, sang, and occasionally rose from my seat (at the back of the auditorium, thanks to last minute half price tickets), I couldn’t help but feel that CBreezy was not maximizing any of these opportunities.

Read more…

To Become Great, You Must First Realize You Are Not

April 23rd, 2011

i suck at life white black design 300x300 To Become Great, You Must First Realize You Are NotTo become great, truly great at something, you first have to realize that you are hopeless and everyone is better than you.

Understanding you are hopeless at something is a necessary realization on the pathway to excellence. Why?

There are a couple of key reasons:

Realizing how hopeless you are at performing something gives you valuable negative information – it shows you all the stuff you do not know. Knowing what you don’t know is the first step in actually knowing. Therefore this realization brings into focus all the information, and skills you need to learn and develop. It makes you hungry.

Keeping a constant awareness that you are hopeless at something therefore creates a constant drive to become a sponge to learn, develop, and improve. Its like constantly moving the finish line, so that you need to keep on running. Becoming great is all about staying hungry.

The problem with thinking you are good, is that while you still might understand that you do not know everything, you believe that you know enough. As soon as you think you know enough, you stop learning, growing and developing. When you think you are good, whats the point in continuing to grow and develop? The little voice in the back of your head tells you, ‘Hey, don’t worry about pushing yourself on this one, you are already awesome.’ When you reach that finish line, there is no point to keep on running – you are already fit, fast and healthy. You don’t need to keep on running.

The irony is therefore that when you think you are good, you are actually on the pathway to becoming crap at what you do. Thinking you are ‘good’ is the number one killer of greatness. Being good is really a synonym for being mediocre.

These days there is a popular idea (popularized largely due to Malcolm Gladwell’s best-seller, Outliers) based on research with top performing musicians, athletes, scientists etc, that to become a ‘master’ at something, you need to invest 10,000 hours of time. Apparently, after you reach the ‘magic’ 10,000 hours you can consider yourself a master.

If you think you are already ‘good’, 10,000 hours will not transform you into a master. No amount of hours can make you truly great. If you think you are a ‘good’ at golf, and play 5 hours per week, 50 weeks of the year, for 40 years, you might have a great handicap. But you won’t be playing on the US PGA Tour.

Becoming great is all about your attitude. Studies have shown IQ means shit. There is no predictor of talent based on genetic make-up (beyond certain physical requirements for sports).

To become great, you need to realize that you are hopeless and know nothing – and you need to hold onto this idea throughout your life. This simple attitude is the key to constant development and improvement, which combined with 10,000 hours, and importantly (I really should have mentioned this earlier), a love for what you do, will make you truly great.

So, in your line of work, are you ‘good’?

 

 

Competitive Advantage is Now Obsolete

February 5th, 2011

The pursuit of ‘competitive advantage’ is a common one amongst entrepreneurs and business owners – it is seen as the pathway to profit. But is this true?

Competitive advantage (according to the highly reputable Wikipedia) is defined as the strategic advantage one business entity has over its rival entities within its competitive industry. Michael Porter (of Harvard Business School) has identified two basic types of competitive advantage:

1) cost advantage
2) differentiation advantage

According to Porter competitive advantage exists when the firm is able to deliver the same benefits as competitors but at a lower cost (cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage). Thus, a competitive advantage enables the firm to create superior value for its customers and superior profits for itself.

While this all sounds great – there is a hard question that needs to be asked. Is Competitive Advantage enough to create business success?

I used to think so – until Jason Cohen of Smart Bear illustrated otherwise. Cohen raised some key points about competitive advantage:

Anything that can be copied will be copied, including features, marketing copy, and pricing. Anything you read on popular blogs is also read by everyone else. You don’t have an “edge” just because you’re passionate, hard-working, or “lean.”

Essentially Cohen highlights that both 1) cost advantage & 2) differentiation advantage can be copied, and because they can be copied – you have no real advantage. In response to rendering the theory of competitive advantage obsolete, Cohen develops his own theory – ‘Unfair Advantage’.

UNFAIR ADVANTAGE = theory that to develop a sustainable and successful business you need to develop an advantage that cannot be copied and cannot be bought.

What does Cohen consider to be an Unfair Advantage?

  1. Insider Information
  2. Single Minded, uncompromising obsession with ONE THING (see his full post, link below for more on this)
  3. Personal Authority
  4. The Dream Team
  5. (The Right) Celebrity Endorsement
  6. Existing Customers

If I had to choose – I would say that No. 2, 3, and 4 are key. I personally think that No. 5 – Celebrity Endorsement can be copied (rendering it merely a competitive advantage), and No. 6 Existing Customers can be acquired. (think Branson’s ability to acquire customers in saturated markets as evidence).

What is NOT an unfair advantage?

  1. We have feature X
  2. We have the most features
  3. We’re patenting our features
  4. We’re better at SEO and social media
  5. We’re passionate
  6. We have three PHD’s/MBA’s/Insert Impressive Sounding Degree
  7. We work hard
  8. We’re cheaper

Interestingly, Cohen considered that innovative design and intellectual property are no longer long term competitive advantages – purely due to one up manship. (I would also add celebrity endorsement, and existing customers as further examples of things that are NOT an unfair advantage).

Cohen’s Unfair Advantage theory I believe is the correct pathway that business owners should pursue to building a remarkable business that is sustainable in the long term. In Cohen’s words:

Almost anything can be copied. In fact, I’d claim that anything of any value will be copied. It should be part of your business plan that other people will copy you

For full exploration of the theory of Unfair Advantage, see: http://blog.asmartbear.com/unfair-advantages.html. For a fuller discussion of what is not unfair advantage, see: http://blog.asmartbear.com/not-competitive-advantage.html

How to Create a Purple Cow

November 25th, 2010

I have been reading the Purple Cow, by Seth Godin. The premise of the book is really quite simple.

If you are driving out into the country you inevitably see lots of cows – the black and white variety. While at first you may think the scenery is amazing, eventually it gets boring.

But what if you saw a purple cow?

Using this as an analogy he looks at how successful businesses need to create purple cows – remarkable products, services and ideas.

As I was reading today, a comment he made resonated with me.

Bootstrapping entrepreneurs often upend existing industries because the dominant players in an industry are the last place you will find empowered mavericks. The market leading companies may owe their dominance to the Purple Cow they marketed years and years ago, but today, they are all about compromising themselves to continued profitability. The seeds of their destruction lie in their dependence on being in the middle. (Page 93)

For Godin, being in the middle essentially is when a company tries to satisfy everyone, and really not push the edges of their product or service anymore. In other words, its were the marketing budgets are bigger than the product development budgets and products are average, rather than remarkable.

The reason this resonated with me so much (other than myself being a bootstrapping entrepreneur) is that it echoed a key idea which is present in Richard Branson’s autobiography, ‘Loosing My Virginity’. Branson has an amazing track record of entering arguably saturated markets characterized by large companies with strong brand awareness and market share, and capturing the market and turning it on its head!

Branson’s success has ultimately arisen due to his ability to keep his companies small (in terms of management), and consequently, innovate quickly, and often, creating Purple Cows, which have allowed him to capture the market.

Much of Branson’s Purple Cow factor comes down to customer service. Branson’s story of how he decided to launch Virgin Atlantic illustrates this – he attempted to book a flight with British Atlantic (BA), experienced horrible customer service, and realized, ‘Hey, other people must have the same problem, why don’t we do something about this?’.

What is evident from Branson’s autobiography is a belief that you can enter any industry, and within 2 years, capture a large share of the market purely by providing better customer service. For Virgin – customer service is their Purple Cow.

Take health and fitness gyms for example – the dominant player in Australia is arguably Fitness First. One of they things that has always irritated me has been there customer service. I mean there gyms are great – large, fairly clean, lots of machines etc. But customer service? Lets face it, we all probably know of people who have had crappy experiences. I know a number of people who have been over charged or who have canceled within the cooling off period and still been charged. The biggest pain though? The lack of flexibility. Want a month to month rolling contract? What about pausing your membership for month or two? In the past these have not been possible, and now, you still have to pay. What often ends up happening is most gym users pay for a whole lot of gym time that they never use!

Virgin runs their own gyms – in fact, last time I checked they owned the largest health and fitness provider in South Africa, and the UK. They also have opened two flag ship health clubs in Sydney. Guess what their key difference was compared to their competitors?

Customer service – specifically flexibility. Rolling month to month contracts (so you could cancel whenever you wanted!) and flexibility in holding memberships were part of their overall customer service efforts. Sound like a gym you would want to join?

Whenever I see a business who offers poor customer service – the first thing I think is that that particular business is at risk of losing market share.

A company who also epitomizes the Purple Cow through customer service is Zappos, whose motto is ‘Powered By Service’. I recently finished reading Delivering Happiness, a book written by Zappos CEO Tony Hsieh. Tony really outlines in a fair bit of detail how Zappos has become a $1 billion + online shoe retailer (and now more), purely by focusing on amazing (and I mean amazing) customer service. Customer service has been their purple cow. Rather than spend money on advertising, they simply pumped their whole marketing budget into developing crazily awesome customer care. How did they grow to become such a large company? Their customers (who were extremely happy), would not stop talking about them!

So, to conclude the Purple Cow is a good read. It is short, filled with lots of examples and case studies. It essentially only has one key message, and that is – develop remarkable products, services and ideas, and people will talk!

After looking at Zappos, and Virgin, I tend to agree.

Why Self Evaluation is Vital

November 9th, 2010

self evaluation 234x300 Why Self Evaluation is Vital“The man (and woman) with insight enough to admit his (her) limitations comes nearest to perfection.”

—  Johann Wolfgang von Goethe

I think that this really should be the mantra of any business owner (well, really, now that I think about it, anyone!). Why? I have found from running my own business that there is always room for constant improvement and innovation. In fact, this is in keeping with my belief that the point of a business is to solve customers problems in meaningful ways. Customers problems always change – and to provide a solution that helps them in a meaningful way, it is vital to constantly self-evaluate your service and product offering.

What does it mean to self-evaluate?

Read more…

Be So Good They Cannot Ignore You

October 6th, 2010

Steve Martin’s autobiography is a fascinating look at how to make it as a comedian – rather than chart his success (as most autobiographies do), making it appear like a smooth transition from protege to master, Steve goes through the nuts and bolts of his rise to prominence.

His overarching advice to anyone trying to make it in their industry:

Be so good you they cannot ignore you.

- Steve Martin

Are you that good?

Western Sydney Awards for Business Excellence – Entrepreneur’s Panel

July 21st, 2010

WSABE LOGO2 241x300 Western Sydney Awards for Business Excellence   Entrepreneurs PanelI recently attended the media launch of the Western Sydney Awards for Business Excellence for 2011. I had the fortune to be part of a panel of entrepreneurs who were successful at last years awards (Art of Smart won Young Entrepreneur of the Year Award, and Chairman’s Choice Award) and had the opportunity to share our business stories with the audience.

Some highlights of the event can be found at the following link, which was featured in the Parramatta Sun:

http://www.parramattasun.com.au/files/93/70/28/000287093/publish_to_web/index.html

http://www.parramattasun.com.au/news/local/news/general/judges-ready-to-identify-business-excellence/2233922.aspx

For more info about the awards, visit: www.wsabe.com.au