StreetSavvy Marketing Predictions for 2016

It’s that time again when just about everyone has predictions for the New Year. In November, Forbes contributor Kimberly Whitler posted predictions from the C-suite.   Adam Davidi, from the Guardian, posted predictions on branding based on conversations with “experts.”   I am sure we will see predictions from Forrester, Gartner and others as well.

As a Managing Director at C-Level Partners, I don’t want us to be left out.  My colleague, Vince Ferraro, and I have been C-level executives in marketing and general management for many years. We now consult with companies on marketing and their go-to-market strategies.   We decided to look at “Big M” marketing, relating to predictions for how companies and brands go to market and how they interact with customers.  So without fanfare and any biased perspective, we share these predictions for Marketing for 2016.

Let me be candid.  While most of these are predictions based on our work with clients, with start-ups and in talking with our marketing colleagues, there are also some “aspirational trends” that we hope come true for the profession as well as we believe they are important for marketing professionals and the businesses they manage.  Some of these trends overlap and leverage each other.   To us, that will represent the power of good marketing.  In no particular order, our top sweet 16 are:

1. Cognitive Commerce has begun. Marketers will use information on customers from their databases, the internet, and other sources to build stronger relationships, build predictive algorithms, personalize content, and deliver products and services to meet their specific needs.
2. The distinction between offline and online will disappear as real time analytics will unite both camps. Marketers will consider all (omni) marketing channels to optimize their marketing programs based on cost, effectiveness, ROI and the satisfaction quotient from building relationships with customers.
3. Branding will be from the inside out. Companies will not push the brand but the brand will be built on trust, engagement, referrals, authentic dialog, and transparency.
4. Digital Marketing will cease to exist as a standalone part of marketing. There isn’t a need for separation anymore. World class marketers will know how to market in a digital world. Traditional and online marketing not only will coexist, but one will leverage the other and work better together.
5. Advances in video broadcasting and continued growth in mobile devices will change TV marketing forever. Marketers will use new technologies to enable a more immersive experience and TV and other broadcast video usage will expand on all screens – laptops, desktops, tablets, smartphones, HDTVs and even screens in cars,( i.e. telematics).
6. Content will be created specifically with video channels in mind. Further, there will continue to be a migration to mobile video which will become de rigor on a company’s website, in blogs, in training, and on Youtube.  Youtube channels for marketers will continue to expand.  In addition, the use of video podcasting and live streaming are also in a growth mode.  The world is clearly digital and going video and marketers will take advantage of that.
7. Personalization will grow as its ROI is measured and as customers come to expect to be treated as individuals. We, at C-Level Partners, have written that there are now 7Ps of marketing and personalization is one of them.  Technology and marketing automation will enable this to happen.  This personalization will improve company branding and the ability to build stronger relationships with customers.
8. Marketers will get back to basics. Solid, well planned marketing will trump the sexy marketing in the past.  The CMO and business leaders will focus on marketing as a strategic investment to generate profitable revenue.
9. The human touch will return to marketing. How many of you love to listen to an automated customer service system saying that “your call is important to us…”  That’s bull!  Companies will realize that you are important and will show it by having more touch than tech or at least do a better job of integrating the two.  Being human will also apply to helping customers understand the value of the company’s products and determining what motivates buying behavior.  This is like getting back to the future… and I love it.
10. Employee experience (EX) will be as important as customer experience (CX). Engaged employees are critical because at the front line – in retail, sales and customer service- they ARE the brand, or at least a fair representation of it.   Engaged employees also feel part of the company, behave like owners, and will be promoters of the company’s products and services.  According to our anecdotal evidence, only about 30% are engaged today.  Think Zappos, Starbucks, 1and1, and Jet for companies who provide both good EX and CX.
11. Marketing and Data Science will be the new dynamic duo. This will be key to understanding the customer persona from many angles – demographics, psychographics, sentiments, and buying behavior.  Vince and I, both being engineers, can relate and understand this dynamic.  We expect to see the CIO and CMO becoming BFF’s.
12. As a corollary to #11, data will be the new currency for the younger generation. Data will enable the ability to personalize the marketing message and make that message more meaningful and differentiated for a particular customer. But it doesn’t only apply to the younger generation; big data will be used to help understand buying behavior of all customers and couple that information with the dynamics of profitable revenue growth for the corporation.   The new marketer will be, must be, a datahead or recruit the right people in his/her organization who have the skills to analyze the myriad of data available from business and marketing systems.
13. Marketers will provide more original insights into business. Marketers will not be mere curators of data and content.  The key word is  By having more insight into business, the CMO will be able to justify his/her seat at the executive table.  (This is a belief and expectation!)
14. Customer success will be determined by a combination of satisfaction, retention, and referral. We have always believed that the combination of the three components will yield the most loyal customers.   In conjunction with this, customers themselves, through social media, will become the company’s best sales people. Technology to help build customer engagement will continue to evolve and become more sophisticated.
15. Marketing and selling will be in an omni-channel world. Marketing execs will understand the buying persona of their customers and will use math and analytics to optimize the sales and distribution channels.  But the key here is that it will not be one channel vs. the other.  The marketer will blend online and offline, retail and wholesale, third party distribution and direct to ensure the buying experience matches the customer and to improve the profitability of the company.
16. Chief Marketing Officers will evolve to become strategic businesspeople first and “marketing” executives second. This is our wish and expectation; therefore, we took the liberty to include it as one of our predictions.  The CMO will be the linking pin from the outside world of the customer to the inside world of production, manufacturing and operations.  He/she will have a unique view on building and capturing valued.  In the past, we have not seen this from most of our traditional marketing colleagues as many have been focused on one area e.g. advertising, digital, brand, and product.  The new marketing executive will be a generalist, a businessperson with a focus on top and bottom line growth, steeped in data analytics, change management, and growth levers, coupled with creative and innovative bent.  We may be wrong about this one for 2016, but we believe it will eventually take root over time.

We would be interested in hearing your thoughts on your sweet 16 predictions for 2016.  Let’s keep the dialog going at www.clevelpartners.net.   And feel free to contact me at dfriedman@clevelpartners.net or Vince at vferraro@clevelpartners.net for a complimentary discussion on how we can help you achieve value creation and profitable revenue growth.

The New 7Ps of Marketing: Disregard at Your Own Risk!

I was reading an article in the recent Forbes online CMO Network by Kimberly Whitler entitled: What are the top predictions for marketers heading into 2016?   Ms. Whitler surveyed some experts, including CEOs, Presidents/GMs, CMOs, authors and executive recruiters.  In a different but recent article, Forbes CMO also ranked the top 50 CMOs.  To me, I would have rather heard their predictions.

I always enjoy reading “predictions” because they keep me on my toes- maybe I missed something- and makes me challenge what I believe are the upcoming trends.  As a businessman and marketer I certainly don’t want to be caught short.

I found the article very interesting and certain worthy of consideration.  I feel after reading the comments that each person is looking at the “elephant” from their unique vantage point.  And frankly, I am not sure they are predictions or wishful thinking based on the viewpoints of the interviewee. Nevertheless, they are certainly food for thought.

From a holistic view, my prediction – or wishful thinking – is that marketers need to start with the customer and realize that marketing has become multi-channel and multi-dimensional.   The smart CMO must orchestrate the new marketing mix. That means they need to simplify messages sent to consumers through whatever channel is relevant to them i.e. digital, small screen, large screen, Point-of-Purchase.  And they need to determine which is most relevant for the target personas.   Moreover, the smart marketer should consider all the tools in his/her toolbox and select those tools that are most effective for getting the right message and INTERACTION with the customer.

When I put this together, i find that the old model of 4P’s is antiquated.  I believe the new prediction is that good CMOs are now considering 7Ps in a holistic view: the original 4 (product including product/service development, price, promotion, placement (digital or traditional), and the new three consisting of process (including customer engagement, referral and loyalty), people as brand messengers at point of purchase or via customer care, and personalization (through technology).

The “traditional” 4Ps of marketing are well known.    In the day, marketing was about creating demand, and to a large degree it still is today.  But the focus was on selling a product to meet a need.   In general, promotion was based on advertising push.  The marketer’s mantra was to shout out the virtues of the product by mass advertising. To some who read the history books, the “soaps” on TV were called that because the consumer goods manufacturers such as Tide, All, and Fab were sponsoring and advertising on the TV shows aimed at the housewives and other stay at home folks.

Pricing was simple.  Manufacturer’s set price and used a price point philosophy of good, better, best. Placement represented where the consumer could buy the product i.e. at the neighborhood store or a mass retailer or even door-to-door sales and home delivery.

Because of technology such as the internet, and the movement away from a manufacturing to a service company, even the original 4 P’s have changed.

FROM                             TO

Product         –>       Solution

Promotion    –>       Information

Price               –>       Value

Place               –>       Access

 

Consumers and businesses want solutions to their problems and want to understand how the product/service will perform.  Due to the internet, both as catalogs of information and online reviews that are omnipresent through a myriad of sources, information has replaced pure promotion.   Certainly consumers and businesses want to find the right product at the right price, yet price by itself has been replaced by value with the value add sometimes being generated by service agreements and extended warranties.  And primarily due to the internet, place (distribution) has increased to a multi-channel access.  Think about the changes from the 1990s when e-commerce was first getting started to today.  Consumers and businesses now have electronic exchanges and other online venues from which to buy goods and services.   And now, coming full circle, we see Amazon opened its first brick and mortar store in Seattle.

Now let’s add the new three elements to the marketing mix.  First is the element of PEOPLE.    When I was head of marketing at US Cellular, we changed our brand and positioned our company using the tag line “the way people talked around here.”   Why did we do that?  In part, we recognized from our research in the late 90s and early 2000s that customers in our market wanted something more than what other cellcos offered.  We were not going to be the most technologically advanced (although our network and engineering were superb), nor were we going to cover the most customers in the country.  What our customers wanted was a relationship with our company, represented by our front line sales and customer service people.  They wanted a company they could trust.  At that point, we realized that people were the brand messengers and in our touchpoint marketing system, represented a way to affect the relationship and alter the buying habits of our consumers.  And it worked.  Our retention rate i.e. loyalty, was the best in the in the business.

The second new element is PROCESS. Many companies loathe the word process because they feel it is bureaucratic.  To me, process is the mechanism for repeatability. We want processes to help the customer in building its relationship with the company and also empower the employees to do their job to satisfy the customer.  Clearly, it is a tricky balance!   The processes today – mostly enabled by technology- relate to tools that help the company serve the customer.    There is a dizzying array of tools that the marketer has to understand and use.  See Marketing Technology Landscape by Scott Brinker or some of the Lumascapes by Luma Partners.  Some of these tools include ways to mass customize a product or service to the customer needs.  Witness the new companies entering the market to build relationships with consumers and business buyers.  There are processes enabled by digital and web technologies that enable social engagement and the marketers use these new tools to build and maintain relationships with their customers.   This improves value through new services and interactive engagement in the eyes of the buyer.

The final area is PERSONALIZATION. Several of the interviewees pointed out that understanding the customers’ persona is critical to segmentation.  Once you understand who they are, the company has to satisfy their unique requirements.  I have always been a fan of mass customization (read Joe Pines original work) or macro-niching as I use to call it 5 years before mass customization became vogue.   Personalization is easy today with technology.  You can see it when you buy a car.  Go into a BMW or Jaguar dealer in their store or online and the system will build the car for you.  Buy a house from Toll Brothers and you get a platform and options to tailor the house to your needs.   Go on the web and find a case for your smart phone and you can easily customize it with your school logo and colors.   Consumers want to feel special and that ensures a solid on-going relationship with their customers.

Marketing has changed and will continue to evolve over the next several years.  Clearly there will be a natural bonding between the CIO and CMO as marketing technology has become more important in defining the marketing mix.  While Ms. Whitler did not ask my prediction for 2016, I will share it with my readers.    I predict that marketing will be more about the customer and the great marketer will find the right combination of the 7 elements to build and sustain relationships with that customer.  At least I hope so.

I would be glad to continue the dialog or share additional thought.  Feel free to visit us on our web at www.clevelpartners.net or contact me at dfriedman@clevelpartnes.net.

Maintaining the Innovative Edge

I was having coffee at Dana Point Harbor in California with a friend and a former colleague of mine, Gary Wallace, who is a VP at Sirius Connected Car.   We were talking about business and the Feb 1, 2015 issue of Fortune magazine with a Unicorn on the cover.  The unicorn symbolizes start-ups that have cracked the $1 billion valuation mark, notwithstanding any sustainable revenue to support that valuation.  (Can you say Dotcom bubble?)

As we talked about these companies we focused on the concept of innovation.  Why were these companies successful in coming up with an idea and just as importantly, what happened to the high flyers, the innovators in the past that have gone “subterranean” and in many cases have died on the vine.   Since this is a blog and not a research tome, let’s look at some of the companies that were stars at one time but have lost their luster.  My goal in this blog is to provoke thought on how to be an innovator and to ensure that complacency doesn’t reign in the future.

Since Gary and I come from the technology world of networking, wireless, and computers, it was easy to find examples of these lost innovators.   And because I am an angel investor with TechCoastAngels in Southern California and lead mentor to start-ups through the Center for Entrepreneurship at Chapman University, I have a good perspective on innovation and what it takes to be successful. Gary, in turn, is a very successful tech executive and was one of the executives who helped build ATX/Agero into a telematics powerhouse.  He is very smart businessman with a tremendous breadth of knowledge.

We pondered if it was an issue of focus, execution, leadership, or a combination of things?  We talked about a few companies:  Nokia, Motorola, Blackberry, Northern Telecom, Jawbone.   I know the first four of them having dealt with them as an executive at telecom/wireless companies.  I know Jawbone because I was a huge fan of their headsets and Bluetooth speakers and the recent article in Fortune (same issue with the Unicorn) made me remember their previously fantastic products.

Nokia was a classic company that started in the rubber industry and through bold leadership became a telecom powerhouse and the darling of the wireless industry in the 90’s and early 2000’s with its Nokia 1100 and then the Nokia 3000 series phones.  Heck, I bought a bunch for my family.   Fast forward to 2013 and Nokia sold off its wireless phones to Microsoft.   Note from the graphic below courtesy of CNET the market shares today based on the operating systems.  And the subsequent chart on Global Smartphone market share tells a powerful story.

Similarly, Blackberry which use to rule the “smart phone” world with its business oriented devices. Unfortunately, has lost its way and while it still produces phones it is focusing on applications and recently introduced the Blackberry Classic, harkening back to the glory days of the late 2000s.   Many people I know still like that classic design because all they do is email and text from the device.

Motorola in a sense invented cellular service.  Martin Cooper made the first private handheld call in 1973.   They came out with a brilliant design for a small clamshell phone called the Startac in 1996.  Great phone that was a must have.   In 2011 Motorola sold off its mobility division (cellular service) to Google and subsequently Google sold the division, sans its patent portfolio, to Lenovo.

Similarly Nortel, formerly Northern Telecom, once a power house in telecom infrastructure with nearly 100000 employees and a huge market cap on the Toronto Exchange, filed for bankruptcy in 2009.  They had great product and when I was an engineer I highly admired their technology.

Jawbone is a little different in that they still have a great technology and a superb well thought of CEO in Hosain Rahman.  They introduced several products that made the market but then other competitors came in to take share.  Currently they are pivoting to focus in part on the wireless fitness craze in competition with companies such as Fitbit (a relatively new Unicorn established in 2007).

When Gary and I talked we thought about our experiences with these companies and ruminated what they could have done differently.  Now this is not a scientific study by any means but here is what we thought resulted in the downfall.  And for context, remember Andy Grove’s cautionary words: Only the Paranoid Survive.

Could these companies have survived and changed?  I don’t have the answer but it is an interesting discussion.  By looking at what we believe were their failings, Gary and I posited that these four areas could have been changed.

• This is the opposite of arrogance.  These companies relied on their past successes and thought that their view was the right view.  They became insular and lost touch with the customer.  From personal experience these companies except for Jawbone would not accommodate unique requirements.
• Customer perspective. While these companies focused on their products they did not really listen to their customer wants and needs and did not accommodate their needs. Other competitors eager to take share were more accommodating.  Companies need to have a direct pipeline to their customers.  Engineers should visit customers.  Customer panels and advisory boards need to be implemented.  Lead users, i.e., innovators and early adopters, need to be identified and used in early product trials.
• The telecom companies grew fast with introduction of new products and excellent technology.  But the leadership seemed to lose focus on execution.   I give credit to Nokia and Motorola for spinning off their mobility groups to Microsoft and Google to give those entities a better chance of survival.  Regardless of anything else the basic notion is that P=R-C where P is profit. Execution needs to be de rigeur for all companies through a solid business battle rhythm of managing the business, and tools such as balanced scorecards to help guide the way.
• All the companies I mentioned and certainly those in the Fortune article achieved success through innovation.  Innovation takes place on several fronts and all characterized as “new.”  Newness and the pursuit of newness on several vectors give companies an advantage.  You can have a new product(Fitbit), new application in a market(think baking soda in toothpaste), new pricing ( Solar leasing, ATT’s Digital One Rate), new technology offering new benefits (drones, Space X, First Solar), new processes (Amazon, Tom’s shoes), new support systems, new branding, new partnerships, new eco-systems.  And the list goes on.

Achieving sustained success is very difficult.  Companies need to develop the right strategic imperatives, the right innovation centers, the right product development processes, the right customer interface processes.  Many companies can do this on their own but also many companies are so focused on today and execution they may need help from an outsider, sort of an alter ego, to help with guidance, advice and tools.    Feel free to comment on this blog or contact me to chat about your business needs.  My contact info is dfriedman@prodigy.net.

The Art of Great Customer Service

As I write this I know many people will not like the fact there is a gun in the picture. But I do like target shooting and the competition with my friends has been both fun and relaxing – although I have yet to beat Jeff’s top score!!  Nevertheless, today i was treated to an example of exemplary customer service. from Browining which makes the gun.

Here’s the plinking pistol I use for target practice. It is a Browning Buckmark .22 URX.

I bought the gun in late 2008 when I was living in Dallas and I have used it pretty regularly over the past several years.  On the top of the gun there is a rear “sight bridge” which was made of polymer  It cracked, thereby making the gun inoperative. I called Browning today and talked with a woman named Rita who listened to my problem and then told me she will send out a replacement today via UPS for the sight bridge.  NO CHARGE for either the part or the shipping.  My only comment was “really?”   She said “yes, and have a happy holiday.”

To me this is pretty remarkable considering the gun is relatively old and the warranty is only for one year.  Rita never questioned whether I took proper care of the gun or not.  The way she handled my call and the fact that she sent me a new part, worth probably $60 plus shipping, is something to note.  So kudos to Rita and the management of Browning.   Happy Holidays to all.

Rules-based branding: Spirit Airlines vs. the Spirit of the Brand.

I am an avid reader of IBD Monday editions and have been doing so for more than 20 years. One of the sections I enjoy is called Managing for Success. In the May 7 IBD, there was an article called “Spirit Airlines Gets a Lift from Edgy Ad Campaigns.”

In that article, the author recounts a story where the CMO for the airline endured negative press because a cancer-stricken veteran bought a non-refundable ticket and then requested a refund because he found out his cancer has become terminal. And his doctor said he could not fly. The airline refused to give a refund! According to the article, the CMO stated “if you think it’s deplorable, and you think we should have given his money back, then you’re probably not the right customer for us.” Further, he said that if you play by the rules and don’t want to pay for others who don’t play by the rules, you are the right customer for us. Certainly, the CMO and the airlines can brand the company in this way. Their brand is one of innovation and value- based. But to me, their “rules based” branding did not support their overarching brand and is a direct affront to my sensibilities.

The incident took me back to my tenure as head marketing officer for US Cellular where I faced a similar incident. An older gentleman in his 80s called our customer service line and requested a refund for a newly purchased phone bought by his wife. The phone, in an unopened box, was to be returned because right after the phone was bought, this gentleman’s wife found out her cancer was terminal and they needed to conserve cash and focus on the last days of her life. The call came to me as the last resort- our customer service group denied the request- and I found out that we would not grant a refund because our rules were clear about purchases and returns. Yet, out brand was based on a concept of customer intimacy and our tag line was “the way people talk around here.” I felt a) it was the right thing to give the gentleman a refund- the phone, after all, was unopened and not used and b) that action would support our brand.  Regardless of the rules, the brand to me trumps the rules and it is my (our) guiding light). The incident at US Cellular also served as an example to many of the right actions that could be taken while still preserving the intent of the rules.

When I wrote this blog, I had a bad vibe for Spirit Airlines. And then as I was Googling more information about Spirit, I found the following news release by their CEO:

MIRAMAR, Fla., May 4, 2012 (GLOBE NEWSWIRE) –

 “At a time of ever-rising airfares, Spirit Airlines makes commercial air travel affordable for many Americans. A very important part of keeping our airfares reasonably priced is our refund policy.
“Every day we seek to balance customer service with customers’ demands for the lowest airfare possible. But sometimes we make mistakes.
“In my statements regarding Mr. Meekins’ request for a refund, I failed to explain why our policy on refunds makes Spirit Airlines the only affordable choice for so many travelers, and I did not demonstrate the respect or the compassion that I should have, given his medical condition and his service to our country.
“Therefore I have decided to personally refund Mr. Meekins’ airfare, and Spirit Airlines will make a $5,000 contribution, in his name, to the charity of his choice, Wounded Warriors.
“We have worked hard to build a great company that makes air travel affordable while making our employees proud and customers satisfied. All of us at Spirit Airlines extend our prayers and best wishes to Mr. Meekins.”

I applaud Mr. Baldanza for rectifying this problem, granting a refund, and donating to Wounded Warriors. It would have been better though for this unfortunate incident and reaction never to have happened. I trust Spirit will review its policies but more importantly how they will treat customers. I believe this is a good first step to redemption.

Product Managers: Become your own Steve Jobs!

I am a big fan of Steve Jobs- for what he has done for a broad range of customers, for the tech market, and for innovation in general. He has shown emotional resilience (remember he was exited from AAPL but then formed Pixar and then came back), fortitude, willpower, vision and an eye for detail. To say he is a model leader is an understatement. He is THE icon of tech leadership.

Enough plaudits for Steve. The question that I want to address is how does a product manager become “Steve Jobs” for his/her product line? First, let’s make an assumption that acting as Steve Jobs – evangelist, leader, innovator, and stickler for detail- is good. Can you learn to be exactly like Steve? Not at all. Yet, that doesn’t mean you can model his leadership. And, how can a product manager do that? What are some of the key elements that the product manager should focus on?

Here’s a checklist of items for the product manager to consider. How many of these attributes do you display?
1. Think customer. Walk in their shoes. Find out who are the lead users. Talk with your technologists and dialog with them on the art of the possible – of what the technology could do for customers.
2. Make products and services easy to use. Put the complexity behind the hardware, the software and the interface. Make it intuitive for people to use. Consider integration of mobile apps with online applications and the ability to enter information via a traditional laptop.
3. Embrace technology. Take a techie to lunch. Attend tech sessions. Share your plans with them and have them share their new technology discussions with you. Ask questions how the technology can apply to different markets, uses.
4. Respond to market changes. Some of this will come from the technology side as new technology will yield drastic changes in functions and features and even entirely new applications. However, the key is making technology relevant to the customers. Use a new product advisory board to glean input.
5. Become friends with the vendors, suppliers and others in the supply chain. Be demanding of them as you are to yourself and to your team. Yet ideas coming from these partners can help you and your products stay ahead of the competition. Perhaps there is a technology they know that you can embed in your product and get an exclusive for a period of time.
6. Build a strong integrated technical, marketing, and sales team. This will ensure success. Be demanding of each group and set a standard modeled after your own attitude and work ethic.
7. Be an evangelist both inside and outside the company. Build excitement and suspense. Become a showman so to speak, making the product exciting and building suspense before the actual release. Use Beta tests; get the product into the hands of the technical analyst community. Find lead users and innovators to try the product and provide testimonials. Many product managers are reserved and introverted focusing on the development of PRDs and MRDs. As the “owner” of the P&L for the product line, the product manager has to be evangelist or find someone on his team to assume that role.

I have known many product managers that have several of these qualities and the best ones display all of them and more. What are your thoughts on the skills and capabilities of product managers that will make a difference in the success or failure of a product?

The Passion of the Entrepreneur

A few weeks ago the Tech Coast Angels of Orange County (www.techcoastangels.com)- a group to which I belong- held an open meeting which enabled would-be entrepreneurs to meet with about a half dozen of us angels.   We expected about 30 people to show up, yet we would up with more than 70 entrepreneurs attending.   Ray Chan and Stu Roberts of our group did a superlative job of arranging the meeting.

The entrepreneurs were very engaging and had extreme passion.  Recognizing that we were looking for great opportunities in which to invest, the entrepreneurs tried to sell us on their ideas and how great they were.  They become enamored with their ideas and the technologies.   And it is great to have that much passion.  But passion without the true understanding of the market and making money is misplaced.  Therefore, we, angels, spent time explaining how to make their pitch stronger.

To each entrepreneur, I explained that there are fundamentally four main questions that I need to understand and therefore they have to address each area. 

1. Is there a market?  To whom are you trying to sell and can you pinpoint and find the actual buyers of the product or service?
2. Can you make it?   How is the product made and do you have to use a new process and/or new technology?  Patent protection is great to have, yet that is not sufficient to make a product a business success.
3. Can you make money?  Angels want a return on their investment over a relatively short period of time.  Very few projects result in a 10x or higher return on investment and many angel investments may languish or worse.  The entrepreneur must understand how money is made- the routes to revenue early in the product lifecycle, and at least a preliminary view of how other products or line extensions can be developed.   I was amazed that the entrepreneurs were so focused on their technology and product that many failed to see the advantage of partnering with others in a broader eco-system.  As an angel, I felt it was our obligation to help them see that aspect of business.
4. Can you support it?  What happens after the product is in the market?  If it is a consumer product specifically, how is the entrepreneur going to support it? Is there a call center or will the entrepreneur handle the calls him/herself?  And what happens after the initial product is in the market?  How will it be extended to uncover new opportunities in the market?

I am on the Advisory Board of a couple of startups as I also look for a corporate C-level opportunity.  One startup company in which I am involved has developed a patented technology to make mail boxes “smart.”  As I reviewed the business plan and considered my involvement in the company, I was looking for the answers to the four questions cited above.  Based on what I read and what I could add, I decided to join the advisory board and am very excited about their prospects.

I can see the market and the person to whom I would sell the product.  I understand the patent and see how it can be made today, tomorrow, and extensible to products in the future.  I understand the financials although with such a large market we have to be careful not to let the “law of large numbers” distort the reality of the market.  So we started to review the financials top down and correlated with the market sizing from the bottom up.   And finally, I could see how we can support the product today and in the future.   When I put it all together, I see a high probability of success as an investment and as a successful company long term, notwithstanding any exit. 

I am glad to hear your thoughts.

I trust all had a good Thanksgiving and wish all my readers a healthy and happy holiday season.

David

Random Acts of Kindness Lead to a Great Brand

As many of my friends know, I have a favorite watch. It’s a Tutima FX UTC, a chronograph which displays time in 2 time zones. It’s a beautiful watch and very functional. See www.tutima.com.

my watch

We all know times are difficult for many people and businesses. Yet, I want to point out a random act of kindness from the service center at Tutima that made me an even bigger ambassador for the Tutima brand.

My watch needed to be repaired. It needed a pusher (the little button that starts and stops the second hand for the stop watch). I received a quote and an estimate for an overhaul (cleaning) which it probably needs since I wear the watch basically everyday and it’s been about 4 years since the last “tune-up.” However, like many of us, I am watching my pennies and being, in part, an EIT (Executive in Transition) I was not amenable to spending a lot on the watch at this time. So I wrote back to Christina Pickens, the service manager at Tutima, and explained my circumstances.

I expected to get push back on the repairs and an attempt to make me feel guilty about having an expensive watch and not taking care of it. However, instead I received a nice note which basically said she understood these times are tough and whenever I wanted it overhauled they would be glad to do the job. Not only that, I received a discount on the repair I agreed to and without asking for one! I found the note particularly interesting because I did not expect it and because of her empathy.

How many times during this recession have you seen such random acts of understanding and kindness? Rather, I normally see the service providers trying to take advantage of the unfortunate. In the grand scheme of things, fixing my watch is not a huge issue. But, to me, this experience was quite touching and because of it I am an even more committed advocate of Tutima and a bigger brand ambassador.

When I can, in the future, I guarantee that I will purchase another Tutima watch, probably the Eurofighter Typhoon or the Flieger Chrono F2. And in the meantime, I will wear my current watch with pride and tell my story to all who will listen. It’s a great example of customer service and I commend Christina Pickens and Tutima.