Archive for June, 2011
June 22, 2011
It was an exciting day Monday for our portfolio company VillageVines. The company, which is the leading provider of insider pricing for fine dining experiences, launched a new website, a whole bunch of new functionality, 5 new markets, and unveiled their new brand – Savored. A massive amount of change on one day. And there’s more to come. Co-founder Dan Leahy wrote an awesome post on the process his team went through in getting to the big day. It’s well worth a read.
Watching the Savored team and board go through the process of thinking about rebranding put a point on a topic I think many entrepreneurs need to be more thoughtful about – branding.
There are a lot of people out there who believe that there are few things more important than the selection of company name. People pay consultants big bucks to help with it, lose enormous amounts of sleep, and are almost never really satisfied with the outcome of branding exercises. At the end of the day, does it really matter?
My answer: Not really.
Except when it does.
I’m no branding expert, but I do have a clear point of view on one place that companies often stumble in branding themselves. It can be summed up in two simple rules:
- Your brand doesn’t need to mean anything directly evocative of what you do (see Google, Yahoo, Starbucks, Tesla). . .
- . . .but you must make sure it doesn’t suggest something you are NOT, or create unnecessary limitations vis a vis what you might become.
For these two reasons, I think that companies are generally better off with non-descriptive brands.
As Dan Leahy explained, that second point is why VillageVines is now Savored. There was some original descriptive logic to that brand, but now, to 9 out of 10 people, VillageVines sounded like it must be a wine business. Even people who had seen the site and been introduced to the service seemed to forget and revert to associating the brand with wine. We had powerful brand associations – but with the wrong thing!
When our sales force was out pitching in the marketplace, they would frequently run into trouble when restaurant owners thought they were from yet another wine distributor. We have a great offering that benefits consumers and restaurateurs alike, but we were putting a mental barrier in the way of people building clear associations with our brand. The change had to happen.
While VillageVines had a misleading brand, you can create just as much of an issue if your brand starts out as a good fit, but over time becomes limiting in its effort to be descriptive. The effort to be elegant, simple, and descriptive frequently backfires.
If you listen to NPR in the mornings, you’ve no doubt heard the sponsorship announcements from Reputation.com, formerly Reputation Defender. When it was founded, Reputation Defender was explicitly, and successfully, focused on helping brands protect their online reputations by patrolling the web and tracking and remediating negative and potentially misleading mentions. As their business grew, and they quite logically expanded into offering broader services to help clients manage their online image, the ‘Defender’ piece of the brand became limiting. They wanted to be in the brand promotion and management business as much as the ‘defense’ business. So they were forced to make a change. Had they really carefully considered it from the outset, they might have predicted this outcome and saved a lot of angst and expense.
It’s impossible to predict how companies will evolve and where they will end up. And names, of course, have to be chosen at the very beginning. For that reason, I always advise startups to choose brands that either don’t mean anything (Google) or are only vaguely evocative of the company’s business (Savored). In 2011, which seems to be the great year of the pivot, that seems the safest path to avoiding this one set of headaches down the road.
June 17, 2011
In my last post I laid out some thoughts on content marketing and its role in social marketing strategy. Twitter and Facebook are great, and offer powerful channels for reaching customers and prospects for any business. But businesses need to put more meat behind those social channels, and content marketing is that meat.
I think that content marketing – and for the purposes of this discussion I’m primarily talking about blogging (though video, podcasts and other media can be part of the story) – offers virtually any small business a customer acquisition and cultivation mechanism that cannot be ignored. We’re still in the early innings of this game, with the vast majority of small businesses doing nothing, or at least nothing effective, when it comes to content marketing. And that means those who do develop effective practices have a big opportunity to get a leg up on their competition. I hope I might push a few people to think harder about it with this post.
When you think about most small businesses, be they technology startups or local merchants or service providers, very few have the luxury of any truly proprietary means to differentiate themselves from the competition. So in a world of largely commoditized product offerings, consumers end up making decisions driven by just a handful of factors:
- Reputation and referrals
- Customer service
Think about content marketing as applied to these four decision-drivers. Imagine a service provider, let’s use a landscape designer, that had a steadily active blog – even just a post per week or two with some thoughts and commentary on gardening and landscaping. Pushed out to existing customers, couldn’t that be an effective means to communicate new services, continue to deepen relationships with existing customers who you might inspire to think of new projects? Wouldn’t it be a perfect channel through which to communicate a philosophy and set of practices around customer service? Won’t some of that content be inspiration for link-sharing and instant, electronic referrals? Isn’t it an optimal channel through which to convey competence and expertise – so critical to building trust? And won’t the aggregation of posts communicate something impressive to prospective clients?
Content marketing is nothing new, of course. Businesses of all sorts have published newsletters for decades, frequently to good effect. They establish credibility around expertise, and offer the ability to communicate personality. My wife and I have religiously brought our cars to the same auto mechanic for 10 years, driven not their superior oil changes, but by the shop’s eclectic newsletter – replete with book reviews and philosophical musings – that is sent out each quarter. In a world where all oil changes and tire rotations are created equal, Dave’s newsletter deepened our relationship, kept us coming back, and led us to refer him to dozens of others. I’m working now on getting him to shift to a blog.
While newsletters have been effective for many, blogging offers an opportunity to completely rethink things, opening up a cheaper, more informal, enduring, and much simpler to execute against content marketing mechanism. With zero distribution expense and a more informal platform, it’s easier than ever to star a conversation with your customers. That conversation can come in a rapid-fire collection of small, casual bits – something newsletters never offered. And that conversation is then automatically archived, building into a corpus of material that can in short order become a powerful tool for speaking to prospective customers.
Use content marketing well and you advance the ball on each of points 1-3 above, thus moving your business further and further away from a need to compete on price. That’s somewhere every business owner wants to get.
Most people, even when convinced that blogging would be a good idea, get stuck at “but what would I say?” And to that, I answer simply, tell people what you know. Any even marginally successful business owner is an expert in his field, at least relative to his customers. The conversations that business owners end up in with their customers every day are the starting point for a world of more broadly distributed content marketing.
The owner of my favorite wine shop wouldn’t hesitate for a moment to spend 20 minutes talking in great detail with me, a loyal customer, about a recent buying trip he took to Burgundy. He’ll have that very same conversation ten times over in his first few days back in the shop. Why not take those same stories and write them down and share the knowledge and experiences with all of his customers? When he has an interesting discussion with a distributor about the impact of El Nino on the Australian and Chilean crops this year, I suspect his customers would enjoy learning about that from someone they know and trust. Build a collection of similar posts and he’ll further cement his reputation as the undisputed & most knowledgeable wine guy around and offer a powerful way for prospective new customers to get to know him.
If you’re considering getting started, don’t worry that you can’t think of 10 blog post topics right now – they will come from your everyday business life, I promise. To build confidence in this, start a list and jot down topics as they occur to you. I did this for a couple months before I started blogging and was astonished at how quickly and steadily the ideas came. My problem now is that the ideas have rapidly outstripped the time I have to write.
So why doesn’t everyone jump into the fray and make content a key pillar of their marketing strategy? Because, as I’ve discovered for myself over the past six months, it ain’t easy. It takes real work, dedication to the task, some creativity, and some writing talent. And arguably, unlike other relatively new but important tools in the marketing toolkit such as paid search, it’s not an easy thing to just study up on and get good at.
And even if you tackle the ideation and execution sides of creating the content, you’ll still face a distribution challenge. That’s a whole other can of worms (though traditional email lists plus working to build Facebook fans and Twitter followers can get you a long way). There’s a million places to find help on all of this, though – the Content Marketing Institute is a pretty good place to start.
Bottom line, what I’m excited about is the following:
- Content marketing is here to stay, and an important opportunity for every business to forge deeper relationships with customers.
- We will be in a period for several more years, at least, where the vast majority of businesses sit on the sidelines or make half-hearted efforts. That equals real opportunity for those who do it even modestly well.
- Because it’s growing as a phenomenon but not easy to execute, there will be an inevitable wave of startup innovation around tools and services to support marketers.
This last point is the most exciting one to me. We’ve been looking hard for some winners, have made a couple of bets already, and will continue look for more. More on this in my next post. . .
June 14, 2011
So I’ve been at this blogging thing for a while now – working at it for 7-8 months, and live online since around the first of the year. It’s been an interesting, predictably challenging, and hugely rewarding experience. I don’t think I’ve got my feet fully under me yet, but I’m getting closer.
The whole process has me thinking a lot more about content marketing as a tactic, a movement, and increasingly, what I believe is an essential component of any integrated marketing strategy. So important that it has now inspired what I expect will be a three part series here at this blog. Not sure exactly what content marketing means? Before we start, go visit the folks at Junta42,the real gurus of the field, who offer a great primer and some additional resources here.)
A year ago, I might have told you that I was mildly skeptical of the value of a lot of web content marketing for many businesses. Sure, done exceptionally well it could be a useful branding tool for the very best executors. But aside from the (often quite important) ability for it to serve as link bait or optimize a company’s SEO efforts by cranking out high volumes of search term-dense posts, could it really be an effective branding and inbound marketing tool for a small business?
Many businesses – small and large – are casting about, thinking about optimizing their social media strategies, wondering what to do with their email lists, Twitter followers, and Facebook fans/friends. They’ve done big pushes to get people to follow them, and then the vast majority of businesses are left asking “what now?” Most businesses do little beyond those initial efforts, save some traditional email marketing. Some are at least diligent about then using those distribution channels to share news of sales, special events, and other promotions, and that’s great. But there’s so much more opportunity out there.
Once you’ve done the work to build a following – and tens of thousands of businesses have gotten this far – you’re leaving immeasurable opportunity on the table if you aren’t using that channel frequently to more deeply engage your customers and followers. My friend Matt Harris wrote a great post several months back in which he foretold a world where “consumers will bias towards buying products from companies whose CEO they ‘know’, and have an online relationship with.” I couldn’t agree more.
The good news is that social media and social publishing platforms have radically lowered the barriers to content creation. No desktop publishing or web design expertise required. Additionally, the casual nature of blogging makes it even more accessible. While a CEO would rightfully spend many editorial cycles finalizing a quarterly customer newsletter, her blog can be something she or someone on her staff cranks out casually over an hour or two whenever an idea strikes her. Blog posts, by their nature, lack the sense of permanence and formality of traditional corporate communications, and the culture of the blogosphere empowers and even rewards us all for being far more casual.
Matt’s post was largely contemplating larger enterprises, folks emulating the success that Tony Hsieh and others had in harnessing Twitter and blogging to build the brand and reputation of companies like Zappos. But I think this applies to businesses of any size. There’s no reason that a local realtor or investment advisor or gourmet food shop can’t reap the same benefits. The best amongst those local business owners are fonts of knowledge in their respective field. And now the web has offered them all a megaphone. It’s time to step up and use it.
Web-based content marketing has, quite simply, dramatically lowered the cost of building a brand for many businesses – especially local businesses. With some scrappy execution and without a big budget for advertising or outsourced resources, effective content marketing can catapult you ahead of your competitors.
At the end of the day, be you a Fortune 100 brand or small local retailer, you are in the business of trying to get current and prospective customers to like you (and I mean “like” in the traditional, not the Zuckerbergian sense – though the latter doesn’t hurt). It may sound overly simplistic, but it’s just another way of talking about branding and brand equity. Being liked is what cements customer loyalty and enables the most ‘liked’ businesses to avoid competing on price.
I can’t think of a single business that couldn’t benefit from using content marketing as part of its strategy to connect with its customers and become more liked. But while it can be relatively inexpensive, it does take real focus and work to do this well. And most small businesses I talk to understand neither how to do it nor how to think about the likely return on the investment. In my next post I’ll spend some time on the case for content marketing for all small businesses and also offer some thoughts on how to make it work. I’ll then come back around in a final post in this series to some thoughts on where the content marketing revolution is creating opportunities for a wave of innovators to support and feed off of the trend. That’s a place I’m spending a lot of time on, and am very excited about.
More later this week.
June 8, 2011
Arguably no market has evolved more in the internet era than the media business. And despite the incredible evolution and disruption we’ve seen, the pace of change shows zero signs of letting up. Depending on which segment you’re talking about, we live in a world characterized by more options, more convenient and flexible means of distribution, lower prices, and in some instances higher quality products than we’ve ever seen before.
As an investor in and observer of the industry, one place I find people – entrepreneurs, large incumbents, and investors (present company included) alike – consistently misreading the market is in the complex interplay of all of those elements. In particular, people have consistently missed the way that interplay can lead quality – as defined by traditional standards – to be deemphasized by consumers in favor of one or more of choice, flexibility, distribution, price, portability, and sociability. To understand markets and pick winners in a media segment, you need to develop a nuanced assessment of this ever-evolving interplay. Over or under-emphasize any one of them and you may completely miss the point.
I was struck the other day by an example of this while reading an interview that magazine publishing legend Jann Wenner did with AdvertisingAge (the definitive ad industry trade publication). Wenner started Rolling Stone magazine in 1967. Today, his Wenner Media empire also publishes US Weekly and Men’s Journal, amongst others. He is a certified legend and regarded by many in the publishing world as a genius and a visionary.
The interview was focused on Wenner’s view of the impact of the iPad, and tablets in general, on the magazine business. A few highlights of Jann’s wisdom:
Magazines that depend on photography, and design, and long reads, and quality stuff, are going to do just fine [staying in print]. Because in those areas there’s a real advantage to getting a print product and having something you can hold and that of course is portable and has a luxurious feeling and is comfortable and immersive and you can spend time with it and it’s organized for you.
[Reading a magazine on a tablet is] more convenient only if you’re traveling, if you’re away from home. Otherwise it’s still easier to read the physical magazine, which is widely available on newsstands, at airports, and everywhere. . .There isn’t much advantage as a magazine reader to read it on the tablet — in fact less so. It’s a little more difficult.
People cherish [print magazines]. There’s something to hold onto.
I have little doubt that Wenner is flat out wrong. Do I believe that we are racing towards the shuttering of every newsstand and the screeching to a halt of every printing press? Of course not. But do I think that, broadly, the medium to long term future of magazines is about print first? No way.
Wenner is failing to consider the whole picture, holding far too preciously to the beautiful quality of a printed page and missing the fact that his evolving consumer base is increasingly interested in a more complex value proposition, where beautiful, large format pictures are only one component. Indeed, if I’m sitting still in a chair looking for something to read, I too would rather read a paper copy of Rolling Stone. But consumers don’t sit still that much these days. Take me out of that static situation, and like an increasing number of people, I’d prefer the flexibility of having an infinite number of magazines at my fingertips, all available through one device – my iPad. Cling to a traditional definition of what defines quality in a magazine experience, and you will undoubtedly lose. Integrate a broader view of the consumer’s lifestyle, and you’ve got a shot at winning.
Consider a few examples where quality as traditionally defined has already lost:
- mp3s and iTunes: once Apple introduced the brilliantly integrated iPod & iTunes HW/SW experience, consumers quickly abandoned the superior music quality of CDs (mp3 files are in fact only 9% the size of the uncompressed format delivered on a CD). Today, most consumers don’t even seem to be aware that they are sacrificing audio quality when they listen to their iPod. As a result, CDs have lost more than half of their market share. Quality has lost, and portability, choice, and breathlessly convenient distribution have won.
- Social gaming: Farmville – are you serious? The functional and graphic experience of social games isn’t even in the same universe as a Halo or Call of Duty. At first glance, these games look like a throwback to the Atari era – no right minded investor would back these concepts on the basis of the games themselves. But the distribution model and social experience, driven by seamless Facebook integration, are dead-on perfect, and as a result these games don’t even compete with traditional games – they’ve invented and defined an entirely new entertainment category. The initial reaction of Electronic Arts and the other gaming big boys to Farmville probably echoed Jann Wenner’s reaction to magazines on the iPad, and now they’re paying the price. Score one for distribution and social.
- Netflix and your local video store: DVDs in the mail seemed preposterous to many when Netflix first launched its service in 1999. Why wait for a movie rental to arrive when I can just go to the ubiquitous local movie rental shop and get what I want right now? Blockbuster didn’t give them a second thought, and Netflix proceeded to absolutely nail the business model, understanding that consumers wanted more choice and there was real value in having a movie waiting for you in your home when you wanted it. Again, distribution and choice win. The immediacy and the lower total cost of the local video store lost.
- HD TV: Here’s one where you can make a case that quality has won. 10 years ago I wouldn’t have dreamed of spending more than about $400 for a TV. If I needed a new TV tomorrow, I can’t imagine I’d spend less than $1,000. HD signals plus LCD and Plasma screens have redefined the game in the TV market. And we’ve all upped what we pay for cable service – we need that HD signal to take advantage of our big fancy flat screens. The distribution model has stayed fundamentally the same, so technology-driven quality has won out.
But keep a close eye on TV, as a combination of tablet and handheld-driven video plus the evolution of social in the TV world starts to impact viewing. There are already millions of kids out there watching stuff on their small screens rather than the big screen in the living room – sacrificing video quality in the same way we sacrifice audio quality on our iPods. Portability and sociability are making rapid inroads, and we can expect that to continue. The next big innovations and winners in TV/video will likely surprise some purists in their ability to compromise quality in favor of an experience that is more flexible and richer along other dimensions.
By nature, I’m a quality-oriented guy. I still buy CDs to get the superior audio experience in my car and on my Bose surround sound system in my living room. But that quality focus led us to make one bad investment bet several years ago based on a belief that inferior quality plus superior distribution would not dominate a particular media segment. And I completely missed the social gaming phenomenon by focusing on the trivial, simplistic nature of those game experiences. Our investment in Flat World Knowledge reflects the way we’re increasingly thinking about the media business – flexible, portable, and social. I’ve learned my lesson, I hope, and will continue to work to think less like Jann Wenner and more like Marc Pincus. Here’s hoping you will to.