Marketing and the hardest thing in the world: Changing people

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Changing people’s choices is at the heart of all economic activity. If I offer coffee, I want to change the coffee of choice of my potential clients. But also I want to offer the very best coffee compared to all other competition, and I want to convey in a succinct and effective manner that the coffee (and surrounding experience with my product) is not only better than my competitors, it is the very best choice for my discerning customer.

All economic activity is based on choices. Sometimes it doesn’t seem like it because the choice at hand may be trivial, such as you are running out of fuel in your vehicle and you simply choose the very next gas station. Or it may not feel as an active decision since your choice was won a long time ago- you are simply ignoring all the other offers around you and acting on impulse- for example when you find yourself always buying Tide detergent while ignoring all other offers.

Because economic activity is based on choices, one could say that economic indicators are mass-human-behaviour indexes. Earlier this year when the winter in the midwest and eastern parts of the USA was brutally cold, a sharp drop in GDP (gross domestic product) for Q1 showed that no matter how big sales became, most rational humans were not going to trudge out of their homes and spend freely.

Whenever I think about marketing this concept of changing people’s choices comes to mind. It’s not just about messaging and images, its about modifying the behavior, the choice, the preference of an individual. And as an entrepreneur innately involved in producing the product which I am selling, I’m obsessed with making a product that truly delights my customer. A product that will realign their future buying choices because we so thoroughly met their need, satisfied their desire and delighted their senses.

Getting all this done means, I must change myself constantly. I must drown out the noise of thousands of things attempting to grab my attention and focus on the signal of those things that truly help me achieve my own goals.

PS: This post has taken more than 3 years to write. I wrote up the first few sentences back in 2011. Not because the concepts are unique, or terribly profound. It is more likely to do with the fact that I have grown enough to more carefully understand how I make personal choices, and what I need to do to surround myself with people and activities that continually help me make better choices. It guess it comes down to this: If you are talking about change, you better feel comfortable understanding how to change yourself first. I’m further down that path now than in 2011. And it feels great to be honest with myself.

From zero to hardware.

The last time I posted on here I was living in a different city, San Francisco. I was running a different company, Mobcart. And that company was in a drastically different market, wholesale consumer products than what I find myself today in- fashion-tech products.

It has been an amazing few years, and I am honored that all of our previous investors have followed us to this new journey.

While a part of me is sad that we put a pause on our previous endeavor (Mobcart) I am delighted to be focusing all of my time and energy on something so radically new, necessary, and unique. And when I mean radically new, I am not exaggerating. As the CTO in this new endeavor 90% of the time I am working with our team and advisors to formulate brand new technology, often from scratch. We have no venerated competitors of eons past to study or replicate. Thus its the thrill of a lifetime.

Formulating something from scratch is a very important part of my personal understanding of what creating a lot of value in a small amount of time is all about. The recipe for value creation, in my opinion, is quite simple:

  1. Do something radically different but sorely needed, in other words people want to pay for it.
  2. If its unique enough you (and your team) will eventually become THE world experts in the area, and thus you will create a competitive advantage in the market.
  3. Monetize on your knowledge as quickly as you can, which in my case is building and selling more physical products.
  4. Repeat by going deeper (or horizontally) into the original premise of what you are solving. Now that you are THE expert, build on that.

I am obsessed with this formula. Partly because I have an Economists mindset. But mostly because like the vast majority of humanity I’m not obscenely good at any one thing. By virtually compressing time and space and aiming to be the best at a single thing, a new thing, I can create value at a faster rate than usual.

Sharing in more detail how I go about this entrepreneurial journey is one of my small goals. It’s a personal goal focused on more effectively organizing my collective knowledge, and if the musings can help others I will be eternally delighted.Image

 

Clean and simple design is always key.

Blogpost from Mobcart.co/blog

Today it is with much happiness that we launch our re-focus on design with a new landing page for all mobs. The design is cleaner, sharper, and to us just plain nice to look at!

When we set out to build what today is called mobcart we had far more questions than answers. It was not even called mobcart. And I did not know half of the amazing individuals that make up our team. There was one thing however that we knew right from the start and have tried our hardest never to sacrifice- delight. Delight is a pretty common theme in the most successful startups because it is not a goal but a frame of thinking, a way of analyzing options and creating a product compass that transcends cost, time, energy.

Small but tedious and time-consuming details like beautiful design are a must if you want anyone to believe in what you have to offer, it is the way to initiate or re-enforce what should be a beautiful relationship between your firm and those you serve.

To find out more about mobacart, visit Mobcart.co¬†and checkout our new design below! ūüôā

 

Apples worth more than oil! AAPL at $500 billion is good for everyone.

It’s official. Apple has hit the fantastic $500 billion market share valuation. The answer of how it did this is perfectly apparent to me in the image above. Apple has clearly focused delivering very tangible and radically valuable products which it virtually makes mythic through exceptional design and care (such as their retail store design picture here). On the right we see an ad from a company in the old tech guard who has refused to change and continues to try a tired marketing message with terrible stock photography and photo-shopping!

Apple hitting these ethereal valuations is one of the best things that could happen to the global market system. Yes that is a huge statement to put out there but it has very basic numbers behind it which you can check out for yourself in the list below of the most valuable public companies on the planet. The numbers are from Financial Time’s Global 500 Dec 2011 list. The numbers clearly show that most of the top dogs are focused on extracting oil of out the ground, shipping it, and selling it. While doing this does takes a lot of technology the high valuations attributed to these companies are due to the scarcity of the stuff they are dragging up and not the direct value being provided to the end-user.

For Apple though, the valuation is closely tied to the speed of growth of the company, its ability to build something tangibly valuable enough that people will pay outsized prices for it, and ultimately because they have created the expectation and track record of making products that innovate faster and better than anyone else. I don’t know about you but I would love to see plenty more companies seriously innovating their way to success in all types of industries.

Why I am against SOPA/PIPA

The Economics: The theft of intellectual property is an extremely important issue to tackle. It’s pretty obvious that having some level of certainty that whatever unique product, idea, or media one creates can and will be protected from theft – this is the kind of stuff that makes economies work! However there is another and even more important ingredient that makes economies grow, innovation. The creation of NEW forms of media, new types of products and processes-often from the very components of things that already exist – is what innovation is all about and what ultimately defines economic growth or decline.

SOPA/PIPA are controversial because they straddle these two immensely important aspects of our economy. Owners of unique products, ideas, and content should be protected from theft so they have an incentive to produce and sell their goods, yet this protection must not be so onerous on society that the creation of new and improved forms of content/ideas/products is stifled- the economic reason why I am against these two laws. As they are currently written SOPA & PIPA destroy the initiative of society to improve on current intellectual products by creating awesomely heavy consequences for any modification or use of current content. In English terms: if you sing, tape, and upload to youtube your favorite Justin Bieber song, you and/or the site where you promoted your new song could be slapped with pretty tough criminal proceedings. Finally, as the laws currently stand, the copyright owners have overwhelming power to ask the government to block content and prosecute individuals. While this is a bit hazy, my sense is that A) companies and individuals will be treated as guilty until proven innocent regarding copyright infringement B) this gives copyright holders undue advantage in going after new content creators who, after a court proceeding, could have been found to be free of infringement. No use creating improvements when one can be shut down by large corporations and with limited due process.

The Social/Freedom of Speech aspect: Most of the western world became aghast when we learned how countries such as Iran, Egypt, Libya, and China (to name a few) clamped down on internet access when their citizens were sharing information that they did not like. Yet this very power is what these laws authorize our tax dollars to build, our government to have, and large corporations to control. In a world where a large majority of our communication is being done online it is imperative that our government not be given any ability to impede on our free speech or flow of information. It is fundamentally destabilizing to a democracy for the government to have the reigns on what we say and what we share online.

PS: Yes I am aware that these laws are focused on stopping access from content outside of the US, however, stopping content from outside is just as easy as stopping content from the inside. Even so, why should we give the government the ability to shield us from information that comes from other countries?

ps2: I will be joining the Silicon Valley protest against SOPA, my very first protest ever. If these laws pass they could materially affect my very own startup! No bueno. The protest info can be found here: http://www.hackersandfounders.com/events/48317262/

Honest learnings in building a startup.

I recently joined Letslunch.com, a service that randomly matches me with interesting individuals within a pre-determined mile radius. And while getting lunch out of the office can often be a treat joining and sticking to letslunch.com has been a huge lesson in discipline and honesty for me.

I am naturally open to sharing ideas, asking questions, and meeting people with passion and experience in a wide range of areas. But as an entrepreneur I honestly hate having to drop everything that I am doing and trekking out to a new restaurant to meet a complete and absolute stranger. Yet it is this forced extraction from what I believe is a priority that makes spontaneous business lunches beneficial. Not only do I have to re-asses the importance of what I am working on, I need to be honest with my new acquaintance about where I really am in my business. And while no business secrets (there are few, if any!) are shared there is something therapeutic in explaining to someone new where your company is. It is fertilizer for an aha moment. A time to see the obvious by letting someone who is not intimately involved re-iterate it.

In one lunch in particular I was sharing with my fellow entrepreneur how I was sensing that we had spent too much time on an important, but not ultimately critical, product at our company. Had I spoken to myself in the mirror I still would have concluded that we were 100% on the right track, yet sharing the same facts with someone outside of the decision making bubble really helped synthesize the correct and undeniable answer which was right under my nose the whole time.

Letslunch is not for everyone, and I suspect the value derived from it is highly influenced by the type of industry that your locale is focused on. But if you want to be taken out of your safe zone in less than an hour, try it out.

 

PS: Yes, I know, “learnings” may not be a dictionary approved word. It soon will be though!

Beware: The bad things of building a startup.

What Startup Stress Feels Like

There is one specific piece of advice that has stuck with me since I arrived in Silicon Valley; a piece of advice that I heard from the founder of 500 startups Dave McClure who very publicly and honestly espouses the fact that building startups is all about pain, suffering, and sacrifice. He is 100% right.

Building a startup is about sacrificing the vast majority of activities, and to some degree people, that are dear to you for the purpose of building something really great (or what is hopefully really great). It is, or at least should be, a very strategic analysis encompassing an honest review of your capabilities and experience, the marketplace that you are entering, and the people that believe in you enough to support you in a myriad of ways as you trek into the unknown.

So with no specific order of importance, these are some of the things you should consider before dropping everything and almost everyone in your current world to jump onto the startup train in Silicon Valley.

  1. Stress. Be prepared for amazing amounts of stress. Choosing this lifestyle will make uncertainty your most common emotional state, and the physical by-product of this emotional state is anguishing physical stress. While a bit funny in retrospect, I remember my co-founder telling me that he had “knots and butterflies” in his stomach from all the stress soon after we arrived here. I did too. The truth is that even if you are funded (ie you have some time to figure out how to achieve success) the awesome dark clouds of failure are always floating a few inches above you and never leave you alone. They constantly scream at you to quit, forget, and accept defeat. And unless you focus on worrying about what you CAN change and disregarding what you CAN’T, it will be hard to survive out here. I speak from experience and with great humility because the jury is still out on me.
  2. Your capabilities. While it certainly varies from person to person, make sure that in your gut you understand and have experience with what it is to convince people on a new idea, start working on it, finish it, and then optimize it. If you don’t have much experience with doing any of the above you will find the entire startup experience 100x harder than you originally envisioned.
  3. The opinion of others. About 14 months before I launched my current startup I began to pitch my idea to a few trusted friends and advisors. Even though what we are working on today is markedly different from where we began, I started doing the grunt-work of testing my hypothesis long before choosing to bet my entire life on it. This process proves three things: that you can sell an idea, that your idea has legs, and that your idea is simple enough that both friends and experts can quickly grasp it. While it may sound surprising, some of the very best and most critical feedback will not come from experts but from those closest to you, they can sense BS so much faster than anyone else.
  4. The marketplace. Get to know your competition really well. Make sure that what you are planning to build is absolutely and positively better than what your potential competitors have to offer, and more importantly run the numbers to make sure that its also cheaper. Anyone can make a car last forever, but almost no-one will be able to afford it.
  5. Be billion dollar honest. Truth is you probably don’t have a billion dollar idea. Almost no one does. In fact, while I originally thought our startup had a 100% no questions asked multi-billion dollar idea, I have since run the numbers and realized that while many billions of dollars in sales is absolutely possible, it is also highly unlikely. If you can live with the fact that you will NOT be the next Steve Jobs, or Larry Ellison, and are still as excited about going through hell, have friends and experts who recommend it, and a team that is as foolhardy as you… then you probably should look further into it.
Interesting update: Elon Musk, a hero in my book, today mentioned that “Building a startup is like staring into the face of death” during SF techcrunch disrupt ’11. He is soo right!

14 Things I learned in my first 45 days in Silicon Valley

I recently moved to Silicon Valley to attend an exclusive session of the Founder Institute led by the founder of the program, Adeo Ressi. The past few weeks have been some of the most intense in my entire life, and although I have never been poorer than I am today I have also never been happier and more satisfied. The experience has been extremely intense with over 60% of the entrepreneurs dropping out or being kicked out, and it is in the midst of this exceptional time that I have been able to collect a few thoughts on the legendary area and entrepreneurs in Silicon valley.

Here’s my list:

  1. Building a single company is not cool. What is really cool is building 7, IPO’ing 1 or 2, and selling at least 2 more out of the 7.
  2. This place is extraordinarily productive because people glorify failure as phase, not a dead end. It is just another step on your ladder to success.
  3. However, failure and incompetency sting deeply. Especially when you have to fire people.
  4. Some people live on a “26 hour day”. No, they dont stretch the space and time continuum, they simply work for 26 hours and sleep for 8.
  5.  Most ideas suck. Really, they do. And to make them suck less you have to work harder and smarter than you could have ever imagined. Few people do this, and that is why most ideas suck.
  6. Customer development is far more important than business development. One is focused on selling what you think you should, the former is focused on figuring out what customers really want to buy.
  7. Working with fellow entrepreneurs is extremely freeing. Sharing wisdom, failures, ideas and criticism is a must if you are to be taken seriously amongst your peers. You don’t know everything, and neither do they. Face up to it and be willing to disagree amicably. It’s actually a really good thing because you will learn what you don’t know, you don’t know.
  8. The BART metro cars stink. Yes they smell bad. Who thought soft cloth seats and supple carpet in public transportation was a good idea?!
  9. Its hard to find anything architecturally inspiring in the valley. I miss Chicago.
  10. Overachieving is barely baseline around here.
  11. Venture Capitalists are 10X more evil and bloodsucking than I ever imagined. And I’m sure my opinion of them is probably 10X higher than it should be.
  12. A co-founder is key to success. Only idiots go at it alone, they may go fast, but they wont go far.
  13. Raising money is tough. Doing so feels like a mix between being a street pauper, superman, a stripper, scrooge, and Tim Geithner.
  14. Being an entrepreneur sucks. What keeps you going and excited is adrenaline akin to the same thrill as jumping out a plane when you skydive…. your brain says “Oh shit I’m going to die…” and you counter with “wooohooo this ride is beyond this world… I will survive and try all the tricks on my parachute to survive because there is no plan B”.

The startup pre-accelerator gap, oddly enough, a lot like bitcoins.

If you’re up with the tech times, you have for sure heard of Bitcoins.¬†These are encrypted virtual coins that can be ‘mined’ by having some simple software on your computer solve complex algorithms. The funny thing about this virtual currency is that there are pre-determined limits to how many coins are mined within a specified period of time. In simple words, the more people/computers there are mining these coins the harder the algorithm becomes, thus stabilizing the expansion rate of the currency overall. (Hah, if the Fed actually this something like this, oil prices would be down at least 60%).

So what do Bitcoins have to do with startups and what I call the ‘startup pre-accelerator gap’? In simple terms, the more there are of them, the harder it gets for any one of them to get help and thus succeed. Having a great startup team and a killer idea is no longer good enough: new startups must demonstrate specific traction in their field of focus, as well as some very big picture and long-term planning that is hard to come by without some mentorship help.

The incredible number of applicants at accelerator organizations is a perfect example of how the difficulty is increasing in the startup space. A few weeks ago I¬†spoke with Brad Feld, one of the founders of TechStars,¬†an incredibly¬†influential¬†and respected accelerator program. He shared with me that over 1,200 applications had come in for TechStars NYC program‚ÄĒthat is 1,200 applications for only 10 open slots, or about an .00833% acceptance rate!!!

The technology startup scene is an exciting one these days. And while many are calling it a bubble, and are quite right for doing so in view of the disastrous decisions of the last tech explosion in the late 90’s, the fundamental weaknesses “enjoyed” back then are simply not here anymore. If anything, the increasing difficulty for startups to get funded or even accepted at accelerator programs is ensuring that the quality of ideas and teams is maintained to a certain degree. Of course, as a generally glass half-full guy, I believe that far more awesome teams and ideas are out there than the limited resources on the startup accelerator scene can handle.

Know thy customer! A 25 year old Sarah, Tim, Charlie, Joe, and Chris at a time.

Yes, the above image is only of white people. But that’s not the point. Those 5 individuals could possibly be my customers. The way they dress, who they hang out with, and even what brand of headphones they buy will be key indicators of who exactly I am going to be selling to.

The problem is, right now, I dont know any of their names. I don’t know where they live, what car they drive, or where they like to eat. This is a problem, because in my plans I am expecting these people to 1) automagically like my product 2) be willing to go out of their way to use it 3) actually find enough value in using it to pay to use it. And I plan for them to do this not just once, but as a lifestyle. That is a very tall order.

My ideation focus for my current company, and the other two that I am required to work on will be in effect an exercise of mining exactly how I can modify my plans to ensure that I am providing something of value to my customers. This will require a thorough vetting of who they are, and how they currently solve the problems that I aim to solve for them faster, better, and cheaper. Ultimately, it is a decision making process where I relinquish ideas of who I want to sell to, and replace them with who will actually buy my product!

Based on all the mentorship feedback that I have received thus far on my project, these customers exists. But just as all songs are not liked by all people, I must understand what I must say, and how I must say it to attract a specific group of customers who will LOVE my product, USE my product, and EVANGELIZE the use of my product.

This is what building a company is all about. Not really all about coming up with a great idea, but taking very simple ideas and fanatically solving the problems of real people. Then, and only then, can I really take a step back and understand who is the next batch of customers whom my company can address.

While simplistic in nature, understanding an addressable market requires answering a few complex questions such as:

  1. Is my product easily understandable? In other words will it take 10 seconds or less for my target customer to want to try me out? If I can’t clinch customers at 10 seconds, I can thoroughly understand what not even a 1 minute VC pitch will matter.
  2. Does the way my customer currently solve their problem troublesome enough for them to switch? This is huge. Most startup ideas are trying to solve a problem that only marginally needs solving.
  3. Is the pain/gain equation strong enough that my targeted customer is willing to pay for my service/product?
  4. Once I have answered the above and tweaked my model to meet the above customers needs… I need to figure out if I have dwindled my addressable market to just a few statistical individuals, or still a broad range of the population.
I look forward to the mentorship and criticism from my fellow founder peers, and particularly from the world-class entrepreneurs who are dedicating their time and energy to help me succeed. They have seen the other side of the moon and know how to get there.