Business and Enterpreneur

Business and Enterpreneur (37)


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05 Oct 2017

We had a brief chance to greet Seth Godin at the MarTech Conference and his talk was at the conference was educational as well as entertaining. Seth Godin has written more than 20 books, is a known figure in marketing, and gives very informative talks. His message at this meeting was not about specific ideas to implement but rather as a call to action to do something about Marketing

Here are the key learning's:

  • Know who your customer is – The cat food can is labeled for the buyer and not the cat
  • Differentiate yourself in the marketplace from similar me -too products
  • Find a niche to target
  • You interrupt the customer so make the message educational or entertaining
  • Education will change dramatically
  • Be authentic and not just a sales person
  • Competition is good – it means that there is a demand

 

Read more at his website or blog.


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08 Jan 2017

How do you price an information or digital product? Lets imagine you think there is a business opportunity in cataloging all the pizza places in the neighborhood. This short blog is not about whether such a database is profitable or a viable business in the age of easy google information but rather how do you price such a product.

 

The interesting fact about any information product is that it costs significant money to create the product. Yeah, that is true of most products! But then, making a copy of the new product is relatively cheap. Or providing access to the product is relatively cheap. So lets say it costs you $10,000 to create such a database. Now, you have a customer who says they would like to have access to the product. What would a company sell the access to the database for ? It costs nothing to the company to provide access except some server or storage costs which are essentially negligible.

 

Would your company allow access for $1? Cheap!

Would it allow access for $10,000? Expensive!

 

So how do you come with the right pricing? The company cannot base the selling price based on the price that it costs to make a copy. $0.01. In an older economy, the way to price it was to say that it costs me $x to make the product and I will sell it for $x + 30% margin. All very well.

One complication would be that your customer can probably get the list for free from Google. In which case whatever you charge is a premium. Which means that your company needs to provide the data in some nice way, qualified, or with some value add that Google does not provide.

 

However, assume that in this case your company does not have any free competition but paid one. That makes it easy – you can price your company very competitively and hope to snatch some business.

 

One way that economist suggest is that the price should be based on what the market can bear rather than the inherent value…. Which means that charge as much as possible which the customer will pay… This does not sound right… but what do you think?


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07 Jan 2017

 

 

 

The capitalistic economy believes that competition is good and useful to keep prices “competitive” and good for coming up with new technologies and products. In the macro-economic area, that makes perfect sense.

 

However, from the company perspective, competition wastes resources. If your company is competing on price, rack space and just thinking more about innovation than thinking about innovation, then its wasting resources.

 

Consider the picture above in a grocery shelf for “Soy sauce” If a company makes soy sauce and assume it is coming up with what it considers a novel product. Soy sauce made from shrimp instead of fish. Do the purchasers care? How does it distinguish itself in the grocery shelf isle. The company will probably spend extra in paying extra in getting its product placed favorably in the center shelf or probably more in the end tab zone. It will then start spending money on advertising, offering sales, and in general getting them in specialty stores. They would then employ more sales people that would go and flaunt the product all over.

 

The competition factor makes it uneconomical for any company to come up with a new product that it will not be able to sell efficiently. The one way that the would be able to sell would be if they had a new product that no one else made and that they could market it efficiently to their customers.

 

How would you market the soy sauce for a company?


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06 Jan 2017

However, note that it IS regulated by the Regulation CF and there are several guidelines that govern. For example, there is limitation on investment in a 12 month period per individual – so you can invest about $2k to $100k (for high net worth individuals). Note this is not something that you do casually – this needs to be mediated through brokers or funding portals.

 

Other rules: You can only raise $1MM per calendar year through the crowdfunding portals. It does not restrict you from raising money through other channels.

 

The company raising money has to keep almost everything disclosed – any material information, description of financial stats, two years of financial statements and there are some tiered reporting guidelines from simple; tax statements to more complex like CPA review to a full audit.

 

Check out some crowdfunding portals as in investor or for your company which are regulated by the financial regulators:

 

http://www.finra.org/about/funding-portals-we-regulate

 

 

As investor, remember – these are early companies and most will NOT make you money.

As a startup – you have obligation to your investors and follow the rules.


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26 Jul 2014

2014-07-26-Car

There are several reasons why people spend so much time and money on cars. It goes beyond just transportation. If it was just transportation then people would buy the most efficient form of transportation. People spend their own money and time on making the transportation better and sometimes, even very showy.

Would scientists spend as much time as jazzing up the microscope? Or would they just use it so that it gives them better images? Or would they put paint on it and make it also look good?

Just wondering what is the difference. The passion and interest is probably the same with both the professions, so it has nothing to do with commitment.


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22 Jul 2014

2014-07-22-Do not target

The "know your customer" is an often repeated slogan that is repeated in almost all marketing books. Yes, it is very important to know your customer but do you know who the customer sells to ? If the customer is selling to another business, it behooves you to know that other business too. After all, the reason the customer is buying your product or service is because he would like to use it (directly or indirectly) to sell their own product.

It is also useful to understand people. The product or service that you sell is finally being used by a person and is not being used by a company. So rather than work with a company, work with people. They are the final users, if you understand the user then you will understand the need.

There have been various terms used to describe the "customer". Out of respect and need, some restaurants or hotels might say they are our "guests" rather than calling them customers. It does imply that calling them guests, makes them respect the customer much more...if that is true then every company should call their customer guests. A distant way of calling them is "client "but that is implied to mean that a client is buying advice or services that is customized for them or maybe it is something to do with repeat performance. This all may be semantics but it does matter when you see terms like "Target your customer". This implies that the customer is just a little bulls eye that you aim for so that you can sell them something. Maybe calling them a "guest" is probably more than just semantics and does show respect.


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09 Jul 2014

What are the key issues for a pharmaceutical advertisement agency ?

An advertising agency works with different pharmaceutical and Biotech companies to enable them to sell and advertize their product to the customers. There are about 200 major companies in the US and for many of them the digital media is critical, whether that is on the web or whether that is video, social media. Conventional media surprisingly also plays a big part for the agencies. MMM-online.com asked them about what would be the most significant challenging factor for the agency and their environment in 2014. And this is what they came up with:

The surprising fact is that many of them are growing and have typical issues involved with growth. Like all growing companies one of the major challenges is the ability to find good talent and the growing pains associated with growing the company.

One crucial factor that was missing was that they were not bothered by the Regulatory issues that plague the rest of the industry.


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30 Jan 2014

Motivating people is tough. There is even a hypothesis that states that it is impossible to motivate people or employees – you can only hire the pre-motivated employee. And how do you judge motivation in a short interview - that would be another challenge on a another blog.

Anyway, here is one perspective on the 3 drivers of motivation:

Autonomy: A person would like to do things at his own behest rather than the boss

Purpose: Work has to serve a purpose and not just be a source for money

Mastery: You do things because you want to learn something

Watch the video to find out more:

 


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30 Aug 2013

A quote from LEGO “ Innovation flourishes when the space available for it is limited. Less is more”

LEGO designers found that innovation thrives more when the boundaries are limited. In contradiction to what is thought of as complete “blue sky” freedom that is required for innovation, the LEGO designers found a big contradiction. A tighter definition of the requirements gave them a tighter definition and direction to enable them to be creative for a defined problem.

Also, be reasonable on expectations. Do not jump into any new business till you understand it.

Read more in the book “Brick by Brick” linked below.


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28 Aug 2013

Many companies train their employees and then tell them the rules about safety, work and other work related things but very few inculcate the values that are important to the company.

LEGO is one interesting company that set very clear values on what it expects its employees to do and believe about its products:

  • Limited in size without setting limitation for imagination
  • Affordable
  • Simple, durable and offer rich variations
  • For boys, girls in every age group
  • A classic among toys without the need of renewal
  • Easy to distribute

Values like these are the ones that every company should do…

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