This week, Congress is considering a bill that has the potential to greatly alter the distribution of information on the Internet. If you haven’t been following this, it is worth doing some research on it, as the implications for existing companies like Google and Facebook could be huge. It could also significantly impact start-ups if the threat of lawsuits takes off. Most importantly, as consumers we need to think through how this might affect how we consume and distribute information online. You can start your research here: http://americancensorship.org/. It’s obviously a one-sided take on the bill, but it identifies the issues that are at stake.
Dr. Jay Ebben’s Posts
I came home yesterday to find a three-page letter on my door from someone who would like me (and everyone else in our neighborhood) to hire his company to replace my windows this fall. I took a few minutes to read through it out of curiosity, and it spelled out five or six reasons why I should use his company to do this. It was a nice letter and well-written, but there was a big issue: customers, including me, don’t normally bother to read marketing material. We glance at it to see if it’s something we need before tossing it in the recycling bin (sometimes we don’t even do this, which is how a friend of mine recently ended up sending his mortgage payments to the wrong company). So, it’s extremely important that in that glance, the customer sees who you are.
The best marketing messages out there are simple ones. They say clearly and concisely what a business does, they are consistent with what the business actually does, and they don’t vary from medium to medium. Walmart is a great example: everyone knows that Walmart is “Everyday Low Prices.” Why? Because that’s the only thing Walmart ever says about itself and they back it up with how they operate at their stores.
The problem with long or mixed messages (think Miller Lite craft beers) is that if it isn’t immediately clear what a business does, customers won’t take the time to figure it out. We’re lazy that way. And we don’t want to go to a business that does everything for everyone; we want to go to a business that fills our specific need. To that end, great businesses know who their customers are and who their customers are not, and they only worry about serving the first group.
This is the issue that many small businesses are finding with using daily deals like Groupon. They tend to attract low-margin sales from customers who wouldn’t otherwise buy, while at the same time diluting their brand: “Come here because you can get a cheap meal, not because we have great food.” This is why I haven’t had as much of a problem as many people had with the recent moves Netflix made; sure, they alienated some of their DVD customers, but the future is streaming and it is clear this is where Netflix wants to be.
In my last post, I talked about the common perception that businesses are only worth pursuing if it involves something innovative or if it can be a multi-million dollar business. I actually think that with first-time entrepreneurs, especially younger ones, there is some wisdom in encouraging them to pursue less-complex opportunities. Because there are so many aspects of starting and running a business that can’t be anticipated, it is rare to see an entrepreneur “truly succeed” with his or her first venture. The ones that do succeed have products or services that evolve from the original concept.
In my experience, two of the key roadblocks that keep people from heading down an entrepreneurial path have to do with risk. The first is the risk that if they start investigating their concept, they will be told they have a “bad” idea. The second is what happens if they start the business and it doesn’t work out?
I am guest lecturing at the University of Ljubljana this semester and am helping with an introduction to entrepreneurship course. Yesterday after class, a student approached me and asked, “Why do good businesses have to involve innovation and new products?” I get this type of question often, and it appears to be fairly universal.
While innovation and new products are part of it, entrepreneurship is really about meeting market needs. The fact is that the market needs car washes and coffee shops just as much as it needs iPods. That’s not to underplay the importance of innovation, but students (and others) should be identifying opportunities based on trends and underserved markets, along with what is of personal interest to them, rather than tossing out business ideas that are not “unique” enough. It may take innovation or a new product to meet a market need, but it may not. And one way isn’t better than the other.