Signum sine tinnitu--by Guy Kawasaki

Art of the Start Online Video

A few weeks ago I provided a site where you can see my Art of Innovation speech. My buddy, Mike Johnston, just showed me that my Art of the Start speech is online here.

The Art of Innovation is a speech for any stage of company that is trying to create and marketing innovative products and services. The Art of the Start is for the startup stage--but for anyone starting anything.

Here is a PDF of the presentation that I used:

Download Art.pdf

Just in case you're interested, you can get the book by clicking here.

Big oops: I thought this was the entire speech. It's just two minutes and thirty-seven seconds--during which I explain the meaning of meaning. Sorry! There are several trackbacks, or I would delete this entry.

I'll try to find the entire speech online somewhere.

The World's Shortest Marketing Plan, Version 2.0

Two blog postings opened my eyes about marketing. The first deals with the new 4Ps by John Sviokla and Antony Paoni called "Marketing Remix."

The second is a very useful approach to marketing planning (what a great oxymoron) by Kelly Odell called "The World's Shortest Marketing Plan."

With both party's permission, I was "inspired" by their thoughts to create a version 2.0 of Kelly's marketing plan. I've seen a lot of marketing plans in my day--99.9% of them were way too long. This length is perfect for most products and services.

Click here to get the document. It's a Word document so that you can fill in the cells with your answers.

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The Top Ten Lies of Marketers (with bonus)

By popular demand, here are the top ten lies of marketers. Actually, it was too hard to stop at ten, so this list is a dirty dozen. As my mother used to say, "How can you tell if a marketer is lying? His lips are moving."

1. "Our PR firm says it can get Walt Mossberg to review our product." It's not clear who is dumber: your PR firm for saying this or your marketers for believing it. Walt reviews about fifty products a year, so the odds are not good that yours will be one of them. Certainly, no PR firm can guarantee a review.

2. "If we can finish the product we'll be invited to demo at Demo." Let's say that your engineers are running behind schedule. (It's not their fault, of course--it's the marketers for not specing the product properly, but I digress...) A marketer rushes into the engineering department to announces that if the engineers could finish, then your CEO can demo the product at this premier technology showcase.

If the person who runs Demo, Chris Shipley, would schedule more Demos, there would be a lot more innovative products in the world because marketers would have more opportunities to tell this lie to engineers.

3. "We have a really good strategy to get A-list bloggers to write about our product." Yeah, as if it's that easy and as if all A-listers are alike. Why some A-listers even claim that you don't need to suck up to them and ply them with freebies like wine. The best strategy has two elements: (a) a great product and (b) sucking up. How convenient: one role for engineers and another for marketers.

4. "We're confident that our product is extremely viral." Steve Jurvetson  best defined virality as "the involuntary adoption of a product." The key word is involuntary--for example, in the early days of instant messaging, ICQ was a viral product because if you wanted to instant message, you had no choice but to install ICQ. Any decent product can generate word of mouth advertising, but very few products are truly viral.

Anti-example: Have you ever wanted to post a comment to an MSN-hosted blog only to be confronted with the message that you have to sign in with a Microsoft .NET Passport? That's not virality--that's innoculation.

5. "Conservatively assuming that each user only tells three additional people, we will have an installed base of five million by the end of the first year." Do you know why we've heard about MySpace and FaceBook? It's not because it's easy and commonplace to amass millions of users. It's because it hardly ever happens. Whenever a marketer makes a forecast like this, add one year to the timeline and divide the installed base by 100.

6. "BigNameCompany is really excited about partnering with us." As long as you understand that the most realistic definition of "partnering" is "a relationship that lacks a business model," this lie can't hurt you too much. Especially because it's unlikely that Big Name Company is really excited, so nothing will happen at all. (See next lie)

7. "Jane Doe, vice president of biz dev of Big Name Company, isn't returning my phone calls or emails." Actually, this isn't a lie. It's the truth. It's just that this nugget of truth follows weeks of lies about how excited Big Name Company is to partner with you. Now, all of a sudden, it's not the marketer's fault that nothing is happening--it's simply that Jane Doe isn't returning his calls or emails.

8. "Conservatively, the total addressable market for our product is $50 billion." In seven years of dealing with venture capitalists including four years of being one, I've never met an entrepreneur who wasn't addressing a $50 billion total addressable market. Suppose you are starting a sushi restaurant. Is the total addressable market the grand total of what Americans spending eating out per year? I don't think so.

9. "This is how we are going to position the product." This is a lie of naivete that indicates a lack of real-worldliness and experience. You might try to position your product in a certain way, but ultimately customers, not you, position your product. You take your best shot and then you see how customers react--if, frankly, they react at all. But, at the end of the day, you're hardly in total control of positioning.

10. "We need outside consultants because we don't have the bandwidth to do all the marketing ourselves." What Bangalore is to engineering, "outside consultants" is to marketing. Much as most engineers hate to hear this, the two professions have lots in common including this fallacy of outsourcing. Nine marketers can't produce a baby in one month any more than nine engineers can.

11. "The PR firm (ad agency, whatever) that we interviewed really loves what we're doing." Not to put too negative a spin on this, but prostitutes tell customers that they'll love them "a long, long time"--which is about as true as this lie. The severity of this lie depends on what phase of the bubble you're in. If it's a frothy time, then you might have to convince a PR firm to take you on as a client. If it's a down cycle, then getting someone to love you isn't that hard.

12. "We found a rock star to join our marketing team." There's nothing like setting a person up for failure by creating excessive expectations. I've spoken to event managers, and they tell me that rock stars make all kinds of ridiculous demands like painting the backstage walls purple for Prince or punching a hole in a wall so that another performer could walk directly to the stage. Forget the rock star: Hire good, bright people who want to prove themselves, not live off the past.

Addendum:

"All we need is a 1% market share to make this work." (Peter Kim). How could I forget this one? Perhaps because I try to block this very common lie out of my consciousness.

"Our product is so unique that it has no competition." (Maura Welch). It has no competition for two possible reasons: (a) You're clueless and don't know how to use Google; (b) there's no market for it so no one else is dumb enough to do the same thing.

Here's a good counter balance by Alain Thys called, "The Top Ten Truths of Real Marketers"

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The 120 Day Wonder: How to Evangelize a Blog

I know a fair amount about evangelism and a little bit about blogging, so I've combined the two in order to provide some insights into the evangelism of a blog. Granted, I've only been at blogging for 120 days or so, but marketing is marketing, right?

1. Think “book” not “diary.” First, a bit of philosophy: my suggestion is that you think of your blog as a "product." A good analogy is the difference between a diary and a book. When you write a diary, it contains your spontaneous thoughts and feelings. You have no plans for others to read it. By contrast, if you write a book, from day one you should be thinking about spreading the word about it. If you want to evangelize your blog, then think “book” not “diary” and market the heck out of it.

2. Answer the little man. Now that you're thinking of your blog as a product, ask yourself if it's a good product. A useful test is to imagine that there's a little man sitting on your shoulder reading what you're writing. Every time you write an entry, he says, “So what? Who gives a shiitake?” If you can't answer the little man, then you don't have a good blog/product. Take it from someone who's tried: It's tough to market crap, so make sure you have something worth saying. Or, write a diary and keep it to yourself.

3. Collect email addresses. The first piece of advice that I give authors who want to evangelize their book is to accumulate email addresses. (The second piece of advice is to start blogging before the book comes out.) When I launched The Art of the Start, I sent out email to 95,000 people who had made contact with Garage in the past nine years by attending our conferences, submitting business plans, ... whatever. Also a team of student interns compiled a database of every entrepreneurial organization on the planet for me.

When I started this blog, I sent out 10,000 email announcements. (I didn't use the entire Garage database because I thought that was too tacky even for me.) You may not have the ability to collect email on this scale but collect them nonetheless. For example, when a bozo includes you on a large carbon-copy email, mine the addresses. However, don't buy address lists or spam people (I define "spam" as sending email to someone who has never sent me one) because for email promotion to work, you must know the recipient--or be known by the recipient.

Two more email related recommendations. First, when you answer an email, stick in a “by the way” that mentions your blog. (The only email responses that I send that don't make reference to my blog are the ones that are responses to an email about my blog.) Second, your email signature should contain your blog address.

4. Collect links for blog rolling. This is something I wish I had done on day one, but I was totally ignorant of this linking thing. If I had to do it over again, I would look for all the interesting blogs that cover similar topics to my blog. Then, on day one I would have blog rolled them all and ensured that  Technorati pinged my blog, so that the bloggers  might find out that I existed. I use Blogrolling.com to create my current blog roll.

Now that I understand how linking works, I use NetNewsWire and Endo to look for new links to my blog, and I find sites that I would have never seen were it not for their links to my site. Basically, you want bloggers to find out about you because you linked to them. You never know what they might do for you.

5. Scoop stuff. There's a very interesting honor system in blogging. Suppose Blogger A finds an obscure article and posts it to his blog. Blogger B reads about it on Blogger A's blog and links to it. However Blogger B doesn't link only to the article; she also links to Blogger A to give him credit for finding the article.

This means that if you hustle and scoop stuff, other bloggers will link to you. For example, when I found and publicized the Stanford Social Innovation Review article by Jeffrey Pfeffer and Bob Sutton, many other bloggers linked to my blog, not just the article itself. I was surprised by this. Bottom line: if you want lots of people to link to you, read voraciously and find cool stuff first. As a Japanese philosopher once said, "Eat like a bird, and poop like an elephant."

6. Supplement other bloggers with a followup entries. Read the blogs of the top fifty or so bloggers (using Technorati's ranking is fine) and see if you have in-depth knowledge about their topics. Then instead of leaving the typical, dumb shiitake comment (“I think you're an orifice who shouldn't make money recommending products that you've invested in.”), craft a real essay that complements the blogger's entry.

When someone does this for my entries, I want to get down on my knees and thank God because it's less stuff that I have to write. Look at this example that was a followup for my entry about recruiting. I don't know about other bloggers, but one of the biggest challenges I face is feeding the content beast. If you can help me feed it, I'll gladly link to you and give you publicity.

7. Acknowledge and respond to commenters. Only good things can happen when you read all the comments in your blog and respond to them. It makes commenters return to your blog. This, in turn, makes commenters feel like they are part of your blog's community which makes them tell more people to read your blog.

(I'd like to do this better, but I've created a monster. I don't have any quantitative evidence, but it sure seems like a I get large volume of comments to my entries. There are days that I simply can't keep up, so forgive me.)

8. Ask for help. If you are providing value in your blog, don't hesitate to ask for your readers to help. If you don't ask, you don't get. You don't have to be as blatant as I am in the desire to climb Technorati's ranking, but in a perfect world, you provide something in your blog and your readership will want to reciprocate by helping you spread the word.

9. Be bold. I'm not saying you should intentionally piss other bloggers off, but if you can't speak your mind on your own blog, we might as well all give up and stay on the porch. This is a fascinating thing about blogging: Even when people torch you, they link to your site. I would have thought that you don't link. My logic was: Why give someone you torched any exposure?

10. Make it easy to join up. A blogger named Steve Nipper showed me the list about this. I had no idea what Feedburner and FeedBlitz did until he  told me about them. The bottom line is that you should enable your readers to get to your blog in multiple ways. It's no different than distributing physical products through multiple channels. 

May you use this knowledge to rise in Technorati and make the A List. Just say hello as you pass me by--someday I'll be sucking up to you.  :-)

PS:

Here are some other resources that I found:

1. From reading Christian Blog Evangelism:

• How to Build Traffic to Your Blog by Priya Shah
• Promoting Your Blog

2. From readers:

• http://www.squidoo.com/blogstarter.    The author of this, Rajeesh Setty, also has a very interesting (and free) ebook here about personal branding.

Women in the Workforce: The Importance of Sex

My buddy Bill Meade pointed out this article in the Economist to me:

http://snipurl.com/womenworkforce

Very interesting and eye-opening about the economic power of women. The Economist provides a day pass for people who aren't subscribers.

The first paragraph of the story is:

EVEN today in the modern, developed world, surveys show that parents still prefer to have a boy rather than a girl. One longstanding reason why boys have been seen as a greater blessing has been that they are expected to become better economic providers for their parents' old age. Yet it is time for parents to think again. Girls may now be a better investment.

Book Review: Influence--Science and Practice

There are some books that are “must reads” for entrepreneurs; some for marketers; some for salespeople; and some for programmers. And then there are a handful that everyone should read. IMHO, one such book is Influence--Science and Practice by Dr. Robert Cialdini, a psychology professor at Arizona State University.

This book provides insights that you can use to make business and personal decisions. If you think you already know everything there is to know about influence, take this test. Frankly, I would be astounded if reading this book doesn't make you a better (business) person.

Here is a short interview of Dr. Cialdini that provides a sample of his concepts and research.

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Question: What is your definition of influence?
Answer: Influence means change-creating change in some way. Change can be in an attitude; it can be in a perception; or a behavior. But in all instances, we can't lay claim to influence until we can demonstrate that we've changed someone.

Question: Who has influence?
Answer: We all have the potential to be influential, although some of us make more use of it than others.

Question: How do we get it?
Answer: The ability to influence is not simply inborn. We can learn to become dramatically more successful at it. For centuries, the ability to be influential and persuasive has been thought of as an art, but there's also a science to it. And if it's scientific, it means it can be taught. It can be learned. So we all have the potential to become more influential as a consequence.

Question: Are there any ethical concerns surrounding the use of influence to get people to say yes?
Answer: Because the principles of influence can be so powerful in causing change in others, we have to consider our ethical responsibilities in the process. Fortunately, the way to be ethical in the use of these principles is the same as the way to be profitable in using them:

Always be sure to influence another in a way that ensures that you haven't damaged your ability to influence this person again in the future. In other words, the other person must benefit from the change you've created. We can do this by harnessing one or more of the six universal principles of influence:

• Reciprocation. People give back to you the kind of treatment that they have received from you.
• Scarcity. People will try to seize the opportunities that you offer them, that are rare or dwindling in availability.
• Authority. People will be most persuaded by you when they see you as having knowledge and credibility on the topic.
• Commitment. People will feel a need to comply with your request if it is consistent with what they have publicly committed themselves to in your presence.
• Liking. People prefer to say yes to your request to the degree that they know and like you. No surprise there.
• Consensus. People will be likely to say yes to your request if you give them evidence that people just like them have been saying yes to it.

Just because there are six optimal approaches to influence doesn't mean that everyone uses them optimally. In fact, in my own research, I was able to detect three kinds of influence practitioners. There are bunglers of influence; there are smugglers of influence; and then there are sleuths of influence-the detectives of influence.

• Bunglers are the people who fumble away their chances to use the principles in a beneficial way, either because they don't know what the principles are or because they don't know how to engage them properly. These people are always dropping the ball when it comes to the influence process.
• Smugglers, on the other hand, do know--quite well--what the principles are and how they work. But they import these principles into situations where they don't naturally exist. An example would be a salesperson who pretended to be an authority on a particular computer system in order to get a customer to buy it. Although the smuggler's approach often works in the short run, it's deadly in the long run. Because only one personOthe smugglerOwins. The customer, who gets fooled into buying the wrong system, will be unhappy with it and will be unlikely to ever return to that salesperson or dealer for future business.
• Sleuths are more knowledgeable than bunglers, more ethical than smugglers, and overall more successful than either. They approach each influence opportunity as a detective, looking to uncover and use only those principles that are truly part of the situation, and that, therefore, will steer people correctly when to say yes.

For instance, if our computer salesperson genuinely was an expert in a particular type of system that a customer was interested in, it would be foolish not to share this information with the customer right at the outset. And if the salesperson had been good enough as a detective to find out that that one particular system had a unique feature that no other system had, he or she would be a bungler not to say so and make use of this scarcity principle that was a natural part of that situation. It's not sufficient to know what the most powerful principles of influence are. We have to train ourselves to search every influence situation for the principles that reside there naturally, and to use only those principles. That way, we ensure an exchange in which both parties profit.

Question: What's the most important thing in making a request?
Answer: Oddly enough, often the most important thing in making a request is not in the request itself. It's what you do before you make that request. This is a little secret that's understood very well by the most accomplished, influential professionals, the people who I call the influence aces. I've found that those who were most successful at getting what they asked for work very hard at first arranging a favorable psychological environment for their request. After all, even if you've got a perfectly wonderful idea to offer, many people won't bother so much as to listen to your offer unless you've first done something to make them like you, to see you as an authority on the topic, or to feel a commitment to your ideAnswer: So by first establishing an environment of liking or authority or commitment or obligation or scarcity or consensus, you give your request the benefit of falling on fertile, rather than stony, ground.

Question: Please give an example of how to apply one of these principles of influence in a way that is effective, ethical, and enduring.
Answer: Let's take the first principle I listed: reciprocation. People want to give back to you the kind of treatment that they've received from you. For a manager, this rule is simply a goldmine. We all know the value of having positive attitudes and personal relationships in the workplace. Now think of the advantages to a manager of understanding the rule of reciprocation in the achievement of those goals. Because people give back what they've received, it means that you can increase the level of whatever you want from your coworkers and employees by giving it first. If you want more information, you provide it to them. If you want to create a feeling of trust, you offer it first. If you want to foster a cooperative attitude, you show it first. By acting first, you get to set the tone for the type of workplace relationships you want.

Now let's take information sharing as an example. It's undeniably true that in any business, a manager will be able to plan, execute, and complete tasks more successfully to the degree that he or she has access to the necessary information.

By providing to others the amount, the level and the quality of information that he or she wants, the manager will get the amount, the level and the quality of desired information in return. And it will flow naturally. No need for any arm-twisting or surveillance because as the research clearly shows, disclosure is a reciprocal thing.

I did some research in the airports of our country to see how one particular organization, the Hare Krishnas, use this principle to get people to give them money when they don't know anything about this organization-and don't especially like this organization. They had hit upon a strategy that worked remarkably well. Before they ask you for a contribution, they give you something. It can be a book; it can be a flower. In the most cost-effective version, they walk up and they hand you a flower or they pin a flower on your lapel, and you say, I didn't ask for that. Here, take this flower back. And they say, Oh no, no, no. That's our gift to you. However, if you'd like to give a few dollars for the good works of this society, that would be greatly appreciated.

I saw them work for an entire day in the O'Hare Airport. And what I saw was a remarkable testimony to the power of this rule that people feel that if they have received, they can't just walk away without giving something in return. It goes against all our upbringing. Remember our teachers told us, our parents told us, “You must not take without giving in return.” We have very nasty names for people who take without giving in return. We call them moochers or takers, or, as somebody at a conference where I was speaking said, teenagers. Nobody wants to be thought of as immature or a moocher or a taker. What the Krishnas learned was that if they could get somebody to accept something, then that person would feel an obligation to give something back.

What the Krishnas are doing is giving people something that they don't want, it has no value for them, in exchange for something that does have value: their money. And that has created an immediate success for the Krishnas and a long-term disaster. Did you know that they declared bankruptcy in the United States?

Question: Why?
Answer: Because once people have encountered this kind of ploy-this exploitation of the influence principles, they don't want to deal with this person again. If people believed that they received something of value, then they feel that you're entitled to get something in return. You've established a relationship with them. A relationship that leads to referrals, leads to repeat business, good word-of-mouth advertising and so on. And that relationship is a very positive lever for future profit.

Question: What is your definition of ethical influence?
Answer: The ethical approach to influence is to find one or more of these six principles that we talked about. Find something that people would value, give it to them, and they will want to give you something of value in return. They will want to return that business. If they've seen that you've done a good job, then they will want to have a relationship with you-a continuing relationship.

Identify what it is about what you can offer that your competitors can't give them. It may not be any one single thing. It may be a bundle of opportunities or benefits or services that you can provide-especially maybe customer service. Tell them what it is that they can't get anyplace else. If you can find this and show that to them, they'll want to move in that direction because that will be beneficial to them.

Let me give you one quick example that should finish our discussion of reciprocity. Something that we've already alluded to: People feel indebted to those who give to them, and information is one of those things you can give to people.

Let's say a customer owns a trucking business or a dry cleaning store. You read an article in a newspaper or in a magazine about how the trucking industry is working or the dry cleaning industry is working in another city like Cleveland. You need to cut that out and send it to your past customer. That's a way of saying, Here, I thought you'd be interested in it. Here's some information for you.

Now, he's going to know two things about you as a consequence. First, you care about them. Second, this person is interested in improving my business. So what does the rule of reciprocity say? I have to be interested in improving his business.

Question: What are some ways to recognize and construct elusive moments of influence during which people are particularly receptive to requests?
Answer: It's what you do beforehand. So, for example, there is a moment of power that you are afforded immediately after someone has said, “Thank you” to you. You need to fill the moment with a request for a testimonial or a referral, or some sort of written commitment that doesn't allow that honest recognition of your good work to evaporate into the air. You deserve it.

In that moment, you should say, “Well, I really appreciate that. If I have other customers in your situation who have the same kind of housing floor plan or same kind of situation, I would love to be able to demonstrate to them that we do a good job in these kinds of situations. Would you mind writing me a note to that effect or sending me an e-mail?” Or, “Would you be willing to receive a phone call from a customer who is kind of wondering, and tell them what you think?” And at that moment after they've said, “Thank you,” they just can't say, “No” after they've just told you that you did a wonderful job.

It's more than just recognizing that moment. It's getting a commitment to that thank you. There's something that you need that's more than a verbal acknowledgment that you've done well. You need it in writing. People live up to what they have written down. And that's the key. That's the key to leveraging that thank you into the future, getting a commitment to it.

And the more public that commitment is, the better. There was a study done on college students, who as freshman, were having trouble in their first year with their study habits. They weren't doing very well in their classes. And they went into a particular program that was scheduled to help their study habits. One group made a commitment to study at regular and specific times, in a systematic way every night. And they kept that commitment in their heads. Another group wrote it down and kept it private. Another group wrote it down, and showed it to everybody else in the room and said, “Here's what I promise that I'm going to do.”

The first two groups didn't improve at all on their next test. But in the group that showed their public commitment to everybody else in the room, eighty-six percent got one full grade better and moved from a C to a B or a D to a C on the next exam. Eighty-six percent versus virtually nothing from the other groups, because they made those commitments public. And that's one of the advantages of written commitments.

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He also answered this question about blogging:

Guy: A blogger says to me, “I'll link to you if you link to me,” and then he links to me. Under the rule of reciprocation, I should link to him--or at least do something nice back. Am I obligated to link back if I think his blog is not that great?

Dr. Cialdini: Under the rule for reciprocation, we are obligated to give back to others the form of behavior that we have received from them. However, we have some latitude in determining what we give back. In your example, you wouldn't be required by the rule to link to the other blogger's low-quality site. But you should try to do something nice for him or her--like providing some useful information that would improve that blog, which might make it more likely that you would want to link to it in the future.

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Technorati Tags: branding, marketing

The Art of the Executive Summary

Several people have asked me for a blog entry about executive summaries. My colleague at Garage, Bill Reichert, wrote this explanation, and it's as good as it gets.

Writing a Compelling Executive Summary

By now, you’ve probably already read several articles, web pages—even books—about writing the perfect executive summary. Most of them offer a wealth of well-intended suggestions about all the stuff you need to include in the executive summary. They provide a helpful list of the forty-two critical items you should cover—any entrepreneur worth his or her salt should be able to address these points in less than 100 pages—and then they tell you to be concise.

Most guides to writing an executive summary miss the key point: The job of the executive summary is to sell, not to describe.

The executive summary is often your initial face to a potential investor, so it is critically important that you create the right first impression. Contrary to the advice in articles on the topic, you do not need to explain the entire business plan in 250 words. You need to convey its essence, and its energy. You have about 30 seconds to grab an investor’s interest. You want to be clear and compelling.

Forget what everyone else has been telling you. Here are the key components that should be part of your executive summary:

1. The Grab: You should lead with the most compelling statement of why you have a really big idea. This sentence (or two) sets the tone for the rest of the executive summary. Usually, this is a concise statement of the unique solution you have developed to a big problem. It should be direct and specific, not abstract and conceptual. If you can drop some impressive names in the first paragraph you should—world-class advisors, companies you are already working with, a brand name founding investor. Don’t expect an investor to discover that you have two Nobel laureates on your advisory board six paragraphs later. He or she may never get that far.

2. The Problem: You need to make it clear that there is a big, important problem (current or emerging) that you are going to solve. In this context you are establishing your Value Proposition—there is enormous pain out there, and you are going to increase revenues, reduce costs, increase speed, expand reach, eliminate inefficiency, increase effectiveness, whatever. Don’t confuse your statement of the problem with the size of the opportunity (see below).

3. The Solution: What specifically are you offering to whom? Software, hardware, service, combination? Use commonly used terms to state concretely what you have, or what you do, that solves the problem you’ve identified. Avoid acronyms and don’t try to use this opportunity to create and trademark a bunch of terms that won’t mean anything to most people. You might need to clarify where you fit in the value chain or distribution channels—who do you work with in the ecosystem of your sector, and why will they be eager to work with you. If you have customers and revenues, make it clear. If not, tell the investor when you will.

4. The Opportunity: Spend a few more sentences providing the basic market segmentation, size, growth and dynamics—how many people or companies, how many dollars, how fast the growth, and what is driving the segment. You will be better off targeting a meaningful percentage of a well-defined, growing market than claiming a microscopic percentage of a huge, mature market. Don’t claim you are addressing the $24 billion widget market, when you are really addressing the $85 million market for specialized arc-widgets used in the emerging wocket sector.

5. Your Competitive Advantage: No matter what you might think, you have competition. At a minimum, you compete with the current way of doing business. Most likely, there is a near competitor, or a direct competitor that is about to emerge (are you sufficiently paranoid yet??). So, understand what your real, sustainable competitive advantage is, and state it clearly. Do not try to convince investors that your only competitive asset is your “first mover advantage.” Here is where you can articulate your unique benefits and advantages. Believe it or not, in most cases, you should be able to make this point in one or two sentences.

6. The Model: How specifically are you going to generate revenues, and from whom? Why is your model leverageable and scaleable? Why will it be capital efficient? What are the critical metrics on which you will be evaluated—customers, licenses, units, revenues, margin? Whatever it is, what impressive levels will you reach within three to five years?

7. The Team: Why is your team uniquely qualified to win? Don’t tell us you have 48 combined years of expertise in widget development; tell us your CTO was the lead widget developer for Intel, and she was on the original IEEE standards committee for arc-widgets. Don’t just regurgitate a shortened form of each founder’s resume; explain why the background of each team member fits. If you can, state the names of brand name companies your team has worked for. Don’t drop a name if it’s an unknown name, and don’t drop a name if you aren’t happy to give the contact as a reference at a later date.

8. The Promise ($$): When you are pitching to investors, your fundamental promise is that you are going to make them a boatload of money. The only way you can do that is if you can achieve a level of success that far exceeds the capital required to do that. Your Summary Financial Projections should clearly show that. But if they are not believable, then all of your work is for naught. You should show five years of revenues, expenses, losses/profits, cash and headcount. It might also make sense to show a key driver, such as number of customers or units shipped.

9. The Ask: This is the amount of funding you are asking for now. This should generally be the minimum amount of equity you need to reach the next major milestone. You can always take more if investors are willing to make more available, but it is hard to take less. If you expect to be raising another round of financing later, make that clear, and state the expected amount.

You should be able to do all this in six to eight paragraphs, possibly a few more if there is a particular point that needs emphasis. You should be able to make each point in just two or three simple, clear, specific sentences.

This means your executive summary should be about two pages, maybe three. Some people say it should be one page. They’re wrong. (The only reason investors ask for one page summaries is that they are usually so bad the investors just want the suffering to be over sooner.) Most investors find that there is not enough information in one page to understand and evaluate a company.

Please remember that the outline above should not be applied rigidly or religiously. There is no template that fits all companies, but make sure you touch in each key issue. You need to think through what points are most important in your particular case, what points are irrelevant, what points need emphasis, and what points require no elaboration.

Some other general points:

• Do not lead with broad, sweeping statements about the market opportunity. What matters is not market size, but rather compelling pain. Investors would rather invest in a company solving a desperate problem for a small growing market, than a company providing an incremental improvement for a large established market.
• Don’t acronym your own name. Sun Microsystems did not build its brand by calling itself “SMI.” (Of course, if you know where the name Sun came from, you understand this is an inside joke.)
• Drop names, if they are real; don’t drop names if they are smoke. If you have a real partnership with a brand name company, don’t hide your lantern under a bushel basket. If you consulted for Cisco’s HR department one week, don’t say you worked for Cisco.
• Avoid “purple farts”—adjectives that sound impressive but carry no substance. “Next generation” and “dynamic” probably don’t mean anything to your readers (unless you are talking about DRAM). Everybody thinks their software is “intelligent” and “easyto- use,” and everyone thinks their financial projections are “conservative.” Explain your company the way you would to a friend at a cocktail party (after one drink, not five).
• State your value proposition and competitive advantage in positive terms, not negative terms. It is what you can do that is important, not what others cannot do. With the one or two most obvious competitors, however, you may need to be very explicit: “Unlike Cisco’s firewall solution, our software can operate ….”
• Use simple sentences, not multi-tiered compound sentences.
• Use analogs, as long as you are clarifying rather than hyping. You can say you are using the Google model for generating revenues, as long as you don’t say you expect to be the next Google.
• Go back and reread each sentence when you're done: Are they clear, concise and compelling?

Finally, one of the most important sentences you write will not even be in the executive summary—it is the sentence that introduces your company in the email that you or a friend uses to send the executive summary. Your summary might not even get read if this sentence is not well-crafted. Again, it should be specific and compelling. It should sell your company, not just describe it.

Technorati Tags: entrepreneurship

The Name Game

I found a very interesting blog about naming:

http://www.namedevelopment.com/blog/

This led me to the most interesting article I've read about finding domain names called The Search for a Domain Name:

http://www.yafla.com/dforbes/2006/03/29.html#a302

I strongly suggest you check these two blogs out if you're interested in the topic of naming.

Technorati Tags: branding, marketing, positioning

The Art of Sucking Down

A friend who worked at O'Hare International Airport told me this story. He once watched a passenger absolutely scream at an airline ticket agent. The ticket agent, however, remained completely calm. After the tirade was over, my friend asked her how she could remain so calm, and she said, “That's easy. He's going to Paris, but his bags are going to Sydney.”

One of the great misconceptions of selling, pitching, and partnering--basically, any time you want to get someone to do something for you--is that you should suck up to the people with the big titles and “A list” designation. Sometimes you do--as you've already read in this blog, but the ability to suck up to the folks who don't have big titles but make the world run is more useful.

1. Understand the dynamic. Like it or not, here's how the world works: if you want something, you should be nice to the person (let's call him “Biff”) who can grant you that something. It doesn't matter whether you are more powerful, more famous, richer, better looking, or better educated. Biff has the power, so deal with it. Returning to the ticket agent episode, it makes no sense to piss off the one person who can help you. In this sense, there is no such thing as “sucking down.” You're always sucking up when you want something.

2. Understand their needs. You should try being a ticket agent, flight attendant, secretary, receptionist, waiter, or customer service rep for a day. Then you'd learn that they're not getting paid a lot of money to put up with your crap, and they're dealing with their own sets of issues: perhaps a broken-down car, an unhappy spouse, a sick child at home, and maybe even a bozo boss. These people want to do a good job, make a living, and be happy, just as you do. The key word here is empathy. If you can empathize with them, you'll be much more successful dealing with them.

3. Be important. If you want to be treated as an important customer then be an important customer. That is, fly the same airline, eat at the same restaurant, and play hockey at the same rink. If you spread your business around, then don't be surprised if you get jacked around. I only eat at three restaurants in all of Silicon Valley: Gombei, Juban, and Buck's. I can get in anytime I want at these three restaurants--but only these three restaurants. I fly on United seventy five to 100 times a year. It takes great care of me. I fly Air Canada once a year. It puts me in a coach-class, center seat between two screaming babies. That's life.

4. Make them smile. A window occurs in the first thirty seconds of your interaction with Biff. In that brief time, if you can make him smile, you will differentiate yourself from 95% of the orifices that he deals with. Then you're much more likely to get an aisle seat, an appointment with the boss, an outside table, or step-by-step instructions to make Word print.

Simply beginning a conversation with, “How is your day going?” can break the ice. You know, and he knows, that you don't really care how his day is going, but at least you're civil enough to ask. That separates you from the pack of hyenas. Here are some opening lines that have worked for me. (Please provide more as comments because you can never have too many good ice breakers.)

• Restaurant maître'd: “Do you have reservations?” You answer: “I have no reservations whatsoever. I am absolutely certain that I want to eat here.”
• Airline ticket agent: “How can I help you?” You answer: “You could give me an upgrade to first class and ensure that my bag is the first one off the conveyor when I get there, but I'd be happy if you get me an aisle seat.”
• Secretary: “Will she know what you're calling about?” You answer: “Not unless she's clairvoyant and a masochist. But can I try to explain why you should grant me an audience with her?”

5. Don't try to buy your way in. Don't try to buy a person with flowers, candy, or an iTunes gift card. Realistically, the downside risk far exceeds the upside because you're likely to insult Biff by implying that he can be bought. Just be honest, be important, and have a legitimate rationale. That's a good enough case.

6. But do express your gratitude on the way out. I don't recommend trying to buy your way in, but once you are in, then it's appropriate to express your gratitude with gifts that are kind, but not extravagant. As my mother used to say, “Be nice to people on the way up because you're going to see them again on the way down.” You never know when you'll need help from Biff again.

7. Never complain. Let's say that you don't get what you want. Should you go over Biff's head and complain? This is seldom effective. Assuming that Biff is competent, he's not going to get fired because of your whining. Historically, pee is seldom more effective than honey. Persevere, and wear down Biff's defenses with humor, dedication, and empathy, but never go over his head.

8. Rack up the karmic points. I believe that there's a karmic scoreboard in the sky. It keeps track of how many points you've earned and how many you've used. Therefore, when you have the opportunity to help others, do so--and do so with glee. You'll build up points, and someday your kindness will be returned to you. However, understand that you need to accrue these points before you need them--you cannot go negative.

9. Accept what cannot be changed. Sometimes things are just not meant to be: there are no more aisle seats, all the outside tables are taken, and the boss doesn't want to talk to any sales reps. If that's the case, shut up, and go on with life. Don't flatter yourself and believe that the airline is out to get you by assigning all the aisle seats to others. Life is too short to get upset by things like this.

I wholeheartedly recommend that you try these practices because I always seem to get an aisle seat, almost always get upgraded, and my luggage never gets sent to Australia. And getting to the same destination as your bags in a lousy seat is a helluva lot better than getting to a different destination than your bags in a lousy seat--all because you pissed Biff off.

Written at: United Airlines flight #559, Chicago to San Jose, upgraded to first class on less than twenty-four hours notice.

Ten Questions with Adam Lashinsky (Fortune magazine)

Adam Lashinsky is a reporter for Fortune magazine. He has the high-tech beat in Silicon Valley. As such, he works with some of the best known (as well as the most full-of-shitake) companies and PR firms in the world. His perspective on working with the press is valuable for every marketing person. You can read one of his latest articles covering the Demo conference at:

http://snipurl.com/n6oo

Q. How do you pick what to cover?
A. I have two basic kinds of assignments: What I want to cover and what they want me to cover--“they” being my editors. I follow what's going on in the tech world, think about what interests me, and follow my nose. Then, of course, when New York wants something, I hop to it. What I really like is variety. I also like to connect the dots. My Murdoch story last year led to my Facebook story which led to my Craigslist story. That was fun continuity.

Q. When does it make sense for a company--if ever--to hold a press conference?
A. It makes sense for a significant product launch, some major embarrassing news, or the introduction of a new CEO. If it's important to show something or someone, a group grope helps. Otherwise, don't bother because most journalists don’t like showing up for press conferences that are just staged events with no real news.

Q. How many companies or their PR firms pitch you per day?
A. Two or three.

Q. What's the most common mistake that companies and their PR firms make when they pitch you?
A. The most common mistake is not having a knowledge of Fortune. You've got to know what I'm interested in and cold calling to ask me isn't the way to find out. You would think that these companies and PR frimes would at least read my last few articles. Is that too much to ask?

Q. By contrast, how would you describe the perfect pitch?
A. The perfect pitch would involve a major corporation with a great, tension-filled story with the offer of an exclusive opportunity to interview all the relevant people at the corporation. Short of this, a pitch that would work would involve high-level access and a story line that is relevant to my readers, not just the PR firm’s client.

Q. Does schwag and suckups (cookies, tshirts, flowers, invites to swanky parties) matter at all to you?
A. I throw nearly everything away. If I’m not being good about my diet, I sometimes eat the food, and I often take home the t-shirts for running or rags. That’s about it. I go to parties based more on who’ll be there than the quality of the venue.

Q. What is the dumbest thing a company or its PR firm has ever done to get your attention?
A. Outcast PR on behalf of Salesforce.com stands out for sending every imaginable piece of crap under the stars. It's become a joke in the journalism world. You can walk around the offices of Fortune and see footballs and other paraphernalia, and you say, “Yeah, I got that too.”

Q. Has the growth of online readership made you change your reporting style?
A. No, not really. It has changed the notion of instant gratification. I know that companies will see what I write almost as soon as I write it.

Q. If a company receives negative press, what should it do?
A. Stay focused, be a good company, and don't stop talking to the press. Bad press doesn't make for bad products. It's the other way around.

Q. How would you rank the PR expertise (from best to worst) of the following organizations: Apple, Microsoft, Google, Yahoo, Bush Administration, and the PLO?
A. I'm not going to touch that one. I have to work with these people all the time--well, except the Bush Administration and the PLO. Sometimes people tell me things that are not for publication. Well, it's same thing here: I'd be happy to share this with you but not your readers!

How to Suck Up to a Blogger

Blogging has flipped traditional PR on its head. It used to be that ink begat buzz. Life was simple then: you sucked up to the Wall Street Journal, one of its reporters wrote about your product, and the buzz began.

(Here's a collection of great speeches about the state of the art of blogging, courtesy of Garr Reynolds of Presentation Zen. In particular, check out Robert Scoble's and Hugh Macleod's sessions.*)

Nowadays buzz begets ink. Journalists no longer anticipate or create buzz--rather, they react to it: “Everyone is buzzing about FaceBook. There must be something to this, so I had better write a story about it.” This role reversal has fried people's minds.

The latest development is that blogs beget buzz. Blogs have changed everything because they represent a cheap, effective podium for creating buzz on a massive scale. Technorati provides an easy way to identify the A-listers, so all you have to do is attract the most influential bloggers. Here is a guide to the process.

1. Create a great product. There is a big catch to this democratization of buzz creation: Bloggers have a very low tolerance for bull shitake, even lower than journalists do because bloggers seldom rely on editors to “cleanse” their writing. It's easy to say you're going after bloggers, but this assumes that they'll like your product or service. The most important thing you can do to attract them is to create a great (DICEE) product.

2. Cite and link. “Linking is the sincerest form of flattery.” Imitation no longer sits atop this throne. It's hard to trash a company, product, service, or person that links to your blog. Personally, I've never met a person who linked to my blog that I didn't like. :-)

3. Stroke them. If you want to supplement citing and linking, you can send the blogger emails with these kinds of messages:

• “I love how your style sheets cascade.”
• “I set my RSS reader to refresh your blog every five minutes.” (contributed by Alex Krupp)
• “Not a day goes by that I don't read your blog.”
• “Why don't you publish your blog in a book?”
• “You could easily break up your daily entries into several parts because they have so much content.”
• “I've forwarded your blog to many of my friends.”
• “I 'digg' your blog almost every day.”
• “I don't care how often my RSS reader gets your edited versions because your blog is so insightful.”

However, marketers are already inundating popular bloggers with such pablum. To break through the noise, you need to craft a compliment about a specific entry. For example, “I found your entry about rainmaking to be very helpful, and I'd like to make you aware of a new customer relationship management software product that we make.”

At the very least, per the suggestion of Jason Pettus, make sure that you read the blogger's site. Many marketers begin with such a generic pitch that the blogger can tell he hasn't even read the blog.

4. Give schwag. In case you hadn't noticed, most bloggers don't make a lot of money from their blogging efforts. Thus, samples of your product, t-shirts, tickets to the Stanley Cup Finals, etc can go a long way. I'm not saying you can buy bloggers, but you can make them happy pretty easily. Dollar for dollar, schwag for bloggers is one of the best marketing investments.

5. Make connections before you need them. Mediocre marketers try to befriend bloggers when they need them. Good marketers befriend bloggers before they need them. Great marketers have befriended bloggers while they were working at their previous companies. I learned this lesson well before the advent of blogs: the press connections that I made while employed by Apple have lasted twenty years. Also, make lots of connections. Today's egocentric, self-indulgent blogger with five page views per day may well be tomorrow's Technorati 100 stud. As my mother used to say, “You can never know too many bloggers or have too hard a slap shot.”

If you'd like to hear how friendly a conversation can be with a journalist, please click here. This is my unedited interview with Moira Gunn, the goddess of NPR's Tech Nation. The interview was eventually heard by twenty five million people.

6. Be responsive. This is a common-sense “duhism” that is violated almost every day: If you want buzz, you have to return the phone calls and emails of bloggers. You are operating on their schedule; they are not operating on yours, so get used to it. Sure, if you're a Steve Jobs, you can make the rules, but until you reach his level, you have to play by the rules.

7. Use a rifle, not a shotgun. Any company that carpet bombs bloggers should be shot. The effect is the same as sending two dozen people the same email requesting help. Not only will this approach fail, bloggers will conclude that you're a bozo to boot. Your job is to find out exactly who you are relevant to. It is not the blogging community's job to sort through your bull secretion.

8. Be a foul weather friend. Anyone can be friendly, happy, and available when times are good. The big test occurs when the weather turns foul: your company screws up, or the blogger writes something negative (justified or not). When this happens, some companies erect barriers and hunker down--a big mistake. Also, you should never, ever lie to a blogger. If you screw up, admit it. If you can't admit that you screwed up, then at least signal that you know you screwed up by telling the blogger “I can't answer that” with a wink.

9. Be a source. Face it: there are times when your company simply isn't worthy of coverage. Don't take your ball and go home. Instead, “pay it forward” and help the blogger with her entry by acting as a source of information, by introducing her to other sources, and by offering insightful analyses. The next time, you may be the subject of the blog, not just a source.

Written at: Best Western, San Diego, California.

* This is an excellent example of sucking up. :-)

Addendum 1: Make connections after you need them too. Geekzone pointed this out. Let's say you're successful, and your great product has garnered the attention of bloggers. This doesn't mean you can rest; instead, keep working the relationships because you'll need these connections again. Even if you didn't garner any attention, keep at it for the next time you need help.

Sucking up is not an event--it's a process.

Addendum 2: Pitch reporters through their blogs. This excellent tip comes from Jason Baxter. He makes the observation that it's often difficult to pitch journalists “through the front door” of their big-time publication. However, many journalists have their personal blogs, and they are much more accessible through these than through their “day job” publications.

The Art of Creating a Community

I admit it: I’m a user-group junkie. I got my first taste of user groups when I worked for Apple—speaking at their meetings was one of my great pleasures. Their members were unpaid, raging, inexorable thunderlizard evangelists for Macintosh and Apple II.

These folks sustained Apple by supporting its customers when Apple couldn’t—or didn’t want to—support them itself. Now that Apple is the homecoming queen again, there are lots of people receiving, taking, and claiming credit for its success. The Apple user-group community deserves a high-five tribute too.

Now that I gotten that off my chest; I can move on to the topic of this entry: how to create a kick-ass community. I anticipate many comments to this entry, so I am warning you in advance that I am going to modify and supplement this entry frequently. RSS readers beware! :-)

1. Create something worth building a community around. This is a repeated theme in my writing: the key to evangelism, sales, demoing, and building a community is a great product. Frankly, if you create a great product, you may not be able to stop a community from forming even if you tried. By contrast, it’s hard to build a community around mundane and mediocre crap no matter how hard you try.
2. Identify and recruit your thunderlizards—immediately! Most companies are stupid: they go for months and then are surprised: “Never heard of them. You mean there are groups of people forming around our products?” If you have a great product, then pro-act: find the thunderlizards and ask them to build a community. (Indeed, if you cannot find self-appointed evangelists for your product, you may not have created a great product.) If it is a great product, however, just the act of asking these customers to help you is so astoundingly flattering that they’ll help you.
3. Assign one person the task of building a community. Sure, many employees would like to build a community, but who wakes up every day with this task at the top of her list of priorities? Another way to look at this is, “Who’s going to get fired if she doesn’t build a community?” A community needs a champion—an identifiable hero and inspiration—from within the company to carry the flag for the community. Therefore, hire one less MBA and allocate this headcount to a community champion. This is a twofer: one less MBA and one great community.
4. Give people something concrete to chew on. Communities can’t just sit around composing love letters to your CEO about how great she is. This means your product has to be “customizable,” “extensible,” and “malleable.” Think about Adobe Photoshop: if it weren’t for the company's plug-in architecture, do you think its community would have developed so quickly? However, giving people something to chew on requires killing corporate hubris and admitting that your engineers did not create the perfect product. Nevertheless, the payoff is huge because once you get people chewing on a product, it’s hard to wrest it away from them.
5. Create an open system. There are two requirements of an open system first, a “SDK” (software development kit). This is software-weenie talk for documentation and tools to supplement a product; second, APIs (application programming interfaces). This is more software-weenie talk for an explanation of how to access the various functions of a product, and it’s typically part of a good SDK. I’m using software terminology here, but the point is that you need to provide people with the tools and information to tweak your product whether it is Photoshop, an iPod, or a Harley-Davidson. Here's a non-tech example: An open system school would enable parents to teach courses and provide a manual (SDK) for parents to understand how to do so.
6. Welcome criticism. Most companies feel warm and fuzzy towards their communities as long as these communities toe the line by continuing to say nice things, buying their products, and never complaining. The minute that the community says anything negative, however, companies freak out and pull back their community efforts. This is a dumb-ass thing to do. A company cannot control its community. This is a long-term relationship, so the company shouldn’t file for divorce at the first sign of possible infidelity. Indeed, the more a company welcomes—even celebrates criticism—the stronger its bonds to its community.
7. Foster discourse. The definition of “discourse” is a verbal exchange. The key word here is “exchange.” Any company that fosters community building should also participate in the exchange of ideas and opinions. At the basic level of community building, your website should provide a forum where customers can engage in discourse with one another as well as with the company's employees. At the bleeding edge of community building, your CEO participates in community events too. This doesn't mean that you let the community run your company, but you should listen to what they have to say.
8. Publicize the existence of the community. If you’re going to all the trouble of catalyzing a community, don’t hide it under a bushel. Your community should be an integral part of your sales and marketing efforts. Check out, for instance, this part of the Harley-Davidson web site dedicated to the HOG (Harley Owners Group). If you search for “user group” (with quotes) at Apple’s site, you get 112 matches. (The same search at Microsoft’s site yields 16,925 matches—I’m still pondering what this means!)

The Art of Rainmaking

I'll get lots of flak for saying this, but since I'm accustomed to flak from my Apple days, I'll say it anyway: Sales fixes everything.

As long as you have sales, cash will flow, and as long as cash flows, (a) you will have the time to fix your team, your technology, and your marketing; (b) the press won't be able to say much because customers are pouring money into your coffers; and (c) your investors will leave you alone because (i) they will focus on companies with weaker sales and (ii) they won't want to jinx your success.

You can blow all the smoke that you like about brand awareness, corporate image, and feedback from early adopters, but you either make it rain or you don't. To help you become a legend in annals of salesmanship, here is the art of rainmaking.

1. “Let a hundred flowers blossom.” I stole this from Chairman Mao although I'm not sure how he implemented it. In the context of capitalism (Chairman Mao must be turning over in his grave), the dictum means that you sow seeds in many markets, see what takes root, and harvest what blooms. Many companies freak out when unintended customers buy their product. Many companies also freak out when intended customers buy their product but use it in unintended ways. Don't be proud. Take the money. The guy who invented Brillo sold pots and pans; he came up with the clever idea of baking soap into steel-wool pads as a tchokes for his customers. To his surprise, his customers were more interested in these pads than his pots and pans, and that's how Brillo was born.
2. See the gorilla. You aren't going to believe this, but Daniel J. Simons of the University of Illinois and Christoper E. Chabris of Harvard University ran an experiment in which they asked students to watch two teams of players throwing basketballs. The students were told to count how many times one team passed the basketball to their own teammates. Thirty-five seconds into the video, an actor dressed as a gorilla entered the room, thumped on his chest, and remained in the room for another nine seconds. Fifty percent of the students did not notice the gorilla! If you want to make it rain, you have to see the gorilla markets in the mist, so to speak. Decades ago Univac was a leader in computers, but it believed that the market for computers was scientists; it did not see that the gorilla market for computers was business people. That's why everyone knows who IBM is and few people remember Univac.
3. “Sell,” don't enable “buying.” Marty Gruber, my old boss in the jewelry business, liked to point out that, “Everyone wants to be the VP of marketing.” Truer words were never spoken--everyone one wants to be the VP of marketing and do the cool stuff like advertising and promotion. This is fine if your product is already being bought. However, the products of most organizations is sold. For example, these days an iPod is bought: people walk into the Apple store intending to buy it. By contrast, much to my continued disappointment, a Macintosh is still sold: the hardworking Apple store employee has to convince people that a Macintosh is fast, safe, easy-to-use, and runs the software that they need. For selling to work, you need face-to-face, personalized, and intense contact. Advertising can't do this, so for most organizations the best lead-generation methods are seminars, presentations by company executives, and schmoozing. With a little luck and determination, you may wake up one day to find that you no longer need to sell because your product is being bought--mazel tov!
4. Find the key influencers. The higher you go in most organizations, the thinner the air. The thinner the air, the more difficult it is to find intelligent life. Thus, if you focus your rainmaking efforts on CXO level people, you may be dealing with the dumbest people in the organization. The biggest titles do not have the biggest brains, so don't go after the biggest titles. Instead, go after the key influencers. They have humbler titles like “secretary,” “administrative aide,” “database administrator,” or “customer service manager.” They usually do the real work, so they know what products and services are needed, and the CXOs ask them for their recommendations. The logical question is now, “How do you find the key influencers?” The answer is that you ask people at the company to answer this simple question, “When there are problems, who does everyone go to at this organization?”
5. Go after “agnostics,” not “atheists.” Ahh, the reference account: big, rich, and prestigious. It is the high-hanging fruit that every rainmaker dreams of picking because closing this sale brings credibility to the organization and makes every sale thereafter easier. For years, I tried to get Lotus Development and Ashton-Tate--the reference accounts of personal computer software--to develop Macintosh products. They never did get it, and I wasted a lot of time. By definition, reference accounts are already successful, and therefore probably fat, dumb, and happy. They are the least likely to try something new and different. Sure, give them your best shot--once. But then cut your losses and move on to the “agnostics.” In the mid-eighties, the atheists denied the Macintosh religion, and they refused to convert to the Mac. The agnostics--people who had never used a personal computer before--were the rich and fertile market for Apple.
6. Make prospects talk. If prospects are open to buying your product or service, they will usually tell you what it will take to close them. All you have to do is (a) ask questions to get them talking about their needs, (b) shut up, (c) listen, and then (d) explain how your product or service fills their needs (if it indeed does). Most salespeople can't do this because (a) they're not prepared to ask good questions; (b) they're too stupid to shut up; and (c) they don't know their product or service well enough to know whether it can in fact fill these needs. When it comes to rainmaking, there's clearly a reason why God gave us two ears but only one mouth.
7. Enable test drives. I believe that people are inherently smart. If you provide them with the right information, they are the best judges of the suitability of your product or service. I don't believe you should--or can--bludgeon people into becoming a customer. My recommendation is that you enable people to test drive your product or service in order to make their own decision. Essentially, you are saying, “I think you're smart. Because I think you're smart, I'm going to enable you to try my product to see if it works for you. I hope that it does and that we can do business.” Therefore, do whatever it takes to enable people to download a trial version of your software, use your web site, drive your car, eat at your restaurant, or attend your church service.
8. Provide a safe, easy first step. Unfortunately, “unsuccessful rainmakers” (an oxymoron?) make it hard for prospective customers to adopt their products or services. I've been guilty of it myself--for example, asking Fortune 500 companies to throw out all their MS-DOS machines in favor of a new IT infrastructure based on Macintoshes. What can I say? I was young then. The goal is to make the adoption of your product or service as safe and easy as possible. If you combine this stress-free approach with a compelling product or service, you've got it made. If your prospects have to jump through loops to adopt your product or service, then your must convince them that doing so is worth the effort. Incidentally, this is why it's so much easier to be a blogger than to be an entrepreneur. :-)

Written at: Atherton, California.

The Art of Schmoozing

“It's not what you know or who you know, but who knows you.” Susan RoAne.

The Guy Kawasaki Theory of Schmoozing version 1.0 was ad hoc: get to know the people that you need for a specific deal. It was short-term and focused.Version 2.0 is ad infinitum--maybe even ad nauseam. It's taken me twenty years, but I've figured out that it's much easier to make a sale, build partnerships, create joint ventures--you name it--with people that you already know than with people you just met.

The key is to establish a relationship before you need it. And this is why I'd like to provide the art of schmoozing.

1. Understand the goal. Darcy Rezac in his book, The Frog and the Prince, wrote the world's best definition of schmoozing: “Discovering what you can do for someone else.” Herein lies eighty percent of the battle: great schmoozers want to know what they can do for you, not what the you can do for them. If you understand this, the rest is just mechanics.
2. Get out. Schmoozing is an analog, contact sport. You can't do it alone from your office on the phone or via a computer. You may hate them but force yourself to go to tradeshows, conventions, and seminars. It's unlikely that you'll be closing a big order with someone you met online at MySpace or via Skype. Get out there and press flesh.
3. Ask good questions, then shut up. The mark of a good conversationalist is not that you can talk a lot. The mark is that you can get others to talk a lot. Thus, good schmoozers are good listeners, not good talkers. Ask softball questions like, “What do you do?” “Where are you from?” “What brings you to this event?” Then listen. Ironically, you'll be remembered as an interesting person.
4. Unveil your passions. Only talking about business is boring. Good schmoozers unveil their passions after they get to know you. Great schmoozers lead off with their passions. Your passions make you an interesting person--you'll stick out because you're the only person not talking about 802.11 chipsets at the wireless conference. Personally, my passions are children, Macintosh, Breitling watches, digital photography, and hockey if you ever meet me.
5. Read voraciously. In order to be a good schmoozer, you need to read voraciously--and not just the EE Times, PC Magazine, and the Wall Street Journal. You need a broad base of knowledge so that you can access a vast array of information during conversations. Even if you are a pathetic passionless person, you can at least be a well-read one who can talk about a variety of topics.
6. Follow up. Over the course of my career, I've gave away thousands of business cards. At one point, I thought I was nuts because if all those people called or emailed me, I'd never get anything done. Funny thing: hardly anyone ever follows up. Frankly, I don't know why people bother asking for a business card if they're not going to follow up. Great schmoozers follow up within twenty-four hours--just a short email will do: “Nice to meet you. I hope we can do something together. Hope your blog is doing well. I loved your Breitling watch. I have two tickets to the Stanley Cup Finals if you want to attend.” Include at least one thing to show the recipient that she isn't getting a canned email.
7. Make it easy to get in touch. Many people who want to be great schmoozers, ironically, don't make it easy to get in touch with them. They don't carry business cards, or their business cards don't have phone numbers and email addresses. Even if they provide this information, it's in grey six-point type. This is great if you're schmoozing teenagers, but if you want an old, rich, famous, powerful people to call or email, you'd better use a twelve-point font. (These are the same folks that need the thirty-point font vis-a-vis the 10/20/30 Rule of PowerPoint.)
8. Give favors. One of my great pleasures in life is helping other people; I believe there's a big Karmic scoreboard in the sky. God is keeping track of the good that you do, and She is particularly pleased when you give favors without the expectation of return from the recipient. The scoreboard always pays back. You can also guess that I strongly believe in returning favors for people who have helped you.
9. Ask for the return of favors. Good schmoozers give favors. Good schmoozers also return favors. However, great schmoozers ask for the return of favors. You may find this puzzling: Isn't it better to keep someone indebted to you? The answer is no, and this is because keeping someone indebted to you puts undue pressure on your relationship. Any decent person feels guility and indebted. By asking for, and receiving, a return favor, you clear the decks, relieve the pressure, and set up for a whole new round of give and take. After a few rounds of give and take, you're best friends, and you have mastered the art of schmoozing.

Written at: Walt Disney World Dolphin Hotel, Orlando, Florida.

How to Be a Demo God

From February 6th to 8th, executives from seventy companies will do a six-minute demo of their products to an audience of venture capitalists, analysts, and journalists. This event is called, logically, Demo. It's a great event--especially if you understand the dance that's going on: entrepreneurs acting like they don't need capital, and VCs acting like they don't need entrepreneurs. (This dance is akin to acting prudish in a brothel, but I digress...)

This posting is ostensibly for the seventy or so souls who will do the demos--everyone one of them aspiring to be labeled a demo god. I should probably throw in another seventy vice presidents of marketing. And seventy PR account execs. Let's call it three hundred or so people. But it's also for anyone who has to demo a product to raise capital, make a sale, garner press, or recruit an employee.

With no further delay, here is the path to demo-god-dom:

1. Create something worth demoing. My first “duhism” for the week, and it's only Monday morning. If you want to be a demo god, create a great product to demo. If you create mediocrity, and you somehow slipped past the gatekeepers of Demo, you will be outed there. I know Demo is a great PR opportunity, but if you don't do a demo, only you'll know you have mediocrity. If you do the demo, the whole world will.
2. Do it alone. A demo god works alone. You may think it will be interesting and hilarious if the two co-founders do the demo together. Plus, it will show the world how they're getting along so well. Do you know why  Laurel and Hardy is so famous?  It's because there has been so few successful duets. It's hard enough for one person to do a demo. Trying to get two people to do an interactive demo is four times harder. If you want to be a duet, go to a karaoke bar.
3. Bring two of everything. There is a place for duplication: equipment. Expect everything to break the night before you're on stage, so bring two, maybe even three, computers, phones, thumb drives, whatever you'll use in your demo. There is zero slack for equipment failures at Demo other than the projector and audio (which are the responsibility of the Demo folks).
4. Get organized in advance. You should never futz around in a demo--for example, looking for folders and files on your hard disk. You have weeks to prepare for these six minutes; you're absolutely clueless if you haven't set everything up in advance.
5. Reduce the factors you can't control. Should you assume that you'll have Internet access during your demo? Yes, but have a back up anyway.  Sure, the hotel has a T1 line, but several hundred people in the audience are accessing it. You can count your lucky stars that Verizon has EvDO service in Phoenix. Better yet, simulate Internet access to your server by using a local server.You don't have to show the real system. This, after all, the demo.
6. Get to it. You only have six minutes, so within thirty seconds, stop jawboning and start demoing. Nobody cares about the genesis of your company or that you have a PhD in cognitive science from Stanford. They came to see a demo, not hear your life story. Believe me, if your demo is good, they'll hunt you down to get your whole story later. If your demo sucks, it won't matter if you've won a Nobel Prize.
7. “Do the last thing first.” I stole this from my buddy Peter Cohan who is a demo maven; he teaches people how to do a great demo. What he means, and I second, is that you have about one minute to captivate your audience, so don't try building to a crescendo. Start with “shock and awe”--the absolute coolest stuff that your product can do. The goal is to blow people's minds.
8. Then show the “how.” Once you've blown their minds, then you work backwards and show them the “how.” This is the knockout punch: not only is the “what” fantastic, but the “how” makes it possible for mere mortals to do this too. True or false: What's coming out of your mouth should impress the audience. The answer is False; what's happening on the screen should impress the audience, not what you're uttering.
9. Cut the jargon. The Demo audience thinks that it is very sophisticated and tech savvy. It may well be, but you should cut the jargon nonetheless because jargon seldom impresses people. The ability to speak simply and succinctly is always the best way to go. You may have the world's greatest enterprise software product, but the consumer device partner of your dream venture capital firm is in the audience. If she can't understand your demo, she's not going to be telling her counterparts about it back in the office.
10. Don't take any questions until the end. There are no questions during a demo at Demo because of the six minute limit. However, in other circumstances, you may be tempted to field questions as you go. Don't do it. It's too risky. You never know what you'll be asked--it could take you down a rat hole so deep that you'll never come back up. The upside of showing that you can answer any question in real-time is an ego trip that doesn't justify the downside of getting derailed.
11. End with an exclamation point. You want to start on a high. You also want to end on a high. (If I had to choose, though, I'd start with a higher high than end with a higher high.) Just keep one more cool thing in your bag of tricks. Think of it as a great dessert at the end of a great meal. Scary but true: the goal is to end like the Ginsu knife commercial: “But wait, there's more...” And when you do end on this exclamation point, leave the screen alone. Give the audience plenty of time to let the exclamation point sink in. If they're interested, they look you up in the program, so don't end with a screen of contact information.

Written at: Atherton, California.

The Art of Branding

In honor of the recent Macworld Expo and the upcoming Super Bowl (the two great branding exercises of every new year; one much more fruitful than the other), this blog entry is about the art of branding. My assumptions are that you don't have infinite resources and that you do have a great product (see an earlier post called “Guy's Golden Touch”). If you do have infinite resource and don't have a great product, there's still hope, but you don't need to read this entry any further.

1. Seize the high ground. Establish your brand on positive attributes like “making meaning,” “doing good,” “changing the world,” and “making people happy”--not doing in your competition. Think about it: when is the last time you bought a product to hurt a company's competition? (Other than maybe Macintosh users.) That's not why you spend your dollars. If you want to beat your competition, establish an uplifting brand, but don't try to establish a brand based on your silly desire to beat your competition.
2. Create one message.  It's hard enough to create and communicate one branding message; however, many companies try to establish more than one because they are afraid of being niched and want the “entire” market. “Our computer is for Fortune 500 companies. And, oh yes, it's also for consumers to use a home.” Face it, Volvo can't equal safety and sexiness, and Toyota can't equal economical and lexuriousness (sic). You can pick one message, see if it works, and then try another. But you can't try several at once.
3. Speak English. Not necessarily, English, but speak in non-jargonese. If your positioning statement uses any acronyms, the odds are that (a) most people won't understand your branding, and (b) your branding won't last very long. For example, “best JPEG decoder” presumes that people understand what “JPEG” and “decoder” mean. And ten years from now, who knows if JPEG matters anymore. Not to be an ageist, but a good test is to ask your parents if they understand what your positioning means--assuming your parents aren't computer science professors.
4. Apply the opposite test. How many times have you read a product description like this? “Our software is scalable, secure, easy-to-use, and fast?” Companies use these adjectives as if no other company claims its product is scalable, secure, easy-to-use, and fast. See if your competition uses the antonyms of the adjectives that you use to describe your product. If it doesn't, your description is useless. For example, I've never seen a company say that its product was limited, full of leaks, hard-to-use, and slow.
5. Cascade the message.  Let's say that you craft the perfect branding message. As the Japanese say, “Mazel tov.” Now cascade your message up and down your organization. The marketing department of many companies assume that once they're put out the press release or run the ad, the entire world understands the message. It's unlikely that even the entire company does. Start with your board of directors and work down to Trixie and Biff at the front desk and make sure every employee understands the branding.
6. Focus on PR, not advertising. Many companies waste away millions of dollars trying to establish brands with advertising. When it comes to branding, too much money is worse than too little because when you have a lot of money, you spend a lot of money on stupid things like Super Bowl commercials. Brands are built on what people are saying about you, not what you're saying about yourself. People say good things about you when (a) you have a great product and (b) you get people to spread the word about it.
7. Strive for humanness.  Great brands achieve a high level of humaness. They speak to you as an individual, not as part of a market. It's “my iPod.” “My Macintosh.” “My Harley Davidson.” “My bottle of Coke.” By contrast, you'd never think, “My Windows XP,” or “My Microsoft Office,” so I wouldn't label Microsoft as a great brand although, obviously, it is a great financial success. Ideally, you'd achieve both.
8. Flow with the go. As much as a I love marketing, at the end of the day, customers ultimately determine what your brand means. To a great degree, you take your best shot, and then you see what sticks. Or, more accurately, you see what customers make stick for you. For decades Apple has tried to make the Macintosh brand stand for power. For decades consumers believe the Macintosh brand stands for easy to use. Ultimately, you flow with what's going, and you be thankful that it's flowing at all.

Written at: Atherton, California

The Art of Evangelism

Out of curiosity, I went to SimplyHired, a vertical search engine for jobs, and looked for openings containing the keyword “evangelist.” Amazingly, there were 611 matches--and none were for churches. It seems that “evangelist” is now a secular, mainstream job title. Indeed, the first eight matches were for evangelist jobs at Microsoft--go figure.

As people hit the streets with this title, they need a foundation of the fundamental principles of evangelism. Fulfilling this need is the purpose of today's blog.

1. Create a cause. As the previous blog called “Guy's Golden Touch” explained, the starting point of evangelism is having a great thing to evangelize. A cause seizes the moral high ground. It is a product or service that improves the lives of people, ends bad things, or perpetuates good things. It is not simply an exchange of things/services for money.
2. Love the cause. “Evangelist” isn't simply a job title. It's a way of life. It means that the evangelist totally loves the product and sees it as a way to bring the “good news.” A love of the cause is the second most important determinant of the success of an evangelist--second only to the quality of the cause itself. No matter how great the person, if he doesn't love the cause, he cannot be a good evangelist for it.
3. Look for agnostics, ignore atheists. A good evangelist can usually tell if people understand and like a product in five minutes. If they don't, cut your losses and avoid them. It is very hard to convert someone to a new religion (ie, product) when he believes in another god (ie, another product). It's much easier to convert a person who has no proof about the goodness or badness of the evangelist's product.
4. Localize the pain. No matter how revolutionary your product, don't describe it using lofty, flowery terms like “revolutionary,” “paradigm shifting,” and “curve jumping.” Macintosh wasn't positioned as the third paradigm in personal computing; instead, it increased the productivity and creativity of one person with one computer. People don't buy “revolutions.” They buy “aspirins” to fix the pain or “vitamins” to supplement their lives.
5. Let people test drive the cause. Essentially, say to people, “We think you are smart. Therefore, we aren't going to bludgeon you into becoming our customer. Try our product, take it home, download it, and then decide if it's right for you.” A test drive is much more powerful than an ad.
6. Learn to give a demo. An “evangelist who cannot give a great demo” is an oxymoron. A person simply cannot be an evangelist if she cannot demo the product. If a person cannot give a demo that quickens the pulse of everyone in the audience, he should stay in sales or in marketing.
7. Provide a safe first step. The path to adopting a cause should have a slippery slope. There shouldn't be large barriers like revamping the entire IT infrastructure. For example, the safe first step to recruit an evangelist for the environment is not requiring that she chain herself to a tree; it's to ask her to start recycling and taking shorter showers.
8. Ignore pedigrees. Good evangelists aren't proud. They don't focus on the people with big titles and big reputations. Frankly, they'll meet with, and help, anyone who “gets it” and is willing to help them. This is much more likely to be the database administrator or secretary than the CIO.
9. Never tell a lie. Very simply, lying is morally and ethically wrong. It also takes more energy because if one lies, then it is necessary to keep track of the lies. If one always tells the truth, then there's nothing to keep track of. Evangelists know their stuff, so they never have to tell a lie to cover their ignorance.
10. Remember your friends. Be nice to the people on the way up because one is likely to see them again on the way down. Once an evangelist has achieved success, he shouldn't think that he'll never need those folks again.  One of the most likely people to buy a Macintosh was an Apple II owner. One of the most likely people to buy an iPod was a Macintosh owner. One of the most likely people to buy whatever Apple puts out next is an iPod owner. And so it goes.

Live long and kick butt.

Written at: Marriott Hotel, San Francisco, California

Guy's Golden Touch

If only I could get paid for answering the question, “How can I get people to evangelize my product?” I would be able to stop working and play hockey every day. Alas, there is no way to get paid for this information, so I give it to you for free.

The short answer is called “Guy’s Golden Touch.” You might think this means, “Whatever Guy touches turns to gold.” If only this were true. The actual definition is, “Whatever is gold, Guy touches.”

Bookmark this: The key to evangelism is a great product. It is easy, almost unavoidable, to catalyze evangelism for a great product. It is hard, almost impossible, to catalyze evangelism for crap. (Evangelism, after all, comes from the Greek word for “bringing the good news,” not “the crappy news.”)

This is a duhism if I’ve ever heard one: “I guess we should create a great product.” Duh! As opposed to a crappy one? The salient question, however, becomes, “What are the characteristics of a great product?” Here is the answer.

Think: DICEE

• Deep. A great product is deep. It doesn’t run out of features and functionality after a few weeks of use. Its creators have anticipated what you’ll need once you come up to speed. As your demands get more sophisticated, you discover that you don’t need a different product.
• Indulgent. A great product is a luxury. It makes you feel special when you buy it. It’s not the least common denominator, cheapest solution in sight. It’s not necessarily flashy in a Ferrari kind of way, but deep down inside you know you’ve rewarded yourself when you buy a great product.
• Complete. A great product is more than a physical thing. Documentation counts. Customer service counts. Tech support counts. Consultants, OEMS, third-party developers, and VARS count. Blogs about it counts. A great product has a great total user experience—sometimes despite the company that produces it.
• Elegant. A great product has an elegant user interface. Things work the way you’d think they would. A great product doesn’t fight you—it enhances you. (For all of Microsoft’s great success this is why it’s hard to name a Microsoft product that you’d call “great.”) I could make the point that if you want to see if a company’s products are elegant, you need only look at its chairman’s presentations.
• Emotive. A great product incites you to action. It is so deep, indulgent, complete, and elegant that it compels you to tell other people about it. You’re not necessarily an employee or shareholder of the company that produces it. You’re bringing the good news to help others, not yourself.

If you want a smashing example of DICEE product, you need not look any further than iPod. Deep: thousands of songs, podcasts, and recently video plus third-party add-ons that have added functionality Apple never anticipated. Indulgent: yes, you could buy a cheaper MP3 player, but that’s not the point, is it? Complete: total integration with online buying, Apple’s support (other than a battery or two), and online support by independent web sites. Elegant: One wheel does it all, right? Emotive: How did you first find out about it?

So if you want raging, inexorable thunderlizard evangelists for your product, make sure it’s DICEE.

Written at Ilikai Hotel, Honolulu, Hawaii

The 10/20/30 Rule of PowerPoint

I suffer from something called Ménière’s disease—don’t worry, you cannot get it from reading my blog. The symptoms of Ménière’s include hearing loss, tinnitus (a constant ringing sound), and vertigo. There are many medical theories about its cause: too much salt, caffeine, or alcohol in one’s diet, too much stress, and allergies. Thus, I’ve worked to limit control all these factors.

However, I have another theory. As a venture capitalist, I have to listen to hundreds of entrepreneurs pitch their companies. Most of these pitches are crap: sixty slides about a “patent pending,” “first mover advantage,” “all we have to do is get 1% of the people in China to buy our product” startup. These pitches are so lousy that I’m losing my hearing, there’s a constant ringing in my ear, and every once in while the world starts spinning.

Before there is an epidemic of Ménière’s in the venture capital community, I am trying to evangelize the 10/20/30 Rule of PowerPoint. It’s quite simple: a PowerPoint presentation should have ten slides, last no more than twenty minutes, and contain no font smaller than thirty points. While I’m in the venture capital business, this rule is applicable for any presentation to reach agreement: for example, raising capital, making a sale, forming a partnership, etc.

Ten is the optimal number of slides in a PowerPoint presentation because a normal human being cannot comprehend more than ten concepts in a meeting—and venture capitalists are very normal. (The only difference between you and venture capitalist is that he is getting paid to gamble with someone else’s money). If you must use more than ten slides to explain your business, you probably don’t have a business. The ten topics that a venture capitalist cares about are:

1. Problem
2. Your solution
3. Business model
4. Underlying magic/technology
5. Marketing and sales
6. Competition
7. Team
8. Projections and milestones
9. Status and timeline
10. Summary and call to action

You should give your ten slides in twenty minutes. Sure, you have an hour time slot, but you’re using a Windows laptop, so it will take forty minutes to make it work with the projector. Even if setup goes perfectly, people will arrive late and have to leave early. In a perfect world, you give your pitch in twenty minutes, and you have forty minutes left for discussion.

The majority of the presentations that I see have text in a ten point font. As much text as possible is jammed into the slide, and then the presenter reads it. However, as soon as the audience figures out that you’re reading the text, it reads ahead of you because it can read faster than you can speak. The result is that you and the audience are out of synch.

The reason people use a small font is twofold: first, that they don’t know their material well enough; second, they think that more text is more convincing. Total bozosity. Force yourself to use no font smaller than thirty points. I guarantee it will make your presentations better because it requires you to find the most salient points and to know how to explain them well. If “thirty points,” is too dogmatic, the I offer you an algorithm: find out the age of the oldest person in your audience and divide it by two. That’s you’re optimal font size.

So please observe the 10/20/30 Rule of PowerPoint. If nothing else, the next time someone in your audience complains of hearing loss, ringing, or vertigo, you’ll know what caused the problem. One last thing: to learn more about the zen of great presentations, check out a site called Presentation Zen by my buddy Garr Reynolds.

Written at Atherton, California