I can’t shake this phase.
It came from my friend David Semeria in a comment on avc this past weekend.
On one level it’s something that has been brewing for a while and self-evident as we watch the jostling and ongoing category spread of Amazon, Google, Facebook and Uber.
On the other, it’s an aha to startups and potential game changer raising questions about how we build companies and market our innovations.
The idea is powerful in its simplicity.
We think of innovations bubbling up from the bottom.
The very promise of the web itself is about giving voice to the authentic, empowering the few and the small to change the world for the many and reshufle the global status quo.
Today we have a culture of bottoms up innovation, an economics of disruption that is spewing a cross-generation of quite brilliant entrepreneurs. Out of incubators and accelerators. Out of seed funds. Out of personal capital.
Out of a societal belief that disruption is a business model and entrepreneurship a job description.
David’s phrase speaks to this turned on its head, to where the innovations are not coming bottom up, but top down. Not from the mass of small innovators but from the advantages of the platform incumbents. The core polarity of innovation shifting its axis.
The big platforms have a soft lock on our behaviors, a hard lock on our data and as creatures of habit, a solid spot in the premium brand positions on our phones.
Trickle down innovation meeting attention deficit and market complacency on the consumer side.
People in general don’t appear to be less curious, they do appear to have a higher threshold to change.
Download numbers on apps stays high, usage and replacing the incumbents on the first and second screens on our phones, has flattened.
How often do you change your messaging, commerce, social, transportation, financial and entertainment apps on the first few screens on your phone? Mine are locked in.
The idea of platform creep or in marketing terms, leveraging your brand cross category, is of course nothing new.
What is happening today though is different as it is about data ownership as key to brand dominance. About the breadth of these brands to leverage the depth of their data sets cross the pieces of our lives that matter the most to us.
If this is idea is true (and I think it is), if the innovation pipeline has shifted its access point and the consumer their propensity to adopt new brands, we are definitely in a brand new world. Literally.
And it raises a bunch of questions.
Will it stifle innovation? It will most certainly change the odds.
Can interesting products like Door Dash really take a chunk of the on demand local delivery market when there is Uber Rush?
Can they get us to install another app tied to our credit card when everyone already has Uber installed? Can they be that much better to give them a spot on our front screen in transportation row?
How does this dynamic change the core promise of the web that it is indeed possible for an individual to change the world?
I’m just not sure.
No one is too big to fail and the market is the greatest democratiser.
We all know that human behavior invariably proves spreadsheet logic wrong. Why Amazon is failing for the third time to own the $20B direct to consumer wine market or Google invariably swallowing its foot from G+ to G TV on anything consumer oriented are cases in point.
Truth be told though while my gut knew that this was happening I hadn’t thought about it in these terms. I look at analytics all the time see downloads without requisite engagement, engagement without transactions and sweat changes to test the why of it.
I now have a new viewpoint. I was ignorant as David states (and I paraphrase) that in AI driven models more data trumps a better algorithm. I didn’t have the language to understand the entrepreneurial disadvantage.
Take a look at the thread and the discussion. It’s worth it.
Share with me whether this is impacting how you are configuring your model today.
And mostly, as you iterate your brand forward how to play in a world where the odds are stacked against you.
That’s the most important piece to wrap our marketing heads around.
The future of entertainment is changing in front of us—yet again.
Netflix’s announcement of a day and date, streaming and in-theater feature film release is a big deal with some far reaching implications for all of us.
Day & date is the dream of all movie lovers.
This is the idea that you can stream first release movies at home, or anywhere, at the same time they are in the theater.
Day & date is the nightmare, possibly the demise, of the theater chains themselves.
Theaters as a business lives on popcorn and soda margins.
We go to the movies because the system itself is built on timed exclusivity of feature releases that harks back to when the studios themselves owned the theaters as marketing platforms.
Films get made, released to the theaters to market them. We either go, pay for tickets, eat popcorn or we wait till we can stream them at home.
We are at the cusp of change here that has been generations in the coming.
Just as Netflix disrupted the video store culture, they may be the wrecking ball that forces theaters to either change or be gone.
To be honest, I’ve loved the movie theater experience most of my life.
From double feature dates and skipping school and hiding out in matinees as a teen. To staging my own underground film festivals while at University. To work in bringing stereoscopic 3d as an in-theater advantage to the industry.
But there are few films that I go to see today that I don’t wish I could see out of the theater.
We may love a connected world for search or cat videos, but little has changed my leisure life as much as streaming movies at home.
A huge screen and a comfortable couch. Unfettered access to most titles with a click. Hanging out in sweats, alone when I can’t sleep with samthecat on my lap. With friends and wine. Over dinner with family.
The theater experience has gone from romance and pleasure to mostly legacy habit. While I love special places like the Sunshine Theater in New York, the allure has frayed along with the theaters themselves.
Whenever an indie film is available day and date, I opt to watch at home.
I’ve been wanting this to happen for a long time.
The lock on the relationship of the studios and the distribution chain seemed impenetrable. I didn’t see the disruption coming not from within the system but from without—or more so– the new system.
I never thought that Netflix, the company that killed Blockbuster and created the economic model around high production binge viewing of episodic TV would be it.
Read the link but basically Netflix is releasing a full-length feature online and through some theater chains.
The chatter is that Netflix doesn’t care about the theaters and is using them for marketing. I’m sure they are right.
The smart chatter is saying that this is simply a trojan horse strategy to qualify for the Academy Awards that requires theatrical or simo-theatrical release. Sounds like a smart move to me.
What’s interesting is that the balance of power has tilted here. Hollywood and the theater chains are tied at the hip. Netflix is doing what they couldn’t and while the success of Beast itself is irrelevant, this I think may be the pebble in the pond that breaks the dam.
So what is going to happen?
Five years from today will the theater chains be gone?
What’s clear is that the time for change is right now.
Theaters as physical environments all basically suck. The locked distribution system between the studios and forced exclusivity windows is a legacy system closing on itself. Feels out of touch and a tad stupid.
It’s time to reinvent this.
Maybe Netflix should buy Landmark theaters and re-imagine what a theater means and own both sides of the equation. Creating an on the street experience that is completely unique and suited as a marketing tool for its releases.
Maybe the studios themselves will be forced to embrace a new date & day release strategy themselves, reacquiring theater spaces as they own their own online distribution.
Maybe someone will understand that even though people want to stay home as a choice, impromptu environments like the explosion of movies in parks as a social events is very much part of today’s urban culture.
Maybe with technology we can stage showings in a more impromptu and fun ways.
I’m not rooting for Netflix, I’m rooting for the consumer. For myself.
I’m not rooting against the studios, I’m rooting for a creative way to reincorporate the magic of group viewing possibly in the dynamics of an event in a new definition of a smart city.
I’m rooting for free choice.
It’s Saturday morning as I write this.
My plan for the day is you guessed it—off to see the new Spielberg/Tom Hanks film. All the choices of where and when are sub optimal.
I’d rather watch at home or maybe over an extended brunch at one of my favorite venues.
Or somewhere creative that inspires me to get up and go and meet friends there.
Today I’m stuck with a theater chain and bad popcorn.
Not for long as the first shoe with Netflix has definitely dropped.
Few words touch the very core of the entrepreneurial challenge as much as product market fit and market traction.
They are obviously connected, often used together, yet uniquely different.
Entrepreneurs live for product market fit.
They are in the business of adding something new and special to our world. When it gels, it’s the market’s vote of approval, telling them that hell yes—what you built is real and has a shot at becoming something that can grow and stand the test of time.
As a marketer, I think of product market fit in terms of market push and pull. You have touched a market nerve when the inflection point changes, when you stop pushing out to the market and it starts pulling towards you. When gravity has put your brand in the center of customer focus.
It’s a true startup metric that you can both feel in your gut and provide proof points to support.
Product market fit is a marketing dynamic. We build toward it.
Market traction is invariably a sales metric. It speaks to a business model and market share. It’s about taking what works at the recognition of fit and building an infrastructure to take it wide. It’s the true litmus test of success.
These two ideas work together. One before the other, both at the intersection of what you do and the market’s response.
They bifurcate by how more than what in many ways.
We build products with less to get product fit. Often with a little seed money to prove the idea. Then we raise capital to take it broad. That’s the process.
Early stage entrepreneurs run into a trap between these ideas when fundraising.
They take their vision, their team and their market proof out as their credentials to raise capital to build out a plan to go after market traction.
In that dance between risk and reward, in finding the right capital partner to tackle the true market, invariably you are never quite there. Miles or inches apart doesn’t matter in the end.
You have market fit, you never have enough market traction. You have the seeds of what it takes, investors are looking for a few more steps towards the door to feel more comfortable.
It’s as it should be as everyone needs to feel right about the decision. With you. With the product. With possibilities of the market size.
We’ve all been here. We’ve all been told that we have something special but need more market proof.
It’s important to take this as a no. Straight and simple.
Phrase makers mouth the words that there are no NOs in sales. They are wrong.
Sales is about finding the right customer at the right time for a close. Networking is a process. Sales is about closing.
I know this smacks of semantics but it’s more.
Product market fit and market traction are real ideas. Coherent stepping stones to market penetration and success.
You can build the former on your credit card at times. You will fail at the latter without capital and the right partner.
With some exceptions, traction as a sales metric or even hockey stick engagement metrics in a Fremium model is exactly what we raise funds to go after.
Few things are as important, as frustrating and suck more time that raising capital. Whether you are funding a food truck or mobile dating app, you will be caught in that nether world between product market fit and raising funds to demonstrate market traction.
My advice to entrepreneurs when they ping me nonplussed on the capital raise trail is to face facts and take it for what it is.
A funder may come back later and invest. But a no is a not interested now and move on.
Go find someone for whom this is the right opportunity.
Go find someone who grasps that you are at a tipping point and will partner with you to go after the bigger win. The real market traction and proof.
Go find someone who can say yes.
When I was working in Silicon Valley, I went to hear Marc Andreessen speak.
I remember his words some 20 years later, and I paraphrase from memory.
The only things that matter are product market fit and funds in the bank to go after market traction. All the meetings, the term sheets and the pitches are just work, till you turn them into a yes and close the deal.
True words to build companies by.
The art of marketing is about knowing what not to say.
It’s not about what is said but about what is heard.
It’s about the spaces between words that lets others find not you, but themselves.
Less is more is not about editing, it’s about clarity of thought.
Less about pitching and more about touching a common nerve.
More about opinions that inspire and less about facts that purely inform.
Less is more is not about the craft of writing.
It’s about the discipline of thought and communications.
It’s about unlocking a behavioral response and inspiring engagement.
It’s about knowing what not to say.
Brand is nothing less than who we are in the markets eye.
The customers view of themselves in your product to how they work, play or live.
It’s what they hold in their hand if you have a consumer product. It’s what drives them to put your app on the front screen of your phone and keep it there.
It is also where I like to start, even before understanding your product or how you plan to get it to market.
And invariably it’s the most problematic part for most companies to get right.
Marketing is a catch all umbrella term for countless tactics with a smattering of behavioral science tying them together.
But at its core—at least how I practice it—it is about that simple brand connection between you and the customer. The place where what you sell intersects with what they think they are buying.
Tactics aside, I find a core discrepancy in most entrepreneurs around understanding brand as a defining value.
When you pitch your company you are transporting the listener to the top of your private hill and laying out a landscape of a changed world. Where what you believe and what you build is core to the how people live. Or how companies go about their business.
This is the fire that drives.
Most entrepreneurs know what they are about. At a gut level they know why the market should care.
Connecting that vision to product value is the kicker. Invariably this is where companies falter.
Many early companies build something clean and shiny to a very crisp spec, then flounder at a cold stop in front of the market.
Think about it this way.
When you pitch your vision you are sharing a sense of wonder. A sense of personal possibility.
It’s your job to do the same thing for the market when you are launching your product.
Where what you believe becomes a large part of what the market adopts. Where your sense of inspiration around an idea becomes the customers sense of wonderment around how it works for them.
Step back a moment and think about how your company functions at this juncture.
How with focused intent you took your vision and materialized it into a product. How you have labored insanely hard to build something simple, intuitive and ready for public consumption.
Right here is where ideas like Lean Startup clash with market reality and brand awareness.
We iterate our way to market fit. No question.
So how do you balance iterating your product with selling the value of your brand and the sharing of your core brand belief—even at an early stage?
Sell your vision is what you must do. Asking the market what they think of you, you certainly can’t in those terms.
That’s why brand first even at the earliest stage is something to hold onto. Something to lead with.
The market will guide you but it will not tell you who you are without a sense of what you bring to them. It is not their job to help you. It is your job to share the wonder that drove you to this place and inspire them to respond.
It is your job to create the environment that both sells hard and listens patiently. That speaks your customer’s language but tests your core brand beliefs in a fluid way.
Brand first is a workable methodology for choice for early stage companies. Your language to have a conversation with a yet unaware market.
It begins with you, it ends with the customer.
But always, it’s about how you share wonder and create the possibility for that to grow and change.
It’s marketing at its core.