A holiday tradition here at waldstein.com

I realized this morning that I’ve been blogging and offering advisory services since September 2009.

The passage of time hit me a bit hard I’ll admit.

Along the way traditions have developed and every year around Thanksgiving I select  a few entrepreneurs from the community and offer gratis sessions of my Office Hours advisory services.

This is both my way of giving back and of course, works to build new connections for my business itself.

A mini two-sided marketplace of sorts where both sides win.

Office Hours is my light advisory model that works really well for clients that need an outside strategic partnership that often touches on CEO coaching as well.

Trust me–this is fun, engaging and serious work. And a great way to get to know each other.

We schedule a series of sessions, create goals and set a rolling agenda.

The overall objective is to tackle usually one item, maybe market positioning, or often, an outside view of the strategy behind your fund raising docs.

The goal of course is to find a match and continue to work together.

Over the years this has been the entre to shared projects, advisory roles and even a stand in CMO role now and again.

But most gratifying, a handful of great friendships have developed out of this.

You already know me from the community. My approach to building markets and brand is a few hundred posts deep here.

If you are interested and can see an outside expert with a strong market point of view becoming part of your team, send me a mail.

Make me want to get to know more about you and your project. And even more why you want to do these sessions with me.

If this sounds right to you, just do it!

Looking forward to hearing from a number of you.

Questions in the comments or via email please.

And most important, have a great Thanksgiving!

 

 

The myth of work/life balance

There’s a melancholy bubbling up across my networks.

A murmuring that as a tech culture we’ve lost the ability to compartmentalize our work and personal lives.

That the ability to put things in separate buckets is somewhat akin to personal happiness and work productivity.

Maybe this is coming from the yearly slide towards winter and ennui that comes with the holiday season.

Or that the startup world has hit a wall of stress, with fundraising at a seasonal slowdown and the realities of an increasingly challenging market taking their toll on entrepreneurs across the board.

Or even that the entrepreneurial culture is now mature enough now to realize that for all its many positives, at its core it’s a hyper stressful and challenging business model.

Exuberant when you exit and crushing for the majority that don’t.

Whatever the cause, this ennui is real and palpable, cropping up in friends and clients alike.

This year I feel it as well.

But the idea that there is a separation of work and life in any real way seems more myth and nostalgia than reality to me. I think we are chasing our tails looking for balance in all the wrong places.

I wonder whether this view of work and life as polar opposites has ever existed in a real sense.

Certainly within the culture of startups and creative endeavors, it’s simply an unnatural state.

So what’s going on?

When today we talk about the need to unplug and head to the beach we may certainly be looking for balance. We are pining for healing and a more uncluttered point of view.

Maybe we are looking for a truer sense of ourselves and an inside view of what it means to be happy.

I’m all in with this but I don’t think it has anything to do with compartmentalizing our lives.

In fact, I’m beginning to realize that technology itself, to many the culprit and the source of the problem, is in actuality a large part of the answer.

Think of it this way.

There is an innate conflict between the freneticism of an entrepreneurial activity and the aspirations for a balanced life.

That’s reality.

Neither our aspirations nor the day to day of work is going to change that.

That doesn’t obviate our natural need for quietude nor does it really mitigate the conflict.

What I aspire for is not disconnecting, but control and focus to be disconnected and still be in touch.

There are those whose ideal is a cabin with no connectivity and cutting the strings to free the mind.

To me nothing could be more stressful.

I want the overdraft of knowing that things are in control in real time so that I can do that 3-hour bike ride without my phone. So I can go diving or skiing for the afternoon knowing that I’ve managed the pieces of my life and business.

Here’s the rub.

You need to separate tech as a tool and tech as a busy box driving distraction.

Having everything in the cloud, always available from any device is a gift.

From finances to roll outs to calendars to knowing where the pieces are and communicating within context, at a click is what tech gives me. These tools, the front screen on my phone, are what make possible balance for me.

If you think that social nets are you most important marketing channel and need every second response—you are simply screwed—as well as wrong.

I’m a believer that the more seamless the integration of work and life I have the more balanced and productive I become.

This to me is about acceptance and embracing reality not pining for a different one.

The more I do this the less I find myself staring at my phone walking down the street.

As both a tech and personal wellness fanatic, this idea of personal and work integration is how I see, for myself, the key to being better at play and work both.

The gift of a connected world is just that we can always be connected and keep the pieces in sync and in our mind’s eye when they need to be.

It’s a bit of a bait and switch of course.

You can spend your time imagining a more separate world so you can truly relax.

Or you spend your time wiring stuff together so that you are free to choose and jump into each completely.

A wise friend said to me recently:

“You take yourself with you wherever you go”.

Embracing that is the only way for me to truly get beyond myself.

Community as the marketplace

Sometimes there are cultural shifts that we experience long before we become aware of their impact on how we live and work.

We wake up and realize that we are using old world tools and ideas for a vastly different new world order.

This is happening today where the idea of community meets the reality of the marketplace.

In the 90s, Geoffrey Moore nailed community and the power of interest groups as the power play of an early-wired world

His idea that you can leverage an early adopter interest group as a sling shot leap into the mass market was brilliant.

Geoff’s vision of the chasm, and Seth Godin’s idea of tribes on hilltops pounding on drums to send signals were connected.

Seth’s idea came later and went further but both defined an Alice’s Restaurant sort of market spread for both the building of brands and the anchoring of commerce around it.

The web as the amplifier and aggregator of groups with connecting individuals as their market momentum was the big aha.

That was then though and this is now.

There is a reason that marketing has fallen into such disrepair and lack of respect.

We’ve focused on approximation and virtual scales of sentiment rather than the tangible and powerful result of social grouping—community–and how that drives change in the markets that form naturally around it.

We’ve ignored the key change in how community functions in a world that is both different in how we navigate it and different in the core of our behaviors.

Today, there are no more chasms.

There are no more hilltops. No individual nodes and no gated communities.

There are only atomic connections that move horizontally across the threads of the world on social nets and in mobile communities.

The more you look to focus them narrowly the more you will miss the thread.

This dawned on me a few years ago that the communities on Kickstarter where not on their site but everywhere cross the web.

Somehow the emotional clarity of a creative project spread out across the nets and tied together people in a loose chain of support aggregated in the transaction.

The project was not the community, the emotional clarity of the idea was the connector.

Community was not a layer nor an entity nor exclusive.

Brand, while born out of belief, was less an idea and more of an emotion.

And marketing needed to be redefined as a language that connects what we believe in naturally to a market that supports it.

I don’t know what the operational manual for a world where community is the  definition of a market is going to look like.

We are in many ways living it before we understand it.

What I do know is that we are different today as people then we were. The markets are different along with us.

If you are an entrepreneur, I can guarantee that your company is already firmly in a community and in market from day one.

You need to start right there.

If you think your community is simply the enthusiasts that you’ve gathered you are thinking too narrowly.  That was the reality in the 90s.

You are missing community in a networked world as inclusive and expansive by definition, horizontal from the beliefs that make it real.

You need to discard the idea that there is a place where community ends and market begins. That you need to approximate and measure community in order to leverage it to a market.

You can’t imagine your market into place certainly.

I’m going to get asked: Is there a new list of tactics we need to implement?

The wrong question to ask first.

You need to step back.

You need to imagine when Kickstarter realized that by the simple act of empowering people to support things that inspired them, they had touched a primal need whose community was as broad as the world.

When Airbnb or Sound Cloud realized that at their most elemental value they touched a community of common interests that opened a market that was as big as the global market itself.

Take a huge whiteboard.

Gather your team and your advisors around you. Fill the entire thing then wipe it clean.

Find the one phrase. Isolate the one emotion, the one core truth that makes you special and unstoppable.

Makes you essential to the market size you imagine.

Understand that community as marketplace is both the message and the medium in today’s world.

Companies succeed on execution but not without that core.

Start there.

 

The race to the bottom

Selling below cost is a race that when you win, you loose.

From the top down this is simply building a business with a negative gross margin.

From the bottoms up this is just plain suicidal to me. Like lemmings sprinting towards the cliff.

I’m simply not smart enough to understand how when you sell below cost (negative gross margin) you can get to net operating profit.

Crazy corner cases aside, this is when street math and startup math are the same.

This is becoming strangely endemic and not just in the rarified world of big players with big dollars scorching the earth to buy market share.

I see it on the shelves of Whole Foods. I see it in many pitches of startups. I see it in every company when they face the truth of building a market for their product and it just doesn’t go as planned.

First some biases:

-I don’t believe that markets can be bought. You can roll up capabilities and lock down distribution but the market is its own master. It will humiliate the most audacious and drain the bank account of the most well funded.

-I don’t ascribe to the tactic that acquiring a customer at any cost is the right action. Beware of forecasting a very long brand life and using LTV as a justification for acting crazy with your checkbook.

-I am absolutely certain that recognition built on discounts and sales is simply reflex consumer responses to a deal, not connected to building a market nor deepening brand value.

This happened a few weeks ago.

I was talking to a startup founder around his new strategy for penetrating a market segment that was drawing a lot of attention and investment.

He has a really cool brand, grounded in innovation though quite small but facing stiff growth inertia.

After a large acquisition in the space, he was embracing a Trojan horse strategy with a low cost, below cogs and entry-level product that could leverage them into broader based distribution. He had decided that it was OK to loose money on each and every sale.

This is a dangerous and desperate game to play with little odds of winning.

I seriously understand the frustration of stalled growth.

Most of the time we are stymied over not growing fast enough or nervous that our market share is being taken by someone else.

I understand the massive anxiety that comes from being out there raising capital and being told day in and day out, that you are building a business that is solid but doesn’t have escape velocity to warrant a high multiple investment.

And the then unnatural acts as you convince yourself you have to be to be that company.

As a commenter responded to me on a blog string and I paraphrase from memory—a fruit stand peddler at the dawn of civilization knows that if you sell every apple at a loss, you will run out of product before you make any money.

Seems to be a lesson that forever needs to be relearned.

It’s too easy to be a curmudgeon and talk about the impatience of both funders and entrepreneurs. I find that people are smarter than the generalizations we make of their actions.

But it’s a riddle why time and again, we are comfortable with the process of patiently building products, then completely unrealistic about the rigors of getting them to market momentum.

I think there are two truths that bear repeating.

-You are building your brand at the point of sale with each and every transaction. Be it online or across the check out counter.

Throw away your common distinctions of sales and marketing and think of yourself in the customer’s eyes.

If business were a board game Monopoly money our currency, always on sale would still be a loosing strategy.

You need to build value—build brand—before discounts and sales become a strategy. People buy cheap, then they buy something else cheap.

Communities of buyers connect to brand, then take sales and discounts as a personal gift. The stronger the attachment to the undiscounted value of what you make the more powerful a sale can be.

If you evaluate a sale by its revenue you are missing the point. If you evaluate pricing and discounts as a brand and customer acquisition tool, you look at lift post discounts as the true measure of success.

-Business models iterate, business fundamentals usually don’t

I’ve never built a budget or a plan that didn’t change.
But the fundamentals of margin, of cost with volume of the relationship of what you build and the resources to acquire customers are fundamental.

Someone said that you need to understand your brand value and your market dynamics but you don’t early on need to understand how to scale.

This captures it all for me.

This is why I keep building spreadsheets that go up and to the right for investors, but what I really care about is the dynamics of the brand and how it can capture market fit and that the business fundamentals are sane.

If you have these pieces and enough capital to be patient, you have a shot.

The tech world especially is steeped in the mythos of the unimaginable.

The Freemium model that got acquired for billions of dollars when their model was gushing cash at a loss.  The overnight success that went from zero to acquisition in a handful of years.

It happens but your plan should be that it will never happen to you. Don’t fall prey to unnatural thinking that negative gross margins somehow make sense.

Put the pieces together.

Know why people can love what you do or make.  Understand the fundamental business blocks of your vision.

Then go make it so.

Emotion as the top of the network stack

If you are an investor or web thinker, the discussions over at AVC on data as the top of the tech stack have been as good as they get lately. Check them out here and here if the topic grabs you.

My takeaway is–how does human touch factor into all of this?

How does our need for emotional connection through objects and ideas map to a changing reality where commerce and logistics are pipes that appear smarter than the populations they serve?

In some sense, the future is already here once we’ve wired the web as a tool for both customer/sentiment match and even more astounding, wired people as services into a click on a phone.

Amazing actually if you let your imagination run with this.

My take is that the corralling of complexity on the data side mirrors a drive for emotional clarity and connection on the other.  And while the tech stack grows deeper and cleaner, how we as people and consumers act remains invariably messy and random. In fact we become more needy for emotional objects we can hold onto.

I’ve been looking to Facebook for understanding.

As much as Twitter is the epitome of real time information, Facebook is at its core an emotional net more than a social one.

And both Twitter and Facebook are the apex of network smarts hosting—and to some degree capitalizing-the mess  and mass of human emotions that live on them.

Facebook embraces this to a t wiring in emotions as its core dynamic.

It’s a global runway of emotional shorts.

Breakups. Marriages. Transgender journeys. Bar Mitzvahs. Soccer tournaments.

Bill Maher  next to a video of a tabby cat playing in a breadbox trending at over 14m views.

Each of us needs to be identified by emotion snapshots—be it our kids or pets, wine bottle labels, travel shots. A global population of thankful, cute loving, humble and happy humanity.

Years ago I wrote a post how everyone is always happy and thin on Facebook. It was more cheeky than insightful in retrospect.

Now I realize that people—humanity itself–simply needs this view of ourselves. It’s not reality but it is key to how we view ourselves and deal with the rigors of reality itself. I don’t know if this is in response to a data driven pipes that drive our world or simply because now we have platforms to express ourselves on.

No matter as it feels right.

I’ve always been a social behaviorist when it comes to marketing, digging into the intersection of people, the act of wanting something and the transaction.

I’m realizing that we need to push this further.

We need to rethink  the ideas of cause-based or community-based  brands. We need to strip back our positioning and customer understanding to our emotional touch points. To individual aspirations as key.

If you have a food brand based on healthy, you need to rethink this as your brand representing an approach, and find in it the core wants and aspirations of the customer who will embrace it as their own.

If you are an org addressing the lobby for GMO, you best stop lecturing down and find the language to make this something enthusiast feel not understand. This lobby especially has a lot to learn from the videos of animal rescue organizations.

I’m realizing that I’m doing this already putting some teeth into my gut reactions that brands actually do live in the aspirations of your customers. In their aspirations to embrace your product as their own.

I blogged the other day about how a data driven world owned by the large incumbents,  stacked the deck against the small entrepreneur.

I still believe this has merit but I also know that smart pipes are simply plumbing. The brand platforms that are being built today will win, not on the plumbing alone, but on capturing that key emotional need of people. Billions of them.

Understanding that need of people to feel good about the services they use, the companies they invest in, the food we eat and the stores or online sites we purchase from. To be delighted by our actions.

Making it simple. Making it real. Respecting the messy and needy nature of people—ala the Facebook effect—is key.

It’s as hard to capture as it is to build the networks it lives on.

It makes us all equal as we are all experts in what feels right and draws us in.

Try this on.

Take a look at your own behaviors and then deconstruct you own company’s brand. See whether you are still pushing out rather than understanding how to let it come to you.

There is an aha here. I guarantee it.