What does marketing mean today?

Simple, it’s about creating art. Art is subjective. Not everyone will like your art but some people may. These people will identify with your product and hold your product as a badge for their own self image.

If you don’t get an emotional reaction with your product you are not creating art.

If you create something that stands out, you can’t please everyone. If somebody you talk to, does not hate your product you should be worried. Maybe eight of ten people will be repulsed by your product but two of ten will fall in love with it. That’s a big enough market to grow a business in.

More importantly, these people are likely to tell their friends about you.

Don’t sell cardboard. Don’t be bland. Have fun and mean something.

Perfection is the enemy of the entrepreneur. It’s an idea that stifles innovation. It stops the all important launch. It’s the excuse’s best friend. Unfortunately, our default setting is to only launch when something is “perfect.”

We are trained to believe that we must be perfect In school because we are graded as a fraction of perfection. We look at magazine with “perfect” images of “perfect” people. It’s easy to slip into the mindset of “if it’s not perfect, it’s not good enough to release.”

If entrepreneurship was a music it would be free form jazz fusion improvisation. You don’t read from a score, you jam it out and use your intuition. The true secret of entrepreneurship is that it’s not about perfection it’s about making progress.

Progress is much more valuable to you than perfection. Progress should be your key goal. In other words, get your product out there and start making all aspects of your business better. Perfection presumes that you know it all. Entrepreneurs don’t have that luxury. Great entrepreneurs realize that they don’t know it all. That’s what makes them great.

Recently Jupiter lost one of it’s stripes. Scientists cannot explain why this has happened. Start-ups need to learn from this. Look, sometimes things just happen. Sometimes you just lose your stripe. This can not be rationalized or explained. It just happens.

You might have devised the most bulletproof, foolproof, guaranteed to succeed, watertight, plan. You may think that there is absolutely no chance that it will not succeed. However, this is the start-up game and anything can happen. There is no such thing as guaranteed to succeed. There are way too many variables.

That’s why standing off and doing reams of market research is dangerous. Instead find out the fundamentals and jump into the game. Be like a jazz musician and start improvising. Eventually you will play something astonishing. When you are an active participant in the market you can roll with the punches. However, when you spend months researching before you do anything, you are open to get knocked out.

By gearing yourself to expect the unexpected you will be able to deal with any unexpected shocks in a level headed manner. Remember, the unexpected is to be expected when you start a business. It’s up to you to be prepared for it.

I have been looking at previous posts and articles that I have written over the last year and a half. There is quite a lot of stuff. As a result,  I am currently working on an ebook based on that content. I hope it will be a valuable resource for first time entrepreneurs who have recently lost their job.

I will be condensing and re-writing the material over the next few weeks. I hope to get the ebook out there before the end of June.

You can’t bluff a start-up. It’s a no bluff zone. That’s the reality. You can’t achieve anything without substance.

This is actually a good thing because you don’t have to worry about anything else. You can be the worst presenter ever. You can look like a mess. You can smell bad. If you are competent at what you do and there is substance behind your start-up then people will be prepared to invest.

Conversely, you can be Mr/Ms slick and it will get you nowhere. Remember, the people you will be dealing with will  see through the crap. This applies to both investors and early adopters.

Substance over sales pitch all the way.

As you know, being an entrepreneur is very different from being an employee. Probably the biggest difference is how failure is looked at. See, I’m going to let you in on a secret. Something that your former boss never told you. In fact, they probably are not aware about it.

As an entrepreneur, you have to ditch the right first time mentality for an test and measure – incremental improvement philosophy. When I explain this to my “employee” friends they think that I am making an excuse for failure. This is a typical reaction for someone who works in a cocooned environment.  So, lets look at why many large organizations promote a right first time mentality.

It’s actually a microcosm of what VCs do. You see, in a large organization if it takes ten tries to get one success then ten employees can try ten different things with only one being a success. Nine out of the ten are deemed failures with one deemed a success. The objective has been achieved, but there has been nine failures.

In a start-up scenario, the same occurs except in a linear fashion. Instead of ten employees failing nine times to succeed once, one entrepreneur must try ten things to find one that works. I know there are other factors such as learning from past mistakes and the effect of incremental improvement. However, the above example highlights my point.

As an entrepreneur, you need your helicopter license at the ready, because the view from up there really helps.

Back when I was at grad school I remember thinking that if all you needed to do to achieve success was to follow the (insert random business acronym here) model why are all businesses not successful?

It got me thinking. Can you package success? Is there one pathway to success that will work every time that you follow it?  However, I put these thoughts to the back of my head and continued working on mastering a plethora of three letter acronyms and pseudo mathematical statements (management gurus like to use technical mathematical terms instead of plain English. I think it makes then feel more  important.)

It was when I donned my entrepreneurial robes for the first time that  I realized that applying a systematic approach blindly doesn’t cut it in the world of start-ups.  Instead of learning traditional management theory I would have been better honing my observational skills.  I would have been better to stay off the sheet music and become great at Jazz improvisation.

In an article by Yanky Fachler,  which I have kindly been given permission to republish for you here, this issue is looked at in greater detail. It looks into Phil Rozenweig’s claim that there are no formulas for successful business people. Good reading for people who have worked within a system driven by a three letter acronym.

Here it is:

The Halo Effect

Yanky Fachler examines Phil Rozenzweig’s claim that there are no formulas for successful business performance

Most smart managers, business consultants, and business journalists, says veteran business manager turned professor Phil Rosenzweig, cannot tell the difference between good and bad research. His book, The Halo Effect, is designed to be a counter-weight to the unsupported claims made by famous gurus and self-described “thought leaders,” and to counter the phenomenon of books that tell simplistic stories under the guise of rigorous research. In the author’s own words, The Halo Effect is an antidote to conventional leadership books, an attempt to raise the level of discussion in the business world, and to sharpen critical thinking skills about management.

That’s a pretty bold claim. Equally bold is the endorsement of the book by Nassim Nicholas Taleb, author of Black Swan and Fooled by Randomness. Taleb has achieved new guru status of his own, since he was almost alone in predicting the economic meltdown that we are now experiencing. He describes The Halo Effect as an antidote to those bestselling books by gurus presenting false patter and naive arguments, and as one of the most important management books of all time.

Does the book live up to the claims of its author? I think that Rosenzweig does a convincing job of showing that much of our thinking about company performance is shaped by the Halo Effect – the tendency to make specific evaluations based on a general impression. Using the example of Lego, he shows that when a company performs well, we infer that it has a brilliant strategy, a visionary CEO, motivated people, and a vibrant culture. When performance falters, we infer that the strategy was misguided, the CEO became arrogant, the people were complacent, and the culture stodgy.

If this tendency was only limited to journalistic hyperbole, says Rosenzweig, it would be harmless. But when researchers gather data contaminated by the Halo Effect, the findings become suspect. This becomes critical when so many best-selling authors claim to have identified the drivers of company performance. This is a fallacy, says Rosenzweig. The only thing these authors show is how highly we regard these high performers. And since so much research is fundamentally flawed, any conclusions about what drives company performance are necessarily suspect.

The most dangerous consequence of reliance on contaminated data is the widespread notion, explicit in such books as Jim Collins’s Good to Great, that companies can achieve success by following a formula. The Halo Effect seeks to show that performance is not about formulas for success, but about seeing the world in terms of probabilities. Strategic leadership is about making choices in an uncertain environment. The fact that even good decisions can lead to unfavourable outcomes, does not mean that the original decision was inherently wrong. Likewise, a bad decision can lead to a favourable outcome. Luck, rather than a magic formula, can often dictate the outcome.

The problem with so many management books, says Rosenzweig, is that they operate mainly at the level of storytelling. They provide comfort and inspiration, but ultimately they deceive managers about the true nature of business success. This is echoed by Tom Groenfeldt at Technology and Finance. “Pop business books probably won’t do you any harm, unless you take them too seriously. However, before you settle down with the next one, read through The Halo Effect to sharpen your critical faculties.

If Rosenzweig is correct, and I believe he is, then the question is Why? Why are so many management gurus contaminated with the Halo Effect? Why do so many authors make such extravagant claims about their 3 principles, 4 habits, 5 secrets, 6 keys and seven principles? Why, in other words, are so many business experts deluded?

I found one answer in a book called Mistakes were made (but not by me): Why we justify foolish beliefs, bad decisions, and hurtful acts, by Carol Tavris and Elliot Aronson (who is quoted in The Halo Effect.) The authors examine the issue of cognitive dissonance: why people dodge responsibility when things fall apart, why public figures are unable to own up when they screw up, and why we can see hypocrisy in others but not in ourselves. The book offers a fascinating explanation of the harm and damage caused by self-deception and delusion.

When most new entrepreneurs think about market research, they imagine questionnaires and focus groups. There is nothing wrong with that, is there? I mean, it appears on the curriculum for Marketing 101. However, focus groups and questionnaires are time consuming, relatively expensive to conduct, and not very accurate.  We all know that people don’t really say what they are truly thinking in focus groups and questionnaires.

For start-up entrepreneurs, these old school methods are out dated. There is a better, and for the cash conscious, a cheaper way. Remember the old saying “actions speak louder than words?” The same applies to doing market research for a new business. Observation is where it’s at. Proper desk research using the Internet will reveal a huge amount about your target market. More and more methodologies and tools are available for you to find out what your target audience is really thinking and doing.

It’s like a hunter following animal tracks in the forest. You are following digital footprints left by your target demographic online.

Using a combination of keyword research, ad planning systems, alexa, backlink research, forum research, business analysis, website analysis, news searches and simply asking questions, you can reveal a staggering amount of information that will really assist you in setting up and positioning your new venture in the marketplace.

Observation can help you understand a lot of things. It sounds easy, but are you prepared to open your eyes?

So what can governments throughout the world do in order to encourage new start-ups? Well there are many tools at policy makers’ disposal. However, I think one method in particular would not only encourage more start-ups but skew the culture of society towards a more pro entrepreneurship stance.

People involved in start-ups should be given a lower tax rate than other segments of society. This reflects the risks involved in starting, investing in, or working for a start-up company. This lower tax rate needs to be available to start-up entrepreneurs and their employees along with start-up investors.

Lets look at it from an employee’s standpoint. Working for a start-up is risky. The statistics show this. As a result, they are taking these risks on a personal level and if the business fails they are out of a job. In order for start-ups to get high caliber employees, this personal risk needs to be addressed by policy makers. By offering a lower tax rate to employees of new start ups, governments are giving these employees who have accepted higher risk employment, which has the potential to benefit the broader economy, a fair deal.

In some cases, it would allow cash conscious start-ups to pay less while the employee would get the same take home pay.

Obviously, lower Capital Gains Tax rates for entrepreneurs and investors will be helpful. Investing in a start-up should be rewarded more than investing in an s&P 500 company.

Any tax jurisdiction that implements such policies will reap great economic rewards. This change in taxation policy would create activity in the most important area of the economy for recovery. Globalization means that the country with the best climate for start-ups will eventually win.

Wouldn’t it be nice for politicians to take a big picture view once in a while, and cut everyone involved in the start-up community a break?

It’s all about creating jobs right now. That’s what’s needed. The best way to create sustainable jobs is to encourage start-ups. New businesses for a new economic era. Old school thinking doesn’t work. The Silicon Valley ethos needs to permeate through the economic fabric of any country that is serious about economic recovery. Creativity and innovation need to be allowed to breathe.

On an international front being lazy and  relying on US multinationals to hold up an economy doesn’t make the grade anymore. All countries including the US need to re-calibrate their economic structure to enable new businesses to create jobs. Whichever governments get this right, will lead their respective countries back to a new era of economic growth. Whichever governments ignore the needs of entrepreneurs, will dig a deeper hold into the depths of depression.

This is a great time to start-up. Costs have come down and the talent pool available to work in new businesses has never been better. Today you can start a business at a fraction of the cost that you could even 4 or 5 years ago. For instance, the amount of free software available now that enables you to develop things that a few years ago would cost hundreds of thousands and in some cases millions of dollars really puts the ball in the entrepreneurs court.

I urge people to make the leap. To use their skills not only for themselves but by doing that they are also creating a domino effect that will benefit society as a whole.