Connect - Part 7 - What the !@#$ Does Marketing Do?

One of the inspirations for this series was the Connectors post by Fred Wilson. He often provides “What does a VC Do?” posts and I find that “Product Marketing” is very similar, but not exactly the same. One of the differences is that there is a point where I want to my guys to “Stop talking to the finance guys (like Fred )”

In my mentoring chats a frequent rant that the mentee has to endure goes like this. “Stop talking to the executive! … they are not the customer … get the hell out of the building … start working on getting the rest of the company on-side … the executive tax (reports/.ppts) must be paid, but that work is not going make you successful … its just a scorecard … get on with your tasks “

What sets off this rant? - It has been my experience that successful products/projects exhibit “communication & connectivity” far beyond the control of any individual, or team. The Market/Customers link with ones company in a huge number of ways. I’ve attempted to illustrate this in the “The End Game” below. The point is that the greatest volume of “communication/connectivity” is between the Market/Customer and the departments that deliver the product ( ie “Rest of the Company”. ) The whole thing takes on “a life of its own”. The Customers, Market and the Rest-of-the-Company interact whenever they need to, and the “product sells itself”.

Now focus on the “Start of a project” to see where the greatest volume of “communication/connectivity” is. Surprised? I’m not. At the start of a project the majority of the communication & connectivity is in “getting the product/project financed”. There is limited market interaction ( the level depends on whether you’re an incumbent, start-up, diversification, etc), and the rest-of-the-company is delivering on current products.

This difference in connectivity at the end of a project and the beginning of a project is the basis for my rant. The bottom-line is this: The finance guys know the most about your project & they are on-side … they invested in it. The product team needs to move on to the next phase of the project. They need to focus on the rest of the food-chain.

Movin’ On — A little wrist slapping for both sides The product team has to understand that once a product/project is financed, the Financial Investor group will change its focus to managing its investment (ie keeping score ). They are looking to you to create all those connections, and they will keep score. They’re not out to hurt you, they are still going to do everything in their power to help you. But they’ve made their investment and need to make sure that they can sleep at night. Which means that they’re gonna keep talking to you until you say, “no, I’m busy, and we have scheduled meetings already on these topics”.

Both sides have to understand that the best way to help the product team be successful is to ensure that it spends ~ 80% of its time on the project. The “finance guys” need limit their “scorekeeping” & “tax” requirements ( like 1-on-1 “I need to understand this” meetings, more detailed forecasts, please talk to this expert, pls do this it will only take a minute, etc ) ’cause they add up fast. Both sides need to let go and move to the next phase.

What’s Next? — The product team has 2 investor groups to get on-side. That is the “Rest of the Company” and “The Market”. Both of these groups are tough. Usually, the “Rest of the Company” takes longer to get on-side. Often, they will not get “on the band wagon” until there is at least one “customer success” story in hand. The more customer momentum, the more internal success you will have.

Thats enough for now. Have fun. The Product Team’s success is dependent on getting those two groups to interact so well, that you can let go, and let the product take on “a life of its own.” Your goal is to do such a great job at connecting such that you need to do “Nothing (but the corporate tax)”. Seem impossible ? … it isn’t … every successful project is like this It’s what makes marketing

Aside — yes I do get a kick out of Indexed

I’m still not sure that this is very clear. But I’m putting it on-line now. It’s in Beta

Leadership and the New Science

After reading the “Freak Out” post my buddy Seattle Dave recommended that I read, “Leadership and the New Science, by Margaret Wheatley“. I’m almost finished it and my first reaction is wow! This is awesome Just how many exclamation points can I put in a post

The concept of her book is simple — apply the concepts of 21st century science to organizational behaviour. The result is shocking and inspiring. It provides a great deal of hope for the future. This book must be read.

The key point that she focusses on is that “new science” is all about relationships and not Newtonian reductionism. Topics covered are: “Field Theory” ( provides an analogy of corp vision and EM fields ), Heisenberg Uncertainty Principle (Measuring one variable more accurately comes at the expense of less accuracy in other variables. You can’t know it all at the same time. In fact knowing more about one thing ensures that you’ll know less about another.), Quantum wave/particle duality ( if the experiment looks for waves it finds waves and if it looks for particles it gets particles), Schrodinger’s Cat ( admits to not getting it, but then applies it to the common phrase “you see what you want to see — so choose something nice”), self-organizing systems, information vs. content, and more.

Quotes - There are some great quotes on the Margaret Wheatley Wikipedia page. The first paragraph ends with this sentence

She describes her work as opposing “highly controlled mechanistic systems that only create robotic behaviors.”

Warning: For some this book may come off as too “New Agey” and “difficult”, especially when she starts off by noting “Fritjof Capra’s Turning Point (another book I loved) and reading some quotes from it. I urge all readers to to get/look past this and “listen”.

Bram Cohen on the BitTorrent Entertainment Network (Slyck)

Slyck is a great place to follow the filesharing/p2p industry. Today they have a good interview with Bram Cohen wrt BitTorrent Enterntainment Network (BEN). Cohen comments on protocol futures, clients ( uTorrent in silicon soon ), DRM, and Joost.

Bram Cohen on the BitTorrent Entertainment Network: “Bram answers the tough questions on the BEN.”

(Via Slyck.com File-Sharing News And Information.)

Infinera S-1

Tip to Andrew @ Nyquist Capital for posting the link to Infinera’s S1. This will take some digesting. Not sure if I’m the best person to review it ’cause I’m going in with “Rose Coloured Glasses”. I have immense respect for CTO Drew Perkins, he’s landed in the right spot twice now ( Fore Systems & LightEra ). Will this be his 3rd time?

For your RRSP, take a page from the CPP (Globe & Mail)

I’ve been “possessed” by “The Random Walk Down Wall Street” the past few months. In chapter 14 “A Life Cycle Guide To Investing” (2003 version) Malkiel lays out asset allocations appropriate to one’s stage in life. He then provides some ideas on “index investment vehicles” that would work.

I was hoping to find a detailed article on such a subject. “Et Voila” it appeared in this Saturday’s Gloge & Mail Rob Carrick has a full page piece on emulating the CPP via ETFs globeandmail.com: For your RRSP, take a page from the CPP. The CPP asset allocation is very similar to that noted by Malkiel and Carrick says that

The CPP’s pool of invested funds has averaged a 9.9-per-cent annualized rate of return over the past five years and is certified by the Chief Actuary of Canada as being solid for at least the next 75 years.

This kind of return isn’t “sexy” these days, but the overall strategy definitely passes “the sleep test”

After The Mills Shut down (Globe & Mail)

The Globe & Mail struck a nerve with me this morning. The articleAfter The Mills Shut down. is very close to home for me. It’s sad Unfortunately, I can’t see how small towns, like Midway BC, will avoid becoming “ghost towns”. What does one do when they have no tax base to pay for all the desired/required services like a rink, medical, school, etc? With, or without, the P&T mill this town living on shaky ground.

Valuing Volunteers - Minor Hockey

In my last volunteering post I found statistics canada data which noted that the replacement cost value of volunteering was estimated to be around double that of donations received in “core non-profits” and around 10x in “Hospitals, Universities and Colleges.”

This information made me wonder, “What is the dollar value of the hours donated to a minor hockey team?” I thought I’d start with the most inexpensive teams like H3 Initiation. The “Stats Can” data implies that the volunteer effort would be somewhere between 2x and 6x that of the club fees. This gives us the whopping number of $15k to $45k of volunteer effort Could this be correct I thought it would be interesting to work it out. ( $15k = 15 * $500 * 2 & $45k = 15 * $500 * 6.)

Data

• 3 hours of ice per week ( 2 practices and 1 game)
• ~25 weeks ( Sept/early-March )
• 1 head coach, 1 manager, 1 ass’t coach/safety, 1 ass’t coach
• Assume 15 players @ $500 per year club fees.

Hours Estimation ~ 600 hours

Total of 625 hours per season ( 25 weeks * 25 hours per week)

• Head Coach - 8 hours per week. ( 3 hrs on ice + 3 hrs prep + 2 hrs misc )
• Manager - 8 hours per week.
• Ass’t Coach #1/Safety - 4 hrs per week. ( 3 hrs ice + 1 hr misc )
• Ass’t Coach #2 - 4 hrs per week. ( 3 hr ice + 1 hour misc )
• TimeKeeper/Scorekeeper - 1 hr per week ( Assume ~ 12 home games)
• All the other multitude of little things are rolled into Mgr & Heach Coach.
• This accounts for selection month madness, a tournament, and parties.
• Total per Week == 25 hours ( a low ball estimate would be 20 hours ).

Q. What are 600 volunteer hours worth? A. $15k to $30k.

Good question. Do you measure it as “in kind” or “in opportunity cost for the parent volunteering?” I think that for the volunteer in question it is opportunity cost, they are taking time away from something to volunteer. If you get a highly paid individual to volunteer they usually bring something special to the team which can’t be replaced. So what is it? In our neighborhood stats canada says we’re around $50/hour. (I interpret this estimate to be a low-end estimate because it includes all of our neighbourhood, and the families playing hockey are in the prime of their careers.) Using this number provides the estimate of $30k = $50/hr * 600 hours. This is 4x the club fees and smack in the middle of the stats can number. If you value it “in kind” it works out to $15k = $25/hr * 600 hours which is the 2x Stats Can ratio.

This $30k is Realistic

I think the $30k number is more realistic because I haven’t added in the cost of a Minor Hockey Association’s Board of Directors and other non-team related volunteers who make the whole show survive. These people give beyond the call of duty For example, my colleague hockey Dave sits on a disciplinary committee. I can’t imagine

What Does This All Mean?

This information can be used in all sorts of ways. For me it is just a data point to understand just how much it really takes to run a “community team”. A lot. It also provides a metric for those who can only help by giving cash. It can also be used in the wrong way (ie to bash non-volunteers) that is not my intention.

Update: Sun Feb 25. I cleaned this up this morning. Added in “what does this all mean, “in kind” estimate, and links to job descriptions for Head Coach, Manager, and Division Coordinator.

clippings - WiMax-Clearwire / Optical / App’n Systems / Fisticuffs / Meetings / Message /

Technology

• Will the Clearwire IPO turn out to be McCaw Cellular or the third member of the WinStar and Teligent Group? - WRKoss - Read this. WR Koss digs in hard on Clearwire and doesn’t like what he sees. I agree with his logic, but betting against anything “wireless” lately has proven to be a bad decision. Unfortunately it seems that most of us are going with “beautiful wireless castle momentum” these days.
• Telco 2.0 - Just read their blog Martin G and buddies “nail” the current “telco” issues so well and describe it so well.
• Battery Man - Andrew@Nyquist - Andrew is determined find a “diamond” in the “optical transport rough”. I agree that Optical Transport has lots of room for product innovation. Especially if the Internet continues to trend towards “open” vs. “walled garden” architectures. But the optical “systems” market will soon be analogous to VOIP market for telcos — that is the $market will be much smaller than in the past. Nortel and Lucent aren’t going to replace old-line transport revenue with this new transport revenue. They’re going to look elsewhere to replace this revenue loss. They’ll invest in these new optical systems, but without much heart. That is why I believe that startups, like Infinera, will emerge to dominate the optical networking space. Good luck Andrew.
• The Semiconductor Cycle Game — William Trent - yet another post on gaming demand & SOX. It looks to me that people are on to the game because the SOX swing is “dampening” over time.
• DivX Launches Online Film Festival - NewTeeVee - I’ve got rose colored lenses for DivX They own the filesharing market which translates into licensing to all DVD, and home appliance makers. This has allowed them to work out many “real” world issues. They’ve got a good shot at “world domination” whatever that means. Bottom-line: I can build a beautiful castle in the air here … this shows why I’m such a mediocre investor. “I buy when I see that rose tint”.
• Cisco buys XML startup Reactivity - GigaOm - Cisco buys yet another “application” aware system. Yet again reinforcing my view that the action is in “hosted applications”, “serving up applications”, or “appliances”. The “distribution layer” is not as important ’cause the features here are “gelling into a stable set”.

Careers

• Pre-Board Meeting One-on-Ones - Ben Casnocha - I’m all for “greasing the skids”, but 1-on-1 pre-meetings are all about control. I find it good practice to avoid 1-on-1’s when working in a group. It just ’causes dissension on too many levels. If you’re a team … the team wins, loses, and suffers together. My hockey coaches all said the same thing, “There is no “I” in team. When we go individual … we lose … period”.

Marketing

• The Message is More than the Medium - The High Concept - Solid Marcomm points, with simple prescription for “start-ups” or “teams” inside big companies.
• If no one reads your post, does it exist? - Seth Godin - I’m learnin’

Fisticuffs

• IPTV & ALU, MSFT Soap opera - GigaOM
• Google and the Office game - GigaOM

Freak Out - Part 6 - What the !@#$ Does Marketing Do?

I read somewhere a few years back ( I think it was in Harvard Business Review ) that the right level of stress/frustration for an executive is when “There are only 2-3 days per month when you want to give up, set the building on fire, and start again”. This comment was very “eye opening” for me, I had thought that I was the only one who “suffered” thru these days.

It was good to know that I was not alone in the Monthly “Freak Out” or “Pit of Despair”. Turns out that we all have these days, but how does one deal with it under the microscope of a team looking for direction? How does one act? Do I where it on my sleeve? Or do I attempt to hide it? Teams are tough investors because they are making the toughest investment of all ( their time & careers ). There is also the challenge of executive pay. It is well known that corporate pay scales resemble the “long tail’ curve. Thus teams’ have little sympathy, they expect “positive” direction and answers from executives. They probably “Freak Out” more than me.

Unfortunately giving teams what they want and hiding the “Freak Out” is exactly the wrong thing to do. No one can predict the future. No one knows the “exact” path to success. For example, Burton Malkiel’s famous investment book “Random Walk Down Wallstreet” notes that Wall Street analysts can do a great job at crunching the “historical” numbers for any company, but the “valuation” of a company still requires a “forecast” of the future. Thus Wall Street analysts valuations are “educated guesses” with batting average like success. An executive can do no better , trying to predict the future will only focus ridicule and crushing morale issues in your direction.

The best policy is to keep the “story” open all the time (ie share the pain ), celebrate every success like there is no tomorrow, be organized in describing/tracking “the journey” to success, keep modifying the story as it changes (’cause it will… Nothing moves in a straight line), fail often, and try again. It takes a lot of courage & hard work to do this in the open, but it is the only way I know to get the team to buy in.

In closing If you are not “Freaking Out” regularly, then you’re probably not taking enough risk to succeed” . Also, if you’re having this day today, you can look forward to the ~17 good days per month where “you truly believe that you’re gonna change the world”

Note: I found the above more important when I was a low level manager …. ’cause I didn’t think I was an executive yet. I may have been far down the food chain and closer to my team, but I had little information with respect to the “whole project” and hence got myself in even more trouble when I tried to directly address a “Freak Out”.

Dark SidePlease take the time to track your “Freak Outs”. If they start to become too frequent, it is time to move on. I made this mistake in the fall of 2000 Your health is more important than your dream.

Link to full series

Pernice Bros - Discover A Lovelier You

Seattle Dave recommended the Pernice Brothers to me with the following phrase — “One of the ***sweetest*** bands I’ve found in a long time.” He liked “Yours Mine & Ours” best, but it isn’t available on eMusic. I went for his second choice. It’s awesome I’ve been listening to too much challenging music lately. This is very easy to get into.

I really like “6-Dumb It Down”. “3-Snow” kinda reminds me of “Midnight Oil“.

MySpace:Pernice Bros.Funny — The “About Pernice Bros” section includes the following text.

This is the myspace page for the record company of the rock band The Pernice Brothers, who swear to God that they’re going to get around to figuring out how to make this myspace stuff translate into record sales, but they’re approaching middle age, so it’s tough.

I find it ironic that I’m older than them and don’t buy anything without checking out a band’s MySpace page first. I told their people that, and their people replied. Very cool of them. But guys — MySpace is a great place to check out music.