Reflecting On 2020 and What is Next

Tesla Model X

2020 was a difficult year. The world shut down due to COVID for a good part of the year, my father’s Alzheimers got worse, and I was between jobs. I was at a point in my life where I was thinking of what is next in my life.

I have never been a good writer and shied away from writing. What is ironic is I come from a family of writers, with my aunt even being one of the judges for the Nobel prize of Literature. So today, I have taken to starting to write in an attempt o better express myself through the written form.

Over the past year, there has been a lot of reflection. I watched the cognitive decline of my father due to Alzheimer’s and protecting the world deal with the COVID pandemic. Watching my father fade away made me reflect on my life and what I want to do going forward.

Building and creativity have been a big part of my life. When I take intellectual risks and am outside of my comfort zone, I am at my best. Furthermore, I do my best work when my personal beliefs and what I am working on align.

During the COVID lockdowns in 2020, I had a lot of time on my hands. So I started looking for problems to solve. While helping my brother-in-law shop for an electric vehicle, I was reacquainted with a problem I experienced myself. Helping my brother-in-law buy his electric car and comparing it with my own hurdles of buying an EV led to unearthing an opportunity in helping shoppers demystify, find and buy the right electric vehicle.

What is Next -Electric Cars

I learned that many electric car buyers do not have a specific electric car in mind when shopping. This is because mainstream car sites did not provide the tools to help shoppers easily narrow down to the vehicles that best fit the specific needs. Also, 97% of the car market is still selling gas-powered cars, and electric cars do not get the love they deserve. So I approached some friends, and we worked through COVID building out what is now Electric Driver.

Business Model Archetypes Distilled

Business Model Lean Canvas

Business models come in all shapes and designs, boasting their own lingo from SaaS, freemium, B2B, B2C, and so on. But, ultimately, business frameworks can be derived from three simple archetypes. Ash Maurya succinctly boils down business models to the following:

Multisided Business Models 

Multisided business models generally work to deliver value to users and, in turn, work with customers to monetize. Take Yahoo as an example, where users may come to Yahoo to participate in fantasy sports. The user exchanges their time and attention consuming Yahoo content. In turn, Yahoo turns around and sells a derivative currency which in this example may be advertising impressions on a page or cookie data to advertisers. Yahoo is not charging the user directly, but rather the content is being paid for by advertisers trying to reach targeted shoppers online.

Examples of Multisided, Ad-based, Big Data, and not-for-profits

 

Direct Business Models

Direct businesses are the most common and straightforward businesses around. These types of businesses provide value in exchange for currency. As long as the customer has greater value than the product or service cost, you have a happy customer.

Examples of Direct Models: Software as a Service (SaaS), physical goods, retailers, service provider, and retail store

 

Marketplace Business Models

Marketplaces are the hardest type of business to pull off. Like a multisided business, they work with multiple segments of buyers and sellers. In a Multisided model, the entrepreneur can tackle and solve for one side of the model (in Facebook’s case, first building up users then eventually addressing monetization). However, unlike multisided businesses, the marketplace model must simultaneously address both the buyer and seller to be successful. Think of a business like Uber, which would not have been successful if it had not built the driver base and customer base at the same time.

Five Traps of a Poor Strategy

Poor Strategy Leads to Failure

Strategy is choosing to win and increases your chance of success (or de-risks the overall effort). Companies without winning strategies eventually will fade away. Roger Martin (Dean of my alma mater), author of Playing to Win: How Strategy Works, defined the five common mistakes that lead to a poor strategy.

Five Traps of a Poor Strategy

Do It All Strategy – Doing everything and failing to make any choices. Strategy is about making choices, and such a strategy is absent of choices.

Don Quixote Strategy – Taking on the strongest competitor first head to head or choosing to initially attack an opponent’s stronghold as part of an opening strategy.

Waterloo Strategy – Taking on multiple fronts at the same time fighting multiple opponents (and doing so weakly)

Dream That Never Comes True – Building high-level aspirations that never translate into a strategy

Program of the Month – Buying into a generic strategy that looks very similar to your competitors. Chasing the same goals in similar ways is a recipe for failure.

Understanding the five traps of poor strategy is a good start to knowing when you are not making the right kind of strategic choices. I was surprised how strategy is misunderstood in the corporate world. So many organizations believe they have a strategy, when they did not. Some companies chase what is en vogue at the moment, constantly shifting their direction. Other businesses try to be all things to everyone avoiding making choices.

Developing a strategy does not have to be complicated. Willingness to define where you want to take your business and what choices and trade-offs you are willing to take. Roger Martin has a blog that makes strategy straightforward and accessible that I recommend reading.

Marketing Segmentation Strategy Basics

Marketing Segmentation

Marketing segmentation is the act of breaking down a larger market into smaller groups. According to The Entrepreneur’s Guide to Customer Development a marketing segment must have the following:

  • Segments must be comprised of similar people who have similar interests
  • Segments must have access to each other (must be able to communicate amongst themselves) and look to each other for references

Geoffrey Moore states that when entering a market, choose one segment to establish your “beachhead,” preferably in an uncontested segment going after the early majority. If you find the right segment that lines up well with your product offering, you get the following efficiencies:

  • Learnings will come faster
  • dominate your niche and leapfrog to other segments afterward from a position of strength

a cost-effective way to grow your business is finding a niche where your product addresses a burning problem this segment possesses.

From Beachheads to Billions

Facebook started from a dorm room in Harvard to become a website with 2.8 billion users is a perfect example of using segmentation. When Facebook started, MySpace was the dominant social media destination. So Facebook decided to set its initial beachhead as students at Harvard. Once Facebook had conquered Harvard students, the website set its sights on Ivey league colleagues. From the Ivey league to all universities, Facebook continued to capture additional segments and learned along the way. As a result, Facebook leapfrogged from niche to niche to building momentum and growing its network. When evaluating a company, especially an early-stage startup, understanding how they plan to grow is a good test. Companies that identify niche marketing segments are more likely to succeed than companies that initially target broad populations.

Part of developing a strategy is clearly knowing who your audience is and what their pains are. Marketing segmentation is the bridge between strategy and marketing and is key in successfully growing a business.

Start with Early Adopters

Over the years, my marketing approach has changed. One of the books that really changed things was Geoffrey Moore‘s Crossing the Chasm; Moore introduced the technology adoption curve. One of the critical elements of growing a business successfully is how you scale your business. Identifying the right market segment can make or break your business. Geoffrey Moore segmented customers into the following:

  • Innovators: People who seek new technologies and products for the sake of technology itself.
  • Early Adopters: Customers looking for for a solution for a problem they have. These people usually are willing to see the upside in a solution and be more forgiving.
  • Early Majority: This segment is also looking for a product to solve their problem but typically wait for others to try the product out first. The early majority waits for the product to be more polished before they consider it as an option.
  • Late Majority: This segments trends to customers or businesses that wait for a product to be widely adopted, have all the kinks worked out and a wide support system. Think of the typical business that supports and uses Windows 7 while Windows 10 is available.
  • Laggards: This audience does not have an interest in technology/product solutions to their problems

When a business has limited resources, it needs to focus on the customer segment that has the greatest pain. Early adopters are an important starting point when a company is trying to work towards product-market fit. Reasons are as follows:

  • Early adopters actively look to solve their problems and with a product solve and not seek technology for technology’s sake like innovators do. Think the person who has the buy the latest gadget just for the gee wiz factor
  • Early adopters will see the potential in your product as long as it solves their problem.  The early adopter is a person on a mission to solve a specific problem.

Niches Not Sneetches

When a new business is launching, try to avoid head-on competition with incumbents. Instead, identify weakly defended segments, or create your own new segments where no direct competitors exist. Look to find a niche “beachheads” where your product directly solves the market segment’s needs.

Take Facebook, for example. Initially, it started off going after students at Harvard. Once it dominated the Harvard marketplace, it expanded to other ivy league universities and from their other schools, and so on. Eventually, it becomes a global force, but its first strategy was to dominate a small niche, then leap from adjacent marketplaces to form a position of strength. Amazon followed the same approach, starting with books first, then expanded to music, DVD, and now the largest marketplace.

Focus on Early Adopters First

Benefits of the focus are that it is easier to build momentum, word of mouth spreading (having two people refer your product) you have a small niche. The key takeaway for me is when looking to build out a new product or startup, find your early adopters and work with them early. Early adopters can be a great source of learning and your initial beachhead to grow your business.

Beginners Guide to Driving Local Traffic

Local Digital Advertising

Local advertising has been a challenge for many businesses. Before the rise of Google, newspaper classifieds were where businesses turned to reach local audiences. Google and other big tech companies shifted the business towards mobile and online services. Now, if you are a savvy business, you can utilize services like Yelp, Google Place, and local advertising to drive traffic to your business.

Local Traffic Sources

Local Search Tools: Adding your site to the Google Places lists your business in local search results. Your business will show up in Google maps, local search results allowing for more qualified local traffic to be driven to your site. In addition, Bing offers versions of local searches. One of the benefits of using local tools is the traffic you gain is evergreen and free. The downside is it takes time to build organic traffic.

Search Engine Marketing: Google and Bing offer local advertising that can be targeted using zip code, city, state, and keywords. Search engine marketing platforms allow you to buy traffic based on your intended goals. You can buy traffic on a per-click on an impression or per-transaction basis. While search engine marketing can be effective if managed correctly, the downside is you have to set aside regular funds to support your traffic growth.

Social Media Marketing: Just like search engine marketing, social media sites have embraced local advertising. Facebook, for example, offers similar advertising capabilities that can be targeted based on location for comparable rates. What I would call out with social media advertising is to be aware of the user intent. What I mean is to think of what a user would use on that platform. For example, if I buy a TV, I would likely start with Google and search for the best TV. Social media has its uses but be aware of the intent of your user when using that platform.

Programmatic Advertising: Real-time auctions and automation has allowed advertising platforms to target local users easily. Companies like Centro, The Trade Desk, and even Amazon offer display advertising through a network of sites, and you can purchase on an impression or per click basis.

Test Early, Optimize and Know your Acquisition Costs

Start with free listing services like Google Places, Yelp, and Bing Places. Suppose you consider advertising start by experimenting. Learn how each channel resonates with your business offering. Experiment with different messaging and see what works. Figure out the lifetime value of your customer and define what you are willing to pay to acquire a customer. With some trial and error, you can acquire local traffic cost-effectively and grow your local business. If I missed anything, please shoot me a note, and I wish you the best of luck.

A beginners approach to do-it-yourself SEO

One of the issues I ran into when I started my site was traffic generation. Several months ago, I assumed my traffic to be generated through Google paid search when I wrote my business plan. What I did not take into account was seasonality and intensification of competition. In October, when my site launched and I entered the paid search market, the prices were out of my reach (Also, I learned that I did not have the full understanding I thought I had for Google Adwords).

As a result, I had to turn to SEO and more organic means of traffic generation. However, searching online through sites and SEO-related blogs left me wondering whose point of view was legitimate and who was not.

What I did was turn to people within your network. Luckily for me, I had a friend who was a former Yahoo technical manager, and he had a solid understanding of SEO.

He was a great starting point and pointed me towards Matt Cutts blog. For those of you who don’t know who Matt Cutts he heads up the Google team that determines what sites are legitimate and spam. He is one of the go-to guys for Google SEO, a recommended read, and a good place to start.

Beyond there, I turned to books to get some fundamental understanding. My Criteria for purchasing a book was as follows:

1. Obtain a book with a recent release date. With the speed technology changes along with lead times for printing, the freshness of content becomes an important factor.

2. Find authors with expertise in the field and, if possible, some track record.

I ended up getting two books, but only one I feel is worth recommending. The Art of SEO was a book that provided me with the fundamental understanding of making SEO decisions and building traffic white hat style (not breaking the rules google puts down that can potentially get a webmaster penalized).

SEO Plugins Can Help

If you happen to be using WordPress, I recently tried out and fell in love with the Yoast SEO plugin. What I really like about the Yoast plugin is hiring an SEO consultant for your site. The plugin scans my content for readability, proper English structure, and ensuring my content aligns with the keywords I am trying to target. On the backend, the Yoast SEO plugin handles many SEO functions to make SEO easy and accessible. To get the SEO automation, you will need to purchase the premium edition.