Business Models, New Blog and Missing Links

It's been a few weeks since I've posted any updates here, but for good reason. I'll tackle the title of this post in reverse order, so bear with me on where this is going.

Missing Links - For a while, I was using Fridays to post a set of links that I thought pointed to interesting topics that had relevance back to topics we covered in the MBA program, or pointed out future trends I thought my classmates would benefit from.  I've gotten behind on the weekly posts for a couple of reasons: [1] work has kept me busier than normal (not a good excuse, everyone is busy), [2] I'm finding that between Twitter and RSS feeds (mostly blogs) that I am starting to read and consume content in much different ways than just a few months ago and it's not as convenient to aggregate links. Too many concepts and ideas build off the other. I'll do my best to keep the links coming at least bi-weekly.

New Blog - While courses like Organizational Behavior and Leading Change were some of my least favorites during the program because they felt very theory-centric and terminology-centric, I'm finding their applicability to be some of the most important in my current business.  For example, in the IT industry there is a significant interest in a new paradigm called "Cloud Computing". Cloud Computing allows companies to continue to utilize computing and application resources to service their business needs, but it offers the ability to migrate IT from a CAPEX burden to a OPEX cost model that better aligns usage with needs. While most of the IT industry is debating the technologies to enable Cloud Computing, very few people are diving into the organizational changes that will be required to make this model a reality. So for that reason, I've decided to start a new blog called "Clouds of Change" to focus on the people and organizational elements required to make Cloud Computing successful for businesses. If you're interested in the discussion, or how it may impact your business, I invite you to visit the site.

Business Models - As I've mentioned before, one of my entrepreneurial projects is a new business called Gracely Girl Designs.  This is a business that my wife leads, focused on fun, unique, handmade clothing for children aged 1-10 years. The business is still only 6 months old and is a hybrid between an online eCommerce store and a physical store.  30 years from now, after I've retired, I will remember two distinct things from B-School: (1) In the long-run, it's very difficult to sustainably make $1 in profit (or any amount), (2) There is a HUGE difference between creating a great product and creating (and executing) a great business model.

The reason I bring this up is that we tend to get three types of comments from people at shows we attend. From shoppers we get lots of, "those are so cute, we love your designs". We also get plenty of, "do you think you could make me a ?"  From other vendors we often get, "hmm, do you make those yourself?" (wondering if they could make similar items).  We love the compliments and do create custom orders for unique sizes and color combinations, but we often find ourselves having to refer customers to other sources (eg. Etsy) for items that are outside of our target market. Those orders don't fit into our business model (for various reasons). And for other vendors we simply say "yes". Being a hybrid (online/physical) may or may not be the optimum business model in the long run, but we're using it today to allow us to build up the customer base in our local market. Our customers are often mother's of small children, a social network that lives to make recommendations to friends and accept new ideas. We also hope to leverage that to expand our footprint over time, which should drive the online portion of our business. We'll see, it may or may not work out as planned, but the size of the business allows us to rapidly experiment and adjust the model as customer demand changes.

How to use Twitter - An Introduction

Brian Turner from Team 4 gave an excellent presentation on Twitter during our StratMktg class. Lots of questions about why someone might use Twitter, as well as plenty of questions about things like Security, Privacy, Following, so I thought I'd try and give some basics. This is by no means an exhaustive list, but rather some example and guidance from someone that has been using for business purposes for a while.

Business vs. Personal...or Mixed: This is probably the first decision that someone should make if they decide to start using Twitter (or any social media service). Do I want this to represent personal-me, business-me, or all aspects of me? This is very important, because while you may have great business tweets all week, the tweet about having too many beverages with friends at the Britney Spears concert might destroy any goodwill you created. For others, this diversity adds to the personality you're trying to convey about your company. Either way, it's a decision that should be consciously made up front.

Giving & Receiving: There are two basic concepts in social networking and social media that need to be understood before jumping in. For some people they are initially counter-intuituve, but they are critical if you hope to gain anything from the tools.

1. Social media/networking is about having conversations, two-way or multi-way. It's about connecting with other people that have a similar interest, or who wish to have discussions about a specific topic. It's not about publishing content that is speaking to someone else. That's what newspapers or TV news does.
2. As with personal conversations (face-to-face), you typically don't receive much if you aren't willing to give something to the conversation. Sure, you can sit at a dinner table and listen to great stories or conversation, but unless you say something, nobody is going to remember that you were there. So while it may seem concerning to share ideas, opinions, details with an online community, it's one of the critical hurdles needed to truly participate in this environment. NOTE: In a corporate setting, this doesn't mean you should break all corporate communications rules. In fact, many companies have policies in place to protect themselves online.

A last point to remember regarding Give / Take is that you may not always like what others say about you or your company. How you handle this is extremely important. For many, the initial reaction is to get defensive or fight back. But this may not always be the best course of action. It's important to realize that this is now a public forum, and it can be just as important to allow customers to vent frustrations ("product is poorly designed", "service was too slow") and learn from them, than to try and limit their ability to express an opinion.

Following and Followers: At a basic level, anyone can follow anyone on Twitter. Just like anyone can visit CNN.com or ESPN.com to gather information. What you put on Twitter is an information feed about yourself or your company. How much you share, when you share it, or how you share it should reflect the image you're trying to get across. That might be formal or casual, fun-loving or serious, personal or business. And if you present something interesting, you can expect to have others want to "follow" you. These might be friends, business partners or complete strangers. For those concerned with security or privacy, Twitter does allow granular controls over who follows you, how they are allowed to request a "follow", and if you'd eventually like to "block" them. But I'd suggest that in order to truly get value from #1 (above), the more open you are, the more connections you'll be able to make. And you never know where that next great connection is going to come from. The next great partner, the next great job offer, the next great customer order. But it definitely won't come if you always have your "blockers" up.

Announcing Information: A simple way to get started with Twitter is to use it to announce information about your company (or personal interest). Product announcements, new blog posts, breaking news, or coupons/specials are all great ways to keep customers updated about what's happening that could be valuable to them. While this isn't necessarily a two-way conversation, it is a simple way for customers that love your brand or products to follow your latest activities.

Enhancing Customer Support: I've written about this before. Twitter in no way replaces a friendly voice, but it can augment the overall experience. Especially for those situations where people want immediate updates. Companies like Zappos and Salesforce.com have embraced this community and are embedding it into their operations and products. And as more Gen-Y people join the workforce, they are going to be expecting the availability (and integration) of the tools that they use in their personal life, so getting ahead of this now is very important.

Solicit Feedback from Customers: What would you like to know about your customers, or products or service? Why not ask them? If you generate enough of a following (see #2 above), you'll start to get feedback. It may not all be positive, but that's OK. We learn more from problems than pats-on-the-back.

Create a New Image: Do you wish that people, customers, partners, media thought you were something different than they do today? This is an opportunity to help shape that new image, and get immediate feedback to the changes.

From a personal perspective, I use Twitter as a extension of my efforts to market our products and services, as well as connect with customers. We announce new products, events, and services. We have industry discussions. We listen to what our customers are saying about the company, as well as our competition. While I can't draw a complete correlation, we have found that the traffic to our content sources (website, blogs, online libraries) have been up 50-100% month over month since we began more actively using Twitter as a means of managing information. Obviously results will vary from company to company, but so far we've been happy with the return on a very small investment of resources and time.

Connect the Dots - Networking your Social Networks

As I was flipping through HBR this evening, I came across an article about Social Networking, written by Alex "Sandy" Pentland.  Dr. Pentland runs the Human Dynamics group within the MIT Media Lab.  Back in the spring of 2007, I had the good fortune to meet Dr. Pentland, get to know about many of the really cool things being built within the Media Lab, and actually work on the project that is described in the paper.  My former company was a Media Lab sponsor and we co-funded some of the initial work in this area of dynamic social networking.  Needless to say, it was a nice surprise to see something you worked on (albeit slightly) published in HBR.

So what does this have to do with MBA programs?  Actually, quite a bit.  We covered social networks briefly in LOB with Dr. Miller, but only to the extent that people need to be aware of where the strong vs. weak links are within their companies.  Social networking came up again this weekend, during a discussion in our OpsMgmt class, as we discussed the connection between groups within the production process (product mgmt, engineering, production, etc..). What Dr. Meredith pointed out is that many times one of these groups will be outsourced, and then eventually other connected groups move as well because the communication channels break down over distances.  

This latter point seems to be proven out in Dr. Pentland's MIT research.  As much as I enjoyed using technologies like Telepresence, distance has consistently proven to be a huge barrier to effective communication and collaboration.  So why does this matter?  It matters if parts of your business are moving offshore, or great distances from where you are located.  Chances are, if that group is really important, then they are going to get tired of the communications breakdowns and look to move your function closer to them.  All the more reason for US companies to step up their efforts to bring expertise and skill-levels back up to competitive levels with the rest of the world. Unfortunately, it's more than just low-cost labor that might move jobs overseas.   

Strategic Marketing Presentations

One of the things I really like about our Strategic Marketing class is that it is primarily focused on analysis and application of marketing as it relates to our current role (or future role).  It's not heavily focused on quizzes and exams, which often tend to be exercises in memorization (imho).  One of our group projects for the class is an analysis and presentation of an area of marketing that we believe is new, interesting and potentially of use to our companies.  The topics are chosen by the teams, with the goals being both team analysis and teaching something new to the rest of the groups.  I wrote about the Team 5 topic in an earlier post, but the rest of the team projects were announced this weekend.  I haven't seen their abstracts yet, but I thought it might be fun to list some of the things I'd like to learn, and see if any of those aspects get presented.

February 7: Team 1 – “iphone apps”

• How does Apple market the AppStore to developers vs. how Facebook markets their platform (Facebook Connect, Facebook Applications) to developers ?
• Is Apple doing enough with the AppStore concept to leverage developers (or customers) to look for applications that could work between Macs, iPhones, AppleTV, etc..?
• Apple is claiming huge download numbers for AppStore.  What flaws do you see in their model or execution?

February 21: Team 3 – “Search Engine Optimization”

• Beyond paying the highest bid for keywords, what other techniques are companies using to get on the 1st page of Google searches? (Digg, etc.)
• Are the SEO techniques and strategies different for company websites vs. personal blogs?
• Do you expect SEO models will work the same with mobile computing as they do today with desktop computing?  Does the location aspect of mobile computing offer new SEO paradigms?

March 21: Team 4 – “Social Networking”

• If you were VP of Marketing, what would your mission statement look like for using Social Networking to enhance aspects of your company?
• Success with Social Networking requires a willingness to be open and give to the community, which is often counter-intuitive to companies used to controlling information, branding, etc..  What have successful companies done to find the right balance of control vs. openness?
• Talk about how Zappos is using Twitter to impact many aspects of their business, especially as it relates to customers and the community that looks to Zappos for footwear.

April 4: Team 2 – “Interactive Marketing”

• Is it a good idea to create forums where your customers can have interactive conversations which could turn into interactive marketing, without your company being in the middle?
• What are the keys to creating authenticity in interactive marketing, as opposed to coming off as phony?
• Are some groups within a marketing organization (or any part of the organization) better suited to drive Interactive Marketing initiatives that others?  Is there a minimum or maximum distance from the customer (or target) that is required from that organization?

April 18: Team 5 – “ObamaNation: Lessons from the Front Lines of Social Media”