Nesheim Online

BUZZ MARKETING: Learn it well to build a great startup

 

Buzz Marketing = "Capturing attention of consumers and the media to the point where talking about your brand becomes entertaining, fascinating, and newsworthy."

I saw that definition yesterday in a presentation of a business plan from a student team in my class at Cornell University. They understand a powerful element in building your startup's unfair advantage. When you get it, you'll be far ahead of your competition.

Young people think advertising is how to announce your startup and spread the word about your cool new product. But that is not how things work in the real world. Advertising is used to reinforce a brand of a product that has already become branded. It is expensive because there is so much waste to advertising. New brands are build with public relations. Advertising reminds people of the brand you have already built.

Serial entrepreneurs use "PR" instead of advertising to spread the news. More specifically, they are masters of buzz marketing. That is what gets people around the globe emailing, blogging and text messaging about their cool new startup product. China or Chile, U.S. or United Emirates, they all are part of buzzing about new products. It is global. It is now.

The old PR methods are aimed at getting reporters to write stories and reviews about the new startup product. That takes time (magazines prepare stories three months in advance) and money (to pay a PR firm for its staff to call reporters and promote your startup product).

The new PR focuses on stimulating bloggers to start stories about your new product and spread the word of mouth over the internet. That is low cost and very fast.

When picking a PR firm, interview candidates carefully about buzzing. Influencing the new world of bloggers is a new art. Few PR professionals are yet experts at it. So interview bloggers to ask which PR people get it and understand how to talk to bloggers. When choosing, get your PR firm candidates to show you examples of their successes with influencing bloggers. It is difficult to do, and few PR staffers yet do it well. It is a work in progress to learn the ins and outs of the strange new world of internet media communications.

Be innovative. Especially about what you do with events to get attention. Event marketing has proven to be very productive for startup buzz marketing. Events can be one time internet contests or raffles (give away an Audi TT and you will get a lot of attention and a long list of interested end users. The cost of a car is less than one month of advertising.). Or consider sponsoring a charitable golf tournament for handicapped athletes (just supply your employees as weekend volunteers). There is no shortage of stimulating ideas to pursue.

Be worth talking about, excitedly. You must stimulate the "Wow!" factor in people. They have to immediately get what you are communicating and be eager to instantly tell their friends about it. This morning I emailed news about gentle robotic surgery to a friend facing brutal open heart surgery. Word passing is triggered by emotional stimulation. Even about industrial machinery. Yesterday I had graduate students speaking excitedly about moving dirt on farms to get rich. You must find out what in your cool product will turn on your targeted bloggers so word starts to spread quickly. If bloggers are bored, you'll not get far with your new product. It takes a lot more than "twenty percent less energy required" to get the end user excited.

Use real substance in your product offering to stimulate bloggers. Avoid trying to be provocative just to get attention about your boring product. Your boring may be able to be changed to stimulating if you apply a bit of creativity. Here is one example: shift from talking about the reliability of your manufacturing machine and instead move to talking about how it will not set the customer's factory on fire. That triggers emotions and the buzz starts.

BOTTOM LINE: Getting buzz marketing working is central to your marketing communications program. Key to buzzing are bloggers. This is the era of bloggers. They start passing the word along the internet. Find a PR firm to assist you creatively plan and execute so word of mouth is stimulated and goes to work for you. It is a lot more effective and less expensive than advertising. Serial entrepreneurs can do this in their sleep. It is second nature to them. They know its power and devote serious, innovative and determined time to doing it with excellence. When you can, you'll be far ahead of your competition as you build your unfair advantage.

NAME IT OR LOSE IT: What is "It"? and What are you aiminng to dominate?

"What have you invented?"

"What is this new market category you are aiming to dominate?"

Those are two of the biggest questions startup CEOs will be asked. You have to be able to answer them on the spot. Your responses are central to the formation of your unfair competitive advantage. Without them, you are like a cork in the proverbial startup ocean, rudderless, moving at the will of the waves, tossed to and fro.

Here is a fine example to get your thinking going:

After Edison invented the cylindrical talking playback device, others produced alternatives, some on disks. The public called all of them “talking machines.” All were expensive and unreliable players until Johnson invented a solution for Berliner’s wobbly rotating disk. They decided to call it a “phonograph”. The company they formed was Victor Talking Machine Co. They named their player the Victrola which became hugely popular. It’s icon was the fox terrier dog sitting with its head cocked to one side, listening to a phonograph. Johnson pioneered the mass production of entertainment. He transformed entertainment from events performed live for limited-sized audiences into today’s vast, multimedia industry. [From Investors Business Daily,  2008 March 4].

You need a similar story. The thing you have invented needs a name. The market segment you are competing in needs a name. Both have to be part of your exciting story about your quest to transform a vast market.

BOTTOM LINE: Try inserting your name for Johnson's and then substitute your company name and so on. Keep crafting until you get a story that works for your company. When you do, you'll be way ahead of your competitors and well on your way to becoming the leader and gorilla of a new market category. Like Amazon, Google and [put your company name here]. It is central to forming your unfair advantage.

Great Startup Messaging: Look at this rare example of positioning a startup's story "just right"

Today I was alerted to a $19M round of financing for a startup. When I got to the web site of the new enterprise, I was very impressed. So I decided to share with you today what I emailed about that startup to a world-class new enterprise that I am coaching as it prepares its story for its next round of financing.

"I wanted you to see a rare, outstanding, high quality example of a well positioned startup.

Reading their website reveals what it takes to stand out, with believable credibility.

Mayfield lead the recent $19M round.

 
http://adchemy.com/html/team.html

 
Some items to note:

= The whole web site is simple and clear, part of a well done story with lots of uniqueness and Wow! in it.

= Clever choice of company name (part of the opening positioning statement on the home page).

= See the banner at the top of the page and note the logo name is the logo, NOT a separate graphic + name).

= Note and read carefully how the people are positioned (read the paragraphs for each person).

= And see what they did to declare their investors credentials.

= Founder is a serial entrepreneur with successes in his past and it shows it on this web site.

= Looking at the Careers reveals how they are thinking about their business model and marketing.

= And on the Careers page you can read the pre-Mayfield positioning and how the company was presenting itself in its recruiting message.

= Read carefully the About Us page to see how intense the founder CEO is with his company culture and values statement (reminds me of Google’s early days). Here is a related blog the founder posted http://foundread.com/2007/12/18/values-proposition/

= I would say the serial entrepreneur founder understands how to build an unfair competitive advantage.

 
Hope I don’t sound too much like a professor. But this rare example of a startup well positioned got me excited and I hoped it might encourage you as you are crafting your story."

That is worth studying, at least twice.

BOTTOM LINE: It is a huge challenge to craft the story for your new enterprise. Examples help. This startup's story is one to consider as you craft your story. Try to copy it and alter it using your existing thoughts about your company. That will tell you where you have to go to work, editing what you were going to say. I argue this is the heart of the startup game: crafting a story that is compelling to the key stakeholders; investors, employees, media (especially those quick to respond bloggers) and strategic partners and (if you have any yet) customers. When you can do that with a simple story, one that is compelling, you will understand how to build an unfair competitive advantage. Well done, Murthy Nukala and team at Adchemy!

WORD POWER: A real startup example shows the power of owning a word

Last night I did an event for Cornell University, a hotbed of entrepreneurial teaching and high tech engineering. I met the founders of TokBox , Ron and Serge, both Cornell graduates, excitedly talking to attendees about their great startup.

This morning I did some digging ("research") on the company to see what elements make up its competitive advantage.

I found the company now can claim it owns two words.

The blogging world (first to report financing of TokBox by Sequoia Capital) observed the TokBox service was "fast and simple" to set up and use.

Owning those words (in its industry category, video chat) is very powerful. It differentiates. It is attractive to end users (The CEO, Serge, said the users of the service "are in the six figures and growing fast."). That rapid growth impressed me.

PR work produced headlines in the New York Times: "Video Chat Service Aims to Follow Path of YouTube". VC cash to pay a good PR firm can get your business noticed and above the noise of the crowd. That is worth pure gold.

Toyota owns "reliable", Lexus owns "luxury", Scion owns "hip", Volvo owns "safety", and so on.

That is what positioning is all about: it is a place in the mind of the customer that your company occupies and no one  else. It is about psychology, not technology. It is not about a list of features.

I could go on about the other elements of the company's unfair competitive advantage (revered investors, innovative advisers, brain trust techie staff, personal drive, and so on) but for now I'll stop with my congratulations to the founders ("Go get'em, Ron and Serge!") and make my main point of the day: Find a word to own!

BOTTOM LINE: Owning a word is powerful. It gets bloggers excited. It reflects why end users and customers get excited. It is your positioning hub. When you own it, no one else will. You will have achieved differentiation. Then all you have to do is reinforce that position by using PR to spread the word. So be wise, figure out what word to own. Don't let your competition do it for you! When you have found your word, you'll have added a very powerful element to your unfair advantage.

TRY THIS GAME = MATCH NAMES WITH PRODUCTS FROM CES 2008: Can you match the name with what the product does?

And on come more announced products that caught the headlines at CES 2008.

Consider the merits of the following by trying to match the name with what the product does:

PRODUCT NAME

1. Vudu XL
2. Rolly Music Player
3. HDC-SD9 Camcorder
4. Cruzer Titanium Plus
5. XEL-1 OLED Television
6. Slingbox PRO-HD

WHAT THE PRODUCT DOES

• An 11-inch fully digital next-generation television
• World's smallest high-definition camcorder
• Small robotic music player that dances and flashes lights to music
• High-definition streaming set-top TV box
• Television set-top box for watching movies from the Internet
• Portable storage device with online backup

Give this matching game a try before you look at the answers at the bottom of this blog. After looking at the answers, then ask yourself what you would change to improve the given product name.

• What names suggest what the product does?
• Which imply a benefit to the end user?
• Which are easy to recall? Spell?
• Which are unclear, confusing, misleading, even a surprise when matched to what they do?

BOTTOM LINE: The name game is a big challenge. It is very important to do well for startups. New enterprises need as much going positive for them as they can get. Confusion and boredom are enemies. It is worth the time and effort to create great product names. Names can add or detract significantly from your unfair competitive advantage.

ANSWERS

1. is television set-top box for watching movies from the Internet from Vudu
2. is small robotic music player that dances and flashes lights to music from Sony
3. is world's smallest high-definition camcorder from Panasonic
4. is portable storage device with online backup from SanDisk
5. is an 11-inch fully digital next-generation television from Sony
6. is high-definition streaming set-top TV box from Slingbox

CATEGORY AND NAME CREATION AT CES 2008: Learn to name things and then you'll win!

Consumer Electronics Show 2008 just opened and already is generating a lot of excitement about new products and technologies. What are you looking for at CES this year?

It may sound strange, but I look for something different: I look for names.

Names are the bold neon signs that announce new waves have arrived, waves that startups will be (hopefully some already are) surfing to IPO successes.

Names also are powerful lessons in winners and losers in the marketing battles worth fighting. So let's look at a couple that the media has picked up on (note "that the media have picked up on" because if they don't, then your category is boring and you have lost).

• "What is a device that is between the size of a cellphone and a laptop?" That is the question central to a boiling debate, some say cat fight, between the marketing departments of Intel and Intel's rivals. Intel calls the new category "MIDs", for mobile Internet devices. Intel's rivals are teamed up trying to promote -- without much success yet -- a similar category they call "UMPCs", for ultra-mobile PCs.
  • Now take a pause, step back, and ask yourself "Which name do I prefer?" and why?
  • I bet MID catches on for one simple reason: It is easier to pronounce. Try it right now. The winner will roll of the tongue most easily. And it will be easier to spell without error.
  • And MID is most intuitively suggestive. For instance, "middle of the market between A and B" is easy to recall. But a thousand confusing pictures pop up in my mind when I think about something that is "ultra" and "mobile". UMPCs sounds more like a breakfast cereal than a cool technology device.
  • I recall when Regis McKenna, the icon pioneer of Silicon Valley marketing, positioned a new product for a startup. It was the size of a mini computer with the power of an entry level super computer. Regis named it a "mini-super" and the category was born. The media latched onto it in an instant. The inventing company went IPO.

• "What is the new technology that standardizes the digital cable industry?" That is now public, it is called "tru2way". I like the name, it works well for me for the following reasons:
  • It introduces a new category of product possibilities: Hardware companies can design innovative products for television viewers using a single standard. Bingo! A new industry is born.
  • "tru" sounds exclusive and demotes the old technology (stuff you bought last year is "not-true" suggesting you are getting less than the best when using the old stuff).
  • "2way" sounds interactive, like the Internet is. That is better than watching a one-way TV screen. It has promise, hope, even a bit of imaginary excitement.

• "How can I transmit television signals to cell phones?" is an unsolved, very difficult technology problem. Until LG Electronics announced "MPH"' at CES. It stands for "mobile-pedestrian-handheld." It delivers digital television signals to cell phones. I like the name.
  • It suggests very fast (in English), miles per hour.
  • It is easy to recall.
  • It is positive.
  • The words behind it are meaningful, need no explanation, point to both an end user and a device. That is hard to do, but this name pulled it off well.

• "What is a good company name if the business is curbing electronic waste?" Try this one: "Green Plug Inc. It is simple, has green implications, implies beneficial value (plug the hole up), is easy to spell, with instant recall. Not bad.
  
  
• "What do you call the technology that cuts energy use in electronic devices?" How about "power factor correction" for the category of technology? That's what Marvell Technology Group named it. Then Marvell announced their Digital PFC Controller: 88EM8011 at CES. Ugh! What a letdown! Semiconductor companies name products that way, losing marketing advantage: Who wants to buy a number (boring)? I'd rather have an Intel Core 2 Dual Processor. Much more exciting!

• "Which will win: Blu-ray or HD DVD?" The outcome came today with the announcement that Time Warner was backing Blu-ray at CES. Why was Blu-ray successful?
  • Would you the consumer like a thing that used Blu-ray or what-ever-those-initials are?
  • Blu-ray is pretty. HD DVD is dull, boring, industrial grey.
  • Blu-ray stirs emotions ("It has a ray inside! Cool!"). HD DVD is generic, an undistinguished commodity.
  • Guess who invented the name HD DVD? I don't know but am confident it was the techies. They love initials. They are introverts. They have conservative bosses who do not like to stand out. Bold is a swear word to them. Bold is pure gold to great marketers. Blu-ray is bold. Do you have bold?

BOTTOM LINE: CES 2008 has a lot to learn in it, especially names. Names for fresh categories, products and technologies, all of them are for you to look at and learn from.  Naming is hard. It is never easy. Notice each of the points above begins with a question. Do you know the question to ask so you can name the answer? It takes focus to get there. That means saying "No" to a lot of potential customers. And it requires taking a bold stand, away from the main stream (What everybody else is saying [naming].) But that is how the greats do it. It produces Intels and Googles. It is a sign of greatness. Learn that and you'll be well on your way to creating a powerful unfair competitive advantage.

WHAT IS YOUR "WOW"? Your story has to sizzle to get great people, powerful investors and media stories

"Wow, what a story! Wasn't that great?"

That is what you want potential employees to say. And powerful investors. And influential reporters.

"Wow" gets the great people and fills your in-box with emails from great investors.

What is "Wow"? It's the magic in your story. That silver bell that rings in the head of the listener. It is the trigger of emotions. It is so compelling that people jump out of their seats to cheer when they hear it.

I've seen Wow happen during presentations of bplans to VCs. I've watched eyes light up when founders told skeptical young people about their vision for the new enterprise. I've seen reporters lean forward in their chairs until they nearly fell on the floor as the story was told by the CEO. And I've watched customer candidates converted in mere minutes from bored to passionate during the biz dev person's presentation.

What is Wow? It's the combination of story elements that is central to your unfair competitive advantage. It is not one thing. It is several things assembled into an amazing whole. It is just like the story you tell to your child, about the adventure in which the hero ventures out, kills the dragon, saves the princess and becomes king and hero, cheered by the people of the land.

I'm not kidding. It is that simple. That is the outline for your startup story.

Do you still doubt me? Well, try seeing it through the eyes of the Chief Marketing Officer: your story is about the adventure that the founder will go on, kill the current market leader (the old way of solving the giant problem), save the customers (a huge amount of time and money) and become the gorilla of the new market space (category), revered by the mass media.

"Wow" does that. It is the core of your story. Without it, don't even begin to start trying to impress people. Don't even bother. But with it, you are golden, miles ahead of your competition. Like the beautiful maiden, you will be sought after by all the handsome men .

Your Wow story wins it all. The stories of competitors wilt in comparison. "Hey, that (the other story) was nothing compared to the story I just heard (yours)!" You win, they lose. Winner takes it all (people, money, fame).

Some CEOs are timid, cautious, don't want to overstate what might happen. If that is your nature, step aside, the current era of startups is too rich for your blood. They'll strain your soul, give you a heart attack, make your life miserable. Let someone else lead. Follow and learn, perhaps you can eventually understand how to do this.

I've been watching an amazing team of co-founders in Asia grow a spectacular business, and they understand what I am talking about. Their story has attracted the finest techies in the world in their space, has reporters demanding to know what is coming next from the company, and investors flooding their email in-boxes with offers to invest. Wouldn't you like to be there? This company has Wow. Now it's your turn to create the Wow for your startup.

BOTTOM LINE: Stories that are based on facts in colorful PowerPoint graphics that are slickly presented do not get the people, money or stories. Wow gets it. All of it. It is the emotionally exciting core of your nuclear reactor that will power your company to greatness. It is the kind of creative energy that gives your competitors sleepless nights. It is what makes the Googles great. It is central to your unfair advantage. Discover it and you are the winner. I wish you the very best in your quest (it is not easy to discover). Get started, right now.

MARKETING NEWLY DEFINED: This core function is changing rapidly - capture the new energy or lose power and fall behind

In my last blog, I reported that CMOs (Chief Marketing Officers) of public corporations last 26 months in their positions on average. That is short! The same is true for CMOs of startups.

Why such a short lifespan?

I think much of it is due to the rapid changes that technology has been making on the marketing function.

Try this on for size: In their December 3, 2007 column in Business Week, Jack and Suzy Welch wrote "Marketing is an increasingly complex science of data-mining, number-slicing, and niche-segmenting." This was in response to a reader's question "What are some of the best approaches to improving marketing?"

In other words, marketing has become much more than traditional marketing. It is more complex than the tired business school version that says marketing is "Product, Pricing, Promotion and Production." Savvy corporate MBAs already know the avalanche of complexity has arrived.  So do the Google boys and their competitors.

Why is this important to a startup CEO?

Well, for one reason, because in the end the CMO of your customer is your customer. 

You have to make the CMO in your targeted customer company at least more successful (and preferably a hero) with your social network or your gadget or your service. The CMO is central to all businesses. When the person in that job (for the next 26 months) is a hero, then so is the CEO and entire company. If the CMO flames out or cannot deliver, then everyone loses, including you and your entire startup.

Another reason is that the startup CMO's job is has also become much more complex for new enterprises.

I see the primary job of the startup CMO is to find customers. The job of the leader of Sales or Business Development is to convert those customers into invoices. The customers are increasingly a wide range of corporations each of which is seeking to appeal to different groups of end users. It makes a map of relationships look like a bowl of spaghetti.

So respect your CMO's challenge. Learn as much as you can about what makes a CMO a success or failure. Pick the best you can find. And get ready for a wild ride as your CMO starts looking for customers.

BOTTOM LINE: Startup life continues to get more complex daily in this booming global economy driven by Internet exploitation. Allow for that in your expectations of what the CMO has to do to succeed. Allow room for a lot more innovation and unexpected creativity than you can stomach. It will make traditional CEOs feel squeamish. And even serial entrepreneurs are shocked at how much change is going on with CMOs. And then think about your customers and their CMOs. When you understand their problems, you are on to a powerful knowledge base that you can use to help your CMO quickly convert your customer's CMO into invoices. That special skill will add a powerful element to your unfair competitive advantage.

IT'S ABOUT "CATEGORY" NOT BRANDING! Believe it (and win) or not (and die)

Category first. Brand second.

When you understand that, you'll be able to crush your competition.
Most don't.

So let me suggest you add this killer app marketing weapon to your arsenal.

Watch Al Ries explain what it means when he says: The real issue today is not about "brands." The real issue is about "categories."

====

I was working with a kitchen table startup this week and realized the serial entrepreneur founder had a great idea that needed a new category. He understood that and is working on inventing one.

If your startup does not invent a new category, you'll find your initial euphoria about your exciting beta launch quickly turns into a fireworks display rocket: "Wow" and then "Ahhh" and then poof, gone. It will be relegated to a short story about your trying to attack a gorilla (e.g. the Google of the market) and you will end up as an undistinguished commodity (that few remember the name of).

If you lack a category you will not own a word. You need to own a word. Volvo owns safety. Intel owns microprocessor. Google owns search. They are branded with that word (even if those companies open fast food restaurants). Your company needs to own a word (that no one else owns).

If you lack a category you will not know where to drive your company to. If you do not start with a goal, you cannot achieve the goal. You have to know where there is to get there.

You get a category with focus. One word. Not all things to all people. You have to say "No" if you are to get focused. "No" is hard for entrepreneurs to say (especially when they do not yet have sales traction, and are not sure what to focus on to get it).

Category and flanking strategy go together. Flanking strategy wins because it focuses you on a fresh market (pick the word) that no one else has yet dominated. Combine that with other elements and you are on your way to becoming the gorilla of a new market segment. "IPO, here we come!"

BOTTOM LINE: Gorilla branding starts with gorilla category. Get category right and you'll get the brand right. When you get that, you'll add a killer app to the elements you use to build your competitive unfair advantage. Go get'em, tiger! (Or should I say, gorilla?)

FUNCTION + DESIGN + SOLUTION: Startups are more than features

The iPhone buzz is cooling off today but media stories are spinning off some good thinking for startups. One is by Scott Duke Harris in the San Jose Mercury News today. His article discusses the origin of the proverbial "sliced bread" (yes, a long time ago it was an innovation that revolutionized the American bread business). He then makes some useful points about the innovation of new products. It is a worthwhile quick read. Here are some of the things in it worth thinking about for entrepreneurs:

• "the ooh factor". This is what consumers saw in Nintendo's Wii with its magic wand. But please note: even industrial products and services need the ooh factor.
• ". . . its simplicity appeals to a broad group of users." Note the words "simplicity" and "appeal". The simplicity implies clarity and focus (instantly the ideal customer says "I get it!"). The appeal is what the "value proposition" is all about.
• "Others existed but [they] really came in with best-in-class." This is a reminder that "first to get it right" overpowers "first mover". First to arrive is death. First to get it right wins the race.
• Startups surf new waves, giant corporations invade them. Who starts them is not the issue. The trick is to be moving with the wave as it is rising. Then you have a better chance to win the surfing contest.
• "genuine wonder". Emotions must be triggered by what you are offering. Humans make purchase decisions. They need to be awed by your product offering.
• "magical", "way cool", "gets consumers salivating". Your ideal customer should be eager, enthusiastic about using your product or service. Boring is death. So is "interested in it".
• "It really married function and design in an elegant solution . . .". Note the combination. The elements are joined to bring a solution. The term "elegant" again refers to emotional appeal to the ideal customer. And think about solutions. There is more room to maneuver competitively when you position with solutions than when you position with a product with a feature that is faster or better.

I realize some of you will think that no genuine industrial buyer will get as emotional over a new bulldozer as an iPhone. But when you talk to industrial buyers and sellers, you will come to the conclusion that they do say "Way cool" to bulldozers. Respecting that will get you farther toward competitive positioning that can move you into the leadership position of a new market segment. That will put you onto the path to becoming a gorilla.

BOTTOM LINE: I think that makes it clearer: the media should find your product offering more than interesting. Your ideal customer needs to see it as "way cool" and be emotionally eager to purchase it. That is central to building an unfair advantage.