Saturday, February 24, 2007

Act like you've been there before

The Albeo team spent a day this week with a very large furniture manufacturer that is considering replacing the fluorescent fixtures in their furniture with LED fixtures. They have been actively researching LED fixture companies and have visited several to help identify one with which to engage.

Early in their investigation they discovered that LED innovation is not coming from large, established lighting manufacturers but from small startups like Albeo. (I'll describe the reasons for this in a later post.) Since they are a manufacturing powerhouse, they have a healthy concern about partnering with a small company that is new to manufacturing, and they brought along a supply chain management representative specifically to characterize that risk.

The day was pretty successful for Albeo, and a big part of that success is because we nailed that issue. Not because we have terrific manufacturing processes in place; we are truly a small company and we are still developing these methods. However, our manufacturing guys were very effective in showing this potential customer that we know what terrific manufacturing processes are and we are on the road to implement them. In other words, we showed them that we are a big company in the making; we have been there before and we know how to get there.

We clearly impressed them, and it really made me wonder what they saw when they visited our competitors. To me, this doesn't seem like rocket science. To become a big company, you do the (good) things that big companies do, even when you're small.

David Cohen recently posted on his Colorado Startups blog about startup ideas, in which he made the point that it is rare for a successful startup to have a completely unique idea. Rather, startups typically have several competitors with similar ideas, and the successful ones just execute better. In his words, "embrace competition, then go kick some ass. Do it better, smarter, or make it easier."

To me, a big part of that is acting like you've been there before.

Thursday, February 22, 2007

I'm a marketing fundamentalist

Someone asked me yesterday how I can be comfortable marketing such a wide range of products. Over my career, I have marketed semiconductors to the data networking, telecom, and storage markets; telecom equipment to the carriers; branding consulting services to various companies; project software to small and medium businesses; and now LED light fixtures for residential and commercial applications.

I thought about it for a bit and concluded that it's because I'm a marketing fundamentalist. What does that mean? It means that the fundamentals of marketing apply no matter what the product, service, or market. The fundamentals are the things we learned in business school, like the three Cs and the four Ps, and Porter's five forces. If you can really understand those fundamentals and can intelligently apply them, then you can really market anything, and that's what I try to do with any product or in any market. I know that if I get the fundamentals right, I'll do well.

What I am not is a market visionary. These are the people that can see the future, that can anticipate customers' needs before the customers do, that can extrapolate from where things were, through where they are now, to where they will or won't be. I love working with people like that, because I complement them well. They envision, I execute.

Saturday, February 17, 2007

Another terrific Martini Group

We got together for another Entrepreneurs Martini Group a couple of nights ago at Laudisio, and it was terrific because it reminded me what I love about these people. I haven't spoken to many of them since our last gathering sometime in the fall, but they started three completely new companies started in that time!

I don't know how much I can say about any of these companies, so I'll refrain from saying anything. (You'll have to come to the next one to learn about them.) But I am continually amazed by the group's creative energy and willingness to take on absurd levels of risk to create something really cool. I love the entrepreneurial culture of Boulder.

(And wow, the new Laudisio is so dramatically different from the old one in North Boulder. I love the new one. The bar area was comfortable and perfect for our group. Gina and I had dinner there after the group disbanded, and the food was as terrific as it has always been. But the atmosphere is completely different. The old Laudisio was charming and intimate, where the new one is big, bustling, modern, and urban. Not bad, just way different.)

Friday, February 16, 2007

The problems with MLM

A while back, I posted about Dragonfly Innovation. In that post, I mentioned that their sales channel strategy was multilevel marketing (MLM). If you're unfamiliar with that term, it refers to the old Tupperware sales model, home parties put on by commissioned sales reps, with a multilevel commission structure where reps get paid not only on their own sales, but on the sales of reps that they recruited. I promised in that post to share some thoughts on MLM, and running into the Dragonfly founders Scott and Susan Dalgleish at the Entrepreneurs Martini Group last night reminded me that I hadn't done so, so here goes.

MLM is a very popular sales model for many companies. It is overwhelmingly targeted at the stay-at-home mom, because it provides her a part-time income that she can scale as she desires and that she can work on according to her own schedule. That kind of flexibility just isn't available anyplace else.

Because MLM is targeted at these moms and, for the most part, they're going to be selling to other moms, the products and services tend to be oriented toward moms: indulgences like beauty products, jewelry, clothing, or lingerie; children's products like Dragonfly or Discovery Toys; or kitchen products like Pampered Chef. (I have also recently seen MLM plans for investment services, although I'm not sure I understand that model.)

My impression, backed by no data whatsoever, is that there has been an explosion of MLM offerings in the past decade. It could just appear that way to me because I have come to a point in my life, married with two young kids, that I'm in the middle of the target zone for these kinds of offerings. Or there could actually be far more offerings because of various social or economic trends, and I believe this is the case.

The desire for higher standards of living (bigger cars and houses, better vacations, etc.) has led to a dramatic rise in two-income households, which has put immense pressure on family life. MLMs offer at least a partial income alternative that allows moms to stay at home, easing those family pressures, but still helping the family checkbook. And the promise of MLMs is that, when the mom wants to increase her income, she just needs to increase her effort, signing more reps and having more parties. This is why I think there has been a big rise in MLM offerings.

But, as in so many things in life, it's not quite that easy. If the mom has preschool-age kids, then she doesn't have a lot of time during the day to work on sales or recruitment, but in the evening she's exhausted from taking care of the kids all day. If her kids are in school all day and she has some more time, she has the opportunity to put in the hours to grow her business. However, her parties, the events that actually make her money, are almost always in the evenings, which takes her away from her family, when spending more time with her family is why she's not working full-time anyway.

And then, after she has worked through her entire personal network of friends, she needs to start essentially cold-calling acquaintances or friends-of-friends. That's hard. That's real sales, not just selling to friends, and most people just aren't cut out for that.

There are obviously exceptions to these issues I raise, but I'm just pointing out that it's not necessarily a perfect option for the rep mom.

It's also not a perfect option for the startup company trying to establish sales channels. If there has indeed been an explosion of MLM offerings, then how do you make yourself stand out from the others? Marketing dollars. And if you want to grow fast, then you'll need to hire paid, direct sales reps in each region in which you want to get established. Sales dollars. Lots of dough to spend in a crowded marketplace. That's a tough road.

Sunday, February 11, 2007

A terrific physics science kit for BSS

I have probably cursed my kids to always receive science-related birthday presents because everyone knows we do Big Science Saturday. For Ryan's last birthday, he received a physics kit and we finally got around to giving it a go yesterday.

This is one of the best science kits of any kind that I have ever used. It's the Physics Workshop from Thames & Kosmos. What makes it the best?
  • The build quality of the equipment is very high.
  • There are 37 unique experiments included that all appear to build logically on one another. Although we only did the first so far, a quick skim of the workbook indicates that they each experiment appears to be entertaining and informative.
  • Everything is included, except the occasional household item. (Yesterday's experiment required thread, a couple of potatoes, and a wooden matchstick.)
  • The experiments are sufficiently entertaining that Maddox, who's four, is able to participate, even though the kit is designed for kids eight and up.
  • Best of all, the workbook is terrific. At 64 full pages, it clearly explains how to perform each experiment and provides a narrative that the kids can understand.
One potential shortcoming was highlighted to me by Scott Dalgleish of Dragonfly Innovation in a brief conversation last night. (I'll write about some of his other comments in a coming post.) He asked if the experiments encourage the kids to explore follow-on steps based on what they learned.

For instance, yesterday we learned about gravity and how gravitational force, mass, and acceleration might be related. The creative next step that Dragonfly would provide is to encourage the kids to find other examples of how force, mass, and acceleration might be related. For instance, remember when we launched rockets and lost our rocket? Lots of force, not much mass ... lost rocket.

Given that relatively minor shortcoming (which I should be able to creatively address myself), I love this kit. I hope their other kits are of the same quality, because I'm looking forward to buying one of their chemistry kits next.

Tuesday, February 06, 2007

Is it martini time already?

The Entrepreneur's Martini Group is getting together again, following a brief hiatus. We're gathering in the bar area at Laudisio's at 29th Street (303-442-1300) on February 15 at 5:30. If you're a startup junkie in the Boulder area, please stop by, introduce yourself, and toss one back with us.

Sunday, February 04, 2007

SharedPlan is number one

People sometimes forget that project management software does not have to come from Microsoft. In the world of alternative PM software suppliers, SharedPlan was recently ranked number one by

That's the good news. The bad news is that many of the features and benefits that make SharedPlan truly unique, like a private project server for improved collaboration, or an issue tracker for monitoring items related to a project, were never mentioned.

We still have some marketing work to do.

Saturday, February 03, 2007

BSS project - making paper

For Big Science Saturday today, the family made paper. It was much easier than I expected, and our papers turned out terrific. See for yourself.

The boys now know how paper is made, sort of. They know how it's made from recycled paper. I tried to explain how it's made from trees, but they didn't seem to have that look of recognition in their eyes. And it was pretty hopeless explaining how continuous paper production might work.

Oh, well. All I hope to do is expose them to concepts. I'm not a teacher. I just like this stuff.

Eat food. Not too much. Mostly plants.

A recent article in the NY Times (registration may be required) started off with this single line:

"Eat food. Not too much. Mostly plants."

Brilliant stuff. Why? Because, even though the article went on for twelve (twelve!) pages, it summarizes what the author is trying to state about what people should eat for maximum health. If you don't get it from that line, the author explains everything you need to know in the first paragraph:

  • Eat food. Real food, whole food. Not prepared foods. Not processed foods. Not fortified foods.
  • Not too much. Pretty self-explanatory.
  • Mostly plants. Meat should be approached more as a side dish than a centerpiece.
I will probably remember that line for the rest of my life, and even attempt to put it in practice. (We generally don't do too badly in our house, but there's certainly room for improvement.)

Why is this line so important to me? Because, as a marketer, it is the holy grail of messaging, the simple, instantly memorable phrase that says everything that's important, and nothing else. It is a remarkably difficult thing to achieve.

It is now inserted into my personal lexicon of aphorisms, right next to "Bears get rich. Bulls get rich. Pigs go broke."

Thursday, February 01, 2007

How do they treat cabin fever in Minnesota?

The consensus in Boulder seems to be that we've all had enough of this winter weather. Enough already. Seriously. It's not funny anymore.

My wife and I met in graduate business school in New England, and moved to Boston when we graduated in 1993 (still dating at the time). We lived downtown in a couple of very fun neighborhoods, surrounded by many of our fellow alumni and having a terrific time.

Then came the winter of over 100 inches of snow. Cold every day, with the snow never melting, and the sun never shining. Mounds of plowed snow, brown, smelly, probably hiding dead animals, and eating up precious parking spaces. It sucked.

Gina and I decided it was time to move. I grew up in Colorado, and knew that Colorado was a much more tolerable winter state than Massachusetts (or Chicago, where her family lives). What makes Colorado winters so livable is the regular sunshine (Colorado gets over 300 days of it a year) and warm days throughout the winter. Sure, we'll get a big snow, but two days later it's gone and we're riding our bikes. Colorado was the place for us, and we moved to Boulder in 1995, and we love it here.

But not this winter. This is that same Boston winter that we left. It has been cold and snowy since December 20, with only a couple days of sunshine and no sight of even 50 degrees. I have shoveled our driveway and walk at least 10 times so far this winter (we're not even halfway through it!), and I probably only do that 6 times any other year. My four-year-old son told me at dinner this evening that he needs a Bahamavention. It's really bad.

So, my question is, how do they do it in Minnesota? This must be what their winter is like every year. What do they do to avoid insanity? You can't tell me that hockey is the answer. Or the Mall of America. Or ice fishing. What else is there?

I don't get it, but I need some answers fast or I'll need a Bahamavention too.