Marketing Continuum: Find out where your customer is

Direct response marketing is a very humbling experience — it’s one of the more ‘honest’ forms of marketing.

Honest! Yup… because it’s designed to measure a response… a lack of one gives direct feedback that the offer just did not resonate with your market.

This is precisely why understanding and using the marketing continuum not only gives insights into markets you want to be in but also how to communicate. Your sales pitch or ad copy is going to be different if your target market at a certain stage. You want to know where your customer is… and then lead him/her by the hand to wherever they will get most value. This is just not about sales but more importantly about serving your prospects and customers.

How to use a marketing continuum
Regardless of whatever segmentation one uses… understanding where your ideal customer from ‘totally unaware’ to ‘knows exactly what he/she wants’ takes your marketing to the next level. The secret is to be relevant.

If your customer knows the brand, colour, modal and size of shoes she wants, the only way to compete is either on price and/or speed.

Compare to someone with nagging back pain who has not had any success with mainstream medical care. This person is nowhere near a product. The conversation with him is not going to start with a product… but much earlier in the continuum.

(Not all stages of a continuum are relevant for every market — because the level of sophistication of the market).

8 Stages of Marketing Continuum

STAGE 1: PROBLEM
A: Doesn’t know
B: Doesn’t believe
C: Accepts

STAGE 2: SOLUTION POSSIBLE?
A: Doesn’t
B: Doesn’t believe
C: Accepts

STAGE 3: SEARCH SOLUTIONS
A: Didn’t find anything
B: Considers alternatives

STAGE 4: CONSIDER PRODUCTS
A: Doesn’t believe
B: Accepts

STAGE 5: BUY

STAGE 6: USE

STAGE 7: CONCLUSION

STAGE 8: POST CONCLUSION

We’ll go into more detail about each step in future posts.

How to Prevent Intellectual Property Theft when Hiring from Outsourcing Websites

If you’re creating something new like software (but can be anything else), then this is an important message.

Dare I say, it might save you thousands, if not hundreds of thousands of dollars.

First some ground rules… the main thing, is to keep the main thing, the main thing (I heard it from Zig Ziglar).

Ideas generally are worthless. But if you’re going to spend time and your hard-earned money to pursue something then you should consider if protection is right for you.

So please don’t become a scaredy-cat and think everything you’re getting done should be protected. A simple logo or some ad copy or a web design for beta site costing you a few dollars does not qualify. It’s just not worth it.

But if you’re spending some serious money on a new idea to develop software that has potential then you definitely should consider protecting yourself. More importantly if you have spent quite a bit of time thinking about this one thing, spoken to potential users/customers then you’ll want to protect your efforts.

The usual approach these days is just to post a project on Odesk.com, Elance.com, Freelancer.com, Upwork.com and numerous other sites. This does give you speed of implementation (good thing) but you’re getting exposed to theft.

IMPORTANT!
If and when your IP is stolen, the outsourcing sites are useless in providing any protection or relief. Firstly you exposed yourself the minute you explained what your project was about. But the bigger risk is when your IP is stolen AFTER you have successfully completed the project! The ‘outsourcer’ was good and delivered on time and under budget.

Then he/she sells or gives IP to someone else to launch the same product they have just created for you. Yup, this happens! Integrity is a precious commodity.

Here are the steps you can take:
1) If that important, then do NOT use an outsourcer. Get an employee.

2) Deal with local providers (in your city, country).

3) If you are going to use an outsourced provider then only deal with providers in countries with strong IP protection.

Now let’s assume your budget is tight and you can’t do 1-3 from above. You have to use someone from a country where IP laws practically do not exist (they do but laws are not enforced). Sidenote: quite a few providers will be from these countries where IP protection is not strictly enforced.

Step 1: When you post the project, make it very clear that you want people who respect IP. The project needs to be detailed enough in terms of technology stack to use, any technical issues, expectations, reporting etc. But there is no need to be specific about your idea. This is usually enough to start with.

Step 2: Mention that they must sign sign an IP agreement given by you (up and above any implied by the outsourcing website). This is where you want a well drafted agreement that caters for a few scenarios. Unfortunately most agreements do not cater for cross-border differences. You want an agreement that covers everything. E.g. In some jurisdictions, some IP rights always remain with creator and can not be assigned, and some everything can be assigned.

Step 3: They must provide their passport and driver’s license details. Why is this important? Who are you going to go after if someone steals your stuff if you don’t know who they are. Trying to sue a username on an outsourcer website does not work! But more importantly it sends a message upfront that you’re serious. This scares most developers but true professionals won’t have an issue. If someone does resist then it’s your call to make if you’re willing to take the risk. Remember protection upfront vs millions in lost IP afterwards. It’s your project so you make the call. Remember, your project needs to be big enough for an outsourcer to bother as well. Don’t do this on a $500 job!

Step 4: Get their phone number and mobile number upfront. Why? 2 reasons: It’s another data point to locate person(s) and there will be times when your developer(s) needs to drop everything to fix something – despite best practices this does happen from time to time.

Step 5: Do not give any info until steps 1-4 are completed.

IMPORTANT! Almost everyone you will work with will be honest. But you just need one bad one…

Good luck…

Where Is The Value In A StartUp?

Startup…

“That’s risky, isn’t it?”

I don’t know if this is true but I think people see risk as 2 binary outcomes – ZERO or ONE. Either they’ll see something as very risky or not risky. This is one of the main reasons why entrepreneurs tend to be pig-headed about what they’re pursuing — this has its advantages but reality checks are also necessary.

Back to the question… what is everyone missing?

Optionality!

A startup is a portfolio of options — that’s what gives a startup all of its value. Potentiality is not worthless! Amazingly, people don’t see companies investing in training and development as worthless — that’s creating optionality too. (Side note: we are domain-specific — ask a sky-diver if jumping out of a perfectly good plane is risky).

But, why are some startups able to raise a ton of cash while most don’t?

The main reason is marketing but let’s leave that aside for the moment.

The answer is another question… Does this startup have the capability to realise the potential. Or in options language… will the option(s) embedded in this startup ever be In-The-Money.

And the single biggest determinant of a start-up ever realising its potential are the people behind these options. People determine the likelihood of a business or project ever becoming In-The-Money.

Investors back people, not just ideas.

This also explains why a company with no profit can have an ever-increasing market value.

Power Of Mistakes

Errors, mistakes, miscalculations, stuff-ups, failure are a necessary part of growth, not just in business, but more generally in life.

Without mistakes there is no learning. It’s the critical feedback loop that allows us to adjust our course of action.

Mistakes also allow us to not get stuck. We will never have all the required information to make the best decision — every major decision is most likely not going to be black or white, but grey. Many shades of grey which can cause paralysis.

Paralysis costs time — truly our only non-renewable resource.

The best way to proceed is to either take a small bet, or a number of small bets, and let the results dictate the next course of action. This is a far superior way to deal with uncertainty then taking a long term view — in this case bottom-up beats top-down.

Mistakes should be celebrated as long as they do not sink the ship, i.e. actions can be seen a call option.

Options increase value because they increase choices that will be available to us in the future.

Why do some companies such as mining exploration, Web 2.0 or biotech companies command multi-million or billion dollar valuations when they have never made a single cent in profit (and sometimes even revenue)?

That’s right… options! In other words, exposure to a massive upside.

Whether in business or life, don’t be afraid to make mistakes — they increase choices available in the future and means exposure to potentially very lucrative or profitable opportunities just like a biotech company.

One more thing… mistakes are essential for innovation but more on innovation in a future post.

99% Failure Rate

I’ve been dealing with businesses, investing and marketing ‘stuff’ as far back as I can remember. I come from a family of business owners for at least a few generations.

And I run a startup… I’m not sure if this puts me at an advantage or a disadvantage. Interestingly, it wasn’t until a few months after starting a startup that I realised that I actually didn’t know what I was doing! Just being honest. (More about the power of mistakes in a future post).

It also dawned on me that there is actually a 99% (or higher) chance of failure.

Why bother when there is near certainty that this experience will probably be just that… an experience. Hopefully, it prepares an aspiring entrepreneur for the next venture. Cost of entry to big leagues.

There are a lot of books that talk about the <insert an odd-number> Steps To Business Success.

Unfortunately, these books are almost always useless. Many courses and seminars by successful entrepreneurs about how they made it are also useless.

Why?

I learnt something from Dr Van Tharp, a trainer of traders (http://www.iitm.com).

Van has trained many financial market traders and a few super-traders as well — some super traders have track records that will make Warren Buffet’s track record look like returns from a term deposit!

Back to what I learnt from Van — a trader must know himself before he can consistently make money. All of your success is related to your psychology. The ability to take losses and the ability to let your winners run. The ability to get back on the horse after falling flat on your face. (Apologies to Van if I’m not expressing his ideas as elegantly as he does).

Everyone’s psychology is different… which is why an asset class or financial instrument is irrelevant, i.e. what you use to make money is irrelevant. There are examples of people who have done very well in futures, options, stocks, commodities, properties, inventions, wines, horses, businesses, …

What you ‘trade’ needs to be consistent with who you are.

This is precisely why some introspection may be necessary before you attempt a risky venture. But mental work is hard work!

An even better approach is to just start — introspection through action! As long as you have your downside covered, you’ve bought a call option. That way you know your downside before you start. And this is far better than jumping in with rose-coloured glasses.

99% chance of failure… what’s not to like.