Terra Firms

Archive for October, 2009

As I work on re-writing my product (a software application) for one of my websites (affectionately known as the supercharger site)… and I embark on the journey of learning yet another tool to build my e-presence, I can’t help but think about Launch pads.

Just a few days ago I bought stock for my mom, and in doing that I looked at the near history of that company’s performance, realized they would post about a 30% growth in profits this year compared to last year (if the trend they’ve set in the last 3 quarters holds true) and that this mega profits announcement will come sometime in Jan of 2010.

Since our stock market is heavily fueled by news and announcements, then buying into the stock now, 2 months before the speculators and 3 months before the announcement seems like a no-brainer deal.

I think it’s easy to pick ‘winners’ based on previous performance… great directors are allowed to pick to work on greater movies, fast horses get access to better training and more interesting competition, great companies attract the best talent and so forth..

However, when you want to look at a smaller company… maybe even a tiny dot on the dot come circle (such as my company) … you have very little good news, past performance, or track time to judge yourself or your position based on.

This can be very frustrating if you’re surrounded by naysayers telling you that you will fail, and that your recent history will be a mould for your future and that more of the same failure is almost sure.

Frustrations aside… there are a few ways to gauge where you are and where you’re going even if you don’t have much to show for it at present.

1- In a cool startup presentation I watched on youtube, one of the presenters made a great point of illustrating demand ‘by proxy’.

For example, let’s say you’re building the first ever TV that allows you to order take out food through your remote control… you turn to the food guide, choose a food channel (restaurant), look at the program guide (food list) and choose something to eat… click ok and confirm and your order will be placed and fulfilled within 45 minutes.

Maybe it’s very difficult to show that such a TV actually has a market or demand for it. However, in illustrating demand by proxy, it is reasonable to do what follows:

Say you have very reliable data that shows that most people that do order take out, order it while they’re in their lounge at home watching TV (reasonable assumption).

Say that even more so, you have the ability to demonstrate that calls to food delivery joints spikes on on the quarter-hour, half-hour, and on-the-hour, for a duration of 5 to 7 minutes (which highly corresponds to typical commercial schedules in most TV shows).

If you can provide data for both of these items then it is a reasonable assumption that ”dinner and a movie” are highly correlated, and that creating a televised / net based solution to ordering delivery through your TV actual has a market.

You have just proved demand by proxy… for something that pretty much has no proven track record.

Since I like this example so much, I’m going to take this one step further… If you can somehow link commercials for Domino’s pizza (and say their monday night football double cheese special) to a certain button combination on the remote (click 53 to order this combo now) … while having the TV and Dominas already integrated with your delivery and payment information… then you could create something that not only has demand, but also has the incentive (ease of use) to shift potential customers off of the old system (look for the phone number, remember my customer ID with dominos, remember my order, try to find cash or change…etc) into a newer, faster, and easier to use system.

Awesome.

Now back on topic…

2- Another way to assess a company that doesn’t have strong past performance data and the main topic of this post, is assessing their ‘platform’.

Let’s look at two great examples…

A- Apple has a great platform in itunes. itunes is not a music sharing program, it’s a content delivery platform. Through itunes you can get books, music, programs, podcasts, radio shows…etc.

Maybe all of these channels were not built into itunes when it first came out, but if you were to assess a then infant itunes, and were able to recognize it as a potentially strong content delivery platform , rather than a music sharing program, you would’ve been in a better position to predict the growth and future potential of apple and itunes.

B- Another great example of a strong platform is Google.

Some one like me, who uses google everything for his business (mail, adsense, adwords, docs, groups, talk, search engine traffic and customers, trends (to scope out new markets), google web toolkit and google app engine …etc) feels a huge amount of debt to google.

Google is not a search engine. Google , I’d like to argue is a small business  ’empowerment’ and ‘enablement’ platform.

Thank about Google checkout in that context as well, although I don’t use it yet since it’s not available in my location or residence.

When you add in Youtube, Picasa, and blogger to the mix (also owned by Google) you realise how that , for free, Google allows you to get yourself, your company and your product online for little to no startup cost.

Ridiculous. … Genius

So how do I assess TerraFirms ?

Since I started this ’sabbatical’ I’ve learned the following (which can all be considered TerraFirms competences)

1- Search engine optimization

2- PHP coding and the wordpress platform

3- Flash content

4- Video and image marketing

5- Web2.0 integration into blogs and web 2.0 marketing strategies.

6- SQL databasing

7- Custom applications (Java /MySQL / Google Web Toolkit / Ajax)

8- Internet Marketing market research techniques, and using different market assessment tools.

9- Paid online advertising campaigns, techniques, and optimization.

So let me rephrase that in simple terms.

My current websites suck in terms of overall income generation potential. But, my platform is strong in that I can find a better market, a better idea, a better concept, and re-apply exactly all the same competences to launch a professional site, grab traffic, promote products, create custom applications, manage data and databases, and create both value for my visitors / customers and profit for my company.

Let’s think about that for a second… past performance, modest at best. Future potential, huge.

I know most people don’t want to gamble their hard earned money on ‘potential’ … but if the platform is there, then managing that platform and seeing it to maturity is all it takes to make it big.

There’s a great video on Youtube from TedTalks about the 5 levels of ‘tribes’ …

http://www.youtube.com/watch?v=xTkKSJSqU-I

This kind of talk really interests me for a few reasons.

1- I consider myself more of a motivator, rather than a leader. I don’t like to tell people what to do (even when I was in that ‘role’ in previous jobs, before I quit to build my own business). I rather like to setup the emotional , technical, and informational conditions that allow for the right things to happen, and push that with motivation and ‘goal oriented’ decision making.

2- I work really well alone, both because I can take on things with a steep learning curve and consume them very rapidly as well as because I have a way of about me in following my instincts, any data or statistics I can get my hands on, and having an overactive brain that can see any issue from many points of view… and so I have a constant internal dialog that is equivalent to a group meeting (Sans the group think and intimidation).

So group dynamics and group work has always interested me.

As I look back at things, my old Job at the power company was with a level 2 tribe…

The power company always thought ‘if we were a different utility, like telecom, we’d be able to be profitable off of cell phones, DSL subscribers, and fiber optics… but since we aren’t then our life sucks.”

Thus the type of work always done there was substandard, since we knew for sure that it would never result in profits (you can’t make profit on a fixed price product that is government subsidized and sold at 25% it’s actual delivered cost).

I resisted the atmosphere in the place and came out at level 3 tribal mentality often … “I’m good, and you’re not…” which was met with agreement on their part of yes “Our life sucks” …

This was really frustrating… but then… I broke away.

I am now in a new relationship with one of my old friends where we build custom websites for small business. This is not my main business focus as it’s hands on work that I have to do , that doesn’t generate auto income like my other e-commerce sites.

Even though this isn’t a scalable business model for me, I’m enjoying this new kind of relationship at ‘work’.

You take an artist that can’t do web development but can shoot great photo/video  &

You take me, a web developer that can’t fill his websites with high quality rich media content….

You put us together and you have a strong development house.

This takes both me and my friend from being isolated experts in our individual fields (namely level 3 tribes) and starts to create a new attractor at level 4. The thought that us, together, are stronger, than either of us alone is both exciting because it expands our incomes and our reach, as well as humbling as you are reminded daily that you are in a symbiotic relationship where your thrive is dependent on your partner and visa versa.

So in true TED Talks fashion, if I had to sit back and extract the ‘higher meaning’ of our relationship I would say this… when you look to expand your business, it may be a healthy thing to look at what kind of tribe you will be creating through your expansion…

Are you moving from level 1 to level 2 ? Where you are shifting your operating base from a location that is in crisis (where everyone around you is also in crisis) to a new location that is not… where you realize that your situation sucks, but there are other opportunities elsewhere to capitalize on ?

Are you moving from a level 2 to a level 3 by moving sideways into a new position where you are no longer disadvantaged but rather getting a lead on your competition with a new strategic partner, an inaccessible (to others) distribution or marketing network, a new patent protected product or service …etc ?

Are you moving from level 3 to level 4 ? By merging with your ‘competitors’ to create something larger than your current self ? What if we could merge Sega and nintendo back in the early 90s ? What if we could create 1 gaming box using the experiences from both manufacturers to create THE ULTIMATE gaming experience ?

In business, it’s very common for competitors to polarize. If I’m competing on size, you may compete on value, if I compete on simplicity and ease of use, you may compete on extensive advanced features.

After several iterations of market segmentation and each business polarizing itself to hold a position in the market (and a strong brand positioning with the customers) you find that the two resulting business, although technically competitors, go about things very differently.

What happens if for some reason we take the best that business A has learned about simplicity, design, ease of use and combine it with the intricacy, features, and technicality of the products produced in business B?

Couldn’t we create a level 4 ‘tribe’ and a new ‘mega product’ that combines features that are at first glance improbable or impossible to exist in the same product (ex. a faster car that gets better mileage… these things are possible even though they at first seem to be polar opposite… and are exactly what ‘innovation’ is all about).

Are you moving from level 4 to a level 5 tribe ?

The cause based business model is a very powerful one.

Wikipedia and craigslist are two strong examples of business that have high customer attachments due to a higher ideal truly running the business.

You have to think about these things not just in a personal sense in your self and your connections, but rather think about the ‘tribe’ of customers and how they see your business and utilize your products.

Are they buying your product because their life sucks and you are the only thing that they can afford (and thus you are serving a level 2 tribe ???)… Or are they buying your product because it enables them to move up the hierarchy by getting more informed, more connected, more experienced…etc

Interesting thought.