Category: Entrepreneurship

Entrepreneurship

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Interview of Daniel Isenberg on the Potential To Launch Contrarian Business Ideas Successfully and His Top Entrepreneurship Book

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Daniel Isenberg has likely written one of the most important books on entrepreneurship I’ve ever seen. It is not about pitch decks or pitching venture capitalists for funding. The book entitled, Worthless, Impossible and Stupid: How Contrarian Entrepreneurs Create and Capture Extraordinary Value, actually discusses something far more important, the stories of people who had contrarian ideas that most people thought would never work.

I really loved reading this book! Anyone would actually as it has rich, fresh, and obscure stories. The kind and wonderful folks at Harvard Business Review Press were kind enough to arrange an interview with Daniel Isenberg about the book. The capital letters are how he returned it and I present that as the interviewee answered exactly.

Do entrepreneurs have to be young or have an engineering degree?

Daniel Isenberg : OF COURSE NOT. NOT ONLY IS THIS EMPIRICALLY THE CASE, IT SHOWS THAT WE HAVE DEVELOPED VERY NARROW, AND I THINK UNHELPFUL STEREOTYPES OF ENTREPRENEURS. I HAVE ENGAGED WITH HUNDREDS OF ENTREPRENEURS IN MY 30 YEARS AS ENTREPRENEUR, VC, ANGEL, AND EDUCATOR AT HARVARD AND ELSEWHERE, AND IN DOZENS OF COUNTRIES. LET’S TAKE ISRAEL JUST AS ONE EXAMPLE: IT IS RIGHTLY FAMOUS FOR ITS HIGH TECH ENTREPRENEURSHIP. BUT SOME OF THE MOST SUCCESSFUL AND VALUABLE ENTREPRENEURIAL VENTURES THERE INCLUDE SODA STREAM (HOME CARBONATION SYSTEMS), TEVA (WORLD LEADER IN GENERIC DRUGS), AND ISCAR (WORL LEADING CUTTING TOOLS MAKER, ACQUIRED BY BUFFETT). THESE ARE FAR FROM OUR STEREOTYPICAL AMAZONS APPLES AND GOOGLES, EVEN THOUGH ISRAEL HAS THOSE AS WELL. SODA STREAM WAS SAVED FROM THE VERGE OF BANKRUPTCY AFTER THIRTY YEARS IN THE MARKET, AND WAS RAPIDLY EXPANDED INTO A $1 BILLION NASDAQ COMPANY. REPURPOSING OF EXISTING UNDERVALUED (“WORTHLESS”) ASSETS BY EXPERIENCED EXEUCTIVES IS AS LEGITMATE A PATH TO entrepreneurial EXTRAORDINARY VALUE CREATION AS STARTING A HIGH TECH COMPANY FROM SCRATCH.

Dan Isenberg for dating sit

Entrepreneurs don’t have to have an amazing new idea in an area of deep expertise?

Daniel Isenberg : THAT SURPRISED ME – WHEN I STEPPED BACK AND LOOKED AT THE DOZENS OF CASES I HAD WRITTEN, I SAW THAT NOT JUST ONE OR TWO STARTED WITHOUT EXPERTISE, BUT A LARGE NUMBER. WE SHOULD NOT MISINTERPRET THAT AS ADVOCATING IGNORANCE, BUT THAT EXPERTISE IS NOT A PREREQUISITE. OF COURSE, PRETTY SOON THE ENTREPRENEUR BETTER LEARN ALL THERE IS TO KNOW.

Almost all of the entrepreneurs in your book were not technical founders. I found that to be amazingly refreshing and more representative of reality. Why do you think our society choses to hyper-focus on a small subset of technology entrepreneurs and how can we change that dynamic?

Daniel Isenberg I WROTE WORTHLESS IMPOSSIBLE AND STUPID IN ORDER TO INFLUENCE THE ENTREPRENEURSHIP DIALOG, BROADEN IT, MAKE IT MORE REAL-LIFE. THE MEDIA ARE NATURALLY MORE ATTRACTED TO THE MORE SNAZZY AND VISIBLE EXAMPLES. (LET ME REMIND EVERYONE, THOUGH, THAT THE IPHONE IS NOT ENTREPRENEURSHIP BUT VERY SUCCESSFUL INCREMENTAL INNOVATION BY A LARGE ESTABLISHED CORPORATION.) I INVITE THE LEADING ENTREPRENEURIAL SUPPORT FOUNDATIONS TO HELP BROADEN THE DIALOG AS WELL BEYONE SOCIAL MEDIA, IT, YOUTH AND STARTUPS. IT WILL HELP US ALL TO DO SO.

So if everyone says an entrepreneurial idea is great, you state that you should likely run? Please explain.

Daniel Isenberg: IF YOU HEAR THAT A BUSINESS IDEA IS GREAT, YOU CAN ASSUME THAT (IN MOST CASES) DOZENS IF NOT HUNDREDS OF PEOPLE AROUND THE WORLD HAVE THE SAME OR A BETTER IDEA. EXTRAORDINARY VALUE IS CREATED BY IGNORNING MARKET DEMAND IN MANY CASES, ANTICIPATING IT, OR EVEN CREATING IT. THAT IS ONE OF THE FALLACIES OF EQUITY CROWDFUNDING: IF EVERYONE RUSHES TO INVEST IN SOMETHING, THEN IT IS LIKELY NOT A GOOD INVESTMENT. NOT DEFINITELY, BUT AS LIKELY AS NOT.

In one of the best sentences of the book you stated, “It is the job of the entrepreneur to sniff out and realize opportunity that is overlooked, undervalued, or even berated by others.” That is powerful stuff. How did you develop that definition over the years?

Daniel Isenberg : FROM DEEP IMMERSION IN THE FIELD. ANYONE WHO IS INVESTING IN OR EVEN STUDYING ENTREPRENEURS WITH HIS OR HER EYES WIDE OPEN, CANNOT HELP BUT LEARN OVER TIME THAT THE GREAT STUFF, THE GREAT ACHIEVEMENTS, ARE IN THE SURPRISES. ENTREPRENEURSHIP ALMOST ALWAYS SURPRISES THE MARKET. THAT MEANS THAT THE MARKET EXPECTS SOMETHING ELSE. I HAVE BEEN IN THE FIELD FOR OVER 30 YEARS NOW, AND I HAVE BEEN WRONG SO MANY TIMES IN BOTH DIRECTIONS. IT IS SOBERING. AS MARC ANDREESEN SAID A FEW MONTHS AGO,” It’s in the nature of venture capital and start-up investing that there are always stupid investments. The problem is that you never know which ones are which. I get these things as wrong as anybody else.”

IT HAS GIVEN ME A LOT OF FOOD FOR THOUGHT TO REALIZE THAT THE BEST OF THE BEST GET IT WRONG A LOT OF THE TIME. THAT SAYS SOMETHING ABOUT ENTREPRENEURSHIP ITSELF. AS SCHUMPETER WROTE, THERE IS SOMETHING INTRINSICALLY UNPREDICTABLE ABOUT ECONOMC GROWTH – HE WAS ALSO REFERRING TO ENTREPRENEURSHIP.

How should an entrepreneur that has an idea that they know to be valid and they are berated by society overcome that negativity? Who and in what order do they need to convince people beyond themselves?

Daniel Isenberg : THERE IS NO RECIPE FOR THIS. IF THERE WERE, IT WOULD BE PRICELESS. I THINK CONTINUALLY BLENDING FORWARD MOTION WITH BACKWARD REFLECTION. YOU HAVE TO MIX THE WATER OF INCREDIBLE OPTIMISM AND THE ABILITY TO ENVISION THE INVISIBLE, WITH THE OIL OF HARD HEADED, PASSIONLESS OBJECTIVITY. AND COMBINE THAT WITH AMAZING SELLING SKILLS – I HAVE SEEN EXCELLENT SALES PEOPLE IN ACTION, AND THEY CAN MAKE MARKETS HAPPEN THROUGH SKILL. IN MANY CASES, THERE IS A THIN LINE BETWEEN GREAT SUCCESS AT SELLING A PRODUCT, AND ABJECT FAILURE, AND IT OFTEN HAS LITTLE TO DO WITH THE PRODUCT OR SERVICE ITSELF.

In your view, what are the differences between an entrepreneurship launching a product versus a service?

Daniel Isenberg : I DON’T THINK THERE ARE GENERIC DIFFERENCES. THE DIFFERENCE BETWEEN PRODUCT AND SERVICE COMPANIES ARE BLURRED IN ANY EVENT: DOES LEXUS SELL AN AMAZING CAR, OR AMAZING SERVICE? I BOUGHT MY LEXUS BECAUSE OF THE AMAZING SERVICE.

How should David go up against Goliath with tens of thousands of employees in a service situation have a chance of succeeding?

Daniel Isenberg: IT IS NOT ALWAYS JUST GOING AGAINST GOLIATH, ALTHOUGH THAT IS CERTAINLY POSSILE AND HAPPENS A LOT. STUDIO MODERNA BUILT A SERVICE COMPANY IN EASTERN EUROPE IN THE FACE OF THE INABILITY HUGE COMPETITORS WITH EXPERIENCE AND MONEY TO DO THE SAME, AND THEY DERIDED HIM ALONG THE WAY. WHO’S SMILING NOW?

BUT THERE ARE ALSO SMART PARTNERING STRATEGIES. IT WOULD HAVE BEEN INTERESTING FOR DAVID TO HAVE CONSIDERED A STRATEGIC ALLIANCE.

One of my favorite stories in the book is Sea To Table. In the 1800’s, the refrigerated boxcar eventually changed the meat slaughter and delivery process. Why do you think it took almost 150 years for someone else to do something similar with fish?

Daniel Isenberg : I DON’T KNOW THE ANSWER TO THAT. IN RETROSPECT, MOST SUCCESSFUL THINGS APPEAR MUCH MORE DOABLE AND OBVIOUS THAN IN PROSPECT. BUT CERTAINLY MODERN INFRASTRUCTURE AND TECHNOLOGY AND LOGISTICS GREATLY FACILITATED SEA2TABLE INVENTING A COMPLETELY NEW MARKET.

I regularly attend the Joe Levy Group entrepreneurial meetings, I’m amazed by the patterns one sees in founders that are not successful and the ones that make it. What patterns have you seen and how can those patterns be reverse engineered into practical advice?

Daniel Isenberg : IF I KNEW THE ANSWER TO THAT, I WOULD INVEST IN ALL THE FUTURE SUCCESSES AND AVOID THE FUTURE FAILURES! WE HAVE TO BE A LITTLE CAREFUL OF HINDSIGHT BIAS AND RESPECT MARC ANDRESSESEN AND OTHERS’ WORDS THAT EVEN THE BEST DO ‘STUPID’ THINGS. OF COURSE, WITH EXPERIENCE, INVESTORS AND ENTREPRENEURS MAKE “BETTER AND BETTER” MISTAKES, SO THAT YOU MAKE MISTAKES WHILE YOU ARE SUCCEEDING, NOT WHILE YOU ARE FAILING.

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Brett King Discusses Bank 3.0 – Why Banking is No Longer Somewhere You Go, But Something You Do…

Bank 3.0 cover I was sent a copy of Brett King’s new book Bank 3.0 a few weeks back. Good reading on timely topics. Brett was nice enough to share some thoughts with me in an interview.

So what is new in Bank 3.0?

Brett King: Bank 2.0 was really about the challenges of shifting from branch-centric to multi-channel customer engagement. Bank 3.0 is all about the realization that digital is the future of the brand and that branch will become the alternative for most customers in just the next 3 years.

You do a lot of speaking to share your message, how did all of that get started?

Brett King: After I wrote Bank 2.0 I worked hard at getting invitations to conferences to get my message out. By the end of 2010 I was getting 2-3 requests a week, so I had to get some professional assistance from a speaker management firm to help me manage all the requests coming in. In fact, the reason I wrote Bank 2.0 and the subsequent books was really to get the dialogue going in the industry around the changes that were coming down the pipe, and to shake up the traditionalists who reacted with skepticism that things like mobile and social media were going to have a long-term effect on the business.

Now that we’re in launch mode at Moven, I can only do a couple of gigs each month, but I guess because of the message and my social media presence, etc that I still get quite a bit of visibility. So the original goal I had of driving the conversation across the industry is still something I hold near and dear.

What is the biggest obstacle to innovation in financial institutions today?

Brett King: Inertia. Essentially the fact that we’ve got so many hardwired processes and legacy systems that have been built into the bank ecosystem.

As an industry we’re suffering from the fact that there was always a paper application form, or someone in a branch to collect the paperwork and that revenue recognition is still biased towards these mechanisms. That ship is hard to turn though, so when new tech like tablets and mobile emerge, rather than open up these channels for revenue, we try and limit them to transactional capabilities.

As our customers’behavior is changing in respect to typical bank interactions, they’re not visiting branches as much, and therefore metrics around revenue, cross-sell, up-sell, etc are heading south, but we’re protecting the old processes on the assumption that they are less risky. However, in most cases the old processes are significantly riskier than the experiences we can build using new technologies today. Case in point is the simple bank statement. How much of the identity theft that occurs today is based on simply compromising a bank statement?

Brett King, CEO and Founder, Moven_Headshot_2012I showed a friend of mine the book, he asked, what about those who say payments have already always been everywhere without a bank with cash?

Brett King: That’s true, of course, but the difference is the fact that this is the first time in history that those payments have become purely digital and you don’t need a physical artifact (check, cash, card) to move money around the system (e.g. PayPal). The fact that millions of Americans and Chinese now use a pre-paid debit card as their primary day-to-day bank account, or that 50% of the Kenyan population save money on their mobile phone is a great illustration of the fact that payment modality is dramatically effecting the nature of banking.

Which is a bigger opportunity for traditional banks, transforming legacy branch structures and technology or lack of truly customer focused bank culture?

Brett King: The branch is not going to be the primary revenue channel in a few years, just a supporting service channel, so investing in branch is a huge mistake at this point.

I like that you defined social media as having started in 1978, I’ve talked previously about how the things we did at BlackRock during the 1990’s were a far more radical change in customer service than most financial institutions are doing today. Why do people have trouble understanding this is not new?

Brett King: I think if people aren’t putting themselves in the equation or dialog, then they see it as foreign. How many people said they’d never own a ‘cell’ phone, but do. How many people said they’d never use email or get an internet connection and do. How many are saying the same about Facebook today. We see the same trend over and over when new technologies like this first emerge. The problem is that these technologies like SoMe are impacting business far quicker than ever before.

In your opinion, why aren’t the boards of directors of financial institutions putting in place transformational leaders who understand how to build a winning culture in the CEO and CMO chairs?

Brett King: I think it is a generational shift that just may take time at many institutions. In fact, one of the most common reactions I get is the old guard expressing how glad they are that they are retiring soon and can leave these problems to someone else to solve.

What’s going on at your startup Movenbank?

Brett King: At Moven, formerly Movenbank, we’ve set out to transform banking and drag it into the mobile age. Our experience seamlessly brings life and money together for the mobile and social generation, helping them perform better at both.
We’re currently ramping up for the launch of our private beta release. Our launch will feature our Spending Assistant, a mobile feature that gives customers real-time feedback on their purchases directly to their smartphones. It gives them the context and control they need to make smarter spending decisions.
Moven is also proud to announce that we were recently awarded Best in Show at FinovateEurope.

Anything else you’d like to say right now?  

Brett King: Banking might just end up being a really fun and dynamic industry to be in over the next few years! However, don’t imagine for one second that you can do things the way you have in the past. It’s all going to change.

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Bestselling Author John Mackey – Conscious Capitalism 2013 Book Tour Chicago Stop

conscious capitalism jacketJohn Mackey came to Chicago Wednesday and gave a powerful , paradign-shifting soul-awakening speech about his new book Conscious Capitalism to the Economic Club of Chicago. The event was led by John A Canning Jr., Chairman of Madison Dearborn Partners. Question and answers were moderated by Mary Ann Childers. Later, I attended a second event with him at Chicago’s Lincoln Park Whole Foods Market location.

John Mackey is a wickedly smart and passionate businessman who has created a flexible organizational structure at Whole Foods Market designed to create great connection with the customer. It is very much like the business philosophy I was raised on at BlackRock. It needs to be more common place in our society.

As I’ve stated previously, proper business acumen needs to become a mainstream, highly discussed issue in our society. Sadly, the people that need to read this book the most are the ones most likely to never see it. It is time for a global renaissance in business practices around the world. For that to ever have a chance of occurring, these issues need to migrate from business to mainstream.

I did manage to get a few minutes with John Mackey as you can see in the Youtube video below. He was in a rush so I turned a six minute interview into three minutes and my one of my on the fly question mashups got a little overwhelming regarding the nature of business and media change. I would have liked to have also asked about the Board of Directors stakeholder issues at Whole Foods. Looking forward to getting that the next time I get to interact with him or Raj Sisodia someday.

The book, co-authored by Raj Sisodia whom I need to learn more about, tells the story of the founding of Whole Foods, the amazing and unlikely comeback from a devastating flood in 1981, the unique relationship it creates with stakeholders and the ability to educate business leaders and others about these principles.

By reading the book and seeing two speeches by John Mackey yesterday, I also learned surprising facts:

– Reading books played a large role in creating John Mackey’s education. He never took a business class while he attended college but has read voraciously over his lifetime.

– John gets that marketing is not a logo like I do. On page 80 he says, “At Whole Foods, we think of marketing as enhancing the quality of our relationship with our customers.” Every company should view it this way.

– Paying vendors on time is critical to success of the ecosystem. He discusses how big companies tend to be the worst offenders here. You’d think that with today’s cash excesses on balance sheets that they’d change this.

– After witnessing John Mackey make two speeches, I can state that Whole Foods appears to be a unique learning organization. There is decentralized and delegated authority at the regional and individual store level to make investments, acquire local products and interact with the local communities as the stores deem appropriate.

– Later in the book, he discusses measurement and the need for change there. I’ll leave you to discover that in detail on your own as you read Conscious Capitalism: Liberating the Heroic Spirit of Business.

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Harvey Mackay Book Interview : THE MACKAY MBA OF SELLING IN THE REAL WORLD

THE MACKAY MBA OF SELLING IN THE REAL WORLD Last year Harvey Mackay visited Chicago for a media tour for his previous book last year and I got to travel from media outlet to media outlet with him for a day as he did so. The experience would be hard to describe beyond that it will never be forgotten as long as I live and was amazing media training. His focus on others is always present as he seeks to learn every detail of the life of his next interview. Harvey is truly a one of a kind individual and I consider myself fortunate for having spent a day with him.

His lasted book is THE MACKAY MBA OF SELLING IN THE REAL WORLD (Portfolio, 2011). The wonderful publicity folks retained by Mr. Mackay were kind enough to grant me an email interview after I read the book. His answers below build on a great read and create the basis for a larger conversation that the world desperately needs to have. Harvey is part of an increasingly rare breed of business leader who understands that people, human capital and organizational transformation are vital to success. For our society to survive as we know it, we must rapidly work to reverse this trend and create a new generation of leaders with these all too rare skills. You feel the sense of urgency in his answers below. I can’t wait to spend another day with Harvey Mackay, the mutual learning would be overwhelming.

You stated “Fostering employee loyalty is the first step to creating customer loyalty” in Chapter 4. Over the past two decades, many companies have treated employees as disposable assets. How would you convince management to reverse this unfortunate trend?

Harvey Mackay: Our company mission statement is to be in business forever.  That means no compromising … not compromising your core principles and taking any shortcuts.  It is virtually impossible to stay in business over a long period of time if you treat your employees as disposable assets.  In 50-plus years in the business world, I know of no one who stayed in business with a revolving door of employees.  It’s sad to say, but in these difficult economic times there are still too many businesses that still don’t get it.

Chapter 15 states, “Your past is not your potential” and “Far too many people exist in a world of “what is” rather than applying their energies to “what can be”.” Today skills are dynamic and changing; this has implications for returning to the basics of recruiting naturally curious lifelong learners based with the vision to lead change. How can companies best stop the practice of picking leaders of the past?

Harvey Mackay: I have hired over 500 people in my career, and the single most important word in the dictionary that I look for and demand is trust.  Once I have established that, then I immediately look for capacity and willingness to learn.  I can’t begin to tell you how many people out there in the marketplace and disciples of the Peter Principle.  There has been a seismic shift in the business world.  The great classical business principles still hold true but they need to be fused with cutting edge internet technology.  That’s the kind of leaders that companies should be looking for.

Fred Smith got a “C” on his term paper for his idea for Federal Express. Mike Bloomberg was told his idea for what became the Bloomberg terminal would never work by his former employer. Why is it often so difficult for most executives to grasp paradigm changing business ideas?

Harvey Mackay: It’s way easier to stay in the comfort zone, especially when things are going good than to go out on a limb and take some risks.  My philosophy is exactly the opposite:  Sometimes it’s risky not to take a risk.  And remember, if you walk backwards, you will never stub your toe.  One of the most difficult things in life for any individual or business is to accept and adopt change.

So, as you like to say, “People don’t know what they don’t know?”

Harvey Mackay: The way I like to fine tune this statement that I made up in college is – I know that you don’t know, but you don’t know that you don’t know!  By that I mean there are three reasons why individuals and businesses fail:

1.    Arrogance

2.    Arrogance

3.    Arrogance

There has been a consistent, gradual decline in ethical business practices in the United States for about 50 years, and it reached new extremes in the “daisy chain” of the sub-prime mortgage industry in the period of 2002-2008.  This was caused by executives getting chapped lips from kissing the mirror too much, which is a perfect example of how arrogance set in.

You discuss the importance of listening, what is the best way for a salesperson to use the obtained information to create a successful sales?

Harvey Mackay: First of all you can’t learn anything if you are doing all the talking.  Sales people should always be developing their earQ, not their IQ.  The only way to create a successful sale is to understand that knowledge (from listening) does not become power until it is used.  And ideas without action are worthless.

You talked about enthusiasm, what is the best way to maintain it in the face of adversity?

Harvey Mackay: First of all, I have never yet met a successful person who hasn’t had to overcome either a little or a lot of adversity in his or her life.  If life there is a lot of lumps and bumps … a lot of throttling up and a lot of throttling down.  Failure is not falling down, but staying down.  Therefore, you have to ignite your own enthusiasm.  The ten most powerful two-letter words in the English language are:  If it is to be, it is up to me.  Be active, be energetic, be enthusiastic and you will accomplish your object.  I agree with Ralph Waldo Emerson who said, “Nothing great was ever achieved without enthusiasm.”

In chapter 67 you cut the world-famous Mackay 66 to the Mackay 25, Please share more about why you changed it…

Harvey Mackay: The Mackay 25 does not replace the Mackay 66.  Rather it is a streamlined version, which gets you to an instant snapshot of the prospect or buyer’s attitude and expectations.  It gets to the heart of what is commonly known today as relationship selling.

In a recent blog post you stated that you are always surprised when you ask who their customers are and they say everyone. Rob La Gesse (@kr8tr) asks who is your customer?  Have you decided who is not?  If so, you have already self-limited your ability to affect change?

Harvey Mackay: You can’t be all things to all people.  In most businesses the company will have what I refer to as nitch-picking.  In short, virtually everyone has their own niche within an industry.

I had the distinct pleasure of spending the day with you during your Chicago media tour in 2010. I was amazed by the way you prepared for each interview. You were seeking to learn about each interviewer and worked to bring that into the on air conversation. What can aspiring radio and TV guests learn from your techniques?

Harvey Mackay: I call this humanize your selling strategy.  I attempt to do a Mackay 66 Question Customer Profile on everyone I meet throughout my life.  That means customers, employees, suppliers, competitors, audiences, radio and TV talk-show hosts and journalists.  This is what I teach our sales force and the people I mentor, and that is that every single person I encounter I have a deep-down burning desire to learn what turns that person on and what he or she is most interested in.  In any relationship, you must find a common denominator.

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Thank you Harvey! Every CEO, board of directors member and business leader should read this interview and distribute it (and his book) to their teams and then talk about these meaty issues! I welcome the world changing conversation.

Learn more about Harvey at http://www.harveymackay.com/

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Everything I Know About Marketing I Learned From Google : Aaron Goldman Book Blog Tour

I’ve known Aaron Goldman since 2006 and he stands out as someone who has made himself accessible and friendly in the search engine community. Every few months we share a conversations about what we are both up to and aspire to, it is always fun. Aaron has encouraged me to continue evangelizing my message about the strategic and structural changes in marketing and how they will continue to profoundly impact business results and economic distribution realities – whether businesses chose to engage in them or not. It will impact them positively or adversely based on their course of action or inaction.  For that continued encouragement, I’d like to take a minute to thank Aaron right here and it’s a great honor to be the first stop on this blog tour for his new book “Everything I Know About Marketing I Learned From Google” (McGraw Hill 2010).

In the introduction, you discuss how many have a love and hate relationship with Google – at the same time. What it is about Google that allows these emotions to exist mutually at the same time?

Aaron Goldman: Well, I wouldn’t call it a love/hate so much as a love/fear.

I love using Google as a searcher and as marketer. As a searcher, Google helps me find what I’m looking for. And, as a marketer, Google helps me get new customers.

But I’m definitely afraid of Google too. As a searcher, I’m afraid it of what it could do with my data. And as a marketer, I’m also afraid of what it could do with my data but even more afraid that it may one day change its algorithm and leave me out in the cold.

I think it’s general human nature to fear the things we love the most. Once we become reliant on something or someone, we fear that it one day may be taken away.

You discussed relevancy and intent in the book at a few junctures. How do you like to explain these issues to people and why are these concepts challenging for people to understand?

Aaron Goldman: It’s difficult because, by its very definition, relevancy is relative. What’s relevant to you may not be to me. Too many marketers make the mistake of thinking that what matters to them also matters to their target customers.

From a Google perspective, relevancy is the key to search. If Google’s search results aren’t relevant to each individual searcher, he or she will stop using it. That’s why Google looks to collect and keep so much data. It needs to personalize the results to make them more relevant.

For marketers, it’s critical to give off signals of relevancy if you want high rankings on Google. This includes content geared towards specific search queries as well as links from relevant websites.

As for intent. I really think it’s the reason search marketing works so well. People come to Google with the intent of finding something. And, often, that’s something to buy. It’s one of the few places in media where people raise their hands and specifically ask for products, services, etc. It’s the whole pull vs. push thing.

You mentioned how AOL values content differently than most organizations and how Rupert Murdoch of News Corporation, owner of The Wall Street Journal or Fox News accuses Google of stealing content. As content channels become infinite, isn’t media monopoly power also changing and/or even declining?

Aaron Goldman: The point I was making with content is that there are certain topics that are highly commercial and others that are not. What I mean by commercial is that the people consuming the content are in a commercial mindset — they’re thinking about buying something.

For publishers, commercial content is the easiest to monetize. Advertisers want to be wherever there are people thinking about buying stuff. AOL has done a good job of creating content on highly commercial topics — think travel or financial services — that it can sell ads against.

The Wall Street Journal and Fox News are too busy covering the “news.” And news is tough to monetize. People consuming news are not in a commercial mindset and are not open to advertising messages.

All that said, you make a good point that it’s tougher to wield monopoly power as channels become infinite and distribution is spread across the long tail. These days anybody can start a blog or Twitter account and “report” news. And people tend to trust their friends more than the media.

You interlaced a bunch of URLs in the book. This is an interesting experiment. What is your hope for it?

Aaron Goldman: I wanted to make the experience of reading the book more dynamic. Rather than just read cover to cover, my hope is that people will read a chapter and then go to the web to learn more about specific topics covered and interact with other people reading that same part of the book.

With static print, it’s tough to keep content fresh — especially in the world of marketing and Google when changes are happening every day. By including the URLs, I have a way to share new developments.

The URLs also helped keep me from going off on tangents or going too deep on topics that many readers may not care about. For example, rather than recap an entire thesis that David Berkowitz wrote about “Jewhavioral Targeting” in my chapter about “Letting the Data Decide,” I just cover it in a sentence or two and include a link.

There’s a few people in the book that were mentioned considerably more than others, how did you pick the contributors, quotes and subtopics?

Aaron Goldman: Along the same lines as the URLs, I knew it was important to include a wide variety of perspectives on the lessons learned from Google. No-one wants to read 300+ pages of what Aaron Goldman thinks about marketing. But people do (I hope) want to read 300+ pages of what some of the brightest minds in the industry learned from Google as curated by Aaron Goldman.

I interviewed over 100 marketing big wigs in the course of preparing my manuscript ranging from agency types to Google employees to researchers to university professors. The ones who are mentioned more frequently are the ones that gave me insights that were the most compelling, controversial, quotable or all of the above.

The book is part history, part teacher and part tour guide…who is the intended audience?

Aaron Goldman: This book was written for anyone who has a stake in marketing. It covers all areas of marketing — advertising, PR, promotions, media, product development, etc.

And it’s written for people like me who have very short attention spans. The copy is quick and punchy. And there’s lots of fun wordplay. I put the “pun” in punchy.

It doesn’t matter if you work for a small business or Fortune 500 company, the lessons in my book are applicable to your business. In each of my 20 chapters, I share a lesson, discuss how Google puts it into play, cover mini-case studies of marketers that exemplify it, and then walk through an exercise for the reader to relate the lesson to his or her business.

This book will also make great fodder for search engine marketing pros looking to broaden their horizons or understand how their skills can be leveraged across other channels.

What knowledge do you want people to take away from the book?

Aaron Goldman: First and foremost, I want people to take away specific tactics that they can apply to their business immediately. If you read the entire book and don’t find a single thing you can do to grow your business right away, then I will personally refund your money.

That said, I also want to give people a framework for thinking about the future of marketing. I spend quite a bit of time throughout the book — and especially in the last chapter on “future-proofing” — discussing what the marketing world will look like 10 years from now and what Google’s role might be within it.

If nothing else, I hope people will find my book entertaining and enjoy getting a peek under the hood of one of the most fascinating (and profitable) companies in the modern era.
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I wish Aaron the best of luck with his book and look forward to learning from his experiences as I continue to explore my book author aspirations in the future. The constant mutual learning from all of the wonderful people I meet in the digital marketing space as I speak and consult around the world is special and hard to fully describe! Looking forward to seeing the other scheduled stops on the GoogleyLessons blog tour!

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Marketing Channel Business Strategy Reallocation Management: Where Are You?

The other day Google (GOOG) had it’s earnings call, Google stated that a primary agenda for 2010, in addition to mobile, was display advertising. Yes, you read that right, display advertising.  Display? Yahoo 2.0? After the call one had to think about how non-targeted and potentially wasteful advertising spend could potentially be harmful to corporate profitability as some people might try display that aren’t appropriate for display (and could do far better just creating quality content to be indexed in organic search). The promise of the Internet comes from the potential to change organizational structures to be closer to the customer in the way that Peter Drucker would want to increase customer utility and reduce the cost of marketing and sales. I think we have all underestimated the amount of time these changes will take and clearly question whether our society is picking the right leaders to lead these changes.

Obviously one must consider that without true reform of advertising models away from CPM driven page view models how display in 2010 can do nothing to further the goal of lowering costs of marketing and sales for companies and improving our standard of living. CPM can only maximize revenue of an ad network with some residual benefits to publishers. A few days ago I considered writing something about this, but thought this was part of something larger than just Google and their display initiatives in 2010.

Surely, less than 48 hours later, Jason Calacanis started a discussion about comScore that has the Blogoshpere abuzz. Michael Arrington also chimed in (as did a bunch of other people) in his post, Jason Calacanis Punches Comscore In The Face. Comscore Punches Back. Fred Wilson Drags Us Into It. $SCOR” rel=”bookmark” href=”http://techcrunch.com/2010/01/24/comscore-calcanis-wilson-punch-face/”>Jason Calacanis Punches Comscore In The Face. Comscore Punches Back. Fred Wilson Drags Us Into It. $SCOR.The buzz around Jason and his conversation is ultimately about symptoms of the current ecosystem, not the root causes of the future end game.  While the conversation about the current state is certainly an interesting conversation to observe, it’s not the conversation I wish to take to the next level. We need to have a different conversation. There is so much more to achieve and limited marketing resources of companies need to be put to work effectively. There are advertising models of the future to consider where offline, mobile and Internet will collide and will someday make this entire conversation look primitive.

Sure enough reading this post brought me back to the conversation about Google and the worthlessness of poorly targeted and untimely display banner ads. You see there was not one but two large banners on TechCrunch that stood out as irrelevantly served by Google. What were they? They were display banners for a company I had interviewed with to be the CMO of in Spring of 2009 that I would have likely have increased the revenue significantly by now.  Unfortunately most CEOs don’t yet fully understand the magnitude of the amount of change  that is necessary to transform a company successfully for marketing on the web while improving customer satisfaction and the corporation’s profitability. I had researched them and their competitors back then. I was never a potential customer of the service. So now, a full nine months later, here I am looking at this completely irrelevant ad on TechCrunch of all places (which is completely unrelated to the vertical). Wasteful. Pathetic. Sad. Not something a rational business leader following the rules of being a Gen X CMO where search marketing becomes the top of the strategic process.  The first decade of the Internet got us to the batters box to start the game of corporate business strategy transformation, I look forward leading that conversation into the first inning during the next few years. The magnitude of the change and the amount of transformation needed is massive, whether it is a small company or a member of the Fortune 500.

You should read those comments in Michael Arrington’s post and think about their motivations – extremely carefully. You’ll also find a link to Jason’s original post there if you wish to read the full details. The future of not only the Internet, but also the future of business organizational structures and marketing strategy budget direction hangs in the balance.

So my question for Jason Calacanis, Fred Wilson, Michael Arrington and EVERYONE ELSE is the following, “Is it time to stop pretending that offline branding models simply converted online is the future of the advertising? If a world migrated budgets from CPM banner ads to CPA/CPL and other emerging forms, who would really care about unique visitors besides site owners seeking an ego boost? ”

Bonus question for Fred Wilson: Wouldn’t your energy be better spent on funding ideas that move the conversation in the direction of innovation of advertising instead of arguing with Jason about a company you exited long ago? (If you are up for it, I’d like to create those realities with you in start ups in that future arena.)

In the end measurement of the type discussed in Jason’s post only matters in an advertising world based on page view based(CPM) or time sponsored impressions. As in my example above, considerable display advertising occurs in an irrelevant way after the fact. For example, I bought a car last September, I’m still seeing increased banners on the models I considered now – after the purchase. Women planning weddings likely have seen related retargeted banners long after the wedding has occurred, possibly even after the divorce is filed in some cases!!! We must do better.

The convergence of offline, online, search and mobile marketing will require entirely new processes to effectively manage them as it becomes a real-time individual decision marketplace. To me, it will have similarity to the changes I made in the 1990’s at BlackRock, where we created new data, new structures, new standards and created better information for us to create strategic advantages.  I actively network with some outstanding nascent start ups, sadly many are ignored as many VCs look for traffic or who is involved rather than focus on revenue models, vision, market size and evidence that there might be paying customers for such a new , disruptive model.

The economy right now is bad, but to state that it is just an economic event is way oversimplifying it. It’s prolonged and drawn out due to the structural effects of the Internet not being managed to corporate advantage effectively. Stated simply, corporations and our society is not allocating resources in an effective manner as it fails to migrate budgets and marketing strategy to the highest ROI activities which attract relevant customers. It’s time for scarce, new and often misunderstood breeds of executives that understand these concepts to be allowed to realign corporations big and small, new and old to these new realities otherwise we will see more corporations destroyed “by doing nothing”. There is certainly a significant cost to tapping new leaders, with new skills to lead organizations into new frontiers in terms of realignment and retraining. However, the costs of doing nothing are far greater to our society as not allocating budgets to the most efficient channels and allowing those decisions to be made by people who understand these new realities is far greater.

All I can ask the both the blogosphere and the world business community is to please stop the bickering about these legacy models so we can move onto the real issue and work ahead – realigning our corporate business strategy and our society to the realities of Industrial Revolution 2.0. It starts with board of directors, CEO, CFO and COO executives asking their CMO and marketing partners the right questions. The journey will be fun.

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DEPAUL EARNS #2 GRADUATE AND #7 UNDERGRADUATE RANKING IN ENTREPRENEUR MAGAZINE’S ANNUAL “BEST SCHOOLS FOR ENTREPRENEURS”

As an alumnus of DePaul University and a member of DePaul’s New Venture Challenge judging team since inception, I’m pleased to see this ranking!!!

However, high rankings on entrepreneurship education alone is not sufficient, the next steps are:
1) To build a transparent, quick and efficient marketplace for entrepreneurs, experienced and passionate management teams and startup capital.

2) Modify the focus toward commercialization of businesses in the model outlined above, ultimately success is measured by the number and quantity of companies that they’ve enabled to scalable, not just lifestyle growth curves. I look forward to participating in this journey.

Here’s the full announcement…

DePaul University’s entrepreneurship program opened the new academic year on a high note Sept. 10 with news that it has again been recognized among the finest in the United States in Entrepreneur magazine/Princeton Review’s annual “Best Schools for Entrepreneurs” ranking.

DePaul moved up three places to second on the list of best rated graduate entrepreneur programs in the national rankings, which are posted on Entrepreneur’s Web site and will appear in the October issue of the magazine. The university placed seventh in the undergraduate entrepreneur education category and was the only Illinois university ranked in that category.

“DePaul offers students exposure to thousands of successful entrepreneurs in a large urban setting with sophisticated financing services available,” the magazine noted. “Entrepreneurial supporters are extremely active in sharing knowledge, resources, contacts and expertise. The program provides very supportive administration and infrastructure through the Coleman Entrepreneurship Center.”

Entrepreneur partnered with the Princeton Review, a leading educational services provider, to solicit surveys from 2,300 undergraduate and graduate program administrators to determine the rankings. The survey covered three areas: academic offerings and requirements; student enrollment and faculty quality; and “outside the classroom,” which examined student organization, mentorship and scholarship opportunities. An advisory board of entrepreneurship educators also provided evaluations of the surveyed programs. Based on the data and review, a total of 50 programs (25 undergraduate and 25 graduate programs) made the list of the best.

“DePaul’s rankings are a tribute to the academic excellence of our program and the quality of our faculty,” said Harold Welsch, Coleman Entrepreneurship Chair at DePaul, who founded the program. “Using their education and start-up experiences, faculty members help students look to the future and identify viable business opportunities. They share their experiences with the students willingly and with great enthusiasm.”

Founded in 1982 at the College of Commerce, DePaul’s entrepreneurship program has grown to encompass 12 undergraduate and graduate courses taught by 16 faculty members. The faculty represents a mix of distinguished scholars of entrepreneurship and successful entrepreneurs.

Courses cover business plan development, entrepreneurial strategy and management, new venture financing, business growth, creativity, innovation and technological change, among other topics. More than 600 students take undergraduate and graduate courses in the program annually. Students have opportunities to participate in a number of mentorship and internship programs, as well as entrepreneur organizations, including Collegiate Entrepreneurs Organization, MBA Entrepreneurs Club, Social Entrepreneurship Club and Students for Entrepreneurs.

The program is supported by the Coleman Entrepreneurship Center, which manages education and outreach programs designed to stimulate the start-up and growth of entrepreneurial firms. The center also sponsors Launch DePaul, an annual year-long business plan competition that awards cash prizes and business start-up services for the most promising business plans submitted by students and alumni.

“We believe that today’s students need practical learning opportunities that extend beyond the classroom,” said Raman Chadha, director of the center and a member of the entrepreneurship program faculty. “The Coleman Center creates these opportunities by working with faculty to connect DePaul students with successful entrepreneurs, help them launch ventures and provide real-world experiences. Students are able to immediately apply what they learn in the classroom, acquiring wisdom that only comes with these opportunities. The entrepreneurial spirit at DePaul has never been stronger.”

The magazine’s “Best Schools for Entrepreneurs” top 10 graduate programs were:

1. Babson College
2. DePaul University
3. University of Southern California
4. The University of Arizona
5. University of South Florida
6. University of Illinois, Chicago
7. University of California, Los Angeles 8. Drexel University 9. Chapman University 10. University of North Carolina at Chapel Hill

The top undergraduate entrepreneur programs were:

1. University of Houston
2. Babson College
3. Drexel University
4. University of Dayton
5. University of Arizona
6. Temple University
7. DePaul University
8. University of Oklahoma
9. University of Southern California
10. Chapman University

To view the full rankings, go to: http://www.entrepreneur.com/topcolleges/.