Chris Anderson at The RSA

June30

Tonight I went to go and see a talk at The RSA in London by Chris Anderson, editor of Wired magazine and author of The Long Tail.

Chris was talking at The RSA to promote his new book titled Free - The Future of a Radical Price.

I went to see Chris because I disagreed with him. I normally go to see speakers I agree with. This time was different. I thought that I would try to keep an open mind in the hope that Chris would successfully disconfirm my existing views. He didn’t.

Perhaps I didn’t ‘get it’ but I didn’t see the point of his new book. To paraphrase what I believe it to be - in the new digital world the ‘marginal cost drops virtually to zero’ so things can truly be offered for free unlike the ‘tricks’ needed in the physical world of the past such as buy one get one free. In short, in the digital world, there is such a thing as a free lunch.  I’m pretty sure Chris is confusing marginal cost and average cost here. There’s a significant and important difference in economics terminology. The difference is that marginal cost is the additional cost in producing one more unit of the good or service. It doesn’t include the up-front fixed cost. What does is the average cost - the total cost divided by the number of sales. Which with an extraodinary amount of sales can go close to 0 per customer… but never free.

So having talked briefly about free, Chris went on to talk mainly about ‘freemium’ - the combination of free goods with an additional something that you pay for. He cited Club Penguin, an enormously successful site for kids, where your child can play for free but there are highly desirable items like having a pet which you have to pay for. As one wit on twitter (witter? wit twit?) pointed out, as Chris primarily focused on freemium, maybe his book should have been entitled ‘Cheap’. Regardless, I don’t see any insights here. No useful predictions of the future, more a retelling of the past and present.

As with The Long Tail, I think Chris suffers from Man-with-a-Hammer syndrome - as Mark Twain said “To the man with a hammer every problem looks pretty much like a nail’. Except in this case there are no new insights. This is unlike the Long Tail where there was the restatement of an old idea (power law). This is the disappointing second album when the first album wasn’t all that much cop. Each of his examples missed out on talking about important contributing factors. One notable one being the reciprocal nature of giving away free things e.g. The RSA certainly hopes that offering these free talks will encourage attendees to become Fellows.

What was fascinating to me was that, despite many fallacies in his argument, Chris managed to speak articulately for 45 minutes delivering each of his points with excellent and interesting stories. This is a skill which I admire in Chris and would love to be better at. There’s two lessons I take from this. One, be cautious learning from interesting stories. And two, it’s no good being right, you must also be convincing. Telling stories is perhaps the most palatable way of doing so.

How to make your own Banksy

May2

Banksy HMV
1. Buy Materials (bought mine from the London Graphic Centre)

  • Card (350gsm) - get a couple of bits in case you mess up
  • White Spray Paint
  • Black acrylic paint
  • Scalpel & surgeons blade
  • Canvas

2. Find Banksy image on the web & touch it up in Photoshop

3. Print image onto card & cut out with scalpel. Take your time and be careful not to cut out any ‘islands’. You have your stencil!

4. Paint the whole of your canvas black

5. Spray! Don’t do this indoors as I did. It makes a right mess and stinks you’re whole house out. For best results also get some temporary adhesive. This will give you a sharper stencil.

Meeting Doug Richard

April23

Doug RichardYesterday evening I was at the British Library. I was there for the Inspiring Entrepreneurs series, a chance to meet famous entrepreneurs who are gurus in a particular field. Yesterday evening the topic was raising finance and one of the panel was the ex-dragon’s den business angel Doug Richard.

I managed to catch Doug after the event and have a chat with him and get his advice on entrepreneurship:

  • Doug’s primary theme throughout the evening was storytelling. He said that, though it might be difficult to believe, even bankers are human beings and that every investment must be sold emotionally first. Why? Because you are pitching the future so by it’s nature it must be fiction. You must tell a story.
  • He learnt storytelling by pitching to VCs. He pitched to 46 VCs before finally convincing the 47th to back what was then his first business.
  • Brutal honesty. This is Doug’s personality and it was incredibly refreshing and entertaining. I couldn’t keep up with number of times he said no (including to me, when I asked him for 30mins of mentor time). He said no to pretty much everything but, importantly, he always gave his reason why.
  • It doesn’t matter if you’re 2nd to market or 17th to market but you have to bring something game changing/world changing. Frequently the not-the-best product becomes the incumbent and you need to have something really special to change things.
  • Big incumbant web companies aren’t slow. He instructs his product managers to look at his competitors daily, watch for anything new, and, if it’s any good, copy it.
  • Outside the US, London is the best location for a creative start-up
  • He spoke about the current obsession with user-generated content and how he thinks there will be a swing back to produced content and cited the statistic that most content (80%?) watched on youtube was the produced content which only accounts for 5% of the total content. He said that Joost isn’t the answer but anyone that comes up with a business making a web / TV intersection will make a ton of money.
  • He hears 2-3,000 pitches a year and invests in 2 to 3.
  • He runs his business with a daily cheatsheet with his 5 key numbers that he has e-mailed to him at 9am each morning (e.g.# of sign-ups and # of active members over the last 24hrs) then he has a weekly snapshot, does full monthly accounts and quarterly board meetings.

So meeting Doug was a fantastic education. The only thing that didn’t click for me was his investment approach. He really wanted to be sold to emotionally. That must limit him to only entrepreneurs that are good presenters and miss out on some great businesses. Seems irrational to me.

Crazy marketing ideas

April3

Just found a little scrap of paper where I’d written a bunch of wacky marketing ideas when I was bored once at a conference. They’re kind of fun!
NB I take no responsibility if you do any of these (but I do want to see the photos!)

  • Host a gondola race down the Thames
  • Have a massive flag that you hang from all different sites around London
  • Give out free branded brolleys when raining
  • Have group of cheerleaders that perform around London
  • Challenge competitors to a duel
  • Wear hats that blow coloured bubbles
  • Create grassed areas and beaches
  • Change your name by deed pole
  • ‘Pimpup’ your car, house, hair, suit etc into something wildly extravagant
  • Fly the biggest kite ever in Hyde Park
  • World record juggle, unicycle, pogo hop, leapfrog
  • Hold a massive food fight where everyone is invited
  • Drive a tank in company colours
  • Hold a ferret race
  • Make a message using lights in disused buildings
  • Tattoo your head
  • Give out free t-shirts
  • Burn your logo into grass…
  • Die the river near Buckingham Palace company colours
  • Propose wild radical motions to MPs
  • Start the biggest cha-cha-cha
  • See how many people you can squeeze into a routemaster bus
  • Sponsor the colour of the ball for the football team
  • Dirt blast stencils
  • Fake Jimmy Saville’s death…
  • Cordon off competitors offices with ‘police line do not cross’ tape
  • Create the biggest easter egg hunt ever/ morriss dance

Have you got any crazy marketing ideas to share?

The basic criteria for starting a business

January26

I’ve run two businesses and written several more business plans so I feel I’m getting more and more in tune now with the kind of businesses I’m after.

These are my criteria:

  1. Scalable - the business could be massive
  2. Passionate - the business is something I’m really interested in and excited about
  3. Need/Want - it really satisfies a need, want or desire
  4. Low capital - hopefully this is temporary but currently I have little capital to invest

If my business idea doesn’t have these attributes then I simply won’t take the project on. If it can’t grow big quickly then it’s not worth my time. If I’m not truly passionate about the idea then when times are tough I’m going to really struggle. If it doesn’t satisfy a need or want it will never work anyway. And if it’s a high capital investment then financially I’m not going to be able to afford the sunk costs to get it off the ground.

You might think these criteria are a real hindrance but actually they’re a great help. From having a long list of ideas I can quickly narrow down to a small number of options and focus my attentions on one project quickly.