February 1, 2016

Product Vision and Creative Leadership
Category: Entrepreneur

A product vision describes a problem, owned by enough people, that it is worth solving. An opportunity for a product team to address unmet demand.

Finding a product vision is, then, about finding a worthy problem.

My Quest for a Worthy Problem

As a PhD student at Oxford University, I was prone to solving problems, any problem. Ticking boxes felt like an achievement, like progress. Eventually, I learnt that to contribute to science I would need to solve one problem. One worthy problem.

I asked my PhD supervisor, Mike, to give me my one worthy problem. He told me PhD's were all about the search for the one worthy problem. This search was my quest, my mission, my purpose.

Mike gave me a broad title to frame my search, a broad vision to aspire to, a friendly research lab, and sent me on my way.

For three years I apprenticed and learnt my problem domain, robotics. With time I kept narrowing the focus of my problem to one that still mattered and I could solve.

Only at the very end of my thesis, as I was about to end with no results, did I finally perceive a problem that made a difference, and I could solve

An image analysis method for sure detection and diagnosis of Cancer in mammographs

Mike Brady, Oxford University

How does DNA replicate and how is hereditary information coded on it?

Crick and Watson, Cambridge University, Nobel Prize 1963

Pick Your Problem Domain

A quest for a worthy problem is domain specific. You have to commit to a problem space that is non-generic, a narrow specialization.

Many turn away from specializing in such a narrow domain. Preferring a wider, more generic domain, where clients are more numerous and possibilities more diverse.

Without a quest into a problem space, however, there is no chance of finding a worthy problem. You will not achieve a product vision of any value.

The problem domain is about 3 things:

  1. Users & clients
  2. Markets: the value chain, the competition
  3. Trends & Technology

Tips for choosing your problem space:

  • Who are you, and what makes you different?
  • Where can you make a difference?
  • What trends and breakthroughs are making new problem spaces

First Problem Title - the Problem Framework

Choose a broad problem title to frame your opportunity.

Best to choose a broad, ambitious goal first. A statement of intent

A times ten improvement of an existing problem is a good standard. 10x thinking is favored at Google for framing problems

A narrow, timid, un-ambitious problem framework is unlikely to contain a worthy problem. It will constrain creativity, and will not inspire. Be brave, go ahead, "cure cancer"

Purpose & Belief

At the start, there is no testing, no validation, no process, no management, no derisking, no reassurance.

You have to commit to this fully. Purpose and belief is your only recourse.

If you are not nervous, not un-comfortable, you are doing something wrong. Go back and multiply by 10 the ambition of your problem framework

The searching for a potent product vision is profoundly uncomfortable. Many turn away here.

I am a recovering executive. I like order and structure, certainty and process. Being aspirational and brave in my problem statements is still difficult for me. Hence, I fail a lot.

Jewelry that represents the world of good taste, timeless design, purest materials, and finest craftsmanship


Sportswear that brings inspiration and innovation to every athlete in the world


Enabling People to Live on Other Planets

Elon Musk, SpaceX

To enable sustainable transport through making every-day electric cars as soon as possible

Elon Musk, Tesla Motors

Tools to organize the world's information and make it universally accessible and useful.


Computer-animated feature films with memorable characters and heartwarming stories that appeal to audiences of all ages


To give people the power to share and make the world more open and connected


To give everyone the power to create and share ideas and information instantly, without barriers


Well designed home furnishings at prices so low that as many people as possible will be able to afford them


To make a contribution to the world by making tools for the mind that advance humankind.

Steve Jobs, Apple

The Quest Process

The first problem title, the initial product vision, will be broad, aspirational and full of potential. It is the framework for the search for a valuable problem.

Finding a potent product vision is about progressively making choices. Progressively narrowing down, focusing till you find the one worthy problem.

focus, focus, focus

As you quest forward, your framework will narrow. Your quest will converge within the framework.

Questing for a worthy problem is like panning and sluicing gold paydirt, looking for nuggets. Focus is the narrowing down to the promising areas.

Focus, the ability to disregard areas, to so no to problems is a joy when it arrives. It arrives in moments of intuition, in fits and starts.

Focus, unfortunately, is fickle and often comes wrapped in doubt. By narrowing down, are you stepping past a worthy problem?

You can never have enough focus. The more limited your means, your time, your assets, the more you need a hard focus

No amount of work, magnitude, can make up for a lack of direction. Without focus and direction, you will not vector forward. Simple Math.

Research Mantra

If you are a large conglomerate, you are HP Innovation Labs, then you can widen your focus, and likely find a handful of worthy problems. If not, you must focus.


Best creative work involves talking to people, and making stuff. There are three types of learning;

  • enactive - action based
  • iconic - image based
  • symbolic - language based

The best creative work occurs by combining working with your hands, drawing and talking to people.

At this stage, dreaming is the best form of prototyping


Imagination is a difficult exercise. Uninformed imagination leads to re-inventing the wheel, chaotic digging exploratory holes all over the framework field, and gimmicks that have no value.

Yet imagination is key to the best problem category "new to the world". Where the problem is not derivative. A true sideways jump, going outside the box. Seeing things no else sees.

Critical Mass of Focused Know-How

Know-how is bed-rock though. Accumulate enough focused know-how and perception of possibilities multiplies a thousand fold. Past a critical mass of focused know how, and creative output explodes.

Accumulating focused know-how is frustrating though. How much is enough? Is this enough? When does it finish? The narrower your focus, the quicker you will go up the learning curve. So focus down.

The most reliable form of innovation is extending ideas and patterns from an unrelated domain. This form of innovation requires high know-how levels, you must master several domains before you can visualize parallels.


So first, critical mass of domain specific know-how, then look to migrate patterns from un-related domains onto your problem domain. Finally, attempt whimsy and imagination; can you reframe the problem? Forget all assumptions about your problem, what comes to mind?

The Perpetual Pivot: Method in the Chaos

During a problem quest, the entrepreneur will appear to be cascading through perpetual pivots. He will look at succession of user segments, points of the value chain, trends and technologies.

The quest is chaotic and uncomfortable. Every area and task will require learning anew. Nothing will be a comfort zone.

Yet there is order and a pattern in the chaos. Focus and direction.

The quest is a constrained, disciplined exercise, with boundaries. The multitude of pivots, in user segments, differentiation and technology are framed tightly within boundaries.

An effective entrepreneur has discipline. He stays within his problem framework; sticks to his chosen problem domain, his problem title.

Deadlines are Your Friend

Creativity needs constraints, and a deadline is the best of constraints. A pressing deadline gives you resolve and energy to decide, to make choices.

At this stage, you will have little data, no extensive metrics to gather, no KPIs, no excel sheets. Most choices will be based on incomplete data, on intuition.

Pressing deadlines give you the energy to keep making choices, keep deciding on the way forward. Keep Moving!

Actionable Product Vision

The quest for the one worthy problem finishes when you hand the product brief to a product manager.

The product manager will require

  • customer segment for which the product is intended
  • customer problem which the product will address
  • utility prototype demonstrating the utility to serve the customer's needs
  • technology prototype demonstrating the technology to be used

Introduce the product manager to your fieldwork, the pool of test candidates on which you have been testing your product vision

As a guarantee for your work, explain the user value tests you have conducted. Some measure for User satisfaction, NPS (net promoter score) that proves a defensible differentiation in the market.

Once the product vision reaches this point, it has to have sufficient focus and potency that it requires no more pivots.

Senior product managers will run opportunity assessment evaluations of their own, to establish that the product vision is viable and has potency. They will then proceed with a product discovery process which will detail the user segment and prototypes, and mature them to targeted production quality products.

Senior product managers, with a good UX team, are capable of limited scope product pivots, and minor market pivots. But the product founder should not count on these, and should consider the product vision search complete.

Product Vision Lifecycle

The internet, with its almost perfect information flow, is making a product's differentiation depreciate quickly. Your competitors can copy you quick.

In fashion, it takes only one season for a leading style to go out of fashion, or be copied by other fashion houses.

Product differentiation lessens through both competition and commoditization of the market

So, experienced product managers will demand an appreciable differentiation in the product vision.

The Best Product Team in the World

Differential utility buys the user goodwill essential for a product to engage well with a user. If the utility you offer is available, equally, one click away, you have become a commodity. The user will extend a very limited amount of goodwill during the interaction.

UX design teams sometimes don't understand this.

Usability, lean startup iterations, product identity & narrative, branding, aesthetics, interaction design, and gamification are for naught if the product vision does not provide differentiation

The best UX design work in the world does not make up for poor differentiation.

Even with lean startup iterations around the product vision, the market's maxima positioning is taken by a competitor. The market horizon for the product has become fallow.

It is time to pivot the vision, pivot the product, pivot the business.

Signs of End-of-Life

As differentiation depreciates, the product team will start to struggle with important metrics, KPIs. Starting with virality, then loyalty, then basic engagement.

The efficiency with which a product team achieves its outcomes degrades progressively, as product vision depreciates.

The life-cycle of a product ends either as a monopoly, or as a commodity, like Aspirin. You may achieve basic User engagement through brilliant product, sales and marketing team. But profit margins will be zero.

Either conjure up a new potent product vision, or change the business to provide services to other product companies.

Creative Leadership

Creativity is, increasingly, the only differentiation in the market

So expect to monitor, and prepare for end-of-life of your product vision.

When, ultimately, the product's end-of-life arrives, it will arrive suddenly

Have the next product vision ready.


Product Vision bookshelf

- Understanding a Problem Better than Anybody Else, Chris Dixon

- Generating Startup Ideas, Marc Barros

- Founder's Vision - Entrepreneuship is an Art, Steve Blank

- Framing your Search: Vision vs Hallucination, Steve Blank

- Developing Strong Product Owners, Marty Cagan

- The Role of Domain Experience, Marty Cagan

- Product Strategy in an Agile World, Marty Cagan

- Product Passion: What are you trying to achieve?, Marty Cagan

- Product Evangelism: Sharing the Vision, Marty Cagan

- Product Porfolio Management: Planning the Life of Your Products, Marty Cagan

- Missionaries vs Mercenaris: The Need for a Compelling Product Vision in Driving Product Teams, Marty Cagan

- Product Managers Must Understand Product Vision: Big vs Small Product Owners, Roman Pichler

- The Kano Model: Depreciation of UX Design Differentiators Over Time , Jared Spool

- Emergent Strategy: The Big Lie of Strategic Planning, Roger Martin, Harvard Business Review

- Finding Your Edge, Alice Bentinck, Entrepreneur First

- Startup Playbook, Sam Altman, Y Combinator

- Big Ideas: Google's Larry Page and the Gospel of 10x

- The Zag, Marty Neumeier

- Change by Design, IDEO, Tim Brown

- Driving Corporate Innovation: Design Thinking vs. Customer Development, Steve Blank

- Look, I Made a Think: Confidence in Making, Jon Kolko

- Well Designed: How to Use Empathy to Create Products People Love, Jon Kolko

- Lean Doesn't Always Create the Best Products, Jon Kolko

-Illustrations by Hugh McLeod, Fair Use

-How to Get Startup Ideas, Paul Graham

-Why to Not Not Start a Startup, Paul Graham

-Before the Startup, Paul Graham

-Creative Confidence, Julie Zhuo, Facebook

-Creativity Inc, Ed Catmull, Pixar

- Startup Differentiation: You are the DNA of your Company, Peter Nixey

-Why Founders Fail: The Product CEO Paradox, Ben Horowitz

-Be a Great Product Leader, Adam Nash

- How do You Find the Secret for your Product, Peter Thiel

- On PhD Students, Sir Mike Brady (my supervisor), Robotics Research Group, Oxford University

- Advice for Thriving in a World of Change, Joi Ito

January 15, 2016

The Future of Competence: Don't Be Generic

My competence seems to cycle from leading-edge to generic.

I started as a specialist, with a PhD in robotics, head-hunted by the robotics department of the UK Nuclear industry.

A few years later, I was a technology manager delivering solutions to customers in the nuclear, aerospace, pharmaceutical, and financial industries. A generalist

Then, I was CEO. Raising finance, recruiting, designing departments, objectives, process, operations. The ultimate generalist

Then, as the dot-com bombed, I stopped having a job.

I joined 100,000 other business managers who were out of work.

That was the end of that cycle

You have a Choice

The choice of being a specialist or a generalist is hard.

The choice, like any investment, is a compromise between risk and reward.

For both people and companies. We either choose or it is chosen for us.

Often we don't seem to have a choice. It just happens

The Lure of Generic Skills

Learning excel or outlook are good investments. They are low risk choices, most likely to pay off

Lawyer, manager, accountant, salesman, marketing are also low risk choices.

Job boards always have openings for good managers and salesman.

A manager, salesman or accountant can work anywhere.

Business is about managing people. If you can manage people, you can manage any business.

Managing Human Capital, Harvard Business School

Generalist skills provide structure, certainty and choice. Established education, clear career path, wide choice of employers and customers.

It is the sensible, reputable choice.

Why be different?

Global Markets: Commoditization of Skills

Globalization and technology have increased the supply of skills and services

Generic skills and services are the first to be replicated by competitors in different geographies.

In the world of Google, and online job search, your competition is just one click away

Being the best at a generic skill no longer guarantees a job.

You can no longer compete by simply being better

The Need to Be Different

To compete, you need a service and skills that are not replicated easily

I dont want to be the best. I want to be the only.

Marty Neumeier

Your skills need to be special, different

If you are not different, you have no identity.

You're just a commodity

To have an identity, you need a point of difference

And if you don't have one, you need to create one

Dave Trott

Differentiation: You Have to Choose

Making yourself different involves choosing. You have to choose a focus. You have to choose your difference.

Persisting with your focus involves saying "no" to jobs, requests and clients outside of that focus

Acquiring a specialism, a differentiation requires a sacrifice. Requires an investment

The greater your focus, the greater the possible reward, the more risky the investment.

Increasingly, without risk, there is no reward. It is the nature of the current market.

You will have to take some risk.

Focus is the Hardest Thing

Most of us like being generalists.

I like being versatile. Give me a problem, I will fix it.

I don't have to make choices. I just serve.

I like diverse problems. I like learning new things.

Variety, is it not the smart thing?


Focus is the hardest thing.

Rules of Focus: The One Thing

First choose your focus. Your domain of expertise.

The generic skills are the functional axis, horizontal rows, in an organization chart.

The specialist skills are the product or project columns, the verticals.

The specialist skills, product or client know-how, provide the competitiveness, the differential of the company.

Specialist skills are always domain specific. Highly dependent on context.

You are unique because you know the context that matters.

Pick a narrow specialist skill. How many people claim to be experts in your domain?

The harder the competition, the narrower, the more focus you need.

Conclusion: How Your Company Values You

A company is as competitive as its differentiation in the market

Companies value the people that create the difference

All companies can hire generic skill staff. Therefore, that can't provide the company's differentiation.

The staff with skills specific to the company create the differential. They focus on the company's specific domain, its context, its products.

Computer science purists love the art of coding, “if the algorithm is cool, if the integration is pretty, they’re happy.”

“For me, it’s all about the end product, not how I got there.”

Rasmus Lerdorf

Are you loyal to your products, or to your generic skill?

You can measure Domain Specific competence

How much do you know of the company's specific context?

Do you know the customer? the product users? the specific technology? the product? the competition?

The highest scorer in Domain Specific competence is the company founder, always

If you score high on Domain Specific competence, you make a difference

If you want to make a difference, don't be generic


- College and Business Will Never Be The Same - End of Silo'd Careers, Steve Blank

- Knocking Down Walls, Marty Cagan

- The Internal Agency Model, Marty Cagan

- The Refragmentation, the demise of the corporate class, and rise of creative classes, Paul Graham

- How Google Works, Eric Schmidt, Jonathan Rosenberg

- Developing Strong Product Owners, Marty Cagan

- The Role of Domain Experience, Marty Cagan

- Product vs IT Mindset, Marty Cagan

- Finding Your Edge, Alice Bentinck, Entrepreneur First

- So You Want to Manager?, Julie Zhuo, Facebook

- The Zag, Marty Neumeier

- The Brand Flip, Marty Neumeier

- The Linchpin, Seth Godin

- Theory of Efficient Markets, where return is proportionate to risk

- The no.1 Reason to Focus, Seth Godin

- No is Essential, Seth Godin

- Reductio Ad Absurdum - The One Thing, Dave Trott

- "T-Shaped People", Tim Brown, IDEO

- Understanding UX Skills, Irene Au

- Advice for Thriving in a World of Change, Joi Ito

January 14, 2016

Contrarian Investing: The Story of Mr Womack, the Pig Farmer
Category: Entrepreneur

"Mr Womack the Pig Farmer" is my top investment philosophy

The man never had a loss on balance in 60 years.

His technique was the ultimate in simplicity. When during a bear market he would read in the papers that the market was down to new lows and the experts were predicting that it was sure to drop another 200 points in the Dow, the farmer would look through a S&P Stock Guide and select around 30 stocks that had fallen in price below $10—solid, profit making, unheard of companies (pecan growers, home furnishings, etc.) and paid dividends. He would come to Houston and buy a $25,000 “package” of them.

And then, one, two, three or four years later, when the stock market was bubbling and the prophets were talking about the Dow hitting 1500, he would come to town and sell his whole package. It was as simple as that.

He equated buying stocks with buying a truckload of pigs. The lower he could buy the pigs, when the pork market was depressed, the more profit he would make when the next seller’s market would come along. He claimed that he would rather buy stocks under such conditions than pigs because pigs did not pay a dividend. You must feed pigs.

He took “a farming” approach to the stock market in general. In rice farming, there is a planting season and a harvesting season, in his stock purchases and sales he strictly observed the seasons.

Mr. Womack never seemed to buy stock at its bottom or sell it at its top. He seemed happy to buy or sell in the bottom or top range of its fluctuations. He had no regard whatsoever for the cliché’—Never send Good Money After Bad—when he was buying. For example, when the bottom fell out of the market of 1970, he added another $25,000 to his previous bargain price positions and made a virtual killing on the whole package.

I suppose that a modern stock market technician (on CNBC) could have found a lot of alphas, betas, contrary opinions and other theories in Mr. Womack’s simple approach to buying and selling stocks. But none I know put the emphasis on “buy price” that he did.

I realize that many things determine if a stock is a wise buy. But I have learned that during a depressed stock market, if you can get a cost position in a stock’s bottom price range it will forgive a multitude of misjudgments later.

During a market rise, you can sell too soon and make a profit, sell at the top and make a very good profit. So, with so many profit probabilities in your favor, the best cost price possible is worth waiting for.

Knowing this is always comforting during a depressed market, when a “chartist” looks at you with alarm after you buy on his latest “sell signal.”

In sum, Mr. Womack didn’t make anything complicated out of the stock market. He taught me that you can’t be buying stocks every day, week or month of the year and make a profit, any more than you could plant rice every day, week or month and make a crop. He changed my investing lifestyle and I have made a profit ever since.

From John Train's, The Craft of Investing.

The longer your time view, the easier the practice of contrarian investing

The art of waiting for the large sentiment swings. Waiting on the market does not come naturally to investment professionals

Set your own rules, don't be influenced by market volatility.

January 11, 2016

Product First

What Comes First? Sales, Branding or the Product

What comes first? I have had this argument regularly for the last 25 years.

With sales, marketing, technical, and services departments. In fact, with every department director I can think of.

As a junior engineer, my sales director gave me my first "commercial awareness" ticking off; "product engineering is secondary to sales".

The 21st Century - Your Product is Your Branding

Not long ago, you could create a brand with advertising. Pure Brand Advertising.

Now, you can only create a brand with people, with a community. With a crowd of people that say your stuff is good.

You need buyers on ebay voting you as good. Good reviewers on Amazon. 5 star feedback, social media likes, up ticks, votes

What you think and say no longer matters.

Your brand is what the customers say it is. The crowd uses your product, and they decide

The product creates the experience,

The experience creates the reputation,

The reputation creates the brand

Dave Trott

Your product must do your advertising, your sales and your branding

I know sales and marketing directors who are confused and saddened by this new age

Think of it as an oyster,

You start with a piece of grit, and build a pearl round it,

People buy the pearl, they don't buy the grit,

But no grit, no pearl

Dave Trott

So, please. Product first.


- Death of Salesman, Marty Cagan

- "How to empower the customers who will drive your success", The Brand Flip, Marty Neumeier

- "Is advertising a Con?", Creative Mischief, Dave Trott

- Product Trumps Distribution, Nic Brisbourne

- Positioning, Eric & Laura Ries

- Red Hat Community Branding, Chris Grams

June 10, 2015

Product Style

In the Beginning, I was an Engineer

I engineered solutions to problems. I built things. By training, by aptitude, by inclination. I did the maths. I ensured bridges built did not fall in the river. Style was an alien word to me. I did not do colours. I engineered.

My First Client

I delivered a product to my first client. A tele-robotics upgrade. A robot and a fancy joystick. Great tele-presence robotics. For cutting up radioactive boxes. High end gear. Superb function and utility.

But the operators did not like it.

  1. "I have to think about it"
  2. "It is distracting"
  3. "Gets in the way"
  4. "Makes me nervous"
  5. "Too much funny business"

My first product ended in my bin. Client was annoyed. "It is about my operators and their job, not about your product".

Great engineering failed my users

Always Develop with Style

That moment, I became a stylist. A product Stylist. Styling my products for ease of use. Where the operator retains his train of thought, his flow, his focus, his concentration, his attention. My product designs must be invisible to the user, while he works.

Always style for your user, and the user's task.

Elements of Style - circa 1900

My first style lesson was - please write clearly

  • Write to and for your audience
  • Do not say more than is necessary;
    confine yourself to what the user needs, to understand what is happening
  • Omit Needless Words
    Vigorous writing is concise. A sentence should have no unnecessary words, a paragraph no unncecessary sentences. Every word must tell.

To improve styling skills, practice, practice, practice

Develop a Personal Style

My favorite style is minimalism. I favour brevity. I keep things simple. I am simplicity driven. In writing, taking pictures, coding, building websites, apps or even fashion. Minimalism is a most effective style.

Nevertheless, always style with a purpose. Style for your User and his tasks

Product Style Pyramid

First rule of product style - please be useful

  1. First comes content and utility, of course,
  2. Style for readability and usability even when developing
  3. Remember the product's identity, narrative and iconography
  4. Finally, focus on the aesthetics to shape a personality, an affect, an emotion Don’t open a shop unless you like to smile - Chinese Proverb

Style basics have not changed in 100 years. The human eye and the hand are a constant. Style has evolved though, check Kathy Sierra's Cognitive Seduction.

January 31, 2011

Where Entrepreneurship is Easy
Category: Entrepreneur

The US seems to be steaming ahead in its drive to out-startup and innovate the rest of the world. Consider, the qualities an entrepreneur must show, as Mark Suster well describes :

  • Not very status-oriented
  • Doesn’t follow rules very well and questions authority
  • Can handle high degrees of ambiguity or uncertainty
  • Can handle rejection, being told “no” often and yet still have the confidence in your idea
  • Very decisive. A bias toward making decisions – even when only right 70% of the time – moving forward & correcting what doesn’t work
  • A high level of confidence in your own ideas and ability to execute
  • Not highly susceptible to stress
  • Have a high risk tolerance
  • Not scared or ashamed of failure
  • Can handle long hours, travel, lack of sleep and the trade-offs of having less time for hobbies & other stuff

Evidently, this level of creative drive is more easily sustained when you are not starving or worried about how to pay the rent. When friends, family, and companies in your neighborhood provide a safety net, for you when you crash or need to bounce back.

Then consider the whitehouse's Strategy for American Innovation, whose main lines are:

  1. Expand access to capital for high-growth startups ($2 billion)
  2. Expand entrepreneurship education and mentorship programs
  3. Strengthen federally-funded R&D commercialization
  4. Identify and remove unnecessary barriers to high-growth startups
  5. Expand collaborations between large companies and startups

Entrepreneurship is easier in a context that is so supportive. America is bound to have a lot more people prospecting for new businesses if the cost of failure and bouncing back is so reduced.

Cameron's Silicon Roundabout needs some beefing up to stay competitive.


Speaking of which, just released:

Prime Minister Welcomes Cisco's $500 Million Investment Goal for UK as Part of Support for East London Tech City

January 8, 2010

Widget Media
Category: Online Economy

After a year of extensive development, Enclick has launched the following information services for social networks, blogs and individual web sites.

Keeping with the current vogue for the free price policy, all the web sites have free widget services. Needless to say the services have quickly found social traction with 100,000 webmasters taking a widget

April 14, 2008

2009 the Year of Online Brand Marketing
Category: Online Economy

The UK spent €3500 in online advertising during 2007, according to a recent study by PricewaterhouseCoorpers and the World Advertising Research Centre (WARC). Online advertising grew 38% during 2007, taking a market share of 15.3% of all UK ad spend. Online advertising is the biggest advertising medium save Television. The study shows that online advertising should top TV advertising during 2009.

All About Brand Marketing

Advertising managers have tested the online medium with harsh conversion campaigns, where campaigns are measured in terms of new customers subscriptions or sales. The next phase is to start using the medium to build brand awareness.

Formerly the preserve of Television, brand marketing is increasingly resorting to rich media and online video to reach target groups. According to the head of the IAB

It’s clear marketing directors now recognise the value of online to drive their business, and more and more are using rich media and video to build their brands, just as they do on TV, Guy Phillipson, Chief Executive, IAB

Catch up TV - Launch of services such as BBC iPlayer and Channel 4’s 4oD are breaking the barrier between video entertainment and the internet as a communications or shopping tool. We are all consuming more video online, rather than Television.

Though brand based advertising, CPM advertising is hardly present on video sites at present. The premium channels such as MySpace Music and MySpace Film are leading the way, selling at a higher CPM rate. The IAB expects to see a greater contribution to online spend in 2008.

In the next few years, User Generated Content sites are set for the highest advertising growth rates

[Disclosure: We are invested in video USG site, tu.tv]

March 10, 2008

Executives Don't Make Good Entrepreneurs

A Harvard Business Review article identifies four deficiencies of corporate executives when working in startup and small business environments. The four deficiencies are in fact great qualities for Executives in a corporate environment, but become their Achilles' heel in entrepreneurial work.

High uncertainty, knowledge intensive tasks, and a rapidly changing market sector are a fact of life for startups and entrepreneurs. Training, experience and value system for a competent proffessional administrators give rise to difficulties adapting in startups in the four following ways.

The first tendency is lack of loyalty to comrades. Startups require strong leadership, and great faith from the staff. Startups have great uncertainty, no guaranteed results, little rational assurances. The entrepreneur must offer a great vision, and a sense of a life altering opportunity. The entrepreneur must give of himself and the company (equity). He must be loyal above and beyond, to expect loyalty back. The usual corporate paycheck and pension plan are not enough.

The second tendency is lack of task orientation. Executives are used to large scale service delivery and product improvement operations, where a portfolio of services must be cultivated, maintained and optimized for volume and maximum margins. The resulting inability to learn and see to the detail and finish of individual tasks makes for poor execution and finish of tasks. The cliche is their total reliance on delegating to staff in order to operate.

The third tendency is lack of conviction and single mindedness. Typically and executive will insist on guaranteed results. "But that is not guaranteed" is the cliche phrase. Without a high likelihood of results, the ultra rational executive finds it hard to commit; you need faith here. Startups create businesses where corporations dare not go; the zones of uncertainty.

Fourth and last is the inability to work in isolation. Executives excel through their negotiation, their team leading, their excellent communication and administration. In typical 10 staff startups, these same skills are secondary. The executive is unable to be productive without somebody sitting next to him.

As a former executive, used to directing business units with hundreds of staff, I can vouch that the four deficiencies are valid and representative of the corporate class. The deficiencies are due not just to lack of experience and training, but also prejudices, mis-conceptions and an unflexible value system. "you are too technical" often being the ultimate insult from one executive to the other. It has taken me a lot retraining, and some soul searching, to be a fully useful player in a startup.

For enterprising MBAs who know that it is at the founding of a business that equity is divvied up, I recommend a post by Jeremy Liew at Lightspeed Venture Partners, to give a balanced view of the skills a business founder needs. For corporate executives looking for more fulfilling work with startups, John Smithson's "The role of the non-executive director in the small businesses" is good.

It takes more than good administration to create a business. I find entrepreneurial and creativity training is still poor at most schools and universities. A tolerance for uncertainty and volatility is hard to teach; rational administration is still the core of most entrepreneurship courses.

As for John Hamm's HBS article on the limitations of entrepreneurs, it is easier to criticize the flaws of an entrepreneur, than to identify, praise and teach entrepreneurial skills.

January 29, 2008

Advertising Market Disruption According to IBM

You expect a scrappy insurgent startup to talk Disruption. Hearing IBM talking "disruption" is, however, much more amusing. IBM's last report on the media sector is entitled The End of Advertising as we Know It. The report does not pull any punches.

The next 5 years hold more disruption for the advertising industry than the previous 50 years, according to Big Blue. Apparently open advertising exchanges will replace traditional media wholesalers and agencies.

A strong concensus opinion, according to IBM's industry poll, is that open advertising exchanges will take 30% of revenues currently won by traditional media. The figure must be in the 5% to 10% range currently. With Google's adsense leading among exchanges with around 50% of online advertising. Yahoo and Microsoft are desparately trying to muscle in.

The big looser will apparently be the 30 second TV spot.

IBM's solutions for traditional marketing agencies? If you cant beat them, you join them. Buy yourself a new business model and infrastructure (preferably from IBM), and hook into these open exchanges. This is not the first market that has succumbed to electronic trading.

January 4, 2008

Ad "receptivity" High for Online Video Advertising
Category: Online Economy

Brand marketing has different metrics to online sales marketing. Brand recall and engagement measure the first, sales conversion rates measure the second. New web2.0 web sites, social networks and video sites, are notorious for low conversion rates. New surveys are, however, showing excellent brand marketing results.

A cross-media study, by Experian Research Services, found that viewers are 25% more engaged in the content of TV shows that they watch online than on a TV. John Fetto, product manager at Experian, said that TV ads online are especially effective at reaching consumers.

"Web sites that are extensions of properties that exist in other media channels have great potential to funnel audiences that are highly engaged in the first place," he said

The Simmons study was based on 74,996 interviews with U.S. adults about the TV programs, magazines and Web sites that they watch, read and visit. The survey was conducted online and via telephone between October 2006 and September 2007.

[Via Meadiapost Publications]

[Disclosure: Yes, we are invested in a video and a social networking site. My views may be biased.]

December 20, 2007

First Year Anniversary for tu.tv

Exactly one year ago, the tu.tv team spent a white night launching their baby. And as one of the proud parents, I insist on showing you a video of Jon Elosegui and his team installing the first tu.tv server.

Thirty servers and over ten Gbits of bandwidth later, we are approaching 10 million unique users a month. The tu.tv team has hit the perfect viral storm, check out the traffic graph below.


The systems department has responded heroically. Even though it occasionally came down to me driving a van full of servers to our London datacenter, capacity has always been ahead of the viral whirlwind's demand. Nobody says incubating is easy.

Not to be outdone, the Sales team has sold its first major brand campaign for Nokia. Unlike straight banners on the site, video overlays have great impact on viewers. Given its similarity with TV advertising, clients and agencies are rapidly accepting the format. All good news on the profit & loss side. It is all looking good for a great second year.

Happy birthday and congratulations to Jon, Felix and company. Have a great second year.

December 11, 2007

Hollywood Writers: More Creative Class Disruption
Category: Creative Class


The trend continues; managers-administrators are being squeezed out of the value chain by the "talent", the creative class. Sports agents no longer make more money than their sportsmen, as was prevalent in the early days of football. Script writers in Hollywood are following suit with the WGA strike, pushing the film and TV entertainment value chain for a bigger percentage of earnings.

The internet is touted as the catalyst for this dis-intermediation. Mark Andreessen paints a convincing scenario of how the creative class will distribute their work directly, without the need to go through the big studios. Thanks to new video technology, the cost of productions is dropping; no need for extensive fund raising. And great material is picked up and distributed rapidly by the social filtering sites, like youtube or digg; no need for massive marketing and distribution budgets.

"Make it, blog it and they will come"

November 30, 2007

UK to Spend €20 billion Online This Christmas

"Ces anglais sont fous" is the comment from one of my partners on seeing the research by Forrester- "these englishmen are mad". The stupendous figure comes to £333 or €500 spent online per capita in the UK.

Such a stream of cash trickles down to everybody in the online sector. Online advertising prices and revenue naturally goes through the roof, as etailers vie for customers. A rough figure is that 10% of this revenue is respent on online advertising.


The enclick team will shortly unveiling a social shopping experiment, just in time for the Christmas frenzy. It will be interesting to see wheter it attracts a community or not.

All I am saying is that continental etailers dream that mainland Europe fall prey to this dementia too.

November 8, 2007

tu.tv launches in video advertising
Category: Online Economy

Even mighty Google needs to pay bandwidth fees and is moving to offer marketing agencies a platform to advertise on youtube videos. Tu.tv has been the first to offer in video adverts to its advertising clients in Spain. This is what a in video advert looks like.


October 10, 2007

Google Buys Finnish Copresence Firm Jaiku
Category: Smartmobs

Insanely jealous is how we feel. Jaiku founder, Jyri blogs the news Jaikido Blog | We're joining Google.

When going through periods without a hot viral startup project from our stables blitzing up the traffic rankings, we have consoled ourselves by saying well it is so difficult in Europe, fragmented market that it is...blah, blah, blah.

All the while Jyri and his partners had a vision of a community tool for sharing presence. As you would expect in Finland, they team used smartmob fundamentals in the product, and was very mobile phone based. Jaiku is mobile phone oriented version of twitter. It is nicely engineered, though does not have the enthusiast following of twitter.

The team is well versed in the mobile smartmob field. Jyri's presentations are entertaining, conveying ideas with depth and clarity. He is on course, in fact, to single handedly make black cardigans a cool clothing apparel.

While there have been occasional acquisitions in the European tech market, the GYM trio have shopped mostly in the United States. So it is tremendously annoying to have one's complacency shattered so.

Congratulations and best of luck.

September 18, 2007

tu.tv in the Top 250 Most Authoritative Sites on Technorati

Quite an achievement for a web service that has avoided writing a blog. Who says engineers cannot communicate? The tu.tv team had a bit of a chuckle over this.

I guess it is not what they say, it is what they do.


August 17, 2007

Over 24 Hours Outage at Skype
Category: Online Economy

Mr Skype, you have over 200m users world-wide, an eight figure yearly revenue and then allow a bug in your network software? The Skype blog explains
Some of you may be having problems logging into Skype. Our engineering team has determined that it’s a software issue. We expect this to be resolved within 12 to 24 hours. Meanwhile, you can simply leave your Skype client running and as soon as the issue is resolved, you will be logged in. We apologise for the inconvenience. , Skype login problems - Skype Blogs

Guess the lesson is not to skimp on software testing for business critical systems. You are no longer a startup; you are a grown up now.

After getting use to skype calls between the guys in Madrid, Barcelona, San Sebastian and London, we are scrambling back to using landlines and Mobile. Ouch.

July 29, 2007

Microsoft Acquires AdECN Electronic Advertising Marketplace


AdECN independent advertising exchange is independent no more. Microsoft has acquired it. AdECN was aiming to be for banner advertising, what AdWords is to text based advertising, as I described a few months ago when AdECN was prospecting the UK. William Urschel, founder and chief executive officer, AdECN states:

"Joining forces with Microsoft will provide the capital and resources to enable AdECN to scale the exchange at a much faster pace, making it more attractive to the advertising networks and other traffic aggregators looking to better serve their advertisers and publishers.

The move adds to pressure on traditional marketing agencies margins. Microsoft now joins Google in dis-intermediating agencies out of online advertising. A great move for publishers and advertisers.

And The Bad News

With a dependent exchange, where the exchange is also a publisher, other publishers inevitably compete on unequal terms. Google's Adsense advertising platform shows little of how campaigns are sold to different web sites, and the margins it makes on the sale are secret. William Urschel, nevertheless, pledges to continue with his vision of transparency,

All of us here are thrilled to join a team that shares our commitment to neutrality for the exchange and also believes that creating liquidity and intelligently matching supply and demand will be two of the most important roles for a technology provider to play in this rapidly growing and evolving market , William Urschel

Microsoft also states that it will maintain the Exchange's independence and transparency

Rather than an ad network, a true ad exchange is the neutral, transparent, automated connection between multiple ad networks. Both groups will benefit from the exchange’s neutrality and transparency, enabling them to make more informed decisions about their bid and ask decisions. Microsoft on AdECN

I remain skeptical. It would require exceptional governance for Microsoft to respect this statute at the expense of profits. The press release mentions the term "ROI" five times. Most likely prices, buy/sell margins and volume allotments will become as opaque as Google's.

We are down to American Association of Advertising Agencies (AAAA) and their subcontractor arbinet, to create an independent exchange where publishers have equal rights, and the market has visibility over how inventory is bought and sold.

[Via Read/Write WEb: Microsoft Buys AdECN Ad Exchange]

July 25, 2007

tu.tv Breaks into the Top 100 in Mexico

spanish free - video gratis

Free video site tu.tv traffic keeps on growing. It has broken into the top 100 sites for Mexico, according to Alexa Ratings. It is number two video site after youtube.

Talking with the tu.tv team reminds me that "When you grab a tiger by the tail, it is all about hanging on. Fortunately, the hispavista team has ten years experience of launching and sustaining online services; it is not their first time.

tutv traffic
tu.tv traffic accoding to Alexa Ranking

Nevertheless, feeding the beast is a challenge. Video sites are resource hungry projects, and the team needs to exercise ingenuity and flair in maintaining the service. It is a good thing the company has an engineering and technical background.

[Disclosure: We are invested in tu.tv]

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