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SXSW: Guy Kawasaki and Chris Anderson

17 March 2009 in Conferences & Events by Kate | View Comments

“In 2006, Chris Anderson introduced the concept of the Long Tail. His soon-to-be released book will talk about the power of free. Will his theories stand up to the tough questions of venture Silicon Valley venture capitalist Guy Kawasaki?”

Keynotes:

Guy Kawasaki, CEO, Alltop
Chris Anderson, Wired Magazine

Guy: What would you do if you were Twitter and needed to make money?

Chris: I’ve been dreading two questions.  This is one of them.  The other is how to fix the New York Times.  There’s the monetary economy, and the non-monetary economy.  Your options were to exit or throwing advertising at it. Now, we’re talking about making money now.  So there’s the Freemium model (have a portion free, a portion paid for).  So, who’s going to pay?  Consumers or advertisers?  The ability for Twitter to raise some brands in standing is actually worth it.  Maybe that’s where advertisers can come in.  For Twitter, I think charge companies somehow, and build from there.  How do you create the version of the product that people will pay for without crippling the base product?  How much loyalty and stickiness do you have?

Guy: How would you change Wired Magazine if you could?

Chris: Paper still matters.  I believe in books.  What content adds value to the internet is the question.  Paper that is high productive value, 8000 words, high-quality photos… that works better on paper.  But that’s not all we do.  We have multiple forms.

Guy: I tried to get my editor to offer Reality Check for free in .pdf form, and it was like hitting a wall.

Chris: My editors are great, and they knew what they were signing up for when we started working together.  I wanted to be able to experiment in publishing.

Guy: Conceptually, most entrepreneurs think that, now, monetizing popularity is hard.  Do you think monetizing popularity or achieving popularity is harder?

Chris: Monetizing.  I also think that the user has their own problems with monetizing their popularity.  Give your audience value, and then getting money from there… there’s no one way.  Everybody is trying new things and experimenting.  One of the key problems in publishing is misalignment of goals.  In the music industry, the only thing not working is the publishing portion.  The labels decided they needed to align their goals with the industry.  Seeing the world the same way that the artist will see it.  Books have a similar problem.  Publishers want to sell books, and doesn’t participate in all the other ways in which you’re selling yourself (speaking, different forms etc).  Maybe the publishers can align their interests with those goals and do something like offer full consulting services for an author.

Guy: Tell me about the book.

Chris: We have a love hate relationship with free.  20th century free is a world where the products have real costs.  Now we have a new kind of free.  The ability to produce this content at such a low cost makes it, basically, free.

Guy: I was in Shanghai the other day, and I bought your book already for 50 cents.  What can we learn from China where there are no copyright laws?

Chris: China is the future of free (and Brazil).  Free is the force of the digital era.  We have he first market where the marginal cost is close to zero, so the economic theory of bringing down price to marginal cost.  What is piracy?  It’s the animal force of Bertrand’s theory, it’s forcing you to bring down your price to free.  If you’re good, you use piracy to benefit you.  It’s produced and distributed for you, and creates a celebrity for you, and that’s where you monetize.

Guy:

Chris: You’ve described Wall’s Drug.  The people who bought this store in the 1950s, they needed to get people there, so they gave out free water to bring people in.  People would then buy other things.  You have to calibrate it.  You don’t want a bunch of free-loaders.  So you’ve have to do it so you get the appropriate conversion.  Free is very powerful.  Think about Zappos, they offer free shipping, and they take the risk out of experimentation, encourage you to try out shoes etc.

Guy: Why is free so much more attractive than something like 10 cents?

Chris: The penny gap.  There is a huge difference between zero and one penny.  There is a cognitive flag of realizing what money means in terms of value.  Offering zero doesn’t even raise that flag.  It’s not about the money, it’s about that flag and the fact that it makes you really analyze what you’re purchasing.

Guy: Is there any scenario, in the upcoming generation, that people will pay for digital music?

Chris: Sometimes, it’s easier.  It’s easier to get music off iTunes right now and pay 99 cents.

Guy: Is there any scenario where the fact that “cheap means it isn’t good” will come into play?

Chris: In general, no.  We’ve internalized that fact that there’s no excuse of sucking.  If something sucks, we will leave.  It’s not the metric we use in the digital worlds.  When dealing with you competitors, some of which might be paid-for, you have the issue of people importing their thoughts of the original service onto your product, with skepticism about the fact that you’re claiming to be them.

Guy: Psychologically, do you think people are more motivated by the fear of losing something they had, or the fear of not getting something that they could?

Chris: Great question.  We’re generally motivated more by thing that are negative.  Things that you don’t have are looming issues, that’s what traditional marketing deals with, but they never follow up by asking how you felt about it.  Free is great with this.  They let you decide how you feel about it before you commit the resources, and by the time you’re ready to pay, you (hopefully) love the product where you don’t even hesitate.  You don’t have the scenario of fearing losing something or not getting something.

Question: Do you really think “free” is healthful for our industry?

Chris: I don’t prescribe.  I’m observing and describing the economic conditions and trends.  I’m not saying that everything should be free.  It will be out there.  The book is about business models that are based around free.

Question: How does this apply to the luxury brand market and the non-profit sector?

Chris: You have two ends of the spectrum.  Luxury is an interesting space. It’s a classic Long Tail model, where the smallest percentage of the population pay the highest portion of the price.  Free exists here, you can get the cheap version or the expensive version.  And the existence of the cheap version makes the luxury brand more desirable.

How do you feel about the free model?

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SXSW: Old Man Nielsen vs New Market Research

16 March 2009 in Conferences & Events by Kate | View Comments

“Have traditional surveys and focus groups gone the way of the dodo? Can social media really get to the heart of customer sentiment? This panel will discuss, based on real company experiences, what combination of traditional and social media market research companies need to use to truly understand their customers.”

Panelists:

Daniel Neely, Founder & CEO, Networked Insights
Dave McClure, Troublemaker, Founders Fund
Jim Schroer, Founder, EngageNextGen
Michael J Lambie, Digital Research Director, Nielsen Company

Neely: Social media means more info.  What hasn’t changed? You need to attract customers, you need to stay relevant.  How do they do that?  There’s a whole bunch of jargon out there about the topic of engagement.  It matters if they talk about it, if they’re saying something and if they’re impressed.  Old Way means a lot of data.  The New Way means actionable insights.  Data is free, insight is worth a little money, valuable insight is even a little more money and actionable valuable insight is worth a lot.  Social media is a very simple thing to understand, but let’s simplify it to a level that allows us to take action.

The Old Way required hiring statisticians, running regressions etc.  The New Way adds anthropological perspective to the numbers.

McClure: We use primary data to build a picture of the consumer, and try to segment them by engaging them on the web and being in their communities.

Schroer: There’s an economy out there that is fundamentally based on the rates of 30 second TV commercials.  There could be an argument made that this is now a house of cards.  In social media, people aren’t talking about the same things that are on TV commercials.  During the Super Bowl, a lot of the viewings on website went down after the commercials.  I want to challenge the system that’s base don TV commercials, and I think the measurement of engagement on the web is more effective.

Question: What are the premium benefits you’d get out of a sentiment-based analysis vs a quantitative-based analysis (for Neely)?

Neely: How do we understand things from a jargon standpoint?  How do you look at things from the good and bad, not just the fact that there was a mention?  It’s not just about the number of impressions of interactions.  When we think about interactions, we can’t just think about post-content.  About 15% of people post content.  What about all the other 85%?  Let’s understand the whole story, and then think about how that effects advertising spend?

Question: What about PR?

Neely: If you understood the right story to tell, and how to tell it, that’s going to be pretty interesting.  What about if I can pre-inform that story?  PR is about dropping the pebble.

[Pause to ask audience if they trusted their PR firms ability to measure social media..... very low number of hands went up]

Question: What’s the role of listening and the role of vocal minority?  How do you accurately measure the vocal minority?

Lambie: When you have the vocal minority, you have to understand what their influence is.  There’s a percentage that no one listens to.  It’s about influence.
Schroer: I’d love to see the marketers equivalent of a Q-score.  We wanted about 10% of people to be negative, and we didn’t care about what happens in the middle.
Neely: I actually use Twitter a lot to understand what the trends are.  Back to vocal minority, once you get the place where you can see when people have taken information to another place and started to talk about it, that’s really interesting.
Lambie: I love Get Satisfaction.
McClure: You can really get more of the conversation that’s going on out there on Get Satisfaction.

Question: Have you made any changes based on the way you’ve seen info come to you now?

Schroer: It was all about ratings back then.  Now, if you don’t do something remarkable that people talk about (Seth Godin-style), you’re going no where.  The way you spark those things can be PR, outrageous ad, etc, but it’s probably not going to be a traditional TV ad.

Question: Any cools tools?

Neely: Some of the stuff at Viviky are putting together are neat.  It’s cool it’s coming from an agency.  Some of the other listening strategies in terms of free tools.  Traackr is really cool.

Question: Have you ever used landing page tasks into offline channels?

Neely: In the convention space, some of the big conventions out there, companies are learning on the fly through social media what was going on and getting feedback real time.  People can chat and share stories online, how can we use that?  Liquor companies are using this for local marketing, what do people like where?

Question: Where do you propose where we focus our budgets now?  Are there enough attractive tools out there to shift budgets?

Neely: Absolutely.  You can get to such a level of depth using these tools that you can tell people things like when to place an ad during the day.
Schroer: Just do something that someone talks about.  Too much of the creative is just bland.  Super Bowl ads: the bland ones Coke did, their website hits went down significantly.  Worst commerical in my opinion got a huge increase in hits.
McClure: Sometimes ugly works a lot better than pretty.  Sometimes what people don’t understand is that the cost of non-conversion isn’t zero.
Neely: Give people something interesting to talk about.

Question: What’s your golden nugget of wisdom?

Lambie: Focus groups and surveys have their space, but we have to think creatively and critically.  Your consumers are always moving, you have to keep up with them.  There are a ton of free tools out there to help you stay on top of that.
Neely: Start by using the free tools.  When you find that the information is overloading, you need to find relevance.  That might be a good time to hire someone to monitor that for you.
Schroer: Now we have a measurement for Word-of-Mouth, you just have to understand that it’s Word-of-Net.

A few good Tweets:

metrics

What are your thoughts on measurement?  Any favorite tools?

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SXSW: Building Your Brand with Web 2.0 Tools

14 March 2009 in Conferences & Events, Random Thoughts by Kate | View Comments

“Getting attention for your brand (personal or company) is easier than ever thanks to the ole’ interweb but doing it with “zing” is still key to building a following. Learn and ask question from the people who have built brands and careers by doing it with “zing”.”

Panelists

CC Chapman, Partner, Advance Guard
Saul Colt, Head of Magic, Freshbooks
Dave Delaney, Blogger
Loic Le Meur, Founder  & CEO, Seesmic
Chris Brogan, Pirate, New Marketing Labs

Colt: Building your brand is that much easier now.  People will learn more about you than they will from your resume.
Chapman: People are scared about web 2.0, that you can talk about anything across all channels.

[Pause for horsing around by panelists]

Question: How do you balance?
Loic: Personal aspect if very important, it shows you as you really are.  I want to see there faces
Delaney: Like in Twitter, it’s really hard to BS in 140 or less.  You can get an idea of what people are about pretty quickly, it’s hard to BS.
Colt: I’ve decided what my brand is, and it’s genuine with my personality. I’m the world’s smartest marketer with a little bit of creepy. If I’m using this tool to find clients or work, these people will jave to work with me, so why not show them who I am.

Question: How did you guys start your brand?

Chapman: I started out blogging. I just started reading and treated it as my own personal journal.  Whatever you’re passionate about, just go with it.
Delaney: Twitter is a great way to build a brand and interact with your audience.
Loic: Answer every single piece of feedback, especially when it’s negative.
Delaney: I won’t answer all feedback about our products.
Colt: I’m of the belief that you should answer everything, except when it’s super super negative, you can never get rid of all the negativity, and at some point you need to figure out when you should just opt out of a conversation.
Chapman: If you’re on Twitter, you need to be a brand that is ready to talk about yourself, and handle the negativity.  Some brand are just plain not ready for that.

Question: How far do you do in helping companies figure out their plan?  Do you Tweet for them?

Brogan: Hell no.
Chapman: Kick the person out of the nest, they have to learn to do it on their own.  Teach them, and then hold their hand at first.
Delaney: Don’t drive the car.

Question: Where do you focus your energies if you’re supposed to handle all the social media “stuff” for a brand?

Colt: figure out what one is the most successful, and spend 80% of your time on that platform.

Question: Would you launch generally or go in stealth mode?  When you go with a name, should you go with the Double “O”…. Google, Yahoo….?

Loic: Launch as soon as you can, and be open, build it and share it in public.

Question: What do you think about the fact that social media might not be for everyone?

Colt: Social media is a tool.
Brogan: Do you have to use social media all the time?  Hell no.  Where’s your customer, and where’s the needle moving?  Does something happen when you do it?

Question: What about using social media to brand locally?

Delaney: Getting everyone together around a small event is a good way of solidifying a social media strategy.
Brogan: It’s cheap and free, you just need sweat equity.  BrightKite is great for location-based.  If in your area, there aren’t enough people online, it might not be the right thing for you.  But there are a lot of opportunities, you can do a lot of the smaller cafe-style conversations, just a few people.
Chapman: Facebook allows you to do targetted ads by location.  Get people aware of you, and it’s true word-of-mouth.
Delaney: You could set up a search on Twitter or whatever for your town.  When people mention it, just say something back to them.

Question: What about rebranding?

Colt: You still have to worry about your product.  You’re empowering people to tell everyone they know about your product, so if it’s bad, it spreads three times quicker than if it’s great.  Be careful then with things like WOM.
Brogan: It’s a question you have to ask internally: how much do you want it to suck?  And how much do you want people to know that it sucks?
Colt: There’s something to be said about a brand that says that they know it stinks and that they’re working on it.  People really like that.
Loic: Lack of transparency is very passe.
Audience: Have the lawyers reference the case of Tylenol, the effects of addressing it or you’re not addressing it.
Loic: I make a point of never saying that my competitors suck.

Question: A lot of brands don’t disclose who’s Tweeting on behalf of them.  Is there a best practice there?

Colt: I think it’s really important.  People want to be dealing with people, not brands.
Chapman: What happens when someone leaves though?  That’s a hard thing to do.
Colt: You can have several people though.
Chapman: How do you handle when those personalities leave?

[UPDATE: Check out Andy Sernovitz's recent case study on Freshbooks and word-of-mouth (WOM).]

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SXSW – From Freelance to Agency: Start Small, Stay Small

14 March 2009 in Conferences & Events by Kate | View Comments

“The web has always attracted mavericks and entrepreneurs, and a rocky economy makes the freelance life more desirable (or at least more inevitable) than ever. So what happens when your freelance business starts to grow? How big can you get without getting bad? How can freelancers and small teams compete with traditional agencies? Hip freelancers and cool agency heads will answer questions, compare experiences, and tell their stories.“

Panelists:

Jeffrey Zeldman, Founder & Executive Creative Director, Happy Cog Studios (Moderator)
Roger Black, President, Roger Black Studio
Kristina Halvorson, President, Brain Traffic
Whitney Hess, User Experience Designer

Question: We planned this panel a year ago, before the recession, but when things were starting to slow down.  How did everyone start out working independently, how was the economy?

Zeldman: It was 1999, I wasn’t feeling like the creative process was clean, he wasn’t enjoying the agency life and how it worked.  I started Happy Cog in 2000 while the dot.com was falling.
Hess: August of 2008.  I had been freelancing since 2005, but got to the point where the gigs I was getting were bigger and more interesting and I had a lot more control and input.  I had more fulfillment than my full time job. If not now, when?
Halvorson: I lost my last job on 12 September 2001.  When I came up for air, there were no more jobs, so I had to make one up.  What do I feel really confident about?  I knew a little about a lot of things, but one thing I felt really good about was writing.  I started handing out business cards saying I was a copywriter.  I slowly built a client base that slowly gave me more work than I can handle, so I had to hire.  I know have 14 employees.
Zeldman: A lesson I heard there, pick someting you’re good at, and call yourself that.
Halvorson: If you can stand up in front of an audience and hold your own on a topic for 10 or 15 minutes, you can probably make money off that.
Black: Do what you would do anyway, and do it on your own.  A boss is going to get in your way.  We have a team of freelancers that we sometime collaborate on projects with, and pretty regularly, but everyone has their own website, etc.
Zeldman: Bring great people in on a project that will do the job well and pay them well.
Hess: When I started freelance, I wasn’t just doing what I do now.  I had an education in computer interaction, and I do a lot of that.  But a lot of people who came to me at first was end-to-end web development.  I wasn’t getting paid very much, so couldn’t pay someone who might be good at something like graphic design.  Finally I accepted that I am a good user experience designer, and I should position myself as that.

Question: Finding one and finding better clients.  How do we do that?  How do you get rid of bad clients?

Zeldman: For me, they were someone who read something I had written, and they contacted me.  So for me, I got myself out with writing or speaking.
Hess: I started out with family and friends.  That grew into their family and friends.  I had also worked for two bigger agencies, and I reached out to my network their, as those colleagues moved around and needed work done.  It became a referral system and it’s been really all networking.  There’s something that I know that they don’t know, and vice versa.  You become resources for each other.
Halvorson: I knew I’d have to go to these networking things and hand out business cards and it’s just not my thing.  There are other ways to do it. I built my business on food, who would turn down food?  I took people out to nice dinners, and would introduce what I do.
Black: Start small.  Many people think they have to work for a high-profile company to grow.  It’s not so.  You can start out small, and snowball.  You start building a portfolio.
Zeldman: There are different types of non-profits.  Those with money, and those without.  But some big names are really important regardless of the money.  I got Amnesty International, they didn’t pay much, but man did that work.  To a large extent, writing also makes a huge difference.  Write write write.
Hess: What I have is the process down pat.  You can demonstrate to people “here’s how I worked on this project.”  I’ve gotten the majority of my gigs through Twitter.

Question: Let’s assume we got clients and are getting money.  How do you get to a better paying client, or one more accepting of your vision, or get rid of a bad client?

Black: A lot of this is luck.  If someone sees something they like, they want it.  Some of the best sites I’ve done are for jobs I’ve been fired off of.  I was hired years after fired from Bloomberg, almost twice, and finally someone saw my vision, after years, and I nailed it.  The lesson?  Tell them what you think.  They don’t usually know what they want.  Give them your best idea, and someone will find it.
Hess: It’s about confidence.  When I was charging people less than what I was worth, I got shitty gigs.  When I started charging more, even though I was shocked at the sticker price myself, it displays confidence and your stand by your work.  People will pay.
Halvorson: People think they need to underbid themselves, and they charge too little to sustain themselves, and it’s a self-fulfilling prophecy.  I urge people to be confident in your prices, and don’t back down just to get a job.
Black: Ask about the budget straight up.  We ask the budget, and go 10% under that.
Zeldman: Moral – have faith in your process and your proposal.  The other moral, ask the budget.
Hess: Like in dating, being unavailable is more attractive.  They want you more.  They’ll keep trying to get your work, because people want to work with me.

Question: Mainly for Whitney, how do you structure your day as a full-time freelancer so you don’t waste time eating chocolate and doing laundry?

Hess: I’ve discovered that I work best at night, so I do meetings during the day, and then use my nights to do work.  I don’t really have a structure, I probably need to find one.  I work out of my house half the time, and then go to a coworking space (New Work City) the other half.  I love coworking, so I don’t work alone.  I’m self-motivated, and I structure my day based on deadlines.  I work best under pressure, I procrastinate, I get myself into crunch time and produce my best work.
Black: The great thing is that your sense of fun and your sense of work is much easier to handle.  It’s ok that you’re not working under 9-5 workday and you don’t need to feel guilty.
Hess: It tooks me a while to realize I didn’t have a manager, and that it was my decision.

[Transition] Let’s talk about when you hire someone.

Halvorson: When I had my first son, it wasn’t ok to be in meetings all day and work at night.  I needed to hire someone.  And now we’re at 14.  I’m really proud of the culture that we’ve made that takes these sorts of things into account.  It’s changed.  When we were 4, it was easy to go get lunch together, or go to Happy Hour at 4:30.  Now it’s not easy.  But we all decided on this culture from the get go.  It’s not sexy to run an agency.

Audience Question:  How do you finance an additional employee when you need to, and keep your funnel full and keep people on board?

Halvorson: It depends on how much risk you’re willing to take on.  We’re almost solely financed by cash flow.  Don’t hire before the work is there.
Black: The trick to keeping your pipeline full is to get your head out of the current project to recognize that you need to look for the next project.  Especially this year, you just need to get proactive.  Think about all the sales things you can do.  Blog, keep the contact open.

Final Points Covered in Q&A:

  • Collaborate with others to compliment your skills set.  You don’t need to do everything in-house, but leverage your community to give yourself the ability to say yes to every client.
  • Brand yourself: if it’s you, trademark your name.  Keep your logo.  Use the same style of writing.
  • Ownership structure: It used to be stock options, now I like the whatever profit you make, you split it (Black).  Whatever you do, talk to a lawyer who specializes in these deals. (Halvorson).
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