Morgo Diary Note: Price – higher or lower but not the same…

#MORGO 2011 kicked off with an opera signer – Darryl Lovegrove founder of threewaiters , sharing his inspiring and entertaining story of taking corporate entertainment global.  His shared winning formula:

  • Price leadershiplead with an aggressive price strategy either: price well above your competition or well below not the same.
  • Quality
  • Mass Appeal: adapt known concepts to a broad set of people
  • Focus: on what you can control. Do not get distracted with too many product variants do something and do it well.  Stick with your winning formula and make it better.

The pricing strategy makes sense – why be just the same as every one else. Either you have been able to package your offering with lower costs and can hit the market with a new price point, or what you have is so good it demands a special place above every one else.

Lovegrove also explained how speaking in a Kermit frog voice – was great training to become an opera singer.

MORGO is  a entrepreneurs conference / networking event hosted each year by Jenny Morel. Now in its 9th year, this event has become a “must attend event” for both inspiration in the technology business space and building networks.  In this post I share a few notes that I scribbled down on day one.

Speaker 2: Scott Yara CO founder  Greenplum, his lessons for success:

  • Timing: Being ahead of time is a bad idea.
  • Have Passion: “Earn the right”  – to be heard by customers and  staff alike.
  • Solve Real World Problems

Jades’s Craig Richardson  gave us all an update on  JADE’s reinvention.  I remember JADE in the 80’s with their unique and superior software platform. Unfortunately it became another example of a great product that failed to break into the mass market despite its superior performance.

Great Companies defined:

  • Good products
  • Know the audience
  • Talk to heart and head
  • Reinvent themselves
  • Stay close
  • Preoccupied with growth
  • Culture and capability to manage complexity

Rules for Development:

  • Only go where the category is well defined
  • Look for growing markets (20%+ growth)
  • Go where 2 or 3 trends clash
  • Concept to market in less than 12 months

Building on Yara’s comments of being ahead of time is a bad thing, the concept of attempting to create a category is bold move. Hence Jades new approach of only going where the category is defined.

Too often I see businesses attempting to educate customers of a problem they are not aware off. Typically all this means is very long sales cycles,  slow growth resulting in a slow death.

Altitude’s Michael Pervan gave us a fascinating insight into airline interiors and luxury jet fit-outs.  Some customers spending $60M for a jet then spending another $60M to fit it out. Altitudes strategy was to hit a small niche on a mega market that was to small for the big guys to bother with.

Like wise they have applied the IT outsourcing model to a market that has traditionally focused on in-house manufacture. Instead Altitude have taken the high ground of owning IP, Brand and process.

Michael Pervan gave a great endorsement to the NZTE better by design process, with their key change being around improved team collaboration.

Chris Mardon Energy Mad – gave us some hope for affordable LED like lighting. They are introducing a new technology LES “Light Emitting Snakes” which will be available next year at a great price point.  Ye ha..perhaps Hils and I can ditch those pesky halogen down lights in our living area that keep going on the blink.

Next we jumped into the world of AI and robots with an David Hanson from Hanson Robotics. It was a little freaky, but in the same way fascinating. There is a cool geek like toy coming out soon “RoboKind” that uses some of this great new technology. The prediction I took away – was simulating brain power of humans by 2050. All the same amazing use of computing power and robotics.

 

Quid.com’s Sean Gourley gave us an update on his mission to solve world war & peace with his mathematical genius. Although his keyword analysis tool looking at web activity on search gave a great insight into tools that will be of great use for predicting market interest.

Unfortunately I had to miss Day Two due to a speaking engagement in Wellington.

But I will be back for year ten in 2012 to catch up with many friends old and ones I haven’t meet yet.

For more on MORGO check out twitter hash tag #MORGO or the Morgo website

Thanks all a great event as always…


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China – We can no longer ignore this market – MORGO Diary Note #3

I am not sure if I am the only one in the dark, but China is way bigger an economic force than what I thought it was, in fact more than I had imagine. 

One fact set me straight: “Every minute of every day, china opens a new skyscraper the size of Auckland’s Vero tower”. That’s 50,000 skyscrapers.

China is mobilising and creating cities in some 22 major economic regions, building 10 new – New Yorks and some 250 Auckland’s.

By 2025, two-thirds of China’s citizens will live in cities … … that’s nearly 1 billion people

Notes: from Andrew Grant – McKinsey & Company presentation at MORGO 2010

For the full story on this check out http://www.stuff.co.nz/business/industries/4115882/What-it-takes-to-succeed-in-China

Branded Culture – Burn the rule book – MORGO Diary Note 2

How often do we end up with policy and rule making , getting in the way of running our business?

How about  throwing away the rule and policy books and replacing these finite sets of rules with “branded culture” or philosophies. 

How often do we get  “ do we have a rule for this ?” ….  The trouble with rule books is you can never have a rule that covers ever instance.  

The issue with many company policies are they get out of control and just waste management time – what ever happened to common sense.
As an extreme example I heard of a company that got sick of time-wasting management time processing expenses so it adopted an expense policy of – all expense claims are published on the company intranet for all to see. If your’re ok with all other staff seeing that this is an expense you claimed on the company tab then it’s approved.   

Steve Baylis, Air NZ shared at MORGO shared some great ideas on using a simple set of guiding principles to help staff make decisions themselves and set Air NZ up as a stand out airline in a competitive landscape.

How about this for a guide set of principles for a business differentiating itself on customer service:

  • Welcome as a friend
  • Be Yourself
  • Can Do
  • Share your New Zealand

Air New use simple guiding  principles to help  break the need for fat rule books, and allow common sense to prevail. Their simple approach of making hero’s of the staff that follow, rather than spending time producing yet more rules.

By encouraging and supporting this culture you can shift from: Random Service –to Predictable Service to in character service.  It is this interwoven approach of Branded Cause, Brand Communication, branded culture, Brand renewal and Brand Experience that has enabled Air NZ to set itself apart as a true world-class airline.

No Value Proposition – No Business.

Yet another “Me too” or “a solution looking for a problem” – Ideas that fly or not ?

What says your idea, product or business is going to fly or not? In the capital raising business we get plenty of chance to evaluate new business ideas and products. It is amazing how many mad inventors we come across in contrast to entrepreneurs or business people. So what’s the difference: inventors have ideas – entrepreneurs have validated value propositions and business models that work.

 Recently at MORGO Steve Bayliss tabled a great approach to marketing and new product definition. Here is Steve’s test that he applies to new product ideas:

  • ‘Genuine innovation solves a customer problem more delightfully and accessibly than existing alternatives. And as importantly, innovation isn’t a novelty, nor a response to a competitor move, nor a line extension the core brand has no right to make’.

The key point  here is the significant difference between current solution and yours. 

If you can not articulate a good value proposition,  then fix it or give up!

Fundamentally you do not have a business unless you can offer your customers something of value. I strongly advocate if you can not quantify the gain of your client, as a result of using your product or service, then sales will be hard work.

If you are not adding measurable value to your customers, you are going to become, at best, a discretionary spend for the few people who get it,  rather than being a must buy.
Fundamental to your pitch, is the succinct story that describes your value proposition in a palatable way.

If your sales have plateaued – more than likely you are selling technology or ideas, rather than business solutions – your pitch is wrong.  Spend time uncovering your true value proposition – change your pitch and your approach to business focusing on areas that customers will pay for as a top priority.  A starting point, go ask your existing or potential customers how their business will be different as a result of using your product or service.

It blows me away how many companies describe themselves by their craft  … “we’re a software company”  …well no CFO or CEO the ones with cheque books wakes up at 3am wanting to by software. I know software people wake up dreaming of new software platforms…but people don’t need software platforms they need “solutions to real business problems”.

In the business to business environment if you can not quantify commercial gain for your customers you do not have a sustainable business. 

As far as assessing whether your company will make it or not a value proposition that has been validated by the market is the first step – fail on this count and no savvy investor will touch you.

Lighting Small Fires–When do you get investment? #MORGO Diary note 1

NZ Business Superstars Bare all at MORGO

It’s true behind every success there are near failures. Making a go of it in emerging business space is hard yards and certainly not for the faint hearted.

MORGO is an inspirational gathering of NZ Entrepreneurs sharing stories and insights of success and failure. While the real gems are reserved under Chatham House rules of the event there is plenty to share that will not embarrass or incriminate. But I have compiled a small series of blog posts to share some of the MORGO 2010 gems.

Ian Taylor’s (Animation Research) opening remark at MORGO this year was “Bugger the boxing, just pour the concrete”.

When is the right time to get investment?

Grant Ryan from Yike Bike (cool ride by the way) shared the wisdom of “Do as much as you can with no or little money, then once you have the evidence to prove that you have a great business,  get investment and run as fast as you can”. 

Many NZ businesses are great at  doing lots with no or little money, it’s the second step we forget or have no experience with. Many NZ businesses are missing opportunities with lack of cash flow to fund getting the right people on board to achieve their true potential.  

If you want to find out more about how to raise capital call the Escalator Service, which  is a government funded investment ready service.

Steve Bayliss from Air New Zealand shared a great marketing philosophy of  “Lighting many small fires, watch out for the ones that people want to warm themselves with, then pour petrol on them.”

Many people had commented on bold moves Air NZ had made “bare it all campaign”,  “Automated self check in“ and like. But as Ian explained these initiatives all came from simple little trials, that were fuelled with more fuel once they were deemed to be successful. One newspaper ad was what started the bare it all campaign, it was the great positive response that went on to “body painted  safety videos” .  The advice here is not to dissimilar to Grant’s or Ian’s above. (more on this in the next blog post)

Key message here for business owners do not muck around designing and justifying big marketing initiatives, just get on with it, the money and time wasted doing all the thinking and posturing can be better utilised by doing a teaser or pilot trial – JUST DO IT!  Invest quick, and pull out quick if it doesn’t work.