Jun 7, 2023 | Marketing, Small business, Strategy
Standard marketing advice in this day of homogeneity, and certainly my advice for SME’s, is to ‘find a niche and own it’.
Be the only one that competes in a market niche that you define.
The deeper, darker and more remote the niche the better, because when you get engagement there, you will be alone, you alone will be able to address the needs of those few who inhabit the niche with you.
Kevin Kelly’s now famous quip from his 2008 essay: ‘to be successful you do not need millions of followers, you need only a thousand true fans’ remains as accurate today as it was then.
A true fan is one who will buy anything you produce, they will drive 200kms to see you in a bookstore signing, then buy a bunch of signed books to give away to friends.
The challenge of course is to find those true fans, or more accurately, create the circumstances where they find you, and move through the now standard journey of Awareness, Knowledge, Liking, Preference, Conviction, and Purchase, to Advocacy.
Marketing plays a role in each step of the journey, but the starting point must be ‘macro’. If you start at the niche end of the cycle, too few will be able to find you. There needs to be a filtering process from the macro to the micro for there to be sufficient opportunity for those in the niche who may become true fans to find you in the first place.
It also pays to consider the paradox: There may be a niche in the market, but is there a market in the niche? For you as an SME, the niche may be ideal, but too small for a larger competitor to bother with, or even see.
,Niches can be global, local, and everything in between. To some they represent a ‘Blue Ocean’, a market without competitors. The question now is whether there is a market in the niche, wherever it hides, that will generate an ROI on the resources you allocate towards owning it.
May 24, 2023 | Change, Innovation, Strategy
Dr. Geoffrey Hinton, often labelled ‘the Godfather of AI’ left his ‘home’ at Google so he could ‘freely share his concern that AI could cause the world serious harm’.
The idea of AI is not new. Philosophers and mathematicians through the ages have been speculating and writing about things we would now count as part of the foundations of AI.
Jonathan Swift gave the Lilliputians ‘the Engine’, Thomas Bayes built his probability framework that is still used every day, and Nicola Tesla built a radio-controlled boat for the 1898 New York exhibition controlled by what he called, ‘a borrowed mind’, and the first paper that recognised the potential neural symmetry with our own brains was publsiesh in 1943.
Alan Turing proposed what became known as ‘The Turing Test’ in 1950. This generated a surge of activity, culminating in three academics hosting a workshop at Dartmouth College in 1956. This workshop is now seen as the ‘kick-off’ of AI research, much as the Solvay conference in 1927 was the catalyst to the nuclear research that led to ‘the bomb’ in 1945.
From that workshop, great minds have been busily stuffing the AI equivalent of Pandora’s Box until Pandora, in the form of Open Ai’s ChatGPT opened it in November 2022, and let the whirlwind rip.
As in the fable of Pandora, one of the most enduring of the ancient Greek allegories, once the box was opened, despite all efforts, there was no stuffing the evils back in the box. Luckily, Pandora had also been created with beauty, intelligence, and tellingly, curiosity, which led to her opening the box.
This is as it is with AI.
There is the evil we all see, centred on the rapid destruction of the status quo in all corners of our commercial, private, and public lives. The beauty may be harder to see in the short term, but will become obvious in the longer term, after all, the last thing to escape Pandora’s box was ‘hope’.
If nothing else, it will be exciting, and for some, the source of significant new leverage that can lead anywhere.
Header credit: Dall-E with the instruction: ‘Create a painting of Pandora opening the box allowing the evils to escape, in the style of the ancient Greeks’
May 15, 2023 | Governance, Strategy
‘Occam’s Razor’ is the idea that as you progressively eliminate possibilities, what you have left must be the truth, no matter how unlikely it may seem. Some might call it ‘first principles’.
While Occam’s Razor goes back to William of Occam, the 14th century philosopher, there is a recent iteration.
Occam’s broom.
A molecular biologist by the name of Sidney Brenner introduced that addition to describe the brushing of inconvenient truths under the carpet.
Last Thursday night at a ‘workshop’ hosted by a voluntary group, ‘Re-Invent Australia‘ both were on display.
The strategic objective of Re-Invent Australia might be summarised in the words of the great Peter Drucker: “Ideas are cheap and abundant, what is of value is the effective placement of those ideas into situations that develop into action.”
The task set was to identify the major causes of failure of Australian political governance under the headline five general areas nominated from a wide field by the committee: Education, health, innovation, diversity, and aged care, which need immediate attention.
The second, and to my mind even more important part of the exercise is the question: ‘How would we change them’?
The eternal strategic ‘What and How’ questions.
The objective was not to host another gabfest, but to motivate action that might generate results from which we could all learn.
We have just seen a federal budget. ‘Back in the black’ briefly, for the first time since 2007. If ever there was a time for a federal government to seriously address some of the big and growing structural inequities in the economy, it is now. This is where Occam’s broom came in for some extensive use.
First term government, first (sort of) budget, an opposition in total disarray and incapable of tying its own shoes, and it goes soft on anything that might prove combative with vested interests.
In short, they squibbed it based on the expected noisy backlash, rather than taking the once in a generation opportunity to address those structural challenges we all see.
The agreement of the fossil fuel industry to the barely apparent uptick in the PRRT shows how much harder the government could have gone, minimal changes to a taxation system no longer fit for purpose, the ‘palm-off’ of any discussion about the scheduled income tax cuts, or little genuine analysis of the long term causes of the housing shortage with concrete actions and timetables, and so on.
Vanilla.
The politically difficult reality is that if we want to change the infrastructure of the economy to better reflect the country we want to live in, and the world we wish to be a part of, we will need to take some challenging decisions. Many of these will prove to be unpopular with varying noisy and often cashed up segments of the economy, who will not stop at anything to protect their immediate narrow interests.
We cannot afford any longer to exercise Occam’s broom and sweep them under the carpet.
That is what government should be for, exposing and acting on the failures of the market, to shape the future of the country our children and grandchildren will inherit, not guarantee yourself access to commonwealth cars for the next 3 years.
May 3, 2023 | Marketing, Strategy
Every person on the planet has a frame through which they view the world, built on their life experience, education, background and interests. Unconsciously we all bring these biases into the process of planning our businesses.
If you ask an accountant how to best address the climate crisis, they will give you a response that has an accounting and numeric base, ask the same question of an ecologist, economist, entomologist, or marketer, and you will get different answers, informed by their own unconscious biases.
So, how do we filter them out of our planning, which almost all of the time focusses on the opportunity, the impact of our innovation?
Business planning while having a place for risk assessment, always in my experience lends it far less weight than the opportunity.
In order to ‘de-bias the plan, ask yourself three questions, the first of which is strategist Roger Martin’s claimed most important question:
- What would have to be true? This forces you to consider the drivers of success in the situation being addressed in the plan.
- What future event could sink the plan?
- What would help us if the plan does sink: i.e., what is plan B that avoids commercial demolition?
Anticipating competitive action and planning to accommodate the impact is a necessary part of every plan. This is perhaps the most common failure amongst marketing plans I have seen, including my own.
A long time ago I was with Cerebos, one of the brands I managed was Cerola muesli, at that time a successful brand, and I was keen to expand the brand footprint. I saw a gap in the market between muesli and corn flakes. This was 40 years ago, and there was not the wide choice we have now. We developed a halfway product we called ‘Cerola Light and Crunchy.’ I wrote a marketing plan that had as its first step a test market in Adelaide.
In that plan, well thought out and detailed as it was, I failed to sufficiently consider any of the three questions.
At first, we did remarkably well. The logic we employed was well accepted, the retailer sell-in easily achieved targets, and consumer off-take was strong after the initial burst of advertising. Then in came Kellogg’s with a look-a-like product, ‘Just Right,’ and their resources just blew us away. Light &Crunchy never had a chance in the face of the weight of the competitive reaction by Kellogg’s, and we retreated, recognising the reality that we simply did not have what it took to poke a bear and expect to get away unscathed.
I never made that mistake again, and the only consolation I have is that ‘Just Right’ has survived and prospered, so at least my marketing logic was sound.
I do not agree with the conclusion in the header cartoon that you should roll over and play dead in the face of bear-like opposition. However, it is true that if you poke a bear, you had better do it in such a way that you have some sort of advantage that they cannot replicate.
Header cartoon credit: Tom Fishburne at marketoonist
May 1, 2023 | Change, Governance, Strategy
Strategy is all about choice: what we will not do is at least as important as what we will do.
When you dig a level deeper into the generic ‘will I or won’t I’, you come to the question of how do you make what are almost always difficult choices between options in the absence of full information.
At a top level, that choice is driven by two factors:
Cost structure.
There is always a cost to delivering product. Understanding the cost drivers associated with your product and business model is essential. You will then be able to make informed choices about how best to minimise those costs without compromising the value you deliver to customers.
Value creation.
Selling a product of any type depends on a buyer seeing the value created by their purchase as being greater than the cost of the purchase. ‘Value’ is a very personal term. The value of an expensive watch is not in the ability of that watch to tell the time, it resides in a range of psychological drivers that drive individual behaviour and choice.
Until recently, most of the costs involved were of a physical nature, now they are increasingly behavioural. Similarly with value creation, in the past it was the utility you got out of a physical purchase, but physical utility has been usurped by digital and emotional utility.
Understanding both is critical to success.
Apr 19, 2023 | Change, Strategy
Many times, I have expressed the view that we train dogs, but we must educate people.
The critical difference is the ability to solve problems from the mundane to gordian complexity, and to plan, turning reactive into proactive. These both require critical thinking and creative skills.
Neither of these are available, yet, and perhaps never will be in an AI chatbot.
Rather than banning the emerging wave of AI tools, we should embrace them.
The challenge is twofold.
Teachers who spend their days in front of students are overworked and underpaid for the long-term value they are being asked to deliver, at least in this country. Asking them to rethink the way they are organising their lesson plans and manage the intellectual development of students is a big ask. Many will not willingly take on the task without help and appropriate training, as they have lives outside their roles as teachers.
Asking the education bureaucracy and academia to change their spots is at least as challenging. Most have built their careers on the perpetuation of the status quo in one way or another.
However, the case for change is compelling.
Rather than focussing outrage on the sudden availability of answers to questions, we should be rethinking the process of asking the questions. Anyway, what is different here to when Google first hit the streets? The easy availability of answers to questions, and essays on everything from an easy recipe to string theory, should force us to consider the ways this technology makes the classroom more interactive. It delivers the opportunity for personalised plans that match each kids abilities, and removes the burden of admin that seems to have built up inexorably.
Many good teachers leave the profession after a few years seeking to make their living in less demanding but more financially rewarding ways. Perhaps this AI revolution is a part solution to that problem?
As a final rock into the pond, if an AI tool makes the production of an answer too easy, requiring little or no student understanding, should we throw out the tool, or revise the question?
What if the assignment was to generate an AI response to the assignment, to which the students annotated their commentary on the relevance, effectiveness, accuracy and utility of the points in the AI generated answer? Teachers would also give marks on the prompts used by the students, another marker to understanding.
That would be education.
AI will, or should be, a boon to educators. They need to think creatively about how it will be used, rather than throwing their hands in the air and banning them.
King Canute found the hands in the air strategy did not work.
Header credit; King Canute fighting chatbots courtesy Dall-E, as envisaged by Sal Dali
