Last Friday I attended another NWEN breakfast. As usual, there were three speakers from local companies, including two 5-minute presentations and one main speaker. I enjoyed their stories and have been thinking about their comments.
Venture Breakfast - July 2006
Topic: Building a Lean, Clean, Web 2.0 News Machine
when you have a hammer, everything is a nail
It appears that the majority of companies are started by engineers, by the people who build the product, whatever that is. This weeks' batch included a company that does "efficient high speed networking for video", a company that makes flashcard system for cell phones (remember all those 3x5 card flashcards you made as a kid?), and the main speaker was a company that provides a web-based news service, ie an electronic newspaper.
The common denominator for these companies is that they were focused on the product and not on marketing or branding. It appeared that none of them even had a marketing person to focus on it.
One of my take-aways from business school is that you need a decent product to have a business but without marketing your business wont last. The danger of engineering-led companies is that they end up with a great product and a failed company. A great recent example of this is the Apple iPod vs Creative, who's CEO is famous for saying that he didnt have time to waste on marketing.
The main speaker was Mike Davidson from Newsvine.
I have briefly looked at Newsvine and it seems like a neat service. Their main value proposition was that they provide the same service as ESPN/ABC does (they were former employees) but they can do it with 6 people instead of 200+. In other words, their angle is lower cost.
But their marketing problems began with the speech. As Davidson spoke, I had no idea who he was or what company the guy was from. The slides didnt clearly show the company name and neither did he. This was a failed opportunity to spread the brand and indicative of their larger brand issues.
During his speech, the CEO commented that they were surprised how hard it was to get people to leave the ESPN/ABC websites even through the same information was found on Newswire. Uhh, ya! That is because ABC and ESPN have a HUGE brand, one that gets free advertising just by existing as TV channels. Who the heck has heard of Newswire?
Low-cost isnt going to get people to seek our your company and switch, especially when both services are free to the end-user. To get people to switch you need a REALLY compelling service and you need to get the word our so that people even know you exist. These are marketing issues not engineering ones and they apply to a whole host of companies.
These are fundamental brand issues that any marketing person could have pointed out immediately. A lesson that seems to escape many (most?) engineers because it is not the kind of problem they focus on or understand.
the value of an MBA
This issue jibes with a conversation that I had with a friend about the value of an MBA. His argument was that he didnt need to spend the money for school because he could read a few books and learn on the job.
This is an appealing idea that seems to have some logic behind it. But when I see so many companies make basic mistakes, like branding, it seems to be evidence that one doesn't really learn that much on the job.
By and large, employers pay you to get better at what you know already. They dont pay you to learn what you dont know. School is where you are exposed to what you dont know (and didnt know that you didnt know :).
One of the real values of business school is that you get exposed to many facets of a business at the same time. Marketing, Finance, Accounting, Operations, HR. All of these functions have a different viewpoint and a different way to see a "business". Very few people have a job that gives them real exposure to all of these groups as most people spend all of their time in one functional area.
You may not perform all of these functions yourself but the is a lot of power in a) being aware of what they do, b) understanding their value, and c) being able to hire smart people to do that work.
This silo of information is why so many engineers think the way to make a successful company is through engineering and why they totally ignore or discount the value of marketing or finance or HR. This "hammer and nail" situation is also why most of those companies fail. (The lucky ones that succeed either have an exceptional leader or are taken over by more experienced business people).
Uhhhh, perhaps that's because the presentation wasn't *about* marketing the company. I don't appreciate when I'm at a conference to learn and someone gets on stage and pitches their company so I try to exercise the same principles when I'm on stage. NWEN called me in to discuss the ins and outs of building a lean media company... not to convince everyone in the room they should use Newsvine to get their news.
No company name or logo on the slides? That's because I don't use slides.
As for brand building, I think we're doing just fine at that actually. A half million uniques per month with no advertising, marketing, or PR is pretty good in my book.