How to Beat Google (Part 1)

by Rich Skrenta

Our entire industry is scared witless by Google’s dominance in search and advertising. Microsoft and Yahoo have been unsuccessful at staunching the bleeding of their search market share. VCs parrot the Google PR FUD machine that you need giant datacenters next to hydroelectric dams to compete. They spout nonsense about how startups should just use Alexa’s crawl and put some ajax on top of it. Ye gods.

Grow a spine people! You have a giant growing market with just one dominant competitor, not even any real #2. You’re going to do clean-tech energy saving software to shut off lightbulbs in high-rises instead? Pfft. Get a stick and try to knock G’s crown off.

So here are my tips to get started. These are all about competing with Google’s search engine. Of course G is big business now and does a lot of different things. Their advertising business is particularly strong, and exhibits some eBay-like network effects that substantially enhance its defensibility. Still, even if you’re going to take that on too, you have to start with a strong base of search driven traffic.

1. A conventional attack against Google’s search product will fail. They are unassailable in their core domain. If you merely duplicate Google’s search engine, you will have nothing. A copy of their product with your brand has no pull against the original product with their brand.

2. Duplicating Google’s engine is uninteresting anyway. The design and approach were begun a decade ago. You can do better now.

3. You need both a great product and a strong new brand. Both are hard problems. The lack of either dooms the effort. “Strong new brand” specifically excludes “search.you.com”. The branding and positioning are half the battle.

4. You need to position your product to sub-segment the market and carve out a new niche. Or better, define an entirely new category. See Ries on how to launch a new brand into a market owned by a competitor. If it can be done in Ketchup or Shampoo, it can be done in search.

5. Forget interface innovation. The editorial value of search is in the index, not the interface. That’s why google’s minimalist interface is so appealing. Interface features only get in the way.

6. Forget about asking users to do anything besides typing two words into a box.

7. Users do not click on clusters, or tags, or categories, or directory tabs, or pulldowns. Ever. Extra work from users is going the wrong way. You want to figure out how the user can do even less work.

8. Your results need to be in a single column. UI successes like Google and blogging have shown that we don’t want multiple columns. Distractions from the middle with junk on the sides corrupt your thinking and drive users away.

9. Your product must look different than Google in some way that is deliberately incompatible with their UI, for two reasons. One, if you look the same as them, consumers can’t tell how you’re different, and then you won’t pull any users over. Two, if your results are shown in the same form as Google’s, they will simply copy whatever innovations you introduce. You need to do something they can’t copy, not because they’re not technically capable of doing so, but because of the constraints of their legacy interface on Google.com.

10. Your core team will be 2-3 people, not 20. You cannot build something new and different with a big team. Big teams are only capable of duplicating existing technology. The sum of 20 sets of vision is mud.

11. Search is more about systems software than algorithms or relevance tricks. That’s why Google has all those OS programmers. You need a strong platform to win, you can’t just cobble it together as you go like other big web apps.

12. Do not fear Google’s vast CapEx. You should wish maintenance of that monster on your worst enemies. Resource constraints are healthy for innovation. You’re building something new and different anyway.

Good is not almost as good as great

By Seth Godin

I went to trade in my car Jay Porter Prius for an updated Prius today. Well, I meant to do that, but I walked out instead.

I arrive at Westchester Toyota and pass two or three salespeople loitering outside. Inside, there were two or three more, sitting in a line of chairs, waiting for the signal from the headmistress at the counter.

My guess is that even for a thriving brand like Toyota, most of these guys weren’t paid so much. They were ‘good’ salespeople, lifers who showed up, did what they were told and closed a sale here and there.

It soon became clear that the salesperson who was assigned to me wasn’t ‘great’. The dealership had messed up: He had no record of my appointment, no file, no history of why I came. But he just punted. He made no effort to engage with me or look me in the eye or empathize with my frustration at the complete waste of time my call yesterday had been. He gave up after about ten seconds, bummed out that he had lost his place in line. So I left.

Driving home, I started to think about the discontinuity in the graph of salespeople. Discontinuities are interesting, because that’s where you can see how a system works. In this case, it’s obvious that a great salesperson is going to sell far, far more than a good one. Nine women working together can’t have a baby in one month, and ten good salespeople still aren’t going to close the account that a great one could. That’s because it’s not a linear scale. The great ones reach out. They work the phones when they’re not first in line. They understand what a customer wants. They’re not just better than good. They’re playing a totally different game.

My best advice: Fire half your salesforce. Then, give the remainder, the top people, a big raise, and use the money left over to steal the best salespeole you can find from other industries or even from your competition. You’ll end up with fewer salespeople. But all of them will be great.

And the good guys? Have them go work for the competition.

The realistic entrepreneur’s guide to venture capital

By Seth Godin

Optimism is a key to success, but it doesn’t necessarily work so well when it comes to VC. Because this is a cottage industry with thousands of players, all with different objectives, it’s very easy to keep knocking on doors, just waiting to find the right match. It’s also easy to spend a year or more adjusting your business to what each VC asks for (“bring me the broomstick of the wicked witch!” while you could have been out there building a real organization.)

Here are a bunch of conditions that you ought to take seriously before you invest the time and the energy to track down outside money for your great idea:

1. Investors like to invest in categories they’ve already invested in. If your business is so new that it’s never been tested before, or is in a category VCs hate, think twice.
2. Investors want you to sell out. As soon as possible. For as much as possible. They have no desire to own part of your company forever.
3. Investors want to invest in a project that’s tested. If you can’t make it work in the ’small’, why do you think it’ll work when it’s big?
4. Being a little better than the market leader is worthless.
5. Investors don’t want you to use their money to cover your losses. They want you to build an asset (a patent, an audience, channel relationships) that’s actually worth something.
6. Investors want someone to run your company who has successfully run a company before.
7. Investors want to be able to come to one of your board meetings and still make it home in time for dinner.
8. VCs like curves more than they like cliffs.
9. There are actually very very few business problems that can be solved with money.
10. You will probably have to replace many of your employees if you raise money from someone.
11. VCs understand that being the best in the world (#1) is the place with the biggest rewards, so it’s unlikely they will settle for any performance (even a profitable one) that puts you in second or third place.
12. VCs are very smart and very connected, but they’re smart enough to know that their connections and their insights can’t fix a broken business.
13. Investors are very focused on the company, not you. They’re not interested in having you take out your original investment or paying you a large salary as profits go up.
14. Business plans are bogus. The act of writing one is critical, but no one is going to read more than three pages of what you write before they make a decision.
15. The companies that VCs most want to invest in are the companies that don’t need their investment to survive.

The 10 New Rules of Branding

By Derrick Daye on Walmart

1) Brands that influence culture sell more; culture is the new catalyst for growth.
Look at Google. They are changing the way we behave online. Nike is a brand that has become a part of all culture. If you get into that split screen, you become part of the lexicon of life.

2) A brand with no point of view has no point; full-flavor branding is in, vanilla is out.
Love or hate Fox News, you know where it stands on issues. And Ben & Jerry’s is more than just ice cream; it’s a company that stands for a cause. Younger consumers have grown up in a consumer world. They’re flexing their muscle, and they want their brands to stand for something.

3) Today’s consumer is leading from the front; this is the smartest generation to have ever walked the planet.
Today’s consumers are more discriminating and more experimental. They have very strong opinions on brands, and a lot of brands are getting consumers involved. Take Converse and the Converse Gallery, where consumers can make a 24-second film that will run on their site. It’s consumer-generated creativity and a natural savviness.

4) Customize wherever and whenever you can; customization is tomorrow’s killer whale.
The second advent of the Internet has consumers wanting something all their own. Consumers say, ‘I need something that is mine, not mass-produced for everybody.’ The best example is Apple’s iTunes Website. Instead of buying a CD, consumers are buying the tracks they want and putting them on their iPods. Look at Starbucks, which creates whatever beverage a consumer wants, and Nike, which allows you to design a shoe online.

5) Forget the transaction, just give me an experience; the mandate is simple: Wow them every day, every way.
Apple and Coach found that the best way to give consumers a brand experience wasn’t just to sell product in store but to control the entire experience. This is why they build stores in major cities. Looking for the other brands to soon be involved in the ‘experience.’

6) Deliver clarity at point of purchase; be obsessive about presentation.
There’s an “option overload” in the supermarket aisles, and anything that simplifies that for consumers is welcome. If I’m a consumer and I stand in front of a shelf, I see a wall of product. Brands are beginning to recognize that you have to be clear about what they are selling at the point of purchase.

7) You are only as good as your weakest link; do you know where you’re vulnerable?
Today’s younger consumers show zero tolerance when a brand makes a mistake. If a Website isn’t good enough, they will ignore your brand, and if you get negative PR about something, it will stick no matter what you do to rectify it. Brands like Wal-Mart and Nike are still connected to negative PR about alleged abuse of foreign workers.

Social responsibility is no longer an option; what’s your cause, what’s your contribution?
Consumers now expect corporations to get involved in cause marketing. Businesses are doing a better job at getting behind causes, for example, Timberland (“Take a stand against genocide”), Target (“Every day Target gives back to the community”), eBay (its Giving Works program, for starters), and GE (which this year launched its Citizenship Report, an annual report of sorts regarding the company’s environmental and safety initiatives). Not all businesses promote these efforts, however, because they’re worried their efforts will be seen as commercial.

9) Pulse, pace, and passion really make a difference; had your heartbeat checked recently?
We’re in a crazy world. We keep piling more devices upon us. The more you have, the more you need. If your business does not have a high metabolic rate, you’re not going to survive. Companies like Google move fast, and that means the older, slower companies are doomed.

10) Innovation is the new boardroom favorite.
Brands are inspired by Apple more than anyone else. They transformed the music business, and people are taking what they did seriously. Procter & Gamble and GE are driving this and have made innovation the core of their corporate strategy.

Top 10 Reasons Strategic Planning Meetings Fail – From Your Strategic Thinking Business Coach

by Glenn Ebersole

Strategic planning is an awesome and powerful process that sometimes gets a bad rap because of some bad experiences people have had when engaging in some form of strategic planning meetings. Many times the combination of personal agendas, absence of open minds, and preconceived judgments about the strategic planning process can turn strategic planning meetings into real disasters. And frankly, there are many reasons why so many strategic planning meetings are unsuccessful. Your Strategic Thinking Business Coach has developed a list of the top 10 reasons why strategic planning meetings fail. And the Top Ten Reasons are:

# 1. Restricting strategic planning to once a year at some annual event. Strategic planning must become a habit to enhance the performance of your company or organization.

#2. Failing to conduct research or “to do your homework” prior to strategic planning meetings. For strategic planning meetings to be effective, the attendees must have information to make sound strategic decisions.

#3. Developing such an overly ambitious agenda with insufficient time to complete. This will cause frustration among the attendees and may also cause mental fatigue and loss of interest.

#4. Inviting too many people to your strategic planning meeting. If there are too many people, there is a possibility of confusion.

# 5. Assuming that everyone at your strategic planning meeting thinks like the leader of the meeting. A good leader will know that this is not true and will not structure the meeting to their preferences.

#6. Failing to use an effective professional facilitator. The absence of an effective facilitator is an invitation to a dysfunctional or failed meeting.

#7. Having too tight a structure for the strategic planning meeting. It is essential to build in some fun, games and breaks.

#8. Failing to identify and address issues before moving on and/or before the meeting itself. A good leader will make sure issues are cleaned up so they do not negatively impact the strategic planning meeting.

# 9. Ending your meeting without a commitment from the attendees about the new strategic direction. And also failing to end the meeting on a very positive note.

#10. Totally ignoring needed follow-up after the meeting. A fatal mistake is underestimating the amount of effort it takes to execute the developed strategic plan.

I trust that I have provided some insightful information about the reasons strategic planning meetings fail. If you would like to learn how to ensure that your strategic planning meetings and related efforts will not fail, and how strategic planning can benefit you and your business or organization, please contact Glenn Ebersole today through his website at www.businesscoach4u.com or by email at jgecoach@aol.com

Glenn Ebersole, Jr. is a multi-faceted professional, who is recognized as a visionary, guide and facilitator in the fields of business coaching, marketing, public relations, management, strategic planning and engineering. Glenn is the Founder and Chief Executive of two Lancaster, PA based consulting practices: The Renaissance Group, a creative marketing, public relations, strategic planning and business development consulting firm and J. G. Ebersole Associates, an independent professional engineering, marketing, and management consulting firm. He is a Certified Facilitator and serves as a business coach and a strategic planning facilitator and consultant to a diverse list of clients. Glenn is also the author of a monthly newsletter, “Glenn’s Guiding Lines – Thoughts From Your Strategic Thinking Business Coach” and has published more than 225 articles on business.

To find out more about the benefits & rewards of effectively working with a strategic thinking business coach, please contact Glenn Ebersole through his web site at http://www.businesscoach4u.com or jgecoach@aol.com

Science Daily Week: Which is more effective: bonuses or raises?

By GuyKawasaki

I recently learned about Science Daily. It is a treasure chest of interesting studies that has implications on business practices. I’ve collected so much material from it that this is going to be “Science Daily Week” in my blog.

For example, have you ever wondered whether giving employees a pay-for-performance bonus or a merit raise fosters greater productivity? According to this “Bonuses Boost Performance 10 Times More Than Merit Raises” in Science Daily which pointed to a Cornell study called “Using Your Pay System to Improve Employees’ Performance: How You Pay Makes a Difference” by Dr. Michael C. Sturman, a bonus yields far better results.

Obviously, compensation is more complex than this, but it’s interesting that the study found a ten to one advantage for bonuses.

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PS: While poking around the Cornell site, speaking of bonuses, I also found this very interesting study: “Sweetening the Till: The Use of Candy to Increase Restaurant Tipping.” It says that tips go up from 15.1% to 17.8% when a restaurant gives candy.

What Do I Get?

By Seth Godin

Most marketing (and most business) is usually like this:

Do this and get that.

Figure out what you want, figure out what you need to do to get it, and go do it.

I was thinking about the way my Dad does business the other day. He’s been a successful executive (and then entrepreneur) for more than 50 years. I realized that I can’t remember one time when he did this to get that.

When he volunteered to run the United Way or the local theatre, or when he helped a local church raise money for a new building, he didn’t have an ulterior motive. When he negotiated with the UAW to create a different sort of workforce structure for his plant, it wasn’t so he could get more. It was so they could get more. Same thing when he helped dozens of people emigrate from the Soviet Union a few decades ago.

It’s been a consistent approach, and it sure seems to work. Consistent as in all the time, not just when it’s convenient. It works for a factory in Buffalo but it also seems to work for others… for successful marketers all over the world. Now, more than ever, it’s easier to give even when it seems like you’re not going to get. The happy irony is that this turns out to be a very effective marketing approach, even though that’s not the point.

Stay Out of the Bad Part of Town

by John Jantsch (Duct Tape Marketing)

Did your parents ever warn you about “the bad part of town?” Well, the web has those places too. A lot of people understand that links back to a web site can help a web site get better rankings in the search engines.

Problem is, blindly seeking any kind of link may do more harm than good. There are folks out there that will try to lead you to believe that any link, and lots of them, is all that matters. The more the better, the less work to get them, even better. Please don’t fall prey to this kind of thinking.

The search engines want to find high quality content and deliver it to people who are searching. Any practice that is set-up to trick them into ranking a site higher will eventually lead to penalties or even banishment from the index all together. Building relevant, high-quality, hand-crafted links is work, but its rewards make it worth it.

There are some powerful tools that can help you find good potential links and practices that will eventually allow you to build great links back to your site, but don’t try to short circuit the process with some automated link generating software tool sold by the “Internet Marketing” gurus who don’t have to live with the impact on your site.

Stay out of these parts of the web world -
• FFA sites that let you create some sort of free ad in exchange for who knows what
• Link Farms that allow you to create a links in exchange for links
• Link rink schemes that aim to hook a bunch of sites together
• Some directories that exist only for link purposes
• Automatic link swapping software programs

Incoming links will help your site a lot more if they appear to happen naturally, come from other quality content sites and are relevant to your site’s primary topic. One of the best ways to get some incoming links fast is to submit well-written articles to high quality article directories. (If you have content relevant to small business, you can add your articles to the Duct Tape Marketing article directory for starters.)