Five months ago, I built a social network on Ning. No ads, all free. I briefly opened it to the readers of this blog as a place to talk about leadership and connection. A few thousand people bought my book and signed up. Since then, there have been hundreds of thousands of posts and connections and stories. The plan was to run it as a closed community and then open it once we laid a foundation of connections and content.
Well, the group that orginally homesteaded the site has agitated to keep it as a closed community. I can't disagree. In fact, the password-protected, non-anonymous nature of this community makes it work. People hesitate to spam or troll because they know they'll get kicked out and won't be able to return. They talk to one another with respect because it's really them, and they're really there.
I've decided to let a few more people join in order to keep things fresh and growing. The only requirements:
1. To be fair, you need to have purchased at least one copy of Tribes, just like everyone else there.
and
2. It's a promotion-free zone. If you attempt to sell things or sites or anything, we'll ask you to leave.
[NOW CLOSED AGAIN! I got a huge response, there are some amazing people, and I'm closing the group again for a few months to let the tribe coalesce again. I apologize if you missed the window]. I'm only going to keep it open for a day or so. If you don't get an invitation from me, it's because Ning's invites often end up in spam filters. I'm sorry, but there's no way I can manually resend it, so watch carefully. (PS Robin Sharma has a similar, open network as well.)
March 23, 2009
The failed bankers on Wall Street have been whining that if they have to cut bonuses and salaries dramatically, they'll be unable to recruit great talent, and they need great talent to fix the situation.
And for years, boards have been claiming that they need to pay CEOs $50,000,000 salaries in order to recruit the very best for their companies.
Jamie Dimon at Chase said, "It's possible someone's going to walk in my office and say, Jamie, I have a family. I can't afford to live that way."
This, of course, is nonsense.
After a million dollars or so in salary, the absolute amount that a person is paid has no real impact on their life. They can't eat more meals in a day or wear more shoes. What matters to the manager is the relative amount. How much more would I make over there? Why does that company pay its CEO more than my company pays me?
(Aside: should the guys who drive an armored car that carries millions of dollars in bonds get paid more than the guys that drive an armored car that only carries thousands of dollars in cash? Does the amount of money handled change the difficult of the work?)
Twenty years ago, financial industry salaries were a tiny fraction of what they are today. Did lesser people do the work? Did they try less hard? Think smaller thoughts? Of course not. The reasons salaries are high is that the number is a signaling mechanism, a very expensive marketing campaign.
Law firms went through this cycle twenty years ago. The top firms competed with each other to recruit a too-small pool of talent from the top law schools. Unable to muster up even a mite of marketing insight, they chose to compete on only one axis: salary. So, 24 year olds were given jobs at $120,000 a year, when their peers from college were making 20% of that. The firms could have found great people at half the price, except that with only one axis, they had to be at the top if their peers were.
If you were a law student, the choice was easy. Either you got a job at a firm that proved its worth by paying a lot or you didn't. You didn't have to know anything about the firm, apparently, other than the fact that they were top tier, and the way you knew that was because they paid a lot.
Hence the current situation with CEOs and bankers. There's no real effort made to market the jobs, just to race to the top (or the bottom, depending on your point of view) with the easiest marketing signal of all. Price. Yes, it's exactly the same as a retailer trying to improve business by being the cheapest.
In addition to this being a huge (!) waste of money, it's also provably false as an accurate portrayal of what's necessary to recruit. For every great job at Goldman Sachs, there are still 1,000 totally qualified applicants waiting for that job. So, when demand is high and supply is low, the power goes to the supplier. Lower the salary until you get just a few qualified applicants, right?
This moment in our economic cycle is a great opportunity for shareholders and taxpayers to let the organizations we own and support know that wasting money on this sort of marketing is silly. Just as an industry-wide gas standard would have actually helped Detroit twenty years ago, an industry-wide tax and trade salary cap will actually help these organizations. They'll be forced to recruit with useful marketing techniques (I'd rather work at an innovative, fast-moving, respectful company, given the choice…so the companies would have to make a better 'product,' not just pay a lot as a result of financial engineering).
[I think performance pay is great, risk should be rewarded and stock options are just fine. I also think it's fine for risk-takers and skilled pros to make a ton of money. I'm mostly talking about guaranteed bonuses which aren't bonuses at all, just a bribe to sign on and stay on.]
Sometimes markets get stuck because there is a disconnect between what something costs and what you get. It costs the individuals on the board of a public company nothing to pay more, they get bragging rights and a CEO who is focused on money. And that works until the next board leapfrogs them. The boards themselves should be lobbying to end this practice, but they won't because… guess what… the folks on the boards are the CEOs of other companies. It's stuck.
If you are a relentless free market believer, more power to you. If your company is private, pay yourself a trillion dollars a year, fine with me. In fact, we need more private companies that innovate and pay their staff a ton. But if you're owned by shareholders or bailed out by taxpayers, wasting trillions of dollars because you don't have the guts to market your jobs properly is silly.
In business to business sales, you will encounter three kinds of people:
- The vast majority, empowered to stall, to ask for more information, to delay, to send you after the broomstick of the wicked witch of the west.
- A smaller population that can stall but also have the authority to say no.
- A tiny portion of your meetings will be with people authorized to say yes (and some of these people are foolish enough to do the other two tasks, just for kicks).
You have no chance (zero) of moving someone from one category to another. The reason this system evolved is straightforward: the yes people are rare in a typical organization, because they have responsibility and power. So they are busy and need to be protected. The no people are easy to train at saying no, and they're waiting to be promoted to yes people. And the stallers? They represent the dip, the barrier salespeople have to get through to show that they are serious.
This is true for all business to business selling, but I think it's worthwhile to consider ad sales.
In today's long tail new media world, I think that marketers that rely on this system are failing. When there were only a few media options worth considering when placing an ad, the stalling, no-ing and eventually yes-please system didn't hurt them much. NBC had the wherewithal to get through the system. Yahoo and AOL organized to get through it as well. A marketer could just arrogantly wait for the best salespeople and buy ads from them and succeed.
Now, though, there are thousands of sites that could offer your organization targeted, efficient media that would pay off handsomely at the price you are willing to buy it.
Look at it from the blogger's point of view: If you're a blogger, would you sell a monthly sponsorship on your blog for $2,000? $20,000? Probably, and it would be a bargain for both sides. But you don't even try, because the overhead is huge.The cost of selling that sponsorship is more than you'd earn.
So, Visa, a stalling marketer, spent a million or more dollars on a very expensive, complex and largely ineffective online promotion last month–not because it was likely to work, but because it was well sold by persistent and effective salespeople. They should have sponsored your blog and 400 others instead.
The opportunity for marketers in search of media is not to play defense, to stall people with clever ideas or small platforms, but instead to stop stalling and start looking. The bargains are there, just waiting.
March 22, 2009
Every organization worth its salt has at least one guy like this. Someone who knows every technical detail, or has vast expertise in the parliamentary procedure. Perhaps he's the coot who knows every verse of the Bible or is the only one with a Master's license. Maybe he's the guy (the only guy) who can fix that big machine.
And he's a jerk.
He's the first one to point out a minor technical glitch and the last guy to want to get on board with a new program. He hazes first-timers and avoids the people who are actually productive. Or he's the one who can take any metaphor and make it literal, instantly, poking holes in it as he goes.
And of course, he's the one everyone has to tiptoe around, because they know his technical status can sink their initiative.
I think you should fire this person immediately. Okay, maybe give him exactly one warning.
You'll find someone else who really knows this stuff. No doubt about it. And firing one intransigent bully is a lot less painful than shutting down an entire division next year because he paralyzed your decision-making.
Deep technical competency is overrated compared with the ability to make excellent decisions and to create a culture where forward motion is valued and personal initiative is rewarded.
The good news is that the bully knows this, and the only reason he gets away with being a bully is that he thinks he's got you bluffed. Call his bluff and odds are you'll have a much more cooperative team, top to bottom.
March 21, 2009
You won't have any trouble at all finding someone who can tell you how to fit in.
They can tell you what to wear to that restaurant or this conference or that funeral. It's not that difficult to figure out how to fit in. If fitting in is your goal, you should be sure to get great advice on how to do that.
Standing out, of course, is trickier. Stand out too much and you're a jerk or a fool.
Clothing is not the point. You have this choice to make in everything you do, from your career to the words you use in a sales letter.
The point: choose.
Are you doing this to fit in or stand out?
March 20, 2009
A friend asked me to help him think about how to split the equity in a company he was starting. His colleague is contributing office space and some key technology. My friend is responsible for where the business goes from here. I told him this:
If you apportion equity, you will certainly do it wrong.
That's because it's based on a snapshot, a moment in time.
Sure, today, your partner's share is worth 50% and yours is worth 50%. His because of what he did, yours because of what you're going to do.
But a year from now, that number can't possibly be right. You may have acquired six more pieces of software, raised millions, traveled the world, closed sales and sold the company. Wow. Or, you may have done absolutely nothing.
So, my best advice is to say, "Today, right now, your contribution is worth 5% of the company and my creation of the company is worth 5%. The other 90% is based on what each of us does over the next 18 months. Here's a list of what has to get done, and what we agree it's worth…"
And then make a list. Stuff like commenting and updating and supporting the code. Stuff like closing sales and hiring people and raising money…
Of course, you leave an out for unforeseen events and dilution based on bringing in new partners.
You may end up having small disagreements about how to interpret the list, but this sort of advance flexibility is well worth the awkward conversation it takes to get it started. Another tip: put in a clause appointing a trusted third party as an arbitrator, so small disagreements don't snowball into litigation.
March 19, 2009
Marketers are good at looking ahead. We predict/create the future, working to build an idea or a product into something that will matter more tomorrow than it does today.
The focus on the future, though, encourages us to take our attention away from what has worked in the past. The next time someone tells you that they've seen a UFO, ask them about this article. A look at a hundred years of UFOs and bigfoots and other things that were certain to change everything shows that they never have. Don't even get me started with the history of astrology.
My question to marketers with a huge idea, something that will change everything, is, "tell me about how someone has done this before." Of course there are first-time-ever groundbreaking exceptions that change the rules forever. But my guess is that you'd rather have a launch or a concept that can follow in the conceptual footsteps of what came before.
Every two years, teenage girls fall in love with an irresistible fashion fad. If you develop the next one, you can look at the last six for clues about how it works.
Every once in a while, a new technology is introduced online and it becomes the must-have, must-be-talked-about breakthrough. If you've got one of those, it would be useful to look at what made the last five work.
Every two weeks, there's a surprise bestseller in the bookstore. Surely we can learn from that process.
But, if all you've got is a lot of confidence and nothing to point to in the past, forgive me for being a bit skeptical. Hopeful, sure, but skeptical.
March 18, 2009
Travel agents… gone.
Stock brokers… gone.
Real estate brokers… in trouble. Photographer's agents, too.
Literary agents?
The problem with being a helpful, efficient but largely anonymous middleman is pretty obvious. Someone can come along who is cheaper, faster and more efficient. And that someone might be the customer aided by a computer.
The airlines don't want to pay travel agents, because the travel agents were making more money on each flight than they were. Some house sellers hesitate to pay real estate brokers because they don't believe the 6% payment is an opportunity, they see it as a tax. Investors abandoned full service stock brokers because trading stocks directly is faster and more accurate than using the phone.
Middlemen add value when they bring taste or judgment or trust to bear on a transaction that isn't transparent. Literary agents are crucial when publishers believe that their choice of content is essential but have too many choices and too little time. But publishers don't trust every literary agent. They trust agents they believe in. Key point: anonymous agents are interchangeable and virtually worthless. Agents that don't do anything but help one side find the other side in a human approximation of Google aren't so helpful any more.
Think about how anonymous the typical real estate broker is. He will sell almost any house or represent almost any buyer. When selling a house, he has a fiduciary responsibility to represent that house to the best of his ability. Just like every other broker. The great real estate brokers do far more than this.
Travel agents still survive, but in a very different way than they used to. Now, the best ones are paid by the traveler, not the airline. The best ones provide a differentiated service that is worth paying for. Instead of being middlemen, then, they are the front men, the attraction, a key asset to the traveler.
To thrive in a world of self-service, agents have to hyperspecialize, have to stand for something, have to have the guts to say no far more than they say yes. No, you can't publish this book. No I won't represent you. No, don't take that flight. No, I won't sell this house, it's overpriced, list it yourself.
The second thing agents must do to make a smart transition is to consider who they are selling to. Should talent agents only sell to Hollywood? Literary agents only to book publishers? Should ad agencies specialize in Google Adwords, not just Super Bowl spots? When markets change, agents can lead the way, not follow along grudgingly.
March 17, 2009
The internet loves parallel projects.
Linux development is parallel. Thousands of people can work on it at once, none of them waiting in line. Wikipedia is parallel, because a large group can go at millions of articles, side by side. The YouTube Orchestra auditions were parallel too, because you didn't have to wait in line to practice or apply.
Parallel is faster and more efficient. The Huffington Post will always outperform a traditional news site because they have 3,000 contributors, not a few dozen.
If you want to make a buffet go faster, all you need to do is move the serving table away from the wall and let people serve themselves from either side. If you want to go faster still, use two tables.
Self-service customer support outperforms the traditional model because people don't have to wait in line.
Your organization probably isn't parallel. There are bottlenecks throughout, and finding them and making them parallel could change everything.
There's one place you don't want to be parallel, at least at first: sales.
When you are linear in your sales process, you learn something. You don't make the same mistake on each and every call. Instead, you make a few mistakes on your first call, then a few less and then, finally, you get it as right as you're going to get it. That is when you go parallel, not before.
March 16, 2009
When I was a kid, I loved the Legion of Super Heroes and the Justice League of America. These were comics for slumming comic book writers, fun and sort of stupid stories where a whole bunch of superheroes would get together, hang out in the clubhouse and then work together to destroy some sort of monster that any individual superhero could never have bested.
Anyway, near the beginning of most of these comics was a scene where a stranger would meet the team. Inevitably, the heroes would introduce themselves. Of course, Batman or Superman wouldn't need an introduction, but the lesser (lower rent) heroes had to speak up and describe their super power.
"I'm the Wasp. I have the ability to shrink to a height of several centimeters, fly by
means of insectoid wings and fire
energy blasts."
Some fancy marketers might call this a positioning statement or a unique selling proposition. Of course, it's not that. It's just her super power.
When you meet someone, you need to have a super power. If you don't, you're just another handshake. Don't say, "Hi, I'm Don, I'm from Cleveland." Instead, try, "Hi, I'm Don, I tell stories that spread." It's not about touting yourself or coming on too strong. It's about making the introduction meaningful. If I don't know your superpower, then I don't know how you can help me (or I can help you).
I was sitting next to a guy at a conference a few years ago. When people went around and said who they were and what they did, he said, "I'm Stephen, I'm a judge." He gets points for humility, and not pointing out that he was a Supreme Court Justice was certainly his privilege… sort of like Superman not having to tout his x-ray vision.
The rest of us, though, do everyone a service when we let others know what we do and how it might help.
March 15, 2009
