John Greathouse Hands-on startup advice for emerging entrepreneurs Mon, 14 Nov 2016 21:53:59 +0000 en-US hourly 1 This Startup Airline Lets You Fly Everyday / Any Day – For A Flat Fee Mon, 14 Nov 2016 19:52:51 +0000 As noted in Success, Santa Barbara Style, my definition of success includes living where you want to live and making money doing what you love. […]

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Jeff Potter Surf Air 9_16

As noted in Success, Santa Barbara Style, my definition of success includes living where you want to live and making money doing what you love. For many entrepreneurs in Santa Barbara, achieving such success would be much more difficult if it weren’t for the emergence of an innovative airline – Surf Air.

Surf Air flies to 12 locations within California and members can fly as often as they like, paying a flat membership fee. I initially hesitated because I wanted to travel less, not more, and I was concerned that if I signed up to an “all you can fly” program, I would feel compelled to travel more in order to justify the fixed cost.

What I quickly realized was that by eliminating the ticketing, boarding and TSA lines, I easily cut off hours on each trip. Thus, even though I now travel slightly more than I did previously, the time and hassles involved have diminished significantly.

Driven by my geeky desire to understand innovative business models, I reached out to Surf Air CEO, Jeff Potter, to learn more about his airline’s atypical business model.

John Greathouse: Hello Jeff. Thanks for taking the time to chat. I’d like to start by hearing Surf Air’s origin story. I realize you joined the company after it was up and running, but how did it get its start?

Jeff Potter: Thanks John. I appreciate you reaching out. Surf Air actually started as an approach aimed to offer an alternative to the traditional commercial model, which has deteriorate the airline travel experience. With the customer experience in mind, a new kind of subscription-based travel company was created in hopes of giving people – primarily business travelers – back time to do what matters to them most. The founders sought a solution for people who value their time and refuse to waste it in a maze of crowds, lines and delays – people who know the commercial flying model is broken.

Staking its claim in 2013, Surf Air became the first all-you-can-fly membership club. The founders selected California as their test ground, entering the market with deep aviation experiences and the same entrepreneurial spirit they expected of their Members. Equipped with a fool-proof business model, aimed at providing an egalitarian approach to travel, Surf Air is redefining the future of flying and living – when the opportunity came up, I was excited to get involved.

Greathouse: Very cool. With many valuable years of aviation industry experience, you seem like an ideal candidate to transition the venture from a Wild West startup to a more process-driven, disciplined company.

Potter: Looking back, I joined Surf Air at a time similar to when I joined Frontier. Back then, it was an incredibly small, one year-old company that ended up growing to reach about 80 destinations throughout the U.S. by the time of my departure.

What excited me about Surf Air was both the business and model – as well as the aviation component, naturally, but what set Surf Air apart for me, was its commitment to its Members. The motto "Other Airlines have passengers, we have Members," truly encapsulates the feel of this company.

With over 3,000 Members, Surf Air has cultivated this feeling of inclusion – which many Members have also noted to be a large part of the company’s appeal. Surf Air’s Members are engaged on a deeper level, not only with the brand but with each other. In fact, many business agreements have been made between Members in-flight. Likewise, several Surf Air Members have served as consultants to the brand, or have become employees.

This is the value which Surf Air has built its brand and foundation on, and what has me, and other Surf Air's executives (as well as investors) excited to continue to build out this rare, breakout startup and expand its footprint – as I helped Frontier expand theirs a time ago.

Greathouse: I can vouch for that Jeff. I’ve established some meaningful relationships in my travels on Surf Air, a couple of which have led to deals for my portfolio companies.

I understand your son also worked for Surf Air and he was your roommate when you are in LA. What’s it like to work with one of your adult children? Anything surprising that you didn’t anticipate when you two joined forces?

Potter: Talk about Surf Air’s commitment to its Members! Yes, it was a great pleasure working with Casey, both personally and professionally. I enjoy spending time with him, but there was a clear separation of our work and personal relationship. There were times when certain elements are confidential, so those were never part of our conversations. At the same time, as a father, I was very proud to watch him and how serious and focused he was in approaching his craft. It is not easy for the “boss’ son” in any company, but he embraced that situation and knew his professionalism and experience would ultimately create his own identity – which he did.

Apart from these memories, I took that rare opportunity to absorb any and all unfiltered feedback Casey would share with me. We used this information to provide a better working environment and experience for our pilots, as we are continuing to grow and bring on more crew members. While I have very much enjoyed our time working together, I also know the importance of family and was more than supportive in his decision to accept a new opportunity in order to be closer to his fiancé in the Midwest.

Greathouse: That’s awesome, good for him. It’s so important for our children to forge their own paths.

I apologize, but I don’t invest in your space and thus I’m pretty ignorant as to your ecosystem. Are there other airlines outside of California that are deploying similar business models? If so, it seems there might eventually be consolidation – either a rollup or a series of acquisitions by a commercial carrier. As an insider, I’m curious to hear your thoughts regarding the industry’s evolution.

Potter: Surf Air is the first all-you-can-fly membership club operating a dedicated fleet of aircraft on scheduled routes – rather than chartering an entire jet or placing people in empty seats on existing private charters.

Since first pioneering this industry, the market for per-seat membership and scheduled charter continues to expand as consumption for this type of alternative travel is on the rise. It is this type of longevity and growth indication that has our staff, as well as investors, confident in not only Surf Air, but the industry as a whole. Surf Air knows frequent travelers want flexibility, convenience and better service, therefore we believe this model will continue to expand and develop along with these needs.

Greathouse: One of the appeals of Surf Air to me, beyond convenience, is the ability to take a guest on a free flight each quarter. My wife and I have visited Napa, Carmel and La Jolla for some wonderful weekend excursions. It makes traveling more palatable when the perks include such adventures. I hear Mammoth may be coming on line in the future. Do you have any other new, fun-oriented destinations in mind?

Potter: We are always looking to expand our efforts into new, and sometimes unchartered, territories. We spend a great deal of time analyzing our consumers and where their greatest needs are. This is why we recently announced our upcoming expansion into Europe. Beginning mid-October, Surf Air routes will include multiple flights between London Luton Airport, Cannes, Geneva and Zurich, on a daily basis with more to come.

Greathouse: Nice, how do I get some guest passes on Surf Air Europe? That would earn me a ton points with my wife. <laughs>

In addition to convenience, Surf Air has allowed me to establish a venture practice in cities outside of Santa Barbara. If I were to fly commercial, I would have to combat traffic, switch flights and pay an absorbent amount of money to fly into the smaller airports closer to these towns. While I have taken ground alternatives in the past, such as trains and cars, spotty wifi and lengthy commute times start to wear. With Surf Air, I have been able to reach my destination quickly and efficiently – and continue to maintain these projects.

Potter: That’s exactly right. As part of our network planning we look at city pairs that draw a large audience of frequent business travelers – areas with conditions that mirror the most successful routes in our California network, including those between the Bay Area, Santa Barbara, and LA Basin. We’ve seen a great deal of opportunity in Europe, where many travelers utilize the same short-haul flight routes frequently and could save valuable time with a unique alternative to commercial air travel – hence our recent service expansion.

Greathouse: There are obviously regulatory issues which make it more complicated for regional airlines to operate across state lines. However, it would be great for the startup world if there were flights between Silicon Valley and other non-Californian entrepreneurial regions, such as Bolder and Austin. Is this a possibility, or are the regulatory issues and/or geographic distances too challenging?

Potter: Though we know that the ideal range of our current fleet of Pilatus PC-12 aircraft includes flights of up to two hours in duration, we are ultimately open to traveling to destinations outside of California and are working to secure the interstate licensing to do so in the near future.

Greathouse: As you noted, relationships get established on Surf Air flights. Santa Barbara is such a contained community that on nearly every flight I know at least half my fellow travelers. You guys have organized several mixers, which is a nice way for members to further cultivate their networks.

Do you have future plans to further leverage the power of the Surf Air membership family? Maybe a retreat in which the members are flown to a central location and participate in a tech oriented conference? Event planning was never my forte, but it seems there are lots of opportunities to facilitate members getting to know each other better.

Potter: Absolutely. As I mentioned before, our Members are our most prized asset – we always want to go above and beyond for them. In addition to our regular mixers and events, we wanted to continue to find a way to redefine the conventional travel service experience as a part of our offerings.

In doing so, we decided to partner with event and lifestyle agency Total Management to afford Surf Air Members with a full and robust travel service offering additional support and benefits for travel needs outside of Surf Air’s already convenient travel routes.

With Surf Air’s recent European expansion in mind, we will be providing full access to Total Management’s Globetrotter Club. Via the Globetrotter Club Surf Air Members will be offered preferential rates and services across accommodation, worldwide events, and flight paths not currently included in the Surf Air network. In addition to the selection of services available, each Surf Air Member will receive a dedicated Globetrotter Account Manager who, having taken the time to understand their personal travel preferences, will offer the most tailored and suitable benefits available. And this is only the beginning. 

Greathouse: As a member, I like the sound of that. OK Jeff, before we wrap up, I want to ask about your referral program. When I headed up marketing for GoToMeeting, we tried a number of “tell a friend” schemes and none of them worked very well. Have you found that offering additional guest flights has proven an effective incentive? What percentage of your new users are driven by existing members’ referrals?

Potter: We began investing more time and effort into our referral process because we realized early on that a substantial percentage—sometimes nearing half—of our new Members were derived from word of mouth and positive referrals. By making the process easier for our Members to refer we’ve had great success in starting conversations with qualified new prospects and welcoming new, likeminded additions to our community.

Greathouse: Great. Thanks again for taking the time Jeff. Hopefully I’ll see you on a future flight.

Potter: Thanks John. Hopefully that next flight will be somewhere in Europe!

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This Startup Hacked LinkedIn To Recruit Customers & Reduce Churn Tue, 20 Sep 2016 12:00:06 +0000 A version of this article previously appeared in Forbes. Businesses typically use LinkedIn to recruit employees. However, savvy startups can leverage LinkedIn to create a […]

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A version of this article previously appeared in Forbes.

Businesses typically use LinkedIn to recruit employees. However, savvy startups can leverage LinkedIn to create a customer acquisition and a churn reduction tool. In particular, one of Rincon Venture Partner’s portfolio companies, SimpleLegal, has had so much success mining LinkedIn for customers that the CEO was initially reluctant for me to name his company in this article, fearing his competitors will mimic their common sense, yet clever approach.

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Follow The People

Simply put, SimpleLegal pro-actively monitors the LinkedIn profiles of its key users. When a user departs their current employer, the company sends a congratulatory note which secures the continuity of their relationship with the user.

Although LinkedIn is a good source of career changes, the company doesn’t solely rely on it to stay abreast of its users’ careers, as it is a lagging indicator when a user is slow to update their profile. According to Nathan Wenzel, SimpleLegal’s CEO, “In 2016, where information is available on LinkedIn, Twitter, Facebook, blog posts, and more, there’s no excuse to not know what is going on in your customer’s business and in their professional lives. Not knowing about a paper they have published, a talk they have given, or a job change they’ve made is just laziness. There’s no excuse.

Every single former SimpleLegal user that has moved into a General Counsel role at their new employer has implemented SimpleLegal. All of them.”

Tend The Home Fires

When SimpleLegal follows its users into a new organization, there are generally no alternative solutions being used. However, in some cases, especially with its larger customers, the company displaces a competitor. These old-school rivals do not pro-actively track employee turnover at their customers’ organizations and thus they are often caught flat footed when SimpleLegal supplants them.

Although it’s generally good news when one of SimpleLegal’s users moves on in their career, it also exposes the company to potential churn risk. Just as SimpleLegal has success ousting competitors, its Customer Success team must be diligent to avoid being likewise a victim of employee churn.

Thus, when the company is alerted that a key user has departed a current customer, the Customer Success folks provide hands-on training and attention to the account. Once a successor is hired, SimpleLegal ensures that the new member of the team understands and appreciates the utility of its solution.

Per Mr. Wenzel, “When a new key user starts with the company, we call them to introduce ourselves and find how we can be helpful to them in their new role. It’s not about helping them use our software. It’s about helping them achieve their objectives and make a strong first impression.” This hands-on approach is generally sufficient to retain ownership of the account, as evidence by the fact that in the past year, SimpleLegal has only lost one small account due to losing its product champion.

Bro Benefits

A key component of SimpleLegal’s strategy is the strong relationships it establishes with its customers. Per Nathan, “We have several users who have turned to us to help them find new roles after they have left their prior employer. It’s obviously a win for the person looking for their next role. It’s also a win for our customers when we can help them find a talented new hire.”

Treating customers as true collaborators helps breakdown the Us vs. Them dynamic that is often present between software vendors and their customers. As Nathan explains it, “Some users will text us on weekends and at 10pm or 11pm at night about their ideas about the future of Legal Tech. They geek out about this stuff the same way we do.”

Not only do these high-touch associations pay off when a user advances in their career, this affinity also results in high-quality and inexpensive leads through referrals.

As part of the sales process, SimpleLegal sets the expectation that its champions will provide introductions to their fellow colleagues at other companies. SimpleLegal also hosts and sponsors knowledge sharing and networking events that make such introductions relatively easy and mutually beneficial for everyone involved.

This straight forward strategy is effective for SimpleLegal because:

  • Its solution has a clear and economical value prop
  • It maintains a friendly rapport with its key users such that the company’s customer success team is viewed as trusted problem solvers, differentiating it from typical software vendors
  • The switching costs required to displace an incumbent solution are more than offset by SimpleLegal’s incremental functionality
  • It sells into a horizontal market segment which is conscribed enough that many of the professionals know each other, which makes its referral program particularly effective
  • Referrals work well because the close-knit nature of the company’s target market results in users having personal relationships with a number of their peers

Clearly not every industry or product fits the above criteria. However, nearly all businesses can benefit from knowing when their product champions leave for greener pastures, especially when they have established a meaningful relationship they can cultivate throughout the champion’s career.

You can follow John on Twitter: @johngreathouse.

Image credit: Carl Court/Getty Images

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The 5 Criteria That Matter When Evaluating A College Entreprenurial Program Tue, 13 Sep 2016 12:00:08 +0000 A version of this article previously appeared in Forbes. A friend recently asked me to give his startup-minded daughter some advice to help her vet […]

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A version of this article previously appeared in Forbes.

A friend recently asked me to give his startup-minded daughter some advice to help her vet undergraduate entrepreneurial programs.

As I thought about the characteristics that comprise a great program, I identified five criteria that a prospective entrepreneurial student can use to evaluate the efficacy of a collegiate entrepreneur curriculum.

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5 Criteria To Assess An Undergraduate Entrepreneurial Program

In my role as a Professor of Practice within UC Santa Barbara’s entrepreneurial Technology Management Program (TMP), I have worked with approximately 8,000 students over a ten year period. I have also interacted with a number of excellent startup programs, most notably those Cal Poly’s Center For Innovation And Entrepreneurship and SDSU’s Lavin Entrepreneurship Center. Through these student and faculty interactions, I have gathered empirical (but non-scientific), first-hand evidence of the factors that contribute to a world-class undergraduate entrepreneurial program.

  1. Practitioners, Not Professors – classes should be taught by people who have fought hand-to-hand combat in the startup trenches

When I was an MBA student at the University of Pennsylvania's Wharton School of Business, I was frustrated that most of the Professors in the Entrepreneurship Department had never been entrepreneurs. I found it difficult to translate their theoretical and academic lectures into actionable advice.

Ask: What percentage of the startup-oriented classes are taught by accomplished entrepreneurs?

  1. Launchpad For Real Businesses – the institution should have a track record of launching successful businesses. In the past few years, colleges have been publishing the number of businesses which they have played an active role in launching. Additionally, independent organizations, such as Pitchbook, compile annual lists of the number of VC-backed companies launched at US Universities.

Note: due to the founders’ relative lack of experience, most student enterprises do not qualify for venture capital. Thus, cast your research net beyond VC-backed companies to fully understand a school’s ability to foster viable businesses. Also, be sure to evaluate the veracity of the startup alumni network – look for examples in which alumni assisted startups as advisors, investors, etc.

Ask: How many businesses were started in the past five years by students, alumni and/or professors? How much Angel and institutional money did they collectively raise? Are funds available to invest in student businesses? Are facilities available to students post-graduation to incubate their businesses?

  1. Graduate Programs – the school should be affiliated with strong, technical graduate schools because astounding business ideas generally originate from engineers, scientists and life sciences students. Note: no bonus points should be given for an MBA program, as MBA’s seldom generate great business ideas.

Ask: How many patents were filed by students and faculty during each of the past five years? How active (and helpful) is the technology transfer office, as measured by the number of patents licensed by alumni and students annually.

  1. Dogma Index – the university should make it reasonably easy for entrepreneurial students to create a degree that fits their specific interests.

The typical cable viewer has nearly 200 choices, but only watches an average of 17-stations. As noted in, Entrepreneurs Should Create A Degree, many universities deploy the cable industry’s business model. Entrepreneurs who are in a hurry to launch their ventures question why they have to pay for (and attend) classes that have questionable applicability to their startup future.

Ask: How many entrepreneurial students have crafted their own degree in the past five years? What is the process required to create a custom degree?

  1. Experiential Reality – the entrepreneurial curriculum should require students to practice startup skills outside of the classroom.

Entrepreneurship acumen is acquired in a fashion similar to athletic skills – experientially. You can read books, watch videos and talk with experts about how to hit a baseball, kick a soccer ball or serve a volleyball, but until you get on the field or court, you will never master the game.

Ask: What hands-on activities are incorporated into the entrepreneurial curriculum? Is there a venture competition with cash prizes? Also, contact recent graduates and ask them which exercises and assignments were the most transferable to their startup careers.

College serves many purposes beyond simply equipping young people for the startup world. However, Universities that purport to have an entrepreneurial program are remiss if they do not provide a pragmatic curriculum that hones real-world skills students can use to run their ventures.

You can follow John on Twitter: @johngreathouse.

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These High School Dropouts Crushed It With Some Simple Growth Hacks Tue, 06 Sep 2016 12:00:39 +0000 A version of this article previously appeared in Forbes. Novelist and High School Dropout Louis L'Amour knew the importance of seemingly unimportant people (AP Photo) “Growth […]

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A version of this article previously appeared in Forbes.

Novelist and High School Dropout Louis L'Amour knew the importance of seemingly unimportant people (AP Photo)

“Growth hacking” is one of today’s most overused terms, yet despite its trendiness, it predates the Internet by centuries. Entrepreneurs have been seeking clever shortcuts to spur their growth and circumvent their competitors since the dawn of commerce.

By looking backward, modern entrepreneurs can co-opt the hacks from a pre-digital age that remain relevant today. These clever ideas often come from unusual sources, including an uneducated carnival operator, an author who dropped out of High School at 15, the owner of a laundry company who ran away from home as a teenager and a restaurateur who left school at the age of 13. That’s right, all of the growth hacks described below were created by High School (and Junior High) dropouts.

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Target The Untargeted, Offer Value And Ignore Conventional Wisdom

You probably haven’t heard of Raymond “Pappy” Smith, but he parlayed his Junior High education into an entertainment empire that changed the way Americans viewed gambling.

His success was based on delivering substantial value to an overlooked market, spurred along with some common sense growth hacks.

Pappy left home at 14 and spent the next two decades working midway games in traveling carnivals. These games, which included throwing dulled darts to pop balloons, knocking over lead-filled milk cans with a mushy, cork-filled softball and roulette wheels manipulated by the operator to land on certain numbers, were notoriously rigged and nearly impossible to win.

Late in his carny career, Pappy began to operate his roulette wheel without cheating. Business boomed. He expanded this experiment to other games and realized the obvious – people will play more often if they believe they have a fair chance of winning.

Pappy later said, “I wanted them to win” - he understood the quid pro quo that illicit gaming operators had missed. People will forfeit their money for the entertainment value of gambling, but only if they feel might win. Raymond’s innovations led to the creation of modern-day Vegas, in which the house earns a fair return, with payouts averaging 97%.

Some of Pappy’s commonsense growth hacks included:

  • Target – Pappy served an overlooked market: women. His casinos where well lit, clean, utilized female dealers and offered child care services
  • Education – When he opened his first casino, gambling was not mainstream. Thus, he had to educate his gamblers. To this end, dealers were encouraged to advise against bad bets and to explain the games to novice players
  • Money Back Guarantee – If you lost at Pappy’s casino, he would reimburse your travel expenses (this was a one-time offer)
  • Entertainment – He pioneered the integration of shows, fireworks, etc. into the gambling experience
  • Marketing – In the age of the automobile, Pappy blanketed billboards within a 500-mile radius of his casino with clever messages, all of which concluded with the tag line “Harolds Club or Bust” Note the typo in his casino’s name, a legacy of his lack of formal education which he refused to change, even after he was apprised of the mistake.

Lessons: (i) Over deliver value to your users. No matter what you sell, if you deliver fair value and provide a more expansive value proposition than your competitors, you will win. (ii) Be a contrarian, when everyone is zigging, zag. Question conventional wisdom. (iii) Seek out an unserved market and tailor your offering to accommodate target users’ needs.

There Are No Unimportant People

American Western writer Louis L’Amour left home during tenth grade and worked a variety of itinerant jobs for over a decade before beginning his writing career. During his vagabond days, Louis learned a very important lesson, “There is no such thing as an unimportant person.”

Mr. L’Amour eventually outsold nearly all of his contemporaries, become the 20th biggest selling author OF ALL TIME, just behind Stephen King, with sales in excess of 330 million books.

Once he became an established author and began traveling to promote his books, Louis always sought out the local rack jobbers – the people who placed paperback books in the stands by supermarket and drug store checkout lines. He would hang out with these modest folks, often taking them to dinner and getting to know them over a few drinks.

Louis knew that jobbers traditionally received little to no recognition from authors, yet the manner in which they did (or did not) display an author’s books could significantly influence its sales.

The impact of meeting a celebrity author who was genuinely interested in them ensured that in the pre-Amazon era, Louis’ paperbacks were always front and center of the book buying public.

Lesson: Who are the rack jobbers in your industry? Understand that there is no such thing as “unimportant people” and show respect and give recognition to everyone in a position to help your venture.

You can follow John on Twitter: @johngreathouse.

Image credit: AP Photo

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Good Gawd: Unconventional Startup Wisdom From The Hardest Working Man In Show Business Thu, 25 Aug 2016 12:00:36 +0000 A version of this article previously appeared in Forbes. Despite his non-existent education and numerous personal demons, James Brown was a gifted entrepreneur who reveled […]

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A version of this article previously appeared in Forbes.

Despite his non-existent education and numerous personal demons, James Brown was a gifted entrepreneur who reveled in proving Conventional Wisdom wrong. In the early 1960’s, it was generally believed that soul music needed to be watered down (think Motown) in order to crossover to white consumers. It was also considered gospel that artists should not produce live albums, as such records would reduce concert attendance.

James proved the record industry experts wrong, on both counts.

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The Godfather Lays Down The Law

James Brown’s Live At The Apollo album is perennially rated one of the Best Live Albums of All Time, yet it was almost never made. Syd Nathan, owner of Brown’s label, refused to finance a live album, as he was concerned it would limit James’ popularity on the road, which in turn, would suppress sales of future singles, which was the label’s primary revenue source. Syd, along with most industry executives, also did not believe there was a market for albums comprised of songs that had already been released.

Conventional Wisdom: James, if you record your live show, people will have no reason to get off the couch and see you at a club. Besides, who’s going to buy an album of songs they already own? Forget it.

James knew better and ignored the industry experts. Using his own money, he leased the necessary recording equipment, hired the sound engineers and rented the Apollo Theater. Once the show was recorded, Syd Nathan refused to release it, relenting only when it became obvious that Brown was going to fund its distribution himself. Greed won out and Mr. Nathan finally released Live At The Apollo in May 1963, seven months after it was recorded.

The album’s success was instantaneous, reaching number 2 on Billboard’s mainstream Pop charts, which measured the record-buying habits of a predominantly white audience. The album’s success outside of the R&B market proved that James’ unvarnished sound had universal appeal, which impacted the way Soul and R&B music was marketed for the next twenty years.

Radio And Baseball

The first radio broadcast of a professional baseball game was on August 15, 1921. However, it wasn’t until 1935 that owner of the Chicago Cubs agreed to allow his team's entire season to be aired on the radio. Why the 15-year delay?

Conventional Wisdom: Owners, why would someone pay to attend a game when they can listen to it for free in the comfort of their home? If you broadcast your games, your stadiums will soon be empty.

America was still battling the Great Depression in the mid-1930s and gate receipts represented the majority of the owners' revenue. Thus, their desire to protect this important cash stream is understandable.

Despite Conventional Wisdom's notion that radio would destroy attendance, it actually drove it higher in every city that rolled out season-wide broadcasts. Yet, despite the empirical evidence of radio’s success, several teams continued to refuse to broadcast their games for another three seasons. Sometimes Conventional Wisdom dies a slow death.

What the owners did not initially realize was that radio provided rural fans an immersive experience that was previously not possible. Instead of simply reading box scores and newspaper accounts of the prior days’ games, radio broadcasts allowed fans to experience their team's dramatic ups and downs in real time.

The visceral nature of radio allowed fans to establish personal attachments to players which motivated them to drive great distances to attend games and experience first-hand what they had previously only imagined through their mind’s eye.

Bootlegs To Bigtime

Record executives were dumbfounded that the Grateful Dead openly encouraged their Deadheads fans to record their shows and share the resulting bootlegs.

Conventional Wisdom: Jerry, if you let fans record your shows, it will supplant the market for concert tickets and commercial recordings.

Even through their ganja haze, the Dead knew better.

By allowing fans to trade and sell recordings of its shows, the Dead's cult status was significantly enhanced. Some fans began to collect show recordings. Others began following the band on tour, proudly boasting the number of Dead shows had attended, which drove up ticket sales. These hardcore fans also devoutly purchased the Dead's commercial releases and other licensed products (T-shirts, bumper stickers to put on their Cadillacs, etc.), proving yet again, the so-called experts were wrong.

You can’t control the vagaries of the startup world, but you’ll have a head start over most people once you understand that Conventional Wisdom is often unwise. When everyone is zigging, go zagging.

You can follow John on Twitter: @johngreathouse.

Image credit: AP Photo/Kevork Djansezian

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Your Customer Success Team Is Focusing On The Wrong Definition Of Success Mon, 22 Aug 2016 19:45:44 +0000 A version of this article previously appeared in Forbes. L-to-R: John Greathouse, unknown woman about to slap John, Reed Shaffner, Jerry Jao & Ara Mahdessian […]

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A version of this article previously appeared in Forbes.


L-to-R: John Greathouse, unknown woman about to slap John, Reed Shaffner, Jerry Jao & Ara Mahdessian

My venture firm, Rincon Venture Partners recently teamed with Jason Lemkin, Founder of SaaStr, to host the first SaaStrX event. I had the honor of moderating a panel of three SaaS CEOs who have collectively raised nearly $40 million of venture capital and are on their way to breakout success: Reed Shaffner of Workpop, Jerry Jao of Retention Science and Ara Mahdessian from ServiceTitan.

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The Most Important Metric

We had a spirited discussion regarding a number of issues related to blowing past $10M in annual recurring SaaS revenue, in front of a sold-out crowd of about 400 entrepreneurs. The evening would not have been possible without the generous support of Rainforest QA and Cornerstone onDemand.

Near the conclusion of our discussion, I asked each CEO to name any non-obvious metrics by which they guide their businesses. All of the answers were insightful, but I found Ara’s reply to be especially instructive.

He started by stating, “We track customer success.” My initial reaction was, “Great, but I am not sure that qualifies as non-obvious” but then he quickly knocked it out of the park, adding, “We define ‘customer success’ as enabling our customers to generate more prospects and close more sales. In other words, are we measure whether or not we are truly making our customers more successful.”

Ara went on to note that ServiceTitan has been experiencing negative churn, netting 120% annual revenue growth from existing customers. As Ara’s customers thrive, they deploy even more of ServiceTitan’s solutions, which in turn spurs their growth even further. By properly defining and tracking customer success, Ara’s team has tapped into a powerful virtuous cycle.

When Ara concluded his definition of customer success, it was clear that his approach is anything but obvious.

Sure You Track Satisfaction, But Whose Success Are You Monitoring?

Many companies create customer success teams to onboard and upsell customers. These teams gauge customer satisfaction by tracking net promoter scores, customer churn, renewal rates, etc. However, these metrics measure your company’s success, not that of your customers.

In contrast, entrepreneurs who want to build sustainable businesses which blow past $10M in annual recurring revenue, should track metrics tied directly to their customers’ achievements.

Such metrics will obviously differ. In ServiceTitan’s case, its appointments and service calls. If you sell a cost savings tool, measure the actual costs saved by your customers. If your solution increases efficiency, determine a proxy by which you can estimate the effectiveness of your tools within your customers’ organizations. The key is to focus on your customers’ metrics, not your own.

Irrespective of your products’ value prop, if your customers’ accelerate the achievement of their goals by deploying of your solutions, you can be assured that your own success will follow.

You can follow John on Twitter: @johngreathouse.

Image credit: Drew Haines of Devco

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Selling Online In 2016 For The First Time – What Works When You Have A Blank Slate? Mon, 08 Aug 2016 12:00:35 +0000 A version of this article previously appeared in Forbes. Kate Hudson, Emma Roberts, Eva Longoria, Jessica Biel and Rihanna began wearing Z Supply's clothing before […]

The post Selling Online In 2016 For The First Time – What Works When You Have A Blank Slate? appeared first on John Greathouse.


A version of this article previously appeared in Forbes.

Kate Hudson, Emma Roberts, Eva Longoria, Jessica Biel and Rihanna began wearing Z Supply's clothing before it could be purchased online. It may seem hard to believe, but even in 2016, there remain a number of successful consumer brands that are not sold online. The reasons companies elect to sell exclusively offline differ, but they often center on managing channel conflict with their retail partners.

I thought it would be interesting to understand the challenges and concerns of entrepreneurs who began selling online for the first time in 2016, so I sat down with Heidi Muther, COO at Z Supply, LLC. This is the first of a two part, extensive interview I recently conducted with Ms. Muther.

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Founded in 2011, Z Supply, LLC has created five women’s fashion brands with a sixth brand and extension into Men’s, launching Spring 2017. In addition to the Z Supply brand, which offers comfortable fashion basics, the company has created Black Swan, Others Follow, Rag Poets and White Crow. According to the company, “Black Swan is targeted towards the refined, romantic city woman, Others Follow to a carefree, coastal lover, Rag Poets to a classic sophisticated woman and White Crow to the vintage loving, edgy woman.”

John Greathouse: Hello Heidi. The fashion industry can be tough to break into. What was your path to your current role? Did you always have the goal to work in the fashion industry?

Heidi Muther: I entered college with the intent of becoming a Mathematics professor, but after taking multiple economics classes, I changed my major to Business Economics. I ended up really relating to the nuance and intricacies of product supply and customer demand. That in parallel with my interest in clothing trends since a young age, it was a natural fit for me to enter the fashion business. I was fortunate to acquire my first job with Robinsons-May in 1989. Their executive training program was unparalleled, providing a sturdy foundation for young and highly motivated buyers. After seven years at May company as a buyer, I spent ten years at Pacific Sunwear as a senior buyer, DMM and VP, where the company experienced tremendous growth, expanding from 114 stores to over 1100.

After Pacific Sunwear, my career covered two new ends of the retail spectrum; off price at Ross and women’s luxury at St. John Knits. Both of these executive positions rounded out my retail/wholesale experience and led me to this new opportunity at Z Supply as the COO. This position embodies everything I love about the fashion industry from merchandising to corporate planning and strategy.

Greathouse: Fashion, much like music and the arts, inspires a large number of young entrepreneurs. As a UC Santa Barbara alum, do you have any advice for my UCSB students who desire to break into the fashion industry?

Muther: I do believe internships, while in college, provide great insights to what a person’s strengths are and where their passions lie. There are so many different routes a person can take to enter the industry, such as design, buying, production, marketing, eCommerce and styling to name a few. I would strongly recommend researching companies in their area and applying directly for a summer internship or use the (campus) career center, to arrange internships and interviews for your first job.

Besides individuals with a merchandising/design degree, many other degrees can be applied to fashion industry jobs. I used to recruit at both May Company and Pacific Sunwear and individuals with communication degrees, business degrees and even psychology degrees did well in the fashion business. It really comes down to a person’s drive and personality… you must be malleable. Some of the more crucial skills in the fashion business include the ability to observe and translate trends, understand your customer and work well with cross-functional teams.

Greathouse: Z Supply has developed a highly successful network of boutique retailers. What factors led you to consider augmenting your retail channel with direct, online sales?

Muther: We were very careful when launching our first eCommerce site. Boutiques are the backbone of our company’s sales and we did not want to negatively impact their business. That being said, we were getting inundated with inquiries regarding where to find our product. Frequent placement of our Z Supply clothing on celebrities piqued interest in the brand even more. So first, it was the need for accessibility to our product and, ultimately, accessibility to the entire line; not just the few styles boutiques were carrying.

Secondly, eCommerce is a powerful marketing platform for us. It allows us to reach tens of thousands of consumers, while simultaneously providing direct access for customers who could not find it in their own town. Lastly, it is healthy source of revenue for our company. We are proud of our first site, which is clean, easy to shop and represents what we are trying to sell - comfortable, chic essentials made of amazing fabrics. Our second site will be launching in August 2016, followed by a third eCommerce site in Spring of 2017.

Greathouse: Channel conflict is an obvious concern when adding new avenues of distribution. What have you done to minimize such conflict and what has the reaction been from your retailers?

Muther: I am happy to say that our sales reps and retail boutiques have not been negatively concerned with our site. They too see it as a marketing tool, where digital outreach brings more brand awareness and as a result, they are experiencing more demand at their store level. They will often repost our Instagram posts and draw local customers to their own stores. Additionally, we never promote (directly) on our site. Our goal is to ensure the value of our brand stays intact and that we do not threaten the small boutique business in any way.

Greathouse: It was smart to begin the process with one of your brands and learn from your mistakes, rather than rushing all of your designs online and making the same mistakes over and over. What caused you to select Z SUPPLY as the first fashion line to take online?

Muther: Z Supply is the widest reaching brand in both age and ease of wearability. We are reaching 18-60 year old’s with the line, which focuses on great fits, fabrics and assortment of colors. You can fall in love with our pocket tee and then buy it in 5 other fabrics or 30 different colors. We have expanded the line with dresses, joggers, shorts and long sleeve items, so now the use of our line is truly for every occasion from day to night. It is just an easy to wear, but fashionable brand for EVERYONE.

Greathouse: What did you learn from Z Supply’s online rollout that you will do differently as you make your other brands available for online purchasing?

Muther: We actually hired a few consultants for the first 90-days, to mitigate any hiccups along the way and ensure we made as few mistakes as possible. They assisted with building the site, building marketing plans and general analytics. This gave our new eCommerce team access to digital professionals they could learn from and a “website-building template” to replicate in-house for our next site. The key takeaways from our initial launch were one, invest a bit more money on marketing up front, because it builds your “shopping” customer base, which pays off in folds down the road. Two, create significant marketing assets, in order to keep your social media posts and emails fresh. Three, do not launch the week of Black Friday!

Greathouse: What have the results been so far?

Muther: To date, it has exceeded all of our expectations. We have tripled our original plan and are running between an 8-10 times return on our marketing spend. I credit that to our very smart, driven and constantly inquisitive eCommerce team, who really enjoy exceeding their numbers each month. Our marketing is becoming more sophisticated and we recently added an affiliate program, which is showing great promise for incremental sales. Due to the site’s success both in sales and the breadth of marketing it provides, we are confident about launching our White Crow site and how it will promote the brand growth nationally.

Follow John’s startup-oriented Twitter feed here: @johngreathouse.

Photo Credit: Z Supply, LLC <>



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Why Millennial Entrepreneurs Should Never Watch Shark Tank Alone Thu, 21 Jul 2016 12:00:43 +0000 A version of this article previously appeared in The Wall Street Journal. The reality television show Shark Tank makes for entertaining content but many of […]

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A version of this article previously appeared in The Wall Street Journal.

The reality television show Shark Tank makes for entertaining content but many of its underlying messages are potentially detrimental to tech entrepreneurs. Thus, emerging entrepreneurs should parse fact from fantasy by watching the show with an experienced business pro.

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Relax. I get that Shark Tank is a TV show focused on entertaining its viewers. Having appeared in a reality series, I am well aware of the lack of reality involved in this entertainment genre. Our dialog was scripted, reaction shots were routinely taken out of context and faux conflict was relentlessly encouraged among the cast.

As noted in What’s Real About Shark Tank, the show can give consumer product companies a significant marketing and revenue boost, as it did for one of my former students, Jeff Overall, Founder of PolarPro. It is also an inspirational alter call to entrepreneurship.

Per the show’s Mark Cuban, “Anybody with an idea can see how the business process works, see that these are normal people, and there's nothing magical about coming up with an idea.” I completely agree regarding the lack of “idea magic”, however the show’s time constraints and focus on drama provide viewers with a highly distorted portrayal of “how the business process works.”

I have seen the effects of this distortion first hand. A number of my UC Santa Barbara entrepreneurial students initially model their investment pitches on the show's contrived format. Experienced entrepreneurs have no issues parsing where reality stops and entertainment begins. However, such distinctions are less clear to young entrepreneurs.

I am not alone in my opinion that Shark Tank is not representative of real-world tech investing. According to David S. Rose, author of the New York Times best-selling textbook on the subject, Angel Investing: The Gust Guide to Making Money & Having Fun Investing in Startups:

“I love watching the show, but Shark Tank has about as much to do with angel investing as Indiana Jones has to do with archeology. While the show makes for great drama, it has absolutely nothing to do with reality, nothing to do with angel investing, and very little to do with entrepreneurship. If anything, some of the most valuable lessons one can learn from watching the show are what not to do—both as an investor and as an entrepreneur. The best TV moments come from Mark Cuban and Kevin O’Leary, but they are also the least realistic. I strongly advise aspiring entrepreneurs against trying to learn anything from the show, but instead sit back and watch it for what it is: neat entertainment."

I admittedly am not addicted to the show and thus I don’t have the depth of knowledge of a rabid fan. However, assuming the shows I watched were largely devoid of lessons for real-world entrepreneurs, especially those running tech ventures.

Shark Tank Distortions

Partners, Not Sharks - The show's title communicates a predatory message. Accomplished investors are not seeking to gain an advantage at the entrepreneur's expense. On the contrary, successful investors are typically entrepreneur-friendly, and treat their entrepreneurs as partners, not adversaries 

Pitch Overvalued - Pitches are important, but they are not the focal point of fundraising in real life. Understanding the entrepreneur's motivations, aptitude and attitude are more important than a slick pitch. In the real world, pitches are an important step in establishing a relationship with an investor, not the finale which triggers an investment.

Compressed Timeline - I realize that for purposes of the show's formula, funding decisions must occur immediately after the pitches. However, in real life, investor relationships are typically fostered over weeks, months and in some cases, years, not a few minutes.

Note that the judges' "commitments" are "pending diligence" and thus, they are merely signs of interest to learn more, not commitments, as implied on the show. In addition, actual pitches are much longer than the edited versions that are aired. Per Jeff Overall, “The QA portion is actually very thorough and I imagine these would be the same questions asked in a traditional fundraising setting. They usually only air the entertaining questions, a lot of the dry questions the sharks (use to) make their decisions on are not aired.”

The show would be more educational (and realistic) if it allowed viewers who are looking to be educated and entertained to watch/listen to entire pitches online or via podcasts.

Ideas Overvalued - The show's pitch-centric format places too much emphasis on the appeal of ideas, rather than the entrepreneur's (and his or her team's) ability to create value via effective execution.

In reality, ideas are worthless. Thus the show's emphases of the novelty or cleverness of a particular idea could cause unseasoned entrepreneurs to attempt to raise money too early. In the real world, entrepreneurs should seek capital from sophisticated investors after they have proven their underlying value proposition. Such proof usually comes in the form of strategic partners and paying customers, as described more fully in What The Heck Does Traction Really Mean To A VC?

Lack Of Domain Expertise - Ideal investors are experts in your market and can provide relevant, tactical assistance. The Shark Tank panel often has little industry expertise in the deals they are pitched.

Paltry Valuations - The amounts invested are not representative of the bite sizes generally taken by sophisticated tech investors. Most legitimate Seed Rounds provide entrepreneurs with enough funds to generate meaningful value in advance of a future funding round and seldom result in the entrepreneur giving up more than 20% of their ownership.

Consumer Centric - The show understandably focuses on consumer products that its viewers can relate to. However, in reality, very little venture capital is applied to such startups. Consumer goods are best funded in a crowdsourced manner, through industry partnerships or via conventional loans, which can be secured by the underlying inventory.

If you have a consumer-oriented product, Shark Tank can act as a component of an effective PR campaign, driving by buyers to your site. For instance, startup Plated captured 45,000 email addresses in 120-seconds after appearing on the show. Unfortunately, the company’s ability to directly sell product was limited, as the deluge of traffic made their commerce funnel inoperable.

Thus, companies with physical goods (like Plated and PolarPro) should consider Shark Tank as an option - not to secure money from one of the celebrity panelists, but to jumpstart their sales and gain enough momentum to attract a bona fide investor.

Not So Free Publicity - Although public exposure might be a legitimate motivation for appearing on the show, the resulting notoriety can come at a cost. Publicity cuts both ways. If your product is poorly received by the judges, it could be a major setback, making it more difficult to raise legitimate funding in the future.

Nothing Is Real And Nothing To Get Hung About

If you watch Shark Tank as entertainment and not to obtain a startup education, you will be benignly inspired by fellow entrepreneurs. However, if you attempt to apply this television fantasy as a template for your fundraising efforts, you will learn first-hand what the Producer of the reality show I worked on once told me.

In the scene we were shooting, I was walking from a lake holding fish that I had supposedly caught (in reality, it had been purchased at Whole Foods). The script required me to tell our cook that he needed to incorporate the fish into his meticulously planned meal. The intent was to cause dramatic conflict, as the chef had to completely re-think the meal.

Reality TV, including Shark Tank, involves a heavy dose of contrived controversy. While handing me the store-bought fish, the Producer laughed and said, “There is very little that is real about reality TV.” One might paraphrase this to say that, compared to raising money in the tech world, “There is very little that is real about Shark Tank.” Thus, watching the show with a Mentor who has already gone down the investment road will allow you to enjoy the entertainment and drama, without buying into the bullshit.

Follow my startup-oriented Twitter feed here: @johngreathouse. I'll never tweet about swimming with sharks or that killer burrito I am about to devour - just startup stuff. You can also check out my hands-on startup advice blog HERE.

Image: PHILIPPE LOPEZ/AFP/Getty Images

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VC Confessions: I Don’t Really Care About Your Product Demo Thu, 07 Jul 2016 12:00:44 +0000 A version of this article previously appeared in Forbes. It happens during nearly every fundraising pitch meeting. The entrepreneur cannot wait to show me their […]

The post VC Confessions: I Don’t Really Care About Your Product Demo appeared first on John Greathouse.


A version of this article previously appeared in Forbes.

It happens during nearly every fundraising pitch meeting. The entrepreneur cannot wait to show me their product via a demo. As politely as I can, I dissuade them and explain that there are other ways I prefer to spend our precious time together.

Most entrepreneurs seem confused by my reaction and often say something like: “VCs love demos. You’re the first one I’ve met who didn’t want to see our product.” I then explain that I evaluate the veracity of a product by seeking guidance from current, past and prospective users, rather than relying on a product demonstration.

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Note: I invest almost exclusively in b-to-b software companies. My “no demo” approach is clearly not appropriate when assessing the veracity of investments with a hardware component or with a consumer facing product.

Don’t Demo Me Bro

Assessing an entrepreneur’s influence and persuasion skills is important, but I can do this by observing their fundraising pitch rather than listening to a well-rehearsed product overview.

There are six reasons I’d rather not spend my limited time with a company’s Founder(s) sitting passively through a demonstration.

1.  Monologue – Although it is possible to interrupt a Founder’s speal with questions, demos tend to be one-way discussions. When investors do interject, demos typically become even more pedantic, as Founders feel compelled to speak expansively about specific features in an attempt address the investor’s concerns.

2. Comfort – Demos allow Founders to slip into a formulated script, which is seldom revealing. My goal isn’t necessarily to make a Founder uncomfortable during a pitch meeting, but the experience is typically more rewarding and informative for all parties when we have a give-and-take conversation.

3. Fool A Fool – I sold surgical robots from PowerPoint slides in the early 1990’s, before the robots existed. We weren’t trying to fool anyone (we disclosed that we needed prepaid orders to build the robots), but we certainly were selling a vision. I also pitched an expert marketplace to some of the world’s largest ISPs as a support tool, nine-months before the product was optimized for that purpose.

As such, I understand the degree to which hand waving and vaporware can influence investors and potential customers. Demos inherently encourage such hand waving, blurring the line between which features are available today and which are still on the product roadmap.

4. GUI Fever – Entrepreneurs are often justifiably proud of their clever, clean user interfaces. However, I am indifferent. 

An interface that is engaging can fool customers into trying a sub-par product. In contrast, an ugly interface may not show well in a demo and could turn off a potential investor. However, if a product with a mediocre GUI is consistently adopted by customers, it may signal a lucrative investment opportunity.

5. Sales Mode – Demos intrinsically cause Founders to launch into sales mode. Rather than be sold, I’d much prefer to understand a product’s value proposition and the extent to which it has achieved fit among the company’s target market customers. Such understanding is more difficult to achieve when you are forced to parse through a scripted monologue.

6. Regular Salesperson – Founders can obviate product weaknesses via their force of will and passion. Thus, in the occasional instances when I do sit through demos, I prefer they be conducted by a rank-and-file salesperson. This approach provides me with a view that is more representative of how a typical customer is introduced to the company’s value proposition.

Customers Are All That Matter

At Rincon Venture Partners, our approach to diligence isn't the old-school methodology of forcing entrepreneurs to deal with an expensive expert who spends weeks performing a largely academic exercise of assessing the company's tech stack and code, all the while asking irrelevant questions intended to assure the investors that she is truly an expert and that they are getting their money's worth.

In contrast, we value entrepreneurs' time and thus our diligence generally includes introducing them to potential customers and partners. Our approach, which is certainly not unique, often results in sales, partnerships and otherwise productive relationships. In turn, we receive unfiltered, frank feedback regarding the company’s product, team and value prop.

Entrepreneurs often suggest customer references that arose from a highly curated introduction or prior relationship. These conversations are helpful, but we attribute more value to discussions with customers who came upon the company’s product on their own. Because of this reality, we also seek references from customers that have an arms-length, dispassionate relationship with the company. Such customers tend to provide more frank and objective feedback that is infinitely more helpful than the slickest product demo.

You can follow John on Twitter: @johngreathouse.

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10 Essential Branding Maxims Thu, 30 Jun 2016 12:00:09 +0000 A version of this article previously appeared in Forbes. In 1987, when Rick Astley filmed the video for his hit song Never Gonna Give You […]

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A version of this article previously appeared in Forbes.

In 1987, when Rick Astley filmed the video for his hit song Never Gonna Give You Up, he had no idea it would eventually become one of the most viewed videos of all time.

By 2016, the video had been watched over 218 million times. Never Gonna Give You Up’s resurgence began in 2007, when a user on an obscure gaming site posted a link to Rick’s video under the heading for a trailer of the not-yet-released Grand Theft Auto IV video game. One year later, the phenomenon had become commonplace and was dubbed “Rickrolling,” a term that is now ubiquitous with any Internet misdirection technique.

Many companies unknowingly Rickroll their would-be customers by improperly aligning their products’ capabilities with their marketing messages.

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Maxim #1 – It’s About the Promise, Stupid

According to marketing guru Guy Gabriele, brands live in the minds of customers and prospects. Guy believes that your brand is not what you say it is or what you hope it will be. Rather, your brand is a promise which is interpreted by those to whom you message. When your product or service is unable to deliver on this promise, you are effectively Rickrolling everyone who responds to your misaligned messaging.

At Computer Motion (NASDAQ: RBOT, acquired by Intuitive Surgical), our initial brand’s promise was, “Robotics will reduce costs within the operating room.” Although we did not intentionally mislead anyone, the customers and prospects that believed us were Rickrolled.

We assumed that robots would perform tasks that would reduce the required number of surgical staff persons. The reality was that robots added costs to surgical procedures because the size of the surgical team remained unchanged. Once our target market acted upon our call to action and experienced our products, they revised our brand’s promise as follows: “Robotics are cool, hard to use and add costs to surgical procedures.”

It took us a couple of years to realize that our brand’s intended promise was not in sync with reality. We eventually modified our promise to: “Robotics will enable new minimally invasive procedures.” Fortunately, we delivered on this revised promise and ultimately helped create a multibillion dollar industry in which costs increased, but patient outcomes were greatly improved.

We were slow to revise our brand’s promise because we wanted robotics to reduce operating room costs, as we felt that such cost reductions were a requisite for our success. Avoid Rickrolling your customers and prospects by ignoring what you want your brand’s promise to be and understanding the actual promise that resides in the minds of your intended users.

The remaining Brand Maxims are taken from Guy Gabriele’s “Little Red Book” series, which he devised in his role as a Marketing Lecturer within UC Santa Barbara’s Technology Management Program.

Maxim #2 – What You Say It Means Doesn’t Mean Anything

What you believe your brand represents means nothing in reality. What the brand means to your customer means everything. Whatever they say it means, that’s what your brand means. Find out what they think. Remember: it’s all in their heads. – Guy Gabriele

Maxim #3 – Gap, Gap, Everywhere A Gap

There is always a gap between what you intend your brand to be and what the consumer believes it is. Find that gap and take steps to close it. – Guy Gabriele

Maxim #4 – Frankly, They Don’t Give A Damn!

Consumers don’t want to hear about your company Mission and Vision. Those things are about you. They care about their experience with your product and your company. Their experiences create the brand. – Guy Gabriele

Maxim #5 – Consistency Is Not Simply Replication

Remaining consistent to a brand’s visual and verbal guidelines helps breed familiarity, but familiarity can breed contempt. Simple repetition and thoughtless replication fail to take into account the place where the brand lives: in your customers’ minds. To live a full and productive life a brand must be allowed to grow, evolve and reshape itself. Consistent relevancy is your goal. That’s why brands are managed. – Guy Gabriele

Maxim #6 – Sometimes The Baby Does Have To Be Thrown Out

Before you re-brand, re-think. A brand refresh is often considered to be the least painful way to fix a failing brand. Do a relevancy check. Are the basic underpinnings of the brand still meaningful? If so, then a refresh may be in order. If not, you need to have the courage to throw out everything and start over. – Guy Gabriele

Maxim #7 – Viral Marketing Could Make You Sick

A viral initiative should be embarked upon with great caution. The high risk (losing control of your brand expression) may be too great a price for the reward (Millions saw me on YouTube! –Whoo hoo). – Guy Gabriele

The CEO of Morpheus Software created a video that was nominated for a YouTube Video Award. His “Kitty Said What?” video, created using his company’s photo-morphing software, was viewed approximately 4.5 million times. Although it was exciting to be associated with a popular YouTube video, the resulting revenue was modest, approximately one penny for each time the video was viewed.

Maxim #8 – Pennywise Is Unwise

Examine the brand investment. Brands need the proper support and funding. If you haven’t invested in a Brand Audit recently, strongly consider it.

The economy, marketplace and your customers have changed. Your Brand expressions need to be audited on an annual basis. – Guy Gabriele

Maxim #9 – You Are Not Nike Or Apple Or Target

Remarkable marketers each one, but even if you have budgets as large as theirs, don’t do as they do – learn from what they do, and then make it your own. – Guy Gabriele

Maxim #10 – What Is Your Brand Manifesto?

“It’s all in your head.” And in your heart.

That’s where brands live. A brand is not a logo, a package, an identity system, tagline, color palette or marketing campaign. These are merely cues we give our customers to help them know us, understand us, and, yes, like us. Every brand expression is meant to help our customers shape a persona for our company, product or idea. A persona, like a brand, is not a “thing.”

A brand is created in the instantaneous assessment the customer makes upon encountering a cue. They know you in their minds and in their hearts.

“I like this.” “That’s cool.” “They suck.” “I need that.”

We all change our minds and change our feelings. That’s why we stress that branding is a process that results in a brand. And the process has to be actively managed. Win their hearts; the money will follow. – Guy Gabriele

You can follow John on Twitter: @johngreathouse.

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