“I know half the money I spend on advertising is wasted, but I can never find out which half.” John Wanamaker
If Mr. Wanamaker had access to the Internet, his oft-repeated quote, would have never been uttered. In the “good old days”, pre- 1999, advertising dollars were largely gambled away.
As noted in Pour and Stir Part I, the key to the successful execution of this strategy is managing the following equation:
The cost to acquire a customer < lifetime value of a customer
This entry focuses on how you can minimize your cost per customer acquired by systematically establishing the infrastructure necessary to track the results obtained from a variety of online and offline marketing vehicles.
Note: This is Part I in a three-part series on The Perfect Business Model. Click here for Part II, and Part III
Authentic, hand-crafted Persian rugs always include intentional imperfections. They are said to be, “Perfectly Imperfect, and Precisely Imprecise.” The same is true with many crafts and architecture created in Muslim cultures.
I am not a Muslim scholar, but a layman’s interpretation of this tradition of intentional errors is that it arises from the belief that attempting to emulate God’s perfection is sinful.
Fortunately, entrepreneurs need not fear running afoul of this sin when crafting their business plans, because all of them are inherently imperfect and imprecise.
What do Warren Buffet, Martin Luther King, John Wayne, Walt Disney, Harry Truman and Wayne Gretzky all have in common? In addition to all of them reaching the pinnacle of their chosen professions, they also all started their careers performing the same job.
All of these extremely successful individuals were paperboys*.
At its peak circulation in 1969, the weekly newspaper Grit had a circulation in excess of 1.5 million. Each paper was delivered by a child and all of the money was likewise collected by children and sent to Grit’s main office by snail mail. Despite its inherent inefficiencies, Grit was able to sustain a profitable business reliant largely on youthful labor for over 80-years. Surely a savvy, modern-day entrepreneur can utilize online tools to leverage young peoples’ collective energy and fervor.
This is part III of a three part series. Click here for Part I and Part II
John Fitch was first. He spent the majority of his adult life fruitlessly attempting to capitalize on the novelty and uniqueness of his invention. Unable to raise funds from wealthy individuals, he solicited $300 from a hodgepodge of small businessmen, including tavern owners, grocers and physicians.
In a matter of months, he developed technology that was superior to that created by the world’s leading scientist over the prior 15-years, despite his lack of a formal education.
He debuted his technology in Philadelphia at the 1787 Constitutional Convention. It exceeded his expectations and thrilled those who witnessed it, including a number of prominent Founding Fathers. However, he was still unable to secure adequate funding to commercialize his technology.
Fitch spent the next three years traveling the country repairing clocks as a means of surviving, all the while saving money for the eventual launch his venture. In 1790, he began offering a service that eventually transformed world commerce and generated trillions of dollars of wealth. Unfortunately for Fitch, his adVenture folded 18-months after it began.
In 1798, at the age of 55, a frustrated, destitute Fitch scrimped together enough money to purchase a handful of opium pills, which he used to end his life. His suicide note was prophetic:
“The day will come when some more powerful man will get fame and riches from my invention, but no one will believe that poor John Fitch can do anything worthy of attention.”
In his premier film appearance in the blaxploitation send-up “I’m Gonna Git You Sucka,” Chris Rock inadvertently illustrates a key pricing issue faced by most entrepreneurs when they initially launch a new product or service.
Watch this 93-second clip and see if you can identify the pricing pitfall addressed in this humorous clip. Caution: the clip contains a bit of profanity. It is Chris Rock, after all.
Note: This is Part II in a three-part series on Fast Followers. Click here for Part I and Part III
When Superman was introduced in 1939, he was truly a breakthrough comic book character. At the time, most comic heroes were very human, such as Dick Tracy, The Lone Ranger and Tarzan. The very attributes which caused Superman to be unlike anything that came before subsequently became clichéd conventions, which makes it difficult for modern audiences to appreciate just how startlingly different Superman was at the time of his debut. His super powers, costume, dual identity and crime-fighting focus have been endlessly imitated, sometimes a bit too closely.
Within months of Superman’s first appearance, Fox Features Syndicate created Wonder Comics, starring “Wonder Man.” As shown at left, he had super powers, wore a red uniform, fought crime and had a large “W” on his chest. Sound familiar? The public rejected this dismal imitation and the comic sold poorly.
Copies which lack originality are similar to those successively made on a Xerox machine. Each copy is an inferior imitation of that upon which it is based.
Note: This is Part I in a three-part series on Fast Followers. Click here for Part II and Part III
Lou Pearlman, owner of Trans Continental Airlines, watched five teenagers crowd into one of his private planes. He asked himself, “How the hell can these kids afford to charter a private plane?” The answer surprised him.
The “kids” were the pop singing group “New Kids on the Block” (New Kids or NKOTB), which at the time was one of the most successful musical acts in the world.
Pearlman was unimpressed with the group, but his chance meeting with them sparked an entrepreneurial adVenture. He wondered, “How hard can it be? Get some cute kids who can sing, teach them to dance and unleash them on the public.”
With no experience in the music industry, no musical talent and no fear, he developed musical groups and solo artists that collectively sold over 160 million records, twice as many as NKOTB. Pearlman’s most successful artists include The Backstreet Boys, ‘NSync, Aaron Carter and Jordan Knight.
Whether or not you like or even respect the music created by Pearlman’s performers, the manner in which he conquered the music industry offers relevant lessons for any entrepreneur attempting a fast-follower market-entry strategy.
Under the headline “The Cooling World,” a 1975 Newsweek article cited National Oceanic and Atmospheric Administration research that showed a drop in North America ground temperatures of one-half of one degree between 1945 and 1968 and satellite photos that revealed a “sudden, large increase in Northern Hemisphere snow cover.” The article went on to propose that the world was entering a “little ice age.”
My intent in referencing this egregious article is not to debate “global cooling” – I mean “global warming” – I mean “climate change.” Rather, it is to highlight that journalists often have a very hopeless world view. Irrespective of the facts at hand, they often relish in proclaiming mankind’s imminent demise. Let’s face it, sex sells and so do doom and gloom.
Fortunately for mankind, entrepreneurs do not hope they can make an impact. They act. Improvements in mankind’s lot arise from entrepreneurs who ignore the headlines, hope less and act more to improve their lives as well as the well being of those around them.