#7. PRACTICE THE ART OF COLLISION

The Reese’s Peanut Butter Cup is a metaphor for life. What seems completely new is often just an unexpected combination of the familiar but previously disconnected. This is Innovation 101, but too often we forget, and think the one asset we have is the answer, rather than asking what we can bundle it with to transform its value.

– Mark Payne on Blogging Innovation: The Ten Tenets of Transformation – Innovation blog articles, videos, and insights

Background

In my previous post, I described how I was struggling with my lean start-up sales and marketing efforts on seemingly two separate fronts. In keeping with my perseverance theme, here’s how I combining these two  into one complimentary offering, yet still affording me the possibility of either one, or, better yet both launching a business.

Ingredients

1. My peanut butter – AnotherSocialEconomy: A service that anonymously connects consumers – who already know exactly what they want with local retailers – who actually have it in stock. It’s like Google Local Shopping only way simpler and more accessible for small and medium-size businesses (SMB).
2. My chocolate – edu.cyn.in: A social software platform enabling collaboration not just within the class, school but across geographies. It’s like Facebook, YouTube, Flickr, MSN, Twitter, Blogger, Wikipedia, iTunes, Digg, Google Calendar and more, all in one integrated and monitored web site.

Directions

1. Offer limited edu.cyn.in membership to local schools and organizations providing extra-curricular activities for free.
2. Offer limited edu.cyn.in education and mentoring services to students, teachers, staff and parents on how to get the most of the platform with regard to sharing, commenting and rating content – for free.
3. Offer limited edu.cyn.in education and mentoring services to students, teachers, staff and parents on how to get the most of the platform with regard to self-organizing projects and events thereby reducing phone calls and oodles of emails with attachments.
4. Add AnotherSocialEconomy Widget to edu.cyn.in.
5. Offer those edu organizations free local Sponsor links in edu.cyn.in.
6. Offer those edu organizations the opportunity to become AnotherSocialEconomy Retailers, Influencers, Resellers and/or Referrers.

(Should) Yield

Our Reeses Pieces should consist of a hyper-local (thanks Flack Maguire) online community of consumers and retailers/merchant/service providers. If we succeed in educating and mentoring are target edu.cyn.in audience, we could have one, or, two adult pair of eyes for every student pair of eyeballs. So one class of 25 students could yield anywhere between 2 and 50 additional eyeballs on edu.cyn.in. The better we educate and help folks adopt the social software, the greater chances we have of increasing those hyper-local eyeballs. The more eyeballs, the greater the chances we have of getting folks to use AnotherSocialEconomy’s Widget. More local consumers, more local merchants.

Additionally, since we’re also Cynapse Reseller, we’ve also introduced a whole new crop of highly qualified prospects into our sales funnel.

Stay Tuned

Please feel free to comment below and let me know your predictions. Will our ingredients yield another Reeses Pieces, or, is this plan going to curdle? Just remember, the alternative approach could be to pay Google AdWords $7500 a month for pay-per-click search engine marketing (SEM) and pray that’s cheaper than the time and hosting frees we’re currently investing.

This year, 46% of retail sales will be influenced by the web – but more than 90% of total retail transactions will occur in-store, from small neighborhood boutiques to national chains *. No matter where our users are shopping, we want to help them find your products.

– Google Product Search

Google Product Search

OMG this is amazing. I’m now competing with Google!

Just when I was killing myself with how to market AnotherSocialEconomy, I find this beta service from Google. Do you know what that means? Yes, Google already has all the eyeballs in the universe and yes, they could blow me out of the water at will.

But what that also means is that I no longer have to worry about finding my target audience. You see AnotherSocialEconomy brings retailers’ available supply to consumers’ demand. Pretty vague, eh? Try finding a good mix of AdWords keywords for a local buying network like that. It’s nuts. More importantly, it’s hugely expensive. Most importantly, customer cost of acquisition is astronomical.

With Google out there now, all I have to do is set my Google Alerts and other social media listening tools to “Google Local Shopping” and “Google Product Search”.  I could follow their Buzz  in the wake of their Wave & target my pitches.

For Starters

Not being a Merchant, I highly doubt I’ll ever manage to infiltrate their beta service. No matter. There’s plenty of others out there willing to share their experiences and opinions, such as, Google Local Shopping Tells Customers You Have It In Stock, Google’s Local Shopping Feature Now Open to Small Businesses and Google Local Shopping: cool new tool | OregonLive.com.

And that’s just cherry-picking. Plenty for me to research & plenty for me to post comments on.

Details… details… details…

As Lisa Barone says about Google Local Shopping:

It does seem like a small amount of work to get listed; however, anything you can do to make your products more available and searchable is a good thing.

AnotherSocialEconomy’s barrier for adoption is an email account and optionally, a modern browser with an Internet connection. That’s it! No multiple Merchant Accounts. As a matter of fact, registered Retail Sales Associates could also use their Twitter account / text messaging (SMS), Jabber Instant Messaging (IM) – like Google Talk, as well as, an Androida app. Basically, anyone with a smartphone is literally in business. There’s no XML data feeds to set up. No inventories to maintain.

Just details? Maybe, but the feedback I’ve gotten so far is that small/medium businesses (SMB) are living on smaller and smaller margins.  So the fewer details, the less investment in the service, the greater the return on investment. And vice versa.

AnotherSocialEconomy is not free

Consumers pay a token fee for requesting goods/services – Demand. And Retailers pay a token fee, as well, for proposing their Supply. Why? Well for starters, we hope to reduce the signal-to-noise ratio. Less noise going to the Retailers, means higher quality sales leads. Higher quality sales leads means higher quality Proposals going back to the Consumers. Higher quality Proposals, results in greater probability of closing sales.

But wait there’s more…

Ok, so AnotherSocialEconomy isn’t free. But it is another social economy. That means that it shares with its community members through its the Influencer, Reseller and Referrer programs.

Stay tuned

Be sure to come back & visit as I ride in the wake of Google’s Local Shopping wave trying my best to compare our competing services. Please feel free to share your own experiences, opinions and comparative thoughts.

#7. PRACTICE THE ART OF COLLISION

The Reese’s Peanut Butter Cup is a metaphor for life. What seems completely new is often just an unexpected combination of the familiar but previously disconnected. This is Innovation 101, but too often we forget, and think the one asset we have is the answer, rather than asking what we can bundle it with to transform its value.

– Mark Payne on Blogging Innovation: The Ten Tenets of Transformation – Innovation blog articles, videos, and insights

Worlds Apart?

The Chronicles

Peruse my blog and you’ll see I pretty much chronicle my experiences as an ultra light, non-funded, start-up entrepreneur. You’ll also see that I divide my time, not necessarily equally, among two main efforts: 1) called :Twetailer, which has morphed into :AnotherSocialEconomy and 2) :edu.cyn.in. While both were born out of a burning desire to correct something I found profoundly wrong, yet so “simple” to fix, I’ve always considered them to be worlds apart. That was until I tried to fill a void in my execution plans – sales & marketing. Now I know these are not subjects to be treated lightly but, in my own defense, I was primarily concerned about the Guy Kawasaki lesson How to Change the World: Defensibility. With all that reasonably taken care, I started educating myself on Search Engine Marketing (SEM). As a matter of fact, my very last post was how I used that new knowledge to rethink AnotherSocialEconomy’s :Widget. Who knew? It was not only another entry point/channel/stream into the system (remember, I’m a techie) but it actually competes - quite nicely, with Pay-Per-Click (PPC), Cost Per Click-through (CPC) and Cost Per Action (CPA).

Selling sucks

In the early days, I tried getting schools to pay for the edu.cyn.in service but, being a techie and not a sales rep, failed. There was either not enough budget to go around, not enough qualified staff to support the service, or, simply the FUD Factor (Fear Uncertainty and Doubt). But I’m a persistent bugger and based on my prior experience with social software on the Internet, within enterprises and even within schools, I  just couldn’t give up.

I knew the service was greatly appreciated by the kids. I knew the service was greatly appreciated by educators - albeit a special select few. And as a parent, I also knew the frustration of organizing events, committee meetings, car pools, other extra-curricular activities and even purchasing related goods and services.

And on top of all this pressure to sell edu into schools, I was still struggling to sell AnotherSocialEconomy – which needed a way to reach retailers & consumers.

Started getting that sinking feeling

Things just seemed to be getting worse.  Was I going to be one of those start-ups with a great idea – in my case, two great ideas that no one other than myself, Dom & a few others knew about? It’s not like I don’t know my limitations.  I think I’m a pretty good technical business analyst, software product manager, maybe even a social media manager. I love pre-sales demos, presenting at shows and conferences, have a pretty cool online education story to tell, love story telling and I’m pretty pleased with my stickman videos and presentation creations. But I just can’t seem to get past this marketing & sales hump. I’ve tried to bring in others but it just hasn’t gelled yet. Maybe some seed money would be the way to go. Either way, if I don’t get any traction, I’ll probably have to drop edu. Yikes! That would really hurt because not only have the Cynapse folks been more than fair with me (I’m also a struggling Reseller), it would mean that my daughter Sara & friends would lose the service.

Perseverance

Back in my IBM days, Perseverance was not only a welcomed characteristic, but encouraged too (by some). In a company of over 390,000 (at the time), it was all too easy to say things like; “I’m waiting for so-and-so to get back to me”, or, “Today’s first agenda item is to decide when we’ll meet again to discuss this matter”. If you truly wanted to make a difference, you had to persevere – you had to press on people, press a few buttons, or, as my wife Anna says, I just had to continue being the real pain in the ass I can be.

Dropping edu, dropping, AnotherSocialEconomy, getting a real jobare options I’m just not ready to accept yet. What I really have to do is find a better way to persevere.

Suggestions?

Do you have any suggestions on how I can make edu & AnotherSocialEconomy work for each other? Stay tuned for Part 2.

CPM: Cost per thousand impressions
CPC: Cost per click-through
CPA: cost-per-action
Conversion Rate: The percentage of visitors who take a desired action
Customer Acquisition Cost: The cost associated with acquiring a new customer

– Internet Marketing Dictionary

What it feels like trying to figure out Search Engine Marketing.

Searching for Search Engine Marketing

I recently signed up for Google AdWords and started playing around with its campaign site. After twenty, or, thirty minutes, I started getting a splitting headache and through frustration, closed my Google Chrome browser and defiantly opened up Firefox. Now to be fair, I had no business signing up for AdWords, since I can’t even spell S-E-M (SEM) but, I was determined to get a better understanding of what I could be missing. Being a start-up and desperate for bootstrapping sales, it seemed only logical to investigate.

Google Sales to the Rescue, sort of

The very next day I received a call from a Google Sales Rep – Terry Dewey, who was incredibly helpful, and patient, in walking me through the site & giving me my very own S-E-M 101 Course. But, by the end of the call, there was one thing terribly obvious to both of us. If I couldn’t manage to spend $7500 a month on AdWords advertising, then there simply wasn’t any point in getting started.

WCT: Wholly Crap Through

At $7500 a month, with an average of 3% conversion rate, my customer acquisition cost was probably going to cost me more than I was going to make.

Reality Check and The Referral Engine Bibles

So needless to say, I’ve abandoned my jump into SEM and have returned to the teachings of Guy Kawasaki’s Reality Check & John Jantsch’s The Referral Engine. If I understand correctly, the key to success is sharing with those who can help. So that’s the motivation behind the AnotherSocialEconomy Reseller and Referrer programs. Another lesson learned, is that I have to make it real easy for those folks to pass the message along and that’s why we developed the :Widget and the :Bookmarklet.

The Ultimate Cost Per Action (CPA)

CPA offers are the truest form of performance marketing. Rather than basing payouts on bulk traffic which may or may not convert, cost per action refers to compensating affiliates/publishers for real sales, leads, and other conversion metrics. This is often the most empowering method for advertisers, as they are able to gain direct results from their advertising budget. The CPA model is a risk-free approach to advertising that usually targets niche specific publishers or clever affiliates.

– Peter Hamilton

According to Rubicon Consulting & Online Communities and Their Impact on Business: Ignore at Your Peril, where they found 10% of the community members contribute 80% of the content. These Most Frequent Contributors (MFCs) are second to word of mouth when it comes to influencing others.

So for starters, here’s how our Widgets whip click-through and pay-per-click advertising for Influencers (MFCs).

1. Prep work:
   1. Become an AnotherSocialEconomy Reseller
   2. Post an AnotherSocialEconomy Widget on your blog, or, web site. The widget can be customized to your site’s look and feel so it doesn’t distract your readers.
   3. Contact Retailers, suppliers, manufactuers, brands, distributors, and anyone else in position to close a sale – locally, or, online and have them register as AnotherSocialEconomy Retailers.
2. Blog, review, rate, do whatever you do to contribute valuable content.
   1. Your readers can then fill in your site’s Widget to purchase whichever goods and/or services mentioned.
   2. AnotherSocialEconomy will then notify all registered Retailers within range of the Consumer’s location and ask them if they have the goods/services available for sale.
   3. Those Retailers with inventory on hand, then propose their goods to the Consumer via AnotherSocialEconomy.
   4. Once Consumers confirm, they can then proceed to the local Retailer and pick up their goods.

Bottom line

AnotherSocialEconomy is about connecting serious buyers with local retailers. So only those Consumers interested in buying, will click-through. And only those Retailers in a position to close the sale, need to reply. There’s no conversion rates, or, customer acquisition costs to worry about. Retailers only pay when they close the sale.

But wait, there’s more …

And what about that kind Influencer? Since they Referred the request via their site’s Wdiget, they get to share in some of AnotherSocialEconomy’s proceeds. And in this particular scenario, since they- as a Reseller signed up the Retailer who made the sale, then they again, get to share in some of AnotherSocialEconomy’s proceeds. Now that’s some CPA, eh?

Thanks

I’d like to thank Michel Drouin for connecting the dots between click-through advertising and the value proposition of AnotherSocialEconomy’s :Widget.

Stay tuned and I’ll let you know how this one works out.

Golden Rule of Branding:

1. Choose a name that is your URL
2. Don’t choose anything that paints you in a corner. With the word “tweet” in it, it’s painted into a corner.

– Mark Suster, referring to TweetUp at 6:11 into This Week in Venture Capital #2 with Mark Suster.

In the beginning

There was something familiar about Twitter back in December 2008 when I posted My Five Ws of Twitter in less than 10 minutes (video included). It wasn’t necessarily the short messages – like text messaging (SMS), even though those were its roots. It wasn’t so much the chat-like short messages either. It was something I recognized as an IBM MQ Series feature call Message Persistence – basically meaning, the messages are saved on some hard disk on some server somewhere on the network. So what? So as opposed to email, text messages, or, chat messages that are 1) unless they’re spam, are sent to a select group of people, and 2) can be deleted, Twitter messages are potentially in the public domain, persisted (save to some disk) and searchable.

The original idea behind Twetailer was to expand on those persisted tweets, as if they were MQ Series persisted messages and use them as a poor-mans’ communication channel. And just like MQ Series with its ability to have operating system agnostic clients communicating to the MQ Series server, there were already a whack of Twitter client applications out there like TweetDeck, Twhirl, Seesmic, etc. That way Twetailer could focus on the transaction engine and let its users choose their favorite client app. We even had free text messaging (SMS), courtesy of Twitter.

Hence the name Twetailer, which is short for Twitter Retailer.

Sounds like a plan, eh?

But Dom Derrien was concerned about relying on Twitter for these persisted messages, so, we decided to persist our own. Still true to our Twitter inspiration, we built a transaction engine that runs in 140 characters, or, less. As a Consumer, your initial request looks like:

d twetailer wii console locale:1235 us range:25 mi expires:2010-12-23

and subsequent requests could look like:

d twetailer rent twilight dvd

since we already knew your previous preference for location and default the expiry date to one month in the future.

Oh, by the way, Dom was right! To date, Twitter does not persist searchable messages beyond a few days, at best!

Too cryptic

While everyone we yakked to about the concept Where Demand comes to meet Supply loved it, they either didn’t tweet, or, thought the messages were too cryptic.

How to paint yourself out of a corner

Twitter is still a force to be reckoned with. But so is email and so is the web and so is text messaging and so is Facebook and so is Google Talk and so is iChat and so is Android and so is iPhone and so is yada yada yada. Cryptic, shmyptic!!! Our Twitter-inspired transaction engine has an open application programming interface (API) allowing us, or, you to build more client apps than ever before. Nonetheless, we have to heed the outside-in advice of those we respect. So we’re keeping http://twetailer.com as our project name but moving forward with http://AnotherSocialEconomy.com.

Thanks Jason, Mark & ThisWeekIn

A big thanks to Mark Suster, Jason Calacanis and the rest of the crew at ThisWeekIn for helping us paint our way out the corner. I’m pleased to say we have gone from the single Twitter Stream to multi-stream and from Twetailer to AnotherSocialEconomy.

Thoughts

Has anyone out there been faced with a similar situation? Did you stick with your ‘program”, or, re-positioned yourself?