I recently watched back to back videos from Larry and Sergey (interviewed by Vinod Kohsla) and from Mark Zuckerberg (interviewed by Paul Graham). While I can’t recommend you enough to watch these videos as they offer rare insights from the leaders of the most powerful tech companies out there, I couldn’t help notice how brilliant these guys are.
Throughout history, successful leaders have always derived their power from strength, ruthlessness and sometimes birth right. But very rarely from intelligence. It seems to me that it’s the first time ever that more and more powerful leaders are emerging because of their intelligence. This makes me wonder: what happens when super intelligent people are super powerful?
I am currently assessing email marketing solutions and I just found out about GetResponse. Nothing very special about this service compared to the usual suspects so I was about to close the tab on my browser but just when my mouse approached the close button, the following window popped-up.
Si participez au MooC de Growth Hacking IONISx, vous êtes normalement maintenant en train de suivre le module sur les cinq métriques pirates. Pour ceux qui ne sont pas encore familier avec le terme, celui est tiré de l’entonnoir du lean marketing, une méthodologie marketing dirigée par les données, ou data driven marketing. L’un des premiers à avoir popularisé cette méthode est Dave McClure, fondateur du fond d’investissement 500startups.
Ayant été récemment contacté par un site e-Commerce afin de les aider à faire augmenter leur nombre de clients et leur chiffre d’affaire, j’ai réalisé la présentation ci-dessous qui étudie l’utilisation des métriques pirates dans le cadre du e-Commerce.
I come from a family of retailers. My parents, siblings and close family are almost all in retail. More specifically clothing. While observing recently how (good) retail salesperson interact with customers and close sales, I couldn’t help thinking about how we could transpose the brick-and-mortar sales experience to e-commerce.
I believe the retail sales process can be divided into 4 distinct steps: Greetings, Problem-solving, Up/Cross-selling and Closing.
When you enter a store, bad salespeople say nothing (and continue doing whatever they were doing), average salespeople come to you and ask if you need help (to which you usually answer “no thank you”) and experienced salespeople just smile and say hi (making it obvious they’re here to help).
She can start chatting with you. If you’re a regular, she recognises you and engage directly. This is human interaction at its best and it can hardly be transposed into e-commerce. That is one of the reasons why e-commerce will, I believe, never kill brick-and-mortar stores. You can’t virtualise human interactions.
Let’s say that you’re looking for the perfect dress for saturday’s cocktail party. You enter the store and ask the salesperson about cocktail dresses. The average salesperson will show you cocktail dresses that you might like or dislike. If the latter, you leave. The experienced salesperson, might actually show you skirts or jeans that could fit you better than your initial idea. Again, this experience is hardly transposable to e-commerce as this would imply a 2-way, real-time, interaction between the customer and a (human or virtual) sales agent. In the case of a human sales agent, even if you provide 24/7 customer service or live chat (like Zappos), I doubt you can offer this service to all potential customers at the same time without drastically increasing your costs.
On the other hand, Artificial Intelligence technology is almost ready to put virtual sales assistant within everyone’s reach. Companies like London Brand Management, AI-Applied or Expertmaker already offer virtual shopping assistant enabling customers to get help in real-time (allegedly) the way a human sales assistant would have done it.
Up-selling and Cross-selling
Up-selling and cross-selling are sales strategy where the customers are provided an opportunity to buy related products or services when making a purchase. As the term indicates, when up-selling the suggested products and services are slightly higher priced than the one considered. Ubiquitous example of upselling is the offer to super-size in fast food restaurants. Cross-selling is simply suggesting additional items or add-ons to a customer making a purchase. The philosophy behind these sales strategies is that salespersons should not just passively take orders, but instead be active sellers.
Both up-selling and cross-selling have been used since the early days of e-commerce to drive more personalised shopping experiences and increase average order value. Now with the introduction of sophisticated web analytics and big data tools these strategies can be executed in highly nuanced and effective ways. On e-commerce sites cross-selling is offered for instance by providing customers ”better together” combos and up-selling by offering more expensive models near the shopping basket. Up-selling and cross-selling is a great example on how the retail salesperson example not only translates into e-commerce but is, with the help of data analytics, even better managed.
At the end, salespeople are here to close sales and make money. Whether you’re in the brick-and-mortar world or the e-commerce world, everything ends up at the counter (until next time of course). Depending upon the research source, the conversion rate for brick and mortar stores is at minimum 20% (much, much higher in the grocery category), while online is a maximum 3-5% (and some quote far lower numbers). Actually, the more time a customer spends in a store engaging with the retailer, the more likely they are to make a purchase. According to a Kurt Salmon study, 45% of customers who walked into a store, left within two minutes without ever engaging with the products or sales associates. But when customers were engaged by an associate or started interacting with the products, they were nine times as likely to try something on. And once they tried on a product, they had a 52% chance of buying it.
Here again, human interaction is a key element of brick-and-mortar success over e-commerce, to which you should add product interaction. As of product interaction, one way that e-commerce use to solve this problem is free shipping and return (some retailers that have stores, like Zara, even accept returns in the store of your choice). As of the human interaction, as we’ve seen before, it’s still very difficult to transpose online. E-retailers now mainly concentrate on retargeting practices to bring back customers that were about to buy but did not by serving ads related to what they were about to purchase.
May brick-and-mortar retailers rejoice, online has not killed the store! While many customers now shop online, e-commerce still cannot beat the human touch and expertise of an experienced salesperson. But new advances in Artificial Intelligence and Big Data and closing this gap. Maybe the stores will also get more and more connected?
In a recent story from Fast Company, Douglas Friedman, an accomplished photographer, was having a meeting with a well-respected advertising agency in Los Angeles. But before Friedman could show off his physical portfolio, his judges asked him about a trip he took last Christmas. “They all followed my Instagram, and that’s all they wanted to talk about,” he told Fast Company. “And it’s what landed me a big advertising campaign.”
If you’re surprised about this behaviour than you’re most certainly not aware that more than 45% of HR decision makers already use social media tools in recruitment (see source). Said differently, if you don’t market yourself online, there is a pretty good chance that you won’t be getting this job you’re looking for.
Tom Peters, an American writer on business management practices, first introduced the concept of Personal Branding in a 1997 Fast Company article. At the time, Peters was claiming that, to stand out from the (professional) crowd, you should market yourself the way big brands market themselves. If the notion was cool at the time, it is now life or death. With an increasing number of college graduates and globalisation of education, there are more and more people with a background similar to yours, competing for the same jobs (or opportunities) than you, most certainly cheaper than you.
On the other hand, if you master the Personal Branding concepts, you can really catapult your business. Take for example, now social media consultant Gary Vaynerchuk. Back in 2006, he was already transforming is father’s liquor store into an Internet wine store named Wine Library but, at the same time, was realizing that customers coming to the physical wine store were mostly coming for his advices. This is when he had to idea of starting Wine Library TV, a video podcast hosted by Vaynerchuk, featuring wine reviews and advice on wine appreciation. The show was watched by more than 90,000 viewers and helped him increase the family business from $4M to $45M.
How does this apply to you?
I count 3 situations where Personal Branding applies to you:
- Personal Branding for freelancers: since your customers buy your skills (if you’re a designer) or your knowledge (if you’re a consultant), Personal Branding allows you to get more visible to prospective customers and increase your perceived value.
- Personal Branding for executives: Whether you’re looking to get another job in the same industry or change industry, Personal Branding is a way for you to advertise your expertise in your industry and be noticed by management and potential employers.
- Personal Branding for CEOs: brand yourself like Gary Vaynerchuk to raise awareness on your business and your products.
Where to start?
Online! Unless you’re an artist or designer, LinkedIn (or Viadeo) is usually the first step in creating your online identity. Then, depending on your field, choose the best social media to advertise your expertise, knowledge and skills. I will summarise in a future post which social media to use and how to use it for your Personal Branding.
I’ve found Bud Caddell’s definition of how to find happiness in business, a great tool to find what to write and communicate about online.
If you manage to find the intersection of what you do well (your skills and expertise), what you want to do (get a manager position, change industry, get customers) and what people are ready to pay you for (skills, knowledge), then you’re certain to get awareness and improve you credibility in your given field.
If you want to know more…
Back in 2013 when I launched the StartUp42 accelerator in Paris, I received so many “oh, another accelerator” comments that I was really wondering if I wasn’t too late in that space.
Since then, TheFamily, 50Partners and Microsoft Ventures launched, the city of Paris opened new incubators and Xavier Niel, France’s telecom mogul, announced 1000startups, the soon to be largest startup incubator in the world.
Corporates like media company Canal Plus or telecom giant Orange also opened their own incubators. Even the French government announced a 200M€ investment plan for private accelerators throughout France.
Are we in an accelerator bubble?
Olivier Ezratty, a long-time and well respected commentator of the French startup ecosystem seems to think so, based on his recent article (in French) about our ecosystem being overheated. And, apparently, this is not just in France. Silicon Valley entrepreneur and strategy consultant, Sramana Mitra, also recently wondered about being in an accelerator bubble. I’m not even talking about bloggers like Craftsmanfounder’s Lucas Carlson with his “incubators are bullshit” piece. And more are coming.
While the exact number of accelerators is unknown, f6s.com, a website that provides services to accelerators (including us at StartUp42), lists more than 2,000 worldwide. In a HBR article, Sramana Mitra even talked about 7,500 business incubators globally. In Paris, the city hall’s MyStartupInParis lists 44 incubators as of today and I’m coming across individuals and corporations who want to launch their own startup program literally every day. So no questions asked here: we are definitely in an accelerator bubble.
Is it a bad thing?
Question: can you tell me which of the two pictures below is a startup accelerator?
None but anyway you wouldn’t know just by looking at the pictures. The main problem with having too many startup programs is that entrepreneurs don’t know which one to choose, especially if they decide to give away equity to the program. It’s like choosing a university after high school.
Each accelerator has its own model (non-profit/for profit, equity based or not, investing or not investing), its value added and it’s rather difficult to judge for organisations that mostly did not exist 3 years ago. The problem when it’s difficult to judge the quality of an accelerator is that entrepreneurs might lose some precious time (and sometimes equity) in a program that does not bring enough long-time value.
Without disrespecting some programs, I clearly see the difference between programs that are entrepreneur-friendly, mentorship driven and focused on results, compared to others that offer glorified office space and mentorship that look like (and sometimes is) McKinsey style consulting session.
But this is hard to see from the outside. This is clearly one of the reasons that pushed us to be a member of the Global Accelerator Network, which ensures that all its accelerator members fall into their vision (which I share) of acceleration.
Do we need startup accelerators?
Business schools emerged in the second half of the 19th century to meet an educational need not provided for by other institutions. Accelerators are trying to fill a similar gap today. So, while b-schools train future corporate leaders, accelerators train current entrepreneurial leaders. Accelerators are today’s e-schools. By providing hands-on advices from experienced mentors and networking opportunities to founders, especially those not very familiar with business topics (like technical founders), accelerators really fulfil this “educational” mission.
Accelerators are also a great way to shake up an ecosystem and help emulate entrepreneurial vocations. But, on top of that, what I’ve found most valuable for the founders we’ve helped so far, is endorsement. Entrepreneurship is hard. You make a lot of sacrifices, especially social ones. Being selected in a renowned program, even if you’re still not making money, is already a great sign sent to your family and friends that you’re not doing all this for nothing.
Will it stay the same?
I think we’re going to see more and more accelerators in the short run. Driven by startup hype (and probably bubble) and growing interest from corporations (see this good piece by @jd on the subject), startups will now have more and more options in terms of support. Their success in the long run will depend on their business model.
Equity-based accelerators will need to have several successful exits to sustain their growth and convince LPs to keep investing (there will always be investors) while, for other models (like non-profit), it will really depend on the accelerator’s capacity to show value to their sponsors (or customers) over time. As of corporate accelerators, I doubt most of them will still exist in the next 3 years as they’re usually considered a cost and their existence is almost always tied to one executive sponsor internally (that will eventually leave).
As of StartUp42, our sustainability is tied to our ability to select and help future successful startups that will in return help the organisation, while at the same keep convincing sponsors that our position in the ecosystem (especially developers’ groups) is still relevant over the years.
I’m currently working with my pal Pierre Conreaux, on a Growth Hacking MooC that will be available to french-speaking students and professionals on May 12th, 2014. This course will be my first real online course and one of IONIS Digital Learning‘s first classes.
Growth Hacking, you said?
Yes, growth hacking is one of these new buzzwords that any self-respecting startuper and innovator has to use, together with design thinking, lean startup and customer development. But growth hacking is more than just a fancy name. It symbolises the profound impact that Internet has made on traditional marketing. Growth Hacking is 21st century marketing.
What’s a growth hacker?
A growth hacker is a person whose true north is growth. Everything they do is scrutinised by its potential impact on scalable growth. But growth hackers are also obsessed with metrics. Having scalable growth is great but understanding very accurately what actions led to the growth is better. That’s the hacker’s part of growth hacking.
Can I know more?
Yes! Just wait until May 12th for the course. Also, if you feel like helping out in the construction of the course, don’t hesitate to shoot me an email on daniel [at] qanubin [dot] come
In this great video from Stanford University’s Entrepreneurship corner, David Heineimeier Hansson, the creator of Ruby on Rails and partner at Basecamp (formerly 37signals), says that planning is guessing, and for a start-up, the focus must be on today and not on tomorrow.
He argues that constraints–fiscal, temporal, or otherwise–drive innovation and effective problem-solving.
The most important thing, Hansson believes, is to make a dent in the universe with your company.
Companies can’t survive without innovating. But most put far more emphasis on generating Big Ideas than on executing them—turning ideas into actual breakthrough products, services, and process improvements.
That’s because “ideating” is energising and glamorous. By contrast, execution seems like humdrum, behind-the-scenes dirty work. But without execution, Big Ideas go nowhere.
Practical and provocative, this book takes you step-by-step through the innovation execution process—so your Big Ideas deliver their full promise.