Category: Articles

September 5, 2018

“What is Strategy?” at Silicon Valley Code Camp 2018

I’ve been invited to speak at Silicon Valley Code Camp again – this time in the business management track. I’m not sure if I’ll be on the big stage live-streamed again but I’m excited to give my “What is Strategy?” talk for the 4th or 5th time and to continue to incorporate the incredible feedback I’ve been getting.

I hope to run an improved version of the simulation I ran with the MBA class at Saint Mary’s earlier this summer but I’m not sure I’ll have enough time during the presentation (or even between now and then).

The dates for the weekend are Oct 13-14, 2018 at PayPal Town Hall in San Jose, Ca. I’ll post my specific speaking slot and location once I have that info.

Note: I wasn’t able to speak or attend last year so I haven’t seen the new space but I understand that there’s only room for about 800 people now (vs 3k previously). I don’t think they’ve sold out yet, but they definitely will.

July 24, 2018

Controlling Outcomes by Controlling Table Stakes

Nielsen estimates that 84 million people watched the first presidential debate of the 2016 election. That was 36.4% of eligible voters and 60.5% of actual voters. Given how many US voters watch the presidential debates, participating in the televised debates is considered a table stake for having a shot at being elected president.

The official sounding ”Commission on Presidential Debates” decides who gets to be on the debate stage. It’s formation and stated purpose is interesting:

After studying the election process in 1985, the bipartisan National Commission on Elections recommended “turning over the sponsorship of Presidential debates to the two major parties”. The CPD was established in 1987 by the chairmen of the Democratic and Republican Parties to “take control of the Presidential debates”. The commission was staffed by members from the two parties and chaired by the heads of the Democratic and Republican parties… (wikipedia)

The League of Women Voters had been the previous host of the debates.

In 1988, the League of Women Voters withdrew its sponsorship of the presidential debates after the George H. W. Bush and Michael Dukakis campaigns secretly agreed to a “memorandum of understanding” that would decide which candidates could participate in the debates, which individuals would be panelists (and therefore able to ask questions), and the height of the lecterns. The League… released a statement saying that it was withdrawing support for the debates because “the demands of the two campaign organizations would perpetrate a fraud on the American voter.” (wikipedia)

Ross Perot’s 1992 bid for president as an independent was disruptive. Perot took 19% of the vote and many believe that had he not run, Republican incumbent George H. W. Bush would have been re-elected instead of Democrat candidate Bill Clinton.

The CPD excluded Perot from the televised debates in 1996.

Changing the Table Stakes

Four years later, the commission changed the rules of the game entirely, requiring that candidates have at least 15% in 5 national polls in order to get on the debate stage. Which polls count are consider to be “national polls”? The CPD decides.

The creation of the Commission on Presidential Debates (a cartel) and the 15% rule clearly benefit the candidates of the two major parties in the United States at the expense of all third-party (or independent) candidates and the voting populace. This legal collusion has been extremely effective at controlling who has a serious shot at running for president and who ultimately becomes president.

So not only is being on the debate stage a table stake, but having 15% in “5 national polls” approved by the CPD is considered a table stake as well.

When structured in this way, table stakes can be a form of moat or barrier to entry. So whoever controls the table stakes can have tremendous control over the outcome. Check out Jeffrey Pfeffer’s Power: Why Some People Have It and Others Don’t for a few great examples of establishing and controlling tables stakes in corporate environments – even if you’re at the bottom of the power hierarchy.

July 16, 2018

Lessons From Build-A-Bear’s Brilliant Blunder

DIY toy taxidermy shop Build-A-Bear had decreed that Thursday, July 12, was Pay Your Age Day in shops across the U.S., Canada, and the U.K. The self-explanatory event lets bear lovers make a furry friend, stuff it with love, and pay a dollar amount that matched their current age—a payment model that vastly favored spoiled 1-year-old knee-biters over 50-year-olds who just needed something to love.

What could go wrong‽

The 21 year old company was likely planning on leveraging nostalgia from grandparents and parents while building loyalty with a new generation of toy-lovers. Now was an especially great time for this campaign as Toys”R”Us has shut down hundreds of stores worldwide and there’s marketshare on the table to capture – especially for a focused, experiential brand like Build-A-Bear.

It was a good plan and a great marketing idea, save for one tiny little problem—the fans loved it too much. In fact, they loved it so much that they started lining up before Build-A-Bear Workshops opened in the U.S. The long lines made the company nervous about crowds and maybe bear riots, so they sent out a statement on social media saying it would limit the number of people who could take advantage of the deal due to safety concerns.

Customers were pissed – especially those who lined up around the block. Plus no one wants to hear you make excuses, blaming “safety concerns” and “local authorities.”

Sadly, all Build-A-Bear had to do was test this genius, goodwill generating campaign at a single store and then in increasingly larger markets to work out the kinks. To make matters worse, Build-A-Bear didn’t jump on the bad press and make anything of it.

Takeaway: Launch slowly – even if you have a great idea – so that any mistakes in your plan or missed assumptions don’t spiral out of control.

June 14, 2018

The Boring Company Not-A-Flamethrower

The Boring Company Not-A-Flamethrower was casually announced by Elon Musk in this Dec 10, 2017 tweet.

The remaining promotional hats sold out quickly.

Seven weeks later:

100 hours later:

The Boring Company – Musk’s underground drilling company – sold 20,000 Flamethrowers in about 100 hours. That’s $10 million in top line revenue and millions more in free press and captured mind space.

Opps.. It’s not called a Flamethrower. It’s a “Not A Flamethrower” – a brilliant regulatory decision, drawing even more attention (and desire) to Musk’s scheme:

Musk drew some heat for this move – many criticizing him for making a flamethrower for his “rich friends” instead of giving a bunch of money to charity or ending world hunger.

What the non-strategic thinker missed was that Elon wasn’t making a toy for his friends. They have plenty of toys. This was a brilliant marketing stunt.

Of course it’s not just a stunt. The flamethrowers were real. And so is the deal the company just signed with the city of Chicago. The Boring Company will build an 18 mile high-speed (150mph) skate-based tunnel transit system between O’Hare International Airport and downtown Chicago.

Bottom Line: If Musk can get people excited about city planning and tunneling, you can get people excited about what you’re doing.

Entertaining review of the Not-A-Flamethrower pickup day in LA.

June 14, 2018

Capitalizing on Changing Beauty Norms

It’s one thing to be obsessed with our looks, our beauty…

As the demands of beauty rise, not only do we have to do more all the time, but their nature also changes. Beauty becomes more important. It has begun to function as an ethical ideal. Beauty is often what we — rightly or wrongly — value most. It is what we think about, talk about and what we spend our time and hard-earned cash on. If we are good at beauty, we feel we are good, virtuous; if we are bad, we feel we are no good, almost no matter what else we do. We judge others too on how they look. We make assumptions about what people are like and how successful they are. We read character traits directly from looks, and we start doing this as young as four years old.

…but it’s another thing to confuse beauty practices for health practices.

Consumers are allowing themselves to be manipulated by obvious marketing tactics and the beauty industry is capitalizing on the opportunity. These marketing and advertising tactics remind me of the diamond industry, which I’ve written extensively about.

Let’s take hair for instance. “Shaving, plucking, waxing and lasering” have become so normalized that hair removal is no longer a “beauty practice” but has been “redefined as a hygiene practice, as part of so-called “routine” maintenance.” And these redefined social norms aren’t just for celebrities – they’re for everyone.

Hair removal becomes something we have to do, a requirement. It is not an option to refuse — like teeth-cleaning, but without any of the health benefits. Beauty practices are indulgent and optional; hygiene practices are necessary and required. You don’t have to do a beauty practice; you do have to do something that is required to meet minimum standards, just to be normal. Once the shift to routine is complete, the fact that this is a demanding beauty practice becomes invisible.

The Beauty Market

The Economist reported in 2003 (Real Men Get Waxed) that the US male grooming market was $8 billion. 15 years later, that number has nearly tripled and is on pace to grow by 12% annually.

(source)

Bottom Line: Societal norms and their changes drive huge shifts in spending – especially when there’s strong emotional connection or potential for embarrassment. What shifting & emotionally-charged norms can you capitalize on?