The New Funnel

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By Tom Fedro

I remember back in elementary school (okay, vaguely—but no jokes about how long ago that was, please) when I first learned about converting measurements.  Back then, we’d spend forever turning inches into feet, feet into yards, cups into pints, pints into quarts and every other measurement of volume, distance, and time into other measurements of volume, distance and time.  Then things got crazy when we had to learn how to change centimeters into meters, milliliters into liters, and so on.  Want to drive a kid insane?  No problem.  Add in converting from standard measurements to metric system measurements.  I remember a test in which we had to measure various shapes in order to discover their area.  We had to be careful to use the correct ruler (some of us, the correct side of the ruler) so we measured in the right system.  If you measured correctly, you got good marks.  If you tried to use a standard ruler for a metric question, you failed.  If you didn’t use the correct formula for determining the area of a square, you failed.

Well, you probably know by now that I’m not just reminiscing.  I belong to about twenty news feeds too many, and on one of them, a marketing piece popped up.  With my background in marketing, sales, and business development strategy, it’s hard for me to pass up on clicking on a title that involves marketing.  This particular post declared that the funnel model of marketing is dead.  That’s right.  Dead.  Not in trouble, not sick.  It’s dead.  I read with interest, and I’m always amazed at how quickly business experts move to declare the end of something.  You see, I don’t think the funnel is dead at all.  I think it’s just been converted. A short while ago it was liters, and now it’s gallons, or something like that. Just as a European in the United States has to put some thought into distances expressed in miles before beginning a journey, marketing executives now have to put some thought into how they measure marketing effects and a customer’s journey into the funnel.

The funnel represents a fairly clear understanding of the path from a potential customer to an actual customer, but the AIDA (Awareness, Interest, Decision, Action) process is no longer influenced in the same manner it was a few decades ago or even one decade ago.  I find it interesting that so many marketing experts are ready to throw away the model instead of learning new ways to understand and influence customers within the various stages.  Certainly, there are new factors to consider that might give us four or five different kinds of prospects in the Interest or Decision stage, but realistically, they’re still in that stage, right?  Has all of humanity changed into something else or have people instead changed the way they gather and act on data?  I think it’s the latter, and I think marketing professionals have to start thinking about the funnel in a different light, but I’m not ready to say it’s not a funnel just because I have to measure it with a different ruler.

Predictions and Postulations

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By Tom Fedro

Have you ever watched a television show or a movie from your youth and just sat astounded at the way everything in the show doesn’t mesh with today’s world?  I’m not just talking about the emotional or political aspects of it.  Sure, when Ricky Ricardo gives Lucy a spanking, our eyes get wide and we shake our head about how different our world is now; but I mean the way technology has become such an integrated part of our life that things just seem off when it’s not part of the equation.  There’s something about watching a police officer put a quarter in a pay phone or a detective open up a phone book that seems strange.  I catch myself wondering why Starsky doesn’t just call Hutch on his cell phone!

Nobody in the 1980s could have predicted the way things have progressed.  Sure, Alvin Toffler was pretty close when he wrote The Third Wave and announced the end of the industrial age and the beginning of the information age, but even Toffler’s genius didn’t anticipate the completely wired-in (or wireless for that matter) access to…well, to just about everything.  In fact, while the beginnings of the information age focused on technology—Can we do it?—the new focus is on service based delivery of functionality and information.  Content is king in ways never imagined before, and this means that opportunities have really shifted from pretty buttons to secure methods of storing, transferring, and accessing data.

With every major company trying to get in on the Cloud in one way or another, predictions explode from tech pundits like one of Lucy’s cooking experiments gone wrong.  How many of these predictions will go the way of the flying car or the teleportation device?  There’s no way to tell, really, because so much of what we get in the world of technology is driven by market forces that are fickle.  One thing I believe is certain, though, is that we have to interpret technology based on trends we anticipate for the future.  Twenty-five years ago, we couldn’t have anticipated (absent sheer genius) the social media explosion, the complete mobile revolution, or the trend toward instant access, but the one thing that we could have and should have anticipated is the reliance on data and its complete takeover of our daily lives.

Someday, our kids will watch television shows and movies from our time and wonder why the hero doesn’t hop in his flying car or simply order up a logical answer to the dilemma or something else that seems impossible now.  Who knows what technology will be standard in thirty years.  I’m willing to bet, though, that at its core it will deal with information and access to it.

 

Passion Is Overrated

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By Tom Fedro

What?  Can I really write this post?  I’m all about business and startups and suggest that the driving force of a multitude of entrepreneurs isn’t as important as every other blog on this subject suggests?  What of all the stories?  What of all the movies?  What about all the inspirational books and the men and women just about to give up but hanging on because they accessed deep within themselves that last vestige of hope and passion that kept them motivated against all odds.

It makes for good storytelling, but I have to tell you that I’ve been in more than one startup.  I’ve advised in more than one startup, and I’ve seen countless pitches from founders.  I’ve spent my career focusing on startups.  I’ve yet to find a single founder of a startup who wasn’t consumed by passion.  Why in the world would anyone put in the kind of effort and sacrifice necessary to start a new venture if there wasn’t passion?  Everyone has it.  Everyone in this arena, anyway.

The bottom line is this.  According to studies (and there seem to be a million of them) the failure rate for startups is staggering.  Low estimates put it at about eighty percent, some suggest the rate is ninety-two percent.  That means your brilliant new business has about an eight percent chance of success, no matter how passionate you are.  In fact, there’s a good chance your passion, if not reined in, will be your undoing.

The Genome Project’s study of 3200 startups concluded that the number one reason for failure is self-destruction, primarily through premature scaling.  In other words, passion makes us grow too quickly and get ahead of ourselves.  Things get crazy and our dreams become nightmares.  Our incredible idea is so incredible that we implement it faster than it can actually succeed, and the net result is failure.

I’m not suggesting passion isn’t important.  I’m just trying to tell you that everyone attempting to start a business probably already has it.  Don’t work on motivating yourself in this area.  Don’t focus on the passion, focus on the business.  Make good, fundamental business decisions.  Those are the decisions that may seem dispassionate or even appear to show a lack of confidence in the idea about which you’re so passionate.  Don’t worry about that.  You worry about whether or not you’ll be one the eight percent that make it.

Focusing Correctly

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By Tom Fedro

Today’s executives face issues yesterday’s didn’t.  This isn’t to say today’s businesses are completely different than those of the past.  I’m a firm believer that business fundamentals are the exact same today as they were two hundred years ago.  Everything still comes down to creating a product and selling it for more than it costs to make it.  Now, though, the product is often virtual or intellectual in nature, and the ability of a company to sell it is influenced by a great deal more than the quality of the product, not the least of which is the rapid change in technology and game-changing alterations of needs, expectations, and therefore buying habits of the customer.

Take tires, for example.  We’ve only had pneumatic tires for about a century, and they’ve been prevalent for less time than that.  Thousands of wheel manufacturers had to adjust simply because a man wanted a bicycle tire for his son in the 1880s that would handle rough roads.  Some of those tire companies were able to adjust to the sudden change in the marketplace, and some couldn’t.  Other examples are even more profound.  Carburetors gave way to fuel injection, for example.  In some cases, entire industries were built out of needs previously unknown or unexplored. Cell phones make landlines almost irrelevant from a residential standpoint.  Digital delivery of music has devastated manufacturers of machines designed to play non-digital media.  The list goes on.

So how does an executive charged with the vision and direction of a company stay on top of what might happen tomorrow?  After all, just getting where we need to be with our current set of tasks can be overwhelming, right?  I believe the answer lies in the perception of the business itself.  If you believe, for example, that you’re in the backup and recovery business, you might have a problem.  Turn it around and say your company exists to keep information secure.  Think you’re in the burger business?  I think you’re offering customers food quickly and conveniently.  Maybe there wouldn’t have been such a lapse in healthy choices at the big fast food companies if they’d thought that way.

The point of all this is that we need to be committed to what our products do for our customers, not what our products do from a technical standpoint.  It does us no good to make great carburetors, no matter how much quality control we put in place.  We can make the best steel rings ever produced to line our wheels, but it doesn’t do us any good.  The key (and the hard part) is realizing when our product, no matter how stable and well thought out, has become our goal instead of our means to the goal.