doc searl

Recent Articles

• a short decision tree for web entrepreneurs

  September 9, 2010 in The Artist's Dilemma, entrepreneurship, tech

  While I make the occasional investment in startups, I’m by no means a VC/Angel, and certainly am not in the same universe as people like Fred Wilson, Bijan Sabet , Todd Dagres. That said, I do get a LOT of business plans/ideas put in front of me.

  As I don’t want to waste my time or the time of those pitching me, I’ve devised a method to cut to the chase when I’m pitched by a young entrepreneur with a plan that has a heavy web component (as most do).

  The conversation goes something like this:

  Me: OK, what’s the idea?
  Entrepreneur: It’s an idea for a web site…
  Me [interrupting]: Are you a very skilled web developer?

  If they answer “No,” I ask if their partner is a very skilled web developer. If they answer “No” to that as well, I tell them I’m not interested, and they either need to develop the skills or partner with someone who has them, and then come back and see me.

  If the answer to the questions above are “Yes” (i.e. either the entrepreneur or his/her partner is a skilled web developer), my ears prick up, and we continue down the road to the good stuff.

  Sadly, for 95% of the pitches I hear, the answer to whether the entrepreneur or his/her partner is a skilled web developer is “No.”

  The reality is that unless you or your partner can develop for the web you will very quickly hit a wall.

  Is it possible that if you can’t do the development yourself that you can hire someone? Of course. But, remember, these are startups that typically have no capital; so, they’re going to end up trading equity to someone they don’t know (it’s OK to have a web dev partner with equity; the fact that he/she is your partner means that the ethical fiber is there and the values align - one would hope, at least) and/or take on a burdensome expense.

  In both cases (giving equity to someone you don’t know/taking on a burdensome expense) your chances of success have just diminished so greatly that no rationale investor would invest.

  Too often young entrepreneurs create teams that are really just several clones of themselves (i.e. their friends): people whose skill sets overlap to the point that there’s no value add from the additional head count.

  As you assemble your idea, you must also assemble a team (a SMALL team, like a team of 2) where the skill sets don’t overlap, but rather compliment, even while the values align.

  What this means in the real world is that if you have a great idea, but are not a web developer, your teammate darn well better be.

  Take a look at most of the recent successful startups. In almost all cases either the founder him/herself or his/her partner was a web developer.

• iterate, don’t (over) cogitate

  September 8, 2010 in Productivity, entrepreneurship, marketing

  I gave a lecture on entrepreneurship last night to a group of incredibly creative students. One of them made the statement that he was conflicted about the idea of merch. In particular, he felt that selling t-shirts at gigs didn’t align with his values (my words, not his - his words were more along the lines of: “selling out.”)

  I told him I understood, and referenced the fact that I had recently had a conversation with Zoe Keating, and she told me she doesn’t sell t-shirts; she doesn’t feel that they fit with her values (again, my words/paraphrase).

  This student was clearly swirling around on this issue, and as Mr. Hitchcock has taught us, “Swirling takes up all [your] time.”

  The student followed me to my office after the lecture, where an overly-tired version of myself listened as patiently as I could, before saying, “Look, man, sell t-shirts, don’t sell t-shirts…who the hell knows? Try it. If you try to sell some, and people buy some, and it feels OK, keep doing it. If you try to sell them, and no one buys them, stop and figure out why. If you try to sell them, and people buy them, but you feel like you’re “selling out” - whatever that means - then stop, and come up with something else. In the amount of time we’ve been discussing this - let alone the amount of time you’ve been debating it with yourself, your bandmates, etc. - you could have tried it out, and gotten some data/feedback/learning, and either embraced or moved on. Instead, here you sit, not doing anything, not moving forward…just cogitating.” (This is the version of myself that Lauren Markow calls my “evil twin.” So it goes).

  I don’t know if selling t-shirts is or isn’t right for this artist. The reality is, he doesn’t really know. How could he?

  A wise man taught me that the thing to avoid is the “big mistake;” making small mistakes is the transaction cost (the toll) on the road to success.

  When we get bogged down and worry about making any mistake, we are stuck in cogitation mode. There’s a reason why Deming put “do” in second position in his Circle (before “check” and “act,” and just after “plan”).

  “Mistakes” are part of the iteration process, and iteration is good; it leads to feedback, refinement, and eventually success.

  I hope this student makes some t-shirts and sees how it feels (both internally (to himself) and externally (to his customers)), and then moves on.

  The alternative isn’t good.

• A Time to Worry

  September 7, 2010 in Productivity, Quick Thoughts

  I had a meeting recently with a brilliant business woman/Broadway Producer. What was supposed to be (and, in part was) a meeting about strategy and marketing., became a conversation about productivity, time management, etc.

  Somewhere along the way, I mentioned something about stress/worry. She asked, “what are you worried about?” I rattled off the various and sundry worries of a very blessed man (knock, knock, knock on wood), and said that they sort of train you to be a professional worrier in law school; but it was also my disposition.

  Rather than just telling me to stop worrying, which most people do, she said, “Well, clearly, you need to worry, so why not schedule a time each week to worry. Put it on your calendar.”

  So, now Fridays from 11 to 12, I get to worry until my little baboon heart is content. When my head tilts toward worry at other times, I remind myself that I darn well better hold off until Friday from 11 to 12, lest I not have enough to worry about during this designated worry time.

  You see where I’m going here? We’re all told that worry is unproductive (it is), and yet, like telling an artist to be an “entrepreneur” or any of the myriad directions we give people without providing any real guidance on how to get there, telling someone who is predisposed to worry to just stop worrying is unrealistic.

  Putting it into a system, however, really does shine a light on it; makes it appear as just what it is: a shadow of a monster.

• Psychographics and Customer Acquisition/Retention

  August 31, 2010 in marketing

  Berklee’s Music Business Journal recently published an article I wrote on fan identification and acquisition/retention. My friend, Dave Kusek - who, in addition to running Berklee Music wrote the fantastic book The Future of Music, and maintains a blog of the same name - was kind enough to excerpt a big chunk of the article, and post it to his blog.

  Thanks to Dave and others spreading the word on Twitter, the article seems to have reached and resonated with some people, and I’m delighted by that.

  I thought, therefore, I’d post it here (un-excerpted, and in a single-page format) so that people who want to read the whole thing without having to click through a bunch of links (as they do on the BMJ Site) can do so.

  I also wanted to take a moment to say that while this article is ostensibly about the music business, as I said in the overview below, it’s really designed to give some guidance to anyone - musician, painter, filmmaker, poet, etc. - who creates content, and is attempting to find and connect directly with their constituents.

  I truly believe that the music business is a canary in a coalmine, and therefore, it’s wise to view the travails and successes of the music business, and see what you might be able to avoid/apply in whatever work you do.

  With that…here’s the article:

  Overview
  This article provides guidance on how a musician, label or any other content creator can identify a target audience, encourage the most ardent customers to become evangelists, and develop a varied monetization strategy.

  The article should be viewed as a general overview with certain specific action items. Ten years ago, The Cluetrain Manifesto was published and became the seminal work on the Internet. Like then, the clues, or answers, are found everywhere around us today. The challenge and opportunity rests in the ability to separate the non-value adding “opportunities” from measurable strategy. This article attempts to focus content creators on the latter.

  The Life Cycle Curve
  In order to find your audience you must consider several details. The first is to accept the fact that you cannot market to the majority; you can’t afford it, and even if you could you would fail because of issues related to frequency of contact with these gatekeepers (i.e. radio/press).

  Thus, you must focus on a specific segment of the overall market as defined below:

  

  Take the Mavens and Early Adopters and focus on these two groups. The Mavens, a term popularized by Malcolm Gladwell in his book The Tipping Point, applies to people who actively and aggressively seek out new things. They are the ones who are not only the most connected to the information channels, but are also most predisposed to discover new things, and new channels as well.

  These mavens have a personality type that generates deep satisfaction from not only the seeking out and discovery of new material, but also the sharing of this material. The first class of people with whom they will share are so-called Early Adopters.

  These Early Adopters are one standard deviation closer to the majority than the Mavens, and thus there are more of them. However, while they will adopt new things more quickly, they are not typically at ground zero of discovery. If the mavens are the bloggers, the Early Adopters are the readers of these blogs, and — to a degree — the re-bloggers.

  Again, these Early Adopters are a more populated class, and thus their influence is potentially greater than the Mavens.

  There is crossover between the two groups.

  The area of focus is detailed below:

  

  Significantly, defining this Model Customer allows you to determine where this customer is likely to congregate, and thus where you must bring your music.

  The Straddle^[*]: Offline and Online
  We do not make profound connections with products, services or people online. Profound connections occur offline — in person. The genius of Facebook, and why it has eclipsed networks such as MySpace, is that it represents a Straddle of offline and online; we upload pictures and detailed stories of our offline activity so that our friends and family can be aware of these offline experiences.

  In this manner, you must understand that technology is simply an accelerator of your offline activity.

  By locating the Mavens/Early Adopters within your psychographic landscape, and taking your music to them — in person — you greatly increase the odds of these people developing an emotional attachment to your work.

  Architecture of Participation
  One of our most primal urges is to share information; this is why babies make the massive cognitive leap to learn language skills. Your job, once the initial offline experience has been established, is to create an architecture of participation; a method for frictionless sharing of information so that those Mavens/Early Adopters who have discovered you offline can begin to share their discovery with their network (i.e. online).

  This requires a series of steps related to value exchange. Your first task is to establish four things:
  1. Your own site
  2. A Facebook Fan Page
  3. A Twitter Account
  4. An email newsletter

  Your Site
  On your site you must present a value proposition that begins with exchanging some type of content for an email address.

  Email is your currency; the more of it you have, the more likely you will be to convert what is essentially a non-scarce resource (i.e. your music) into something of tangible value.

  Do not be fooled into thinking you can get away using a third-party site as “your” site. While, undeniably, service providers such as Reverb Nation and Bandcamp provide value, you do not own these sites, and fundamentally your participation does more to increase the value of these sites than increase your own value. This is not to say you cannot extract value from these third-party sites; however, this requires using them like Facebook, Twitter, and others, to drive potential customers to your own proprietary site.

  Facebook
  Your FB fan page, similarly, must also represent a value proposition. The value here relates to engagement. FB allows for easy engagement via its makeup. Consider contests, polls, short videos, or other ploys that will keep your fans not only engaged with you on FB, but will encourage them to direct those in their network to your FB fan page.

  Of course, you must use FB to direct customers to the value proposition that exists only on your site: a content-for-email exchange, and other site-specific offerings (chats with the artist, etc.).

  Twitter
  Twitter should be used to establish your voice and to direct people to your site. The establishment of the voice comes as much from your affiliations — who you link to, who you follow — as it does from your actual tweets.

  As above, use it to engage and to direct traffic to your site. Employ time-sensitive offers and offers only available to those who follow you on Twitter.

  The goal is to inter-connect these tools, and to leverage them to enhance the offline experience.

  In all mediums you must encourage and facilitate sharing. Your site must have a FB “Like” button and a share on Twitter so that whenever you post content, your constituents can share with their network.

  Email Newsletters
  The single best tool for conversion of fan to customer is email. While email is an increasingly ineffective tool for communication it still yields a higher return with respect to sales than any other tool.
  Therefore it is imperative that you use your email newsletter wisely. A few things to consider:
  1. They must be short; highlight one and only one action. The total length should be less than 500 words.
  2. They should be frequent; once a week on a regularly-scheduled basis.
  3. They should have a call to action; tell the recipient what you want them to do: come to the site to get something, come to a show, etc.
  4. They should be forwardable; ask your recipients to forward the email to someone they think will enjoy it.
  5. They should have sharing functions embedded; allow people to Tweet, add to a FB status.
  6. Make it easy for people to unsubscribe.
  Don’t worry about overwhelming people with email blasts. If people are unsubscribing, they’re likely non-value adding “fans” any way. Instead, focus on presenting real, timely, share-able value to your current fans so that they have a tool to help you gain new ones.

  Converting your Audience to Customers
  It is an immutable law of business and nature that somewhere close to 80% of your activity (engagement, profit, etc.) will come from 20% of your constituents. This is referred to as the Pareto Principle or the 80/20 rule. This means that if you have 10,000 people on your email list something close to 2,000 of them will generate 80% of your total sales. The other 8,000 will be largely non-value adding.

  The problem of course is that you won’t know which of the 10,000 are the true fans. Thus, you must continuously work to increase your overall amount of constituents. Rather than having 2,000 of 10,000 contributing, strive to have 20,000 of 100,000.

  In order to sift through the layers of participation to find the most valuable customers, you must create a filter.

  Think in terms of a funnel. At the widest point of the funnel is the easiest level of engagement: a free song for an email address.

  One layer down on the funnel suggests a slightly more expensive level of engagement; perhaps the sale of a song for $.99. You will have less people who engage in this offering than you will those who engage in the free content in exchange for an email, but this is OK because you are generating a higher margin (or, in this case a margin).

  A layer below this level of engagement should be a more expensive value proposition; perhaps a full album in exchange for $10. Again, you will have less people who engage in this offering, but you will make up in margin what you lose in volume.

  Below this is where you start really separating your casual fans from your true fans. Here you’ll begin bundling things together, and adding more non-standard offerings. For instance, you might offer a download with a t-shirt package; or a ticket with a CD/T-shirt. These will obviously appeal to a smaller pool of people. However, it is important to note that these options represent the opportunity to not leave money on the table. That is, there are always fans who are willing to spend more, but are not given the opportunity to do so. By providing a range of offerings, you go a long way towards making certain you provide the maximum value to the customer while also increasing your revenue generating possibilities.

  The final layer should be for the über fan. The fan who wants something that others can’t have. This tends to be scarcity. Signed, limited things, and, of course, access to the artist. These are the highest margin related items because they cost the artist little to no extra money with respect to cost of goods sold, but they are nearly invaluable to a customer. For instance, it takes nothing but a bit of time for an artist to sign a CD/poster/t-shirt, but it increases the value to the customer exponentially. You must find ways and products that increase value for the customer, but cost you, the artist, no additional expense.

  Summary: The Value of Psychographics
  The key is to determine what you deeply care about; what your purpose is, what your values are. From there you can begin — via a psychographic analysis — to find fans that share these same values. At that point, your goal is to bring your music to them, and create the architecture for more participation. Straddle between an offline and an online engagement strategy, but use both.

  Once you’ve aggregated these Mavens and Early adopters, you must begin converting them into both customers and evangelists. This is done by honoring the 80/20 rule and working to extract maximum value out of your loyal 20%. Always work to increase the overall pool of your fans.

  ^[*]
  I coined the term The Straddle a while back. For more on this concept, check out this article.

• “if it’s pure, it hits you like a sledgehammer”

  August 16, 2010 in creativity, music

  I read the 33 1/3 Series book on Neutral Milk Hotel’s In the Aeroplane Over the Sea on an airplane over the - uh - dirt (and some sea) recently.

  To say that the record is significant is an understatement. No more needs to be written on it; it needs to be listened to. (I will add, very briefly, that when in the process of unsuccessfully attempting to license the record for release in the UK, I got to know Jeff Mangum a bit - many phone calls, a few in-persons - and he was one of the more self-effacing, genuinely kind geniuses I’ve had the pleasure of meeting).

  In any case, while nothing more really does need to be written on the record, the above-referenced book is good. The author, Kim Cooper, wisely doesn’t attempt too much exegesis on the record. Instead, he focuses on the circumstances leading up to the record, the furor around the release/tour, and a bit (just a bit, thankfully) on Jeff’s “disappearance” post-tour.

  If you’re a fan, you’ll like it (or hate it).

  What hit me the hardest was the quote from band-member, Julian Koster, below.