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Most Interesting Things I Saw at Internet Retailer Conference & Expo 2013 (IRCE2013)

IRCE 2013 again had a jammed packed expo hall full of the best vendors in ecommerce.

One of the first companies I encountered was Riskified. Riskified was one of the most unique new offerings that improves customer experience and business performance while reducing merchant risk that I saw at IRCE2013. Eido Gal is passionate about his organization – “Riskified reviews, approves & guarantees transactions you would otherwise decline”

Jai Rawat was one of the most visible people at #IRCE2013 this year – he reached out to me prior to the show, he was at every evening event I attended and I had the pleasure of watching him address several prospect question sessions. Jai has amazing energy and is an outstanding founder who puts the business issues up front. A rare breed. Look forward to learning more about their offerings – “ShopSocially embeds rich social experiences on websites to improve discovery, conversion, engagement and brand amplification.”

There were a few other early phase organizations that I liked that did not want to do an interview because their value propositions were still under development.

The Singapore Post is delivering significant ecommerce services of all types and is a profitable organization. The conversations I had with these folks were fascinating as they told me about innovations unimaginable in the USA. I hope to visit their facility someday in the future to fully document their unique story.

In terms of companies that are household names doing cool new stuff:
FedEx – Fed Ed has a new service called Fedex Delivery Manager that allows you to control your packages destiny and special delivery instructions. I really like this concept as I’ve always felt the consumer was the true customer of delivery services.

I also loved the the vibe I saw at Digital River and Netsuite booths, both companies have knowledgeable people seeking to do the right thing for their customers. Many other great conversations were had, but these stand out.

What did you see and like at IRCE2013?

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Ted Matthews Interview : The Real Meaning of ‘Brand’ is Outstanding Culture

Ted Matthews - Culture

At the back of John Warrillow’s Built to Sell, I saw a book mentioned as a must read. That book is Brand : It ain’t the logo*. The asterisk stands for “It’s what people think of you.”

This perspective matches and aligns with my own views quite closely. After a short chat with Ted Matthews via email, a copy of the book arrived and I was reading away.

Why is branding not a creative logo? What is it really?

Branding is the managed care and nurturing of the culture of an organization- building a brand must start, take hold, connect first on the inside, with internal stakeholders- employees and partners and then through osmosis it connects to external stakeholders- customers and critically important future employees.

The logo leads in the visual identity of an organization- important because humans are very visual beings, as Malcolm Gladwell popularized, we recognize images in a ‘blink’ vs recognizing spoken or typeset names. And in this hyper-messaging world nanosecond recognition is the Brander’s key objective.

What are the three primary tools of branding? Why are these overlooked?

Everybody who comes out of business school, knows there are strictly followed tools and rules for the financial discipline- the value protector – managed by the ‘important’ financial department. While there have never been tools or rules, or never a department, for managing the culture/brand discipline- the greatest value creator! There are now…
Tool #1 Be remark-able; have a product or service so good, so unique that people talk about it, publicizing and recommending for you. Jeff Bezos has said “Advertising is the penalty you pay for having an unremarkable product.” Honda has a new feature in their van for the young families who still buy vans- a vacuum for all the crumbs and crushed Cheerios! There, I’ve ‘remarked’ for Honda, no advertising required.
Tool #2 Own a position; a Brand must have a unique and ownable point of difference. If you are not different then you are the same, and same dies away. Volvo owns ‘safety’. Staples owns ‘easy’.
Tool #3 Build you Brand with experiences; Surround your offering with positive experiences, people never forget how you make them feel! AltlasCare, a home heating and air conditioning provider, trains their service people on every detail of experience- like where to stand and how to address people at their front door.

So if it is true that culture is the brand, why do so many companies give this so little attention while giving so much attention to creative services?

Hey, the creative part is fun, involves new ideas, working with crazy fun people, maybe a bit of Hollywood- shooting commercials, seeing your ‘creativity’ on TV. But as for culture, it’s the behind-the-scenes stuff, relationship-stuff, stuff never taught in business schools.
Founding entrepreneurs create culture instinctively- usually around their own personalities, character and their vision for something better. But as organizations grow, they outgrow their founder’s skill set or interest. BlackBerry is an example, two guys change the way the whole world communicates and then loose interest, ‘cause it’s (vision) done- they had moved onto other things that now challenge them.
This is when firms get turned over to professional managers who know how to run businesses at scale BUT, this gets back to our systemic problem, these biz grads never learned about culture nurturing or anything about brand beyond- it’s marketing’s function. Full stop!

You state that if the culture is right, everything falls into place. How should corporations deal with the fact that most of them do not have the culture right and likely not even be able to know it?

Every organization needs a surrogate for the entrepreneur. First, in this broader definition of brand- what people think of you – the CEO needs to assume the role of CBO- chief brand officer. They need to capture their guiding principles in a brand foundation- the carved-in-stone, 7-commandments that guide the organization in everything they say and do. Their core purpose- why they exist, their vision- where they are going and how they will know when they arrive. The mission- what they have to do consistently EVERY day to get there. Their values- who they are as people, their principles. Their position- as I said, how they are different. And their character- their image, their voice. Then the CBO needs to relentlessly remind people of these guiding principles and that everyone has a role in building their brand- consistency is the #1 rule of branding.

You mention an interesting quote at the start of the chapter on “Evolution, not Revolution” by Charles Kettering: “We have a lot of people revolutionizing the world because they’ve never had to present a working model.” Please discuss what that quote means to you.

Kettering was an interesting guy- inventor, businessman, a serial entrepreneur with over 180 patents. In the mid 1800’s he invented the electric starter for gas engines- started Delco- part of GM today.
For me, his quote is about all the people who think innovation and change are easy. While discounting the contribution of our ‘wacky’ entrepreneurs, impatient investors push and merge organizations destroying what made them successful in the first place- my own 30-year, 80-person firm, was deconstructed in 28 months after a merger- another unmanaged clash of cultures. Change must happen, but it must evolve, retaining the brand equity- what an organization is known for. Look, in the news recently- J C Penny is now apologizing for the rush to change by their last board appointed CEO. GAP stirred up a hornet’s nest among their stakeholders with a wholesale identity change that was also reversed. A company does not ‘own’ its brand, it’s owned by the stakeholders who love it.

What events typically precede an organization being ready for change in their culture and why is this so hard to recognize?

It becomes increasingly difficult to retain the best people and impossible to attract new stars.
This flesh-eating disease is hard to recognize, because it sneaks up slowly and is only diagnosed and reported by an under-respected department in North American organizations – HR.
And this is the root of the most critical issue of our day.
Fouled by our leaders’ misunderstanding of brand, their default positioning is ‘cheap’. Then, to ‘sell-for-cheap’ we have given away our former well-paying production jobs to Asia and now, to employ our neighbors so they CAN buy from us, we need to invent all new jobs and do it with a dwindling workforce. 70 million boomers readying to retire, only 30 million young people (not all of them stars) available to replace them.
This startling truth has been disguised by the years of recession- firms watching costs so not hiring, boomers hanging on to jobs in fear their investments won’t support them, young folks (therefore), not seeing the openings and at the same time being a generation that wants a job with meaning, a job with a organization with a core purpose.

It is time for America (and the world) to understand brand, to understand it’s a compelling culture they need.

Again that book is Brand : It ain’t the logo*. The asterisk stands for “It’s what people think of you.”

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Bestselling Author John Mackey – Conscious Capitalism 2013 Book Tour Chicago Stop

conscious capitalism jacketJohn Mackey came to Chicago Wednesday and gave a powerful , paradign-shifting soul-awakening speech about his new book Conscious Capitalism to the Economic Club of Chicago. The event was led by John A Canning Jr., Chairman of Madison Dearborn Partners. Question and answers were moderated by Mary Ann Childers. Later, I attended a second event with him at Chicago’s Lincoln Park Whole Foods Market location.

John Mackey is a wickedly smart and passionate businessman who has created a flexible organizational structure at Whole Foods Market designed to create great connection with the customer. It is very much like the business philosophy I was raised on at BlackRock. It needs to be more common place in our society.

As I’ve stated previously, proper business acumen needs to become a mainstream, highly discussed issue in our society. Sadly, the people that need to read this book the most are the ones most likely to never see it. It is time for a global renaissance in business practices around the world. For that to ever have a chance of occurring, these issues need to migrate from business to mainstream.

I did manage to get a few minutes with John Mackey as you can see in the Youtube video below. He was in a rush so I turned a six minute interview into three minutes and my one of my on the fly question mashups got a little overwhelming regarding the nature of business and media change. I would have liked to have also asked about the Board of Directors stakeholder issues at Whole Foods. Looking forward to getting that the next time I get to interact with him or Raj Sisodia someday.

The book, co-authored by Raj Sisodia whom I need to learn more about, tells the story of the founding of Whole Foods, the amazing and unlikely comeback from a devastating flood in 1981, the unique relationship it creates with stakeholders and the ability to educate business leaders and others about these principles.

By reading the book and seeing two speeches by John Mackey yesterday, I also learned surprising facts:

– Reading books played a large role in creating John Mackey’s education. He never took a business class while he attended college but has read voraciously over his lifetime.

– John gets that marketing is not a logo like I do. On page 80 he says, “At Whole Foods, we think of marketing as enhancing the quality of our relationship with our customers.” Every company should view it this way.

– Paying vendors on time is critical to success of the ecosystem. He discusses how big companies tend to be the worst offenders here. You’d think that with today’s cash excesses on balance sheets that they’d change this.

– After witnessing John Mackey make two speeches, I can state that Whole Foods appears to be a unique learning organization. There is decentralized and delegated authority at the regional and individual store level to make investments, acquire local products and interact with the local communities as the stores deem appropriate.

– Later in the book, he discusses measurement and the need for change there. I’ll leave you to discover that in detail on your own as you read Conscious Capitalism: Liberating the Heroic Spirit of Business.

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Marketing Channel Business Strategy Reallocation Management: Where Are You?

The other day Google (GOOG) had it’s earnings call, Google stated that a primary agenda for 2010, in addition to mobile, was display advertising. Yes, you read that right, display advertising.  Display? Yahoo 2.0? After the call one had to think about how non-targeted and potentially wasteful advertising spend could potentially be harmful to corporate profitability as some people might try display that aren’t appropriate for display (and could do far better just creating quality content to be indexed in organic search). The promise of the Internet comes from the potential to change organizational structures to be closer to the customer in the way that Peter Drucker would want to increase customer utility and reduce the cost of marketing and sales. I think we have all underestimated the amount of time these changes will take and clearly question whether our society is picking the right leaders to lead these changes.

Obviously one must consider that without true reform of advertising models away from CPM driven page view models how display in 2010 can do nothing to further the goal of lowering costs of marketing and sales for companies and improving our standard of living. CPM can only maximize revenue of an ad network with some residual benefits to publishers. A few days ago I considered writing something about this, but thought this was part of something larger than just Google and their display initiatives in 2010.

Surely, less than 48 hours later, Jason Calacanis started a discussion about comScore that has the Blogoshpere abuzz. Michael Arrington also chimed in (as did a bunch of other people) in his post, Jason Calacanis Punches Comscore In The Face. Comscore Punches Back. Fred Wilson Drags Us Into It. $SCOR” rel=”bookmark” href=””>Jason Calacanis Punches Comscore In The Face. Comscore Punches Back. Fred Wilson Drags Us Into It. $SCOR.The buzz around Jason and his conversation is ultimately about symptoms of the current ecosystem, not the root causes of the future end game.  While the conversation about the current state is certainly an interesting conversation to observe, it’s not the conversation I wish to take to the next level. We need to have a different conversation. There is so much more to achieve and limited marketing resources of companies need to be put to work effectively. There are advertising models of the future to consider where offline, mobile and Internet will collide and will someday make this entire conversation look primitive.

Sure enough reading this post brought me back to the conversation about Google and the worthlessness of poorly targeted and untimely display banner ads. You see there was not one but two large banners on TechCrunch that stood out as irrelevantly served by Google. What were they? They were display banners for a company I had interviewed with to be the CMO of in Spring of 2009 that I would have likely have increased the revenue significantly by now.  Unfortunately most CEOs don’t yet fully understand the magnitude of the amount of change  that is necessary to transform a company successfully for marketing on the web while improving customer satisfaction and the corporation’s profitability. I had researched them and their competitors back then. I was never a potential customer of the service. So now, a full nine months later, here I am looking at this completely irrelevant ad on TechCrunch of all places (which is completely unrelated to the vertical). Wasteful. Pathetic. Sad. Not something a rational business leader following the rules of being a Gen X CMO where search marketing becomes the top of the strategic process.  The first decade of the Internet got us to the batters box to start the game of corporate business strategy transformation, I look forward leading that conversation into the first inning during the next few years. The magnitude of the change and the amount of transformation needed is massive, whether it is a small company or a member of the Fortune 500.

You should read those comments in Michael Arrington’s post and think about their motivations – extremely carefully. You’ll also find a link to Jason’s original post there if you wish to read the full details. The future of not only the Internet, but also the future of business organizational structures and marketing strategy budget direction hangs in the balance.

So my question for Jason Calacanis, Fred Wilson, Michael Arrington and EVERYONE ELSE is the following, “Is it time to stop pretending that offline branding models simply converted online is the future of the advertising? If a world migrated budgets from CPM banner ads to CPA/CPL and other emerging forms, who would really care about unique visitors besides site owners seeking an ego boost?

Bonus question for Fred Wilson: Wouldn’t your energy be better spent on funding ideas that move the conversation in the direction of innovation of advertising instead of arguing with Jason about a company you exited long ago? (If you are up for it, I’d like to create those realities with you in start ups in that future arena.)

In the end measurement of the type discussed in Jason’s post only matters in an advertising world based on page view based(CPM) or time sponsored impressions. As in my example above, considerable display advertising occurs in an irrelevant way after the fact. For example, I bought a car last September, I’m still seeing increased banners on the models I considered now – after the purchase. Women planning weddings likely have seen related retargeted banners long after the wedding has occurred, possibly even after the divorce is filed in some cases!!! We must do better.

The convergence of offline, online, search and mobile marketing will require entirely new processes to effectively manage them as it becomes a real-time individual decision marketplace. To me, it will have similarity to the changes I made in the 1990’s at BlackRock, where we created new data, new structures, new standards and created better information for us to create strategic advantages.  I actively network with some outstanding nascent start ups, sadly many are ignored as many VCs look for traffic or who is involved rather than focus on revenue models, vision, market size and evidence that there might be paying customers for such a new , disruptive model.

The economy right now is bad, but to state that it is just an economic event is way oversimplifying it. It’s prolonged and drawn out due to the structural effects of the Internet not being managed to corporate advantage effectively. Stated simply, corporations and our society is not allocating resources in an effective manner as it fails to migrate budgets and marketing strategy to the highest ROI activities which attract relevant customers. It’s time for scarce, new and often misunderstood breeds of executives that understand these concepts to be allowed to realign corporations big and small, new and old to these new realities otherwise we will see more corporations destroyed “by doing nothing”. There is certainly a significant cost to tapping new leaders, with new skills to lead organizations into new frontiers in terms of realignment and retraining. However, the costs of doing nothing are far greater to our society as not allocating budgets to the most efficient channels and allowing those decisions to be made by people who understand these new realities is far greater.

All I can ask the both the blogosphere and the world business community is to please stop the bickering about these legacy models so we can move onto the real issue and work ahead – realigning our corporate business strategy and our society to the realities of Industrial Revolution 2.0. It starts with board of directors, CEO, CFO and COO executives asking their CMO and marketing partners the right questions. The journey will be fun.

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No Amount Of Paid Lobbyist Dollars Can Prevent Content Revolution

Brian Solis checked in with a guest post on TechCrunch this morning regarding the disclosure debate.

To be clear, it’s a thoughtful post and I don’t disagree with anything materially in what was said. So why write about this? I find the entire conversation to be 100% completely unnecessary.

First a story. When I was a teenager, I saw in ad in the back of a magazine, it stated to send $1 and a self addressed stamped envelope (SASE) to receive information on a tried and proven money making business strategy. It sounded good so I sent it in. A few weeks later I got a my envelope in the mail. It contained a small note that contained a message like this:

A proven way to make money:

– Open a post office box

– Place a small ad in the back of a magazine asking for $1 and a SASE to “learn a proven way to make money”

– Put your $1 bills in the bank and send notes like this one

Yes, I was scammed. But being scammed was an important event in making me a more careful and better consumer. I learned. It was necessary for me to grow. Did the magazine know the ad was a scam? Probably. Did that stop them from publishing it? No. Consumers need to judge each situation for themselves based on the data available and make the best decision.

So Dave why is this potential FTC regulation unnecessary (and possibly quite harmful)?

  1. The content revolution is not well enough defined to regulate it – It’s changing all of the time, if businesses and individuals still have trouble understanding it’s implications on our society. How can a group of elder statespeople in our government know what is right? Simple answer. They can’t. As traditional media loses relevancy/power content will increasingly be created by the masses. It’s a simple fact. Get used to it, in the long run, it may actually lead to the removal of the abuse of monopoly power.
  2. Traditional advertising is not generally marked in the manner the FTC is suggesting – When you watch TV, ADVERTISING is not in giant letters on the commercial during the program is it? No. It’s not on outdoor billboards. It’s not in newspapers, magazines or the majority of web site banner ads. Why? Because it’s obvious to those who look closely. Creating a double standard here is just plain silly and it’s insulting to people’s intelligence.
  3. Previous FTC measures have proven to be massive failures – The FTC instituted the Do Not Call List Registry and the CAN-SPAM  Act several years ago. Yet I get numerous unsolicited commercial calls to numbers I’ve registered on the list. I get tons of spam from email lists that I have NEVER signed up for on a daily basis. Regulation without enforcement results in selective usage of the law. This is not good and can be abused on both sides. The FTC has a proven history of failure and should go fix it’s previous messes before creating unnecessary new ones.
  4. Social media platforms should do everything possible to prevent fraudulent usages – I see tons of fraudulent Twitter users emerging daily. Twitter should be creating validation of each and every user which would lead to an immediate reduction in questionable activity. Why aren’t they? Because it would put holes and raise questions about Twitter’s “growth story” and that with no revenue model in sight would lead to lower valuations and less money being pumped into the company. Twitter has a responsibility here and I don’t see it doing everything it can to eliminate questionable activity on the platforms. If the social media platforms acted responsibly – unnecessary legislation could be avoided.
  5. The traditional advertising industry is apparently using lobby influence dollars to try to maintain it’s declining monopoly power via regulation – Content is taking over the economy as search allows people to find it and social media networks allow it’s distribution.  This is similar to how the printing press once revolutionized content distribution. We are living in something like this again now.  Yes there will be pain. But regulations in the middle of the content revolution will hinder commerce and slow the process of replacing business models that are no longer highly relevant. Do we legislate against fuel efficient vehicles in favor of gas guzzlers? No, of course we don’t – why create unnecessary legislation that harms new forms of efficiency? yes, this really is this unnecessary. 
  6. “All Marketers Are Liars” – This famous book by Seth Godin indicates that deceptive advertising has always been a part of society and likely always will be. This is NOT new. Don’t we respect people enough to make their own judgments? I do. Why then act like it’s new? It’s not.

Look at the facts of history, the proposed FTC regulations will solve nothing and do nothing besides place a greater burden on commerce in an already struggling economy. We can prevent this grave mistake. Now let’s go do it.

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Latency, Spam, Memory Leaks – Google What Are Ya Doing To Me Pal?

The following was reported today on the website Data Center Knowledge:

“It’s clear that latency really does matter to users,” said Mayer, the VP of Search and User Experience at Google and today’s keynote speaker at the O’Reilly Velocity Conference.

Do ya really think so Marissa? Having unnecessary captchas, massive memory leaks in gmail, outbound gmail that gets improperly classified as spam, adding SMS features to Google Voice with no instructions on how to turn them off in the email – that does matter. You’re absolutely right, Marissa! But my question is what are you doing about it?

This message appears on my screen several times a week, nobody at Google (and I’ve let several people know, can get to the root cause to fix it), financial analysts should be modeling the revenue loss. I’m tired of sorry, I’d like to see a permanent fix:

We’re sorry…

… but your query looks similar to automated requests from a computer virus or spyware application. To protect our users, we can’t process your request right now.

We’ll restore your access as quickly as possible, so try again soon. In the meantime, if you suspect that your computer or network has been infected, you might want to run a virus checker or spyware remover to make sure that your systems are free of viruses and other spurious software.

If you’re continually receiving this error, you may be able to resolve the problem by deleting your Google cookie and revisiting Google. For browser-specific instructions, please consult your browser’s online support center.

If your entire network is affected, more information is available in the Google Web Search Help Center.

We apologize for the inconvenience, and hope we’ll see you again on Google.

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Barney Harford Now Orbitz CEO – Welcome to Chicago

For the past few years, I thought that there might be a new entrant to Chicago’s Internet scene. It was exciting to me because Chicago could certainly use some geographic diversity in it’s leadership. For a long time, it looked like that person would be Mark Cuban, but it now appears that he will not be the high bidder for the Chicago Cubs. That is kind of a bummer as it would have probably made Wrigley Field a playground for the who’s who of the Internet people like Michael Arrington, Jason Calacanis, Gabe Rivera and many venture capitalists. BTW, you are still welcome guests irregardless.

They say that when one door closes another one opens and apparently Barney Harford is the gentleman that was actually meant to darken the doorway. He’s had extensive experiences in Asia and elsewhere for Expedia and more recently as an advisor to and eLong. As mentioned in the article linked to above, I strongly believe that geographical diversity is important to high performing corporate cultures and I praise the Board of Directors for this choice. It is my hope that this will effect Chicago’s landscape in a positive way far beyond Orbitz. Time will tell.

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