Insights

“The E-Myth” Required Reading for Business Start-ups

The Next Wave loves to work with startups and young businesses. We highly recommend “The E Myth Revisited” by Michael Gerber to budding entrepreneurs because of its many insights into the new business process. I was assigned reading it as part of my account executive internship. Continuous learning is a big part of working here, from the moment you apply until the moment you leave.

The E-Myth Revisted book coverThe myth of the entrepreneur is one of a person working against all risks, all odds, all fears, to achieve the dream of starting one’s own business. When we see business success from afar we see a legend, someone who faced all the risk and made it.

That false legend status is the reason why over 40 percent of new businesses fail in the first year, 80 percent in the first 5 years. What causes such drastically high levels of failure? Barring major economic changes or socio-political shifts, the vast majority of business failure is due to one thing, the person who started it bought into the myth of the entrepreneur.

The vast majority of new business owners start from the same spot. You work a number of years and develop a mastery of a technical skill. This is usually followed by the idea that, “I can do this work, very well actually, why am I still doing it for someone else?”

This is “The Fatal Assumption,” as Gerber author of The E Myth, calls it. The myth, that if you understand the technical work of a business, you automatically understand the RUNNING of a business that does that technical work, yet what most entrepreneurs don’t know is, they are two completely different things.
Gerber says one must learn that once you start a business you are no longer working IN you business, but your focus should now be working ON your business. What does that mean? It means as a business owner you must now commit fully to constant and continuing education and improvement.

This holds especially true since your business is a direct reflection who you are as an owner personally. If you are disorganized, your business will be. If you are greedy, your employees will learn to be greedy too, if you are not educating yourself constantly, your business will wither and die. Gerber continues, “people who are exceptionally good in business aren’t so because of what they know, but because of their insatiable need to know more.”

An “ insatiable need to know more.” There is no secret to starting a successful business, one must learn the risks deeply, learn the market clearly, and be willing to accept all of that before the even think of writing a business plan. The greatest weapon against failure is knowledge, and as Gerber agrees, knowledge and success go hand in hand when it comes to business.

If you already are a business owner or should you be interested in starting a new business, the following 5 questions will help you come to a certain quick conclusion:

  • Can my business work without me?
  • How can my employees learn to work without my direct interference?
  • Is my business systematized enough to be franchised nationally or even globally right now?
  • As an owner, how can I also free myself of my business?
  • How can I spend time doing the work I love instead of the work I have to do?

If after this exercise you realize that you DON’T know the answers to these questions, congratulations, you’re already on your way to having a stronger business because you now “know what you don’t know.”

Knowledge, is the foundation upon which your business will be successful. Seek out the questions, since you know now they will lead directly to the answers that drive success.

See Gerber’s “The E Myth” as well as many other incredible book resources for your business success on our booklist.

What business are you in?

Sometimes, the first question to ask a client is “what business are you in” and when you get the “are you stupid” response, you’ve probably asked the most important marketing question to ask.

Netflix can’t answer this question properly lately. Their newest “innovation” is to replace their five star rating system with the simplified “thumb up/down” rating.

United Airlines failed this test by forcibly removing a passenger from a flight.

Apple entered the driverless car market, while admitting they blew it when they replaced the big cheese grater style professional Mac computers that were infinitely and easily expandable with the “trash can” model.

For Netflix, this isn’t the first time to question if they understand what business they are in. When they tried to split off the disc delivery service as Quicksilver and then DVD.com they showed they didn’t get it either. Netflix is the film fanatics club- for serious movie buffs to feed their habit. From the online reviews (which were hidden), to the removal of the DVD queue from the mobile app, from cutting off access to IMDB, Netflix has consistently isolated itself from its core business- being the movie purveyor to people who love movies. Even their default autoplay of the next episode gets it wrong- their core audience watches the credits, and doesn’t want to have them cut off (this feature, can be disabled in settings after searching).

Netflix built its brand on a better suggestion algorithm, now it tossed it.

While the bigger, newer audience may just be there to binge watch episodic TV, the people who built your business are not the people you ignore.

Read that last paragraph again after each example, substituting what the core business is.

United Airlines bloody logoUnited is an airline. Scratch all the added mystique and branding of “fly the friendly skies” or trying to romance air travel, which has been turned into a very dehumanizing experience for most commercial travelers, the primary reason people fly is they need to get from point A to point B faster than driving, a bus, a train. When you sell a ticket to a paying customer, forcefully removing him from his seat, once boarded has violated every part of your basic business premise.

To add insult to injury, this wasn’t an overbooked flight even, they were removing four paying customers so a crew could fly. Fundamentally, United’s business is to transport paying customers. Any questions?

MacPro 2012 vs MacPro 2013Apple is known for its ease of use in computing. It invented “desktop publishing” – which today sounds almost funny. Prior to the Macintosh and the LaserWriter, the ability for people to craft a page of print that had different sized type, photos, and print it themselves was unheard of (I know this is really hard to fathom for anyone born after 1984). They were the tool of graphic designers across the globe, the one people relied on to create everything from restaurant menus to revolutionaries handbooks. As Apple expanded the capability from print to video, the tools of the professional needed more horsepower, more options, more drive space, more memory. Apple saw things differently. Sure, the iPhone changed the world of communications, and the iPad finally made a device that could replace paper, but, the content that was viewed on these devices was crafted by the people who built Apple up- and stuck with them through some incredibly stupid moves.

And yet, the professionals are being shortchanged. The elimination of ports to be replaced by a plethora of dongles, memory and storage that can’t be replaced or upgraded, screens larger than 15″ for a portable no longer exist. Sure, Apple has changed the way they make money now- even though they fail to understand it (if Apple realized most of their profits come from app, software and content downloads, instead of device sales- they would have an answer for Chromebooks for education which are way cheaper than anything Apple tries to proffer and would have created an iPad priced to giveaway to newspaper subscribers to replace printing plants). The prices Apple charges for a terabyte drive in a MacBook Pro or a MacPro are now so insanely high, that professionals feel like they are being insulted when purchasing a new computer.

Apple doesn’t know what business it is in, at all. They are in the controlled content creation and delivery business, not a device or software business. The only thing that Apple should be worried about is putting content creation tools in the hands of the most people possible- and making it easy for them to monetize it through Apple’s secure and safe content delivery network. Cars are a distraction. Just because you can, doesn’t mean you should.

  • When you own a restaurant, you are really in the making people happy business.
  • When you are a school, you are really in the self-actualization business.
  • When you are an ad agency like ours, we’re really in the help you make more money business.

So what business are you really in? Really?

Marketing plans versus Operational plans

A recent reviewer of a RFP/RFQ response wrote this in the evaluation/scoring:

Plan provided is NOT a marketing plan it is a Operational plan. RFP is for Marketing not a replacement of the Administration.

People who think marketing is something separate from operations shouldn’t still be in business anymore. That myth should have gone away a long time ago.  Wisdom from Leo Burnett should be a good starting place, and he died in 1971.

  • “What helps people, helps business.”
  • “Before you can have a share of market, you must have a share of mind.”
  • “We want consumers to say, ‘That’s a hell of a product” instead of ‘That’s a hell of an ad.'”
  • “The sole purpose of business is service. The sole purpose of advertising is explaining the service which business renders.” 
  • “The greatest thing to be achieved in advertising, in my opinion, is believability, and nothing is more believable than the product itself.”

Considering the potential client runs a service business, funded with tax dollars, and is getting a failing grade on every count, (a local school district) a new operational plan and way to communicate the new way of doing business is the key to changing perception and their fortunes.

Marketing does not exist in a vacuum, it’s interrelated to everything a business does. Looking to management guru Peter Drucker, who died in 2005, we find yet another quote:

“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

If that doesn’t tell you that an operations plan is marketing, you should reexamine your boss credentials.

Everything a business does, reflects upon its brand. And the brand is a story that the world tells each other, based on what they think they know about it. Apple, Nike, Google, the great brands- have a story that people can share without a whole lot of prompting- and for the most part, it’s a positive one. Sure, each has its detractors, but overall, the Q-score and the buzz line up with the company vision and goals.

To me, Apple started out as a “bicycle for the mind”- a tool to exercise your further your ideas and to help you share them. Nike reached into the competitor in all of us, and gave us an uplifting mantra- “Just do it” and Google, knew long before the rest of us, that with great power, came great responsibility and stated that their goal was to “Do no evil.” It’s take over a decade for most people to understand the power that Google had harnessed.

thumbnail of Actions Speak Louder than words

Click to download a printable PDF

Great companies do great things and communicate those things often and consistently. But here’s the key- it’s not through words or ads- “actions speak louder than words” should be the mantra of every ad agency across the globe. Doing good is doing well. Talking about yourself is just talk, and often times, boorish.

Need an example of actions speaking louder than words? I was at a minor league hockey game last night. I’ve been around hockey for at least 50 years, playing and watching. In a freak instance, a players stick was flung into the stands, and a fan caught it. Granted, sticks can cost as much as $300 these days- but, the team had the nerve to send down a team official to take the stick back. The crowd booed for at least 5 minutes. Considering the home team was down 2 goals, the players had to wonder why they should be trying their hardest to win- when they were getting a steady raspberry. Would a marketing-centric company dare to ask for the stick back?

The story that the fan will tell now is “I got hit by a players stick flung out of the rink” and they came and took it away. Or, the proper response, “I got hit by a stick at a hockey game, while sitting in my seat, and they came and checked to see if I was OK- and offered to let me come down after the game and get it signed by the entire team.”

Operations is marketing.

 

 

Superbowl 2017: what evoked trust & created lust

Very few people can play in the NFL, fewer in a Superbowl, and even fewer win it 6 times. Tom Brady and Bill Belichick have better records with Superbowl wins than most ad agencies. Very few agencies get to play in the big game, and so those who do, go all out.

As do the critics the day after. And while there are plenty of opinions of what were the best and worst ads of the Superbowl, and there is the AdBowl and the AdMeter ad nauseum.

We look at ads differently at The Next Wave. It’s about effectiveness. Do they make their clients more money than they spent? Will they create good will with their target market? Will they evoke new levels of respect for the brand? These are the things that count with us. And most of it stems from the creative brief- is the campaign on target? Does it hit the right buttons?

Looking back at Superbowl LI or 51, or 2017, or the one where Tom Brady pulled a win out of his rear end, there were a few spots that performed incredibly well.The rest, helped the agency make money, or stoked some egos in the ad world.

The biggest winner was 84 Lumber. While they never could have anticipated their spot would get the GoDaddy banned treatment, it helped build some pre-game buzz. And while they and their agency don’t seem to understand how their ad was perfect, they lucked into something without knowing it. At least, from our read of the after game dissections.

84 Lumber had never bought a Superbowl spot before. Their ad budget doesn’t compare to that of Home Depot or Lowes. They don’t have the stores, the online presence, or the top of mind awareness. To most contractors, they go with the store that’s most convenient, has the best price, offers the best support etc. They don’t pick their vendor by their politics- and if they did, Home Depot and 84 Lumber are probably both as Republican as they get.

But, all of a sudden, with their “Journey” ad, showing the hardship someone is willing to endure to get to the border and become an American- only to face a wall, and then find the door and the final message “The will to succeed is always welcome here” they’ve done something that clearly separates them from their competition- they’ve won over every roofing contractor we’ve seen in the country- where Spanish has become the first language on rooftops. They’ve given the anti-wall people, a place to support, and while the country may have elected Donald Trump, more people voted for his opponent. They’ve carved out a clear point of differentiation in a whole new space that up until now- advertisers were terrified to wade into. There is already pushback against UBER for not supporting the taxi strike in NYC over the immigration restrictions, and some are canceling their Tesla orders because Elon Musk doesn’t hate Trump.

They may have spent $15 million making and running the ad, but, 84 Lumber got the talk around the water coolers that they couldn’t have bought for 10x that amount.

Budweiser also played in that arena, telling the real life story of how their founder made his way to America to brew beer. Another beautifully shot spot, its payoff was “When nothing stops your dream” which speaks to the public on so many levels, and brings a new respect for the hard work and effort that gets you to the top of your game. They don’t call it “The King of Beers” for no reason at all.

Budweiser is normally known for horses and dogs, and talking frogs, for them to get back to their roots in 2017, was a reminder to all of the work ethic we ascribe to being our collective story.

So far we’ve centered our discussion on the big production, high dollar, epic mini-films, so the next spot is going to seem like it’s coming out of left field.

Mr. Clean scored by building on a universal truth- at least to women, that the perfect man cleans up after himself. How you add sex appeal to a household cleaner, that sits on a shelf with a bunch of other products that no one really has a deep emotional attachment to- is something only a master of the craft can do- and this spot nails it. No superstars, no hype, just straight concept, executed exquisitely. Payoff “you gotta love a man that cleans” is a line that only Mr. Clean can own.

Then there are the spots that tried too hard. Sort of like the Atlanta Falcons for three quarters.

AirBnB had a political spot that was probably the cheapest to make- and was political as well, but coming from a company that had just got hoisted by their petards for not renting to minorities, they didn’t have the credibility to make a case for inclusiveness. Nor is their brand mark well enough known to rest on its own. “#weaccept” isn’t based on truth. And the online version has “airbnb” under the logo- the broadcast version didn’t.

We loved the Audi ad for the cinematography, and it even had cars in it- but, for Audi to try to talk about pay equality was a leap they didn’t have the right to make. The concept was one we’ve seen before- different execution.

This space is already taken. “____ like a girl” was Always- and they did it without insulting women. Need a refresher on how it’s done?

Hiring celebrities to connect your brand is always a risky move. And while we may pay attention to the ad because you hired someone we know and like, be it Jason Statham and Gal Gadot:

Wix you still suck.

Or John Malkovich for SquareSpace– yes, John, you’re an idiot for not buying your own domain name- and Squarespace isn’t going to build you a better website-

We’re not sure what Merecedes AMG is thinking, but the Coen Brothers should stick to movies. Peter Fonda, Easy Rider, biker stereotypes and Steppenwolf’s Born To Be Wild are throwing a bunch of easy to reach ingredients into a spot that is so totally off brief for a very expensive sport car for the 1% The testosterone is all in the wrong place. I wouldn’t be surprised if AMG dealerships saw more people cancelling orders than buying them after watching this clusterduck of the uninspired.

However, if you hire Christopher Walken to be Christopher Walken, and throw in Justin Timberlake for giggles with a cute take on his song and your brand name- we might actually forgive you and feign enough curiosity to buy your drink one time and see if we like it.
You go Bai Bai Bai.

And for all of your brands that don’t have your spot on your own YouTube channel and tagged correctly, you are failing internet 101. Sign up for www.websitetology.com now.

One last spot that used its placement as creative leverage was the spot for Genius, directly following Lady Gaga. Crossing her music with Einstein playing it on violin, complete with his bare feet, and the tongue full frontal made us take notice. Beautifully shot. Nice job National Geographic.

There were other spots we liked – Honda’s talking yearbook- but, did it sell anywhere near what it cost to use all those celebrities? We doubt it.

What did we miss? What do you think?

Unfortunately, the Effies don’t do a separate break-out for Superbowl spots, and of course, the whole genre was defined by Apple’s epic 1984 spot. But, then again, in 1985 Apple did lemmings- showing that genius in a Superbowl is as elusive as playing in the big game itself.

Insights