Monday, May 21, 2007

The 1% Rule

Reading a book titled "Citizen Marketers" by a couple of old acquaintances, Jackie Huba and Ben McConnell. They talk about the impact of social networks on products / brands / companies.

They talk about the 1% rule... the percentage of your audience who are also content creators. A couple of examples from the book: (1) Wikipedia. In June 2005, 7.4 million people visited Wikipedia, but only 68,682 contributed content or changes. That's about 0.9%. (2) Quickbooks community is an online forum that helps Intuit customers address software and accounting challenges. Of the 100,000 visitors in July 2006, 900 of them created new content threads.

This immediately reminded me of a post Adam left a month back about the challenge of forming an informal "innovation network"... people sharing their ideas, lessons, approaches in the name of furthering knowledge of innovation. I think the 1% rule is at the heart of the challenge. Most people want to consume content, they don't want to create it. You have to build up a lot of critical mass for the 1% to be self-sustaining.

Take this blog for example. We have a very small readership, and so consequently, more than 1% of us are "creators". But, it is essentially a running dialogue between a handful of people. We don't have the critical mass to be self-sustaining. If one of us drops out of the conversation, we lose a lot of momentum. And so the challenge with the "innovation network" - to build enough momentum that it takes on a life of its own. If we can figure out how to do it, I sure would love to be a part of it.

Anyway, bottom-line, be aware of the 1% rule. Find the 1% of people in a network who create content and leverage them, inform them, empower them. Where else have you seen this in practice? Where has the 1% been effectively tapped? Is there any way to engage / expand beyond that core group?

Helping inventors get to market

(Adam) I have been looking at different business models that companies have that operate in the loosely defined innovation space and have come across some interesting ways that companies are working with small scale inventor or just people who have ideas.

The first one is Davison (http://www.davison54.com/) who take the initial idea, put it through their workshops and then license the product to companies at the end. They seem to have a lot of products going through this process. It's also well worth having a look at the tour of their office, slightly kitsch but none the less fun.

Secondly there is Trevor Baylis' company (http://www.trevorbaylisbrands.com/) This is from the guy who invented the wind up radio and is now selling his expertise to others to help them realise their inventions. They charge £149 for the initial consultation.

I am assuming that these business models work on the basis of:

1. Finding a good idea
2. Agreeing a percentage of the licensing income
3. Creating a viable product
4. Doing the rounds of relevant companies and retailers
5. Licensing the product
6. Hope it makes money

Although this could be risky presumably these people have a good idea what sells, and use a similar model to venture capital.

Wednesday, May 16, 2007

Manage External Factors


I just returned from a trip to Asia... Japan being one of the stops. I didn't have a lot of time to soak in the local culture, but the one image that is burned into my brain is the line-up for Krispy Kreme donuts in Tokyo (picture included).


According to my Tokyo-based colleagues, there is a 60 to 90-minute wait for Krispy Kreme, from opening to closing, every day, rain or shine. That blows my mind.


Krispy Kreme is struggling mightily here in the US amidst low-carb crazes, South Beach and other diets. Whereas in Japan, dieting is less of a social issue. It's tough to anticipate external factors when introducing new products and services, but they have the power to make or break.
The question I have is how to appropriate respond to external factors / societal pressures. Should Krispy Kreme expand in Japan (and China for that matter)? If I recall correctly, amid the low-carb diet craze, Krispy Kreme released a drinkable donut in the U.S. Essentially, a donut-flavored milkshake... lower on carbs, but outrageously high in fat.
So, no answers - just questions. Companies need to include social / environmental factors in their ideations. In retrospect, I think many sessions I've been a part of have zoomed in too much to product details. How do you include external factors? How do you keep larger issues in the back of your mind when digging into a new product or service? Most importantly, what's your favorite kind of donut (and would you wait 90 minutes to get one)?

Tuesday, May 08, 2007

A new look at hypnosis!

(Adam) I was recently talking to a friend of mine who has set up a hypnosis site in partnership with a hypnotist friend. Initially their model was reliant on paid for downloads, basically you choose what type of phobia/ habit that you want to change, then download and listen to it.

However what they found was that the market was swamped with this type of offering (admittedly of very variable quality), and as such they were struggling to come high enough in the search engine rankings to be able to make this viable.

So what they decided to do was make it all free. Every download is free and you can download all of them if you want. Now this may sound foolish as effectively they are giving away their product for nothing, however what they are thinking is if they can get the traffic high enough the advertising revenue will be higher than what they would have made selling the downloads.

When talking this through I mentioned that it might be worth considering a privelege area to upgrade their customers to, perhaps for longer hypnotherapy courses or new availability.

Now whether or not this is innovation is debatable, what do you think and any advice on what they could do to push the industry further?

If you are interested the site is here:

http://www.free-hypnosisdownloads.com/

Marketing Society - Big Idea Seminar

(Adam) Hello, thought that i would post this in case any of you who are based in London are going to/ interested in this:

http://www.marketing-society.org.uk/main.asp?page=event-details&eventid=L-WS06007

Not much in the way of details as to who is going to be talking, but could be interesting. I'll be there so let me know if you are going.

I will post my thoughts on the event in any case afterwards.