I just finished reading a provacative article written by Steve Denning titled What Killed Michael Porter's Monitor Group? The One Force That Really Matters. It is a long piece but definitely worth reading for anybody interested in business or strategy.
The basic premise of the article is that Porter's Five Forces Model for strategy is wrong. The model has been taught in every business school and has been accepted globally as gospel by most people so it is a pretty ballsy thing to come out and say that the legendary business guru is wrong and there is a better way to think about strategy.
Having read the article and spent some serious time thinking about it, I think Steve Denning might be right. My current experience at Weebly convinces me that he is on to something.
Denning basically says of Porter's model:
"In the theoretical landscape that Porter invented, all strategy worthy of the name involves avoiding competition and seeking out above-average profits protected by structural barriers. Strategy is all about figuring out how to secure excess profits without having to make a better product or deliver a better service."
He argues that radical innovation focused on delivering more and more value to the customer is what sustainable companies have done to stay ahead and to deliver above average profits over the longer term.
"Instead of seeing business as a matter of figuring out how to defeat one’s known rivals and protect oneself against competition through structural barriers, if a business is to survive, it must aim to add value to customers through continuous innovation and finding new ways of delighting its customers."
Having been at Weebly full time since June and having watched the founders build the company over the years, I believe Weebly is a real life example of a company that lives and breathes this approach every day. It absolutely works and I am a definitely a convert to this way of thinking about business strategy.
At Weebly, we don't worry about the bottom line. We worry about our customers and the bottom line will take care of itself. We want to deliver steadily more value to customers. That's the beauty of the strategy. It is simple to understand, it doesn't take months of data analytics to pick a direction and there is no need expensive strategy consultants. All it takes just a clear view of who drives our strategy and our business success... our customers.
For example, whenever we talk about building new features, we always come back to how it helps customers. When we build a feature, it is never finished until our customers try it and tell us they love it. We never say "now we need to build feature X because competitor Y has it". When we decide to send an email to our customers (which we rarely do since they don't often add value) we always make sure that the email is going to have a net benefit to the user and their Weebly experience. When we work with partners, we take the same approach. When we partner with other companies we do it is because we believe we can help them add value to their users or they add a lot of value to our customers.
This all sounds really simple. I am sure every company says that their customers are the most important thing and every feature or product line they introduce is meant to make lives easier. Trust me, it isn't easy. It is surprisingly easy to believe that everything is going to improve a customers life and when you can send a single email that drives a lot of new revenue it is even easier to "just send it" and fall into the getting revenue today trap. All these things send signals to customers and they all matter, every single one of them. Being able to say "no" matters and it is the things that you don't do that often make the difference when you think about strategy like this. That's probably the biggest lesson I have learned in my time at Weebly.
I am definitely a convert and I have Dave, Dan and Chris (Weebly founders) to thank for it. This isn't how I used to think about strategy at all and am really enjoying being part of a company that thinks this way. It is making me a better executive for sure. There is an amazing amount of clarity to be had when you take this approach. When making money isn't the immediate goal and the customer truly comes first, you can really focus on the things that matter. It isn't easy by any means and takes a lot of hard work but the benefits are worth it.
There are a couple of books I recently read that I wanted to share with everybody. While I read both of these book back in February while on vacation, the lessons have stuck with me since then and I have seen a marked improvement in my own life. Once you read them, you will never look at yourself, your organization, or your world quite the same way.
POWER OF HABITS
This book by Charles Duhigg focuses on how to recognize and change the patterns that shape every aspect of our lives. Every single one of us has a bad habit we want to get rid of (nail biting, binge eating, procrastinating) or new habits we wish could stick to (going to the gym, being more productive). Well, this is the book that helps you understand why habits exist and how they can be changed. I have read several "habit" books before and where this one stands out is in the scientific approach taken to the subject. The research and examples are just more rigorous than any other book I have read on the subject.
Some examples shared by Duhigg include.
What I found after reading it though was that taking that first step was actually quite hard. There intention is there and the data was compelling, so why couldn't I just do what the book said and get going. Well, it turns out this little thing called willpower was standing in the way.
Roy F. Baumeister and John Tierney write a book on understanding the secrets of self-control and then how to master it. The premise of the book is that willpower actually operates like a muscle: it can be strengthened with practice and fatigued by overuse. Willpower is fueled by glucose, and it can be bolstered simply by replenishing the brain's store of fuel. That's why eating and sleeping- and especially failing to do either of those-have such dramatic effects on self-control (and why dieters have such a hard time resisting temptation). You learn not only how to build willpower but also how to conserve it for crucial moments by setting the right goals and using the best new techniques for monitoring your progress.
This is where both books read together can supercharge results. While we would all love to create healthy new habits or get rid of bad ones, often what stands in the way of that first step is the willpower to do something about it. Once you understand willpower and power of habits together, it is life changing.
Recently I have had discussions with people getting into sales for the first time and they all seem to ask the same question: "What are the basic rules I should follow to be successful at sales". There are plenty of rules and no lack of information out there on this very subject but I like to focus on the four things I think are undervalued by most. Here are my most important rules:
Sales is not selling, it’s understanding.
This is the single most important rule. Read it carefully. To be a great salesperson you have to care about the problems you are solving. The best salespeople I know put themselves in the other person's shoes or go out of their way to experience the problem firsthand. That's how you really take an interest in solving that problem. When you really mean it, people on the other side can tell and will trust you to help them. Actively listen, ask questions and really dig in.
Love what you sell.
As a salesperson, you are an educator. It is hard to educate somebody and be really compelling unless you love what you are offering. Do you use your product? Are you passionate about your company? If you don’t like what you are selling or aren’t passionate about it, quit and go find something else.
Pick up the phone.
Cold calling, cold emailing or meeting people at a networking event are all hard things to do for most of us. It is difficult to put yourself out there, to meet people and strike up a conversation. Most people worry that they will immediately come off as a "salesperson", which just scares others away. Be yourself, just a regular person who wants to learn. Remember the first rule and being genuinely interested, it works for meeting new people. Be interested in people, focus on listening and really caring. You will be surprised how many great people you will meet and some of those people may even buy what you're selling.
Understand that your product isn't always best
This is a hard one for most people to believe, but sometimes your product isn't the right solution. If it isn't, then don't push for a sale. If your product solves their problem, then so be it and push hard for the sale. If it isn't then help them find the right solution even if it is a direct competitor. You will always win out long-term. Plus, there is no benefit to selling somebody something they don't need. You will end up with unhappy customers and a bad reputation. It isn't worth it.
Lots of recent conversations with friends or family go something like this:
Friend: "Hey Nick, what are you doing for work these days?"
Me: "Running business development at Weebly".
Friend: "What is Weebly?".
Me: "The easiest way to build and manage a website. Try it, you won't believe how great it is".
Friend: "Did I ever tell you how clever and awesome you are. Oh, I am also going to check out Weebly".
I figured it was about time to give my readers a quick overview of Weebly.
Great Team Doing Awesome Stuff
I started working for Weebly full time back in July but have known the founders (Dave, Dan & Chris) for many years. They are great entrepreneurs, compliment each other very well, are building one of the greatest companies ever (in my humble opinion) and are general awesome guys.
The entire team at Weebly is extremely talented and passionate about making website design and management simple and easy, yet powerful and professional. I can't tell you the specifics in this blog post, but we are doing some cool stuff and our produce roadmap is exciting. That's why I joined the team and why the future is bright.
Why I Started Using Weebly (And Why I Love the Product)
Most people know how passionate I am about helping people (small businesses in particular) build their online presence. Back in 2008 I wanted to create a personal blog and website that allowed me to write about my passion for cars. I didn't want to hire a designer or developer since this was just a fun personal project. I tried wordpress initially and while it was easy enough to get started, by the time I tried to configure hosting, set up my domain to point correctly, hunt down a nice theme, upload the theme and try to get it working I was exhausted and had wasted about a week. Then I tried Weebly. It was so simple and easy that I was hooked.
The simple reason I love Weebly is that an idiot like me (with no technical or design skills) can build a great looking, SEO friendly website that I am proud to tell my friends about. I can do it quickly, easily and with a level of customization that makes it unique and professional. And I don't need a team of engineers or designers to get going or to maintain it, it is all under one roof.
Here are some current websites that I have built on Weebly or websites of friends and family who use Weebly:
What Is Weebly?
The easiest way to create and manage a website. Check out this short video that I think summarizes is best.
What Is Cool About Weebly?
An Unbiased Weebly Review
Here is an unbiased review that I found from a blogger recently about Weebly. Check it out.
CMC Critic - Weebly Review - The Website Builder that makes Web Design fun
Getting Started - Quick Links
Here are some quick links to help people get started with Weebly.
A lot has been said about Groupon in the last 18 months. While I have my own thoughts, it just so happens that this weekend I read two great articles that do a better job of explaining Groupon than I ever could. To be clear, I am not going to bash Groupon, what I do think is important is exploring the underlying question of what Groupon is worth in terms of enterprise value.
The two articles I am talking about can be found here:
Groupon is not a tech company. Why was it valued like one?
Musings on Markets: Groupon Gloom: Deal of the day or Death Spiral?
Both articles focus on this subject of valuation. The Damodaran valuation is an in-depth valuation exercise with clearly explained rationale and hard numbers (spoiler alert - Damodaran has done the valuation part for you if you want to know what the company is worth). The GIGAOM piece focuses on one simple, but incredibly important question which is what type of business Groupon is in. This is the part that gets interesting.
I don't want to rehash the articles (you should definitely read them) but it really is crazy that people think Groupon is a tech company. That is nonsense and always has been. Groupon acquires customers and collects payments via the internet and that is about it. Sure they have "algorithms" and "targeting", but the underlying reality is that without thousands of sales people cold calling every day, there would be no business. Groupon is a call center company.
There is no scale effect to their economics in the way there is with a true tech company so people should stop assuming rapid expansion of margins that economies of scale should create. Groupons grows by hiring more people to dial for listings. They may eventually find a way to sell more stuff to the small businesses they target, or pivot away and become a tech company, but they aren't today and their valuation should reflect that.
It is no secret that I am pretty excited about the prospect of a 2013 Grand Prix that I will be able to watch from the rooftop of my building. That's right, there will be a New York & New Jersey based Formula 1 Grand Prix in town.
To celebrate, you will see that Red Bull Racing's Show Car recently completed an adventure. Driven by David Coulthard, the 2011 Championship-winning RB7 toured Liberty State Park and its spectacular views of the New York City skyline and the Statue of Liberty. The RB7 then moved on to one of the main arteries linking New York and New Jersey - the Lincoln Tunnel. Wrapping up its American vacation, the RB7 became the first Formula One car to lay rubber on the Grand Prix of America streets in West New York and Weehawken, New Jersey, bringing residents out of their homes to catch the historic sight.
Just read a good piece by Alex Taub on The Most Important Part Of A Product Integration Deal. The key takeaway that every person in business development should remember is:
If you are trying to get your service/product integrated into somebody else's product, then I 100% agree with Alex's view which is if you cannot get the proper placement, you should walk away from the deal. These things always end badly if you don't get it right. The results will be bad, the partnership won't last very long, both sides are unhappy, typically the consumer experience will also suck - all bad things and a waste of precious time and resources.
This advice also works for people who are on the receiving end. If you are going to integrate a 3rd party into your solution/service, you should also make sure that placement is perfect. I know the pressure is often to do a deal and give somebody an integration and call it quits. It is also easy to give your own internal features a preference or better placement. That's not good enough. If you are going to have somebody integrate into your product, you should focus on the consumer experience above everything else. First, make sure the product is valuable to your users, that the experience is fluid and simple and that they can find it. That's good for everybody involved.
I just finished reading a great article on "Passive Income Strategies For Web Designers" posted at Smashing Magazine.
The article focuses on how web designers can find ways to earn passive income. The options examined in the piece were to sell themes and templates, write and sell an eBook and create a job board for designers. The writer does make it clear that this is just his experience so I don't think it was meant to be a thorough investigation of all the options. In saying that, I have seen this "type" article many times and have personally had enough conversations with designers to suggest that there seems to be some myopic thinking in this space. Note to designers: You aren't in the design business. You are in a service business, helping clients achieve their business objectives on the internet. Anything that helps your clients do that should be something you think about offering if you want to be successful in business. Designers are creative and love to create things, which is why most of the "passive income" strategies that I hear mentioned are based building something new - an ebook, a job board. It is very "me as a designer" centric view, which is completely fine if it wasn't for the "ways you can make more money" part of the equation. If you want to do more design things and make a little more money, then yes absolutely do the things mentioned in the article. If you want to make more money as a designer, then think about your clients and what they need.
The upsetting thing is that I have yet to see an article or have a conversation with a designer where they said: " I took a survey and spoke to my clients and they want ...". Ask yourself "What do my clients want? What are they struggling with? How can I help them be more successful?
Let's take a typical SMB as an example. A designer is normally the very first person a small business hires when building their online presence. Instead of just building them a site and maybe setting up their hosting, why not charge a monthly fee to manage everything for them? Site design updates, small content changes, keeping the site fresh, hosting and ongoing management all included in one price. SMBs don't particularly get excited about managing their own hosting or logging in to change content and this is of great value. It isn't design related and probably doesn't stir a designers creative side, but clients want it and it pays the bills. If you did this with 100, 200 or 500 clients, you are talking about a lucrative recurring revenue stream. I can hear designers arguing that it isn't "passive" but nothing ever really is so stop focusing on the passive piece and start focusing on how you can help clients succeed with services that scale. This is about seeing yourself in the ongoing service business.
I am not suggesting that a lot of designers don't already do this today. Reseller hosting has been around for a long time and many designers already manage hosting for their clients. At Weebly we have had tremendous success with our own white label designer platform that is designer to allow a designer to build, host and manage client websites in just the fashion I describe above. Obviously some designers are stepping up the plate.
What do you think?