The march of Windows Metro inspired design

A while back I wrote a blog post saying I thought the forthcoming release of Windows Phone and it’s metro interface (plus subsequent Windows 8 release) would probably trigger a change in fashion with regards digital design. This was partially demonstrated by the MySpace new design also.

Seems this prediction may have been salient, as I’ve started seeing a variety of designs popup both on software and websites which clearly owe a nod and sometimes more, to the Metro interface.

What designs have you seen which look like bastard children of the Metro UI ?

 

Note the menu design on the Port du Soleil website navigation and the new AVG anti-virus navigation.

How Social Media is Changing Customer Service

After my little experiment in social media and customer service back in May 2010, I thought I’d follow up with this fantastic infographic on the topic (below) showing how brands which don’t embrace the new communication mediums are going to be losing customers and damaging their market presence in the future.

There are some great start-ups in this space, helping companies do a better job of managing their presence – not least Conversocial, run by my good buddy @joshuamarch

Every Customer Complaint Has A Silver Lining

Sometimes mistakes can have unexpected benefits.

My first internet company turned out to be a web development company (although it was never intended that way initially, we pivoted from being a localised business portal after I failed miserably to sell enough advertising for the site).

It was comparatively early days on the web, in 1998.

A few years later after selling the business, I looked back at our client roster and realised that the top 5 most loyal clients who had been with us longest, had all experienced a major problem during the first project we executed; but because we handled the problem well they had become more loyal than clients who had never had a problem.

Good service is so hard to come by these days, that when people receive truly good, honest service, it stands out disproportionately.

There's no escape from it.

Sebastian Coe in his book The Winning Mind notes that “Human error tends to be the norm”. It seems inevitably then that you or your team will make errors and most likely on a regular basis.

View these as an opportunity. Fixing a problem well for a customer will always result in more loyalty than they originally had.

Of course not all errors can be spun easily to a positive. With a slip-up which loses a position of strength in business negotiations, or with a pilot making an error causing a fatal aeroplane crash, it would be difficult to see any sort of lining – let alone a silver one.

Thankfully in the world of day to day customer care, most errors are not life threatening. They are usually more irritating and time consuming for your customer, than anything else.

Big companies almost always deliver such appalling service that responding promptly to a problem and then over delivering with a fix (preferably including a gesture of compensation or good will) is a huge pulsing exception in the darkness of unanswered complaints, blame and denial of culpability which brands and big business routinely dish out to us, their customers.

Don’t let your company fall to this fate.

Fixing a customer problem should be approached as an attempt to garner irrational brand loyalty. In other words, use it as a step toward becoming a lovemark in the eyes of your customer.

Johan Nordstrum. Customer service visionary.

You don’t even have to believe me. Read Delivering Happiness by Tony Heish, a book of his approach to customer service at Zappos, or read my article about Johan Nordstorm – who’s chain of stores in the US proved exceptional customer service and profitability are not mutually exclusive; or my older blog post on a similar topic – why do corporates make simple mistakes?

 

Are You Building The Right Thing?

It’s a question which internet entrepreneurs perhaps don’t ask themselves often enough.

Easy to say of course, but let’s be clear that it’s entirely understandable entrepreneurs don’t ask this question enough.

To branch out on your own to go and build the worlds ‘next big thing’ whether for consumer users or a fantastic thingy-wotsit for enterprise customers, you need to not only dream but suspend your realism-gland to actually take the risk to invest your entire life into acheiving what often feels like the impossible.

However there ARE actually things you can do to de-risk your start-up and increase the likelihood of your decisions about the nature of your service and the functionality of your shiny new thing, being right, not wrong.

Getting Others To Eat Your Dogfood (before you invest $500,000 in dog cans, entrails, label design and advertising)

I’ve learned the hard way that building the wrong thing is virtually inevitable unless you actively embrace a process against doing so. Once we got lucky and got it right, another time we worked out what we should have been building but by that time when we realised the error we’d been at it a while.

In summary, without testing ASSUMPTIONS you risk having already burned through a bunch of cash and being in a weaker position to a) get more cash and b) pivot, even if you do finally work out what is wrong with your product.

Don’t feel bad, even experienced entrepreneurs make the mistake of just accepting their own ASSUMPTIONS. Just look at Color (although at least they don’t have much chance of burning through all their cash – yet – as they’re sitting on $40m). Most start-ups -especially in Europe- don’t have that luxury.

Natural Delusion

The temptation to assume a product is not getting 100,000′s of active users is to say because “it needs X functionality”. This is almost always wrong.

It analogous to when Sales people come back and say “The problem is, if it just did X we could sell it.” In my experience it is usually the sales person selling the product in the wrong way or to the wrong people.

The simplest solution to avoid this problem is that BEFORE you start building your shiny new thing is to sit down and right out all the ASSUMPTIONS you are making about your product.

Then find the quickest, dirtiest way – ANY way – to test these ASSUMPTIONS and prove them right, or not. That means even if you do it all by hand, or fake your website automation and do it manually: in other words, whatever it takes.

Imagine building a time machine. Your assumptions are:

• People want to travel in time
• People will pay for travelling in time
• People won’t be so shit-scared they will never take the leap of faith to trust your technology

Three basic assumptions. The answer is to all three “yes”, right? well, perhaps; but until you have PROVEN it you really don’t know.

So you've worked out how to build a Time Machine, but will any one actually agree to try it?

The capital expenditure of building a time machine is high, the technology significant. Be much better to find a way to test if people really want to travel in time first.

Furthermore, what other features would people expect? 100% guarantee of not re-appearing with limbs in the wrong place? What risks and worries do users want removed before they will risk using the service? What should the price point be?

How could you test these assumptions?

Maybe set up a room at CERN, advertise in person at a suitable event where people have lots of money and ask them if they will book a trial visit to come and see the Time Machine.

Clearly, I’ve chosen an absurd example – but you get the idea.

Back On Earth

What did Dropbox do to test if it had demand for it’s product? While simple it is a big technological challenge to build something across as many platforms and as seemlessly as they have.

The answer is that investors were unconvinced of the size of the pain being experienced by users doing file transfer before Dropbox existed, despite the Founder having a list of 4000 people wanting a trial (i.e. existing services were NOT easy or slick, but was this a big enough pain that users in their 100,000′s would pay for a service like Dropbox? This was an assumption and there was no proof of an answer, no even quantitative evidence).

Not being able to build the service properly without lots of time and money, the Founder created a slick video, targetted at geeks, full of in jokes, to fake a demo of what his product did. 75,000 beta sign up requests later, he had a significantly larger weight with which to argue his ASSUMPTION was correct.

We’re No Longer A Start-Up (or we have a product!)

This also applies to to new functionality, a product or division from a larger company. Indeed, any enterprise large small funded or not which is trying to build something which involves unknowns.

With a healthy step back toward reality, one wonders if Richard Branson was testing ASSUMPTIONS when he started taking pre-orders at $125,000, years before Spaceship One even took off, to fly into the earths orbit. Would he have continued if no-one signed up and paid the money?

Unconvinced?

The Dropbox example comes straight from a new book called “Lean Start-up” which was launched last month at Techcrunch Disrupt. If you’ve not read it, I would recommend it 100%. Rarely does a book appear which could literally make the difference between your start-up succeeding or failing.

Eric Ries has done a brilliant job and although the initial blurb regarding the ‘nature’ of a start-up at first seems hypothetical, he soon gets down to examples of why proving ASSUMPTIONS is all important; and finally thanks to him, I have a far easier way to explain to first-time start-ups what they should be doing, before they launch into building a time machine.

Excerpt of his book here on Techcrunch; or better, just click below and order it now.

The Lean Startup: How Constant Innovation Creates Radically Successful Businesses

Virgin Atlantic: how one of my Lovemarks hurt me today.

Knowing I would be tight for time this morning after returning from a film premier in Harrogate, I tried to check in online last night for Virgin Atlantic VS003 to New York, but Virgin Atlantic’s website was broken.

As predicted this morning I was cutting it fine for time and tried to check-in online again; a similar problem, I couldn’t check-in. An online error.

Undeterred I ran on to the Heathrow Express, through Terminal 3 up to a Virgin Atlantic check-in terminal, to arrive right on the one-hour before departure deadline.

All the terminals were out of order.

The Human Touch

Five minutes later I was speaking to a service agent who was trying to be helpful.

Realising I was hand-luggage only she said it would probably be OK and she spent five minutes trying to get through on the phone to someone. Finally getting through, before she could even explain I was hand-luggage only, she was told the flight was closed and I wasn’t allowed through.

This was strange as it was before 9:55am. This is significant because Upper Class check-in closes 40 minutes before departure although today (courteous of a client) I am travelling cattle class; the economy check-in closes 60 minutes before departure.

It was only 9:45am (50 minutes before wheels up) so the flight could not have been closed because if it were Upper Class passengers would not be able to check-in.

The helpful desk agent apologised, looking a little perplexed.

I always try hard not to take it out on staff at the coal-face. Often these days they don’t have the authority or decision making power to help you (that by the way is another business problem I discuss here.)

So, off I go to the ticket desk to get pushed on to the later flight at 2pm (which incidentally is a nightmare for me because with only five hours in New York before flying on to Dallas, my stop over and meetings are ruined).

Show Me The Money

Andrea a pleasant South American chap says the good news is that they can put me on the next flight VS045, but at a cost of £120. I protest politely but Andrea can’t do anything.

He asks his manager. Computer says no.

I ask at least if I could have my favourite seat in economy. No. I’ll need to pay for that too.

May be at least then, Virgin Atlantic will grant me as a Silver Flying Club member ( soon to be Gold) lounge access so I can have the New York meetings I will miss somewhere quiet on Skype? No.

Err, OK. Can I pay for lounge access? No.

I keep calm despite my frustration and seek out the Virgin Atlantic floor manager, who I’m told does have the power to grant lounge access.

After politely waiting for her to finish dealing with a staff issue (a quick gossip about another staff member) I start to explain, but she cuts me off mid-explanation:

“We don’t give lounge access unless you’re Upper Class?” …her intonation is as though I’m asking the location of the holy grail. She’s all out of empathy today then and it’s only 9:45am. I pity the afternoon customers.

Practicalities

By 10.05am (the flight takes off at 10.35am) I have:

• Queued to pay the extra charges to bump flights
• Complained to the delightfully unhelpful floor manager
• Gone through security
• Am sat in Chez Gerard (another brand I have a history with) and have just ordered breakfast.

The fact I’ve done all this and the gate is yet to even close irritates me further, but thankfully Chez Gerard deliver on my brand expectations this morning: A warm polite welcome, good coffee, warm perfectly crispy croissants and soothing music.

Has this every happened before?

Those who know me will know I try and pack a lot into my life. That means sometimes I’m late. On the whole it is of course my own fault if I’m late, in so far as we are all responsible for our own decisions and planning.

Similarly it is definitely a passenger’s own responsibility to check-in by the deadline set; but it is also a brands responsibility to deliver on the service which customers rely on and arguably especially your regular customers.

• I knew I would be short on time, so I tried to check in online. Twice. The web site was broken.
• Then I tried at terminal 3, within the 60 minute limit, but the kiosks were broken.
• The check-in clerk recognised the situation and asked to send me through, but was prevented by someone else.
• The flight couldn’t have been closed, I only had hand luggage and were I Upper Class I’d have sailed through.
• The ticket agent recognised the problem, but had to charge me anyway (he even left notes on my account to that affect)
• The Virgin Atlantic manager was abrupt and had a naive approach to customer relations (perhaps how she got to be a manager..!)

Good customer service is about recognising a customer’s problem and empathising. That should be true whatever level of customer the person is.  Today’s $1000 customer may be tomorrow’s $1b customer.

More importantly, monetary value is not the only consideration. Some customers affect more influence regarding your brand than others, as my post here about the new economy of influence explains.

I do not expect any brand to do the impossible.

I recognise a flight has to close at some point, no matter who wants to get on board, but when rules are adhered to via blind process (or in order to make a quick buck, like Ryan Air) rather than for logic or good reason, that pisses me off.

And I’m going to tell people. Lot’s of people.

Brands become lovemarks for me because they exercise effort, common sense and actively behave as though they genuinely care about me – even though I realise it is in order to make a profit from me.

Pret (the British chain of sandwich shops) are a superb example of this. From their always polite staff, to sending a customer £70 for payment of his “time using the Pret brand”, to letting me off £3.45 for my lunch when I realised I’d left my wallet in the office (I repaid the £3.45 the next day) they always make me feel cared about. I also feel that the employees are empowered to make their own decisions and understand what the Pret brand stands for.

In the past I’ve found Virgin Atlantic to be more pragmatic than I have today. On top of this, I must have flown 15+ times with Virgin Atlantic in the last 3 years from London to San Francisco. I have a Founders Card which gives a discount (although I’ve yet to claim it) and I’ve met Richard a couple of times.

As a brand the important thing to realise is these things make my experience today all the worse not better.

Why? Because if you are dating someone for a month and they do something unpleasant, it hardly touches the sides. You can laugh about it in the pub with friends.

If you are dating someone for 10 years and you love them, then they do a similarly unpleasant thing, you can’t laugh about it. It hurts. It goes against your expectation and trust.

Loyal customers with your brand, which may be a Lovemark to them, are no different.

It’s ALL about me.

These brand ambassadors will sing your praises, but they’ll also be the first to call you out.

• They’ll get very pissed off, very quickly.
• They feel they should be treated differently.
• They feel they should be treated with extra care.

“Should” is the key word here.

Actually ALL customers should be treated with extra care; but what matters here is how these people feel, not the reality.

Your job with your brand is to manage your customer’s perception of a situation without pouring petrol on the fire.

Preferably, you want to be the guy wielding the fire extinguisher and without spraying it in your customers face.

The psychology of loyal customers

I buy in to the “poor little Virgin Atlantic” versus nasty British Airways myth because I choose to, not because I necessarily believe it.

It feeds my potential pleasure of a brand I generally enjoy.

It adds to my personal identity to associate myself with e.g. Virgin Atlantic, instead of British Airways. Therefore:

When you as a brand behave poorly I feel you’re attacking not just me as a customer but me as your brand.

Your bad performance means subconsciously I feel like I’ve performed badly, because a little bit of your brand has become me.

What is this lovemark stuff again?

The simplest definition of when a brand becomes a lovemark to a customer is when they make irrational decisions to choose that brand over another.

I’ve often in true Lovemark tradition gone against logic when booking my flights. Virgin Altantic are usually more expensive and I had an unlucky run in the mid 2000’s where seemingly every flight I went on had no entertainment system working. Until my last flight, I recently had a run of crappy seat locations, whatever class I was in.

Despite this I stayed with Virgin Atlantic; but now I feel like our relationship is on the rocks; but hey, as they say, better to have loved and lost than never loved at all.

The moral of the story is that a Lovemark is a double edged sword, both for the company and customer.

Handle with care Mr Branson, and now I’m off to get my VS045 flight.

I Love You, I Hate You: The New Influence Economy

The world of customer relationship management and brand management is changing fast; again. This is going to be a shock to many companies.

Some businesses have only just started to remember that their customers might actually be right, others have only just got their heads around CRM and being “online”. Others continue blindy on trying to save money by passing the leg work on to their customers and annoying us all in the process.

Entering your mobile number at a call centre in a cue, only to be asked it three more times once you get through, is just one great example.

Rude retail staff, telephone operatives and n employees who can’t speak basic English or empathise with customers are others.

The Enlightenment: 2011

The more progressive companies are waking up to the new economy of influence – better known as social media.

Klout and PeerIndex as businesses both exist for a reason. They purport to measure “influence”.

The passionate and vocal devotees (or detractors) of your brand online are fast becoming the kingpins of the next 10 years of successful brand building.

Ratings scores like Klout and Peerindex will become a new currency in a world of social networking, online endorsement, virality and brand reputation. Even some credit score companies are already experimenting these scores in to account and providing third parties this data alongside traditional scoring methods.

Brands need to wake up fast to the fact that the price of a ticket is no longer necessarily the most reliable indicator of the “spending power” of a customer.

Klout and Peerindex scores are fast becoming the standards of "reputation" online; but how do they compare and what do they really mean? It's early days...

What is the on-going endorsement worth of a customer with an influence score of 59 but who travels economy, worth over an Upper Class passenger who keeps quiet and never endorses your brand?

I don’t have the right answer, but it’s certainly the right question.

Who do you think you are?

I’ve flown with Virgin Atlantic since my first ever transatlantic flight age 22, to sunny Los Angeles. Since then I’ve been a devotee; but as this article attests, last time I flew I was very disappointed.

I’m was left wondering if my friend Milo had been with me, whether I’d have had the same experience.

That time around a train had broken down or something, but despite my arriving very late we sailed through check-in just 30 minutes before departure and were upgraded, although at least he had got there on time. I however, had not, nor was I checked in. The difference is, at the time he was working for The Telegraph.

However in my own way to my own audience – and certainly in my industry – I have some influence:

• I write for WIRED and do guest blog posts
• My Klout score is reasonable as is my PeerIndex score.
• I’ve invited friends to join Virgin Miles.
• I can identify specifically at least 25 people who I’ve directly influenced to fly VA over other airlines in the last 24 months, because Virgin Atlantic has been a lovemark of mine.

As with most things we love, we naturally endorse them and want them to prosper. They represent part of me. As I said in this post about brand relationships and lovemarks:

.. when you as a brand [a lovemark] behave poorly I feel you’re attacking not just me as a customer but me as your brand.  Your bad performance means subconsciously I feel like I’ve performed badly, because a little bit of your brand has become me.

It is true that influence scores have their problems and on these the two specific companies mentioned (here’s another bloggers overview of PeerIndex and Klout) although they are the current market leaders, the jury is still out.

The Context of Influence Matters

Who are they the influencers of? If I have 10,000 followers on twitter who are all unemployed, or worse all spambot fake accounts, how influential is that? ..the answer is of course not very.

Both services (PeerIndex top radar image, Klout bottom list) try to work out WHAT I'm influential about. Klout lists me as influential about "Germany" ... clearly there is still some work to be done!

These things are changing though. They are becoming more sophisticated. This is inevitability; they will become more accurate.

Smell the coffee anyway

Consider where we are today in reputation scores as the AM radio of the early 20th Century; rough, low fidelity, all a bit hit and miss. We’re not going to have to wait 100 years for it to improve before we get to DAB digital Stereo radio. Try 5 years.

So listen up Virgin Atlantic when next time you give me crappy service, or maybe I’ll respond to that Executive Club email from British Airways, or maybe I’ll send tweets, or write a blog post. The inherent viral nature of social media means these outbursts can have disproportionate impact.

Not significant perhaps you might think, given that I’m just one passenger and I’ve probably only taken nudging thirty transatlantic flights in my life; and they weren’t even all Upper Class?

However, you must also consider the influence of the people I influence

To fully measure influence you need not just context but to understand the TRUE reach of an influencer. That becomes both computationally challenging and inherently hard.

What is my endorsement for the next 15 year’s worth to your brand?

What is it worth to your competition?

If your company’s brand does not get its head around the new economy of influence now, you’re at best missing an opportunity and at worst inviting persistent damage to your reputation; and therefore your profits.

On the horizon are even more advanced interpretations of brand popularity which take the influence of individuals and brands, combine it with a sentiment for popularity, public opinion or value within a virtual currency and publish it for all to see. Empire Avenue is just one of these new indexes, entirely virtual in nature based upon 1000′s of peoples social networks, virtual investments and reputation.

Microsoft is using Empire Avenue to profile the popularity of it's Xbox brand in Empire Avenues Social Stock Market

Brand ambassadors are the future of your business and will disproportionality impact your bottom line – that fact is here to stay.

 

Five Great Reasons To Attend MLOVE 2011

As if the onslaught of social media, real time feeds and micro blogging is not enough distraction, there is an ever growing list of events trying to grab our attention these days. So why should you invest the time and money in coming to MLOVE 2011? (Disclosure: I’m an advisor to MLOVE)

*** MLOVE starts evening June 22nd 2011 continuing to Friday/Saturday. You can still grab a last second ticket here -use my code “MLOVE-VIP11-Andrew” ***

• Mobile IS the Internet, it’s the future of us all. In 10 years, we’ll scarcely remember the days of tapping at our desktop or laptop PC. Our desktop PC –in fact our only PC – will be in our pockets
  .
• MLOVE was created to inspire you to approach your business, and ultimately the world around you, with a different perspective. At MLOVE we strive to be more engaging and create value for you through interaction and involvement
• MLOVE is held in a trusted environment where people can relax and speak candidly, in order to build real world off-line friendships to benefit your life and your business ambition
  .
• MLOVE aims to deliver the power, inspiration and education of TED with the irreverence, trust and freedom of expression, embodied by the famous Burning Man festival ..but with less dust
  .
• MLOVE will take you out of a regular hotel conference environment and put you in a 100 year old German Schloss, alongside peers who are guaranteed to educate and entertain you.

The MLOVE society is resolved to build on the success of MLOVE 2010 with a second Confestival in Europe which kicks off in just 36 hours and you can still grab a last ticket now!

Meanwhile, there will be MLOVE Camps throughout 2011; MLOVE Barcelona Camp was held in February 2011 after Mobile World Congress and further Camps in London and San Francisco are pencilled in for the Summer and Fall and conferences outside of Germany during 2012: help us.

Harald (MLOVE Founder), attendees and MLOVE advisors at the Barcelona MLOVE Camp 2010. More camps coming: make sure you're there!

Just Pissed Off A Customer or Client? Great! Use It!

I’ve said in past blogs that I have always been fascinated that after nearly 5 years of running my first real company (a web development company I sold in 2001) the customers who had been most loyal were those we’d screwed up with at the beginning.

Why did they stay?

Well, in short for me there are two reasons:

1)      GOOD customer service is SO rare that when you find it it’s like a life saving lagoon in a waterless desert

2)      The differential between good service, and bad service followed by amazing service, is so great that one can’t help feel obliged to stay – for all the human reasons we know about

Robert B Caldini in his simply fantastic book Influence explains why in far greater depth that appropriate here, but in essence if you’ve just annoyed a customer, this is a once only opportunity to turn this customer into your most loyal customer EVER.

We all make mistakes, even systems make mistakes. Most humans realise this, as we’re all human and fallible. The difference is how you deal with the result.

“Over-deliver” after a customer has a problem and you have a customer for life.

There are lots of obvious ways to do this. First, fix whatever the problem was/is and get it right. Second,

• Give something for free
• Offer a full refund
• Offer a future discount
• A personal call to apologise
• A bottle of wine in the post

However, make sure it is:

a) personal and sincere

b) at least in proportion, but preferable out of proportion (in the customers favour!) to what went wrong.

If only more corporates followed this mantra to the heart of their operations, churn would fall and profits increase. Most don’t, but they should.

The boys at Get Satisfaction came out with a great info graphic demonstrating this: i.e. that 68% of customers leave not because there has been an error or problem but because of the treatment they subsequently receive.

Most customer churn is avoidable.

I’ll explain next week why I believe corporates struggle and the simple steps than can action to avoid this epidemic of failure.

• Read more in an article I wrote for Techcrunch about customer service & Johan Nordstrom.

Build Something Boring Like Groupon – Then Execute Your Real Vision

When Groupon came out, I simply could not understand what the hype was about.

A random, untargeted mass group discount coupon spammed to me every day or week, with some discount which may or may not represent good value ?

Coupons and discounts had been around for years, but as is so often the case in business when the timing for a real explosion in take up is ripe the incumbent at that moment has the best chance of winning the day.

Whatever factors were relevant and converging at the time Groupon started it’s ascent (the discussion of which belongs elsewhere) they had reached critical mass and the Groupon team began hitting a home run.

As an entrepreneur, I should love Groupon. The thing is, it’s not a sexy business. Sending out coupons by email? If you’d asked me will it work back in 2008 I might have wrongly answered that the market was covered already (there’s a lesson there which people I’ve worked with recently have yet to learn!).

Financially though it is quite a sexy business, assuming you ignore the complaints of 50%+ of its business customers (more complaints here) and ignore the naysayers that claim Groupon has a vacuous model and point out that it is losing a lot of money. Yet more negative analysis from Techcrunch about Groupon here. That is a lot to ignore…

Launched in November 2008, they executed a classic city by city roll out starting in Chicago, followed by New York City, Boston and Toronto off the back of $1 million seed funding (only in the US would £700,000 be described as “seed” funding).

As a customer, the reason I’ve not liked Groupon is that it’s dumb.

I don’t want to feel like one of 10,000 mass consumers and most of the deals I am sent don’t appeal to me. They waste my time. Groupon should know what I like, not send me crap I don’t want; but there are enough users out there who the service DOES appeal to: 40 million plus users by most counts.

In under a year of Groupons launch copycat sites appeared like wildfire; within a mere 20 months we had another mulit-zillion dollar company being courted by the Googles and sighted as another start-up mega success. May 2010 Groupon bought European service MyCityDeal, helping secure their position as dominant player in the space.

Well their future isn’t going to be about emailing mass discount coupons ..and our relationship with Groupon as a customer is going to evolve and change…assuming the company doesn’t crash and burn post any future IPO.

But what IS their space?

My hunch about Groupons roadmap became clear when they purchased Pelago in April. Pelago had pivoted a couple of times with their consumer product Whrrl and although there were differences between Pelago and Rummble, I suspect (despite sitting on x20 as much funding as Rummble) they had struggled with some of the same early-to-market problems that I had at Rummble (a company the author founded in 2007. Trying to run a mobile-location based discovery tool for sharing your favourite experiences, with only a few smartphone handsets in circulation and pre-iPhone, was always going to be hard).

So what does the Pelago purchase mean? To my mind Groupons biggest current competitor is Foursquare and the leviathan of Facebook with its local deals.

Google seems to be struggling still to make an impact in the local social space, despite its’ dominance on the web with Adwords.

Groupon will grow into something which looks far more social and Foursquare-like than most people previously expected. The Pelago team bring a wealth of experience in how not to do this and will accelerate Groupon to something beyond a daily deals discount site. With a revenue stream and a base of 40 million users and growing fast, they have the reach and capital to evolve into a major platform. Foursquare is nudging 10 million.

The old school check-in review companies don’t want to be left in the shade either, with acquisitions like Qype buying Cooledeals, everyone is converging on the local deal space.

So Here’s The Beef

There’s a lesson here, which is that IF you can find the backers/investors with the long term vision and understanding (and that is hard to do) you can build a revenue generating company off the back of something boring in order to create something interesting – and wait for the market to mature in the process.

The big question is, was that the game plan all along? Did Andrew Mason have this vision from day one, or did it, like most companies, become clear on the journey. Mr Mason, feel free to complete the comments box below…

STOP PRESS: Foursquare announce a coupon sharing partnership; I guess the adage Keep Your Friends Close, Your Enemies Closer has not been lost on Dens. I wouldn’t be surprised if Groupon buys Foursquare, if he [Dens] ever agrees to sell.

..and more negative press on coupons and groupons: http://techcrunch.com/2011/06/11/google-offers-daily-deals-business-die/

Nokia: “Yuk, my grandma has one” or why chasing pure profit is bad for your brand

When a 6 year old reacts to your brand by saying “old Nokia, that’s bad [as a choice of phone]” you should know you’re in a lot of trouble.

I believe in Capitalism

I believe in Capitalism mainly because at a simple level, it prevents a lot of wars (you can’t fight people you want to sell to and make money from).  That’s a good a good thing of course; but many parts of entirely unrestrained capitalism are bad.

By un-restrained I mean profit generation devoid of other considerations: social impact, ecological, moral (etc) and the obsessive chasing of that profit.

What’s this have to do with a mobile phone brand which is perceived as irrelevant by children?

Slavery to the stock market (or your shareholders) via quarterly reports builds companies which do not perform as well as they could. This short termism, is actually the opposite trait needed by a business which wants to become a dominant global player or a brand loved – ultimately irrationally – by it’s customers. A lovemark.

Failure to see inevitable changes on the horizon (even by previously innovative brands) seems to be rife in the corporate world. The mobile and technology industry is no exception.

Blinkered In The Boardroom

I believe much of this stems from the board room, where quarterly figures – and bonuses for those C-level staff – usually get top priority. Why else would once innovating start-ups become rigid behemoths?

Protecting the share price is the remit of a traditional corporate CEO, no responding instead to the market changes and customer’s demands (and I mean the customer who is your market, not the stock market). Arguably, Nokia’s brand is failing for lack of responding to customer’s wants and needs.

Long before the iPhone was released, the Nokia N95 promised a revolution; but was too slow, too hard to use and without interesting applications. It was an evolution of every previous model, not a revolution.

Revolutions are not popular with shareholders, because revolutions create uncertainty. We all know you can’t have innovation without risk taking, an element of uncertainty and a healthy dose of revolution to create the next big thing.

Yet even today, Nokia still remains with it’s head in the sand – delusional even – about the realities in the market place. The new CEO preaches to the stock market, desperately trying to halt a further share price fall, instead of taking the drastic steps required to revolutionise the business.

When a child of 6 is saying:

“Quite old, 90 or something” or “My grandma has one”

and when 20-somethings are saying:

“It was cool when I was 14” or “it used to be good”

..that is who you should be listening to, not the stock market.

Children on the BBC's "Secrets of Superbrands" being asked what phones (thus brands) they think are good. Click to find this on BBC's iPlayer.

In fact, screw the stock market. An obvious and understandable course of action is the last thing you need to be doing. Unless shareholders are panicking about your change of course, you’re probably not doing enough to have any hope of getting your company back in the game, let alone leading it.

Other brands also struggle to escape their corporate stagnation.

Asked on the BBC’s recent Secrets of Superbrands documentary “if Microsoft were a person who would they be?” a 20-something replied:

“They would be old”

Another said

“Microsoft is like someone who has been divorced recently; settled down and is dull; but then is thrust out into the world after their divorce and has to pretend to be young again”

As the program suggests, they’ve even had to hide their brand from some, asked “Who makes Xbox”? the response from Xbox owners was “errr, dunno”. Presumably this is also why Microsoft created “Bing” and not “Microsoft Search”.

A fallorn looking Bill Gates during the 90's monopoly hearings. He's now long gone as CEO, instead doing great things for the world with his Foundation; but has Microsoft got the right stuff to be relevant in 20 years? Shareholders today probably don't care.

You Can Run But You Can’t Hide

I believe that running away from the inevitable will simply persist an enevitable decline. You need to fight it head-on . Microsoft should have called it “Microsoft Search” and then focused efforts on changing the entire core brand perception – instead of diluting efforts into a new brand Bing which won’t feed into the street-cred of other parts of the same company.

Sony was described as a “Middle class” person … “like all the other bank workers” or  “a reliable elder statesman”. Probably not the vision of a cutting-edge technology brand they’d prefer.

The reasons for these brand perceptions are complex and multiple; but business is driven from the top – by the CEO. The leader. The board.

They are the ones responsible for authorising and enabling radical change or at least, aggressive evolution.

Perhaps that is why Apple, was described as

“the type of person who invites you to their birthday party, but they you have to do exactly what they want to do all evening”.

Personality is important for leadership and for the brand. In Apple’s case, that’s Steve Jobs.

Steve Jobs's Apple was compared to a religion. It does, however, seem to be led by someone who believes in giving customers what they want, not what the stock market expects or demands

Listening to the stock market on a monthly – if not daily – basis might mean the CEO get’s his yearly bonus and makes the company look wonderfully successful short term …but only right up until it falls over a cliff into free-fall decline.

Groupon (allegedly “the fastest growing company in history”) is a great example of the fallacy of the markets, ropey reported earnings and the smoke and mirrors of financial reporting.

SME’s are not allowed to get away with such accounting hijinx, it seems so wrong that the corporates are – and everyone goes along with it (the Morgan Stanleys, the Goldman Sachs’s) because they have a vested interest. It’s all a big game for the major stakeholders and those taking these giants to IPO.

I wrote a post recently on where Groupon might be headed in the future; but if @DHH’s Groupon post is accurate then they may have to get there quicker than one assumes.

The stellar share price of Google and Apple are at least, on the whole, based on genuine risk taking, a real business model and a radical approach to solving problems and creating innovation.

In order to maintain their position, they’ll need to continue to look to their customers, not to the stock market or their short term share price, in order to maintain that success.

Perhaps Larry and Sergey recognised that, which is why Eric is no longer CEO.

How To Avoid: Yuk My Grandma Has One

Whatever your company size, don’t try and please your angel investors, your shareholders, your board members or your VC backers.

Please your customers alone and do what you think your customers will want. They are your real shareholders.