Back in March, I gave a talk entitled “5 Rules for Marketing in a New Media World” at the Economist Branding Summit in Shanghai. It was how to cope, as a marketer, with all growing choices and complexity of new media. The talk also draws on a venture capitalist perspective in both the US and China from working with entrepreneurs much more plugged in and creative than me.
Since giving the talk I have gotten a number of requests to see it posted. So here it is – download file. Also if you want it in Chinese, click here.
As marketing people we have often emphasized the power of proof. As venture capitalists, one of our jobs is assessing the value of companies that do not have a public market (and hopefully also maximizing that “value” in the final return to our investors). Interestingly it seems these two don’t always mesh. What do I mean?
A collegue of mine who runs a start up (and who is in the business of maximizing the perceived value of his company) pointed out what he called thePickle Theory of Value. It goes like this.
When you first start your company, you generally have NO concrete evidence that it will ever make money. No customers, no product, no revenue and quite the opposite of profits. Yet, if you do a good job of positioning the vision, the market opportunity and the team, you get an incredible amount of credit for the future value the company could create.
Then as you start going, you still get pretty much credit if you actually ship your product/launch your site etc. And it works (regardless of whether this really generates any real money). But you get hammered if it doesn’t.
Then this horrible thing happens. You actually get out there in the market. You start generating the initial evdience. You start to generate money. You actually have financial statements. And guess what, once you have something to look at, people look at it. And with this scrutiny the amount of credit you get for your progress is likely to go down. That’s the bottom part of the pickle.
Here’s the hopeful part. If you keep growing and keep making progress with some consistency, people start giving you credit for it continuing long into the future and the value you can command relative to the evidence you have goes back up again. (Witness Google’s PE).
The trick is to try to keep your company from having a long pickle.