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March 22, 2006

Pickle Theory - Proof and Perceived Value

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 the Pickle Theory of Value. It goes like this.

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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.

Posted by johnza at 11:15 AM | Comments (0) | TrackBack

SF Bags - The Art of the Upsell

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I love SFBags or Waterfield Design. They have the best most versitile laptop computer bags.

I also love some things they do in their site. Especially the build-your-own section. They ask you a bunch of questions to customize your bag, the fun friendly language of these upsells is great:

I wish more sites had this kind of personality.

Posted by johnza at 11:08 AM | Comments (0) | TrackBack

March 16, 2006

Economist Roundtable: Shanghai - March 28/29

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Really excited to be speaking at the Economist's Third China Branding Roundtable: Standing out in a crowd. It's at the Pudong Shangri-La, Shanghai on Tuesday March 28th 2006 - Wednesday March 29th 2006. To find out more, click here.

I am honored to be presenting along with Professor Lydia Price of the China Europe International Business School. We will be talking about new media and how to think about it. Anongst other things, she has written (and will explore here) a case study about China's Super Voice Girl that makes American Idol look like a Junior Highschool talent show.

Should be fun!

Posted by johnza at 10:27 PM | Comments (0) | TrackBack

March 8, 2006

Complexity in Motion/MSFT Repackaging: It's all my fault!!

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Once again simplicity is shown to be both so powerful and so easy to stray from.

By now many of you have seen the recent spoof video that shows how Microsoft would transform the simple, powerful, elegant packaging of the iPod. It is all very innocent and well thought out but step by step turns into the equivalent of an in flight catalogue.

If you haven't check it out here. It is one of the funniest things ever on YouTube.

I have to say, this used to be one of my areas back at the big M and I totally know each step that took packaging down this path. And everyone was logical, well thought out and reasonable to the many committees of very smart people that looked at it.

Beyond the box, Engadget highlighted the wonderful array of versions of Windows Vista coming:

Will be interesting to see the product selector application that ships with them.

Simple products should lead to simple messaging to simple packaging to simple offers to a simple purchase decision.

So remember:

Posted by johnza at 1:25 PM | Comments (2) | TrackBack