April 13, 2009
Do it the Google Way
I finished reading Jeff Jarvis' new book What Would Google Do? several weeks ago and some of the 'what ifs' and suggestions have haunted me ever since.
The word haunt not because many of these ideas are not good ones and not because in some cases, they'd be applicable, but because it is written in such a way that it begs Google to be God and King of just about every industry on the planet.
Newsweek's intro on the book's advice: "you, your company, entire industries, and the U.S. government should study and ape the online juggernaut, or risk getting buried."
What echoed true for me were how many other online businesses are not thinking about the umpteen ways they could make money through the side door, something Google seems to master.
There's a great example in the book: "Wired's Chris Anderson projected that by 2012, Google could make $144 million in fees if it charged for directory assistance, but by foregoing that revenue, it could instead make $2.5 billion in the voice-powered mobile search market."
Start thinking about your business in those terms, far outside the box and you may discover two or three new business models you didn't realize you had.
You can no longer charge the old fashioned traditional way. And, by bringing customers into the dialogue before and during the planning stages like Dell and Starbucks have done, you can open a new level of trust and loyalty with your customers in a way that was not possible under the old rules.
Jarvis dives into industry after industry and gives us a glimpse of what a particular industry or company might look like applying Google's model.
"Retailers think of the internet as a store -- a catelog and a checkout. Marketers see it as their means to deliver a brand message."
"Politicians think of the internet as a conduit for their campaign messages and fundraising (and a new way to deliver junk mail."
"Cable and phone companies hope the internet is just their next pipe to own."
He suggests that they all want to control the internet "because that is how they view their worlds. Listen to the rhetoric of corporate value: companies own customers, control distribution, make exclusive deals, lock out competitors, keep trade secrets." He reminds us that the internet "explodes all of those points of control and abhors centralization."
In an all open world where those rules no longer apply, the more connections there are between companies and customers, the greater the value. The same applies to partners and even sometimes, competitors. Tony Hsieh from Zappos tells us a week ago in Las Vegas that if they don't have the product in stock, they'll redirect a customer to a few other sites that may. The ultimate goal for them is a happy satisfied customer who will come back again and again because of that experience, not keeping them inside their closed gates.
Google extends its network by supporting its economy of clicks and links with ads anywhere and everywhere possible. By putting ads everywhere and collaborating with media and other industries, it creates value for them and for consumers who see them in targeted locations all over the web.
Because of this, Jeff argues that middlemen are doomed. Doomed is a pretty strong word and there's no doubt, many will be. I think that 'smart middlemen' will reinvent themselves and offer a service of value that someone else can't do on their own, or more importantly, don't want to do or have time to do.
There will always be experts and many of them may still be middlemen. Just because someone comes up with a great idea for a business and knows how to innovate, it doesn't mean they'll understand how to communicate and engage with their customers in a way that is effective long-term. Geeks and inventors will need communicators and communicators will need geeks and inventors, regardless of whether we're talking about food, widgets, clothing, cosmetics or cameras.
So while Jeff argues that the clock is ticking for all middlemen and the question of their value is 'looming,' if a middleman can get smart about their reinvented offer or value, then they'll not only survive but thrive. Many will fight against change and go the way of the dinosaur. He notes travel agents, car salesmen and real-estate agents as three roles that fall into the doomed category.
He does assert however that Google can't and shouldn't do it all and that the world still needs "curators, editors, teachers and ad salespeople -- to find and nurture the best." Hear hear. Long live the nurturers who make my life easier and more efficient. I want more of them.
One of the things I love about the book is this constant nag: Decide What Business You're In. In working with small companies and individuals, it's remarkable how often this question is either overlooked or they have the wrong answer.
I had fun doing a little exercise around this theme. I wrote down a list of a handful of companies I have consulted to over the past decade and next to each one, their secret sauce, what industry they were in, and a one liner on their business model.
Putting on my WWGD hat, I came up with a variety of different businesses they 'should have been in,' where they could have perhaps taken in more through the side door than by going direct. The rules may have been different at the time, but some may have still applied and better yet, succeeded. Perhaps the VCs should have been thinking far far outside the box and taken more risks.
He takes Kodak as an example and its a good one. He writes, "if Kodak had realized soon enough that it was in the image and memories businesses (if it hadn't defined itself by the atoms it pushed and processed), it should have beaten Yahoo to the punch and bought flickr." (or at least a service like it)
Another great chapter is on new attitudes where there is an inverse relationship between control and trust. This is still being played out frankly and while there is more trust than not in my personal experience, the spammers, criminals and con-artists are emerging just like they always do when an opportunity presents itself.
But he acclaims with force that before the public can learn to trust the powerful, the powerful must learn to trust the public. We are already seeing this happen in positive ways with companies who are inviting customers to the table and showing the face of the CEO long after he or she has left the building. It's amazing what you can learn about a CEO through watching their tweets for example.
While we're on the topic of always on and always online, the Google world forces us to be both, whether we like it or not. Sure, its about transparency as everyone forces down our throats on every blog about social media and Web 2.0 again and again, but shouldn't it have always been about transparency?
Businesses who were ethical played by those rules even in the days when there wasn't an instant way to share information with customers. Those who were not ethical back then and are not playing the honesty game today are going to have a tough time hiding something or succeeding long term if they do.
That said, I don't believe that we have to wear everything on our sleeves and show all of our colors online just because others do. In the game of full transparency, if someone wants to list every company they have stock in, which brands they buy and why, which restaurants they support, and who they just had a business lunch with, great, but it shouldn't mean that we all have to.
We can be transparent without sharing every little detail about what we do and with whom. While I've come around to Twitter, the white noise still annoys me, the main reason it took me so long to dive in (I have an offline life: it's called trees and nature thank you). And there's still a ton of white noise but I'm learning to work around it because of the countless golden nuggets of value when you take the time. If we could encourage the community to share what they learned and what they know, rather than what they did, it would be much more useful, at least to this user.
As for letting it all hang out, be assured there are plenty of 'under-the-hood' secrets of companies customers absolutely LOVE, like Apple, Zappos, Starbucks, and yes, even Google, YouTube and Facebook who are writing many of the new marketing rules.
In a rare moment of not worshipping Google's rules and models, Jeff calls them on not revealing details of its ad revenue split with sites that run its ads, or its Google News sources. Some may argue that this information should be public but how open is still in debate.
Does it always serve a start-up company who only has two competitors to disclose their latest venture round and revenue early on? Note the word always. Doesn't it depend on the situation? Open yes. Honest yes. Transparent yes. Every little detail of a company's operations and its employees? No, not always.
One thing is for sure, the mass market as we once knew it is gone. Enter millions of niche products and services that we can market and buy regardless of where we are in the world. This is a beautiful thing and once we have better filters so we can more efficiently find what we need within minutes or even seconds, the world will truly be our oyster.
Culture & Society author Raymond Williams is quoted in the book: "Masses are other people. There are in fact no masses; there are only ways of seeing people as masses." Small is the new big baby so adapt or become a cassette tape.
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Very thoughtful & useful article. I especially appreciate your insight into the "what business are you really in" question. I might suggest that Kodak was really in the chemical business all along, but your point remains. Thank you for your insight about truly going outside the box. People like you make this great system of tubes really worthwhile. I look forward to reading more, and your Tweets. /Rick
Posted by: Rick Regan | Apr 14, 2009 1:02:47 PM