Platt Perspective on Business and Technology

Building a startup for what you want it to become 39: moving past the initial startup phase 25

Posted in startups by Timothy Platt on August 25, 2019

This is my 39th installment to a series on building a business that can become an effective and even a leading participant in its industry and its business sector, and for its targeted marketplaces (see Startups and Early Stage Businesses and its Page 2 continuation, postings 186 and loosely following for Parts 1-38.)

This is a series about startups, and this is a posting in that narrative that addresses business intelligence and its sourcing and development and use, as identified in Part 38 as the equivalent to the air we breathe for its immediate and ongoing importance for even just basic survival. And this is also, in many respects a risk-management focused series too, where good and effective information practices can lead to increased competitive strength and business vitality, and poor practices and their consequences there, can lead to disaster.

I began a discussion of Facebook in Part 38, and both as a source of actionable business intelligence, and as a platform for businesses to make use of that information through: smaller enterprises and startups definitely included. And I said at the end of that installment that I would continue its line of discussion here, by more fully discussing Facebook and how and why it has become so problematical and both for its individual members and the communities (and marketplaces) that they collectively comprise, and for other businesses that would buy access to their vast data accumulations and seek to make use of it for their own purposes. And I begin to address that by identifying Facebook’s information collection, management and commoditization policy and practices for what they are: a tightly interconnected whole that forms the supportive core and the actionable framework of their business model as a whole. And for purposes of discussion of that here, I will refer to all of this collectively as the Facebook gestalt.

What is the Facebook gestalt? I begin by noting the original meaning of gestalt, as applied here in thinking about and understanding the Facebook business model. A gestalt is a larger organized structure that might be natural in origin and nature, or that might be contrived and developed, that should be and even can only fully be viewed and understood as a whole and not as an analytically dissected collection of its perceived parts. Such indivisibility can arise for a number of reasons, with:

• Synergies that would be lost upon part by part description and analysis, and
• An accumulation of emergent properties that cannot be captured at a part by part level,

offering two possible categorically stated sources there. And I would argue that sheer complexity and particularly sheer obfuscating complexity can achieve that same result too. I would argue that all three of these possible reasons for our having to at least consider a gestalt understanding of what Facebook does here, apply in force. So what are they doing and how, in all of this at that company?

• Facebook requires that anyone: individual person or client/member business, who wants to access any content as organized and showing on any of their social media pages, must join their site.
• And when they join, they have to agree to the Facebook terms and conditions in place, with that including an agreed to acknowledgment of Facebook’s right to unilaterally change its personal privacy and information access policy and practices at any time.
• And as a core policy and practice approach, and to maintain “transparency” and “ease of immediate and unhindered use,” on the part of its members, and of all types, a majority of all possible access and visibility decisions that those members could in principle make for managing who can see what of their information, and under what circumstances, are set up as opt-out if they can be managed at all by the members involved. So members can in principle dig through the layered screens of their individual membership’s account management pages. But unless they do so, and except where opt-in is explicitly required by law, they would have to do this to limit or otherwise control their own data and the data that is posted by others to their page walls, as it shows there.
• And any and all information and of all types that is not explicitly opted out and for essentially all third party visibility, can and does enter into the marketable data pools that Facebook effectively commoditizes and markets and sells to its business partner/clients as they seek to more effectively place ads on member pages, in their targeted marketing campaigns.
• Facebook has more recently promised to redevelop their site design and their member page layouts, so as to at least limit the flood of unwanted clutter that has come to inundate any intended content as provided by those Facebook members themselves, or by their actual friends who are also on the site.
• This may cut down on the flood of spam YouTube sourced video clips and other distractions that come from other individual human (and robo) “friends.” But what would this filtering do for third party businesses that seek to market and sell through their targeted Facebook ad placements? It would increase the value of these ad placements by making them more visible to site visitors where they have been getting lost in the spam and related flood too, and degraded in value from that. And it would increase the pressure on those marketing businesses to buy their marketing and advertisement placements more carefully and on the basis of a more refined understanding of how to reach their targeted share of the overall Facebook community. And this means increased pressure to pay more for Facebook’s member-related and member-sourced data.

All of the puzzle pieces that I have just made note of here, fit together, and in ways that cannot meaningfully be parsed apart, and certainly since Facebook as a whole, reached and surpassed a threshold scale in which it became an essential social media channel and for millions: hundreds of millions of people. (There, Facebook claims to have some two billion active members: actively posting member accounts. So if I pick a number that is probably at least of the right order of magnitude, and assume that somewhere around two thirds of those members are robotic in nature: artificial specialized intelligence agents that have been set up and that are run for trolling and related ulterior purposes, that would still leave a very impressively large number of actual human members – at up to 700 million and maybe more.) Either way, two billion or 700 million: that represents an overall target market that few if any marketing businesses could afford to simply walk away from and ignore. And its reach and its commonality of use make it essentially impossible for vast numbers of individual people to simply walk away from Facebook and ignore it too, and certainly when their actual friends and family are on the site too, and posting there and looking for new posts there too.

This, up to here, has outlined something of the conceptual and business process tangle that Facebook offers. They do not charge members to post to their site or to read other members’ pages there with their showing content: at least with direct monetary fees. But they do in effect commoditize those members and harvest their information, and the information attached to their pages by others and with that interconnections metadata included. And they do so the way cattle are harvested for their cuts of meat, to put this somewhat bluntly.

So what should a business do, that sees what might perhaps be an overriding need to be on Facebook and to market their offerings there? What should such a business do when Facebook as a corporate entity makes it so compellingly attractive to them to market and advertise through the site and for doing so much more there too, such as making online reservations (at restaurants and more) and for posting and reading community-sourced reviews and more?

I am going to offer one modest proposal in the direction of addressing that challenge here. Business members of Facebook need to have and use an option whereby they can specify and filter, where their marketing and sales content shows on the site that is limited very explicitly to potential viewers who have opted in to see them. This, in principle, could mean those businesses having an option to send a link to a customer or other who has reached out to them, that would take them to a page where they could specifically opt-in then and there if they so choose. There are ways to do this, and even with that meaning those Facebook members being taken to their own accounts management pages to opt-in or not, though that is only one possible way to manage this type of access agreement transaction. My point is that those member businesses need, and should demand some form of obligatory opt-in for how they do and do not show on the site and to whom. And it should be one that they and their customer base and its members can actively control, and without anyone involved there falling through the cracks in that is currently a way too opt-out only environment.

Facebook would claim that they are already opt-in for member data access. But the more complexly comprehensive and the more complexly interconnected their information management systems become, as can be expected with increased systems scale, the more likely it becomes that any intended opt-in will become compromised as alternative database search query access routes lead to the same result of what amounts to direct member data sharing.

I am going to step back from the specific example of Facebook in a next series installment, to consider online marketing and sales as whole, as they are information and access shaped and driven. And in anticipation of that, I add here, that I will have more to say about opt-in versus opt-out and how opt-out can and does find its way as a default into so many contexts that hold overriding risk management and quality control management significance. And I will discuss this from both a consumer and a small business perspective.

Meanwhile, you can find this and related material at my Startups and Early Stage Businesses directory and at its Page 2 continuation.

Planning for and building the right business model 101 – 44: goals and benchmarks and effective development and communication of them 24

Posted in startups, strategy and planning by Timothy Platt on August 10, 2019

This is my 44th posting to a series that addresses the issues of planning for and developing the right business model, and both for initial small business needs and for scalability and capacity to evolve from there (see Business Strategy and Operations – 3 and its Page 4 and Page 5 continuations, postings 499 and loosely following for Parts 1-43.) I also include this series in my Startups and Early Stage Businesses directory and its Page 2 continuation.

I have been discussing three specific possible early stage growth scenarios that a new business’ founders might pursue for their venture, in recent installments to this series, which I repeat here for smoother continuity of narrative as I continue addressing them:

1. A new venture that has at least preliminarily proven itself as viable and as a source of profitability can go public through an initial public offering (IPO) and the sale of stock shares. (See Part 33 and Part 34.)
2. A new venture can transition from pursuing what at least begins as if following an organic growth and development model (as would most likely at least initially be followed in exit strategy 1, above too) but with a goal of switching to one in which they seek out and acquire larger individually sourced outside capital investment resources, and particularly from venture capitalists. (See Part 35.)
3. And a new venture, and certainly one that is built around a growth-oriented business model, might build its first bricks and mortar site, in effect as a prototype effort that it would refine with a goal of replication through, for example a franchise system. (See Part 36 through Part 39.)

I initially focused on those business development models themselves, with a goal of fleshing them out with the types and levels of detail needed for purposes of this series and this portion of it. Then I continued discussing and analyzing them as working examples of how a business’ founders and managers would more likely address a specific set of business performance requirements that they would face when working to make their specific enterprises succeed:

A. Fine tuning their products and/or services offered,
B. Their business operations and how they are prioritized and carried out, and certainly in the context of that Point A and its issues, and
C. Their branding and how it would be both centrally defined and locally expressed through all of this.

I have already at least touched upon all three of these functional processes and the goals they would be directed towards achieving, since Part 39 and leading up to this posting, focusing on Points A and B in those five series installments. My goal here is to continue this line of discussion by focusing in at least some detail on the above Point C, turning back to reconsider Points A and B in its context as needed. And in that:

• Think of Points A and B as addressing the issues of what a business does and how, and Point C as addressing how that business presents the fruits of that combined effort to the world.

And with that noted and my above-repeated business development models in mind, I begin to more formally address Point C and its issues by posing a set of three basic if essential questions:

• What constituencies and potential constituencies would ventures following each of the above-repeated business development approaches need to effectively reach out to and connect with?
• What basic messages would they have to convincingly and even compellingly share with those audiences, to create value for themselves from their marketing efforts?
• And where and how would they best accomplish this?

Interaction and two-way communications, of necessity, enter into all of these questions and into how they would be understood operationally, and addressed. And I begin considering the first of these questions with that in mind, by noting that the constituencies and potential constituencies that it cites, fit into at least two fundamentally important, distinct groups: at least potentially business and business model-supportive stakeholders, and outwardly-connected and response-connecting marketplace participants.

The first of those groups are effectively defined by the business development strategy that is being attempted if not already actively pursued, and certainly for purposes of this discussion with its topical focus. And to take that out of the abstract, let’s begin by considering my above-offered:

Development Scenario 1 (the would-be IPO business): Any business that would go IPO has to be prepared to secure the positive support and recommendation of a set of potential high level investors and investment influencers, as key early participants. And I begin discussing that by noting those influencers: stock market analysts and particularly those with real followings. They more generally do not any put any of their own personal financial skin in this game as they make their investment recommendations; they do not generally run out and buy shares in the companies that they positively recommend, as most respectable stock market analysts would see their own investment in a business that they have just recommended others to buy, as representing a conflict of interest challenge that they would rather do without. But they do offer more immediate business valuation and longer-term value-prospects analyses that others would and in fact do pay close attention to. And their analyses and reviews can go a long way in establishing the price per share that an IPO would at least initially go for, with the aggregate total valuation as determined from that for all shares offered, serving as a benchmark valuation of the business as a whole, at least for that day.

For an explicitly investor example, I would cite larger institutional investors and aggregated publically traded funds managers, and particularly those who seek out new ventures to add to their funds’ portfolios. Early adaptors can be crucially important there, and word of mouth, viral marketing is important there too where large numbers of individually smaller investors can play a determinative role in how an IPO roll-out proceeds and for what comes of it as an initial public evaluation of a new business and its overall value.

I have only touched upon a few of the business development-oriented stakeholder categories here, that an IPO-facing new venture is going to have to successfully reach out to if its IPO is to really succeed for it. But this should suffice at least for here in this phase of this overall line of discussion. Bottom line, all of the stakeholders types that I have even just briefly made note of here, as well as others that I could have delved into, are going to be looking for secure places that they can invest portions of their available liquid capital in, and with at least reasonable prospects for gaining positive returns on investment from their buying into this new business. And this brings me directly to the market-facing side of my Who-oriented first due diligence question as offered above, and the importance of coordinately marketing to that group of stakeholders too: purchasing consumers and end users.

That last statement could very reasonably be seen as my opening a door to a more general discussion of marketing per se and at all levels. But for purposes of this narrative, I would focus on how early marketplace outreach from a new venture, and early market-sourced response back to it, can and does fundamentally shape how potential business development-oriented stakeholders as just discussed, respond to a new business investment opportunity, or even if they do so at all.

Investors and investment influencers look for new businesses that have a real potential for success in their markets. Let me stress that point by noting that I am not necessarily saying that they look for already-achieved marketplace success and certainly at the level of revenue flows already achieved and profits reaped. Google, famously all but took over the search engine side to the online experience and for huge widespread demographics of internet users, before they really determined how best to monetize this reach and influence as a realized flow of profits and overall fiscal strength. But their early success at becoming the leading search engine, and globally, brought them tremendous cash infusions and positive marketing spin from day one of their first day of trading as a new IPO.

• Market impact and marketplace success drive investor decision making.
• And certainly in an IPO context, where vast amounts of liquidity as capital investment funds are at stake, visible success in securing the backing of investors can only serve but to enhance and strengthen marketplace position too, and for what that can say about rapid growth potential if nothing else.

I am going to continue this discussion in a next series installment where I will turn to consider my second, venture capital-backed business development scenario, from the perspective of this same Who question. Then after completing that, and continuing on to address the third above-repeated scenario as well in light of that same question, I will address the remaining two questions that this Who question came with, in a similar scenario-by-scenario manner.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 5, and also at Page 1, Page 2, Page 3 and Page 4 of that directory. And you can find this and related material at my Startups and Early Stage Businesses directory too and at its Page 2 continuation.

Leveraging social media in gorilla and viral marketing as great business equalizers: a reconsideration of business disintermediation and from multiple perspectives 16

Posted in social networking and business, startups, strategy and planning by Timothy Platt on July 26, 2019

This is my 16th posting to a series on disintermediation, focusing on how this enables marketing options such as gorilla and viral marketing, but also considering how it shapes and influences businesses as a whole. My focus here may be marketing oriented, but marketing per se only makes sense when considered in the larger context of the business carrying it out and the marketplace it is directed towards (see Social Networking and Business 2, postings 278 and loosely following for Parts 1-15.)

I have been working my way through a to-address topics list since Part 11, that would apply to the analysis and planning efforts of a still resource-lean startup, as an important at least categorical business type here. And I have been addressing the first of those points since then, leading up to an initial discussion of a Marketing and Communications oriented, working example that in practice has become important for a great many ventures and certainly as they seek to connect with their markets online and through social media: gorilla marketing, and the sometimes closely related phenomenon of viral marketing. And I repeat that list here, for purposes of smoother continuity of narrative as I continue and complete my discussion of the following Point 2, as begun there:

1. What types of change are being considered in building this new business, and with what priorities? In this context the issues of baseline, and of what would be changed from become crucially important, and even for startups where that means building new with an awareness of past experience elsewhere.
2. Focusing on the business planning and development side to that, and more specifically on high priority, first business development and operations steps that would be arrived at and agreed to for carrying out, and setting aside more optional potential goals and benchmarks that would simply be nice to be able to carry through upon too,
3. Where exactly do those must-do tasks fit into the business and how can they best be planned out for cost-effective implementation (in the here and now) and for scalability (thinking forward)? Functionally that set of goals and their realization, of necessity ranges out beyond the boundaries of a Marketing or a Marketing and Communications context, applying across the business organization as a whole. But given the basic thrust of this specific series, I will begin to more fully discuss communications per se, and Marketing, or Marketing and Communications in this bullet point’s context. And I will comparatively discuss communications as a process, and as a functional area in a business there.

The core of my gorilla and viral marketing example and its analysis for how these approaches work, or fail to work in practice, as begun in Part 15, was on the uncertainties that arise when measuring performance, or of even knowing how best to try to develop and gather data for the right performance metrics there.

I made note of the novelty of these marketing approaches and how that can contribute to uncertainties here, but I also and primarily raised the issues of how their real activity, and certainly for genuine viral marketing, takes place and takes shape outside of the business that is at least presumptively at its center with its marketable, consumer-facing products or services. And in the course of that, I both raised and challenged a “standard business process or business systems example,” based on gathering in and reviewing and analyzing sales and related data for marketplace insight, in order to set an initial starting point benchmark to measure the success of such a campaign from. And to complete the cycle, this insight would serve as feedback for shaping and refining next step products and how they would be marketed and sold too, and with any refinements added to customer service or support that this insight would suggest as needed, included there too.

I added at the end of Part 15 that I would continue that series-relevant example here, by at least offering some thoughts on how to make the measures and metrics used for this type of marketing analysis more rigorous and more definitively useful as a result. And I begin discussing that by explicitly acknowledging an admittedly largely reputed early online marketing data collection and analysis approach that I of necessity at least touched upon in that posting, but that I intentionally refrained from naming there for the baggage that that label carries with it: marketing for a maximum number of eyeballs reached and with that sought after as a performance goal in its own right.

Ultimately, marketing is all about message – and how many people receive it and how they respond to it, and it is about shaping that message to both maximize reach: that number of eyeballs here, and its effectiveness as a call to action. So the number of eyeballs reached here is vitally important. The problem with the earlier eyeball capture metric of online marketing’s birth and neonatal phases, was in how those numbers became essentially everything, and precisely because no one knew how to translate them into a more complete, realistically actionable understanding of the market and its participants, or of how to more effectively respond to that type of number.

I reprise this already ancient online marketing history, to highlight a challenge that the newer and still emerging opportunities of gorilla and viral marketing of today carry with them, that in fact has roots that go back to the early successes and failures of online marketing in the age of maximizing eyeballs reached, as a goal in and of itself.

Do some businesses already carry out successful gorilla and viral marketing campaigns now? Yes, definitely, and the same could be said for early online marketing, when way too many businesses were being misled by eyeball counts, but some thrived anyway. Success happens. But lost opportunities and failures do to, and businesses that seek to create effective gorilla marketing campaigns and that seek to create effective online contexts that would draw in and involve positive market participation, might benefit from the learning curve lessons from the “eyeball age” of their profession, too.

• What can you accurately measure? And by extension if nothing else, what types of at least potential metrics would more likely give you squishy, equivocal numbers that you would find difficult to pin down for their actual meaningful values?
• How much measurement precision do you in fact need, and from what types of data and for what types of analytical use?
• And what actionable insight can you directly gain or consistently and reliably develop out of the data gathered there, as per the first of these three bullet points, that would acceptably meet the accuracy limitation requirements of the second of them?

Eyeballs were easy to count, and simply by tracking the number of times in a period that a given page or other content unit was clicked to online by a site visitor. But few really knew how to effectively go beyond simply gathering data according to that first step metric, to develop actual market insight that a business could use, going forward.

• Should you track how long a site visitor stays on a page?
• Should you track where they arrive at that page from, or where they click to when leaving that page?
• Obviously, a click from, into a sales process on that site and initiating a transaction process there, conveys a different message and holds different marketing outcomes value, than clicking from a marketing-oriented page on a business’ web site to return to an outside search engine.
• There are, very clearly, a great many coordinate types of data that can be gathered in and collectively analyzed, in developing real and even profound insight from online marketing, and certainly from the more standard and established forms of it that we have all come to know. And most businesses now know how to develop real value from eyeball counts – when gathered in combination with suites of other data types that collectively can tell a very meaningful story with that.
• But the novelty of gorilla marketing with its more free-wheeling structures, and its dependence on outside and largely market-driven and market-shaped participation, creates new gaps in what needs to be measured and in what even some of our by-now standard metrics mean. And viral marketing with its fundamental grounding in the uncertainties and vagaries of the marketplace, simply confounds that challenge, and particularly when trolls, on the negative messaging side, and their equally false-flag positive message counterparts, enter this narrative.

And even if you discount what are essentially fake negative and positive messages and their impact on a viral marketing campaign, including where “honest broker” marketplace participants can and do pass along less reliable messages in good faith, you still face the metrics uncertainties that I raised in Part 15, and other challenges too.

I said in a Point 2 context that I would address the issues of better metrics. And up to here, I have primarily just focused on clarifying an understanding that this is in fact something that is still needed, and that we still face real knowledge and understanding gaps from the limitations of some of the marketing data that we gather, at least through more standard Marketing and Communications means. This brings me to the issues and challenges of big data, and to a point of assumption, or presumption if you will that I see as holding a key to doing better here. And that at-least piece to this puzzle that I would raise here, has both business effectiveness and overall societally challenging aspects, for how it is grounded in the open-ended data collection that drives it.

I begin this phase of this developing narrative by offering what might be considered more of a point of conclusion that I will work my way towards reaching in what is to follow, as organized into four bullet points:

• If you want gorilla marketing to work effectively for your business, as a generally developed creative ongoing effort, you need to know the market that you would reach out to and connect with, from your business’ side of the conversations that you seek to develop there.
• And you need to know that same market as its actively involved participants at the very least, help co-create this marketing reach with you from their feedback and reviews,
• And you need to know this, your market as well as you would know your own Marketing and Communications staff and the guidelines that they work under in a more traditional, business-centric orienting marketing campaign.
• And the urgency of these points of observation doubles, at the very least in a genuine viral marketing context, as does the degree of challenge in helping to make this type of marketing campaign work, and reliably and effectively so.

I am going to continue this narrative in the next installment to this series, where I will at least begin to offer an analysis of how big data enters into this line of discussion and why. I will at least briefly explain how and why I see this as an essential piece of this problem’s solution. And I will also at least briefly outline how and why I would cite its use here as holding potential for creating both business systems-positive and societally-negative impact, depending on how it is done and on how it is regulated.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 5, and also at Page 1, Page 2, Page 3 and Page 4 of that directory. You can find this and related postings at Social Networking and Business 3, and also see that directory’s Page 1 and Page 2. And I also include this posting and other startup-related continuations to it, in Startups and Early Stage Businesses – 2.

Building a startup for what you want it to become 38: moving past the initial startup phase 24

Posted in startups by Timothy Platt on June 17, 2019

This is my 38th installment to a series on building a business that can become an effective and even a leading participant in its industry and its business sector, and for its targeted marketplaces (see Startups and Early Stage Businesses and its Page 2 continuation, postings 186 and loosely following for Parts 1-37.)

I often refer to a business’ financials and its cash availability and flow as representing an equivalent to its life’s blood – vitally essential to its life and with any real interruptions in it quickly leading to business failure and even outright business death. And loss there, as traditionally documented in red ink, simply illustrates the general validity of this understanding as it has more generally been held by others too. Information and as both raw business and marketplace data and as processed actionable knowledge, can also be considered vitally essential to any business and on an equally ongoing and pressingly impactful basis. So if a business’ cash flow and related financials can be seen as being analogous to its blood supply, think of its information flow and availability, and access to accurate timely information at that, as being comparable to the air that that business would breathe if it were a living organism in a biological sense.

I have been addressing a set of risk management and related due diligence issues in recent installments to this series, that all directly involve the challenges of information development, use, storage and sharing, where business intelligence per se has become an increasingly valuable and sought-after marketable commodity in its own right. And the points of observation and conclusion that I have been raising and addressing here can only become more valid and more consequentially important:

• And both for their ranges of applicability within specific organizations
• And across all industries and business types that they would be included in,
• And for how their information management practices impact on the markets and the people who enter into them that those businesses ultimately all do business with.

I focused in the immediately preceding installment to this narrative progression: Part 37, on an increasingly pressing challenge that all information requiring businesses will come to face if they have not done so already.

• Legal requirements and restrictions as well as business ethics concerns, demand that personally identifiable and other sensitive information regarding customers and employees among others, that might cause harm to them if made openly publically available, must be protected.
• And I stress the importance of the ethical side to this imperative here, as a failure to safeguard sensitive, potentially risk-creating personal information can create marketing and image challenges for an inattentive business that can cost it financially and much longer-term than any regulatory agency-demanded monetary fine could. If a business comes to be seen in its target markets as being unreliable there and unsafe to do business with for its failures to safeguard information such as credit card numbers, potential customers who know of that failing will at the very least think twice before doing business with them and giving them those credit card numbers. And sales transactions with them are likely to slow down or stop as a consequence.
• Information, as noted above can be thought of as the air that a business breathes. And a failure to safeguard it, and a public awareness of that failure can become a noose around that business’ neck. But at the same time, businesses that seek to remain competitive find themselves in races to acquire and more effectively make use of seemingly ever-increasing volumes of this air: this all important information and both for more immediate transactional purposes as for example when developing effective customer relations and at point of sale events, and for their overall business planning and its execution.
• And that led me to a direct consideration of the challenge that I discussed in at least broad outline in Part 37 where the bigger and the more effectively, actionably organized and processed, big data becomes, the more of a mirage any attempt to anonymize individually sourced raw data that is included in it becomes.

I repeat and stress the above, both to allow for smoother continuity of narrative in this series and to make this posting more meaningful as a stand-alone narrative. And I also repeat, and I add expand on what I have already written of in this blog on this matter, because the challenge that I am raising and at least briefly addressing here is one of the most important ones that businesses are increasingly going to face and head-on, as this 21st century advances.

• Businesses increasingly face a conundrum here, from the conflicting needs they face to simultaneously wring as much possible descriptive and predictive value from the information that they hold as they possibly can,
• While at the same time limiting what can be inferred from it in understanding the people this data comes from, so as to explicitly protect their personal privacy and certainly as effective use of this information requires its sharing among wider ranges of potential stakeholders.

I offered a necessary part of any realistic resolution of this conundrum, when I noted the importance of actually checking to see how the progressively more inclusive big data systems in place in a business, might actually compromise any data anonymization and related risk minimization efforts that are also in place, through intentional effort made to “break” that anonymization as a risk management exercise. And that is certainly important for any business that initially develops those information resources, and certainly if any of their in-house developed and maintained data might go out of its doors, and either as marketable, profit generating commodities or as transactional data shared with supply chain or other partner businesses when carrying out specific sales transaction and related activities. But it also applies to acquiring businesses and certainly where they might intentionally or inadvertently further share this, and where their big data accumulation, aggregation and processing might further degrade any still-effective data source anonymization that was still in place from its various individual, more original sources.

I said at the end of that posting that I would turn here to more fully consider the three basic participant classes that enter into all of this, in light of the issues that I raise here:

• Data sourcing and providing businesses (which might or might not actually be data aggregating, developing and selling businesses as determined by their business models),
• Data acquiring and using businesses, and
• The original sources of all of this data with that ultimately coming to a large degree from individual consumers and customers.

I in fact begin this next step analysis here with businesses that explicitly gather in, aggregate, develop and sell individually sourced data as at least a key part of their business models, as explicitly cited in my anticipatory note as offered at the end of Part 37. And I do so at least in part with a goal of explaining why the white hat hacker approach to testing and validating any data anonymization system in place in a business, as touched upon in Part 37, cannot succeed, and certainly if it is employed as a stand-alone solution to this problem and not simply as one brick in a larger and more inclusive edifice. And I begin this with what has become the publically visible poster child if you will, for how not to behave as a business as far as personally sourced information is concerned: Facebook.

I begin that line of discussion by at least attempting to expose and perhaps explode what has become something of an overly simplistic and even toxic myth. When you look to the laws in place regarding personally identifiable, sensitive, risk-carrying information, and when you follow the ongoing public discussions as more commonly address this challenge, you essentially always see the same small set of data types showing up. And I of course, refer to social security numbers and related government-systems sourced personal identifiers, credit card numbers and the generally three digit security codes that also appear in conjunction with them, full names and addresses and phone numbers, etc, and precise healthcare and health status information to add in at least one general information category to this list. These data types, and categories are important and they do in fact represent genuine sources of risk and exposure vulnerability and both for identity theft and for direct monetary value theft and for other immediately impactful risk-creating reasons. But it is a mistake to focus essentially entirely on this smaller set of possible high value targets, for use and possible misuse. Ultimately the real risk can come from the cumulative amassing of vast and even seemingly open-ended amounts of individually sourced information that is in and of itself not sensitive and compromising but that holds a potential for collectively causing harm.

I only touch on one aspect of that possible and progressively more likely exposure problem in my here-continuing discussion of data anonymization through selective redaction, as begun in Part 37. And I only point beyond that to one small part of how such big data can be used for harmful purpose when I go beyond credit card number exposure and the like as more commonly considered, to make note of what Cambridge Analytica did in its efforts to subvert elections in the United States and elsewhere, beginning in 2013 (and also see Facebook and Cambridge Analytica: What You Need to Know as Fallout Widens.)

Facebook and its executive leadership have been called out on this, and more specifically for how their business practices in organizing, commoditizing and selling access to their members’ data made a Cambridge Analytica scandal both possible and even inevitable. But that is still only the now-visible tip of a much larger iceberg.

I am going to continue this discussion in a next series installment where I will, among other things discuss how Facebook incentivizes large, and even vast numbers of small businesses to use their platform for any online connectivity with their customers that they might enter into, in effect forcing those business’ customers to join Facebook if they need to online connect with these small business members. I will also discuss how Facebook sells information, and the impact of this on businesses that buy rights to it, and that buy advertising space on Facebook member pages that they target as members of specific market audiences based on this data. This will, among other things mean my specifically addressing the opportunities and challenges that startups and other newer businesses face as they make their due diligence, participate or not decisions here. And I will, of course, discuss the impact of all of this on individual Facebook members as they share more and more and more of their information through the site and with all of that going into Facebook’s marketable and sellable databases.

Facebook is currently, as of this writing, rolling out a new site design that is supposedly more privacy oriented and protective and that would be freed from at least a significant amount of the paying business sourced and other “friend”-deluge that floods most individual Facebook user’s pages now, drowning out any shared content that they might wish to see from people who they actually know. I will discuss their new website design roll-out too, where bottom line, data and member data in particular is still going to be Facebook’s most valuable marketable product and the most important source of revenue that they have too, and with its accumulation and sale still held as a central feature of their still ongoing business model from before.

Meanwhile, you can find this and related material at my Startups and Early Stage Businesses directory and at its Page 2 continuation.

Planning for and building the right business model 101 – 43: goals and benchmarks and effective development and communication of them 23

Posted in startups, strategy and planning by Timothy Platt on June 2, 2019

This is my 43rd posting to a series that addresses the issues of planning for and developing the right business model, and both for initial small business needs and for scalability and capacity to evolve from there (see Business Strategy and Operations – 3 and its Page 4 and Page 5 continuations, postings 499 and loosely following for Parts 1-42.) I also include this series in my Startups and Early Stage Businesses directory and its Page 2 continuation.

I have been discussing three specific possible early stage growth scenarios that a new business’ founders might pursue for their venture, in recent installments to this series, which I repeat here for smoother continuity of narrative as I continue addressing them:

1. A new venture that has at least preliminarily proven itself as viable and as a source of profitability can go public through an initial public offering (IPO) and the sale of stock shares. (See Part 33 and Part 34.)
2. A new venture can transition from pursuing what at least begins as if following an organic growth and development model (as would most likely at least initially be followed in exit strategy 1, above too) but with a goal of switching to one in which they seek out and acquire larger individually sourced outside capital investment resources, and particularly from venture capitalists. (See Part 35.)
3. And a new venture, and certainly one that is built around a growth-oriented business model, might build its first bricks and mortar site, in effect as a prototype effort that it would refine with a goal of replication through, for example a franchise system. (See Part 36 through Part 39.)

And more recently here, I have been analyzing and discussing these business development possibilities, for how they would address a set of three specific business performance requirements that are important for long-term success:

A. Fine tuning their products and/or services offered,
B. Their business operations and how they are prioritized and carried out, and certainly in the context of this Point A, and
C. Their branding and how it would be both centrally defined and locally expressed through all of this.

I at least preliminarily finished discussing the first of those due diligence issues: the above Point A, in Part 42, for all three of the above listed business development scenarios, briefly touching on Point B and C while doing so for how the three functionally interconnect. My goal here is to more fully and specifically address Point B and its issues as it plays out for the three business models under consideration here. And I begin by noting a point of comparison:

• The selection and fine tuning of what a business would bring to market as its defining source of revenue generating value might be influenced by outside forces, with that including market demands and pressures from their competitors. But ultimately, the most compelling drivers for this come from within the business itself, from its founders and owners and from its ongoing leadership as codified by them in its ongoing business model. And standardization of marketable, sellable production tends to be held as essential. So for example, if a business bakes rolls, all of its product should be of the same size and shape at least within very narrow preset limits and all should be made according to the same recipe for any given roll type offered and with tight quality control over ingredients used. And all should be cooked the same way and to the same doneness and all should packaged, and easy to package quickly for shipment and sale, in the same way too (bringing Point 3 into this narrative here too.)
• Higher level, internal to the business decision making plays a very significant role in the What and How of their business operations as actually carried out too. And that can mean standardized work performance patterns that significantly mirror those just noted for what the business would offer to its outside world. But when you look beyond the officially expected as detailed there, to see how business processes are actually carried out, you can often find that determined by a much wider range of in-house participants, with that larger stakeholder group also including mid and lower level managers and even non-managerial hands-on employees who actually carry out much of the work so specified. And this at-least capacity for variation, can be necessary and even essential if a business is to be flexible enough in order to be able to accommodate change and the unexpected, and certainly as it might more locally arise and even in day-to-day operations. Setting aside the questions and issues of when variation here is a positive and when it is a negative, it does happen and in ways and to degrees that would not be allowed for, or even make sense for products shipped out the doors and certainly within a single business and within a single one of its production runs.
• And outside considerations can and do have very significant impact on the operational What and How of a business too, and with a higher level of functional significance than might be expected in a marketable product context, and for entire functional areas of a business. Consider Finances and the outside mandated requirements of generally accepted accounting procedures (GAAP) as a perhaps best known example there, though outside regulatory forces can and in fact do reach into most if not all aspects of business operations, and for many types of businesses and for essentially all industries.

But for purposes of this discussion, let’s set aside outside-mandated, standardized demands and their pressures (as just exemplified here by adherence to GAAP) that all businesses would face, as leaving competitors on what at least in principle would still be a level playing field competitively. (Here, I set aside biased regulatory requirements that might for example explicitly favor larger already established businesses in an industry or sector, while thwarting possible new entrants there with new competing products or services that their more established peers would be less able to directly compete with.)

All three of the basic business scenarios that I have been discussing here since Part 33 are built around a premise of long-term stability and business strength, and all are built around a basic assumption of overall completeness in what they would carry out and be prepared to carry out operationally, in order to insure that happening. So for example, I did not include here, a fourth business development scenario in which a business founder, or founding team might build a new business venture with an explicit goal of selling it to some larger business entity through a mergers and acquisitions process, where:

• Some of the functional areas that they would assemble in it,
• And at least proof of principle development of all of its key marketable and sellable products or services might have to be very robust
• But where other more supportive capabilities might be left more vestigial as they would be provided by an acquiring entity that would be less inclined to have to pay for what to it, would be unnecessary duplications. (Think here in terms of founders who have ownership to a key next-step advancement patent or set of them, that seek to develop and prove the value of that holding in order to maximize its value to a buyer and its profitability to themselves.)

I offer this build-to-sell scenario, in the context of at least briefly mapping out something of a fourth case in point business development alternative. But the core details included in my tripartite description of it, also offers a simplified and even simplistic outline to what has become an increasingly complex options-rich range of business development possibilities and for a wide and growing range of business types: the three that I have primarily been addressing here included. And I at least acknowledge the legitimacy of that view of matters by posing some Point B oriented questions that the strategic decision makers of a new and forming, or more established and growing business might very well find themselves facing, which I phrase here as being asked of you, the reader:

• What are the core functionalities in this business that you would have to keep in-house, and develop and expand there as your business as a whole scales up (assuming once again that you would retain ownership of this enterprise and continue to lead it)?
• And what more supportive and ancillary functionalities and services might best be outsourced to third party provider specialists, where doing so would be more cost-effective and not carry additional new risk management issues? (And when and how might you do that and under what terms?)
• And focusing on functionalities and services that really should be maintained in-house, and particularly in distributed business systems, which of them should be managed from a home office or other more central facility and which of them should be managed and effectively owned, more locally?

At least aspects of what have traditionally been seen as Information Technology in a business are now routinely outsourced with that including server farms and enterprise-wide cloud storage and access management solutions, and the vast majority of web site and online presence support, or at least their more technical hardware and software underpinnings. And this type of outsourcing can and often does include call center operations and certainly for off-hours coverage when 24/7 customer assistance is a desired goal. And outsourcing can become an attractive option for at least areas of Human Resources and Personnel management too, to add a third increasingly common example of this here (see my series When and If It Might Make Sense to Outsource Human Resources, as can be found at HR and Personnel as postings 134 and following.)

I have in fact pushed this in-house versus outsourced dynamic to a lean and outsourced extreme in one of my earlier series: Virtualizing and Outsourcing Infrastructure, as can be found at Business Strategy and Operations as its postings 127 and loosely following (for its Parts 1-10.) More specific in-house versus outsource decisions become important in the types of context that I raise here, because they have stakeholder-responsibility and stakeholder-autonomy implications that can be shaped by a determination of precisely what type of business model and business development plan is in place. And to take that out of the abstract, consider the above-repeated business development Scenario 3, and at least potential areas for home office/parent company versus franchise facility/franchisee conflicts. What would and in fact should best be carried out and controlled system-wide from a parent company controlled and managed facility, and whether that means in-house maintained and operated or centrally contracted and managed-outsourced? And what should best be done by, and best be considered a responsibility of the individual franchisees in place and their local business outlets in these larger systems?

• Both overall cost-effectiveness and consistency, and market-facing standardization and the branding that serves as a public face to all of this, would enter into any realistic answer to those types of questions, and certainly as best for now solutions to them are to be sought out and implemented. And with that, I tie this back to the above stated performance Points A and C.

I am going to continue this narrative in a next series installment with an explicit focus on those market-facing issues, and with particular attention to Point C and its implicit questions and issues. And in anticipation of that discussion to come, I note here that we live and work in contexts that have increasingly come to expect and even demand social and environmental responsibility from businesses, and good corporate citizenship from them. So actually addressing the demands of Point C, of necessity have to include active consideration of Point B issues as well as Point A ones.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 5, and also at Page 1, Page 2, Page 3 and Page 4 of that directory. And you can find this and related material at my Startups and Early Stage Businesses directory too and at its Page 2 continuation.

Creating a clear and compelling focus when reaching out for venture capital funding support

Posted in startups by Timothy Platt on May 19, 2019

I have written a number of times in this blog, about venture capital funding as a means of jumpstarting a new business as it seeks to take off. And I have written here in at least general terms and about their overall average success rates from when they make their investment decisions. I have also written about the due diligence business planning and execution requirements that these investors require be met by the founders and owners of any business that they would invest in, as they seek to improve their changes of both preserving their investment capital in them and their chances of gaining significant profits from them. To take that detail out of the abstract, I repeat here that it is not uncommon for venture capital backers to insist on having a say as to who will carry chief financial officer responsibilities in a new venture, and particularly if that is not a strong suit for any of the founder entrepreneurs they are meeting with.

To repeat a significant detail here that goes a long way to explain both the prudence and the level of direct involvement that these investors show when selecting the new businesses that they would invest in, on average if a careful prudent venture capital firm invests in ten businesses that have met their basic selection criteria, then they can expect that:

• 4 of those ventures will have failed within their first five years,
• 3 will still be in operation but just be breaking even financially as based upon their actual revenue streams (thereby discounting business ventures that are being propped up from outside monies such as life savings from a founder),
• 2 will have reached at least a modest though reliable level of profitability, and
• 1 will have proven itself to be dramatically successful and profitable.

The problem is that it can be effectively impossible up-front to tell in advance which that one break-away success will be, or even which of these investment opportunities will ultimately fail. Standard and routine does not generally lead to break-away success and massive profits, even if it is more likely to actually succeed at least at more modest return on investment levels. It is successful businesses that are built around New and disruptively New, that if they work out are more likely to do so BIG. And this adds both greater uncertainty and greater risk into these investment decisions.

My goal for this posting is to in effect question, or at least expand upon the vision and understanding of venture capitalists and their business practices that I have just offered here. The 4:3:2:1 success model that I just repeated here is so often repeated that anyone reading this has probably read or heard it many times before, just to cite one of my above-written details. The above tells only part of a larger and more complex story and the better know of it at that.

My goal here is to at least briefly discuss in at least some more detail how venture capitalists actually make their invest or not decisions. And while that begins with a paperwork review of documents and document types that they request that a new venture’s founders provide, a key part of it also takes place when they actually meet with them: when the founders and owners of potential investment businesses get sit in a room or video conference with potential venture capital backers, giving both sides to these potential negotiated agreements a better understanding of who they might be working with from this, and how they think and act.

Carefully crafted written documentations are very helpful and informative, but they do not and cannot tell the whole story as they can be carefully drafted, and with third party expert assistance to insure that they effectively touch on all of the issues that investors would want to know about and see. They can be, in significant measure, the product of outside professional help.

People looking for new job opportunities and who do not have ongoing experience crafting effective resumes and cover letters on their own, or who do not see themselves as writing as effectively as they would want for this, hire the services of professional resume writers to help them tell their stories more effectively. Entrepreneurs who do not have experience writing business plans and who want to cover all of the bases for that more effectively, hire the services of professionals who make a practice of developing effective business plans. And when they want to favorably impress potential investors, and ones who would invest a significant stake in the businesses that they would pursue, they hire people who know from ongoing experience and practice, how to more effectively pitch a business too. So even if these documents are fundamentally accurate as to detail included in them, they might not actually say as much about the people who would set up and run this new business venture, as a potential investor in them would need to see.

The type of professional assistance that I just made note of above can and does include practice session face-to face-marketing pitches where coach consultants play the role of potential venture capital investors, and their clients practice presenting their new businesses and business ideas as viable and attractive investment opportunities. These exercises are generally carried out face-to-face and recorded, sight and sound so the entrepreneurs paying for this service can see exactly what they said and how, body language and wardrobe decisions and all. And this type of help can make a very positive difference, and certainly where that means these professionals helping their clients to be more comfortable and communicative. But either way: helping with the written documentation or with face-to-face live presentations, the people seeking support here have to have a genuine message to share, and a compelling one. And direct and preferably face-to-face meetings can be the best way to actually learn something about the people on the other side of the table.

I have read quite a few folders of supportive documents, and have sat in on venture capital pitch sessions. I was actually involved in initially setting up a business that helps individual venture capitalists and entrepreneurs seeking their support to meet each other, where investment seeking pitches are a key part of that. And more than that, I have had opportunities to discuss a fair number of the presentations that have taken place in these sessions, and with both the entrepreneur presenters who had just given their pitches, and with venture capitalists who were being pitched to. And I have seen from this, something of what does and does not work there.

My goal for this posting is to at least briefly outline some of the take-away lessons that I have learned from this experience, focusing on what the entrepreneurs in question need to bring to the table themselves – that they cannot buy from the hired services of a professional guide or coach or writer here.

I begin with the obvious points here, that I would express as a series of generally stated, orienting questions:

• What is your core driving business goal that would set your business apart from your competition, and that would most arguable generate a profitable income?
• And what supporting facts, that you can present as objective data and not just subjective opinion, could you briefly, succinctly and effectively offer that would justify and support your answer to the first of these questions?

The bulk of this can be and should be outlined and in sufficient detail in the written documentation that you would share with a potential venture capital backer, just to get your foot in the door with them. But you have to be able to effectively share the same basic message on your feet in a face-to-face meeting too.

You have to come up with the core lines of persuasive argument and supportive fact that would go into answering those questions, though professional help in better organizing and presenting your answers there can prove invaluable, and particularly for entrepreneurs who are more introverted and less comfortable with public speaking. But the single most important point that you can bring to this type of a presentation is a clear demonstration of your commitment to and enthusiasm for this new venture of yours. You want to be able to present yourself as being willing to walk through walls if need be, in order to succeed.

If two entrepreneurs offer factually similarly compelling pitches, as far as their business plans and financials details are concerned, but one of them presents with significantly more can-and-must-do enthusiasm, they are most likely going to get a positive response if either is, and the funding support that would follow that.

You need to convey a strong sense of enthusiasm and commitment, but one that is grounded in reality. And this means that you need to really listen, and both to succeed in understanding any concerns raised from across the table, and for when you respond to them. And you need to be able to present yourself as someone these investors can work with. Once again, this means listening. It also means knowing when and how to question a point made without coming across as simply arguing against it.

• As a vitally important point there, if you find that a potential investor is asking you questions that do not connect with what you are trying to say, or if they come across as making assumptions that you do not see as valid, always assume it was because you were not clear in what you said. Always assume that you might have left key details unsaid and assumed, that others not already involved in your planning could not know of.
• So be ready to ask clarifying questions to come into a more shared understanding of what you seek to say and of what you actually say; never take a confrontational approach or an argumentative one there; always seek to discuss these sticking point issues as if you and the people you were meeting with were on the same side of the table and simply trying to better understand each other while seeking a shared overall goal.

Any new business is certain to face unexpecteds and unplanned-fors. Venture capitalists look for entrepreneurs who will not quit in the face of adversity and who listen, and who will take and heed their advice as they seek to help course-correct for that. And effective venture capitalists do that: they actively seek to help with experience-based advice and guidance, in order to safeguard their investments if nothing else.

But the single most important point that I can raise here is that you never forget for a second, or seem to lose track of who you are pitching too. This means bringing everything that you say and all of how you say it into as clear and tight a focus as you can, for the people you are meeting with. These are busy people with multiple possible directions that they could invest their funds in. And if they have questions about who you are or what you would do or how, that is a real problem.

Think like a venture capitalist. They want to tilt the odds if at all possible to investing in fewer ventures that fail and more that become very profitably successful. So pitch for the likelihood of business stability and success in what you would build, and for how your venture would generate a genuine profitably that can give the people who invest in your venture, the returns on their investments that they want and expect. (Market analyses and related documentation and the details that you can succinctly share from them in a verbal pitch are going to vital here, but so will be your explanation as to how your venture would realize the value potential that this type of analysis would indicate. Think and plan your verbal pitches with your written documentation in mind, but with a goal of smoothly, effectively presenting their key details in more conversational form.)

But more than that, think like the specific venture capitalists who you are meeting with. Look them up, and their venture capital business online and really research them. What is a potential backer’s professional background like and where else have they worked? What industries have they worked in and how does their experience connect with or resonate with what you seek to do? Study them individually, just as they will background-research you. Are they an entrepreneur themselves, and if so, what types of businesses have they build and to what effect? What do they do professionally and to the extent that you can find out, what were or are their corporate cultures like that they have shaped, or preferentially worked in?

Can you find anything online or in print that they have written, professionally or more avocationally? What does this say about them? How do they express themselves there? Are there key words that your background research would suggest they would positively respond to? Are there key ideas or approaches that they favor that you might find of benefit in your venture too? Are there approaches that might be expected to turn them off? Apply this background research-grounded approach to any letters or other written documentation that they send you, as you read it and learn more about them in the process. And listen to what they say when and as you get to meet with them in person in the same way, and certainly when meeting with them to give your pitch for funding support from them. Listen to what they say and how they say it starting from your first introductory verbal exchanges and from before you actually get to stand in front of them to give your pitch.

And bring graphics and supportive information that you can share with the people you are giving your pitch to, that would support and enhance your message. This means keeping your sight and sound supports lean and focused; extraneous or ineffective content there can and will hurt you. And find out how long you will have to make your pitch and never run over that time limit, at least on your own initiative. Practice for timing as well as for content and be prepared to expand on the key points that you would make if asked to do so.

Going back to the points that I made about researching the people you would give these pitches to, that can be vital if you are to know what they would see as your key points, as they are the issues that they would ask for more about if anything. Here, “key points” are largely in the eye of the beholder.

I have covered a fairly significant amount of ground in this brief note; I have just scratched the surface of a complex and varied topic. So I will end this note with just one final organizing thought. Practice this. If possible start by pitching to potential angel investors with their perhaps tighter focus on the value of your business venture’s mission and vision statement, but who can take a more relaxed approach to your business fundamentals than a venture capitalist would. Take this meetings and these investment opportunities seriously in their own right, but use them as learning curve opportunities too.

Think of this as a funding support pitch counterpart, to practicing your job application interviewing skills in test runs with businesses and for jobs that you might not see as your top choices. And learn as much as you can from every try, practice or real, until you find and connect with the right venture capitalist who would be a good fit for you and your venture and who you would be a good fit for too.

You can find this and related material at my Startups and Early Stage Businesses directory and at its Page 2 continuation.

Leveraging social media in gorilla and viral marketing as great business equalizers: a reconsideration of business disintermediation and from multiple perspectives 15

Posted in social networking and business, startups, strategy and planning by Timothy Platt on May 18, 2019

This is my 15th posting to a series on disintermediation, focusing on how this enables marketing options such as gorilla and viral marketing, but also considering how it shapes and influences businesses as a whole. My focus here may be marketing oriented, but marketing per se only makes sense when considered in the larger context of the business carrying it out and the marketplace it is directed towards (see Social Networking and Business 2, postings 278 and loosely following for Parts 1-14.)

I began working my way through a to-address topics list in Part 11, that would apply to the analysis and planning efforts of a still resource-lean startup. And I repeat the first three entries in that list as I continue addressing them:

1. What types of change are being considered in building this new business, and with what priorities? In this context the issues of baseline, and of what would be changed from become crucially important, and even for startups where that means building new with an awareness of past experience elsewhere.
2. Focusing on the business planning and development side to that, and more specifically on high priority, first business development and operations steps that would be arrived at and agreed to for carrying out, and setting aside more optional potential goals and benchmarks that would simply be nice to be able to carry through upon too,
3. Where exactly do those must-do tasks fit into the business and how can they best be planned out for cost-effective implementation (in the here and now) and for scalability (thinking forward)? Functionally that set of goals and their realization, of necessity ranges out beyond the boundaries of a Marketing or a Marketing and Communications context, applying across the business organization as a whole. But given the basic thrust of this specific series, I will begin to more fully discuss communications per se, and Marketing, or Marketing and Communications in this bullet point’s context. And I will comparatively discuss communications as a process, and as a functional area in a business there.

My goal for this narrative-continuing posting is to complete my discussion of the above Point 2, at least for purposes of this series. Then I will build from that discussion thread and from what I have already offered concerning Points 1 and 2 in earlier installments, to delve into Point 3 and its issues. And I add to that, in further anticipation of what is to come here, that I have been discussing those and related topics in general business planning and development terms and certainly in this series. But this is a marketing and communications-oriented series at heart:

• Even when I write in the starting paragraph to each of its installments that understanding Marketing and Communications in a business, and making them work for it, requires an understanding of the business as a whole and its contexts, so everything can fit together and work together.
• So I will begin offering a specifically Marketing and Communications focus here too, in anticipation of pursuing that approach in a Point 3 discussion.

I begin all of this with the above-repeated (and here simplified) Point 2 as carried over from Part 14, by reconsidering its set of issues from a strictly here-and-now implementation perspective. And that means adding consideration of benchmarks and of explicitly specified final goals to this narrative.

Let me take that out of the abstract with a very real-world example, of a type I have seen play out many times in real businesses that in general have been well managed – but not for some specific “this.” That anticipatory starting sentence, indicating what is to come here, is probably too general and open ended, as I could easily and realistically cite any of a very wide range of familiar strategic and operational blind spots to this narrative here, that I have seen and that I have had to work with and work through, and with that type of discussion still meeting its vague goals. For a more “business functionality” example, I could cite and at least briefly discuss an inventory management problem where there are at least contextually recurring disconnects between in-house employee end users of stock or supplies held in inventory, and the ultimate suppliers of these items. But I will set that and similar case in point examples aside here, and simply note that for purposes of this narrative they are probably too obvious – and I have to add too easy, at least in principle to both proactively prevent and reactively correct from. Quite simply, these are types of issues that would be closer to the hands-on and more routine management experience of the mid-level and more senior management there, so they should start out better understood, and both for any problems in place and for finding effective ways to prevent or resolve them.

So I will pick a Marketing and Communications example here, and more explicitly, I will pick gorilla marketing as a working example (with a few references to viral marketing too):

• In a standard business process or business systems example, everyone involved generally knows the precise starting points and end points that should parametrically define what should be done and how and when, and certainly at a task-by-task or set business process by set business process level. This certainly holds for processes and tasks comprised of them, that fit into specific planned-out business operations chains and with those functionalities serving as tightly connected links in them. In that context, these functionalities should begin and quickly pickup in activity carried out, starting from the point in the overall work flow that they get their initial performance requests from and with any material, informational or other input that they would work from, coming to them from already completed work in that chain too. And they should in turn pass on their output to other next step processes or tasks in that chain and to the people who would carry them out as needed and expected too.
• But now let’s consider a gorilla marketing campaign, or an effort to jump start and encourage market-sourced and supported viral marketing on the behalf of a business. What is the starting point that you would use and what end points do you seek to reach, and how would you best benchmark performance in between those endpoint defining marks?

In principle, this might mean reviewing sales and related data to set an initial starting point benchmark to measure the success of such a campaign from. And this would take seasonal and other predictable cyclical sales patterns into account as well as any observably known longer term (non-cyclical) directional trends too. And goals would be set (e.g. to at least triple the number of positive shared messages about the company’s premium, up-market oriented widgets on Facebook in the next six months, with that translating to at least a doubling of sales for them by the end of this period.) Then performance tracking benchmarks would be selected and measured during that trial period to see how this marketing campaign is working, and to provide input for course correcting it if needed.

That sounds both reasonable and doable, and it should be on all measures as touched upon there, and certainly in principle. But in practice, all of these measures and the metrics that would track them can get very soft and uncertain. For an obvious example of how that can happen, consider the above-cited “positive shared messages … on Facebook.” What type of shared comment or update note, qualifies here as meeting that criterion? Is it sufficient to simply name one of the company’s widget models in text format, as long as nothing negative is said about it? Does it qualify as a positive if one of those widgets is prominently visible in a shared photo, as a matter of viral marketing product placement? What if it is just sitting there as what amounts to background clutter? How would that compare to photos where a widget is being actively used, and appreciatively so? What of mixed message updates that might include images or text that involves the company’s widgets, but in a partly favorable, partly unfavorable way? And how would the company take into account issues of visibility for any of this? Should they consider how many direct contacts such a content poster has on the site, and score higher value to marketing references that show on Facebook pages of account holders with larger numbers of Facebook “friends”? And I have not even mentioned the issues of robo-accounts and fake friending connections here, even though that has to be considered when somewhere over two thirds, and even something over three quarters of all Facebook accounts are almost certainly automated fakes, abandoned and unmaintained ghost presences, or both.

My point in all of that is very simple. Look over my original “reasonable and doable” benchmarking and goals description as offered just before the above paragraph. What defining elements of it can legitimately be assumed to be clearly defined and unequivocal besides the six month duration of this trial campaign? And objectively and given the uncertainties in everything else noted there, how realistic can that be too, and certainly as a meaningful timeframe for gathering in actionable value creating information and insight?

Gorilla marketing is nonstandard in nature. And that means at least some of the types of metrics that would be used, and that a business would want to use for performance tracking it, are going to nonstandard too, even as others will be completely familiar and well understood. Viral marketing might be initially instigated by a company that seeks to benefit from it, and people from their Marketing and Communications might even in fact seek to in some way steer it by selectively sending out marketing updates that would fit into it as fuel for further consumer sourced messages. But viral marketing per se is outside created and maintained, if it actually is viral in nature. And that adds novelty and a measure of the nonstandard to it too, and from the lack of message shaping control that that brings with it if anything. Outside sourced messages amplify and fade, and mutate and in unpredictable ways.

What I am saying here, in both continuation of what I have already offered in a Point 1 and Point 2 context in this series, is that while it might be both possible and easy to set endpoint goals and performance benchmarks for standard processes and procedures, the more novel they become, the more uncertain all of this becomes too. I am going to conclude my discussion of that set of issues in my next installment to this series, where I will at least offer some thoughts on how to make them more rigorous and more definitively useful as a result. And that will bring me directly to the issues raised in the above noted Point 3. Then after completing my discussion of that, I will turn back to Part 11 of this series to continue addressing its topics list as noted above here.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 5, and also at Page 1, Page 2, Page 3 and Page 4 of that directory. You can find this and related postings at Social Networking and Business 2, and also see that directory’s Page 1. And I also include this posting and other startup-related continuations to it, in Startups and Early Stage Businesses – 2.

Building a startup for what you want it to become 37: moving past the initial startup phase 23

Posted in startups by Timothy Platt on April 12, 2019

This is my 37th installment to a series on building a business that can become an effective and even a leading participant in its industry and its business sector, and for its targeted marketplaces (see Startups and Early Stage Businesses and its Page 2 continuation, postings 186 and loosely following for Parts 1-36.)

I have been discussing a succession of business intelligence-related risk management issues in this series since Part 31, and began discussing the challenges of data anonymization as a part of that in Part 36. And my initial goal at least for this posting is to continue my discussion of that complex topic, at least for purposes of this series.

I began discussing anonymization as a source of risk management concern when handling confidential and personally identifiable information, by pointing out how true, effective anonymization of original data sources is becoming increasingly difficult and even impossible at least as an effectively zero risk goal, as big data becomes bigger and bigger, and as it is more and more effectively organized into actionable patterns. To briefly reiterate the conclusion that I arrived at in my Part 36 narrative, the more comprehensive the overall set of data types collected and the more skillfully and comprehensively they are organized and processed into meaningful actionable patterns, the more and more likely it becomes that even just sets of what would seem to be anonymous data about some individual source, would indicate the values that must have been there for key individually identifying data fields that were redacted for anonymization purposes.

I then concluded Part 36 by stating that I would offer some thoughts here on how to move beyond this current and growing impasse where this tool: data anonymization has so significantly begun to fail us. Then after addressing that, as at least an initial first step response, I said that I will more specifically reconsider the impact that all of this has on:

• Businesses that provide big data as a marketable commodity,
• Businesses that buy access to it (startups included), and
• The ultimate sources of all of this data, with consumers and other individuals prominently included there.

And I added that after addressing those issues, I will circle back in this overall discussion to consider opt-in and opt-out options and systems, and the stealthy collection of more and more data and from more and more sources where neither of those choice possibilities are always meaningfully possible. Facebook’s user information comes to mind as a source of cautionary note examples there, and I will cite and discuss that business and its practices in this regard when I reach this point in this overall narrative.

• Meanwhile, I begin addressing that new list of topics to come here, with the question of how data anonymization might at least be made more secure than it is now, as a risk management tool for limiting liability faced from violating security oversight of personally identifiable information.

I begin this by acknowledging what might be the single most important starting point assumption that the developers, managers and users of big data should consider:

• Data anonymization might be important and even crucially so and for vast numbers of businesses and business models, and ultimately for the consumers who they would serve too.
• But it can never be made absolutely perfect: absolutely secure from a risk management perspective.
• So any real effort here should be directed towards making this process and the pools of data assembled from it as risk-reduced as possible. 0% risk is never going to be possible in the real world for any business or business process, so this type of risk limiting is in fact a realistic goal and one that would meet realistically effective risk management requirements. A realistic and I add acceptable goal here should be one of acknowledging that there are specific avoidable and unavoidable risks here, understanding how they arise, and reducing them to an acceptable level where possible, and with mechanisms in place for identifying and rapidly remediating any security and confidentiality breakdowns that do occur.

Now, how would I propose actively addressing this challenge? How would I propose carrying out the intentions offered in the above three bullet points and particularly in the third one of that set?

You can only control and minimize the risk faced from anonymizing increasingly comprehensive sets of data as gathered across larger and larger numbers of individual sources, if you actively test to see if and where it might be possible to infer redacted personally identifiable data field contents, from the accumulated patterns of what would still be included as anonymized data. You have to have a team that is dedicated for at least some significant proportion of their jobs, to actually trying to break the anonymization protections that have been attempted, by testing to see what they can learn from the data that is included in anonymized, “cleaned” data sets, that would breach efforts to protect the identities and other confidential information of that data’s original sources.

• Set up a white hat hacker team for this in-house, or outsource this testing to a reliable third party specialist service provider and preferably one that is bonded and that has insurance coverage included in their consulting agreements, in the event of confidentiality breaches in the data sets that they approve as meeting their due diligence standards.

This means looking at older data that is already held in these data repositories as well as looking at new data streams as they come in. It is in fact that older data that was gathered in before this issue rose to visible prominence that might prove to be the most problematical and precisely because of that fact, and certainly where it is mixed into new data and data types as they arrive.

• Ultimately, this is all about looking for, characterizing and understanding, and remediating blind spots in your thinking as to what types of data you actually have and how all of its data fields might connect together to tell a story about its original sources.

I am going to continue this discussion in a next series installment where I will explicitly discuss the three participants in any business information-as-commodity transaction: data aggregating, developing and selling businesses, data acquiring and using businesses, and the original sources of all of this data with that ultimately coming to a large degree from individual consumers and customers. And as noted above, my goal beyond that is to take this line of discussion out of the abstract by citing and at least selectively discussing, some real world business examples: Facebook definitely included there.

Meanwhile, you can find this and related material at my Startups and Early Stage Businesses directory and at its Page 2 continuation.

Planning for and building the right business model 101 – 42: goals and benchmarks and effective development and communication of them 22

Posted in startups, strategy and planning by Timothy Platt on March 31, 2019

This is my 42nd posting to a series that addresses the issues of planning for and developing the right business model, and both for initial small business needs and for scalability and capacity to evolve from there (see Business Strategy and Operations – 3 and its Page 4 and Page 5 continuations, postings 499 and loosely following for Parts 1-41.) I also include this series in my Startups and Early Stage Businesses directory and its Page 2 continuation.

I have been discussing three specific possible early stage growth scenarios that a new business’ founders might pursue for their venture, in recent installments to this series, which I repeat here for smoother continuity of narrative as I continue addressing them:

1. A new venture that has at least preliminarily proven itself as viable and as a source of profitability can go public and with all of the organizational change and all of the transparency and reporting requirements that this entails as they begin offering stock shares. (See Part 33 and Part 34.)
2. A new venture can transition from pursuing what at least begins as if following an organic growth and development model (as would most likely at least initially be followed in exit strategy 1, above too) but with a goal of switching to one in which they seek out and acquire larger individually sourced outside capital investment resources, and particularly from venture capitalists. (See Part 35.)
3. And a new venture, and certainly one that is built around a growth-oriented business model, might build its first bricks and mortar site, in effect as a prototype effort that it would refine with a goal of replication through, for example a franchise system. (See Part 36 through Part 39.)

And more recently here, I have been analyzing and discussing all three of these business development options, in terms of how they address a specific set of key issues that any business that connects with and serves a market in any way, would have to explicitly focus upon if it is to succeed, and certainly long-term:

A. Fine tuning their products and/or services offered,
B. Their business operations and how they are prioritized and carried out, and certainly in the context of this Point A, and
C. Their branding and how it would be both centrally defined and locally expressed through all of this.

I began a discussion of the first two business development approaches as listed above: the IPO and venture capital supported scenarios, and how pursuing one or the other of them would explicitly impact upon, and in turn also be shaped by Point A decisions and follow-through, with an at least brief digression there into Point C issues as well, as that and Point A consequentially and therefore operationally overlap. My goal here in this posting is to conclude my Point A discussion at least for here and now in this series, by explicitly considering how its issues would impact upon a franchise or similar growth business model, with its drive towards templated consistency as a path to successful expansion.

I in fact began my discussion of that business model scenario this context in Part 41 with a brief orienting discussion of product and service consistency, and both as a (Point C) branding issue and as a source of economy of scale and other value. Ultimately, franchise systems that succeed as such, tend to be consistent in what they do and in how they do it and in what they offer, and in the types of market and consumer-facing venues that they would conduct all of this through. That at least forms their basic business-defining patterns and both as a system of reliably consistent franchise outlets that a steady customer base would turn to, and as a reliable steady pattern that they can continue to grow from, from that.

At the same time, however, franchise systems have to be flexible in the face of overall marketplace trends and shifts, and in the face of more local-community needs and preferences too. And this means their capacity to both meet local needs and to prototype and test new offerings and new business approaches that might in fact become their new next overall system-wide norm or at least components of that.

• I wrote in Part 41 of the constraints and shaping pressures that businesses face and particularly in my discussions of the IPO and venture capital scenarios under consideration here. I would continue to use the term “shaping pressures” here in this context as well, but note that the constraints that I could cite in this narrative can be enabling and expanding as easily as they can be restrictive and limiting. In fact, and here I write with all three of the above business model scenarios in mind, successfully pursuing any of them of necessity means a business’ owners and senior managers being able to successful tip the balance there, where “enabling and expanding” outweighs any also-faced “restrictive and limiting” and both for operational flexibility and capability and for the business’ overall profitability and longer-term prospects for that.

And turning back to explicitly focus on franchise or similar templated growth and development scenarios again, this leads me directly to the issue of how such a business would in effect standardize and mainstream change and the testing and allowance of new and different into its systems, and as a matter of both what they do and how, and as a matter of branding and how they market and present themselves to the public too, as I will delve into in a Point C discussion that I will offer in a soon to come installment to this series.

I have already begun addressing the above Point B and its business process and operations issues in this posting and will explicitly focus on that complex of issues in my next installment to this series. And then as promised above, I will explicitly turn to and consider Point C and its issues as a separate topic area. And I will continue to draw out points of connection between these areas of consideration while doing all of this.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 5, and also at Page 1, Page 2, Page 3 and Page 4 of that directory. And you can find this and related material at my Startups and Early Stage Businesses directory too and at its Page 2 continuation.

Leveraging social media in gorilla and viral marketing as great business equalizers: a reconsideration of business disintermediation and from multiple perspectives 14

Posted in social networking and business, startups, strategy and planning by Timothy Platt on March 16, 2019

This is my 14th posting to a series on disintermediation, focusing on how this enables marketing options such as gorilla and viral marketing, but also considering how it shapes and influences businesses as a whole. My focus here may be marketing oriented, but marketing per se only makes sense when considered in the larger context of the business carrying it out and the marketplace it is directed towards (see Social Networking and Business 2, postings 278 and loosely following for Parts 1-13.)

I began working my way through a to-address topics list in Part 11, that would apply to the analysis and planning efforts of a still resource-lean startup. And I repeat the first three entries in this list as I turn to and begin to more fully discuss its Points 2 and 3:

1. What types of change are being considered in building this new business, and with what priorities? In this context the issues of baseline, and of what would be changed from become crucially important. I assume here that change in this context means at least pressure to change on the part of business founders, from the assumptions and presumptions and business practices of their past experience: positive and negative that they might individually bring with them to this new venture, and their thoughts as to how a business should be organized and run as shaped by all of their prior workplace experience. So I will consider change as arises in how the business is planned and run, at least as much as I do when considering what would be developed there and brought to market as product or service. I will mostly just cite and discuss the later for its contextual significance in all of this.
2. Focusing on the business planning and development side to that, and more specifically on high priority, first business development and operations steps that would be arrived at and agreed to for carrying out (in light of the above bullet point considerations here), and setting aside more optional potential goals and benchmarks that would simply be nice to be able to carry through upon too,
3. Where exactly do those must-do tasks fit into the business and how can they best be planned out for cost-effective implementation (in the here and now) and for scalability (thinking forward)? Functionally that set of goals and their realization, of necessity ranges out beyond the boundaries of a Marketing or a Marketing and Communications context, applying across the business organization as a whole. But given the basic thrust of this specific series, I will begin to more fully discuss communications per se, and Marketing, or Marketing and Communications in this bullet point’s context. And I will comparatively discuss communications as a process, and as a functional area in a business there.

I focused more on the Who and How of key business decision making when addressing the above Point 1, and with the What of that considered essentially entirely in general terms. Point 2 specifically focuses on what the high priority issues are that a given startup would face, and on decision making processes and their follow-through that would lead at least ideally to their smooth and efficient resolution. And Point 2 also begs the question of how these high priority issues and needs would be identified and characterized, and both for their achievability and with what resources required for that, and for their overall needs-based priorities – setting them apart from the “more optional potential goals and benchmarks that would simply be nice to be able to carry through upon too” as noted there as well. And to further put Point 2 in perspective in this series and in this portion of it, Point 3 continues on from there, with a now-determined list of high and highest priority tasks and goals agreed to, and with their actual resolution the topic of discussion.

I continue my Part 13 discussion here with a fuller and more organized consideration of Point 2 from the above topics list, as outlined in the above paragraph, and with the question of what to do first and even right now, and what to set aside for later if at all. And I begin doing so by acknowledging that I in fact sneaked part of my answer to that challenge into the above paragraph when outlining how I would propose responding to a Point 2 challenge, when I made note of resource availability.

• Ideally, task and goals prioritization would be based entirely on here-and-now and anticipated upcoming need. But that approach can only apply, and certainly as an automatic and always-resorted to option if there are and always will be sufficient resources available and of all required types, to make it possible for a business to carry out essentially whatever it seeks to do, whenever its leadership decides that they would like to do so.
• In the real world, need and desire have to be tempered by limitations faced in what can be done, and on consideration of when the resources required for that might become possible for doing that work, and at what costs. Resource limitations and the performance bottlenecks and barriers that they create, determine the doable here.

This pair of linked points is important. And while they might seem obvious when stated as above in the abstract, it can be easy to lose track of their message in the heat of the moment and when facing immediate and impending pressures to effectively perform, in carrying out next building steps in launching a new business venture. I have certainly seen new businesses get caught up in what from a perhaps more objective perspective, might seem to be resource expending inconsequentials, and particularly when they primarily would serve to support a founder’s vision of themselves and of what they would at least ideally seek to build in their business – as an expression of that. Though ego is not the only source of challenge that can be added in, in this way here, that can skew how tasks and goals are prioritized and carried out or not.

Ultimately, the filtering and selecting of Point 2 requires dispassionate reasoning: reasoning that can both starkly illuminate and serve to evaluate the value of the assumptions and presumptions that founders can bring to the table. And as a positive measure, this winnowing and prioritization process more clearly helps to determine what would in fact be good for, and for-now best for the business as an enterprise. (As an aside, I add at this point in this narrative that this is where a founding team that is too caught up in their own agendas and their own understandings of them can find value in bringing in an outside consultant who can offer a more dispassionate outside perspective, and who will then leave when finished.)

I am going to conclude my discussion of Point 2, at least for purposes of this series, in the next installment to it where I will add consideration of benchmarks and more finalized goals to this narrative. My goal in that is to take this posting’s discussion of that topics point at least somewhat out of the abstract by addressing it as an explicit trackable path forward and not just as a more vaguely goals-oriented intention. Then, as promised above I will more explicitly turn to and address the above Point 3. And turning back to the more complete to-address list that those three points were excerpted from as initially offered in Part 11, I will then work my way through the rest of that more complete list too. And I will more explicitly tie this more business-wide narrative back to a marketing and communications context too.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 5, and also at Page 1, Page 2, Page 3 and Page 4 of that directory. You can find this and related postings at Social Networking and Business 2, and also see that directory’s Page 1. And I also include this posting and other startup-related continuations to it, in Startups and Early Stage Businesses – 2.

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