On the Way to Somewhere Else

Day 135 of Self Quarantine             Covid 19 Deaths in U.S.:  149,000

The Cosmos of the New Venture

While performing ethnographic research at a Seattle B2B startup accelerator, I agreed with the managing partners to just research and not to mentor any of the nine companies. I wanted to have a baseline of how an accelerator works before introducing interventions to test different approaches to accelerating the development of a new venture.

One of the companies wouldn’t let me get away with being a passive ethnographic researcher. They went to my LinkedIn profile and found my blog and confronted me with “you were introduced to the nine companies as simply a UW professor doing research. We all dismissed you as a useless academic and then we found out that you are an accomplished serial entrepreneur. Can you help us get some funding and find the talent we need to accelerate our product development?”

As much as I wanted to stay neutral, I was fascinated that one company actually did some research on who they were encountering within the accelerator. Over several ferry rides to Bainbridge Island and many engaging evenings at The Pub, I agreed to help them. I liked their product and their approach. They were the only company that valued design with one of the co-founders being a very accomplished designer.

I introduced two of the co-founders to three of Seattle’s Super-Angels and a VC. Of the $750K the team raised during their six-month tenure at the accelerator, $700K came from three of the four introductions. The team did a super job of bringing their opportunity to these investors and gaining early interest. Yet, the team had no idea what the “selling” process and documentation (term sheets, investment documents) and strategy for closing the investors were.

Over several more beers at The Pub, I shared that with investors it is all about “warm armpit” face to face selling. Emails and phone calls don’t cut it. It took a lot of pestering on my part to keep them engaged with the investors.

Over time it became clear that the founders didn’t understand how networks work and what trust relationships mean. Their focus was on the core triangle of Conceiving, Designing, and Bringing.  After a lot of prompting they still didn’t see the behind the scenes context that was guiding the investors to part with their resources of money and time. They never figured out that three of the four investors knew each other from their formative years at Salomon Brothers. They didn’t understand that by connecting these four investors with the team, that the investors were trusting our previous relationships and that if I recommended this company (the only one out of the nine) that I thought the company was pretty good. In the small world of the entrepreneurial ecosystem a recommendation from a trusted advisor is of great value.

The founders also never saw the many interactions behind the scenes of the ways that the investors “checked out” the company and the founders. The founders still believe that the money they received was because they did such a good job pitching their product and company. Similarly, the founders didn’t see that the same kind of network effect was in play with selling to their enterprise customers. The co-founders couldn’t “see” the many reputations of respected professionals that went into their customers actually purchasing.

The Cosmos of a New Venture is a way to prompt the entrepreneur to look beyond the core triangle of work – Conceiving, Designing and Bringing. The core triangle is the daily work. However, it is the surrounding context that enables the “meal” to be served and the consumer satisfied with the experience.

Throughout the Emails, I build a meta-model of the new venture cosmos similar to Bennett’s description of the enneagram of the three fold way of a cook in a kitchen preparing a meal. The Cosmos of the New Venture is a model of both energy flow and the multiple layers of context in any human activity.

With all the emphasis on “lean” and formulaic approaches to a new venture and successful entrepreneurs trumpeting “do it the way I did it,” the entrepreneur loses sight of a new venture being about marshaling and managing energy in a threefold context.

All models are false; however, some are useful.

The short definitions of each of the points on the enneagram are;

• • Conceiving is COMMITTING.
  • Flipping Perspective is OBSERVING with a spirit of inquiry.
  • Finding talent is VALUING DIFFERENCES.
  • Modeling is the EXCHANGING of value.
  • Designing for humans is OBSERVING, PROTOTYPING and ITERATING.
  • Asking for help is about OVERCOMING fear.
  • Bringing opportunity is about PITCHING and CATCHING.
  • Measuring is KNOWING.
  • Branding is LOVING.
  • Exiting is CAPTURING your rightful valuation.

The challenge of sharing any system, framework or model is that the mode of explaining it, whether in writing or speaking or in Socratic conversation, is inherently linear. Yet, there is nothing linear about the effectual entrepreneuring process. The nine-term system of the Enneagram is a way to explore the many interactions of the nine elements of The Cosmos of the New Venture.

The more astute among you realize that there are ten elements to our system with Exiting. In the Bennett explanations of the Enneagram model, Exiting is the start of the next cycle up. Exiting is the bringing not of an opportunity (product or service) to a customer, but of the business itself to another set of investors or acquirers. The cycle repeats at a higher level of organization.

Let’s look at the new venture cosmos in a similar fashion to how Bennett looked at the cooking of food in a kitchen. The entrepreneur becomes our “cook” who takes the raw materials (food) to conceive the opportunity she wants to bring to her customers (guests) by designing the product offering. In today’s digital connected world, physical products and digital products are produced and distributed in much the same way as Chris Anderson describes in Makers: The New Industrial Revolution. The major resource for the transformation is the intellect of the talent inside the organization (kitchen). The kitchen is the “place” that is created by the resources of the investors. It may be a physical place or increasingly a virtual place in the cloud.

As the entrepreneur visionary conceives the core triangle of work, first in mind and then in practice, it is time for the entrepreneur to FIND the talent and work a process to flip the perspectives of the talent, customer and investors. An effectual entrepreneur starts this process by asking for help and graciously receiving the help that passes the muster of their inner guidance system. This next triangle surrounding the core work is the Finding, Asking and Flipping acquiring of resources to “cook” the meal (product).

As soon as the entrepreneur envisions these two triangles, the conceiving goes to the branding thinking. How will the entrepreneur help the customer experience the love and caring that goes into providing the consumer with both a promise and a fantastic brand experience. What will the entrepreneur “stand for” to their customers? What can the customers trust the entrepreneur to provide?

Pretty soon the mind of the entrepreneur flows to how to model the experience and the Geoff Moore Whole Product that surrounds the generic product that they are delivering. What can the entrepreneur do to enhance the presentation of the cooked meal with table cloths, flowers on the table, and the good silverware and china? Is there an appropriate wine in the right Riedel glass to compliment the food? As Moore and Ted Levitt pointed out, customers aren’t just buying a particular product like Microsoft Word, they are trying to produce a good looking resume or business plan. As the focus shifts to a model of the whole experience, the business mind cuts in to make sure there is a profit model that works for their “meal” so they can stay in business.

As the business mind chimes in, the entrepreneur begins to think about how to measure how their product is going to help the well-being of their customers (guests). The entrepreneur wants to know how they are doing so they can improve their product for the next encounter with the customer.

The cycle is complete as we move back to Finding the additional talent, customers and investors to help us continue to grow the business and most importantly grow our customers’ businesses. The threefold way of the Cosmos of the New Venture is continuously working. The challenge is how aware and how intentional the entrepreneur is about the cycle to anticipate and avoid breakdowns in the energy flow.

The threefold processes of the Cosmos of the New Venture are:

• • The raw materials (primarily the intellect and will of the talent)
  • The product (conceiving, designing, bringing)
  • The customer (receiving a loving and engaging experience)

You can find a PDF of the full Preface, Forward, and Chapters 1 – 10 here.

You can find the introduction to the Cosmos of the New Venture here.

Day 134 of Self Quarantine             Covid 19 Deaths in U.S.:  148,000

Paying it Forward – Email from Mikhail

Dear Entrepreneur Skip,

The last year was a whirlwind. I hope you saw the good news that we sold our company recently. We really appreciate your guidance throughout our entrepreneurial journey. In the end game, your deep wisdom on Valuation Capture and your strong recommendation to really understand Basil Peters Early Exits was invaluable for deciding to sell the company now at 10X of our revenue.

I really appreciated the many ways you used the flipping perspective exercise. Whenever I found myself feeling lost, I would do the exercise with the theme of what was bothering me.

I want to share one of the many letters that I’ve received since the sale of our company was announced.

Dear Mikhail,

I was excited to see that you recently sold your company after just a year. I am impressed with your quick success. How did you do it?

I would love to learn how you accomplished your rapid path from idea to exit. I’ve got a great idea for a new patent analytics tool that builds on the work of the Russian patent examiner, Genrich Altshuller, who developed TRIZ, the theory of inventive problem solving.

Can you be my mentor for becoming an entrepreneur to build my product and make it a success in the market?

Sincerely,

Boris Polyakovsky

I’ve met with Boris and several of the other entrepreneurs who’ve reached out to me. I find myself either sharing the steps (our formula) we went through with our startup or worse – acting like an Entrepreneur Assassin – by disparaging their incredibly naïve business and product plans.

How were you able to be patient with me and never disparage my ideas?

Everybody wants to know my secret. They kind of roll their eyes when I share that I needed to discover, develop and trust my inner guidance system – my inner entrepreneur North Star.

I need to go back and re-read your emails but this time from the point of view of a mentor paying it forward rather than an entrepreneur. Is it OK if I pass on your emails to Boris and other young Russian entrepreneurs?

Yours in entrepreneuring,

Mikhail

You can find a PDF of the full Preface, Forward, and Chapters 1 – 10 here.

You can find the introduction to the Cosmos of the New Venture here.

Day 133 of Self Quarantine             Covid 19 Deaths in U.S.:  147,000

Exiting

Flip Comic created by David Robinson

“Intention. A man’s intention is not a thought or an object or a desire, but what makes him go forwards even when everyone is telling him he will be defeated or that his chosen course of action makes no sense. Having a clear intention helps the warrior to be invulnerable, to behave like a shaman, capable of walking through walls and touching the infinite.

“The choice of path. Nothing in this world is given to us as a gift. The most important lessons are always learned with great effort and difficulty. With this in mind, the warrior-hunter never despairs or wastes his time blaming others, because he knows that whatever he does, he bears sole responsibility for his choices. A warrior cannot complain or have regrets: his life is a constant struggle, and the challenges he meets are neither good nor bad, they are merely challenges.”

Carlos Castaneda and the Sacred Lineage – a selection based on texts by Carlos Casteneda, 1925 – 1998.

Vancouver, British Columbia Canada August 30, 2013

Dear Mikhail,

Every year or so I must make a pilgrimage to Vancouver to listen to Basil Peters explain his Early Exits approach to new ventures. It reminds me of Covey’s second habit – “Begin with the End in Mind.”

I really enjoyed reading the results of your exercises for exploring “branding is everything.” I really appreciate your taking these exercises to heart and am humbled by the insights that you are generating for your new venture. I am unable to select the best brand or logo or brand promise or set of experiences for your new venture. Only you can do that selection.

As I mentioned in my first email, in my forty years of innovating by creating new ventures, I did not understand what game I was playing. I didn’t understand the game board or the rules or even what the goal of the game was. Like a new mother I made the decision to conceive a new venture (well, many new ventures as it would turn out), but I didn’t know what the end game was. I didn’t understand the game of parenting a new venture. It was like I was doing a jig saw puzzle with no picture on the cover of the box to guide my putting the pieces together.

I went through the typical progression of an entrepreneur. My first focus was on the product idea. The business focus was on the cost side – how much money would I need to create the product. The next focus was on finding customers – how much money would it cost me to get to market and generate revenue. Once we had customer and revenue traction the focus shifted to becoming cash flow positive. By the time I got through these stages I was like an exhausted parent trying to move from parenting that sweet infant to surviving an out of control teenager.

By the time you get to the cash flow positive state you have raised external capital and you now have a board of directors to deal with along with your employees, customers, suppliers, investors, competitors and influencers. There aren’t enough hours in the day to deal with the urgent, let alone the important. All of the stakeholders want large portions of your time.

At this point you start to think about exiting – either a personal exit from the company by turning it over to “professional managers” or a company exit (IPO or acquisition). In your more reflective moments you reflect on the joy that you had in conceiving the idea for the company and the peace of the gestation time. Most of us gather hundreds of ideas for the next thing that we would like to conceive. These are our day dreams.

The professional part of you tries to keep in mind what is best for the company. Should you add a new product line?  Should you expand into services? Should you find a new set of partners? All of these questions swirl around you. You start seeking counsel from your board members, investors, bankers, and consultants. Yet all of these third parties have some other agenda and you don’t know how to absorb all of their advice.

More importantly you realize that you don’t have a way to think about the advice that you are getting or a framework to represent the options.

Seven years into the successful expansion of Attenex, I felt I was missing something basic. In spite of all the reading that I do on ways to think about business and strategic networking with the best business minds I could find, I still didn’t have a way to reconcile all of the wisdom I was encountering.

Twenty years ago I encountered the Intellectual Capital approach to valuing a company along with Ijiri’s Triple Entry Accounting to capture the momentum of a company. I also liked the scenario planning matrix and methods of the Global Business Network. But I couldn’t synthesize these frameworks into something that would help me think through the next evolution of Attenex.

One night I awoke with a start and sat bolt upright in bed. Fortunately, I sleep with a yellow pad and a pen next to my bed and I quickly sketched what became the following matrix:

I’d finally reconciled the key components of Intellectual Capital with the product and services options we had for moving Attenex forward. Intellectual Capital is a framework and method for answering why the valuation of knowledge based companies (Google, Microsoft, CitiCorp, KPMG, McKinsey) were so much higher than their book value. Sveiby, Edvinsson, and Stewart had written extensively on the topic and asserted that traditional financial methods don’t measure key contributors to Intellectual Capital – the delta between traditional financial measures and stock market valuation. These authors describe the three types of intellectual capital:

• Human Capital (Talent) – the talent base of employees skills that includes measures like the ratio of talent with advanced degrees to workers with high school education.
• Structural Capital – the non-human storehouses of information that reside within the facilities of a company. These include the knowledge that resides in information systems and file cabinets.
• Relationship Capital – the knowledge embedded in the business social networks (customers, suppliers, influencers) along with strategic networks.

The artificial number representing these three abstractions is typically captured in a spread sheet cell within traditional financial statements called “goodwill.” It is unmeasured and unmanaged. In a knowledge based company, these three forms of intellectual capital are the primary assets.

In the 2×2 matrix above, the vertical axis illustrates the spectrum of Talent Capital (what resides in employees’ heads) to Structural Capital (what remains in the company when employees go home at night). The horizontal axis represents a spectrum of Relationship Capital from low to high. Mass produced products (like hardware or software) typically have low relationship capital as they are more of the form “one size fits all.” On the high side of relationship capital the product or service is highly customized to the needs of the customer in order for it to be useful.

The top half of the matrix represents those products that can be mass produced and are mostly in digital form. The bottom half of the matrix is for the services arena and is mostly provided by human beings. From a product/service standpoint three of the quadrants were pretty easy to identify – software, contingent services and professional services.

What should be in the upper right quadrant? That question occupied most of the rest of the early morning. Finally, it hit me that the upper right quadrant is the realm of content. Content is mass produced, particularly digital content. However, in order for content to be useful it has to be somehow tailored to the individual consumer. The big breakthrough of the last twenty years is the search engine (Google, Yahoo, Bing). The search engine is the customizer of the mass content to my unique needs. The search engine is the vehicle for creating high relationship value. By profiling the users of content (and the content itself), search engine companies achieve high relationship capital with their consumers. The content is even more valuable the more often the user accesses the tool so another aspect of the upper right quadrant is how sticky the content site is.

A way to understand this framework (2×2 matrix below) is to place some existing companies on the matrix. Try placing the following companies – Microsoft, Google, Facebook, KPMG, Twitter, and Kelly Services. The most valuable companies are the ones that are able to monetize their content through advertising with a very large number of engaged users (millions to billions).

After using the framework to position existing companies, I took a quick look at the eDiscovery market that we were a part of. I identified the following products and services:

• • Contingent Services – the part time lawyers and paralegals (often hundreds at a time) that review documents and are hired by the project, not permanently.
  • Professional Services – the partners and associates at the law firms hired for a given matter, the project managers in all the companies associated with collecting, processing and reviewing the matter.
  • Software – all the software tools that are used to process a matter like Attenex Patterns, FTI Ringtail, Summation, and Relativity.
  • Content – the client’s private and confidential data like email and the publicly available data like case law, case summaries, and lawyer databases.

The matrix worked. I could represent any product in our market space. Now I needed to add some numbers to the matrix to see if I could quantify the relative value of each quadrant.

I started with some estimates of what the valuation multiple (company valuation divided by revenue) for companies in each quadrant. The software quadrant had valuation multiples ranging between 4-6X meaning that if a company was generating $30M in revenue it could expect an acquisition price of $120M – $180M. Professional Services firms typically have a low multiple like 1X. Depending on the business they are in,  Contingent Services businesses can have multiples that range from 1-2X.

Again, the real surprise was the Content Quadrant – the multiples ranged from 1X to much greater than 20X. No wonder Google was valued so highly.

The numbers in the matrix quadrants represent from top to bottom:

• • Valuation Multiple
  • Amount of investment money needed to get to cash flow positive
  • Earnings before interest, taxes, depreciation and amortization (EBITDA) as a percentage of revenue
  • Time frame to go from idea to cash flow positive

Over the previous six months, I’d advocated that the going forward strategy for Attenex should be to develop a review services and hosting business (Contingent Services). I watched our service provider partners generate >$300M in services business based on our software tool. If we had been able to have a services business (since we were owned by a law firm we couldn’t), we could be generating $300M in revenue. However a services business is a lot harder to manage than a software business.

Armed with this framework, it was obvious we should go into the Content Quadrant. Yet we couldn’t in the eDiscovery space. Our key content was very private and confidential and belonged to our customers. The public content that is in the space like case law and case data is primarily owned and distributed by the duopoly of Lexis Nexis and Thompson Reuters. And those businesses were closer to the 1X level because the content didn’t lend itself to advertising, nor did the users want to have their searches profiled.

Several times during our business evolution I looked at the potential of the patent marketplace. Now I had the framework to see that the patent market was the next place to move strategically. Our Attenex Patterns software could be used without any extra development. We just needed to ingest the free and publicly available patent database. Through a variety of value adding means we could do valuable unobtrusive professional advertising to increase the valuation multiple. If we invested a little bit of resources, we could add the missing database in this space – product data. Combining the USPTO database, the SEC financial database of S1 and 10K reports, and our proprietary product database, we should be able to get to a 10X multiple of revenue within a year.

Within a few short hours (after ten years of unconscious incubation), I had a framework for representing the state of a company, and I had a game board to think through the strategic options for our company.

As I presented the framework to colleagues, we realized that the matrix also provided a way to think through the process of evolving our company.

Remembering Shields Strategy, I shared the path through the four quadrants with my colleagues as a starting point. Jack Shields, Executive Vice President of Sales and Services for Digital Equipment had one simple strategy – take every expense item and figure out how to turn it into a revenue generating business. Using this precept, we realized our quickest way (at almost no cost) to get to the content quadrant was to hire a few patent experts and sell a few professional services projects to generate the content that would be valuable. We didn’t even have to look very hard for the customers as 20% of the litigation our product was used for was patent litigation.

Then we could generalize the content and analysis techniques from the professional services projects to be the basis of our missing “product database” which is a key to determining patent infringement. That would allow us to move to the higher multiples of the content quadrant. To keep the different databases updated and normalized, we would hire contingent labor (probably offshore) to add value to our content.

The arrows in the above matrix indicate this movement from the software quadrant to professional services to the content quadrant to contingent services. We’d taken an R&D cost and turned it into professional services revenue and then by moving to the content quadrant we could dramatically increase our company valuation. And we’d get lots more users of our product.

As we worked through this process, I saw that we’d moved from understanding how to think about intellectual capital and how it affects valuation, to a way to think about corporate strategy to developing the levers for how to increase valuation.  With the valuation capture framework, we had a way to prioritize new products and product features.  We could estimate which new products and new features would lead to higher valuations.

At every opportunity I started sharing what I now call the Valuation Capture framework to entrepreneurs. You can imagine my disappointment at the lack of understanding and the eye rolling that entrepreneurs showed towards my brilliance. The only folks that sort of “got it” were serial entrepreneurs who’d actually gone through an exit. These are also the only folks who deeply understand Saras Sarasvathy’s effectual entrepreneuring framework. Like most adult learning, if you haven’t experienced it, it is hard to make meaning. Once again, I ran right into the challenge of “experience first; make meaning second.”

In one of these sessions, I bemoaned the problem with Christine Martell, CEO of VisualsSpeak. Once she understood what I was presenting she asked if she could play with the design of the diagram. In a couple of days, she shared with me the visualization below:

I couldn’t believe the difference a well-designed diagram made. Instead of belaboring the topic for an hour to entrepreneurs, they take one look at the diagram and go – “Oh, we should be in the upper right quadrant shouldn’t we? So how do we get there?”

Bingo. The right question.

Mikhail,

Being the astute entrepreneur I’ve gotten to know over the last several months, I know you’ve already realized that you have to start now to work on your Valuation Capture. You can’t wait until it is time to exit. By then it is too late.

Begin with the end in mind.

Starting at the end of the new venture process – the exit – is what I’d missed for forty years. During the new venture journey the concept of valuation is often present, particularly when you are doing an investment round. You have to deal with concepts like pre-money and post-money valuation. However, these are just simple arithmetic formulas that are devoid of any real understanding.

Through all these years of intrapreneuring and entrepreneuring, I had failed to recognize what game I was playing – the valuation game. Nobody ever shared with me how I could increase my valuation (other than generating more revenue) and that some product efforts are much more valuable in the end game than others.

Begin with the end in mind.

Mikhail, I’ve enjoyed the opportunity to participate in your journey of discovery as to what you are conceiving and the business that you are creating. Thank you for the gift of your questions, your responses to the exercises, and your patience in letting me share some of the concepts I’ve discovered on my journey of effectual entrepreneuring.

I am going to be “off the grid” for quite a while so this will be our last email.

My fondest hope is that during our shared journey you’ve discovered, developed, and are trusting your inner entrepreneur North Star.

God grant me the serenity to accept my team, my customers, my investors and my suppliers as bringers of opportunity;

The courage to change my understanding of what the customer truly needs;

and

The wisdom to know the difference between what is right and what the investors, the board and the bankers want.

As I’ve done for you, the best gift you can give me is to take your acquired wisdom and  “pay it forward” to a young entrepreneur.

Yours in entrepreneuring,

Skip Walter

Applying Exiting

The theme for the flipping perspective this week is to look at large and small recent startup exits and understand their exit value from a flipping perspective view.

• • Select an exit that is documented in the press (Instagram, Whatsapp …)
  • Capture an image of the founders or their products
  • Free write on what the factors were in their receiving the valuation they did. What can you do to enhance your valuation in a similar manner to the exit under study?

The Cosmos of the New Venture

The beauty of the enneagram is that it is a recursive model. Exiting is the 10^th step in a nine step system. It begins the cycle again. By exiting, your company is bringer of opportunity to another group of investors.

Exiting is CAPTURING your rightful valuation.

You can find a PDF of the full Preface, Forward, and Chapters 1 – 10 here.

You can find the introduction to the Cosmos of the New Venture here.

Day 132 of Self Quarantine             Covid 19 Deaths in U.S.:  145,000

Applying Branding

The theme of this week’s flipping perspectives is to observe other brands and your brand with deep feeling – love or hate.

For seven days, alternate between well-known brands and different ways you might brand your company and products.

• • Select a brand to focus on – during the week select both brands you love and hate and ways that you might brand your own product
  • If a known brand, capture an image from the branding work of the company you selected. If your own brand, capture or sketch an image of your brand experiment
  • Free write about the emotions you feel with your selected brand or brand experiment and identify ways those feelings affect your brand experience.

The Cosmos of the New Venture

Branding is part of the serenity cycle as it captures the ease with which company, talent and customers interact with each other. Branding is about the serenity of a promise and the serenity of lifetime of great brand experiences.

Branding is LOVING.

You can find a PDF of the full Preface, Forward, and Chapters 1 – 6 here.

You can find the introduction to the Cosmos of the New Venture here.

Day 131 of Self Quarantine             Covid 19 Deaths in U.S.:  144,000

Branding

Flip Comic created by David Robinson

“People often assume the brand is the logo or symbol—and there’s no doubt that if that’s done well, it can give you a flavor for who the company is, whether they’re contemporary or traditional, and so forth. But I really see the brand as more than that logo or mark—it’s the totality of the way in which the company talks to its public.”

Kit Hinrichs

Bumpass Hell, Lassen Volcanic National Park, California, USA August 15, 2013

Dear Mikhail,

Your email reached me while I am enjoying a “Ring of Fire” high at Bumpass Hell in Lassen Volcanic National Park.  I can’t believe that it is mid-August and we are having to hike through two feet of snow in places.

I understand the difficulty of finding metrics for your products and services in your new venture. I’ve had to discontinue product development on several products that we couldn’t find good metrics for. I suspect you have found some good metrics, but only you can sort out which ones matter for guiding your future product development.

Shortly before we started merger discussions between Aldus and Adobe, we were interviewing for a new Director of Marketing Communication. As an executive I was asked to interview some of the candidates. Near the end of the process, Katherine James Schuitemaker showed up in my office in the middle of a typically frantic day. Knowing that there were several of my managers waiting for meetings, I thought I could gain back a little time by doing a perfunctory interview. Little did I know I was about to meet one of the finest collaborating colleagues of my life.

In my previous 25 years of management, I worked with a wide range of corporate marketing and agency talent. While marketing is not my area of expertise, I was rarely impressed with marketing folks.  As a result, I did not have a skills template for a good marketing person, let alone a Director of Marketing. All I knew is that marketing folks had these outlandishly large budgets which they always spent – to little effect.

Running down my stock list of interview questions, I asked Katherine “what is your philosophy and understanding of branding?” I expected some lametard answer about designing cool logos (my feeble understanding of branding). Instead I got an education that started with “Branding is everything!” expressed with every energetic fiber in Katherine’s being.

Whoa! I had to challenge that. “Excuse me, but product is everything. Marketing is just the gloss and expensive budget that is spent without any controls. What do you mean branding is everything.”

Talk about waving a red flag in front of a charging bull. Katherine launched.

“Branding is everything. What you build as a product is just one component of the brand. The brand is the essence of everything Aldus needs to do as a company. Brand is the promise that is made to every customer. Brand is the experience that every customer has with every aspect of the product. From the first minute that the customer becomes aware of Aldus, to the out of box experience, to the trial of the product, to learning to use the product, to calling customer support when they have a problem, to receiving and installing product updates, to how you help the customer tell their friends about how wonderful your product is – branding is everything.”

I was having a hard time taking notes with the fire hose of passion that Katherine unleashed.

To slow Katherine down, I asked for an example.

Katherine explained to me her conception of branding by telling the story of her work in promoting the HP LaserJet.  While doing scores of buyer and user interviews, she kept hearing the customers say “I love my LaserJet.”  It took her a while to realize that the customers might actually mean they really had an emotional relationship with an object instead of a person.

When the customers were asked specifically about using a verb like “love”, they just laughed and said “of course, we don’t really mean that we love it in that sense.”  Yet, customer after customer kept saying those words.  So Katherine and her team decided to try out some print and TV advertisements using exactly that theme.

Long before I met Katherine and to this day, I remember those ads with enterprise customers talking about how they loved their HP Laserjet.  I remember a business manager sitting at his desk in white shirt and tie enthusiastically sharing “I love my LaserJet.”  I thought it was the dumbest ad.  Yet, what have I done since seeing those ads?  I have only bought HP LaserJets – for twenty plus years.  Those ads that Katherine generated increased LaserJet sales by over ten times to billions of dollars per year.

Katherine used those insights as a core part of her Value Exchange Relationship process.  Some of the questions that she asks (in oh so many ways) are:

Katherine took the customer research and turned it into the core of how she has helped countless companies since – people are in deep relationship with the objects of their life in a very similar manner to how they are in relationship with other people.

Reeves and Nass in the Media Equation:  How People Treat Computers, Television, and New Media Like Real People and Places performed a wide range of detailed, scientific studies to amplify what Katherine found through her research.  Despite countless denials, the research subjects treated the new media and objects of the information age as if they were dealing with people.  Yet, this research has not really made it into the design of objects and software.

As I reflected on the “brand is everything” assertion, I started paying attention to my favorite brands and started deconstructing them with Katherine’s point of view.  The first powerful experience that came to mind is the occasional experiences over fifty years attending the Masters Golf Tournament.

While the world has changed in myriad ways since my first visit to the Augusta, Georgia slice of heaven, the experience of the Masters is as magical today as it was when I attended my first Masters in 1967 with my father. The beauty of the hundreds of Pantone shades of green come to life with the interspersing of the multi-hued azaleas providing the backdrop for the world’s best golfers.

In 1967 we walked the 18 holes of the course and rested after the long climb up the fairway of the 8^th hole. We noticed a little white ball come bouncing onto the green with no golfers in sight. As if drawn by a magnet the ball went straight for the hole and dropped in. There were only 20 of us standing around the green to witness Bruce Devlin’s double eagle (only the second recorded at the Masters).  Cool.

As we continued around the course, I didn’t want to leave the bank below the sixth hole where all the University of Georgia coeds were sun bathing on this warm spring day. Dad dragged me away to the food tent where we filled up with $.50 pimento cheese sandwiches and $.75 beer. This beautiful course flows with great looking women and inexpensive food. Can I come back every year, Dad?

Fifty years later, the golf holes are different to accommodate the changes in golf equipment and the skills of Tiger Woods, but the experience represents the best of the old South. The azaleas and coeds are still spring time beautiful and the food a tasty and amazing bargain (sandwich $1.50 and beer $3).

In spite of several generations of Augusta National managers and professional golfers and a wide range of external criticism for not accepting people of color and women as members, the organization has grown the brand, evolved their membership rules, and increased the number of tickets (from 40,000 to 150,000 for the four day tournament) while still keeping the brand, brand promise and brand experience the same.

Skip celebrating Phil Mickelson’s First Masters Victory

An important part of the Masters tradition and experience is that no cameras or phones or electronic equipment are allowed on the property.  The “patrons” are here to focus on great golf and masterful golfers and enjoy being a guest of the Masters golf club members. There are no distractions. A special part of the event is that you can only track the scores from the scoreboards and follow the loud cheers or groans when a golfer does something great or poor somewhere on the course. The cheers tell you that something happened but you have to wait for the score to be updated on the manual scoreboards to understand what just occurred. We have to use our imagination to create the remote experiences on the course. Returning to a simpler time of pure imagination is part of the charm.

At the core of the Masters experience is recreating the values of Bobby Jones, the last great amateur golfer, who designed the Augusta National course and established so many of the traditions. The club members strive to have each patron be transported to the world of Bobby Jones each April. No matter who you are and how famous or rich you are, you are still just a patron. In the photo above, I was just a few feet away from another one of my sports heroes – Jeff Gordon of NASCAR fame. Like the rest of us, Jeff sat in his fold up green Masters chair. For the five hours we all watched the golfers finish their final round  at the 18^th green in 2004, Jeff was just one of us patrons. Not a single patron bothered Jeff for an autograph. We are all special during those four days.

How do they do that?

Clues to how the Masters achieves their brand promise and brand experience can be found in the Email on Conceiving – being clear about their “why” and their values.

While one of our family tragedy stories is of the year that we lost our Masters tickets by failing to renew them, I married into the Keleher family and their two annual Masters tickets. Once Jamie’s parents got older they would give the tickets to one of their children to go to the Masters. So every six years we got to visit Augusta National again. Not knowing how many times we might continue to visit due to Grandma Barb’s poor health, during our last visit we took our three kids so that they could each have a day to experience the Masters. And not a single member of my family is a golfer. The Masters experience transcends sports.

I love the Masters.

I love the Masters so much it was important to pass the Masters experience of my father and Jamie’s father to our three children – three generations of Masters experience. Different years, different interests, and different attitudes and the depth of the Masters brand, promise and experience transcends all.

Sound familiar – I love my HP Laserjet printers.

If I marry the Masters golf tournament, what will my life look? Looking back, my life is filled with fifty years of deep memories – both of being at the event eight times and watching the tournament on TV the rest of the time. Watching the Masters on TV is different than watching any other event as I’ve been to the actual golf course. I’ve experienced the dramatic undulations of the greens and the unfathomable distance and hazards of Amen Corner.

Katherine went on to share the fundamental questions that an entrepreneur needs to think through when creating your brand.  Your brand is your company. Your brand is what you stand for. Your brand is your relationship with all your stakeholders.

From the very start of your “branding is everything” journey, these are the core questions. None of us gets these “right” at the beginning. You are only guaranteed to get them wrong if you aren’t deeply explicit about the answers at each stage of your journey.

As Katherine worked her clients through the Value Exchange Relationships, she realized that the 4Ps which are a cornerstone of brand thinking were changing. The traditional 4Ps of the industrial age were shifting with the advent of the information age and the Internet.

Working with Katherine at a couple of new ventures, we realized that with the advent of social media the 4Ps were shifting again:

The other starting point for thinking about your branding is the Positioning and Value Proposition that Geoff Moore describes in Crossing the Chasm. The elements of the positioning statement are:

• • For (target customer)
  • who (statement of need or opportunity)
  • the (product or company name)
  • is a (product or company category)
  • that (statement of key benefit / compelling reason to buy) .
  • Unlike (primary “competitive” alternative) ,
  • our product (statement of primary differentiation).

An example of the positioning statement from the early PC days when Windows 3.0 released was:

“For PC users who want the advantages of a Macintosh-style graphical user interface, Microsoft Windows 3.0 is an industry-standard operating environment that provides the ease of use and consistency of a Mac on a PC platform. Unlike other attempts to implement this type of interface, Windows 3.0 is supported by every major PC application software package.”

A more recent example of a positioning statement is the Google search engine:

“For web users who want an easy way to find the right information fast, Google is a simple yet highly discerning search engine that turns content on the web’s 1.3 billion sites into just what you wanted to find. Unlike other search engines, Google delivers only the most relevant results in less than a second, without the delay and distraction of downloading a page full of advertising or useless links.”

David Aaker is a prolific author on the many aspects of branding. His Brand Identity Planning model is a deep and formal look at branding.

In a blog post Aaker shares his Top 10 Brand precepts:

“Out of my five brand books, what precepts stand out as one of the top ten? Which are most critical “to do” tasks for someone charged with creating or managing a business? What do you need to know to excel at building a brand? Here is my top ten list:

1. Treat brands as assets.Acceptance of the concept that brands are assets and have equity really changes not only branding and marketing but also business strategy. No longer is branding a subset of marketing to be managed as a communication problem. It becomes strategic, both reflecting and enabling the business strategy. Importantly, a brand is more than image and awareness—it also includes the size, the engagement, and the loyalty level of the customer base. That means that brand strategy needs to be developed in tandem with the business strategy, both need to be clear on the target market, the value proposition, and the investment priorities over time.
2. Show the strategic pay off of brand-building.Part of the challenge of getting brands accepted as strategic is to demonstrate that they pay off. Unlike tactical marketing which can demonstrate short-term results, the long-term effects of brand building are difficult to demonstrate. One way is to observe the success of a business strategy and show how dependent that strategy was on brand assets. Another is to use surrogates for long-term impact such as measures of customer loyalty. But it is reassuring to know that, on average, brand building does pay-off. I have conducted four studies with Professor Bob Jacobson of the University of Washington which explored the relationship between brand building and financial returns. Our study of brand equity and stock return is typical. A well-known fact in finance is that there is a strong relationship between earnings changes and stock prices. We found that the impact of building a brand on stock return was nearly as great as earnings, actually 70% as much effect.
3. Recognize the richness of brands – go beyond the three-word phrase.Brand building starts with determining the aspirational associations, what associations should come to mind when the brand is cued. In general, this set should be from six to twelve associations. Of this set, two to four should be identified as the most important and the most able to drive effective marketing programs, and the most likely to resonate with customers. In the brand identity model, they are termed the core identity elements. There may be a unifying concept termed the brand essence that provides an umbrella summary of the brand’s thrust but in some cases, it just gets in the way.
4. Get beyond functional benefits.There is a tendency to focus on attributes and functional benefits because they are assumed to be what customers are buying and because market research is often functionally focused. The fact is–customers are not logical and functional benefits rarely provide a basis for sustainable differentiation or a deep customer relationship. Look instead toward emotional and self-expressive benefits. Thus, a customer can feel safe in a Volvo, excited in a BMW, energetic with Coca-Cola around, or warm when receiving a Hallmark card. A person can be cool by buying clothes at Zara, successful by driving a Lexus, creative by using Apple, a nurturing mother by preparing Quaker Oats hot cereal, frugal and unpretentious by shopping at Kmart, or adventurous and active by owning REI camping equipment. Consider also brand personality. Should the brand be confident, competent, fun, warm, or energetic, or some combination of these? Sometimes a brand is best expressed through a personality.
5. Consider organizational associations.While most offerings struggle to be differentiated, an organization will have people, programs, values, strategies, and heritage that will almost always be unique. Further, the organizational characteristics can be meaningful to customers. They can provide credibility with respect to the offering by demonstrating or suggesting that the firm has the capability and will to deliver on its promise. Consider the visible commitment of Zappos.com to Wow! Service. Further, organizational values and programs can provide a basis for a relationship. The SalesForce.com policy of providing one percent of their product, time, and sales to public service. For some, that policy reflects shared values that lead to a respect-driven relationship that goes beyond products.
6. Look to role models.Knowing aspirational associations is a crucial first step, but how to get there is a practical issue. Looking at role models that can be adapted or leveraged nearly always provides useful insights. Suppose a brand aspired to be considered warm and friendly. Find other brands that have succeeded in doing so, including brands in disparate industries. How did they get that reputation? Can anything they did be adapted? Or look within your own firm. What people or programs best exemplify those characteristics to customers? Can their efforts be expanded or extended to other parts of the organization?
7. Understand the brand relationship spectrum.Brand portfolios can be so messy and dysfunctional that a firm’s new product process is paralyzed because there is no concept of which brand to use on a new offering. Customers may be so confused that they can’t even buy. The brand relationship spectrum can help create clarity, leverage, and synergy in the portfolio. The idea is that a master brand may work for a new offering if its associations are consistent and helpful and will be reinforced by the new role. However, there are times in which the master brand will be inconsistent or confining and the new offering requires some separation. The spectrum suggests that a sub-brand will generate some separation, an endorsed brand more, and a separate brand the most. The challenge is to find the right degree of separation and to create brands that can perform these roles.
8. Look for branded differentiators.It is difficult to create differentiation especially involving functional benefits because a competitor will quickly copy or appear to copy or otherwise neutralize the advantage. Unless you brand it. A competitor cannot copy the brand. If the innovation is branded and the brand established, the competitor’s task of creating and communicating an enhancement will be formidable. When Westin created a superior bed and sleeping experience and branded it the Heavenly Bed, they changed the way that many looked at the hotel experience and the branded differentiator made it difficult for imitators to get traction.
9. Use branded energizers.We now know that brands across the globe have declined in terms of perceived quality, loyalty, and visibility over the last decade. The exceptions, those brands that have energy, have resisted the decline and still drive financial results. Energy may be the most important imperative for brand builders. The best form of energy, innovative new products, is not available on a regular basis for most firms and not available at all if you your offering is an unexciting one like hot dogs or life insurance. In that case, an option is to find some branded program or person, a branded energizer, and attach your brand to it. Avon’s Walk for Breast Cancer is an example of a program that added energy for a brand that could never achieve it with products.
10. Win the brand relevance battle.The way to gain market position, often the only way, is to develop offerings so innovative that they create new categories or subcategories making competitors irrelevant. The goal is to encourage the customer to select a new category or subcategory for which your brand is the only one with credibility and visibility. In virtually every industry, an analysis will show that market positions are very stable in the absence of such innovation. Relevance is also a threat to the leading brands who must be concerned with having customers — who respect and maybe love their brand — decide that they no longer want to buy what the firm is making, its brand has become irrelevant.”

Apple is recognized as one of the best brands for user experience and innovation. Most authors at some point use Apple as an example, usually in breathless admiration. Once you have established a valued brand, each day is an exercise in increasing the value of the brand. And when the brand experience fails miserably, it is beyond jolting to the customer.

Apple is not without its faults. While the Apple iTunes and Apps Stores are fantastic business drivers, the application software “sucks beyond multiple levels of suckiness” (a phrase coined by Dean Dan Turner, UW marketing professor to describe his brand experience with BMWs).

A couple of months ago I dropped my iPad and cracked a corner of the retina display. I knew that Apple was going to be releasing a new iPad in November 2013. As the release date showed up, I didn’t have the time to order and pickup my iPad before I left on a trip to the east coast. I figured I’d just buy one while I was visiting my brother in Columbia, MD.

I arrived at the store 15 minutes before opening and was one of the first to gain the attention of one of the sales people. They had the 32GB white iPad that I wanted and the salesperson brought it out. I handed him my credit card and was delighted to be through in just a few minutes with the delightful Apple in store experience.

The dreaded words “Sorry, sir your credit card is denied” hit me like a hard slap to the face. How could that be? I just used it. OK, “try this one” as I handed him another credit card.

“That one is denied too, sir.”

Then the Apple genius asked me “you’re not from around here are you?”

“No. As a matter of fact, I’m travelling here from Seattle.”

“In that case, none of your credit cards will work. Apple has an arrangement with all the credit card companies to declare any transactions that are more than 50 miles from your home invalid due to fraud concerns. Apple is one of the biggest targets for fraudulent credit cards.”

I was livid. I hate Apple today.What should be an exciting purchase day to get my new iPad that I’ve waited months for was turning into “I really hate Apple today” experience.

I asked the clerk (he was way below a sales person at this point) if we could do it manually. So we found one of my credit cards that would allow us to call and verify the transaction the old fashioned way. I was surprised that the Apple store had an old fashioned credit card mechanical swiping machine. I waited very impatiently while the clerk took 20 minutes to fill out the paper receipt, called the credit card company to verify that I was who I said I was, and then completed the transaction manually. What should have been a 5 minute transaction took 30 extra minutes. The only way I kept my sanity was to take photos of the manual process in the ultra-hip innovative Apple store.

Manual capture of my credit card

As I remind myself of my love/hate relationship with Apple, I remember my colleague David Robinson sharing that to better design a brand or brand experience, it is helpful to start by designing the negative experience. How would Apple design the store experience if they wanted to negatively affect their “brand is everything”?

The airline and air travel industry is one of the best examples of how to make dealing with a brand a miserable experience. I sometimes think there is a group of airline industry marketing executives who gather each month in collaboration with the TSA to make air travel as miserable as possible. At least we no longer have smoking on flights.

Vijay Kumar in his 101 Design Methods describes the Compelling Experience Map:

In many ways, this micro brand experience design method provides a road map for how to think about designing the brand, brand promise, and brand experiences you want to provide your customers. The “brand is everything” is a collection of designed experiences where your employees and customers are key participants.

A few months ago I participated in a Nordstrom’s Innovation Bootcamp. I was excited by the excellence of the workshop and the compelling experience design the facilitators employed. I was surprised by how large the Nordstrom’s technology group had become as their online business expanded. I noticed that there were quite a few Amazon and Google executives now at Nordstrom. What was going on?

When I think of Nordstrom’s I think of the store experience I came to know twenty years ago shortly after we moved to Bainbridge Island.

I hate buying clothes, particularly business suits.  But I have added a lot of weight, so it is time to get a new business suit.  But still I delay.  Then, Greg Kent, a neighbor who is the Men’s Department Manager at the Seattle Nordstrom’s, talked me into at least trying his store.  “It’ll be painless.  I promise.”

I went the next day.  We started with the basics, a blue suit and a blue blazer.  In twenty minutes they were selected, tried on, fitted by a tailor, and I was ready to go.  “What time next week should I pick these up?” I asked.

Greg laughed and said, “I’ll stop by your house and deliver them tonight on my way home.”  I think my jaw must have hit the floor.  Each month Greg lets me know what’s on sale that I might like.  Nordstrom now has a customer for life.

Yet, there are things that I value and buy quite a bit of — books, wine and software.  I spend several thousands of dollars a year on each.  Most of this money is spent with a few stores or companies (Eagle Harbor Books, Cayuse Winery, Microsoft, Frys).  As far as I can tell, none of them knows or cares that I exist.  None of them knows me except through the occasional mailing list trying to get me to buy something.  None of them bothers to communicate with me as a unique individual.  None of them comes close to the Nordstrom model of perfecting customer service — one customer at a time.

As I listened to the Nordstrom Bootcamp participants, I realized that Nordstrom was no longer competing with other retail stores. As a large eCommerce retailer, they were now competing with Amazon. How does their in store brand, brand promise and brand experience translate to the web? How does Greg Kent translate online?

The Nordstrom Bootcamp was a great reminder that even when you have mastered brand, brand promise and brand experience, the world changes.

I love my HP Laserjet.

I love the Masters Golf Tournament.

I love Nordstrom.

I mostly love Apple.

Yours in entrepreneuring,

Skip Walter

Day 130 of Self Quarantine             Covid 19 Deaths in U.S.:  143,000

Applying Measuring the Path Forward

The theme for this week of flipping perspective is to find different ways to measure how your product benefits your customer (influencer, purchaser, user). For seven days, the flipping perspective process is:

• • Select something that you could measure about your product in use by a customer
  • Take a photo that captures the essence of that interaction
  • Free write on how you would capture the measurements and how measuring this aspect of the interaction could improve the customer’s experience with your product

The Cosmos of the New Venture

Measuring is in the wisdom cycle. There are thousands of things that can be measured in the product and in the interactions with customers. Thousands of analytic software tools exist to help you measure things. The wisdom is to figure out which one or two things to measure that will drive your product forward and will drive your customer acquisition forward.

Measuring is KNOWING.

You can find a PDF of the full Preface, Forward, and Chapters 1 – 6 here.

You can find the introduction to the Cosmos of the New Venture here.

Day 129 of Self Quarantine             Covid 19 Deaths in U.S.:  143,000

Measuring the Path Forward

Flip Comic created by David Robinson

“A parable: A man was examining the construction of a cathedral. He asked a stone mason what he was doing chipping the stones and the mason replied, “I am making stones.” He asked a stone carver what he was doing. “I am carving a gargoyle.” And so it went, each person said in detail what they were doing. Finally he came to an old woman who was sweeping the ground. She said “I am helping build a cathedral.”

“Most of the time each person is immersed in the details of one special part of the whole and does not think of how what they are doing relates to the larger picture.”

“Would you tell me, please, which way I ought to go from here?”
“That depends a good deal on where you want to get to.”
“I don’t much care where –”
“Then it doesn’t matter which way you go.”
― Lewis Carroll, Alice in Wonderland

Milton Freewater, Oregon USA August 10, 2013

Dear Mikhail,

I am enjoying the opportunity of touring Washington and Oregon wine country with friends. It is a warm joy to wander through the vineyards of ripening grapes and imagine the stories that will emerge as the grapes ripen into wine in the cellar and then go to the many tables of their consumers.

I enjoyed reading through the fruits of your opportunity bringing in your latest email. I am not qualified to judge which is the best opportunity. I am glad you were able to notice the difference in energy levels when you use the Bringer of Opportunity Frame versus the blame or problem frame. I particularly liked the number of experiments and the results that you got with your social media “about” exercises.

Now we need to discuss metrics.

One of the gifts of watching our daughters go through their pregnancies and through the raising of our two granddaughters (Alice and Hazel) is seeing how child rearing changes with each generation. Through the dimness of time I can barely remember anything other than being exhausted in the months following the births of our three children. And my wife was far more exhausted than I was.

With the advent of the ever-present mobile phone, not only are our granddaughters part of the most photographed and videoed generation ever (sometimes I think they believe all adults have an iPhone sewn to their hands), they are also the most data recorded generation. Whenever our granddaughters eat, poop, sleep, cry or do their next “first” there is an entry in one of the mobile apps.

These miraculous devices also instantly connect our daughters to their social networks of new parents, many of whom are also awake and connected all hours of the day. As all of this data goes to the cloud and serves as an augmented life logging source for researchers (and advertisers) in the future, I can’t wait to see what patterns they unlock.

Since most of the products we build today, whether software or physical, have embedded usage information, we have mountains more data available to us to understand how a product is used. Yet, what is most important is to figure out is what is most important to measure.

Adrian Slywotzky in How Digital is Your Business? identifies three imperatives for capturing information about your customers in order to:

1. Move from guessing what customers want to knowing their needs;
2. Move from getting information in lag time to getting it in real time;
3. Move from burdening talent with low-value work to gaining high talent leverage.

These three imperatives should guide your observations while you are doing your user research as we talked about in the “designing” email. A key part of your observations should be identifying the metric that will drive your product and business evolution.

When we started Attenex, we picked two legal markets to serve – the legal contract drafting market (Attenex Structure) and the litigation market (Attenex Patterns). Both products were guided by Slywotzky’s third imperative – moving from burdening talent with low-value work to gaining high talent leverage.

Attenex Patterns used visual analytics to increase the productivity of legal document review by at least ten times.  The formal definition of visual analytics is the use of interactive information representations to shape and control an analytic reasoning process.  Sean McNee summarizes the visual analytics process in this diagram:

Early in the product development process we realized that our key metric for Attenex Patterns was how many “document decisions per hour” a lawyer could make with our software versus our competitors tools. We went beyond the eye candy of most visualizations to Deming’s mantra to understand and control our process. Document decisions were the end result of the eDiscovery process.

With the document decisions per hour metric we could quickly test any new features we wanted to add to the product. Every time we added a new feature we would see how many document decisions per hour occurred.  If we increased the document decisions per hour then the feature stayed in. If we decreased document decisions per hour, the feature was pulled out.

In the first five years of Attenex Patterns product development we developed at least 350 different prototypes. About 40% of the feature innovations improved our “document decisions per hour” and stayed in the product. The rest of the features were removed.

In the above diagram you see fifteen of the prototypes we quickly iterated through.  At the very center of the prototypes on the left you can see our first 3D interface.  As good technologists we felt having three dimensional views would be great (like PNNL’s IN-SPIRE had suggested).  We observed that lawyers (and most humans) cannot understand abstract 3D unstructured document spaces.  So we shifted to representing multiple variables in a two dimensional interface.  This interface worked great and with Patterns V2 we launched the product publicly and regularly achieved >10X productivity improvement over our competitors linear review tools saving our customers millions of dollars per litigation matter.

After 300 prototype iterations, we released V5 of Attenex Patterns.  Each dot represents a separate document in the right hand semantic network window.  On the left hand pane we have the organization side of the email address in a social network view for the same set of emails.  An email address provides both the identity of the individual and their linkage to their organization.  Both types of social networks are available for viewing.  Each of the two window panes has referential integrity.  In this case, I’ve clicked on the linkages between Preston.com and Yahoo.com (the yellow arcs in the left pane).  In the right hand pane, all of the emails that were exchanged between Preston and Yahoo are highlighted in yellow.  As I roll over each cluster of documents I can see the topics and subject lines of those email addresses to quickly see what the communications were about.  In this case the discussions were around Acme Construction.

At the urging of Andy Cargile, one of my favorite students from the Institute of Design, we tried an Xbox Controller to navigate and “shoot” the documents to categorize them.  We’d returned full circle to my 1968 midnight vision of shooting documents like I shot spaceships playing Spacewar.  Our production tests showed that we would get an additional 1X performance improvement over baseline (advancing us to 11X productivity).

Xbox controller Interface

Try to imagine us going to New York City’s largest conservative law firms and selling them on their lawyers using a game controller to improve the productivity of their review. This feature was the only productivity improvement we had to pull out of the product. Playing computer games just doesn’t fit with the culture of Big Law.

With the rapid advances in our human centered design and metrics driven process, we demonstrated that we could create value for all of the participants in our electronic discovery value chain.  Over the course of five years, we dramatically reduced the cost of reviewing 300GB of documents.

With the improvements in our technology we were able to achieve large gains for our end customers – the Fortune 1000 corporations involved in high stakes litigation.  Prior to our product, 300GB of material (if printed out in bankers boxes they would occupy an entire Sears Tower) took 200 attorneys a year to review.

My favorite example of the product power was the high profile Board of Directors investigation in 2006 where the lead law firm partner realized on the Friday before a Monday morning Congressional Committee appearance that they were going to have to go through all 300 Gigabytes of material, not just the small sample they’d reviewed previously.

The law firm hurriedly called in 65 attorneys from associates to senior and retired partners to spend the next two days reviewing all 300GB of emails.  Most of these lawyers had never seen our software prior to this emergency.  They learned the product, did the review and printed the responsive documents to make a midnight Sunday plane from the Bay Area back to Washington, DC.  What an improvement from 200 attorneys working for a year to review the same amount of material.

The astute among you will be asking the question, why is this a great business if you’ve done such a great job decreasing the costs for your end customers?

And the answer is – the amount of electronic information to review expands faster than the rate at which we increase productivity.  What a nice business ecosystem to be in.  Last year the industry had its first Petabyte case – that would be 3,000 Sears Towers full of banker’s boxes.

While we were quite excited about the ability of metrics to drive our product development for Attenex Patterns, we could never find a metric to guide the development of Attenex Structure. We had very early sales success with Attenex Structure with Microsoft, 3M and Fair Isaac. Even with all our instrumentation in the product and our testing of prototypes, we could not find a metric that would let us know if a new prototype helped or hurt a user’s productivity. Without a metric, we could neither improve the product nor could we easily sell the product by having evidence to back our productivity claims.

Productivity is often equated with do it faster.  Attenex prioritized its research and development efforts to find and solve those problems where we could achieve at least ten times productivity increases.  Productivity is a complex interaction of “better, faster, cheaper” with ever increasing quality (six sigma) and improved business relationships (customer, supplier, partner).  To improve productivity it is important to have key metrics that are measurable and can be made visible for all parties.  We wanted to ensure that each feature that we added to our products improved the overall measures of productivity for our users, purchasers and influencers.  Productivity increases would include the balancing of machine improvements and user level improvements that often times are non-obvious.  For example should we spend more machine time on identifying near-duplicates (reducing our throughput) in order to reduce the amount of documents that an attorney has to look at (decreased human labor)?  Identifying key metrics and then making it painless to track the metrics and identify patterns is the focus of measuring your way forward.

The major types of productivity improvements can be classified as:

• • Faster
    • Reduced cycle time – the overall number of days, weeks or months it takes to complete a project from beginning to end
    • Reduced process time – the total number of hours consumed in producing the end work product
    • Reduced learning time – the amount of time a user requires to achieve proficiency in a particular area
  • Better
  • Cheaper
  • Increased quality
  • Improved relationship quality with customers, suppliers and influencers
  • Risk Management
  • Increased Reward

Recently, I worked with Daniel Kornev of Zet Universe to help him gain insights into his target market and what metrics might guide his product development. Daniel described his product as a file organization tool for visual thinkers. Visual folks often get frustrated with the lists of lists that Microsoft Windows and Macintosh OS folder based file systems present and our search tools generate. As I listened to Daniel talk about the customer interviews, he mentioned several times that with Zet Universe users could quickly move from one project to another.

I repeated what I’d just heard. “Daniel, listen to what you are saying. I heard you say that you’re not looking for visual thinkers. You are looking for knowledge workers who work on multiple projects during the course of the day and have to switch between those projects quite often. Is that your target market?  If so, you also have your key metrics – time to switch between projects (close one down and open up all the files associated with another project). It’s the switching time that you are dramatically reducing. This metric will also keep your development focused on what features to add. You can do the same thing that we did with Attenex Patterns.”

I can’t wait to see how Daniel moves forward with his metric insight.

As more of your product is digital and you instrument your product, you are ready to move to key metrics for measuring your marketing and selling initiatives.  John Wannamaker shared “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” With the advent of digital marketing and social media it is getting easier to test which activities matter to your target customers.

Ash Maurya with his Leanstack product for testing your marketing activities illustrates this problem nicely with these images:

With all of the tools that we have today it is easy to get lost in the minutia.  Along with the metrics, you also want to remember why you wandered into the swamp of metrics – to generate insights that will allow you to provide extraordinary value to your customers.

Padraig at Red Kite Prayer shares a story of how paying attention to minutia can detract from your overall goals:

“I used to have a cyclocomputer, a not very fancy one. It told me how slow I was going. It gave me my average lack of speed, my top slowness and the paltry total distance I’d covered. I hated it.

“Of course when I first affixed its magnet and wired its sensor, I was excited. So this is what 25mph feels like. So that’s how far it is from my house to the end of my second water bottle. All this new information was fascinating. I used it to formulate boasts to friends about how much further I was riding than they were and how much faster I had climbed this hill or descended that one. I used it to measure my progress from the chilly beginnings of spring to the stiff breezes of leaf strewn autumn. And on some level, I just accepted that this was part of the equipment, part of the way you rode a bike.

“Last summer, Wired told me about the boom in personal metrics measurement. Suddenly this trend that cycling has been following for years was spreading and “booming.” People loved and felt inspired by statistics. And with the proliferation of devices from Garmin and others that would quantify your work in dozens of different ways and allow you to make bar charts and graphs and multicolored pie representations of your everyday grind, who could blame them?

“Why generate sweat when you can generate stats?

“One day, about two years after I’d purchased my first such device, I was struggling into a headwind up a false flat staring down at its digital readout. 14.1 mph. Grunt. Groan. 14.2 mph. Muttered curses. 14.3 mph. Pain. Strain. Incredulity. 14.1 mph. Back and forth like this for a few minutes, all the time with my head down, all the time bouncing between 14.1 and 14.3 mph, in other words, working hard for no real gain with my head down and a growing frustration.

“At some point, I had a revelation. I reached down, unplugged the computer and slid it forward out of its bracket, depositing it in a jersey pocket, before lifting my head, seeing both the forest AND the trees and riding off on my merry, if deeply fatigued, way.

“I realized in that moment that I had, at some point over the preceding years, ceased to ride my bicycle. I had begun to ride my computer, and, in the end, it had ended up riding me. I had stopped collecting experiences on my bike and resorted only to collecting statistics. Perhaps worst of all, I had stopped seeing where I was going. I was the computer. The computer was me.

“Computers don’t ride bicycles. They compute.

“It was shocking to me how much more I enjoyed riding once I stopped measuring my rides. I became more aware of my form and position on the bike. I live in a beautiful part of the country, and I began to see it. I got faster, if not in actual digital terms, then certainly in my heart, because I felt faster. I swore then to reaffix my computer only after deep and careful thought about what doing so would get me.

“A Zen master once said, “When you are drinking tea, only drink tea,” and, for me, this applies to the bicycle as well. When I am riding my bike, I try only to ride my bike. I don’t concern myself with speed, fitness or progress. Those things are elusive. They come and go. When I ride, I become fit. I progress. I go fast. Except when I ride myself right out of fitness, speed and progress. The form dips and swerves. The consequences of my riding change and shift, but the riding is always there.

“For me, measurement started as a curious and entertaining diversion, but ended as an obstacle. Somewhere along the fault line of the pro-hobbyist divide, technology and science have interceded. Those who wish to race, if not professionally, then certainly as the pros do, have followed them down the statistical path. It is, perhaps, a hobby within the hobby, neither bad nor good, but simply another thing you can do with your bicycle.

“I’ve left it far behind now. Occasionally I wonder exactly how fast I’m going, but the thought passes. I’m going fast enough.”

One way I’ve found to re-focus the product marketing and development teams is to periodically ask them to improve the performance of the product or of our marketing activities by at least 10X. I learned this lesson many years ago while working on ALL-IN-1. When I asked the software developers to improve performance by 10% I would get improvements ranging from -10% to +3%. I never came close to a meaningful improvement.

Then one day out of utter frustration I asked for 10X performance. Within two weeks the team had improved performance by 500%.  I couldn’t believe it.  What changed? As we did an after action review, we realized that by asking for a 10% improvement the developers just made minor changes. When asked for 10X performance, the developers knew they had to think differently about the opportunity. They had to think outside the box.

I was delighted to find that this technique also works for marketing.

Yours in entrepreneuring,

Skip Walter

Day 128 of Self Quarantine             Covid 19 Deaths in U.S.:  142,000

Applying Bringing Opportunity

Some of the best professionals at bringing opportunity are those in the advertising profession. In a very short period of time – thirty seconds – they must convey the nature of their product and the opportunity it brings to the buyer. The good advertisers will do this through some form of story telling.

The flipping perspectives theme for this week is to look at TV ads or their Youtube equivalents and identify the opportunities the advertisers are bringing to you. You can start with the Super Bowl ads and select ads from the best of and the worst of.

For seven days, the flipping perspective exercises with the bringing opportunity theme process are:

• • Select an ad and watch it – preferably several times.
  • Capture a screen shot of a frame of the ad that speaks opportunity to you
  • Free write on the way that the advertising company is using the ad to bring you an opportunity. Reflect in your free writing on what you felt, heard, and saw

The Cosmos of the New Venture

Bringing completes the core triangle of work of the entrepreneur. The product is conceived, and then designed, and then brought to the customers, investors and talent.

Bringing opportunity is about PITCHING and CATCHING.

Bringing opportunity is as much about knowing how your opportunity will be caught by the customer as it is by sharing stories (pitches) of the opportunity you bring. Bringing opportunity is about you doing the customer a favor, not having the mindset of the customer doing you a favor.

You can find a PDF of the full Preface, Forward, and Chapters 1 – 6 here.

You can find the introduction to the Cosmos of the New Venture here.

Day 127 of Self Quarantine             Covid 19 Deaths in U.S.:  141,000

Bringing Opportunity

Flip Comic created by David Robinson

“Embrace change as the bringer of opportunity. You should not fear change. You should fear lack of change, for change is the bringer of opportunity and it is through exploiting opportunity that you grow and develop as a person.”

Life Coaching Insights.

Three Sleeps Vineyard, Moser, Oregon August 2, 2013

Dear Mikhail,

I really enjoyed the many stories of your asking for help in your last Email. I appreciate hearing the many insights and wisdom you received as you opened yourself to asking others for help. I especially enjoyed your reaching out to help others so that you could experience both sides of the helping relationship.

I really enjoyed the many stories of your asking for help in your last Email. I appreciate hearing the many insights and wisdom you received as you opened yourself to asking others for help. I especially enjoyed your reaching out to help others so that you could experience both sides of the helping relationship.

One of my biggest struggles as an effectual entrepreneur is remembering that I am a bringer of opportunity when I talk with customers, investors, and talent I am recruiting. It is so easy for me to fall into the trap of asking for a handout. Or worse, I feel like a used car salesman.

Most of us when we enter a selling situation treat it as the buyer doing us a favor by buying what we have to offer. It puts the seller immediately into the one down position. The interaction changes when you realize that you are doing the buyer a favor by bringing them an opportunity. The nature of who has the power changes dramatically just by this flipped perspective.

As an effectual entrepreneur, understanding the opportunities that the buyer is interested in that intersects with the opportunity that I am uniquely qualified to bring the buyer is my goal. My father called this warm armpit selling. That is, he couldn’t bring his customers an opportunity unless they were able to “roll up their sleeves” and sweat together over the customer’s challenge. He needed to get to know his customer’s business.  He could only do that by working together with the buyers in the same physical space, preferably in their factories.

Dan Pink in his book To Sell is Human shares some research on this dance of opportunity bringing:

“At the epicenter of the entertainment business is the pitch. Television and movie executives take meetings with writers and other creative types, who pitch them ideas for the next blockbuster film or hit TV series. Motion pictures themselves offer a glimpse of these sessions. “It’s Out of Africa meets Pretty Woman,” promises an eager writer in the Hollywood satire The Player. “It’s like The Gods Must Be Crazy except the Coke bottle is an actress!” But what really goes on behind those studio walls is often a mystery, which is why two business school professors decided to helicopter behind the lines for a closer look.

Kimberly Elsbach of the University of California, Davis, and Roderick Kramer of Stanford University spent five years in the thick of the Hollywood pitch process. They sat in on dozens of pitch meetings, analyzed transcripts of pitching sessions, and interviewed screenwriters, agents, and producers. The award-winning study they wrote for the Academy of Management Journal offers excellent guidance even for those of us on the living room side of the streaming video.

Their central finding was that the success of a pitch depends as much on the catcher as on the pitcher. In particular, Elsbach and Kramer discovered that beneath this elaborate ritual were two processes. In the first, the catcher (i.e., the executive) used a variety of physical and behavioral cues to quickly assess the pitcher’s (i.e., the writer’s) creativity. The catchers took passion, wit, and quirkiness as positive cues— and slickness, trying too hard, and offering lots of different ideas as negative ones. If the catcher categorized the pitcher as “uncreative” in the first few minutes, the meeting was essentially over even if it had not actually ended.

But for pitchers, landing in the creative category wasn’t enough, because a second process was at work. In the most successful pitches, the pitcher didn’t push her idea on the catcher until she extracted a yes. Instead, she invited in her counterpart as a collaborator. The more the executives— often derided by their supposedly more artistic counterparts as “suits”— were able to contribute, the better the idea often became, and the more likely it was to be green-lighted. The most valuable sessions were those in which the catcher “becomes so fully engaged by a pitcher that the process resembles a mutual collaboration,” the researchers found. “Once the catcher feels like a creative collaborator, the odds of rejection diminish,” Elsbach says. Some of the study’s subjects had their own way of describing these dynamics. One Oscar-winning producer told the professors, “At a certain point the writer needs to pull back as the creator of the story. And let [the executive] project what he needs onto your idea that makes the story whole for him.” However, “in an unsuccessful pitch,” another producer explained, “the person just doesn’t yield or doesn’t listen well.”

“The lesson here is critical: The purpose of a pitch isn’t necessarily to move others immediately to adopt your idea. The purpose is to offer something so compelling that it begins a conversation, brings the other person in as a participant, and eventually arrives at an outcome that appeals to both of you. In a world where buyers have ample information and an array of choices, the pitch is often the first word, but it’s rarely the last.”

Pink, Daniel H.  To Sell Is Human: The Surprising Truth About Moving Others (pp. 157-158). Riverhead Hardcover. Kindle Edition.

The art form of warm armpit selling is being passionate about the opportunity you are bringing and then collaborating with the “catcher” to create a joint opportunity.

Watching a friend with her delightful “terrible two” daughter reminded me of a different form of this collaboration that my wife became expert at in raising our three children. The “terrible twos” were not a fun time for me at the Walter house. My answer to every request was “No.” My friend changed the frame for the “terrible twos” stage by offering a meaningful choice rather than dictating a way forward. Instead of “put on your coat” she would ask “Which would you rather wear – the red coat or the blue sweater?” Who knew it could be that easy.  Just flip your perspective to inviting the child to participate in the decision process.

I first understood this bringing of opportunity mindset in 1980 while we were selling the idea of an office automation system to RJ Reynolds Tobacco (RJR). They were looking for a way to replace their aging paper tape Telex systems that were cumbersome to use and expensive to operate.  As RJR was expanding the number of office and manufacturing sites, the speed with which they could move information was increasingly important.  We did a half day analysis and realized that our preliminary design would nicely match their needs since this was primarily an electronic mail application.  Then the client gave us a rude awakening.   They liked our ideas but IBM had agreed to give them a systems analyst and a corporate telecommunications consultant for a month to analyze their needs.  We knew we could not match that offer but got the customer to agree to give us a chance to bid on the results of the IBM system analysis.

A month later we got called back in and given a copy of the IBM analysis.  My spirits soared.  All the IBM folks had done was draw a few illustrations and copy some brochures.  I knew that we could do better in a few short hours.  We recently installed one of our new word processors so we could turn out nice looking proposals in short order.  I asked if we could come back the next afternoon with the analysis and proposal that we had been working on for the last month (a small white lie, but the work that we would do that evening would look like several months work compared to the IBM analysis).  The client agreed and we hurried back from Winston-Salem to Charlotte, NC.  I phoned ahead to my colleague, John Churin, to clean up the architecture diagrams that we created.

Drawing on our previous design work we created a twenty page analysis with several diagrams and a three page consulting contract to design their system for real, for a mere $50,000.  We took the proposal back the next afternoon and the customer was most impressed.  They never expected DEC to upstage IBM, and to do a free analysis in the process.  The customer agreed to our proposal and the next day sent us the approved purchase order.  This was a first for our region, getting a paid project just to do a specification.  We were off and running.

While John and I were the primary consultants on the project, having real customer dollars allowed us to bring our opportunity to the rest of our organization by tapping into expertise around the country that we didn’t have.  Under the guise of project reviews we received great guidance and critiques of the completeness of our designs.  We went back with a 100 page specification and a twenty page proposal for the next phase of the project.  The customer was impressed, but then gave us the bad news that RJR was reorganizing and that this project was cancelled.  While disappointed, we now had a very complete specification that we’d been paid for.  We had received real customer dollars without requiring DEC to invest. Now we could bring this opportunity to other large enterprises.

Bringing opportunities to customers or investors is a bit like the bespoke tailor story that Larry Keeley shared with you in your Institute of Design Introduction to Design Planning.  In the Himalyas when a family decides it needs clothing, they hire a bespoke tailor who lives with them for a month. The tailor watches the activities of the family and then custom crafts clothing to “fit” the needs of each family member. The story nicely fits what a human centered designer should do.

The bespoke tailor metaphor also fits what you as a “bringer of opportunity” need to do – understand the needs of your customer and then work with them to tailor the opportunity to fit their needs.

Much as a good parent comes to understand the unique capabilities of each child and adjusts their environment, books, toys, and experiences to pursue their opportunities, you need to bring the right opportunity at the right time for your customers, investors and talent.

As you mentioned several times in your previous letters, a lot of the advice you are getting comes in the form of “tell more stories.” I heard that advice for so many years and mostly ignored it because I knew I wasn’t an English major in college nor had I ever focused on generating narratives. Finally somebody pointed me to Steve Denning’s notion of a springboard story.

Steve explains that

“. . . a springboard story enables a leap in understanding by the audience so as to grasp how an organization or community or complex system may change.

“A springboard story has an impact not so much through transferring large amounts of information but through catalyzing understanding. It enables listeners to visualize from a story in one context what is involved in a large-scale transformation in an analogous context.”

Steve gives an example of how he experienced the power of a springboard story:

“The origin of my interest in organizational storytelling was simple: nothing else worked. As a manager in the World Bank in 1996, I had been trying to communicate the idea of knowledge management and to get people to understand and to implement it. At that time in that organization, knowledge management was a strange and generally incomprehensible idea. I used the traditional methods of communicating with no success. I gave people reasons why the idea was important but they didn’t listen. I showed them charts and they just looked dazed. In my desperation, I was willing to try anything and eventually I stumbled on the power of a story, such as the following:

“In June 1995, a health worker in a tiny town in Zambia logged on to the website for the Center for Disease Control in Atlanta Georgia and got the answer to a question on how to treat malaria. 

“This was June 1995, not June 2001. This was not the capital of Zambia but a tiny place six hundred kilometers away. This was not a rich country: this was Zambia, one of the poorest countries in the world. But the most important part of this picture for us in the World Bank is this: the World Bank isn’t in the picture. The World Bank doesn’t have its know-how accessible to all the millions of people who made decisions about poverty. But just imagine if it had. Think what an organization it could become.

“In 1996 in the World Bank, this story had helped galvanize staff and managers to imagine a different kind of future for the organization and to set about implementing it. Once knowledge management became an official corporate strategy later that year, I continued to use similar stories to reinforce and continue the change. The efforts were successful: by 2000, the World Bank was bench marked as a world leader in knowledge management.”

Buried in the springboard story discussion above is the springboard question – what would the World Bank organization be if we had our know how accessible to millions? I call this the springboard bringer of opportunity question.

Following our near success with RJ Reynolds, we brought our office automation opportunity to DuPont. The DuPont sales rep and I went to lunch with Ray Cairns, CIO for the Textile Division, and we talked about the history of our efforts and the capabilities of our ideas.  He was an active questioner and probed far and wide about where we’d been and where we expected to go.  He knew that we were developing this capability in conjunction with our customers and then would move it into DEC’s central engineering.

Our unique offer to Ray was they would have an unlimited use license for the first version of the software within DuPont.  Then, if they liked the tools, they would have to buy licenses for the next version of the product.  This offer allowed them to amortize the cost of the project over quite a few hardware systems which made the costs appealing to their financial analysts.  We appeared to be giving up quite a bit of future software revenue, but we were betting that we would have a new version of the product well before they were ready to deploy the software across a lot of systems.  This offer was win-win for both corporations.

I relaxed and felt quite good that the decision maker would decide in our favor.  Little did I know what I was in for in the formal meeting with Ray and his twelve direct reports.  We had professional 35mm slides to present our story and product ideas.  At the end of the 30 minute overview presentation, Ray asked several warm up questions and then hit me with the question that rocked my world: “how has this product helped impact Digital’s bottom line, either positively or negatively?”  He knew from our lunch conversation that the product didn’t even exist, so that it couldn’t have much of an impact.  I knew he wasn’t a stupid man. What was going on here?

In a flash of desperate panic brilliance, it came to me that he wasn’t really asking about DEC; he was using me as a convenient foil to get critical education across to his management team.  I mumbled a few things about our unique approach to developing application software in conjunction with a customer.  Then, I turned the question around (the springboard bringer of opportunity question) to the DuPont management team and asked them how they thought this product might affect DEC’s bottom line?  It is much easier to speculate about the cause and effect in someone else’s organization when you are at a level of optimal ignorance than to do speculation about your own organization.

What ensued was a great one hour conversation with Ray’s technology executives about the implications of such a product and technology on a large, complex organizational system like a Fortune 50 company.

After the meeting, we were awarded the order and we now had the funding to take the ideas of our specification and our demonstration into a full blown product.  The learning for me in this meeting was quite revealing.  Our way of approaching the selling of our ideas to individual contributors and middle managers was the more traditional features and benefits – what Simon Sinek refers to as the “What” and “How.”  Ray made clear that at a certain level of management, the rules change and the offer must move from features and benefits to higher order implications.  In this case, we had to show what effect our product would have on both the revenue side of DuPont and the expense side of DuPont.  In order to answer that kind of question you have to move from the product under study to the system under study.  In particular you have to look at the interactions of an entity with its environment.

We were really rolling now. I’d evolved from presenting lots of facts and features to understanding how to bring opportunity through the springboard story and the springboard bringer of opportunity question.

Yet, I still didn’t understand how to systemically bring about opportunity in a large meaningful way. David Stone, DEC’s European Software Services VP, showed me the real power of combining an exciting opportunity pitch with a large group collaboration to generate business results.

I was asked to speak at the DEC European Software Services Meeting in Majorca, Spain, in 1980 to describe what we were doing in the U.S. with Office Automation.  I gave an overview of the product and the kinds of customer solutions we were generating AND the revenue we were creating.  This got the European managers attention as they were going through a revenue shortfall at the time.   The immediate set of questions I got was about translating the product into each European language.  It was an “oh, of course” type of question for me, but was unheard of in products of the early 1980s where the user interfaces were hardwired into the software code.  I shared that it should be no problem.  If you want to change the interfaces, just change the forms using the standard VMS tools.  All of the messages that we present on the screen are forms so it was easy for a systems analyst to just go ahead and change them.  And we’ve adhered to all the VMS coding conventions so all the National Replacement character sets should work.

It was like I ignited a bomb.  Everyone came out of their seats and started throwing a hundred questions at me.  Seizing the moment, David Stone called a half hour break so that the attendees could get their questions answered informally and allow the country groups to caucus on what my presentation and the ALL-IN-1 product might mean for their business.  He then called the group back to order and gave them a challenge.  Based on what they heard, did they think they could make up any part of the $100 million revenue bookings shortfall Europe was projected to have for the year?

He first asked each country manager group to gather together and develop a straw plan for using the ALL-IN-1 product to address the revenue shortfall.  In the process, the groups were to identify any issues, questions or concerns that they had and they could pose those to me in their group presentations.  Each group went off and spent ninety minutes discussing the opportunity.  Then each of the ten country groups made their reports and identified their issues.  As each group reported, I went through my large library of 35 mm slides to find the slides that addressed each issue or question.  I got David to stall for a few minutes after the last group so I could arrange the slides in some semblance of presentation order.

I then stood up and gave a “custom” presentation addressing all of their issues.  The European country managers were really excited.  Until that moment I had not realized the power of a “custom” presentation to go along with our easily customizable product.  The group correctly sensed that this product was quite real and could be readily adapted for each country’s unique business needs.  In the past, Europe had to take a one size fits all set of products that were English language and US culture centric.  Long delays would occur to get even minimal localization done for each country.  Now they’d found a product that could be introduced simultaneously throughout Europe in each natural language at the same time as the US introduction.

David asked the country groups to take this new information and come back with a “committed” forecast of how much of the revenue shortfall they could make up with this product.  The groups quickly formed and in 15 minutes came back with their commitments.  The commitments totaled $120 million.  David scaled the numbers back to total $100 million to mitigate the exuberance factor.  I was blown away and now fearful for my life.  I wondered what would happen if they all woke up and decided they’d been railroaded into a commitment in the bliss of the moment.  I figured they’d shoot the messenger – me.

The group then started to work on the marketing program to make their commitments happen.  Using the natural creative competitiveness of the countries, David broke them into their country units to develop logos for the $100 million in 100 days campaign.  Then he organized cross-functional and multi-country groups to develop:

• • the twenty page newsletter that would go out to all sales and software personnel in Europe,
  • the training program for sales and software personnel,
  • the localization teams to translate ALL-IN-1 into each country’s natural language,
  • other applications that could be combined with ALL-IN-1 in each geography.

By the end of the four day meeting, the Europeans now had a major new product that was their own, a marketing program that they could roll out, and a new found respect by their sales peers.  I was asked to stay over another week to train the software consultants who would be doing the translations.  I asked that each country supply a software consultant to come work with our development team for a month at a time to make the US developers aware of multi-cultural needs.  Within the month, the European teams had ALL-IN-1 translated into 10 different languages and cultures.  Within the 100 days they’d exceeded their goals and in fact did $120 million of additional business.

In David Stone, I saw and appreciated a master at management leadership and motivation.  For the next year I spent as much time in Europe as I could to learn about changing the behavior of a large organization.  I asked David how he knew that my presentation would set off so much useful energy.  He laughed and said that he had no idea that it would.  “What I do is schedule an agenda that has as much informational diversity as possible running the gamut from product information, service information, corporate strategy, engineering strategy, organizational behavior change stuff, and management education.  I never know which of these topics will cause an energy hit with these 150 managers, but I’m confident that one of them will.  When energy resonates between the audience and the speaker then I go into action.  You are good at creating energy with a powerful product vision. I know how to move energy into actionable business results.  Business action is what I’m really good at.”

The bringer of opportunity contrasts with the solver of problems approach to selling. The solver of problems approach is summarized in the Blame Frame for addressing customer problems:

• • What is the problem?
  • How did it get this way?
  • Who caused it?
  • What are you going to do about it?

As you hear those questions, does your personal energy expand or contract?  For most of us, our energy contracts.

The bringer of opportunity works hard to focus on Outcome Frame questions to increase our own energy and our “buyers” energy:

• • What are we trying to create?
  • How will we know we created it?
  • What resources do we have to get started now?
  • What other opportunities does this lead to?

How can you think outside of traditional approaches to bring your opportunity to all of the customers, investors and audience members you are touching?

Yours in entrepreneuring,

Skip Walter

Day 126 of Self Quarantine             Covid 19 Deaths in U.S.:  138,000

Applying Asking for Help

The theme for the next seven days of flipping perspective is to catch yourself both asking for help and giving help. Seek out opportunities to ask for help ahead of reaching any form of small or large crisis. Be genuine about asking others either inside or outside your new venture about how you might help them with one of their current issues.

For the next seven days, the flipping perspective activity is:

• Identify an opportunity to either ask for help or give it – alternate between the two
• Capture an image of the helping environment
• Free write on both the specifics of the helping situation (either receiving or giving) and make sure to capture what you saw, heard and felt.

The Cosmos of the New Venture

Asking for help is one of the most courageous acts that any human can perform. The act of asking for help places you in a position of vulnerability. In a new venture where there are so few “knowns” and little place for experts and there is a premium on effectual thinking, the entrepreneur needs a well-developed capability for asking. The entrepreneur needs to instill this value in all the members of the new venture. Along with Flipping Perspective, Asking for help draws the community in to help the new venture succeed.

Less obvious is that the currency for asking for help is to be generous in giving help. The non-obvious role of Asking is that it develops community.

Asking for help is about OVERCOMING fear.

You can find a PDF of the full Preface, Forward, and Chapters 1 – 6 here.

You can find the introduction to the Cosmos of the New Venture here.