October 25, 2010

64) The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich

危 wēi  danger

Timothy Ferriss, an American writer, educational activist, and entrepreneur wrote a semi-autobiographical self-help book in 2007 that was well received by friends and family.  Ferriss’ working title, ‘Drug Dealing for Fun and Profit’, wasn’t as well received.  He decided to proceed with the name anyway, liking it because it polarized opinion.  However, once he had secured distribution, Wal-Mart vetoed the title’s use so Ferriss was back to the drawing board.  He found it relatively easy to whittle the list down to 12 but found it tough to select a final name: everyone had an opinion on the best, including his agent and distributor but none agreed.  Surely he would be best going with his gut feel and upsetting either his distributor or agent?

机 jī opportunity

Instead, Ferriss decided to look for some data. He took 6 prospective titles that everyone could live with:  including ‘Broadband and White Sand’, ‘Millionaire Chameleon’ and ‘The 4-Hour Workweek’ and developed an Google Adwords campaign for each.  He bid on keywords related to the book’s content including ‘401k’ and ‘language learning’: when those keywords formed part of someone’s search on Google the prospective title popped up as a headline and the advertisement text would be the subtitle.  Ferriss was interested to see which of the sponsored links would be clicked on most, knowing that he needed his title to compete with over 200,000 books published in the US each year.  At the end of the week, for less than $200 he knew that “The 4-Hour Workweek” had the best click-through rate by far and he went with that title.

His experimentation didn’t stop there, he decided to test various covers by printing them on high quality paper and placing them on existing similar sized books in the new non-fiction rack at Borders, Palo Alto.  He sat with a coffee and observed, learning which cover really was most appealing.

My colleague in New York, Joe Gerber has been using this approach recently with real success, it’s a reminder to me that every part of a business (including the virtual) can be prototyped.

How About…

  • Prototyping every part of your business before launch?
  • Placing advertisements into existing online networks before launch for feedback?  e.g. as Joe says how about using Foursquare to figure out “if this is worth stopping for?”

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source video: http://vimeo.com/3934635

October 13, 2010

63) Netflix

危 wēi  danger

Great businesses continually improve, prototyping new offers and services before rolling them out to the relevant customer base.  But, success criteria for innovations are often vague and ‘success’ is therefore highly subjective, particularly when innovation teams only prototype to small groups of customers.  The alternative, rolling out to large numbers of customers immediately is too risky though?  And anyway, given how quickly markets change how could the team say with confidence that any change in performance was attributable to the change in strategy?

机 jī opportunity

In my previous post about Netflix I sang the praises of the company placing a top-level strategy summary in the public domain – you can see it here.  Slide 20 particularly caught my eye, a brief slide on customer satisfaction:

I love the idea of breaking customer bases into equal sized groups, allocating each to different employees or teams and then giving them free reign to attempt to improve their group’s experience.  I imagine that this enables more offers to be prototyped and creates a competition internally to deliver quantifiable results.  I also admire the size of these groups in this case – many companies would be tempted to limit the trial to a handful of customers at most, going with groups of 10,000 enables Netflix to really quantify the benefit and assess relative performance.

The approach establishes what would be called a ‘control set’ in a science experiment and encourages agreement in terms of what success metrics might be in advance.  In fact, my colleague Elizabeth said in a talk recently that she likes to approach piloting using the scientific method:

set a hypothesis -> agree variables -> agree metrics -> agree duration -> feedback and conclusions

That makes sense, and contrary to many people’s perceptions it doesn’t need to stifle creativity. After all, the development of new approaches to pilot and the spotting of interesting new patterns in any results depend on creativity.

How About…

  • Taking a scientific approach to piloting new offers?
  • Thinking how you might divide your business into comparable units for benchmarking?
  • Tasking teams with innovating the offer to different units, then rolling out the most effective new approaches?

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August 16, 2010

60) Netflix (for the 3rd time)

危 wēi  danger

I love Netflix’s approach – I’ve written more blog posts about it than any other company (as you can see here).  Over the last few months a few people have pointed me to a version of the company’s strategy that is posted online as a short briefing to their job candidates – I took a look and was impressed with what I read but a little part of me wondered if it had been accidentally leaked into the public domain.  Surely making its strategy and beliefs public gave some sort of advantage to its competitors?

机 jī opportunity

To the contrary, the more I have thought about it the more I think it is another smart move from Netflix.  After all, it’s naïve to think in this technological age that a top-level company strategy can be kept a secret (I know that Apple is perhaps the counter-argument but even its broad strategy leaks into the public domain occasionally).  Broad strategies and ideas are easily copied – it’s the details in tactics, execution, capacity to learn fast and ability to change direction that differentiate the winners and losers.  With that in mind it makes complete sense to make top level strategy public if it reaps any rewards at all.

Those rewards might include:

  • Enabling the right potential employees to self-select themselves for recruitment
  • Ditto for partners
  • Clarity of goals and beliefs to the whole organization (after all, I’m amazed how many employees think that their company doesn’t actually have a clear goal)

Anyway, I’m confident that the company knows exactly what it’s doing because this is a version that was updated only 5 days ago:

How About…

  • Making your strategy entirely open (after all it’s likely to be common knowledge anyway)?

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