| My name is Andrew Nicol. I live in Hamilton, New Zealand. My aim is to lead and encourage organisations to vividly live People Matter. This is my blog of random thoughts. My main blog is lead2live.com, check it out. |
© 2006 – 2008 Andrew Nicol. All Rights Reserved.
In case you haven't seen it. Here is the 42 below ad that they run off-shore. I saw it a couple of years ago. It is a classic take at how others think about NZ from the other side of the world.
I love it. It is edgy so I thought I would post it.
Disclaimer: drinking 42 below may be linked to the killing of your brain cells ... blah blah blah. You can view their other ads here.. (CONTENT WILL OFFEND)
Bessemer Venture Partners is perhaps one of America's oldest venture capital firm, carrying on an unbroken practice of venture capital investing that stretches back to 1911.
They have a "Anti-Portfolio" section on their website discussing some of the names they have passed on in the Venture Capital stage. Just small names like Apple, eBay, Fedex, Google to name a few.
Check it out here, its mind blowing to think about how much money they missed out on.
[Hat tip: Idealog]
I was chatting to someone the other day (Jim or Alf or Vivek or all of the above) about how Google or TradeMe or Microsoft will eventually have their day. There is a day coming that they will not be the biggest or best, and there is a day coming when they may not exist. It may not be in the next 5 years but the day will come.
Do you think it is possible to take on tradeMe or Google? SkrentaBlog offers 12 tips to taking on Google. Have a read, some of them are really applicable to taking on any huge company, product or service. Comapnies like TradeMe or Telecom or Manpower. Here are a couple of the highlights.
# 1, A conventional attack against Google's search product will fail. They are unassailable in their core domain. If you merely duplicate Google's search engine, you will have nothing. A copy of their product with your brand has no pull against the original product with their brand.
#2, Duplicating Google's engine is uninteresting anyway. The design and approach were begun a decade ago. You can do better now.
#3, You need both a great product and a strong new brand. Both are hard problems. The lack of either dooms the effort. "Strong new brand" specifically excludes "search.you.com". The branding and positioning are half the battle.
# 9 Your product must look different than Google in some way that is deliberately incompatible with their UI, for two reasons. One, if you look the same as them, consumers can't tell how you're different, and then you won't pull any users over. Two, if your results are shown in the same form as Google's, they will simply copy whatever innovations you introduce. You need to do something they can't copy, not because they're not technically capable of doing so, but because of the constraints of their legacy interface on Google.com.
# 10 Your core team will be 2-3 people, not 20. You cannot build something new and different with a big team. Big teams are only capable of duplicating existing technology. The sum of 20 sets of vision is mud.
In business I believe that Ingenious means providing remarkable and inventive and edgy and stunning service.
Ingenious companies care about their customers and are truly creative about meeting their needs. The type of service they provide gets noticed and talked about and ingenious businesses are known to be the experts, the geniuses, the elite, the ONLY place to get that service.
Read my full post at viewpoint.net.nz
Just one person in any one company can make it or blow it. One person can sent you away feeling like the most important person in the world or make you feel like they don’t value your business.
Yesterday Alf & I were flying to Christchurch for the day. We had a heap to discuss prior to getting their so I left Hamilton on the 6am flight to Auckland to connect with the 6:50 flight to Christchurch. Alf was on this flight joining me in Auckland and I had preallocated a seat for him next to me, because we were checking-in in different cities.
My Hamilton flight always gets in after the Christchurch Flight is boarding and I am one of the last on the plane. I get onboard and some other guy is in the seat next to me! So texting Alf I find out he is in 17d. I explain to the cabin assistant Alf had been preallocated into the seat next to me, and could me be moved into the seat opposite. He said he will check with the Captain and while he is doing that some other guy comes from the back and sits in that seat.
Now the cabin assistant has a choice. Does he try to make something work, or just walk away. There are after all spare seats in row 2 behind me, and I’m sure one of them wouldn’t mind moving forward to row 1. He can help me or bug the snot out of me and do nothing.
He does nothing and says nothing further.
Alf and I missed out on really quality time together that we will never again enjoy :( (secretly I think alf planned it to get some sleep) and we arrived in Christchurch less prepared than we should have.
Oh, the airline was Air NZ, not that this is a surprise because there is no other alternative for me out of Hamilton.
It all comes down to one person. How often does one person blow it in agoge and we don’t know or care? How often do I blow it?
Oh one last point. The guy sitting next to me heard all of this. He could have offered to move to the seat opposite (before the other guy came up), and been closer to the door, and had more leg room. Personally I would have offered to do that. But he said nothing and in a funny way I feel sorry for that guy.
Susan Wood got all excited tonight about 42 BELOW selling out to Bacardi for 77c per share (a 33% premium). She seemed to imply that once again a Kiwi company made good and got the better of a big foreign national. - YEAH RIGHT.
The company said the offer was an opportunity for 42 BELOW to become a global brand. "I think we as New Zealanders should be pretty rapt to see a Kiwi brand become an icon in the luxury goods world. The brand has always been unashamedly New Zealand and now with Bacardi's help our country's vodka brand is set to become a major global force," Ross said.
Good on Geoff Ross for selling, it wasn't making money anyway and it would be a very hard journey into the international markets without further backing.
I can't help but wonder however if we will ever see some sharp, innovative, iconic New Zealand brands actually stay on shore and still make it overseas. Unfortunately that sort of company wouldn't get to appear on Close-Up!
For the record I haven't even tried 42 BELOW, but this post is not about alcohol, it's about Kiwi companies selling out.
“The story is told of the battle of the Midianites near Mt. Gilboa. Gideon, during his personal reconnaissance of the enemy, noticed that their sentries were nervous.
To create panic in the enemy lines, Gideon planned a night attack with a relatively small force. Each of his 300 men was issued a trumpet, a pitcher, and a torch. Convinced that the Lord was on his side, he gave the battle order. The men lit the torches, hid them in the pitchers, slung their trumpets, grasped their swords, and quietly went to predetermined positions.
When the Midianites changed their watch at midnight, Gideon gave his signal. His men blew their trumpets and waved their torches. In the resulting panic in the Midianite camp, tribe fought tribe while Gideon and his Israelites stood and watched. And thus the battle was won by the strategy of an observant commander who understood how to confuse the opponent.”
With some stretch here are some thoughts that could apply to business competition.
Above all it comes down to using the right maneuver for the situation. He was mobile, flexible and superior at the critical point of attack.
Quote of “Sun Tzu – Strategies for Marketing”
'The best way to make a small fortune in aviation is to start with a huge one'. I am sure that Mike Pero might have personally learnt this lesson after sinking $10 million into Origin Pacific. The full-blown disintegration of Origin Pacific last week, confirmed New Zealand’s domestic aviation market has become fully mature.
No one, other than a huge multi-national, has the resources to compete with Air NZ. They, along with Qantas who choose not to do regional, are the Super Powers in the domestic market and there is simply no room for ‘secondary [ugly] powers’, like Origin. In the ‘business guerrillas’ camp we have small niche operators like Air2there, Sunair and Sounds Air. Each has very niche markets that Air NZ simply doesn’t care about or is too small to enter.
BIG question - Can you become BIG without directly competing with the Super Powers?
Short answer - No!; but the road of business is littered with companies that tried.
There is a place for specialists with a niche market, but ultimately they have to be prepared to stay as “guerillas”.
If you are not happy being a guerilla, then sooner or later you are going end up in the middle ground. To stay there and grow to be BIG, you will have to take it to the Super Powers. Once you reach the never never land of the Secondary Powers, you now must compete in price, service and features. If you can’t compete in that position for a prolonged period of time and if you can’t continue to grow month on month, you are near stuffed!
Now here’s the challenge if you want to be big, somehow you need to grow and yet maintain the nature of guerilla warfare. Making very strategic decisions about the markets, even specific customers you want, the service you will offer and the prices you will charge. If you can continually move the battle front, the Super Powers will struggle to fully understand what you are up to. They will respond with a defense that is already irrelevant as you have move to the next battle field and target.
In my opinion Origin was doomed to failure before their first flight left the ground. They tried to behave and act like super powers, then align themselves with super powers like Qantas, rather than establishing profitable niche markets and attacking and growing through guerrilla warfare.
It has been said many times that the best defence is a good offence, and interestingly enough I think that this may well answer a comment to my last post.
So how does a company that sits in the small (guerrillas) section move from there to the ultimate goal of being 'big' without passing through the medium size? ...
Firstly, I think that it is important that the market that you are small or ugly in, is not fully matured. If it is you need to create or enter a new market. Secondly you must continue to grow, and by grow I mean primarily organic and then acquired. The most effective way and decisive way to grow big is to seize, maintain and exploit the initiative in a market that is either not fully matured or is a speciality.
A current example in the NZ news at the moment is Pumpkin Patch's result. They started as a small business and have grown to be a big business by NZ standards. They now have branches in Aust, UK and have launched into the US. Their strategy is to continually grow and add stores (similar in principal it seems to Michael Hill). They are continually on the offensive pausing only when entering new countries to get the delivery and marketing right. Once they nail that they rapidly grow again.
So to answer specific questions drawn from the comment …
By being on the offensive causes the competitors to react, by being defensive it causes you to stop growing. If that happens you are destined to be ugly (the never never land) or a guerrilla.
Some interesting lessons in this line of thinking for me and my role over the last couple of days.
The leader must take up a strong position, inspire others to follow him, discover where the enemy is weak and attack there. – The precepts of Ssu Ma Jang Chu – 400BC
In general, the marketplace looks like this;
The Super Powers (Big)
They own the territory, set the rules, and, like the 400kg gorilla, sleep anywhere they want. The big dogs get the biggest pieces of meat. The superpowers are in the production business – they are as concerned with protecting their position on the high ground as they are with gaining new ground.The Secondary Powers (Ugly)
Their job is to get bigger so that they do not get smaller. They often achieve this by knocking off a lot of small companies rather than attacking the major powers. It’s easier to eliminate the weak than to attach the strong.These secondary powers are in a vulnerable middle ground. They are facing attacks from both the big buys and the guerrillas. As an industry moves to maturity, the marketing action polarises to the big at one extreme and the small specialists at the other. The never-never land where you never want to be is a medium-sized company in a mature industry.
The Business Guerrillas (Small)
In third place is everyone with a small market share, specialists in a big market. These firms biggest threat is the 800kg gorilla.
What interests me from this quote of “Sun Tzu – Strategies for Marketing” is the never never land. In New Zealand I think it is fair to say that some markets have either fully matured or are very close. This leaves very little room for The Secondary Powers.
Take the shakedown in retail, there are very few medium sized businesses. They are either stores that are a part of one big group, or small boutiques that specialise. Recruitment world wide is a mature market, huge multi-nationals or smaller specialists. In NZ at present there are a few Secondary Powers, but I am not sure that is a great place to be.
Within transport and logistics, I believe that the Courier Market has neared maturity, Freightways, Express Couriers and the rest. 3PL/warehousing continues to mature and make entry very difficult without being specialists.
Interestingly enough, the Transport industry is only over the last few years starting to show signs of maturing. There are more acquisitions, mergers and off-shore investment. There still remains a significant number of Secondary Powers. The challenge for them in the next few years either become big, or settle for being specialist, staying in the middle ground is never where you want to be!
