CLUBS VIRTUALES

Marc Canter

2005-07-20T15:56:00.000-05:00

Consider Convergence

2005-07-17T12:30:00.000-05:00

Al's article on Divergence appeared in the Financial Times on June 27th. The text is not available online so I thought I would post the entire article. The day will come when the convergence bubble will burst. You would think the recent unbelieveable success of the iPod would encourage people to take a look at divergence. But the craziness continues as they try things like iPod Photo (another recent loser.)
Consider divergence. Financial Times, June 27, 2005.
Convergence is an example of chaos theory in action.
The flap of a butterfly’s wing in the Bahamas could eventually cause a tornado off the coast of Taiwan. Or so the theory goes.
Chaos theory does ring true in the media. One story leads to another and pretty soon you have a full-blown tornado. On September 15, 1992, a butterfly named John Sculley flapped his wings in The New York Times: “John Sculley, chairman of Apple, has been preaching about a post-industrial promised land where four giant industries (computers, consumer electronics, communications and information) will converge.”
“Mr. Sculley describes an emerging industry that he says will be a $3.5 trillion business within a decade. It will, he says, be more than half as large as the combined economies of the United States, Canada and Mexico are today.”
Well, the decade has come and gone and the four giant industries have not converged and the $3.5 trillion business is nowhere in sight and John Sculley is no longer with Apple, but the concept of convergence is alive and well and running rampant around the world. Every major player in the high-tech field has jumped on the convergence bandwagon.
“Put a mark on your calendars, 2005 is the year Sony will fulfill its digital promise by creating a formula that melds electronics, video game entertainment, movies, music and other forms of entertainment, and become more networked and converged than ever before.” Sir Howard Stringer, CEO, Sony.
“At Intel, computing and communications will be indistinguishable. We will be a true convergence company.” Paul Otellini, CEO, Intel.
“The whole new ballgame is these worlds (computing and consumer electronics) converging, and that’s a world we’re comfortable in.” Michael Dell, chairman, Dell.
“The phone and the PC are coming together.” Bill Gates, chairman, Microsoft.
With the world’s largest consumer electronics company, the world’s largest semiconductor company, the world’s largest personal computer company and the world’s largest software company solidly behind the convergence concept, who could doubt that one day it will all happen?
With the philosophical support of a dead poet, I could, that’s who. “The best of prophets of the future,” wrote Lord Byron, “is the past.”
Has convergence ever happened in the past? Not really.
When the airplane was first introduced, many experts predicted that it would converge with the automobile. (The Wright brothers first flew in 1903. The first flying car story appeared in 1906.)
As recently as September 26, 2004, The New York Times Magazine ran a four-page story on flying cars. “The age of the flying car may arrive sooner than you think,” said the publication. (How long do we have to have to wait?)
When television was first introduced, many experts predicted that people would get their newspapers delivered through their TV sets. It never happened.
When the Internet was first introduced, many experts predicted it would converge with television. Interactive TV became the battlecry. In 1997, Microsoft bought WebTV Networks for $425 million and has since poured more than half a billion dollars into the venture. Results have been dismal.
Microsoft’s next convergence attempt was the “media center PC.” Watch television, play music, play video and show pictures, all controlled from the homeowner’s personal computer equipped with Microsoft software. So far, the media center PC is a non-starter.
Microsoft, of course, is a major player in smart phones, the latest and greatest convergence fad. Global shipments in the first quarter of this year were some 10 million units. That may sound like a lot, but keep in mind that worldwide cellphone sales during the same quarter were 180 million. As a percentage of the market, smart phone sales are less than 6 percent.
As a percentage of the media coverage, however, smart phone hype is something like 99 percent. “Everyone seems to agree,” reported the Economist on August 12, 2000, “that the mobile phone will quickly overtake the personal computer as the means by which most people gain access to online services.”
It hasn’t happened yet and it never will. Sure, some people will buy smart phones. Some people will buy anything. But most people prefer divergence devices, not convergence devices.
The convergence crowd likes to point to the camera phone as proof that electronic products will converge. And it’s true that whenever convenience is a major issue, you’ll find some examples of convergence.
Does a camera phone take better pictures than a digital camera? No, but it’s a convenient way to take a picture and then email it to someone.
Currently the hottest consumer electronics product is Apple’s iPod, a classic divergence device. Expected sales this year: 22 million units.
Will a combination smart phone/MP3 player replace the iPod? Don’t be ridiculous. Combination devices invariably end up as niche, not mainstream products
The MP3 player demonstrates the natural course of technology. First there were flash-memory MP3 players like the Diamond Rio. Then hard-drive MP3 players like the iPod.
What started as one category (MP3 player) is now two. (Flash-memory and hard-drive MP3 players.) That’s the way a technology evolves.
Take the videogame player. It didn’t converge with television (although a videogame player without a TV set is useless.) It diverged. And now you have a new category called portable videogame player. (75 million Game Boys have been sold in America alone.) Next up, the dual-screen portable videogame player, the Nintendo DS.
Divergence is a law of nature. In his book The Origin of Species, Charles Darwin credits divergence for the millions of species that populate the earth, like the branches of a tree that diverge from a single trunk.
Darwin’s genius was in recognizing that species like cats and dogs might have a common ancestor, but that they had “branched off” or diverged in response to environmental changes.
What happens in nature happens in technology. The computer might have had a common ancestor (the mainframe), but today we also have midrange computers, network computers, personal computers, laptop computers, tablet computers and handheld computers. The computer didn’t converge with another technology. It diverged in response to consumer demands.
Television might have had a common ancestor (broadcast TV), but today we also have cable TV, satellite TV and pay-per-view TV. Television didn’t converge with another medium. It diverged in response to consumer demands.
The telephone might have had a common ancestor (the wired phone), but today we also have cordless phones, headset phones, cellphones and satellite phones. The telephone didn’t converge with another technology. It diverged in response to consumer demands.
It’s probably a lost cause, but a divergence butterfly like myself keeps flapping his wings and hoping another tornado will develop.

Go Daddy

2005-07-11T11:36:00.000-05:00

GoDaddy.com, the Internet domain registrar that used tasteless humor to promote itself during the Super Bowl, actually has a good idea, a profitable company, a great brand and savvy owner. Too bad the advertising failed to mention any of it.
I was really down on GoDaddy after its Super Bowl performance. While it got people talking about the racy ads, not too many people were discussing the service. I figured it was another start-up blowing its wad with no solid brand behind the madness.
But I was dead wrong. GoDaddy is a great brand that blew a wad of solid profits on a silly Super Bowl ad. All GoDaddy really needed was a PR campaign to get the word out on its brand. They have the story, the sales and the status.
Just look at the excellent article in today’s USA Today which profiles the company and its founder Bob Parsons. While the article gives credit to the advertising for raising the company’s profile, I actually think it is only because of the company’s tremendous overall PR potential that the paper decided to cover the story almost a month after the game. A story the media would have covered without the Super Bowl stunt.
What is interesting about GoDaddy is not the silly advertising but the company itself. And that is why USA Today, many other media outlets and consumers have picked up on company.
With more than 6 million names GoDaddy is a close second to Network Solutions in world-wide domain name management. Wow! A close second, who knew? They are a well-positioned No. 2 brand because they are the exact opposite of Network Solutions. While Network Solutions might be the real thing, they are the older, complex and more expensive registrar. GoDaddy is hip, simple and cheap. The name is strange and has no relevance to the category. But again shocking and unique names work exceeding well on the Internet (Google, Yahoo!, Amazon) and it is the opposite of the stogy Network Solutions name. And GoDaddy avoids being the worst kind of brand name, a generic name like LowCostDomains.com.
I was so taken by the GoDaddy brand today that I even transferred one of my domains to test them out. I was pleasantly surprised at how easy it was and now plan on spreading the word about the company to my friends and colleagues. So if you have a website check out GoDaddy today!

Diet

2005-07-10T21:18:00.000-05:00

The only thing better than succeeding yourself is watching someone you know and respect succeed. And Jorge Cruise is doing just that. Growing up, he was an overweight kid but today Jorge has become a fitness and diet guru. First with Jorge’s 8 Minutes in the Morning book and now with his 3-Hour Diet book, Jorge is on the verge of a mega branding success.
Al and I got to know Jorge because of his interest in our books. He has taken many of our principles and used them in building his own brand. Here are a few strategies that Jorge used. (You might consider using some of them yourself in building your own brand.)
1. If your name is not right for your brand, change it.
Having a simple, easy-to-spell and memorable brand name is the first key to branding success. Jorge’s original last name of Mauier was not simple, easy or memorable. So he changed it to Cruise. His Mom was most likely a little upset, but in the long run I think it has given his brand a tremendous boost. (Some actor dude named Thomas Mapother IV did the same thing a few years ago. And today most people recognize him as Tom Cruise.)
2. Focus your brand on one idea.
The key to Jorge’s fitness program and his book was his focus on 8 minutes. It empowered people to believe that they could accomplish fitness without spending hours everyday at the gym. Most books and experts say the same thing: eat less and exercise more and you’ll lose weight and look great. But the difference between a best-seller and the scrap heap is the ability to focus on one key element of a fitness program and build your brand around that. The key to success is differentiating yourself from the pack by focusing on one key.
3. Publicity builds brands.
Advertising doesn’t build brands, PR does. Jorge is a tireless self-promoter. Which is another necessary key to success. Featured on Oprah, CNN, Good Morning America, USA Today, and The New York Times among other places creates credibility and fuels word of mouth about your brand.
Last Sunday, The New York Times did a cover story on Jorge and his diet book best-seller in the Sunday Styles section. This is a indication of Jorge being on the verge of mega success.
4. Be patient. Building a brand takes time.
Brands that become too hot too fast usually die quickly. They are fads and not powerful long lasting brands. Think malt-alternative beverages like Zima and Smirnoff Ice, most definately fads and not brands. It takes time to build a brand with word of mouth and PR. But this slow build-up is the key to success because brands that are built with a strong foundation of credibility can usually stand the test of time. Jorge has been working very hard for many years building his brand.
5. When the time is right, use massive advertising.
Now is the time to promote the heck out of Jorge. And that is just what his publisher plans to do with his new book The 3-Hour Diet. Because he has the brand, the credibility and the word of mouth already going, now is the time to light the fire. With huge in-store displays at Barnes & Noble, a massive PR tour and advertising, Jorge’s book entered The New York Times best-seller list at No. 3 among How-to books.
6. Don’t overlook the power of timing.
No brand, book or idea can really succeed without the help of good timing and a little luck. Good timing means that the public is ready for your idea, the press is willing to cover your idea and no one else is promoting a similar idea. All of these things are working in Jorge’s favor. People are tired of the South Beach diet, it is yesterday’s news. The press is looking for the next big diet craze. And no other competitors have come on the scene is a while.
Jorge’s website:
http://www.jorgecruise.com/home/index.php
Buy The 3-Hour Diet at Amazon:
http://www.amazon.com/exec/obidos/tg/detail/-/0060792299/ref=ase_satisfactiong-20/002-0536715-4736855?v=glance&s=books
Sunday’s New York Times profile on Jorge:
http://www.nytimes.com/2005/04/17/fashion/sundaystyles/17diet.html?

Wendys

2005-07-10T20:29:00.000-05:00

Poor Wendy’s. One crazy woman wrongly accuses the fast-food chain of an unthinkable crime (serving Chili containing a severed finger) and boom the brand has been dealt a major PR and marketing blow.
It is the nature of our world today that information travels faster than the speed of light, even if that information is false. And before you get the chance to set the record straight the brand damage has been done and Leno and Letterman have skewered your reputation.
How can you prevent this from happening? Well the truth is you cannot prevent crazy people from saying crazy things. And you certainly cannot stop the media, the comics or the bloggers from talking about it and propagating it. But like Valtrex and herpes, there are ways of making the outbreaks less severe.
The worst thing about the Wendy’s situation is that if one thing been different I think the whole mess could have been handled quickly and effectively.
What is that one thing? If Dave Thomas were still alive.
Dave Thomas was one of the best CEOs, PR spokespersons and advertising pitch people all rolled up into one. He was honest, sincere, straightforward, likeable, smart and well spoken.
Had Dave been around, I imagine he would have hit the TV talk shows immediately and inoculated the brand against the PR destruction that one woman attempted to cause.
The public finds it easy to hate big corporate giants. Photos of severed fingers can quickly fuel anger and dampen chili sales. But the public believes in people. And Dave is the type of guy people like to cheer for. I think Dave could have quickly convinced the public that he would personally get to the bottom of the problem. And help ease the panic and fears caused by the story.
But instead of hearing from Dave, we saw Wendy’s conducting an employee finger check at the restaurant where the chili was sold. Overall the team at Wendy’s did a mostly acceptable job of handling the disaster. Unfortunately what they really needed most was Dave and unfortunately he is no longer around.
Wendy’s has been unable to replace the irreplaceable Dave Thomas. While it is risky to place too much of the brand in one persons hands it is also dangerous not having a well known personality to represent the brand especially when trouble occurs.
Without a high profile leader, brands can end up like big ships in the water with no captain at the wheel being thrown off course by rogue waves.
In the wake of this PR disaster, I believe Dave Thomas would have been able to set the Wendy’s ship right back on course with his charming smile and reassuring words. Something that even the best written press release could never do.