Can I have both vision and execution, please?

Paul Cezanne - Apples and Oranges

People are either 1) vision or 2) execution thinkers. Visionists talk on a high level and focus on values and mission. Executionists think in concrete terms and focus on feasibility and strategy. Visionists and executionists have tough time understanding each other.

You see this divide everywhere.

Case 1: Political discussion. There was a recent heated discussion in Finland regarding multiculturalism. A member of parliament blurted he wants to fight multiculturalism. The blurt caused a stir. And rightly so as he is known to have connections with neo nazis. In response, many people accused him of racism and raised the theme of dignity and equality. Which, of course, got angry response from yet other people who felt that you can’t say anything about the problems of multiculturalism without being accused of racism. And so on, you know the drill.

On one hand we have people talking about respecting and accepting other people. These guys are the visionists. On the other hand we have people talking about preventing etnic riots in suburbs and carving rules for religious signs in schools. These guys are the executionists. The problem is not that they disagree (most of them probably don’t!). The problem is they think in different levels.

Vision without execution is just daydreaming

Case 2: Product strategy. Every entrepreneur is familiar with the mismatch between company vision and product reality. In your team/board there are always both visionists and executionists. There are people who like to brainstorm, throw ideas, think outside the box and dicuss interesting business development opportunities. And there are the people who want to launch the MVP as soon as possible, who are thinking ways to organize the sales team, who want to focus on feasibility of the plans.

For example at Kadermanager, a visionist told me we need to bridge the gaps between sports teams, clubs and federations: “It’s crucial to have a holistic vision of the recreational sports field.” An executionist told me we must focus on the billing model for our budding mobile app and choose which app store to use for a beta: “You must be mobile-first, and you should generate revenue from day 1.”

Don’t forget to bring your popcorns if you put these two in the same room and let the dispute begin.

Action without vision is a nightmare

How about Case 3: Raising children? Visionist parent discusses healthy lifestyle, fair-play values and varied physical exercise. Executionist parent knows their child loves basketball, looks for relevant info and goes on choosing between Tue or Thu evening for the childrens’ basketball school for the autumn, provided by the local sports club at the near-by field that has a safe access from the house.

Both visionists and executionists are needed. The curious thing is that if you’re good in formulating the questions, you’ll find that both kinds of people agree for the most of the time. In the end it’s only emphasis that differs, not overall values or guidelines. But thinking in different levels is bound to create misunderstanding.

Checklist: Should I Stick or Quit?

Should you keep on doing the same or quit and start something else? I read a good answer on Quora to “Should I stick, pivot or quit?”. @jeremysliew writes:

The most valuable resource for an entrepreneur is their time, and if they are wasting it on a quixotic startup, they will never get that time back. But when you’re winning, when you’re REALLY winning, it feels easy. If it feels hard all the time, then you are probably doing something wrong. And when you’re doing something wrong all the time, then you should probably stop.

That’s worth a thought.

As I’ve been on both sides of the table in the past, I’ve engineered my own checklist:

  1. Is this fun? Hard fun and serious fun are both among the valid types of fun. If I’m accomplishing meaningful things with a good team, it’s fun.
  2. Am I learning new stuff?
  3. Does this pay for living? Am I able to support my family? Security is not a fashionable startup concept, but I think security has value when you are responsible for other people.
  4. Is this helping me to fulfil my dreams? Do I have a chance to become financially independent?
  5. Is this the most interesting thing for me to do? If the only chance to do something else, something important is right now, then I’d need to consider the opportunity cost.

Answer “YES” to all five, and the decision is easy. Same goes with 5 × “NO”. In between is where it’s difficult. I’ve seen talented people get stuck to a business that pays for a (good) living. If you are really good at what you do, it’s easy to become a well-paid consultant. But is that enough for a life? Should they quit their comfortable, established business and laboriously start something new? Hint: the above checklist helps to find the right answer.

Trying to Learn French in Brussels

I want to learn French language. I thought it would be perfect to attend a course in Brussels, Belgium. Brussels is a French-speaking international city. Lots of active expats move in Brussels every year. The demand for language courses must be huge.

However, it’s crazy difficult to study French in Brussels. I’ve heard rumors of people successfully enrolling to a class, but I didn’t succeed. Here’s what I tried, and why I think there is an opportunity for a new player.

  1. Find the schools providing French classes. All it takes is some googling, and you’ll quickly have a list of schools. The thing is that none of the existing schrools does very good work on SEO or online ads. Maybe their primary messaging channel is something else than the Internet? This makes it feasible for a newcomer to enter the market.
  2. Figure out if a particular course is worth a second look. Does a school target illiterate refugees, exchange students, exapats or someone else? This is difficult, if not impossible to say. Either the schools don’t have a target group or they communicate it badly. The schools spell out requirements, organizations providing their funding, etc. They use terminology that carries no meaning to someone coming outside of Belgium. “A commune? What’s that, I thought I’m living in Brussels.” The lesson: customers should be spared from learning the school’s internal administrative terminology.
  3. Figure out if a class is right for me? It is totally amazing but most schools put no effort in describing their product. What does “French as a foreign language, A1” mean? What does A1 stand for? Is that the Je m’appel Jussi. Une, deux, troi -level of conversation? Should I instead take A2 or even A3? It’s like Zappos would sell a pair of shoes without revealing the size.
  4. Figure out your level of proficiency. The schools seem to have found that people can’t say anything about their current skill level. So we need language level tests! Each school organizes exams – that are mandatory for enrolling. Now you’ll have to figure out:
    1. Which exam to take? Are there different exams for total beginners and advanced classes (sometimes: yes).
    2. When is the exam? Don’t go at a wrong time or they won’t have the applicable lists – yes, paper lists of students – available.
    3. Do you need to sign up to take the exam or just show up? (varies by the school)
  5. Enroll! Leave early from work to take the exam and enroll for the school. Don’t forget to bring your ID card, otherwise you’re out. Don’t forget to bring cash, otherwise you’re out. Well, to be fair, a local Belgian credit card works at some schools.

Step 6? I don’t know if there’s a sixth step. Never got that far.

I signed up to take an exam, left early from work, found my way through the rush hour traffic, queued at the door with other aspiring learners. All this to find out that my class had been fully booked the day before. No waiting lists, no alternative classes. “Sorry about that and better luck next time.”

I had signed up to take the exam. I had to fill in my contact details. How about letting me know the class is full before I waste my time coming to the school?

Classes are full, options are limited. There’s a huge demand for language courses. The incumbents don’t know how to do marketing, sales and customer service in the digital age. A perfect opportunity for a newcomer.

 

P.S. Here’s my list of schools for reference:

  • EPFC. Levels EU 01-06. Classes in the morning, afternoon and evening.
  • CPAB. Levels UF1-UF8. Morning and evening. Small groups (8-16 students).
  • IFC. Levels UF1-UF7. Evenings only. Cheapest: 95,80 €
  • CLL. Levels A1 to C2. Once per week, 10 weeks.
  • CVO at VUB. Levels A2 to H2. Morning, afternoon and evening classes.

EU VAT Changes in 2015: Registration Thresholds

Illustration by Tuomas Ikonen

Are you selling software or a service as a software to European consumers? If yes, the new taxation rules apply to you. From 2015, you need to know your buyers’ country of residence, use that country’s VAT rate and report your sales to that country’s taxation authority.

GigaOm writes:

The problem here is that there are 28 EU member states, each of which has its own value-added tax (VAT) rates, and its own minimum thresholds for having to charge VAT in the first place. For many digital services businesses, this will add a degree of complexity.

Yes, this definitely adds a degree of complexity.

I called the local tax authority about the minimum thresholds and how to apply those in different countries. The representative answered me that “It’s complicated”:

It is really burdensome for us to find out local rules, thresholds and tax rates. My interpretation is that if your business does not go above the target country’s revenue threshold, you can sell tax free to that country.

If you’re a small business from the target country’s perspective, you’ll actually pay less taxes than before 2015. Previously, as a Finnish company, you had to pay VAT to Finland even when selling to a French consumer. Now, if your sales to France stays below the threshold, 34.900 EUR, you don’t need to pay VAT at all. The tax man referred to the official Finnish guidelines and put it like this:

When selling to France, use the rules, rates and thresholds of France.

It was not trivial to find the latest official rates and thresholds on the EU taxation portal so I’ll share the numbers here.

VAT rates and thresholds for VAT exemption in EU member states

Btw: if you are selling through Appstore or Google Play, then you don’t need to do any new tricks. An expalantion by Google: https://support.google.com/googleplay/android-developer/answer/138000?hl=en

Summary in FI: 1.1.2015 alkaen kuluttajille myydyn softan ALV:na pitää käyttää kuluttajan asuinmaan ALV-kantaa ja raportoida myynnit verottajan erityisjärjestelmällä. Verottaja vastasi kysymykseeni, että vähäinen toiminta eri EU-maissa lasketaan maakohtaisesti. Eli vaikka Suomessa toiminta on arvonlisäverovelvollista, Ranskassa ei ole jos myynti pysyy alle Ranskan rajan.

Olennainen kohta verottajan ohjeessa on:

Yrityksellä voi olla velvollisuus suorittaa veroa toiseen EU-maahan, vaikka toiminta olisi vähäistä. Yrityksen täytyy selvittää verovelvollisuuden edellytykset kulutusjäsenvaltiosta, eli siitä valtiosta, johon ostaja on sijoittautunut.

Eli kääntäen: yrityksellä ei ole velvollisuutta suorittaa veroa toiseen EU-maahan, jos toiminta on vähäistä, ko. maan säännösten mukaan.

Book review: Wool

I was looking for intelligent and intHugh Howey: Wooleresting fiction to read during the christmas holidays. As a surprise to myself, I ended up reading science fiction. I came by Wool by Hugh Howey first on some “The most popular books” list and when checking the book’s reviews on Amazon, I noticed it was included on their Top-100 Editor’s pick for 2014.

Wikipedia summarizes the plot very briefly:

The story of Wool takes place on a post-apocalyptic Earth. Humanity clings to survival in the Silo, a subterranean city extending over one hundred and fifty stories beneath the surface.

The setting is interesting although typical after-nuclear-war-dystopia.  The really interesting part however is that the Silo society has strict authoritarian rules. There are rules concerning family planning and death penalty for rebellion. There’s no freedom of press – or actually – very limited ways to mass-communicate.

What makes it interesting is that the author explains the why for these rules. The set of rules sound credible and natural, inevitable and reasonable. I could think of real countries following the same pattern and similar justifications.

When the protagonist begins to question these rules, the reader is left wondering if that’s right or wrong. How well would the Silo function without their strict rules? Can you trust people to do the right thing if there’s no enforcing police force? Would you be willing to trade safety for freedom?

Unfortunately Hugh Howey doesn’t explore the topic much further but goes on with some action scenes and ends up polarizing the “good” and “bad”. What starts as an intriguing analysis of society, becomes a simplistic adventure. Therefore this book is not a classic but “only” a fun read.

 

Selling Ads: Viewability Metrics

Much of the consumer internet is “free” to use, that is, it’s based on selling advertisement inventory to advertisers. In most cases, advertisers pay for clicks (Cost-per-click, CPC) or impressions (Cost-per-mille i.e. cost per thousand ad impressions, CPM).

Now there’s a rising star: Cost per viewable impression, CPMv.

Why is this important? Because it drives quality and fairness.

The good old CPM measures when a banner is loaded on a web page. Therefore the advertiser pays only when someone actually can see the ad. This is pretty cool and much better than paying e.g. for an ad in a newspaper and not knowing if anyone ever reads the page your ad is on. The downside is that the banner can be so low down the webpage that it’s rarely seen by a reader. You see, some publishers (yes, big media houses) are filling their webpages with ads because they get paid for each ad impression. They don’t really care about quality, but only quantity. Some publishers break down their articles to multiple pages to generate more ad impressions for each article. And so on.

Depending on the source, it looks like half of the banner ads are not seen by anybody.  Half! That’s the average of course. Most websites are worse than that. Premium publishers are better.

The ability to measure viewability creates an interesting opportunity. We can put our viewability metrics side by side with other publishers and show that it’s better to advertise with us. While being more fair to advertisers, this benefits quality publishers as well. May I say “Win-Win”?

Take The Economist for example. They are a premium publisher and haven’t been holding back with viewability. The Economist sells “ViewGuarantee“:

Q1. WHAT IS VIEWGUARANTEE, THE AD GUARANTEE?

For eligible campaigns, at least 75% of impressions served across the entire campaign will meet IAB ad standards (for most campaigns it will be higher). This is much higher than industry average. According to Moat analytics, Q2 2014 benchmarks for all publishers measured had 47.6% ad online and 44.2% on mobile.

I’ve been very happy to work with advertisers asking about viewability. Investing in quality pays off.

 

 

Pitching a Product

Introducing the big idea should take just one minute. Don’t spend time on details.

In Crossing the Chasm, Geoffrey Moore formulated a useful, short pattern for idea introduction.

For (target audience) who (statement of the opportunity), my idea is a (product category) that provides (statement of key benefit). Unlike (competitors), my idea (statement of primary differentiation).

The point is to give a high level introduction to the idea and position the idea in the markets. Yes, this is a positioning statement, too.

Introducing an idea

But how to make that sound interesting? “Our product is …” is often the most boring way to introduce anything.

This is how I would use Moore’s pattern:

For recreational sports team coaches who struggle with team management, PlayerLineup is a team calendar and website that makes sports team management easy and saves time. Unlike a generic Facebook or Whatsapp group, PlayerLineup provides attendance tracking, statistics and proper player roles.

That actually works quite ok in writing. In a cocktail event not so good. Amy Hoy put it well in her post Shut up and take my money. She writes that instead of answering “Our product is…”, one should answer with something that focuses on the person who’s asking. Let’s talk about the problem the customer has:

You didn’t want to spend your nights calling after players and answering angry parents about why their child is not getting the most minutes in all games. When you agreed to coach the local youth sports team, you thought you’d focus on education, coaching, strategy, and the game. You wanted to help the community and have fun coaching a group of kids.

PlayerLineup gives you that. We save your time and make team management a breeze.

I think I’ll use the first version when writing and the second version when talking casually..

Positioning by Marketing

Positioning - The battle for your mind by Al Ries, Jack TroutI read a 1981 marketing classic by Ries and Trout: “Positioning – The Battle for Your Mind.” It’s an inspiring book about how brands and products should be marketed: not in isolation but positioned against existing products and brands in the same category.

Hmmm… doesn’t sound too inspiring, does it? Let me try a shorter version: It’s not about the product, fool.

Instead of telling what’s good in your product you should tell how the product relates to other products that already have a place in the recipients’ mind. To me as the product designer this is difficult! I’ve put a lot of effort in designing the features and figuring out what the user benefits are. To me the product is the interesting piece. I’m naturally inclined to tell what features we have and why they benefit the user. For example:

At Playerlineup we have a feature for urgent notifications. The feature enables teams to communicate last minute changes in schedule. Any coach knows how much time is saved when you don’t need to do the emailing or phone trees.

The Playerlineup product is excellent and the feature is really useful. According to Ries & Trout, however, the problem is that this kind of marketing message does not stand a chance. The messaging / notifications category is so overwhelmingly overcrowded that there is no room for a newcomer. People send messages on Facebook and quick group notifications on WhatsApp.

We need to think about our position. We need to talk about how Playerlineup brings messaging and schedule together in a new, meaningful fashion, and how we are able to automate routines because we strictly focus on sports. We are a new category, not an also-ran social media site.

The definition of positioning, by Al Ries:

Positioning is not what you do to the product; it’s what you do to the mind of the prospect. It’s how you differentiate your brand in the mind. Positioning compensates for our overcommunicated society by using an oversimplified message to cut through the clutter and get into the mind. Positioning focuses on the perceptions of the prospect not on the reality of the brand.

It makes sense. If everyone thinks the best resource for travel info is TripAdvisor, then it’s no use trying to convince people that your travel website is the best because of some features. It’s much better to tell people how your product relates to the market leader.

For example, back in the day a “soft drink” meant a cola, so 7-Up positioned themselves as the “un-cola”.

Here’s Trout’s six-item checklist Brand Positioning: Key Questions.

 

Is This News or Ads?

I’ve always thought that I know pretty well how to navigate media. That I can immediately tell if a piece of content is an advertisement. After all, understanding the difference between ads and journalism is a crucial part of media literacy, right?

Then I read Wired’s story “How BuzzFeed mastered social sharing to become a media giant for a new era“.

BuzzFeed is a quickly growing media company that started in 2006 with a focus on viral content (pictures of cute cats, LOL). Since then they’ve gathered a funding of $46m, grown to a media giant and plan to take on serious journalism or so-called hard news.

We will stay away from anything that requires adopting a legacy business model… We are building the defining news and entertainment company for the social, mobile age.

BuzzFeed’s business model is advertising. Here’s the catch: on BuzzFeed I no longer know if I’m looking at an ad or not. That’s by design. The Guardian reports:

That advertorial – advertising content that looks like editorial – is actually the source of BuzzFeed’s financial progress, according to Peretti.

One of the following is a paid-for advertisment that had a very good 6,1% click-through rate:

At a glance, I’d say they look pretty similar.

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Conclusion: native advertisement or advertorials are going to replace banner ads.

Customer Centricity is Rare

Customer centricity vs product centricityTrue customer centricity is still rare. This is news to me because these days you’re supposed to be customer centric. I hear many entrepreneurs describe their business as customer centric. Their product is customizable and totally flexible; they know their would-be customers thoroughly; their product utilizes big data to adapt to users’ needs; and so on…

More often than not they are product centric. Examples:

  • I like to surf and ride a motorcycle (not at the same time). I can attach my GoPro to a surf board or my helmet. But GoPro is not customer centric, it’s a superior product.
  • My broadband went dead after a power failure. I called my provider and they quickly decided to send me a new ADSL box. No hassle, happy customer. But this is not customer centricity, it’s operational excellence.

Both cases are good customer service, but it’s the same for every customer. Customer centricity requires a step further. You need to know your customer, the lifetime value of each customer, when and what to offer to the customer to add the most value, etc. If you’re customer centric, you don’t offer the same product/service for any two customers. Instead you proactively tailor your offering to cater individual customer’s needs.

The most well-known examples of customer centricity come from retail. See How Target Figured Out A Teen Girl Was Pregnant Before Her Father Did:

… Which means that the key is to reach them earlier, before any other retailers know a baby is on the way. Specifically, the marketers said they wanted to send specially designed ads to women in their second trimester, which is…

Another case is how Tesco manages to maintain high growth and ward off competitors like Walmart. In a story by Businessweek:

Tesco’s big advantage over major international rivals, which also include Germany’s Aldi and Lidl, is its unrivaled ability to manage vast reams of data and translate that knowledge into sales. While data crunching may sound dull, it has given Tesco two major advantages: an unmatched ability to operate multiple retail formats—ranging in size from convenience stores to hypermarkets—and the market knowledge to offer what many analysts say is the best and broadest range of house brands from any retailer.

Now that’s customer centricity.

Why would you want to be customer centric?

Because the world has changed. The power has shifted from producers to customers. Consider:

  1. Product development is much faster. Earlier it took a lot of effort to create a new product. Now technology enables anyone the create a product even if the scale would be very small. Think Kickstarter.
  2. Information flows much faster. It used to be impossible or very expensive to reach a big audience. Now anyone can publish a video, article, or create a social media campaign.
  3. Global delivery knows no borders. You just couldn’t order goods from other countries. Now anyone can go to Amazon or Alibaba.com and order anything, delivered anywhere.

There used to be a barrier of entry. Even if someone could develop a similar product, there was no way they could market it to your customers. And even if they found a way to market the similar product, there was no way they could get it delivered. Not so anymore.

Nowadays customer centricity is the way to maintain your competitive advantage.