Archive for category entrepreneurship
Startups from the Goalie’s Perspective
Posted by Jeff in entrepreneurship, minnesota on October 8th, 2009
I was standing in the net, and it suddenly occurred to me: my team was much better than I thought they were. That was a complete change in conclusion from just a few minutes prior. I couldn’t help but notice the similarities to a startup. How good is your startup’s team, really? How good is the competition’s team?
It was just over halfway through a game of pick-up hockey at the Breck Ice Arena in suburban Golden Valley, Minnesota. Since I was playing goalie, I had just swapped nets with the other goaltender. In pick-up hockey the teams are assigned randomly by splitting a jumbled mess of sticks prior to the game. The goalies switch sides halfway through the game to lessen the goaltending bias.
As the goalie, I got to see both teams play, and I was able to count each group as my teammates. At the beginning of the game, I thought that my first team (”lights”) was dominating the other team (”darks”). The puck was on the other end of the ice for what seemed like most of the time, and the shots I did face were easily manageable. The only goal I allowed in the first 45 minutes was on a rebound after I made a save on a breakaway. In contrast, the other goalie was being lit up with shots and goals. With the time to switch sides drawing near, I was a little disappointed by the prospect of leaving the dominating team and joining the dominated group.
I was wrong. Oh, how I was wrong.
I switched sides and… nothing. I just stood there. Even fewer shots came my way, and when the puck did manage to make it into my defensive zone, it was gone again within seconds. The makeup of the teams, other than the goalies, had not changed, but my perception had. I realized that those I had believed to be the dominated were in fact the dominators.
How could that have happened? For one thing, during the second half, I had an accurate external reference (a clock) to inform my perception of the game. As a goalie, I tend not to notice the passage of time while the puck is in my zone, but when it’s on the other end of the ice, time slows to a crawl. For another, I had misjudged the talent of the individual players. I had believed that the players on my first team were better than they really were simply because they were on my team; ipso facto, they had to be the best players on the ice.
So it goes with startups.
A startup is like a sports team. You’re playing against other startups. Even though all of the players might be acquaintances, some are known better than others, and some have reputations that have become larger than life. The upshot is that it can be difficult to judge the skill possessed by the other company without experiencing it firsthand from the inside. Are the engineers superstars or mere mortals? Does management have it together? How good is their plan? Was their highly publicized misstep actually inconsequential? Likewise, it can be nearly impossible to accurately assess the states of the competition’s products. Are they launching tomorrow? Are they having trouble gettng started? Have they run into major problems? Are they pimping vapor? You just don’t know.
Competitive intelligence can be useful, such as that obtained by interviewing mutual industry contacts (this is done in the medical device field quite often). Investors, too, are well connected. Job postings can tell you a lot. Social encounters might also be informative. So can the lack of them — are all of the competitor’s employees working late instead of partying?
Ultimately, the best you can manage is a guess. But when you guess, don’t underestimate the other team or overestimate your own.
The Geek Squad: Brilliant Marketing
Posted by Jeff in entrepreneurship on September 24th, 2009
Robert Stephens was brilliant at marketing, and that made him an incredibly successful entrepreneur.
In the autumn of 1998, Stephens came to my high school to speak to my entrepreneurship class (a course which I forgot to mention in my previous post). He came in uniform: black slacks, white short-sleeve dress shirt, black tie, and cast-metal badge. He looked every part the geek, which was appropriate, since he was the founder and owner of the Geek Squad.
Prior to the sale of the company to Best Buy in 2002, the Geek Squad was an independent IT consulting and on-site repair service operating in the Minneapolis area. The Geek Squad agents — the computer techs — were known for technical prowess, attention to detail, and customer service. Of course, there were but a few dozen agents in the company, and the Geek Squad was but one of many firms in the area providing computer services, so skills alone might not have been enough.
What set the Geek Squad apart? Competence and marketing.
Competence #1: Hiring — Stephens hired only people without certifications (e.g., MCSE or A+) to be techs. His logic was along the lines that the most competent people would be passionate enough to be self-taught, and those people wouldn’t bother with certifications. They got the job done quickly and correctly.
Competence #2: Reputation — Robert was a frequent guest on local TV news shows, where he discussed technical issues making headlines around the country, such as the latest computer virus or web breakthrough. And the caption below his face? Always mentioned his company. Off camera, the Geek Squad was known as the go-to group for emergency computer service. When national music acts were in town and were having trouble with their computers, the promoters referred them to the Geek Squad.
Promotion #1: The Cars — The old Geek Squad used restored cars from the 1940s and 1950s, painted black and white to resemble the police cars of the era. The old squad cars were quite a sight, but to make sure people were actually looking at the cars, Stephens had the tire pressures set artificially low and told his agents to take corners extra fast, thus ensuring large amounts of attention-getting tire squealing.
Of course, 50-year-old cars with squealing tires don’t scale well, but Robert wanted the replacement cars to continue to have some cachet. The solution? Black-and-white VW “new” Beatles. Also, modern cars (and particularly electronic fuel injection) are much more user-friendly in the harsh Minnesota winter.
Promotion #2: The Business Cards — Most business cards receive a quick glance before being tossed or forgotten. To ensure a longer life for the Geek Squad cards, Robert had them die-cut into ovals, making the card look like a perfect physical copy of the logo. On the reverse side, he included a number of helpful computer-use tips of the type that would encourage people to keep the cards near their computers. Then, when trouble would strike, the tip-laden card — and the company’s phone number — would be close at hand.
Promotion #3: The Name — Let’s face it, “Geek Squad” is both catchy and descriptive. Who knows computers? Geeks. What group do you call when there’s a problem? A squad. Brilliant. An added bonus of being memorable and descriptive is that it was often easier to remember the Geek Squad’s name than that of competitors. Apparently, on more than one occasion, a person called 411 looking for computer help with only a vague sense of the name of a competitor — say, the Repair Nerds. “Geek Squad” was such a powerful brand that the caller latched onto it instead of the original target company.
Promotion #4: The Uniform — Stereotypes can be used to one’s advantage, as shown by the Geek Squad uniform. I don’t recall Robert wearing taped black plastic glasses, but everything else was there, straight out of the 1950s: black slacks, white short-sleeve dress shirt, and narrow black tie. On top of that, since they were agents in a squad, they carried genuine-looking cast-metal badges. Stephens even went through the trouble of getting the badges made by a company that makes real law-enforcement badges. Details matter.
Was the service offered by the Geek Squad vastly superior to that of competitors? Probably not. It was very good, but equal service was available elsewhere. What set the Geek Squad apart from its competition was its brand: catchy, consistent, fun, and extremely well-executed.
In fact, one might argue that the service in the current Best Buy-operated incarnation is downright mediocre, but the brand is so strong that it has survived even a massive setback in quality. Impressive.