I am playing with this ‘freemium’ business model idea for a long time. I still cannot find a way to implement it in my environment. However, I think it’s a valid idea that waits for me to use it one day.
The trick is you have to do it without making customers feel like it’s a scam.
Mailchimp (and many others) does it very well. They started offering a freemium plan to small business owners back in 2007. As long as your mailing list has under 500 email addresses, you can use Mailchimp service forever free.
Mailchimp’s freemium success is not only that its service is free. If you look deeper, it’s because Mailchimp is helping your business grows. When your business gains more subscriptions i.e. more email addresses, it indicates that you are growing. By that point, you just start paying for its service.
It’s the customer’s success that drives Mailchimp’s success. The freemium is just a mean they use.
While I read an article about something this morning, I had a lot of questions popping up in my head. I then realised it has been my habit that I really like asking questions. Most of the time, I ask questions about things to myself. And, many times, I ask questions to my team, my colleagues and my superiors. It could frustrate them.
And, 90% of the time, I only ask the ‘why’ questions.
It reminds me a story I came across long time ago about one great leader in Asia who was very successful in his business. I cannot remember his name and his business now. He managed a large company with lots of factories. His management style is that it was his routine to visit his factories every week. When his team encountered problems and brought to his attention, he’d never offered solutions. He only asked a series of the why questions. It turned out helping his team to think about the answers which in turn helping them to find solutions themselves.
It’s a simple practice. You can start today by asking yourself “why do this thing have to happen this way?”. “Why can’t we do this?”. It will change how you see things and how you operate.
There are a lot of questions if Airbnb could survive after the coronavirus crisis. It’s hard to believe that Airbnb was at its peak before the pandemic, planning to go public this year. Everything just went upside down. There are even talks that people wouldn’t feel comfortable to stay at someone’s place anymore. All the sudden, staying at resorts and hotels become a top of mind for customers.
Is this the end of Airbnb?
I hope not. I really Airbnb’s business model. It helps hosts to generate extra income to support their family. It offers good solutions to travellers and holiday takers. It’s hard to find a good business model that could do both at the same time. However, it comes with a major challenge. In a good day, there is not issue to make both sides happy. But, in a bad day, you sometime have to choose to please one side more than another. Airbnb chose to protect guests at a cost of the hosts.
Another strength of Airbnb’s offer is it is more economical for families to use Airbnb than hotels. It would be hard to plan a holiday for a family of 6 in a hotel without paying for multiple rooms. True that some hotel chains have 2 or 3 bedroom apartments. However, the nightly rates for those apartment is generally higher than renting the whole house with Airbnb.
Airbnb still has advantages to use to come back. I believe we will se a new, different, and successful Airbnb in about 2 years time.
I wrote in my previous post last week about an approach to market a product with minimum marketing effort. I am still in a search of this journey – how to do marketing without doing marketing. Is it even possible?
The answer lies in how you define the scope and the term of marketing. The prerequisite condition is of course you need to have a great product. By ‘great’, I mean there must be someones who wants your product. The size of the group of those someones must be big enough to make the business financially viable.
Then, you must tell people about your product. That’s when the marketing function kicks in. This is a pivot point whether you need a large marketing effort or budget or not. Take Stripe as an example. They created a great product by offering a payment processor that is better even than Paypal. Stripe initially targeted a small group of users who loved the solution. Who would think a payment processor behind ecommerce websites could be a topic that went viral on social media. That’s a power of great product and words of mouth.
What happened with Stripe gives us a simple formula on how to market a product with minimum marketing efforts. The starting point for us, marketers, is to take a pause and think why customers want to buy our product. Who are those customers? How can we make their lives better?
To be successful at selling something online, it’s all about building relationship with people, who will hopefully turn into your customers. And, the best way to do that is through an effective content marketing.
There are 4 essential components of a good content marketing strategy.
- Pillar pieces: these are long-form articles highlighting your company’s expertise. They have about 3,000+ words. These articles serve as a foundation of your content strategy.
- Thought leadership: this type of content is for company’s leaders (could be you!) to share their thoughts about the industry a company is in. Why does your company exist?
- Company’s blog: this is a place where you put shorter articles diving deeper into the topics in your pillar pieces and/or your thought leader pieces. Consistency is a key here. The goal is you want to offer valuable content (educational and entertaining) to your audience.
- Social media strategy: social media is a communication platform. The key here is to invest in the channels that work best for you. You don’t have to be visible to all social media sites. It’s just not possible to be great at all of them.
Hertz is unfortunately another well known brand that decided to file for a bankruptcy protection. From what is reported, the high-level issues are its high debt ratio situation and the impact from the Covid-19 pandemic that suddenly dries up revenue.
The interesting aspect of this story is how Hertz’s competitors doing. If they are likely to survive, what make them different from Hertz.
When look at the 2 main Hertz’s competitors. Avis Budget Group has lower debt and could raise $500 million through its bond sale this month. It’s reported that Avis acted very quickly to reduce its operational cost so put their financial in shape. Enterprise, another competitor, has diversified its business well. It doesn’t only rely on the car rental revenue from airports, which is a major source of income for Hertz and Avis.
It’s unfortunate. I like Hertz because their service is very good. Hopefully, after the company goes through a restructure, we will see Hertz coming out the other end stronger.
I have a challenge for you. It’s more fun for those who work in a corporate world i.e. you report to someone who report to another someone. You would receive orders from your higher ups on a daily basis. You need to do this and that for them. And, in many cases, those orders come at the same time with very short deadlines. How can we be productive under this situation?
There are some recommendations which I’d like to share with you. Whether they are realistic or not, we will see.
- Focus on your strengths. Peter Drucker said, “You can’t build on weakness.” You should focus on your strengths. If you are very good at data analysis using super complex excel formula, you might struggle with presenting your work. Instead of spending time to improve your PowerPoint skill, you should focus on build up your analytical skill and ask someone with great PowerPoint skill to help you. I think this is manageable.
- Be strategic about urgent requests. The thirty-fourth president of the United States, Dwight Eisenhower said “What is important is seldom urgent and what is urgent is seldom important.” So, the recommendation is to say ‘yes’ to the important tasks that advance your goals. And, you should say ‘no’ or ‘not right now’ to everything else. Is this realistic? It is, but it also is to do.
- Understand your work style. Not everyone gets to the end results the same way. Some people like to involve lots of others in meetings to make decisions. Some, myself included, like to process information quietly before reaching out a broader group of people. Both approaches are fine. Don’t feel bad about who you are. And, don’t compare. The worst thing in the world that kill your productivity is comparing yourself with others. Just stop it.
The final words is self-knowledge (and a little diplomacy) are important traits for entrepreneurs and executives. We have to be diplomatic and political in the way we deliver the ‘no’ message.
I am still in a journey of upgrading my skill on strategy development. I found an interesting aspect of how to build a solid foundation for good strategy. Noticing anomalies is one way to trigger questions of why things don’t happen in certain ways. Ideas start to popup in your head. It’s very common that many of us would jump into a quick conclusion that the first idea that comes to mind is the right one.
It’s not always the case. And this is when a good strategy tool could help you. In strategy work, knowledge is necessary but not sufficient. You must be able to guide your own thinking.
You must cultivate the following 3 essential skills:
- You need to find ways to fight your own myopia and to guide your own attention.
- You must be able to question your own judgement. When you quickly decide that the first idea is great and you are excited about it, before moving forward, wait for a day or two and ask yourself again if your assumptions are right.
- You must develop the habit of recording your judgement so you could learn from it.
As you can see, the above is more of how to deal or manage your mindset. We must be able to question our judgement. It’s one of the most critical skill to develop a good strategy.
What does a good strategy look like? How does it start? Put simply, good strategy identifies challenges and how to develop cohesive actions to address those challenges.
The starting point is then to identify the challenges. One way of thinking is to look for anomalies. An anomaly is a fact that doesn’t fit received wisdom. In business, an anomaly could be a great source of opportunities.
Take Starbucks as an example. In 1983, Howard Schultz noticed an anomaly when he visited Italy. He noticed that the way Italians consume coffee was different to Americans. That insight led him to form a strategic hypothesis with a list of business challenges and how to address them.
The starting point of good strategy is not about putting a budget or a financial plan together. It’s not about the percentage growth we expect next year. A good strategy starts from an in-dept observation of anomaly.
At a time when Apple could do no wrong, Facebook was changing the world of communication and Amazon was blowing everyone away in cloud computing, Microsoft was the uncoolest 40-year-old imaginable.Paul Smith
The above pretty much explains Microsoft’s situation when Satya Nadella took over the CEO rule from Steve Ballmer in 2015. What happened at Microsoft just confirms my belief that a company’s image is a reflection of a CEO’s personality. Steve Ballmer’s personality had created a ‘lost decade’ perception to the world about Microsoft.
How is Satya Nadella different?
A lot has to do with his leadership style? In a word, he is an infinite mindset leader. Satya has a clear “just cause” and he doesn’t compete to win. He competes to keep playing, to be better than his yesterday’s self.
What is his “just-cause”?
“Our mission is to empower every person and every organisation on the planet to achieve more.”
It’s not about specific products at Microsoft. It’s all about what solutions Microsoft has to enhance people’s lives. It is what Satya uses to make key business decisions.