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Jon Stewart on Journalism with Walter Isaacson

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Walter Isaacson’s Math Problem

A tweet from @SteveCase pointed me in the direction of Jon Stewart’s hilarious interview with Walter Isaacson last night.  Actually, I think “skewer” might be a better word than “interview”.  At one point Stewart started whistling the theme song from Mayberry R.F.D. while Isaacson was trying to make the case that ice should be free.  Ahem.

In any event, Isaacson, never short on words, has published his solution to the so-called “crisis in journalism”:  micropayments.  His article is the cover story for the current issue of Time magazine.  In a nice bit of irony the cover graphic is a copy of the New York Times being used as a fish wrapper.  One wonders whether the artist meant this as editorial commentary rather than pure illustration.

Like many recovering media executives, Isaacson gets the math wrong when he analyzes the situation. There isn’t a crisis in journalism.  There are more media outlets and published writers than ever before.  Disciplined, talented journalists continue to turn out great stories, whether they’re published on blogs, the New York Times or as videos on CNN.  And amateurs have been invaluable i-journalists in situations like the recent attacks in Mumbai and the USAir crash.  The breadth of journalism is well understood by Barack Obama who gave it the Presidential seal of approval by taking a question from Sam Stein, a Huffington Post blogger, during his first press conference.  

The problem is that a 19th century economic model doesn’t support 21st century news media.  So publishers and media executives are doing a lot of hand-wringing but have yet to find a solution to the red ink spilling all over their earnings reports.  Isaacson recommends micropayments as an alternative revenue stream for media, drawing an analogy to iTunes and impulse purchases like ringtones.    

What he fails to see is that this isn’t about payments versus free or publishers versus consumers.  As Clay Shirky rightly asserts, those faulty analyses ignore the fundamental point.  The Internet has radically altered the media ecosystem, moving us from being passive audiences or even rapacious consumers to becoming active users.  Media today is part of the conversation, not a walled garden or an artifact which can be controlled and monetized.  Media companies need to understand and leverage these new dynamics into economic models which work today.  Free content is not the problem here.  People will pay for things they value.  Media companies need to devise a better way of delivering value - or a cheaper way of creating it. 

But don’t expect these new inspirations to come from media executives.  After all, it wasn’t a music industry executive who created iTunes.  

Station Break

Okay, a 20-month blogging hiatus is more than a station break.  As usual, the media world has again shifted in its orbit.  Microblogging via Twitter and other status services now seems to trump lengthy analysis.  That said, there are some interesting posts on the issues around new models for media (versus new media models) of late.  See Clay Shirky and Fred Wilson.   Time to re-engage and ponder.  Look for less OpEds and more quick comments.  And yes, my tweets are a mix of professional and personal.  But that's life, isn't it?

Lessons from SunRocket’s Sunset: It’s the Customers, Stupid

I’ve been reading coverage of the abrupt demise of SunRocket with great fascination. Last week SunRocket slammed the doors shut on its customers without so much as an email in advance. They turned off dial tone for everyone from small businesses that regard phone service as a business lifeline to pregnant women for whom it is an actual lifeline. What’s even more astounding is that they charged customers in advance for this service – $199 for a year. And according to the Washington Post, ran through $80M in funding.

So what went wrong? How did this company go so far off the rails? I find this question of particular interest since I worked with members of the founding team (both management and funders) during the telecom price wars of the early ‘90’s. These folks are intelligent, experienced technology executives. And it certainly seems like their original instincts were on the right track. Just take a look at a few points from the founders’ “Member Bill of Rights”:

‘Unconditional Satisfaction: You have the right to a reasonable refund if we fail to perform to your satisfaction.

Dignity & Respect: You will be treated with the utmost dignity and respect in all dealings with SunRocket and company personnel.

Integrity & Trust: We endeavor to fully inform you of available options so you can make timely and informed choices. We will never abuse your trust through deceit, exploitation, neglect, manipulation, or discrimination.’

I haven’t spoken to executives or investors about this and I have no insider information, but here’s my hunch about what went wrong.

First, they positioned themselves as a low-cost provider in a commodity category where they didn’t control the essential infrastructure needed to deliver service. In other words, they set themselves up for disastrous competitive moves by the telco’s and cable co’s. According to the New York Times, cable companies are adding Internet phone service customers at nearly four times the rate of all the Internet phone service startups combined. The San Francisco Chronicle reports that the cable companies account for 70% of the market. SunRocket and the other Internet phone service startups woke up the sleeping giants. But when you position yourself as the low-cost provider there’s no place to go but down market, so these startups are struggling to find sustainable business models.

Second, despite the great promises in their Member Bill of Rights, they failed to treat their customers with dignity and respect. They commoditized their customers, and when you commoditize customers you can count on them to commoditize your product. SunRocket executives seemed to have missed the last ten years of tools and technologies for engaging with consumers. Although they built a 200 seat call center in Springfield MO they passed up all those opportunities to listen to and learn from their customers. Why would an early stage technology company build a domestic call center unless it was to ensure premium service and great customer insights? It doesn’t appear they had a blog … though they abused blogs liberally in a contest held early in 2006 where SunRocket users were encouraged to post gripes about companies in order to win cash prizes of $200 - $5,000.

Lastly, rumor has it that new executives brought in didn’t share the founders’ vision for great service and commitment to customers. While you can’t lay the blame for this entire debacle on CEO Lisa Hook, it’s fair to say that she didn’t handle the shutdown well. According to a Washington Post report, Hook held a company meeting on July 11th, where she told employees that buyers had approached the company but that bankruptcy was a “possibility”. Of course she had to make that session brief in order to catch her flight to San Francisco where she was a panelist at Fortune’s iMeme Conference. The following Monday she shut the doors and turned out the lights. Poor form, to say the least.

Heaven knows start-ups are tough. Just because you have a great product and a shrewd marketing strategy doesn’t mean you’ll make it. The Internet Deadpool is littered with as many good ideas, badly executed as bad ideas. But it’s been a while since we’ve seen a meltdown as stunning as this one.

Somewhere along the way the SunRocket team forgot why they were in business: customers. They designed their products to accelerate sales not inspire loyalty. They lost their customer relations compass. These are easy mistakes to make in the heat of the moment. SunRocket reminds us that this doesn’t just happen to twenty-something garage startups. Even seasoned technology veterans can get caught up in the scramble. It’s not rocket science, but SunRocket missed that calculation.

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brand
customer insights
customer relations
deadpool
marketing
sunrocket

Marketing Artifacts: Brand Positioning Statements?

I recently struck up a conversation with a group of friends and former colleagues who are branding experts.  I’m working with a new company and wanted some examples of positioning statements.  The responses I received were intriguing.  A handful of folks sent examples.  One response from a VP of Global Branding was contrarian.

I have come to feel that positioning statements are mostly a waste of time and energy unless they are amazingly concise and contain 1 idea. The whole P&G  ‘For (target audience) who (list of needs) we provide (benefit) (benefit) benefit) because only we provide (reason to believe’ pro forma statement construct seems woefully cumbersome today and very communications brief driven.
 
3-5 great attributes you want your brand to stand for/represent seems to lead to better creative briefs and ergo better creative work both in terms of communication and product/service design than positioning statements.

Wow!  This from a guy who’s spent much of his career wrestling with these issues with F500 brands.   One of our colleagues, who spends his days shepherding marketing for technology startup companies, responded as follows:

Name these companies:
 
1) The computer for the rest of us
 
2) Networking networks
 
3) The world's information in one click
 
4) Personal video broadcasting network
 
These are not tag-lines. The companies who expressed these words successfully positioned the value proposition and differentiation within a simple ‘one-liner’. Founders and executives delivered these one-liners to everyone who would listen and whom they needed to fold into the cause – investors, landlords, lawyers, recruits, customers, and partners.

And yet another response (from someone who’s a hybrid technology/marketing guru) provided another dimension:

Information today flows every which way. 

The "shape" of the brand in the minds of customers may be more varied now.

Some percent of the variation is not good, but some may very well be.

Over-constraining the ‘position’ with too much specificity would not reduce variation (provide management control) anyway.

Therefore craft a simple, succinct statement that does a better job of absorbing or exploiting complexity (variation) rather than avoiding it.

So it seems the positioning statement is not going the way of the Dodo bird.  But it has evolved to something more practical.  In a world where brands are verbs instead of nouns, positioning statements have become the headlines that encapsulate the action instead of static monuments to marketing discipline.  The exercise of designing a “classic” positioning statement is often a good one … it forces focus on critical marketing issues (audience/target market, competition, differentiators, etc.).  But the result needs to be the brand experience, not a couple of awkwardly constructed sentences that collect dust in the marketing department.

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Brand, Marketing, Positioning Statement