Monday, May 18, 2009

test for a reason to believe

OK, so here we are in this economically depressed period. In this time, we can look to see about 15-20% of businesses fail or have to go through intense restructuring. Why that figure? It comes from looking at the amount America overspent past what it earned during this long two decade party. With several trillion in lost wealth and with folks having to spend no more than they earn, this is what we get.

Now, how do we expect to fare? Will our business or service be a winner or at least a survivor? To look at this is important, because otherwise we may be pouring money down a hole and working hard on the wrong things. I say, think about your business model and value proposition.

If you have one, great! If not, and even if you do does it pass the "elevator" test. That is, can you explain your business model and unique selling proposition (USP) in few enough words that it can presented during a short elevator ride. This is a great test as that is about all the time you will get from consumers looking at your store, or website or listening to you, or reading about you.

Think that is wrong? Don't bury your head, or try to explain around it. People look at packages for about 10 seconds before they move on or come closer for more. Stand in front of people like VCs for money and you will lose them if they cannot "get it" in that time. So, look at you store, or your website or your business plan and see if people can "get it".

If not, then try to write it up in Twitter type of prose (meaning as few words as possible). If you get past a page you are in trouble.

This is a very valuable exercise. It is not about being better, it is about people being able to grasp you are better. It is not about great product and services, it is about people seeing that you have them. If you cannot explain it, then it is time to figure it out.

Many have floated on the froth stirred up by our collective spender-bender. Now as consumers recover from the hangover they are thinking about why they are spending and where. If you cannot be succinct, they will move one. Once you have this done, it will be key to helping you decide what to do, and what to not do.

Friday, April 17, 2009

Who's to blame? Woe is me, and other fables for the CE trade

Blame and Woe, two things to get over right now. All human activities have their ups and downs and so it is with the CE industry. It only takes listening for a short while to any two or more people in the trade to hear about "who or what" is to blame and how much "woe" is coming to them, and of course...the usual position that someone should take it on the chin with an often unrealistic view.

Yes, it is easy to agree that more margin is needed for retailers and vendors on all sides. On the other hand, this is expected to be done without raising prices, or cutting features, needs large volumes of sales and a lot of promotional help. Folks, this industry has grown as much as it has due to extreme value and capability. The horse left the barn a long time ago on a measured pace, smaller industry that had high margins. In fact, it seems the go-go model of CE is one that keeps picking up more rather than less practitioners and this can be seen as an endorsement of the realities one needs to operate in.

If margin or exclusivity were all it was cracked up to be, then why are so many low cost, low margin providers doing so well now? And even if your business needs wide margins to cover costs, that does not mean that all low margin offers are bad. It means you need to think about how to blend what is needed into the mix rather than act like it doesn't exist.

In the end, we are all slaves to the markets. It is people, consumers, users that really dictate the shape of the market. When the market or players in it adjust to these realities and do well, that is not bad or evil; rather it is something to look at seriously. When was the last time you looked hard at the real competitive universe and thought about what you place, space and unique value are in it? Do it, and you will find a good path as there is a whole lot of CE business out there. You need a plan.

Of course, what is also happening is the one and only constant of the CE space...change. Now change is hard for people, habits of thought and practice are engrained, hard to break and often loved. All part of the "run away" mentality. Get over it. Change is what drives the industry.

Think you cannot adjust to the cost structures of IT products like netbooks? Don't like working with wireless carriers? Well, you got over the yen going from 300 to 100 per dollar, the digitization of most media and equipment, several major retail cycles; you will get over these too.
And if you choose not to try, then prepare to either get mowed under, marginalized or to spend more money, time and grief catching up.

A better idea is to embrace the change. Keep an open mind. Learn about the new products and areas. Think about how you fit in. With all the connectivity abounding these days, it will be easy to find a place to add value. Those that consistently have moved with the reshaping of CE, and have added value have prospered.

Both the good and bad news is that times like this will bring a lot of good people down. On the other hand, this is also an opportunity and an opening for share gains and growth. When others are focused inward or frozen against a changing background wondering why them, it is easy to run right past them. We have seen this in the television market where the brand names are very changed from just some years ago. We are seeing big changes in the handset space. Now we are seeing shifts in the PC/laptop/netbook space. In fact, we will see it in all the product and service spaces.

So, get educated. Take a look around and find out. Make a plan that you can execute. You will find that it is out there and much more rewarding than parsing blame. Next entry we will start to discuss some ideas of how and what you might do.

Friday, January 23, 2009

First off

As this is the first post, perhaps it is best to put forth the purpose of this blog. That is to try to bring forth tough issues in the Consumer Electronics industry for inventors, marketers, retailers or consumers and suggest the caused and propose solutions. Hopefully not just from me, but from interested readers and collaborators. The CE industry is vibrant and offers wonderful results for people, but not without its warts and problems. A lot of issue comes from change as this is hard for people, yet the only constant one can find in the CE space. How to deal with change involves people first to a great extent, as well as technology, products, markets and more.
What we have always seen is that those who embrace change, willingly or not are those that last in CE. The "run away" strategy is very seductive and considering human nature, one that is often employed. Too often this leaves roadkill. Let's shoot for this site to try to avoid that.
all the best to friends, colleagues, participants and users of CE.