Tag Archives: start up

Good Money, Bad Money

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The basic idea of good money and bad money is that the type of money a manager accepts carries specific expectations that must be met. These expectations heavily influence the types of markets and channels that a venture can and cannot target. The very process of securing funding forces many potentially disruptive ideas to get shaped instead as sustaining innovations that target large and obvious markets. Thus, the funding received can send great ideas on a march towards failure.

As emergent ideas are being nurtured during nascent years, money must be patient for growth but impatient for profits.

When winning strategies become clear and deliberate ideas need to be carried out then money should be impatient for growth but patient for profit.

  • Clayton Christensen, Disruptive Strategy, HBX
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Impressions and Imperfection

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Malcolm Gladwell (author of David and Goliath, Outliers, The Tipping Point) said in an interview a few years ago that our impressions of people are usually more positive than reality. If we hear a deep velvety voice on the radio we tend to associate it with a “deep velvety” persona – whatever our interpretation of that may be. Has it ever happened to you that you have met a radio personality in person and there is a mismatch with what you imagined?

We choose information to fill in the blanks.

In business, we also choose information to fill in the blanks and our bias sometimes gives us a polarized impression of what a marketplace or a customer is about. We can never have perfect data and certainly there is value in shipping “less than perfect” because awaiting perfection might mean we miss out on the opportunity altogether.

Quotes like these make me smile and nod my head in agreement:

If you see a bandwagon, it’s too late. – James Goldsmith

If you are not embarrassed by the 1st version of your product, you’ve launched too late.– Reid Hoffman

So as entrepreneurs and business people we have to fill in the blanks in order to get our product or service out there, to get it into the hands of customers in new markets and to guess how it’s being purchased, used and talked about. Consulting firms, like Hipona Consulting, can help you with business intelligence and connections in the marketplace but there still will be gaps that have to be filled with assumptions, associations and creativity.

Now the flipside…

The question that might be interesting to consider is this: looking from the customer viewpoint is it more valuable for your brand to have more reality based impressions (based on information) or fill-in –the- blanks-imagination based impressions?

I would argue that it needs to be a beautiful mix of the two. That a company provides enough information to create customers and yet leaves a little to the imagination…

EMC

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