Monthly Archives: July 2010

How to monetise anything – part IV

monetisation workflowLast post I continued the discussion on “How do I monetise anything” with a look at the value in a situation. This, the final post in the series, looks at identifying the Packaging that your monetisation should take.

Packaging

When I say packaging, I mean how things are packaged up, or what’s in the bundle and how is it presented. We all like to consume value in particular ways that are specific to our demographics. For instance in Melbourne if you were charged extra for your coffee when sitting in the nice seats, you would be outraged, but in Paris its the norm. However if you charged a separate fee for sitting outside, Parisians would equally be outraged because that’s not how they expect their coffee drinking experience to be packaged up.

The way value should be packaged, may not be immediately obvious either. The value may be hidden deep inside a different situation that is palatable to the consumer. For instance you sell value add network services, inside the telecommunications contract, inside the “free” mobile phone you give away.

In many situation there is also an expectation for some services to be provided free (eg a speech you make) and some services will be paid for (eg the food supplies). The perception is generally that if the situation involves you doing what you do to make a living, you should be paid, but if you are doing a favour or some marketing, you should do it for free. Working with that situation may mean you need to get a fee from the service providers or you need to represent that this is how you make an income.

Some suggested packaging questions and ideas around a Community event

  • Is public speaking considered to be you job, or an “add on”?
  • Can you be paid directly?
  • Can you be paid in kind?
  • Can you sell your book / community membership / videos / posters / donations etc at the event?
  • Can you market or represent a third party who sees value in the event?
  • Could you be paid for your inconvenience (a bottle of scotch for your travel time)?
  • Could you be covering the cost of the A/V people and be making a margin on that?

Some suggested packaging questions and ideas around the Wikinomics group

  • Can you negotiate a cut from the venue you hold your meetings in?
  • Can you sell the products that your group is acquiring?
  • Can you create content in the format your group wants to acquire (eg reports, or write a book)?
  • Can you market or represent a third party who sees value in the group?
  • Can you sell a traditional product or service with the Wikinomics principals embedded in it?

Some suggested packaging questions and ideas around the Great Network

  • Can you create products or services your network wants to acquire?
  • Can you market or represent a third party who sees value in your nework?
  • Can you sell access to your network in a format that’s palatable such as private dinners?

Almost every attribute of a situation has value, the questions you need to ask are:

  1. What costs do I need to incur to access that value?
  2. What are my risks?
  3. What ROI can I achieve?
  4. Is this monetisation aligned with my tangible and intangible goals?

Monetisation is easy in traditional areas such as selling goods from bricks and mortar and really difficult in innovative areas where there are no obvious or routine solutions. In fact my suspicion is that this is one of the main reasons why:

  • Gen Y is more focussed on being entrepreneurial around technology enabled social ventures than money making ventures.
  • Competition is incredibly fierce amongst traditional business models.
  • Web 2.0 offerings have difficulty getting revenue full stop.

Hopefully by thinking about the attributes, the value and the packaging, I’ve given you a framework to think about how to monetise an idea or a situation you find yourself in.

How to Monetise anything – part III

monetisation workflowLast post I continued the discussion on “How do I monetise anything” with a look at the attributes of the situation. This post I would like to have a look at identifying the value in the situation.

Value

The second step in the process is to identify the value that the attributes of the situation offer, and to whom. Value can be traditional Goods &Services or Revenue, it could be knowledge, or it could be something much more intangible such as a “sense of community”. Value may also be derived by someone not party to the situation. For instance a television audience is of direct value to the advertisers, not the station itself.

Some Suggested questions around a Community event

  • What drives the audience to attend, is it the networking, the sense of community, your content, the entertainment, the food and drink?
  • Where is money changing hands around the situation?
  • What other needs does the audience have that they are prepared to pay for?
  • Who can satisfy these needs?

Some Suggested questions the Wikinomics group

  • What drives the community to be involved, is it the thirst for knowledge, the sense of community or the search for a business opportunity?
  • Where is money changing hands around the situation, is it for services or is it for the coffee and books you consume?
  • What other needs does the group have that they are prepared to pay for?

Some Suggested questions around the Great Network

  • What does your network directly spend money on?
  • Where does your network influence the spending of money?
  • Which parts of your “great network” actually have value?
  • Can you satisfy their needs, or is it someone else you need to represent?

Almost every attribute of a situation has value, the question you need to ask is what costs do I need to incur to be able to access that value and is it aligned with credibility and goals?

Next post I want to have a look at the final competent of monetising anything which is packaging.

How to monetise anything – part II

monetisation workflowLast post I looked at the question “how do I monetise this” and suggested framework for monetising, as per the below. This post I want to look at identifying the attributes of a situation you want to monetise.

Identifying the Attributes

    The first thing you want to do in any situation you want to monetise, is identify all the attributes, not just the most prominent or immediate. Sometimes it can be quite hard to identify all the attributes, so as an approach its worthwhile looking as the inputs, the outputs, the activities around a situation and its outside influences or controls, then ask yourself “who, what, where, why, when, how”. As you look at each item, also ask yourself “so what?” the answers may surprise you.

Consider our examples drawn from the questions raised in the initial post.

Suggested questions around a Community event

  • What is the demographic of attendees and the quantity or people, what do these people do, what do they spend money on, who is in their network, what are they passionate about?
  • Where is the location that you are speaking at, does the location need services. How will you get to the location?
  • What is the content of your presentation, are their particular messages that you will push, are their specific solutions that people can purchase, are their calls to action?
  • Will others access your content that are not at the event, where abouts and in what format will they access it?

Suggested questions the Wikinomics group

  • Who is involved in the discussions around Wikinomics, what is their demographic, how often do they meet, where do they meet, do they spend money whilst there?
  • What are their stay awake at night issues?
  • How do people learn about Wikinomics initially and then ongoing? How do they consume content around Wikinomics?
  • How does one build skills in applying Wikinomics concepts?
  • Who else is interested in Wikinomics, why does it interest them and what problems do they need to solve?

Suggested questions around the Great Network

  • What are the demographics of the people in your great network?
  • What power and assets do these people have?
  • What worries these people, what frustrates them, what do they aspire to, what does their future look like?
  • What do they do with their time, how do they spend their money, what are they saving for?
  • How often do you “touch” these people and by what method?
  • How often do these people “:touch you” why do they think of you and what do they think of you?

Once you get started, its not that hard to start recognising all the attributes of a situation

Next post I will have a look at identifying value.

How to monetise anything – part I

I drink a lot of coffee. Unless I have decided to be completely anti-social I normally meet someone for coffee twice day. Its part of my investment in networking. First meetings tend to be more wide ranging as we get to know each other, and downstream meetings are normally focussed on a specific problem. But because of the volume of “first” meetings I attend, I have noticed a number of generic business issues. Here’s some snippets indicating one of the issues that I regularly hear.

“I keep on getting asked to speak at small community events, but how do I make money from this?”

“I am part of a group fascinated by Wikinomics, which we feel has enormous value, but nobody wants to pay for it”

“I have a great network, but how do I monetise it?”

The question of “how do I monetise this?” is a difficult one. Its normally because you find yourself in a situation where there isn’t a reference point close enough for how to make money. Certainly the green grocer doesn’t ask the question about his fruit and veg, but he does when he notices something unexpected such as people regularly using his shop to shelter from the wind or rain whilst waiting for the morning tram.

But “how do I monetise this?” is a question that pops up in my coffee meetings again and again, because of the type of people I meet. So as is my way, I thought for a while about what the question really was, I did some research and came up empty, I mulled it over for a couple of weeks, drew some circles on a page and searched for a universal framework to approach the problem. I have come up with what I think are solid thoughts, but because of the size of this article, I have split it into three parts.

The problem of how to monetising something you have or are doing, is not dissimilar to negotiation or being an entrepreneur. In fact its a bit of a melding of the two. It also has a simple workflow, but of course the devil is in the detail. There are just three steps:monetisation workflow

1. Identify all the attributes
of the situation,

2. Identify where the
value is,

3. Identifying the
appropriate packaging.

Next post I will drill down on identifying the attributes of a situation.

iPad in the Kitchen

I decided I wanted to purchase an iPad. The first roadblock was my wife, the more level headed of the two of us, who said “of course honey, but by the way, what’s your business case?”. I didn’t have one other than; a. I wanted it. b. I wanted to explore whether the device would change my relationship with “the machine”. Since I have a budget for discretionary spending on technology I went out to buy one.

The second roadblock was that despite advertising being everywhere, nobody had any in stock. I had to order it in.

Its now three weeks in and I’ve had 3 insights that surprised me.

  1. Its instant on. Unlike my PC and netbook which both take over a minute to get to a state where they can actually run an application, the iPad is basically instant on because it uses a version of the iphone OS. This means that I can look something up on the web (eg Masterchef recipe) with out interrupting my flow of thoughts or discussion. Doesn’t mean much if I’m sitting at my desk, but means an awful lot if I’m out and about or talking in the kitchen.
  2. Its flat form factor and light weight means that I can mount it on vertical surface. Why pay $17,000 for an internet connected fridge, when you can have the same thing for $600 and a some gaffa tape.
  3. The touch screen interface isn’t that big a deal. Sure its harder to type out a document, but typing is an abstraction anyway. If I want to draw or simply click on links, touch screen is the go. And if I did mount the ipad on the fridge, a keyboard would just be an annoyance and a mouse would be unworkable.

These thoughts lead me to believe that we will start to see Ipad’s or their competitors embedded into everyday furniture and appliances. Its just to easy to do and I now want web access pretty much all the time, especially when I am cooking and want a recipe. I may even get some nice mounts to put it on the freezer door.

How to get help

The other week I had coffee with Chris Stewart who is a Melbourne based entrepreneur and strategic foresight consultant. Both Chris and I have lots of different skill sets and we both enjoy starting new ventures. We tend to catch up around once or twice a year and discuss what “wisdom” we have gained since the last coffee.

Last week we decided that three questions were critical for the multi skilled or generalist entrepreneur to answer. They were:

  1. What can you do?
  2. What will you do? and finally
  3. What should you do?

We felt these questions were wise because its all to easy getting caught up doing tasks that aren’t the best use of your time, or taking on a task that you never get around to.>

This line of thinking got me pondering over getting assistance, and what form it should take. I decided it might be worthwhile identifying and describing the different roles that “helpers” may take. Mostly because all to often I hear the phrase -”I need a mentor”, when in my opinion in may be the last thing you need. Now some people may argue over the definitions each type of “helper” I have given below because nothing is fixed, but I think its worthwhile focussing on the definitions, not the label.

So here’s a bunch of people that offer you help, with my definitions.

Type of Help Strategic Tactical
Gives Understanding Advisor

Helps you understand your
options.

Gives Direction Consultant

Tells you what they think
you should do.

Manager

Tells you what to do.

Gives Solutions Mentor

Shows you how it can be done.

Coach/Trainer

Teaches you how to do it.

Gets it Done Contractor/Employee

Does it for you.


So at a Strategic level you have three options

Advisor –Helps you understand your options.
Great Advisors give you a framework for decision making and lets you understand your options. They understand that the decision is yours, as are the risks and the rewards. Some Academics can make great advisors and so do people from outside of your field who have no “buy in” to any particular option. Outsiders tend to have great clarity of thought. I would recommend having an advisor to almost everyone as despite how wise you are, the hardest person to give advice to is yourself. Sometimes an advisor can just be a mate you catchup with and use as a sounding board.

Consultant – Tells you what they think you should do
Great consultants have professionalism, experience, expertise in their field and are aligned with your goals. With consultants you tend to get what you pay for so great consultants cost a lot. Understand exactly what the outcomes you want from them look like as the clearer your brief, the more efficient and effective response you will get.

Mentor – Shows you how it can be done
A great Mentor is someone who has been successful in the same field or area as you and is prepared to help you. Their own experiences offer a set of winning solutions for dealing with uncertainty or options. Great mentors are either incredibly busy because they are at the top of their field (don’t be scared of asking these people) or are recently retired and want to give something back.

At a tactical level, you have three other options.

Manager – Tells you what to do
Management is a different skill set from entrepreneurship. Most Entrepreneurs will at some stage in the life cycle of their business choose to bring in professional management. The high energy, high risk, shotgun approach of the entrepreneur doesn’t always benefit you, in fact many small businesses will employ a manager to keep the entrepreneur focussed on performing activities that they know are important. Having great management though depends on you understanding the roles you play and separating out your shareholder role from your employee role.

Coach – Teaches you to do it.
Coaching is all about skill transferral and improvement. Ex sports trainers tend to be very good at the psychology of skill transferral and improvement. Its easy to find a coach, just Google the skill and the word coach , plus “site:.au” to get Australian coaches. Be wary though of those that have products to sell you, eg financial coaches with insurance packages. That’s not about coaching, its about selling.

Contractor/Employee – You tell them what to do
Finally understand what you shouldn’t be doing. Either you are rubbish at it, you won’t get around to it, or it will suck up your time and prevent you from growing your business. I can’t give advice on what makes for a great employee, as I’m simply not sure I know. Most literature tends to focus on how to be a great leader or manager, not an employee although Bill Lang has had a look at it with his 8 skills for career success.

Of course in real life, your helpers will probably play multiple roles, however understanding what you need and where the strengths of the helper are is critical. My other thought on the topic is that it appears that those who attempt to sell their services at a strategic level, generally have the least to offer. Great strategic people, other than consultants, are normally way too busy being successful at their own activity to want to charge a fee for their service.

Whats in it for the Elite?

I’ve been thinking about two sided markets a lot lately. Two sided markets are where two distinct customer groups are serviced by the same provider and the existence both customer groups provides value to the other. Eg Computer Games. Computer Game Developers need lots of consumers with a platform for them to be able to invest in game development, and, consumers with the platform need lots Game Developers to produce Games, for them to want to purchase the platform.

Conceptually this isn’t that hard. But what I have been trying to understand is the luxury goods market. Is it two sided? General consumers, where the sales and profits are, aspire to own the products because they value their “exclusivity” and the psychology of owning something that the likes of Brad Pitt and Angelina Jolie own.

What I don’t get is what’s in it for the “elite” that are the ambassadors for the luxury goods. I understand sponsorship deals like Tiger Woods recommending golf shoes. Sponsorships make up the majority of his income. But what happens when the sponsorship value is non-existent or immaterial? Certainly Brad Pitt doesn’t aspire to be Brad Pitt, and the sponsorship value is nothing compared to what he makes from one movie. Plenty of the elite also pay for their own goods.

Because this has been bugging me, I have designed a Churchill Club event for this Thursday to get people to talk on the subject. Note : Most Churchill Club events have a topic I want answered at their core.

My suspicion is that there is clear value to the “elite” in owning luxury goods, its just not obvious to me. When it does become obvious, I’m wondering where else the business model can be applied?