return to homepage

Archive for August, 2009

Great Entrepreneurs Build Strong International Brand Names – Their Successors Often Lose Focus And Greatly Damage These Franchises

Monday, August 31st, 2009

by: Geoff Ficke

If you are of a certain age you will vividly remember the following names: Helena Rubenstein, Faberge, Germain Monteil, Trigere, Revlon, Elizabeth Arden, Max Factor, Schwinn, W. T. Grant, Montgomery Ward and Chuck Taylor. Each name represented a hugely successful consumer product brand.

Each of these brands was grown from the entrepreneurial seed of a visionary. Unfortunately, each was subsequently abused, in several cases terminally, by non-visionary corporate bean counters.

A classic example is Revlon. Revlon is instructional because it remains in the news, mostly for being a tortured shell of it’s former glorious self. Founded by Charles Revson in the 1930’s, Revlon was the largest cosmetic company in the world until the 1980’s. Ultima, Norell, Charlie, Bill Blass and Eterna 27 were subsidiary divisions under the Revlon corporate umbrella. The finest department and specialty stores in the world fought to carry these upscale, elegant products. Revlon was widely respected as the arbiter of taste for fashion conscious women.
Fire and Ice, Lips and Tips and That Man are only a few examples of product marketing campaigns that were ubiquitous in consumer culture of the time.

Charles Revson was one of the most famous businessmen of his time. Books were written about his life, business strategy and the legendary brutal bullying of his management personnel. He paid his people exceedingly well and expected total commitment to his company. The drive to stay ahead of the competition by constant innovation and creativity was all consuming for Mr. Revson. Nothing was allowed to impede his constant pursuit of staying number one. His famous department store mantra, “success requires space, location and demonstration” is a given followed by successful merchants to this day. He once was asked how he could justify charging $5 for a $.40 cent lipstick? His famous retort: “I don’t sell lipstick, I sell hope” is an accurate reflection of an entrepreneur who knew his customer and how to please them.

As Mr. Revson aged, he could see the need to address his succession as crucial to his legacy and Revlon’s future. After conducting a famous, thoroughly documented executive search, he hired Michel Bergerac from IBM. Mr. Bergerac was a brilliant executive. He inherited a billion-dollar business with worldwide operations. Revlon dominated the male and female fragrance, color cosmetic and skin care markets.

Sadly, the business culture of the 1980’s and 1990’s did not value creativity and innovation as much as asset deployment. Mr. Bergerac was excellent at deployment of assets. For a number of years Revlon held on as king of the category. However, the inevitable slowly began to happen. Product launches began to stall. The Company began to follow competitor’s successes with me-too look-alike products.

Lancome, L’Oreal and Estee Lauder, under the lead of entrepreneurial owners, became industry innovators and assumed leadership in the space historically dominated by Revlon.

It has been 20 years since Revlon left the department store business. Mr. Bergerac was awarded a lucrative “golden parachute” when financier Ronald Pearlman took control of Revlon in a hostile corporate takeover. Under Mr. Pearlman’s ownership Revlon has been a continual money loser. Product innovation is non-existent. Revlon’s products are sold in drug chains and mass merchandisers and are regularly promoted with off price coupons. Charles Revson would be livid. But he would not be alone as a founding entrepreneur, nurturer of a great brand and yet, unfortunately, a life’s work diminished or extinguished by successors lacking the innovative gene.

Great entrepreneurs like W. T. Grant, Montgomery Ward and Pauline Trigere are rare. The ability to create, innovate, manage and grow a business is rarely found in a single package. Calvin Klein is a creative entrepreneurial genius in the fashion world. His partner, Barry Schwartz is the unseen business/management half of the Klein success. They compliment and balance each other. Whether their successors can continue to provide clothing designs that the consumer will desire is an open question.

It was easier for Germain Monteil to build her skin care line from scratch than it was for The Squibb Drug Company, after purchasing this growing brand, to maintain it. Germain Monteil products are no longer sold. There are far too many such examples.

In my work with entrepreneurs I am constantly confronted with examples of ambition not paralleling reality. As Clint Eastwood famously quipped in a Dirty Harry movie, “a man has to know his limitations”. It is a rare person that has the range of abilities to both launch and successfully build a product. Limits of ability or experience, however, do not close the door to potential success. The right partner, team or alliance can spell the difference between success and failure. Charles Revson was the whole package. His successors have proven themselves to be not of his caliber.

I love to discuss specific opportunities with prospective entrepreneurs. Please call me at any time to review your dreams.
Geoff Ficke 859-567-1609

Aristotle Onassis Was One of the Worlds Richest Men – How He Recreated Himself Makes a Great Success Study

Monday, August 31st, 2009

by: Geoff Ficke

Aristotle Onassis was one of the most successful, publicized and examined people in the world during the middle of the 20th century. Today, years after his death, he is principally remembered as an ultra-rich shipping magnate, touring the world on his magnificent yacht and for his romance with the diva soprano Maria Callas and marriage to Jacqueline Kennedy. Before he attained business and social heights, however, he was a very rough, uncultured, non-work of art. His effort to change a dim future is worth a look: and is instructional as a teaching aid that anyone can utilize in pursuit of success.

Onassis was born in Turkey of Greek parents. At the end of World War l he, along with millions of others, was forced into refugee status and arrived in Argentina as a penniless immigrant. His Spanish was minimal, his education limited and his skills on offer were not highly prized. Nevertheless, he examined his circumstance realistically and with deep analysis. He recognized that out of post-war chaos would come opportunity for the agile and creative entrepreneur. Being broke was just an obstacle, not a closed door to Onassis.

As Onassis learned the ways of Argentine society and business he noticed that there were specific clubs, restaurants, hotels and theatres that were almost exclusively frequented by the successful business and political class. Always a keen observer of human nature, he realized that contacts and friendships of value to an ambitious fellow like himself could only be nurtured in this rarified realm. Onassis was determined to find a way in.

He worked mundane jobs, including a stint as a telephone operator. However, he was different from co-workers and other immigrants. He immersed himself in all things Argentine and he saved every cent he earned that was not needed for basic sustenance. Most importantly, he recognized the old saying; “the rich are different from you and me” was so true. He needed to emulate the rich in order to become rich. He never looked at successful people as the enemy. He had aspirations, not jealousy in his heart.

Onassis became addicted to quality in all areas of life. While still poor, he saved every peso until he could afford a Saville Row hand cut suit. He only had one suit, but it was elegant. He also observed that the rich seemed to appear healthier, happier. They seemed to sport suntan skin as a badge of their fortunate lifestyle. Onassis developed a lifetime addiction to pursuit of the perfect suntan. His tan was internationally famous long before the actor George Hamilton gained similar fame. To this day, a suntan is an emblem of the good life for the successful class.

A Saville Row suit, quality personal furnishings and a suntan that reeked of idle leisure and success were only a start. Onassis was still a rough cob. Nevertheless, he believed in his ultimate destiny. He would have a drink every night at the bar of the Intercontinental Hotel in Buenos Aires, the cities finest. Only one drink, because that was all he could afford. He still worked as a telephone operator, but he kept his parallel lives as a blue-collar worker and social status seeker firmly differentiated.

His nightly visits to the Intercontinental Hotel bar gradually lead to his building a network of business and social contacts. The famous Argentine soprano Claudia Musa frequently visited the hotel. She was an adored opera star and a cultured beauty. Onassis was basically nobody and a poseur. And yet, he pursued the beautiful singer, and with his usual tenacity he won her heart. This drive to win would be displayed in every area of his long and exciting life.

Onassis recognized that Argentine women preferred a type of sweet Turkish tobacco that was not widely available in South America. Utilizing his newly found relationships; he brokered an import deal for an inventory of the tobacco. He assembled the capital necessary to organize a small factory and began to market several brands of Turkish cigarettes. This small, but successful deal was the basis for his later international business prominence.

Onassis recognized that World War 11 was imminent. The movement of war materiel was going to become crucial to the Allies winning the war. Shipping would be highly profitable, if he could find an inventory of ships to purchase. With customary elan, he found a small fleet of sturdy but well used freighters on the St. Lawrence Waterway and arranged a tight line of credit to purchase the motley flotilla. He was on his way to becoming the most famous shipping magnate in history.

Entrepreneurs, in order to succeed, often must change elements of their personal lifestyle. We have all heard the old adage, “success breeds success”. No one practiced this truism more fully and instructively than Aristotle Onassis. He bought one high quality suit. He squired beautiful women. He went to the finest clubs, even though he could not afford much more than one drink. He used his new environment, new contacts and network to benefit his single-minded pursuit of success. Why did Willy Sutton rob banks: because that was where the money was! Onassis also made the elemental decision to hang out where the money was.

I work with entrepreneurs from all walks of life: no two are alike. One of the most difficult aspects of the entrepreneurial process that must be overcome is the need to adjust lifestyle. Sacrifice today will pay dividends tomorrow. Venture capital usually will not be found in a pool hall. The necessity to improve one’s self-presentation and to network continually is paramount. You must be constantly closing the sale, improving your skills and totally focus on achieving your goal.

Aristotle Onassis worked blue-collar jobs, spoke Spanish as a third language, was a displaced immigrant on a strange continent and had zero personal assets. Nevertheless, he organized a personal plan to overcome his obstacles and lead a life of legendary accomplishment.

I spend a great deal of time in my marketing and funding consulting work coaching inventors and entrepreneurs to overcome self-imposed hurdles. Some easily recognize the need to change habits and to utilize pieces of the Onassis template. They often have the ability to succeed. Many more unfortunately, decide that they know best, markets will adapt to their wants and a shortcut to success can be taken. They always fail. This is an absolute observation.

Contact me to discuss this article, other topics related to entrepreneurial pursuits or a specific project. Geoff Ficke, 859-567-1609, .

Thomas Jefferson Is Rightly Remembered As a Great Founding Father – His Contributions as a Practical Inventor Should Be Equally Revered

Monday, August 31st, 2009

by: Geoff Ficke

Every school child is imbued with a history of the American Revolution that glorifies the great accomplishments, political, military and social, of the famous founding fathers. We learn that George Washington; the Father of the United States was a great military leader, farmer, politician and stoic face of the revolutionary movement. Benjamin Franklin was an inventor, publisher, diplomat, self-made millionaire and audaciously wise man. John Adams was a wonderful raconteur, writer, philosopher and brave leader.

While we know much about these, and so many other great pioneering founders, we have lost much knowledge of the flavor and contributions that they made to improvements of every day life in colonial times. And accordingly, we have lost an example that can be so easily transferred to our modern world. These amazing men invented and improved according to the needs they confronted in a pre-industrial age.

Washington, as an example, was a wonderful brew-master and produced highly desired whiskey. He traded his brew very profitably and was greatly admired in Europe for the quality of his grain whiskey. His barter with European merchants for trade goods was one of the earliest examples of ongoing international trade between the colonies and Europe.

Of the famous men of the revolution, however, none was so compelling, diverse, rounded and brilliant as Thomas Jefferson; farmer, educator, statesman, politician and practical inventor. We know Jefferson was the founder of the University of Virginia, chief writer of the Declaration of Independence, Secretary of State, two term President and builder of Monticello. Today he is mostly forgotten as an inventor. And yet, Jefferson’s contributions as an inventor were most significant in his time and a wonderful example applicable to our present day.

Thomas Jefferson created products, inventions and enhancements based on the practical needs of his environment. As a dedicated and studious farmer, he was constantly seeking to improve crop yield. During his diplomatic work in Europe he was introduced to the Dutch Mold Board Plow. As he saw the device in use he noted that it was unwieldy and not as utilitarian as it needed to be. Nevertheless he saw the germ of an idea and worked to improve it. The result was the re-engineered Mold Board Plow of Least Resistance. This advanced plow enabled 18th century farmers to plow the ground more deeply, more easily and to conserve valuable seed thus increasing crop yield and profitability.

While serving as Secretary of State Jefferson was vexed by the need, and difficulty in keeping diplomatic and military secrets. His answer was the ingenious Wheel Cipher. Made from wood, with 26 spinning bands (one for each letter of the alphabet) this became the world’s most advanced method of transporting and protecting state secrets.

A visitor to Monticello is exposed to a number of Thomas Jefferson’s most practical inventions; many in use to this day. The Great Clock, invented without a minute hand, is still on display. To set the clock, Jefferson invented a folding ladder, that is still used worldwide in libraries. He invented a great Sundial that is still a marvel of engineering. The beds in the house are ingeniously hung from ropes that enabled them to be lifted and lowered to increase living space when not is use. On either side of the great fireplace in the salon are dumbwaiters. These were used to have servants send up wine and victuals without appearing physically.

As a man of the pen, Jefferson was continually reading, in deepest thought and preferred to work in silence. To facilitate his work habits he created the revolving chair as a means of maximizing his productivity. The ability to swivel, which we take for granted today, was revolutionary and enabled the user to have access to several work spaces and additional materiel from a single control spot.
The revolving bookstand was a similar invention. This ingeniously simple device enabled Jefferson to work with multiple books and reference materials simultaneously from a spinning stand of multiple, slanted easel ledges. The ability to cogently study and compare literature in a timely way is again something we take for granted but was an important improvement in the 18th century.

Thomas Jefferson was particularly proud of the Portable Copy Press he designed. This small, unobtrusive press enabled him to make multiple copies of important documents while he traveled Europe as a diplomat. People were amazed at the facility and functionality of the machine. Almost as famous as the Portable Copy Press was the travel case customized to carry the unit. It was essentially the first portable office with compartments for pens, ink, a variety of supplies, and, even a nightcap.

The genius of Thomas Jefferson, and so many of his contemporaries, was their ability to create practical devices that improved theirs, and their society’s circumstances. The created things they needed. Profit was not their principal motivation. They were driven by the need for more functional products that would enhance their ability to be more productive.

This is advice I give almost daily in my consulting business. Many people dream about inventing the next Post-It Note, paper clipper, zipper or Play-Dough. The successful inventors, entrepreneurs and small businesses I have worked with always become successful because they answer a need by providing a product or service featuring better features and benefits. Invariably, these advances arise from their life’s experience, either work, hobby or home.

Focusing on what we each know and live daily is the best path to entrepreneurial commercial success. Washington, Franklin and Jefferson invented things of value to their world. That model works just as well today.

Please feel free to contact me to discuss this article or a project you may be mulling. The opportunity to succeed as an entrepreneur has never been greater. Learn the lessons of history. Contact the author, Geoff Ficke at , 859-567-1609 for a free, no obligation consultation.

Occam’s Razor Offers a 700 Year Old Rule of Great Import to Modern Inventors – KISS Is Just A New Turn On An Ancient Theorem

Monday, August 31st, 2009

by: Geoff Ficke

Most of us are familiar with the colloquial term “keep it simple stupid” or KISS. The phrase, often used derisively to pan a complex over-analysis of a problem, is part of the current idiom. The assumption that simplicity is the preferred route to successfully discovering the answer to a particularly complex problem is actually grounded on a 700-year old philosophical theorem: Occam’s Razor.

William of Occam was a 14th century Franciscan friar from England. His postulation, after intense study of the complex questions pertaining to religion, philosophy and science, was that the route to answering difficult problems lay in shaving away the complicated, dense alternative propositions and staying with the simplest, most obvious answer. The simplest choice amongst a menu of options was usually the best route to understanding and deciding a proper course to take in addressing a problem.

Occam’s Razor, or as we moderns say, “keep it simple stupid” is a rule that has proven timeless in the pursuit of answers to the great open questions of commerce, science and philosophy.

The great American designer, Raymond Loewe, was once asked: what was the perfect shape for design enhancement? Mr. Loewe, the designer of the Wurlitzer juke box, the Studebaker Avanti and dozens of other trend making consumer products thought for a moment and answered, “the egg”. He noted, “the egg is round, oval, oblong, is spherically variable from one end to the other, remarkably strong and yet fragile”. The simple shape of the egg had been invaluable to his creativity when addressing novel design ideas.

Note the lines in the world’s most classic automobiles. The 1963 Jaguar XKE is the only automobile included in the collection of the Museum of Modern Art in New York City. Collectors still marvel at the stunning profile of this car, the beauty of the low slung coach, and the simple, almost minimalist lines of its bonnet. Bugatti, Packard, Rolls Royce and Cord are just a few examples of rolling works of art that utilized an understated, simple but elegant approach to presenting timeless beauty in the form of the automobile.

The world is so full of simple solutions to problems that had been previously thought of as difficult that we now take them for granted. The zipper is an excellent example. The ability to quickly dress and undress, construct garments with utility and thrift and style cloth fabrics into more functional clothing designs was impeded for most of history by the question of closures. Bits of leather, strings, crude buttons, stays and various other primitive devices were used to close a jacket coat or pantaloons. Various closures were invented over the centuries, but the perfection and invention of the simple zipper revolutionized the art, and commerce of clothing production.

The Post-It Note, the paper clip, the staple gun, the Bic pen, fire, the wheel, nylon, champagne, chocolate, the printing press and myriad other inventions that seem so simple and logical today were conceived by “keeping it simple stupid”. Many a millionaire is rich not because of a new algorithm, or advanced spectrometer design, but because they have found a way to improve everyday life.

Occram’s Razor does apply equally to advanced scientific and industrial problems. It is utilized, usually unknowingly, to this day in the high tech world. However, for inventors and entrepreneurs seeking to market their idea, the simple assumption contained in this 700-year old postulation provides invaluable guidance. The answer you seek is probably near, almost certainly contained in your life’s experience.

My consulting firm, Duquesa Marketing, reviewed over 600 products, services and inventions last year. I remain amazed at the creativity extant today. Very few of the 600 will succeed commercially. Many variables effect potential product success in the market place.
Nevertheless, fully a third of these reviews contained exciting creative and marketable elements. Invariably these strong candidates for market acceptance included the tenets of Occam’s Razor. They provided simple, needed features and/or benefits that address needs.

Please feel free to contact me to discuss the article or a project of interest to you. I am a serial-entrepreneur and love to share creative juices with like- minded inventors. Geoff Ficke, 859-567-1609, ,

Winston Churchill’s Famous War Cry Is Fully Applicable for Today’s Entrepreneurs

Thursday, August 27th, 2009

by: Geoff Ficke

“What Is Our Aim? Victory, Victory at all Costs..!

Winston Churchill’s Famous War Cry Is Fully Applicable for Today’s Entrepreneurs

Arguably, the courage and moral leadership provided to the western world by Winston Churchill was the key instrument essential to keeping World War 2 from ending early, and ever so badly for the cause of freedom. The ability to use words as a tool for effecting an outcome was never so vividly displayed, before or since. A demoralized and near beaten people took heart, did not quit in the face of overwhelming losses and turned an imminent route into ultimate victory. This lesson is vital for entrepreneurs to apply to their struggle to gain traction and successfully compete in contemporary markets roiled with competition.

Churchill had spent most of his career as a maligned backbencher in the British Parliament. A prodigious writer, journalist, historian and social commentator, Sir Winston had railed for years about the poor preparation and fecklessness the British military and political castes in the face of the largest, most obvious tyranny in history, Nazism. He was the butt of jokes. Called Sir Whiney. The power structure in Britain had buried this most brilliant of strategic thinkers and visionaries.

Nevertheless, Winston Churchill had the confidence of his convictions and more importantly, a rational, fully rounded understanding of history and the lessons to be learned from studying the past. He studied history and learned from it. He did not just hope that things would go well, or entertain delusions that reason could trump fanaticism. Churchill’s great strength was his crystal clear view of the reality his world faced.

“”What is our aim?…Victory, victory at all costs, victory in spite of terror; victory, however long the road may be; for without victory, there is no survival”. Churchill spoke these words to the British House of Commons on May 13, 1940, after being recalled as Prime Minister, a last gasp hope given little chance of success. At the time the German Luftwaffe was bombing London nightly. German U-Boats had closed shipping lanes, thus disrupting delivery of crucial supplies of war material. The United States was isolationist and almost 20 months away from entering the war; and only then, after the attack on Pearl Harbor by the Japanese. This small island nation, with almost no natural resources was essentially surrounded. France, Belgium, Holland, Poland, Austria, Czechoslovakia, indeed all of western Europe was directly controlled by Hitler’s Nazi hordes. Great Britain’s future seemed dim at best.

This famous quote, heard at the time by the British public while hiding in bomb shelters and in darkened homes over primitive crystal radio sets, provided a turning point for the population. Did the nightly bombings stop? Was food more readily available? Were the shipping lanes more open? Was the Royal Air Force or the Royal Grenadiers any closer to stopping the Nazi’s and returning to the European mainland?

The answer to each of these questions was an obvious: NO!
However, Winston Churchill’s daily chats, broadcast into British homes and pubs, connected with the core of the British spirit. Slowly confidence returned. Resolve was rebuilt. Fight replaced “Peace with Honor” and cowardice. The nation was paying for a generation of neglect, but a corner had been turned and a proud people, with a luminous history, now believed that victory could be earned. It would be a long fight, costly in blood and treasure. The vivid word pictures painted nightly by Churchill motivated an inner spirit that had been slaked by the comforts of modern life and a fantasy that wild-men and terrorists could, or ever would be rational.

Every entrepreneur, no matter the level of success attained, can apply the lessons of history to their quest. Quit and your opportunity dies. Vision is an essential element of success. If you are outworked, failure is assured. The heights to be scaled will be very high, but the reward when the summit is conquered will be very sweet. Obstacles are many, difficult and ever changing. The odds are stacked against success. If it were easy every one would be a success, and a look around any environment provides clear proof that success is elusive for many.

Winston Churchill was the ultimate entrepreneurial leader. Initially, words were virtually his only weapon. His ability to motivate and re-activate spirit was crucial in Britain hanging on, fighting back and finally allying with the United States to turn the tide and win freedoms greatest victory.

The ability to communicate a vision was crucially important to Churchill’s success, and is equally important to every budding entrepreneur’s opportunity to overcome the naturally occurring hurdles imposed by a capitalist marketplace. Drive, belief, passion, courage and creativity are not just seminar or self-help jargon words. They are the building blocks for success that have been essential to win at war, business, politics and life.

I encourage my students and clients to study history. The sins of the past can be more readily overcome if we know what those sins actually were. Sir Winston Churchill is the alpha example of a pro-active leader, facing seemingly insurmountable odds and overcoming with pluck and grit. Each of us, entrepreneur or not, have much to learn from his glorious example.

How to Turn an Ancient Scottish Peat Bog into Marketing Gold

Thursday, August 27th, 2009

by: Geoff Ficke

Many years ago, as a young entrepreneur seeking to launch my very first consumer product, I discovered the importance of having a Unique Selling Proposition (USP) to establish my brand’s niche. My partner and I had developed a very superior multi-use skin moisturizer that we positioned as working in conjunction with a novel loose powder make up. The performance of the treatment and color cosmetic system was far superior to anything on the market at the time. Our hurdle, as always for new product launches, was how to cut through market clutter and make consumers aware of our great new products.

We quickly learned that simply having high quality goods, with cutting edge science was not enough. We had a steak, but this filet was not yet sizzling. What to do?

About that time, there was a discovery of great historical and anthropological importance that took place in Scotland. While working in a peat bog, laborers discovered an almost perfectly preserved ancient cadaver buried in the bog. The peat had apparently provided a shroud that protected the body from decay. The story created an international furor and the corpse became known as Piltdown Man.

People everywhere were consumed with the story and mystery of Piltdown Man. My partner and I, however, were consumed with the potential for using the peat bog preservation story as a key element in creating a USP for our product launch. We reasoned that if Scottish peat bogs could protect a human body from decay for centuries there had to be cosmetic properties inherent in the peat that we could exploit to market our products.

We were off to Scotland immediately. Tramping around the area where the Piltdown Man was discovered, we began to immerse ourselves in all things peat! We visited bogs, met with farmers that harvested peat for garden products and visited with chemists to learn about the unique benefits and properties of peat. As we became more knowledgeable about the amazing preservative properties of peat, the marketing hook that had previously eluded us came into sharp focus.

The source of peat that we used in our moisturizers and skin care products was harvested from a bog in proximity to the Piltdown Man’s grave. Lindow Moss Peat became the key active ingredient that was the foundation for our USP. The inclusion of Lindow Moss peat, and the story about the now well documented preservative powers of Scottish peat enabled us to position our brand to consumers with an exciting, ancient benefit proposition, a colorful tale of the ingredients provenance and believable proof of product performance.

Essence of Time became a best-selling skin moisturizer for many years on the Home Shopping Network, in thousands of cosmetic retailers and was distributed in over 40 international markets. The opportunity that the discovery of Piltdown Man presented to us was fortuitous. We were struggling to discover a strong, unique niche placement story for our product at that moment in time. The linkage that we were able to create between simple peat and our dermal moisturizers resulted in marketing gold for our startup business.

This is the type of USP creation that is absolutely essential to successfully launching new products, services and businesses. The consumer does not need another washing machine, wrist watch or mascara. The consumer will however, desire, seek out and purchase en mass, products that offer novel features and benefits that can be easily understood and accessed.

“Mad Men” Provides a Market Concept Tutorial on Television Each Week

Wednesday, August 26th, 2009

Each episode of “Mad Men” offers a broad palette of the business and personal foibles of the 1960’s. Lots of sexual escapades, drinking, chain smoking, infidelity, professional jealousy, competitiveness, insecurity and deeply buried personal conflicts are necessary elements of the storyline. However, the opportunity to see a marketing master at work each week is another great reason to spend an hour on Sunday evenings with Donald draper and “Mad Men”.

The hit television drama “Mad Men” recently began its third season to rave critical reviews and spectacular viewer ratings. The program, which is focused on the professional and personal lives of the associates of a New York City advertising agency in the early 1960’s is a magnetic period piece, featuring the fashion, lifestyle, dalliances and social interactions of a diverse group of contemporaries employed by the Sterling Cooper Agency.

The pace is languid, but the viewer is drawn to the varied storylines that weave together the pursuit of professional achievement and the wildly divergent private lives that the agency’s employees live out in each episode. As a marketing consultant by trade, I am particularly drawn to the near classic client case studies that confront the staff of Sterling Cooper in each program. The use of real product and corporate identities adds significantly to the realism of the series. Lucky Strike, Proctor & Gamble, American Airlines, Schraft, Campbell Soup, Playtex and Heineken Beer are only a few of the famous corporations and products that provide vexing marketing problems for the team to solve each week.

In particular, I am impressed with the stoic, incisive, probing mind and problem solving that the agency’s Creative Director, Donald Draper, continually produces to soothe client relations or gain new business for the firm. For product marketers, Draper’s resolute search for answers, and his ability to simply, and clearly convey fresh, strategic guidance provides an excellent study in the practice of early Market Concept theory.

Before the middle years of the 20th century, marketing was considered a backwater of business study. Manufacturers had adopted a “sell as much as you can” strategy which did not recognize the reasons individual purchases were made or the importance of building consumer and distributor relationships. The Market Concept theory, which came into popular use in the 1950’s and 1960’s, suggested that the producer should FIRST know the consumer or buyer of a product, research what they want, and only then, design, produce and market the item to fulfill that well researched need. This was the reverse of prior beliefs that simply producing a product would drive sales.

Market Concept acceptance lead to a rapid expansion of study and research on consumer preferences. Demographics, target audiences, focus groups, test marketing, branding, product loyalty and sales models all became important tools for product marketers to utilize when introducing new goods and services.

Donald Draper is a master at practicing the art of Market Concept. In a recent “Mad Men” episode for example, he was faced with a recalcitrant Heineken Brewery management team. The famous Dutch brewer was not present in the American market in the 1960’s and believed the brand could only gain a foothold through tavern sales of draft brew. Draper astutely sold the idea that a test market, in select exclusive neighborhood supermarkets, supported with end cap displays, premium pricing and co-marketed with upscale snacks, would drive sales by appealing to housewives desire for a more exotic product.

The test confirmed the assumptions that Donald Draper had identified in his analysis of Heineken’s problems. As a draft product sold in taverns, it was just another beer, a commodity. By targeting housewives, trend makers, the beer could be positioned as an upscale offering, different from competitors, more desirable and exclusive. Heineken enjoys this market niche to this very day.

Each episode of “Mad Men” offers a broad palette of the business and personal foibles of the 1960’s. Lots of sexual escapades, drinking, chain smoking, infidelity, professional jealousy, competitiveness, insecurity and deeply buried personal conflicts are necessary elements of the storyline. However, the opportunity to see a marketing master at work each week is another great reason to spend an hour on Sunday evenings with Donald draper and “Mad Men”.

Why Successful Entrepreneurs Are So Darn Lucky!

Tuesday, August 25th, 2009

by: Geoff Ficke

What is your definition of the word “luck”? Not the Webster’s Dictionary definition, your definition. Is it being in the right place at the right time? Picking the right dealer in a casino? Turning up at a party where you meet your current wife (could be good or bad luck)?

Entrepreneurs seem to be so lucky, so often. People see their success and attribute much of their good fortune to luck. What luck that they thought the idea would work. The luck of the Irish for old Doyle, don’t you think? It was his great good luck to file that patent when he did.

The passengers in life attribute so much of fate and successful outcomes to random luck. “Lightning strikes for others, just never me,” is a bromide that covers the view of people that are perpetually success challenged. The masses that think like this can not see, or comprehend, that luck has little to do with achieving real success as an entrepreneur.

In business, luck is created. Luck generally evolves from capitalizing on a risk taken. Entrepreneurs are not passengers: they are drivers. The drive to succeed and overcome obstacles inherent in attempting to create any new business requires drive, courage, and passion. Not luck!

This is not to say that luck never occurs and is not appreciated. It does occur and it is appreciated. However, when luck rears its happy face it is usually the confluence of hard work bumping into opportunity! If an entrepreneur accidentally bumps into a funding source while enjoying a latte tomorrow morning at Starbucks, is this luck or the result of a business proposition that is properly seasoned?

My experience is that entrepreneurs create luck by stirring a unique brew of personal qualities. Some or all of the following traits are obvious, in every success from the Wright Brothers to Mary Kay Ash. These qualities are the true ingredients required that make luck occur.

Every entrepreneur is perpetually afraid. The fear of failure is palpable. They can not stand the thought of failure and will do anything possible to avoid it. The need to succeed is demonstrated in a confidence that they develop in their novel product, their ultimate success, and the benefits their product will produce for consumers. Confidence smothers fear. Fear creates inertia. Failures are always afraid, to try, to fail, to be criticized. The confidence necessary to succeed in a brutal marketplace is earned through hard work, study, preparedness and finding answers to obstacles.

We all have doubts. However, successful entrepreneurs overcome fear and doubt and grow in confidence as they master their task. The confidence earned is a great key to attainment of success. There is no luck involved.

Learn From Mistakes
My first sales manager had only three basic bits of wisdom for a youngster starting out on a sales career:
1. Make all of the mistakes you must, once!
2. Study and learn from each mistake you make!
3. If you are torn between choices, and face a choice that might lead to a mistake, make the most aggressive choice!

Everybody makes mistakes. Coca-Cola brought out New Coke and almost murdered a world famous brand. Merck was seriously harmed by the failure of the prescription drug Vioxx. What was the Ford Motor Car Co. thinking in 1958 when the Edsel was introduced? There was the matter of a President of the United States and an intern. Pete Rose has lost his almost certain place in the Baseball Hall of Fame over gambling.

The key is not the mistake, but learning from and not repeating the mistake. The only way we avoid mistakes (almost impossible in all but the most sedentary lives) is to never try anything new. Entrepreneurs are always going to try. The successful ones make aggressive mistakes, learn from their errors and this minimizes the probability of repeat errors.

A baseball player is considered a star if a .300 batting average is achieved. This means that failure is a result 70% of the times they bat. Players hate to make outs. No one could succeed at baseball unless they seek and obtain a psychological comfort zone that enables them to filter and balance the mistakes in making outs, and the positives they learn from making a base hit.
After an out is made, players can not wait for their next trip to the plate to get another chance. This is the way entrepreneurs think after a mistake is made.

A Congressman drives while drunk, crashes his car, hits a parked police vehicle and then claims amnesia. Did the dog ever eat your homework? The NBC television news magazine 20/20 has run several shows showing men using the internet to organize meetings hoping to conclude a sexual encounter with very young girls. The men, caught in the act, always deny intent, knowledge or responsibility. The top executives at Global Crossing, Enron and Adelphia scandalously bankrupted their huge businesses, costing thousands of employees their jobs and pensions and millions of investors lost their investment in equity in these firms. And yet, none of the accused executives knew anything about what was going on (they claim) inside their businesses while they were taking tens of millions of dollars in annual compensation. Responsibility is an endangered quality in a modern world that has embraced the psycho-babble of endless victimology!

If I was the Earth Czar, and could re-engineer one physical feature of the human body, it would be this: the palm of every human being’s left hand would have a small mirror permanently attached. And everyday, several times per day, we could look at the mirror and see the reflection of a man, or a mouse. Successful people, including every fine entrepreneur I have ever known, assume full responsibility for every decision that they take. The assignment of blame on another person, or an outside condition is a diversion.

As human beings we have the unique ability to make choices, free will and the ability to reason. These tools are denied every other form of life. A lion or a fruit fly operates solely on a pre-programmed set of instincts. A lion is nor responsible for what it kills. It is on earth to kill. However, if a person kills, they are solely responsible.

Entrepreneurs assume full responsibility for their success, and failure. The luck so many would subscribe to a successful entrepreneur is actually a manifestation of the ability to make reasoned decisions and abide the consequences of those choices.

Imagine a boy, dreaming of playing and starring at professional football, and suffering 10 years of indignity, disappointment and failure in trying to achieve this goal. After an average high school career, playing in a rural town with no exposure, he is not offered a single scholarship to a Division-1 NCAA school. He plays for four, largely undistinguished years at a small school in Iowa. After graduating, the National Football League does not draft him and he is not offered a free agent tryout. He goes to work in a super market and catches on with an Arena Football League team. The pay per game is $400.

Interestingly, his growing success in the Arena Football League over several seasons makes his name at least a point of conversation in one NFL office. He is scouted, thought to be a bit too old but maybe worth a test in NFL Europe. After one very successful season in Europe, he is invited to a NFL training camp. As camp began, he was listed as the fifth quarterback on the team’s depth chart. An injury to a quarterback, then another quarterback injury, and now third on the depth chart, he has realized his dream. He is signed to a contract.

Now the tale could end here. He is a real NFL quarterback. Goal achieved. However, our struggling quarterback has persisted and now that he has made a team he wants to play, and knows, really knows that he will be a star if given a chance. It takes another season, a few more injuries and he gets his shot. At the age of 28 he leads his team to a Super Bowl championship, is the league Most Valuable Player, is named All Pro and signs a multi-million dollar contract.

Kurt Warner, our quarterback, is the most unlikely of football successes. Every college team, every scout and every professional team missed on him. In a sport where players are computer rated, graded, tested, weighed, timed, quizzed and probed from high school onward not one assessment rated him a player of potential. And yet, he is one of the best players in professional football.

Perseverance can not be taught. Some people quit at the first sign of trouble. Edison tested over 1000 versions of the light bulb before he perfected his invention. Kurt Warner would not listen to the experts telling to get on with his life’s work and that work would not include football. He made his own luck through work, sweat, sacrifice and perseverance.

Keep Business Operations and Logistics Simple, Streamlined and Agile In Your Business Plan

Tuesday, August 25th, 2009

by: Geoff Ficke

Most of the entrepreneurs we interview in our consulting business have a very unrealistic conception of what excites and disappoints investors. The dream of many inexperienced inventors seeking to fund their opportunity is to build a substantial infrastructure. Their business plan identifies the need for factory space, equipment, staff, and many other fixed costs.

Investors want to see a plan that maximizes return on investment. High fixed costs are the enemy of a great profit margin. When business turns down, and it always does at some point, fixed cost assets become liabilities and must be continually fed, even as income declines.

Always present decision-makers with the most streamlined operations plan possible. Do not confuse grandiose staffing and equipment wants with actual needs. In today’s business climate, almost every possible service can be rented, leased, farmed out or performed by contract manufacture. A 25,000 square foot factory that is not running at 100% capacity is an under-performing fixed cost asset, especially if a private label manufacturer will provide the service at a competitive price. The cost to rent, power, insure maintain and staff the facility is ongoing and will be a drain on the bottom-line.

Investors want to see a lean operation with no fat or excess. They will always be open to adding costs as growth and sales traction begin to kick in. Initially, the entrepreneur needs to display that he or she will be a prudent shepherd of the investment required to startup the enterprise. Here are a few areas where fixed costs can be avoided and potential investors greatly impressed.

An opportunity killer is a funding request that includes money to buy a facility, office or plant. No startup can accurately pinpoint the growth (or failure) rate of a brand new business. Investors will want to see a plan reflecting realistic goals and space requirements. This almost always means renting facilities until need demands a purchase of facilities.

There are almost no good reasons for a startup to manufacture their own product. Possibly, if there is a very valuable trade secret involved, but not often even in that case. All contract manufacturing should include a Non-Disclosure Agreement (NDA) as part of negotiations. Contract manufacturing is available and utilized in almost every industry today. Estee Lauder manufactures almost none of the many cosmetic or fragrance products they market. Liz Claiborne and Calvin Klein make none of their apparel. Ikea sells only furniture made in third world facilities.

All of these companies, and many more, realized long ago that manufacturing was better left to factories located where labor, raw materials and government rules were not stifling. These companies concentrate their assets on research and development, design, sales and marketing. So should every entrepreneur seeking to succeed in obtaining investment.

Every entrepreneur should be able to aggressively market and sell their product. However, no single person, or small partnership, can be in front of every customer that will potentially be interested in purchasing the product on offer. The investor will want to know that there is a sales strategy that offers an excellent chance for success.

In the area of sales, there are industry specific sales representatives: manufacturer’s representatives and agencies available to sell an interesting, market ready product, on commission, within their industry. Commissions are typically standardized within each industry. The gift industry is 15%. Food products are 3% and up, depending on the volume a product can reasonably be projected to achieve. Industrial products are 2% to 5%. Historic profit margins dictate commission rates.

When using sales agents, the entrepreneur should manage the sales force as if they were salaried employees. Weekly calls to review goals, promotions and upcoming meetings. Write letters and e-mails pointing out other agent’s successful achievements. I have used commission sales agents for many years, and recommend them to most of my clients.

I make as many key- account sales calls as possible with my sales agents. If it is my product, I want to control big presentations, even though I will pay a commission on the sale I have principally generated. I attend as many sales meetings as possible. The more I can meet, learn and know about my sales teams activities the better I will be able to motivate, train and energize them.

When commission sales agents do not sell a product they are not paid. This obviously minimizes fixed costs. However, you will want to pay the largest amount of commission as possible. Healthy commission checks mean a very healthy sales base.

As a very young National Sales Manager for Vidal Sassoon Hair Care Products I was confronted with a problem. Our sales had exploded. Growth was so rapid and market acceptance of the Vidal Sassoon brand so overwhelming that our commission payments likewise accelerated to the point that my top management became upset when commissions exceeded their own salaries. “Don’t those guys work for us, why do they make more than the owners”, they asked?

I faced a difficult situation. I offered two options: cut commissions or fire the commission agents and hire a company employed sales force. I reckoned that if I could get sales coverage for 8% cost of sales (including salaries, benefits, travel, etc.), it would make sense to make the transition. Cutting the commission rate would displease the agents and I did not want to risk losing the excellent momentum we had developed.

Very surreptitiously and quietly I interviewed and hired a team of key regional sales managers and we quickly executed a plan of conversion that top management had signed off on. Vidal Sassoon was at the point in their business development that a company owned direct sales force was needed and justified. However, it was a concern as we were greatly increasing our fixed overhead.

Entrepreneurs should focus maniacally on sales growth. Sales are Job #1 in every company, especially a new venture! Be very careful in constructing sales coverage that will support the growth you project while not choking cash flow with a very high selling cost.

Hopefully the entrepreneur, or a member of the management team, has marketing experience. If not, the answer is often to hire a consultant. An experienced consultant will save time, money and mistakes. Be sure that the consultant being considered has current industry specific experience, strong references and a transparent history of success.

I never recommend for a new venture to handle their own logistics (warehousing, pick and pack, shipping, billing, etc.) Dealing with shipping, handling, conditions and the terms necessary to satisfy retailers is daunting. Big box stores such as Kroger, Lowes and Wal-Mart have exceedingly complicated inventory control systems. Special, very expensive software is needed to communicate and expedite receipt of goods.

On average, I can have my inventory warehoused, packed and shipped for about 4% of my selling price (depending on volume). If business is seasonal or slows down I do not have to pay high fixed costs, just a percent of the shipments total invoice amount. If business is booming, my contract fulfillment warehouse ramps up hiring. A good contract warehouse offers a complete menu of services that I can pick and choose from as needed. Their systems will be sophisticated enough to handle the most demanding purchaser of my product.

The first time reader of a business plan typically has a strong reaction, positive or negative, to the overall document. A negative result usually occurs when the Executive Summary contains references to high fixed costs. A positive verdict is more probable when the entrepreneur indicates in every way possible that they are solely interested in maximizing profit and return on investment, not building a colossal infrastructure that will bleed the enterprise dry if all does not proceed perfectly and assumptions are not realized.

The 16th Century Entrepreneur Who Created the Concept of the Taxi

Tuesday, August 25th, 2009

by: Geoff Ficke

The 16th century was a time of amazing transformation in Europe. The Dark Ages were gone, the Black Plague had run it course and Middle Age fears and superstitions were slowly disappearing. The printing press had been invented and it was completely revamping the way people communicated. Columbus had discovered the America’s and the great age of exploration was in full swing. Medical advances, the Reformation, the creation of the great Italian banking houses and the Dutch trading companies had completely changed the way people thought, worked and worshipped.

And yet, there was one area in which there had been virtually no advance since the time of Christ: transportation. Horse or mule, horse drawn carts and boat were the methods of travel utilized to convey people, goods and foodstuffs. Travel was slow. It was uncomfortable. And, it was often very dangerous. Brigands and pirates faced little in the way of organized policing. A bandit pretty much had a field day during the period.

Of all the difficulties a traveler faced, the most frustrating by far was speed: or the lack thereof. As the great Florentine, Venetian and Genoan merchant banks financed warfare, fleets, crops, expeditions and colonization, they had to continually factor a risk premium into their risk/reward computations before settling on the interest to be charged on each loan. The slowness of receiving news of progress, success or failure on the status of an investment vehicle was agonizing to all parties participating in an enterprise. Did the fleet sink, or is it close to home with a valuable cargo? Has the battle been engaged, and who won? Was a new land discovered, and what did it offer in minerals or trade goods as materials for profit?

Knowledge is power, and speed provides the edge that makes this power so important. If I know today, what my enemy or rival will not know for several days, I have a decided advantage on strategizing to my advantage and profit. In the 16th century an industrious Belgian family developed the first international service to address the ages old problem of slow communication.

The Tassis family had obtained the rights to handle a rudimentary postal service in several Duchies in what is now Belgium. The service promised a decent living for the Tassis family by the standards of the time. However, they wanted to do more, expand and create a service that could become the international standard.

The Tassis family divided the work responsibilities between family members and had them disperse throughout Europe. The key to their success was a cohesive, standardized system of fleet horses, experienced, responsible riders, a network of terminals to change horse, rider and re-route mail and packages, and scheduled delivery times. Spain, France, Italy and Germany were little more than a polyglot of feudal city states during this time. There was no central government to handle a service like mail delivery that we consider routine today. The opportunity for a private company to organize and manage an international operation of this import and scale was a wonder.

The Tassis’ received contracts to handle the delivery of mail throughout most of continental Europe. From Naples to the Danube, and Gibraltar to Copenhagen, the family built a delivery network that managers at DHL, UPS, or FedEx would admire and recognize today. A treaty, legal contract or purchase order that took five weeks to reach Genoa from Madrid, could now be delivered in seven to 10 days. As the loads increased the price was lowered and this only accelerated the use of the service.

The family became rich, powerful and across Europe became members of the aristocracy. The name Tassis in the German language is spelled “taxis”.
Today, everywhere in the world, people call for a taxicab when they need to transport themselves for a fare. The taxi service created by the Tassis’ was an important part of the development of the Renaissance.

The Tassis are responsible for one of the most elemental and important service enhancements in history. The ability to accelerate the movement of important commercial, legal and governmental communications enabled decisions to be made more quickly and on a grander scale. The entrepreneurial innovation that the Tassis family introduced enriched their family, business, government and, most importantly, the working class that benefited so much from the rapid expansion of capital and trade. Even today, we can still learn from the historical record that the ability to offer a novel new benefit pays off in so many ways.