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Building an On-demand business in the shadow of Uber – 7 lessons learned

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Building an on-demand business is fast moving, challenging and exciting. I recently had the exciting opportunity to join and help build an on-demand transportation startup from proof of concept (PoC) to live in several markets. In my role as interim president of iCars, I learned valuable lessons about scaling an on-demand service. It was an amazing experience competing in the same space as the most well funded startup in history, filling a market niche and driving demand.

  1. What Is Your Why? Your business exists to…? If you don’t have a clear answer to then huddle and get clear on it. Passionate focus on mission is essential and lack of clarity will hurt you
  2. Be Clear on Your Target Market: We focused on providing exclusive ground transportation services for discerning clients of luxury hospitality brands and corporations. We launched with several major hotel brands. When asked if we were like the 2 big B2C services, we were clear that our future reservation app delivered exclusive professional black car services with insured, trained, professional chauffeurs. We focused on being the best in our niche and not to compete with a general market product. Our clients appreciated that clarity of mission and service.
  3. You are NOT Uber: I met so many on-demand companies that are “the Uber of (fill in the blank)”. Sorry you’re not worth $70 billion, you don’t have 1,500 engineers. Hyperbole will kill your credibility with clients and investors. Focus on your strength and execute well.
  4. Scale Your Tech Before You Need To: Our initial product was a great proof of concept. To prepare for live, multi-city customer demand, we worked hard to build and scale. Your tech must be ahead of your growth curve because when things take off, it’s hard to catch up to your “tech deficit”. Your team needs to use your product in real world “voice of the customer” testing.
  5. Clarify Your Customer Care Plan: What happens when someone complains? What is your internal service time expectation? What are your customer satisfaction KPIs? Is your escalation process clear? How do you handle credits, refunds, comps? This is important stuff that can’t be ambiguous or left to the intern to figure out. Remember, your customer won’t give you a 2nd chance.
  6. Build Your Marketing Execution Plan: Our business was focused on B2B2C and our primary focus was attracting demand of hospitality and corporate clients. We also needed quality supply (chauffeurs) and recruiting, training and retaining them was a major competitive advantage. Both of these items drove our top of funnel revenue plan. We planned and executed specific content and GTM strategies for both sides of our market. You can always grow your tools as your scale. Marketing execution is key for sales success.
  7. Build a Winning Team: Find passionate people with great attitudes who believe in your mission. You can train for skills. Your culture can’t thrive without great people. There’s been so much written on effective management — here are 2 posts on how to be a good manager and how torecognize and fix bad management issues.

Building a live market place requires focus, clarity of purpose, clear messaging and great execution. Being successful requires being nimble, taking your customers’ and partners’ feedback, course correcting and always improving. If you do these things well, your odds of growth and success will grow too.

Facebook’s New Focus – Why Sales NOW Matter More Than Engineering

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There was an interesting post in Forbes by columnist and author George Anders on February 10th that Facebook’s most popular hiring area is now sales and business development people, not engineers. Why he’s suprised now that the company is valued at $150 billion is frankly a suprise to me and I’ll explain why. Facebook is – at its core – a media business. Even though they live on Hacker Way they might as well live on Madison Ave or Broadway in New York.

He states with some suprise that “What Facebook craves these days is people who can sell” citing 170 open bus dev and sales positions on Facebook Careers page vs “97 more software engineers, another 78 infrastructure specialists, and 51 data/analytics experts” He further concludes that, “fast-growing Facebook has some openings in every section. But the demand for extra people is most intense in the time-tested world of sales.”

With all due respect Mr. Anders, this should be NO suprise at all. Here’s why:

  1. Facebook IS a media company. Technology drives its media business, but from a business perspective its a media company first and foremost.
  2.  The growth of traffic is only important from a valuation perspective if it can be monetized. Otherwise you look like Wikipedia with tons of traffic and public requests for support to bail out the company as it can’t figure out how to make money.  (This is fine unless you run afowl of government regulations like they just did in Finland) Both are media companies but Facebook figured it out. With Sheryl Sandberg at the helm with experience from Google’s monetization engine, the ship was redirected from just doing “cool stuff” to monetizing the amazing traffic and selling like crazy. Mobile advertising went from 0 to 45% of revenue in just a year. In October 2013, they widely rolled out Custom Audiences and have developed deep advertising and partner relationships with key brands, agencies and publishers.
  3. Major revenue growth with brands and agencies is still built on building and growing trust-based relationships. The day when ad sales are completely run by programmatic buying then this will change. In the meantime, humans need to convince other humans that huge investments in media are prudent, wise and worth trying. After the initial spends, growth is based on strategic deals laying the foundation for future growth (see my earlier post on this topic)

Facebook faced much early criticism about ignoring clients and telling them to go “read our blog”. Those days are past and Facebook needs to remain innovative and nimble so it can be a great media company without getting bloated and fighting irrelevancy like the big NY boys of TimeWarner and Viacom.

What do you think?

(Photo of Facebook CEO Mark Zuckerberg: by Robert Scoble Flickr/Creative Commons)

Media Agencies Need Context for Content, and Relevance Starts with Social

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The iMedia Agency Summit in Scottsdale December 8-10, 2013, offered an opportunity to meet with some of the coolest agencies to hear more about what’s hot in digital marketing. Our own Mark Fiedler, VP Business Development and Sales for Cubeyou, was on hand to meet agency executives and hear what they had to say about trends in new digital marketing strategies.

Q: The theme for this year’s iMedia Agency Summit was “Media Re-defined: What Clients Want.” What were your takeaways after three days? What do clients want?

Mark: The big takeaway for me was that everyone is looking for an agency that offers differentiation in their strategy and media approach. There is less emphasis on display and search and more on social and video and while all these elements are important, what agencies are realizing is that media is more than demographics.
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Entrepreneur and CEO trap: What You Don’t Know YOU Don’t Know

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I had conversation last week with a client who considering options to solve a pressing management issue. He had spent a lot of time researching and outlined a clear SWOT analysis of the issue. After carefully considering his 2 choices, he decided on his 2nd option.

I asked, "what about option 3 – it's a blend of the 2". He looked at me and thought for a moment and said, "But I only have 2 option." "Really?" I asked. "Option 3 can solve our issue without the risks you outlined in the 2nd option." His realization forced him to reconsider the entire issue and the next day (you guessed it) he went with option 3. This was a clear example of the biggest danger: He didn't know WHAT he didn't know.

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