As a recent college graduate with no marketing sense whatsoever, way back in 1982, I heard a story on NPR about the new coffee-shop craze hitting America. The announcer described the typical venue, a selection of coffees and some light pastry fare. They were compared to a Viennese Coffee House from the turn of last century. Interesting I thought until the radio announcer mentioned the coffee was going for $0.73 per cup and, pausing for effect, no refills. I had to laugh having just left a donut shop in my neighborhood where I had a couple of donuts and three cups of coffee for total of $0.54, the refills were, of course, free.
But the joke was so on me. No one goes to a coffee shop for an economical coffee. The stuff at home is really cheap and most work places offer it at no charge. Folks go to coffee shops for the same reason they pay top dollar for alcohol at a bar, for the experience, that human need for collecting with like minded humans, to be seen, for a change of scenery.
This is an important understanding for a shop owner. Customers will pay the premium for the experience. The product is a backdrop, an excuse. The coffee or tea or beer or wine is an excuse, a focal point for the experience. The shop owner is very much like a theater owner. You as shop owner are providing a place, a reason to gather. Charge accordingly.
Charging accordingly is another point to consider. The $3.00 happy hour Guinness I had at the local Irish pub was exactly the same product as the $9.00 Guinness I had literally on the other side of the parking lot at the fancier rooftop bar. The decor appeared to cost about the same. The atmosphere, however, was way different. As an owner, you have to decide what market you're after, high margin but fewer customers are the larger market not willing to pay the premium. These two bars made their claim and both seem to be doing quite well.
As for the customer, they may head to the upscale place to meet folks in a similar economic group. They may be looking for a wealthier husband or well funded cougar. I tend to find the patrons at the $3.00 Guinness bar friendly, less pretentious and more honest than the trendier upscale place. So, I hang out there. You may feel more comfortable with Kennedy's and Bushes at the other bar. Point is, the booze is secondary to what motivates the customer. Understand this and compete accordingly.
Friday, September 27, 2013
Thursday, September 26, 2013
Fear and Motivation
I work out of a co-working space in CT where we view weekly TED talks and discuss the topic later. Great social practice and for overall entrepreneurial health. Our last one was about motivating workers. I came away with this perspective; there's no single motivating factor for any one person. But there are motivational areas to consider when attempting to motivate a person. Here's my current and sure to be expanded list.
Love & Appreciation
Who doesn't want to be recognized for what they do, for how smart they are for their individual contribution. Our discussion group pondered if this was the only motivating factor. In the end we had to concede that it might be the most motivating factor, but life, requiring cash as it does, would soon wear off the shine of appreciation. At some point, maybe not immediately, the manager will have to back his or her appreciation on a more tangible way, preferably with cash, company car, whatever, just as long as it has value to that person. And this applies to private life as well. I'll do anything for my family. But I'm rewarded a thousand-fold with love and appreciation, no matter how lame my intentions end up.
Job Satisfaction
Sure, doing what you love is great. But if it doesn't put food on the table, it's a hobby. An employee will excel at what they love and are great at. And a good manager will be keen to provide plenty of praise. But, as in the above example, that employee, without proper reimbursement, might stop liking that job so much.
Money
This may the primary motivational factor for many people. After all, with money, you can compensate like a S.O.B. for a lousy unsatisfactory job. But, if you spend most of your day at your job, most of your life not spent sleeping, even the money will look less rewarding. There's still that human quality of desire for the above two items. I can honestly say that after 41 years of working, I've never met anyone who was satisfied with only the cash. This might be because no one has ever made a bucket unless they have the other needs satisfied. Money tends to follow folks who love the way they make it.
Fear
This is the saddest of all motivational factors. Fear of rejection, fear of loss of respect, loss of money and country club status. It's related to the above motivations, but from a different perspective. People who are motivated by fear are motivated from a position of having made it and are afraid of losing it. Its real difference is in its motivational power.
By example, I recall having this fear as an oil industry micro-paleontological consultant. I expressed a fear to my new wife that if things didn't improve, we might lose our big house on Lake Pontchartrain in New Orleans. She was busy with a cross word puzzle or something equally important and simply said, "so we'll get a smaller house" and continued with her greater word choice concern. My motivation turned from fear of loss to desire to provide for her... a much more motivating factor.
Bottom line, motivation is a complicated thing for we complicated humans. All the factors mentioned above apply in different degrees depending on the individual and their personal history. A good manager will learn what he can of the person and apply techniques as needed. The best managers will do this not for productivity's sake, but as fellow human being caring for another. THJIS approach is, in my humble opinion, the one most likely to generate the greatest results.
Love & Appreciation
Who doesn't want to be recognized for what they do, for how smart they are for their individual contribution. Our discussion group pondered if this was the only motivating factor. In the end we had to concede that it might be the most motivating factor, but life, requiring cash as it does, would soon wear off the shine of appreciation. At some point, maybe not immediately, the manager will have to back his or her appreciation on a more tangible way, preferably with cash, company car, whatever, just as long as it has value to that person. And this applies to private life as well. I'll do anything for my family. But I'm rewarded a thousand-fold with love and appreciation, no matter how lame my intentions end up.
Job Satisfaction
Sure, doing what you love is great. But if it doesn't put food on the table, it's a hobby. An employee will excel at what they love and are great at. And a good manager will be keen to provide plenty of praise. But, as in the above example, that employee, without proper reimbursement, might stop liking that job so much.
Money
This may the primary motivational factor for many people. After all, with money, you can compensate like a S.O.B. for a lousy unsatisfactory job. But, if you spend most of your day at your job, most of your life not spent sleeping, even the money will look less rewarding. There's still that human quality of desire for the above two items. I can honestly say that after 41 years of working, I've never met anyone who was satisfied with only the cash. This might be because no one has ever made a bucket unless they have the other needs satisfied. Money tends to follow folks who love the way they make it.
Fear
This is the saddest of all motivational factors. Fear of rejection, fear of loss of respect, loss of money and country club status. It's related to the above motivations, but from a different perspective. People who are motivated by fear are motivated from a position of having made it and are afraid of losing it. Its real difference is in its motivational power.
By example, I recall having this fear as an oil industry micro-paleontological consultant. I expressed a fear to my new wife that if things didn't improve, we might lose our big house on Lake Pontchartrain in New Orleans. She was busy with a cross word puzzle or something equally important and simply said, "so we'll get a smaller house" and continued with her greater word choice concern. My motivation turned from fear of loss to desire to provide for her... a much more motivating factor.
Bottom line, motivation is a complicated thing for we complicated humans. All the factors mentioned above apply in different degrees depending on the individual and their personal history. A good manager will learn what he can of the person and apply techniques as needed. The best managers will do this not for productivity's sake, but as fellow human being caring for another. THJIS approach is, in my humble opinion, the one most likely to generate the greatest results.
Monday, September 16, 2013
The Advantage of Being Flat Broke in Entrepreneurialism
Let’s start with the advantages of having a ton of resources at your disposal. Wouldn’t it be great to have a cool office, a secretary, the best equipment available and a salary to keep you going? Think of how you could get things done. Sweet, huh?
Maybe, but that luxury comes with a price in the entrepreneurial world. Salaried, well-funded blokes and dames aren’t forced to bootstrap. That means they aren’t forced to build a very efficient business. They tend to keep everything close to the vest and rarely seek valuable collaborators that can further a businesses efficiencies and add value through their unique perspectives. And with a desperation-mitigating salary, they tend to leave work earlier and lunch longer.
Another issue is focus. Broke blokes and dames can’t afford to lose it. They don’t chase after anything outside of greatest potential. They can’t afford to.
I’m reminded of my geology teacher/ successful oil man professor who told his students that if they want a good job, go for the master’s in geology degree. Downside to that, he added, was that the employer would pay them just enough to avoid risk. Start working with a BS in geology and you’ll be happy to, maybe even forced to seek revenue anywhere you can. His most successful students did just that.
Having said that, money is needed at some point. But dough seems to follow the aggressive, lean, well organized, well-networked businesses. If you need $3 million to market your business, make sure your business can get it and demonstrate that it has the organization to spend it wisely, effectively. The broke entrepreneur is great at building this type of fundable business. Demonstrating this ability is part of the lean startup DNA.
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