For a recent project, I needed to re-create some corporate pages on wordpress. WordPress needed to run on a separate server, with just the right version of PHP, and all of the customizations required to make it look sharp required a contract developer. I thought wordpress was supposed to make self-publishing a website easy? The whole process seemed way too hard.
Is there another service out there that I should know about? Maybe wordpress is not for me.
FMFD is my own acronym for Founder’s Magic Fairy Dust*. I’ve seen the fixation on FMFD many, many times, and the frantic search for Founder’s Magic Fairy Dust can easily derail a young company (or otherwise severely impair its sanity and health).
It begins innocently. The start-up founders have a grand plan, which includes a brilliant strategy for viral (or cheap) customer acquisition, outstanding retention and engagement, high conversion rates, and respectable LTVs.
Then reality happens. Things don’t go exactly as hoped. And the frantic search for sweet and elusive FMFD begins.
As a VP of Marketing (or interim CMO in a consulting capacity), I have often had to “manage” founders in their fevered search for Magic Fairy Dust — they want to find some FMFD ASAP and sprinkle it on their start-up to “get them back on plan”.
The urgency that the founder(s) demonstrate in searching for FMFD is often inversely proportional to the amount of real marketing expertise and/or deft product management skill that the founders possess. In the worst cases, these competencies are viewed as simple functions that can be debugged or quickly re-worked and restored to the expected trajectory.
Stated more clearly, the founder(s) under-estimate the expertise and organizational commitment required to deliver a compelling product experience and/or marketing competency to propel the company into a period of high-growth. And panic ensues.
Other factors that correlate highly with a twitching, hyperactive search for FMFD include:
It’s easy to sound whimsical about it, but this belief that FMFD exists and is findable has a very similar fall-out to substance addiction. There is denial. There is paranoia. There is panic. There is second-guessing of those around you. There are gripping pangs of hopelessness and self-doubt. And sometimes a palpable sense of desperation when the new ideas about where to find the FMFD suggests places that are really hard to reach with the resources you’ve got.
Every company must make adjustments and iterate, casting about to look for fractions of a percent wherever they can and even find a little magic. In fact, that iterative mindset of test and control and iterate to improve is absolutely critical to success. But not when you pin all of your company’s hopes on endless little tweaks in lieu of a product experience that impresses and delights users and marketing discipline with some horsepower. There is no replacement for sitting with 20 people, one at a time, as they experience your product for the first time. Or investing the time to optimize for search crawlers. Or isolating and optimizing all of the variables in your paid search campaigns. Or really obsessing over the new user on-boarding paths, messages, and touchpoints. Or leveraging the social graph with the right placement and subtlety. Or mining the database to draw correlations and insights from sequential user cohorts. And so on, etc … it’s all hard work, but it represents a foundational competency on which a young company can build a learning curve and growth curve.
That’s why the mirage of FMFD is so enticing: if it was real, it would relieve the company of lots of grappling and intensive work and cash burn. The allure of a sprinkle of FMFD to knock down the projections is more attractive than doing all of the rigorous push-ups to get strong enough to wrestle them to the ground.
*FMFD might also be known as “silver bullet”, but my resulting acronym is not as cool
Coincidentally, I’ve had separate conversations with several very talented people in the last week who seem to acknowledge that they are capable of “doing more” professionally if they pursued their own start-up — i.e. more excitement and fulfillment than they have now.
Their reasons are varied: two are very comfortable and not working too hard in their current gig, and a start-up would mean working harder, sacrificing play time, and less short-term income. Another of these folks would embrace the work that a start-up entails but has a deep anxiety about “cutting the cord” of a reasonably dependable paycheck from an employer. Yet another has a fragile ego and fears failure, while also seeming rather daunted by the amount of work that they would need to embrace.
If they never grapple with these issues and find a way to resolve them, I think each one will regret it.
And if they finally do, and they make the commitment (and the corresponding lifestyle changes), I think they’ll be happy they did.
Why? Because in my opinion, nothing beats demonstrating to yourself that you will follow your dreams. Success or failure is rather irrelevant; it’s hard to find an entrepreneur behind a financially unsuccessful venture who claims to regret the endeavor altogether. It’s because they’re proven something to themselves, and likely learned more than they would have if they’d stayed on their path of inertia.
If anyone reading this has any insight to share on “making the leap” in venturing out for the first time with a start-up, I’d be pleased to hear them.
It’s not often in that one has the opportunity to experience, in a corporate setting, the power of an talented team inspired by a common purpose.
When you get great talent together, and assemble them around a shared goal, and synchronize the effort efficiently, it’s like magic. It’s a special mojo and it’s awesome to be a part of it. It’s unlikely to happen in a big company with politics and management levels and turf battles and legacy products and egos that gum up the works.
In my opinion, Livemocha evolved into the kind of company that fulfills the promise of what start-ups can be and what they can do. Innovation every day. People who really care about building a best-of-breed experience, and drive hard to deliver what customers want. Working together, moving nimbly, accomplishing amazing things on ludicrous timelines.
Livemocha is pursuing some very lofty goals, and a lot of hard work has gone into it. I [was] really proud to be a part of the team each day.
It’s pretty exciting to see what my friend Ryan Spoon is presiding over at Dogpatch Labs in SF. Unfunded companies can incubate their new ventures there at no cost, even if they are just at the concept development stage. Ryan is a really smart guy and it seems like he’s created a great vibe there.
Check it out:
http://ryanspoon.com/blog/2010/09/21/robert-scoble-building43-visit-dogpatch-labs/
If they like your site, they will come back.
If they like your site, they will tell their friends.
What will make people like your site, tell their friends, and come back repeatedly?
What does your site do better than anyone else, making your site worth coming back for?
Although I my expertise is strongest in Internet marketing, this little lesson is applicable even to businesses that have no Internet presence at all. It’s the story of Coupon Crack, how you get hooked, and why you should avoid it.
Back in 1999, I was leading customer acquisition at Half.com, an e-commerce marketplace where users could buy and sell new and used books, movies, CDs, and video games at a fixed price. Our customer value proposition was driven by price and breadth of inventory, and our success rested on our appeal to price-sensitive users and the quality of our site, which removed friction from person-to-person transactions.
To attract new customers and keep existing customers active, we employed a wide variety of discounts, usually in the form of a code that was entered and redeemed at the Shopping Cart. As we continued to experiment with different offer configurations to optimize conversion and net revenue, we came to a startling conclusion.
We were addicted. To Coupon Crack.
It hit us suddenly, but developed gradually. As we fielded an array of tests, we came to know which special offers would generate the most clicks and highest conversion rate. In our quest for efficiency, we discarded those that delivered marginal conversion rate improvements. But the visit increases and conversion rate improvements were the “lure”, and net revenue impact was the hook: the coupon offers that were most advantageous for customers generated the desired order volume and conversion rate, but yielded the lowest order sizes and smallest net revenue per order.
This led to a dizzying crush of analysis: acquisition cost vs. LTV, repeat order ratios for redeemers of various offers, efficacy of marketing spend with offers of each type, etc. etc. It was numbing, but the fact remained: when we needed to hit the numbers (for either new customer acquisition targets or retention revenue goals), we reached for the coupons.
And it had a terrible impact on the business.
Because it trained customers to respond to only to coupon stimulus, like capitalistic Pavlov gone wrong. And this training often began at very first stage of their relationship with the company. We reserved our most alluring coupons for new customers only (a lesson in customer coupon sensitivity we learned the hard way), and most of our online advertising depended on these offers. Then because the retention was a separate entity with their own numbers to hit, they would occasionally (and sometimes against their will) send coupons to our entire registered user base to hit an end-of-quarter number that might have otherwise been missed. This cemented the behavior pattern: if you were a Half.com customer, you started with coupons, and if you waited along enough, we’d send you another one. And you made sure to stockpile items on your wishlist so you were ready to buy when the next coupon arrived, but not likely until that event.
That’s crack.
Now, bear in mind that I was only deeply familiar with the Customer LTV figures for the first 3 years of the company’s existence, before the company really undertook any earnest effort to wean itself from the addiction. Eventually, the LTV might have supported such tactics as customers grew to view Half.com as the single source for all media purchase and stopped looking elsewhere (the Amazon Marketplace became a very compelling alternative as Half.com diverted focus to new categories). But weaning took time, as new customers who initiated their Half.com “relationship” with a coupon eventually came to find that that was the only coupon they’d get, and no additional coupons would be forthcoming in the company’s effort to “pull revenue forward”. Those customers could comfortably purchase at any time, at impulse, and be assured that they would not “miss out” on an coupon that they might have received if they’d delayed their purchase.
I could ramble on about this forever, and if there is interest in the topic, I’ll be glad to go into some further detail, but I’ll summarize the lesson as this: Marketing professionals MUST think like the customer, and dress themselves in customer behavior at all times. Go on record with your rationale as to why perpetual discounting is detrimental to the business, even if if helps you hits your numbers this month. You may not assuage the vibrations from the Finance wonks who are clamoring for a Money Button on the Marketing dashboard that will yield immediate revenue, but you’ll spare the business a painful blood-letting of flat retention revenue until your customers’ behavior is re-wired for more “organic” consumption.
