Trade-Off: Why Some Things Catch On, and Others Don't by Kevin Maney
Broadway Books, NY-USA, 2009

To put the book in a single line would be to say that, in order to be successful, businesses should either be high in Fidelity or in Convenience. Fidelity meaning a product that is premium, priced at a soaring rate and is hard to get – and its customers are ready to buy it at the rated price, go all out to get the product, feel its aura and the experience from the brand. A fidelity product adds to the buyer's personality. For ex: Merceds. On the other hand, convenience means a product or a brand that is cheaply priced and is easily available and its customers buy the product because of its low price and its convenience. For ex: McDonalds.

In order to grow, businesses are required to trade-off one thing or the other. Maney puts that businesses can either be high on fidelity (quality) or high on convenience (low cost) – no business can be high on both ends. A business that tries to address both ends, ends up in what Maney calls the “fidelity mirage” or lands up in the “fidelity belly”. An example could be that of the high-end brand Coach that manufactures classy handbags – it got into a fidelity mirage when it started selling cheap bags at a lower prices in malls. A fidelity mirage is something like trying to reach the sky and getting to the earth at the same time. For example, Starbucks illustrates the perfect case of a businesses in the fidelity belly. Starbucks started off as a high fidelity brand and had its own aura. People would shed more bucks to have coffee at Starbucks until it started its aggressive expansion – to put a Starbucks in every city on every corner. The aura that it had, started to diminish as it became more familiar – people did not want to shed more money for a cup of coffee from the corner shop and the brand landed into the fidelity belly. Fidelity and convenience act like antimatter to each other, says Maney. This idea may seem over simplified and ocuurs in every chapter and example in the book. A business needs to concentrate on its core audience and their needs to in order to grow.

Maney's ideas are simple to understand and easy to use in any business setting – be it a established company or a start-up. The trade-off model can be used as a quick-check when making decisions. The book is worth a read.

(book review) Adland

Adland: A Global History of Advertising by Mark Tungate

(Kogan Page, London and Philadelphia, 2007)

Most of the books on advertising seem to come from agencies that promote their own agenda. With Adland, Tungate brings a true journalistic style, an outside perspective... exploring facts, dreams and desires that made the ad world what it is today. This book is not a trumpet for any agency but is a well researched piece that walks the reader through each era in advertising history and explores future of the industry. 

Mark Tungate, an author and journalist explores the development of advertising from an international perspective. The book is a journey through highlights in the history and development of some of the biggest media agencies worldwide. Tungate explores the evolution of some of the key names in the industry such as WPP, Omnicom, Saatchi and Saatchi, Interpublic, Publicis, Havas, Dentsu and more... The book includes interviews of some of the industries stars such as George Lois, Tom Bernadin, Sir Alan Parker, Jean-Marie Dru, Sir Martin Sorrell, John Hegarty and Phil Dusenberry. This book is a must read for anyone in the field of advertising, marketing or related. Knowing these stories inside-out will give you a strong perspective of how and why the adworld is the way it is.

(book review) Outside Innovation

Outside Innovation: How your customers will Co-Design your Company's Future by Patricia B. Seybold

(Harper Collins Publishers, NY-USA, 2006)

Open innovation, co-design, crowd sourcing... I have always been hunting down books that talk about these topics. This book covers all these concepts and even more.  

With the advent of the internet age, there has been a fundamental shift in power that has put the customers in the driver's seat. With a plethora of choices and access to information at their fingertips, customers are now able to compare your company's products, prices, features and demand what they exactly want. Generic products are no longer what they seek. Customization is the new norm. Even though companies understand this change and research consumers and their needs, most face challenges in implementing what the consumers exactly want. Patricia Seybold has the answer - co-innovate! Seybold explains why companies today win by not just hiring the smartest talent, but they win by engaging with the smartest consumer.

Through case-studies from companies such as LEGO, Hallmark and Staples, Seybold walks the reader through the process of co-innovation. She talks about how many companies already engage directly with their "lead users" (customers who are passionate about the products) and their ideas to co-design solutions that will better meet their own (customer's) needs. The author talks about how “eBay created a new industry by enabling sellers to find buyers” and "Dell made build-to-order standard operating procedure" through co-innovation. She discusses how these companies succeeded not by just creating a generic product out of R&D. They won by co-creating with their customers. 

Interesting read!

(book review) The LongTail

The LongTail: Why The Future of Businesses Is Selling Less of More by Chris Anderson

(Hyperion, NY-USA, 2006)

I studied the economics of the Long Tail when I was working on strategies for Netflix earlier this year. Chris Anderson wrote an article on the topic in October 2004. The article featured in Wired Magazine. Anderson's concept was the corner stone for my recommendations to the Netflix execs. Since then, I have wanted to read "The Long Tail". 

It has been a few months since and I finally got my hands on this book. I picked it up right after my graduation and I am so glad that the book was everything it promised. I guess I may be late in picking up this book and a lot of you must have already taken the pleasure. Obviously, some of the material seemed a bit outdated to me as it has been a few years since it was first published. But, reading and understanding the principles opened up some new avenues.

Long tail as a concept comes from the Pareto principle (80/20 rule) or the power law. It basically means that 80% of the the effect comes from 20% of causes. In business terms, 80% of the sales come from 20% of the products. Hits are rare - But this does not necessarily mean they are the best. It just means that they are the biggest. Similarly, the flops or products in the tail aren't necessarily bad products. As a matter of fact, all the products have buyers (even though the numbers decrease significantly). Hits may attract the majority but the tails attract niches. The book talks about how Internet has changed the economics of supply and demand. The book revolves around the idea that lesser known or less popular products in total account for a huge amount of sales in comparison with just the hit few. This does not mean we undermine the hits but just that we also focus our attention on the tail.

Even though the Long tail wave may have lost its novelty in the US, we see that the phenomenon is yet to fully bloom in places like India.

Anderson's article was released a couple of years before he published this book. The book is not bad, but the article makes you fall in love with the concept. Seth Godin wrote an interesting article on the same topic last month. Click here to read his article. For additional reading, I recommend 'Wikinomics' along or before reading this book.

(book review) Starbucked

Starbucked: A Double Tall Tale of Caffeine, Commerce and Culture by Taylor Clark
(Little, Brown and Company, NY-USA, 2007)

For all you coffee lovers out there and the rest of you, Taylor Clark has written this fun piece of Starbuck's birth, its growth and its journey that will educate and humour you at the same time.

The first part of the book talks about how Starbucks changed economics of the coffee industry. It talks about the history of coffee and the culture surrounding it. The second part contains discussion around the controversies surrounding Starbucks. The criticism points how Starbucks has homogenized the planet, destroyed cultural diversity within its stores, killed the local coffee houses and how they have underpaid the farmers. This author has managed to maintain a good balance of the positive and negative aspects of the company. Overall, its a great research and analysis on the impact that Starbucks has on all our lives.

With my background, I enjoyed reading how they developed their brand, the history of the Mermaid logo and how it evolved. I liked to learn about their approach to retail design and the impact it has on the customers. Clark's research and his journalistic style of writing appealed to me. I encountered this same (journalistic) style of writing with Sarah Lacy's book (review below) and seem to enjoy it.

Even though I found it hard to separate Howard Schultz from Starbucks throughout the book, I still have an appetite for more. The next book I want to read now is Onward: How Starbucks Fought for its Life without losing its Soul by Howard Schultz.

Crowd-funding is here to stay!

Seth Godin made big waves earlier this year when he announced the crowd-funding campaign for his new book. He reached his $40,000 target in barely a few hours and passed way ahead of the set goal. Even though crowd-funding as a concept is not really new, the last few years have shown a spurt in the adoption of this concept.

Last month, I was in the beginning stages of writing a strategic plan for Kiva.org and was interviewing Matt Flannery for deeper insights on the business model. Kiva is the world's first and the largest person-to-person micro-lending website and has helped over 800,000 people through small loans from lenders. Since Kiva, a number of other philanthropic organizations have taken up crowd-funding as a way to collect larger amounts of money to help their causes.

Crowd-funding solves the problem of access to money by tapping into individuals for small amounts of investment rather than venture capitalists or banks for a huge amount. The ability for everyone to invest in projects anywhere in the world via the internet, with as big or as small an amount will open up opportunities that we never imagined. We are already seeing some great start-ups in this field such as Kickstarter.com, Crowdrise.com and Quirky.com to name just a few.
   
Crowd-funding is still in its toddler years. The concept has had a great burst of adoption in the last few years. But, with the number of people, businesses and organizations running to get a piece of the cake, its not long before we'll see the space with just too many choices. On the other hand, as more organizations keep on pouring in, some of the current problems will get more attention; which means we will have more sustainability, accountability and traceability in the future.

(book review) Brilliant, Crazy, Cocky: How the top 1% of Entrepreneurs profit from Global Chaos

Brilliant, Crazy, Cocky: How the top 1% of Entrepreneurs profit from Global Chaos by Sarah Lacy

John Wiley & Sons, New Jersey-USA, 2011

I started reading this book when I did not know who Sarah Lacy was or what the book might contain. The only thing that really made me pick the book was second half of the title - 'How the top 1% of Entrepreneurs profit from Global Chaos' . I was not convinced that anyone could actually accomplish such a humongous goal in just a couple of hundred pages. But, Sarah Lacy has done an amazing job.

She traveled to places like Brazil, India, China, Israel, Indonesia and Rwanda to explore how entrepreneurs, despite of challenging situations have made a whole lot of difference in their worlds. She has written about real stories she experienced, real people she met and entrepreneurs she interviewed. Lacy further goes to explore how some of these people created solutions to better their (unique) difficult situations. And some of them are set to change the world. The following excerpt from the book is mentions some of the entrepreneurs she talks about in detail:

“So, too, is the high-growth entrepreneurship wave sweeping the developing world about more than just cash and stock options. Marco Gomes wants anyone in Brazil to make money using the Internet. Xu Xiong wants a way for anyone in China to get a driver's liscence without paying bribes. Ravi Ghate and Rajiv Mehrotra want to connect India's villages to lifesaving information. Martha Tilaar wants every Muslim woman to feel beautiful. And Jean Dieu Kagabo wants his once-decimated nation to stand on it own two feet, consuming its own products and creating its own jobs.”

While she talks about the how entrepreneurs in the developing world are solving real problems, she talks about why Silicon Valley may lose the edge in the future:

“...in Silicon Valley, VCs hem and haw over investing in a company like Facebook at too high of a valuation, because they can't immediately determine how they'll double their money. This is the curse of short-term thinking. It's not risk-based investing if you can see an exit before you do the deal. Or as legendary venture capitalist Vinod Khosla sums up his industry's sad evolution: “There's too much capital and not enough venture.”

I enjoyed the ethnographic research throughout this book. It is not an easy task to just travel to 11 different countries and understand minute details of people's cultures, beliefs, actions, their situations and put in detailed descriptions of how and why the people act the way the act.

I read this book almost a year after it was published. Even if I am late, I wanted to write this review for all the others who might have missed it.