Category Archives: Marketing

The latest research on bullshit

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Bohr not thinking

“It is impossible for someone to lie unless he thinks he knows the truth. Producing bullshit requires no such conviction.”

                                                               – Harry Frankfurt

I ran across this and thought some of my readers might enjoy it   On the reception and detection of pseudo-profound bullshit .  It attempts to quantify people's "bullshit receptivity" to their perception of how "profound" something sounds.  They speculate that there are word patterns that make things  "pseudo-profound" that trip people up.

Good stuff. Rupert Sheldrake should use this approach to show all the pseudo-BS the sciences have delivered to us before changing their mind over the years. Rupert is on a quest to free science from the "material world view" ( Setting Science Free from Materialism ) which he believes is starting to stagnate our progress.

For example, the "Big Bang Theory" of the universe was Introduced in 1949 and accepted by most cosmologists in the 70's  (about when I graduated from high school), but some are questioning it again.

My takeaway is simple, don't fall for bullshit just because it's wrapped in "Science"  or "Scientists Agree". Not all scientists are motivated by seeking truth (I've had PhD employee's tell me they kept going to school because they couldn't get a job!).   The vices of people are embedded in the people, hence they show up in all institutions.  I'm leary of any "Truth" that achieves its status by a vote.

Kurt Godel

Kurt Godel showed us that with our most rigorous thinking (mathematics) we can  "prove" things that aren't true and cannot prove everything that is!

-jeff

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5 Questions to Attack your Competitor's Strengths and Win

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"We are not in the watchmaking business, we are in the true luxury business."

- Yves Piaget

 

When I ask many young CEO's and marketing people "Who's your competition and why are you better?" they answer with a list of both strengths and the competitors' longer list of weaknesses.  In addition, they rarely include the big competitor which is the customer's status quo.

Here's how to think strategically about competition.

HIGHLIGHTING A COMPETITOR'S WEAKNESSES RARELY WORKSlion-and-mouse

  1. Today's customer's are more informed of competitor's strengths and weaknesses (especially if they are already using the products)
  2. Customers buy because the perceived strengths outweigh the weaknesses (which they're told are temporary)
  3. Often the competitors' strength is much broader than just the product (e.g. financial strength, longevity, service etc.)

DE-POSITIONING A COMPETITOR'S STRENGTHS CAN TIP THE BALANCE

Here are 5 questions to get you started  de-positioning a competitor...

1)  If me and my competitor both had the same product who would win and why? 

Neutralize those... through partnering, guarantee's, customer insurance etc.

2)  If we swap products with our competitor who would win and why?

Extends the issues from above, neutralize these also

3)  Who is  my "Perfect" customer that would buy from me instead of my competitor?

 Qualify leads to this description and keep closing gaps

4) What is my  competitors "Perfect" customer that will buy from them no matter what ?

FIlter leads and don't  spend energy here, learn what they value in the competitor's strengths

5) Can the opposite of my competitor's strength also  be a strength?

  If so... consider positioning there and migrate customers to the other side

nobody-gets-fired-for-buying-ibm

apple_think_different2

The opposite of a fact is falsehood, but the opposite of one profound truth may very well be another profound truth"    

- Niels Bohr

You must fulfill a minimum requirement on every axis of competition... but you only need to differentiate on one (see my 60 Minute Marketing MBA Presentation). Here are some examples I've experienced:

THEY HAVE...    Great technology              BUT...     not based on open technology price curves

THEY HAVE...    Large existing network    BUT....    compete with customer's  cycles of learning

THEY HAVE...    Financial strength              BUT...      not as strong as our combined partner's

THEY HAVE...   Been around                        BUT...      don't offer disaster insurance

THEY HAVE...   Big user base                        BUT...     you're not that important to them

You get the picture... a little progress here can pay off in higher sales!

Miles-Davis-Cool

"Half of being cool is doing what nobody else is doing."

-My friend Tommy Nelson

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How to Think about Economics

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economics-480x280

When talking to executives, technologists and marketing people I'm surprised when they over-simplify  how the global economy functions, and is changing. Here are some key understandings and implications I use when analyzing events.

My framework for recognizing the forces impacting businesses is to isolate three economies and define them as below.

1) Global Economy - how countries settle trade balances (international clearing)

2) Financial Economy - disk drives and filing cabinets with  "claims" on the real economy

3) Real Economy - making, buying and selling stuff

Taking them one-at-a-time with  key takeaways...

GLOBAL ECONOMY - 4 important things to know about the Global Economy...

global economy

1) Prior to 1971 there was an agreed-upon system (1944 Bretton Woods fixed-exchange rates) but in 1971 things went rogue (US dropped peg to Gold and currencies "float") and many policies have STILL not adapted to the new structure.

     Takeaway: I thought Foreign cars held their value better than US cars but it was the US dollar, not the cars, that was changing. Even Congressmen don't get how rapidly rates change (up to 20%/year, and 100% over 5 years for the Yen) and how Global Capital Flows affect everything.

2) Floating exchange rates were intended to be market set, but countries game the system by manipulating (pegging), here's 34 doing it http://goo.gl/43B9ic

      Takeaway:  Countries create mercantile policies that "advantage" them in global markets for DECADES. But markets will EVENTUALLY clear. (China and Germany)

3) The US is the "reserve currency" so transactions occur (not just price) in dollars. Therefore the US must create enough "working capital" dollars for both the US and the rest of the world's International Trade (~50% of US Dollars are in the USA and ~50% overseas with the US share of global GDP at ~20% now, ~31% in 1971 and ~40% in 1941)

     Takeaway: Policymakers make mistakes since changes in foreign demand for US$ can be as  large as monetary policy impacts on the supply. QE and other policies can cause foreign bubbles but subdued US impact with all the moving parts.

4) In 1969 a new global "unit of account" called "Special Drawing Rights" http://goo.gl/5kQGnp. SDR's were set up to be a "worldwide reserve currency" . In fact, the US Post Office accepts SDR's as payment! http://goo.gl/C0jlrG

     Takeaway:  The global monetary system is being restructured. Expect unintended consequences and economic hiccups.

FINANCIAL ECONOMY - 3 important things to know about the Financial Economy...

financial economy

1) 10x bigger than the Real Economy (Bain & Co. estimates globally ~$600T financial assets supported by ~$63T GDP http://goo.gl/NQWYFX )

      Takeaway:  The Financial Economy can jerk the real economy around with bubbles and busts even when the real economy looks good. E.g. 2000 tech, 2008 mortgage, 2015 shale oil etc.

2) Since the early 1900's manipulating the financial economy (e.g. capital gains vs. income tax rates, IRA's, Mortgage Interest deduction etc.) has become the PRIMARY tool of Politics.

      Takeaway:  Policy changes provide huge business shifts. E.g. Tax credits built Hollywood, Obamacare and the Insurance Companies, tax credits and Solar etc.

3) Since 1971, the Federal Government (NOT State or Local) can Print as much money as they want (they don't need to borrow). Ben Bernanke (Chairman of the Federal Reserve) said during a Congressional Testimony "... with all do respect Senator, the US will always pay it's bills unless you direct the Fed to not make the computer entry" http://goo.gl/r32iEl. They are limited by inflation which is a function of (global) demand for US$.

"Private sector SAVINGS is equal to the Federal DEFICIT to the penny!" -Warren Mosler

The cash (ASSET) in your pocket shows up as a LIABILITY on the Federal Reserve's Balance Sheet!  Money is scorekeeping, home economics doesn't apply to the Federal Government they  MIRROR the private economy.

      Takeaway:  We've had ~12 balanced budgets since 1940, there is no intention of ever repaying the federal debt (nor is it necessary) http://goo.gl/ExHANm. Federal interest expands the money supply, but allows financial intermediaries to allocate the expansion,  growing the Financial Sector. Shrinking deficits slows GDP if money velocity remains constant.

REAL ECONOMY - 3  important things to know about the Real Economy...Vespa

1) It is jerked around by the Financial Economy expanding and shrinking credit

      Takeaway:  See Financial Economy 1-4

2) It is jerked around by the Global Economy moving money into and out of the US. (Globalized Finance)

      Takeaway:  See Global Economy 1-4

3) Export / Import financial data collection was built during fixed exchange rates, based on currency not units. Accuracy is a function of exchange rate volatility in any given period.

      Takeaway:  Export/Import to a country expressed in currencies (vs. Units) cannot be compared over time.  Unit trade numbers can be off by 20% with the same $ trade number in a single year!

FINALLY
Ray Dalio of Bridgewater Investments created a wonderful video called "How the Economic Machine Works" https://www.youtube.com/watch?v=PHe0bXAIuk0 Ray clarifies how buying things with money vs. buying things with credit and productivity in the real economy interact.  It's 30 minutes, watch it.

Here's a paper on the same http://goo.gl/s2Nanq

I hope this helps...

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