Company Mantra – It’s in the game!

While watching a documentary on the evolution of video games I heard the coolest company mantra ever.

It was from EA sports, the gaming company which focused on creating games which closely represented the real thing. More important for startups was how they got there. One of the key developers came up with the internal motto “if it’s in the game, it’s in the game”. This later evolved to be the brand tagline “It’s in the game!”

EA went the extremes to put everything ‘in the game’. Some of these extremes include:

  • Getting the actual TV commentators to do voice overs on the games
  • Licensing teams, sporting organizations brands & players
  • Getting the actual athletes in the studio to get each players exact movements

The result being amazingly realistic games. Amazing games which wouldn’t have been possible without the mantra – a mantra which simply did not accept compromise.

rooney3

Mantra is only powerful if we embrace it in every thing we do. EA sports did and went on to be a $4 billion US company with large profit margins.

What is your startup mantra?

steve – founder rentoid.com

Qantas gets it wrong with Effiency

These 3 photos where taken at Melbourne airport on a Friday night.

This is of a quick check (self check in terminal)of which there are 22.

This is of the the bag check in staff of which there were 3 working. (They have spaces for 22 employees)

And the this photo is of the ensuing crowd and chaos.

(the crowd goes around the corner it’s at least 100 deep)

I asked the staff member if she’d like some help tonight – she seemed flustered with how busy she was. She said “of course, but it’s ‘cheaper’ this way”. Then I asked if she thought “quick check” was quicker. She said “definitely not”.

So here’s the thing – Qantas make money out of the quick check. The save on overheads. On the balance sheet it makes sense. But what is the ‘real cost’ of doing it?

What it does is, is actually diminish what they actually provide at a differentiated level. It reduces their product from “service” to “travel”. They further commodify themselves against their low cost airline competitors. They make us ask why we are actually flying qantas and paying a premium…

– Is it the food service? – Not likely, given the food is most often a gourmet cookie & juice.

– Is it the service in the air? – Not likely, given their staff are less polite than budget airlines.

– Is it the airplanes? – Not likely, given all domestic players use the exact same aircraft.

– Is the the baggage allowance? – Not likely, given the allownaces are the same 20kg’s to tohers.

– Is it the terminal ambience? – Not likey, given it’s shared with jetstar.

– Is it their safety record? – Not likey given recent scares & that no major aircraft has ever crashed in Australia.

– Is it the inflight entertainment? – Maybe, but it’s a stetch these days given we all have mobile entertainment devices in our pocket.

– Is it the Frequent Flyer points?  Maybe, but it’s marginal at best.

– Is it the Qantas Club? yes – if you are preapred to pay the $775 per annum.

And it can’t be their ground service, given the example above on a Friday night.

Qantas need to ask themselves some hard questions about what they actually offer – as a long time loyal customer, it’s waining quickly. Their point of difference is in a massive state of decline.

Here’s what Qantas ought do if they want to avoid further decline:

  1. Offer Hot meals & drinks every flight. Not just at dinner time. If we are travelling we didn’t have time for dinner or lunch, regardless of when our flight was. We are just as hungry on 7pm flights as we are on 6pm flights. It’s not the food which costs the airline, it’s serving it up. So, if you are going to serve it. Make it worth the effort.
  2. Make the ground experience comfortable and convenient. A few more staff members on the cehckout is a nice start.
  3. Provide free wifi to anyone with a boarding pass.
  4. Have a ‘no tricks’ Frequent Flyer program where any seat on any flight is available, and not for ‘extra points’ – we’ve already paid a premium for our tickets – remember Mr Qantas?
  5. Have separate terminals for your Budget Airline (Jetstar) and your Premium Airline (Qantas).
  6. Sing out loud in your advertising about how different the Qantas experience is. Make us feel special.
  7. Charge the price needed to make it profitable. You’ll be surpirsed how many of us will be preapred to pay for it.

It’s about time Qantas started to focus on it’s customers and forgot about it’s competitors. Eventually we all morph into what we focus.

I’m sure Qantas will tell us this isn’t possible – but tell that to the person who pays twice the price for a Mac book pro versus a Toshiba with the same configurations.

Startups out there: “Beat your competitors – don’t be them!”

Singapore Series

On a recent business trip to Singapore I was surprised at how much cool stuff I saw. Not just start ups, but general marketing insight. It’s my general belief ( & many others) that globalisation has taken some of the joy away from travel. It’s harder to find new stuff, different concepts, and fresh ideas. Things just cross boundaries so much quicker now with the advent of $10 air tickets and the web.

But to my pleasure, it’s still out there if you look hard enough. So enjoy the next week’s blog entiries sub branded the “Singapore Series”.

Singapore personified!

By the way: How many brands are positively identified by their employees?

‘Oh, by the way’…pricing & fuel surcharges

The latest trick of many airlines is to segregate elements of their product cost

 

        Introducing the “Fuel Surcharge”

 

Apparently this provides pricing transparency. Thanks Mr Airline, but we know the price of oil is rising. 

 

 

Isn’t fuel a fundamental input cost for airlines? (30%)

Do they think we care what their input costs are?

Do they realize that we’d rather the total price – no tricks?

Do they know it reduces ‘trust’ in their brand and industry?

 

And just to show my total disdain for fragmented and aggregated pricing here’s a few questions I’d like to propose to the airline Industry:

 

Does Nike have a shoe lace surcharge?

Does Ford charge extra for the steering wheel?

Does Coke have an aluminum can surcharge?

Does Nokia charge extra for the buttons on the cell phone?

 

Fuel is not an ‘optional extra’. So work it out, include it and charge us a price. That’s what business is…. Businesses are meant to be working this stuff out to reduce the complexity in our lives. That’s what business does.

 

No wonder airlines have the highest business failure rate of any industry, and the worst profitability of any Industry in history. (which by the way is a net negative over the past 100 years)

 

Start up blog says: Consumers hate ‘Oh, by the way’ charges. Avoid them at all costs.

Innovative or annoying?

Emirates Airlines have just announced they will be…

  

“the first airline in the world to commercially launch an inflight mobile telephone service, affording even greater convenience to passengers wishing to stay connected while traveling.”

Hmm… has one of the last bastions of peace and tranquility afforded by the lack of mobile phones has just been destroyed?

 annoying-cell-phone.jpg

  

The question is this: Which airlines will decide that many passengers will hate this ‘innovation’.

 

I can only see it making the traveling experience less pleasurable. On top of this Emirates has invested some US$27 million to fit its fleet with the AeroMobile system. On something which may actually turn away customers!

   

It’s also true that Emirates currently has 7000 calls made per month from its in seat phone service. Approx $200,000 revenue which will be lost every month.

With certain innovations smart startups will often need to decide which half of their customers they want to keep happy. It will be interesting to see how this one plays out.

Maxjet bites the dust

Another business class only airline has bit the dust – Maxjet. You may remember our view on why Ozjet failed.

And on this occasion we have a similar theme, but not quite as extreme. Maxjet had some of their act together and survied 4 years. Like the right routes, nice inflight service and an airline lounge. But it still had a few key flaws which still leaves the question unanswered:

maxjet-767.jpg

Is a business class only airline a viable business model?

Start up blog says: We won’t know until someone ticks all the following boxes:

  • A new and modern fleet (18 year old 767’s don’t cut it Maxjet)
  • A cabin which is world best practice business class (Flatbeds are now the benchmark Maxjet)
  • Linked to premier frequent flyer program which links to other airlines and allows code sharing (One World / Star alliance)
  • It has international & domestic coverage in it’s home market
  • Flights every hour / a large fleet
  • It has the right level of ground service (Airport lounges / chauffer service)
  • Credit Card linkages

Maybe the business class only model could only work as a sub brand of a larger network (which Lufthansa is doing). It will be interesting to see how the remaining players net out (Silver jet & Eos)

 maxjet-interior.jpg 

Insight?: Maybe people who regularly fly business class enjoy looking down on those in coach too much to leave their multi class carrier!

I’d strongly advice against starting an airline. But if you must, show your VC’s this blog entry first.

Perception & reality

While in the airport I noticed that budget airline Virgin Blue had made their customers board the plane via stairs on the tarmac as opposed to using the aero bridge. Here’s a photo I took:

 virgin-walk-on.jpg 

The direct aero-bridge was open and connected to the plane. But instead they made their customers board via the tarmac. I can’t help but wonder if this is to help their customers feel like they really got a bargain price. Sometimes perception becomes reality.