Small Companies vs Big Companies

If I could give one piece of advice for anyone who has reently escaped their cubicle of the large corporate scene to start up it would be this:

Do the opposite of whatever large companies do.

…and be quicker than they are.

if your startup is in the same industry you worked in…

Do the opposite of what you ‘were told to do’ within your large company.

To beat them you must focus on momentum. We most not do what they do, we must not compete on their level.

To gain momentum, we simply cannot behave the way they do.

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!”

Territory

I just saw a stray cat enter our backyard much to the distain of our moggy. You know what happened…

There was a lot of hissing, a couple of left jabs with claws out, bushy tails and the obligatory chase up over the back fence.

Territory is about physical space, location, proximity to food, water and shelter. The basics which sustain life. Our cat was simply protecting what it needs to survive. Humans do it too. And so should your business or startup.

Cats are pretty smart. They know that there isn’t really enough room for two in most houses. It’s no different with brands. Great brands are always territorial. When the local alley cat turns up for a feed, the incumbent brand wont move to the left and share the food bowl. There’ll be fight, every time.

But the trick is this, brands are only territorial about their house (read here key distribution point). If you’re getting a great feed elsewhere, they won’t even notice. You can build some momentum and cashflow before they notice you’re gaining size and power. If you want to get off the street like your local alley cat, stop living day to day, then you and your startup have to find a new place without a cat. Be nice to the owners (your customers / audience), offer them something emotional and they might just adopt you.

AFL Legend – John Kennedy ‘Do something’

This advice matters to everyone: Favour action over all things.

For the uninitiated: This speach was given by a famous football coach in Australia during an AFL Grand Final (think Superbowl / FA Cup). With passion he emplored his campaigners to just get out there and do whatever they could. The end result being a victory – or the ability to say ‘at least I had a go…’

[youtube=http://www.youtube.com/watch?v=9db1GgNtCKw]

Dreams for sale

Here’s a truth all entrpreneurs must know, embrace and accept. Our selling skills are more important than our technical genious, web wizardry, or financial footwork.

If we can’t sell we better find someone who can work with us. Running a succssful startup requires the dream to be sold – for someone to buy our dream. Until we’ve sold this dream we are nothing – We do not exist.

Good news – we can always learn or outsource it.

Buying vs Selling

The ultimate goal of any entrepreneur is to have people buying stuff from you. Our job as entrepreneurs is move our brand from a position of selling, to place where people come to buy. This takes time and continuous refinement of whatever we make, do or market. Truly successful brands don’t really sell stuff – it’s bought.

As Gitomer would say:

People don’t like to be sold, but they love to buy.

And so the most profitable sales interactions are defined by the audience. Women tend to say ‘They bought a pair of shoes’. Not that the shoes were sold to them.

Startups should remember – We start out selling, in the hope that it evolves into buying.

Truth in advertising

You’ve probably seen this hilarious spoof on marketing and advertising. If in Australia you may have seen The Gruen Transfer.

Here’s my truth in advertising:

Most people who work in advertising don’t understand advertising at all. They are too busy using other peoples money to impress themselves by making 30 second movies and highway art.

If you’ve ever worked in marketing you’ll know this truth.If you’ve ever seen who wins the advertising awards at Cannes, you’ll know this as well. It’s because most agencies don’t really understand marketing, which is the foundation of advertising. Advertising will only ever be part of marketing. Very rarely does an advertisement do what it’s designed to – Change behaviour, or heaven forbid persuade the audience to buy something.

So rather than explaining what advertising is, we’ll just let you know what it isn’t:

1. Advertising is not art

2. Advertising is not film

3. Advertising is not entertainment

4. Advertising is not about creativity

5. Advertising is not design

Advertising is not all the things most people believe it to be.

It may well ‘be’ the things mentioned above, but this can only ever be a bonus. If it is any of the things mentioned above at the expense of influencing behavior, people taking action or actually selling – then it fails as far as startup blog is concerned.

When your start up rocks enough to afford advertising remember this parable.