Founder Feedback gives you insights from the startup trenches. Seth Cohen, Co-Founder and CEO of Screenius, recently gave a presentation at the Entrepreneurs Roundtable in Palo Alto outlining the 4 lies entrepreneurs are told (but need to ignore). He posted the content of the presentation on the Screenius Blog, which is syndicated with permission below; .
"There are 4 lies you have heard so often repeated that you probably believe they are true. Let’s set the record straight and add some insights we entrepreneurs can use. I’ll start with an easy one:
Lie #1: Marketing Doesn't Matter
I assume we all know that Santa Claus is not real despite the fact that each new generation of innocent children is taught this myth. But why is his suit red? Mostly because of Coca Cola.
Coke made a pivot during the Depression away from a medicinal elixir (the original cocaine had been replaced by caffeine by 1903) and into a general purpose all year-round drink. To be associated with family happiness, they enlisted the celebrity endorsement of Mr. Claus. Coke popularized a version of Santa dressed all in red to match their logo, and their marketing success spread this version of Santa throughout the world such that he is now universally shown wearing an all red costume.
Moral for Entrepreneurs: Marketing matters. Product alone won’t bring success.
Lie #2: Content is King
This is a self-serving lie encouraged by media execs trying to maintain expensive lifestyles. It was hardly true when the world was analog, when content creation, distribution, and access was hard, expensive, and left to professionals. And it is absolutely without foundation in our digital world, where content is an over-abundant resource as this chart from Cisco highlights:
Note the slope of the curve and the exponential growth in content generation and distribution. This heralds a fundamental change in the marketplace. This hockey stick growth is being fueled by the rise of the mobile Internet, which is bringing an order of magnitude advance in global access and content creation, as seen in these slides from Mary Meeker and Kleiner Perkins:
The cost of content is being driven towards zero. Every one of us has video creation, distribution, and access facilities already included in our cellphone plans. Consumers now have almost infinite opportunities for distraction. In fact, the Consumer is King.
The only scarce resource is the attention span of the consumer. We are entering a new era dubbed the Attention Economy where value resides in whatever is able to gain and hold the consumer’s attention. It doesn’t matter if the consumer is focused on the latest blockbuster from Hollywood or their latest party pictures on Facebook – whatever is occupying their attention is the content of value.
Moral for Entrepreneurs: The advent of the Attention Economy shifts market control away from content owners/distributors into the hands of consumers. The Consumer is King. With unlimited content choices available on so many devices, the consumer controls where they place their attention. Audiences fragment and re-fragment. The old rules of the content business need to be rewritten to accommodate this change in consumer behavior, which is a golden opportunity for start-ups to create new media models. How can we monetize an audience of one? Will consumers continue to pay for content or will content owners need to pay consumers to engage with their material? Should advertisers continue to pay content distributors in the hope they reach an audience or should advertisers start to pay consumers directly for a slice of their attention?
Lie #3: Search is Your Friend
We all think search is our friend. We have been trained this last decade to make search the default first step we take to navigate the web. But search presupposes 4 criteria have been met:
- We know what we are looking for, just not where it is.
- We can express what we are looking for in terms the search engine understands.
- We trust the filtering algorithms of the various search engines to do the right thing and do not mind that the same query run by you and run by me on the same search engine will produce different results depending on the personalization filters the search engine applies for you and I.
- Finally, we do not mind sifting through pages and pages of results to find what we are looking for.
In short, search = self-service, and search = work. We get to labor through a couple hundred thousand pages like this as our gateway to entertainment experiences:
It’s analogous to being forced to always access TV programming only through your onscreen channel guide. We’d watch a lot less TV if that were the case, yet we accept this model as the norm on the web in the name of “on-demand.”
So search is not our friend. In fact;
You may have heard of the ‘paradox of choice,’ where human decision-making becomes paralyzed in the face of too much choice. I always thought this was a psychological phenomenon but this recent article by John Tierney of the New York Times summarizes research that shows there is actually a physiological cost humans pay for every decision we make. We can literally become physically exhausted from too much critical thinking.
Moral for Entrepreneurs: Time is your enemy, sugar is your friend. If your engineers are currently working 16-hour days, 7 days a week, they are not producing good code. They are not making good decisions. The quickest cure for our brains when exhausted from too much decision-making is a dose of glucose. Not pizza, not beer, but good old sugar. Meeting VC’s in the afternoon is more likely to produce a “no” than a meeting first thing in the morning, unless you ply the VC’s first with cupcakes, chocolate, or candy. FYI.
Lie #4: Privacy is Dead
“Privacy is dead” is an oft-repeated fallacy and used to cover a lot of lazy programming. Everybody points a finger at these guys below as proof we don’t have to worry about carefully dealing with user information:
But Facebook actually does a reasonable job on user privacy – there are far worse offenders collecting and reusing private data for their own ends.
The truth is, privacy is not dead. Never was. Truth is, even nudists have secrets.
There always has been and always will be stuff we want to share and stuff we want to keep secret. There always has been and always will be stuff we want to share with some people and not others. It is our job as programmers to take the extra coding effort to keep our customers’ trust and not abuse their information.
Moral for Entrepreneurs: It’s a value exchange. We are now capable of generating and collecting tremendous amounts of personal information. Consumers will provide personal information when their perceived value or what they receive from our product/service outweighs potential risks in revealing that information. There are not a lot of rich and powerful people sharing on Facebook. But for powerless ones like us, the Facebook value exchange is that we gain more from maintaining contact with friends via Facebook than we risk from some potential issue of TMI. It is our job as designers to keep consumer data in their hands unless the value exchange in our products is clear to customers."
Screenius, an iPad app that learns your tastes to help you easily find videos you want to enjoy and share, is a Graduate of the Silicon Valley Founder Institute. The app is now available in the App Store - click here to download. You can also follow Screenius on Twitter @Screenius, or follow Seth Cohen @sethmcohen.
[References: Santa’s red suit & Coca Cola advertising, The History of Coca Cola; Content Is Not King (excellent analysis by Professor Odlyzko from 2001); Cisco’s 2011 Visual Networking Index report; Mary Meeker’s Mobile Trends 2011; The Attention Economy and the Net (a prescient piece by Michael Goldhaber from 1997); Do You Suffer From Decision Fatigue by John Tierney; Beware Online “Filter Bubbles” by Eli Pariser; Barry Schwartz on the paradox of choice; Personal Data: The Emergence of a New Asset Class from the World Economic Forum, Personal Data Ecosystem Consortium.]
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