NONE: RE: ONLINE-ADS>> 1:1 marketing, PowerAgent and The Future.
RE: ONLINE-ADS>> 1:1 marketing, PowerAgent and The Future.
Steve Podradchik (stevep_at_marketwave.com)
Mon, 15 Sep 1997 13:52:41 -0700
Let me preface this by saying that I'm not especially familiar w/
PowerAgent, per se. But it reminds me of my past life and some very
basic business rules that those of us in High-Tech seem to forget
sometimes. If you'd indulge me for a moment....
If PowerAgent fails (and it looks likely -- it's not a clever negotiating
ploy any more than New Coke was clever marketing) it's probably because
they believed the hype not the very simple reality of business - you're in
business to MAKE MONEY. Everything else is a distraction. Having 30 sales
people for a product that doesn't exist, for example, is an expensive
distraction. Raising money at high valuations that make you and your early
investors feel good is a distraction. Ship your products, deliver what you
promise, keep things lean and mean, etc. MAKE MONEY. Business 101, right?
But sometimes we forget and get carried-away in our own option-laden
tunnel-vision.
I say this with a very unpleasant experience behind me.
Marketwave is my second company. We're profitable (have been since day
1) and watch the bottom-line very carefully. In fact, we just took our
first round of VC about a month ago at a nice valuation because we're one
of the apparently few Internet s/w companies that is profitable. No hype,
no plans to quadruple in size and challenge Netscape and MS for world
domination -- just solid products, shipped on schedule, that make profits.
I'm not saying this to promote myself or Marketwave. I say this because
I've been at the other end before and it's a world of difference.
My first company, Medio Multimedia, was an extremely high-flyer in the days
of the multimedia CD-ROM. We raised boatloads of cash at high-valuations
(from Paul Allen, among others), was named one of Fortune Mags Top 25 Cool
Companies to watch (same issue as Netscape, btw), was in NYT, BizWeek, CNN,
etc . At the height, it had about 80 people. And it failed spectacularly
when we/I blew the fundamentals - you have to make $ -- companies do not
live by hype (or VC) alone.
Bottom line -- remember that the seemingly surrealistic landscape we call
the Internet is just, ultimately, a communications medium. It brings lots
of new capabilities to the table but, ultimately, it has little effect on
what people do -- just *how* they do it. I learned this at great expense
when I realized, too late, that Medio was doomed because we saw the CD-ROM
as a Bringer Of All New Things. We thought people would buy new types of
Titles (not Software, but "Titles"). Nah. It's just a high-capacity
storage media. In the end, people basically bought the same things on CD
that they used buy on floppy - games, Quicken, educational programs, etc.
The Internet isn't fundamentally any different. Don't get caught in the
great hype machine; focus on the fundamentals. How many profitable
businesses have you ever heard of filing for Chapter 11?
So when PowerAgent and the like fail, do not necessarily take it as meaning
that 1:1 marketing is doomed (very far from it, if you ask me), simply that
Darwin is very harsh on animals that outgrow the environment. Taking risks
is necessary, to be sure, but do so wisely and with as much information as
you can -- it's about making money; not seeing who flys the fastest or has
the most testosterone.
Thanks,
Steve Podradchik
Marketwave
http://www.marketwave.com/ng
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