Always New Mistakes

July 13, 2009

Anchoring an idea or product

Filed under: Business — Tags: , , , , — Alex Barrera @ 6:00 pm

I’m currently reading Crossing the Chasm (Geoffrey A. Moore). A friend recommended it to me when I told him I was struggling with the idea of selling services from my startup, Inkzee, to the enterprise. It’s an old book, (1991, revisited in 1999, old in terms of the tech scene), but the ideas and tips are surprisingly valid nowadays.

crossing_the_chasmOne of the key ideas for a successful “chasm crossing“, or selling an idea to the mainstream markets is to create a reference market to which your product/service can be compared on the heads of your clients. This principle is fairly easy to follow, but quite complex in nature. It taps into the way our brain works and it’s not the first time I’ve stepped onto it. Some months ago I finished reading another book, Predictably Irrational by Dan Ariely. It’s not an awesome book, but holds some very interesting insights into how humans react to different situations. One of the examples was about getting the correct pricing, or what the author calls the anchor price.


Both ideas are rooted on the same principle. On the first case, the author suggests that when selling something innovative, that has no competition, the way to go is to create that competition. How do you create that competition? Easy, you introduce 2 new concepts, the alternative market and the alternative product. You need to position your product close to a well know market by the customer. For example, if you’re selling an online word editor, you could make yourself close to the market of desktop word processors, aka Microsoft Word, that will be your alternative market. It’s a market known by the customer, where they buy from and most importantly, they have an allocated budget to buy from it. By positioning next to that market, the client can make comparisons between your product and what they’re already using. In other words, you create an anchor they can use to compare you against. You set yourself into a preexisting category in the customers head. The problem is that you need to differentiate your product from that preexisting market. The way to do this is by referencing your alternative product, that is, a product or service that is similar to yours, and is market leader but in a different market niche. In this example, you could name something like So you end up with a punch line like, “our online word processor is like the salesforce word processor”. So, in conclusion, the idea is to create an anchor point and a differentiating value proposition.

Now, in Predictably Irrational they idea was very similar. Instead of focusing on a product sales proposition, tpredictably-irrationalhe domain was the pricing of a product. The example the author gave was the pricing of a subscription. An offer goes as follows, an annual subscription to The Economist (online access) costs $59. An annual subscription to The Economist (print) costs $125. Finally, an annual subscription (print and online access) costs $125. Which one would you choose? Chances are that the last one. Why is it like that? Truth is, that humans can’t value things without any reference. We always draw conclusions from comparisons. Our mind works under a cause/effect paradigm, that is, if the paper edition (lets symbolize the concept paper edition with the A symbol) costs $125 (B is the price), and online + paper (C) costs $125 (B as it’s the same price symbol as before) and online + paper (C) is better than only paper (A) then (here comes the effect) option C (paper + internet edition for $125) is the best one.

  1. A -> B
  2. C -> B
  3. C > A

As we see from the simple logic equations from above, without [3] we can’t choose between the first 2 options. We need something to compare against. In the prices example, we are creating an anchor price, $125, something we know the value of, the printed edition of a magazine (our alternative market). We then offer a new product, innovative, something we aren’t familiar with, the online access to a publication. By virtue of putting it next to the magazine realm (in this case by virtue of the same price) we create a connection between both propositions. The problem is that we need a 3rd cornerstone to allow humans to see the difference, to be able to choose. In this example we are using a quantitative approach to choose, 2 things are better than 1, specially if that 1 thing is part of the other offer.


In the product example we use the product alternative to create a point of reference to which we compare the product to. In the former case the equation [3] isn’t as clear and powerful as in the subscription example, but plays the same role, a way to quantify and compare your product. For example, Microsoft Word (A) is part of the desktop publishing tools market (B), our product (C) is on a similar market (B). (C’) is doing great and it’s similar than our product but in a different market niche (D). There fore, our product must be as good as Salesforce but in the market of desktop publishing.

  1. A -> B
  2. C -> B
  3. C’ ~= C (similar products)
  4. C’ best in D
  5. C > A

As you see, the train of thought is slightly more complex, but ends up with a similar conclusion. Granted that it’s not as straightforward as the pricing example and you need to probe both [3] and [4] to get the client to buy into your proposition, but it’s much easier to do that, than to try and sell it blindly.

Ahh, the beauties of neuromarketing 😉


May 28, 2008

Twitter as a marketing tool

Filed under: Business — Tags: , , , , , , , — Alex Barrera @ 12:21 am

It’s been twice in a week that I’ve talked with Marketing and Communication people about using Twitter for their companies and the answer has always been NO. It really strikes me, specially because both companies are part of the Tech Industry, one of them is even a well known startup.

The response I always get about Twitter is: “We don’t use it because it’s only for early adopters and geeks“. While this has been the case until very recently, Twitter is gaining critical mass at an amazing pace. Just to throw some numbers, Twitter has a daily reach of approximately 0.1% according to Alexa. That means that 0.1% of the Internet users access Twitter each day. But, that’s not the only thing, according to Biz Stone the Twitter API gets 10x that traffic, bumping Twitter’s daily reach to a very nice 1.1%. Right now it has broken the early adopter barrier and you can start seeing a more general use of it by online users. That’s the reason I think it’s the best moment to start using Twitter as a Marketing tool.

Why is Twitter a Marketing tool? Because it allows persons and/or companies the following:

a) Give a human face to the company
b) Keep your customers up to date with the latest news of the company
c) Listen to your customers feedback
d) Interact one to one with your customers
e) Keep key influencers (tech gurus, bloggers, journalists, etc.) updated about your company
f) Brand tracking

Who should use Twitter as a Marketing tool? Not everybody of course. Twitter users have a tech profile, although this profile is being widened by other online non-tech users day by day. This is something that many old school marketers don’t grasp. Everyday the digital breach between the online and offline worlds is diminishing. Currently you can see baby boomers buying food, books or flights through the Internet. You can see them chating, emailing, commenting on forums or writing blogs. Some of them are real social network junkies. Marketers have to understand that the profile of an Internet user is becoming much more general than it used to be.

So, again, who should use Twitter as a Marketing tool? I would say that it should be used by anyone with a company that is related to the tech industry. That would be websites, blogs, newspapers, software vendors, hardware vendors, musicians, … hell, everyone that can make business through the Internet. Right now that is mostly everyone!

Why are people going to adopt Twitter? It’s very easy, Twitter is Free and Simple. The sophistication level needed to use Twitter is close to 0 for any single Internet user. It’s ease of use is one of its strongest points. Also, the need to be connected and to know what is happening in other people’s lives is something inherent to humans. Humans are curious by nature, Twitter lets you be curious about other people at a never seen scale. The best proof of this are social networks like Facebook. What’s the real value of a social network? Simple, stay connected with your friends, or in plain English, know what your friends are doing. In that sense Twitter is much simpler and faster than any social network out there. In my humble opinion, it’s just a matter of time before all the social network late adopters take over Twitter.

Finally, why do I say it’s now the best moment to start using Twitter? Well, Twitter, as what happens with blogs lets you build a big audience. And the key concept here is “build”. You can’t start using Twitter and expect a relevant audience of 10.000 users following your account. Why do I say relevant? There are many Twitter users which think that if they follow many people they’ll get followed in exchange and while it’s true that this happens (byproduct of our society, people feel bad if they are being followed but they don’t follow you back), these type of users aren’t really listening. That’s why, even though you can do that, you won’t build a relevant user base. Your messages won’t be read by the users you want. The funny part of this is that the people that follow thousands of users just to get more followers, are usually so called “Marketing experts“. That’s pretty ironic if you ask me, as they should know better. So trust me when I say that building a reliable audience on Twitter takes time and good, thoughtful messages. That’s why it’s important to start now, so that when Twitter goes mainstream your company has already a good number of followers. As they say, the more number of follower you have, the faster you’ll get new ones.

Any experience with Twitter and your company? Please share it with us! Are you a Twitter user already? Follow my Twitter user

UPDATE: I found a very good hands on example of using Twitter as a Marketing tool.

March 3, 2008

The important people myth debunked

Filed under: Business — Tags: , , , , , — Alex Barrera @ 12:56 pm

There is something that I never quite understood. Why do people are so afraid of famous people? There is like an innate fear of important people that most of the times scratches in paranoia. I would like to analyze this myth andyoursign.jpg try to debunk it because I feel it’s one of the most wide spread problems with many people. First of all, there are many definitions for “important, and worst of all it’s that this definition varies depending on who you talk with. For me, someone important is someone that has an incredible track record and that has demonstrated many times that he’s truly incredible. I would like to stress the importance of “many times” because I think it’s a key concept in my definition. Someone that got lucky once and got fame and money isn’t as important to me as someone that has proven many times his/her skills or knowledge. The problem to me is that not many people share this definition. For most of them, someone important is someone that has been exposed to the media in some way or another. That means, someone that has been written about in a nationwide newspaper, magazine or A-list blog, someone that has been a TV guest in some television program or someone that has been interviewed in a radio program, turns out to be, for a great chunk of the population, someone famous.

Sometimes, and only sometimes, there is a relation between media exposure and important people, but most of the time it’s just the result of the marketing and PR guys. And don’t get me wrong, exposing someone to the media is quite tough, specially now that everyone is competing for attention. The problem is that there isn’t a correlation between both, and most people don’t know this or won’t acknowledge this.

Now what I hear most of the time is “hey are you crazy? Are you going to email X? He won’t even answer you, he’s famous!” and I must say that when I listen to this, there is something that kicks inside me. I always answer the same thing: “and? why isn’t he going to answer back?”. After all, famous people are human beings with the same google.jpgdefects and virtues as the rest of us, sometimes even more. They are also, most of the time, educated persons that will answer you back, even if it’s to decline the offer. I understand, because I’ve experienced it, that when you are a very social active person you don’t have time for everything you would like, and when you have to decline and invitation, collaboration or similar you feel really bad about it because you wished you could have more time. Sadly enough, until someone discovers a folding time device, there is a limited time window these people have and so they have to limit, often based on priorities, with whom they spend it, which I understand and share 100%.

Nevertheless, not sending emails, or calling famous or important people out of fear is just plain stupid. As Wayne Gretzky once said: “You miss 100% of the shots you don’t take.”. You’ll always find rude people, but those are a minority. In my experience, every single time I’ve emailed someone that is considered by society as famous or important I’ve got an answer (ok, granted that it wasn’t always the answer I was looking for, but I still got an answer).

Another problem is that we tend to empower famous people with somehow ridiculous powers. If you’ve ever been in a place where everyone thinks you are a god, you might have experience this. It’s pretty hilarious what people talk about you, it’s like if you were a mystical creature with superpowers that can bend the laws of physics just with your sight. This is a natural byproduct of worshiping, but people should be realistic, famous people are normal people that have achieved incredible things. But that doesn’t means that they are superheroes that don’t speak your language or that don’t have enough education to answer an email.

The above sometimes reminds me of when you are looking for a relationship and you see/meet an incredible woman/man. Most people freak out and say things like: “oh look he’s/she’s so cute he/she won’t even speak with me”. Truth is that handsome people are quite lonely because of this and most of the times they have no partner and they stay like that for a long time because nobody has the guts to go an speak with them.cajal-mi.jpg

Anyhow, what I want to say is that we shouldn’t be afraid of talking with important or famous people, because after all they are human and respond like humans. You might admire someone, as I do with many persons, but that shouldn’t stop you from talking with them because, after all, you can’t possible know what they are going to say. Limiting yourself because of your own thoughts is something we should avoid, let others put the limits, not ourselves.

As an experiment I’m going to forward this post to some A list bloggers and see how many of them leave a comment to prove my point (please don’t let me down with this hehe).

And as always, what are your experiences with this myth? Have you ever been there? Are you famous and have experienced this “fame isolation“? I would love to read everybody’s insight on this matter.

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