Business Over Coffee » Stick it to the Man

Biz Over Coffee Gets Personal

Zach — Mon, 11 Jul 2011 14:00:59 +0000

We (David, Austin, and I) have been at this blog for quite some time now. We knew coming in to it that we didn’t know what this would be or become. We’ve done blogs, a few podcasts, and even had some guest posts. We tried monthly topics, set schedules, and all sorts of methods for posting blogs.

What we attempted to do from the beginning was make sure that we weren’t just pumping out content. There is so much content that hits the web every day and if we were going to add to that we wanted it to be something truly unique and new. Although we were trying to bring our style, our experience, and our unique views to each topic and discussion, at times it just felt like we were doing what everyone else does.

What we ultimately decided was to take the site in a bit of a different direction. We will still be posting blogs, having guest posts, probably doing podcasts, etc. But instead of limiting ourselves to a schedule or a set topic, we wanted it to be more personal. By that, I mean more like a blog.

All of us have some very interesting things that we are taking part in, whether it be working for companies, running our own, starting our own, etc. Instead of talking about the things we know to be definitively true, we thought it would be much more interesting to write about our personal experiences (both success and failure). In doing this, it gives the reader a chance to learn along-side us and also offer input and ideas on how to do it better.

At the end of the day, we think it makes our content more useful to you and to us. We certainly have had our fair share of fantastic discussions so far on some of our content (and I’m sure we’ll still post similar content), but what you will hopefully be seeing soon are posts that are more open-ended, more experiential, and more true to who we are and what we are trying to accomplish.

In a sense, it’s the kind of things you would hear the three of us (and our guest authors) saying if you were overhearing a conversation we were having at a coffee shop… business over coffee, if you will.

Zach

Find a Need and Fill it, and…

Austin Spitzer — Fri, 17 Jun 2011 14:00:11 +0000

If I’ve learned anything about marketing and how it fits into business, it’s that you must first find a need that is not being met, then fill that need, sell the heck out of the product or service, and make a killing off of it. But there is one thing missing from this formula – having a product that is profitable. This is exactly what Pandora‘s problem is. This past week they had their IPO, which ended up being somewhat of a disappointment, especially when compared to LinkedIn who’s stock price doubled on it’s first day on the market. (Pandora opened at $16, shot up then back down to its eventual close at $17.42, while its second day closed at $13.26.

And things only get worse when talking about Internet based companies. For example, Groupon and Facebook have both shown interest in an IPO, which could push out other, weaker tech companies. And this is not good news for Pandora, whose biggest weakness is monetizing their service. For example, the two main revenue streams are ads and membership fees that eliminate ads. But the membership fees only make up 14.5% of their revenues, and that’s a problem since advertisers haven’t put their full trust in Internet based advertising.

This brings us back to our original topic. Yes filling a need is crucial to success (look at the great depression which was partially created and fueled by overproduction of unwanted and unaffordable products). Pandora has met a need, but if they are going to be successful going forward (and receive my investment in their stock) they need to find ways to bring in more revenues from more avenues. It will be interesting to see what they do.

-Austin

One Year Later and @NewEgg is Still Winning

Zach — Mon, 13 Jun 2011 15:00:51 +0000

Every now and again, you see a business who is absolutely killing it. You watch as the momentum carries them into an enormous amount of success. They slowly go from David fighting against Goliath, to winning, to becoming Goliath themselves. This is a story of David becoming Goliath… and then forgetting where he came from.

David v. Goliath (who once was David)

As I was growing up, Best Buy was unquestionably a place you would beg to be dropped off while your mom visited the nearest clothing outlet or mall, as was often the case. You would spend hours walking through an endless display of mystical, amazing, and ‘necessary’ technology. Best Buy was one of these fabulous success stories eventually rising to the top of the consumer electronics industry (and for many good reasons).

They were, without a doubt, at the top of their class.

However, as I came of age there was a David in the making. By the time I was at college in 2006, there was this cool website where you could order some of that mystical technology you had put your hands on in middle school and dreamed of owning growing up… but there was a conflict of interests.

When you were younger, you always pictured yourself buying that laptop, that external hard drive, and that flash drive from Best Buy.

So naturally, you head to Best Buy. As you arrive you are greeted by some pretty un-helpful employees. You ask about the famous price match that you used to use as the reason for coming to Best Buy instead of say, Circuit City. They ask which store you found a better price, was it Circuit City? Target? Wal-Mart?

You respond, ‘Newegg has them for $50 less. That exact product.’ The employee looks back at you oddly… I wrote about this story in February of 2010 and pointed to the fact that if something didn’t change, companies like NewEgg and Amazon were certainly going to win that race (the original blog found here).

Like I said in the previous blog, I had mad respect for Best Buy growing up. I fully expected them to figure it out and make adjustments to be competitive with online companies. Well, a recent event has forever forced me to give up hope on Best Buy and officially claim NewEgg king. Best Buy clearly doesn’t get ‘it’ and on so many levels.

The New(Egg) King

If you don’t know about the fiasco involving Best Buy issuing a cease and desist to NewEgg… well you should. NewEgg made a pretty hilarious commercial, featured below:

First off, that is a pretty classic commercial. Secondly, it is of note that in marketing it is a general fact that as long as you are not the top dog in an industry or category, poking fun at the leader is an acceptable practice.

Best Buy issued a cease and desist to NewEgg after this commercial was met with much On Air and Internet success. What happens next is something that is probably going to be the stuff of social media legend. Instead of ignoring it or hiding it or actually removing the commercial, NewEgg posted the cease and desist documentation to their Facebook Fan Page! How crazy is that! They also posted their response to their Facebook and Twitter.

Between the two posts (of both documentations on Facebook), there were over 2,000 comments and 3400 ‘likes’ on Facebook. Not only that, but the views on the YouTube commercial spiked, were imbedded in blogs like this, and the whole story covered here and in like places. This is viral in about as many ways as is possible and this is only talking about Facebook. I saw countless people tweeting and retweeting this stuff.

So What?

There is no reason, at all, that Best Buy should be losing to NewEgg. Their brand was so deeply ingrained in my brain that I literally went to their store to ask for the price match before I would even consider buying from NewEgg. They had me, my money, my word of mouth, and my loyalty… and they squandered it.

They use their social media channels to blast you with sales, deals, and new products. All the while, NewEgg is using theirs to actually interact and connect with their followers.

But so what? Why do they care about my business or my loyalty? Don’t they have 3 million fans to NewEgg’s 600 thousand? Don’t they make more money than NewEgg?

Certainly, they do. But the game is changing and NewEgg understands the new rules. In fact, they are creating them.

Best Buy’s bottom line might look good right now, but we’ll see who still stands in 5 years. My bet’s on NewEgg. It’s a shame they are private, or I know what shares I would be buying… My money would gladly rest in the laurels of David.

Zach

P.S. NewEgg got a little crazy after those two postings. To further the ‘Geek On’ marketing campaign as featured in the video ad above, they gave away 5,000 shirts with the Geek On logo on it (also seen above). The first 5,000 customers to order it from their store got it absolutely free. At the same time, if you head over to the Best Buy fan page you can catch the online only, one day sale of that Flip Mino I bought from NewEgg last year…

Do Facebook Ads Work?

Zach — Wed, 20 Apr 2011 15:00:33 +0000

I’ve recently been playing with Facebook ads and the response I’ve seen is actually impressive. I ran two distinct ads for my gaming blog:

1. An ad about an upcoming convention we are hosting that showed up to current fans

2. An ad geared towards people who don’t yet play our games, but are friends with current fans

After a week or so, I had received 5 text messages from various friends saying something along the lines of,

“Hey, I just saw a Facebook ad for your site. It was legit.”

Facebook ads is actually pretty fantastic as far as targeting goes. You can get pretty specific about who is going to be seeing your ads. My only concern was whether or not people would actually see the ads on Facebook.

I know most of the time I don’t notice them, but I was curious who would see them. After getting the response I did from friends, it was pretty obvious that a fair number of people were seeing the ads. For those unfamiliar with Facebook Ads, there are three major sections when setting up an ad:

1. Design Your Ad

This section is pretty straightforward. You can see it here:

You can see that it gives a preview of your ad at the bottom. Don’t be afraid to tweak this until you are happy. In fact, I would recommend creating multiple campaigns and seeing what happens. Testing out images and wording can both affect the number of people who see and click your ad.

2. Targeting

For me, this is actually the most useful part. What is crazy is that regardless if you actually do a Facebook ad or not, this could be an amazing tool. As an example, I narrowed down this sample ad to:

- Males
- Ages 22-32
- Live in the U.S. and in Tulsa, Oklahoma
- And who have ‘Marketing’ listed as an interest on their profile

It estimates that the reach of my ad will be around 1,100 people (this box is shown to the right of the screen). Regardless of your topic, this could really be great for preliminary research on starting a business. You can get a feel for who is out there that you could potentially tap into and who you can market to once you actually do launch. The first time I used this tool I was playing with it for a few hours.

You can see the top part of #2 here:

3. Campaigns, Pricing and Scheduling

If you don’t know how Internet ads work, you can either pay per click or per impression. For most small businesses, I would highly recommend per click. IF you pay per click, viewers have to actually click on the ad before it does anything. If you pay per impression, your ad could appear on a page and even if they don’t see it you have to pay.

You can set up a time frame, daily budget, and bid price in this section. These are standard features for online advertising and are really nice to have. They also have a recommended bid. This is based on the competing ads and how many times they think your ad needs to show up to get clicked to hit your budget. Obviously something you can play with, but overall it’s a pretty good system.

The Results

My gaming blog has spent a little over $30 in advertising in the past month and if nothing else it was worth the text messages from my friends. Being serious, I’m still not sure the exact impact it had. We have gained 20 or so fans in that time, but how much was related to the ad I’m not sure.

I really think local businesses are going to be able to use this in interesting ways. The ability to market to just the friends of your fans is a big deal. I think online businesses and blogs can certainly use it as well, but it’s just a different form. If you haven’t experimented with this tool yet, I recommend heading over to the Facebook ads section and checking it out. Like I said previously, the targeting section is worth looking at if nothing else.

If you have had any experience with Facebook ads I’d love to hear about it. It’s a relatively new platform, so I’d be interested in stories of successes and failures on Facebook. And as always, questions or thoughts are more than welcome.

Zach

More Google Greatness

Austin Spitzer — Fri, 08 Apr 2011 14:05:55 +0000

It is sometimes shocking to me things I discover by accident while surfing the web. Last year I read a book called Pull that warned me that sometime in the near future, a big chnage would happen in the way we access content, whether it be information, news, etc. And the company that takes advantage of this shift, and knows how to capitalize on it, will be winning. In his last post, Zach talked about what Google was doing and how it was going to revolutionize the way we search. Well, add this to the list…

This past week I was entertaining the idea of purchasing a new TV. I had done some reaseach on the internet for various brands and models. One model got me really excited so I did some deeper research. This is where the amazement took place. I copied the model number from the manufacturer’s site and pasted it in Google. I pressed enter and the top result looked a little different than usual. It was a slightly different entry with a picture of my friend and his twitter account with a link to it as well as the TV. This totally blew my mind. I was abviously signed into Twitter at the time (although I didn’t have the page up, my computer just remember my information) so google, in the matter of milliseconds searched through millions of tweets and found something my friend had said 4 months ago about that same TV. What a glorious thing to do.

The possibilities of uses with an integration such as this seem limitless. If another friend of mine has said something about a certain product, or movie, or heck, anything, I can just Google it, and Google with instantly tell me what they said. I know this is the beginning stage of this type of thing, but I expect this to get HUGE and fast. Google is on board with what Pull was discussing and I believe they are extremelly well aligned with the wants, needs, and demands of consumers in the market. I’m excited to see what happens as Google continues to take over the world.

Austin

#Winning with Twitter

Austin Spitzer — Mon, 28 Mar 2011 14:56:15 +0000

As we have said over the past few weeks, social media can be a powerful tool. One great feature of a site such as Twitter is the ability to create a brand, either as an individual or a business. This post is less “how-to” and more informative, but it will definitely show that Twitter has the ability to reach thousands, sometimes millions of people. That in itself is an asset that is hard to put a price tag on.

Let’s first start out by discussing the man of the hour, Charlie Sheen. He is without a doubt, a perfect example of the old saying, “bad publicity is better than no publicity.” People have seen recently how crazy he can be, and he has ran with that idea. Even billionaire business owner Mark Cuban has hopped on the crazy train with Charlie as they have recently discussed creating a show together on Cuban’s network. Anyways, as Sheen’s hype was at the peak of his existence (a few weeks ago) he decided to sign up for Twitter. It took just 25 hours for Charlie Sheen to reach 1 Million followers (a record for fastest to 1 million). And whether you like him or not, it cannot be denied that he has definitely created a brand for himself, and he has a very large following. #Winning

Along the same lines of acting outside the norm is singer Lady Gaga. Most everyone I know thinks she’s crazy, and whether or not you agree, it cannot be argued that she is ridiculously famous. As crazy as she is/seems, she has done an amazing job of getting people to know who she is and what she does. She has over 9,000,000 followers – another Twitter record.

So obviously celebrities will tend to have a lot of followers, a lot more than the average person. And building a following takes time, but once you have it, it can be even more powerful. Next lets look at a couple examples of how actions (both on and off Twitter) can affect your following or another person’s following.

As stated earlier, Lady Gaga is number 1 in terms of followers on Twitter. And number 2 – Justin Bieber. His popularity has taken off since he was first discovered on YouTube. Girls love him and adults seem to not be able to stand him. Either way he has done a magnificent job of creating a brand for himself, just like the previous examples have. On the subject of decisions affecting your following, Bieber did something that other people do everyday, and it wouldn’t matter; but it cost him 80,000 followers. What did he do? He got a haircut. Bieber has been know for his hair since he started. He himself has compared it to Tom Brady’s hair and even said Brady was copying him. Well a haircut was changing his brand. And whether or not it looked good or was a good decision, it was a change that some people didn’t like.

A final example comes from the NFL. For years one of the most vocal players in any sport has been Chad Ochocinco (formerly Chad Johnson). He is constantly using social media to connect with his fans and critics. He even has his own sports news network. Anyways, not too long ago Ochocinco posted to Twitter that a fellow NFL receiver Brandon Marshall just got a twitter account. Within 5 minutes, a simple tweet from Ochocinco got him 2,000 followers. Now that’s some Twitter power.

So what can we learn from the celebrities that harness the power of Twitter and use it in our favor. Well like Charlie Sheen and Lady Gaga, you can create a strong brand for yourself that will get people interested in what you do. Get them talking, get the hype out there. Next, you can understand the importance of the decisions you make. Losing 80,000 might be a sign that consumers don’t like something you’ve done. And finally, once you have gained a strong following, understand that you have the ability to have your voice heard by many people. This can go the other way too. As we said in a previous post, one of the best things to happen to us was being retweeted by Newegg. Imagine if Ochocinco told his 1 million plus followers to follow us (or your company). My guess is it would be huge.

Austin

The Value of Facebook

Austin Spitzer — Fri, 18 Mar 2011 15:14:41 +0000

A few months ago someone asked me how Facebook was worth so much (some analysts say as much as $50 billion). They don’t sell anything and each account is free… so how can it be worth so much. Well let’s think in terms of advertising.

Currently, there are more than 500 million users on Facebook. That’s crazy when you think about it. If Facebook was a country it would be the third largest according to population size. If Zuckerberg wanted all 500 million of his users to see one message or one ad or anything along these lines, it could be done. Where else in history has this ever been possible?

How does the value of Facebook help individual businesses? Well think in terms of how you can reach these people. Before when you wanted to notify people of what was happening, you could either post something to your website (which may or may not be successful), send out an email (which may be seen as spam) or do other small things that may or may not work. Well, if you have a following on a tool such as Facebook, this is a lot easier.cespacespacespacespacespacespacespacespacespacespacespacespacespace

Not too long ago, Facebook passed Google for the most visited site in a particular month. More recently, they have fought back and forth for the leading position. Either way, number 1 or 2 isn’t bad when you’re talking about number of visits to your page on a global scale.

People are constantly checking their Facebook to see what’s happening, what their friends are doing, and what pages they are following are doing. So if you can build a following (tips here and here) you can take advantage of the top visited site in the world, with the largest network, and offer something to your customers that they might not know about if Facebook didn’t exist.

One great example is the ability to offer coupons through Facebook. Currently there is a feature where you can put a “special” on Facebook and customers click a link. A mobile UPC code comes up on your mobile device and the business can scan the deal in-store, eliminating the hassle of printing for the customer.

This is just the beginning. The possibilities are endless. As technology advances and consumers continue to flock to the web, stop viewing Facebook as just a way to connect with friends and start seeing it as a way to connect with your customers on a very different level.

How are you using social media to market to customers? Does it work?

Austin

Still Don’t Get Twitter?

Zach — Thu, 17 Mar 2011 14:51:33 +0000

A little over a week ago something spectacular happened. I received a free Starbucks Giftcard. Now, this might not seem all that amazing to you, but let me explain.

On twitter I follow the CIO of Starbucks, @StephenGillett. I don’t remember how I found him, but he is definitely one of my favorite people on twitter. Not only does he post links to great content (and it seems as though he posts several an hour), he is also very responsive.

Below you can see one of his tweets:

Naturally, I responded with this (a link to my blog on The Gold Standard of Customer Loyalty):

Here is where the fascinating thing happened. For starters, the CIO of Starbucks read something I wrote. That’s pretty cool. But notice that in his tweet he mentions @StarbucksCard. The next day I get mentioned:

So, I send them an email and then get a free Starbucks gift card.

So What?

Starbucks is using Twitter in all of the right ways. For starters, their CIO is using it perfectly. Posting relevant content and being responsive to followers. On top of that, they have an account set up for their rewards program. They also have a standard account for their company that they use brilliantly.

Let’s take a peak at a screenshot I took of their twitter stream:

Just looking at a small section of their stream, they have the following:

1. Retweeted a tweet about their CEO’s upcoming book
2. They have responded to four separate followers
3. Tweeted a link to a free iTunes download
4. Tweeted a link to a new product (Cake pops)
5. Tweeted a general question to engage followers

But it’s more than just doing all of these things. They are doing them in the right quantities. They aren’t just blasting out links to new products. They do some of that, but they actually engage their followers. They also offer free things like music downloads.

Honestly, Starbucks is killing it when it comes to social media. Even if you aren’t a huge fan of Starbucks, I highly recommend following them. Why? Because they are awesome at social media! If you are confused about how to use Twitter, all you have to do is follow @Starbucks for a few weeks.

Zach

The Power of the re-Tweet

Austin Spitzer — Fri, 11 Mar 2011 15:00:43 +0000

Over a year ago when we were first starting out, Zach wrote a blog about how Newegg is beating Best Buy. The post itself was a hot topic and got a lot of traffic right away. At first I thought wow, people must love both of these companies and they are excited to discuss the topic (which they were). But we were first starting out, and how did all of these people find our site? Then Zach texted me and told me what happened. We had been re-tweeted by Newegg. We immediately knew how huge this was. Currently, Newegg has nearly 25,000 followers, and all those followers instantly had the ability to know about our blog. AMAZING!

Obviously, a re-tweet of this magnitude is not always common. In fact we have @mentioned plenty of companies and have not been re-tweeted or responded to. But all the times we have, we have killer posts, and just so happen to have the company notice our @mention.

The Other Side

Twitter is obviously a great way for customers to have their voices heard, and for companies to hear what people are saying about them. In today’s world this can be great or horrible. I want to focus on the great aspect. Last weekend, I went on a double date to Pei Wei, which I love. Their food quality alone keeps me coming back, but my last experience ensured I would be a lifetime customer. The other three people with me received their food in a timely manner, but mine didn’t come for about ten minutes. I didn’t say anything about it being late, but the food runner noticed how late it was compared to the other meals. Within 30 seconds the store manager came and sat down next to me, informed me that my meal and my date’s meal had been refunded, and handed me a $10 gift card for a future visit. WOW!

What a great testament for Pei Wei, and without the utilization of Twitter, Pei Wei and its customers would never know how great the situation was handled. The opposite can happen too though, as Twitter can be your nemesis if your delivery isn’t near perfect. For example, a few months ago I had a horrible experience at a restaurant and nothing was done to solve this problem. Lucky for them they didn’t have a Twitter. But imagine if they did.

Basically what I’m trying to say is learn how to use Twitter in the best way that benefits you. If you write a blog, a re-tweet can be great. Listen to what your followers are saying about you, and interact with them on a personal level. You’ll be surprised how amazing a tool in can be.

Also, I highly recommend you start following us on Twitter if you are not currently doing so. Trust me… it will pay off soon.

Three Lessons from ‘The Social Network’ Movie

Zach — Fri, 01 Oct 2010 18:07:07 +0000

Last night I had the opportunity of going to a special sneak peak of The Social Network, a movie retelling the story of the founding of Facebook (based on the book Accidental Billionaires). The movie and book have been criticized by Facebook founder Mark Zuckerberg as not being completely accurate. Regardless of how accurate the film was, it was very insightful and very entertaining. While we may never know the full story behind the founding of the social phenomenon, we can most certainly take a few things away from this movie.

Product > Profit

Both Zuckerberg and Sean Parker (founder of Napster and 6% stakeholder in Facebook) are found countless times throughout the movie expressing how important putting the development of the product over ‘monetizing’ is. A lot of websites have been started loaded with banner ads, etc. without considering how exactly their tool or service is better than what’s currently available and how exactly it’s going to be useful in solving everyday problems for people. Even further, lots of times businesses are started without a clear idea of how they are going to be useful, which ultimately leads to failure. Focusing on making an amazing product is critical to long-term success.

Who Knows You?

Regardless of the accuracy of the movie, it is obvious from the facts that the $500,000 angel investment from Peter Thiel was critically important to the rapid growth of Facebook in 2004 and 2005. This investment in Facebook very likely only occurred (or at least only occurred as soon as it did) thanks to Sean Parker’s involvement. What was critical wasn’t that Sean Parker knew Thiel, it was that Thiel knew Sean Parker. In business and in life, often times certain things happen solely because people know people. It’s important to remember that’s it’s not so much about who you know, but rather about who knows you.

Legal Representation

One of the large controversies with Facebook is between Zuckerberg and Eduardo Saverin. Eduardo was a co-founder of Facebook and initially a 30% stakeholder. In the movie, it depicts him negotiating a contract (post $500,000 seed investment) that increases his holdings in the company to 34%. He even says himself that the increase is so that if the company needs more funding his shares can be diluted. He then signs the contract.

Several months later, he comes back to Facebook to find out he now owns only 0.03% of Facebook. The big issue here is that he didn’t have legal representation during these negotiations. He did think the lawyers were ‘on his side’, but regardless in a deal this big you must have legal representation.

While the movie depicts these events in this manner, I’d be interested to know what actually happened here. My main question is with a $500,000 seed investment and with hundreds of thousands of users, why would Saverin ever choose to go back to Harvard? In one sense, if he didn’t understand the magnitude of Facebook at this point, maybe he deserved to lose his stakes in the company for the lack of commitment.

In the end, he and Zuckerberg settled for an amount unknown to the public. Further, Saverin now has a 5% stake in Facebook worth approximately $1.1 billion.

Worth Seeing?

Absolutely. A great and suspenseful movie definitely worth seeing. Realize that the events in the movie might not be completely accurate, but nonetheless insightful and enjoyable.

Zach