An Age of “Micro Marketing”

Entrepreneur.com offers some interesting insights into trends related to American consumers. As I have written about related to the entertainment industry, mass marketing based on broad demographic categories is no longer the dominant strategy for reaching American consumers.
We are a country of “micro markets.” This plays right into the hands of entrepreneurs as micro marketing is what we do best. We love finding niches and giving them what they need. There are many factors that have helped to create today’s entrepreneurial economy, and this shift in American consumers is clearly among the most important forces at work.

Real Estate Related Overhead is Your Enemy

Overhead is the enemy of entrepreneurial start-ups. Every dollar that is spent on overhead is a dollar that does not make it to the bottom line. Precious operating profits get eaten up by overhead preventing them from becoming net profits. Bootstrapping space is one of the most common and effective means to keep overhead costs down for start-up ventures. Start in your kitchen, your garage, your basement; anywhere that does not require you to pay rent.
Anita at Small Business Trends points out the power of virtual space for start-ups in this post. Entrepreneurs can literally start businesses with the founders all over the country if they plan communication correctly.

Graduation Day

We had graduation on Saturday at Belmont. I always enjoy the ceremony, but this weekend was a special one for me. We had our first graduates from our entrepreneurship major walk across the stage. The very first was Jason Duncan, of the blog site A Thought Over Coffee, who is moving to Montana with his wife to start their new business.
Good luck to all of the graduates!

Bankruptcy Law Bad for Entrepreneurs?

Fortune Small Business has a column arguing that the new federal bankruptcy law will be bad for entrepreneurs. Why? They may be afraid to take certain risks.
(R)eader Johnathan A. wrote to say that he thinks the new bankruptcy law “will take away from the adventurous nature of small-business owners.” He’s already reevaluating his business plans: “As a small business owner, I will be less likely to take as many risks as I currently do. Expansion was a recent topic in my [business], but now I’m a little scared! If we blow it, I could lose my business, home, and personal savings.”
If a risky decision has a significant chance of bankruptcy, then it is not a prudent risk. So, if the new legislation keeps Johnathan A. from being “adventurous” that means that he will not take risks that may have an impact on other small business owners who are his creditors. Somebody has to pay for his aggressive decision making. Why not Johnathan A. himself?

New Age in Music, Media and Entertainment

Like many of us, the only time I read the USA Today is when I travel. We just got back from a trip to pick up our daughter from college. While in the hotel in Gaffney, SC I came across a feature that USA Today ran on the state of the entertainment industry. While much of it has been said elsewhere, it really provides a fascinating looking at where music and the rest of the entertainment industry may be headed. USA Today put together a diverse group of people who are helping to shape the industry’s future. As I read through the comments of the assembled panelists, I was struck by all of the immediate and longer term opportunities in the entertainment industry. Here are a few of the impressions I took away from their comments:
– What I am doing here this morning will soon be out of date. Blogs are just the early, archaic form of new ways to share ideas and communicate. The sprit of blogging will continue on, but its form will most certainly evolve and morph into other media.
– The market will no longer be such a “mass market”, but one that is full of product and market segmentation. The “long tail” of the market will become the focus of business development. The “long tail” refers to that part of the market that does not favor the popular choices in music and entertainment. They are made up of countless little market niches out there hungry for their specific interests to be satisfied. About half of the culture is in the very tall popular culture part of the curve, but there is an incredibly long tail of that curve that continues off to the right that contains all of the various sub-markets for entertainment. With this diverse group of consumers and new means to reach highly specialized market niches, the opportunities are limitless.
For example, there are bands making a nice living off of a very small, but loyal group of followers. They can reach them through the Internet in ways that build loyalty and intimacy that most marketers would kill for. Thousands of blogs have hundreds or even thousands of very loyal readers, who share a strong and passionate commitment to a common interest.
– New forms to catalogue, store and search through all of this media that will be at our fingertips in the soon to be wide open market will need to be developed. Think of it this way; right now I have all of my favorite CDs in a 200 disc player. I have little booklets that hold the covers of these CDs for me to look through and I have the CDs grouped in blocks by musical genres (classic rock, blues, country, folk, old jazz, new jazz, classical, and so forth). While this allows me to do some rudimentary searches for a specific song, artist or musical style, it takes time and effort for me to search through all of that. iPods have a more powerful search feature that allows you to search by title, artist, etc. Both of these are limited in space by the storage capacity and neither search feature is really satisfactory, especially when applied to an open market of music that will not be limited by or defined by any hardware that I happen to own. But how to we find and organize all of that? Certainly Google is not the answer. In fact, if the now corporate Google does not reinvent itself ten times over in the next few years it, too, will become irrelevant.
Soon you will be able to communicate your mood or the setting and artificial intelligence that has learned from your past decisions and information combined with an almost limitless database of entertainment will be able to, well, entertain you beyond anything you can now imagine.
– Advertising will need to reinvent itself as an industry, as well. Again, think of that long tail of little market niches that stretches on and on. Mass marketing techniques to a captured audience will not work in this space.
– The devices we use for music, video and other forms of entertainment in 2015 may not have even been dreamed of today in 2005. Convergence of our current devices is just an attempt to fit a bunch of round pegs into square holes. Eventually there will be a breakthrough or a series of breakthroughs. There will be another group of entrepreneurs like Steve Jobs and Bill Gates who will bring this new world of media technology to us.
– Even what forms media takes will change. Video, audio, the Internet, as we now know all them, will all seem like quaint antiques within a decade or two.

A Real Opportunity or Just Another Crazy Idea?

Market? Margin? Me?
Those are the three questions that my students hear over and over when they come to me with new ideas. One of the most important keys to becoming a successful entrepreneur is learning how to ask and assess these three questions. This is not the stuff of some full blown business plan. It begins, instead, with a simple, common sense look at the market.
StartupJounral explores the “Market?” question recommending that potential entrepreneurs use easy to gather data, that often is right at their finder, tips to validate their ideas. Talk to people in the industry. If you don’t come across as selling they are usually happy to give you their opinions. Use the Web to gather information on major trends that may help or hurt your idea over the coming years. And get to know how your potential customers think and what is really important to them in making purchasing decisions.
Find out if the idea is a non-starter before you invest your time and other people’s money in the deal. Learn to fail on paper.

An Underserved Market: Americans with Disabilities

Disabled Americans have more freedom of movement, more access, and more opportunities than ever before. Fortune Small Business examines this growing market.
“After he had driven four hours to buy a wheel-chair that would allow him to play tennis-and was ignored by the salespeople at the company that made it-John Box was so angry that he decided to do something about it. When Box returned home, he and a brother, both engineers, teamed up to invent their own athletic-oriented chair. Box was soon marketing it at the wheelchair tennis matches in which he competed around the country.”
As we baby-boomers are now old (no longer getting older–just old according to my students), this market may become even larger over the next 20-30 years. Even today this market includes about 50 million Americans.