Monthly Archives: January 2009

Business Model Innovation in the Arts

The Economist: Musicians are finding clever ways to pay for the tools of their trade (premium content)

This is an article I read back in 2006 but somehow failed to post about until now. I remember being particularly interested in this article because of how musicians have managed to utilize a technique in raising fund–one that you usually only see in corporate arenas–into their practice. And I suppose it begs the question, who was the first to think of doing this? And what was the thought process that brought it about? Was it just an accident or deliberate? I probably will never know the answers to this, but wouldn’t it be interesting (and, I would imagine, vastly valuable) if I did?

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The Art of Building Whatever

Dead air, or air that does not move, provides the same or perhaps nearly the same insulating characteristics of a vacuum. This is the reason why Styrofoam is such a good insulator: it’s not the material, but the dead air that the material traps, that produces excellent insulation. This is the same principle being exploited in glazed windows wherein two glass panes are installed parallel to each other as closely as possible, just enough to produce dead air between them.

Now, this post is not an attempt to change the focus of this blog to something more technical or scientific. Neither is this meant to show off my intellectual prowess in the realm of physics (I am almost certain I am missing a couple of scientifically critical facts in the above paragraph). Rather, it’s an attempt at being creative in introducing a couple of questions that I had in my head early this morning: What do I do with facts like this hanging around in the drawers of my memory such that it contributes to my productivity as a product manager (or more generally, an entrepreneur in training)? How do entrepreneurs such as Steve Jobs manage their general knowledge in such a way that it produces innovations out of seemingly disparate areas of thought? Continue reading

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new media + old business model = ???

DISCLAIMER: I’ve no direct connections with Inquirer.net or the Philippine Daily Inquirer and these opinions are based on nothing more than an outsider’s point of view. Feel free to read on while taking it with a grain of salt. Would be good if you could comment on it too.

Interesting news about how Inquirer.net is folding and will be absorbed by its parent the Philippine Daily Inquirer (read here). It might seem surprising that an organization built on top of new media would be packed up and returned to its old media parent which supposedly belongs to a sector which is dying itself (Example. search for more in Google). On the other hand, when I look at how Inquirer.net is designed, it seems as though it’s built on the same business model as its offline counterpart. Sure it comes with the usual Web 2.0 bells and whistles such as an RSS feed, tag clouds, and spaces to add comments here and there. But in general, it still feels a lot like an online carbon copy of the print version. I don’t know about you, but if that’s the case it doesn’t really offer me anything new and if I wasn’t much of a fan of the printed version, then what makes you think I’d suddenly be a big fan of the online version? Because it’s free? Not good enough. I like the free stuff from the Internet not because they’re free but because they have an innate value to me in the first place.

Furthermore, from what I see as an outsider, it also appears that their revenue model is a lot like the paper version’s: Ads peppered across the site (they have other paid services but I doubt if it makes them enough money). Might be a good enough means in a booming economy, but when the tides change (and drastically in the case of the past few months), advertising as a revenue stream isn’t so reliable unless you can provide advertisers with an excellent set of tools that allow them to gauge and even directly manage the effectiveness of their campaigns (think Google AdWords). Their media kit tells me that they charge by ad impressions and that is it. They don’t appear to provide tools that actually allow advertisers to gauge how many leads their ads generated. The best that the media kit can do is cite a survey by AC Nielsen. This is where Google AdWords excels and where traditional media companies fail to this day.

Taking these two things into consideration, it’s not so surprising therefore that Inquirer.net is folding: There really was no significant innovation other than on the cost side (going on the Internet potentially allowed them to increase their readership without incurring the costs associated with the old media such as ink, paper, and physical distribution). Cutting cost is nice, but you can only do so much with it. This development should serve as an example to the many other newspapers in the country who are thinking about taking advantage of the Internet.

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Thoughts on Entrepreneurship – A Year Later

So it’s been more than a year since I finished my postgrad and it’s almost a year since I started working as product manager for my current employer. What has changed since then? A lot.

First off, I want to start by describing what my job is all about since I’ve found that a number of my coleagues just go ‘huh?’ when I tell them my job is. Even worse, some equate it to project management. I can’t blame them though, I think it’s not the best choice of words for a job description but that’s what most industries are using these days so there you go.

Product Management = Marketing

Yes. That’s basically it. Why would anyone invent another term for Marketing? There’s a short and long version of the explanation and if you’ve been following this blog in the past, I’m sure you’d have guessed by now that I’m going for the long version.

Marketing is summarized by the four P’s: Product, Pricing, Promotion, Place. The first term, product, refers to the product’s design and how it’s supposed to fulfill the target market’s needs and wants better than the competition, The second term, pricing, is all about the pricing strategy of the company which has a lot of implications on not only how it effectively competes with the industry, but also on how the customer perceives the product. The third term, promotion, is not just about promotional discounts and other promos (this is the unfortunate drawback of trying to shoehorn a long definition into four letters), rather it refers to how the company communicates the product to market. This includes, but is not limited to, advertisements, events, websites, and proverbial mugs and t-shirt campaign style. The last term, place, is not just about the physical location where you sell the product–It’s more about the channels that you use to reach your customer. Basically, there are two major channels that a company uses: direct and indirect. Direct is where you sell directly to customers like Apple through iTunes or their Apple Store. Indirect is when you sell through dealers and re-sellers.

Unfortunately for us these days, when folks say “Marketing” what usually comes to mind is just the second half of the four P’s: promotion and place. When people say Marketing, they usually are thinking about the proverbial mugs and t-shirt campaign. People think about how to craft the message and build up the hype to increase product sales without changing a thing about the product itself. Nothing bad in that inherently, but if that’s all that Marketing does, then the company is doomed.

And this is how Product Management was born. Product Management is an attempt to bring back the first half of the four P’s to the company especially the first one. It’s about remembering to listen to the market and factoring their inputs into the product’s design. It’s not about technologies and putting in the most cutting edge features. Rather, product management is about optimizing the product so that it serves the market well and provides the right profits for the company.

I’ll talk some more about what I learned in 2008. I’ll try to update this blog once a week. In the meantime, here’s a great downloadable from Pragmatic Marketing: The Strategic Role of Product Management.

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