The marketing arms race (for board directors)

By | Content marketing, Marketing strategy, Thought leadership, Uncategorized | No Comments

There’s a bunch of analogies between non-executive directors and venture capital firms. But the most important one is for a long time they’ve both succeeded on a “rich get richer” model.

The ‘rich’ get ‘richer’ in both venture capital and board directorships

Ben Horowitz is a founder of Andreessen Horowitz (US venture capital firm). He’s also broadly recognised as one of the most influential people in technology right now.

In 2015 Horowitz gave an influential lecture at the Stanford Technology Ventures Program. In the lecture Horowitz talks about this idea that for a very long time in venture capital there were five leading firms. And those five firms got richer and richer by the year. Because the more deals they were involved in, the more deals came to them.

Like venture capital, the way you get elected to a board hasn't changed for a long time. A rich get richer effect means the more prestigious boards you currently sit on, the more attractive you are as a candidate

Like venture capital, the way you get elected to a board hasn’t changed for a long time. A rich get richer effect means the more prestigious boards you currently sit on, the more attractive you are as a candidate

The analogy to non-executive directors is pretty clear. For a director, the more prestigious boards you sit on, the more attractive you are as a board member. So the ‘rich’ get richer and secure the most exclusive non-executive director jobs.

That’s all very interesting, not entirely unexpected and completely unhelpful. What is very interesting and helpful is how Andreessen Horowitz broke this model and built the most influential venture firm in less than 5 years.

Andreessen Horowitz broke the rich-get-richer model in venture capital with a marketing ‘arms race’

As a venture firm, Andreessen Horowitz did something that no-one else had ever done in venture capital. They started marketing. And in a market where nobody has ever done marketing, that gets amazing cut through.

This strategy wouldn’t work today, because it’s now the default that every venture capital firm markets as aggressively as Andreessen Horowitz. So the strategy took them to the top of the market, and then closed up behind them.

It was basically the great marketing arms race in venture capital. Hear Ben Horowitz describe what happened at 33:15 of this lecture. 

My analogy to non-executive directors is pretty clear. If you want to get on boards, there’s a real opportunity to get cut through by marketing your opinions, your skills, your thought leadership. Almost nobody is doing this today. This will be hugely effective whilst there’s hardly anyone doing it, moderately effective when a few people start doing it actively, and then will be required ‘price of entry’.

As a non-executive director, you can either choose to lead or follow into the marketing ‘arms race’

As a potential non-executive director, you get to choose if you lead or follow into the marketing arms race. If you lead, you will get disproportionate rewards – in a similar way to Andreessen Horowitz in venture capital.

There is real first mover advantage in play with non-executive director marketing. As more and more NEDs start copying, the likelihood of your opinions standing out decreases. It’s your choice when to start – but have no doubt that In 5 years time all NEDs will be actively marketing what makes them different, unique and expert.

How to predict the future of your industry (and why it matters)

By | Thought leadership, Uncategorized | No Comments

No, I'm not really sure what it is either...

This friendly looking contraption was seen as the future of oceanography in 1963.

One of the hard truths about thought leadership is that it requires you to either predict, or create the future.

That doesn’t mean repeating the same ‘bold’ ideas that everyone in your industry already accepts as “the next big thing”.

For example: in technology today you can’t build thought leadership today with the idea that cloud computing is the next big thing. There’s no ‘leadership’ in that opinion, because 99%+ of the market already believes it to be the case.

Industry leadership requires you to generate opinions about the future that are differentiated. Your opinions must go above and beyond what most of your industry believes to be their future.

Takeaway 1: Thought leadership requires predictions about the future

Takeaway 2: Thought leadership requires predictions that aren’t already believed by a majority of your industry

That’s a short introduction into why thought leaders must predict the future. Now let’s talk about how you do it, with five big ideas to help you craft predictions about the future of your industry:

1. Just start (predicting what might happen in 10 years time)

The most important thing about predicting the future is to start doing it. Forget about some of the more detailed methods we’re going to talk about below. Just get into the habit of saying “In ten years time I think…” 

Takeaway 3: Start by predicting at a 10 year horizon.

Start by forcing yourself beyond the traditional 12 month forecasting window, and remember this quote when you think you might be overdoing it:

“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.”
– Bill Gates

It’s really hard to get started, but there’s definitely a snowball effect. Once you start thinking at this timeframe, it gets much easier. You’ll quickly start connecting the dots around your predictions for the future.

Takeaway 4: The more prediction you do, the easier it becomes. 

Deal with the fact that you will be wrong about some things. That’s ok. Over a ten year window even the most experienced predictors will be wrong about many things.

But being wrong over the long term is less relevant that how well you establish the inevitability of the change. Because the 10 year future is most powerful as a catalyst for shorter term action. If the 10 year future comes with inevitability, the buyer may as well take action now – because they will have to at some stage in any case.

Takeaway 5: Accuracy matters. But inevitability matters more.

2. Extrapolate on patterns you already recognise

I was recently reading the fantastic Moonwalking with Einstein – It’s a NY Times bestseller about competitive memory championships by Joshua Foer.

It’s a great read. The author starts out reporting on the US memory championships, and gets sucked deeper and deeper into the world of competitive memory – eventually winning the US championship.

In the book, there’s a particularly interesting section talking about how experts become experts. Did you know, that in every chess grand master’s development, there’s a point at which memorising the board becomes effortless? It becomes so easy for the budding chess master to memorise the board that they can play multiple games, straight out of their memory.

But an amazing thing happens if you arrange chess pieces on a board in a completely random fashion, in a pattern that could never have happened during normal gameplay. When the pieces are random, chess grandmasters has practically the same memory for the board as anyone else – completely hopeless.

Identifying the patterns of gameplay (each seen thousands of times) that allows such impressive and quick memorisation. In fact, MRIs of expert players show that the main part of the brain accessed during a chess game is long-term memory, not analytical reasoning (which is the case for beginners).

 

6081774763_ef88a6e740_z

An expert beats you because they’re better at pattern recognition. Not because they’re smarter.

The grandmaster doesn’t beat you because they can think ten moves ahead of you. She beats you because she can immediately identify the analogy to millions of previous games played.

This goes much further. In just about all fields, experts don’t win because they’re smarter. They win because they’re better at recognising patterns.

Takeaway 6: Expertise is pattern recognition

To connect back to thought leadership, I’d argue that every CEO and senior executive satisfies the criteria as an “expert” in their field. So if we buy into the idea that you’ve reached the top – not because you’re smarter – but because you’re better are recognising and acting on patterns, what does this mean?

In this case, building predictions isn’t about reasoning. It’s not about analysis. It’s about connecting the dots between the different patterns that you know to be the case. Once you’ve started there, it’s easy to take the next step and start identifying new patterns.

The first step is consciously realising the patterns that you already recognise. What are the big ‘patterns’ that sit underneath your expertise?

“It is said that the present is pregnant with the future. “

Voltaire 

3. Go from first principles

In How Google Works, Larry Page explains: “When I was younger and first started thinking about my future, I decided to either become a professor or start a company. Either option would give me the freedom to work from first principles. This autonomy of thought is behind almost everything we do at Google, behind our greatest successes and some of our impressive failures.”

Peter Thiel says in Zero to One: “The paradox of teaching entrepreneurship is that such a formula necessarily cannot exist; because every innovation is new and unique, no authority can prescribe in concrete terms how to be innovative. Indeed, the single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas.”

Takeaway 7: Pull your industry back to first principles. What widely accepted truths does this call into question?

4. Predict from history. Past cycles will repeat

History has a way of repeating itself. As George Santayana famously said:

“Those who cannot learn from history are doomed to repeat it.”

There are many patterns in every industry that have happened over and over again. There are lessons that have been learnt many times. Find the patterns within your industry from the the 60s, 70, 80s, 90s. etc.

Many, but not all of these patterns and cycles will repeat again in the future. The technology may have changed. But human nature has not.

Takeaway 8: Previous cycles within your industry will repeat. The technology may have changed. But human nature has not.

5. Learn from research and start with the outside view.

The latest research on forecasting shows that the best forecasters regualarly use something called the “outside view” when predicting the future.

This is a great quote from the Freakonomics podcast on “How to be less terrible at predicting the future” :

“One of the more distinctive differences between how superforecasters approach a problem and how regular forecasters approach it is that superforecasters are much more likely to use what Danny Kahneman calls the outside view, rather than the inside view. So, if I asked you a question about whether a particular sub-Saharan dictator is likely to survive in power for another year, a regular forecaster might get to the job by looking up facts about that particular dictator in that particular country, whereas the superforecasters might be more likely to sit back and say, “Hmm, well, how likely are sub-Saharan dictators who’ve been in power x years likely to survive another year?” And the answer for that particular question tends to be very high. It’s in the area of 85, 95 percent, depending on the exact numbers at stake. And that means their initial judgment will be based on the base rate of similar occurrences in the world. They’ll start off with that and then they will gradually adjust in response to idiosyncratic inside-view circumstances.”

Takeaway 9: Start with the outside view.


If you enjoyed this article, you might love our weekly reading list of marketing ideas worth talking about: Subscribe to the weekly reading list here

Crazy ideas + Inevitability = Thought Leadership

By | CEO blogging, Uncategorized | 2 Comments

A key ingredient in thought leadership is inevitability. Thought leadership without inevitability often sounds “crazy”.

  • As a thought leader, you’re speaking about ideas that are dramatically different to current “best practice”. This means that there’s always a risk that you’ll be perceived as somewhat ‘crazy’.
  • You can mitigate this risk by positioning your ideas as the inevitable future – whether the reader/listener accepts this or not.

Transcript

At TLP, we do a lot of thinking about how to make sure business blogging translates to sales. A big focus of this thinking recently has been about the role of inevitability.

Why this is so important in the context of a business blog is because as soon as you get out there and start practising real thought leadership – introducing new and really innovative ideas that are different to industry practise, there’s always the risk that you’re going to sound a little bit crazy.

To make sales and be perceived as innovative depends on your position of inevitability

When you are innovating, when you’re talking about things that are different to conventional practise, you will be perceived by some people as cuckoo. That’s the really hard thing about thought leadership. If you want to lead the thinking in the space, you’ve kind of just got to deal with that. There are ways to compensate. The big way to compensate here – to make sure that you’re going to make sales and you’re going to be perceived as innovative, not the crazy end of the spectrum, is really coming back to how you position this. The positioning has to be around inevitability of change; that this is the inevitable future whether you like it or not.

For example, if I wanted to talk to you about say video blogging in 3D or virtual reality, it might be a great future, it might be completely incorrect – but it’s definitely a new idea and it does have the potential to sound pretty crazy as we talk today.

Blog about ideas that reflect inevitable future to become a thought leader in the space

If I want to come off as a thought leader when I’m talking about this topic, I really need to position that this is an inevitable future that we’re heading towards. For instance, it’s going to happen because of the shifts in technology and in consumer preferences. There’s going to be an expectation of emersion. There are reasons a, b, c, d and e, that I’m completely convinced that this is a future we’re heading towards and that your only choice as a buyer here is whether you want to get on board today or in five years’ time.

That’s an easier kind of decision for someone who’s listening and engaging with your content to buy into, whether it’s now or future, rather than whether it’s ‘is this right’ or ‘is this wrong’.

I think coming back to sales, we can all kind of empathise that ‘crazy’ doesn’t sell but ‘inevitable’ does. We want to be on the next big trend. We don’t want to be following the crazy guy around dancing down the street. The more out there your ideas are and that you’re talking about them, we all kind of sit somewhere on this spectrum in everything we do, the more effort you need to put into making those ideas seem inevitable. If you’re a long way away from doing this in your practise, there are probably a few more data points, a few more facts you need to bring in, to really kind of position this as an inevitable future.

In conclusion:

If you’re building a blog that’s got a real degree of thought leadership content, that’s different from standard practise, this is something you can pick up with on your final draft. It doesn’t usually have to be big changes but a few shifts around wording, maybe a fact or two, can really position you as the future that you can’t get away from.

Too busy