The Entrepreneurial Tightrope

J.C. Penney Earnings 1Q 2012: Retailer Has Huge Loss After Strategy Shift

philmasiello — Wed, 16 May 2012 18:55:12 +0000

Ron Johnson is a smart retailer. However, the mistake he has made here is simple…..culture….both the culture of the retailer and the culture of the consumer. The consumers have been trained to look for, and react to, deals. That is not a behavior that is easily changed.

Internally, the merchants are trained to purchase to the deal. The results we are seeing are simply moving too quickly and Ron Johnson believing that everyone will embrace it quickly. Unfortunately, he is correct in theory that his operating model idea is superior, but reality is that the customer will not embrace that change. Without sales, customers will never believe they got the best deal.
Read the Article at HuffingtonPost

Brian Dunn, Best Buy CEO, Resigns Amid Internal Probe

philmasiello — Wed, 11 Apr 2012 11:31:22 +0000

This is a classic example of “if you stay long enough, you will continue to get promoted”. Brian Dunn should never have been promoted above a VP level. That is the extent of his competency. Once you get to the senior levels of a company, you need to be a strategic thinker. You need to be able to lead a company on a new path in an increasingly changing and challenging environment.

I watched the CNBC interview with him and analysis of Best Buy in January of this year. The entire retail industry and more importantly the electronics industry, is rapidly changing. Consumer behavior is changing, entire categories (cd’s, dvd’s) are disappearing and cell phone sales remain their largest category. Here is Brian Dunn on national television telling the world that Best Buy needs to continue to do what they have always done and nothing needs to change. All I could think about was what is the plan for the entire center of the store when there is no need for those sections? What will you sell there? How are you addressing the way consumers are using your stores to research products and then purchase them on line through Amazon? This guy did not have a strategic bone in his body or a strategic thought in his mind. He has put the company at a disadvantage, yet he will retire a rich man. It is very sad for Best Buy as I am not sure they can recover.
Read the Article at HuffingtonPost

RIM Q4 2011: BlackBerry Maker Misses Expectations; Sheds Some Execs

philmasiello — Fri, 30 Mar 2012 14:32:14 +0000

The issue with Blackberry/RIM is clearly one of a lost strategy and trying desperately to play catchup. Unfortunately Thorsten Hein does not have what it takes to fix the problem.

As of this morning, RIM is going to focus on the enterprise market and move away from the consumer market. Obviously, the missteps of the company have been mostly on the consumer side with a lack of focus on smartphone innovation and a misguided tablet attempt. (why would you leave email access off of the tablet?)

In the past 2 years, the enterprise market has begun to embrace iPads, iPhones and Android driven devices and the simplicity of that operating environment and its security. Additionally, third party developers have jumped into the mix with outstanding applications. Restaurants & retailers have embraced the ability to use iPads and iPhones to check customers out anywhere in the store without having a checkout queue with dedicated registers. Business managers have embraced the flexibility of the tablet environment coupled with cloud computer storage to make decision makers more flexible and mobile.

What Mr. Hein should be doing is looking towards the consumer for what the next need may be. Enterprise models will make RIM a company with a very small, declining niche. That board put the wrong person in charge of that company at a very critical time.

My guess is RIM will be gone in 3 years.
Read the Article at HuffingtonPost

The Anti-Walmart: The Secret Sauce of Wegmans Is People – The Atlantic

philmasiello — Tue, 27 Mar 2012 18:36:38 +0000

I have to say that Wegman’s is a true retailer. Most supermarkets are not retailers, they live off of there real estate. People need to buy food so as long as you have a good site, you will do well until the competition moves in. Wegman’s truly understands their customer, respects their customer and has built a devoted following. A segment of their customer base travels over 20 miles to shop at their stores to buy groceries, passing a dozen or more food stores on the way.

The Anti-Walmart: The Secret Sauce of Wegmans Is People – The Atlantic.

Microsoft’s New IE9 Ad Is…Out There (VIDEO)

philmasiello — Mon, 19 Mar 2012 16:05:07 +0000

The problem I see with this approach from Microsoft is that so much time in the commercial is spent trying to make fun of itself and the remainder of the commercial is spent making fun of the subject. Not one feature or benefit was pointed out. Why is IE 9 quite good? What changed? Is it faster? Less cumbersome?

As a brand builder and risk taker, I find this approach to be ineffective with the desired result not being achieved. Frankly, it wasn’t even that funny.

A wasted effort I believe.
Read the Article at HuffingtonPost

Legal Issues Are Least Favorite Part Of Being An Entrepreneur: Survey Says

philmasiello — Thu, 15 Mar 2012 19:58:29 +0000

There is no doubt that tending to legal issues are a distraction for any entrepreneur or business owner. My partners and I have been in a protracted battle with some, not all,of our shareholders over an investment offer that we truly need to grow our present business. The issue…..valuation and dilution. We have spent weeks dealing with attorneys and conference calls to remedy the situation and the prospective investor is firm on his position. So, there are only 2 outcomes; 1 – we all agree to the deal and do what is best for the company to grow and achieve its potential or we do not take the deal and the company flounders. It is that simple but yet it has turned into a complex wave of arguments with the attorneys billing $240 an hour for having conference calls and sending letters.

My mother was right. I should have been an attorney.
Read the Article at HuffingtonPost

Building a Brand in the Age of Social Media

philmasiello — Fri, 09 Mar 2012 20:35:14 +0000

Simple Branding 101

It is an evolving consumer world today and what worked in the past is not working now or in the future. The old brand building model is dead and a newer, leaner, flexible model has arrived. One thing is for certain, every brand strategy is different. The new ways consumers connect with your brand today are driven by the various media channels that may be beyond your control. Understanding how consumers use these media channels to make purchase decisions and build a brand relationship is of paramount importance to the company.

Let’s take a car purchase as a good example. In the old days, people would start with the cars and features they think they want, whittle it down through Consumer Reports, price and test drives and then make the purchase. Once they drove the car off the lot, that was it. Their relationship with the dealer was pretty much over at that point except for some visits for repairs or free oil changes. Today a consumer looks at customer reviews and ratings for vehicles they are interested in. They are putting a lot more decision power on their peers rating AFTER the sale. They want to know about problems, issues, mechanical breakdowns, recalls and safety ratings supplied by bloggers, consumer posts and feedback. Once they narrow down their choices, they begins to look for the best deal and the best dealer. They will do the same research on how the dealer performs after the sale. Once they make their final decision, they will become an advocate or a critic of the brand and dealer.

Why is all of this important for a brand to know? This shift in the consumer decision process tells a brand builder that the budget must include as much spend POST sale as it does pre sale. The goal for every brand builder today is to turn customers into brand advocates because critics can get their message out on Facebook, Twitter, Pinterest and other sites very quickly and other critics will jump on board. This behavior can destroy a brands image overnight. Just look at the damage to the Komen brand image in less than a week when they pulled the Planned Parenthood funding. It is a long slow climb to repair the damage, if it can be repaired.

Brand marketers need to understand social media and how the customer uses it to make decisions. The investment in the post sale needs to be a priority and issue need to be addressed quickly. Don’t let problems linger. They can snowball out of control very quickly and destroy all that your company has worked for.

Customer Surveys: 5 Things You Need To Know

philmasiello — Wed, 07 Mar 2012 18:26:18 +0000

I am all for keeping in touch with your customers. Surveys, however, should be fast, simple, targeted at a specific focus and reward the customer for participating. A constant stream of communication is really what we want to achieve in business and with social media making it easy, we should have a continual dialog with our customers.

The old days of doing quantitative and qualitative in depth research are over. It takes far too long to perform, tabulate and act upon what it tells us. Everyday we have questions about our business that we want answered by our customer. With a Twitter directive, Facebook message, SurveyMonkey email, we can get those answers quickly. Plus, I am a firm believer in the CEO, President and SVP’s all calling 5 customers each week and asking simple questions:
1 – What do you purchase from us and why?
2 – What do you like about us?
3 – What can we do to improve?

Believe me, you will get an earful of actionable items and the customer will feel like they have a direct dialog with the company. Today, the quest is to turn customers into advocates of your brand.
Read the Article at HuffingtonPost

Business Owners Can Learn To Love Actuaries — While Still Hating Credit Scores

philmasiello — Tue, 28 Feb 2012 14:48:43 +0000

It is true. The issue we have with small business borrowing money from banks is the strict lending restrictions the federal government has placed upon them. I find it disheartening to listen to the present administration speak about how they are lending to small businesses. it is patently false. The SBA is very willing to back up loans to small business, but the banks who do the lending, cannot lend because they are restricted. It becomes a stalemate situation. The “small” businesses that can borrow are businesses that have at least 5 years of solid earnings are are doing over $20 million annually in sales. Not so small. AND, if you really look deeper at the list of “small” businesses that are continually being used as examples of lending, they are subsidiaries of larger companies.

As a brand builder and business owner, access to capital is oxygen for a company to grow. Right now, the system is severely broken and there is very little activity focused on fixing it. This will continue to be an issue with rebounding the economy.
Read the Article at HuffingtonPost

Venture Capital Sees Big Returns On Big Data

philmasiello — Sun, 26 Feb 2012 19:36:53 +0000

What I am most happy about is that finally, the venture funding is flowing again. From 2009 until mid 2011, venture funding was looking more like traditional bank financing with venture funds looking for a safe investment. This is quite contrary to the whole concept of venture capital, which is high risk and high reward capital.

I am continually looking at new business opportunities and always seeking ways to grow our existing brands. Funding is one of the most important aspects to growing any business and brand. The banking changes have virtually eliminated that funding avenue unless you are an existing business with 4 years of trailing profits. Angel funding and venture funding become THE source for entrepreneurs.
Read the Article at HuffingtonPost