Tag Archives: innovation

Everything I Have Learned From Business, I Have Learned From Wu-Tang Clan

The most duplicated, anticipated, validated
Urban legends in the books with the ones who made it
Highly celebrated, everything was work related
Current top 40 got the Wu deep in all their business
20 years Killa Bees, yeah, we hold the pennant
Monumental stance on the cover with my co-defendants
Drop her sentence, in remembrance
Construct these jewels so they can live through my descendants
-U-God (A Ruckus in B Minor)

As some of readers of this blog might know, I have always been quite deeply involved in hiphop. Although I don´t rhyme or deejay as much anymore, I still collect records and try to follow latest music as closely as possible. Recently I was asked to write a story about Wu-Tang Clan for the biggest Finnish music magazine Rumba. If you are Finnish reader, I recommend reading it.

Wu-Tang Clan has been one of the most influential bands for me and they shaped my teenage years profoundly. What is remarkable of Wu-Tang Clan, that they were not only able to do classic albums, they build a successful business imperium as well. Regardless of your personal preference regarding hip-hop, there is quite a lot to learn from Wu-Tang Clan:

1.You Need A Good Logo
wutang

Wu-Tang Logo is legendary. The basic version with black & yellow colorway shines like Batman pattern at night. The logo is also flexible and works in different shapes, colors and adaptations.

2. You have to have a strong leader
rza

The musical peak of Wu-Tang Clan is still their debut album. That was also the time, when their leadership was most firmly at the hands of one person: RZA. He produced the album and fierce members of Wu-Tang were freestyling against each other in studio to secure a slot on the album. In later years, the egos of certain members of the group have gotten bigger and there has been more turmoil regarding the artistic direction. Unfortunately the democracy has not necessarily been that successful for them artistically.

3. Do your own thing

Wu-Tang Clan borrowed its subject matter from old Kung-Fu movies and the sounds were lifted from dusty soul albums. That was totally unique at that time. It was not tested in focus groups, did not have market research behind or was not anything really that was ever done before. Quite often you cannot predict what people want, you just do something you believe and hope for the best.

4. Nurture your talent
“We reinvented the way hip hop was structured, and what I mean is, you have a group signed to a label, yet the infrastructure of our deal was like anyone else’s. We still could negotiate with any label we wanted, like Meth went with Def Jam, Rae stayed with Loud, Ghost went with Sony, GZA went with Geffen Records, feel me? And all these labels still put “Razor Sharp Records” on the credits. Wu Tang was a financial movement”
RZA

Wu-Tang Clan as a band has sold 6.5 million albums in US. Overall they have sold 40 million albums worldwide. That number includes the individual solo albums. What was a strike of genius from RZA, was that every member of the group was able to get their own record deals from another record label. This enabled that almost every major record label had at least one Wu-Tang artist on their roster. Solo albums might have diverted the attention from the group effort, but from individual artists it was great. Especially in the beginning the sales figures were outstanding for the each individual Wu-Tang solo album as well.

5. Expand

Wu-Tang Clan was not only about music. It was about merchandise (Wu-Wear), tours, movies and even video games. The business part was always totally integrated to the music as well. Above song is called Wu-Wear: A Garment Reneissance and it is a legitimate song, but at the same time you can also view it as a blatant advertising. Wu-Tang Clan never sold out, they sold in.

6. But Don´t Expand Too Much

At some point, there was new album coming from random Wu-affiliate almost every month. This was the time before streaming, online mixtapes or even well-developed piracy, so if you wanted the records you had to buy them. Naturally the quality was not always that good and there was definitely certain Wu-fatigue at the end of the century. For example, the video below features “the youngest” member of Wu Shyheim. That song in question was probably as good as it gets, but generally no one really remembers him or any other of those loosely affiliated Wu-wannabes. Already in 1994 there was over 300 Wu-Tang affiliates.

Licensing business is the best business there is, as you it is essentially opportunity to print money. You should not license your brand to anyone, as you want retain some scarcity and appeal of your brand. Stamp of Wu-Tang Clan was commoditized at the turn of the century, but lately they have tried to regain some exclusivity. Maybe it is too late already?

7. Keep Innovating

This December Wu-Tang Clan released their new studio album “A Better Tomorrow” (which was also distributed as a bluetooth speaker). That is no the whole story though, there is also album called “Once Upon Time in Shaolin”, but there is one catch. There is only one of them in existence. Apparently someone has already offered 5 million of it as well. The music business is in ruins, but at least these hiphop-veterans keep on trying.

If you are interested more about hiphop and business, I recommend reading “The Big Payback: The History of The Business of Hip-Hop”, a brilliant book by Dan Charnas. It has great coverage of Wu-Tang Clan as well. Besides that I also recommend listening to Wu-Tang Clan regularly. It is good for you.

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Anatomy of An Insight: Bud Jukebox

Marketing alcohol brands in bar setting is a delightful task, because generally your audience is quite willing to hear your proposition.

One of the smartest gimmicks I have encountered was in Divine Bar. When you order a wine bottle, “a wine fairy” goes to fetch the bottle with cable. The whole order was part of performance. It definitely got our group to order bottle of wine instead of just having regular pints. Actually they could even up the ante by placing the most expensive wines the highest to encourage even more splurging:

Wine Fairy

“Wine Fairy” reaching for the bottle in the middle of the picture (sorry for the blurry picture, it was a blurry night)

The following Budweiser activation is a brilliant idea merging together promotion to sell more beer and providing actual value to the consumer:

Budweiser – Bud Jukebox from Bruno de Carvalho Barbosa on Vimeo.

Insight: Choosing a beer in bar setting is quite arbitrary. You either choose what is on the tap or go with the best promotion. How could you do the beer promotion so it would have a little bit more idea on it? What value could you provide which goes beyond traditional discount?
Jukeboxes are social glue in bars. There are always people who want to play some music and also pay for it. What if you could have jukebox, which works with only Budweiser beer caps? Would you select Budweiser instead of Miller to get that “currency”?

The idea is just perfect for the bar setting: fun, simple and relevant for the product. Not to mention increasing sales of the product. I love ideas where you turn a neglected part of the product (this time beer cap) to something valuable.

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Who Will Be The Master of Internet Universe?

Web is dead.

That is the title of one of the greatest articles ever written about digital revolution four years ago to Wired. The main points about that brilliant piece are still valid, although speed of mobile revolution surprised many of the players for a while. The main idea of the story is that web starts to resemble more and more traditional industry with handful of players. Web is oligopoly and certain verticals almost resemble monopolies.

If you simplify the consumer-facing web business (so I am excluding infrastructure and other boring things which is where the real money is), it is about three things: products, commerce & advertising. Products enable you to connect to the Internet: smartphones, computers, watches, television sets, fridges and whatnot. Commerce is about being able to buy things from Internet and advertising is what it is: bombarding you with messages to buy more stuff.

Product category as we know it will eventually be commoditized. If you want to remain premium, you have to innovate constantly. That is the only way to remain luxury brand in this realm. Cheap smartphones will eventually beat the premium ones. In the future you are able to connect to Internet in whatever device and you do not really have to pay that much of that privilege.
Where the growth will come? Wearables can be the future winner product category, although they have not really yet taken off. The changes are rapid though. iPad was launched only four years ago, created totally new category and is currently at risk of vanishing because of the phablets. So is the life.
 
Current champions: Apple, Samsung
Challengers: Xiaomi and other cheap manufacturers
Disrupters: Luxury brands (Would connectivity enhance Rolex? I say not, but I might be wrong as well)

Commerce will become even bigger and you are able to buy pretty much everything online. Will all the physical retail vanish? Not necessarily, but the point is not about that. It is about that you are able to buy everything online, and majority of people will do exactly that, because it is more convenient and affordable.
Commerce is the biggest opportunity and a space I follow most closely. Strong brands will definitely start to create their own online retail experiences, which would enable them to bypass the more traditional retail channels. In the next decade there will be lots of turmoil in this category and many big players will fall and new challengers will arise. Biggest challenges are not that much about technology (lots of payment innovations happening), but about logistics.
Second interesting point is that idea of commerce has changed with shared economy. Both Uber and AirBnB are selling physical service, which would not be possible without digital channel. How far collaborative economy can be stretched remains to be seen. It can potentially be really big disruptor to the way we do business in general.
Last point about commerce is the ecosystem approach. Apple makes money constantly through App Store by enabling others to make money. Facebook is building app ecosystem with the acquisition of Instagram, WhatsApp and Parse. Both Amazon and Alibaba are enabling developers to build things on their platform.
 
Current Champions: Amazon, AliBaba, Ebay
Challengers: Google, Facebook, WeChat, Line, Apple (Apple Pay) 
Disrupters: Brands, FMCG brands, Collaborative economy players (Uber, Airbnb…)

Advertising will be important, because people will keep on buying stuff. Stuff makes us happy. More stuff makes us even happier. How are you able to buy that stuff if you do not know that it exists?
Will advertising become smarter in the future? Yes and no. In last decade or so, we have had one revolutionary advertising idea. That is SEM. You show people ads when they actually want to see ads. Contextual advertising and retargeting have been nice inventions, but mainly advertising is still based on interruption (some of it being more relevant like app install ads). One of the most innovative companies in the world, Facebook, makes most of its money by interrupting its users in various ways.
The advertising business is relatively simple: it is all about reach. All of the most successful advertising platforms are based on firstly to reach and then secondly the quality of those who you are reaching. That is unlikely to change. However, the biggest task is to try to narrow the gap between the interruption (advertising) and purchase (commerce). The monetary exchange is the only tangible KPI we have and less you have to travel to do it, the better.

Current Champions: Google, Facebook
Challengers: WeChat, Line, Twitter (was tempted to leave it out completely, but I give it a shot still), “Traditional media companies”(although I do not really have high hopes for their complete digital transformation, but they will remain influential on this space as well)
Disrupters: Amazon (the closer you are to the actual transaction, the less you have to interrupt), Content owners (although none of them has done any major moves and have mainly milked the status quo)

The lines are naturally blurry. The quote from Eric Schmidt summarizes the whole situation:

Many people think our main competition is Bing or Yahoo. But, really, our biggest search competitor is Amazon. People don’t think of Amazon as search, but if you are looking for something to buy, you are more often than not looking for it on Amazon.”

That is also the reason why these big companies are testing weird things and buying obscure companies. Internet has made it easier to disrupt a category and also connect categories in new way. Facebook & Google test drones, so it can bring Internet the people who don´t have it yet. Thus increasing the reach. Amazon tests drones, because shipping is the biggest bottleneck of eCommerce. When your business can start to flourish rapidly, it can also vanish rapidly. There is no time to sleep, because sleep is the cousin of death.

What do you think, who will become the master of the Internet universe?

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Anatomy of An Insight: Base + Spotify PartyDrone

I thought that everything there were left to say about drones was in this ad:

Luckily I was wrong, because this is really nice:

Insight: Many festival sponsors try to catch the attention in the actual festival area. That is hard, as you are competing of the attention with the main attractions: the bands. Therefore wise marketer uses places that are not that contested. Like in this case the route to the actual festival area. Especially in the Nordic music festivals, camping area is quite untapped potential for many marketers and people actually craving for entertainment. Personalization was nice added bonus, but I think that just bringing music and entertainment to places which do not have those, is a great insight and idea.

I see potential for this idea to be used in further campaigns for Spotify as well and not just a one-off. In general, I feel that Drones are perfect fit for surprise and delight –campaigns. Just as long you remember that drone is not the actual idea, but what inspiring, innovative and insightful you can do with the drone.

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“When I didn’t have a mic, I rapped on headphones”

Although I am white dude from suburban Finland, I have always been quite serious hiphop-head. This song below has always been one of the favorites. Raw simple drums and raw battle rhymes. That is all you need in a perfect hiphop-song:

One Charizma line has become a legendary hiphop-quotable from the song. It is almost like a rally cry for the indie hiphop movement and DIY spirit in mid 90´s and early 2000:

“ When I didn´t have a mic, I rapped on headphones”

For those who know, in the absence of microphone you can usually plug headphones to microphone input of mixer (I have done that as well). More street credible rappers have also been known to rap their records in telephones from jails. However, the line has lived on through the years within the song and also with this cool t-shirt designed by Parra:
tshirt
Now 18 years later, this legendary line has found again a new life with this awesome collaboration by headphone brand AIAIAI and legendary West Coast record label Stones Throw records. You can actually get to the record by rapping to your headphones:

This project is a great example that although you do a contest it can have some innovation with it. The contest promotes actual product launch. Many headphone brands do bespoken collaboration products and some might also do music contests. Stones Throw & AIAIAI have been one of the best ones creating quite holistic and enjoyable consumer experience from the website to the app. Because of that legendary Charizma line, it also makes perfect sense for headphone brand.

Also a good example that you should mine your good ideas way more often from old underground rap songs.

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Anatomy of An Insight: Meat Pack Hijack

I had totally slept on this, but luckily was shown it today in a meeting.
Entertaining and effective loyalty idea from this Guatemalan shoe store Meat Pack:

Insight: Most brands and companies are struggling with the top-of-mind. Consumers are promiscuous among brands. There are not many monogamous relationships with brands. If you are able to make your customer think about your brand, when they are shopping around, you are already having the upper hand. If you are able to make them come out running from that same competitor store, you are most likely winning.

Other lesson: If you are challenger brand, you should act like challenger brand. Although you might offend certain big players, your fans will just love you more.

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Anatomy of An Insight: Fartcode

If you are not even slightly entertained by flatulent humor, there is probably something wrong with your emotional state.

“You don’t have to be smart to laugh at farts, but you have to be stupid not to.”
Louis C.K.

Gas is always a blast for me, so not surprisingly this was highly entertaining:

Insight: Kids are not interested in nutritional value of food. Nutrition in food makes you fart. Fart equals fun. Educate kids through farts about the nutritional value of food. Get smart with your fart.

Nice touch on this app, combining utility and social sharing.

Only question with this brilliance is will it really appeal to kids (kids referring to anyone younger than me)?

The look & feel is actually more resembling an episode of Beavis & Butt-Head from 90´s and the song could have been lifted from the glory days of Epitaph records skate-punk.

Is it something that resonates more with us middle-aged kids than the real target audience?

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#AmazonCart: Innovation in Advertising (not in eCommerce)

I am somewhat skeptical about utility marketing.
Yes, brands should be useful.
But as far as the advertising goes, most of the brands are fighting with the lack of attention. They need to first crack the indifference barrier amongst consumers. For that you have to first entertain and then deliver.
To underline this point, brand apps are generally destined to fail. Over 80% of them struggle to get even 1000 downloads.
That being said this is useful marketing at its finest:

Why this approach rocks?

1. #Amazoncart taps to real behavior
People already use Amazon as a “shopping list” for their future purchases. This just makes it couple of clicks more easier. At its core, this is not really educating new behavior just a minor tweak to existing pattern. I think tapping to the shopping list behavior is the core thing and also something that many of the commentators have not fully grasped. #Amazoncart is not innovation in eCommerce it is an advertising innovation:

2. #Amazoncart is free advertising with every tweet
Besides being rooted to real behavior, every time someone tweets #AmazonCart it will be visible to followers of that person. Making #AmazonCart hashtag famous is one thing, but actually what is the most brilliant part that the amazon product link gets double exposure as you add to Amazon cart by replying. This creates more opportunities for people to see it and go buying in Amazon.
Currently it seems that the amount of #Amazoncart seems already promising (from Hashtags.org):

#Amazoncart

Naturally these are small drops in the ocean for Goliath brand like Amazon but every purchase counts. If Amazon is able to get bursts of over 8k tweets for #AmazonCart in hour constantly it definitely shows great potential for Amazon. Also after the initial development, there is not that much cost for the program (expect for the promoting it).

3. #Amazoncart is super simple
After you have connected your Twitter account to Amazon, you can reply with #AmazonCart to any tweet containing an amazon product link. This puts the item to your shopping cart and you can finish the shopping later. The beauty of this concept is that it keeps it simple enough and does not add too many steps to the progress.

Hopefully in the future we are able reply #AmazonCart to every kind of tweet beyond the Amazon links. Buying products straight from YouTube or Instagram –links anyone?

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How to Disrupt the Marketplace like Beyonce

“I didn’t want to release my music the way I’ve done it. I am bored with that. I feel like I am able to speak directly to my fans. There’s so much that gets between the music, the artist and the fans. I felt like I didn’t want anybody to give the message when my record is coming out. I just want this to come out when it’s ready and from me to my fans.”
-Beyonce Knowles

Sometimes the best marketing is just let the product speak for itself. Just as the speculation for the albums of the year seemed to slow down, Beyonce dropped a bombshell. In this era of leaking albums way ahead their release dates, Beyonce actually was able to release her record “in a secret”. Last Friday morning without  advance single, marketing campaign, radio airplay or TV performances. That naturally was not a secret for long as every media jumped to cover that. What is also notable that the album is currently sold only as an album exclusively in iTunes. What can we learn from this approach?

1.    Reward your fans first
As the average life cycle of hit song is only weeks at best, who actually buys albums anymore? Who remembers that Harlem Shake happened this year? Beyonce is one of the few artists who still have a fan base big enough to move considerable amount . Why you should not treat your most loyal customers well and give them something they hold in high value? The approach has been successful: the album sold 430k units on one day. The rest can cherry-pick their songs later (see point 3)

2.    Good content is the best marketing
When you are superstar and you really believe in your music, it is only natural to believe that every song in that album is a potential single. The most-sold and most solid pop album ever Thriller was quite close to it: having seven of the nine songs as singles. Beyonce has done video out of every song of her new album (17). Actually some radio stations are currently having all the songs in rotation. Don´t be misunderstood though, this is not cheap way to do it. Although you save a little in media spend, having Hype Williams to produce your video is still costing you quite a much.

3.    You do not really need to disrupt everything, just one thing
What is really brilliant with Beyonce-approach is that it is rare instance when you can have the cake and actually eat it too. Beyonce just skipped the pre-launch PR & advertising bits. The download is album-exclusive only for a week. Then it is back to the usual: streaming services start, there will be singles from the album and I bet that Beyonce will not decline interview requests.

4.    Finding the right partner is crucial
Beyonce partnered with iTunes to make this happen, her husband Jay-Z partnered with Samsung to make other hyped album launch of the year. From the bigger artist perspective, the music business is increasingly more B2B than B2C:

5.    Understand what business you are in
So what is music business nowadays? It is not about selling albums or even singles. It is about creating experiences. This is obvious when analyzing how much the biggest artists get from touring. Experiences are not limited to real-life, but are happening more in digital. Before you made music video to promote the song. Now you do song to be able to do the YouTube-video.

To pull something like this out and with this effect, you need to be an artist of Beyonce-calibre (there is not that many) and also you have to be first to do it. Free publicity of the stunt is something you cannot duplicate. So this approach per se is not the future of music business. What is the future, that the money does not come from only music, it comes from the whole package.

Although for this week, we can try to believe that music album still matters like in 1980´s. The album is actually quite good, but naturally not the Thriller.

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Cut The Bullsh*t: What Cutting Your Hair in Subway Station Can Teach You on Innovation?

Besides my grocery shopping habits I have changed my haircutting habits as well. Before I used to spend quite a lot time and money to fancy barbers, but as the time is tighter in fast-paced Singapore, I have found my new favorite business venture QB House. They are fast barbershop located in MRT stations and offering just cut really fast and really cheap.
 
Today while taking my haircut, I started to think what all the other categories could learn from their approach:
 
1. Concentrate on essentials
Especially for the guys you seldom need washing the hair or coloring services. You just need the quick cut. Many times the route for drastic category reinvention is to start taking things away. Crossfit is great example of this in sports category (having higher margins though as well). Think about budget airlines. Do we really need airline food? For many of us, the answer is resounding no.
 
2. Make it faster in slow category
I used to spend altogether almost two hours to my visit in Barbershop. Reserving it was a pain in the ass and it took weeks of time. Now I just pop to QB House on my lunch break and does not even think about it. What if you could get your glasses in a hour? Or your car in one day?
 
3. Give bold promise
“10 minutes just cut” is the tagline for QB House.  I have actually timed the experience in QB House and many times it goes a little bit over it. I don´t really care about that. The bold promise gives indication that it is fast and something you can do within time restraints of your lunch hour or when you are waiting for subway. What bold promise you could give in your category? We give you credit card in an hour? We give you a loan in an hour?
 
4. Be cheap
Until last year the QB House promise was even more compelling from price-perspective: 10 minutes and 10 Singaporean dollars. Now the inflation has taken its toll, but price is still reasonable: 12 Singaporean dollars (7 €/9.5$). Price is totally connected with cutting all the unnecessary bits away. What is the core of your business and what are just the add-ons?
 
5. Be consistent
Instead of being loyal to specific barber or even specific location. QB House is located in MRT stations and strategic mall locations, which means that I can actually visit barber no matter where I have to go. The process is so fast that I can accidentally pop by. Before having the haircut defined my whole day routine. QB House is the McDonald´s of barbershops. You always know what to get. Again consistency and strict processes contribute to two things: effectiveness and familiarity. Effectiveness makes business sense for company and familiarity makes the consumer to come back. Although I never get the comb they offer me, it is still a nice gesture. And actually because the barbers cut so many people, the quality is actually really consistent as well. But to be honest I would not try to get new hairstyle from QB House. I don´t think they would want that either. Stick to the essentials and be consistent.
 
Actually I go more often to barbershop nowadays as well (every three weeks, might also be that I am rocking the undercut), so the new way of doing things has actually altered my behavior as well. The yearly customer value adds up though and I bring over 200 dollars for QB House yearly. You do not even think about it, because the single transaction is so low.
 
If your category has done things certain way for a long time, it is good indication that you could do it differently. How could you be faster, cheaper and more revolutionary on your category?

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