In this month’s issue of The Deal, way back on page 48, there’s a discussion of how “Disruption has been rearranging the media landscape…” There’s a brief paragraph “…falling DVD sales, insufficiently counterbalanced by … digital sources like Netflix Inc.” Essentially the article is pointing out a number of sub-sectors that are suffering at the increased pace of innovation and disruption. The overall DVD manufacturing industry is projected to decline at about 3% annually for the next 4 years. That’s a net loss of about $1 billion from now until 2016. To me, there’s plenty of room to disrupt in this market – clearly there’s demand for content from consumers and on top of that the medium they’re accustomed to using is slowly disappearing. The streaming video market is an obvious choice, that’s why I started ChannelShift. But what other opportunities exist? Kid’s interactive programming like LeapFrog. Try this – Google ‘cdrom interactive instruction’ and see what comes up. You should get about 12 million results. What we need are companies that help this content get in front of an audience that is accustomed to immediate gratification. With the bandwidth going into homes now there is no reason a consumer has to wait for a shipment of DVD’s. All we need are companies to make it happen.
As one of the first six companies to complete Gazelle Lab‘s accelerator program I can say that it was well worth the effort. If you’re a startup in Tampa Bay then I highly recommend submitting your application NOW. Check the FAQ on their site for an up-to-date list of the benefits you receive and be prepared to part with 6% of the company in exchange for those benefits. In my opinion, it was more than worth it. Also be prepared to work full time on your venture, if you’re holding down a day job and trying to do this… Let’s just say that you need to make a choice between one or the other. Be prepared to work late. Be prepared to speak in front of an audience of up to 1,000 (or more!) or as few as 10. Be prepared to bring a team that can execute – you cannot do this alone as it’s not just a technology solution but a business you’re building. Be prepared to take criticism of yourself, your idea and your company. You’ll be fielding a lot of feedback from mentors and other founders so if you haven’t figured out how to ‘trust your gut’ you probably need to have another founder with that skill or learn for yourself. There’s a saying at TechStars that “It’s just data” and it’s true. Your experience, perceptions and beliefs turn it into actionable information. That’s the ‘gut check’ we’re talking about. Get as informed as you can. Read Venture Deals, Do More Faster and Lean Startup at a minimum before you enter the program. I also recommend Business Model Generation as you’ll need to answer the “How do you make money?” question fairly early on. Finally, be prepared for things to change right in front of you. It’s just how things work today. If the facts change (such as your target audience) and you don’t change your mind… You’re not going to survive. I had to change the founding team on day 1 as well as the business model and product four weeks into the program. Nobody’s fault – we just couldn’t get the companies we were targeting for strategic partnerships to open up. I had to make a decision to change everything and in the end, we came up with a better product that was more disruptive and far more scalable.
Now, one more thing. If you’re in a corporate job and are feeling a little bored, burnt out or just plain “missing opportunities” then you’re in luck. The “corporate refugee” was a recurring theme of many conversations with both the media and mentors. If you’ve been in a corporate position for a while then you bring a wealth of connections, experience and a built in “gut check” of your own. Hopefully you bring a healthy lack of tolerance for bullshit. I strongly encourage you to consider jumping into the Gazelle Lab program if you’re in this situation. I did and I have not regretted it for a second. You can DM me on twitter if you want to talk.
Since this is Part 1, subsequent parts will delve into the “Be prepared to’s” that I spelled out earlier. This is a great time for Tampa Bay, StartupBus is coming in March, StartupWeekend is coming again next year and BarCamp Tampa Bay was the biggest we’ve ever had. Keep pushing!
I’m attending Digital Hollywood LA in Marina Del Rey. Although the weather has been chilly (I call it cold) the sessions have been eye opening. I came out here thinking I’d be a pariah – the IPTV guy in the middle of the status-quo. What I found instead was essentially everyone looking for way to increase distribution, support advertising and better target consumers with that advertising. I came also out here to discover what the entertainment industry really thought of the disruption taking place in Internet TV thinking that most would be looking to extend the existing model. That was a bad assumption. Instead, the disruption is being embraced head-on. There are of course the questions revolving around how to monetize the platforms but nobody is really fighting the shift and the conference really feels like “how do we deal with the end of cable?” Almost every session I’ve been in has been about multi-screen distribution across mobile, tablet and Smart TVs. I’m getting ready to head into the third day most of the sessions I’m attending revolve around internet video and TV 2.0 programming. The trip out here has been well worth it. I’ve met several potential strategic partners that I’ll be following up with in the next week. What was unexpected however was the unintentional discovery of a potential competitor. By piecing together bits of other conversations I’ve found that a leading brand is probably creating a platform for indi-producers and is quietly booting people off their parent platform. Not quite what we’re doing with our platform but I see this as validation that the industry is moving away from typical cable distribution and towards internet TV. With this development, combined with the rest of the discussions I’ve been having with people, I’m more convinced than ever that we’re on the right track with our platform development.
And now… off to more sessions.
Say what you will about Glenn Beck but he is paving the way for a lot of other shows to jump to Internet TV. Think of it this way: the music industry was flipped on it’s ass because we had to buy entire albums or CD’s when we really only wanted 1-2 tracks. As a consumer, buying my media this way is ludicrous, I only want to pay for what I want to watch. Today the cable operators drive money through advertising and subscriber fees. Of that, maybe 40% gets back to the content creators. See the parallels with the music industry here?
This morning I re-read the 9/12 through 9/18 edition of Bloomberg Businessweek’s article about Glenn Beck Bets Big on GBTV. One of the major challenges is filling out the content space with quality programming. That’s not cheap and can run about $25k per episode for 1970’s programming. $25,000 for reruns. How much of that goes back to the people that created or acted in the show? Probably very little. But there’s actually a cheaper and more effective way to go about this. The intent is to accomplish two things here: 1) Fill out the day with more programming 2) Make that programming unique and interesting enough to attract more viewers.
Who creates unique and interesting content? High school students, college students and indie studios. Usually underfunded and fighting for space on YouTube, Vimeo or Ustream, hoping to go viral or at least gain some notoriety. There’s definitely unique story lines, things we haven’t seen before on cable TV because the studios just won’t take a flyer on an unproven producer or writer. The costs are just too high for a studio to do that. But the economics of Internet TV are different, you don’t have to pay the network, studio, local stations and all the other people in between the story and the viewer.
So here’s the plan… Create a competition that awards 10 shows $25,000 each in financing. That cash allows the creators to really begin to produce their story lines. Give them enough funding to add actors, stunt people, creatives, writers, special effects, whatever is needed to really produce what most people consider a TV quality experience. How to pick the top 10? That’s a little tougher but should attract an audience (aka, subscribers). First, how much programming needs to be filled out? Of 24 hours, 6 are dedicated to GBTV. The most anyone can reasonably shoot, edit, and produce is probably 30 minutes a week if they’re going to class or have day jobs. At 30 minutes each you need 36 programs per day, 252 programs per week. Contract with 252 creators that over a 3 month period they will produce one 30 minute program each week for 12 weeks with zero dollars in funding. If they miss the production schedule they get dropped from the competition. At the end of the three months the top 10 shows, based on consumer votes, get $25,000 to re-shoot, re-edit and re-publish their shows and to really tell a more in-depth and complete season. Do the same thing for the next three months, and the next. In a year you’ve got 40 shows and you did it for $1,000,000.
Think it’s a crazy idea? The dry run for this has already happened, it’s Kiefer Sutherland’s “The Confession” which ran on HULU for 10 episodes. It was well produced, had a great story and two great actors. And it was never seen on cable TV. That’s where Internet TV has to go in order to attract a mass audience. Which it can do, we just need to foster it along. So in the end, I pay for Glenn Beck but I a whole lot of new programs to watch. Oh, and there’s yet another reality show wrapped up in all of this which seems to attract a lot of viewers still.
Still struggling with seeing the need for smart tv’s? They’re cool, have lots of features, price points are dropping and screen sizes are increasing. But that’s not enough. I think we’ve got it all wrong – surfing the web or porting Android apps to them isn’t where this should be going. That’s a disconnect for me, people typically use a laptop or a mobile device for those purposes. Instead, think home integration. What do you want to do when you’re watching TV and don’t want to get off the couch? Those are convenience items for consumers, services that we’ll conceptualize and bring to market. What do you order, have shipped to you, and then watch on TV? Those vertical’s are ripe for disruption over smart TV’s. That’s where this should be going. Surfing the web on my TV? No. Sorry.
I was at ITS2011 in Tampa last week watching Carlos Dominguez give a presentation about innovation and how the best companies approach it. After giving a handful of examples he asked the crowd “How many of you take time out of your week to actively envision what the future will look like?” Out of the entire crowd, perhaps 5 raised their hands. That’s absolutely horrendous. My parents used to say “What will they think of next?” We’re not in that age anymore. It’s up to us to think of what’s next. At a time when ideas are a commodity and technology is relatively cheap, anybody can come up with and start to build “what’s next.” Five people raising their hand for looking into the future is ridiculous, especially at a technology summit. It should be everyone’s job to examine their own lives and those of their family members and ask “What is too complicated today? What tools do I want to see come to market that make my life easier, more connected, or more effective?”
If you’ve ever tried opening a restaurant in Tampa you should be able to come up with at least two services that would make the process faster and more effective for the restauranteur as well as the City of Tampa. How much of that could also scale to other cities? Probably several. Those are products. That’s the future. It’s not the next Facebook but it’s cost savings for municipalities in a time when they’re looking to cut costs and gain efficiencies.Where else would you start looking?
At ITS2012 can we please have 10 people raising their hands?
For reasons I can’t get into, I’ve been struggling with the decision to pivot my business model over the past week. I’ve had three alternate product concepts in reserve just in case the situation developed and I needed to use them. But when the time came I found myself asking “What does this product do that’s unique and that my potential strategic partners can’t do for themselves?” What I had didn’t quite pass this test. The concepts I had were not strong enough to stand on their own because a potential partner could just throw tons of money at it to solve it. Typically when I’m in a situation like this I’ll do the 20 Answers exercise. Some progress but nothing ground shaking. Out came IDEO’s Method Cards. A few hints at things but again, nothing. I spoke with others that I’ve done product development with. Nothing. That’s actually not true, I helped someone with a new feature on one of their products. Tastes great but it’s less filling. Keep looking. Blanking out while looking around my office, I saw Creative Whack Pack cards on a shelf. These were handed out a couple of years ago at my previous role but I always considered them a little too elementary to actually work with. Well, time to suck it up and get back to fundamentals. Quickly flipping through the cards I dismissed every one of them. Until I hit on “Exaggerate.” That one passed the gut check for some reason. Exaggerate the idea – blow it way out of proportion. I took that and re-did the 20 Answers exercise. After about 90 minutes I had the answer. It was feasible, unique in the market, and has a workable revenue model. I’m back on track and that’s what I’m running with for DEMO Day.
When you find yourself in a thought rut and no new ideas are formulating – go back to the fundamentals. Look at things you dismissed before, look in places you thought were too easy, silly, or just dumb. Go back to Crayons and paste if you have to.
This video was taken leading up to Boulder’s DEMO Day in the summer of 2010. What does it mean to the companies that are participating? As you’ll hear David Cohen state that you’ll base your success on the number of meetings that you get. I don’t think it gets any simpler than that as all the work leading up to DEMO Day is aimed at getting your company funded. Gazelle Lab’s DEMO Day is Nov 17th at Mahaffey Theatre.
It’s not the long hours, development dead ends or the faint hint that you may need to pivot your business model sooner rather than later. No. What sucks is that a very small number of people, the small minded, short sighted sycophant with neither vision nor the barest wisp of a good idea, will take more time and effort to beat down, berate and otherwise level an unending stream of put-downs and vitriol against someone who wants to make a difference than it would to meekly and disingenuously whisper “Good luck.”
You don’t need to be championing the next big thing or saving a continent from drought to matter to your family, friends or even the community around you. You do need to give a damn about what you’re doing. You need to believe in yourself, your idea, and your ability to move people to action. Because at some point one of these individuals without the courage to throw their hat in the ring will take a shot at you. When that time comes, if you’ve demonstrated to people that you’re really committed, that you’re genuine, then you’ll have 10, 100, or 1000 people that have your back. And they’ll beat the shit out of that jackass as soon as the opportunity presents itself. And, if you are one of these people, just say “Good Luck” and walk away, leave the ‘making things better’ to the rest of us.
Be careful who you put your ideas in front of. If you can find people that are genuinely in your corner and want you to succeed, show ’em everything. Because these people are rare. I know of maybe five people that will look at what I’m doing and give me their blunt opinion. And I come back to them time and time again. They get the early look at what I’m working on, not because their friends, not because they tell me how great the idea is or how cool the concept is. They don’t fill me with a bunch of bullshit about how the idea is innovative and game changing. Nope, I come back to them because they’ll point out things that I missed or glossed over in the business model, consumer experience, or marketing plan. Seek these people out. Relentlessly. When you find these people, don’t get defensive about your idea – you’ll risk these people shutting down and not giving you their honest opinion. If your product, service or concept can survive these people and can improve based on their feedback, you’ll have a much stronger product when you go to market. It may not even look like what you originally conceived. Be prepared for it, you’ll be much better off.