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At the end of October of last year I wrote about “Why Listening to Your Customers is Not an Innovation Strategy.” It was published at Entrepreneurdex as a feature article (thanks guys!), and it’s been one of the most successful posts on this blog.

It also happens to be my favorite post I’ve written so far. The follow-up post was about how “Listening to Your Customers is Important for Incremental Improvements, But Not for Innovation.”

Since then, I’ve received a CR-48 Chrome notebook as a gift from Google (more about that here). Interestingly, Google’s approach to innovation matches both of these posts. Here’s how:

First of all, Google wasn’t listening to customers when they came up with the Chrome notebook. People weren’t clamoring for a notebook that only used the Chrome browser as an OS and was 100% internet dependent. Nobody was even dreaming about that.

What people were clamoring for was a computer that was cheaper, internet optimized, booted quickly, was hassle free, avoided viruses, and so on.

Google knew that there was room for improvement with notebook computers. But instead of listening to customers, they invented the future. They invented a notebook that nobody was dreaming of—a notebook that only uses the Chrome browser.

That’s how you make innovation happen. That’s how you think outside the box. By inventing the future.

If Google relied on focus groups to do this, they would have never come up with the CR48 Chrome notebook.

And here’s where the second part comes in: after inventing the future, Google is now vigilant in gathering feedback.

In each notebook, there’s a bug icon in the top right of the browser. If there are any problems or any bugs, you can click the icon and immediately send feedback.

I’ve done this already, and so have thousands of other users.

Essentially Google is gathering feedback to make incremental improvements. They’ve already invented the future, and now they’re figuring out how to tweak the OS to make it more functional and user friendly.

It’s brilliant. The computers have been shipped as part of a Pilot program, and users are testing based on a number of different technical requirements. Some people are programmers; some are writers; others are who knows what. Each group of people has a certain set of demands and needs, and Google is getting feedback based on each set of needs.

They’ve invented the future; now they’re gathering feedback. That seems to be a good formula for innovation.

What about you? What steps do you take for innovation? Are there any strategies that you employ? I’d love to hear about them in the comments.

Also, if you like this article, make sure to Tweet and/or Facebook it. I appreciate your passing this article on.

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I hear a lot of people talking about how great Apple’s marketing is. And they’re right—Apple’s marketing is incredible. But what is the real secret to Apple’s marketing success?

The real secret is product marketing.

So what is product marketing? Product marketing is exceptional products that contribute to marketing objectives in place of traditional marketing such as print ads or billboards. Product marketing is similar to content marketing, a term used by Copyblogger to describe using content such as a blog posts to accomplish marketing objectives in place of traditional advertising.

With product marketing, the product is so good, it does work that traditional advertising usually would do. Thus, the success of the product is not due to exceptional commercials or fancy billboards, but instead, it’s due to how great the product is.

This is largely due to the power of word of mouth marketing, which is considered the holy grail of marketing because of it’s effectiveness.

Why is it so effective?

It’s effective because people trust what other people recommend. If I suggest a Zune mp3 player to a friend, I’m not recommending it because I’m getting something out of it. Microsoft doesn’t send me a check for recommending the Zune. A salesperson on the other hand does get paid, and people take anything that he says with a grain of salt.

In other words, we trust things that people recommend more than we trust what companies recommend. People we know are more trustworthy and don’t have ulterior motives.

So what’s the best way to tap into the power of word of mouth marketing? The answer is product marketing.

The objective of product marketing is to provide the best products possible so that people will recommend it to their friends. Whether it’s a physical product or service, if it’s awesome, people will recommend it. When they do, it’s much more effective than a billboard or commercial ever will be (to read more about this check out my first written for this blog titled “Why Your Product Needs to be Awesome“).

This doesn’t mean that you won’t ever need to do traditional forms of advertising or marketing. Apple still has T.V. commercials, magzine ads, etc. You will still need to advertise and make cold calls.

This is because traditional advertising and marketing increase awareness for your product. More people knowing about your product is good.

The difference is that if your product is good enough, you won’t have to rely solely on traditional advertising and marketing. Instead, your product will do the selling.

Back to the example of Apple, the success of iPods, iPhones, and Macbooks isn’t due to amazing commercials. Sure, the commercials are cool, but is that why people buy Apple products?

Nope.

People buy Apple products because they are beautiful. They buy them because they are cool. They buy them because their friends have them, love them, and recommend them.

Lately I’ve been tempted to buy a Macbook, even though I personally dislike the idea. I don’t like trends and prefer instead to go against the grain.

So why would I buy a Macbook? I would buy one because every Macbook owner that I talk to says to get one. It’s that simple.

It’s not because I was convinced by Apple’s ads. It’s not really because I like Apple or want to like Apple. It’s because they’re product is so good, people recommend it.

Macbooks also happen to look really good.

Here’s the point: what made Apple successful was beautiful, exceptional products. It wasn’t persuasive ads or Steve Job’s salesmanship (although both of these are positive factors). It was beautiful products that were awesome.

So whether you have a cleaning service or an online retail company, how can you employ product marketing to increase your business success? How can you make your product awesome?

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I’ve been really busy lately, and it’s been several weeks since I’ve been able to write here (sorry about that). During that time, I received a gift from Google that I’m typing on right now-a Google Chrome CR48 notebook.

WHAT IT IS

The CR48 is a radical new notebook from Google that runs on a Google Chrome Operating System. This means that instead of a typical operating system, everything is controlled through the Google Chrome browser. Everything.

Instead of editing and storing files on a hard-drive, everything is stored  and done within “the cloud.” E-mail and document editing is web-based, etc.

It’s radical.

So radical, that the notebook is 100% internet dependent.

The good news is that most of the stuff I do can be done online through Chrome. E-mail? Gmail. Documents? Google docs. Blogging? WordPress. Contact with friends? Facebook. Etc, etc.

The bad news is that some things can’t be done yet through Chrome. So far I haven’t been able to use is Skype. Sure I can use Google Talk most of the time, but not when I’m talking with family members that don’t use Gmail.

100% INTERNET DEPENDENCY

The craziest part about the Chrome OS idea is that it makes the notebook 100% internet dependent. Once logged in, all you ever see is the Chrome browser. Nothing else. There’s no desktop or anything else.

One caveat is that without the internet, the notebook is useless.

This happened to me when I came home from a long trip to find the CR48 package (Google mailed them out as a surprise and didn’t let people know that they were coming). It was cool to come home to a free notebook (really cool). The only problem was that I didn’t have internet set up yet.

I had just moved into a new apartment, and internet had yet to be installed. This rendered the notebook nearly useless (as a solution I ended up using most of the free 100 mb per month Verizon cellular internet package that comes with the computer).

I was happy to come home to a free notebook, but the fact that the CR-48 is 100% internet dependent was very obvious.

WHAT I LIKE

What I like so far is how quickly the CR-48 boots up. Logging in for the first time only takes 10 seconds. After that, subsequent logins take approximately 1.12 seconds (that’s the number I’ve seen Google throwing around). Essentially, by using the CR-48, I’m only between 1.12 and 10 seconds away from being online. That takes care of one of my biggest frustrations with Windows – super long bootup times (insert 1 minute plus for Windows).

I also like the overall look and feel. It comes with an all black matte, rubberized exterior. The CR48 is also sleek and simple, similar to a Macbook. It looks pretty good, especially compared to ever other notebook besides Apple’s.

Some people have commented that it looks very similar to the Macbook. That’s a compliment, but Google may want to come up with a design that looks good but also sets them apart from Apple. But maybe not. It looks really good as is.

Something else I like is the battery life. Google claims that the battery can last up to 8 hours. I’m not sure that it’s quite that long with the screen brightness turned all the way up, but the battery life so far has been great. If the Chrome OS is able to extend the battery life extensively, that’s a huge bonus.

WHAT I DON’T LIKE

The one thing that I don’t like so far is the 100% internet dependency. It bothers me that I won’t be able to write something or do anything without being on the internet. This means that if I’m in a conference room without wifi or on a plane, I won’t be able to take notes or write.

This may not be that big of a problem because I’m not sure how often I use a computer without internet connection. There’s also a free 100 mb cellular internet package from Verizon included with the notebook that helps travel from wifi to wifi. I’m interested to see what it’s like to be 100% internet dependent.

WHAT I PLAN TO DO

My plan is to use the CR48 as my primary blogging computer (that’s also what I agreed to do as part of the pilot program). One goal will be to see how useful the Chrome operating system is and what limitations it has. Another goal will be to see whether or not I end up using the CR48 as my primary computer. How much I use something is the number one way I determine how useful it is. I’m curious to see if this notebook will become my primary notebook.

As part of the process, I’ll be taking my blog readers along for the ride. Every week or so I’ll post an update about my experience with the CR48 discussing what I like and dislike. I’ll also offer suggestions for improving the CR48 and Chrome OS.

If you have any questions about the notebook, make sure to leave a comment below. I’ll be happy to answer them.

Cover of Outliers: The Story of Success

Pro Copy Tips

1. Storytelling and the Greatest Sales Letter of All Time—Like I said before, this “greatest sales letter of all time” is absolutely amazing. Check it out and let me know what you think.

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The odds of starting the next million dollar website are slim. Everyone wants to do it, but only a few ever will. Yet if you really want to start the next million dollar website, what kind should you build?

Here are seven types of websites that have been proven as ways to make millions, if not billions, online.

1. Start a search engine

Examples: Google, Bing, Ask, Yahoo

This is probably the most difficult business to start of any on this list. Creating a search engine takes a lot of technical expertise. It’s not like buying something and then selling it for a higher price. It takes hacker programmers to pull it off.

With that said, some of the most successful internet companies have started as search engines. This list includes Google, Bing, Ask, and Yahoo. Google leads the pack by a lot, but search engines have made a number of people rich off of the Internet.

Advice: If you want to make your fortune in search-engine-land, your best bet is to come up with an alternative to the traditional search method. People talk about starting a Google killer, but that probably won’t happen anytime soon. It’s more likely that someone will come up with an alternative to Google than a replacement. (I’ve got my ideas for this but won’t be recording them here.)

2. Create a social network

Examples: Facebook, MySpace, LinkedIn

Another way to make millions and billions online is to start a successful social networking site. Facebook is the big name in this field, but MySpace, LinkedIn, and others have done well for themselves.

Social networks succeed by connecting people that want to keep in touch. Facebook and LinkedIn seem to be more successful than MySpace because they connect people that are actually connected in the real world (or want to be connected). MySpace seems not to have as much traction because it connects more people who don’t have real-world relationships than people who do.

Advice: My advice here is to start a niche Facebook or LinkedIn. There is room for people to carve out niche social networks where people of similar interests can meet each other. I’m personally “linked in” at Entrepreneurdex.com, which has put me in touch with entrepreneurs and investors that I wouldn’t have otherwise met.

Again, the room for growth in this sector is for niche social networks. There probably won’t be a Facebook killer anytime soon, but there will be a lot of niche social-networking sites that collectively take page views away from Facebook. If you want to go this route, don’t try to take Facebook head on. Start by carving out a niche. You can always expand from there.

3. Facilitate user-generated content

Examples: YouTube, Flickr, Wikipedia

User-generated content is another way that companies have made a lot of money on the Internet. The big names here are YouTube, Flickr, and Wikipedia, and there are many more.

People are calling this web 2.0, and it’s really the way to go. If you can get people to contribute to a project, it’s like having free extra employees. There’s no way that YouTube, Flickr, or Wikipedia ever could have generated the wealth of content on their sites without user contribution. But with millions of users, they now have some of the richest content sites on the Internet.

Advice: No matter what you do, try to find a way to facilitate user-generated content. It’s like having thousands of free employees. Regardless of your business, you’ll want to find some way to capitalize on user-generated content.

4. Provide an online marketplace

Examples: eBay, Amazon, Craigslist, Alibaba

These companies have succeeded by bringing large numbers of buyers and sellers together. EBay has lost ground recently, but Amazon and Craigslist are still doing very well.

This business model is pretty straightforward. It requires getting large numbers of buyers and sellers together and helping them to do business. The website owner does the work by providing a website that helps sellers get in touch with buyers. Alibaba has done this by linking international wholesalers with international buyers.

Advice: If you want to go into this sector, start with something niche or local. For example, if you want to start an eBay type of business, go for a very specific niche. If your sights are set on starting the next Craigslist, shoot for a locally successful online classifieds. If you can win there, then you can always spread regionally and nationally. Facebook and Craigslist both started this way—they focused locally and then spread out nationally and globally.

5. Found an eStore

Examples: Amazon, Zappos, eBags

This business model may be the least exciting of all seven of these ideas, but it may also be the most realistic. Online retail is a straightforward game. You start a website and sell stuff that people want. As long as you can get people to your site and do a decent job presenting products, you can make some money.

Another reason this is a solid bet is that people buy stuff all the time. If you try to start the next big search engine, you’re hoping that there will be a market for the product you’re creating. But there’s no guarantee. With an eStore, you know there is a market for the products you’re selling. You just have to find a way to get a piece of the product pie.

Also, the number of people that buy stuff online is only going to increase. As the Facebook generation grows up, they’re going to make more and more purchases online. They have to. If they don’t, how will they keep up with all of their social networks?

Advice: This won’t be easy by any means (retail never is). Your best bet is to focus on a niche. Don’t try to sell everything to everyone. Find a focused set of products to sell. A good example of this is eBags. They focus only on selling bags.

Also, don’t attempt to be the next low-cost retailing leader. Amazon does a pretty good job doing this, and Wal-Mart is pushing their way into the online game. Try to find a niche of customers that want a specific type of product. It’s better to find 100,000 people that want your specific products than to go head-to-head with Amazon and sell everything to everyone.

6. Give people a new way to communicate

Examples: Blogger, WordPress, Twitter

All three of these websites do something simple—they give people a new way to communicate with each other. As simple as they are, nobody knew there was a need for them until they were invented (that also happens to be a characteristic of innovative ideas). But now we can’t live without them.

People use blogs to communicate ideas and sell products. Families set up group blogs to communicate with each other. And Twitter? Twitter boasted earlier this year that they have 190 million users, and Pew research estimates that 8% of Americans on the internet use Twitter. That’s a lot of people sending 140-character messages back and forth. I’m still amazed that someone figured out that 140 characters was a good way to communicate. It’s brilliant.

Advice: The thing to focus on here is how can you help people communicate faster and more effectively. Apparently email wasn’t fast enough, so we needed Twitter. Email also didn’t communicate with enough people at one time, so someone invented blogs. I have no idea what’s next in this sector, but someone will come up with another way to communicate.

7. Offer coupons to groups of people

Example: Groupon

So you may have noticed that there is only one company in this group—Groupon. I know there are others now that are very similar (like Living Social), but my head is still spinning that Google offered to buy Groupon for $6 billion. That’s right—$6 billion. And for some unknown reason, they turned Google down. I’m still trying to figure out why.

Anyway, these guys do something really simple and really well. They keep their product very streamlined. Here’s how their model works—“Do you want a coupon? Give us your email address and we’ll send you an awesome deal once per day.” It’s as easy as that. Trade an email address for super-awesome coupons. No complicated registration process or landing page or anything else. It’s impressively streamlined.

Advice: The advice to make billions for this is simple: if someone offers you $6 billion for your company, first ask if they’ll give you $6.1 billion because that’s an extra $100 million dollars. After they say no, tell them you were just kidding and that you’re completely cool with $6 billion. Then sign the contract as fast as you possibly can.

As far as serious advice, Groupon knockoffs are really hot right now. What Groupon does isn’t rocket science, and it could definitely be replicated with something focused like flights, hotel rooms, vacations, or something similar. And don’t forget, Google didn’t make the acquisition they wanted to make. They’re still on the prowl for a Groupon like service.

Wrap-up

That’s it for the beginner’s guide on how to make millions, if not billions, online. Are there any other categories you can think of? Or any other companies that would fit into this list?

What do you think the next million or billion dollar idea will be? And more importantly, which company are you going to start?

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For marketing, you need to know what you’re really selling.

Without knowing what you’re really selling, how will you know how to present your product to customers?

Let me give an example.

What do professional sports teams really sell? Do they sell a game? Do they sell highlights? What do they really sell?

Here’s the answer – professional sports teams sell entertainment.

Mark Cuban, the owner of the Dallas Mavericks, knows this very well. He knows that the Mavericks sell an entertainment event. They sell more than just a game.

Mr. Cuban wrote about this on his blog, BlogMaverick.com, in a post titled “The Fan Experience at Sporting Events – Never Look Down.” In the post, he said this about professional sports games:

“We in the sports business don’t sell the game, we sell unique, emotional experiences. We are not in the business of selling basketball. We are in the business of selling fun and unique experiences. I say it to our people at the Mavs at [sic] all time, I want a Mavs game to be more like a great wedding than anything else.”

To accomplish this, Mr. Cuban talks about “eliminating all of the look down moments in the game,” all of the moments when people are looking down and not looking up at something entertaining.

He believes that if people are looking down at smart phones or other things, then they might as well be at home. Why not watch the game on a high definition screen if you’re just going to be looking down?

This is important because, if sporting events are just about the game, people can catch it at home, and if it’s just about the game, ticket sales depend on the quality of the games. If a game is good, people want to come back. If it’s not, they don’t.

Professional sports teams have to realize that they sell an entertainment event. They sell “fun and unique experiences.” That’s what they’re really selling.

Ok, let me give another example.

What do wedding photographers really sell?

Answer – wedding photographers really sell memories.

Paying someone to take pictures isn’t very exciting; paying someone to capture memories is. Instead of talking about the great pictures they take, photographers should talk about the memories they preserve.

Memories are worth the price of a good photographer.

To do this, wedding photographers can talk about the emotional part of what they preserve. They can also show pictures that capture poignant memories. Instead of showing ordinary pictures, they can show pictures of the most memorable moments –walking down the aisle, exchanging vows, the kiss, etc.

The secret is this – for marketing it’s important to know what you’re really selling. Once you do, you’ll know how to market what you’re selling, and your sales approach will be revolutionized.

So here’s the important question – what are you really selling?

Sources:

Mark Cuban, The Fan Experience at Sporting Events – Never Look Down, BlogMaverick.com

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A blog is a communication tool. The definition is as simple as that.

I could tell you that the word “blog” is “a blend of the term web log” and is a “type of website or part of a website…usually maintained by individuals with regular entries of commentary, descriptions of events, or other material such as graphics or video.” That’s Wikipedia’s definition of a blog.

But what is it that a blog really does?

It does communication. That’s what it does.

This can be compared to a car. A car technically is a motorized vehicle with an engine, four wheels, a steering wheel, seats for passengers, a gas pedal, and a brake pedal. If you push the gas pedal, it moves foward;  if you push the brake, it stops.

I get that. But what does a car really do?

A car provides transportation. It’s a way to get from point A to point B a whole lot faster than a covered wagon gets you there.

So what does a blog really do? A blog allows people to communicate in ways that they never could before. Specifically, it allows some people (bloggers) to share their ideas with the world and other people (blog readers) to validate those ideas.

It’s a communication device that has never existed before.

Prior to the existence of blogs, if the average Jim wanted to communicate an idea, he could tell his family and friends. But that’s about as far as the message traveled.

An incredibly small number of people had the privilege of writing books that were published and read. But again, this group was small and privileged.

Now with the introduction of blogs, anybody can write about their ideas from anywhere. If the ideas are good enough, people will take notice. Basically anyone can get noticed from anywhere if their ideas are good enough.

In other words, everyone now has the opportunity to communicate ideas.

Not only does everyone have the opportunity to communicate ideas, but other people have the opportunity to comment on those ideas.

In the book example, communication is one-way. Authors write what they are thinking, people read what the author wrote, and the communication pretty much stops there. Only a select few people have the privilege of writing book reviews to join the conversation.

Now, anyone from anywhere can comment on people’s ideas. I’m a guy from Anaheim, California who likes marketing, and I can comment on the Harvard Business Review blog. That’s right – a no-name from California can join the business conversation going on at Harvard.

Now that’s cool.

What’s your take on this? What do you think blogs really do?

Sources:

Definition of “Blog,” from Wikipedia, the free encyclopedia

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I found a great blog the other day called Inspiration Feed.  It has a lot of awesome design and graphic content.

My favorite post so far is one called “50 Inspiring Entrepreneur Startup Quotes.”  The post is incredible.

Following are 15 of my favorite quotes from this post.  Make sure you check out Inspiration Feed to read the rest of the quotes.

Here you go:

Quote #1
“Stay self-funded as long as possible.”
-Garrett Camp, co-founder of StumbleUpon

Quote #2
“Forget about your competitors, just focus on your customers.”
-Jack Ma, lead founder of Alibaba

Quote #3
“Make your product easier to buy than your competition, or you will find your customers buying from them, not you.”
-Mark Cuban, co-founder of HDNet

Quote #4
“We live in a world where you’re not being eaten by a lion when you fail, you just have to get another job.”
-Michael Arrington, founder of TechCrunch

Quote #5
“If you’re building a product, you can’t be afraid of hearing criticism about it.”
-Kyle Bragger, co-founder of Forrst

Quote #6
“Timing, perseverance, and ten years of trying will eventually make you look like an overnight success.”
-Biz Stone, co-founder of Twitter

Quote #7
“When you innovate, you’ve got to be prepared for people telling you that you are nuts.”
-Larry Ellison, co-founder of Oracle

Quote #8
“The lean startup method is not about cost, it is about speed.”
-Eric Ries, Blogger of Startup Lessons Learned

Quote #9
“Whether you think you can or you think you can’t, you’re right.”
-Henry Ford, founder of Ford Motor Company

Quote #10
“Always deliver more than expected.”
-Larry Page, co-founder of Google

Quote #11
“The cost of hiring someone bad is so much greater than missing out on someone good.”
-Joe Kraus, partner in Google Ventures

Quote #12
“Don’t let people tell you your ideas are stupid – if you’re really passionate about something, find a way to build it.”
-Dennis Crowley, co-founder of Foursquare

Quote #13
“Any time is a good time to start a company.”
-Ron Conway, co-founder of SV Angel

Quote #14
“Innovation distinguishes between a leader and a follower.”
-Steve Jobs, co-founder of Apple

Quote #15
“The way to get started is to quit talking and begin doing.”
-Walt Disney, co-founder of Walt Disney

Which quote is your favorite?  Let me know by leaving a comment below.

Sources:

Igor Ovsyannykov, 50 Inspiring Entrepreneur Startup Quotes, Inspiration Feed

Image via CrunchBase

In my last post I mentioned that listening to your customers is not a good innovation strategy.  This may lead you to think that listening to your customers is a bad idea.  Actually, that’s not the case.

Listening to your customers is very important, especially for incremental improvements.  If you’ve already decided on a product, and you’re trying to improve it, getting feedback from customers is a good idea.

You can ask customers what they would improve about your product, or if there are any problems.  For example, if you release a software product, you can ask if there are any bugs.  If there are, you’ll want to fix those bugs as fast as you can.  The best way to do that is to get feedback from your customers.  You can do that by posting a big “FEEDBACK HERE” button on your website.

This is how you make incremental product improvements.  In other words, this is how you tweak a product.

But if you want to make a leap in product innovation, listening to your customers is not the way to go.

Like I mentioned in the last post, customers don’t know what they want next.  They can tell you what they like and don’t like about your current product, but they can’t tell you what the next great product will be.

If you want to make the jump from a flip phone to the iPhone, you can’t rely on your customers to do the job.  Figuring out what the next great product will be is the job of innovative designers.

The lesson is this: if you’re just trying to improve a product that you’ve already launched, then by all means tap into your customer base for feedback.  Ask them if they can think of any ways to improve your product or if there are any bugs.  Get feedback from every customer you can.

But if you want to make the next iPad, don’t leave the job to your customers.  Set up an innovation team with the most creative minds you can get in one room, and let them go to work.  If you do, you just might come up with the next iPad.  Besides, someone has to do it.  The next great idea is just around the corner.  Are you going to let Steve Jobs do it again?

Related Posts:

Why Listening to Your Customers is Not an Innovation Strategy