Millenium Marketer

Zipcar, a web-based car rental company, went public on Thursday, and the company valuation crossed the $1B mark!

Although Zipcar is not quite making a profit, I like their business model. I was a member last year for about 6 months, and used it several times during that time period.

So, what’s so different about Zipcar?

1) Membership system
As a member, you get an all-inclusive per hour rental. The membership includes gas, insurance, rental, so basically everything when you need to get from point A to point B. There is no additional insurance, no necessary add-ons, no extra frills. Dead simple. You pay per hour, and that’s it.

To contrast this, I’ll share one of my personal experiences as an example. Last time I rented a car (in Europe), I booked and pre-paid a week-long car rental online. Little did I know! When I returned the car, I got a receipt that listed many other surcharges and fees that doubled the original cost of the rental! And that was without the insurance…

2) Web-based system
Zipcar’s cars are parked in various random locations, and you find them out through the web. Once the car is reserved, you just show up, swipe your card and start driving. You don’t talk to anyone. There’s no one around. It’s that simple.

Now, imagine the typical car rental agency, with offices and a private parking lot in an urban setting, where real estate is priced at a premium. They usually have a private gate, where a clerk lets you through. The guy at the counter shows you a combination of 26 different cost options for insurance and gadgets. Any value added? No, and in addition, there is a high real estate cost that is tagged on to the price of your rental ticket.

***

Zipcar started out in college campuses, where the density of potential drivers is high, and people don’t necessarily have a car. At Stanford, I suppose they were received like celebrities on the red carpet, as Stanford strongly supports alternative commutes than car. Those who take the train, then have to go run a quick errand off-campus can easily just pick up one of those Zipcars.

Then Zipcars started appearing in dense urban areas, e.g. SF / NYC, where drivers don’t necessarily want to own a car. At this point, it seems like their members are strong converts to the Zipcar business model, and that number is growing. Although they may face competition from the older companies such as Avis or Enterprise, the membership model may help them retain more customers.

Overall, I think they have an interesting model. It’s not a business travel rental car company. It’s about letting people drive without having to own and maintain a car. In an urban setting, it’s perfect. No need to find a parking spot or rent a garage spot.

As Zipcar will increase their presence, they may be able to convert more people to adopt their model. I personally stopped using it some time ago, because 1) cars weren’t close enough; I would have to drive to the nearest zipcar, so 2) I didn’t want to pay for membership if I could only seldom use it.

Looking forward, their low-cost structure may help them move past their competitors. Who knows, we may even see the Netflix /Blockbuster story repeat itself again with Zipcar…

Your opinion?

Contributed by Dany

What is it like in your city?
I live in Silicon Valley and it is a little bit crazy. I don’t know if there are other places like this in the world, because my other point of reference is Wales where people end the day at 4 or 5 and go straight to the pub. I know they are nothing like this. But then Hong Kong and Tokyo are a bit crazy too, and not like this. Silicon Valley’s word is Geeky. There are girl geeks here too.

Silicon Valley is like a mad scientist’s haven, everyone here is obsessed with creating or funding a new innovation or providing a service (PR, consulting, accounting, coffee houses, entrepreneur launchpads) that is the oil to keep innovation engine running.  There are engineers who spend their days dreaming of owning their own start-ups, lots of  emerging companies who want to make it big. It’s the only place I know where is possible to meet entrepreneurs as young as Mark Zuckerberg at Facebook, or even younger, like Mark Levie at Box.net. If you’re not working in these companies, you’re writing about them in VentureBeat, TechCrunch or ValleyWag.

We have a ton of venture capital companies here: Sequoia Capital, Garage Technology Ventures, GRP Ventures, Elevation Ventures (where Bono of U2 is a Managing Director). It’s so real that I have shaken hands with Kawasaki once at a movie theater event, met wild eyed Levie briefly, and yes, worked at hi-tech PR firm supporting an emerging VC funding start-up. I have friends who own tech start-ups, dodged the Google IPO or have experienced a start-up acquisition. It’s that real.

Housing prices can go as far as the millions, in my area, the average housing price is $2,343, 246.  Renting is cheaper than buying, a concept that profoundly confuses my Taiwanese family abroad.

It’s practically Darwinian the way we are filtering out folks who aren’t necessarily interested in this innovation madness and all this blinding brilliance. To stand out, it appears that you have to either attend Stanford to shortly quit like Page and Brin, get an MBA, learn a technical skill like Photoshop or javascript, OR tweet like mad  @SocialMediaClub.

New products start with E, like the WD e-Book or i as in iPod and iPhone.

It’s the only place I know where people will turn down an impromptu invitation to dinner because they are on leave from Google to work their side hustle, or promise to teach you to be rich. Unless, your obsession IS food and you’re cooking the latest celebrity chef dinner.

If you live in Silicon Valley, is there something else you would add?

Is it like this elsewhere?  What drives the engine of young professionals in your city?

When choosing the name of your brand, it’s important that you know its character better than your consumers, especially in a world that is increasingly international. In business, a brand can make or break your business, no matter how good the product. (As was the case with the Chevy Nova in Latin America, as “No Va” means “No go.” Who would want to buy a car like that?)

That said, as being very much Taiwanese American, I couldn’t help but rant when I came across a few words in Mandarin while watching an episode of Top Chef.
Often, when a chef is talking about their experience in the competition, their name will come up on screen with their restaurant name.
Angelo Sosa, Xie Xie.

[I should also couch this in terms of while I can absolutely respect Mr Sosa for trying to cook and win. I respect the trials and travails of what it takes to make food that people love. This is not a personal analysis or a stab at Sosa, but rather an attempt at constructive criticism of his brand. I have never tried the food, so no complaints there.]

The bottom line:
1) Create intentional positive associations for your brand.
2) Do your research: if you are going to stray away from what you know, make sure you become absolutely wrapped up in the character of the brand you want to create.
3) Be real: the story that you make can and should in many ways embody its owners.
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My view of entrepreneurship changed recently after some more talks with aspiring business owners and those with running businesses. Jack Jia of Baynote said to me, “You don’t have a business until you have sales” but it’s since recently that I don’t believe that businesses are just about sales.

There’s a lot more to it, and while the sales team is an important aspect of developing a business, an organization can be dysfunctional if it is run to only increase revenues and sales.

In grad school, we had a very clinical view of entrepreneurship. We talked about the traits of an entrepreneur that apparently made for success, and while it was a useful tool in thinking about “am I entrepreneurial?” the truth is that entrepreneurs are actually all different and they look like everybody else.

So, while innovation and technology makes for a great portion of what entrepreneurship can do, it’s a combination of efficiently managing resources, leveraging technologies or company differentiators and activating your sales team that makes for a strong business model to drive and grow your organization.

Rocket science? Not really, but while there are many start-ups, it has to be only 1 in 10 that has strong, sustainable execution with a workforce that can carry itself through gracefully and with a sense of ownership towards the company.

OK I admit it.

I’ve been kind of out of it. There should have been fresh posts here since January 1st. Well, the truth is, while blogging isn’t perfect, the perfectionist in me doesn’t want you to see half-baked ideas randomly thrown on a page. I am thinking strategy, so if I am quiet, that’s a good thing because you probably don’t want to see what it looks like in my head.

So, apparently I can’t write as fast as I can think.

Even though the inauguration is tomorrow, I’ve had my mind on other issues, mainly cows, pigs, chickens and manure.
Yes, you’ve read that correctly: manure. I’ve been working on an event to appease a different part of my brain and stomach: the culinary arts, business and the environment.

I’ve recently learned that manure is causing a huge economic problem, called “externalities” where local communities in the US are suffering because of excessive quantities of manure due to dairy cows and mass meat production. And no, cows do not sing happily in green pastures.

So, what’s a girl to do about it?

In the past couple of months, I’ve been trying to learn more about where food comes from. The seed of thought was planted by CleanFish CEO Tim O’Shea months ago during an impassioned interview on TriplePundit.com. It took me a while to convince the President of Net Impact Silicon Valley to move on this issue, but we’re finally there!

If you are local to the SF Bay Area, come meet us at Bistro 413 on Emerson Street on January 28 for a deep look at entrepreneurship, food ethics and eating local.

I think you will be shocked by the origins of your food, but I would hope that would not stop you from having a good appetite–there will be hors d’oeuvres!

Until this event comes to fruition, social media and technology as a journalist’s beat is on hold. Business and management will take the front seat soon, but just hang tight….

In these economic times, it’s a good time to establish thought leadership for yourself or as a representative of your company. With a variety of social media tools available, it’s not too difficult to do and you’re sure to make a few friends along the way to grow your network of support.

So, how do you do this? Recently, I wrote about brand advocacy, how you can develop a list of your brand attributes and test it. So let’s take this one step further: where can you create brand perceptions and stories so that others will remember you?

The social media channels are obvious and well-known places, but are you using them?

LinkedIn Groups
LinkedIn recently built in discussions into the Groups functionality (previously, it was only a badge of affiliation) and this is an easy way to do some ad-hoc networking. Try asking some thought-provoking or interesting questions that will catch the attention and interest of the group. For example, “What are your organization strategies?”–a topic broad enough to cover any profession, and people are always looking for ideas to be more efficient themselves.

Twitter
A lot of people are stumped at how to use Twitter. At first, you may announce that you are going to lunch or what you’re eating for lunch, but after a while, that isn’t so interesting since most people head off to lunch daily and often.

But when you start asking interesting questions (see above) or comment on things that interest you and relate to how you want to be remembered. A slip up or two is fine, shows that you’re human. Also the great thing is when you can find opportunities to help others. That is great thought leadership.

Facebook
Yes, you really can’t hide not even on Facebook. Sure, you can show a more personal side but just remember Big Brother is watching you!

It ain’t easy…
Thought leadership is the practice of learning and helping others, and knowing when to show your best talents! Sounds easy? It isn’t, and with some practice, you’ll find the best strategies for you.

PR Agencies, too, will benefit from thought leadership and are more likely to rise above the rest in these times.

If you have been really strong in this area, what do you think contributes to your success? Or what would you like to do to build thought leadership?

I came across an article called “How Not to Work a Room” and that is the partial inspiration for this post. It doesn’t matter whether you are a celebrity or not, you are most definitely creating impressions on every single person that you meet.

Is that a reason for fear and concern? Probably not, but it does mean an opportunity to enhance your personal brand, the brand of your company every time you get a chance to speak in front of someone, (without being absolutely fake.)

The key to doing this is speaking with conviction and knowing your subject well. Whatever message you communicate will be felt if you truly believe what you are saying, and of course, don’t forget the power of compelling stories. Sometimes a story from childhood can be “compelling” if it helps you relate to your audience better. Typically, you want to emphasize a message that can be related on a human level, and the perceptions of your brand come out not only in simple advertising, but also in other forms, such as when you interact with others, how you interact with them, what kind of information about you is out there on the World Wide Web.

And that’s why communicating your brand is practically a 24 hour job (minus the time you’re asleep!), because each action on your part translates into perception for your customers, peers, and partners.

Hmm…so that means we have to be 100 times more self aware than a decade or two ago? The reason is, we are now in a culture that has blocked out pure advertising, and are thus more quick to judge based on your actions rather than your words.

On the macro level, the focus on productivity is as relevant as ever, because of the current financial crisis in the US and the bill was passed for a $700bn bailout with no clear vision for the execution. My advice: avoid recession news at all costs and search for areas of growth.

I’d like to take this moment to recognize some of my favorite productivity and web design blogs, since I think it is important the people divert their attention away from the desperation that clouding the market.

While these blogs may not help you get richer or make you more money, I really think this is the time to be in denial and take on an entrepreneurial attitude to optimism. Stop looking at the news (which may make the true story overly poignant than the truth at times), and think about how you can be more productive and take opportunity of this economic downturn.

Zenhabits Blog: This blog takes a thoughtful approach to the many ways you can make small changes in your life habits.

43folders: The blog that attempts to focus your time attention on what is important, particularly targeting “thought workers” and creatives or people who use their brains to solve problems as opposed to their hands

The Printable CEO: The graphic designers approach to tracking time, this method is more suited for people who need an immediate reward for their work. The principle: “The first 15 minutes of a new project are the toughest.”

Looking for some optimism? The entrepreneurs have it: Inc Magazine, Entrepreneur Magazine and Fast Company.

Also for some interesting insights into creative problem solving for better business and eco-sustainability, check out my recent article on Creative Processes by IDEO (TriplePundit.com).

In the SF Bay Area, it’s can be fairly common place to meet someone who is creating an “early-stage” start-up company. What do you do if they ask you to join?

Of course, the answer is not easy because we cannot predict the future, and a lot of start-ups have silly names and Google has proved that a silly name doesn’t mean an unsuccessful company.

I have met my share of start-up entrepreneurs, and here are five questions you should ask before agreeing to join an an early stage, pre-funding start-up:

1. Meet the company founder. Is (s)he passionate and have a highly charged energy about the company and the product? This is very important because this kind of energy has to be sustained over a long period of time, especially when the company comes across some kinks and things may not be going as smoothly, and the optimism may not be as high as when the idea was first introduced. Also, figure out how busy this person is. If they seem to have all the time in the world for you within the first meeting, the venture is less likely to see its way through to completion.
2. Does the company have a business plan? Particularly for marketing folks, you don’t want to join a company that doesn’t yet have a plan for how they want to run their business or does not yet have a product. If the company doesn’t have a business plan, it is more important that they have gone through the exercise of understanding every aspect of how the business will run.
3. What is the exit strategy? It may sound strange to talk about how the company plans to close down before you have even started, but this is really important. A danger sign is when your entrepreneur says, “I am looking to get acquired.” First of all, 9 out of 10 start-up companies are likely to fail, so make sure they realize that this company may not be the lucky #1 who will be bought up. Other contingencies have to be considered. Second, this should raise concern because coming back to point number one, this shows that this is not a company who is in it for the long haul. Getting sold should be tertiary.
4. What is the company’s growth rate? Mainly, you want to ascertain that the company is growing at a healthy rate. The example I always use is Starbucks, because at one point in 2006, Starbucks announced that they are planning to build many more stores, and some would be right across the street from each other. This kind of growth should raise a red flag, because it is not a rate that can be sustained.

   On the other end of the spectrum, if the company is not gaining a lot of traction, it could be that they need some really strong marketing. It is also possible that the product is a wondrous innovation, but does not have a real use case that appeals to any target market.

5. What is the company’s revenue model? If they are quick to say, “advertising,” be cautious. After all, advertising is fickle and maybe even unsustainable. It’s really just web 2.0 laziness because everybody uses advertising and there is a high demand for “free” on the web, so why bother thinking about how you will work in your revenue? Similarly, if the company doesn’t have a revenue model and is not willing to pay for your time, stay away. Unless the company has some way of making money and paying you, at least you are safe for the short term.
   Don’t get caught thinking that this company will be the “next big thing” because most likely, it will not.

The advertising model can be quite fickle and some entrepreneurs report that this is the most frustrating challenge with their business. Twitter, and others, are guilty of expecting “lazy revenue” for high gains, because their focus is on increasing traffic numbers rather than developing a strong business plan. The same sentiment has been suggested by Aidan Henry’s contributing article on Read Write Web.

In short, highly talked about companies should get off their butts and brainstorm creative ways to bring in new revenues and still add value to their customers. Easy to say, but not easy to do, because it is a strategic task not suitable for the brilliant software engineer, but rather suited for the brilliant software engineer with a penchant for strategic, entrepreneurial thinking.

Just because your brand is highly valued, doesn’t mean your customers will show you love and add to your profits if you don’t ask
Even Google has admitted several times that they have a challenge developing B2B services and attempting to grow their revenues, despite their huge brand name. With all the free services that Google offers, it is sometimes a mystery as to how they are making so much money! It also helps to avoid being too enchanted by SaaS and democratization ideals. If a product has value, people will pay for it.

As a former mentor used to say, your accounting costs does not equal your sales revenue.

Web 2.0 is not a perfectionist’s era
Salesforce.com hosted a Tour de Force seminar in San Jose earlier this year, recommending that Internet platform providers do not rely on perfection to drive their business. Build a basic software that works and rely on customer feedback to improve future versions. Your efforts should be focused on customer retention and improving subsequent version releases of your product, since the web makes it easy to quickly make updates to your platform, service or media destination.

Four Revenue Ideas to Envy

1. Targeted Job Boards: There are specific niche blogs out there, such as Chris Heuer’s Insytes, which are well targeted to attract job seekers of a special type. In the case of Chris’s blog, it is job seekers interested in social media and software engineering jobs.
2. Gifting: WordPress has an interesting advantage of encouraging upgrades by way of either “gifting” credits to other users to help improve their blogs or gifting yourself. This is really smart in WordPress’s case because dedicated bloggers are willing to invest time and money to improve their blogs.
3. Small Business and Single User Segmentation: Although I don’t love it, I think it is a necessary evil. In some cases, if you have a workflow product, small businesses will be more willing to pay for your product at nominal subscription fee, such as is the case with 37Signals.
4. Reverse business development: Ideablob is social experiment to attract social entrepreneurs created by Advanta. Sometimes the investment in a hobby-like product, such as Ideablob can or may bring you further leads to generate more for your business. This is certainly the case where generating a high volume makes sense.

Other posts on revenue models:
The Long Tail: “What does the Media Business Model Mean?“