Article first published as Explaining the Troubles of Netflix in the Age of the Platform on Technorati.

With the possible exceptions of Yahoo! and HP, no company has struggled more in the last few months than Netflix. While it’s been a few weeks since the company backed off of its decision to split its business into two parts, its stock continues to drop amid reports that it lost more than 800,000 customers last quarter.

Convergence

Netflix’s recent actions make little sense–and Hasting was right in ultimately reversing course, although his (non)apology to customers left a bit to be desired. In The Age of the Platform, I discuss how platforms today are functions of many things, not the least of which is the extent to which they integrate their features or, as I call them throughout the book, their planks. The more powerful and integrated the planks, the more powerful the platform–and, increasingly, the company.

Amazon, Apple, Facebook, and Google (aka, The Gang of Four) are perhaps the best examples of companies that have built robust platforms, planks, and ecosystems. Is it any wonder that they are so valuable, so successful?

To read the whole article, click here.

Article first published as Blurring the Lines on Technorati.

Generally speaking, the quality and power of technology at home today has at least pulled even with technology at work—if not surpassed it. What’s more, billions of people constantly use a wide array of devices and apps well after they leave the office. The distinction between “at home” and “at work” has blurred, if not become meaningless. One can just about work anywhere these days, spawning the terms virtual or distributed companies. And the very notion of a computer is changing before our eyes. Smartphones and tablets are replacing desktops and laptops as the primary means by which people connect to the Internet and do much of their work.

Today, the lines between consumer and business markets are fuzzier than ever. Perhaps they may have even been eradicated. And this blurriness goes both ways. Consumer-oriented companies such as Amazon, Apple, Google, and others established themselves as not just consumer product and service companies. They all now offer business services as well—and have for some time. Even Facebook, though its business fan pages and applications, is no longer a pure consumer play.

Along these lines, we’ve seen the rise of the prosumer. The term has taken on multiple meanings—and not all of them are in synch. Duncan Riley defines the word as “a combination of producer and consumer that perfectly describe the millions of participants in the Web 2.0 revolution.” While some see as a professional–consumer hybrid, it reflects a much more active consumer than that of years past. No longer is the average customer willing to wait for established brands and companies to “get with the times.” Individuals are no longer passive; they are becoming more involved the actual production of goods and services. This is why terms like crowdsourcing have gone mainstream. Sites like Kickstarter even allow consumers to becomede facto producers–for a product with an already established market.

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Click here to read a guest post by Alex Sirota on www.thenewsmall.com about why things have been looking up for small business with respect to technology.

Robert Brands is a smart cookie. We started chatting about a year ago after the release of his interesting book, Robert’s Rules of Innovation™ (Wiley, Spring, 2010). In this guest post, he discusses tips for keeping that innovation pipeline flowing. With that, the soapbox is now his.

If even one percent of new ideas succeed, the payoff can be huge. A steady stream of ideas is what fuels innovation, so one of Robert’s Rules of Innovation imperatives is Ideation, or the idea management processes.

On any new product development team, it is up to the leader to facilitate ideation sessions. The goal of these sessions is to produce a regular supply of new ideas. In order for these ideation sessions to be as effective as possible, it’s valuable to include members such as:

• the sales team
• people who interact directly with customers
• maybe even a few select customers themselves to offer their insight into the meeting

These brainstorming sessions should be held regularly, say two to three times a year. It’s ideal to include a diverse group of people–perhaps from customer service, engineering, or production. This does several critical  things:

• It creates a setting ripe for creative ideas
• It minimizes the chances of group-think.

The process should be structured and repeatable. All ideas should be written up on the whiteboard or flip chart, then recorded and stored for future reference, with absolutely no ideas dubbed as bad. Negativity causes fear of judgment, which can seriously hurt the Ideation process and any chance of new and original ideas. Remember, good ideas can come from anywhere, so the more diverse your team and the more removed they are from their usual environments, the better for developing ideas essential to Innovation.

Ideation and the management of the ideation process pack the front end of the New Product Development funnel with a wealth of viable concepts. This portfolio approach anticipates the fact that some concepts will pan out, while others will be dropped. Here are some tips on ideation:

• Focus, focus, focus. Remember that depth is better than breadth for quality idea generation. Drill down and maintain focus.

• Prioritize ideas. And keep your eye on areas that enhance perceived value, improve customer relations, and capitalize on competitive opportunities.

• Store best practices. And be sure to reference them regularly. Remember, also, to create a database of ideation session “discards”—used in combination with other concepts from the group’s “toy box,” there might be the makings of a winner.

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You can reach Robert at his website.

Today’s guest post comes from fellow Kickstarter Scott Ballum. His project also concerns small businesses, the topic of my next book. Scott runs Sheepless, a media collaborative and a creative platform of and for artists, entrepreneurs, foodies, and environmentalists. It is a champion the Community Makers: small businesses who make our communities more sustainable, more accessible, more creative, and more fun. Sheepless engages with a growing interest in cultivating local economies, understanding where goods come from, and nourishing our natural resources.

With that, the floor is Scott’s.

I had a brief conversation recently with a bookseller from Maryland, who told me that her accountant said they were “just on the verge” of really making a profit, of really being successful. And he’s been saying that for ten years. “How much longer do we have to wait for ‘the verge’!?” she lamented. “Retirement?”

Her anxiety is not uncommon. Most small business owners have some version of that story, at least at some point in their career. But if she’s been getting the same story from her accountant for ten years, it’s time to change things up. Entrepreneurs can be so focused on the big, expensive, long-term goals that they don’t see

• the short- and medium-term possibilities
• the chances to change course towards one that might have a different outcome

Missing Opportunities

It’s easy to miss the little opportunities along the way, the very ones offering direction and feedback, when we keep our eyes strained on the edge of the horizon, looking for the end of the rainbow.

Many small businesses that I’ve spoken with hold tight to the vision they have of

• what a bookstore looks like and acts like
• how one succeeds through troubled times
• the right kinds of associations that a restaurant joins
• how it should market itself
• how it reaches out to the neighborhood

But I also know that they’re missing out on something. Why? Because I see the shopkeepers that throw the expectations and the traditions out the window. They don’t try to adhere to the guidelines. Instead, they are open to the opportunities and possibilities that are unique to their street, neighborhood, or clientele. These are entrepreneurs who manage to make it over the hump, because they are either too young or too stubborn to accept the possibility of hovering in limbo until retirement.

Pencils and Initial Restrictions

I’m not suggesting anyone be foolish, and ignore the basic tenets of business. But we can also do more than that. I actually went to art school before I started working with independent businesses, so I know a little about changing course. My freshman year art teacher wouldn’t give us anything other than a pencil to work with for the first few months of class. We spent weeks on form, line, shape, shade, composition, balance: the traditions of drawing. The upstart young artists that we were, many of us were irritated that we had to be so conservative. Why couldn’t we splash color and break the canvas and create tension? When we finally moved on to other media, however, his methods became clear as our focus, control, and deliberateness carried through. “Learn the rules,” he implored, “Then, and only then, break them.”

Yes, learn accounting and marketing. Know your industry standards, health codes, and tax codes. Have a goal in mind. But then be willing and ready to accept that how you get there might change. Embrace new directions, new ideas, and breaking that canvas.

In May of this year, I was on an edition of The New York Times’ TechTalk Podcast. I discussed my second book, The Next Wave of Technologies. At the end of the show, the host asked me, “What’s next? Another book?”

I responded with something along the lines of, “I can’t imagine doing another one but, knowing me, I’ll probably do it again. It’s kind of like a woman having a child. Immediately afterward, she can’t imagine repeating the experience. After a few years, though, the kid is kind of cute and you want another one.”

Click here to read the rest of my guest post on AriWriter’s site.

I recently did a guest post micro debate on my friend Jay Miletsky’s site. Here’s an excerpt:

Can marketers be too friendly and familiar? Can they pose as friends when they’re trying to sell us products and services?

In a word, yes. All too often I receive “friendly” emails from financial advisors. While these messages are rife with ostensibly valuable information, they’re thinly veiled attempts to obtain my business. Also, I recently had to remove an affiliate from my web site because of repeated reminders of the “benefits” of taking our relationship to the next level.

To read the entire debate, click here.

Jay Miletsky wears many hats and, quite frankly, I wonder if he ever sleeps. For one, he is the CEO, Executive Creative Director at Mango! Marketing, working with clients such as Hershey’s, Kraft, JVC, Washington Mutual, StreetGlow, United Health, and others. He’s also an accomplished author of ten books (making me feel lazy), contributor to my second book,  friend of mine, and fan of Porcupine Tree.

In this guest post, Jason discusses the relationship between traditional marketing and social media. The floor is now his.

Introduction

I wish I had been alive when TV began to infiltrate the American home and take its place as the entertainment center around which friends and family congregated.  I wish I were there to measure the sentiment of marketers at the time, and see if the general belief was that this new technology–this new media–would ultimately banish the radio into oblivion, and cause printing presses to shut down and rust over.  If that was the sentiment back then, it didn’t last very long. Inevitably it became clear that, rather than replace print and radio, TV would become an integral component of a larger media mix that and a more powerful means for brands to reach their consumers.

Today, all of these methods, now lumped together into a general category called “traditional marketing,” are once again fighting off a new potential threat to their relevance.  Judging by the behavior of many anxious marketers, it would seem as though the rise of social media precludes the fall of all other efforts, as though the entire marketing industry is on a see-saw, with social media on one side and traditional marketing on the other.

Evolution vs. Revolution

But in all of the (completely warranted) excitement over social media, what many marketers haven’t realized yet is that it’s not an evolution of marketing: it’s an entirely new method.  In order to qualify as an “evolution,” a new technology has to do all the following:

• Accomplish the tasks of its predecessor
• Accomplish these tasks in a way that’s cheaper, more efficient or provides better results
• Dramatically reduce or fully eliminate the relevance of its predecessor

We don’t use sundials any longer because mechanical clocks replaced them as the more efficient tool for tracking time.  Similarly, the computer replaced the typewriter, programs like Photoshop and AutoCAD replaced the drafting table, and digital cameras replaced film cameras.  In each of these instances, new technology has made their predecessor obsolete because they achieved the same or better results, quicker, easier, and/or faster.

So why doesn’t the same hold true in marketing? Because in this case, social media hasn’t in any way made traditional marketing obsolete.  It does not accomplish the same tasks as traditional outlets, nor does it reduce the marketers’ need to consider traditional outlets in their marketing strategies.  Instead, social media provides an additional avenue in which to reach consumers, but not in a way that’s mutually exclusive of traditional efforts.

Social Media as a Marketing Supplement

In fact, social media is profoundly different in its methods and accomplishments. As such, it can be a useful and necessary partner to traditional strategies, rather than a replacement for them.  Traditional efforts reach consumers by maximizing impressions–traditional marketing or PR campaigns are funded, launched, and received by consumers via TV, radio, print, or other such methods in ways that don’t allow for two-way communication.  The objective is to increase the number of impressions. More impressions means the following:

• the more people receive the message
• the more likely the consumer will be to make a purchase
• the greater the success of the campaign

Eventually, the message loses its effect, or the campaign budget runs dry, and the number of impressions falls until the next campaign.

Social media, on the other hand, is not an impression-based communications platform.  While marketers want their tweets and online messages to be seen by as many people as possible, the primary thrust of these efforts is to maintain ongoing communication or active engagement with audiences through two-way conversation. Social media is more active and ongoing, steadily growing through regular non-campaign specific communication that reaches beyond marketing to include PR and even customer service.  It provides consumers with a voice, and can create long-lasting, close-knit bonds between brands and their markets.

Engagement, therefore, is not a replacement for impression-based marketing, but an adjunct to it.  As marketers begin to realize that traditional and social media can live an work together, their strategies (and their brands) will reap the rewards not of a new evolution, but of a powerful new hybrid marketing approach whose sum is far greater than its parts.

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What do you think of Jason’s perspective?

I recently “met” Kristen J. Eckstein on LinkedIn. She’s the Executive Producer at Imagine! Studios and the author of a number of books. I had started a discussion about boutique publishing firms vs. true self-publishing vs. “traditional” publishing and she chimed in. After a few emails, it was telephone time and we hit if off immediately. We shared some of the same experiences and grievances, making for a good rant. I liked her comment that “traditional publishing the new vanity”

Kristen’s a really smart cookie and I’m pleased to present her guest post.

I cannot tell you how many conversations I’ve had recently with dissatisfied self-published authors who went through a self-publishing company to get their book done. Call it vanity, “paid-for” publishing, “POD” publishing, subsidy, etc., the business model remains the same. The company takes several thousand dollars from you and gives you a book. Then they proceed to give you “royalties” on every book you sell. You get your book done, the publisher handles all the nitty gritty stuff, you get an ISBN and distribution, then you make more money immediately as books are sold. Sounds like a great deal, right?

Think again.

Publishing Math 101

First of all, you already paid to get your book done. And if you went the professional route and did it right, you probably paid anywhere from $3,000–10,000 in the process. Then you’re going to pay anywhere from $2–$5 and up on every book sold? Let’s do the math. Don’t worry, I’ll make it easy on you.

• Let’s say your book is 120 pages, 5.5″ by 8.5″ in size. Typical print cost on such a book is $2.52.
• Your book retails for $10
• The vanity publisher generously lets you buy copies at 50% off to resell (an excellent discount, by the way).
• This means you pay $5 per copy.
• The publisher makes a profit of $2.48 per copy

Now let’s do the math on distribution through Amazon:

• Amazon takes 45% off the retail price, so they pay $5.50 per book.
• Your book sells on Amazon and your publisher receives that $5.50 in compensation.
• Then the publisher “generously” gives you a 35% royalty on the net profit, so you make $1.93 per book.
• The print cost is $2.52, so the publisher keeps the remainder: $1.05 per book.

That sounds fine, after all, they’re stocking your books and filling your orders, right?

Think again.

This is the typical outline of a paid-for publisher that uses the print-on-demand system for printing and Ingram’s distribution channel. Let me give you an industry secret here. The publisher does absolutely nothing to fill orders for your books. If you order directly from your publisher, it’s as easy as them going into the printer’s back-office, filling out a form, selecting your address, and the printer does all the work. The printer prints, binds, and ships the books to your door. If someone orders your book off Amazon, your publisher doesn’t lift a finger. The printer and distributor do all the work for them, and all your publisher does is sit back and collect the quarterly checks.

So on an order of 100 books shipped directly to you, your publisher just made $248 for something that took them less than 5 minutes, and that’s if the person handling your account is a newly-hired intern. If you sell 100 books on Amazon, your publisher just made $105 for doing absolutely nothing. Wouldn’t it be great if you got to keep that extra $105? After all, you’re the one doing all the marketing and promotion.

Now let’s think about the traditional industry for a second. No, you don’t have to pay anything up front to get your book created. And if you’re lucky you’ll even get an advance of at least $3,000.

But… (you knew that was coming, didn’t you?)

• The publisher takes 100% of the control away from you.
• The publisher requires you to create and implement your own marketing plan.
• The publisher requires you to pay for all your marketing efforts out of your advance, then out of your own pocket.
• And, the publisher “highly recommends” a specific PR firm for you to hire (a good PR firm will cost you a minimum of $1,000 per month).

Phil’s note: And then some.

Return on Investment

The author receives six percent of every book sold and the prestige of having a big publisher name on your book. In other words, on that $10 book mentioned above, you’ll make 60 cents. And that’s only after your advance is earned out. If you got that $3,000 advance, you’d have to sell 5,000 copies of your book to ever see another dime from the publisher.

Meanwhile, the publisher is keeping all of the profits. Let’s say after the distribution discount and print cost the remainder is $2.98. So before you see another dime, the publisher will make at least $14,900 on your book and you foot all of the marketing costs.

If you sold those 5,000 books through a vanity publisher, only through Amazon, you would have made $9,650 immediately. Imagine if you went indie! You would make that entire $14,900.

Now, it is true that the average self-published book only sells 250 copies. But it is also true that the average self-published book is unedited and poorly designed with no marketing plan. So if you treat your self-published book like it’s traditionally published, set it up the correct way for full distribution and keep your marketing doors open to bookstores, imagine how many copies you could sell!

I’ll leave you with two questions.

• When’s the last time you bought a book you really wanted solely based on who published it?
• Is going with a traditional publisher strictly for the ego boost and name recognition the “new” vanity?

I think that things are headed in that direction.

Feedback

What do you think of Kristen’s perspective? Is traditional publishing the new vanity publishing?

Kristen Eckstein has been coaching people through writing and publishing their books “indie” style for almost 8 years. She has appeared on numerous guest blogs and interviews as well as conducted local and virtual writing and publishing workshops. Get your free copy of her eBooklet, “7 Keys to a Best Seller” at www.UltimateBookCoach.com.