Author Archive

Product-Market Fit and the Bloomberg Terminal

March 17, 2015 | By Matthew "The Instigator" Guruge,
In: Insight
Bloomberg_PMF

Product-market fit (PMF) may very well be one of the most important terms to understand when marketing a product, and yet, we’ve noticed that not a lot of time is spent thinking or talking about it. This lack of consideration is surprising because PMF is a great lens to consider copy, pricing, market segmentation and product development.

PFM is simply the amount that a given product satisfies a segment’s demand. The term was coined by Marc Andreessen, the heralded entrepreneur who co-founded the first web browser, Net Scape Communication Corporation and Opsware (sold to Hewlett-Packard for $1.5 billion.) In his first blog post on the topic, Andreessen states that PFM is the most important concept to a startup.

Andreessen shrewdly states that independent of all other variables the market will determine the success of a company. This means that regardless of great features or brilliant management teams, the only thing that matters is the number of people that will pay for your product or service and how much they’re willing to pay for it. A slightly arbitrary measure of this consumer sentiment is whether or not over 40% of your consumers would be “very disappointed” without your product or service.

It’s important to note here, as Clayton Christensen, Scott Cook and Taddy Hall do in their outstanding Harvard Business Review article : “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!” So, when considering PFM, we must first consider the actual need that we are trying to satisfy, how many people have it and finally how well we can satisfy it.

Once you know the answers to the those questions, it’s easy to find your elevator pitch, price point, future vertices and necessary additional features because each business element stems from PMF. For instance, an elevator pitch is often just an explanation of PMF: problem statement, how we solve it, and why we are better at it than our competitors.

To understand how this can all fit together we dissected the ideal PMF of the Bloomberg Terminal in the early 1980s below:

1. Product-Market Fit starts with Timing

In 1981, a young Michael Bloomberg was laid off from Phibro Corporation, after they acquired Salomon Brothers, where he was a general partner and head of systems development. Bloomberg was given a $10 million severance package, at what turned out to be the ideal time to innovate in the financial industry. His many years in the segment had taught him one important thing: financial firms would pay top dollar for up-to-the-minute data.

A young Michael Bloomberg

src: nyc.gov.com

In that year, IBM released its first PC, the IBM 5150, to compete with the Apple II; the internet was based on the Deparment of Defense’s ARPANET, still two years away from TCP/IP protocols, which formed the backbone of modern internet; and most Wall Street executives weren’t using personal computers. A decade earlier, many people relied on ticker tape to get stock quotes.

Bloomberg set out into the entrepreneurial space just before the personal computer and the internet started to gain major prominence.

Timing: Ideal.

2. Product-Market Fit hinges on Stubborn Consumers

In 1982, Bloomberg assembled a group of computer engineers to develop the first product for his new company: Innovative Marketing Systems (IMS). The goal  was to build a complete solution that would provide up to the minute financial data, analytics and graphics in as many formats as possible.

The problem with developing a machine for financial executives was that many of them had never used a computer before and consumers are often slow to accept major paradigm shifts in the way they work. The early IMS engineers and Bloomberg needed to develop a trading-friendly system that any Wall Street analyst could pick up and use easily.

The group came up with a new color coded keyboard that changed the Enter key to a green Go and the Escape key to a red cancel. The F-series keys were also replaced with categories like “corporate debt” and “equity shares,” so that within just three keystrokes traders could find an exact quote and corresponding analytics for any financial product in the world.

Bloomberg keyboard

src: wikipedia

This user friendly design made changing to the Bloomberg Terminal more feasible for the computer illiterate Wall Street executives.

Consumer Stubbornness: Present but circumvented

3. Advantages over the Competition is Key

In 1983, Bloomberg and his team took their prototype to Merrill Lynch, who were so impressed that they bought 20 machines. However, their purchase came with a catch: Bloomberg couldn’t market the machines to any of Merrill Lynch’s competitors for five years.

After realizing just how powerful the terminals were, Merrill Lynch decided to invest  an additional $30 million into the company in return for 30% equity stake. With the additional capital, the IMS team was able to concentrate on product development and expand the functionality of the terminals.

Michael Bloomberg

src: businessinsider.com

Understanding how their product served their market, the team set out to build additional features. Most important of the upgrades was the addition of digitized financial data that had previously only been paper-based.

By 1984, the team was growing anxious about selling the product to a larger market than Merrill Lynch and its clients. So, they approached the firm and Merrill Lynch agreed to let IMS expand their sales efforts because it would benefit Merrill Lynch’s 30% stake in the company.

At the time, though, there were nearly 20 different companies offering financial computers to various firms.  However, IMS’s machines were more powerful, more user friendly and they had the major differentiator of digitized paper documents. IMS better served the market’s need and had a better PMF than their competitors.

Competition and competitive advantage: Highly competitive but with clear differentiation

4. An Established PMF enables Scaling

In 1986, IMS changes its name to Bloomberg L.P. Soon after, the firm began selling their product to the entire financial industry, instead of concentrating on buy-side firms. They opened an office in London; then, four months later opened one in Tokyo. Within a year they had installed their 5000th terminal.

New Bloomberg Terminal

src: wma.us

Subsequently, they acquired Sinkers Inc, a research company, that became the backbone of Bloomberg Princeton a 900 person research and data entry team that funneled even more information into Bloomberg terminals. The company was refocusing on their PMF. They knew that firms wanted more data and they were growing to further supply that simple need.

Bloomberg’s trajectory into other verticals like TV and journalism can be attributed to the same demand of more data and analysis. And that sort of concentration on the true need of a market led to a company that last year had almost $8 billion in revenue and has over 350,000 terminals installed around the world.

5. What to learn from Bloomberg

The  moral of the Bloomberg story is that the best way to grow a company is to concentrate on the true demand of the segment. In 2015, you might assume that Bloomberg set out to make the best financial computer, but if you examine the whole story, you realize that IMS was providing a data service. Their terminal was just the conduit through which the data came.

Once you understand that Bloomberg’s PMF is about an industry that has an insatiable appetite for data and a product that supplies the most data, you can easily figure out how to manage that product. Elevator pitch: “Wall Street firms need high quality data quickly to perform at their best. Bloomberg terminals  are a user friendly solution that can provide data and analytics on any financial product within three keystrokes. Moreover, our 900 person data team inputs more information into our subscription service than any of our competitors.”

The elevator pitch doesn’t even have to mention that its a computer, because at the end of the day, Wall Street Firms would have paid for a person to sit on their desk and tell them the information if that was the most efficient way to get it. Pricing, too, isn’t based on the computer. It’s based on the value of the data in the right hands. Today that’s worth about $20,000 a year per terminal. Bloomberg’s future verticals as mentioned above were mostly in journalism because it furthered Bloomberg’s ability to deliver data and analysis.

As marketers, then, we need to remember that everything stems from PMF. We need to consider timing, the stubbornness of the consumer and competitive advantages. And we need to ask ourselves: “are we the best way to make a quarter inch hole?”

 

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The Five Free Digital Tools We Use

February 22, 2015 | By Matthew "The Instigator" Guruge,
In: Insight
construction-management-main

There are a lot of collaborative digital tools out there. So many, indeed, that Tyler and I once spent a week researching and testing different ones to see which we liked best. Safe to say, we know just how much time can be spent thinking about what tools may work best within a company’s culture.

After a lot of experimenting, we found that the combination of Asana, Pocket, Sidekick, Hangouts and Google Drive works best for us. Here’s why we choose them and how we use them:

 

1. Asana:

Emails take up too much time. Asana was created for collaboration without email, which is exactly what it accomplishes. You may have noticed that we didn’t list any email orientated digital tools above. Gmail isn’t listed because we don’t use it internally, Asana completely replaces it (excluding chat.)

Matt's Asana

src: asana.com

Asana eliminates email by combining tasks, conversations, due dates, calendars and milestones into one slick product. The reason we think Asana works so well is that it hinges around tasks or action items.  This task concentration contrasts the ambiguity of emails which are saturated with useless information and verbiage. Moreover, the process of generating an email is comparatively a lot more time consuming than generating a task in asana. To put it simply, then, Asana makes project driven communication faster and more effective by cutting out all of the otiose aspects of emails.

The tool also allows users to attach files, set deadlines, comment on the tasks, like an action, add sub-tasks, and mark the tasks complete, giving you all the necessary components to collaborate without any unnecessary frill.

Asana was originally built internally at Facebook by co-founders Justin Rosenstein and Dustin Moskovitz. Moskovitz was Mark Zuckerberg’s roommate and the first CTO of Facebook. Rosenstein, a former Googler, had been working on an internal collaboration at Google before moving onto Facebook. At Facebook, the two tech stars put their heads together to design the original framework for the social network. In 2008, they decided to spin-off the company and give to businesses of all shapes and sizes. In November of 2011, Asana officially launched out of its beta.

Now the software is used by Airbnb, Dropbox, Pinterest and Uber amongs thousands of others. Even more, it’s free for up to 15 users, so you can give it a whirl without putting any cash down.

 

2. Pocket

Pocket is simply great. We read a lot of articles at F&F and Pocket completely changes the way you read, store, and share articles online. Pocket allows you to store articles and access them, ad-free, on any device as well as easily share the articles with friends.

For us, we use Pocket as a way to read articles on the go without having to go to a bunch of different websites as well as simply storing all the articles we like for easy access later.

Pocket, originally called Read it Later, was started by Nate Weiner in 2007. After getting millions of users, he moved the company to Silicon Valley, got venture funding and rebranded it to pocket. So far the changes seem to be working as the company has received millions in backing and has 12 million users.

 

3. Sidekick

Sidekick gives you a notification when someone opens your email and tells you what device the email was opened on. That’s it. The simple app is extremely useful, when emailing clients, because it lets you know if your emails are being ignored, forwarded on to many people or being opened right away.

Sidekick is a Hubspot app. Hubspot is the leading company in inbound marketing, offering a suite of various marketing and sales software. Sidekick is offered for free as an inbound strategy from the company that literally wrote the book on it. Hubspot get you to their website to download the app, gets your email and thereby, has you in the top of their sales funnel.

 

4. Hangouts

The only problem we have with Asana is that it doesn’t have a robust chat feature. So, we use hangouts for all of messaging. Hangouts is embedded into gmail, making it incredibly convenient and it has apps for all the major mobile devices.

Hangouts is a free Google product that was originally launched in May of 2013 as a consolidation of Google’s enterprise and free messaging tools.

 

5. Google Drive

Google drive should probably be listed as second on this list, but its nearly ubiquitous, so we thought it would be a boring number 2. Boring or not, Google Drive is integral for being able to work  collaboratively. The ability to share folders allows us to share all the files we are working on in the cloud, and access them anywhere.

To sum up, internally, all tasks are put through Asana, their files are stored in Drive, and their immediate conversations are executed in Hangouts. That’s how we do everything, it’s simple and it’s fast.

Google-Drive

 

 

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How to Occupy a Content Niche

February 2, 2015 | By Matthew "The Instigator" Guruge,
In: Strategy
Typewriter

By now, most companies know that they need to have a good website and a blog to look attractive to digital leads. What’s less ubiquitous is an understanding of how to leverage a website and blog to occupy a content niche.

A content niche is all of the pieces of content – blogs, e-books, white papers, books, videos, etc. – that are about a particular niche topic. To occupy a content niche, a company needs to generate or aggregate the best quality and most optimized content about that topic. The value of doing this is that if done successfully, a company will be able to attract leads through online searches who are interested in the niche the company is occupying. The lead, then, is generally promising because they are interested in the same thing the company is an expert in.

This post is a general overview of how you can begin to occupy your content niche. For illustrative purposes, we are going to use a real life example to walk you through the steps needed to occupy a content niche. We are going to be working with Parkview Sports Group, a sports facility consulting company, run by experienced entrepreneur, Tim Ziakas. Tim’s company works well as an example because its expertise is a very specific.

 

Step 1: Find out what people are searching for

The first step to occupying a content niche is to determine what words and phrases are already being searched for that relate to the content niche. We use two tools to do this: Keyword Planner and Google Trends. Keyword planner is generally more useful in determining what average search volume is for a phrase while Google Trends is better at identifying the change of a phrase’s searches over time.

There are many different ways to isolate the keywords that may work for a content niche, but the easiest is as follows:

1. Go to Keyword Planner and select the first section, "search for new keyword and ad group ideas."
2. Then, type in your specialty and your website and then hit enter.
3. Keyword planner will then generate the most searched words related to your content niche.
4. When we did this for Tim's company we found this:
Picture from Keyword Planner

Picture from Keyword Planner

Trying to compete for the best content around the phrase, “indoor soccer field,” doesn’t really help Tim, and there is probably already a lot of content about indoor soccer fields. But, “sports facilities advisory,” “sports facility management,” and “sports complex business plan” may not have as much content already published about them and they directly relate to what Tim does.

As you get more entrenched in a content strategy, you will begin to research keywords that are being searched that don’t have great content and then produce content to occupy the vacancy. Even a phrase that has 10 searches a month can be valuable if you rank number one for it. That’s 120 digital leads a year.

To begin, though, Tim can start to create content around the key terms above.

 

Step 2: Create Great Content

Now that we know the keywords that are in Tim’s content niche, he can begin to create great content to occupy that space. Great content is content that is well written, easy to read, keyword-focused, seo optimized, over 800 words and valuable. By valuable, we mean that a reader should feel like they learned something from the post.

When concentrating on a content niche, you should be able to create insightful content that goes beyond obvious suggestions. So, Tim isn’t go to write a blog post telling sports facility owners and operators that a cleanly building is better for business. Instead, Tim is going to create a specific post about how to calculate an individual batting cage’s maintenance and operation cost and how this number should be used to determine a cage’s rental fee. He would fill out the blog with other specific information and concentrate on the keyword: how to start a baseball training facility, which gets 10 searches a month on Google.

Then, Tim is going to make sure that he has an SEO plugin for WordPress to optimize the blog post itself. We use yoast, which is free, but there are others out there. Yoast is going to tell Tim to make sure that he uses his keyword in his title, URL and throughout his blog post, as well as creating a short meta description that will appear under the link.

As Tim continues the process of occupying his content niche, he will continue to generate more blogs and other forms of content around the necessary keywords.

 

Step 3: Become a Publisher

Loud Speakers

src: fastcoexist.com

Now that Tim has his content created, he wants to make sure people see it. There are three ways that people are going to see that blog you just published:

1. You send it to them via a newsletter of social media,
2. They searched the keyword in Google or
3. An associate shares it with them.

Essentially, creating the content is only about 20% of the work. The other 80% is making sure people see it. One great way to do this is to enter conversations online that would be furthered by the blog post, and sharing it there. For instance, if Tim comes across the Yahoo question, “What do I need to consider to start a baseball training facility?” he may post the link to this blog with a short synopsis of it. This action does three things, it furthers the online conversations by offering a good citation, it creates another location where leads can find the content, and it helps the overall ranking of his website by having a citation on another site.

Over time, Tim’s site’s NetAura (digital scorecard) will rise, causing Google to rank his content higher, making it easier to generate digital leads.

 

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3 Reason Why “We’ll figure it out” is the Best Phrase in Business

January 30, 2015 | By Matthew "The Instigator" Guruge,
In: Insight
People working together

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ne of the more interesting phenomena of language is our ability to convey a lot of meaning with a few simple words. From “I have a dream,” to “To be or not to be,” to “it was the best of times; it was the worst of times,” we have phrases made of no more than eight simple words that immediately resonate deeply with listeners.

Business, too, has its own aphorisms that when spoken indicate everything you need to know about the speaker’s mindset. At Flint & Foster, our favorite is “we’ll figure it out,” because when someone says it, you know with confidence that that person has the exact right attitude to get it done.

We tend to use the phrase a lot which is how we realized it was so powerful. Here’s why:

1. It indicates a collaborative mindset

Nothing important gets done alone. And the use of first person plural pronoun, “we,” is one of the best ways of indicating that someone knows this. By using “we,” the speaker is suggesting that they are going to put together an impromptu group to work on the problem.  And there’s a lot of data that suggests putting together small ad-hoc problem solving groups works.

In their seminal work, In Search of Excellence, which vigorously outlines the common patterns that emerge within America’s most excellent companies, Tom Peters and Robert H. Waterman Jr.  spend a great deal of time speaking about “skunk work teams” or ad-hoc problem solving groups.

The two actually begin the book speaking about Boeing’s group of product champions who, during a sleepless weekend, completely reimagined the design for the B-52 bomber after pouring through recently seized Nazi files. They confirmed days before the presentation that a swept-wing design was best for the wind tunnel and that if the engine couldn’t be on the main body, it was best to be suspended in front of the wing.  Over one weekend, a small group of Boeing engineers were able to put together a 33-page proposal and a 14-inch scale model put together from $15 worth of craft materials bought a local hobby shop.

Peters and Waterman go on to say: “The Boeing pattern emerged as the norm in companies as disparate as 3M and IBM; small, competitive bands of pragmatic bureaucracy-beaters, the source of much innovation.” While examining excellent culture, the two authors repeatedly detail walking into various great companies to find groups of people made up of random members from all sorts of divisions gathered around cafeteria tables, in front of white boards and convening in open conference rooms to work through problems.

All it takes to create these skunk work teams is one product champion who walks out of a meeting with a we-mindset and recruits whoever is around to work on the problem. Because at the end of the day, there is no mandate for creative problem solving, no step by step procedure, no rule book, there are just small groups of product champions who came together because one person said: “we’ll figure it out.”

2. It concedes that there is a problem without an apparent solution

The reason the term “solution” gets thrown around so much in business is because innovation and progress boil down to series of problems and hurdles that have to be overcome. Knowing that one of these issues has arisen is obviously the first step to solving it.

Admitting that there isn’t an apparent solution to the problem adds a level of nuance to the situation: “we know something’s wrong and we don’t yet know how to fix it” still conveys more information than “we know something is wrong.”

Essentially, this portion of meaning states that the speaker isn’t dancing with their language, they admit they know something is wrong and they don’t know how to fix it.

3. It affirms that the group will find a solution

While the speaker concedes the absence of a solution, they do affirm that they are taking control of the situation and through a collaborative process will find an answer. This portion of meaning, then, conveys that the speaker is responsible for leading the search for a solution to a problem.

By saying “we’ll figure it out,” then, a leader in a meeting can say that there is a problem that doesn’t have a solution, but that leader is responsible for finding one by working with other people. Not bad for four words.

 

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The 3 Pieces of Advice for Undergrads

January 29, 2015 | By Matthew "The Instigator" Guruge,
In: Insight
City with lights

[su_dropcap style=”flat” size=”4″]T[/su_dropcap]

his Saturday, I am going to be a panelist for my alma mater, Wheaton College’s, “Sophomore Symposium”, a program that helps sophomores make the best career path choices. Following Scott Hanselman’s advice to write a blog post on anything that is longer than 3 to 4 sentences and that you are bound to repeat, we decided it would be a good idea to put down all the ideas that emerged when I asked our team what they wished they had known as sophomores.

While a lot of the ideas that emerged were pretty ubiquitous – work harder in school, drink less, think about the future more – some of the ideas were more novel and nuanced.

Here are our favorite three:

1. Spend Serious time on Introspection

While this may seem like a fairly obvious predicament, we put it into the list to suggest some strategies for attacking it. The ‘what should I do with my life’ problem is like a lot of business issues we encounter everyday because it is large, nebulous, daunting and seemingly intimidating.

I can remember being a sophomore, weighing the benefits of careers in finance, law and academia with no tools to legitimately consider them while feeling totally overwhelmed and lost. I think that being at a liberal arts college, immersed in academia and surrounded by mentors who espoused the merits of academia, was part of my problem because I couldn’t see anything beyond additional formal education. With that in mind, my sights were solely set on getting my MBA, law degree or PH.D. I had no inclination that maybe it would be best for me to just venture out into the business world and to see what would happen.

Looking back, I should have realized that I am too rebellious to truly excel in a traditional format. But, nothing I was doing at the time was making me aware of this, which is why our team thought it would be a good idea to recommend serious and methodical introspection as a sophomore. We know that attacking huge, complex problems is all about chunking and finding the next action item so we came up with one approach:

In his book, Good to Great, Jim Collins outlines the nine ways that companies make the leap from good to great. In the fifth chapter of the book, Collins describes the Hedgehog concept which states that excellent businesses focus on a small territory of one thing they can be great at, opposed to foxes that try and defend a large area of things they can’t focus on. We believe that the concept that deals with the three circles below applies to individuals just as much as it does businesses.

The graph states that a business, or person, should find the intersection of what they can be the best at, what they love to do and what there is a market demand for. We think that worrying about what there is a market demand for is a red herring, causing people to concentrate on the wrong things. Even our firm’s limited exposure to the marketplace has taught us one thing: if you are determined to make money at it, there’s a way to do it.

So, we’re sure that as sophomores, time would be best spent concentrating on the intersection of your interests and your talents. Alan Watt’s video below, “What if money was no object?” is a personal favorite and a great video to get you in the mindset of thinking about what your interests and passions are.

 

We are pretty sure that thinking broadly about your passions probably isn’t too difficult. Although most people do have a lot of different interests and passions and it may be worth while making a list of things you like doing or things that interest you. The father of a friend, a fellow entrepreneur, has often said to us that we had to find the thing that “we could work at without looking at the clock.” For him, it’s hardware development; for me, it’s been bringing grand ideas to life.

While thinking of all the things that you enjoy may be relatively easy, the difficult part is finding how those things can intersect with your talents and personality and, for that matter, determining your talents and personality. On the personality front, we recommend taking the Myers Briggs test and reflecting on your personality type.

Recognizing your talents, then, is probably the most difficult part of this process and the part we have the least advice for. But, we will say that you can notice your talents by identifying the traits about yourself that are objectively more developed than your peers. They could be public speaking, physical fitness, the ability to empathize with someone or anything in which a person can have a skill in.

Essentially, our advice is that instead of looking at the different career fields and trying to find which ones align with you, we recommend looking inward and determining the intersections of your passions and talents and then finding careers that conform to them.

2. Experiment with Internships Early

If you have completed the first step, then you should have some hypotheses of what you might like to do. So, the next step must be to gather experiential data, or essentially test out your hypotheses. As entrepreneurs and creative problem solvers, we go through this process a lot. We spend time brainstorming possible solutions then testing them out to see if we were right with our initial thoughts. (We generally are.)

Anyways, the best way to test your career hypotheses is to get out into the real world and see if you like what you thought you might. It makes sense then to start trying to do a bunch of different internships early so that you can zero in when you find what you like. Again, this may go against the conventional thinking on the subject, but as a sophomore, you have nothing to lose by doing an eight-week internship on a whim.

As startup people, we may have a large bias here, but we recommend doing at least one internship at a startup because there’s often a lot of flexibility in a startup. Unlike applying for a major corporate internships where you will have a clearly defined role, at most startups if you notice you want to be doing something else, there is a pretty good chance they’ll let you work on it. Put simply, startups offer a lot of freedom to explore and opportunity to change direction without changing internships.

Either way, startup or not, you should get out there and test your hypotheses to see what you actually like as soon as you can.

3. Bring a Positive, Can-do Attitude

As a sophomore, there’s a good chance you won’t have a lot of relevant experience but you can make up for that with 1. energy, 2. attitude, and 3. effort. The easiest ways to display that you will bring these things to an internship are to be preemptive and action-oriented throughout the interview process.

By preemptive, we mean that you should do everything you can do before an action to be adequately prepared for it. For instance, if you are going to write a cover letter, which you should do whether or not the internship asks for one, you should start by doing extensive, EXTENSIVE, research on the company. Being specific and detailed is one of the easiest ways to stand out in a cover letter.

You have to remember that the person who chooses interns probably has a handful of more pressing responsibilities at the company. You want to display, as early as you can, that you are truly passionate about the company and what your role could be within it. For instance, if you were applying to be a social media intern for a company you found had very poor Facebook presence, you may spend a paragraph in your cover letter explaining how you would create content about their x-initiative, share content about industry leaders, naming a handful and respond readily to comments.

The above boils down to one thing: know the company and be able to articulate clearly what you can and will do for them.

Secondly, being action-oriented is a great way to make a good impression. By that we mean take the initiative on something early on. For instance, at F&F we ask our interns to take the Myers Briggs test mentioned above. It’s a good sign if they take the test and respond accordingly. It’s a great sign if they take the test and respond by talking about how their personality type may fit into the role they are going to play at F&F. Going the extra mile on a simple task is an easy way to show that you will get things done at a position.

To conclude, none of us knew what we wanted to do when we were sophomores. But, you can start working through that process now by looking inward, experimenting and having a can-do attitude.

 

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Market Masters: Ferdinand Porsche

December 5, 2014 | By Matthew "The Instigator" Guruge,
Ferdinand Porsche

[su_dropcap style=”flat” size=”4″]   J  [/su_dropcap]ust under the tumultuous political climate and war ravaged infrastructure of early twentieth century Germany, lie one man capable of conceiving an industry and a society poised to become its patrons. It was from within this precarious landscape that Ferdinand Porsche emerged as the century’s most influential automotive engineer, defining both sports and economy cars as we know them today.

His erratic career would take him from the humble coach factories of Jakob Lohner & Company to the peaks of racing prestige, from visionary and influencer down to war criminal and prisoner, and from burgeoning companies the world would never remember to a brand it may never forget.

Yet, the Ferdinand Porsche’s story is not only about the company that bears his name. It’s a captivating tale of how one man stood in the middle of an exploding industry, developing and designing its most known products, while being assisted and impeded by his country’s infamous dictator.

Chapter 1: He Had to Learn Somewhere 

Young Ferdinand Porsche

src: stuttcars.com

Porsche began his career in 1893 as an eighteen year old student employee of the engineering company, Egger. The job was suppose to enable the precocious teen the ability to earn a degree while he worked on the shop floor. But, Porsche’s natural feel for his work caught the attention of his superiors and he was soon promoted.

His promotion to the experimental department of the company effectively ended his formal education while giving the young engineer the opportunity to learn about and play with his new fascination: the automobile.

In 1897, the first recognized motor car was produced by Nesseldorfer Wagenbau and a new industry was officially born. Just a year later, the coach making firm, Jakob Lohner & Company, recruited Porsche to head up its new automotive division.

Porsche and his team immediately set to work building the firm’s first car. Within a year, they debuted the C.2 Phaeton, an electric, horseless carriage.

C.2 phantom

Src: cnet2.cbsistatic.com/

Showing an early feel for the importance of personal branding, Porsche engraved “P1” for Porsche number one on all the major parts of the carriage.

And Porsche was just getting started. Three years later, he invented the first hybrid car, called the Lohner-Porsche Mixte Hybrid. The car used an inventive mix of combustion and electric energy. Unlike the modern power switch hybrids, the Lohner-Porsche used two combustion engines to power an electric generator that powered the wheel hub motors.

Though the car was weighed down by its numerous engines, it was by far the most efficient design of its time. It broke several different land speed records and won the Exelberg Rally, all piloted by the eccentric designer himself.

[su_spoiler title=”More on Hybrids “]Today, cars like the Toyota Prius have combustion and electric motors that both power the main drive train. The motors can be combined or used separately to power the vehicle. Conversely, Porsche’s hybrid used the combustion motor to power the electric motor. So, Porsche came up with the hybrid to overcome the difficulties of energizing the electric motor, which was the integral power source, while today’s cars use the electric motor to supplement the combustion engine, which is the integral power source. [/su_spoiler]

In 1906, Porsche was recruited to Austro-Daimler to become its Chief Designer.
He worked at the firm for the next seventeen years. During that time, World War I broke out. The war interrupted the firm’s design work and forced them to begin working on military vehicles.

Porsche was in charge of designing various aircraft engines as well as the highly automated Motor-Moerser mobile cannon. For this work, Porsche was awarded an honorary doctorate degree from the Vienna University of Technology.

In 1923, he left Austro-Daimler, which was beginning to struggle because of poor financial management for another manufacturer, Daimler Motoren Gesellschaft. At the new firm, he earned another honorary doctorate and designed several cars including the eminent Mercedes-Benz SSK.

His tenure at the position would be short, though. After eight years, Porsche left Daimler Motoren Gesellschaft to start his own consultancy with hopes of designing a true economy car and the innovative genius to do it.

Chapter 2: New Firm meets Same Old Depression

Name Plate

Src: porscheengineering.com/

In 1931, Porsche founded his consultancy in the Weimar Republic (modern day Germany) city, Strugart.

He called it: Dr. Ing. h. c. F. Porsche GmbH, Konstruktionen und Beratung für Motoren und Fahrzeuge – roughly, honorary doctor of engineering Ferdinand Porsche’s designs and consulting services for engines and vehicles.

This entrepreneurial decision seemed doomed from the start as the economic climate was horrendous. The Weimar Republic was struggling economically and politically because of the one sided fallout of WWI. They were in the middle of a deep depression with a weak currency and high unemployment where people simply couldn’t afford cars. So, consulting contracts to design them weren’t abundant.

Two years before Porsche started his consultancy, the world was rocked by the 1929 depression. But, the Republic was hit harder than any other nation because they still hadn’t recovered from launching their new currency, the Reichsmark. This severe depression was creating a reactionary nationalism and frustration amongst the citizens, which allowed for the new Nazi Party, lead by Adolf Hitler, to gain prominence.

While Porsche was struggling to find contracts and working on projects devoid of backers, Hitler and his new party were quickly amassing support, eventually garnering one-third of the vote. In 1933, two years after Porsche founded his firm, Hitler was appointed by President Hindenburg to be Chancellor of Germany, the Republic’s second most powerful political role.

Just a month later, the Reichstag parliamentary building was set ablaze by unknown arsons. Hitler, leveraging broad fears from the attack, convinced Hindenburg to pass an emergency decree, making Hitler Germany’s dictator. And, with the new regime was about to come a flood of money for the German automotive industry.

Hyperinflation - Rise of the Nazi Party - Reichstag Fire - Hitler becomes dictator

Hyperinflation – Rise of the Nazi Party – Reichstag Fire – Hitler becomes dictator

Upon gaining totalitarian control, Hitler set out to stabilize and bolster Germany’s economy and one of the major facets of his plan to do so was was to motorize the entire nation.

Germany was changing. It’s new leader was stabilizing the currency, investing in automotives and inspiring hope for a depressed people. There was a massive opportunity to capitalize on the moment.

And Porsche was positioned perfectly to do so.

Chapter 3: Leveraging the Nazi’s

Nazi's with Beetle

Src: porscheprototype.com

In 1932, without any serious clients in mind, Porsche had started building a racing subsidiary. The company, Horchleistungs Motor Gmbh – High Performance Engines Ltd., was designing new a “silver arrow” racecar to compete with Porsche’s former employers.

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“I couldn’t find the sports car of my dreams, so I built it myself” – Ferdidand Porsche

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The subsidiary, which helped to fulfill Porsche’s urge to create great cars, did nothing for their bottom line. By 1934, the firm was in dire need of a big contract.

Propitiously, this was the same time that Hitler began to search out a company to work on his first automotive initiative: Volkswagon – The People’s car. Hitler wanted to accomplish in Germany what Henry Ford had accomplished in America: create a simple and reliable car that every citizen could afford. He even had the raw idea of a car with a rounded cab like a beetle’s.

In that year, the Nazi’s announced the contract soliciting design proposals. Porsche jumped into action sketching out a design that handily won the open competition. As their only major contract, Porshe’s firm concentrated on the Volkswagen project and built the first Beetle within a year.

Hitler instantly approved the design and pushed for the construction of a Volkswagen Factory to mass produce the Beetle. They decided to place the factory first and then build a town around it, which was how Wolfsburg was first founded.

Porsche wasn’t content just working on Volkswagen, though. He also had his eye set on Hitler’s second program, which gave 500,000 Reichsmark (approximately $3 million today) to fund the nation’s best racing team. But, Porsche had a problem. Hitler had indicated that he was leaning toward giving all the funds to Mercedes-Benz, the nation’s most prominent manufacturer.

Unable to accept the dictator’s incline, Porsche set up a meeting with Hitler to discuss alternatives. He suggested that it would be best for national pride if the money was split between two teams who would compete against each other.

Auto Union's Silver Arrow

Src: speeddoctor.net

Following Porsche’s advice, Hitler chose to split the money between Mercedes-Benz and Auto Union (a conglomerate comprised of Audi, DKW, Horch and Wanderer). This compromise was exactly what Porsche was hoping for because Auto Union didn’t have a suitable racecar.

With 250,000 Riechsmark and no car, Auto Union approached Porsche to bail them out. He convinced the conglomerate to buy Horchleistungs Motor Gmbh and its silver arrow racecar entirely for the majority of their grant.

So, in a matter of a few years, Porsche was able to siphon the majority of government’s grant money into his firm’s coffers. Respecting the hand that fed him, Porsche joined the Nazi party and then chose to become an officer in the Schutzstafell (SS).

But, associating with the Nazi’s would come at a major cost for the engineer.

Chapter 4: War, Prison and Heritage

Ferdinand and Ferry Porsche

Src: .stuttcars.info

In 1939, Germany invaded Poland officially starting WWII. Hitler quickly put the Volkswagen project on hold, forcing the Wolfsburg Factory to produce war vehicles instead of cars.

During that time, Porsche would add a heavy tank to his already impressive resume. It was officially called the Panzerjager Tiger (P) but people called it “the Ferdinand.”

After six years of using the Volkswagen Factory to help support the war effort, the Germans surrendered unconditionally. Things looked bleak for Porsche and his projects. They had only manufactured 630 Beetles and members of the SS were widely being tried for war crimes.

At first, there were talks of sending the Wolfsburg Factory to France as a war reparation, but the costs of the operation were prohibitive. Without the money or leverage to fend off the French Government, Porsche and his son, Ferry Porsche, were arrested as war criminals seven months after Germany’s surrender. After six months, Ferry was released. But, his father was to be held indefinitely until an exorbitant bail had been paid.

While Porsche sat in jail, Ferry set out to keep his father’s firm afloat doing anything he could to make money from automotive repair to racecar designs to water pump maintenance.

During that time, he designed and created his first car without his father’s stewardship. It was called the Cisitalia 360 and it was the first racecar with four wheel drive. Ferry sold it and its design to Piero Dusio, a notable soccer player and businessman.

Ferry used the money from the design to pay his father’s bond. When Porsche got back to Germany and saw the car his son had designed in his absence, he said: “I would have built it exactly the same, right down to the last screw.”

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“I would have built it exactly the same, right down to the last screw” – Ferdinand Porsche

 [/su_pullquote]

Finally reunited and free of wartime obligations, the father-son duo set out to build the first car to carry the Porsche crest, the Type 356. The pair faced multiple problems, though. Their Volkswagen factory was still under allied control and they had no money and no buyers for their 356.

The Type 356

Still, they pressed on and built their prototype by hand in a small factory in Gmund. It was an impressive design, able to reach speeds of 85 mph and punctuated with the thorough excellence that the brand would become known for. It quickly caught the attention of car enthusiasts, creating a broad demand for the car.

Finally able to sell their own cars consistently, the Porsche duo was able to scale the business. In just a few year, they went from manufacturing ten Type 356’s a month by hand in their small Gmund factory to employing 300 and producing eighty cars a month.

Sadly, the Type 356 would be the only car that Porsche would see bear his crest as he died in January 1951 at age seventy-seven.

Although Porsche’s most famous car, the 911, would not be made for another thirteen years, Porsche would die as the most distinguished automotive engineer of the century.

His legacy would show that he was a man whose talents matched his timing, whose country funded his explorations and whose designs would  live on: 

The Beetle New and Old

Src: motorward.com

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How They Did It: Xiaomi

November 14, 2014 | By Matthew "The Instigator" Guruge,
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our years ago, Lei Jun, a renowned Chinese entrepreneur and investor, gathered a dream team of engineers to pursue one audacious goal: “establish a bright new mobile phone company” . In just that time, their company, Xiaomi (pronounced “chow me”) has boldly usurped the Chinese cell phone market, becoming its largest phone provider, ahead of Apple, Samsung and Lenovo.

Xiaomi’s ability to outdo these corporate giants seems to stem largely from their nearly obsessive concentration on their customers. Xiaomi’s slogan is “Just For The Fans” and they clearly take it seriously. So seriously, in fact, that the phrase seems to influence all of the company’s decisions from manufacturing to sales.

This odd overarching philosophy is why Xiaomi’s story of nearly instantaneous success is not just about its great visionary or its brilliant marketing schemes. Instead, its an unfinished and intriguing epic about how an entire company has aligned to accomplish what was thought to be an impossible mission.

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