Welcome to the Experience Wars

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About 14 years ago, while being interviewed for a role at a leading web development firm, I was asked what I thought of Canadian banks from a branding perspective. I said they were bipolar and undifferentiated.

Bipolar because they couldn’t decide what was more important: being a big Canadian retail bank, or being a global brand. This was right after Paul Martin had balked at the suggested merger of RBC and BMO, a merger based on the banks’ belief that to compete on a global level, they needed to be much bigger.

Undifferentiated because, well, for two major brands like RBC and BMO to contemplate becoming one brand, they had to have had a lot more in common than not. Which they probably did. If asked at the time, I doubt a consumer would have been able to tell you what made them different.

After Martin’s rebuttal, the banks went, with their tails between their legs, back to their towers at Bay and King and returned to the daily business of retail banking. While good news for your average Canadian, it didn’t solve the differentiation problem. Aside from upstart Ing Direct Canada, experience at any of the banks was pretty similar. When customer experience was addressed, it was usually in the guise of operational efficiency and business process improvement. Cx initiatives were about improving the financial performance of various touchpoints rather than making customers happier.

As in all oligopolies, products and services tend to be the same, as are fees and rates. So if there is going to be a difference, it needs to happen at the experiential level. Which is why customer experience has become the newest theatre of brand operationalization in the Canadian banking world.

The one brand that has successfully distinguished itself as customer-focused is TD Bank. Its recent ranking by Interbrand as Canada’s top brand prompted a promotional campaign in which selected ATMs (renamed Automated Thanking Machines) say a big ‘thank you’ to customers by dispensing surprise gifts – from plane tickets to India to throwing out the first pitch to Jose Bautista at a Jays’ game. The whole thing was caught on video and posted to YouTube, which has so far produced about a half a million views.

It is a gesture that makes you smile, and makes TD look like it really does love its customers. But it is only a campaign, and certainly only a handful of such gifts were meted out. So now the real work begins: how do you apply the element of surprise and delight to the everyday banking experience? It’s a long play, a never-ending play, but the bank that does it will win the war. wn

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Piketty, Anyone?

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It took Thomas Piketty 800 pages to explain the scourge of income inequality that is undermining economies, threatening the foundations of civil society and eroding the infrastructure of social democracy these days.

It took HSBC eleven words.

To suggest that the most important economy is ‘yours’ is to appeal to the basest, most selfish ambitions of individual wealth creation. It suggests that ‘you’ (assuming you are the 1%) have your very own economy, one that operates independently from everyone else’s. It suggests the Thatcherite nightmare has come true, the one where the Iron Lady famously said, “There is no such thing as society. There are only individuals and families.”

In the words of Adam Smith, “No society can surely be flourishing and happy, of which the greater part of the members are poor and miserable.” And John Stuart Mill: “The idea is essentially repulsive, of a society held together only by the relations and feelings arising out of pecuniary interest.” And finally, Friedrich Hayek: “We must face the fact that the preservation of individual freedom is incompatible with a full satisfaction of our views of disributive justice.”

You could say the same thing about individual wealth. There can be no such thing as a personal economy. Individual wealth is not created by one person, but by the commercial relations that person has developed with others, whether they are employees, partners, customers or communities. It is allowed to grow because of the presence of public infrastructure in areas like health, education, transportation and security – infrastructure that cannot be created by any one person, but by the collective contribution of many. Without public infrastructure, there is no private wealth. Without a wharf, there’s no place to park the yacht.

If I were a one percenter leafing through my copy of Country Life, I would expect to see an ad like this. But it popped up in the middle of an article in the Globe and Mail about how competition may actually be ruining our economy, and that collaboration may be a better idea. The irony of that juxtaposition went down like a pint of castor oil.

In the advertising business, the term “bad ad” is the label given to the habit that strategic planners or creative directors have of quickly describing the potential idea behind a campaign. It’s shorthand for “here’s the message we need to convey, now go make a great ad out of it.”

There’s no making this a great ad. It’s just a bad ad, period. And a sad statement on the kind of world we’ve been building since the days of Reagan and Thatcher. wn

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Branding With Strategic Foresight

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We look at the present through a rear-view mirror. We march backwards into the future. The future of the future is the present.

This mashup of some of McLuhan’s most oft-repeated aphorisms highlights a particularly human dilemma. We are destined to view the future through the lens of the present – and more often than not, the past. In other words, we tend to imagine the future as an incremental extension of our own time, or of recent history. It’s hard for us to imagine things that don’t yet exist.

That’s because our brains are built to recognize patterns: we are naturally programmed to see things as we have already seen them. Conversely, we are naturally stressed by things we have never before encountered. Which is why many people fear the future, much less have the capacity to imagine it.

In developing strategy, the biggest mistake we can make is to design for the present. The brand you’re making now has to compete in the future. You have to design for what you don’t yet know. But how?

Our default when thinking about the future is to rely upon what foresight strategists call mental models, or “the deeply ingrained assumptions, generalizations or images that influence how one makes sense of and responds to the world”.  Changing these mental models is a key outcome of strategic foresight. It’s key because these models tend to be biased towards the past and based on faulty assumptions about the future. As Idea Couture foresight strategist Jayar LaFontaine writes, “These faulty assumptions, framed by an uncritical belief in incremental change, give rise to a ‘default’ future designed to preserve the prevailing way of doing things.”

Strategic foresight escapes the pull of the past by imagining futures that could occur, based on weak signals from the present. It helps us use these signals in combination with other data to speculate on how a product or a service or a brand might behave in any one of several possible scenarios, a process akin to wind-tunnelling.

Why engage in this kind of foresight? Because we are already creating the future, whether we are aware of it or not. So why not deliberately imagine it, and test the brand against a range of possibilities? Why not find ways to escape the trap of the rear view mirror?

For those who wish to escape a bias towards the past, strategic foresight reveals opportunities for differentiation in the future. Most brands, like people, look ahead by looking back through McLuhan’s mirror. By baking strategic foresight into the brand building process, therefore, you are already several steps ahead of the competition.

As Jeff Bezos has said, if everything you do is on a three-year time horizon, you’re competing against a lot of people. But if you’re willing to invest in a seven-year time horizon, you’re now competing against a fraction of those people. By lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue.  wn

Image credits: All images from the archives of American industrial designer Norman Bell Geddes, designer of the General Motors exhibit “Futurama: The City of 1960″ at the 1939 New York World’s Fair

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Roaring Green vs. Rolling Coal

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Perhaps only in America, land of increasingly sharp extremes, could the forces of innovation and degradation coexist with such equanimity, synchronicity and contrast.

In a montage of attractions that would make Sergei Eisenstein proud, we have a brand that has historically been an icon of machismo, with its insouciant roar, commanding proportions, and belching exhaust – Harley Davidson – making a play for the environment with its Livewire electric bike. As Harley’s VP Marketing says, there are other green bikes out there. But there are no badass green bikes. Until now.

It’s only a prototype, but it’s a glimpse of where Harley Davidson wants to take its business. It needs a much denser battery to achieve a minimum charge that lasts 100km, and that means this is still a few years away from production. Realizing that the sound of Harley is a big part of the brand’s identity, engineers paid special attention to the noise of the engine, tuning it to create what resembles the sound of a rocket. So it hasn’t lost any machismo.

At the same time, we have the emergence of an anti-environmentalist phenomenon called “rollin’ coal”, wherein owners of diesel-powered trucks tune their engines to produce copious amounts of soot-laden black smoke which they gleefully unload on unsuspecting pedestrians, passersby, cyclists, and Prius drivers.

Talk about reverse engineering.

It would be difficult to imagine a more vivid cultural contrast. The former is driven by a desire to technologically redefine the future of ‘machismo’ in an environmentally friendly way, the latter by a desire to drive culture back to the stone age. It is perhaps to be expected when, despite living in the world’s most technologically advanced country, 14% of America’s adult population is illiterate. (That’s 32 million people, equivalent to the total population of Canada).

Mash that up with an always-on, sound bite-hungry media, the attention-seeking allure of user-generated content and an increasing fear of the unknown across all classes, and you have a perfect post-industrial, sociocultural storm.

Let’s hope the roaring green innovation of concepts like Harley’s Livewire leaves the sociopathology of ‘rolling coal’ choking in a carbon cloud of its own stupidity. wn

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No Customer, No Brand, No Strategy

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Back in 1989 package designer Primo Angeli, fed up with the lack of respect that he and many other designers got from the marketing community, developed a process he called Rapid Access. Instead of developing the product first and then the brand afterwards, he proposed a reversal: create the brand first and the product afterwards.

His idea was based on the claim that it would be a lot less costly to develop a brand idea and a package design and test those with the customer than to invest in a lengthy product development process, then design the brand, and then test it with customers. To him, one of the advantages was that Rapid Access brought the customer to the table early in the process rather than later. It was both a way of mitigating risk and of basing product development on customer insight instead of on the ‘build it and they will come’ mindset that, even today, tends to be the rule.

He also hoped it would demonstrate to his clients that designers were more than just window dressers – they actually were capable of solving business problems and driving operational efficiency, something that would become almost a religion in management circles during the decades to come.

Jumping ahead to 2014, a recent blog by Mark Di Somma proposes something very similar: instead of building your brand around your business, build your business around your brand. In other words, ask the brand questions first and the business questions second. It’s interesting to note that the first question is, “who do you want to be your customers?”.

By inverting the strategic process, both Angeli and Di Somma demonstrate that the lines between brand strategy and business strategy are blurry at best. This notion was echoed in a 2012 post by Ashley Konson, who more or less proposed that marketing strategy and business strategy were basically the same thing: “Marketing strategy is synonymous with business strategy, not marketing communications. To limit marketing strategy to marketing communications is giving it short-shrift.”

He points out that “a business is successful when it profitably delivers a compelling value proposition to its customers”, and that profit is “the by-product of successfully creating, delivering and communicating the compelling value that customers are seeking.”

All three of these practitioners, in one way or another, prioritize the customer as the key to building a successful business. All three to a greater or lesser extent, manifest the wisdom of Peter Drucker’s now famous dictum that the purpose of a business is to create a customer. Would that more businesses saw things the same way. wn

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The Cluetrain Has Left the Station

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Twice in the last two weeks, I have been surprised to come across industry leaders suggesting that many ad agencies are only now discovering the disruptive effects of the technological revolution that has been underway since the early 90s.

One came in the form of a tweet about Winston Binch, chief digital officer at the agency Deutsch LA,  and a speaker at last week’s Future Flash conference, who apparently said, ”If anyone thinks advertising is not being disrupted, you’re crazy … the business will change.”

It struck me that what seemed to be very old news was making such a post-mortuary return in 2014. At a conference called Future Flash, no less. The message that digital will change everything about marketing has been around since The Cluetrain Manifesto of 1999, which, in its prescience, spoke of a world of ‘human to human’ marketing. So I tweeted back a prickly reference to the second Bush administration and moved on.

Then it happened again. This time in the form of an Econsultancy blog by Edwin Bos, VP Innovation at ratings and reviews provider Reevoo, enticingly entitled Are Consumers Killing Madison Avenue?. Within the first few paragraphs, Bos asks and answers a question:

“Why do they say we’ve no use for marketing? It’s because of the rising power of the voice of the customer.”

Duh! And then:

“With the growing availability of consumer opinions, the importance of brand messaging is diminishing. Consequently, things are changing in the world of advertising. Slowly, but surely.”

It took me back to being downsized, in 2001, from a global web development firm, like thousands of others at similarly affected outfits, in the wake of March 1st (the day in 2000 when the bottom started to fall out of internet stocks). I was fortunate to land a strategic planning role in a very reputable Canadian ad agency within two weeks of being thrown overboard.

Still smarting from my dishonourable discharge, I entered the advertising business and was shocked at how little everyone was aware of the gravity or what had just happened or of the fact that technology was about to turn their world upside down. Clearly, they were in a bubble of their very own.

They could be forgiven if they looked upon the burst of the dot-com bubble as a sign that this new medium really wasn’t all it was cracked up to be. It had over-promised and seriously under-delivered. There was still a lot of work to be done.

Thirteen years later, their world has indeed been turned upside down. Yet the speakers and the bloggers still complain that agencies have their heads in the sand. Why?

With the introduction of any new technology there is an initial investment bubble, a few years of market madness, stock market overvaluation and a precipitous collapse.  Then the real work begins, and the technology enters a long, quiet build out. It’s not until it becomes firmly entrenched that we realize that everything really has changed, just like the early enthusiasts said it would. This process takes years.

It was like that with the introduction of railroads, electrification, and automobiles. No different with the internet. Sad part is, the digital “clue train” left the station long before many in the industry realized it had come and gone.

Seems some of them are still on the wrong platform. wn

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Between a Bank and a Hard Place

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I never thought I would say this, but sometimes loyalty can be a bad thing. Especially if you happen to be a Canadian bank.

When you’re in a saturated market like this one, where almost all Canadians bank with one or more of the Big 6, it’s a double-edged sword. There are only two ways to grow your business: keep the customers you’ve got, and/or steal loyal ones away from your competition. Trouble is, the ones you’re trying to steal are as entrenched in their loyalty to your competitor as your customers are with you.

Tim Kiladze of the Globe and Mail recently wrote an enlightening piece about the bind that Canada’s banks are in. With few customers willing to switch, banks have to be more creative than ever in devising ways to both keep and attract them. Much of that happens at the product level – credit cards, co-branded offers like the Cineplex Scene card. These are acquisition-focused. For maintaining loyalty, customer experience at the level of basic service needs to be constantly improved. Hence the trend over the last few years to build customer experience departments.

The challenge is that incremental improvements, while important, are generally invisible. As they should be – experience should be seamless. In online banking, it largely is. But it is difficult to differentiate with incremental improvement. A disruption may be necessary.

But here’s the rub: in Canada, where the reigning mythology is that we have the most stable banks in the world, disruption is counter-intuitive. There’s tremendous comfort in the belief that, in a fragile global economy, our banks are considered to be imperturbable. Mess with that and you’re asking for trouble.

The principles of branding are still important, but they are table stakes in a highly saturated market with complacent customers. As Kiladze pointed out in his piece, you have to screw up pretty drastically to lose a customer in this space. Which means you’d have to behave in a drastically different way to steal one. From a brand perspective, Canada’s big banks are between a rock and a hard place.

So if you were the CMO of one of the Big 6, what would you do? wn

Photos: Top, Nick Chow, Jay Alvah; below, James Howe Photography

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Turning the Brand House Upside Down

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A couple of weeks ago this blog dared to suggest that brand practice needs some new rules to address the emergent realities of marketing in the 21st century.

Top of the list of blazingtuque‘s 6 ‘new rules’ was this one:

RE-HUMANIZE The practice of branding has for too long been focused on products, not on people. Putting people at the center of a brand means starting with human realities, not marketing fantasies or competitive look-alikes. Put real people at the centre of the branding process for authentic insights that lead to unique opportunities for brand experiences that can be almost impossible for competitors to duplicate.

In a recent HBR Blog entitled How to Execute  15-word Strategy Statement, Alessandro DiFiore, CEO of the European Centre for Strategic Innovation wonderfully illustrates how to “RE-HUMANIZE” strategic thinking, and how a subtle but significant change in the narrative structure of strategy statements changes everything.

Above is a typical example of product-based positioning statements. Pretty standard stuff, readily accessible via the internet.

Notice the hierarchy here: product first, category second, and customer third.

DiFiore, however, starts with the customer. Next comes her need. Then comes the product:

It’s a conscious inversion of the textbook positioning statement. More importantly, it tells a story, whereas the former is more formulaic, like an equation.

Reprioritizing the characters in the story forces you to frame your strategy within the context of a customer need. It still demands that you prove your claim, and that you test it against competitive offers to determine, as Kenichi Ohmae said, whether or not you are serving your customer more effectively than your competitors. And it still demands differentiation.

It’s important to note that, strictly speaking,  DiFiore is not proposing this as a brand strategy tool, but as a business strategy tool. The fact that he later dives down into proof points with the Blue Ocean strategic canvas should be a strong clue that we are not in Brand Kansas any more.

Or aren’t we? It not only strongly suggests that branding is a strategic process, but also that brand strategy and business strategy are basically the same thing. By making the customer the main character of a strategic narrative, you’re making your brand – and your business – more human. And humans engage with humans, not products. wn

Photo: Dennis Oppenheimer’s “Device to Root out all Evil”, 1997

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Lamborghini Spaghettini? Are You Kidding Me?

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Nope. Not kidding. In an exhibit currently running at the San Francisco Museum of  Craft & Design, artist Paddy Mergui has applied luxury branding to everyday commodities like milk, eggs, yoghurt and pasta. The inevitable cognitive dissonance highlights one of the core concepts of branding: the power of association.

The example above forces you to consider what we associate with the Ferrari brand. What comes to mind when you think of Ferrari? Speed? Craftsmanship? Italian design? Assuming it would be marketed at a premium price point, would Ferrari pasta taste any better than, say, DeCecco? For students of branding, this is a fruitful mental exercise.

If the cognitive dissonance of Ferrari Linguine prompts a ‘teaching moment’, Campbell’s Chicken Noodle Cigarettes or Marlboro Cream of Tobacco Soup take that notion into the realm of the absurd. As surreal as that may seem, there’s still great educational value in it, for it raises cognitive dissonance to the level of dialectics.

In other words, in the right hands, the intentional juxtaposition of two such disparate concepts can erupt in flashes of creativity and insight that never would have happened had these seemingly unrelated ideas not been brought together in the first place.

As any brand practitioner knows, the power of association is particularly critical when considering brand extensions. Sometimes they work, sometimes they don’t. The general rule is, don’t take your brand into a neighbourhood where it has no street cred. Hooters, the restaurant for breast-obsessed male gawkers, thought that cleavage could fly. Boy were they wrong about that. The busty airline business tanked.

Well if boobs can’t fly, Virgins can. If there were a poster girl for the stretchability of brand equity, her name is most definitely Virgin. How is it that founder and Chief Executive Cheerleader Richard Branson can cross-dress so successfully? Comics, music, cars, trains, planes, radio, mobile, space travel – there’s no category Virgin is afraid to enter.

The key is that we associate the Virgin brand with a personality, not with a product. On the other hand, we associate Ferrari with fast, expensive cars. Cars have curb appeal, not taste appeal. You can drive ‘em, but you can’t eat ‘em.

Just as Virgin is a brand based on personality, WalMart is a brand based on price. When you think WalMart, you think cheap. Really cheap. Cheaper than dirt. Thus, WalMart can take its brand into any category and you immediately know what that brand represents. If cheap is your primary purchase driver, WalMart can sell you anything it wants.

So if you ever have any doubt about a brand’s extendability, subject it to the Cognitive Dissonance test. Or better yet, the Dialectical Cognitive Dissonance Test. Forces you out of your little brand silo. You might be surprised at what you discover.

Feel free to steal that. wn

Top Image: Paddy Mergui; Middle image: Marlboro Soup and Campbell’s Cigarettes, www.doobybrain.com

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Old Brand Tools, New Brand Rules

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In the turmoil of the 21st century marketplace, the 20th century brand toolkit is starting to look as useful as a fax machine on a space station. Is it time for a new set of brand management tools and rules?

In the early 80s, Jack Trout and Al Ries gave us a simple, common sense approach to brand positioning. It was perfectly suited to the brand landscape of the time. It prioritized the competitive set over the customer base, in that its frame of reference was always other brands. It was always about figuring out how to wedge yourself into a part of the customer’s brain that was not yet occupied by any of your competitors.

It was a product-driven approach designed to operate in a much simpler media landscape and a more limited number of communication channels. Balance sheets were geared towards top-line growth and completely focused on customer acquisition. (Loyalty didn’t matter too much in a volume-driven marketplace). The focus in marketing was on messaging; customer experience wasn’t on anyone’s radar. Marketing communications were therefore a one-way street, where brands were doing all the talking and customers could only listen.

It was based on the assumption that the conditions of late capitalism would not significantly change. It did not anticipate the technological and economic disruptions that were about to happen. Its weakness was that it was perfectly designed for a mature industrial economy, not an emerging networked economy. So it was like giving marketers a knife to take to a gun fight.

Thirty years later, we are in a networked economy characterized by constant technological disruption, channel proliferation and fragmentation, over-populated categories and far fewer opportunities for differentiation. Far more technologically enabled and influential customers operating in much more intensely competitive categories are forcing a shift from customer acquisition to customer retention and from message to experience. They do not want to listen to brands; they want brands to listen to them. They want brands to back up their promises with action.

Jaded attitudes towards branding and advertising have resulted in lack of trust and the sharing of brand control with customers across social channels. In these conditions, traditional market research is at a loss; customers no longer want to be lab rats in front of a two-way mirror. They want a hand in making your brand. In this model, your customer is far more important than your competitor, and far more involved in brand-building.

Brand-building used to be about advertising and media. Now, it’s about experience, interaction, engagement, and response. In today’s brand-building, customer relationships are the platform and customer experience is the lumber. Post-industrial branding is still about occupying a unique territory on the competitive landscape, but you reach it through an intimate understanding of your customer’s unmet and unarticulated needs and by crafting a differentiated experience to match them.

So, herewith, blazingtuque‘s 6-point agenda for change:

RE-HUMANIZE The practice of branding has for too long been focused on products, not on people. Putting people at the center of a brand means starting with human realities, not marketing fantasies or competitive look-alikes. Put real people at the centre of the branding process for authentic insights that lead to unique opportunities for brand experiences that can be almost impossible for competitors to duplicate. (think Zappos)

UN-POSITION Amidst a sea of sameness, brands are still getting lost in the minutiae of indistinguishable features and continuing to claim implausible emotional benefits stemming from these.  In a market where customers have far greater influence and endless products that are “good enough”, smart brands are more concerned with how they fit into people’s lives and culture than where they fit in the competitive landscape. (think Method)

RE-RESEARCH Market research methods have grown tired and predictable. The effectiveness of the standard focus group is greatly diminished and increasingly anachronistic in a world of 24/7, real-time feedback via social channels. Surveys are great for making executives comfortable but are devoid of insight. As Roger Martin has said, data is no substitute for people. Today, insights require the listening and interpretative skills of the social anthropologist. Ethnography accesses the unmet and unarticulated needs that traditional market research misses. (think Campbell’s Go Soup)

EX-CATEGORIZE Why compete against the other million brands in your category? What nano-niche of positioning space is there left? Don’t compete with them. Compete with the whole category by creating a new one. (think iPad)

RE-WRITE The language of brand strategy has become completely commoditized. Brand attributes are selected from the same list of overused, generic terms that everyone in the business has access to. Imagine every book on the shelf in your library was written with the same 100-word vocabulary, and that describes most of what passes for brand strategy today. Finding the right language to articulate a brand strategy should be just as hard as writing poetry. It’s not supposed to be easy. (think The Brand Gap)

UN-REPLICATE You still have to be different. You still have to resist the temptation to ‘do the same thing only better’, which is what most brands try to do, and how most position themselves. And it usually amounts to a mere cosmetic difference. Meaningful differentiation is experiential. If you want to achieve meaningful differentiation, start with a real human need and work from there. Don’t be a solution looking for a problem that’s already been solved by a hundred others – and may not even be a problem that customers want solved. (think Airbnb)

Ready to rock? wn

This article originally appeared in the Spring 2014 issue of MISC Magazine. MISC is published quarterly by Idea Couture and is distributed in 28 countries around the world.

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