How to Speculate like a Successful Trader

You want to learn how to speculate?

Jesse Livermore is your guy.

He is one of the most methodical speculators—a real advantage in an area where adrenaline kicks in frequently.

Speculation differs from investment. Investors buy stocks looking for high-quality companies with long-term potential, while speculators only look for opportunities where significant price movements are likely (Investopedia).

As Keynes said:

“Speculation is knowing how the market will move before it does.”

So speculation is not limited to speculative stocks—stocks with a high degree of risk. Speculators look for opportunities everywhere. They are “arbitrage seekers”. Speculation includes commodities, real estate, and all kind of securities. What define a real speculator is his awareness of how much risk he takes and his expectation of high reward.

Jesse Lauriston Livermore was a gifted speculator.

Although he went bankrupt several times, he always succeeded to rebuilt million-dollar fortunes. In How to Trade in Stocks, Livermore teaches us everything he learnt from his personal experience as a trader.

Bonus: Download a free PDF with Livermore’s 7 lessons on how to speculate.

Livermore was absolutely passionate about his job.

He kept track of every move he observed on the stock market. Thanks to his carefulness, he succeeded to develop principles that help us to understand how to speculate. Whether you are a risk-taker or a careful investor, reading this article will make you a better decision-maker.

Jesse Livermore, the famous speculator and author of How to Trade In Stocks
Jesse Livermore, the famous speculator and author of How to Trade In Stocks

Every reader of How to Trade in Stocks will be enriched by Livermore’s wisdom.

Pick up the book and you’ll learn that intelligent speculators are not basic gamblers. They are meticulous. They know the extent of the risks they take and follow strict methods and rules.

Choosing to speculate is a strategic choice. It requires a real commitment of time and energy.

How to Speculate: Lessons from a Trader

Speculating on the stock market was Livermore’s full-time job.

He spent his entire day checking how stock prices move and spotting opportunities. Throughout his impressive experience, Livermore learnt a lot. After speculating, sharing his experiences was a second passion. That’s the reason why he wrote How to Trade in Stocks.

Let’s see what he has to teach you on how to speculate:

1. Never act on tips

I repeat: Never act on tips.

Best-case scenario, your source was lucky. Worst-case scenario, you lose money and a friend. If someone is right, why would he or she share a good idea to make money?

When someone gives a tip, there are chances that he did not dare to seize this so-called opportunity. Or that he did seize it. In the latter case, the tip is already old news and you will just comfort his position. So remember: Never act on tips.

2. Speculation is hard work

Speculation is not an easy way to become rich. It is more an exciting way to do so. Indeed, as you do not make some quick money in law or surgery, you will not by speculating on the stock market.

Speculation involves effort. And it takes time.

Livermore made an interesting comparison here:

Reading How To Trade in Stocks and keeping your habits is useless if you do not follow through. It’s the same if you read a book on “how to be fit” and then wait to become fit without changing your behavior.

3. There are times when you should speculate and times when you should not

Speculating is exciting! It creates the same set of emotions than gambling. So the more you speculate, the more you want to speculate.

But stop!

It’s not always time to speculate. Sometimes, the market does not present the significant opportunities that you can seize.

If you constantly speculate, you will sometimes take a lot of risk for small rewards.

Risk is part of the game. Yet, you should only take some risk when the reward is likely to be significant.

In speculating like in life, patience is key. Although it is hard to wait for opportunities to come out, it can be really profitable.

4. Form an opinion as to what the next move of importance will be on a given stock

There is one thing that good speculators have to do well: anticipating coming movements. You need to spot triggers.

Anticipate the psychological effect of a particular piece of news on the mind of the public.

Sometimes, a piece of news will not affect the market. There is no effect because the market is either overbought or oversold.

To speculate, you have to follow three steps:

  1. Form a definite opinion on stocks;
  2. Wait until the stocks become active and confirm your opinion;
  3. Then back your opinion by buying or shorting.

Livermore highly recommended waiting for the market to confirm your opinion with a strong movement. It is not because you haven’t immediately acted on a move that you wont make any profits.

Why should we wait?

Livermore pointed out that we may be right on anticipating coming movements of importance. But the most difficult part is to determine when it will arrive. If we immediately buy stocks, we risk to give up if the stocks drop in price before acting as we anticipated.

So wait for the market to confirm.

5. Respect your stops

Speculators have to insure themselves against considerable losses by taking the first small loss. When you buy stocks, decide at what price level you will give up your position.

We all make mistakes, especially on the stock market.

The solution?

Putting a price limit. It guarantees to minimize losses in case we were wrong.

Sell your position when the stock price reaches because of moves that were contrary to your first opinion.

6. Develop your own guide

Although Livermore’s advice is a must-to-know, no guide can be 100% right. Recommendations mostly depend on context, personality, and time. There is no permanent truth.

It is up to you to learn from your mistakes as much as possible. And then adapt to what you learned.

How to develop your own guide on speculation:

Livermore recommended studying price movements. Keep records of price movements and take the time element into consideration.

It helps to understand how the market reacts to news, and then to anticipate coming movements of importance.

Choose different stocks on Yahoo! Finance, for example. Record news that can be related to your stocks. Then, find the correspondence between the time element and your records so as to determine major moves.

7. Learn to recognize danger signals

Spotting danger signals will help you to minimize the losses and wait for more favorable opportunities.

What is a danger signal?

Danger signals are weird movements that happen on the market. When you observe that stock prices do not move as you anticipated, look at it carefully. If you do not understand why the stock price is going downward, sell and wait for the stock to act according to your forecast.

If the stock start a downward trend, no one can say when it will stop. It is wiser to sell, rather than to wait too long and lose lots of money.

How to Trade in Stocks
How to Trade in Stocks

3 Don’ts of Speculation

1. Don’t sell because a stock seems too high

If the stock price seems high, do not sell without thinking carefully about it. Instead, you must decide whether the price could go higher. If you have no basis justifying an upward trend, it may be wise to sell.

Livermore recommended waiting for a danger signal. He preferred losing a bit because of a slight drop rather than missing the opportunity that the stock goes higher.

2. Don’t buy because the stock price has decreased from a previous high

When the stock price just dropped, it is likely that the price will keep its bearish trend.

If you have not anticipated this movement, do not buy more stocks. You might think it is an opportunity to buy cheaper stocks. But you will just increase the risk of losing money.

Take your loss and buy again later, when the stock prices move according to your forecast.

3. Don’t average losses

Averaging losses happens when someone who just bought some stocks keep buying, even though the stock price is declining.

For example, someone buys ten Walmart shares at $10. The day after, the stock price drops to $4 and he buys ten more. He does that because he thinks that it is the same than buying twenty shares at $7.

This strategy is bad because he lost money. When he averages losses, he is justifying that he was wrong. Instead of minimizing his loss by selling the stocks, he takes more risk speculating on stocks he cannot predict.

Bonus: Download a free PDF to keep the rules of speculation on your computer.

The Ultimate Speculation Guide

How to Trade in Stocks is a great guide for those who want to learn how to speculate. Livermore’s book is full of wise principles that you can benefit to a speculator or an investor.

At the end, everyone has their own rules.

If you want to learn more about speculating

If you want to learn either how to speculate or to be a better investor, I highly recommend the following books:

Reminiscences of a Stock Operator: Reminiscences is a novel about Jesse Livermore and his experience as a trader. The book was published in 1923, but it still offers a lot of insights into the art of trading and speculation.

Intelligent Investor: It’s a classic. Warren Buffett’s favourite book about investing. It teaches the philosophy of “value investing”—the opposite of speculating.

Have a good read!

19 Things to Keep in Mind Before Speaking in Public

Knowing how to deliver a great speech is an essential skill for a leader.

Martin Luther King Jr., Steve Jobs, Barack Obama… They are great speakers. We all remember them for how they spoke in public.

But we don’t deliver speeches to such large audiences every day. Right?

We’re more likely to talk to the team we lead, to present something to stakeholders, or to speak at an event.

So it’s good to use these public figures to inspire us. But we also need practical tools to improve how we convey a message or tell a story.

Here’s a checklist that helps me before I have to do a presentation:

1. Know your audience.
2. Be clear on why this presentation needs to happen now.
3. Keep your feet grounded on the floor (no dancing).
4. Make sure your audience understands where your credibility comes from.
5. Open your arms. Owning your space like the Vitruvian Man will boost you level of confidence.
6. Convey a clear message. Clarity is essential to good communication.
7. Be more confident. Confidence comes with preparation and practice.
8. Breath!
9. Use the adrenaline rush to your advantage.
10. Pause. Communicating also happens through silence.
11. Slow down. Chances are your speaking too fast.
12. If you’re well prepared, feeling nervous is the result of vanity. Speaking in public is not about you, but about your audience and the message you want to deliver.
13. Get rid of the tension. Relax your shoulders. Again…
14. Work hard on the content and the format.
15. Get rid of the “hmm…”, “like”, and “you know”.
16. Show a high level of energy and be in the moment. (On a 1-to-10 scale, how engaged are you?)
17. Find a way to summarise your message in three points or a two-sentence story.
18. Repeat this message.
19. You’re on stage to tell a story. You’re there for your audience. Serve them.

 

Run Better Customer Interviews: Never Ask These 3 Questions

“What do our customers really want?” That’s what you want to find out.

But are you asking the right questions?

Some questions should never be asked. Never.

1. Do you think this is a good idea?

2. Would you buy this?

3. How much would you pay for this?

Why Are These Questions Bad Market Research?

There are many reasons asking these three questions won’t help you.

  1. Your customers can’t predict in the abstract if they will buy a new product, in the future
  2. The chances are they are polite people. Are you sure they’re not telling you what you want to hear?
  3. Your customers don’t make the same decisions when they’re peacefully browsing the Web on their sofa as when they are with you.
  4. They aren’t making any trade-off (money, time, reputation) when they answer your question. They’re not bound by their decisions. But this is what happens when they make choices in real life.

These reasons are all linked to one principle:

It is so far removed from the real world.

You can’t delegate market research to your customers. Asking for their opinion means that you are trying to make them do your job.

As innovators, we are investigators. We have to decide whether our ideas are good. We have to answer ourselves the questions: “Will they buy it?” “How much will they pay for it?”

Let’s avoid lazy market research. We want reliable customer insight.

What shall you do?

Observe their buying behaviour. Test the product in the real world. Learn from what happened. Improve the business model. Repeat…

[For a good customer interview method, I highly recommend Rob Fitzpatrick’s book: The Mom Test]

 

13+ Examples of the Best B2B Content Marketing in Venture Capital

Venture Capital & Content Marketing

Content marketing is the trendiest digital marketing technique.

And venture capital gives great examples of B2B content marketing. Think about the reputation that venture capitalists have built. Both investment funds (the limited partners that invest in VC funds) and startups really trust VCs.

How?

This is what you’re going to find out in today’s article.

As an entrepreneur, you’ll get new ideas for your own marketing strategy. As an investor, you’ll get a glance at what your competitors are doing.

But before sharing the analysis, I just want to tell what you content marketing really means.

What Is Content Marketing?

Here’s how the Content Marketing Institute defines “content marketing”:

Content marketing is a strategic marketing approach focused on creating and distributing valuable, relevant, and consistent content to attract and retain a clearly-defined audience—and, ultimately, to drive profitable customer action.”

It’s a marketing strategy based on what Seth Godin calls Permission Marketing. Instead of paying for advertising in order to get the attention of a specific audience, content marketing allows you to get their attention organically.

Here’s how it works:

Customers decide to pay attention. Not because you interrupt them with an ad, but because you’re showing them something they find interesting.

The price for the attention is not the money you spend to get your ad in a medium—like a magazine. But it’s the time and resources you spent to create a valuable piece of content.

In the context of content marketing, “valuable” mostly means “practical” or “entertaining”.

What you should do depends on your industry.

For example, the venture capital industry benefits from being practical, while the fashion industry thrives by sharing entertaining content.

A Short History of Content Marketing for Venture Capital

Venture capital investors started blogging in early 2000s. At the time, it was certainly more a hobby than a way to compete for attention.

Nobody used the term “B2B content marketing” at the time.

Since they were sharing valuable advice for free, some of them started getting lots of attention from entrepreneurs and other investors. This was the beginning of this loving relationship between venture capital and content marketing.

Sarah Tavel, partner at Greylock Partners, see content marketing as the “freemium model” in venture capital:

“We’re trying to give you a taste of what we’ve got so you take some of our money.

Don’t you think that fits? All our VC blogs and tweets are the [free] 2.5GB equivalent of Dropbox.”

But with a growing competition, venture capital firms were facing a real need to differentiate from each other. Blogging wasn’t enough.

As marketing strategist Dorie Clark pointed out, a major shift happened in 2013:

  1. Some VC firms started doing content marketing like professional publications like First Round Capital did with its own version of Harvard Business Review.
  2. They hired editors, journalists, and content marketing experts. For example, Andreessen Horowitz hired former Wired Senior Editor Michael Copeland and NextView Ventures hired former HubSpot head of content Jay Acunzo.

Does Content Marketing Always Work in Venture Capital?

But it’s not because you hire a professional journalist that things will work out. And it’s not because you have a reputable brand that people will start reading your content.

Sequoia Capital hired a professional editor and tried to launch Grove, a portal for how-to content, videos and events. It somewhat never really took off.

What does it tell us?

Content marketing is not a mere communication medium.

It has to fit with the firm’s positioning strategy—which implies that the firm knows how it differs from other VCs.

Great content marketing doesn’t just get people’s attention. It embodies a particular positioning and makes the audience associate the VC firm with a specific element of differentiation.

Now, you’re clear on what content marketing means.

Let’s see how these VC firms implemented their content marketing strategy through different formats like articles, podcasts, and videos. [1]

How Venture Capital Uses Content Marketing

Blogs: Write, Distribute, Repeat

A lot of VCs jumped into blogging when Fred Wilson’s AVC blog and a few others got traction. But many didn’t have the stamina to write regularly in order to attract a loyal audience. This is why we’re left with lots of what CB Insight calls “Zombie VC blogs”.

Writing to captivate an audience is difficult and time-consuming. You need a real passion for the art of writing if you want to keep showing up for years.

Why do venture capital investors write?

There are obvious marketing advantages. You prove your credibility by sharing thoughtful ideas. This contributes to building a name for yourself to be top-of-mind of entrepreneurs, tech journalists, and other VCs.

But writing is also altruistic, as it’s a way to help and inspire entrepreneurs. On personal level, it also helps you think more clearly and stimulate your creativity.

As Mark Suster wrote:

“It’s when I can switch from Manager to Maker. I can express and convey thoughts about complex topics that help others peel back the layers of an onion in trying to understand the worlds of startups, technology, and venture capital.”

Many VCs write. So they need to differentiate themselves. You’ll see that all the featured VC writers adopt very different strategies.

 

Content marketing by investor Paul Graham

Paul Graham: Collection of Essays

Paul Graham’s collection of essays is a must-read. You feel that each essay aims at being timeless. And so the collection looks more like an ever-expanding book than a blog.

Paul Graham doesn’t just share his last new idea about startups. Every essay is carefully thought and discussed with some of the most prominent tech and business experts.

See the long acknowledgement for How to Get Startup Ideas:

acknowledgement_paul-graham

Obviously, his writing is about helping but also part of a clever content marketing strategy. You notice that some essays start with a non-intrusive call-to-action that encourages you to apply to Y Combinator.

Here’s an example with Startup = Growth:

call-to-action_paul-graham

Most essays have inspired many many entrepreneurs. And they’re definitely worth reading more than once. Paul Graham’s strategy shows that sharing well-thought ideas make it easier to spread them.

My favorite essay is Life Is Short. It’s the kick in the ass that you need to remind you that nothing will last forever.

Highly recommended.

More here: http://www.paulgraham.com/articles.html

 

Content marketing by VC Fred Wilson

Fred Wilson: Daily Blogging on AVC.com

Fred Wilson is one of the first VCs who started writing when blogging was still a thing (in 2003).

He takes a more quantitative approach than Paul Graham. Fred Wilson is committed to shipping something new every day. From featuring a new startup to giving precious advice to founders to curating thoughtful content, he never gives up.

One day = One new thought

Writing daily has two advantages:

  1. It encourages your audience to come back regularly. They know that there will always be something new when they come back.
  2. The challenge of publishing every day forces you to be more creative. You have no choice. You’re committed to share something new and worth reading every day. [2]

Fred Wilson shared some insight about his blogging recipe:

“The most important part is to engage. The second most important part is own your online presence.”

  1. Have a long form blog on a domain that you own and that is permanent.
  2. Participate actively in the social distribution platforms.
  3. Build community on your domains.
  4. Engage everywhere (Hacker News, other blog communities/comments, Twitter, Facebook, etc).

Another ingredient of the “Fred Wilson School of Blogging” is a real commitment to showing up for (13+) years:

“People ask me when I am going to write a book and I laugh at that suggestion. AVC is more than a book will ever be. It is live, it is deep (in terms of total posts), it keeps going, evolving, and ends when I end.”

Two of my faves from Fred Wilson are What Is Strategy? and Product > Strategy > Business Model that I mentioned recently here (writing about setting the right priorities).

More here: http://avc.com/

 

Content marketing by VC Brad Feld

Brad Feld: Thoughts on SaaS, Startup Ecosystem, and More

Brad Feld also started early (in 2004). He doesn’t ship every day but almost.

Unlike most VCs, Brad Feld chose to write on different platforms. He shares his personal thoughts on his blog. And more practical advice on Startup Revolution and Ask the VC. [3]

Brad Feld is certainly one of the most a prolific VC writer with three blogs and multiple books.

Here’s his take on this:

“I write to think.”

Another reason for Brad Feld success is that he started demystifying venture capital at a time where things were very opaque for founders:

“There was so much positive feedback on demystifying this one element of venture capital (term sheets). This time frame — 2005/2006 — web 2.0 was starting. Venture capital was still kind of closed, 1st time entrepreneurs had a lot of questions that were unanswered, and there was still some sort of hand waiving around all the financing stuff and so we took it on.”

More here: http://www.feld.com/

 

Content marketing about venture capital by Mark Suster

Mark Suster: Talking Venture Capital on Both Sides of the Table

Mark Suster is another committed writer.

What I really like about Mark Suster’s writing is his transparency. He shares stories and thoughts that many would have been reluctant to share.

Here’s an example with What Do Industry Insiders Think Will Happen in VC in 2016?

We can easily say that, like Brad Feld, he has contributed to (1) making the VC industry more transparent and (2) educating entrepreneurs about how to deal with investors.

What’s particular with Mark Suster’s strategy is that he focuses on building a brand name: Both Sides of the Table. The name speaks for itself and highlights a well-defined positioning strategy.

Among the VCs I mentioned, Mark Suster is the only one who switched his blog to Medium. He’s also exploring other forms of content like what he calls Snapstorms, certainly inspired from Marc Andreessen’s Tweetstorms.

More here: https://bothsidesofthetable.com/

 

Content marketing by investor Sam Altman

Sam Altman: Personal Thoughts about New Ventures, Silicon Valley, and More

Sam Altman succeeded Paul Graham as President of Y Combinator. And reading Sam Altman’s writing makes you think about Graham’s style:

Always thoughtful.

(You can see how their ideas complement each other in this article.)

His writing is much more casual. He’s not here to build an audience. Sam Altman focuses on sharing his thoughts on today’s startup world. He publishes something because he has an interesting story to share, not because he hasn’t written for while.

My fave from Sam Altman is not about business but life: The days are long but the decades are short.

More here: http://blog.samaltman.com/

 

ben-evans_blog

Ben Evans: Analysing the Future of Tech

Ben Evans is not a VC per se, but works at the venture capital firm Andreessen Horowitz.

He has done a great job at building a loyal audience thanks to the quality of his work. In less than 5 years, he went from zero to almost 300,000 pageviews/month. (It’s not the best metric to track, but it shows that Ben Evans got his content strategy right).

Content Marketing analytics for Ben Evans

Let’s dig a bit into this:

  1. Every article is the result of thorough analysis. Ben Evans does publish regularly but only when he has something new to write about. Original and well-thought ideas win.
  2. Ben Evans has a clear positioning. He writes about the future of technology, with a special focus on mobile. If you’re not interested just get out. But if you are, you’re likely to keep his name on the top of your mind.
  3. He keeps in touch with his audience regularly. Ben Evans leverages the idea behind permission marketing with a weekly newsletter. It’s a nice way to share curated content—what he reads— and to distribute his own content—what he writes.

As Ben Evans points out, building an audience is a massive challenge because:

“The problem isn’t freedom or openness but distribution.”

Everyone can create content. The challenge is to distribute it. How can you make sure that it will end up in front of the right people?

Ben Evans also exploits an unfair advantage. His job at Andreessen Horowitz is to come up with ideas about the future of technology. So there’s a real synergy between his job and his writing.

If you are not familiar with Ben Evans’s writing, get a look at his 16 mobile theses.

More here: http://ben-evans.com/

Podcasts: Interview World-class Guests

Podcasts are another way to do good B2B content marketing.

They’re great for three reasons:

  1. Your audience can listen to them while they’re doing something else like commuting;
  2. They allow you to share stories that nobody would have put in written words;
  3. Recording a podcast episode takes often less time than writing an article.

(Interested in leadership and personal growth, subscribe to Unlock People’s Potential—the podcast I host.)

The a16z Podcast by Andreessen Horowitz: The Future of Tech & Management

a16z_podcast

The a16z Podcast focuses on two main topics: the future of technology and high-level management advice. (And I think this is what they want to be known for.)

From interviews of thought-leaders to extracts of conferences, the podcast digs deep into ideas on the world of tomorrow.

Most episodes are very technical. When the a16z team talks about tech, they always go into the nitty-gritty. Same when the topic is about management and leadership challenges.

Here’s a pretty good example: Managing Uncertainty — Layoffs and Talent with Shannon Schiltz and Alex Rampell.

More here: The a16z Podcast

Traction by NextView: Early Stage Growth

traction_podcastTraction does a great job at sharing the stories of early stage startups. The content focuses on those first 18 to 24 months of a company’s growth. It shows that NextView addresses a well-defined audience: the “garage-stage” founders.

It has different podcast strategy.

What I really like is its well-edited format. The podcast doesn’t sound like a typical interview. Each episode is a mix of the interview of a guest and Jay Acunzo’s voice-over sharing additional context and advice.

One of my faves is Patrick Campbell’s story about how he started Price Intelligently.

More here: Traction

The Seedcamp Podcast: Uncover the European Startup Ecosystem

seedcamp_podcastMost of the resources I mentioned focus on the US startup ecosystem.

This is not the case here:

The Seedcamp Podcast puts an emphasis on the European tech scene. In each episode, Carlos Espinal, Partner at Seedcamp, interviews the founders, mentors, and investors who have contributed to building the European ecosystem.

This is how Seedcamp highlights its leading role as an early stage investor in Europe and its massive network of mentors, partners, and alumni.

More here: The Seedcamp Podcast

The Tim Ferriss Show: Long-form Interview of VCs

tim-ferriss-show_podcastAlthough Tim Ferriss is not a venture capitalist per se, he invested in many success stories as a business angel. And he got to do that thanks to a clever content marketing strategy based on long-form articles, books, and now a podcast.

Besides the quality of his show, the reason he deserves a spot here is the great interviews he did of some of the most prominent venture capitalists and business angels:

Unlike most initiatives listed in this article, Tim Ferriss makes money out his content. It’s his main job after all. And with nearly 70,000,000 downloads in two years of existence, he would be mad to wast the opportunity to make a few dimes from advertising.

More here: The Tim Ferriss Show

Videos: Record Events and Share Them Online

 

how-to-start-a-startup_video

Y Combinator on How to Start a Startup

How to Start a Startup (or Stanford’s class CS183B) is a series of lectures by Sam Altman and many guests who are part of the Y Combinator ecosystem.

This is pure gold for someone who wants to start a business. There are lots of advice that will help you avoid the mistakes that most first-time entrepreneurs make.

Running this class was a wonderful marketing success for Y Combinator and Sam Altman. I’ve heard of so many groups that were created in order to watch and discuss each episode together. Beyond sharing online content, Sam Altman succeeded to get into people’s offline lives.

The team also did an excellent job at sharing the content in different formats with a YouTube Channel and a podcast.

The initiative is a proof that working on your content marketing strategy with a partner works well. This is especially the case when the two partners have popular names like Stanford and Y Combinator.

More here: How to Start a Startup

 

technology-enabled-blitzscaling_video

Greylock Partners on Technology-enabled Blitzscaling

Following Peter Thiel’s CS183A and Sam Altman’s CS183B, Greylock Partners ran a class called Technology-enabled Blitzscaling (or Stanford’s CS183C).

While CS183B was about starting your business, this class focuses on scaling your business.

This class received less buzz than How to Start a Startup. (I may have missed something but less people seemed to know about it). I actually found out about it on Medium through Chris McCann’s notes.

But with guests like Google’s Eric Schmidt, Yahoo’s Marissa Mayer, and Airbnb’s Brian Chesky, it makes you appreciate that Greylock Partners and Stanford share this class for free.

More here: Technology-enabled Blitzscaling (video) and Notes

 

500-startups_video

500 Startups on Traction and Growth

500 Startups does a great job with video content. And its content marketing strategy doesn’t require a lot of work.

The videos are recording of conferences that 500 Startups organise regularly like the Weapons of Mass Distribution Conference 2015. No need to come up with original ideas, the speakers do the work for you.

The content is a nice push for the new positioning of 500 Startups around marketing and growth for post-seed startups. Here’s an example with the 500 Distro series.

The goal is to highlight the credibility of 500 Startups in scaling startups with tons of expertise and a large network of growth marketers.

More here: 500 Startups

Books Worth Reading about Venture Capital & Entrepreneurship

Books are also part of a good B2B content marketing strategy. Consulting firms and so-called “experts” master the art of publishing books to sell their B2B services.

As author Ryan Holiday wrote:

“Books are no longer simply books, they are branding devices and credibility signals.”

Books are a filter.

Everyone can publish a blog article, less people can write a book. So a book generates more significant credibility signals. Write the same content in a few blog articles and people won’t take your expertise as seriously.

Here are some examples of books by VCs:

  • Zero to One by Peter Thiel and Blake Masters — The philosophy behind the rapid growing ventures in Silicon Valley.
  • The Fundraising Field Guide by Carlos Espinal — A manual for the entrepreneurs who want to know more about how to raise money.
  • Venture Deals by Brad Feld — A more technical guide to raising money.
  • The Hard Thing About Hard Things by Ben Horowitz — Practical wisdom for managing the toughest problems a business can face.

(Look up here to find my list of the best books for entrepreneurs.)

Some Pearls of Great Price about Tech Startups

The best examples of B2B content marketing share something valuable to their audience. You see all the examples above aim to help founders build better startups.

Some ideas of content are about being a founder—personal development. Other ideas deal with how to start and grow a startup—business.

It’s often hard to explain why but some ideas take off better than others. Usually, it’s because they fill a gap. The content provides some guidance that entrepreneurs were missing.

Here are some pieces of content that went viral:

(Hacker News is also the proof that user-generated content works well in B2B too).

These “pearls” show that the major factors that make content marketing thrive are sharing practical, original ideas and doing things differently.

Evergreen content works.

How Do Venture Capital Firms Benefit from Content Marketing?

You see now that there’s a lot of free, high-quality content out there. But why do these investors spend their time sharing this?

Three main reasons:

  1. They love to help;
  2. They benefit from a more mature startup ecosystem;
  3. They’re competing for the attention and trust of startup founders.

If you find what they share interesting, you’re likely to trust them more and even to spread the word about their work.

So content marketing is a way for them to make sure that the day you want to raise money, you’ll have their name on the top of your mind.

Generating a good deal flow is a challenge.

So every marketing initiative is an opportunity to encourage entrepreneurs to think about a specific VC firm. This is why venture capitalists speak at conferences, network a lot, do tons of PR, and share precious advice for free.

Where Is This Content Marketing Thing Going?

Venture capital is competitive because it relies on (1) finding the right startups to invest in and (2) convincing the founders that your commodity—money—is worth more than someone else’s commodity—still money.

This means that great venture capital firms must add more value than just money—network, brand name, support…

At the beginning content marketing was a nice way to show how a venture capital firm could add value.

But here’s the catch:

After almost 15 years of publishing free advice about the rules of the startup game, almost everything has been said. Everyone has access to some of the best startup lessons for free.

Value comes out from scarcity. To stand out, a venture capital firm would have to do things differently: solve problems that haven’t been solved, talk about things nobody talks about, come with a new angle, specialise in a vertical and nail it…

Distribution, the Growing Challenge for B2B Content Marketing

Besides improving the “quality” of your content, you also need to nail your distribution strategy. As Ben Evans points out, this now the biggest challenge in marketing.

The distribution channels that perform the best are the ones that are well segmented, those who are specific to your industry. Clement Vouillon of Point Nine Capital summaries it well:

“Go beyond the obvious content distribution channels (Twitter…) and start to use industry specific channels.”

Content marketing fit

The right content marketing startegy focuses on what the audience—the customers— wants to read/listen to/watch and where they go to consume this content.

Content Marketing Is Not Only Challenging for Startups but also for Venture Capital Firms

As you see, marketing remains a challenge for the venture capital industry.

Venture capital might be seen as holding the keys for startup success. But they also are businesses with their own challenges and competitors.

Like What You Just Read about B2B Marketing and Venture Capital?

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Notes about B2B Content Marketing and Venture Capital

[1] One Thing to Keep in Mind: Who Is The Customer?

Even though most VCs share content for free because they like helping people, it’s also part of their job.

In an article, Arthur Attwell highlights how startup lovers became customers of a new market:

“This is one, a note to my future self: Don’t call your projects ‘startups’. It’s a semantic trick, but a really important one. Here’s why. ‘Startups’ have become a commodity in an industry of startup conferences, websites, courses, and competitions.”

Be aware that content marketing is an alternative to advertising. It’s another way to get your attention as a customer.

So when you raise money or take part of a startup programme, you are the customer.

[2] Shipping every is something that Seth Godin has been preaching for a while. Honestly, I’m that close to doing it. Instead, I’m focusing writing every day, but not publishing every day. It works too but makes it a bit less challenging.

My issue is that you cannot write the article you just read every day. So I have to balance shorter and longer forms of content.

[3] Here’s one thing to keep in mind when reading/listening/watching all these pieces of content: Business is an art.

VCs cannot share more than thoughtful insights. None of them holds the keys to success, even though they can help you to open some doors. This means that all this content is only based on their own opinions.

And sometimes they clash.

For example in a piece called the Illusion of Product/Market Fit for SaaS Companies, Brad Feld highlighted a disagreement between Ben Horowitz and Fred Wilson.

I love the clash because it reminds us that business is indeed an art.

You should go through the content to get some inspiration, not a clear direction.

 

16 Business Writing Lessons (to Help You Tell Stories and Convince People)

For more than 9 years, I’ve been writing to educate, convince, inspire, negotiate, and sell.

Here are 16 practical things you can apply to improve your writing…

16 Useful Things that Will Help to Sell and Convince through Writing

1. Know who you’re writing to.

Who is going to read? What are they interested in? Keep one reader in mind. You shouldn’t address a group but just one reader.

2. Value your readers’ time more than yours.

Each piece should be the one that your reader shouldn’t miss regarding a specific topic. If not, there’s no reason to hit “publish” or “send”.

3. Your headline is a promise you make to your readers.

Everyone competes for your readers’ attention. So make it intriguing and specific. And keep your promise all along your piece.

4. Always start with a good hook.

Your readers are skeptical. To make them read the whole piece, start with something that catches their attention and interest.

5. Not everyone has time to read every single word.

This is OK. Allow them to understand the piece, even when they skim it.

For sure, you’re not reading every word I wrote—even though they’re worth reading. Don’t worry. I know you wouldn’t. This is why this article is a list.

6. Make it easy to read.

Alternate longer and shorter paragraphs. Have as many subsections as necessary. And don’t forget: most readers are on mobile now.

7. Less is more.

Short sentences win. Each word must have a purpose. If it’s possible to cut out a word, do it.

8. Write like you talk.

You spend your life communicating with your voice. Why would you change it when you communicate with text?

Once your draft is done, read it out loud. Don’t keep a sentence unless it’s the way you’d say it if one of your readers was standing in front of you.

9. Make it all about your readers.

Why should they care about your piece? What’s in it for them? Write something that matters to them. And be practical. Everyone loves real-life examples.

10. Don’t reinvent the wheel.

There are tons of great ideas out there. If it’s relevant, quote a thought-leader, link to his work, and thank him once the article is published.

11. Make it worthwhile.

Either write something worth reading or do something worth writing.” – Benjamin Franklin

12. Illustrations are important.

Your readers think visually. Add screenshots, graphics, and pictures that are relevant and make your writing easier to digest.

Data visualisation is underrated. But you can use data to tell stories. It’s convincing because you help people visualise abstract concepts.

13. Teach them something (new).

Write to answer questions people ask. Solve a problem.

Your readers receive too much information. But they are starved of knowledge—ideas on how to solve problems and methods for doing more effective and efficient work.

14. The ending matters.

It’s what your readers will remember. This is also where you can make them take an action like buying, signing up, sharing, or reading another piece.

15. Tell them stories.

Your readers love examples because these are mini-stories they will remember and can share.

Communicating with stories also appeal to their emotional side. Make sure you know how you want to make them feel before you start writing. And then, share the relevant stories.

16. Write, sleep on it, and, only then, edit.

You can’t be the lawyer and the judge at the same time. You either create or review.

Make a clear distinction between the two phases of writing: (1) creating and (2) editing.

Additional Lessons to Become a Better Writer (and Convince Your Readers)

1. Adding what copywriters call “bucket brigade” can be very useful to keep the interest of your readers. Here’s how Brian Dean, a SEO expert, explains what’s a bucket brigade:

“[W]henever you have a section where someone may get bored and leave, add a Bucket Brigade.

You can make up your own Bucket Brigades, like I did in the example above (“The secret to publishing content that people want to share is this:”).

Or you can use these tried-and-true Bucket Brigade classics:

  • Here’s the deal:
  • Now:
  • What’s the bottom line?
  • You might be wondering:
  • This is crazy:
  • It gets better/worse:
  • But here’s the kicker:
  • Want to know the best part?

And — bada bing, bada boom — you’re set.”

A) Write whatever you want. Then take out the first paragraph and last paragraph.

C) Bleed in the first line – We’re all human. A computer can win Jeopardy but still not write a novel. If you want people to relate to you, then you have to be human.

G) Read before you write – Before I write every day I spend 30-60 minutes reading high quality short stories poetry, or essays.

M) Be opinionated – Most people I know have strong opinions about at least one or two things… write about those. Nobody cares about all the things you don’t have strong opinions on.

FinTech Revolution: How Startups Are Transforming Finance (Updated)

Since 2008, an increasing number of technology ventures have been revolutionising the financial industry.

This is what I called in 2013 the “FinTech Revolution”.

In this article, I focus on the reasons for this revolution from a strategy and innovation perspective.

I also listed some of the best FinTech ideas. These are great examples of disruptive ideas that have now become significant providers of financial services.

A Change of Paradigm

The internet has allowed an innovative jump to occur in many industries. Customers have now an easy, very affordable access to books (e.g. Amazon), furniture (Made.com), TV (Netflix), education (Coursera.org), media (YouTube)…

It is now the turn for the financial industry to be disrupted, all over the world. (If you’re interested in disruptive innovation, read this case study about disruption in the robot industry.)

The Worldwide FinTech Revolution

Until the end 90s, being a consumer was expensive, time consuming, and sometimes impossible. The price of education was prohibitive. You did not have easy access to many books. Watching movies and series was a costly hobby.

But the internet has changed the paradigm of how we consume things: Buying rare or foreign books is easy; you can get access to the content published by top universities for free; and watching series 24/7 only cost you $9/month.

Bonus: Download the PDF to share this white paper (or just because you want to read it later).

Things have changed for financial services too.

The financial industry is in the middle of the same revolution. The volume of business that tech ventures have taken away from traditional banks has significantly increased. And the trend will continue.

What’s more, customers of fintech companies do hesitate to tell their friends. They all praise the better user experience. And as you know, word of mouth is the best marketing-communication tool.

What Does “FinTech” Mean?

FinTech stands for Financial Technology. Fintech companies are businesses that leverage new technology to create new and better financial services both in B2C and B2B.

‘Fintech’ is an umbrella term. It refers to companies of all kind. These include companies that operate in insurance, payment, asset management…

But fintech companies have one thing in common:

A niche strategy. These tech ventures are taking over small pieces of the financial industry, one step at a time. Eating slowly what your bank, your financial advisor, and your mutual fund do.

From loans to transfer of money to investment, the FinTech Revolution is eating finance.

Secret Ingredients of FinTech Revolution

The Rise of the FinTech Revolution

People working in financial services thought that complex laws and heavy regulations could prevent the internet from eating their businesses. Right after the Dot-com Bubble bust, there were only a few of startups growing in the finance industry.

Banks weren’t worried. So they took their time to embrace the change of paradigm that the internet had brought.

Traditional institutions did not anticipate that the mix of good timing, fintech ideas, and new technology, as well as more demanding customers, agile strategies, and talent will lead to the current FinTech Revolution.

And the same process of disruption is happening in the asset management sector.

1. Good Timing for Fintech

The crisis of 2008 defined a new era for finance. It emphasized the inefficiency of the banking system. The tech industry did not need more to understand that the financial world was broken. This means enormous opportunities for the startups that could improve the elements of the whole system.

Tech founders began to imagine how to disrupt the financial services traditional banks provide. They also took advantage from a positive ecosystem that made it easier to start a company.

2. Opportunities and Ideas in Fintech

Disruptive innovations were easy to find.

Customers have had many reasons to lose trust in their banks: high cost, slowness, lack of transparency, lack of good UX, no great mobile apps, bad customer service, and, above all, a major crisis.

3. New Kinds of Customers for Fintech Businesses

A demographic shift emphasises new expectations from financial services. The new customers don’t want to comply with the existing rules. They want to manage their money on their own term.

In B2C, digital natives prefer to manage their money directly. They don’t want to go to a branch for that. This digitisation of financial services also impacts the marketing strategy of financial services. It makes it more accessible, quicker and and easier to compare offers.

FinTech Customers: The Digital Natives

In B2B, financial services have to catch up too. Since B2C customers have higher expectations, there’s no reason why they won’t have the same expectations at work. Besides, many businesses now want the tools to serve their own customers better and faster.

4. Agility of Fintech

Startups have benefited from a supportive business ecosystem. It has never been cheaper to start a company. The biggest investment for these tech companies isn’t technology anymore. It’s talent.

Agility is key. Fintech startups are attacking an ageing industry with more agile companies. They do not have the same cost structure than financial institutions. And they don’t have to fight against technical debt, bureaucracy, and inertia.

5. Talented Designers and Software Engineers Want to Work in Fintech

Tech companies have been highly popular among talented young people—designers, software engineers, and product managers.

They offer better a place to work. Fintech entrepreneurs open appealing alternatives to the boring corporate world: “Would you prefer to work in a highly hierarchical company or for a growing, exciting fintech?”.

Facing competition, traditional financial institutions have to react. They have to cope with two problems: they noticed the FinTech Revolution too late and they are “too big to change”.

Banks are Too Big To Change

Slow Reaction of  Traditional Financial Institutions: Too Big to Change

Until a few years ago, fintech ventures weren’t considered as real competition.

Banks ignored the phenomenon. Fintech companies weren’t under their radars. They were too small.

When they started to be noticed, they were categorized as parasites. So banks dismissed the idea that a newly formed company without a lot of capital could change the way traditional banking is being done.

Only recently, they’re starting to be nervous. Some fintech ideas, which seemed absurd at first, are now changing the way finance works.

So banks started taking into account these fintech companies. Some relationships were friendly and some were hostile:

A Competitive Mindset: Fighting Against Fintech

Some banks and financial services provider have decided to compete against fintech companies.

“We have the talent, the capital, the expertise, and the distribution channels. Why can’t we do it ourselves?”

And so they’ve worked on modifying their existing business or setting up new subsidiaries.

The main obstacle is that banks are big ships. They have a complex structure. And it makes it challenging to develop a new product or business model.

Why Not Us? How Charles Schwab Became a Fintech Startup

Charles Schwab is the one of the leading providers of U.S. investment services.

The company started in the 70s as a scrappy new venture provided discount brokerage. It changed the way investing works. And today, Charles Schwab has more than $2,600 billion under management.

The FinTech Revolution triggered the emergence of companies such as Wealthfront, Betterment, and FutureAdvisor. All of them offer “robo-adviser” services that compete directly with Charles Schwab’s bread and butter.

The people at Charles Schwab took their time to analyse what was happening. They neither dismissed the trend, nor jumped too quickly. They waited for these fintech ideas to hit product-market fit.

Once the market validated the business model, Charles Schwab simply started Schwab Intelligent Portfolio. Today, the product generates more revenue than the existing fintech startups combined.

A Passive-Aggressive Reaction: Collaborating with Fintech

Some banks have decided they cannot do this themselves.

There are several ways of coping with the revolution without taking too much risk:

  • They invest in fintech startups;
  • They acquire growing fintech ventures;
  • They start accelerators;
  • They create partnerships and open their customer database.

In many cases, it’s IBM opening the door to Microsoft to be eaten alive. But sometimes it works out—like BBVA acquiring the online bank Simple.

FinTech changes Banks

Fintech Companies Focus More on Customers

Having interviewed many founders of fintech companies, I realised one thing:

They all relate to their customers. They embrace the power of empathy. They are aware of the common problems customers have. Being customers themselves or former employees of large banks, they have a good idea of how to make things better.

And honestly, in the finance industry, which has a focus on products, systems, and regulations, creating better customer experience is a huge competitive advantage.

Many of them had been involved for years in a broken system. This experience helped them to find promising fintech ideas.

Different Revolutions Inside the Fintech Revolution

Taking into account what doesn’t work, fintech ventures started revolutionising every bit of what banks offer: loans, mortgages, credit cards, debit cards and current accounts, international money transfer, investment advisory…

These startups embrace a movement initially created by companies such as Intuit, PayPal or Mint.com. Their success is based on their ability to innovate and develop simpler and more appealing offers to customers.

Let’s see what and how they are succeeding:

1. Personal finance management
2. Payment system
3. Loans and credit
4. Investment
5. Venture capital
6. B-to-B and financial information

1. Example of FinTech in Personal Finance and Current Account

Budgeting is tricky and fastidious. The revolution started years ago with Mint.com and Intuit. The mobile revolution offers new opportunities to startups. Their goal is to help individuals take control of their personal finance. They provide expert advice and assistance to manage their money.

Problems: lack of mobility, bad user experience, and complex system

logo-personalcapital

FinTech in USA

  • LearnVest: financial planing services for individuals
  • Simple: online banking with automatic budgeting and savings (acquired by BBVA)
  • Personal Capital: an online financial advisor and personal wealth management solution

FinTech in the UK

  • Monzo: an online native bank account

2. Examples of FinTech in Payment System

PayPal started this revolution early, even before the Dot-com bubble. It was the first company to make payment solutions sexy. Today, fintech companies are pushing the payment industry to the next level.

Tech ventures have cut down the costs of moving money abroad and they allow more transparency.

As middlemen, banks charge fees when you pay and receive payments, especially for international payments. For example, when you want to transfer money, it is impossible to get the mid-market rate. For sure, you’re going to pay expensive transaction fees.

It’s actually no longer the case. Many startups have worked on solving this problem by going full-stack rather relying on middlemen.

Problems: lack of transparency, complex system, expensive, and slowness

logo-braintree

FinTech in USA

  • Venmo: a free digital wallet that lets customers make and share payments with friends
  • Tilt: an easy way for customers to collect money from a group
  • Currencycloud: a cloud-based platform that customers rely on to automate the way they send and receive money internationally
  • Dwolla: an online payment system and mobile payments network for businesses
  • Affirm: a way for consumers to pay off their purchases in easy, fixed monthly payments
  • Square: secure credit card processing and point of sale solutions for merchants
  • Stripe: a way for both individuals and businesses to accept payments over the Internet
  • Braintree: mobile and web payment systems for ecommerce businesses (acquired by PayPal)
  • Coinbase: a bitcoin wallet and platform where merchants and consumers can transact in bitcoins

FinTech in UK

  • GoCardless: an easy way for companies to collect recurring payments
  • TransferWise: individuals transfer money abroad easily and at lower cost
  • Divido: customers pay over time through installment loans with 0% interest

FinTech in France

  • Leetchi: a way to collect money for group gifts, projects and nonprofits

3. Examples of FinTech in Loans and Credit

Fintech startups took advantage of the limited access to capital from banks—a trend that begun in 2008 because of the economic crisis.

They started to apply disintermediation to consumer credit and business credit. Most of them do a simple job. They connect buyers and sellers through peer-to-peer lending marketplaces.

Governments quickly started supporting these fintech ideas. This was a great way to cope with the lack of capital allocation from banks.

One of the best competitive advantages of these new peer-to-peer “lenders” is that they do not bear the same balance-sheet risk than traditional lenders do.

Problems: lack of access, complex system, lack of transparency, and slow

logos

FinTech in USA

  • LendingClub: a peer-to-peer lending/credit marketplace
  • Propser: a person-to-person lending platform
  • CommonBond: a marketplace that allows individuals to refinance their student loans

FinTech in UK

  • Zopa: a peer-to-peer lending platform
  • Funding Circle: peer-to-peer marketplace for businesses
  • Lendivest: a mortgage marketplace that matches individuals looking for quick, short-term mortgage funding with investors
  • MarketInvoice: online marketplace where big institutional investors advance capital to small businesses by acquiring their long-date invoices.

FinTech in France

  • Prêt d’Union: peer-to-peer marketplace for individuals
  • Unilend: peer-to-peer marketplace for businesses.

4. Examples of FinTech in Investment

Asset management has experienced a radical change. Individuals are reluctant to use traditional channels to invest their money. The crisis of 2008 made them lost trust in the financial system, especially the younger.

Read more about how fintech is changing asset management in this detailed article.

People start to rely less and less on traditional institutions. They lost their “monopoly”. Individuals now want user-friendly platforms. They want to be more involved in the investment process and to understand what is going on.

Problems: loss of trust, complex system, lack of transparency, lack of involvement, bad user experience

 

logo-betterment

FinTech in USA

  • WealthFront: automated investment services specialized in ETFs
  • SigFig: personal finance virtual manager and investment advisor
  • Betterment: online financial advisor
  • Motif Investing: online broker turning ideas and global trends into investment opportunities
  • Covestor: online investment management marketplace.
  • Robinhood: a solution that allows individuals to trade stocks easily

FinTech in UK

  • Nutmeg: investment management portfolio
  • eToro: social trading
  • Cayman Atlantic: investment management company using technology to analyse real-time data enabling us to discover trends, global events and market sentiment.

FinTech in Italy

  • MoneyFarm: online financial advice service

5. Example of FinTech in Venture Capital

There are two kinds of FinTech startups that compete with the venture capital industry: crowdfunding platforms and crowdfunding equity marketplaces. Both try to put aside the power of venture capital and allow individuals to invest in people and their stories.

Along these lines, there are also companies that modernise the way venture capitalists and business angels invest. AngelList is a good example that relies a particular business model—a market-network.

Fun fact: most of traditional crowdfunding platforms started as an alternative to equity investing. At the time it was very difficult to secure investments from individuals who weren’t professional investors.

Problems: concentration of power, lack of transparency, and lack of access

Print

FinTech in USA

  • Indiegogo: crowfunding platform
  • Kickstarter: crowfunding platform

FinTech in UK

  • Crowdcube: crowfunding in equity
  • Seedrs: crowfunding in equity

FinTech in France

  • Ulule: crowdfunding platform
  • Smart Angels: crowfunding in equity
  • Wiseed: crowdfunding in equity
  • HappyCapital: crowdfunding in equity

FinTech in Estonia

  • Funderbeam: crowdfunding in equity
  • Startup Includer: tool that facilitates angel investing

6. Example of FinTech in B2B Financial Services

B2B financial services have always been related to technology—often referred as “IT”. Today’s buzzword is “digital”. But, in general, they all mean the same: process innovation.

Bloomberg and Reuters are striking examples of success. They allowed information to flow into the banking world. And everybody knows that “knowledge is power”. So it worked.

New trends are shaping B2B offerings, the very hyped “big data” and “machine learning”. These have the potential to change how financial institutions manage assets, risks, and information.

Problems: bad user experience, lack of optimization and performance, security and privacy, compliance, and rise of new digital risks

 

logo-opengamma

  • OpenGamma: market risk management open source software
  • Heckyl: financial data search engine
  • Kensho: financial data search engine
  • Kusiri: financial information provider
  • Fingenius: supplier of artificial intelligence solutions
  • CrowdFundMagic: crowdfunding platform provider
  • BIPB: big data & analytics consultancy
  • Digital Shadows: cyber threat intelligence company
  • ETFGI: independent research firm in exchange traded fund
  • SideTrade: cash-flow management
  • DueDil: business information and intelligence provider.

A Map of the FinTech Startups

Business Insider showed the same FinTech startups in a visual way.

It’s worth having a look at the map:

Map of the FinTech startup ecosystem

Bonus: Download a free PDF version to share the white paper with your colleagues (or your boss).

How to Take Advantage of the FinTech Revolution

This is the beginning of a massive change in the way, consumers and businesses deal with money.

  1. Banks have to find ways to be more customer-oriented. The smarter banks will use this major shift as an excuse to improve the experience of their customers. They can rely on acquisition to accelerate the transition. But they shouldn’t limit themselves to external innovation. Real innovation comes from within.
  2. Fintech startups are in a race. They need to go faster than the banks. It’s easy on paper. That said, it is difficult to change habits that consumers have developed over time. A better value proposition is often not enough. Their challenges: trust and go-to-market strategy.
  3. Business angels and venture capital investors shouldn’t fall into the hype trap. Indeed, the finance world is changing. But this industry has always had parasites trying to make money in one of the most profitable industry.
  4. Consumers should balance the costs and benefits of switching to new products. In many cases, it is still unclear whether many of the fintech startups will survive. Be smart and worry.

Do you have experience in any FinTech? Share your experience. Give us feedback. If you want to complete the list of fintech startups.

Contact me here.

FinTech Revolution

 

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Boost Your Team Performance with These Two Retrospective Techniques

As a team leader, you must agree:

Constantly making sure that your team remains engaged and motivated is a real challenge, especially since we’re all so busy.

Here’s a simple solution to know how they feel:

Organise a Team Retrospective with your team.

How to Run Your Next Team Retrospective: The Clearing Session

At the end of every week, meet with your team and ask these two questions:

  1. What is not working for you?
  2. What is working for you?

One person at a time answers the first question. And when everyone is done—you included—the team starts answering the second question.

There’s no interruption. While someone answers a question, everyone else listens to her or him—like in a brainstorming session.

It’s your role as leader to make sure that everyone pays attention to what is being said. And that the person talking can freely explain what is not working and then what is working for her or him.

The Agile Retrospective: Start – Stop – Continue

Another technique is the “Start – Stop – Continue”.

It’s simple.

Each member of the team writes down on Post-it notes:

  • Things that the team needs to stop doing. These are things that make the team less effective.
  • Things that the team should start doing. These are things that could help the team perform better.
  • Things that the team should keep doing. These are things that the team shouldn’t stop doing because it works well.

Once everyone is done with capturing their thoughts, we share back.

There are two ways of doing it:

  • One by one the team members share back their Start – Stop – Keep.
  • The team shares everything about Start, then discuss. Everything about Stop, etc.

The objective is to capture clear actions for the next sprint, making sure that nothing is being ignored.

The Benefits of a Team Retrospective

Although I was a bit skeptical when we started doing it at Contriber, I quickly realised the potential of running retrospective sessions with your team.

In a very short session (20–30 minutes):

  1. You understand how your team feels.
  2. You uncover stories that you couldn’t have heard in another way.
  3. You get clarity on what can be improved and what is already going well.
  4. It’s a great way to build a strong culture. Everyone becomes aware of how the rest of the team—the leader included—feels.

So give it a try.

Schedule next week’s clearing session now.

Sharing what’s not working and what’s working will definitely have a positive impact on your team.

 

Are You Sure You Advertise on the Right Media Platforms?

You and your team must spend a lot of money and effort trying to get the attention of your customers to tell them about your business.

You want them to pay attention to your story.

No attention = No impact

Since we live an over-communicated world, attention has become one of the most precious resources. Getting people to pay attention to what we want to say requires to be in the right place at the right time with the right story.

What They Find the Most Challenging about Marketing and Advertising

Everything is changing so fast. Your customers’ attention is constantly switching from one platform to another.

Digital advertising started taking off in the ‘90s. Since then, we went from Email Marketing to SEO to Social Media Advertising to Mobile Advertising… Marketing experts are even now praising the potential of Virtual Reality, Augmented Reality, and the Internet of Things.

When things get wild, it’s always wise to get back to the fundamentals.

Your advertising media selection process should rely on one major element: where your customers pay attention.

Where Can You Reach Your Customers?

Here’s what bugs me:

I’ve coached and helped many entrepreneurs and marketers. They always come to me with the same question:

“Guerric, how can I be sure that I’m focusing on the right channels when everything is moving so quickly?”

Who wants to spend money on the wrong channels, sending messages in places where nobody pays attention to them?

This is nonsense. Yet, I’ve seen many marketers advertising on some channels without making sure that these were the best to get their customers’ attention.

Do You Really Need to Have a Facebook Page or to Be on Twitter?

It’s not because it’s easy to set up that it’s worth doing it.

If you want to make a difference with social media marketing, you need to spend more resources than you expect. Nothing goes viral without thoughtful hard work.

Apple knows that. It only started being present on Twitter in March 2016. Before that, the marketing team must have decided that being on Twitter wasn’t a good place to share their story. They were better off focusing on other channels.

Advertising campaigns that really perform require more hard work than creating a simple ad.

Where Should You Advertise?

Let me emphasise four questions that will help you figure out where you should advertise to acquire new customers:

  1. Who is your target audience?
  2. How are you exploring your next marketing moves?
  3. Do your customers really embrace new trends?
  4. How do you take advantage of the abundance of channels?

Since I feel I really want to help you, let’s dig into each one of them:

1. It Depends…: “Who Is Your Target Audience?”

In a new marketing podcast called Flip the Switch, the host, Hana Abaza, highlighted that people always ask her the same question: “Should I advertise on Facebook?”

This is a bad question.

Your story will have an impact only if the people you reach pay attention and care about what you’re telling them.

The right question to ask is:

“In which channel can we reach our target audience at a moment when they will pay attention and care about our story?” [1]

Here’s What You Should Know About Your Customers

What makes a channel right for your business depends on:

  • Where the people you target are in your funnel;
  • Where they go when they have time to pay attention to external information (online or offline);
  • When they are available to listen to your story or take an action.

Context matters a lot.

Having it right is what makes a difference between a bad and a good advertising campaign.

For instance, I’ve had great results in advertising with GoudronBlanc by targeting people when they commute in the evening. The reason? They’re keener on procrastinating. After work, they go back home. During the jouney, they’re bored and spend their time on Facebook. [2]

Key takeaway: Context matters a lot. Where you should advertise intrinsically depends on who your customers are. Don’t do it just because you’ve seen other brands doing it.

2. There’s a Lot of Talking But Not Much Doing

It’s easy to read a case study about a successful advertising campaign and think about the future of marketing. Yet, what really makes a difference is the difficult task of translating this know-how into an actionable strategy, making it real for your business.

“Plans are only good intentions unless they immediately degenerate into hard work.”

— Peter Drucker

I encourage you to read and listen to experts’ opinions about success stories and the future of digital marketing; you’ll get a good feel of where things are moving.

But what really matters is what your customers do.

Your business is unique. It’s not because it has been working for them, that it will work for you.

The only way to figure out whether an idea would work for your business is to test it yourself.

Scale and Explore at the Same Time

You should allocate the major part of your budget to keep up with your current marketing strategy.

At the same time, run exploratory campaigns. Figure out where your customers’ attention is shifting. There’s a massive competitive advantage at being among the first ones on a new platform. [3]

I like what Marcel Bleustein-Blanchet, the founder of the advertising agency Publicis, wrote in 1982 about embracing an emerging media platform. In a book called The Rage to Persuade, he explained how he experienced first-mover advantage by being one of the first advertisers on the radio:

“It was different when radio advertising was new: unknown little firms could turn into giants overnight. That’s true of all new media: for relatively little money, they can have a great impact and upset the status quo.” [4]

How to balance this in your budget?

I recommend dedicating roughly 80–90% to scaling your current marketing strategy and 10–20% to exploring your next marketing moves.

Key takeaway: A focus group or a marketing guru won’t be able to tell you what is going to work. The only way to plan your future marketing moves is to test things yourself. Run low-cost experiments to test how your customers engage on a new media platform or what is the impact of a new marketing tactic. You can only figure this out by testing.

3. Consumer Behavior Does Change Fast But Not That Fast

Since the invention of the radio, experts have proclaimed the end of print advertising. Radio and, later on, TV were supposed to take over. By now, everyone should have stopped reading.

Here’s what really happened:

People kept reading…

David Ogilvy made a name for himself as a master of print advertising. At a time when radio and TV ads were supposed to make people stop reading, Ogilvy successfully contributed to building brands like Dove, Rolls-Royce, Shell with print ads and great copies. [5]

The Same Thing is Happening Today

The Internet was supposed to kill print advertising. Mobile is eating the world.
(Read this article to see how mobile has changed your customers’ expectations.)

The reality is a bit different:

Most consumers are slow to adopt new trends. Many people are still reading print magazines and using desktops as their primary device.

You should take new trends into account but you shouldn’t neglect the customers who are slower to embrace them.

The Power of Neglected Channels

There’s an advantage to using a channel that has become less competitive because it’s not trendy anymore. You can get people’s attention at a much lower cost.

For example, sending letters could generate a much higher return on marketing investment than doing email marketing. Your emails would just get lost among hundreds of other emails.

Know Your Target Audience

You should interpret new marketing trends depending on who your target audience is.

As consumers, we don’t adopt new media platforms at the same pace. Teenagers are likely to jump on the trendiest one—like Snapchat. Older generations will stick to what they already know, until all their friends start using something new.

Key takeaway: Don’t neglect ‘old’ media platforms. While every brand switches to what is in fashion, keep reaching your customers where they are still paying attention.

4. Most channels are complementary: Focus on Cross-channel Marketing

Each media platform has its own rules. You don’t run a Facebook ad campaign in the same way you advertise on Instagram.

You need to be a native speaker of the language used by your target audience in each of these channels.

Here’s the Secret of Great Marketers

The brands that succeed are those that understand how to give a consistent picture of their story on different channels.

They’re native speakers and they take advantage of what each channel has to offer. For example, Instagram is good at engaging your audience, while Google is great at helping you find prospects with strong purchase intent. Successful brands know their funnel and advertise accordingly.

Look at how you consume information. You never stick to one channel. You switch from email to social media, from desktop to mobile, from digital to print.

There’s a real need to understand where your audience is and what they expect from you on a given platform.

“Print media served to elaborate theses radio slogans by presenting real selling arguments. Print ads and commercials are not rivals—that’s baloney. Rather, they complement each other.”

— Marcel Bleustein-Blanchet, founder of Publicis and author of The Rage to Persuade

Media platforms are complementary. Tailor what you say to each different channel.

Key takeaway: Make sure you adapt your story to what your target customers expect on each different channel. But don’t forget that for your customers it’s natural to switch from one media to another. Find a way to make your story consistent across media platforms.

Treat Each Channel as a Salesman

“Treat it as a salesman: Force it to justify itself. Compare it with other salesmen. Figure its cost and result. Accept no excuses which good salesmen do not make. Then you will not go far wrong.”

— Claude Hopkins, author of Scientific Advertising

At the end of the day, your goal is to make a sale. You’re not spending money on social media advertising or any other digital channel to entertain people. You’re a business person.

Make sure that you selected the channels will benefit the most to your business.

Embrace a Long-Term Approach to Marketing and Digital Strategy

At BoostCompanies, we decide to play above the trend. We adopt a long-term view on marketing and advertising.

The brands that win are those that proactively embrace new trends. They don’t react. They choose what is relevant to them and ignore what is not. They succeed because they’re in it to play the long-term game.

What to do next?

Reach out to us.

We have more than 9 years of experience in digital marketing. We can help you acquire and retain online customers.

Notes about Selecting The Right Advertising Media Platforms

[1] Here are two good reasons why asking the right questions matter so much.

[2] Noticing how your customers behave is key to creating advertising campaigns that perform well.

I figured the best time to advertise on Facebook by observing my fellow classmates at university. If you sit in the last row, you’ll see that instead of taking notes students spend time on social media and eCommerce websites.

[3] Companies that were fast enough to move to Facebook benefited from a massive early mover advantage. For a few years, they didn’t have to pay to get their stories in front of their target audience.

It was pure online guerrilla marketing. Today’s Facebook marketing requires a real advertising budget, especially since you now need to pay if you want to get your stories into your audience’s News Feed.

[4] What Bleustein-Blanchet wrote about doing advertising on a new media platform is timeless.

Forget that he was referring to radio advertising and see how relevant what he said is to social media advertising:

“That leap of faith into the present and the future is the secret of success and progress. If you wait for things to change before you act, they change without you. At a certain point, you must let go of your rationality and jump—and jump correctly, of course. I did, whether by luck or instinct.”

Interested in the advertising industry? Get Ogilvy on Advertising and Scientific Advertising.

[5] Ogilvy illustrates a typical management paradox. A lot of specialists—creative, engineers, developers, doctors—struggle because being promoted is often synonym of becoming a manager. The thing is that when you become a manager, you’re not doing what you enjoyed doing. No. Instead, you’re managing people. This is something totally different.

Ogilvy explored the issue in Ogilvy on Advertising and Confessions of an Advertising Man.

Brainstorming Is An Idea Killer (And 3 Creativity Techniques to Guide Innovation in Your Team)

alternatives-brainstorming

 

Creativity is key in established businesses as well as startups.

The former needs to find new areas of growth while leveraging and fighting against its structural inertia, whilst the latter must deal with initial fragility.

Problem: many idea killers prevent innovation from happening.

In many cases, brainstorming is one of these idea killers.

Let’s see why.

Creating and implementing new ideas are essential, core competencies in today’s business world. As Rita Gunther McGrath explains in her book The End of Competitive Advantage:

The fundamental problem is that deeply ingrained structures and systems designed to extract maximum value from a competitive advantage become a liability when the environment requires instead the capacity to surf through waves of short-lived opportunities. To compete in these more volatile and uncertain environments, you need to do things differently.

As a result, companies need to develop capabilities to adapt and lead new waves of opportunities. Using the right creativity technique to generate new ideas is an essential that will lead your teams to be more responsive to the changing environment.

Contrary to popular belief, innovators are not keen on brainstorming.

Although it is often perceived as a central element for generating new ideas, innovators consider brainstorming a flawed method—not done properly, it kills creativity.

So teams that deal with innovation on a daily basis have developed effective alternatives to brainstorming.

So, how can you avoid brainstorming from being an idea killer?

First, let me explore the reasons why brainstorming is a broken tool, then I will propose brainstorming alternatives to help your team generate fresh ideas.

 

Brainstorming is an Idea Killer

Avoid the Brainstorming ‘Idea Killer’ Effect

Brainstorming was popularised in the 1950s by the ad man Alex Osborn. The creativity technique is based on the assumption that ‘group-thinking’ meetings (on average 10-12 participants) improves creativity.

Osborn came up with two main brainstorming principles: deferring judgment and aiming for quantity.

He believed that the best way to inspire a great idea was: (1) to come up with as many ideas as possible in a brainstorming session and (2) to select the best ones in a second phase.

However, brainstorming hides two major problems:

Problem #1: No-one really knows the rules of brainstorming. The session becomes a waste of time, rather than a way to stimulate creativity and generate ideas.

Problem #2: Brainstorming does not prepare to the next steps: prototyping, testing, and implementing.

Here’s a complete list of 23 creativity killers that will drawn your brainstorming sessions.

 

Nobody knows how to brainstorm properly

Brainstorming cannot work if participants do not know how to contribute. Yet, learning how to brainstorm is too often overlooked because it looks too simple, i.e. gathering people in a room and writing down ideas on a whiteboard or on Post-it notes.

Why should we bother training people to come up with ideas? Because it becomes chaotic if you don’t.

IDEO, a design consulting firm, highlights in its Design Kit that participants should review the brainstorming rules before starting. The use of the word ‘review’ is not random. This means that everyone should have some prior knowledge of what it takes to brainstorm.

In the book Group Genius, Keith Sawyer, professor in creativity and innovation, highlights researches that prove that encouraging quantity over quality tends to produce bad ideas. According to Dr. Sawyer, employees at IDEO perform well during their brainstorming sessions because 5-10% of their time is devoted to it. They know the rules. They practice brainstorming almost every day.

Is it the case in your team?

 

When was the last time you had a productive brainstorming session?

The alternatives to brainstorming that I am going to share get rid off the experience requirement of brainstorming. As your team cannot afford practicing everyday, you need other ways to foster creativity.

It is rare to be part of a productive brainstorming session. By ‘productive’ I mean a session in which constructive ideas flow and the team ends up with workable ideas.

It is easy to spot a session in which some participants are unfamiliar with brainstorming. You find these typical characters here:

  1. The over-enthusiast – who keeps repeating “we need to think out of the box”,
  2. The passive – who contributes little,
  3. The stubborn – who disregards others ideas and criticises them and, finally,
  4. The pessimist – who thinks that every idea is impossible.

Generating ideas in a brainstorming session requires some practice. More structured alternatives make it easier to deal with a group that lacks experience.

 

There is no follow up after brainstorming

Brainstorming does not aim at making things real. You brainstormed. You now have plenty of crappy ideas. So what happens next? Nothing…

Let’s take a step back. Why do we need to come up with new ideas? These ideas are potential solutions to a problem we currently face, e.g. looking for growth opportunities, designing a commercially viable business model for a new technology…

At the end of the process our team needs an idea to execute. We want to make it real. How can we utilise the mix of ideas that usually comes out of a brainstorming session?

Simply put: We can’t.

None of these ideas are actionable. They are just words written on Post-it notes. We need to go beyond the Post-it phase – this does not happen often. Creating ideas is a crucial phase of solving a problem. But the whole process is important. And brainstorming is not integrated enough into this process.

I like Gary Hamel’s metaphor on this issue:

Imagine a car motor that lacks a transmission, timing belt, water pump, or starter. The engine may be otherwise well built, but without just one of these components, it will be essentially worthless. So it is with innovation. However much brainstorming your employees do, it will come to naught if they don’t have access to the seed money they need to prototype and test their ideas.

Essentially, brainstorming is inefficient by itself. It’s an idea killer.

Academic research led by Rickards and De Cock proved that when people work alone and then pool their ideas, they are more likely to generate more and better solutions. According to the authors, judgment cannot be fully deferred and participants limit their ideas, due to social pressure.

For these reasons, alternatives to brainstorming have popped up in innovative organisations.

 

3 Brainstorming Alternatives to Be More Creative

I’d like to introduce three creativity techniques, which come from some of the teams that lead innovation in today’s world.

My goal is not to force your organisation adopt any of these methods. I just want to open your eyes to considering a new way of generating new ideas.

You’ll see these alternatives to brainstorming have a few things in common. It’s not a coincidence if all these teams are super creative.

 

Note-and-Vote with Google’s Design Sprint

Jake Knapp, design partner at Google Ventures, encourage to stop brainstorming and start sprinting. He’s at the origin of Google’s Design Sprint. Here’s how

The big idea of the sprint is to take a small team, clear the schedule for a week, and rapidly progress from problem to tested solution. On Monday, you make a map of the problem. On Tuesday, each individual sketches solutions. On Wednesday, you decide which sketches are strongest. On Thursday, you build realistic a prototype. And on Friday, you test that prototype with five target customers. It’s like fast-forwarding into the future to see your finished product in the market.

Instead of brainstorming, Google Ventures focuses on a two-step process—the ‘Note-and-Vote‘. It helps avoid cognitive biases that emerge from brainstorming, like groupthink.

Here’s how to implement the Note-and-Vote process:

Step #1: Participants think individually rather than as a group. (This prevents having someone break the flow of ideas.)

Step #2: The team members vote for the best ideas, keeping in mind that at the end only one person will make the final call.

If you want to learn more about Google’s alternative to brainstorming, you should get yourself a copy of Sprint.

 

Encourage independent thinking and debating

At Fahrenheit 212, a New York-based innovation consulting firm, Mark Payne also dismisses Osborn’s brainstorming sessions ‘where ideas are celebrated’ and rooms are filled with ‘Post-it notes rather than real value’. In How to Kill a Unicorn, Payne explains their creative process:

The players on the team are sent off their separate ways to think independently about the problem on the table, and then regroup to fire ideas at one another and debate their merits. Ideas are treated not as precious pearls to be polished, but as sparks born of friction. They ignite heat, iterations, and tough questions that propel and shape them further. It’s not an inquisition. But it’s exploration by interrogation. Experience has taught us what the geologists learned long ago: it takes pressure to make diamonds.

 

Greenhousing ideas: an alternative to brainstorming

Stop brainstorming, greenhouse your ideas

The ?What If! team has also developed a method. They call it greenhousing’ ideas.

What I like is that the method can be used easily with people who are unfamiliar with the structure—customers or employees who are not used to creative environments. As a facilitator leads the session, you can be sure that everyone will have the opportunity to contribute.

Unlike brainstorming, greenhousing focuses on building upon ideas, one after another.

The goal is to end up with actionable ideas. It emphasises on what the ?WhatIf! team calls ‘productive creativity’. Aware that coming up with ideas is just a piece of the car motor (to use Hamel’s imagery) your goal is to build something that you can implement. Questions like ‘How can we make it real?’ are essential in order to keep a foot in reality.

Greenhousing is based on teamwork. Here you need a small team—typically 3 participants and 1 facilitator. You want to limit the flow of information and foster collaboration.

I would recommend leveraging diversity. Gathering three participants who represent different stakeholders or areas of expertise—e.g. design, engineering, and strategy—is a good way to develop ideas that take into account all the challenges.

The Facilitator’s Role in Guiding Creativity

The facilitator leads the session. Their role is to help the team to ‘land an idea’. There is a focus on making the idea real:

– He needs to make sure that everyone is on the same page, regarding the brief — the problem to solve.
– He stimulates creativity by asking questions and ensures the team works on one idea at a time.
– He is in charge of capturing the idea, i.e. writing down details and making it as visual as possible.

 

If your company has some favorite frameworks, you can ask the facilitator to use them to guide the session. I think, for example, about Osterwalder’s Business Model Canvas or Christensen’s Jobs-to-be-Done.

You’d rather come prepared. Greenhousing requires participants to have done some research beforehand. There is no point working without an understanding of the market, the stakeholders, and the technology.

The goal is to build on actionable ideas.

Let’s see how Matt Kingdon, founder of ?What If!, summarises the process in The Science of Serendipity:

A useful innovator’s tool is to ‘greenhouse’ ideas. This means to force the growth of an idea by looking for what’s great about it, the DNA if you like, and building on that.

 

How to Implement It

Innovative capabilities are essential. Companies need to keep working on the next opportunities. Implementing a method that makes the most of your team’s creativity is therefore crucial.

It helps your team to deal with problems more quickly.

My goal in introducing these three alternatives to brainstorming is to make it easier for your team to build actionable ideas.

You should not get stuck with a pile of Post-it notes. Instead, you will end up with enough detail to make it possible to execute the idea.

As Mark Payne wrote:

[An] idea is a powerful thing — but it’s just an idea. It’s a sketch before the painting. If it’s a big idea, it should have big insight behind it, big benefits in its realisation, and a compelling experience to deliver those benefits. But the truth is that an idea is rarely an answer. It’s usually a hunch wrapped in a bundle of unanswered strategic, operational, technical, and financial questions.

You now need to mix commercial analysis, design and experimentation to make your idea real, remarkable, and profitable. This will be the topic for another post.

Thanks to Kirsten Brown for reading drafts of this.

 

Recommended Readings:

 

 

Market-Network: A New, Exciting Business Model

Social network. Marketplace. SaaS. These buzzwords are no longer synonyms of massive business opportunities.

The gold rush has already happened.

But a new business model has emerged.

Market-networks are hybrid animals: part social network, part marketplace, part SaaS. [1]

  • It’s a social network. Professionals use profile pages to showcase their work and demonstrate their credibility. They also connect with each other and build relationships.
  • It’s a marketplace. Professionals come online together to find other parties with whom they can do business.
  • It’s a SaaS tool. Professionals use the tools on the top of the marketplace to negotiate, do the job, or manage the paperwork.

Social networks are designed to connect people. Marketplaces are built to sell simple products and services at scale. SaaS tools are here to make your job easier.

Market-networks focus on more complex services; the types of services that require more human collaboration or benefit from being part of a network.

As Chris Dixon puts it:

“[The users] come for the tool [and] stay for the network.”

For example, Instagram’s initial hook was the cool photo filters. But the users also loved being part of the social network.

(To get more understanding of this, have a look these examples of the job-to-be-done theory).

So what’s next?

Think about the number of opportunities in M&A, scientific research, construction, management consulting, marketing, media production…

Notes about the Emerging Business Model of Market-Network

[1] Here are a couple of examples:

  1. AngelList is a market-network. It’s a social network for startups and investors. It’s a marketplace where business angels can find startups to invest in and startups can post job openings. It’s a SaaS tool that helps business angels create syndicates and startups get introduced to business angels.
  2. Contently is a market-network. It’s a social network for freelance writers. It’s a marketplace where companies can find writers to create content—articles, eBooks, and other kinds of marketing collateral. It’s a SaaS tool that helps content marketers organize their editorial calendar, manage the writers’ work, and track the performance with analytics.

[2] Thanks to James Currier for sharing his thoughts on this emerging business model.