EGF: External Growth Factor

Working for some months with a client whose genius is Mergers & Acquisitions (or is that Murders and Apparations?) I have been thrown headfirst into a world hitherto unknown to me. Lots of learning, very fast — some of it achingly technical, some of it inspiringly strategic.

What is the takeaway, from a marketing perspective?

Any business, no matter how large or small, can hit a ceiling in what my client & his friends would call "organic". This doesn't refer to an absence of pesticides. Organic growth is simply increasing revenues selling only your products to your markets. What comes after organic growth is "external growth" and here we enter the world of M&A.

The interesting thing about external growth is (1) how many possibilities there are and (2) how adaptable they are to the entrepreneurial enterprise. If you read "M&A" and think this story is only for the megacorporations, think again.

Let's list a few external growth strategies:

Acquisition: buy a company that has a technology you don't own, or a market share you covet.

• Minorty interest: purchase a share in a company for the same reasons (and spare yourself all the nightmares of integration, plus a ton of cash)
• License: acquire the license to sell someone else's widget
• Franchise: get a franchise in a related market that can help you leverage your existing strengths
• Joint venture or marketing alliance: do a deal with a non-competing player to pool your product and/or marketing strengths while both remaining captains of your ships

None of these are world-shatteringly new ideas. What is new to me is ask the question in such a big-picture way: "How could this company grow quickly and profitably by jumping outside its own box?" As for finance, it's a bit like real estate. If the deal is good enough, you can find the money. There is a huge amount of capital running around just now, looking for something useful to do. That's why (back to the world of M&A) private equity groups have become such a huge influence in the market for big-time acquisitions.

And alliances, which for many companies are the best place to start external growth, don't have to cost more than a phone call, at least to start with.

If the right question is sometimes our most powerful asset, here's a question for today: "How could I double my business in a year, through external growth?"

The Mystique of the Book

I noticed today I currently have FIVE clients (one pro bono) in the throes of producing books. Something of my own writing karma in that, no doubt. (jonwardwrites.com)

What strikes me is the irrational power of the book as a source of authority and charisma. At the foot of an article (in Nexus magazine) I saw the journalist cited as "author of an e-book..." and realized how lame that sounds. Using print-on-demand, she could produce a hundred print copies, put it on Amazon and become "the one who wrote the book..."

Why the difference?

The physicality of the book is important. It exudes a magic our forebears must have felt when they first beheld an inscribed clay tablet. In a printed book, thought — our most powerful but ephemeral attribute — becomes solid. Something you can hold in your hands.

I have never got used to the miracle of flying in airplanes. And I've never quite gotten past the miracle of writing. No matter what your field of expertise, consider how writing a book would contribute to your market and invest you with a touch of mystique. (Yes, I'm working on mine.)

Yes, Things Really Are Speeding Up

Here's a tidbit from an extraordinary new book on learning that I am helping to launch — about which more later, when the wraps come off.

The very first tool our ancestors invented was for cutting, and it was created by chipping at one stone with another. Now the more chips, the more effective the instrument (sounds familiar?). Our progenitors started with an average of 15 chips on the tool's cutting edge, and eventually this advanced to the high-precision version made with an average of 111 chips. "Eventually" here is a bit of an understatement. This techological advance took all of 2.4 million years — or one new chip every 25,000 years. So if you're feeling a bit rushed by the latest combination iPod-videophone-toaster-defibrillator, you may have a reason...

There Be Dragons... (Or Why We Love Craig)

Why is Craig's List such a rip-roaring success? Because it's free, because it's easy, because everyone's doing it... Here's another clue, a warning to users from the site itself: "DEAL ONLY WITH LOCALS! Most non-local inquiries on craigslist are scams." Objectively that may be true. Subjectively, it's even more true.

Forget globalism, cyberspace and the world-wide-this-or-that. At heart, we are still tribal villagers. We trust what is nearest. The people in the next state have funny accents. As for foreigners, the less said, the better. There is a power in locality that many marketers miss, especially when web-merized.

Here's a thought experiment for today. Find six ways to localize your brand. Just sticking a town-name in front is a start, but not too imaginative. Your localization needs to be authentic. Get in there, identify the city character as the denizens see it, not the tourists. Look for ways to relate that character to your brand. Then ask yourself how far you could localize your operations, create an outpost office, or at least a local champion... This exercise is about spending imagination, not cash.

Start with your home town and then "franchise" the concept city by city.

Just suppose: instead of the dead hand of Starbucks falling onto every street corner on the planet, pictue a true devolution — same product, systems and quality of service, but a coffee shop with look & feel true to the neighborhood. And yes, perhaps a local twist on the name...

(Almost) Everything You Need To Know About Branding

My wife Andrea quotes something she heard singer Kenny Rogers say on American Idol. "You are three people: the person other people think you, the person you think you are, and the person you really are. The more closely aligned these are, the more successful you will be." Apply that thought to your brand — rigorously, in depth and in detail. Now you have 99% of your success recipe.

Crumbs of Marketing Wisdom

Welcome to my blog. Day 1.Here's a curiosity to start us off. I found in my fridge a new loaf of bread. It was called Men's Bread. Think about it. What can be manly about a loaf of bread? Someone obviously thought I needed it. Should I be worried? Here's the interesting point. Normally when people try to expand a business they either look for new products to sell the existing market or new markets to sell the existing products. There's another route suggested by Men's Bread. It's what I would call fractionalizing. You split the existing market into niches and split the existing product to match. It's the same stuff (basically) - bread. And the same market - grocery shoppers. If you're lucky, your zealous consumer will go home with two loaves, one for him and one for her. What's next? I can't wait to get to the fridge. I'll be on the lookout for Yogurt For Brits, or Arizona Poets' Marmalade.