This is an hilarious and actionable talk from Dan Lyons, aka Fake Steve Jobs, aka technology editor at Newsweek when he spoke at Business of Software. He left shortly afterwards to become Editor-in-Chief at ReadWrite but by the end of the year he was working for a company that most Business of Software attendees will have heard of – Hubspot. Dharmesh really should pay Business of Software some recruitment fees. :-)
Video & Transcript below
You should watch this talk if you want to be entertained and to get some really solid advice about how you can maximize the media coverage that your technology company gets. Ever wondered why you don’t get as much press coverage as your competitor? The answer might be in here.
We also recommend that you watch the section on ‘Meme’ businesses, a very powerful concept and an hilarious rant. Business of Software is about building long term, sustainable software businesses and a meme business is basically the opposite of that. You can get a pretty good idea of what Dan was talking about by watching this video put together, probably as a parody, by the latest batch of 500 Startups. (Contains very strong language).
This talk turned out to be about three things:
- Mobile and why mobile is very, very, important to anyone in the software industry.
- The difference between ‘real’ and ‘meme’ businesses. (From about 15 minutes).
- How to deal with journalists and the press as a technology company. (31 minutes, 30 seconds in).
We have a transcript below if you want to read it instead of watching but trust us, this is both fantastically entertaining and very helpful. My favourite expression, ‘Paving the cowpat’
Next AMA: Alex Osterwalder, Author, Business Model Generation, 24th Jan 17.00 GMT.
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(Dan doesn’t swear much but my daughter suggested we change one of the words below. You will work out which one).
Dan Lyons: I have two talks, I can give either one. Mark thought it might be fun to put it to a vote. Either one ends with a part two about how to deal with the press, which I think actually would be the most value to all of you guys. To actually get some reporter to tell you about how we do things.
The first half could either be a talk about Apple and “Fake Steve,” and a little bit of things I’ve come to admire about Apple and lessons to be learned there, or talk about mobile, and some thoughts I have about mobile computing and the emergence of what I think is a new mass medium based on mobile devices. It’s clumsy but do you want to do a show of hands for Apple? And mobile? Oh God, it’s like 50-50. Sheet. [laughter]
Flip a coin. I’ll talk to you about mobile. I think it’s more… The Apple stuff, it’s great with audiences and I’ll talk a little bit about it. The apple stuff works great for people who aren’t really techy, but you guys know the whole story of Apple and how it bounced back. I think. You might find it a little bit less than a compelling.
Just to give you some background on me. I’ve been a journalist covering technology for the past 25 years. The last few years I’ve been at “Newsweek.” I’m in the process of transitioning into something new that I can’t quite talk about yet.
Ironically it’s something more akin to what you guys do. I’m told that you guys are mostly from small companies, five to ten people. I’m transitioning into something sort of entrepreneurial like that. I’ve got to tell you, it scares the crap out of me. I’m terrified of this, having always worked at a big company and had a job and a salary.
Going and doing something like what you do, I don’t know how you deal with that just naked fear every day. How do you explain to your family that this is what you do? I admire your courage and I’m going to go try and do something like that. I’ll probably fail. That’s okay too, I guess.
I’m best known, a few years ago when I was at “Forbes,” I started this blog called “The Secret Diary of Steve Jobs” and I created this persona of fake Steve Jobs. That was really a prank. I did it as a joke. The thing took off. After all these years of being a journalist, writing all these books, nothing ever really took off. The stupidest thing I ever did in my life became the one thing that people liked.
It was so fun and so addictive I couldn’t stop. I was doing it anonymously and I thought, “I’m going to get caught.” I was working at Forbes at the time, which is a really button-down, Republican, awful place. [laughter] Thank you very much. I did ten years there. I don’t know how. I was covering IBM and EMC and Sun and it was like [gestures shooting himself in the head]. You wanted to blow your brains out. People said to me, “Why did you stop?” Because I was bored out of my mind, look what I did for a job.
Anyways, this thing became a book that also got good reviews compared to all my other books, which were like nothing. Then actually I got optioned and I got called out to Hollywood to try to develop it into a comedy show. I spent a year and a half working it up with this cable network and with this really big name director/producer guy. It never got made. The only lesson I learned out of that is that everything you’ve ever heard about Hollywood, how awful they are and all that, is not even the beginning of truth of how fricking awful they are. The worse people you’ve ever met in your life. Total assholes, that’s table stakes, but then stupid assholes, so this really bad combination. I’m a journalist. I’m used to working with assholes. We have a very high asshole quotient in my business, in the media. I cover Silicon Valley, which is [throws hands in air]. At least in Silicon Valley they’re smart assholes. These guys were just horrible. Then you realize — the only lesson I took from the whole thing — the TV business, the whole model is completely broken. It’s amazing as a techy, as people who do what you do, you’d spend a week there and go, “How did this business ever become like this?” You have creatives on one side who are all miserable because the only way to get to the market to customers to the viewers is to go through this bottleneck of what I came to call “the asshole machine.” By the time whatever they feed into the machine comes out the other side it’s obviously crap. The people on the other side are unhappy because almost all they get is crap. It’s sold in a way, it’s bundled up in cable in a way that you can’t break it apart. The customers hate the experience. The creators hate the experience. The only people who like it obviously are the assholes in the middle who are making all the money. The whole thing needs to be blown up. Then I came to believe, “God, you know that’s going to happen.”
The other lesson I learned is that doing my blog was way more fun than any minute of writing scripts and sitting in these meetings and getting notes from these people. You can’t believe how stupid they are. Not only that, I realized even if it got made, the people who read my blog would never like the show. It would be way less fun than the blog. The blog was like a TV show, but the audience was on the show. They could write stories. They could send me ideas. They could send me Photoshopped funny photos and I would put it on with a shout out to them. It was much more interactive. It was much more alive. It was like a dinner party with a million people. We’re all just getting together every day and seeing what can we do today. That’s when the sort of penny dropped for me. The thing we already have with the Internet, even as primitive as it is, I think, is going to become better and richer and more fun and better for everybody than what we’ve had.
That leads me to this talk about the post-PC era, which Jobs called. That was Steve Job’s line. I think the only reason he called it that was because he got his ass kicked in the PC era so he wanted desperately to be in a different era. I don’t want to speak badly of the dead, but you know, come on. It’s okay in his case. I think he was so awful that it’s actually okay. There’s good karma from it. Sorry. If there are real hard-core Apple fans out there I apologize. That’s the other thing that people didn’t realize. The whole thing “Fake Steve” was a piss-take on Apple. It was a parody. I then later had people lay into me, “I liked it better when you liked Apple,” and I was like, “Dude, the whole thing was a joke about Apple. You didn’t get that, right?”
This is the fourth wave of IT. From a computer perspective, we have mainframe, mini, PC, mobile. I think it’s the biggest wave we’re ever going to have, much bigger than PCs. It essentially boils down to mobile and cloud, and you guys know all of that. What’s interesting to me is the idea of mobile as a medium, as a mass medium, a new way of telling stories, a new way of reaching customers. I think what we have is an emerging platform. Here are the stats. There’s seven billion people on the planet now. Six billion cell phone accounts, but most of them are feature phones, but by next year or so we’ll have about a billion smartphones.
Smartphone sales are already outpacing feature phones. They started in the EU in 2010, here in 2011, and in China just like last quarter. Eventually all phones are going to become smart phones because the parts will be so commoditized and be so cheap there won’t be any sense in making anything other than what we would today call a smartphone. I think this becomes basically Bill Gates’s old vision from the 1980s of a PC on every desk, only it’s not a PC, it’s a phone. Mind you, the phones we’re carrying even today are way more powerful than the PCs in the day when Bill was saying that.
Then you step back and think, “What are the implications when virtually everyone on the planet can be constantly connected to the Internet and to each other?” This is the first time in the history of our civilization that basically everybody can talk to everybody at any time. Mary Meeker, from Kleiner Perkins, who used to be a big Wall Street analyst, put out a report earlier this year saying, “The empowerment of people via connected devices is the megatrend of the 21st century.”
You can just sit and run through all the ways, like in developing economies. Remember the guys from MIT, Nicholas Negroponte and his friends had the “one laptop per child,” the $100 laptop. They never really made it work. It didn’t really work out. This is the $100 laptop. This is going to be the first computer that most people around the planet ever have, the first one and maybe the only one they’ll ever have. Politics we’ve seen, news, shopping, entertainment, basically everything gets changed by this wave.
I wanted to talk just about the idea of a new mass medium that’s bigger than TV and better than TV. For one reason, it’s global. It’s not the BBC and the ABC, and the CBC. It’s just the world BC. It’s not one to many. It’s many to many. It’s participatory. The one key thing that I’ve learned in the last five years doing blogging compared to being a traditional print reporter is the audience doesn’t want to be an audience anymore. They don’t want to just sit there and read stuff or look at stuff. They want to be in the show. The Internet allows that.
To give you a sense of how quickly this is coming on — I have this thing called “The Tale of Two Internets,” PC versus mobile — we talked about web 2.0. I actually think web 2.0 was really just all part of the first version of the web, which was the web made for computers and browsers. That was the web. Now we have a different web, which is mobile devices attached to mobile networks. In 1999 there were 38 million broadband users worldwide. Today we’re almost at a billion just on phones. In 1999 you paid $70 for a really crappy DSL connection. Today you can have 4G LTE for the same money.
In terms of sales, Windows PCs right now are less than 50 percent of Internet-connected devices last year, versus 95 percent four years ago. That’s how rapidly this is changing. If you look at this next stat it’s interesting. AOL took nine years to get their first million users. Facebook took nine months. Draw Something, that crazy game by OMGPOP, did it in nine days. In 2011 smartphone sales exceeded PC sales for the first time, and if you look at projections for 2016 it looks like three times as many phones sold as PCs.
If you look at the history of the TV industry from the 1940s and ’50s, you can see some parallels in that hardware goes first and then content follows. This is a slide…those numbers are TV sales. You can see that by…it was the fastest invention ever to enter US homes. Sorry the slide got messed up. By 1955 half of US households had a TV. In 1947 no one had one. The content was primitive and sparse. RCA made all the TVs, controlled hardware, and controlled content by owning NBC. It’s worth noting RCA stood for Radio Corporation of America.
Today’s RCA, I argue, is Apple. Apple, like RCA, began in the last generation, began as a PC company, and was first to leap onto this new platform just the way RCA, a radio company, was the first to move into TV. Apple recognizes that it’s about controlling the content, not just the hardware. The hardware is just…an iPad is just really a shopping cart. It’s an $800 shopping cart, to get you to buy other stuff.
A quick look at Apple’s revenues.
I think Apple is a great proxy for the mobile revolution because they’re the first ones to get it and pivot on to it and the first ones to really seize it. This is their revenues over the last 10 years. The yellow bars are their traditional computer business. You can see that, if they had never invented the blue stuff, which is iPad and iPhone, they would have a really good business that had kind of grown and recovered from the almost death, and was growing and was sort of steady. A very healthy business that any of us would — let’s face it — would love to have. But the blue stuff is the new thing, right? This year they’re going to do $155 to $160 billion in revenue, and $112B, roughly, give or take, of that, is just two products, the iPhone and the iPad. That’s basically a $100 billion dollar business that didn’t exist five years ago.
What this also means is that from Apple’s perspective, they’re relying very heavily on mobile devices. I think it’s actually a risk point for them, is that you look at how much of their overall revenue comes from mobile. By this year it’s 72 percent. They’re really depending a lot on two products, either of which, or both of which are facing really strong competition, either of which could stumble. So far they haven’t. The market value for Apple is $630-something billion, biggest company in the world, the biggest in US history. Net margins — and this is on a hardware business — 28 percent, and 40 percent on iPhone, which is like miraculous if you’re making hardware. This is the beginning of the mobile wave. We haven’t even gotten to the first billion smartphones, right?
But bear in mind the story of RCA, which is that they boomed, and then in 1971 or so…they boomed through the ’50s and ’60s. The guy who ran it — I think it was David Sarnoff — dies, his son takes over in the ’70s and decides, “Wow the hot new thing is conglomerate,” so they bought Hertz Rent-A-Car, they bought a carpet company, they bought this, they bought that. The wheels came off, and by the ’80s, they got bought by GE and basically shut down.
Things can change, but right now Apple is the one riding this wave more than anyone else.
As mobile grows, as this is happening, what’s happening to TV?
TV is killing itself. 20 percent of cable customers have cut the cord or they’re thinking about it, and there’s this generational shift. Young people have just tuned out of TV. They all have smartphones and the Internet. So what are they doing? If they’re not watching TV, what are they doing? The most obvious thing is YouTube. More videos are uploaded to YouTube than networks have broadcast in the past 60 years.
Some quick stats on YouTube usage.
They have 800 million users, 4 billion views a day. Here’s an interesting thing. 75 percent of the people using YouTube say the primary way of getting at it is mobile. YouTube — I think this was last year — 22 percent of all mobile data usage was coming just from YouTube. This is a TV business in a sense, built on mobile.
Google — which is facing the same problem Apple is facing, which is they can’t get content — Google has decided, “To hell with it. We’ll go to Hollywood.” They’ve taken $300 million dollars this year and they went to Hollywood and they said, “Forget about dealing with those guys in the asshole machine. Deal with us. We’ll give you the money to make whatever you want to make, and we won’t give you notes. Just put it on YouTube. We don’t care what you make.”
These guys are flipping out. The guy who created the CSI franchise, those CSI shows, was one of the first ones to jump on this. I talked to him and said, “But you can make anything you want in Hollywood. You’re a rock star in Hollywood. You’ve made millions of dollars.” He said, “No, even I can’t. Even I have to go sit in these meetings with these idiots and pitch them and they change stuff.” So this, for him, is like artistic freedom, and an ability to find an audience without having to deal with the machine.
I think it’s really really profound, but Google, really, in a sense, is just paving the cowpath. All Google with YouTube is doing is taking what we had on TV and bringing it to a new medium, which is fair enough. That’s what you do. The early days of TV were just radio with a camera.
What else are people doing online?
Unfortunately, they’re doing things like this. This is cats with bread, and you can find this. Bread cats at Tumblr.com, sorry the line broke on the thing. It’s really cruel. We did this. We have three cats and we did it with one of our cats. It’s really fun. They hate it. [laughter] They really hate it. We did it to the one cat that I really hate. We have one cat that I really don’t like, so we singled him out for a breading. Or they do this. I don’t even know what kind of an animal that is, but it’s wearing a tutu.
Or — this is my favorite meme — this is Prince Beatrice, in honor of our British hosts, at the wedding with this crazy hat. I don’t know if you saw this meme when it happened. People — you know what memes are — people take a photo and then they play with it. So in this case they took, and put a cat coming out of her hat, then they put it on the Mona Lisa, they put it on Abraham Lincoln, Osama Bin-Laden, and then in the War Room when they were getting Bin-Laden.
I know this is really stupid, right? But somebody sat and made this thing. This probably took a while because you had to Photoshop all those things on. Some idiot sat in a room doing this. Have you ever seen the videos where Hitler’s angry about something? You know, Hitler’s pissed about this? I made one. I made one with the iPhone 4S. Hitler’s mad that it’s not an iPhone 5. It takes a long time to do one, and you don’t make any money. This is how people are now entertaining themselves. This is stupid, but the money is real. Cheezburger network, which does all the memes and all these cat things, they have 16 and a half million people, they upload 500 thousand photos and videos a month, and they raise a lot of money and they’re profitable. These are, in a sense, real businesses.
My theory is — and bear with me, because maybe this is wrong, but not — is that memes are basically extremely short TV shows. They only run a week, or two weeks, and you don’t just watch it. I usually just watch. I don’t usually make them, but if you want to make Princess Beatrice photos, you can. The next step of this thinking is that, “What if companies themselves are becoming more like TV shows?” By that I mean this. Sorry, another f-ed up slide. These new companies that being thrown up every day, these social companies, require relatively little capital to get going. They attract a TV kind of person, which means assholes. Groupon, Facebook, Xynga, you read about these guys. I’ve met some of them. These guys would be great working in Hollywood. They would fit right in.
They don’t last very long. Xynga got scared when Draw Something caught on. It was a mobile game and they didn’t have mobile. They said, “We’ve got to jump on this thing,” and they paid like 180 million dollars for OMGPOP, only to see this go [sliding down sound] because they just don’t stay popular forever. Xynga itself is now in decline, having risen up really quickly, Kleiner Perkins, John XXXX said it was the fastest-growing company they ever funded, and it went public and then boom! Groupon, the same thing, is now in decline. People are bailing out of these places and they’re all moving on. They went public. They worked there for a couple of years, boom, boom. That’s great, let’s move on and do the next thing.
I suggest that we should have different expectations for these companies. We shouldn’t think of these things as being “built to last.” These are not the same kind of people as the people who built Sun Microsystems, or Intel, or HP, who are building something to last for decades. These are more like people who make a TV show. “Let’s throw this thing together. If we get a season of TV out of it, great, we’ll all get money.”
The guy I worked with on my show — was one of the founders of Seinfeld. He said, “We really thought”…he was friends with Larry David. My guy’s name was Larry Charles. He said, “I don’t know if this is going to work. We’ll get a season. We’ll get paid for a year. If we flog this piece of sheet off onto NBC we’ll get paid for a year. Whew!” They had no idea, but that’s how they think. They might work pilot season. They might work one year. That’s, I think, how these guys work.
What are today’s hit shows?
Facebook, obviously. I suggest, again, the way to think of Facebook is that it’s a global performance space. If you have any of those friends who post everything they do on Facebook you know exactly what I mean. You know who you are. You don’t just watch the show. You get to be the show. You get to tell people about your life. You get to entertain people. You tell jokes. You put links to things you think are interesting. It’s the number one app on iOS, number four on Android.
Now here’s the interesting thing. More than half of their monthly active users are now on mobile. Their mobile monthly actives went up 67 percent last quarter. The engagement on this is huge, seven hours per user per month. That’s a lot of time that people are spending on this thing.
Instagram. Again, a sort of panic purchase by Facebook. They realized Instagram understands mobile. They’ve grown really fast. They went out and spent a billion dollars to buy Instagram last year when it had 13 employees and was only 18 months old. Instagram is basically — you’ve seen Instagram, right? — you take a sheet photo and then you put a crappy filter on it and now it’s art. I find Instagram people the most annoying people in the world. They’re always taking pictures of their food. This is what they had for lunch today, but it looks really cool because it’s sepia-toned. [laughter] But it’s real money, right? And, people spend four hours per user month on this thing, which is again, huge engagement.
Twitter — obviously we know that — I again think Twitter is a performance space. Remember the feed “Sheet my dad says?” Just like my blog they tried to turn that into a show. They hired William Shatner. They shot a pilot. It was terrible. They never aired it because it was so bad. Then they went back to rewrite it and it just died on the vine. That was another epiphany moment for me because I realized the blog, the Twitter feed, that was the show. That was it. You don’t need to make it a TV show. It was great as a Twitter feed. It was great to tune in and see what that lunatic had come up with today. That was the show. Three hours per user month, and more than 60 percent of the usage is mobile.
Flipboard turns Twitter into a magazine. It’s two years old, has 20 million users, they add a new user every second, and they get 86 minutes per user per month, so not as much engagement, but still, another way that people, another hour that people aren’t spending on TV.
Pinterest. Photo board. 70 to 80 percent women, and I like to argue 99 to 100 percent inane. It’s…people collect things on their photo board and they share stuff. I’m sorry if you’re a big Pinterest user. Forgive me. I don’t mean it in a bad way. Well, I kind of do. [laughter] Seven hours per user per month is the usage on Pinterest. It’s unbelievable. Think about it. Compared to “Desperate Housewives,” the show, which could only ever get four hours per user per month, because that’s all they showed. They showed four hours of TV a month. You start to see how an aggregate can really roll up and become a new thing. The key thing is an aggregate.
Then there’s games. Angry Birds has had a billion downloads. The Top 10 paid apps on iOS are games, and iOS, some people are saying, could become the biggest gaming platform ever. Bigger, ironically, than the dedicated gaming consoles like the Xbox and the Playstation. Another thing to remember is that these are still the early experimental days. That’s a shot from Texaco Star Theater, and that is Ronald Reagan talking to Charles McCarthy. The interesting, the amazing thing, you can go back and find these clips on Google, YouTube, anywhere, just Google it. Go back and look at clips of Texaco Star Theater, like the Milton Berle show in 1953, and it’s stunning how bad it was, and how primitive it was. It was four guys in Texaco costumes come out and sing songs and while holding Reggie. It’s crazy.
These are still the early early days of our new medium.
They’re also rife with failure and flameouts. Just this week alone, we’ve had three big flameouts. One’s a half a flameout.
The first one is Color. Do you remember Color Labs? These guys came out. They were veteran entrepreneurs. They raised 41 million dollars last year to do a photo sharing app on phones, and it’s just blown up.
The other one is Airtime, Shawn Fanning, the Napster guy, and Sean Parker, the guy who was Mark Zuckerberg’s pal in the early days of Facebook. They raised 33 million dollars to do basically chat roulette, but without penises. I don’t know if I can say penis, but do a clean version of chat roulette. Online videos with this random aspect to it. It has completely blown up and everybody’s left. Fanning’s left. They all just leave. They raise 30 million dollars and think six months later, “Well, it’s not happening. See you later. Thank you, Kleiner Perkins, for the 30 million dollars.”
Korah has raised 61 million dollars, mostly because the two founders were both from Facebook. This is the half a flameout. One of them’s already left. Things aren’t going so well. They’re desperately trying to figure out how to get traction. They can’t. Blah blah blah. It’s on the way out.
This is the new world. These companies are light. They’re fast. They’re fragmented. The audiences are fragmented, and the companies themselves become ephemeral. They’re there for a while and then they leave. You might use one for a while and get bored with it. From an advertiser’s perspective, the audience is in constant motion. It’s not like the good old days when you had three networks and 20 shows and three big magazines and that was your audience. They were just stuck there and you could just market at them.
Who gets hurt? First of all, venture capitalists. The traditional VCs aren’t built for this kind of world. They’re built for the world of making Intels and Sun Microsystems, things where you need to pay, put in a half billion dollars and it takes five or ten years to pay off and you have a few big bets and you hope they work out. These guys, in an attempt to stay relevant — it’s almost comical, but I like watching them crash and burn because they were such dicks 10 years ago during the first bubble — Kleiner Perkins’s John Door comes out wearing a hoodie and starts his social fund in desperation, try to get in on the trend. They’re already two years behind the trend. They make these late-stage investments at huge valuations with the smell of desperation about it and then they’re getting killed. A lot of these companies are going public, and the public valuation, even at IPO, is below the last private-stage round that they did. That’s how upside down the world is. At the same time they’re getting eaten alive by angel funds and crowdfunding that are actually better suited to this kind of thing. If you have a small company and it’s lightweight to start you don’t need to go Sequoia to raise your money. You can go to an angel and get your money.
Right now, in the Valley, there’s way more money than there are ideas, which is why you have things like air B&B, where you can rent out your house to people. There’s like 20 air B&B clones. Then they came out with the car ones, where you can rent your car out to people. There’s one now you can rent your bike out to people. Spinless. If you can’t afford a fricking bike, you have to go rent a bike, or you have a bike, you could make 100 dollars a week from your bike. I don’t care. I’m not going to let somebody ride my bike for 100 bucks a week. It’s insane. I don’t need 100 bucks that bad. Who funds this? It’s like when you go to the movies, and you go to some horrible movie, and you sit going, “You know, it’s amazing that someone in Hollywood sat there and gave these guys 50 million dollars to make this movie.” Who read the script and said, “Oh, that would be great!” Every Adam Sandler movie. [laughter] But they make money, the Adam Sandler movies. You go to these things and you’re like, “Holy God,” but that’s just what some of these companies are like. There’s so much money flying around. It’s so easy to get. That doesn’t help VCs. VCs profit at a time when money was precious and to get them you had to go in and pray and get on your knees and beg.
The next thing — and this is what gets to my business — is this daisy chain of destruction that goes like this. Advertising, ads just don’t work. I think we’ve all finally realized, everybody in the media business. Ads online don’t work. They really don’t work on social and they really really don’t work on mobile. But then my business is paid for, is funded, by ads. If ads don’t work, we get blown to bits. If we get blown to bits, how do brands reach their customers? PR and corporate branding depends on the media to have a vehicle to reach people. This whole chain of brands to customers kind of breaks down and collapses and needs to be rebuilt.
So why don’t the ads work? Advertising was a creature of the TV age. If you watch “Mad Men” you realize TV is emerging as this new medium. Don Draper gets it. The brands that get it, get it. The ones that don’t are like, “Ohh.” They don’t get that the culture itself is changing. It’s not just the medium. The culture is changing. The 30-second spot was built around that. Huge, huge advertising companies with big buildings in New York City have an entire business built around 30-second ads. They have a business built around things that just don’t work anymore. They’re facing this massive wave of destruction.
Ads are even weaker on social for obvious reasons if you’re on Facebook and you’re chatting. It’s like being at a cocktail party and talking to your friend. Someone jumps in the middle to try to sell you vodka. No, I don’t want the vodka. Worse than that, people use social media to fight back. I call it “anti-ads.” The same time you’re blasting your bullsheet ads out telling people how great you are, all these people are online telling people, “No, that guy is full of crap. This stuff doesn’t work.” Social media ends up becoming a whip that companies get whipped with. On mobile it’s even worse because of the — I tried to be funny — the teeny, tiny screens. For very obvious reasons you just can’t show people very much on a mobile screen. This shift to mobile is hurting Facebook. They listed it as one of their biggest threats in their S1 prospectus. It’s hurting Google. Their cost per click is going down dramatically. It’s hurting Pandora. Basically anybody who had a business built around the web is getting slaughtered.
Think about this. In my business, print media, we went from what we used to call “analog dollars” to “digital dimes.” We used to get a lot of money for those ads in a magazine. When we went to the web we got one-tenth ads, because they weren’t that effective. You go to mobile now, the digital dimes turn into mobile pennies. It’s really an incredible crunch that’s coming at the entire media business.
What if we reinvented advertising? What if you didn’t call it advertising because it wasn’t? What we think of as advertising means people spamming you with crap that they don’t want, lots of stuff flying at me. It’s overwhelming and I’ve learned to tune it out. It’s about context. On mobile there is an opportunity to sell people things, not just based on who they are, but where they are, when it is, and what they’re doing.
Mobile devices are incredibly personal. They’re intimate. People at Google talk about this idea of a circle of trust. If you can get into that circle…when I’m using my mobile phone I feel that it’s mine. It’s not like my computer. It’s mine. It’s my phone. I will let you into that circle if I trust you, and as long as you don’t abuse that trust. Google talks about having both an obligation and an opportunity. They have to walk this balance. We all do, I guess, if we’re going to try to market in this world between creepiness and being trustworthy.
The potential is — for all of us who are thinking about marketing — there are seven billion people on the planet. We’re going to be able to reach almost all of them. We’re going to be able to harness their wisdom, their intelligence, and get at their money. Companies that get this and understand it and experiment with it, I think, are going to have a huge advantage. Think about Don Draper in “Mad Men.” He’s the guy who got it. He saw what was happening. Think about the Nixon-Kennedy debate. I don’t know if you ever saw that episode of “Mad Men,” but you know the story. Nixon just didn’t get TV. Kennedy got it.
There’s two things we need. This is partly what I’m embarking on now in my own thing. One thing is a new kind of storytelling, a new way of crafting stories that are unique to the medium. In TV, for the first 15 years, it was basically radio with a camera. It was vaudeville with a camera. Then you had guys like Steven Bochco and Larry David who came along and invented new ways of telling stories that were unique to television. Interestingly enough, those guys were all born in the late 1940s. They were born at the same time that the medium itself was born. It may be that the people who are really going to figure out the Internet are the people who were born in the mid-’90s. They were born in the early ’90s. They’re just coming of age now. Somewhere out there are these Orson Welles of this medium.
The other thing we need is a new business model based on something that just isn’t advertising but it accomplishes the same thing. It allows you to reach customers. I would end this part by saying these are very early days and I really do believe we’re going to figure this out, but right now we’re in a really difficult transition. If you’re basing your business on anything other than mobile, you should stop today and start building it on mobile. I think that’s pretty clear to everybody now that it’s all about mobile. At least that should be your first screen.
Here’s part two, which is the more fun part about how to work with the media. This is more nuts and bolts. You can think of it as a workshop if you want, and it’ll be better off in Q&A. I like doing Q&A. I like being interactive, so I’ll get through these quickly too. Then if you do have questions either specific to your company or just in general about dealing with the press or working with the press or getting press I’m really happy to talk about that. It’s something I think a lot about too because I deal with a lot of PR people.
Next AMA: Alex Osterwalder, Author, Business Model Generation, 24th Jan 17.00 GMT.
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One is — this is the biggest thing that people don’t understand — you need a narrative. A good company is not the same thing as a good story. Reporters, journalists, we trade in stories. That’s our product. That’s our thing. If we’re a business journalist or a sports journalist or a political journalist, it doesn’t matter. That’s just whatever content, whatever domain we happen to be in. Our stock and trade is stories. We want to tell good stories.
One example of this is EMC. I’m very friendly with those guys. I know all the PR guys. They’re based here in Boston and I’ve known them for years. They pitch me all the time and I tell them, “Look. You’re a great company. But you don’t have a great story right now. You had a great story.” They had a great story in the late ’90s when it was suddenly everybody realized, “Holy God, can you imagine how much data is being created?” And then you think, “Somebody’s got to put it someplace.” Then they go, “Here we are. We have these Symmetrix boxes. They cost a bazillion dollars. We’re making money hand over fist. Our customers get so hooked on us they can’t leave.” That was a great story.
The next great story for EMC was, “Oh my God, the dot com bubble is crashing, the four horsemen of the dot com boom are all being threatened. What’s EMC going to do?” They did this amazing pivot. They brought in Joe Tucci and they pivoted into the software and services. They managed to change their revenue mix on the fly. They did the thing we always say about changing the tires on the car while the truck is running or while the plane is flying. They actually did it. They pulled it off. It was an amazing story. That was a few years ago. There is no real story to EMC now, at least for someone like me, a mainstream reporter. For techy guys who are covering every new product announcement, yes.
The other big point to make is that drama is conflict, and this is really uncomfortable for companies. In addition to being a journalist, I left journalism for a while and did an MFA in creative writing. I studied fiction writing. I studied literature, and I wrote a couple of books. It’s the most fundamental thing you learn as an MFA. People write these stories where nothing happens. You go to workshop once a week, week after week, stories where nothing happens, nothing’s at stake, there’s no conflict. Conflict is drama. That’s what reporters are looking for. The Wall Street Journal has a formula, because I’ve worked with a lot of formal journal editors. They all do the same thing. It’s the hero’s journey. Have you ever read or heard of Joseph Campbell? The hero’s journey. If you haven’t read that, read it, or at least get the Cliff Notes. You don’t have to read the whole thing.
Anyways, the basic idea is that from time immemorial every story is about a hero who sets off on a quest who wants to get someplace. He has to overcome obstacles to get there. Sometimes he fails and he struggles and he has to bounce back, and then finally he gets there. Or he doesn’t. That’s the Wall Street Journal. I’m not kidding you. Every story gets turned into that. Who’s our protagonist? The first thing we say with our editor when we sit down anywhere — Newsweek, Time — “Who’s our protagonist?” If I say I’m going to do a story about EMC they’re like, “No, no, no. Who is the protagonist?” It’s like, “Well it’s this one guy inside EMC who’s this developer and he had this great idea and nobody believed him and he fought for it. He took it off to a skunkworks, and he almost got fired but then it turned out to be the right thing.” Okay, that’s a story. That guy is a story. People are stories. Companies aren’t stories.
The key words: desire, obstacles, failure, and struggle. If you’re going out try and sell a story about yourself to some reporter, these are the terms to think about.
The big word, again, the one nobody ever wants to talk about, is failure.
People never want to talk about that. You’ll hire some PR agency and they’ll be like, “Let’s polish it and put it away. Don’t talk about that. Let’s talk about the shiny new thing.” No. The failures, the points where you went down the wrong path and realized, “Holy crap, this is totally wrong,” where Facebook recently said they spent a year and half doing an HTML5 version of their mobile app and then said, “Oh, sheet, it doesn’t work. We’ve got to start over and do a native app,” that’s a great story.
That’s a great story, because what did you learn from failing? People love that, if you’re willing to expose yourself a little bit and tell the real true story of what you’re doing. What you’re doing, every one of you guys, every day, is heroic. You’re trying to build something that didn’t exist before and bring it into the world and solve people’s problems. It doesn’t just happen. We all know that. Nobody expects you to be perfect or to have never had a setback or never failed or never been totally wrong. We actually find it much more interesting to hear about that. You’re more likely to get a story with a happy ending if you’re willing to talk about that stuff.
If you go in and they won’t talk to you…I used to deal with Dell. Oh my God, they would fly me down there and then not tell me anything. I would spend two days talking to people, none of whom would tell me anything. I’d ask a question and the guy would look at the PR person like this [turns head] and she’d say [shakes head]. You’d be like, “Augh!” because you knew that was the good thing. You just stumbled by accident on it and they’re like, “No no no no no.” So I’d be like, “Why did I come here? I didn’t come here to eat ribs with you assholes down in Texas. Jesus Christ. Why bother flying me down? Why have me come down here?” It was just maddening. If you’re going to sit down with somebody, tell them something.
The one good thing I’ll say about IBM…and I will never say very many good things about IBM because I covered them for 10 years and I hate them. They made my life a living hell. No, I don’t hate them. I admire them in a lot of ways. I’ll tell you one thing about IBM. When they bring you in for a story, they have a story to tell. You’ve already talked in advanced. “This is the story you’re coming to do, you’re not doing…this is the story you’re coming to do. We’ve got these people and they’ve all been prepped, and they’ve all done these interviews with me, the PR guy before they talk to you. They’re not going to say anything wrong. You’re going to get your story.” That’s how they do it and they’re amazing at it.
A couple of examples of good stories — you see it all the time — Apple versus Google. Why is that story always in the press? I’ll tell you why. Because it’s about betrayal. It’s about revenge. Eric Schmidt sat on the board at Apple. So the story goes. He stole all the ideas about the iPhone. He sat there taking notes pretending he wasn’t and then he went back and fed them to the Android team so they could steal Apple. Steve Jobs said, “I’m going to wage thermonuclear war.” That’s why Jobs was such a great blog subject. He was so dramatic. He so understood what a story is. Jobs just lived it. He was a story. That’s why people loved that story. That’s why it’s always in. Who’s going to win now? If you believe that story it’s that these two guys were best friends and one of the sneakily stabbed the other guy in the back and the guy who got stabbed is like, “No, I’m still alive and I’m going to kill you back.” It’s wonderful. We love this sheet. We eat this stuff up.
Or Apple versus Samsung, kind of same thing. Samsung’s Apple’s biggest component supplier. They’re total partners for years: “Oh we love each other,” “Oh they’re so great.” Meanwhile Samsung’s taking all these notes and making all those iPhones and going like [knife-stabbing gesture], sticking a knife in their back. I happen to really love Samsung. I love their products. They are terrible at dealing with the press, one of the worst I’ve ever seen. They just do not get it. That again is why we like that story. It’s conflict. It’s competition. You going off and doing something, that’s great. That’s a fine thing. But if you got some other guy who used to work for you and now he’s doing the same thing but you’re going to try to kill each other, that’s much better. Much much better.
Pro tips. Understand what the reporter needs, meaning, what gets that reporter a promotion? Reporters, at the end of the day, are just like everybody else in a company. They just want to get ahead. Think of the reporter the way you would a sales prospect. In other words, you’re trying to sell something to someone. What does his boss need him to do this year, and how can you help him do that? If buying your products is going to help him get a promotion you’re in.
At the very most basic level, know what a reporter covers. I can’t tell you how many people don’t know that. I get these pitches that are like…I’m at Newsweek. I get these pitches like, “There’s this new security software and it does…” really gorpy bits. Have you ever looked at Newsweek? Have you ever seen a story like that in Newsweek? No. That’s for PC Week where I used to work. I understand the difference.
Then build a relationship. Don’t pray and spray. That’s the other thing you do. You hire a PR agent and then say, “Oh, they’re going to get you some press.” Then they send the same press release out to like 400 people. You might get a couple, but for the most part, most of us at big places don’t even look at press, that kind of stuff. We don’t even take it seriously except it’s like background noise. “Oh that’s interesting.”
What you want to do is figure out the three reporters, or one reporter, or whatever, that you want to know. You’ve got to meet them, and you’ve got to meet with them over and over and not expect anything. It’s not a transaction right up front. You’ve got to meet them, get to know them, figure out who they are, what they do, and then maybe something comes of it.
A good example of that, I’ll tell you, is that I’ve got a guy who works at Webber, big PR. He’s kind of a friend. We’ve known each other years. He’s in Boston last year and he was like, “Hey, can we just get together for coffee? I want to tell you about some new clients we have.” I’m like, “Yeah, sure. Fine.” We meet, and this guy is very savvy. He’s like, “We’ve got this guy, this guy, this guy, and this guy,” and in a nutshell he hits what each one does. “Anything, you like any of it?” One of them does software that runs on supercomputers. I’m like, “God, I’m doing a story about supercomputing. Lawrence Livermore, in China, and our competition between the two. That might be a fit because I need a data point that says here’s how fast…” Turns out — I talked to his client — the client says, “Yeah, you wouldn’t believe it. Two years ago we did no business in China. Right now we have like 20 clients in China. They’re the fastest-growing region we have.” I go, “Ah!” Boom. Data point. He didn’t get a profile. He didn’t get a big glowing puff piece, but he got one nice paragraph or two paragraphs in a big story in Newsweek, which was like, “Score.” A really great hit for him.
Here are some examples of bad pitches. “Dear media representative.” [buzzer sound]. Dead. You didn’t even know my name. Another one: “Dear Dave.” Well, my name is Dan, but thank you very much. I get those. “As the technology writer at ‘Time,’ would you be interested in…” Well I work at Newsweek, but I know that you sent this to my biggest competitor first, so fuck you, thank you very much. Sometimes they actually leave the boilerplate in but the boilerplate contains the other newspaper’s name. “Oh, I’m getting the shopworn stuff. I’m down the list,” which makes you feel real special. “I saw the article you did on company A, and I represent company B, and they do the same thing as Company A, so how would you like to write about us?” The bad news is, except in the trades, once you’ve written about a subject, you’re not going to write about it again next week. That’s it. You got your crack at it for a year. Maybe do something online. If you missed it, you missed it. It’s good to meet but not to expect a story. It’s good to say, “Hey, I’m glad you’re interested in that space. We’re in that space too. You probably didn’t hear about us. Can we come and talk to you sometime?” Yeah, but lower the expectation.
The thing I often get — it’s almost demanding — “Well you wrote about our biggest competitor. You didn’t write about us. That was a mistake. You should write about us.” Okay. No thanks. [phone hanging up gesture] There you go. “I’m following up on an emailed pitch.” That’s the one. People email you. You get carpet-bombed with all these emails, which is bad enough. If you’re interested — I’m a sentient being — if I’m interested I can write back. I know how to respond to an email. If I didn’t respond back that means that I probably can’t sell it to an editor. It’s not that I have personally any animosity. Everything I do I have to go in and sell to some asshole in New York. I have to go pitch to them. Believe me, if you think I’m a jerk, they’re really bad. Like, they’re really really bad. They don’t care, because they don’t know the companies, so they put stuff into stories and I’m like, “No, these people are my friends” and they’re like, “No.”
You have to be aware that the reporter is caught between you and trying to sell it to the machine inside. The machine inside, especially at a place like Newsweek under Tina Brown, is a moving target, believe me. What do print journalists need? Like everyone else, they need to please their boss, who is usually evil. Big names to put on the cover to sell copies. If you’re a little startup you’re probably not going to get on the cover. That’s just not going to happen. They want exclusives. They want scoops. They want access. They want the illusion of being important. A lot of journalists, you’ll be shocked to know this, are egomaniacs. Think about it. What kind of people go into a field that pays very little but you get your name in the paper every week? They’re mostly egomaniacs. They want exclusives. They want to be the only one with this story. You can’t be pitching it to everybody and then hope they’re going to get it, unless you happen to be that one percent of companies that are super-hot like Square. Right now Square is very hot. If you’re Square you can do whatever you want. You get plenty of press. Basically what reporters really want is something where, “If you’ll do this story we won’t talk to anyone else.” They love scoops, meaning they love to get stuff first.
What about bloggers? They’re a different breed. I’ve been one, so I can tell you it’s all about traffic. That’s all that matters. If I’m a blogger, all I care about, I get a number. Literally, I have a number, and I’ve got to make that number in traffic every day. My compensation is tied to traffic. It’s not even a vague thing. It’s very very personal.
Most bloggers want a better different job. They’re hoping to work in a blog for a while, and to make a name. Bloggers don’t make much money. At Gawker — this big blog site in New York — they have a leader board on the wall that shows in real time what stories are getting traffic and who’s on top. Those reporters sit in a room and try to push their name to the top of that leaderboard. It’s like that. It’s very competitive and it’s very cutthroat. The caution I would give to you in terms of dealing with bloggers is, it’s much easier to get a lot of traffic and a lot of buzz with a negative story than it is with a nice story about a nice company. Be aware of that.
Here’s the other thing that’s really sleazy. If you’re a venture-funded company and your VCs have connections with blogs, you can leverage those connections to get favorable treatment. They all tell you that that’s not the case, but Pando Daily, which was started by Sara Lacy, who used to be at TechCrunch, is funded by Mark Andreesen and a bunch of other VCs in Silicon Valley. You’d better believe that those guys think of Pando Daily as a way to get press for their clients. It’s a value-add. It’s another reason to take money from Mark Andreesen, is that he’s pals with Pando Daily. When you get your funding around you’re probably going to get written up in Pando Daily.
TechCrunch is owned by AOL, but it’s the same deal. They’re very cozy with certain VCs. If your VC is one of the ones that’s cozy with them, you can leverage that to get coverage. Business Insider — you know Henry Blodget’s site, Henry Blodget, the guy who got thrown out of Wall Street and he started a site? — he’s a friend of mine. He’s a good guy. He’s funded by Mark Andreesen.
Remember last year when there was a story of, “Is there a bubble? Is there not a bubble?” Mark Andreesen, who’s buying up stakes in all these companies, is going around saying, “There’s no bubble. Nothing to worry about, there’s no bubble.” It’s like asking a car salesman “Is this price good?” Yeah, it’s a great price. Sure, it’s a great price. He’s trying to sell you this crap. He just bought it at 50 billion dollars. He’d better sell it to you for 75.
Oddly enough, Pando Daily, Business Insider, all the sites that Andreesen is invested in or owns, all had stories saying “There’s no bubble. [scoff] This bubble. There’s no bubble.” In fact, when the New York Times, Nick Bilton would write a story saying, “There’s a bubble. This stuff’s crazy. These companies are not worth this much,” they would jump right in and say, “Nick Bilton is full of sheet. He doesn’t know what he’s talking about. He’s an idiot. He works at the New York Times, blah, blah, blah. Let me tell you, I work at Business Insider. There’s no bubble.” That’s all coming from Andreesen. That’s all Andreesen using his blogs to sell you crap.
The cynic in me says, “Fine, may be a reason to take money from Marc Andreesen or at least be friendly with him and use him to get coverage on blogs.” I guess what I’m saying is, “Can you buy off a blog?” Yes, you can. That’s the…yes, you can. They’re bought and owned.
Every once in a while you get to see how corrupt and craven we all are. It usually involves Apple.
I’m going to tell you a funny story. This just happened. This is one of my favorite things. I have this thing about David Pogue at the New York Times. He covers Apple and he loves Apple. He’s like the biggest Apple bootlicker of all. When Steve Jobs came back with the liver transplant, I posted a thing on Fake Steve saying, “Pogue’s liver is awesome. Thank you David Pogue for giving me half your liver. It was great. Thank you so much.” Pogue would give Steve an organ. He’s just like all around the bend. Mind you, he works at the New York Times, but you may not know this but the way he really makes money is he writes “The Missing Manual” series for O’Reilly. He made millions and millions of dollars writing missing manuals for Apple products but then he goes in the New York Times and says, “[whispering] They’re awesome. Buy them. And you might need a manual too.”
The reason you see so much Apple coverage is very simple. Any Apple story drives huge traffic. Every blogger in the world knows this. A few weeks ago, or the week before the iPhone 5 came out the BBC, everybody called me and said, “Can you do an Apple story?” They all want Apple stories because it’s just bait. The BBC said yeah. I file them a story, and it was a negative story, really really nasty negative story. They call me back the next day or the day it ran and they’re like, “It got a million hits in 24 hours. It’s the biggest story we’ve ever had.” Well, yeah, it’s Apple. It’s not like it was a great story. It’s just Apple and it’s a little bit controversial, it’s provocative, boom. That’s why we love to write about Apple.
Think about this. David Pogue, Walt Mossberg at the Wall Street Journal, have to be able to get Apple devices first. They have to get them. Every time a new phone comes out or any new product that people want to know about, they need to get it a week in advance or two weeks in advance, and be able to have the review on day one, otherwise they’re dead at their job. David Pogue is of no use to the New York Times if he can’t do that. Walt Mossberg is of no use to the Wall Street Journal if he can’t do that, so think about that. Apple knows this, and Apple says, “We’re going to give five people the next iPhone. If you say anything bad, you’re not going to be one of the five it next time.” They do not tolerate dissent.
Believe it or not, I do not get a lot of access at Apple. You’d be shocked to know that I don’t get invited, but if I called and said, “Can I come to thing?” they’ll say okay, but they don’t treat me very well. But they’ll let me come. They do not like anybody who says anything negative, so if you’re Pogue and you’re Mossberg you’re like, “I’ve got to review this thing but I can’t really say anything bad.” It turns reviewers into courtiers. Their biggest skill — if I’m Pogue or Mossberg or a lot of other reporters and I’m covering Apple — my most important job thing is I’ve got to treat Apple like I’m a sales guy selling them stuff.
What I’m selling is me. I’ve got to go in there. I’ve got to kiss ass. I’ve got to be really nice. I’ve got to keep them happy, which is why when the iPhone 4S came out — and remember, it looked just like the iPhone 4, it was just a marginal update and it really wasn’t very good and it had Siri, which really didn’t work — David Pogue’s review said it’s, “Sheer magic,” and that Siri “profoundly changes the definition of a ‘phone.'” Not like it’s a good phone. No, this is profound, this is magical.
So, how is the iPhone 5? We all know now in the wake of this “Mapocalypse” — I can never say it right — the “Mapgate” — we know the maps don’t work. It’s a pretty big problem. Nevertheless, the guys who all got this phone in advance all came out with reviews.
This is Business Insider — “The iPhone 5 reviews are the most positive we’ve ever seen for a smartphone.” Across the board.
Mossberg: “The iPhone 5 is the best smartphone on the market.” Down low in his review he did kind of say, “The maps were a little bit of a drawback.” Just did a little cover his ass kind of thing.
Pogue: “The iPhone scores well, with a quibble.” Do you know what the quibble was? Not maps. The little lightning connector. “It doesn’t work in my other things.” Like, a not-real quibble.
So you say, “But wait. How about the new maps?”
Mossberg, “It’s a big drawback but it also has one huge advantage. It has turn-by-turn navigation.”
Pogue said, “Maps are one of the chief attractions of the new operating systems. It’s one of the chief attractions. It’s wonderful. They have new maps.”
Ed Baig, from USA Today, who also got one, “Apple has done a very good job with turn-by-turn,” because Ed Baig is the same deal with USA Today. If he doesn’t get Apple, he’s toast.
MG Siegler, who’s just a blogger, but is just an Apple bootlicker and he gets traffic by kissing Apple’s ass, he went one step more. He didn’t say, “Well, it’s kind of good.” He said, “I’ve been testing maps for the past week, and I’ve come away impressed.” [sarcastically] It’s really good!
Everybody rushes out. They sell five million of them in the first week. A week later after the big opening, David Pogue has a change of heart and says, “Maps is an appalling first release and may be the most embarrassing, least useable piece of software Apple has ever unleashed.”
The question is did he review the phone without ever even using the maps? Which is kind of hard to believe because we all knew it was a new map app and it was very controversial, and it would be the first thing on a list that any reviewer would want to tick off. Better check out those new maps. Or did he use the maps app and neglect to mention the problems for fear of pissing off Apple? Then the question is does either scenario restore your faith in the business press? I’m telling you, have no faith in any of us.
The Mapocalypse strikes, and the spin machine starts spinning. Here’s how this happens. Apple doesn’t talk on the record to reporters. They talk on background. Not to me, even on background. Any conversation I’ve ever had with them is, “This is off the record, right?” Even to their friendly reporters, they won’t come out and have the guts to just say what they want to say. On background they brief all these guys and they say the story really isn’t about the maps. The story is about the timing. Why did we do it now versus next year? We had to do it now. We had to bite the bullet because next year we’re going to be in the middle of an OS release, and oh, by the way, it was Google’s fault, because Google wouldn’t give us x, y, and z, so blah, blah, blah.
Then suddenly you see all these stories start pouring out all over the tech blogs about “sources close to the matter,” “sources familiar to the matter say this and that,” that’s Apple PR. Those aren’t sources. That’s just Apple PR telling these guys what to write. The next line, “It’s a black eye, but not a big deal,” is another one of these Apple bloggers who makes his living writing about Apple. He’s never going to say anything bad about Apple. “It’s a black eye, but no big deal.” All that fails. That spin fails. So Tim Cook comes out and apologizes. Now we realize. This thing was so bad the CEO had to apologize for this software that a week ago all these reviewers were telling you was great.
Now comes spin number two, which is again put out by Apple PR, which is, “Let’s talk about the apology. Forget the maps. Let’s talk about, how did it sound? Was the apology well written? It was a really good apology. The contrition seemed really genuine.” “I think Apple did a great job. It’s masterful job. It was a genius apology, and it was a big win for Apple.” This is maddening. [applause] You can see why it’s so fun to make fun of Apple for three years. You can’t expect to get the same kind of treatment as Apple. Nobody else can. This is a really unique situation because they’re at the top of the market. The problem they’re going to have is when they stumble and fall, when they’re no longer powerful.
Every company I’ve ever known that was powerful like this all thinks the same thing, that they will never not be powerful. They always think it’s going to last forever. Dell in the late ’90s was so arrogant. It’s hard to believe now because they’re such idiots now, but they were so arrogant. Lotus in the 1980s. Lotus! Remember Lotus? You probably don’t even remember Lotus. Lotus was bigger than Microsoft, and believe me, they were outrageous. They all think it’s never going to end.
Here are some tips. Trading favors. This is really nasty and wrong. Michael Arrington, who ran TechCrunch, got in trouble because he basically got up at a thing and said to this company, GroupMe, “You know what? I wrote about you guys and then you had some other news and you went and gave it to the New York Times ahead of me, so fuck you. I’m never going to write about you. You’re dead to me now. I’ll destroy you.” His big thing was, “You feed us stuff. If you’re a startup, you feed it to TechCrunch first, or we’ll destroy you or ignore you.” I think that’s really really horrible. I know Michael, we’re actually kind of friendly, but my advice would be…not anymore [laughs]. No, he’s open about this! My advice would be ignore him, and ignore anybody who approaches you that way. There are bloggers who do. They actually think they have some power. TechCrunch. TechCrunch! It’s like the size of a dry cleaner. TechCrunch is a little tiny business. They’re a little piece of crap business run out of Arrington’s house. It’s not like IBM.
Mr. X. I can’t tell you this guy’s name, but this is a well-known VC, and I’ll give you hint. I already used the name in my presentation today, and it’s a Swedish name. This guy notoriously dishes on background to everyone. If you ever wondered why there are so many glowing stories about Andreesen Horowitz, why there are so many stories about how Horowitz loves hip-hop and he gets inspiration from hip-hop music and everything, the gamut, these guys were really smart. When they started their VC firm, they hired a really good PR woman who had started a firm called Outcast in the Valley, Outcast PR, and she had sold it. They brought her on, not as a PR person, but as a partner. They realized, “Holy crap, this is about marketing and advertising and PR,” and this woman is really tough but really good. They work the press really hard.
Everybody in the Silicon Valley press core knows they can call up and on background, if you really want to find out what’s going on over there [points one direction], you call him [points other direction], and he tells you what’s going on over there. He dishes about the people he doesn’t like. That is the one way of getting press. You trade favors. You make yourself useful to someone. You dish, and in return for that, you get coverage.
The other one, the other model, is Marc Benioff of Salesforce. Have you ever noticed how much press Marc Benioff gets? A lot. Marc Benioff is the most assiduous courter of the press I’ve ever known, but he does it openly. He holds dinners all the time. They hold dinners. They invite all these press. They’ll come to Boston and invite us. I’ve never gone to one because I don’t want to sit there all night. I want to eat diner. I don’t want to listen to that bullsheet. And gifts. You get on their mailing list and I swear to God, I get little boxes from Sales. No reason, here’s a little candy in a little thing. Not above the level at which it’s illegal. They’re not sending you a car or anything. Little stuff just to let you know we’re thinking about you. Call Marc any time you want. If you want to call Marc Benioff, 24/7, give him a call. He’s happy to talk to you. He’ll get on the phone himself and talk to you, which makes reporters feel important, and he’s happy to dish.
The point I would leave you with on this is that it’s about building relationships, it’s about getting to know these people, working with them, figuring out what they need. What they need is usually gossip. If you have some of that and you can pass it on and you don’t feel too gross about it…
You can tell I live in Boston. I’m not based in Silicon Valley. I hold the whole cesspool in disregard. I wrote a thing a few months ago called “The Silicon Cesspool” about this whole incestuous relationship between VCs, bloggers, companies. It’s a real mess. That’s the reality. If you want to know what’s really going on there, that’s it.
Finally, I would leave you with this, be careful what you wish for. There are no puff pieces. Everybody always thinks they’re going to get a puff piece. They’re always broken-hearted when the story comes out and it has something really bad in there about them, even if it is a puff piece.
The stories in my career that I’ve had the most trouble with were ones where I really liked this company. I really want to say good things about them. They’re a good little company. Then some editor said, “You’ve got to throw in this thing about how they almost went bankrupt.” “Well, okay.” So you put it in. Then the guys are like, “I can’t believe you wrote about that.” They’re heartbroken. They call and they complain.
Be careful. If you deal with a reporter, reporters have some sense of self-respect. They don’t want to write just a puff piece. They have to get their pound of flesh. There’s a thing called the “to be sure graph.” “Graph” means paragraph. The “to be sure” paragraph is the one where you’re saying, “This company is great, to be sure…” You know, they did kill babies and deliver war and all this other stuff, and then they say, “But they’re still okay.”
The “to be sure graph” is the XXXX. At least there is going to be one of those. They’re at least going to get a pound of flesh out of you. Then the thing is, think of an article as a transaction. What do you hope to get from it? What price is it that you’re going to have to pay, reasonably, and are you willing to pay it?
This is the thing IBM is great at. Before they even sit down they say, “Why are we doing this story? Is it going to help us sell stuff?” If you’re just doing a story because you want your ego gratified, you want to see your picture someplace, don’t do it. You’re in business to sell stuff. If you can get a story that’s going to sell your stuff, and okay, the guy’s going to take a couple of shots, you might get a broken rib but you’ll survive, fine.
The other last thing I would tell you to do is write the story in-house before you sell it to a reporter. Either hire somebody or if you have a PR person, but this is how big companies do it. They literally bring someone in and they go through, “Here are the five people you’re going to talk to. Here are the five execs you’re going to talk to. Here, Mr. A., this is what you’re going to say. Mr. B., your part of the story is this. Mr. C. is this.” It’s scripted.
At IBM it’s tightly scripted. They have written it and they know what their ideal story would say. They bring the reporter in, walk the reporter through the same set of facts and interviews and kind of hope that what comes out in the New York Times is fairly close to what they came out with here. Do that exercise before you even think about talking to a reporter. Walk through what the story is and exactly what you want it to say.
That’s the end of my talk. Good luck and thank you, but if you have questions, I’d love to talk to you about them. Thanks very much. [applause] Anybody? Questions? [gestures to crowd] Oh, yeah, sorry.
Next AMA: Alex Osterwalder, Author, Business Model Generation, 24th Jan 17.00 GMT.
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Audience: What do you think about, for those that don’t have PR, what do you think about self-XXXX, helping a reporter XXXX that throw stuff past you?
Dan Lyons: Go ahead and say the question again because I didn’t quite get it either.
Audience: Those who don’t have PR people to dedicate to their…
Dan Lyons: You don’t have an on-staff PR person?
Audience: Right. What do you think about the blast type of things, like help a reporter out in media kit and other type of things which happen to be, “I’m looking for this kind of story,” and you weed through it and you filter and so forth. Is there any success to that that you’ve seen?
Dan Lyons: You mean if you’re working with an agency PR person rather than…?
Audience: No, it’s like for the really small companies there are ways to get on listservs and things like that. That reporters and bloggers specifically say, “I’m looking for somebody that can talk about X.”
Dan Lyons: Oh, oh! Yes! That is a good way because reporters now will use social media and use the web to go out and tell people, “Here’s what I’m working on and I’m looking for this.” Yes, I think subscribing to that…it’s just an online form of doing the same thing of relationship building, figuring out who this person is and what they cover. Yes, I think, that’s actually really good. People will cast a line out looking for something on a specific story or on a general area.
Audience: I never knew any of this worked this way and it’s fascinating to learn about it, but I don’t want to play that. I don’t want to do that. Is it okay to ignore it or is that stupid?
Dan Lyons: Yes! This is the thing. That’s the best question anyone’s ever asked me about that. I’ll tell you, seriously! Really! Yes. No. Absolutely!
Audience: We should get t-shirts for that, by the way.
Dan Lyons: You get a t-shirt. I’m sorry, I didn’t bring any. You get a fake t-shirt. Yeah. No. That’s exactly right. My sister is a management consultant. She works for a big privately-owned company. Got bought last year, but for a long time they were independent. They were really fast-growing, competing with McKinzie. She was always bugging me when I was at Forbes, like, “Why can’t you get a story about us?”
“Well I can’t write about you. You’re my sister. You’re a partner here.” She was like, “Well can’t you pass it on?” “Well, you know, fine.” Nothing ever came of it. Finally she went to Tina and said, “Fortune magazine. We got a call. We got a new PR person and she’s got Fortune magazine and they’re going to come and write about us. We’re so psyched!”
Now the CEO of this place was kind of an egomaniac and he really just wanted to be in Fortune. That was what really was driving him. When I said to her, “Think about it.” If I was this guy at Fortune and you weren’t my sister, I would call every client you ever lost. I would call all of your competitors, first of all, and I’d ask every one of them, “You ever win any business from these guys?”
“Oh yeah, yeah, this guy they really pissed off. They hated him.” I would talk to every one of those unhappy customers because I’ve got to know that. That’s going to be in the story. I started telling her that. “Are you really comfortable with that?” Even if it’s a good story, this guy’s going to do all that. They were like, “Oh really?” It’s like, “Yeah, really, dude!”
Sam Palmisano, who is the CEO at IBM, famously wanted no press. His top PR guy was one of my oldest friends, and I would call him and be like, “Dude, please. Just once a year can we get Palmisano on the cover?” He wouldn’t sell copies anyway, but whatever. Palmisano said, “No. I would rather be with customers. I would rather be making stuff. If this is not going to help me sell stuff, I’m not going to do it.”
That’s why your question is so good. A lot of really big companies are actually where it’s like, “Just deal with your business. Run your business. Sell stuff to customers.” Forget about what…if you can stay out of TechCrunch it’s probably more valuable than being in TechCrunch, to be honest. That’s true.
One more? Is there another question? Oh, yeah, sorry. I’ll repeat it if you want. Here comes someone with a mic, okay.
Audience: First of all, that was a great talk. I thoroughly enjoyed it, but in the first part of the talk you mentioned Facebook as one of the “fad” companies. I was curious as to why your opinion is that way, about Facebook in particular. I get Groupon and some of the others, but less so on Twitter, but even less so on Facebook. Facebook seems like a real platform to me.
Dan Lyons: I agree with you, and I didn’t mean that they’re all faddish. I would say I think Mark Zuckerberg is earnest about trying to build a company that lasts for a long long time, and they have a billion users. They’re not going anywhere.
But look at Myspace. Myspace is still around, but is there a chance that Facebook will become what Myspace became? I think so. I think to some extent. I think you’re right when you compare Facebook to Xynga, say, or Groupon — but not when you compare it to say, General Electric, which is a company that lasts for decades and decades. I don’t think Facebook is a company that lasts decades and decades.
I could be wrong, but it does seem to me that these things become…they’re somewhat ephemeral. They have a peak, and then people move on. They get dissatisfied. They get unhappy.
The big inflection point for Facebook is the shift to mobile and can they really make it? They were really built for the last world. Can they become a mobile company? Their purchase of Instagram gives them a foothold, but can they really transfer their whole business? Yeah, I would agree with you. They’re much more likely to be a long-lasting company
The same for Twitter. Twitter is not going away tomorrow. They’re not fading away. I think they’re building for the long-term. The question they have is, “Can they monetize?” They still really haven’t successfully monetized, but God, they’ve got this amazing company, this amazing product that they almost stumbled into.
Yeah, I agree with you. There is a difference. I think the difference is this. There are TV shows that ran for….Gunsmoke was this show that ran for 20 years. There are TV shows, especially in the early days, that ran for a really long time. The vast majority of shows get to pilot and flame out or do one season and flame out.
There’s a lot of attrition. The point I was trying to make is that these companies sort of feel like that. There’s a spectrum of a lot of churn. A lot of things flame really quickly before they do anything at all. There’s a lot of they run one season, maybe two seasons, and then people [slumping posture], lose interest.
I can imagine Pinterest, for example, being very popular, and then kind of being like, “Ah, I’m kind of sick of that.”
There is some sense on Facebook, though, of exhaustion, especially among young people. They have too many people in their feed. There’s too much noise, not enough signal. Facebook now has become so passionate about trying to monetize it that they’ll ruin the experience by trying to jam things into you that you don’t want.
Yeah, thank you. That is a very good question. I appreciate it. Thank you.
Okay, thank you very much.