Category: Markets

Photo taken from a plane of a military base

Harnessing Imbalances

July 1, 2022 / johnhooley

The women of Camp Hansen were not attractive, but they were courted as if they were supermodels. I spent a year in Hansen as part of my service in the Marines. There were 6,000 or so Marines and maybe ten of them were female.

In the news recently: airlines are offering pilots three times their normal pay for taking on extra shifts.

When I started working in web development in 2007, businesses still asked each other for web design referrals. A couple of years later, suddenly everyone was looking for mobile developers.

a man facing a hydra with corpses on the ground

Hydra Positioning Strategy

June 30, 2022 / johnhooley

Years ago, I shared an Uber with another agency president from the airport to a business conference. It was a random interaction, just a coincidence that we were on the same flight to the same place.

A year or two after that, I ran across a sales executive from his team at an evening mixer for the local biotech industry. I was there doing research on positioning for my agency and the sales exec was there looking for clients. This was odd because I didn’t realize the agency specialized in biotech and also because most agencies don’t have salespeople out at evening mixers.

I joined the Rotary Club in Portland last month and was, again, surprised to discover the agency president as a member of their leadership board.

Yesterday, I was doing research on PPC competitors and did a quick lookup on the agency and found that they advertised heavily in the Shopify market.

This morning I looked at their website and found no mention of biotech or Shopify.

What is going on with their customer acquisition strategy?

Why There’s Less Profit in Specializing

June 6, 2022 / johnhooley

There’s a common belief among entrepreneurs that serving a niche is better than being a generalist. Lots of smart people recommend this specialist approach.

Which is why I was surprised to see several research studies on the agency industry that showed that generalist agencies were more profitable than specialist ones.

Are all those smart people wrong? Not exactly. But there is nuance to specialization that few people understand or explain.

Antifragile Crypto Cats

May 23, 2022 / johnhooley

Nassim Nicholas Taleb’s book, Antifragile, proposed a new idea- that there are certain things that improve from disorder. To give a short example of how this concept works: if you dropped a vase on the floor and it shattered, it would be fragile. If you dropped a vase on the floor and it didn’t shatter, it would be robust. If you dropped a vase on the floor and the impact caused the vase’s walls to become more durable, we would consider it to be antifragile. The disorder made the vase better.

In the book, Taleb lays out an antifragile investment strategy that he dubs, “the barbell strategy.” You put 90-95% of your investment in safe vehicles in predictable environments. The other 5-10% you invest in chaotic environments that contain the possibility of dramatic positive swings. In this way, you avoid ruin, but still gain from the occasional upward spike of fortune.

I’ve often wondered how you might employ this strategy in a business. This past year, I benefited from a front row seat on an application.

Only Work With Winners

May 20, 2022 / johnhooley

A bulletin board in a coffee shop I frequent is covered in business cards and flyers. It’s a wonderful organic mess, a kaleidoscope of unique rectangular designs. I doubt that it’s created much business for any of the people who posted their card.

There are hundreds of channels your business could get customers through- including a bulletin board in a coffee shop near you. However, most of them won’t do a thing for you.

Instead, there are likely less than five effective channels. And of those five only one or two will be the primary means your industry gets customers.

Overcoming a Murderers’ Row

May 18, 2022 / johnhooley

I’ve been a mixed martial arts (MMA) fan since I was a teenager. One of the beliefs that gets thrown around among fans is that, “to be the champion, you have to beat the champion.” This means that the challenger for the belt must not only win against the champion, but must do so convincingly. Their victory must be so obvious that none can dispute it. If they don’t accomplish this and the champion wins a decision before the judges, it’s the challenger’s own fault and they have nothing to complain about.

Markets function the same way. Consumers are risk averse and will congregate to whoever is the perceived market leader. For many markets, the size and age of the market has evolved it into what fight fans would call a, “murderers’ row.” In other words, an ecosystem with serious competition.

For your business to grow, you have to figure out how to tap into some form of energy to sustain that expansion. If that energy is going to come through new customers, out competing some form of murderers’ row is a reality you’ll likely face.

Using Horror Vacui to Innovate

May 11, 2022 / johnhooley

If you walk through a forest, you’ll see a limited number of species of trees. Depending on where you are, this will probably be smaller than you can count on your hands. Why aren’t there more?

There are only so many resources in a patch of earth that a tree can use to grow. Each of the species uses different requirements and advantages to compete for and use the available real estate in a forest. Where the edge of one species advantages end another species begins. For example, one needs a lot of sunlight and won’t grow in the shadow of a hill where another grows best with shade.

For each of these categories of context, a species survives and reproduces the best. This results in them dominating that spectrum in the forest. They fit best there.

The market is the same way. The resources and energy available in the market pull solutions into existence to address the available contexts. Horror vacui or “nature abhors a vacuum,” is how Aristotle described this effect.

If there is a market, there will be a limited number of kinds of solutions in it with dominant market leaders.

5 Energy Sources For Growth

May 6, 2022 / johnhooley

Growth is driven by energy in the market. That market force manifests as customers buying your products. If you’re trying to grow your business, you have to figure out how to tap into more of that energy.

You might visualize your business as being powered by a water turbine in a low valley. To make the turbine run, you have to tap into lakes, rivers, and streams higher up and channel some portion of them into your pipeline to power your turbine.

To tap into these market energy sources, you could:

Raise prices on products to existing customers or sell more of the same product to them.
Sell a new product to your existing customers.
Sell a new product to your current market.
Figure out how to get more customers in your current market.
Sell your product in new markets.

Archimedes and his lever with the world on its end

How to Approach Product Ideas

April 22, 2021 / johnhooley

The first product I created was a poll over email plugin for a CMS.

The idea came from a discussion I participated in as part of a tech user group about how to decide on a course of action affecting the group. I thought, “If someone could just send a poll over email, we’d be able to come to a decision immediately.”

I was looking for a product idea and leapt on this.

Over the next 9 months, I wore myself down writing the plugin in my evenings, weekends, and vacations. I traded work with a graphic designer to create a polished website design to sell it and build that too.

I launched it to crickets. After a month working on the website and marketing and was able to improve my 0 sales to 2 purchases.

It sucked hard.

Ideally, product opportunities organically present themselves to you:

You scratch your own itch.
You build something for a client that everyone needs.
Your boss tasks you with building something that’s not in the market (looking at you Bezos.)

But most of the time, for most of us, that’s not going to happen.

So how can you deliberately identify product ideas that are winners?

Finding Business Opportunities

March 19, 2021 / johnhooley

I was talking with a friend about my plan to invest in developing WordPress plugins as products recently.

“That’s a tough market,” he said, “Everything has been built. Customers don’t want to pay anything. You make $100 a year off a plugin and still have to support it.”

He’s right.

We built a WordPress plugin four or five years ago and the market was saturated then. Because of the scope of functionality, it was a pain to support and actually cost us to maintain it.

Natural opportunities that are inherently accessible and rewarding don’t seem to exist anymore.

What I’m striving to learn is how to identify hidden opportunities.

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