Jeff Bussgang asked why everyone still uses 4 year vesting schedules at startups when, in the current economy, exits usually take longer. For those that don’t speak VC – employees at startups get shares of the company, usually granted in 25% chunks at the first four anniversary dates – to encourage them to stay four years and get all their shares. (Shameless plug – if you want to learn more about how to speak VC, check out the Marketing Over Coffee interview with Jeff that will be posted the first week in June)

It’s a good argument, but as you can see from the post it has generated many comments – and this goes right to the Paradox of Choice. The more alternatives someone faces when making a decision, the less likely they will make a decision.

This is most easily demonstrated at a store I go to during the summer in Northern Michigan. They sell different kinds of jam and jellies, and they have about a dozen of them out to taste test, and that’s a problem. If there were two out you would like one better than the other, and maybe buy it. An Economist can mathematically represent this, they use a unit called Utils (rhymes with noodles) to measure the benefit of making a purchase. Bob really likes Jelly A, buying it gives him +5 utils, he does not like Jelly B, buying it would not give him any utils. 5 utils beats the 4 util cost of giving up the $7 to buy it, so he does. His day is now 1 util up with his jelly, the store owner closed a sale, and there is much rejoicing.

Things get more complex when Jelly C is added to the table. Bob likes it, but not as much as Jelly A, he only thinks it’s about +3 utils. Here’s the problem – let’s also say that Bob will only buy one jelly because he knows that even one is really too much and it will sit in his fridge for a year and he will throw half of it out when it’s moldy.

With the third jelly on the table, now if Bob buys Jelly A he’s going to take a hit of -1 util for the regret of passing up Jelly C, which he also liked (but not enough to give up Jelly A). A buyer will be less satisfied with their purchase if they have to rule out alternatives. You can see where this goes, by the time the store owner puts Jelly K (the 11th jar of jelly) on the sample table, the psychological baggage of having to make a decision, including the negative impact of the foregone alternatives actually outweighs the pleasure of making a purchase.

So, changing a 4 year vesting schedule is an interesting idea, but is opens a world filled with alternatives. Unless any of these options are REALLY great (unintended VC pun), the odds are good that no decision will be made. This is the basis for all the stats you hear about having to be 10x better than a competitor to win customers away from them. If you only have one or two features that are better than the competition, odds are that’s not enough to get them to wade through all the work of making a decision (“switching costs” in Economese, which can be real dollars or just psychological labor).

At the other end of the spectrum, @cc_chapman generated some heat admitting that he’s never been to a Trader Joe’s. Many fans of the store cite the quality of the goods, the low cost, the selection. There’s one factor that’s consistently misunderestimated (yes, both): choice is often removed from the equation.  Schwartz gives the example in the book of 85 types of crackers at the local supermarket, again the weight of the decision making baggage. There are some items at Trader Joe’s that have only one option, from there the benefits pile up: smaller footprint for the store, more efficient use of space, more types of products, ability to cut the best deal by limiting suppliers.

And so, as my Friday begins I offer two pieces of unsolicited advice: read Paradox of Choice (and use that link so I get my affiliate kickback), and to C.C. (and everyone else), get the frozen Tuna Steak from Trader Joe’s, thaw it, throw a cast iron pan on to your grill on high to warm for 10 minutes, throw on half a stick of butter and blacken the steaks with a dry rub. Add your favorite beer and enjoy the long weekend.

Authenticity is one of the topics that came up in last week’s Marketing Over Coffee interview with Simon Sinek, which I highly recommend, it is one of my favorite interviews:

A supreme example of authenticity is the speech from Fred Rogers in the link below:

Although Fred Rogers ability to lay the smackdown is seldom discussed, I think this is a quality post that is underrated. It also addresses the important question of Mr. T vs. William Shatner.

Fear naught, more serious marketing copy to follow, but I’ve been searching for levity after a week of getting the water out of my basement after 3 solid days of rain…

The beer was a light lemon brew, a summer beer. I started with the Sam Adams Label for inspiration:

Our friend does an excellent job landscaping and takes great care with his lawn. The irony is that the guy across the street is the exact opposite, so the joke was that maybe beer would get Bill to take better care of his lawn:

Talking about High Street led to this:

The word “Hootch” is funny enough on it’s own, and that led to “Pimpin’ wit da Hootch”

And finally, the only beer tougher that MF’in Snakes on a Plane…

Here’s to your beer of choice this weekend!

The Phone Tree Option in Order of Sound Quality:

Best – Skype to Skype
Still good – Skype to regular phone (Skype Out) A lot of people use this if your interview subject can’t handle skype (doesn’t have the bandwidth, or the technical skill).
Last Option – Phone to Phone

For skype to skype or skype to skype out, use one computer for skype and another, or a digital recorder to record, do not skype and record on the same machine (yes, I know, lots of people do skype and record on one machine, remember that you’ve only listened to their successes, you haven’t heard the files that were lost or ruined). Another benefit of this method is that you get full studio sound on your side.

Ways to do phone to phone: like most tech stuff, the trade offs are that cheap and/or easy are at the expense of sound quality.

One thing to test is cell vs. land line. Cell can be clearer, but if reception is an issue go to land line.

Another important factor – headsets are best, handset next, Polycom conference phone is rough, speakerphones are terrible.

Cheapest and easiest: Many conference call services, such as the good folks of TelSpan can record your conference call (I am a customer of theirs). Give your subject the number, tell the service in advance that you want this one recorded, and download an mp3 when you are done. This is as low a quality can go, but it does work.

Next, if you already have recording gear, put the subject on a polycom and record the room. You get studio sound on one side and this method is a good compromise on price / sound quality. The setup we use for Marketing Over Coffee (this link goes to a page with the full gear listing) is great for that, it’s about $600 but is NPR quality sound and durability. You can go cheaper, but the question is: “How screwed would you be if you lost an interview?” for some it’s no big deal, for others it may be once in a lifetime opportunity.

Most expensive – a device that operates as a phone but pulls the caller into your mixer and pushes your mic back down the line. I don’t know many people that go this route since skyping out is cheaper and better sound quality. But, it should be noted that JK Audio has a full assortment of devices that do this (as well as some other devices that are great if you want to do your own webinars – again, I am a customer and vouch for them).

It will also depend on if you are doing it once or if it’s an ongoing project, for one time call in some favors, rent gear, or pay a pro. If it’s a regular thing, get some decent gear.

Another big tip – when you are done, run it through the Levelator, it’s a free software tool that balances out the volume levels.

Have fun, and Happy Thanksgiving!

Bob Brown:
“CEOs need personality”
Journalists are becoming cognizant of page views.

Peter Kafka:
“Get a referral from someone I trust”
Entrepreneurs are better off without a PR firm, you can tell your story better than a 3rd party.
“Use your blog to put out your view of the world”
Know when to adapt if the reporter is not interested in your one talking point – staying on message will not always work
“Embargos are dead” he tweeted an embargoed release today

Scott Kirsner:
“Meet in person, don’t get introduced by your PR guy”
Dealing with multi-channel reporters – talk to them about where it will be published – online, print, is any of it off the record?
This is retail not wholesale
Exclusives are worthwhile

Wade Roush:
“Don’t write stories and send them to reporters”
Pick the reporters that are relevant to your space and start a relationship with them
Blogging helps complete the picture of the entrepreneur and can be useful to reporters
Only 4 Real hooks for him – Raised money, Change in leadership, change in direction, new product
Keep in mind that exclusives are shafting everyone else

Mike Troiano
“Treat reporters like people”
Mike was busy moderating so he didn’t spend any real time commenting.

There was one question from the crowd asking why PR firms were not represented. David said it was because they wanted a panel of first person accounts from the reporters. I think a key point on whether or not you need a PR firm is your ability to tell your story effectively. You either want a PR firm that has existing relationships with the specific publications or channels you need to get into, or to help you craft your message if you are not a passionate and effective storyteller.

Congrats David on a great event with a huge crowd.

p.s. – Plug for my own stuff for webinno attendees – If you are interested in marketing and PR tips check out Marketing Over Coffee

In the store you can see that the merchandising was done with the brand in mind – it’s not just “How much crap can we put our logo on, and how cheap can we get it”, but rather going a higher quality route. Between having a higher quality product, and the hip Tribes-style appeal of the kiteboarding community you’ve got a great brand that will attract all the cool kids… at least for a couple of years until enough middle-age bozos like myself start wearing the stuff regularly.

Amid a whole street of “Traverse City” T-Shirts, and lots of cherry or fudge related tourist bait, M-22 takes the higher ground. What’s your edge?

When I graduated from college I had a Samsonite Briefcase (yes, and I even wore a suit to work too, every day), and a garment bag that I put 5 years of heavy travel on before it finally fell apart. From there I got a rolling carry-on that I was able to beat up on for more than 10 years. A few weeks ago I noticed that one of the wheels had cracked in half and I knew that it would only be a matter of time before the bag was retired.

As I was dragging it around New York City last week the wheel hit the doorframe as it came in and I saw a piece of the wheel fall off. To my amazement, more pieces continued to fall off and when it was done I saw that the wheel was made up of an outer and inner shell. As the original wheel fell off, a second interior wheel was exposed and the bag continued to roll along with no problem.

You can talk all you want about a product but when one performs like that under fire, the stories are very easy to tell.

I’ll probably be able to squeeze a few more trips out of this bag but I imagine by Christmas I’ll be looking at an upgrade.

As far as what sponsors are looking for, it’s very simple, the majority of them just want to sell more stuff. Companies that are Marketing savvy may be satisfied with access to the audience (meaning, an attendee list with good emails and maybe snail mail).

The criteria for choosing your possible sponsor targets:

1. Your attendees are their number 1 prospects, when they advertise, the put ads in locations where your attendees read or spend time.
2. They have a active marketing organization with budget. There are 3 possible types, forward thinking ones that are already in social media (these are your number 1 prospects, because you don’t have to educate them as to the value of an event like this), ones that are doing advertising (they have budget and will be interested in an event like this that will be more effective and trackable than ads in magazines, radio, whatever), and third are companies that don’t actively market (and are a waste of your time).
3. You have access to them – this can be challenging. It’s not enough just to email somebody or call the front desk, you need access to an upper level decision maker. Front line and most middle management aren’t looking for more work to do, so they will probably ignore you (like the folks at M-Audio who had no interest in Podcamp 1, and missed the bus). Forward thinking middle managers and top level guys are the ones who will see the value in sponsoring an event like this that will have greater return than whatever other forms of ads they are using.

Forward thinking marketers may be feeling budget pressure so many of them are more willing to consider alternatives like social media than ever before (more impact at less cost? yes, now is the time that these words will make people listen).

Once you have a list of prospects you have to get in front of the decision makers, this is where you want to leverage linkedin and the rest of your network so that you get a reference and a personal introduction. The hard work is getting to the right people, once you are in front of them it’s an easy sell: “What if I could connect you with X of your most loyal customers, who are active in the online community and will blog, podcast, and spread your message on Facebook for less than the price of a single month ad in X magazine?”

So the big question to get started is: “Where do your attendees spend their money?”