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In the panel “Shut Up and Draw (Please)” leaning about visual grammar and literacy. Very interesting! -EB

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Rainn Wilson talking!

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I’m really excited to see Jane McGonigal speak on how to “become SuperBetter.” I missed her last year and have regretted it ever since.

Also got some GREAT notes from the Fireside Chat with Google+’s Vic Gundotra. Really interesting. Looking forward to posting those as well.

- EB

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So. Many. People. #SXSW

- EB

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View from our hotel. And so begins the first day of #sxsw

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After some minor hiccups in which our flight to Austin was canceled and then not by Delta, Scott and I have boarded and are on our way!

We have already begun combing through the massive number of panels at SXSW we want to take in every day. We are each trying to figure out how we’ll attend the 3-4 different panels we want to see that are all at the same time. This may take some maneuvering….

See you in Austin!
-EB

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It’s True!

The rumours are true: Scott & I will be heading back down to SXSW March 8-14th and once again, resurrecting this Tumblr as we report back on all the learnings we can gather.

Stay tuned!

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Day 1 Session 1- Programming and minimalism

Jonathan Dahl is a programmer and co-founder of Zencoder, a cloud-based video encoding service. His session focused on the application of a minimalist style normally seen in music, writing and art to code.

- A question is posed: what is good programming?

- Looks at old style programming: a simple core, then more code is added and added until it is bloated e.g. Windows

- Then at this point someone strips out the bad and reinvents the simple

- This model exists in other areas: engineering, music, writing

- He then gave some examples and played short pieces: bach to mozart to Mahler (from simple but ornamented Bach up the the lush orchestrations of Mahler) 

- Then the cycle goes back to finding beauty in the simple: steve reich, john cage, arvo part (incredible simple explorations with single instruments, clapping, etc)

- In writing, Orwell wrote that dense, complex writing was a key tool of propaganda

- Orwell pointed out that sloppy, unclear thinking obscures meaning, and that poorly composed prose does the same

- Bad writing is more prone to ‘meaning’ bugs, similar to the appearance of bugs in bad code

- Orwell proposed style rules

1. never use a metaphor or similie unless required

2. never use a long word where you can use a short one

3. if you can cut a word, do it

4. never use the passive voice, use the active as it has more power

5. never use jargon where a simple word applies

- So how does this apply to programming?

- You should always express complexity in simple terms and aspire to the beautiful

- How? His rules for clarity and simplicity

1. always take the simplest approach to a problem

2. clever code is bad code

3. any code that isn’t doing anything is harming your project

4. accept constraints

5. if it isn’t local logic, it should be in a library

6. don’t over abstract

7. continually clean code and simplify

8. break hard problems down

What I liked about this session was how he used examples from other disciplines to point out the power of distilling something to its essence. In marketing it is so easy to look for the clever as we pursue the new. Perhaps we should again take a cue from Orwell and seek out the clarity and beauty of simplicity in our work.

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Session 17: Keynote: Blake Mycoskie

Blake Mycoskie, founder of TOMS shoes speaks on business and philanthropy. 

Some Background, First… 

Blake went to Argentina and stumbled across a group who had been spending their time doing shoe drops. They invited him along. He went with them to villages & saw children so excited to get shoes like it was Christmas morning!

That night, Blake had trouble sleeping because he was worrying about replacement shoes for these children. What happens when they wear down the shoes?

So he began asking himself, why does a charity have to be responsible for this problem? Why not a for-profit business? He kept thinking about this but the “buts” keep coming up!

Blake went back to the US but decided he needed some more time to think about this. So he left for Argentina for another month. There, he made 250 pairs of shoes.

At this point, he didn’t know anything about shoes: retail, pricing, how to produce, etc. So, to get started he had what he called “A creative dinner party.”

He invited 6 girl friends over and let them try it on the shoes and ask for their feedback. THEN told them the reason for these shoes, this idea of a 1:1 business where, for every shoe sold, he would donate a pair of shoes for a child in need.

Well, he IMMEDIATELY sold all 6 pairs.

So, he spent the next bit of time trying to get his shoes into stores. Eventually he got one store to take them and they asked him how he wanted to tell the story. So, in the window display, the store put up picture of him and a child and an explanation of what TOMS Shoes stood for.

A couple of weeks go by, and a fashion writer called Blake to cover this for a story. He does the interview, and then a couple of weeks later, he finds himself and TOMS Shoes on the cover of calendar of LA Times!

By 2pm the day the story came out, he had sold 2,200 pairs sold.

He had set up the website to send him an email every time someone ordered a pair of shoes. The results, that day? His phone died.

Quickly realized he couldn’t do this alone, so put up ads for interns. After a month, they were up to 800 pairs produced a week.

Then… Vogue magazine called. Blake got a great piece in their mag. Suddenly all stores worldwide started calling, including Nordstroms (the Holy Grail of stores). And they don’t just call, they wanted the shoes RIGHT AWAY. But Blake didn’t have any shoes at the moment - he was completely sold out. They demanded to be put in touch with sales department which was funny because a. they were unaware they were talking to Blake, the founder of the company and b he didn’t have a sales department. It was literally him, and 4 interns sitting in his apartment.

One of the interns motioned to Blake to hand her the phone. She picked it up and said she was Lena in Sales. She calmed down the buyer and was able to take an order in a month. Nordstrom is now their biggest client.

In that first summer they sold 10k pairs of shoes. By this point it was time to go back to Argentina and do his first show drop. Blake says that when he went back for the first time, his life changed forever.

Blake says he saw his mom help put on a pair of shoes to a child and just lost it. But later in the day, as they were leaving, a woman with 3 boys in tow came running over to the car, crying and shouting and he couldn’t understand her. Blake got his friend to translate and what she was saying was that those 3 boys had been sharing a single pairs of shoes to walk to school. Which meant that the oldest would go to school on Monday and then have to wait until Thursday to go back to school and because of him, all three boys could walk to school together, every day. 

For Blake, it was a point of no return.

Philanthropy as a Business Strategy

Blake turned his talk to overarching philosophy. For him, giving doesn’t just feel good, it is a solid business strategy.

If you incorporate philanthropy into your core business pillars, in a really authentic way, your customers will become your ambassadors. Suddenly, you dont need a marketing budget and you also tend to attract and maintain the most amazing employees possible.

For Blake, every business can afford to give their employees one day off a month to go volunteer. You attract the most amazing partners - for example: Ralph Lauren finally collaborated with TOMS Shoes after 40 years of never collaborating with another brand.

Questions

One question Blake always gets is, “Who is Tom?”

There is no Tom. TOM stands for “tomorrow” - as in, it will be a better tomorrow if we sell a pair of shoes.  

What is next for TOMS Shoes?

Blake has never answered this question, but he’s known the answer since 2007 when he saw extreme poverty in South Africa.

TOMS will no longer a shoe company, it is now a one-for-one company and its next one-for-one product will launch on June 7, 2011 and be the next step in the one-for-one market.

Follow the conversation at:

Facebook.com/TOMSshoes

Twitter.com/TOMSshoes

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Session 15: Structured Value Pricing

Structured Value Pricing (SVP) with Lee Dale (Say Yeah!) and Jon Lax (Teehan+Lax)

In the professional service industry, everything is all about the hour. But we don’t say to ourselves, “Yeah, I really want to sell another hour of work today!” 

We’re not in the business of selling time, we are selling outcomes. We are hired to solve a client’s problems, not squeeze another hour out of an agency. 

Just because per-hour billing is a standard doesn’t mean it’s the right approach.

Inefficiencies come into play in your creative process because you’re trying to define a process. There are constant exceptions and T+L is still struggling through that.

Both Lee and Jon’s approach is to look at customer first, define the value, and then look at how to price it.

So, how do you create a pricing model that is flexible over time that deals with the creative process? For Jon, T+L generally have initial conversations with customer and talk about what problem they’re trying to solve. Instead of creating a document that details the scope of service, they will define the scope of value.

Let’s be honest, time sheets are completely made up. They are, “total bullshit.”

For example, take a project where you’ve been asked to build a website. The initial question you would normally ask, “How many hour will this take?” At the end of the year, you look at your costs and your revenue and kind of figure it out. But you don’t know how well it worked.

T+L have been doing SVP for a year and a half and Jon won’t lie, “it’s really fucking hard.”

When T+L first started down the path of SVP, they thought they would be handed tools that the company could use to get off of hourly billing. But that wasn’t the case.

Instead, Jon says, “Start a looking at problems differently. Little by little start changing how you work by talking to clients and working on it day by day.”

Generally, clients aren’t familiar with the idea of SVP and so, education has to happen.

It can be really hard to unlearn a lot of the stuff you believe when working on a per-hour billing model. It’s hard for many to understand the different between cost and price.

But cost will not always equal the price you charge the client. It is not about ripping clients off; it’s about the value to the client.

A recent example: A client came to an agency and said, “We’re releasing new pre-season pass for our amusement park and we need to sell 100k.”

The agency went away and came up with an idea. They came back to the client and said, “We have an idea, and we can say we are reasonably sure we will sell all the passes before the season start. If we do, will you pay $X? Does it depend on how we execute?” Client agreed to pay $X fee, regardless of execution for the outcome. So, the agency put the passes up on Craigslist. Did they rip off the client? No. The idea, while simple, solved the problem and was valuable to the client. 

There’s this incentive with per-hour billing to build stuff, do stuff, get paid to push pixels. It’s not incentivizing an agency to do the right thing. We should be focusing on being compensated by the right idea, not the effort.

Being efficient does not equal being effective.

Question to ask:

  • How effective am I for my client?
  • What are our clients buying from us? 
  • What were were selling them?

A requirements document is effectively selling deliverables to a client, not solutions.

One piece of advice is to listen to how clients describe your company. (“This is our digital strategic agency” OR “These are our partners” can say a lot.) That will tell you how they perceive and what you’re selling them.

Question: How do you actually move towards SVP?

First thing: T+L wanted to make pricing a skill inside the company.

Remember, procurement people are skilled buyers. They buy for a living. If T+Ls walk into a situation where they are negotiating pricing, it’s like bringing knives to a gun fight. You need to be really good at selling stuff and everyday you need to get better at getting paid for your work.

For T+L, any projects over $100k is when they get together to discuss pricing. Everything under is really generally tactical and straightforward.

Be careful what you call your services too. For example, when you sell “customer segmentation” to a client, the client may have seen one before and it was bad. Now, they don’t want that item.

Instead say, “We will find out who your most value customer is and why should we go after them.” It’s really hard for a client to argue with not needing to know that!

There are three ways to be paid in the advertising world:

  1. Fixed fees (mostly seen in digital work) 
  2. Performance based compensation 
  3. Licensing

CVO at CP+B: We want to be as creative in the ways we get compensated by our clients as the ideas we provide them.

Another example: Client called T+L with a last minute project. No time to figure out a price for it. So Jon said, we will just do it and then you can tell me what it’s worth to you and write me a check when we’re done. Jon had a price in his head and client ended up paying 5% more than that.

This kind of move is not an amateur move, it does require trust and a strong relationship with client. “Don’t do it on the first date.”

Perhaps it helps to look at clients like stocks: Some have low value and some have high windfall pricing and that’s OK.

Offer the client 3 options when they come to you with a problem to be solved. Each option will have a different outcome:

  1. Get to market quickly 
  2. Create innovative ideas 
  3. Changing the model

This approach lets clients say, “This is what is important to me.”

Remember, in SVP you still need to Project Manager.

And there is a relationship between cost and price. At what cost would we not go below? It’s the 7th question we ask. Not the first. Ask the client-focused questions first.

Some agencies are beginning to hire Chief Value Officers. The CMO at Coke doesn’t care how long it takes to get results. Five minutes? Great! 3 weeks? OK! Results are what matters.

You don’t need time sheets. Really.