Over the last year, I’ve started blogging exclusively on my tumblr blog at www.allenburt.com. Come take a look!

Talking about demand tends to elicit ill acid trips of undergraduate econ 101 (or 401 for us idiots who decided to major).

But the fact of the matter is, in the business world, we talk about it . . . a lot. In the startup world, one of the first questions a potential investor or critic will ask is whether there exists adequate demand to support yet another new product in the market. And, obviously, it is an important question. Without demand, there is no need for supply, which means no need for your business.

However, with our typical usage of demand, more often than not, we limit ourselves to thinking only in terms of demand fulfillment – the satisfying of a present-day amount of customer “want” – instead of demand generation – the idea that the size of the market can be expanded by introducing new variables that increase the “want” and “desire” for a particular product or service.

Bringing a successful product to market, especially in the consumer ecommerce space, requires not just satisfying demand, but generating it in the first place.

Such variables as innovative pricing models, sleek distribution systems, and inspiring marketing content all affect the expansion of the total pie, not just the portion you get to cut for yourself.

In recent years, we’ve seen companies introducing just such variables.

The “Groupon” or “daily deals” model increased the overall market size by driving up demand through price reduction and social validation (i.e. if my friends are purchasing, then why shouldn’t I). Private Sales companies like Gilt Groupe and Lot18 create desire for their products by curating their selections along side rich and inspiring content.

Uber.com (which officially launched today in NYC) is doing it by offering a sleek and innovative interface for purchasing a black car service. By creating a new distribution channel, Uber has actually increased the size of the black car market – as seen in San Fransisco as car companies are hiring more drivers to meet increased demand.

Looking forward, demand generation will be at the core of every ecommerce model. Product curration, personalization, and user interaction will be as important as customer service and convenience are today. Companies that simply satisfy current demand will no longer be good enough.

Inspiring and generating the “want” and “desire to purchase” is the ecommerce model of the future.

This poor blog as been neglected for long enough, so I’ve decided it’s time to jump back on the horse.

Not to make excuses, but the past 9 months have brought some some major life changes and decisions including moving to NYC and putting the peddle to the metal on my new business venture – with a scheduled launch date on late Spring!! (Much more to come on this later)

From here on out, the focus of this blog will be as a sounding board for new ideas, discoveries, and unconventional wisdoms – with a strong focus on travel, business ventures, and health/lifestyle.

Here’s to round II.

Over the past year, attendance in participating schools [in Malawi] has gone up by 30% due to the simple addition of pens in the classroom. – Goods4Good

I ran across this statistic the other day and was struck by the impact of such a relatively simple and focused initiative – supply pens to poverty stricken grammar schools in Africa to boost attendance.

It’s the perfect example of how a small investment directed toward a very narrow and relatively unknown problem can make a dramatic impact on the 3rd world.

Since 2007, the NYC based organization, Goods4Good, has run an initiative called Pens for Progress that supplies pens and other basic materials to classrooms in Malawi that don’t have enough supplies to support their student base (recently they procured a generous donation of over 90,000 items from BIC Malawi) .

From 2008 to 2009, Goods4Good reported that attendance in their participating schools had increased by 30% due to the simple addition of these pens in the classroom. Similarly, a study in Kenya found that giving girls a new $6 school uniform every 18 months significantly reduced school dropout rates and pregnancy rates. And yet another concluded that offering free lunches rose attendance by nearly 100%!

The impact of these simple initiatives is far more powerful than what is presented at face value. Increasing school attendance creates ripple effects that extend far beyond the classroom or any singular African community. As education levels increase in Sub-Sahara African countries, so does their attractiveness to foreign multinational corporations as hubs for expansion and investment – the main resource for economic development in the region.

From 2000 to 2008, foreign direct investment to Sub-Saharan Africa from outside corporations increased from $6.7 billion to $32.4 billion. A substantial increase and a positive trend that speaks to the progression of the continent. It’s these major business investments that will be responsible for driving positive social impact and growth going forward by creating the jobs that allow people to make a living.

However, since these large dollar investments by corporations are the easiest to point to as catalysts of long-term change, it’s easy to forget the impact of the little guys. At the core of Africa’s progress lies the efforts of the grassroots organizations, like Goods4Good, who are taking the small, more focused steps to make significant gains in education and, in turn, laying the foundation for sustainable long term economic growth.

I love being reminded, through statics like the one above, that it’s the little changes made by the small focused players that are making the most important impacts. They deserve our support.

Goods4Good matches excess goods with the needs of orphans and vulnerable children in the developing world. If you want to get involved, you can contact them at info@goods4good.org or visit them at Goods4Good.org

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Take the money! Don’t try to reposition your product so that the intended customers use it as intended. But learn where and why you are succeeding, then adjust.

~ Guy Kawasaki (paraphrased from The Art of the Start)

Vibram Fiver Fingers, the ridiculous-looking reptilian like footwear, have been idolized in the running community as the perfect tool for barefoot runners.

However, Vibram’s intention was never to change the world of running. The shoe was created for sailors.

In fact, the evolution of the Five Fingers is a poster child example of how to adapt to an unintended customer base and shift a product’s market positioning based on actual real world customer use and feedback.

The Five Fingers Evolution

As an avid sailor, Marco Bramani, the grandson of Vibram’s founder, was inspired by the idea of footwear that could protect his feet from dangerous rigging and obstacles on board while delivering a surefooted grip on deck. And the Five Finger was his attempt to create a better boat shoe.

Five Finger website at product launch, cerca 2006

The shoe was launched and positioned as an alternative for boaters and water sports enthusiast alike. However, after the initial launch, the Five Fingers team noticed their product catching on among a different and unintended niche market, runners.

As Derek Silvers argues in his 2010 TED talk, the most important part of starting a movement is recognizing and accepting your first followers as equals, and then nurturing them as evangelists to take your idea from nutty theory to mainstream product.

In the case of the Five Fingers, Vibram latched on to their innovative mega-early adopters who saw potential in the shoe for barefoot runners.

Barefoot Ted, an avid barefoot runner and blogger, was one of these first evangelists.

I liked the product so much I contacted Vibram to let them know. When I told them how much I liked the product and that I was using them for running they were pretty surprised. Now they provide me with product to test and report back [and] they help pay for some of my travel expenses for races.

Vibram could of easily beefed up their marketing and taught people that their innovative footwear was supposed to revolutionize sailing. Instead, they listened to their unintended customers and repositioned their business to capture this new obsessive and passionate user base.

In April of this year, Vibram launched the Bikila, the first Five Fingers model made specifically for barefoot runners.

Guy Kawasaki, serial entrepreneur and venture capitalist, urges company founders to listen to their unintended customers and take the money!

Assuming you know exactly what the market wants and exactly who your customers are is a big bet. Be innovative in bringing something new to the marketplace, but when your customers speak, even if they aren’t the “right” ones, you should listen.

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Overshadowed by the news in the gulf, Arizona, and Times Square NYC, the devastating floods that ripped through Nashville, TN slid quickly and quietly under the news radar.

Over the course of this past Saturday and Sunday approximately 15 to 18 inches of rain fell on Nashville, over about as many hours, in what the Corps of Engineers has called a 1,000-year rainfall. At least 11 deaths have been reported in the immediate Nashville area, with 22 reported state-wide.

Although my family’s house missed the encroaching water line by a matter of feet, our close neighbors, friends, and the rest of Nashville were not as lucky. The following pictures are shots of my front yard and surrounding neighbors.

~ View Down My Driveway and Down the Street~

~ Direct Shot of My House and Next Store Neighbors~

How You Can Help

If you feel so inclined, here are some ways that you can lend a hand immediately, whether you live in the area or not.

Text to the Red Cross
Donations are accepted. Can be made online or by texting REDCROSS to 90999

Community Foundation of Middle Tennessee
Donations to the Metro Nashville Disaster Relief Fund can be made online.

Second Harvest Food Bank
The food bank is being forced to relocate its inventory from MetroCenter. Monetary donations can be made at their website.


If you think others would be interested in helping out those devastated by the Nashville floods, please pass this this post along via Facebook, Twittter, or Google Buzz!

Over the past few months Jamie Oliver, Britain’s own Naked Chef, has captivated American viewers with his hit show Jamie Oliver’s Food Revolution – a tale of one chef’s battle against obesity and to transform the way Americans eat and live.

However, while emotionally compelling and entertaining (I didn’t miss an episode!), Jamie’s movement, which focuses on food education as the solution to obesity, faces a much larger barrier to success than ignorant parents and overzealous lunch ladies.

The cost of healthy eating is too high and the cost of junk food is too low

The over subsidizing of certain agricultural products like soy and corn have thrown the economics of the food industry upside down, drastically decreasing the prices of unhealthy junk food and increasing the relative prices of healthy fruits and vegetables.

It’s no mystery why corn, or some version thereof, is the major ingredient in almost everything we buy. Government farm subsidies have artificially suppressed the market price of corn so low that it nears the actual cost of production. These suppressed prices have incentivized producers to replace other ingredients with cheaper corn additives. Therefore, as corn subsidies increase and the price of corn drops, so drops the prices of all the products incorporating it – products that now span the full food spectrum from drinks to processed meats to bread to fast food.

A shocking study in the American Journal of Clinical Nutrition found that a dollar could buy 1,200 calories of potato chips or 875 calories of soda but ONLY 250 calories of vegetables or 170 calories of fresh fruit. We’ve found ourselves living in a parallel universe where the price of chips, a product made from multiple ingredients in a factory, can cost less than a bushel of carrots pulled directly from the ground.

These artificially low prices have made healthy eating choices cost prohibitive. It’s no surprise that we’re so fat; it simply costs too much to be thin!

Low Income Families Get Hit the Hardest

Obesity and related issues are the top causes of death in this country and cost Americans over $150 billion per year.

Those with the luxury of choice have spoken, driving the demand for healthier, sustainable and organic products through the roof and into the fastest growing segment of the food industry. However, this tiny upper class minority isn’t the concern. The real destruction is occurring at the bottom of the income ladder.

When a bag of cheeseburgers cost less than a head of broccoli, no amount of health education can suppress a low income mother’s need to feed her family. Research led by New York University’s Department of Nutrition, Food Studies and Public Health found that neighborhoods with decreased economic and social resources have higher rates of obesity. So long as unhealthy food prices are artificially depressed, the lower to middle classes will continue to suffer.

Jamie Oliver’s Food Revolution offers school education and corporate responsibility as solutions. And yes, education is one major piece to solving the obesity puzzle. However, to completely revolutionize the way Americans buy, cook and eat food, we must change the underlying economics and the way our government subsidizes the food industry from the ground up.

Someone should make a reality show about that. Just some food for thought.

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Notes: For those interested in finding sources of locally produced organic food, here are a few fantastic startups trying to change the landscape of how we buy independent and local.

LocalDirt.com
Foodzie.com
Foodoro.com

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Sometimes it’s hard to remember that successful innovation most often derives from a series of failures. I found this interview with chef David Chang, of Momofuku restaurants in NYC, to be a welcomed reminder.

His notoriety has spurred from his collection of highly successful Momofuku restaurants (Ko, Ssam, Noodle Bar, & Milk Bar) in NYC, as well as his recently published cookbook. Though many have labeled him as the most innovative chef in NYC, Chang is the first to admit that he is NOT the most talented of his NYC counterparts. He attributes his restaurant’s success to his team’s ruthless passion and openness to making big mistakes. Chang’s style epitomizes the mentality that success requires thinking big and, more importantly, putting yourself out there.

In the words of marketing guru and entrepreneur, Seth Godin:

Genius is actually the eventual public recognition of dozens (or hundreds) of failed attempts at solving a problem. Sometimes we fail in public, often we fail in private, but people who are doing creative work are constantly failing.

I hear a lot of entrepreneurs talk about failure as a right-of-passage. As if you can’t be successful or launch a successful company until you’ve failed at least once. I think this is the wrong interpretation. Instead, failure (big or small) must be an ingrained part of the innovation and creative process. Not just something you do once and then get out of your system. Mistakes provide opportunities to change direction towards something better.

As Chang says, his team’s strategy is “throwing whatever will stick on the wall . . . from there, its a progression of accidents to where we get.”

I like this guy.

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Why are sleepless nights, late evening fast food dinners at the office, and unused gym memberships the badges of honor for driven entrepreneurs and aspiring business leaders? Believe me, I’m the worst offender. I realize there are only so many hours in a day and only so many hands to do the work, but at what cost? Is the strain of overworked, malnutritioned, and out-of-shape employees (and founders) a critical weakness that’s all too often under-appreciated and overlooked? I think so.

Instead of a glorified right-of-passage, shouldn’t lack of sleep and poor nutrition be seen as the achilles heal of a company? We meticulously protect our servers and laptops with virus firewalls, optimize our software with the latest advances, and barricade our intellectual property with expensive patents and litigation, yet we let our core assets, our employees and team, flounder on half-functioning brain activity and depressed endorphins. Personal health needs to become a core competitive advantage, not an unfortunate casualty of success.

This is how Gary Erickson of Clif Bar maintains his competitive advantage.

Clif offers its 182 Berkeley employees 32 fitness classes a week in an on-site gym/studio, supports two and a half hours per week of on-the-clock workouts, and reimburses up to $350 for race fees. Two full-time staff trainers provide one-on-one sessions and coordinate with the company’s wellness manager to create constantly evolving athletic programs; this spring, one trainer gave dawn-patrol surfing lessons. “We ask people what they want,” says Clif’s strength-and-conditioning coach, Stephanie Wu, “and management encourages us to give it to them.”

Exercise improves what scientists call “executive function,” the set of abilities that allows you to select behavior that’s appropriate to the situation, inhibit inappropriate behavior and focus on the job at hand in spite of distractions.
“I like to say that exercise is like taking a little Prozac or a little Ritalin at just the right moment,” says John J. Ratey, MD, an associate professor of psychiatry at Harvard Medical School.

Business efficiency and productivity enhancements ranging from sugar/caffeine consumable products to management consultants are multibillion dollar industries driven by businesses striving for this same level of “executive function” and greater efficiency in production. But, instead of cheap parlor tricks and management gurus, what we really need is better feeling, well rested, and happier workers. No amount of venti sized Starbucks or 5 Hour Engery shots can sustain the same level of cognitive brain functionality as a full night’s sleep. In fact, studies conclude that sleep deprivation is just as dangerous as excessive alcohol when driving. Do you want a drunk behind the wheel of your business?

It’s about time we all take a look at how our work life is affecting our personal health choices. And, more importantly, how our personal health choices are affecting the growth of our businesses and careers. Your body is the greatest tool you will ever own. Your brain is the greatest advantage you will ever have. Take care of them.

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What’s more important than perfecting your pitch? Perfecting your question.

Forming strategic partnerships, especially early on, can be the catalyst necessary to take a new business from year 1 to year 2. However, pitching a potential business partner can be tricky, especially if they are an industry incumbent and you’re the new guy on the block. The common advice, recited so often that it’s become business strategy cliche, is to “put yourself in their shoes”. Think about the other side’s needs and formulate a pitch to match.

The problem with this approach is we often assume what the other side’s needs are instead of explicitly asking. When structuring a pitch, the difficulty lies in removing yourself from the hype of your own business. When you’re in the trenches eating, breathing, and living your business, removing yourself completely enough to gain the perspective of an outsider is near impossible. Those that do remove themselves, tend to only go half-way and formulate a pitch through the blurred vision of a self-biased strategy and unproven assumptions of the other party’s needs.

In real life, you never assume to know the exact needs of a stranger, so why make those same assumptions in business. When you want to know how to help somebody, you ask them.

i.e. In an attempt to partner with local organizations and acquire speaking engagements to lift our firm’s brand awareness, I tended to pitch the knowledge base and expertise of our consultants. This was the wrong approach. Most event organizers receive pitches like this everyday. What they really needed was someone with enough flexibility to fill the gaps in their excess time slots. Their problem wasn’t lack of expertise, it was excess capacity. I would of realized this if I had taken the time to ask.

Biz match-making is hard. Sparks only fly when two parties find independent solutions to individual problems by teaming up. If you can determine how to solve the other person’s problem first, then maybe they will agree to help you solve yours. But, you’ll never fully understand their problem until you ask.

Leave the pitch for later. Perfect your question first.