A Special Interest in Targeting the Blogosphere

One of the more interesting aspects of being a VC is the seeing the change in the entrepreneurial zeitgeist as it flows through our deal funnel. Startup activity is a form of collective consciousness.  I am repeatedly surprised by the co-occurrence of similar ideas from startup teams who have no connection to each other.   

This vantage point also provides a perspective on the go to market process as seen by entrepreneurs.  I’d like to discuss one pattern I have seen played out repeatedly over the past year.  It is summarized in the following exchange:

VC: So tell me, what’s your go to market strategy?
Entrepreneur: We are going to target bloggers, because they are early adopters.

I have heard this from prospective business partners as well as my own portfolio companies.

• This was an insightful answer in 2003. 
• It was an adequate first step in early 2005.
• But it is meaningless in 2007.

Today there are over 57M blogs (including spam). That makes the blogosphere the 24th largest country in the world, ahead of South Korea and only slightly behind France, the U.K., and Italy.

Consider the following substitution:

VC: So tell me, what’s your go to market strategy?
Entrepreneur: We are going to target [the entire population of South Korea – every man, woman, and child] because they are early adopters.

That’s not a target; that’s a universe. The only person who should be taken seriously when they say targeting a population of 57M is Kim Jong-Il.   Everyone else needs more focus. So let me offer a way to focus the answer. The target is the pivotal fraction of that universe that is critical in achieving your goals.  Even if it’s 0.1% of the blogosphere, that’s still 114,000 bloggers!

What is really a target in the context of this go-to-market question? A target has at least the following properties:

• - It is relatively homogenous in its perception of and response to Newco’s product (that’s why it’s a target and not a set of targets)
• - It is addressable by a limited number of actionable sales or marketing decisions (that’s why you can focus on them)
• - It offers some strategic or operational advantage over alternative choices (they are the most relevant population.)

How should we think about bloggers in this context?  Are they the media? Are they customers? Perhaps.  But bloggers are also just another form of indirect distribution.  They are the value-added resellers of the 21st Century, taking a widget here and a gadget there, to differentiate what they have to offer to their ‘customers.’ Your challenge is to be that widget or gadget in their blog – to have them integrate you into their online product.

So how will you define, attract, motivate and retain your online channel?  That’s the question that is running through my head when I hear “target the blogosphere.”

Fortunately, value-added reselling is a time-honored method of building a business.  There are even some parallels from the recent past. Return with us now to the thrilling days of yesteryear.  There used to be interesting organizations called software companies and, they, too, used indirect distribution.  They roamed the earth freely, devouring budgets with abandon, until the comet hit in the year 2000.  We can learn lessons about successful methods of indirect distribution from the fossilized records they left for us.

Lesson One:
Match the channel with the product. Understand what skills, motivations, reputation, resources, and reach a reseller must have to deliver your product to their customer.
Webspeak: Segment the blogosphere and profile your intended community.

Lesson Two:
Segmentation only matters if you can actually figure out how to attract, qualify, recruit the right partners.
Webspeak: Know how to find these people on the Web; what they read, what search terms they use, etc.

Lesson Three:
Try to get adopted by some existing network of resellers, rather than build your own.
Webspeak: Find existing communities of interest or purpose.

Lesson Four:
Indirect distributors don’t do missionary work for you.  They piggyback on your initial success and amplify it.   
Webspeak:  Use guerilla efforts to lead to (what usually only in retrospect appears to have become) viral marketing or network effects, i.e. success.

Lesson Five:
Give the channel a real ROI.  Demonstrate how they can achieve their goals through you. 
Webspeak: Affiliates.

A lot of the Web 2.0 conversation (and the echo) is about democratization and access.  It is mostly applied to content and media.  Perhaps a more important consequence is that it is the democratization of distribution.  As we have learned all too well, small, homogeneous, and motivated communities called special interest groups can drive democracies.

What’s your go-to-market? How will you find your special interest group in the democratized world of online distribution?

Comments

[jim Forbes]

As usual, great Post, Peter.
I wonder how many blogs die within six months?

jim forbes

[Kevin McDonald]

Jim, I don't think blogs really ever die. They just get stale.
e.g. when the blogger gets a new job at a large firm, has to evaluate more deals, has a longer commute, and ultimately has less time to blog. *smiles

With that said, Peter, I'll wait for your insightful postings. Thank you again for sharing your thoughts.

Kevin

[Peter Rip]

Kevin:

Yes, they do get stale. OTH, one of the "benefits" of a longer commute is more think time. Hopefully, I can avoid getting stale by compensating slower inventory turns with longer shelf life.

We'll see.

Thanks.

[~C4Chaos]

excellent points! love the lessons. right on the money.

marketers should stop talking about the blogosphere like blob a of mindless heap that can be "influenced" the way advertisers think of mass audience. a more compassionate way of doing it is to know the target demographics, determine the influential bloggers (aka influencers) within that demographic. have a decent conversation with them devoid of sales pitch, and leave the rest to quality of the product or service. bloggers or no bloggers, the best evangelists are happy customers :)

~C

[Raj Mankad]

Hi Peter,

My first foray into blogosphere and I land here. Very informative. Your words sound similar to someone else I know. Maybe its the PHd in Marketing. He's from Kellogg btw.

Thanks

[Abigail Johnson]

Peter,

Every so often over the years, we have seen the trend of entrepreneurs thinking their communications program is their business plan, rather than an important piece of the puzzle to influence the market which feeds into a well-thought-out business plan. "Influencing influencers" has been a critical part of a well-put together communications program for as long as we can remember. Today, some bloggers are in fact influencers (among others).

Thank you for your thoughtful piece.

[alan patrick]

Hi

Interesting article.....re the pre comet guys, some of the economics have changed though eg webservices

Really wanted to pick up on you comment on democratised distribution, though.....the thought that flashed through my head was a Just in Time delivery mesh, rather than the current company controlled stovepipes.

Do to physical delivery what the New New Net has done to digital products.

Hmmmm......maybe I'll call it Webvan 2.0 ;)

[Simon Brocklehurst]

So... 57 million blogs including spam. True. But... how many active blogs/bloggers? It's probably a *lot* less... and I mean, a *lot*...

More like Puerto Rico than South Korea... maybe...

[Shefaly Yogendra]

Not only are active blogs way fewer than the blogosphere universe, they are also of non-uniform quality, many are updated infrequently, some lose focus, some become general rants and so dormancy results.

They don't fully die, thanks to 'free' blog platforms such as Blogger. If more were hosted (well, mine is not.. yet), we would have a better idea of how many are updated regularly. That may be the whole market.

Then there is the fact that some have cross-border influence, some have localised influence in their countries. And in general, some have more influence than others, and they could probably be the target segment.

But considering a vast number in the world does not blog, although that is not to say they are not tech-savvy or will not buy your product. That challenge is bigger than finding and targetting bloggers I think.

[Kevin Burton]

Just one note.... there aren't 57M blogs.......

If you exclude splogs and inactive blogs you're talking about 2M effective blogs.

[Dimitar Vesselinov]

Only 57M blogs?! Why don't we count online communities like forums and BBS (online bulletin boards) that are very popular in China, Russia and Eastern Europe?

"The total number of blogs in China will grow over 200% from 37 million in 2005 to nearly 120 million by the end of 2006. This number will continue to grow as more broadband services are rolled out to China’s inner regions."
http://china.seekingalpha.com/article/13336

[Jaynie]

Fantastic post, Peter.

This trend of "start-ups targeting the blogosphere" has taken on a few other notable permutations as well. I would place "marketers begging for UCG" and the "overabundance of failed viral campaigns" in the same camp. For marketers that aren't inside the new media community, the buzzwords of Blogosphere, Viral, Web 2.0, Consumer-Generated.... all seem so very clear-cut and manageable. Only now are we beginning to see, en masse, the failed attempts at reaching *anyone* with this foolishly huge target. Just take a look at Sony and Walmart's "flogs"... Proof enough that many biggies still don't get it.