July 12, 2005
It’s a Great Time to Be an Entrepreneur (In the Association Market)
Posted by Kevin | Print This Article
A couple weeks ago, Joe Kraus (he founded Excite.com back during the bubble and, more recently, Jotspot, a pretty cool hosted wiki/collaboration platform) wrote a post that’s gotten a lot of play in the small business blogosphere — “It’s a Great Time to be an Entrepreneur.”
Why does he think it’s great? When he founded Excite, Joe says it took $3 mil to reach launch, but only $100k to reach launch with his latest venture. He says his “top four reasons” for the reduction in costs are:
– Hardware is 100x cheaper, thanks to open source
– Infrastructure software is cheaper, thanks to open source
– Easy access to low-cost global labor
– “Search engine marketing” and the ability to better target smaller niche audiences
A pretty good recipe for easy-bake technology startups. But these same factors can play a role in making it a great time for associations as well. Because we are all “technology” companies now.
We’re in the technology business because we’re in the relationship business. And there ain’t no way to create and nurture relationships in any effective sort of way these days without being a technology company.
Creating and nurturing relationships is not solely about having committees, playing golf with a few members, talking to people on the phone, chatting with folks at the conferences and training sessions. If your membership is sizable at all, there is a very real limit to what these encounters (while useful for their own reasons) can tell you, because they may not be (and probably are not) in the least representative.
They either become echo chambers that provide a false sense of security about your organization’s capabilities, or lend an irrational weight to what those members have to say. (Ever had a colleague or staffer say something like, “Hey. I was talking to John Smith and he thought X service is bad and we should replace it with Y. We might want to look into that.” John Smith may have a good point. Or, he may not.)
Creating and nurturing relationships is about identifying — understanding — learning from — and being actively engaged in every single interaction your members have with your organization.
Sound crazy? Well, it happens every day.
Suppose, as I said in the above paragraph,member John Smith said that he thought X service was bad and should be replaced. What if you immediately punched a button and showed him a screen indicating that of the 76% of your members who indicated an initial interest in the service, 48% have participated, and 81% of those indicated satisfaction with the service immediately thereafter. Three months following use of the service, 68% still rated it highly and 42% of the total users of the service said they selected it because they had referred been referred to it by other users.
And what if your system identified users of that service as representing an identifiable interest group … and a viable market for its own niche community or even association … that you could start … before someone else does.
Yeah, I’m just making numbers up, but you see my point. Sound crazy? Happens every day …
(And the eyes of lots of association execs who think of themselves as “people” people just glazed over at those numbers. Because they’re not getting it, either. Member relationships, in the end — and the ability to serve those relationships profitably — are about numbers. Without the numbers — without understanding the interactions — you have nothing more to offer your organization than an educated guess.)
The tools available to associations now — open source! affordable! surprisingly powerful! — are overwhelming compared to the options we had ten (or five) years ago. Unfortunately, I’m not sure how many are actually taking advantage of them. I still see a lot of associations who think of technology as “the database” (and maybe “the website”) being run by “membership” or “IT.”
What a dangerous error and huge lost opportunity. You wanna compete in a world where anybody can raise $100k and start competing with you, then realize that it’s not about managing data. It’s not even about managing relationships. It’s about being managed by relationships.
It ain’t about “surveys.” It ain’t about “focus groups.” It’s about Every. Single. Interaction.
And yet …. as I read through the standard association management periodicals and such, I’m struck at how the revolution so aptly described by Joe Kraus seems to have passed the association community by.
Is anybody talking about it? Is anybody doing it?
I still see many colleagues whose associations continue to spend huge sums of money (huge!) on “association management systems” that are overpriced, overfeatured, buggy, and, god help us, proprietary. Why?
P.S. A fair question to ask is, is my organization doing it? Nope, not the way we should be. Or I should say, not yet. I have to keep a lid on some things we do for obvious reasons, but I have been embroiled in a very interesting project for a number of months now. I should be able to offer an initial report publicly in another 2-3 months (and can barely wait as I’m downright giddy about the whole thing).
P.P.S. Jeez, some of my last few posts have gotten heavy. I’ll get off my soapbox and lighten up for the rest of the week (though I do want to return to the topic of discussion Jeff and I had in comments to the last post some time soon).
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