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Personal MBA: by Josh Kaufman

While taking some time out in Fiji I returned to my backed up reading list. One on the books that I has started but failed to complete before was Josh Kaufman’s The Personal MBA. I spotted this in an airport bookshop on a different trip, then cheekily downloaded it to the kindle app on my iPad for a fraction of the shell price. Sorry traditional retail, but get over it.

When I first picked it up i was struck by how closely the themes of the book mapped to the thinking and approach of the brainmates Product Management methodology. What I have really been enjoying is the very clearly articulated thinking that chucks down many of the terms that we use and disambiguates them very effectively.

For example he has by effectively differentiated between a product and a service. His definition of a product is something (almost anything) that can repeatable deliver value without the direct involvement of person. A service on the other hand does requires a persons direct involvement to deliver value and therefore lacks scalability. I think a this is a very useful distinction. I have often been asked if software is a product or a service. Under this definition it is clearly a product as it does not require a persons time and effort as part of the the delivery process.

There are many other examples of concepts that are very familiar yet are difficult to clearly articulate. Josh has tackled this challenge and has delivered a package of neatly summarized tools to test and support any business idea against.

When I get back to Sydney, I will review my notes and create a checklist of things to consider that will make Brainmates and the training business in particular more effective for 2012.

This is not really the place for simple free writing. but at the same time it is important to have somethgin to say about anything really. I just need to write and get past the first few lines of nothing to say. The first thing that cane to mind this eventing was spreets, and groupon and all of these other deals aggregation sites.

When i first came across them i thought that they were a ridiculous idea. Yet the businesses that are investing in them suggest that there is more to it than that. Why would a business offer a such huge discounts to such a a large number of potential customers? It doesn’t seem to be a sustainable model to me, yet every day there are hundreds of people that sign up for the deals, handover their cash and presumably get a product at a great price.
The businesses offering the deals get a flood of sales at (i imagine) much lower margins than normal but they get a chance to prove themselves to a new customer.

OK, so this can work for products where the main component is a service where the margins are generally higher than for a physical product. This allows a steep discount to be applied without making a horrible loss. business that offer a deal that give them a zero or negative margin are in for a rough ride. It also requires a product that has excess inventory that would otherwise be wasted. Again this can apply to services where there are peak times and quite times. The business can require that the offer be channeled in to the quiet times to improve the overall revenue, again providing that this is not done at a loss.

The biggest problem that I see here is that the type of customers that these group voucher deal sites attract are the least loyal, price sensitive bunch around. They will hop off to the next deal without even remembering who they last bought a product from.