Posts Tagged ‘rentoid’

Another entry barrier gone? (The Sequel)

November 23, 2009

Back in February I suggested that an element of the “cost of advertising/building a brand” barrier to entry has been eroded considerably by the increasing ability to film and post advertisements online (and then hope like hell for some viral takeup thereof).

I used an example from my cousin‘s Rentoid startup to demonstrate how a home video camera, a few brave mates, a funny idea and a Youtube might be equally as effective as engaging a creative agency and a film crew.

Well, technology is racing ahead. The Rentoid lads have moved very hi-tech on a similar budget (i.e. pretty much free), with this Pixar-like gem:

As Steve explains, this is all done via Xtranormal (i.e. some folks who’ve done all the hard work for you).

Clearly technology is racing ahead here for budding entrepreneurs seeking an audience.

Of course, making the ad is only one piece of the puzzle. Reaching an audience is harder. The February ad looks like it had 1200 views. One in March got almost 2000. Will this vid be the breakthrough? I guess if its close to costless there isn’t much downside risk.

Another entry barrier gone?

February 23, 2009

My post about the music business argued that technological change has reduced barriers to entry considerably. In that instance, it was a raft of new technologies that made making and distributing music so much easier. These changes rendered the previously important music labels somewhat redundant.

One further aspect of this was the scope for musicians to market themselves, as they could build their image and communicate their message through extremely low cost means (such as Myspace and Youtube).

Such gains can be seen beyond the music world. Firms can now also bypass the dominant mass-media (and its associated businesses such as ad agencies and media buyers), and attempt to communicate their message directly to consumers via the same sort of sites as the musos.

Here’s an example from web-rental business Rentoid (yes, the one run by my cousin):

It’s low budget but has a chance to go viral and build greater brand awareness than a boring print ad or a billboard (both of which would be much more expensive).

What do you think? Does it communicate an effective message?

And is this a viable strategy for many firms?

Thrifty is nifty

February 6, 2009

A new age of heightening frugality is being heralded in numerous circles. This is certainly something we’ve been discussing around here for a couple of months. It is worth revisiting what this might mean for the strategies of firms.

Firstly, it is worth noting that simply chasing frugal shoppers is not a strategy in and of itself. There needs to more to it.

It would seem that the catch-all phrase frugal for a raft of different consumer behaviours, including:

– reductions in overall spending
– re-prioritisation of preferences
– pursuit of overtly cheaper products
– re-conceptualisation of some items as indulgences (and thus avoided by some and cherished by others)

tightrope walking furgalAs such, firms need to tread a very careful path. They must consider the extent to which their consumers have altered in terms of willingness to pay. They may need to adapt to having fewer customers and/or lower margins (as prices adjust downwards), new competitors (as perceptions and price points shift) and more successful substitutes.

Of course, not all consumers will act in the same way, so firms must navigate some confusing messages from the market. Sticking to one’s guns rather than sending a completely new message might work, as long as this behaviour is simply transitory. As noted earlier, certain firms are better positioned to make hay while the sun shines (or doesn’t) if their offerings are undoubtedly more miserly.

While it is an extremely difficult time for start-ups seeking financing, it is still potentially a very fruitful time for those who can come to market with ideas that appeal to this new and potentially pervasive mindset.

In a gratuitously nepotistic plug (the business is run by my cousin), perhaps a service like Rentoid, which connects renters of items, is well-suited to these times. So too might anything else that caters to shifting behaviours (e.g. price-comparison services, home-catering).