Today’s Vista Group lunch followed its usual pattern as we jumped from one idea to another in bewildering rapidity:

• Will kerning save the world? Every technical elite has its own jargon and in-jokes. Kerning is a graphic-designer term for adjusting the white space between letters.  Apparently, the question is a good one to have printed on a T-shirt to wear when talking to art directors at ad agencies.
• Didn’t they read what I wrote? We all had recent examples of how some people misread even the shortest communications only taking in words to support their pre-conceived prejudices and assumptions about the writer.  Of course, the use of deliberately-provocative headlines can increase that risk.
• How does Jack Yan get to be a judge in both the Miss New Zealand AND Miss Sweden beauty pageants?  Being a fashion magazine publisher didn’t seem to explain it to the other gentlemen present.
• How does Chanel manage to retain its cachet of luxury and exclusiveness, while Pierre Cardin, Yves St Laurent, Gucci et al have cheapened theirs?  “Expensive” does not mean “exclusive.”
• Does your market offer determine your target market, or does your target market determine your market offer?  This is a chicken and egg question.  You can go either way.
• Does branding only work on cattle? No, was our unanimous conclusion to the idea behind Jonathan Salem Baskin’s book. But we would say that, wouldn’t we?

You’ll have to take my word for it that the transitions were seamless and logical.

Imagine meeting some friends and casually dropping into the conversation that you’ve started a power company. That was the scenario at this month’s Vista Group lunch, and it neatly illustrates how the Internet can enable very lean businesses to be built.

The cost of power delivered to your home or business is made up of various components:

• A wholesale energy spot price per kilowatt-hour - what the electricity costs to generate at any time; highly variable (it changes every half hour in NZ) and driven by demand, supply, the weather and the cost of generation, fuel, and alternatives such as wind and water availability.
• A hedging component -  basically averaging the cost of wholesale electricity to the retailer and you; those nasty derivatives being badmouthed in the media are actually useful financial instruments in real commerce.
• A variable transmission line cost for moving the electricity from the power generating station to your area.
• A variable distribution cost for local distribution from the  transmission substation to you.
• A fixed distribution cost - to cover the cost of simply being connected to the network and having capacity to supply a basic level of supply to you.
• And finally a retail margin for servicing you, the customer, and taking care of all of the above.

When I ran a power company, that retail margin was less than 10% of the price of electricity, from which you had to cover your wholesale market operations, hedging costs, customer service costs, metering costs and make a profit. With industry reform, the transmission and distribution businesses were separated from the generating and retail businesses. The inevitable outcome was that the only players in electricity retailing were power station owners - the generators.  Everyone else exited the retail business because the margin was just too thin to cover all the costs of running a pure retail business and make a profit.

Until now, that is.  If your customers can service themselves via the Internet, all you need is a website and an ability to buy “delivered electricity” inclusive of all the other costs of supply - a facility now offered by some generators.  The collaborative stance of generator-owned PowerShop was a key factor.  Vista Group member Natalie Ferguson is part of a small team who cut a deal with a generator and built a web-based electricity retail business in just 3 months! Even though the retail margin today is even less than when I was in the industry, it is now possible to make a buck, because the business costs little to build and little to run. (As an aside, PowerShop has surprised many web-savvy business people with its heavy TV advertising.  Good PR would have probably been more effective and a lot cheaper; deep pockets are not always good.)

Web-based electricity retailers like Flower Power and stable mate Green Power are almost the ultimate in lean businesses, since they will compete on branding, product design, price, user experience. etc. without actually generating or delivering electricity, and with minimal live human staffing. It’s too early to say which, if any, business models and strategies will work, but what is clear is that businesses like them probably wouldn’t be built without the Internet.

Yesterday the Vista Group (sans NF) celebrated its first anniversary (approximately) with a somewhat raucous discussion on advertising using humour. While we could all remember great ad campaigns that used humour very effectively, we also had stories to tell of ads that were very funny, but the product and brand messages were lost or mangled.  One current example we discussed is a TVC with a couple dining in a restaurant; the woman tells the man that she’s leaving him, but he can’t hear her and bluffs along saying “Great”. OK, we got the fact that it’s for a hearing aid, but none of us could remember the brand even though it was put up twice (Google tells me it’s Widex), and in any case the joke was negative on doing something about hearing loss.  So the brand was lost and the message was mangled. Most people respond better to ads that make them feed good about the product and the brand, and which leave a clear understanding of a positive message.  The Widex ad did not, despite it being mildly humorous. Contrast this with the Toyota “bugger” ad; strong positive brand personality which appeals to self-deprecating Kiwis and a clever demonstration of the product’s qualities (strength and utility). (Unfortunately I can’t find the Barry Crump cliff ascent ad).

Our message: humour in advertising works when the joke positively reinforces the message and the brand, but you’re wasting your money if the joke obscures them.  Meanwhile, here’s one that falls between the two extremes.  It was hilarious and everyone talked about it, so the cheeky brand personality message (for scratch lottery cards) did get through.

The Vista Group (sans Mark Di Somma) met yesterday for its last lunch of the year, with everyone dining on a beautifully light and fresh vegetable and pasta dish (except JY again ordered chorizo with his). As it was our Christmas lunch, we had little business-related chat.  Actually, I lie. The real reason is that I forgot to nominate this month’s topic until just before lunch: “What difference will Google Street View make, apart from  better travel directions and supporting real estate sales?”  Add to the short notice the fact that Jack Yan hasn’t even seen Street View, and it made for a very short discussion. Anyway, for those who haven’t already seen it, here is Vista on Google Maps Street View. (Try the rotational view too).

Natalie Ferguson and I both really like Street View.  Google’s Satellite View was a big improvement on conventional maps, but Street View adds a powerful new dimension to geophysical information. We can foresee a time when the top locations will have live feeds, rather than static images which are out of date as soon as they are taken.  That means outdoor webcams might finally have a convenient and common access point. Imagine seeing for yourself the weather or road conditions ahead of you, or how the beach is looking right now; but there are undoubtedly many more applications and opportunities, eg. emergency services.

Of course, this just gives the great-Google-conspiracy theorists more to worry about.  I’ve already heard the claim that Google is really building SkyNet (cue Jack impersonating Arnie).

Sitting at a roadside table in the sunshine eating fish, the Vista Group pondered the parlous state of the Big 3 US auto makers:

• Getting his retaliation in first, Jack Yan had already written up his perspective, which essentially supports some form of federal bailout, with conditions attached to force reform.
• Mark Di Somma favoured Chapter 11 administration (reorganisation),  to take the creditor pressure off while the companies restructure themselves. Companies often manage such processes themselves.
• I, being somewhat cynical about the industry’s failed makeover attempts over the last 30 years, argued that Chapter 7 administration (ie. send in the receivers liquidators) is the only way to achieve the required level of change, effectively breaking up these giant companies into more nimble businesses, because they won’t do it to themselves. I’m not alone in this; Lance Wiggs has expressed similar sentiments.
• Natalie Fergusson didn’t have strong views on industry restructuring, but hoped that Hummers won’t be made anymore.

As usual, we failed to stay on topic, with diversions into well-meaning but crass attempts to serve ethnic customer groups, hitherto undiscovered programming gems on satellite TV, and how hard it is to write a pithy description of your own business. We suggested that Jack runs as the non-aligned, non-parochial candidate for Executive Mayor of Greater Wellington, if and when that miracle of local government reform ever happens. And Jack somehow managed to have his linguini ai frutti di mare made with chorizo sausage.

PS I forgot we also covered social network sites.

My Vista lunchmate Jack Yan has just introduced me to the ideas of black libertarian scholar Dr Thomas Sowell, of Stanford University.  This quote rang a lot of bells for me:

“… the ignorance of Ph.D.s is still ignorance and high-IQ groupthink is still groupthink, which is the antithesis of real thinking.”

I’ll have to read this guy.

The October lunch of the Vista Group followed its usual rambling course, from operating virtual organisations to virtual IT to online banking to the BNZ Bank rebadging, the transformation of Fisher & Paykel into an international prestige appliance brand and F&P’s need to transfer the allegiance of its loyal home NZ market to its new mid-level Elba brand.

Our conclusions (not necessarily unanimous):

• In the right context, virtual business teams are possible, and may be preferred or even necessary, but they work best when there is a genuine community of interest which sustains and encourages the virtual group to keep in touch and collaborating. Genuine creativity and high performance delivery, combined with mutual respect and selfless peer support, seem to be common elements of virtual groups that sustain themselves over the long term.
• ICT technology and services are rapidly reaching the point where many small and mid-scale businesses should not need to operate their own ICT (servers, software, communications, support, etc); but most don’t know that yet. The ICT industry still has a major packaging, integration and useability job to do before “cloud computing” really is a viable, easy- to-buy, easy-to-implement, whole-of-business solution. But it’s not too far off.
• Having had a few weeks of the new BNZ Bank logo, we have started to sort of like it (note the lack of enthusiastic praise), but thought the back story to the change was implausible, irrelevant and showed a serious case of someone believing their own bullshit. It’s a rebadging job, but it’s still the same old BNZ,
• F&P Appliances (a great company, by the way) really is rebranding its mainstream appliance range in NZ with Elba, keeping the Fisher & Paykel brand for top-end prestige products it markets globally (e.g. DishDrawer). It’s a reasonable strategy and follows the text book for brand transition, except that the ad theme “just does what it should” doesn’t show any brand personality, but instead emphasises the lack of one. Maybe that’s the point right now, but building a long term Elba personality could have begun from Day One.

All this and food, interspersed with Jack Yan’s fake Edinburgh accent, which didn’t fool our Scot waiter for a second. You can’t take some people anywhere.

The Vista Group reconvened yesterday for the first time in several months and, over vegetable risotto and chorizo pasta, addressed the topic of local government and advertising, prompted by the launch of a new logo for Auckland, New Zealand’s largest city. Being a Wellington-based group, we couldn’t resist the opportunity to put the boot into Auckland’s new logo (and we’re going to take the Ranfurly Shield off them tomorrow as well):

• Frayed around the edges, just like Auckland.
• Like a chair losing its stuffing after years of being scratched by the cat, just like Auckland.
• Like a building under demolition, just like Auckland.

Magazine publisher and font designer Jack Yan went anal over the letters U and N.  We ordered him extra chorizo to calm him down. We then put on our white hats to find something positive to say:

• Like a building under construction, a work in progress, just like Auckland.
• We liked the Asian Pacific feel of the colours.
• We liked the printed jandals.

City self promotion is regarded sceptically at best by many.  I was on a board some years ago which initiated a revamp of the successful Absolutely Positively Wellington campaign, only to fall foul of petty parochialism among Wellington’s assorted mayoralties. (We only need one, but for some reason we have 4 plus a regional council). The dumbest response was that we should rename Wellington so that their glorified suburb could promote itself separately. I hope Auckland doesn’t suffer from the same problem, but it doesn’t look likely.

I was going to write something to mark the passing of Yves Saint Laurent, one of the world’s great designers (and a genuine brand name, not some artificial creation). To paraphrase Pierre Berge, YSL’s partner (in every sense), Coco Chanel gave women freedom, but YSL gave them power. However, my Vista chum Jack Yan has written something far better than I could, so over to you, Jack.

Today’s Vista Group lunch discussion roamed free as usual (beauty pageants, chick-lit, Benny Hill’s dad and condoms all got a mention). However, I did get some thoughts from the group on the latest move by Apple to object to New York City’s trademark register application for an apple logo for its campaign to improve New Yorkers’ eco-habits. To me, the objection looks totally without merit:

1. NYC wants to use this special logo to promote green behaviour, which is a million miles from the uses of Apple’s trademark;
2. The logos are nothing like each other; and
3. The killer for me: New York City is the original Big Apple (from way before one S. Jobs appeared on the scene).

The massive branding brain power of the Vista Group concluded that there are 4 possible explanations:

• Apple really believes it has a valid objection;
• Apple’s IP lawyers are on retainer, and routinely challenge any trademark applications mentioning apples, to justify their fees;
• Apple knows its objection is groundless, but is doing it to scare off any smaller players who might consider using apples in their branding, but don’t want to pick a fight with Apple;
• Steve Jobs is the ultimate showman, and this is just another brand-building stunt.

I leave it to you to reach your own conclusions.

Despite my feeble attempt to create a theme for this month’s Vista Group lunch, it somehow degenerated into a discussion of famous put-downs and how bad taste jokes seem to quickly follow any news of others’ misfortunes. I was reminded that the correct term for this is schadenfreude, not gesundheit. (No, I am not posting any links to Heather Mills joke pages.)

However, we did have one useful outcome - we met Natalie Ferguson, another Wellington-based entrepreneur and business blogger. Natalie’s web-design business, Decisive Flow, makes simplicity and usability hallmarks of the work she and her team do for for clients around the world.

One of our group, Lucire magazine publisher Jack Yan, is anally-retentive passionate about character fonts and was very complimentary about the design of Natalie’s blog site. The rest of us agreed it looked lovely, but also focused on the content. Natalie, who co-founded PlanHQ before focusing on her current business, writes about the day-to-day joys and frustrations of her business life, plus anything else that grabs her attention.

The other highlight of the lunch was the look on Mark Di Somma’s face when I told him the unexpected news that a company, at whose planning conference we are both presenting next week, has chosen to be technology-free for the day. No PowerPoint! Good - someone else has to completely rework their presentation and rely primarily on the power of the spoken word. Is there a word for enjoying the misfortune of others having to share in yours?

Over lunch at Vista Cafe again today, business bloggers Jack Yan, Mark Di Somma and I had another ramble around the world of branding and strategy. Between Jack’s scarily accurate impressions of UK ex-PM Tony Blair and Mark’s stories of outrageous conference speech openers. we did actually talk about some other stuff.

• Do methodical cook-book approaches to creating brands work? Is Kevin Robert’s Lovemark idea a valid branding concept or just adman hoopla? And can you deliberately turn your brand into a cult icon?
• Does your brand have the power of ‘The Nod‘? (thanks for the link, Mark). Do you see a stranger in the street and nod to each other to acknowledge being co-customers of the same brand? Think Harley Davidson riders or Mercedes SLK drivers (like Jeremy Clarkson and me, except his is the top of the range model and mine, um, isn’t).
• How lingerie branding works - think Elle MacPherson versus Trelise Cooper; the difference is more in the brand personality and not so much the product.
• This morphed into intellectual property suits and when they’re a wise move or not.

The picture shows fashion mag publisher Jack explaining lingerie branding (really). Draw your own conclusions! By the way, guys, since it looks like we’re now a regular monthly date, I’ve dubbed us The Vista Group. Do you think we’ll get sued?

Sorry - couldn’t help myself with that headline. I’ve enjoyed a stimulating lunch today with fellow business bloggers Jack Yan and Mark Di Somma. We only recently realised we all live in the same city, and this was my first meeting in person with them (at Vista on Oriental Parade, on a beautiful sunny day in Wellington; I recommend the smoked fishcakes and the coffee is superb).

There was no agenda for our meeting other than getting to know each other. Both Jack and Mark have lively bubbly personas and the conversation somehow covered how we got into blogging, the emotions we felt when visiting major battlefields, funny stories about airport incidents, and much mutual shaking of heads over timid strategy making.

We all feature branding strategy in what we do, albeit from different angles. Jack is publisher of fashion magazine Lucire, co-author of “Beyond Branding” and a consultant. Mark is a also a branding consultant, especially in business sectors facing seismic change. I focus on “the market offer” and how that is carried through into every aspect of strategy and execution.

Will anything come out of this? Who knows, but we’ll definitely meet again soon.