How Tweens Discover Videogames

I stumbled across my notes from the Ypulse! Mashup last month. For those of you targeting that lucrative Club Penguin demo, here's how kids discover videogames (courtesy of a youth marketing research agency presentation):

53% find out about games from TV
50% find out about games from their friend

Obviously, there's a cross-over between the two groups. I know Habbo Hotel, the virtual world for tweens and teens, advertises on TV somewhere, probably Europe, since I found this on Youtube:



I'd love to know their ROI on TV advertising. But the stats above indicate it's the right move.

The Benefits of Direct Competition

A new competitor for Tenuki emerged last night. From totally off the radar. With a service that is very close to ours. And they're ahead of us. Aargh.

You might say "wow, that sucks for you." Well, yes and no.

Yes, it does suck, mainly because they have a lead on us, and if they executed perfectly, they could tie up a significant portion of the market. But no one executes perfectly.

No, it's kinda great. It does the following things:

• it validates our idea to investors.
• it forces us to focus harder
• it makes marketing cheaper

That last point needs a bit of explanation. The first step of marketing is to educate the consumer that they have a need. When you're launching a novel service, it's usually the case that the consumer doesn't realize that they need that service. For example, did millions of Americans realize they "needed" to send text messages? Of course not. No one was rioting in the streets for the ability to text. However, imagine if you took away that ability now. I'm pretty sure the White House would be torched.

Right now, people don't realize they need what Tenuki and our competitors are offering. Which means we need to spend money to educate them about their need. Sounds cynical, right - educating the consumer that they have a need. Probably why marketing has a bad name.

The early entrants to a market have to spend a larger amount of money on consumer education. In fact, this is usually the most expensive phase of marketing plan. These kind souls pave the way for later entrants who can spend all their money advertising the qualities that make them superior to their competitors, knowing that the consumer is already aware of the type of service that they provide.

So to our competitors: thanks for taking one for the team.

And on the PR front, journalists much rather write about two competitors slugging it out in an interesting new space, then about a company dominating its space. By the way, if you ever want some ink, just create a bitter rivalry - it worked great for Tupac and Biggie...oh right...hmm...er, well, um, it worked great for P. Diddy and Suge Knight (the guys who owned the record labels).

I could talk about marketing strategy all day, but unfortunately the homeless guy sitting behind me at Starbucks has decided that somebody has screwed him over and that someone needs to pay. Time for Bret to go.

Take-away Notes from the CommunityNext Founder's Panel

Since I didn't actually attend CommunityNext, I'm beholden to Guy Kawasaki for posting a clip of the hour-long panel on his blog. And yes, I realize that CommunityNext happened about three weeks ago, so this isn't news by any shot, but rather a service for someone who doesn't want to sit through the hour-long video.

Anyway, here's the upshot. The panel featured Akash Garg of hi5, Sean Suhl of Suicide Girls, James Hong of HotorNot, Markus Frind of PlentyofFish, Drew Curtis of Fark, and Max Levchin of Slide. Basically, they gave some general info and advice about starting a social-based website.

The key takeaway: no one started their sites with the intention of making money (except Max). PlentyofFish was an attempt to learn .Net. Fark started with a picture of a squirrel with giant balls, simply because Drew Curtis thought it was funny. SuicideGirls was started as a proof-of-concept for a social sports network. HotOrNot, to amuse friends in cubes. Hi5, to meet chicks.

The second takeaway: only PlentyofFish does any marketing. However, Max Levchin had a very astute insight about the changing nature of viral marketing, which I will paraphrase here.
Viral marketing started with people sending links via email to their friends. Then, that was replaced by telling people about things via IM. Now, people use the Myspace to embed widgets from other cool sites into their pages. Max asks, what's next? He thinks that's where the next huge company will emerge from and I think he's correct. If anyone has any thoughts, please leave them in the comments section.

Takeaway 3 (courtesy of Guy Kawasaki): Five of the six companies believe marketing is a waste of money, and yet their revenue model is based on advertising. Beautiful.

You can find other highlights from the conference on Alan Graham's blog.

Gaydar: Why You Can't Trust the Japanese Market

I overheard a pitch in Starbucks that was basically a location-based profile/meeting service. And I thought does anyone remember Gaydar? A company that sold beepers that activated whenever another beeper was within forty feet. Obviously, they were marketed to gay men. It failed.

The interesting thing to me is that Gaydar was very successful in Japan, except it was marketed to straight people. Over 100,000 units were sold.

The reason I find this interesting is because a lot of the next-gen mobile apps show up in Japan first. Japan is way ahead of the USA in terms of mobile usage. I suspect a lot of people look to Japan for business ideas that can be adopted for the US market. I mean, if it worked in Japan, then surely it'll work everywhere, right?

Except it doesn't. Japanese culture is REALLY different than American culture. In Japan, you can get your nails manicured by a vending machine. Japan has a popular movie series called Rapeman, it's about a hero who rapes women who have spurned the advances of lonely salarymen. It was shown at the local cineplex.

Japanese have strict social customs. Every interaction is highly ritualized. I suspect the rising mobile culture allows the Japanese to circumvent those customs and that's a big reason for the popularity of social mobile apps. In the US, social interactions are not restricted. I want to talk to a girl in a coffeeshop, I say hello. No one thinks I'm crazy, unless I happen to be homeless.

My point is this: be careful when you look to Japan for the validation of a market, other companies have been burned, it might happen to you, too.