Posted by: In: Uncategorized 19 Jan 2015 0 comments

Sep 8, 2014 by Eric Martin



Why a 13-Year-Old Strategy Makes Apple A Great Company

Apple’s share price has been on a rapid ascent, having regained nearly all the value it lost in 2013, helped in large measure by stock buy-backs. Those who feel the stock is currently over-valued should consider that the company’s P/E Ratio has, in fact, been hovering around its five-year average.

As always, the question one must ask is whether the current valuation judged by share price truly reflects the long term value of the company based on it strategic foundation and capacity to execute.

Last year, as APPL’s share price was losing luster, I wrote the following piece:

As has been widely reported, sales of Apple’s iPhone have come under assault by terrific devices from companies like Samsung running Google’s Android OS. Though market share has held up in the US, interlopers are stealing the show outside North America. To read the news, Apple’s brand is losing its luster and, along with it, the company its lofty valuation.

Even an Apple fan has to acknowledge that iOS, introduced in 2007, is showing its age. Maybe it’s a matter of familiarity making the heart go wander. Maybe it’s the customization of Android or the bold, graphic live tiles of Window Phone 8. Somehow, as easy as it is to use, the iPhone feels just a touch dated.

For many fanboys, this doesn’t matter much. Even a child relying on intuition can operate the iOS. The iPhone rarely misbehaves. Oh, and there are the 700,000+ industry-leading applications that are the lifeblood of the device’s attraction.

But what really sets Apple apart from its competitors isn’t the stunningly well-designed hardware. It’s the ecosystem that connects all Apple devices through the cloud. For some of us, our first experience with the Apple ecosystem dates back to 2001 with the purchase of the original iPod. The brilliance of that device wasn’t simply the terrific industrial design, but the software that made buying and using music easier than ever before. The strategy upon which that first Apple music player was built is over 13 years old. Yet the importance of the ecosystem that was its foundation remains one of the company’s biggest assets.

Sure, one can download music from Amazon and apps from Google. With a little effort you can even coordinate devices while getting work done using Google Docs. But somehow, it just never seems as easy—as magical—as Apple.

Add to that an installed base of hundreds of millions of iTunes users, over 200 million of whom use the service through the cloud, and you have a massive, sticky infrastructure. If you have bought in to the Apple world-view, dismantling your services and recreating them on a series of new devices is simply a lot to ask. And, you are unlikely to be able to transfer some of your content at all (playlists pose quite a challenge for some people.)

So, Apple needs a refresh. Its products are not winning the day internationally. But, Apple should not be written down—much less written off. It remains a global leader in profitability. Its brand is ranked next to Coke as the world’s most powerful. And, with hundreds of millions of credit cards having been registered with iTunes (I can even buy products at an Apple store today using that account without ever speaking with an Apple employee), it stands poised to reshape the world of digital commerce.

In short, Apple doesn’t have forever to reach a new level of innovation. But it does have plenty of time and cash to get there.

On the eve of Apple announcing a new round of products—possibly the most exciting set of devices in years including the addition of a new form-factor, the iWatch—keep in mind that Apple’s power has never rested on devices alone. Rather, it is the foundation of an ecosystem developed over a decade ago that gives the company its power…and its great future value. Tomorrow, as captivating as it will be to see sexy, shiny hardware, what will grab my attention is whether Apple manages to disrupt the dollar bill.

Eric Martin is the founder of 80amps for Enterprise and 80amps for Startups (a consultancy and incubator, respectively) and the Director of the University of Richmond’s Innovation and Entrepreneurship Program. Eric can be reached at Follow eric on twitter @eeeemartin and Linkedin

View this article on LinkedIn here.

Posted by: In: Expert Opinion 18 Jun 2014 0 comments



Regulated industries beware. Disruption is headed your way, too. Companies whose incumbency has been protected by regulation face devastating competition from entrants none too concerned with pesky legalities.

Michael Porter, in his seminal book Competitive Strategy, proposed a model of five forces that can be used to analyze the attractiveness of an industry. While in business school at Harvard, I had the good fortune to address with Porter, a faculty member there, what I believed to be an important SIXTH force—regulation. We were discussing the airline industry at the time, and I argued that since some players yield relatively more influence over regulation, and since regulation sets the boundaries of the playing field, one cannot look at only Porter’s five forces to accurately describe a competitive setting

Over the subsequent two decades, scofflaws, aided by technological advances, have spurred disruptive innovation at a staggering pace. Regulation, viewed in Porter’s earlier works as of little competitive concern, is now at the heart of the matter.

Unsurprisingly, incumbents in the industries under assault don’t go down without a fight. Instead, they turn to the weapons that helped structure an industry in their favor in the first place. What they desperately want is inertia. They want the object at rest to stay at rest. It’s not that they are anti-innovation. They are anti-cataclysm.

The rules that built the industries were often designed to protect consumers from the risks posed by asymmetric information, monopoly power, or utter disdain for their well being. Certainly, some regulation was over-done or even wrong-headed. But, for the most part, the rules provided a safer, fairer marketplace.

Companies worked hard to shape regulations in ways that would not disadvantage them relative to competitors. If possible, advantages were sought. In the end, some equilibrium was reached—a set of boundaries within which Clay Christenson’s “sustaining innovation” could emerge, but where discontinuous change was unusual. Investments under these circumstances could be made with less risk. Profits were more predictable. Management approaches and organizational structures emerged to reliably turn out like quality products and services at standard costs.

Competing and prospering wasn’t easy, of course. But the rules of the game were better understood.

Over time, technology was adopted by incumbent competitors creating mainly marginal improvement at the customer level and to generate more profound impacts through internal efficiency. The spoils of these gains benefited the owners of the most powerful firms, at least until all the majors adopted the same, basic approaches.

Then, in the 1990s, technology not only advanced in power. It simultaneously rapidly decreased in cost. The competitive world became a bit more egalitarian.

What was the impact? What IS the impact?

  • Information asymmetry has become information transparency.
  • Monopoly power is shaken by upstarts.
  • Consumers’ well being relies more on individual diligence than government paternalism.

What emerges?

  • Medallioned taxis challenged by on-demand rides from Uber and Lyft.
  • The local record shop upended by file sharing and the iTunes Store.
  • The Bell System (once serving jacks in the wall) replaced by Apple and Samsung in collaboration with Verizon Wireless, Virgin, and Sprint serving customers who no longer use wire-line telephony.
  • Hotels challenged by homeowners and apartment dwellers renting their accommodations by the night through Airbnb.

Even old-line businesses like automobile manufacturing and sales are impacted. Tesla, the darling of the eco-friendly and growth investors alike, has run straight into incumbent protectionism. The company wishes to do what other successful companies have done of late—sell its innovative products directly to consumers. Yes, I know. Crazy talk.

The problem isn’t that selling products to consumers directly is at all radical. The most successful retail innovation of the last decade is, arguably, the (vertically integrated) Apple Store, known at once for terrific customer service and outstanding warranty support. The issue is that existing auto dealers are attempting to protect their business model from cataclysm. They fear, with good reason, that antiquated automobile consumer protection approaches, if shown unnecessary (or even inefficient: see ), would lead to the unraveling of the entire distribution system on which their model relies.

So, instead of competing through their own innovation, automobile dealers are seeking legal and legislative intervention to secure the rents they earn from an industry historically protected by government action.

What makes these challenges troubling to incumbents is that consumers are demonstrating demand for the upstarts’ models in droves. The writing is on the wall. Industry dynamics are in flux. Regulation provides only fleeting refuge. Sooner or later, that old, warm, protective blanket will give way. And, it should. In a market economy, protecting industries’ sunk costs of adhering to outdated regulation is inefficient and anti-progress. Ironically, in these situations some measured phase out of regulation is actually supportive of consumer interests.

The problem for incumbents is that their market strength insulates them from upstarts for quite some time. Why is this a problem? Because the upstarts’ growing consumer support sneaks up on industry stalwarts. By the time incumbents realize that they face real threats, their ability to effectively respond is impaired. Too little is able to be done too late. And, like many telcos and record labels, the incumbents wither.

Whether regulation should have been included in Porter’s “forces” from the beginning is an open question. What is indisputable is that companies who continue to overly rely on regulation instead of their own innovation to secure their competitive position are running a substantial risk.

To learn what three industries are primed to be disrupted next, check back for the next post to this column.

View this article on LinkedIn here.

Posted by: In: News, PR 06 Jan 2014 0 comments

charles-merritt_170x170Our own Charles Merritt was included in Forbes magazine Top 30 under 30, a tally of the brightest stars in 15 different fields under the age of 30.

“Partner at 80amps, a company that assists startups by providing a combination of seed capital and professional services in exchange for a stake in the company. He has implemented marketing strategies at and that fueled growth at each firm. He has also served as a video producer, managing video journalists for an online media startup.”

Read the article here.

Posted by: In: Insight 15 Aug 2013 0 comments

CX to Brand v1.004

When companies find their growth falling behind goals or, worse yet, investor expectations, executives frequently turn to rebranding as a possible solution. If what leaders mean by rebranding is something more than a new advertisement or refreshed logo, they are on the right track. Messaging initiatives are only one component of how a customer comes to know a company. Often, leading with messaging is the tale wagging the dog.

Take, for instance, Yahoo.

The company’s “30 Days of Change” campaign is, despite the headlines, not “rebranding.” Referring to it in this way misunderstands what a a brand is. Simply put, a brand in not what you SAY about yourself, it is what a large group of customers collectively FEEL about you. Individuals collect over time a very broad range of inputs about what a company or a product stand for. The sum of these Customer Experiences (“Cx”) inform an individual’s gut feeling. And when those gut feelings are widely held, you have a brand– for better, or worse.

Yahoo’s brand isn’t mainly about its logo (which is a form of messaging– a component of Cx). It’s about it’s services and their relevance, whether personal or social. Interestingly, it may be the case that the sum of Yahoo’s parts– it’s non-Yahoo branded investments like Alibaba and Tumblr– may be more powerful than the whole under a Yahoo banner. What the 30-day campaign is about is setting the stage for a conversation around the brand Yahoo which, from all indications, will be founded on new substance– in particular, a dramatically refocused set of mobile offerings. In the end, a new logo is quite unlikely to revive Yahoo’s growth. Yahoo is simply hoping to warm the audience to a “new” Yahoo that will emerge as, they hope, more appealing products are introduced over the next 24 months.

There are three key questions any company must ask when examining their customers’ experiences and their brand impact:

1. Who are we?
2. What do we do?
3. Why do we matter?

Think of these questions from the outside in. Who do OUR CUSTOMERS think we are? What do OUR CUSTOMERS think we do for them (this is often something quite different than simply the sale of product or service)? And, most importantly, if you were to disappear overnight, what would OUR CUSTOMERS feel? What would they miss? Anything at all?

If Yahoo was gone overnight, what would you miss? How would you replace the services from Yahoo you now utilize? For many core (and dated) Yahoo services, legions of substitutes exist. But if you run a blog on Tumblr, your alternatives are more limited and your switching costs higher. That’s why Mayer, from a Customer Experience perspective, knows she has to work on the product through acquisitions and acqui-hires. The 30 Days of Logos is just setting the table. The meat has to follow, or Yahoo will be having one poorly attended dinner party.

What do your customers deeply value that you provide at least a little bit better than anyone else? What would they miss if you are gone? If you need to accelerate growth, think about Cx broadly, then narrow in on those few touch-points where you can out-perform your competition. Invest in strategy and operational fulfillment along those dimensions. Once you are delivering superior Customer Experience, you will have a compelling story to tell.

Posted by: In: News, PR 22 Jul 2013 0 comments

Eric Martin, Founding Partner and CEO of 80amps
Topic: Branding from the Outside In: It’s Not What You Say, It’s What THEY Think

The Expo Luncheon speaker Eric Martin is co-founder of 80amps, the Richmond-based incubator he started with the Martin Agency, one of the country’s top advertising agencies. Eric provides new venture guidance the the Martin Agency and a host of local and national startups. Eric spoke about the ways in which Customer Experience (“Cx”) is built, why it matters so much in the age of information transparency, and how to gauge if your Cx is driving brand value. (Click to download the 80amps/Boost Cx Growth Inventory.

As a professor of entrepreneurship and innovation at the University of Virginia’s McIntire School of Commerce, Eric co-founded the Galant Center for Entrepreneurship. He has also lectured at VCU’s Brandcenter on driving wealth creation through creativity. Currently, Eric advises clients throughout the country on issues of corporate growth, product development, and innovation through his firm, Boost Partners. Eric’s 20-year career includes successful operating experience as an entrepreneur, chief executive, strategist, and change agent.

Posted by: In: Expert Opinion, News 07 Feb 2013 0 comments

Eric Martin was featured in MSNBC’s story on Paula Deen.  Read the story below:

Bill McCay | WireImage | Getty Images
Heat’s On in Paula Deen’s Kitchen: Smithfield Drops Chef

While the saying goes, “if you can’t stand the heat, get out of the kitchen,” that’s easier said than done for a woman who has built a food empire out of a humble, Southern home kitchen.

Fallout for the celebrity chef Paula Deen continued Monday, as Smithfield Foods announced it has ended its partnership with Deen after it was revealed she used racist language.

“Smithfield condemns the use of offensive and discriminatory language and behavior of any kind. Therefore, we are terminating our partnership with Paula Deen,” the company said Monday in a statement to CNBC. “Smithfield is determined to be an ethical food industry leader and it is important that our values and those of our spokespeople are properly aligned.”

Court documents revealed the food celebrity famous for high-calorie Southern cuisine has used racial slurs and tolerated discriminatory jokes in her various business dealings. Deen has since posted three online video apologies. Fans, meanwhile, are flooding social-media outlets to defend their queen of Southern cooking.

Smithfield’s decision to ax its partnership with Deen comes after the Food Network on Friday dropped Deen, and said it would not renew her contract, which expires at the end of this month. Her cooking shows have been a staple on that network for years in which fans watched her fry butter and use donuts for hamburger buns, hamburger included.

(Read More: Paula Deen’s Fans Take to Social Media to Defend Her)

Deen’s Empire Worth an Estimated $6.5 Million Annually: Analyst

Marshal Cohen, chief industry analyst for The NPD Group, estimates Deen’s empire to be worth around $6.5 million annually which includes her retail and contract revenue.

Beyond her food network contract, Deen has product deals with many companies from big pharmaceuticals to big-box retailers. Deen’s name is associated with a diabetes drug by Novo Nordisk. Deen previously disclosed she suffers from diabetes.

Deen’s vast product deals also span a who’s who of retail: Macy’sSearsWal-MartJCPenney and QVC (owned byLiberty Interactive). Many of those companies are now evaluating their relationships with the well-known chef.

In a statement to CNBC, Paul Capelli, QVC vice president of corporate communications, said: “QVC shares the concerns being raised around the unfortunate Paula Deen situation. QVC does not tolerate discriminatory behavior. We are closely monitoring these events and the ongoing litigation.”

“We are reviewing our business relationship with Ms. Deen, and in the meantime, we have no immediate plans to have her appear on QVC.”

Sears Holdings tells CNBC they are “currently exploring next steps as they pertain to Ms. Deen’s products.”

Bad Celebrity Behavior in a Digital Age

As companies address the Deen situation, the public jury on her racial comments is still out.

Americans’ willingness to forgive celebrity misconduct often depends on whether the transgressions occur in the particular field the celebrity “plays in,” said Eric Martin, a partner at consulting firm Boost Partners.

“Tiger [Woods] rebounds, as does Manti Te’o, in a way that Lance Armstrong or Pete Rose never will” because the misconduct by Rose and Armstrong was in their respective industries, Martin explained.

“Martha Stewart’s insider trading conviction was far enough outside her field of celebrity that she could reemerge,” Martin said.

In Deen’s case, the public is not only reassessing her food business and dealings—but its star, who built an empire on a warm, giving public persona.

“Paula Deen’s celebrity isn’t simply about her food. It was also about her being the loving mom/grandma people admired. She had celebrity for being a nice, decent, giving person,” Martin said. “Using racial slurs, no matter where one is from, but particularly in the South, strikes at the very heart of that image.”

But perhaps unlike some previous celebrity flubs, Deen’s missteps are happening in a rapid-fire, social-media age, where judgement via Tweets can be swift.

“Damage can happen at hyper speed in this era of social media, and the blogosphere,” said Marty Brochstein, senior vice president of the International Licensing Industry Merchandisers’ Association.

Brochstein also agrees with Martin in that Deen’s controversy could be especially damaging. “Anything that even hints at racism is particularly injurious to a brand,” Brochstein said.

Brochstein said it’s important for companies that have business arrangements with Deen to react—but not over react.

Martin, however, thinks Deen’s image may have taken too much of a hit already. “I think her star is quite tarnished and will never regain its luster. She certainly can redeem her reputation among her core followers,” Martin said. “But I do not see her empire being rebuilt,” he said.

—By CNBC’s Courtney Reagan


Posted by: In: Uncategorized 20 Oct 2012 0 comments

Boost’s Eric Martin was asked by CNN to give expert opinion on Lance Armstrong doping charges.  Read the article below:

Photos: Lance Armstrong over the years

Photos: Lance Armstrong over the years

Doping scandal costs Lance Armstrong sponsors, charity role

For years, Lance Armstrong carried a growing burden of doping accusations up increasingly steep hills, accumulating fans, wealth and respect along the way.

On Wednesday, he crashed.

In one day, the renowned cyclist and cancer survivor lost a major endorsement deal with Nike — once worth millions of dollars — and the chairmanship of the cancer charity he founded 15 years ago.

While stepping down as chairman of Livestrong was Armstrong’s idea, losing Nike’s support wasn’t.

Opinion: ‘U.S. Postal doping predates Armstrong’

Dempsey: Armstrong doping a turning point

Cataloging Armstrong’s fall from grace

Hamilton: I doped for Lance Armstrong

Nike severs ties with Lance Armstrong

Nike, which initially stood by Armstrong, dropped him Wednesday with a terse statement citing what it called “seemingly insurmountable evidence” that he participated in doping.

Hours later, brewery giant Anheuser-Busch followed suit, saying it will let Armstrong’s contract expire at the end of the year. Nike and Anheuser-Busch said they still plan to support Livestrong and its initiatives.

The American Cancer Society, which has had a long relationship with Armstrong, said only that it would continue to collaborate with Livestrong.

Armstrong walked away as chairman of the Livestrong cancer charity “to spare the foundation any negative effects as a result of controversy surrounding my cycling career,” according to a statement posted to the group’s website.

He will remain on the charity’s board of directors, but he will turn over the reins to founding chairman Jeff Garvey.

LIVESTRONG supporter: ‘Conflicted’ about my wristband

The move comes a week after the U.S. Anti-Doping Agency detailed what it called “overwhelming” evidenceof Armstrong’s involvement as a professional cyclist in “the most sophisticated, professionalized and successful doping program.”

The seven-time Tour de France winner has consistently denied the claims, and legions of fans and corporate supporters had backed him — until now.

Armstrong founded the Livestrong charity in 1997 after his own successful treatment for testicular cancer that had spread to his brain and lungs. He came back from the disease seemingly stronger than ever, winning the first of his seven Tour de France titles less than three years after he was diagnosed in 1996.

His success inspired cancer patients worldwide, spreading his reach far beyond the insular world of cycling and cementing his place in celebrity culture. He became rich, dated a rock star and appeared in movies. The bright yellow “LIVESTRONG” wristbands distributed by his charity became a potent symbol for perseverance in the face of adversity.

People should look to that legacy in assessing Armstrong, Livestrong’s president said.

Read more: Evidence of Armstrong doping ‘overwhelming,’ agency says

“Lance’s devotion to serving others whose lives were irrevocably changed by cancer, as his was, is unsurpassable,” Doug Ulman said in a statement issued after Wednesday’s announcement. “We are incredibly proud of his record as an advocate and philanthropist and are deeply grateful that Lance and his family will continue to be actively involved with the Foundation’s advocacy and service work.”

But a long chain of accusations has trailed Armstrong.

In 2002, a 21-month investigation into allegations that Armstrong’s team used banned substances during the 2000 Tour de France closed after finding no evidence of illegal drug use.

He later sued the author of a book that accused him of having used performance-enhancing drugs and the International Cycling Union cleared him of 1999 doping allegations in a 2006 report.

In 2010, former teammate Floyd Landis accused him of doping. Federal prosecutors also looked into the allegations but closed their case in Feburary without pressing charges.

That’s when USADA began its investigation.

In its report, released last week, the anti-doping agency made public testimony from Armstrong’s teammates and others who said Armstrong was among team members who used banned performance-enhancing substances and tried to hide it from testing officials.

The report is part of USADA’s request to international cycling officials to strip Armstrong of his seven Tour de France titles. The International Olympic Committee is also reviewing the evidence and could consider revoking Armstrong’s bronze medal from the 2000 Sydney games. Armstrong is already banned from competing in events sanctioned by U.S. Olympic governing bodies.

Armstrong has said he never has failed a drug test and has consistently denied participating in any banned practices. Armstrong’s lawyer, Tim Herman, called the report last week a “one-sided hatchet job” and a “government-funded witch hunt.” He did not return a call on Wednesday.

Opinion: With Armstrong’s disgrace, will anything change?

So far, Armstrong’s woes haven’t affected the charity’s ability to raise money, according to Livestrong spokeswoman Katherine McClane. Donations to the charity have actually boomed since August, when Armstrong announced he was ending his legal fight to stop USADA’s investigation, she said last week.

That’s because, according to McClane, the charity’s main audience — cancer patients and their families — isn’t troubled by Armstrong’s woes.

“The last thing that’s going to enter your mind is news from the cycling world,” McClain said Wednesday.

According to Livestrong, Armstrong has helped raise nearly $500 million, including $6.5 million of his own, for cancer research, treatment and support in his role as Livestrong founder and has helped “dispel the stigma and misconceptions about the disease.”

Read more: Highlights of the Armstrong report

Livestrong will need to find a new way to present itself to the world without Armstrong as its face, said Eric Martin, a partner with Boost Partners, a Richmond, Virginia, strategic consulting firm.

How? Focus on “real-world heroes who have faced down cancer while loving a sport more than the spotlight,” Martin said.

“At this point, what they need to do is re-establish the authenticity of their cause and the way to do that, in my opinion, is to reconnect with what people really admire in their heroes,” Martin said.

Howard Bragman, an expert in crisis communications and vice chairman of, an online reputation management company in Los Angeles, said the future of Livestrong is uncertain.

“I personally hope that Livestrong is stronger than Lance Armstrong because they have done — and continue to do — amazing work for people with cancer,” he told CNN in a telephone interview.

But he said he had little doubt that the impact on Armstrong would be devasating. “It doesn’t get any worse than this, OK?” he told CNN in a telephone interview. “Imagine losing the prestige of all your Tour de France titles, millions in endorsements, stepping down from the organization he loves and founded, that’s been his public mission — and, possibly the worst thing of all, which is public humiliation.”