PR 20/20 Blog

Navigating the Long Tail of Opportunity in Business

By Paul Roetzer | Posted Oct 13, 2009 | 6 Comment(s) | Filed in: Business
My experience as an entrepreneur, and our work with clients in dozens of industries, has helped me realize that opportunity is everywhere for unique and innovative companies that bring real value to customers.

But opportunity can be overwhelming if you don’t adapt to changing markets and growing demand, focus on your core customers and strengths, and build a scalable infrastructure.

Growth for growth’s sake, without a profitable business model or strong exit strategy (for those who are more concerned with pre-profit valuation), results in little more than an entrepreneurial ego boost.

The Long Tail of Opportunity

The Long Tail, as defined by Chris Anderson, applies to the collective strength of the niche markets/products in the demand curve tail, and their ability to out produce a relatively small number of top selling products at the head of the curve.

While many businesses such as Amazon, Netflix, eBay, Google and Apple have built empires on the Long Tail, it is extremely difficult for service-intensive businesses to extend too far down the tail due primarily to the limitations of human resources.

So, as I grappled with our agency's growth during the last 12 months, I started seeing a long tail of opportunity emerging, similar to what can be found in many businesses.

Unlike in an online, product-based model in which inventory and niches can be infinite, for many businesses still bound by human resources and shelf space the questions become, how do we assess growth opportunities — not just services and markets, but anything that can impact growth — and where do we chop the tail off?

Sample Model

For the sample chart below, I’m considering an “Opportunity” (X-axis) anything that has potential to increase revenue. For “Growth,” (Y-axis) I’ve shown hypothetical percentage returns that could result from an increased focus on an opportunity over the next 24 months.

Note, in some cases the opportunities with the greatest growth potential won’t actually be profitable decisions in the short term. Also, not all opportunities are created equal, and some require greater risk if you want to lead and position yourself where the market is going, instead of following the herd.

So, in this theoretical example, in which the vertical markets and emerging services collectively represent significant growth opportunities, a strategic decision is made to cut off the tail at “Pricing Strategy” (represented by the red dotted line).

This means we would not invest energy or resources in pursuing those opportunities in the tail to the right of the red line.

Knowing When to Cut Off the Tail

Here are a few lessons I've learned about how to assess the long tail of opportunity.
1. Know your strengths and limitations as an organization. If the instrastructure isn't in place, don't push the growth beyond your ability to service it.
2. Concentrate on retaining and growing your core customers. They are your most profitable and important relationships.
3. For service-based businesses, your people are your greatest asset. Have an employee recruitment and retention plan from day one.
4. Recognize a quality new business lead, and stop wasting time on prospective clients that won't value your people and your services.
5. Trust your gut instinct when it comes to determining direction. Research and analyze your options, but only to refute what you already know to be the best choice.
6. Take risks, but understand and accept the ramifications of your actions when you fail.
7. Remember that the goal is to produce profits. Make decisions based on profit, not revenue, potential.
8. Don't be afraid to completely evolve what you have spent years building. Listen to the markets, adapt to demand and move where others aren't willing or able to go.
Your Long Tail

So what do you think? Does your business have a long tail of opportunity? How do you navigate it and decide which opportunities to pursue?

Paul Roetzer is founder and president of PR 20/20, a Cleveland-based inbound marketing agency and PR firm. He can be found on Twitter @PaulRoetzer

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In Search of Answers and Inspiration

By Paul Roetzer | Posted Jun 21, 2009 | 5 Comment(s) | Filed in: Business
When was the last time you went back?

For me it was Father’s Day 2009. After dropping my dad off from brunch, I found myself drawn to Thrush Park in Cleveland.

Just minutes from where I was raised, Thrush was my place of dreams growing up.

From the baseball diamonds to the basketball courts, I spent more than 10 years of my life at Thrush learning invaluable lessons about victory, defeat, fear, failure, passion, dedication, risk, reward, pride and street smarts.

Sometimes to find direction and focus, we have to look back on what got us where we are today.

One of the most exciting things about being an entrepreneur is the unknown. It’s the adrenaline rush that comes from taking risks and venturing down the road less traveled. But that also means you’re often in search of answers, and inspiration.

So, on the first day of summer, I found myself sitting at the park of summers past searching for solutions.

What I discovered were lessons learned as a child that have taken on entirely new meaning as an entrepreneur:
- Don’t be intimidated by larger, stronger competitors. Be willing to take risks they can’t, or won’t.
- If you want to be the best, don’t waste your time (and others) talking about it. No one cares about what you’re going to do, so just focus your energy on doing.
- It’s more exciting when the odds are against you. Always fight like the underdog.
- There’s no substitute for practice and experience. No amount of studying and academic achievements will give you the street smarts and common sense needed to succeed in business, and in life.
Where do you go for answers and inspiration?

I’m always fascinated by what motivates people. I’d love to hear about the places, events, books, music and people that inspire you, and help you solve the challenges of business . . .

Paul Roetzer is founder and president of PR 20/20, a Cleveland-based inbound marketing agency and PR firm. He can be found on Twitter @PaulRoetzer

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The People and The Moments

By Paul Roetzer | Posted May 22, 2009 | 0 Comment(s) | Filed in: Business
Boston (Sept. 8, 2008) — The PR 20/20 Team following Inbound Marketing Summit 2008.

It’s 5 a.m., Friday, May 22, 2009, and sleep hasn’t been an option for hours, so I write.

The toast from last night’s dinner, delivered by Julius Mason, The PGA of America’s senior director, communications & media relations, runs through my mind:

"Life Is Not Measured by the Number of Breaths We Take, but Instead It Is Measured by the Moments That Take Our Breath Away."

We all have them. Those moments when time slows just enough for us to recognize there is something incredible and unique about the experience.

It may be the place, the people, the circumstances or the significance, but there is something uncommon that leaves an indelible mark on our memories.

That’s what I love most about being an entrepreneur — the people, and the moments.

Westfield Group Country Club (July 14, 2007) — Final night of the Westfield Junior PGA Championship.Old friends celebrate one last time on the veranda.

Creating the Moments

There is no formula, but I’ve found that many of the most significant times in my professional life resulted more from these principles, than any one particular action or decision:
1. Build your business around clients and employees that appreciate and value loyalty, trust and friendship.
2. Pursue opportunities that inspire you.
3. Get out of your comfort zone. Some of the most memorable experiences in my life have happened when I let go of my fears and anxieties.
4. Seek to create, embrace and cherish the moments, and never take for granted the people that make them so memorable.
San Francisco (April 29, 2009) — Paul Roetzer, Tracy DiMarino, Brian Halligan, Jim Wilson and David Meerman Scott at The Fillmore.

RELATED POSTS:

Disrupt or Die: 6 Tips on Disruptive Innovation

12 Life Lessons of an Entrepreneur

Paul Roetzer is founder and president of PR 20/20, a Cleveland-based inbound marketing agency and PR firm. He can be found on Twitter @PaulRoetzer
Disrupt or Die: 6 Tips on Disruptive Innovation

By Paul | Posted Feb 12, 2009 | 0 Comment(s) | Filed in: Business
Every entrepreneur and business has a choice. Continue down the path of traditional wisdom and conventional solutions, or employ a strategy of disruptive innovation.

According to Harvard professor Clayton Christensen, "A disruptive innovation is a new product or service or a new business model that doesn't attack the core market by bringing a better product to established users in direct competition with the leaders in an industry, but rather it comes into the low end of the market, either through a business model that can compete at much lower costs, can compete profitably at lower costs, or brings to the market a product or service that is so much more convenient and simple to use and affordable that a whole new population of people who previously couldn't afford or didn't have the skill to own and use a product can now own one." [1]

For me, in this economy, it’s an obvious choice. I would rather be different, and take a risk based on something that I believe in, than continue to follow the established practices of industry leaders.

When we introduced standardized services and set pricing into the PR industry in 2005, I’m sure there were plenty of professionals at traditional agencies who thought it was a ridiculous business model. As a matter of fact, most professionals and agencies today still seem convinced hourly rates and retainers are the only viable way to run a professional services firm.

While they may be right, there isn’t a day that goes by when I’m not grateful I took a chance and gave myself the freedom to fail. After all, that’s what being an entrepreneur is all about.

6 Things I’ve Learned About Disruptive Innovation

1) Just because it hasn’t been done doesn’t mean it won’t work.

When you have a vision to change the game and truly do something unique, most people won’t “see” it. That’s the first indication that you might actually be onto something. As Howard Schultz said, “Vision is what they call it when others can’t see what you see.”

2) Take risks and dare to fail.

Forget conventional wisdom and what the so-called “experts” say — look where that got our financial industries. Be different and follow your own path, even if that means faltering along the way, while facing doubt and criticism from your peers.

3) Be bold and decisive in your actions.

Have the confidence to lead. Never doubt yourself or your ability to succeed.

4) Execute and adapt faster than your competitors.

Focus on executing your business strategy and adapting to the countless factors that influence success and your competitive advantage.

5) Have the passion to make your vision a reality.

Many people have a vision for something greater, but it’s the entrepreneurs and innovators who combine vision with the passion to make it reality.

6) Maintain perspective and cherish every moment.

Don’t get so caught up in the destination that you forget to enjoy the ride. Take the time each day to appreciate the people and experiences that make life and business so amazing.

Related Posts:
Paul Roetzer is founder and president of PR 20/20, a Cleveland-based inbound marketing agency and PR firm. He can be found on Twitter @PaulRoetzer

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[1] Holzner, Steven. How Dell Does It. New York: McGraw-Hill: 2006.
12 Life Lessons of an Entrepreneur

By Paul | Posted Nov 26, 2008 | 5 Comment(s) | Filed in: Business
I started PR 20/20 in November 2005 after 21 months of intense planning. It was the most exhilarating and exhausting time of my life.

Fueled by a powerful cocktail of youthful exuberance, adrenaline and caffeine, I spent what seemed like every waking minute outside of my day job (VP at a traditional PR agency) building a dream.

At the tender age of 27, I left the comfort and security of my career to turn my own vision into reality. I had a sound business plan, an investor, a paycheck, healthcare coverage, a few potential accounts, and the support of an amazing group of family and friends.

Everything seemed so perfect. Then life happened, and turned my world upside down.

In a 20-month span, two of the most important people in my life tragically passed away, and I quickly realized that our personal and business lives are inextricably bound. For me, nothing has been the same since. Work, sleep, life and the future I thought I knew all changed.

These personal experiences have had a direct and lasting impact on my goals for the agency, the people that I choose to surround myself with, and the decisions that I make every day on where to focus my time and energy.

Fate, Destiny and the Business of Life

Life is full of joy and pain, opportunities and obstacles. This is what we are given. It is our fate. Many people choose lives of fate, dwelling on what they have lost, and living within the limitations that they believe control their existence.

But life also gives us choice. It gives us free will to create our destiny.

Everything that we are given, and everything that we create, can be taken away in the blink of an eye. That is what unites us. Our mortality.

It is the decisions we make, and the actions we take in the time we are given, that define who we are, and what we will be.

I’ve learned that from pain comes perspective, and from sharing comes healing. So, with that, I offer the 12 life lessons of an entrepreneur:
1. Fate is what we are given. Destiny is what we make. It is up to you which path you choose.
2. Our business and personal lives are inextricably bound. Finding balance is the key.
3. We live life in days, weeks, months and years, but we remember it in moments. Seek to create, embrace and cherish them.
4. Everyone has a story. Take the time to listen and understand before you judge.
5. Loyalty and trust are invaluable traits of friends, employees and co-workers.
6. Integrity takes a lifetime to build, and a moment to lose.
7. Following tradition and conventional wisdom is easy, and boring. Take risks, be bold and dare to fail.
8. We all need to be inspired. Discover the people, places, events, books and music that inspire you.
9. Life is full of noise, interruptions and distractions. It will pass you by if you let it. Take the time to quiet your mind and find your direction and purpose.
10. Invest your time and energy in positive people. Negativity will suck the life-force out of you.
11. We are all mortal. Money, fame and power mean nothing in the face of death.
12. Nothing great has ever been achieved without passion.
Finally, one of my favorite quotes of all time is from Steve Jobs at his 2005 Stanford Commencement address. I’ll leave you with that:

“Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose.”

Paul Roetzer is founder and president of PR 20/20, a Cleveland-based inbound marketing agency and PR firm. He blogs here, and tweets there.

Subscribe to receive the PR 20/20 blog by email or RSS feed.

Follow me on Twitter: @paulroetzer
Someone Stole My Brand Today

By Paul | Posted Aug 26, 2008 | 5 Comment(s) | Filed in: Brand Marketing, Business
A day in the life of an entrepreneur . . .

Today started like most others. After a restless night of tossing and turning, the thought of my pre-dawn venti Americano pulled me out of bed.

I arrived at the office and got the day rolling with a quick check of email before moving on to the prior day’s Website stats. I looked at the usual suspects — page views, keywords searched and referring sites, which is when the day took a bit of a turn.

In the referring sites I noticed a domain name (which will remain nameless for now) that appeared remarkably similar to our brand name (which is a registered trademark).

Curious to see where this link was coming from, I clicked on the referring URL. Much to my surprise, I landed on a Website for another PR firm and found text and services that appeared to be copied almost verbatim from our Website.

And if that wasn’t bad enough, they actually had an active link to our site from one of their services! No joke. I clicked on Press Release, and it took me to my own site.

Now when we published our service and pricing guide in early 2006, I figured that other PR firms would eventually consider evolving to a model of standardized services and set pricing, but I never thought anyone would be quite so blatant when doing it.

Now What?

Before contacting my attorneys, I pulled a few bits of background information from the Internet:
- Checked Go Daddy for domain name registration, which amazingly enough was public with the primary contact’s email address and phone number.
- Found the president of the company on LinkedIn (same contact as I found on Go Daddy).
From there I contacted my attorneys and drafted an email to the firm’s president. Hopefully the story ends there.

The Moral of the Story
- Be vigilant when monitoring and protecting your brand.
- Analyze your Website stats every day. You never know what you’ll find.
- For other entrepreneurs . . . be original. There’s nothing wrong with copying a successful business model, but at least put an original spin on it.
- Keep a good business attorney on retainer.