Reflections & analysis about innovation, technology, startups, investing, healthcare, and more .... with a focus on Minnesota, Land of 10,000 Lakes. Blogging continuously since 2005.

Tag: Best Buy (Page 2 of 2)

General Mills, Target, Best Buy, and Fingerhut Bare Their Social Media Souls

I blogged about a big event here in Minneapolis last night, featuring four of our larger hometown brands (well, three, plus one pretty big direct-marketer you may have also heard of). The topic was social media, and you can tell it was hot by this shot I grabbed with my iPhone of the very crowed room. Mimasocmedia051408
My post about it is over at my NewMediaWise blog, because that’s where I talk more about marketing and all the changes happening in that field. The session was excellent, if for no other reason than I felt the panelists were sincere and candid in their remarks, and yet had as many questions as answers. It wasn’t fluff or BS — I think we heard what’s really on their minds, and they got us thinking about how much more still needs to be done….by big brands as well as small.

Thanks to our great local interactive marketing organization — MIMA.org — for putting on this gig.  They said it was the largest of any of their regular monthly meetings to date.  Hot topic, and lots of good networking before and after.  I had the opportunity to chat at length with two of the panelists afterwards, Jim Cuene of General Mills and Gary Koelling of Best Buy, and also to meet several other folks as well.

Tell ya what, after experiencing Minnebar on May 10 and MIMA on May 14, I’ll say this…..this town is rockin’ this spring!!

More on Best Buy VC News: Geek Squad Founder Speaks

As a followup to my previous post about Best Buy planning to step up its corporate VC activity, I thought it would be good to get some additional perspective on this news. So, I sought out a couple of my contacts inside the company. Robertstephensgeeksquad
I couldn’t think of anyone better than Robert Stephens, founder of the Geek Squad, which was acquired by Best Buy about five years ago. (He was out on vacation last week when the news broke.) Robert still heads the Geek Squad — in an environment much different from his early days, but one he says he very much enjoys. And the business has expanded significantly. Robert’s a great guy, an entrepreneur’s entrepreneur. In fact, he was named the University of Minnesota’s Entrepreneur of the Year in 2007, and I blogged about the event where that was announced (the Minnesota Cup Awards), and about Robert’s excellent talk there.

I asked Robert two questions about the recent development at Best Buy:

Tech-Surf-Blog: What’s your take on the news about the formation of "Best Buy Capital"?   

Robert Stephens: This is just the most recent example of a trend that other companies like Intel, Google, and Yahoo have championed.  I think it offers another choice for the entrepreneur.  I chose not to take VC money or other investors because I did not want to see The Geek Squad bought and sold by people just looking for a financial transaction.  The Geek Squad chose to acquire Best Buy because we really help each other in a permanent way.  We help differentiate Best Buy, and we are able to use their size and resources in our quest for World Domination.

With all of the new web technologies and speed of software development, there are some hardware and software products that might be a better fit through partnership with a Best Buy rather than a traditional VC path. Choice is always good.

Tech-Surf-Blog: What does the new Best Buy Capital say about the importance of startup innovation to the company?

Robert Stephens: Well, either you drive innovation inside your company, or it will get driven for you by external market forces.  This new arrangement gives all of us inside the company more choices in how we develop ideas.  Coming from a startup of one person to a 140,000-person strong global company, change never seems as fast as it used to.  I’m all for this if it helps us try more ideas. 

Best Buy is kind of like Madonna.  You may not like her music, but you have to respect the fact that she knows her business, and rarely do pop stars stay on top as long as she has.  It’s the same in retail.  You must constantly re-invent yourself.  I don’t think people realize how dynamic Best buy is.  It’s why I chose them.

They were the first major retailer to pioneer the "grab and go".  First major retailer to develop the gift card.  First major retailer to go commission-free.  On and on.  Best Buy is also smart enough to know that they have to re-invent faster and faster.  You have a lot of choices on where you buy your stuff.  Sure, you might think, "I’ll just buy everything online".  That’s fine, but it’s not that simple.  Some of those new flat screens have to be seen when choosing.  You buy laptops now based on "look and feel".  Did you ever think that Dell would allow themselves to be sold inside a Best Buy?  This means that there are always going to be choices on how you innovate. It also means that trying to predict the future in a linear fashion is futile.  The key to is try a lot of things and fail as fast as possible.

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For more on Robert, see this recent interview in Fortune Small Business: Geek Squad’s Second Act.  And, for insight into the latest with the VC business, check out this article published last week in Wired: VCs Adjust to Facing More Competitors for Fewer Companies. In addition, I recapped recent VC industry developments in this post about a series of Forbes articles back in late January. Finally, I wrote a post a while back about the New Face of Venture Investing.

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I also got this reaction on the Best Buy Capital news from a source within Best Buy who would prefer to remain anonymous: "I’m not surprised. I think it’s a natural outgrowth of Best Buy’s internal environment of encouraging innovation through this kind of de facto process of allowing people to move ideas as long as they can prove their idea’s worth along the way. Cultivating new ideas, iterating them, and learning fast is one of the things that Best Buy excels at, actually. So, it just makes sense they would take this outside the walls of the company to do it for direct profit."

Thanks to both contacts, and I hope their comments provide further perspective for you on this story.

(Postcsript: I mentioned the Minnesota Cup above. This is an annual competition for entrepreneurs throughout the state, and the organization just announced its 2008 program. Details are at www.MinnesotaCup.org.)

Bloggers Break ‘Best Buy Capital’ Story; Company Goes Mum

In yet another example of how blogging is changing the news business and the PR business, it’s interesting to go back and look at what happened over the past 10 days or so with a story relating to Best Buy — a company I know well, headquartered right here in suburban Minneapolis. Bestbuylogo
This little tale is instructive to those involved in communications and journalism.

First of all, I think the underlying news story here is a positive one for Best Buy, and for its employees and shareholders. (Full disclosure: I like the company, I have friends there, and I did a little interim gig there myself back in 1999/2000. It is an amazing outfit.) But it’s still interesting to watch big companies like this try to deal (or fail to deal) with the realities of new media.

Here’s the story as it broke locally here in the Twin Cities yesterday (Friday), by our very good Business Journal: Best Buy builds VC unit to find next big things. (More disclosure: I was contacted early in the week by one of the writers of this story to provide reaction to the news, and was quoted in it.) But what’s more interesting to me, even than the news itself, is the fact that it wasn’t first discovered by a traditional media outlet: a blogger had actually broken this story the week before. If you’re in the journalism or PR business and have any sense of the changes being wrought by new media, you of course know such occurrences are becoming more and more common.Bestbuyhq

The Fuse Is Lit
A consumer electronics blogger by the name of Lee Distad in Edmonton blogged this piece of news first on March 18 with this post: Best Buy Capital to Invest in Tech Innovations. He had more to say about it on a weekly recap he did the same day on another blog: Best Buy Opens Their Own Venture Fund. Soon, another blogger, who happens to be a VC (and also a Canuck) — that being Paul Kedrosky of the blog Infectious Greed — had picked up on Distad’s breaking news and posted a link in his own post: Return of Corporate Venture Investors. (A little aside: what he fails to realize, and the others as well, is that Best Buy is not a new corporate venture investor; they’ve been at this game for many years. The new entity appears to signal simply an expansion or formalization of their practice of making minority investments in promising new companies from time to time that are strategic to their business.  The name Best Buy Capital just appears to perhaps be a new name for this entity — though it should not be confused with an old entity called "Best Buy Capital LP," which the company formed in 1994 to raise expansion capital, as this old SEC filing details.)

Then (within minutes, I suspect), the blog TechConfidential (from TheDeal.com) was running a post with an even better headline — With Best Buy Capital, corporate VC goes big box. (Disclosure: I have been invited to be a member of the TechConfidential blogger network, though I did not see their story on Best Buy till this week.) You can see in their post that they included, like good little bloggers, links to the earlier posters, dutifully paying them homage. TheDeal.com exists to serve investors, so you can be sure plenty of people who follow BBY stock got early wind of this story, actually well ahead of the general market. (Did it cause a blip in the share price?  Maybe not all by itself, but I see the stock did trade up that day.  Investors hunger for every little piece of news about the companies whose stocks they hold.)Bbychart0308

Okay, so what’s so interesting about a bunch of bloggers who sniff out a story for their relatively small audiences, which is then broken as a piece of hard news later in Best Buy’s hometown by a large, traditional media weekly that reaches many tens of thousands more people? Nothing so much, since it’s happening a lot these days. What’s interesting to me is that, as Distad reports in his original post, not only could he not get any information or a comment from the company’s PR people — they didn’t even seem to _know_ anything about this particular development within their company! And, as you can see, our local Business Journal was also unable to get a comment from a Best Buy source for their story, a full 11 days after the original blog post.

The Disconnect
If you haven’t picked up yet from one of the links above, here’s how the original blogger discovered the story…are you ready?  From a job posting. That’s right, a little known but valuable source of news that smart people looking for insights about a particular company can often find — right on the company’s own web site! (Or on any of a number of other job boards.) This isn’t news about what’s happening now, mind you. It’s better than that: it’s about what’s coming. Hiring plans definitely qualify as a bellweather of things to come.

So then, what does Best Buy do (ostensibly on a call from the PR people to the HR people) — they take the job posting down! There, that will fix those pesky, nosey outsiders!  Now, those links in the above original blog posts go to a dead page. Not to worry, however — it took me less than a minute to find the job description had been copied and posted to another job listing site here. That’s the thing about the web: once something’s out there, it’s impossible to fully take it back. (This is the posting for a "Principal," whereas another job had been originally posted by Best Buy for the position of "Associate," which I did not search further for. A source of mine within Best Buy told me this week that three people would be hired for Best Buy Capital; I would guess that to be one Principal and two Associates.)

Now, it could be said that this was just a coincidence — that the job postings were removed because the company had suddenly filled all three positions. Hardly likely, since the original posting appears to have only gone up on March 11. (And I know how long things take at Best Buy.) It seems much more likely the company was spooked by a blogger breaking a story that, for some strange reason, they did not want known. Or did not go through "normal channels." (Hint to Best Buy: the world is changing, and, like it or not…channels aren’t normal anymore.)

But what I find the most interesting of all is that the HR people, through their job-posting system (they use the very common Taleo platform), are putting out news that they apparently don’t realize. That is, no one seems to have explained this to them. I’m surmising they don’t tell the PR people when they do post something like this — witness the original blogger running into complete ignorance of the news when he called PR. By the same token, the PR people aren’t trolling the postings regularly themselves, either, it would seem, to become aware of "news" the company may be putting out in ways other than the limited supply they dish out themselves. And limited it is. They, like most big companies of old (and so many overly regulated public firms, I suppose), seem to spend more time keeping the news in than letting it out.

Two things I would ask: (1) Shouldn’t Best Buy (and other companies of their size) start figuring out how to deal with the notion of transparency in our new world of New Media?  And, (2) Doesn’t it seem to you that somebody should get the HR people and the PR talking?

 

 

‘MN Cup’ Awards: A Celebration of MN Entrepreneurship

Hundreds of participants in Minnesota’s startup community gathered at the University of Minnesota Alumni Center on Thursday for a fun, upbeat evening that included the annual Minnesota Cup awards presentation. This statewide competition seeks out aspiring entrepreneurs and their breakthrough ideas, looking for the next great entrepreneurial success story in Minnesota. It’s open to all entrepreneurs, “high tech or no tech, whether you are just putting your ideas into a business plan or if you’ve been out building your venture.” This year’s competition, the third annual, was launched on March 30, 2007, and attracted nearly 500 entrants. Mncupawardslogos_2

During the evening’s program, we heard remarks from the president of the U, Robert Bruininks, and the dean of the U’s Carlson School, Alison Davis-Blake. Bruininks said 19,000 companies have been founded by U of M grads over the years, employing 1.1M people in 50 states and 63 countries. I was surprised to hear that 75% of grads from Minnesota stay here after they get their degrees, and 40% of out-of-state grads stay here as well. Alison Davis-Blake said that the Carlson School’s entrepreneurial studies program is now the fourth largest major, and soon will be third. It’s grown 4x in five years, she said. She closed her talk, however, with what could only be called a sobering challenge for the state: “Minnesota is falling behind in entrepreneurship,” she said. “The energy is deteriorating.” By one measure, she said the state ranks 48th out of 50. [A collective “oooooh” went up from the crowd — as in big ouch!] She was laying down the gauntlet for all of us: “We need a dramatic improvement in innovation here.” Blake closed by ensuring us that the Carlson School is “committed to inspiring and educating the next generation of Minnesota entrepreneurs.”

A Master of the Craft
Next up was a highlight of the event for me: the “Entrepreneur of the Year” award. Gary Holmes, who’s the successful entrepreneur behind the U of M Center for Entrepreneurship, got up on stage to introduce Robert Stephens of the Geek Squad, this year’s award recipient. I’d heard Robert speak once before, and he was tremendous….funny, straight up, right from the heart. Nothing stuffy or boring about this guy! He’s exudes excitement and passion and living his own brand. Once again, we weren’t disappointed. What a great choice for a guy to be so honored, as he continues building out his business, which Best Buy acquired in 2002. Geeksquadlogo He’s still very much active in running the Geek Squad. Robert opened his talk with a great intro on what his brand is all about: “Imagine a world without manuals. Now imagine a force that dedicates itself, monk like, to reading these manuals — even for stuff they don’t own!” The man knows how to market and have fun — and, hey, does it really get any better than that in the world of marketing? To read all about the brand lore of the Geek Squad, check out their excellent Wikipedia page.

Robert went on to tell the story about how he dropped out of the U of M back in the early ’90s — to, of course, launch his business. In recent years, however, he’s invited back to the U a lot to talk to students. “I think I have now spent more time talking to students than I did being one,” he said. [He put in a hint later that, now that he’s won the Enterpreneur of the Year award, he’s hoping someday to get an honorary degree from the U as well… 🙂 ] Robertstephenswife Stephens also told a cute story about how he wanted to marry his wife back in the mid-’90s, but probably wouldn’t have been able to build the business he did if he’d have done that. Instead, they held off and married a few years ago. (That’s her in the photo I took after the event. I was delighted to realize, during Robert’s talk, that she was right next to me at the table where I happened to sit down. She must be a remarkable person, too. As with all successful entrepreneurs, the significant other deserves a lot of the credit, and Robert was gracious in saying so.) By the way, in the photo, note Robert’s Blues Brothers-style clip on tie, and the Geek Squad tie pin. Always living the brand… 🙂 Maybe he and his wife even drove over in one of those cute black-and-white Beetles, too.

An amazing thing I learned about Robert is that he never took on investors in his business. “I applied for a bank loan once, and didn’t get it,” he said. He added, in a note of encouragement to the many entrepreneurs and student-entrepreneurs in the audience: “If you’re poor and struggling, you’re in the best place to be. You have nothing to lose, and you don’t owe anything to anybody.” As his business grew, he went on to look at possibly franchising the concept. But, one day, he just decided to knock on Best Buy’s door. He told them (this would have been founder and now chairman Dick Schulze, or Brad Anderson, now CEO), “Most of my people used to work for you. We can compete or we can work together. Like Reese’s Peanut Butter Cup, it could be a great combination!” The rest is history, and he said he’ll soon enter his eighth year working with the consumer electronics retail giant — where the Geek Squad is the nucleus of the company’s huge push into consumer services, and part of its growing Best Buy for Business initiative as well. Stephens said of his Best Buy experience: “I got a degree in hard knocks founding Geek Squad. Now I’m getting an MBA in the corporate world at Best Buy.” He said he finds it fascinating how the company is actively exploring why companies tend to innovate less as they get bigger. “Best Buy experienced near-death a couple of times. Now they stay paranoid, because the Costcos, the Dells, the eBays keep them that way.” At Best Buy, he said, there’s always a way to innovate.

“I have a vision for Minnesota,” said Stephens. “We have way more advantages here than meets the eye. It’s no suprise to me that so many great companies are located here … Life is harder here. But we sit by the fire and strategize. We’re innovators here!” He said he really wants to see much more entrepreneurship in Minnesota. And he even advised entrepreneurs to “hold off taking money if you can, to build your business.”

In closing, Stephens said Geek Squad now has more than 12,000 “agents” (employees and contractors). He said he likes to tell them, “You won’t solve world peace, but you might fix the hard drive of someone who will. Or cure cancer.” He said U of M staff and researchers have been big customers of his over the years.

To learn more about Robert Stephens, here’s an online bio for a conference where he’ll be speaking this fall. Also, here’s an excellent interview, and quite a detailed one, that a leading banking publication did of Robert earlier this year. The man gets PR — and there’s certainly a lesson there for MN entrepreneurs.

The Main Event
But the part of the evening everyone was waiting for was still yet to come: the announcement of the winner of the 2007 MN Cup. No one but the judges, who had met earlier in the afternoon to hear the pitches from the five finalists, knew who was going to win. It was the culmination of months of activity, with the MN Cup organization gradually culling down the applicants to the chosen few deemed most promising, and then the judges choosing just a single first-place winner. Here are brief descriptions of the five finalists, as included in the event program:

1) It’s Fresh. Our mission is to deliver comprehensive solutions focused on food freshness, designed to increase consumer satisfaction, taste, and quality through simple, easy-to-use solutions.

2) Muve. Based on a ground-breaking research study on obesity from the Mayo Clinic, Muve Inc. is prepared to commercialize products and services to cure the global obesity epidemic. (Dr. James Levine, founder of the company, led that research.)

3) Persata. A free-flowing community of users who build “crowds” around specific topics and collect quantitative information, as opposed to writing articles or blogs, in order to build a mini, topic-specific database on the fly.

4) Reshare. A “distribution relationship manangement” software and strategy company, with the only patented channel management solution that enables manufacturers and brand owners to sell online directly to end users without circumventing valuable channel partners.

5) Snap Pea. This company’s pick-up sites provide the convenience of same-day delivery of a made-from-scratch, customized, and freshly assembled meal to corporate office complexes.

We had heard pitches from each of the five earlier in the program — but only two minutes each, which seemed really short. [Hey, Dan and Scott, how about three or four minutes next year?] Now the tension was mounting. Dave Cleveland, the godfather of local small business banking, was called up on stage, with his wife Carolyn, to present the awards, starting with the third place winner, Persata …. then the second place winner, It’s Fresh …. then, drumroll, the first-place winner …. Muve!

John Montague, CEO, of Muve Inc., was called to the stage amidst a standing ovation and gave a very inspired, from-the-heart talk. As someone said later, there wasn’t a dry eye in the house. “We all like to help people,” he said, “and I decided (in accepting the position to lead the firm) that this company was going to do great things.” The two key words in choosing one’s work, Montague said, are “passion” and “purpose.” Muvelogo An experienced entrepreneur, he said the key turning point for him was in January of this year when he met with Dennis Anderson. [Dennis is the godfather of local executive recruiters, and has done more for emerging companies in this state than any other one person I know. So, I was delighted to hear him get this tribute.] “Our discussion changed my life,” said Montague. This company was about more passion and purpose than I’d ever imagined. Now I can’t sleep at night!” What I also thought was cool was the way Montague paid tribute to Robert Stephens, who has obviously made a big impression on him over the years. “He’s a marketing genius, and the way he brings passion and purpose to his job on a daily basis is an inspiration.”

The other really cool thing I learned Thursday evening, actually during the networking break before the awards were announced, while chatting with a client of mine, Marc Seaberg, was that he was hired as Muve’s first employee! Marc is a 2003 graduate of the University of St. Thmas. Along with his father, John Seaberg, a former senior executive of medical device giant Guidant (now part of Boston Scientific), he founded an online business in 2006 called Wellness Choice, which I had the privilege of working with over the past year. What’s interesting is that Marc and his dad were also both motivated by a sense of purpose in launching that small business, to help people lose weight and quit smoking. While the products of firms like Guidant, Boston Scientific, and Medtronic save thousands upon thousands of lives, they felt that so many of those people wouldn’t need them in the first place if they just led more healthy lifestyles.

Tonight, we were hearing from another young guy so inspired — to make a difference for mankind through his company and his personal sense of purpose. I was reminded of an entrepreneuer from an earlier era in Minnesota entrepreneurship — Earl Bakken, the founder of Medtronic, a company I once worked for, where we were all grounded in that same sense of purpose by Mr. Bakken himself. And I’m sure I wasn’t the only one in the audience thinking about this legacy.

For more on this great new Minnesota startup, Muve Inc., see this story from the Rochester, MN, Post Bulletin, written the day before the MN Cup awards were presented. And here’s an interview of Montague by local radio station Cities 97, the morning after the event.

All in all, it was exciting evening last Thursday, and I hope I’ve been able to convey some of the upbeat feeling for those who couldn’t be there in person. What do you think about Minnesota’s entrepreneurial climate? What’s good, what’s bad, what more can be done to make it an even better state for startups?

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