Alteva was acquired by a rural telco, WVT, which later changed its name to Alteva.

Frontier, Windstream and CenturyLink have there roots as small rural ILECs. Windstream bought data centers, Nuvox (CLEC), and then Paetec. C-Link became a CLEC then bought Embarq (formerly Sprint United) then Savvis and Qwest. Frontier (like Fairpoint) acquired Verizon territories.

The residential telecom market is flat or shrinking. TV cord cutters, landline repalcement, yadda yadda. Lucky for WIND and C-Link that they realized this early and acquired enough Enterprise revenue to offset resi losses.

CLECs original business model was to make a living off of the small business space. It was more profitable than residential.

Gary Kim examines the revenues from Alteva, Frontier, WIND and C-Link. “One other lesson is that transformative measures must be taken early, before the opportunity is foreclosed or made hugely more risky because one is entering a crowded or saturated market.”

Hugh MacLeod is a cartoonist called @gapingvoid. He has written a few books about marketing, start-ups, blogging and business. One of his clients is Rackspace. He has written a book about it. The beginning:

“Work is not just about making money . We were put on this earth to grow,
to better ourselves, to be expansive. In this regard, art and business have a
lot to teach each other . The reasons we get up every morning and dedicate
our lives to a task is just too important a subject to be interpreted through
a single filter.”

He talks about Culture, the DNA of a business, and how fanatical service built the business.

It’s 48 pages with many cartoons. Worth the read. Get it here.

In this history about book retailers, one thing that stands out is how B&N broke the book retailer model of making 40% margin on bestsellers to instead chase volume into its stores. It was the loss leader mentality (that you could say still exists today in the Freemium model).

Loss leaders are used by any large store – grocery, Wal-Mart, Walgreens, Target – to attract traffic.
Grocery stores make about 3% margin on food but make 30% on non-grocery items like utensils, light bulbs, batteries. It is the cross-selling and the upsell that keep the lights on.

If every shopper just purchased the items on sale, the store could not survive. However, enough people, out of convenience and impulse buying habits, grab other items. (Smaller stores with much less traffic can’t make the loss leader model work.)

The indie book retailer is dying because they didn’t adjust their business model to the changing way shoppers shop.

Ask yourself: what do I upsell or cross-sell to my own customers?

The indie book retailer has the same issue as B&N: not enough traffic to keep the lights on. How do they change that? (I have thoughts here.) However, when you think the problem is Google or Amazon (as newspapers, publishers and retailers do), you don’t address the real problem: Your Business Model!!!

If you complain about ATT or your ILEC or the Cableco or the CLEC, you are expending energy in the wrong direction. You can’t change what they do!!! You can only change your attitude about it and your reaction to it!!!

It often isn’t about price. Why would there by convenience stores? It is about the following:

• Do they – the market – know who you are?
• Do they know what you offer?
• Is it easy to buy from you?
• Do you have services that can increase ARPU?

You can sell stuff at zero margin IF you can convince enough people to buy the premium service or luxury items that pay big margin and IF you can get the volume needed to make the model work. When the model was working, book stores saw a lot of traffic.  It isn’t working now because traffic is way down. The model could work if the book retailers targeted the most profitable customers and delivered a premium service to that niche. But that is a pivot that many are not capable of due to being mired in their current (dying) business model.

SIDE BAR: From Liar’s Poker:

1. The market tends to overreact to significant events, and it pays to be a contrarian.
2. Analyze and act on secondary and tertiary effects to significant events quickly before the market becomes aware of them.

Great article about lessons from the Growth Hacker Conference. Best advice: The path to growth follows a process!

“Transition to Growth” – means that you pivot from a technology company to a sales and marketing company. Most companies cannot do this. 8×8 did it very well.

Growth Hacking is the term for sales and marketing by using metrics and methodology to distribute your product through the noise to the best prospects. A/B testing, SEO, SEM, fast launch, Beta, Freemium, social media, PPC, Pull – are all examples of growth hacks. Best article on it is here.

One thing to understand about ILECs: they are NOT technology companies. Bell Labs was the technology company. The Bells were the marketing arm for the utility of the technology. Today, they are just marketing machines that utilize some technology.

Cellcos and their chant of 3G, 4G, soon 5G from VZW. It means very little to the user experience. It is a spin job. Cellcos are not tech companies. Look how many have outsourced all or part of their network to NSN, ALU or Ericcson. They are sales & marketing companies.

Technology is great, but most people are idiots. Your job is to sell to idiots. To do that you have to be the one that makes the technology invisible, disappear or so simple an ID10T can use it.

Then you have to bundle it and tell a story that resonates (just like I wrote in the last blog and talk about constantly. It isn’t enough to have the best tech. the best tech doesn’t win. the best story does. The best sales apparatus does. The
best marketing machine does.