I started by looking at just under 6,000 inquiries assembled over about 4 1/2 years, about 1,200 of which actually had some meaningful data about the project's progress, management team, business model, and longevity. These inquiries cover both digital signage and self-service kiosks. Within the data set, there are only about a dozen "trends" that are visible enough for me to see with the naked eye (i.e. without some complex software and a trained statistician). Of those, a short list of five items seems to be an effective proxy for overall performance. In fact, the amount of time and effort that each company put into mastering these five areas distinguishes the failures from the successes.
1. Know your business model
The big winners in our data set either had a very unique spin on a particular revenue model, or virtually flawless execution on a "standard" model. While I wish I could say we're at the point where we can hear an idea and give you a thumbs up or thumbs down based on how good it "sounds," just having a solid model isn't good enough. The other four items on this list all come into play in complex ways that preclude us from being able to make such predictions, just as they prevent great ideas from growing into great companies when not backed up with the right management team, funding, etc. For more details, I recommend reviewing our articles about the popular business models within the industry:
- Experience, branding and private-label networks
- Private-label merchandising networks
- Advertising-supported networks
- Public service networks
I'm not really satisfied with the phrase "understand your goals," since what we're trying to capture from the data here includes media consumption measurement, sales goals, growth goals, follow-on funding goals, and a whole host of other measurement-related things that, while inexorably tied to one another, require complex, interdisciplinary teamwork, careful planning, and fastidious, ongoing oversight. Suffice it to say that companies that don't set meaningful goals at every step of their company's growth seem to have a very hard time accomplishing anything, regardless of whether they're a three man startup installing a 20 screen pilot, or a Fortune 500 company working on a much larger project.
3. Build a solid team
If this list were in order of importance, this item would almost certainly be #1. We've had IT firms that want to sell ads. Agencies that want to install networks. Content production studios that want to do infrastructure management. And all the while they think that they can handle it all, and partnering/outsourcing is for wimps. At least, that's what I'd have to guess when looking at (a) the number of companies that were handling at least one part of a project that was clearly outside of their operational expertise, and (b) the percentage of those companies that never got a project off the ground or failed within nine months. We first recognized this issue a while back (and without any data analysis), and wound up writing a five-part series on building a solid digital signage team:
- Introduction to building a digital signage team
- Selecting your technology and operations staff
- Selecting your creative services and merchandising staff
- Selecting your business and finance staff
- Selecting your sales and marketing staff
One of my original goals for writing this blog was to share stories of companies that tried and failed, or tried and succeeded, so that the industry as a whole might start learning from the masters and avoid making the same mistakes again. After four years, I definitely get the feeling that people are doing this, and our data supports that trend. Starting in early 2007, more of our conversations actually began to feature customers/prospects/interested parties articulating (to some extent) what they thought their problems were likely to be, and how to mitigate them. It could be that we simply didn't take such good notes prior to that point, but my wholly-unscientific feeling is that enough people "get it" now to avoid common planning, budgeting and deployment problems. This is a great sign of progress, indeed.
5. Learn from past mistakes
Here's one I didn't expect: folks in the industry seem to be talking to each other, and it would appear that they're being (mostly) honest! Over the past 18 months, more people have cited an industry reference when talking about why they will succeed when others have failed. Again, I'm sure that we don't have perfect notes on every conversation, but generally when I hear somebody throwing around the name of another network, an industry veteran, or something similar, little alarm bells go off, and I jot that down quickly. I know my comrades in arms down here at HQ feel the same way. So it appears that more people are aware of what's going on in the industry, are learning to mimic the successful guys, and are figuring out how to avoid the pitfalls that crippled some earlier networks.
Caveats and future research plans
All in all, I'm really glad I had an excuse to go digging through the data to find those standout trends that separated successful projects from failed ones. Granted, to come up with trends that can be expressed as easily-digestible sound bites, I've had to squash together lots of more complex and nuanced relationships and set aside some vertical-specific issues that tend to kill only specific types of applications (e.g. ad-funded network + no ad sales experience = virtually instant network death). That said, this is the introductory advice that I'd give to just about anyone starting out in the digital signage world. It might change a bit for interactive kiosks, but the fundamentals of the two are really quite similar.
As far as data analysis goes, this is just the tip of the proverbial iceberg, and I hope to have some additional details worked out by the time the conference rolls around in two weeks. After everything has settled down in a month or two, I'll try to convert the final presentation into blog format and post it here for your review.
Finally, since I'm going to be over there at the time, I will also be working diligently to install Thanksgiving as a new Indian national holiday. Americans have had a monopoly on holidays solely devoted to eating for too long now. I think it's time to share that with the rest of the world. If anybody's interested in joining me, it'll be a nice excuse to settle back for a nice big dinner on Thursday. Though I wonder if anyone over there has even seen a turkey... and I hear that football means something different, too :)