Author: Eben Johnson

Founders, entrepreneurs, startups, and development teams, please distinguish between price and cost when designing your products and speaking with others.

“Okay then,” the salesman said eagerly. “The cost for this is $989.99.”
    The customer held up the object of his desire, turned it slowly from side to side, and pondered his purchase. “$989.99?”
    “Yes, sir. You’ll be delighted.”
    “What else will I need?”
    “Well, you’ll need batteries, of course, and eventually, refills.”
    The customer thought. “Does it come with batteries?”
    “No. That’s extra.”
    “Do you sell the batteries?”
    “Normally, yes, but sorry, we’re out.”
    “Hmm. Is it easy to use?”
    “Yea, easy, but we offer classes, too.”
    “Are the classes free?”
    “No, you have to pay for those.”
    “So, okay, your price is $989.99, but I’ll have additional costs for batteries, refills, and maybe classes?”
    “Yes.”
    “I don’t know,” the customer said. “It sounds like a lot. Is there anything else?”
    The salesman brightened, delighted at the question. “Well, yes! Let me tell you about our extended warranty program.”

A Call to Founders, Entrepreneurs, and Product Development Teams

In everyday use, we often use price and cost interchangeably. However, because a customer’s total cost is the sum of the price plus their other costs, I encourage founders, entrepreneurs, and product development teams to differentiate between the terms.

Total cost = price paid + the sum of all additional costs

In the scene above, the customer considered the price of $989.99, but he also understood that his total cost would be more than just the price; he’d incur additional costs, such as buying refills and the hassle of visiting at least one other store to buy batteries. His total cost will be greater than just the price. In this scene, it’s reasonable to believe this customer is unlikely to complete his purchase. His perception of the total value he’ll gain to his sense of the total costs he’ll incur might not be good enough for him to make the purchase. As a result of his perceptions, he may decide to purchase a competitor’s product, continue using his current solution, or simply give up.

Therefore, product developers, please understand your customers’ complete life-cycle use cases, including not only your prices but your customers’ additional costs—from prepurchase research efforts to eventual disposal. If you understand and map your customers’ life-cycle use cases, you might find ways to reduce their total cost (i.e. price plus all other costs). Your insights might be valuable sources of competitive advantages.

Please click contact, if you want help answering these or similar questions. Finally, please leave a comment or send me a note if there is a particular subject or topic you’d like me to address in a future post.

Colorado Technology Ventures coaches and mentors founders and their startups.

Back to Top

Contact

Home

“Well, yea,” the founder remembered, “we launched everywhere, nationwide, all at once. We targeted everyone.” He shook his head. “And we blew through our advertising budget in just a few days.” He paused. “Worse than that, everyone—and I mean everyone—saw all our mistakes. God, that was expensive. I wish we had launched more narrowly. We should have chosen a beachhead market.”

First, a Couple Definitions

From Kotler & Armstrong, Principles of Marketing:

• A market segment is “a group of customers who respond in a similar way to a given set of marketing efforts.”
• Market segmentation is the process of “dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs.”

The Beachhead Market

The concept of a beachhead market comes from military strategy. It’s where an attacking force concentrates its attack, survives, and establishes a beachhead from which it then penetrates farther into enemy land. Doing so successfully requires planning, secrecy, concentrating troops and supplies, training, tenacity, and an absence of bad luck.

For an analogy, consider the WWII Allied invasion of Normandy. Knowing they faced a determined enemy, the Allies needed to decide where, when, and how to next attack Europe. They narrowed their decision to France, but with approximately 5,500 km (3,400 miles) of French coastline, they couldn’t possibly attack it all at once—they had to focus their attack and establish a beachhead. Spoiler: By the end of the day, after intense fighting and many lives lost, the Allies secured their beachhead—a stretch of beach approximately 80 km (50 miles) wide!

As the founder, entrepreneur, and leader of your venture, you must plan your goals, strategies, objectives, and tactics, gather your resources, and execute your product launch successfully. You will likely lack the resources or time to launch your product into too big a market. You must focus, surprise, hit hard, and adjust and reinforce where necessary. You must establish your beachhead. From there, regroup, reinforce, plan your next objectives, and move inland to win adjacent markets.

But keep this in mind: once your competition learns of your “attack,” their goal will be to throw you back into the water—to defeat you. And believe me, they will use all available tools and tactics, some of which may be unethical or illegal. Be prepared, marshal your resources carefully, communicate well, encourage everyone, and have a backup plan.

A Real Example

A team Eben coached developed a technology that prevented people from using cell phones while operating equipment. The technology was good enough that only people sitting in the operator’s seat would be restricted. Wow. The market for such a product was, and is, huge. They segmented the market and focused on customers who drive cars. Fine, but that market was still way too big for a beachhead.

  “Okay, team,” I said. “Let’s identify your beachhead market by getting very specific. Let’s identify your first market. This will be your beachhead market. Segment your bigger market and identify a customer persona in a much smaller market niche—one you can manage, one you can afford, and one you can win. Let’s identify the best small market, one where customers have BIG wants, will pay a ton, and will buy your product again and again. Remember, securing your beachhead will be expensive.” I raised my fist to the ceiling. “Go for it.”
  “Insurance companies?” a teammate offered.
  “Good start, but not yet. Insurance companies are bureaucracies. You can’t afford to get sucked into them. And, by the way, remember that a ‘company’ is not a customer. Instead, name a person—someone with a particular responsibility, who cares deeply, who has money, who’s willing to try your new product, who will use it or have someone they know use it, and who will buy it repeatedly or, at the very least, purchase a lot of them. Remember your three key marketing questions.”
  “Car owners?”
  “Yes,” I said. “Getting warmer. Go deeper.”
  “Parents?”
  “Yes, and why?”
  “They don’t want their kids using cell phones while driving.”
  “Exactly,” I said. “Parents need to keep their children safe. They want solutions. You got it.”
  The team smiled and relaxed. They shared high-fives.
  “But you’re not done,” I added. “Not deep enough. ‘Parents,’ collectively, still represents too big a market. Deeper.”
  The team sat back. “Deeper?”
  “Yep. Segment ‘parents.’ Who, among all parents, will you target for your beachhead? To whom will you launch first? On whom will you spend your early, limited resources? What kind of parent? What do they do? Where do they live? Who’s going to pay you the most?”
  “Rich parents?”
  “Yes. And where do they live?”
  “L.A.?”
  “Yes!” They were getting it. “But why not New York City?”
  “Because,” a different teammate offered, “fewer kids drive cars in New York?”
  “Exactly. Keep going.”
  The team was excited, and after more work, they finally chose their beachhead market. What they learned blew them away. What was their beachhead market?

Answer: The team’s beachhead market was the set of super-wealthy L.A. fathers (lawyers, actors, athletes, agents, etc.) who had bought, or were about to buy, their princess daughters brand-new 3-Series BMW convertibles. Following the team’s interviews, they discovered how much their target market valued the team’s solution for keeping their precious children safe. With vigor in their voices, the fathers said that they’d pay thousands of dollars per unit, buy one for each of their cars, and upon reflection, some added that they’d not let their children ride with friends unless those cars were similarly equipped. Finally, the team was delighted that several fathers called back to ask for updates. A few suggested they might invest. Well done, team.

Recap: A Beachhead Market

A beachhead market is the first market into which a venture will sell its first product. It’s one where first customers (innovators) will hunger for the product and can afford it, it’s small enough to be served by the venture’s early team, it’s small enough that they can afford to advertise to it, and it will help them learn and correct their mistakes before they invest in roll-outs to adjacent markets and beyond.

Figuring one’s beachhead market is tough work. The questions to address are deep and challenging; one must have the resources (time, money, skills, tools, and support) to answer them honestly and thoroughly. A test of a founder’s, a team’s, and an investor’s worth is how well they work together to answer these questions and choose the right beachhead market.

Please click contact, if you want help answering these or similar questions. Finally, please leave a comment or send me a note if there is a particular subject or topic you’d like me to address.

Colorado Technology Ventures coaches and mentors founders and their startups.

Back to Top

Contact

Home

Wishing they had asked the three key marketing questions, “Marketing,” the engineer quipped, “is what we should have done before spending millions making products no one wants.”

Joking aside, there are three key marketing questions all founders, their teams, and investors should answer before spending significantly on any venture.

But first, a few definitions:

Customer: A customer is a person who buys your product. As a seller of commercial cleaning services, your customer is not a bank because a “bank” is not a person—a bank is a company often housed in a brick building with a clock above the front door (time is money). Instead, your customer is a person who is duly authorized by the bank’s leadership to contract with you to purchase your cleaning services. Customers are people.

Market: A market is where customers, with similar resources, values, and wants, and sellers selling similar or complementary solutions, buy and sell products. Grocery stores design their stores and stock related products to attract and sell to carefully defined customers (Whole Foods and Trader Joe’s compete in the same upscale grocery markets; Whole Foods and Dollar General compete in different markets).

Marketing: Marketing encompasses all the activities, processes, skills, tactics, tools, and experiences one uses to grow one’s market. Marketing is more than advertising; it includes, for example, market research, product development, pricing, distribution, promotion, and sales.

Product: A product is a good or a service sold, rented, etc., to a customer for the customer’s or user’s use or consumption; furthermore, a good is something tangible, something you can conceivably resell (e.g., you can sell your used car); however, a service is only consumed—it can be neither taken with you nor resold (servers serve food, doctors treat patients).

User: A user is a person or animal that uses your product. While a customer might also be a user, generally, customers buy and users use. For example, a dog owner buys a toy for their dog’s enjoyment; the dog owner is the customer, and the dog enjoys (uses) the toy.

Previously, I wrote about needs and wants where I claimed we have no new needs, only new wants. “I will always need food, and right now, I want pizza.” Because people have always somehow addressed their needs, all products have competitors. Therefore, our job as product developers is to commercialize new and better solutions—products that customers perceive as being better (solves a problem, gets a job done, addresses a want, satisfies a desire, etc.) than do their other choices. The nearby image of the blacksmith conjures old methods that have long been replaced by modern, high-volume, less expensive methods of making high quality metal goods.

The Three Key Marketing Questions

1. What customer needs and wants are you addressing?
2. Do your customers really, really want your solution?
3. Can and will your customers pay your prices again and again?

What customer needs and wants are you addressing?

The better you and your teams understand your customers’ needs and wants, the more you will likely succeed. Doing so requires you to dive deeply into customers’ and users’ personas (personalities, psyches, egos, etc.) and understand how to satisfy their wants better.

Drill down. Keep asking questions. Ask five whys. This is not a list of your product features; it’s understanding why your customers, from their perspectives, will prefer your solution.

• Understanding patrons’ needs for food and creativeness, restaurateurs offer new dishes. Restaurateurs who innovated successfully grow their markets.
• Understanding customers’ needs for safety and productivity, crane manufacturers designed cranes with smaller footprints. These new cranes operate in tighter spaces, damage less property, and injure fewer people. These crane innovators have grown their markets.
• Understanding little league softball players’ needs for performance and esteem, bat manufacturers introduced brightly colored aluminum bats (Watch out, Alison’s using her new, brightly colored bat; she means business). These bat manufacturers grew their markets.

Will your customers really, really want your solution?

Who most wants to purchase or use your product? Think again. Which market segment so desperately wants your product that customers or users will change their habits, knowing they’ll probably pay more and experience some stress as they learn to use yours?

Your solution will likely require new customers or users to change their behaviors. For example, a potential customer who previously bought store-brand bananas might consider buying your organic ones. Even though he believes yours spoil faster, what is so compelling about your offer that he must choose yours? What will compel him to change his behavior? You have to figure it out; if you can’t, stop.

In a previous post, I wrote about the thirty percent rule. Before changing purchasing behaviors, customers typically want a new solution to be, in the aggregate, about thirty percent better than their next best choice. Looking at the customer’s entire experience, from pre-purchase to final disposal, is your overall mix of benefits thirty percent better than your competitors’? Back to bananas, what combination of benefits will drive your customer to believe your organic banana is thirty percent better overall than his previously purchased store brand, net of the fact that yours spoils faster? Finally, don’t forget that your biggest competitor may be a customer’s apathy to change.

Are your customers able and willing to pay your prices again and again?

As always, to answer these questions well, you must think from your customers’ points of view. Put yourself in their shoes. Prove to yourself, your team, and your investors that your target customers can and will pay your prices and purchase your products repeatedly.

Startup salespeople, selling new, buggy, unproven, higher priced, but otherwise high-value solutions, are trained to prioritize customers who are both tolerant of risk and have the necessary budgets to try new solutions.

Customers make purchase decisions based on the entirety of their experience. How did they learn about you? Was their purchase experience pleasant? Were they satisfied with their use or consumption of your product (performance, reliability, and durability)? Did you support their service needs well? And once done, were they able to safely and legally dispose of your product? Customers make purchase decisions based on the totality of their knowledge. Whether you like it or not, their perception trumps your data.

• A former customer wore out a pair of your shoes and decided to buy new ones. In his opinion, was he pleased with your shoes? Were they comfortable? Were they durable? Was the price acceptable? Was his purchase hassle-free? Now, he looks at his new choices. Amidst changing fashions, are your shoes still attractive? Can he still afford your shoes, or did he learn to wait for one of your coupons? Finally, what does he think when he looks at your new competition?
• In large, big-dollar, multi-year projects, like building power plants, where few are built per year, one still asks the same questions. A client engineer enjoyed working on a previous project with your contracting firm’s team. Then she moved to a new company. Ask yourself the same question: will she champion your firm as her preferred contractor at her new company? Will she buy your services repeatedly, regardless of where she’s employed?
• Finally, sellers often want to sell to young customers, hoping to sell to them repeatedly over their long lives. For example, knowing young customers can rarely afford top-of-the-line cars, car manufacturers sell introductory cars to younger customers, believing that if they please these younger customers, they’ll buy many more of the manufacturer’s cars.

Recap: The Three Key Marketing Questions

1. What customer needs and wants are you addressing?
2. Who are your customers, and do they really, really want your solution?
3. Are your customers able and willing to pay your prices again and again?

These questions are deep and challenging, and one must have the resources (time, money, skills, tools, and support) to answer them honestly and thoroughly. A test of a founder’s, a team’s, and an investor’s worth is how well they address these questions and support the necessary changes.

If you want help answering these or similar questions, please click contact. In any case, stay tuned, as I’ll tackle beachhead markets next week.

Colorado Technology Ventures coaches and mentors founders and their startups.

Back to Top

Contact

Home

“But Mom!” the teenager wailed, “I need this. All my friends have ’em, and I don’t. It’s not fair.”
  “Sweetie,” Mom replied, “I understand you’re upset. What you’re feeling is your need to belong and have friends. It’s natural. We’re a social species.”
  The teenager pursed her lips. “Mom, please, no lectures, not now. I need this. I really, really do.”
  “What you need is to have friends, to belong—belongingness. What you want is to have this thing, to show your friends that you and they share values, that you’re one of them, that you belong.”
  The daughter stared into her lap and her shoulders heaved.
  “Dear,” Mom said quietly. Her daughter looked up. “Go ask your father.”
  As she slid from her kitchen stool, a tear-streaked smile spread across the girl’s face. “I love you, Mom.”

Needs and wants are related. Both address a pull, a desire for or to something, and good product developers recognize the differences—for startups working to launch their first products, understanding the distinctions is critical.

A need is a necessity, an urge, a fundamental requirement we feel to satisfy our general well-being and our instinct for self-preservation. Maslow’s hierarchy of needs (diagram) presents this well. In the scene above, the daughter feels the psychological need to belong, have intimate relationships, and have friends.

A want, however, is a desire to have or do something. It’s a wish for something. The daughter feels her need for friends, and her strategy is to be someone who’s liked—the hypothesis being that people who are liked have friends. Her tactic, her solution, her want, therefore, is to have what her friends have . . . be it a popular phone, a brand of shoes, piercings, etc., signaling she values the same things as her friends, that she’s one of them, and that she belongs.

The need is the necessity, the want is the solution. (For the product to be a solution, it must be known to customers, which is why companies advertise.) If the image of crying teenagers is not to your taste, try, “I need food, and I want pizza.” Food is the need, and pizza is the solution, the want. Or think of the enthusiast who exclaims, “Wow, this is cool. I can do a lot with this. I want one.” He looks up. “Where can I buy it?”—indeed every startup’s dream.

The Number One Rule for Startups and Product Developers, Generally

As founders, marketers, and product developers, we must understand that every need has existed since time began; our job is to understand these needs and commercialize better solutions—be they goods like new kitchen appliances or services like new amusement parks.

Reflecting on this rule helps us understand three things:

1. Because humans have always addressed their needs somehow, every new product, and startup, has competitors. A new product (i.e., solution) competes, favorably or not, against every existing, available, alternative solution. We need to understand how our product, or solution, compares favorably and unfavorably to all competitive solutions.
2. Humans resist change. Research shows that for customers to change their habits, a new solution should be at least thirty percent better than its competition—hopefully, lower prices isn’t where the team will hang its hat. For example, in commercial markets, electric bicycles are replacing traditional, pedal-only ones; so, thinking from customers’ and users’ points of view, list, value, and rank the benefits (good and bad) they perceive as they move to electric bikes. On the plus side, electric bikes suggest less effort, faster speeds, and some techno-cool ego satisfaction. On the minus side, there might be concerns with range, charging, weight, safety, and high prices. It seems electric bikes have achieved the thirty percent threshold.

Are there exceptions to this thirty percent requirement? If yes, they’ll prove the rule. Staying with bicycles, think competitive racing, where victories are measured in fractions of a second. A solution that cuts a second from a cyclist’s time is a huge advantage. But what is the net sum of the costs and benefits? From the user’s and customer’s point of view, will this new technology achieve the thirty percent threshold? “One second is amazing,” the team coach says, “but will our regulations allow this? Is it safe? Is it durable? Reliable?” Lastly, the coach asks about pricing. The key question for the startup is: will enough coaches, or their buyers, buy enough units fast enough at the target price before the startup spends all its money? I hope so.

3. Finally, reasonable and prompt input from many sources is essential, but quality input from users and customers is crucial. Therefore, we should constantly seek out, speak with, and listen carefully to potential, existing, and former customers, all while keeping an eye on our competitors and suppliers. True, not all customers or suppliers are always correct, and you don’t have to accept everything you learn. Still, you must be receptive and open-minded, constantly tracking your data, and willing to change course as you work to understand customers’ needs and wants.

Stay tuned, next week I’ll tackle the three key marketing questions. So, let’s end with this adage: “There are those who lead, those who follow, and those who wonder what just happened.”

Colorado Technology Ventures coaches and mentors founders and startups.

Back to TopHome

Spring is here and spring means teams are competing for funding, and I urge all teams to scrub these words from their value propositions, executive summaries, business plans, pitch decks: adjectives, adverbs, and pronouns. At least, use them very carefully. Here’s why.

1. Adjectives and adverbs can limit opportunities. I once helped a team develop a lawn-care product targeting residential homeowners. This wasn’t a beachhead discussion, so I asked why they were limiting themselves to residential homeowners. How about renters, people with vacation cabins, or simply people who cared about lawns they owned, rented, or managed? Don’t limit yourself unnecessarily—avoid adjectives and adverbs.
2. Adjectives and adverbs invite hyperbole. Judges and investors ignore hyperbole and may question a founder’s judgment, discipline, or integrity. Judges and investors have often read or heard, “We have no competition, and we will fundamentally and completely revolutionize this limitless, global market.” Resist hyperbole—avoid adjectives and adverbs.
3. The use of pronouns can be confusing. Listen to founders describe their business, and chances are their use of pronouns will soon confuse their audience. Imagine a busy investor who listens to an eager founder and says, “Wait, you said we need x, but who are ‘we?’ Do you mean we, as users or customers, we, as in your team, or we, as in me too? Sorry, I’m confused, but thank you, I need to go.” Don’t confuse—avoid pronouns.
4. Unbridled use of adverbs, adjectives, and pronouns can suggest that you’re nervous, unsure of your material, or careless in your work. Investors respond more positively to succinct and gently-confident individuals. Within reason, be direct and confident—use adverbs, adjectives, and pronouns sparingly.
5. Finally, judges and investors are inundated with information. Efficient writing helps them do their work—avoid hyperbole and use fewer adjectives, adverbs, and pronouns.

As a bonus, you can also improve your writing work by submitting it to one or more online word cloud analyzers. Seeing how often you use certain words will be surprising. Lastly, there’s no avoiding editing. Writers know a piece is never done; it’s just due. (And yes, I’ve edited this piece a few times.)

Colorado Technology Ventures, LLC coaches and mentors founders and their teams. Please visit CTV’s website to learn how it can help you and your teams succeed.

Go to Colorado Technology Ventures.

Use this table to help you organize your thoughts, rank alternatives, and make decisions. You might use this to help decide which market to declare as your beachhead market, which product features to include at launch, which candidate to hire, or where to go for vacation.

Please contact CTV for an MS Excel copy of this template.

This template is free to use, but please recognize CTV.

Back to Top

Home

Scrub Out These Fallacies! Have you ever heard an argument that sounds confusing, twisted, maybe misleading, or just plain wrong? Perhaps you’ve listened to an argument that contains assumptions or definitions you don’t, or don’t yet, accept. And perhaps you’ve unwittingly made such arguments yourself, but you can’t quite explain why they fail or sound off or wrong.

The following presents some twenty-plus fallacies one might encounter in arguments. Use this list to help you better understand arguments and to help you scrub these fallacies from your value propositions, elevator pitches, pitch decks, business plans, etc. Your teams and investors will thank you.

Fallacies

Adapted by Eben Johnson from Logic by Stan Baronett, Oxford Press, 2016; logiccheck.ai (viewed 17 February 2025); and philosophy.lander.edu (viewed 17 February 2025). The Latin translations are from A Dictionary of Latin Words and Phrases by James Morwood; Oxford Press; 1998.

Formal fallacies are logical errors that occur in the form or structure of an argument and are restricted to deductive arguments.

Informal fallacies are mistakes in reasoning that occur in ordinary language and are different from errors in the form or structure of arguments, as found in some deductive arguments.

Deductive arguments are arguments in which, assuming the premises to be true, it is impossible for the conclusion to be false; if yes and yes, then the argument is valid and sound. “A equals B, and B equals C. Therefore, A equals C.”

Inductive arguments are arguments in which, assuming the premises are true, it is improbable that the conclusion is false; if yes and yes, then the argument is strong and cogent. “I’m told this jar contains one blue marble and ninety-nine red ones. Therefore and assuming my information is correct, if I reach in and draw out one marble, I’m likely to draw a red one.”

A loose mnemonic to help remember deductive versus inductive arguments is to think deductive arguments use data and inductive ones use insight—“d” for data and deductive and “i” for insight and inductive.

Enthymemes are arguments with missing premises, missing conclusions, or both.

Principle of Charity, based on a sense of fairness and an open mind, the principle calls for one to give the benefit of doubt to the person making an argument; just as we would like people to interpret our arguments in the most reasonable way, we should return the courtesy willingly.

Personal Attacks

1. Ad Hominem (L., lit., to the individual man) abusive: An attack on alleged character flaws of a person instead of the person’s argument. “Don’t listen to him. He does drugs.”
2. Ad Hominem (L., lit., to the individual man) circumstantial: When a person’s argument is rejected based on the person’s life circumstances. “His opinions have no merit—his party lost the election.”
3. Poisoning the well: When a person is attacked before presenting their case. “We shouldn’t let her speak. She spent a year in jail.”
4. Tu Quoque (L., lit., you too, you’re another): When one person seeks to avoid the issue by claiming the other is a hypocrite. “You say I should not do drugs, but you did drugs.”

Emotional Appeals

5. Appeal to fear or force: A threat of harmful consequences used to force acceptance of a course of action that would otherwise be unacceptable. “If the workers do not accept a wage cut, the company may close its doors. Thus, the workers should accept a wage cut.”
6. Appeal to nature: When an argument assumes that something natural is therefore beneficial, correct, good, right, or valid; conversely, something unnatural is not beneficial, correct, good, right, or valid. This fallacy derives from the assumption that nature, or what happens in nature, is superior to all unnatural things. “Raw food is natural food; therefore, we should not eat cooked food.”
7. Appeal to the people: When an argument manipulates a psychological need or desire so that a reader or listener will accept the conclusion. “We shouldn’t accept illegal aliens. They broke the law entering our country, so we should not let them murder our children.”
8. Appeal to pity: When an argument relies exclusively on a sense of pity, compassion, or mercy to support a conclusion. “We shouldn’t jail this child. After all, he’s an orphan.”

Weak Inductive Argument Fallacies

9. Biased sample: Use of a non-representative biased sample to support a statistical claim about an entire population. “A sample of one thousand religious people suggested 85% of them believe X is wrong. Therefore, 85% of all Americans believe X is wrong.”
10. Composition: 1) The mistaken transfer of an attribute of the individual parts of an object to the object as a whole. “His body cells are small. Therefore, he must be small.” 2) The mistaken transfer of an attribute of the individual members of a class to the class itself. “A motorcycle is noisier than a car. Therefore, motorcycles contribute more to noise than cars.”
11. Division: 1) The mistaken transfer of an attribute of the object as a whole to individual parts of an object. “The elephant is big. Thus, the elephant must have big cells.” 2) The mistaken transfer of an attribute of a class to individual members of the class. “That is a wooden chair. Thus, its legs must be made of wood.”
12. Hasty generalization: A generalization built on a few instances. “I saw a red car speeding. Probably all drivers of red cars speed.”
13. Post Hoc (L., lit., after this): The mistaken assumption that just because one event occurred before another event, the first event must have caused the second event. (The complete Latin phrase is “post hoc, ergo propter hoc,” meaning “after this, therefore on account of this.”) “I felt sick after eating at that restaurant. Therefore, that restaurant’s food is bad.”
14. Rigid application of a generalization: When a generalization or rule is inappropriately applied to the case at hand (it has no exceptions). “Even though the man rescued a child in danger, I can’t believe the police didn’t arrest him for trespassing.”
15. Slippery slope: An attempt to connect a series of occurrences such that the first link in a chain leads directly to a second link, and so on, until a final unwarranted situation is said to be the inevitable result. “If you smoke pot, then you’ll shoot heroin, and then you’ll soon murder people.”

Fallacies of unwarranted assumptions are arguments that assume the truth of some unproven or questionable claim.

16. Appeal to ignorance: An argument built on a position of ignorance. 1) A statement must be true because it has not been proven false. “There’s life beyond Earth because no one has proven there isn’t.” 2) A statement must be false because it has not been proven to be true. “There’s no life beyond Earth because we haven’t received a signal.”
17. Appeal to popular belief: An argument built on the premise that if most people believe something to be true, it must be so. “A great number of Americans believe communism is bad, so it must be true.”
18. Appeal to tradition: An argument built on the premise that something is good or true because it’s always been done so. “This political party is a good party because our family has always voted for it.”
19. Appeal to an unqualified authority: An argument that relies on the opinions of people with no expertise, training, or knowledge of the relevant issue or whose testimony is untrustworthy. “I’m an actor on TV, and what’s going on in country X is wrong.”
20. Begging the question: 1) When a premise is simply reworded in the conclusion. “Pavarotti is the best singer, so no one is better than Pavarotti.” 2) Circular reasoning: A set of statements that seem to support each other with no clear beginning or end. “He never lies, and because he always tells the truth, you should believe him.” 3) The argument contains certain key information that may be controversial or is not supported by the facts. “Murder is always wrong. Therefore, abortion is always wrong.”
21. Complex question: When a single question actually contains multiple parts and an unestablished hidden assumption. “Do you still cheat on your taxes?”
22. Fallacy of accident: When a commonly accepted generalization is improperly used to infer a specific case. “By law, all children must attend school. Your child, although ill, must attend school.”
23. False dichotomy: When it is assumed only two choices are possible when, in fact, other options exist. “We either give up basic freedoms, or we lose the war.”

Fallacies of diversion are when the meaning of terms or phrases is changed within the argument or when our attention is purposely or accidentally diverted from the issue at hand.

24. Equivocation: When the conclusion of an argument relies on a shift in the meaning of a term or phrase in the premises. “He’s an idiot. Since idiots should be kept in hospitals, he should be in a hospital.” Or, when a politician says, “The fact of the matter is . . .” but states an opinion rather than a fact. “The fact of the matter is criminals should be in jail.”
25. Missing the point: When premises that seem to lead logically to one conclusion are used instead to support an unexpected conclusion. “It may take years to solve a crime. Therefore, our police should have the same equipment as our military.”
26. Misleading precision: A claim that appears statistically significant but is not. “Our desert foods contain 30% less fat than our competitor’s, so you should eat our deserts to lose weight.”
27. Red herring: When a person completely ignores an opponent’s position and changes the subject, diverting the discussion in a new direction. “She says, ‘Abusive use of social media has hurt some children,’ and he replies, ‘How can we criticize the use of the internet when it enables families to stay in touch and people to purchase airplane tickets?’”
28. Straw man: When an argument is misrepresented to create a new argument that can be refuted easily. “He says, ‘Intelligent design shouldn’t be taught in science classes,’ and she replies, ‘He’s against teaching intelligent design, but he’s really trying to end religious freedom in our country.’”

Finally, a helpful recommendation: If you and your interlocutor are arguing and at an impasse, then pause, step back, and review and address your definitions and enthymemes (see above)—don’t forget to use the principle of charity (see above). You might discover that your difficulty is based on having differing and unstated assumptions, definitions, beliefs, etc. “Oh, wow, I thought x meant y. My mistake.” Or, “Yes, of course, I accept exceptions—I just didn’t think it mattered or that I needed to say so. It’s just that . . ., and yes, when I said ‘all’ I really should have said, ‘most.’ My mistake.” Try it. You’ll be surprised to find you have more in common with others than you first thought.

Back to Top

Home

Much has been said about the size of your Total Addressable Market (TAM). However, it’s easy to get confused and overly complicated. For example, one might ask, “Is my TAM at launch, a few years after launch, once we’ve gone international, or added new products?” I use a simple modification to TAM. I add, “At Launch”, or “+3 years”. It renders as “TAMAL” and “TAM+3”.  Thus, at launch, when we have one to a few new products, haven’t added features to win a larger market, haven’t gone overseas, etc., we can easily remember and say that our TAMAL, our Total Addressable Market at Launch, is X units and/or Y dollars. Click here for an example of a TAM analysis as presented in a slide deck. Try it. It’s easy to present and easier to estimate.

Back to Top

Home

Know your customers. Knowing your target market, down to an accurate description of your archetype customer, is critical to your business. It helps you develop your products, advertise well, and sell successfully. Known as developing your customer persona, you and your team should describe your target customer in such great detail that you can spot this person at a distance with nothing more than a glance.

Here’s a write-up shared by one of Eben’s former students:

---

“I attended our No Name Bar pizza night after the last class of EMEN5090 this semester. I was a distance student, so had never met anyone in class before (including Professor Eben Johnson). I remember him saying in class that he could guess the car that people drive. Having never met him before and being pretty confident that he could not guess the type of car I drive, I told him that I was hoping he would try to guess my car.

He started off by asking me a few questions: Where do I work and how long have I worked there, what is my job title there, what do I like to do for fun, do I have any kids or dogs or roommates, etc. I answered those questions and he quickly started to narrow it down. He knew right away it wasn’t an SUV, that it had a leather interior (no idea how), that it was not American-made, and then he even guessed my boyfriend’s car right away after talking about him for just a minute (even down to the detail of the Jeep having a winch on the front). He thought about a Prius but quickly moved away from that (without me saying a word). He asked a few more questions and then said, “It’s not a BMW 5 series. I’m thinking it’s a BMW 3 series . . .” So far all he knew was I like volleyball and taekwondo, I have worked at Lockheed Martin as a systems engineer for 7 years, I have a boyfriend with a Jeep, and I have no pets or kids. There were a few other people there trying to guess, and no one even came close. He continued to come up with details on the car, such as dark blue exterior, sedan, etc.

Before I left, he made his final guess of a “Dark blue BMW 3 series, black leather interior, and the dealership name around the back license plate.” I couldn’t believe it. Sure enough, I drive a dark blue BMW 3 series! I don’t think I seem like the kind of person to drive a BMW. In fact, the reasons I bought it aren’t for the name or the luxury or anything anyone normally thinks of. It’s all-wheel drive, the back seats lay down (harder to find than you would think), it can get up to speed on the highway quickly, gets good gas mileage, and it’s quiet. I was in shock. By this point, everyone was listening, and I admitted that he got it exactly right . . . except for the interior color. I thought my interior was tan, and I honestly didn’t know if my back license plate had the dealership’s name framed around it.

I got back to my car (parked a few blocks away, so there was no cheating there), and the first thing I did was look at the back license plate. Sure enough, Ralph Schomp BMW is framed around it. I then got inside and immediately felt extremely stupid . . . My interior is black!!! It was the only detail I thought he had wrong, and he even knew better than I did! I had a rental car for a few days before that and the interior of that car was tan, so that’s my excuse for thinking it was tan (in addition to the fact that it was my final week of grad school!). I felt ridiculous, but it wouldn’t have been fair to let Eben keep thinking that he got the interior wrong, so I sent him an email that night letting him know that he nailed it, down to the detail (even details I didn’t remember).

It was really incredible! I still have no idea how he could’ve possibly guessed that with the information that he had and this being the first time I met him. I had to share this story to say just how impressed I was . . .  I didn’t believe it, but I do now. Try him out :)”

Back to Top

Home

Rules for inventory management. While one can easily devote a career to management of inventory, here are five simple rules that will help any operation:

1. • Avoid intelligent part number systems – they get complicated quickly and hard to maintain; one exception is to let R&D have separate part numbers, often identified with an “X” prefix, where these development parts are kept separate from, and not required to meet the standards of, production parts
   • Label, stamp, or mark parts with part number and revision levels (in the case of processes involving bulks such as liquids, make sure the containers are similarly marked)
   • Prioritize and control direct material by levels of importance – an ABC system; “A” parts may be expensive and/or long lead-time parts; “B” parts are somewhere in the middle, and; “C” parts are cheap and plentiful, such as simple fasteners
   • Control your inventory counts, especially for “A” parts, likely for “B” parts, and less importantly for “C” parts
   • Never store indistinguishable parts near each other – if one can’t tell this part has been hardened and this one not, then store them at least 3m apart from each other

The key is to have a system that delights your customers in terms of price, quality, and delivery, that is flexible, and that people are willing to use consistently.

Back to Top

Home