The TikTok Saga Illustrates How Andy Grove Was Right: Only the Paranoid Survive

"Do you want to hear one more?
This one's a real knee-slapper."

The House of Representatives has approved a bill to cut off TikTok in the U.S. The bill, titled Protecting Americans from Foreign Adversary Controlled Applications Act (H.R.7521), will be signed by President Joe Biden as soon as the Senate approves it. 

This brief blog post is not about the pros and cons of TikTok, nor is it aboutthe pros and cons of our government shutting it down. Rather, it is about a lesson I learned the hard way on Facebook a couple years ago.

At some point in time I was monetizing my blog with Google ads, and even though the revenue stream was mainly a trickle, there were monthly deposits made to my credit union account. It was daily habit to write, publish, then share on other social media, primarily Twitter and Facebook. Because I wrote frequently about the local arts scene, a large percentage of my readers came through the Facebook platform.

Suddenly, without explanation, I was unable to share my blog on Facebook. And since the Zuckerberg-founded enterprise also owns Instagram, my blog was also restricted there as well. 

The lesson is this: if you do not own the digital real estate where you have established your business, you're vulnerable to having everything you've built get dismantled.

This experience prompted me to see who are currently the biggest financial beneficiaries on TikTok. So I asked Google, which replied:

According to explodingtopics.com, the highest-paid TikTok influencers in 2024 are:

• Charli D'Amelio: Estimated earnings of $17.5 million
• Dixie D'Amelio: Estimated earnings of $10 million
• Addison Rae: Estimated earnings of $8.5 million
• Khaby Lame: Estimated earnings of $5 million
• Bella Poarch: Estimated earnings of $5 million
• Josh Richards: Estimated earnings of $5 million

I never heard of any of these people but superficial skim on Google shows that the top three are all young women. Addison Rae has 88 million followers.

If you wonder how they make their money, it varies. Once they have become established as influencers, they can get ad revenue or payment for promoting other companies. Some become a brand themselves and profit from selling their own products. And many profit by sharing their videos on other platforms.

Not everyone is making the big bucks the six names above are pulling in, but if Congress pulls the plug I'm guessing that a lot of these social media personalities will take a financial hit, as will many of the smaller fish swimming in this cyber-sea of social media enterprises.

According to Wikipedia the Senegal-born Khaby Lame has surpassed Addison Rae in number of followers and as of June 2022 had 142 million followers just by being an "everyman." You can read Khaby Lame's story here.  Or watch him do his comic antics here. 

142 million followers? Wowzer.

Lesson #2: When it's going good, don't take it for granted. Only the paranoid survive.

RELATED LINK:

Banning TikTok Would Give the Feds Way Too Much Power

Serious Labor Shortages Are Threat to Economic Recovery

Help Wanted. Now Hiring. It seems like everywhere I go I see signs announcing the need for workers to fill vacancies.

As it turns out this appears to be a national problem, not just a Northland issue. Nearly every restaurant is short of help here. A friend who owns 11 fast food restaurants between Duluth and the Twin Cities normally employs 350, but has to keep things running with 250 employees. Panera Bread has put up a sign that says they're limiting hours because of the shortage of help.

The government's good intentions in providing financial help above and beyond regular unemployment has, for many, become a disincentive for returning to the workplace.

In addition to labor shortages we have materials shortages, partially caused by labor shortages in this arena. According to a Bloomberg article, Biden's infrastructure plan could be hamstrung by the lack of qualified workers to execute this ambitious dream. Currently the U.S. manufacturing industry has 500,000 positions unfilled.

The great irony here is that this massive infrastructure push has as one of its aims to provide Americans with more jobs. But with the shortages in materials, we may end up outsourcing to other countries, benefiting others rather than those we're supposed to be helping. Lumber (now up five-fold) aluminum, copper and cement prices are high due to tariffs, so building homes has become exceedingly expensive. (EdNote: We have lots of copper inside the U.S. borders, but have made it near impossible to mine it.)

An article at CNN.com begins with this telling Q & A: "Chicken, lumber, microchips, gas, steel, metals, chlorine and ketchup packets: What do they all have in common? They're all (nearly) impossible to find."

A New York Times article this past week is titled "How the World Ran Out of Everything." It explains how the evolution of "Just In Time" manufacturing and sales systems resulted in businesses minimizing inventories. The concept of J-I-T is fine when all is good. It reduces waste, and reduces the amount of space you need to store things, which also reduces costs. It's efficient. 

But when the entire system experiences a major hiccup -- like our unplanned year-long pandemic and subsequent lockdowns, these efficient systems can be disrupted in ways many businesses could never have imagined. That appears to be what we are now experiencing, at a time when we believed everything was opening up with clear sailing ahead.

Once again, Andy Grove has been proven right. His book Only the Paranoid Survive details all the forces that businesses must juggle and manage. He then asks, "What happens when one of these forces -- government regulations, consumer demand, raw materials, labor, financial impacts, legal matters, etc. -- hits us with an unexpected 10X tsunami?"  

For businesses that survive this will be remembered as the year of the wake up call. 

The weird thing is that politicians and think tanks will undoubtedly spend gobs of money and time piecing together a strategy designed to ensure that it never happens again. Alas, these things can never be so easily predicted. It will surely come in a manner that was unforeseen. Like Pearl Harbor. Like 9-11. Like the Housing Crisis. Like the Pandemic. It will be original. It will be different next time.

Something to think about. 

Marketing Matters: Lessons from the Disruption

Originally published in Business North, June 2020

One of the first things I thought of when the quarantine/lockdown struck was Andy Grove’s Only the Paranoid Survive. The introductory blurb for this late 90s bestseller begins like this: “In Only the Paranoid Survive, Grove reveals his strategy for measuring the nightmare moment every leader dreads — when massive change occurs and a company must, virtually overnight, adapt or fall by the wayside — in a new way.”

The concept from Grove’s book that I remember most was the 10X concept. In one of the chapters he detail how there are a variety of forces that have a bearing on one’s business in one way or another. Cost of raw materials, cash flow, government regulations, legal matters, consumer trends, competition, etc. Grove asks, “What happens when one of these variables unexpectedly changes by a ten-fold degree?”

The full title of the book is Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company. The book is an insightful and candid account of a challenging period in the history of Intel, the company Andy Grove founded and led for many years.

We never know from which angle that 10X tsunami will come. We do know that adjustments will have to be made if we don’t want to be swept away.

Grove’s purpose was to make us aware that although we can be slammed by the unexpected, we can actually exploit these events to come out stronger and better.

Current Events
The Coronavirus Disruption is precisely the kind of 10X tidal wave that Andy Grove warned us about. You don’t see it coming. You can’t even determine what its full impact will be. And until the fog lifts, it waits to be seen all the things we will have learned from this.

One surprising lesson was discovering how quickly people were able to adjust from working at the office to working from home. In our contemporary hyperconnected world it seems to have happened quickly, and certainly would have been different in the 70s or 80s.

When it’s over many companies will be evaluating whether their people were more productive or less. It could change the way companies work. Already, Twitter CEO Jack Dorsey has announced that Twitter employees can work from home forever. Fewer meetings, more time to make calls and get real work done. Less commuting also gives people more time each day.

Working from home can have distractions, however, and for some there’s value in getting out of the house.

Impacts on Marketing

A few weeks back I caught one of AimClear’s weekly Facebook presentations in which founder Marty Weintraub and Susan Wenograd discussed how crisis changes consumer behavior, specifically with regard to this currant pandemic. I found it fascinating because instead of having the media interpret data, Weintraub and Wenograd showed us the data that’s available to all. We were free to draw our own conclusions, though they also highlighted features that a novice might not catch. The webinar was entertaining, something akin to Siskel & Ebert, except their banter involved explorations of marketing data as opposed to Hollywood filmdom.

What’s going on? Weintraub’s answer: Google can show you.

Follow the Data
As every marketer knows, the world is awash in data. Google has made it its business to organize this information and make it useful, in a variety of ways. Google Trends presents a raw cross-section of actual search requests that people make every day on Google. The info is categorized and aggregated by whatever demo size you’d like, from global to local baskets.

According to Weintraub, “Marketers use Trends to measure trending search interest for keywords and related keywords. Nimble marketers can use Trends to:
• Spot rises and losses in brand interest for their brands and competitors
• Note fluctuations in keywords related to: shopping, information, and/or interests
• Craft sales and competitive strategies
• Explain corollary trends in site traffic and revenue
• Categorize and subcategorize search interest
• Understand geographical distribution of search interest”

For example, if you go to Google Trends (Google it if you don’t know the URL) and type in the words “home delivery” in the Search bar, you’ll see a relatively flat line for the past year until March when it dramatically broke to the upside.

Another one is “curbside pickup.” How often have you Googled that in the past 20 years? It’s spiked big time these past two months. Do you deliver or do curbside pickup? Is it on your website?

There are a variety of ways local marketers can use this information. And best of all the tool is free. (To learn more about how to use Google Trends as a marketing tool, ask Google.)

Should You Pull Back on Advertising?

You miss a lot when you don't stay current with what's happening. This woman
missed the Industrial Revolution, returned just in time for the Internet.
She is now the brains behind the Google Algorithm.

According to the World Federation of Advertisers (WFA) nearly 90% of all large multinationals have deferred new ad campaigns while more than half are holding back for six months or more. Is this a good move for you though?

It is generally agreed that brands should not “go dark” during the crisis. In fact, history has a number of interesting anecdotes regarding gains and losses in market share during recessions.

During the Great Depression Post cereals cut their advertising while Kellogg’s doubled down and even introduced a new product, Rice Krispies. Kellogg’s profits increased by 30% and the company overtook their rival in market share.

In the 1990-91 recession McDonald’s cut its ad spend, confident of its leadership in the fast food space it dominated. Golden arches were everywhere. Maybe they thought this was enough of a reminder to keep lovin’ it. Taco Bell and Pizza Hut took a different approach, pushing aggressive campaigns that respectively earned them 41% and 60% increases in sales. McDonald’s sales decreased by 28%.

Summing Up
As Thomas Paine famously wrote, “These are the times that try men’s souls.” Arguments can be found to support nearly any action you take. If there’s ever been a time to step up our game, this is it. Only the paranoid survive.

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Large Multinationals Tighten Ad Spend; WFA press release, 13 May 2020. https://wfanet.org/knowledge/item/2020/05/13/Large-multinationals-tighten-ad-spend-squeeze-according-to-WFA-Covid-19-Response-Tracker