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Elvis Has Left The Bubble

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By NicoDetourn
February 14, 2002

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I wrote in #26459 << All the boards are social boards -- it's just that many folks on the "stock/investing" boards never realize that. The question is, How well does the Fool realize it? And, What does that mean to them? And what does that mean for "The Motley Fool" as a community platform? >>

DavidG wrote in #26461 << Great question, "Whither the Fool?" As always, I would love to hear your opinion. >>

Hi David. It's not a simple question, is it? I know my quick answer would sound nonsensically flippant, if not a little hostile: The Motley Fool should get out of the financial info biz.

In fact, I'm some 90% serious, and without hostile intent. But a more detailed view of the Fool's future would require at least a few additional words. Actually, it would take a partial recap and analysis of the Fool's history, which makes the question more like, Whence the Fool? In the spirit of The Fool, and of putting off other things I should be doing, and since you asked (that'll teach ya), here's my take.

The answer revolves around the two terms I emphasized in my original post -- "social boards" and "community platform." There are also two "threads" to this story. (Also, I realize I've excluded from this analysis the interplay between Fool.com and the books, radio show, newspaper column, seminars, and other products that also make up TMF, and which would obviously color and complicate the analysis, though I'm not sure it would significantly change the conclusion.)


Thread 1: The brand stripped bare

I believe that some time back the Fool missed a strategic opportunity that it is still paying for today. This was in and around 1998-1999 -- the Rule Breaker, Rule Maker period, when the bubble was at high-noon, and the Fool was establishing its position as one of the Web's leading financial news and information brands. Use of Fool.com and the message boards was really taking off, something that as a board stroller I experienced not so much as riding a wave as standing in front of one, and, on many occasions, under one.

But the Fool's growth contained another dynamic in which usage patterns were shifting from the stock boards to the so-called social boards as areas like Fool Cafe and Speaker's Corner were opened and became increasingly popular.

If the significance (as opposed to the statistical fact) of that shift in usage was recognized by the Fool, it was not acted on adequately, if it was acted on at all. It's been my view that this is where the Fool miscalculated in the management of its brand. Which is especially ironic given how the Fool is made up of such highly brand-conscious people.

This is where a longer, more nuanced analysis would be necessary, so forgive the (relatively) quick take that follows.

Basically, by keeping the focus of the Fool's brand on things financial -- a strategy that must have appeared at the time to make perfect sense and was probably never seriously questioned -- the company's brand-building efforts fed into, or at least ran counter to, an already growing gap between the meaning of its brand as a financial resource, and the actual use of its product as a social environment and community platform. In other words, at the same time you were working to tighten the popular association between "Fool" and "Financial," the natural dynamics of your social community base were making that association, not necessarily looser, but less relevant.

So, instead of making the classic mistake of blurring the brand's focus, the Fool erred in the opposite direction by missing an opportunity for a necessary strategic repositioning of what The Motley Fool brand meant. (You can almost say that during this period the brand was mismanaged by being managed too well.) In essence, the Fool miscalculated its brand position by misidentifying its real and most important product: Foolish-minded community as environment and platform, which, stripped bare, is really what you "do best." It's the platform, Fool.

To be clear: When it comes to the financial focus the Fool is known for, I believe that while it was initially essential, it became secondary as the platform and brand developed, and today may be a greater liability than it ever was an asset.

What? The Fool's financial focus a liability?? Is this chick crazy???


Thread 2: Bubble bubble

This growing divergence between the intended position and meaning of the Fool's brand and the actual use of its product (as sketched above) soon ran smack into something the company had no control over: the Spring 2000 market meltdown. This not only exacerbated the company's brand-product divergence but intensified the consequences. As above, this issue also needs (and deserves) a more detailed analysis, although over the years much of that analysis has appeared as a real time work in progress on certain boards, the Amazon board coming immediately (and most brutally) to mind.

Simply put, and rightly or wrongly (a debate I ain't entering here) as the general market collapsed, and as the dotcoms in particular imploded, much of the Fool "thing" lost credibility.

The Rule Breaker (the renamed flagship Fool Portfolio, for which I occasionally managed to meet deadlines) and Rule Maker ports lost paper value while their respective managers declined for philosophical reasons to either take profits or bail out. However principled those moves might've been (and however "right" they might somehow turn out to be in the fullness of time), they didn't exactly add any post-bubble financial credibility to these high-profile, brand-defining products, or to the popular view of the Fools "model" portfolios and investment approaches. Other ports shut down for various reasons, with each closure further chipping away at the Fool thing.

More recently, the steady scaling back of publishing schedules for the surviving ports and other branded features, and reduced editorial output in general, has enhanced neither the credibility nor the visibility of The Motley Fool as a financial info brand. (That's not meant as a judgment on current output, BTW.)

These post-bubble dynamics further fed the divergence between TMF's positioning as a financial brand and how its users (and eventually its paying customers) used its core product -- the increasingly socially oriented community platform.

And so.....


Thread 3: Elvis has left the bubble

The great thing about the TMF brand has always been the way it puts forward and celebrates and transposes into a modern mode the idea and image of The Fool itself -- Shakespeare's Fool, the teflon schmuck freely speaking truth to power. That, David and Tom, was a truly brilliant and inspired conception, its popularization is alone a great achievement. And, at bottom, that's the only reason anyone is here today.

Here's the rub.

The great mistake you all made was in identifying too exclusively and for too long The Motley Fool brand with things financial, rather than with a less anchored, more abstract sense of Foolishness -- with Foolishness itself. In doing that, you've handicapped the brand's potential by tethering it to market events and investment philosophies. From a brand perspective, I have to ask, why do that?

On the one hand, there is no necessary association between the idea of Foolishness (the essence of TMF's appeal) and things financial. That kind of freedom, the malleability of meaning, is a great brand attribute. Compare for example the lack of a necessary association between, say, "Amazon" and "books," which leaves relatively unfixed the potential meaning and perception of the brand. (On a different track, imagine, say, "Rogue," not as a distinct brand, but as a category umbrella, left to flourish all those years ago without concern for brand dilution. Also think, perhaps, Yahoo! Groups, only with bells.)

On the other hand, the post-bubble associations between the Fool thing -- the Fool's brand meaning -- and market events are very real and not terribly flattering. Those associations weigh down the brand which in turn weighs down the Fool Community platform as a company product. This has been repeatedly demonstrated over the last two weeks:

When people ask, "Why should I pay for TMF when I can get financial information and discussion in a zillion places on the Web," the best and most honest responses have absolutely nothing to do with finances and investing. Instead, the virtues of the Fool are expressed in terms of tone, mood, intelligence, environment, community feeling, respectful interaction, helpful sharing, efficient interface, superior administration (despite Bogey! ;-) and an overall joie de Fool.

(I'm aware, of course, that readers, especially new investors, also express appreciation of how the Fool dispenses basic financial information, e.g., Fool's School. But while that complicates it, I don't believe it negates my core argument.)

Despite what may be a late hour, I believe TMF should do today what it should have done (and what I always thought it would eventually do) some three or four years ago: Make a concerted, strategic, and, no doubt about it, risky move away from its identity as an investment and financial info brand and reposition itself as a less focused and therefore stronger and more weatherproof platform for wide ranging, freewheeling discussions (and also more formal content) in the full Spirit of The Fool -- which is exactly how the Fool Community has been positioning itself for years.

So, whither the Fool? Where the Fool Community leads.

The effort to position The Motley Fool as a financial information brand for the ages was last decade's conceit. That was then. This is now. Elvis has left the bubble. But The Fool can still Fool on.

Happy Valentine's Day.

Nico
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