Author Archives: hippotential

The “Cheese” Has Been Moved!

There was a book published a few years ago entitled, “Who Moved My Cheese?” In this book, the author made observations about the employment market and how many who thought their jobs safe were laid off, unawares. The main reason these former employees were finding it rough to obtain rewarding (or any!) new work was that the recruiting and hiring world had changed since their last go around. Small businesses are having  a similar “wake up and smell the coffee” experience with regards to finding customers.Mouse carrying cheese

With the surge in social media and internet based marketing, many small companies are falling behind in their marketing and sales and don’t know how to catch up. Recently, I spent some time with a businessman who had built a business model around websites, online advertising, working the search engine algorithms, and investing his personal time in keeping it all working smoothly, despite being a millionaire. The irony? He was not in a high growth startup, the darling of the media and purported environment where people spend countless hours on such matters. He owns a number of residential facilities for people recovering from substance abuse challenges. Keeping his vacancy rate as low as possible is his primary metric. Though he is in a non-sexy industry niche, he and his team recognize that customer pipeline development begin s with an internet strategy.

The two of us were discussing his strategy and tactics with some others over a meal and the question arose as to what is the role of relationships and “boots on the street” in his model. Together, we explained that target clients are most likely to perform some internet research on your organization before a personal meeting ever occurs. Furthermore, we argued that relationships are being initiated and nurtured over the internet at a quickening pace. We were not saying that the interpersonal meeting away from all things digital was unimportant; what we were explaining was that, in a time compressed world with information at our fingertips, the small business owner must earn the right to have the personal conversation by having a strong online presence.

Some basics to creating that presence:

  1. Your website needs “rich,” updated content — videos, pictures, etc. that you keep current
  2. Making use of Google Local and other local business listing services like Yelp is key – do it!
  3. You should advertise online or simply use social media to drive traffic to your site
  4. Determining what information to share through business social media accounts begins with having a target
  5. Break your customer base down into segments, each of which you can target with messages that resonate
    • You may need additional, mini-websites (called “micro-sites”) for each segment
    • You definitely need wording that is unique to each segment
    • Your social media and/or advertising needs to be a priority!

If you want more and better customers, be purposeful about how you develop new business in a digital world!

Success Bred From Culture

In a post today for Inc. magazine online, Scott Elser, who is the co-founder of Launchpad Advertising, discussed what he and the founding team consider to be the driving force in the company’s success: culture. Elser described how he and his partner left a big advertising agency to create their own. In typical fashion, they did tons of analysis, planning and revisions. However, by devoting precious time to define the work culture they wanted to have inside the agency, they successfully set the “DNA” for all who joined them in their dream.

The co-founders knew they had to combat the stereotypes of arrogance and poor attitudes that prevail in the industry. Elser writes, “While most people I’ve worked with at agencies are great, there are always a few that bring their own brand of “I am awesome and you are not.” That attitude can set the tone for an entire office. They make things miserable for everyone. We wanted to create something different–an agency that people actually wanted to work at–and started that effort on day one. Long before we had employees, we envisioned a day in the life at the Launchpad of the future. What would the culture be like? How would people feel about working at this agency? What would they say to their friends about the agency? “

Corporate culture diagramWord to the Wise (Founder)

While it is easy to become consumed with any of a number of details during start-up mode, one should not lose sight of the value of a strong company culture. Culture does not just happen; it must be created! Think through what you have enjoyed when working with others in the past and what you desire to avoid. Consider what intangibles create a great place to work versus those that create division, boredom, and low morale.

Launchpad created an objective that is paraphrased by Elser in his blog post as follows:

“Like any job, there are good days and not so good days. But we want to create an agency where each and every person who works there can come to work every day believing that today can be a great day.”

He goes on to offer the following observations:

From this strategic objective was born what has become our primary rule: the Launchpad No Jerks Policy. It’s born of the belief that there are talented people out there who are also nice people, so there’s no reason to hire someone with a negative attitude, huge ego or destructive personality. 

It was a year later we hired our first employee, and we’ve since staffed up to become a 50-plus person shop. From day one our No Jerks Policy has driven every hiring decision we’ve ever made. Even contractors and freelancers are held to this standard. The result is an agency that delivers a great creative product and is great to work at. There’s more collaboration, ideas really can come from anyone and the environment is more “drama free” than any company I’ve ever worked at before. We’re an agency where the owners hold themselves to the same standards as everyone else. 

How about your company–whether it employs 5 or 500, you must consider how many “jerks” are members of your staff. What are the implications to customers/clients, attracting new employees, retaining top performers, and being able to delegate as the business outgrows your ability to manage it all? 

Company culture is the result of best intentions mixed with a long term commitment. 

 

Entrepreneurial Banking

There is a long standing feud between bankers and entrepreneurs. What, one may ask, is the point of contention? Money, of course! Banks have money and entrepreneurs would like some of it in the form of loans to fund their start-ups. However, many in the banking community  consider start-ups far too risky. As a result of tougher credit standards enacted during the recession, less small businesses than perhaps at any prior point are qualifying for loans–even if they have strong management teams, revenues, and a significant upside.

What if banks awakened to the possibility of viewing start-ups as a diversification in a portfolio of loans? What if entrepreneurial ventures became appetizing to banks exactly because they represent a potential upside that is greater than the average loan return and, therefore, worth a strategic role in an array of credit decisions? Joy of all joys!

bank caricature

Recently, the Evening Standard profiled Ana Botin, head of Santander in the UK . The article featured Botin’s views on why her bank vowed to support small to medium sized businesses across the UK. It was 

reported that Santander “didn’t want to play it safe and that they had in fact spotted a gap for high growth, risky companies who needed financial support without losing a chunk of equity.” Despite being a big player in the savings and mortgages arena, plus enjoying success in the retail sector with 14.6 million customers, the bank had made a bold move to more aggressively support SMEs.

Kelly Dolan, writing for Entrepreneur Country, reports witnessing Botin open an event organised by Santander Breakthrough in Oxford last year in which she shared her personal story of entrepreneurial beginnings in venture capital and consulting prior to embarking on her current banking career.  Dolan also noted the “passion Botin displayed when speaking on the founding story of Santander, once a small Spanish bank that prided itself in helping local businesses get off the ground. Ana then spoke metaphorically on how she had witnessed how similar the banking industry was to an army, and that as CEO it was her mission to break down barriers and infiltrate the ranks so that bankers could finally begin to understand the importance of UK SMEs and why they were so crucial to British economy, which would of course reflect on the success of the bank. And for anyone that may have doubted her rhetoric on the day, you only had to spot Ana laughing and joking away with fellow keynote and Ella’s Kitchen Founder Paul Lindley during the interval to see that she felt right at home conversing with entrepreneurs. Ana’s presence and the Breakthrough event as a whole, which the bank runs for free across the UK to enable entrepreneurs to seek knowledge, network and share ideas, demonstrated to me that Ana had big plans for small business owners, along with a serious dose of empathy due to once being in their very position once before.”

 

Noting how rare Botin, her story, and Santander’s appreciation of the SME market are, Dolan questions whether more banks European banks should get into the “game.” I wonder the same thing about banks in the United States. It certainly seems that many of the larger banks seem disinterested in any deal that is truly entrepreneurial, disdaining the risk though the potential “hockey stick” growth is certainly desirable. Community banks seem slightly more supportive, and venture banks more so still. Let’s hope that many more will observe Santander having success and reconsider their own models!

 

From Idea to Commercialization in 4 Days

When not consulting with small businesses who have revenues, I often volunteer time with a start-up nonprofit named EntreDot. The entrepreneurs with whom I have the pleasure of interacting through this connection are amazing. Within the innovation centers that the organization operates, there are many second career entrepreneurs. However, a different demographic intrigues even more: high school students. This past week, I had the opportunity to advise students at Wake Forest Rolesville High School in how to launch a business. What a blast!

While adults often underestimate what a young entrepreneur can do, this group has been a very pleasant surprise. The students were allocated into teams to prepare a business pitch in five days. Coming into the week, they had not previously been working together. One of the student teams did not even begin their business until Tuesday and only then as a result of teachers requesting they form a separate team because their original team had grown to too many participants. Faced with a four day deadline, this group of young entrepreneurs launched Bands For Boston. Bands For Boston is a social cause enterprise that is selling wristbands to support the Boston community in the aftermath of this week’s tragic bombings at the Boston Marathon. 

Bands For Boston

The student team used the debit card of one of their own to order the first 250 bands on Tuesday. By Wednesday, they had enough pre-orders that they went ahead and ordered an additional 250 bands. Through networking, social media, and some joint promotions, the team looks to sell over 1,000 bands in their first 10 days in business at a price of $5 each. Initially, they plan to contribute 60% of the proceeds to the American Red Cross to support relief efforts. They are hoping that, as volume grows, they will be able to raise the percentage contributed to 80%.

A process was followed by these young entrepreneurs that is significant for new small business founders of any age.

  • Ideation – The team first thought about doing lanyards for key chains, but thought that they couldn’t get enough traction. Once they decided to do the wrist bands, their thoughts gelled and they were able to unite around an idea that evoked passion. Quick math showed the team that, if they would put forth the effort, there was enough demand for what the proposed to create sales substantive enough to reward their efforts.
  • Conceptualization – The next effort the team went through was to identify target buyers. The first concentric circle they considered were student peers, followed by neighbors and Twitter followers. At each level, they were able to verify demand. They they put together a business model to order from an online source and deliver the bands to those who purchased on a pre-sale basis.
  • Creation – The proof of concept for the idea came into focus as the first set of bands arrived, were distributed after school, and new customers were identified as those who saw others wearing the bands. They had established some name recognition and were on their way to a business.
  • Evaluation – At the three day mark, they began dealing with inventory, marketing, and finance issues relative to reorders, expanding their reach to other geographic markets, and planning how to scale the business.
  • Preparation – The team was now confronted with the challenge of how to launch on a broader basis and put into place the team responsibilities that would facilitate growth. They are pursuing relationships with sports teams in the Boston area to have promotions at games whereby the bands could be given away to early attendees and sold to subsequent ones.

Commercialization is now the challenge of the team. They are trying to figure out how long these bands will be popular and what they may do for an encore. In the meantime, they have tapped a latent demand while helping a community and earning some income. Kudos!

Wannabe Entrepreneur – Or Real Deal?

 

What’s the difference between an entrepreneur and a “wannabe?” In many settings, there are people who talk a good game, but don’t really have the follow through to launch a business. Erica Douglass, a 20s something entrepreneur who already sold a a business for over $1 million, has identified 5 traits that differentiate earnest entrepreneurs from what she terms “wantrepreneurs:” 

Wannabe

1. A willingness to learn anything.

You’re never going to be successful if you externalize what’s wrong (I can’t hire a developer because I don’t have any money/no one will give me money, and therefore I can’t start or build my product.) It’s a poor attitude.

Isn’t it better to hire someone who knows what they’re doing? In the future, yes. Right now, though, you don’t even know how to tell whether someone knows what they’re doing or not. Plus, without a spec or prototype, you’re going to spend a whole lot of extra money and time having someone else do it wrong over and over again (because again, even the best developer can’t read your mind.)

Once you understand how building a website works, you can dip your toes into code. Read up on the differences between Python, Ruby on Rails, and PHP. Pick one to learn. Spend a week learning the basics. Then spend the next couple of months hacking on weekends. This will help you figure out whether that developer you’re about to pay a fortune to actually knows what he or she is doing.

The point of this exercise is three-fold. One, it gets you familiar with how to articulate your vision to a developer. Two, since you have more time than money, it shows everyone (including prospective developers) that you’re serious and committed to this project. And finally, if you can get something up there, even if it’s just a sketch with buttons that don’t work, you can start showing it to prospective customers and asking them to commit to paying for it. (Note that I didn’t say “Asking them how much they would pay for it.” I said “Asking them to commit to paying for it.” There’s a huge difference. Only one path will show you whether your idea will actually be successful.)

2. Going above and beyond to build something that people want.

If you haven’t been in your market for years, and you have an idea for a product that requires the market–your potential customers–to think about things in a totally different way, that’s the most likely path to failure. So what’s the better option? Finding out what’s in the market and what people hate about what’s out there. Then, instead of trying to “shock” them with something totally new, just incrementally improve on what’s out there.

3. Not knowing where your next dollar is coming from, but going forward anyway.

Startup founders and entrepreneurs are inherently scrappy folks. The people I hear who “pooh-pooh” consulting and “trading dollars for hours” are the ones most likely to fail on a project. If money gets tight, scrape together as much consulting work as you can and live as frugally as you can. Yeah, it’s not ideal to do consulting and try to run your own business, but you do what you have to do.

Ask yourself this: Do you believe in your startup idea so much that you’d be willing to sell your car and drive a beater for the next year in order to fund yourself for another month? If the answer is no, you need to decide: How committed are you to running your own business?

4. Being willing to launch and ship even when it’s not perfect.

This has been the hardest one for me. There’s always one more feature to build, or something that customers expect that you don’t have. Customers (or potential customers!) can even get emotional and/or upset that you don’t offer something they expect. And if what they’re asking for is completely unrealistic and/or it would take your product in a direction you’re not interested in going, cut them loose. Part of the answer is about setting expectations. The other part of the answer is being willing to let go. 

5. Clearly articulating your vision of the future…and getting people to believe it.

The best entrepreneurs and business owners are evangelists. They are passionate about their market. If you have the presence to get other people excited, and sharing in your vision, you can do anything. Great employees will turn down other, more lucrative jobs to work with you. Customers will show up, because your passion will come through.