Category Archives: Entrepreneurship

European Media Incubators PepsiCo Style

Recently, we have noted that intrapreneurship is an emerging trend, perhaps even hotter than entrepreneurship. One of the hybrid expressions of these category leaders is the incubator inside the larger business. In the media industry in particular, the struggle to keep up with digital competitors creates a huge need for innovation. Chip Lebovtiz, writing for Fortune online, describes what two media companies across the Atlantic are doing.

The Irish Times and the BBC’s commercial arm, BBC Worldwide, are establishing intercompany startup incubators to harness young businesses’ disruptive energies. The (Irish Times Digital Challenge).. is akin to the plot of a Hollywood movie: a young up-and-comer works with a grumpy old mentor to overcome a problem, learning a valuable life lesson in the process. In this case, the problem is how to better monetize a company’s online presence and the life lesson is the experience startups get by working with a large company, says TheIrish Times Chief Innovation Officer Johnny Ryan.

Ryan is the brains behind (the competition), in which five early-stage companies  — 81 applied — spend eight weeks working at the Times to translate their pitch into virtual reality. While their ideas widely vary, their end goal is the same, to win €50,000 (about $61,000) from venture capital fund DFJ Esprit. The winning team must prove to the Times that its product provides the largest revenue potential and improvement to reader experience.

This is an interesting competition because large revenues and improved reader experience may be mutually incompatible. One has to wonder whether the intrapreneurs have the latitude to recommend strategies that may cannibalize longstanding business practices at the publisher.

BBC Worldwide Labs, a new business accelerator for startups, takes a similar but distinct tack. There is no competition between the fledgling companies and no prize money, but the six-month program offers a trophy of a different sort: the startups get a first client worth billions.

“The BBC can be a great first customer,” says BBC Worldwide Labs Head Jenny Fielding. The broadcasting giant can be “a partner at the point of commercialization for these companies.”

This approach is intriguing because of the built-in customer aspect. Many start-up companies struggle with defining a target market that is both large enough and profitable enough to serve as the fledgling enterprise scales. Yet, by becoming a captive supplier, does the intrapreneur become prejudiced against other viable market development opportunities?

What makes these programs distinctive is that the startups operate just down the hall from the people implementing their products. This proximity to the client is designed to overcome obstacles usually found in interactions between startups and large corporations.

Working with big companies is difficult for fledgling businesses. Fielding, in her role as the head of Digital Ventures at the BBC, often has to personally guide startups through the BBC’s diverse ecosystem. By situating the program in the BBC’s London Media Center headquarters, she expects the smaller startups to more quickly acclimate to and efficiently work with the larger BBC.

Neither the BBC nor The Irish Times will take equity stakes in the young companies they incubate. Instead, the media companies hope to establish a relationship with these startups that is ultimately scalable into a larger, future partnership…

Director of Global Digital and Social Media at PepsiCo Josh Karpf isn’t too surprised to see media companies adopt the (PepsiCo10 incubator approach)…”Technology is affecting every industry today, and media is no different, he says in an email to Fortune. “Companies that are trying to find technologies that will impact their businesses three to five years down the line are the ones who will win in the future.”

 

Starting A Biz Late in Life is Great!

We are strong believers in Boomerpreneurs– Baby Boom generation individuals who start businesses later in life, often as a second career choice. Michelle Rafter wrote the following article for Entrepreneur online about those who overcame adversity by redirecting their misfortunes into something positive and successful. She features 7 business owners who became entrepreneurs as a “second act.” Five of them are mentioned below:

Chris Gardner, Gardner Rich LLC

Second act: The Pursuit of Happyness. A homeless dad turned his life around by becoming a stockbroker in his mid-30s, and then went on to open his own investment company. Now 58, Gardner continues to reinvent himself as a motivational speaker and founder of an investment fund supporting business development in South Africa.

Lesson learned: “Probably the hardest question I get asked is ‘How do I choose between passion and practicality?’ I can’t answer that. I had to do both. I was passionate about pursuing a career in financial services. But I was also passionate about feeding my child,” Gardner told an audience at AARP’s Life@50+ convention in 2011.

Paula Deen, Paula Deen Enterprises LLC

Second act:  Paula Deen was 42, divorced, broke and battling agoraphobia when she started a catering company to makes ends meet. Six years later, the Savannah, Ga., restaurant she opened serving cheesy meatloaf, deep-fried Twinkies and other Southern specialties earned her national acclaim and the nickname Queen of Comfort Food. Aided by sons Jamie and Bobby, she parlayed her initial success into a food empire that extends to cookbooks, books, a magazine, TV shows and frozen foods.

Lesson learned: “I’m livin’ proof that the American dream is alive and well, that you can be an imperfect person and still end up with so much fun in your life you can hardly stand it,” Deen wrote in her 2007 memoir, It Ain’t All About the Cookin’ (Simon & Schuster). 

Bethenny Frankel, Skinnygirl

Second act: The 35-year-old culinary school graduate already had overcome a privileged but tough childhood — with an absent dad and an alcoholic mom — to open a natural foods bakery when she was cast in Real Housewives of New York City in 2005. Buoyed by her new found reality TV celebrity status, she launched a string of self-help books and the Skinnygirl line of cocktail mixes, sold to Beam Global in 2011 for more than $100 million. Ellen DeGeneres produced the recent pilot for Frankel’s Fox TV talk show, Bethenny.

Lesson learned: “When you find you are off track or your actions aren’t in line with your true nature, you change course. You start again. It’s never wrong. It just is,” Frankel wrote her 2011 book A Place of Yes: 10 Rules for Getting Everything You Want Out of Life. 

Bernard ‘Bernie’ Marcus, The Home Depot

Second act: Marcus was a cabinet maker and pharmacist before taking a shine to business, working his way up to running the Handy Dan hardware chain before getting fired at 50 after a disagreement with his new boss. He and partner Arthur Blank used their accumulated knowledge to open The Home Depot, revolutionizing the home-improvement industry with their mix of warehouse pricing and hands-on customer service. Marcus retired in 2002 to focus on philanthropy, funding everything from autism research to the Georgia Aquarium. Forbes pegs his current net worth at $2.3 billion.

Lesson learned: “The first thing I did was surround myself with people who were brighter than I was,” Marcus says in a 2011 Forbes interview. “If I didn’t have the best people around, we weren’t going to make it.”

Gert Boyle, Columbia Sportswear Co.

Second act: Boyle was a 42-year-old housewife and mother of three in 1970 when her husband died of a heart attack, forcing her to take over as chairman of the outdoor apparel maker her parents had started as a hat company 33 years earlier. Assisted by son Tim, Boyle has grown Columbia Sportswear from $800,000 in annual revenue to close to $1.7 billion in fiscal 2011. In the interim, she earned the nickname “One Tough Mother,” a moniker the company built an ad campaign around and Boyle used to title her 2005 autobiography. She’s still tough: Police credited instincts and grit for helping her outwit a would-be kidnapper in 2010.

Lesson learned: “After making funeral plans all weekend, I showed up for work at Columbia Sportswear on Monday morning, and I’ve been showing up ever since,” Boyle told The Oregonian.

With EntreDot and Boom! Magazine, we are putting together a Boom!erSlam event in October for boomers to vet their ideas in front of a panel and feedback from peers. Come join us at the Cary Innovation Center on October 17th at 6pm!

Simple Stories Make Great Pitches

 

ABC’s hit show, Shark Tank, is one of my very favorites on TV. It attracts entrepreneurs of all ages, levels of experience, and backgrounds to come pitch their business idea for angel investment by one or more of the sharks. One of the young ‘treps who pitched this past year is Joseph Draschil, co-founder of SpyGames.me.  Draschil is currently participating in Start-Up Chile (written about here a few months ago) while enrolled in an MBA entrepreneurship program at Babson College. 

His first major assignment in a Babson course was to create an opportunity storyboard for a business idea, limited to a single PowerPoint slide. The storyboard became a rocket pitch: a three minute, three slide, live pitch in front of his professor and classmates in the entrepreneurship class. Draschil was then encouraged to enter the Babson Rocket Pitch event, to pitch his idea in front of investors, professors, members of the community and the student body.

The following week, his team entered the Big Idea Competition, for which they were required us to upload a three-minute pitch video to YouTube, secure the most “likes” and move to the finalist round to pitch on stage for three judges. Within one week of being named one of two winning teams, Draschil received an e-mail from the director of the entrepreneurship center at Babson. Two of the “sharks” were to visit the school and hear the pitch. Here’s the young entrepreneur’s perspective on the experience:

Although I was terrified of failing in front of entrepreneur celebrities and all of Babson, I committed to participate and the pitch went great. My partner and I stumbled a couple of times during the Q&A session, but that’s okay. You make mistakes, learn from them, and improve — that’s the essence of the startup journey. After the event, Mark Cuban mentioned to us that he believed if we could get the marketing down, we would kill it.

While I continue to work on the business, I have learned a few key lessons about creating a dynamic pitch:

  1. Be visual. Please, no slides full of bullet points. Use simple and clean images that clarify and complement what you’re saying — not complicate it. When slides are cluttered and busy, the audience will be focused on deciphering them instead of focusing on you. Don’t forget that for most investors, the entrepreneur is more important than the product or idea being pitched.
  2. Tell a story. Storytelling lies at the heart of who we are as humans. Remember, you are not a court lawyer trying to amass evidence for the jury as to why your idea is destined to make millions. If your pitch is just a crowd of facts, figures and pie charts, you may lose your audience.
  3. Practice, practice, practice. Get in front of others and pitch — a lot. Don’t worry about your pitch being bad the first few times you do it. It most definitely will be. As you practice, though, you will learn which parts your audience is responding to and which parts need to be adjusted. Over time, your confidence and delivery will improve.

These 3 lessons are important for any entrepreneur. Pay attention to Draschil’s advice to be simple & clear in your slides. Way too much information in the presentations of many. The difference between an engaged audience and a bored one is your ability to weave a compelling story. Finally, the admonition to practice is so practical, fundamental, and predictive of one’s likelihood of success.

Endurance Runners Are Like Entrepreneurs

In writing for Inc magazine, Patricia Fletcher draws a comparison between entrepreneurs and marathon runners. In addition to being a little crazy, she says both have a plan to follow that prepares them for success. The performance for which you are judged is predictable from the “practice” that leads up to it. Here are Fletcher’s observations about the right mindset both need–

Get comfortable being uncomfortable for long periods of time.  Believe it or not, this will become a badge of honor.  Most of your work as an entrepreneur requires you to try new approaches, to push yourself beyond your limits. This means that you will fail a lot. You will struggle for funding–a lot. You will lose customers and opportunities–a lot. It’s all part of the training process. Your response to rejection is as good a determinant of your entrepreneurial ability as your response to success.

Adopt a resilient mindset. You are going to have some tough days; days when you question your own sanity and want throw in the towel.  Much like a marathon, the entrepreneurial experience is long, twisting, and filled with ups and downs. Every successful entrepreneur and marathoner I have talked with believes mindset is either your biggest asset or your biggest barrier. The pros handle it by maintaining an objective mindset that looks at setbacks as opportunities for improvement.

Embrace others like you. Working in a vacuum is not going to help you finish the race. Runners find running partners or join running clubs. They get faster because they push each other. They become stronger because they share tips for nutrition and avoiding injury. You can do the same thing. 

Connect with other entrepreneurs. Get together to practice your pitches, test your demos, and talk about go-to-market strategies. Working together will give you practice and insights while creating the relationships that will push you forward.

Don’t over-train. In my first few years as a runner and professional, I over-trained, thinking it would make me stronger and better, and prove that I belonged. Instead, I burned out. You will not succeed if you have 10 No. 1 priorities. Identify your top three goals. Don’t do anything that won’t make a big impact on your progress toward those three.

At conferences, I have heard several speakers tell up-and-coming women entrepreneurs and executives that they should say yes to any high-profile opportunities. I disagree. Go after new opportunities only if they’ll help you achieve one of your three big goals.

Measure. A good plan incorporates key performance indicators to track your progress. It also helps lessen risk by proactively addressing problems. What measurements will tell you that you are making progress?  How often should you track your progress?  What are your biggest obstacles?  Which do you need to address and which can be ignored? 

As someone who has been a distance runner for over 30 years, I can relate to each of these. When I was competing, I had a mental edginess honed from the daily effort I put into psyche and development of my skills. As an entrepreneur, I have  been more successful when I have brought my “A” game to what I do. How about you?

 

How To Grow Business All the Time

 

Whether your trade is producing software, computing tax liabilities, or manufacturing tangible goods, the success of your organization is going to be tied to strong sales (business development/ “bizdev”) performance over the long haul. Yet, few organizations are able to create a bizdev model that is sustainable and that constantly fuels the capital needs of the enterprise. Bizdev, however, is something that far too many senior executives (or, business owners in the SMB world) think must be acquired through osmosis or tenure. While I don’t actually believe that they think that, their actions would indicate otherwise.

Virtually everyone in North America has had a frustrating experience with bad sales execution. Either one has been on the end of trying to convince someone to buy, or the other end where we hate to be the recipient of “sales.” There’s much wrong with the selling models that are so pervasive that negative experiences abound on both sides of the equation.

Mahan Khalsa, who led the Sales Performance Group at FranklinCovey for a number of years, is one of my favorite authors on the subject of business development. His background included developing instruction for one of the old Big Eight CPA firms, then turning his attention to training almost 100,000 salespeople and consultants from all over the place in many different verticals.

Khalsa says, “Most professional sellers have good intent. They know manipulation and deceit hurt rather than build long-term sales success. They know that building trust is essential to both creating and capturing value. So they eliminate a lot of what would otherwise be dysfunctional—no surprise there. Yet most also consistently engage in actions that are not value adding–for them or for their customers. Even when great intent is present, there is a lot of room for improvement in eliminating dysfunctional behaviors.”

Both Khalsa and Neil Rackham find the tendency to jump to solutions before having completed the questioning process to be the bane of many folks involved in bizdev. I have observed noted rainmakers stumble in prospect meetings over this very subject. It’s as though the brain clicks into autopilot and, rather than seeking to understand, hubris takes over and the rainmaker is intent on being understood. Often, the solution that is recommended is premature–it doesn’t bear the wisdom of listening and consultative due diligence.

“Looking a little more holistically we could say the missing link is the ability to successfully blend excellent inquiry with excellent advocacy – to do a superb job of matching our story to the client’s story. Good inquiry is essential and most often the more undeveloped portion of the balance – and it is still only part of the equation. I’ve seen people get good at inquiry and still not be able to convert on advocacy.” (Khalsa)

When Khalsa left FranklinCovey, part of his intent was to transform the way business developers approach their work. He felt there was room for continuous improvement over an entire career. To that end, he began to wed together the twin concepts of business development and change management, with a sprinkling of performance measurement. In order to see strong long-term results, he argues, there must be an environment supportive of continuous improvement and a repeatable process that can be practiced and refined. 

Edward Deming once said, “It is not enough to do your best. You need to know what to do and then do your best.” So the quality of the practice and application is as important as the quantity of practice – and the quantity is essential. Khalsa subscribes to this concept as it relates to bizdev, stating “What I find liberating and motivating about the research is that everything, repeat everything, we need to do in order to get really good at sales is learnable – if we are willing to practice. It doesn’t have to do with our DNA, our native IQ, our personality type or social style, our years of experience. If we are willing to engage in a high number of repetitions of quality practice we can become as great as we want to be. That’s powerful.”

A key factor in effective bizdev is the ability to build a trusted relationship with the other party. Khalsa firmly believes that trust can be built intentionally and that it is tied strongly to value and information flow. In fact, he would argue that anyone who has two can obtain the third. Fundamentally, a rainmaker will have to become consistently better at doing what is promised and establishing a culture where the other party feels safe to share meaningful information.