Tag Archives: innovation

Ideas to Spur Startup Success in NC

Whether through consulting or working with non-profits who serve entrepreneurs, I am very committed to seeing jobs created through business creation. In my work, I am often scouring research publications to find data and resources that point to trends and patterns. The North Carolina Small Business Technology Development Center publishes data on small business and entrepreneurship trends across the state. The 2012 (results through 2010) report highlighted some interesting trends:

Not only has the number of new employer businesses declined, but so
have sole proprietorships. Only three times in the past four decades
has the total number of non-farm proprietors in North Carolina
decreased from the previous year – twice in the early 1970s and
again in 2008. The only reason there wasn’t a decline in 2010, was
likely due to the growth of the state’s population. NC’s proportion of
business owners to total residents dropped in two of the last three
years – and 2009 was mostly unchanged.

We don’t know exactly who is and isn’t starting businesses in North
Carolina. However, the 2011 Global Entrepreneurship Monitor noted
this trend for the US as a whole and looked deeper into the problem.
Their surveys showed a disturbing decline in entrepreneurship among
young adults. This could be from a lack of interest, knowledge/training,
or capital (unemployment and debt are high among those under 25).

The reason this is potentially troubling is because the experience of
youth entrepreneurship is essential to the pipeline of successful startup
businesses in this country – often created by those in their 30s to
50s. If this trend is real and sustaining, the economic effects could be
felt in years to come.

While the concern about national declines in entrepreneurship among young adults is a valid one, our experience in the Research Triangle area is that more technology start-ups than ever are being initiated by this demographic. What seems to be missing, however, are start-ups from that same age group that are in the category of “Main Street” businesses. Businesses like real estate brokerages, boutique professional services firms, personal services, healthcare related companies, and construction companies or other labor-intensive enterprises are simply not popular among young folks.

Instead, the Baby Boom generation seems more likely to start Main Street businesses. At the Cary Innovation Center in Cary, NC, for instance, virtually all of the entrepreneurs in residence are over the age of 40. They share a common background of having spent years in industry, having developed a little bit of a nest egg, strong skills in unique disciplines, extensive business networks within their industry, and a desire to be self-employed the remainder of their productive work years. 

Perhaps we need to actively engage the 20 somethings in some type of entrepreneurship fair that would expose them to the lower risk/better quality of life aspects of the types of businesses that are residents at the Cary Innovation Center (events planning, a digital marketing company, a career outplacement firm, etc). Most of these businesses require far less capital to get off the ground than their venture-backed and angel-backed peer start-ups. Furthermore, it is easier to generate revenues earlier in the life cycle of these types of companies. 

Alternately, we need to realize the wonderful phenomenon that is spreading throughout the more seasoned crowd. We can–and should–celebrate their excitement about entrepreneurship as a second career.

In short, national trends need not determine our experience. We have an opportunity to be better than other parts of the country if we encourage more of what is working, champion alternatives for younger entrepreneurs, and give them all a lot of support in the form of education and mentoring.

Solve Rather Than Analyze

Is your business underperforming? If so, chances are high that your CFO or you as owner have determined that it is necessary to “manage the business by the numbers.” Reporting systems are put in place and monitored rigorously. I know this to be the pattern because I have observed turnarounds for over 20 years. It is predictable.  For some, the focus is on sales, for others, on leads, expenses, receivables, payables, etc…

What can be lost in the “shuffle” is necessary focus on what actions are necessary to change the patterns. So much effort is dedicated to capturing information, reporting information, and communicating information that not enough is given to improving performance. Simply noting what needs to change without the corresponding strategies and tactics, as well as daily behaviors, is not enough!

When the organization takes time to problem solve, innovation can occur. Instead of doing the same thing and expecting different results (insanity), new solutions need to be developed, new processes tired, new personnel invited to help develop solutions.

Paul Williams invites change managers to ask the question “How Might We…?” How might we drive sales? How might we drive traffic? Determine at least four “how might we” answers. Then, for each of those answers ask again “How might we…” Identifying at least four responses for each.

In his blog for the Idea Sandbox, Williams recommends the tool below to guide the exploratory process:

Let’s use the “How might we drive sales?” as an example.

ROUND 1:

How might we… drive more sales?

Here are four ideas…

  1. By building more awareness.
  2. By charging more to those already coming in. (Raise Prices)
  3. By getting existing customers to visit/buy more frequently. (Increase Frequency)
  4. Get people who come in to buy more than what they normally do. (Add-on Sales)

ROUND 2:

How might we… drive more sales?

Let’s take those first four answers and ask “how might we?” about each.

1) How might we… build awareness?

  • Do advertising.
  • Do PR.
  • Do community events.
  • Word of mouth: get current customers to tell others.

2) How might we… raise prices?

  • Increase prices across the board.
  • Increase price of most popular products.
  • Add perceived higher-tier items – that command a higher price point.
  • Remove lower-priced / smaller sized options from menu.

3) How might we… increase frequency?

  • Add items for a different time of the day / daypart (e.g. add breakfast).
  • Offer special in-store events to encourage non-traditional visits (e.g. art events, live music).
  • Run frequency-building consumer promotion(s).
  • Create / suggest additional uses for your product (e.g. baking soda for cleaning, cranberry sauce – not just for Thanksgiving).

4) How might we… get add-on sales?

  • Put impulse items near the cash register.
  • Offer add-on extended warranty / product insurance.
  • Show customers products that pair with and enhance what they normally buy.
  • Offer specials encouraging families and group sales.

Williams advocates that we continue to ask the “how” question to arrive at possible solutions. By repetition, more ideas surface. Though he stopped after two rounds of brainstorming (problem solving in this case), you need not feel limited except by the creativity of your team and amount of time you are willing to commit to the process. 

Even stopping at the point above, you notice that 16 potential solutions to enhance sales were generated. While not all of them will create the desired improvement, many will and the effort is way more valuable than perseverating on the problem, as organizations and their leadership teams are wont to do.

Move to action rather than “paralysis by analysis” and you will be better off!

 

What Medium Do You Choose to Publish?

This week marked the announcement of Medium, the newest offering of Evan Williams and Biz Stone. These are the two “rock star” entrepreneurs who successfully created Blogger and Twitter. What they are trying to do with their newest venture is to redefine how and why content is published on the web.

In his first blog post about the new concept, Williams says Medium represents only “a sliver” of what he and his team have learned about publishing and the need for innovation. Blogger pioneered the premise that one could publish for free whenever and wherever desirable and create a reading audience. While the effort was revolutionary at the time, it has become commonplace as other substitutes and competitors have pursued the same target market. To “up the ante,” Williams thinks that collaboration and quality content that is crowdsourced are the new frontier:

“Lots of services have successfully lowered the bar for sharing information, but there’s been less progress toward raising the quality of what’s produced. While it’s great that you can be a one-person media company, it’d be even better if there were more ways you could work with others.”

Pinterest postures as a collaboration platform where favorite objects (mainly photos) from the Web can be saved and shared. Crowdsourcing quality content through reader votes is done in differing ways by Digg, Reddit, and Tumblr. Of these, Tumblr is the best of the bunch for publishing and sharing content. In the dual realm of curation and instant publishing RebelMouse, uses social-networking activity to create a curated page of content that can be organized by preference, and Svbtle is a simplified blog platform with a stripped-down design.

Matthew Ingram, writing for GigaOm, observes that “both of the things Evan Williams is famous for also looked either unnecessary or unimpressive, and in some cases both. Blogger was cool if you were a geek and wanted your own website, but it was far from obvious at the time that self-publishing was going to become something huge or crack open the media industry in a fundamental way. And Twitter looked so ephemeral (not to mention the ridiculous name) that many people dismissed it as a plaything for nerds that would never amount to anything. So as Aaron Levie of Box.net noted on Twitter, it doesn’t pay to underestimate Williams when it comes to this kind of thing.”

Ingram says that Medium looks like a combo of Pinterest & Tumblr, though not proficient at text contributions. Furthermore, he references Josh Benton of the Nieman Journalism Lab as saying that Medium subverts the notion of the author as the most important thing about the content. Medium is focused more on the value of the content, regardless of who is producing it or voting on it. Instead of a blog or collection showing whatever is the newest thing — the typical reverse-chronological format used by most blogs and publishing platforms — Medium sorts according to popularity (similar to Digg.) does (in a similar way, tools like Prismatic sort items based in part on the social activity around that content).

The social media culture demands more from publishing; BuzzFeed and the recently-launched Branch (also incubated by Obvious Corp.) are trying to become viable, popular solutions. Time will tell whether Medium is better than anything else out there. As Levie put it, don’t bet against it!

 

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.”

 

Helping Companies Innovate On Purpose

 

Organizations large and small have teams that are responsible for executing business objectives. In some cases, the objective is to overcome a challenge; other times to re-engineer a process; still others are tasked with the commercialization of new ideas.  Regardless the initiative, the net result is that change will need to occur in order for a new, preferred outcome to be realized. Instead of the top executive in a group owning the need to introduce change, it is usually better to get a team involved for buy-in and swift implementation as well as diverse viewpoints.

Every team has inherent strengths, unique capabilities, passionate individuals with keen insights, and the opportunity to succeed. Invariably, however, time seems to work against innovation and helping teams find the time to do something uniquely significant can be tough work. Culture can impede team progress. It is important to provide the permission, resources, and support for teams to feel it is okay to brainstorm, invent, and implement new ideas.

Bulldog Drummond of San Diego uses a five step process to guide teams through innovation:

STEP 1:  WHAT’S THE PROBLEM? 

While it sounds obvious, framing the challenge clearly is the first step to take. Use the power of “Why?” to ensure the challenge is clearly stated and that everyone on your team understands the problem or the opportunity. Frame the challenge as a question. 

STEP 2: UNLEASH CROSS-FUNCTIONAL TEAMS

Brilliant minds inside companies are often under-utilized because there isn’t a venue to bring them together. These minds don’t get enough time with their peers and are rarely put into environments designed to produce them with enough time to attack a single issue. When solving a challenge, don’t just have marketing or product development teams attack the problem. Instead, unleash the power of cross-functional teams and, if possible, more than one. 

STEP 3: PUT THE CONSUMER (AND KEY INSIGHTS) INTO THE MIDDLE OF THE CHALLENGE

Millions of dollars are flushed down the drain because people aren’t paying attention to the data and the knowledge it contains is not organized in a manner that tells a compelling story. Bringing the consumer to life as people, not just as data, places the consumer and key scenarios into the middle of the challenge in an organized and insightful approach.

STEP 4: DESIGN AND FACILITATE AN AMAZING PROJECT EXPERIENCE

When attacking a challenge, envision the entire experience from beginning to end so that the teams can focus on solving the challenge. We begin by defining success with the project leaders and then choose an inspiring offsite venue and bring 5 to 10 cross-functional teams together. We make sure there is homework completed in advance preparing the teams for their time together, including gathered research, trends, and suggested work in the field. Next, we design the experience—from music and food, to a range of carefully facilitated exercises—and we model a passionate curiosity to solve the problem. At the end of the one or two days we always have amazing, actionable outcomes. 

STEP 5:  ACT QUICKLY ON THE OUTCOMES 

The key to success is to ensure that the ideas are not lost because they haven’t been framed correctly, or they don’t get the time and attention due to the day-to-day activities. Make sure that post the summit, the learnings and outcomes are synthesized in a compelling way, and that a project champion is chosen to lead the ideas into development.

Well-designed innovation summits are characterized by creativity, fun, and enthusiasm. Your organization can empower its teams with resources, support, and approval to dream big dreams and develop ideas that will benefit the organization. It is then incumbent upon leaders to move quickly to implement the ideas.