Some people think the blog world is all give and take, as in I don’t ‘give‘ a _______ about this and ‘take‘ this and ________.
Well, it is about sharing opinions, but it’s not about ranting. What makes blogging interesting is knowing the people behind the comments they make. You don’t see the disclaimer ”these views are not representative of this blog, the management of the blog or any affiliates therof.” Owning your comments as an individual is what makes blogs different and unique.
So, I just got tagged by Phil Gerbyshak, from Slacker Manager with a game going around the blogging community where you are asked to share six things that people don’t know about you. It’s a push to share something new about yoursef and then you get to “tag” three more bloggers.
Six things on me…
1) My First job was to sieve soil for a geotechnical company...dirty and dusty...
2) I love to cook for friends over a weekend, and never use a recipe
3) I Play guitar and Mandalin...and just picked up the Banjo...
4) I like to read Dilbert in the bath
5) Got bit in the leg at a Croc park in Western Austrailia, but not with a Croc
6) I am a MJBT ...what are you
Now, as to the rules of this game: You must:
1. Link to the person who tagged you.
2. Post the rules on your blog.
3. Share six non-important things/habits/quirks about yourself.4. Tag at least three people at the end of your post and link to their blogs.
5. Let each person know they have been tagged by leaving a comment on their blog.
So my next three are:
Penelope Trunk www.blog.penelopetrunk.com
Adelino de Almeida www.adelino.typepad.com
Rob Smorfitt www.main-spring.blogspot.com/
Slainte
Gordon
This a record of my life, work and play as a Serial Entrepreneur, raised over £150 million and founded / co-founded six companies, listed one on the AIM and made trade sales of three others.
Thursday, January 31, 2008
Business Models
There's been some discussion in the tech blogosphere about startups and their need to have a clear business model, and some confusion from entrepreneurs about why it's ok for some businesses not to have known business models when they are expected to show three year pro-formas and be grilled about their model during any investor pitch.
I generally believe that for many technology companies, you need not necessarily have any idea how you will make money when you get started, and if you show good progress on the product and customer adoption, you need not make any commitments to a business model for some time. You do need to intimately understand where you sit in the proverbial value chain and what your position there means for your company, but you don't need to know precisely how you will extract value. In fact, I'll go farther and say that focusing on business model too early can hurt a company's prospects. When asked about Google's lack of a clear business model when he backed the company, John Doerr is said to have responded "With this kind of traffic, we'll figure it out". It's hard for some people to make sense of this when juxtaposed against their own experience pitching VC's, during which an obviously best-guess business model is grilled and questioned. What's going on here?
I have said before in this blog (or if not here, then certainly in my own mind) that I think all startups should think of the long road in front of them in three phases: during phase 1, you need to be passionate about the product (or service); during phase 2, you need to be passionate about your customers (*and* the product); during phase 3, you need to be passionate about revenue (*and* customers *and* the product). That may sound like some statement out of a "7 Habits of Highly Successful Startups" manual, but what does it really mean?
First, it's important to remember that you (you being the startup or entrepreneur) have limited resources. In the beginning, you are the most limited in terms of resources but the least limited in terms of range of motion. It's easier to innovate and change directions in the early days, but it's harder to do nine things at once. This is probably the founding team's favorite part of the lifecycle of the company. Everything is possible, and you can really focus on building the most awesome product/service possible, nimbly making changes in direction on the fly and rolling out different or new capabilities easily while simultaneously shutting down capabilities that seem to make no sense as part of the evolving vision. This is one reason I hate to see very early stage companies sign a big customer before the product is baked. You are encumbered by product commitments and customer support before you truly know what the market wanted. You have to be passionate about a customer and the product when you should be laser focused on the product. The customer's needs and your goals vis a vis the market may diverge. In an effort to show progress, however, the marquee customer is attractive in the belief it will help attract investment (and this may indeed be true). In a previous life before FeedBurner, my founders and I made the mistake of signing a big name customer to a paid monthly contract before we really knew what the product's place in the market should be. Won't ever do that again.
So, you grow, and the product gets to the point where it's usable and people start climbing in the bus, and if you're really lucky, it's growing like a weed and customer adoption is rampant. So, now we come to this curious world in which some people start to say "sure it's great, but what's the business model" while other people are saying "don't worry about the model right now, grow grow grow" (which is in turn interpreted by the first group as either "forgetting what happened in the bubble" or greedy or just stupid). I strongly believe that while you are growing in this phase, and expanding your initial team, you need only be passionate about the product and passionate about the customer. So, what does it mean to be passionate about the customer? Come closer and pay attention because I might not say what you think i'm going to say. If you ask a customer what being passionate about the customer means, you might generally hear "great customer service". This is not necessarily what I mean in the business sense. Passionate about the customer means that you are doing everything in your power to a) get more customers and b) make sure that your existing customers have little reason to want to stop using your product (what's referred to as "churn" in the antiseptic parlance that is preferred by some). Is great customer service one way to accomplish this? It can be, yes. What are some other mechanisms by which you can be passionate about the customer? Well, if you want to minimize churn, your product needs to be as usable and bug-free as possible. Nothing offers the competition an opportunity to show its stripes like your product not working. I think of response time, for example, as part of the passionate about the customer bucket, not the passionate about the product bucket. Slow response times can reduce new customer growth and give existing customers reason to try out a competitive offering.
It is absolutely critical, however, that you not make the fatal mistake of interpreting "passionate about the customer" with a mindset of being in reaction to a specific customer or customers. What the heck does "in reaction to a specific customer" mean? Ted Rheingold, the founder of Dogster and Catster, likes to say "the customer that emails you all the time is not all your customers". If you have a thousand customers, and you think that you are being passionate about the customer because you immediately respond to the two customers that repeatedly send emails like "YOUR SERVICE IS ACTING LIKE A *$#@! !!! PLEASE FIX THIS NOW. WHY CANT YOU PEOPLE GET A CLUE AND GROW THE !@#$! UP???", then you aren't being passionate about the customer, you're just feeding the raccoons. It is really really hard to get this through your head. You want to help everybody that's using your service. Here are a couple people that seem to want to use your service but repeatedly complain like this...if you are trying to help them, then you must be passionate about your customers. Instead, all you're really doing here is causing your team and company a lot of aggravation. I'll use a stupid analogy for those of you who play golf. When you make a bad shot, your inclination on the next shot is to think specifically about fixing that thing you just did wrong and think about making sure you don't do those two specific things wrong again. Of course, this is a recipe for disaster. The right way to play the game is to have a very consistent approach to every shot, irrespective of what just happened on the very last shot. So it is with an approach to being passionate about the customer. You need to understand what things you are going to do, how you are going to communicate with ALL your customers, etc. in order to maximize the number of new customers that will try your service, and at the same time minimize the number of people who you give a reason to try something else. Maybe this includes responding immediately to all caps emails that contain > 50% vulgarity, maybe it means ignoring those. Maybe it means being in reaction to every blog post you see, maybe it means never responding to any of those but frequently letting your community of customers know what's going on at HQ. Maybe it means using your constrained resources to do no communication at all and focus 100% on having the fastest and most highly available service. That's for you to figure out. We happened to be of the "hypercommunication with customers" mindset and practice at FeedBurner, but I know of wildly successful internet companies that had absolutely no customer feedback mechanism and yet almost never lost a customer because the service just worked.
So, we come to the point of the whole post: business model. Let's say you have 20 people in your company working with you. Let's say your initial product is a big hit, and people are adopting it with such enthusiasm that your growth rate is beyond your wildest dreams. The product is still in its relative infancy, but you're working out the kinks. Is it critical that you figure out your business model as soon as possible? No. Is it critical that you have enough cash to make sure you can grow the business? Yes. Might it be the case that you can't get access to capital unless you have a sound business model? Yes. Is life fair? No.Don't you ultimately have to figure out how the heck you're going to make money? Of course, but....
You've got limited resources. It's still early. It is very likely the case that the first business model you try will not work (or will need to be amended or supplemented with other mechanisms). So, while you should be laser focused on having your company be passionate about product and passionate about customers, you don't need to be (and in fact you shouldn't be) passionate about revenue until the business model reveals itself. How the heck does a business model reveal itself? You try different things....the less you worry about fixating on a specific model, the more different things you can try. Maybe it's an ad model, maybe it's a free/premium model, maybe it's a private label model, maybe it's something else altogether. But leave yourself room to be in that quantum state of "it could be this or it could be that" until you figure out what works. Only then do you have to ramp up sales, finance, sales engineering, etc. and go out to the market with a very specific model. Announcing your model to the market before you really figure out what works forces you into multiple binds....the model may not scale, the model may be wrong, and you're now in a position where you have very limited resources and you are trying to get your company to be passionate about three things: product, customer, revenue. You also signal to the market and your investors that the clock is now ticking. Didn't hit your q1 revenue number? Uh oh, you're now going to be a lot more focused in q2 on figuring out how to hit that revenue target but you're also still in hyper-growth mode so the product and customer base require everybody's critical attention. Much better to be internally focused on fostering continued growth and innovation while tinkering around on the side with potential models, knowing that the ultimate model may not present itself for some time.
Conundrum: if this is true, then why do potential investors always drill you on your business model?! Because they want to understand how you think of the company and the business. It will ultimately have to go through these three phases. Does any of your thinking about business models sound even remotely plausible? Is it the case that you are starting a company in an area in which many others have tried and failed? If so, then why do you think yours will work? What you are hearing when potential investors ask you this question is not: "I don't see how that business model will make the 9 million in top line, with 39% margins that you show on page 10", instead you are hearing "help me understand how you see this ultimately functioning as a business". It may be that your answer is "look, we think there is a free/premium model here that works if X and Y are true. However, if A and B are true, and so far that appears to be the case, then it's more likely that we go go go on product innovation for the next year and then attack this as a private label model when enterprises follow consumers into the market". Bottom line: Investors are trying to see how you're thinking about this, not whether you have the right answer.
Conundrum Part II: Our service is free and because we don't have a business model, should we pursue charging for it as one of the potential models? Uh, I suppose you could, but why would you do that if it's going to impede growth? Look, there are plenty of great business models based on charging a subscription fee. It's also the case that we've all been burned by "now it's free, now it's not" services in the past (think ATM's, for example....it's free until we're all using it, at which point it's $2 per withdrawal). Nonetheless, it would appear that models in which revenue and earnings accrue to a company as an indirect function of its free use are the models that have the most powerful impact on the Internet today, and you work against that trend at your own peril. This is probably true even where specific industries continue not to admit it. When you add costs to using a product/service, you add friction to customer adoption (he said, stating the obvious). If somebody else comes along and figures out how to make money on such a service by providing it for free, then it's not so much fun to be you because your competitor's lack of friction is going to make life harder for you. And time and time again on the Internets, we see that somebody ultimately comes along and figures out how to make a lot of money by offering for free a service for which somebody else is charging.
When do you need to figure out your business model? Before you run out of cash.
I generally believe that for many technology companies, you need not necessarily have any idea how you will make money when you get started, and if you show good progress on the product and customer adoption, you need not make any commitments to a business model for some time. You do need to intimately understand where you sit in the proverbial value chain and what your position there means for your company, but you don't need to know precisely how you will extract value. In fact, I'll go farther and say that focusing on business model too early can hurt a company's prospects. When asked about Google's lack of a clear business model when he backed the company, John Doerr is said to have responded "With this kind of traffic, we'll figure it out". It's hard for some people to make sense of this when juxtaposed against their own experience pitching VC's, during which an obviously best-guess business model is grilled and questioned. What's going on here?
I have said before in this blog (or if not here, then certainly in my own mind) that I think all startups should think of the long road in front of them in three phases: during phase 1, you need to be passionate about the product (or service); during phase 2, you need to be passionate about your customers (*and* the product); during phase 3, you need to be passionate about revenue (*and* customers *and* the product). That may sound like some statement out of a "7 Habits of Highly Successful Startups" manual, but what does it really mean?
First, it's important to remember that you (you being the startup or entrepreneur) have limited resources. In the beginning, you are the most limited in terms of resources but the least limited in terms of range of motion. It's easier to innovate and change directions in the early days, but it's harder to do nine things at once. This is probably the founding team's favorite part of the lifecycle of the company. Everything is possible, and you can really focus on building the most awesome product/service possible, nimbly making changes in direction on the fly and rolling out different or new capabilities easily while simultaneously shutting down capabilities that seem to make no sense as part of the evolving vision. This is one reason I hate to see very early stage companies sign a big customer before the product is baked. You are encumbered by product commitments and customer support before you truly know what the market wanted. You have to be passionate about a customer and the product when you should be laser focused on the product. The customer's needs and your goals vis a vis the market may diverge. In an effort to show progress, however, the marquee customer is attractive in the belief it will help attract investment (and this may indeed be true). In a previous life before FeedBurner, my founders and I made the mistake of signing a big name customer to a paid monthly contract before we really knew what the product's place in the market should be. Won't ever do that again.
So, you grow, and the product gets to the point where it's usable and people start climbing in the bus, and if you're really lucky, it's growing like a weed and customer adoption is rampant. So, now we come to this curious world in which some people start to say "sure it's great, but what's the business model" while other people are saying "don't worry about the model right now, grow grow grow" (which is in turn interpreted by the first group as either "forgetting what happened in the bubble" or greedy or just stupid). I strongly believe that while you are growing in this phase, and expanding your initial team, you need only be passionate about the product and passionate about the customer. So, what does it mean to be passionate about the customer? Come closer and pay attention because I might not say what you think i'm going to say. If you ask a customer what being passionate about the customer means, you might generally hear "great customer service". This is not necessarily what I mean in the business sense. Passionate about the customer means that you are doing everything in your power to a) get more customers and b) make sure that your existing customers have little reason to want to stop using your product (what's referred to as "churn" in the antiseptic parlance that is preferred by some). Is great customer service one way to accomplish this? It can be, yes. What are some other mechanisms by which you can be passionate about the customer? Well, if you want to minimize churn, your product needs to be as usable and bug-free as possible. Nothing offers the competition an opportunity to show its stripes like your product not working. I think of response time, for example, as part of the passionate about the customer bucket, not the passionate about the product bucket. Slow response times can reduce new customer growth and give existing customers reason to try out a competitive offering.
It is absolutely critical, however, that you not make the fatal mistake of interpreting "passionate about the customer" with a mindset of being in reaction to a specific customer or customers. What the heck does "in reaction to a specific customer" mean? Ted Rheingold, the founder of Dogster and Catster, likes to say "the customer that emails you all the time is not all your customers". If you have a thousand customers, and you think that you are being passionate about the customer because you immediately respond to the two customers that repeatedly send emails like "YOUR SERVICE IS ACTING LIKE A *$#@! !!! PLEASE FIX THIS NOW. WHY CANT YOU PEOPLE GET A CLUE AND GROW THE !@#$! UP???", then you aren't being passionate about the customer, you're just feeding the raccoons. It is really really hard to get this through your head. You want to help everybody that's using your service. Here are a couple people that seem to want to use your service but repeatedly complain like this...if you are trying to help them, then you must be passionate about your customers. Instead, all you're really doing here is causing your team and company a lot of aggravation. I'll use a stupid analogy for those of you who play golf. When you make a bad shot, your inclination on the next shot is to think specifically about fixing that thing you just did wrong and think about making sure you don't do those two specific things wrong again. Of course, this is a recipe for disaster. The right way to play the game is to have a very consistent approach to every shot, irrespective of what just happened on the very last shot. So it is with an approach to being passionate about the customer. You need to understand what things you are going to do, how you are going to communicate with ALL your customers, etc. in order to maximize the number of new customers that will try your service, and at the same time minimize the number of people who you give a reason to try something else. Maybe this includes responding immediately to all caps emails that contain > 50% vulgarity, maybe it means ignoring those. Maybe it means being in reaction to every blog post you see, maybe it means never responding to any of those but frequently letting your community of customers know what's going on at HQ. Maybe it means using your constrained resources to do no communication at all and focus 100% on having the fastest and most highly available service. That's for you to figure out. We happened to be of the "hypercommunication with customers" mindset and practice at FeedBurner, but I know of wildly successful internet companies that had absolutely no customer feedback mechanism and yet almost never lost a customer because the service just worked.
So, we come to the point of the whole post: business model. Let's say you have 20 people in your company working with you. Let's say your initial product is a big hit, and people are adopting it with such enthusiasm that your growth rate is beyond your wildest dreams. The product is still in its relative infancy, but you're working out the kinks. Is it critical that you figure out your business model as soon as possible? No. Is it critical that you have enough cash to make sure you can grow the business? Yes. Might it be the case that you can't get access to capital unless you have a sound business model? Yes. Is life fair? No.Don't you ultimately have to figure out how the heck you're going to make money? Of course, but....
You've got limited resources. It's still early. It is very likely the case that the first business model you try will not work (or will need to be amended or supplemented with other mechanisms). So, while you should be laser focused on having your company be passionate about product and passionate about customers, you don't need to be (and in fact you shouldn't be) passionate about revenue until the business model reveals itself. How the heck does a business model reveal itself? You try different things....the less you worry about fixating on a specific model, the more different things you can try. Maybe it's an ad model, maybe it's a free/premium model, maybe it's a private label model, maybe it's something else altogether. But leave yourself room to be in that quantum state of "it could be this or it could be that" until you figure out what works. Only then do you have to ramp up sales, finance, sales engineering, etc. and go out to the market with a very specific model. Announcing your model to the market before you really figure out what works forces you into multiple binds....the model may not scale, the model may be wrong, and you're now in a position where you have very limited resources and you are trying to get your company to be passionate about three things: product, customer, revenue. You also signal to the market and your investors that the clock is now ticking. Didn't hit your q1 revenue number? Uh oh, you're now going to be a lot more focused in q2 on figuring out how to hit that revenue target but you're also still in hyper-growth mode so the product and customer base require everybody's critical attention. Much better to be internally focused on fostering continued growth and innovation while tinkering around on the side with potential models, knowing that the ultimate model may not present itself for some time.
Conundrum: if this is true, then why do potential investors always drill you on your business model?! Because they want to understand how you think of the company and the business. It will ultimately have to go through these three phases. Does any of your thinking about business models sound even remotely plausible? Is it the case that you are starting a company in an area in which many others have tried and failed? If so, then why do you think yours will work? What you are hearing when potential investors ask you this question is not: "I don't see how that business model will make the 9 million in top line, with 39% margins that you show on page 10", instead you are hearing "help me understand how you see this ultimately functioning as a business". It may be that your answer is "look, we think there is a free/premium model here that works if X and Y are true. However, if A and B are true, and so far that appears to be the case, then it's more likely that we go go go on product innovation for the next year and then attack this as a private label model when enterprises follow consumers into the market". Bottom line: Investors are trying to see how you're thinking about this, not whether you have the right answer.
Conundrum Part II: Our service is free and because we don't have a business model, should we pursue charging for it as one of the potential models? Uh, I suppose you could, but why would you do that if it's going to impede growth? Look, there are plenty of great business models based on charging a subscription fee. It's also the case that we've all been burned by "now it's free, now it's not" services in the past (think ATM's, for example....it's free until we're all using it, at which point it's $2 per withdrawal). Nonetheless, it would appear that models in which revenue and earnings accrue to a company as an indirect function of its free use are the models that have the most powerful impact on the Internet today, and you work against that trend at your own peril. This is probably true even where specific industries continue not to admit it. When you add costs to using a product/service, you add friction to customer adoption (he said, stating the obvious). If somebody else comes along and figures out how to make money on such a service by providing it for free, then it's not so much fun to be you because your competitor's lack of friction is going to make life harder for you. And time and time again on the Internets, we see that somebody ultimately comes along and figures out how to make a lot of money by offering for free a service for which somebody else is charging.
When do you need to figure out your business model? Before you run out of cash.
Picked up from ASK the wizard
Friday, January 25, 2008
Going Global from small beginings
Say you’re the CEO of a company ranging from say $30 million to $250 million a year and you’ve never being able to figure out a way to go global. That’s unfortunate but not fatal. You still have time. And in view of what’s happening to the domestic U.S. economy, now would be a great time to start figuring out how to export or possibly even invest abroad. There’s huge demand in the world for the kinds of niche products that many American manufacturers make, ranging from water filtration systems to bolts to jet engines. Based on my years of reporting on the subject, here are my tips:
–It’s a mistake to simply hire a vice president for international, probably someone who is foreign-born or who has experience internationally. Some CEOs think that’s the answer but it’s not. The v.p. for international will go on a series of trips and rack up big expenses. He’ll come back from a trip and tell you that there’s a market for your products in, say, Germany, if only you’d customize them or adapt them in some way. That’s almost always necessary but the v.p. won’t have the clout within the organization to force it to move out of its U.S.-centric view and begin adapting to international markets. Only you, as CEO, can force your organization to respond to the international challenge. A v.p. might help; but don’t put all the burden on his or her shoulders.
–You should gear yourself up personally. That means taking the wife on a vacation to a couple of possible export destinations and meeting socially with people in your industry. It might mean going to a conference or industry association meeting in a foreign capital. You need to manage the relationships with your foreign customers from the strategic level.
–A corollary is that relationships are crucial. There’s not much future in on-off shipments of widgets to a customer in China or India. What you want is an ongoing relationship of trust. That’s the CEO’s job.
–In addition to perhaps having a v.p. of international, you should gradually build a management team that includes several non-Americans or else Americans who have had experience internationally with larger companies. The whole company needs to buy in to the challenge. I’ve seen many companies where the “domestic people” want to keep doing business just as they have been doing it, without taking any of the risks of going international. The “international people” lack the institutional clout to force real change. The result is stalemate.
–Take steps over time. Don’t make sudden plunges. And be willing to invest capital over a two or three year period before you expect to see a rate of return. International markets can be lucrative but they take time. This is another reason why the CEO has to be personally involved–it’s possible that your profit rate in the short-term will be reduced as you invest in the long term. Only a CEO can make that judgment.
–It’s a mistake to simply hire a vice president for international, probably someone who is foreign-born or who has experience internationally. Some CEOs think that’s the answer but it’s not. The v.p. for international will go on a series of trips and rack up big expenses. He’ll come back from a trip and tell you that there’s a market for your products in, say, Germany, if only you’d customize them or adapt them in some way. That’s almost always necessary but the v.p. won’t have the clout within the organization to force it to move out of its U.S.-centric view and begin adapting to international markets. Only you, as CEO, can force your organization to respond to the international challenge. A v.p. might help; but don’t put all the burden on his or her shoulders.
–You should gear yourself up personally. That means taking the wife on a vacation to a couple of possible export destinations and meeting socially with people in your industry. It might mean going to a conference or industry association meeting in a foreign capital. You need to manage the relationships with your foreign customers from the strategic level.
–A corollary is that relationships are crucial. There’s not much future in on-off shipments of widgets to a customer in China or India. What you want is an ongoing relationship of trust. That’s the CEO’s job.
–In addition to perhaps having a v.p. of international, you should gradually build a management team that includes several non-Americans or else Americans who have had experience internationally with larger companies. The whole company needs to buy in to the challenge. I’ve seen many companies where the “domestic people” want to keep doing business just as they have been doing it, without taking any of the risks of going international. The “international people” lack the institutional clout to force real change. The result is stalemate.
–Take steps over time. Don’t make sudden plunges. And be willing to invest capital over a two or three year period before you expect to see a rate of return. International markets can be lucrative but they take time. This is another reason why the CEO has to be personally involved–it’s possible that your profit rate in the short-term will be reduced as you invest in the long term. Only a CEO can make that judgment.
Found on BNET
Slainte
Gordon
Thursday, January 24, 2008
Entrepreneurs Mindset some thoughts
Entrepreneurs Mindset
Some thoughts for your perusal
As I was driving back from our meeting with our financial investors and possible lead investor, I had a few thoughts on what characteristics makes a "Good" Entrepreneur, I have listed them below:
Honesty: with your self , your employees and your investors.
Simplicity: don't make things to difficult
Listener: Listen to others, listen to yourself
Passion: I had a post along while ago on good food....and mentioned that you know when a cook is passionate about what they do, you can taste the difference, same in business
Determination: I watched my two budgies last night and when they set about a task, they go at it for hours, just picking away at it, they may sleep but the next morning they are back at it. The same for your business
Communicator: goes without saying, but most folk miss that they will need to communicate there passion and vision to others and get there buy in
Questionnaire: No one else will ask the hard questions for a while until you train your team to
Practical: Physically and mentally, this is the real world, and real peoples lives you are messing around.
Fair and hard: To everyone
Have a think about what makes you good at what you do and drop me a line....Would be good to hear about it.
Slainte
Gordon
Simplicity: don't make things to difficult
Listener: Listen to others, listen to yourself
Passion: I had a post along while ago on good food....and mentioned that you know when a cook is passionate about what they do, you can taste the difference, same in business
Determination: I watched my two budgies last night and when they set about a task, they go at it for hours, just picking away at it, they may sleep but the next morning they are back at it. The same for your business
Communicator: goes without saying, but most folk miss that they will need to communicate there passion and vision to others and get there buy in
Questionnaire: No one else will ask the hard questions for a while until you train your team to
Practical: Physically and mentally, this is the real world, and real peoples lives you are messing around.
Fair and hard: To everyone
Have a think about what makes you good at what you do and drop me a line....Would be good to hear about it.
Slainte
Gordon
Wednesday, January 23, 2008
Wed..back from the Finance advisers
I have heard this pitch so many times from young start up's, if we only we get 1% of the market in China, our revenue will be $200m easy, have a read at this article from the GO big network.
Avoid the Lame % of the Market Approach
Tell me if this pitch sounds familiar:
we could capture just 1% of the market for this product, we could do over $500 million in sales! And that's with just 1% of it! It's the basis for the all-too-popular and far-too-lame % of the market approach. The suggestion, used by overzealous (and inexperienced) entrepreneurs is that 1% of a market is so little, that it couldn't possibly be hard to capture.
And let's face it, 1% is awfully small!
1% of a pizza is about two bites. 1% of your mortgage payment probably means you can pay it with the cash in your wallet. 1% of a typical business book is only two pages. Boy that sounds ridiculously easy.
Yet 1% of the market for a particular product ain't a slice of pizza or few pages of a book. It's what entire multi-billion dollar companies are based on. It's not an afterthought or something the rest of the competition forgot about. If it's a market worth capturing, you can bet no one is overlooking that 1%.
Compare it to Reality
If 1% of the market isn't that big of a slice, then let's say 5% isn't that much bigger. Yet 5% of the U.S. computer market makes you Apple Computer, with a $160 billion market cap. Do you really think Steve Jobs at Apple is sitting around thinking Boy I can't believe I was able to just walk in and steal 5% of the market while no one was looking!
Of course not. Whether it's 1% or 10% of a market, no matter how small your slice may be, it's only insignificant if it equates to a dollar figure no one cares about. Incidentally if it's a market share no one cares about, you shouldn't be targeting that market anyhow.
No company in a giant industry is looking at any percentage of their market share as dispensable or insignificant. Companies will fight just as hard for 1% of the market as they will for 10%, so the idea that 1% will be a walk in the park is ludicrous.
Any Per Cent is a Lot
There's absolutely no correlation between capturing some insignificant portion of a market and the effort required to get it done.
Whether you're capturing one customer or one million, the effort required to create a product that people will be willing to pay for is the same. The scale of the effort may be different, but it's going to consume all 80 workable hours of your week whether you're running Eddie's Computer Warehouse or Dell Computer.
A smaller share of a market doesn't necessarily make the market easier to compete in, either. In fact it probably makes the market more difficult to compete in since larger competitors will more likely have a stronger brand, sales force, and product than you have available. In many ways, 1% of the market is the hardest slice to compete for.
Bigger Slices of Smaller Markets
Knowing that capturing 1% of the market is just as hard as capturing 70%, it’s probably a better goal to focus on bigger slices of smaller markets.
Although 1% of a giant market that you can't possibly wrap your arms around may equate to a big number, it still doesn't buy you anything. You're not likely to be in a strong competitive position with 1% of a market.
Instead, it would be more useful to figure out how to capture a major share of a smaller market that you can dominate and grow from. It's better to be Number One in a category that you control (or have invented) than being Number 75 in a category where no one will ever notice you.
Back to the Drawing Board
So let's take that crafty 1% of the market approach and throw it in the trash.
In exchange, let's focus on a market that we can create a dominant position within and build from there. Perhaps the narrow market we initially define is based on a region, such as the Midwest, or a particular industry vertical, such as Healthcare.
If we can't crush the competition in Healthcare within the Midwest, what would make us think we can dominate the whole world in all industries? Ideally we'll take over this segment quickly, adding more regions and soon thereafter more industries. Over time, maybe one day we really will control 1% of a massive market, which would be pretty sweet.
The difference in this approach isn't working backward from 1% but working forward in a logical progression that gets us to 1%.
Possible versus Probable
When making sales and market share predictions, it's not about calculating what's possible, it's about calculating what's probable. Of course it's possible for anyone to eventually own 1% of a market, through a ton of hard work and terrific execution. What matters, though, is how probable that ownership stake is in each progressive milestone of your strategy.
Slainte
Gordon
Tuesday, January 22, 2008
Writing an Executive Summary
Writing a Compelling Executive Summary
By now, you’ve probably already read several articles, web pages—even books—about writing the perfect executive summary. Most of them offer a wealth of well-intended suggestions about all the stuff you need to include in the executive summary. They provide a helpful list of the forty-two critical items you should cover—any entrepreneur worth his or her salt should be able to address these points in less than 100 pages—and then they tell you to be concise.
Most guides to writing an executive summary miss the key point: The job of the executive summary is to sell, not to describe.
The executive summary is often your initial face to a potential investor, so it is critically important that you create the right first impression. Contrary to the advice in articles on the topic, you do not need to explain the entire business plan in 250 words. You need to convey its essence, and its energy. You have about 30 seconds to grab an investor’s interest. You want to be clear and compelling.
Forget what everyone else has been telling you. Here are the key components that should be part of your executive summary:
1. The Grab: You should lead with the most compelling statement of why you have a really big idea. This sentence (or two) sets the tone for the rest of the executive summary. Usually, this is a concise statement of the unique solution you have developed to a big problem. It should be direct and specific, not abstract and conceptual. If you can drop some impressive names in the first paragraph you should—world-class advisors, companies you are already working with, a brand name founding investor. Don’t expect an investor to discover that you have two Nobel laureates on your advisory board six paragraphs later. He or she may never get that far.
2. The Problem: You need to make it clear that there is a big, important problem (current or emerging) that you are going to solve. In this context you are establishing your Value Proposition—there is enormous pain out there, and you are going to increase revenues, reduce costs, increase speed, expand reach, eliminate inefficiency, increase effectiveness, whatever. Don’t confuse your statement of the problem with the size of the opportunity (see below).
3. The Solution: What specifically are you offering to whom? Software, hardware, service, combination? Use commonly used terms to state concretely what you have, or what you do, that solves the problem you’ve identified. Avoid acronyms and don’t try to use this opportunity to create and trademark a bunch of terms that won’t mean anything to most people. You might need to clarify where you fit in the value chain or distribution channels—who do you work with in the ecosystem of your sector, and why will they be eager to work with you. If you have customers and revenues, make it clear. If not, tell the investor when you will.
4. The Opportunity: Spend a few more sentences providing the basic market segmentation, size, growth and dynamics—how many people or companies, how many dollars, how fast the growth, and what is driving the segment. You will be better off targeting a meaningful percentage of a well-defined, growing market than claiming a microscopic percentage of a huge, mature market. Don’t claim you are addressing the $24 billion widget market, when you are really addressing the $85 million market for specialized arc-widgets used in the emerging wocket sector.
5. Your Competitive Advantage: No matter what you might think, you have competition. At a minimum, you compete with the current way of doing business. Most likely, there is a near competitor, or a direct competitor that is about to emerge (are you sufficiently paranoid yet??). So, understand what your real, sustainable competitive advantage is, and state it clearly. Do not try to convince investors that your only competitive asset is your “first mover advantage.” Here is where you can articulate your unique benefits and advantages. Believe it or not, in most cases, you should be able to make this point in one or two sentences.
6. The Model: How specifically are you going to generate revenues, and from whom? Why is your model leverageable and scaleable? Why will it be capital efficient? What are the critical metrics on which you will be evaluated—customers, licenses, units, revenues, margin? Whatever it is, what impressive levels will you reach within three to five years?
7. The Team: Why is your team uniquely qualified to win? Don’t tell us you have 48 combined years of expertise in widget development; tell us your CTO was the lead widget developer for Intel, and she was on the original IEEE standards committee for arc-widgets. Don’t just regurgitate a shortened form of each founder’s resume; explain why the background of each team member fits. If you can, state the names of brand name companies your team has worked for. Don’t drop a name if it’s an unknown name, and don’t drop a name if you aren’t happy to give the contact as a reference at a later date.
8. The Promise ($$): When you are pitching to investors, your fundamental promise is that you are going to make them a boatload of money. The only way you can do that is if you can achieve a level of success that far exceeds the capital required to do that. Your Summary Financial Projections should clearly show that. But if they are not believable, then all of your work is for naught. You should show five years of revenues, expenses, losses/profits, cash and headcount. It might also make sense to show a key driver, such as number of customers or units shipped.
9. The Ask: This is the amount of funding you are asking for now. This should generally be the minimum amount of equity you need to reach the next major milestone. You can always take more if investors are willing to make more available, but it is hard to take less. If you expect to be raising another round of financing later, make that clear, and state the expected amount.
You should be able to do all this in six to eight paragraphs, possibly a few more if there is a particular point that needs emphasis. You should be able to make each point in just two or three simple, clear, specific sentences.
This means your executive summary should be about two pages, maybe three. Some people say it should be one page. They’re wrong. (The only reason investors ask for one page summaries is that they are usually so bad the investors just want the suffering to be over sooner.) Most investors find that there is not enough information in one page to understand and evaluate a company.
Please remember that the outline above should not be applied rigidly or religiously. There is no template that fits all companies, but make sure you touch in each key issue. You need to think through what points are most important in your particular case, what points are irrelevant, what points need emphasis, and what points require no elaboration.
Some other general points:
Do not lead with broad, sweeping statements about the market opportunity. What matters is not market size, but rather compelling pain. Investors would rather invest in a company solving a desperate problem for a small growing market, than a company providing an incremental improvement for a large established market.
Don’t acronym your own name. Sun Microsystems did not build its brand by calling itself “SMI.” (Of course, if you know where the name Sun came from, you understand this is an inside joke.)
Drop names, if they are real; don’t drop names if they are smoke. If you have a real partnership with a brand name company, don’t hide your lantern under a bushel basket. If you consulted for Cisco’s HR department one week, don’t say you worked for Cisco.
Avoid “purple farts”—adjectives that sound impressive but carry no substance. “Next generation” and “dynamic” probably don’t mean anything to your readers (unless you are talking about DRAM). Everybody thinks their software is “intelligent” and “easyto- use,” and everyone thinks their financial projections are “conservative.” Explain your company the way you would to a friend at a cocktail party (after one drink, not five).
State your value proposition and competitive advantage in positive terms, not negative terms. It is what you can do that is important, not what others cannot do. With the one or two most obvious competitors, however, you may need to be very explicit: “Unlike Cisco’s firewall solution, our software can operate ….”
Use simple sentences, not multi-tiered compound sentences.
Use analogs, as long as you are clarifying rather than hyping. You can say you are using the Google model for generating revenues, as long as you don’t say you expect to be the next Google.
Go back and reread each sentence when you're done: Are they clear, concise and compelling?
Finally, one of the most important sentences you write will not even be in the executive summary—it is the sentence that introduces your company in the email that you or a friend uses to send the executive summary. Your summary might not even get read if this sentence is not well-crafted. Again, it should be specific and compelling. It should sell your company, not just describe it.
By G KAWASAKI
Slainte
Gordon
From how to change the world blog:
By now, you’ve probably already read several articles, web pages—even books—about writing the perfect executive summary. Most of them offer a wealth of well-intended suggestions about all the stuff you need to include in the executive summary. They provide a helpful list of the forty-two critical items you should cover—any entrepreneur worth his or her salt should be able to address these points in less than 100 pages—and then they tell you to be concise.
Most guides to writing an executive summary miss the key point: The job of the executive summary is to sell, not to describe.
The executive summary is often your initial face to a potential investor, so it is critically important that you create the right first impression. Contrary to the advice in articles on the topic, you do not need to explain the entire business plan in 250 words. You need to convey its essence, and its energy. You have about 30 seconds to grab an investor’s interest. You want to be clear and compelling.
Forget what everyone else has been telling you. Here are the key components that should be part of your executive summary:
1. The Grab: You should lead with the most compelling statement of why you have a really big idea. This sentence (or two) sets the tone for the rest of the executive summary. Usually, this is a concise statement of the unique solution you have developed to a big problem. It should be direct and specific, not abstract and conceptual. If you can drop some impressive names in the first paragraph you should—world-class advisors, companies you are already working with, a brand name founding investor. Don’t expect an investor to discover that you have two Nobel laureates on your advisory board six paragraphs later. He or she may never get that far.
2. The Problem: You need to make it clear that there is a big, important problem (current or emerging) that you are going to solve. In this context you are establishing your Value Proposition—there is enormous pain out there, and you are going to increase revenues, reduce costs, increase speed, expand reach, eliminate inefficiency, increase effectiveness, whatever. Don’t confuse your statement of the problem with the size of the opportunity (see below).
3. The Solution: What specifically are you offering to whom? Software, hardware, service, combination? Use commonly used terms to state concretely what you have, or what you do, that solves the problem you’ve identified. Avoid acronyms and don’t try to use this opportunity to create and trademark a bunch of terms that won’t mean anything to most people. You might need to clarify where you fit in the value chain or distribution channels—who do you work with in the ecosystem of your sector, and why will they be eager to work with you. If you have customers and revenues, make it clear. If not, tell the investor when you will.
4. The Opportunity: Spend a few more sentences providing the basic market segmentation, size, growth and dynamics—how many people or companies, how many dollars, how fast the growth, and what is driving the segment. You will be better off targeting a meaningful percentage of a well-defined, growing market than claiming a microscopic percentage of a huge, mature market. Don’t claim you are addressing the $24 billion widget market, when you are really addressing the $85 million market for specialized arc-widgets used in the emerging wocket sector.
5. Your Competitive Advantage: No matter what you might think, you have competition. At a minimum, you compete with the current way of doing business. Most likely, there is a near competitor, or a direct competitor that is about to emerge (are you sufficiently paranoid yet??). So, understand what your real, sustainable competitive advantage is, and state it clearly. Do not try to convince investors that your only competitive asset is your “first mover advantage.” Here is where you can articulate your unique benefits and advantages. Believe it or not, in most cases, you should be able to make this point in one or two sentences.
6. The Model: How specifically are you going to generate revenues, and from whom? Why is your model leverageable and scaleable? Why will it be capital efficient? What are the critical metrics on which you will be evaluated—customers, licenses, units, revenues, margin? Whatever it is, what impressive levels will you reach within three to five years?
7. The Team: Why is your team uniquely qualified to win? Don’t tell us you have 48 combined years of expertise in widget development; tell us your CTO was the lead widget developer for Intel, and she was on the original IEEE standards committee for arc-widgets. Don’t just regurgitate a shortened form of each founder’s resume; explain why the background of each team member fits. If you can, state the names of brand name companies your team has worked for. Don’t drop a name if it’s an unknown name, and don’t drop a name if you aren’t happy to give the contact as a reference at a later date.
8. The Promise ($$): When you are pitching to investors, your fundamental promise is that you are going to make them a boatload of money. The only way you can do that is if you can achieve a level of success that far exceeds the capital required to do that. Your Summary Financial Projections should clearly show that. But if they are not believable, then all of your work is for naught. You should show five years of revenues, expenses, losses/profits, cash and headcount. It might also make sense to show a key driver, such as number of customers or units shipped.
9. The Ask: This is the amount of funding you are asking for now. This should generally be the minimum amount of equity you need to reach the next major milestone. You can always take more if investors are willing to make more available, but it is hard to take less. If you expect to be raising another round of financing later, make that clear, and state the expected amount.
You should be able to do all this in six to eight paragraphs, possibly a few more if there is a particular point that needs emphasis. You should be able to make each point in just two or three simple, clear, specific sentences.
This means your executive summary should be about two pages, maybe three. Some people say it should be one page. They’re wrong. (The only reason investors ask for one page summaries is that they are usually so bad the investors just want the suffering to be over sooner.) Most investors find that there is not enough information in one page to understand and evaluate a company.
Please remember that the outline above should not be applied rigidly or religiously. There is no template that fits all companies, but make sure you touch in each key issue. You need to think through what points are most important in your particular case, what points are irrelevant, what points need emphasis, and what points require no elaboration.
Some other general points:
Do not lead with broad, sweeping statements about the market opportunity. What matters is not market size, but rather compelling pain. Investors would rather invest in a company solving a desperate problem for a small growing market, than a company providing an incremental improvement for a large established market.
Don’t acronym your own name. Sun Microsystems did not build its brand by calling itself “SMI.” (Of course, if you know where the name Sun came from, you understand this is an inside joke.)
Drop names, if they are real; don’t drop names if they are smoke. If you have a real partnership with a brand name company, don’t hide your lantern under a bushel basket. If you consulted for Cisco’s HR department one week, don’t say you worked for Cisco.
Avoid “purple farts”—adjectives that sound impressive but carry no substance. “Next generation” and “dynamic” probably don’t mean anything to your readers (unless you are talking about DRAM). Everybody thinks their software is “intelligent” and “easyto- use,” and everyone thinks their financial projections are “conservative.” Explain your company the way you would to a friend at a cocktail party (after one drink, not five).
State your value proposition and competitive advantage in positive terms, not negative terms. It is what you can do that is important, not what others cannot do. With the one or two most obvious competitors, however, you may need to be very explicit: “Unlike Cisco’s firewall solution, our software can operate ….”
Use simple sentences, not multi-tiered compound sentences.
Use analogs, as long as you are clarifying rather than hyping. You can say you are using the Google model for generating revenues, as long as you don’t say you expect to be the next Google.
Go back and reread each sentence when you're done: Are they clear, concise and compelling?
Finally, one of the most important sentences you write will not even be in the executive summary—it is the sentence that introduces your company in the email that you or a friend uses to send the executive summary. Your summary might not even get read if this sentence is not well-crafted. Again, it should be specific and compelling. It should sell your company, not just describe it.
By G KAWASAKI
Slainte
Gordon
Monday, January 21, 2008
A new start up company "WearMoneyNow.Com"
I would like to start a business , but where do I get the ideas ?
I have been asked many times about where can I get a good idea for a business, I have to admit, if I have a great Idea for a new business I probably wouldn't be trying to help start this one I am with at present. If you have the same problem as me then have a look at these site from time to time and see if it can stimulate your creative juices http://www.trendhunter.com/ & http://www.trendcandy.com/ , this would also be a good place to get your company noticed also, it's viral marketing at it's best. I have a friend who has a novel company and I thought it may get your creative juices flowing and get thinking out of the box, please have a look at her company.
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Farrah Grant owner of WearMoneyNow.com
Farrah Grant, owner of WearMoneyNow.Com, is a young entrepreneur who brings fresh, unique fashion accessories to the world with her exotic designs. She specializes in creating exclusive pieces to give each of her customers a sense of individuality in style.
Farrah is no stranger to the fashion world. Prior to establishing Wear Money Now, she spent over 5 years in international trade, providing custom-made apparel and fashion accessories, world-wide. In addition to international trade, Farrah also has experience in various aspects of e-commerce, such as sourcing/consulting, sales and general business enterprise.
After a successful career in e-commerce, she continues to expand, with the development of Wear Money Now accessories into the global market. Today, Farrah offers a wide range of distinctive fashion accessories at WearMoneyNow.Com, to the general public and retailers.
To contact Farrah Grant, please email: farrahdgrant@lycos.com or visit www.wearmoneynow.com
Farrah is no stranger to the fashion world. Prior to establishing Wear Money Now, she spent over 5 years in international trade, providing custom-made apparel and fashion accessories, world-wide. In addition to international trade, Farrah also has experience in various aspects of e-commerce, such as sourcing/consulting, sales and general business enterprise.
After a successful career in e-commerce, she continues to expand, with the development of Wear Money Now accessories into the global market. Today, Farrah offers a wide range of distinctive fashion accessories at WearMoneyNow.Com, to the general public and retailers.
To contact Farrah Grant, please email: farrahdgrant@lycos.com or visit www.wearmoneynow.com
Slainte
Gordon
Friday, January 18, 2008
Dragon's Den
This is a post which talks about one of the most feared Dragons from BBC's Dragon Dens soap opera. http://www.bbc.co.uk/dragonsden/ . This specific dragon is Deborah Meaden, she launched her own glass and ceramics export company straight out of business college and has since made her name in the holiday park business and she drives a smart car, fast.
Fearing the Dragon lady
Who’s the person you’d least like to go to, cup in hand, when trying to raise cash to start your business?
Is it your parents, who are still annoyed you stepped off the corporate ladder, and ‘safe’ career path to pursue some harebrained business idea? Perhaps a well-off mate who clearly has the money, but who’ll make you fell indebted long after the last repayment has been made.
Apparently not. According to a survey by Business Link, the person budding entrepreneurs would be most scared of pitching their business to is Dragons’ Den panellist Deborah Meaden.
The poll questioned 720 aspiring entrepreneurs, and Meaden received a fifth of all the votes. This compared to a mere 10% for Bannatyne, Jones and Paphitis.
So what is it that’s so frightening about Meaden? Why does she strike fear into the very hearts of all you otherwise plucky and daring entrepreneurs? Afsana Shukur, head of diversity and equality at Business Link London, sheds some light on the matter:
“There is no denying that Deborah's passion and direct approach has helped make her the successful business woman she is today. It’s unfortunate though, that many successful businesswomen tend to be viewed as domineering and aggressive.”
Is Meaden any more domineering and aggressive than the other Dragons? Or is it just that those qualities are not well received in a woman, therefore making her an unappealing choice.
Shukur says that the UK lacks female entrepreneur role models that buck this traditional stereotype, but I disagree. What was Dragon-like about the late Anita Roddick, cited by so many as truly inspirational? Sahar Hashimi, co-founder of Coffee Republic, is another example of a successful entrepreneur that made it without asserting that aggressive quality apparently so hated in women.
There are all kinds of female entrepreneurial role models out there, some aggressive and some not. But in what is supposedly a gender equal society, why are we still having this conversation. Alan Sugar is undoubtedly aggressive and domineering but strangely enough, he’s nowhere near the top of the poll.
Who’s the person you’d least like to go to, cup in hand, when trying to raise cash to start your business?
Is it your parents, who are still annoyed you stepped off the corporate ladder, and ‘safe’ career path to pursue some harebrained business idea? Perhaps a well-off mate who clearly has the money, but who’ll make you fell indebted long after the last repayment has been made.
Apparently not. According to a survey by Business Link, the person budding entrepreneurs would be most scared of pitching their business to is Dragons’ Den panellist Deborah Meaden.
The poll questioned 720 aspiring entrepreneurs, and Meaden received a fifth of all the votes. This compared to a mere 10% for Bannatyne, Jones and Paphitis.
So what is it that’s so frightening about Meaden? Why does she strike fear into the very hearts of all you otherwise plucky and daring entrepreneurs? Afsana Shukur, head of diversity and equality at Business Link London, sheds some light on the matter:
“There is no denying that Deborah's passion and direct approach has helped make her the successful business woman she is today. It’s unfortunate though, that many successful businesswomen tend to be viewed as domineering and aggressive.”
Is Meaden any more domineering and aggressive than the other Dragons? Or is it just that those qualities are not well received in a woman, therefore making her an unappealing choice.
Shukur says that the UK lacks female entrepreneur role models that buck this traditional stereotype, but I disagree. What was Dragon-like about the late Anita Roddick, cited by so many as truly inspirational? Sahar Hashimi, co-founder of Coffee Republic, is another example of a successful entrepreneur that made it without asserting that aggressive quality apparently so hated in women.
There are all kinds of female entrepreneurial role models out there, some aggressive and some not. But in what is supposedly a gender equal society, why are we still having this conversation. Alan Sugar is undoubtedly aggressive and domineering but strangely enough, he’s nowhere near the top of the poll.
taken from http://www.startups.co.uk/
Slainte
Gordon
Thursday, January 17, 2008
Planning your time at exhibitions and conferences
Planning your time at exhibitions and conferences:
This is a short post today, and too the point I hope. I have been in companies where the, sales, marketing and R&D guys see the attendance to these events as mandatory, and a "jolly", where manning a stand or exhibit is to be avoided and every night is one big party ? does this ring any bells. I suggest a strategy to get as much value from these events as possible, I have heard engineers come back from these events and be asked by the rest of the staff, so how was it? and they get a 20min discourse on the beer , wine and women, and 5min on the content of the event. These events are primarily a major networking event, and information gathering, you never really make any big sales or sign any deals at these events, the purpose changes when you are a multi million business where , you need to be there, for presence, our you could just break the mold.
Preparation
Before the event you have a "campaign meeting" set the ground rules, dress code and major objectives, these are the same for any meeting you have. Once you have defined the reason for attending, you select who you can spare for the event, use your own criteria, but the organization should still function at 100% when the attendees are absent. The next step is to list the key contacts you want to make, with suppliers, customers and future customers and give everyone there own targets, and a back up list. The evenings are set aside for customer relationship meals, invite customers, and interested parties, be seen to be organising a meeting not just for your benefit, but also for the attendees, this way you are sure to have people wanting to attend, be personal, give a personal invite. The key is to get key decision makers there in the one room, pick a relaxed venue and make sure your guys are being good hosts,make sure the guests can get back to there accommodation safely.
During the event
Have team briefings daily during the event, over breakfast, away from your accommodation, so you can speak freely, and adjust the plans, as you are updated on progress to your objectives of the campaign. Make sure everyone has a supply of the C-Level guys business cards in the company so if they meet someone interesting , they can get your card in there hands and make sure they get one in return. Include a back from base update, this could by a http://www.skype.com/ conference, a short update to the team back at base on how things are progressing, there and back at the company.
Back from the event
Review reports from all who attended, follow up emails or contacts completed by the first week back. Have an "all hands " meeting to inform the company, how things went, what difference it made to the company, that you attending the event made. Decide if you are going next year.
These events can be good for the company and a good use of resources, or they can be a waste, planning makes the difference.
Slainte
Gordon
Wednesday, January 16, 2008
Some new Ideas on performance grading
What Is Forced Ranking?
by Jennifer Alsever
by Jennifer Alsever
GW (Taking the H out of HR )
Forced ranking is a controversial workforce management tool that uses intense yearly evaluations to identify a company's best and worst performing employees, using person-to-person comparisons. In theory, each ranking will improve the quality of the workforce. Managers rank workers into three categories: The top 20 percent are the "A" players, the people who will lead the future of the company. They're given raises, stock options, and training. The middle 70 percent are the "B" players, steady-eddies who are given smaller raises and encouraged to improve. The bottom 10 percent are the "C" players, who contribute the least and may be meeting expectations but are simply "good" on a team of "greats." They're given no raises or bonuses and are either offered training, asked if they'd be happier elsewhere, or fired.
Why It Matters Now
Although most large organizations refuse to publicly discuss or even confirm whether they're using some form of forced ranking, as many as one-third of Fortune 500 companies use such systems, says Dick Grote, author of "Forced Ranking: Making Performance Management Work." Forced ranking first gained attention at General Electric in the 1980s. The practice lost its glimmer in recent years following Enron's downfall, which has been attributed in part to back-biting spurred by forced rankings. But with unemployment at its lowest level since the 1990s, the talent war has heated up again, making it more important to identify top performers, since they're being more heavily recruited.
Why It Matters to You
Forced ranking tends to be popular with large corporations that have hundreds or thousands of employees and need to systematize their HR processes. If your workplace is one of these—and if the company is in trouble and looking for solutions—forced ranking could be in your future. The long-run impact should ideally be increased productivity, profitability, and shareholder value. But sometimes a company culture can shift due to forced ranking, creating a more competitive atmosphere and decreasing morale.
If you're in the market for a new job, spend some time researching which companies in your industry use forced ranking. Some firms will not openly offer this information to potential employees.
The Strong Points
By identifying their top employees, companies can jolt managers out of complacency, combat artificially inflated performance ratings, and reduce favoritism, nepotism, and promotions that may be based on factors other than performance. Managers can identify top performers—the people they least want to lose—and reward, keep, and train them to be future leaders of the business. Forced ranking also provides a justifiable way to identify and lose workers who may be holding the business back. About 40 percent of "C" players voluntarily resign, which is often a happy outcome for managers, who can then hire better-quality replacements.
The Weak Spots
Companies can inevitably make mistakes using forced ranking, firing someone who might go on to be a super star elsewhere or discouraging excellent performers by ranking them as mediocre simply to fill a quota. Replacing lower-rung employees each year can also be costly and can lower productivity in the early months of adoption. New data, including a study by Drake University professor Steve Scullen, shows that forced ranking loses its effectiveness after a couple of years, since the average quality of workers increases and there are fewer "C" players to identify.
Critics also claim the system creates a competitive environment that can result in cutthroat, unethical behavior; limit risk-taking, creativity, and teamwork; and discourage workers from asking for help or extra training out of fear that they'll be identified as low performers. The strategy has also resulted in legal troubles for such companies as Microsoft, Ford, Goodyear, 3M, and Capital One, which have fought discrimination lawsuits filed by former employees who claimed forced ranking was used to discriminate on the basis of race or age.
Key Players:
General Electric: The most famous practitioner of forced ranking in the 1980s and 1990s. Former CEO Jack Welch suggests that forced ranking helped grow GE's revenues to $130 billion in 2000 from $70 billion in 1995.
Yahoo! The Internet company created its own version of forced ranking, called "stack-ranking," to determine how compensation increases are distributed. Managers rank employees from top to bottom and award bonuses and raises accordingly.
Ford Motor Co.: The car manufacturer employed forced ranking until 2001, when Bill Ford took over as CEO. Ford settled a lawsuit for $10.6 million that year when fired employees alleged age discrimination.
Motorola: The phone maker relied on forced ranking between 2001 and 2003 but has since discontinued using the management system.
How to Talk About It
Despite widespread usage, most executives and human resources officials won't use the term "forced ranking" to refer to their own process because the phrase itself seems harsh. People refer to it as their "talent management process" or "leadership assessment procedure."
Relative comparison: An appraisal that compares employees against each other, forcing some to be rated above others, such as, "How did Joe do compared to Sally and Bob?"
Absolute comparison: A conventional performance appraisal, such as, "How good did Joe do against the responsibilities and goals set at the beginning of the year?"
Forced distribution: An appraisal that does not compare people against each other but gives employees ratings such as "excellent," "good," or "needs improvement." A set number or percentage of workers must fall into each category.
Further Reading
Book: "Jack: Straight from the Gut" by Jack Welch
Book: "Forced Ranking: Making Performance Management Work" by Dick Grote
Book: "Hard Facts, Dangerous Half-Truths and Total Nonsense: Profiting from Evidence-Based Management" by Jeffrey Pfeffer & Robert I. Sutton
Book: "Jack: Straight from the Gut" by Jack Welch
Book: "Forced Ranking: Making Performance Management Work" by Dick Grote
Book: "Hard Facts, Dangerous Half-Truths and Total Nonsense: Profiting from Evidence-Based Management" by Jeffrey Pfeffer & Robert I. Sutton
Slainte
Gordon
Tuesday, January 15, 2008
Presentation techniques up grade
Presentation techniques up grade:
I have a copy of Garr Reynolds definitive book about making great presentations: Presentation Zen: Simple Ideas on Presentation Design and Delivery (Voices That Matter). I have started to flick through it and found it to be one of the best books on the subject matter, if you can get a copy. Presentation is the one skill that we will never perfect, there is always something we can learn and implement to make our "performance" better.
Here are ten questions (really thirteen) with the author that I picked up from Guy Kawasakis blog:http: http://www.blog.guykawasaki.com/
Ten Questions With Garr Reynolds
Question: Who indexed your book? I know I’m in it, but I’m not in the index . Of course, it does say something about me that I would look for my name in the index. :-)
Answer: I was horrified when I saw that! A thousand apologies. I since learned a good piece of advice for new authors: Always do your own indexing or at least be very involved in it. The indexer did a very good and quick job, so it was my fault for not checking and adding a few names and page numbers to subjects. The index was designed to be light to save space, but not that light. Live and learn.
Question: Who indexed your book? I know I’m in it, but I’m not in the index . Of course, it does say something about me that I would look for my name in the index. :-)
Answer: I was horrified when I saw that! A thousand apologies. I since learned a good piece of advice for new authors: Always do your own indexing or at least be very involved in it. The indexer did a very good and quick job, so it was my fault for not checking and adding a few names and page numbers to subjects. The index was designed to be light to save space, but not that light. Live and learn.
Question: Okay, now that we got that out of the way, what is the “Presentation Zen” approach?
Answer: Presentation Zen is indeed an approach not a method. There are many paths and many methods to presenting insanely well today. At its heart Presentation Zen is about restraint, simplicity, and a natural approach to presentations that is appropriate for an age in which design-thinking, storytelling, and “right-brain thinking” are crucial complements to analysis, logic, and argument.
The goal of the book was not to offer panaceas and rigid rules, but instead to encourage people to think differently about their visuals, the way they present them, and how they connect with audiences. My hope is that people find some things new in the book that stimulate their creativity--helping them to discover a more “enlightened” and more effective approach to presenting.
Question: How did we get to this place where most presentations suck?
Answer: There are many reasons. First of all, presenting exceptionally well isn’t easy. In fact it’s hard. That’s why we find great presenters—and great communicators in general—so remarkable. They are all too rare. Many professionals simply have never had much practice and just follow conventional wisdom and do it “like everyone else” instead of doing it effectively.
PowerPoint and Keynote are both pretty simple tools, but there has been too much focus on the tools themselves. If people want to learn how to make better slides they should study good books on graphic design and visual communication to improve their visual literacy.
When it comes to designing appropriate visuals, there is a hole in our education. Concerning quantitative displays, for example, very few people have had proper training in how to design graphs and charts, etc. The great master Edward Tufte has written many useful books in this regard.
Question: Are PowerPoint and Keynote part of the problem or part of the solution?
Answer: There is no question that PowerPoint has been at least a part of the problem because it has affected a generation. It should have come with a warning label and a good set of design instructions back in the ’90s. But it is also a copout to blame PowerPoint—it’s just software, not a method.
True, the templates and wizards of the past probably took most of us—who didn’t know any better anyway—down a road to “really bad PowerPoint” as Seth Godin calls it. But today we know better, and we can make effective presentations with even older versions of PowerPoint—often by ignoring most of the features. Ultimately it comes down to us and our skills and our content. Each case is different, and some of the best presentations include not a single slide. In the end it is about knowing your material deeply and designing visuals that augment and amplify your spoken message.
Question: In a nutshell, what makes a good presentations stick?
Answer: If you want to know how to make better presentations, buy Made to Stick by Chip Heath and Dan Heath. The Heath brothers found that sticky, compelling, and memorable messages and ideas share six common attributes: Simplicity, Unexpectedness, Concreteness, Credibility, Emotions, and Stories. Ask yourself how your presentations rate for these elements, and you are on your way to crafting presentations that stick.
Question: Specifically, what makes Steve Jobs’s presentations so great?
Answer: Steve Jobs makes it look easy. He’s comfortable and relaxed. This in turn makes the audience feel relaxed. His keynotes usually rate very high on the Heath brothers’ “sticky scale” above. Steve also speaks in a manner that is conversational, and even though he practices a lot before the event, his words never sound scripted.
Steve uses the slides to help him tell a story, and he interacts with them in a natural way, rarely turning his back on the audience because monitors in front show the same onscreen image as well as the next slide. Steve uses visuals, his own words, and a natural presence to tell his story. His visuals do not overpower him, but they are an important component of the talk. Steve also demos his own software. This is much harder than giving a presentation, but he pulls it off well. How many CEOs can do that?
Question: Do you think that Bill Gates (a) knows his presentations are lousy and doesn’t care or (b) doesn’t know they are lousy at all?
Answer: Who knows? Historically, Bill has been a good contrast in styles to Steve Jobs. In the past we said, “Do it more like Steve and less like Bill.” The thing is, one-on-one Bill seems very engaging and very likable, but he has always struggled with the keynote address. The awful slides behind him usually do not help.
I wish Microsoft would call Bert Decker for some coaching and hire Duarte for the visuals. If Duarte can make Al Gore an extraordinary presenter, think what they could do for Bill. Bill is a remarkable man, not just for his software so much as for his philanthropy and his work with his foundation. So it would be nice for a remarkable man like Bill to be a remarkable presenter too. His CES keynote was better—not great, but an improvement. Perhaps Bill will abandon the all too common common “death by PowerPoint” method in future.
Question: What’s your version for the optimal number of slides, length of presentation in minutes, and font size?
Answer: It really depends on a great many things, but if I was going to make a pitch to a venture capitalist, I’d probably recommend your 10/20/30 method. That is, the presentation should have about ten slides, last no more than twenty minutes, and contain no font smaller than about thirty points. I especially like the twenty-minute limitation of this method.
There are myriad types of presentation situations and the actual number of slides and the time may vary greatly depending on the specific circumstances and method. However, the audience should have no idea how many slides you have. Once they start counting slides all is lost. As far as text goes, I say as little as possible on slides, but when text does appear it should be large and serve to complement your words. People did not come to read; they came to hear. Any speaker can read bullet points. The audience wants to hear your story not read it.
Question: How many slide transitions should a presentation contain?
Answer: It’s good that PowerPoint and Keynote have many transition options, but people need to exercise restraint and use a very few effects. I suggest using no more than two to three different types of transition effects per presentation and not use transition effects for every slide. I use a fade to black between the major sections of a talk to communicate closure of one section and the opening of the next one.
I often use a smooth dissolve to gently move from one visual to the next as I continue speaking. Using no transition effects is also often appropriate. When you watch a film or a TV show you are not usually aware of the transition effects from one scene to another--that would be distracting. Audiences should not notice the effects we employ between slides too.
Question: Why do you think 2-D graphs are better than 3-D graphs?
Answer: 3D charts and graphs are very popular with consumers, but in almost every case it is preferable to use 2-D graphics to display 2-D data. Charts with 3-D depth and distortion usually make things harder to see, not easier. Some of the precision is lost. There is beauty in the simple display of the data itself, there is no need to decorate with distorted perspectives. If the graphic is just for showing the roughest of general trends, then there is nothing really wrong with a 3-D chart I suppose, but when you are trying to show a true visual representation of the data in the clearest way possible, a simple chart without 3-D adornment is usually better.
Question: How many times do you think a person should rehearse a presentation?
Answer: You should rehearse at least three to four times all the way through and rehearse the first three minutes at least ten times or more. You also need to do a formal dress rehearsal in front of a real audience such as coworkers who can give you constructive criticism.
In some ways good presenting is like good writing, you’ve got to pare it down and dump the superfluous and the non-essential. But since we are so close to the material it is hard for us to see what works and what does not, or what is repetitive, etc. This is why you cannot only rehearse alone. You’ve got to rehearse in front of others so that you can experience the nerves, the blank stares, etc.
The more you rehearse the more the fear of the unknown is removed. The more the fear is removed, the more confident you will become. As you become more confident you will feel more relaxed and your confidence will shine through. The thing about confidence is that it’s impossible to fake, but with practice you will indeed become a confident speaker. And yes, it is possible to rehearse too much. You want it to sound natural and fresh, not mechancial and memorized. Usually three to four full rehearsals will get you there.
Question: What is the single most important thing people could do to enhance their presentations?
Answer: Turn off the computer, grab some paper and a pencil, and find someplace quiet. Think of the audience. What is it they need? What is it you want to say that they need to hear. Identify what’s important and what is not. You can’t say everything in a twenty-minute talk—or even a two-hour talk.
The problem with most presentations is that people try to include too much. You can go deep or you can go wide, but you can’t really do both. What is the core message? This time “off the grid” with paper and pencil or a white board is where you can clarify your ideas and then get them on paper visually. After your ideas and basic structure are clear, then you can open up the software and start laying out the story in the slide sorter view.
If the computer ever freezes in your live talk you need to move on. The work you did in the preparation stage “off the grid” and away from the computer will help make things concrete in your own mind so that you can move forward sans your Macintosh in the event of a technical glitch. By the way, if you ask the audience to bear with you as you try to make the computer work, you might as well stick a fork in it because you are done. Keep moving forward in the unlikely event of a technical glitch.
Question: Who are the ten best presenters?
Answer: I have pointed to many on my site over the years such as Seth Godin, Steve Jobs, you, Al Gore, Lawrence Lessig, Tom Peters, Hans Rosling, and many more. Recently I have come to think that US senator Barack Obama is an amazing speech maker as well. But more than anything, I point people to TED where they can see some really good presentations and speeches by some very smart and creative people who are all trying to change the world in their own way. Each case is different, but really, if you’re not trying to change the world, what is the point of making a presentation?
Slainte
Gordon
Monday, January 14, 2008
Setting goals
Setting goals:
If we don't set any goals for your life, how are we going to make progress in the direction you want to go ? I have spoken to a lot of friends and colleagues and the successful ones are those who have set goals and strategies to achieve them, these range from financial goals, to personal relationship goals, or even just I am going on a vacation this year. I ask my self the questions, am I doing the same things in my life now as I was last year ? am I doing the things I wanted to be doing now ? if not what went wrong ?I then assess what do I want to be doing in my life and then plan how do I get there. I find writing these things down make them more solid, and posting them somewhere public/ online if you can, strengthens that even further. Share them with one or two close friends, this helps to validate your goals, and it may even allow them to support you in achieving them.
Short Article By Graeme Nichol of Arcturus Advisors. Please visit their website at http://www.arcturusadvisors.com/. Arcturus Advisors works with businesses to implement their strategies. - Navigating Business Success -
Setting Your Personal Goals
In one of my recent articles I wrote about Personal Strategic Plans. I have had many responses to this simple article I thought I'd follow it up with some more thoughts.
In my conversations with hundreds of top business people over the years, I have found that they all have one thing in common. They have taken the time to sit down and create a clear blueprint for themselves and their future lives. So many have said that they started the process of goal setting and personal strategic planning with more than a little skepticism. As their success have increased so too has every one of them has become a true believer in the process. Everyone has a process. It's not a hit and miss sit down and throw out a few nice sounding goals!
Every one has been amazed at the incredible power of goal setting and strategic planning. Every one of them has accomplished far more than they ever believed possible and they ascribe their success to the deliberate process of thinking through every aspect of their work and their lives, their successes and struggles, their motivators, values and beliefs, and then developing a detailed, written road map to get them to where they wanted to go.
It's not that hard to believe and so many people don't do it because they don't have any idea on what to do and how to go about developing goals.
Best Year Yet Program
A few years back I needed a process for a client I was working with both for his team and for their personal strategic plans. I discovered a program called Best Year Yet and have since brought it into my business.
Learn how 10 simple questions can provide you with the most important strategies and techniques ever discovered to help you accomplish more of your goals, faster than you ever have before. The amazing thing is that you have the answers, and these questions will bring them out.
The Definition of Happiness
Happiness has been defined as, "The progressive achievement of a worthy ideal, or goal." When you are working progressively, step-by-step toward something that is important to you, you generate within yourself a continuous feeling of success and achievement.
You feel more positive and motivated. You feel more in control of your own life. You feel happier and more fulfilled. You feel like a winner, and you soon develop the psychological momentum that enables you to overcome obstacles and plough through adversity as you move toward achieving the goals that are most important to you.
Determine Your Values
Personal strategic planning begins with your determining what it is you believe in and stand for--your values. Your values lie at the very core of everything you are as a human being. Your values are the unifying principles and core beliefs of your personality and your character. The virtues and qualities that you stand for are what constitute the person you have become from the beginning of your life to this moment.
Your values, virtues and inner beliefs are the axle around which the wheel of your life turns. All improvement in your life begins with you clarifying your true values and then committing yourself to live consistent with them.
Fuzzy or Clear?
Successful people are successful because they are very clear about their values. Unsuccessful people are fuzzy or unsure. Complete failures have no real values at all.
When you take the time to think through your fundamental values, and then commit yourself to living your life consistent with them, you feel a surge of mental strength and well-being. You feel stronger and more capable. You feel more centered in the universe and more competent of accomplishing the goals you set for yourself.
Action Exercises
Here are two things you can do immediately to put these ideas into action.
First, decide for yourself what roles you have in your life and then organize your life around them. Pick one to highlight this coming year, for even greater success. Write down your goals around these roles and make plans to achieve them. Have fun.
Second, begin with your values by deciding what it is you stand for and believe in. Commit yourself to live consistent with your inner most convictions -- and you'll never make another mistake.
In one of my recent articles I wrote about Personal Strategic Plans. I have had many responses to this simple article I thought I'd follow it up with some more thoughts.
In my conversations with hundreds of top business people over the years, I have found that they all have one thing in common. They have taken the time to sit down and create a clear blueprint for themselves and their future lives. So many have said that they started the process of goal setting and personal strategic planning with more than a little skepticism. As their success have increased so too has every one of them has become a true believer in the process. Everyone has a process. It's not a hit and miss sit down and throw out a few nice sounding goals!
Every one has been amazed at the incredible power of goal setting and strategic planning. Every one of them has accomplished far more than they ever believed possible and they ascribe their success to the deliberate process of thinking through every aspect of their work and their lives, their successes and struggles, their motivators, values and beliefs, and then developing a detailed, written road map to get them to where they wanted to go.
It's not that hard to believe and so many people don't do it because they don't have any idea on what to do and how to go about developing goals.
Best Year Yet Program
A few years back I needed a process for a client I was working with both for his team and for their personal strategic plans. I discovered a program called Best Year Yet and have since brought it into my business.
Learn how 10 simple questions can provide you with the most important strategies and techniques ever discovered to help you accomplish more of your goals, faster than you ever have before. The amazing thing is that you have the answers, and these questions will bring them out.
The Definition of Happiness
Happiness has been defined as, "The progressive achievement of a worthy ideal, or goal." When you are working progressively, step-by-step toward something that is important to you, you generate within yourself a continuous feeling of success and achievement.
You feel more positive and motivated. You feel more in control of your own life. You feel happier and more fulfilled. You feel like a winner, and you soon develop the psychological momentum that enables you to overcome obstacles and plough through adversity as you move toward achieving the goals that are most important to you.
Determine Your Values
Personal strategic planning begins with your determining what it is you believe in and stand for--your values. Your values lie at the very core of everything you are as a human being. Your values are the unifying principles and core beliefs of your personality and your character. The virtues and qualities that you stand for are what constitute the person you have become from the beginning of your life to this moment.
Your values, virtues and inner beliefs are the axle around which the wheel of your life turns. All improvement in your life begins with you clarifying your true values and then committing yourself to live consistent with them.
Fuzzy or Clear?
Successful people are successful because they are very clear about their values. Unsuccessful people are fuzzy or unsure. Complete failures have no real values at all.
When you take the time to think through your fundamental values, and then commit yourself to living your life consistent with them, you feel a surge of mental strength and well-being. You feel stronger and more capable. You feel more centered in the universe and more competent of accomplishing the goals you set for yourself.
Action Exercises
Here are two things you can do immediately to put these ideas into action.
First, decide for yourself what roles you have in your life and then organize your life around them. Pick one to highlight this coming year, for even greater success. Write down your goals around these roles and make plans to achieve them. Have fun.
Second, begin with your values by deciding what it is you stand for and believe in. Commit yourself to live consistent with your inner most convictions -- and you'll never make another mistake.
Slainte
Gordon
Friday, January 11, 2008
There is no quick fix in business
There is no Quick fix in business:
I am working through some challenges at work at present , and on my way in to work this morning it was crystal clear to me , we live in an age that we want everything now, the "instant generation", fast food, fast coffee, fast service, super fast broadband, instant messaging, we want instant fixes to everything. As I was driving back from the doctors, and mulling through how the years off working in high stress jobs as the doctors sees it, have taken a toll on my body, also I was thinking about diets and wouldn't it be nice to have an instant diet or something to help loose weight faster etc etc, and there are pills, potions and smell things that can help but they usually have side effects, and it came to me we people expect the same when they are in business. There is no substitute to hard work, and quick fixes in business will have side effects.
Slainte
Gordon
I am working through some challenges at work at present , and on my way in to work this morning it was crystal clear to me , we live in an age that we want everything now, the "instant generation", fast food, fast coffee, fast service, super fast broadband, instant messaging, we want instant fixes to everything. As I was driving back from the doctors, and mulling through how the years off working in high stress jobs as the doctors sees it, have taken a toll on my body, also I was thinking about diets and wouldn't it be nice to have an instant diet or something to help loose weight faster etc etc, and there are pills, potions and smell things that can help but they usually have side effects, and it came to me we people expect the same when they are in business. There is no substitute to hard work, and quick fixes in business will have side effects.
Slainte
Gordon
Thursday, January 10, 2008
Some lessons to be learnt about Sales from the best
God is a Salesman:
Learning from the most successful salesman, God, companies can maintain a loyal client base.
Jan. 9, 2008 -- In his new book, God Is A Salesman, author Mark Stevens explains that first-class salespeople should emulate the "ultimate salesman" by quietly and invisibly demonstrating why customers should believe in them and in turn buy from them.
IndustryWeek posed some questions to Stevens based on the principles of his book.
Q. You advise that it is important for companies to treat the people they sell to, as well as their employees, as family members. Can you explain?
A. When companies think of the people who buy their products as "customers" they treat them as numbers. And no one wants to be a number. We want to be valued. We want to be surprised by gestures of thoughtfulness. Thinking of the people who support our businesses as family members is like looking through a prism and changing every aspect of the way we relate to them, for the better.
While speaking at the Siemens global CEO conference in Berlin this past October, I noted that every three years I purchase a new Mercedes and each one is always better than the last, often in little details only a long-term Mercedes owner would notice. Sitting in the audience was the company's CFO. When I completed my speech, he approached me to ask which improvements I was referring to. He seemed genuinely delighted to learn of my pleasure and said "We feel like we are all family members. We drive the cars too, not because we make them, but because we want to see first hand how they perform and then suggest to the engineers how to make them better."
Q. One of your key principles is that companies should make an iron clad guarantee. Is that realistic?
A. Yes, but not the kind of guarantee you may jump to at first thought. Forget the lawyers and the fine print for a moment. The guarantee people want most is that the company will stand behind their product. They want to know that whenever there is a legitimate problem, the company representative they talk to will address it until the customer is thrilled: no questions asked.
When I was at the Nike campus consulting with senior management, they advised me of their guarantee policy: Just say sorry you weren't thrilled, take back the shoes and offer the customer a new pair of shoes and an added benefit to make up for the disappointment. Simply providing a credit is not nearly enough. It's a wash. A great company, one that believes in giving an iron clad guarantee, does so and then demonstrates its commitment by providing the customer with an added gesture of commitment when and if something goes wrong. This is the kind of guarantee that matters most to people....and it is in sync with being treated as a family member.
Q. You advise that it is important to make potential customers "an offer they can't refuse." Does that mean a low price? Or some form of staggering innovation?
A. Neither. It means creating a message that demonstrates that the product is greater than the sum of its parts. Henry Ford is widely viewed as a skilled manufacturer, and he was, but his greatest feat came in the marketing and sales arena. No one could move the metal like Henry. And he did so by selling more than cars: he sold the freedom to leave the farm at night, to visit relatives and neighbors, to see more of the world. That was an offer Ford's prospects, an entire nation, could not refuse.
One of our clients, Red Boomerang, creates IT backup software. When we went to market, we knew we needed a highly compelling way to sell that. Something, yes, greater than the sum of its parts. With this in mind, we developed the concept of Protect Your Genius. Everyone creates plans, poems, pictures, photos -- intellectual property that is their genius. Red Boomerang backs this up in remote storage but we sell it in a way that people can't refuse: protecting your most valuable assets. Your ideas.
Today, anything that is perceived as equal to the sum of its parts isn't good enough. Increasingly, Nokia's won't be able to compete with iPhones or Google Phones. Ask Steve or Sergey about an offer you can't refuse. They live by it.
Q. Why do you say people buy trust before they buy products?
A. In almost every case, a manufactured product has a competitive entry that is just as good or even better. Why is one a category leader and another an also-ran?
Trust! Consider the following companies, leaders in a wide range of industries, that are leaders for the primary fact that people believe in them. Trust them: Toyota, Maytag, Levi Strauss, Anheuser-Busch, Proctor & Gamble.
So much time and money is often spent on advertising and other forms of marketing without sufficient consideration of the trust factor. And that is money down the drain. If people don't believe Chevys will serve them safely and reliably, that GM could care less about them as human beings, they will make sure Toyota takes the global top slot in car sales no matter how much money Chevy's ad agencies throw at TV.
The real bottom line is that there are no shortcuts in business. The companies that commit themselves to their customers, that think ahead of the curve, that seek out shortcomings proactively, that engage in relentless improvement, they have a family of loyal customers who know a guarantee when they see one and trust them for life.
Mark Stevens, is CEO of the global marketing/management firm, MSCO. www.msco.com
Slainte
Gordon
Wednesday, January 09, 2008
A test to see how good your knowledge is of Entrepreneurship
The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By
Do you understand the reality of entrepreneurship or do you believe the myths?Answer each question by clicking on your answer to each of the questions below. Your final score will appear at the bottom of the page. If you have a low score, don’t worry— Illusions of Entrepreneurship provides the answers to these questions and much more.Good Luck!
http://yalepress.yale.edu/yupbooks/entrepreneurshipquiz.asp
Follow the link to the Quiz, you will find it very interesting and informative,
Slainte
Gordon
Do you understand the reality of entrepreneurship or do you believe the myths?Answer each question by clicking on your answer to each of the questions below. Your final score will appear at the bottom of the page. If you have a low score, don’t worry— Illusions of Entrepreneurship provides the answers to these questions and much more.Good Luck!
http://yalepress.yale.edu/yupbooks/entrepreneurshipquiz.asp
Follow the link to the Quiz, you will find it very interesting and informative,
Slainte
Gordon
Some humor for a Wednesday
Some humor for a cold and windy Wednesday morning by the sea, I have a lot going on at present and am juggling a few mental balls, I need to get back in to the groove of moving forward, and this project is a struggle at present. So I have found some humor and here it is, I saw this post on http://foundread.com/ it is some serious humor wrt the VC's , I wonder if any of my friends can pick out the Scottish Enterprise Chiefs amongst this lot, so to the post:
1) Mr. Armchair. He’s a Friday afternoon Chairman. He knows exactly what he’d do as board member of facebook, Google, MySpace.,YouTube. Too bad his portfolio company’s don’t get the same enthusiastic coverage.
2) Mr. One-Hit-Wonder. Yes he sold Postage.com for $200 million (and kept $15 million) so if you wanna hear war stories from the ’90s, take this GSB alum’s money.
3) Mr. Spray-n-Pray. He cites being founding CEO as his Operations experience. (Translation: He was a interim CEO for his last venture firm before company/portfolio implosion and subsequent fund implosion. His fund is a catch-all and he tries to participate in every Sequoia backed deal.
4) Mr. Revisionist Historian. Knowing Pierre Omidyar, living near him in Hawaii and investing in eBay after it went public doesn’t count for didly.
5) Mr A**!@#!-BFF all rolled up into one. He remembers to comp you tickets when your alma mater rolls into town for Stanford hoops. He’ll choke stock outta your co-founder just to up his percentage from 42.5% to 46.25%. On your board, he roasts you one quarter and sing accolades the next. He’s three times divorced and a heck of a good time to go to Vegas with.
6) Mr. Blue Blood. His IQ is double your 155. He’s 5th-generation money. He’s so far ahead of the curve that he married the trophy wife 1st (vs. other VCs whose Trophy is 2.0). His kids (age 2/4/7) can debug your DB using their PlaySchool Mac and will be smarter than you by June.
7) Mr. IRR. He’s old school and he’ll hit his rate of return goals even if he has to give birth in the first person. He goes into deals at a 45 degree entry angle. His bio doesn’t list his alma mater because the 30 companies he IPO’ed take his alloted two pages.
8) Mr. X-Product Manager. He says he’s seeking alpha, but has zero stomach for beta. Beta here, of course, meaning risk not software version. If team + market opportunity + cap table + due dilligence + angel syndicate are in perfect order, he’ll pull the trigger. Number of winners = 0, but he can pee on a parade seven ways to Sunday.
9) Mr. Regurgitator. At HBS, he did well by parroting and that talent has served him well. Once, he culled the wrong case study resulting in a buy rec on BioPay and wallah! Exit-a-mundo! He’s so lucky that in ’08 he’ll be reverse-justifying his funds success.
2) Mr. One-Hit-Wonder. Yes he sold Postage.com for $200 million (and kept $15 million) so if you wanna hear war stories from the ’90s, take this GSB alum’s money.
3) Mr. Spray-n-Pray. He cites being founding CEO as his Operations experience. (Translation: He was a interim CEO for his last venture firm before company/portfolio implosion and subsequent fund implosion. His fund is a catch-all and he tries to participate in every Sequoia backed deal.
4) Mr. Revisionist Historian. Knowing Pierre Omidyar, living near him in Hawaii and investing in eBay after it went public doesn’t count for didly.
5) Mr A**!@#!-BFF all rolled up into one. He remembers to comp you tickets when your alma mater rolls into town for Stanford hoops. He’ll choke stock outta your co-founder just to up his percentage from 42.5% to 46.25%. On your board, he roasts you one quarter and sing accolades the next. He’s three times divorced and a heck of a good time to go to Vegas with.
6) Mr. Blue Blood. His IQ is double your 155. He’s 5th-generation money. He’s so far ahead of the curve that he married the trophy wife 1st (vs. other VCs whose Trophy is 2.0). His kids (age 2/4/7) can debug your DB using their PlaySchool Mac and will be smarter than you by June.
7) Mr. IRR. He’s old school and he’ll hit his rate of return goals even if he has to give birth in the first person. He goes into deals at a 45 degree entry angle. His bio doesn’t list his alma mater because the 30 companies he IPO’ed take his alloted two pages.
8) Mr. X-Product Manager. He says he’s seeking alpha, but has zero stomach for beta. Beta here, of course, meaning risk not software version. If team + market opportunity + cap table + due dilligence + angel syndicate are in perfect order, he’ll pull the trigger. Number of winners = 0, but he can pee on a parade seven ways to Sunday.
9) Mr. Regurgitator. At HBS, he did well by parroting and that talent has served him well. Once, he culled the wrong case study resulting in a buy rec on BioPay and wallah! Exit-a-mundo! He’s so lucky that in ’08 he’ll be reverse-justifying his funds success.
OK, I lied. There are 12 of them, but if I told you this, I didn’t think you’d keep reading…
10) Mr. Imitator. Read the GBS case study about a young vc getting 20% of a company for nothing (an urban myth) and has been trying to replicate it ever since.
11) Mr. Retired-on-the-Job. He’s rich but mentally checked out. Has ‘income on his cash’ & ‘carry on his fund’ even if they “discover” all 3 of the next Googles.
12) Mr. ROTJ has tracking software for houses, property, assets. One time he bought a car that he already owned. Uses duck9 sms alerts — not for credit card bills, but for which girlfriend in Austin, San Fran, New York needs ‘xoxoxox.’
11) Mr. Retired-on-the-Job. He’s rich but mentally checked out. Has ‘income on his cash’ & ‘carry on his fund’ even if they “discover” all 3 of the next Googles.
12) Mr. ROTJ has tracking software for houses, property, assets. One time he bought a car that he already owned. Uses duck9 sms alerts — not for credit card bills, but for which girlfriend in Austin, San Fran, New York needs ‘xoxoxox.’
The post was by Serial founder Larry Chiang, who is a frequent contributor to FoundREAD. His earlier posts include: How to Work The Room; and 8 Tips On How to Get Mentored . Larry’s current company is duck9, which offers “deep underground credit knowledge,” educating student borrowers on how to establish and maintain good credit, and endeavors to graduate them with a FICO over 750. If you want to read more about Larry and his first company, United College Marketing Services, you will find it in the Oct. 15 issue of Business Week. I must admit after reading through the list I have experienced most of these type of folk...but you would find them in any industry, I have worked with an Ex Israel Tank commander as a VC, a very interesting guy to work with, and not bad for VC as they go.
Slainte
Gordon
Tuesday, January 08, 2008
Maxims: Lose the Devils and keep the Angels.
Anybody who’s read my maxims for any length of time knows that I am a fundamentalist on pricing and abusive customer relationships. Maxims that recommend leaving the unprofitable customers for the competitors are among them. I have an ally who has actually created a business theory around these concepts: Larry Selden of Columbia University’s Graduate School of Business. What professor Selden found was there is a direct correlation between a company’s stock price and its ability to develop a profitable customer portfolio (like … duh … isn’t this basic business theory that stock valuations are related to profits?). More importantly, he has developed a theory that a company should break its customer base up into quintiles based on their profitability. The top 20%, the angels, are to be developed; the middle 60% held; and the bottom 20%, the devils, dropped. He has another view that is interesting as well: a company should not view itself as a portfolio of products, but as a portfolio of customers. Now you’re probably thinking this is not new and it isn’t. Applied has successfully executed on this strategy for decades. What is new is that it is codified at the university level and it is a nicely packaged set of ideas.
You can charge for anything.
Always charge for anything that adds value. Even, if you find yourself with a customer who finds value in excessive negotiation, CHARGE THEM. They may want to exercise their legal department, but why should you run up legal fees at the expense of other customers who are less of a headache to keep happy. It will also force them to reevaluate the cost-benefit ratio of excessive negotiation. Few legal departments see their contracts as a feature-benefit. But it is! Whenever the customer wants something custom it is normally charged for. So why not charge extra for a custom contract? They pay for it anyway, because companies with excessive contracts/negotiation invariably pay more for their tools. If they really want your product because you have differentiated it they will buy anyway or go somewhere else to find an easier victim to play with. If you haven’t differentiated your product get down to the basics: price and delivery – and get on with it efficiently.
You can charge for anything.
Always charge for anything that adds value. Even, if you find yourself with a customer who finds value in excessive negotiation, CHARGE THEM. They may want to exercise their legal department, but why should you run up legal fees at the expense of other customers who are less of a headache to keep happy. It will also force them to reevaluate the cost-benefit ratio of excessive negotiation. Few legal departments see their contracts as a feature-benefit. But it is! Whenever the customer wants something custom it is normally charged for. So why not charge extra for a custom contract? They pay for it anyway, because companies with excessive contracts/negotiation invariably pay more for their tools. If they really want your product because you have differentiated it they will buy anyway or go somewhere else to find an easier victim to play with. If you haven’t differentiated your product get down to the basics: price and delivery – and get on with it efficiently.
Slainte
Gordon
Monday, January 07, 2008
A trap we sometimes fall into as Entreprenurs
A trap we sometimes fall into as Entrepreneurs:
I was thinking this morning about all the things I "Know" about running a business and actually what I am using at present to build this company. As you build a company you go through different phases, you are active in different tasks, different skill sets are brought into use, and the edge comes off some of the other skills you have. I have found myself buried in the tactics off getting this project off the ground, financial modelling, forecasting revenue, design of factory layouts, etc ,etc, supply chain management, but you don't work on the high level planning and strategy as much as you should be, you miss the sutler nuances in communication, it is only afterwards that you pick out gems from the conversation, and you remember a skill that you hand once honed to world class, but has dulled slightly, as it has been stuffed in the back of the cabinet due to other skills being the focus. This is something that we need to stop happening, if we want to be on the top off our game once we get through the funding stage, you will need to quickly switch from financier to a world class business operator.
I need to get all these skills and knowledge brought into the conscious mind to help in the "Now" so they are ready for the "future". I remember once saying to a tutor why do I need to learn all this stuff about organic chemistry, I won't use it when I start to work, he replied that you will need it one of these days, I did very early on in my career in the semicon business, a lot, not so much the detail, but the process of how things reacted and there outcomes. The same applies to what we have already learned and experienced to date and and what we will learn in the future. I have started to list the gems of knowledge that I have gleaned over the last 23 or so years, in functions, S&M, Operations, Finance and HR, also communication, presentation, and the other soft skills. This has started to trigger my memory and has already shown me areas of how I can work better and smarter, utilizing what I have gleaned in the past.
Companies do this from time to time, it is called the fresh blood injection, as an organization becomes stale and they are grasping at how to move forward, there was this snap of genius, lets bring in some fresh blood to get us performing better, they miss the route cause of why there staff or themselves has gone stale and are in danger of getting on this treadmill of fresh blood every three years. I believe it is better to get the team to be fresh and engaged and develop a culture that will make this happen.
Slainte
Gordon
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