Archive for April, 2012

Tech-tock, tech-tock…

Posted: April 29, 2012 by Chuck Matthews in Operations, People, Planning, Startup

“This time, like all times, is a very good one, if we but know what to do with it.”  Ralph Waldo Emerson

In 1998, I sent my first text message using my mobile phone.  To paraphrase a popular mobile carrier television commercial, “That is so 14 years ago.”  When I traveled abroad in 1987, in order to make a long distance call back to the U.S., it was not uncommon to have to wait for an overseas operator to place my call and ring me back.  Fast forward to 2012, I can be just about anywhere in the world and make calls, send text messages, email, access the Internet and more all on my mobile phone, virtually instantaneously at a fraction of the cost of that call in 1987.

The excitement of sending a text message on a mobile phone has been replaced with a veritable alphabet soup of digital world acronyms that have permanently changed how we do business. E-Business, M-Commerce, CRM, RFID, Smart Grid, Cloud Computing, EDI, Extranets, Product Visualization, the Digital Economy, Web 2.0, 3.0, 4.0 (and counting).  That list prompts a very simple question that I posed back in 1998, “Is your small business equipped with technology tools or toys”?  In 2012, we struggle to understand a dizzying array of new technology and applications, entrepreneurs must still address to follow-on questions: How can you use technology to your competitive advantage? When is it better to be “high tech” versus “high touch”?

Tech Tools Versus Tech Toys

 If you own and operate a business, you cannot ignore the fast change and high impact of technology in the workplace.  It used to be sufficient to review new technologies once a year or even every few year.  More recently, however, the pace of change emanating from the “high tech” sector seems to be quickening with new products, applications, and innovative uses popping up everywhere all the time.  For example, Google recently announced it is developing what it calls Google Glasses – smart glasses that push the envelope of the computer user interface with audio, visual/heads-up display, and connectivity to voice, mail, data and more.  While it still remains to be seen if this will lead to the next entrepreneurial tech tool, as a small business owner, you still need to ask and answer two basic questions: How can I best use information technology to gain competitive advantage? What steps do I need to take?

Gaining a Competitive Advantage

Simply put, the best, and some might add the only, reason to embrace technology in your small business is its ability to make your business more competitive. In general, technology needs to be part of your on-going strategic planning process.  It is always in order to explore the possibilities, but do so within the context of mini technology/strategy audit, so to speak.  Having an audit trail of past, current, and current technology applications gives you an advantage knowing where you have been, are, and want to go. One thing to keep in mind, technology will not fix a bad manual system.  Address the problem first and then introduce technology to increase effectiveness.  On the other hand, technology can often provide a solution to a problem that was elusive using a manual system.  In this case, technology can trump a manual system.  For example, one area where technology can greatly enhance manual systems is use of restocking, order entry, and GPS systems to track routing and delivery processes from suppliers.

Essentially, match needs with current and potential technologies.  Identify areas in which you may use technology to build resources and capabilities that will make your business more efficient and competitive. For example, if you attend trade shows, either business-to-business or business-to-consumer, and on-site sales can be facilitated by taking credit cards, you need to check out the latest mobile phone credit card processing technology such as Square and others.

High Tech Versus High Touch

 As alluring as technology can be, it is not always the answer.  If there is one thing that stands at the forefront of Management education today, it is the delineation of the limits of technology counterbalanced with a limitless capacity for human interaction.  That is just a fancy way of saying we are human.  As consumers, we can all relate to the moment where we don’t want another phone tree that takes us nowhere, promises of 24/7 Internet access that ends up limiting our access, or a seemingly endless need to provide unnecessary personal information for the so-called convenience of doing business online.  No to mention the painful process of reading one more 64 page, 8 pt font, single spaced “terms of agreement” form which prompts a confirmation that it has been read, when we are lucky to have even opened it, let along absorbed the mind numbing legalese densely packed into the pop-up box.

Bottom line, define your technology needs; develop a budget; integrate hardware and software solutions; track the impact on resources and cash flows; evaluate, review and make the necessary changes.  More importantly, plan, assess, and review the impact and customer response.  When it comes to keeping customers, sometimes, high touch trumps high tech.

You can find more on our web site at https://cincyentre.wordpress.com.  Till next time, all the best for continued entrepreneurial success!

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Startup Owner’s Manual

Posted: April 22, 2012 by Eileen Weisenbach Keller in Planning, Startup

The Startup – that temporary organization in search of a business model that will allow an enterprise to duplicate and grow – draws a lot of attention. Have you ever felt left out by the Startup discussion, but unable to put your finger on exactly why that is?  Recently, I spent time at an international conference for inventors and innovators. Wow! What a group to hang out with for a week. Smart imaginative people, young and old, successful serial entrepreneurs and naïve students with fledgling dreams all sharing thoughts on how to generate, nurture and propel ideas from their very conception through commercial success.

During my time with these exhilarating individuals, I had the opportunity to hear from Steve Blank, author of The Startup Owner’s Manual. Steve, a serial entrepreneur with successes in tech start-ups and failures that created real craters (his words not mine). Steve has used his combined experience and education to write articles and books and teach for top universities about entrepreneurship.

Conversation with Steve and others illuminated for me why this Startup discussion sometimes leaves me slightly uncomfortable. Too often, it seems that the conversation about a Startup is not about a Startup at all, it’s really about an idea. You see, the two are not one and the same; neither is a bad thing, but confusing the two generally leads to mistakes. One big difference between the two, a start up is impossible without an idea, but the reverse is not true.

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One of the operating approaches to leadership embraced sometimes by entrepreneurs is Vance Packard’s definition  –  “Leadership appears to be the art of getting others to want to do something you are convinced should be done.”  It is a straightforward, inspirational definition that brings true clarity about leadership to entrepreneurs and their employees.   It says that people will respond and support leaders if they believe the leader is convicted about the importance of the business idea, the work or the project.   This definition encourages entrepreneurs to invest the time and effort in gaining a commitment from their constituencies about the initiative or business purpose.   If you focus as much energy on engaging your employees and vendors as you do in passionately developing the business idea, your efforts will be rewarded.

“Want To” Versus “Have To”

This definition proposes many important concepts for an entrepreneur such as “to want” and “convinced.”  The final product/service delivered to customers is very different if employees “want to” versus “have to.”  My entrepreneurship classes are always more exciting and meaningful if the students “want to” attend class versus “having to” attend class on a Monday morning at 8:00 am.  The “want to” occurs because the “owner” has committed the effort to convincing each employee how important the product/service is to/for the customer.  How did the entrepreneur “convince” them?   This is the “art” in the leader’s role.

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The Art and Science of the Pitch

Posted: April 8, 2012 by Chuck Matthews in Marketing, Money, Planning, Startup

With the new baseball season now officially underway, this column could be about hurling 90 mile per hour plus fast balls or change-ups at unsuspecting batters.  Actually, it is about entrepreneurs pitching ideas to investors, but interestingly the two share similarities.  Many of you have seen the popular television shows such as “Shark Tank” that feature would be entrepreneurs “pitching” their ideas to potential investors,  who would like nothing better than to take a swing at the idea and “hit a home run” with it to make money.  While the television shows are mostly entertainment, it does raise a serious question about how to make a real pitch to a potential investor.

What does it take to put together a killer pitch that can convey your idea while at the same time entice a potential investor?  How do you balance the need to share your idea with others, while at the same time, keeping others from taking it to market first?

1. Tell them who you are. Know your audience and something about them ahead of time if possible. Don’t outline your life’s journey here.  When appropriate, include a personal anecdote that brought you where you are today but, in general, keep it simple and focus their attention on the next item.

2. Clearly define the Pain/Problem/Opportunity nexus.  This is the pitch trifecta – keep it clear, simple, and direct.  Try to avoid what I like to call “MBA hyperbole” such as “the market is enormous” or “sales are limitless.”

3.  Solution.  This is the heart and soul of your pitch.  It is how your venture addresses the unserved and/or underserved market experiencing the “pain” outlined above.  You may want to save some of the details for later in the pitch, but basically this is your moment to put the spotlight on your value proposition and get the listener nodding in agreement that this makes sense.

4. Inside the “Black Box.”  This is often described as the “secret sauce,” or magic behind your product or service. Avoid going too techno here unless of course you are pitching to fellow scientists/wizards – you don’t need to open up the black box, only ensure that it works or what will take to make it work.  Often a picture or diagram here is worth a thousand words.

5. Business and Sales model.  The $64,000 question: “Will this make money?”  This needs to be tied to your business plan assumptions, financials, etc., but overall you need to outline how you plan to sell your goods and/or services and who is the customer/buyer. Remember, buyers and users may be different, but be clear that you have a sales plan.

6.  Competition.  Never say you don’t have any competition – you do.  Substitute products/services and competition for your customers earned income is everywhere.   I like a one page pictorial or a simple verbal comparison outlining how you compete on value, offerings, features,  and more rather than just listing who your competitors are.

7.  Management team.  The key question: Do you have the right team? If not, what are you doing to get it.  Many potential funders once interested, look past the idea and prefer to invest in the person first.

8.  Financial projections and key metrics.  This should be tied to the business plan time line and milestones and should clearly outline the sources and uses of funds and how you will measure progress.

9.  Timeline and milestones.  Here you want to convey that you have a sense of knowing where you are, where you are going, and how you plan to get there.

10. Current status, accomplishments to date, future plans.  Your time to shine with a strong finish.
This brings us to the question of confidentiality.  While a non-disclosure agreement (NDA) affords some protection, not everyone is willing or able to sign one.  As noted above, you don’t need to open up the “black box,” only ensure that it works or what will take to make it.  The actual “secret sauce” can be addressed if there is money on the table from investors and due diligence is under way.

Keep in mind the need to succeed eventually outweighs the need for total secrecy.

  • Focus.  Edison did not invent the first electric bulb as many give him credit, but rather he invented the first commercially practical incandescent light.
  • Feedback. Better to get on with it and make something happen than to sit on it and let others get to the finish line first.  Inevitably, if it is a good idea, it is going to be imitated and there will be competitors (in this case, imitation is the sincerest form of flattery).
  • The “Skyline Rule.” (Okay, so this only works where Skyline is available. Alternative, “Coca-Cola Rule.”)  At some point, you are going to have to put it out there for public assessment, acceptance, or rejection.  The minute the Lambrinides Brothers conjured up their now famous Cincinnati chili concoctions consisting of Coneys, Cheese Coneys, Three-ways, Four-ways, Five-ways, etc., it was out there for everyone to see.  Of course, the “secret sauce” in this case really is “secret sauce” and that has been a “proprietary secret” from day one.  There have been many imitations, but no duplicates.

 

You can find more on our web site at https://cincyentre.wordpress.com.  Till next time, all the best for continued entrepreneurial success!

Indico Bellum

Posted: April 1, 2012 by Bill Cunningham in People, Planning, Startup

Indico Bellum – a Latin phrase for “I declare war” used by a Chicago firm that helps make clients victorious in their business battlefields. The two largest booksellers on the web list over 1,000 books on “business and war” in their search engines. Military analogies inundate the business world – and many of them are incredibly useful in startups.

While our armed forces face life and death every day, the entrepreneur, in comparison, plays for much lower stakes. Still, the strategies used in military operations enable startups to achieve success.

In “Semper Fi : Business Leadership the Marine Corps Way,” Dan Carrison and Rod Walsh describe the importance of the recruiting process in the Marines. Every Marine worth his or her salt takes a tour of duty to recruit the best talent for the corps. The reasoning follows: if you send your “A” team out to recruit, you will get more “A” team players. Guy Kawasaki described the “Silicon Valley Death Spiral” where “B” players hire “C” players and so on until you end up with all of the “Z” players.

Who do you send to do your recruiting? Do you leave it to human resources or and employment agency? Do you or your front line employees go out and sell them on your vision?

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