Lessons I Learned Today 6/12/09 – Up and Down the Elevator Speech

This is a digest and recap of highlights, quotes, and comments from articles and discussions posted on this date on the Applied Entrepreneurship, LinkedIn group site.

 

*Running Your Own Shop by Dr. Earl R. Smith II

“I want to run my own shop – be my own boss – be in command of my own destiny. I don’t want to report to anybody – be beholden to anybody – or controlled by anybody. As captain of my own ship, I can make the decisions – take the actions – and suffer the consequences without asking permission.”

“No one runs their own shop – no one is their own boss – no one is control of their own destiny. Business is a collaborative team sport – the team that works most closely and effectively together regularly buries the lone riders and dysfunctional gaggles.”

“Business is a team sport that requires all team members to have a strong inclination to collaborate, communicate, learn, teach, evolve and contribute.”

 

*Social Strategy for Exciting (and Boring) Brands by Josh Bernoff

“There are two kinds of brands in the world. There are brands people like to talk about, and brands they don’t.”

“The key with boring brands is to get people talking about their problems, since they won’t talk about your brand. In advertising, you can force messages on people watching other things. In a social context, this fails miserably.”

“Applications that talk about customers problems create “borrowed relevance,” since you generate talk they care about, then make yourself a part of it. American Express (credit cards are boring, face it) created the Members’ Project, a contest to choose deserving charities, since it realized that charity would generate more passion than credit cards. And in perhaps the most dramatic example, Procter & Gamble knew girls wouldn’t talk about tampons, but would talk about music, cliques, and school, so it created beinggirl.com as a vehicle to deliver (very quietly) the occasional feminine care products message.”

“Regardless of whether your brand is talkable or boring, as you launch these social applications, you’ll generate something very valuable – people who care about your brand, or at least the problems it solves.”

“If your brand is talkable, your social efforts will surface the brand enthusiasts who have the most influence. If it’s boring, your social applications will help you find your rare but valuable brand enthusiasts, or even generate a few. Pay attention to these people. Because as advertising clutter rises and word of mouth becomes more important, they’re about to become some of your most important corporate assets.”

 

*Social Networking Explodes and The Law Will Follow by Eric Sinrod

“Social networking is not a passing fancy; indeed, the time spent by Americans on social networking sites is increasing dramatically.  And, of course, where people go, the law will follow.”

“According to a recent report from Nielsen Online, the time that Americans spend on social networking sites is up a staggering 83% from just one year ago.”

“Unfortunately, it is a fact of life that where people congregate, some disputes ultimately emerge.  Social networking interactions therefore will not be free of friction and conflict.”

“As social networking increases, we probably will see a rise in lawsuits related to social networking communications and exchanges.”

“Inevitably, we will see lawsuits where people allege that they have been defamed by false information about them posted on social networking pages.  There also are bound to be lawsuits concerning alleged invasion of privacy having to do with the posting of revealing photos and videos without consent. “

“In addition, lawsuits alleging the improper revelation of trade secrets and intellectual property on social networking pages could come out of the woodwork.  And, we very well may see cases in which there are allegations of harassment, intimidation and hate speech on social networking pages.”

 

*Just Verb It? A Legal Perspective on Using Brands As Verbs by Steve Baird

There is a growing interest and, quite frankly, a dogged persistence among branding professionals to select brand names that have the ability and potential to be “verbed.”

“The International Trademark Association offers these guidelines on proper trademark use to trademark owners and those in the media: ‘NEVER use a trademark as a verb. Trademarks are products or services, never actions.’ INTA provides this example: ‘You are NOT rollerblading, but in-line skating with Rollerblade in-line skates.’ It also offers this test: ‘A good test for correct usage of a trademark is to remove the trademark from the sentence and see if the sentence (generic) still makes sense. If it does not then you are potentially using the mark as the descriptive term or as a verb and not as an adjective followed by a noun as you should.’ Why? To prevent brand names and trademarks from becoming generic names and part of the public domain for anyone to freely use, even competitors.”

“The challenge for trademark types and trademark owners is that many marketers are not listening to these cautious admonitions. As a consequence, trademark types will need to be increasingly more and more creative in their approach to mitigate the risk of the brand not only going to marketing heaven, but dying an sudden death immediately thereafter.”

 

*Understanding Equity Capital

“Equity capital or financing is money raised by a business in exchange for a share of ownership in the company. Ownership is represented by owning shares of stock outright or having the right to convert other financial instruments into stock of that private company. Two key sources of equity capital for new and emerging businesses are angel investors and venture capital firms.”

“Debt Capital: Debt capital is represented by funds borrowed by a business that must be repaid over a period of time, usually with interest. Debt financing can be either short-term, with full repayment due in less than one year, or long-term, with repayment due over a period greater than one year. The lender does not gain an ownership interest in the business and debt obligations are typically limited to repaying the loan with interest. Loans are often secured by some or all of the assets of the company.”

“Equity Capital: Equity capital is represented by funds that are raised by a business, in exchange for a share of ownership in the company. Equity financing allows a business to obtain funds without incurring debt, or without having to repay a specific amount of money at a particular time.”

“”Business “angels” are high net worth individual investors who seek high returns through private investments in start-up companies. They seek companies with high growth potentials, strong management teams, and solid business plans to aid the angels in assessing the company’s value. They often co-invest with trusted friends and business associates. In these situations, there is usually one influential lead investor (“archangel”) whose judgment is trusted by the rest of the group of angels.”

“Venture capital provides businesses a financial cushion. However, equity providers have the last call against the company’s assets. In view of this lower priority and the usual lack of a current pay requirement, equity providers require a higher rate of return/return on investment (ROI) than lenders receive.”

 

*Angel Investing – The ‘Elevator Speech’ Antidote by Dr. Earl R. Smith II

“Listening to the delivery of an elevator speech is the single most distracting event in an investor’s journey. It is to that point in time – the equivalent of ‘love at first sight’ – that most of the subsequent failures can be traced. An elevator speech is an advertising undertaking. It is an attempt to draw in a potential investor and get them interested in providing funding for a venture. It the starkest terms, it is a money trap.”

“Investors have lost more money because they failed to critically evaluate and aggressively test key underlying assumptions than for any other reason. This single misstep is by far the biggest ‘deal killer’ in the process.”

In this article, the author recommends a series of questions to ask an investor when reviewing a potential investment.

 

*Financial Strategies – Some Basic Rules by Dr. Earl R. Smith II

“The CEOs principal contribution to the process is to make sure that the correct financing strategies are in place and well focused. As CEO, you should make sure that the strategies deployed meet, at minimum, five basic criteria. First, are the financings that are being pursued adequate to the needs of the company? Second, are the right financial instruments being used? Third, are the right sources being approached? Fourth, how does each individual financing strategy fit into the overall capital structure of the company? And fifth, can the company afford the financing … is it really a good idea?”

“Don’t fund research by selling equity in your company. If you are spending money to sell what you ‘hope to have,’ your potential customers will generally treat you as a ‘might become.’ If part of the pressure on your financial resources is because you are spending unwisely, financing an error in judgment is a very costly undertaking.”

“Venture Capitalists are, for the most part, highly professional people who are having to search harder and harder for good investment opportunities. While you are chasing them and getting turned down, they are spending significant portions of their days looking for good investment opportunities. So, as hungry as they are to invest, what should it tell you if three or four of them have turned you down? Just exactly what part of ‘no’ are you having trouble understanding?”

“Make sure that you are turning over every stone in the pasture. Don’t let your ego or limited understanding of the options limit your company. Get in touch with experts in the field and really pick their brains. Make sure that you are looking down every alley and then pick the most efficient of the options.”

Here are five options to start with:

• Friends, Family and Fools
• SBIR, STTR & Other Grants
• Universities and Research Centers
• Your Customers
• Strategic Partners

 

*Blocking Social Networking Sites in the Workplace by Eric Sinrod

“An analysis of data submitted by thousands of Barracuda Web Filter customers demonstrates that as many as 50.2% of businesses using these filters are setting up barriers to MySpace and/or Facebook.”

“According to the Barracuda survey, the chief concern is fear of viruses or spyware (cited by 70% of respondents), with potential drain on employee productivity as the second greatest worry (cited by 52% of respondents).”

“Employers raise bandwidth issues (cited by 36% of respondents) and potential liability issues (cited by 28% of respondents) as additional reasons to put restrictions on Internet access by employees.”

“The challenge for employers going forward is to continue to protect themselves from intrusions such as viruses and spyware, and to keep employee productivity up and potential liability down, all while becoming positioned to utilize the most robust Internet communication tools possible.”

 

*The Lowdown on ARC Loans by Mark Deo

“The Small Business Administration recently released “lender guidelines” for America’s Recovery Capital (ARC) Loan Program. ARC loans will be up to $35,000 and available to established, viable, for-profit small businesses suffering “immediate financial hardship” in order to provide some temporary financial relief so they can keep their doors open and put their cash flow back on track. It is intended for businesses that need short-term help to make their principal and interest payments on existing qualifying debt (including conventional loans, credit card obligations, notes owed to suppliers and utilities).”

“The SBA defines a viable business as “a for-profit business with evidence of profitability or positive cash flow in at least one of the past two years.” Businesses must provide three years of financial statements, cash flow projections based on reasonable growth over two years and demonstrated ability to meet current and future debt obligations, including future repayment of the ARC loan. Also, the borrower must certify that they are currently no more than 60 days past due on any loan paid with an ARC loan and they must have an acceptable business credit score as determined by SBA.”

“The SBA is requiring businesses to show evidence of a “change in the financial condition” such as declining sales, frozen credit lines, difficulty meeting payroll, paying rent or difficulty making loan payments.”

“The loans are 100 percent guaranteed by the SBA and made by existing SBA 7(a) lenders. They have no SBA or lender fees associated with them (unless the lender must secure collateral as part of the loan). The disbursement period (up to six months) is followed by a 12- month deferral period with no repayment of principal. After the deferral period, the borrower pays back only the ARC loan principal over a five-year period. ARC loans are available through SBA-approved lenders as long as funding is available or through Sept. 30, 2010.”

 

What I Think

I think one of the common threads among the articles posted on this date is the force of opposites. In these difficult economic times, angels and venture capitalists are looking hard for worthy causes in which to invest. Likewise, worthy businesses, rebuffed by the banks and other traditional sources of capital, are now searching for an angel or venture capital fund, which is willing to invest in them.

The same sort of dance is going on between social media and businesses. New social media applications are being pumped out by the minute and users are lining up to try them. Businesses are searching for new ways to market themselves and strengthen their brand, but some fear abuse will be the result of employing social medial campaigns, so some many are consequently deploying blocking strategies against the very thing they may be looking for.

The government is attempting to find strategies to stimulate the economy, using programs like the ARC loan program. Troubled businesses, the target audience,  are, however, having a difficult time finding a bank, which seems to even have information on the program let alone a way to make such a loan.

Something is clearly missing. A year or two ago, there seemed to be an attraction factor linking such natural partnerships. What seems to be gone or at least weakened is the glue. Replacing it is the fear factor. Even when natural attractants get in range of each other, instead of being drawn together, they almost seem afraid to get too close.

Fear is natural, given the reports of a horrible economy. Part of the problem, is that the fear feeds upon itself and rumors of doom become a self-fulfilling prophecy. Fear stands between forces which are naturally attracted to each other, preventing them from uniting. Since there is not much sense giving an elevator speech which mimics this fear, let’s all try a little courage and see if we can let those natural attractants already in place, simply slide back toward each other.

 

If you enjoyed my impression of these articles, why don’t you read them for yourself and see what you and I missed or hit? Join the Applied Entrepreneurship group on LinkedIn. Membership is free and I try to post about ten articles a day there. We have some great discussions going and if you are an entrepreneur, we hope you will join us.

Lessons I Learned Today 6/10/09 – Pulling the Angel’s Teeth

This is a digest and recap of highlights, quotes, and comments from articles and discussions posted on this date on the Applied Entrepreneurship, LinkedIn group site.

 

*Tough Terms, Tougher Entrepreneurs by Roslind Resnick

“Even in good times, it’s never easy to get an investor to hand over a check. But, in times like these, persuading an angel investor to risk even $50,000 on a startup can be like pulling teeth.”

“Entrepreneurs are going to have to seek out new types of financing structures if they want to get their ventures off the ground.”

Trends:

• We have seen an increase in insiders loaning funds to their firms to bridge the gap to better times and also offering investment opportunities to existing investors through rights offerings.
• Sometimes your best financing partner is right in front of your nose.

 

*VC Firms Give Advice on Getting Startup Funding by Ken Sweet

“Small-business owners looking for funding should concentrate on networking and creating pitches that “wow” prospective investors, some prominent venture capitalists said.”

“VC-firm representatives said that while it remains a difficult economic environment for the general economy as well as technology-based companies, all venture capital firms said they are still looking to finance good ideas.”

“All four venture firms at a forum in New York said that networking is an important first step in presenting an idea. Very rarely will venture capitalists take cold calls or emailed proposals.”

“Referrals are extremely important. If an entrepreneur cannot find us through our own ecosystem, they probably aren’t worth talking to.”

“Once an entrepreneur has established relationships with the venture capital firms that invest in their sector or industries, the next step fund managers said is a business proposal.”

“If you cannot be clear and succinct about what value your idea brings, you need to go back to the drawing board,”

“It’s less about the idea and more about the person behind it.”

 

*Virtual Storefronts: Can You Go Home Again? by Roslind Resnick

“Lately, there’s been a lot of talk about mom-and-pop retailers pulling the plug on their physical storefronts and running their businesses from home.”

“It’s easy to see the appeal: No more rent, no more utilities, no more sales staff, no more fines from the city for putting out your trash on the wrong day.”

“The downside: No more customers.”

“When I started my consulting firm, I opened a storefront in Lower Manhattan offering walk-in consulting services for small business owners and entrepreneurs. While the storefront attracted hundreds of customers and rang up lots of sales, we were never able to break even after paying the landlord, the light bill and our eight-person staff.”

“Two years later, I shut down the storefront and took the firm virtual, hoping that optimizing our site for the search engines would bring in enough business to keep us afloat. My gamble paid off–but only because I supplemented our online marketing strategy with a heavy dose of networking, writing and public speaking.

“So take it from me: Before you close your doors and kiss your storefront goodbye, put a plan in place that will keep customers coming in the door. Place a fishbowl at your checkout counter to collect business cards, send out an e-mail newsletter once a month, do your homework on search engine marketing and ask your kids to clue you in about Facebook and Twitter.”

 

* Kiva Brings Microlending Home To U.S. Entrepreneurs In Need by Leena Rao

“Kiva.org, one of the web’s most interesting innovators in the micro-lending space, is hoping to come to the aid of U.S. entrepreneurs and small businesses by launching a pilot expansion that would allow individuals anywhere to make small loans to low-income U.S. entrepreneurs through Kiva’s platform.”

“Kiva is a peer-to-peer lending site that facilitates micropayment loans between citizen lenders and extremely low-income entrepreneurs in developing countries. Through Kiva’s platform, anyone can loan $25 or more to support an entrepreneur and the specific progress of the loan can be tracked from initial funding to repayment. Upon receiving repayment, lenders can withdraw their funds from Kiva or lend again to another entrepreneur, thereby continuing the lending cycle.”

“Since the microfinance platform’s birth in 2005, over $75 million has been loaned through Kiva.org to support more than 180,000 individuals from 44 developing countries.”

 

*Consulting Business Strategy: It Takes More Than Wishful Thinking by Beverley Hamilton

“Some Independent Business Consultants (IBC) whether they be in marketing, sales, IT or HR, assume that just by talking to people, just by having a website or just by having a glossy brochure they will automatically get clients. And it’s this assumption that will ultimately cause frustration, stress and despair as their consultancy flounders due to a lack of clients.”

Your consultancy is a business and a business requires a workable, systemised infrastructure to make it truly successful. The development and sustainability of a profitable consultancy requires thought, planning, trial, review and thought – in all areas of the business. Those businesses that are truly successful have numerous common factors, two of which are:

1. Clarity of who their ideal clients are

2. Sustainable client acquisition systems

Random, ad hoc and unspecific activity may give you clients in the short term but in the long run it will not.

 

*How to Give Your Consulting Clients What They Really Need by Beverley Hamilton

“Just because you know your clients need what you have to offer, doesn’t mean that they know they need what you have to offer. There are a number of reasons for this. The difference between need and want can be minimal but it can also be a chasm.”

You’ve made the break from the constraints of corporate life and are excited to be establishing your new business as a consultant. As an Independent Business Consultant (IBC) whether that be in marketing, HR, IT or sales, you know that what you have to offer is of high value and can create tremendous benefits for your current and potential clients.

You know that what you offer is what your clients need because you have researched your market, listened to clients and you fully understand the problems your clients have. You know that your services can provide the ideal solution.

So what’s wrong with that?

Just because you know your clients need what you have to offer, doesn’t mean that they know they need what you have to offer.

There are a number of reasons for this;

1. They are so caught up in their own world dealing with their problems, which are so immediate, that sometimes what they see as their problem is not their real problem.

2. Some clients already believe they know what the problem is and have a fixed idea of what they see as the right solution.

3. Some clients know what they want but they don’t know or won’t acknowledge what they need

The difference between need and want can be minimal but it can also be a chasm.

 

* How to Start a Consulting Business

“What separates a good consultant from a bad consultant is a passion and drive for excellence. And–oh yes–a good consultant should be knowledgeable about the subject he or she is consulting in. That does make a difference.”

“In this day and age, anyone can be a consultant. All you need to discover is what your particular gift is.”

Things to Consider Before You Become a Consultant

• What certifications and special licensing will I need?
• Am I qualified to become a consultant?
• Am I organized enough to become a consultant?
• Do I like to network?
• Have I set long-term and short-term goals?

 

This is a very nice and complete article for anyone interested in becoming a consultant.

 

*Mistakes To Avoid When Marketing Your Consulting Business by Michael McLaughlin

Many competent consultants risk their own success, and their bank balances, by driving straight into the same old marketing potholes again and again. Take action to avoid these ten common marketing traps:

• The curse of experience.
• Go it alone.
• Overestimate clients’ interest in you.
• Believe your services are top-notch just as they are.
• Sell too hard.
• Dabble in marketing.
• Focus on your “accounts,” not your clients.
• Take the one-size-fits-all approach.
• Impatience.
• Dread marketing.

 

*Survey Says: Entrepreneurs Nix Consultants by Nina Kaufman

“A recent survey conducted by BizBuySell, the largest online business-for-sale marketplace, found that nearly 75% of business owners doubted the effectiveness of hiring consultants to improve business reputation, preferring instead to do their own marketing without external assistance.  Of the survey sample, 68% of respondents said they had never engaged a consultant to help improve their business. Of those who had engaged consultants, 45% were moderately satisfied with the results. 27% felt the consultant did a great job for the business, while 24% regretted the decision to hire a consultant, stating it was a waste of time and money.”

“Sometimes, it’s worth working with more expensive consultants, because they may be more likely to have the know-how to help you.  Find out if they’re on the speaking circuit.  See if they’ll divulge how much money they are making/how many clients they have each year from their consulting practices and products.  See who recommends them and in whose circles they travel.  That’ll give you a definite sense of whether they are successful at what they do.”

 

*The Secret To Becoming A Great Entrepreneur by Laurie Hayes

“You may have an exceptional product that can improve the lives of many.”

“You may provide a service that is second to none.”

“BUT …if you don’t have exceptional sales skills, you will lose out on many an opportunity to demonstrate or provide value to anyone.”

“The most important, yet least developed business skill in many small and home-based business owners is selling. Lack of effective sales skills is a major contributor to the demise of a business.”

“Although you are an entrepreneur, you are also a sales person. You are in the business of selling a product or service to others.”

 

What I Think

I think the common thread in many of the articles posted on this date is wishful thinking. Angels and venture capitalists say they’re looking for the “wow” factor in business opportunities they review for potential investment. In nearly the same breath, they also say entrepreneurs need to find new types of financing structure.

Likewise, some bricks and mortar businesses are trying to stay afloat in rough economic waters by closing their physical location in favor of a low cost or no cost virtual presence in the market place. As one of the articles suggests, sometimes closing off your physical location will prove a roadblock to your customers finding you in sufficient numbers to keep your business alive. It is wishful thinking to believe that cutting costs to the bone can be the sole solution in an economic downturn. This may prove the reality is that you’re cutting the throat of your own business.

The wishful thinking theme also runs through the consultant’s dilemma articles. Many a consultant has tried to build a client base by posting a beautiful Web site and sending out tons of glossy brochures. This is not an alternative to hitting the streets or entering into the business with a book of business.

In consulting work, there is always a pipeline, which has to be full. If you start with no clients, cash flow can kill you before the cash matches the expenses, even if lots of business is coming in the front end of the pipe. By the time new business reaches the profit end of the pipe, quite a bit of time and expense will likely have already accumulated. If borrowing money has become a pattern for keeping the business alive while you wait for the pipeline to fill, or worse yet use/abuse of credit cards, the debt service on the loans and credit cards alone can put a profitable bottom line out of reach.

Clearly, to be a successful consultant, one should have demonstrable skill in one or more areas needed by clients who have an ability to pay for this expertise. Ability to pay, however, is not enough. Some markets are simply tougher than others. Some industries and markets are very much accustomed to working with all sorts of consultants. In other markets, however, you will find just the opposite.

The articles posted on this date indicate that being a proficient networker is an essential skill for consultants and those seeking funding from angels and venture capitalists. Both of the groups, seeking clients and financing, respectively, have been known to overestimate the interest of those they seek, and underestimate the amount of research and other groundwork necessary to bag their prize. Both consultants and entrepreneurs seeking financing must do the homework, be ready with answers for every question, be able to demonstrate the superiority of their cause above others with whom they compete, and communicate all this with clarity and brevity. Anything less will result in odds of success similar to those of one trying to pull an angel’s teeth. 

 

If you enjoyed my impression of these articles, why don’t you read them for yourself and see what you and I missed or hit? Join the Applied Entrepreneurship group on LinkedIn. Membership is free and I try to post about ten articles a day there. We have some great discussions going and if you are an entrepreneur, we hope you will join us.

Lessons I Learned Today 6/2/09 – Get the Puck out of Dodge

This is a digest and recap of highlights, quotes, and comments from articles and discussions posted on this date on the Applied Entrepreneurship, LinkedIn group site.

 

*Be Where The Puck’s Going To Be by Wil Schroter

“Hockey legend Wayne Gretzky, when asked how he was always on the puck before anyone else, pointed out that he was by no means the fastest skater on the ice. Instead he explained that he always just focused on skating toward where the puck was going to be. Gretzky knew that if he couldn’t be the fastest in the middle of the game, he would have to figure out how to stay ahead of the game”

“Instead of wasting your energy trying to keep up with the big boys, think like Wayne and get your edge by moving ahead of the game.” “Taking the shorter path allows you to get in early and pick up a lot of the low hanging fruit.” “You gain a potentially huge advantage from building early relationships in your space before your competition or your customers even know how big it could potentially”

“When you progress ahead of the existing market you get into a position where there few (if any) customers looking to buy. To avoid this, it’s helpful to pick a point ahead of the game that gives you a first-to-market advantage but still leaves you enough room to do business in the with current customers. Startup companies are often strapped for cash, so being too far ahead of the curve without any ability to generate revenue while everyone catches up can be disastrous.”

  

*Can you Afford Not to be an Entrepreneur by Wil Schroter

“The day you start your own company, the only person that will ever determine your income is you.  If you’re as good as you think you are, the sky’s the limit.”

“Consider the fact that Bill Gates, Michael Dell, and Steve Jobs were all around 30 when their companies went public.  Can you imagine how little they would have been paid (by comparison) if they had stayed in their salaried jobs?  Clearly their ages had nothing to do with their capability, and starting their own venture was the only way to prove that.”

“Even if you’re incredibly well paid in your current position, it doesn’t change the fact that you’re only one person.  You can only earn as much as your own time and contribution will afford you.  At some point, in order to get to the next level, you need the company working for you, not the other way around.”

“When you add up how much value you’re losing by taking a paycheck every week, you start to wonder what was keeping you from taking the plunge in the first place. In many ways, starting your own company is the only way to eliminate the risk of not being paid enough.”

 

*Cover the basics before you raise capital by Ed Sim

“If you want to raise capital from anyone, you need to have the basics covered.” “We all know that coming up with market sizing and revenue forecasts for a startup is as accurate as the weatherman predicting the weather.  That being said, VCs want to understand the logic behind the numbers as much as the numbers themselves.”

“Accumulating users and worrying about revenue years from now is yesterday’s news.  Unless you have tremendous scale when you show up at a VC’s door, then don’t bank on ad revenue as your only revenue source.”

“If you want to get funded, you better have a clear answer on how you will make money and either be implementing that model today or in the short-term.  What VCs are looking for is a revenue model today that makes sense – this can include premium subscription revenue, analytic revenue, and even lead generation revenue, but don’t pitch massive scale and advertising as your go-to revenue source 24 months from funding.  You will be shown the door quite quickly. “

 

*Get focused on getting customers by Emily Maltby

This article is about expert help for a furniture seller whose Web site needs to make a better first impression.

Your Web site should give customers what they expect. “”Like anything on the Internet, it takes less than three seconds to get a first impression.”

“The first page of the site should show them very quickly what you offer. Only after you get their attention will they be interested in reading about the details. Once you have a visitor, you want to keep them.”

Your Web site should clearly show why your business is unique. “”You have to sell them on the company before you sell them on any product,” Schefren says. “Put in information that is useful. I don’t care when you started the company, but I might care that you grew up in the furniture business. Now prove to me that you are the best vendor.”

“You have to sell them on the company before you sell them on any product,” Schefren says. “Put in information that is useful. I don’t care when you started the company, but I might care that you grew up in the furniture business. Now prove to me that you are the best vendor.”

“Consistency is the key in making users feel comfortable on a Web site.”

 

* Occam’s Razor and the current state of venture by Ed Sim

“Giving companies too much money too early can lead to a growth at all costs mentality, a lack of focus which means chasing too many opportunities at once, and a lax attitude on how to generate revenue.”

“From an entrepreneur’s perspective, Occam’s Razor can be applied to many different avenues. As we all know, a great entrepreneur must be able to effectively allocate his scarce resources of time and money to fulfill a market need.  The longer it takes to develop a product that the market wants means that it will cost more money and that it also opens the door for a competitor to step in before you.”

“Rather than spend cycles creating the perfect product with every bell and whistle, many nimble startups have focused on a more reductionist theory of releasing an often simpler product quickly with the idea of getting market feedback for the next iteration.”

“Occam’s Razor also applies to how an entrepreneur should operate his business.  Don’t pursue too many markets at once, focus on what is delivering the most return for the dollars invested, and hire people and scale your business when you absolutely have a repeatable revenue model.  I have been burned like many others by aggressively building out a sales team too early without a repeatable sales model.”

“The idea of less is more certainly applies to raising capital. With the rise of open source software and cloud computing, companies can now get started with less dollars and scale more cheaply and efficiently than before.  As all entrepreneurs know, raising less capital means retaining more ownership.”

“It is becoming increasingly clear that Occam’s Razor and the idea of less is more will continue to spread as the cost of technology continues to decrease, as entrepreneurs get even more efficient in building businesses, and as a non-existent IPO market and the factors above lead more VCs to create smaller more nimble funds to capitalize on the new market realities.”

 

What I Think

I think one common thread in the articles posted on this date is doing more with less. Call it anticipating where the puck will be if you are Wayne Gretzky, Occam’s Razor if you are a venture capitalist, or simply focusing on what the customer expects to see and is searching for if you are redesigning your Web site.

The same is true if you are an employee and not yet an entrepreneur. There are only so many hours in the day and so many days in a lifetime.  As Wil Schroter’s article points out, at some time the company has to work for you, rather than you working for the company. The sooner you get started on that, the sooner you can realize the efficiency of doing more with less.

Likewise, whether it be raising money from an investor or optimizing a Web site, don’t make your customer (i.e. investor or Web shopper) work for it. Distinguish yourself. Focus on what they expect to see or want to see. Everything else should spring from that. The fewer the words of explanation as to why investing in your company is better than other opportunities in which to invest, or the fewer the clicks to get to the goal of the Web search, the better the experience and the more likely you will be rewarded.

Before and during the “dot com” bust, VC’s threw money at companies, regardless of burn rate. Time didn’t seem to be much of a factor, in terms of anticipating when the ROI would arrive. Everything seemed to turn to gold. Some thought they saw signs of coming distress in the markets, but the stampede of others rushing to cash in seemed to drown out the sound of reason. Those days are gone for now.

Now it is all about not being able to raise money, and therefore finding business models, which don’t require it. Self-funding businesses are the current lean and mean revenue model, unless you are Twitter or other Web 2.0 models, which still cling to the theory that bigger must be better.

Can’t wait for Web 3.0 business models. Since we already have some glimpses of where the puck is not, maybe it is time to get the puck out of Dodge City and find those new revenue model opportunities before the competition does.

 

If you enjoyed my impression of these articles, why don’t you read them for yourself and see what you and I missed or hit? Join the Applied Entrepreneurship group on LinkedIn. Membership is free and I try to post about ten articles a day there. We have some great discussions going and if you are an entrepreneur, we hope you will join us.