Could Social Media Plug the BP Oil Leak? Can Social Media Clean It Up?

Following is a post from my SociaLies blog. This is the first one I have posted on both sites and may be the first of many.

Thus far, I have posted “unique” entries on the two blogs, but it seems to me this one enjoys a convergence of thought, which might be of interest to those only interested in entrepreneurship as well as to those primarily interested in social media forensics.

In this case, it seems to me that there is an opportunity for entrepreneurs and companies facing a crisis to use social media tools as part of their strategy to avert, resolve, or remediate disasters. In the case below, BP had contingency plans, but they have not worked. It seems they must now innovate. What better way to tap a much larger pool of gray matter, than posing the question, “how do we fix this problem?”

Here is the SociaLies post.
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Could Social Media Plug the BP Oil Leak?

Can Social Media Clean It Up?

The title of this post notwithstanding, I’m not asking if:

  1. dropping all the Facebook  ”friends,” LinkedIn “contacts,” and Twitter “followers” into the ocean directly above the horrific BP oil leak would plug it; nor
  2. if there might be a possibility that turning a year’s worth of online digital chatter into pieces of paper containing those messages would bury the leak so much as to stop it.

Granted, there are statistics indicating:

  • Facebook is said to currently have more than 400 million active users; 50% of whom, as active users, log on to Facebook in any given day; the average user has 130 friends; people spend over 500 billion minutes per month on Facebook; there are over 160 million objects that people interact with (pages, groups and events); the average user is connected to 60 pages, groups and events; the average user creates 70 pieces of content each month; and more than 25 billion pieces of content (web links, news stories, blog posts, notes, photo albums, etc.) shared each month.

These statistics come from Facebook.

  • LinkedIn may have over 65 million members in over 200 countries; have a new member join approximately every second, and and be able to boast that executives from all Fortune 500 companies are members.

These statistics come from LinkedIn

  • Twitter is said to have 105,779,710 registered users; new users signing up at the rate of 300,000 per day; and 180 million unique visitors coming to the site every month.

These statistics come from the Huffington Post

Some might say these statistics are inflated. That would certainly be a surprise wouldn’t it? The Tweet Twins, yes, you read that right, put these statistics, as of December, 2009 at:

  • LinkedIn users at 24 million unique U.S. visitors;
  • Facebook users at 23 million unique U.S. visitors; and
  • Twitter users 116 million unique U.S. visitors

Any way you slice it, these are some hefty numbers. What I’m wondering is, with all those folks using social media to connect, learn, and more, why does social media seem to have so little a role in solving the BP oil catastrophe?

I searched the BP Web site and failed to come up with an easy way to offer a suggestion to BP on how to fix the problem. I’ve heard on the news that everyone from actor Kevin Costner to some of our most brilliant scientists have tried to make suggestions, but have had a difficult time getting anyone at BP to listen to them. How could that be in a world with such robust social media platforms designed specifically to facilitate communication?

“”They’re clearly out of ideas, and there’s a whole world of people willing to do this free of charge,” said Dwayne Spradlin, CEO of InnoCentive Inc., which has created an online network of experts to solve problems.”

When I searched the BP Web site for information on the oil spill, I found very little, if anything, to allow one to post a suggestion. BP America has a Facebook pageand a presence on Twitter. The official Deepwater Horizon Response has a Web site. It states:

“A Unified Command has been established to manage response operations to the April 20, 2010 “Deepwater Horizon” incident. A Unified Command links the organizations responding to an incident and provides a forum for those organizations to make consensus decisions. This site is maintained by the Unified Command’s Joint Information Center (JIC), which provides the public with reliable, timely information about the response.”

Below that statement are the names of fifteen .gov sites one might initially think were intended to facilitate the process of transmitting one’s brilliant, problem solving ideas to the “proper authorities.” Not so fast. All you get here is links to the home page of these fifteen government agencies.

The Unified Command Web site contains a link to an Alternative Technology Response Form, posted online. It also has a suggestions page where it says:

“BP has established a process to receive and review submitted suggestions, on how to stop the flow of oil or contain the spill emanating from the Mississippi Canyon 252 well. Proposals are reviewed for their technical feasibility and proof of application.”

“More than 7,800 ideas have been proposed to date. Given this quantity of technical proposals suggested by industry professionals and the public, it may take some time to technically review each one.”

Maybe they don’t need our input, with all those suggestions. As a student of how social media can be used by businesses, I find it hard to believe that putting up an essentially static Web page with a limited information form is the best way to get meaningful input. It took a while to find out how to offer a suggestion and the Web site says they are apparently overloaded with suggestions. Traditional media channels are full of stories about people who have suggestions but can’t seem to get anyone to listen.

BP seems to tout its expertise. BP America’s Web site maintains that:

“BP strives to minimize the environmental impact of its activities by applying management systems and standards and using innovative technology in its operations.”

If BP is innovative, they have not yet proven it in the Gulf of Mexico oil spill response. As of this writing, they were still struggling to find an effective way to “plug the damn hole.”

Perhaps they have not seen the wisdom or potential application of James Surowiecki’s The Wisdom of  Crowds. Surowiecki says:

“If you put together a big enough group of people and ask them to ‘make decisions affecting matters of general interest,’ that group’s decisions will, over time, be ‘intellectually [superior] to the isolated individual,’ no matter how smart or well-informed he is.”

If BP is actually getting too many suggestions to handle well in a finite amount of time, what would they have to lose by giving the wisdom of the crowd a shot? One of my favorite examples of how a business can use the wisdom of the crowd to be successful comes from Threadless. As Max Chafkin says in his article about the company in Inc. magazine, The Customer is the Company:

“…[t]he lesson of Threadless … demonstrates what happens when you allow your company to become what your customers want it to be, when you make something as basic and quaint as ‘trust’ a core competency. Threadless succeeds by asking more than any modern retail company has ever asked of its customers — to design the products, to serve as the sales force, to become the employees. Nickell has pioneered a new kind of innovation. It doesn’t require huge research budgets or creative brilliance — just a willingness to keep looking outward.”

If you are not familiar with the Threadless business model, it would be fair to say it is one in which the customers create the product. Threadless makes T-shirts. They don’t think up the designs, however. They let the customers do that. Anyone who wants to can design a shirt. Once the designs are in, customers have an opportunity to engage in a “popularity contest” and pick their favorite design. Threadless then produces the winning T-shirts for a group of potentially interested customers who are already prequalified buyers.

Could BP do worse than they are now? What would they have to lose by opening up the potential solutions and letting the world vote on the best solutions? If the “best” solutions didn’t work, it would seem they and we would be no worse off. Maybe Kevin Costner has the solution. Maybe Joe Shmoe does. I don’t know. What we do know is that BP has apparently not come up with one yet.

Maybe it is time for the wisdom of the crowds to take a shot at resolving the continuing oil spill in the Gulf of Mexico. Could social media be used to “plug the damn hole?” Could the use of social media be helpful in finding ways to more effectively remediate the damage the oil spill has and will cause?

I don’t know, but could BP do worse than asking?

If you are a company that wants to innovate, or just avoid disasters, shouldn’t you incorporate all available tools, including social media tools into your company tool box?

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Posted in Applied Entrepreneurship, business, Business interruption, crisis, etc., Innovation, Intellectual property, open source, Social networking & media, technology

Save Your Business

This is a collection of articles I have found interesting and, hopefully, useful in our current economy. All of these deal, in one way or another, with strategies, tools, methods, and techniques to make the most out of what you have or to take advantage of what others might think is a bad situation. They deal with cost savings, harvesting, economies, and other planning and implementation techniques, which are part of applied entrepreneurship. I hope you will find them useful, will comment if that might help others, and will suggest other, similar articles you have found valuable.

'88 no lifeguard sign537' photo (c) 2011, Jenni C - license: http://creativecommons.org/licenses/by/2.0/

What you find below is a “starter set.” I plan to add many more shortly, and to keep adding as long as there appears to be an interest.

Since I’m a lawyer, I’m compelled to state a disclaimer. I have not received anything from any of the companies, so I have no axe to grind on any of these tips or the companies mentioned.  I do serve as a pro bono SCORE counselor with the Louisville, Kentucky chapter of SCORE.

I also do not endorse any of what you find below, but I would not have put them there and published this list if I didn’t think there might be merit for some in considering what is said, suggested, or offered below. As we lawyers love to say, caveat emptor (let the buyer beware).

COST CONTROL

Cost Control Tips for Your Business

“As more and more small businesses are failing each day, companies are trying to develop new strategies in order to stay alive and earn profit. It may be the perfect time to shed a light on some useful small business cost control tactics and the fact that they can mean the difference between success and failure of a business.”

INVENTORY CONTROL

How to Cash in on Your Excess Inventory

“Excess inventory can be a serious financial drag for any business. But what to do with excess items – no matter what they are or where they came from – can be a difficult dilemma…”

MANUFACTURING

Free or Low Cost Help for Small Manufacturers

“There is a low-profile but high-octane national network of 393 manufacturing assistance centers —stocked to the gills with cutting edge expertise — whose sole purpose in life is to help small widget makers like yours become more tech-savvy, more efficient, more competitive and more profitable…”


SHAPE UP YOUR BUSINESS

6 Weeks to a Better Bottom Line

“You have to be pretty lean now, but there are opportunities to grow if you are in a position to take advantage of them,” says Edward Marram, a senior lecturer at Babson College’s Arthur M. Blank Center for Entrepreneurship in Wellesley, Mass. “It’s a good time to evaluate your business, find ways to conserve cash and improve. Then look at where other competitors aren’t making it and go after those opportunities.”

“On a shoestring budget (and what entrepreneur isn’t?), it really pays to scrimp and save. Just in case you’ve forgotten the value of a hard-earned penny, we’ve come up with a slew of money-saving ideas to boost yourbusiness’s bottom line-from cutting your legal bills to inexpensive ways to draw in customers. Though some tips will save you more money than others, the end result of your overall spendthrift strategy could add up to a bundle.”

RESOURCES AND LISTS

The Top 100 Resources for Small Business

“The What Works for Business 100 is our annual list of the best websites, organizations, products, services or other solutions for your business. Some are household names — others you’ve probably never heard of. The common bond is that they are terrific at what they do and can help your business in a critical area.”

“What Works for Business continuously seeks out, rates and analyses thousands of business resources.”

Small Business Resource Links

“These links are provided for the convenience of SCORE Web site visitors. They are not an endorsement of the companies or Web sites listed, or the products and services offered by them.”

SCORE

SCORE is a Resource Partner with the U.S. Small Business Administration. It provides free counseling as well as low cost seminars. The Web site provides numerous resources for small business owners.

 

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Posted in Applied Entrepreneurship, business, Business interruption, crisis, etc., entrepreneur, Financial security, Growing a business, Recession strategies, Running a business

Lessons Learned – Casting the Net for Brilliant Idea “Show Stoppers”

The last four posts in this business startup series dealt with ways to get started brainstorming, for the purpose of coming up with a great idea for a new business. Some of the authorities quoted in those posts seem to play down the value of the initial decision, since, in their respective situations, major adjustments had to be made later to survive or grow. Some of the articles suggested you could probably just lie on your couch and have an idea run into you, rather than having to get up off the couch and work for the idea.

In her article, Getting into a Breakthrough Frame of Mind, Lisa Gundry, Professor of Management and Director of The Center for Creativity & Innovation at DePaul University, suggests “[D]uring this time of economic recovery it can be an opportune period to rediscover and even reinvent your business. The following ideas can help create the conditions for breakthrough thinking:”

  1. Unlock yourself from your expectations and be open to possibilities.
  2. Review the opportunity or problem as you understand it.
  3. Engage in experimentation.
  4. Focus your attention on what you want to see happen, rather than what you do not want to occur.

Here’s one more set of steps on how to brainstorm your initial business idea, and to move the ball a little further down the field. I always believe in looking a little further down the road when I’m trying to read a map, and Kathy Korman Frey’s article, How to Turn an Idea into a Business, takes us just beyond the business concept stage. In fact, she even gets into mind mapping with an article you definitely should read if you’re interested in ways to come up with an idea.

Frey suggests a seven-part strategy for coming up with ideas. She suggests starting by taking a piece of paper, drawing a circle in the middle, and then writing the name of an interest or passion in the middle of the circle. She then suggests, in the area just outside that circle, writing every word that comes into your head when you think about your area of interest. From there, you try to find those words that are connected in some fashion, .linking them with lines, then drawing circles around clusters of words, and, finally, picking your favorite cluster. Having found a nexus, you develop an “elevator speech,” briefly describing what the cluster-based business is about. At the end of the exercise, you develop and deliver your “pitch” to sell your product or service for this business.

A few years ago, there was a marked increase in the number of firms, and “inventors,” who spent a substantial amount of time studying patents which had been issued but never commercialized. Many patents boasted great and novel ideas, but could not be commercialized after the patent was issued, because there was either very little interest in the ultimate product (i.e. fruit) of the patent holder’s labor, or because it could not be produced efficiently.

Some of these patented creations needed lighter and stronger materials to be viable. Some needed an energy source, and some needed another part or component to reach marketable potential. Then along came lighter and stronger alloys, more efficient batteries, etc. Guess what? Great ideas were not really reborn, but they were resurrected and updated and lots of folks are making lots of money because they could “connect the dots.”

Some of these new business concepts may revolve around disruptive innovation. This “term of art coined by Clayton Christensen, describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market,’ eventually displacing established competitors.” Harvard Business School professor, Lynda M. Applegate, describes this in her article, Jumpstarting Innovation: Using Disruption to Your Advantage, as follows.

“These disruptive innovations are not just novel inventions. Successful innovators take ideas and turn them into opportunities by adding a business model that creates sustainable economic value for all stakeholders. They then go one step further and exploit the opportunity by creating a sustainable business.”

This is exciting stuff. Part of this process, however, is Balancing interest and excitement, as mentioned by Jeffrey Kalmikoff, former chief creative officer at skinnyCorp/Threadless:

'Mr. Jay Elliott' photo (c) 2007, scott feldstein - license: http://creativecommons.org/licenses/by/2.0/

There’s nothing wrong with being excited. However, excitement is energy, and what you do with that energy is often times more important than the fact that it exists. Just because a car can go fast doesn’t mean it always should, right?

Kalmikoff makes the point that “excitement is what brings on the onslaught of brainstorming – new idea after new idea after new idea” but “I can now see how unbridled excitement can actually derail focus.”

Likewise, Richard Mammone points out in his article, Humility and the Successful Startup, that:

“You must take a full accounting of your strengths and weaknesses before you get started. This takes a great deal of honesty and humility, but it is the only path to success.”

“Every skill set required to form a startup should be subjected to a make-or-buy decision process. In other words, if you don’t have it, outsource it. Let me just stop here for a moment and mention that outsourcing is the strategic entrepreneur’s solution to most problems. There are too many moving parts in a business to have deep expertise in every area; it’s not practical for you to hold on to tasks like marketing if you are an engineer—or product testing if you are a marketing guru.”

I’m in the camp with those who value extensive work to come up with the best possible business concept right off the bat. We all know things change, but that is something to be factored into any plan for a business startup. We will get into synchronizing business goals and personal goals in a later post. For now, however, we must consider whether our new business will be a short-term venture, or is to be of much longer duration.

A huge segment of businesses, both in the United States and internationally, is family controlled. Some were started for that purpose, but many were not. We will look at the unique overlay of issues related to family businesses down the road, but if your goal is to start a business, which will survive your own life and be a foundation for improving the financial health of the family tree, then a substantially different set of options comes into play. Clearly, this might not be just starting a little Internet-based operation in your spare time, in order to get a little extra cash. Of course, if you start a really good Internet-based business, it can have the same impact on your family.

We have already looked at elements some feel are essential for a productive brainstorming session. Certainly, if there are things, which would seem to improve your odds of success in a venture, they should be considered carefully. Likewise, if there are elements which would tend to distract your efforts, delay them, or lead you in less than the most promising direction, efforts should be taken to minimize these. Low hanging fruit is one thing, ignoring the odds is another.

We have also looked at a few baseline considerations, such as whether it is better to try to go it alone, find friends to work with, exclude friends and find others whose only focus is on the prospective venture, or some combination thereof. All of these factors may or may not impact any given startup situation. As you work through the process, it just seems to make sense to try to cast the broadest net of concern, in true brainstorming fashion, to fish for as many of these potential “show stopper” factors as possible. Then, again using the brainstorming techniques we’ve looked at, we can start to rank them, discounting ideas with factors which seem least likely to impact us, and setting the others aside for further study and action.

There are many great articles, books, and seminars on developing innovative ideas. We’ve covered a few, and I suggest you look at as many as possible to come up with the perfect method for you. After all, what you’ve come up with in this exercise may not be the only one you will need or want to brainstorm in future. At some point, however, you’ve got to get beyond the concept stage and on to the next part of the process. In his article, How Good Is Your Big Idea, Tim Knox sums this up.

Every business idea, no matter how good it sounds while bouncing around inside your head, should be put to the test before you invest time and money into its execution. Success lies not in what you think of your idea, but what the buying public will think. Many entrepreneurs find out too late that the public’s opinion of their idea differs greatly from their own. Wasted time and money aside, the last thing you want to do is hear “I told you so!” from your husband, so take a deep breath, slow down, and let’s look at the ways you can test the feasibility of your idea.

We can presume there is probably competition of some sort for almost everything we might come up with, in terms of a concept for a new business. Are we not defying the odds again, if we pick the low hanging fruit, knowing there is likely to be much more sustainable business models within our reach with more effort? My vote is yes, and since I don’t see a show of hands in opposition, we’re going to take a brief look at some “macro” issues before we get to our final, short list of business concepts.

Perhaps one of the simplest “show stopper” tests is described by Alan Hall, founder and Chairman of Grow Utah Ventures, in his blog post, Two Questions Every Entrepreneur Should Answer. The two simple questions are:

  1. Who are your customers?
  2. How are you going to make revenue?

One of the popular “brilliant ideas” these days is to build a business based upon creating something free, building a gigantic social network around this concept, and then slowly finding ways to “monetize” the user base, either with ads on the Web site or blog, or by other means. We’ll look at this phenomenon in a later post, but suffice it to say, this can often land in the “low hanging fruit” bin. An article by John Tozzi, Building a Facebook for Wine, points out some of the hazards, even for lawyers. Michael Stajer’s original idea was to start an Ebay site for buying and selling wine, but the path took an unforeseen twist.

The Bay Area attorney sold his personal wine collection for $25,000 to finance the site, called WineCommune. At the time, he hoped to get venture or angel funding early on. “My original plan was, ‘Hey, I’ll get this product up and then I’ll shop it around and see if I can get some money, hire some people, and then take it to the next level,'” Stajer says.

That didn’t happen. The dot-com collapse came a year after he started WineCommune, and investors were wary of the regulated market of alcohol sales. Stajer kept his day job and gradually developed the site. He amassed more than $40,000 in credit-card debt to finance the business. But despite the time he spent wondering how he would ever pay the bills, Stajer says he’s glad he never got funded.

As it turned out, Stajer was able to change directions and stay with the wine concept, but his initial “brilliant idea” needed a major overhaul. This points out the need to have a backup plan, as you explore and finalize your own brilliant idea for a new business.

The prospect that your venture may never make money makes it important to have a backup plan, says Stajer. His father, a hotelier and restaurateur, advised him that “if you want to be an entrepreneur, that’s fine, but have something to fall back on.” Stajer knew that if his business failed, he could always work at a law firm for a few years to pay off his debt.

Stajer was able to rework his love for wine and desire to make it big by taking wine online. Ultimately, he scrapped the Ebay of wine concept and went with a little less inventory startup expense.

The company expanded by launching online retailer J.J. Buckley and WineZap, a price comparison site with a social network. He expects WineCommune to have $17 million in revenues this year from a mix of advertising, paid referrals, and retail wine sales across the three sites. “Now, of course, [the credit-card debt is] paid off, and I got my wine collection back,” he says.

If your big idea is trying to create viable wine businesses through social networks, flip through this slide show.

At this point in our journey, having spent the last four posts on coming up with the initial business concept or idea, it is probably time to take a short break. We started with a desire to create a new business from scratch. We have looked at a number of ways to brainstorm our first concept, trying to use the funnel approach. We first threw all our possible ideas up on the wall. Then we gradually started to look at ways we could reduce “all” to “fewer,” and more logical choices during the initial selection process.

This idea creation process is as much art as science. There are definitely many “scientific” approaches to it, many of which we’ve looked at, and many of which we have not. Every entrepreneur must pick his or her own combination of these methods for each venture. The method and the elements will change, in many cases, depending up the goals of the entrepreneur and other environmental factors.

At this point we still don’t know what we don’t know. That is a very dangerous place to be. Our excitement and growing passion for our initial selection make cause us to take off, rashly, in the wrong direction. A good general would never march troops over the hill without sending out scouts and having the best possible reconnaissance on what lies ahead. No one wants to be ambushed. We already have an investment of time in the process. As we continue our journey, that investment of time and other resources will increase substantially.

Every step we take in one direction may very well be two steps away from another direction. If we spend $100 or 100 hours pursuing choice “A,” then we have $100 less or 100 hours less to pursue choice “B.” We have a “gut” feeling at this point about which direction we should start out on, but being mindful of the “vector” factor mentioned in a previous post, we certainly want to conserve our resources, including our time, and reach our ultimate goal as quickly as reasonably possible. Some say it is all about the journey, but we don’t want to waste time on the trail either.

Having come up with some initial selections for our new business concept, in the next posts we’ll review what we have come up with and start down the funnel to refine and conduct further screening of our new business ideas to see if there are any show stoppers, which eliminate the reasonable prospect of going forward. We may hit the wall on one or more, but our initial research may also lead us to simple work-arounds, such as outsourcing. They might even help us discover some combination of factors leading to a disruptive innovation.

The path we are seeking is one which leads us to success. There are many, trails which will lead to failure and many, which will lead to disaster. We have to be as sure as we can that when we make further investment of our time and other resources, we are well prepared for the next steps in the journey, and have the greatest chance of success for the future.

This is the fifth post in the business startup series. For others in the series, check the series index.

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Posted in Applied Entrepreneurship, business, Business life cycle, entrepreneur, Family business issues, Innovation, Personal happiness, Planning for a business, Starting a business, Thinking about a new business

Lessons Learned – Finalizing the Short List of Initial Business Ideas

The title of Melanie Lindner’s article, Is Your Great Idea A Real Business?, asks what some might consider a fair question as we continue our journey to starting a new business.

“We were trying to find businesses that would want to buy our software, but it was hard to get new leads,” says Moodley, 36. He figured other sales organizations would be willing to pay $30 a month to drum up new business through his site, which would offer more targeted information than, say, mainly free sites hosted by Bloomberg and Schwab.

Good idea, terrible timing. About four months later, after plowing $2,500 and putting hundreds of hours into a prototype, Moodley watched in horror as Google launched its own finance site, called Google Finance. “It literally looked exactly like my site,” says Moodley. “I had a sinking feeling in my stomach as I clicked around and realized that their site was completely free, and I was planning to charge for the same information.”

Moodley’s mistake is all too common, says Toby Stuart, professor of entrepreneurial management at the Harvard Business School, who warns would-be small-business owners not to “overestimate their originality.” In other words: If you’ve thought of it, chances are someone else has too.

Fortunately for us, Lindner also gives us some help on how to answer this question, by asking two more:

The first question you should always ask yourself: Do I have a compelling value proposition? It might seem obvious, but it bears repeating: A great idea is only a great business idea if it has an obvious and compelling value proposition–meaning that enough people are willing to pay for your product or service at a price above your cost to deliver it.

Next question: Is there a viable market for your product or service? Even if your business is likely to turn a profit, professional investors won’t line up to fund an operation with limited growth potential. Also, don’t expect to create a new market–if one doesn’t already exist, there’s probably a reason

Have You Created an Impossible Business? by C.J. Hayden works through the efforts of a consultant to help entrepreneurs in two different scenarios. While these deal with existing businesses, rather than the determination of the basic concept or business idea in a pre-start up situation, there are relevant lessons for our journey. It sometimes helps to look a little further down the road when you’re studying a map (or GPS display). Here’s some wisdom from Hayden’s article.

It’s easy to think that any business can be successful if you work hard enough, but there are many situations where this just isn’t so. Consultants, coaches, and other service professionals often start a business believing that all they need to do is charge a “reasonable” fee and sell “enough” of their time. But unless you do the math to prove or disprove your assumptions, you may be creating a business that can never succeed.

New consultants, coaches, and other professionals almost always overestimate how much they can earn and underestimate the amount of time and money required to successfully market themselves. They also forget that they will have to cover not only their living costs and business expenses, but pay self-employment tax, buy their own health insurance, provide for their own retirement, and allow for unpaid vacation and sick time.

Another way to look at the process can be found in the article, A process to test a startup idea, by Brian S. Courtney.  In Courtney’s case, he had an existing business, but was interested in pursuing something different. Courtney said “[S]o what does this have to do with a startup? Well, I’m using this same process to help define my next move.”

'To-do list book.' photo (c) 2009, Justin See (coming back) - license: http://creativecommons.org/licenses/by/2.0/

We use five steps to align business users and software developers:

  • Define the idea
  • Determine the business case for doing it
  • Create alignment around it
  • Define an implementation plan to execute it
  • Get executive buy-in to fund it

I love (perhaps too much) the phrase “low hanging fruit.” Common definitions include a simple problem or target; a target that is easy to achieve; or a problem that is easy to solve. Most of us love to find low hanging fruit, and in our search for the best business idea for us, we’re sure to find some. An article by Andrew Goldsmith, which I posted today on the Applied Entrepreneurship group site, Here’s an Idea That’s Not Quite Ripe, gives another view of this.

Goldsmith’s article seems to focus, literally, on orchards and consultants. He says:

How is a company like an orchard? In the minds of some consultants, we’re all field hands and they’re the Johnny Appleseeds of change. And the right way to work those trees? It’s advice we’ve all heard: pick the low-hanging fruit.

Plowing (no pun intended) through the article, discounting the general feeling of some that consultants may not be worth the fee, the article ends with the news that the consultants have figured out a better solution than the clients thought.

“In the past,” Faubion says, “we had larger trees that required ladders. The new trees are ‘pedestrian’ trees that don’t require ladders. So instead of picking the low-hanging fruit, the industry has lowered the tree.” Now that’s thinking outside the, uh, orchard.

The real lesson for us at this stage of our journey to start a new business is not how brilliant some consultants might be. Returning to the orchard, Goldsmith’s article mentions that “low hanging fruit” may not always be the best. It is the easiest to pick, but often the better fruit is higher on the tree and requires more work to reach. The lesson for us may be that we may come across many, easy to find “answers” on our quest. Just as there are often several equally plausible answers to a question, a common tendency is to harvest what seems acceptable, rather than working a little or a lot harder, going for the better answer and the real prize.

Paul Dowling, CEO at DreamStake Social Media, had an interesting post yesterday on the LinkedIn, Start-Up Phase Forum:

All too often I hear people say that they have had a brilliant idea and can’t understand why people will not buy into it. What they don’t realize is that the idea is only a small part of the equation. In some cases a good entrepreneur can even have success with an average idea so long as it is well implemented. An entrepreneur needs to tick a number of boxes. Firstly, potential investors and clients will need to buy into the person and their management team. A good management team will succeed with an average business idea, whereas a poor management team with a good idea will fail. Secondly, the team will need to be excellent at implementation. This involves writing a good business plan and executing on it. Thirdly, focus is essential. Very few entrepreneurs succeed without extreme focus at least in the early days. Finally, adaptability is a key point. The business idea will evolve on a monthly basis until the right model is discovered. A good entrepreneur can deal with ambiguity.

Wannabe entrepreneurs can spend their lives brainstorming the way to build a better mousetrap. If they do, they may never become a “real” entrepreneur. On the other hand, they can also dive in too quickly, perhaps having plucked some of the low hanging fruit we discussed earlier in this series, only to find it spoiled and worthless. That could leave the wannabe entrepreneur broke and exhausted from pursuing the “impossible dream.” Not a good scenario.

There must clearly be a balance in our efforts to discover the best business idea for our new venture. Just like the saddlebags on a mule, there must be balance between working hard and “working smart” on this stage of the process. At some point, however, we must also make one of our first business judgments and determine that we have exhausted our reasonable prospects of coming up with a “brilliant idea.” If we have not, we might want to start at the beginning and go through the basics again, recruit others in the process to give us different perspectives and skill sets, or simply find a mentor who can help us get back on the right path.

Once we find the first “brilliant idea,” our journey has just turned the first corner. In the next post, we’ll finish our quest for the perfect business idea and start the stage. We will embark on the process of initial research and testing of the idea we’ve come up with to give ourselves our first internal performance audit.

This is the fourth post in the business startup series. For others in the series, check the series index.

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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.

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Posted in Applied Entrepreneurship, Business life cycle, Innovation, Planning for a business, Starting a business, Thinking about a new business

Lessons Learned – Moving to Your “Short List” of Business Startup Ideas

We identified two criteria for our new business idea in the last post. Those are that:

  1. we must have passion for whatever business idea we come up with; and
  2. running this business must give us personal satisfaction

We also got started with the process of generating ideas or opportunities we are interested in exploring and adding to our short list of potential businesses to start. Since your starting vector (on the journey to find the best concept or opportunity for your new venture), will often be a factor in how quickly you reach your goal, if at all, we’re going to spend a little more time on that issue in this post.

In an attempt to be “fair and balanced,” I must admit that Paul Graham’s article, Ideas for startups, seems to place less value on the initial business idea.

The fact is, most startups end up nothing like the initial idea. It would be closer to the truth to say the main value of your initial idea is that, in the process of discovering it’s broken, you’ll come up with your real idea.

The initial idea is just a starting point– not a blueprint, but a question. It might help if they were expressed that way. Instead of saying that your idea is to make a collaborative, web-based spreadsheet, say: could one make a collaborative, web-based spreadsheet? A few grammatical tweaks, and a woefully incomplete idea becomes a promising question to explore.

Actually, startup ideas are not million dollar ideas, and here’s an experiment you can try to prove it: just try to sell one. Nothing evolves faster than markets. The fact that there’s no market for startup ideas suggests there’s no demand. Which means, in the narrow sense of the word, that startup ideas are worthless.

Despite Graham’s apparently pessimistic view of the value of initial business ideas and concepts, his article presents several strategies to generate good business concepts, and is worth reading as we move along on our journey to a startup.

I posted an article today on the Applied Entrepreneurship group site on LinkedIn, Saras Sarasvathy Explains the Entrepreneurial Method, by, of course, Saras Sarasvathy. She says:

So it’s not really a question of this is better than that, it is just that the way entrepreneurs do it, they work with what they have and they look around and say, “What can I do with this?” And then, “What else can I do with it?” So it goes back to the idea of doing the doable and then pushing it.  So they just look around at the resources that are available to them and by resources I don’t even mean money.  A lot of the entrepreneurs I study started with things like who I am, what I know and whom I know.  So they are looking at what kind of a person am I, what kinds of things turn me on, what kind of things that I just will not do because it goes against my values. So, they have a sense of self. They know what they know and very often they are very good at knowing what they don’t know.

I posted another article today on the Applied Entrepreneurship group site, from the Idea Sandbox blog, which also seems on point for our present stage in the process: How To Create The Perfect (Brain) Storm. This particular post sets out three elements necessary or at least helpful for brainstorming. Here’s a snippet from the post:

Have you ever been in a brainstorming or strategy meeting where all the elements seemed just right and ideas just kept flowing and flowing? You and your team were able to hit ideas “out of the park?”

Chances are you had…

  1. a. the right people assembled,
  2. b. the right process and tools, and were,
  3. c. in the right place… where people felt safe to think big ideas and were free from distraction.

I call these conditions the Perfect (Brain) Storm… When all the elements come together just so, and ideas just seem to flow.

Despite what the last article says, some feel the quest for ideas shouldn’t be all that hard.  Finding the Real Opportunities starts out as follows:

Business ideas are all around you.

They are lurking in your garage, in your basement, in your kitchen, and in your children’s room. You’ll find them in magazine ads, at your neighbor’s house, and at work. They are right there in the vegetables you brought in from the yard . . . in the stack of papers next to your laser printer . . . in the back of your truck . . . and at the back of your mind.

You don’t need to be a genius or an MBA to spot those ideas and turn them into profits, either. Identifying business opportunities is often as easy as identifying problems many people share and finding a way to solve them

The article goes on to suggest that one reason it is so easy to find ideas for your new business is because you can simply:

  • Do what you live to do
  • Turn old standbys into new products
  • Look for marketing avalanches
  • Look for mundane moneymakers
  • Spin off a more lucrative business (not relevant to us since we’re presumably starting from scratch)

There are certainly many more ways to consider when trying to come up with the initial core idea or concept for a new business. I will be posting an article tomorrow on the LinkedIn site, which at least raises one worth mentioning here. The article by Paula Pollock, is Ego Keeping You From Your Dreams?

The bulk of the verbiage in the article is not necessarily germane to our process at this point. It does raise the significant specter of ego,  which is germane. When working through the process of finding an appropriate business idea for further study, ego can certainly get in the way. This may be particularly true if working in a group, since we all want to impress our peers with our value in such situations. It could, however, be an even more dangerous factor when working alone, since there are no others to question our energy, experience, or available resources.

I often suggest a little exercise to clients embarking on a new venture. I recommend that, after they create their initial draft of a business plan or business case, they lock themselves in a room alone with a mirror. I suggest they then say out loud to themselves, while looking in the mirror at themselves, each of the essential things to which they plan to commit themselves in the prospective endeavor, and that they next repeat, in the same fashion, each of their qualifications enabling them to have a reasonable chance of accomplishing these goals.

Granted, I expect very few of these clients actually go through this exercise. Some have done it, have thanked me, and have then moved back into the real world. The exercise works just as well when each member of a startup group does this, individually, of course. If you get through it with a straight face, you are either a really good liar, or better able to do the same thing when you look for your first employees, investors, etc.

In the next post, we’ll try to get to our short list of potential business ideas, and then move on to the start of the research and testing phase.

This is the third post in the business startup series. For others in the series, check the series index.

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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.

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Posted in Applied Entrepreneurship, business, Business life cycle, entrepreneur, Innovation, Personal happiness, Planning for a business, Starting a business, Thinking about a new business

Lessons Learned – Brainstorming Business Concept Options

Have you ever had the feeling you wanted to start your own business, but just couldn’t put your finger on exactly what type of business that would be? Do you periodically think you’ve come up with a great idea for a business, but never seem to be able to put two plus two together to make five or more? Well, we’re at that point in the business life cycle.

Maybe there will be a real business and maybe there won’t. It is up to us to figure out if we can pull off starting a successful one. We can definitely pull off starting a new business, but with a troubled economy, banks which seem to have a death grip on funds for even their best clients, and skittish customers who may be delaying or avoiding all sorts of traditional spending, we’ve got to be even more careful than in boom times. Cash flow hides a lot of mistakes in your business plan. A recession can certainly point them out.

The good news is that historically, in times of economic downturn, the United States and other countries have often produced healthier and ultimately more successful businesses than in more prosperous times. The common wisdom is that this phenomenon is due to the fact that entrepreneurs are, by necessity, much more cautious in an economic downturn, take better care of their resources. This includes more judicious use of those resources, careful calculation, and sampling of potential ROI for their time, money, and other resources.

Given this premise, we want to do at least as well, but there is something else we want. We want to be happy in our work. I’m not necessarily talking Snow White’s seven happy fellows who whistled while they worked, but we want to be happy when we spend our time on this potential enterprise. Then again, being happy enough to want to whistle while we work wouldn’t be a bad choice either.

We will come back to this when we get to the good old entrepreneurial self-analysis, but personal satisfaction must be a major part of this new prospective enterprise. We have to remember that often, one option is not leaving your “day job.” Sometimes inaction is the best choice.

The other factor, consistently preached by the most successful entrepreneurs in the numerous articles I’ve posted on the LinkedIn Applied Entrepreneurship group site, is that entrepreneurs must have passion for their business.

There are all sorts of articles on how to generate ideas, innovation strategies, and the like. Some of these are great for large corporations and other big organizations with lots of resources, including facilitators with plenty of professionally researched data. How does one person or a small group of folks go through a similar process?

There are way too many articles dedicated to this topic to post here. Many others deal with it peripherally. I have selected just a few from the Applied Entrepreneurship reading list to start with in this post.

Based just on the title, I picked one by Derek Cheshire to start with, How to generate 20 new business ideas over coffee. Cheshire suggests the following method.

To start with, select an issue or topic about which you need to generate ideas. The fact that some of you will be more familiar with the topic than others in a group situation doesn’t matter for this exercise. Everybody will get benefit from trying out the technique and swapping notes afterwards.

The topic should have a positive and possibility-focused phrasing, such as “How can we gain/improve/create/diversify/build…” Make sure that everyone in the group understands the question or statement.

Cheshire also suggests each member of the group take notes on their own notepad (a/k/a laptop or handheld) and pick one member of the group to serve as recorder, putting all the ideas generated up on a flip chart, being sure to write them verbatim so as not to interject opinion or other filters.

He also suggests using a reverse statement to start with. In the case of my group, this might be listing all the types of businesses we would not want to start together, or factors of such a business, which we would not want to engage in. For example, if none of us wants to be a welder or be involved in a fabrication business, we might eliminate a few of the possibilities right off the bat. If we don’t want to be involved with kids in business, a tutoring (at least for kids) or day care business might take a dive early.

Cheshire suggests the next move is to reverse the process, using the same ideas generated in the first round. Although this part of the procedure would seem to have merit for determining what is not going well in an existing business situation, I’m not so sure it works for a group of friends and colleagues trying to figure out if they can come up with a business they could start together. Perhaps you can help me on that one. If so, I’d like to hear from you.

If working for an idea is too much for you, perhaps it will just come to you. Ryan P. Allis, author of Zero to One Million, wrote an article I posted for the Applied Entrepreneurship group, 105 Business Ideas. I know it is a catchy title, but the point is that there are tons of such articles out there for you to peruse.

If reading is too hard for you, then try the article I posted by Jeff Elgin: Looking for a Great Business Idea? Stay Home. The subtitle reads “A tour of the typical home reveals numerous opportunities to start a home services franchise.” Keep in mind, this article comes from the “Franchise Zone” of Entrepreneur.com, but Elgin’s premise is that ” as just one example of how ubiquitous franchises have become, let’s take a look around a typical home to see what types of opportunities await people interested in starting a home services franchise.” He then walks you through everything from lawn services, garage remodeling companies (something we could all probably use), to interior decorating, and maid services.

If you have more rooms, perhaps you can get more ideas while lying on your couch. If you have the energy to get up, read another of a very large number of articles on generating business ideas, which was written by Steve Strauss, Find the Right Recipe for Business Success.'SMWLDN Brainstorm: Biz / Marketing (1)' photo (c) 2011, Chinwag - license: http://creativecommons.org/licenses/by/2.0/

According to Strauss, creating your own successful recipe is a three-step process:

1. Brainstorming. Sit down and write down every kooky idea that comes into your head about possible successful formulas that might work for your business. It could be an ad that you run in your local newspaper. Maybe it would be a direct mail campaign. It could be a sale, or an outlet at a local flea market. Who knows? There are countless ways that you can distinguish your business and create a successful recipe.

Once you have some ideas, eliminate the bad ones, and then get some feedback. Speak with people whose judgment you trust, and talk to other entrepreneurs you know who are successful. Come up with your top two or three ideas.

2. Testing. Once you have a list of potential goldmines (which is what a good business recipe is — something you can mine again and again), try them out. Yes, it would be great if they all worked, but the idea here is to discover your very best option, the one plan that can be repeated over and over again to bring in customers and money. Figuring that out is a great moment in the life of any business because it means that you will be able to be a long-term success.

3. Repeat. You must make sure that you will be able to duplicate this success time and again, with measurable, predictable results. And once you have done that, you will have created a reliable, steady source of income that you can always count on. Doesn’t that sound nice?

There are many other ways to generate initial ideas for a new business. We will continue our search in the next post. Got any great ways to generate such ideas? Let me know.

This is the second post in the business startup series. For others in the series, check the series index.

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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.

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Lessons Learned – Refining (or finding) the Initial New Business Concept

In my last post, I mentioned I had been working on a change of direction for this blog. Instead of digesting the fifty or so articles I post weekly on the LinkedIn, Applied Entrepreneurship group site, and then giving my thoughts and impressions of common threads, I’m trying something new.

The current plan is to continue to use the rapidly growing Applied Entrepreneurship archive of some 1,400 articles on entrepreneurship (also available from the Boxnet application on my LinkedIn profile page), as well as new articles I post from this point forward, The difference is that instead of just blogging about the articles, based upon whatever gets posted on a daily basis, I’m going to try to “connect the dots” in a different way.

The premise of the blog’s new direction will be to use those articles, as well as your comments, in a step-by-step journey to starting a new business venture. Beginning with this post, I plan to walk through the process of starting what could be either a hypothetical business, or perhaps an actual business. I plan to have some fun with this, and I hope you will too.

There are at least a few things, which could make this a little more interesting.

  • First, quite some time ago, one of the posts referenced an article I’d run across describing a “virtual incubator” project. Without going into too much detail, entrepreneurs posted their interests online in an ongoing user generated blog format, in hopes of matching talents, opportunities, and other things necessary for a start-up. The goal was to actually create one or more real business ventures out of the “sparks” generated through the virtual community.

I followed much of the string from the beginning, which ended up consisting of hundreds of posts. I won’t spoil the secret of the extent to which this generated real business ventures, but I would like to think this series has at least the same potential.

  • Second, a group of professionals with whom I have served on a board of directors, has been exploring the possibility of continuing to work together in some new endeavor. We all spend some of our time on charitable boards but have an interest in the potential of working together to make some money together. We like each other and respect the talents we have seen each other display for many months, while we served on the board of the same enterprise. We plan to get together socially in the near future, and I’m sure this topic will come up.

There is the potential that we can use the output (from me) and input (from you) of this blog series to help us gel our thoughts, pick a plan to go forward, and actually get a business off the ground.

  • Third, simply posting “the best of” articles and gathering feedback from readers should allow me to periodically post “best practices” lists and discussions. The Applied Entrepreneurship reading list, referenced above, contains literally scores of articles on many different aspects of entrepreneurship, as well as the process of starting and running a successful business. Some of the articles contain conflicting points of view. Some are better than others. Some are the best for one situation, but may not work for another. This is where experience, a good dose of luck, and the art of applied entrepreneurship come into play.

There is no one book, which will walk you through starting up every type of business under every set of circumstances. I’ve bought and studied enough of them to feel comfortable in making that statement. I’m still buying them and reading them, but I doubt I’ll ever find that silver bullet. On the other hand, there are lots of millionaires, and quite a few billionaires, who got where they are through imperfect means and methods. You don’t necessarily have to do it perfectly, but you do have to do it well enough to beat the competition and sustain that long enough to get it to the bank. (Read the article I posted by Anthony Robbins, Don’t Try To Be Perfect.)

I plan to use this blog series to generate a series of “best of the best” business startup and business operations articles, which I hope will provide you with both an opportunity to participate in the selection process, and benefit from the results. The success of this part of the plan is as much dependent upon you as it is on me, so let’s get started.

On The Threshold of Starting a New Business Venture

One of the threshold issues in such an endeavor deals not with issues, but people themselves. An article by Noam Wasserman, which I posted on the Applied Entrepreneurship site earlier this month, Founding with Friends, Founding with Strangers?, deals, as the title suggests, with the issue of whether one is better off founding a business with strangers or friends. The article gives pros and cons, and was certainly worth reading as a preface for this venture.

Another of the threshold issues is whether the concepts entrepreneur “wannabes” are working with are real ideas or “just” opportunities. Often, I find my new clients come in with great excitement, having found what they think is the “better mousetrap.” Just as often, someone has apparently just found the “perfect” business opportunity, but they have to act fast to make it work. In both cases, there is a great danger that they will rush past the basics on their way to the “gold rush.” Sometimes that can work, but the odds are slim.

Yesterday, I posted an article by Tim Berry (founder of Palo Alto software and great business blogger), titled Ideas vs. Opportunities. Here are a couple of points from his article:

The business planning process is about filtering the opportunities — a precious few, requiring focus, and planning — from the idea.

An opportunity has some of the following elements:

  • Industry and market potential: look at market structure, industry structure, growth rate, margins, costs, etc.
  • Economics: capital requirements, fixed costs, cash flow, return on investment, risk.
  • Competitive advantage: degree of control, barriers to entry, availability of sufficient resources.
  • Management team: people who know the industry, the market, the operations, the logistics, the road to market.

So now we’re starting on the journey with at least two things in mind. The two issues are:

  1. Is it better (or reasonable) to start a business with friends than with strangers?
  2. Are we better off looking for an idea for starting a new business, or just looking for the right opportunity?

There are clearly many more issues one should consider at this stage, including the old entrepreneurial quotient self-evaluation. We’ll get into that and dozens of other startup questions and answers as we travel down this road together. If you have suggestions on answers to either question, above, or would like to suggest other threshold questions, please contribute to the process.

This is the first post in the business startup series. For others in the series, check the series index.

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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.

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