Tough times
In tough times, operating in a non revenue generating business gets difficult. All your business may even dry up.
It doesn’t mean these activites aren’t important, it’s more a reflection of human behaviour. Unless the link of the activity to the transaction is clear – it will get pulled. This is true for consulting, marketing budgets or even your job. So the question we then must ask is this – how close are we to where money changes hands? Are we close to the transaction or in the backroom somewhere?
The further say we are from the money – the greater redundency exposure we have, in business and employment. Closeness to money is why many real estate agents who are often intellectual dodo’s still make big dollars. I’m sure you can think other examples too.
If you want to be an indispensable business partner in tough times, make sure you are close to the money.
Steve – founder rentoid.com
Your worst nightmare
From a competitive viewpoint, imagine for a moment that our worst business nightmare came true.
Maybe Google decides to enter our market space. Or the Coca Cola Company launched a beverage with the same consumer benefit we’ve been bootstrapping. Or large company X decided to compete against “us” head on.
Well – you’d be surprised how that feels. How it makes us react, and how it very quickly changes our perspective on what is the most important element in ‘winning’. In competing effectively for our share of wallet.
All of a sudden many of the projects we are investing our time on seem far less important than they were yesterday. Maybe that front page redesign can wait, maybe the shiny new web 2.0 buttons are a little less important. Maybe our packaging will do for now and quite possibly every project we have on the agenda, excluding customer ‘centric projects’ can be put on hold.
Here’s an exercise worth doing with your team. Act as if. Act as if it has just happened. Have an ‘emergency session’ with your team on how you’d react if a more well resourced, financed and well known competitor came to play. Build your battle plan. Once your battle plan is drawn up – throw out your current business plan and work on that instead. Because they are coming, especially if your startup is in a fertile consumer territory.
After the intital fear, most entrepreneurs just get inspired, get angry and get on with it. A good scare never hurt anyone.
Steve – founder rentoid.com
Business relationships & startups
Entrepreneurs must build all types of relationships.
- Relationships with our suppliers and the value chain
- Relationships with our buyers & resellers
- Relationships with our staff and business partners / investors
- Relationships with our audience & evangelists
In fact, when we are small have little or no revenue, the only thing we can do is have conversations and build relationships. These will lead to action and revenue. While having dinner with a colleague the other night, John Colbert of Corporate Edge training he gave me his view on relationships.
He said:
There are two important factors in relationships – frequency & proximity.
How frequently are we engaging the other person? Where frequency, is any type of conversation, communication or interaction.
And what is our proximity to this person? Where proximity pertains to the physical closeness and real world interactions we have together. Do we meet in person? Are we getting to know each other without the use of technology? Simply meeting in the same location?
The more of the above two things we have the stronger our relationships come. If we for a moment think of who we have strong relationships with, we’ll see we have both Frequency and Proximity.
The reality is humans want to deal with people they like, trust and know. This is what relationships build.
So if one of our important business relationships (those listed above) is flagging, maybe we should have more frequent interactions, get closer or do both.
How to ‘Pitch’ workshop
Below is an elevator pitch ‘workshop’ I gave for the ‘Agents of change‘ entrepreneurs club of Melbourne University. The video below is the one of 6 x 10 minute videos. The first (the one below) includes an ‘example’ pitch I did for rentoid – then has ‘alot’ of questions and answers. The last of the videos, workshop 6 – all of which are here has some ideas on great pitcing practice.
It’s kind of long, but the largely due to the discussion afterwards!
Frequency vs Depth
In advertising parlance we talk about depth and frequency. Depth being how many people we reach on each occasion. Frequency being how often we reach them.
It’s great to let zillions of people know about our start up as quickly as we can. We may even be lucky enough to get some kind of viral campaign working for our startup, we may be featured in the newspaper, on techcrunch or we might even be lucky enough get a TV spot.
After the event here’s what happens: People cook dinner, pick up the kids from school, pay the bills, kick the dog and get on with life. They have a life to live and they get on with it. Our start up doesn’t really matter to them… straight away.
Consumer awareness goes something like this:
Exposure 1: “That’s a cool idea / product / concept”
Exposure 2: “Oh, yeh, I must remember to check that out”
Exposure 3: “There it is again, might be worth having a look”
Exposure 4: “hmm, Ok – I’ll look when I’m shopping next / on line next”
Exposure 5: ….They finally act, and go look at, investigate, touch, feel, try….”
After many exposures we have “a chance’ of selling to them.
Sure some people check it out first time, some buy straight away, but the large majority need reminded, over and over again. It doesn’t mean – go out and spam them or do terrible interruption marketing. It means this; “have frequent and relevant marketing communications to the people who might care”.
It’s a lot like never noticing a car advertisement until we are in the market to buy one. They’re always there, we just have selective perception.
This is why Advertising frequency is king. No point having a big launch campaign if our prospective new customers aren’t looking on that occasion. For entrepreneurs, the big launch concept is a hoax – It’s unsustainable. Like an exercise regime- it’s far better to do an hour workout everyday, than to do a 5 hour gym session on a Saturday.
The good news is we don’t need the superbowl budget of a large conglomerate to have the frequency we need. We just need to start a conversation which continues indefinitely.
Quote for Entrepreneurs
“It has to start somewhere, it has to start sometime. What better place than here? What better time than now?”
What do investors invest in?
While dropping into Startup Camp in Melbourne last week I started chatting with Jonathon from Melbourne Angel Investors. I asked him just one question:
What is more important in their investments, the team or the concept / product?
His reply was a simple one and here it is:
We’d invest in an A Grade team with a B Grade product, but we wouldn’t invest in an A Grade product with a B Grade team.
Startup blog agrees. Though I did here that he was pretty ‘anti-tech’ as far as their investments go…
But the first piece of advice is worth adhearing to. Above all things build an A Grade team, be an A Grade entrepreneur.
And so again we hear that the people in your startup are way more important than the secret sauce. It is without irony that A Grade teams more often than not find A Grade ideas too.
Only the lonely
There’s many emotions associated with being an entrepreneur – seldom discussed is the fact that it’s a lonely business.
If we can’t deal with being the guy in photo above, then we’d be better off in the office of conglomerate X.
No one knows, cares or even thinks about what we are doing until we’ve arrived. During the lonely journey we’ve got to stay busy, remain active and get out in the world. We’ve got to get out of the ‘lab’ work mobile and stay social. If we islotate ourselves too much during the ‘lonely’ evolution period, we risk losing the ability to make the cross over to ‘leader’ when our startup gains momentum.
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