Start Up Blog

Trade Secrets

Posted in entrepreneurship by Steve Sammartino on March 4, 2014

Once upon a time simple forms of industry knowledge were a significant competitive advantage. The little things we knew about our industry from working in it mattered. We had to earn expertise over long periods, and the release of that expertise to prospective customers. We traded in trade secrets. But now those days are coming to a close.

In a market where anyone can know anything about an industry (from the worlds experts) with just a few key strokes, then we need change our view on what creates an advantage. Knowledge of products, prices, places, who does what and who owns what are all knowable. We are quickly approaching a market of perfect information. And when everyone can know everything, and prices quickly level out, the only thing left is trust. And a great way to build trust is by sharing trade secrets. By being generous with our knowledge well before we want to do business with anyone. We need to share what we know so others can navigate the market and reduce their risk.

When it finally comes down to doing business, customers have a much higher probability of trusting those who gave them the most trust first.

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Simple sales hack

Posted in entrepreneurship by Steve Sammartino on December 9, 2013

When selling anything we need to know where to focus our energy. Often there are two different realms we need to sell against.

  1. Convincing or demonstrating to the person that the product or service is good or better than the alternative.
  2. Convincing the person to exchange the thing in question for their money.

Most good sales people know how to do both of these tasks, but sometimes it’s tricky to know which one is the focus question of the moment. A simple way of finding out is to go ahead and ask. It’s worth remembering that selling isn’t a guessing game it’s a service game.

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What to sell first

Posted in entrepreneurship by Steve Sammartino on May 16, 2013

Before anything is sold to a customer, first a story gets bought.

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Hitting 3 out of 10

Posted in entrepreneurship by Steve Sammartino on July 18, 2012

In baseball a hitters average matters a lot. If you are hitting 100, it means that you score a run 1 out of 10 times you step up to the plate. If you are hitting 300, it means you are getting 3 runs per 10 steps up to the plate. In modern times, a season batting average higher than 300 means two things. The first is that you will be in high demand in major league baseball. The second is that you will be earning millions of dollars for that skill. Anything higher than .400 is regarded as an almost unachievable goal. The last player to do so, with enough plate appearances to qualify for the batting championship, was Ted Williams of the Boston Red Sox, who hit .406 in 1941, though the best modern players either threaten to or actually do achieve it occasionally, if only for brief periods of time.

It turns out that sales and baseball are very similar.

An average person will probably close a deal 1 out of 10 times. Someone who can get the job done 2 our of 10 times will make a very good living as a sales professional and earn an income well above the norm. If however, a person can get over 300 in selling, then they too will end up earning millions of dollars – just like the guys in the major leagues. All they need to do is find an industry that understands and appreciates the value of people who sell their wares. A big clue here is that it wont be a product that sells from a shelf. Another clue is that sales can be learned, it’s invariably a human skill that we all have, but very few people actually embrace their potential to do it.

When it comes to startups, we’ve all got to sell. We’ve got to sell our ideas, our passion, our product and our vision. We’ll even need to sell to our supply chain before we even get a chance to sell to customers. Success and selling are inextricably linked. No matter how advanced technology becomes someone has to sell it at some point, or revenue wont happen.

The thing to to remember though, is that we really only need a hit rate of 2 out of 10 to beat Joe Normal. Doing any better than that and we are on our way to stardom.

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Selling – the highest paid profession

Posted in entrepreneurship by Steve Sammartino on March 31, 2012

It has been said many times that ‘selling’ is the worlds highest paid profession. While I had my doubts early on in my career, I have never been more convinced of it that I am now. For quite a few reasons which I have shared below.

There is no limit

If we are in a real sales job, then there is no limit to what we can earn. That is, we work on commission. And while there are plenty of dodgy commission based sales jobs around, the serious sales roles allow sales people to earn as much as possible. It’s a simple formula to let a sales person take a piece of every pie they bake. If we are working in a sales role for a salary, then the truth is we are not really sales people. If we work in a sales role that has guaranteed distribution – then again we are not really in a sales role.

The truth about investment bankers

The general populous has been tricked into thinking that investment bankers (yes the type that hang out in wall street and ruin economies) are mathematicians and brilliant statisticians who work out innovative ways to generate more money than existed before they arrived. Well, the global economy learned the hard way that the people running the finance industry are not a bunch of geniuses who worked out algorithms beyond our comprehension. The reality is that the highly paid investment bankers are the sales people of their organizations simply extracting commissions. It just so happens that small percentages on big numbers really add up. The unfortunate thing for all of us is that they are unscrupulous operators who invent a bunch of bullshit (unsecured debt derivatives anyone?) to sell people sausages at steak prices. But the fact is the money goes to the guy who ‘convinces people to pay’ not the engine room.

Great entrepreneurs are gun sales people

It doesn’t matter how great our startup is, we have to sell the idea. First to investors, then to customers – and very often, even to employees and suppliers. The hardest part about what we do as entrepreneurs is getting people on board. Selling to all the members of our supply chain. Sure, the occasional new product or service enters the market and wows the world and spreads organically, but this is the exception more than the rule. It should be our assumption that we’ll have to sell startup to everyone it touches instead.

The definition of selling has changed

When we hear the term ‘salesperson’ we imagine the someone working in a car yard, or traveling sales guy with a brief case calling on prospects, or the telephone sales cold caller. We need to change our perception of what the sales person is these days. The sales person in the 21st century is the blogger, the tweeter, youtuber, the instagramer, the public speaker, the co-working space provider – anyone who is a self publisher.  When we self publish, by definition we are building a personal brand that we hope to sell at some point in the future. It’s pretty much everyone. We’ve now entered the age of the micro entrepreneur and personal branding. And if we can’t sell ourselves, we certainly wont be able to sell anything else. We’re all sales people now.

Technology agnostic

The final human truth is that selling is technology agnostic. The sales process doesn’t care if we are selling potatoes, micro chips and iPhone apps. The process remains unchanged, even though the tools are broadening. And if we want to succeed at anything, at least financially, then we need to embrace the idea that selling is where the money is, always has been, and always will be.

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Change the currency

Posted in entrepreneurship by Steve Sammartino on June 14, 2011

I heard a great little story today about how to overcome barriers when pitching business, changing minds or influencing in general.

Changing worldviews is hard, often impossible. But there are two possible routes we can take when trying:

Route (A) We can try and change peoples view on a topic- change the unchangeable.

Route (B) We can change the currency. - This route is invariably more successful because it re-directs peoples perspective.

Car sales people do it all the time. Once the negotiation is close to reaching a stale mate on price, they then bring in the optional extras: Items removed from price. Although they do have a value, it changes the view point of the negotiation. It’s a change in currency. And the discussions can progress to a close.

When trying to reach an agreement, or change a mindset, we need to re-invent the currency of what is being discussed.

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Soundbites from the future

Posted in entrepreneurship by Steve Sammartino on April 28, 2011

A few soundbites from the future:

Leadership: It’s no longer about being king of the mountain, it’s about being center of the circle. Prof Joseph Nye author of Soft Power.

Woman will lead the 21st century, or at least a feminine social and business ethic. The 20th century was very male centric. This has flipped with the rise of social facilitation.

The 3rd world is benefiting from the mistakes of the 1st world over the past 100 years. BRIC nations especially are innovating and creating new technology platforms, while the west holds onto fossil fuel era. BRICS are investing in recycling, eco, solar and fusion and the west is resisting.

Conviviality Culture: All we really long for is socialisation. Consumption was the substitute for social recognition in a n industrialised, systematic world. Geolocating is being used as tool for us as a collective to “assemble” so we can collaborate and take back control of our destiny and conversations. Mobiles tell us where we are, and why we are there. Not being listed or ‘located’ via mobile is like not being listed in the white pages.

But, research shows that only 5% of people are “happy” when socialising on line… which tells us that it used as a substitute or preamble to actually connect physically and meet. Socialising on-line is a facilitator to actual ‘real’ connection that we want to make as humans. The proof of this is in the growth of us geo-locating each other. We need to be together.

Although we are connecting on-line, we want to tune out, log off and turn off. We aspire to not having to check our emails or update our ‘status’. It’s onerous and heavy. People in their 20’s are telling us this – not just Boomers.

The magic of the ‘live’ event is being re-born. Live is better than free on line. The free on line is the digital sampling of the event with the real connection…. It’s about being there. We’ve seen this with live footage and concerts on youtube and the growth of live streaming.

Un-Social Networking: Martin Lindstrom of Brand Sense says we are suffering a little from digital emptiness.

Meaning & Value > Volume

The above equation is something that marketers, brands and businesses need to take note of. We are no longer living in a volumetric era. Production and efficiency is being replaced very quickly by value and meaning.

We now have 2 windows to do business with:

The Retailer window and the Digital window. And people are starting to buy back time. The digital window helps us do that. Time is the asset – not ‘stuff’.

People are re-thinking why they buy. Unlike previous generations young Australians are participating in community activity, many of which do not involve any economic incentives.

Beta Attitudes (the every-preneur)

People are doing small scale, networked and highly responsive activities. They are prepared to get involved and just see what happens. The engagement and involvement is a larger part of the project than the actual outcome.

Live gatherings are occurring as an antidote to digital culture…. Or is it a manifestation of digital culture?

We are seeing micro festivals. The stadium era is over. We are more interested in a niche fringe community than a mass event. Mass media, top 40, stadium ethic and the horrible idea of the Grand Prix is out dated. The micro cohort is where it is at. Customised local and organised by ‘us’. Grand Prix is over bearing and crass – it has no fit with our emerging culture. We’ve already seen this sentiment in Melbourne.

Micro, Niche, Fringe, Bespoke, Local and Artisan are all words that we are appearing before the word ‘festival’.

Google this: Bodega party in a box

SMS Slingshot: converging the digital world with a physical interaction http://www.youtube.com/watch?v=lKEFAFP4lC4 A great way to brand events around a city which is cool, a digital crossover and temporary.

Micro Salons are starting to appear first on-line, and then in person. The art of conversation is not being lost…. It is being reborn now that media is interactive and not passive. Sure language has iterated, been redefined, shortened, coded… but the conversations are real and the more meaning and ideas are being exchanged. We are more ‘conversational’ than ever!

A punk ethic is entering business. Businesses are not asking what’s allowed – they’re just doing it. Implementing first and answering questions later…. This is a big advantage for being small. Take the example of Zingara Cucina

The beta attitude is to forget focus groups and give it a try….. and be honest about it…. Be honest about the experimental nature of what we are doing. It’s not about saying ‘this is goal of the project’ but saying that ‘doing the project is the goal’ and maybe something great will come from it…. And we’ll iterate it as we go…. We’ll invest in doing and iterating…. The digital soft economy and low barriers to entry make it possible.

There are 5 senses, and we still can’t experience 3 of them on the internet – so we must complete the connection / transaction off line…. We have to if we want to get real… and we do want to get real because we are human. But have no doubt the other 3 senses will arrive on the web.

The internet is trying to mimic the real world. GEO-locating is the juncture that makes technology connections “real”.

APP Appeal

Retailers don’t know who their customers are, or where they are or what they bought…. E-commerce retailers know all this and they have a massive advantage because of it – their advantage isn’t just in cost infrastructure it’s in rich data and information.

Australia has the highest usage and penetration of social media at an average of 7 hours a month. This is ahead of the USA, the UK and Japan. Australian retailers say their customers are not ready, but the truth is that they are not ready, or even scared.

Smart phone penetration is now 45% of handsets in Australia. The internet is in every second pocket.

Retail Future

-       We need a sense that we are experiencing something.

-       The tactile store is the future.

-       Transaction must be replaced with entertainment.

-       Event based stores.

-       Artisan values.

-       Streaming production into the store on the screen.

-       Stores must become Maisons – like some luxury brands have done.

Here’s an example – A high end fashion brand with a craftsmans store in London that live streams the craftsman in action onto a big screen in the high street store in Hong Kong.

It’s about the smell and the emotion of the store.

Can you smell the leather from the haute couture hand bags?

Does the store have an emotional footprint or large ‘sale’ signs?

The tactile store has returned and needs to be part of any seriously long term retail strategy.

Crumpler have the in store production bay behind glass where their craftsman can be viewed in action and custom made bags can be ordered, and watched being made. And Haul plan to do something even better with their upcoming ‘Town Haul’ combining food beverage and fashion.

Burberry have fashion events streamed live onto iPads they have instore so that people can purchase the ‘new’ catwalk styles before they are available.

An Acronym for the retail future is: LIVE

Live, Intimate, Visceral, Exclusive (or Event)

Pop up shops – people thought they were a fad. A cute idea in a world of heavy innovation and entrepreneurial-ism. But it turns out they are not going away. Pop up shops make sense in a world of rapid change, and BETA culture.

Component Retail – brands will start shipping product components and raw materials to stores for to be assembled on site… as part of the retail experience. The customers will become the theatre at store level and the creators by virtue of this concoction. What we’ve seen in digital…’A mashup co-creation, mass customised society’… we will inevitably see in retail…. The retailers that survive anyway. We’ll see this a lot more on shop windows:

“Build it yourself in store”

Logistics will become a hot business as we move into component and on-line retail. It’s the business we’ll all need to facilitate the commercial world we are living in. Buy shares in Fedex…. Shipping will be the biggest beneficiary of changes in the business landscape.

3D Printing & Rapid Prototyping: The ability to fabricate everything from chairs, to furniture, to surfboards, to garden tools. It’s hard to believe but new printers are being developed that can take images off the screen and replicate them into an actual size unit. They currently use a layering technique and can ‘prototype’ objects using a range of materials (plastics, carbon composites et al).

To give us just a little bit of belief the ‘fantastical statement’ above this about: Only a decade or so ago a printer was a guy name Tony in who had a little factory Ringwood. Now it’s a thing that sits on your desk that creates stuff pretty much as good as anything we can buy which is printed. Manufacturing will go the same way – into the micro solution segment.

The manufacturing industry will be evolve and provide the resources so we can create our own version of the ‘thing’.

Brand stories are best when we can choose our own adventure… Exclusive balanced with accessible.

“BETA-PRENEURS”

We are entering a world of trial and error. Where it is actually OK to fail. Betapreneurs would rather fail in action than fail by not trying. Betapreneurs transfer virtual world skills into the real world and business.

New low costs of business and access to production and information are facilitating a ‘try it and see’ culture.

A result is the new Anarconomy:

Anarconomy: An alternative economy where there are no geographic boundaries and often no tax claims. We circumvent the system. We make our own rules.

Alternative currencies are starting to appear. Facilitated by digital arbitrage… where we know the cross rates of goods and services after currency conversion and shipping. So the alternative of a global currency will emerge. Probably as a function of the gold standard (global price of gold as the trading valuation mechanism) with some form of digital instant and unseen conversion from our home currency into some quantum derived from gold. Maybe Paypal will do it for us? Or will it be Facebook credits?

Where Youth once rebelled against commerce, today’s youth embrace it. They like brands so much, that they want to build their own. They are unapologetically ‘into’ business. It’s a conspiracy between brand love and low barriers that has given birth to a new entrepreneurial spirit. Web enabled – of course. But it’s commerce on their terms.

Now days starting a new business is as simple as a mouse click and a few phone calls – Instapreneurs.

Betapreneurs are analysing insights from their jobs and converting these gaps into new businesses.  These founders are imbuing their new businesses with the values of our time. They have a willingness to ‘open source’.

It’s also worth noting that 75% of the fortune 500 companies were started during a recession. (the Kauffman Foundation) So it’s fair to imagine the GFC is going to be the foundation of tomorrows business leaders. 

Betapreneurs are steering old industries into new directions because they have no legacy infrastructure.

Artists are by passing the ‘store buyer barrier’ and going direct. The gatekeeper is evaporating, this is a good thing.

Why didn’t (don’t) retailers have personal shopping assistants? It took Betapreneurs to invent the category. Yet it could be a big point of difference for department stores and easy to generate a solid return on the employees wages. Dear Myer, pay attention.

The Sticky Institute represents zine culture in a way that culture jams the old industry due to a lack of legacy infrastructure.

We should ask ourselves this question:

Do we have Fans or Customers?

The reason brands don’t have the former, should form the initial thinking for their new strategy.

John Morefield is The 5c Architect. It’s a crazy story of just doing and then discovering where it goes. And the kicker is that he isn’t actually an Architect.

New pricing models are being invented by Betapreneurs. Like the following examples:

Lentil as anything – a vegetarian restaurant where the user decides what to pay after their meal.

Restaurants where people bid for the best tables and seats.

Prufrock coffee who created the worlds first ‘disloyalty card’. The card to encourages his clients to sample the wares of quality coffee shops around London. If a disloyalty member tries all 8, he will make you a free drink at his Prufrock Coffee. It might just help them keep Starbucks out.  It’s the community that matters more than the trader. This is the new collaborative world we are in transition towards. A community who vest their interests in each other.

The 80’s and 90’s were the great periods of so called ‘think tanks’. They are now changing into ‘Do Tanks’.  Weekend workshops were products and services are conceived, prototyped and shipped by Monday morning.  Often known as Startup Camps.

Ogilvy UK has started their new idea shop. With a social bent. From their web page it reads: Idea Shop is Ogilvy Group UK’s pop-up ad agency. We give free ideas to small and medium businesses, community projects, arts groups, charities and individuals. We’re nice like that.

Ideas are becoming big business and now they’re often outsourced to fresh minds. Possibly overnight – check out ideas while you sleep.

Brands can’t be a-political, they need to stand for something. Make a call and have a view. Eg Twitter wants to ‘To become “the pulse of the planet.”’ They’re happy to facilitate revolution in Moldova, Iran, Egypt and Libya.

We are starting to understand the bridge between the screen and the real. The two must service each other, not compete or be viewed as separate worlds.

GENERATION D (Digital)

People born after 1995 have never know life without the internet. They’re turning 16 and are soon about to drive cars, enter University, Vote in elections, drink alcohol and enter the worksforce.

We’ve been brought up in a world that was:

-       Pre internet

-       Pre mobile phone

-       Pre Google

-       Pre Social media

-       Pre Wikipedia

They haven’t. Such services and the benefits they provide are expected, benchmark, the way life “is”.

Generation D don’t care if the product is physical or digital. They will pay for stuff that is digital, if its worth the price. Contrary to what we believe the don’t expect all digital things to be free….

If our brands can’t get the latest stuff to them now, then they know who else can. We can’t define how they should shop, or they will teach us the hard way, especially in retail. For example, it’s no longer acceptable for fashion from Europe or anywhere to be a season late. Just not good enough in a connected world.

Gen D’s parents are also excited by new technology. They’re not Luddites and facilitate their kids obsession with the internet and technology.

Generation D don’t ‘network’. Rather, they play and collaborate. Their view isn’t hierarchical, it’s cooperative.

There are 4 million teenagers in Australia. Collectively they have $200 million a month to spend.

-       These teenagers spend 50 hours a week immersed in digital media.

-       65% use the internet to game once per week (boys & girls)

-       They want to be the controller (in life & games Wii / Kinect)

There are 400 million social gamers on Facebook. They want to game and be entertained.  It’s a multi-minded proposition. They can cope with it. They grew up multitasking, multi-channelling and absorbing multiple and disparate messages from every angle.

Ikea’s ‘Easy to Assemble’ sitcom is a great example of brands crossing entertainment boundaries. It’s proof that Youtube channels need to entertain and not just provide information.  It’s really funny, not surprising given it was written by actual, bone-fide comedians. Foxtel & all forms of pay TV should be scared, very scared.

My Damn Channel is great example of the ‘brand ownership shift’ – the middle man is being cut out in almost every industry.

Forget the net – launch with mobile. New parlance to keep in the top of your mind is “Share of pocket”. Our phone is an extension of our brains, our ego and our person.

Often the destination is determined for us. Who is already there, and where can we go on this budget – just like Adioso are doing.

A few words about print… well it wont disappear – just change. Particular niches will continue to pop up and be valuable because the content took time to digest and curate – like And now it’s in print. Because print culture is much different to book culture, they’ll head in different paths. It’s already started: e-books, niche prints.

People might not pay for information, but they will pay for insight. Insight is deeper and more considered. There’s not many substitutes out there for real deep insight. The problem is most people want customer to pay for their information, the problem is that much of this ‘information’ is available in millions of other places free.

People got confused about how to make money out of the internet. They thought we should be able to demand payment. They forgot about demand and supply. Supply doesn’t automatically equal demand – especially financial demand. First value must be created, then it is extracted. It’s the opposite to the previous industrial world of buying and selling. Now it’s proving, then earning.

The future is about the marriage of content and commerce – and content comes first. A nice example is net-a-porter

We’ve created a ‘check in’ culture. Already 1.5 million retailers are using foursquare for profit.

Social media will create a virtual advertising stock market of the future. A live stock exchange of media buying. By knowing where people are, knowing who they are, who they are with, what they buy and do and what they are interacting with – people will sell their attention. It will be flipped where the people opt in to certain information they are interested in. The interactions we have with specific people will be traded on-line in real time.

Some ‘C’s worth thinking about:

-       Create Content

-       Connect through issues and passion

-       Curate the world for the target audience

-       Communities must be facilitated socially

-       Competition – does your brand play games?

-       Context – think time, tone and place.

The final ingredient of the future is passion. It’s the one thing that can’t be outsourced, offshored or automated.

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Websites & The Network Effect

Posted in entrepreneurship by Steve Sammartino on April 18, 2011

I took this piece of copy directly from the 37 Signals blog. When it comes to websites, it’s what often the one thing we really need to break through. I also think it is why ‘free’ on the web just wont go away. It’s something web startups just can’t ignore.

The Network Effect: The network effect occurs when the value of a particular good or service increases for both new and existing users as more people use that good or service. It can also occur when other firms design products that compliment an existing product, thereby enhancing that product’s value. For example, the fact that there are literally millions of people using eBay is the thing that both makes eBay’s service incredibly valuable and makes it all but impossible for another company to duplicate its service.

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Famous to the family

Posted in entrepreneurship by Steve Sammartino on January 13, 2011

Seth Godin has an interesting idea of being Famous to the Family. Which is similar to my definition of cool: the stuff that matters, to the people who care.

This short interview is a 5 minute investment worth making.

Next steps:

  1. Decide who your family is.
  2. Build them stuff they really care about.
  3. Enjoy doing it enough, to be able to continue without riches.
  4. Be patient.

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An advertising lullaby

Posted in entrepreneurship by Steve Sammartino on December 29, 2010

Some more brilliance from George Carlin. For marketers and entrepreneurs alike it’s a great reminder of the value of language and how that can be used to create a benefit perception in peoples minds. Although, I’d recommend the picture we create is one of authenticity. Enjoy!

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