Thursday, April 29, 2010

Principles of Business: How Temperance helps build companies.

Following my Benjamin Franklin post a while ago, I set out to try to practice the Principle of Temperance.  What I discovered is that this important value can also help guide a business on the path to "mutual success".

  • TEMPERANCE. Eat not to dullness; drink not to elevation

For me as an individual, I've always had a problem with "eating to dullness"...  funny way that Benjamin put it... because if you do overeat, you do feel dull, slow, and lethargic.  My new years resolution was to "eat no seconds", but my firsts are too big to begin with.  While I did better this week, I did not do great.  I'll need to keep working on this.

For a company though, Temperance has a different meaning.. I'd call it this:

  •  TEMPERANCE. Exploit not your customers; Starve not your suppliers

This week, following this guideline for business, I had some GREAT successes...

  1. I struck upon a brilliant way to charge "fairly" for Karmaback... why not charge per fan/follower we bring?!  (Thanks Suzanne, UT MBA 04 for the inspiration)
  2. I decided that "Karmaback users" are the "suppliers" for our business.. and we MUST not starve them.
  3. In my consulting business, I decided to continue offering my "start-up/small business" discounted rates.

All in all, a good week for business Temperance... now I just need work on that other kind of Temperance (food & drink, begone)!

Wednesday, April 28, 2010

Why founders make better CEOs.

My own opinion is sort-of irrelevant.

The numbers speak for themselves:

"First, the University of Pennsylvania’s Wharton School of Business just published an analysis of recent exits for high technology companies such as BlackBoard, BladeLogic, Concur, Danger, Liveperson, LogMeIn, and Netsuite. Looking across these nearly 50 companies, the study finds that founding CEOs consistently beat the professional CEOs on a broad range of metrics ranging from capital efficiency (amount of funding raised), time to exit, exit valuations, and return on investment.
Second, for folks keeping score at home, this phenomenon appears to extend beyond high-technology companies. Felix Salmon, for instance, points out that Fortune’s editorial staff considered twelve other candidates including Warren Buffett, Carlos Slim, and Martha Stewart before naming Steve Jobs the best CEO of the decade in November 2009. Salmon points out that “not a single one of the 12 [candidates] is a CEO who was hired to run a company by its board of directors.”
There are certainly exceptions to this rule, most notably Google and Cisco (I will address both exceptions later in this post), but the evidence is one-sided and overwhelming."

Tuesday, April 20, 2010

How to Build a Marketing Plan

I've scoured the internet for a nice, simple, method for how to build a Marketing Plan, and all I find is very short, confusing, unorganized stuff (and very little of that).  So, without further ado, my 10 steps for building an "AWARD WINNING" Marketing Plan.

  1. Learn what the heck Marketing is in the first place.  (See my blog on my topic here.... my 5 year old son could figure it out... so can you).
  2. Research your 5-Cs. Customer, Company, Competition, Collaboration, Context
    1. This can be done fairly easily with some Google searching or industry related press reading.
    2. I find doing it in order is the best..
    3. Just jot down as many notes as you can for each section.
    4. Below is the goal you are trying to reach for each C
  3. Customer - Write down WHO is your ZEBRA (Ideal) customer.. then expand that view just enough to encompass a market that is of a "small, but big enough" size.  The goal here is to choose a FOCUSED group of people who you can clearly identify... NOT make it the biggest set of people possible (that's for Business Plans, not Marketing Plans).
  4. Company - Write down what are your companies strengths, weaknesses, vision, and values.  (This will help in the rest of the plan).
  5. Competition - Write down a list of competitors and note their "pricing" and their "differentiation" claims.  SPEND LOTS OF TIME HERE.  It's worth it later.
  6. Context - Write down trends in society, business, culture, and geography that MAY (or may not) cause you PROBLEMS or create OPPORTUNITIES.
  7. Now, write down your 4 Ps - Product, Place, Price, Promotion.  First up: Product.
    1. To get Product right (for Marketing purposes), it must fit in the following Sentences:
    2. ACME (YOUR COMPANY/PRODUCT/BRAND) is a _______  that does ____________ for ________.
    3. UNLIKE OTHER _______ we do _________________________.
    4. Now list 3 Benefits. ( NO MORE )
    5. Now list 3 Features. ( NO MORE )
    6. If you can get this focused with your product, you're ready for the next step.
    7. NOTE: If you have engineers/tech people, don't invite them to help with this section... do it yourself (or have someone do it for you)... then correct as needed.
  8. Place - Where do you plan to sell?  What is your selling motion?
  9. Price - How much will you charge?  What is the upsell path (or options)?  What is the average lifetime value of a customer?  How does all this compare to the competition?
  10. Promotion - NOTICE, I am last here... many people think a "Marketing Plan" is just this section... (the Advertising, PR, etc.)... but it is not.  This is important, but not the MOST important.  To me, the first C is most important (Customer) Followed by the first P (Product).  Anyways, here's promotion:
    1. How much can you spend to acquire a customer? (see average lifetime value for hints)
    2. How many customers do you want to acquire in a period? (therefor, that is your budget)
    3. What "Free-ish" marketing can you do? (PR, Social Media, SEO, other)?  How can you measure its effectiveness?
    4. What "Cheap-ish" marketing can you do? (SEM, Google Adwords, Google Adsense, CMP, CPC, CPA)?  How can you measure its effectiveness?
    5. What "Expensive, but hopefully measurable" marketing can you do? (Partner/Reseller Marketing, Paid Banners, Trade Shows, Events, etc.)? How can you measure its effectiveness?
    6. What "Brand building" MUST you do? (non-measurable stuff like TV, Print, Billboards, etc.).?
    7. Now, allocate budget from 2-6... where you don't spend 1c on the next item, till you've spent all you can (reasonably & scalable) spend on the prior number.  MOST COMPANIES SHOULD NEVER GET PAST 4.  (at least not in the early days).
Hope this was helpful!  

Comments and Arguments and Links are always MORE than welcome.

Monday, April 19, 2010

Benjamin Franklin & Finding "Character" in modern society.

Character & values (principles) are old fashioned.  Even modern day self help books (some that I love, including The 7 Habits of highly effective people) barely touch on the subject.  They say it is lacking, but cannot name the principles & values and what they are... let alone how to improve them.  What is equally missing is any true role models of values who not only live by their values and do business by them, but also who have been successful beyond measure.  One such character in history has done so, and his great example is more than inspiring: Benjamin Franklin, whose amazing autobiography lays out not only a definition of the values and character that are essential to success, but how to improve them and succeed at business along the way!

Here are his 13 values (from his Autobiography)

1. TEMPERANCE. Eat not to dullness; drink not to elevation.
2. SILENCE. Speak not but what may benefit others or yourself; avoid trifling conversation.
3. ORDER. Let all your things have their places; let each part of your business have its time.
4. RESOLUTION. Resolve to perform what you ought; perform without fail what you resolve.
5. FRUGALITY. Make no expense but to do good to others or yourself; i.e., waste nothing.
6. INDUSTRY. Lose no time; be always employ'd in something useful; cut off all unnecessary actions.
7. SINCERITY. Use no hurtful deceit; think innocently and justly, and, if you speak, speak accordingly.
8. JUSTICE. Wrong none by doing injuries, or omitting the benefits that are your duty.
9. MODERATION. Avoid extreams; forbear resenting injuries so much as you think they deserve.
10. CLEANLINESS. Tolerate no uncleanliness in body, cloaths, or habitation.
11.TRANQUILLITY. Be not disturbed at trifles, or at accidents common or unavoidable.
12. CHASTITY. Rarely use venery but for health or offspring, never to dulness, weakness, or the injury of your own or another's peace or reputation.
13. HUMILITY. Imitate Jesus and Socrates.

In my opinion all 13 are of high value, but in business, Frugality, Industry, Resolution, Order, and Sincerity are of the highest Importance.  It's not enough to agree.  You have to practice every day.

#13 (Humility) is one of the hardest to follow in our society today.... I'll save it for last.

In the mean-time, I'll track my weekly progress, successes and failures, as I focus on practicing 1 of the above values, in turn, just as Benjamin Franklin did over 200 years ago.

Thursday, April 8, 2010

Measuring Success... of Social Network Marketing.

It is a slippery slope to define success in relation to others.  The problem there is, there are always 'others' more successful.  The better way is to measure ones success vs. ones STATED goals.  This is true in business as in life.

Companies struggle to measure "Social Marketing" success, because they have no clear goal.  Most Marketers are happy to just get increased web traffic.  This stems from the assumption that revenue can't be tied to social marketing.  My new company, Karmaback, can definitely fill the gap in measurement AND deliver revenue directly tied to social marketing.  This feature, however, is irrelevant... because marketers don't have this as a goal (yet).  

Instead, we at Karmaback have decided to focus (for now) on the goals that marketers do set: more fan growth (Facebook & Twitter), and more site traffic.  We'll keep preaching that revenue should be the goal, but until our customers realize it is possible, we'll deliver results they "think" they want.

Monday, April 5, 2010

The excitement of the close.

"So, is everything in order," you ask, heart pounding in your chest?  "Yep, we are good to go," you hear like musical echos in your ears.  "Okay, just shoot us the PO and we'll be rocking and rolling," you reply almost out of breath.  "On its way," you hear.

The PO is on it's way.  Music to the sales-man ears.  So, how did you get here?  What did it take to 'slay' this close?  Why all the excitement?  The reason is simple: it is hard to sell somebody something.  It takes time, patience, confidence, and most importantly persistence.  In many cases, the transaction is directly tied to your compensation.  I argue, its not the paycheck that has your heart-rate up... it's the possibility of failure and the relief of success.

Here are some tips from my recent professional career (VP Sales & Business Development for a very cool Headphone Company):
1. Don't push, make sure everything is in order instead.
2. Be sure everyone involved is "sold" on the need for your product/service...  Hint: it should start with: You need us because we are X which is different than Y, and we both agreed will help you to do Z.
3. Begin with understanding.  Start by learning your customers needs, wants, and desires... if this is a reseller, put yourself in the resellers shoes... they want to look good right?  help them.
4. Don't compromise for the sale.  Even if you have carte-blanch to do what is best... set some parameters for  what is fair and stick to it!
5. Be open about the margins.  Anyone can figure out how much it costs to make something... be open about the margins you need and the margins you are willing to share/extend... a little research helps a lot here.
6. During the close.. remember to breathe!
7. Don't announce the close till you get the PO!  (SOOOOO tempting)
8. Your fear of failure is real.  Acknowledge it and focus on the consequences of a lost account today... it's probably NOT the end of the world like your heart is telling you.

Now, go out there and close!
Make no compromise.
Get it done!

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