Seek YOUNG Investors

Had an interesting conversation with Jennifer, an acquaintance and fundraiser for a large non-profit. She really liked my approach to business strategy development and thought my project portfolio was interesting. She also had some really interesting isights into funding new ventures - go after young technology-based employees. Fascinating approach that she backed up with a story about an investment her son made in Silicon Valley that I had to write about. But first some history.

In the early days of coffee shops, that soon became teashops, a small cafe in a shipping district of London noticed they had a lot of ship's captains seeking insurance that drew a lot of insurance agents into the shop. Being a good marketer, the owner of the coffee shop began posting a list of ships, cargos, and captains, along with insurance needs on his wall. Business boomed and he noticed a need for a third party to negotiate the contracts and the waiters quickly became skilled brokers. Coffee and tea soon became a distraction to the real business, insurance brokerage. Today, when visiting Lloyd's of London, you still meet with a waiter and not a broker.

Back to our story, Jennifer described how young, unattached and over-paid developers would congregate at coffee shops in the valley where they invariably would discuss new ventures they were working on or heard of and, of course, the cash requirements to launch. The owners almost daily noticed tens of thousands of dollars being pooled for exciting ventures. Like Mr Lloyd nearly three hundred years earlier, the coffee shop owners began to invest and broker deals and opened two additional shops for that purpose. Jennifer's son invested in the second shop. The owners didn't need an investor for the third shop.

Lesson for entrepreneurs everywhere:

1. Move to Cali
2. Pitch young folks who know other young folks that can pool resources. These folks are capable of dropping a few bucks without sacrifice and tend to be more future focused than older folks. They'll invest in a deal that might take a decade to make them uber rich. 3. Young tech savvy investors can contribute to your business and are super connected marketers

Older Entrepreneurs in America

"15 there's still time for you, time to buy and time to lose" are haunting lyrics from the song "100 years" by Five for Fighting. And so applicable to the entrepreneurial world and life in general. Time to lose means time to recover.  And in America, any financial disaster is survivable with enough time. But how much time is enough. Surprisingly little I've discovered.

At 25, working as an oil industry paleontologist, I was offered a chance to invest in an oil well that a geology school buddy and wildcatter was drilling. It was only $7,000 for a potential 12 feet of pay and substantial returns. I looked over the science and invested immediately. A few days later, the well not only hit the 12 feet, but another 20 feet in addition. I was buying a house with that $7,000 investment! The next morning, unfortunately, my buddy called with the bad news. The well was tight, that is the oil couldn't be recovered and I lost my investment.

No big deal, I was young, earning cash, and had no dependents or heavy debts of any kind. I asked my buddy to let me know if another play came available. I had time to not only recover, but do it again.

Fast forward to August 28th, 2005 at age 45. After shuttering my paleontological consulting firm, due to an industry downturn, I had just literally shuttered my new tea and spice business, profitable after only 12 months in business, preparing to weather Hurricane Katrina. Twenty four hours later, I was ruined, like the city. What was I to do, aged 45. Did I have time to lose at this age.

Turns out I did. I reapplied my small business expertise, my consulting expertise and knowledge of species competition into a business strategy consulting firm that focused on competitive analysis.  It wasn't easy. There was a bankruptcy and a MS degree in Technology Commercialization earned along the way. But, unlike in many other nations, I wasn't punished for failing and recovered. And I'm looking forward to my next endeavor that launches next Spring and promises to earn me a bundle - again.

Critical at any age, is understanding the entrepreneurial process to avoid wasting time and money. GJC Business Strategy Consulting is dedicated to helping you successfully navigate through your next venture - at any age.

Startups Need Collaborators Not Capital

Creating a business plan to raise capital is a great growth strategy for a new and expanding business. But it's nearly impossible for a startup. Its just too risky an investment for traditional cash investors. A much better strategy is a collaboration with a partner who could benefit from your business and will eliminate or greatly reduce your need for cash.

Artists, for example, have placed their work in cafes to eliminate the cost of a private gallery. The cafes get zero cost decorations. If it's a good collaboration, the art will coordinate with the cafes branding. And by splitting profits of sale of the artwork, both parties benefits both.

This same sort of collaboration can apply to any industry. In fact, a business strategy, especially for cash strapped startups, should include the potential for a collaborator in the planning phase. Take the milk substitute "Silk". A lawsuit filed by the milk industry because of the similar name ended with a collaboration that had the milk industry acting as distributors for "Silk". The agreement not only saved the manufacturers of "Silk" the cost of establishing a distribution infrastructure but also provided a large established network for the product. Everyone won.

Lesson here is to consider all channels in your business from manufacture to retail distribution. Do you see any opportunities for your business and another? Do you have a unique skill or product that can compliment another business? Can you increase THEIR bottom line while reducing your costs or increasing your profits? And, critically, considering this before launching can guide your business strategy, including pricing, identifying the market segment to target, and identifying managerial systems to develop. The end result for the startup is faster market entry, more efficient operations and enhanced profits without a large cash expenditure.

Competitor Analysis

If you don't think you need a competitor analysis, you probably don't know what one is. Or maybe you've been burned by one of those pseudo-analyses that creates a list of businesses that will compete with you. A competitor analysis is essential to the development of any business. In the name of brevity, let's list a few reasons why:

1. A competitor is not only Brand X, but, as detailed by Michael Porter of harvard, also a force such as buyer power, supplier power, potential for a cheaper replacement for your product, or a host of obstacles a new business will face due to scale, customer perception and so many more. Every new venture should work through these forces with a trained business strategist using Porter's 5 Competitive Forces Analysis. A simple PESTLE (political, economic, societal, Technological, Legal and Economic) analysis can identify other forces that might work with or against you. You don't want to develop a product that society won't buy (bell bottom jeans), the government won't let you sell (Marijuana), or can't be built (Steve Jobs waited for technology to catch up with his ipad concept).

2. A competitor analysis helps to identify core competencies and how they stack up against the competitors. This is crucial in finding your unique selling point, positioning your product and in identifying where your business needs help.

3. Related to the above, a competitor analysis can help identify potential collaborators. You may be able to position your new product to complement an potential competitor's or provide them with a new market. The lawsuit against SILK by the Milk industry ended when SILK agreed to have Milk wholesalers provide and profit from distribution of SILLK products.

4. A competitor analysis helps narrow down customer segment identification to enhance marketing and pricing strategies. Your competitors might be selling a similar or even better product, but have failed to identify the actual buyer. Is it mom or the teen aged daughter? Knowing this can really provide a leg up on the competition.

5. Most important, all of this will allow a business to craft a totally aligned and connected business strategy that can compete and identify Key Performance indicators that allow for enhanced reactive business management strategies.

These are key components of a competitive business strategy. Be sure to utilize the services of a non-prejudiced business strategist. It's easy to gloss over deficiencies in our children and our businesses. GJC Consulting can provide these services as a brief overview that will provide the entrepreneur with what he or she needs to perform the analysis alone or create the analysis and strategy for you. Operators standing by....