As a recent college graduate with no marketing sense whatsoever, way back in 1982, I heard a story on NPR about the new coffee-shop craze hitting America. The announcer described the typical venue, a selection of coffees and some light pastry fare. They were compared to a Viennese Coffee House from the turn of last century. Interesting I thought until the radio announcer mentioned the coffee was going for $0.73 per cup and, pausing for effect, no refills. I had to laugh having just left a donut shop in my neighborhood where I had a couple of donuts and three cups of coffee for total of $0.54, the refills were, of course, free.
But the joke was so on me. No one goes to a coffee shop for an economical coffee. The stuff at home is really cheap and most work places offer it at no charge. Folks go to coffee shops for the same reason they pay top dollar for alcohol at a bar, for the experience, that human need for collecting with like minded humans, to be seen, for a change of scenery.
This is an important understanding for a shop owner. Customers will pay the premium for the experience. The product is a backdrop, an excuse. The coffee or tea or beer or wine is an excuse, a focal point for the experience. The shop owner is very much like a theater owner. You as shop owner are providing a place, a reason to gather. Charge accordingly.
Charging accordingly is another point to consider. The $3.00 happy hour Guinness I had at the local Irish pub was exactly the same product as the $9.00 Guinness I had literally on the other side of the parking lot at the fancier rooftop bar. The decor appeared to cost about the same. The atmosphere, however, was way different. As an owner, you have to decide what market you're after, high margin but fewer customers are the larger market not willing to pay the premium. These two bars made their claim and both seem to be doing quite well.
As for the customer, they may head to the upscale place to meet folks in a similar economic group. They may be looking for a wealthier husband or well funded cougar. I tend to find the patrons at the $3.00 Guinness bar friendly, less pretentious and more honest than the trendier upscale place. So, I hang out there. You may feel more comfortable with Kennedy's and Bushes at the other bar. Point is, the booze is secondary to what motivates the customer. Understand this and compete accordingly.
Friday, September 27, 2013
Thursday, September 26, 2013
Fear and Motivation
I work out of a co-working space in CT where we view weekly TED talks and discuss the topic later. Great social practice and for overall entrepreneurial health. Our last one was about motivating workers. I came away with this perspective; there's no single motivating factor for any one person. But there are motivational areas to consider when attempting to motivate a person. Here's my current and sure to be expanded list.
Love & Appreciation
Who doesn't want to be recognized for what they do, for how smart they are for their individual contribution. Our discussion group pondered if this was the only motivating factor. In the end we had to concede that it might be the most motivating factor, but life, requiring cash as it does, would soon wear off the shine of appreciation. At some point, maybe not immediately, the manager will have to back his or her appreciation on a more tangible way, preferably with cash, company car, whatever, just as long as it has value to that person. And this applies to private life as well. I'll do anything for my family. But I'm rewarded a thousand-fold with love and appreciation, no matter how lame my intentions end up.
Job Satisfaction
Sure, doing what you love is great. But if it doesn't put food on the table, it's a hobby. An employee will excel at what they love and are great at. And a good manager will be keen to provide plenty of praise. But, as in the above example, that employee, without proper reimbursement, might stop liking that job so much.
Money
This may the primary motivational factor for many people. After all, with money, you can compensate like a S.O.B. for a lousy unsatisfactory job. But, if you spend most of your day at your job, most of your life not spent sleeping, even the money will look less rewarding. There's still that human quality of desire for the above two items. I can honestly say that after 41 years of working, I've never met anyone who was satisfied with only the cash. This might be because no one has ever made a bucket unless they have the other needs satisfied. Money tends to follow folks who love the way they make it.
Fear
This is the saddest of all motivational factors. Fear of rejection, fear of loss of respect, loss of money and country club status. It's related to the above motivations, but from a different perspective. People who are motivated by fear are motivated from a position of having made it and are afraid of losing it. Its real difference is in its motivational power.
By example, I recall having this fear as an oil industry micro-paleontological consultant. I expressed a fear to my new wife that if things didn't improve, we might lose our big house on Lake Pontchartrain in New Orleans. She was busy with a cross word puzzle or something equally important and simply said, "so we'll get a smaller house" and continued with her greater word choice concern. My motivation turned from fear of loss to desire to provide for her... a much more motivating factor.
Bottom line, motivation is a complicated thing for we complicated humans. All the factors mentioned above apply in different degrees depending on the individual and their personal history. A good manager will learn what he can of the person and apply techniques as needed. The best managers will do this not for productivity's sake, but as fellow human being caring for another. THJIS approach is, in my humble opinion, the one most likely to generate the greatest results.
Love & Appreciation
Who doesn't want to be recognized for what they do, for how smart they are for their individual contribution. Our discussion group pondered if this was the only motivating factor. In the end we had to concede that it might be the most motivating factor, but life, requiring cash as it does, would soon wear off the shine of appreciation. At some point, maybe not immediately, the manager will have to back his or her appreciation on a more tangible way, preferably with cash, company car, whatever, just as long as it has value to that person. And this applies to private life as well. I'll do anything for my family. But I'm rewarded a thousand-fold with love and appreciation, no matter how lame my intentions end up.
Job Satisfaction
Sure, doing what you love is great. But if it doesn't put food on the table, it's a hobby. An employee will excel at what they love and are great at. And a good manager will be keen to provide plenty of praise. But, as in the above example, that employee, without proper reimbursement, might stop liking that job so much.
Money
This may the primary motivational factor for many people. After all, with money, you can compensate like a S.O.B. for a lousy unsatisfactory job. But, if you spend most of your day at your job, most of your life not spent sleeping, even the money will look less rewarding. There's still that human quality of desire for the above two items. I can honestly say that after 41 years of working, I've never met anyone who was satisfied with only the cash. This might be because no one has ever made a bucket unless they have the other needs satisfied. Money tends to follow folks who love the way they make it.
Fear
This is the saddest of all motivational factors. Fear of rejection, fear of loss of respect, loss of money and country club status. It's related to the above motivations, but from a different perspective. People who are motivated by fear are motivated from a position of having made it and are afraid of losing it. Its real difference is in its motivational power.
By example, I recall having this fear as an oil industry micro-paleontological consultant. I expressed a fear to my new wife that if things didn't improve, we might lose our big house on Lake Pontchartrain in New Orleans. She was busy with a cross word puzzle or something equally important and simply said, "so we'll get a smaller house" and continued with her greater word choice concern. My motivation turned from fear of loss to desire to provide for her... a much more motivating factor.
Bottom line, motivation is a complicated thing for we complicated humans. All the factors mentioned above apply in different degrees depending on the individual and their personal history. A good manager will learn what he can of the person and apply techniques as needed. The best managers will do this not for productivity's sake, but as fellow human being caring for another. THJIS approach is, in my humble opinion, the one most likely to generate the greatest results.
Monday, September 16, 2013
The Advantage of Being Flat Broke in Entrepreneurialism
Let’s start with the advantages of having a ton of resources at your disposal. Wouldn’t it be great to have a cool office, a secretary, the best equipment available and a salary to keep you going? Think of how you could get things done. Sweet, huh?
Maybe, but that luxury comes with a price in the entrepreneurial world. Salaried, well-funded blokes and dames aren’t forced to bootstrap. That means they aren’t forced to build a very efficient business. They tend to keep everything close to the vest and rarely seek valuable collaborators that can further a businesses efficiencies and add value through their unique perspectives. And with a desperation-mitigating salary, they tend to leave work earlier and lunch longer.
Another issue is focus. Broke blokes and dames can’t afford to lose it. They don’t chase after anything outside of greatest potential. They can’t afford to.
I’m reminded of my geology teacher/ successful oil man professor who told his students that if they want a good job, go for the master’s in geology degree. Downside to that, he added, was that the employer would pay them just enough to avoid risk. Start working with a BS in geology and you’ll be happy to, maybe even forced to seek revenue anywhere you can. His most successful students did just that.
Having said that, money is needed at some point. But dough seems to follow the aggressive, lean, well organized, well-networked businesses. If you need $3 million to market your business, make sure your business can get it and demonstrate that it has the organization to spend it wisely, effectively. The broke entrepreneur is great at building this type of fundable business. Demonstrating this ability is part of the lean startup DNA.
Saturday, August 3, 2013
Paying Your Dues
If you're under 30, you no doubt have heard this a few times in your career. I did as a young paleontologist and I bristled every time I heard it. At 54, I have to admit that there is a lo to be said for experience. But I try never to use that damned expression. And for all you young whipper snappers out there, I'd like to say, "YOU DON'T HAVE TO PAY YOUR DUES!" Not if you lower the testosterone level, cut the caffeine consumption and simply ask the older workers around you what they think. They paid the dues for you, if you're smart enough to tap into that. They've made the journey, know the paths and where the mines are laid.
For you older guys and gals out there, listen to the younger guys. Don't be intimidated by the new information or technology they bring to the table. They came to you for a reason. Let your long hard time in the industry help channel those young high energy efforts. Support them, don't pound them into the pavement to cover your fear of having to learn a new tool. After all, you may not have to learn anything. You just have to supplement what's new with your hard earned experience. Lean on each other.
What's critical is that young energy armed with new technology and seasoned older workers recognize the talents of each and connect. Folks, old and young, who can do that are a rare subset. Work hard to find each other.
For you older guys and gals out there, listen to the younger guys. Don't be intimidated by the new information or technology they bring to the table. They came to you for a reason. Let your long hard time in the industry help channel those young high energy efforts. Support them, don't pound them into the pavement to cover your fear of having to learn a new tool. After all, you may not have to learn anything. You just have to supplement what's new with your hard earned experience. Lean on each other.
What's critical is that young energy armed with new technology and seasoned older workers recognize the talents of each and connect. Folks, old and young, who can do that are a rare subset. Work hard to find each other.
Wednesday, June 12, 2013
Communications Revolution is About to Happen
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| https://en.wikipedia.org/wiki/File: Alexander_Graham_Telephone_in_Newyork.jpg |
The communications device market is about to enter a revolutionary stage. Samsung is singing the blues and Apple is falling flat on their latest devices.
Not that each doesn't make really cool little devices, they just happen to be in a more mature phase of the product life cycle. Too much competition will slow sales and lower profit margins. There's no way around it.
For Apple, this was an opportunity. But post Jobs, is there a "next best thing" in the labs? The good news is that a couple of kids in a garage are working on the next big thing. And it won't be an incremental enhancement that ships form that garage. It will be amazing, a device that most of us haven't thought of or couldn't. Alternately, those kids might have access to a university lab and are implanting chips in unfortunate rats or clipping on earrings that talk to their brains. Or maybe a little of both is going on from here to Romania. Maybe Samsung or Apple will notice and make an acquisition. Either way, we all win and the economy restarts... until the tax man stalls it again.
Monday, June 10, 2013
10 tips for Making Small Talk and Networking
Your business, especially if it's a consulting business, is totally dependent on your personal skills. If you're a likable person, you're way ahead of the game. Unfortunately, even the nicest and most interesting folks in the game are terrible at socializing in business events. Here are some rules I've developed over my 30 years of consulting.
1. Don't sell anything unless asked to. You're there to socialize and sell folks on how nice, clean, well-mannered and interesting you are. If you pass this test, you'll be asked what you do and maybe, later, asked for a more formal pitch. So save the elevator pitch until after you've impressed them with swell-ness and are asked for it.
2. For heaven's sake, don't play the totally cool thing and show up in shorts and a t-shirt. That may go very well with some, but for others, it's a deal breaker. Don't risk it. No one ever said they'd rather not call the well-dressed, manicured and neat guy or gal.
3. Turn off the cell phone and put the damned thing away. You're not in middle school, you're there to socialize. Picking up a cell phone and texting or reading a text pretty much tells the person you're talking to that what you have in your palm is more important than they are.
4. Do ask everyone what they do, where they live or anything else that can create a connection or some common ground upon which conversation can be built. Compliment a watch or tie. It might have a story attached.
5. Be honest and humble. If you're there alone and see someone else standing alone, march right over and introduce yourself. Start with something like, "I saw you standing alone, as I was, and thought I should introduce myself." If you're nervous in that kind of setting, tell them. They'll warm right up.
6. Make it easy to be found. Have plenty of business cards to hand out.
7. Dress in business attire - See items #2 and #7. Check a mirror before leaving the house/office and every time you hit the restroom.
8. Offer to help anyone you can with no expectations of returns. They will come.
1. Don't sell anything unless asked to. You're there to socialize and sell folks on how nice, clean, well-mannered and interesting you are. If you pass this test, you'll be asked what you do and maybe, later, asked for a more formal pitch. So save the elevator pitch until after you've impressed them with swell-ness and are asked for it.
2. For heaven's sake, don't play the totally cool thing and show up in shorts and a t-shirt. That may go very well with some, but for others, it's a deal breaker. Don't risk it. No one ever said they'd rather not call the well-dressed, manicured and neat guy or gal.
3. Turn off the cell phone and put the damned thing away. You're not in middle school, you're there to socialize. Picking up a cell phone and texting or reading a text pretty much tells the person you're talking to that what you have in your palm is more important than they are.
4. Do ask everyone what they do, where they live or anything else that can create a connection or some common ground upon which conversation can be built. Compliment a watch or tie. It might have a story attached.
5. Be honest and humble. If you're there alone and see someone else standing alone, march right over and introduce yourself. Start with something like, "I saw you standing alone, as I was, and thought I should introduce myself." If you're nervous in that kind of setting, tell them. They'll warm right up.
6. Make it easy to be found. Have plenty of business cards to hand out.
7. Dress in business attire - See items #2 and #7. Check a mirror before leaving the house/office and every time you hit the restroom.
8. Offer to help anyone you can with no expectations of returns. They will come.
Friday, June 7, 2013
Revenue Projection
When developing a pro forma, revenue projections are critical. Investors will look here first to determine if the business has merit and if the entrepreneur knows the market. After all, this is why they invest, to get that revenue. Unfortunately, most entrepreneurs I've met believe this figure is mostly guess work and many simply use industry growth rates for their projections. As a specialty of mine, I'd like to offer some pointers using an example.
1. Never rely solely on market performance. This number is an industry average and doesn't reflect those lean, hard, and almost always unprofitable first few years of many individual companies within that average.
2. Do use performance records from individual companies that are most like yours. If you're selling a new soft drink, don't use coca-coal as a comparable. Look for a startup like yours and justify how your business is like that one based on location, market segment, marketing and business strategy.
3. Get that information. If the business has gone public, their financial performance is public record. But chances are it won't be. Your closest competitor is probably a privately run company with performance records safely stored in hidden cabinets locked in hidden rooms on uncharted Islands. Here's where it gets fun. Pull out your spy glass and go full Sherlock on these guys. Here's an example for one I pulled:
A company that paces interns with companies became a media darling recently, partly because it is run by two very smart, young, and attractive females. And as such they were interviewed regularly on business and non-business related network programs. The founders, of course, took full advantage of the spotlight to highlight their business success. I read and viewed every interview they gave and was able to plot several dates at which the founders claimed they had doubled their revenue. A final interview revealed revenue in hard numbers for a specific date. I was able to use the doubling dates to work backwards from the hard number to create a revenue profile for their full three years of business. The figures worked forward and backwards indicating they were telling the truth. I was able to use this profile to estimate revenue growth in terms of percentage for a client in a similar business.
Industry analysis is important to understand. How your competitors fared is even more important for projecting revenue.
1. Never rely solely on market performance. This number is an industry average and doesn't reflect those lean, hard, and almost always unprofitable first few years of many individual companies within that average.
2. Do use performance records from individual companies that are most like yours. If you're selling a new soft drink, don't use coca-coal as a comparable. Look for a startup like yours and justify how your business is like that one based on location, market segment, marketing and business strategy.
3. Get that information. If the business has gone public, their financial performance is public record. But chances are it won't be. Your closest competitor is probably a privately run company with performance records safely stored in hidden cabinets locked in hidden rooms on uncharted Islands. Here's where it gets fun. Pull out your spy glass and go full Sherlock on these guys. Here's an example for one I pulled:
A company that paces interns with companies became a media darling recently, partly because it is run by two very smart, young, and attractive females. And as such they were interviewed regularly on business and non-business related network programs. The founders, of course, took full advantage of the spotlight to highlight their business success. I read and viewed every interview they gave and was able to plot several dates at which the founders claimed they had doubled their revenue. A final interview revealed revenue in hard numbers for a specific date. I was able to use the doubling dates to work backwards from the hard number to create a revenue profile for their full three years of business. The figures worked forward and backwards indicating they were telling the truth. I was able to use this profile to estimate revenue growth in terms of percentage for a client in a similar business.
Industry analysis is important to understand. How your competitors fared is even more important for projecting revenue.
Strategic Learning Tool from Chris Fox
Discovered this really cool strategy development tool from UK based Strategy Business Consultant Chris Fox. It's a nifty little plug in the data and the tool generates the proper graphics. His blog has a lot of articles about what to do with the data you've generated.
It's a great tool to have handy when moving through the Entrepreneurial Sequence chart.
Chris and I are both part of the Strategy Consultants Community on google+. If you're a business or marketing strategy consultant, join us there for discussion.
It's a great tool to have handy when moving through the Entrepreneurial Sequence chart.
Chris and I are both part of the Strategy Consultants Community on google+. If you're a business or marketing strategy consultant, join us there for discussion.
Saturday, May 4, 2013
Is Your Consultant Working For You Or The Real Customer?
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| Source: Wikipedia* |
Granted, this was a government run institution. Not a lot of accountability there. But this experience has implication for the real world. Consultants are a tremendous asset to many ventures. They bring specialized experience and spread the cost of doing business in their specific fileds. But hiring one doesn't mean you've handed off that part of the job. Like any employee, they have to be monitored and trained to represent your business. They may consider you the customer and your customer a nuisance. NEVER allow any outside firm to act as a wall between you and the customer. They should instead act a cog in your business's customer centric machine. It would serve you, the founder, well to act as a customer and test your employees AND your consultants. Call your call center or tech support line and visit your retail establishment. I'm pretty sure Ray Kroc bought a burger or two at McDonald's.
* http://en.wikipedia.org/wiki/File:Interior_view_Pantigo_Windmill_East_Hampton_Suffolk_County_New_York.jpg
Monday, April 29, 2013
Six Years Now Makes A Generation
This video is essential when considering marketing and strategy for next few decades. Very much worth a look.
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