The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It
Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant
The Know-It-All: One Man’s Humble Quest to Become the Smartest Person in the World
Big Picture: It is always interesting to me to see how founders think about their companies. Sergey Brin, co-founder of Google, writes this annual report. And while we are on the subject of Google, Jim Spanfeller, CEO of Forbes.com, wrote a scathing indictment of Google and their role in the demise of the publishing business. A much more fun read is the response by Danny Sullivan at SearchEngineLand in a point-counterpoint post.
Innovation: Scott Adams of Dilbert fame talks about information flow using a time based methodology. He envisions a world where our calendars will become much more intelligent, personal and useful. I like this vision of the future.
Ideas: If you have never seen Seth Godin speak, you now have the opportunity to view this talk on Tribes from the 2009 TED Conference. And for a little historical Seth, here is his riff on Purple Cows from 2003.
I have been a business plan competition judge for a few years now. Not as glamorous as the Miss America contest and not as tasty as a BBQ Competition judge, but fun all the same. I really enjoy feeling the energy that comes through from the entrepreneurs in their ideas. As part of my role, I have the opportunity to read a lot of business plans and watch some presentations to panels. I have also had the ability to see how groups of judges make decisions, as we all have our own points of view that must be aligned before determining the placing of the contestants.
A few lessons from the judge’s table (in no particular order):
Make your projections reasonable, meaningful and achievable. So many of the plans show either Year 3 earnings of $100 million or $200 thousand. Investors don’t believe the former and don’t bother with the latter. In any case, make it easy for the judge to vote for you. Make sure that your financial tables foot, are right justified, have thousands separators, are complete and are rotated to allow for easy readability on the screen without printing it out. Take the opportunity to explain all assumptions that you make while determining your financials. Don’t assume that every month will be the same. Is there seasonality? Will month 1 really be the same as month12? Include every expense that you can think of and make sure that the expenses that are outlined in the text portion are considered in the financial plan.
Detail your marketing plans beyond “advertising and trade shows”. Our world is changing faster than ever. Don’t bet only on the same old strategies that our parents might have used.Try to stay away from discounting and couponing in the initial years. You might have to resort to that if the economy goes south, but it probably is not a good strategy right out of the box.
Beware of planning your long term growth strategy on existing tools. Will Twitter or Facebook look the same in 5 years? Will it look the same in 1 year?
Sample, if you possibly can. Let the judges (or angels, private equity folks, friends and family et. al.) touch, smell, see and taste your product. Do a demo, if it is software, even in there is nothing behind the demo. Don’t lie and tell folks that there is, just show them what you can. In the last competition, one company had clothing, but did not let the judges feel or interact with the interesting material. Another concept was a restaurant, where the chef came out and cooked for the audience. Hearing the garlic sizzle in the fry pan and then smell the just cooked foods, made a huge difference in their presentation.
Leave the arrogance at home. Try to answer the direct questions as clearly as possible without signs of impatience or omnipotence. Take a deep breath before answering, gather your thoughts and give the best answer you can, which might be “I don’t know, but I will find out and get back to you.”. The judges don’t know your business as well as you do, but also, remember that they may be looking at it from a new angle that can provide insights to you.
Make sure to have people proofread and edit your submission. You may be the best interior designer in the world, but if your financial page is wrong or your marketing plan is half-baked, it is better to know and correct before the big day.
Presentation skills count. Think about how the presentation should flow. If you have 3 founders, it is difficult to follow when each of you does one slide at a time. Don’t read from your slides. Your slides should guide your talk, not take the place of it. See what Seth Godin has to say about presentations. If you can add a video to break up your presentation, do so. Practice, practice, practice. If you practice enough, you will not be nervous at the time of the big show. Know how long it takes to give the presentation. Use cue cards to make sure that you convey the right ideas for each slide – bullet points, not complete sentences. Important – do not read your presentation from the cue cards.
Even if you are not entering a business plan competition, these are all good rules to think about when making a critical presentation. It could be for an internal project approval at a large company or for venture financing. You are the best sales person for your idea. A great presentation will get you further along towards getting that approval than anything else.
Networks: Kevin Kelly wrote a book called New Rules for a New Economy in 1998. He has reprinted them as a series of blog posts and they are more relevant today than when they were first published. A recent post talks about the mathematics of networks. Don’t be scared. The math is not difficult but the results are critical to our understanding of social networking.
Video: If you ever get the chance to see Seth Godin in person, do so. If you can’t find the opportunity or want to see what I mean, check out this video from 3 years ago.
Entrepreneurship: Raman Chadha, from DePaul’s Coleman Center for Entrepreneurship writes a great article on venture funding. I have long had the same kind of thoughts on entrepreneurship and whether angel or venture funding is right for even a small percentage of start-up ventures.
Business: Seth Godin put together a good resource page to help those of us who are graphically challenged find our way in the world.
Economy: Normally, I wouldn’t take Penn Jillette’s economic advice, but he does have some good points about skidding and crashing and hoping that our leaders know the difference.
Fun: As the father of a 19 year-old and a 14 year-old, sometimes I wonder where the time has gone. Amy Flanagan sure helped me remember how far technologically we have come in 16 years.
Economy: Several weeks ago I wrote asking why corporate CEO’s weren’t going for the PR play of telling the world that they would not lay anyone off this year. Mark Cuban tells us the reason and what we can do about it. Granted he is only one voice, but it makes sense.
Behavior: Last year, I read and thoroughly enjoyed Predictably Irrational: The Hidden Forces That Shape Our Decisions by Dan Ariely, a behavioral economist from Duke. He gave a presentation at TED this year on cheating that discussed, among other things, a fake MIT Honor Code, sweatshirts, the Personal Fudge Factor, atheists swearing on Bibles and The Ten Commandments.
Entrepreneurship: Seth Godin wrote today about how to apportion equity in a start-up. His ideas are well thought out and I especially like the idea of appointing an arbitrator right at the start. This advice is all the more important if your partner is also your spouse, best friend or both.
Economy: I posted recently on some ideas regarding the AIG bonus issue. Adam Davidson, writes on the NPR Blog today to tell us to look at the bigger picture and as mad as I was when I wrote about the bonuses, I think he makes some sense.
Technology: I have been a big online mapping fan from the early days of MapQuest. Now, I normally choose Google Maps, for the richness of the experience as well as the ease of use. Today, I found out about www.openstreetmap.org. This is an open source world street mapping program. It is designed to be crowdsourced, meaning that like Wikipedia, everyone can be an editor. It looks a lot like Google Maps but includes user generated features like detailed bike paths near my home that were included by a user with a GPS unit.
Politics: John Bolton, our former UN Ambassador, suggested at a Conservative Political Action Conference that President Obama might need to learn a lesson in foreign relations. Perhaps a nuclear bomb that would be detonated in Chicago. That would show the President. Wow! Those Conservatives sure have a sense of humor. He was greeted with applause and laughter. Are you kidding me? I think our diplomatic corps are better served without Mr. Bolton’s brand of humor.
Entrepreneurship: I highlighted Bruce Schneier‘s article last week about the amount of data that is being accumulated about each of us. Seth Godin tells us why this might be a problem. Remember that you can control what type of information is out there about you to a certain extent. And people are checking…
Business (and Politics): Jeff Leitner has written a great post linking the strategies of politics applied to business. It is the first of a 6 part post. I know that I am looking forward to parts 2 through 6.
Economy: Each of us is affected by the current economic situation. Bob is a sound engineer in LA. He has been forced to declare bankruptcy and has started a blog to document his travel along the path.
Business: One of the key guiding principles that I use in my life (both business and personal) is that your reputation is crucial to your success. You can’t afford to mess up on a project without figuring out how to fix it, possibly at a financial loss, for example. I may be rethinking how often I publicly declare my feelings on reputation management. Freakonomics pointed me to an interesting interview with Bernie Madoff, several years ago.
Entrepreneurship: Sales has always been one of my weakest areas. Today, Seth Godin talked about what are the prerequisites for sales at a first grade level, just perfect for me.
Writing: As part of this blog writing thing, I have had to find my voice as a writer. I know that some of you feel that I should probably find another one, but I believe that I need to use more of a strong active voice. Cindy has written a good post today on the ways that Eric Holder is using active voice and powerful verbs. I guess I could do worse than to try to emulate him.
Marketing: Seth Godin today talks about a pet peeve of mine. I too, was that rational marketer, back in the day who couldn’t figure out why someone wouldn’t buy from me. We had the best service, we were competitively priced, we had the most competent staff… Seth urges us to figure out a way to meet the irrational client where she is, rather than continue to foist our advantages at her which isn’t going to work.
Technology: Finally, another pet peeve squashed. Consensus within the cell phone marketplace. The manufacturers and carriers have agreed on a single cell phone charger standard.
Talent: I posted about talent and the need for repetition to create “talent” last week. Kevin Kelly has reviewed a book called Art & Fear: Observations On the Perils (and Rewards) of Artmaking. While there were a lot of interesting excerpts, the one that caught my eye talked about an art professor who graded some students on quantity and others on quality. Guess which group created the highest quality pots?
Philanthropy: Trendwatching.com writes about Generation G, the generation not of Greed (see Gordon Gekko of Wall Street fame), but of Giving. In these troubled economic times, it is interesting to see that the generation coming of age now seems to be more interested in the G for giving.
Just this week, a group I am affiliated with held a fundraising breakfast. This year’s total amount pledged was 40% more than last year and the official I spoke with said that she is seeing this trend at many of the breakfasts she hosts.
Lastly, my favorite Generation G story relates to Adam Carter. Adam is the son of a good friend of mine. Adam spends about 7 months each year providing funds and manual labor on humanitarian missions in Latin America, the Middle East, Africa and Southeast Asia as a part of a group called 100 Friends. The other 5 months of the year, Adam earns his traveling money as a beer vendor at Wrigley Field and US Cellular Field. He maintains a blog with his current exploits (including a video about his visit to Senegal).
Marketing: Brand Execution. I have a friend who likes to say “It’s all about me.” In her case, it usually is . But when it comes to your business, it can’t be all about you. It has to be about the business. Jeff Leitner has brought this point together with a short riff on American Idol.
I don’t know if you watch American Idol, but every now and then the judges ask the kids why they chose to sing a particular song.
And the kids ALWAYS say it’s because the song means a lot to them.
And, of course, that’s the wrong move.
Sing a song that best shows off your vocals – whether you’ve got a big voice, small voice, high range, low range, big range, whether you can do runs or are particularly good or bad at expressing the lyrics.
I see the same dynamic in business all the time.
Business owners choose locations, hire people, design logos and launch products because they like those locations, people, logos and products. That’s fine that they have taste, but they should leave the taste at home. Choose locations, people, logos and products that will make you successful in your business.
If you have thought through your business and made the vision tight, you can’t afford to bring in extraneous items just because you like them. If your concept is a classic French bistro, you can’t hang Chicago Cubs paraphernalia from the walls, just because you are a die-hard Cubs fan. You can bleed Cubbie blue in the comfort of your home. But unless you are opening a sports bar in Wrigleyville, the Cubs stuff needs to stay at home. Utrillo prints, maybe. In a dark corner.
Entrepreneurship: On Tuesday, I posted about the Open Source Challenge that Mark Cuban had started. Today, Seth Godin talked about it and helps provide future entrepreneurs with some ideas to get started.
Security: Bruce Schneier pointed me to this article on Facebook security. Note than on that page, there is a link to a free Facebook security e-book to pass along to others.
Big Picture: In a post earlier this week, I pointed to a discussion with Amory Lovins where he posited that electric generators will soon be microsized and distributed into a giant web. Kevin Kelly has also broached the same general topic in his article “The Surest Way to Smartness is through Massive Dumbness”.
The future of business is distributed systems. Look at Google. Google could not serve its customers with mainframe systems; they use an extraordinary number of cheap, custom processors. Kevin Kelly’s article highlighted a most basic industry – cement delivery – and how distributed systems (computers, GPS, authority) created a competitive advantage for one company. How can you take advantage of this trend in your business?