I hate to say it, but I am skeptical of Facebook as a marketing tool for small businesses or entrepreneurs. I have read the articles proclaiming how this business is doing great because of it's Facebook page and web 2.0 social media marketing. I have seen and tasted the Kool-aid. But I am not sure - too push the analogy a bit too hard - of the nutrition of the drink.
Blogs - yes, especially if you have readers. :)
LinkedIn - yes, especially if you have a good network of people, and don't succumb to allowing Larry the annoying guy from marketing into your network so he can spam your friends.
I can even see how a tool like Twitter can keep people in communication with one another during the work day. I especially can understand its usefulness for people like developers of software to help find solutions to problems "Hey I need a foo to do bar - can anyone help?"
But pure social media sites should be left to your family, church members and the softball team. It is useful, but not for business. You would not want your boss to be a 'friend' on your Facebook page.
I suppose if I put on my Seth Godin hat (would that be a purple hat?) - I might argue against myself and say "Brad, you are building up your brand - who and what you stand for - and that brand is what will be valuable as you sell or run your business." If I am authentic, then that is what generates a group around me and the value of that group.
Here is the rub: authenticity has consequences both good and bad. If my authentic self is completely into tatoos, and my body is adorned with them, then that might keep me from a job. The world does not necessarily value authenticity. Are you sure you want to blur the public and private?
When I lived in Japan, I was often struck by the difference between my Japanese aquaitence's inner and outer personas. Outside, they were salary men, bland, faceless, group members. Inside, they each had great passions for a variety of interests. They found it strange that Americans often wear our inner passions outside (we strive to look different) yet internally, we are all the same.
My argument against social media is much the same: are we ready to put our inner selfs on display, and accept the consequences thereof? Blogs, LinkedIn and Twitter all allow us to use our outer personas in public, but leave our inner selves hidden. Social media is predicated on the opposite.
Tuesday, June 23, 2009
Friday, June 19, 2009
Segway
My wife and I were in Branson, MO last weekend for a family reunion. While there we passed a business that sold rides on Segway (Segways?). For $20 you received a 5 minute tutorial, and 20 minutes of riding around a small course along the side of a hill. The Segway were limited to 5mph so you really could not get yourself in trouble.
I have always wanted to ride a Segway, so we went in and tried it.Even though I am a lousy roller skater and skier, I turned out to have a great time riding around.
At the end of the 20 minutes I went up to return the Segway. I was then informed that since I had completed the beginner level, I could now return (or continue) and this time, ride the non-speed limited Segway (they will go up to 13mph), and for 25 minutes.
I did not realize this (and I can't remember even seeing it listed on the forms when we paid to ride).
I wonder: is this a good system (to wait to offer the second faster level riding)? On the one hand, I would think most people who come into the shop have never ridden a Segway, so you would want to do everything you could to make it simple to get them to try riding. Once they ride, they will probably want to ride again, and then you bring out the faster speed and longer ride time for the same price.
On the other hand, if I had known that I could ride for 20 minutes and if I liked it, ride on a faster one for 25 minutes more, I might have been more disposed to buy both sessions right off.
Or maybe you allow a beginner 10 minutes for $10: my wife never really liked riding the Segway, and would have quit after 10 minutes but wanted to ride out her time she'd paid for. After 10 minutes, I had gotten the hand of it and really wanted the faster Segway.
This seems like a situation where the owner could try various pricing systems - 90% of his customers are there on vacation and probably would only come once or twice anyway. So for a month or two he could try various pricing and times to see what made the most money.
What do you think?
Thursday, June 11, 2009
Business Startup: act like you are on tour
When I was in college, I played bass in a rock band. My interest in bass has led me to follow for many years the blog of bassist Tony Levin.
Recently he posted about his latest tour in Europe. Remarking on packing for the tour, he says, "the main effort on small band tours like this is to keep your bags (2 at most) each under 50 pounds, to avoid airline overweight charges. We've all gotten pretty good at it, so there are a lot of 49 pound suitcases, and of course, they have no limit on weight of carryon bags, so maybe the compressor and a box of cd's will go into that --- I'll regret it on the long airport walks, but after 4 or 5 flights we'll have saved a lot of extra charges.
Being on tour teaches you to be careful and avoid those $50 bag charges.
Likewise as a startup, every dollar is precious - and if you are not careful - you too will be socked with the equivalent of overweight charges - whether overnight shipping costs, fancy desks, or whatever.
Try to consider your business as if it is on tour: what are the essentials?
Note also that musicians don't fail to bring key equipment - compressors, pedals, whatever - that they must have to do their work. Even if that makes their bag heavy. They spend on the necessary, not on the desirable. There may be key tools or software you need for your business - get and use them.
Plus if you consider your startup as a band on tour, it might even have benefits for the team and comraderie.
Wednesday, June 3, 2009
Make Something People Want
In this month's Inc Magazine (June 2009), there is an article on Paul Graham, the founder of Y Combinator "The Soul of a New Startup Machine" [p. 60 - no hyperlink yet on Inc website].
Y Combinator gives startups a very small bit of capital to prospective software startups, then pushes them to release a product quickly - see if it catches on, then build from there. The Y Combinator mantra is "make something people want" - they even give you a tshirt that says that when you come on board. And if you sell your startup, you get another that says "I made something people want".
The claim to make something people want caught my eye as I during my reading of Paul Hawken's book, "Growing a Business", he remarks, "the American consumer is inherently dissatisfied".
Contrast this with the common marketing view that consumers don't know what they want. The example often used is a Sony Walkman - no one was sitting around saying they wanted a cassette player with headphones [What's a Walkman?]
The lesson from these three views is that people know what they don't like - or know that they have a point of pain about a product, service or situation. If we can create something that alleviates or meliorates that point of pain, people will be interested in our solution. Of course, you have to have the right price for the solution and the right type of answer, but at the most basic, you have to solve a problem people want solved.
Furthermore, you have to solve it in a way that they 'get it'? It has to be, if not elegant, than something the prospective user can understand, e.g., the way the iPod took mp3 players to another level, even though there had been others previous to it.
Too often prospective startups come in to discuss their business idea with me and it is all about their needs, their intentions, their desires. But when pressed as to what problem they are solving for the prospective customers - they almost always say either "Huh?" or "I will be cheaper than the rest". Neither is a good answer.
Whether software or service, product or restaurant - ask yourself: "am I making something people want?" and "is it something they can understand?"
Friday, May 22, 2009
Customers: good and bad
During our Entrepreneur breakfast yesterday (May 21st), our speaker told a story about being kicked out of the local IHOP.
It seems he and his wife and a second couple were having brunch in the local IHOP. He has known the owner for many years, and they are regular customers. During the course of their meal, he was telling a story that ended with a slightly off color statement. And being rather gruff, his voice carried. From the table next to them, a women with her family loudly complained at him for his crude comments.
Now this woman's children had been very loud and unruly during the entire meal - so much so that the couples had almost told her to quiet the kids down.
Of course, the result was the two tables arguing back and forth. The owner came up to them and said it would be best if they left.
Let's put ourselves in the position of the owner. He has an argument going on in his restaurant, and has to decide what to do. On the one side is a longstanding customer, on the other, a family with children. If he kicks out the regular, he could lose them. If he kicks out the family, it could be a marketing nightmare - it is an IHOP family restaurant.
What would you do?
I believe he did the right thing. He knew that his friend and regular would undoubtably return, and he could always seat them away from families in the future. The family, however noisy, might just tell their friends about this rude table being removed from the restaurant, etc.
Let's open the net a bit wider: you have a product and you can only deliver it to one of two customers right now - an existing customer or a new customer. Who do you get the product to first? (Or two technical support calls, or two client projects.)
How you as a business owner will balance competing claims for your attention will be critical - not only for the result - but for how your employees will also react in the same situation.
Tuesday, May 19, 2009
Kinds of Entrepreneurs
As we get closer to summer, young people are looking for summer jobs - or their parents are urging them to look for summer jobs! Given the current economy, it is not surprising that newspapers and magazines are running articles on teenagers who started their own business.
Do you ever notice the list of tips or advice for the group described in the article are pretty much the same as one would give any startup. For example, in the USA Today article on teen entrepreneurs, they provide the following list of advice: "don't let shortcomings thwart you" "price wisely" "don't over invest in supplies". These could be given to any startup. There is nothing distinctly teenager about those items. Just as like articles for women entrepreneurs give advice that could cover men entrepreneurs as well. This is not surprising if you consider that business remains the same regardless of who runs it.
What grabbed my eye in the article is a couple of the comments from the teen entrepreneurs. The young man notes he is learning more than he would at a typical summer job, "this is just the foundation for learning how to be a businessman," he says. "I couldn't learn this just working at a restaurant."
The young woman had to convince her parents to let her start her business. When Archer first brought up the idea of selling hair pomade, her parents didn't take her seriously. "It took a lot of convincing" to get the business going, she says."My mom was like, 'Maybe you can start the business when you are 20 or when you get out of college.' "
The consequence I draw from these two comments is that it is not the youth or teenager who needs to be convinced of the importance of getting out there and starting his or her own business - but the parents or adults in his or her life.
The young woman's mother would rather her work at a fast food restaurant all summer long to make - say $2000. Her daughter learns to make fries. Instead, her daughter wants to open a business. Let's say she does open the business and it fails (in her case, it is succeeding). Then the parents would have to cover her lost income. But the daughter would have learned a lot more than making fries. But the mother would rather her daughter wait to start a business when she is out of college?
And the young man realizes that he is better off not doing the restaurant job (and so does the daughter). But why not the parents? The risk is low, the learning high, and at the worst, the daughter learns something about herself. Strange.
I am reminded of a Buckminster Fuller quote, "we are all born geniuses". I take this as meaning as we get older, we get less pliable, less open to taking advantage of our genius. Why not try to be open to the possibility? [And of course - take the useful advice on how to start a business!]
Friday, May 15, 2009
Getting in your Customer's Business
There was a very good article in BusinessWeek this issue: how Sysco, the restaurant supply company, is helping their clients (restaurants) to become better businesses. The effect: better more profitable restaurants will be able to order more product from Sysco.
What I really like about the article is that it brings up something that even a small business in the B2B market can do - help its customers to be better businesses.
The word partner is often overused - if you are my partner, then help me pay these bills of ours.
You are selling your clients a product or service, but you can increase the value of what you are offering by helping them to solve an additional problem. Don't empathize with their pain, relieve it!
A good business owner knows if his customers are doing well, and the customer views him as the reason they are doing well, that is going to mean a strong relationship.
Rather than cutting the cost of their products, Sysco realizes that if they can get their customer's restaurants to make more money, the restaurant owners will be less worried about a few cents of price difference in the product and more willing to go back to Sysco for more products. And as long as the cost of the programs they are offering are more than offset by the additional sales they generate it is a win for both (which is really what a partnership is all about).
As often is the case, my point is just trolling in the wake of something Seth Godin said last week in his blog, "When all of your competitors are busy increasing value by cutting prices, you can actually increase market share by increasing value and raising benefits."
Finally, remember that the additional value you provide has to be meaningful - a free 20 cent pen is not going to make the value increase on a $1000 sale. We stopped getting toasters for opening a bank account years ago.
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