Journey of a Serial Entrepreneur

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How to get from where you are to where you want to be

Non-Financial Metric #4: Market Share

“Failure to gain market share even with superior costs is failure to compete. This failure is also a failure to achieve even lower costs.” Bruce D. Henderson

There is substantial evidence which states that market share is directly related to ROI. With an increase in market share, a business can expect to benefit from economies of scale that ultimately lead to better operating margins. Therefore a business becomes stronger by gaining market influencing powers and equipping itself with quality management teams. Keeping track of market share is an important indicator in evaluating how business stacks up against the competition and how it progresses over time. In the early stages of starting out, a venture market research is a critical component of developing a business plan. This is usually a challenging exercise, because information regarding industries and markets is often not readily available. Listed below are some steps I use to evaluate the market and set market share targets accordingly:

1. The Industry: One needs complete information regarding growth rates of a particular industry. What are it’s historic trends? What were the revenue figures for the segment? Have any major technological innovations taken place in it recently? Is the industry very segmented? These are some preliminary questions of interest and importance when looking at an opportunity in a particular industry.

2. Competitors: This is an important segment, one in which you need to document as many direct and indirect competitors in the market place as possible. Look at their teams, products/services, pricing and any other marketing collateral which you can find. Remain constantly vigilant about your competitors, this is a must for any company regardless of size. Create document files which can be referenced easily, this will come in handy during later sections, when you are positioning and promoting your product as well.

3. Customers: Evaluate the target demographic that is going to be targeted. Is the segment growing? What are the current options that they are using in place of the product/service you will provide? How are they currently purchasing the product/service?

4. Market Factors: Are there any external factors which have a deep impact on your target market? These can be government policies, market consolidation and volatile raw material costs. The presence of these factors can have a substantial impact on your target market and must be taken into account.

Ultimately approximate size of market will be gauged. The most common metrics used for broad approximations are, sales by revenue & sales by volumes. Once we know an approximate size of the market we can set targets for ourselves. This metric can then be tracked periodically to ensure that we stay on course and alert to any fundamental market changes.

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Cutting your Marketing Budget?

“Marketing is not an event, but a process . . . It has a beginning, a middle, but never an end, for it is a process. You improve it, perfect it, change it, even pause it. But you never stop it completely.” Jay Conrad Levinson

The quote above encapsulates the essence of this blog post. I don’t think anyone could have said it better. I am a fan of all Mr. Levinson’s work especially his book “Guerrilla Marketing”. In the book there is constant emphasis on marketing being a process which we cannot cut whenever things get tight. As I mentioned in my last post, costs need to be contained tightly if we are to reach our goal of attaining a positive cash flow. What I have noticed is that whenever things get tight, cash flow wise, many entrepreneurs tend to pull the plug on marketing expenses in an effort to control costs. This however leads to a decrease in new business development, which ultimately results in decreased revenues.

Cutting marketing expenses to conserve cash is often not the most optimal solution to solving one’s cash flow problems. Assessing marketing strategies and tactics needs to be practiced on a regular basis. For example we could be advertising our new virtual assistant services on the front page of a popular web portal. We have continued to run the ad for the last quarter but have barely broken even on our investment.  We find however that ads running with much greater ROI on a couple of niche blogs and portals relating to the GTD methodology. As a business owner we should assess these trends on a regular basis and change out strategies likewise. If we take the approach of cutting all web advertising, it is more like amputation instead of laser point surgery.

These budgets and control measures need to be adopted from the onset of your business venture. It is not wise to make marketing expenses cyclical with business cycles. With optimized marketing campaigns and strategies in place, a business has greater chances of avoiding these cash gluts as business is constantly being generated at a healthy level. If you are currently experiencing cash flow difficulties in your business, assess your marketing budget and find ways to optimize the cash available to you in order to maximize your ROI.

Related Posts:

Marketing Budgets & Controls

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5 Steps to Better Presentations

“There are always three speeches, for every one you actually gave. The one you practiced, the one you gave, and the one you wish you gave.” Dale Carnegie

Presentations are a critical communication medium which entrepreneurs need to be adept at. Good presentation techniques make it easier to get your point across to your team, investors and customers. However, to be able to present like Steve Jobs, requires a lot of hard work, creativity and passion. Whenever I have seen a great presentation, it has the same five components. These components make the presentation experience engaging, stimulating and interesting. When any one of these key components is missing, the presentation unravels itself. These five components are:

1. Theme: We have all been to presentations where confusion surrounds the first 15 minutes, and everyone is trying to understand what the presenter is attempting to establish. With the aid of a theme the presenter is able to communicate the core essence of what is being presented. A theme serves as an anchor to keep the audience focused on the single most important message in your presentation. To read more about how to develop a theme for your presentation please click here.

2. Navigation: The outline is supposed to break the story into manageable parts, so that the audience does not get lost. Research has shown that focusing on a maximum of 3 main points in your presentation, is an optimal number as far as recall and attention spans are concerned. It is important that when we begin talking about a key point we introduce it, talk about it, and have a conclusion for it before we move on to the next point. To read more about developing a good outline for your presentation please click here.

3. Call to Action: This component requires the presenter to clearly state the action the audience needs to take after the presentation. This could be many things, ranging from closing a deal, securing funding, or convincing the team to go with a particular marketing strategy. Without this component we have wasted the audience’s time and they will leave the presentation frustrated and confused. Every presentation must have a specific call to action to fulfill its core purpose. To read more about developing a call to action for your presentation please click here.

4. Design: The creativity part of the presentation is one of the most challenging aspects when done correctly. It is about reducing the presentation content into simple messages, and with the help of visual aids communicated to your target audience optimally. We need to be wary of using clipart, complicated tables & charts, bullet points and distracting templates. Every element of your presentation from the colors, font and images must communicate a particular message to your audience. To read more design tips for your presentation please click here.

5. Rehearsal: Being prepared is the difference between a good and a great presentation. There should be an equal amount of effort put into the delivery of your presentation as well as to the production of the presentation. Memorize your material, get feedback from whoever will listen, and record yourself giving the presentation to gauge areas you need to focus on. There is a statistic which says that every minute of a presentation requires an hour of presentation. This goes to show how much effort needs to be placed on rehearsals to give a great presentation. To read more rehearsal techniques please click here.

You will notice that I have not mentioned passion as one of the components. The reason I leave it out is because it is a given. The above mentioned components help take your average presentation to a great one. Without passion however, your presentations will be well below average. Whatever we do in life, whether we are an entrepreneur, lawyer, doctor or an investment banker, we have to ensure that we are passionate about what we are doing. I wish you the best of luck in all your future presentations.

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Not Another Presentation

“No one ever complains about a speech being too short!” Ira Hayes 

Presentations are a critical communication medium entrepreneurs need to be adept at. Good presentation techniques make it easier to get your point across to your team, investors and customers. However, to be able to present like Steve Jobs, requires a lot of hard work, creativity and passion. Without these three components, not only will your presentations suffer, lack of these qualities impact the overall quality of life. We have all been at presentations where we have seriously wanted to shoot the presenter, unfortunately sometimes this may have been us. I have a personal example when I was presenting the constitution of our entrepreneurship society to a new chapter we were inaugurating in China. I am pretty sure that within 5 minutes I had everyone in the room asleep. Looking back at that experience, I blamed the material, however, it really was my fault for not putting the material across in a manner that would have engaged the audience more. 

As entrepreneurs most of the time our presentations will revolve around pitching to investors, introducing a new product/service to a customer, or giving a quarterly sales report to the rest of our team. Most of these presentations have huge amounts of data that needs to be presented in graph forms, charts and numbers. What often happens is we tend to get lost in the detail and forget the overall message we want to leave the audience with. Other times, we just read off the slide, word for word, and that can be a most painful experience for the audience. The worst case  scenario is when the presenter is visibly unenthusiastic about what he/she is presenting. Unfortunately, many of us fall into these common pitfalls and that can have a detrimental impact on our ability to convince a team, get funding or close a sale. 

Over the course of the coming week I will talk about some key elements your presentation should comprise of. These should provide your presentations with that extra level of oomph which should excite, motivate or inspire your audience, whichever of these is your objective. However, to begin the process, we first have to break away from traditional “rules” we follow regarding how a presentation is supposed to be structured. We have to begin thinking creatively, with two objectives in mind, these are, what is the audience expecting of us and, what message do we want to leave them with. I hope this series will be of some help, I wish you all the very best in your future presentations.

Sample Presentation:


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Selecting the Right Name

“When you think of the blur of all the brands that are out there, the ones you believe in and the ones you remember, like Chanel and Armani, are the ones that stand for something. Fashion is about establishing an image that consumers can adapt to their own individuality. And it’s an image that can change, that can evolve. It doesn’t reinvent itself every two years.” Ralph Lauren

If you think coming up with the next million dollar is challenging, correct selection for the name of your business is not going to be any easier. A name formulates the foundational base of your entire business. It communicates what you do to your target segment, what differentiates you from the competition and is ideally meant to instigate curiosity to find out more. A logical argument often used against this methodology of thinking, is that names such as Google, Amazon and Monster do very little to reflect what they do, yet, they have become mega brand names. The fact of the matter is, the businesses mentioned above were pioneering companies which revolutionized internet search, online shopping and online recruiting. They are built on very sound business models and due to the sheer superiority of their products/services they have become household names today.

Getting the name game right is something I have been giving more time towards, in my more recent ventures. We named our first design agency “Synaptic Creations”. I am not a biology student but picked up the word from a friend who told me synapses were the gap between two neurons, over which impulses lead to learning. It made sense at the time and we went with it. The word creations however, is too generic and reduced the ability for us to expand into other areas as well. It also confused some individuals who thought we may be some genetic based start-up. The name would fail several of the benchmarks I now have, for appropriate names for a business. It is important is to learn from mistakes made in the past to help you get it right the next time.

Most of the time, start-ups have to select their own name unless you have managed to secure some major early stage funding. If you have I would recommend NameLab or similar brand name consultants. If you are on your own, there are basic guidelines, namely, keep it short, keep it simple, avoid generic terms, the name should be easy to pronounce and spell and, should be unique. I do advocate a structured process to help you think in a more focused manner, which will in turn help you in deciding on a name which has been looked at from all angles, and has had major thought put into it.

Firstly, we need to think through the space we will operate in. Use questions to get your team thinking along the same wave lengths. These could include:

1. What would be the word you would want customers to associate your business with?

2. Who are you target customers?

3. What are the unique components of your business model?

4. How are you different from your competition?

5. What words best describe what your business does?

6. What emotions do you want your name to instigate in the customer?

Develop similar questions based on your business concept, and come up with as many permutations as possible by mixing and matching. Create a filtered list of names which passes the basic guidelines. If possible do a focus group or collect feedback from friends and family on the names you have shortlisted. This process will take a lot of time, so plan in advance for it so that there is no need to make a rushed selection. This is a name you are going to have to live with for a long time, you need to make it count!

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How to Position your Brand

“A brand should strive to own a word in the mind of the consumer.” Al Reis and Laura Reis

When you walk into a supermarket with the intention of buying eggs, do you actually pay attention to the branding on the eggs or do you pick up whatever is available? I usually pick up whatever I find. However the decision is more complicated when I want to get a soft drink. Brands such as Coke and Pepsi have spent billions of dollars positioning their products as the only cola alternatives. A frame of reference has been created and no matter how many new rival products are introduced in this category, it is almost impossible to dislodge the current leaders. 7-Up did something very interesting with its positioning when it rebranded itself as the “Un-Cola”. Since it could not use the word cola in the customers mind, it reframed it’s positioning relative to its competition and took up a unique position in the minds of customers.

Naturally having the edge of being first in a certain category, has it’s advantages. However, competing in markets where there is already some competition, we need to figure out a way to convince potential customers, to use our product/service instead. This requires a lot of creativity and understanding for your target market and your competitors offering. As mentioned in prior posts, we have to take into account the sort of persona we want to project and what competitive edges we want to bring to the forefront. Take for example the rent-a-car business in America. Hertz had a large edge over the No.2 provider Avis. That was until Avis capitalized on its position by using the tag line “Avis is only No.2 in rent-a-cars, so why go with us? We try harder.” This statement dramatically helped the profitability of the company and more importantly helped customers develop a reference point between Avis and Hertz.

As a start-up organization we often cannot afford to pay tens of thousands to brand consultants to help us  develop positioning strategies. However all is not lost. The end goal is to own a word in the mind of the customer, or be able to communicate your business concept in 5 words or less. Much effort needs to be put into name selection and the use of words as discussed in the brand personality post. These will be discussed in greater detail in the next post in the series.

To get you started on what your product/service should be, there is a great positioning rule called the 4D Rule:

1. Desirable by the customers

2. Distinctive from the competition

3. Deliverable by the company

4. Durable over time

A well positioned brand will lie at the intersection of all four requirements.

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Why should I choose your brand?

“A product is something made in a factory; a brand is something that is bought by the customer. A product can be copied by a competitor; a brand is unique. A product can be quickly outdated; a successful brand is timeless.” Stephen King

Yesterday’s step regarding the personality of your brand, should get one thinking of all the factors that need to be covered to successfully attract your target customer. The next couple of steps will cover essential components which need to be thought through clearly when building a brand. The component I will talk about today is the answer to the question above, namely, your competitive advantage. If one cannot answer why a customer should select your product over your competitors, there won’t be a business to build a brand for. To answer this question correctly, one needs keen insights into the internal selection process of your target customers. Communicating with your target customers and finding out what their needs and requirements are, is the only way to do this. 

For example, you want to launch a new web based product which aims to provide an ability to manage your contacts and communication logs. The market place is currently filled with such products, and include Highrise, a product I use for the same function. When this new service comes along, and they have essentially replicated existing product features and functionalities, there is little chance of success. Even if minor changes have been created, they stand to lose this competitive edge when these functionalities will be copied by existing players. This is an example of when business owners have not put enough thought into the reason for creating the service, for whom it is being created, and how they plan to provide long term value to the target customer.

On the other hand, take for example, the social networking space. Friendster started off with a bang and a small niche social networking site called Facebook, they entered the market, and addressed key concerns regarding, privacy, communication tools and useful applications to make the experience more enjoyable. They clearly addressed the question “why should I choose to switch to your platform?” This leads to an important conclusion, which is, businesses and brands have to be rooted in strong business models which address customer needs in an unique way. Our branding strategy needs to continuously communicate this competitive advantage to our target customers, reminding them of reasons they should choose us, over our competitors.

Related Articles:

– What is your competitive advantage?

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What is your brand personality type?

“You now have to decide what ‘image’ you want for your brand. Image means personality. Products, like people, have personalities, and they can make or break them in the market place.” David Oglivy

If you had to describe the Apple brand in terms of a celebrity who would choose? Could you use the same celebrity to represent Microsoft? Most likely, not possible. I find this thought extremely interesting as it sets out to externalize the internal emotions and perceptions we have for certain brands. We all know that Apple and Microsoft products are very different, however, each one of us has a unique way of perceiving these brands. As a business owner, we have to be in tune constantly with the way our business or brand is perceived by our customers. Is it being perceived the way we want it to? Are we consistent in our branding strategies across all customer touch points? Inability to do so will create a negative perception of your brand in the customer’s minds.

If brand personality is so critical to an organization’s success, why is it never talked about? I believe it is due to a couple of factors, firstly, many business owners see this as a non core issue because immediate tangible return on investment are not seen, secondly, there is a very little knowledge about how critical a brand personality is to the business as a whole. To demystify this subject I have attached an excellent schema to help understand this subject:

Courtesy Tom Dorresteijn

Courtesy Tom Dorresteijn

The development of a brand personality is the first step to embark on when developing a brand. Two components required to begin this process are:

1. Identity: One has to be absolutely clear about the aims of your organization. This includes goals, objectives, and strategic plans which have been developed for your business. Focus on core strengths and identify areas where you have a competitive advantages. If your business concept is unfocused, abstract or too diverse, these same factors will manifest themselves when communicating with target customers.

2. Customers: The second point which needs to be clearly defined is, identifying customers and their specific needs and requirements. One needs to understand their pain points, ambitions, worries and goals. This has to be done through qualitative analysis, by actually talking with your potential customer face to face. Once this is completed and assessed, we will know how to position our brand from their point of view.

It is only after we have successfully clarified these two components, can we actually start the process of developing a type of personality for our brand. We will be able to address key issues on what our brand voice should be, what characteristics our customers are looking for, and visual design to stimulate interest. I quote Tom Dorresteijin who sums up importance of a brand personality very well “We use brand personality to bring brand strategy to life.” By developing a strong personality with solid foundations we can now move to the next steps in developing our brand.

Related Articles:

Creating a brand personality

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