Journey of a Serial Entrepreneur

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

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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5 Essential Facts about Revenue

“A computer can tell you down to the last dime what you’ve sold. But it can never tell you how much you could have sold.” Sam Walton

An organization can have a great product and a great team, without any revenue however, they have very little. Revenue is the life blood of any enterprise; it fuels growth, motivation and success. Every organization strives to develop perfect products/services, most of the time however, they are developed with inadequate attention to revenue streams. What follows are shattered dreams and expectations, because a business without solid recurring revenue streams has nothing to stand on. Over the course of this week I have shared some basic facts with you regarding revenue streams, I have re-capped briefly below:

1. Revenue & Business Models: If you are writing a business plan or, are in a new startup venture, identify your revenue streams as clearly as possible, and understand what resources need to be put into place to realize their true potential. The future of your organizations rests upon these strategic initiatives. The business model must be based on sound revenue streams in order to succeed. To learn more about revenue and business models please click here.

2. Revenue & Market Segmentation: Once identification of a business model has been made, correct mapping of its target market is essential. Having a strategy to aim a product/service at ambiguous market segments results in spreading yourself too thin, especially when resources are tight. Market positioning of products is of paramount importance for successfully generating revenue at a quicker pace. To learn more about revenue and market segmentation please click here.

3. Revenue & Investment: Investing in correct revenue streams can be the difference between an organization that succeeds and one which does not. It is critical that metrics are put into place to ensure that all revenue streams are closely measured. This will lead to informed decisions on whether it makes financial sense to continue investing in a particular revenue or to focus energies on another stream to ensure that financial stability is maintained. To learn more about revenue and investment please click here.

4. Revenue & Change: Our world is in a constant state of flux. We are living through a time where we need to become adept at forecasting as also adapting to changes taking place. This principle applies to all aspects of our lives, in the business sense, it has far reaching implications. We have to avoid becoming rigid at all costs to maintain a competitive direction in the global market place. Failure to do so will result in an inevitable downslide of your organization. To learn more about revenue and change please click here.

5. Revenue & Metrics: Metrics are mandatory components of any successful business. Measuring your revenue streams is essential as you need to be aware of the growth rate of your streams, how quickly your pipeline is being converted, what sort of market share you hold and how the industry you operate in, is changing. Such metrics provide information that will allow you to make informed choices. To learn more about revenue and metrics please click here.

In todays day and age there are a plethora of startups which have no clear business model, some are purely developed attractive acquisitions while others wait to see how they develop. My advice is, go in with a plan on making money from day one if you want to build a strong and well founded organization. When developing your streams ensure that you cater to each level of your market segment and create opportunities for scalability and cross selling. Doing so will put you in a favorable position to succeed. 

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Metrics for Revenue Streams

Every company has metrics that track performance. The key question is whether these metrics really provide visibility to performance as viewed by the customer.” Steve Matthesen

Working at a startup, there are always a host of things which need to get done. It is a constant battle with time to stay on track and achieve goals and targets. In the midst of this daily commotion, we are inundated with information from all sides. To keep abreast of all these developments, it is essential to develop a system which provides dashboard views about current standings. This is where metrics come into play. They need to be incorporated into every major business function to provide real-time statistics and keep the focus in the right direction.

The metrics for revenue streams used at some of the organizations that I work with, range from being very simple to relatively complex depending on the nature of the business. I have experienced that there are a few metrics which need more focus than others where revenue is concerned. They are:

1. Revenue Stream Growth: This metric provides data regarding development of each stream of revenue by quarter. It involves data which includes percentage growth numbers, pipeline activity and deal closures. These figures provide detail analysis on streams that are growing at a faster pace than others, the stages of revenue facing plateaus and how projected business is forecast in the coming quarters for each stream. 

2. ROI on Revenue Streams: It is one thing to have an extremely high turnover and a completely different story when that is not being converted into bottom line results. This metric provides data regarding the profitability of each segment and a break-down of investment into the stream, as well as marketing costs and cost of goods/services. Constant vigilance helps regarding which streams need to be promoted and which need to be ceased. 

3. Market Share & Industry Analytics: This metric keeps track of current growth trends in the industry the organization operates in. It constantly updates data regarding major changes on competition, government policies, economics climate and company position. This requires constant study to stay current with the rapid changes taking place. 

While keeping all the metrics in mind make sure that you take time out to compare them with related metrics to customers, vendors, suppliers and distributors. This will ensure a complete picture of the current situation. At an early stage startup, complicated metrics are not necessary, what is required however, is the ability to put these metrics into practice at basic levels. This will ensure that the position and development of the company is dealt with more effectively.

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Change and Revenue Streams

“The key to success is often the ability to adapt” Anonymous

Our world is in a constant state of flux. We are living through a time where we need to become adept at forecasting as also adapting to changes taking place. This principle applies to all aspects of our lives, in the business sense, it has far reaching implications. This story has been heard time and time again, companies become complacent and rigid about rapid changes taking place and soon find themselves compromised. A story, very much in the news these days is, Yahoo!. This company once dominated web search. Today, it finds itself in a messy situation involving corporate raiders and hostile takeovers. What went wrong?

Yahoo! pioneers and leaders of web search throughout the 90’s became complacent about changes taking place in their domain space. A new entry startup called google started to develop traction. Before you knew it, they became a formidable player in the search market. Yahoo! failed to adapt to this change and continued diversifying their business model into new markets. They failed to defend their primary revenue stream, including a missed opportunity to buy-out google for $3b. This is an example of how the pace of change can turn positions in a matter of years, even for such a large firm. However, this is not the first story of its kind, nor the last, these mistakes take place on a daily basis.

If your organization has developed revenue streams which have potential of exponentially increasing over the years, it is your foremost responsibility to protect fiercely. This is done by continuous improvement of the processes, as well as developing complementary assets as barriers around that stream. If done diligently, you will be able to protect yourself from inevitable complacency, which could lead to an unfortunate outcome. On the flip side if you are struggling with your current revenue streams and not being able to develop them further, pay close attention to changes occurring around you. If you are promoting a product/service which has no place in the current market, you need to rethink strategy, and, as soon as possible.

Incorporating systems to account for changes in domain, industry, economics climate and external factors is critical to success. Make sure you have them in place to avoid trouble !

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Investment and Revenue Streams

“Sometimes the best investments are the ones you don’t make.” Donald Trump

Multiple revenue streams are extremely valuable assets for any business. Each revenue stream has to be positioned to address certain components of the overall strategy. Every revenue stream is not created equally, some are based on low margin and fast moving products/services while others facilitate growth of higher end products/services. The key factor to be addressed here is not only the creation of renewable revenue sources positioned for the right markets, but also correct investment into these streams. 

For example, if your business currently provides you three streams of revenue, you need to have certain measures in place to gauge the level of growth of each stream. These metrics will provide you critical data to measure which streams have the potential of exploding, as compared to others whose growth is relatively stunted. Without these metrics, we could make a fatal error of investing in wrong revenue streams which could have negative impact on the overall bottom line. Concentrating your investments on the right revenue streams is a strategy used by all successful companies. 

In my personal experience, one of the most telling signs of focusing on wrong revenue streams, is near the end of the quarter when the entire team has to push itself ridiculously hard to reach set targets. If this happens in a consistent fashion, quarter after quarter, you could be backing the wrong stream and costing the organization dearly. Develop flags for each of your streams and when things seem to be going off course consistently, look into revenue streams rather than blaming the economy or your team.

Are you investing in the correct revenue streams?

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Revenue and Market Segmentation

“The perfect business model must have a way to build in its own high-margin products that can be sold while processing reliable renewable revenue streams at any margin.” Mitch Thrower

 Once identification of a business model has been made, correct mapping of its target market is essential. Having a strategy to aim a product/service at ambiguous market segments results in spreading yourself too thin, especially when resources are tight. Market positioning of products is of paramount importance for successfully generating revenue at a quicker pace. For example, I was consulting with a startup organization who is launching a business in the mobile social networking area . They have specifically developed a service for the 15-21 age range, exclusively for the Chinese market. Even though the market is exploding for mobile usage in China, by selecting a niche segment they can become a much stronger adversary to competition.

It is only after a market segment has been selected , a niche market to operate in identified, that you have to develop revenue strategies. These strategies can be aimed at capturing multiple subsets within your market segment. For example many online service providers give you multiple options to sign up for their service. At one my companies we use Highrise(CRM tool) which allows you to sign up either as a single user, small medium enterprise (SME) or a full fledged enterprise implementation. This strategy gives them the capability to develop revenue streams faster, at multiple levels. Ultimately this provides the company with growth, stability and flexibility to adapt itself to changes in economic situations.

The example mentioned above shows a company which has not selected any clear market segment to promote its products in. Many SMEs find them a more cost effective alternative to other such CRM tools. Positioning a product for mass market appeal is a strategy which I have not used extensively in any of my ventures. It is a harder process and one, I think, you could grow into rather than jumping into the deep end for it. For every facebook, google or amazon there are thousands of similar services which never got similar traction. Correct market segmentation provides you with structured direction and enables you to develop specific competencies. These can result in major competitive advantages in the long run. 

When developing your Go To Market strategy, paying attention to niche markets and building multiple level revenue streams around it, could become your winning strategy. 

 

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