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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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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How does one build a brand?

“A brand is a set of differentiating promises that link a product to its customers.” Stuart Agres

I believe a brand is the emotional link we have with a particular product or service. It aims to differentiate a product/service from the rest in the same category, by leveraging on its competitive advantages. Eventually, customers develop mental images and perceptions about the product/service, and this is what helps them during their purchasing decision. Without these associations, all product/services in a particular category seem homogenous and the customer is not able to distinguish one from the other. For example, at the supermarket there is an entire wall dedicated to toothpaste, yet somehow Colgate and Crest seem to stand out from the rest. Both these brands have invested a lot of time and money in positioning their product in a particular way to get our attention.

How would an entrepreneur with a boot strapped budget build one of these world class brands? My answer to this question is, solid foundations, focused strategy, consistency and perseverance. World class brands are not built overnight. Brands such as Starbucks, Apple and BMW has taken each organization many years to earn its right to be perceived in a specific manner by all of us. They have focused on giving their customers a superior product and service. What we take away from these examples is that, to create such a brand we need to begin with a strategy right from the onset of our venture. We need to identify specifically how we want to be perceived, how we plan to stand out and the sort of personality our product/service should have. 

In the end, the goal is to create a strong sense of brand loyalty among customers. This loyalty will convert itself into recurring future streams of income. During the course of the next week I will talk about basic steps to look at when building a brand. I think this is an aspect many younger startups do not pay enough attention to at the beginning. This is a major mistake, as we have to be constantly aware of the image we want to portray. This image is developed through our product/service, customer service, website, packaging and any other interaction with our target segment. I look forward to your feedback and any insights regarding the development of brands. 

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Common Vision

“You need to surround yourself with quality human beings that are intelligent and have a vision.” Vince McMahon

When two companies come together to bring about greater value they need to be guided with a purpose. This purpose outlines exactly why it is that they are going into this partnership, what they hope to achieve through it and what changes will have to be made to their current business model if they were to embark on this venture. A common vision embodies all these factors.

To reach this common vision requires each of the partners to answer the three questions outlined above. Firstly “why are we wanting to embark on this partnership?”. If both sides have done their preliminary research and believe that they could add substantial value together, that becomes a strong case as to why they should partner. At this stage you need to put in some serious thought about common value systems and how integration would have an impact on operations in the future. Once both sides have agreed that there is value in them partnering they can move onto the next question.

This is ,”What do they hope to achieve through this partnership?”. This is the stage where both sides have to develop key performance indicators which would measure the effectiveness of this partnership. For example by partnering they would be able to reduce their cost of market by 10% annually which could be re-invested into R&D. In other situations one partner could leverage off the others distribution network to reduce inventory by 2x. The important aspect when developing such a proposition will be to see that the value created is not channeled to one beneficiary only. It needs to be mutually beneficial to foster trust and future growth. Once this question is answered you can move to the last question.

This is, “What changes need to be made to their current business models to execute this venture?”. At this stage we need to balance the cost of this partnership and weigh it against the benefits. This is a tricky aspect since with partnerships there are a host of intangible factors such as staff integration, communication barriers or even different value systems which may affect the partnership. Either way the two partners must do their best to evaluate the costs so as to arrive at a realistic figure.

Once we have all the key factors, a common vision for the partnership can be developed. This will help guide the partnership and provide it with KPI’s and costs which can be constantly measured and kept track of. Partnering is a commitment and one must ensure to only make those commitments which are maintainable .

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5 ways to fund your startup

“If you experience great difficulty in raising money, it’s not because VCs are idiots and cannot comprehend your curve-jumping, paradigm shifting, revolutionary product. It’s because you either have a piece of crap or you are not effectively communicating what you have. Both of these are your fault. End of discussion.” Guy Kawasaki

Over the last week we talked about 5 ways on how to fund your startup. This list was limited to traditional funding options. For a list of a 101 creative ways to raise money for your startup please click here. Keeping in mind that funding is an important aspect of any startup, your belief and faith in your idea or concept is far more important. Before you go searching for funding make sure that you have your value proposition clearly in mind. Position yourself correctly and leverage on a good team to propel you to the highest of heights.

  1. Friends and family: This source represents a large portion of how startups get off the ground. It is however not as straight forward as it looks and you have to take into account the lenders financial status, bring professionalism into presenting your idea and have a properly structured legal agreement. To read more about this source please click here.
  2. DIY: A tough route where you develop a consulting model to facilitate the development of your end goal.This method provides entrepreneurs with a safety net before taking the deep dive. Care needs to be taken to ensure that you work towards specific and realistic goals in mind to progress to the next level. To read more about this source please click here.
  3. Angel Investors: Represent a group of high net individuals who are well  connected. They bring with them specific expertise and a valuable network to kick start your business. They provide a more flexible environment to the founders as compared to venture capitalists. Care must be taken when taking on an angel investor. Your interests must be aligned and a comprehensive legal agreement outlining each others responsibilities is critical. To read more about this source please click here.
  4. Incubators: Provide entrepreneurs with initial seed capital and resources in exchange for a minimal equity swap to get your idea off the ground. They help you in creating powerful networks which act as catalysts to get your product/service moving in the right direction. Incubators are quite scarce making them extremely difficult to get into. To read more about this source please click here.
  5. Venture Capitalists: Represent the end goal of most entrepreneurs. Venture backing provides you with the funds, mentorship and networks to take your startup global. Care has to be taken when presenting to VC’s, you have to ensure that you get referred to the firm, have a comprehensive business plan, a working prototype and a well made presentation to stand a chance. To read more about this source please click here.

The life blood of any startup company is its available cash line. Without it, startups witness stunted growth where their full potential is not realized. Establishing a reliable and stable cash line therefore becomes very important if you want to see your company become the next Google. If you happen to be among the fortunate few who get venture funded please use your allocated funds wisely. The art of bootstrapping by Guy Kawasaki is something that every entrepreneur should read very carefully. I have personally seen how venture funded companies squander their money without realizing. Spending money is the easy bit, especially so at a startup when we all strive for the best. Controlling your spending is much more of an uphill battle, so tread carefully. Best of luck in raising funding for your startup!

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Venture Alignment

Just as your car runs more smoothly and requires less energy to go faster and farther when the wheels are in perfect alignment, you perform better when your thoughts, feelings, emotions, goals, and values are in balance.Brian Tracy

Look at some of the most successful companies in the world, such as Toyota where they aim to produce the highest quality automobile at the lowest possible cost using standardized production facilities or Microsoft which aims to enable people and corporations reach their potential through technology. When you have such a clear vision of where you are going, how you are going and most importantly why you are going, it all starts to make sense. The storming phase is when you are diving deep into your idea and creating a NABC for it, you have to keep your core values in constant alignment with your venture. A disconnect at this stage is often overlooked due to the fact that we want to ensure that our business is a success,  incorporating strategies that fall in grey areas where it is difficult to tell black from white is not  a winning strategy.

A good example is when you promote yourself incorrectly to get attention. Say your organization has core values of reliability, integrity and respect. If you go out and publish an advertisement for your service with words such as “guaranteed success”, “100% reliability” or any other claim which you cannot backup with reliable and valid evidence you are starting off on the wrong foot.  Using  such strategies may yield amazing short term results, however if they go against your core values, success will be short lived.

When discipline is selected as a core value make sure everyone in the organization or team are ambassadors for that particular trait. They have to believe and practice them first before they are able to go and preach them to others. These habits end up making all the difference between success and failure. You have to ensure that core values are aligned when forming your idea.

For the companies which I work with, I strive to ensure that we follow continuous value creation for our customers. This has enabled us to keep our focus on the most important aspect of the business while keeping our values in check as well. A culture of continuous development and innovation is a key for a company’s success in the long run. Without this you will most likely enjoy some short term success and be left in the dust in the future. Making sure we have set these cultures, practices and core values from the very beginning of a project is critical.

If you are the idea champion for your current project make sure your venture is aligned with your core values. Find out what other people on your team are thinking and whether you are all on the same page. Get all of this out in the open at the start. You are responsible for the change that you want to see in the world. Taking 100% responsibility for your life and projects that you are working on is the first stepping stone for making the impossible…possible.

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