If You Want to Disrupt Your Market, Look to the People on the Sidelines

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People Walking In La Rambla Street, Spain, Europe.

“If I had asked people what they wanted, they would have said faster horses.”

This quote, attributed (perhaps erroneously) to Henry Ford, illuminates an important idea for entrepreneurs to keep in mind: Sometimes the best market for your product doesn’t exist yet.

I first began researching the market size for my data sharing company, ShareFile, in the summer of 2011 — just a few months before we sold to Citrix. We’d already made Inc.’s list of the 500 fastest-growing private companies for two years in a row, six years after I launched the company.

We launched ShareFile in late 2005. Rather than looking at the market for FTP (file transfer protocol, then the dominant form of file transfer) and considering what portion of that market we could capture, I thought about all the people who didn’t use FTP because it was difficult and cumbersome. That was the much bigger market in my opinion, and there were very few accurate measurements of that non-consumer group.

Are you factoring non-consumers into your startup plan?

A huge opportunity for entrepreneurs lies in taking advantage of that very slice of the market: The people who are sitting on the sideline, waiting for you to show them why they should even buy a particular type of product or service at all. This is disruptive innovation at its best, and it’s an increasingly viable way to achieve business success.

Perhaps it means your product is so new that it carves out a whole new market, building demand as it gains popularity. But that’s a very rare exception. Even breakthrough products like the iPhone and Tivo did not create entirely new categories. Much more often, capitalizing on non-consumption means you are taking an existing product or service and making it either a little bit easier to use or dramatically less expensive than incumbents.

Consider Uber. I’ve used this black-car service a lot recently, even though I’ve never been a heavy taxi user. I had a very distinct perception of taxis: they take 20 or 30 minutes to arrive, the car is often dirty, and the driver often gives you a death stare when you try to pay with a credit card. I was a non-consumer of taxis except when absolutely necessary. If Uber’s founders were just looking at the market of frequent taxi users, they would never have counted on me as a customer.

But when I learned about Uber and used it a few times, I became addicted. It’s a great and easy-to-use service: You open their mobile app, check the cars available in your vicinity, and click a button to request a car. You instantly see when your car will arrive. Your credit card information is stored in the system, so you don’t have to haggle with the driver or even take out your wallet. The drivers I’ve had have all been very nice, the cars have been clean, and the whole process is usually as stress-free as it could be (granted, I haven’t had the surprise fee experience that others reportedly have had).

Uber is not the only company to succeed in this way: Starbucks, AirBnB, and even Home Depot all created new markets or dramatically increased the size of a market by focusing on non-consumers and giving them a reason to enter the market.

Uber is building a great business by capitalizing on non-consumption. I likely never would have become a regular taxi user. But Uber improved the experience and simplified the process enough to win me over. What non-consumers can you win over with your next business idea?

This post originally appeared in Jesse Lipson’s Forbes.com column.

Jesse Lipson is a VP & GM for Citrix, which acquired his company ShareFile in 2011. ShareFile is a file-transfer service built for business users who need secure, reliable and easy tools for sharing data. He launched ShareFile in 2005 and bootstrapped the company from zero to four million users in six years. Jesse has also launched and/or led several other cloud and e-commerce businesses, including Rapidata.net, a pharmaceutical market research company, and the website development firm novelProjects. 

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

What These Women TV Characters Can Teach You About Business

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Two Women In Living Room Watching Television Eating Chocolates S

One thing that makes “Game of Thrones” so compelling (like “Girls,” “Homeland,” and the late “Breaking Bad”) is its complex, often controversial leading lady. As professional women, what lessons can we draw from Daenerys and her counterparts on other hit shows? A lot, as it turns out. Below, four of my personal favorites — and what we can glean from each:

Skylar White from “Breaking Bad”

Love her or hate her (yes, there is a whole subculture of Skylar haters), Skylar is savvy and smart. She lacks the sinister evil of her meth-cooking husband, but she definitely isn’t a pushover. Skylar successfully negotiated a bottom-dollar price for the car-wash acquisition — a move that even Walter seemed skeptical of. She’s also keen with numbers, enough to cook the books and launder drug money.

While it’s not wise to use those tactics (they will land you a visit from the IRS or your brother-in-law DEA agent), it is every business owner’s job to know their numbers. Lessons learned:

  • Don’t be afraid to negotiate. Everything is negotiable. Even business contracts presented by large corporations can be amended to your benefit. But you must speak up and have a leverage point; never want or need something so badly that you accept it at face value.
  • Know your numbers. You don’t have to do math equations in your head, but you need to know the financial status of your business at any given time. Start with your costs of goods or services and the margins on sales and go from there.
  • Carry on when things seem bleak. There may be days when even you don’t want to show up for work. But you must: for yourself, for your employees, and for your customers.

Daenerys Targaryen from “Game of Thrones” 

As women, we often underestimate ourselves and even fall victim to the Imposter Syndrome. Dany could have easily slunk away or become the wife of another, silenced forever. But she had a burning desire to win in a man’s world. She takes up a league of her own, first by creating a trusted inner circle of advisors and then by winning over legions of loyal soldiers through compassion and empathy. By meeting their needs, she fulfilled her own. Lessons learned:

  • You are worthy. The only limitations we have are the ones we put there. With confidence and self-esteem, knowledge and a strong skill set, any opportunity is available to you if you seek it out.
  • Build a team. You can’t build a business alone. Invite people into your team who can complement your existing talents. Make sure they are supportive and results oriented as well.
  • Your employees are your strongest asset. Your employees help make your vision happen. Treat them well. Be fair and honest. If you do happen to have an underperforming employee who you can’t help improve, get them out! Bad employees will tarnish the good ones.

Carrie Mathison from “Homeland”

When she’s not interrogating prisoners of war or foiling bomb plots, Carrie is neurotic, unstable, and quite frankly, off her rocker. From the outset, it seems Carrie’s case is one of “how not to behave in business.”

Now look closer, and you’ll see Carrie is outshining her counterparts by acting on intuition, pushing boundaries and delivering results. Here’s the truth: great entrepreneurs, creators, and inventors are all a little neurotic. They are the ones really thinking outside the box (see: Steve Jobs). And most great business leaders all lead imbalanced work/home lives. So as we embark on the next season of “Homeland,” let us not judge. After all, isn’t there a little bit of Carrie in all of us? Lessons learned:

  • Business is emotional. Business involves daily interaction with many individuals. People’s livelihoods are at stake. Just like with your employees, be honest and fair. Keep your composure and treat others as you would want to be treated.
  • Crazy comes with the territory. Entrepreneurs are risk-takers. Our enthusiastic, out-there way of thinking is often the catalyst for new business ventures. Embrace the wild ride — and be glad that we aren’t all on the crazy train.
  • Push boundaries. You can’t copy your competitors. You must out-think them, outsmart them, out invent them. You sell tacos in a restaurant? Well, how about selling them in a food truck? Get creative and take your business to the next level.

Marnie from “Girls”

In HBO’s hit “Girls,” we meet a young, eager Marnie, who desperately wants the perfect life but quickly loses control. She is fired from her job, breaks up with her boyfriend, and is labeled a bad friend by her roommate, Hannah.

As entrepreneurs, we know that failure doesn’t seem quite as bad once we have a few years under our belts. If you’re not failing, you’re not trying hard enough. So dear Marnie, make mistakes while you’re still young. And for those of us that are now past our twenties, let’s try something new today. In failing, we will ultimately win. Lessons learned:

  • You can’t control your environment. When the unexpected happens, use your system of checks and balances to deal with the situation and move on, so you can get back to business as usual.
  • Don’t be too rigid. Just like in fashion and music, there are trends in business. You may suddenly have a product no one buys anymore. Pivot. Accept the challenges head on — or go out of business.
  • Failure leads to success. A failed new product can be devastating. But within every failure are many learning opportunities about what worked and what didn’t. Next time, you will do things differently and hopefully succeed.

Our favorite characters may not be teaching us anything new, but they remind us of the many roles we have to play. We too fret over numbers, negotiate contracts and expand our businesses — all while pregnant with our third child. And yes, our own emotions sometimes get the best of us.

Maybe that’s why there is no “The Real Women Entrepreneurs.” We’re already charting our course, somewhere between the blurred lines of business, art and reality.

Erin Meagher is the developer of Kelapo™ Extra Virgin Coconut Oil, a product manufactured and marketed by Beneficial Blends LLC, headquartered in Tampa, Florida. Kelapo™ was launched in 2009 with the goal of producing the best-quality coconut oil on the market while ensuring fair and ethical treatment of the farmers who cultivate it. 

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

How to Build the Right Team for Your Startup

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startup-company

I’ve been spoiled throughout my career of building teams in large tech companies. I’ve had all the luxuries: infinite resources, time, and large pools of qualified candidates. At Google, we always had a steady stream of graduates from top schools flowing into the organization in entry-level positions. When it came time to build a new functional team, I would simply pull from the group of internal all-stars we had at our fingertips.

In the startup world, things are different. When the momentum is building and things are moving fast, your company begins to feel the push that comes with an early rush of success. The call to scale comes soon after. Assuming you have all the necessary prerequisites to scale (a demand for your product and the resources to make moves), answering that call quickly can be a big challenge.

At my current startup, Porch.com, we are in rapid growth mode. We are using the following principles to build powerful and effective teams while speed-scaling.

Know Your Numbers

If you have a team of nine and you hire one, that person is now 10 percent of your team! Hiring the wrong person in a group that small can be fatal. You still hand-pick your players and can exit bad hires, but so much rides on getting it right the first time.

When I am evaluating candidates, I weigh references and past success heavily. You have to be pickier in a startup because you’re moving quickly. Utilize lean startup methodologies when hiring. For certain roles, I like getting references during the phone screen so I can check them before investing more time interviewing.

Find People Who Fit

The people who thrive in startups are cut from a different cloth. Many just aren’t willing to burn the midnight oil to build something great and enduring. There are two major characteristics I look for when selecting candidates:

  • Flexibility – Things change rapidly in a startup. Can your teammate accept that and live a lifestyle with frequent ups and downs? To scale efficiently, startups need people onboard who can adapt quickly and welcome change. The startup grind is a lifestyle, not a job.
  • Problem solvers – Part of working at a startup means there are many unanswered questions. To many people, that’s what attracts them in the first place. Hiring problem solvers goes a long way. You need people who can identify questions you didn’t know existed in the first place.

Build With Organization Architecture in Mind

Anyone who has worked in a fast-moving startup has seen it happen: as teams grow and departments divide, your once swift and scrappy startup begins to surface some bureaucratic characteristics. The culprit is the communication breakdown that happens in a poorly architected organizational structure.

You might be growing a mighty force of talented developers, but if they can’t effectively communicate with product and design teams, building your product will be slow.

Take a look at your company and figure out which departments are essential to bringing your products to life quickly. Find ways to tie them together. Build pathways with clear leadership so decisions can be made quickly and autonomously within that team.

Architecting a company structure is easier said than done. It takes careful planning and monitoring on a continual basis from top-level leadership.

Optimize Your Space

As much as I enjoyed the scrappiness of working from our CEO’s basement for our first year, it quickly came time for us to move into our first “real” office space. We had several talented interns on the way for summer and we realized we needed a setup that would both allow us to maintain our scrappy culture and give us enough room for proper expansion.

It’s not uncommon for a startup to have a few offices before landing on a final location, so the ideal setup often involves flexibility for expansion while only paying for what you’re using. Try finding a large, mostly vacant space and negotiate terms that allow you to rent more square-footage as needed. You can maintain your lean efficiency while eliminating the need for frequent and costly relocations.

Speed-scaling a startup is no easy task — but it’s a good problem to have. It means your company has done something right. Keep building on your foundation. Get the right people in the right roles and give them the environment (figuratively and literally) to build something great.

Ronnie Castro is co-founder of http://porch.com, a start-up aimed at helping people manage and love their biggest asset – their home. Operations, revenue generating and customer acquisition experience with Google, Expedia and WildTangent.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

What You Need to Know Before You Build a Mobile App–Besides Code

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Mobile app tablet smartphone

As mobile devices continue to gain adoption and outpace computer sales, entrepreneurs are eagerly seeking developers to bring their iPhone and Android app ideas to life. Mobile apps represent a massive opportunity for building a mobile-based company, but success takes far more than just a great idea and a talented development team.

At Sourcebits, we’ve worked on more than 500 projects since 2006. We’ve built more than 30 chart-topping apps, and we’ve spoken with hundreds of entrepreneurs about their product ideas. Some have been huge hits, others have struggled, and some ideas don’t get produced at all.

Here are the eight important questions every entrepreneur should ask themselves (these are the same questions we ask our clients) before diving head-first into the exciting world of creating iOS and Android applications. A SlideShare of these questions is also available here.

  1. What are your motivations for building this app? What is motivating you or driving the development of this app? Money and fame are great, but they won’t be enough. You need to have a passion and a clear vision as to what your app will accomplish and the problem it will solve for the target customer. And that passion needs to be strong enough to endure the ups and downs of product development and the challenges of building a company.
  2. When you share your idea with others, does anyone want a piece of the action? As you begin sharing and explaining your awesome new app idea, does anyone want to join you as a co-founder? Will they invest their money, their time, their talent and/or their connections to help you? If people are willing to work for a low wage in exchange for equity in your company, it’s a sign that they really believe in the quality of your idea.
  3. Does talking about your app create buzz, curiosity, or generate feedback? Can your idea fit on a post-it? What’s your 15-second elevator pitch? You have to be able to tell people your idea in one simple line, explaining what you hope to achieve. You’re on to something if it stimulates lots of buzz and curiosity. If you can’t sell your idea and get people excited in person, it will be even harder to do so online. And avoid being defensive when you get feedback — listening to and evaluating the positives and negatives you hear could save you hundreds of thousands of dollars by helping you refine ideas and product features.
  4. Do you have the money to build the app? (Don’t forget iterations and marketing.) You might think you can develop the next best app for under $10,000. And there are developers who will take your low budget — but you will get what you pay for. To build a great product, you could spend more like $250,000. Getting to a minimum viable product might cost you $100,000, and then you’ll probably also need a marketing budget to help people discover your app and a budget for iterations. If you don’t have that kind of money lying around, you’ll need to find investors. Hone your presentation skills and showcase your ideas to potential investors (friends and family, angels, VCs) in ways that make them excited.
  5. What’s so special about your app? Between Apple’s App Store, Google Play, Windows and the web, there are millions of apps. In a flooded market, what’s going to make your app stand out? You need to have a clear idea of your differentiators, how the user experience will feel, and geographically what your target market will be. These will act as your compass when development offers various product directions.
  6. How will you make it all happen? Do you have a team to develop and engineer the app for you? What will your design look like? What is your monetization strategy? How will you conduct user testing? How will you market your app at launch and beyond? How will you handle customer support? What analytics will you use to determine the second version? If all of this seems like a lot of work, you’re right — it is. Luckily for entrepreneurs like yourself, many resources are available to help you with every aspect of building a business around a mobile app. But skimping on any of these areas is a quick way for your app to become ignored and irrelevant.
  7. How will you deal with inevitable adversity? Even if you’ve answered all these questions, plan perfectly and do everything right, success is never guaranteed. When the going gets tough, will you persevere or perish? The first version of your product isn’t likely to be perfect. So it is important to have iteration strategies and new ideas in place. How you handle adversity will determine your longevity in this competitive field.
  8. Are you willing to leave everything to pursue this project? You need to decide if this will be a side project to pursue while maintaining a full time job, or if you are going to go all-in and focus full time on your app and new business. Although the financial risks are higher, leaving your job and fully pursuing your vision improves greatly your chance of success. Fortune favors the bold, if the bold have something great to offer.

Keeping a record of your answers will help you clarify your vision and keep you on track during the development process. It’s a great springboard for creating the mission, product road map and brand messaging for your company.

This post originally appeared on the author’s blog.

Rohit Singal, 38, founded Sourcebits in 2006. A trained radiologist, he quit medicine to found a startup in India. Sourcebits developed the first iPhone app from India – an alarm clock called Nightstand that was a major hit. The company has since built more than 500 products, including 30+ chart-topping mobile apps. Sourcebits employs more than 300 people, and secured Series A funding from Sequoia Capital and IDG. 

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

3 Tips for Outsourcing Product to a Development Shop

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Designer Drawing Website Development Wireframe

With a shortage of quality development talent, many founders have turned to development shops in order to start building their product.

At Terrible Labs, we have the opportunity to chat with many founders about how to get their first web or mobile product designed, built, and launched. Unfortunately, a lot of them have unrealistic budget expectations about building their product.

If you have a limited budget and need help building your product, here are three things we recommend to reduce the overall project cost:

Wireframe your product’s user flow before you talk to a development shop.

We’ve presented and written a lot about the value of wireframing and prototyping because we feel it’s the most important step when productizing an idea. However, most prospective clients come to us with an idea that exists solely in their head.

The goal of wireframing is to get the idea out of your head and onto paper.  Once you put pen to paper, you’ll learn how your product actually works and not how you think it will work.

You can consider your wireframes sufficient after you have conveyed all of the possible ways a user can flow through your app. Make sure to account for everything from how the user signs up to how they ultimately achieve your product’s value proposition. In our experience, designing well-thought-out wireframes can cut 2 to 3 weeks off your project.

Be willing to cut features that aren’t necessary.

Good wireframes act as a blueprint for product development. More importantly, exhaustive wireframes will help a development shop break your product down into user stories.

User stories are descriptions of pieces of your product’s feature functionality.  Ultimately they serve as the guide for development. At Terrible Labs, we take the user stories generated from wireframes and put them into a project management tool like Trello or Pivotal Tracker. Our clients then work with us to determine the priority of each story and positioning, which leads to a detailed estimate breakdown.

Once you have an estimate breakdown from your development shop, you can, based on your budget, determine which features are must-haves — and which are nice-to-haves, cutting accordingly. But you need those wireframes first.

Be a proactive project manager.

Good project management is the difference between finishing a project within the terms of the engagement and spending more money for additional, unplanned time.

At Terrible Labs, we work on a time and materials basis. This means that we work with a client on their product for a set term, regardless of what gets completed. The most important reason for this approach is that we want the client to take initiative to become a very active participant in the development process. Since we test continuously and often, we need quick feedback from customers in order to make changes sooner rather than later.

Staying active is critical. Take the time to use and adopt a project management tool so you remain an active participant. This ensures you don’t just end up under budget, but with a successful project that meets your expectations, too.

So, what are you waiting for?

Don’t let a limited budget prevent you from seeing your idea become a reality.  If you are truly committed to building your product, take the initiative to extensively wireframe your idea, realistically scope your product, and then proactively run it. Follow through on these three steps, and you’ll be amazed at how far your budget will go.

Cort Johnson is a co-founder of Terrible Labs, a boutique design and development shop, and TicketZen, the easiest way to pay parking tickets with your mobile phone. He also works with Flybridge Capital Partners and its general partners as an advisor to support and broaden the firm’s investment activities.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

5 Simple Ways to Use Twitter to Its Full Potential

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twitter tipsEven the best businesses can have trouble adjusting to social media. It’s understandable that plenty of profitable and professional companies don’t use Twitter correctly, especially if they’ve been in business for many years before social media came into play. However, customers keep up with businesses online, and they will judge your ability to use Twitter and other social media sites.

If you want to attract more technology-savvy clients, then you need to make sure that you’re making the most of your Twitter account. Twitter can help bring in more potential customers and promote loyalty from your current customers, but only if you’re tweeting the right things in the right way. Take a look at these five things that even good businesses do badly on Twitter, and make note of what you could be doing differently.

  1. They forget to create a profile. One of the worst things you can do is keep your profile picture as the little egg you first start out as. Make it personal. Upload a professional profile picture for your company. The picture should ideally be something that is recognizable even when it’s small. Don’t forget to also fill out your bio. If there is nothing there, people won’t know who you are or what your company does. This should be one of the first things that you do — there’s no excuse for you to be tweeting with an unfinished profile.
  2. They tweet just about business. Yes, Twitter is a great way to show off your company and gain new customers. However, you shouldn’t plug your business in every tweet. Do people really want to read 140-character advertisements all day long? Tweet photos of your workplace or employees, facts about your industry, tips that you learned along the way, a funny anecdote or a question for your followers. People will be more likely to follow you and recommend you to others if they actually enjoy reading your tweets.
  3. They don’t follow polite Twitter etiquette. Just because you’re interacting on the Internet doesn’t mean that you should let your social graces fall to the wayside. Don’t do tacky things like constantly beg for retweets or use excessive hashtags. Take the time to check your spelling and grammar. Use correct punctuation. No, you don’t need to use three exclamation points. Treat Twitter as though you were writing a company email or a friendly note to a client. You can have fun and joke around on Twitter, but make sure you do it in a suitable and easy-to-understand way.
  4. They tweet too rarely. If you’re not tweeting regularly, then you’re not tweeting correctly. Twitter is made for frequent, daily updates. Because you’re limited to 140 characters, you should feel the need to tweet frequently anyway. If you’re having trouble remembering to tweet at least once a day, try a social media management tool that allows you to schedule tweets in advance, such as Hootsuite or TweetDeck.
  5. They don’t interact with others. You shouldn’t just be tweeting out into the abyss and assuming that your followers are reading. Think of Twitter as sort of a meet-and-greet. Make conversation with others and share interesting news and facts. Get to know people within your industry as well. This might sound counterintuitive or like fraternizing with the enemy, but it will help expand your social network. It’s perfectly fine to talk customers and other business owners on Twitter too. Compliment others on something they’ve done that you admire. Ask them about their experiences in your industry. Thank your customers for their patronage, and make sure that you make it personal and sincerely mean it. Interacting is what Twitter is all about, so start talking to others and not just to yourself!

Did you take note of what you could change on your own Twitter account? Not making the most of Twitter doesn’t mean that you run a bad business, but it does mean that you are losing out on potential customers. Now that you’re armed with these tips, go ahead and rethink how you use Twitter. Redesign your account and start tweeting new, more interesting things. Twitter should be a enjoyable experience for both you and your followers, so go have some fun!

Brendon Schenecker is equal parts developer and CEO, which has led to array of tech-based startups and over 10 years of experience managing startup ventures. Brendon is currently founder and CEO of Travel Vegas, a technology-focused destination travel company.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

3 Simple Strategies for Fearless Delegation

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Female business team of four working together to achieve good re

At first glance, not doing something yourself feels risky: What if it doesn’t get done? What if it’s not quality work? But done correctly, delegating can actually lower the risk in your business. By delegating, you are decreasing the chance that you’ll burn out and that important activities only you can do won’t get done. Real control comes from managing risk and releasing control in appropriate ways. Here’s how to change your approach to delegation to maximize business results.

Identify Where to Focus

To help you let go of projects other people can do, you need to understand what exactly should fill the majority of your time. Where can your contribution make the biggest impact? For most business owners, these activities include strategic thinking about new business opportunities, building relationships, sales, and specific elements of operations.

Unfortunately, most owners find that the most essential business building activities never happen because they get so swallowed up in day-to-day operations. Take a moment to step back and think about where you can provide the highest value. Everything outside your core strengths and role should be activities that others can do.

Name the Fear

Vague feelings of discomfort can stop us from moving forward. But when we clarify what actually bothers us, we can then address the issue and breakthrough to the next level. Name your fears. To help you get started, I’ve listed out some common concerns in each category.

Delegating the Work

  • The work won’t get done.
  • The work will not get done well.
  • I feel bossy/mean.
  • I’m worried I’m inconveniencing others.
  • I feel out of control.
  • The work won’t get done the way I like it to be.

Doing the Work Yourself

  • I feel stressed.
  • I feel sleep deprived.
  • I’m frustrated.
  • I feel like my opportunities for growth are lost.
  • I am out of control.
  • I am limiting others’ growth.

After each bullet point, name in specific detail the perceived risks associated with both allowing others to participate and doing the work yourself.

Minimize the Risk

Once you have a detail list of perceived risks, take the opportunity to address each issue. Figure out how you can minimize the risk when someone else does the work. This will allow you to put the appropriate checks and balances and safeguards into place.

For example:

Perceived risk: The work won’t get done.

Risk mitigation strategy: Set up a follow-up system for each task. Make a running task list or hold meetings to review deliverables. Use tools like followupthen.com to remind yourself to ping someone.

Perceived risk: The work will not get done well.

Risk mitigation strategy: Take time to think through the work that you pass off to others. Identify whether you’re in the direction, coaching, support, or straight delegation stage – both with the individual and with the task. Tailor your management approach accordingly. Always factor in buffer time for work to be reviewed and edited.

By following this three-step strategy, you can delegate effectively and invest your time in growing your business — without burning out.

Elizabeth Grace Saunders is the founder and CEO of Real Life E®, a time coaching and training company, and the author of “The 3 Secrets to Effective Time Investment: How to Achieve More Success With Less Stress.”

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

How to Make the Best Startup Decisions

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Senior businessman thinking and making choice while looking up

I have unwittingly made some bad decisions in my 28 years on this earth, but every day I make better ones. Reflecting on this, it is clear that making the right calls, large and small, requires certain prerequisites and a thoughtful decision-making process. These considerations are especially important in a startup, where you will never have perfect information when making a decision.

The success or failure of your startup results from nothing more than the series of small, medium and large decisions that you act on . Make more right decisions than wrong ones and your startup will be more likely to succeed. In my experience, the best startup decisions are the result of a carefully thought out process, as follows.

First, the Prerequisites

The conditions below must be met before you start the decision-making process. This is imperative, as most bad decisions are made inadvertently because some or all of these conditions are not met first.

  1. Follow your passions. For most world-class entrepreneurs, passion does not come primarily from the prospect of financial gain or personal notoriety; it comes from an innate desire to change the world. To make the right decisions for your startup, you must believe that if your startup succeeds, you will change the world in the ways you desire. The more your startup aligns with your passions, the more confident you will feel that you are making the right decisions for the right reasons.
  2. Embrace the reality. You have to be able to properly assess and accept reality. Smart entrepreneurs do not see the glass as half-full or half-empty; they see a glass with a certain amount of water. Then, they decide to drink the water, or fill up the glass with more water. To make the right decisions, you must first see things as they really are.
  3. Practice some balance. Your mind, body, and soul must be balanced before you can make good decisions. This is perhaps the most important prerequisite, and one that most entrepreneurs brazenly ignore. Startup culture encourages over-work and over-play; to be balanced you must also be mindful of your health and spiritual life, not just stimulating your mind.

The Decision-Making Process

Only after you know that the above prerequisites hold true, you can move on to the decision-making process. Below is the step-by-step process that works for me (inspiration), but you may follow a different process.

Let’s set up a scenario and walk through it. In our sample scenario, we are trying to figure out the primary customer type to market your startup’s solution to.

  1. Identify the decision. Clearly identify the single decision you want to make and do not let extraneous things fog it up. In the sample scenario, you might ask yourself, “Out of my entire market of potential customers, who is my startup’s one highest-revenue-generating customer?”
  2. Identify your options. Lay out the different options you have based on your own knowledge, keeping in mind the values that are important to your startup. In our example, you will now identify the different customer types that can generate revenue for your startup. And if we’re being realistic, you might eliminate certain customer types at this step as they are not feasible to reach.
  3. Gather information. Collect as much information as is pragmatic about your options. In our setup, you might research different customer segments to gain further insight into your startup’s market and reduce your blindness. Utilize emerging tools such asClarity.fm to talk with the right experts and Compass.co to help put market data into the right context for your startup. After conducting research, you may end up eliminating a certain revenue-generating customer type, because it doesn’t match your startup’s vision or the context you are working within.
  4. Make and implement the decision. Finally, the fun part: You get to make a decision and act on it! The decision should incorporate the information you have gathered, your gut instinct and your startup’s vision. In our example, you would make a firm decision on which customer segment you will target and start marketing to that segment (the marketing strategies you use may be a separate decision).
  5. Evaluate the outcomes. Evaluate objectively if you made the right decision. Some questions you can ask in our sample scenario include: Is my startup solving a real need for this customer? How much revenue has been generated? Am I convinced that this was the right customer to target or should I target another customer? If you have balance in your life when thinking through such questions (i.e. your mental well-being is not solely dependent on startup success), you can make a proper evaluation. If you conclude you made the wrong decision, assure the prerequisites are really met and start over from step one.

In a startup, as in life, you will seldom have enough information to conclusively make the right decisions. To a certain extent, you have to rely on your gut instinct, especially as most decisions are interdependent (i.e. picking the highest revenue-generating customer may not lead to the most cost-effective marketing strategy).

When decision time comes, regardless of whether it is a small or a significant decision, make sure that you are passionate for the right reasons, thinking realistically, practicing balance in your life and following a thoughtful decision-making process. If you do these things, you will you make the right calls more often than not, and your startup will be better for it.

A version of this article originally appeared on Medium.

Naveed Lalani is the Founder and CEO of Portable Boutique Inc., a company that creates Plug & Play Bitcoin Widgets. Previously, Naveed was Chief Strategy Officer at DonorNation.org, and Co-Founder at Rally.org. Naveed gives back by advising the Thiel Fellowship and leading entrepreneurship initiatives at the Ismaili Professionals Network.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

Have You Joined the Content Marketing Movement?

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In the last few years, the words “content marketing” have become buzzwords in the corporate business, marketing, digital and media space. But what is it really? Content marketing as defined by the Content Marketing Institute (CMI):

Content marketing is a marketing technique of creating and distributing relevant and valuable content to attract, acquire and engage a clearly defined and understood target audience — with the objective of driving profitable customer action.

Content marketing is becoming the new black from both a quantity and quality standpoint for individuals throughout the world. Some have stumbled into this world. Businesses both large and small are realizing that in order to compete, they must embrace this new era of interaction and develop true content marketing programs. Content marketing is becoming a disruptive force. In the past, marketing pros relied on production, publishing and promotional amplification tools. Content is the fuel that makes all of those platforms run. However, a few blog posts or an email campaign won’t suffice anymore.

Provide Value With Content

Relevant content coming from a business through a thought leadership perspective has a considerable effect on attracting and retaining customers. It’s not hokey, it’s not a pitch and it’s not everyday sales — it truly has become an educational and informative way to deliver knowledge and content to build brand loyalty and awareness.

A study by Roper Public Affairs shows that 80 percent of business decision makers prefer to get company information in article form rather than in an advertisement. Seventy percent say content marketing makes them feel closer to a company, while 60 percent say that company content helps them make better product decisions. “Content marketing works because it delivers relevant proof of value,” says interactive content marketing strategist Mark O’Renick. Quality content marketing engages consumers to look at a business differently.

Many C-suite, advertising and marketing executives believe their company has great content to shoot out and share in the public arena, but they don’t feel they can do this quickly enough or keep it moving through a streamlined process. Spreadsheets, emails and project management systems have all been used by marketing teams in recent times to churn out content on a routine basis. This has led to a whole new industry of technology solutions that make your typical marketing editorial calendar look like a thing of the Stone Age.

Work Smarter

A Kansas City, Missouri-based startup, DivvyHQ, realized that content marketing is the present and the future of marketing. Their founders, both from the digital agency world, developed an ideation, planning and production workflow specialty tool to help businesses and online publishers embrace content marketing and collaboration, but in a manner that allows the user or users to do so in a more efficient way without all the headaches. Simply put, DivvyHQ aims to take content marketers out of spreadsheet, email, storage and organizational hell and alleviate the challenging manual and laborious process. Corporations such as Intel, Toyota, Bed Bath & Beyond, Walmart, Sprint, H & R Block, Travelocity and Adobe have all worked with DivvyHQ. PR and media giants Ogilvy, Edelman and the National Geographic Channel have also used the product to streamline their content needs.

“Despite the traditional publishing industry taking a beating over the last decade, companies can learn a lot from the day-to-day planning methods, scheduling tools and production processes that help publishers hit deadlines and crank out great content every day,” says content marketing expert Brody Dorland.

Turn to the Cloud

Companies and enterprise level organizations who handle multiple individuals and tasks are finding out they need a way to plan, divide and conquer their content marketing and editorial needs on the cloud. They have discovered they also need ways to break down the internal silos in the workplace. Some have used the old fashioned approach and tried breaking down physical walls in their office to get their employees and content producers to talk. There is an easier way. Virtual, real-time sharing and collaboration significantly improves these situations and breaks down silo walls.

Dorland believes, “Simplifying things and leveraging the cloud to help global, decentralized content teams collaborate, share assets and increase the quantity and quality of their content output is huge right now.”

The content marketing phenomenon isn’t going away. Content collaboration and team calendaring is on the upswing. The spreadsheet free editorial calendar is the new king of the castle. Companies both large and small are yearning and will continue to yearn for high-powered, specific content marketing tools to help take their business to the next level.

Content marketing is the new black.

A version of this post originally appeared here

@JasonGrill is the founder of JGrill Media where he consults on media relations, public affairs and strategies and government relations. Under same umbrella, he works in the media as a local and national writer/contributor, radio host and television analyst/commentator. He is the co-founder of Sock 101.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

10 Best Lead Generating Tools

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Question: What’s the most successful giveaway — eBooks, webinars, coupons or vouchers, etc. — you’ve used to drive lead generation, ever?

Full-Sized eBooks

“eBooks deliver a ton of value. The fact that a consumer is getting an entire book for free is perceived to have a LOT of value. For most people, it’s always worth taking the time to fill out a few lines on an opt-in form.”

Richard Lorenzen, Fifth Avenue Brands

A Customized Training Quiz

“I rolled out a fully customized training based on a quiz for my email opt-in early in 2012, and it has been really well-received. The idea is that you can get a little extra information about your prospects, even as you are delivering a ton of value to them. You can see my example at http://Websitecheckuptool.com.”

Nathalie Lussier, Nathalie Lussier Media Inc.

Gift Cards

“Webinars and eBooks are attractive, but most potential customers are more motivated by cold, hard cash. But that’s not to say that your giveaways need to be expensive. Keep it at $5 and you’ll still get solid responses.”

Andrew Schrage, Money Crashers Personal Finance

Presentations on SlideShare

“Post a valuable presentation to SlideShare (http://www.slideshare.net). Doing so will help your SEO, establish you in the industry, tease your business, tap into the existing SlideShare network and optimize your presentation for social media. You’ll be surprised by the number of views you get soon after posting. Secret tip: Load your presentation up with an SEO-rich script and use images over the top as the slides.”

Benjamin Leis, Sweat EquiTees

An Ultimate Industry Guide

“A while back, we created an “Ultimate Guide” eBook for our industry. Coupons and vouchers are good, but if you really want people to purchase your product or service, give them your expertise. eBooks offer great value to the clients and, in turn, make them more likely to view you as the authority in your industry.”

Nick Friedman, College Hunks Hauling Junk

One Product Each Day

“In March 2013, we created the “Mod-a-Day Giveaway.” The idea was to give away a different product each day for a month. By committing to doing this daily, we created a reason for people to continue to engage. Of course, we’re having other conversations on social media, too, which allows these prospects to learn more about what we stand for. Stand by your own product and offer that for leads!”

Aaron Schwartz, Modify Watches

The Right eBook

“I have four eBooks that I wrote as a set several years ago that are still driving traffic to my website on a regular basis, as well as converting traffic to leads — despite having no gateway (such as a requirement to subscribe to a newsletter for access). These aren’t any old eBooks, though: They were written to specifically address the four questions I get most often from prospects.”

Thursday Bram, Hyper Modern Consulting

Discount Coupons

“Discount coupons are the clear winner for our e-commerce business to drive leads/sales. Once we added a coupon sign-up icon on our website, sales revenue increased by 30 percent. When the online shopper perceives he is getting a good deal in the form of a discount, he is far more likely to convert to a sale. Make sure you set an expiration date to create a sense of urgency to purchase. “

Anthony Saladino, Kitchen Cabinet Kings

A Hardbound Book

“I wrote a book, and we offer delivery to your door for free! It really helps us stand out and has done a great job with lead gen. “60 Seconds: How to Tell Your Company’s Story and the Brain Science to Make It Stick” has useful info for people to make their own videos, hire and work with our competitors or work with us to produce a great video. “

Andrew Angus, Switch Video

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

The 3 Most Important Lessons I’ve Learned from Starting Up

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I’ve been an entrepreneur for more than half my life. At 16, I founded Buzz Marketing Group, the youth marketing and influencer agency I still run today. It’s been a long road to get to where I am today, but I’ve loved every minute of this journey. Back in 1996, it was rare to be a teen entrepreneur. Now, I feel old!

incontent3But wisdom certainly comes with age and experience, and I’m happy to share with you some tips that have helped me throughout my career:

1. Always remember that everyone is important. There are no little people.

One of my biggest pet peeves is when people ignore my assistant or employees, thinking they can directly connect with me. I surround myself with people much smarter and better than me in all areas, and those people deserve respect.

Today’s assistant is tomorrow’s Vice President. How you treat people matters. In today’s world, your main contact could change positions overnight. It’s important to treat everyone with equal importance. And make sure this is authentic. I genuinely care about the people I work with, their families, their lives. It’s important to be totally vested.

2. You can always make more money, but you can never make more time. Use your time wisely.

I’m more likely to be upset by a 30-minute delay in a meeting than a 10 percent reduction to an invoice! I always tell my team we can make more money, but we can never make more time. Repeat this to yourself all day long. Focus on ways to be more efficient, delegate projects to someone who can do it quicker and better, and do not waste time. And please, please, please don’t waste time in meetings that don’t yield results.

I’m a big fan of Action Method and their process for making ideas happen. Always make sure meetings include action steps so it’s easier to pass along info to the right person to yield the right results. Make sure that everyone understands next steps and owns their next step. This saves time that can ultimately be put to use doing something else. Miscommunication and lack of clarity are big time suckers, and getting a handle on these issues will save you time and increase your bottom line.

3. If you fail to plan, you plan to fail.

This doesn’t mean that you need to script every detail of your life, but you need to have a roadmap. Even though I use the word plan, I really mean you need to have a vision. Where do you see yourself? Do you meditate on this vision? Can you see what it takes to get to that vision? Too often we get caught up in the minute details of things, and we lose focus on the big picture.

You have to give yourself time to do a daily check-in. For me, this happens first thing in the morning. I spend 15 to 30 minutes in a quiet mental space. This helps me go into my day fully focused. I also spend at least 15 minutes “free writing,” hoping to open up my creative space. I always get new ideas or think of solutions to existing problems. As entrepreneurs, if we can’t get ourselves into a place where we can innovate or problem solve, this is a problem. So always make sure you have a notebook (or smartphone) with you to take quick notes when an idea or solution comes to you. And focus on your vision.

Tina Wells, founder and CEO of Buzz Marketing Group earned her B.A. in Communication Arts graduating with honors from Hood College in 2002. She is the author of the tween series Mackenzie Blue, published by HarperCollins Childrens Books.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

9 Simple–But Hard–Lessons for Aspiring Entrepreneurs

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The first step in starting up is recognizing the right opportunity. Most opportunities are easy to spot: Just look at the problems you are already facing. For instance, my first startup (founded in ’08) was a banner network for social media networks called AdParlor, which a work colleague and I started in order to solve a problem we were facing ourselves: The need to invest in advertising to gain users on Facebook apps.

incontent3The idea for my second, BookMyCity, was hatched in 2012, when my girlfriend and I went for a mini-getaway to South Beach during “spa month.” We quickly discovered that there was no central location to book appointments for a service like spa treatments online (as you could for a restaurant table). A year later, BookMyCity was born to easily connect businesses and local customers online, managing availability and offering one-stop booking.

Throughout both experiences, however, I learned that the only way to really seize opportunities like these is to go all in and really get to know the audience you’re serving. It’s not easy, but here are a few of my personal lessons on success as an entrepreneur:

  1. Get comfortable being uncomfortable. I like to call entrepreneurship a roller coaster. There are massive highs and massive lows. This is what drives me; the lows are inevitable, but the high coming from a massive low is exhilarating.
  2. Commit yourself. You can have results or excuses; not both. Set your personal bar and own it – your center of influence is you. Don’t do things halfway and don’t procrastinate. If you are committing to become an entrepreneur, then put yourself 100 percent in it. Forget week-long vacations.
  3. Really understand your clients/customers/target audience. Do your homework on who your clients are. Make sure that whatever you are creating, you have family members or friends who would actually use it. Find out all you can for free from them. After that, take your idea of the product or service, put it in a presentable format, and take it to a friend of a friend of a friend who won’t be afraid to tell you what they really think.
  4. Get connected. Every interaction is a potential opportunity! Networking is the best way to get ahead in the world. In the online world, use LinkedIn, Facebook, Twitter to get connected with potential customers, investors, advisors. In the offline world, go to conferences and after-parties in your field and connect with entrepreneurs. You never know where or how your paths will cross.
  5. Prioritize. Whatever you are producing, aim to be the best and don’t settle for mediocre. That being said, make sure to have priorities on which components should be done first and will have the most impact. Iterate countless times at the design phase until that component is simple to use/understand.
  6. Team up. And if you want a partner, find a good one and be a good one. A good partner can make or break your company, especially if you are not used to the highs and lows of entrepreneurship. Having a partner to bounce ideas off of is much different than bouncing those ideas off of friends and family. You need someone who will be immersed in the business just as deeply as you are for an effective partnership.
  7. Find your balance. Remember to take short day-long breaks here and there. Burning out is very inefficient and can happen quickly if you go too hard for too long. Take a weekend off and recharge once in a while.
  8. Say what you mean and mean what you say. Keep promises. Don’t change meeting times. Be reliable.
  9. Make it fun! Starting up is hard work, but that doesn’t mean you can’t have fun. If you’re doing something you love, this part is easy.

My advice for aspiring entrepreneurs is simple: Start by doing something you love. If you currently work full time, pursue your idea after your official work hours. Join groups, go to conferences, ask questions and always keep your eyes and ears open. With enough dedication, you will surely find something that can be created, done better or done more efficiently. When you do, jump in — that’s when the hard work (and roller-coaster life) really begins.

In June 2013, Kristaps founded BookMyCity.com.  BookMyCity (https://www.bookmycity.com) is an online promotion, booking and scheduling platform for service-oriented businesses. It lets customers find all sorts of services in their area and book appointments right on the spot.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

10 Simple Tips to Get Better at Multitasking

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Question: Everyone’s favorite productivity tip is to simply focus. But when you have no choice, what is your best tip for multitasking smarter?

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Wear a Watch With a Timer

“I recommend deciding which tasks you’re going to complete each day and then wearing a watch that beeps every hour to help you keep track of passing time. It’s easy for us to get caught up in the details of a task and spend too much time on it, so staying conscious of how much time you’re spending on each task is the key to working faster and being more productive.”

Ziver Birg ZIVELO

incontent3Write It Down, and Take Three at a Time

“Only have three priorities at once. I am a sophomore in college, so I always write out what I need to do to complete my week. However, I star one thing in each category (work, school, other) that I need to complete first. When I cross that off, I star something else and if I finish a category, I am able to use that star in another category. Write it down!”

Bryan Silverman Star Toilet Paper

Only Multitask When You Don’t Need to Devote Your Full Attention

“All — and I do mean all — of the research currently available shows that multitasking is a productivity killer. Don’t do it. The only acceptable time to purposefully multitask is when you’re performing activities that don’t require your full attention. For example, you can respond to emails while listening to music or take a non-critical call while walking or driving. “

Emerson Spartz Spartz

Don’t Multitask

“I’m often amazed at how much more I can get done when I don’t multitask. If I’m going to go on social media, then I will just go and enjoy myself and not pretend that I’m doing other work. If I’m writing, I shut down all other distractions. The same goes for checking email, phone calls — you name it. Keep your focus lasered, and see how much faster you close the loop.”

Nathalie Lussier Nathalie Lussier Media Inc.

Use Offline Email

“One of the main ways that folks multitask is by balancing email responses with other projects, but the biggest distractions are new incoming emails. Work in an “offline” state so you can multitask across known projects and avoid any new surprises that will just create more work.”

Aaron Schwartz Modify Watches

Know Your Limits

“Don’t try to handle too much at once. This is when mistakes are made. Instead, prioritize your tasks and make sure you are dedicating enough attention to the most important.”

Nicholas Gremion Free-eBooks.net

Get an Extra Set of Hands

“Everyone sings the praises of multitasking. It’s a simple math equation: More tasks can be completed with four hands than with two! To multitask smarter, hire someone to help. This isn’t just about delegating one-off tasks. With my executive assistant on my team, I am consistently able to be much more productive and effective. “

David Ehrenberg Early Growth Financial Services

Keep a List of Short Tasks Handy

“Multitasking is only effective if you’re just looking for ways to fill time when you are waiting for something else to finish. Keep a list of short tasks that you can work on while you’re waiting, like updating a contact in your address book or sending out a reminder email. Try to avoid anything that you can get sucked into (like social media) during these short bits of time.”

Thursday Bram Hyper Modern Consulting

Remember: Two Is Better Than One

“While it’s ideal to focus on one task at a time, it’s simply not realistic for the busy life of an entrepreneur. At my office, my dual-monitor setup allows me to fly through multiple tasks with countless tabs open. My productivity improved exponentially using dual monitors, and now I couldn’t imagine working any other way. “

Anthony Saladino Kitchen Cabinet Kings

Plan to Avoid It

“Take the time to build a schedule that avoids the need (as much as possible) to multitask. Generally with multitasking, you end up being less efficient. I diligently keep a running to-do list and a running follow-up list, and then I prioritize my time based on those lists. It is also important to give yourself a small break between tasks to keep your focus and energy level high all day long.”

Anderson Shoenrock ScanDigital

 The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

How Much Should You Spend On Marketing?

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If you’re wondering what your marketing budget should be, you’re not alone. This is the million-dollar question: How can you be sure you’re spending the right amount of money on the right types of marketing? Many say it’s an art, not a science. Others argue that there is a clear equation that can help you to calculate exactly how much of your marketing dollars to place where. Simply figure out the equation, enter your variables, and voila.

incontent3In truth, it’s a little bit of both. With a little thought, a little math, a little data, and a little creativity, it is possible to have a good idea of how much to invest in marketing for the highest possible return. In terms of “return,” I have a strong finance view. Simply put, the role of marketing is to create leads and business opportunities. You should always return to this metric. 

The key to ROI marketing is to not only determine your marketing budget, but to consistently building your company revenue. Your ROI always needs to link back to actual sales.

Return on Investment Marketing

ROI marketing is a measurement tool. It measures how much profit you make on a given marketing investment. To figure out the return on your investment, you need to identify a few figures to plug into your ROI formulas (as long as you are consistent, you can define your terms however you choose):

  • Cost of goods sold (COGS): The actual cost to produce your product (or provide your service)
  • Marketing investment: Media cost or production cost
  • Revenue: Your total revenue or your gross or net profit

The Components of ROI Marketing

There are six key components of ROI marketing:

  1. Understanding lifetime customer value. Once you know this, you can begin to figure out how much you should expect to spend on new customer acquisition. To calculate the lifetime value of a customer, you need to identify the following variables: average annual revenue per customer, average gross profit margin (before any marketing expense), cost of capital, and average number of years per customer.
  2. Estimating target acquisition cost per customer cost. Look at your company data. Take the total cost of your marketing budget and divide by the number of customers you won with this investment. This is your historic acquisition price.
  3. Determining your marketing budget. Divide your target revenue by the average customer revenue. Then multiply this number by the target acquisition price. Once you have your ROI goal and overall annual revenue goal, calculate your targeted marketing spend.
  4. Predicting which tactic will help you to realize your customer acquisition goals. Use the by-product of your calculations to make some informed decisions as to which marketing strategy will be most successful in helping you to achieve your goals.
  5. Setting your marketing ROI goal. Once you have established your ROI threshold, stick to it. If a marketing initiative isn’t hitting the threshold, cut it. Put your marketing dollars where you know they will have a greater impact.
  6. Monitoring your ROI. Measure, measure, and measure again. Use your results to continuously improve your campaigns and maximize your marketing dollars.

ROI Marketing: More Than a Measurement

How you choose to track your marketing spend and calculate your ROI marketing can differ from company to company. It’s important that you make the effort to add some rigor to your marketing activities. Even if your calculations aren’t exact, they can still show you clear trends of which marketing activities are getting real results and which aren’t. And again, results means actual sales.

With a small business, you can’t afford to waste your funds on marketing with low ROI. But calculating the best marketing spend isn’t just about managing your costs; it’s also about making sure that you are using your limited money to get the best ROI. You don’t want to miss any opportunities to help your business to acquire customers and earn revenue.

Ultimately, ROI marketing is more than a measure, it’s also a philosophy. But you can’t implement ROI marketing without making a larger organizational change. This is no small task.

Some early-stage startups with limited funding might view marketing as a low priority; an unnecessary cost. In fact, marketing is not just an outlay of capital. It’s an investment back into your company — not a drain on it. ROI marketing helps you to justify your investments, supporting the old adage that you need money to make money.

A version of this post originally appeared on the author’s blog.

David Ehrenberg is the founder and CEO of Early Growth Financial Services, an outsourced financial services firm that provides early-stage companies with day-to-day transactional accounting, CFO service, tax, and valuation services and support. He’s a financial expert and startup mentor whose passion is helping businesses focus on what they do best. Follow David @EarlyGrowthFS.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.