How to Build Your Company–One Painted Door at a Time

building company

Entrepreneurs are an interesting bunch. We’re visionary, constantly moving towards our idea of a better world. We’re also stubborn and hard-headed, convinced our way is the only way.

Those two character traits often make it challenging to do the one thing we really need to do: focus.

We have a hard time with focusing because we wake up one day, and we can clearly see what the world will look like when our ideas come to life. We see fully functioning businesses, software, and company cultures. In our minds, that’s already reality.

Unfortunately, it’s not actually–you know–reality.

I love the story of how oDesk figured out its business model. In the beginning there was no technology behind the site. Customers would post a job, and a woman named Sandy would handpick resumes to send back to the business owner. No one knew this is how things were working. On the outside it looked like a miraculous matching service that brought you the perfect outsourcer. From that manual model, the company was able to figure out what clients actually wanted.

“We didn’t build it because we would’ve built the wrong thing,” oDesk CEO Gary Swart says.

So, where do you start with this big vision that you’re testing out but not building yet? That’s the hardest problem for any entrepreneur because there are no articles on your particular business. Even if you’re in a crowded industry, there is no such thing as a playbook that will work for everyone.

Swart suggests “The Painted Door” method of customer discovery.

“Before you build it, why not put a painted door there and see if people walk through it?” he says. “As opposed to building the functionality and then having nobody show up.”

It’s such common advice in startup land, it’s almost cliche. And yet . . . and yet no one seems to take it seriously.

What if you took your grand idea, broke it down into a series of painted doors and, one door at a time, tested the waters? I know, I know. It’s way sexier to do everything at once–to dive in and go broke and crazy building your dream overnight.

Or, you could maintain your health and actually build a company that survives.

5 Ways You Can Champion Customer Success

customers

As every entrepreneur knows, happy customers are the key to a healthy business. And when ecstatic customers lead to referrals and repeat business, it’s a win-win.

It’s simple in theory, but many companies fail to execute. When you focus on quick sales and vanity metrics, you’re not keeping customers’ needs in mind and are losing out on opportunities for sustainable growth.

Putting the success of the people you serve first will help you retain loyal customers and attract new business. Taking this approach sets the stage for people to buy rather than being sold — an experience no one enjoys.

Selling and marketing to your customers with the goal of helping them succeed is the surest way to build a loyal customer base. In our business, we’ve boiled this concept down to a few critical elements:

1. Have the Right Conversations

The first step in achieving success should be defining it. Sometimes customers haven’t fully fleshed out their idea of success before seeking a product or service to solve their problem. They don’t always know exactly how they want things to look at the end of the process. But the right conversations can help you sort out their ideas of success and develop a viable plan.

We encounter this situation all the time. Clients will ask us to redesign their websites, but they don’t communicate what’s driving the need for this change. For example, Snohomish County in Washington asked us to create a website that was more accessible to its citizens. After multiple conversations, we learned that a third of its traffic was coming from mobile. Without that type of in-depth dialogue, we never would have found a solution that actually addressed its core problem.

2. Know the People You Work For

The more you can identify with your customers’ habits, ideas, lifestyles, and demographics, the more likely you’ll be able to deliver real results. Your company is in a perfect position to help clients discover and achieve their goals. But to get there, you have to understand what they want.

The Missouri-based Modern Litho print network is a great example of an organization that takes this approach. It dedicates a significant amount of resources to staying up to date in its clients’ industries, which range from automotive to education. It understands its customers’ goals so it can help them be successful in their industries.

3. Bridge the Gap Between People and Technology

Whether your customers are companies or individuals, there are always opportunities for people and technology to complement each other. Finding ways to bring people and technology together seamlessly can lead to breakthrough ideas and more efficient ways of doing things. Technology helps people do more with less, inspiring efficiency and saving time and money. Your customers’ definition of success will likely be linked to more efficient technology.

4. Be Flexible and Adaptable

The path to achieving success is full of roadblocks and speed bumps, and it differs from person to person. That’s why success generally requires some custom finesse. There’s no single answer to all client or customer problems in our on-demand world. Listen to what your customers need or what they say is important to them, and collaborate to find a workable solution instead of taking a one-size-fits-all approach to every problem.

5. Keep Your Promises

The companies or individuals you work for rely on your business to provide a solution. If you can’t deliver on your promise, you can’t help your customers achieve success. And without a sterling reputation and loyal customer base, your business will fail.

Whether they’re seeking a new mobile app or want to order takeout, you have to consistently deliver on your promise, and it’s important to establish a methodology that makes this possible every time. Remember that talk is cheap; keep your promise, and your customers will invest in your brand.

You don’t have to be a nonprofit or even a service-oriented business to be concerned about your customers’ success. If you have a T-shirt shop that caters to people who want organic clothing, offer information about your process and materials that proves they’re sustainable, and recommend other businesses that operate in the same way.

There’s nothing that can replace having a genuine interest in your customers’ well-being and helping them succeed in whatever they do. Keep customers’ success at the heart of your business, and they’ll thank you for it.

Mike Honeywell is the chief marketing officer of CivicPlus, a complete solution provider for local governments that facilitates their desired outcomes by helping align the right people, processes, and structures. Follow the company on Twitter.

7 Baseball Tactics That Will Help You Build a Quality Blog

blog

I was born and raised in Kansas City, so as you can probably guess, I’ve had baseball on the mind the past few months. Although my team didn’t clinch the championship, the journey made me realize that the process of making it to the World Series is similar to launching a blog, especially when it’s a new experience for the entire team.

Whether you manage a blog or not, the advantages of pushing out relevant content to your customers probably aren’t news to you. A company blog gives your brand a voice and an outlet for educating your audience and building meaningful connections.

Although many companies acknowledge these benefits, few have produced a blog that actually accomplishes these goals. And if you’re still on the fence about the ROI of blogging, know that companies that blog are 13 times more likely to drive positive ROI than those that don’t. But winning at blogging — like baseball — starts with a solid strategy.

Building a Winning Game Plan

You don’t just wing it when you go into the World Series — you develop a strategy that maximizes each player’s strengths. Creating an effective blog is more complicated than throwing up a few posts on a website. It takes vision to plan content that addresses specific customer concerns.

Without a solid content strategy, you run the risk of creating content that doesn’t advance your goals, confuses your audience, or comes off as generic. This won’t get you the organic ranking, social media shares, and audience engagement you’re looking for.

If you want your blog to knock it out of the park, you need to use the following tactics to build a winning strategy:

1. Analyze your players’ strengths.

Similar to a ball club, each of your team members has unique strengths that you must identify. Determine which topics fall under their specific areas of expertise, and let them run with it.

2. Find a good rotation.

Create an editorial calendar to schedule team members to blog each day, and figure out how often each person will contribute. Writing too much might burn someone out, but not giving employees enough opportunities could cause them to lose motivation. Set clear deadlines, and establish a strict publishing schedule so employees feel a sense of urgency and responsibility.

3. Remember that sometimes it’s wiser to bunt.

Don’t let your team worry about hitting a home run with every post. It’s not about being the best writer; it’s about consistently crafting relevant content that delivers value for your readers.

4. Bring in a pinch hitter.

If your team falls into a slump or has trouble thinking of new topics, invite a guest blogger to contribute, preferably an industry leader, influencer, or client who can add credibility to your blog, attract a larger audience, and inspire new ideas.

5. Have a great closer.

Find out who’s the best editor on your team, and have that person polish each post before publication. If no one on your team is right for the task, hiring an outside party or freelancer is an efficient and cost-effective way to cover your bases.

6. Pay attention to the stats.

Stats are everything in baseball, and they’re also key to understanding the aspects of your blog that are working. If shorter, punchier headlines generate more views and shares, consider sticking to this format for future posts. Make sure you’re constantly refining your strategy.

7. Remember that it’s just a game.

With all the pressure and stress surrounding their performance, baseball players can easily forget that at the end of the day, they’re playing a game. Make blogging fun for your team members by encouraging their creativity and positioning it as a way for them to share their unique insights with others.

Like baseball, a winning strategy will get your business noticed. A team that equips its players for success will attract more fans and viewers and sell more tickets. And by consistently publishing quality content on your blog, you can enjoy comparable perks.

Now get out there and play blog.

Brock Stechman is the co-founder of DivvyHQ, the simplest and most effective content planning and production workflow system available. Connect with him on Twitter.

Bootstrapping: the Good and The Bad

bootstrapping

When you start a business, there are many financing options to consider — friends and family, small business loans, angel investment, VCs — but there is no textbook solution for getting a new business off the ground.

One option that entrepreneurs, investors, and average Joes love to love is bootstrapping. Rather than seeking external funding, entrepreneurs who bootstrap their companies rely on savings, early cash flow and conservative money management. The age-old concept of the American dream lives on in the world of startups — we have pulled ourselves up by our bootstraps.

My co-founders and I have confronted the good, the bad, and the ugly of choosing not to use outside capital in the inception and growth of Ampush. Here’s my take on the double-edged sword known as bootstrapping:

Retaining Full Control

Without a board to impose its ideas, timelines or limits, we are able to be opportunistic, nimble and adaptive. We determine which strategic vision to follow. Since we don’t have to wait for approval, we can execute that vision or make changes at our own speed. We also learn at our own pace; we make mistakes but keep going. By retaining full control of the company, my co-founders — the people who understand the business best and run it day to day — and I are in control of its future.

For every pro of retaining full control, there is also a con. As an independent, we are responsible for making decisions that might be unpopular with clients, employees or partners, but that are right for the business. We are also unable to tap into the valuable networks of board members because — guess what! — we are the board. Because no one is looking over our collective shoulder, it can take much longer to figure out that we have made a mistake. These are not impossible hurdles to overcome, but it requires a little extra work and reaching out to mentors in the industry to lend their expertise.

Clients Take Center Stage

We often see other entrepreneurs build businesses that their VCs or boards want them to build, rather than ones their customers want. We don’t have that problem; we know who butters our bread (our clients) and we keep them front and center always when making decisions. We’re focused on their needs and making their lives better.

However, going at it alone can put limitations on our flexibility. What happens if we lose our biggest client? Everything will stop until they come back or we find other clients. Sometimes building the right solution for our clients is expensive and, without an injection of capital, we have to be scrappy when it comes to R&D.

Managing Resources

Because there’s no “free” money floating around, each new team member knows and appreciates the value of a dollar. After all, the founders went 18 months without a salary and found a way to get their first clients and travel to conferences for free. At Ampush, we call this hustle. One of our mottos is Invest Rather Than Spend — it keeps the team focused on creative ways to solve problems. There will be times when we do need to spend on something or someone, like recruiting or internal tools. But we only do so if we can ensure that these expenditures will reap bigger rewards.

Without outside investment, near-term cash flow and revenue almost always matter. We constantly thread the needle: keep growing aggressively while managing cash flow and planning for rainy days. While this near-term focus ensures that business will keep driving forward, as revenue is the key to the future, bootstrapping can hinder forward thinking and building for the long haul.

Bootstrapping a company is no easy feat, but it comes with a whole host of rewards. We are in full control of our destiny. We focus solely on our clients and are always aware of our resources and how to get the most out of them.

Jesse Pujji (@jspujji) is the CEO and Co-Founder of Ampush (@ampush), an advertising technology company that helps performance marketers acquire new users, generate sales, and re-engage customers on mobile. By powering full-service ad buying, management and insights, the AMP platform makes it easy for advertisers to reach people with smarter in-stream ads on Facebook, Twitter, and Google. Ampush is based in San Francisco with offices in Chicago and New York.

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.

It’s Time to Rethink the Idea of Startups

rethink

It’s time we take a serious look at what a “startup” actually is. We have to stop chasing unicorns as investors and the concept of acquisition by Google or Facebook as the foundation of value as founders.

Stop Saying Startup & Start Saying Tech Enabled Small Business – Paul Singh

The Coming Tech Bubble

According to venture capital investor Bill Gurley, the average MONTHLY burn rate of startups in Silicon Valley is $4 million per month. That’s the burn rate!

The vast majority of entrepreneurs would dream of having $500k one time, let alone $48 million a year, all while not making a dime in profit.

This is leading to the next 1999-like tech bubble explosion, but we could be having a massive growth in technology as the cost to build MVP’s is going down dramatically. Unfortunately, because of the investor need to chase unicorns, tons of great ideas get ignored. There are so many amazing B2B ideas out there that never get built because they are only a $10-50 million business.

It’s only a matter of time before this catches up to us and institutional investors realize so much private equity capital has been wasted. The second the IPO’s dry up, that money is gone.

Bringing Back Traditional Business Logic

As humans we seem unable to learn from our mistakes. In this context we’re only 15 years from the last one, so there is literally no excuse. It’s time both investors and entrepreneurs snap back to reality and think about creating companies with a legitimate chance of success, even if it’s on a smaller scale.

I don’t know about you, but I’ve never started a business without a plan to make money from day one. If that wasn’t in play, there was no point in taking the risk.

If I didn’t have a customer acquisition plan ready to go from day one, I didn’t move forward.

If there isn’t a reasonable chance of profit quickly, I didn’t move forward.

So much of this baseline logic seems to be applied to the extreme in some areas and completely ignored in others.

Creating Some Pipe Dreams & Crushing Others

It is completely realistic to build out MVP’s of most startup ideas for less than $100k these days. Don’t believe me? Call just about any development shop and ask them. I’ve owned one and know this is true. The cost is going down by the day.

Demand for B2C apps is going down dramatically while going up in B2B.

So why is it that we are constantly hearing about the latest funding of a startup that needs 100 million users to make money, but ideas that need 3,000 to be worth $50 million can’t raise $500k for scale.

This is leading to so many entrepreneurs completely ignoring a great idea just because it doesn’t have crazy sex appeal to Techcrunch or the Valley. On the flip side, people with proof of concept and initial customer base who just need small investment to grow quickly are quite frankly wasting time trying to raise chump change in comparison.

Let’s Change The Argument

If great B2B ideas are going unfunded, it might be time to reconsider the system of business loans for startups.

Since brick and mortar business models can get loans from the bank, SBA, and other lending institutions, why is it almost impossible to get these same type of loans for technology companies?

Our economy is primarily based on soft assets not hard, just ask the Federal Reserve and Wall Street.

So why do not all the same principles of business apply? Office space, employees, customers, revenue, taxes, insurance etc.

Banks look at assets, personal credit, business model etc. Very often it’s time in business, but others it’s not.

Let’s look at the idea of collateral. If you put up say $10k personally toward building a working software platform that costs $100k, is that not collateral?

Repossessing the code has value. Putting working software on the market will lead to purchase. Perhaps at a small or big loss, but that applies to lines of credit and many other options available to traditional businesses. It’s ultimately no more risky than the new bakery down the street.

Tech startups often fail because of the people involved, not because it was a bad idea. This is true in any business.

If we just re-framed the argument from “startup” to “tech enabled small business,” showed the true value of the assets being created, and allowed personal responsibility to be applied, not only would burn rates go down, the potential economic growth is amazing.

Let’s face it, when you’re responsible for the money, suddenly every dime being spent matters and efficiency and focus to turn a profit goes up.

Don’t Tackle An Elephant Head On

an elephant in the river

I’ve heard two different philosophies about building a successful company. One school of thought glorifies the idea of “disruption.” These are the Ubers of the world who set out to redefine or create entire industries.

Then there are the founders who believe you should watch what works for others and simply recreate it in order to achieve similar success. This approach can work when taking a model from niche market to niche market or from city to city.

Both models have their champions. And both sets of champions have plenty of bad things to say about the other approach. Personally, I like what I call the “Paul Singh approach.”

Don’t Tackle An Elephant Head On

In our podcast last week, Paul talked about the early days of 500 Startups, taking on giant investing firm Andreessen Horowitz. While Andreessen Horowitz had access to deal flow and didn’t have to work hard at finding investments, 500 Startups was young, unproven, and relatively smaller.

So, Paul and Dave McClure didn’t play the game the same way their larger competitors did. They chose to travel the world, spending most of the year in other cities, speaking and meeting startups. They built their portfolio by going to the companies–the exact opposite strategy most investment firms were using.

This is where “disruption” can play a big role. 500 Startups didn’t invent an industry; but they did re-imagine what an industry could look like and how to get business done. And, as we all know, they were successful with it. If they had chosen to play the same game as larger, more established firms, they probably would’ve lost.

But Know the Rules of the Game

We often hear stories of founders who built successful companies in industries they weren’t familiar with. They attribute their success to “not knowing any better.”

But, that’s not as common as we like to think it is. In the case off 500 Startups, if David and Paul didn’t know much about investing before they started, they learned quickly. After all, it’s vital to understand your industry. More common in real life is the entrepreneur who spent much of her career in a certain industry, saw a problem there, and figured out a way to solve it. Profitably.

If you don’t know the rules of the game you’re playing, you’ll never be able to judge which ones to break and which ones to keep. 99% these are the most important decisions you’ll make as you start up.

Want to know more about the “rules” of the game? We’re launching an awesome webinar series in the next few weeks and would love to have you join us. We’ll be talking about things like idea validation, pitching investors, and crowdfunding. Just pop your email address in the subscribe box, and we’ll keep you updated on all the important details.

Why Conversions Matter More Than Traffic

traffic on pin board vector

At the end of the day, website traffic is primarily a vanity metric. While I suppose you could say that higher traffic numbers are indicative of successful awareness-building initiatives and external marketing campaigns, it seems that the biggest benefit of measuring traffic metrics comes from establishing bragging rights amongst your peers.

“I just hit 50,000 uniques per month,” you might say. Or, “Last month, my site’s traffic increased by 25 percent!” That’s all well and good, but what I really want to know about are your conversion numbers.

To put things in perspective, I’d much rather have a website that gets 100 visitors per month and converts 15 percent of them into paying customers than a site that gets 100,000 uniques and only averages a 0.01 percent conversion rate. If I’m selling a product that retails for $200, that first scenario nets me $3,000 a month in sales. The second example gives me just $2,000 per month for my efforts.

If you have to pick one thing to focus on when it comes to your website’s performance, make it your conversion rate — not your visitor counts.  Here’s how to put a proper conversion rate optimization plan into place:

Identify Your Conversion Paths

Tracking conversions doesn’t necessarily mean tracking sales. Depending on your business’s structure and customer acquisition processes, “conversions” could include any of the following completed actions and more:

  • Purchasing a product
  • Signing up for a free trial
  • Requesting more information
  • Viewing a video
  • Downloading an ebook
  • Completing a lead generation form
  • Sharing your content on a social media website
  • Printing a coupon
  • Opting in to your email newsletter

It’s also likely that your website will have to measure more than one potential conversion action. If you can’t turn a visitor into a paying customer right away, for example, it’s probably still worth your time to pursue a secondary conversion option. Something like getting a future buyer to download a coupon.

It’s even possible that your website will offer all of the conversion options above. But for the purposes of launching a conversion rate optimization (CRO) program, focus on no more than 2-3 actions that have the biggest impact on your business’s bottom line.

Once you have these conversion actions identified, map out every step that a site visitor must take in order to complete the conversion process. You can break this down in terms of “entry,” “action” and “exit.”

For example, suppose your action is downloading a free ebook from a specific landing page on your site. To convert, visitors will need to enter your landing page from another page on your site that contains a link or call to action referring to the page, take theaction of downloading the book and then exit the action by landing on a “Thank You” page (preferably one that encourages them to share links to the book on their favorite social sites). Knowing each step in your conversion path will be important for installing analytics and tracking tools.

Implement Conversion Rate Tracking Tools

Now that you know what you want your visitors to do, you need to install a tracking tool that will tell you whether or not they’re doing it. One great tool for tracking many different types of conversions is Google Analytics, which offers Analytics Goals and Funnels to measure things like ebook downloads.

Once the visitor has finished their transaction, set up a “URL Destination” goal type to trigger whenever a visitor lands on the “thank-you.html” page, indicating that the download is complete. Google Analytics will assign a value of $25 to each completed conversion and track visitor movements throughout the site as they lead up to the conversion.

Note that, for the purposes of funnel visualization, page views can occur nonsequentially and still trigger a funnel match: If, for example, a visitor went to the “Services” page before the “About” page. Each individual step isn’t required to make it count as a conversion. In this case, if a visitor goes directly from “About” to the ebook landing page.

As this Goal gathers data, you can use the funnel visualization report to determine whether visitors are moving smoothly through the conversion path or if they’re falling out and the process needs to be improved.

This specific process can be used for most of the conversion actions listed above, though a full description of the setup process for each is beyond the scope of this article. Rest assured that if Google Analytics doesn’t meet your conversion path tracking needs, there are plenty of other tools out there that will. FoxMetrics and KISSMetrics, for example, are two programs that will work well if your goal monitoring needs are more complex.

Set Conversion Goals

Finally, keep in mind that your ultimate goal isn’t conversion rate tracking — it’s conversion rate optimization! You don’t just want to monitor whether or not your visitors are converting. You want to actually increase the total number of conversions.

Let’s say that the Google Analytics data captured indicates that roughly 5 percent of your overall site visitors are completing your desired ebook download action. Knowing that, you might make it your goal to increase this percentage two-fold. To get to that 10 percent conversion rate, you could try A/B split testing different variables on your ebook landing page, investing in new, more targeted traffic streams or making your calls-to-action more apparent throughout your site.

As time goes on, you’ll want to revisit both the goals you’ve set for yourself and how you’ve adjusted your course as needed. With regular improvements and a careful tracking, you’ll be able to do much more for your website’s performance than increase the number of visitors alone.

Sujan Patel has championed internet marketing and entrepreneurship for over a decade. His experience, ideas and strategies have helped 100s companies build and strengthen their businesses online. Sujan is the VP of Marketing at thisCLICKS, the makers ofWhen I Work — an employee scheduling software solution for small businesses. 

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.

4 Ways to Find the Right Pain Point for Your Startup

old man with aching head

I overheard a joke the other day. And while it was, admittedly, a little silly, it did hold a nugget of truth.

In the joke, an optimist and a pessimist are arguing over a glass of beer at a bar. “It’s half empty,” says the pessimist.

The optimist disagrees, claiming it’s half full.

The bartender, annoyed, comes over and promptly drinks the rest of the beer. “Now you’re both wrong,” he says.

The bartender is an opportunist — and a good one at that.

As an entrepreneur, you are, by nature, an opportunist. You see problems (and their solutions) where no one else does, and like the bartender, you’re inclined to capitalize on those situations and react.

You realize that a smartly timed move can create a niche for yourself and reach untapped markets with products and services your customers and competitors didn’t even know were needed.

That’s not to say you’re launching a risk-free startup. After all, there’s really no such thing.

But by pinpointing where people need a particular product or service and arming yourself with a powerful value proposition, you can carve your own place and make the market work for you. The hard part, of course, is knowing when and where your opportunity will strike.

Here are four tips to help you find your perfect opportunity and determine whether your ideas are viable:

Ask for Advice

When you come up with a stroke of genius or think you’ve found the perfect product idea, ask around. By questioning the potential market clientele, you’re gathering valuable feedback on whether your product idea is worth your while or even feasible.

While it’s easy to ask your friends and family, try to resist. Unless your buddies will actually be using the product or service you’ll be offering, don’t even bring them to mind. Head straight toward your potential client base, ask around, and take notes.

You should also seek advice from someone who has already launched a successful startup—especially if you’re new to entrepreneurship. They’ll have great insight into the unique nuances of the business world and help you avoid mistakes they’ve fallen trap to.

However, critically think through every piece of advice you receive. Just because it came from a “smart” person doesn’t mean it’s always right.

Calculate Your Costs Carefully

After you’ve gathered feedback, make sure you can afford to launch the project. No idea —even a great one — is immune to failure. Clients may like what you’re doing, but that doesn’t necessarily mean they’ll pay you enough money to make a profit.

Before you set your price, make sure it’s fair to your clients, but more than that, make sure it’s fair to you. People are often inclined to set their product or service at a cheaper price, but that could set a bad precedent, and it might make your investors unhappy.

Lastly, overestimate your overhead costs. Things are always more expensive than you expect, so account for that.

Reevaluate Your Plan

When in doubt, talk to a professional investor. He spends all day looking at business plans and can help you identify the flaws in yours. After the shortcomings are addressed, you can fine-tune your plan.

On that note, don’t be afraid to redraft your business plan a few times. You’re breaking new ground, after all, and there’s very little chance you’ll get it right the first time. Fixed problems are an entrepreneur’s best friend. They represent progress, so embrace it.

Take the Risk

When Airbnb and Uber surfaced, they didn’t twiddle their thumbs and wait for managers and taxi drivers to grant them permission to run their businesses. If they did, they wouldn’t have survived.

Instead, they went ahead with their business plans. By throwing regulatory caution to the wind— which, admittedly, is a scary risk — you can find a niche market that people don’t even know they need yet.

Assess whether the risk could take down your company (i.e., whether you could survive if the worst happened), and adjust accordingly. After all, for every Uber, there have been a dozen failures — but that’s how you succeed. To help mitigate this risk, ask your lawyer to see what the best course of action would be.

Thinking back to the optimist and pessimist at the bar, it’s evident that the real victor in the situation is the opportunist. By knowing the best time to act, you can corner your market and succeed in business, and your customers will flock. All you have to do is find your niche and act.

Benjamin Geyerhahn is an experienced entrepreneur, healthcare policy expert, and member of New York Governor Andrew Cuomo’s Health Benefit Exchange Regional Advisory Committee. He is the founder and CEO of BeneStream, which uses a combination of technology and a multilingual call center to guide employers and employees through the Medicaid enrollment process.

 

How to Determine Your Startup Revenue Model

Decision_Making-300x214

Software as a Service is a very alluring business strategy for a mobile web startup. In this model customers are dependent on the system, and tracking usage statistics is easy. It’s cheaper to add features than in the client-side model, and the all important code remains securely on private servers.

It’s also well-suited for mobile development, saving time and development costs. Responsive web design ensures service availability on a broad variety of devices, eliminating the necessity of developing apps for every device used to access the service.

As appealing as the model is, before providing even basic specifications to a team of app developers, it’s extremely important to have a well-defined startup revenue model. In order of increasing complexity, here are the most prominent revenue models for software as a service:

Advertisement

Advertisement is the simplest way to monetize a website. This model requires little back-end development; it’s unnecessary to keep a persistent database with personal information about customers. This method can also be used in conjunction with others to maximize return on investment.

On the other hand, advertisements can dilute branding and can distract customers from a site’s content. If there isn’t already a guaranteed user base, this may affect customer acquisition negatively.

Premium

This model allows the sale of memberships to a service. For enterprise applications with high demand, a business may be able to set the price of premium memberships at a level that will allow it to recoup costs and make a profit. In conjunction with the advertising-based model, it can provide an opportunity to expand profits by offering tiered service.
The development overhead for this model consists of a system for customers to create new accounts, a system to authenticate user identities securely, and a system for accepting payment.

Subscription

This model is essentially Premium, but with recurring payments. SaaS is very well-suited to this model, since customers need authenticated access to the service to use its features.

This model requires further back-end web development: the application database must track payment schedules and the business logic must include methods for expiry and cancellation of user accounts.

Customer acquisition will be more difficult with this model, especially for a startup, but may be more successful if the pre-launch strategy includes a well-received marketing campaign.

In-app Sales

This model allows the sale of goods or services, virtual or actual. In-app sales can be a cash cow… if that’s how the app was designed from the beginning.

In-app sales require a system for tracking what a user has purchased, and depending on what the application sells, can require additional infrastructure for new features.

Be Prepared

Choosing a revenue model should be a web entrepreneur’s top priority: putting off this crucial step or making last-minute changes can drive up costs and prolong development, miring a project in development hell. The revenue model defines how an application tracks its customers, and is therefore one of the first questions that needs to be answered.

The explosive proliferation of mobile devices and the growing demand for SaaS present a unique opportunity for mobile startups. The mobile startups that take full advantage of this opportunity maximize profits and minimize development time by choosing a revenue model before writing a single line of code.

4 Tips for Building a High-Performance Culture Around Constructive Feedback

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U.S. businesses spend $105 billion per year handling poorly performing employees. This unfortunate data indicates that subpar employees can harm a business both culturally and financially.

So how can entrepreneurs avoid or correct this issue? By building a company culture that embraces opportunities to share feedback.

Make Your Feedback Constructive

Continuous, transparent employee feedback is great, but not all feedback is created equal. Constructive criticism encourages people and incentivizes improvement, while non-constructive (i.e., destructive) feedback actually inhibits growth. Understanding the differences between these approaches will enhance your interactions with employees and expose their true potential.

To reach that true potential, be sure your feedback is:

  • Direct. Providing feedback can be uncomfortable, especially when someone needs a major behavioral adjustment. Dancing around an issue will only lead to confusion, but being direct will improve comprehension and lead to real change.
  • Solutions-oriented. Feedback becomes destructive when you tear employees down without building them back up. Creating a solutions-oriented conversation will help you and your employees focus less on poor behavior and more on ways they can improve.
  • Unemotional. Are you feeling angry or resentful? You may want to consider giving feedback at another time or having someone else address the issue. The goal of providing feedback is to inspire employees to redeem themselves. If you’re harboring ill feelings toward an employee, you should step away from the situation.

How to Build a Culture of Constructive Feedback

When employees and leaders feel comfortable communicating with one another about what they’re doing well and what they can improve upon, it creates a culture of openness and accountability. But there are some practices you must build into your culture to nurture this type of environment:

1. Lead by example. In his book, What You’re Really Meant to Do, Harvard Business School’s Robert Kaplan presents the idea that as business leaders become more senior, people are less likely to give them feedback or address shortcomings. Kaplan emphasizes how important it is for business leaders to actively seek feedback from team members, which allows them to grow and creates an environment where giving and receiving constructive feedback is normalized.

Leaders must also understand how to receive feedback well. This involves listening without interruption, asking questions for clarification, respectfully acknowledging what the person is saying, and taking time to think before reacting.

2. Deliver bad news constructively. There is always room for growth and improvement. People can’t fix problems if you don’t communicate them clearly. Underperforming for an extended period of time can also make someone feel insecure when tackling new projects.

When delivering bad news, avoid criticism, and state the facts instead. Talk about the behavior — not the person. After you’ve communicated the facts, provide solutions-oriented recommendations.

3. Make positive feedback a priority. People can receive too much criticism, but they can never receive too much encouragement. Celebrate the things your team is doing right on a regular basis. Schedule weekly staff meetings and encourage department leaders to submit weekly team victories. It’s important to celebrate company wins and emphasize that those accomplishments required team effort. Tools like Dunwello are making this easier.

4. Set company goals with your team. As your company grows and develops, set goals with your team. Once everyone is striving for the same mutually developed goals, it will be easier to hold one another accountable and give constructive feedback if others aren’t measuring up.

 

As the leader, you have the opportunity to build a unified and unstoppable team. By creating a work environment founded on constructive feedback, you can push your employees — and yourself — to grow personally and professionally. So probe your employees, open your ears, and find out what you can do better. The spike in performance and productivity might surprise you.

Brent Grinna is the founder and CEO of EverTrue, a leading social donor management platform. EverTrue harnesses social data to help higher education institutions raise more money and better engage alumni. Connect with EverTrue on LinkedIn and Twitter.

The Not-That-Hard Guide to Naming Your Startup

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You can read any number of articles about this subject. I’ve seen many a startup labor over this topic. Yes, it’s important. No, you shouldn’t let it hobble your progress and make it a miserable, emotion-laden battle with your cofounders. Here’s my short process to take the drama out of naming your startup.

Biggest advice: don’t get emotional. Remember that Amazon used to be a jungle and Verizon isn’t even a real thing. And while we’re at it, what the hell is a Lyft or an Uber? You can make this work.

Let your domain name drive the search. Use Domainr and go on a search for a domain name that you like. You likely aren’t going to find a .com that’s available anymore, so I recommend most new companies use either .co or .io at this point. They are growing in popularity and tend to be available. You’ll be surprised what decent ones you can come up with quickly if you think about it. The Domainr app is on my phone and it let’s me search any time I have an idea.

Keep it short. I personally prefer short domain names. They are easier to communicate and easier to type and remember.

Check your social handles. Once you find one check the social handles in this order: Twitter, LinkedIn, Facebook, Pinterest, Instagram. You’re looking for something you can register without having to change it across all the networks so people can find you easily on their network of choice.

Make it easy to communicate verbally (by phone). You might have a really good business name in your head (you think) but before you jump on it try communicating it by phone. If you have to spell it ten times that’s annoying and people will spell it wrong and you’ll lose business. I think this step is the most important one.

Make it relevant to the benefit you will provide your clients or customers. Don’t get too cute. No one cares about your vision for the company being communicated in an obscure acronym. Again, this isn’t about your feelings. Pick something functional that will close more business more quickly.

Did I miss anything you think is crucial?

6 Tips On Pitching Your Startup Idea To Angel Investors

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1. Put in sweat equity BEFORE you go after investors.

99% of investors have been in your shoes. Never forget that. They put in incredible time, effort and focus to become successful and now have the ability to help startups. If they don’t see themselves in you, the chances of them backing your company go down immensely.

2. Have real interaction with your target customers BEFORE you go pitch to investors.

So often startup founders get so tied up in their idea (and fear of it being stolen) all of their research is done in secret. No human interaction. Get out, talk to friends, co-workers and family. Call up people in your projected demographic and get their feedback on the idea. It’s amazing the insight and FREE feedback you will get that can help you answer questions from investors you never could have anticipated.

3. Do your homework and determine which investors are the right fit for your startup.

So many startup founders only focus on their pitch, not on who they are pitching to. Remember that you’re talking to a fellow human. While at the end of the day it may strictly come down to how good your idea is, most investors will tell you that it’s their faith in YOU as an entrepreneur that is the biggest factor.

4. Make sure to focus on the value proposition of your idea as a solution. Not just a how much money it can make.

No matter what your startup idea is, at the end of the day you have to appeal to investors as potential customers and paint a picture of how it solves a problem for the end user. If you are truly solving a problem, it then comes down to execution and marketing to gain success. If convince potential investors that your value proposition is realistic, they will pay attention to your valuation in much more detail.

5. Limit your pitch deck to 10 slides or less, have a short explainer video produced.

The investors get 30, 40, 50 ideas presented to them each month. Not to mention all of the companies they own and have invested in. Complex business plans and pitch decks often cause them to tune out of your presentation. Start your presentation with a well done video that explains your business and the value proposition. Then dive into your pitch deck. Video is a powerful way to gain attention, and also shows more dedication to your business idea than just a PowerPoint presentation.

6. Be prepared to fail over and over before you find an investor.

It’s amazing how many entrepreneurs become depressed after getting turned down on their first pitch and never do it again. Remember that gaining an investor is just like selling a potential customer. Not everyone will buy or believe in your product or service, so why would all investors? Make sure to walk in to your pitch confident that you will win investment capital. If you don’t…try try again.

How to Take Advantage of the Latest Trends in Crowdfunding

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Those of you familiar with crowdfunding know it’s quickly evolving into an industry itself. In fact, crowdfunding is predicted to create at least 270,000 jobs and inject $65 billion into the economy by 2014’s end.

As an entrepreneur (current or aspiring), how can crowdfunding help you grow your business? To find out, it’s helpful to understand the trends driving the most successful campaigns and to choose the right platform for your project.

Entrepreneurs can take advantage of these three big crowdfunding movements:

The Rise of the DIY Entrepreneur

In the past, entrepreneurs with business ideas relied on venture capital or raised seed funding from friends and family. Crowdfunding offers an advantage traditional methods don’t by providing validation as well as money. A successful campaign shows that there’s a market for what you offer. Getting additional funding is easier once an idea is proven viable.

For example, Bluff Works, a wrinkle-free men’s pants company, had over a thousand backers on Kickstarter and raised more than $128,000 — far exceeding its $13,500 goal. Its founder used the campaign to conduct market research and learned that customers wanted black pants, something he hadn’t considered when launching the campaign.

Leveraging an Existing Network

Another emerging trend is using your existing network to jump start a campaign. This works for entrepreneurs, writers and artists with devoted followings who are invested in what you have to say.

People enjoy the “story behind the story.” A behind-the-scenes look at what you intend to create increases your likelihood of getting funded. After losing her child, Angela Miller built support for her book by sharing her story on social media. Her campaign garnered 217 supporters (70 percent strangers) and raised $12,978 on Pubslush.

Funding Tech, Apparel and Video Production

Cutting-edge gadgets do especially well on crowdfunding sites. The Pebble Smartwatch raised over $10 million on Kickstarter, for example.

Fashion also gets a lot of coverage in the crowdfunding space. Stantt, a casual shirt company, raised cash on Kickstarter and was able to offer over 50 sizes, thanks to precise body measurements and 3D body scans.

Producing films costs a lot of money, and crowdfunding mitigates some of the financial risk. The “Veronica Mars” movie projectshattered Kickstarter records when it raised more than $5.7 million from 91,585 fans of the canceled show.

If your project fits into one of these categories, it’s made for crowdfunding. Even if it doesn’t, you can see what made these campaigns succeed: A real user need (Pebble), dissatisfaction with current offerings (Stantt), and a cult-like following (“Veronica Mars”).

Choosing the Right Platform for Your Campaign

Before setting up your campaign, evaluate the platforms available and weigh the advantages of each.

  • Kickstarter: This company specializes in creative projects (films, games, music, art, design and technology), all of which remain fully owned by their creators. The funding is all or nothing, meaning you must raise the entirety of your goal to receive any money.
  • Indiegogo: Geared toward the international community, Indiegogo supports 224 countries and territories, five currencies, and four languages.
  • Pubslush: My company, Pubslush, funds literary and publishing projects. Authors can evaluate interest in their ideas and learn readers’ demographics. Readers can pledge money to bring books to fruition.
  • Crowdfunder: Crowdfunder connects investors and entrepreneurs in film and entertainment, small business and technology. It serves North and South America and accepts minimum investments of $1,000.
  • StartSomeGood: This site specializes in social entrepreneurship and allows you to set a Tipping Point Goal (what a project must raise to make an impact) and an Ultimate Fundraising Goal.

Once you’ve chosen a platform, position your campaign for success.

  1. Learn from other campaigns. Review the most successful campaigns on different sites to see what worked. What wording did they use? What rewards were offered? How much interaction did the users have with backers?
  2. Get advice from those who’ve been there. Reach out to individuals who’ve run successful campaigns. Ask what worked well, what they’d do differently, and what insider tips they can offer.
  3. Develop a pre-campaign strategy. Campaigns that gain 30 percent of their goal within the first week are more likely to succeed. Get between 30 and 50 percent of your supporters in place before launching your campaign.

Crowdfunding opens a world of possibilities, but it’s not an easy out or a guaranteed way to get funding. But if you do your research, choose the appropriate platform, and promote your campaign before its launch, your odds of success are much better.

Amanda L. Barbara is the vice president and co-founder of Pubslush (www.pubslush.com), a global crowdfunding and analytics platform for the literary world. Follow on Twitter

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.

Digital Marketing Strategies for Startups

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Many startups end up spending more money than necessary.

Which is crazy because a company can be launched for much less than expected.

The key is to use a marketing strategy that is innovative, ROI focused, and customer-centric rather than one that relies on branding and traditional mass media. One of the best ways to accomplish this is through digital marketing.

The Case for Going Digital

Digital marketing is a great alternative to traditional media. Traditional media often requires spending hundreds of thousands, if not millions of dollars on radio, TV and billboards. In comparison, the Internet allows advertisers to test on a small scale, easily control costs and market to targeted prospects. That’s not to say that traditional media outlets are not effective. It’s just not viable for startups with small budgets.

There are many different ways to market online. The list includes social media, paid advertising, search engine optimization (SEO), email marketing, and more. Entrepreneurs can use these platforms in innovative ways in order to acquire customers even with small budgets.

For example, using integrated marketing can maximize the results of more than one advertising/marketing platform. Another example is identifying cost effective ways to get the word out about your company

Building an Audience for Social Media Platforms and Blogs

One way that new companies can establish themselves is through social media engagement and blogging. Using social media and blogs is a great way to build an audience, create relationships and interact with the target market. Many companies are using content marketing and leveraging relationships to build followers and readers for their social media platforms and blogs.

Creating high quality content and marketing it works really well because people respond to information that is relevant to them. In many cases, readers follow up with the content creator in order to subscribe and get additional content. This is a long term strategy that can take as long as one year before a business starts to see significant growth. But after the year mark, many businesses go on to establish brand awareness and immense market presence.

The Importance of Using Search and Integrating Different Strategies

Search engine optimization (SEO) is another way to acquire new leads and customers. It is a strategy that requires you to optimize various factors on and off your website to get your website to rank in the search results. People use the search engines to do everything from learning new information, comparing different products/services to researching businesses. Getting your website to rank in the top results for search terms related to your company will help you reach targeted prospects while also branding your business.

The perfect example of integrating different marketing strategies is using both content marketing and SEO together. A content marketing campaign will help build an audience for your blog and social media platforms while also helping you acquire backlinks. Additionally, backlinks are one of the biggest contributing factors to ranking well in the search engines. The visitors that result from the search engine rankings can be directed to impactful content which is likely to be shared.

Affordable Paid Advertising Platforms

If you have a modest budget to work with, it might be a good idea to use pay per click (PPC) advertising. This is an advertising platform that is similar to offline display advertising. It will display small ads in the search engines, and you only incur costs when somebody clicks on your ad. The best feature about this advertising method is that your ad only shows up when somebody searches for search terms you’ve bid for.

Retargeting can be used in addition to pay per click advertising. This is a type of display advertising where your ad is shown to visitors across a network of websites. When a visitor comes to your website, they are tagged with a browser cookie. Usually, once a visitor leaves, you lose the chance to market to them. But with retargeting, your message will be displayed across a network of sites, allowing you to follow up with them.

An innovative strategy that can be used to make this advertising more effective is to combine it with email marketing. By leveraging your existing email list, you can refer readers to one of your pages that will tag them with the cookie. This will ensure that your readers come across your ad while they are surfing other websites.

The lesson here is that there are many different ways for a startup entrepreneur to grow. Online channels can often enhance or replace a function of a business.

For instance, a social media account can be used as a public relations tool. The result is that there are no big expenses used to hire a public relations department or company. It’s really all about exploring different marketing channels and being innovative with them.