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Writing

I came across this great post today about how many businesses blow the prose written for their website by targeting the wrong reader, especially startups.  μ Web Writing: The Good, Bad and Ugly If you don't have time to read the full post (it's not that long), this excerpt about sums it up: Take a page from psychologist Abraham Maslow, who spent his life researching and compiling the human hierarchy of needs. Here’s a breakdown of the needs and desires people try to fulfill, as compiled neatly in the New York Times bestseller Made to Stick:
  • Transcendence: help others realize their potential
  • Self-actualization: realize your own potential, self-fulfillment, peak experiences
  • Aesthetic: symmetry, order, beauty, balance
  • Learning: know, understand, mentally connect
  • Esteem: achieve, be competent, gain approval, independence, status
  • Belonging: love, family, friends, affection
  • Security: protection, safety, stability
  • Physical: hunger, thirst, bodily comfort
You should follow @seanMeverett on Twitter here.

Seven Deadly Sins

Your marketing strategy should incorporate at least one of the seven deadly sins.  μ
  1. Wrath -- from Sun Tsu's The Art of War: if angry, then provoke.  An example is Southwest Airlines's Triple Crown advertisement in which they called out Northwest Airlines for "lying":
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  2. Greed -- save money or make money (if you're having trouble with this one, make checks payable to Sean Everett, contact me for the address)
  3. Sloth -- the strategy to use for laziness is simple -- show how easy the product/service is to use.  This sin also helps determine a monetization tactic:  subscription-based payments come to mind.
  4. Pride -- ah, the ego, which is likely the easiest to exploit.  Just give someone a reason to feel important, and they will throw their time and money at you.  Thanks Foursquare for allowing me to check into the hottest place in the city.
  5. Lust -- sex sells.  The panel on creating viral videos at SXSW 2010 made this video called Boobies & Kittens to prove a point: sex + cute = marketing juju
  6. Envy -- greed is a subset of envy, which is a more emotional than material state.  Exploit this sin by using the others-have-it-why-don't-you tactic.
  7. Gluttony -- mmm, delicious.  Try watching the Food Network on an empty stomach and you'll understand this one.
You should follow @seanMeverett on Twitter here.

The Problem

It all starts with the problem.  If you don't know what problem you're addressing, then you can't hope to know how to solve it.  μ
  • bit.ly solved the problem of sharing long links on Twitter (i.e., 140 character limit) by shortening them
  • Gmail solved the problem of finding specific emails years later by using their advanced search algorithm
  • Facebook solved the problem of the need for human connection by exploiting the laws of 6 degrees of separation and by incorporating picture uploading and tagging
Your "start"-up should start with the customer problem and build out from there.  The closer your problem is to the top of the pyramid below (the classic Maslow's Heirarchy of Needs), the better off your business prospects.
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You should follow @seanMeverett on Twitter here.

Comfort Zone

If you're not operating at least 10% outside your comfort zone, you're not living, you're already dying.  μ Whether you're about to give a presentation in front of a large audience or just accepted a new project that you have no clue how to do, that knot in the pit of your stomach means one thing:  this isn't a typical day.  Instead of fearing this feeling, try turning it on its head and realizing that it's making you feel more alive than normal. I've tried living my life over the past 5 years using this one fundamental methodology and it hasn't failed me yet.  It's allowed me to meet incredible new people, learn extremely complex and diverse topics, and accomplish things that my 21-year-old self would have balked at. In the end, it's not about taking a huge leap into the unknown.  Instead, it's about small moves.  Push yourself.  Stop living your life looking in the rearview and start living it like a rock star. As Jay-Z says, on to the next one... You should follow @seanMeverett on Twitter here.

Nine Business Models

There are 9 main business models you can choose from as an entrepreneur.  This guide gives you a succinct definition, example, success factors, and monetization tactic for each. If you don't know your business model's strategy, then you don't know what it takes to win.

Geographic

  • Definition:  a brick-and-mortar business with physical location(s)
  • Example:  a retail store
  • Success Factors:  site selection (i.e., who can move next door and how can you block competitors?)
  • Monetization Tactic:  sales

Channel

  • Definition:  eliminate or add a middleman
  • Example:  Apple eliminated the chip manufacturer middle-man when they built the iPad (they manufactured their own A4 chip)
  • Success Factors:  need extra capital or extra expertise
  • Monetization Tactic:  margin

New Technology

  • Definition:  any scalable technology (i.e., most of the technology companies that Silicon Valley VC's fund)
  • Example:  Evolyte Analytics, any web app or mobile app
  • Success Factors:  does it work and can you protect it?  does the market care?
  • Monetization Tactic:  sales (the hockey stick curve)

Image Marketing

  • Definition:  luxury goods or services
  • Example:  Louis Vuitton, Rolex, Armani
  • Success Factors:  better, cheaper different (always choose better & cheaper); how do you create & maintain it in the face of a fickle public?
  • Monetization Tactic:  margin
Brand = Awareness + Positive Meaning Your brand must represent uniqueness and offer value to customers.  In addition, it should meet all four of the following criteria:
  1. True
  2. Good
  3. Beautiful
  4. Simple

Low-Cost Producer

  • Definition:  produce a high volume of a product at a cost lower than competitors
  • Example:  the off brands of products you find at the grocery store
  • Success Factors:  how are you cheaper? remove waste (anything not adding value to customer, like Toyota's jidoka system of continuous improvement); commit to high volume; how easy is it to leapfrog competitor?
  • Monetization Tactic:  margin

Social Network

  • Definition:  social structure made of individuals or organizations connected by one or more specific types of interdependency (i.e., friendship,  financial exchange, beliefs, knowledge, hobbies, etc.)
  • Example:  Twitter, Facebook
  • Success Factors:   get big fast; must establish a trusted peer-to-peer relationship network; can you monetize it?
  • Monetization Tactic:  margin

High-Performance Image

  • Definition:  a premium product or service that needs a "standard" competitor to establish "high-performance" value in customer's mind
  • Example:  Rolex Submariner vs Seiko 100 meter diving watch in 1950s (Seiko's release a few years after Rolex allowed Rolex to be viewed as a premium and high-performance product)
  • Success Factors:  objective measures; committed to low volume (high margin); patient capital (need time to build)
  • Monetization Tactic:  margin

Commodity Producer

  • Definition:  a product that is exactly the same no matter who produces it (i.e., lacks qualitative differentiation)
  • Example:  paper, coal, copper
  • Success Factors:  control input or output prices
  • Monetization Tactic:  sales

Be A Crook

  • Definition:  performing any act that's against the law
  • Example:  white collar crime
  • Success Factors:  none, just ask yourself "when do I go to jail?"
  • Monetization Tactict:  sales
Important Note:  for any type of fad or inherently unpredictable business (e.g., fashion, financial services, etc.), these strategies reach their limits Special thanks to Greg Bunch for compiling some of this information. You should follow @seanMeverett on Twitter here.

How To Get An Idea

So you want to become an entrepreneur and are intrigued by the supposed "freedom" it allows you.  First, read my other post, Dreams, and if you're still convinced, then keep reading.  Now, you just need to figure out an appropriate idea that you can exploit profitably.  The few steps below will show you how to do just that.

The Idea

  1. First you need to pick an industry or a field.  This shouldn't be too difficult because it should be an area you're already passionate about (e.g., Apple products, fashion, music, etc).
  2. Then, immerse yourself in this area.  Find the most relevant blog posts, comment on them, and start tweeting about it.  Join a few of the most popular Facebook fan pages and take notice of the strategies and conversations taking place.
  3. Next, you need to start expanding your knowledge from the most popular sites, blogs, and fan pages to the more obscure yet still highly touted experts in the area.  If you're not following at least 50 blogs and 100 twitters in your specific niche area, and reading most of the information, then you're not fully immersed yet.
  4. By now you should be auto-magically identifying shortfalls, holes, and gaps in the industry.  These areas will soon become your playground because you've just found the un-tapped niches containing no competition.
  5. Now all you have to do is find the one that most appeals to you and you believe you can create an impact in.
  6. The rest is just details and execution.

The Rest

One piece of advice, though.  As you start to explore your new found idea, figure out a plan that gets you to the end goal as efficiently and cost effectively as possible.  You will not have the time or energy to go down side paths.  That's not to say your idea will not change, however.  I have iterated multiple times before finally finding the appropriate idea that resonates with the market.  For more detail in this area, read my other post, Entrepreneurship, which will show you how to develop the customer fit. You should follow @seanMeverett on Twitter here.

Selling In Person

Selling isn't about telling. Selling has become a dirty word because the mind's eye instantly sees some old, fat and grungy guy trying to hard-sell you on a VW Beetle from 1978.  Um, no thanks, and no I don't want to shake your hand. The key isn't practicing your pitch a million times and have a file-o-facts of how to answer objections.  No, it's much, much simpler than that.  Ask questions.  That's it. If you know the product or service you're promoting, then it's much easier to let the conversation happen naturally.  Besides, people like to talk about themselves and their problems even more, so let them.  Then, when  you hear an opening where your product/service can solve one of these problems, they're much more willing to listen for two reasons:
  1. They're already engaged in the conversation
  2. The context has already been established (their problem, your solution)
And boom goes the dynamite. You should follow @seanMeverett on Twitter here.

To Fund or Not To Fund

The timeliness question:  do you give up equity in your startup in exchange for some cash?  Well, the facts show that the number one reason new businesses fail is due to a lack of cash flow so that points to yes if you can't fund it yourself.  I take a contrarian approach. Some people say the irony of funding is that you can't get it until you don't need it anymore. I believe that the vast majority of startups, especially those that are not capital intensive, should not spent the ridiculous amount of time trying to woo potential investors for two reasons:
  1. Spend the time and money investing in your business and talking to customers about what they want in your product/service
  2. Money isn't the answer and it makes you lazy.  Instead of finding creative solutions to your problems, you'll just throw money at them and burn through the cash (and therefore equity) much faster than you would otherwise.
I believe that the best businesses are those that create recurring revenue streams.  Things that you spend the time setting up once, then the marginal cost for selling an additional unit is zero.  An example is a subscription-based web app.  You sign up and until you cancel, they continue to charge your credit card every month. You keep leveraging past successes in this area (in terms of profits, experience, and reputation) to build your next venture and so on, and so forth.  Here's the theory I use:
  • I like to start one type of business:  low barriers to entry
  • I compete and win based on two basic principles:  simplicity and exponentially better execution
You should follow @seanMeverett on Twitter here.