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There Is No Prize for Originality

Earlier today, I was reading a reddit.com post about a young man ready to graduate college this summer who was desperately looking to start his own business. He didn’t have a business idea and was looking to the readership to help him come up with one. I often suggest to clients with a desire to start a business, but who lack an credible idea, to simply find something that works in one place and considering bringing it to another.

For instance, Elliot and Ruth Handler went to Switzerland with their kids, Ken and Barbie. While there, they saw an adult doll dressed in work cloths. The doll was not a kid’s toy, but was marketed to adults. Up to that time, all dolls in the U.S. were marketed to young girls and were babies so that the girls could pretend that they were the doll’s mommy. As their daughter Barbie handled the doll, the Handlers got an idea. They replicated the doll in the U.S. and named them after their kids, Ken and Barbie. This new toy helped launch their company Mattel.

Learn more about how the Barbie doll helped launch Mattel.

In another example, I was watching a current affairs show on T.V. the other day. The story featured a bar in Tokyo that featured a show made up of robots. That bar is crazy popular in Tokyo. I asked myself why wouldn’t the same idea make sense here in the U.S.?

A number of years ago, I was opening an office to support a contract we had with HP in Stuttgart, German. As I sat in a lawyer’s office, discussing Germany’s employment laws, an automated window shade called a “Rollladen” began to come down. Fascinated by the idea of an automated shade, I asked the lawyer what that was all about. He explained that when it gets hot outside, the shades automatically close to reduce the load on the air conditioner and save energy. I asked myself why wouldn’t the same idea make sense here?

Finally, as a child in the 1960’s, I traveled to Germany for the summer to stay with my Aunt and Uncle who spoke very little English in what I call “my total German immersion vacation.” I made some friends over the summer, as all kids do, and was offered a milk box by one of my new friend’s parents one day. I had never see a drink in a box before, but it made incredible sense. Juice boxes were not introduced into the U.S. market until the 1980’s, some 20 years later, and they became an instant success. Again, why did it take so long for ideas like the juice box that was successful in one part of the world to make its debut here in the U.S.?

There is no prize for originality. Like my old boss, Debbie Sagen, once told me, “R&D stands for Ripoff and Duplicate.” So, if you are still looking for that one thing to start your next great business venture, look at what is popular somewhere else and consider bringing it to a new market.

Where will you find the next great product marketing idea?

This post was originally published March 3, 2017 at SteveBizblog.com. Follow Steve on Twitter @SteveImke

Business Planning

Business Planning Foundation – Begin With Strategy

Strategic Plan Sets the Foundation Annual Business Planning

Your company’s strategic plan creates a shared vision of what’s important to the organization and translates into a simple story about your organization’s future.

In a McKinsey Global Survey of more than 2,000 global executives, only one-third agreed that their corporate strategy approach represented “a distinct exercise that specifically addresses corporate-level strategy, portfolio composition issues.”

Increasing the time spent on strategy and involving more senior leaders in strategic dialogue makes it easier to stay ahead of emerging opportunities, respond quickly to unexpected threats and make timely decisions. An integrated PB&F framework links top-down, strategic targets to financial and operational bottom-up forecasts.

Key Questions To Answer When Preparing Your Strategic Plan
Mission –           

What is our purpose?

What do we do?

Vision –              

What is our picture of the future in three to five years?

Strategic Themes & Perspectives –        

What performance lenses should we use to evaluate results?

What are our focus areas?

What do we do better than anyone else?

What results do we need to achieve?

Objectives –     

What continuous improvement activities are needed to get results?

Strategy Map –

How do we create and improve value to customers and stakeholders?

Performance Measures and Targets –   

How will we know if we’re achieving the results we want?

Strategic Initiatives –    

What projects and programs will contribute to the desired results?

Note: this article was originally published at http://www.poewolfpartners.com. Follow Renita on Twitter: @RenitaWolf.

 

Clone Business

Are You a Clone Business?

Every day, entrepreneurs invest huge amounts of time and money to build what they think is a better mousetrap. However, all too often entrepreneurs struggle to articulate how their value proposition is fundamentally different. While many businesses make minor tweaks, they are fundamentally what I call clone businesses.

While there is room in the market for these businesses, clone businesses are just another participant in a red ocean where margins are frequently squeezed to the breaking point for all but the best managed businesses. Clone businesses with little differentiation from their competitors (such as janitorial companies, drywall contractors, etc.) essentially hang their success on the belief that other business owners are incompetent. They are banking on everyone around them being “worse than them” rather than being “better” in some new way. When you are a clone business, you are a commodity, and when you are a commodity, the only real point of differentiation is your price. Price is a poor value proposition as there is always someone out there willing to undercut your price and drive themselves out of business faster than you.

Even a business that entirely transforms an industry and is truly disruptive often is not radically different. For instance, look at the business and economic model of a mini mill that uses recycled steel vs. iron ore. Another example is a cell phone company that uses wireless transmission vs. a landline phone company. In both of these examples, there is only a few degrees of difference from their mainstream competitors.

Other examples include Uber and Airbnb. Uber built a disruptive taxi business with the simple idea that the driver didn’t have to be a taxi driver. Airbnb built a powerful accommodation business on the premise that the room you stayed in didn’t have to be a hotel room. They took what had gone unquestioned and questioned it.

Sakichi ToyodaToyota Motor Corporation’s Sakichi Toyoda developed a technique he called “The 5 Why’s” during the evolution of the automakers manufacturing methodologies. Successful entrepreneurs dare to apply the 5 Why’s to various aspects of their business model to uncover the substantive few degrees of difference that will take them from the red ocean to their blue ocean.

Daniel Burris, the author of “Techno Trends,” says, “The future is already invented.” What he meant by this statement is that most successful businesses simply take a practice from one industry and apply it to their own.

A good example of this principle is Airbnb. Airbnb took the existing hotel and B&B reservation system and applied it to the private home rental market. Most of the core business is the same but just has a slight tweak.

What questions can you ask that will convert your clone business to the next Uber?

Lean Business Planning

Lean Business Planning vs. Traditional Approach

The Center for Business Modeling is based on one simple premise – to help entrepreneurs launch their ventures in the fastest and most successful manner possible. And in the vast majority of cases, this means launching a venture in the “lean business mode” from both a planning and operations standpoint.

Many new entrepreneurs are still taught – by well-meaning professors or industry groups – to follow the traditional route to business planning and launch. So what are the problems with this type of approach to business planning that cause us to recommend the lean business strategy? Here are five of the major issues:

  1. Almost every business plan is inaccurate as written. A recent Harvard Business Review article stated that 90 percent of successful businesses had to pivot from their original plan.
  2. The traditional business plan takes too much time to complete – time better spent elsewhere. When you are in a startup situation, the only resource more valuable than money is your time.
  3. Much of the information is unknowable at the time the plan is written. Almost all entrepreneurs are surprised when the reality differs from the expectation. Sometimes this is a pleasant surprise and sometimes a not-so-pleasant surprise, but it will definitely impact your venture.
  4. Plans that project financials five years out are somewhere between speculation and fiction. It is amusing to watch entrepreneurs plot how much they are going to spend on office supplies 60 months from now, but in reality, almost no one gets it right.
  5. Too many small business plans are based on big company data. Much of the entrepreneurial data taught at the college level is about rocket ship companies like Facebook or Uber, which do not apply to the SMB marketplace.

All of these challenges can be overcome by adopting the lean business planning model. Here are a few of the benefits received when you adopt the lean business game plan:

  • Much faster than writing a traditional plan. The time investment paradigm in the lean model shifts from planning to execution.
  • More intuitive. Tools like the Business Model Canvas, Lean Canvas, and the Center for Business Modeling Business Planning Framework, are much easier to understand and complete, and much easier to evolve over time.
  • Quicker for investors and partners to digest. Investors tend to have short attention spans in the beginning phases and very long attention spans as they get closer to funding a particular venture. You need to get your key points across in the shortest time possible or the potential investor will move to the next deal. Using any of the lean planning tools mentioned above, the essential elements of your strategy are contained on one page.
  • Helps you get to cash much faster. The game of business gets a lot more interesting once you get on the playing field. The lean model is designed to help you launch quickly, expose your products and/or services to prospects, learn from these initial tests, and re-launch based on the knowledge gained in the early test period.

I encourage budding entrepreneurs to adopt the mantra of Test, Fail, Succeed, Scale (in that order please). The lean business planning approach is just what you need to accomplish this. For a great book on the subject read Business Model Generation.

Lean and Young – Business Planning for Millennials

businessmen planning meetingAccording to a brand new post from entrepreneur.com, if you’re twenty-something, there are seven things that you should know about business planning before you end up climbing the corporate ladder for 40 years.

Now, don’t get me wrong: I like this article. It focuses on the new business models that have sprung up in response to what Gartner calls, The Nexus of Forces:

“The Nexus of Forces — the convergence of mobile, social, cloud and information — has become the platform for digital business. Digital business is the creation of new business designs by blurring the digital and physical worlds.”

It can be argued that today, every business is a digital business and that, based on the rules of bimodal and agile business planning; your old-school business plan may be totally irrelevant. So, before I spin off into a number of fascinating rants, let me get back to the article and clarify where CBM can help you remain agile, but still rooted in good business modeling practices.

Take One Ibuprofen and Call Me in the Morning

The first thing the writer or the article, Cameron Benson, did was to grab a meme from Big Pharma:  “Go for the ‘minimum effective dose.’” By this he means just get to market, already.

”As long as your product offers value to your customers, it’s ready to launch. Everything else will come in due time. This doesn’t mean you should start a business around a subpar or incomplete product, but you shouldn’t wait until it’s perfect, either.”

I agree. But I also believe that if you haven’t thought through your delivery methods, how you can reach your customer and who your competitors are, you’re destined to have jumped too soon. Use tools like the business planning framework. It’s lean enough to not gum up the works but smart enough to help you avoid the most common pratfalls before you launch.

Our friend Cam also asserts that “People are your businessAs an entrepreneur, you need to nurture your ability to develop and cultivate relationships with others because that skill is essential to the growth and success of your business. How can you build more relationships to help your business grow?”

About twelve  years ago, I read Tim Sanders book, Love is the Killer App. I was deep into my corporate phase (meaning I had stopped being an agency person and had gone in-house to try to effect awesome marketing/PR change from within) and there were some long-time political lifers invested in stopping every idea that wasn’t their own. I nearly lost my mojo—until Tim Sanders and his statistics about nice people finishing first saved me from developing premature meanness and the frown lines that go with them.

This Yahoo executive laid it out in a way that I could definitely work with: “Here, then, is my definition of love business: the act of intelligently and sensibly sharing your intangibles with your bizpartners. What are your intangibles? They are our knowledge, our network, and our compassion. These are the keys to true bizlove.”

Sanders is basically saying that “smart, nice people can succeed.” If your personal brand is mean and narcissistic, you can have the best product in the world but your brand will tank because in this age of social media transparency and comment sections, you’re toast if you offend too many people too much of the time. Trust me—you do NOT have the budget to kill every rumor—especially if they’re true. Suffice it to say, newer business models have to include some semblance of kindness in their plan. It’s just common sense.

Cameron also counsels: “Let go of the business plan myth. The world has changed a lot since the time of traditional 160-page business plans. There are millions of successful businesses that started from a simple idea…while the “traditional” business plan may not be necessary, there are key things to consider before you launch. First, start with the end in mind by considering how you want your business to function. Next, consider the branding aspect of your business, domains, social media profiles, etc. and own your name! Finally, put it all together by handling the legal aspects of your business.”

At CBM, we love this attitude. Creating a Lean Business plan will often take care of the functional blueprints you’ll need for day-to-day operations. But don’t forget—one of the main reasons businesses fail is because they can’t get a handle on logistics. Once again, our Framework can help.  If I could tell any young entrepreneur one thing, it would be this—“lean in” on your logistics. It’ll pay off in the end.

Applying the Blue Ocean Strategy to the Business Model Canvas

To apply the Blue Ocean Strategy, you start with a Business Model Canvas that describes your industry and then look at your the business model canvas from three different perspectives: the cost prospective, value proposition, and the customer segment.

From the cost prospective, identify the highest cost infrastructure elements and see what would happen to the model if you eliminated or reduced them. Then consider the infrastructure investments you could make or improve upon and see what would happen to the model. When Blue Ocean Strategyit comes to looking at your model from the cost prospective, ask yourself the following questions:

– What activities, resources, and partnerships have the highest cost?
– What happens if you reduce or eliminate some of these cost factors?
– How could you replace useless or costly elements by reducing expensive resources, activities, or partnerships?
– What value would be created by planning new investments?
– How will changes made from a cost prospective affect your value proposition and customer side of the model?

Next, look at your business model from the value proposition prospective and see what new value you can create or increase. Then see what value you can eliminate or reduce. When it comes to looking at your model from a value proposition prospective, ask yourself the following questions:

– What less valuable features or services could be eliminated or reduced?
– What features or services could be enhanced or created to produce a valuable new customer experience?
– What are the cost implications of your changes to your value proposition?
– How will changes to the value proposition affect the customer side of the model?

Finally, look at your business model from the customer prospective and see what new customer segments you could focus on. Then see what customer segments you can eliminate or reduce. When it comes to looking at your model from the customer prospective, ask yourself the following questions:

– Which new customer segments could you focus on and which segments could you possibly reduce or eliminate?
– What jobs do new customer segments really want to have done?
– How do the customers prefer to be reached and what kind of relationship do they expect?
– What are the cost implications of serving new customer segments?
– What effects does adding or eliminating customer segments have on your value proposition?

How would you start to apply the blue ocean strategy to your business?

Note: this article was originally posted November 11, 2015 at www.stevebizblog.com.

 

Keeping Promises to Your Customer: Marketing Strategies that Work

How to tell your company’s story to inspire trust, remain agile to customer needs

In Seth Godin’s recent blog, he says: “My take for the last 15 years is that marketing is merely storytelling and promise making/keeping, and in fact, everything the organization does is at some level, marketing.”

I couldn’t agree more. But how can a new company or an existing company ensure that they’re telling the right stories and making promises they can keep? Using The Center for Business Modeling Business Planning Framework will help. And the best thing about it is that it is an iterative process: If your story doesn’t gel or your promises start to feel flimsy, using the framework will help you adjust.

Agility is Critical

A post by Margaret Rouse writing on techtarget.com provides an excellent definition of business agility. She outlines the ways that a company can keep changing by “assessing priorities and progress frequently”—not just at the end of a project. Her post mostly discusses agility in the context of project management, however, isn’t your business plan the most important and impactful project you undertake?

Using the Framework has helped me crystallize my stories and ensure my promises are kept to my clients in three major ways:

I Can Do Anything Better Than You

1) Brand integrity- I used to tell the story: “I can do anything you need in PR and marketing” and it’s just not true. I don’t have certain skills but then again, one of my strongest attributes is being clear-eyed about that. If one of my clients gives me a project that’s not in my wheel house and hiring a contractor to fill in the gaps is cost-effective for both the client and my company—it’s full steam ahead. However, I need to be very careful when doing so—most of the skills I need help with come with a pretty hefty price tag. Working with my client to find a more effective partner brings them more value in the long run—and makes me more of a business consultant in their eyes. That’s the new story for me—“I will do what I’m best at and if it’s not my strength, I will make sure I hook you up with quality people.” My product and services roadmap (based on the CBM Framework) was adjusted accordingly.

What No One Wants to Hear About Business Ownership

2) Keep your promises to yourself- As a marketing and PR professional for many years, I spent a lot of late-night hours catching up on work because I made sure to make the evening football and soccer games when my kids were in school. When I opened my own company, I tried to opt out of business trips (when possible) that included a lot of travel, paid awesomely — but would upset my work/life balance.

Sometimes, I just had to leave and do my job—and that involved breaking promises to my loved ones rather than to my employer or client. Today, I walk a fine line with keeping client promises and promises to myself about how present I will be for my grown daughter and my youngest son. I believe that any business plan that ignores an entrepreneur’s personal life will fail in the long run—so when using the Framework, I make sure to adjust my plan to the impact on my personal life. I might lose some revenue, but I gain energy and commitment for the projects I choose to take on—because I know that they are congruent to my values. No one asks for their checkbook balance on their death bed.

What’s the Story?

3) Telling a valuable story- The CBM Framework shows you how to tell your company’s story and also to remain agile enough to change your story when the customer is not responding. This is where content marketing metrics come in—how are you reaching your customers and what are you telling them to ultimately turn them into “paying customers”? Your marketing strategies are always evolving based on their needs and your business goals.

Keeping promises. Telling compelling stories. These are the two core activities of any business, anywhere. I love feeling confident that I’m doing them well. Let CBM’s Framework make you confident, as well.

Three Ways to Disrupt Your Business Model

Technology is no longer the key disruptor:
Your Business Model is—So it “better be good”

David Skok is one of my favorite business writers because he tends to change the way I think about my business. He helps bring new ideas to entrepreneurs like me, who barely have time to do our jobs — let alone keep up with the latest in business model innovation. I know when I visit a Skok blog or SlideShare, I’m not wasting my time.

Take this recent statement from David in a SlideShare titled, “Business Model Innovation: The New Trigger for Great Start Ups”: “Unlike in the past where technology innovation was the primary driver of startup innovation,  in the last ten years it has frequently been innovation in new business models that has caused the disruption to create the opening for new companies.”

The 79+ page Slide Share brought me to some great conclusions about where my company might be headed. David uses awesome examples to show how the “business model as innovator” concept works in practice. Here are some of the most valuable insights:

1. Watch your CAC (cost to acquire a customer) – According to Skok, start-ups using the new model—spending money to get customers to your website and then monetizing the site with offers, etc—doesn’t take into account how much money it will cost to acquire not only a visitor– but a real customer. By monetizing a portion of the customer base and using free software to acquire customers cheaply, startups can keep their CAC more manageable—and make more money.

I learned this lesson the hard way. I loved attending the big, fancy conferences when I first started my company. I thought I would network with the big money clients—then, once they met me, of course they would hire me—voila! That $2,500 conference fee paid for itself.

When I finally broke down the average number of clients I obtained from attending twice a year, every year for three years, I came up with five clients that yielded about the same amount of money as I spent on the conferences. I deicided to cut down attendance to once every two years and spend my new business money on people who were already in my network.

I still go because I love to learn about my discipline. I just don’t spend as much in acquiring customers there. And even though $5,000 a year doesn’t seem like a lot to you, it was a lot of money to me back then. Today, I’d rather spend it on something that yields client contracts on a regular basis.

 2. Keep Track of Buying Behavior – Skok says that outbound marketing annoys your customers and is increasingly not working. Today, buyers use Google search, reviews, free trials, blogs and other content sources to learn about the offerings they need. The key point Skok makes resonates with start-ups in particular—you need “inbound marketing thought processes.”

 I see so much content “thrown at the wall until something sticks” by start-up companies. They “know” they need to be certain places online but they don’t pay thoughtful attention to what they want out there; who needs to be saying it (I love customer testimonials as a buyer and as a business); and where they need to be (to build a social following) basically, how to “educate and entertain.”  Spend a lot of time on this part. It’s worth it.

 3. Be a “New World” Business – The older business model had us charging for everything, even demos. Demos and trials are still widely used. But to move into the “new world” of innovative business models, you have to figure out how to simply give it away. For free. And only monetize a fraction of your customer base to make money.

Granted, your customer base has to be pretty big for most of us to afford the mortgage, the car, and our kids’ tuition with this model. But if you are watching your CAC carefully; writing and posting targeted content in accordance with how your buyers really behave (and not how you wish they would); and figuring out how to give it away while monetizing enough to feed your family and please your investors—Skok says you can get there.

Use the Center for Business Modeling SWOT tool to figure out your strengths, weaknesses, opportunities and threats in these three areas. And then get to work disrupting your market.