Give aways and earning money

February 27th, 2006 by Rolf Erikson

I have earlier said that giving [tag]discounts[/tag] can turn out to be a nasty thing for your business. Then what about all new startups where the [tag]business model[/tag] is to give away things for free?

Anita Campbell has seen an interview with Esther Dyson at the Open Business site about business models for Internet startups. The point of the interview is that “free” is not a substitute for a business model. However, giving stuff away for free in order to draw enough attention to build a loyal community is a good model.

Anita Campbell makes the following comments,

Smart [tag]entrepreneurs[/tag] are thinking about and searching for ways to make money right from the get-go, even if they are not planning to implement the money-making phase of the model for 12 or 18 months. I think it is important to stay mentally focused on making money right from the start. It prevents you from getting caught up in the insidious mental abyss of believing you must give everything away for free forever.

In the interview, Esther Dyson then goes on to note that the “wing and a prayer” business model (i.e., that you don’t have to worry about making money because some big player will acquire your company) does not work for most startups.

My comment is that you must have a plan when your business will be profitable having a positive cash flow.
[tags]coaching[/tags]

How to pass a gatekeeper with your foot

February 26th, 2006 by Rolf Erikson

Debra Feldman has written a post about gatekeepers and how to get at foot in the door. The [tag]gatekeeper[/tag] uses criteria developed to evaluate requests. If you pass the test, you are referred to the [tag]boss[/tag]. If not, you are turned away. Debra gives six ways you can increase the odds that gatekeepers will grant you access.

  • Offer a low-risk, high-reward situation. Do your homework. Plan your presentation so it is clear, compelling, and engaging. Pique the gatekeeper’s curiosity.
  • Convince the gatekeeper that there is no reason not to offer you an appointment. If the gatekeeper believes it would be more detrimental to keep you out than to let you in, you have won!
  • The more interaction you have, the more invested the gatekeeper becomes in a relationship. So speak respectfully, be polite. Make small talk.
  • Follow the gatekeeper’s instructions, cooperate, and be pleasant. If she asks you to email a request, do it.
  • Gatekeepers can become your personal liaison. If you can win the gatekeeper’s support, he can become your ally advocating for you
  • Timing is critical. If you don’t succeed, try, try, again.
  • I think there are rather good tips so you better follow them.
    [tags]coaching [/tags]

    More about discounts

    February 25th, 2006 by Rolf Erikson

    It´s easy to give discounts to get a sale but how wise is it?

    If you have 30% margin on a product with a price of 800 before tax you will have 240 in margins. With 10 % discount you get in margin (800-80 (10 %) -(800-240)(the cost) = 160. The difference is 80 which means that with a 10 % general discount you have to have 50 % more sales in order to have the same revenue.

    If you are sure that the discount will give 50 % more sales then it´s OK with discounts otherwise not ( if not the higher volume gives lower costs). There is a lot to think off when setting a price but that is also why selling is so fun.

    What about Discounts

    February 23rd, 2006 by Rolf Erikson

    Jin Logan has written two posts about [tag]discounts[/tag]. In the first he says,

    That’s what’s wrong with discounts, they don’t take thought. Anyone can lop 20% off their price. Which make discounts unoriginal. And unoriginal doesn’t attract attention or compel. Your competitor can match your discount whenever they want and it isn’t considered copying your strategy, it’s just offering a discount……….
    Instead of offering a discount, offer a bonus or premium to attract buyers. Offer something for free – a complimentary product or service, ticket, registration, subscription, etc.

    In the second post Jim Logan has two exceptions, early and cash payment.

    [tag]Early Payment[/tag]. If you offer terms of payment, an option is to offer a discount for completing the purchase early. For example, let’s say I offer my services payable in four equal payments, after the first or second payment, I can offer my customer a x% discount on the balance to pay in full within a set number of days.

    [tag]Cash Payment[/tag]. Again, if I offer terms of payment, I can offer a x% discount for payment in full at the time of purchase. In this case, I’m passing along my cost of financing the purchase.

    I agree. If you always have to give a discount means that you are calculating with wrong margins and you can jeopardize your [tag]business[/tag]. But of course early money are always good and can be worth a discount.
    [tags]coaching[/tags]

    Alternative to multitasking

    February 22nd, 2006 by Rolf Erikson

    John Cox has written an article about a different way to think about [tag]multi-tasking[/tag] our work load.

    Since working in parallel is learned behavior brought on by peer pressure, how do we break that habit? Becoming [tag]productive[/tag] is the best way to do it. What will be the hardest habit to break is working in parallel sometimes and working in series in others. In electronics, surprisingly enough, this is called a series / parallel circuit. It has definite current drops over portions of the circuit while constant current across others. More than likely, in some way, this is how we all behave. We try to check our email while in meetings. We try to type while on the phone with another. However, when faced with a large task, we devote all of our time to finishing it, so that we can go back to checking our email and catching that 2 o’clock by the skin of our teeth.

    I am going to tell you to stop doing that. Treat everything as you do that big project. Devout time to checking your email and answering it, then stop checking until the next devoted time. If you have a 2 o’clock meeting, devote your energy to making that a successful meeting. Do your job to the best of your abilities for each task that you have. What you will find you are working less, as you are not having to go back and redo the things that you did last week. You will also find that you are setting more accurate priorities based on your capacity, rather than based on your workload.

    What is more to say. Doing everything at the same time is not productive. We know that so why are we doing it? Sometimes I get the feeling that showing others that we are a busy man is more important then [tag]quality[/tag].
    [tags]coaching [/tags]

    Entrepreneurs and the growth of business

    February 22nd, 2006 by Rolf Erikson

    The [tag]growth[/tag] certainly puts strains on all aspects of your [tag]business[/tag]. Hiring more staff, expanding the resources necessary to support new customers, managing [tag]cash flow[/tag], building new systems to support your business, and so forth all take time and attention. If you do not get these issues taken care of properly, your business can suffer or even fail.
    This is said by Jeff Cornwall in his blog The Entrepreneurial Mind.

    I believe these are wellknown issues for [tag]entrepreneurs[/tag] but very few know what to do about them. My advice used to be that the entrepreneurs should listen to advice, either through a good board or even better through an [tag]Advisory Board[/tag] signed up with three qualified persons.

    Anyhow there are, according to Jeff Cornwall, some common issues that entrepreneurs wrestle with as their business grows:

    Delegation: Your “baby” is now a “teenager” ready for more independence. If you don’t begin to let go, you business may never successfully move into its next stage of development.

    “My company just isn’t the same as it used to be”. Be deliberate about the culture you intend and think about how each action you take over time can effect this culture.

    “So just what is a CEO supposed to do, anyway?”. It may even feel a bit awkward at some point, but you have to establish what your role will be as the CEO.

    The Fear of the Unknown: Moving from hands-on to strategic. As some point in the growth of the business, the entrepreneur begins to move away from the hands-on part of what they company does.

    “How come everyone keeps forgetting this is still my company (sometimes, including me)?”. Remember: it is your business!
    [tags]coaching [/tags]

    How do you tackle your problems?

    February 21st, 2006 by Rolf Erikson

    How good are you at separating yourself from your problems? Beezee quote Martin Seligman who suggests that this is yet another thing that optimists can do better than pessimists and presents the distinctions between the two groups:

    Pessimists tend to see their problems as Permanent, Personal and Pervasive
    Optimists tend to see their problems as Temporary, External and Specific

    This is another proof that positive thinking is good for us. Why not start every morning with a smile. I´ve learnt that it takes 30 days to get a new habit.

    Nano will change our lives

    February 21st, 2006 by Rolf Erikson

    Justin Rubner reports in Atlanta Business Chronicle that in 2029, people and computers will be “intimately connected” in profound ways, thanks to breakthrough advances in [tag]artificial intelligence[/tag], [tag]nanotechnology[/tag] and a soon-to-be-acquired knowledge of the human brain.

    That’s according to futurist Ray Kurzweil, who spoke Feb. 7 at the Technology Association of Georgia’s annual summit in Smyrna. Kurzweil, author of “The Age of Spiritual Machines” and inventor of the speech-to-text synthesizer, predicts scientists by 2029 will have created “[tag]nanobots[/tag]” capable of repairing the human body from within and immersing the five senses in full virtual reality environments. Nanobots also will be able to make us smarter too, he predicts: improving memory, sensory and cognitive abilities.

    “Computers will disappear,” he said, as visiting a Web site will become a mobile, virtual reality experience and “displays will be written directly on our retinas” from eyeglasses and contact lenses.

    Personally I think that even more fantastic is the possibility to build small robots being able to clean up my bloodvessels. I wonder how our world looks like in 100 years.
    [tags]coaching [/tags]

    Four S´s in Success?

    February 20th, 2006 by Rolf Erikson

    Jacob on Success writes, “Most people think there are three S’s in the word “success”, but that’s not true, there are really four S’s in the word “success.”

    These four S’s are:
    * Set it
    * Share it
    * Start it
    * Stick to it

    Okay, I should admit something, these are really the four S’s in [tag]goals[/tag], but when you achieve your goals you move towards success.”

    A really good idea. Jacob explains what the S´s stand for. You have to set the goal, inform others, start instead of too much planning and focus or stick to it. All these are also a description of a good [tag]entrepreneur[/tag].

    Young entrepreneurs and venture capital

    February 18th, 2006 by Rolf Erikson

    It is usually difficult for young [tag]entrepreneurs[/tag] to get [tag]venture capital[/tag]. Brian Balfour, a young entrepreneur, has got experience in raising money. It is never an easy task. In his blog Brian gives a few tips to follow. He says,

    My recommendation for most young entrepreneurs just starting out is to seek out angel investors before venture capital. Unfortunately a lot of your success in raising [tag]funding[/tag] depends on your network; the old “it is who you know” predicament. Yet, there are things you can do to make it easier.

    The six tips are targeted towards young entrepreneurs but many of them can be adapted for any entrepreneur. The basic is to use other peoples network.
    I like the tip “Keep the “No’s” In the Loop”,

    Keep a list of people who have said no, or just necessarily haven’t said yes. Send them regular updates of the progress of your company. By showing that you are committed and the company is moving forward may bring some timid investors out of the word work.
    [tags]coaching [/tags]

    Make your product desireable

    February 17th, 2006 by Rolf Erikson

    “If a company makes a high-quality [tag]product[/tag], but user’s don’t find it sexy or appealing, does that product exist? – and answers, You have nothing until a user wants it.”

    That question was asked by Kathy Sierra. At Creating Passionate Users She has posted tips for 10 Ways to be Desireable.

    Kathy Sierra has tried to explain things with help of quantum physics theme and Shrodinger’s ideas. One conclusion was, “You have nothing until a user wants it.” It wasn´t so easy to use physics so she started to think about things like listening to users, chemistry matters and desirability.

    She throws out some ideas to make a product desirable. I believe some of the tips are very good like,

    * Pay attention to style – Aesthetics mean more today than they did even fifteen years ago.
    * Pay attention to the emotional appeal – Think packaging, website and documentation.
    * Show it in action… with real people – Seeing another person using the product or enjoying the service.
    * Appeal to as many senses as possible – Consider podcasts and video, or even song lyrics or poems.
    * Make it meaningful – Give them something to believe in.
    * Make it justifiable, so the user doesn’t have to feel guilty – Helping the user with that after-the-fact rationalization makes it that much easier.
    * Never underestimate the power of fun – Show someone how you can help them have a little more fun in their life, and you might be irresistible.

    Read the whole list. The tips are worth reading. The comments are also interesting as they discuss “that it’s not quite fair/correct to say that quantum physics gives a weird answer to the Schrodinger’s cat question”.
    [tags]coaching [/tags]

    Tips for managers and leaders

    February 17th, 2006 by Rolf Erikson

    Lisa Haneberg is a professional [tag]management[/tag] and [tag]leadership[/tag] trainer, coach, and organization development consultant. From her blog you can download her free [tag]e-book[/tag] 1800CEOREAD.

    The e-book contains nine fun essays, each written about a conversation she had with another business book author. There are lots of great tips for managers and leaders.

    In the conclusion of the book (83 pages) Lisa Haneberg says, We are moving away from the industrial model and toward a new way of doing business that emphasizes the arrows instead of the boxes in a typical process diagram.

    I quite agree, there is a new era coming.
    [tags]coaching [/tags]

    Some good articles in Vision

    February 16th, 2006 by Rolf Erikson

    I have read a new e-zine called vision. [tag]Vision[/tag] will be launched monthly. Some of the articles from the first Issue are,

    * 13 Questions for First-Time [tag]Entrepreneurs[/tag] by Rajesh Setty
    * Dead-End [tag]Outsourcing[/tag] by Ethan Johnson
    * What Makes You Come Alive? by Kirsten Johnson
    * From Idea to Sold-Out Conference in 150 Days by Elisa Camahort
    * I’ll Have Some Innovation, Please, But Hold the Kaizen by Jon Miller

    They are worth reading. The first article is a good start when writing a business plan.

    There is an other article about pitch saying that it is not enough having an elevator pitch you must learn to perform the pitch well and with enthusiasm.
    [tags]coaching [/tags]

    Develop Your Business

    February 16th, 2006 by Rolf Erikson

    When we get the question how to develop ones [tag]business[/tag] we usually answer, write a [tag]business plan[/tag]. Sam Decker also got that question from a friend but he started with giving his friend 20 questions, 20 Questions to Develop Your Business
    The questions are very good and Sam says,

    As important as the answers are to these, it’s as important that you CAN answer them……
    Just asking the questions, digging in deep on some of these, and asking “why” after each answer will yield benefit in most businesses!

    The questions are organized in sections but here are some questions I find interesting,

    What are your short term and long term [tag]goals[/tag] (what time period are these goals)?
    What is the average order size and average order margin? How has this trended?
    What is the cost per acquiring a customer? i.e. Total marketing costs / new customers.
    If I were a customer, what would my 20 second word of mouth ‘sound byte’ be if I were to tell a friend about you? What would I say?

    Read all the questions here.
    [tags]coaching [/tags]

    How to present your idea for investors

    February 14th, 2006 by Rolf Erikson

    Boris Veldhuijzen van Zanten has spent a lot af time talking with potential [tag]investors[/tag]. To our luck he has compiled a list of tips which will improve our chances of getting our [tag]seed money[/tag].

    1: No more than 5 slides for your presentation!
    2: don’t read the text on your slides.
    3: watch yourself!
    4: timing is everything!
    5: test your story
    6: answer EVERY question
    7: Don’t bluff, lie or try to be a smart-ass!
    8: Use your deodorant
    9: don’t be a clown
    10: don’t pick a fight

    Boris gives comments on every tip. I like the first one, A simple formula to explain this tip: if you have a 30 minute meeting you will want to spend 10 minutes getting to know each other, asking some smart questions about the investor and giving them your [tag]elevator pitch[/tag] and at least 10 minutes for general questions after your presentation. That means you have 10 minutes left for a presentation………….

    Notice that he mentions the elevator pitch. From earlier posts by me you know this is a very important part of the presentation.

    Boris Veldhuijzen van Zanten concludes the tips by saying,
    One more thing: the people you are meeting are entrepreneurs just like you. They want to make money just like you. They we’re young and brave once too. So if they ask a tough question try to take it like advice and thank them for it. You don’t even have to be nervous because the least you can get from a meeting is some experience and a few good tips. You have nothing too lose here…