Category Archives: Business Building
I PREFER TO SAVE TIME, MONEY AND HEARTACHE LEARNING FROM OTHER’S MISTAKES, DON’T YOU?
Gary Swart shares some of his essential truths in the article below that should be applied in all businesses, not just startups.
My former company, Intellibank, was sort of like Dropbox done wrong. You’ve probably never heard of Intellibank, because it came and went like so many startups do, but it was a promising company with smart people. We raised money and could have been the next big thing, but it never happened. Why?
Though Intellibank was not successful, I don’t view my time there as wasted. From the mistakes we made, I learned what not to do — and from there, I’ve arrived at some essential truths that can lead to startup success.
1. It’s all about the market
Even the best team with the best product will fail if its market does not exist. Venture capitalist Marc Andreessen says that product-market fit (a term he is said to have coined) is one of the most important factors he considers when evaluating startups.
At Intellibank, we did not achieve product-market fit. Every customer was asking for something different and we gave it to them. We had six markets with 40 different types of customers, and in hindsight, we should have developed just one product. We couldn’t be all things to all people — and by failing to declare our major, we created a world of chaos for our sales, product and marketing teams.
Even if you do have product-market fit, you will not get very far if the market is not big enough. To determine whether you fall into that category, ask yourself if the market you’re targeting is big enough to allow for pervasive adoption of your product and exponential growth.
2. Validate with your customers, not your investors
A common mistake among entrepreneurs is seeking validation of their ideas and decisions from investors. The most important people any company should seek validation from are their customers. That’s right, your customers matter more than your investors — and any good investor would agree.
Do not ignore yellow lights coming from your early adopters, because their activity indicates a momentum shift. Spend time understanding all aspects of the customer value proposition. I once heard Guy Kawasaki talk about his 10X rule — in order for people to switch and buy your new thing, your product doesn’t need to be perfect, it just needs to be 10X better than the alternative.
Think about the 10X rule and ask yourself: why should your customer buy your product? How does your product fit into the rest of his world? What influences their opinion of the product’s value? What is your product displacing — all products displace something — and why should your customer risk making that switch? You need to be as knowledgeable about your customer and their needs as you are conversant with your own product.
3. Focus, focus, focus
Focus and simplicity are often more difficult to achieve than building features on top of features on top of features. As a result, too many startups are unfocused. The time required to trim back an idea is not insignificant — said best by Mark Twain: “If I had more time, I would have written a shorter letter.”
In order to succeed, a startup needs to do one or two things exceptionally well; some of the greatest products today don’t have a million bells and whistles, but they solve one concrete problem brilliantly. I’m thinking of companies like Salesforce.com in the early days. They entered the market with good products, and over time they iterated, grew and added features — but not before they owned essentially the entire market.
By keeping it simple, measurable and achievable you’ll be well on your way. Everyone at your company should be able to articulate the goal of your business, enabling a dogged, unyielding focus on that goal throughout the organization.
4. Aim to exceed expectations
Your goal should not be meeting your customers’ expectations; it should be exceeding them. Truly great and memorable products surprise and delight their customers, so don’t be afraid to spend the time and money to build an exceptional product. But don’t let this pursuit inflate your product’s ego, if you will — making promises you cannot keep will leave you surrounded by disappointed customers, investors and employees.
I cannot emphasize how important it is in the long run to over-deliver to your customers. For example, Fab does not have to give every customer a $5 gift card with every order, but doing so wins them a lot of brand loyalty and even word-of-mouth marketing.
5. Figure out streamlined metrics to measure your progress
I once had a board member tell me that we were over-measured and under-prioritized. It stung. A lot. But it also made quite an impression. As a business leader you need to figure out the metric that matters most for your company and understand that the more you measure, the less prioritized you’ll be. Don’t fall into the trap of trying to measure everything. What I’ve learned is that in the early days, what matters most is having customers who love and use your product. Figure out the one or two best measures to determine this.
6. Pivoting is okay… but it is not a business strategy
I learned this one the hard way. At Intellibank, we would change our pitch deck based on what we thought would get us traction with investors. In one particular meeting, I was in the middle of explaining our revenue model, when a potential investor interrupted me and asked, “Can you tell me what your product actually does?” We were pivoting so often for different types of customers that we completely lost the big picture. You must be agile, but not to the point of an identity crisis; you have to look beyond your four walls and convey the big picture.
7. Ultimately, deliver a great experience. It’s what keeps people coming back
Customers come to restaurants for a great overall dining experience, but the food is the baseline. They come back if the service and experience exceed their expectations. It’s the same with any business—the product is table stakes and it’s the experience that brings people back.
Take a look at Hotel Tonight. It’s only accessible from a mobile phone and while there have been several times mid-flight when I’ve wanted to use the app to book my hotel in my destination city, I can’t and so I wait until landing. Using their service on my laptop would be nice, but the experience is so elegant and over-delivers every time, so I prefer to book my hotels there.
With all of these learnings in mind, think about the product you’re selling and think about where you see it going. Now take a step back and ask yourself the most important question of all—when your customers are using the product how do they feel, and will that feeling keep them coming back?
Shout out to Gary Swart is the CEO of oDesk, the world’s largest online workplace.
Knowing the 5 buying decisions your customers have to make can help you understand what they are saying “no” to.
When selling your product, it greatly helps to understand the 5 buying decisions that your customers make before they are willing to say “yes” and purchase from you. Unfortunately, a single “no” to any one of these 5 decisions often results in loss of a sale. Therefore, knowing these decisions allows you to be aware of and address them all to help you connect with your customer and earn more “yes” decisions.
Decision #1: Do I like and trust you, the salesperson.
Your prospective customer’s first impression is often not with the product or service you sell, but with you. People judge others on two primary criteria: (1) likability and (2) competence. Each time you meet a prospective customer, they think, “Do I like and trust this person?” They need to feel that you are both a kind and knowledgeable person.
Do you have integrity — are you working for their benefit or only your own?
Are you credible — do you understand your product/service?
How to improve your chance of “yes, I like and trust you”:
- Build rapport.
- Be nice.
- Be polite.
- Be a good listener.
- For tips on building rapport, see our blog When Meeting Your Customer for the First Time.
- Have and project integrity.
- Always be honest.
- Make sure you work for their benefit, not just for your own.
- Have and project integrity.
- Be credible.
- Know your products and services.
- Understand how your company adds value to customers.
Decision #2: Do I like and trust your company.
The prospective customer wants to know that your company is dependable. You are the representation of your company and how they think and feel about you will often be transferred to how they think and feel about your company. When you demonstrate integrity, credibility, likability, and trust, your prospective customer will be much more willing to see your company in the same light.
How to improve your chance of “yes, I like and trust your company”:
- Only work for a company you personally like and trust.
- Be familiar with your company.
- Be able to talk about your company’s history, leaders, culture, and mission.
- Provide material, if available and relevant.
- Have a business card and direct them to the website for additional information.
- Provide marketing material, if available, such as press releases, newspaper articles, customer reviews, etc.
Decision #3: Do I like and trust your product or service.
Even when the prospective customer likes and trusts you and your company, their primary concern is whether your product or service really will fulfill their emotional and practical need. The best thing you can do is to let them tell you what their needs are.
How to improve your chance of “yes, I like and trust your product/service”:
- Understand what their need is.
- Ask open-ended questions that start with Who, What, Why, When, Where and How.
- Listen closely to their answers.
- Confirm understanding.
- A good way to do this is by repeating back to them what you think you are hearing and asking them if your understanding is correct.
- A good example is “I am hearing that your need is X…is this correct?”
- Understand your product’s benefits.
- Provide the best product match for their need.
- When they have confirmed that you understand their need, work with them on selecting the product or service you offer that fulfills this need.
- Always be honest with yourself and with them.
- Don’t try to sell them something they don’t need or doesn’t help fill their need.
Decision #4: Do I like and trust your price.
Most people don’t truly buy solely on price. They buy because of value.
How to improve your chance of “yes, I will pay that price”:
- Sell value, not prices.
- As stated above in Decision #3, show them the benefits of your product and service that fulfill their need.
- Help them see the value that your product/service provides by saving them money in better quality, higher durability, uniqueness, timesaving, convenience, etc.
- If one of your benefits is a low price, great! Make sure they are aware of this.
Decision #5: Is it the right time to buy.
No one wants to spend money before it’s necessary and their comfortability with when the right time to buy can vary widely from person to person.
How to improve your chance of “yes, I am ready to buy now”:
- Identify their objections and concerns, if any.
- Ask more open-ended questions such as “What additional questions or concerns do you have?”
- Work with them to provide solutions to their objections
- Are they still worried about money?
- Maybe you can help them with flexible payment arrangements or discounts.
- Are they concerned about making the wrong choice?
- Let them know about your return policies and satisfaction guarantees.
It is important to not be too aggressive. If they are not ready to buy, don’t pressure them. Remember that the best salespeople spend energy on building customer relationships, not on pushing products and services. See our blog Make The Sale Without Being Pushy.
In summary, knowing and giving attention to the 5 buying decisions that your customers make will help you when selling your product. Whenever you hear “no”, try to understand which of the 5 decisions they are saying “no” to.
If they are saying “no” to you or your company, you need to work on building better relationships and branding yourself and your company.
If they are saying “no” to your product or price, maybe you need to work on better communication of the benefits and value that your offerings bring.
If they are saying “no, now is not the right time for me”, then you can ask them if they would be open to keeping in touch and when a good time would be to follow up with them.
Getting a “yes” from your customer means they are saying “yes” to all 5 decisions. The better prepared you are for addressing each of the 5 decisions, the better chance you have of completing the sale and truly fulfilling your customer’s needs.
Shout out to ultimatesparkle
Think about reading James Caan’s personal rules listed below every morning for a month. James delivers short, quick and easy to follow rules that make sense.
A few new rules I added to my daily ritual:
Work on a project for at least 30 minutes every morning before opening your email. Email messages can disturb your focus and weigh you down with urgent, but not necessarily important tasks. Emails can also crush creative juices to those addicted to checking their Inbox. Starting your day off being productive can build a momentum that lasts throughout the day.
Complete! Complete! Complete! Always finish what you start. It’s easy to get off track with email & phone interruptions. Never start a new task or project until you finish the one you started. Checking off your to-do-list is another way to create momentum.
The Eight Rules of Success to Think About Every Morning
I have said in the past that there is no magic formula when it comes to being successful in business but there are certain guiding principles that I have followed throughout the course of my career. Not everyone gets what they want in life but if you work hard and keep trying then some measure of success is bound to come your way. Here are a few of the personal rules I have stuck with throughout my career in business and still follow to this day.
No matter what people say true success does not come easily. Like everything in life, if you really want something you are going to have to work for it and put in the time and effort. There is nothing wrong with a little bit of hard work and everyone who has gone into business for themselves will tell you it is one of the toughest things they have ever done in life.
2. Believe in yourself
There is no point in going into business for yourself if you do not have any confidence or self-belief. When you set up your own company the only person you have to answer to is yourself – which means confidence is vital. If you do not believe in yourself and your product or service, then how can you get others to put their faith in you?
3. Be creative
If you want to be truly successful then you have to be prepared to stand out from the crowd. Although I have always believed that an idea doesn’t have to be brand new, the best businesses will still have a strong USP that sets them apart from competitors. Creativity is one of the most valuable qualities any person in the business world can have.
4. Be there first
It is a competitive world out there those who are not out of the traps quickly are the ones who are going to get left behind. I have always believed in striking first. Once you have established what the best course of action is, there is no point in being cautious because it will give your competitors the chance to get in there before you and win that vital piece of work or contract.
5. Build a brand
When I set up my first firm, the first thing I did was to go out and rent an office in the best part of London, as an address in Mayfair is great to put on a business card. The actual room itself was tiny and windowless, but nobody knew this as I arranged for meetings to take place away from the office. When it comes to doing business, building a brand and a good reputation is vital. Once you have done this, you will find things a lot easier, as most of us prefer to deal with people or companies that are recognized and trusted.
6. Seek advice
It is impossible to be an expert in every field and there is nothing wrong with seeking advice when you are struggling. When you are starting out in business it can be great to speak to someone who has years of experience behind them. If you ask for help you will usually find that people are more than happy to give their time and their expertise.
7. Get organized
Running a successful business can be very stressful and demanding and one of the most important resources you will have is your time. If you want to get the most out of your working day then you need to be properly organized and you also need to make sure you are not wasting precious time on tasks that can always be delegated to someone else.
8. Don’t run before you can walk
When you first start in business there is a tendency to grab every piece of work which comes your way, which can be a potentially fatal mistake. First of all you need to make sure that when you negotiate a contract there is a decent margin. Although you want to make your mark, there is no point in taking on work that does not yield a worthwhile profit. More importantly don’t take on more work than you can manage. It is one of the most common mistakes in business and can prove to be very costly.
Shout out to James Caan | Serial Entrepreneur & Investor in People with Passion