Growth5 Blog

Thursday, September 29, 2011

4 Lessons Learned

Chris Dixon was asked to speak at Google's Zeitgeist Conference, here are the four things he shared:
1. If you aren’t getting rejected on a daily basis, your goals aren’t ambitious enough
"One of the great things about looking for a job is that your payoff is almost entirely a max function – the best of all outcomes – not an average. This is also generally true for lots of activities startups do: raising money, creating partnerships, hiring, marketing and so on.
2. Don’t climb the wrong hill
"The lesson from computer science is: meander some in your walk (especially early on), randomly drop yourself into new parts of the terrain, and when you find the highest hill, don’t waste any more time on the current hill no matter how much better the next step up might appear."
3. The next big thing will start out looking like a toy
"This is one of the main insights of Clay Christensen’s “disruptive technology” theory, which has been widely studied but I think is still rarely applied because it is so counter-intuitive to conventional management practices."
4. Predicting the future of the Internet is easy: anything it hasn’t yet dramatically transformed, it will.
"I personally encounter this bias all the time when I go to college campuses to recruit for startups. We need to convince the upcoming generation to innovate and take risks in sectors that have a direct impact on the quality of peoples’ lives."

Tuesday, September 27, 2011

Mint.com: Solving Real Problems

Mashable conducted the following interview with Mint.com CEO Aaron Patzer. I have always been a fan of mint.com and here are my takeaways from this interview.
"Trust is, at its core, kind of an emotional thing. If you’re walking down a dark alley and you see a person ahead of you, you have a reaction based on appearance, demeanor. Websites have the same thing — a personality, an appearance. So the biggest thing for us was getting that right. Mint.com [as a domain] is short, which is implicitly expensive and more trustworthy. And the design was pixel-perfect. It looked good, it looked like a system you could trust, and we had all the 128-bit, bank-level encryption. Only 2% of people read about that [security] stuff; the vast majority of people make a decision based on the quality of the site."
One of the hurdles that mint.com faced from the very beginning was the fact that many believed that no one would trust a startup with their personal finances. Mint.com designed their site as if it were to be trusted. 
"Over a three year period, I did about 550 interviews with press from TV, radio and magazines and made myself as accessible as possible to the bloggers and the media. In the beginning, I would take an interview with anyone — there were a few high school newspaper interviews! All that press got us really great exposure. Press is free, and it’s the most effective type of advertising … it sticks a lot more."
Because they couldn't afford banner ads or other forms of advertising, Patzer took his story to the masses and it worked. Nothing better than free advertising.
"Solve a real problem. You don’t start a company because you want to be an entrepreneur or the fame and glory that comes along with it. You become an entrepreneur and you create a company to solve a real problem. And by real problem, I mean a problem that is going to exist down the line."
What problem are you going to solve?
“Our doubts are traitors, And make us lose the good we oft might win. By fearing to attempt.”
Shakespeare quote that Patzer keeps over his desk.

Monday, September 26, 2011

Facebook Still On Top (by a wide margin)

comScore released the top 10 Global Social Networks for June 2011.

No surprise that facebook.com leads the way with 734.2 million visitors. Followed by Twitter with 144.4 million.

Windows Live Profile, LinkedIn, QQ.com, Myspace, Renren, Vkrontakte, Orkut and Yahoo Pulse rounded out the top 10.

chart via marketingcharts.com


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Wednesday, September 21, 2011

6 Secrets of Fundraising Success

VentureBeat recently posted this article: Six Secrets of Fundraising Success, submitted by Jon Olafsson who is chairman and co-founder of Icelandic Water Holdings (IWH). The bottled water company has raised $23mm from friends, family and institutional investors over the last twelve months. The six secrets to their fundraising success:
1. Keep it simple.
IWH reduced the investment proposition to four essential pillars and demonstrated how they had a competitive advantage in each. Oftentimes startups complicate how they present their business because they feel the basics are too "thin." Simpler is always better, because for starters it's understandable.
2. Go with what works.
IWH bought the land containing the spring they get their water from. They found that investors liked owning a piece of that valuable resource. I suspect the real estate ownership angle quickly became a highlighted section of the investor presentation.
3. Emphasize the positive.
Communicate any successes the company is experiencing, no matter how small. That type of message engenders confidence in investors, as it reminds them the company isn't just an idea, it's a living breathing entity.
4. Eliminate the negatives.
You know the top three items the VCs are going to use as their reasons to say no. Prepare for them. Give them the data that can turn those items around and get some yeses.
5. Follow-up on all leads.
IWH tapped their personal networks and used two international investment banks to help them find investors. They also offered placing commissions of up to four percent to incentivize people to find investors for them. In the end they raised half the money from friends and family, and the other half from South African institutional investor Bidvest.
6. Believe in the business.
"There are always dark days in a business and fundraising can be especially frustrating in the current environment... Some potential investors offered us terms that were much poorer than the ones we finally achieved.  It was our confidence in our business that gave us the strength to say no."

You know your business and the value it has to offer. Get out there and tell your story and don't let anyone push you around because the economy isn't great. Do you really want to be in business with someone that would push you around anyway?

There's money out there, utilize these tips and you'll make it a lot easier on yourself in landing some of it.

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Monday, September 19, 2011

Whole Foods is "Priming" You, Are You "Priming" Anyone?

This piece from Fast Company discusses several ways that Whole Foods is "priming" you the minute you enter their store. Their goal is to get you to do more shopping than you may have intended, and  solidify their brand in your mind while you're there.

The article mentions a couple examples of how they do this using "symbolics"- unconscious suggestions:
-fresh cut flowers as you enter the store implying everything in the place is as fresh as what you're seeing there at the front door;
- prices appear as chalk on black slate implying the farmer pulled up in front of the store moments ago, set out the produce and scrawled a price for the day on the black slate;
-ice is everywhere, that's how fresh this stuff is, it's fresher than the life cycle of ice; and
-"Sales records show that bananas with Pantone color 13-0858 (otherwise known as Vibrant Yellow) are less likely to sell than bananas with Pantone color 12-0752 (also called Buttercup), which is one grade warmer, visually, and seems to imply a riper, fresher fruit."

What are some of the "symbolics" you're putting out there for your business? Are you proactively "priming" your customers? You're certainly giving off brand signals whether you're proactively doing it or not, so might as well think about it and plan accordingly.

You can give off positive brand signals in all sorts of ways, whether you're a one-person shop or have hundreds of people in your firm...
-How quickly do you get back to people?
-What value do you add to the client relationship in all of your interactions with them?
-Do your emails reflect a tone of 13-0858 or are they a little warmer like 12-0752? You might sell more bananas if you go with the latter.

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Wednesday, September 14, 2011

10 Things Learned from Entrepreneurial Failure

Grace sent me this article yesterday, via inc.com, by Scott Gerber (@askgerber) on the ten things he's learned from failure as a serial entrepreneur. You should check out the article, here are the ten items:
10. No revenue, no business. Period.
The basic idea here is "cash flow, or die."
9. You are not special, a winner, or guaranteed squat (and neither is your business).
Your idea will not walk itself into a conference room and have money thrown at it.
8. How many things can you do perfectly?
Keep it simple and knock that one idea out of the park over and over again.
7. Traditional business plans will bankrupt you.
Short and sweet, then execute. Rinse. Repeat.
6. The worst case scenario is the only scenario.
Two is one and one is none. Have back-up plans.
5. Divide your "lowest" financial assumptions or expectations by 4.
What you are currently forecasting for your first year sales is ridiculous, and will never happen. Plan on it. Also, see #6 above.
4. Strategic partners are not always good ideas.
See marriage / divorce.
3. Proof of concept isn't optional.
The difference between thinking about a business you hope to be up and running one day and being in business.
2. Business growth happens in real time.
The spreadsheet invariably jumps from zero sales to a bunch of sales at some point in the startup timeline. What is happening during that specific time period will determine how long the sales continue to be at zero along the timeline. Plan accordingly. Be nimble, be flexible, listen and adjust to your audience.
1. No matter how successful you are, accept that you will fail again.
Just make sure that during the "again" run, you don't make the same mistakes you made the first time.

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