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  • Managing Start ups: Marketing Musts for Start Ups

    New Marketing StrategyNew Marketing Strategy (Photo credit: Intersection Consulting)

    An excellent article in Forbes by two of my favorite Golden Seeds members, Anita & Sheryl:

    When starting a company, it’s important to come up with a financial and business plan, a location (in RL or online) and a marketing strategy. Both Anita Brearton and Sheryl Schultz (more below) are seasoned marketing professionals who have devoted their careers to launching ventures. Here, their best advice for businesses at the earliest stage of the formation of new companies.

     

    • Make marketing central to your vision for your company. Too many entrepreneurs give little or no thought to a marketing strategy.  They focus instead on products or the size of the market opportunity without defining the marketing strategy and sales plan that will help them capitalize on the opportunity.  When they pitch investors, the marketing slide is an afterthought, and often consists of one bullet point, usually social media. Right from the start, you need a marketer at the table with the founder and product developer or tech team.

     

    • Start with a one sentence description of what your company is and what it does. It will help customers and investors understand who you are and why you’re useful.  And be sure your identity is credible and meaningful to customers. 

     

    • Putting a website up too early is starting in the middle. The message document must come first. Don’t spend time on company names, taglines, logos until you have developed your positioning. 

     

    • Begin with a stake in the ground! Work hard from day one on developing your corporate positioning. Who are your customers? What problem do you solve for them? How do you solve it better than your competition? How do you want your customers and the market at large to think about your company?  Where do you have the opportunity to be a market leader?  If founders don’t have marketing skills, themselves, they often confuse tactics, such as public relations or paid search, with marketing strategy. Media coverage can be extremely valuable, but only if it communicates your message.  Think about marketing as a conversation with your prospective customers, but don’t talk until you know what you really want to say. If the company positioning is confused or unfocused, customers and investors will also be confused because the company hasn’t defined its core message. If you don’t have a marketing strategy, you don’t have a business.
    • Hire a marketing professional who is both strategic and tactical, a hands-on marketer. You want someone who is both a strategic thinker and willing to put hands on the keyboard, someone who can actually do the wireframe for the website, still willing to get dirty hands. Once you are ready to execute your marketing strategy, you require help with synthesizing the information and research, which an experienced professional can do.  This process is a grind because there will be barrels of information about the industry or about the competition, but you have to absorb it all so you can develop a distinct position in the market.
    • Get out in the marketplace! When companies do positioning work, they often do it in the confines of a windowless conference room. Get out in the market to see the customers, to view your competitors and their marketing strategy first hand, to familiarize yourself with the industry. You may find out your tagline looks like everyone else’s. By concentrating on an internal focus without taking a broad view, it’s easy to set up straw man position which won’t hold up in the real world.
    • Look for a launching point. Find opportunities to showcase what you do, especially when you’re in a crowded market. For example, one company we have worked with, Crimson Hexagon, which analyzes consumer opinions created in social media, monitored Obama’s first State of the Union speech for CNN; after that, the company name constantly appeared whenever their data was cited. The election provided a crucial launch point for them.
    • Marketing start ups requires hard work and constant refinement. It’s not the same as marketing for more mature companies because you have no brand awareness; there isn’t any budget; you often don’t have people resources; the CEO may or may not have marketing experience. But whether it’s a technology, medical science, internet or consumer company, your ideas will go nowhere without a comprehensive marketing strategy.  Take the time to forge one early on.
    • Once you create a marketing plan, commit to it. It’s not enough to hire a good marketer or come up with a marketing plan unless you’re willing to spend several hours a week to sit down to discuss the execution. Good marketing professionals demand commitment from the highest level. It may be hard for first time entrepreneurs to communicate or get their minds around their businesses, so when you hire the skills you lack, you have to be prepared to listen.   
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  • Disappearing Supply Chains: Harper Collins digitally dumps warehouses

    According to the Wall Street Journal, HarperCollins Publishers will close two warehouses in the U.S., a sign of how the growth of digital books is prompting book publishers to rethink how they distribute print books.
    Harper will hand off warehousing and distribution services for all its titles in the U.S. to R.R. Donnelley & Sons which already prints most of HarperCollins's books in the U.S. The switch is likely effective summer 2013.

    At that point, all HarperCollins books, including those from its religious imprints, will be warehoused and shipped from a Donnelley facility in the Midwest.
    The pact expands on an earlier agreement in 2011 between HarperCollins and Donnelley that called for Donnelley to provide some warehousing and distribution services in the U.S. That deal allowed HarperCollins to close two of four warehouses."We want our investments to be in marketing and editorial," said Brian Murray, chief executive of HarperCollins. "Streamlining our physical distribution chain with Donnelley will create a simpler, faster supply chain, and virtually one-stop shopping for retailers."

    Publishers are reassessing their printing and distribution infrastructure as e-books takes a greater portion of overall book sales. E-books don't require paper, printing, binding, or warehousing. When Bertelsmann SE & Co.'s Random House and Pearson  PLC's Penguin Group announced plans to merge last week, they cited the ability of the combined company to "generate synergies from shared resources such as warehousing, distribution, printing and central functions."

    HarperCollins will close warehouses in Scranton, Pa., and Nashville, leaving only a book returns center in La Porte, Ind. The company declined to say how many employees would be laid off. 

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  • Supply Chain Innovators: Harvest Express Brings Online Grocery Service to Detroit

    A photochrom postcard published by the Detroit...A photochrom postcard published by the Detroit Photographic Company. (Photo credit: Wikipedia)

    According to Xconomy,  Jenile Brooks was born in raised in Detroit, and she always knew that one day she’d be back.
    Brooks headed East after high school and eventually settled in New York City, where she was working as a film producer. It was in that capacity that she finally returned to the Motor City last year. She was in town working on a documentary about Detroit’s “food desert.”

    Though Detroit’s lack-of-grocery-stores situation isn’t quite as dire as some national media outlets have claimed, it is true that there are too many neighborhoods where the only groceries within walking distance are found at a liquor store. “While working on the film, I learned there are less than three grocery stores per 10,000 people in Detroit,” Brooks adds.
    That got her thinking about the larger question of food access. She was a customer of Fresh Direct, an online grocer that services metro New York City. The Fresh Direct model works, she says, because New York is densely populated with people who have relatively high incomes and no cars. How would that model work, she wondered, in much less dense and less affluent Detroit?
    “Fresh Direct wouldn’t consider Detroit because of the perceived buying power of Detroiters and what it would take to maintain a store,” Brooks explains. “By operating online, we can take a minimal capital investment to prove that it works and then expand it throughout the city.”

    In January, Brooks plans to launch Harvest Express in five Detroit ZIP codes encompassing the neighborhoods of Midtown, Downtown, Woodbridge, Corktown, and Indian Village. Online groceries are a somewhat risky proposition in a city known for high rates of poverty and relatively low rates of home Internet service, but Brooks already has the support of two partners, one of whom is Jared Saverino, whose family owned Phil’s Market for generations. She’s also lined up some seed money from the Enterprising Health accelerator.

     “Getting people to change behaviors is always a tough sell,” Brooks notes. “But our research has shown that a lot of people are interested, and they’re already shopping online.”
    Brooks plans to use the same “just-in-time” processing model as Fresh Direct, meaning Harvest Express will keep dry goods stocked in the company’s warehouse on the North End and will coordinate perishables with wholesalers, many located at Eastern Market, on a daily basis depending on what customers have ordered. Brooks says as long as a customer orders by midnight, they’ll get their groceries delivered the next day. She compares Harvest Express’s prices with those at Trader Joe’s, and plans charge a $4 delivery fee per order or an annual membership fee of $99, which would cover delivery charges for a year.

    Brooks wants to highlight local farms and food manufacturers, so Harvest Express will offer detailed information to customers about who’s producing the food it carries. “The goal is to source locally as much as possible,” she says. “Those kinds of partnerships are perfect for promoting on the site. You’ll always have a name, a face, and a backstory.” To help personalize the experience, the Harvest Express website will also be able to suggest products based on a customer’s dietary restrictions, save shopping lists, and remind regular shoppers if they’ve forgotten an item that they usually order.
    Brooks says Harvest Express is putting the funding from Enterprising Health, a business accelerator for startups with solutions to improve health in Detroit and the surrounding communities, toward launching the beta test in January.

     

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  • DropShip Commerce, a Salt Lake City-based provider of virtual supply chain management solutions, has raised $4.3 million in VC funding. The company’s founders invested $2.8 million, and were joined by Kickstart Seed Fund, Peterson Ventures and David Cohen. www.dropship.com

  • Managing Start Ups: What is your customer’s total experience with your product or service?

    CustomersCustomers (Photo credit: Vinqui)

    My friend Adrian Gonzalez , founder of Logistics Viewpoints (one of the top sources of creative supply chain thinking today) reminded me of this excellent article every entrepreneur should read. It's 15 years old, but the messages ring true today.  

    "In their July 1997 HBR article "Discovering New Points of Differentiation," Ian C. MacMillan and Rita Gunther McGrath write that "most companies, in seeking to differentiate themselves, focus their energy only on their products or services. In fact, a company has the opportunity to differentiate itself at every point where it comes in contact with its customers-from the moment customers realize that they need a product or service to the time when they no longer want it and decide to dispose of it." They go on to say: "We believe that if companies open up their creative thinking to their customer's entire experience with a product or service-what we call the consumption chain-they can uncover opportunities to position their offerings in ways that they, and their competitors, would never have thought possible."
    The article outlines how to map the consumption chain, which includes answering questions such as: How do customers find your offering? How do customers make their final selection? How is your product or service delivered? How is your product or service paid for? What is your customer really using your product for? What do customers need help with when they use your product?"

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  • Managing Start Ups: Discuss, Debate, Decide, Support

    Lama debatingLama debating (Photo credit: Wikipedia)

    I attend a lot of Board meetings (for profit & non-profit), start up strategy sessions, internal company meetings, etc. etc. I am constantly amazed at how quickly many of these go off track. I find myself reminding everybody about the four key rules around making and implementing successful decisions. I know most of you know these by heart, but I often see them being ignored when passions run high. So here goes my reminder:

    • Discuss--a full and fair discussion around an issue, strategy direction, organizational decision, or whatever is critical. But, please, stop repeating the same points if you or someone else has already made them. Leave that to the debate stage if you think people are not paying attention to your thoughts. Keep asking if all relevant thoughts are on the table, then move onto the next stage.
    • Debate–Here's where you begin to look at the famous "three options" around a decision and debate each in turn. Why three? It's best to choose a set of options that represent the full spectrum around a decision–like, let's not do this, let's do it a little way, let's do it all the way. That way, you can get a broad reading of the willingness of the group to support a path forward.
    • Decide–once you are all tired of debating an issue or direction, decide. Often, one person needs to put forward a cogent argument for one of the options and persuade others that this is the way to go. Variations on the option are discussed and compromises made, if necessary. Be sure to poll the room to make sure everyone is heard and that all relevant points are made. Then DECIDE on the path forward.
    • Support–but you are not quite done. Even though some members of the group have participated fully in the decision, they may still have reservations about supporting it. Take a tally of all individuals and ask for their support, or recycle on the decision. Everyone might not be totally behind the decision but they sure better be willing to support it.

    We had a rule in Accenture partner meetings that all had to support the decision, even though some might not of fully agreed with the decision. This was critical to making sure we could move ahead and implement the changes without second guessing later. We would look around the room and ask each person to speak up and offer support if we suspected a problem. But once we left that room, everyone stood behind it. Sometimes it was painful to agree, but that's what building a great company is all about. You are not always right or will get your way. That's fine.

    I'm not saying you should go along with stupid group decisions, but that issue should have been vetted earlier in the process.

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  • Supply Chain Strategy: WTF are 3-D supply chains?

    English: The FedEx Institute of Technology is ...English: The FedEx Institute of Technology is a major research contributor in the areas of Supply Chain Management, robotics, and intelligent systems. (Photo credit: Wikipedia)

    Huffington Post recently published a Blog extolling the virtues of "3-D supply chains" (whatever they might be) and how the technology could revolutionize the global economy. The authors bemoan the fact that US companies use execution based software to manage their supply chains, but lack the strong operational feedback models that Toyota uses to drive flexibility in operations.

    Well, pardon me, but the authors are pretty ignorant of the transformations going on in North American supply chain management over the last decade. FedEx and UPS use real time routing systems to alter delivery routes as requirements change during the day. Descartes' Global Logistics Network connects tens of thousands of suppliers, carriers, manufacturers and retailers, allowing real time visibility and management of shipments pending and in transit. What about companies like Alibaba and Panjiva, who give any company access to millions of global suppliers–instantly? I could go on but you get the point. A little internet searching can accomplish a lot of "3-D supply chain" objectives.

    They then carry the argument to more absurd height, speaking about 3-D supply chains allowing all businesses having a "competitive relationship with like businesses under fair conditions, and not simply by size" and that a "cooperative relationship will arise between a business and its nearby competitors". Huh? Is this like not knowing you are a dog on the internet? I just don't get it. 

    The authors would be better served to learn more about supply chains today than is spouting academic speak about "how things should be" in some perfect world only they have the eyeglasses to see.

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  • Supply Chain Innovators: Zipments same day delivery platform gets funded

    New York-based Zipments, an online service platform for same-day delivery, has received an undisclosed amount of funding from the New York-based  venture capital firm FirstMark Capital, the New York City Economic Development Council, and the Windquest Group of Grand Rapids, Mich.

    Here is the press release.

    Our society keeps wanting everything instanly, resulting in solid long term prospects for same day delivery models.

  • Venture Investing: Not Interested, Interested, Intrigued

    Gnomes' three phase business planGnomes' three phase business plan (Photo credit: Wikipedia)

    Venture guys have three ways of reacting to a start-up pitch. What do each of them mean? Well, here's my take on it:

    Not Interested–I try and be honest with people up front. I will tell them it is not in my investing space, or that I do not understand the technology. It does not mean that the idea is bad, just that I cannot see how I can help you be successful. Your response: Move on and find a venture guy who is passionate about your space.

    Interested–I'm interested enough about your idea to continue a dialogue, but you probably are missing some big parts of your business plan, like an effective marketing strategy (Note–if I see one more "viral" marketing plan, I am going to puke. There is no such thing). Your response: go away and fix the problem areas and come back and see me.

    Intrigued–now we are talking. You have a solid idea, I like your business plan, your founders are credible, you have spent enough time getting to know me for me to trust you, etc. etc. Let's do business. Your response: ask for a check.

    Obviously, this is overly simplistic, but it does give you a few insights into the mind of a venture guy as he or she thinks about investing in your company.

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  • Managing Start Ups: Measure twice; Cut Once

    English: tape measure from Sweden.English: tape measure from Sweden. (Photo credit: Wikipedia)

    My grandfather was a carpenter, and a good one. Grandpa Anderson immigrated from Sweden when he was 16. He had no choice. The family needed money and he had to go to America to earn it.  No matter he did not speak the language and had no skills. He had to make it as the family was depending on him. He built a house by himself in his late 70's and worked up until a few weeks before he died. 

    He taught me a valuable life lesson from his carpentry work–measure twice; cut once. When you are working with expensive woods, which he did often, it saved a lot on waste and money.

    It also applies to life. I have learned that thinking about something for a while, rather than giving a quick reply gives me more time to "measure" my response and not "cut" to an answer too quickly. And I have learned that your "measured" repsonse may be different in the morning, or a few days later, so no need to rush a reply if timing is not critical. 

    There's something to be said for "quick and dirty" decisions, but considering all the angles is not a bad way to reach a more optimal choice.

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