Thursday, December 28, 2006
"The best way to destroy an enemy is to make him a friend."
- Abraham Lincoln
Who better than Lincoln, who presided over a massive Civil War, knew what an enemy was - and the need to turn them into former enemies? This is obviously a skill demanded on all levels - personal, business, political. More importantly, it's also an attitude - a vision of what could be if you look beyond day-to-day grievances.
Some of the most powerful business deals I know have been forged by companies that are (or were) competitors. Who knows you better? Who else knows your market? Who has more resources you can leverage than the businesses that are most like yours?
In this week of (relative) peace, think about how you could make your life easier by making today's "enemies" tomorrow's friends.
Friday, December 22, 2006
This was a busy week for me, which could be why I just wrote my first post of the week - late Friday afternoon.
And suddenly I find we've hit two milestones.
My previous post (Burn Your Treehouse) was the 400th post in this blog's history - which means I've written more articles for Canadian Entrepreneur than I ever did for PROFIT Magazine, the Financial Times or Equinox Magazine, my three previously-most-prolific outlets.
Plus, today (or very early Saturday morning) we will hit our 15,000th visitor. A drop in the bucket for some websites, of course, but a milestone for Canadian Entrepreneur. It took us 14 months to get our first 5,000 visitors, six months to get the next five thousand, and less than three months to land the latest 5Gs - so we're still on a growth trajectory.
Thanks to all who visit. Thanks for all your comments and support.
Please accept my best wishes for a great Christmas holiday season.
And thanks to Carly for decorating the cookies above.
My favourite post (so far) is “Burn Your Treehouse.” In this article, the authors suggest that when many people start companies, the first thing they do is turn their back on the customer – just like the little boys who build a treehouse and hang out a sign saying “No girlz allowed.”
The author (presumably Cambrian House founder Michael Sikorsky) recalls doing exactly that when he started his previous, company, Servidium. “We bunkered ourselves in and built the best web development framework in the world…. It had database abstractions, security and templating mechanisms for separating presentation and business logic. It made tea and buttered your toast and even gave us a patent. It did everything - except sell.”
He admits his company was un-customer focused. “We got so caught up in the genius of our very own framework that we forgot to include the customer as part of the process.”
The price paid for this was a product nobody wanted. “By the time we realized the error of our ways, it was too late. The product never sold and we were never more than a wannabe product company kept afloat by professional services.”
So how do you stay out of the treehouse and engage customers early? “You force it,” says Sikorsky. “Build the most compelling feature of your product and get it out there. Just build it and see if you’re meeting an unmet demand. If no one is willing to spend any credits on your product or service, you’ve got your answer.”
Bottom line: Make the gap between product development and revenue as small as possible.
Click here for the full post (there's lots more). It’ll make you laugh, cry and smarter.
*If you want to know what that means, the next issue of PROFIT may help.)
Monday, December 18, 2006
“I honestly think it's better to be a failure at something you love than to be a success at something you hate."
George Burns, American comedian, 1896-1996
This is not so much prescriptive advice in an entrepreneurial sense, but a pretty accurate description of the way many entrepreneurs view the world. Like artists, they tend to be driven by visions and personal ambitions that provide emotional rewards that more than make up for the risk and sacrifices that are often involved in taking "the road less travelled."
Although, George Burns was not above offering advice. His singular secret of success: "First of all, you've got to have talent. And then you've got to marry her like I did."
Thursday, December 14, 2006
Andy Nulman with his Montreal-based Pow! Right Between the Eyes blog caved in and revealed “Five Things You Wouldn't Know About Me,” in response to a meme challenge from fellow bloggers Mitch Joel and Michael Wagner. Then he tagged me to do the same – along with other blogging buddies Tim Sanders, Austin Hill, Roger Von Oech and someone mamed Shardy.
So, since this is the first time I’ve been memed, I’ll give it a shot. But I don't intend to make a habit of it.
Five Things Most Readers of this Blog Don't Know About Me:
1. I still call my best friend from Grade 2 Robbie. And his parents are the only people in the world who still call me Ricky.
2. I got into journalism because I was lonely. In my first and only year at the freshman factory that is York University, I got tired of going all day without talking to anyone. So I looked around to see if there was some club I could join and actually hang with some human beings between classes. Most of the clubs were ethnic-based, like the Armenian Students’ Association, and tempting as that sounded, I kept looking. Finally I dropped in at the student newspaper to see if they would have me. They were so happy to see me they asked if I wanted to be sports editor. I was never lonely again.
3. I was once almost sued by Conrad Black. I had written a story about him and his corporate domino-shuffling while I was at the Financial Times, and he took objection to my comment that he “xxx xxxx xxx as if they were xx xx xxxxx.” He demanded an apology. I wanted to fight, but I was also due to leave for Europe on a leave of absence in a few weeks, so I agreed to negotiate. His lawyers demanded a correction, but we held out for a “clarification.”
4. It was on that trip to Europe that I decided to ask my girlfriend to marry me. Eventually, she did.
5. Here's some actual news. Next month I start writing a twice-monthly column on entrepreneurship issues for the National Post. Better hope I don't tag you!
I can’t help but wonder what virtue these people see in bigness. Economies of scale did not help General Motors compete with Japanese and other upstarts. Size did not help Enron succeed (it just made the damage greater when everything fell apart). Digital Equipment sat by and watched the microcomputer revolution happen.
And closer to home, the Canadian banks’ market dominance did nothing to fend off a creative, resolutely customer-focussed campaign by ING Bank. (Imagine, helping clients save money!)
My take: only innovation and customer responsiveness will save the banks as they venture into the unregulated outside world. And where are those characteristics more likely to be found?
In a group of archly competitive, fast-moving, entrepreneurial firms, weaned on competition and the need to satisfy fast-changing clients needs? Or in a few giant, monopolistic firms with less reason than ever to listen to customers, innovate or do things differently?
Years ago, I wrote an editorial saying the banks should be allowed to merge – because forcing companies to stay in business when they no longer have the will to live simply makes no sense.
But that doesn't mean that bank mergers will be good for Canadians – or, long-term, for our banks.
Your comments are welcome.
Wednesday, December 13, 2006
In her monthly newsletter, she expounds on high-falutin’ issues of the day and tells us stories about her encounters with bad customer service, lousy advertising, and other marketing miscues.
It’s entertaining reading, but there’s nothing there that speaks to her personal expertise. Any idiot with a typewriter and the time to shop or read could produce a newsletter like that (and many of them do!).
But Margie (not her real name) is a senior profesional who solves real problems for Grade A business clients. Her marketing never cites the work she’s doing – which to my mind is much more interesting than her opinions on mistakes made by big, impersonal companies that should know better but never do.
So halfway through the lunch I went for it. I asked why she never writes about the situations she encounters with clients, and how she helps solve them. Why not share the practical, road-tested solutions that she comes up with for her clients – many of which will apply to every reader of her newsletter?
I'd figured she had a reason. So imagine my surprise when Margie said she’d never thought of it.
To her credit, she saw the opportunity right away. Deal with typical problems faced by her readers, and share the solutions she’s been involved with. That’s solid information for her readers/prospects – and perfect positioning for her.
We discussed ways to tell these stories without compromising client confidentiality, which is paramount, and she left our lunch determined to make a breakthrough.
Think how simple this is to do. Break away from doing what you've been doing and ask yourself: what would my clients really like from me? What would constitute real value to them?
The point is that all of us have to keep learning. We have to push ourselves. And we have to be open to feedback and criticism.
And then, of course, we have to be prepared to use that information to create positive change.
The moral: Seek out more feedback. It could be the secret weapon that moves you ahead.
Tuesday, December 12, 2006
It’s the first story in a new regular feature called Startup Scan, in which PROFIT commissions a profile of a young company just starting out, and then submits the story to a jury of experienced entrepreneurs for their comments. Does the company have a credible plan? Are they going about it the right way? Are there additional, related markets the company should be pursuing?
It makes for a fun piece, and good insights into what makes for business success.
You can read the story - and the related critiques – by clicking here.
For those too busy to click through, here are a few excerpts:
-- Why CEO Chuck Buchanan walked away from his previous company after a partnership dispute, and decided to found another jet-charter company:
Having found his business-building instincts blunted in a company that had grown to 100 employees, Buchanan agreed to leave. "It was disturbing at first," he admits. "But the more I looked at it, the more I saw this as an entrepreneurial opportunity — a chance to grow something." By selling his half of Flightexec, Buchanan admits, he really didn't have to work again. "But you can't just sit around and grow petunias," he says. "You're not supposed to be a lump in life."
On November 2, NovaJet launched its first flight — a business jaunt for five people to Chicago's Palwaukee Municipal Airport, aboard a plane subcontracted from another charter company. Sitting on the tarmac just outside NovaJet's office abutting Hangar 9 at Pearson International Airport, the airline's sole jet, a seven-seat, 480-nautical-miles-an-hour Dassault Falcon 10 (call letters: C-JET) was still waiting for its permit to fly paid passengers. In the meantime, NovaJet had already launched its marketing campaign, featuring ads in the Globe and Mail and pay-per-click ads through Google AdSense targeting business clients who have never used chartered planes and consider executive jets a perk for the wealthy and self-indulgent.
Not true, Buchanan insists. His target market is mid-sized businesses that may have four or five people who need to fly 900 km to 1,600 km, often there and back in a single day. It might be a sales team making a presentation in the U.S. Midwest, a management team reporting to head office on the East Coast or an engineering team headed for a mine in northern Quebec. Once you add up airfares, take into account the time required to negotiate airports and change planes, and add hotel and meal costs, executive charter rates start to look good.
Monday, December 11, 2006
Click here to see the winners of the 2006 Canadian Blog Awards. You can click from this page through to all the winners and runners-up.
Congrats to Vancouver Housing Market Blog, which handily won two categories: "Best Business Blog" and "Best Local Blog." It rates a phenomenal 3,000 hits a day (about 30 times the traffic that this blog gets). Here's the power of blogs: It grew from 15,000 hits a month in January to 100,000 in October.
Sadly, Canadian Entrepreneur did not make the cut. For next year, clearly I have to get ALL my relatives onside. :-)
“You will never 'find' time for anything. If you want time you must take it.”
Charles Buxton – UK-based lawyer, academic and Labour Party MP
Okay, so he wasn’t exactly a business leader.
But this is surely the most powerful time-management quote ever. It speaks to the necessity of combining initiative, purpose and urgency – and what could be more entrepreneurial than that?
How might this insight help you prioritize this week?
Friday, December 08, 2006
Let me know who you think has been this year’s most inspiring, successful or impactful Canadian entrepreneur. (“Canadian” being broadly defined as any Canadian-born entrepreneur, any Canadian-resident entrepreneur, or any entrepreneur operating mainly in Canada.)
You can submit as many nominations as you'd like. You can just submit their name(s), or you can tell us in your own words why you think this person should be recognized by this blog. (To submit, leave a comment below or email me at rick (at) rickspence.ca.)
The prize? We’ll salute all the nominees, and then choose a winner who will be profiled in this blog and – perhaps – in a portion of the mainstream media where I have some influence. (That influence is growing, too – watch for an announcement soon!)
Criteria? Winners will be chosen based on their initiative, success, obstacles overcome, and overall impact. Since this blog has readers from sea to sea, I hope we will receive submissions from across the country.
A few examples to get you going: Why not Balsillie and Laziridis of RiM, for their vision, persistence and success in the Blackberry department? Or Kevin O’Leary, the former tech entrepreneur turned angel investor/prince of darkness who made a huge impact this year on TV’s Dragons’ Den?
How about Teresa Cascioli of Lakeport Brewing, for crashing the exclusive beer club with her buck-a-beer brands? Or John Sleeman, who sold the family brewery that he revived single-handedly for big bucks this year?
These are all Ontario examples of the top of my head. I’m hoping outraged readers will send in their own nominations from across this land.
Entry deadline: Dec. 23.
(All nominees will be entered into a draw for the only other Canadian Entrepreneur mug in existence. It’s a priceless prize, so don't forget to check back after Christmas to see if you've won!)
Thursday, December 07, 2006
So I was delighted to find the following article from the Minnesota-based Roberts Group: 11 Ways to Improve Your Writing and Your Business.
Here are the 11 points: feel free to click here for the whole story.
1. Begin with one grain of sand.
2. Give the who, what, when, where, and why.
3. Step up to bat and take a few swings.
4. Adopt a plain writing style.
5. Keep it short.
6. Give the reader a map.
7. Be active.
8. Cut unneeded words and prune windy phrases.
9. Watch out for these four commonly misused words.
10. Stress benefits, not features.
11. Give your writing the conversation test.
Why does simple, clear writing matter? Because your employees spend more time trying to decipher poorly written reports and memos than they spend reading well-written documents. Because employers and customers shun job-seekers and marketers who don't communicate clearly. And, as author Sherry Roberts says, because “People won't buy what they don't understand.”
Here’s how you get started.
1. Begin with one grain of sand: Before you start to write any business document, identify the single idea you're trying to get across. Jot it down in one sentence on a note pad next to your keyboard. If you were writing a news story, this would be the headline.
Here are some examples:
You want an appointment to explain your new product. (sales letter)
Using computers to track inventory will save thousands of dollars. (report)
The janitorial crew will be working new hours. (memo)
Your one-line synopsis is a grain of sand; it will help you begin. Large projects can be built from it, but the grain of sand itself is neither overwhelming nor intimidating.
As you write, reread your one-line reminder. It will keep you grounded, focused, on target. Know what you want before you begin to write, and the writing will come more easily.
Get the whole story at http://www.editorialservice.com/11ways.html
Tuesday, December 05, 2006
It should surprise no one here that I favour blogs as a big marketing play. Blogs are flexible, powerful, they add life to websites, they are loved by search engines, they serve niche markets in intimate ways, they deepen relationships – and some even drive sales. It’s a versatile tool you need to understand.
BUT – blogs aren't for everyone. I count four problems with blogging - four ways that blogging strikes Terror into the hearts of many businesses. Coincidentally, they all start with T.
Time: Blogs require time. Usually, executive (or key employee) time. Sadly, no one cares what your office temp or promotions assistant thinks – they want to hear from your top person or people. And that means you have to take time to think up subjects, to write, and to post.
Talent: To blog successfully, someone in your shop has to know how to write – or you have to hire someone to do it for them. Vague, unclear, ungrammatical and other bad writing will do you no favours.
Topics: Someone, somewhere, has to keep thinking up topics to blog about. In an ideal world, you would get so much feedback and so many comments from your readers that you would never be at a loss for content. But in the real world, you have to post two or three times a week – and you need to have something to say.
Thick Skin: Sometimes people will object to what you write. Some will use your blog as a forum for criticizing you or your company. You have to get comfortable with inviting critics into the tent. As Shel Israel and Robert Scobie say in their book Naked Conversations, you may be surprised to find other customers coming to your defence, which is a wonderful outcome. At any rate, you can certainly defend yourself. But bloggers have to be prepared for pushback.
Business is full of systems and processes and shortcuts that are designed to prevent important, time-pressed employees from committing to regular, ongoing obligations such as blogging. Blogging goes against all common sense in that it asks you to sit down, think and create.
Of course, that’s why blogs are so powerful in the right hands – and useless in the wrong ones.
(There is always the possibility of delegating blogging to trained professionals, such as PR people or outside writers. Purists scoff at letting other people blog for you, but I think it can be done. But you have to agree to work closely with your PR people – and you need the same commitment, the same ability to think and analyze, and the same risk-tolerance as if you were doing it all yourself.)
Make no mistake: the product is worth it - as an archive of company knowledge and experience, a search engine attractor, a relationship-building tool, and as an interactive mechanism for engaging customers and stakeholders in ongoing dialogue. But blogging's freshness and walk-on-the-wild-side creativity will create problems for many firms before they begin to see the light.
Monday, December 04, 2006
"A wise man will make more opportunities than he finds."
English author, courtier, & philosopher (1561 - 1626)
Saturday, December 02, 2006
Here's a quick course in project management: 100 Rules for Project Managers, as developed by Jerry Madden, Associate Director of the Flight Projects Directorate at NASA's Goddard Space Flight Center.
Within 10 years, NASA went from shooting dogs into space (one-way) to sending three men to the moon and bringing them safely back home again. So obviously they learned a thing or two about building effective teams, creating consensus and getting things done.
Here are some of my favourite maxims as collected by Jerry Madden. (You can view and download the whole list here.)
Rule #1: A project manager should visit everyone who is building anything for his project at least once, should know all the managers on his project (both government and contractor), and know the integration team members. People like to know that the project manager is interested in their work, and the best proof is for the manager to visit them and see first hand what they are doing.
Rule #5: Vicious, despicable, or thoroughly disliked persons, gentlemen, and ladies can be project managers. Lost souls, procrastinators, and wishy-washies cannot.
Rule #6: A comfortable project manager is one waiting for his next assignment or one on the verge of failure. Security is not normal to project management.
Rule #10: Not all successful managers are competent and not all failed managers are incompetent. Luck still plays a part in success or failure, but luck favors the competent, hard-working manager.
Rule #15: The seeds of problems are laid down early. Initial planning is the most vital part of a project. The review of most failed projects or project problems indicate the disasters were well planned to happen from the start.
Rule #24: Pay close attention to workaholics—if they get going in the wrong direction, they can do a lot of damage in a short time.
Rule #28: People who monitor work and don't help get it done never seem to know exactly what is going on. (Being involved is the key to excellence.)
Rule #55: Over-engineering is common. Engineers like puzzles and mazes. Try to make them keep their designs simple.
Rule #68: Remember the boss has the right to make decisions. Even if you think they are wrong, tell the boss what you think but if he still wants it done his way; do it his way and do your best to make sure the outcome is successful.
And my favourite:
Rule #83: Sometimes the best thing to do is nothing. It is also occasionally the best help you can give. Just listening is all that is needed on many occasions. You may be the boss, but if you constantly have to solve someone's problems, you are working for him.
Check out the whole list here.
Wednesday, November 29, 2006
If you have a business question that’s bugging you, you may not even have to wait for an answer. They have a huge archive of business-related questions, covering everything from startups, home business and hiring to managing your business, e-commerce, and mergers and acquisitions.
I surveyed the archives and found some terrific answers to past questions. The volunteer experts are clearly well qualified, and some offer excellent information. (The worst part is how inarticulate many of the question-writers are, but the answers are literate and useful.)
One business person asked how he could get his people to ask better questions when interviewing job candidates. The response included links to hiring manuals, as well as many smart interview questions, arranged by category such as Education, Work Experience, Job Performance Evaluations, and Self-Assessment Questions. This is great information that could save you from hiring a consultant or running out to buy some book.
I haven't tested sending in a question to see what kind of response you’d get, but I’ll try it and let you know how it turns out. Click here to check out AllExperts.com yourself.
The other resource I wanted to tell you about is likely sitting on your desktop. I’ve just been playing around with Office 03’s voice-recognition system, and it’s absolutely amazing.
You hook up a microphone, do a 15-minute training session, and you can start dictating just about anything. I find that I can’t dictate a complex article, but this works fine for simpler, more conversational documents (such as writing blogposts). I find it also works for memos and e-mails.
Here’s an example of the accuracy of the voice recognition system. I will not edit anything that I dictate in this paragraph. Everything you were reading came directly from the computer based on what I spoke into my headset. So far I see only one mistake: in the previous sentence, the computer wrote the word "were" instead of "are." So, we’re not quite at the Star Trek stage, where we can speak to our computer and tell it to do sophisticated things reliably such as declare war on the klingons. But I think we’ve come a long way since I’ve tried that Dragon dictation system about ten years ago and it made about ten mistakes in every sentence (and it took forever because you had to speak slowly, word by word). This won’t work for every office; the system doesn’t like distractions or interruptions or loud background noise. And you have to get used to the sound of your own voice out loud in a quiet office. But if you can think and your feet, and you’re prepared to go back and review and correct the text of the computer has put down—and if you are as bad a typist as I am - then you may just find that this system revolutionary. It can save you a lot of time. And it’s kind of fun to.
(Okay, I have bolded the mistakes I noticed in the above paragraph: it didn't capitalize Klingons; it said "I've tried" instead of "I tried"; “think and your feet” instead of “on your feet”; an extra “that” in “that this system” that I don't think I said; an unneeded "of" in the phrase "the text of the computer has put down"; and that final "to" should be "too." Overall, not bad. And I was speaking at almost a normal pace.)
To check it out for yourself, look up the speech menu under the “Tools” drop-down menu in your Word program. Good luck and happy talking.
Leave a comment if you'd like to share your own experience with Voice-Recognition. I never thought I’d say this, but Microsoft rocks.
Tuesday, November 28, 2006
Maybe people were turned off by my use of the word "podcasts,' which interests only a fraction of the populace. So I'll rephrase the question.
If you had a chance to meet with any successful entrepreneur(s) and pick their brain, who would it be? Bill Gates, Conrad Black, Michael Dell, Terry Matthews: the possibilities are endless. They don't even have to be Canadian entrepreneurs.
In other words, what business leader would you actually cross the street to listen to?
You can email me (Rick (at) rickspence.ca), or just leave a comment below. Remember, anyone who responds gets entered in a draw to win an original Canadian Entrepreneur mug!
The contest closes December 6. I look forward to hearing from you.
"If doubt is challenging you and you do not act, doubts will grow. Challenge the doubts with action and you will grow. Doubt and action are incompatible."
Canadian (from Belleville, Ont.) motivational speaker and performance coach
Friday, November 24, 2006
Today I got a note informing me that they're about to renew my subscription "at the guaranteed low rate of 27% off the newsstand price" - $39.95 for 11 issues.
Hold it right there. That's four times my original rate of $10 a year.
On the newsstand this week, their current issue contains an insert card (you know, the ones that fall to the floor as soon as you pick up the issue) offering two years for $11.60 - Canadian. That's about one-seventh the "guaranteed low rate" they're offering me.
Yet on the back of my renewal notice, Business 2.0 promises me that "Your price is one of the lowest rates available to anyone, anywhere."
I can't imagine it's possible to find a higher rate. When I hit the Net to look, my first Google response offered a Canadian rate of $13.75 for 22 issues. That's a long way from the "outstanding savings" Business 2.0 is offering its most important customer - the paying subscriber who wants to renew.
(Maybe it's a selling feature for advertisers: "Our subscribers are so dumb they don't shop around. They'll pay any price you ask.")
Business 2.0 calls itself "The playbook for a new generation of leaders." In an era where we are supposed to be respecting and empowering existing customers as our most valuable asset, ripping them off doesn't quite seem to fit the 2.0 spirit.
Speaking as a veteran editor and publisher, a magazine subscription is the best entertainment or publishing bargain you can find (even at $39.95). But treating good customers this way is bad business.
Visit this post from Toronto art director Frederik Samuel to see how today’s savviest marketers might rebrand the flags of the world! (It'll take you about two minutes.)
Warning: although this is very funny stuff, it might also get you thinking.
Thanks to Seth Godin for the heads-up.
Thursday, November 23, 2006
To which a Toronto lawyer early this morning responded, why do I think lawyers shouldn't get paid? Painters do! He sounded quite offended.
Well, thanks to a post this afternoon by Lee Liu of JobLoft, we now have some idea what that bill amounts to:
"What they didn’t show on TV was that the legal bills for both the dragon’s side as well as our side of the deal (yes, we had to pay for both, but that’s just reality), eats away almost a quarter of the $200,000, after taxes."
As the VCs like to say, it costs as much to make a big deal as a small one.
The updates emphasized how resentful (or regretful) the entrepreneurs were regarding their Dragon Day experience. We learned almost nothing about how their businesses have advanced during that time, or what the owners learned from the experience. Probing how they retain their confidence after the tongue-lashings they received from the dragons would have been fun and possibly educational, but the interviews never scratched the surface.
The highlight, though, was the blow-up of one deal, on-camera, when the normally jovial Robert Herjavec ripped up a cheque after the dragons’ strategic plan was questioned by a current director of the company.
Here’s what happened: all five dragons had agreed to invest $40,000 each for 50% of JobLoft, a Toronto-based job-site company founded by four friends from Ryerson University. The deal was just being signed when Ryerson prof James Norrie, who had taught the students and was made a director of the company, took issue with the dragons’ plan to market mainly to employers (he thought the company should target job-seekers, too).
Based on what we saw on the tube, things got out of hand fast. The dragons wanted to know who this guy was and why they hadn’t heard about him before, and Norrie started belittling the price they were paying. He also sniped about how insignificant that amount is to people who fly to meetings in private jets (well, how else is a busy guy like Jim Treliving supposed to get around?).
That was it. The three dragons in the room (the third was Kevin O’Leary) bristled at that last remark, and Herjavec tore up the $200,000 cheque.
You can follow the fallout at JobLoft’s blog, where the four founders posted an official explanation last night after a month of (CBC-imposed) silence. The guys themselves seem not unhappy with the outcome; for one thing, they weren’t getting as much of the dragons’ time as they had been led to believe. (On the original show, O’Leary had warned the kids he’d be “in their face” every day.) But then, the deal hadn’t been done yet: how much time were the dragons supposed to be giving them?
Here’s how one founder, Lee Liu, sized up the problem: The dragons, he noted, “are just very busy people and having a board meeting once [in] a blue moon and at their convenience just doesn’t cut it for a 50/50 partnership. Experience, contacts and business knowledge is great but only if you have time to give it.”
Even better than this debate are the 30-odd (Update: more than 50!) comments that follow, with visitors split pretty evenly between those who think JobLoft had a narrow escape, and those urging them to go back to the dragons on their knees to try to resurrect the deal. It’s an exciting, real-time discussion on an important issue: the role of angel investors/VCs in startup businesses.
Should the guys have saved the deal? They originally agreed to it because they thought the dragons could help them grow their business by leaps and bounds. If they still believe that, the size of the initial investment is almost irrelevant: the pie should soon enough be big enough for everyone.
If the guys had changed their minds and grown disillusioned with their new mentors, they should have either called off the deal or raised their concerns, in person, prior to the cheque-signing. They should have taken control of the process, instead of letting their professor do the dirty work, or letting dragon-sized egos upset the deal.
Although the four founders were stuck with a legal bill they call “huge,” they still come out winners. JobLoft has received tremendous exposure, and the founders got about four years’ worth of learning in three months.
“Communicate” is the No. 1 lesson I would take away from this.
No. 2? The lawyers always get paid.
UPDATES, Thursday at 10 am
The blogosphere is buzzing about the DD/JobLoft meltdown. If you want to follow up:
* Sean Wise liked the finale episode more than I did. Plus: more JobLoft reactions and a survey.
* Kempton in Calgary offers some wise perspective.
* The CBC's DD site is abuzz. (Scroll about halfway down to pick up the latest comments.)
More to come, I'm sure.
3 pm update: Blogger Ryan Coleman of Found in Translation has some thoughts about the show.
JobLoft Gets Out of a So-So Deal But Still Needs to Dump Norrie says Ben Yoskovitz
Wednesday, November 22, 2006
Doesn't matter if you listen to those things or not - I want to know whom you respect and would make an effort (even a small one!) to listen to.
And everyone who responds gets entered into a draw for one real-live Canadian Entrepreneur coffee mug!
You can leave a comment at the end of this post, or click through to this previous post, and see what responders said last week, and then respond to that.
Either way, I hope to hear from you. Contest closes Nov. 28.
And yes, cette offre est aussi disponible au Quebec.
Man, they should be paying me.
This is the followup show where they look back at some of the pitchers and the deals that got done. I hear one deal went south with a bullet, so it should make for some fun viewin'.
Business is a unique subject area in that it mixes the harsh reality of numbers and discipline and time clocks and supply chains with an endearingly human element of dream-building. Kudos to the Dragon's Den folks for figuring out how to build an entertaining* show by focusing on the dreams.
- * and yet instructive, too. I remember telling the producers before the first show aired that they should edit together a longer version for educational use. Already I know at least one busines prof who's showing it in class.
Tuesday, November 21, 2006
He’s run a business before, so he knows how things work. He compared his industry (which shall go nameless) to the hotel business in Toronto. “Service is lacking,” he says. “It’s all supply and demand: When it’s busy, the customer gets gouged. It takes a situation like SARS to make you appreciate the customer again.”
His company is trying to promote itself on price, but sell long-term on service. The question he asks prospects is: “What would it take to earn your business, and how can we keep you happy forever?”
And here’s his bottom line: “If you treat your customers like it’s the first day you opened your business, you're not going to lose them.”
There were so many good ideas in that article that I had to add one more.
In his book Rath reports on management's shocking failure to engage with its employees. Based on Gallup’s decades of interviews with workers around the globe, he says only 17% of employees report that their manager has made “an investment in their relationship” in the past three months.
That’s not just a shame but a scandal, given this day and age when so few employees seem to engage with their work. Rath says his research shows that “People who do say they have a good relationship or friendship with their boss are more engaged and satisfied with their jobs overall.”
But according to Rath, “When we talk to employees, they tell us that for the most part, their managers are actually ignoring them.” And that’s about the worst thing you can do, he says.
“I always thought it was terrible if your manager was just focusing on what you were doing wrong all the time. But it turns out from our studies that it’s even worse if your manager is not paying any attention. There is a huge chunk of managers out there who just aren’t thinking consciously about how they can build that relationship.”
One explanation for this finding, notes Rath, is that many larger organizations actually discourage employees from socializing with colleagues in a different pay grade. Some even have 1-800 lines to help employees snitch on disobedient workers.
Let’s just mark that as Exhibit 1,452 in the list of “Big Business blunders,” and note it as one more reason small businesses are usually smarter and more effective than big ones.
For the entire story, click here.
If you have to register, go for it. It's free and worthwhile.
Monday, November 20, 2006
“In the factory we make cosmetics; in the drugstore we sell hope.”
Charles Revson, founder of Revlon
I’ve always held that marketing awareness is the chief asset of any entrepreneur: knowing who buys your product and why.
Because what they buy, as the Canadian-born Revson well knew, is not necessarily what you're selling.
Friday, November 17, 2006
People who have a "best friend" at work are seven times more likely to be engaged in their work than other employees. They also have fewer accidents, more engaged customers, and are more likely to innovate and share new ideas.
That’s the word from Tom Rath, leader of the Gallup Organization’s Workplace and Leadership Consulting Worldwide, as well as author of the No. 1 bestseller, How Full is Your Bucket?
If this is true, you have a golden opportunity to increase employee engagement and effectiveness simply by helping people in your organization communicate and connect with each other.
Rath described his theories in a new interview with HR.com, the Aurora, Ont.-based “Human Resources Portal.” (Three cheers for a Canadian company that thinks big and talks like a winner!)
Gallup has been studying friendships (among many other things) among 10 million people for more than a decade. According to its data, when people don’t have a best friend at work, there is only a one in 12 chance that they’ll be engaged at work.
When people are asked about their favorite past jobs, they are most likely to point not to a company or brand or job, but to the close friends they had there.
In case you're wondering, the research says that one-third of employees have a best friend at work. In other words, there's lots of room for improvement.
For years, employers have tried to build collegial, effective workplaces without turning them into a social club. Now it looks like those personal relationships are more important than we thought.
How are you going to build stronger interpersonal relationships in your office?
For the entire story, click here.
PS: One more Big Idea for you to think about:
When Gallup asked 700 people in Texas to name the activities they enjoy most during their day, the most popular activity was spending time with friends (yes, it ranked above time spent with spouse). And way down at the bottom of the list, below cleaning the house, was spending time with the boss.
“Pretty big disconnect there,” says Rath.
Thursday, November 16, 2006
You can read the column here, but the core point lies in the following paragraphs:
- "Early in my new content-marketing career, I discovered how hard it is to separate individual marketing initiatives from the big picture. Brought in to help firms do something simple, such as write a press release or update a website, I would ask a few positioning questions to ensure I understood the market and the message. Questions like: Who is your target audience? What do they expect from you? What do you want to sell them?
- "Not only could many companies not answer those questions, I discovered they had been unconsciously avoiding them. Understanding customers—not to mention ourselves—is a tricky business that takes time, effort and thinking. Putting aside the daily busywork to recalibrate and refocus not only seems wasteful, it might expose competing points of view, lack of focus or a failure to keep pace with the market."
The column concludes by urging entrepreneurs to consciously review their own positioning efforts. Ask questions such as these:
- Who is your market? How has it changed since you last asked this question?
» Why do customers buy from you?
» What's the highest-value product or service you can sell to them? And what do they really want to buy from you?
» Who else needs and wants the products or solutions you're selling? How can you engage them?
Agree? Disagree? Want to explore this further?
You can read the rest of the article by clicking here. Or you can click on Comments, below, and get a dialogue going with your fellow entrepreneurs.
Not at all the subtle approach some others have taken (see preceding post)!
You know what to do.
Bloggers work very hard to create new and interesting material, all in the hopes that you'll find something you like (and then maybe even, please oh please, leave a comment). So why not reward your favorite blog by voting for it as Blog of the Year!
First-round voting is open till Nov. 21. Second-round voting is Nov. 23 to Dec. 1.
And for some reason, they let you vote once a day!
Check out all the nominees and place your votes at http://cba.myblahg.com/
Nominees for Best Business Blog of 2006:
A Canadian Econoview
Social Media Group Corporate Blogging
The Other Bloke's Blog
Community Security: The Provident Blog
Vancouver Housing Market Blog
Digital Life News
Venture Law Lines
We're Not Wired Right
My Name Is Kate
Worthwhile Canadian Initiative
Tuesday, November 14, 2006
We’re really developing traction – it’s been just six weeks since we welcomed Visitor #10,000. In fact, yesterday was our biggest day ever in terms of traffic, with 88 visitors.
Visitor 12,000 hails from Minnesota and found us by doing a Google search for “ways to cut costs in my business.” He found our story “How to cut costs,” from February 2005 – our first month of blogging.
Which shows one of the advantages of blogging over, say, writing a column for a magazine: the blog, like The Force, will be with you always.
Let's say someone (not me, thanks for asking) was to start a podcasting service featuring short, insightful interviews with North America's leading entrepreneurs.
Who would you most want to listen to?
What entrepreneur or business leader would you want to hear?
In other words, if you could get insider tips and advice from any two or three top business leaders, who would you most like to hear?
Even if you've never listened to a podcast, your opinion is important. This isn't about technology. It's about who has the right stuff to attract an audience of busy entrepreneurs.
Please let me know who you would like to hear from. You may leave a Comment below, or contact me by email at rick (a) rickspence.ca
In return for your generosity, everyone who responds by Nov 28 (UPDATE: Deadline extended to Dec. 6!) will be entered into a draw to win the first-ever Canadian Entrepreneur coffee mug - a $20 value! (Suitable for regifting.)
Thanks for your help. I really would like to hear your opinions.
Monday, November 13, 2006
Philip Selznick, Leadership in Administration: A Sociological Interpretation (1957)
What are Canada’s top consumer brands? (Both products and companies were eligible.)
Before we reveal them, here is Arieh’s take on the key attribute of a strong brand: “In order for a brand to succeed it must create a unique customer experience, and deliver it consistently across all touch points with customers.”
Now, here are the Top 10 Canadian brands announced last week:
Cirque du Soleil
Bell / Bell Mobility
TD Canada Trust
Shoppers Drug Mart
Do you agree? Disagree? Leave a comment.
Personally, I find the list a little confusing. Cirque du Soleil is a bigger brand in Vegas than it is in Canada. Bell (is it Bell Canada? Bell Ontario? Bell Quebec?) is a confusing mess these days, beavers be damned. (They even seem to have dropped the "Bell Mobility" name in favour of the somehow-even-more-bland-brand, "Wireless.")
Loblaw’s is an icon only in Ontario, and is busy rolling out Superstores under various names in the rest of the country. And Molson Canadian is such a great brand it’s called Laurentide in Quebec. (The Montreal Canadiens would make more sense on this list!)
To my mind, a more complete list would replace those four with Rick Mercer, The Globe and Mail, Swiss Chalet and the BlackBerry.
For Arieh’s full article (which contains more on branding and less ranting), click here.
Sunday, November 12, 2006
I must owe somebody some money.
Before the launch of Dragons' Den, I predicted to several people that Laurence Lewin of La Senza would be the breakout star of the show (after the always acerbic Kevin O'Leary, of course, since he already has his own show, on ROB TV).
But Laurence's dapper English accent and aristocratic manner haven't measured up to Robert Herjavec's charm and goodwill. Acording to a highly un-scientific survey (reviewing the Google search terms that lead people to this site), Herjavec is the man. This blog has received scores of visitors who came seeking info on Herjavec. We've had very few hits from anyone looking for the other dragons.
In fact, people seem to take a personal interest in Robert, the man with the custom-built, 50,000-sq-ft Bridle Path house. Just today one person came to this site by way of a search for "Robert Herjavec + age," and another looked up "Robert Herjavec + school."
Whatever can it mean?
BTW, Dragons returns this Wednesday with a repeat of the first show (which launched with scant fanfare and drew poor ratings). The following week, a special episode looks back at some of the most colourful entrepreneurial pitchers, as well as the deals the dragons made. I've heard that one of them, as would be appropriate with such fire-breathing people around, went down in flames.
Friday, November 10, 2006
What's the least glamorous thing you do regularly in the line of duty? Dealing with all the problems that rise to the top. They're usually simple misunderstandings that require my intervention. I apologize a lot.
What skill would you most like to improve? Praising people.
If you could go back in time and do one thing differently in your business, what would it be? I would go back and say "I" and "me" less, and "us" and "we" more.
What keeps you up at night? I cannot think about work after 6 p.m.; if I do, I'm up all night, so I don't, ever.
For the rest of the interview, click here.
"Some [startups] have gone without venture capital altogether or have raised far smaller sums than venture investors would have liked. Many were sold for millions before venture capitalists could even get in. That has been a challenge for venture capitalists, who have raised record amounts in recent years and need places to put that money to work.
“V.C.’s hate it; they want you to take big money,” said Jay Adelson, who is the chief executive of two start-ups, Digg and Revision3. Digg took some venture money, but far less than backers offered, and Revision3 has been running on about $850,000 raised from a group of angel investors."
Fear not. The VCs are actually learning to adapt to the market.
- "Just last week, Charles River Ventures announced it would offer loans of $250,000 to entrepreneurs as a way to gain access to promising start-ups. Other firms are also giving out small loans, albeit not as a part of any formal program. "
Welcome to the real world, NYT. Vulture capitalists have never been loved (or even tolerated) for anything but their cash. Every entreprenur knows that as soon as they take VC money, their head is being measured for a pike.
The difference now is that there are more alternatives for funding, especially from angels (anyone with money who invests as much for the relationship as the return). Our society has never been richer, and these angels are smarter and more experienced than ever, and ready to take intelligent risks.
Pity the VCs: All that money, and no one wants to dance.
"The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective."
World's Greatest Investor
IT World Canada has just published a useful story on leaving your notebook computer behind next time you travel for business.
Imagine – napping on the plane without feeling guilty about not going over those spreadsheets! (If that’s too daring, just print out a hard copy for reading in the departure lounge.)
The story looks at breakthroughs in mobility technology that allow you to be just as productive using someone else’s computer while you're away. A lot of intriguing ideas, such as using your iPod to store data and Internet settings. You retrieve them by hooking it up to a remote computer, say, at your hotel’s business centre.
* Find out if the airport(s) you’ll be using has its own computer-equipped business centre;
* Access the files you need through online data-storage services such as Mozy;
* Access your home computer from anywhere using the subscription service GoToMyPC
(a great product that has certainly saved my bacon a few times).
Check out the story here.
Thursday, November 09, 2006
Feel free to visit them all and see what kind of all-star bloggers Canada has to offer. (Go ahead, click on through, I won’t mind.)
A Canadian Econoview --- B(abble)log --- BPWrap --- Canadian Entrepreneur --- CEO Blog --- Digital Life News --- Market Insight --- My Name Is Kate --- Social Media Group Corporate Blogging --- StayGoLinks --- The Other Bloke's Blog --- Thomas Purves --- Uninstalled --- Vancouver Housing Market Blog --- We're Not Wired Right --- Worthwhile Canadian Initiative
You can vote for your favourite blogs starting Nov. 25. Check here for more details.
Canadian Entrepreneur: Connecting you to the Business Web since, er, 2005.
“But then, why didn't you stay out longer and catch more?" asked the tourist.
The fisherman explained that his small catch was sufficient to meet hisneeds and those of his family. The tourist asked, "But what do you do with the rest of your time?" The fisherman replied, "I sleep late, fish a little, play with my children, and take a siesta with my wife. In the evenings, I go into the village to see my friends, have a few drinks, play the guitar, and sing a few songs. I have a full life."
The tourist interrupted, "I have an MBA from Harvard and I can help you! You should start by fishing longer every day. You can then sell the extra fish you catch. With the extra revenue, you can buy a bigger boat."
“And after that?" asked the Mexican.
"With the extra money the larger boat will bring, you can buy a second one and a third one and so on until you have an entire fleet of trawlers. Instead of selling your fish to a middle man, you can then negotiate directly with the processing plants and maybe even open your own plant. You can then leave this little village and move to Mexico City, Los Angeles, or even New York City! From there you can direct your huge new enterprise."
"How long would that take?” asked the fisherman.
"Twenty, perhaps twenty-five years," replied the Tourist.
"And after that?" asked the fisherman. "That's when it gets really interesting," answered the Tourist. "When your business gets really big, you can start selling stocks and make millions!"
"Millions? Really? And after that?" asked the Mexican.
"After that you'll be able to retire, live in a tiny village near the coast, sleep late, play with your children, catch a few fish, take a siesta with your wife and spend your evenings drinking and enjoying your friends."
The moral: To thine own self be true. You may already be where others want you to go.
Found on the Internet. Author Unknown.
Tuesday, November 07, 2006
That advice was geared to writing non-fiction books or magazine articles, but I am struck today at how relevant most of it is to anyone writing in a business context. So here is my list of “7 Ways to Write with Power,” adapted for business writing and online attention spans.
1. Don’t skimp on the research. You can’t write with power if you don't have the facts and the details and context behind them.
2. Use vivid images. Instead of clichés, make your writing stand out by using original, griping images that engage all the sense.
3. Don’t hurry your writing: Space is always scarce, readers’ patience is limited, and brevity is usually best. But you can gain attention and influence by slowing down for key moments, letting details, wordplay, emotion or rhythm engage the reader, rather than content alone.
4. Use strong verbs. Verbs are the keystone of any sentence. Throw out your adjectives and learn to use more vivid, evocative verbs. I read from an article that transported the reader by using powerful, unexpected verbs such as “scribble,” “disappear,” “abandon,” “swoop,” “smuggle” and “dance.”
5. Vary your sentence structure. Short/long. Dialogue/description. Objective/subjective.
Especially avoid subject-verb repetition (“He did this. Then he did that.”). Variety is the spice of communication.
6. Write with authority. Provide context that proves you know your stuff , offer authoritative facts (“Our department’s absenteeism rate was the highest in the company’s history), and use telling detail.
7. Build towards strength. Never “taper off.” The strongest word or image should come at the end of your sentence. The strongest sentence should come at the end of your paragraph. That’s how you keep people reading – and paying attention to what you say.
(Hardly anyone teaches stuff like this. If you care about good writing and want the full list of 10 tips, drop me an email – rick (at) rickspence.ca. I’ll send you a copy of the original handout, which includes a link to the most powerful, best-written article I’ve ever read. I used that article to showcase how a really good writer makes use of the writing techniques I advocate.)
In his blog, ProPR, Joe is on a one-man mission to chronicle growth of blogging and other social media from every blog/Web2.0/social marketing conference he can find – and his writeups are great. So reading his blog can save you thousands of dollars in travel and convention costs.
This week he writes up Alec Saunders’ presentation to the recent CaseCamp Ottawa, in which Alec makes the, well, case for corporate blogging. I am not convinced that blogging is the solution for all companies, but everybody should be looking at it as a possible strategy. And Saunders makes a great, well, case study for blogging as a core marketing strategy for young tech startups looking to build profile and credibility.
Saunders, founder of Ottawa-based Iotum, a VOIP application provider, offered three essential benefits to corporate blogging, sez Joe:
Thought leadership. Trying to magnify a point of view and thought and to get other people to pay attention to it.
To grow communities around your product. A blog is a fabulous tool for creating a conversation around your product and your company. Microsoft has done an extraordinarily good job with this.
Pure visibility. A blog is a way to create more visibility for your company, if properly tied to your corporate website.
Alec’s blog , Alec Saunders.Log, now generates more than 184,000 visits a month – equivalent to a national magazine. The difference, of course is that this is, for the most part, a self-selecting audience of business people who take the VOIP space seriously – so it’s precisely the market he wants most to attract and influence. (Of course, Alec crosslinks regularly to the Iotum site to remind his audience why he’s here.)
The result: Saunders has created a community of like-minded individuals who join his conversations and link to him. He has now built up over 23,000 links from other blogs to his site – which generates the “Google juice” that makes sure he’s a player in any almost any online conversation in his field.
So what’s the secret of blogging success?
I've stolen enough of Joe’s thunder. For great tips for more powerful blogging, check out his original post here.
Monday, November 06, 2006
Treliving says his mistake was getting out of touch with the communities where he was opening new restaurants. Having wrongly assumed that success in Canada implied further success in the U.S., he finally moved to Dallas to oversees Boston Pizza’s expansion in the States.
"A lot of Canadian companies expand down to the U.S. and are not successful, and the reason probably is that they don't send one of their chief executives, or people who have been in the business for a long time. They sort of hire people down there, then you have to keep showing them the culture that you want," he said.
What did he learn? “Take more time and review what and how you are going to attack the problem.”
It musta worked. BP's American division, Boston's The Gourmet Pizza will open its 45th store this week, with plans for 20 more.
For the whole story, click here.
Friday, November 03, 2006
"There is not enough darkness in all the world to put out the light of even one small candle."
This is of course a favored religious metaphor, but it's also an essential message about creativity and individualism. In entrepreneurship, we follow our own path, often through doubt and even despair. Beautiful images such as this can keep us going.
(Note: readers in Alberta and Saskatchewan can skip the rest of this post.)
I don't think the rest of Canada will slip into recession soon, but it has become a possibility, should energy prices keep rising, the dollar stay high, or US growth stall.
So, realizing that many entrepreneurs today are too young to remember the last recession (or, heaven forbid, the one before that, when I cut my teeth as a business journalist), I thought I would share the 10 lessons I recall from the Great Recessions of the '80s and '90s.
(You can read the more detailed version by visiting PROFITguide. Click here.)
1. Stay liquid. In tougher times, cash is king.
2. If you think you'll need financing, line it up now.
3. Focus on relationships. You'll need the goodwill of both customers and suppliers.
4. Tighten up collection policies.
5. Cut costs now.
6. Get your employees onside. Let them know you're expecting tougher times, and solicit their ideas for increasing revenues or reducing costs.
7. Smarten up your compensation policies.
8. Invest in productivity.
9. Remember that recessions are part of the economic cycle. They wring excesses — as well as weak-hearted or behind-the-times underperformers — out of the system.
10. Pick a niche and expand. Tough times can be a great opportunity for real entrepreneurs to show what they're made of.
Wednesday, November 01, 2006
1. Be a customer. Bring a notepad and pencil to competing establishments and ask a lot of questions.
2. Find out as much as you can about the people who run competing businesses.
3. Buy stock in your competitors. If you're competing against a publicly traded firm, you can receive regular updates on the firm's results and strategies.
4. Talk to your competitors' customers.
5. Use the Internet. Keep tabs on competitors’ websites and use online services such as Dow Jones Interactive or Google Alerts to access information.
6. Attend industry conferences and trade shows.
7. Assess the competition's goals. A competitor trying to increase its market share might lower prices; a firm attempting to increase profits may cut costs. If you know your competitors' goals, you'll be better able to anticipate their strategies.
8. Don't delegate the job of keeping up with competitors. You might appoint someone to work with you on the task, doing research and the like. But as the entrepreneur, you're in the best position to appreciate and act upon information about your competitors.
I would add one more tip: Open a channel (as they say on Star Trek) to your competition. Be on friendly terms with them, make a point of chatting with them at conferences, meetings, etc. There are many ways you can help each other.
I know many entrepeneurs who compete tooth and nail, but also happily share information and refer business to each other when times require it. Business success today requires many allies, and like-minded competitiors rank among the best.
(For the full original story, and all 12 tips, you’ll want to read the original post here.)
Monday, October 30, 2006
He is a longtime Bain consultant who has become the guru of customer loyalty. His new book, The Ultimate Question, is a marvellous inquiry into the importance of loyalty and how you can make it work for you. And I know from meeting him a few years ago that he's a nice guy, too.
Unfortunately, he only seems to blog about once a month. (Memo to Fred: that's not a blog, it's an ugly newsletter!) But what he does write is choice.
I loved his August 29 post on "The True Source of Corporate Reputation and Profitable Growth." It's an apparently authentic reproduction of an email exchange with his son Chris over the summer as Chris grew tired of his bank's high fees and bad service and went looking for a new one. It's an interesting way to see Fred's theories at work. And it has a happy ending, because Chris found a bank with fabulous service and free chequing!
Worth reading for anyone interested in customer service and loyalty - or who's tired of paying bank fees for the privilege of being a customer.
Click here for that story, or check out Fred's latest posts here.
“How likely are you to recommend us to a friend?”
That’s the key message from Boston-based loyalty guru Fred Reichheld, one of my favourite management pundits. He believes customer loyalty – based on instituting meticulous customer feedback systems – is the key to “good profits” (i.e., long-term) and sustained growth. You can find more about this in his recent book – short and easy to understand – The Ultimate Question: Driving Good Profits and True Growth.
The latest issue of Rotman Magazine from the U of T Business School offers an interview with Reichheld that provides a great primer to his work – and how you can put his theories into practice at your business.
Reading the article on-screen is just a little complicated. You have to download the whole issue (a big file), so it could take some time. Click here and look for the Fall 2006 issue with Nelson Mandela on the cover. (The Reichheld story is on page 8 of the magazine, or on page 10 as counted by Adobe Reader.)
My favourite part:
Rotman: It’s been said that half of the frontline employees working today are actually undermining customer loyalty; what can be done about this?
Reichheld: This is a huge problem. Some of the loyalty leaders I study say that the first thing to do is focus on your own employees, and I think in many cases that’s right. Until you have frontline employees who are promoters, who are enthusiastic advocates for your product or service, there’s no way you’re going to turn customers into promoters.
And as we’ve seen in our research, there are more detractors amongst front-line employees than there are promoters. It seems obvious, but companies often ignore this, and they go on thinking, ‘we need to be more customer-focused in order to grow, so we’re going to send out a million surveys.’
That’s the wrong thing to do: the first thing to do is talk to your own employees, and figure out what it is that they aren’t happy about, and get their input to fix it.
Friday, October 27, 2006
"Things turn out the best for the people who make the best of the way things turn out."
- John Wooden, celebrated UCLA basketball coach, named ‘Coach of the 20th Century’ by ESPN.
I like this quote because it's a reminder that attitude is more important than strength, intelligence, money or any other resource. It also has a catchy reverse symmetry.
And while it probably wasn't intended as a comment on business, I believe it represents the epitome of entrepreneurship.
If you have a favourite quote you'd like to share, just leave a Comment.
Thursday, October 26, 2006
That’s pretty hard to do, since the future can’t be known, small businesses’ finances tend to be opaque to anyone from outside, and, of course, because there's often only a very thin line between success and failure.
But I took a shot at it. Based on my experience as a small-business writer, researcher, editor and consultant, I came up with a list of nine characteristics of a business (or its management) that tend to correlate with small business success. I’m sure there are many more (leave a Comment if you want to suggest some), but here is my list:
* having (and better still, actively revisiting) a current business plan
* access to outside capital
* the owner has a college, university or graduate degree, or substantial industry experience
* the owner has previously run a business
* support of a board of directors or advisory boards
* being founded or run by two or more partners who possess complementary (not duplicated) skills and experience
* exporting their products and services to at least one other country
* the company is actively adopting automated systems and proven processes to become more efficient – giving the owner more time to work ON the business rather than IN it.
* the company is involved at the intersection point of two or more fundamental trends (see earlier post: Where Trends Converge).
To get a feel for the owners’ commitment to the growth and success of their business, I proposed asking them these four questions:
- Tell me about your business plan. How often do you update it?
- What processes are you developing to make the business independent of you, day-to-day?
- Who are the key people in your organization, and what are you doing to make sure you retain them and keep them motivated?
- Do you have a succession plan to ensure that you develop key people, and that the business will be in good hands if something should happen to you?
Austin (more on him here) has just started blogging at Billions With Zero Knowledge. In a post called Puff the Magic Dragon, Lives on CBC, he questions the wisdom - or sense - of anyone agreeing to a venture investment (either buyer or seller) after as little communication as the Dragons and pitchers have had.
He was particularly skeptical of the deal, mentioned in my previous post, in which the four founders of Jobloft sold half their company to all five Dragons.
"Would you get married and give half your assets to someone you’ve known for five minutes, an hour? Now contemplate this - would you marry into a polygamous marriage with 5 co-wives/co-husbands after an hour-long meeting?"
I think Austin is both right and wrong. Right, because who can argue with more and better communication? And wrong, because this is a TV show, not a binding contract. A lot goes on after the taping of the show to make these deals legal, and it wouldn't be hard for either side to change their mind after doing their due diligence.
As an entrepreneur and an angel investor (at the ripe old age of 33), Austin also proposes a few questions that should be asked before deals such as these get too serious:
* What are the capital requirements of the business as it grows?
* How far the funds are going to take the company?
* Which milestones are the critical ones to get the company to the next risk reduction phase ?
* What kind of shareholder agreement will be required?
* What is the strategy for future financings?
* How large should the employee option pool be?
* What preferred rights if any do the dragons have?
* What will the management team look like as you grow?
Welcome to the blogworld, Austin. I look forward to reading your stuff.