Thursday, September 28, 2006

Dragon It Out: or, "The Audience Was a Failure"

Just another thought re Dragon's Den:

One of the most important lessons to pick up from DD is the need for a crisp, clear message. When you're pitching to someone, it's your obligation to make yourself understood. If your target market doesn't understand your message, it's your fault- not theirs.

It is in the nature of venture investors to be a little snooty - okay, arrogant - with some of the people who ask them for money. Several "pitchers" on Dragon's Den were (quite naturally) annoyed with that dismissive attitude, and accused the five investors of not understanding their concept.

To their credit, the Dragons usually accepted that criticism. But they pointed out it was not their job to understand - it was the pitchers' job to be understood.

To all the pitchers, innovators and marketers in this world: accept the feedback. Hone your message.

Only a rogue like Oscar Wilde can get away with saying, "My play was a complete success. The audience was a failure."

Dragons’ Teeth (Warning: Long post, but more fun than most)

I had a chance this morning to preview the first episode of Dragon’s Den, the CBC “reality” show that puts entrepreneurs and angel investors together to try to make deals.

I’ve written before that I think this can really help raise the sophistication level of Canadian entrepreneurs. I also think it will help investors, by empowering them to be more skeptical (see previous post) and ask better questions.

Plus, what’s clear now is that this program is going to be lots of fun to watch.

It’s fast-moving and accessible, and parts are very, very funny. The interplay and tension between the five investors (dragons) and the pitchers is real, and it’s amusing as hell. I was afraid the editing would wipe out the substance of the show, but the propucers seem to have preserved both the mood and the content of the presentations I saw in the studio.

Here’s a sample of the snappy banter you’ll hear in Episode 1 (Wednesday night at 8). I’ll leave it to you to figure out who’s speaking – a Dragon or a pitcher.

“We’re willing to sell that (the family farm) to invest in this company, we believe in it so much.”

“This is a dark and sinister idea – I'm out.”

“Are you out of your minds? You think I would let you, as a consumer, suck 10 points off me on a debit transaction?”

“Don't sell the farm.”

“When the big guys say no, the value proposition better be crystal clear.”

“Those were there two best guys we’ve seen, with the worst idea.”

“We believe in the project so much we don't believe it’s a big risk.”

“It’s very difficult to listen to your idea because you're a very sarcastic and arrogant guy.”

“Power is what we’re selling. Energy, renewable energy forever, for Canada and the world.”

“I am going to have to wait till I am dead before you can give me a royalty stream.”

“The opportunity lost on my 7% - what are you going to give me for that? What are you going to pay me?”

“This has phenomenal potential for Canada and the world.”
“Then maybe you haven't explained it right.”

“It’s driven by the moon.”

“You just don't get it. That’s your problem.”

“When I look at such a massive item and think of government involvement, I think of money just being poured out for years.”

“When you come to somebody who is a potential investor, it is best not to sling out a slightly sarcastic remark at the end.”

“This is the opportunity of a lifetime.”

“I just don't want to be in business with you. I’m out.”

“Any business that would hire you is going to go out of business.”

“Maybe the concept is just too soon.”

“It seems you've burnt through a lot of money, and you haven't even gotten out of the gate yet.”
“I want to make mistakes that don't cost me money.”

“My eyes glaze over.”

“I’m out. And frankly I think you should be as well.”

“I think you should really look back on what you're trying to do here.”

“I will pay you to stay away from any business I’m invested in. And if you come near it, I’ll set that teddy bear on fire.”

“Thank you for sharing your opinions.”

"If you have control of [the business] and I have no say other than just some cash in it, I’m not interested.”

“You are in the 1% of people who have come here to present product that actually make sense. This is not a piece of crap. Somebody will buy this.”

“I think you'd be insane not to take this deal.”

“Come back and see what she decides, after the break.”

Corner Gas on Monday, Dragon's Den on Wednesday: Your CanCon Tip of the Week.

Moral Support is Cheap

A Canadian entrepreneur friend called from out of province Wednesday to get my reaction to his new web service. At first I was intrigued, but as I heard more about it, I began to develop more and more reservations. The concept didn't seem particularly new, the product seemd unfocused, and I didn't sniff any "specialness" about it.

In the crowded web space, that can be a recipe for failure. Or worse, for spinning your wheels for years - neither failing nor succeeding, but doing just well enough to encourage you to waste way too much time and money trying to make the thing work.

After hearing about the fourth or fifth major feature, I asked my pal what kind of market research he had done. How did he know which features people wanted? (Some seemed cool, but overall they appeared almost to be chosen at random. )

Well, he said, he'd given these features a lot of thought. Plus, he'll be putting it into beta-testing soon.

But, I asked, wouldn't it make more sense to do your research before you develop the product? Isn't that easier than going to all the trouble and expense of building a product and then seeing if it's what people want or need?

He was kind of annoyed by my attitude, I'm afraid. Everyone else who had seen the website, he told me, was very excited and positive about what he was doing. Naturaly I backed off, assuring him that I'm not the target market, I could be wrong, etc.

But startup entrepreneurs and innovators should remember that moral support is cheap. Lots of friends think they're doing you a service by being enthusiastic and encouraging, when what entrepreneurs really need is tough love and sincere feedback - whether they like it or not.

Me, I prefer to deal in the truth. I have seen too many businesses fail because the entrepreneurs didn't do their homework. The more planning, market research and testing you do, the more likely you are to succeed.

Once your company is up and running, you won't have time to iron out all the kinks - so don't be in such a hurry. Plan, research, test and repeat. The business you save could be your own.

Friday, September 22, 2006

RiM's home run

Regular readers know that I think Research in Motion is one of Canada’s great entrepreneurial success stories. The funny thing is, although high-end consumers have always loved its Blackberry, email devices, RiM’s technology has never really been respected by the geek gods of high tech.

Until now. RiM’s recent release of its consumer-oriented Pearl phone/email device/MP3 player is hailed as a home run by no less than the New York Times’ storied tech analyst, David Pogue. (You can read his full review here.).

Although he has some concerns with RiM’s intuitive-but-not-always-right keyboards, Pogue calls the Pearl a pearl. “It's a beautiful, black-and-chrome, incredibly tiny slab. At 4.2 inches by 2 inches by 0.6 inches, it's much smaller than a Treo, Sidekick or Motorola Q; you've eaten candy bars bigger than this phone.”

But Pogue notes there's nothing small about the Pearl’s feature list: “colour screen, speakerphone, two side buttons that you can program, Bluetooth 2.0 (for wireless connections with laptops, headphones and cars), and so on. Some features appear on a BlackBerry for the first time: a camera (1.3 megapixels, with flash), memory-card slot, voice dialing, movie playback and a music player that can keep the tunes going while you work in other programs. Four instant-message programs are built in (AOL, Yahoo, MSN, ICQ). And this phone runs on the GSM cell network, which means that (for an added fee) you can use it overseas.”

His closing lines are everything RiM could have hoped for: “In the end, the Pearl is all about the sweet spot; for such a wisp of a thing, it's an awful lot of machine. Considering how many things it does, and how well, you may be amazed to learn that no laws of physics were broken in the making of this phone.

Congrats to RIM for getting it right – again. And for putting Canada on the personal technology map.

PS: I heard in Waterloo recently that the stock-option plans of many RiM employees are becoming fully vested (or are soon to be). That means that a lot of very talented people could soon be no longer tied to the company by golden handcuffs.
While I don't wish an exodus on RiM, I do hope some of its best and brightest will consider starting their own businesses. Just as IBM, Microsoft, Bell Northern and Nortel have all been fertile incubators of future entrepreneurs, RiM could generate a wave of entrepreneurial innovation. That would be good news for Waterloo, Southern Ontario, and, quite likely, the whole telecom world.

Thursday, September 21, 2006

The Dragons Cometh

Less than two weeks to the debut of Dragon's Den, the CBC-TV show that positions real-life millionaire Canadian entrepreneurs as potential investors in startup businesses pitched by other real-life Canadian entrepreneurs (who presumably hope to become millionaires themselves one day). It looks like it'll be a great combination of original business information and fun, personality-driven entertainment.

If you've read my previous posts, you'll know the show was shot last month, and goes for five episodes in October. Watch the first one, because if you like it, you'll want to watch 'em all.

Dragon's Den should provide great lessons in how savvy entrepreneur/investor brains work, as well as in the many, many mistakes that people make when pitching for startup funds. As well, there were a few deals made, so you'll be able to see the approaches the "dragons" make and how much negotiation it takes before you come to a deal.

(Lesson One: Even if you set the terms going into a pitch, expect them to get redefined pretty drastically.)

And believe me, this stuff is real. These dragons are spending their own money. They've done some due diligence since the taping, of course, but I hear the first deal is supposed to be signed next Monday.

By the way, the drama on these post-show deals is so intense (with debates about where the businessesd should go next and how the investment funds should be applied) that the producers have started to film one of the deals in hopes of doing a follow-up show later in the season. So watch now to boost the ratings if you want more later.

(BTW, the British version of the show continues to do well on BBC2. In fact, with Dragon's Den in its schedule BBC2 recently garnered higher ratings than BBC1, traditionally the more "mass-audience" channel.)

I had a chance to interview each of the five Canadian Dragons for a special supplement in PROFIT magazine. The result is in the October issue, on sale now. You can also read it for free here, but don't tell them I told you.

Final tidbit: The show's theme song is quite apt: "Put your money where your mouth is."

Wednesday, September 20, 2006

The Hot 50 sizzles again

Who are Canada's emerging growth companies?

PROFIT Magazine has the answers in its new Hot 50 list, which ranks growth companies that are too young (just three and four years old) to appear in its annual PROFIT 100 list of Canada's Fastest-Growing Companies. It's a fascinating preview of what's working in today's marketplace, and where tomorrow's growth companies are coming from.

This companies on this year's list have grown their revenue by an average of 946% (more than 10 times!) in the past two years.

"Savvy beyond their years, the PROFIT HOT 50 show how smart execution, combined with innovation and a willingness to seek opportunities abroad, is a recipe for business success, no matter which sector you're in or how long you've been in it," writes PROFIT senior editor Jim McElgunn. (I used to write that way, too.)

Who's on the list? Business-service firms (which account for half the list), IT, marketing and communications firms, software developers, and yes, even manufacturers. But you'll also find a marketer of bison meat (!), a supplier of education-focused child care, a manager of public and co-op housing projects, a provider of on-the-spot auto-repair loans and a new regional drugstore chain.

You can see the list of new fast-growth companies here.
Read the overview that talks about the list and what it means here.
Read a particularly fascinating and well-written story about the No. 1 company, Vancouver-based leisure-shoe marketer Holey Soles, here.*
And check out the best management practices at these young but savvy companies here.

And don't forget to buy the October issue of the magazine. It's still more fun to read in print than online.

*Why yes, I did. How did you guess?

Tuesday, September 19, 2006

Business not so tough - if you do it right?

Having grown up in a big business (Cooper Sporting Goods) and created his own award-winning small business (Alive & Well fashion warehouse boutique), Donald Cooper is one of Canada's most creative and original business speakers.

In his recent newsletter, he really nailed one of the key paradoxes of business today. I'll condense. You read, feel guilty, then adjust as required.

The Donald's main point is that many people believe that business is getting harder and tougher than ever. He's not so sure.

With today's easy to use technology for tracking sales, controlling costs, managing inventories, communicating with customers personally, measuring productivity and generating financial statements, he says, in some ways "running a business today is 10 times easier than it ever was. "

Donald remembers how Cooper, which was Canada's leading manufacturer of sports equipment in the 1960’s and 70’s, used to operate.

"Invoices were manually typed and then manually recapped onto 11,000 bin cards to record current and future orders, plan production and control inventory. The bin cards were recapped from time to time to create hand written reports for analysis. The information was late and the reports were inaccurate. As a result, we were frequently out of stock of key items and we turned our inventory fewer than three times a year.

"We were also flying blind when it came to product costing, scheduling and factory efficiency. And we call these the “good old days”!"

The moral? If you're not taking advantage of all these technologies for tracking your business and selling more personally and efficiently, you're risking a slapshot upside the head.

Donald offers you this basic question: “How successfully are you using all of the tools and technologies now available to control costs, proactively serve your customers, make better and faster decisions, expand your business, grow your bottom line…and have time to have a life?”

His advice: "Embrace the latest software, tools and technologies available to proactively manage your business, then get professional coaching in how to use it effectively …or just sell and get out before it’s too late!"

Wise words from someone who knows exactly what he's speaking about. Which puts Donald Cooper on my list of National Treasures.

Check out his website and other articles here.
See Donald in action! You can watch his June 12th presentation at Visa Canada's Small Business Big Thinking conference here.

Friday, September 15, 2006

Sell what people will buy!

When we were first starting to build the website at PROFITguide, I was a huge believer in giving content away for free. Not because I thought the content was valueless - but because there are so many free distractions on the Net that convincing people to pay for your information is just too hard. (It also raises the "what's my password again?" barrier, when you want no barriers at all to block people from maximizing their use of your site.)

Exceptions to Rick's Rule were always investment/personal finance content and, umm, "adult entertainment" sites - and I think both those theories have been borne out.

I don't think this is a forever situation. When rival content providers create an all-access pass that allows us to surf information and achives sites at a reasonable flat rate ($100 a year?), then consumers will agree to pay and producers can divvy up the pot based on where consumers spend their time.

Anyway, a fascinating story in today's LA Times underscores just how cheap consumers are when it comes to paying for content on the Web. Never mind that we're all shelling out $60 to $100 for cable TV every month; U.S. consumers refuse to pay 99 cents to watch instant reruns of favorite shows they may have missed.

CBS is scrapping its eight-month-old video-on-demand experiment with 99-cent downloads of such hit shows as "Survivor" and "CSI: Crime Scene Investigation." Instead, they are now offering these episodes free, sponsored by ads.

Said CBS exec Martin Franks: "We can make more money on advertising-supported downloads than we could on the 99-cent downloads."

Like any good entrepreneur, CBS tested different models this summer. Subscribers happily downloadedthese shows in test markets where GM paid the freight in return for ad placement.

"Viewers just didn't want to pay for it," a media analyst told the Times. "It's much easier to get money out of advertisers than out of consumers."

Next time you're trying to change consumer behaviour, keep this lesson in mind.

It sounds simple, but only sell only the things that people want to pay for. Find a different model for everything else.

Brave New Blog

I don't add new websites to my "Best Links" column (at right) very often.

But Roger Pierce and Andrew Patricio at BizLaunch are two highly energetic Toronto entrepreneurs who have just launched a blog offering all kinds of useful infomation and resources for business owners. And unlike some lazy sots whose will go unnamed, they are trying to post new stuff every day!

So check out their new Biz Blogs: Expert advice for new entrepreneurs. (It also has good information for not-so-new entrepreneurs, so give it a go.)

A sample of interesting posts:
5 deadly mistakes when starting a business

Selling to Women

Business Books I am Reading (Andrew seemes to do what I do: have multiple books on the go at one time)

What is your business worth?

For those who don't know, BizLaunch offers courses, seminars, coaching and consulting for new entrepreneurs. They do it in a refreshingly, personal and passionate way, so check 'em on out.

Don't be a “networking sleaze”

Personal networking is probably the most common – and most powerful – marketing channel for most entrepreneurs. Yet it’s fraught with peril – and the mistakes you make can come back to haunt you.

To help you master the principles of personal marketing, Inc. Magazine published a handy list of things not to do when you're networking, from California consultant Susan RoAne. You can see the article, the Don’ts of Networking, here. But Canadian Entrepreneur has highlighted ten of the best no-nos for you.

* Don't forget to do your homework.
* Don't deal out your business cards to others before a conversation occurs.
* Don't use a name to gain access without the permission of that person.
* Don't talk about the monetary terms of your last deal. (Most of us know to divide that figure in half.)
* Don't bad-mouth people.
* Don't ignore signals -- body language, gestures, words, tone.
* Don't be quick to make judgments about others.
* Don't forget to say "I'm sorry" when you have erred, as well as "I don't know, "please" and "thank you."
* Don't deflect compliments; they are gifts. Acknowledge the giver by saying "Thank you."
* Don't overstay your welcome.

I especially like the one about not shunning compliments. I've tried to become more professional myself about receiving praise, but it still makes me feel all squishy inside and I try to rush past it as quick as I can.
Since compliments don't come along every day, we should all try to enjoy the moment and use the feedback to learn as much as we can about what went right, rather than just try to get it over with as fast as possible.

Friday, September 08, 2006

Your (free) ticket to self-development

Small Business Week is just around the corner, and what better way to celebrate than by renewing your skill set and upping your motivation at the annual SOHO small business conference? And this year it’s (mostly) free!

As in the last few years, the Vancouver-based SOHO Group is running the conference in both Vancouver (at Canada Place, Thurs., Oct. 12) and Toronto (at the CNE trade centre, Thurs., Oct. 19).

The keynote speakers are David Chalk, former computer retailer turned high-tech TV host, and Ron Buist, the former marketing director of Tim Hortons – and the guy who invented the oft-copied “Roll Up the Rim to Win” promotion.

There are lots of other things going on: seminars, workshops, entrepreneur roundtables and a trade show. The good news is that after the keynotes are finished ($79 if you pre-register), admission to most activities is free for the first 2,000 attendees. (You must pre-register; it’s $50 at the door.)

Among the post-10 a.m. freebie speakers are economists from the TD Bank, my buddy Michael Hepworth on breakthrough marketing (always worth hearing, even for a second or third time), “Book Yourself Solid” author Michael Port, and business coaches Jamie Cunningham, Sandy Kemp and Warren Coughlin.

For an extra fee you can get some peer counselling or attend the post-show party. Sounds like a great way to spend the day.

Click here to register or get more information.

Thursday, September 07, 2006

Free guide to small-business terminology

“You Inc, therefore you are.”

Here’s a little marketing tip from a longtime editor: if your business slogan parodies a famous quote, alter the quote as little as possible. A Michigan-based consulting business called CompanyCrafters uses the above line, and I think it would be more faithful to Rene Descartes, and more effective, by saying “I Inc, therefore I am.”

Nonetheless, CompanyCrafters has a cool new product you should know about. They've just published a free, 45-page PDF guide to small-business terms and phrases. It’s called the Entrepreneur’s Dictionary: A Guide to Start-up Business Terms for Non-MBAs.

It’s mostly financial terms (think amortization, merchant account, zero-coupon), but who doesn’t need help with those? And there are lots of other definitions of useful, if sometimes random, business-related terms: mission statement (you wouldn't believe how many people are confused on that one), minute book, product management, value chain, etc.

It’s well worth looking at, or downloading to your computer, by clicking here.

One complaint: Given the general lack of understanding of PR by entrepreneurs, I was disappointed (if a bit amused) by the guide’s definition of public relations – n : “often referred to by its abbreviation, PR.”

Descartes might appreciate that solid logic, but it sounds unfinished to me.

Saturday, September 02, 2006

What I did on my summer vacation

Just got back from a quick family vacation to New England and New York City.

We saw fabulous whale watching off Gloucester, just north of Boston. The season continues for another six weeks if you want a real thrill.

Other than one quick business trip, this was my first sustained visit to the Big Apple in 20 years. I can’t believe how New York has changed. The Manhattan of my youth – dirty, dingy, and always vaguely threatening – is once again the gleaming, bustling capital of culture and commerce that my mother used to talk about. (She was born in Brooklyn.) It was a fun, busy place to be, radiating energy and confidence.

Mind you, I didn’t walk from the Upper West Side to the South Bronx – as I did one Election Day 20 years ago – so I didn’t exactly go looking for the dark side, as I tended to do in my youth. But we drove from Central Park West to the Battery twice (!) in two days, so we saw a lot of the city, and it looked much more alive, and much more livable, than I've ever seen it before.

Those of you who go there often might have no idea what I’m talking about. But I managed to get to New York a lot more in my teens and 20s than I do now, and I remember when it was falling apart and a sordid symbol of American failure.

I’ve often quoted former NYC mayor Abe (“How'm I doing?”) Beam when speaking on the importance of soliciting feedback. Well, congrats to him and all his successors on a runaround of epic proportion.

I’m still pumped up from the trip. I drove downtown (in Toronto) yesterday in about 16 minutes, marveling at how slow and non-aggressive the local drivers are. Sure, drivers in Manhattan are crazy (especially the cabbies, who will risk all our lives to gain a car length on you), but the energy New Yorkers bring to bear in their daily lives is something most Canadians could use a lot more of.