Tuesday, December 28, 2010

A Christmas Business Model

I know it's a little late to be talking about Santa Claus, but my Xmas card/Dec. 24 post generated a compelling response from one of my favorite business thinkers, Donald Cooper, so I didn't want to wait till next Christmas to share it with you.

My previous post asked if Santa qualifies as a true entrepreneur. Donald's reply ran thusly:

"Rick, as I give your Christmas message more thought, there are many observations re your “mystery entrepreneur’s” business model and the business lessons that evolve from it...

1. He has clearly focused target customers....good little girls and boys.

2. Hires people with physical challenges....elves.

3. Business is based in a low-rent location....North Pole.

4. Pays close attention to detail... makes lists and checks them twice.

5. Offers the convenience of on-time, home delivery and free gift wrap.

6. Has gone Global.

7. Successfully uses Social Networking to get customers to write him re what they want, so as to plan production and control inventory.

8. Is masterful at getting loads of free media publicity.

9. Cleverly arranged a global cross-brand promotion with Coca Cola.

10. But, he has no discernible revenue model...and,

11. No succession plan, or exit strategy.

There is much to be learned from all of this."

I especially like No. 7. It's true and subversive at the same time.

For more of Donald's out-of-the-box thinking, check out his free articles and resources at http://www.donaldcooper.com/

I also liked his signoff: "Be well...make a difference...have fun."

Saturday, December 25, 2010

Is Santa Claus a real entrepreneur?

Yes: Innovative distribution model (flying reindeer)
No Ho Ho: Antiquated, one-size-fits-all marketing model; all customers pay the same price

Yes: Prepares an annual operating plan, and checks it twice
No: Hiring practices include recruiting only elves in his workshop

Yes: Popular brand is known the world over
No: Failed to control his intellectual property, meaning anyone can use his image to sell anything

Yes: Exports to over 200 countries
No: Tax and visa status unclear; not good with paperwork

Yes: No. 1 in market share
No: Only works two days a year

Yes: Creates incredible value for his customers
No: No known succession plan or exit strategy

Yes: Has clearly defined communication plan focusing on one positive message:

Merry Christmas to all!

And best wishes for a happy holiday, and a prosperous New Year!

Thursday, December 23, 2010

Mentors and Movies

My column in this week's Financial Post looks at the role mentors can play in small business. I met with a trio of experienced business mentors with the Innovation Synergy Centre in Markham, Ont., and grilled them on their best advice for other entrepreneurs who don't have mentors. The result was some great, road-tested wisdom anyone can benefit from.

• Go where the money is. [Mentor Reza] Reza Alavie once mentored a home-services company that provided quality service but was barely breaking even. "Like a lot of SMEs," he says, the company wasn't charging enough for its services. That doesn't mean it could just raise its prices; Alavie helped the owner recognize she should reposition the company to serve high-end consumers at higher price points. Today the company has a carriage-trade reputation and a long waiting list for appointments.

Click here to read the full story.

Holiday Bonus: Last week’s column took its lead from my recent visit with an economic-development agency in Saskatchewan. I was impressed by the work done by Sagehill Community Futures in creating jobs and businesses in its territory, north and east of Saskatoon. In fact, I realized it reminded me of something: George Bailey’s community co-operative Building & Loan Society, in the Frank Capra movie It’s a Wonderful Life.

In the movie, Jimmy Stewart’s character gets to discover how different things would be if he had never been born. Productive ventures like Sagehill get to see the difference they make every day.

Playing the part of Bailey’s Savings & Loan is Sagehill Community Futures Development Corp., headquartered in Bruno, a 500-person town 90 km east of Saskatoon. Under the direction of an all-volunteer board, Sagehill’s five-member staff provide loans no one else will make, hand out free business advice, offer management training and development, and help new or insecure entrepreneurs navigate the bureaucracies of banks and governments. They also play a key community-building role co-ordinating the economic development activities of more than 50 small towns in an area three times the size of Prince Edward Island.

For the full inspiring story, click here. And savour a government-funded program that works.

Wednesday, December 08, 2010

Why Groupon turned down Google, and other cool stuff

My friend Amrita Mathur has just launched a new blog on technology, media and startups. It's worth your attention because she's a good writer and frightfully smart.
Today she is blogging about why Groupon turned down Google's $6 billion acquisition offer. She even makes it sound like it was the right thing to do.
Here's what she says:

"Groupon is no fool. They know how valuable a support they can be to Google’s Adwords service – allowing vendors to deepen their existing relationships with Google. Not to mention the loyalty it might bring back to Google, the same loyalty they have lost to the Facebooks of the world. Groupon also knows they would be quite complementary to Google Places as well as Google’s new service Hotpot."

Go ahead. Read Amrita's full story here.