Where did Sony go wrong?

How could Sony go wrong marketing the world’s coolest notebook computer to Canadian entrepreneurs?

1. Because they don’t understand what entrepreneurs do for fun.
2. And because they missed a subtle but golden opportunity to appeal to entrepreneurs’ vanity – and their need to be admired.

For more, check out this post over at our sister site, Selling to Small Business.

The Top Ten Lies of Venture Capitalists

Guy Kawasaki, the evangelist of Silicon Valley, is back. In his fascinating new blog, he reveals The Top 10 lies venture capitalists tell.

Guy is always trying to break down the communication barriers that separate entrepreneurs and VCs. As always, his work makes for amusing and valuable reading. Here's a condensed version.

Lie No. 1: “I liked your company, but my partners didn't.” This is a cop out, says Kawasaki: “A true believer would get it done.’

2. “If you get a lead [investor], we will follow.” In other words, once the entrepreneur doesn't need the money, the VC would be happy to give him some more.

3. “Show us some traction, and we'll invest.” The VC is saying she doesn't believe your story – but she doesn’t want to say No because she might be wrong and doesn't want to end up looking stupid.

4. “We love to co-invest with other venture capitalists.” What entrepreneurs want to hear is, “We want the whole round. We don't want any other investors.”

5. “We're investing in your team.” What the VC is saying is, “We're investing in your team as long as things are going well, but if they go bad we will fire your ass because no one is indispensable.”

6. “I have lots of bandwidth to dedicate to your company.” Counting board meetings, assume that a VC will spend no more than five to ten hours a month on your company. Deal with it. And make board meetings short!

7. “This is a vanilla term sheet.” Do you think corporate finance attorneys are paid $400/hour to push plain-vanilla term sheets? (If you insist on charaterizing term sheets as ice cream flavors, the only flavor that works is Rocky Road.) This is why you need your own $400/hour attorney.

8. “We can open up doors for you at our client companies.” Frankly, a VC might be hated by the client company. The worst thing in the world may be a referral from him.

9. “We like early-stage investing.” Venture capitalists are remarkably risk-averse, considering it's not even our money.

There is no No. 10. “I'm at a Starbucks in Hawaii writing this blog. I've been at it for ninety minutes. I don't have my charger with me. My PowerBook is out of gas.” Deal with it.
Or read the original (with the accompanying comments) here.

Show me the microphone!

It's time I let you know that I'll be speaking at a "Future Leaders" event in Toronto on Feb. 8. It's called an "Entrepreneurs' Forum," and I'll be speaking on "Lessons from Canada's top growth companies." There'll be war stories, best practices and road-tested tactics from some of the best companies I've met over the past year.

But that's not all! Also on the program is Manjit Minhas, founder and president of the Minhas Creek Brewing Co., an astonishingly ambitious growth company from Westerm Canada.

It'll be a fabulous one-two punch - a guy who has studied entrepreneurship up close for 20 years, and a 20-something entrepreneur who is actually making things happen.
To read more about Manjit, click here. To read more about me.... keep scrolling.

The event starts at 5 pm at the National Club, right downtown at Bay and King. For more information on this event, just click here.
See you there!

Networking at the Top

Sometimes the best marketing is done face-to-face – especially with those key, affluent individuals who hold the purse strings for major companies and customers.

In a recent issue devoted to its annual list of the 100 richest Canadians, Canadian Business magazine featured a story, Schmoozing 101, on how to network with the business elite. Here are a few highlights:

· Whether you're in an airport lounge or attending a black-tie gala, always be ready to network. If you know in advance who you might meet, find out at least three things about them. A quick Google search can help you figure out where people are from, where they work and what charities they support. You should also prepare a few questions, such as, "What are your tips for being successful?"

· Prepare a brief (seven to nine seconds) personal introduction to break the ice.

· Master small talk. Ease into conversations by finding a common interest.

· If it's necessary to talk business at a social function, provide a subtle warning to gauge its appropriateness.

· Follow up with an e-mail and a handwritten note. Know when to back off if someone's not returning calls.

· Never ignore spouses or significant others. They like to be in the conversation too – and could be influential advocates in future.

For the full story, click here.

The new economy vs Paul Martin

Finally, the new, entrepreneurial, knowledge-based economy gets a mention in the six-week-old election campaign – and Paul Martin screws it up.

In Markham, Ont., this morning, the Liberals announced their intention to make “significant investments to support the innovation process from start to finish, from nurturing Canadian ideas, to bringing ideas to market, to supporting Canadian industry.”

Here’s the problem: a key pillar of the new economy is disgusted at the politicians’ bungling of the knowledge file. Howard Burton is executive director of the Perimeter Institute for Theoretical Physics, the leading-edge thinktank established by RIM founder Mike Lazaridis, and one of the key institutes the Liberals are now supporting.

As revealed by Maclean’s columnist Paul Wells in his blog today, Burton deliberately stayed away from the announcement.

Here’s what Burton wrote today in an e-mail written to Wells (and published in his blog):
“This morning, the Prime Minister of Canada delivered a speech explicitly promising strong financial support to my research institution for the next few years... Throughout the past year, I had imagined this moment many times: the culmination of many months of detailed discussion amongst policy experts and political representatives at both the provincial and federal level, it would be a proud, festive occasion attended by a wide spectrum of scientists, staff and Board Members: a strong endorsement of the success of our past efforts and a continued commitment to invest in our science and our researchers….

“Reality, sadly, was very different. There was no coherent, long-term framework presented. There was no serious, comprehensive plan at all.… The announcement had been reduced to a mere political event - today's desperate attempt to rescue a quasi-moribund Liberal political campaign during an election that was wholly devoid of any substantive dialogue on science and research policy. And I couldn't even stomach the thought of showing up.

“This is not the way that one should set meaningful policy. This is not the way that one should engage with the electorate. This is not the way that a serious country should act. …

“University officials who stood smiling on the podium with Paul Martin today, anxious for their own piece of the action, should know better. The Liberal Party of Canada should know better. We are talking about something much larger than the merits of any particular project here: we are talking about a process, about a way of developing a coherent plan of action in a highly competitive, pivotal realm that affects all Canadians. If we want to be taken seriously around the world, we'd better start acting like a serious country.”

Wow. Kudos to Burton for standing up for sanity and to process. And to Wells for uncovering the story. Read the whole sorry mess here.

Now here’s a real Canadian entrepreneur!

Yet once again we see talented Canadians selling raw, unprocessed natural resources instead of value-added products incorporating high-end manufacturing and design.

Hewers of wood, drawers of (slightly frozen) water.

I found this here.

Fast Growth Company Quiz

I accidentally found this quiz on a cached page at Google. It was written for PROFITguide in 2000 and taken offline sometime since then.

But it still has some interesting information, so take a minute and try the quiz. I've put the answers at the end of the post. There used to be an automated scoring page, but that's as dead as the Pets.com sock puppet.

Do you have the right stuff to run a fast-growth company? Test your mettle and pick up a few pointers from our Growth Business quiz. Questions and correct answers are derived from Secrets of Success from Canada's Fastest-Growing Companies, by Rick Spence, a PROFIT book published by John Wiley & Sons in 1997.

1. According to Spence, how many hours per week do fast-growth entrepreneurs work?
a. 30 b. 40 c. 50 d. 60

2. According to a 1994 Statistics Canada study, what is the key characteristic of successful growth firms?
a. Perseverance
b. Skill at innovation
c. Quality of management
d. Motivation of workforce
e. All of the above

3. Almost everyone knows Yogen-Fruz, the Toronto-based frozen-yogurt maker (now CoolBrands). How did the founding Serruya brothers, barely in their 20s, get started in the face of tough competition from bigger firms?
a. They had a superior product.
b. They knew the market better.
c. They tied up the best real estate.
d. They built their stores in indoor malls while a U.S.-based competitor built streetfront outlets.

4. Many of Canada's fastest-growing companies were started by entrepreneurs who at the time had:
a. Only the vaguest notion of what they were going to do
b. A $1-million line of bank credit
c. A Royal charter
d. A fishing line and a paperclip that could be bent into a hook.

5. According to Spence, how did most of these entrepreneurs evolve their business into huge successes?
a. By borrowing more than they could afford
b. By buying an existing company
c. By getting to know their customers and adapting to market needs
d. By taking night courses and management seminars
e. All of the above

6. Why did Iona Appliances president Allan Millman realize his Welland, Ont. company couldn't get away with manufacturing kitchen appliances that were "just good enough" any more?
a. Because the appliances told him so
b. Because Iona's existing products didn't offer sufficient innovation or value to crack world markets
c. Customers were complaining about appliance quality
d. Because Canada's labor costs were too high to permit manufacturing of consumer products
e. None of the above

7. So what did Millman do to rejuvenate his company?
a. Launched a world-wide search for innovative new products
b. Licensed a design for a more efficient vacuum cleaner
c. Muscled into the U.S. market
d. Launched a line of 30-minute infomercial and started selling to U.S. consumers directly
e. All of the above
(Sadly, Iona [renamed Fantom Technologies] bit the dust a few years ago. But it was a bold effort that defied long odds.)

8. "One plus one does not equal two," says Robert Murray, co-founder of fast-growth trucking firm MSM Transportation in Bolton, Ont. What did he mean?
a. Having two partners run a company jointly is a counter-productive nightmare
b. Having two people run a company jointly is a way of generating more value than either could create on their own
c. A successful fast-growth company should not try to acquire other businesses
d. You don't have to be able to add to be a successful entrepreneur
e. None of the above

9. Which of the following management tactics do Canada's top growth companies use to reward their hard-working staffs?
a. Pizza parties or a free lunch in the office to celebrate a new order or contract
b. Cash bonuses amounting to 20% of profits
c. Group activities such as ski trips and hiking days
d. Showers in the office
e. All of the above

10. One chapter of Spence's book offers an in-depth look at one growth company: Toronto-based software developer KL Group [later renamed Sitraka]. What turned out to be the theme of this chapter?
a. Growth companies don't have any fun
b. Successful leadership of a fast-growth firm requires single-minded dedication
c. Canadian companies can't compete
d. Successful leadership of a fast-growth firm is an ongoing lesson in serial delegation
e. A two-letter business name isn't as good as a three-letter name

Your correct answers are:
1: d,2: e, 3: d,4: a,5: c,6: b,7: e,8: b,9: e,10: d.

If you'd like, you can follow this link to purchase one of the last remaining copies of my book.
And keep watching this blog for news about a follow-up book that will bring growth management into the 21st century.

How to Cope with Catastrophe

Paul E Adams is a U.S.-based entrepreneur and former business professor who has been writing regular articles for the Canadian small-biz website, CanadaOne, almost since it started. Now he is hanging up his hat, and CanadaOne is highlighting some of his best columns.

I haven’t been a regular reader, but one of Adams’ best-of columns caught my eye. “Steps to Survival: How to Save a Sinking Business” mixes useful advice for troubled businesses with Adams’ own first-person chronicle of his 1982 descent into business failure and his long fight to turn things around. Not many authors of business advice have been through the wringer themselves, so this makes for lively reading – and excellent learning.

“All of my previous business experience and education did not prepare me for these emotions of failure,” Adams writes. “As a professor of business, I was not setting an example of successful entrepreneurship. My feelings of self-confidence and self-worth evaporated. In a year, I went from the excitement of a new business- to desperation. It was awful.”

Adams’ checklist for survival:
- Fire yourself as president – and reinvent yourself as a turnaround specialist.
- Be a Miser! Hoard every Dollar!
- Forecast your cash needs monthly.
- Start working with your creditors on new payment arrangements - before the collection calls begin.
- Collect the money that’s owed to you.
- Tap your inventory for money.
- Pump Up Your Sales Efforts.
- “Don't assume a single ad, a single article, your business card, a small sign, or a listing in the yellow pages will do it for you,” says Adams. “A sales and promotion strategy is as important as a financial strategy is to your success. It requires a credible message repeated many times.”

You can read the full story here.

Finding the right people with the write stuff

Everyone I know in business complains about how hard it is to find good salespeople.

Sure, talent is rare. But are you doing your best to make sure the sales people you hire can really do the job?

In her recent e-mail newsletter, “Something for Nothing,” Toronto sales coach Nicki Weiss offers 8 Overlooked Ways To Hire Winners. Knowing that so many sales managers despair of their staff’s written communication skills, I was particularly impressed by Nicki’s third point. It’s simple to do and oh, so powerful…

"Hand the candidate a sheet of paper, right here, right now.

"Hiring someone who seems great, then finding out that he or she doesn’t have basic writing, analytical or organizing skills, can cost a lot in extra training or in another candidate search. As part of your interview process, hand each candidate a blank sheet of paper. Ask them to hand-write why they are a sales superstar; what they would do in the first 30, 60 or 90 days on the job; and what it will take for them to be successful.

"You will see the quality of their writing, their level of skill in analyzing and problem-solving, and their ability to organize their thoughts. This information is priceless."

Not everyone has the guts to ask candidates to jump through hoops such as this one. But if you’re looking for specific skills, never take them on faith. Identify the key characteristics you’re looking for in your people, and build them into your interview/assessment process.

Otherwise, you’ll have no one to blame but yourself.

For more on coach and consultant Nicki Weiss, see http://www.saleswise.ca/

Who’s your Goal Buddy?

Motivating ourselves by ourselves can be tough. Having someone to be accountable to may be your key to goal-setting success.

Susan Ward, proprietor of About.com’s Small Business: Canada site, offers a solution: Get a goal buddy: someone to share your objectives with who will also hold your feeet to the fire.

Ward offers three reasons why goal buddies work:
* They provide motivation;
* They force accountability;
* They increase our determination.

“If you don’t have a goal buddy,” writes Ward, “it’s too easy to shelve the goal, saying, ‘I’ll work on this later.’ Having a goal buddy that we talk to regularly encourages us to make regular and steady progress.”

How do you find a Goal Buddy? Ward suggests searching your own social circle first for friends or contacts whose goals and interests are similar to yours. Online special-interest groups such as business forums may also yield helpful partners. They don’t even need to be in the same city!

To get the most from your Goal-Buddy relationship, determine how you will work together.

“Decide on how and when you’re going to regularly communicate,” says Ward. “Will you call or email each other every day? Meet for coffee somewhere once a week? By setting appointments to communicate on a regular basis, you force yourselves to work consistently towards your goals and increase your chances of achieving them.”

Rule 1, of course: Set specific goals and share them.

For more on goal buddies, click here.

Jump-start your year!

My friend Kelley Robertson, the sales trainer and author in Oakville, Ont,. hits the nail on the head today in an e-newsletter challenging us to jump-start our results this year.

He offers a three-step formula for success:

Step 1: "Review your accomplishments," says Kelley. "I believe it is crucial to pat yourself on the back for a job well done and to take some time to reflect on what you accomplished in the preceding 12 months. Far too often we focus on what we didn’t achieve instead of the victories we won."

Step 2: "Set goals for the upcoming year. Rather than leaving your results to chance, establish clear and challenging goals for yourself. Make sure they are specific, motivational, action-oriented, relevant to your situation, and time-bound."

(That's the SMART forumla, for those who don't recognize it.)

Step 3: "Discuss your goals with other people. Recent conversations with friends and business associates reminded me how effective this strategy is to re-energize our commitment. And remember to have these conversations throughout the year as a regular 'boost'."

Chasing success doesn't have to be hard - if we can be SMART about it.

Click here for more on Kelley and his work.

A New Year's Message on Clear Communication

As you may know, I am a huge believer in clear, simple communication in business (as in life).
Your communications must state clearly what you want or intend, and the benefits that the reader/listener may thereby derive.

I think we have much to learn from the following sign:



Happy New Year!

"Business today is drowning"

“Business today is drowning in bulls--t.”

That’s the message (and opening sentence) of “Why Business People Speak Like Idiots: A Bullfighter’s Guide,” a short, breezy diatribe published this year by Brian Fugere, Chelsea Hardaway and Jon Warshawsky.

The authors, U.S.-based marketers and consultants, take aim at the jargon, clichés and thoughtless repetition that sums up most business communication today. Memos that say things like “the committee will report back with a work plan for implementing the mission-critical changes necessary to transform our company into a more agile, customer-focused enterprise” are not just contrived and dull, but inimical to the way human beings like to communicate.

“Outside of work,” say the authors, people enjoy “a fundamentally different kind of conversation – a human one, with stories and color. Informal, spontaneous, warm, funny and real.”

As a writer and marketing consultant, I agree. Too many business people hide behind bland, unimaginative, they-can’t-fire-me-for-this phraseology. It’s an excuse for not thinking, for not taking the time to see beyond the next necessary step in order to find more unique, imaginative solutions, ideas and challenges. Our dependence on jargon, I think, betrays a lack of confidence in ourselves, a lack of commitment to our projects, and a failure of imagination, which I think is essential in business.

The authors believe there’s a grim consequence to writing and saying that bore people: no one really listens anymore. Most business communication is intended to persuade people (customers, bosses, co-workers) to do something. But if nobody’s listening, nothing happens.

The authors’ goal is to restore your persuasiveness by helping you write and speak so that people will listen again. “Entire careers can be built on straight talk – precisely because it is so rare.”

What should you watch out for in your writing? Jargon, wordiness, evasiveness.

How can you gain more attention need influence? Be concise, the authors advise (in fact, their book is only 165 digest-sized pages). Use fewer words, and shorter words.

Brand your work by eschewing templated slides, phoning instead of e-mailing, writing more exciting titles or subject lines, using humour (carefully), or telling stories instead of explaining policies.

And show, don’t tell.

Sorry - the parking lot is full because all our staff came to work today

With Christmas over, it's time to start thinking about the New Year -- and your NewYear's resolutions.

Specifically, resolve not to make any of the mistakes made by the clowns mentioned in this article on the 9 worst business practices of 2005.

As Woody Allen once said, "Eighty percent of success is showing up."

Santa versus the Hurricanes

This comes from a blogger in Beaumont, Texas.

The Night Before Christmas
2005

Tis the night before Christmas
and all through the town
Debris of all kind is stacked in a mound.
Houses are beat up, trees are not there
The landscape is different and curiously bare.
Fences are gone and the dogs have got out
Insurance agents are nowhere about.
Mold in its grandeur is lining the walls
Inside the cabinets and all through the halls.

Moms are exhausted and daddies are spent
They're paying their house notes and now paying rent
FEMA is long gone, the Red Cross has split
Searching for new towns disasters have hit.

The children are restless as they lay in their beds
Troubled thoughts filling their heads
Can Santa find them amid all the rubble
Or will he think it's just not worth the trouble?

Then out of the night comes the sound of small hoofs
Prancing and pawing atop the blue roofs
Though Santa's landmarks were not where they'd been
The shine of the trailers guided him in
He managed somehow to deliver the toys
To all the deserving good girls and boys

And they heard him exclaim as he drove out of sight
"It takes more than Rita to mess up this night!"

Merry Christmas to all.

Fitness Tips for You and Your Business

I have quoted Jim Estill before, the entrepreneurial CEO of Synnex Canada, but he just keeps turning out good stuff at his blog on Time Leadership.

A runner and fitness buff, Jim mused recently on the parallels between exercise and business. Here’s a condensed version of his thoughts.

* Even if you think you are in shape, you will do some activity that makes you sore. The same is true in business. Regardless of how skilled you are, there will be new situations that will challenge you.

* Muscles adapt to the exercise routine so it becomes easier, but you do not get as good a workout. The same is true in business. By always taking the same challenges, you will get good at them, but you can also become stale. So mix it up a bit to grow.

* Overcoming challenge, procrastination and external events happens in both exercise and business. Devise systems to get re-energized and deal with the inevitable challenges.

* Small wins build confidence and lead to bigger wins. So just get started.

Great advice from a man who started a business from the trunk of his car and now runs a $1-billion company. Read Jim’s entire post here.

With sprinkles on top

If you didn't get my e-Christmas card this week, here's a copy. And please accept my best wishes for a visionary, self-improving and client-focussed holiday season.


For more holiday greetings (from some over-achieving Hungarians, I believe), click here. And turn up the sound.
(Thanks to my Uncle Jack in Minneapolis for this fun link.)

So the Liberals knew all the time they should do this...

On Monday (Dec. 19), election candidate Paul Martin announced that the Liberals would increase the lifetime capital gains tax exemption for small businesses (and farmers) by 50%.

Last summer, I talked to an official at the Industry Dept's small business braintrust about this long-overdue move. (It's a good partial remedy to the looming sucession crisis that I've written about.) I was assured this move was not being considered. Not a priority. Not on the radar.

Suddenly, Paul Martin thinks it's a good idea. Hard to believe that he's been Prime Minister for two years, or that his party has been in power for more than 12 years.

Maybe if the Liberals didn't wait for elections to do the right thing, they wouldn't be facing an election now.

(From the Liberals' official press release, the fine print: “There’s nothing small about the role small business plays in the creation of jobs and growth in Canada’s economy,” the Prime Minister said. “Raising the lifetime capital gains exemption to $750,000 from $500,000 will allow small-business people and farmers to keep more of the profit from the sale and transfer of their businesses to a new generation.”)

(And then there's the appeal to your heartstrings: "A Liberal government will continue to create an economic environment that helps small businesses continue to thrive – not just as the engine of economic growth, but as the place where Canadians’ dreams come true.")

Reduce taxes, Paul. Lower interest rates. Dump the GST. Then maybe we'll believe you.

Andrew Coyne has a sense of humor

Excerpt from Andrew's blog, Dec. 14:

"... But what's common to all the polls are the huge numbers saying they want a change in government. The Strategic Counsel found 58% answering the "time for a change" question in the affirmative, a number which must make the Grits' blood run cold.

"If ever the voters start to make the connection between changing the government and voting for the opposition, they'll be in real trouble."

Read more here.

(Not being very political, other than thinking that most politicians should be sent to witless relocation programs, I will not often be blogging about the X-mas L-ection. But this was too good not to share.)

Special Announcement with a tinge of irony

Early in my career as editor of PROFIT Magazine, I set aside some budget money for a Freelance Writer of the Year award. It was a way of honoring the contributions of the freelance writers who produce most of the content for most Canadian magazines, and recognizing outstanding work.

Well, the editors at PROFIT surprised me today by letting me know I had won the award this year, and that a little cheque would be coming my way.

(Now, of course, I wish we'd sprung for a trophy, too.)

They say I won for two entries: a story on the looming succession crisis, and the Spin Master Toys profile in the current issue, which I blogged about just recently.

Looking for some award-winning reading? You can read the Succession story here, or click here for Spin Master.

Focus, people, focus!

Focus, people, focus!

Already this week I’ve had two conversations with entrepreneurs about marketing/public relations, and I had to spend way too long figuring out who their market is. They are wonderfully bright and intelligent business people, but they were sadly inarticulate when it came to defining their marketplace and the needs of their prospects.

And they’re not alone.

In my experience, the evolution of a business goes like this: it starts with a specific product or service and a small group of clients, many of them previously known to the business owner and motivated to work with him or her.

Over time, the product develops and evolves, and new customers climb aboard – friends and acquaintances of the owners and their staff, local purchasers, and others who intuitively understand the product or service. This process can take years, and the company can be reasonably successful.

But there comes a time when companies need more. And they suddenly discover that they don’t know who their customer is. They don’t have a marketing strategy, or even a plan, and they don’t really understand their value proposition beyond the sale pitch they may personally make every day. In other words, there’s been no separation of the owner from the business – and no articulation of the company’s value-add, its benefit statements or its marketing vision.

Yes, marketing or communication consultants can help. But before you seek them out, make the most of your time together by thinking through questions such as these:

* Who is/are my target market(s)?
* Is this really the best and most valuable market I could be appealing to?
* What is my plan for reaching my target market(s)?
* What is the value of a new customer? How much can I afford to (or do I want to) spend on marketing?
* What do clients and prospects want from me? What problems does my company solve?
* What do existing clients say about my company, product or service? Do I have testimonials in their words that help me understand what my product/solution means to them?
* If not, can I ask them for testimonials, and learn from those?
* Have I surveyed my customers to find out what they like about us, what they don’t like, and how we can serve them better?
* What media do my prospects read/watch/consume? How do they like to be contacted?

Knowing all this in advance will not only save you time (and money) in developing your marketing messages and plans. It will also give you a big advantage over most of your competitors.

The Growing Clout of Small Business

There are encouraging signs that entrepreneurship is on the march again.

In good times, everyone gets excited about working on Bay Street or going to work for big companies. But when shocks appear – and this summer’s oil price spike was an 8.8 on the Richter scale of business confidence – people get nervous about the prospects for big, dumb corporations, and they look again to the opportunity and security afforded by small business.

A few weeks ago, RBC Financial produced a survey that found more than a million Canadians are thinking of starting up a new business.

At the same time, a Scotiabank survey found 90% of Canadian entrepreneurs believe their business will perform as well or better one year from now than it does today. "It's encouraging to the business community on the whole that small business owners are generally enthusiastic about the potential for increased earnings," noted Diane Giard, Scotia’s VP of small business banking.

A CIBC World Markets study estimates 80,000 Canadians will become small business owners this year, swelling the national total to 2.5 million. Even better, says CIBC, "nearly one in four Canadians say they will be self-employed at some point in the next five years."

And today, I got an e-newsletter from VISA promoting discounts for small business (itself an indicator of the market’s clout) – and several articles geared to entrepreneurs (altho’ they’re a bit dull). In one story, writer Chuck Davies quotes CFIB economist Ted Mallett musing about the positive forces behind today's startups.

"We know that two thirds to three quarters of people who enter self-employment do so for positive reasons, they go in with their eyes wide open. It's part of their plan,” says Mallett. “The rest do it because they're forced into it, either because they haven't been able to find paid employment opportunities or because they've been laid off or downsized."

Mallett also notes suppliers’ growing interest in the small-business market. "Banks and financial institutions have realized that small business owners are a very profitable segment for them. A startup may not have much to go on, but the fact that the person starting it up is 45 years old, has finished a mid-level career, has a nice amount of equity in their home, is driven and has a good credit record – this person is going to be very profitable for a bank if treated right."

Mallett sees other suppliers joining the trend. In particular, providers of information technology are starting to realize “they've got to target a class of business that's considerably smaller than the ones they've been used to dealing with," he says. "That means their solutions and their pricing models have to be different."

In fact, yesterday the Globe ran an article saying more telecom firms are viewing small business as a market segment worthy of its own products and dedicated strategies. This isn’t new (anyone remember BellZinc.com?) – but it seems a broader initiative than we’ve seen before.

So the next time you buy from a supplier, make sure they speak your language. Demand service levels and pricing structures that make sense for you, not just for IBM.

If entrepreneurs are to be truly recognized as the backbone of this country, we should show more backbone.

Tis the Season for a Management Epic

“It's the first week of November, and Christmas is coming fast. Santa's elves are working overtime, and why not? His toys have guaranteed distribution.
“Things aren't so simple at Toronto-based Spin Master Ltd. "

That’s the opening to my feature story on Spin Master, Canada's largest toy company, in the latest issue of PROFIT Magazine. It’s a pretty long piece, but it’s one of my all-time favorites, and I think it’s worth your time.

For the first time, the reclusive management team at one of Canada’s most innovative and globally successful firms opens up about how they work, their greatest challenges and where they’re heading next. They offered me full access to their daily schedules for five days, enabling a rare inside glimpse into the workings of one of Canada’s most-honored growth companies.

Adding a human element to the piece: the three owner/founders are all still in their early 30s, and they’ve been friends since university. This is a very human story about a huge business success and the founders’ remarkable ability to trust, squabble and move on.

Here’s an excerpt, for those who are too busy to click through right now and think they’ll remember tomorrow:

Despite Spin Master's many successes, [co-CEO] Anton Rabie sees its evolution as a daily battle to exist. "Every day I wake up, I am being attacked," he says, eyes flashing with characteristic intensity. "I've come to realize that this is my life."

We're in his tidy, spacious office in late October, trying to conduct an interview while the phone rings and colleagues rush in looking for urgent decisions. "The LC is four weeks late!" complains one. Whenever there's a lull, Rabie rolls his highback chair to his computer table to check his inbox. "Wow," he says. "I just got an ugly e-mail."

At its size [more than $300-million], you'd think Spin Master had earned the right to give other people ulcers. But here are just a few of the challenges Rabie is dealing with this day:

* The rising cost of plastic foam following the hurricanes in the Gulf of Mexico has forced Rabie to request an emergency price increase for its kids' beds. But one buyer has just turned Rabie down flat. In a terse e-mail, the buyer adds archly, "Let us know if you don't want to ship. We have alternative product lined up."

* Meanwhile, Spin Master has been trying for weeks to license an exciting new toy technology. The deal is all but done, but the inventor just found another problem with Spin Master's proposed terms. (This haggling will continue for weeks, threatening the company's spring schedule for rolling out the new product.)

* A movie producer is about to award product licences for its next animated feature. Spin Master has a new product that would fit this property perfectly—but isn't ready to announce it. Rabie gets on the phone, lobbying hard for the producer to await Spin Master's bid.

* Meanwhile, the acquisition of a niche toy company in the U.S. seems stalled, and Rabie has to get things moving again. "Let's schedule a meeting, anywhere in the world you want to meet," he tells the prospect over the phone. His goal is to get his CFO, Mark Segal, and his outside legal counsel in the same room as the U.S. toymaker until a deal is done. "How about you send the markup by Tuesday, we meet in New York Thursday at 4 p.m., and we either leave happy or sad?" In the end, the meeting is cancelled.

"Either it's a retailer cancelling an order, competitors coming into our category or an acquisition where the terms are falling apart," says Rabie grimly. "Our business is under attack every single day." Then, flashing a grim smile, he adds, "It's great entertainment."

Read the rest of the story here.
(Hint: to read it all without having to click to a new page every few paragraphs, scroll to the bottom of the page and click on "Print Story." You can also copy and paste the story from that pop-up window if you want to save it for later.)

And let me know what you think. Leave a comment below.

When entrepreneurs make money

Most of my career has been about helping entrepreneurs make more money. What they did with it was their business.

Until now.

This week I agreed to start writing a personal finance column for MoneySense Magazine (a sister publication to PROFIT). My first column is due in January, so it won't be out for months, but I hope you will follow along.

MoneySense editor Ian McGugan and I agree that entrepreneurs have a lot of issues around diversifying their investment portfolios, business succession, tax planning, saving for retirement, and so on, so I am looking forward to jumping into all of these areas.

If you're an entrepreneur with suggestions for topics to cover, please let me know. You can leave a comment here or email me at rick@rickspence.ca

In case you're keeping track, this is now three regular column gigs: I write "Frontlines" for PROFIT, and "From the Outside In" for Alberta Venture. I try to write regularly for Corporate Knights as well, when other business doesn't get in the way.

Canadian Entrepreneurs Unite! (you too, Sir Walter Scott)

More and more Canadian entrepreneurs seem to be finding Canadian Entrepreneur. How do they get here? In about half the cases they seem to be following blog directories or other links that bring them here. The other half come from search engines: mainly Google, Yahoo, and MSN.

What search terms bring them here? Glad you asked. Here’s a list of the search terms used in the past week by visitors to Canadian Entrepreneur. Some make sense, others will make you scratch your head. But they got here all the same.

Search terms that led to Cdn Ent in the past week. (Some duplicates have been removed.)

voip customer success stories
chris staples, rethink, quote
bravo bmo
rick Spence blog
SALES NEGOTIATING TIPS
Dr. Seuss specialist
canadian business fortunes 2005
hardware store coming to cornwall ont
canadian entrepreneur
ethical businesses
quotes by chris staples, rethink
Jack Welch sucks (I swear, Jack, I never said this, exactly!)
canadian the young and the restless
diff'rent strokes. media domain.
kiessling Toronto
canada's greatest entrepreneur
one entrepreneur history
shasha bread company inc
JIM ESTILL DELL
history of Sir Walter Scott as entrepreneur (huh?)
examples of poorly written e-mails
Canadian entrepreneur

There you go: that’s what people are looking for on the Internet this week.

The future of Google :^)

Google has emerged as one of the most ambitious and innovative forces in business today.
So I thought you’d appreciate a look at what it might be up to in a few more years…

It’s a joke, okay? Thanks to my daughter, who found this at http://www.jumbojoke.com/000521.html

Stamps are back!

I’ve given up reading most of the marketing-related e-newsletters I receive, but there was an interesting item from Dan Kennedy (the “No B.S.” marketing consultant and author) this morning.

Noting that California’s new anti-spam laws make it illegal to send a marketing e-mail to anyone in that state who has not consented to receiving it, he wonders if that doesn’t just about kill e-mail marketing.

So he says "the Next Big Thing" in marketing is – old-fashioned direct mail! He calls it “the only targeted medium that hasn't been almost regulated out of existence.”

Sure, e-mail marketing is cheap, says Kennedy. But, he writes, “you just cannot beat a letter in an envelope, and if your business can't bear that cost, it's a lousy business. Fix it or get out.”

Kennedy’s rules of direct mail:

“QUALITY OF LIST has as much to do with success as MESSAGE.

“GETTING IT DELIVEREDAND OPENED is essential, or the MESSAGE doesn't matter. Once opened, COPY IS KING, so if you're going to be a really serious student of anything, pick direct-response copy.

"Nothing out-pulls a NURTURED 'HOUSE LIST' OF YOUR OWN CUSTOMERS, so you usually profit by mailing to them more frequently. A good resolution for this year might be to double your frequency.”

See you at the post office.

And if you like reading lots of capital letters, see more Dan Kennedy stuff at (where else?) http://www.dankennedy.com/.

Deck the halls with profit-sharing

Want to increase your company’s profits? Give some of 'em away.

That’s the experience of Vancouver entrepreneur Brian Scudamore, founder of 1-800-GOT-JUNK?, North America's largest junk-removal service with more than 150 franchise locations.

As related in his column in the latest issue of PROFIT Magazine, Scudamore decided two years ago to create a company-wide profit-sharing program. He committed 25% of his company’s profits to the pool – and it’s worked beyond his wildest expectations.

“Like most business owners,” he writes , “I thought that profit-sharing would increase the company's overall profits, but not enough to cover the profit-sharing payout; thus, 1-800-GOT-JUNK? would recoup less of its net earnings. Was I ever wrong! In fiscal 2004, the program's first year, our bottom line after profit-sharing payouts increased by almost 800%. This year, our annual profit is trending 50% higher than it was in 2004. To me, that's a clear sign the program is working.”

An example of the benefits: “People started watching everything from the macro, including company-wide revenue and profit, to the micro, such as the entertainment or telephone expenses of individual departments.
“One employee took the initiative to replace our expensive bottled-water service with a filtered-water system, cutting our drinking-water costs by a third and inspiring the rest of the team to find wins of their own.”

Read the whole column HERE.

'Tis the season.

Technopreneurs on the Town

I’ve gotta blog about my meeting with two people at a downtown café last week. As we were talking about putting on an initiative together, the other two (only one of whom I had known before) both told me it’s too bad a fourth guy wasn’t there. Mark’s an actor as well as a business consultant, and they were dying for me to see this commercial he’s done.

So Ron, on my right, says to Richard on my left, “Did you bring your laptop?” Richard says yes. Ron releases a chain around his neck that holds a USB storage device no bigger than your fingernail. He pops it into Richard’s USB drive and Richard copies the file onto his laptop. Then he goes to play it.

Oops. The commercial is formatted in Quicktime, and Richard doesn’t have it.

No problem. This café is wired for wireless Internet (if that makes sense to you), so Richard downloads it while we talk. Within three minutes, we are watching Mark’s commercial.

It didn’t really advance our conversation much, but I was struck by how cool this whole process was.

My first PC had a 20-mb hard drive and weighed 80 pounds (including monitor). Now we carry gigabytes of storage around our neck, haul many megahertz of processing power around in a briefcase, and download the programs we need out of the ether. As we've said around here before, it’s an amazing time to be in business.

Buying a business? Learn from the pros

Community newspapers can be very profitable businesses. Did you ever want to buy one, but didn’t want to pay a fair price?

Here’s how the pros do it. It's a long read, but very enlightening. (As you go through this, you'll realize why you don't read about this stuff in the newspapers.)

This is an edited version of a transcript of the Proceedings of the Standing Senate Committee on Transport and Communications. In its mission to probe the state of Canadian media, it held a session in Dieppe, N.B. on April 21, 2005.

Senator Joan Fraser (Chairman) led the investigation. The first witness was David Henley, who had owned four community newspapers in New Brunswick. That is the province where the Irving family owns most of the daily newspapers, the weeklies, the TV stations, and the biggest industrial employers (forestry, agriculture, oil, etc.).

Here is the abridged transcript.

Mr. Henley: I am from Woodstock, N.B., and I am the former owner, with my wife, of Henley Publishing Ltd., which owned four community papers in Western New Brunswick until November 2002, when we sold those properties to the Irving-owned Brunswick News....

When it was announced that a committee was being formed to study Canadian media and, specifically, the concentration of ownership, I told my wife I would like to appear before this committee. She said, "What is the point? The barn door is already open and the horses are gone.'' My daughter then added, "Yes, and they have taken all the hay.''
…
Senator Munson: Why did you sell?

Mr. Henley: Well, I am 68 years old... It was becoming time to sell. Some pressures were brought to bear as we got closer to making that decision that had a great effect on what we eventually did.

Senator Munson: Are those confidential pressures, or is it the same story of a big company marching forward and gobbling up little newspapers?
...
Mr. Henley: Essentially, a former employee started a shopper in competition with us in Woodstock. They could not make a go of it, so they transferred it over to another person, who also could not make a go of it. In any case, the ownership eventually came into Irving hands and things then changed, because we noticed a definite increase in the competition in a number of ways.

The Chairman: What do you mean by, "a number of ways''?

Mr. Henley: For instance, before the sale, the shopper offered free classified advertising and put out a price list [for other types of ads]. There is nothing wrong with this, I suppose, but they sold ads that were far under the price list.

…. Obviously, by offering free classifieds, that cut into the classified advertising revenue of our publication. Newspapers are usually sold based on their revenue, and so when the time came to sell, obviously, the price would have reflected the decreased revenue.

(Rick: Nice work. Now here's the kicker...)

Henley: By the way, there is certainly a price now to put your classified ad in the shopper. Since The Bugle is now the only publication in the area, the classified rates are now double what they were when we owned the paper.

Rick talking: I had to omit a lot of interesting details - how Irving consolidated those papers, their alleged "predatory" pricing, why it would be hard for anyone else to enter these markets, and why Henley rejected the idea of going to the Competition Bureau.

When you have some free time, read the whole story here.

Mission Statement Impossible

I hope to blog more thoroughly about the Workplace Education and Learning conference I participated in yesterday, but I have to share this thought with you. It gets my vote as Quote of the Day.

The speaker was Prem Benimadhu, VP of Organizational Performance for The Conference Board of Canada (which put on the conference). While talking about what makes companies great, he criticized companies that put more effort into coming up with their vision and mission statements than in actually living up to them. (We all know companies like that.)

Says Benimadhu: “Vision without execution is hallucination.”

Put that in your back pocket for the next time your marketing people activate the spin cycle without dealing with the fundamentals.

Vision without execution is hallucination.

Survivor: Tofino

Belated congratulations to CBC-TV’s Venture for winning a Gemini award this month. One of the Corp’s longest-running shows, Venture consistently proves just how fascinating business can be when you focus on the personal challenges of doing business.

The Gemini for Best Reality Program went to a Venture episode from last February, “The Town Doctor.” It showed what happened when Venture brought in a big-time U.S. marketing consultant to help three stressed-out small businesses in Tofino, BC (fabulous town on the west coast of Vancouver Island. Email me for my whale-watching pics off Tofino one blissful summer evening.)

Can Doug Hall deliver big-city marketing miracles for the town grocer, a cleaning lady and a whale captain? You have to watch the show to find out. I will look into whether they plan to broadcast the episode again.

A show like this exists at the very epicenter of journalism and blatant stunting. But it’s all the more valuable for that. Business is all about outside-the-box solutions – and the simple belief that we can shape our own destinies by thinking in new ways.

Kudos to Venture – a tiny little part of the CBC that actually “gets it” – for daring Canadian entrepreneurs to think bigger.

(A few years ago, we tried something similar at PROFIT Magazine. We had a contest where the prize was a chance to work with sales consultant Tom Stoyan [AKA “Canada’s Sales Coach”]. It would have been a great story if we had been able to match Tom with a company whose sales force could benefit from his mentoring. But the guy who won was a self-employed sales consultant. We never got the happy ending we had hoped for.)

Your Weekend Smile

Last post of the week. So let's make it pointless, but fun.

I was talking to a client the other day, and they were boasting that when their people go to a customer site on a service call, their sole concern is just that: service. Unlike many of their competitors, "our guys have no incentives to sell the customer anything he doesn't need."

And then my client sighed and added, with a sad grin, "We can barely get them to sell the stuff the customer does need."

Can you help?

Canadian Entrepreneur is garnering more reader comments lately, which I appreciate. They add life and depth to a blog!

But here’s a comment you may have missed, since it was recently attached to a post from six weeks ago (Oct. 11).

Cheerily titled “Let's All Work with Google!” the post linked to a blog entry from Chris Sacca, who is one of Google’s principals for New Business Development. I thought his discussion on how to partner with Google amount to a manifesto on how to do business today. (Click here for my original post.)

Well, somebody (his name's Kevin) googled Sacca and was led here. He read the post, and – well, I’ll let him tell it. Can you help this guy? His e-mail address is at the end of his note.

“I just read about Mr. Sacca in a Business 2.0 (print edition) article, Googled him and ended up here. The hints are good ones and compare well with the ones I found at garage.com.

I have a new media idea that I have been researching and test-pitching to friends and family. The idea involves the reuse of digital content (songs, movies, still images) and addresses the copyright issues that arise from the creation of combined and/or re-edited presentations (of existing, legally licensed, copyrighted content.

I would like to approach Mr. Sacca of Google or firms like Garage Ventures (Guy Kawasaki) with this idea, but need to make a solid first impression. I do not wish to dilute the idea's reputation or risk it being stolen by spamming VCs with poorly written or incomplete proposals.

I am not sure whether I should be pitching the intellectual property (and IP licensing) opportunities, or the finished products. Perhaps both are appropriate, depending on the target audience.

I have ZERO experience pitching VCs. I come from an engineering background and already have a couple of patents that have earned me nothing.

Mr. Spence's post states that "Sacca’s job is to find new ideas and new people to partner with – even though 90% of the people he meets will never be appropriate partners." I want to be in the 10% that succeed.

Success in this journey requires a sherpa, a guide, someone who has successfully (or near-successfully) pitched ideas to VCs. If you are reading this and are (or know) someone who is up to the challenge, I promise not to waste your time.
I will, however, require an NDA.

E-mail: kpkpkp AT gmail DOT com

--posted by Kevin Pierce to Canadian Entrepreneur at 11/23/2005 10:27:22 AM

C'mon, folks. Let's prove Canadians still care. (name that tune!)

The Microsoft Way... out

Fascinating post by Toronto venture capitalist and blogger Rick Segal on his survey of fellow Microsoft alumni now building other businesses.

The always curious Segal interviewed 25 ex-colleagues, and asked if they believe their Microsoft experience gives them an edge in face-to-face meetings, either with people still at Microsoft, or in new interactions.

60% said no. “I was shocked," writes Segal. Probing the point, he got this response from a seven-year Microsoft vet who seems now well on the path to recovery: “I never knew just how arrogant, snotty, and rude it is to flip open a laptop and read mail while in a meeting. I feel like I need to find the hundreds of people I dealt with over the years and apologize. It might be this swaggering, hot shot crap works with internal meetings, but man, is it rude.”

Segal asked if they would go back to MS if they got a call from Bill Gates or another senior guy. 80% said no, with the rest saying maybe. No one said yes.

Then Segal asked if they were using MS-based technology in their new or current role, or “open source”? Three quarters of the respondents said “Open Source,” or some non-Microsoft variation.

Think of these people next time your broker suggests investing in Microsoft.

For the full article (and more questions and lots of comment) click here.

Your Next Big Thing

The December issue of PROFIT Magazine features the 10th annual Opportunity feature, Your Next Big Thing: The Best Businesses to go Into Now.

(Sometime next week I will look up that first issue and let you know what some of the predictions were way back in 1996. I hope they’re not too embarrassing).

As a free preview of that special issue, PROFITguide.com offers a story on what four prominent Canadians see as the best business bets of the next few years. Here’s a quick summary:

Andy Macaulay, founding partner, ZiG, Toronto:
"There's a market for a concierge service for boomers, to take care of all those little tasks around the home: trimming the tree, getting the fridge fixed, taking care of car maintenance, walking the dog and shopping for groceries.”
Elyse Allan, president & CEO, GE Canada, Mississauga, Ont.
"There is a need for cleaner, more efficient sources of energy and for more abundant clean water.”
Jean-Marc Léger, president, Léger Marketing, Montreal: "Older people are having a difficult time adapting [to new technology]. So manufacturers that can simplify technology products that are in wide use, such as e-mail, cellphones, the Internet and iPods, will have an advantage.”
David Foot, professor of economics, University of Toronto: "The boomers need financial-planning and wealth-management services. They also have the money to buy second homes, so security-system suppliers will do well.”

To read the whole story, click here.

Hard Times in the magazine business

I was just breezing through the pages of the latest issue of Fast Company and wondering if I should renew my subscription when I noticed just how far that magazine has fallen.

They are offering a combined one-year subscription to both Fast Company and Inc. magazine (yes, 12 isues of each!) for $15. That's 24 isues for the price of three on the newsstand.

Or you can get a two-year sub to FC for $15.

I'd pick the combo (except that that offer is good only in USA). I don't think FC will last two more years.

How NOT to market to small business

Strange “special feature” in yesterday’s National Post.

Roynat Capital took out an ad that wrapped around the business section to salute the winners of the Ernst & Young Entrepreneur of the Year awards program.

Instead of telling us anything intelligent about the winners, this 1.5-page supplement showed us black-tie pictures of some of the winners and their spouses – along with a lot of sponsors (the publisher of the National Post got in there somehow).

The pictures were taken at the unveiling event, held in Ottawa, um, Nov. 3. The text identified the various winners, but actually spent more time talking up the sponsors (look! there’s the publisher of the Post again!).

So here are my questions:
Why is Roynat paying to promote the National Post and Ernst & Young?
Why were the entrepreneurs short-changed in an ad that was supposedly a tribute to them?
Why did it take so long (nearly three weeks!) to recognize these winners?
Why is there nothing in this ad addressing the needs of Roynat’s customers?
And why is this newsprint wraparound called “Special Feature to National Post / Presented by Roynat Capital” instead of just being called an ad?

I have nothing against Roynat. In fact, I appreciate that it is one of the most aggressive supporters of small business in the Canadian marketplace. I just don’t understand why it pisses so much advertising money down the drain.

This “feature” ended with a full-page Roynat ad much like those it has been running every week in the Post. These ads showcase boring, nearly unreadable profiles of supposedly interesting Canadian companies. I actually complained about these ads recently to a Roynat exec, because I think they are the exact antithesis of anything that will help, inform or impress an entrepreneur.

To get entrepreneurs to read this profile, it should be short and punchy, with lots of color and personality, and end with the entrepreneur’s best experience and advice (entrepreneurs don’t care about your company, they want to know what you know that can help them).

Instead, Roynat runs a 900-word profile, with lots of unnecessary history and product detail. No subheads, no boldface, no sidebars to break up the tedious columns of copy. And no advice, no lessons. Which means this is all about him (the profiled entrepreneur), and not about you (the person reading the ad). Which makes for bad advertising, no matter how much they spend.

The executive agreed with me. But he wasn’t in marketing, so he wasn’t about to rock the boat.

New threat to industry productivity!!!

I’ve been meaning for some time to blog about the study that came out last month reporting that this year, U.S. workers will waste the equivalent of 551,000 years reading blogs.

A study by U.S.-based Advertising Age found that 35 million workers -- one in four people in the labor force -- visit blogs. On average they spend 3.5 hours, or 9%, of the work week, engaged with them. Time spent in the office on non-work blogs this year will take up the equivalent of 2.3 million jobs.

Ad Age even quoted the sales director at Gawker Media, blog home of Gawker (media), Wonkette (politics) and Fleshbot (porn), saying that its audience “is very at-work; it’s an at-work, leisure audience -- a.k.a., people screwing off on the job.“

And a research manager at Nielsen/NetRatings said at-work blog time probably comes in addition to regular at-work surfing -- meaning more total time spent on the Web, and less time on the job.

I’m not sure how one determines what non-work blogging is; many executives make reading the morning newspaper a regular part of their work schedule (and I firmly believe that includes Sports). And I believe that reading even peripherally work-related blogs can offer information, insight, ideas and motivation that might not be available anywhere else - certainly not in today's rushed, erratic workplaces.

Let’s face it: many offices have become soulless, cheerless places where people with very little in common – and in many cases, no continuing business relationship - work side by side. Blogging reconnects with your most interesting, idea-filled industry colleagues or other like-minded people – and it may provide the peer support and social engagement that today’s workplaces lack.

And in case you're wondering, most of this blog’s traffic comes during the daylight hours too.

Says Blogads founder Henry Copeland. “Bottom line: At work, people can’t watch TV or prop up their feet and read a newspaper, but they sure do read blogs.”

OK, back to work. You and me both.

Two milestones for this blog!

Today this blog will receive its 2,000th visitor. That's not a lot for some websites, but I believe it's quite a feat for a blog whose title consists of two long, four-syllable words, neither of which (let's admit it) set most people's hearts a-flutter.

It's also a factor of the steady growth of this blog. It took us seven months to gain our first 1,000 visits, and less than three months to gain our next thousand. Almost a hockey-stick growth rate!

Thank you for visiting.

Anouncement No. 2: Yesterday Google introduced Google Base, its attempt to create a free global bulletin board to compete with eBay and other private databases. As a test, I posted a promo ad for this blog on Google Base yesterday afternoon. At 12:01 am, I had my first visitor click through from that ad.

If this keeps up, I may use Google Base to auction off Pez dispensers.

More Bad Bosses

Trying to get more productivity out of your employees? According to a new study by HR consultants Towers Perrin, there is a vast reserve of untapped “employee performance potential” at most companies. If you can engage these employees, you will have a new resource of effort, ideas and productivity.

The global survey of more than 85,000 employees found just 14% are fully engaged on the job and willing to go the extra mile for their companies. In the U.S., that figure is just 21%.

“The vast majority of the people we surveyed are moderately engaged at best, and a quarter of them are actively disengaged,” said a TP analyst.

How important is engagement?
* 84% of highly engaged employees believe they can positively impact the quality of their company’s products, compared with 31% of the disengaged.
* 72% of the highly engaged believe they can positively affect customer service, versus 27% of the disengaged.

Engaged employees are also less likely to leave for another job. Worldwide, 59% of the highly engaged survey respondents planned to stay with their current employer, compared with just 24% of the disengaged group.

If you think disengagement is not your fault, think again. The survey find employees have scant faith in management’s ability to inspire and lead.
For instance:
* Just 41% think their senior management supports new ideas and new ways of doing things.
* Only 40% think senior management acts in a way that’s consistent with their values.
* Just 37% believe management tries to be accessible to employees.
* Only 36% think senior management effectively communicates the reasons for important business decisions.
* And a mere third believe management communicates openly and honestly to employees.

“Employees are looking for guidance, direction, vision and clarity -- from both top management and their direct supervisors,” says another TP spokesman. “They don’t believe either are delivering.”

Add that to your to-do list. And in upcoming posts, we’ll look at some solutions.

Click here for our previous post on Bad Bosses.

Change your language, change your life

The language we use can make a big difference ... in life and in business.

In a recent newsletter, retail sales and marketing expert Kelley Robertson asked us to consider the possible customer impact of restating negative concepts as positives.

As an example, compare:
"Oh, we're out of stock."
"We can't get any until next month."
"All we have left is a demo model."

to:
"We're completely sold out!"
"They're selling so fast we can't keep them in stock!"
"We have a display unit available that works great."

Simply rephrasing a sentence, says Kelley, “can change the entire message that the customer will hear. When we emphasize the right words with the appropriate tone of voice, the end result will be a positive message.”

A few more examples:

Change “I can't do that” to "Here's what I can do."
Change "It wasn't my fault" to "Let me help you resolve this."
Change: "I don't know" to "Let me find out."

Small, subtle changes can make a difference in the message your customers hear.
Can you think of any more examples?
Post them in Comments, below.

For more on Kelley Robertson and the Oakville-based Robertson Training Group, click here.

The magic of GrowthCamp

"Entrepreneurs are generally huge skeptics. So you can imagine the frustration as a room full of aggressive entrepreneurs found themselves baffled by one frizzy-haired magician.

"The CEOs from the PROFIT HOT 50 list of Canada's Emerging Growth Companies have faced down steely-eyed bankers and bull-spewing sales reps. But early this fall at GrowthCamp, PROFIT's annual HOT 50 conference, they couldn't figure out how conjuror David Ben knew exactly which cards had been selected from a deck by five volunteers spaced randomly around the room..."

For the rest of my inside story on the 2005 GrowthCamp conference, from the November issue of PROFIT, click here.

Highlight (for those too busy to click):
After lunch, PROFIT editor Ian Portsmouth interviewed Bill Tatham, founder of Janna Systems Inc. Campers were amazed to hear how Tatham transformed Janna from a slumping service provider into a red-hot provider of customer-relationship management software acquired by Siebel Systems Inc. for $1.8 billion.

Tatham showed a hint of his fierce drive in one anecdote. He was working a trade show when a key buyer from Wall Street giant Goldman Sachs walked by without even looking at his booth.
Tatham sent a staffer after him with the warning: "Go get him and bring him back — or don't come back at all."

For more management lessons from GrowthCamp, point your canoe here.

Peter Drucker

They’ve been calling him the Father of Modern Management, an influential business guru, Visionary of Visionaries, the pioneer of social responsibility, the grand old man of provocative theory, and the greatest management thinker and writer of all time.

And those are just the headlines since Peter Drucker, the Austrian management thinker who fled to the U.S. to escape the Nazis, died Friday (Nov. 11) at the age of 95.

Drucker not only made a science out of management. He shaped many of our concepts of business (he invented “management by objective'' and the term, “knowledge workers''), and was also an influential thinker in entrepreneurship.

Here is the introduction to entrepreneurship in his 1993 book, Innovation and Entrepreneurship:

“The husband and wife who open another delicatessen store or another Mexican restaurant in the American suburb surely take a risk. But are they entrepreneurs? All they do is what has been done many times before. They gamble on the increasing popularity of eating out in their area, but create neither a new satisfaction nor new consumer demand. Seen under this perspective they are surely not entrepreneurs even though theirs is a new venture.

“McDonald's, however, was entrepreneurship. It did not invent anything, to be sure. But by applying management concepts and management techniques (asking, What is "value" to the customer?), standardizing the "product," designing process and tools, and by basing training on the analysis of the work to be done and then setting the standards it required, McDonald's both drastically upgraded the yield from resources, and created a new market and a new customer. This is entrepreneurship.”

It’s the process, not the product.

In tribute to Drucker, here are some of his best quotes:

“Whenever you see a successful business, someone once made a courageous decision.”

“No decision has been made unless carrying it out in specific steps has become someone’s work assignment and responsibility.”

"Executives owe it to the organization and to their fellow workers not to tolerate non-performing individuals in important jobs.”

"Most discussions of decision-making assume that only senior executives make decisions or that only senior executives' decisions matter. This is a dangerous mistake.”

“Almost everybody today believes that nothing in economic history has ever moved as fast as, or had a greater impact than, the Information Revolution. But the Industrial Revolution moved at least as fast in the same time span, and had probably an equal impact if not a greater one.”

Drucker was a big fan of disciplined, sound management – not today’s fetish for leadership. “The three greatest leaders of the 20th century were Hitler, Stalin, and Mao. If that’s leadership, I want no part of it.”

75 Reasons to Be Glad You're an American Entrepreneur

Forgive the jingoism. That’s the title of an article at Inc.com (and in the October issue of Inc. magazine) by Michael S. Hopkins. It takes a contemporary and slightly pop-culture look at why entrepreneurship is such a popular and powerful concept right now.

And most of it applies equally to Canadians, eh (not to mention just about everybody else.)

Some of it’s just plain silly, but many of these reasons are important – and even inspiring. Here are some of my favorites:

1. Because things are changing, still and again. But now the changes are incremental and diverse, not overnight and obvious. Start adding the changes up and themes emerge.
5. Jim Collins's website (www.jimcollins.com).
6. Better coffee. Easier to find. Now available in every American hamlet (thanks to Starbucks and its spawn) in time for that next all nighter you swore you wouldn't pull.
9. Because English is, more than ever, the language of international business. There are more Chinese learning English than Americans speaking it.
17. Moore's Law--despite anyone who says it no longer applies. We guarantee that tomorrow the computer your company needs will again be faster, better, and cheaper than it is today.
18. Peer groups. More of them. Less formal. Simpler to start (not least because there are simply more peers). The counsel, empathy, and bracing inspiration of veteran fellow travelers can be as close as you decide to arrange it.
19. Because not just your business problems but our social problems, too, are being attacked more and more frequently with entrepreneurship.
21. Because corporate America's burden of satisfying shortest-term financial performance expectations has never been more crippling.
23. Because big companies still keep Dilbert in fresh material.

It goes on and on, but it’s worth it. Click here for the full story.

"...And then she saw the Spitfire"

A remarkable letter in today's Toronto Star: "I am here because of him."

Happy Remembrance Day.
Never forget.

Building better business relationships

I recently overheard a very successful entrepreneur advise a less experienced employee on how to build great customer relations.

The employee was just about to fly to the U.S. to meet a new marketing partner and seal a promotional deal that could prove huge for the company. In a gentle, low-key way, the entrepreneur shared some hard-won advice that will probably stay with the employee forever.

“Like always, concentrate on relationship first,” he said. “Make sure you ask her a lot of questions. What’s your agenda? What are you trying to do? What are your objectives?”

Details of the deal - and a valuable new relationship - come later.

The Four Wins in Business

Much like you, I was too busy to attend last month’s Future Leaders event in Toronto with Thomas Caldwell, chairman of Caldwell Financial Ltd. (My excuse was better than yours, though, 'cuz it was my daughter’s birthday.)

We both missed a great session. Fortunately, Future Leaders writes up summaries of its meetings, so here are a few highlights from Caldwell’s provocative presentation, A Barbarian at the Gate.

Caldwell, now one of the largest seat holders on the New York Stock Exchange, says many successful people were not great achievers early on (think high school). What drives many leaders, he says, is some form of unfinished business.

Caldwell has experienced many setbacks in his career, at one time losing everything. But he considers this the best thing that ever happened to him. He changed his life and his work habits to ensure it never happened again. “Success is great,” he said, “but you only grow in adversity.”

Caldwell identified four wins in business:
1. Win for the customer: a valuable product at a competitive price; keeping the customer satisfied, especially after the sale.
2. Win for the employees: encourage employees to keep going; give them another chance when they screw up; energize your team.
3. Win for the owners: share what you are doing and don’t be greedy.
4. Win for suppliers: pay accounts right away, and pay fair prices; don’t be like the big companies and banks that abuse the system with their payment practices.

For more on Future Leaders, click here.

Women helping women

Today I moderated a roundtable discussion among seven distinguished women entrepreneurs. They all rank on PROFIT’s 2005 list of Canada’s Top Women Entrepreneurs, and were tremendously successful and articulate.

Nonetheless, the goal at the W100 Idea Exchange, held at the Vaughan Estate in Toronto, was to discuss the challenges these entrepreneurs are currently facing. Graciously, they each came up with one or two.

Here’s a sampling of the issues they are facing, and the solutions offered by their peers.

1. One business owner asked for help improving the margins in her business. Suggestions included raising prices, hiring consultants to cut costs, and selling the company’s real-estate assets. When the entrepreneur said she was reluctant to raise prices, another participant said her company raised prices 15% last year. When it received no complaints, it raised them again.

2. One participant complained about the high cost of buying custom end-to-end management software. Several entrepreneurs said they had found it cheaper to hire their own IT staff to produce home-made solutions where the mass-market packages leave off. Another said she actually asks competitors for advice on topics like this, as they understand her needs best.

3. “I need help finding, contracting and keeping sales people,” said another entrepreneur. “’Good sales people’ is becoming an oxymoron.”
Among the suggestions from the table: Ask more process-oriented questions in the interview to better understand a sales candidate’s abilities and experience; revise commission structures to better reward desired behaviour; offer better training to encourage good people to stay; hire two or three salespeople at a time to reduce training costs and hope that at least one makes the grade.

4. One entrepreneur said her business is ‘plateauing,’ and competitors are eating into her margins. What should she do? Did she need an exit strategy?
One peer picked up on the real problem: “Are you bored with the business?” The table offered several solutions, such as delegating the parts of her job she doesn’t like, or investing in new startups to give her the growth fix she seems to crave. She seemed pretty happy with the feedback.

For more on PROFIT’s W100 list, click here.

Circle the date, save your pennies

On Wednesday evening, November 23, I will be speaking as part of the Future Leaders Entrepreneurs Forum at the National Club in Toronto.

Update Nov. 8: For various reasons, the organizers have put off this event till February. I will let you know the new date when it's finalized.

My topic will be all-new: Lessons from Canada’s Newest Growth Companies, based on my work this year with the PROFIT 100, Hot 50 emerging growth companies, small-biz clients, and other businesses I have been spending time with and learning from.

I did many presentations on this topic during my years at PROFIT Magazine, culminating in my book, Secrets of Success from Canada's Fastest-Growing Companies. But that was then, this is now, and my content will be all new and updated for 2005 - and beyond.

Here's the promo blurb:
"Far below the radar of the mainstream media, Canada is home to thousands of exciting, successful growth companies. How do they succeed in the face of powerful competition, both at home and abroad? Through a canny combination of vision, strategy and systems – and a bias for execution that is bold, yet measured.
In this exclusive presentation, Rick will introduce you to some of Canada’s top growth companies and share the secrets of their success!"

How can you miss it? For more information or tickets, e-mail info@futureleaders.ca

Bad Bosses mean so much

I believe entrepreneurship is the source of Canada's future jobs, innovation, and economic security.

That's why one of Canada’s greatest natural resources is its near-infinite supply of bad bosses. Bad Bosses inspire talented employees to quit and start their own businesses, to do things smarter/faster/more independently. Their hostility and ineptitude have inspired many great companies and family fortunes.

So it is with pride and relief that I saw a recent Monster.ca poll in which more than 100,000 Canadians rated their bosses on seven factors. They used a scale ranging from -50 to +50, with zero representing fair performance, +50 representing the perfect boss and -50 a clear failure.

Responses to all seven statements produced an overall score of -3, indicating that Canadian bosses rank just below the middle point. In other words, most of them are bad.

Though Monster puts a positive spin on the results, saying “Canadians are sending a clear message: their bosses are halfway to being perfect - with room for improvement."

The poll says bosses have the most room for improvement in the following areas: - Acknowledging their mistakes -7.1; - Being a born leader -6.2; - Helping employees reach their potential -4.3; and - Taking employees' viewpoints into consideration -3.5.

Our bosses performed best (if you can call it that – look how low these scores are) on: - Letting employees know what is expected +3.6; - Taking employees' well-being into consideration +0.7; and, - Making work challenging and stimulating -0.4.

Monster’s press release concluded that “A good boss can make all the difference, and we hope these results will encourage bosses out there to take a look at how to raise their game every day."

If not, don’t worry about it. Canada needs Bad Bosses, too.

Best Reasons to be an Entrepreneur, part 1

(First in an occasional series)

From a 2004 story in Strategy magazine, Chris Staples, partner of Rethink in Vancouver, talks about why he left a big agency to form his own company:

"Someone once said, 'When you're independent, the accountants work for you. When you're part of a network, you work for the accountants.'"

Free! Glossary of Business Terms

Even veteran business people are stumped regularly by unclear technical terms or impenetrable acronyms.

But entrepreneurs are practically defined by their ability (and eagerness) to access needed resources.

So here's one to bookmark. (Or "Add to Favorites," as Bill Gates would put it.)

VISA Canada offers an online glossary of small business terms to help you wade through the jargon and balderdash.

From "abstracts" to "WBT" (Web-based training), you can find help here.

The word list also offers a lot of Internet-related technical terms, although they could use an update. It includes "ListServ", but not Google, permission marketing, or search engine optimization.

On the plus side, it doesn't cover "rightsizing," "going forward," or "Crackberry."

The Young and the Restless

Entrepreneurship, says Business Week, “is no longer a dirty word.”

Well, better late than never, I guess. Thanks for getting on the bus 20 YEARS LATE.

B-Week Online is celebrating entrepreneurship this week because it’s running a stunt to identify America’s Best Entrepreneurs Under 25. It’s a pretty impressive list of ventures for folks so young: software companies, video services, telecom, publishing, even hazardous waste transport.

You can read all about these disgustingly young, smart and accomplished people here. At the end of your tour, you can even vote for your favorite.

BusinessWeek: last on the entrepreneurship bandwagon, but first in Web interactivity.

By the way, cynical readers may notice that only two of the 20 nominated entrepreneurs are women.

The stats, as we have noted before, show that women are now starting more businesses than men. But the fact remains that most of those firms are personal-services business – not the fast-growth tech businesses, manufacturers or B-to-B services that tend to impress (or even interest) journalists and VCs.

If you want to read a list of impressive women entrepreneurs, PROFIT magazine published its list this month of Canada’s Top 100 Women-Owned Businesses. Check it out at http://www.profitguide.com/w100/index.asp.

By the way, when I left PROFIT a few years ago, I advised my successor, Ian Portsmouth, that three ambitious lists a year (the PROFIT 100, the Hot 50 emerging growth companies, and the Women 100) were too many for a magazine with limited resources.

Ian didn’t listen. He thinks all three lists are essential to our understanding of today’s economy and to the promotion of Canada’s best entrepreneurs, and he’s exactly right.
(Though overworked.)