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July 2008

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Tips and Tricks to Viral Marketing

Viral marketing...if done right it can be a cost effective way to get the word out about your business and get customers buying.  While a lot of people talk about viral marketing they don't do it very well.  In a recent interview on Vator.tv (my new favorite site) Bambi Francisco sat down with Andy Sernovitz, author of Word of Mouth Marketing.  There are some interesting tips here on how to get people to notice you, talk about you and buy from you.

See it works...I'm promoting Vator and Andy's book virally.

Ads and Web 2.0 Business Models

This is a video from Bambi Francisco.  Bambi is founder of Vator TV, a social media and social network focused on emerging technology companies and private investments.  I met Bambi a few years ago at Stanford and she is very insightful and very tuned into the new wave of technology development in Silicon Valley.  Below you will find an interview that Bambi did with Tim Chang, Principal at Norwest Venture Partners.  There is a lot of stuff at the beginning about VC's and there interaction with Hollywood and social networking but about the six minute mark he starts talking about business models for web 2.0 companies and how ads can't support a business unless you can drive significant scale.  It is more important to diversify your revenue strategy and actually sell something.  I thought this was interesting...



Who's Out There to Buy It?

Entrepreneurs love to talk about their product.  All of the technical intricacies and what was involved in getting it to this stage as well as what needs to be done to take it from idea to prototype.  Very few of the pitches I hear really answer the question "Who's out there to buy it?"  To an investor that is the key.  I cover this in some previous posts but wanted to touch this again because it is so key. 

John Huston of the Ohio TechAngels used to tell me that explaining the business case was simple.  All investors really wanted to know was "Who is out there to buy the product?" and "How are you going to get them to buy it?"  If you could answer that the business case would be clear.  A lot of people in the early stages of business development miss that because they don't really understand the market and fall back on what they know, the product.  When pitching investors you need to you really need to discuss they business case.  Investors at the early stage will assume the technology does what you say it does or will do.  You need to convince them that there is there is enough money to be made that the investor should spend more time with you investigating your opportunity.  Investors are looking for a reason to say "no" initially because they don't have time to waste on a bad business.  If you can't articulate your business value proposition, even if it is unproven in the market, you are dead on arrival. 

To do this start with the first question..."Who is out there to buy the product?".  I'm going to recommend two books that are MUST reads..."The Art of the Start" by Guy Kawasaki and "A Good Hard Kick in the Ass" by Rob Adams.  Guy discusses the concept of the "Total Addressable Market".  This is not the $100 billion market of everyone in the world that uses the internet as identified by the Gartner Group.  It is the $100 million market of people that use the internet that have a particular problem that will buy your specific product to solve their problem.  You need to get to that level.  I have seen a resurgence of the "speed to market" businesses in the Web 2.0, social networking market.  They feel that they can't accurately identify the market through traditional methods and the only way to really prove the market is to build a beta site, launch it and see how the market reacts.  I know things move fast in this space but there is no reason not to do your homework.  In Rob Adams book they do a great job discussing market research and how to really do it.  I will agree that his process, while comprehensive, does take time and may be to long for some internet markets but you need to at least do some of the research and show some proof that there is somebody out there to buy your product before asking for money to build a beta site.

In conclusion, always be thinking who is out there that will buy my product when you are building your business.  If you are coming up with ways to get to buyers that really have a problem that you can solve you will be in your way to success.

Are You Good Enough To Compete?

Back to "The Lost Art Of Entrepreneurship" discussion now.  The next key to entrepreneurial success revolves around HOW you conduct business.  Back in 2005 I wrote three posts highlighting a CEO program we held and I titled the posts "Good Is The Biggest Enemy of Great".  That phrase is the key concept here.  Many times we have great plans to develop a "World Class" organization but then the details get in the way.  Even though our SBDC has won four different awards of the past year and been named one of the top 10 SBDC's in the country by the SBA I don't feel we are even close to where we should be.  It is very difficult to execute on the grand vision when the world is in the way demanding your attention.  However if you want to succeed as an entrepreneur your biggest weapon has to be "Excellence".  This is the only way to become successful and stay that way.  Your total focus needs to be on the being the absolute best you can be and making your organization the absolute best.  I had breakfast with Steven Anderson owner of Integrated Leadership Systems yesterday and we discussed the "Big Rocks" concept.  Those of you familiar with the Seven Habits of Highly Effective People know this concept but do you live it?  The visual is if you have a bucket and fill it with sand then try to fit some big rocks in the bucket they will not fit but if you put in the big rocks first then the sand it will all fit in the the sand will settle around the big rocks.  It is the same in life.  What is of key importance in running your business, and your life for that matter.  The  important things should take precedence and be scheduled first then schedule the smaller tasks around the big rocks.  Unfortunately this takes discipline and it is often the daily unimportant tasks, often brought on by others' urgencies, that makes it difficult to maintain the focus on the excellence that you want to bring to your business.  The lesson is don't let good get in the way of great.  Don't let the fact that you are doing OK today keep you from building a world class organization.  Deliver excellence in everything you do...to your customers, your employees, your community, etc.  This can be your secret weapon in business...Excellence!!!

Gary Snowman...The Art of the Deal

Having hit it big as a VC Gary looks for the next big deal...Are you in?