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A few months ago I was talking to a friend of mine who owns several physical self storage locations. He was asking me about lead generation and ideas around online marketing. My line of questioning was trying to determine the value of a lead:
- How much is a lead worth to you?
- What’s the lifetime value of a customer?
- What are your gross margins?
- What are your net margins?
- What are your business goals?
It was when I asked the gross margins question that he threw me for a loop — he doesn’t pay attention to the gross margin but rather keeps track of how many customers each location needs to break even and views any customers above that amount as pure profit. So, for him, the value of a lead assuming the location had the magic number of customers was extremely high relative to the revenue generated from the incremental customer.
For his business there are dual goals: make money off the long term appreciation of real estate as well as profit from the short term cash flow of the different locations. I don’t have any experience with non-technology startups but this struck me as an interesting way to think about his type of business.
What else? What are your thoughts on this way of thinking about a combination real estate and cash flow approach?
Last night TechCrunch published a nice piece on a startup I co-founded titled Rigor Launches Unified Platform for Web and Mobile Performance Management. TechCrunch, for those in the tech world, is like the Wall Street Journal for startups with a large readership. Tonight I went through the site stats for the last 24 hours to see what traffic boost coverage in TechCrunch provided.
Here are some 24 hour stats based on traffic driven by the TechCrunch article:
- 601 more visitors than normal
- 131 visitors had identified company IP addresses (shows a good number of people read TechCrunch at work)
- 27 free trial sign-ups
While these aren’t astronomical numbers they do show the power of PR and getting coverage in relevant places. Please go read the TechCrunch article on Rigor if you haven’t already.
What else? Have you had TechCrunch coverage of your startup and what were the site stats like?
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Recently I was at Palmetto Dunes in Hilton Head Island, South Carolina. Palmetto Dunes is like a small village on the island with multiple golf courses, resorts, neighborhoods, etc. The core part of the area has a well-known tennis facility with over 20 tennis courts and several quality golf courses. What stuck out to me is that as part of the massive tennis facility and expensive golf course there was a tiny, 80s-era pool. It was clearly a “check the box” pool for the purpose of checking a box on different travel websites and marketing brochures. I’m guessing they don’t expect too many people to use the pool since the resorts and condo complexes have their own nice pools but it was still jarring to see it tucked away on the side near some infrequently used tennis courts.
The same “check the box” feature creep applies to software.
As an entrepreneur and product manager it is critical have a clear, consistent product vision and be extremely opinionated about what does and doesn’t make it into the product. When you start adding features to “check the box” it becomes abundantly clear to users and slows down future development with code debt. The next time to you go to implement a new feature that a competitor has or RFP requests, ask yourself the “check the box” question.
What else? Have you seen “check the box” features in products?
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Following up on yesterday’s post Business Idea: Sales Intelligence SaaS App, I wanted to dive into the idea a bit deeper. One of the real challenges with the idea is the lack of market awareness that unstructured information found all over the web can be turned into structured, actionable information. This, in turn, can make sales and marketing teams much more efficient. There’s a mind shift that needs to occur to get sales people taking the patterns they already see in customer acquisition and backing into potential data sources that act as sales triggers.
Pros for the idea:
- There are so many channels of content available that several are bound to be successful
- The level of sales rep sophistication to be successful selling to crazy busy buyers continues to grow
- Sophisticated sales and marketing organizations will be able to easily prove the return on investment from the app
- Cloud-based apps make it easy to integrate the new system
- SaaS apps like salesforce.com have built market awareness for low cost tools that aid sales reps
- A clean pricing model that allows for a free trial for X number of records/data before needing the paid edition
Cons for the idea:
- Sales managers typically don’t have budgets to buy tools for sales reps
- Potential customers don’t know that sales intelligence technology is available
- Potential customer workflows and business processes need to be re-engineered to take advantage of the content
- Time to measure a return on investment could be slow making the product sales cycle longer
There are many pros and cons to the idea. With time, I believe a nice market will develop for sales intelligence SaaS apps.
What else? What are some other pros and cons to the sales intelligence SaaS app idea?
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Continuing with the previous business idea posts on Prospect Instant Call-Back and Content Marketing as a Service, I’d like to propose another idea around sales intelligence. The proliferation of content online and in social media creates a wealth of unstructured information. There’s tremendous information in there that can be used for sales purposes once the signal and noise have been separated.
Here’s how the idea might work:
- A SaaS app that connects to salesforce.com and SugarCRM to augment existing Lead, Contact, and Account information with additional content, mentions, and relevant links
- A web crawler that looks for new information online in social media, websites, message boards and more. Alerts can notify the sales rep via email as well as inside the CRM. New information examples include recently funded companies that show up on venture capitalists’ websites, addition of new locations for retail chains, change in DNS records, recent blog posts, recent press releases, and many more channels of content.
- Pricing might be anywhere from $25-100/sales rep/month or $100-1,000/content channel/month
- Interface with marketing automation and inbound marketing products to better target marketing activities
- Sell through channel partners like marketing agencies as well as direct to sales and marketing managers
The goal with the SaaS service is to empower sales reps to close more deals with a shorter sales cycle.
What else? What do you think of the sales intelligence SaaS app idea?
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Every year for my EO forum we do an off-site retreat out of town. Every quarter for my company we spend one day off-site doing a planning session. There’s tremendous value getting together outside the normal confines of an office and spending time to reflect on progress made as well as to plan the future. Retreats are a great way to do this.
Here are a few tips when thinking about an off-site retreat in a startup:
- If you can afford it, hire a professional retreat facilitator and go to a nice place (it’s hard to take people away from their families for a period of time so splurging on a good place makes it more worth it)
- Make sure and schedule plenty of structured time to go along with hang-out time (EO forums that don’t have a retreat facilitator typically don’t schedule enough structured time with programs and exercises)
- Start with a simpler mini-retreat where you go away for a day with no overnight component before doing a multi-day retreat
- Require homework in advance of the retreat so that people involved come to the event prepared with thoughts
I didn’t appreciate the value of an off-site retreat until I had the chance to experience one facilitated by a professional at an amazing location in the mountains. Now, I’m sold on the value.
What else? Have you done an off-site retreat and what are your tips?
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The idea of a minimum viable product for startups has made the rounds over the past few years. One area that needs more attention is around delivering the minimum viable new features in existing products. Just because the product is now successful doesn’t mean that the innovation around new functionality needs to slow down and revert to a must-get-it-perfect-the-first-time mentality.
Here are some ideas when considering the minimum viable functionality for new features:
- Lock the functionality down to only employees and key customers to test features while it is being developed
- Push code to production (if it is isolated) while it’s being developed so that people can start giving feedback
- Identify a new feature that can be built in one to two weeks — if it takes longer than that it is probably too broad or you’re using antiquated technologies
- Remember that feature usage is oxygen for a product and that things shouldn’t be developed in a vacuum
Developing the minimum viable new feature functionality is the same mentality as building a minimum viable product and should be employed by agile startups. There’s a tendency to slow down once things become more established and it’s important to fight it.
What else? What other thoughts do you have on delivering the minimum viable functionality for new features?
Talking with an entrepreneur recently we started to debate when the culture of a startup takes place. My position is that is occurs immediately with the co-founders and builds out with each additional hire. Her position is that the startup needs 15+ employees to have enough personalities and stories to fully articulate the corporate culture.
Here are a few ideas to keep in mind when thinking through corporate culture in a startup:
- Corporate culture is the only long-term sustainable competitive advantage within your control
- Corporate culture starts immediately with the co-founders and strengthens or weakens with every new hire
- The sooner the culture is defined and clarified the better for determining future hire fit
- Getting the wrong people off the bus and the right people on the bus is the most important leadership job
It took me seven years of being a startup CEO before I really appreciated corporate culture and now I’m a huge proponent of having a strong culture. The corporate culture starts on day one and needs to consciously nurtured forever.
What else? What are you thoughts as to when corporate culture starts?
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Products with great functionality and strong form/design are often the most successful, but they don’t usually start out that way. For many entrepreneurs, especially with B2B products, getting the function right should precede getting the form right. The idea is that you want to solve the problems as efficiently as possible, even if the UI isn’t as nice as it could be done with more resources or time. Some entrepreneurs attempt to get the design right before users are even on the system. Users are oxygen for the product and need to be part of the design and feedback process so that it isn’t built in a vacuum.
Here are some ideas when thinking about product form and function:
- Function needs to come before form
- Form is important for B2B products, and even more so for B2C
- More and more enterprise products are taking UI inspiration from B2C web apps
- Consumer web apps are raising the design bar for business apps
- It is often more difficult to find front-end product designers that back-end developers
Product form and function are difficult to do well but function is more important. Form takes a special talent with a graphical eye as well as strong user experience understanding.
What else? What are some other ideas when thinking about product form and function?
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Signing the first 10 customers for a new product is one of the most difficult things an entrepreneur will ever do. It isn’t the act of signing the customer but rather everything required to get to that point and the challenge of getting the prospect to take that leap of faith and become a customer. One of the best things to do is to find the early adopters who take pride in using technologies before they’ve crossed the chasm.
Here are some ideas to find early adopters:
- Go to meetups and educational events for the target audience
- Participate in forums and message boards online where enthusiasts hang out
- Engage in LinkedIn Groups around specific topics
- Advertise on niche community sites
Finding the right type of early adopters can be difficult but the results can be incredible. Create a methodical plan and execute it to find and convert the early adopters into customers.
What else? What are some other ways to find early adopters?