This week, Congress is considering a bill that has the potential to greatly alter the distribution of information on the Internet. If you haven’t been following this, it is worth doing some research on it, as the implications for existing companies like Google and Facebook could be huge. It could also significantly impact start-ups if the threat of lawsuits takes off. Most importantly, as consumers we need to think through how this might affect how we consume and distribute information online. You can start your research here: http://americancensorship.org/. It’s obviously a one-sided take on the bill, but it identifies the issues that are at stake.
I came home yesterday to find a three-page letter on my door from someone who would like me (and everyone else in our neighborhood) to hire his company to replace my windows this fall. I took a few minutes to read through it out of curiosity, and it spelled out five or six reasons why I should use his company to do this. It was a nice letter and well-written, but there was a big issue: customers, including me, don’t normally bother to read marketing material. We glance at it to see if it’s something we need before tossing it in the recycling bin (sometimes we don’t even do this, which is how a friend of mine recently ended up sending his mortgage payments to the wrong company). So, it’s extremely important that in that glance, the customer sees who you are.
The best marketing messages out there are simple ones. They say clearly and concisely what a business does, they are consistent with what the business actually does, and they don’t vary from medium to medium. Walmart is a great example: everyone knows that Walmart is “Everyday Low Prices.” Why? Because that’s the only thing Walmart ever says about itself and they back it up with how they operate at their stores.
The problem with long or mixed messages (think Miller Lite craft beers) is that if it isn’t immediately clear what a business does, customers won’t take the time to figure it out. We’re lazy that way. And we don’t want to go to a business that does everything for everyone; we want to go to a business that fills our specific need. To that end, great businesses know who their customers are and who their customers are not, and they only worry about serving the first group.
This is the issue that many small businesses are finding with using daily deals like Groupon. They tend to attract low-margin sales from customers who wouldn’t otherwise buy, while at the same time diluting their brand: “Come here because you can get a cheap meal, not because we have great food.” This is why I haven’t had as much of a problem as many people had with the recent moves Netflix made; sure, they alienated some of their DVD customers, but the future is streaming and it is clear this is where Netflix wants to be.
One of the core questions of entrepreneurship is why person A did recognize and capitalize on a particular opportunity and not persons B through Z? Why did she recognize and exploit that opportunity and not me? Well here are few thoughts on this question. First, she was looking for opportunities. If you’re not actively searching the odds of spotting anything of interest are pretty minimal. Opportunities do not just jump up and bite you on the tush, at least not usually. Search is an active process (see my previous post on opportunity gaps) not a hobby. If you’re not looking you’re not likely to find it. Second, you’re much more likely to recognize and successfully exploit an opportunity in your ‘Entrepreneurial Sweet Spot’. Your ‘Entrepreneurial Sweet Spot’ is where you prior experience & knowledge, contacts and networks, and capabilities converge. It’s the space in a market that you are most likely to see the opportunity first, but more importantly, be able to muster the knowledge, resources and people you need to successfully exploit the opportunity. Successful entrepreneurial search is much more likely to occur in markets that you know well or in markets that are tangential, but close to what you already know. Searching broadly and randomly, or following the herd and the buzz around the next big thing, is unlikely to lead to useful discoveries. Focused search based on applying your skills, knowledge and networks to gap in between existing offerings and what is possible is far more likely to lead to success. Every potential entrepreneur out there should have a personal inventory of their knowledge, skills, and networks. What do you know? What can you do? Who do you know? Where do these converge to create a unique opportunity for you? These are the questions every entrepreneur should use to guide their search. So back to the original question – “why her and not me?” the answer generally lies in an active, focused search process designed to build on what you know, who you know and what you can do.
This is perhaps the smartest thing I’ve ever heard an entrepreneur say about the process of opportunity discovery. Opportunity discovery is the process of envisioning the gap between what’s possible and what is currently being offered – the larger that gap the greater the potential opportunity. If you combine this with the insight I heard in long ago in a lecture by William McDonough, one of the leading thinkers on sustainability “Anytime you think we’ve designed everything so perfectly and so efficiently just ask yourself how long it took the human race to figure out where to put the wheels on a suitcase”. Opportunities abound for redesigning, reimagining existing products and services that have become taken for granted. Industrial designs like the paint can are over 100 years old – why are we still pouring paint out of a tin can that has no pour spout and requires tools to open? We honestly can’t do better? Of course we can and we did. Nottingham-Spirk redesigned the paint can for Sherwin-Williams and in the process added to their success. So as a potential entrepreneur as you walk through life you should be asking yourself “What’s not there?” “What’s not on the shelf that should be?” “Where are the gaps between what is currently being sold and what is possible?” These gaps are the essence of entrepreneurial opportunity and filling these gaps with new and better products and services is the mission of entrepreneurship and the benefits entrepreneurial action provides society.
Of course it can. There are some who would say entrepreneurs are born, not made, but those folks overlook the fundamental behaviors of successful entrepreneurs – most notably – to actively identify and manage risk.
I’ve spent decades discussing risk with entrepreneurs, and contrary to the romantic hollywood-inspired notion of all entrepreneurs as Vegas-style risk takers, it seems there are at least two categories – some entrepreneurs (successful?) search out points of risk in an opportunity and set about to manage the risk, while other entrepreneurs just don’t see risk and plow forward blindly. Even this is a dangerous generalization, but one that is more useful.
Derek Buschow and Jeremiah Messerer have made great progress with Hyier.com since winning the Graduate Division in the 1st Annual Fowler Challenge.
Derek recently sent this update:
“We have been working hard to get companies signed up for our Beta test. We currently have close to 8 companies signed up, and we have quite a few demos over the next couple of weeks. We are continuing to add functionality, which we believe, is differentiating us and making our product more of an “all around” application. We’re hoping to be to market sometime this summer.”
If you’re looking for a better way to hire visit their site at www.Hyier.com.
Don’t miss this year’s Annual Entrepreneur Awards Ceremony being held Thursday, May 5th in the Schulze Grand Atrium. This year, the John F. Cade Award winners are Pat and Jim Ryan of Ryan Companies, Alan Bignall of ReconRobotics is Entrepreneurship Alumnus of the year, and the Family Business of the Year is Kowalski’s Markets. You can register for the event at the website http://StThomas.edu/Business/EntreAwards. Please join us for our 22nd celebration of St. Thomas entrepreneurship this year.
Project Skyway, Minnesota’s first tech venture accelerator, has begun accepting applications from tech entrepreneurs.
Project Skyway is the vision of Cem Erdem, founder and CEO of Augusoft, Inc. Cem and his team have designed a fantastic program to connect tech entrepreneurs to mentors, investors, entrepreneurs and work their tails off to accelerate the development of their ventures. This is great addition to the entrepreneurial community here in Minnesota and long overdue.
The deadline for applications is Midnight May 1st. If you want to read more, apply or support this welcome addition to our community visit www.projectskyway.com.
In my last post, I talked about the common perception that businesses are only worth pursuing if it involves something innovative or if it can be a multi-million dollar business. I actually think that with first-time entrepreneurs, especially younger ones, there is some wisdom in encouraging them to pursue less-complex opportunities. Because there are so many aspects of starting and running a business that can’t be anticipated, it is rare to see an entrepreneur “truly succeed” with his or her first venture. The ones that do succeed have products or services that evolve from the original concept.
Have you heard the buzz about last year’s Fowler Challenge? Interested in competing for thousands of dollars in scholarships? Looking for a chance to present your idea in front of very successful entrepreneurs?
Then you can get a head start on the competition by attending one of the first two information sessions for the Fowler Challenge on April 19th. The first will be during the Convo hour (11:30 – 12:45) in McNeely Hall room 114. The second will begin at 5:00 pm in Schulze Hall Room 407.
For more information visit http://www.stthomas.edu/business/schulzeschool/fowlerchallenge/.