Measure your business

Someone (thanks Ashwin) forwarded me some notes from a presentation on why measuring your business is so important. It was a good reminder on how true this and a good reminder on how we forget about it. Here’s the jist of it, complements of a talk by Chris Klaus from Kaneva :

1). Use a “lean startup” approach. (Google “lean startup”)

2) Focus on “metrics” from day one. The best 5:

• Acquisition – what is the cost per lead to the site? In his experience, Google ads are best, but do a range of things.
• Activation – once users get to the home page, how many actually engage in your activity. MUST do A/B testing. It is built in to Google analytics.
• Viral coefficient (referral / word of mouth marketing) – what percentage of users invite others X what percentage of invitees accept and become users? If viral coefficient > 1.01, the site is growing by itself. (Most aren’t). Paradigm shift: spend $0 on marketing focus on improving viral coefficient.
• Retention: once users visit the site, how many come back, how often, find out why. At Kaneva, the #1 thing users say will attract them back more often is more games.
• Revenue: how to monetize. He likes freemium best, but it may not always apply

You MUST collect these numbers to validate the model, no matter how early or small the site is. e.g., if viral coefficient > 1.01 and retention = 40-50%, nothing else matters, he will invest in it. We’re just kicking off things at Openstudy and we really need to focus on how students are using our platform to study with each other. It’s something – metrics that is -  we do have in place but this reinforces maybe not enough.

Vocalocity's Customer Testonial Channel

One of my old companies, Vocalocity, took a simple idea and blew it up into something very creative and effective.

Premise. Send out a cheap video camera – like the Flip – to a handful of your best customers and ask them to record a testimonial. Provide a stamped addressed envelope for them to return the camera and there you a go, a low budget real life video to use in your sales pitch. Now recycle the camera and send it to another customer. Believe it or not, people do send the camera back as a rule. If the camera only costs $150 and 5 customers recycle it before it’s swiped or gets busted, that’s only $30 per testimonial, not bad!!!. Try giving that budget to a full service production company.

The Voclaocity guys took the concept a step further and built an entire video channel around the testimonials called Vocalocityflix. Great idea. They could take it one step further by allowing others (like resellers) embed the videos on their web site , increasing SEO and reach even more.

Link to their video channel – http://vocalocityflix.com/

Some of the benefits:

• More effective – the low production value plays to your favor. Prospects see it as real and genuine and therefore more believable.
• Better customer loyalty – the customers who participate in the testimonials love it. It’s all about engagement
• Great sales tool – instead of sounding all sales like on the phone, just get your prospect to watch some testimonials within you online while you have them on the phone.
• Build SEO – the video site builds great SEO for your web site.
• Increase ad response rates – the video channel makes a great landing page for ads.

It’s an emotive subject the company mission statement. Everyone has a view on how it should be worded and how useful it should be. While nibbling on a slice of spinach and mushroom pizza today in Wholefoods, my eye was taken by the way they present their mission and values statements to customers.

Instead of trying to get everything crammed into a single mission statement, so it becomes meaningless and wordy, they have adopted a different statement for each part of their business. Each has its own meaning relevant to a specific audience, therefore giving them context and most importantly ensuring they are useful. The same approach has been applied to “Values”  and “Quality” statements:

The Monster opportunity in eductaion is waiting.

I’m diving head long into the  elearning market with OpenStudy and it’s a fascinating space. More than anything it’s prime for massive disruption – Kevin Maney in his Business Week article, “Next: An Internet Revolution in Higher Education”, digs into this very well.

The essence of Manley’s analysis …

• “Currently there exists no higher-education version of MP3 music files—no way to get a “good-enough” BA or master’s degree that’s accepted by professional managers, yet obtain it in a way that’s cheap, easy, and convenient. This is a terrible imbalance. That’s like putting up a giant neon sign announcing: Monster Opportunity Inside”

Along with Manley’s “monster opportunity” is another skulking behemoth: the “socialization” of education. In much the same way that we’ve seen peer-to-peer interactions happen in personal relationships (Facebook), professional interactions (LinkedIN) and music (ilike), it has yet to visit the campus. Much of this is a result of establishment inertia agreed but much of it is also down to a lack of tools. There enter OpenStudy.

OpenStudy is a peer to peer study platform that allows students to study with each other in a new “social” way. By setting up virtual study rooms with friends or anyone from the network, students can collaborate on assignments, projects or answering questions.  It’s big point of difference, is the way in which it promotes the  “social” aspect to learning by matching those who want to GET help with those who want to GIVE help. With OpenStudy, students have a unique way to collaborate that is more engaging, fun and effective and is based on studying when and where the student wants. Try thinking, Webex-meets-Facebook-meets-match. com.  Further more, OpenStudy is content agnostic – it’s not about ‘what’ you learn or even ‘where’ you’re at school, instead,  it’s about the ‘who’ you learn with. OpenStudy’s emphasis is providing connections between the “people” and not on serving the content.

Fundamentally, the goal is to flatten – and disrupt-  education by distributing the responsibility of learning to the online crowd, making it accessible regardless of location, expertise or socioeconomic background. By “socializing” the collaborative learning process whether in study groups, lectures or tutoring, OpenStudy leverages peer validation as a motivator to drive student-to-student learning and create an environment where students teach each other.

Time will tell how the socialization of education will shape up.

Just got back from presenting at the IEI Entrepreneurial Forum in Atlanta. Here’s my presentation:

Something i touch on in the presentation is how important it is to drive your simple marketing message home at every opportunity – shout it loud. Take a look at the presentation by Steve Jobs and team at their last product conference. Count how many times Apple (AAPL) marketing chief Phil Schiller used the words “amazing” and “incredible” in his presentation at the “It’s only rock and roll event.” (Answer: an incredible 15 times each.)

Now someone who calls himself justanotherguy84 has taken the exercise one step further. He (or possibly she) has posted a 2-minute YouTube video of the entire Sept. 9 event stripped of just about everything but the adjectives.

Ever wonder how Steve Jobs and company leave the indelible impression that Apple’s products are really great, really easy and just plain awesome?

[the apple part of this posting is complements of Philip Elmer-DeWitt]

Being able to deliver a compelling pitch for your start up business, in whatever format, elevator, short or long is essential. Here’s an example how a pitch should be delivered. You can see other ones at the TechCrunch 50 competition. This presentation is from the runner up, Anyclip

Customers want to be heard

The traditional 5 P’s of marketing as every good student knows are Price, Product, Packaging, Promotion and Place (distribution). Well, there’s a new one in the mix and it’s called Participation. With the explosion of the social media revolution the whole marketing mix is shifting. Customers do not want information and advertising messages rammed down their throats, they want  to be engaged; they will respond if we listen and allow them to participate.

Here’s 3 ways to drive participation:

• Get Feedback – services like Uservoice or GetSatisfaction let you add a feedback tab to web site so customers can easily give you comments about ideas, complaints etc they may have. The Uservoice service manages the customer feedback experience, so you can respond, track and engage with your customer. There is a basic service for free or you can pay for more bells and whistles. Here’s an example of a site using it – Fizzbee (click the Feedback tab on the right side and you’ll get the idea). Set up is simple and quick, all you have to do is add a short piece of html code to your web site (it’s really easy to set up trust me).
• Set up a Customer Advisory Council – this is a group of your customers who have volunteered to act as a sounding board for ideas or changes you may want to introduce to your business. Kinda of like a beta group but less techy and more based around opinions e.g. “i want to add a back-up software service to my offering, will my customers buy it”. We all have customers who love to give you their opinion for free, so by grouping them into a more formal program they feel even more empowered. It’s as simple as inviting them to join and sending them emails now and again when you want feedback. Make sure you treat them well – small freebies are good – and dont abuse their time.
• Set up a text-based “Customer Comment Box” for offline feedback – if your business has a physical location where customers visit, like a restaurant or retail store, provide a way for them to give you real-time feedback via text. No body wants to fill in one of those comment forms and drop it in a box when the guy on the cash register is glaring at them – make it anonymous and easy for people and you’ll get responses. Use a service like PollEveryWhere to set up a text number for people to send comments to, print up some posters / tent cards for instore display showing the text number and off you go. All the text results can be read online.

Remember, creating an effective customer Participation using social media requires no single approach but use of a basket of tools and different approaches.

More entertaining than anything but it shows where your business should be looking

No matter how large or small or how new or established you are with your business, you need a plan to work with. Call it a play-book, a road map, a blue print; call it what ever you want but make sure you have one. I’m developing a go-to-market strategy for openStudy, a new technology start-up i’m working with and here’s an outline i’ll be using for a day strategy session.

Shut your team away  in a room for a day with a white board, flip chart (plus those post-it style sticky sheets) and a pile of bagels. Plaster the walls with all your ideas. Try to stay on time (see below). Ideally, it’s good to have an outsider to act as facilitator.

1. Situation Analysis (30 minutes) - why are you in business? What’s the gap in the market and the market opportunity that makes all this work for you?
2. SWOT (30 minutes)- create 4 quadrants, one each for Strengths, Weaknesses, Opportunities and Threats. List 5 in each quadrant.
3. Positioning statements (15 minutes) - “we ARE the following” ; “we are NOT the following”. Do not get sucked into the “naming” vortex or get hung up on word smithing, you can do that another day. Gag any trouble makers.
4. High Level Goals (30 minutes) - use what you’ve created in 1 , 2 & 3 to create 5 top level goals about your business e.g. “we will get 1 million users of our product within 12 months”
5. Strategies (3 hours) – This is the “How you are going to do it” section. A strategy is a group of techniques and actions with a goal in mind. See below for the different type of strategies you should address.
6. Plans & Timings (60 mins) – What’s the nitty gritty of what’s going to happen and when are things going to happen. Like a to-do list for each strategy.
7. Wrap Up  (30 minutes) – make sure the bagels are finished and address any follow up items. Volunteer someone to right up all of this good stuff in a document so that  you can actually use it. Take digital pictures of each chart you have on the wall. They are great to come back to – either when you’ve made millions and you can tell everyone “hey we did have a plan” or something to throw darts at when you’ve burned through all your cash and mortgaged the cat.

Here’s a break down of the strategies. You can have multiple under each – please please keep them simple and easy to remember so people can relate to them. Give them a catchy name. They are just meant to be strategy statements

• Product Strategies – address why people will want to use your product / have a strategy for user experience or for uniqueness.
• Distribution Strategies – what’s your route to market –  partnerships, grass roots, direct, indirect etc.
• Pricing Strategies – how are you going to make a profit? Good section for the soul.
• Launch Strategy – what’s going to happen in the first 6 months to get people buying / using your product? See my previous blog for some case studies by the likes of Facebook, Youtube etc.
• Promotion Strategy – how do you get your product out there? 92% of people purchase because of  good Word of Mouth (WOM). How are you going to create it?
• Participation Strategy – this is one of the new “P’s of marketing”. How do you engage your customer? Maria talks about all this is her blog which may be worth a gander.

Good luck. Let me know how you do.