Learn to Simplify Your Life

As you know if you have followed this blog for any amount of time, I keep a lot of irons in the fire. And even though it has always been my desire to start my own business and work in that business full time I have continued to maintain a day job for any number of reasons. But sometimes we have to be pushed when we’re a little afraid to jump. So when I found out that headcount reductions were going to affect me I decided that now was the time to jump in with both feet and attack my dreams. So here we go…

About 9 months ago I decided it was time to really simplify my life, that I didn’t need all of the peripheral crap I had loaded it up with and I would be able to focus better and see more clearly if I dumped the extraneous things that were distractions. I love having a house, but it’s more work than I care for so it’s up for sale, bad market or not. I don’t really need two cars, after all I only have one butt so the BMW is up for sale (honestly the S2000 is just way more fun to drive). I’ve dumped clothing, old music gear (keep the guitars of course), electronics and other stuff that’s been sitting in a closet going unused. I’m even selling off some furniture and anything else I keep thinking I need but haven’t touched or used in a long time and I’m really looking forward to downsizing and focusing wholeheartedly on my businesses. To be sure, the lower financial burden will be helpful too since anyone who has started a company knows that cash is king and it can be tough in the beginning.

The lesson in all of this is that we really don’t “need” a lot of the things we think we do and lessening those things can be a huge step toward seeing with more clarity and focusing on what is really important. My inspiration for change has come from a lot of places but 4 Hour Work Week definitely played a part. If you haven’t ready it yet, check it out. I also recommend Pam Slim’s blog, escapefromcubiclenation.com for a lot of the same life simplifying insights. In the mean time, if you are thinking of starting a business, going back to school or any other en devour you just haven’t seemed to have gotten started, think very seriously about how important that goal is to you and even more so about what you can do without. Life, like a desk or room, can get cluttered and when it does it’s hard for us to be at our best. So clean it out and get down to what is most important to you. You’ll be surprised at what you don’t miss.

I’m not an advocate of being a “minimalist” either. I’m sure some day I’ll re-complicate my life (to an extent) with some things, but they’ll be things I really enjoy and it will be when I have time to enjoy them. So if you decided to scale back and find it more painful than I have (I find it quite liberating actually) then remember it’s temporary so you can move on to even bigger and better things. Best of luck in doing so.

TechQuest from the Metroplex Technology Business Council

I’ve been looking forward to reporting to you on the Metroplex Technology Business Council, a new program for large tech companies in the DFW area and small businesses & entrepreneurs that has just gone live.

The program is called TechQuest, and it’s a way to match up entrepreneurs, small-med businesses, grad students & professors, and just about anyone who has a good tech idea with large companies who are looking for solutions. The first partner company is Texas Instruments, and they have listed dozens of technology areas on the MTBC website that they are interested in and would like to receive solution ideas from individuals and companies (solar, nanotechnology, wireless, home automation, many many more). MTBC volunteers will screen the applications, help the presenter to clarify their “pitch”, and schedule a meeting with the appropriate person at the larger company, in this case, TI. The possible outcomes of this matching could be supplier-vendor, licensing, creating a new start-up company, or all sorts of partnership opportunities. This is a very unique program to get people in front of high-level company executives that they might not otherwise have the chance to meet.

The process as simple and fast as possible: just read the sought-after tech areas, and send in an email application answering 2 basic questions.

If successful, it isn’t hard to imagine this model being replicated elsewhere. As corporations, particularly in tech, continue to seek creative and innovative ideas it was only a matter of time before they formally started to reach beyond their walls. If you are an entrepreneur or “idea person” who can also take their idea to at least a prototype phase or detailed explanation, this could be a tremendous opportunity.

For more information visit their website at http://www.metroplextbc.org/.

For more news on the MTBC see the Dallas Business Journal article here.

Protecting Ideas and Intellectual Property

One of the most daunting aspects of starting any kind of business for most entrepreneurs is knowing how to protect their ideas and intellectual property. There is a tendency to be borderline paranoid with sharing even the most trivial aspects of your idea so the question becomes, “How do I find the balance between protecting my idea and providing enough information to the people I need to get feedback from?” In a cut-throat and highly litigious business environment there are no guarantees but there are a few basic rules that will help you find that balance:

1. ALWAYS use an NDA. An Non-Disclosure Agreement, or NDA, can be simple one page document that is signed by you and the party you are sharing information with about your idea or product which simply states that they agree not to disclose to any one else, or use for their own competitive benefit, any of the information you are sharing with them.If you don’t get an NDA and someone steals your idea, you may find your self in the difficult position of establishing who had the idea first, potentially sacrificing first-commer advantage in the market and it could cost you your business. Always keep unsigned NDA’s with you so you can quickly pull one out if the time is right to chat with someone. If they won’t sign it, don’t do business with them. If they want the NDA reviewed by their attorney before discussing your idea then respect that decision, it’s not an unreasonable thing for them to do, in fact, it shows that they are prudent. Note VC’s may decline to sign them so you’ll have to put faith in the fact that they are there to fund good ideas, not steal them, still, only deal with reputable VC’s and continue to use NDA’s with everyone else, including all business partners, angel investors and employees and contractors.

2. Keep the Rights. If you are enlisting help in building your idea or product, you should have a written agreement with them that any work they do for you and anything which results from that work is yours/your company’s, in addition to the NDA. Otherwise they may be a partner, not an employee or contractor and likely won’t be a partner you want.

3. File a provisional patent or utility application. The cost is far less than a traditional patent (about $200) and provides added protection by way of documentation and registration for 1 year. It’s not the complete protection some would like you believe it is and if you have that strong of an idea then you will still want to file for a complete patent but it is still a good tool to employ in protecting your idea. File within 1 year of any offer for sale, public use or public description (any printed medium including theInternet ) of your idea/product or you loose the right to file. If you really want to lock down your idea from prying eyes, you may be able to utilize a nonpublication request in conjunction with the utility application.

4. You own the copyright to anything you produce as soon as it is fixed to some medium but filing an inexpensive copyright so that it is now a registered copyright will provide added protection for things like written works, music, photographs, … and can often be done in collections.
IP is has quickly become one of the most valuable assets of any company or individual for that matter so protecting your IP is an essential step in running your business and should be viewed as such rather than something which can be put off, postponed or ignored all together.

As always, consult an attorney on these things to be sure you get the best advice for your situation though things like the NDA are pretty straight forward and easily deployed.

For more good info on copyrights and legally protecting your stuff the internet visit PlagiarismToday, the blog of Jonathan Bailey.

Marketing Ideas For Startup’s

Archimedes and Economics

Archimedes realized that you can measure the volume of an object by measuring the amount of water it displaces when submerged. What does that have to do with business? Well, I think you can measure the value of an idea by its ability to displace, or in the more common vernacular “disrupt”, existing products, ideas and services. I’m not suggesting that all ideas should be disruptive, or have to be in order to have value, but unconventional approaches today can often become the convention of tomorrow revolutionizing businesses and even whole industries as Henry Ford did with the assembly line in 1908.

When you are looking at new ideas and their ability to be disruptive here are a few criteria to consider:

1) By definition of being disruptive, the idea should challenge the ststus quo.

2) The idea must, in some way, improve upon the efficiency, economics, societal benefit (et al.) of the process, product or service. If you aren’t making it better, you are wasting your time and the idea won’t have long term success.

3) The disruptive idea should be constructive not destructive. It’s easy to be disruptive and destructive but that really defeats the purpose.

4) The means by which you are improving something should offer measurable results. It may sometimes seem “intuitive” that your idea is a better way, but if you can’t really prove it through measurable means you will have difficulty making your case and gaining acceptance for the idea. More importantly, what seems to be an obvious way (to you) of improving something may not always turn out to be better when the numbers come in. I’ve been surprised more than once by this.

Remember, if you can measure it you can test it, and if you can test it you will know if it’s really an improvement.

Disruptive ideas can be revolutionary but don’t necessarily have to be massive in their initial impact either. For example, winglets on aircraft result in about a 3% fuel efficiency on some aircraft, so I have been told by an aerospace engineer friend of mine. Either way this this should illustrate the point. If you were testing an idea and saw a 3% improvement you might not get too exited. But put into the context of the amount of fuel used daily in commercial and non-commercial aviation, the fuel (i.e. cost) savings adds up very quickly and is easily cost justified. Had winglets been your idea you would have had little difficulty making a case for airplane manufacturers to license your technology and for existing airlines and cargo-carriers to retro-fit existing aircraft with them.

Just because an idea isn’t disruptive doesn’t mean it isn’t good, in fact most ideas won’t be disruptive, but “thinking disruptive” is good for generating ideas and approaching things in new ways . Just be prepared for some of your revolutionary ideas to get shot down or not succeed and don’t get married to the idea if it isn’t a good one (again measure to find out) or isn’t a good fit for your current business. Sometimes they just don’t work but when they do, look out!

Prevention vs. Cure

In college I earned a Bachelors in Psychology. On the surface, it is the most ubiquitously useless degree you can earn. In reality, I learned things about human behavior that I have been able to apply since the day I learned them, to nearly ever facet of my life, including business. I make this point because no matter how good your idea, business plan, technical skills or charisma, the one thing you can never overlook or completely quantify is human behavior. For all of our intelligence we are also emotional and often irrational.

You can however infer patterns and learn how to think about human behavior so that you can direct it, or direct your business toward its tendencies so that you end up with the desired result.

What brought me to this seemingly off topic discussion was an e-mail I received from Perry Marshall today (whom by the way, if you don’t keep up with you should). Perry made the following point and it is an extremely important lesson to remember: People don’t buy prevention, they buy a cure for their existing problem.

In his own words regarding prevention: “if you want to sell it, it’s much easier to sell it as
part of a cure than trying to convince someone who’s never had the problem in the first place.” Let’s face it, if we have never been faced with the problem, we just don’t think about it.

Trying to convince someone to take action to prevent something from happening typically leads to counter-productive activities such as beating your head against a desk. Companies don’t think about e-Discovery until they get sued, most people start to workout once they feel the need to loose weight, not to keep it off in the first place (let’s be honest here), that is simply the overwhelming trend.

Of course there are exceptions, but most of them are easily contradicted by other behavior. We take vitamins to help us stay health but may still eat more than is so. Where does the exception become the rule? When the probability of an event and the cost of not preventing it from happening greatly exceed (think in terms of catastrophic loss/exponential amounts here) the cost of preventing it or managing the risk in a proactive manner (this is why we buy insurance); So tailor your product accordingly.

The point is, people are infinitely more likely to take action (i.e. buy) to solve a problem they have now, not to keep one from happening in the first place. So apply your ideas to solving existing problems and somewhere in there bundle your value added product or service to keep the problem from coming back or to drive operational efficiency. You’ll sell far more and your customers will love you.

Finding a Great Consultant

Early and often when starting a business it can be advisable to seek outside counsel. Hiring the professionals who know how to do what you don’t can make the difference between success or failure very quickly and the cost of hiring them should be a part of your business plan. The obvious help we run to are accountants and attorneys because we typically fear the IRS and lawsuits more than anything else (sometimes for good reason). But there are plenty of other disciplines which we are not masters of and can easily cost justify hiring the help. Sometimes we need a lot of help, sometimes just guidance. The part of hiring someone that usually concerns us most is whether or not they will really be qualified and deliver something that is worth the money they are charging us for their services. So with that, I’ll offer up a few things that make a good consultant and that you should be prepared for when hiring someone:

1) A good consultant will give you references. They let their track record speak for itself. If they don’t have references as an employee or consultant, or dodge the question, ditch them immediately.

2) They’ll be happy to meet with you at least once to see what your needs are and demonstrate that they are competent. They aren’t going to give anything away, but should give you enough so that you are comfortable with their level of expertise.

3) Good consultants are good communicators (or should be). Their ability to communicate effectively and succinctly is as important as their technical ability. If they speak in too much “fluff” or their explanation is always verbose, find someone else. Good consultants aren’t there to try to impress you with how big their vocabulary is but want you to clearly understand what they are saying.

4) Their rates aren’t too low. I know that isn’t what you want to hear but someone who is really good is going to cost. If it sounds too good to be true…

5) They will prompt you with a lot of questions. A good consultant knows what questions to ask. If they start asking you about things that are clearly important but you hadn’t even thought of yet (and probably wouldn’t have) then they are on the right track.

6) A good consultant is very interested in building a long term relationship with you. They aren’t a snake-oil salesman that just wants one quick hit. They’ll be a mentor, teacher and coach. They’ll tell you when you are wrong and be flexible enough to work with the idea that is, after all, yours.

7) They are good listeners.

They are appropriately professional. That doesn’t mean you can’t become friends with them and enjoy beers after a long day of work, but they’ll bill you on time, deliver what they promise, respond to you in a reasonable amount of time and always extend to you a consistent level of professionalism.

The list could go on and on…

Following are a couple of other things to keep in mind.

If things don’t go well with a consultant it’s possible that you found a bad one, but it’s even more likely (in my personal experience) that you were the problem. Consultants are good at getting you to think about the things you should consider but aren’t miracle workers either. If you don’t know what you want or really need, the consultant probably can’t tell you. They’ll still happily provide what you ask for but if you don’t give them good info, or are a pain in the ass to work with (i.e. disorganized, thoughtless, slow to respond, ….), you won’t get your moneys worth from them, so do yourself a favor when hiring someone, get it together and know why you are hiring them. A good consultant usually has several clients at a time so if you are a pain, they will fire you as easily and more quickly than you will fire them.

If you are ever thinking about hiring someone in a consulting capacity and have questions, feel free to drop me a line for a little help. Accountants and lawyers aren’t the only ones you will need help from along the way so being open minded and a little savvy will do you worlds of good.

Update (1/26/2008): When I wrote this I overlooked a critical issue regarding your consultant, though indirectly touched on it when I mentioned them as a coach and teacher. That is that they should not only solve your problem/provide a solution, but should help you to ensure that solution is sustainable. i.e. they should be working them self out of that job. Then you are free to hire them to do something else as needed. If they don’t, then a dependency can build up and that isn’t why you hire a consultant. Pam, at escapefromcubiclenation.com, wrote a great post on this topic from the consultants point of view and I would highly recommend reading it.

Update August 22, 2008: Great article on experience with this from a conusltants point-of-view.

Marketing vs. Advertising

Understanding the difference between marketing and advertising is fundamental to any business owner but it’s surprising how few really know the difference.

Marketing is really a process, often a campaign which is intended to drive awareness of products, services and brands. Marketing is incredibly deep in it’s detail and subtelty, a combination of science (demographics, psychology, …) and art (creativity, emotional response, …). By crafting the marketing message to demographics and current consumer desires, the intent is to drive consumer behavior (be that retail or business consumer) toward those products and services the company provides. Marketing is a sustained activity which, in a very Pavlovian sense, is meant to condition buying behavior and build a relationship with the consumer. In another sense, Marketing is carpet bombing; broad and effective, though not always efficient or easily measured in it’s effectiveness, though usually necessary to some extent.

Advertising is the GPS guided smart bomb. A specialty of the broader marketing discipline, advertising is to marketing what the dinner bell was to Pavlov’s dogs. It is intended to invoke response (a purchase) often through a more immediate emotional provocation or call to action. The “immediacy” depends on the ad and the product or service but often the response desired by the advertiser is simply to make you aware of how to obtain the goods or how to use them so the next time it’s appropriate, you can easily take action, which is easier to do if you already have a familiarity or positive association with the company or product (the effect of marketing).

Marketing people out there are going to read this as somewhat of an oversimplification of the difference but the point was to get you thinking in the right direction and speaking the right language. Hopefully this will spring board more research into this area for you.

Entreprenurial Marketing

Unfortunately it’s not enough to come up with great ideas and then build them. We have to actually get out there and tell people about our service, business or product too if we ever expect them to buy. When we start we envision great ad’s from the likes of Budweiser, Coca-Cola and others, and recognize that spreading the words is essential for building a great brand, at least in terms of recognition. But we’re entrepreneurs, we can’t hire Madison Avenue or even a marketing person for that matter… or can we? There are great marketing people out there we can outsource to or hire as needed, though it behooves us to know a thing or two about what we need before we pay someone (the person you hire will appreciate that too, because a consultant worth their salt doesn’t want to B.S. you). Alternatively, we can bite off the marketing work ourselves (bad idea) or, ideally, a combination of hired help and personal involvement (best idea).

A few steps that might help (all of these assuming you already have a viable product):

1) Do your research. What kind of marketing do you need? Online? Magazine, Grass Roots?

2) Define your target market, well. Seriously think about carving out a niche, not just “the whole world” assuming volume will overcome all (because not much business will likely come to you). You’ll have better luck targeting “people who love German Shepards” than “people who love dogs.” You’ll save yourself a ton of money advertising to them too.

3) Find guidance. It’s worth spending to get someone who really knows what they are doing. Marketing/Advertising is an art and a science, and the pro’s are good at making it look easy, but it isn’t, and if you don’t know what you are doing it can cost you far more to try it on your own with less results than it will to hire a professional. (How to find someone good is Thursday’s post.)

4) Understand the difference between Marketing and Advertising. (Tomorrow’s post).

There are a million and one approaches to marketing and many of them are somewhat counter-intuitive so put your ego aside and get someone on board to help you or if you insist on doing it on your own prepare to spend a LOT of time learning, so get books, read on-line and study anything you can. Then be prepared for a painful learning experience. You can learn it, but the start is usually rough for most people who are brand new to marketing.

I personally know one marketing consultant and wouldn’t hire anyone else though I know there are other good ones out there. Most of them will probably give you a free 30-60 minute meeting to help you figure out what you need (at a high level, don’t expect them to give you all the answers) and some perspective. They’ll also be figuring out if you are serious or a waste of their time so be prepared.

As a Marketing Reference:
Wendi McGowan
Wendistry, LLP.
www.wendistry.com

Assessing Ideas

When the flood of ideas for businesses starts to hit you, and if it hasn’t already it eventually will, you will be tasked with determining which ones to tackle. Getting through that process will be trying at times so here are a few suggestions to make it easier.

1) Remember not all ideas are good ones but don’t throw any of them away. Keep a running map or spreadsheet of your ideas with good descriptions. You never know when an idea has just yet to have it’s time, or might help out as part of a future idea.

2) Ask yourself honestly if executing the idea will fit the lifestyle you want. If you are the type that dreams of extensive travel and working from anywhere then starting a restaurant probably isn’t the right thing to do. You might have a great idea for one that would be hugely successful in your area but that doesn’t mean it’ll be right for you or that you will be happy doing it. Pass the idea on to someone who can and will enjoy it and do it right and be happy with a smaller but reasonable fee or percentage of ownership. And be seriously reasonable about this, if you aren’t doing the work, 3-5% is probably fair. 10% would be very generous, depending on your level of involvement.

3) Score your ideas. I created a detailed spreadsheet once to help me with this. In that spreadsheet I scored each idea on a series of criteria such as how easy it would be to execute, how much revenue it had the potential to produce, how steep the barriers to entry were and so on. I also included how satisfied I would be “doing” that idea. I then also weighted the criteria as well and came up with a composite score so I could objectively assess my ideas and see how they fit into my life. It seems a little type “A” but you’ll find that kind of objectivity invaluable. The results were somewhat as you would expect too, the easier the idea to execute and the lower the barriers to entry the overall lower the score generally was, though ideas in the middle were a little more mixed. I’ll blog the specifics of the spreadsheet next week and make it available for you to use.

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