Be mindful of C³ at all times:
Your Company, Your Customer and Your Competition.
It’s important to have a 360 view of your business universe so that you are prepared to never be caught by surprise and never miss an opportunity. At the point where the three overlap, you’re in the zone.
· You’re focused on their needs and wants
· At the same time, you’re keeping up with the trends, not just current, but anticipating and maybe even creating future ones
· You’re always staying in touch with them
· Where are they weak
· Where are they vulnerable
· What aren’t they doing that you can do
· What are they doing that you can do better
· What skills do you have in house – are you maximizing them
· What are your assets (especially intellectual property and capital – this means your employees)
· What kind of culture have you created that everyone lives in – internally and externally
For more on the subject, check out some strategic insight offered by the Harvard Review
Taking fashion to the next level: from two participants
Last week I focused on the Design Entrepreneurs NYC program just completed at FIT. This week I want to pass on feedback from two of the participants: one of the designers selected for a prize and one of the designers who showcased her products at the event. Like all our participants, they put blood, sweat, and many sleepless nights of their lives into this program.
First up is Katerina Lankova, Founder and Designer at Stee-letas. She showcased her products at the DENYC closing event and told us: “Through the DENYC I have been able to explore the business of fashion beyond my comfort zone and formulate a clear picture about bringing the product– STEE-LETAS®– to the marketplace. Seeing other designer’s work, and hearing the unique stories behind their creative process, was both inspiring, motivating and humbling. Ultimately, the most important benefit of the program was the sense of shared endeavor, the priceless connections, and the lasting friendships that resulted from it. I am grateful for the opportunity that DENYC represents; I am already integrating the skills, insights and training that I obtained into my design aesthetic and my business practice.”
Designer Jes Wade. Photo by Sergio Kurhajec.
Jessica Wade, Founder and Designer at Jes Wade, and one of the three winners of the presentations to the panelists, has this to say about her experience: “The opportunity to think about the past and present of Jes Wade during the intensive DENYC program was a gift. Finishing the course with a presentation that was supported by esteemed fashion industry heavy weights was confirming and an even bigger gift. It was a NYCEDC program that focused on every aspect of the fashion design business with a rigorous “mini MBA” boot camp style. The professors and mentors from FIT and the industry were both challenging and supportive and the entire experience a huge asset in confirming the future of my business. I highly recommend this intensive program to all highly motivated design entrepreneurs.”
Jessica wrote her business plan with the help of the DENYC program. The prize is in two parts – one is time with consultant Ari Bloom who Jessica will work with to develop innovative relationships. The second, time with Charles Klein, will help her to negotiate new relationships (in addition to the attorney she already has a relationship with).
Best of luck to the two featured designers above and to all the great designers who participated in the DENYC program!!!
If you are interested in participating in the 2013 class of Design Entrepreneurs NYC, please note that the application process will launch in early 2013. For updates, please visit http://designentrepreneursnyc.com/.
For those of you interested in participating in the business of design, NYC Fashion Fellows is now taking applications. NYC Fashion Fellows
Are you so close to your own product/company/story, that you’re whole team is drinking the Kool Aid? It’s a common problem with start-ups and small businesses. They forget that reality is something outside of the cozy bubble they have created.
In my recent dealings with a startup, the management team sought the low hanging fruit (another cliché, I’m afraid) thinking they identified an unmet need in a large market. Sounds great. But the problem was that no one bothered to go out and actually do some primary research with the market and test the hypothesis. For two months, the team worked under the assumption that this market was just waiting for the company’s product.
Finally, one day, someone woke up and called a few managers in this market segment and got some feedback. It wasn’t pretty. It turns out the market had their own solution to the unmet need and would, in fact, loose tons of ancillary income provided by their own solution if they were to abandon it and go with newco’s solution.
Talk about lost time and back to the drawing board. Two months down the drain and all the marketing and business plan sections had to be rewritten (not that that is unusual even when everything is done correctly). AND they had to re-direct their attention to look for some more low hanging fruit. Fortunately for this company they were bought out before they had to leave the cool aid water cooler.
But how many other newcos, and bigcos for that matter, proceed full speed ahead under their own cool aid bubble?
You will never know all there is to know about your marketplace. But if you never go out and do the research you’ll never know anything about your market. And sooner or later that will come back to bite you – and maybe even cause the whole company to go under.
That’s what advisory boards, colleagues, friends etc. are for. Talk to people who are unbiased and can point out flaws in your thinking and point you in the right direction. That’s also why god created research libraries (like SIBL).
So what exactly is the JOBS Act?
Here are some highlights of the JOBS Act compliments of security and regulations attorney Morrie Simkin.
The JOBS Act (Jumpstart Our Business Startups Act), signed into law
on April5,2012, has several parts.
- It will help companies with annual sales under $1,000,000,000 go public and file periodic reports with the SEC for up to five years after they go public.
- It will help a company making a private placement.
- It creates a crowd funding source for raising capital. Offerings under
this part do not have to be registered with the Securities and Exchange Commission (SEC) or any state, but they are subject to a maximum of $1,000,000 in any 12 months.
- It raises the limits for the small offering registration requirements under Regulation A of the Securities Act of 1933 (Securities Act) to $50,000,000, and such offering is exempted from state registration requirements.
- The standard for when a company has to register a class of its securities under the Securities Exchange Act of 1934 (Securities Exchange Act) has been raised.
Now, what’s it mean to YOUR small business:
- When the SEC implements the JOBS Act by adopting the rules the law requires, it will make it easier for companies to go public (IPO) and to conduct private placements.
- However, if you are fund raising, the Act will make it more difficult for you because you will now have to report on a regular basis as well as fund your own audits (which could run $30 – $40,000 a year).
- For the finders of the world (those who source money for a fee), there is no help in the JOBS Act. If you register as a finder, then you can neither advertise your services nor can you collect success fees. So basically, you’re in the same place as you were before the Act.
Read the whole article, A User Friendly Primer on the JOBS Act For the Business Person and the Capital Raiser and get additional analysis from the expert.
Sandra Holtzman is the co-author of Lies Startups Tell Themselves to Avoid Marketing
Morrie Simkin, is a securities and regs attorney at Mclaughlin & Stern (who started his career at the Securities and Exchange Commission). We were recently discussing pricing and he provided the insights below. While these examples apply to attorneys, I’m sure you can plug in your own vendor experiences.
While Using the price of legal services as the key criterion in selecting lawyers is a mistake for which the client will pay. They will get a product that does not do what they want or need it to do, or a bill that is filled with unnecessary charges.
To keep the costs down the cheap lawyer must do things that are not always in the client’s best interest. If the transaction is a commodity type transaction—the same as every other transaction of that kind, the use of a basic form contract may be sufficient. However, it is never so simple. There are at least two sides to a contract. One party or the other may raise issues, problems, propose terms or raise questions not contemplated in the form or that are at variance with the form. To make these changes and to make sure the contract is complete and consistent takes time. The cheap lawyer can not afford to devote the time this requires. One example I recently saw was a partnership agreement. One partner could remove the other only on their death, disability or conviction of a felony. But the partners had fallen out of love, and one wanted to kick the other out. There was a clause to remove a partner if he did not devote full time and attention to the business. But there was no way to implement it. Defined terms necessary to implement this clause were referenced but not defined. It would have taken too much time for the cheap lawyer to go through the contract and make sure it was complete.
Often in a transaction the cheap lawyer does not or can not take the time to learn what it is the parties want to accomplish. A variant of this is where the lawyer is so eager to get the assignment that he takes on matters with which he is not familiar or in areas where he is inexperienced. The result is a cheap fee but a disaster for the parties should issues of contract interpretation or enforcement ever arise.
Another tactic that the lawyer with a too low billing rate uses is to make up in time charges what his low billing rate lacks. He finds things to bill for—the unnecessary phone calls, the unwanted memos, the unnecessary motions or depositions in litigation, etc. This way he has more time in the matter for which he can charge the client.
This may sound familiar. How many RFPs or bids have you lost to a low bidder? Only to find out later that they cha-chinged their pricing up after they won the contract? Or they screwed up the job?
A version of this blog recently appeared in FIT’s Hot Topics blog where Sandra is the Small Business blogger. You can reach Morrie Simkin at Msimkin@mclaughlinstern.com
Last post I focused on the General Adopters and their place on the Adopter Pyramid.
This week, I will focus on the lowest level of the pyramid — #4 – The Latent Adopter.
A few years ago I walked into a video rental store and stopped cold. I did a very slow 360° turn and realized that, yes, indeed, I must finally go out a buy a DVD player because the walls were now lined with DVDs only.
This is a perfect example of a Latent Adopter. They adopt your idea long after it has become the standard and they are forced to use the new technology because the old technology is gone. Latent Adopters are a mixed bag. If businesses are your customers, Latent Adopters can be slow-moving companies, start-ups with tiny budgets, or new, under-funded divisions of companies. In the case of consumers, they can be those who hate change, have less to spend, or buy only when forced to.
Latent Adopters – the PLUS: they are the largest market on the pyramid and when they buy, they buy in volume; — the MINUS: you have to stay in business long enough for this market adopter to catch up. If you’re a typical entrepreneur, then there’s a fairly good chance that you will no longer even be with the company at that point (which leads me to this suggestion: make sure there are provisions in your contract to cover yourself for this influx of money).
Chart and content from my book, Lies Startups Tell Themselves to Avoid Marketing www.holtzmancom.com/thought_book_title.php
Sandra is a Fast Trac facilitator at the Levin Institute, SUNY
And teaches Licensing at FIT’s Entpreneur’s Institute
Customers, as a group, are not all going to be interested in your product for the same reason at the same time – even if they need it or want it. So what’s the dynamics of reaching your customer? This is important to know because it will help you focus your selling and marketing efforts to the right group, with the right message at the right time. There are four basic customer groups as shown below. This post will focus on the top of the pyramid — #1 – The Early Adopter.
Early Adopters are a critical group of people who will immediately want to buy, wear, or use your product. I was an Early Adopter of SKYPE. I had to let friends know about it – friends who I thought are much more tech trendy than me. You know who they are. They are often the first people on the block with the latest gadget or wearing the latest fashion. They can’t wait to show it to you and explain how it works or tell you why it’s going to be trendy in a few weeks or months. These people are always on the lookout for the latest thing. In corporations, Early Adopters often have the ear of the CEO. They are seen as authorities and, as such, help build your product’s credibility by providing evidence that your product works in the real world. Every product or service has its Early Adopters. You see them at trendy new restaurants and wearing new fashions. The pyramid shows that Early Adopters are the smallest market. They are, therefore, the most economical to reach. Like the guy on your block, they are willing to take the risk with something new. They also expect kink that come with a new technology and are much more forgiving of them. They are the authorities and trend-setters that introduce your product to the next group of Adopters called the Professional Adopters. I’ll talk about them next week.
Chart and content from my book, Lies Startups Tell Themselves to Avoid Marketing.
A version of this blog was previously published at the FIT Blog, Hot Topics, under Small Business. I am on the faculty there where I teach licensing.
Hey Retailers: Your Employees Can Kill Your Marketing Efforts and Business
On two recent occasions, I had bad encounters of the sales clerk kind. The first was in a small chain clothing store where at checkout I asked if I could apply two different coupons I had (hey, no harm in asking…usually). The sales clerk said no. OK. So I continue checking out. But the sales clerk standing next to her at the register made a snide remark under her breath.
The exact same thing happened at Barnes & Noble in the Village. This time it was aggravated when another sales clerk said, “Yahoo” as I walked away. And he wasn’t talking about the internet service.
Both instances left a bad taste in my mouth and a bad impression of the store employees. It won’t be soon that I return to those particular stores.
If you’re going to send coupons, a sales tactic specifically designed to drive traffic to your store or website, then your staff MUST respect them when they appear at the register. Snottiness and pretentiousness undercuts the store’s efforts to maximize sales at this peak time of year. Or any time for that matter.
Your whole sales and marketing effort can be torpedoed by sales clerks. Particularly holiday temps. Your business culture must ooze through the pores of every employee, ESPECIALLY THOSE IN DIRECT CONTACT WITH YOUR CUSTOMERS.
A successful illustrator acquaintance hired a rep. Months later business had fallen off. On a phone call, a client said that he loved the illustrator’s work but his rep was an a**hole. Rep fired immediately. Most of the damage was repaired. But not so easily in today’s economic environment.
Watch out for this in your business. It can be a $$$ killer.
Send in mystery shoppers. Follow up with your clients on a regular basis. Have open ended conversations so they have an opportunity to talk freely.
And remember, your whole sales cycle can be sabotaged by one lousy employee. So put as much effort into hiring the right people as you do your sales and marketing.
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