Wednesday, December 11, 2013

A little bit of Psychology in Business? No. A LOT.

On any given day, there’s about a 60% chance you’ll find me at Starbucks working.  It’s a great, free working space complete with vibrant energy, wake-up aromas, and, especially this time of year, snowman sugar cookies.  Ah, and there’s usually a fascinating collection of people hanging out/ working.  This past Friday night, I was writing some Holiday/ Thank You cards to our customer-partners and other prospects when I was complimented on our cards by a fellow Starbucker (yes, handwriting them – crazy in this day of keyboard and touchscreen typing, I know). 

My new friend is an MBA student at Georgia State, and was a previous Psychology major in undergrad.  She was worried a bit about having a non-business background and post-graduate opportunities.  This was a great conversation for me because I’ve long appreciated how psychology intertwines with business.  It’s not readily apparent, but it really is.  Talk to any good salesperson, and he’ll know exactly how to talk to you and potentially what makes you tick and tock. 

Some quick thoughts on how psychology is engrained in entrepreneurship and business overall…
  • Know Your Strengths and Weakness.  Assessments like the Myers-Briggs, DISC Profile, Berkman, etc. can be simple ways of finding out more about yourself.  These assessments may help you realize more about yourself to capitalize on your strengths and limit your weaknesses while building your career around your personal interests.  I’d recommend, however, that as much as you limit your weaknesses, to also work on those weakness or what stresses you can help you be a stronger performer – “be comfortable being uncomfortable”.
  • Building a Balanced Team.  As a continuation of the Strengths and Weaknesses above, building a team for a startup or small business with balanced strengths and weaknesses allow for a stronger company in addition to its product/ service offering.  For Body Boss, we do actually have differing personalities, and it challenges each of us to think more about why one another feels the way we do when we consider marketing campaigns, licensing and selling opportunities, or even just philosophies that shape our startup’s culture.

  • Put Yourself in Your Customers’ Shoes.  Marketing has psychology all over it.  You have your target audience in mind.  Do you know what language they speak?  What style of communication they perceive?  How about what really resonates with them so that you can grab their attention right away?  Marketing is all about diving into the psyche of your customers and compelling them to engage with you.
  • Sales is All About Your Customer.  Many people will tell you that an effective sales strategy is to have the customer speak.  I think this can be somewhat true in terms of getting engagement.  However, why I like this rule of thumb is so that it gives me a break and a chance to listen to the customer and analyze him/ her.  Customers are all different, and chances are, your product/ service has many value propositions.  By sitting back and listening to your prospects, you can hone in on what matters to them and cater your value message accordingly.

  • Threshold of Pain.  My new friend asked me what signs a successful entrepreneur exhibits/ has.  I have many thoughts to this, not necessarily from my own perspective, but witnessing others.  One of the standout factors?  Mental and emotional fortitude.  Beyond the physical demands of being an entrepreneur (like lack of sleep), it’s the mental and emotional toll of going through the roller coaster ride that is entrepreneurship including feeling INCREDIBLE when new customers finding out about you to incredibly FRUSTRATED due to low user engagement, then back to a HIGH after a great exhibition at a conference, then dipping back down LOW from unsuccessful trial conversions.  Because much of entrepreneurship is about passions and the creation of your own product, it takes a toll both mentally and emotionally.  I recommend you watch Angela Lee Duckworth’s TED talk about this in “The Key to Success?  Grit”.
A company, a product… in the end, behind the curtains are people.  Perhaps this is also why psychology actually plays a significant role in business.  For my fellow Starbucker, I think having a background in psychology will give her a different perspective, and with an MBA to help round out her business abilities, she’ll have a strong platform to build on.

What are your thoughts on how psychology plays a role in business and entrepreneurship?  Where else do you feel psychology plays a critical role in business?

Thursday, December 5, 2013

Companies are Icebergs: Why Copycats Don't Equal Instant Success

My buddy just sent me this article from The Next Web about the potential costs to build some of today's big players in "startups" including Twitter, Instragram, Facebook, Uber, etc (see "How much does it cost to build the world's hottest startups?").  They're not really startups anymore, though, I'd argue.  But of course, they used to be.  Here are some of the highlights:

  • Twitter:  May not take long to build the core -- 10 hours and a good $160 Ruby on Rails course.  But to really get to a Minimum Viable Product (MVP) you have to pour in about $50K-$250K for processes, infrastructure, and the like.
  • Facebook: One expert quoted $500K (min) and 9 months of development and design team.  The real costs, however, is the support.  The expert estimates a monthly burn-rate of $30MM just for its infrastructure so we can Like, Share, and watch videos of kittens!
  • Uber: Uber "scrapped by" with $50MM to build what the service is now, and then Google and Benchmark rammed another $258MM since August.  Artem Fishman (VP of Huge) estimates an MVP would have cost about $1.0-1.5MM to develop.  However, beyond the app itself, there is lots of costs to navigate local legislations and permits to think about.
  • There are several other hot "startups" on the list including Pinterest, Tumblr, etc.  Check out the article to read more.  
What made this interesting for me also coincided with the notion of building a startup and a recent post on David Cumming's blog post "Can't the Software Just be Knocked Off".  It's also a notion people have asked me in regards to Body Boss.  The question makes many people think about keeping their ideas quiet, or even gives people a notion that they can just copy another program and have the same success or even better.  Some personal thoughts:
  • A company is an iceberg.  What you see in a front-end either in an app or even marketing material is just the tip of the iceberg.  Beneath the water is a whole lot of you-don't-know-what that really makes a business a business.  Costs to build an app is oftentimes (especially in the long-run) the tiniest line item compared to everything else it costs to maintain a successful app.
  • It's about the experience.  I'm not an Apple fan, but they have customer service down in ways Microsoft has really never been able to copy.  Just watch Microsoft Stores vs. an Apple store.  The culture ingrained in Apple just oozes a satisfying customer experience.  With apps, making a simple, easy-to-use experience is not simple.  It's also what makes things like Tinder blow up (with users).
  • You don't know what you don't know.  Companies and their products/ services get refined iteration after iteration.  Through customer usage, interviews, and just being in the space, they learn what makes products and customers tick and tock.  Similar to the iceberg analogy above, a startup who has learned and iterated knows things that knockoffs may struggle with because they haven't experienced it.
  • Value of an App?  $500K.  Value of Your Network?  Priceless. I'm trying to be clever here with a reference to Mastercard commercials (here's a good one), but the point is that many times, what can make or break a product/ service is the company's network (connections).  I know there's a suggestion somewhere about suggested network size for B2B startups, but I can't figure it out or find it.  If someone knows it, let me know.  Essentially, have a large, quality network in the market you're approaching.
  • Cost of Entry is Low.  With so many frameworks and Software Development Kits (SDK) available, it's pretty easy to have a copycat program ready to go and live in a short amount of time.  And because of that, almost anyone can do it.  (My friends and I's first foray into entrepreneurship, we used a framework based off of and created where users could dish "A Big Eff U" to... anything or anyone.  It's since shutdown and is being squatted on.)  What's difficult is getting repeat users/ customers because they're being inundated with like-products.  Instead, standing out is the hardest part.  If you're going to build a similar product/ offering, you need to add elements that will "wow" users of existing products to woo them onto yours.
  • Don't be Shy to Share.  Lastly, the notion of someone copying your idea or product is valid, but not all that probable from the get-go.  Everyone is pretty busy as it stands.  I mean, when was the last time you heard a great idea like Uber or some social app, and you started building one?  Sharing your idea with others allows you to iterate and discover who your customers are and what they want before potentially ever writing a single line of code.  There is so much more to building a startup from an idea creating a big hurdle from just anyone copying you -- expertise, grit, and those things outlined above.
So what are your take-aways or thoughts about building copy cat products/ services?  How would you go about building a similar product, but tackling the market with a new twist?

Wednesday, November 27, 2013

Your Personal Brand: You're a Walking, Talking Billboard

How often are you walking around when you notice someone wearing a Jawbone Up or Nike Fuel band?  They're really starting to blow up and be everywhere, aren't they?  The movement for wearable technology is just a growing wave, poised to be a tidal wave that consumes the world along with Google Glass, smart watches, and of course, those wearable devices for fitness.

I have a Jawbone Up -- received as a gift from my brother and sister-in-law for graduation earlier this year.  It's always intrigued me being a guy who loves to quantify myself because I'm always looking to be smarter, faster, stronger, whatever.  I've always been a terrible sleeper, and the Up band's ability to track my sleep patterns was a pretty cool function (how accurately is another question).  I did have a couple issues with my band, but I found myself wanting to get it remedied with Jawbone quickly not necessarily because I wanted to track my sleep or count my steps.  I missed having it on my wrist not just because I felt lighter without it on my wrist.  Instead, I missed having it to showcase to the world that I care about exercising and I'm kinda nerdy so I want to quantify it.  Odd thing it's become.

Ryan Hoover, a blogger, wrote an article about how he has a Jawbone Up, but admittedly, doesn't track anything anymore (see the article here).  The original novelty had worn off for him.  However, he continues to wear it simply because of the "branding" it provides.  When I go out and see someone with an Up band, there's almost this subtle head nod to the other person.  Or if I see someone with one or one of the other wearables, I automatically have a notion that this person is an exerciser, and I immediately shift that person in my head to a different category of person.  (Because I value fitness and health.)

The underlying notion I've appreciated more as I tote this wristband is the idea of personal branding.  It's this notion that we're all marketers kind of like how we're all salespeople (see Daniel Pink's To Sell is Human) -- we sell who we are to get a date, we sell a suggestion for dinner, we sell our athletic prowess to get a spot on the team, or just outright, we sell for our job.  And with this thinking, here's what I've kind of learned in general and as an entrepreneur...

  • You do care.  Everyone says they don't stereotype, but what you wear, how you present yourself in an email, everything is being scrutinized.  Why?  Because you care about who you interact with.  Plain and simple.  What someone wears, what someone says, it all paints some story for you.  I think we all like psychology to an extent because we like to hypothesize that person's story. So mind how you communicate...
  • You're a walking, talking billboard.  You might actually have a company's logo plastered on your chest, or you may have a partially eaten fruit icon lit up all nice and bright on your computer.  Other than that, little details are sometimes amplified depending on what others value.  Something like a small wristband can convey a big message.  As an entrepreneur, you should realize that what you wear, say, and do can represent your company, too.
human billboard
  • Market to the audience.  I think one of the challenges some entrepreneurs... actually, everyone has is that sometimes we get hurt if our idea or who we are doesn't resonate with certain people.  I did a pitch of Body Boss to a room full of investors, entrepreneurs, students, and teachers in business school.  It resonated with half, while the other half felt otherwise.  At the end of the day, you should understand that not everyone is going to have the same value for what you do or who you are.  You have to understand that you're marketing to a TARGETED audience, not everyone.  Side note: respect everyone even if that "value" is not the same.
  • Be one with your audience. Speaking of marketing to your audience, know what your target audience values and who they are -- talk the talk, walk the walk.  I once was pitching Body Boss to some potential coaches, and I was using some silly b-school lingo.  The coaches called me out, and I realized we weren't even speaking the same language.
  • Be ready.  You never really know who you're going to run into.  Be respectful, courteous, and potentially, your eccentric self.  I got a flat on my bike while mountain biking once, and while walking my bike back to my car, a fellow mountain biker stopped and gave me one of his bike tubes and helped me fix my flat.  I later learned he was an Senior Vice President of a large bank.
  • Love yourself.  That sounds cheesy and kinda "hippie", but I'm sticking to it.  I think that we're all at this interesting point in the world where things are getting generic.  People are trying to fit into some trend (Crossfit, certain phones, maybe even this trend of "entrepreneurship") or trying to fit in to get a job, for example.  However, I also see this other half of the world where personalization and people are trying to be different with loud-colored shoes, more free-spirited communication.  Technology ubiquity has led to a broader range of products and services to reach audiences everywhere.  Be yourself, and people who matter (audience, remember?), will value you, too.
  • Be careful of stereotyping or being stereotyped.  It's a tough balancing act to temper our original scrutiny with what is real.  No good answers for that here.  Instead, I can only say that you have to be ready to pivot that original idea.  Build your personal brand to market to the right people so you get that introduction to validate/ change perceptions.
  • You represent more than yourself.  Like it or not, you represent more than you.  I represent my family, my friends, Atlanta, Georgia Tech, Emory, etc.  Different situations, different audiences... they will put you in some category(-ies).  This can be controversial because people oftentimes don't want to be "pegged" as something.  However, you will be; it's human nature.  In this case, use this as an opportunity to either shift those notions or as a way to adjust how to change your personal brand.  You'll have to decide how you want to represent yourself and those you may be affiliated with.
What do you think about personal branding either through what you wear, how you interact with others, what you wear, etc.?  How have you changed public perception through your own personal brand?

Wednesday, November 20, 2013

An Exercise in Humility: Talk with Your Mouth Closed

Last Friday, I had the chance to sit down with several successful entrepreneurs over lunch.  (Successful in this case being "happy" about their previous startups' outcomes either sold or otherwise while under their leadership.)  Over the lunch, I remember introducing some of the entrepreneurs to each other, but after that, I feel as if I might have spoke too much.  You ever get that feeling that you were a bit of a chatter box?

That evening before bed, I felt a bit guilty about it, and as I often do, reflected on my day's events -- what happened, what did I like, what didn't I like, and what could I have done better.  I realize now that I've come to this point where a cocktail of confidence, passion, and experiential exuberance mixed too strong can be interpreted as arrogance and rigidity.  The experiential exuberance, in this case represents, is the energy I have from lessons learned through building a startup and other "wise" events through life.  No one actually said I was arrogant, but I felt that I could have been interpreted that way -- if that's my own feeling, then perhaps that's how it was perceived.

While brainstorming stopgates for the future, I read a fitting article on LinkedIn -- "Finding Strength in Humility" by Tony Schwartz from the NY Times' Dealbook.  As you can imagine, the article talked about the importance of exercising humility as a leader.  Too often, leaders exude the "positives" of strength, courage and decisiveness without the balancing act of tempering those qualities from being excessive.  Some thoughts melding the article, my past, and what happened for the future:
  • Too much of a good thing (like confidence, tenacity) can be a bad thing.  Exercise patience and know it's okay to let others not only speak, but to share their thoughts and actually listen.
  • It's okay to say, "I don't know -- I'll get back to you on that."  No, seriously, get back to someone on that.  I was recently on a call for one of my consulting projects, and I was asked a question to which I spent a minute on the call fumbling through documents on my end to figure it out.  I should've just told the client I'd get back to them.
  • You have two ears and one mouth.  Heard this saying before?  If you've surrounded yourself with people smarter than you, you should do well to sit and listen to what they have to say.
  • Do speak up, and pass the baton.  Obviously, sitting in a group means so little if you don't say anything at all.  You still want to leave an impression, after all.  Instead, just be sure to speak up, and pass the baton for others to talk.
  • Introduce others.  If you're introducing new people, make sure they get a chance to converse with one another.  Networking is more about how you connect others and less about how you connect with others.
  • Read the faces.  As you talk to people in the group, be sure to gauge everyone's facial expressions.  You may find others who are wanting to chime in, but may feel uncomfortable to do so.  Similar to the above points, try to ease those people into the conversation.  They'll feel thrilled that you'd help them in, and you'll feel great for getting them in.
It's clear to me that I still have a ways to go to be an inspiring and effective leader.  Not just in groups, but I should start exercising humility even when I'm alone.  Confidence can be a tricky thing, but as an entrepreneur, especially, I feel there is a more careful balancing act of being confident in your startup and your capabilities and knowing that there are still ways to better your product, your skills.  Genuineness through humility can go a long way to not only communicating and inspiring others to follow your vision, but to buy your product, or simply have a friendly lunch.

At the end of the day, it's being able to call on all these different tools you gather through your journeys to more effectively communicate to the audience in front of you.

How have you negotiated the trapeze of confidence vs. over-confidence in communicating with others?  What are some other tips when in groups of people that I didn't include?

Wednesday, November 13, 2013

Throwing Money at Marketing... Perhaps You're Trying to Solve the Problem the Wrong Way


Quartz isn’t a publication that I’m well-versed in, however, I stumbled upon an article on by Drew Williams arguing some of the validity of marketing expenditures for startups – “$1 is too much for most startups to spend on marketing”. Williams is an entrepreneur and a co-author of Feed the Startup Beast: A 7 Step Guide to Big, Hairy, Outrageous Sales Growth

Now, the title slapped me in the face as one of those, “what??  $1?!  Too much?!”  And the exclamatory questions continued.  But after reading the article, I fully get it, and now, his advice and this article is one of my favorites.  The gist of the argument is that startups tend to spend a lot of money on marketing looking for growth when the real deal in achieving growth and sustainability is simply taking a closer inspection of the products and services provided by the companies. 

Williams cites, “over half of all startups are gone within five years” and “only 30% ever make it to 10 years”.
These are pretty scary numbers, but sharing an anecdote where a company was going spend lots of money with Williams and his marketing team on marketing services to drive sales, Williams uncovered a problem much deeper and far greater – existing customers weren’t signing up for recurring services.  So here, you have a business that is looking to grow when the momentum they’re trying to build on wasn’t actually momentum at all other than the initial spike because customers weren’t in love with what they bought.  There were problems including the payment processing that just scared customers from signing up for recurring services.

I can appreciate this deeply.  One of the most exciting things you’ll ever experience is the early sales after you’ve launched your business.  You start with nothing, and build it into a product that people are actually buying.  But what really discourages you and drives you to go nuts is watching user engagement fall after that initial excitement.  In some ways, you want to say, “bah, they just don’t get it… they aren’t appreciating what we’re doing”, and it’s “easy” to try to move on and try to make more sales.  However, this is incredibly terrible thinking.  As Williams points out, sales almost means nothing if you can’t even ride on the success and recurring services from existing customers.

The companies that succeed (those that exist after years and years including those acquired), are those who listen to the customers.  Successful products and services evolve as the market starts showing you what is lacking in your service or product offering.  In our case with Body Boss, we’ve had to continually refine our app.  It’s a million times better than what we first launched it as.  Getting insight from our customers is critical as we, too, have seen user engagement wane.  And sometimes, it’s hard to get our customers to open up with what needs to be simplified, fixed, or pursued otherwise. 

The funny thing is when you start to rationalize that your product is perfect and the market is wrong.  It’s really a poor excuse. Your product is supposed to address the market, and hopefully, a pain-point of the market.  The product doesn’t make the market.  For Body Boss and for other startups, it’s important to take a hard look at your product and ask your customers how to make a more compelling product.  Williams provides three simple questions that should help you communicate with your customers and tell you if you’re going down the right path:
1.      “What should we stop doing?”
2.      “What should we keep doing?”
3.      “What should we start doing?”

This also leads to a couple other points that will be talked about in later posts:
  1. DO YOUR RESEARCH – I don’t mean to necessarily go to the library or Google and start researching market sizes, key words, etc.  I mean doing real hands-on research vis-à-vis talking to your potential customers.  They will tell you what people really want.  But be careful to also not take just general “I like that” vs. what people will actually pay for.
  2. Depending on the market you’re trying to approach or if you’re trying change actual PROCESSES of how a potential market currently operates, it may be critical to communicative first customers.

Those are obviously not the only two critical components to building a desirable product.  However, as I read Williams’ article, I thought more about my own experiences and others’.  With the abundance of data thrown at you with marketing efforts, really your best marketing device is your product or service offering.  Networking plays such a huge role in your business’s growth in the form of simple word-of-mouth.  So take care of your most important marketing engine before you plow money into the wrong area.

So what are your thoughts?  Have you seen where marketing budget was just thrown at the business to boost sales when perhaps the problem was truly in the current product or service offering? 

Sunday, November 10, 2013

Effective Innovation -- in Supply Chain, in Startups, in Social

Thought this was a good article from my LinkedIn feed: 10 Tips to be an Effective Innovator by Gijs van Wulfen.  Innovation is one of those buzzwords that people think is for entrepreneur or companies with disruptive technology.  However, it's really applicable everywhere.

From a supply chain transformation perspective, outsourcing logistics (for example) can be innovative.  The tasks to accomplish this feat are tough, and you will find yourself on one side of the table challenged by internal team members.  You may be in the position where you need to be the one to connect all the dots (key stakeholders) and really drive change.

In startups, innovation is the name of the game really.  Point 4 about Discovering Needs is so critical.  Being innovative means nothing if you don't know the pain points of your target market.  Further, you can quickly realize potentially an innovative way to approach a problem by brainstorming with prospective customers.  It's likely that founders of startups have been in a particular industry for a while so much of their experience can be parlayed into building a startup.  That should also mean that founders have good connections to potential buyers and have heard the pain points and the needs of target customers.

Yes, this article can even be useful thinking about yourself and what you (or others do) in a social setting.  Just think about how some of these tips by van Wulfen could be leveraged in your group of friends.  I know personally when I try to get friends to get together, it's much like herding cats.  Taking some of these tips such as Tip 3 Facilitating or even Do Things Fast (Tip 9) can be critical so that decisions are made and the group moves forward.

Anyways, you should give van Wulfen's article a read.  What are your thoughts about the being effective in innovation?  Or how have you been an effective INNOVATOR?

Thursday, October 31, 2013

Duh, Use Your Tangible Value Prop

One of the biggest, greatest lessons I’ve learned while doing a startup is one that isn’t shocking.  In fact, before I say it I’m going to go ahead and say it’s going to sound stupid.  You’re sometimes told this in consulting projects, read it in some books, but it’s just the very experience of doing a startup and smack-your-face-duh moment when you really appreciate this. So here goes… when you’re offering any product or service, you have to make a TANGIBLE value proposition.  People and companies largely respond to one thing: net profit.  This means there are two big levers – raise my revenue or lower my costs. 

Yeah… sounds simple and stupid, right?  But if you were me, you may think that there may be a grand idea you have that can save time or can “boost performance” or something like that.  Rarely do people really understand in these terms.  You’ll find those who can understand that building a stronger athlete with ancillary benefits like accountability and the like, but most people do NOT get these concepts.  What do they really understand?  Budget. 

I can tout how in 60 days, I saw personally how I increased my strength by 4.86% (read the post here), or how a high school football team’s top 10 players saw 9.13% gains in the Barbell Bench Press and 5.13% gains in their Barbell Power Cleans, but sometimes, it doesn’t quite click yet. 

Instead, listening to some coaches, especially college coaches, they immediately latch onto the opportunity to save money via summer workout programs.  That is, today, colleges spend roughly $20 per book that is sent out to players over the summer with their summer workout plans.  What ends up happening oftentimes is players lose their books, too, so the Strength & Conditioning program has to send out a new book.  Not only that, but the book just sends out the workout with no feedback system.

So the value prop here for Body Boss, for example, is the ability for coaches to use Body Boss to share summer workout programs with one system at a cost lower than printing and shipping books at $20 per book.  For college football teams, for example, if you produce books for 105 players (NCAA Div. 1 squad size limit), that’s a good $2,100.  Further, Body Boss can be the way that players can get feedback, while also accessing a workout program without the fear of losing the “book”. 

Thinking about consulting, this should be a no-brainer.  How often or easy is it to build a business case or even sell a project if you’re just selling soft benefits? 

So in the end, before you get all enamored about your idea and try to build marketing messages set on value props not based on values, don’t.  If you’re touting saving time, perhaps it’d be easier for your customer to not think of the time aspect as much as the value of that time.  What are the opportunity costs you’re experiencing by doing what you do now?  If you used product XYZ, you’ll save time so you can DO that opportunity cost. 

Anyways, so yeah, sometimes you can get enamored on what makes your product so great or why a project would be nice, but if you lose yourself in the wrong value, your message just falls on disinterested ears.

- SC Ninja out