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?

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.

• 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?

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

(Source: http://superblog.crazyengineers.com/wp-content/uploads/2009/10/wrong-problem.jpg)

Quartz isn’t a publication that I’m well-versed in, however, I stumbled upon an article on qz.com 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? 

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