Business: Old School vs. New School

As we all know everything has changed since the financial collapse of 2008, but how exactly have businesses changed?  I'm going to break it down to its simplest form in this "old school vs. new school" post.   Alright, here we go! (seasonally appropriate colors are a coincidence)

Old school: Profits above everything else.  New school: Triple-bottom line (Economic, Environment, Social).

Old school: Keep business units separate. New school: Integrate cross-functional teams.

Old school: Large capital investments (infrastructure, people, resources, assets, etc.). New school: Bootstrap.

Old school: Pleasing shareholders is the be-all-end-all. New school: Equally pleasing shareholders and stakeholders.

Old school: Very few industry players. New school: Ultra-competitive across industry.

Old school: Focus on short-term goals and gains. New school: Focus on long-term sustainability.

Old school: Put all eggs in one basket. New school: Have multiple baskets.

Old school: Productivity measured by how long/how many hours worked. New school: Productivity measured by how much you get done.

Old school: When facing declining profits -- cut, cut, cut, no matter what (mostly employees). New school: Do what you can to keep the team in place.

Old school: Vertical hierarchical structure. New school: Horizontal organizational structure.

Old school: Money flows up to executives at the expense of employees. New school: Money still flows up, but in a more balanced way.

Old school: High barriers of entry. New school: Low barriers of entry.

Old school: Control of consumer behavior. New school: Consumers have the power.

Old school: Cold calls. New School: Social Media.

Old school: Huge slow moving entities. New school: Lean and agile.

Old school: Mimic successful traditional business models. New school: Disrupt.

Old school: Move slowly when making business decisions. New school: Adjust and implement on the fly.

Old school: Managers and Execs have all the power. New school: employee empowerment.

Old school: Traditional Advertisements (TV, Print, Billboards, etc.). New school: Social Media, Blogs, Online videos, Mobile, Podcasts, etc.

Old school: Power/Control economy (control every aspect of business). New school: Sharing economy.

Old school: Heavy investment in human capital. New school: Automate.

Old school: Cubicles. New school: Open.

Old school: Work harder. New school: Work smarter.

There are definitely more differences between businesses of today vs those of 10, 20, 40 years ago; however, these are the main ones I could think of off the top.  Obviously, each should be defined further but that can be done by researching the internet, going to a top business school, or hiring a consultant.  I do understand that few things in business still remain: bring in more than you spend, bottom line, good/great leaders, innovation, customer service -- to name a few.

If you have any others that I have missed, feel free to list in the comments section.  I'm curious to hear what others think.

Until next time.

ModernManTellsAll

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Business: You don't know my Industry

The misconception business owners have when dealing with consultants is the fact that they believe since said consultant does not work in their industry they cannot help them fix the problems that exist.  This may have been true ten, twenty, thirty, fifty years ago, however, in today's world, where everything/everyone is connected, information is easily accessible, the industry and competition can be researched and analyzed effectively and quickly; not having worked in an industry is irrelevant.  Furthermore, business is business and competition is competition, as long as thorough research has been conducted a consultant, or a competent consultant for that matter, should be able to identify the primary issues a company is having within two or three weeks, and design and implement a strategy a few weeks thereafter.  To be honest, in my experience the major issues that the majority of SMBs/Start-ups that I meet with and consult for are very similar with minor variances according to the industry.  For the most part the issues stem from fundamental business practices and processes: Lack of organization, lack of clearly defined goals (leadership), lack of data tracking, and lack of communication.

As you can see, these common issues have absolutely nothing to do with a particular industry or business.  The problem with a SMB or start-up that is experiencing growth, which is a great thing, is their resources get drained and everyone is consumed in the day-to-day and forget about or failed to implement the fundamental foundation of any successful business; and by the time a consultant is needed, problems have compounded to a point where a company can become essentially paralyzed.  That said, a professional, well-trained business consultant could easily rectify these issues rather quickly.  As long as the company leaders are in agreement, upfront and honest with the issues, and are willing to commit to a well-defined plan/strategy, things can turn around and the proper processes can be in place.  Just don't use the excuse of you do not know the industry, as that is of no use to anyone.

In my experience companies that are able to implement basic business processes prior to launch or within the initial launch phase are the most successful and are able to accelerate growth rather quickly.  I know the fun/glamorous part of running a SMB or start-up is working on something you are passionate about and with a team of people who share that passion; however, that high will only last so long before the company hits a road block (e.g. runs out of money).  As much as we all love to be in the trenches and creating something new and of value, without capital investments the product/service will not make it to market, or if it does the lifespan will be limited.

My advice to anyone in this position is to take the time to design and implement fundamental business processes prior to launch -- even before hiring.  At least have an outline of what processes are ideal for your company, and then hire someone to design and implement them.  Don't make the mistake of having the mindset of we'll fix it later, as it may be too late or you won't have the capital to allocate towards professional consultation.  There are many ways a consultant can benefit your SMB or start-up no matter what phase your company is in, all you have to do is find the right one and trust that they have the background and skill-set to get the job done!

As always, I'd love to hear your comments and thoughts on this topic.

If you are in need of any business and/or marketing consultation, feel free to shoot me a brief introduction note at: modernbizstraetgy@gmail.com.

Cheers,

ModernManTellsAll

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Business Strategy: Innovate

Innovation.  What do you think of when you hear the word innovation or innovate?  By definition innovation means a new device, idea, or method.  However, I, like many others, would say: Innovation, in business terms, is something that is tied to creating a new product, which is different from anything else on the market.  The iPhone, for example, would be an innovative product.  It changed the way we (humans) communicate with one another and interact with technology.  Everyone now has instant access to any information they desire, hundreds of thousands of applications that can perform any task and/or can "socialize" with a person(s) of their choice whenever and wherever they like.  This would be considered a radical innovation.

Innovation is most commonly tied to tech-based companies such as Apple, Google, Microsoft, Twitter, Samsung, Netflix, Amazon, etc.  Top 40 most innovative companies in 2014.  Companies that are driving how the consumer engages in their day-to-day lives.  Think of all the innovative products these companies have brought to the market in just the last 5 or 10 years.  Everything from iPhone, iPads, Google Glass, Samsung Smart Watch, Smart TV's, Nest, etc., and who knows what the next product will be.  The truth is technology, the way we know it today, is just in its infancy and will only become more advanced and integrated into our lives as time goes bye.

The above are all undoubtedly innovative companies and products, but does innovation only apply to these major companies or just in technology?  I'd argue most definitely not.  There are many other ways to innovate across all business units, and it does not apply only to a product or service.  Innovation can occur or be applied to anything from customer service, marketing techniques, business models, company culture, or overall strategy.

Customer Service is something all companies offering a service or a product engage in, no matter what the industry.  A company dealing in B2B or B2C must offer some form of customer service otherwise they would be unable to retain customers or garner new ones.  Take for example Time Warner's new customer service model - the one-hour service windows.  We all know the hassle of the four-hour service window and how inconvenient they can be.  In the past if you had a service inquiry you would get a time between 9am and 12pm or 1pm and 4 pm, and many times the technician would show up late or worse not at all.  This has caused a dramatic decline in their customer retention.  Well, to rectify this Time Warner has launched the one-hour campaign.  While this is only an incremental innovation it still is considered innovative.  Another example would be the banking industry.  I recently went out to inquire and compare small business bank accounts and found that the big three (Chase, Bank of America, and Wells Fargo) offer vastly different options, most of which are differentiated by monetary and customer service (incremental innovations).

Marketing techniques can also be innovative, and most of the successful brands have utilized this to capture market share and disrupt industries.  Think about all the advertisements we see on a day-to-basis.  Some studies have that number at anywhere from 250 to 3000 per day, depending on age group and where one lives.  This is astounding.  It makes one think how can a human brain digest and retain this mass inundation of advertisements?  Well, I'd argue it can't.   So how can a brand create a campaign that actually sticks in our minds and eventually persuades us to make a purchase - through innovative marketing techniques!  A brand that comes to mind (that is not considered a major global brand) is the Dollar Shave Club with their innovative and memorable ad campaign and video.  Although they did not recreate the wheel so to speak, they did use an innovative approach with a serious yet tounge-and-cheek style video, which intern caused the video to go viral and gain brand recognition.

Business Models, or how the firm plans on making money, is yet another way a company can innovate to gain a competitive advantage.  This to me is the most effective way to compete in a highly competitive globalized market place.  Not everyone has an idea nor the funds to create and implement a radically innovative product, however, if one can develop and implement an innovative business model they would have a fighting chance - even if they are offering the exact same product or service as the competition.  An example of this, again outside of the obvious major corporations, would be in my previous industry.  I worked in the music industry for over 6 years, and as we all know, the music industry is one of the most competitive and most effected by the advent of the internet, therefore competition is fierce with saturation on all fronts.  So how does one enter the market place and cause other, more established competitors, to notice?  By having an innovative business model.  There are a few that come to mind: one being Jingle Punks and the other Music Dealers.  Both of these companies entered the industry in 2008 and are now two of the most recognized in the industry.  What was their innovative business model you ask?  Well, they implemented a 50/50 business model where the artist splits the gross revenues 50/50 with the company.  Granted this is not a sustainable business model for any business in any industry; however, it enabled them to build their catalogs with above average content quickly - thus enabling their competitive advantage when marketing to and courting clients.

Company Culture is something that has been misunderstood and underestimated in the past, however, has made a rapid resurgence - becoming one of the most important factors for a business to succeed, garner market share, and attract top-level talent.  By definition company culture is the values and behaviors that contribute to the unique social and psychological environment of an organization. Many companies use minor incremental (sometimes radical) innovations in their company culture as a competitive advantage and to court and retain talent. A company that comes to mind is Zappos. They are known for their innovative cultural design which empowers all employees, encourages change and personal growth, creates a fun, light and positive environment, has an open horizontal structure, and has a list of core values that all employees adhere to. Their CEO Tony Hsieh has even written a book based on the importance of company culture called Delivering Happiness. Checkout their core values here.

Overall Strategy is something that all company's must consider, preferably prior to launching into the market, and should be monitored constantly and adapted as necessary.  By definition strategy is the quest to gain and sustain a competitive advantage.  Sounds simple enough, right?  Well, you'd be surprised how many companies (small and large) are lacking an overall strategy and are just "winging it" day by day.  A strategy is not just "let's make money".  It is the managers theories about how to gain and sustain a competitive advantage; How a company differentiates itself; What to and not to do, etc.  Furthermore, strategy is a combination of all of the aforementioned topics, and an innovative strategy is what separates a company from the competition.  A good and obvious real world example of this would be Google.  Google is by far the most dominate search engine with over 68% of the overall market share.  This is despite competition from Yahoo!, Microsoft Bing, and the Chinese search engine Baidu.  How can Google maintain such a dominant position in an industry where billions of people use the service on a day-to-day basis?  Innovative overall strategy!

As mentioned above, we are now operating in a highly competitive global economy and innovation is considered the most critical aspect of business moving forward.  It is no longer just a buzz-word, it is essential across all business units and industries.  If you're standing still, you're falling behind exponentially.


As always, I'd love to hear your comments on this topic, so please leave comments if you desire.

PS - If you are in need of any Business and Marketing consultation for your small to mid-sized business/start-up feel free to shoot me an email at: modernbizstrategy@gmail.com.

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Entrepreneur: Most valuable asset

Being an Entrepreneur or a small business owner is not for everyone, nor is it an easy thing to do.  If you ask 100 people what they would like to do with their lives, as far as who to work for/with (if they had a choice), over 75% would say for themselves.  Well, as we all know the majority of people do not become entrepreneurs or small business owners, although the numbers are higher than they've ever been due to economic reasons and the advancements of technology, which have made it easier and more affordable than ever to start and grow a business (if you have a well-defined plan and understand how business works).  According to Forbes, nearly 13% of American adults are involved in startups in 2012 (record high), and nearly 400 million entrepreneurs world-wide (54 countries).  These numbers are great news for the future of the global economy, not to mention the fact that entrepreneurs are ranked as some of the happiest people on the earth.  Do keep in mind that there is a difference between a small business owner and an entrepreneur, just because you work for yourself does not mean you are an entrepreneur.  That is another topic for a separate blog post.

So with that in mind, let's continue on to the topic of this blog post, "Most Valuable Asset".  What I'm saying here is: What is the most valuable asset to an entrepreneur or a small business owner, other than the obvious, capital, of course.  First, let's breakdown a typical scenario that virtually every entrepreneur or small business owner is in, or has been in at one point in time.  Typically a small business or entrepreneurial startup has access to limited resources, including people.  Most of the day-to-day operational duties would be/are handled by the owner or owner(s), with very little time to do anything else.  An entrepreneur or small business owner will work 6/7 days a week and any where from 12 to 18 hours a day.  Some of you just made a face as if your stomach just dropped, yes, this is true and necessary for the business to thrive and grow into a mature entity.  However, no need to feel sorry for these risk takers, as the long hours are typically well worth it for the sole reason that entrepreneurs usually love what they do and would rather be doing nothing else but running their business.

Now that we have a general overview of what it's like to be an entrepreneur/small business owner, what is their most valuable asset (other than capital)?  As stated above, an entrepreneurial enterprise typically will have limited access to resources, particularly people/employees, which brings me to the point I am trying to make, people are your most valuable asset.  And it's not just people in general, it's high quality people; people that understand what it's like to run a small business or startup - "go-getters" as they say.  It's not like a corporate gig where you work in one department and have one or two basic job duties and you work 9 to 5.  No, a typical employee at a startup will easily have five or more duties on a day-to-day basis.  Much of the time these duties will range from low-level intern/entry level type work, data entry, coffee, research, answer phones, etc.; to executing business / marketing plans, financial forecasting, business development, operations management, ordering supplies, traveling, etc., on top of working 12 - 16 hour days.  Sound fun?  Well, if so I'd recommend finding a startup or starting your own business.

My point here is this, not just anyone can fill these positions.  As an entrepreneur or small business owner, you are only as strong as your support (team) staff, whether it be 1 or 2 people or 5 or 6, you need high quality, motivated, intelligent, tech-savvy, diverse, individuals.  People that can multitask and add valuable input everyday, all day.  People that can think outside of the box and create new operational processes or marketing techniques and implement them on the fly.  This is your most valuable asset (people), so you better make sure they are appreciated and taken care of - even before your own needs are met, because once you lose a good one it is extremely hard to replace them - not to mention the loss in productivity, capital, and potential revenue over time.

As always, I'd love to hear your comments on this topic, so please leave comments if you desire.

PS - If you are in need of any Business and Marketing consultation for your small to mid-sized business/start-up feel free to shoot me an email at: modernbizstrategy@gmail.com.

Cheers,

ModernManTellsAll

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Business Strategy: True Company Identity

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I see this far too often when consulting and communicating with friends and clients who own/run startups and small to mid-sized businesses - NO true company identity.  The lack of company identity is at the top of the list when it comes to failing small businesses and/or start-ups, and should be addressed from the initial launch if possible, as the longer this goes on, the harder it is to fix.  There is far too much competition in today's global economy to not have a company identity. What I mean by true company identity is: What type of product/service do you offer?  How much does it cost?  Who are your target demographics?  Is your product/service of poor, good, or great quality (hopefully good to great)?  What type of culture does your company have?  Does the branding of the company portray what you do?  etc.  The point is, potential and current clients must be able to identify with your product/service quickly, so when they are searching for it they can immediately identify what it is you do and what your company is about.

Now, I understand the fact that running a small business or start-up is extremely difficult (I've been there) and it truly is survival of the fittest.  In order to make bills and bring in cash many owners become frantic and will except any and all work, service a diverse set of clients, etc., as long as they are comfortable doing the job, selling the product/service, etc. However, this is only a short-term strategy and usually ends up costing the firm in the long-run.  For instance, let's say you have a small business with 5 or less employees, including you.  This is not a lot of people and one would assume your access to resources such as capital are minimal to nonexistent; therefore, everything you do needs to be calculated in such a way that nothing is going to waste (time, money, people, etc.).  Granted this is a lot easier said than done, when the reality and fear kicks in and you need to make X amount to make rent this month, things begin to scatter and unravel.  I'm sure many of you have been there, as I've seen it one too many times.  This is the reaction of a small business owner who has failed to create, implement, and communicate a true company identity prior to all the panic and fear setting in, I call this " survival mode", doing anything at all costs.

The problem with lacking an overall company identity, as stated above, is the issue of panic and fear will be reoccurring.  Yes, you may have a good month or two and think to yourself (or thank higher power) your problems have been solved.  Well, chances are this will happen again and again, and you will have a bad month or two in a row, then what?  The reality is, yes, you took in any and all jobs that you and your employees skill-sets can handle, however, your company is still lost and new and potential clients will not find you if your brand and company is all over the place.  So make sure  when it comes to true company identity you have one.

A new start-up or small business does not have the time nor the resources to continue down this path, so make sure your next venture, or this one, has been branded as such that it can be easily identifiable  to everyone - exactly what you do, your product/service, etc.  And once its identity has been determined commit any and all resources towards securing a favorable market share in that space.  Once a desirable market share has been obtained, then, and only then should you attempt to extend your product/service line, target markets, etc.   This is not to say, a company should not be thinking ahead and working towards a viable and sustainable vision for the company at all times; or taking on jobs that are not in line with the identity; if you have the time and resources by all means take on the work as long as it's not obstructive to your day-to-day operations.  And if you have dedicated yourself and your company towards this identification and things have not gone as planned, then adjustments need to be made accordingly.  However, I firmly believe that if a company has done its research and its leaders have properly created a true company identity, all resources are dedicated and focused on obtaining market share in that space, the company has positioned itself for success and a chance for survival, at least throughout the growth phase.

As always, I'd love to hear your comments on this topic, True Company Identity, so please leave comments if you desire.

PS - If you are in need of any Business and Marketing consultation for your small to mid-sized business/start-up feel free to shoot me an email at: modernbizstrategy@gmail.com.

Ciao,

ModernManTellsAll
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Marketing Strategy: To social media or not

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To use social media or not?  This is a question virtually all firms (small & large, public & private) in all industries should be asking themselves, and if they are not, they better start.

Flashback 10 years (web 1.0) ago and this question would not even had been an after thought, as many of the top social media applications did not even exist, or were barely in their infancy.  That said, some people/firms did see the advantages and effectiveness of what social media channels, namely Facebook, YouTube, and more recently Twitter, have to offer, enabling the competitive advantage of a having a head start.  The numbers alone on Facebook, Twitter, and Youtube were/are hard to ignore, even 5 or so years ago.

Now, in 2014, or web 2.0 as they say, the numbers are impossible to ignore, where YouTube now gets over 1 billion unique visits a month and 100 hours of video uploaded per minute! Facebook has well over 168 million unique visitors per month.  Twitter has over 48 million unique visitors per month.  LinkedIn (my favorite) is now at over 38 million unique visitors per month.  Pinterest now has over 38 million unique visitors per month as well.  Tumblr is now at over 24 million unique visitors per month.  Instagram has well over 200 million unique visitors per month.  Google+ now has over 105 million unique visitors per month.  There are countless other social media platforms out there, with new ones popping up everyday, however, many do not last, nor are worth spending valuable time and money on.  That said, the above are all well established social media sites, I did leave out Vine, which can be considered as a viable option as well, but not one for the majority of people/companies reading this post.

OK, so we know there are billions of people across the globe scouring the aforementioned social media sites, so which one(s) do you use?  Yes, it can be overwhelming when sifting through the various options social media has to offer, and they all have their own unique functionalities, audiences, communication techniques, etc.  For instance, not everyone that has a Facebook account will have a Twitter account; or someone that's on YouTube and Instagram may not use Pinterest, etc.  Therefore, a company must decide which social media platforms are the best options for their company and industry.

Choosing the right social media platform(s):

First of all, a business owner/marketing manager must ask the important/critical questions: Which social media platform(s) will garner the highest ROI?  What social media applications are my target audience(s) using at this moment?  What is the best way for the firm to go about courting new potential consumers?  What type of product(s)/service(s) does your company sell/offer?  What are the most effective communication techniques to apply on each individual platform? How much time/resources do we have to allocate towards social media? Etc.

Once the target social media platform(s) has been identified, then, and only then, should a strategy be developed.  But first, the business owner/marketing manager must become accustomed to the functionalities and nuances of the platform(s), and if they are not they should (must) find and hire someone that is well versed in social/digital marketing.  Some companies can get away with hiring social media interns as this is was common place a few years back; however, I would not recommend this as many times these interns will lack the awareness and knowledge of your industry and by the time they learn and understand it they will be long-gone; or they only make it a week or two and then you have to find another.  This process alone can prove to be quite costly, not to mention wasting your valuable time.  Nowadays, many colleges and universities are providing majors in social media/digital marketing, or at the very least, are incorporating social media/digital marketing classes into their Marketing programs.  I know when I was pursuing my MBA (as a Marketing major) at Northeastern University, we were required to take a digital marketing class, which proved to be extremely valuable.  As I stated above, all the social media platforms have their own ways of connecting and communicating, and not understanding this will result in a huge waist of time and more than likely - capital.

Moving forward, now you (or someone that does) have a firm understanding of which social media platforms work best for your company and the industry you are competing in.  Furthermore, you have analyzed and done some research on how they function and the nuances of how to communicate.  It is a great idea to checkout your direct competitors to see what they are doing (as far as content) and how they are gaining followers (potential customers), and which social media platforms they are using.  Usually this is a good indication of which ones work best, particularly if you pay attention to industry leaders that have a large number of followers and likes/shares.  Now it is time to develop an Integrated Marketing Campaign/Strategy, which is an entire different topic, and should be done by a trained professional or under the consultation thereof.

To Social Media or Not:

So the question is, to social media or not? Considering the alternative, I'd say it is not only wise to begin (if you have not yet) implementing a social media campaign (even if it's just an individual platform), but also is necessary if you plan on growing your business, increasing brand awareness and market penetration now and well into the future.  Not to mention the fact that social media is a great and affordable way to be creative and brand your company to your liking.  That said, if you are clueless as to how to utilize social media, or do not believe it is effective, I would recommend speaking with a marketing professional(s), researching online blogs, articles, competitors, etc., prior to allocating time during your work day to figure it out or "play around" as it can be extremely time consuming - hours could go bye before you even realize how to post a proper "Tweet".  In closing, I believe social media, when utilized properly, with an effective Marketing Strategy, is the most efficient and effective marketing tool to be implemented to date.  And as time goes bye this "web 2.0" is only going to grow exponentially, so to answer the question - YES, you should start using social media and get connected to your customers ASAP.

I'd love to hear your thoughts on this, so please do not hesitate to leave comments - I'll read them all!

PS - If you would like consultation on the implementation of social media and Marketing Strategies, feel free to email me at: modernbizstrategy@gmail.com.

Cheers,

ModernManTellsAll

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Business Strategy: Know your competition

There are many articles online (LinkedIn, independent blogs, etc.) and in informative magazines and publications (Entrepreneur, WSJ, Harvard Business Review, Fast Company, Text Books, etc.), which will tell you how to run a business, manage a start-up, what to do, what not to do, etc.; however, I'm going to tell you, it is just as important to know and understand your competitors.  It amazes me that in this day and age, where the global economy is fully entrenched in all industries, information is readily available and accessible to all - many companies still choose to operate as if they were the only firm in that industry.  You can have the best business plan in the world, but, if you are unaware of the competitive landscape (who your competitors are and what they are doing), that amazing business plan may be all for not.  You may even risk the possibility of a savvy (established, innovative) competitor, who is aware of you and your business model, to copy and implement it before your business even has a chance to get off the ground.  

I would like to introduce and explain some realizations that have come to my attention along my professional career and as I was perusing my MBA from Northeastern University.  

Global Economy:

The first of which is obvious but should not be ignored or discredited, the fact that we are now in a global economy, every industry is experiencing increased competition, and as the years go bye it is increasing exponentially due to third world countries, namely the BRICS nations; all of which are experiencing emerging economies as their access to resources and technology grows.  Many of these countries operate under their own proprietary laws and, maybe more importantly, have access to cheap labor – enabling companies to make products which are similar for much cheaper than in established 1^st world countries. 

Access to Technology & Lower Barriers of Entry:

Access to technology and lower barriers of entry go hand-in-hand as the former enables the latter.  The access to technology has essentially leveled the playing field when it comes to competition.  A small independent start-up now has the potential and access to the same technology as a major firm, which was not the case 10 or 20 years ago.  For one, technology (computers, internet, marketing channels, etc.) came at a much higher cost in the past.  Now the majority of people/businesses are able to purchase a computer and the internet, build a website, and market their product all with minimal capital investment.  A first-hand example of this would be the music industry.  The music industry was really the first to feel the effects of this in the early 2000s with Napster and other file sharing platforms, which essentially destroyed the major record labels.  I’m not saying whether this is or is not a good or bad thing, as the record labels failed to adapt and innovate quickly to the changing landscape; therefore it was of their own doing.  Fast-forward to today, where now every artist, composer, band and record label (large and small) has access to the same technology and clients for that matter, making for a highly competitive market place.  Furthermore, lower barriers of entry (affordable hardware and software) have been a major factor as well in regards to increased competition. Although the music industry was the first to be hit by this phenomena, it is a reality for all industries, and business owners must take notice.

Access to Information:

Access to information coincides with the above as it is technology based, however, it deserves its own explanation due to the fact that it is still fairly new and very important when analyzing and understanding your industry's competitive landscape.  In the past companies would have to rely on “insider” data or having to wait for a particular competitor’s TV/Print Ad to air, well that is no longer the case.  Now everyone has instant access to all the vital information they need – including websites, financial data, marketing techniques/strategies, operational methods, personnel, territories, etc.  Everything can now be accessed via the internet by searching company names, industry related keywords, social media, etc., so there’s no excuse not to “do your homework” (you may actually come up with an innovative idea along the way) and research as much as you can about what the competition is doing – smart companies are doing it everyday so don’t wait!  

Conclusion:

All of the above factors have led to increased competition and, in many cases, market saturation.  This trend will only continue as more and more countries and small innovative start-ups enter the global economy.  This does not mean that starting and/or running a business is not a good idea – quite the contrary, as it is a great idea (for certain people)!  The costs to start and run a global business is at all time lows, at least for those that know and understand how to leverage the above factors to their benefit.  Those that do not, and are stuck operating in an outdated business model will not survive in today’s world where you are either in the lead or falling behind.  And when you fall behind it can drain capital quick as you try and catch up - and when you do catch up, the competition may have already moved on to some other innovative business model or product/service.  Everything moves fast, including your competitors, so don't assume you are the only one out there, or implementing these techniques.  Remember, always try and stay in the lead or at least a close second.

PS - If you are in need of any Business and Marketing consultation for your small to mid-sized business/start-up feel free to shoot me an email at: modernbizstrategy@gmail.com.

Enjoy the ride!

ModernManTellsAll

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Entrepreneur: Choose your Business Partners wisely

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One of the most important and critical decisions you will have to make when starting a business is who to partner up with.

There are many reasons why or why not to choose someone, some more obvious than others.  This blog is intended to breakdown what I believe are the five most important factors to thoroughly analyze and consider prior to moving forward with a decision. 

So you have a great idea for a new business, whether it’s an incremental innovation on an existing product or business model; or one that is brand new and/or is radically disruptive, chances are you wont be able to do it on your own, and I would not recommending doing so.  Therefore the question is: who’s the best man/woman to approach? 

Most people's first instinct is to work with someone that they know very well (friend or family member).  This may seem logical (initially) assuming you get along with this particular person(s), have known them your entire life, share the same interests, etc.  However, there is much, much more to selecting a business partner other than how well you know or "think" you know them, as things/people change when other variables enter the "frey" (e.g. money, egos, growth path, vision, exit strategy, personal goals, equity share, personal life, etc.).  As a matter of fact, choosing a business partner is kind of like dating (per say).

Personality:

Running a start-up is a roller coaster, you will experience many highs and lows, ups and downs, so you'll need someone that can roll with it and not let it bother them too much.  In fact, it is good to have someone that can make light of the situation (as long as it's not too serious).  Furthermore, their personality should complement yours, just like in a relationship you need balance.  If you're personality is super outgoing and forward, you'd want someone that is more laid-back and reserved. Everyone that has been involved in a start-up will tell you there are always issues and when there's not, there's one right around the corner; so you want to be able to rationally discuss the strategy on how to fix the issue with someone, and keeping the atmosphere light is extremely helpful.

Reliable:

This one is very important, particularly to me as it's a pet-peeve of mine.  It really irritates me when I am supposed to meet with a client or business partner and they are always late - time is precious to all of us as life moves very fast, especially in today's world.  The last thing you would want is to start a business and partner with someone who can not manage their own time.  To me this is a HUGE red flag.  As I stated above, when running start-ups issues are always showing face and when they're not, one is right around the corner.  Imagine how frustrating this would be if you had to handle the majority of them on your own, or had to wait to hear from your partner who is nowhere to be found.  This can sour a relationship/partnership quickly, not to mention the waste of time and capital - I've seen it first-hand.

Knowledge/Intelligence:

What I mean by this is, you want to partner with someone that either/or has knowledge of the industry and current landscape you are planning on entering and competing in; and/or has knowledge of some other aspect of the business which you are not an expert in or have little knowledge of (e.g. marketing, operations, sales, strategy, etc.).  Again, forming a business partnership is usually a long-term commitment and you want both partners to provide valuable insights consistently, and coming from a different perspective is always helpful.  Intelligence simply means that as described by its definition - the ability to learn and understand things; nothing is worse and more frustrating than dealing with incompetence, particularly in a business partner let alone an employee.

Resourcefulness:

This one is also extremely important, especially when launching a start-up, and as technology continues to take over all businesses, large and small.  When choosing your business partner you want someone who has a large diverse network and understands how to maximize its potential.  The majority of start-ups are boot-strapped and have minimal expendable capital to allocate to other resources other than immediate needs for day-to-day operations; thus the importance of having access to a diverse network.  Just as an example, you will need legal contracts drawn up; well these can be quite costly if you go in cold and do not know someone or someone who knows someone.  A friend of a friend may refer you to an attorney friend of his/hers and they may offer a discount or even pro-bono, who knows.  Further, there are countless reasons to contact people outside of your immediate circle, and with social media a diverse network is now more accessible than ever - easier to connect to professionals in all walks of life.

Vision:

When I say vision, I mean the vision of the company; does their vision coincide with your vision?  Where do you and your business partner envision the company being in a year or two or five?  What is your goal?  To build and sell quickly?  Grow organically and commit to a long-term plan?  License out the technology or product?  Bring in outside investors?  This is something that should be discussed at length prior to committing to an agreement with a potential partner.  If your vision conflicts with your potential business partner's, the relationship will go south very fast, and more issues will arise and compound - turning a potentially successful business into an unsuccessful one.  Furthermore, it is good to discuss the "what ifs".  What if this happens, what do we do?  What if that happens? etc.

Conclusion:

In the end, you want to work with someone that is not necessarily your best friend, but someone that understands what it takes to make a business successful.  You want someone you can depend on, bounce ideas off of, provides valuable insights, can laugh and keep things light; someone who is flexible and not hard-headed, is highly competent and can maximize their resources effectively and in a timely manner.  For the record, I left out an obvious one - TRUST - on purpose, as it is applicable to everything you do in life; if you don't trust someone, you should keep them at a distance, and definitely NOT do business with them.

This is my first independent blog so I know it's not perfect, but I enjoyed it and there will be more to come, along with some posts from other friends which I trust. HA!

Feel free to leave comments as I'm very interested in hearing what you have to say.

PS - If you are in need of any Business and Marketing consultation for your small to mid-sized business/start-up feel free to shoot me an email at: modernbizstrategy@gmail.com.

~Peace

ModernManTellsAll

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