SAMBA Blog

Live is Special

The Web as we know it today is almost completely real time and live. But it isn’t there yet. When it gets there, we’ll see another explosion of value created for the world and new business models that work.

Look at television for some important parallels. Most television programming is not live. Studios plan something, test it, edit it, produce it, and then show it. But audiences are really drawn to live programming. We care more about live news, especially when it is on location and something exciting is happening; hurricanes, elections, interviews with celebrities, etc. Or we pay a premium for live events, pay-per-view sporting events or concerts. Even the popularity of reality shows can be partly explained by how closely they feel to being live.

But television is a one-way medium. The Web changes the whole game because it can flow two ways, or three, four, eighteen, four hundred and one, even a few thousand ways. And it can flow so many ways live.

So why don’t we do live more often? Live is expensive. Live is inconvenient – everyone has to congregate at the same time. Live is exclusive. Live is premium. It isn’t for everyone. Live works best for those with an audience that wants to engage on a deeper level. It works for those individuals and organizations that want to make their most valuable relationships feel even more appreciated. Live works best when you want to behave like you do in real life.

This is it.

Often times it appears that what gets us to make the biggest changes in life, is some major unexpected event that pushes us over the edge.  For example:

• You decide to quit smoking, when you find out your uncle has just been diagnosed with cancer.
• You finally start a business only after you're layed off by your employer of 20 years.
• You revamp your entire diet, immediately after your last physical reveals you're dangerously close to a heart attack.

It seems it was the event that sparked the shift.  But that's just not true.  These incidents didn't cause you to change.  YOU caused you to change. 

The event was simply an excuse you used to make the change that you've been contemplating making for some time now.  It allowed you to finally give yourself the permission to make changing an urgent priority.

Now, something tells me that there's a change you've been thinking about making.  And the problem with waiting for a major unexpected event to happen, is it simply might never happen. 

And you don't need an excuse to change.  Change is a human right. 

But just in case you did need some type of unexpected event...something to use as an excuse to change...this is it.

 

The Last Inch

Sales is a fascinating subject. You can get inundated with material about qualifying, prospecting, small talk, confidence, opening, handling objections, spinning stories, asking questions, etc. Let's not forget closing - always be closing.

We spend an inordinate amount of time, energy, and space talking about closing. Rightfully so, we focus on getting a customer to sign on the dotted line.

That dotted line, no more than a few inches long is the final destination of a long sales journey. Customers' hearts beat faster as they approach the last inch. Their breathing changes. Some sweat. A very real physical change or turbulence sets in, however short lived that might be.

When that moment of truth nears, your job is to make the prospect feel either very very uncomfortable or very very comfortable. If you haven't changed his physiology enough, he will likely not be closed.

By uncomfortable, you're creating an emergency, a sense of urgency. You're playing on scarcity and the human desire not to miss out on a good deal.

By extreme comfort, you're creating a situation of familiarity. You're almost a friend, or at least a friendly face. Or you've painted your solutions to his problems as so natural and insignificant a buy.

Just don't live in the middle with unchanged customers. Always seek to change your customer.

Six Month Alternative MBA Recap

Today we officially graduate as the inaugural SAMBA class 2009. We now understand presentations, marketing, selling, spreadsheets, equity, and the ability to tell a story. We've figured out how to launch a project, invent a business and connect with customers, suppliers and people who matter.

We came together as 9 strangers with unique backgrounds from all over the US. We are leaving as friends, world changers, status quo challengers, community creators, thinkers and doers. We each have compiled a 'graduation speech' reflecting on the past six months:

Al Pittampalli - How to Start a Business That Works
Clay Hebert - A Life Changed
Emily Kate Boyd - SAMBA: The Lessons of a Six Month MBA
Ishita Gupta - Lessons I’ve Learned (and am Still Learning) from the Last 6 Months
Jon Dale - SAMBA Yearbook
Rebecca Goldstein - SAMBA: My Roller Coaster Journey
Susan Villas Lewis - The Bald Guy in My Head
Allan Young - Check back...Coming Soon
Alex Krupp - Check back...Coming Soon

Seth, our Cafeteria Supervisor, Dean and Chief Lecturer has been more than generous in giving his time, energy and insight to us over the past six months. We are eternally grateful and hope to make him proud by making a difference in the world.

The official Six Month MBA class may be complete, but we are not saying goodbye! We will continue to blog on sixmonthmba.com. More good things to come!

L-R (Jon, Clay, Ishita, Seth, Susan, Rebecca, Al, Alex)

How to start a business that works

The most important thing I learned in business school is this:

Most businesses fail. 

Not because the product wasn't any good (in many cases the product is amazing).  They failed because not enough people knew about it.  In other words, the marketing failed.

In fact, 6 months with Seth Godin has made me realize that not only is marketing important, it's pretty much everything.  Therefore, don't do what most entrepreneurs do:  come up with a brilliant idea for a product, fall in love with it, and then try to market it.

If you want a high likelihood for success, start by picking a business or product that lends itself to great marketing.  But how? 

Well, luckily I've created a set of 4 marketing questions that can help you.

So, if you're serious about starting a new business or developing a new product for an existing business, here's what I want you to do:

1. First, read the 4 questions and their explanations below (and it wouldn't hurt to read the books I reference either)

2. Come up with a list of 50 business ideas (sound like alot?  here are 999 to get you started).

3. Pick the 3 businesses that best answer the 4 questions below.

4. Of those, pick the one you're most passionate about.  

5. Execute, execute, execute.

Ready? Go!

Does your business lend itself to virality?

Everybody wants their product or brand to go viral.  Who wouldn't want exposure that spreads like wildfire?  But most companies' strategy is to build a product first and then try to come up with a campaign that will make that product go viral.  This couldn't be more backwards.

Of all the products and campaigns in the world, only a small number are actually successful in going viral.  And since virality is priceless, it could be worth organizing your entire business around.

If you want your product to go viral you've got to first think about what types of things make an idea spread in your target market, and then pick a product/business that has those qualities.

(Online greeting cards are a perfect example of products that are designed to go viral --but don't pick them...there are too many already.)

I would explain the specific qualities that help make a product go viral here, but I can't do a better job than Seth does for FREE (Unleashing the IdeaVirus). 


Does your service create an emergency?

You make money when sales are made.  But in order to persuade someone to buy anything, first, you have to get their attention.  Any salesperson knows that this is often the hardest part. 

Therefore, wouldn't it help to sell a product that creates an emergency for the person you're selling to?  Something that is likely to demand their attention immediately?

Get Satisfaction's service creates an emergency right away.  They host a centralized forum where consumers can discuss complaints about companies and their products in order to receive "people-powered customer service".  Often, heated debates rage on their site about the company's product.  The only way for that company to take full control of those conversations is to buy Get Satisfaction's service.

When Get Satisfaction makes a sales call, they don't have to fight as hard for the customer's attention as other companies do.  Get Satisfaction doesn't have to convince companies there's going to be a fire, there's already one raging that needs to be put out!

The key to creating an emergency is leveraging scarcity.  Why would anybody buy your product now, if they could just put it off for another 6 months, without any consequences?

Pick products that lend themselves to expirations, deadlines, and limited availability, that allow you to create a sense of urgency for the buyer.


Is game theory on your side?

Have you ever looked at a company like Google or Facebook, businesses that totally dominate their markets, and think "they must know something that I don't."  They might...it's called game theory.

You may have been bored to death in school learning about a hypothetical scenario called Prisoner's Dilemma, wondering what the heck it had to do with anything.  Well it turns out it's more important than you might have ever imagined. 

There are a ton of insights that result from game theory that aren't necessarily intuitive, but are wildly important in business.  Game theory is the essence of strategy and it could help your business scale exponentially by allowing you to outhink your competition.

For example, there are many products whose benefit to the customer increase as more people use them.  So from a game theory perspective, existing customers have an incentive to get their friends to adopt the service too. 

When businesses that operate with this simple principle grow, they tend to grow at an explosive pace.  And who wouldn't want that for their own business? (Skype is an example of a service like this).

Learn game theory, appreciate it, and then pick a business where the game theory is in your favor.  (There are a bunch of good business books on game theory.  Google it.)


Is your story remarkable?

Your product might be great, but is your story?  Remember, there are tons of great products that no one talks about, and therefore no one knows about.

That's because what makes people talk is the story that a product tells (or the story you tell yourself when you buy a product).  Tom's Shoes didn't spread because their shoes are the best on the market.  They spread because of their "One for One" philosophy.  For every pair of shoes you purchase Tom's gives a pair of new shoes to a child in need.  And the best part of their story is that it's the exact same pair!

Here's a secret to having a good story.  Stand for something.  Pick a product associated with a movement of some sorts.  A movement that people can contribute to, feel apart of, and get passionate about.  Change the status quo.  People like to talk about change.

When choosing a business, try not to get so caught up with the features and benefits.  These are clearly important, but what is even more critical is choosing a product with an incredibly unique, authentic, and remarkable story.



And so I'm back to my original thesis...the most important part of building a business is picking a good one to begin with.  But the second most important part is simply to start.  You can't build a successful business if you don't begin the process.  So what are you waiting for?

 

Surf company

Last week, I wrote an email to a friend who is visiting Costa Rica and is going to try surfing. As I crafted the email, I thought of three key similarities between surfing and starting a new business.

Conditions are critical
SURFING:
Even excellent surfers can’t surf when the water is flat. On a day with perfect waves, even amateur surfers catch a few good rides. (On rough days, you can spend 80% of your effort just paddling to get into position.)

BUSINESS:
When market conditions are perfect, even average businesses can succeed. When conditions get worse, only the very best can thrive.

Experience trumps tools
SURFING:
Experienced surfers can make do with average equipment, whereas rookies aren’t helped by a brand new surfboard.

BUSINESS:
A spreadsheet does not make someone a financial analyst. Keynote does not make someone a good speaker. A twitter account does not make someone a social media expert. Good tools reward experience.

Timing is everything
SURFING:
Paddle too early and you’ll burn out when the wave comes. Paddle too late and the wave will pass you by.

BUSINESS:
Burn through your cash too early and you won’t be around to sustain the tough periods. Wait to long to change your business due to an industry paradigm shift (like the end of traditional publishing) and you’ll be left underwater.

Take a Walk

Wait for the fat pitch. That's what great baseball hitters do. The fat pitch is one that is so juicy and perfectly served to you that you can no doubt take a swing and hit a homerun.

Fat pitches don't come often. Life is a cunning pitcher. So good hitters don't swing at everything. They pass on dozens of balls, take walks, and just wait for that one perfect fat pitch.

The point is to be selective. Every pitch that comes your way looks tempting. But just as you swing at one, it curves a little and the best you can do is hit a lazy and easily caught fly ball. Wasted effort.

Entrepreneurs can be good hitters or bad hitters. The good ones pass on opportunities all the time. They only swing on HUGE opportunities.

Using a social media framework to grow your tribe

It takes two things to have tribe: a shared interest and a way to communicate.

When you gather people together with a shared passion and give them the tools to communicate - amazing things will happen. People are incredibly inventive and you'll be surprised and delighted by what occurs when you just give people a way to connect.

The tendency is to focus on leveraging the tribe to make it grow. But I've found that giving the tribe ways to turn their shared interests into passionate goals and providing them the tools to tighten their communications are the most effective ways to strengthen the tribe.

The following framework has been very helpful to me when working with clients on a social media strategy to help them build and grow their tribe.

(My original inspiration for this framework came from Chris Brogan's post here. Chris is a rock star and if you don't read his blog already, you should.)

I describe a social media framework as having four main components. A listening station, passports, embassies and a home base.

Listening Station
The listening station is where everything starts. First you have to know what is being said about you throughout the web. A well equipped professional listening station will include tools from companies like Radian6 and Scoutlabs. The truth is you can get pretty much everything you need with free tools like PeopleBrowsr or Tweetdeck and Google Alerts.

Example: Currently, I have google alerts letting me know every time someone posts something about me online and I use PeopleBrowsr to for real time monitoring for mentions on twitter, YouTube and facebook.

Passports
Passports are profiles you'll want to have so that you can easily take part in conversations that you may pick up on with your listening station. You want to have passports in place for all the major social networking sites, even if you don't think you're going to engage in all of them. You want to make sure that if a conversation starts that you would want to be part of, you already have your profile in place. Later, we'll talk about how your fans can use their passports to help spread the word about your tribe. And sometimes you'll decide to turn passports into embassies.

Example:  Even though Seth doesn't use twitter actively, he does control @sethgodin.

Embassies
Embassies are microsites on  social networks where you are actively engaged. Just like a country does business in embassies located in other countries, you will fully engage in conversations in your embassies on other networks. The most obvious examples of an embassy is a Facebook fan page. Increasingly my clients are setting up full fledged embassies on Twitter as well. Your interactions in your embassy will be split between actively engaging people and gently nudging them towards your home base.

Example: AT&T engages actively with customers, answering questions and providing support on their facebook fan page.

Home Base
Your home base is where your true fans gather. For some people like Seth and myself, this is a blog. But many of my clients are taking this to the next step and have a full featured community for their fans to engage in.

Example: Dan Miller's fans connect with Dan and each other at 48 Days.

The free prize
Once you've got a tight tribe you'll find that with very little encouragement the members will take their own passports and go out and become evangelists sharing your message with their sphere of influence.

Example: Justin (someone I don’t know personally, but would like to consider a member of my tribe) sent a post of mine to his friend Maureen (another person I do not know, yet a potential future tribe member).  Maureen then posted a link to my blog on her blog/home base: maureencrisp.blogspot.com

Added bonus of the social media framework

Having this framework in place makes it much easier to know what to do when a new social network appears.

(Disclosure: PeopleBrowsr and Dan Miller are my clients)

Tattered Fields of Glory

Players rush to the sidelines during economic downturns. No one wants to spend money. The name of the game is to hold tight and conserve cash. No one dares to call a bottom and I don't blame them.

But we all know that fortunes are made during recessions with new innovative ventures - think Google, FedEx, Microsoft, and General Electric. We all know this. But fear prevents us from doing what we know is best. Best doesn't mean easy.

The point isn't to save what's left of your company as you know it. Of course you shouldn't behave like business as usual - that would be crazy. In fact, your current business probably has to shrink permanently. What worked in the last cycle won't work now.

The point is to use some of that dry powder you've been saving up. Experiment with relatively small sums on new ideas. The cash it takes to preserve or maintain status quo weighs a ton. The cash it takes to launch that project you've had in the back of your mind, a relative drop in the bucket. Almost pain free other than the fact you have to move off the sidelines back into the game.

David Chose to be Goliath

The difference between an entrepreneur and an hobbyist?

Not much really - we're all living the life, living the dream.

Really only two things, but they are huge.

An entrepreneur is someone who can sell. He gets paid for doing what he likes because he has overcome his internal resistance to selling. Some hobbyists get paid but most don't. They don't know how to sell well.

The other thing is the presence of a sound scaling strategy. The entrepreneur wants to grow the business. He is looking for any angle that allows his company to leverage anything other than himself. After all, he's the only one that cannot be duplicated. You can duplicate and stock up on car mechanics, accountants, sales representatives, customer service representatives, assembly line machinists, doctors, lawyers, graphic designers, whatever have you.

The hobbyist doesn't care or doesn't understand scaling effects.

Couple these two simple requirements together and it makes a world of difference. One guy runs a bodega on the corner. The other guy invented 7-Eleven. One gal runs a boutique in the East Village and the other gal built The Gap.