Always treat your employees exactly as you want them to treat your best customers

October 30, 2009 Leave a comment

- Stephen R. Covey

Too many entrepreneurs will take great care of their key customer but will often negligent in regards to their employees. What does not make sense is that you can’t actually serve your customers well without your team. So as much as you worry when a customer is not happy or are afraid that he might purchase your competitor’s product – you should do the same with your employees.

Are my employees happy and motivated?
Don’t just do a survey, make sure that each and every employee are happy and motivated about the work they are doing for your company. Just like you have account managers for your esteemed customers, you need “employee” managers. These managers need to be both your middle management as well as investing in HR management (yes HR is not just for hiring and firing people).

Maximize employee retention
Again, we worry about customer retention and we need to do the same with our staff. We should know exactly why someone leaves and go to work for someone else. Each departure can send a message to the market about your business. Regular 1:1 employee meetings are important just like you have regular customer calls and meetings.

Move at the speed of your “customers”
Would you refuse to sell to a customer because he wants to buy to quickly? Would you be happy if you would lose customers because your sales process is too complex and long for them? Of course not. This also applies to your hiring process. You need to move at the speed (within reason of course) of your employees and not let a lengthy process make you lose top talent. Its a sellers market right now and key employees won’t hang around for you to make up your mind about hiring them.

Bottom line, look at each of your current and potential employees as a customer base that you need to cater to. Of course, you’re still the boss but caring and authority can successfully co-exist.

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Don’t let anecdotes run your business

October 29, 2009 Leave a comment

Don’t you love the excitement when you land a brand new deal?  The company is a big player in a market you never addressed before. Your current product does not do what they need but with a few extra efforts from the development team, you could. This is too good to pass up. The sheer excitement of having found the next big market for your business…

One deal does not make a trend
Entrepreneurs should never let anecdotes run the business. Yes these one off deals can be exciting and very profitable on an individual basis. But does this mean that you just entered a new market. As an example: if you are building a software for architectural design and it happens that one dentist purchases your solution, does this mean that you can stat selling to the dentistry industry? Of course not. While this is an extreme example, anecdotes do not make for real market trends – or new market opportunities.

Can you repeat more than once
Ok lets say that you truly believe that this is a new trend or a new market, how easy would it be to sell exactly the same solution to more than one customer? If you can actually do this many time, then great; perhaps you have stumbled into a new market. If you product needs to have new features for each new potential customer, then you are blind being led by a blind. Step back from the excitement and try to be realistic on your ability to repeat a deal many times without requiring extra product development work.

Adjusting a product to a new market
So if you can’t really repeat the anecdote that easily, you need to evaluate if this is a market you want to enter. This is where Product Validation is a key element in determining if you are on the right track. IF you are able to define a feature set and competitive positioning that will allow you the successfully build a product for more than one customer, then maybe it’s worth the time to investigate.

But in my own experiences, anecdotes are usually just that – nothing more. So you should set a limit on the number of anecdotes you try to nail in a given time; even better if you decline to steer away from your plan. Of course, some people might just call this FOCUS.

Filed under Business Principles, Marketing, Product Management, Sales Tagged with , , , ,

The art of building hype

October 28, 2009 Leave a comment

Nothing is more exciting as having lots of industry and media hype when launching a new product. But how do you get this hype? How can you get lots of people to generate momentum around your release, giving you the ultimate result in demand generation? As an example we will look that the current media coverage that Apple is getting on a product that is not even 100% sure they will ever launch (a.k.a. Apple Tablet).

Identify a market problem

Is there a fundamental market problem that your new product will resolve? What are the specific customer pains that you will be addressing? A company can talk for weeks and months about market problems without having to say what you will do about it. This is key in creating a position for your business – even more when a market is already crowded. Being effective in creating a gap in a market will be highly efficient in demand generation as you prepare your launch. Last April, Apple’s chief operating officer Tim Cook, took some sharp jabs at netbooks: “For us, it’s about doing great products,” Cook said. “When I look at netbooks, I see cramped keyboards, terrible software, junky hardware, very small screens. It’s just not a good consumer experience and not something we would put the Mac brand on”. You already know how they will differentiate themselves IF they were to enter the market.

Line up (and align) your messages towards the big day

Be consistent and coherent in your messaging. This goes for all channels you will use for communication (including employees tweeting). Each message should build on what was previously announced or talked about. The clearer the path towards an “obvious” product release, the more hype you will get. In the case of Apple, there is a lot of people that follow their patent portfolio as well as all the other actions they are doing (and sometimes not) such as iTunes LP, rejecting all ebook apps from the App Store or Steve Jobs being personally involved in the development of a “new” product.

Social media is great for the rumor mill

In today’s world, there are many tools available with Social Media that are immensely powerful in generating demand. And since anyone can write anonymously, it does not take much to have people spread positive rumors that support your official channels. Get your customers and market to discuss potential new product releases. This can also be done with industry driven discussion forums or communities. As well, pre-disclosing the media under a controlled embargo can be quite powerful (“I have seen something and it’s amazing – just can’t talk about it just yet”). Again with Apple, there is almost not one day that there is not an analyst article, rumor from an Asian manufacturer or just plain little tidbits (and sometimes fake rendition of the Apple Tablet) that fuels the market with hype. Currently you can see 1-2 tweet on this rumor coming out every minute (more than 100 tweets per hour).

Make it relevant

Media and market hype only happens when what you are trying to buildup is relevant to the target audience. If you are the only one that thinks that what you are saying on the web is interesting, then you will never achieve real market hype. And please don’t just keep saying that what you will be announcing soon will be revolutionary – let the others say it. Per Tim Cook’s definition of what’s wrong with current netbooks (and no one has denied his claims) and some of the success of the other ebooks or netbooks, customers are already indicating a desire to get a better Tablet/Netbook. This is all too similar on how Apple entered the MP3 and the mobile market.

If a tree falls in a forest, does it make any sound?

Ultimately, never forget that hype is as strong as a lot of people spread the good news. So make sure people will have a common interest in what you are trying to announce. Just expecting a flurry of media coverage at time of announce does not cut it anymore …

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How to solve high employee turnover …

October 27, 2009 1 Comment

Do you have a problem with high turnover in your company? Do you know why? Of course it is easy to blame others: competition is paying more or have better benefist, employees leaving don’t see the value of what you’re trying to build, etc. I find that high turnover is caused by a few and basic elements…

Vision, Mission & Core Values

Do you know those little things that you keep pushing because you never have time to nail them? Well, I find that employee attachment is highly dependent on company culture – and your vision, mission and those often-neglected core values are at the heart of it. Do your employees understand and like your vision and mission. For example, if you want to be the biggest at something, make sure that this mission resonates with EVERY employee. Would you commit to a long-term relationship with someone that does not share your values and culture? Neither would your employees. They might start working for you (as you could start dating someone) but ultimately your core values (or lack thereof) will impact their desire to stay for more than a few years.

Leadership at the top

How respected is your senior leadership? Do people aspire to follow them thru the good and bad times (can’t just be all good)? Great leaders will make do great things from ordinary people – and employees like to be driven towards success, to be pushed to new boundaries that will help them grow their personal and professional life. Senior leadership is hard to find – when we see one, get him at all cost. Too many times I see companies reluctant to pay a little more for a senior leader. I always believed that paying a little more for your top people is a smart investment. Just think on the cost saving or opportunities gained if you can save a few additional employees each year.

Weakest link: middle management

I have seen countless companies where the middle management layer is pretty weak – either because the managers where never trained to become people managers (it is quite different to manage human capital than it is to manage a spreadsheet). Are you investing in your managers to be with leadership development programs? Are you coaching and mentoring them? If you have a high turnover, probably not … to become a good people manager requires time and effort. This is not a natural gift that most people have. So if you just promote people because you like them or because they have been with the company long enough, you are creating yourself the problem of high turnover.

Employees are humans

Each person in life wants to be appreciated, valued, challenged and need to feel important. No matter how many employees you manage, you need to focus on this. Thinking that people will be as motivated as you is very optimistic. Take the time to listen to your employees, to understand what drives them (everybody is different and unique), to communicate at the person’s level.

At the end of the day, you should never be surprised when someone leaves the company. If you are, it means you are not close enough to the problem and your high turnover will just continue, or even get worse…

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The startup fear of being stuck in a niche

October 26, 2009 Leave a comment

Why are startups always of being stuck in a niche? They don’t even have a decent market penetration that too many entrepreneurs are concerned about being stuck. The result is seeing a lot of companies with less than 1% market share on a very wide audience with no ability to gain any significant market share.

The problem with being in a niche

Yes it is a lot harder to expand when you are stuck in a niche. The industry can easily mark you for what you have done in the past and will require you a good investment in order to have them change their mind about your core business. But at least when you dominate a market segment, you can slow down your product development in order to start investing in new markets. Without any important market share, it is virtually impossible to expand into new places; constantly requiring you to keep pace with the competition.

Zero percent of a Billion dollar market

When you are working on your business plan, it is always more interesting for a VC to see that you plan to own the lion share of a “smaller” market than to try to pick up the crumbs of a huge addressable market. This is the classic “if we only had 1% of this market, we’d be rich”. The problem with this logic is that someone else (or a few other players) owns the other 99%, which will continuously put at risk your little piece of the business.

Start small; think big for the future

Even getting to dominate a $10M market is not that easy and you will learn a lot in trying to get the lion share of it. Of course if you can identify $100M niches, it is even better but at the end of the day, a company’s focus should always be about owning a market – no matter how small it is… And nothing stopping you from having a long term plan that will reach out to a larger target market. It will always be easier to get more funding once you own some piece of the business.

Focus is key

Without a clear focus on your target market, you will ultimately pay the price – failing to become a market leader and have significant market share. Find a core business that is big enough and grow from it when you need to expand beyond your niche. At that point in time, you will at least know what it takes to enter and win a bigger niche …

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“You have to learn the rules of the game. And then you have to play better than anyone else.”

October 23, 2009 Leave a comment

- Albert Einstein

Yes there are rules in business and you will be more successful if you can play them better than others. This is even more apparent when you do international development. Accepting how business is done in other places such as Tokyo, Paris, London or Madrid is key to build the right business partnership and get what you need out of them. Culture and business etiquette is often a lost art;  too many entrepreneurs not spending the time to master them.

Spend the time to understand what your business counterparts value and respect and by following their rules, you can actually out beat them on their own turf. Not doing so will result in a lost of frustration and misunderstanding and ultimately bad business deals for you (or no deal at all).

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Corporate and Product Naming 101

October 21, 2009 Leave a comment

I always enjoy a good brainstorming session when it comes to finding a Company or Product name. You can easily get an entire wall full of different ideas. But how do you select a good name? First let’s breakdown naming styles into 3 categories:

  • The dreadful acronym a.k.a. TLA: names that are obviously too long and it is guaranteed that will be converted to an n-letter acronym. Some of them can actually have a long-term brand value if you look at IBM (International Business Machines), HP (Hewlett-Packard) or Sun (Stanford University Network)
  • Names taken from unrelated areas: names can come from a place (Adobe is taken from Adobe Creek that ran behind the house of founder John Warnock), a fruit (Apple – Steve’s favorite fruit), relatives (Mercedes was actually the financier’s daughter’s name) or even gods (Kaydara – an African god)
  • Pure invention or a mix of different words: here you can see a lot of creativity from the founders such as Google (Googol but written wrongly on an investor’s cheque), Intel (INTegrated ELectronics), Microsoft (MICROcomputer SOFTware)

Are you going global or local?

Early in the process, you need to take into consideration if your Company or product will only have a local presence or will be international. If it’s the latter, you need to make sure that your name does not mean anything nasty or improper. Always loved the story of the Chevrolet Nova that did not sell well in South America (Nova means no go in Spanish). Also make sure that your international customers will properly say your name. In Japan for example, the letter ‘C’ is pronounced like ‘CH’ so can you guess how they pronounce Citibank?

Names that people can remember

No matter how you pick or create a Company name or Product name, make sure that it is easy to remember – you pay dearly if no one ever remembers the name or says it wrongly. Short will always be better than a smart and long name. You live and breathe your brands, make it easy for others to spread the word.

Product names that says what it does

I always liked to create product names that reflect as much what the product does. Of course it is not as creative as a cool name such as the iPod but from a startup point of view, you really cannot spend tens of thousands of dollars with marketing firms to find innovative and creative names; and unless you are sure that you have the right level of creativity (a.k.a. don’t quit your day job) – don’t push it too far … One of my favorite tools that helps me finding a good name is the Visual Thesaurus . Use it by typing in some obvious words that describe what the product does and see what kind of synonyms are available. Try to find a combination of two words that becomes something that rings well. For example, Kaydara was building a next generation of our animation solution – focused heavily on an innovative MOTION editor that allowed to BUILD news animations sequences: MotionBuilder.

Be Consistent

If you have multiple product names, make sure that you have consistency. If you usually start the product name with your Company name, ALWAYS do it. If you are using a specific theme or style, STICK to it. Consistency is more important than you think. Not having it can reflect a perception of lack of focus. Of course, you need to think of a theme that has enough depth that will outlast the number of products you will release. Also you need to have clarity about your portfolio: are you building suites of applications, a family of solutions or independent solutions? Naming them properly is a great way to differentiate your offering.

At the end of the day, there is no easy answer but simplicity will always trump the card of a complex or hard to remember name (of course you can always spend more marketing dollars to get it popular)

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Closing a deal often feels like an endless marathon

October 20, 2009 Leave a comment

If you ever closed a major deal, you know what I’m talking about. Closing a deal requires a lot of patience, determination and stamina. No matter how hard you try, it is very difficult to predict how quickly it can all happen. Of course there are natural milestones (major event, end of fiscal year, etc) that can help the process but there are no guarantees .. For those that never closed a major deal, think of it as a marathon but you never know when you’ll get to the finish line. So be prepared to feel the pain, the agony and the exhaustion; but always keep in mind the pleasure of crossing that finish line …

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Agility in a small company

October 19, 2009 Leave a comment

Being agile is one of those words you hear a lot when you talk to startups and small companies. The other time, an entrepreneur even told me that this allowed his company to change product plans every week and serve each customer in a unique way. He went on to affirm that this was great asset that allowed his company to react better and faster than his “bigger competitor”.

Why is this the wrong type of agility?

Te begin I will say that I truly believe that agility is a key asset in a company but this is not a permit to improvise and not knowing exactly where you are going. Take as an example a football game. The goal (mission) is very clear and each and every player has practiced and rehearsed a well-defined playbook (business plan, strategy). When the quarterback gives the ball to the running back, they both are executing on a common plan taken from the playbook. Agility comes when the running back is trying to go the furthest and needs to react to competition and other factors that prevents him to run the play as planned. The goal and direction has not changed, just the execution of the play. As soon as the running back has finished his run, the offense teams immediately huddles back (communication) and selects another play from the playbook. You don’t see any player changing the goal or the overall strategy, just changing the execution has it happens.

Agility in product planning

As market conditions and competitions change the landscape, it is indeed important to be able to rapidly REVISIT your own product plans and strategy – but this is not an excuse to not take the time to build the right type of product roadmap and long term strategy. Agility comes in the form of rapidly ADJUSTING your plans; not making new ones up every other day. While product plans sometimes need to be updated regularly, no market really moves so fast that you can’t plan ahead. Yes there are sometimes major game changers but these don’t happen all the time – and ideally you want to be the one changing the game.

Be agile where you need to be

Building great products takes time and you need to stay focused. Agility is great when it comes to your development process or a planning process – but much less when you are executing. Of course, you need to adapt when you see that your plan won’t work out but this cannot be a knee jerk reaction. At the end of the day, don’t confuse your ability to react to market conditions and competition with lack of planning and long-term vision. And if there are so many bumps on the road that you can’t foresee and your so-called “agility” barely allows you to survive, you’re already dead – you just don’t know it yet …

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Running your first start-up? Here is the best investment you will make

October 16, 2009 1 Comment

Yesterday I attended the Montreal Startup Camp and from talking to several first timers running a start-up, it became apparent that most of them are short on knowledge regarding Product Management. And since it is very hard to find a good Product Manager (if you can afford them), the Entrepreneur needs to find a solution.

Why Product Management is so important?

For one, the core of a business case resides on the quality of the work done by a Product Manager: Market Definition and Sizing, Pricing, Distribution Strategy, Positioning, Buying Process, and Product Requirements (for a detailed list, click here)

As you can see, Product Management is far more than just managing a few cool ideas and a feature list. Without an experienced Product Manager in your company, this responsibility lies within the role of the Entrepreneur.

How can Product Management help with raising funds?

In a lot of business presentation I’ve seen, there are usually weaknesses in areas that are key Product Management responsibilities. How big is the market? How will you differentiate yourself? How much market share can you get in the first 5 years? Have you validated the market with potential customers? The list goes on and on – if you do your job as a Product Manager, you will have all the right answers for these questions. The better the answer, the more confident a VC will feel and will be compelled to support your business.

So how can you learn about becoming a CEO/Product Manager?

I won’t hide the fact that I am very attached to the Pragmatic Marketing model and I would strongly recommend that you follow several of their trainings.

Luckily they do stop by regularly in Montreal and Toronto (hint: the next one happening in Montreal is December 15-17).

Who should take these trainings?

In my opinion, I believe that each key stakeholder in the business should attend: the CEO, VP Products/Technology, Dir. of Development, VP Marketing, etc. You need at least 2 or 3 people that not only understand the model but also believe in it. This is indeed a bit more work upfront while building a product but the payback down the road is huge. Ultimately, you should have on resident expert that help the Company continue supporting this model and when possible send new employees to the same training.

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