Lost Job Start Business

So many entrepreneurs that I talk to don’t fully understand advertising. They think that advertising is marketing and vice versa. They see advertising everyday. When they open a newspaper, when they watch T.V., when they visit a website, when they listen to the radio, as they are driving they are exposed to advertising.

We all know that most entrepreneurs are not from a business educational or business background. Therefore, they believe that they must advertise using the same media that they see everyday. In other words buy T.V., newspaper and radio ads. They don’t analyze the effectiveness of buying these ads. Instead, they just do it because they see others doing it. This is totally the wrong approach to advertising and marketing in general.

The most important issue when developing your marketing strategy which may include advertising is “Return on Investment.” This is where current display advertising on T.V., radio and in newspapers falls down. They are too expensive and therefore don’t give the return on investment required. In many cases, the return on investment is negative and that’s a great way to burn through all your cash. You are not in the cash burn business, you are in the cash making business.

Marketing has now moved away from advertising to “talkvertising.” This is because the math just doesn’t make sense for traditional advertising anymore. The approach to talkvertising is much different than the approach to traditional advertising for entrepreneurs. It’s about having your product so different, innovative, quirky, good that people talk about you.

Technology has supercharged word of mouth. Word of mouth can now turn your start-up global overnight. However, the biggest hurdle to achieving this is by following a “by the book” strategy. Grey is not a color worth talking about. If advertising rates come down to a level where they make sense for a start-up, then great. However, even if you can turn a good ROI from a traditional campaign it’s a good idea to talkvertise as well.

The key is to get the buzz going. After all, if your start-up is going to take off you need to be comment worthy. As you build your business always think about talkability. I’s like recruiting sales people who will work for free.

Remember, advertising won’t make your business, talkvertising will.

Perfection is the enemy of the entrepreneur. It’s an idea that stifles innovation. It stops the all important launch. It’s the excuse’s best friend. Unfortunately, our default setting is to only launch when something is “perfect.”

We are trained to believe that we must be perfect In school because we are graded as a fraction of perfection. We look at magazine with “perfect” images of “perfect” people. It’s easy to slip into the mindset of “if it’s not perfect, it’s not good enough to release.”

If entrepreneurship was a music it would be free form jazz fusion improvisation. You don’t read from a score, you jam it out and use your intuition. The true secret of entrepreneurship is that it’s not about perfection it’s about making progress.

Progress is much more valuable to you than perfection. Progress should be your key goal. In other words, get your product out there and start making all aspects of your business better. Perfection presumes that you know it all. Entrepreneurs don’t have that luxury. Great entrepreneurs realize that they don’t know it all. That’s what makes them great.

The recent uproar over Facebook’s privacy policy has led to the social network reverting to a more simplified privacy system. Facebook has faced the stern criticism for implementing a more complicated privacy policy in order to expand it’s business model. I believe much of this is unfair and undeserved.

Firstly, Facebook must innovate to stay alive. Currently they are the number 2 website in the world behind Google. However, the past evidence shows that if a social network remains static they will see a dramatic fall off in users. Just look at the once popular Bebo. If you look at the various innovations Facebook has introduced it’s obvious that their privacy policy would have to change accordingly.

No business get’s it right all the time. Facebook introduced a new privacy policy, listened to user feedback then made the appropriate changes. Start-ups can learn a lot from this approach. Of course there will be people who shout and yell. Of course there will be critics. These are the same people who would criticize Facebook for not making any changes and not introducing any new features. The key point start-up entrepreneurs need to take on board is that they put it out there and listened then did something about it.

When you work with techies they tend to over complicate things and make stuff seem much more difficult than it is. I believe that this is one of the core reasons why people did not warm to Facebook’s new privacy policy. Also, Facebook is a social network. The name is a big hint. Social implies, sharing so by joining Facebook people are doing it to share stuff. What sort of privacy policy would you implement if you were in Zuckerberg’s position?

Ultimately this controversy can be boiled down to snobby “right first timers” versus the more realistic and chilled out “incremental improvement” gang. See it’s all about making mistakes and learning from them.

Please comment especially if you have a different view.

I have just uploaded a new ebook on Scribd. I have combined previous blog posts and content form other ebooks to put together a comprehensive one stop resource for people who are starting a business after losing their job.  Hope you enjoy.

The Rebound: The Ultimate Guide to Starting a Business After You Have Lost Your Job

Recently Jupiter lost one of it’s stripes. Scientists cannot explain why this has happened. Start-ups need to learn from this. Look, sometimes things just happen. Sometimes you just lose your stripe. This can not be rationalized or explained. It just happens.

You might have devised the most bulletproof, foolproof, guaranteed to succeed, watertight, plan. You may think that there is absolutely no chance that it will not succeed. However, this is the start-up game and anything can happen. There is no such thing as guaranteed to succeed. There are way too many variables.

That’s why standing off and doing reams of market research is dangerous. Instead find out the fundamentals and jump into the game. Be like a jazz musician and start improvising. Eventually you will play something astonishing. When you are an active participant in the market you can roll with the punches. However, when you spend months researching before you do anything, you are open to get knocked out.

By gearing yourself to expect the unexpected you will be able to deal with any unexpected shocks in a level headed manner. Remember, the unexpected is to be expected when you start a business. It’s up to you to be prepared for it.

I have been looking at previous posts and articles that I have written over the last year and a half. There is quite a lot of stuff. As a result,  I am currently working on an ebook based on that content. I hope it will be a valuable resource for first time entrepreneurs who have recently lost their job.

I will be condensing and re-writing the material over the next few weeks. I hope to get the ebook out there before the end of June.

You can’t bluff a start-up. It’s a no bluff zone. That’s the reality. You can’t achieve anything without substance.

This is actually a good thing because you don’t have to worry about anything else. You can be the worst presenter ever. You can look like a mess. You can smell bad. If you are competent at what you do and there is substance behind your start-up then people will be prepared to invest.

Conversely, you can be Mr/Ms slick and it will get you nowhere. Remember, the people you will be dealing with will  see through the crap. This applies to both investors and early adopters.

Substance over sales pitch all the way.

As you know, being an entrepreneur is very different from being an employee. Probably the biggest difference is how failure is looked at. See, I’m going to let you in on a secret. Something that your former boss never told you. In fact, they probably are not aware about it.

As an entrepreneur, you have to ditch the right first time mentality for an test and measure – incremental improvement philosophy. When I explain this to my “employee” friends they think that I am making an excuse for failure. This is a typical reaction for someone who works in a cocooned environment.  So, lets look at why many large organizations promote a right first time mentality.

It’s actually a microcosm of what VCs do. You see, in a large organization if it takes ten tries to get one success then ten employees can try ten different things with only one being a success. Nine out of the ten are deemed failures with one deemed a success. The objective has been achieved, but there has been nine failures.

In a start-up scenario, the same occurs except in a linear fashion. Instead of ten employees failing nine times to succeed once, one entrepreneur must try ten things to find one that works. I know there are other factors such as learning from past mistakes and the effect of incremental improvement. However, the above example highlights my point.

As an entrepreneur, you need your helicopter license at the ready, because the view from up there really helps.

I’m sure that you have heard about the huge success of the iPad. In fact, it could be argued that the iPad is the most successful launch of all time. Current economic climate considered, this is a jaw dropping achievement. But behind the headlines lie a valuable lesson for start-up entrepreneurs. You see, Apple have perfected marketing. They are to marketing what Chopin is to the piano concerto. The great thing for you is that you can apply the same model to your start-up. There is nothing better than getting off on the right foot.

Be warned, it’s not a quick fix – results overnight model. It surprisingly doesn’t focus on the launch. Instead it’s rooted in what has resurfaced as the fundamentals of marketing in the digital age. In a recent blog post on why Apple has been so successful with the iPad Seth Godin, lays out the core reasons. Here’s a quick summary. It’s worth reading the full post.

He reckons that Apple’s strategy can work better for smaller gigs and more focused markets. I totally agree.

1. Earn a permission asset.

2. Don’t try to please everyone.

3. Make a product worth talking about.

4. Make it easy for people to talk about you.

5. Build a platform for others to play in.

6. Create a culture of wonder.

7. Be willing to fail.

8. Give the tribe a badge.

9. Don’t give up so easy.

10. Don’t worry so much about conventional wisdom.

Surprisingly, not enough start-up entrepreneurs follow this model. Well if you want to join that club, you are free to do so. Go ahead and read that Marketing textbook that was published in the early 90s. The rest of us will be busy applying what is proven to work today.

As always comments welcome and appreciated. Especially those who disagree.

We have all seen it. The behemoth 80+ page business plan.  It’s a sight to behold. Very impressive indeed.  A lot of work went into it. In fact, it took four and a half weeks to write and proof read. It contains every conceivable detail and the writers believe that it leaves no stone unturned.

Okay, it sounds good doesn’t it? Well, in fact when you think about it, it’s not. Here are seven reasons why.

1. If you are looking for investment,  the people who you want to invest in your business don’t have the time to read it.
2. If you can’t condense what your business is about into a five minute read, either you are an extreme scatter-brain or your business has way too many moving parts for a start-up.
3. If you are going to use the plan in the day to day management of your business it’s not practical to have a plan that resembles a telephone directory.
4. It’s good to take care of the environment. Mammoth business plans = less rain forest = not good at all.
5. The more technical jargon there is, the more you are diluting the two core elements of the plan. How is this business going to make money? and how much can it make?
6. Law of averages are against you when you have an eighty plus page plan. Less people will read it. So if you are looking for investment, there is a smaller pool of people that you can draw from.
7. You have wasted time writing it when you should have been working on getting traction and making sales for your business. Sales matter much more than a business plan.

What do you think? Feel free to add more reasons in the comments. If you disagree please feel free to comment as well.