Date archives "June 2009"

Generating Revenue

I hear and read a lot about business plans and ideas on a regular basis. I am still surprised to hear about businesses that are supposed to start generating revenue only when they have enough users. This wait and see strategy drains the most precious resource your start-up has…cash. When that dries up, and you have failed to attract the 10 million users you need to generate a decent revenue stream from your advertising based revenue model, it becomes time to pack up your bags and blame it all on how the market was not ready for your mind blowing-industry disrupting business model. The fact of the matter is, that there are very few start-ups that manage to generate the sort of numbers it takes to make it big using this strategy. Wanting to be the next Facebook, Twitter or WordPress is all very well, just not an advisable route to follow unless you have a ‘Great’ idea along with a substantially large war chest.

The simple fact of the matter is, the longer it takes you to generate a substantial revenue stream, the faster your morale decreases, along with the faith your angel or seed funder has in your model, and ultimately it will be, game over. The question you should be asking yourself every single waking moment of your day is “How can I generate substantial recurring revenue for my business?” The focus has to be on the “recurring” aspect. Do not chase large accounts until you have established and developed a stream of revenue that pays the fixed bills. This requires you to test many permutations of your initial product or service. In which cases are customers willing to pay more? What are some major hurdles you face? Can you provide a cheaper service initially, to get your foot in the door so as to sell a more complex offering later?

Constantly asking yourself these questions will help focus your thinking on the most critical aspect of your business model. When you have fixed your revenue model , raising funding becomes easier, hiring better resources becomes possible and the morale of the entire set-up is boosted. If you have not figured out how to generate regular revenue for your business as yet, I suggest you get onto it as soon as possible.

Rather than waiting for things to happen….make them happen!

Are You Sure You Can Deliver?

Ever thought twice about whether you will be able to deliver on what your client is expecting of you? I know I have, many times! This is the point when entrepreneurship becomes real. I think experiencing fear at this point is a lot better than blindly taking on work without thinking through what is required in real terms, to actually deliver on the client’s requests. Biting off more than you can chew with limited resources is a guaranteed way to disappoint initial reference customers, who will then unfortunately, become ambassadors about how you were not able to deliver.

However, unfortunately there are no perfect deals that will match the resources you have when starting off a new business. If you happen to get them, consider yourself to be part of a fortunate minority. For the rest of us, we will either get deals that drain our resources, while not contributing adequately to our bottom line, or we may be able to land a large account that puts our reputation on the line. You often find yourself torn in sticky spots, and this is perfectly normal for an early stage business. The key in both situations is negotiating up or down depending on the client requirements and your capabilities. Don’t hesitate to offer changes to the requisition depending on what you can actually deliver within your constraints.

Don’t let larger account managers intimidate you, and never underestimate the amount of work that smaller accounts can provide you with. Most importantly, have confidence in your ability and your product or service. If you don’t, the clients will sense it the first time they meet you, and that will result in not winning any business at all. When you step up to be an entrepreneur, you do in fact break away from the rest of the pack, daring to be different. To be different you need to have confidence in yourself and what you bring to the table. If you have that …. making the right decision will be a whole lot easier.

Finishing Touches

Products and services that stand out from the rest, are those that pay particular attention to detail. That is what makes them stand out and demonstrates to the customer, that they are really cared for. I have noticed that too many business owners are focused primarily on making the sale, and moving on to the next one, without really completing the product or service cycle they are supposed to deliver. I understand that deal flow is paramount to the survival of a small business, however, not delivering a product or service to the best of your capabilities or in line with a clients expectation, is being short sighted in the larger scheme of things.

A key principle of business success is delivering a product or service that is in line with, or above the client’s expectation. We all know this, yet, many of us fail to honor that statement. Long term relationships can only be built on solid foundations. This is a mixture of the trust, reliability and credibility the client has in your product or service. Even the slightest crack triggers the customer into exploring other options. If you want to retain your customers and keep them loyal, pay attention to the final delivery of your product or service. Elicit feedback and strive to improve continuously. The future of your business depends on it!


Young Guns

They say there is no better teacher than experience. By personally going through something, we get a much better understanding of the underlying processes which then becomes an incomparable learning experience. Entrepreneurs need to go through the motions of setting up their own businesses, facing challenges and setbacks, and ultimately the wins themselves. There is no course, book or training program you can enroll into to bypass the learning that takes place as you go through the steps yourself. What you can do for yourself however, is read and learn from the many entrepreneurs who document their journeys. I personally really enjoy reading and listening to entrepreneurs tell their stories, and do my best to take away advice and learning that I can implement in my own businesses. Young Guns is such a book. Written by a young and successful entrepreneur it is an extremely easy-to-read and information-rich book for those who are sitting on the fence and wondering whether they should take the plunge.

I read the book in a single sitting. It is an extremely well laid out book and flows seamlessly from chapter to chapter. The entire book is based on one very powerful question ” Why not me? ” It is a question everyone should ask themselves on a daily basis. If you are not pursuing the life you always imagined, and know many individuals who are, what is stopping you from following that path? The book starts out with some foundational chapters on the importance of selecting the right idea and rigorously testing it to make sure it is something you are truly passionate about, and want to pursue. It is not a question of ” I could do this ” but rather ” I really, really want to do this “. The next couple of chapters discuss some very pertinent points on selecting the right business partners and getting started.

There are three chapters that really got my attention in the book. One of them is setting the correct priorities for the first year of business. This is something that is often not given adequate and substantial attention to, what with the euphoria of starting-up, when things are often fairly muddled and disorganized. This chapter provides a seven point checklist to assist you in getting organized which is a great help. The next chapter that I really enjoyed reading was the importance of backing up your sales. This is another area where first time entrepreneurs often make critical mistakes. Securing business and important client accounts is very important. However, maintaining the accounts you have won is of even greater importance to sustain growth and stability. This chapter has a lot of good points on this topic. The last chapter that got my attention was the one on the importance of calculating the numbers. In the end we have to structure our businesses in a way to maximize upside potential and create realistic projections for the future. Getting a good accountant is something that even I had not given enough importance to till earlier last year. Lots of good tips within this chapter to help you get started!

In conclusion this is a great book for individuals who want to make that leap of faith, yet, are still unsure about what lies ahead. By telling his personal story and adding many great insights from other entrepreneurs, this book by Robert Tuchman provides a great overview for you to get started on the right foot.

Going the Extra Mile

Whichever business you are in, there will always be simple ways to put in that extra effort to change a normal experience into an exceptional one. In a world which is quickly losing the human element and being replaced by technology, processes are becoming robotic, and efficiency is being given a higher level of importance over the customer’s holistic experience. In such a space, efficiencies and processes are easily replicable, and differentiations between your competitors and yourself are becoming increasingly thin. This is when switching costs become negligible, and the ability to retain customers becomes more challenging. In such spaces, we have to be able to think a little out of the box on how to make the customer’s experience a more pleasant and enjoyable one. The video below shows a very apt example of how going that extra mile can cause a domino effect across the business.

In the end it all comes down to the value you create for your customer, and how you make them feel through the entire transaction period. To create this something extra, one does not require to go very far as the example above clearly displayed. It does however need one to understand our customers on a much more personal level. Through better understanding we will be able to gauge what they expect from our product or service, and how to make incremental changes to make the experience a more personalized and enjoyable one. When you guarantee your customers a certain level of service it drives your entire organization to keep fulfilling on that promise by doing whatever it takes.

What are some of the small things that you do in your business to go just that little bit further for every customer?

Lifters & Leaners

There are two kinds of people alive today,

Just two kinds of people, two only, I say.

Not the good and the bad, for its’ well understood

The good are half bad, and the bad are half good.

Not the rich and the poor, for to count a man’s wealth,

You must first know the state of his conscience and health……

No the two kind of people on earth that I mean

Are the people who LIFT and the people who LEAN!

Wherever you go you will find the world’s masses

Are always divided in just these two classes.

And strangely enough, you will find that there are rifts:

There are twenty-plus LEANERS for each one who LIFTS.

In which class are you? Are you easing the load

Of the world-changing LIFTERS who pave their own road!

Or are you a LEANER who lets others bear

Your portion of worry and labor and care!

– Ella Wheeler Wilcox –

Which one are you?

Inefficient Processes

Inefficient processes are all around us! These are pain points that appear as cumbersome inefficiencies we have to live with, they are also potential opportunities for optimization for entrepreneurs. It is these pain points that provide us the inspiration to ask how things can be made more efficient. When we look around today, we see that technology enables us to do some pretty incredible things. Simple tasks such as hailing and calling cabs is now simplified to clicking a button or two on your mobile phone through Taxi Magic. Complex processes such as delivery tracking and warehousing have been streamlined down to a tee with RFID. Looking at your our own business or the industry we operate in, provides us with many such inefficiencies that are jarringly obvious but, are still tolerated. It is also true that not every inefficiency is worked around due to economics, and lack of holistic tangible benefits that can be derived.

A simple check list that I like to go through when I am thinking about an inefficiency is:

1. How many people or organizations are affected by this inefficiency?

2. Would solving this inefficiency drastically increase the overall experience of the target segment? Is it nice to have or is it critical?

3. What would be the capital outlay required to tackle the process?

4. What core competencies will be required to come up with efficient and effective work around it?

5. Would the target segment be ready to pay for this work ?

For example, setting up a business in some countries is a cumbersome process, one that actually discourages individuals from taking that leap of faith and setting up something on their own. Countries with foresight saw this as an avenue that would drastically increase SME activity, as also that the spill over effects would far outweigh the costs of developing systems to simplify this process. Singapore is one of those countries that has made incorporating a company something that you can do within an hour of thinking of the next big idea. Using simple online interfaces enables you to quickly go through the requirements, and the actual process of incorporation takes a fraction of of the time it takes in a country such as Pakistan. However, if you require the same efficiency in Pakistan, there will be many other capital outlay costs that are prohibitively expensive. With the prevalent lack of internal infrastructures in this country, work around current situations may not be a feasible proposition at the moment and they are hence not worked on by entrepreneurs or the government.

Understanding the intricacies of a broken process is vital to subsequently address it correctly. Like all businesses, one needs to take into account the bigger picture, and how all the pieces fit together. Just take a look around you and see what is already broken. It may not be the most original idea, but it may just put you on the road to reaching there a lot faster!

The Key to Sales & Success

Marketing should be known as, and synonymous to, relationship management. When a potential, or existing, client calls you, your answers to his questions can make or break a deal. If you don’t have the answer, you need to find it. If you don’t have the time, you need to make it. Be willing to work that much harder for your client: even if you aren’t the biggest, the client needs to know that you are most committed to their success. Commitment is their key.

When trying to sell some sort of product, the best entrepreneurs are focused on the goal, they are focused on the why that drives them to connect to customers. It is not the how that one must be concerned with, but only their why. There is no right or wrong way to sell: all you need is passion and enthusiasm for your product. Even if you do not know the answer to a question, your drive to promptly find the answer will be what impacts the client, not the initial stutter. This passion will ignite the minds of your potential client, facilitating connections, and connections between will be made. Your passion and enthusiasm for your product will be what encourages the sale—not the rote duplication of someone else’s selling system. Reach out to as many different people in as many different ways, with as much energy as you can, and discover what feels comfortable for you. What you do to sell and promote your business has to be a reflection of what you are already willing to stay up late for and get up early for. It has to connect to your why and be a part of your own experience.

Always keep in mind: entrepreneurs are their own companies. Selling and marketing the company is personality driven. With this hugely personal element, one finds it an impossibility to adopt the methods of another. Don’t try to sound like someone else. Take advantage of your personality! Use the force of your person—in the early stages, this will take the form of a personal guarantee from you to the prospect. Be who you are and use that to sell.

In order that you become a successful entrepreneur, it is essential that you are the person who is willing to pick up the phone and call people to talk about making deals and doing business. The phone is a simple, powerful and flexible tool that easily adapts to your personality and your why for starting a business. It is one of the most uncomplicated, cost-effective, measurable strategies available to you. When you make this phone call, make sure you are absolutely certain about the product that you are selling. With this certainty, you can use confidence to build up a network of contacts. The network cannot be established overnight—it is going to take a lot of phone calls. You cannot just wave your magic wand over a corporation and change them into a profitable client.

The idea of reaching out and talking to people about what you do must excite you! If you are not excited and looking forward to Monday, then you have not found your why and are not ready to become a successful entrepreneur. Your why should motivate you to chat with people: talk to them about what they do and allow the conversation to change directions and come to what you do. Who knows whom you can make connections with on the airplane, in the bar, at the racquet club. Make conversation!

To satisfy your drive to become a fearless and successful entrepreneur, these are the things you must do. Find out why you are doing what you are doing—what your motivation, your driving force is. Stick to your own style as it is only your personality that you can sell. Finally, talk! Call people on the phone; make connections in your social life. You will be surprised to see how any discomfort decreases as your client network base increases in direct proportion to your profits.

Take your time: the most successful men and women in the end are those who have come upon success as result of steady accretion. Step-by-step, network becoming wider and wider—progressively advancing your product, your field, your corporation—preserving in what you know is practical and what you know works, and concentrating on this. Follow this and find success in the greatest degree.

Persuasion vs Manipulation

I am a big Apprentice fan and thoroughly enjoyed the last season. The two main attractions of the show were Joan Rivers (Award Winning Comedian & Businesswoman) and Annie Duke (World Champion Poker Player). Both of them had very different ways of playing the game , and it was extremely interesting exercise to watch. The question of persuasion and manipulation of team members kept coming to mind when watching the episodes. Both women used both of these tactics in some form or other. The line between persuasion and manipulation is quite thin. On one hand there is persuasion, which is expressing your point of view forcefully, while keeping the interests of everyone around you in mind. Manipulation on the other hand, is contorting a situation in your favor without taking into account the interests of others. In the long run it is clearly apparent that those who manipulate situations repeatedly, are not able to win the trust of their partners, clients, friends or family.

In the context of the game they were playing, where there is only one winner, does that really change things? I think not as life itself can be viewed as a similar game! We are all part of teams, doing our best to get forward, and along the way we know we will require the assistance of those we work with. Repeated abuse of this relationship may result in short term gains , but I believe it cannot be a long term winning strategy. We do always need to keep the bigger picture in mind, alongwith the interests of those who are part of our journey. There will be times, when we know deep down that a certain decision needs to be made , for the greater good of everyone involved, even though it may not apparently seem like the most rational thing to do. This is where persuasion tactics come into play. Similar situations will arise many a time in your work, specially where the sale of your product or service is concerned. It will often all come down to how persuasive you are.

Our passion, belief and faith in our products/services, should be the driving source of inspiration to persuade and convince our customers to buy, and our investors to invest. Relying on under hand short term tactics to manipulate situations where only one side stands to gain, will dislodge any sort of equilibrium, and soon you could find yourself without a team, customers or investors. As entrepreneurs, we will undoubtedly have to face many such situations where we will be tested as to which path we will choose. All I can say is , I hope you will take into account the entire situation and the interests of others, before taking any action.

Earning Your Stripes

In life, irrespective of the professional path you choose for yourself, respect has to be earned. Everyone of us, regardless of our backgrounds, has to earn their stripes to gain the respect of their peers, bosses, clients, friends and family. This depends solely on you as a person, to showcase to the world with your actions and character, who you are, and what you stand for. There is no room for any sense of entitlement, because your ego can be the fastest route to your downfall. You may have achieved worldly personal success according to your aspirations ,but if you have not been able to earn the respect of those who work side by side with you on adaily basis, the question to ask is , has it really been worth it? All sorts of options are open to us to acheive what we want in life. However, we need to be very careful with the path we choose to walk on. Sometimes, minor lapses can turn out to be detrimental to our success in the long run.

In the world of entrepreneurship, our ability to execute and hold it together, in ‘down’ times, are a true test of character.

  • Respect is earned when those around you know that you have the capability to get things done competently whenever the need arises.
  • Respect is earned when you are able to pull a team, on the vertge of falling, together.
  • Respect is earned when you are capable of working cooperatively with people you may not care for.
  • Respect is earned when you are able to steer clear of the grey areas, in the face of temptation.
  • Respect is earned when you display your level of passion and commitment for what you believe in.
  • Respect is earned when you are brave enough to admit, you are wrong.
  • Respect is earned when you make sacrifices to help others get ahead in life.
  • Respect is earned when you say what you mean, and mean what you say.

These are just some of the lessons that I have learned on my short journey as an entrepreneur . Earning the respect of the people you work with takes a life to learn and earn, but it takes only a few mis-steps to lose it all. It is one of your most valuable assets, and when earned, can prove to be the difference between success and failure in every sense of the word.

If you would like to add to the above list, based on your experiences. Please write suggestions below and I will update the post accordingly. Thank you.