Monday, June 16, 2014

Investment Requests

At our last bi-weekly partner meeting, Jerome, co-founder/CEO of SnapEngage, mentioned that several investors had emailed him to see if he'd be interested in talking. When I asked how he responded, his reply was beautiful...

"Thanks you for your message. SnapEngage is completely customer funded and we are not looking for additional investment. In order to focus on our main investors (our customers), I've decided to not take calls from investment companies."

I've watched myself and too many entrepreneurs waste a lot of time and energy talking to potential investors and/or acquirers. It's usually curiosity and ego driven to be able to put a price on what we own. It also tends to be a huge distraction to serving our most important investors - our customers. I wish I had this good of a response (and realization) twenty years ago! Thanks Jerome. 

Monday, June 9, 2014

Brain Trusts

Every other Thursday my operating partners/founders and I meet to share challenges and best practices across our different businesses.  It's a cool little peer brain trust that helps us over businesses' little challenges. We celebrate and remind ourselves we've accomplished good things. We offload emotional burdens and remind each other we are human. We help each other with best practices. We share experiences of how we overcame similar challenges. It's a pressure release valve, gas tank filler, and route map all-in-one many weeks. 

I've been involved with a handful of different brain trusts throughout my life with business peers, mens groups, and leadership teams within my businesses. The format is simple, give updates of the good and the bad, be candid with each other, and then share experiences that may be of help to each other (vs. giving advice). Then let the magic happen.

I first read about the idea in Think & Grow Rich by Napoleon Hill which I read just out of college. As a result I assembled an advisory team of folks much more experienced/successful than me. It was great, but missing the peer component. I then found YEO (now EO) and got my peer group of other young entrepreneurs who were running their heads through walls just like me.  

I've recently joined a peer group of entrepreneurial parents raising young kids. We meet by phone at 5am MT once a month to share our updates and best practices. Inspiration for raising great kids pops out of this meeting like popcorn.  

I'm in the middle of reading the founder/leader of Pixar, Ed Catmull's book Creativity Inc. Which prompted this post. He says their internal peer brain trust has helped them turn crap movies into great movies. A small group of their movie directors and creative talent meet every couple months to preview films in progress. They provide candid feedback to each other as peers that help the director see blind spots in their plots, and scenes. They don't prescribe how to fix anything. They just share their observations so the director can find their own way to improve the films. 

I remember creating my first braintrust seemed like a hard task. But it was actually easy once I identified the folks I would want around a table with me. Inviting them seemed awkward. But with how quickly they said yes, it was easy. Creating a format seemed hard, but the conversation and wisdom flowed really easily with basic conversation starters. If we share a similar vision, the rest tends to flow.   

In the case of my current business partners meeting, we all share a passion for building great long-lasting organizations. We also share a philosophy of being customer-funded, and as a result, organically grown.  With the intent to help other like-minded entrepreneurs, we've decided to share some of the topics that come up at our meetings. Which I will blog about next. 

So, want more brain, more heart, more soul to help you prosper? Start or join a brain trust. 

Wednesday, January 22, 2014

Free Your Teams from Bureaucracy

I describe "bureaucracy" as any system that doesn't add value and as a result wastes and sometimes enslaves people's time. The word itself is overly complicated to spell and therefore use. It's actually a perfect name for itself. Unfortunately there's a lot of it in the World. One of my personal missions in life is to help eliminate as much of it as possible. Why? Because we are here for a short time, and who wants to waste it on stuff that doesn't make a difference?

In business, here's what it looks like. Two of my companies' support teams were documenting every customer support request. Sometimes in several systems. Using up 70% of their time. Leaving only 30% of their time to actually help customers. As we weren't able to respond to customers fast enough, we kept hiring more people, which required even more systems to keep track of everything and all the people we were hiring. We lost track of the end goal... happy well-served customers.

At RegOnline, we discovered we could eliminate the need for support if we just simplified the systems our customers interacted with... clearer wording, hide advanced options, better self-service online help. We then simplified the tracking systems our support team dealt with to free up their time. The result... less confusion, less busy work, more free time and value for everyone. The best part was how much easier we made it for customers.

This month at SurveyGizmo, SnapEngage, and PosterBrain we added something new to discuss at our weekly all-company meetings... "What are the most common questions our prospects and customers have asked us in the past week?" We started doing this because we realized that our weekly meetings were focusing on US (revenue, customer count, expenses, profit) and not enough on our CUSTOMERS.

At PosterBrain today, the most common questions customers asked in the past week were.... How will my picture look?, Where are you located/shipping from?, Do you dry mount?, etc.. I suggested rather than making people contact us to get those answers, how about we put a FAQ on our homepage? Our customer service superstar laughed and said "Then what will I do with all my time?!" :-) I said how about those outreach emails you've been wanting to make for weeks to attract new customers!

Thursday, December 12, 2013

Let Your Customers Fund Your Software Startup

“Anything that won’t sell, I don’t want to invent.
Its sale is proof of utility, and utility is success.”

- Thomas Edison

I've seen hundreds of entrepreneurs spend more of their valuable time raising money than they do focusing on the true reality of what customers REALLY want to pay for. No matter how much funding goes into an organization, it's not a truly sustainable business until the revenues from it's customers cover all the expenses of the business. The only way I know of generating sustainable revenue FROM customers is to generate real value FOR them. Customer proof is the ultimate product proof.

Which is why I decided to get behind a new crowd-funding/pre-tailing site for software startups called Ramen. Where the "crowd" FUNDING the software are the potential users OF the software... they help fund (no equity involved) the software they would want and use. I love the idea of getting real customers to fund our businesses.

Thank you Niel & Ryan for making Ramen an option for startups! Which by the way, they are crowd-funding their own startup with their own potential customers (it's kind of like Being John Malkovich). I'm doing a matching sponsorship, so if you have a software idea that you'd like to test your CUSTOMER traction on as you build/design it and would like their help, well then help back Ramen too!... ANNOUNCING PROJECT MATCHING SPONSORS IN RAMEN TO THE TUNE OF $5000

1/22/14 PS - In full disclosure, Niel and Ryan choose to do an angel round prior to launching. Stay tuned for their follow-on "customer-funding" round.

Monday, December 9, 2013

Successful Turnarounds


I've been fascinated by business turnarounds since college... take an ailing company that's losing money and turn it into a profitable, sustainable company. I've been fortunate to help a few companies turn around and also love hearing other's stories. They all share these themes:
  • Revenue is flat or declining
  • Expenses exceed revenues
  • Additional capital is either non-existent or extremely expensive
  • Management and employees are scared or checking out
The key steps to turnarounds are:
1. Cut everything that isn't producing revenue/real value for the customer - until expenses are below revenues, including: expensive executive management, excessive product development, unprofitable biz dev or sales teams, product lines, office space, discounting, unprofitable marketing and advertising, commissions, ceremonial account managers, employee perks, charitable contributions, etc.

2. Focus intensely on the real value/products that customers want to buy by eliminating distracting non-core products and services

3. Renegotiate debt/payables to pay-out over time. Show an ongoing commitment to lenders and vendors by paying something every month. But, don't pay more than what the company can reasonably afford.

4. Go Open Book with employees and management. Show everyone exactly where the company was, is, and will be. Let them be a part of the turnaround. Meet weekly to review progress.

5. Bootstrap exciting new products that customers really want (Ford Mustang revival, Apple Ipod)

6. Enjoy the profitable fruits of having a leaner organization that delivers more value to customers.

Turnarounds are really hard for most to envision/lead because it takes a fairly rare leader who can see through to where the waste is in the organization (i.e. not delivering value to the customer), has the courage to actually trim to the core, the ability to instill confidence and ownership in those remaining, and the awareness to listen and drive the leaner organization to what their market/customers really want next.

I find it thrilling to uncover value and add life to old things, unlike most of my entrepreneur friends who get more excited about starting things from scratch.

Two turnaround books/stories that I LOVE are: The Second Coming of Steve Jobs (turnaround of Apple) and American Icon (turnaround of Ford)