Expand your Limits

 

Whether you’re building or growing a new startup, or creating a new division within a larger company, or growing your company, aligning all the key elements to create a successful and scalable business requires careful planning. Pulling from my 20+ years as CEO, I have put together A SIMPLE BUSINESS GROWTH MODEL that can help guide you as you grow your company and may be act as a check list to identifying weaker areas.

It is important to be deadly honest with yourself as you assess what you already have, where you are weaker, and what you’re missing to build a highly successful company. You may refer to the graph which starts at the bottom as I take you through each building block and level.

 Level 1 – START WITH A WINNING PRODUCT

Often, entrepreneurs or inventors are over-excited about their ideas. While having a good product means you are in the game, it doesn’t mean you will win the game. In fact, I often remind entrepreneurs that what they need to build is not a product but rather a successful business. On level 1 as it relates to product, here are 4 key aspects the product should have:

1. Deliver tangible value to users
2. Is distinctive enough in the marketplace (distinctive positioning can play a role here)
3. Is scalable
4. Has a strong enough revenue growth potential

If the product does not have these 4 aspects, consider tweaking the product, re-inventing it, or exploiting a totally different and new opportunity!!!  Too many times, the natural behavior is to go ahead full force with at best, an average product.

 Level 2 – 2 MISSION CRITICAL EXPERTISE REQUIRED

At the early stage of a startup, you need two amazing key people: a product expert and a strategy expert. The chief product officer needs to have a deep understanding of what the customers want, where are the current “need gaps” and for which market will the product be suited.

Knowing the product inside and out is critical but driving forward the product road map based on the customer’s needs is even more crucial. Testing, tweaking, and having an agile dev process to respond to evolving customer needs and feedback are key to the effectiveness of your product development strategy.

As importantly, you need a strategist that can take the idea or product and create an orchestrated business plan that will translate into reality, raise money, and generate real and scalable revenue.

 Level 3 – DEFINE THE STRATEGY & POSITIONING

Here, the strategist articulates the details of the strategy and the positioning for the company in order to raise money and scale revenue and the company. He or she gives a clear direction for the business that is directly based on research and the real needs of prospective customers.

That person creates the financial and revenue model for the company, establishes the key metrics for success, and establishes testing plans to validate all assumptions of the business model. The 3 key parts of the business plan are:

1. Defining the brand, the unique value proposition and the target market and positioning
2. Defining all the sub-strategies for each parts of the business
3. Establishing key performance indicators or metrics

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While this topic is short of being new and exciting, igniting your employee’s talent often gets overlooked as the company grows.

As per my previous blog, keeping employees enthusiastic is one of the “4Ws” of very successful CEOs. This blog post brings the focus back to the employees and paying attention to a company’s biggest asset: its people.

Let’s talk about Google, one of the biggest and most profitable businesses in the world today. It also happens to rank as the best company in the world to work for. Profits are up, and so is employee satisfaction.

When you go around the Googleplex, you’ll be astounded at the number of smiles you see and it might rattle you to see for yourself what social scientists have long been saying in theory: motivated and happy employees are productive employees.

When companies continuously dedicate efforts to creating a winning culture and environment, this propels the company from being merely good to exceptionally great. Everyone would be saying, “There’s something special about this company”.

Another one to watch is Shopify and how it’s focusing on its employee environment.  Here is a “must see” video where the culture and motivation of its employees is at the core of their growing successes.

But what exactly does it take to motivate an employee?

Old school managers would tell you that motivation is all about the fulfillment of needs. Maslow proposed that people fulfill needs according to a hierarchy, with the basic needs going first and self-actualization going last. Maslow’s hierarchy revolutionized the employee motivation environment with such great impact that, half a century later, CEOs are still using it.

But is Maslow still relevant? Is motivation still about fulfilling needs in order and do incentives work? People are driven by incentives and in this, Maslow is right. However, finding the right incentive is the question. The hierarchy of needs just can’t predict what needs and incentives people will prioritize in today’s modern society.

What’s wrong with the traditional motivational method is that it’s transactional. The hierarchy of needs doesn’t really motivate employees: it just makes them work. Dan Pink even found through an experiment that people might be less motivated by monetary incentives than what traditional managers might be led to believe. Salaries, bonuses, and others: these don’t make a person get out of bed to go to work anymore. So what does?

What Keeps Employees Enthusiastic? 

1. Purpose and Meaning. 

Today’s employees want to matter. This generation wants to make a difference. They want to be initiators of change, as opposed to just being drones churning out cash. In order to motivate today’s employee, you have to clearly outline what the company’s about, where it is going, what it is striving to achieve, and how your employees’ work matters.

Research by psychologists reveal one startling fact: employees don’t go to work for money, but for the feeling that they are making progress towards a meaningful goal. Getting your employees excited about your goals will go a long way in promoting productivity. Sharing the company’s long-term goals makes employees feel they are contributing to something great, while giving them a clear picture of short-term goals encourages productivity.

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In today’s increasingly competitive marketplace and with most markets moving at lightning speed, having an effective CEO can greatly contribute to the success or failure for any company. He or she is the living embodiment of what the company stands for and what it is striving to achieve and it’s a proven fact that a great leader attracts other talented employees and executives.

In my 20+ years of successfully building and growing businesses, I witnessed the varied demands of the CEO job. Stepping back, four critical success factors in building successful corporations stand out. I call it the CEO’s 4 W’s to Success: “The Where”, “The What”, “The How”, and “The When & How Much”.

1) “THE WHERE” –> STRATEGY & VISION: Where are we going?

With a CEO’s skills and the help of the board, team, and customers, an accomplished leader begins with painting a clear roadmap for the company. A successful roadmap is said in the fewest words possible, ideally presented visually, and comprehensive enough to define a sub-plan for each part of the business.

Nothing should be left to guess work. This includes the vision, mission, company positioning, product and market focus, company culture & employee strategy, go to market strategy, financing, industry presence, and so on. And an experienced CEO delegates enough in order to have the time to continually create, evaluate, and refine the company’s strategy.

2) “THE WHAT” –> PRODUCT FOCUS: Is our product leading?

Not all CEOs can get obsessively involved with their product like Steve Jobs or Mark Zuckerberg. Ideally though, great ones will have a hand in creating that successful product which should combine 4 key aspects:

a)   The product is truly valuable to customers (do your customers love your product)

b)   The product is distinctive enough in the marketplace (are you different in the marketplace)

c)    The product is scalable (can you grow it big)

d)   The product can generate very positive cash streams (can you generate much new cash with it)

Too often the CEO, entrepreneur or product manager, gets excited about their idea without looking at the market. It is paramount that strategies are derived from customer’s needs as the desired end result is to generate happy customers in a scalable and profitable manner over the long run. Ideally remaining one step ahead of the competition in terms of innovation, yet not too ahead, or the company can burn cash waiting for progressive customers.

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I remember when I sold eFundraising.com in 2000.  Rob, an investor and advisor said, “Boys, don’t be greedy. Take the money that is on the table and run.” Most wanted another $10M to $20M based on what our competitor, PopShop, was valued at.

It was good advice.  As it turned out, we agreed to sell for less, closed for $17M ($27M CDN), and in less than 30 days the market crashed. Timing can be everything!

Certainly, Groupon deserves a big applaud for having pioneered a new digital media approach of charging local merchants a 50% fee on transactions, pre-selling coupons online, and promoting them virally using social media. This new type of pre-paid coupons and inviting local merchants to advertise online was a brilliant idea. You have to wonder why you didn’t think of it. Continue reading →

The deals landscape is changing. Where there used to be just a handful of services providing daily deals and offers, it’s now an entire global industry. There were 700 such sites that were launched in 2010, ranging from big players that cater to the entire spectrum of shoppers nationwide to niche sites targeting pet owners, soccer moms and college students. Continue reading →

Nothing is more enticing than a freebie, discount, or special offer. Ever since a cereal manufacturer invented coupons a century ago, these tiny pieces of paper have turned into a marketing mainstay, utilized by businesses of all types and sizes. From tickets to newspaper clippings to mobile, coupons have grown to become a massive multi-billion dollar industry. Continue reading →

It’s true, the hype surrounding daily deals is dying down. As a consumer myself, a 50% off on anything will certainly pique my interest but to the market as a whole, the increasing number of sites entering the space (it’s not difficult to duplicate, after all) and the deluge of emails that it brings are beginning to take its toll on online consumers. In fact, traffic to sites like Gilt and Groupon has been declining over the past few months. Continue reading →

With The New York Times launching TimesLimited, a daily deal service for their subscribers, I think it’s high time for local media to rethink the way they do business. The NY Times is trying to leverage their advertiser relationships and market reach and I believe local TV, newspapers and radio should take the same approach if they want to remain relevant.

Local papers, TV and radio all have one thing in common: they know their audience well. A news team for a local paper works in the same town it writes in, is embedded in the culture of the area and even has personal relationships with the folks living there. It’s obvious that there is a strong connection with Continue reading →

Smartphone adoption has really grown in leaps and bounds over the past year. In fact, more smartphones have been shipped out versus PCs in the fourth quarter of 2010. Mobile apps are also booming as a result, with users downloading something between 14 to 40 apps per device. That might not mean much at first glance but multiply it by several hundred million devices out in the wild and you get a truly staggering number.

Mobile device usage has become second nature to a lot of people and coupon publishers and advertisers need to take a closer look as to how it will be affecting them in the future. Here are a few things to expect as mobile phones and other devices become more common: Continue reading →

The numbers don’t lie: advertising for local businesses is gaining steam. According to TPG Marketing, traditional media like TV and magazines ads have dropped by 11 and 15 percent, respectively whereas online and phone advertising are still going strong at a rise of 11 and 18 percent, respectively.

A large portion of the money flowing into online advertising is due to the increasing interest in daily deals and group buying. Several major web properties like Google and Facebook have begun exploring this market, with incumbents like Groupon and LivingSocial adding in new features to keep out the competition. Local and hyperlocal deal sites that cater to certain verticals like organic produce or fashion are carving their own niche in the space as well. Continue reading →