Aren’t We All Startups?

Maybe you should stop introducing yourself as a Startup and simply say what you’re business is successful at delivering.
John Kobel

Background

In my last post – Start Hanging Out With People Who May Have Your Solutions, I reiterated the value of Steve Blank’s “Get Out Of The Building” and Mark Suster’s post “Why You Need to Take 50 Coffee Meetings”. Here’s an example of the my Return On Investment (ROI).

Aren’t We All Startups?

After watching me pitch over the last few Westmount Networking Breakfasts, John Kobel offered me some friendly advice. He suggested that people may avoid doing business with a Startup because it sounds risky. People want to do business with successful people with a proven track record.  So when it came to my turn to pitch, I shared John’s advice & dropped the “Startup” from my opening 🙂

But as I listened to everyone else’s pitches, I couldn’t help but notice that we’re all Startups – in one form, or, another. Yes, some have established businesses behind him and some have been at this longer than I have. But in the end, we’re all pitching. We’re all searching for the right words to connect with someone listening & open the door to building a relationship.

The problem with networking meetings in general – not just our’s, is that we’re usually pitching to the same crowd with a few visitors.  Now I understand these meetings are more about developing long-term relationships that typically pay off over the years.  But there are lessons to be learned from all these Coffee Meetings (and other events) and no reason they can’t deliver an earlier Return On Investment. That’s when I had my Light Bulb! “Ah Ha Moment”. All I had to do was start listening to the customer & find early adopters who, not just want the service, but truly need it.

One-Liner

Nearly All Consumers (97%) Now Use Online Media to Shop Locally, According to BIA/Kelsey and ConStat, March 2010. How many are finding you? Give us your sales pitch and we’ll connect them with you, right from your Inbox. Forget about managing search engine marketing campaigns, web sites and even qualifying the leads. Our metrics prove we can do it all for a fraction of what it would typically cost you. We are ReverseTheSearch.co.

I need to work on our true customer – the supplier, landing page but that’s the big idea. From a Pivot point-of-view, there’s really no change to the core principle. In fact, we’re actually trimming away a lot of the Waste and starting over with the Minimum Viable Product.

Next Up

I’ll fill in some blanks with the Elevator Pitch version coming soon. But in the meantime, feel free to contact me with any thoughts.

Start Hanging Out With People Who May Have Your Solutions

Stop staying around people who have your problems and start staying around ones who have your solutions.
Jeffrey G. Allen, Instant Interviews

Background

About a month ago, I was at local Startup Drink night and met Mohd Shahnawaz. Crying in my beer about my inability to get traction for my startup, Mohd recounted Jeffrey G. Allens’ quote & suggested I try finding events where people may actually have the skill-sets I looking for.  Oddly enough, my favorite Startup Lessons Learned is Steve Blank’s “Get Out Of The Building”. Unfortunately, my myopia equated it with Customer Development & not recruiting. But as luck would have it, I had just received an email inviting me to the weekly Westmount Networking Breakfast & figured that’d be the perfect place to start.

Westmount Networking Breakfast

With about a dozen people in attendance, we went around the room giving our respective 60-second “info-mercials” (or, “Elevator Pitch” in geek-speak) and concluded by describing the perfect new contact we’d like to meet.  Being the week after the International Startup Festival, I figured my pitch was in fine form. I figured wrong! It was met with confusion. However, it did validate that I definitely needed someone in Marketing.

During the meeting & over the next week, I met with some & gathered more & more feedback.  As each week went by, I tweaked my Pitch & tried my best to come up with something that not only resonated with the audience but had potential to even help some.

Going For Coffee is Not a Waste

This morning, I was reading Mark Suster’s post “Why You Need to Take 50 Coffee Meetings” & posted the following Comment:

As a techie startup, not every challenge can be resolved writing code – like Customer Development (Steve Blank).  Instinctively, going out for coffee seems to align more with Lean’s definition of Waste (“Any human activity that absorbs resources but creates no value”, Taiichi Ohno, Toyota Production System.) But nothing can be further from the truth. Providing you’re not going out for coffee to listen to yourself pitch, or, drink your own Kool-aid, getting out offers  huge opportunities to save precious time & resources.

 

Recently, I started attending a weekly business networking breakfast of 10-15 regulars where we all take turns presenting what we do (Elevator Pitch) & the ideal contact we’d like to make. And while I’m the only Techie Startup, everyone else in the room is pretty much a Startup, whether they’re a Small Medium sized Business (SMB), or, an agent for a larger organization.  Personally, I love presenting/pitching, so I look forward to every meeting where I could tweak & tune my Pitch, hoping it aligns better with the audience’s needs. It’s a lot cheaper to change a 60-second Pitch than to keep cranking out scalable code that customers will may never execute.

 

For those who shy away from presenting, there’s no better place & forgiving audience to practice in front of, week after week.  (Steve Jobs doesn’t wing it.) Going for coffee is not a Waste – it’s a opportunity. Blowing a face-to-face potential stakeholder (employee, business partner, customer) meeting, now that’s a Waste.
Thanks Mark for drawing those thoughts out of me. I feel a blog post coming on 🙂

Lessons To Learn

Read Mark’s post, join a local business networking group, go beyond “Getting out of the building” and “Coffee Meetings” and “Stop staying around people who have your problems and start staying around ones who have your solutions.”

My Sustainable, Repeatable, Scalable Startup Lessons Learned

A startup is a temporary organization formed to search for a sustainable*, repeatable and scalable business model.

Steve Blank (*Ash Maurya helped me with “sustainable”)

My Prezi Startup Lessons Learned - #1 Lesson

My Prezi Startup Lessons Learned - #1 Lesson

Mantra

This is my #1 lesson learned. Regardless of the situation, the first questions that come to mind when considering any course of action is

  1. Is it sustainable?
  2. Is it repeatable?
  3. Is it scalable?

Used Car Pivot Scenario

For AnotherSocialEconomy’s used car vertical, we experimented using Google Adwords for our used car Customer Channel. We had a daily budget of $10 for our English Campaign & $10 for our French Campaign, both set to the greater Montreal area. Initially, our Cost Per Clicks were around $2 but after some tweaking & some special sauce we got them down to $0.72. (Read the documentation. It’s all in the Quality Score!) And within 10 days, we actual “sold” a car. Not bad, eh? That’s the good news.

Based on our Customer Interviews, we wanted to validate our hypothesis that car dealers would be willing to subscribe to our lead generation service, once we proved we can deliver leads – despite spending one tenth (ultra conservative) of what they’d spend on their monthly advertising.

Business Model

Revenue

The beta would be free but with the understanding that dealers would pay a monthly subscription of $250 – which includes 25 free Proposals.  After that, it would be $10 a Proposal.  Since many managers also were skeptical of their sales reps being able to deal with the emails, we’d also offer a Managed Service for double the price.

Costs

We were spending less than $600 a month on creating Demand. But there were hidden costs. Each new Consumer’s email address had to be validated. Then each new Demand had to be qualified since most of them were for something like “BMW 335i”.

From the car dealer’s perspective, we wanted more than a URL and “Have your customer call me” response. We wanted them to take advantage of the situation and offer some incentive for the Consumer to contact them.  We wanted them to think like a “Nordie”.

Lesson Learned

Is it sustainable?

No. The Car Dealer Pivot Customer Channel was simply too expensive to sustain with the current Revenue Model. However, while none of the dealers wanted to pay subscription fees, most were willing to pay a finder’s fee which could justify the Adwords expense.

Is it repeatable?

No. The Car Dealer Pivot was simply too complicated. Our original idea was to go after Consumers looking to buy something more precise – like a “Wii Super Mario game”. Something that a retailer either has in stock, or, doesn’t. There’s just too many variables in used cars to repeat the process in another vertical.

Is it scalable?

No. The Car Dealer Pivot required a lot of manual intervention on both the Consumer side, as well as, the Retailer side.

Bad Pivot?

No. The Car Dealer Pivot was not a bad move because we learned a lot. For example:

  1. Customer Development: We should have interviewed more dealers. Although we did have enough Early Adopters to launch the beta, we should have qualified them better. We didn’t want to take any money until we knew we could deliver qualified leads. And when it came time to “sign” they crapped out.
  2. Customer Channel: We learned a lot about Google Adwords and I think we got pretty could at it even after only a few weeks.  I still think it’s a good channel for us to find Consumers. Our biggest oversight was the dealers’ unwillingness to participate.  We still don’t understand why someone making commission on a used car won’t reach out to a local prospect.
  3. Unique Value Proposition: We should have stuck to our original vision of connecting Consumers who know exactly what they want – like a “Wii Super Mario game”, to local Retailers who either have it, or, don’t have it in stock.
  4. Get Out of the Building: We definitely got out of the building. We definitely exercised our bits.
  5. Problem/Solution Fit: Every Consumer we spoke to outside of the Building can identify with the Problem/Solution. However, that’s not the case for used car dealers (Retailers). Their Solution requires the Managed Service which, unless funded by the car Manufacturers, is simply too expensive for us to pursue. And while we have a Pitch for that, even “validated” by a few insiders, we already learned our lesson and choose to move on.

Up next

Stay tuned as I drill-down into my My Prezi Startup Lessons Learned.

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