Looking to disrupt a market?

2015 is shaping up to be a big year in Montana for Startup Weekend. With the Billings event already under our belt and three more scheduled this year (Great Falls, Bozeman, Butte), lots of people are looking for startup ideas.

One place that gets a lot of interest is “stodgy” established markets that are lucrative but neglected from a modernization and/or innovation perspective.

It’s easy to point out markets whose former leaders felt things were good enough. Those markets now have to compete with Craigslist, Uber, Airbnb, SpaceX, Apple iTunes, Spotify, Netflix, Amazon, Expedia, Kickstarter, Zillow and so on.

Ironically, some of these companies have awakened their markets to the point where they are now being disrupted by startups and in some cases, by the original leader in the market.

Things are as they should be in these markets. We earn the privilege to stay in our market every day. When we don’t, we often expose opportunity we’ve ignored, provoking someone to disrupt a market.

Resting on laurels

It’s easy to look at existing markets for disruption candidate because so many existing businesses invite competition simply by virtue of how they treat their clientele.

For example:

  • Do you work with businesses that take you for granted?
  • Treat you poorly?
  • Treat you with disdain?
  • Treat you like they’re doing you a favor?

dWhen a business leaves you feeling like one or more of those, it’s difficult not to consider what it would take to disrupt them out of the picture.

Want to disrupt a market? Disrupt yourself

Look back at that list. Does your business you make your customers feel that way? If they do, one way to fix it is to disrupt yourself. So where do you start?

Four ways that startups disrupt an existing business (or market) are through speed, improved customer service, decoupling and unbundling. Two of these are forgone conclusions that you simply cannot avoid, speed and improved customer service, while the other two are rapidly becoming assumed competitive angles.

Speed – No one’s resistant to the market’s need for more speed at the same or better level of quality. Conventional wisdom says that it can’t be done – “Pick any two: cheap, fast or good“, but conventional wisdom rarely considers what the startup list at the top of the page not only tried, but accomplished.

Improved customer service – To be sure, there are companies out there that do well both in revenue while treating their clientele poorly, but their days are numbered. One by one, they will be picked off – and I’m happy to help their competition do it.

Unbundling – Unbundling involves separating the sale of an item from the delivery of that item. Expedia is an unbundler. They took services offered by travel service providers and unbundled them from the provider who delivers them, made it easy to buy and search for what travelers needed, sold them and collected their cut. Expedia got substantial market share because they made it easy to find and compare flights without having to deal with each provider’ web site and/or phone tree. Unbundling has somewhat limited scope because it only happens at consumption / purchase time, which is why decoupling businesses started popping up.

Decoupling – A decoupler pulls apart the evaluate-select-purchase process that used to be performed at one established business. Decouplers focus on radical improvement of a single part of the process. For example, retailers face competition from decouplers who might mail samples to someone’s home, allowing them to skip a trip to the mall to decide what they want. Once the mall trip is eliminated, another step in the evaluate, select, purchase process might be removed elsewhere. Any point along the evaluate, select, deliver, purchase process is a candidate for decoupling. While the social aspects of that trip to the mall can’t yet be delivered to your mobile device, there are plenty of other ways to address shoppers’ social needs.

Try Startup Weekend Therapy

Stuck on how to disrupt yourself? Take part in a Startup Weekend. I’d be shocked if a weekend in that environment didn’t provide you with ideas and mindset adjustments to bring back to your business.

Want more? Here are a few links to startup idea resources.

http://ideamarket.com/founders.html

http://www.paulgraham.com/ambitious.html

http://paulgraham.com/startupideas.html

http://www.inc.com/rahul-varshneya/4-places-to-look-for-your-next-startup-idea.html

http://old.ycombinator.com/ideas.html (this list is aging, but they might seed a useful idea)

http://www.ideaswatch.com/

Omaha! Omaha! Omaha!” – Who knows, but it can’t hurt”

Broncos Defense

Any number of claims will be made about this weekend’s Bronco victory in the AFC Championship game, but one stands out above the rest.

Sponsorship evaluation firm Front Row Analytics said the city of Omaha got its money worth with each verbal mention of Omaha worth the equivalent of $150,000 in advertising.

This claim, from an ESPN story about Manning’s calls during the game – each of which generated donations to Manning’s Peyback Foundation, ignores marketing reality and most likely determines the value of advertising based on conference championship football game advertising rates.

Problem is, that’s not what determines the value of advertising – though it can impact the price.

While the PR and donation campaign by the Omaha Chamber is pretty smart, don’t even think about believing the claim that “each verbal mention of Omaha is worth the equivalent of $150,000 worth of advertising”. In no universe is this claim going to hold water.

It’s quite clear that Omaha Steaks’ SVP Todd Simon understands the nature of this project – in this quote from the same ESPN story:

“This is really great for Omaha as a community and for the businesses that are embedded here,” said Todd Simon, a senior vice president of Omaha Steaks, which his family owns. “Who knows whether any of this will translate to the bottom line, if ever, but it can’t hurt.

The emphasis in the above sentence is mine.

Don’t get me wrong. This was a very intelligent project by the Omaha Chamber and they should be quite proud of what they pulled off. It’s particularly impressive to see them jump on it so quickly and get something fun, beneficial and PR-friendly organized after last week’s game against the Chargers, where Manning said “Omaha” 44 times.

It’s also a great example of the “Use the news” tactic that we’ve discussed repeatedly in the past.

“It can’t hurt”

If each of Manning’s 31 mentions of “Omaha” are worth $150k, then Front Row should be able to describe how Omaha can track those mentions to purchase / investment and related actions made as a result. Obviously, I don’t believe they can do this. They can certainly inquire at every sale made over the next few months, but this is unlikely to produce results that would provoke someone into additional advertising investments.

Small businesses should not be investing their marketing budget in “who knows…but it can’t hurt” advertising.

Every bit of your advertising spend can be tracked so that you know whether it worked or not. Don’t let it out the door if it isn’t trackable.

Monkey See, Monkey Don’t?

Do you watch other business owners or mentors use techniques, technologies, strategies or tactics successfully – and then not try them in your business?

This isn’t just the domain of new, first time business owners who might be leery of trying something else, much less being swamped enough as it is.

Not long ago, I was sitting in a room with about 250 very successful business owners. Most of them had purchased the right to attend the seminar during a phone seminar or webinar.

While discussing entrepreneurs’ tendency not to stretch themselves (in particular regarding their sales/marketing), one of the speakers asked this question: “Everyone here bought access to this seminar during a phone seminar or webinar, so you know this selling mechanism works. Given that, how many of you use these types of seminars to sell your products?

No more than 20% of the people in the room raised their hand.

Remember, these are not new business owners. Most of them are running seven figure businesses. Yet most of them were not modeling the successful strategies that were working right in front of them – and in this case, strategies that had worked to sell them something.

What’s working right in front of you that you aren’t using?

 

Who will put you out of business? It should be you.

One of the questions I’ve learned to ask clients is “What’s next?”

As in, what are you thinking about for next year? (Much less the year after that)

It isn’t that what you’re doing today or what you’re launching next month is irrelevant, but it is important that you are already thinking about what you’ll deliver next year because you usually can’t create that / learn it / build it overnight.

You need to start soon, if not today.

But how do you know what to build / where to go?

Study

One way is to study what people smarter than you are doing / investing in. No matter who you are or how smart you are, there’s always someone smarter out there, so you may as well learn from their knowledge, vision and experience.

Another tactic is to study where groups are going that tend to lead your market.

For example, the “adult content” industry has been a technology bellwether for media-related innovation for years. Their direction in media use is uncannily accurate when it comes to predicting future trends in mass-market/consumer media consumption. Their corporate media / technology usage direction is what bears study, rather than their end-user product.

Another way to get an early view is to watch what startups are doing. Not all of them are technology-related, but it’s unusual to find one that doesn’t leverage technology in some way.

When it comes to technology startups and trends, a great source is Mary Meeker‘s annual Internet Trends presentation.

Mary is an experienced venture investor (and partner) at Kleiner Perkins Caufield and Byers. You may not have heard of them, but you’ve probably used something they invested in during its journey from idea to product/service. Twitter, Amazon, Intuit, Groupon, Google, Zynga are just a few examples of businesses they’ve funded.

So what does that have to do with you? You aren’t competing with Amazon (yet?) and maybe you aren’t in the software business.

Startups are everywhere

Startups are everywhere, not just in the software business.

I recently attended the Missoula live-streaming (a conference-related trend) of the Lean Startup Conference organized by well-known venture investor Steve Blank, startup CEO Eric Ries and investor Sarah Milstein.

If you look at the conference page, you’ll see some familiar (and not so familiar) names. The startups they represent range from web services to car rental (sharing, actually) to charter schools. Startups are not just about tech geekery and they aren’t limited to Silicon Valley.

The specific startups they’re working on aren’t as important as the trends they are seeing/starting and the markets they are changing/influencing.

Your own industry association is a good source of trend info, but don’t focus so closely on your own market’s leadership that you don’t learn from other industries.

Change is ever present

Change isn’t a constant, but it sure is persistent. Embrace it, leverage it or expect to be run over by it.

Two years ago, General Motors looked dead. GM’s November sales were its best in five years, likely a result of bailout-era changes gaining traction and hitting the market. GM’s China sales are up 14%.

Ten years ago, Microsoft looked unbeatable. Today, it looks a bit bleak per this trend graphic from Meeker’s slide deck. Time will tell if the Surface product line changes things.

Fifteen years ago, WalMart seemed invincible. Today, Amazon and Apple iTunes sell more music and online shopping is a billion dollar business.

Fifty years ago, AT&T was the only phone company in the U.S. and many people shopped at Woolworth.

The point?

Assume nothing. Asking yourself “What’s next?” shouldn’t be a reaction to losing market share/customers. Do it to avoid being made irrelevant.

Speaking of..Apple has had some less than ideal efforts recently. Before Jobs’ passing, they seemed untouchable and recently became the most valuable U.S. company in market cap – bigger than Exxon/Mobil. Despite all that success and momentum, they still have weak spots in their armor.

What are they doing about it? Reports surfaced this week that Apple is working on a order-of-magnitude phone product that’ll make their current iPhone product line irrelevant. They’re asking “What’s next?” before what’s next happens to them.

You should be too, no matter what business you’re in.

Stop Chasing Rabbits: A Productivity/Focus “Secret”

I don’t spend a lot of time writing about “the hows” of staying focused, but I do remind you now and then about the reasons that make focus so important.

For example, I closed the post A Thousand Dollars an Hour with “The goal? To do more of the right work. The work that advances your business in massive steps.

I hope everyone can relate to that.

There’s nothing wrong with what I might call “leisure reading”, but I suggest setting aside time for it rather than doing it during time planned for work.

One thing that really helps me is to avoid “chasing rabbits”.

Have you ever seen a dog chase a rabbit? Rabbits are incredibly elusive because of their ability to quickly change direction when running at high speed. What makes them so elusive: A body designed to make radical direction changes without losing much speed.

The dog might end up running half a mile or more within a football field and might never catch the rabbit. An overhead view of the path of a rabbit eluding a predator looks like the crayon scribbles of a two-year old. It goes everywhere, randomly… just like your afternoon spent doing random browsing.

Chasing links

Your productivity suffers the same thing on the web.

It starts like this: Someone sends you a link via email, Twitter or Facebook. You follow it, it leads to another page, which leads to another and the next thing you know, the afternoon is gone and you can’t begin to remember what you did for the last three hours.

If you have the discipline to open the link in a browser tab and then not read it, you might end up with 20-30-40 browser tabs open. Not only does that slow your machine / browser down, but it’s a buffet of ready-to-serve distractions just waiting to suck you in.

Some folks might bookmark the links to get them out of their face (and out of mind so they can get back to work), but I’ve found that people rarely read the stuff they bookmarked.

Bookmarking misses the mark

Bookmarking works because you don’t have to worry about the tragic loss of that critical link that you know you need to read (a dash of sarcasm?).

For me, traditional bookmarking wasn’t effective, even via Delicious. Too much clutter? Too many clicks? Not in my face to remind me I had reading queued up? I don’t know.

What I do know is that Instapaper has, for the last few years, been the #1 “secret” tool that keeps me focused during the day.

Links come at you all day long. Click one, start reading and the next thing you know, the afternoon is gone.

Instapaper to the rescue

I don’t know why the subtle differences between Instapaper and simple bookmarks are enough to make this so much more productive for me, but they are.

Maybe it’s because I know those links will be in Instapaper when I’m in reading mode. Maybe it’s because I can archive with 2 clicks and instantly move to the next article. Maybe it’s because the queue of reading is kept in sync from my laptop to my desktop to my iPad and iPhone. Maybe the ease and speed of the Read Later bookmarklet does it.

I suspect the marriage of those things is what makes it work for me. I noticed a significant difference once I started using the free Instapaper Read Later bookmarklet. For me, it was the real key to quickly eliminating the tempting distractions without losing important reads.

If you have a Kindle, this page shows how to make Instapaper links automatically go to your Kindle.

I hope this helps you do more of the important, valuable work…all without missing out on XKCD.

PS: I’ve added a Read Later link to the bottom of posts, if you can’t use the bookmarklet for some reason.

What did you get?

It’s critical to get regular feedback from your clientele about what you do – to that end, I have a favor to ask…What do YOU think?

What value does BiP bring to you and your business?

What brings you back to it?

What’s improved as a result of actions prompted (in any form) by BiP?

What could you use more of?

What could you use less of?

What would most help a business owner friend of yours…if they only knew about BiP?

I have my own ideas about these things, but I’m curious what you think.

To that end…what are you asking your customers? What message are they sending to you? Are you being a good listener?

Do you know what you’re missing?

On NPR not long ago, the Postmaster General spoke about the US Postal Service’s financial situation.

At the close of the interview, the Postmaster made a point of saying that he doesn’t pay any bills online, noting that it wouldn’t be right for him to do so. I suspect he probably feels that it wouldn’t be right if he used FedEx or UPS.

In fact, the truth is just the opposite.

Using these services would help him understand his competition’s offerings from a consumer perspective, and see where his agency is lacking, both in service and in their offerings.

If you aren’t at least familiar with the customer experience of a product/service that is taking you to the cleaners, you’re unlikely to understand what the attraction is much less the weaknesses and potential new opportunity ideas they might give you.

Even if you plan to stick with your current product, it will help you see new competitive angles, perhaps even new markets.

You aren’t likely to find all innovation within yourself. You also won’t find it all by studying your competition’s offerings, but it is worth the time to study the things customers have left you for – if you expect to get your mojo back.

Do you see the future or the fingerprints?

While watching this, some will complain about the system running Windows, while others will wonder aloud why anyone would want to use it, grumble about specific features, or wring their hands over privacy implications much less the cost.

Some might even focus on the hassle of removing fingerprints from the advanced technology’s surfaces.

What do you focus on…the future or the fingerprints?

Did You Know…That You Should Follow Up?

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Creative Commons License photo credit: antaean

If you look at the path a prospect follows on the way to becoming a customer and then, at their path as a new customer; youâ??ll see plenty of places where it would be valuable for them to receive an occasional tap on the shoulder.

With that tap comes just a little bit of info, but it won’t/shouldn’t always be a sales message, at least not explicitly.

Consider these 3 little words: â??Did you know?â?

They start sentences like these:

  • Did you knowâ?¦ that if you get stuck, we have 24 x 7 customer support lines?
  • Did you knowâ?¦ that 90% of businesses fail after a fire destroys their business – and much of that is because they are underinsured. Those who might have made it often donâ??t because they donâ??t have their current customer/order data backed up, which means that on fire day + 1, they have no idea who needs a follow up, who placed an order yesterday, etc. Using the automated backup feature in our software can save your business. Weâ??ll be happy to show you how it works.
  • Did you knowâ?¦ that many of our customers find our software’s dashboard feature motivational to them and their staff? Here’s a link to a video showing you how to turn it on.
  • Did you knowâ?¦ that we offer a 180 day money back guarantee? Thereâ??s simply no risk to putting our product/service to work for you.
  • Did you knowâ?¦ that we offer free online training videos that are broken down by function and only last 2-3 minutes? You can take a brief break, learn what you need to know right now and get back to work.

You get the idea.

Look at the typical timeline for a prospect.

Where do YOUR prospects need a little bit of assistance, a hand on the shoulder or a Did You Know?

After theyâ??ve bought, when do they need a little help? For customers youâ??ve had for months or years, are there new features or new things you do for your customers? Put each of these items in your follow up system and let them know when it is appropriate for each customer.

They can be emailed and blogged, but they should also go out in your printed newsletter.

You *do* have a printed monthly customers-only newsletter, right? 4 pages is enough. Seems like a little thing but itâ??ll never get ignored if itâ??s good.

All of these things put together will start to build a follow up system that no competitor will duplicate. And thatâ??s exactly what we want.

One way to create sustainable jobs

Recently, the Flathead Beacon published a story about a global tech-oriented business that continues to grow right here in rural Montana.

This business started from scratch and achieved critical mass…

  • Without tax breaks that often encourage unsustainable business models.
  • Without specially crafted laws that treat their industry or part of their industry “more fairly” than others. Rhetorical sidebar: What exactly is “more fairly”?
  • Without the work of half a dozen lobbyists in Helena or Washington.

In other words, they started just like your business likely did, probably using the same methods most small business owners use – the same thing that I suggested when we talked about the fitness center just a few days ago.

They found a need and they filled it.

Several years back, I remember sitting in a coffee shop next to someone interviewing a candidate for a job with what was then the startup roots of the company discussed in the article.

The discussion and the numbers I overheard told me they were serious, sustainable and positioned well. I’m really glad to see this business continue to grow.

In good economies and bad, your business model has to make sense on its own, no matter what’s going on in the state capitol and DC, and no matter who is in the White House.