Everything is Going Great! – Wink, Wink

File:Sad Clown October 31, 2007 (1878611309).jpgThe most common question entrepreneurs get about their business is “how are things going?”

When I get this question I always pause for second while my life flashes before my eyes. Then for 9 out of 10 people I say “everything is going great!” and try to move on to talk about something else.

It doesn’t matter if things are going great or going awful, or somewhere in the middle, I’ll give that same response to most people. I give this response simply because in the case when things are not going so well, I’ve noticed that most people feel as if they need to give you unsolicited advice.

I understand why the urge to offer advice is the instinctive response. It’s an easy way to show empathy to a struggling entrepreneur. The truth is, however, getting back-seat driver advice as a side-bar to an unrelated conversation is useless and potentially offensive.

So unless you are a business coach, mentor, parent, or spouse, it’s best to avoid this line of questioning altogether unless your entrepreneur friend brings up their business to you first.

Business Model Patterns with a Unique Selling Proposition (USP)

File:Sphynx - ChickenCat - edit.jpgIt’s important that both first-time entrepreneurs and struggling entrepreneurs study the patterns of business models, then choose one to implement. I share the reason why in this post here. What’s just as important is picking a pattern for your unique selling proposition (USP).

USP is a fancy marketing term for “why” your customers would pick you over your competition. This “why” is not a combination of this and that. This “why” is a very specific thing that is clear, simple, and can be communicated to a 2nd grader in one or two sentences max.

If you apply your USP to a business model pattern, you’ll move from implementing a me-too business model into the realm of business model innovation. In the book Business Model Generation (which I highly recommend), there is a section closely related to this concept called Epicenters of Business Model Innovation. The authors share these four main epicenters of innovation:

Resource Driven When you leverage some unique strength (partnerships, labor, real estate, hardware, intellectual property, or financial) to offer an unusually valuable product or service

Offer-Driven  When you are able to substantially reduce cost/risk or substantially increase performance, convenience, usability, or customization based on the way you do business.

Customer-Driven – When you’re able to provide a product or service to a customer segment or industry that previously couldn’t afford or couldn’t use it.

Finance-Driven – When you create an unusual revenue stream within your industry.  This could be through lending, renting, leasing, or licensing fees.  In addition, you could apply brokerage fees, sell advertising, or provide volume pricing in an innovative way.

With these four main epicenters in mind, my recommendation is to use them as a template for creating your USP. For example, if you are a web designer you could use the offer-driven epicenter to develop a USP for specializing in 24 hour turnaround websites since the competition usually takes weeks or months to complete a project.

If you are a personal trainer who also enjoys cooking healthy foods (or have a partner that does), you could use the resource-driven epicenter to develop a USP for specializing in both being a personal chef to help you clients eat healthily and their trainer to help them exercise properly.

Without a doubt, starting with one of these patterns when thinking about your USP makes things easier. If you need help brainstorming using this method, please don’t hesitate to contact me as I would be happy to help.

Picking a pattern for your business model

Business Model GenerationI’ve been studying business models for a couple years now. The one thing I discovered about business models that’s most useful for entrepreneurs are the patterns.

My introduction to business model patterns started with the book Business Model Generation.

This book covers a variety of business model patterns applicable to both large enterprises and entrepreneurs. The basic patterns from this book that apply to entrepreneurs include:

The long tail business model Selling niche products and services to a large number of customers not being served by the mainstream. This is sometimes referred to as Selling Less of More.

Multi-Sided Platform Selling to two customer segments by offering a (free) product or service to attract a large number customers in the first segment, then selling access to that segment to the second segment.  Selling advertising on an information website is a good examples of this.

FREE as a Business Model Marketing free products or services to attract a large number of prospects, then convincing a small number of those prospects to convert to paying customers. This is sometime referred to as a Freemium business model.

In addition to these business model patterns, there are a variety of traditional patters not covered in the Business Model Generation that apply to entrepreneurs.  For example, there is the foot traffic business model used by brick and mortar shops and restaurants and the seasonal business model used by tax accountants and holiday retailers, among others.

If you look at each pattern carefully, you’ll see that business model patters have nothing to do with a business’ value proposition (i.e. the product or service).  Instead, the pattern has everything to do with the technique used to acquire paying customers.

Discovering this was the Aha! Moment for me.  It helped me notice how first time entrepreneurs (who usually fail) spend 80% of their startup effort on their product and 20% on their customer acquisition strategy. While seasoned (and usually successful) entrepreneurs flip it.  They spend 80% of their startup effort of their customer acquisition strategy and 20% on their product.

With this insight in mind, I now believe that the most important thing first time entrepreneurs (or any entrepreneur who’s struggling) should do is study the business model patterns, then pick one to implement.

How to End Proofreading and Grammar Mistakes While Blogging

File:Dictionary discard2.JPGMost people think the hard part about blogging is coming up with blog topics. This isn’t the hard part. If you’re a decent writer, you can make an interesting blog post about a cup of coffee. The hard part is proofreading and grammar.

With the amount of noise from blogs increasing exponentially day by day, being a witty writer is not enough anymore. Your biggest fans (i.e. your mom and dad) may forgive the occasional typo. However, that same typo will cause a casual reader to write you off as a fly by night amateur not worth following.

The obvious way to overcome death by a thousand typos is to have a quality copy editor review your blog post before you publish. As we all know, unfortunately, this is a luxury most independent bloggers can’t afford.

That’s why I recently signed up to try a new product called Grammarly to help automate the tedious task of proofreading my blog. Grammarly is an online software tool that goes beyond the basic spell check you get in WordPress or within your browser. For example, Grammarly finds these often difficult to spot mistakes:

  • subject-verb agreement
  • bad word choices with synonym suggestions to improve readability
  • style mistakes such as run-on sentences and comma splices
  • plagiarism detection & citation help

Grammarly even has a Microsoft Word plug-in if you write your blog post offline before you publish. In addition, one of the features that I love is that, over time, it learns your most common mistakes and then helps you understand how to avoid them.

I started with a free trial to decide if I want to pay to use it as my full time proofreading buddy. You can start a free trial using this link. By the way, the free trial requires a credit card, but I think it’s worth it.

When progress is not measurable

File:Deep Thinking by Wissam Shekhani, ink on paper.JPGMost people think of “progress” as something measurable. Something that is quantifiable using a percentage complete. Something that is visualized with a progress bar or a pie chart.  For most of life, this is true.

When you’re making your way from elementary to high school, its easy to see your progress after each grade is completed. When you’re making your way through college, it’s easy to see your progress after each semester is completed.  When you’re working on a project at work, it’s easy to see your progress after each task is completed.

These are all examples where there is a clearly defined list of activities to complete, where there is a blueprint. But this isn’t your reality anymore because now you’re doing something that’s as clear as mud and has no blueprint.

Now you have no idea how much must be done to complete your goal. Now you don’t have anyone to guide you step by step. Now you don’t have a trail to follow. So how do you measure progress now?

In this situation, progress is not measured by crossing items off a list. As a matter of fact, progress is not measured at all.

Instead, progress is an expression of discovery.

Discovering what works and what doesn’t. Discovering systems and processes that deliver repeatable results. Discovering the time of day where you’re most productive. Discovering your strengths and weaknesses. Discovering, discovering, discovering…

Every time you discover something, you make a little more progress.

Breaking your addiction to free SEO and social traffic

File:DVP Congestion.pngYou probably run a website just like me. You also probably see your website as a critical component to get your business to take off.

The only thing you need is more traffic. More free traffic.  If you just could get a million visitors to your site every month and convert only 1% of that traffic to paying customers, you could retire.

It’s been done before.  Some obscure website comes out of nowhere to get ranked #1 for some hot keyword by Google or gets retweeted by some celebrity with millions of followers…and boom. A millionaire is born. That free SEO or social traffic changed everything.

So everything you do centers around getting free traffic using SEO and social media . Optimizing your website for the right keywords, creating viral content for YouTube and Facebook, building your followers, commenting on blogs, submitting press releases, etc., etc., etc…

All it takes is that one breakthrough viral video or blog post, that one breakthrough retweet, that one connection that delivers that winning lottery ticket.

I call it a lottery ticket, because that’s what it amounts to. Building a business that depends on free traffic for success is not only risky, it’s foolish. You shouldn’t do this just like you shouldn’t depend on a lottery ticket to pay your bills.

My advice is to build a business that doesn’t depend on free traffic for success. Since every web business is different, there is no cookie cutter solution that I can tell you about. I can tell you, however, it probably involves learning new skills and/or getting professional help.

Seth Godin’s Take on Business Models

File:STC New Wing CPK.jpgAs I shared a few weeks ago, I’m taking Seth Godin’s new online course titled The New Business Toolbox: Help Your New Business Do It Right The First Time. In the first session, Seth decides to start off by breaking down the idea of a business model in simple terms.

The way he explained it really made a light bulb go off for me.  He describes a business model in terms that helped me create this equation.

V x L = R

With V being Value, L being Location and R being Revenue. Godin explains in so many words that when assessing your business model, location is more important to revenue than the value you are selling. To explain his reasoning for this, I will use an example of a pizza shop’s business model to keep things simple.

Most pizza shops offer a similar value proposition – tasty pizza at an affordable price. Assuming all things being equal in terms of taste and price (no pizza entrepreneur starts off with the dream of making the most expensive bad tasting pizza in town), then the differentiating factor between pizza shops is all about where that pizza shop is located.

If it’s a pizza shop located in the mall, the business model is simple…sell pizza to the people who come to the mall.  If the pizza shop is located in a city’s business district, then its business model is to convert foot traffic during lunch time into customers. If the pizza shop is located in no man’s land near a sprawling suburb, then its business model is delivery.  As you see, the factor that impacts the business model more than anything else is the location of the pizza shop. It impacts the price they charge, their marketing, their operating hours, the type of people they must hire, and how they handle customer service.

That’s why pizza shops located in the mall don’t deliver. It’s also why you can argue over the best pizza in town all day, but most people won’t drive across town for that great pizza when they can get decent pizza 5 minutes away.

We’ve all heard the real estate mantra LOCATION, LOCATION, LOCATION. Well this is an obvious concept to apply for brick and mortar entrepreneurs who sell in local markets, but not so obvious for everyone else.  What Seth Godin did in his first session is explain why you should apply this simple concept to any business model using location as a metaphor for a customer acquisition strategy that scales.

If you haven’t already, you can sign up for Seth Godin’s course and get a $10 discount using this link here.

To-do lists as menus vs. scheuldes

File:Joey K's daily specials.jpgTo-do lists are an essential part of a productive day for many people. I tend to prefer a to-relax list over a to-do list as I explain here. However, when your plate is full with menial tasks that just have to get done, to-do lists are still the best way to get focused.

Unfortunately, I’ve had a lot of menial tasks on my plate to start the year so I’ve been using to-do lists pretty often. One of the things I noticed is that based on how much time I “think” I have, I will create my to-do list differently.

On the days I allow myself time to sit and really think about my day, I set-up my to-do list like a schedule. I look at the hours I have in the day, the tasks I have to work on, and how long each task will take. Then I create the to-do list with time blocks assigned to each item.  As a result, hour by hour throughout my day I know exactly what I should be working on and if I’m falling behind schedule.

On the days I feel I have to rush to get working, I just right down everything I have to do in no particular order as fast as I can. Then throughout the day I pick and choose what to work on like I’m selecting items from a menu.

As you may expect, I always get more done on the days I take the time to implement my to-do list as a schedule. I spend less time procrastinating, less time surfing the web, and less time mindlessly snacking.

I now realize that rushing through the day is costing me the time I thought I was saving.

With that said, my conclusion is simple. Slowing down to plan out your day allows you to get more done than rushing to start.

Can an old dog really not learn new tricks?

File:9 month old dog.jpgAs I get older, I often think of the old saying you can’t teach an old dog new tricks. It usually comes to mind as I start doing something a certain way because that’s the way I’ve always done it. Then I remind myself that I don’t want to become an old dog.

I say this because becoming an old dog has nothing to do with age, instead it’s all about your mentality.

If you do something the same way every time and never investigate if there is a better way, then you’re an old dog.  If someone ask you why you do things a certain way, and you respond by saying that’s the way it has always been done, then you’re an old dog.

The reality is you can not teach an old dog new tricks. So the trick is not to become an old dog.

Calling for death to the daily blog

File:High Wood cemetery, France.jpgIs the rise of the daily blog hurting the internet? Being that I am both a blogger who publishes daily and an advocate of the practice, I stopped in my tracks when I read a post from Atlanta entrepreneur Mike Schinkel saying as much.

In a blog post he titled The Web Needs You To… STOP BLOGGING! he pleads for several prominent daily bloggers to stop the practice for both their own good and the good of the community, to include Atlanta’s startup guru David Cummings and renowned venture capitalist Fred Wilson. Schinkel also cites four reasons why the practice of blogging daily is bad:

  1. Daily blogs lack depth
  2. With so many people now writing daily blogs, there is way too much noise in the blogosphere
  3. The content in daily blogs lack excellence
  4. Writing a daily blogs takes up time that could be used for better things

It’s hard to argue with any of Schinkel’s points head on, as much of what he states is true. Especially the point he makes about writing daily vs. publishing daily, advocating that daily bloggers should instead write every day on the same post, going more in depth before they hit the publish button.

I can honestly say reading Schinkel’s post has swayed me from advocating so hard for others to start blogging daily, but it won’t stop me doing it myself.  For me, blogging daily is a personal journey rather than some external sound box. It’s the perfect tool for introspection. I would even go as far as calling it medicinal.

So when it comes down to it, when you blog daily for internal fulfillment rather than external validation, most of what Schinkel argues becomes irrelevant.