The ‘Big Hairy Audacious Goal’ + The ‘Unique Selling Proposition’ = Winning

These days, its cute to announce that you are launching a startup. It’s almost like a 12 year old girl and her little brother starting a lemonade stand to guilt trip their neighbors into giving them 50 cents on a hot summer day.

Ohhh, how cute… Another startup launching a photo sharing app, a food delivery app, a group chatting app, a “uber” for pets app…

No matter what your startup is, there is somebody out there doing the same thing right now.

More people are starting businesses today than in any other moment in modern history.

What you need to differentiate yourself is a Big Hairy Audacious Goal that no one else could imagine, and none of your competitors could ever achieve.

If you haven’t studied the idea of setting a Big Hairy Audacious Goal, then you should read this quick summary on Wikipedia.

In short, I propose that startups going after an idea in a crowded market use the idea of a Big Hairy Audacious Goal to discover their Unique Selling Proposition.

In order to do this, your Big Hairy Audacious Goal cannot be something generic like getting to 100 million users. Who cares….

It must be something that is not only big, but something that uniquely defines why the existence of your startup will change the world as we know it.

Once you combine your Unique Selling Proposition with your Big Hairy Audacious Goal, then come up with a step by step process to go after it.

No joke.

Set a goal to change the world, create a plan to do it, then do it.

Are Younger Entrepreneurs Better? I THINK NOT!

Thomas Edison didn't become a successful entrepreneur until his 40s
Thomas Edison didn’t become a successful entrepreneur until his mid 40s

There is a common perception that once an entrepreneur turns 30, he or she is over the hill.  Even worse, the prevailing thought is if you haven’t hit an entrepreneurial home run by age 30, your chances of ever hitting a home run are next to nill.

It turns out that these beliefs are just plain false.  

Adeo Ressi, the founder of The Founder Institute, has done personality and aptitude tests on over 3,000 potential entrepreneurs worldwide to draw conclusions on the question: Are younger entrepreneurs better?

Ressi states the following regarding the age myth:

The research shows that an older age is actually a better predictor of entrepreneurial success.

Ressi then goes on to conclude the following:

Age is only one factor among many to predict the success of entrepreneurs, and anybody at any age can break any molds put forward by “experts.” However, it’s clear that the stories of a few “college-dropout turned millionaire” (or billionaire) startup founders have clouded both the mass media and the tech industry from reality. We have romanticized the idea of a young founder because, well, it’s a great story, but these stories are not the norm. In the end, classic biases of gender, race, and age need to be discarded for a real science of success.

To get the background on Ressi’s methodology for these conclusions you should read this blog post he wrote on TechCrunch.

Blocking and Tackling: The only Football Metaphor that Matters for Startups

You may or may not be familiar with American football.  For me, it is as much as part of my life as entrepreneurship, so let’s start with the basics.

Blocking and Tackling 

Any championship football team excels at these two things.   Blocking is what you need to win on offense, and tackling is what you need to win on defense.  When it comes to winning championships, blocking and tackling are the fundamentals that separate good from great.

Entrepreneurship Ideas vs. Execution

In American Football, everybody copies each other offensive and defensive scheme if it is the hot thing working around the league.

Whether it’s the Wildcat, Spread, No Huddle, Zone Read, and the West Coast on offense, or the 4-6, Wide 9, Tampa 2 or Zone Blitz on defense.

If it works, your competition will copy it.

The same goes with startup ideas.  Your competition will copy your idea if you prove it works.

Execution is about blocking and tackling. Execution can’t be copied.

Execution is the fundamentals. Ideas come and go. You don’t win with ideas, you win with execution. What is the equivalent of blocking and tackling for a startup? Sales and customer service!

So there is the answer to the age old startup question.  How do I execute on my business idea?  Execution is about your ability to sell your product and deliver world class customer service.

Be good at those two things, and you have a better than average chance of winning. Be great at those two things, and you will win.

On the other hand, get those two things wrong and you have no chance at all.

This is an Early Sign of Breakthrough Success in Life

This week I had a epiphany about “success” while coaching my son at wrestling practice.

My son is a beginner wrestler, only in his second season participating in the sport. In practice, however, he is often grouped with advanced wrestlers who would be considered among the best in the state at their age and weight. As a result of this, my son doesn’t have much success during “go live” with his partners. That is, until a few weeks ago.

A few weeks ago, something started to click. He had a couple great practices back to back. My immediate thought was that he turned the corner, he figured out the sport. He was ready for prime-time!

Not so fast…

The next practice was the total opposite. The success I saw just a few days ago was gone. It seemed that maybe it was only a flash. Then low and behold a few days later it was back again, then gone again the next practice, then back again. And so on and so forth.

It started off as more bad days than good days. Now I’m starting to see more good days than bad days.

That’s when it hit me. An early sign of breakthrough success is inconsistent success.

When you start at something, it’s typical to experience consistent failure. If you stick with it, the next thing you will experience is a back and forth between good days and bad days. You will get a taste of success only to be followed by a mouthful of failure.

Most people look at inconsistency like this as a bad thing. This may be true in the case of an experienced veteran. But if you’re new at something, inconsistency like this is the light at the end of the tunnel. It means you’re on the brink of breaking through to greatness. All you have to do now is stick with and perfect the process that has taken you this far.

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.

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.

My Three Favorite Quotes from Tucker: The Man and His Dream (1988)

A 1948 Tucker Sedan at the Blackhawk Museum

Yesterday I recommended you watch a movie about an unsung entrepreneur named Tucker Preston. The movie is called  Tucker: The Man and His Dream (1988).

Since I love quotes so much, I thought I’d share my three favorite quotes from this movie:

1.  “If you’re selling candy, what do you advertise, rotting teeth?”

 

2. “Captains go down with their ships, not businessmen.”

 

3. “You’re too good a salesman not to look a customer in the eyes.”