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The Psychological Price of Entrepreneurship

The Psychological Price of Entrepreneurship

No one said building a company is easy. But it's time to be honest about how brutal it really is — and the price so many founders secretly pay.

 

CREDIT: Ruth Gwily

 

 

Editor's Note: This article won an award in the Magazine Personal Service category in the 2014 Annual Awards Contest of the Deadline Club, the New York City chapter of the Society of Professional Journalists.

By all counts and measures, Bradley Smith is an unequivocal business success. He's CEO of Rescue One Financial, an Irvine, California-based financial services company that had sales of nearly $32 million last year. Smith's company has grown some 1,400 percent in the last three years, landing it at No. 310 on this year's Inc. 500. So you might never guess that just five years ago, Smith was on the brink of financial ruin–and mental collapse.

Back in 2008, Smith was working long hours counseling nervous clients about getting out of debt. But his calm demeanor masked a secret: He shared their fears. Like them, Smith was sinking deeper and deeper into debt. He had driven himself far into the red starting–of all things–a debt-settlement company. "I was hearing how depressed and strung out my clients were, but in the back of my mind I was thinking to myself, I've got twice as much debt as you do," Smith recalls.

He had cashed in his 401(k) and maxed out a $60,000 line of credit. He had sold the Rolex he bought with his first-ever paycheck during an earlier career as a stockbroker. And he had humbled himself before his father–the man who raised him on maxims such as "money doesn't grow on trees" and "never do business with family"–by asking for $10,000, which he received at 5 percent interest after signing a promissory note.

Related: The Fearsome Nightmare Entrepreneurs Never Talk About 

Smith projected optimism to his co-founders and 10 employees, but his nerves were shot. "My wife and I would share a bottle of $5 wine for dinner and just kind of look at each other," Smith says. "We knew we were close to the edge." Then the pressure got worse: The couple learned they were expecting their first child. "There were sleepless nights, staring at the ceiling," Smith recalls. "I'd wake up at 4 in the morning with my mind racing, thinking about this and that, not being able to shut it off, wondering, When is this thing going to turn?" After eight months of constant anxiety, Smith's company finally began making money.

Successful entrepreneurs achieve hero status in our culture. We idolize the Mark Zuckerbergs and the Elon Musks. And we celebrate the blazingly fast growth of the Inc. 500 companies. But many of those entrepreneurs, like Smith, harbor secret demons: Before they made it big, they struggled through moments of near-debilitating anxiety and despair–times when it seemed everything might crumble.

"It's like a man riding a lion. People think, 'This guy's brave.' And he's thinking, 'How the hell did I get on a lion, and how do I keep from getting eaten?"

Until recently, admitting such sentiments was taboo. Rather than showing vulnerability, business leaders have practiced what social psychiatrists call impression management–also known as "fake it till you make it." Toby Thomas, CEO of EnSite Solutions (No. 188 on the Inc. 500), explains the phenomenon with his favorite analogy: a man riding a lion. "People look at him and think, This guy's really got it together! He's brave!" says Thomas. "And the man riding the lion is thinking, How the hell did I get on a lion, and how do I keep from getting eaten?"

Not everyone who walks through darkness makes it out. In January, well-known founder Jody Sherman, 47, of the e-commerce site Ecomom took his own life. His death shook the start-up community. It also reignited a discussion about entrepreneurship and mental health that began two years earlier after the suicide of Ilya Zhitomirskiy, the 22-year-old co-founder of Diaspora, a social networking site.

Lately, more entrepreneurs have begun speaking out about their internal struggles in an attempt to combat the stigma on depression and anxiety that makes it hard for sufferers to seek help. In a deeply personal post called "When Death Feels Like a Good Option," Ben Huh, the CEO of the Cheezburger Network humor websites, wrote about his suicidal thoughts following a failed startup in 2001. Sean Percival, a former MySpace vice president and co-founder of the children's clothing startup Wittlebee, penned a piece called "When It's Not All Good, Ask for Help" on his website. "I was to the edge and back a few times this past year with my business and own depression," he wrote. "If you're about to lose it, please contact me." (Percival now urges distressed entrepreneurs to seek professional help: Call the National Suicide Prevention Lifelineat 1-800-273-8255.)

Related: My Darkest Hour by Jessica Bruder

Brad Feld, a managing director of the Foundry Group, started blogging in October about his latest episode of depression. The problem wasn't new–the prominent venture capitalist had struggled with mood disorders throughout his adult life–and he didn't expect much of a response. But then came the emails. Hundreds of them. Many were from entrepreneurs who had also wrestled with anxiety and despair. (For more of Feld's thoughts on depression, see his column, "Surviving the Dark Nights of the Soul," in Inc.'s July/August issue.) "If you saw the list of names, it would surprise you a great deal," says Feld. "They are very successful people, very visible, very charismatic–yet they've struggled with this silently. There's a sense that they can't talk about it, that it's a weakness or a shame or something. They feel like they're hiding, which makes the whole thing worse."

If you run a business, that probably all sounds familiar. It's a stressful job that can create emotional turbulence. For starters, there's the high risk of failure. Three out of four venture-backed startups fail, according to research by Shikhar Ghosh, a Harvard Business School lecturer. Ghosh also found that more than 95 percent of startups fall short of their initial projections.

Entrepreneurs often juggle many roles and face countless setbacks–lost customers, disputes with partners, increased competition, staffing problems–all while struggling to make payroll. "There are traumatic events all the way along the line," says psychiatrist and former entrepreneur Michael A. Freeman, who is researching mental health and entrepreneurship.

Complicating matters, new entrepreneurs often make themselves less resilient by neglecting their health. They eat too much or too little. They don't get enough sleep. They fail to exercise. "You can get into a startup mode, where you push yourself and abuse your body," Freeman says. "That can trigger mood vulnerability."

So it should come as little surprise that entrepreneurs experience more anxiety than employees. In the latest Gallup-Healthways Well-Being Index, 34 percent of entrepreneurs–4 percentage points more than other workers–reported they were worried. And 45 percent of entrepreneurs said they were stressed, 3 percentage points more than other workers.

But it may be more than a stressful job that pushes some founders over the edge. According to researchers, many entrepreneurs share innate character traits that make them more vulnerable to mood swings. "People who are on the energetic, motivated, and creative side are both more likely to be entrepreneurial and more likely to have strong emotional states," says Freeman. Those states may include depression, despair, hopelessness, worthlessness, loss of motivation, and suicidal thinking.

Call it the downside of being up. The same passionate dispositions that drive founders heedlessly toward success can sometimes consume them. Business owners are "vulnerable to the dark side of obsession," suggest researchers from the Swinburne University of Technology in Melbourne, Australia. They conducted interviews with founders for a study about entrepreneurial passion. The researchers found that many subjects displayed signs of clinical obsession, including strong feelings of distress and anxiety, which have "the potential to lead to impaired functioning," they wrote in a paper published in the Entrepreneurship Research Journal in April.

Reinforcing that message is John Gartner, a practicing psychologist who teaches at Johns Hopkins University Medical School. In his book The Hypomanic Edge: The Link Between (a Little) Craziness and (a Lot of) Success in America, Gartner argues that an often-overlooked temperament–hypomania–may be responsible for some entrepreneurs' strengths as well as their flaws.

A milder version of mania, hypomania often occurs in the relatives of manic-depressives and affects an estimated 5 percent to 10 percent of Americans. "If you're manic, you think you're Jesus," says Gartner. "If you're hypomanic, you think you're God's gift to technology investing. We're talking about different levels of grandiosity but the same symptoms."

Related: Is Depression a Fact of Entrepreneurial Life?

Gartner theorizes that there are so many hypomanics–and so many entrepreneurs–in the U.S. because our country's national character rose on waves of immigration. "We're a self-selected population," he says. "Immigrants have unusual ambition, energy, drive, and risk tolerance, which lets them take a chance on moving for a better opportunity. These are biologically based temperament traits. If you seed an entire continent with them, you're going to get a nation of entrepreneurs."

Though driven and innovative, hypomanics are at much higher risk for depression than the general population, notes Gartner. Failure can spark these depressive episodes, of course, but so can anything that slows a hypomanic's momentum. "They're like border collies–they have to run," says Gartner. "If you keep them inside, they chew up the furniture. They go crazy; they just pace around. That's what hypomanics do. They need to be busy, active, overworking."

"Entrepreneurs have struggled silently. There's a sense that they can't talk about it, that it's a weakness."

No matter what your psychological makeup, big setbacks in your business can knock you flat. Even experienced entrepreneurs have had the rug pulled out from under them. Mark Woeppel launched Pinnacle Strategies, a management consulting firm, in 1992. In 2009, his phone stopped ringing.

Caught in the global financial crisis, his customers were suddenly more concerned with survival than with boosting their output. Sales plummeted 75 percent. Woeppel laid off his half-dozen employees. Before long, he had exhausted his assets: cars, jewelry, anything that could go. His supply of confidence was dwindling, too. "As CEO, you have this self-image–you're the master of the universe," he says. "Then all of a sudden, you are not."

Woeppel stopped leaving his house. Anxious and low on self-esteem, he started eating too much–and put on 50 pounds. Sometimes he sought temporary relief in an old addiction: playing the guitar. Locked in a room, he practiced solos by Stevie Ray Vaughan and Chet Atkins. "It was something I could do just for the love of doing it," he recalls. "Then there was nothing but me, the guitar, and the peace."

Through it all, he kept working to develop new services. He just hoped his company would hang on long enough to sell them. In 2010, customers started to return. Pinnacle scored its biggest-ever contract, with an aerospace manufacturer, on the basis of a white paper Woeppel had written during the downturn. Last year, Pinnacle's revenue hit $7 million. Sales are up more than 5,000 percent since 2009, earning the company a spot at No. 57 on this year's Inc. 500.

Woeppel says he's more resilient now, tempered by tough times. "I used to be like, 'My work is me,' " he says. "Then you fail. And you find out that your kids still love you. Your wife still loves you. Your dog still loves you."

But for many entrepreneurs, the battle wounds never fully heal. That was the case for John Pope, CEO of WellDog, a Laramie, Wyoming-based energy technology firm. On Dec. 11, 2002, Pope had exactly $8.42 in the bank. He was 90 days late on his car payment. He was 75 days behind on the mortgage. The IRS had filed a lien against him. His home phone, cell phone, and cable TV had all been turned off. In less than a week, the natural-gas company was scheduled to suspend service to the house he shared with his wife and daughters. Then there would be no heat. His company was expecting a wire transfer from the oil company Shell, a strategic investor, after months of negotiations had ended with a signed 380-page contract. So Pope waited.

The wire arrived the next day. Pope–along with his company–was saved. Afterward, he made a list of all the ways in which he had financially overreached. "I'm going to remember this," he recalls thinking. "It's the farthest I'm willing to go."

Since then, WellDog has taken off: In the past three years, sales grew more than 3,700 percent, to $8 million, making the company No. 89 on the Inc. 500. But emotional residue from the years of tumult still lingers. "There's always that feeling of being overextended, of never being able to relax," says Pope. "You end up with a serious confidence problem. You feel like every time you build up security, something happens to take it away."

Pope sometimes catches himself emotionally overreacting to small things. It's a behavior pattern that reminds him of posttraumatic stress disorder. "Something happens, and you freak out about it," he says. "But the scale of the problem is a lot less than the scale of your emotional reaction. That just comes with the scar tissue of going through these things."

"If you're manic, you think you're Jesus. If you're hypomanic, you think you're God's gift to technology investing."John Gartner

Though launching a company will always be a wild ride, full of ups and downs, there are things entrepreneurs can do to help keep their lives from spiraling out of control, say experts. Most important, make time for your loved ones, suggests Freeman. "Don't let your business squeeze out your connections with human beings," he says. When it comes to fighting off depression, relationships with friends and family can be powerful weapons. And don't be afraid to ask for help–see a mental health professional if you are experiencing symptoms of significant anxiety, posttraumatic stress disorder, or depression.

Freeman also advises that entrepreneurs limit their financial exposure. When it comes to assessing risk, entrepreneurs' blind spots are often big enough to drive a Mack truck through, he says. The consequences can rock not only your bank account but also your stress levels. So set a limit for how much of your own money you're prepared to invest. And don't let friends and family kick in more than they can afford to lose.

Cardiovascular exercise, a healthful diet, and adequate sleep all help, too. So does cultivating an identity apart from your company. "Build a life centered on the belief that self-worth is not the same as net worth," says Freeman. "Other dimensions of your life should be part of your identity." Whether you're raising a family, sitting on the board of a local charity, building model rockets in the backyard, or going swing dancing on weekends, it's important to feel successful in areas unrelated to work.

The ability to reframe failure and loss can also help leaders maintain good mental health. "Instead of telling yourself, 'I failed, the business failed, I'm a loser,' " says Freeman, "look at the data from a different perspective: Nothing ventured, nothing gained. Life is a constant process of trial and error. Don't exaggerate the experience."

Last, be open about your feelings–don't mask your emotions, even at the office, suggests Brad Feld. When you are willing to be emotionally honest, he says, you can connect more deeply with the people around you. "When you deny yourself and you deny what you're about, people can see through that," says Feld. "Willingness to be vulnerable is very powerful for a leader."

Chris Corey

CMO MarketHive 

BY JESSICA BRUDER

 

3 Powerful Strategies for Discovering Your Life’s Work

3 Powerful Strategies for Discovering Your Life's Work

There is a cultural myth popular among millennials that says you have to “find yourself” in order to do the work you were meant to do.

It’s partly why you see so many of this generation (of which I consider myself one) take a "gap" year early in their careers — usually to backpack through Europe, hike the Appalachian Trail, meditate for a month in India or embark on some other equally epic adventure. The point (presumably) is to find personal meaning in these experiences that will help you discover your life’s work and purpose.

You see, these aren’t vacations. These are spiritual quests. But before you “go all Kerouac” on everyone, consider this:

While there is certainly tremendous value in travel and adventure, this formula is a bit backwards. Because it’s often the work itself that provides the most transformative value.

Related: 6 Concepts Your Millennial Employees Wish You Understood

Or put another way, it’s not about finding yourself and then doing the work, it’s about finding yourself in the work.

recently sat down with author and brand marketing expert Ryan Holiday who made this exact point.

 

 

If you’re not familiar, Ryan is the former marketing director of American Apparel and the author of several books, including the bestselling The Obstacle is the Way and his newest, Ego is the Enemy.

In our conversation, Ryan talked about a passage from Conrad’s Heart of Darkness that illustrates the idea perfectly. Marlow, the book’s narrator, says:

“I don't like work – no man does – but I like what is in the work – the chance to find yourself. Your own reality – for yourself not for others – what no other man can ever know.” (Conrad, Heart of Darkness)

Ryan explains: “[People assume] that spiritual- and meaning-quests are different than their work quests. I’m not entirely sure that’s the case.”

Related: Want to Understand Millennials? It's Simpler Than You Think.

But what exactly does this mean? And where do you start? Here are the three simple yet effective strategies to help you find yourself in your work.

1. Just get started.

Many entrepreneurs suffer from paralysis when it comes to starting their enterprises. They wait for the perfect idea, or the perfect team, or for just the right moment to launch. Of course, when you wait for things to be perfect, you end up waiting forever.

The important thing isn’t to wait for the ideal conditions; it’s to start so that you can benefit from the lessons the work will give you.

What’s worse, some millennial entrepreneurs get distracted from all the things that go along with entrepreneurship (or things they think go along with it but are separate and detract from the work). They buy into the popular entrepreneurial myths, and get distracted by hype, prestige or some end goal that they associate with success.

Ultimately they forget that entrepreneurship at its heart is a risk that requires steadfast commitment and massive action. Entrepreneurshipis the work, and nothing more. The path to success is never well marked but the work will show you the way.

2. Understand that life is continuous training.

One of the biggest misconceptions ingrained in us from early childhood is that work is a means to an end, a pathway to an outcome. In school, it’s for a letter grade. In our careers, it’s for a payday. We confuse that outcome with having a purpose.

Often, we tie our happiness to that outcome. 

If only my company had funding, we think. Then we could relax.

If only we get acquired. Then we’ll have made it.

If only I had a bigger house. Then I’ll be happy.

The problem with this is twofold. First, it puts happiness on the horizon, contingent on an outcome we can’t control (more on that later). Second, because this outcome is in the future, our happiness is perpetually beyond our reach. We’re always chasing it. Every time we achieve something, we discover that the happiness it provides is fleeting, so we set our sights on the next achievement.

But perhaps more importantly, by subordinating work as a means to end, we deny the inherent, didactic value of work.

“Challenging yourself in everything that you do is how you find meaning,” adds Holiday, “and that’s [also] how you find what’s in the work.”

In Ego is the Enemy, Holiday contends that life should be thought of as “continuous training.” He likens it to sweeping the floor – just because you do a phenomenal job sweeping the floor today, doesn’t mean that there’s never going to dust on that floor again. You have to keep showing up.

At SnackNation, we call this “checking the box.”  Every single morning, regardless of what you did the day or week prior, you need to get-up and proactively “check the box” to dedicating that day to the best work you can do.

And while this might seem daunting, it’s also empowering to know that we are constantly provided with new opportunities to outdo our previous accomplishments, to surprise ourselves, and to learn from our work.

When you view life as continuous practice, you’ll open yourself to the lessons that work can teach us about ourselves.

Related: Millennials Are Not the Only Ones Who Want Feedback

3. Shift focus from external things you can’t control to the internal things you do control.

Back to the point about outcomes.

Sustainable happiness requires us to rethink how we define success. The popular idea of success is one of outcomes – we often equate success with material wealth, privilege, or social status.

But as we’ve already explored, success defined in this way is ephemeral. The joy that it brings quickly wears off. Once we achieve the external goal we set our sights on, it’s on to the next. Happiness becomes the proverbial carrot on a stick, always out of our grasp.

The alternative is to redefine success in terms of internals, the things that are within our control. 

This idea comes from Stoicism, a Hellenistic philosophy championed by thinkers like Seneca the Younger and Marcus Aurelius, and that informs much of Holiday’s work.

“Stoic philosophy, at its core,” he explains, “is the distinction between what is in our control and what is outside our control – what are called internals and externals. If you are putting your happiness on an external, something you don’t control, you will be disappointed.”

The ideal, according to this line of thought, is to detach your emotion from outcomes completely, and derive happiness from the things that are within your control – things like the effort you put forth, your mindset, how you treat people.

In other words, you derive happiness from the work itself.

So, contrary to popular belief, you don’t need to take a six month trek through the Andes in order to find yourself. In fact, that’s exactly what you shouldn’t do.  You don’t find your purpose by thinking about your purpose!  That’s a circular thought process that will usually yield lackluster and depressing results.  Rather, the best thing you can do is to get started on something right now, in this very moment, that will challenge you, and in so doing, help you discover what you were meant to do.  Because it’s through an intense commitment to the work that lies before you today that your purpose will ultimately be discovered and your calling will become clear.

Chris Corey

CMO MarketHive Inc.

 

CONTRIBUTOR

SnackNation.com CEO & Professional High-Fiver

Author Ryan Holiday

    

 

Marketing mix Different Approaches

Marketing mix Different Approaches

The 4 Ps is just one approach to the marketing mix. There are many other approaches.

American author, Philip Kotler prefers the 4 Cs. He suggests that the 4 Ps are a seller’s mix or sales orientated approach and it therefore, should be replaced by the 4 Cs which are more customer orientated, or marketing orientated.

You can probably guess what the 4 Cs stand for…….

  • Product = Customer Benefits

  • Price = Cost to Customer

  • Place = Convenience

  • Promotion = Communications

Going back to the 4 Ps, some feel this approach to the marketing mix misses the most important part of marketing; the centre of the marketing universe is omitted. What do you think is the centre of the marketing universe?

The 5th P is the People: customers and employees. Customers are at the centre of the marketing universe.

 

Now let's move on to the 7 Ps. Although the 4 Ps can be used for both products and services some feel that the 4 Ps works better for products than it does for services. Perhaps you agree?

American, academics Booms & Bitner felt that the 7 Ps are more appropriate for the service sector such as hotels or transport companies.

Four of the 7 Ps are the same.
1 – Product
2 – Price
3 – Place
4 –  Promotion

Can you guess what the others might be?

5 – People,
6 –  Process
7 –  Physical environment.

Each of these Ps affects what the customer is offered.

People are employees. Process means the production and delivery of the service. Physical Environment means the interior and exterior of the buildings. In 1961 Albert Frey suggested that all the marketing mix variables could be categorised into just two groups:

The Offering and the Methods and Tools

The Offering consisted of Product, Packaging, Service, Brand and Price, while the Methods and Tools comprised of Distribution Channels, Personal Selling, Advertising and Sales Promotion.

So there are several different ways of categorising the mix. There are also several different ways of mixing the mix. Should advertising be increased, prices slashed, deliveries reduced and products upgraded? Or the other way around? You can explore this in the section called ‘Mixing the Mix’.

Mixing the Mix

There is no one, single, perfect marketing mix. Some mixes are, however, better than others. The marketing mix has an infinite amount of combinations or mixes. The ‘same’ product can have extremely different mixes for different markets around the world. Ranges of prices, distribution options, product modifications, promotional strategies can all be mixed in different ways. They should, however, fit together to consolidate a single desired positioning in a particular market segment.

The mix should not pull in different directions; a high price for low-quality goods does not make sense in the long term. Repeat business is important in the world of marketing. Equally, low quality, discount priced products will find distribution in a luxury up-market store difficult to achieve.

Here is a new product. Market it. Mix the mix.

A friend’s mother has developed a watch which has a videophone and magnifying glass for viewing. A combination of miniaturisation and microchips means the video watch can be produced for as little as £2.00 per unit. She has asked you to help her to draw up an outline marketing mix. Consider two different mixes. What would you do?

The first question to ask would be:

what is the market?
What benefits does this product deliver?
Who might enjoy these benefits?

Next, considering various segments and possible target markets would also help. And a clear view on the positioning also helps.An understanding of what resources the company has would be vital. One option would be to recommend a retail price for the video phone watch at £1,000. This could be distributed through luxury stores like Harrods or Neiman and Marcus, promoting it with elaborate in-store displays (merchandising) supported with a limited mail shot and PR campaign.

Now consider another option. This time, change the marketing mix radically. Reduce the price and sell in packs of two through discount warehouses supported by a national TV advertising campaign. Each ingredient in the mix can vary enormously. For example, the watch can be made out of plastic or platinum. It can have a lifetime guarantee or become a disposable product.

It can have lots of extras such as diamond studded leather straps, silk wrapping, guarantees and so on. On the other hand, it can have no added costs and no added extras – just the basic video watch. These are decisions which the marketing manager has to make after careful analysis of the situation, the market, its needs, its sectors, the ideal positioning, the resources within the company.

So is there a single, perfect marketing mix? No, but some mixes are obviously better than others.

Finally, some countries require different mixes. Some segments require different mixes within the same country. The mix can change according to market requirements which in themselves change over time. The ever-changing mix is discussed in a separate subtopic.

The Ever Changing Mix

An excellent marketing mix in one period may not be as effective in another period. The marketing mix changes over time. Partly because markets change, new sectors evolve, trends develop, attitudes change, different ideal positionings emerge, technology moves on, new products arrive, different distribution channels appear.

Just look at the personal computer, or PC, market. Today’s PCs are better products, have much lower prices and different methods of distribution compared with ten years ago. Today, thousands of people buy PCs through mail order. Ten years ago this would never have been the case.

The Marketing Mix has to change to meet new market conditions.

Here is an example of how different elements of the marketing mix dominated the retail petrol market in the UK over a period of time.

In the early 1960s, Product Performance – miles per gallon, reliability were very important. Then the marketing emphasis switched to promotions with the Green Shield Stamps war in the late 1960s. Physical distribution and sourcing of supplies became vital during the first oil crisis in 1973.

This was followed by a price war in 1974, which was in turn followed by supply and distribution problems during the second oil crisis in 1979. The early ’80s saw location and design of new retail sites as the key to competitive advantage.

This was followed by the mid-1980s sales promotions war as petrol retailers competed to give away instant gifts, tokens, scratch cards. These sales promotions were supported by large advertising budgets. So now the advertising promoted the sales promotions rather than the product itself. Some advertising campaigns even advertised the fact that their competitors had inferior sales promotions. The marketing mix can change over time.

It can also change over distance.

This is particularly true in international markets where certain approaches to advertising and promotions are acceptable in some countries but not in others; or where the distribution network is restricted; or where the price structure is totally different.

The optimum mix is influenced by the company’s long term policy on repeat sales, its positioning strategy, the target market selection, the firm’s resources, levels of competition and the ability, or willingness, to change the mix according to a particular market’s requirements.

The ideal mix should support the ideal positioning in the most attractive target markets.

Product and the Marketing Mix

Over a hundred years ago Ralph Waldo Emerson suggested that “If a man can write a better book, preach a better sermon, or make a better mousetrap than his neighbour, though he builds his house in the woods the world will make a beaten path to his door.”

This is certainly not true today. Many excellent products fail because no one knows about them, or they are wrongly positioned, or they’re not available when people want them, or they’re too expensive for the chosen target market.

Other excellent products fail because a competitor’s lower priced and inferior product is widely available before you even get to launch your product in the marketplace. Going back to Emerson’s better mousetrap, ironically the best product is not always the best option. For example, the product might be so good that it costs too much to produce and therefore the best product might just put you out of business.

Do customers really want that extra feature?
Can you afford it?
Can they afford it?
Can competition copy it?

Whatever the decision, the final combination of the core product, tangible product and augmented product along with price, promotion and distribution need to work together if a product is to be successful. Better mousetraps are often beaten by poorer mousetraps. It happens all the time.

Competitors constantly juggle their marketing mixes to maximise their product sales. Speed to market; blocked distribution channels; clever pricing strategies; powerful promotions; are all used by competitors to win and keep market share.

The better mousetrap also needs to be part of a coherent, fully integrated marketing mix. The distribution has to get the product to where the target customer can buy it when they want it. The prices have to reflect the desired quality image while simultaneously matching what customers can afford. Finally, customers need to know about the product – it needs to be promoted in the right way.

Each element of the marketing mix should support the product’s positioning. The product, its price, its distribution channels and of course the promotion should all reinforce the same message. Without a coherent, fully integrated mix even the best product in the world will fail.

Chuck Reynolds
Contributor

 

Marketing Mix Framework

Marketing Mix

Marketing Mix is a framework which helps to structure the approach to each market.

The mix is a bundle of variables which are offered to the customer. These include the product or service itself (its advantages); its availability (the place where and when it is available, delivered or distributed); its image (the way it is promoted) and, of course, the price which should be charged. These are some of the ingredients which a marketing manager must mix together when optimising a limited amount of resources.

What is the best mix?

A marketing manager has to juggle resources and decide on the best marketing mix. Should money be spent or forfeited on: reduced prices? Improved products? New delivery trucks? Or maybe invest all your money in a high-riskTV advertising campaign? Did you recognise the 4 Ps just there? In 1960 Jerome McCarthey presented the 4 Ps to the world. Since then marketing managers around the world have become familiar with them. Can you recall them? In addition to the 4 Ps, there are other approaches to the mix. These are explored under ‘Different Approaches’ subtopic as shown in the title map.

Let’s look at each of the 4 Ps briefly.

1 – Product – this means the product’s (or service’s) quality, the functions, the features and benefits of its design plus packaging, guarantees and level of after-sales service. Choices can be made about any of these aspects.

2 – Price includes recommended prices to end-user customers, distributor’s trade prices, cash discounts, bulk discounts, terms of credit.

3 – Place means where and when the customer buys and consumes the product or service. A Place is sometimes referred to as the marketing channels, physical distribution, logistics or location.

4 – Promotion means the promotions mix or the communications mix. This mix includes advertising, sales promotions, publicity, direct mail, exhibitions, display, packaging, selling and even word-of-mouth.

The choice of target market affects the mix.

In India, you sell one cigarette at a time, not a package. So there is a lot of localisation. The biggest mistake companies make often, is to assume that the way they sell a product in their own country is the way to put it into another country.
So the mix must adapt itself to the market.

The 4 Ps, however, is just one approach to the marketing mix. You can explore some other approaches in the subtopic called ‘Different Approaches’.

Chuck Reynolds
Contrbutor

 

The Mobile Revolution

The Mobile Revolution

Smart phones are replacing
 computers and lap tops and
 apps are replacing websites!

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WTF is Biz Dev?

WTF is Biz Dev?

(aka What is “Business Development”?)

Confusion around the term “Business Development”

The term “Business Development” (aka “BD” or “Biz Dev”) is not well defined or well understood.  People agree on what other business functions – like Sales, Marketing, Finance, Product, and Engineering – mean.  If you ask ten people to define one of these functions, you will get ten responses that are similar.  Not so much with “Biz Dev”, where you are likely to get ten different responses.  In this post, I attempt to answer the question: “What is Business Development”?  (And yes – I wrote this in part because I don’t want to keep having to explain to my parents (Hi Mom!) and my girlfriend’s parents (Hi Ken!) what it is that I do for work.)

Let’s start by discussing what Biz Dev is NOT.

Business Development is not (pure) Sales

I define “Sales” as the function at the company that is responsible for selling the company’s products to end customers in exchange for money.  Sales people are in direct contact with potential customers (new sales) and/or current customers (renewals, upgrades, and cross-sells). 

In the past few years, many Sales people stopped referring to themselves as “Sales” and started to refer to themselves as “Business Development” instead.  I assume they made this change because they think that the term “Sales” has some negative connotations, while the term “Business Development” is more neutral and therefore preferable.  Whatever the reason, this has created lots of confusion around the term “Business Development”.  For example, most job specs for what are clearly Sales roles use the term Business Development in their title.

As I will explain, Business Development is not Sales, as the BD function is not responsible for selling the company’s products to end customers.  (Just to be clear, I am not saying that BD does not overlap with Sales.  In many instances, BD works closely with Sales.  And in one instance – specifically when the company sells via the channel – Business Development can be part of Sales.)

Business Development is not Corporate Development

I define “Corporate Development” as the function at the company that is responsible for M&A (i.e., acquiring smaller companies) and investments (i.e., investing money off the company’s balance sheet into smaller companies).  This is a transactional function that requires finance skills, and as a result, it is typically staffed by former investment bankers.

In many companies, the Business Development team will be part of the Corporate Development team and vice versa (meaning Corp Dev will be part of Biz Dev).  For example, when I was VP of Corp Dev at Gerson Lehrman Group, my responsibilities included Biz Dev (meaning partnerships).  And this happens for a reason – both Biz Dev and Corp Dev are responsible for engaging with organizations outside of the company, and the DNA of a good Biz Dev and a good Corp Dev professional can be similar.  But as I will explain, Corporate Development is not Business Development, as the BD function is not responsible for M&A and investment activities at the company.

Now that we have identified what Biz Dev is not, let’s discuss what Biz Dev IS.

What Business Development Is

In the first section of The Guide to Business Development and Partnerships, there are several experts highlighted who attempt to define Biz Dev. Andrew Dumont seems to get it best when he writes: “In it’s simplest form, Biz Dev can be described as connecting similar businesses to similar goals.”  His definition seems, in part, to be best because it is so broad.  But it doesn’t seem to be specific enough.

Here is a great definition: “Business Development is the function at the company responsible for identifying, securing, and/or managing relationships with organizations outside of the company (excluding customers and suppliers) that helps other key functions at the company achieve their respective goals.”  Let me address some of the key ideas in this statement:

  • The word “relationship” is used to describe the myriad structures – formal and informal – that a company can have with another organization.  Note that I have deliberately excluded relationships with Customers, which are managed by Sales, and relationships with Suppliers, which are managed by Procurement / Finance.
  • Use the terms “identify, secure, and/or manage” because BD can take both a “hunter” (i.e., identify, secure) and “farmer” (i.e., manage) role.
  •  BD helps other key functions at the company achieve their respective goals.  Specifically, BD helps 1) Sales, 2) Marketing, 3) Product, and/or 4) the CEO.  In an ideal world, none of these functions would need to rely on an organization outside of the company.  For example, Marketing would hit their lead quota every month without any outside help. Any Product would release every feature on their roadmap on time without any outside help.  But the reality is that each of these functions is constrained, so each function could potentially benefit from a partnership with a 3rd party.  And Biz Dev is the function at the company responsible for managing the company’s efforts in this area. (1) (2)

 let's now provide some concrete examples of the various forms that BD can take.

Examples of Biz Dev in the wild

Per my definition, Biz Dev works alongside four functions inside the company: 1) Sales, 2) Marketing, 3) Product, 4) the CEO.  In the framework below, I group the various models that BD can take based on which function it works with.  And I try to include some specific examples, most of which involve B2B SaaS companies in Boston (a market that I know relatively well).

Category #1: BD aligned with Sales

A common arrangement has BD working closely with Sales to achieve Sales-related goals, which (not surprisingly) are focused on growing revenue ($’s) and/or customer count (# of logos).  Possible structures include:

  • Re-seller – in this model, the company sells its products to end customers via a 3rd party.  The partner could take many forms, such as a professional services firm (like Hubspot with marketing agencies or Xero with accounting firms), a VAR or systems integrator (like Backupify or CloudLock), or a larger ISV.
    • This is the one caveat to my prior statement that BD is not “pure” Sales (emphasis on word “pure”).  In “pure” Sales, the Sales team is selling directly to end customers.  In a Reseller model, Sales is working with partners who are selling to the end customer.  In this scenario, the BD team focused on re-sellers looks and acts like Sales and it may, in fact, be part of the Sales team.  This is the set-up at Hubspot, which has a large Channel Sales team led by a VP of Sales.
  • OEM  – in this model, the company licenses its product to a 3rd-party, which then bundles it in with it’s own products (often the company’s product is white-labeled) for resale (like GoodData).
  • “New” markets – in some companies, BD takes the lead on opening up new markets – like a new customer segment or a new geography.  In this scenario, BD does the initial customer development work and researches the new market (identifies the competitors, identifies possible partners, etc.).  Eventually, BD hands off the execution to Sales.

Note that these three models are complicated and therefore difficult to execute on.

Category #2: BD aligned with Marketing

Another common arrangement has BD working closely with Marketing to achieve Marketing-related goals, which (not surprisingly) are focused on growing the # of leads and/or improving the quality of leads.  Possible structures include:

  • Referral – in this model, the company develops relatively close relationships (i.e., marketing collateral, sales training, etc.) with organizations that send them leads, which are typically of higher quality.  In exchange, the company pays them a fee (the referral fee).  When I was at InsightSquared, we did this with many companies, including Bullhorn.
  • Affiliate – in this model, the company develops a program where if an organization (the affiliate partner) sends them a lead (typically of lesser quality), the company then pays them a fee (the affiliate fee).  In this scenario, the company has an arms-length relationship with their affiliate partners, meaning the company does not provide much (if any) education or training on the company’s products to the partner.  InfusionSoft does this.
  • Informal –  this category describes the variety of informal marketing initiatives that a company could pursue with another organization.  For example, Company A and Company B could collaborate on a joint webinar, where both companies invite their respective audiences (customers, prospects), co-host the event, and share the RSVP and attendee lists with one another. Other examples include joint whitepapers, joint events, guest blog posts, etc.  Typically, no money changes hands, although both companies invest their own time and resources to support these initiatives.  When I was at Axial, we did some joint marketing with a variety of organizations, including Capital IQ.

Category #3: BD aligned with Product

A third arrangement has BD working closely with Product to achieve Product-related goals, which (not surprisingly) are about improving the product and/or accelerating the product development process.  Possible structures include:

  • Marketplace – in this model, the company’s BD team creates and manages a program that allows 3rd-party developers to build applications that integrate with the company’s core product / platform.  While the company can benefit in a couple of ways from such a program, the Product team benefits by offloading some of their work to partners.  For example, Salesforce (which has built the poster-child for a successful marketplace) has off-loaded the development work in several product areas to partners (like DocuSign and EchoSign for contract management).  Athena health's BD team created (skip to 4:45) their apps marketplace because they wanted to reduce the burden on the company’s Product team.
  • Integration – in this scenario, the company’s business model is predicated on having the company’s product integrate with 3rd-parties.  The BD team works with Product to identify potential partners and then close and manage these relationships.  Examples of this include analytics companies (like InsightSquared), data integration companies (like Bedrock Data) and Ad-tech companies (like DataXu).

Category #4: BD aligned with the CEO

The fourth arrangement has BD working closely with the CEO on “strategic” activities:

  • Strategic – two of the CEO’s primary jobs are: 1) to defend the balance sheet (i.e., ensure that the company does not run out of cash) and 2) to return cash to the investors (i.e., dividends, recap, M&A or IPO).  In many cases, the most logical investors and/or acquirers for a business are companies that also represent potential business partners.  And the first step in a securing an investment and/or an acquisition offer is often a partnership.  In this scenario, the BD team works alongside the CEO to first identify logical investors / acquirers and then explore potential partnerships, with both tactical goals (drive revenue) and long-term goals (investment or acquisition) in mind.  John O’Farrell writes a great post about this in the context of the sale of Opsware to HP.  When I was at GLG, I secured a partnership with Bloomberg for both tactical and strategic reasons.

Chuck Reynolds
Contributor

Business Development, Who is it for?

 Business Development  

What does it mean?

Who is it for?

Is it the same for everyone?

Having now worked in a number of roles that you might consider as business development (BD), I thought I'd start my publishing journey on LinkedIn (this is my first post) with a bit of reflection. I often get asked what the difference between straight selling and BD is, so I thought I'd try and define the differences (for my own sake, if nothing more!).

To some degree, they're different sides of the same coin. Selling and BD go hand in hand. I've been in roles where I've been strictly selling, others where there is a combination of sales and BD, and also in roles that I would consider true and pure BD.

In all, however, I've had some link to what would be considered BD within that particular business. So the answer to the header title is no, I think; BD is different for everyone and every business, dependent on a number of factors – budget, a size of a workforce, attitude to BD, etc.

What is 'true and pure' BD?

The sales process is one that involves a lot of people – product development, designers, pricing, marketing, technical, management – 'front-line' salesmen and 'top-end' management need to combine forces to deliver a product that their customers want.

If you walk into a shop to buy a pair of trainers, for example, this has been designed from the early stages by trained footwear designers, manufactured from these designs in a production process of sorts (industrial or bespoke, depending on the brand), marketed in the appropriate manner to raise awareness of the product, eventually landing on the shelves of the shop you're in, with a friendly guy/gal willing to help you transact some business when you make the decision to buy them.

So where does BD fit into this process?
What's it all about then?

The foremost word that comes up in the BD world is 'relationships'. That's pretty much what it's all about. Good business development will help identify, maintain and encourage relationship building within a firm, building rapport with both suppliers and customers.

It helps strengthen the bonds between these links, supporting the marketing copy and material that establishes your product in the relevant marketplace.

It helps provide information as to what the client needs to the 'front line' sales team, assisting them in closing the deal at the end of the process.

It helps inform management as to how the market is moving, providing insights into new developments of technology, social media and other digital avenues that the firm can take advantage of, to build and maintain loyalty.

It helps small companies access bigger markets and large companies engage newcomers. So my definition of 'true and pure' BD is 'helping a business to develop its relationships'.

Plain and simple.

It's networking on a daily basis; attending cutting-edge events to learn about the industry you're working in; finding (er… stalking?) people on LinkedIn to see what events they're attending and making sure you meet them there, in person, so that you can have that all-important introductory chat; it's offering your loyal customers something more than a newsletter – why not run a seminar and invite them along to it? They might be happy to be invited.

The personal touch is always a winner. We hear more and more now about relationships marketing, social currency, engagement, etc. BD is the platform that most of this is built on.

Who is it for?

As I've mentioned before, I've worked in roles that have been classed as BD but have really been sales. I've worked in hybrid roles where you might do a bit of both. And I've worked in the 'true and pure' BD roles too. What this has shown me is that BD has a place in every business. You can't 'develop' your business without a good BD strategy. So whether you're encouraging your front-line staff to sign up to a few newsletters, or get yourself down to a few networking events, or join a LinkedIn group and start up a discussion, BD is something that can't be overlooked.

It's all very well to have a great product and a nicely designed website, with some great leaflets and a slick business card but, without the right approach to BD, no one is going to see it in the way you want to. Having worked as a supplier to a lot of startups and growing SMEs, the one thing that I've noticed which has set apart the successes from the failures is their approach to BD. Develop the relationships – build a community around your business and your product just needs to do what it says on the tin. The rest will fall into place and you'll have a strong, loyal customer base who are happy to sing your praises.

For that reason alone, if nothing else, BD is essential for pretty much any business going.

Chuck Reynolds
Contributor

Bounce Rate: 14 ways you are driving people away from your landing pages

Ever walk into a bar and know, very quickly, you shouldn’t order anything there?

I’m from a small town in Massachusetts. For a summer living outside of Atlanta, that simply made me a “northerner” or “yankee boy” to the locals so I had to pick my watering holes carefully in the evenings.

It was one of those nights the heat from the pavement was still radiating off the road well past sunset. Enough to make me sweat just walking from my car into a bar I’d just discovered. From the outside, I could see some TVs and a glowing sign for “Wings”. Sounds good, right?

Something was off as soon as I walked in the door. I was greeted by a large gruff looking dude wearing a confederate flag. The TVs were blaring NASCAR.  Above the bar were five $20 confederate bills with a sign that said “Keep your confederate money. South gon’ rise again!”  I’m fairly certain the bartender shot me a look and made proper use of the spittoon that was surrounded by peanut shells on the floor. This was probably not a good time to have been wearing my Boston Red Sox hat.

I took a deep breath and walked out. I’m sure the bar had a type… but it clearly wasn’t me. When I think back on it, there were all kinds of reasons I bounced… but what if I missed out on a great experience?  Did I judge too quickly? What if I’d missed this?

Every day people have this same experience on your web site.  The question is: If you wanted more of them to stay and spend money… what could you do?

Your “bounce rate” is when people do this to your website. It’s the percentage of visitors who come to your landing page and leave without engaging with any content, filing out your opt in form, or clicking through to another page. It’s people who just saw the page they landed on and said “nope… that’s not for me.” You want this to be as low as possible. You want to keep people around, get them to engage, and take the next step down your sales funnel.

Ok. Great. So you know what the bounce rate is… but do you know what causes it? Here are the 14 most common causes of a high bounce rate.

1. SLOW PAGE LOAD TIMES. PEOPLE GIVE UP AFTER 4 SECONDS.

“I love slow web pages.” – said no one ever

Want to slow down your landing pages?

  1. Use the cheapest hosting you can find. You pay for what you get.
  2. Add a few of oversized images that can’t be downloaded quickly.
  3. Use too many images that distract from the copy on your page and cause too many requests on each page load.
  4. Use custom fonts that must be downloaded before anyone can even read the page.
  5. Add a lot of fancy sliders and javascript effects that must also be downloaded to work.

All of these factors can lead to slow page loads. The golden rule is that people are going to leave if you make them wait more than 4 seconds for a page to download. Two seconds or less is really the ideal.

How do you know if you’ve gone above 2 seconds? Use one of these two tools to see how quickly the average visitor might see your landing page.

If you are over 2 seconds, you should consider looking for low hanging fruit of images, fonts, scripts, or content you could be cutting to lower the page load time. Sometimes less is more… unless you want people to bounce before you even had a chance.

2. BOMBARDING VISITORS WITH ALTERNATIVE OFFERS AND INTRUSIVE ADVERTISEMENTS

I love going to a page that might solve my problem only to be asked to watch a 30 second video that started auto-playing at the highest possible volume first. I stick around to the end of that experience just to see what happens. 🙂

Certain types of banner ads are also distracting, and they can reduce the amount of trust your visitors feel when on your site. Without trust, they are unlikely to provide you with email addresses, contact information, or payment info. Be careful of the kinds of ads you use: If your site is ad supported make sure that the ads are relevant to the visitor and related to the material on the page.

Intrusive advertisements will reduce the reputation of your landing pages and diminish the value of your content in the eyes of your visitor. If worthless pop-up ads appear within the first five seconds, the visitor is going to bounce higher than Chuck Norris on a trampoline.

Understand that the goal of each individual page is and make sure your ads and secondary calls to action aren’t getting in the way of that.

3. VISITORS SEEING SOMETHING UNEXPECTED AND UNRELATED TO WHAT THEY CAME FOR.

Not everyone likes surprises.

Let’s say you create an ad for “Amazing Dietary Supplements”, but your visitors land on a page that primarily promotes “Faster Weight Loss”.  Now… the faster weight loss may indeed be a benefit to the supplements… but it was the supplements that people came for.

If the ad headline is not front and center on the landing page you created, you will have lost the trust necessary to facilitate a conversion and the visitor is going to bounce higher than the empire state building.

4. MAKING VISITORS DIG FOR WHAT THEY CAME FOR WITH CONTENT THAT’S NOT SKIMMABLE.

Headlines and subheadings help visitors scan blocks of text quickly. The content they expect to find should be located in the appropriate section. If they cannot spot the content by scanning the headlines or subheadings, they will not take the time to search your site.

People do not read online text in the same way they read a book. Your landing page is not Game of Thrones. Most people aren’t going to read it cover to cover. Imagine you are writing for Cliff Notes instead.

Visitors quickly scan blocks of text looking for useful and engaging content, but they will not spend a lot of time trying to locate it. Before publishing your text to the site, have a friend scan the content to see if they catch the most important points. You can also use sites like http://fivesecondtest.com and http://usertesting.com to get 3rd party opinions on whether or not people can quickly understand your pitch.

5. SENDING THE WRONG PEOPLE TO YOUR LANDING PAGES

This is right up there with giving visitors something they did not expect. If your landing page sells a product that’s targeted at private music teachers, but you advertise all over communities of public school teachers… you are close… but you’ve missed the mark.

Anyone with a budget can drive a ton of traffic to a landing page… the question is whether or not you can drive the RIGHT traffic to your landing page. The RIGHT traffic means visitors that are primed to convert because they:

  1. Are clearly within your target audience.
  2. Have been primed by your pitch before they came to the landing page.
  3. Ideally have been referred by a friend… because your landing pages make it easy for someone to share after the conversion. Did I mention that’s a specialty of ours at KickoffLabs?

The right traffic will almost be able to predict what your landing page says because they’ll be expecting it. You’ll earn their trust and their conversions.

6. FILLING YOUR LANDING WITH POOR GRAMMAR AND TERRIBLE SPELLING MISTAKES.

I can’t spell. I’ve also got really bad grammar skills. We joke that we should just make that a thing with KickoffLabs. Every page should contain at least one spelling and one grammar mistake. Done properly it may eventually be endearing… Or it could just cause more people to bounce without even trying our service.

Visitors are looking for any reason not to buy what you are selling and give you their personal information or credit card. Don’t give them ones that are easy to avoid. If you are like me, you should probably employ someone that can actually speak proper English (or language of your choice) to review every written word you produce. There are also a lot of great proofreading services out there including:

7. PRODUCING A LOT OF LOW QUALITY CONTENT THAT’S HARD TO UNDERSTAND.

The quality of copy on your landing page goes well beyond the grammar and spelling. The copy needs to quickly communicate to the visitor that:

  1. You understand their problem.
  2. You have a solution that could be used to solve it.
  3. They need to just take the following next step.

If a visitor fails out at any of these checkpoints, they are going to bounce before they go any further.

8. MAKING YOUR LANDING PAGES HARD TO READ.

Any distracting elements can reduce the credibility of your site, which causes visitors to search for the nearest exit. Most common problems involve issues of legibility. For example, red cursive text on a black background will not read well, and certain kinds of fonts are also difficult to read. People scan content quickly online, so they will not want to work just to read lines of text.

9. MAKING YOUR LANDING PAGES UGLY.

A poor or unpolished visual design can distract visitors to your site, but it can also reduce the amount of time the person is willing to look at the page for purely aesthetic reasons.

We like to look at attractive things, and Web pages are no different from any other object. Attractive items will tend to keep viewers’ attention, and this is exactly what you want. Conversely, pages with bad design, few graphical elements and poor layout tend to provoke high bounce rates.

Now, this is not to say that good design will guarantee a great conversion rate. It doesn’t work that way. But I can say that poor designs will lower your conversion rate from your potential.

10. MAKING THE VISITOR FEEL LIKE THEY ARE BEING SCAMMED.

Ever traveled abroad and been approached by people on the street who introduce themselves with the phrase “My friend… my friend… ” followed by their pitch. Did it occur to you that they may have jumped the gun on the use of the word “Friend”? These are probably people you want to avoid when you are traveling in unfamiliar regions. The same is true for visitors to your landing page.

Within the first few seconds of arriving at a website, visitors will automatically scan for content and design elements that communicate:

• Credibility
• Safety

Many people focus on the overall content of the site to establish the reliability of the second item in the list above. The perceived safety of the site is related to the quality of the content and the appearance of the pages. If they communicate safety, the visitor will be encouraged to stay, explore and may even make a purchase.

If the visitor is not convinced that the site is credible, reliable and safe for any reason, they will bounce from the page within the first few seconds after arriving. The design of the landing page is critical to prevent this bounce rate from affecting your page rankings and future sales.

11. USING LOTS OF ATTENTION GRABBING IMAGES THAT STEAL THE SHOW FROM YOUR CALL TO ACTION.

This falls under the concept of a poorly designed page, but I see it often enough that I need to call it out. People spend so much time curating stock art, background images, rotating sliders, thumbnails, and other images that steal attention.

When a landing page is filled with distracting images, it lowers the readability and therefore increases the bounce rate. Images are great, but should be combined with equally great copy that they reenforce with a visual.

12. NOT HAVING A CLEAR NEXT STEP.

Let’s say you’ve avoided all of the advice so far… you still have a chance to increase your bounce rate by making your primary call to action hard to find. Having a clear call to action means the visitor knows quickly what their next step should be and where it is on the page.

You can’t miss the call to action in the landing page of the competition ran by this awesome UK Price Comparison site, and KickoffLabs customer 🙂

13. ASKING FOR WAY TOO MUCH INFORMATION.

It’s just rude on a first date to ask for someone’s mother’s maiden name, social security number, bank account, whether they prefer ice cream or frozen yogurt, which side of the bed they want to sleep on, etc.

Your landing page is no different. As a general rule, you should not be asking for information that you are NOT going to actually use to help the potential customer on the next step of their journey.

You don’t need five different ways to contact everyone, but if you are selling desserts… you may want to know their ice cream preference… as long as you are going to start using it to provide them with more personalized offers.

Now – that may not seem like much information… but when you consider the payoff… would you answer all those questions for 50 cents?

14. PRETENDING MOBILE DEVICES DON’T EXIST AND EVERYONE IS ALWAYS AT THEIR DESKTOP.

You’ve heard the phrase “mobile first” right? If you want to scare people away, just ignore that. Make your landing pages unresponsive so that people have to scroll, pinch, and zoom around to fill out your opt in forms. I’m sure that strategy will keep working for another five years.

Did you know that 45% of our landing page traffic comes from mobile devices? Yeah… neither did I until I looked at our customer numbers. That means that to keep people engaged you have to prepare for that.

IN REVIEW – PROPER LANDING PAGE ETIQUETTE

That’s a lot to take in. Here is a checklist of things to review on your landing pages…

  1. Landing pages load under 2 seconds.
  2. You don’t bombard people with intrusive ads that distract from your primary call to action.
  3. Your headlines match the advertisement that promoted the landing page.
  4. Visitors can quickly find what they are looking for.
  5. You sent the right people to your landing pages.
  6. Spelling and grammar have been checked out.
  7. The content provided is high quality.
  8. The text is clearly readable across devices.
  9. The page isn’t so ugly it erodes trust. Ideally it’s well designed.
  10. The images don’t distract from the call to action.
  11. You avoid creating that icky “I’m being scammed” feeling.
  12. You have a clear next step for the visitor that doesn’t make them choose.
  13. You avoid asking for too much information that you aren’t going to use right away.
  14. Make sure you are ready for the “mobile first” world.

Think of each landing page as a social contact. You want to avoid certain behaviors all of the time, but this is especially important when constructing a landing page because this is where you create a first impression that will encourage the visitor to get to know you better.

One of the biggest problem I see on landing pages today is that the person publishing them looks for ways to cram more “stuff” on the page that isn’t helping with the conversion. Long form landing pages are great… but the focus of those pages is on the text copy and NOT:

  • Fancy sliders with lots of images
  • A huge navigation menu that links everything to your main site
  • Pop-up polls
  • SEO keyword stuffing
  • Advertisements and secondary promotions
  • Chat windows
  • Click to call buttons (that aren’t primary calls to action)
  • Fancy pants animations
  • Social buttons and demands to “like us” before they even know what you are all about.

Simple page layouts can communicate a lot of information in a short period of time. Part of the process of simplification should involve removing all of the crap I mentioned above. This reduces the clutter, and it will make your text blocks easy to read.

Focus on what you really want the visitor to do on your landing page. Make sure all the copy, images, and call to action buttons are gently nudging people in that direction. Visitors will scan your landing page quickly to see if you have what they came to your site to find.

You need to make sure that they can find whatever they need quickly. By doing this, you may also be able to convince them to opt-in, pay up, or click through to the next page in your sales funnel.

Chris Corey CMO MarketHive

Series B – Say What!?

"Series B – Say What!?"

I hate it when people assume I know something I could easily understand if they'd just get out of their own little world and get into mine. Such an instance occurred just a few days ago with this article which discussed the new buzzword, 'market network'. 

Notice that at the end of the very first sentence you see the phrase, "…HoneyBook announced a $22 million Series B*.

My very first reaction to that was, "Whaaat??!!" But as I read through the article I sort of got the general idea of what they were talking about…"Series B"….yeah, sure. Like…money and investiing and stuff. But frankly I don't like it when writers use terms that their readers probably aren't familiar with. It's very frustrating to people who actually read. NB: Some people talk that way too… but that's another article. 

It's frustrating because written communication doesn't have the benefit of the spoken word and face to face contact….i.e. visual signaling through eye contact, body language, and trial closes. For that reason, a writer who wants people to understand and appreciate what they're writing will seldom, if ever, use terms the reader isn't likely to know.

As the inquisitive guy I am, I did some research on the term Series B. That term simply refers to one of the earlier stages in the equity funding of a company (NB: "equities" usually refers to stock ownership, i.e. ownership interests or positions in a business entity).

Here is an informative page with some text which explains what Series B means and also has a very short video explaining the term. If you're a Markethive community member you would be wise to have an interest in such things because we´´ might be closer than most of us realize to being involved in such a thing…i.e. we might be doing our own Series B in the near future.

Another item from the article that I thought worthy of reiteration and illustration is the following diagram:

It thought it would be worthwhile to remind readers that the green circle is a type of site that most of us are already very familiar with. The green circle is social sites like Facebook. Our fearless leader, Tom Prendergast, CEO of Markethive, has recently pointed out something that many us already knew, i.e. the world doesn't need another Facebook. The majority of content on Facebook and similar sites is worthless drama, meaningless sabre-rattling and posturing, pontificating, and bullshit. The world really doesn't need any more time-wasters like Facebook.

The other type of site, the 'marketplace' type of site on the left side of the diagram, is a more recent development on in the internet environment. We know those too. They are sites like AliBaba, Amazon, and Etsy, and other, where vendors sell stuff. People go to these sites because they have a regard for the quality and/or service they get there.

The third circle, the blue one, is represented by a term that few people outside certain niches of the internet know… "SaaS" or 'Software as a Service'. This is simply a useful functionality of some sort which you use via your computer. The difference is that the software that makes it happen isn't on your computer. It's somewhere else.

What is unique about 'market networks', as represented by the confluence of these three circles, is that it uses SaaS to facilitate the connection between the networks of people (i.e. the consumers) to the marketplaces that have something they're looking for.  

The market network also removes most of the burden of traffic generation from the vendors on the marketplace too. Traffic that they have previously had to acquire on their own, by more circuitous and laborious means, is now facilitated by the interconnection with the 'networks'.

For example, eBay, Amazon, and AliBaba sellers previously had to hustle to get attention to their 'stalls' in their respective marketplace. As I understand, on a market network site, the presumption is that their value proposition will be a bit more apparent and they will be able to focus more on their own quality and service and less on 'getting traffic' with the presumption that the consumer, i.e. the average dudes from the green circle, will have a better buying experience.

In my view, the most unique factor in this new marketplace paradigm is the software itself and the design elements of the systems themselves. Conceivably there could be some differences between various market networks relative to what product or service they actually deliver, i.e. consumer goods vs. travel services vs. financial services, etc.

One this is certain: People or organizations who can figure out and actualize these ideas will make a lot of money. In fact, considering that the term itself is brand-new, it might even be that there are some entities on the internet that are closer to already being a functional market network that even they themselves realize (Markethive.com?)

It's even conceivable that there could be market networks specifically for home based business opportunities…. keeping in mind that it is no longer true that a legitimate business has to even have a centralized geo-presence anywhere. It doesn't.

So, we see how the face of business is changing as the ways that buyers and sellers connect with each other. The internet has made this possible. Basic fundamentals indeed are changing and this is a good time for entrepreneurs who see it for what it is and/or are interested in pushing boundaries.

And it's also easy to see that these changes are probably pretty scary to established players who aren't very excited about having to go back to work to reinvent their business model.

To project a bit further into the future, just imagine what a new definition of 'money' itself will do the nature of entrepreneurship, business, and society. I'm referring of course to cyber currency.

If you're a home based business entrepreneur you will recall that over the last few years there have been several cyber currency scams in the MLM niche. All of them have gone down in flames. People apparently really 'ate it up' what they were offering.

I was one who wrote in several articles (with a previous employer) that I would never consider any cybercurrency centric MLM opportunity. But what would happen if somebody was able to really pull it all together, do it correctly and legally, and make the idea of cyber currency work in a Denentralized Autonomous Organization (DAO) encompassing Market Networks?

Depending on your perspective, these ideas are either fascinating and exciting or scary and foreboding.

The Future Of The Web In The Next 2-3 Years

Market networks bring businesses into the “enabling economy”

At SXSW I became aware of a new marketing trend called “market networks.” This new business model of an “enabling economy” seems to coming of age and I thought I would explore the idea.

Market networks represent a different way to do business compared to sites like Air BNB or Uber that simply aggregate demand. In that model, neither the seller nor the customer matter. An Uber driver doesn’t know the customer and the customer doesn’t know the driver. They may never connect again.

But what if the service provider and client DO matter? What if you want to do business with a very specific person?

Jonothan Yoffe, the founder of AnyRoad described how he got the idea for his travel-related market network. He paid $2,000 for a guided trip to hike up Mount Kilimanjaro. The guide he used was experienced and hard-working but only received $5 out of the $2,000 he paid for the trip.

Where did all the rest of that money go?

Marketing, service, insurance … sure. But the fact is, somebody other than the guide was profiting from the trek. It occurred to him that if you could aggregate all the fragmented professional services needed to run a business like this you could simplify the transaction and put more power (and profit) in the hands of small service providers.

Opportunities for these market networks exist wherever there are groups of service professionals supporting an industry vertical. Organizing this way could have a significant impact on how millions of people work and live, and how hundreds of millions buy services.

The key attributes of these companies:

  • Combine the main elements of both networks and marketplaces
  • Use SaaS workflow software to focus action around longer-term projects and relationships, not just a quick transaction (like Uber)
  • Promote the service provider as a differentiated individual, helping to build long-term business benefits
  • A market network elevates the person, their reputation, their value.
  • Transaction fees are usually lowered and legal contracts are simplified
  • Market networks have stronger retention and engagement than marketplaces

The AngelList (start-ups), Houzz (decorating), LiquidSpace (office space), andStyleSeat (salon services) are pioneering examples of successful market networks. Here are a few stories I heard at SXSW about how these market networks are operating.

StyleSeat

StyleSeat is a beauty start-up in Silicon Valley. In the salon business, much of the profit will drain away from a hair stylist to pay fees, rent on a shared space, marketing, advertising, etc. By aggregating these services to help individual stylists, StyleSeat can direct more customers and profits their way.

Already 400,000 stylists have signed up and 10 million clients use the service every month. The start-up has succeeded entirely by word-of-mouth success.

AnyRoad

As I mentioned, AnyRoad aggregates services for small businesses in the tourism industry. So many small business owners lose out because they don’t know how to efficiently do marketing, SEO, customer service, etc. Creating a market network to aggregate these services greatly simplifies their workflow, and they can run their business from a smartphone app provided by AnyRoad.

AnyRoad is experiencing tremendous growth because they found that the “nodes” in their network started expanding the network as the tour guides connected to the concierges and agencies that generate their business.

On average, their customers are growing their business by 30 percent in the first month through access to new customers and markets.

Liquidspace

Liquidspace is a market network for working space. The founder, Mark Gilbreath, discovered that leasing office space was generally an inflexible and complicated business.

The traditional real estate model does not work for most new businesses – a start-up might need space for days, then a month, and eventually a year or more to adjust to the dynamics in their business.

LiquidSpace rapidly signed up 50,000 companies in 800 cities and 5,000 venues as a marketplace for office space. One particular creative solution is to connect to hotels to lease unused rooms and meeting areas for temporary business space.

The company also offers a service to alert businesses when property in a certain area becomes available to most effectively connect supply and demand. You can also rent space in a very efficient way by implementing pre-negotiated, standard legal contracts.

Who loses

With any disruptive idea, not every company will benefit from this trend. Here are the types of companies that could lose:

  • Those who collect fees as an intermediary
  • Capitalists investing in brick and mortar services
  • Marketplaces that are not providing value to the vendors, who are simply aggregating demand.

These market network business have the potential to disrupt traditional markets by doing something in an entirely new way.  They are unburdened by the traditional confines of an industry and provide a value that is different from, and maybe even better than, the standard way.  This new way might not be cheaper, but it is more flexible and immediate – for the user and the providers.

What are your thoughts?

This post was originally written as part of the Dell Insight Partners program, which provides news and analysis about the evolving world of tech. For more on these topics, visit Dell’s thought leadership site dell.com/futurereadyDell sponsored this article, but the opinions are my own and don’t necessarily represent Dell’s positions or strategies

Chris Corey CMO MarketHive

Illustration courtesy Flickr CC and Simon Cockell

Written by: Mark W Schaefer

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