Seth Godin’s Austin Linchpin meetup.

Are you a Linchpin?  A linchpin is someone who makes a difference… who starts a trend… who gets it.

My favorite Blogger Seth Godin is arranging a worldwide Linchpin meetup on Flag day June 14, 2010

Austin’s meetup is being organized here:
http://www.meetup.com/Linchpins-are-everywhere-raise-the-flag/762/

Come, join us at 6:30-8:00pm at 360 Primo Cafe in the Arboretum!

9828 Great Hills Trl
Austin, TX 78759
Neighborhood: Great Hills(512) 795-9292

And check out Seth’s Blog….  if nothing else, it will give you courage to change.  And being willing to change makes you a POTENTIAL Linchpin.  Now do it!

Why Small Business is Turning to Social Network Marketing

This recent article from emarketer.com http://www.emarketer.com/Article.aspx?R=1007706 got me to wondering why would small business be turning to social network marketing?  The answer is obvious if you stop to think about it: its the only kind of marketing that has ever “really” worked for small business, since the invention of “barter” some 15,000+ years ago.  After all, if your neighbors know that you’re the guy who makes the best chairs, they’ll barter with you when they need one.

Consider: what is social network marketing supposed to do?
  1. Build a community of folks who like you. (Fan you, follow you, or whatever).
  2. Develop a place where people who like you, can engage with you.  (a virtual storefront, that is interactive with the store owners).
  3. Attract and inform new people that you make the best X.  (x=chairs, or whatever).  Encourage your community to say you make the best X.
So, is this any different than what small business do in a community?
  1. A small business historically belonged to its community by physical location.
  2. Small business have almost always been more interactive… usually you get to speak with the owner directly.
  3. Real life communities have always been social networks… spreading the news and letting people know that you make the best X, and especially letting OTHER people say you make the best X has always been the best form of marketing: Word of Mouth.

In this kind of climate, Small business has an opportunity to WIN BIG.

They do have to make the best X though!  (or at least convince some folks you do)

Arrogance of Mankind

First, we think we can own each other.  Then, we think we own the planet.  Next, we think we know how the universe was created.  And finally, the coup-de-grace, we think we know how mankind was created.  Seriously, are we that arrogant?  Ironically, Conservatives & Bible altruists are often the worst kind of arrogant.  They think they know what God means!  (seriously?)  Yep.

The most liberal magazine I read is Scientific American.  WOW, do they hate creationism.  They also believe very strongly in global warming, anti-gun law, and science in general.  That’s all fine and good, but what frustrates me is their arrogance.  They deny the possibility that they don’t know the answer.  They treat hypothesis and thesis as fact.  They present data as though it proves any point.  This magazine is the perfect example of “scientific arrogance”… prove what you can prove, not what you believe.

Worse than the liberals are the conservatives.  It stupefies me that conservatives actually think they know what God means when he says 7 days.  They discount certain scientific facts for “their interpretation” of what they’ve read in the Bible.  The idea that God could wield his power in such a way as to make a day 1Trillion years is somehow incomprehensible?  That God’s creation of mankind might have been done “through” animals (which also came from dust) unfounded?  Even if you take every word of the Bible as fact, there is so much left UNSAID BY GOD and so much BEYOND OUR UNDERSTANDING that there is PLENTY of room for science.

So, what does this have to do with business?  Nothing and Everything.

When thinking about “context” of the world in which we live, we have to realize that people are “POLARIZED”.  Most people flock to Creationism or un-yield in their belief of Evolution-ism.  It is rare for the person to accept both into their belief system.

In business, make products that “Polarize”… and don’t be afraid of it.  Realize that you can’t please everybody (most people aren’t wired that way!).

You’ll have a “hit” when you please one group, and make the other group hate you.

The Abundance Principle

Abundance is the principle that there is enough of everything for everyone.  Some people have this principle, most do not.  It is rare to find people who hold this principle dear, but when you do, hold on to them.  My friend Chris recently reminded me of this principle when he said: “hey I just want you guys to be successful”.  What an inspirational sentence.  He’s not overblown by his own success.  He’s not grasping at a “piece” of a pie.  He wants the pie to grow.  He wants to share the pie… He believes there is plenty of pie for everyone.
My idol, Benjamin Franklin said: “HUMILITY. Imitate Jesus and Socrates.”  What is more Jesus-like than sharing 2 fish and 5 loaves?   You can’t do that without belief.  Believing there is enough for everyone.  That’s principle my friends… and I’d do just about anything for my friend Chris as a result.
Here’s a quiz to see how much belief in abundance you have… it does take humility, and we are sorely lacking it in this generation of cynicism and narcissism.
  1. If you have unexpected visitors to your home, would you feed them anything you have in your cupboard?  +1
  2. If you have a bag of apples and you see a beggar on the street, will you try give him one? (side-note, they probably won’t accept it) +1
  3. If you have a tasty treat (your favorite), do you always offer to share it? +1
  4. At work, do you share credit for everything good that happens (even when you did most of the work)? +2
  5. At work, do you think of competition as “the enemy”? -2
  6. At work, are you happy when the competition comes out with a “hit”? +2
  7. At work, do you feel good when your peers get promoted or rewarded? +2
  8. Do you believe there is NOT enough food in the world to feed everyone? -5
Think about it…  if you scored less than 7, you may need to get over yourself.
Enjoy Apple’s rise to power.
Enjoy the dominance of Mac.
Radiate in the success of others.
There IS enough food for the world… if only we’d get over ourselves and stop hoarding.

Finding motivation when things go wrong.

Sometimes things go wrong.  It is inevitable.  Sales tank, launch fails, something breaks, something does not happen that you hoped it would…  The problems REALLY compound when we let it “de-motivate” us and send us into a tailspin.  How then do you keep your head up when the chips are down?  I have an answer, and it may surprise you: Give up.

Or rather, consider giving up.

This idea is based on Principle AND Logic, here is how it works:

  1. Construct a NET PRESENT VALUE of the current opportunity.  (NPV = the time weighted value of future cash flows… in essence, how good is the opportunity from today->on)?
  2. Imagine giving up on the current opportunity, and what you COULD be doing instead…. then calculate the NPV of that.
  3. Be sure to weight NPV according to risk.
  4. Compare the NPV of Giving up, with the NPV of Continuing.
  5. Which is higher?
  6. Now, Give up, or don’t….  if you decide NOT to give up, you’ll have a good reason why!
Is this harsh?  Maybe, but did you notice something?  We DID NOT COUNT THE PAST!  Past investment, past success, past failures, and past pain/time/etc… all IRRELEVANT.  That recent screw-up/failure should have NOTHING to do with the NPV of the future.  Seperate it.  Evaluate.  Take action.
Sometimes, Giving up is harder to do than continuing.  Sometimes, it is entirely the RIGHT thing to do.
Remember, the World Needs you, so spend your time on that which can generate the most Value… as you see value… according to your principles.

Principles of Business: How Temperance helps build companies.

Following my Benjamin Franklin post a while ago, I set out to try to practice the Principle of Temperance.  What I discovered is that this important value can also help guide a business on the path to “mutual success”.

  • TEMPERANCE. Eat not to dullness; drink not to elevation

For me as an individual, I’ve always had a problem with “eating to dullness”…  funny way that Benjamin put it… because if you do overeat, you do feel dull, slow, and lethargic.  My new years resolution was to “eat no seconds”, but my firsts are too big to begin with.  While I did better this week, I did not do great.  I’ll need to keep working on this.

For a company though, Temperance has a different meaning.. I’d call it this:

  •  TEMPERANCE. Exploit not your customers; Starve not your suppliers

This week, following this guideline for business, I had some GREAT successes…

  1. I struck upon a brilliant way to charge “fairly” for Karmaback… why not charge per fan/follower we bring?!  (Thanks Suzanne, UT MBA 04 for the inspiration)
  2. I decided that “Karmaback users” are the “suppliers” for our business.. and we MUST not starve them.
  3. In my consulting business, I decided to continue offering my “start-up/small business” discounted rates.

All in all, a good week for business Temperance… now I just need work on that other kind of Temperance (food & drink, begone)!

Why founders make better CEOs.

My own opinion is sort-of irrelevant.

The numbers speak for themselves:

“First, the University of Pennsylvania’s Wharton School of Business just published an analysis of recent exits for high technology companies such as BlackBoard, BladeLogic, Concur, Danger, Liveperson, LogMeIn, and Netsuite. Looking across these nearly 50 companies, the study finds that founding CEOs consistently beat the professional CEOs on a broad range of metrics ranging from capital efficiency (amount of funding raised), time to exit, exit valuations, and return on investment.

Second, for folks keeping score at home, this phenomenon appears to extend beyond high-technology companies. Felix Salmon, for instance, points out that Fortune’s editorial staff considered twelve other candidates including Warren Buffett, Carlos Slim, and Martha Stewart before naming Steve Jobs the best CEO of the decade in November 2009. Salmon points out that “not a single one of the 12 [candidates] is a CEO who was hired to run a company by its board of directors.”
There are certainly exceptions to this rule, most notably Google and Cisco (I will address both exceptions later in this post), but the evidence is one-sided and overwhelming.”

READ ON!

http://bhorowitz.com/2010/04/28/why-we-prefer-founding-ceos/

How to Build a Marketing Plan

I’ve scoured the internet for a nice, simple, method for how to build a Marketing Plan, and all I find is very short, confusing, unorganized stuff (and very little of that).  So, without further ado, my 10 steps for building an “AWARD WINNING” Marketing Plan.

  1. Learn what the heck Marketing is in the first place.  (See my blog on my topic here…. my 5 year old son could figure it out… so can you).
  2. Research your 5-Cs. Customer, Company, Competition, Collaboration, Context
    1. This can be done fairly easily with some Google searching or industry related press reading.
    2. I find doing it in order is the best..
    3. Just jot down as many notes as you can for each section.
    4. Below is the goal you are trying to reach for each C
  3. Customer – Write down WHO is your ZEBRA (Ideal) customer.. then expand that view just enough to encompass a market that is of a “small, but big enough” size.  The goal here is to choose a FOCUSED group of people who you can clearly identify… NOT make it the biggest set of people possible (that’s for Business Plans, not Marketing Plans).
  4. Company – Write down what are your companies strengths, weaknesses, vision, and values.  (This will help in the rest of the plan).
  5. Competition – Write down a list of competitors and note their “pricing” and their “differentiation” claims.  SPEND LOTS OF TIME HERE.  It’s worth it later.
  6. Context – Write down trends in society, business, culture, and geography that MAY (or may not) cause you PROBLEMS or create OPPORTUNITIES.
  7. Now, write down your 4 Ps – Product, Place, Price, Promotion.  First up: Product.
    1. To get Product right (for Marketing purposes), it must fit in the following Sentences:
    2. ACME (YOUR COMPANY/PRODUCT/BRAND) is a _______  that does ____________ for ________.
    3. UNLIKE OTHER _______ we do _________________________.
    4. Now list 3 Benefits. ( NO MORE )
    5. Now list 3 Features. ( NO MORE )
    6. If you can get this focused with your product, you’re ready for the next step.
    7. NOTE: If you have engineers/tech people, don’t invite them to help with this section… do it yourself (or have someone do it for you)… then correct as needed.
  8. Place – Where do you plan to sell?  What is your selling motion?
  9. Price – How much will you charge?  What is the upsell path (or options)?  What is the average lifetime value of a customer?  How does all this compare to the competition?
  10. Promotion – NOTICE, I am last here… many people think a “Marketing Plan” is just this section… (the Advertising, PR, etc.)… but it is not.  This is important, but not the MOST important.  To me, the first C is most important (Customer) Followed by the first P (Product).  Anyways, here’s promotion:
    1. How much can you spend to acquire a customer? (see average lifetime value for hints)
    2. How many customers do you want to acquire in a period? (therefor, that is your budget)
    3. What “Free-ish” marketing can you do? (PR, Social Media, SEO, other)?  How can you measure its effectiveness?
    4. What “Cheap-ish” marketing can you do? (SEM, Google Adwords, Google Adsense, CMP, CPC, CPA)?  How can you measure its effectiveness?
    5. What “Expensive, but hopefully measurable” marketing can you do? (Partner/Reseller Marketing, Paid Banners, Trade Shows, Events, etc.)? How can you measure its effectiveness?
    6. What “Brand building” MUST you do? (non-measurable stuff like TV, Print, Billboards, etc.).?
    7. Now, allocate budget from 2-6… where you don’t spend 1c on the next item, till you’ve spent all you can (reasonably & scalable) spend on the prior number.  MOST COMPANIES SHOULD NEVER GET PAST 4.  (at least not in the early days).

Hope this was helpful!  

Comments and Arguments and Links are always MORE than welcome.

Benjamin Franklin & Finding “Character” in modern society.

Character & values (principles) are old fashioned.  Even modern day self help books (some that I love, including The 7 Habits of highly effective people) barely touch on the subject.  They say it is lacking, but cannot name the principles & values and what they are… let alone how to improve them.  What is equally missing is any true role models of values who not only live by their values and do business by them, but also who have been successful beyond measure.  One such character in history has done so, and his great example is more than inspiring: Benjamin Franklin, whose amazing autobiography lays out not only a definition of the values and character that are essential to success, but how to improve them and succeed at business along the way!

Here are his 13 values (from his Autobiography)

1. TEMPERANCE. Eat not to dullness; drink not to elevation.
2. SILENCE. Speak not but what may benefit others or yourself; avoid trifling conversation.
3. ORDER. Let all your things have their places; let each part of your business have its time.
4. RESOLUTION. Resolve to perform what you ought; perform without fail what you resolve.
5. FRUGALITY. Make no expense but to do good to others or yourself; i.e., waste nothing.
6. INDUSTRY. Lose no time; be always employ’d in something useful; cut off all unnecessary actions.
7. SINCERITY. Use no hurtful deceit; think innocently and justly, and, if you speak, speak accordingly.
8. JUSTICE. Wrong none by doing injuries, or omitting the benefits that are your duty.
9. MODERATION. Avoid extreams; forbear resenting injuries so much as you think they deserve.
10. CLEANLINESS. Tolerate no uncleanliness in body, cloaths, or habitation.
11.TRANQUILLITY. Be not disturbed at trifles, or at accidents common or unavoidable.
12. CHASTITY. Rarely use venery but for health or offspring, never to dulness, weakness, or the injury of your own or another’s peace or reputation.
13. HUMILITY. Imitate Jesus and Socrates.

In my opinion all 13 are of high value, but in business, Frugality, Industry, Resolution, Order, and Sincerity are of the highest Importance.  It’s not enough to agree.  You have to practice every day.
#13 (Humility) is one of the hardest to follow in our society today…. I’ll save it for last.
In the mean-time, I’ll track my weekly progress, successes and failures, as I focus on practicing 1 of the above values, in turn, just as Benjamin Franklin did over 200 years ago.

Measuring Success… of Social Network Marketing.

It is a slippery slope to define success in relation to others.  The problem there is, there are always ‘others’ more successful.  The better way is to measure ones success vs. ones STATED goals.  This is true in business as in life.

Companies struggle to measure “Social Marketing” success, because they have no clear goal.  Most Marketers are happy to just get increased web traffic.  This stems from the assumption that revenue can’t be tied to social marketing.  My new company, Karmaback, can definitely fill the gap in measurement AND deliver revenue directly tied to social marketing.  This feature, however, is irrelevant… because marketers don’t have this as a goal (yet).  
Instead, we at Karmaback have decided to focus (for now) on the goals that marketers do set: more fan growth (Facebook & Twitter), and more site traffic.  We’ll keep preaching that revenue should be the goal, but until our customers realize it is possible, we’ll deliver results they “think” they want.