Small Business Dreams - Inventors Build Products that Innovate
I have had many inventors as clients that come to me for marketing assistance. They all have the same problem: the product isn’t selling. They all came up with a brilliant idea, patented it, found a manufacturer,and sunk their savings into production run of their invention. Now they are broke, sitting on a garage full of their great idea gathering dust. What is really funny is that most of the inventions seem like they would
sell. They seem like wow! This is a great product! But, no one purchases the product.
Small Business Innovations That You Build won't Always Sell
Sometimes the best inventions don’t sell in the marketplace. Sometimes the best product doesn’t sell. Consumers are fickle. They are taken by fads. They are predictable in one moment and erratic in the next. Even when the product is extensively tested in the marketplace there can be unpredictable results.
New Coke Field of Dreams - Business Innovation That Didn't Work
Just ask Coca-Cola. Remember “New Coke” formula that was introduced in April 1985. It tested well in focus groups. It was abandoned 3 moths later due to 400,000 complaint letters and phone calls that Coca-Cola received from disappointed customers. Coca-Cola has big enough pockets to recover from such a disaster; Start-ups don’t.
Bindrup’s Advice: Build a prototype, protect it, and get it in front of your market. Let sales drive the production.
PHOTO CREDIT: Alex Ford, Creative Commons License, Some Rights Reserved.
Business, Marketing, and Life Lessons Learned From My First Job: Paperboy
I couldn’t wait to turn eleven. Turning eleven was big deal - You had to be eleven to become a paperboy. My first job as a paperboy taught me many lessons in Business, Marketing, and Life.
Business Lessons Learned
Getting Paid Is Difficult -
We had to Collect Money directly from our customers. We had to go collecting every month. It was the least favorite activity for us. – Usually the boys would say,: “I want to go and buy some comic books – I have to go collecting”. No collecting = no money. Sometimes I would have a customer who would refuse to pay – we could negotiate with them, or use our “nuclear” option: Stop delivery.
It Takes Supplies to Get the Job Done -
You had to make sure that you had enough rubber bands and plastic bags on hand in the case of foul weather. Rain spelled disaster for a paperboy. Fortunately, the bags and the rubber bands were free.
Risk is Always Present in business –
I had to content with dogs (Everyone knows that dogs hate Paperboys), rain, ice, hills, cars and accidents. On one occasion, I was knocked unconscious when the straps of my paper bag came undone and wound around the front wheel of my bike which sent me flying through the air with no helmet – I woke up in a twisted mess with the bike in the gravel on the side of the road with a goose egg on my head.
Do it Right The First Time -
We got charged $1 for every complaint we got from someone who couldn’t find their paper or if the paper was wet or under the car or not delivered. Every paper I threw had a $1 risk associated with it. If I threw the paper a little off course, I had to stop and fix it. I couldn’t afford complaints.
Marketing Lessons Learned
Marketing moves the world –
The advertising section of the Sunday paper was dropped off to me on Friday morning. All the ads were already sold – we just had to wait until Sunday to get the actual news section of the paper that was always smaller than the advertising section. The ad section was very important
Perks are a great reward-
Every job has its perks. My mom got the coupons first, and our group of paperboys got rewarded with pizza parties for having low numbers of complaints. The best perk of all: People Tip for a job well done. We got to see our customers face to face each month when we collected money. If you did a good job, you most often got a tip. Christmas time was the best time to collect. During the holidays there were always tips, gifts, and treats.
You Need Data to Make Decisions-
Every day we had a printout of the new subscribers to the paper and the ones that want to be removed from paper service. The list also showed us any complaints that customers had made to the newspaper. I had a very valuable list in front of me. The list shows me my “difficult” clients as well as my new clients that I needed to impress. Most important of all was the list of those who wanted to be removed from the list. I knew which ones I had serviced poorly and exactly why they were quitting the paper. It was a sobering fact to see that my revenue was based upon how happy I kept my customers.
How to Assess a Deal –
Trash collection happened 2 times a week and we would get first pick at what people were throwing away. One mans trash is another mans treasure. There were always treasures to be found that people put out on the curb as trash. Some of these treasures were “Fools Gold”, and really deserved to be in the trash. However, other treasures were wonderful to find.
Work is Work –
Newspapers are a dirty business – your hands and your paper bag was always soiled from the ink. The ink got onto your clothes as well. It was hard work.
Deadlines are important –
All papers had to be delivered by 6am. No exceptions
Life Lessons Learned
People Do Bad Things -
At 11 years old, I was well aware of the ugly side of humanity. I have seen next-door neighbors steal the paper from their neighbor. People would lie and say that their paper was not delivered, when I knew that I had put one on their driveway. I always had that one difficult person who would constantly complain to get free papers or a discount on their subscription. Larry, my paper dealer, who I turned in my collection money to and who brought the stacks of newspapers to my front porch every day, ended up stealing all the money that we as a group of paperboys collected and skipped town.
Know when to ask for help -
Sunday papers were brutal on us paperboys. Luckily, Dad agreed to drive me around in the car on Sundays. That made life a lot easier for me. Sometimes the paper was so big on Sunday that I had to take two loads to complete the route. My Dad liked to help. He thought that the hard work was good for me. He was right. I am grateful to my Dad because on more than one occasion he would come into the entryway of our house where I had fallen asleep folding papers at 4am to nudge me awake.
Work is a Fraternity –
All my friends who had paper routes were done at 6am as the sun came up. We would meet on Saturdays at a convenience store for a healthy breakfast of chili-cheese hot dogs while playing arcade video games and reading the latest comic books. After all, we could afford it. We were self-employed micro business owners who were flush with cash because we always went collecting on Fridays; Because everyone knows Friday is payday.
Photo Credit: Creative Commons License, Some rights Reserved: rosscrawford1
Innovation with the Apple iTunes Music Store
Apple re-invented how we listened to music 10 years ago by introducing the iPod. The genius of the iPod was not the device itself. There were multiple devices on the market that played mp3 files. The genius of the iPod was the iTunes Music Store. If you remember, the music world was turned on it's head with the invention of shareable music files. Napster appeared and the record labels were scared of losing control of their kingdom. Instead of embracing the future of digital music and creating a way to monetize the process for the artists as well as themselves, they ended up suing their end users. While the record companies were engulfed in a legal storm to protect their antiquated business model, Apple created a new one. Steve Jobs had it right. Why pay for an entire album of music when you want to hear just one song. Why not give listeners what they want and the artists get paid for it. What a novel concept! It was a game changer. The music business has never been the same. It has been 10 years and the publishing business has taken a lesson from the unwillingness to change attitude of the record labels. The publishers realized that they will either figure out a new business model or someone else will introduce one to them. Well, Amazon lit a match with the Kindle and it has now grown into a Fire. The business model began to change. We still see outdated remnants of the old way of thinking. Digital Rights Management restrictions still makes us feel like we are getting the shaft as consumers. The pricing model for ebooks is nearly as much as their hardback versions. The publishers have embraced the technology, but they are not catching on to bigger picture of what ebooks can do.
Apple Innovation Brings Textbooks to the iPad
Apple has figured it out. They have gone to the textbook companies who control a large volume of the book market and they have given them a new business model. This new model lets them ease out of the old way of publishing by lowering their costs drastically awhile maintaing control of the content. Apple has always been a partner with education. Now that partnership will increase. The concept is simple: downloadable textbooks on the iPad or iPod, delivered via the iBooks Store. What is remarkable is the pricing model. The most expensive textbook in the store right now is priced at $14.99.
iBooks Author and iTunes University Drive Innovation in Education for Apple
As an added value, the textbooks are able to deliver interactive experiences with audio, video, and 3D graphics that create an immersive environment for the reader. To further the impact of what Apple has done, they also released iBooks Author- a free application that allows users to create beautiful, multi-touch, interactive books for the iPad. In addition they have increased the offerings in iTunes University to include self paced study courses at MIT, Yale, Stanford, and Harvard. All of the courses are free! These new technologies will allow users to learn in a different way - I think a better way.
I was watching a video of Seth Godin http://www.sethgodin.com/sg/ where he talks about 7 Kinds of Broken Business or Marketing Processes. Seth is a master marketer; he gets it. One of his types of broken was “Broken on Purpose”. I thought to myself, who makes a business process that is broken on purpose? Well, I found one myself: The Department of Motor Vehicles. Some might say, hey Mike, that’s is not a big surprise- everyone knows that he DMV is the worst place you could spend your day. But, I will tell you that here in Nevada the DMV has made significant improvements in the last 20 years. When I got my license at 16, we had to follow multicolored lines, painted on the floor that started at the front entrance of the DMV. It was confusing, it was de-humanizing, and it was ineffective; people kept bumping into each other because they were looking at the floor. The DMV has come a long way. Now they have modern facilities where automated “Now Serving number A43 at window 17” voices direct you to the person waiting to help you. It usually takes less than an hour to get your business finished at the DMV. Yes, the DMV has come a long way, however, they haven’t come far enough.
I was trying to register my vehicle with the DMV Online Registration Service. I got home from work and got on the website only to find this message: Sorry the Online System is Currently Closed. Closed? What do you mean closed? I must have read it wrong – perhaps the system is down for maintenance? No. They were closed. WILL SOMEONE PLEASE EXPLAIN TO ME IN THIS DAY AND AGE – HOW CAN A WEBSITE BE CLOSED? Isn’t that the purpose of having a website instead of a brick-and-mortar store? If you can’t purchase something from an online store – what is the point? Imagine Amazon.com or ebay.com saying: sorry our store is closed, please come back tomorrow during normal operating hours. This is not only illogical, but it is also BROKEN. Seth Godin was right.
Every service business has one major problem: You only earn money when you are performing your service. In a business that sells services, there is a limit on how many you can perform a day. Even when business is booming, you only have 24 hours in the day that you can work. Whether you are an interior designer, accountant, or window washer, you have the same problem.
THE SOLUTION: PRODUCTIZE YOUR SERVICE.
What does it mean to “productize” your service? It means to take some aspect of what you provide as a service company and put it into a tangible product. Take the knowledge and expertise in your field and create a product based on this knowledge. You can sell your product online 24 hours a day, without you as the service provider being there in person. Here are a few examples: The interior designer could create a DVD series that helps people to decorate their homes. The accountant could write a “how-to” book for small business owners that would teach them how to use financial accounting software. The window washer could create their own brand of window washing solution, formulated to work in our climate conditions. All of these solutions help to grow the brand of the service company. Brands demand more money in the marketplace. If your service business creates and grows its own brands, it will ultimately be worth more when you decide to sell it or merge it with another company.
As an expert service provider in your field, what kind of product could you come up with to promote your business? Productize your business today!
Last week my washing machine broke down right in the middle of a load, and I needed to call a repair service. I Googled appliance repair and up came a list of a dozen companies in my area. I clicked on the first one that looked promising and visited their website. Their website was cleanly designed and effective. I was pleased to see that they listed that they worked on LG front-loading washing machines and I felt comfortable that they could solve my problem. Wanting to get this fixed right away, I placed the call to them and got the following recorded message: “We are not accepting service calls right now” then it hung up on me. There was no “leave a message at the beep” or anything else. It seemed as though they were out of business. I thought they should at least take down their website if they were not in business anymore.
I clicked on the next repair service that had a website. Now I use the term website loosely because it only had two pages. One of the pages was a home page where they listed their services and contact info. It was very basic and not well designed. The other page contained a coupon that you could print to save $10 off your service. I liked that, so I printed the coupon and called the number listed on the site. This time my experience was very different. I got an actual person on the line and was able to explain to her the problem with my washing machine. She quickly took down my information and said that she had a technician in the field and he would call me back to schedule a time most convenient for me to have them to come and look at my washing machine. Within 10 minutes, I received a call from an appliance technician who verified my address and set a time that evening for the service call. The service tech kept his word & arrived on time at my home for the service call.
What was the difference in these two service experiences? One of these businesses got my money because of positive experiences with their touch points. A touch point is any point of direct interaction between a stakeholder and a business. In this case, I experienced 4 touch points: the website, the initial phone contact, the phone contact with the tech, and the actual service call with the tech. All of these were positive which makes me a happy customer.
How does your business touch your customers, potential customers, employees, vendors, etc. How do you treat you customers at these touch points? Do you make them feel welcome, assured, and confident that they are doing business with an honorable and competent firm, or do you make it difficult for them to do business with you? How you design your touch points makes all the difference in keeping customers happy and willing to refer other business to you.
No amount of money you spend on your marketing efforts can help if your customer service touch points fail you. By the way, the company that I called first is actually still in business. For how long is anyone’s guess.
Lebron James made his decision this week to take his talent to South Beach and play next season for the Miami Heat. It shocked many fans in New York and especially in his hometown of Cleavland. James said that it was the best decision for himself and his family. He is right, especially when it comes to the issue of state income taxes.
Consider these numbers:
LeBron makes about $30 million a year. Roughly $17 million from the NBA & nearly $13 million from his athletic shoe endoresements from Nike. According to the Ohio State Department of Taxation website, someone earning as much as Lebron would pay a flat tax of $9573.30 plus 6.24% of any earnings in excess of $200k a year to the state of Ohio. Lets assume that he is just being taxed on his earnings from the Cavaliers. $17 million x 6.24% = $1,060,800 + the $9573.30 = $1,070,373.80 that he would owe in state taxes to Ohio next year. If you add in his Nike contract the amount goes to nearly $2 million. By playing in Florida next year, where they have no state income taxes, Lebron saves himself at least a million dollars, but most likely closer to $2 million. How is that for tax planning.....I hope that is enough for him pay for his relocation to Miami. I think he'll be able to get by.
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