From One Entrepreneur to Another

 

“We are going to change the world”. If ever there was a cliche at a technology start-up pitch, this has to be it.  Having gone through the roller coaster ride of raising investment, I learned an important lesson. Anyone that asks you how you are going to build a $1 billion dollar business and how you are going to "change the world" needs a wake up call. It is astonishing how many VCs continue to view investments through this lens. Furthermore, it is amazing how entrepreneurs are forced to pander to it. Sure, I understand the traditional VC investing model and that they will make five to ten investments a year and hope that one delivers big. The rest are simply collateral damage that could not scale fast enough to satisfy the VC with a huge exit.  Those that deliver big are few and far between and you probably won’t be one of them. But don’t let that stop you from building a great product and business because you can. Don’t waste your precious time and energy trying to back fill a story that shows 100 million customers with your totally creative way to drive revenue (that deep down you know is nonsense). Instead, focus on these four clear objectives and frame your business plan around this. First, build a great founding and operating team. Second, build an amazing product that delivers what it says on the box with early customer feedback to prove it.  Simply, make your customers happy. Third, set your sights to break-even and not a day beyond. Finally, ensure you are building a scalable business model and product from day one. If you achieve these objectives you will be in a great position to build a profitable growth business.  Remember, it will take one customer at a time to determine your success.

Investment funds like Dave McClure’s 500startups get it. The reality is that a successful exits for most ambitious and innovative companies will come in seven or eight digits and not the ten we find in $1,000,000,000. I assure you, if your product is so big and so groundbreaking, then you are not knocking on doors for investment. It will be other way around. Since no VCs are knocking on your door, don’t waste another minute of your time reaching for the moon. Instead, build your product and prove your customers want it. Do everything in your power to delight them with brilliant design and engineering. Change your customer’s world and the rest will follow. If you do that, you will find the right investors with a realistic world view. You probably won’t change the world, but like the great Steve Jobs said, try to make a dent in it.  Good luck, I am pulling for you.

For the latest Silicon Valley posts please follow me on Twitter here

3 Marketing Lessons Asia Can Learn from Silicon Valley

I have been very lucky to have lived and worked in Silicon Valley, New York, London, Dubai, Mumbai, Singapore, and Hong Kong. The further East I traveled from Silicon Valley, the more traditional the companies and marketing I was exposed to. Startups are innovative by definition. You don’t challenge existing competition and traditional industries without doing something different. But what really impresses me about startups, particularly in Silicon Valley, is their marketing resourcefulness. After all, if you don’t rapidly figure out ways to attract customers and retain them, there is no business. Entrepreneurs quickly learn that great technology does not grow a business, customers do.

The startup is in an almost impossible situation because it is under constant pressure to grow revenues with as little investment as possible. Doing more with less becomes second nature. It’s simple math, without highly efficient marketing ROI (return on investment) it is game over…the end of the road…the nail in the coffin (you get my point).

Most of us are simply too comfortable as marketers. Admit it, if it were your own money you were spending you would probably do a few things differently. The larger our organization, the more complacency and lack of accountability typically exist. We do stupid things such as waste money behind the cloak of building “brand awareness” (which is a fancy term for flushing money down the toilet because it can’t be measured). We opt for larger marketing teams instead of individual accountability. Simply put, we can afford to fail. Here are some lessons we can take from Silicon Valley that I hope will make you a sharper, more nimble, and results oriented marketer.

Optimize Everything in Real Time

The concept of optimization is perhaps the area that I see larger organizations fail to execute more than any other. There are a number of best practices from Silicon Valley that any organization can adopt quickly. As a digital marketer, you are managing a pipeline. You are likely responsible for the customer’s journey from prospect to engaged user. I promise you that this pipeline is full of holes and opportunities to do things better.  Startups understand that optimization is not a goal but a neverending journey of improvement. Silicon Valley companies have to measure, learn, and adapt in real time. Most large companies simply do not and continue to do post mortems only after it is too late and the money is spent. If you still track your marketing in an Excel spreadsheet you can do better!

So how do you become a real-time marketer who eats, breathes, and sleeps optimization? With amazing tools! Here are some of my favorite tools that you will find in many Silicon Valley startups because they are cheap, easy, fast, and accurate. MixPanel and KissMetrics for funnel optimization. Optimizely and Visual Website Optimizer for website and campaign A/B testing. Loop 11 and Usabilla for customer usability testing. Snap Engage and Olark for customer feedback & chat. Mailchimp, SendGrid, and Retargeter for email list delivery optimization. Hootsuite and Sprout Social for social media management. Wistia and Vidyard for business video optimization and analytics. Geckoboard and Ducksboard for real-time reporting dashboards.

Don’t feel intimidated. Simply map your customer’s journey from prospect to active user and test and apply only the tools that truly help you engage, convert, and retain customers better than you can today. We used a free online tool called Gliffy to map our customer journey. Remember, it’s a journey without a finish line. If you are still not convinced, just do the simple math and look at what a 10 percent improvement in your click-through rate, conversion rate, or retention rate will do for your company’s revenues and bottom line.

Think Like a CEO

A CEO measures success not by advertising awards or vanity metrics in Google Analytics but by profits. Profits, after all, are (or should be) the ultimate measure of success of any commercial operation. CEOs think in terms of ROI. Can I generate more income over time from the investments I make today versus the cost? As marketers, we love vanity metrics like site visits or page views. The CEO understands these are signals but far from a measurement of success. Silicon Valley CEOs are often the CEO, CTO, CMO, CFO, and COO of their business until they are able to prove growth. You will see venture capitalists shudder at the thought of hiring a VP of Marketing until they can see proof people actually want the product the startup is selling. So with limited time and money, these CEOs are incredibly resourceful. Not only will you see them hustle to generate sales from inbound marketing, but they are always thinking about returns and not simply “signals.” As a marketer, you manage one of the largest variable costs of your business. The sooner you can show your CEO real financial impact and not signals, then the more she is likely to throw more budget in your direction.

Fail Fast

“Fail fast” is a term coined in Silicon Valley. It means that companies need to determine if there is a product market fit as quickly as possible. If not, don’t continue to drain money and resources. Simply accept it as a failure and either adjust or change direction all together. I think we can apply this same thinking to marketing. In this day and age you can track virtually all of your marketing efforts. It should not take you long to figure out if your creative, value proposition, or user experience is broken. There is no excuse not to pull the plug and try again. I see so many people let poorly performing marketing drag on far too long when the data has clearly demonstrated failure. I have said it before, but I have told my own marketing team that I expect 70 percent of their experiments to fail but I do also expect them to spot the 30 percent that are working and to invest more to scale them up fast. Failure is not an easy pill to swallow (especially in Asia) but it is a necessity to achieve success. Learn, adapt, and implement. Like the Silicon Valley startup you must fail fast and change course to survive and thrive.

Silicon Valley is a small stretch form of land on either side of Highway 101 from San Francisco to San Jose. Asia is slightly bigger. It’s not the size of the dog in the fight, but the size of the fight in the dog. And Silicon Valley has more fight in it than anywhere on the planet. We have a lot to learn.

For the latest Silicon Valley posts please follow me on Twitter here.

Simplicity is the product of great design. It removes friction and gives us what we want, when we want it.  Complexity is the product of bureaucracy, complacency or a lack of creativity (or all of the above).

Starting a new company has been a liberating experience. The goal of simplicity for our customers and operations drives everything I do. The product design for our customers, our technology architecture, our internal processes and our office….all designed to be simple and usable. 

How many examples of Hong Kong companies can you point to that make your life easier? By and large, these companies are infected with complexity. The customer does not come first, the bureaucracy comes first. The bureaucracy feeds bad design and that leaves us all unhappy. 

The answer is simple. Simplify.