I have decided to start posting all my small business content over at www.singlefounder.com. The site is dedicated to all those that want to start a business on their own and are tierd of hearing people tell you that you can't do it.
I almost switched my blog to WordPress today, I even imported all the data and started modifying content, but at the end of the day it just did not work out.
I think it came down to the fact that I would be spending too much time configuring the tool and it would not do everything I wanted.
Now don't get me wrong, I really like WordPress, but I figure if I am going to have to code things it may as well be in my own stuff.
Business is really just a matter of solving problems. I think people in Silicon Valley solve problems in a certain way for certain people and people in Columbus, Ohio solve problems a certain way for certain people. The usual assumption is they are solving the same "startup" problem, but in reality they are not.
The people in Silicon Valley solve problems for venture capitalist and technologist, who think they are solving problems for customers and potential customers.
The people in Columbus solve problems for customers.
This might sound like I am saying that the people in Silicon Valley are out of touch, but this is not really the case. To solve problems for potential customers you can't look at market research, you can't go with the tried and true because they are making a guess on the future.
So I would tend to agree that startups in Columbus are a little more grounded in the here and now and are not willing to take risk on what "might be" but a business can thrive either way, it just matters who funds you.
If you are in Silicon Valley you get angel or venture capitalist money to fund your "what if". If you are in Columbus you bootstrap.
So, does it matter?
I think the bootstrapping (Columbus) way takes more discipline, strategy, and patience. You have to stay focused on your product and the money you can spend towards your startup is constrained by those funds.
There should be a good book or two out there, how to grow a business with nothing, or how to bootstrap your way to success, or something along those lines. Or if you are from Columbus, you might just have graduated or attended the best university around, The Ohio State University, so that should give you all the discipline, strategy and patience you'll ever need.
I was browsing my site yesterday from an undisclosed corporate location and I noticed something. No AdSense and no Analytics scripts were being loaded.
This is because the corporate proxies are blocking certain Google related sites. What does this mean? Well it means 2 things.
- I can't make money on my Google Ads for people browsing at work (corporate) through Google.
- I can't even tell if these people are visiting my site because the analytics scripts are also blocked.
So, I think I need to visit my server logs and estimate how often this is happening then possibly create a work-around either by downloading a copy of the script to my own server, or doing some type of server side caching of the data. I will update my blog when I find a solution.
You have heard about conversion rates for your website, but there's more to it than that.
I was talking to a friend of mine today and we were chatting about sales, and conversion rates when it dawned on me that just about everything you do in business is related to your sales funnel, or more aptly your customer funnel.
One one end you have the world, the other a paying customer. The steps in between look something like this.
- The world
- The target market
- The prospect
- The lead
- The potential customer
- The paying customer
Just about everything you read about business talks about improving your conversion rate through one or more of these groups of people.
So whether you are on eBay seller, a barber, or a real-estate developer you work with the funnel in some way.
People often tell you that you need to define a target market? Why? Because marketing or selling to the world is more difficult than a target market, so they tell you to start there, but it's the wrong place, you actually need to start with the world and then figure out how to improve your ratio to the next step in the funnel, your target market. There are books on this called, how to define your target market, but as long as you know the "big picture" and realize that the target market is not where you start, then you are starting to understand my point.
There are marketing books, SEO (search engine optimization) strategies, sales books, usability guides, statistical tools like Google Analytics all saying the same thing differently and often in a confusing way, that being, if you plug holes in your funnel, you will make a lot of money.
So, don't write a business plan, write a funnel filling and leak stopping plan.
Back in the late 90's when I co-founded a startup called CyberMech, one of the things that surprised us was the size of the deals we could get. We were starting off with $500 websites called the "intro site" then before we knew it we were selling $5,000 sites, then going for $50,000.
At some point during the course we asked ourselves, "What's different now that we are looking at deals for $50,000 and the days when we were scraping for $500 sites?" We could not really answer the question, maybe it was confidence, but mostly we think it was just attitude.
Before going in we were approaching customers with only $500 to spend, mostly by cold calling, then we started looking at "elephants" to hunt, companies with five-thousand, ten-thousand, or more… We were doing the same work, we worked with the same technology, it was just attitude and the sense of been there, done that.
At some point when you start a business, whether in Columbus, Ohio or someplace else you will be picking a price for your product or service, remember to check your attitude.
I did an experimental search on the accuracy of Google Trends between "Paris Hilton" and "Java". Google Trends Page.
Java in RED, and Paris Hilton in BLUE.
According to Yahoo! Paris HIlton was the most search on phrase over the past few years, yet somehow Java managed to beat her consistently since 2004. So use Google Trends at your own risk.
I have had a few weeks to think more about "how to launch a web site" and I realized what Wil was doing. He was describing how to plug holes in your conversion funnel.
- promotion -> top of funnel
- cool kids –> register
- fill the room –> trial
- keep conversation going –> sales
- remind people how cool you are –> reduce unsubscribe rate
Which I have heard before just not like this. So Will was not saying anything new, he was saying that you have a sales/conversion funnel and you need to plug holes in the funnel all the time and keep improving.
I don't think think this requires a full time person, but it requires careful measurement, and attention most of which can be automated and put into a process.
Google Analytics can help you define your Goals and your Funnel, you can import CSV versions of this data for any interval you wish, so just set up a process for how you will evaluate your conversion funnel and create adjustments to this equation until which time you maximize profit.
I have often wondered how inventors/entrepreneurs stumble on a new product or new service that takes off. It's always been a similar question to what comes first, the chicken or the egg? But now I think I am coming close to what it is, it's a little of both, or a lot of luck.
For those without luck, let me explain how I think you come to the right product or service. You start with observation. You need to observe what potential customers find painful in their day-to-day activities. How do you do this? Well coming from a corporate I had a different type of pain I was observing, it was in-efficiency, pains of bureaucracy, pains of ineptitude, but it was missing something. People in corporate just accepted these things and worse off, it was difficult to found a business around these pains because people had little recourse to pay for solutions to these pains.
So as I build technology after technology solving perceived problems I have finally arrived at what works and of course, what comes first, the market.
The market comes first because at it's core, the market represents the customer, the customer with a problem that some product or service will minimize or eliminate. It comes with a deep understanding of the customer and their ability to use your product or service to solve it, so you can't just create a technology to solve a problem, you must understand your customer well enough to convince them to use your product to solve their problem, you must know them well enough so it's easy, and most importantly, you must know your customer well enough to pay for it.
So how do you define a market? There are two ways I think:
- The Hardest Way) You do research, either by calling customers, consulting with them, working with them to understand them, doing research to find out what other potential customers have similar problems your product or service can solve.
- The Hard Way) You copy someone with customers, and serve those customers better, then after working with those customers find something unique you can do that they do not that differentiates you from your competitor.
But before you decide on a market to go after I think you need to take one final factor into account, addressability. The ability for you to go after this market, convince them your product or service will work, and finally, to get them to pay for your product or service is HUGE. B2B markets, Consumer Markets, Network Markets, they all have cost. It will cost X dollars per sale assuming that time=money. Then you have the typical supply funnel. Market Size, Reachable Market, Prospects, Qualified Prospects, Sales.
I attended the Entrepreneurial Signature Program, to day at TechColumbus not really knowing what to expect.
Basically the program went like this:
- Talk about TechColumbus, goals, mission, what we can do for you…
- Have some sessions that talk about funding and how to get it…
I think this information is valuable however I was looking for more problem solving information. For example: I have a problem with my market validation, how can TechColumbus help with this?
One thing they did talk about which was good was the Tech Genesis fund, which are grants from the Sate of Ohio designed to test the market of a product or service, however I find that the people involved are the same ones preaching "Founding Team" (CEO, CTO, CFO, Marketing, Sales, etc.) They do not talk about problem X, Y and Z, then this is how those problems are solved…
All is not negative though, I think I did take away something. I need to shift how I think about some of the stuff I have invented, I need to think of it as a technology, not a product or service. The stuff I have invented, robots, snagr, appgin, they are all cool technologies, but until I have customers, they are not products or services.