Entrepreneurship – Getting Past Yourself

Though I would not call myself a serial entrepreneur, I have often encountered the question: “How do you get started on a new business or project?” As a refresher, I have started 3+ businesses in the past in different industries (Finance, Fashion, Marketing) and rebranded, turned around, or built 3 non-profits as well (in the areas of adults with disabilities and female empowerment).

It is one of the most frequent questions I get at events, and honestly, you just starting DOING things and see what sticks. Debating over the best course of action is great, once you have developed say 2 – 3 options, and thought of the worse case scenario of what could happen if sh*t hit the fan, you just need to get out and start trying things.

I recently watched a Tony Robbins video clip where he reiterates the same concept, you just have to come up with and try as many approaches as possible until you find one that succeeds. Easier said than done because most people stop when they fail ONCE; they are so easily deterred I’m amazed that anything gets done in this world.

So here are my key steps to “getting started”:

  1. Note down all the brilliant ideas you have in a notebook
  2. Go talk about it with a few of your closest friends and get their opinion
  3. Go talk about it with a few prospective clients or users of your product/service and see what they say
  4. Take this feedback and strategize on what can be improved, what’s the minimum viable product you can throw out to the market to get some in-market feedback.
  5. Make sure you have a “testing fund” cap. For me it’s somewhere around $2000. If I can’t make anything happen with that amount, or even test for operations and logistics, then at least you tried. Don’t dump money into an idea that’s not showing any action after you exhaust your testing fund. If you do get any positive signs, it might be worth your while to keep testing – the decision is up to you.
  6. Produce the minimum viable product, launch it and observe the market reaction.
  7. Make changes based on the feedback and keep doing more rollouts.
  8. Repeat until you are successful.

Most people stop at step 2 or 3, because of what their friends or prospects tell them. Keep in mind the point is for you to gather information to see HOW you can make your idea work. Most of the time the market doesn’t know what it needs, or how much they are willing to pay for it, until the option to purchase the item is available.

So just get out there and start doing. Only once you get the ball rolling can you experience momentum, so crucial to giving you the good vibes of success to fuel your passion forward. If you fail, well, it’s time to pull out your notebook and try out another idea.

I challenge you to test out all the possibilities you’ve been thinking of.

 

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The “Sold-Out” Strategy – It Works!

We learned in our marketing lessons to use a “skimming” pricing strategy (price high then reduce price as the product matures) to draw early adopters willing to pay high prices. This assumes as we observe the sales pattern we will adjust supply to meet demand at the optimized price, meaning we would be selling out at just the right amount, because we would get every customer willing to pay that specific price to purchase. Some new businesses are now marketing on the principle of “people always want something they can’t have”, and finding success through utilizing the “sold-out strategy” (aka. Leaving business inefficiencies unattended) 

When someone starts a new business, if demand is higher than supply and the product is sold out, usually they say it’s a “good problem to have.” However, if there is a constant, shortage of product for prospective clients, it then points to inefficiencies in the business, where there is a lot of money left on the table. 
Case in point, a popular cake shop’s opening hours are 11-6PM, but runs out of cakes each day around 3PM. The usual, rational strategy would be for the business owner to adjust their production to ensure they have cakes to serve clients until 6:00PM, so every client walking in willing to pay for a slice of cake would be satisfied. Contrary to the rational option, since the cake shop is following the “sold out strategy”, the business owner continues at a lower level of production, so that each day customers arriving after 3PM are disappointed (at times vowing never to return). 

There are pros and cons to the “sold-out” strategy, with the pro being customers clamorig over each other to get there early to try this rumored cake in high demand, and the con being not enough return customers after they made the initial effort to try their first slice of cake, and more importantly, the opportunity cost of lost revenue. 

So would you use the “sold-out” strategy, which may potentially frustrate prospective customers, or adjust your strategize over time to ensure you don’t leave money on the table? 

Should I Stay Or Should I Go?

A sudden wash creativity some evenings ago had me pondering about store layout and design. We think of places and shops where the design intentionally initiates a quick turnaround of customers whilst others make the extra effort to keep the customer in store – the longer they stay, the more they spend. 

SHOULD I STAY? 

 
The perfect example of this would be IKEA. While there are emergency exit signs through the store, shall you dare to deviate from the planned route you are likely to stand confused and lost amongst the aisles. 

Therefore we trudge slowly along, following the yellow arrows, ooo-Ing and aaaahhhh-ing as we take in all the designed kitchen and bedroom showrooms, unconsciously picking up various items we “need”.

You always end up spending a slightly (or much more) unexpected amount, and this is where the design evidently assists in boosting sales. 

SHOULD I GO? 
  

I see this most often in restaurants – think Ramen. 

Usually ramen shops are designed to be small and cozy; the chairs aren’t intended for comfort, the spacing between tables isn’t intended for privacy – sometimes you find yourself sharing a communal table with several other people or groups. If you want to stay longer and have a conversation with friends, this isn’t exactly the ambiance you are looking for. 

Usually there are two factors at play here: pricing and operations. A ramen meal would be considered at the lower end of the meal cost spectrum, leading to an incentive for the shop owner to turn as many tables as possible – at low(er) prices, you are banking on making money by doing volume. 

At a “high-end” restaurant where you are paying $150 per person for a meal, you usually feel like you can stay and chat over a 5-course meal, a few glasses of wine, a decadent dessert and a cup of tea or espresso to complete your meal. 

So when you dream up your next business, think of how your strategic elements will affect your relationships with your customers – should they stay or should they go? 

Dare to Explore

Resting on a long weekend Monday for me means letting my mind explore.

A business idea has been brewing in my mind for a few months now and so far I have prototyped it, did some initial interviews with vested parties (groups that would use the service) and gotten back some great questions, feedback and support. Of course there are opinions from the consumer end as well, and not all were approving.

Some comments:

  • This isn’t for me
  • This isn’t for the XYZ market
  • I could see value for this for ABC market, but not the mass market
  • How long will this last, the market won’t be hot forever

All these points are well taken, but here’s the positive spin on it.

  • Great – it means it’s not for you but for somebody else.
  • Great – not for XYZ market means it could be for ABC market – a product/service should have its lovers and haters or else you would be sadly, nothing.
  • Great – as long as there is a way to make the service profitable for a niche market, it’s still a win.
  • Sure – but when is it hot forever? I can apply this comment to every single business out there but hey, we’re all still working every day right? Might as well work to earn all that we can so that when the market isn’t hot anymore we can feel safe from all that we have saved, earned from NOW until then.

So – if you have an idea, at least explore it. Talk to parties about it, do your research, and commit to a small investment that would tell you whether the market would respond to your proposed product/service. A small pilot would do, but it still takes time and effort. The point is, don’t stop at the first negative comments that are thrown at you, get the service out there and see what the market says to a tangible product/service.

If they hate it – move on. If they love it – keep at it. You might have hit something big!

Beware Overpromising

We have all heard it a millions times. Seriously.

One of the rules of marketing is to underpromise and overdeliver, and it is always amazing to me how some salespeople overpromise in order to close the deal or inflate the value of their “network”.

I have an acquaintance who would inflate details and overpromise what they can deliver in order to close deals or give the perception that they are more connected than they are.

For example, an angel investor in their words might become a venture capital investor. $10 million in capital might become $100 million with their framing.

This is setting yourself up for no repeat business, because you will always underdeliver, leaving customers disappointed and wanting to look elsewhere. It is people like these who give marketers and salespeople a bad name of overpromising.

If you are currently utilizing this practice, I urge you to rethink whether this will bring you sustainable wealth and revenue streams in the long-term; my speculation is that it will not.

Loyalty Programs – Does Yours Actually Retain Customers? 

Look. We all know it’s tough to attract new customers, and it’s even harder to keep them. With the large amount of new brands popping up each year in every industry imaginable, it’s more important than ever to maintain customer relations.

  
Who does a great job to keep wallets open? Hudson’s Bay. 

  • Daily contact through email notifying customers of the latest deals. 
  • Daily deals with steep discounts like 50%-70% off an exclusive item. 
  • Direct mailers with exclusive deals for VIPs.
  • Money spent in store collects points that can be used as cash to purchase additional items in store. Just keep shopping!

What happens when you take these steps? 

  1. Customers receive news regarding in-store promotions and exclusive deals through multiple channels – email, direct mail, social media. 
  2. The deals are real. We’ve all been there, the fake sales. A large SALE sign decorates the storefront, but when you go in it’s the last rack at the very back that’s on sale and each item is only $5 off the original price of $90. At Hudson’s Bay you actually get the 50% off and the additional 30%. Crazy but real.
  3. What? The money I spent here earns 4x points and I can redeem them to use as cash in store towards that new Kate Spade bag I really want? Fantastic. 

Who could use some improvment? Sephora. 

  
Though Sephora also follows the key points of keeping multiple communication channels open, offering gifts/free samples in exchange for points collected, they could use some help in event planning. 

As part of the Sephora customer loyalty program they offer exclusive events to what they call VIB (Beauty Insider) and VIB Rouge members.

Though VIB members spend over $1000 per year in stores and online, exclusive events tailored to these VIB Rouge members often hit “capacity”. So if these VIPs are slow to RSVP they actually don’t get to enjoy the benefits as promised. 

As experienced event planners, our suggestion to Sephora to improve their customer loyalty program would be to plan ahead. If you know there are 500 VIB Rouge members in your immediate store area, prepare for that amount of attendance and more. Setting an arbitrary capacity and turning away your VIPs for events that are supposed to be exclusive to them is bad business. It shows the customer how it’s more important to make it convenient for your staff to organize the event than to ensure all your loyal customers stay happy. 

The problem is resolved quite easily. Too many members in the area? Host the event for 2 days to ensure they can all attend. Not enough VIPs to justify the cost of extending your store hours for both days and paying extra for additional staff? First, let me call BS on that because your customers will come to spend way more money than the cost of having your staff there for extended hours. Second, you can just start the event earlier or end later to accommodate more attendees. 

This is just laziness on the brand’s part. So what happens when every year they accumulate more VIPs? More VIPs will be turned away from these exclusive events that were meant as a benefit for them. How counter intuitive. It’s a problem they should address if they want to keep growing their customers’ spending with their stores. 

So ask yourself. Is your customer loyalty program actually keeping customers? Does every component of the program show the customer that they are valued? Do you deliver on your stated membership benefits? 

What Happens When Your Company is Fueled by Sheer Laziness

A lot of times as your company grows, it’s impossible to micro manage and see what happens at every branch of your company, and the bigger the company gets, the majority of them move slower.

Even more unfortunate is the layer of staff who try to get by without doing much; even worse is when that energy and experience is passed on and delivered to your end customers.

Case in point: I am traveling back from Brussels to Vancouver via Montreal. The connection time is tight with a one-hour window. During this one hour connection time we have to pick up our checked luggage, clear customs, and go through security again in Montreal to board our domestic flight.

Concerned that we would not catch our connection, I asked the counter staff at Air Canada (it is a miracle they are still operating as they seem to be in the business of coordinating delays rather than flights) whether they could assist by switching us to the next flight out of Montreal to Vancouver as I am 99% sure we won’t make the connection. At this point our flight leaving Brussels had already been delayed by close to an hour.

My conversation with the staff:
“Will we be able to make the connection and if not can you switch us to the next flight?”
[converses with each other in French]
“We think you may have to hurry but it should be OK.”
“Ummm..Ok.”

Needless to say as our plane touched down in Montreal, it was the same time our flight to Vancouver departed. We then had to make an extra visit to the counter to get arranged on the next flight which meant an additional 4 hours of lost productivity.

Luckily for me I am able to work somewhat remotely, but how about for others who actually depend on airlines to be “on time”? In an industry plagued by delays and cancellations, it has become the norm for travellers to expect the worse.

The staff in Brussels could have done something for us instead of acting out of sheer laziness and passing the responsibility onto their colleagues in Montreal.

Little details such as this translates into poor customer experience and the culture of procrastination permeates throughout the organization. So far it’s evident Air Canada suffers from this “disease”.

The takeaway is to manage your company’s culture as it grows to avoid the slow-moving, lazy tendency of a corporate giant. I will close with a quote on the topic:

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