Month: May 2013

Advice From Rock Start Investors

Wsj tech cafe for blogLast night, my son, Matt, and I attended the Wall Street Journal Tech Café event at Think Coffee in New York and learned about how tech investors think from three of the greatest.  Here are a few nuggets on how to approach and pitch to investors…

Steve Case , uber entrepreneur, investor and philanthropist, advised that you should do a little research before you approach an investor and get to know his sweet spots.  Every investor has his own criteria, so for example, Steve invests in later stage start ups and generally in big ideas or platforms, rarely in products or features.    His main criteria for investing in a company:  people, passion and persistence.

Jay Samit , a top gun in LA, says, know your stuff! Too many entrepreneurs come to the pitch unprepared and unable to handle Jay (the typical investor in my experience), who gets impatient after about the second slide and shifts from presentation mode to Q&A. He also emphasized people—surround yourself with great people (a typical theme on this blog).  He hit home for me by stating that those closest to you should invest, endorse and support you on your startup; if they don’t, there is something wrong with the picture.

Brian Cohen, the mayor of Angels, says “make the Angel fall in love with you”.  Angels aren’t in it for the big win as much as to save the world, and their investment is much more emotional. Also, get them to say NO. Nobody likes to say no, so force the question and get a no (or yes) answer.  Finally, be coachable.  All startup investors offer much more than money; you need to be able to take their criticism and coaching.

Thank you, Brian, Jay and Steve and thanks to the Wall Street Journal—always my favorite news venue—for hosting this insightful event.  It came at the perfect time for me, as I have just lined up my initial friends and family capital and am looking for angels to help me launch Café Learn (more on that later….)

Build Your Market… One Customer At A Time

I was a little futuristic back in 1990:  I started O’Donnell Learn because I was convinced that technology would change education and that customers (including students, teachers and administrators) had to be front and center during this change. Well…I have had more than 20 years to perfect the practice of market development–working with customers to shape a solution AND build a cadre of loyal early adopters.

It’s a lot of fun.  You build panels of users who provide insights and feedback as you develop and launch a product or offering.  As a result, you end up with a solution to real, specific market needs and problems.   You create messaging that resonates.  AND you avoid costly mistakes.

Here are a few tips for you as you create the next generation of innovation…

  1. Get feedback on your concept before you build the product.  Make sure you get feedback from at least 20 potential customers right from the get go.  You will save yourself a lot of time and money!!  We use interviews to get in-depth feedback and focus groups  for brainstorming (virtual are less expensive).
  2. Listen don’t talk.  It’s really better for you to get someone else to ask the questions for you.  Most entrepreneurs can’t resist trying to sell when you really need to listen hard and tease out your customers’ objections.
  3. Don’t get discouraged.  The more innovative your offering, the more confusion and push back you can expect.  Teachers particularly are skeptical about change.  We have launched dozens of successful products.  The real game changers require more than one conversation. In the first one, your customer reacts to the idea:  what is exciting, and what are the red flags or obstacles.  Then, in a second conversation, you can get feedback on the actual product.  This two-step process yields a very high rate of customers!!
  4. Use the right tools.  Most people automatically turn to a survey.  Surveys are important—they help you figure out what to focus on first and how to spend your resources.  But, they are step two.  You have to start with qualitative research (interviews or focus groups).  By probing and listening, you shift your focus from what you think is important to what is important to your customer.
  5. Get your customers to shape your message. A few years back, we saved a customer a lot of $$.  They were praising their modular product—and this word had negative connotations for most customers.  By touting a flexible design rather than modular, they turned negativity into excitement!

Market development doesn’t have to cost a lot of money—but it requires some time investment.  You want to be sure that you recruit the right customers into your panel—decision makers at target accounts, not just any person who wants to talk!  Relying too heavily on social networking groups/sites tends to get you a panel full of talkers that aren’t necessarily decision-makers.

Think about your target audience and do some research to gather contact information.  Typically, you will need to reach out to about 10 target customers for every qualified panel participant. But, I guarantee that if you do it systematically, market development will save you from making costly mistakes and it will yield your first pipeline of customers.

Is Education Ripe For Innovation?

I am flying home from the SIIA Ed Tech Industry Summit in San Francisco.  During the past few days, there was a lot of dialog about the future, and, both campus and industry thought leaders asserted that the time is now for innovation.  Some of the themes that I think are very relevant for entrepreneurs…

Institutions are experimenting, especially in higher ed.  While most of the startups at the conference have K12 solutions, several panels showed that experimentation is more fertile in higher ed, which lacks the bureaucratic constraints that stifle experimentation in K12. CIOs Joe Moreau from DeAnza-Foothills CC and Eric Hawley from Utah State showed that the culture and process for experimentation on college campuses is increasing.  Joe commented that piloting is the way to go:  “it gives us permission to fail and allows us to date before we get married.”  Eric had the best quote of the conference:  “What’s hot is simple.  What’s not is complex.”

Focus on the teachable moment.  Many of the panelists believe that the upcoming innovations are going to be all about making teachers rock stars and using technology to increase student/teacher interaction.  Diana Rhoten from Amplify noted that the first wave of ed tech innovations were about faster and cheaper, and the next wave will be focused on teaching and learning.

MOOCs are escalating innovation. Every conference in education has a buzz around MOOCs (massive online open courses).  Howard Lurie of EdX asserted that the open sourcing of the EdX platform (slated for June) provides institutions with a sandbox for innovation.  The platform captures every keystroke and provides a window into the learning process.

Shifting roles prompt innovation. The roles of the publishers, technology players, libraries and bookstores are all shifting as the advent of new models means that lines between content, technology and services are blurred.   Gerry Hanley, at Cal State, commented that the role of the publishers is shifting as MOOCs and other open education resources become prevalent. Similarly, Mike Diaz from Proquest, the library database company, described the shifting role of librarians to be more involved in helping faculty and students access course content. Others described new learning management solutions that are cloud-based and open-source and become essentially plugs for the many apps that schools are choosing to adopt.

Clearly, the time for education innovation is NOW.  And, it’s up to us entrepreneurs and innovators to take advantage of the climate and imagine the future.

Keep It Simple

I recently had an entrepreneurial wake-up call!!  We conducted a focus group with academic leaders and they didn’t quite “get” our business.  After some probing, it turns out that they saw a need for the business, but the message was just too complicated. We were trying to do too much, and to be too many things for too many people.  What a valuable reminder to Keep It Simple.  Luckily, we learned this lesson before we spent a penny on designing the product!

David Pogue, New York Times tech columnist, and my former neighbor, did a great and timeless TED Talk, Simplicity Sells, several years back:

Too often, in the market development work that O’Donnell Learn does for companies, this lesson comes very late—after a product is built, and a product that has too many bells and whistles for its average user.

Many companies expand into new verticals before they have really nailed the first one.  We worked with a company a few years back that had a strong line of business education products.  Before they built market share in that area, they had expanded into science, social science and allied health.  Guess what?  They never got enough bench strength in any one area to solidify their business model.

Business model! That is what keeping it simple is all about.  Use your simplicity to experiment with your business model.  Figure how you are going to make money and how this will be a long-term sustainable business.  Build some market share—and then you can get complicated.  Or can you? David Pogue would say no, “simplicity sells”.

In the next few posts, we are going to explore the notion of building a business.