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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.

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.

Get The Right People On The Bus

I’m a fan of Jim Collins, who has spent years studying and writing about great companies; his most recent book is Great By Choice. One of his enduring principles is to get the right people on the bus, which he describes in this video:

As an entrepreneur, you are always cash-strapped, so sometimes you think it’s better to focus on hiring lower cost people. I can tell from hard-earned experience that it is critical that you surround yourself by GREAT people, and then figure out how you can afford them. A few things I have learned:

  1. Don’t hire clones. One of you is enough. You need to surround yourself with people who think differently and who are going to challenge your thinking. It is also really important to foster diversity in your company—age, race, gender, etc.
  2. Hire people who want a challenge and aren’t afraid to roll up their sleeves and dig in. In a startup, every person has to pull more than their weight. You don’t have extra support people, so you need to hire people who are willing to wash the coffee mugs, then build a bullet-proof budget, and then meet with clients. Wow, that is a rare person. It takes resilience and a zest for trying new things.
  3. If someone isn’t working out, part quickly, and be fair about it.
  4. Beware of the pigpen effect. Over the years, I have hired a number of people with this effect: they spend an awful lot of time working (routing around in the muck), dust is swirling, but nothing ever seems to get done. Sometimes, they are hard to spot, because they are generally hard workers—so remember point number 3 above.
  5. Pedigree is less important than flexibility in a startup. I have seen a lot of entrepreneurs hire people with very impressive big corporate resumes who didn’t know the first thing about how to get things done in an unstructured startup environment. So, probe carefully to gauge someone’s ability to be flexible and agile.
  6. Hire people who are smarter and better than you are. You will never go wrong by hiring people who are GREAT in areas that you are weak! One of the first things an entrepreneur learns is that nobody is competent at everything, so you need to figure out what you aren’t good at and hire people who will fill in these gaps.

Finally, it’s important to have some fun in life. I like it best when some of the folks on my team are whacky, off-beat and just plain fun. Life is too short, and when the going gets tough, the tough get off the bus for an hour and have some fun.

Your Customer IS Your Business

There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.
Sam Walton

Bridge-to-Customer_iStock_000005355437XSmall[1]A business requires customers—not eyeballs or clicks, but people or organizations that are willing and able to pay for your offering. So, who is your customer? We recently advised a high school STEM (science, technology, engineering and math) company that is looking to expand its market share. I asked them: who is your customer? The answer: Superintendents.

Hmm… this needs to be narrowed down a lot more. In order to build a business, you need to be very targeted about who your customer is. First, is the superintendent really the decision-maker, or just an influencer? Who will drive that sale through for you and who is going to sign off on the payment? Secondly, you likely won’t have access to most superintendents.

A little startup will never have the bandwidth to target “superintendents”. You need to find a segment, a niche. That could be: private/parochial schools, districts with huge STEM initiatives, reform movements around STEM. You get the drift. Start with a group that you can find and identify, and get them to be customers—yes, paying customers. Then, you will have a business that you can scale and expand.

One other note, many startups try to expand too quickly, to be all things to all people. As I launch my new company, I am going to keep this in mind, and make sure that I get it right with that first group of customers before trying to expand out too aggressively.

Turning Your Cocktail Napkin Into A Business Plan

Yikes. I have been staring at napkin sketchmy computer for the past hour getting myself psyched up to begin writing my plan. Last night, when I drew my idea on a napkin for my friend, Jen, my idea was perfectly clear… I know that in order to get started on funding activities, I need to write the business plan. If you find this daunting, you are not alone.

Where do you start? Here are a few things that I have learned—having written dozens of plans over the years. First, to warm yourself up and get ready to write, jot down your story (free flow, top of mind):

  • Why are you doing this?
  • What problem are you trying to solve?
  • What is your business? This is where you turn that picture you drew on the napkin into a brief statement.
    Who is your customer? In education, this is usually a little complicated. Usually there are multiple layers of customer: your end user (students, teachers, parents); adopters (teachers, institutions). Also, what segment of customer are you targeting? There is a big difference between the elite universities and community colleges, between remedial education and graduate degree programs.
  • How will you make money? This is important! What is your revenue model? And what basis do you have for assuming your customer will buy what you are offering? It’s really helpful to look at competitors and comparable companies (which may not even be in your space) to help you figure this out.
  • Why you? What do you uniquely offer that would make someone want to invest in this business? That would make a customer want to purchase your offering?

This should get you ready to start writing. A few other tips:

  •  Start with the executive summary. Get the sketch down on paper and then fill in the details.
  •  You will likely need to do a lot of research to craft your story or strategy. That’s normal. Make sure you keep a log of what you learned in the research (including statistics and sources), as you will need it for the plan.
  • I like to start with outlines and then fill in the easy parts first, rather than trying to be linear. Also, worry about organization and editing later. Just get it down on paper.

There are a lot of places you can go for ideas about how to structure a business plan. The Small Business Association site, How to Write A Business Plan, is a good starting point. Two other good sources: Entrepreneur, Your Business Plan Guide, and Inc., Writing A Business Plan.

Top 8 Things I Learned The First Time Around

checklist[1]I have already done the entrepreneurial journey a few times and have advised or rode shotgun with dozens of other startups. So, I have seen some patterns and am going to be sure that I adhere to these tenets in the next go around….

  •  Your customer IS your business
  • Know who you are: stick to your vision and values
  • Get the right people on the bus
  • Build it and they will come…NOT
  • Cash is king, so bootstrap every step of the way
  • Set goals and measure them
  • Nourish your mind, body and spirit
  • Make time for relationships, pay it forward

In the upcoming weeks, we’ll be exploring each of these.  Meanwhile, if you are interested in the perspective of some entrepreneurs way more successful than me, here are two:
Seth Godin’s Top Ten Things Every Fast Company Entrepreneur Needs To Know, wisdom from the marketing guru, as reported in Fast Company

Top 12 Tips for Small Business Owners from Barbara Corcoran, the real estate mogul, featured on Shark Tank

Kids Need Structure…Me Too!

This TED Talk by Colin Powell is worth 15 minutes of your time. It’s about how kids need structure, and how structure is derived from setting expectations.

Lack of structure is such a big part of the college completion problem. So many students, of all ages and backgrounds, come to college unprepared to create their own structure and realistic expectations. Structure can be as simple as a study schedule; instead of hanging around playing video games every afternoon, hit the library. When you are stressed out juggling school, work and family, this is the time to be sure you have structure around sleeping and eating.

General Powell’s eloquent message also applies to me as an entrepreneur. I have found that you need to set aside time for critically important but not so urgent things like networking, thinking, or keeping up with the industry research. Part of structure is setting goals, and then systematically tracking the metrics for these goals. It is so easy to let these things slip; then, before you know it, you are pedaling as fast as you can to catch up. If you pay attention to structure, you will chart the path to success.

Save The World Or Make Money?

Save The World Or Make Money?

A wise friend of mine asked me a question last month: do you want to save the world or do you want to make money? My initial reaction was, both! But, I took some time to ponder this question, and I realized that I want and need to make money. We have two sons in college, so money is important.

There is a new type of corporation in 11 states (not my state yet) called a B Corp, or Benefits Corporation, that was created for entrepreneurs that want to use the power of business to solve social and environmental problems (see the Certified B Corp website). So, maybe soon there will be a way for me to set up the company to both make money and change the world.

Every entrepreneur needs to have a vision and here is my vision: I want to create an outrageously successful company, one that is as cool as Google, one that every kid getting out of school wants to work for. I want cool meeting spaces and a foozball table and a meditation room. And, I envision a diverse team of really smart people who can continually help to evolve the way students learn. To make this vision come true, I had better focus on making money.

That said, making money cannot be my only driver. If you are going to be successful as an entrepreneur, you need to solve a problem. As my friend and advisor, Bruce, always tells me, “create a painkiller, not an aspirin.” You need to solve a real problem, and do it in a way that is authentic, and is differentiated from all the other organizations that are trying to solve this problem. Keep in mind, if you are solving a real problem, there are a lot of other smart people trying to solve that problem. So, cut through the clutter and make sure you are unique and provide value.

This Girl Is On Fire

I love Alicia Keyes! She is smart, beautiful and passionate. Her song, Girl on Fire, is my mantra.

To be a successful entrepreneur, you need to be on fire! You need passion. It is the only thing that will sustain you during those many weeks and months ahead of you as you conceive, launch, build and grow your business.

Being on fire, to me, is one part emotion and one part energy. A few years ago, an executive coach told me, “you are too emotional”. I thought long and hard about that comment, and ultimately disagreed wholeheartedly (no pun intended). When it comes to being Dilbert, maybe emotion is a bad thing. But, when it comes to being an entrepreneur, you need emotion to fuel the fire. Steve Jobs expressed it beautifully in his 2005 Stanford Commencement Address (full transcript in the Huffington Post):

“You’ve got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it.”

The other key ingredient in entrepreneurial fire is energy. I learned long ago, while moderating hundreds of focus groups and strategy sessions, that energy can light up a room and infuse a conversation. If you channel your energy productively, and consciously, you can literally make things happen. More on that later…