Wednesday, October 29, 2008

Now is the time to look at what you do and do it better

Making cut backs, conserving cash, re-working the burn rate to extend your survival time is all very prudent but, any company that intentionally pulls itself from the radar screen of their customers will be absent from customer decisions and referrals. By doing so, you create opportunity for your competitors to fill the void. There are always customers making decisions, so make sure that you’re part of the equation and process wherever they go for product information. Keeping customers engaged You have to think about keeping your customers engaged, even if their purchasing decisions are in a holding pattern temporarily. Those you engage will share it with peers. Such an ongoing process eventually strengthens and becomes a cycle. How do you do this? There has never been as good a time as in today’s Web 2.0 environment offering rich and inexpensive marketing tools. (We didn't have this in the last economic downturn.) Social Media, Interactive/Web, SEO, Blogs and PR. Let your customers be your advocacy group and give them the tools to contribute to the community building process. Help them translate your value proposition for different markets as well as enticing and compelling their peers to join them. Allow social media to become your guerrilla marketing and thereby conserve your cash. Remember, household brands took millions of dollars to build, such as Ebay, YouTube and Amazon and multitudes of enthusiasts to achieve global presence. You have to start engaging those who will get it, provide the spark, create global citizens and watch it grow. It takes focus and strategy to build presence over time. In the meantime, you might learn much from valuable customer feedback and your competitive advantages or deficiencies. Use this time to fix the deficiencies and stay on the radar screen so that when the economy starts picking up, which inevitably it will, you are already on that train!

Thursday, October 23, 2008

Start-ups: Spend every $ as if it were your last!

It’s time to get real so how can you maximize your budget? Some lay-offs will be inevitable as you strive to cut costs as raising funds becomes harder, but marketing is key to survival even though it's usually the first to go. Don’t throw the baby out with the bath water The typical reaction in a downturn is to fire the VP of Marketing, shut down the department and pass the function over to product development. This is a big mistake and will cost you more in the long run to rebuild your image, brand, website traffic and, to re-hire experience. While making cuts in expenditures is prudent, eliminating a key member of the management team is a short term fix that leaves you vulnerable to the competition. You’ll also risk missing the trends and the opportunities when the economy does pick up. Keeping customers in a crummy economy Second, keeping your key marketing strategist is important so you can stay in the game. Cutting budgets doesn’t mean that you stop all marketing communications and campaigns. • Think about incentives, promotions - from discounts to freebies to keep your existing customers. Offer discounted 1 year memberships to lock them in, coupons to entice them back to make the next purchase. (This doesn’t actually cost money to execute.) Get creative! It costs more to acquire a new customer than retain one. • Maintain regular communications with customers via P.R. (an inexpensive marketing tool); there’s always lots to talk about and customer stories cost little to produce and free to distribute via YouTube. • Use the Internet for creating Blogs on your company websites and tap into social networks. • Research and monitor the market; know your competitors so when things pick up, your are ready. And finally, if you really cannot retain a key marketing professional full-time, you can still stay in the game by hiring part-time, interim or a consultant. That puts you in a position to run once the market picks up. Help your company to survive and help the economy to recover faster. Got a question or comment, post here or e-mail me at businessissuestoday@gmail.com

Monday, October 20, 2008

There is a Silver Lining

Fear, volatility, doom and gloom news of the stock market and the economy is everywhere, but there are signs of business as usual and even hope. A new commercial bank has just been launched (yes a new bank), in New York called The Heritage Bank. It has raised over $60 Million despite the last few weeks of financial turmoil. David Bagatelle, President and CEO, said earlier on Fox Business News: “we are a bank, not a bond fund.” Heritage Bank will focus on making loans to small and medium sized businesses, providing a “personalized level of service – back to what banks should do; make loans, hold loans and develop relationships with its customers,” said Bagatelle. Its competitiveness will stem from expediency and quality of service working with CEO’s to understand their business. Isn’t this what traditional banking was always meant to be? Are we not returning to tried and tested business models with discipline and standards? After the dot com boom and bust a similar approach of back to basics and sensible business models also followed. History has an uncanny way of repeating itself. Got a question on your business, post it here or email me at: businessissuestoday@gmail.com

Wednesday, October 15, 2008

“Yotify” – The New Concierge Style Search Engine for Consumers in the Web 2.0 World

A useful tool from a new San Francisco start-up takes search engine alerts to the next level. Most of us are aware of the Google news search alert feature, but what if you are searching day after day for an apartment or a specific item or piece of furniture? Yotify takes away the tediousness of the search allowing you to define the search and set alerts, daily or even hourly in the form of a SCOUT. In fact, you can keep a track of all your searches by creating an account. You can even share it with friends within your social network through Facebook or LinkedIn. Just when you thought things were slowing down, innovation continues and technology will enable this economy to rebound given time. Got a question, post it here or email me at: businessissuestoday@gmail.com

Monday, October 13, 2008

Start-ups Looking for Funding: What should you do?

All we keep hearing about is “a credit crunch” and a "global financial crisis". But what does this exactly mean on a day-to-day basis for a start-up in the tech world? It means that CEO’s are going to have stretch that funding as far they can and try to reach positive cash flow without relying on that second round of funding, as economic recovery will be long. I see so many start-ups that are out of touch with reality. It’s time to re-examine that business model and make sure your business plan is realistic. Here are some key points to consider: - Manage what you can control, such as spending and debt - immediately; - Focus on quality and know your customer; - Series B & C rounds will be small (so cuts are a must); - Valuations will drop - ($15 M raise @ $100 M post valuation is gone according to Sequoia Capital); - Mergers & acquisitions will decrease and profitable companies will be in favor; - IPO’s – don’t count on that exit for some time to come! Investor criteria is going to be tougher so here’s the checklist of must haves: 1. Superior/Must have product 2. Understand market demand 3. Understand consumer’s ability to pay and expenditure constraints 4. Do your competitive analysis and product positioning 5. Established revenue model is a requirement 6. Need for profitability sooner Next Blog: we’ll look at operational and marketing issues. Got a question? Blog away or email businessissuestoday@gmail.com

Friday, October 10, 2008

What does the Wall Street meltdown mean for technology start-ups?

The technology start-up sector has weathered many a storm even though it’s a fairly young sector in the big picture. Not too long ago we had the dot com bust and then the 9/11 meltdown and we wondered what would become of the Internet after the hype vaporized. The world did not come to an end. It was the bursting of a bubble, “irrational exuberance” as Alan Greenspan once said and several years later, yet another bubble has caused today’s meltdown. Once again, it will not be the end of technology and innovation. Since the last Wall Street meltdown of 2000-2001, technology and innovation continued quietly, the seeds were sown and great companies emerged by the middle of the decade. Take Google for example; in 2000 – 2001 when the dot com bubble was deflating, Google was in its infancy and Facebook was not even around, nor was Linkedin or Myspace. If you mentioned a social network, no one would have known what you were talking about! Let’s go back even further to the 1980’s when Apple burst onto the stage in 1984. Apple was in its incubation in the late 1970’s when there was stagflation in the economy. What does this mean in terms of raising cash? Start-ups were not really in the pool for lines of credit anyway so the current credit crunch isn’t likely to impact directly. Angels and VC’s will continue to invest, after all, where will they get growth for their cash and it won’t sit around forever. What we can expect is a tightening up of the investment criteria. The next 6 months will be hard no doubt so be prudent and conserve. Investment will come but at a dearer price tag and it will be slower; consider it like a half off sale. The U.S. has historically been extraordinary at incubating technology companies and right now the foreign investor is also looking for a place to put their money. Continued technological innovation will be the key to turn this economy around. The Internet has shown us that great ideas can scale and become big business very quickly. Yes these are hard times, but America has and will survive. Comments/Questions about your business concerns? Blog away!

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