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Friday, August 28, 2015

Sell Stories, Not Products

Posted By: George Deeb - 8/28/2015

Most early-stage sales teams lead with their products.  They are typically so excited about thei...



Most early-stage sales teams lead with their products.  They are typically so excited about their new products, that they get bogged down in selling the minutia of their product’s features and functionality.  They think that is what their clients will care about, and that is what is going to drive a sale.  A common rookie mistake.  As clients don’t really care about you or your products (at this preliminary stage), they care about themselves, and how you are going to help them to solve their problems.

The best sales teams are masters in story telling.  They artistically layout a big picture problem in the industry, that the client is dealing with, and slowly rope them in with their elegant solution to this problem.  It is not until several meetings in does the salesperson even talk about their products.  They only detail them once the client has taken the bait, and they need to set the hook.

Read the rest of this post in Forbes, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb


Friday, August 14, 2015

Lesson #213: The Birth of Crowdfunding Agencies

Posted By: George Deeb - 8/14/2015

I have written on the rapid growth of crowdfunding as a financing vehicle for startups .  What...



I have written on the rapid growth of crowdfunding as a financing vehicle for startups.  What I didn't realize, until recently, is that there is a a growing base of agencies that are serving startups that are trying to attract capital through crowdfunding, to help them break out from the crowd of competing companies seeking funds.

As best as I have been able to research, in this up and coming field, some of the leading players in this space include agencies like Fundzinger, Crowdfund Mafia and Agency 2.0.  These agencies are developing an expertise on how to best build and market your crowdfunding pages in a way that will stand out with investors from the clutter of other startups trying to raise monies via the major crowdfunding platforms, like Kickstarter and Indiegogo.

I haven't personally engaged any of these agencies, to be able to speak to their first hand success or not. But, I did recently reach out to one of these agencies to learn more about their business and approach, and I came away impressed with new learnings that I wanted to share with you.

Services Provided.  Launching a crowdfunding campaign is the equivalent effort of launching the startup business itself.  It requires a lot of planning.  The better the page design, the better the product, the better the investor incentives, the better marketing of the page, the better it feels a community is developing around the campaign, the higher odds the campaign will take off.  So, these agencies assist in all of these areas (e.g., page design, video creation, social media buys, community management).

Choose Wisely Between Kickstarter & Indiegogo.  Many agencies prefer to work with Indiegogo, as you can actually speak with their team for support.  Another major difference was the fact Indiegogo allows a partially funded campaign to collect whatever funds are raised, and Kickstarter requires you to get to 100% of your funding goal before any money can close.  That said, that can be a detractor to investors who prefer to only invest, if they are part of a round that allows you to fully hit your fundraising goal (funding your full business need).

First Mover Advantage, Or Not.  Being a first mover in your space can be a major advantage, as you will be showing the crowdfunding investors something new that they have never seen before.  That said, I did recently see a second mover in the space, actually outperform the first mover, since they were able to see what was previously launched and unfunded, improve upon those shortfallings in their product and pitch, and successfully raised funds from there.  At the end of the day, the most exciting products with the most buzz win.

The Timeline.  They suggest you plan well ahead of needing funds.  Assume 6-10 weeks to get ready to launch a successful campaign, depending on the amount of work the agencies need to do to get ready for launch (e.g., setup pages, videos, social campaigns).  Then you will know at the end of the 30-45 day suggested maximum campaign window whether your efforts were successful or not.

Seed Your Campaign With Early Investors Day One.  For best success, your crowdfunding campaign needs to be prefunded to 10% (within the first couple days of launch).  Since nobody wants to be the first money in prepare to have some friends lined up to be first investors in to kickoff the campaign.

Make Sure Campaign Pacing Well Week One.  In addition, they are looking for 30% of campaign goal in place by end of one week.   If you can get to that 30% target within a week, there is a high odds you will get to your funding target by the end of the 30-45 day campaign.

Success Rates.  The agencies suggest the overall crowdfunding industry average success rate is a 30% of companies actually hit their full campaign goal.  And, that the agency can enable you to do much better with their marketing and selective screening of startups, growing the success rate to 50% (although they do not guarantee success).  So, if this is true, the cost of the agency, could be well worth it to increase in the success rate odds.  The flipside is: if your campaign fails with only 50% chance of success, you are out those monies paid to the agency that could have gone into funding your other startup costs.

Be Prepared for Hidden Agency Costs Not Advertised.  Read the fine print.  There a lots of hidden charges, that takes something that looks like a $5K agency price (for PR support and one week of Facebook ads) and turns it into a $20K price (e.g., adding in video creation, page design, additional Facebook budget for remaining 3-4 weeks), and that doesn't even pick up the cost of a human resource (yours or theirs) that will be needed to handle community/social management during the campaign (yes, you will need a person doing this role, in addition to managing your main social community pages for your business).

So, if you have the budgets to afford their services, engaging a crowdfunding agency could be a good way to go, to help you improve your odds of success from 30% to 50%.  Especially since the agency will do most of the heavy lifting required to manage the campaign setup and marketing efforts, so you can stay focused on running your business.

For future posts, please follow me on Twitter at: @georgedeeb.



Wednesday, August 12, 2015

Are Millennials Wreaking Havoc on Exployers? Or Vice Versa?

Posted By: George Deeb - 8/12/2015

“Help! The inmates are running the asylum!” may be the cry these days running through the heads ...



“Help! The inmates are running the asylum!” may be the cry these days running through the heads of many business owners who have multi-generational employees. This is to say that owners are struggling with the rapid rise of this younger segment of the workforce, and the way these employees refuse to behave the way their predecessors did -- a scenario creating a wave of chaos in human resources departments. Let me explain further.

Read the rest of this post in Entrepreneur, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.


Friday, August 7, 2015

When Picking a Startup to Join, Focus on the Company (Not the Role)

Posted By: George Deeb - 8/07/2015

Startups are really risky.  And, if you are looking to join one, know going in you have a 9 in 1...



Startups are really risky.  And, if you are looking to join one, know going in you have a 9 in 10 chance that company won’t be in business within a couple years from now, and you’ll have to be looking for a new job again.  Venture capitalists can get around these odds, by investing in ten companies, hoping one hits it big, with a portfolio driven mindset.  Unfortunately, you as an employee, only get one “bite at the apple” at a time, since you cannot concurrently work for ten companies.

Read the rest of this post in Forbes, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.


Can't Attract VC Money? Buy a Business With Private Equity.

Posted By: George Deeb - 8/07/2015

Venture capital investors are looking for different things than private equity investors. Ventur...



Venture capital investors are looking for different things than private equity investors. Venture capital firms are typically growth-oriented, early-stage investors looking for these proof-of-concept points before cutting a check. Private equity firms are typically cash-flow oriented, later-stage investors, looking to invest in companies in excess of $10 million  in revenues and $3 million in EBITDA in size. So, as an early-stage startup, why on earth should you consider reaching out to private equity investors, if you are not making progress with venture capital investors? Because you are going to pitch them with an entirely different growth strategy altogether.

Read the rest of this post in The Next Web, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.


Wednesday, July 22, 2015

Lesson #212: How to Roll-Out Your Local Business, Market-By-Market

Posted By: George Deeb - 7/22/2015

So you’ve tasted some success in your local market? Congratulations, but don’t bust out the cham...



So you’ve tasted some success in your local market? Congratulations, but don’t bust out the champagne just yet. It’s when you decide to expand your geographic footprint that the fun really begins. Developing a profitable presence in a second (and third, and fourth…) market is easier said than done. A new location can mean new customers, but also new competitors and new challenges.

To assist me with this post, I enlisted the help of Marc Halpin, the CEO of Kapow Events, an online marketplace of corporate event experiences reshaping how companies entertain their clients, prospects and employees. Kapow is one of my portfolio companies via my FireStarter Fund investment.   Kapow started their business in Chicago in 2012, and in just three years, has now successfully expanded into 16 other major U.S. markets.  So, Marc is one of the pros on this topic.

Marc suggests there are five things to keep in mind as you expand your business to a new city:

1. Prioritize Your Desired Markets

My general rule-of-thumb on rolling into new markets is to have your list of target markets prioritized, and work it from the top down.  For example, for many startups, that means following the largest population centers (e.g., launch in New York, before Los Angeles, before Chicago). That will hopefully ensure you are a first mover in the largest markets.  The flipside to that would be, if you were a second mover, and wanted to lock-up markets the first mover has not yet entered, you could decide to avoid competiting in some of the larger markets, and become the first mover in some of the smaller markets.

2.  Evaluate the Competition

It is one thing to edge out the competition in your backyard, and it is another thing altogether to plant your flag in new cities. As you evaluate competitors in a potential new market, assess where the gaps are in their offering. Then determine whether those gaps line up with what your business does well. Find your seam and exploit it. But, be careful about over-reacting to the competition. A strong focus on developing your product, your people and your sales process will pay dividends in the long run.

3.  Bring Customers With You

Expanding to a new geography shouldn’t mean starting over. From a strategic standpoint, step one is determining which customers you can bring with you to the new market.  Focus your initial marketing efforts at your current client or customer base, making sure they are aware of your presence in the new location. Make it easy for them to refer you to their local colleagues, and don’t be afraid to ask for introductions to their partners in the region.

4.  Establish local relationships

Identify company leaders who are willing and able to provide on-the-ground support as you expand into new markets. But, equally importantly, seek out local talent. Your local sales force should be intimately familiar with the area and have the relationships to show for it.  Place an emphasis on networking out of the gates. Be visible. Map out your short list of people and companies you need to be on a first name basis with, and make it happen.

5. Document your processes 

There’s no one-size-fits-all to a new market launch. But, if you plan to scale by aggressively opening new locations, it is critical to document your processes: legal, finance, HR, sales and marketing included.  Establish a proven blueprint, but don’t be afraid to adapt it and improve it as you go. Conduct a post-launch review to assess what areas were up to par and what could be improved the next time around.  Wash, rinse and repeat.

Thanks again to Marc Halpin at Kapow Events for helping me research this topic.  And, be sure to check out their website for more information about their business, and the markets they decided to enter first.

For future posts, please follow me on Twitter at: @georgedeeb.




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