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Friday, August 17, 2018

Lesson #297: Top 10 Warning Signs Your Startup Will Fail

Posted By: George Deeb - 8/17/2018

Being an entrepreneur is no simple task, given 90% of startups collapse. But, based on the learnings from these past flame-outs, there ...




Being an entrepreneur is no simple task, given 90% of startups collapse. But, based on the learnings from these past flame-outs, there are some leading indicators that can identify whether your startup is headed for failure. I collaborated with my colleague, Taylor Ryan, a five-time serial entrepreneur, author and expert digital marketer (currently the CMO at Valuer.ai) to come up with the following list of warning signs that you should look out for in assessing the health of your startup.

1. Lost Focus on Primary Goal

For some startups, their focus can divert to unimportant factors than the primary goal at hand. A successful startup learns to prioritize its efforts, and stay religiously focused on that end goal. Keeping the team firmly focused on the end goal can also be beneficial for the work environment as it will keep the team all rowing in the same desired direction. If you see a startup flailing in the wind of change, going in multiple directions based on the "flavor of the month", you know that business is in trouble.

2. Poor or Slow Execution

There are startups that begin with innovative concepts but cannot execute them properly. This is due to a number of reasons – lack of relevant resources, lack of motivation or poor  working habits for starters.  Firms that are properly tracking their progress with regard to a particular project will quickly see if they are falling behind and come up with ways to correct the problem before it becomes a material one. Those that are not executing well will suffer deficits in capital or timelines. There is also a problem with the speed in execution, with many startups not being able to push out products or services as fast as their competitors. Speed is critical, to staying ahead of your competitors as the first mover, and not being forced to play catch up..

3. Lack of Customer Engagement

A lack of customer engagement is something many early-stage startups face. There are a many possible scenarios in which customers might lose interest in a product or service.  Maybe the startup didn't properly research the market to ensure meaningful demand?  Maybe sales and marketing efforts are not the best strategy for that business?  If you don’t truly understand your customers pain points, they will never have a serious interest in your product or service. It is best to figure out why customers are not engaging, sooner than later, to try and resolve those product or marketing related issues to see if they are fixable, before deciding to cut your losses and close shop.

4. Poor Teamwork

Sometimes, perfectly capable and promising startups begin descending into failure because of differences among team members or lack of effective teamwork. This does not necessarily have anything to do with how well a person or a group of people can perform in the workplace.
It just means, at times, some people cannot work well together. It is a startup CEO's responsibility to know what is required to keep the team gelling and how to improve the team's performance in thinking and acting like one well-oiled machine. If ineffective teamwork goes undetected or unresolved for an extended period of time, the startup will struggle to recover.

5. High Employee Turnover Rate

If the employee turnover rate is high and recurring, it could be an indicator of a failing startup.
There could be a number of reasons why the turnover rate is high. For one, a startup’s culture plays a strong role. If employees are unsatisfied with the work environment, don't like the people they are working with or don't have confidence with their management, they will most likely be looking to leave.  So if you have a revolving door with your staff, something is wrong and needs to be fixed, as you can't scale a business on a wobbly foundation of talent.

6. Lack of Adaptability

Any startup that says it is immune to changes in the market is setting itself up for failure. External market forces ultimately dictate how your startup will fare against changing trends and competitors in the industry. If a startup doesn't truly understand or disregards what is happening outside of its own office, it is doomed to fail.  For a startup to truly reach success, it may have to pivot several times until it finds the right mix of product-market fit. If a startup does not pivot fast enough, that is usually a sign the end is near.

7. No New Product Development

For a startup to stay relevant, it needs to constantly be reinventing itself. Your product development efforts are never done, as you should always be striving to improve from version 1, to version 2 to version 3 over time.  Because if you don't, you can rest assured your competitors will clearly copy whatever you are doing successfully today, and will be improving their business at your expense.

8. Unaware of Finances

Every good startup should always be aware of its financial situation.  But, you would be surprised how many entrepreneurs have no clue about their finances, and hence cannot easily predict they are about ready to slam into a brick wall. There needs to be financial reports, dashboards and KPI's that a startup studies closely each week to understand how much it is spending, earning and retaining vs. its goals.  You can't manage what you are not measuring, so make sure you get your key reporting metrics identified and tracked.

9. Creative Block or Stubborness

Oftentimes, a startup’s team gets hung up on a particular perspective or approach to an issue. When things are not going well, it is important to push the team to change their perspective and try something new and creative to solve the problem. Startups that are heading towards failure are often unsure of where they should be heading as a company, and lack the creative thinking skills that are required to ideate potential solutions. Or, they are simply inflexible and not willing to entertain a different approach.

10. Boredom

The team getting bored with what they are working on can surely be a startup killer. Early in the startup’s life, the team is motivated, as the venture is exciting to work on, and the team enjoys working towards the success of a startup. Hence, everyone works with dedication and puts in long hours.  But, the reality is, after the euphoria wears off, it is easy for the team to get bored with their work.  It could be due to their attention diverting elsewhere, lack of motivation, or monotony in the day-to-day grind of the workplace, especially if the business is not succeeding as planned. A good entrepreneur will figure out ways to keep its employees engaged and motivated at all times.


So, do a critical assessment of your business to make sure you are not about ready to drive off the cliff.  If any of the above resonates as happening with your business, it is time to put an immediate fix in place.  Thanks again Taylor for working with me with this post.  If any of you need help connecting your startup with logical corporate partners, Taylor and his Valuer.ai platform could be your solution.


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



Monday, August 6, 2018

Entrepreneurs Mellow & Mature With Age

Posted By: George Deeb - 8/06/2018

I've been an entrepreneur for most of my life. I started an odd-jobs business in high school, founded a collectible comic-book busin...



I've been an entrepreneur for most of my life. I started an odd-jobs business in high school, founded a collectible comic-book business in college and launched my first venture capital backed startup -- an adventure-travel company -- in my 20's. And my entrepreneurial endeavors continue today. I'm in my late 40s, running Red Rocket and managing our portfolio investments, looking for companies to buy and advising hundreds of early-stage businesses. Given this winding road of past experience, my approach to managing businesses today is very different than when I was younger. The experience I now bring to the table has materially mellowed me as a leader. But I didn't have that background or that perspective when I was younger.

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

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


Where to Find Expert Consultants for Your Business

Posted By: George Deeb - 8/06/2018

From time-to-time, you may need to find a consultant to help you with your business. Sometimes, those needs are high level, like setting ...


From time-to-time, you may need to find a consultant to help you with your business. Sometimes, those needs are high level, like setting strategies or marketing plans. Other times, those needs are more point solutions, like a pro in search engine optimization or product sourcing. Whatever your need may be, there is most likely a consultant out there that is immediately available to help you. The problem is finding them. This post will tell you how best to fill your consulting needs.

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

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


Thursday, August 2, 2018

Lesson #296: Copy Proven Ideas for Quick Success--A Fortnite Case Study

Posted By: George Deeb - 8/02/2018

The best ideas are not always the most original ideas.  As we have learned in my past post , copy-catting others' proven ideas, perh...



The best ideas are not always the most original ideas.  As we have learned in my past post, copy-catting others' proven ideas, perhaps in different markets or ways, may be the quickest path to success.  And, nothing illustrates this point better than Fortnite Battle Royale, the video game made by Epic Games, which my son introduced me to this year.  To me, Fortnite appears to have pulled a page right out of the The Hunger Games movie playbook, copy-catting it into a huge success.  Allow me to further explain.

THE HUNGER GAMES SUCCESS STORY

The Hunger Games was a top selling film from 2012, directed by Gary Ross and starring Jennifer Lawrence.  The movie was based on the best selling book by Suzanne Collins.  To date, more than 17.5 million copies of the book has been sold worldwide (grossing $169MM in book sales for this first of three books in the trilogy alone) and the hit movie has grossed another $752MM in sales worldwide on top of that.  I would say that was a pretty huge success for the author, the book publisher and the movie producer.

THE HUNGER GAMES PLOT

Here is The Hunger Games plot as copied from Amazon's book description:  "Could you survive on your own, in the wild, with everyone out to make sure you don't live to see the morning? In the ruins of a place once known as North America lies the nation of Panem, a shining Capitol surrounded by twelve outlying districts. The Capitol is harsh and cruel and keeps the districts in line by forcing them all to send one boy and one girl between the ages of twelve and eighteen to participate in the annual Hunger Games, a fight to the death on live TV."  Now keep this firmly imprinted in your memory, for what is to follow.

WHAT IS FORTNITE BATTLE ROYALE

Launched in 2017 (five years after The Hunger Games--about the amount of time it takes to develop of video game of this scale), Fortnite Battle Royale has become one of the highest grossing video games of all time, set to have over $2 billion in sales this year (yes, billion with a "b").  They sold over $300MM in the last month alone, suggesting it is now on a $3.6BN annual run rate!!  Here is the game description, as copied from their website: "The battle is building! Fortnite Battle Royale is the free 100-player PvP mode in Fortnite. One giant map. A battle bus. Fortnite building skills and destructible environments combined with intense PvP combat. The last one standing wins."  Sound familiar!!??  It is basically the same plot as The Hunger Games.

THE SIMILARITIES ARE BEYOND A DOUBT

In both The Hunger Games and Fortnite Battle Royale, a bunch of contestants are entered into a fight to the death with a last man (or woman) standing in both cases. The contest is set up in a way that the battle takes place within a fixed geographic space, that gets manipulated to be smaller over time, forcing the last remaining contestants to battle each other at some point.  Both drop the contestants into an unknown environment and make them race to find the closest and best weapons.  And, in both cases you have no visibility into where your competitors are coming from, so you can be unexpectedly attacked from behind at any time.

WHY COPY-CATTING CAN BE A GREAT STRATEGY FOR QUICK SUCCESS

There are many advantages of copy-catting.  First of all, it de-risks your venture based on the proven learnings and investments of others.  Why experiment with a new idea that has a 90% chance of failing, when you can double down on a proven 10x return winner.  Secondly, you may be able to take a great idea in a good market and make it a great idea in a huge market.  Look what happened in this case study--a $169MM book become a $752MM movie become a $3.6BN video game all with basically the same blueprint.  Let this be a lesson to the book and movie industries, perhaps the video game industry is where you can really create the most wealth (at least with products targeting teenagers).  In just a short period of time, using what I feel is a copy-catting strategy (that I doubt they will ever admit), the founder of Epic Games, Tim Sweeney, has just become the newest member of the billionaire club!!  Not so bad for a couple years worth of work, retooling someone else's playbook.  I am surprised The Hunger Games hasn't sued Fortnite for copyright infringement.

CLOSING THOUGHTS

So, for all you entrepreneurs out there, looking to become the next unicorn billionaire, your path to success and wealth does not need to be a unique one.  Look for proven ideas that you can repurpose into your own.  And, in the process, you will materially accelerate you product development curve and growth trajectory.  At the same time, if you are working on a great idea in one market, perhaps it will be a much bigger idea in a different market.  As an example, I bet Marvel is happy they transitioned from a low revenue comic book company to a huge revenue movie production juggernaut ultimately acquired by Disney for $4BN.  So, who is ready to help me start building my Revengers video game, a Fortnite-style fight to the death between Avengers-style superheroes of your choosing set in a Jurassic Park-style dinosaur setting!!  Sounds like three home runs in one, to me!!

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



Friday, July 20, 2018

Lesson #295: Top 5 Media Buys for First-Time Marketers

Posted By: George Deeb - 7/20/2018

Getting the word out about your startup business is always a challenge, but at least there are a handful of techniques you can focus on ...



Getting the word out about your startup business is always a challenge, but at least there are a handful of techniques you can focus on to jump start your early marketing efforts, all of which are available on a cost-effective basis.

1. PAID SEARCH (MORE SPECIFICALLY, GOOGLE ADWORDS)

Paid search is clearly an obvious choice.  When people are searching for your products or services on the search engines, you need to make sure they can find you.  Organic search from search engine optimization efforts are out of your control (although you should do your best to optimize your site for success there).  But, paid search is 100% in your control and can drive immediate traffic out of the gate.  Yes, there are other search engines beyond Google (e.g., Bing, Yahoo, Ask, AOL), but Google controls 65% of the search market and an even bigger percentage of the mobile market for search, given their Android platform powers over 80% of the mobile phones out there.  So, if you were going to focus on one place, Google is it.  Re-read this post for specific search engine marketing strategies to help get you started.

2. SOCIAL MEDIA (MORE SPECIFICALLY, FACEBOOK)

With over 80% of Americans having a Facebook social media account, it is the single largest media property with which to market to target customers, all in one place.  And, better yet, Facebook brings levels of customer targeting that have never before been easier or more cost-effective.  To give you a sense to how easy it is to drill down to your specific demographic, psychographic or other consumer interests, check out this great infographic of what targeting is possible on Facebook.  If you have the time to focus on LinkedIn, Twitter, Instagram, Pinterest or other social networks, you can add those in after Facebook.  The only exception would be if you are a B2B business, where LinkedIn may be a better place to start.

3. SHOPPING MARKETPLACES (MORE SPECIFICALLY, AMAZON)

If you are a product seller, there is no better place to get started than Amazon; more than 65% of all shopping searches start at Amazon (who has successfully wrestled that function away from Google over the last few years).  Not only can Amazon help you with marketing to their audience, but they can also help you with any warehousing or distribution needs for those products they sell for you.  There are other marketplaces like Walmart, Jet, eBay, Wanelo, Rakuten and Sears.  But, if you are trying to move the needle with a ton of volume, there is no better place to focus than Amazon.  That said, when you are setting up your Google Adwords campaign above, I would also turn on Google Shopping campaigns and distribute your product feed through their shopping search capabilities, as well.

4. RETARGETING (MORE SPECIFICALLY, CRITEO)

The above three categories are helping you find new customers, but there is nothing more effective than going after known past customers or prospects using retargeting techniques.  In terms of how it works, as a user visits your website, the retargeting technology drops a cookie on their computer, which follows them across the internet. Then, as ads are run on those third party sites (e.g., checking email on Yahoo, reading news on CNN, watching sports on ESPN), retargeting companies can push your ads to those exact same users.  This works particularly well using dynamically generated creatives that publish the exact same products the users were looking at on your website.  Especially, when you are targeting users that went all the way through the purchase process on your website, but abandoned their cart or checkout process.  Criteo is the biggest player in this space, claiming that can get your ads up on approximately 2,000,000 websites, including many of the big ones like Facebook.  Their reach is around 6x larger the next biggest player, AdRoll.  Google and Facebook also offer retargeting options of their own ad platforms, but the advantage of Criteo is their functioning as a one-stop shop for retargeting across the web, as Google can only get you on their network sites (about 25% of the reach of Criteo).  That said, the rates on Google and Facebook can be cheaper, without Criteo’s middleman fees included.  And, retargeting can be more expensive than the other options above, so start with those first.

5. LOOK-ALIKE AUDIENCES (EASILY FOUND IN FACEBOOK)

Once you have found known customers that have an affinity for your product or service, nothing is better than finding look-alikes to those customers, with which to focus your new customer marketing efforts.  For example, if you copy and paste your customer email list into Facebook’s advertising tools, they will recommend new prospective customers to market to that share similar attributes as your customers.  For example, let’s say you are selling beauty products, and Facebook can see that your customers’ emails match to 18-25 year old women that are fans of Style magazine and listen to Ariana Grande music, then Facebook can match to those exact lookalikes.  Very cool!


Anyway, there is a wide world of options to consider when setting your marketing strategies, campaigns and tactics.  But, if you are looking for a quick cheat sheet on how to start driving new customers in mass, using cost effective, pay for performance techniques, then these five options are the way to go.

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



Saturday, July 7, 2018

Sales Enablement Tools Are the Key to Making More Money

Posted By: George Deeb - 7/07/2018

Over the last several years, many technologies have been developed to help accelerate and automate the sales and marketing functions. Fi...



Over the last several years, many technologies have been developed to help accelerate and automate the sales and marketing functions. First, it was upper funnel tools that help drive customer awareness and consideration through marketing automation. Then came the middle and lower funnel tools that help drive customer evaluation and purchase through sales enablement tools, which I will talk about in this post. These sales enablement tools can make a material difference in helping you drive revenue faster, consistently across your entire sales team.

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

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


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