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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.

Thursday, July 16, 2015

How to Provide Multiple "Wins" Throughout the Customer Lifecycle

Posted By: George Deeb - 7/16/2015

If loyal, long-term customers are your goal, you need to romance them right from the st...

If loyal, long-term customers are your goal, you need to romance them right from the start, and continue to wow them with unexpected wins along the full customer lifecycle. At the end of the day, the earlier you understand that the focus is less about you and your business or success, and more about your customer and his or her business or success, the sooner you are on the way to scalable, long-term growth.

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

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

Wednesday, July 15, 2015

[NEWS] George Deeb Named a Top Tech Leader by Chicago Tribune

Posted By: George Deeb - 7/15/2015

Today, Red Rocket's George Deeb was added to the Chicago Tribune's list of top Chicag...

Today, Red Rocket's George Deeb was added to the Chicago Tribune's list of top Chicago area tech leaders, called The Blue Network.  We are honored to be included in such a prestigious and well-respected list of people helping to fuel Chicago's tech ecosystem.  

Be sure to check out the full list on recent honorees here.

For future post, please follow us on Twitter at: @RedRocketVC

Friday, July 10, 2015

[SLIDESHARE] Chicago's Exploding Startup Ecosystem

Posted By: George Deeb - 7/10/2015

I have an upcoming speaking engagement talking about Chicago's exploding startup ecosystem. ...

I have an upcoming speaking engagement talking about Chicago's exploding startup ecosystem.  I put the below presentation together for that event.  I thought it would be useful to anyone else interested in learning more about what is going on in Chicago's tech scene.

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

Lesson #211: The Importance of First Impressions--A Red Rocket Case Study

Posted By: George Deeb - 7/10/2015

As many of you know, I recently  redesigned the Red Rocket Blog  a couple months ago.  The origi...

As many of you know, I recently redesigned the Red Rocket Blog a couple months ago.  The original blog was designed in 2011 and it had a very dated feel, as you can see in the image above.  But, I didn't really care.  I was too busy doing consulting work.  And, I thought good content will be read regardless of the page design.  Especially, since in my mind, it was simply a blog to post some good articles, not a flashy e-commerce site, and it didn't look all that bad.  I thought as long as my main website looked nice, the blog didn't really matter.

The primary goal of the redesign was simply to give the blog a 2015 feel, to make it feel fresh. Nothing more than that.  Yes, I made the social "follow us" icons easier to find to grow followers. And, made the social sharing buttons on articles easier to find, to stimulate more viral sharing of the content.  And, added a contact us box on the blog itself, in addition to the main site.  But, most importantly, I added a bunch of visual images and made the various content categories easier to search,  rather than the simple "Index" link we had in the left column, which linked into largely text only articles.

I was looking at my Google Analytics data yesterday, just to check-in on the site traffic, and I almost fell out of my chair.  Yes, there is a little more monthly traffic coming to the site post the redesign, which is what I would have guessed.  BUT, I did not guess the following.  The bounce rate of the site (users that land on site and immediately exit) has fallen from 67% to 9%; the average articles read per visit doubled from 2 to 4; and the time spent on the site has also doubled.  All in the snap of a finger, like turning on a light switch on the exact same date of the redesign launching.  And, hopefully, over time, more engaged users, will result in more enlightened readers, more engaged social sharers and more client prospects.

That means the first-time blog visitors are now more impressed with what they first see, a new looking website with clearer navigation, rich with imagery.  And, hence, are more willing to "give it a try".  So, now instead of appealing to 33% of the site visitors, the blog is now appealing to 91% of the site visitors. What a difference a day makes . . . literally!

The first mistake I made was thinking "it is just a blog" (like an afterthought) for the Red Rocket Ventures site, which I had freshly updated and thought was enough.  When the reality is, most all of our site visitors' first experience with the Red Rocket brand was the blog, not the main website, given all the search engine traffic that comes into the content pages of the blog.  The "afterthought" was actually anything but, it was the "main enchilada".

The second mistake I made was thinking of the Red Rocket experience in a vacuum, what does the blog mean to us.  The problem is, there are hundreds of websites where you can get good startup tips, as I have written about in the past.  If I put on the hat of the first-time user, why waste time on this boring website I know nothing about, when I can get similar information from more flashy-looking sites like or scores of others that are in the business of publishing professional content for this target market.

The argument that my content was more instructional and actionable may have been the case, hence the rapid growth of the blog over the years.  But, I have now learned, the hard way, how much traffic and potential client prospects I have left on the table.  To date, the blog has been read over 460,000 times by around 120,000 unique individuals, which means I left around 70,000 users disappointed by the original blog design and flushed those potential client touchpoints down the drain.  Ugh!  Glad it is fixed now.

So, the key lessons here: (1) first impressions matter, get it right; (2) give your blog the same design scrutiny you give your main website (as odds are that rich content is what Google is going to most grab onto for searchers); (3) don't study site traffic data alone, peel back the layers of the onion to see where opportunities for improvement may lie; and, as always, (4) give your users a visually appealing and easy-to-use experience, to get them initially engaged.  All common sense in hindsight, and exactly what I have written about in my past "how-to" lessons.  I guess I needed to do a better job of practicing what I preached.

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

Lesson #210: Need a Salesperson? Recruit Three!

Posted By: George Deeb - 7/10/2015

A startup cannot survive without revenues, and more importantly, revenue growth that will impre...

A startup cannot survive without revenues, and more importantly, revenue growth that will impress investors.  And, oftentimes, this success rests squarely on the shoulders of your sales team.  Therefore, your sales team will make or break your success.  Hiring your sales team is arguably the single most important hires you are going to make.  You have to get it right!!

The problem is, more often than not, it is so easy to get it wrong.  Especially, as a first time entrepreneur that does not have past experience in hiring salespeople, knowing the right questions to ask, that are specifically relevant for your business.  I have previously written about the 1,024 Types of Salespeople that are out there, so I won’t repeat those same details in this post.  But, it critical, you are perfectly clear on what you are looking for, before you start recruiting in the first place.

And, to layer on additional pitfalls here, salespeople are salespeople at the end of the day.  It is in their core DNA to tell you whatever they think you need to hear in order to close the deal.  Regardless of whether or not it is really what they are comfortable with.  As examples, not all salespeople thrive in an unstructured and chaotic startup environment.  And, not all salespeople are willing to roll up their sleeves and do the dirty work themselves, without a support team helping them, especially if they have a history of managing other salespeople.

The only way to truly know if you are making a well-educated offer is to ask the right questions as it relates to the above issues, and speak to references.  Preferably ones you dig up on your own, and not the ones they provide during the interview process.  The other key thing is learning how to “read between the lines” on their resumes.  Even if they have all the right past companies or positions, if you see a lot of job hops in a salesperson’s resume, that is typically a very ominous indicator of future success (or lack thereof, in this case).  So, tread cautiously in those situations.  This post I wrote on How to Screen Salesperson Candidates may help you here.

But, the sad reality is, as well as you screen candidates and ask all the right questions, you are only going to get it right one in every three attempts, based on average historical experience.  That means you only have a 33% chance for success in hitting your sales targets with every hire!!  That is why I suggest testing three salespeople during a 90-day probationary period first, before deciding on which one you want to move forward with long term.  The problem with that strategy is, not many sales candidates are willing to play that game.  So, sometimes you just have to take the leap and hope you got it right.  And, structure their compensation package in manner that is heavily weighted towards pay-for-performance (e.g., heavy on commissions, light on salary, until they are proven).

The core issues at hand here are the following: (1) startups often have limited capital, and the worst thing you can do is waste it on underperforming sales staff members; and (2) the longer a bad salesperson is in place, the further out the timeline will be before material revenues will be had (especially in long sales cycle companies that can be up to two years in the making).  The combination of these two elements, can often be the nail in the coffin for most startups:  wasted expense plus lost revenues being the ultimate recipe for disaster.

But, hey, if building a startup was easy, anyone would do it.  So, saddle up, and get ready for one heck of a ride in building your revenues.  Hopefully, this post will help you avoid known pitfalls, and increases your odds for sales success.

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


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