Friday, September 6, 2019

Lesson #317: The Best Employees Have These '31 Flavors'

Posted By: George Deeb - 9/06/2019

Having good employees will make or break a company’s success.  I have previously written about how best to read resumes and screen emplo...



Having good employees will make or break a company’s success.  I have previously written about how best to read resumes and screen employee candidates, but that is before they are actually working for the company and you get a chance to see their “true colors” when they are not “on show” during the interview process.  This post is designed to help you identify the best traits that most successful employees share, so you can “double down” on those best employees and “weed out” the rest, as nothing can take down a company faster than a bunch of toxic employees that don’t beat to the company’s drum.  The best employees have these “31 Flavors” blended into one.

The Basics for the Job

1. The Right Skillsets—Obviously, they have to have the basic knowledge and experience in how to do their job.  You can’t put a square peg in a round hole.

2. Smart Intelligence—The right combination of “book smarts” and “street smarts” should yield good business instincts to help manage the business.

3. Good Attitude and Passion—Someone that is passionate about their job will do much better than someone that is simply looking for a paycheck.  And you want someone whose enthusiasm as infectious to others.

4. A Good Communicator—Clear communications is at the core of every company.  You need someone that can clearly articulate their needs and listens well to others.

5. Detail Oriented and Organized—In most businesses, there are many moving pieces.  Whether you are managing a project or working your sales leads, the better organized a person is, the better odds they won’t let any of the needed details slip through the cracks.

6. Confident, But Knows Their Limits—Someone that feels confident in their own abilities is a lot better than someone that is unsure of themselves, provided they are not over-confident to the point of “driving right off the cliff”.

A Good Fit for the Company

7. Fits the Culture—Every business has unique drivers of the company culture.  You want employees that embrace the company culture and works well with others.

8. A Team Player—As the old adage goes, there is no “I” in “TEAM”.  Lone wolves that only listen to themselves and prefer to work alone won’t have a long life inside a company, where good team dynamics are critical and must thrive.

9. Hungry & Driven—I love employees that have something to prove, or are working for some grander cause outside of the office.  Nothing beats a good “fire in the belly”.

10. Loyal & Dedicated—Good employees know to put the needs of the business, before the needs of themselves.  They are loyal to the business in good times and in bad . . . especially the bad.

11. Can Neutralize Toxic Peers—Good employees do not engage with the “fire stoking” behaviors of toxic employees.  And, better yet, they know how to neutralize them, not allowing them an open forum for public criticisms.

12. Never Publicly Complains—If you have something on your mind that is bothering you, take it up with your manager.  Don’t take it up in the next all-company meeting, bringing everyone else down with you.

A Good Fit for the Manager

13. Highly Dependable—When a good employee is given a task, you can trust they are actually going to get the job done, on time and on budget.

14. A Strong Work Ethic—Good employees are hard-workers at their core.  They don’t mess around surfing the web while at work, or watching the clock, waiting for the hours to pass by.

15. Action-Oriented, Problem Solving Leader—The best employees are the ones that can identify problems within their domain, and actually fix them.  They don’t need to ask for permission or ask for help to improve the business.

16. Takes Direction Well—Good employees respect the chain of command inside a company, and follows the direction of their managers, who are presumably more experienced in their departments.

17. Autonomous & Self Motivated—Good employees don’t need their hands held.  They can work well on their own with limited supervision by their managers.

18. Focused—Good employees will stay focused on the goal at hand and are not easily distracted by the “flavors of the month”.

19. Accountable—Good employees take responsibilities for their own actions, even when something goes wrong.  It is not about trying to get an employee in trouble, it is more important how they learn from those mistakes and take the business forward.

20. Not Afraid to Speak Up—If something is on your mind, say it.  The worst thing that can happen is if you bury hard feelings or strong desires deep down inside, where no one knows about them, and can solve for them.

A Good Fit as a Person

21. Likable Personality—Nobody wants to work with mean people or hermits.  They want to be surrounded by nice people that are easy to work with.

22. Honest With Integrity—There is no room for dishonest people or criminal behavior in your business.  Period!  If you can’t trust your employees, they need to go.

23. Flexible & Adaptable—Most businesses, especially startups, are pivoting to take advantage of new market opportunities.  Your employees need to be nimble in their thinking to be able to “go with the flow”.

24. Humble—Good employees never put themselves first or brag about their successes.  There is fine line between confidence and cockiness.

25. Optimistic—Always look for employees that can see the glass as “half full” and not “half empty”.  Good employees see the opportunity to improve a situation and not harp on what they are missing, with a positive mental attitude.

26. Creative—Business solutions are not always easily identified. Employees that can creatively think “out of the box” are the ones that often have the biggest impact on moving a business forward in new directions.

A Good Fit Emotionally

27. Okay With Delayed Gratification—This generation has become too driven by immediate gratification, without actually putting the hard work in that is required to achieve that “pay day”.   It is less about, “what can you do for me today”, and more about “what can you do for me next year” in building a long-term and meaningful pay day for all involved.  Patience, young Jedi!!

28. Can Tolerate Conflict—Things don’t always go smoothly in business, and often times, personalities can clash.  Conflict can often be good, as it often means people are passionate about the issue.  But, the best employees can easily endure and solve for conflicts inside the business.

29. Doesn’t Need Ego Stroked—Good employees do their jobs without the constant need for being complimented.  Good managers will praise their employees for jobs well done, but don’t expect to have your ego stroked for every action you do.  Good work is normally well rewarded in the long run.

30. Never Settles for the Status Quo—When things are going smoothly, it is really easy to sit back and do nothing, or simply keep running in place on the same “hamster wheel”.  Good employees are always looking for improvements, tinkering and fiddling with the business with each iteration of their role.

31. Willing to Take Smart Bets—Yes, businesses need good “lead-off hitters” that are capable of getting on base with “singles”.  But, sometimes, you need a good “clean-up hitter” to “swing for the fences”, taking calculated gambles with a high odds of paying off for the company.



Phew, what a list.  The odds of finding all “31 Flavors” in one person is the equivalent of trying to find a needle in a haystack.  But, if you can find as many of these traits as you can in your employees, the company’s performance and morale will certainly benefit from it.  And, when necessary, you must prune out the “bad apples”, before they spoil the whole “bushel”.  After writing this post, I suddenly have a  hankering for some Baskin & Robbins ice cream!!  ;-)

Thursday, August 15, 2019

[VIDEO] George Deeb Discusses Entrepreneurial Mindsets for Success on ASBN

Posted By: George Deeb - 8/15/2019

I was recently interviewed by the  Atlanta Small Business Network  (ASBN), an online "television network" serving the small bu...



I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about how to choose the right entrepreneurial mindset to maximize the odds of success.  This includes comparing the differences between "driven to win" vs. "fear of failure".  I thought this video turned out great, and I wanted to share it with all of you, to help you assess your startup's "psychology".  I hope you like!!


The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above, or feel free to watch it on the ASBN website.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.


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

Thursday, August 8, 2019

How to Pitch Your Business Investment Case

Posted By: George Deeb - 8/08/2019

Chief Financial Officers are often the gatekeepers to a company’s cash coffers. And, as you can imagine, they have a lot of people tuggi...



Chief Financial Officers are often the gatekeepers to a company’s cash coffers. And, as you can imagine, they have a lot of people tugging on their sleeves looking for investments into various projects. Perhaps the CEO wants to make a big strategic acquisition, the CMO needs to scale up sales and marketing efforts or the head of product wants to launch a new business line. The ways capital can be invested are limitless, and the asks are endless, so you better make sure your pitch breaks through the clutter.  Below are examples of the best ways to pitch for internal funds in several common scenarios.

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

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

Thursday, July 18, 2019

Lesson #316: Decision Making Only as Good as Quality of Data Studied

Posted By: George Deeb - 7/18/2019

Over the years, I have become a “data hound”, looking for every morsel of wisdom I can get about my business, to help make smarter decis...



Over the years, I have become a “data hound”, looking for every morsel of wisdom I can get about my business, to help make smarter decisions.  The good news here:  data is king.  You can’t effectively manage your business with it.  But, using accurate data is critical, and getting that is not always easy.  And, if you don’t have accurate data, you may be making the wrong business decisions that could end up hurting your business, when you thought you were helping it.  Allow me to explain.

CASE STUDY #1:  MANAGING SALES PIPELINE

In most B2B businesses that have a long sales cycle, the only way assess the effectiveness of your sales team and predict future revenues is based on data your sales team enters into your CRM.  Here you would be looking to see a salesperson’s number of accounts growing, see how those leads are working their way through the sales funnel from qualified lead to closed sales and the total dollar value of the pipeline being managed.

But, think about what I just said: you are valuing the success of your sales team based on the data that they themselves are entering (or not entering) in the CRM system.  That creates multiple problems.  First, I have seen situations where salespeople will actually enter false information, to make it look like their efforts are more successful than they really are, trying to save their jobs.  And, second, any time you are reliant on humans for data, there is plenty of room for error.

For example, did the salesperson remember to enter a new lead into the CRM?  Did they remember to update the status of a lead (e.g., from active to dead)?  Did they update the dollar value of that lead from $20,000 to $10,000 after they learned the client didn’t need as many products as they first thought?  Did they update the expected close date from April to June, after they learned the project has been delayed?  You get the point.  Most businesses are making mission critical decisions based on future expected revenues from this data.  And, more often than not, the data in the system is not very accurate, updated or reliable.

If your CRM suggests you are working with over $1,000,000 of potential leads, and your normal conversion rate is 20%.  You would think there is a reasonable chance to close $200,000 in sales.  Monies you would be running the business with and paying your bills and payroll.  If that $200,000 doesn’t show up on time, as predicted, and you don’t have cash in the bank in reserve, bad data could put you in an illiquid position and potentially take you out of business.

So, when managing sales pipelines like this, you need to do to your best to scrub the data.  Every week, remind your salespeople to update their data in the system for any changes?  In your one-on-one meetings with the team, talk through their list, line by line, to ensure what the system data is telling you, is actually the reality.  And, where you can, build automated systems that updates data for any actions made (e.g., as new email leads come into business, they automatically get entered in CRM).  This includes building in automated tasks and reminders for each lead, to make sure the leads are actually being moved forward and the salespeople are getting system-triggered actions they need to take for each lead.  Most good CRMs or sales enablement tools can help you here.

CASE STUDY #2:  MANAGING MARKETING SPEND

The quality of your marketing efforts is also dependent on the quality of the data being managed and studied.  Here are the two most-typical problems: (1) is your marketing team managing towards the right data metrics in the first place; and (2) is the appropriate credit being given to the marketing channel that actually drove the lead, in a multi-device world where getting the proper attribution is not always easy (e.g., first learned about you through Google paid advertising on their office PC, but came to you direct from the mobile phone where you lost the Google tracking).

Let me talk through a recent example I lived through.  We recently hired an ad agency to manage our paid search campaign.  We told them immediate return on ad spend (ROAS), defined as clearly attributed revenues from the campaign divided by marketing cost of campaign, as the key metric to drive.  A strange thing started to happen in our business:  our low ticket, online ecommerce transactions started to take off, but our desired high ticket, offline B2B transactions were not growing at all.  By telling our agency to focus on “immediate” ROAS, the only way they could hit the desired target was by focusing on smaller orders that were immediately ready to book online.  That excluded the desired longer sales cycle leads we really wanted to be growing.

So, after six months of these learnings, we switched directions.  We told the agency immediate ROAS was no longer the goal.  We would be happy waiting our three month sales cycle, before studying our ROAS.  Instead, the leading indicator of future desired B2B sales, was immediate B2B leads that came in from that marketing effort.  That would be the key metric to manage for.  And, as soon as we made that change, our quick, low ticket sales started to fall back to more normal levels, and our desired B2B leads started to reach record heights.  We were thrilled, thinking we had finally “cracked the code” to scaling our business.

But, did we?  A B2B lead is only valuable, if they ultimately convert into B2B transactions and revenues.  So, in April, we did a retroactive cohort analysis of all B2B leads that came into the business in January (our normal three month booking window).  And, what we learned was concerning:  the B2B leads were coming into the business in record numbers, but very few of them were actually converting into sales, at levels far lower than our typical conversion rates.  And, after researching this further with our sales team, we learned the leads that were coming in, were very price sensitive, shopping many websites at once looking for the lowest price, and were often looking for last minute deliveries that were impossible to get the products to them in time.

So, now we are back to the drawing board, trying to figure out the right metric to be managing to?  Or, if the same B2B lead metric, how to optimize the campaign trying to find leads we can actually work with.  And, making sure we are given proper attribution to all the leads coming into the business, to ensure we are not missing anything important in our look at the data.  We also want to be careful not to “throw the baby out with the bath water”.  Maybe there is something going on operationally, that is getting in the way of sales not converting, and the marketing agency is actually doing a great job.  Time well tell.

CONCLUDING THOUGHTS

So, any you can see, data is critical to managing your business.  I gave you examples in sales and marketing.  But, I easily could have given you data-driven examples in other areas of your business, like operations, finance, human resources or technology.  So, make sure you are living in a world where data is king.  But, more importantly, accurate data is king with the business being driven by metrics that are the most important and reliable for predicting and driving future success and desired outcomes.  The data is only as good as the effort you put into it!!


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


Wednesday, July 3, 2019

Lesson #315: Why We Turned Down a Chance to Double Sales

Posted By: George Deeb - 7/03/2019

As you may remember, back in 2018, we acquired Restaurant Furniture Plus , a B2B ecommerce business that sells foodservice furniture to ...



As you may remember, back in 2018, we acquired Restaurant Furniture Plus, a B2B ecommerce business that sells foodservice furniture to restaurants and other hospitality companies.  We recently received a request for proposal from one of the most-recognized restaurant brands in the world.  If secured, the project would have doubled our sales overnight.  We walked from the opportunity, which may sound silly to you.  But, here’s why.

OUR CORE BUSINESS

First a little background on our business.  To date, our core business has revolved around two key things.  First, we are marketing company first and foremost.  Which means we resell the products of others and don’t typically take part in product design, manufacturing, importing or warehousing.  And, second, our average B2B transactions are typically in the $5K-$200K range, sold most typically to up-and-coming chains that have yet to build in-house procurement departments like the national brands.  In no year has any one of our customers comprised more than 10% of our sales.

THE NEW CLIENT OPPORTUNITY

The proposal we received is summarized as follows.  First, it was a huge order for over 1,000 franchise locations of the chain, which meant it would have been a huge multi-million dollar order, around 25x bigger than any other order we have ever closed.  Second, it was a complex order that involved custom manufacturing new designs exactly to the customers’ exact specifications, where the customer required us to build prototypes upfront at our own cost.  And, third, it was not an ideal contract, where the customer was not buying from us, their individual franchisees were (one at a time), and the contract included a 10 year product warranty.

WHY THE PROJECT SIZE WAS A PROBLEM

If we had closed this sale, yes, we would have loved doubling our sales.  But, all of a sudden, we now have a customer that comprised more than 50% of our sales.  Which is a really high concentration of sales in one customer, especially since the nature of the transaction was a “one and done” project.  Those sales would have evaporated in the following year.  So, instead of showing nice growth in 2020, we would most likely have shown sales declining in that year.  Which was not an optic we wanted to share with banks or other investors down the road.

And, when you have a client as large as this one, it is really easy for that project to become “all-consuming”, at the expense of all of our other long-term clients.  We didn’t want to risk mis-serving our loyal base of customers, by investing the vast majority of our energy into this one big project.  Which is what this project would have required.

WHY THE COMPLEX PRODUCT WAS A PROBLEM

If we had been selling “off the shelf” products from our typical vendors, this project would have been a layup.  There would have been no new product to design or warehouse.  But, the fact we needed to custom manufacturer a specific solution meant we needed to go around $50,000 out of pocket to build the required prototypes for the customer to approve, as they would not fund prototype development.  To us, that was a big number to swallow without any guarantee of a sale on the backend.  And, this particular product had to be manufactured with required components only available from one overseas manufacturer, which would have made assembling the product with other U.S. or China based components a logistical challenge.

WHY THE CONTRACT WAS A PROBLEM

This $5,000,000 project wasn’t going to be funded in one check from the customer.  It was coming in $5,000 at a time from 1,000 individual global franchisees over the course of a year.  Which meant going out of pocket on around $3,500,000 worth of inventory day one to get the best-priced manufacturing terms, without any financial support or guarantees from the customer, and then, crossing our fingers all the franchisees actually buy the product over time as there were supposed to.

Then, there was the issue of having to send the orders individually to 5,000 locations across the globe; it wasn’t simply going to one customer warehouse.  So, the warehousing of the items and the shipping logistics for heavy furniture going overseas, would have certainly created its challenges, operationally and financially, as that was not part of our core competency of selling only to U.S. based customers to date.

And, the final deal breaker was the 10 year warranty.  How many products have you purchased come with a product warranty of 10 years.  And, this was for outdoor patio furniture getting baked in the sun, and being used in a commercial setting where things could naturally go wrong.  The last thing we needed, were warranty claims showing up in years eight, nine and ten, that could have bankrupted the company down the road.

WHY WE PASSED THE DEAL

So, as you can see, there were a lot of reasons we decided to pass on this opportunity.  It would have been so tempting to close the sale, and pat ourselves on the back for doubling sales.  But, the downside risks here were way too high to swallow:  the upfront prototype costs, the upfront inventory financing, the global warehousing and logistics, the 10 year warranty, etc. were all potential pitfalls that we were unwilling to take that risk.

CONCLUDING THOUGHTS

So, the lesson here:  be careful what you ask for, because it could be your undoing.  Don’t get so romanced by the idea of driving revenues, that you don’t think through the operational or financial challenges it is going to result in.  Only bite off what you can easily chew, otherwise your business will “choke”.   Know what your core competencies are, and stay firmly focused on what you can do best.  It is perfectly acceptable and prudent to say no to a sale, if there is a high odds it will end up capsizing your boat.  For more insights here, be sure to read this companion article:  Pitfalls to Avoid When “Reeling in the Whale”.


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



Friday, June 14, 2019

[VIDEO] George Deeb Discusses 'Pain Killer vs. Vitamin' Business Models

Posted By: George Deeb - 6/14/2019

I was recently interviewed by the  Atlanta Small Business Network  (ASBN), an online "television network" serving the small b...




I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about how to make your business a "need to have" painkiller and not a "nice to have" vitamin.  I thought this video turned out great, and I wanted to share it with all of you, to help with your product strategy needs.  I hope you like!!


The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above, or feel free to watch it on the ASBN website.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.


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

Saturday, June 8, 2019

The Best Employees Have These '31 Flavors'

Posted By: George Deeb - 6/08/2019

Having good employees will make or break a company’s success. I have previously written about how best to read resumes and screen employ...



Having good employees will make or break a company’s success. I have previously written about how best to read resumes and screen employee candidates, but that is before they are actually working for the company and you get a chance to see their “true colors” when they are not “on show” during the interview process.  This post is designed to help you identify the best traits that most successful employees share, so you can “double down” on those best employees and “weed out” the rest, as nothing can take down a company faster than a bunch of toxic employees that don’t beat to the company’s drum.  The best employees have these “31 Flavors” blended into one.

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, June 6, 2019

Lesson #314: The Only Winners in Ecommerce? Amazon, Google and Facebook!

Posted By: George Deeb - 6/06/2019

I have been a long-time fan of the ecommerce industry.  As offline retailers were struggling to compete with online retailers, many larg...



I have been a long-time fan of the ecommerce industry.  As offline retailers were struggling to compete with online retailers, many large chains went out of business, and an increasing amount of consumer buying moved online.  For a long time, ecommerce startups were printing money, in what felt like a “can’t lose” industry over the last couple decades.  But, like with any “gold rush”, empowered by ecommerce platforms like Shopify that made it quick and inexpensive to get your online store up and running, ecommerce attracted a bunch of competitors trying to get their products discovered online.

But, what happens when millions of ecommerce stores are fighting to get discovered on only three primary websites (Amazong, Google and Facebook) where consumers are looking for potential shopping solutions?  All hell breaks loose, wreaking havoc on your cost of customer acquisition and your bottom line profits.  Which means the only long term winners in ecommerce are going to be Amazon, Google and Facebook (“The Big Three”), who keep raking in all the highly-profitable advertising dollars, while the ecommerce businesses themselves are starting to struggle to make a profit.  Allow me to explain.

THE GROWING ECOMMERCE INDUSTRY

The ecommerce industry in the U.S. was approximately $500BN in size in 2018, and has been one of the fastest growing areas of the economy.  This big market has been attracting tons of large retail corporations and startup entrepreneurs that have been trying to capture their piece of the pie.  What started off as a handful of ecommerce sites in the infancy of the internet has grown to over one million ecommerce businesses in the U.S. alone (and growing daily), each competing for consumer attention.

THE RISING COSTS OF GETTING DISCOVERED

But, how to do you get consumer attention?  In today’s market, that largely means The Big Three websites.  But, there is a limited supply of positions on the first page of The Big Three’s website search results.  Which means with limited supply and growing demand, the price of getting discovered keeps going up and up.  Which means the cost of acquiring a new ecommerce customer is quickly increasing, eating into the profitability margins of those ecommerce businesses.

To me, it is quickly becoming a race to the bottom for the ecommerce businesses, many of which can no longer drive a profit on their first sale.  They now must cross their fingers that they have a quick and frequent repeat sale cycle, to make their profits from the second and third transactions down the road.  Which may work well for a consumable vitamin business, but doesn’t work so well for a non-consumable mattress business, as an example.

GOOGLE, FACEBOOK AND AMAZON CAPTURING ALL THE PROFITS

As costs keep going up and up for the ecommerce businesses, that means advertising revenues keep going up and up for The Big Three.  Which means the only true long term winners in ecommerce will be The Big Three!!  Said another way, if advertisers are willing to invest up to one third of their revenues into consumer marketing efforts, that is over $150BN of largely free and clear profits for The Big Three to share between themselves.  While at the same time, all the ecommerce businesses will simply struggle to break even as their marketing costs continue to soar to higher and higher levels.  Pretty picture for The Big Three; ugly picture for the ecommerce businesses.

AN IEXPLORE CASE STUDY—COSTS UP 10X

Let me provide an example here.  When I was running iExplore in the year 2000, I could buy a Google “adventure travel” search click for $0.25, competing against a handful of competitors.  Those clicks would net me around a $200 cost of acquisition per new customer, or around 20% of my $1,000 gross profit margin.  Resulting in a very healthy bottom line profit margin.  Fast forward to today, that same click may cost $2.50 (10x more), as hundreds of competitors are now fighting for the top positions on those keywords.  Which means my cost of customer acquisition has grown to $2,000 today.  And, instead of driving an $800 profit on the first sale, I am now losing $1,000 on the first sale.  A pretty grim reality, to say the least.

MAKING A DEAL WITH THE DEVIL (AMAZON)

Google and Facebook clearly present their marketing challenges, but Amazon is even worse.  Over half of all shopping searches start at Amazon.  But, there is a price to pay for that distribution.  Amazon charges around a 15% revenue share to get promoted on their website, assuming you do your own fulfillment (the fee rises to around 25% if you need Amazon to do the fulfillment).  And, that is before Amazon has fully exploited their ambition of building a Google-like advertising marketplace to ensure your products get discovered on their platform.  When you layer marketing costs on top of the distribution and fulfillment fees, there is going to be no profits left for anyone except Amazon.  And, if you were hoping for repeat sales to drive your long term profits, good luck, as Amazon does not allow you to share in any of the customer records created.  They are Amazon’s customers, not yours, and you are not allowed to repeat market to them anywhere except on Amazon.  All in all, a great win for Amazon, and a strong kick in the gut for the ecommerce businesses.

CONCLUDING THOUGHTS

Even if you are one of the lucky ecommerce businesses that are driving a healthy profit today.  Enjoy it while it lasts.  It is only a matter of time before new competitors learn of your success on The Big Three websites, and try to enter your market.  We’ll see what your profits look like in a couple years, after the flock of competitors start fighting for position around your keywords.  And, this will be the case in nearly every category of ecommerce, so it doesn’t really matter what products you sell.

So, for all you ecommerce lovers out there (myself included), I have these cautionary words of wisdom for you:  think twice before getting into the ecommerce business.  If you want to win long term in ecommerce, stop thinking about what products you are trying to sell, and think more about how you can profitability grow your business without relying on The Big Three websites (e.g., viral word of mouth, direct mail, smaller websites) with proprietary or patented products only found on your website.  Or, better yet, think about how you are going to build a new fourth competitor to The Big Three, as that is where the real profits are long term, without having to deal with all the merchandising, warehousing, markdowns and other headaches that come with running an ecommerce business.

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


Tuesday, May 28, 2019

[VIDEO] George Deeb Discusses Recruitment Strategies on ASBN

Posted By: George Deeb - 5/28/2019

I was recently interviewed by the  Atlanta Small Business Network  (ASBN), an online "television network" serving the small b...




I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about recruitment strategies for startups.  I thought this video turned out great, and I wanted to share it with all of you, to help with your recruitment needs.  I hope you like!!



The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above, or feel free to watch it on the ASBN website.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.


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

Friday, May 24, 2019

Lesson #313: The Top 5 Benefits of Marketing Personalization

Posted By: George Deeb - 5/24/2019

Marketing has evolved from one-size fits all mass marketing to your entire target list, to laser-focused personalized messaging cust...




Marketing has evolved from one-size fits all mass marketing to your entire target list, to laser-focused personalized messaging customized to that exact individual.  Personalized digital marketing is now the rule rather than the exception. From email campaigns to pay-per-click, personalized targeting is the accepted standard across most of the digital marketing world.  And, it’s not just ubiquitous—it’s increasingly close to the strategic core of how good marketers do business. To help me dig deeper on this topic, I solicited the wisdom of my colleague, Ronald Dod, the CMO and Co-Founder at Visiture, a leading ecommerce marketing agency with expertise on this topic.


Here are the top five reasons why increasing the level of personalization in your digital marketing is one of the most impactful marketing investments you can make. 

1.  Improved Knowledge of Customer Base

One key aspect of marketing personalization is gathering the data you need to effectively segment and target your customers. In an omnichannel world, you need omnichannel data collection. A savvy 21st century marketing team will always be on the lookout for opportunities to get more customer data, whether it’s through opt-ins like surveys or tracking and analytics tools. Thus, as your marketing personalization works toward its other goals, it can simultaneously work to provide you with better information on your customers and what they respond to.

A customer data platform, or CDP, is one of the most popular ways to collect and organize customer data into an easily usable format. These software packages integrate all of the customer data you collect through email, sites or apps and create customer profiles. You can then examine these profiles, find insights, create segments and create data sets for other tools like email marketing and PPC platforms.

A side benefit is that these customer profiles are useful for much more than just marketing. Examining your customers, their demographics and their interests will yield insights that you can use to drive decisions in distribution, product development and other areas. It’s a perfect example of how taking the plunge into personalization can have positive ripple effects across your business. 

2.  More Sales and Conversions

The numbers are clear: when it comes to driving sales and conversions, personalization works, and it works well. In one study, 88% of businesses said that personalized marketing gave them a measurable sales lift, and 53% reported the boost as 10% or more. Another study found that businesses using various personalized marketing techniques reported revenue gains between 8% and 21%. 

Personalized ads can even serve as a second line of defense to catch conversions that might slip away, thanks to the practice of retargeting. Retargeting, which involves serving targeted ads to people who have already visited a company's website, has been associated with a 70% higher conversion rate in visitors who see a retargeted ad. With figures like that, it’s not hard to see why personalization has planted itself firmly in the marketing mainstream, and why marketers are scrambling to realign their sales strategies with these new realities.

3.  Better Customer Engagement

Loyal customers who engage with a brand through multiple channels are incredibly valuable to the brand’s health and longevity. But with more choices and competition than ever—and brand loyalty possibly on the wane among millennials—it’s become critically important to foster that engagement through personalized service and content.

Loyalty programs, to name one example, have always been a popular way to increase customer engagement, but they’re undergoing a strategic shift. Now, it’s more common to find businesses concentrating on personalization and relationships in their loyalty programs. It’s a re-imagining from the somewhat impersonal traditional loyalty program, where a customer spends money and receives points, to one in which the retailer acts more like a trusted guide and partner. 

This is a good time to make another point: there’s definitely such a thing as going too far with personalized marketing. Although many customers enjoy being courted by businesses, it can be deceptively easy to cross the line into a situation in which a customer feels uncomfortable or creeped-out, so businesses need to tread carefully. Be especially wary of pushing into a customer’s family life or personal relationships and, of course, take steps to ensure that customers’ data is safeguarded. 

4.  More Efficient Marketing Spending

When applied correctly, personalization makes your marketing dollars go farther and do more. By creating the perfect match of content and customer, personalized marketing can materially improve ROI by making it possible to precisely target and fine-tune messaging. 

This is an especially important part of PPC advertising, where segmentation and personalization are both easy and necessary. Most PPC platforms include robust audience targeting tools, allowing you to serve ads to people whose data indicates they’re interested in your product using keyword bids and audience customization. If you’re thoughtful about your bid strategies and put in the work to learn the tools, the ROI can be impressive (as much as 5-8x greater than without personalization).

Email marketing is another channel where personalization can drive great ROI. The personal nature of the email inbox makes it the perfect place to deliver targeted pitches and personalized copy. Marketers in one study found an eye-popping 760 percent increase in email-based revenue after introducing segmented campaigns. 

5.  Shorter Sales Cycles

Personalized marketing can be helpful for shortening the time it takes a customer to move down the sales funnel. Using smart segmentation and audience metrics, marketers can identify and target customers who are further along their path to purchase, helping to create conversions more quickly and prioritize the most promising leads. 

This can be especially important for B2B companies and other businesses that struggle with their longer sales cycles. A long sales cycle usually indicates that a customer has numerous decisions to make that may have to go through multiple levels, so it’s critically important that a business establish itself as a helpful and interested partner who’s invested in creating a relationship. Personal attention to the customer’s needs is key to moving a customer confidently through the path to purchase—and that’s something that personalized digital marketing excels at providing. 

Concluding Thoughts

Personalized digital marketing may have once been a leg-up strategy to break out of the pack, but it’s now integral to the whole playbook. If your business has yet to fully dive into this field, now is the time. It has mature and well-developed tools, in addition to an exciting cutting-edge frontier. By learning about and speaking directly to your customers, you’ll set your business up for continued success. 

Thanks again to Ronald and Visiture for helping me write this post.  Your insights on this topic will be of terrific benefit to the Red Rocket blog readers.

For future posts, please follow me on Twitter at: @georgedeeb.  And, you can also follow Ronald Dod at @Visiture_Search and Visiture at @Visiture.


Thursday, May 9, 2019

Lesson #312: Don’t Let Short-Term Thinking Hurt Long-Term Success

Posted By: George Deeb - 5/09/2019

I recently met a business where the owner made 100% of her decisions based on how it impacts the immediate cash flow of the business.  A...



I recently met a business where the owner made 100% of her decisions based on how it impacts the immediate cash flow of the business.  And I mean every decision!  Whether it was hiring business professionals like accountants or lawyers that were advising the business.  Or, making marketing decisions based on what drove revenues this minute.  All the way down to minute things like figuring out which credit card to use, to drive immediate cash back rewards on expenses.  Some of this is admirable.  But, most of this was completely short-sighted and hurting the business long term. 

I get it.  Most entrepreneurs are cash starved and looking to save every penny they can.  But, in this case study post, you are going to learn that cutting pennies today, could be costing you millions of dollars tomorrow.  Allow me to explain.

DON’T MAKE SHORT TERM DECISIONS THAT HURT LONG TERM GROWTH

One of the actions this entrepreneur made was only investing in marketing tactics that would drive an immediate sale and immediate return on marketing investment.  The problem with that focus was that she was running a B2B business, where the highest ROI spend this minute, may not be the best tactic for maximizing long term sales, given the long sales cycle lead time of B2B.  For example, if you focus on driving sales, profits and returns today, you would most likely select Google as your primary marketing channel.  And that will most likely result in lower ticket transactions, where the client budget is already in place and can be spent today.  If she was focused on the long term, perhaps she should have invested in big trade shows in her industry, where very large ticket orders could be secured, albeit on a slower and more patient timeline.  So, yes, trying to drive an immediate return is nice.  But, not if you are sacrificing 10x that amount of sales and profits down the road.  It would be more ideal, to better capitalize the business to better focus on the biggest long term ROI opportunities, even if it requires needing some short term working capital to bridge the gap.

DON’T BE CHEAP ON STRATEGIC ISSUES, YOU GET WHAT YOU PAY FOR

When I presented this client with around 10 accountants and 10 lawyers to consider to help her business, I gave her a complete picture of the strengths and weaknesses of each of these professionals, and gave recommendations on which ones I thought were the best to help her business and her specific needs.  For example, I knew she was going to need advisors with a lot of M&A experience to help her accomplish her desired roll up strategy.  But, the only metric she focused on was price.  She ended up picking the cheapest lawyer and the cheapest accountant on this list, neither of which had the required M&A experience she was going to need, which came at a slightly higher hourly rate.  That is like cutting off your nose to spite your face!  You need advisors that know your business needs or industry.  Engaging human talent should not be the same mindset as buying a commodity, like loaf of bread.  With human talent, you really do get what you pay for, based on their expertise.

DON’T PICK THE CHEAPEST SOLUTION, PICK THE BEST SOLUTION

Then I was helping this client with setting up various off-the-shelf technologies, service providers or other point solutions for her business.  This included things like her advertising agency, her CRM software, her SEO firm, etc.  And, again, like with the lawyers and the accountants, it was more of the same.  She would see five options for every need, would ignore the strengths or weaknesses of those solutions, and focus only on price.  She didn’t care that there may be better options out there, to help propel her business to new heights.  All she cared about was how the investment would impact today’s cash flow.  Stop the madness!  Price should be one of the major considerations when picking solutions, but not the only driver.  It is much more important you find solutions that present the best value—offering the most advantages and least disadvantages at the most acceptable price (which is not necessarily the cheapest price).

DON’T LET SHORT TERM DECISIONS, HURT YOUR CUSTOMER EXPERIENCE

One of the short term decisions she made was in picking her shipping provider, moving goods from her warehouse to her customers.  She considered around five solutions, and again picked the cheapest, trying to maximize gross margin.  The problem was, she didn’t investigate other important data points, like the percentage of successful online deliveries of each vendor.  It turned out, that the cheapest shipping vendor, was also the one with the highest instances of late deliveries to customers.  And, guess what happened next; customers started complaining about missing shipments, which put the company in a negative light, and they started to lose repeat sales.  Again, vendor decisions should be much more than simply a price-based decision, to avoid customer facing situations like the above.

DON’T BE SO FOCUSED ON THE WEEDS, THAT YOU LOSE FOCUS ON THE GOAL

This entrepreneur was so focused on short term cash flow, that is was like an obsession.  It just entirely consumed her and drove all of her attention.  She would pull out her monthly income statement, run through every expense item, line by line, and figure out how to drive down the cost of each item.  She put hours and hours of work into that sole goal.  Congrats, you saved a few bucks.  But, shame on you for not putting those same hours into figuring out how to propel your revenues to newer heights, which to me, should have been an even more important area of the business that required her attention.  You may have saved $10K in monthly expenses, but you probably hurt your revenues by $100K per month had you focused your energies there.  The point here: you need to prioritize your time and invest it in the best ways possible.

CONCLUDING THOUGHTS

So, the moral of this story here:  don’t be a cheap ass!!  Yes, you want to keep your expenses as low as possible.  But, you don’t want to make cash flow driven decisions that end up slicing your own throat.  Each business decision needs to do what is right for the business, overall for the long term.  Not, simply what is best for the bottom line in the immediate term, for the reasons summarized above.  Instead, make sure your business is properly capitalized to allow it to afford the “right” solution for the business, that will help give the business the highest odds of long term success.  And, remember, it is impossible to maximize long term growth and short term profitability at the same time, you have to pick one or the other.

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


Saturday, April 27, 2019

Good Decision Making Requires Good Data

Posted By: George Deeb - 4/27/2019

Over the years, I have become a “data hound” looking for every morsel of wisdom I can ge to help me make smarter decisions. The good ne...




Over the years, I have become a “data hound” looking for every morsel of wisdom I can ge to help me make smarter decisions. The good news here: accurate data is king. You can’t effectively manage your business without accurate data. Getting it is not always easy but without it you risk making the wrong business decisions -- hurting your business when you thought you were helping it. Allow me to explain.

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, April 25, 2019

[VIDEO] George Deeb Discusses Market Research and Business Planning on ASBN

Posted By: George Deeb - 4/25/2019

I was recently interviewed by the  Atlanta Small Business Network  (ASBN), an online "television network" serving the small bu...



I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about business coaches and mentors, and how they can help your business.  I thought this video turned out great, and I wanted to share it all with you, to help you with your market research and business planning needs.  I hope you like!!


The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above, or feel free to watch it on the ASBN website.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.


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

Saturday, April 6, 2019

Why We Turned Down a Chance to Double Sales

Posted By: George Deeb - 4/06/2019

Back in 2018, we acquired Restaurant Furniture Plus , a B2B ecommerce business that sells food service furniture to restaurants and othe...



Back in 2018, we acquired Restaurant Furniture Plus, a B2B ecommerce business that sells food service furniture to restaurants and other hospitality companies.  We recently received a request for proposal from one of the most recognized restaurant brands in the world. If secured, the project would have doubled our sales overnight. We walked away from the opportunity, which may sound silly to you. But, here’s why.

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

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


Thursday, April 4, 2019

Lesson #311: It’s Time to Rethink the Pyramid Shaped Org Chart

Posted By: George Deeb - 4/04/2019

I have long thought movie stars and sports heroes were drastically overpaid in comparison to their contributions to society.  For exampl...



I have long thought movie stars and sports heroes were drastically overpaid in comparison to their contributions to society.  For example, teachers are teaching future generations of kids, and get paid pennies in comparison.  And, even well paid doctors saving lives, are paid a small fraction of what a basketball star gets paid to simply play the game of basketball.  In the last decade, these inequalities are starting to be seen in corporate workplace, as well, with rising CEO pay and a mid-level jobs under siege due to outsourcing and technology automation.  I think we need to rethink the traditional pyramid shaped organizational structure to “right size” the work completed vs. compensation paid equations.  Allow me to explain further.

WHAT IS A PYRAMID SHAPED ORGANIZATION?

In most hierarchical organizations, it could look something like the following.  One CEO manages five EVPs who collectively manage 25 SVPs, who collectively manage 125 VPs, who collectively manage 625 directors, who collectively manage 3,125 managers.  As you can see, a very wide base and a very narrow top results in a pyramid design as you move up the organization.



And, as you move up the organization, the compensation dramatically grows with each level, where a manager can make $37.5K, a director can make $75K, a VP can make $150K, an SVP can make $300K, an EVP can make $600K and a CEO can make $1.2MM+.  And, depending on the size of the company, the Fortune 500 CEOs can make $25MM a year, which have dramatically increased to that level in the last decade or two.

PROBLEMS WITH THE PYRAMID DESIGN

The first problem with the pyramid design is compensation disparity from the top of the organization to the bottom of the organization.  In the example above, do we really think the CEO is worth 32x the managers at the bottom layer of the organization?  Or, in the case of a Fortune 500 company, what could be 1,000x the entry level workers?  Probably not, as often times the people in the trenches are doing the hardest work.

The second problem is the caps it creates in upward mobility.  At every level of the organization, there are 5x as many candidates that can be promoted into the tier above them, as illustrated in our example.  Presumably, the 125 VPs are all roughly equal in terms of doing a good job, but only 25 of them will have a chance to get promoted to the next level.  That is like a 20% chance of winning the lottery from one level to the next.  Or, if you go from the bottom level to the top, you have a 32 in 100,000 chance to go from entry level to CEO.  Sorry to the 99,968, you are just out of luck—no lottery ticket for you.

The third problem is the impact that has on the U.S. economy.  The wealth gets concentrated in the top 1% of people and the 99% in the middle class are getting squeezed right out of existence, as inflation-based raises are not keeping up with the rapidly growing cost of living and rising consumer debt levels.  This country was built by the middle class, and with growing levels of outsourcing and disintermediation by technology, the American dream is really becoming a real potential for a very few people that are able to make it all the way to the top.  The old adage is, you need to have money to make money; and right now, there are very few that have it, to give them a realistic chance of making it.

HOW TO FIX THE PYRAMID—BUILD A CYLINDER

Firstly, in my example above, there were six levels of workers, from managers all the way up to CEO.  But, instead of having 80% of workers in the bottom tier, what if each tier was evenly distributed with 16.7% of the workers in each tier, closer in shape to to a cylinder than a pyramid.  But, that creates some interesting management hurdles, along the way.  As an example, you can’t have 651 people acting as CEO or managing the company by committee.  But, you could empower more people to make more strategic senior decisions, with fewer levels of bureaucracy.  Maybe break the business into pieces, in terms of how it is managed by department, by region, by customer, by channel or whatever.  This would require a lot more thought on how best to divide up key decision making roles, to empower more people to take leadership positions.  But, if we can elect our Presidents by democratic vote, maybe there is a way to run our businesses the same way?

Secondly, in my example above, there was a total payroll of around $194,512,500.  If all 3,906 employees we treated the same, the average would be around $50,000 a person, which would be like a 33% raise to the 80% of employees in the bottom tier, and would materially improve their lifestyles.  Now, I am not saying there shouldn’t be a step up on compensation with each tier.  But, maybe it is a 25% bump instead of a 100% bump in my example, to help make more room for the folks in the lower tiers.  And, don’t forget, in the cylinder model, we moved 80% of workers up into higher tiers within the cylinder, so the raises will end up being much higher when combining the salary per tier with the more people in higher tier advantages.  For example, taking a quarter of the bottom tier up to $62,500 (up 67%), another quarter to $78,000 (up 108%), and a third quarter up to $94K (up 151%), as examples, as they were reshuffled upward within the organization.

The natural pushback here will be there are not enough quality candidates for each tier.  To that point I would say: (i) we simply need to make education or training of those people more affordable and more accessible; and (ii) we have a ton of “underemployed” people on the sidelines waiting to get back into the game in a much more material way.  Of course, the current people at the top, won’t like this model, as it means materially scaling back on their compensation, but that is the price of helping to rebuild our middle class.  Instead of having one billionaire Jeff Bezos at the top, I sure he will live just fine on multi-millions of dollars a year, as an example.

CONCLUDING THOUGHTS

So, the points here are: (i) why should the vast majority of the corporate compensation spoils go to elite few, when a business is built on the shoulders of many; (ii) how do we get skyrocketing executive salaries in check; and (iii) how do we save our middle class which is under siege.  I am just trying to think out of the box on how best to reinvent organizational design for a modern 21st century business.  If you have any ideas here, please add them to the comments box on this page.  Together, we may just figure out a way for the anonymous John Doe to get paid the same as Tim Cook, Lebron James or Tom Cruise.

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



Friday, March 15, 2019

Lesson #310: Want Startup Success? Keep It Simple Stupid!

Posted By: George Deeb - 3/15/2019

Building successful startups is not easy.  That is why only one in ten startups actually succeed.  But, if you are going to have any cha...



Building successful startups is not easy.  That is why only one in ten startups actually succeed.  But, if you are going to have any chance of success, you need to K.I.S.S.—Keep It Simple Stupid.  You have to boil your idea down to one specific thing, and stay religiously focused on that end goal.  Which means not getting distracted by the various “flavors of the month” that can lead you down rabbit holes and stress out your organization in the process.  Allow me to explain.

A Case Study of What Not to Do

The other day, Red Rocket had a call from a startup seeking to raise capital.  When I asked him to explain his business model, it went something like this.  We are a human services company, and an artificial intelligence company, and an ad sales network, and a consumer marketing brand, and an ecommerce business (in one of the hardest industries to break into).  I kid you not, that was the pitch, trying to be all things to all people in their industry.  And, the problem was: the entrepreneur had no clue there was anything wrong with that strategy.

First, from a business model perspective: the tactics required for successfully running a B2B business is completely different from the tactics required for successfully running a B2C business.  The former is more sales driven and the latter is more marketing driven, as an example.  So, strike one.  Then, drilling down even further, running a B2B services business is completely different from running a B2B technology company.  The former is human driven and the latter is software coding driven, as an example.  So, strike two.  And, drilling down even further, running an artificial intelligence company is materially more complex than building a simple piece of B2B software, with hardcore data science and machine learning required.  Strike three, you’re out!  And, I didn’t even get to drill down on the various B2C complexities here.

When I told the entrepreneur, of the FIVE different business strategies discussed, they needed to pick only ONE, whichever one would be the easiest, most-lucrative one to pursue, I was met with a blank stare on his face, with him not exactly knowing which one was the best, or why he couldn’t reasonably be doing all five strategies at the same time.  I told him, Keep It Simple Stupid; pick one which will be your core competency that you will do better than everyone else, and outsource and partner for the other pieces of the puzzle if you feel they are important.

A Case Study of What to Do

As you may know, we recently acquired Restaurant Furniture Plus.  When the entrepreneur was pitching their business to us, their communicated mission was very clear:  we are the leading ecommerce seller of furniture to restaurants.  And, they differentiated themselves with a “free furniture sourcing service”, to take work off the plate of busy restaurant owners that didn’t have the time to research furniture themselves.

Why did that pitch resonate?  First, the restaurant industry was large, at approximately $800BN a year, so a big business could be built.  Second, all the competitors lead with products and prices, and this company lead with service, as a clear differentiator.  Third, given the heavy B2B services nature to the business, it would be more defensible versus the big ecommerce-only players in the industry, like Amazon, that are not deep in services.  And, the company’s clear focus showed in their financial metrics.  The business was growing very quickly, with a very high conversion rate and many happy repeat customers, both data points which spoke to the high quality of the service and its appeal to customers.  All in all, it was very simple in its design and execution.  And, guess what?  We bought the company!

K.I.S.S. Applies to All Areas of the Business

The above case studies were speaking to high level business strategies.  But, simplicity applies in all other areas of the business.  Is your product offering streamlined?  Are your operational processes simple?  Are your sales and marketing efforts laser-focused on the most profitable tactics?  Is your company culture clearly communicated for all others to follow?  Are your monthly financial statements reporting the most important key performance indicators, so you can best manage them?  Etc. Etc.  So, critically look at all areas of your business to streamline and better focus the business.

Concluding Thoughts

So, my pitch to all of you entrepreneurs out there: stop what you are doing, take a breath and re-assess everything you are doing today.  Is everything as simple and laser-focused as it can be?  If not, you have some fixing to do.  And, oftentimes, entrepreneurs are simply too close to their own business to clearly focus.  So, maybe you need a non-biased outsider to come in with a fresh set of eyes, to help you “navigate the forest through the trees”.  If you K.I.S.S. your business, good things will surely follow.


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

Monday, March 4, 2019

Avoid Internally Shuffling Staff Into Wrong Roles

Posted By: George Deeb - 3/04/2019

The old adage, a “bird in hand is worth two in the bush” may work in some instances in business, but slotting people into employee roles...



The old adage, a “bird in hand is worth two in the bush” may work in some instances in business, but slotting people into employee roles is definitely not one of them.  I can’t tell you how many times I see early stage entrepreneurs slot a person into a role, simply because it is convenient, with them already known and on the team operating in an entirely different role.  Stop this madness!!  Do you want the quickest solution to your hiring needs, or the best solution?  Allow me to further explain.

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, March 1, 2019

Google, Facebook and Amazon Are The Only Winners in Ecommerce

Posted By: George Deeb - 3/01/2019

I have been a long-time fan of the ecommerce industry. As offline retailers were struggling to compete with online retailers, many large...



I have been a long-time fan of the ecommerce industry. As offline retailers were struggling to compete with online retailers, many large chains went out of business, and an increasing amount of consumer buying moved online. For a long time, ecommerce startups were printing money in what felt like a “can’t lose” industry. But, like with any gold rush, empowered by ecommerce platforms like Shopify -- that made it quick and inexpensive to get your online store up and running -- ecommerce attracted a bunch of competitors trying to get their products discovered.

But, what happens when millions of ecommerce stores are fighting to get discovered on only three primary websites -- Google, Facebook and Amazon -- where consumers are looking for potential shopping solutions? All hell breaks loose, wreaking havoc on your cost of customer acquisition and your bottom line profits. This means the only long term winners in ecommerce are, you guessed it, Google, Facebook and Amazon. These three keep raking in all the highly-profitable advertising dollars while the ecommerce businesses themselves are starting to struggle to make a profit. Allow me to explain.

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, February 14, 2019

Lesson #309: The Risks of Candidates Climbing Back Down the Corporate Ladder

Posted By: George Deeb - 2/14/2019

Our brains have been wired to think about our careers going up the corporate ladder over time.  A manager, becomes a director, becomes a...



Our brains have been wired to think about our careers going up the corporate ladder over time.  A manager, becomes a director, becomes a vice president, becomes a president, etc.  But, if you think about that structure, there are a lot fewer job positions the further you go up the ladder.  An example typical company may have 125 managers, 25 directors, 5 vice presidents and 1 president.  So, the odds of moving up the ladder aren’t really in your favor, with 80% fewer positions at each next level.  But, people need to make a living.  What happens when an employee needs to go back down the ladder, to find more open positions?  Is that a good idea for you to consider that candidate as a hiring manager?  Let’s find out.

DOES THE CANDIDATE HAVE THE RIGHT SKILLS?

In this post, let’s talk about the sales department as an example.  Most “upper ladder” sales managers have been “lower ladder” salespeople at some point in their past careers.  So, it is highly likely and logical that a sales manager most likely has the knowledge and skillsets required to succeed as a salesperson again.  But, to be clear, the job of a sales manager is completely different from a salesperson.  The salesperson maintains client relationships and closes sales all day, and a sales manager manages and mentors the salespersons all day, to make sure they are hitting their agreed upon targets.  So, making that shift back down the ladder, really means taking on a completely different job again.  You just have to be sure that candidate truly has the appetite for that change.

DOES THE CANDIDATE HAVE THE WILLINGNESS TO DO THE JOB REQUIRED?

Continuing this example, once a sales manager gets used to the tasks of being a sales manager (more in the office, less travel, less repetitive tasks, the prestige that comes with the role), for many, it is really hard to get back into a quota hitting sales producer role.  But, that is a more of a general guidance.  There are exceptions to that rule.  Maybe a sales manager got promoted, and realized they don’t like managing people, and actually prefer the “thrill of the hunt” of being a salesperson.  So, it is really important you ask the right questions during the interview process to ensure that candidate will actually be happy doing the work required in that “lower ladder” position.  Understanding that many will say whatever is required to get the job, so buyer beware.

DOES THE CANDIDATE HAVE THE RIGHT COMPENSATION EXPECTATIONS?

In addition to the role changing at lower lowers, the compensation is typically lower at lower levels.  So, let’s say that Vice President was making $150,000 and now they are looking at a Director level job that makes $80,000.  Once a worker gets used to living off a higher salary, it is really hard for them to make ends meet on a much smaller compensation.  The only times that works out is if the role is combined with material other incentives (like an aggressive commission plan or equity upside to make up the difference), or if they are older in their career (having built up a big savings account to live off of, and perhaps are self-aware of their need to reset their target role and compensation expectation to have a better chance of getting employed at their age).

SHOULD I BE WORRIED IF SOMEONE IS WILLING TO TAKE A PAY CUT?

My off the cuff answer is yes, someone willing to take a pay cut could certainly trigger a concern.  But, it doesn’t necessarily mean it is a deal breaker.  As discussed above, if other incentives are in place, or there is a logical “story” with this candidate, you may be perfectly fine.  Remember, what you gain with an “upper ladder” candidate, is all that extra years of experience that comes with that.  So, if you can get comfortable with the situation, it is like getting a Porsche for the price of a Toyota.  But, buyer beware.

DOES THE CANDIDATE PRESENT A FLIGHT RISK, AWAITING A BETTER POSITION?

Based on my experience of hiring people over the years, once somebody gets used to getting paid at a certain level, they are going to try to maintain or exceed those levels in future jobs.  So, if they are taking a job with you at half the compensation, without a matching good “story” or incentives, that opens the door to those candidates continuing to look for new jobs, even after they have accepted yours.  But, again, that is a general rule of thumb.  That may not be the case in all scenarios, so do your due diligence and make a judgement call.  For example, someone approaching retirement looking for their last job before they retire, could be perfectly fine and worth the risk.

WILL THEY HAVE THE RIGHT ENERGY FOR THE JOB?

Generally, a person’s energy declines with their age.  But, that is not always the case.  I have worked with many people in their 60’s whose energy levels exceed that of people in their 20’s.  Another way to think about this:  older “upper ladder” employees are typically more efficient in how they work, so whatever you think they may lack with energy, they should more than offset that risk with efficiencies they have honed with their prior years of experience. 

IS IT POSSIBLE FOR CANDIDATES GOING DOWN THE LADDER TO RESULT IN A GOOD OUTCOME?

As you have read above, a lot of things have to go right for someone going back down the ladder to result in a good outcome for your business.  But, that does not mean you should close the door on that scenario in all cases.  You need to assess each candidate on their own merits.  What is their “story”?  How do they answer your questions on the above topics?  Do you believe they can live on a smaller compensation and have the energy and appetite to be successful in that “lower ladder” job?  This situation is laden with potential pitfalls, but it most certainly can work out for the best.  Do your homework!


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



Friday, February 8, 2019

Lesson #308: Want to Grow? Complete One Material Action Per Day!

Posted By: George Deeb - 2/08/2019

When you are running a small business, it is really easy to get distracted.  Firstly, your own CEO job most likely has a lot of differe...




When you are running a small business, it is really easy to get distracted.  Firstly, your own CEO job most likely has a lot of different tasks, from chief strategist to chief bottle washer.  Secondly, your team often has many demands on your time, to help point them in the right direction on their projects.  And, thirdly, it’s just too easy to get sucked into the random inbound contacts that come into your email box or through social media.  All I can say to you entrepreneurs who are “floating in the wind” of poor time management is: unless you are doing at least one material thing each day to move your business forward, towards new revenue or profit heights, you are never going to grow your business as quickly as you could be.  Allow me to explain.

WHAT IS A MATERIAL ACTION?

To me, a material action is something that has meaningful revenue or profit implications from its output.  On the revenue side, it could be things like launching a new marketing campaign, or making a new sales call, or ideating a new product line, or expanding into a new target-customer or geographic market, or hiring a new salesperson, or negotiating business merger opportunities, etc.  Anything that will drive new revenues.  On the profit side, it could be things like cutting your cost structure, or improving your business efficiency, or improving your company morale and productivity, to name a few.  Anything that will drive higher margins for your business.

WHAT IS NOT A MATERIAL ACTION?

On the flipside, there are a lot of demands on your time that you think may be important, but just are not a material action, as defined above.  This could be things like producing your monthly financial statements, or posting to your social media accounts, or writing a new monthly email newsletter, or managing your ad agency, or doing one-on-one meetings with your direct reports, or running payroll checks, or upgrading your systems, or relocating your home office, etc.  Yes, these are important tasks that need to get done.  But, they are not going to propel your business to the next level.

BUDGET MORE TIME FOR MORE MATERIAL ACTIONS

I bet if you did a critical assessment of how you are spending each of your working hours, most of you are spending the vast majority of your time, if not all of your time, on “less material” actions.  To me, if you are not spending at least 20% of each day on “material actions” you will not have a reasonable chance to grow your revenues and propel your business to the next level.  So, it is important that you actually carve out “material action” time into your daily schedules.  For example, maybe you block out 8am-10am each day for you to think and act strategically and materially about your business.  Note that I intentionally did not suggest 3pm-5pm each day, when you are most likely tired and not doing your best thinking.

CASE STUDY—PART 1 (THE GOOD)

We recently acquired a business in February 2018.  At the time, they were doing around $2.5MM in annual revenues.  Within four months of acquiring the business, our annualized revenue run rate had doubled to over $5MM.  How did we do that?  We focused on material actions to drive the business forward.  We quadrupled our marketing budget, hired a new ad agency, we launched an SEO effort, opened new sales and marketing channels, expanded our sales team, grew our margins, etc.  Our focus was on driving revenues as quickly as we could, and our time was firmly focused on making those material actions happen.

CASE STUDY—PART 2 (THE BAD)

In continuing the above story, with an increase in revenues came an increase in time that was needed on “less material” projects in the months that followed.  We learned our CRM could not handle the extra volume, and we needed to upgrade to a different CRM, which needed to be researched.  We learned our product information on the website was out of date, and needed to be updated.  Our product offering needed to be fine-tuned, to make the business more scalable.  Our ad agency suggested we make some technology changes, which resulted in some unexpected hiccups and fixing time required.  In doubling our staff size, came the review of hundreds of resumes and dozens of interviews.  Sometimes those hires worked out, and other times they did not, spinning our wheels right back to where we started.  Quickly, the time I had to focus on “material” projects, started to get consumed by “less material” projects.  And, guess what happened: sales growth started to slow down!!

HAND OFF LESS MATERIAL WORK TO OTHERS

I get it, small businesses are typically under-capitalized and don’t necessarily have the luxury of large teams of staff to help leverage your workload.  But, even in small businesses, you need to figure out how to keep yourself moving the business forward with “material” projects.  Where you can, hand off the “less material” work.  Let your bookkeeper produce monthly financial statements.  Let your head of marketing manage your ad agency.  Let your head of technology review various systems needed.  And, take yourself out of that process, at least until the busy work is done and you can review the final output of that work.  Don’t let the “less material” work get in the way of you having the time required to drive the business forward by completing "material" work.

CONCLUDING THOUGHTS

Executives in small businesses are typically very busy people, wearing many different hats at the same time.  The real challenge you will have is making sure that 100% of your time is not consumed by “less material” projects.  You need the discipline of: (i) knowing what projects have the highest odds of moving your revenue or profit growth to the next level (which is an art of its own); and (ii) making sure that slotted time to work on “material” projects is actually getting reserved to make sure that work gets done.  Remember the scene in the Pixar movie “Up”, where the dog kept getting distracted by the squirrels running by?  The “less material” work you doing are “the squirrels”, distracting you from where your focus needs to be.


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


Saturday, February 2, 2019

Don't Let Short-Term Thinking Undermine Long-Term Success

Posted By: George Deeb - 2/02/2019

I recently met a business owner who made 100 percent of her decisions based on how it impacts the immediate cash flow of the business. A...



I recently met a business owner who made 100 percent of her decisions based on how it impacts the immediate cash flow of the business. And I mean every decision -- from which accountant or lawyer to advise the business, what marketing could drive revenue this minute, all the way down to minute things like figuring out which credit card would yield immediate cash back rewards on expenses. Some of this is admirable, but mostly it is completely short-sighted and hurting her business long term. I get it. Most entrepreneurs are cash starved and looking to save every penny they can. But, in this case study post, you are going to learn that cutting pennies today, could be costing you millions of dollars tomorrow. Allow me to explain.

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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