3.5BN People Online by 2017--Think Globally ASAP

Earlier this year, Cisco forecasted how large the world’s Internet-using population would be by the year 2017.  The data was quite staggering.  The global online user population is forecasted to grow from 2.3 billion people in 2012 (32% of the world’s 7.2 billion population) to 3.5 billion people by 2017 (48% of the world’s 7.6 billion population). The Asia-Pacific region is forecasted to continue to be the largest overall market, and the Middle East-Africa region is forecasted to continue to be the fastest growing market.

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

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[NEWS] Join Red Rocket at the 4th Annual Entrepreneurial Bash--Save 30%

Red Rocket is a sponsor of the 4th Annual Entrepreneurial Bash, presented by the Association for Corporate Growth.  The Entrepreneurship Bash is a collaborative event between leading early stage organizations in the Chicago region and Middle Market leaders bridging the leap to the next stage for these companies with access to capital and expertise for high growth companies. It will be a great evening with a bit of discussion and a lot of networking.

Robert Jordan, author of "How They Did It", moderates an all-star panel including Rishi Shah (CEO of Context Media), Ken Hunt (CEO of Vasco), Patrick Spain (Founder of Hoovers & HighBeam) and Mahendra Vora (Founder of Intelliseek & Secure IT).

The event will be held from 4:30-7:30pm on Wednesday, November 6, 2013 at the Galleria Marchetti at 825 W. Erie St. in Chicago, IL.

You can register at this link.  Be sure to enter Red Rocket's promotional code of RRV_VIP to save 30% on your admission--normally $50, now $35 for Red Rocket Blog readers.

The Top 4 Reasons VC's Bias Technology Startups

I have had hundreds of startups reach out to me at Red Rocket looking for fund raising assistance.  Most with hungry, passionate entrepreneurs trying to build a great company in their space.  But, it is typically the technology startups that get through the filter of what I think is “fundable” by professional venture capitalists, based on my conversations with those investors.  This leaves many of the startups in other categories (e.g., CPG, retail, restaurants, real estate, manufacturing) struggling to secure startup capital.  Below are the primary reasons most VC’s bias technology investments.

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

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Lesson #159: Never Stop Recruiting (Even If No Current Openings)

Back in Lesson #106, we talked about the importance succession planning for all positions within your company.  But, in the event you don't have the right successor talent inhouse, you will need to recruit replacement talent for your startup, which we learned how to do in Lesson #34.  And, most likely, this means finding a quick replacement for an underperforming or lost staff member, or adding a new staff member for unexpected growth. 

As the old saying goes, time is money.  The longer it takes you to recruit and replace a terminated or lost employee, or fill that new opening, the longer it will take you to train and optimize the new employee.  And, therefore, the longer it will take your income statement to see the results.

One strategy to employ here is to never shut off your job postings or resume inflow, regardless of whether or not you have an open position, especially for high turnover risk or other key revenue driving positions (e.g., salespeople).  The small cost of the job posting should be more than offset by the weeks of time savings you will get by have a fresh batch of resumes in hand for when you really need them. 

And, better yet, it doesn't hurt to have had some active conversations with candidates for these positions, so you have pre-screened and prioritized the resumes, and know the first calls you are going to make when the time comes.  Understanding, some candidates may not still be available down the road, but at least you will have an opportunity sell them on your opportunity at that time, no different than professional recruiters do when stealing talent from one company to another.

Yes, I know recruiting can be a pain and often a time-consuming distraction in running your business.  I am not suggesting this becomes a full time job for you.  What I am saying is, during your free time, keep your recruiting process on a slow simmer on the back burner at all times.  So, that when you have the need to heat up your efforts, you are not starting from cold start.

Recruiting for talent is an everyday thing, whether you realize it or not.  Especially, for high-growth early stage startups.  So, you might as well put a process around it, to make it as efficient as possible for you, in good times (e.g., adding staff) and in bad (e.g., replacing staff).  Your bottom line profits will thank you, as your do your best to minimize any negative impact on your revenue stream!!

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Out With MBA's--In With Masters in Entrepreneurship

Back when I was in college (a 1991 graduate), an MBA was a heavily coveted degree.  The best business schools were heavily demanded, and graduating students would most certainly walk out with rich offers from the leading investment banks, consulting firms and big corporations.

But, in the last decade or two, we have seen a seismic shift in demand for an alternative business education, especially with the rising costs of education.  One that teaches the basics in starting your own business and being your own boss.  One that is tapped into local startup ecosystems with access to venture capitalists and startup incubators.  One that marries expertise in technology development, with startup business and marketing skills.  A new breed of business education under the banner: a Master's in Entrepreneurship.
Read the rest of this post in Forbes, which I guest authored this week.

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Lesson #158: Understand Your Brand Positioning (An Al Jazeera Case Study)

Back in January 2013, Al Jazeera, the Qatar based news agency, announced the launch of Al Jazeera America, a new U.S. based news agency covering news in the U.S.  They went on to recruit and hire a bunch of brand name U.S. newspeople (e.g., Ali Velshi, Soledad O'Brien, David Shuster) from the other big U.S. news desks (e.g., CNN, MSNBC).  The new channel launched in August 2013.

I thought that was a strange move by a brand most-known in the U.S. as the leader in news from the Middle East, with its "boots on the ground" coverage of events like the Afghanistan war and the political unrest in Egypt.  Did the U.S. really need another U.S. news desk, to compete with CNN, MSNBC, ABC, CBS, NBC, FOX and others, in exactly the same format?? 

Or, would it have been better for Al Jazeera to stay focused on its English-speaking channel, Al Jazeera English, working through the regulatory hurdles it has been met with in the U.S. to date, to provide an alternative perspective on all the happenings in the Middle East??  Apparently, I must not be alone in my thoughts, as the top three trending news items on the Al Jazeera America website, were all directly related to the Middle East on the day I researched this post (e.g., Egypt turmoil, Syria civil war, Al Qaeda capture).

Compare that to the BBC News here in the U.S.  They largely offer the same content in the U.S., that they offer in Europe, on their websites and on television.  Bringing a fresh European perspective to its U.S. viewers, as an alternative to most of the U.S. perspectives we are provided from the U.S. news desks.  They didn't try to enter the U.S. market as a direct competitor in the U.S. news business, which is what Al Jazeera America is doing.

I can understand why Al Jazeera did this.  The amount of Americans who consume U.S. news, is materially higher than the amount of Americans who consume Middle Eastern news.  But, the U.S. news brands have been built up over decades, on the shoulders of newsmen like Walter Cronkite (CBS), Peter Jennings (ABC), David Brinkley (NBC) and Wolf Blitzer (CNN).  The amount of marketing dollars it is going to take to get U.S. viewers to think Al Jazeera for U.S. news is going to end up an enormous sum.  And, even if the marketing and journalism efforts are top notch, will Americans really want to consume U.S. news from a company with a Middle Eastern brand positioning and name??  Time will tell.
 

Frankly, Al Jazeera America entered the U.S. market with the acquistion of Current TV, the failed viewer-generated news channel backed by Al Gore, Joel Hyatt, Ronald Burkle, Comcast, DirectTV and others, with distribution into 40MM cable households via Comcast and others.  Wouldn't it have been better to keep that name for their U.S. news efforts??  Or, if the brand was negatively tainted by its history, come up with a new name that would better resonate with the U.S. market??

Anyway, the point is, once your brand is set in the minds of consumers, it is very difficult to change that mindset.  As examples, imagine buying hamburgers from Pizza Hut, or bed linens from Barnes & Noble.  That is why Kentucky Fried Chicken, Dairy Queen and International House of Pancakes rebranded themselves to KFC, DQ and IHOP, respectively, to allow for a more flexible menu and to get over their historical brand positioning hurdles.  Furthermore, when picking a name, pick a name that will best resonate with your target audience . . . and, preferably, in their native language!!

Or, if you have a current brand positioning hurdle, and are looking to make a dramatic shift without changing your name, your efforts need to be dramatic to create a major buzz.  As an example, if Al Jazeera had stolen away one of the most respected U.S. news anchors of the major networks, like Brian Williams at NBC, at whatever price that would have cost them, those viewers that are loyal watchers of Brian Williams, would have helped them to more quickly build their audience and reposition their brand over a faster timeline.  Can you imagine the press that would have received, "Al Jazeera America Steals Brian Williams from NBC".  Not to mention, hurting their big competitor in the process.
 

I am sure that was their intent with their current roster of talent.  But, in my opinion, they either didn't aim high enough, or the biggest names in the industry turned them down (most likely for many of the reasons in this post, and them not wanting to take the risk or hurt their own personal brands in the process). 

ADDENDUM ADDED 1/13/16:  

Al Jazeera America announced they were shutting down its operations on January 13, 2016.  As you read above, I had a feeling they were doomed right from the start.  I feel like Nostradamus having originally published this article in October 2013.

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Comparing 'Shark Tank' to Venture Capital Reality

I am sure many of you have watched an episode of Shark Tank on ABC.  The show allows a startup entrepreneur to pitch their idea to a panel of five respected venture investors, who either like or don’t like the opportunity, and if they do, compete for the investment.  Many of the times I have watched the show, I end up cringing watching these poor entrepreneurs become the victims of undermarket valuations or a rushed decision which makes for “good TV watching” for the viewers at home, but bad business decisions for the company.  I wanted to compare Shark Tank to reality in the venture capital world, to confirm my assumption.

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

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Lesson #157: Consider Sharing Part-Time Executives Between Startups

The cost of a proven C-Level executive inside a startup can be around $250,000 per person.  When adding together a CEO, CMO, COO, CFO and CTO, that could total $1.25MM a year in salary alone, just for your five person senior team.  Most startups can't afford this kind of spend, until after they have raised a material round of venture capital or are driving material revenues.  Instead, they opt to go without that role filled, merge mutiple roles into one body or downgrade the talent level to a VP position to make it more affordable.

But, what is the most important driver of success for a startup?  The team!!  Exactly the thing startups should not be cutting back on.  So, how can a startup attract the high-power talent they need, at a budget they can afford?  How about sharing executives between startups.  You get the same brain involved with your company, on an affordable part-time basis.

As an example, let's say your business needs a CMO to set the high level sales & marketing strategies to drive revenue growth, and to help manage the junior-level marketing execution team doing the day-to-day work (e.g., search engine optimization, email marketing, social media management, creative development).  At, $250,000 per year for full time salary, plus 20% more for employee benefits and payroll taxes, filling this role is often unaffordable for a startup.  But, what if this executive only worked for you one day a week, for only $50,000 per year, saving you 80% in salary and related payroll taxes, plus not having to pay employee benefits for part-time workers.

This would work great for startups, to get high fire-power talent helping to grow your business.  Provided, the job can reasonably be fulfilled in one-day a week, until the business can afford full-time talent.  As long as you have junior team members doing the lion's share of the work in that department (e.g., bookkeepers managed by a part-time CFO), this model should work out well for you, especially if the part-time executive is open to transitioning into a full-time role after the company has the resources to afford it.  You end up getting an executive-level brain for a junior-level price.

But, why would a proven executive do this for you?  They typically wouldn't, if you were their only job.  But, if they were simultaneously filling this role for five startups, spreading their talent across five different companies on each day of the week, now they are getting paid a full-time salary that they are worth, and get the excitement of working on a diverse group of companies .  Not to mention, if they are getting a small equity stake in each company in this part-time role (e.g., 1%), they now have a diversified equity portfolio strategy, instead of putting all their eggs in one basket.

So, give this model some thought for your business.  And, if interested, pitch it to other startup peers of yours (preferably in the same industry), and maybe five of you can collectively hire the executive-level brainpower you desire to accelerate your business.  Or, if you prefer, companies like Red Rocket can play "matchmaker" for you, helping to source both the executives and the other startups to fill up their time.  So, feel free to call me, if interested in learning more.

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The Excubator--A New Type of Startup Incubator

Incubators/accelerators are starting to play a key role in the development of startup ecosystems throughout the U.S. and world. According to David Cohen, co-founder and head of TechStars, the #2 accelerator in the U.S. as ranked by Forbes, about one accelerator a day launches in the U.S. These programs provide resources that are critical to the success of any startup such as mentorship, connections, and capital.

Read the read of this article on Blackline Review's website.

Here is the great video that goes with the story:



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