Is a Startup Incubator or Accelerator Right for You?

One way to help get your business off the ground, is to leverage the mentorship and investor relationship benefits of a startup incubator or an accelerator. First of all, what is the difference between an incubator and an accelerator.

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

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[VIDEO] George Deeb Talks Employee Benefits for Startups on FOX Business

I had the pleasure of chatting with Lauren Simonetti at FOX Business today about startups, and whether or not they should offer employee benefits.  To hear what I had to say, you can check out the video interview at this link:

http://video.foxbusiness.com/v/3747600102001/should-startups-offer-employee-benefits/

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Why Big Companies Struggle With Innovation

As I have been doing startup consulting at Red Rocket, I have also had many executive conversations with several big companies. These companies were anywhere from $150MM to $25BN in revenues in size, so definitely well-established businesses in their respective industries. But, one thing had become perfectly clear in all cases: once a company gets to a certain size, it starts to lose its appetite for risk, across many facets of its business. And, the bigger the company gets, the more risk averse it gets, regardless of whether or not the company had innovation wired into its original DNA as a high-flying startup from years before. There are many reasons for this.

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

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A Guide to Hiring the Right Type of Salesperson for What You're Selling

Hiring good salespeople is one of the hardest things a company has to do. Typically, companies need to go through three salespeople, in order to find one who is successful with long-term closing power. That takes a toll on early-stage companies. They can only afford small teams and can’t afford mistakes that delay revenues down the road. Knowing these categories of salespeople will point you in the right direction when hiring for your business.

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

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Lesson #186: Marketing Automation Tools

As the name suggests, marketing automation is software designed the automate your marketing efforts. There are companies that power marketing automation specifically for B2B companies (e.g., Pardot, owned by Salesforce.com), specifically for B2C companies (e.g., ExactTarget, owned by Salesforce.com) and companies that try to power both with their solutions (e.g., Marketo, HubSpot, and Eloqua owned by Oracle), which can be tough to do, since the needs are so different between B2B and B2C companies. So, be sure to research the various features and functionalities therein, to see which platform, can best meet the needs for your business.

I just did a deep dive on this space for one of my clients looking for a B2B solution.  So, below is a summary of example types of functionality these marketing automation platforms offer.

Dynamic Content in Website/Email:  Personalize your web or email content specifically to the users' needs or interests, based on information about them mapped in your CRM.  Dynamic content can increase sales by 20% with more targeted messaging to the users' exact needs.

Smart Lead Capture Forms:  Require users to use corporate email address, not personal addresses where competitors may be fishing for information. Power walled content and white papers with a sign-up page.  And, automatically sync and de-dupe all contacts from here, with your CRM.

Progressive Profiling:  Allows you to slowly gather database information about a user over time, instead of scaring them away with a big survey form upfront.  Ask a couple different questions about them and their needs, with each different user session, that aggregates into the CRM over time.

Lead Scoring:  Determine how serious a lead is based on their website behavior.  For example, did they visit your pricing page or not?  How much time did they spend on your key web pages?  What is their work title in the CRM, and is that a logical buyer for your services?

Lead Nurturing:  Allows for automated email follow-ups to leads within the CRM, based on their user behavior?  For example, they didn't respond to initial email outreach, so send a follow up email.  Or, you know you sent a proposal and didn't hear back from them, send an automated email asking their reaction. This saves manual time for your sales team, keeping them focused on selling.

Real Time Alerts:  These will trigger automated emails to your sales team based on user behavior tracked with cookies.  For example, if one of your "hot leads" just came back to the website, let their matching salesperson know, so they can immediately check-in with them.

Dynamic Targeting:  Don't mass email all your users the same messaging.  Personalize and customize the messaging based on their user profile.  For example, send customers vs. prospects a different message.  Or, you know they already bought product A in your CRM, promote them product B.

Email Blasting Platform:  You no longer need a separate email blasting system, like Mail Chimp or Constant Contact, as all of that same functionality is built herein, typically with much deeper functionality.  So, now, both your email system and CRM will automatically be in sync for unsubscribes and other user activity.

Responsive Design Templates:  By powering your website with this platform, you can often automatically tailor the web experience to the platform the user is coming in from (e.g., PC, tablet, phone).

Auto Task Creation:  The system can create automated tasks for your sales team, based on data being stored in the CRM.  These tasks could be time-triggered or user-behavior triggered, based on whatever business rules you want in place and enforced.

A/B Testing:  Help your marketing department automatically test various creatives and various offers with small subsets of the list first, and then, pick the best performer to blast to the broader list.

Integration With Paid Search:  Many platforms allow you to tie your pay-per-click marketing activity on sites like Google to the system, to allow you to serve customized landing pages on your website, based on the keyword the user was searching for.

Integration With Social Media:  Many of these systems also offer integration with social media.  That could include tying users' social media profile information into your CRM.  Or, automatically posting target messaging to your company's social profile pages.

Reporting/Analytics:  Most of these tools come with sophisticated reporting and analytics packages to track success against objectives overall, by user and by employee.

Hopefully, this gives you a better understanding of marketing automation and the various functionalities the better systems offer.  But, worth mentioning, these platforms can get expensive, where licenses can start from around $1,000 per month for medium-grade solutions, and go up from there.  So, these tools are most-likely not a good use of limited resources for very early-stage startups, where budgets may not be able to afford it. But, these are a must-have to automate and optimize your marketing efforts, as soon as you can afford them.


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Lesson #185: B2B Marketing Mix & Budget Benchmarks

Back in Lesson #171, I wrote about the Basics of B2B Marketing.  This lesson takes the discussion to the next level, and talks about how much budget should you set aside, and more specifically, how that overall budget should be split up, across marketing tactics.

To help me here, I referenced data from the 2013 Tech Marketing Benchmarks Study from IDC.  The study basically suggested that most B2B tech companies spend around 4.5% of their revenues on annual marketing spend.  The average was 7.0% for B2B software companies, 3.9% for B2B hardware companies and 1.9% for B2B tech services companies.  So, in the example chart below, that would suggest a company shooting for $5,000,000 in revenues, would have budgeted $225,000, or 4.5% of revenues, on average.  That spend would cover both the media dollars and the team implementing such initiatives.

The study further goes on to recommend a mix of how your overall B2B marketing budget should be spent, based on the marketing mix reported by the comparable companies in their study.  I applied that mix to our $225,000 overall budget below, as a case study.  For your business, you would simply adjust the below chart for whatever revenue target you are shooting for, times the 4.5% average (or the other percentages suggested above), times the percentages by tactics recommended below.

For convenience, the first part of the chart looks at the mix by marketing type, the second part of the chart looks at the mix by marketing channel (e.g., digital vs. offline) and the third part of the chart details the suggested mix solely for the $76,500 digital marketing budget, in this case study.

Here is a link to the data from IDC's 2013 Tech Marketing Benchmarks Study, to which the above chart was based.

The above is not intended to be a perfect science, but more a rough ballpark to help point you in the right direction.  As an example, the mix of things you would do for a $1MM business, would be different than the mix of things you would do for a $10MM business. But, the above should help to get you close.

So, long story short, B2B revenues should not solely be driven by your sales team.  Your sales team needs support, in the form of leads coming to them from your marketing efforts.  And, the above, is a good way to help you calculate how much marketing budget you should set aside, and how best to spend that budget. And, thank goodness you are not a B2C business, where your marketing budgets could be 10-30% of revenues!!

If you need any help setting a marketing plan for your company, don't hesitate to contact Red Rocket.

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

Should Your Startup Offer Employee Benefits?

In years past, companies of all shapes and sizes needed to offer a good employee benefits program, with which to attract the best candidates.  That was even true for early-stage startups, since that was one of the hooks to get someone to leave their big company jobs and rich benefits packages.

But, a lot of things have changed over the years, and my feeling today is early-stage startups should not worry about offering benefits.  If you can afford them, great, offer them.  But, honestly, how many startups can really afford them, on their tight startup budgets. To help me frame the topic, I am going to focus a lot of my discussion around healthcare benefits, since that is typically the most demanded, and most expensive of all employee benefits offered.

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

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

Time and Luck: Know When Your Startup Should Dine and Dash

Timing and luck are key elements for success, but they are the hardest to identify and control. Here are the key drivers to consider when trying to optimize your odds of success.

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

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

Lesson #184: Does Age Matter for Entrepreneurial Success?

For years, people have tried to correlate an entrepreneur’s age when they launched their startup, with the ultimate success of that startup.  Many studies have been done on the topic, including reports by the Kauffman Foundation, Duke University and the Founder Institute, to name a few.  So, I am not going to try and rehash those studies.  But, the collective summary of their learnings was the average entrepreneur is 40 years old when they launch their startup, and people over 55 are twice as likely as people under 35 to launch a high-growth startup.  The average age of a successful startup with over $1MM in revenues was 39.  It was determined age was less of a driver to entrepreneurial success than previous startup and industry experience.

Out of curiosity, I cherry picked a few successful entrepreneurs, to see how old they were when they launched their companies.  The ages were as follows, from youngest to oldest:  Facebook (20), Microsoft (20), Apple (21), Google (25), Twitter (30), Amazon (30), Tesla (34), Oracle (35), Netflix (37),  Zynga (41), Walmart (44) and McDonald’s (53).  So, as you can see, it runs the full gamut, and although past experience is certainly a key driver for many of these entrepreneurs, it is not required, as seen in the success of Facebook, Microsoft and Apple.

I have been an entrepreneur most of my life.  I founded five companies over the years: (i) an odd jobs business at age 18; (ii) a collectible comic books business at age 20; (iii) an adventure travel website at age 29; (iv) a growth consulting firm at age 41; and (v) a startup excubator at age 44.

If I was going to summarize how my success was impacted by age over the years, I would say the following.  First, success was directly correlated with how many hours I invested in the business.  Second, success was directly correlated with how passionate I was about the business. Third, success is how you define it, as each one of these businesses accomplished the goals I set out for it, regardless of how big they got.  Fourth, my largest revenue business was one where I had no past industry or CEO experience, which is counter to the logic described above.  And, fifth, I would consider myself most experienced and worthy of making a startup bet today at age 45, with 15 years of CEO experience under my belt and tons of lessons learned along the way.

One of my old venture capital investors said he would never invest in a first time CEO, as they make too many mistakes along the way.  I think there is some truth in that, given the learnings gathered from first hand experience.  But, that does not have anything to do with age.  There are plenty of examples of entrepreneurs who have achieved success at very early ages, including Emerson Spartz who launched Mugglenet, the largest Harry Potter fan site with over 10MM unique visitors per month, at the ripe old age of 12.  You can read his story here.

As it relates specifically to age, I would say the following about myself.  My appetite for risk is clearly different at age 45 than it was at age 29.  As an example, you start thinking about things like not risking the kids’ college funds with your capital.  And, most of the best entrepreneurs are not afraid to throw all their chips onto the table, and bet big on their idea, regardless of other concerns.  And, my energy is clearly a lot less, where I am no longer burning the midnight oil.  But, I think that is offset by the fact, I am materially more efficient today, and know how best to invest my working hours to get an even higher return on that investment.

So, to answer the question posed by the title of this post:  does age matter for entrepreneurial success?  No, age in itself does not matter in trying to forecast entrepreneurial success.  But, experience does, and often times, that comes with age.  And smart entrepreneurs that lack experience, can offset that by surrounding themselves with experienced mentors.

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