[VIDEO] Are Investors More Likely to Bet on You or Your Idea?

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about whether investors are more likely to invest in you (the "Jockey) or your idea (the "Horse").  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful to you in learning how investors think, to help hone your pitches.  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.

Red Rocket's Best Startups of 2021

Red Rocket gets introduced to hundreds of startups each year, in the normal course of doing business, or via our involvement with various startup groups or events.  We wanted to honor the best of these startups that we met in 2021, in Red Rocket's 10th Annual "Best Startups of the Year".  This list is not intended to be an all-encompassing best startups list, as there are many additional great startups that we are not personally exposed to each year.  And, this list is not intended to be only for businesses that launched in 2021, it is open to startups of any age, that they or their advisors had some personal interaction with us in the last 12 months.  The business simply needed to have a good idea, good team or good traction, that caught our attention.  Congrats to you all!!

THE BEST STARTUPS OF 2021 (in alphabetical order):

Advisera (CEO, Dejan Kosutic) - B2B compliance courses, toolkits and software

Ainfluencer (CEO, Cyrus Nambaksh) - B2B social influencer marketplace

Boxabl (CEO, Galiano Tiramani) - B2C deliverable small home

Isodate (CEO, Greg Wheeler) - B2C video speed dating

KPI Sense (CEO, Will Cordes) - B2B financial reporting automation

LetsVidya (CEO, James Warren) - B2B virtual team building events

No Touch Orders (CEO, Chris Zenaty) - B2B cloud-based POS system for restaurants

Parknav (CEO Eyal Amir) - B2C street parking finder app

Podopolo (CEO, Melinda Wittstock) - B2C podcast social network

Prohibition Pops (CEO, Cornelia Mathis) - B2C alcoholic popsicles

RoboChef (CEO, Aravind Durai) - B2B robotic food preparation

Tickeron (CEO, Sergey Savastiouk) - B2C stock trading signals using AI

Wisdom Labs (CEO, Cory Smith) - B2B SaaS to reduce stress in workplace

And, don't forget to check out the 2012 winners, 2013 winners, 2014 winners, 2015 winners, 2016 winners, 2017 winners, 2018 winners, 2019 winners and 2020 winners, many of whom continue to be doing great things.


Congratulations to you all!!  Keep up the good work.


For future posts, please follow us at: @RedRocketVC

The Lucky 7 Steps to Channel Sales Success

More often than not, growing businesses use sales and marketing efforts to drive their revenues. Marketing basically uses advertising and other techniques to bring leads into the business. Your sales team either closes the leads handed to them by the marketing department (inbound sales), or they actively hunt new end-clients down with prospecting efforts (outbound sales). But there is another path that most companies don’t pursue, which could be the most effective for quickly scaling your revenues, and that is channel sales. This post will help you understand what channel sales are, and how best to set up your channel sales efforts for maximum success.

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

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

[VIDEO] George Deeb Discusses the 4 M's of Evaluating Startups

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about the 4 M's that investors use to evaluate startups:  market, management, model and momentum.  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful to you to in learning what key points to emphasize when pitching investors.  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.

Lesson #340: The Top 4 Things to Study When Hiring New Employees

I have been doing a lot of recruiting lately.  And, it is harder, more competitive, and more time consuming as ever.  It is clearly a job seekers market right now, which affords them the opportunity to take the best of competing offers, even if they have already accepted a previous offer, and "ghost" their new employer by never showing up on their first day, which is happening in record numbers and is not a cool move, at all  So, to save you all the tedious effort of having to go back and restart your recruiting efforts after making bad offers or hires, it is important you get it right in the first place.  I found these four key recruiting criteria have served me well over the years, and I wanted to share them with you.

1.  LinkedIn Skills and Endorsements

Duh, a candidate has to have the right skills for the job.  But, what they say about themselves, is materially less important than what third parties have to say about them.  Yes, a candidate can give you professional references from past employers, but you know they are going to cherry pick people that are going to say nice things about them, or don't want to risk the legal repercussions of saying anything negative about a candidate.  To address this issue, my favorite place to recruit is on LinkedIn.  Not only because they have a large B2B audience of users to tap into, but because as candidates apply, I can immediately see how third-parties have assessed that individual in the candidate's skills and endorsements section on their profile page.

There are two things to study here: (i) do the skills third parties think this person is skilled at, match up with how they are positioning their own skills during the interview; and (ii) how many people think they are qualified in those skills.  So, let's say your are looking for a candidate deep in search engine optimization skills.  Is SEO one of their top skills highlighted on their LinkedIn profile, and do a lot of people agree with that by giving that individual their professional endorsement for that skill.  The actual number of endorsements desired is subjective, based on how many LinkedIn connections a person actually has.  But, a person with 50-99+ endorsements for a skill, is a lot more vetted as credible for that skill, than a person with 0-10 endorsements, as an example.

2.  Longevity at Prior Companies

Nothing scares me more than a lot of job hops in a short period of time.  If you see a candidate with five jobs in five years, buyer beware!  Yes, sometimes a candidate is in the wrong place at the wrong time, and a one year stint is explainable, like the company had layoffs or the business was sold.  But, the odds of that happening over and over again is very unlikely.  So, if you see a resume where the candidate has stayed at least 3 years at every job they have had, that is a really good sign that former employers were happy with their performance and wanted to keep them on staff.  And, it is an equally good sign that those candidates were loyal employees to those employers, which you are hoping to hire for your business, to help lower the odds of their future flight risk.

3.  Will They Be Happy and Stay in the Role

Too often, you are studying a candidate from your own perspective--are they a good fit for the role and will they do a good job.  But, it is equally important that you study the candidate from their vantage point--what are they looking to accomplish with their career and will they be happy working at your company.  This category has a bunch of sub-considerations:

The Job Itself.  Will the candidate actually enjoy the job, is it in line with their desires and career aspirations.  Be wary of a candidate that is potentially going back down the corporate ladder (e.g., a former sales team manager, becoming a contributing salesperson again), as they may be using you as a stepping stone, until another management position becomes available.  

Company Profile.  Some people are better suited working for big companies, and the structure, formal processes and clear career paths that come with that.  Other people thrive in more nimble, entrepreneurial environments.  Make sure your candidate is best suited for the stage and structure of your business, and be sure they know all the good, bad and ugly about your business ahead of time, so they are 100% clear on what they are signing up for (so no unexpected surprises for them down the road).  Don't try to bury your "warts" during the recruitment process, make sure they still like you, warts and all.

Compensation.  How much did they make at prior jobs?  How much do they need to get paid to cover their costs and desired lifestyle?  How much is your salary offered in comparison?  Be wary of a candidate willing to take a material pay cut to join your company, as they may simply be using you to tide themselves over until they can find a higher paying job.  Worth adding, in tight job markets like this, don't be cheap--you may need to pay a little more than you normally would to stand out and land the hire.

Career Goals.  People earlier in their career have different goals than someone later in their career.  A younger worker may think that jumping from job to job, to help get higher titles and bigger compensation with each move, is the way to progress themselves.  Which means they may be a flight risk after a couple years.  On the flipside, someone later in their career has already built their career, and may simply be looking for their "last gig" before they retire, and will stick with you until that time, with them knowing how hard it will be for them to find a new job a their age.  So, make sure you do your investigation on where they see themselves in a couple years, to assess if you will need to replace them down the road.

4.  Do They Fit Your Culture

I like to think that new employees are joining an established "family".  They need to get along with all their "siblings" and know the cultural rules that have been put in place by the "parents".  If you don't think the person you are considering will "play nice" with their fellow co-workers, or will bring something that disrupts the "good vibe" in the office, the hire will never work, for you, your other employees or the candidate.  Be sure not to upset the apple cart with any hires, otherwise you risk all your other employees looking for the door, and you will end up with an even bigger recruiting problem on your hands.

So, hopefully, you have a better understanding of where to focus your recruiting investigation efforts, to not only make smart hires, but ones that will stay with your company and won't have you wasting your time recruiting over and over again with a "revolving door" of workers.  Good luck with your hiring!

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

[VIDEO] George Deeb Discusses the 13 Unlucky Reasons Startups Fail (on ASBN)

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about the unlucky 13 reasons startups fail, and how to prevent them in your business.  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful to you in avoid the mistakes made by many other companies before you.  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.

Don't Be the Smartest Guy in the Room

 

I have been exposed to many interesting business leaders over the years. The difference between the average ones, and the great ones, was how they viewed themselves, and the role they thought they needed to play within their company. My conclusion: the persons that saw themselves as the smartest guy (or gal) in the room, who needed to control all the decision-making in the company, are the ones who achieved the least success, and ended up alienating their peers the most. Allow me to explain further, so you don’t repeat these same mistakes.

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

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

[VIDEO] George Deeb Discusses Pitching Venture Capitalists (on ASBN)

 

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about how best to pitch a venture capitalist.  I thought this "Tip of the Day" short video turned out great, and I wanted to share it with all of you, to see if it can be helpful with your own fund raising efforts.  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.

Lesson #339: OKRs Unite Companies to Achieve Goals

 

Goals setting is one of those business processes that is really an art. When it is done really well, it can unlock huge performance increases and propel your business to new heights. I was recently introduced to Matt Roberts, the founder of London UK based ZOKRI, whose software helps fast growth companies use Objectives & Key Results (OKRs) driven goals and agile working practices to provide clarity on how growth will be delivered. He is an expert in this space and was gracious enough to allow me to pick his brain to assist me in writing this post.

Why Do Goals Matter? 

The research is clear. Goals serve to direct our efforts towards relevant activities and away from irrelevant ones. Put another way, goals are there to make sure we are doing the right things everyday. The activities that will make a difference.

There are other insights in the research, as well, though. The most important recurring theme is the need for goals to be a challenge to achieve, to push the business forward to new heights. This is why these "harder to hit" goals matter:

• Harder goals are proven to increase our focus and prolong our effort
• Harder goals encourage learning, collaboration and innovation - when goals are easy we don’t need to try as hard

If goals really matter to performance management then it is worth exploring what good looks like to start a process of inquiry and improvement. This post has been written to:

• Introduce the basics of OKRs as a way of setting goals - it’s a leading goal setting framework
• Share common OKR failure points so you can avoid them
• Share examples of OKRs that align and would unite a company and teams
• Emphasize the importance of committing to a update and discussion cadence
• Encourage you to go all-in if you feel that more aligned and ambitious goals and agile execution are for you

An Introduction to OKRs

OKRs are the go-to goal setting framework for start-ups and scale-ups, and they have been around for a long-time. In fact, they can be traced back to a framework called Management By Objectives (MBO), which was used in the 1970’s. Since then, they’ve become a mainstream way of setting goals and managing growth with Google being the most famous of the companies that use the framework.

There is a simplicity to OKRs that is really attractive. Starting with the fact that they have just two entities:

• An Objective - describes the Mission you want people to sign-up to and why
• Key Results - measure the outcomes you are trying to get to. 

Other attributes OKRs have that make them different to other methods like SMART goals are:

• Frequency of discussions - OKRs are designed to be discussed frequently and widely
• Aligned - OKRs are set at the top in the form of Company Objectives and aligned with by teams, both departmental and cross-functional.
• Transparent - OKRs are designed to be shared across teams and not hidden away in silos.

However there are nuances to OKRs that if not understood can cause confusion and even make their introduction a failure that it’s worth understanding.

Common Issues with OKR Implementations to Avoid

Like with the introduction of any new system or way of working, some of what you do and is being asked feels alien or even counterintuitive at first. The most common issues are:

• 100% is not the only definition of success, in fact, the level of ambition and how you work towards the goal often matters more than the final outcome.
• Tasks not outcomes are used for Key Results - usually because teams are not good or comfortable talking about measurement.
• OKRs implemented well are talked about all the time and weekly priorities are constantly aligned and re-aligning execution around them. If agile ways of working are new, OKRs can still become a set-and-forget goal.
• OKRs are expressions of the most important objectives being targeted. They are what teams are being asked to align with and focus on outside their business-as-usual activities. The issue can be that teams describe their roles and everything they are doing as OKRs, so everything and nothing is most important.

How you avoid these issues is with education, coaching and reinforcement of what good looks like, and leadership. 

OKRs that Can Unite a Whole Company

OKRs, when used well, have the ability to not just be a way of setting goals in traditional teams like Sales and Marketing, they have the ability to unite teams around Company goals and encourage the creation of cross-functional teams. Here is an example of a Company Level OKR that could unite and focus a start-up:

Achieve product market fit and be easy to invest in

As measured by:

MRR increases from X to Y

Churn has reduced from X to Y

LTV : CAC Ratio is over 4

NPS is 80+

Teams would be asked to align Objectives with this OKR. Which is what will be discussed next.

It’s easy to see how Marketing and Sales could work together on top, middle and bottom of the funnel OKRs and target the MRR and CAC metrics. What is often not done as well is Product, Data Science and Engineering OKRs.

If these teams go it alone they are highly likely to create OKRs that target improvements in processes and systems that improve their team performance. For example, it’s common for Product Managers to create OKRs around talking to more customers, or Engineering to reduce the bug count or increase story-point velocity.

If you got these teams together and asked them a different question such as ‘how can your team be improved’ and asked everyone, ‘how could the product be improved to help customers?’

To be clear, you can also have a team OKR, but having an OKR that is targeting the customer and the value they need you to provide is more important.

For example, what if your product was hard to learn and it’s stopping you from getting scale. The value you need to provide is:

Make learning our product really easy

As measured by:

80% of new sign-ups complete all 5 engagement tasks

50% of new users invite 5 colleagues to the app

To achieve this you’re going to need Product Management, Engineering, and the UX / Design team to work together, not working in separate silos.

Tracking & Reporting OKR Progress

What then follows on from this is a planning session where Initiatives are proposed, a backlog is created, some are moved to ‘in progress’ and execution begins.

Every Monday the teams propose priorities for the week, share problems, and review related metrics that would support the OKR like Sign-ups Volume, Weekly Average Users.  On a Friday, wins are shared.

This focused agenda and cadence is what keeps the teams connected to the OKR and helps its achievement, and is what OKR software like ZOKRI supports.

Software matters because spreadsheets not only suffer from ‘set and forget’, they are not good at managing the constituent parts of goal and executional conversations, both when teams are together, and when people are working asynchronously.

The reality is you want and need the reminders, alerts, input structure, workflows, integrations, data views and reports. Not having them reduces goal and execution focus, or increases the time and management overhead.

The other part of the argument is that you want to be breaking down the silos not supporting them. Having a friendly easy to navigate common system that shows anyone what teams are trying to accomplish, their progress and priorities has huge advantages. For example, it helps decisions in teams make sense, especially if what is being done conflicts with what you need, as goals provide context for the work being prioritized and committed to.

Mastery is Not Hard But Needs Commitment 

Mastering OKRs is not hard but does take commitment from the top and an understanding that changes in how you plan and collaborate takes time as you are acquiring new skills and embedding new behaviors. The destination and journey can be a rewarding one as it can unite your whole company around a common vision and set of goals. If you want a deeper dive on this, Matt shared this free guide on OKRs which may be helpful.  If any of you need help with setting business goals, call us at Red Rocket.  If any of you need help with measuring and achieving those goals, call Matt's team at ZOKRI.  Matt, thanks again for your help and inspiration here.  

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

[VIDEO] George Deeb Discusses Paths to Revenue Growth (on ASBN)

 

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about the various paths to revenue growth.  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful with your own growth efforts.  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.

Lesson #338: The 7 Steps to Managing Your Advertising Agency

In my recent post, we learned how to select an advertising agency, with the best skillsets needed for your exact business challenges.  In this post, we are going to learn how to best manage that agency, to ensure both parties are in alignment on key goals and performance metrics.  As you are going to learn, it is not as simple as hitting “autopilot”, crossing your fingers and hoping they get it right.  You will need watchful eyes along the way, helping to get your agency back on the desired track, when they start to stray off course.  Let’s learn more.

1. Set the Business Goals

Everything starts with the business goals.  Your agency needs to be perfectly clear on the budgets they have to work with and what you are defining as success from the campaign.  Sometimes that is upper funnel targets, like growing your overall brand awareness metrics.  But, more often than not, it is lower funnel targets, like hitting a desired revenue level and matching return on ad spend (ROAS) or cost of acquiring a customer (CAC).  It is very difficult to manage for everything at the same time, so set a very specific goal to shoot for.  As an example, a ROAS in the 5x-10x range, or a CAC not to exceed 33% of your average order value (AOV).

2. Set the Target Customers

Every business is different.  If you are a B2B company, you are typically targeting specific companies that would be logical buyers of your products.  Or, more likely, specific employee roles, within those businesses.  For example, if you are selling a social media marketing software, you may be reaching out to a Chief Marketing Officer, or a Director of Social Media, at those target companies.  Understanding that not all companies are created equal.  Maybe you are targeting employees at big enterprise scale Fortune 500 companies, or you are going after employees of small and medium size businesses that can better afford your products.  So, lock down your target company size and the target roles of employees inside those companies, understanding you may have more than one target persona to go after.

If you are a B2C company, you are most likely going after a particularly customer demographic that would be most interested in your products.  Is that men or women?  Is it high income, well-educated people, or more mass market?  Are they aged 21-34 or 55 plus?  Does geography matter, if so add your target states or cities of residence?  And, if you can layer in persona information from various psychographic data sources, that is even better.  For example, is your customer more of a “fitness fanatic” or an “arts and crafter”, to enable media targeting at that “interest” level.  The better you understand your current customer base, the easier it will be to identify the right look-alike targets to go after.  Again, there may be more than one persona here.

3. Set the Media Mix

Mastering your marketing funnel and media mix is a more in-depth conversation that I have written about in the past.  But, at the highest level of understanding, your marketing funnel has three parts: (i) upper funnel, driving awareness of your brand; (ii) middle funnel, driving consideration for your products; and (iii) lower funnel, driving transactions and revenues for your business.  And, there are different media tactics to consider for each stage of the funnel.  For example, maybe you would consider television media for upper funnel, social media for middle funnel and search engine marketing for lower funnel.  That’s why understanding your goals is so important, so we use the right media to help you hit those goals.  So, at this stage, you are deciding how much of your budget to put into each funnel stage (e.g., 20% upper, 30% middle and 50% lower funnel), which tactics for each funnel stage (e.g., social media for middle funnel), and which specific publishers for each tactic (e.g., spend the social media budget evenly between Facebook, Pinterest and Twitter). 

4. Set the Analytics and Reporting

The best advertising agencies these days are as much technology and analytics businesses, as they are creative and branding businesses.  They will make sure your website and campaigns are set up in a way that most all clicks, contacts and transactions can be tracked back to their originating source, including assigning cross-channel marketing attribution metrics.  And, they will build the dashboards that will enable you to easily see which marketing efforts are working towards hitting your desired goals, and which ones are not.  So then, they can easily “dial up” or “dial down” any winning or losing tactics within the campaign.   It is important that the key business goals are being measured in these reports, by funnel stage, by channel, by publisher, by campaign, by creative, etc.  Make sure you are getting these summary reports sent to you on at least a weekly basis, so you can track their progress and make changes quickly, before you waste a lot of money on a “losing” campaign.  And, make sure you are using the right metrics at each funnel stage (e.g., CPV upper funnel, CPL middle funnel and CPA lower funnel).

5. Set the Communications Frequency

Your communications with your agency depends on the size of your budget and how often things are changing.   If it is a relatively small budget and the campaign is largely optimized and static in terms of changes, maybe you can get away with monthly meetings.  If it is a large budget, the campaign is still being set up and lots of testing and changes are being made, more likely you will need weekly meetings with your agency.  But, meetings will be needed for communications both ways.  You will want to make sure the campaign is achieving your goals, and your agency may need guidance from you for anything they are not clear on, or if there is a “fork in the road” that needs your input.

6.  Set the Roles & Responsibilities

Think of setting up multi-leveled roles and responsibilities at both your company and your agency.  Those levels most likely include: (i) executive oversight (e.g., a CMO in your business and a Head of Strategy at your agency) that is not too involved in the day-to-day, but is being kept abreast of the big picture issues; (ii) day-to-day project leadership and management (e.g., a VP-Media Buying in your business and an Account Executive at your agency), that are “quarterbacking” their subordinate teams and keeping everyone on task and on plan; and (iii) the teams in the trenches living and breathing the campaign and the resulting data (e.g., a Social Media Marketing Manager at your company and a Head of Social Media at your agency).  Make sure you have the appropriate teams set up at both your company and your agency, to optimize at each level—strategic, planning and execution.

7.  Rinse and Repeat

Just because you followed the above process doesn’t mean your job is done when you have completed the six steps above.  This is an iterative process—every quarter you should go back to step one, to restudy everything and adjust for any changes in business goals, customer learnings, media learnings, etc. and then reset the campaign in steps two through six for the new learnings.  Plan for quarterly campaign review meetings with your agencies and internal teams at that more strategic level.

Closing Thoughts

I know this sounds like a daunting process, but it is required to make sure you don’t unnecessarily flush any of your marketing dollars down the toilet.  A strong, well-optimized relationship with your advertising agency could be the difference between sales and profits being flat this year, or up 100%.  If you need any help here, don’t hesitate to reach out to me, as I have worked with many agencies in my past, and know the ones who are currently “best of breed” where the rubber hits the road—with smart teams driving a high ROI on your investment.

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

How to Increase Your Marketing ROI Through Customizations and Personas

 

The biggest mistake most first-time marketers make is attempting a “one-size fits all” approach to their marketing efforts. They launch one campaign, sent with the same message, to all people. That may work for something that has mass appeal, across all demographics (e.g., promoting ice cream). But, for most of us, we are trying to laser into a very specific target customer. Or, more likely, target customers (plural), each with a different focus. That is when you need to build different target customer personas, segment your lists and customize your marketing messaging to each of those different sub-segments. Allow me to explain in these two examples, one for a B2C business and the other for a B2B business.

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

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

Lesson #337: The 14 Characteristics of a Fundable Startup CEO

I recently stumbled on this great article below from my good colleague, David Gardner (pictured), the founder and General Partner at Co-Founders Capital, one of the most active early-stage venture capital firms in the Southeast, based in the Raleigh-Durham area.  David was kind enough to let me share this article with all of you startup CEO readers.

What I liked about this article was it was a clear way to score your performance, which isn't easy to do as a CEO, typically with no boss to help critique you.  Whether you are doing it with the lens of what an investor is looking for, as detailed below, or whether you are doing it for yourself, just to see if you are doing a good job, everyone needs to be accountable for their actions, including the CEO!!

If you scored perfectly on the below categories, you would earn a total score of 70.  If you were average in each of these categories, you would earn a score of 42.  And, since nobody is perfect and you want to be materially better than average, I would say shooting for a score of 56 or better is where you want to end up.

So, after reading the article, score yourself, in an honest and self-reflective way, and see how you are doing.  If you are doing well, congrats, keep up the good work and you should have no problem fund raising.  But, if you are not, it's time to sharpen your skills, especially if you plan on raising venture capital.  

Thanks again, David, for sharing your wisdom with our readers.

___________________________

Being a CEO is a tough job especially the first time someone has to wear that hat.  Constructive and actionable feedback can be hard to come by.  It can also be difficult to know how well you are doing and what areas you might need to improve upon when you don’t have a boss observing you firsthand. You can only improve what you measure and CEO performance is no exception to that rule. 

To help our portfolio CEOs, we have developed the following evaluation criteria.  It covers some of the things we look for in a solid operator and leader.  This annual evaluation is meant to be completed by the CEO, their direct reports and the board members in an anonymous 360 aggregated review.  It’s purpose is honest feedback to facilitate awareness and constructive discussion. We ask each reviewer to rate the CEO being reviewed in each of the following 14 categories, on scale from 1 to 5 scale, as defined below:

1. Very deficient and detrimental to the organization
2. Needs a lot of improvement
3. Base level of competency
4. Meeting or exceeding expectations
5. An exceptional strength

1. Transparency: Our CEO is genuine and forthcoming with all information significant to the success of the business.  Bad news is delivered as is and not sugar coated.  Good news is not exaggerated.  Facts are presented dispassionately for what they are.  Our CEO shares more key metrics and data trend lines than anecdotal stories.  Board members are provided with the timely and accurate information they need to asset the business and help the CEO make informed and balanced decisions.

2. Leadership:  Our CEO is trusted by the team and other stakeholders to make the informed and necessary decisions required to keep the company moving forward.  Staff members know what is required of them at all times and how their efforts and performance metrics contribute to overall company goals and objectives.  Our CEO is demanding but fair.  Team members, investors and advisors feel listened to and that their opinions and ideas are heard and help to shape our CEO’s final decisions and policies. Team members trust their CEO to do what he or she says.  Our CEO respects the chain of command and does not circumvent his or her managers.  Our CEO is building a positive company culture that people want to be a part of.   Our CEO is always bringing organization to chaos as our venture grows.

3. Communication:  Our CEO can articulate the company’s mission, differentiations, and value props to all stakeholders and potential shareholders including employees, customers, prospects and investors.  Our CEO’s communication is clear, concise and convincing.  Our CEO can see things from an audience’s perspective and handles objections in a non-offensive manner.  Our CEO can speak in terms of value propositions that are relevant to his or her audience.  Our CEO can walk a person logically from where they are (point A) to point B when explaining complex matters.

4. Management:  Our CEO is a good manager.  Team members know what is expected of them, how they are doing and how they are evaluated.  Direct reports are never surprised when promoted or fired.  Objectives are clearly defined as are job descriptions, best practices and procedures.  Direct reports feel confident that their CEO is striving for their individual success as well as company success.  Our CEO meets regularly with the management team as a group and each direct report individually to review progress, lend assistance and address concerns.  Our CEO does not have excessive employee turnover.  Our CEO is a good trainer who takes the time required with new team members to make sure they can do all aspects of their jobs.  Our CEO holds direct reports accountable and will decisively terminate consistently poor performers.

5. Judgement:  Our CEO demonstrates good judgement.  Our CEO is calculating and practical gathering all of the information and opinions available before making important decisions. Our CEO does not make rash uninformed decisions or chase every shiny object.  Our CEO will take calculated risk using appropriate risk/reward analysis.  Our CEO always has a contingency plan in mind.  Our CEO sets reasonable timelines and goals.  Our CEO is data driven and not afraid to pivot when necessary.  Our CEO is thoughtful and dispassionate in decision making testing hypotheses and tactics before committing major resources or time to projects.

6. Time Management:   Our CEO manages his or her time wisely and efficiently.   Daily tasks and projects get appropriate amounts of time based on their importance.  Our CEO projects a consistent and contagious sense of urgency.  Our CEO does not waste time but treats it as his or her most precious resource.  Our CEO alots his or her time in a manner always mindful of the opportunity costs that may be involved.  Our CEO is not a perfectionist and knows when 80% is good enough.  Our CEO does not avoid or short-change tasks that he or she doesn’t like to do.  Our CEO keeps a written personal task list and is constantly reprioritizing it.  Our CEO knows when to go slow and when to go fast.

7. Fundraising:  Our CEO ensures that our company does not run out of money and stays well ahead of any cash shortfalls in full realization of the time it can take to raise capital.  Our CEO is the chief fundraiser for the company and always mindful of our runway, burn and cash-out date.  Our CEO keeps investors and prospective investors informed.  Our CEO understands which types of investors and fund managers are a good fit for our company based on their check size, investment thesis, expertise and geographic preferences.  Our CEO maintains and can defend a reasonable forecast and key assumptions.  Our CEO can deliver a convincing investor pitch deck and plan.  Our CEO inspires confidence.

8. Recruiting:  Our CEO is good at sourcing and recruiting the talent needed to grow our company.  Our CEO makes recruiting a regular priority each week and does not wait until the company is desperate for help before starting the recruiting process.  Our CEO conducts detailed interviews and reference checking.  Our CEO can communicate a vibrant company vision and culture where new hires want to work.  Our CEO is not afraid to hire those more talented than himself or herself in any given area.

9. Strategist:  Our CEO possesses a deep understanding of our chosen industry and market sector.  Our CEO has a full appreciation of the subtleties of our space, competitors and how to position our solution to fit into each customer type and business partner’s perspective.  Our CEO knows when to partner, when to buy and when to compete head on.  Our CEO is always looking for business development opportunities and partnerships leveraging the technology, customer  base or salesforce of others.

10. Negotiating:  Our CEO understands and utilizes basic negotiating techniques.  Our CEO is not afraid to push back on or walk away from a one-sided deal.  Our CEO takes the time to understand another’s position, constraints and goals so that he or she can propose creative solutions.   Our CEO rarely pays full price.  Our CEO is always willing to lose a battle if it means winning a war.

11. Maturity:  Our CEO is always the adult in the room.  Our CEO is not intimidated by those with skills and ideas that are not his or her own.  Our CEO is assertive but not overbearing.   Our CEO is comfortable admitting when he or she has made a mistake.  Our CEO takes into account the human element and emotions in every situation.  Our CEO is always professional.  Once a decision has been made our CEO expects full compliance and will not tolerate insubordination in any form.  Our CEO is not given to emotional outbursts or knee-jerk reactions.   Our CEO cares about more than just the success of the business.   Our CEO encourages the team to take risks and try things. Our CEO does not penalize team members who try creative things that don’t end up working out.

12. Resourcefulness:  Our CEO seeks out and utilizes available resources.  From advisors, key customers, grants, publications and reports to competitive sales collateral and market analysis, our CEO stays abreast of that which might be useful in accomplishing the mission at hand.  Our CEO is coachable.  Before starting a new initiative or implementing a key strategy, our CEO taps available contributors and data.  Our CEO avoids an echo chamber and solicits outside opinions.  Our CEO does not shoot from the hip, make decisions in a vacuum or simply buy his or her way out of a problem or into a quick solution.

13. Financial Management:  Our CEO has a complete understanding of the business model and which assumptions and key metric as most important to the business.   Our CEO can spot trend lines and how they impact the business.  Our CEO is constantly discussing key assumptions with those involved and tweaking them to produce the most accurate forecast possible.  Our CEO understands the impact of debt and increasing the burn rate and never waits too long to right-size the business.  Our CEO knows when to grow faster and when to slow down and proceed more cautiously.  Our forecast is continuously becoming more accurate.

14. Administrative:  Our CEO consistently ensures that required administrative tasks such as submitting monthly financial statements and updated forecasts are submitted to board members.  Our CEO fulfills written and legal obligations to maintain D&O and key-man insurance.  Our CEO schedules and conducts all board meetings and annual shareholder’s meetings on the required cadence.   Our CEO schedules required meetings well in advance and sends board decks, option grant proposals, legal and other documents for board member review well in advance of board meetings.

For future posts, please follow George on Twitter at @georgedeeb and follow David at @StartUpHats. 

Lesson #336: How to Find the Best Advertising Agency for Your Business

If you are investing material dollars in marketing campaigns, more often than not, you have considered engaging, or have engaged, an advertising agency to assist you with those efforts.  Those decisions whether or not to manage your marketing campaigns with in-house teams vs. third party agencies are typically not easy decisions.  And, if you decide to outsource to an agency, the selection process can be overwhelming, with the thousands of agencies out there to choose from.  This post will help make those decisions easier for you.

In-House Teams vs. Third Party Agencies

The decision to manage campaigns internally vs. externally often comes down to the following things: (1) the size of your media budgets; (2) the complexities/channels of the campaign; and (3) the skills of your team and the analytics tools you have to work with.  Over time, my leaning on this decision has changed.  I used to want to run everything internally, to save the costs vs. an agency (which can often be 15-20% higher including their fees).  And, I used to want to find disparate agencies with a specific expertise (e.g., one agency for search engines, another agency for social media).

But, has the advertising industry has evolved over time, my opinion on this topic has shifted 180 degrees.  Today, I am a proponent of outsourcing this work to an agency, and preferably one cross-channel agency that can manage all desired channels through one partner.  The reason for this are: (1) the agencies have materially evolved from being single-channel experts to multi-channel experts; (2) strategically, it is better to have all strategies and budgets managed centrally, to easily shift dollars between channels and get cross-channel attribution tracking all in one place; (3) the optimization technologies the best agencies are using, and their direct relationships with Google, Facebook, Amazon and others, are heads and shoulders better than anything your internal team would be doing; and (4) finding a team of good internal marketers is hard to find and manage, as opposed to leaning on an agency’s team and their recruiting and training processes.  Especially since the techniques that work best each year can rapidly change, and you want to benefit from the most recent learnings (not hire someone with yesterday’s playbook).  So, don’t be a penny wise and a pound foolish here, as a good agency should more than cover their additional fees, with materially higher revenue performance from their efforts than you most likely could generate with an internal team.

Step 1:  Identifying the Best Potential Agencies for Your Business

All agencies are not created equal.  Certain agencies are expert in B2C and other agencies are expert in B2B.  Certain agencies are full-service agencies handling all services, and other agencies handle certain specialty solutions (e.g., branding, creative, television, B2B lead generation).  Some agencies are set up to handle huge budgets, and other agencies are set up to handle smaller budgets.  So, the first step is to have a rough idea of your budget and needs (e.g., prepare to spend 10-30% of your revenue target on sales and marketing activities), and the next step is to identify the agencies that are best suited to support those budgets and needs.

For purposes of this post, let’s assume you are like most B2C marketers and you need a good performance marketing agency.  That is an agency that: (1) can handle most of your digital advertising needs (e.g., search, social, affiliates, commerce, display, digital video, connected TV); (2) have a suite of sophisticated technologies, reporting and tools to optimize the campaigns across channels; and (3) have an ROI first mentality, shooting to drive clearly attributable transactions from the campaign at a profitable return on ad spend (ROAS).

With that being the goal, go to Google and search for “best performance marketing agencies”, as an example.  You will stumble on a bunch of websites like Capterra, G2Crowd or other bloggers that have ranked the agencies based on customer reviews or their research on the subject.  Or, you will find research firms like Forrester that interviewed the best agencies and ranked them, as seen in this chart, as an example.  That will help get you started.  But, you should also talk to your peers at other similar companies, to see who they are working with.  Or, get recommendations from other colleagues.  And, if any agency says you are too small of an account for them, ask them who they refer business to for smaller accounts, as they will have a good idea of the best players in the space.  This process may result in a list of around 8-10 agencies to consider.

Step 2:  Create a Questionnaire and Interview The Best Targets to Ensure a Good Fit

Just because you think they are a good agency for you based on preliminary research, doesn’t mean they really are a good agency for your exact needs.  You need to ask probing questions of them, like: (1) what is your minimum media budget, are we large enough to be a material account for you; (2) what are your fees, can we afford your services (keeping the fees under 10-20% range, depending on media budget); (3) what is your industry expertise, do you have good references from similar companies like ours; and (4) are you working for any of our competitors, do you have any conflicts we need to worry about.  This part of the process will narrow down your list to around 3-5 truly best targets.

Step 3:  Invite the Best Candidates to Pitch Their Services

The pitching process will start with the agency better learning your budgets, history and needs, and most likely will involve them taking a closer look at your current campaigns in Google Ads, Microsoft Ads, Facebook, Google Analytics, etc.  After 2-4 weeks, they should be have completed their research and planning, and be ready to present their proposal.  In those presentations, pay attention to things like: (1) the quality of their team (and making sure the team on the pitch is the same team that will be on your account, to avoid “bait-and-switch”); (2) their fit with your business and team (are they nice to work with and share your common values, as you will be spending a lot of time with them); (3) the quality of their strategic-level ideas (did the presentation match your guidance of them and your desires); (4) their proposed media mix; and (5) the quality of their optimization tools and cross-channel reporting capabilities (because in today’s world, the best agencies are more technology companies than anything else).

Step 4:  Pick the Front-Runner

Once you pick your favorite agency from the presentations, it is time to take the next step with them.  That will include things like: (1) speaking to their references (to ensure what they pitched and what they delivered were in line, especially in terms of team quality and happiness with efforts); and (2) negotiating the agreement and statement of work (to make sure both parties are largely in alignment on the legalese and the plan).  This can take several weeks to complete.

Step 5:  Formally Award the Winner

Congratulations, you have formally engaged your advertising agency.  Hopefully, the above process enabled you to find a really great partner for your specific business, that can help propel it to new heights.  Now starts the busy work of transitioning services from your old agencies or team members, sharpening your pencil on the campaign strategy and media mix modeling, and setting up all the management processes (e.g., timing of weekly meetings, desired KPIs on daily/weekly/monthly reporting).  This part of the process is as important as the agency selection is, and will help tee up the campaign for maximum success.  Now comes the hard part:  executing the winning campaign that hits your desired metrics, and managing your agency on a weekly basis (which I will cover in a future post).

A Couple Useful Tips

Here are a couple things to think about.  If you can, try to get part of their fee in a pay-for-performance structure.  So, maybe half of their fee is fixed, and the other half of their fee is incentive based.  And, keep that incentive uncapped, the more success they drive for you, the more fees they can earn.  And, do your best to cap your total fees (e.g., not to exceed a certain percent of the media spend), as these contracts can be very complicated and confusing, with all kinds of fees which can add up quickly.  Especially fees around programmatic buys or the DSP platform.  If they can find high quality media in other ways, it may save you money here, so push them for direct buys with publishers or leverage their bulk buying power, where you can.

Concluding Thoughts

Hopefully, we have taken the daunting process of selecting an advertising agency and simplified it into an easy step-by-step guide—one that will result in a well-experienced agency to handle your specific needs, both in terms of team and tools.  The relationship between your business and your advertising agency is one of the most important relationships you will have; they are the team that will dictate how quickly you will scale your revenues, hopefully on a profitable basis.  And, in today’s high-tech digital world, they are as much a technology partner, as they are a media-buying partner, so pay special attention to their capabilities in this regard.  With a little luck, now you are “off to the races” toward marketing success and profitably scaling your business.

 

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

[VIDEO] George Deeb Discusses Maximizing ROI on Your Marketing Investment (on ASBN)

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about how to maximize ROI on your marketing investment.  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful with your own marketing efforts.  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.

Red Rocket Blog Passes 2,000,000 Reads

Well, it is only fitting, that in the same month the Red Rocket Blog hit its 10th year anniversary, the all-time blog reads passed the 2,000,000 mark!!  Thank you, thank you, thank you, for your continued readership after all these years.  We will do our best to continue to bring you useful how-to lessons and interesting small business case studies for you to learn from, in the years ahead.  And, as always, don't hesitate to reach out if there is anything we can do to help you with your growth strategy or execution needs.

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

Happy 10th Anniversary Red Rocket Blog!!

When I wrote my first blog post back in February 2011, who would have ever imagined it would have grown to over 335 how-to lessons for entrepreneurs, three published books and over 2,000,000 online reads.  For those of you that read the content to educate yourself on your own, I hope you have found them to be helpful in growing your businesses (would love to hear any success stories there).  And, for the dozens of Red Rocket clients that originated by stumbling on one of our blog posts in the search engines, it has been my pleasure working with each and every one of you, and I very much appreciate our relationships.

Generating fresh content for over 10 years was quite a feat and labor of love, as most long term bloggers can attest.  We will continue to pump them out, as long as there are new interesting lessons or case studies to share with you.  Which pretty much means there is still another ten years of content in front of us.  See you all at lesson #700 at that time!! 

Thanks again for all your continued support and readership.  We are truly humbled.

For future posts, please follow us at: @RedRocketVC or @georgedeeb.

Lesson #335: The Death of Search Engine Optimization

I have been a digital marketer for over 20 years now, which seems like an eternity at this point!  Google has always been a staple of any good digital marketing strategy, especially for search engine optimization (SEO), to attract free organic traffic based on the quality of the content on your page.  But, when we recently started to see our SEO traffic start to decline, we asked our SEO consultant to investigate what was the root cause, and he said it was due to a recent Google Search page redesign, moving the free organic links further to the bottom of the search results page.  What was more troubling, was when I asked him how best to fix the situation, he said, “start spending more money advertising with Google, to get back up to the top of the page”, which was a very strange thing for an SEO expert to say, as he isn’t needed in that scenario.  This means SEO as a strategy for ecommerce driven companies is potentially dying, and paid search marketing has become your primary way to gain an audience through the search engines, at least through industry leading Google.  Allow me to further explain.

A Quick History of Google Search

Ever since Google hit the scene in 1998, Google has been a staple of any good digital marketing strategy.  Originally, it was simply having a good SEO plan, to help you go up the free organic rankings—onto the top of the first page of the search results.  The search results were very straight forward and uncluttered, and looked similar to this example below, with only organic free results appearing on the Google page based on the content of your page, and its relevancy to the keyword being searched (in this example, a search result for the word “technology”):

Then, Google launched Google Adwords (now called Google Ads) in 2000, which was your way to “buy” your way to the top of the search results with paid text ads.  Which meant, now you needed both a good SEO strategy for free organic traffic (for the links at the bottom of the first page), and a good keyword bidding strategy for paid traffic (for the links at the top of the first page), as seen in this example search result for the keyword “text”.  

Then, in 2002, Google launched Google Shopping, which gave ecommerce companies the opportunity to “feed” their product listings to Google, also on a pay-per-click model, adding a third dimension to their mix, but largely separated into its own “Shopping” tab on Google.  At the time, it didn’t really impact the traditional search results at all.  And, finally in 2004, Google launched Google Local, which allowed businesses with multiple retail locations the abilities to advertise and promote their various locations, in addition to the corporate parent company.  This change simply localized the advertising, to the location of the user (e.g., instead of seeing a national ad, they saw an ad for a nearby local business).  Again, it really didn’t materially impact the page design.  

Google Today

But, in the last several months, Google has materially changed its page design for Google Search.  And, previous “sacred ground” rules like “stay true to our organic search roots, and don’t clutter the page with a bunch of advertising” got completely flushed down the toilet.  As you can see in this example of a keyword search result for “restaurant furniture”.

Notice what has happened to the page design—today, there is not one free organic search result anywhere to be seen on the first page, above the fold (where the computer screen breaks the page).  Every single link on this page, is now a paid advertisement—the links in the upper left coming from Google Ads, the links in the lower left map coming from Google Local and the links in the right coming from the Google Shopping product feed.  Every single one a paid placement, which is great for Google maximizing their ad revenues.  But, if you want to see an organic search result that is truly based on the quality of the content of the landing page, you need to scroll down “below the fold”, and even then, they don’t start until the bottom of that second screen view after you page down.

The Death of Search Engine Optimization

So, what does this all mean for you commerce companies selling products or services . . . it means search engine optimization as a strategy is on “life support”.  Most Google users focus on the first page of results, mostly on the links that appear “above the fold”.  If there is no way now, to get your organic search result into that position, based on the current Google page design, then why focus on doing SEO at all?  All your focus needs to be on shelling out a lot of money to Google, to make sure your business is promoted in Google Ads, Google Local and Google Shopping placements on the page.  Which is exactly what Google wants, their cash register to ring with each click on their site!!

Now that paints a pretty extreme picture.  Yes, you can still be doing traditional SEO for organic rankings, especially for sites other than Google (e.g., Bing, Yahoo).  Yes, there are still a minority of Google users that will scroll down the first page, and an even smaller amount of users that will click beyond the first page, to page two or three.    But, the amount of SEO traffic you will receive from free organic SEO efforts has become materially less than you would have received prior to the Google page redesign, especially given its dominant market share position in the search industry.  That is the point here:  yes, SEO still can play a role, but a much less impactful one if you are in the ecommerce world.

Also, worth adding, Google is using its new page design on their largest trafficked search terms (e.g., “restaurant furniture”), there may still be SEO value by focusing on “long tail” search terms that Google uses a more traditional search result page design (e.g., like this one below, for “30 x 30 table top”).  

But, I think this is only a matter of time, before Google figures out how to take over advertising on every single one of their page results, including the “long tail” keywords.  Even in the above example, Google Shopping has five paid links at the top of the page, Google Ads has one paid link in the middle of the page, and there are only two free organic results at the bottom of the first page, “above the fold”.

Concluding Thoughts

So, as you are trying to figure out how best to spend your limited marketing dollars, the 20 year “staple” of optimizing your website for free organic traffic, has become a much less effective use of your time and efforts.  It just doesn’t bring the same “bang for the buck” that it used to, which means it is much harder to drive a ROI.  Whether or not this helps or hurts Google in the long term, will be determined in the future.  But, you can bet Google’s competitors, like Duck Duck Go, are going to try to win over internet searchers with their largely free organic search results (which you can see this below example for “restaurant furniture”), promoted as protecting your privacy from the evil Google advertising empire.  

Let’s see if Google’s attempt to fleece all of its advertisers for even more money, and further clutter up its user experience, will open up a door for one of their competitors to start growing share in the search industry.  But, until then, the grim reaper is sharpening his blade for the SEO industry.  R.I.P. my dear friend.

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

The 7 Steps to Managing Your Advertising Agency

 

You've selected the right advertising agency for your company. Great! Now what? Managing an advertising agency is not as simple as hitting “autopilot,” crossing your fingers and hoping they get it right. You will need watchful eyes along the way, helping to keep your agency on the desired track. Here's how to make sure the agency is giving you what you need.

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

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

Lesson #334: Use Google Trends to Track Your Market Share and Success

 

I am sure many of you have used Google Trends in the past.  But, for those of you that are not aware of this terrific tool, now is the time to learn how valuable it can be for your business.  

What is Google Trends?

Google Trends is a tool that can tell you how searches for a specific keyword on Google have been trending over time, for whatever date range you are most interested.  As an example, here is the search traffic trend for the term "restaurant furniture" for the last year:

As an investor in Restaurant Furniture Plus, this data is very important to me, as a tool to know whether the industry is moving up or down, and how the industry is behaving year over year, which I then can compare to our own revenue results.  It also tells me whether or not we are gaining or losing market share, compared to our competitors, which I will detail below.  The way to read this chart is the highest point in the period is scored a 100, and then every other period is indexed against that peak.  So, a week showing a score of 25, would have 75% less traffic than the peak week.

What do we see is in this chart--there was a slump starting in March 2020, which is no surprise with the beginning of the COVID pandemic in the U.S.  Then, there was an unexpected spike in June 2020, which caught us in surprise.  Why was there a spike in the middle of a pandemic when most restaurants were closed?  In response to COVID, restaurants were racing to buy outdoor furniture to open patios which were allowed to operate.  And, then, the rest of the year, pretty much followed normal seasonal trends--this industry normally peaks in March-June, and then November-December are typically the slowest months of the year.  If you looked at this same chart in 2019, you would not have seen a dip in March, you would have seen steady acceleration in demand leading up to new summer restaurant openings and their need for furniture.

How to Use This Data For Your Business--A Couple Case Studies

As discussed, the above can show how the industry is trending, for you to compare your own revenue results.  But, if you dive a little bit deeper, it can tell you if you should be happy or sad with your own revenue results.  Let's talk through an example, using the above chart.  The month of April had an average score of 27 and the month of May had an average score of 48.  That was a 78% increase as the restaurant industry started to shake off the immediate paralysis coming out of COVID.

As I compare that to our Restaurant Furniture Plus data, our revenues in May were up 128% over April.  So, yes when I looked at our revenue data in isolation, without Google Trends data , I was obviously happy with the 128% growth.  But, when I layered in the fact the industry growth was only 78%, that means that Restaurant Furniture Plus was actually growing 29% faster than the industry was growing.  In other words, we were increasing our market share, taking volume away from our competitors, which obviously made us ecstatic.  It turned out that in a world post COVID, the internet dealers like us, where taking share away from the offline brick-and-mortar dealers, many of which were closed during this period.

This data is especially helpful in this following scenario.  I had a client that was really pleased with their 10% month-over-month revenue growth.  And, he thought everything was fine with his business, until we layered on the 20% industry growth from the Google Trends data!  It was a very sobering moment for my client, as his mood changed from "great, we are growing", to "oh crap, we are losing material market share" in the snap of a finger.

Some Additional Guidance

Remember, Google Trends is simply traffic data from Google.  Your website traffic growth, may or may not be in synch with Google trends.  Maybe you have a bottleneck there, with poor search engine optimization, and you are not getting your fair share of the overall internet searches (so, fix that!).  And, the above example assumes you have an immediate conversion of website traffic into sales in the same month.  That may be the case for low ticket consumer products.  But, that is most likely not the case for more expensive B2B products or services, that have a longer sales cycle, especially if they are converted offline.  So, instead of mapping Google Trends data to sales or transactions, map it to leads.  And, if you are going to map to sales, adjust the analysis for your sales cycle (e.g., April traffic growth with a three month sales cycle will drive July sales growth).

Closing Thoughts

Hopefully, you now have a new tool that can help you with instantaneous market research and trends on your industry.  Use this data to help you plan your month-by-month budgets, for any seasonality in your industry, and to compare how your business is trending versus the industry overall.  If you are losing market share, you may not realize it now, but you have a pretty big problem on your hands, that you will need to fix asap.  Good luck!

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