Thursday, January 31, 2013

Clean Technology - The New Bubble?

When it comes to investment "bubbles" we've recently experienced two major "popping" incidents. The first was back in the late Nineties with the technology bubble popping leaving a wreck of literally hundreds of online startup businesses.

The second was the housing bubble from the early 2000s. We're still feeling the impact of that bubble bursting.

Now there is a worry that clean technology will be the new fragile bubble. However, there are indications that would point in the direction of longer lasting investment opportunities with clean technology businesses.

Here's why:

Clean technologies get paid first.

Unlike the internet companies who were offering free services, most clean technology companies like those making and installing solar panels are paid up front for their services. In other words, nobody is giving away a solar energy system for free in the hope you'll buy another one. The potential drawback is that for these businesses to succeed they will require a serious investment from the consumer. This brings up the need for a strong marketing campaign to make sure the consumer understands all the money-saving benefits of clean technologies down the road.

It's good for the planet.

At the heart of any green technology is the desire to make the world we live in a better place. By reducing our dependency on fossil fuel burning forms of energy we can make important strides in protecting our fragile eco-system. That approach holds a lot of appeal for many folks. We might not need to buy a luxury item from some online web store but we should all be interesting in preserving the environment. This makes clean technology more of a "calling" as opposed to a "fun fad" and that is going to increase its longevity as a business.

Government support.

For the most part, governments have stayed out of online businesses. It also seems that any government involvement in the real estate industry has had dubious effects. However, with clean technology the government can play a vital role in terms of offering support. Not only have they been providing loan guarantees to clean technology business but there have also been tax credit incentives to spurn consumers into investing. The partnership between the government and clean technology appears to be in for the long haul.

Slow and steady growth.

Unlike the internet and housing bubbles, nobody is going to become an instant millionaire in the clean technology industry. That doesn't mean you can't find success but the approach is one of slow and steady growth. That removes a sense of urgency in investors looking for overnight returns. Smart investors understand the nature of the clean technology business model and will make the appropriate decisions towards infusing those industries with the needed capital. 

Wednesday, January 30, 2013

Five Reasons to Avoid Crowdfunding

In the wake of tight credit markets in North America, crowdfunding or crowdsourcing, has quickly become a source of readily available financing to startups, charities or projects. This form of financing is extremely popular with the creative industry such as documentaries, artists and writers.

This new form of financing allows a person to get funding through small contributions from a large group of individuals through an online platform.  The entrepreneur makes an online pitch to a community, which then decides if they want to support the project by giving money towards it.

Raising funds for your small business by crowdfunding has its own set of dangers that can be harmful to your company’s success.  Here are the top five reasons to avoid crowdfunding as a financing option.

Crowdfunding is not meant for large projects.

If you need a million plus dollars to get your business up and running, crowdfunding is probably not the best source for you. Yes, there have been exceptions, but raising the large pool of capital works best with venture capitalists that you can focus on as opposed to the sometimes-scattered approach of crowdfunding. The other thing to consider is repayment. Imagine trying to keep 1,000 investors happy!

Crowdfunding is not sophisticated investing.

There is a kind of hip, underground vibe to crowdfunding. You could kick in a couple of hundred dollars towards an edgy independent film and feel like you’re part of the creative process. However, some professionals might not want to open up their business plans for such wide scrutiny.   

Crowdfunding could impact future investments in your company.

If you're tapping into crowdfunding as source of capital, you want to think about the longevity of your business. A single project can benefit from the financing, but if you've giving up shares in a company that might become extremely successful, those shares could tangle up future investment opportunities. See "The Social Network" for a perfect example of this dynamic playing out with billions at stake!

Crowdfunding has a limit on share values.

The cap with crowdfunding is $1 million. If you manage to raise more than that amount you'll be frozen out of crowdfunding for at least a year unless you want to become involved in security registration compliance. Suppose your company experiences rapid growth? You might be stuck if crowdfunding is your only cash flow source.

Crowdfunding is not a quick option.

If you need cash fast, crowdfunding is not the way to go. Once you place your proposal up on a site you essentially have to wait until it catches "fire." You'll also have to do a lot of your own promotion to drive people to your plan. This process can stretch on for weeks and months. Now consider being approved for a loan from a bank and having the funds by the end of the week. Which works better for your plans? 

Tuesday, January 29, 2013

How to Create a Successful Freemium Business Model

You've heard the warning, "You get what you pay for." When it comes to freemium business models, getting something for free could actually be the ticket to a lucrative business.

The internet is crowded with thriving freemium type of sites like LinkedIn, Dropbox, Skype and others. The goal for those companies is not to completely give away services for nothing in return. The hope is that through paid upgrades, companies can convert loyal users into paying customers after trying out basic services.

If you’re considering in creating a freemium business model, understand these factors:  

Make your product your number one priority.

That might seem like an obvious tip but you'd be amazed at how many developers begin with the premise "I've got to make a lot of money fast with an application" as opposed to "I've got to make an application that serves a need."

Your product has to be easy to find and to use with the kind of adaptable features that today's internet user is drawn to. Like most successful products, you need to identify a need then provide a solution. What are you offering that other sites aren't?

You also have to consider the complexity factor as in don't make your freemium complex! You want your potential customers to be able to click over and start using without very little effort. If your site requires lengthy training or tutorial sessions it might turn off potential users.

Make sure you understand the value of free users.

You're going to be spending a lot of capital and development time to get your freemium company up and running. The initial start-up phase is not going to generate any substantial revenue. However, if you appreciate the value of building up your user base then you can easily translate high volume into potential revenue streams through service upgrades.

Do you know your cost per acquisition (CPA)? Do you know your break even point? Are you realistic about how long it will take to achieve that goal? Those factors should all be part of your business model.

Test, test, test.

Make sure that you test every aspect of your business model, from conversion testing to how users consume your service. You can improve your service offerings, tweak your ad campaigns or even determine who your ideal customer is. Without testing, your business can be left behind by fast moving competitors who can snap up your unsatisfied customers.

While starting a freemium service is not always the right model for every industry, used wisely - it can be extremely powerful. Before you start, remember that all start-ups should begin by creating a product that solves an important need for users. 

Thursday, January 24, 2013

Using Content Marketing to Build your Brand

Google can be a business' best friend or worst enemy.

As the number one search engine used by the vast majority of internet users, you would like nothing better than to be at the top of any search tied to your business. Knowing that their users depend on accurate information, Google is constantly updating and modifying its search algorithms to insure the sites they recommend are viable.

Google does this is by searching for fresh, original content and not just "spammy" stuffed copy. This has forced some brands to behave like media companies, producing content across various mediums, including video, photography, infographics and articles.

However, this shift in marketing has made it difficult for many brands, since effective content marketing demands turning away from self-promotion. Companies that put the needs of their customer first in their marketing, by providing interesting and engaging content, without any overt promotion will attract an audience that wants to consume the content, share it, comment on it, and even create it.

Here are some rules to follow to when using content marketing to build up your brand:

Don't promote - educate.

Teach your customers by being educational, not promotional. Work with experts by using thought leaders in your industry to create videos, blog entries, and other content for your target audience.

Help to solve a problem.

Your customers are usually looking for answers to a problem, so include information that solves a problem or answering a tough question. Show your prospects how your information helped solve a problem because they will explore your solution further if they have that same problem to solve.

Measure the success of your content strategy.

Analyze how users discover, consume, and share your content.  It’s vital that you measure the success or failure of your content marketing strategy. Start by taking a look at page views, time on page, your bounce rate and make sure that every single link that goes into your content marketing piece is trackable.  

Make it easy to share.

Your content must be easy to access - share it across many platforms. To get a large amount of traffic, you would need to understand where your customers hang out online. You'll have to do some research by knowing where your customers hang out online. As each community consumers content differently, build content that is specific to the audience, build that community and you'll be building traffic back to your site. 

Wednesday, January 23, 2013

Less is More - Online User Experience Design

The adage "less is more" can apply to many things. It holds true in cooking, gardening, academics and especially business. It revolves around the idea that you don’t want your customers to think more than they have to.

The fewer decisions to make during the shopping process, the better.

This becomes easier when we consider all of our customer touch points throughout the decision making process. With how connected most people are now, an important part of this is recognizing what platform they’re using and what specific information they’re looking for.

Ask yourself the following questions when approaching your customer’s user experience:

What can you take out of the online shopping experience to make it easier for your users to make purchasing decisions?

 Are you presenting them with too many options too soon in the shopping process

Can you keep your customers engaged while minimizing the decision making experience?

Amazon has perfected the one click approach to online shopping but not without a lot of trial and error. Take a look at these websites to see how they are utilizing the "less is more" principle to web design:

Apple: If there is one company who has mastered the simplified approach to web design it is Apple. Even with the vast array of products that are part of the company's catalog you'll find that their home page consists of just three things: a navigation bar, a single product featured on the page and formational links below the fold.  The focus is on finding what you want, quickly and easily. When you click over to a specific product page you'll find sidebars featuring links to related products and support but that single product still dominates the attention of the user. You're not going to find dense copy, ads or clutter.  

 Shoeguru: Shoeguru is a terrific example of combing user-centric ideas with product-centric solutions. There also exemplify the proverbial "Grandma Rule." If the site is so easy to use that your grandma can shop there then you've achieved the ultimate in minimalistic design.

Etsy: Like Amazon, Etsy is an e-commerce site which has an expansive catalog. However, that doesn't mean you should crowd your page with tons of information to get your point across. Let strong and vibrant product shots do the selling work. In other words, you need only show what you need to make the sale. Specs and reviews matter but they should be part of the clickthrough.

After identifying the platform or device your customers will be on at any given point during their shopping process, remove all unnecessary obstacles, and give them exactly what they need.

The end result will be smaller bounce rates, more sales, customers who feel like you understand their needs.

Tuesday, January 22, 2013

How Mobile is Driving e-Commerce in the Future

Back in the sixties, the popular sci-fi series "Star Trek" showed us the way with its handheld communicator. This device allowed crew members to talk with their shipmates at very long distances.
They were also able to use that same device to tap into the vast resources of their super computer. Flash ahead to today and that bit of fantasy has become a reality.

We all have the ability to carry a super computer in the palm of our hands. We can look up information, check out the weather, get directions, stay in touch with friends and go shopping. In fact, mobile technology is going to be a leading factor that will drive e-commerce to further successful heights in the coming year.

Here's why the mobile device is having an impact on e-commerce:

     Multiple devices and platforms increase brand visibility

Each year cyber shopping is carving out a larger portion of the retail pie with no signs of it letting up. It's not just the cell phone that is driving e-commerce but also the pad or tablet device. With iPad leading the charge shoppers are happy to download apps from their favorite stores and sign up for Twitter promotions and special offers. For the online brand, this means developing a web portal that can cross over on many platforms. You shouldn't limit yourself to just one device and stay competitive.
       Easy access for the consumer at all times

A major benefit that mobile users enjoy is the instant access to ordering a product online. Mobile apps have improved so much that they are considered the best friends of today’s users. The apps that are preferred are those that make it easier to find products and services on your cellphone and purchase the products. Consumers can download apps which let them scan bar codes to find the best bargain. If it happens that your website is selling that item at a better price then a few clicks later could have you closing a sale.

      Rising mobile demand

As smartphones are becoming cheaper and more powerful, their adoption is rising. In the US alone, web-enabled smartphone purchases have 46% of the cellphone market. Thus, the market for e-commerce consumers via mobile platforms is ever expanding. With the expansion, there is a logical increase in the use of cellphones for e-commerce.  

Improvements in technology are helping businesses and customers shop and it's only going to get better. Case in point: The Shazam app. Once downloaded, you can activate Shazam to "tag" any song playing on the radio or TV. That song becomes part of a virtual shopping list that is tied directly to iTunes. Hear it, tag it, buy it.

The mobile shopping experience doesn't get any better than that! 

Thursday, January 17, 2013

How to Begin Succession Planning

What are you really working for? Is it to build a legacy brand or to secure a restful retirement? In actuality there is no reason why you can’t accomplish both of those goals. From the moment we start working we look forward to the day when we can stop working.

Perhaps you have a bucket list that includes traveling, taking up a hobby or just reading every day. Whatever your retirement plans might be you want to make sure you the kind of financial security which will allow you to maintain a decent quality of life.

As for your business, you don’t necessarily want it to come to an end just because you’re ready to scale back. When it comes to your succession planning here are some of the steps you can take to be ready.

1.      Plan Ahead

Just as you plan on retiring some day from the moment you start working, you should also be thinking about how your business will carry on when you move on. This doesn’t mean finding a successor in the first year of your operation but it should be something that is always in the back of your mind. You might identify a particular executive who has the right stuff to take over some day. If so, you could start to groom them so that they can be ready to be a CEO.  Just don’t keep your intentions a secret. If you’re going to invest your energy into an employee let them know what you’re thinking. That will have them on the same page and working towards a common goal.

2.      Build the Right Team

As you already know, starting a business is not something you can do on your own. The same holds true for your succession. You need the same accountants, lawyer and advisors you used on the way up for your exit.

3.      Last Will and Testament

The worst case scenario would be for your business to carry on without your input because of an untimely death or debilitating illness. This is why it is essential for you to prepare a will. There might actually be a requirement in your corporation bylaws which states you have to have this type of document in place. Estate planning will allow you to designate the representatives you want to have in charge of your business. Keep in mind that there will always be opportunity to amend the document as conditions warrant but it’s best to have that foundation in place. This is also the reason why you should have a comprehensive insurance policy in place as well. Benefit payments could help with the continuation of a business.

4.      Think About Your Family

Many businesses become a family legacy with the ownership being passed down from generation to generation. Although noble, that isn’t always practical. If you do have children who you would like to take over the business make sure that is something that want to pursue. That last thing you would want is to force them into a career they have no passion for. 

Wednesday, January 16, 2013

How to Manage your Independent Contractors

Every day more workers are joining the ranks of the independent contractor. As someone who is considering tapping into this potential workforce you want to make sure that freelancer is going to get the job done right. Here’s what you need to do to make sure you’re getting the work you’ve contracted for.

1.      Make the Interview Call

A lot of freelance work can be conducted exclusively via the internet. This means you can search, hire and accept work all through email. However, to make sure the independent contractor you’re considering is reliable, reach out for a quick telephone interview. You can put forth your expectations and find out more about the candidate over the phone then you could with an email exchange.

2.      Write an Employee Contract

If you expect nothing then you’ll never get disappointed. However, if you want a freelancer to achieve certain goals then put them in a contract. There should be no question as to your expectations of their performance, their compensation and what measures it would take to terminate the contract. Start out by being on the same page.

3.      Set Specific Deadlines

Every project should have a delivery date. Your freelancer should be well aware of those dates and be able to deliver on time. What they don’t need to know is if the deadlines you’re providing are the actual deadlines. There is nothing wrong with a little padding on your side! That way you can make any corrections or fill in the gaps if that contractor doesn’t deliver. And all the deadlines should be in writing.

4.      Don’t Micromanage

With every new type of employee there will be a learning curve. You’ll want to make sure they understand the assignment and that they are delivering on time and on budget. In the beginning of a new working relationship, you might feel the need to check in on the progress. Nothing wrong with that. But once that contractor has proven they can deliver, let them do the work. No need to keep poking them for progress.

5.      Make Yourself Available For Clarification

It goes without saying that your employee can ask you for clarification about an aspect of a project. The key is to make sure you’re responding to their query in a timely manner. You don’t want them to stop the work while waiting a day for your answer. This could prove to be a challenge if you’re managing someone in a different time zone. Keep checking your email when you’ve got a deadline approaching.

6.      Reserve the Right to Terminate

If you reach the point that a freelancer isn’t living up to their end of the contract, then you’re well within your rights to terminate the agreement and move on. There are too many talented folks out there who can deliver exactly what you’re looking for without the hassle. 

Tuesday, January 15, 2013

How to get a Distributor to Represent your New Product

You could have the most amazing product on the planet but without proper distribution to get that item out into the marketplace, you're going to end up with a warehouse full of inventory wasting away. The right distributor will get your product to as many potential customers as possible but how can you find that partner?

The following steps should provide an informative road map for picking a distributor for your new product.

Step 1: Do Your Research

Find out who is distributing similar types of products in your area. The big brand name players handle their own distribution, but as a small business start-up you should be able to find many options in your neck of the woods. You can also ask for recommendations from other business owners. Another great resource is an industry trade show. You're sure to make many contacts there for potential distributors.

Step 2: Set Up Interviews

Once you've narrowed down your list to the top picks, you'll want to set up meetings to pitch your product. Keep in mind that you're looking for a viable partner not someone who is just going through the motions of shipping your product from one outlet to another. You want them to be excited about the product that you're offering. If you don't get a strong sense of their dedication then they're not going to be the right partner for you. 

Step 3: Get the Stats

As you get down to the top candidates, you'll want them to "sell" you on their abilities. Ask for previous sales figures, marketing campaigns and how much reach they'll have across the country. Can this distributor roll out a product nationwide or are they restricted to a single coast region?

Step 4: Crunch the Numbers

A distribution fee will be factored in as a percentage of your production costs. The key is to keep those costs down in order to improve your profit margins. You might find that the distributors you are considering are all offering the same rates. However, a one or two percentage point difference can add up to substantial savings.

Step 5: Work Out the Process

You want to clear about expectations on both sides. How will you get your product to the distributor? What will the payment structures be? Who will be handling quality control and tracking? 

Step 6: Check References

Finally, you'll want to follow up on the references provided by your distributor candidates. Call up those businesses and find out how effective those distributors have been. Make sure to ask about any problems they might have had.

The best decision to make is an informed one!

Thursday, January 10, 2013

How to Protect your Company from a Lawsuit

Nobody likes getting sued. If you’re a start-up, a lawsuit can bring your business to a screeching halt.

On some level, you can’t ever provide 100% protection against a lawsuit. Anyone can sue anyone at any time. The issue becomes whether that lawsuit has merit or not. Hopefully you can institute the following steps to make sure you would be protected against lawyers bringing frivolous lawsuits against your company.

Step 1: Be patent and copyright compliant

If you are selling a product that you invented, you should have patent and copyright protection in place before you make any sale. There are plenty of internet resources you can tap into that will let you determine whether or not you might be infringing on someone else’s copyrighted material. If you’re making a new product is “like” another product then having your own copyright or patent should insulate you from a lawsuit going forward. This type of research should also apply to any type of logo or other marketing device you intend on using. For instance, if you’re selling a new patented blend of cotton T-shirt but have Mickey Mouse imprinted as the design you could be sued by the Disney Company unless you have licensed that image.

Step 2: Incorporate

As the sole owner of a start-up business, you might think it’s not necessary for you to incorporate yourself. After all, you’re making all the decisions, right? In truth, incorporation provides a layer of protection against liability. If your business is sued it would only be the assets of that incorporated business that would be at risk. All of your personal assets would be safe. In the worst case scenario, an incorporated business can declare bankruptcy and you can turn around a start a new business the next day with a new corporation.

Step 3: Always get it in writing

There isn’t an aspect of your business that couldn’t benefit from a well written contract. Whether that document is between you and an employee, vendor or client having all the terms clearly spelled out will help reduce the instance when someone could find fault with your practices. That’s why contracts should always include clauses to consider all the possibilities of a particular outcome. 

Step 4: Don’t steal staff

Too often the best potential workers are already working somewhere else. There is nothing wrong with hiring a worker away from another company. It happens all the time. However, when you get into situations where intellectual property is involved it might cause some problems down the road. For instance, if you’re starting a mobile game development company and you poach a great designer from another company, that company might take exception with the kind of knowledge their former employee is bringing to your company. This is why there are non-compete clauses in a person’s severance contract. If you are hiring someone in a situation like that make sure they are coming to your business free and clear.

Tuesday, January 8, 2013

Does Facebook Advertising Work?

One billion plus.

That's how many current Facebook users there are. More than likely, by the time you read this article there will be millions who have signed up for this social network.

Even if you were to get a response rate of a fraction of a single percent point, your advertising would still be reaching a lot of potential customers.

There are other reasons why Facebook advertising is a good investment. Consider these advantages:

·         Targeted Demographics

Effective advertising comes down to targeting your demographics. Facebook advertising allows you to get very specific in terms of your potential customer base. Not only can you focus on gender and age groups but also on the many "likes" that a Facebook user can tap into. If you're selling hockey jerseys then you'll want to get your ad in front of any fan of the game. Facebook can help position you to those demographics. 

·         Going Local

Not only can Facebook help you focus on demographic groups but also on geographic locations. Everyone who signs onto Facebook has the ability to "mark their spot." This affords local businesses the chance to reach out to those customers who are spending directly in their community.

·         Effective Marketing Spending

As you prepare your Facebook advertising campaign you'll be able to project just how many users will see the ad. This is important for the kind of pay per click ads that Facebook excels at. You'll be able to scale your budget to fit the potential reach of your ad. That will make your marketing dollars have a stronger ROI.

·         The Viral Effect

Whenever a Facebook user "likes" your company page, that "like" will show up on their news feed which in turn is posted on the news feed of all their friends. This can have a snowball effect of spreading your message even further as hundreds of more users are exposed to your ad.

·         Custom Branding Choices

The Facebook ad allows you to use powerful images that can draw attention to your post. Because of the ease of accessibility, you can change up those images and find which ones work best for your campaign.

The bottom line is that a billion potential viewers are logging onto Facebook on a fairly consistent basis. In terms of online marketing, this is really the greatest reach of any site out there.

As with any type of advertising campaign there is no guarantee of success.

However, with Facebook advertising you can start small with a targeted campaign, test its effectiveness and roll out a wider reaching strategy.

Definitely worth exploring.