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Looking for a Business Opportunity? Read these words. December 4, 2013

Posted by David Dirks in business strategy, Entrepreneurship, Strategy.
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David Dirks

David Dirks

Every once in a while, someone drills out a few words that just hit you like a ton a bricks.  They are often a string of words that are simple as they are powerful and true.  For those who are looking for ways to create a business and – more importantly – a strong business model – then take in these words by Box CEO Aaron Levie:

“Take the stodgiest, oldest, slowest moving industry you can find and build amazing software for it”

That’s it.  Ok, so maybe your not into software but the advice still applies to anyone else.  Take a stodgy industry that no one pays much attention too…isn’t the latest hot business platform…and find ways to innovate the heck out of it.  Turn it into something that people will say, “why didn’t we think of that?”.

Today they call it “disruptive innovation”.  Whatever you call it, it’s an age old way to develop a business concept that has the best chance for survival and growth.  That isn’t to say that it’s easy.  Not a chance on easy but Levie’s point at least gives you a way to channel your enterprise desires and try to avoid doing what everyone else is doing.

The Quick and the Dead. September 3, 2013

Posted by David Dirks in business strategy.
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David Dirks

David Dirks

When it comes to entreprenuers, in my eyes there are only two kinds:  The Quick and the Dead.  The Quick are those that survive and grow as entreprenuers even though they too can hit dangerous bumps in the road.  The Dead are…just dead.  They are the ones who try, fail and never come back again.

Let’s take a look at the The Quick to understand what The Dead didn’t do.

The Quick are

  • Quick to act when action is needed.
  • Quick to counter competitors when the competition gets tough.
  • Quick to ask questions – and question everything.
  • Quick to make incremental changes to reflect the real world.
  • Quick to listen – and then listen more.
  • Quick to adjust their business models.
  • Quick to cut their losses on losing propositions and move on.
  • Quick to completely change their business models if that’s what it takes.
  • Quick to fix customers problems.
  • Quick to get back up when they get knocked down.
  • Quick to recognize & correct a bad hire.
  • Quick to start over and begin again.
  • Quick to recognize their own weaknesses.
  • Quick to allow others to help identify solutions to key challenges.
  • Quick to learn from competitors.
  • Quick to know when they are too in love with their business.
  • Quick to take things slowly when that makes the most sense.
  • Quick to not think they know it all.
  • Quick to know that being quick is better than being dead.

The Dead are

  • Dead.

Being “The Quick” doesn’t mean they are always fast.  It really means that the best entreprenuers – the ones that stand the test of time – are those that take action when action is called for.

Betterment…Is A Strategy July 12, 2013

Posted by David Dirks in business strategy, marketing, Marketing Buzz, Sales Strategy/Tactics, Sales Tactics.
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DirksProPhoto Why do people buy your products or services?  Are they forced to buy them out of necessity? Do you have a monopoly? Probably not. But understanding why people buy – and it’s often not on price – is one key to business longevity.

If you sell products or services that can easily be obtained elsewhere, why should they buy from you?  Think about yourself as a consumer for moment.  When you make a purchase – are you making it to contribute to a life of mediocrity?  No.  We buy things because of one basic reason: betterment.  I buy milk as a staple but the place I buy my milk is the place that offers me the best tasting milk at a fair price.  I don’t buy my milk anywhere else because I feel the milk I buy there is better for me and my family.

Betterment.  It’s a word…a noun to be exact.  Websters defines it as “becoming better” and “an improvement that adds value to property…”  Consider yourself “property” as a consumer.

As a business owner, your job is to convince the rest of the world (or at least your wedge of it) that your product or service offers someone a way to better themselves…their lives…their families.  In a world where everything seems like a commodity, your edge is communicating how your company delivers on improving something in the life of your customer and, most importantly, your prospective customers.  The success of your business model depends on it.

That said, if betterment was easy to define, everyone would be doing it but few are – just look around you.  Most business owners are stuck on price or try to differentiate based on product or service features or benefits.

Apple has long been a master at parlaying great technology and wrapping it around betterment.  Apple marketing and sales messaging is almost centrally focused on how Apple products enhance or better a life.  And they are able to deliver on that promise to (if you are a pc head, you don’t get this but we’re ok with that).

If you follow a blog, perhaps this one – you have the expectation that spending time here will better your life or business in some way, shape or form.  Otherwise, you wouldn’t spend you time on any blog that didn’t offer and deliver on that.  The most popular blogs are followed because people get something out of them (entertainment value, economic value, etc.) that they can’t find easily elsewhere.

The first step on the path of a message of betterment is to translate what your product or service does to get a customer there.  The destination is betterment.  For example, a landscaper cuts the grass and makes the property look great each week.  Where’s the betterment? How about the time it frees you from having to do it and spend more time on things you want to do instead – like spending more time with family.  By making your property look like an estate, you feel that your property and the quality of your life are enhanced (as opposed to looking at tall grass and weeds).

In other words, a betterment message is thinking of your product beyond the standard features and benefits it offers.  How does it translate – tangibly or intangibly – into a path to making some aspects of a customers life better?

The second step is making sure all of your marketing and sales messaging is zeroed in on the elements of betterment…clearly…concisely…and consistently.  You have to be able to draw a picture in the mind of the customer so they don’t need an algorithm to figure out why your product is the one they should buy.  They should “get” betterment.

Never easy to do but clearly worth the investment of time and effort to get there.  Betterment – it’s a strategy.

Iteration Is A Strategy July 1, 2013

Posted by David Dirks in business strategy, Dealing with change, Solving Business Problems, Strategy.
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David Dirks

David Dirks

Does the Facebook of today look like the Facebook when it was first launched in 2004?  Did Amazon perfect its business model of today in 1994 when Jeff Bezos founded it?  Is the IBM of today the same as the IBM of say 40 years ago?  Here’s another question for you: How many businesses hit a genuine business model home run where sales and profits start cranking out right from the start?

The answers to the above questions are “n0”, “no” and “once in a blue moon – if ever.”  To iterate is to keep trying – keep pushing your business model forward.  It’s tinkering with the engine until it sounds like all cylinders are working smoothly.  In some cases, it’s challenging the very dream we have hold so dear in our business – the very vision we have might not be the vision that produces the life blood of any business – greater sales, growing profits and cash flow.

Iteration is a process that should be integrated into the culture of most any organization but rarely is.  Here are some thoughts on the process of iteration:

  • Don’t get married to your vision or dream.  What? How can we achieve greatness without a vision we can steadfastly commit to?  It’s not easy – if it was then iteration would be a breeze and everyone would be doing it.  They aren’t – which is just one reason why many organizations fail within five years or less.
  • Business plans are like war plans.  Everything changes when the bullets start to fly.  Yes, I know you spent a ton of time working and toiling over your business plan and it’s a great starting point but…when the reality of the business environment hits it, it’s over.  Competitors don’t play nice or according to the plan.  Customers are more finicky than the business plan sales projections call for.  Things have to change when the bullets fly.
  • Not everything has to change.  Sometimes iteration means tweaking only what needs to be tweaked.  Keep testing, changing, moving forward – throwing out what isn’t working and keeping what does.
  • Challenge yourself to iterate on purpose.  When you realize that iteration is a part of your business life if you want to succeed for the long run.

When you build a business…it’s about the long run isn’t it?

Dave

The Rise of Lower-Priced Premium Quality May 21, 2013

Posted by David Dirks in business strategy, Sales Strategy/Tactics, Strategy.
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DirksProPhotoThere is a very distinct trend in product and service development today that I feel has major implications for businesses of all sizes and industries. It’s the idea that cheaper or lower-priced products are being design and built with far better quality than just a few years or even a decade ago.

Take the Ford Fiesta for instance. This is an economy car (lower priced, low expectations) that’s been around for a while but like the Chevy Cavalier or the Ford Escort, suffered from the traditional “low-priced, low-quality” syndrome. The 2012 Ford Fiesta is now a highly rated car (edmunds.com) with a still-low sticker price. To get the Fiesta to this point, Ford had to make a commitment with itself to find ways of incorporating select design & engineering elements from their higher-priced, higher quality brands and drilling them into the designs of their economy car line. And they still had to provide this economy car at an economy price (starting at $13,000).

For another example, both Hyundai and Kia had to learn the same hard lesson across all of their product lines when they came to the U.S. market just a few decades ago. Back then, both were the laughing stock of the car industry when they tried to produce less expensive cars in all categories but fell short with major quality problems. What they learned is that while some American consumers want to spend as little as possible…they still want to be able to show value for whatever money they spend. Now both offer less-priced cars at higher than average quality. A market strategy win for both.

Remember the Yugo? The idea was great – a super cheap car for the masses. Sure, you could buy perhaps three or four Yugos for under $12k all in but there was one problem. The Yugo broke down almost immediately upon trying to leave the dealership. That was the end of Yugo.

Let’s take wines as another example. There was a time when there was very cheap wine (Boones Farm Strawberry wine ring a bell?) or very premium wines (at $20 or more a bottle). There was little in the way of a great Merlot or a Sirah at $8 a bottle. However, for more than a few years now, consumers have been treated to a very competitive industry that has figured out how to provide high quality wines in the $8 to $14 dollar range.

So what’s this mean for you and your business? Here some thoughts:

– Do you offer lower-priced, higher quality products or services to you customers? The key is figuring out 1) which features & associated benefits from your high quality offerings can be 2) engineered into your lower-priced offerings.
– Check your competitors. Who is offering a slightly upgraded product or service at a competitively lower price? If I’m your competitor and I know I have to have a line of basic, lesser priced products or services for those customers who want them, my best strategy for outflanking you is to offer a slightly improved version. One that has the kind of feature(s) and benefit(s) often only found in the premium lines.

Consumers today are far less tolerant of cheaply priced, lower quality products than ever. Rest assured that there is still quite some amount of junk being sold as a product or service – but therein lies your competitive opportunity. Seize it.

“Impossible” Is Just An Opinion December 6, 2012

Posted by David Dirks in business strategy, Solving Business Problems.
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David Dirks

David Dirks

Impossible.  The word that has closed more minds, doors and opportunities than any other I can think of.  “Impossible” is often a frame of mind and an easy, convenient door stop for shutting just about any challenge, idea, project or thought down.  Cold.

Of course, it was impossible for us to think of anything replacing the horse and buggy.  It was impossible that candles or whale oil could be replaced.  Impossible it was to think that man or woman could fly from one point to another.  Impossible that much medicine could actually fix a bad heart. Impossible that a man could compete in the Olympics with mechanical legs.  Just lot’s of impossibilities out there.

Did you know that Margaret Mitchell was turned down 38 times before a publisher said yes to her manuscript for Gone with the Wind? Or the more recent Chicken Soup for the Soul was rejected 140 times before getting a publisher?  Steven King was turned down 30 times when he was trying to publish a manuscript titled as Carrie?  The great artist, Monet, had his artwork ridiculed in his day.

At what point do you think that any of these people thought it was going to be “impossible” to get that book published?  The first rejection or the 140th?  The answer is clear.  They didn’t see impossible at the first or last point of rejection.  What they saw in their minds was this:

What the mind can conceive, man can achieve.

Earl Nightingale

We can be thankful that there a few people in every organization that see beyond what many of us see as great, impenetrable walls of impossibility.  Next time you hear someone use the word “impossible”, just remember that what they really told you was that it is possible.

Seth Godin Gets It September 27, 2012

Posted by David Dirks in business strategy, Sales Strategy/Tactics, Strategy.
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As I write this post, I’m sitting in a classroom here at the Googleplex in NYC. Just heard Seth Godin (sethgodin.com) and as he was speaking, I wrote down several things (in paraphrase) that stuck with me. This is all in the context of how we become more successful in our business to help other businesses succeed:

What story are you telling?

Are you trusted?

The more you specialize, the more likely you are to solve problems.

What is your brand promise?

Shun non-believers

Are you selling scarcity or abundance?

———————————-

Get it? Think about it.

Pivoting as a Business Strategy July 5, 2012

Posted by David Dirks in business strategy, Strategy.
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A Wall Street Journal article (‘Pivoting’ Pays Off for Tech Entrepreneurs, April 26, 2011) caught my attention.  What used to be called a “failed business idea” is now known as pivoting.  That’s when you have a business model and learn that it does not provide the revenues and profits you need to sustain it (or the venture capitalists who might back you).  Pivoting is the art of then taking the pieces of the business model that work and creating a new business model…even if that means going 180 degrees in another direction.

Pivoting as a business strategy is not new.  It just didn’t happen with much frequency until the advent of the web, apps and other such fluid technologies.  Now, if it doesn’t work, just pivot quickly to something else.  To me, pivoting makes sense.  If you start with a business plan and model that you learn has faults, you just pivot to another business plan and model.

Of course, pivoting is not easy and full of risk.  First, pivoting is an admission that your original business model is either failing or has already failed.  In the “old days” businesses that failed or were on the path to failing…just plain went out of business.  Secondly, you can’t pivot slowly.  If you pivot you have to do so with all speed.  Yes, pivoting is like changing the tire on a car that is still moving at highway speed.  You don’t have time to extend the debate on what in your business model stays and what parts get junked and replaced.  Third, pivoting doesn’t guarantee anything.  It just means you get to live and learn another day.

Pivoting isn’t new.  Thomas Edison pivoted more than 1,000 times before perfecting the light bulb.  Sir James Dyson created 5,127 prototypes before he perfected his bagless vacuum. Pivot if you dare.

The Experience is the Marketing April 12, 2012

Posted by David Dirks in business strategy, Marketing Buzz.
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You want a great marketing strategy?  Create an incredible customer experience and you’ll have the greatest contributor to new and recurring business you could have.  Think about it.  Most business owners and managers think of marketing and promoting their business in the context of spending money on advertising.  While certainly advertising and other forms of marketing your business are key, creating a superior customer experience is the first worthy marketing investment you can make.

This is often a mistake made by new business start-ups who in the heat of battle forget that the experience they create for their customers is the most impressionable and lasting investments they can make.

And it doesn’t much matter that whether you provide a product or service either.  We all know how much Apple pays attention to the user or customer experience.  Every detail of the path their customer takes has been designed and engineered to provide a great and positive experience for the Apple customer.  And yes, Apple spends plenty on traditional advertising and marketing. But I’m willing to bet that the experience of buying from Apple and then working with their products sells more product than the advertising does.

Do you know of a local business where they have created a customer experience that has the impact to keep you going back time and again?

So, for those businesses that compete on price as their primary “marketing” strategy, take note: price is your race to the bottom.

Here are a few things to consider in developing a “marketing experience” for your business:

  • The customer experience begins at the point your prospect or returning customer enters your business – whether through your store or via your website.
  • The first few moments of contact and connection to your business are the most critical.  First impressions are important and immediate impressions are critical.  If the initial impression is negative, you probably have less than a 50% chance of redeeming yourself in front of your customer or prospect.
  • Customer experience has to be designed from end-to-end in order to ensure that the experience is engineered from the time they enter your online or offline store/office to the time they leave.  End-to-end.
  • Layout your customer experience on paper.  You need to be able to describe what positive emotions & attributes you want the customer to get impacted by.  You have to design a flow of experience that incorporates an impression that can be implanted into the customers brain.
  • People within your business provide the most critical impact on a customer.  Make sure that everyone is trained to provide the kind of customer experience that will delight.  If you’ve been to a place like Disney World, you know what I mean.
  • Be flexible and able to adjust your customer experience as you see/hear the reactions from customers. Be willing to test new ways to improve the customer experience.  Look for examples of excellent customer experiences outside of your industry.

Creating an exceptional customer experience is not easy.  If it was, everyone would be doing it and it’s pretty clear most businesses don’t.  A positive customer experience can create customers that stick with you and competitors who can’t follow you.

The Costs of Strategy March 6, 2012

Posted by David Dirks in business strategy, Strategy.
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It’s funny.  Not a day goes by when someone tells me they need some “strategy” to help them in their business.  Strategy?  Today the word “strategy” is used like a cheap, $2 dollar bill.  It must just sound good to say the work “strategy” in a sentence.  So what’s so funny about that?  Well, everybody wants a strategy until they find out that implementing it might actually cost them some money.  Perhaps having a “strategy” might mean you have to upgrade a system or process to gain a clear competitive edge.  Or it might mean investing in additional people resources to help you exploit a new marketing opportunity.  As soon as the “strategy” requires an investment of some kind, the next stage is, “How can we do this on a shoe string budget?” Well, you can’t.  So, business owners and managers will pick off the parts of the strategy that call for more investment than they are willing to make.  That usually means that what’s left are one or two tactics that are weakened greatly because they were part of an overall “strategy” that now only has a few pieces of structure to hold it up.

The result:  Strategy failure.

Couple of observations here:

  • Strategy may require investment in resources whether it be money, people, and time or any combination thereof.
  • “Strategy on the Cheap” is not a strategy.  That’s hoping that you’ll find enough “cheap” or “free” ways to implement the strategy to make it work.
  • Strategy is not a cure for a bad business model.  If your business model is broke, no amount of strategy will help you unless you are willing to make great changes and most likely a reallocation of resources.
  • Strategy is not designed to make you feel good.  Strategy and the implementation of it may require you and great parts of you business to change.
  • Strategy is not easy.  If it was, everyone would be doing it and doing with great competitive and business results.  Everyone in business isn’t.
  • Strategy without action is dead-on-arrival.  Nice to have but useless unless implemented.
  • Strategy changes the moment the bullets fly.  When the competition and markets keep moving forward, change is inevitable.  When the competitive battle begins, be ready to modify your strategy as conditions warrant.
  • Strategy cannot fix things tomorrow.  Impatience is the killer of many “strategies”.
  • Strategy development must be shared.  You cannot develop a strategy by sitting yourself in a room and hoping something comes out of your head.  Or perhaps what comes out of your head is not that good.  Share your ideas and challenges with others and let the vetting process begin.

You get the point.