The canvas asks:

• What value do you deliver to the customer?
• What key activities do you need to perform to deliver that value?
• What key resources does your value proposition require?
• What type of relationship do you have/want to have with your customer?
• What are your go to market channels?
• What are your key customer segments?
• What does your cost structure look like?
• What makes up your revenue stream?

These questions are by no means exhaustive, but you’d be startled how often founders and CEOs can’t answer them or haven’t thought about them. That’s a problem, because being able to describe your business in these terms signals to potential investors that you’ve thought about how your business activities align to aid you in achieving your goals.

Osterwalder’s Canvas also helps you to identify any gaps that may exist in your plan and where an opportunity may lie for a potential innovation or pivot.  Try it out for yourself, and let me know what you think!

Image provided by: azipaybarah / Flickr

#3. Posting to the wrong Twitter account

The beauty of Twitter clients is that they let you manage multiple accounts. Unfortunately, they also make it easy to post personal messages to professional accounts by accident.  In 2011, Twitter accidents included the American Red Cross #gettingslizzard at work,  Chrysler complaining about how no one in the #motorcity “knows how to f****** drive”,  and (former)  Representative Anthony Weiner tweeting photos of his genitals.  While two out of these three incidents were easily resolved with a retraction and an apology, the third led to a career-ending scandal. The lesson here is to make sure you have safeguards in place so that tweets are read by a second party before they’re posted. (This also prevents your interns from tweeting their meltdowns in real time on your corporate blog.)

#2. Offending the person you’re selling to.

When executed well, humorous and edgy campaigns are great for generating buzz. Unfortunately, “humorous” and “edgy” campaigns, are sometimes just plain offensive. If the person you’re offending isn’t in your target demographic then it might not matter much to the bottom line – but when the people you’re offending are the people you’re selling to, you’ve effectively just shot yourself in the foot.  In 2011, American Apparel found itself doing damage control after it tried to launch a plus sized clothing line by making fun of plus sized women, Doctor Pepper saw its approval and “buzz” ratings decline by half after it declared a diet drink “not for women“, and Jackie Magazine had to fire an editor after they decided that “N**** B****” was an appropriate term for a black woman.

#1. Underestimating the Power of Social Media.

After seven years of Facebook, six years of YouTube, five years of Twitter, and approximately $2.7 Billion of Social Media Marketing spending in 2011 alone, some people still don’t seem to grasp that the Internet is a great place for bad behavior to be aired and public ire to be roused.  Anything you text, tweet, or email to a customer can and most likely will be posted by someone somewhere – especially if it’s discriminatory or insulting. Paypal learned this the hard way after it shut down a Christmas toy drive because, according to a customer service rep, “You can use the donate button to raise money for a sick cat, but not poor people.”   The customer running the toy drive posted their correspondence with Paypal to a blog with a moderate readership and the story was soon picked up by Reddit, Gawker, and numerous other blogs. Paypal found itself not only issuing apologies, but also matching donations to make amends.

At the most basic, you don’t pretend the problem doesn’t exist and you don’t ignore the customer having the problem.

Sounds simple right?

Surprisingly, a large number of firms have yet to learn that ignoring a problem doesn’t make it go away.  For one thing, pretending that you don’t have a problem makes you appear either negligent or incompetent.  For another, the longer you fail to address it, the more time it has to spread through social media sites and to the traditional media.  Toyota, BP, and Goldman Sachs have all flubbed this in recent memory –  and all of them have more or less recovered from their missteps. But billion dollar companies have billion dollar budgets and the PR departments to match.

So what happens when a smaller firm ignores the basics?

A good example of “the bad” comes from LiveJournal, Inc., a  blogging and social media site owned by Russia’s SUP:

• At 9:21pm on the 24th of October, users began complaining to the site’s release blog about various features that no longer worked after the most recent update. Among these were various broken buttons and a timed, automatic log-out that redirected users to the homepage at every-few-minutes intervals.
• At  9:29 pm on the 24th, one irate user pointed out that when they logged in they were being connected to another user’s account. More chimed in, some pointing out that they were able to see information such as home addresses, Paypal account information, and whatever other data the user had stored .
• At 11:20 pm, A customer service representative responded that the logging out and redirecting was a feature, not a bug, meant to drive away spam bots. The customer service rep ignored the many posts regarding the privacy issue.
• Over the next two days, hundreds of user complaints piled up in LiveJournal’s release blog and were all ignored. Responses to the continued silence ranged from a very polite, “I’d appreciate more information”, to the less patient, “Communicate, dammit!”,  to numerous assertions that users would be closing their paid accounts and taking their money elsewhere. No response was received to any of these comments and one user relayed that her attempts to contact the company had been met with the response that reps had “no authority to make an official statement”.
• At 12:45 on the 27th, four days later, the company finally posted an update to their maintenance blog wherein they buried a statement that the login/account mismatch error had only existed “for 3 minutes” on the 24th and that there had been “no affect on security”.   No statement was ever issued on the blog post where customers complained. Customers were never addressed directly.

Perhaps unsurprisingly,  the site’s overall traffic has dropped 15%  since October. (This entry posted 12/16/2011.)

It’s not hard to see what LiveJournal did wrong here. From ignoring customers, to pretending the problem didn’t exist, to dismissing whatever problem did exist.

What might be harder to spot is just how much LiveJournal lucked out: No one started a Facebook campaign,  passionate rants were confined to LiveJournal itself, and no one in the media (digital or traditional) thought the company was interesting enough to pick up the story despite the four day lag.

And yet, still, they lost 15% of their traffic.

So, if I may make a humble suggestion: When your customer perceives a crisis, don’t ignore them.

Image Credit: boston.com

In the wake of  the November 7th election in 2000, the Bush campaign flooded the airwaves with commentary about honoring absentee ballots, focusing especially on American soldiers stationed abroad.  By constantly talking about overseas voters, they did a masterful job of drowning out the Gore Campaign’s call for recounts and re-directed the attention of the press towards what they wanted the press to focus on.   In contrast, Christine O’Donnell stumbled on this very point in 2010 with her now infamous “I am not a Witch” campaign ad; by drawing attention to the issue instead of letting it die,  she kept the issue in the news cycle and the conversation focused on a topic that did her campaign no favors.  OWS, on the other hand, has firmly planted their topics  and their issues at the center of the dialog this election cycle.

In point of fact, whatever you think of the OWS protesters and their cause, you can’t turn on the news these days without stumbling across them.  (Even if I didn’t walk by their camp on my way to work every morning, I would know that protesters were camped there.)  Everyone from the GOP candidates to TV’s talking heads has an opinion and all of them are sharing it – keeping press attention and conversation firmly focused on the movement.

It’s an interesting  tactic, and a good one for any marketer or entrepreneur to learn:  Talk about what you want everyone else to talk about,  control the topic of discussion, and keep all eyes on you.

Image provided by: bluemts.com.au

As a society, when we talk about introverts and extroverts positioning for leadership roles, the dialogue almost always runs in the direction of what introverts can do to “overcome” their personalities and appear more like extroverts to others.

According to the Wall Street Journal, about 65% of senior managers surveyed by the TheLadders.com in 2006 felt that introversion was a trait that prevented people from reaching higher management levels. Presumably, as Susan Cain points out in the New York Times this week, it’s because we as a society value “action to contemplation” and “risk-taking to heed-taking.” In fact, we value the leadership qualities and traits of extroverts so highly that we encourage “perfectly healthy shy people to see themselves as [mentally] ill” and, I would contend, purposely blind ourselves to the value of introverts in industries where extroverts traditionally thrive.

In the world of venture capital and investments, for example, it’s rare to find an introvert. Considering the fast-paced, highly aggressive, networking-focused nature of the industry, this is unsurprising.  But is that really best for your company?

Studies conducted at U-Penn have shown that when you have teams of proactive people, an introverted manager can lead them to earn higher profits than an extroverted leader. Adam Grant, who led the study, suggests that this is because an extroverted leader is more likely to want the spotlight to stay on them – which then leads to clashes with proactive employees who are less likely to share ideas and make suggestions to a manager that ignores them. In a start up environment,  where dedication is key, this can be a death knell if it causes your employees to disengage. Introverted leaders also, according to Cain, listen better and work harder than extroverted leaders to implement ideas, an important trait in a startup environment where improvements keep your company running and good suggestions (“raise when you’ll get a favorable valuation!”) can sound a lot like bad ones (“raise money you don’t need!”).

In the end, introverted and extroverted managers both bring something to the table. However, as a society, we tend to only recognize and value the extroverts. Extroversion, however, might not be what your startup needs.

Then, I came across GNIP. I could tell you what they do but, really, they do a pretty good job of that themselves in their product introduction video (in 24 seconds no less):

[youtube=http://www.youtube.com/watch?v=EQN4k5-eW20]

Now, you’ll notice that this video is actually 1 minute and 22 seconds long- but if YouTube were to crash at the 24 second mark, someone watching could tell you what this company does and what pain point they address. The watcher wouldn’t have any details but they’d have a basic answer to the question “so what do you do?“.  Notice that they achieve this using nothing more complicated than a few slides and a clear, concise narration.

So, if you’re considering adding an introductory video to your site, consider this: If I only watch the first 30 seconds, will I know what you do?

Author: Peter F. Drucker and the Leader to Leader Institute

Edition: 2007

Presentation:
Organization – Chapters are broken down by the five questions with two additional sections about Leadership and Self-Assessment. Each section is written by a different co-author who takes one of Drucker’s questions and expounds on it.

Readability – The book is concise but readability varies by the co-author.

Content: Drucker’s five questions, which have been published and discussed by many a management theorist over the years, are:

• What is our Mission?
• Who is our Customer?
• What does the Customer value?
• What is our Plan?
• What are our results?

Each chapter includes a breakdown of the question, and its importance, followed by a quick 1000 words-or-less summary transposing the idea to today’s business world. The book introduces the self-assessment model, the idea that planning is a constant process, and the importance of constructive dissent.

Applicability to expansion stage firms: Brevity is the soul of wit and while I’ll concede that the Leader to Leader Institute breaks down the importance of each of Drucker’s questions in as few words as possible, I’ll also point out that the book (overall) comes across more as a marketing tool for the Leader to Leader Institute  than something useful for an expansion stage firm. Part of the issue with the book is that many of Peter Drucker’s ideas have so permeated modern theories of organization management that, if it doesn’t occur to anyone on your management team to ask these questions before reading the book, you probably have larger issues to address.  Ultimately, the book is useful – but not so much that I’d recommend shelling out $15USD for it.

1. Going to the bathroom while you’re on a call. When you’re busy, the temptation to do this is pretty strong. However, most bathrooms have excellent acoustics (no really, just look at the number of amateur musicians on YouTube who record in their bathrooms). This means that whoever happens to be on the other end of your call (usually someone like me), can hear every zip, flush, and trickle of water. If you really need to use the restroom, just ask the other person to hold and take the minute or two that you need… which brings us to the next worst-practice:
2. Asking someone to hold – and then forgetting you actually put them on hold. At the very least, use your mute button. I once had a CEO ask me to hold, forget to put me on hold, and then I proceeded to spend the next five minutes listening to a contractor berate him for paying with a credit card that bounced. Similarly, if you’re in a small office space (as many expansion stage firms are) and you want your receptionist to tell people you’re in a meeting or out of the office, make sure they know how to put the call on hold so that the person on the other end can’t hear him/her turning and asking you if you’d like to take the call.

Author: Lawrence Friedman

Edition: 2002

Presentation:
Organization – Though the cover, graphics, and chapter pages of this book make it look more than a little gimmicky, the content is actually laid out in a useful, neatly organized, logical way. Each chapter comes with an introduction and summary for easy skimming and browsing. Graphs and figures are neatly labeled and the index is extensive.

Readability – Friedman is conversational and the content is easily comprehensible.
Content:

Friedman’s book begins with an introduction to what he considers the “10 Commandments” or universal truths of going to market. Among these is the challenging idea that not every go to market strategy needs an online marketing strategy. (If you’re like me, you’ll find this particular assertion hard to swallow – but Friedman is quick to provide data and case studies indicating why this might be true for your business). After introducing his universal truths, Friedman goes on to advise readers to choose their target markets wisely, figure out what their customers actually need, decide which sales channels and partners to adopt, and (most important) to make sure they can articulate their value proposition. The book ends with a (slightly gimmicky) ten page “ninety day go to market action plan”. Overall, the book contains solid content and is not afraid to go back to the basics and provide clearly worded definitions for Go To Market and related terms.

Applicability to expansion stage firms:

Friedman’s book highlights many of the issues we at Openview encounter on a day to day basis. It is definitely worth reading before bringing your product to market. The following points especially rang true:

• Validate any assumptions you make about your customers and market… don’t buy into “blue skies” assumptions. Friedman gives the example of, (I myself have encountered this) a software company that goes to market assuming their potential customers wanted an enterprise wide solution. In reality, they needed separate components they could integrate into different departments.
• Figure out if your product is a “need to have” or a “nice to have”. While it’s true that some companies succeeded with a “nice to have” product, the impetus to buy is going to come from solving a pain point of your customer.
• “Filter” your efforts through the right sales channels. Figure out if you actually need high-touch sales reps or if a low touch model will do. At Openview, we’ve encountered many companies where the sales organization has become a perpetual money pit. Where’s the best bang for your buck?
• Be able to articulate your value proposition! As I went over last week, offering a product is meaningless if no one can figure out what your product does.

Title: Sales Management

Author: Robert J Calvin

Edition: 2001

Presentation:
Organization & Readability are the same as before, though Part II is more difficult to skim.

Content:
Part II – Strategy and the Firm

Part II focuses on how to organize your sales force and motivate them to perform.

Calvin provides worksheets to help sales managers determine what type of sales organization they want to build and how they want the architecture within that organization to look. He forces the reader to ask him or herself a number of questions. For example: Is your business more suited to channel sales or direct sales? In what instances do the costs outweigh the benefits? Does it make more sense to organize your sales people by market segment or geography? What are the disadvantages of each option?

Calvin also delves into the more nuanced challenges of organizational planning, asking whether managers are looking closely at how sales teams are divvying up their time and attention to each market and territory as well as whether sales forecasts are realistic or biased.

Calvin’s motivational section focuses on values and positive reinforcement, and strongly resembles Aubry Daniels’ Bringing Out the Best in People.

Part III – Perfecting the Program

The last part of Calvin’s book is split between Performance Evaluations and Sales Force Automation chapters. This section is valuable because it stresses the difference between results and the activities, skills, and knowledge that lead to those results. With sales people, it’s very easy to measure results, but if an organization focuses only on that one metric, they lose the opportunity to improve their existing sales organization.

Because the book is presently 10 years old, I chose not to examine the Sales Force Automation section, as CRM software has evolved greatly in the intervening decade.

Applicability to expansion stage firms:

At times, Calvin offers great tips and asks highly pertinent questions. Overall, however, I think Calvin’s book is most applicable to the expansion stage firm when the firm’s sales organization (or the sales organization it is building) is primarily theoretical. Calvin doesn’t really address how sales organizations play into business growth strategies nor does he address the specific challenges your sales organization faces when you are scaling a business.

1. Put as much grammatically questionable and illogically incomprehensible text on your website as possible. Make ample use of alphabet soups and designs with difficult to read colors. This way, prospects will be forced to download your white papers and watch your tutorial videos.
2. After completing the above, do not let potential customers view case studies or any other material meant to promote your brand without first giving you their phone number, email address, and first born child. After all, it’s not as if the purpose of these materials is to engage said potential customers and hook their interest. Without the ability to glean any specific information from your website at large they will be ultra motivated to give you any information you desire on the off chance that your case studies and white papers will be more informative than the rest of your site.
3. Take as long as you need to get to the point in your product/service introduction videos. It’s not as if television commercials are 30 seconds long for any particular reason. Also, feel free to sound as bored as you would like while narrating the video. Please remember that sound effects, visual effects, and attractive actors trump any actual content or substance you might be tempted to put into the video.

Title: Sales Management

Author: Robert J Calvin

Edition: 2001

Presentation:
Organization – Chapters are broken down into logical sub-sections and the content flows evenly from section to section. Questions and exercises are presented at the end of each chapter. Charts, checklists and sample worksheets are provided where examples call for them.

Readability – Many technical books focus on content, causing readability to fall by the wayside. Calvin’s book is easy to read and convenient to skim for information.

Content:
Part I – Creating the Salesforce

The first section of Calvin’s book discusses building and managing an effective salesforce. In his first chapter, the author makes the point that technology, by itself, cannot be a silver bullet regardless of the times in which we live. Sales managers, according to Calvin, must perform work through other people by hiring correctly, training their hires, and recognizing when non-performers must be fired. The bulk of this section of the book focuses on “Hiring the Best” and “Training for Results”. He offers recruiting tips, best practices for training, and anecdotes gleaned from experience. Calvin stresses that, when done correctly, “sales management is the least expensive, most effective way to increase dollars”.

Applicability to expansion stage firms:
Although his book is ten years old and I don’t agree with all of his underlying assumptions regarding the sales process, Calvin makes some excellent points about sales organizations that are especially applicable to expansion stage firms. Out of these, I believe the most salient point refers to the need for salespeople to bring in more money than they cost after a certain point.

Calvin repeatedly emphasizes: when dealing with a sales team one should “pay them more than they are worth, then make them worth more than you pay them”. In my role here at Openview, it’s not uncommon for me to encounter organizations that embrace the first part of that statement but fail to realize the second.  If your firm doesn’t have the capability to make a good sales person great, then you need to reconsider either your hiring process or your pay structure.

“Look it up.” I told him.

In response, he huffed the sort of sigh that only a six year old can muster. “I can’t.” He told me.

“Why not?” I asked.

“Cause.”

“Because what?”

” ’cause the Internet’s broken.”  At which point, I must admit, I stared at him in astonishment.

His response was surprising to me because we were sitting in my parent’s den where one entire wall is covered by bookshelves – some of them children’s encyclopedias. (Although, to be fair, I also wanted to know what he’d done to our modem/router set up to “break” the Internet.) I introduced him to the encyclopedias and the moment passed.

When I thought about it further however, I realized how similar his approach was to my own in some respects. In this day and age, when we want information, many of us in the venture and entrepreneur communities turn to white papers, research reports, the Internet, and each other.  While these are valuable resources, what we ignore much of the time are books.

So, one of my resolutions for 2011 is to go through some of the books here in our Openview Library and share them with you.  Stay tuned!

“Staffing Dilemmas” are one of the top chaos-causing disruptions. How do you keep enough staffers working when everyone is out and about?

Here are some tips I’ve heard from small businesses:

•  Establish a policy as early in the year as possible. Don’t wait until everyone is asking you for time off to decide what your policy will be.
•  Be inflexible. If you apply the same policy to everyone there’s a better chance of everyone following it.
• Apply the same rules to yourself as you do to your staff.

What are your tips for surviving the holidays?