Archive | Entrepreneurs RSS feed for this section

Steve Jobs And The Jobs Crisis

12 Oct

Homage to Steve Jobs’ exceptional qualities as a business leader has poured out since his death last week.  I’ve been reflecting on the learning and inspiration that I draw from his career relative to the work I do and the economic challenge of this decade, which, ironically, has come to be called the “jobs crisis”.

Apple has been criticized for creating too few jobs: with revenues of $100 billion, it employs only 50,000 people and outsources most assembly to China.  This is shallow, misleading analysis, for two reasons.  First, Apple has created an ecosystem with many high-quality jobs that are predominantly in the U.S.:  the software developers who create Mac apps and the 400,000+iPhone apps written since 2008, the performers who sell their work on the iTunesstore, the IT experts who help people use Apple products, and all the independent professionals who support Apple (design consultants, advertising execs, lawyers, etc.).  And, I could argue, the Android ecosystem arose in response to Apple.

More important, jobs are a symptom of our problem, not the root cause. (However, politicians and much of the media are obsessed with counting jobs.) We have a demand problem and a wealth creation problem.  We’re like a big family that has lived beyond its means for many years and maxed its credit cards.  Now we have to cut back on spending to repay the bank.  The spending cuts made the jobs disappear.  We can reallocate some income within the family to create some value by getting more people working (i.e., the Obama jobs bill), but it does not solve the root problem.

The real solution to our family’s problem is to find new, well-paid work that brings income from outside the family. If we create wealth in the family, we can solve our problems. If we try to make people better off without creating wealth, we get the Greek tragedy.

Jobs and Apple have done an amazing job of creating wealth for the U.S.  Apple has created new demand for products on a huge scale (new work).  It earns a 24% net profit margin (well-paid work).  Critics focus on the outsourced manufacturing.  They overlook the big picture.  Apple’s $100 billion of revenue is global: about $60 billion from outside the U.S. (income from outside the family).  The gross margin from that revenue ($20+ billion) mostly comes back to the U.S. and far outweighs the $5-$7 billion of assembly cost for product sold in the U.S. that was outsourced to China (i).  And then there is the $375 billion of market value that Apple has created for its shareholders, which are mostly U.S. based institutional investors that invest for individuals and retirement funds (ii).

Steve Jobs’ ability to create demand is attested by all the products he introduced to the world: the practical PC, the GUI … the smartphone, the successful tablet, and a lot of good stuff I left in the ellipsis. Even more impressive is his ability, which developed over the course of his career, to create competitive advantage, which creates wealth. Apple’s interlocking system of devices, content (iTunes store), and going forward cloud services has been tough for competitors to crack.  Note that ten years after the introduction of the iPod, Apple has over 70% of the MP3 player market, despite the ease with which an MP3 player can be copied.

As a CEO, Jobs led from passion for his business and his product, not from greed or ego.  CEOs are in the penalty box politically (e.g., the “Occupy Wall Street” protests) just when we need strong business leadership to rebuild America’s wealth.  This is deserved to some extent: there are bad examples out there.  Jobs is the other example:  he came from a modest background, overcame adversity, took huge personal risks when he put most of his net worth in to Pixar and NeXT, built a great company, and made a fortune, of course, but all the while he dressed in Levis and kept his personal life private.  This is what I value most about Steve Jobs.

In the last week, many have called Steve Jobs a genius.  I hope they are wrong because genius is fluke.  We all need to take guidance and inspiration from Jobs’ career to raise our games and do it right.  In the U.S. today we need more jobs: more people who can lead as Steve Jobs did.


GOP seating arrangement changed the debate

12 Oct

Did you notice in last night’s GOP debate that people were less on the attack and more respectful of one another?

That may have been planned to display unity against the President — but it also may have been a result of the way they were seated. Last night’s debate took place around a table.

Understanding the impact of seating arrangements is an important part of nonverbal communication at any meeting.

For example: There are two power positions at any conference table – the dominant chair at the head of the table facing the door and the “visually central” seat in the middle of the row of chairs on the side of the table that faces the door. Choosing the dominant chair may be the most effective way for a leader to control the agenda or dominate the meeting, but it also stifles collaboration. When the leader takes this spot, ideas are then directed to him or her for validation (or rejection) rather than to the entire group. So take a moment before your next meeting and think about the relationship you want to establish with team members. Then choose your seat accordingly: Sit at the head of the table or at mid-point on the side if you want to exert control, and choose any other position around the table if you want to state symbolically that you are an equal member of a collaborative team.

Seating positions may even help create leaders. For example, it’s been noticed that people who sit at either end of the table in a jury room are more likely to be elected foreman and that persons in visually central positions (that mid-point previously mentioned), are also more likely to be perceived as leaders. In the jury scenario, choice of foreman is mainly about the symbolism of the head-of-the-table position, and with the central position, it is more about the power of eye contact: Because the person seated in this central location is able to maintain eye contact with the most group members, he or she will be able to interact with more people and as a result, will most likely emerge as the leader. (So, if you wanted to enhance the leadership credibility of a junior team member, it would be wise to seat him or her in one of these two positions.)

Have you ever noticed that when two people sit at a table, they often choose chairs on opposite sides? This is automatically adversarial in terms of territory – the kind of seating arrangement that divorce attorneys and their clients typically adopt. Groups of people may also sit on opposite sides of a conference table and unwittingly divide into an “us” and “them” mentality.

Sitting at right angles is the arrangement most conducive to informal conversation. Sitting side by side is the next best. This is important to remember if you want to foster personal ties between team members.If you intentionally mix up the seating arrangements (or hold your meeting at a round table – as they did for the debate) you can discourage the tendency to “take sides.”

The Five Habits Of Highly Innovative Leaders

12 Oct

We’re proud to be publishing the first appearance of the World’s 100 Most Innovative Companies, a ranking that we hope to make an annual (maybe even quarterly) event highlighting the companies that investors believe to be the best at achieving consistent and profitable innovation. You can see the complete list here, and the gallery attached above covers advice from CEOs and leaders of companies on the list.

The list and its methodology is the result of years of research on corporate innovation, encapsulated in the new book, The Innovators DNA, by professors Clayton Christensen (Harvard Business School), Jeffrey Dyer (Marriott School of Management at Brigham Young University) and Hal Gregersen (INSEAD). They, in turn, relied on proprietary financial analysis done by Michael McConnell and his team at HOLT, a division of Credit Suisse. Here’s a video chat I had with Profs. Dyer and Gregersen talking about their research:

The great insight from their work is that innovation is well within the reach of mere mortals not named Steve Jobs or Jeff Bezos. Successful innovation requires the right culture but new or incumbent leaders frustrated with a slow pace of innovation can start making change happen by behaving differently. It takes work, and may require some retraining, but the authors’ point is that anyone can innovate if they follow the five skills of disruptive innovators. They are:

  • Questioning, which allows innovators to challenge the status quo and consider new possibilities. Example: Howard Schultz of Starbucks and Pradeep Sindhu ofJuniper Networks.
  • Observing, which helps innovators detect small behavioral details –in the activities of customers, suppliers, and other companies – that suggest new ways of doing things. Examples: Rakesh Kapoor of Reckitt Benckiser and Jean-Paul Agon of L’Oreal.
  • Networking, which permits innovators to gain radically different perspectives from individuals with diverse backgrounds. Example: Marc Benioff of Salesforce. See Victoria Barret’s take on Benioff here.
  • Experimenting, which prompts innovators to relentlessly try out new experiences, take things apart, and test new ideas. Example: Bobby Kotick fromActivision Blizzard.
  • Associational Thinking— drawing connections between questions, problems, or ideas from unrelated fields—is triggered by questioning, observing, networking, and experimenting and is the catalyst for creativity. Example: Natura Cosmeticos, the “Avon of Brazil,” which uses such cross-disciplinary teams to dream up new personal care products.

There’s a lot more to our package around the Most Innovative Companies list, including an overview of the methodology and research on Tom Post’s contributor page, a video interview between Forbes publisher Rich Karlgaard and Juniper CEO Kevin Johnson. We’ll have a lot more profiles and videos with companies on the list over the next few months.

Buzz Builders

12 Oct

Dorothy Pomerantz, 08.24.11, 06:00 PM EDT
Forbes Magazine dated September 12, 2011

In an increasingly on-demand world, how do you get people to tune in and stay tuned? Take a cue from Ian Sander and Kim Moses. Six years ago the husband-and-wife duo produced a television show called Ghost Whisperer, about a 25-year-old girl (played by Jennifer Love Hewitt) who can talk to ghosts. CBS picked it up and scheduled it to run on Fridays at 8 p.m., a ratings dead zone. Survival meant generating some serious buzz–and not waiting for the network’s help.

The pair organized a conference where paranormal-fanatic bloggers could meet the stars of the show before it aired. They also created a crystal ball game for ghost-fan forums online. Expenses ran short of $100,000, cheap by TV standards. Result: Ghost Whisperer averaged 10 million viewers during its first season–the highest-rated Friday night show that year. Over the next few years (it ran for five) Sander and Moses made a Web series from a ghost’s point of view, called The Other Side. When Comic-Con, a film and TV convention, came around they produced a Ghost Whisperer graphic novel. In some cases sponsors like General Motors covered most of the costs.

Sander and Moses got so good at building buzz they decided to make a business out of it. Today the couple runs two outfits headquartered in the old Animation Building on the Disney lot in Burbank, Calif.: Sander Moses, their production arm, and Slam, a marketing agency that helps TV and movie producers use the Web to snare viewers. According to SNL Kagan, a media research firm, even if a show makes it through its first season, it has only a 30% chance of being renewed the next year. “We have to create an interactive playground,” says Moses, 50.

Sander, 56, and Moses started flirting with online marketing in 1996 while working on the show Profiler. Their lead character, FBI agent Samantha Waters, was tracking down a serial killer who called himself “Jack of All Trades.” One episode took place in Jack’s lair, where the killer typed on his computer. The camera peeked over his shoulder to reveal the URL he was looking at– Viewers who went to that website could chat with the creep and tour his loft. The site was such a hit that NBC executives, worried about the message they were sending, asked to have it taken down.

These days Sander and Moses never make a show without a marketing plan. Last year they pitched a reality show, Psychic in Suburbia (about psychic Maureen Hancock and her family), to the Style Network. The attack included a mobile application that allows users to shake their phones like a magic eight ball and get Hancock’s answer to any question. The show premiered as a onehour documentary in July; Style will decide whether to pick it up as a series in October.

In another project, meant to highlight the show Ugly Betty as it went into syndication earlier this year, Slam created an app that lets viewers “Be Bettyer” by decorating a photo of themselves with Betty traits like thick eyebrows and braces. For Regis and Kelly they created an app allowing fans to run a virtual race in high heels, winning coupons along the way.

“We love what they’re doing,” says Eric Berger, head of Sony Pictures’ Crackle, which hired the couple to create a Web series called Monster Heist, about monsters planning to steal jewels. “They think about the 360-degree experience.”

The Definitive Guide To Selling More Of Anything Online

12 Oct

The web has done wonders for shrinking sales and marketing budgets. But we are a long way from getting the most out our e-commerce efforts. What follows will help.

Step 1. Choose Effective Keywords

The first step in increasing the amount of sales generated through your website is driving targeted traffic—members of your target market that have an interest in the products and services you sell. Search engines are the best conduit. They pair you with people who are actually searching for topics related to your product or service.

Keywords are, well, the key. You can add contextually relevant keywords to your web pages and have other websites point links to your pages to help you rank high in the search-results stack when people hunt for those terms. Or, you can pay the search engines to rank high for a particular search term.

How to pick keywords? Really try to anticipate what your potential prospects will type into the search engines to buy or learn about a product on a website like yours.

Keywords need to meet three sets of criteria:

Popularity – The amount of search volume that each keyword generates.

Relevance – How the keywords relate to what members of your target market are regularly querying on the search engines.

Competitiveness – How easy it is to appear high in the search-results stack for a particular keyword. “Ease” is defined by how many links are already pointing to websites that naturally appear–as in, you didn’t pay for it–for a particular keyword on an ordinary search page. The more links, the more competitive your site has to be to show up. Ease can also defined by how much you have to pay to appear prominently on the “sponsored” search results, which line up on the right side of the pages when people search a particular term.

Step 2. Load Up Google Adwords

Next, load up the Google Adwords Keyword tool and enter your list of keywords into the search field provided.

Popularity and relevance. To get a feel for popularity and relevance (two of the three important criteria), under the section that reads Match Types,ensure that you have the [Exact] box checked. This filter instructs the tool to measure the quantity of searches for your keyword(s) when the exact phrase is entered, without any additional phrases.

For example, if you enter the keyword “buy used car,” checking the [Exact] box will give you the search volume for the exact keyword—as opposed to giving you search volume numbers for key phrases in which “buy used car” is included, such as “buy used car in Brooklyn.”

Competitiveness. Check the competitive landscape for each keyword by analyzing the quantity of links pointing to the websites that appear on the first page of Google’s search results. (For a full explanation of how to do that—and it’s not that hard—check out Ten Myths About Social Networking for Business.)

Step 3.  Decide How Much You Want To Pay For Placement

For paid search traffic through Google Adwords, load up the Google Traffic Estimator. Enter in what you think you could afford to spend per click of an advertisement in the box labeled Max CPC. The column labeled Estimated Avg. CPC will tell you how much you can expect to pay for each click of an advertisement, which simply equates to how much you pay for each visitor to your website. The tool will also tell you how prominently you will appear on the search engines and how much traffic you can estimate.

Step 4. Hone Your Calculations

To get a more accurate number of what you can afford to pay, estimate how much traffic you can expect to convert. On some of the lowest performing websites where some optimization has been performed, I have seen websites sell to just 0.5 percent of the people who visit. Once you have optimized your pages further, you can expect your conversion rate to rise. Among the highest converting websites, I have worked with companies that sell to up to 10% of their targeted email lists, which have been built through search traffic.

Let’s say after some modifications to your sales pages you conservatively estimate that 0.5 percent of the people visiting your website will make a purchase. Say also that the average profit margin per sale is $20, so you will make $20 for every 200 people that visit your website. Thus you could afford to pay $.10 per click just to break even (200 x .10 = $20). So if you want to double your money (a 100% return on your investment) you can afford to pay $.05 per click.

Another way to look at this: Multiply your profit margin by your expected conversion rate to get how much you can afford to pay per each click and break even. Then multiply that cost per click by your desired profit percentage. So, in this example, if you want a 50% margin, take $20 (profit) x .005 (conversion rate) x 0.5 (desired profit percentage). Maximum cost per click = $.05

Step 5. Track Your Results To Keep Costs Down

Track which keywords make you the most money. You may find that your conversion rates are higher for certain keywords, meaning that you could bid a higher cost per click. Through Google Adwords, you could simply do this by adding a snippet of HTML code on your Thank you page, or the page that loads after somebody completes a desired action on your site, such as subscribing to an email newsletter or making a purchase.

If your conversion is influencing people to make a phone call to your office, you could also have your programmer load a unique code next to your phone number that is associated with a keyword bought on Adwords.  When a web visitor calls after clicking on an Adwords ad, have them read that code. You will see which keyword referred that customer, allowing you to measure how profitable that keyword is. Browse through the Google Analytics App Gallery for more phone tracking options.

With Adwords, you can keep a lid on costs by using keyword-matching options, such as Broad, Phrase, Exact, and Negative keywords. (Example: Negative keywords allow you to add keywords for which you don’t want your ad to appear.) These matching options allow you to configure your ad to only appear for the most relevant queries.

Google also decreases your cost per click when your ad generates more clicks because of its precise relevance. Google measures this performance with a metric called your Quality Score. Increase your quality score by picking keywords that are relevant to your ad and putting those words in the copy of the ad.

Important here: Ensure that the landing page that loads upon clicking your ad produces what was promised in the ad and what the Google searcher was seeking when she performed the query.

Step 6. Write Guest Posts On Blogs And Websites

Before you court any editors, study their sites so you know how to pitch an idea that is relevant to their editorial mission. Warm them up—and demonstrate your expertise—by posting comments on articles at those sites. Outline a curriculum so that editors will know you have something to say week in and week out. Always include links pointing back to your website in a contextually relevant place in each article. Of course, add a compelling one-or-two sentence bio at the end of each post. When somebody clicks on that link they should see a prominent call-to-action to buy a product or subscribe to an email list in exchange for an incentive.

Step 7. Set Up Reciprocal Content-Sharing Relationships

Partner with companies that either sell products or services that compliment yours or publish on topics that members of your target market consumes. The simplest way to achieve this is by posting links to your partners’ websites in exchange for having them point links to yours. Some people do this for search engine exposure, but the link equity is diminished because you are also linking out to the partner’s website. (Search engines award you with more link equity for one-way links—that is, links pointing to your websites from web pages to which you don’t link.) However, don’t get discouraged. If you pick the right contextually relevant and active partners, the targeted traffic will still help direct people that buy or help promote your products or services.

Step 8. Buy An Online Ad (But Be Smart About It)

This is more of a daily ground-and-pound exercise than people realize. Start by looking at the front page of Digg, Reddit, Stumbleupon, Fark, and other news aggregators. Find which website is popular that day with content that is relevant to yours. Check their advertisement rates, and see if buying placement on that website will get you on the page that is being distributed virally on social networks. Another method: Visit Google Trends and buy advertising on pages that are prominently ranking on the first page of the organic SERPs for contextually related terms that you see listed on Google Trends.

Step 9. Keep Visitors Engaged

Reward the people who click your website or ad by making it easy for them to navigate to what they were interested in. This is as important as getting prospects to click in the first place.

Mind their eye paths. All calls to action should be along visitors’ natural eye paths. Studies have found that people typically direct their eyesight to the upper left part of your website when they log on. Keep as much critical information “above the fold” as you can—meaning don’t make people scroll down to find it. Phone numbers, contact forms, quote-request forms, interactive maps—all of the information (or links to it) should be above the fold.

What to give them. Add a form that allows them subscribe to your email list or promote your hottest seasonal offer in that section. If it’s an email list subscription form, offer an incentive such as a free digital product. Webinars, podcasts or white papers work well, as do entries for a contest to win one of your products. Create a blog with some of the best content in your niche and simply offer free updates by email.

Keep people up to date. If you generate a sizeable amount of leads from your social networking updates, add badges to your Facebook or other social profiles that allow people to stay up to date with your social networking updates.

Establish credibility. Add third party credibility indicators like testimonials, press mentions, Verisign badges, and other certifications that help people trust your platform.

Don’t forget the up-sell. Just like at the grocery store, hit visitors with other enticing products in the checkout line. Recommend the purchase of accessories and other ancillary products–car battery chargers, insurance, whatever. Have these supporting products load with a check box that allows people to add them to their cart.

Step 10. Bring On Affiliate Selling Partners

An affiliate will sell your product in exchange for a commission. Commission Junction is an affiliate network that will facilitate the sale of your products. Commission Junction can also connect you to affiliates who will generate leads for you in exchange for a commission. Most Commission Junction advertisers have lead forms or shopping carts to take sale orders online.  The Google Affiliate Network also boasts a similar offering.

Step 11. Test, Test, Test

Don’t take my word for it–test your pages. Use Google Website Optimizer to load different versions of your landing pages. Use Google Analytics to identify which version of each page influences the most people to do what you want them to do on your website. Set up Goals to track the loading of Thank you pages and outbound clicks to see how many people click on your social media digital assets.

Also test the old-fashioned way. Have a customer browse through your website while you stand over her shoulder. If somebody exits a shopping cart, offer a gift card, coupon, or other incentive to have her fill out a survey, so the dissatisfied web visitor can tell you what’s wrong with your check out process. Track the points where people tend to abandon their shopping carts and make adjustments.

Follow those 11 steps and you’ll see it in your top line sooner than later—no matter where the economy is headed.