How To Solve Marketing Problems for Startups using Social Media ?

Social Media Marketing

My top tip to promote your start up business with social media is to focus on one area of conversation topic and to be very selective about spending any money on advertising at all. I am very strict with my own time management to read new articles and stories from reliable and professional sources. You can comment on reputable online trade journals with links back to your website or blog but make sure you add value to the article and not just an aggressive sales pitch. Be prepared to give before your receive.

I started my business in 2008 with just £1 and a smartphone and a very niche service. I had to plan my blogs and tweets with precision.

The quality of my business connections was more important than quantity of connections. I am focused on how large retailers are using social media locally and I need to hangout online and offline in places where my clients would be.  I choose a blend of Retail trade press and individual blogs and tweets from a small group of practitioners, rather than over hyped general thought leadership with no substance or just a ‘rant’.  I am a loyal viewer of Bloomberg West too, broadcast in the UK at 23:00 on Bloomberg TV. This programme gives a good insight with interviews from the people running the future technology businesses in Retail.

I also am a great believer in tracking down original data to back up my thoughts for my own social media feeds, for example, we published an article for our Social Retail Blog recently which took my team 3 weeks to prepare behind the scenes. It was audit of over 20 large retailers and how they were developing their local social media strategy, or not as our results showed.

So when you’re starting a business and you have very little cash resource for paid advertising, I would recommend social media is the only option to help you connect with future clients and empower them to talk about you in their own words. This means you must focus your business on adding value to your clients’ whilst constantly keeping an eye on your competitors and changing with your environment.  There are no short cuts so invest your time wisely and be focused.

In a B2B context, try and get as many opportunities to speak at industry events and possible and tweet live from conferences so people can see that you’re  contributing towards communities.

Most importantly, don’t give up! Treat every client with a personal service and ensure that they are 100% satisfied with you. As the UK is coming out of ‘The Great Recession” there has never been a better time to start up a business and use social media to grow your connections at the speed of a tweet.

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I could tell you, but then I’d have to kill you.

Startups numbers

Recently I was delighted to write a piece for this illustrious blog entitled Just because you build it doesn’t mean they will come and it appears to have gone down pretty well so the equally distinguished owner of the blog has asked me to have another go. He sent me an email in which he said:

“Any chance you could do me a post on 5/6 most critical numbers startups must know (or put together in Biz plan) to give investors a confidence that they really know their customers, and market.”

And it kind of got me thinking, on the face of it this was a really straightforward question which has a very clear answer, but actually this was a lot more difficult than I anticipated given the increasingly large number of business metrics, analytics and statistics available.

As a result I pondered the question over the weekend by the beach in Greece (I know it’s a hard life), I had a few extra cold coffees, got a bit of a tan and decided on the following 5 key numbers that early stage investors look for.

Now, before you continue I would like to point out that the key numbers I have highlighted below are by no means the only numbers an entrepreneur should know and this list is no a one-size-fits-all prescriptive list. Further, as you will see I am not really focussing on digital metrics per se, as you can tell from the above blog post I think the digital world somewhat deludes itself that it operates in a separate space from other traditional businesses. In my mind it doesn’t, it might have number of web based statistics rather than footfall through a shop door but actually in my mind these numbers are simply a means to an end rather than an end in itself.

So with that in mind here are my suggestions for the key numbers an entrepreneur should know in order to give investors confidence:

1. Cash, Cash and once again CASH!

Cash is king!This is the mantra within the exciting world of accountancy (no really, accountancy is all sex, drugs and rock and roll…honest), as it has become almost universal truth that early stage businesses fail because they run out of cash not because they aren’t profitable or their business concept is flawed.

Therefore we look firstly at your cash flow predictions to see how far the money you are looking for will take you. Ever watched Dragons Den? Often the Dragon(s) like a business but don’t think the money being asked for is enough to do what the entrepreneur wants to achieve and so they decline.

This is the reason. So know what your cash flows look like. What is your worse month in terms of cash balance? How many months “headroom” does that give you? What will your cash balance be if your sales forecast comes 2/3 months later than planed? How long with the investment sought last for? What can you do to manage costs? All of these questions are in the mind of the early stage investor as he wants to get the maximum time for the money being invested as, from bitter experience, they know that the optimistic plans that entrepreneurs present are far from conservative and will take a lot longer than anyone anticipates.

2. Proof of concept

Early stage investors largely want to see some proof that there is a business before they will invest. This is often the Catch-22 situation that entrepreneurs find themselves in as they have a great idea but that doesn’t interest the professional investors, be they angels or funds, unless there has been some start-up capital used to prove there is actually a product or market there. Entrepreneurs will usually have to source some initial proof of concept funding internally (recently I heard it described as Friends, Family or Fools which I thought rather uncharitable even if true).

If you have managed to raise that early capital to prove a concept then make sure you know the numbers inside and out. After watching over 100 presentations in the last year I can tell you that nothing ruins an entrepreneur or management team’s credibility faster than not knowing the detail of their initial results. So study them, learn them, inside and out, back to front. Understand what was good, what was bad and what the opportunities are to develop from this. And be honest, we have usually seen it all before and we are usually pretty good at spotting mistakes so tread carefully when we ask questions (and try to be nice…one entrepreneur decided to lecture 4 accountants about why we were wrong…only we weren’t, he was….didn’t go well).

3. Words = numbers, Numbers = words

The final tip I would give you is make sure your forecasts, or as we would call it a financial model, match the business plan and vice versa. And make sure, particularly if it is prepared by an accountant or advisor, that you spend time to get to know it and understand what is going on. You don’t have to become an accountant overnight but you do need to really know what is going on in your business (or in management jargon speak what are your Key Performance Indicators). Traditionally entrepreneurs spend hours pouring all over their words and presentations with barely a backward glance at their forecasts, which is odd when professional investors usually do the opposite.

To help you along I have previously written a piece on the art of financial forecasting which might offer some assistance when preparing forecasts but the key things that investors look for are:

Sensible revenue assumptions based on the proof of concept which show that the numbers look reasonable. e.g. for an online retailer key metrics such as number of page views, number of sales, cost per customer acquisition etc. are all vital so that they can judge whether the forecast scalability is achievable.

Understanding of cost base and the ability to match costs with scaling revenues (which is controllable) rather than costs dictating revenue requirements (which is not controllable). e.g. Sensible wages and infrastructure costs (such as offices and equipment) which grow as revenue grows, and hence can be restricted if revenue fails to grow as expected.

Detail which indicates planning and forethought. My biggest bugbear is entrepreneurs that simply state that they will spend £50,000 on “marketing”. What type? Where? Internal (i.e. recruitment) or external (i.e. via an agency)? And a million questions like this and whilst we don’t expect you to know every single detail we do expect you to have had some discussions so that you know that the costs you have included are achievable and that you know where you will start as soon as the investment is secured. My favourite presentation, by way of an example was the entrepreneur that was going to grow a market leading consumer brand spending £500 per month on PR (and for those of you that haven’t worked in PR…well lets just say this is unlikely to go a long way) albeit the entrepreneur confessed after questioning that he hadn’t bothered to speak with the PR agency in question to check if this was reasonable.

So there you have it. My top 3 tips when it comes to the numbers investors look for and I am 100% certain that this is not what was expected when the initial blog was requested a couple of weeks ago. I am sure the question was more concerned with click through rates, cost of acquisition, individual page views and the like. But here’s the thing, whilst all of those are very interesting and help build the picture an investor is only interested in one metric, ROI (Return on Investment) and so what they really care about is if their investment has a chance of making it to the next level (risk), whatever that might be, and what are their potential profits at that point (return). Everything else is just there to help them assess and justify the final decision.

Martin Spiller is on Twitter @MartinRSpiller

Agile product development for Startups (Part two) – Getting the initial Product Backlog

Agile startups

In the first part of this article, I provided some high level steps to get you from an idea to a user-centred Product Vision supported by personas.

In this final part, I’ll touch on one of the tools you can use to build on those artefacts and get an initial version of the Product Backlog.

Now, irrespective of how you are going to deliver this product or service, you will need two vital foundation elements to make sure you build the right thing, and build the thing in the right way.

The first is a business value model. What are the goals you are trying to achieve from this product or service? You should have a pretty good idea of these from the work you did in defining the Product Vision.

The second element is a list of the critical success factors that will determine if you have met those goals. In short, how are you going to measure if you are delivering the value you want, and how are you going to ensure that you are not wasting time and money over-engineering this to a point beyond what is actually needed. Agile organisations and teams are focused on delivering “just good enough, for now”, and no more.

A simplistic example might be to have a goal for the next car you are going to buy of “carrying my immediate family”. Initially, that might be just you and your partner. You only need two seats. But over time, your family may well grow, and you’ll need more seats. But you don’t need them right now.

The element of time, and the order in which the product or service may evolve over time is missing from the Product Vision. So we move to use the next Product definition tool in our toolbox – The Product Roadmap.

Again, I’ll refer you to the excellent resources made available by Roman Pichler. His Go Product Roadmap is an excellent tool, although of course other roadmap formats are available. The Go Product Roadmap was published late in 2013 by Roman, and I have recommended it to clients ever since.

I won’t go into the details of how to work with the roadmap, as Roman does an excellent job of that.

So I’ll skip forward in time to a point when you have completed your roadmap. I suggest you read through the presentation and explanatory material on Roman’s site before going further.

Now with your roadmap completed, you have versions of your product or service identified, each with a target completion date, goals, a high level list of features and the metrics you will use to track if you have met the goal for that version. It will look something like this

Product Roadmap Example

Now if you look at the features, goals and metrics across the different versions of the roadmap, and rotate them by 90 degrees, you might end up with something like this.

product backlog example

Let’s review what we expect to see in a Product Backlog, at a very basic level.

1.A Prioritised list of features.
2. Each feature should have an associated business value that aligns with
the overall business value model.
3.Each feature should have measurable success factors associated with it to
ensure we deliver to the right levels of quality – “Just good enough for
now, and no more”.

You have created a very high level Product Backlog!

Going through the steps in part one and two of this article will give you a simple framework to get you to this initial Product Backlog. It can be considered the Launchpad for the project.

Be aware though, that there will be a lot more work that will be done on reviewing and refining the backlog throughout the life of your project to make this brilliant idea into a successful product or service.

I wish you all the luck in the world.

Agile product development for Startups – Part one – First steps

Agile Product Development

So you think you have a brilliant idea that will become a hugely successful product or service. Congratulations!

But how do you turn that idea into a well considered, structured game plan for how you will turn your concept into reality?

Traditionally, you’d do a bunch of stuff around market research, business plans, big project plans and a whole heap of things before you get anywhere near building the thing. But you’re an Agile startup right?

In these short posts, I’ll be referring to the great work of Roman Pichler. I consider Roman to be at the top of the tree when it comes to Agile Product Management specialists. His site has loads of detailed background and resources on the areas I will just skim over.

So how do you quickly get from a concept to an initial Product Backlog you can start working with? Here’s a high level of the first steps you probably want to take.

Step 1 – Understand your users. You should create personas for the different types of user your concept is aimed at. A persona is a fictitious person who represents as closely as possible a typical type of user of your product or service. Personas are important because they remind you that you are developing a product for people, not generic user types like “Author”, “Editor”, “Administrator”, “System User” etc. In most cases, you’ll have multiple personas to represent the different types of people your product is for. Make your personas visible in your team space to remind you everyday whom you are designing for. You don’t have to define loads of detail up front. Your personas will evolve as you learn more about them through user testing and other forms of feedback. Here’s a short definition from the Agile Alliance.

Step 2 – Develop the Product Vision. In short, you need to define who are your users, what of their needs are you going to address, a super high level view of the capabilities your product or service will provide to meet those user needs, and finally, what’s in it for you? You should also define a one sentence “vision statement” to encompass the whole concept. A vision statement for YouTube might be “A free online video hosting, sharing and streaming service funded by advertising”.

The Product Vision is important because it provides scope boundaries. We know that things move in and out of backlogs as we gather insights and inspiration.

We may define a Product Vision for a new car, and as we learn more about our users and our needs, an initial view that they want four seats may change. They may want six seats, because in our target market, people often travel with the whole family. But it’s still a car.

However, if our Product Owner explains that we need to provide 50 more seats, spread over two decks, that’s not a car any more. It’s a bus, and that doesn’t fit within the overall Product Vision.

That’s not a bad thing. It doesn’t mean we say “No, we’re building a car, so we won’t do that”. If our users really need a bus, we should reset the product vision and the steps that follow it. What we have discovered is that the car is not the right product to build.

The Product Vision is also very important to align understanding and expectations early from stakeholders. If you are going out to angel investors or other routes to seed funding, the PV and other artefacts will be absolutely vital to get your concept across concisely and professionally.

Roman Pichler’s Product Vision board is a fantastic resource that I have introduced to many teams. I wholeheartedly recommend it. Here’s a link to Roman’s site.

Once you have your Personas and Product Vision established, you have a solid foundation to work from. The PV is vitally important, but it lacks a critical dimension – time. In my next post, I’ll explain how you build on the Product Vision to move towards creating that Initial Product Backlog.

Just because you build it doesn’t mean they will come!

Before we start, and to prevent you wasting time if you don’t like what I am about to say, I am not a techie. Not in any way shape or form. I barely manage to operate my Mac let alone advise on the finer points of the dark magic worked by you technocrats out there. However, I have always followed my good friend Shashank’s blog with interest and love to read different views on events out there.

So when he asked me to pen a follow up to his informative and interesting article Seven ways for start-ups to monetize business about how start-ups might scale their businesses once they have established their revenue model, well how could I refuse. So here are my 5 key thoughts, and perhaps (hopefully) they are not what you might expect:

1. Oh, let’s go back to the start

Shashank’s piece identified many, if not perhaps all, of the revenue models available to tech start-ups in a very easy to read and useful manner. What I don’t think he stressed enough is that in my view every single start-up must identify what the applicable revenue stream(s) for their business is (are).

One of my roles (I like to keep it plural) is with the Jenson Seed EIS Fund which made 35 investments in early stage businesses during 2013 and has made 7 so far in 2014. To do that we have seen a lot of business plans during to get to these investments and one of the key failures we have seen is that the entrepreneur involved focuses too heavily on the operations and totally ignores the end customer. Worst still this is most common with pure tech companies who often appear to think that the benefits of their product are so obvious people will find them.

So my advice is look at the most applicable revenue model for your business and make it integral to your vision and business. It can change, and develop, but there are plenty of case studies out there you can learn from. I know you are a disruptive new business and there is nothing else like you out there (raises eyebrow and asks quizzically….”really?”) but if you don’t have revenue you are either a charity, a project or bust.

2. Know your enemy

Most start-ups, whether in tech or old world, fail because they run out of cash. In my experience they run out of cash largely because their revenue predictions fail to materialise as they predicted or at all.

So my advice is get to understand your prospective customers. Spend time with them if possible. LISTEN to what they are telling you and sometimes stop evangelising about your product long enough to take it on board.

Is your product a nice to have? A must have? How does it compare to the completion? Accept there is always an alternative and clearly those alternatives are competitors. Understand the different buying cycles and timings particularly in the B2B environment. Be clear about how difficult it will be to break through in the B2C environment. Being “disruptive” might not be enough.

In short, just as you would in a military campaign, understand your customers as intimately as possible because to know them makes it easier to reach and convert them.

3. Let’s stay together

Once you understand your customer you need to test, test and retest different ways of monetising him. Your original vision might change, as might your revenue model, you might have to pivot (shudder because this word is often misused and I have tried to ban it in our investment panel meetings) but by testing different ways of reaching customers and getting money from them, once you have them make sure you stick with that model.

Too many start-ups assume that their revenue model will work based on no data. As an investor we tend not to support this, and as a business owner I think it is commercial suicide. You need to know how your customer wants to deal with you or how you are going to monetise him most efficiently and then you can stick with that, and them.

4. Do[n’t] stop believing

I was once asked if I loved my products. The question was asked when I co-founded and grew a giftware company (teddy bears, photo frames, key rings etc) to become one of the largest in the sector. My answer was a categorical no. I love my business. I only love my products if customers are buying them and they are making money for my business.

It appears to me that too many entrepreneurs these days love their businesses or products a little too much. Sometimes it is worth taking a step back and considering if what you are doing really has a future or if it needs to change. Whilst persistence beats resistance, blindly banging your head against a brick wall will only lead to a bad headache (often characterised by the phrase “we need to educate the customer”).

5. Bring the noise

If you have identified your revenue model(s), understood your customer and constantly tested and evaluated the data you have received objectively then you should be ready to go. If that is the case, go and go hard. Put all your resource and effort behind supporting this and grab as much scale as you can manage as quickly as you can manage it before somebody else does.

As a final observation, the tech revolution has brought many great and wondrous things and appears set to deliver for a lot longer. One darker side that I have witnessed is a certain complacency in the tech sector, which gave this blog post’s title. However, in my experience in business you might build it, but it rarely makes them come. You have to drag them (metaphorically) kicking and screaming.

For those of you that might have been wondering I decided to use song lyrics for each of the headings. To stop you all going nuts the answers are:

1. Coldplay – The Scientist
2. Green Day – Know Your Enemy
3. Al Green – Let’s stay together
4. Journey – Don’t Stop Believing
5. Public Enemy & Anthrax – Bring the noise

Sorry if they are a little tenuous…but it amused me!

About An Author:
Martin Spiller describes himself on Twitter as an entrepreneur, consultant, lecturer, investor, accountant, barrister (non-practising) and is fuelled mostly by caffeine and nicotine. Martin can be reached on Twitter @MartinRSpiller

Seven ways for Start-Ups to Monetize Business

monatize startups

Most startups emerge from entrepreneurs’ sheer passion to develop something that satisfies their creative inquisitiveness, and therefore they are often clueless as to how to monetize their products and services – or perhaps they end up developing something that is impossible to monetize. So now the question is how these creative geniuses can reap the benefits of their inventions, or what they must keep in mind from a monetization point of view. To answer this question I have compiled list of business models that can potentially be used by startups to monetize their business propositions.

1.SAAS Pay-As-You-Go or Monthly Subscription Model

Widely used in this cloud-based share economy, the self-service subscription model has become an instant hit among startups these days. Salesforce pioneered this model when they offered CRM services online to businesses without the need to install any software on their local server. These services are mainly pay-as-you-go, where users can avail themselves of services as per their usage (e.g. iTunes). However some business offer monthly subscriptions, where the consumer has to pay a fixed monthly cost for usage. (e.g. Hootsuite, & NetFlix)

2.Pay-per-click or Call to Action Display Advertising

This is one of the very old models and is mainly used by the publishing industry or businesses who have managed to build big communities. The idea is to build huge readership (e.g. Tech blogs like TechCrunch or web portal like Yahoo) for your content or create a community (like Facebook and LinkedIn) where users can engage with their friends, families, colleagues or like-minded people, and that helps service providers to understand their users’ intent and interest and to display advertisements and earn money on pay per click or call to action. (e.g. Facebook Ads)

3.eBay-Like Marketplace Model

This is an eBay model where businesses can facilitate transactions between buyers and sellers. This model can be complicated as the startup has to act as an intermediary, which means they have to make sure smooth of payment transactions, delivery, customer service, warranties and returns.

4.Affiliation Based on Price Comparison

Price comparison sites like GoCompare.com, Comparethemarket.com, Priceline.com and Kayak.com created a relatively new model among affiliate marketers where they compare a product’s price from multiple suppliers so that the consumer can choose the best one.

5.Data Licensing Model

In this API world, Data Licensing has become a very lucrative way to monetize your businesses. Usually these kinds of businesses have access to large public data from social networks and become aggregators like Gnip, DataSift and Rapportive.

6.Uber and WhatsApp like APP Economy

This is a reincarnation of the old client-server economy where users can download pieces of software (called Apps), especially on their smartphones and tablets, to play games , watch movies, go shopping etc. Just to give you glimpse of how big this economy is getting these days, recently, Uber (Taxi Booking App) and WhatsApp (direct messaging App) are valued around $17bn+ by their respective investor and buyer.

7.Amazon like Traditional Commerce

The old ecommerce still exists, where, like Amazon, businesses can sell products online. However due to a serge in smart phones and tablets, commerce is focusing very strong around the App economy.

The gist is that if you are building something you are passionate about, you must think of how you monetize your product from day one. It could be another Facebook, Twitter or call of duty game or eBay- or Amazon-like marketplace or retail stores or It may fell across several categories, as defined above, but the sooner you have an idea of how your venture will make money, the more likely is your chance of success.

Kabir , Frank Underwood, Mark Zuckerberg, WhatsApp – hey ho 2014

Facebook and WhatsUp

I have finally managed to get a moment or two to spend writing a blog post. Following birth of our first baby, the last few days were as hectic as I have ever known in my life, with no respite from changing nappies, reorganizing furniture and looking after both mom and baby, however, during all this madness, I also watched house of cards series two, which like season one is full of Frank Underwood’s antics around Shakespearean emotions to gain ultimate power and made me rank this soap along with Thick of it, and Yes Minister!!

Let’s rewind the topic to kid again, we have called our new-born “Kabir”, a name that caused some disagreement with my other half, family and friends. Kabir being an ancient Indian saint, some find the name too dated and others question whether such a name is controversial because it could symbolise a certain section of society or religion. But luckily, with some deep convincing and back channelling (Frank Underwood, #HouseofCards), I managed to persuade everyone that Kabir was the right name for this kid;

My reasons were very simple. 1) It has a nice, simple, easy ring to it, unusual but easy for everyone to pronounce. 2) The original Kabir (The saint from India) did rise above cast, gender and religion and showed society that humanity is the best thing going forward, which always inspired me and influenced me to name my son after him!

OK, that all was personal. It’s rare for me to post personal stuff but emotion is pouring out from me. Everyone says life takes different turn after a child and it may be that that is forcing me to show personal emotion on my tech blog!!Probably this is the first and last time I will talk about things other than tech and product development here!

Let’s get back to business. Looking back to when I last blogged, the main stub was that Mark Zuckerberg (Facebook) bought WhatsApp for $19bn. Looking at the stats, WhatsApp has 450m active users with over 1bn of messages exchanged every day. Facebook is valued at almost $42/user despite the fact that per user revenue is just under a buck – as a result many questioned if WhatsApp was really worth that much. At MWC14 Mark replied to that question with some hesitant affirmation i.e. he thinks it is but he might be wrong for the first time!

So what does this mean for Facebook and especially for Mark Zuckerberg?

He Continues to Lead from the Front
I think Zuckerberg continues to show his astute foresight and strong leadership skills when it comes to social media or new age communication tools, because first he managed to buy Instagram and then WhatsApp, despite both Google and Apple (far more cash riche than Facebook) being on the lookout for new generation tools!

Most Respected Among 21st Century Entrepreneurs
It also show that Zuckerberg enjoys high respect among start-ups or 1st generation entrepreneurs because, if rumours are to be believed, Larry Page from Google tried to offer a higher price to WhatsApp before Facebook bought it. The same is believed to be true for Instagram, which Zuckerberg managed to grab despite Jack Dorsey (Twitter co-founder) being on the Instagram board!

Facebook won’t be vanishing in 4/5 years’ time
Despite promising that WhatsApp will remain as independent as Instagram after buyout, Zuckerberg has managed to expand the Facebook product inventory, especially when some reports suggest that Facebook has already reached maturity and a downhill path might now be inevitable.

But what does this mean for the product development industry?

The Cross-platform Subscription Model has Legs!
WhatsApp is a cross-platform subscription-based messaging service which is not a new phenomenon. Similar services existed from the inception of dot com in the shape of Yahoo, Hotmail and AOL chat and then BBM brought that in on the mobile platform, but WhatsApp made the money. i.e. a lesson can be learned that a product which is better than anyone else’s and accessible from any device can leverage its success!